SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CENIT Bancorp, Inc.
- ----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ----------------------------------------------------------------------
(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 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>
March 17, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Meeting") of CENIT Bancorp, Inc. (the "Company"), which will be held
at The Chrysler Museum of Art Theater, 245 West Olney Road, Norfolk,
Virginia, on April 23, 1997 at 5:00 p.m.
The attached Notice of the Meeting and the Proxy Statement describe the
formal business to be transacted at the Meeting.
The Board of Directors of the Company unanimously recommends a vote "FOR"
each of the four persons who have been nominated to serve as a director
of the Company.
YOUR VOTE IS IMPORTANT. You are urged to sign, date and mail the enclosed
Proxy Card promptly in the postage-paid envelope provided. If you attend
the Meeting, you may vote in person even if you have already mailed in
your Proxy Card.
On behalf of the Board of Directors and all of the employees of the
Company and its subsidiaries, I wish to thank you for your continued
support. We appreciate your interest.
Sincerely yours,
Michael S. Ives
President and Chief Executive Officer
<PAGE>
CENIT Bancorp, Inc.
225 West Olney Road
Norfolk, Virginia 23510
(757) 446-6600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 23, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of CENIT Bancorp, Inc. (the "Company") will be held at The
Chrysler Museum of Art, 245 West Olney Road, Norfolk, Virginia 23510, on
April 23, 1997, at 5:00 p.m.
A proxy statement and a proxy card for the Meeting are enclosed. The
Meeting is for the purpose of considering and voting upon the following matters:
1. The election of four directors for terms of three years each; and
2. Such other matters as may properly come before the Meeting or any
adjournment thereof.
The Board of Directors has established February 27, 1997 as the record
date for the determination of stockholders entitled to notice of and to vote
at the Meeting and at any adjournments thereof. Only record holders of the
common stock of the Company as of the close of business on that date will be
entitled to vote at the Meeting or any adjournments thereof. A list of
stockholders entitled to vote at the Meeting will be available at CENIT
Bancorp, Inc., 225 West Olney Road, Norfolk, Virginia 23510, for a period of
ten days prior to the Meeting and also will be available for inspection at
the Meeting itself.
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY A STOCKHOLDER MAY BE REVOKED
AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING WITH THE
SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING
A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER
PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER,
IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR NAME, YOU
WILL NEED ADDITIONAL DOCUMENTATION FROM THE RECORD HOLDER OF YOUR SHARES TO
VOTE PERSONALLY AT THE MEETING.
By Order of the Board of
Directors
John O. Guthrie
Corporate Secretary
CENIT Bancorp, Inc.
Norfolk, Virginia
March 17, 1997
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
CENIT Bancorp, Inc.
225 West Olney Road
Norfolk, Virginia 23510
(757) 446-6600
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
April 23, 1997
Solicitation and Voting of Proxy.
This proxy statement is being furnished to stockholders of CENIT Bancorp,
Inc. (the "Company"), in connection with the solicitation by its Board of
Directors of proxies to be used at the Annual Meeting of Stockholders (the
"Meeting") to be held at The Chrysler Museum of Art, 245 West Olney Road,
Norfolk, Virginia 23510, on April 23, 1997, at 5:00 p.m., and at any
adjournments thereof. The 1996 Annual Report to Stockholders, including the
consolidated financial statements for the year ended December 31, 1996,
accompanies this proxy statement, which is first being mailed to stockholders
on or about March 17, 1997.
Regardless of the number of shares of common stock owned, it is important
that stockholders be represented by proxy or present in person at the Meeting.
Stockholders are requested to vote by completing the enclosed proxy card and
returning it signed and dated in the enclosed postage-paid envelope.
Stockholders are urged to indicate their vote in the spaces provided on the
proxy card. Proxies solicited by the Board of Directors of the Company will
be voted in accordance with the directions given therein. Where no
instructions are indicated, proxies will be voted FOR the election of each of
the nominees for director named in this proxy statement.
A proxy may be revoked at any time prior to its exercise by filing written
notice of revocation with the Secretary of the Company, by delivering to the
Company a duly executed proxy bearing a later date, or by attending the
Meeting, filing a notice of revocation with the Secretary and voting in
person. However, if you are a stockholder whose shares are not registered
in your name, you will need additional documentation from the record holder of
your shares to vote personally at the Meeting.
The cost of solicitation of proxies in the form enclosed will be borne by
the Company. The Company has engaged Georgeson & Company to assist it in
proxy solicitations regarding the meeting. Georgeson & Company will perform
these services at an anticipated cost of approximately $10,000 plus expenses.
Proxies may also be solicited personally or by telephone, fax, or telegraph
by directors, officers and regular employees of the Company , CENIT Bank, FSB
("CENIT Bank" or the "Bank"), or Princess Anne Bank ("Princess Anne") without
additional compensation. The Company and/or Georgeson & Company will also
request persons, firms and corporations holding shares in their names, or in
the name of their nominees, which are beneficially owned by others, to send
proxy material to and obtain proxies from such beneficial owners, and will
reimburse such holders for their reasonable expenses in doing so.
Voting Securities and Principal Stockholders.
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 Meeting, except as described
below.
The close of business on February 27, 1997 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 Meeting and any
adjournments thereof. The total number of shares of Common Stock outstanding on
the Record Date was 1,639,989.
As provided in the Company's Certificate of Incorporation, record holders of
Common Stock who beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote in respect of the
shares
1
<PAGE>
held in excess of the Limit. A person or entity is deemed to
beneficially own shares owned by an affiliate of, as well as persons acting in
concert with, such person or entity. The Company reserves the right to
determine prior to the Meeting whether any beneficial owner of Common Stock
beneficially owned shares in excess of the Limit at February 27, 1997.
The presence, in person or by proxy, of at least a majority of the total number
of shares of Common Stock entitled to vote (after subtracting any shares held in
excess of the Limit) is necessary to constitute a quorum at the Meeting. In the
event there are not sufficient votes for a quorum at the time of the Meeting,
the Meeting may be adjourned in order to permit the further solicitation of
proxies. With respect to any action to be taken at the Meeting other than the
election of directors, the affirmative vote of a majority of those shares
present and voting on such action will be required.
Securities Ownership of Certain Beneficial Owners.
<TABLE>
The following table sets forth certain information about those persons known
by management to be beneficial owners of more than 5% of the shares of Common
Stock outstanding on February 27, 1997. Persons and groups owning in excess of
5% of the Company's Common Stock are required to file certain reports regarding
such ownership with the Company and with the Securities and Exchange Commission
(the "SEC") in accordance with Sections 13(d) and 13(g) of the Securities
Exchange Act of 1934 (the "Exchange Act").
<CAPTION>
<S> <C> <C> <C>
Title of Class Name and Address of Beneficial Owner Amount and Nature of Reported Percent of
Beneficial Ownership Class (1)
Common Stock Mid-Atlantic Investors ("Mid-Atlantic") 159,625 (2) 9.7%
and related parties
P. O. Box 7574
Columbia, South Carolina 29202
Common Stock CENIT Employees Stock 82,527 (3) 5.0%
Ownership Plan and Trust
("ESOP")
225 West Olney Road
Norfolk, Virginia 23510
<FN>
(1) The total number of shares of Common Stock outstanding at February 27,
1997 was 1,639,989 shares.
(2) This information on beneficial ownership is based solely on a joint
Schedule 13D/A filed on January 27, 1997 by Mid-Atlantic Investors, H.
Jerry Shearer and Jerry Zucker (the "Mid-Atlantic Group") which the
Company has not independently verified. Mr. Zucker disclosed that he has
sole dispositive and voting power over 108,584 shares. Mr. Shearer
disclosed that he has sole dispositive and voting power over 1,041 shares.
All parties report shared dispositive and voting power over 50,000 shares.
(3) Michael S. Ives, John O. Guthrie and David A. Foster administer the ESOP
in their capacity as trustees of the CENIT Employees Stock Ownership Trust
(the "ESOP Trust"). As of the Record Date, 82,527 shares of Common Stock
in the ESOP had been allocated to participating employees, and the
trustees must vote all allocated shares held in the ESOP in accordance
with the instructions of the participating employees. Under the ESOP, the
ESOP trustees have discretionary voting rights as to allocated shares for
which no voting instructions have been received.
</TABLE>
2
<PAGE>
<TABLE>
The following table sets forth certain information, as of February 27, 1997,
about beneficial ownership of the Common Stock of the Company for each director,
certain executive officers and for all directors and executive officers of the
Company as a group.
<CAPTION>
<S> <C> <C>
Name Number of Shares of Ownership as a Percentage
Common Stock of all Shares of
Beneficially Owned (1) Common Stock Outstanding
C. L. Kaufman, Jr. 19,945 1.22%
David L. Bernd 3,000 0.18%
Patrick E. Corbin 8,860 0.54%
J. Morgan Davis 11,287 (2) 0.69%
William H. Hodges 7,945 0.48%
Michael S. Ives 26,736 (2) 1.63%
Frank R. Kollmansperger, Jr. 8,696 (3) 0.53%
Roger C. Reinhold 2,085 0.13%
Anne B. Shumadine 4,440 0.27%
John A. Tilhou 1,948 0.12%
David R. Tynch 2,756 0.17%
John O. Guthrie 8,764 (2) 0.53%
Alvin D. Woods 5,309 (2) 0.32%
All directors and
executive officers as
a group 130,126 (4) 7.93%
<FN>
(1) All shares shown as beneficially owned are owned directly or held by
spouses or children of the named persons, unless otherwise indicated.
(2) Includes 474, 5,381, 948 and 948 shares held in the Management Recognition
Plan ("MRP") Trust as described elsewhere in this proxy statement on
behalf of Messrs. Davis, Ives, Guthrie and Woods, respectively; and 611,
4,380, 2,524 and 2,061 shares held in the ESOP Trust and allocated to
Messrs. Davis, Ives, Guthrie and Woods, respectively.
(3) Includes 4,348 shares held by Tako, Inc., a corporation of which
Mr. Kollmansperger is an executive officer.
(4) Includes 8,987 shares held in the ESOP Trust and 1,880 shares held in the
MRP Trust and allocated to executive officers other than Messrs. Davis,
Ives, Guthrie and Woods.
</TABLE>
ELECTION OF DIRECTORS AT THE MEETING
Pursuant to its bylaws, the number of directors of the Company is set at eleven
unless otherwise designated by the Board of Directors. Each of the members of
the Board of Directors of the Company also serves presently as a director of
one or more of the bank subsidiaries. Directors are elected for staggered
terms of three years each, with a term of office of only one of the three
classes of directors expiring each year. Directors serve until their
successors are elected and qualified. No person being nominated as a
director is being proposed for election pursuant to any agreement or
understanding between any person and the Company.
The four nominees proposed for election at the Meeting are Messrs. David L.
Bernd, Patrick E. Corbin, John A. Tilhou, and David R. Tynch. Each nominee is
presently a director of the Company. The Board of Directors believes that the
nominees will stand for election and will serve if elected. However, in the
event that any such nominee is unable to serve or declines to serve for any
reason, it is intended that proxies will be voted for the election of the
balance of those nominees named and for such other persons as may be designated
by the present Board of Directors. Unless authority to vote for
3
<PAGE>
the directors is withheld, it is intended that the shares represented by the
enclosed Proxy will be voted FOR the election of the four nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED
IN THIS PROXY STATEMENT.
Mid-Atlantic has indicated an intention to nominate up to three persons as
directors of the Company at the Meeting. These individuals, Bonnie N. Curling
of Chesapeake, Virginia, described by Mid-Atlantic as a businesswoman, William
S. Dodson of Portsmouth, Virginia, described by Mid-Atlantic as an oral and
maxillo-facial surgeon, and Burt Miller, described by Mid-Atlantic as an officer
of local shipping and oil transportation businesses, are reported to be the
beneficial owners of 2,000, 12,678 and 2,200 shares of Common Stock,
respectively.
Information with Respect to Nominees and Continuing Directors.
The following table sets forth, as of February 27, 1997, the names of the
nominees and continuing directors, their ages, and the year in which their terms
as directors of the Company expire. Each of the listed directors became a
director of the Company at the time of its incorporation in 1991, except for
Messrs. Reinhold and Tynch, who became directors of the Company on April 1,
1994, and Messrs. Davis and Tilhou, who became directors on August 16, 1995.
<TABLE>
<S> <C> <C> <C>
Expiration
of Term as
Positions Held Company
Name with the Company Age Director
Nominees
David L. Bernd Director 48 1997
Patrick E. Corbin Director 43 1997
John A. Tilhou Director 43 1997
David R. Tynch Director 49 1997
Continuing Directors
J. Morgan Davis Director 46 1998
William H. Hodges Director 67 1998
Roger C. Reinhold Director 55 1998
Anne B. Shumadine Director 54 1998
Michael S. Ives President/Chief 44 1999
Executive Officer/
Director
C. L. Kaufman, Jr. Chairman of the 69 1999
Board/Director
Frank R. Kollmansperger, Jr. Director 69 1999
</TABLE>
Set forth below is certain information with respect to the directors of the
Company. Unless otherwise indicated, the principal occupation listed for each
person below has been his or her principal occupation for the past five years.
4
<PAGE>
C. L. Kaufman, Jr., serves as Chairman of the Board of Directors of the
Company and has been a director of CENIT Bank since 1981. He is self-employed
in the management of investments in both a personal and fiduciary capacity.
David L. Bernd has been a director of CENIT Bank since 1984. Mr. Bernd is
presently President and Chief Executive Officer of Sentara Health System,
a regional health services corporation where he has been employed since 1973.
Patrick E. Corbin is a certified public accountant and a principal of Carter
Corbin & Co., an accounting firm, and has been employed by that firm since
1980. He has been a director of CENIT Bank since 1988.
J. Morgan Davis was elected a director of the Company on August 16, 1995 and
has been the President and Chief Executive Officer of Princess Anne since 1985.
William H. Hodges has served as a director of CENIT Bank since 1989, when he
retired as a judge of the Virginia Court of Appeals. Judge Hodges had served on
the Court of Appeals since his appointment to that position in 1985, and had
previously served as a state circuit court judge. He now acts as a consultant
and in-house counsel to Plasser American Corporation in Chesapeake, Virginia.
Michael S. Ives has been a director of CENIT Bank and has been the President
and Chief Executive Officer of CENIT Bank since January, 1987.
Frank R. Kollmansperger, Jr., served as Chairman of the Board of Directors of
CENIT Bank from 1987 to 1996 and has been a director of CENIT Bank since 1978.
Mr. Kollmansperger serves as President of a corporation organized for investment
purposes that is owned by family members, and is a management consultant.
Roger C. Reinhold became a director of the Company and CENIT Bank on April 1,
1994. Prior to April 1, 1994, Mr. Reinhold had been President and Chief
Executive Officer of Homestead Savings Bank, F.S.B. ("Homestead") since 1982.
He joined Homestead in 1972.
Anne B. Shumadine was elected as a director of CENIT Bank in 1991. Mrs.
Shumadine is President of Signature Financial Management, Inc., a financial
planning firm. She is also an attorney and member of Mezzullo & McCandlish, A
Professional Corporation. Prior to that she was an attorney and principal of
Shumadine & Rose, P.C. in Norfolk, Virginia. Before founding that firm in 1988,
she practiced law in the Norfolk office of McGuire, Woods, Battle & Boothe
beginning in 1983.
John A. Tilhou was elected a director of the Company on August 16, 1995. He
is the Chairman of the Board of Princess Anne where he has been a board member
since 1992. Mr. Tilhou is an attorney and member of the law firm of Mays &
Valentine, which he joined in 1996. Prior to that, he was an attorney and
partner at Pender and Coward, P.C., a firm he joined in 1983.
David R. Tynch became a director of the Company and CENIT Bank on April 1,
1994. Mr. Tynch is President and Managing Partner of the law firm of Cooper,
Spong & Davis, P.C. in Portsmouth, Virginia. He joined that firm in 1986.
Prior to April 1, 1994, Mr. Tynch had been a director of Homestead since 1985.
Meetings of the Board and Committees of the Board.
During 1996, the Board of Directors of the Company held twelve regular meetings
and one special meeting. No director of the Company who served as a director
during 1996 attended fewer than 75% in the aggregate of the total number of the
Company's board meetings and the total number of meetings of board committees on
which such director served. The Boards of Directors of the Company and the
bank subsidiaries have established various committees, including Audit,
Compensation, and Nominating Committees.
The Board of Directors has established an Audit Committee that is composed of
directors Corbin, Kollmansperger, Bernd, Reinhold and Tilhou and is chaired by
Mr. Corbin. This Committee meets quarterly with the Company's and the bank
subsidiaries' internal auditor, and periodically with the Company's and the
bank subsidiaries' external auditors, and reports
5
<PAGE>
to the Board of Directors and to senior management on the Company's and the
bank subsidiaries' financial condition and internal auditing practices and
procedures. During the year ended December 31, 1996, the CENIT Bancorp Audit
Committee met three times and the Princess Anne Bank Audit Committee met once.
The Compensation Committee of the Board of Directors consists of directors
Hodges, Corbin, Reinhold, Shumadine and Tilhou and is chaired by Judge Hodges.
This Committee meets periodically to evaluate the compensation and fringe
benefits of the Company's and the bank subsidiaries' directors, officers and
employees. During the year ended December 31, 1996, the Compensation Committee
met twice.
The Board of Directors of the Company appoints a Nominating Committee each year
prior to the annual meeting of its stockholders. The Nominating Committee for
the 1996 annual meeting consisted of directors Kollmansperger, Ives and
Shumadine, and met twice in 1996. The Committee considers and recommends the
nominees for director to stand for election at the Company's annual meeting of
stockholders.
Directors' Fees.
Each of the Company's directors, other than the President of the Company and
the President of Princess Anne, receives a director's fee of $900 per month plus
a $300 attendance fee for each of the 12 regular monthly meetings. Each of
CENIT Bank's directors, other than the Chairman of the Board of the Company and
the President of CENIT Bank, receives a director's fee of $600 per month. The
Chairman of the Board of the Company receives an additional fee of $900 per
month. Mr. Tilhou, as Chairman of the Board of Princess Anne, receives a
director's fee of $500 per month plus a $150 attendance fee for each of Princess
Anne's 24 regular semi-monthly meetings. Messrs. Ives and Davis, as employees,
do not receive director's fees from any entity.
Directors do not receive separate fees for attendance at committee meetings.
6
<PAGE>
Executive Compensation.
The following table provides certain summary information concerning the
compensation of the Company's chief executive officer, Princess Anne's chief
executive officer and certain other executive officers for the periods
indicated. Because during 1996 the executive officers listed below were the
only executive officers of the Company, or banking subsidiaries, whose total
salary and bonus compensation exceeded $100,000, no disclosure is made in this
table or elsewhere in this proxy statement regarding the compensation of other
executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation Long-Term Compensation
Awards
<S> <C> <C> <C> <C> <C> <C>
Securities
Underlying All Other
Name and Principal Restricted Options/SARS Compensation
Position Year Salary Bonus Stock Award (#) (6)
Michael S. Ives 1996 $167,820 $30,000 $33,556 (1)(4) 2,434 $52,231
President and 1995 166,410 35,640 37,307 (2)(4) 2,434 84,298
CEO, CENIT 1994 165,000 63,946 22,287 (3)(4) 2,434 22,149
Bancorp, Inc.
and CENIT Bank
J. Morgan Davis 1996 114,000 10,000 16,415 (1)(4) 1,000 32,043
President and 1995 114,000 14,500 -- -- 132,897
CEO, Princess 1994 90,000 18,250 -- 1,009 (5) 30,245
Anne Bank
John O. Guthrie 1996 88,000 12,000 10,943 (1)(4) 800 35,068
Senior Vice 1995 88,000 9,674 12,166 (2)(4) 800 37,480
President/ 1994 88,000 12,320 7,268 (3)(4) 800 15,467
CFO/Corporate
Secretary
CENIT Bancorp,Inc.,
and CENIT Bank
Alvin D. Woods 1996 80,000 22,000 10,943 (1)(4) 800 34,081
Senior Vice 1995 78,000 14,356 12,166 (2)(4) 800 33,065
President/ 1994 78,000 17,516 7,268 (3)(4) 800 14,780
Credit Policy &
Admin.
CENIT Bancorp,Inc./
Senior Vice President/
Chief Lending Officer
CENIT Bank
<FN>
_______________
(1) Represents 969, 474, 316 and 316 shares awarded to Messrs. Ives, Davis,
Guthrie and Woods, respectively, under the MRP, valued at $34.63 per share
as of May 1, 1996, the date on which the grants were effective. Under
these grants, Messrs. Ives' and Davis' shares become fully vested at the
end of three years from the date of the grant, and Messrs. Guthrie's and
Woods' shares become fully vested at the end of five years.
(2) Represents 969, 316 and 316 shares awarded to Messrs. Ives, Guthrie and
Woods, respectively, under the MRP, valued at $38.50 per share as of
August 15, 1995, the date on which the grants were effective. Under these
grants, Mr. Ives' shares become fully vested at the end of three years
from the date of the grant, and Messrs. Guthrie's and Woods' shares become
fully vested at the end of five years.
(3) Represents 969, 316 and 316 shares awarded to Messrs. Ives, Guthrie and
Woods, respectively, under the MRP, valued at $23.00 per share as of May
1, 1994, the date on which the grants were effective. Under these grants,
Mr. Ives' shares become fully vested at the end of three years from the
date of the grant, and Messrs. Guthrie's and Woods' shares become fully
vested at the end of five years.
7
<PAGE>
(4) The shares held in the MRP Trust will vest in full on the occurrence of
certain other events, including a change in control of the Company or the
executive's death or disability. Regardless of vesting, the executives
are entitled to receive all dividends payable on the restricted shares,
and to direct the MRP trustees as to the manner in which the shares are to
be voted, until the shares are distributed to the executives or are
forfeited. At December 31, 1996, based on the closing stock price of
$41.50 on that date, the value of the remaining restricted stock held on
Mr. Ives', Davis', Guthrie's and Woods' behalf in the MRP Trust was
$223,312, $19,671, $39,342, and $39,342, respectively.
(5) On August 1, 1995, Princess Anne became a wholly-owned subsidiary of the
Company, through an exchange of Princess Anne common stock for shares of
Company common stock (the "share exchange"). Represents 3,000 options in
Princess Anne stock converted by the share exchange ratio of 0.3364 to
1,009 options in the Company's stock.
(6) Includes $4,750, $4,620, and $7,620 contributed to the Bank's 401(k) Plan
by the Bank in 1996, 1995, and 1994, respectively, on behalf of Mr.
Ives; 1,062, 1,251 shares, and 406 shares held in the ESOP Trust allocated
to Mr. Ives in 1996, 1995, and 1994, respectively; $3,000, $4,404, and
$5,808 representing taxable compensation received by Mr. Ives related to
an automobile allowance in 1996, 1995, and 1994, respectively; and
$28,874 in 1995 representing a one-time payment to Mr. Ives for past
accrued vacation paid.
Includes $4,351 contributed to the Bank's 401(k) Plan by the Bank in
1996, and $4,620, and $5,400 contributed to Princess Anne's 401(k) Plan
by Princess Anne in 1995 and 1994, respectively, on behalf of Mr.
Davis; 611 shares held in the ESOP Trust allocated to Mr. Davis in 1996;
$130,460, and $23,077 accrued in 1995 and 1994, respectively, under a
deferred compensation agreement between Mr. Davis and Princess Anne;
and $1,829, $1,686, and $1,686 representing the taxable amount for use of
a Princess Anne vehicle in 1996, 1995 and 1994, respectively. In 1995,
Mr. Davis was paid a total of $235,052 for the termination of the deferred
compensation agreement which included amounts accrued in prior years.
Includes $3,520, $2,976 and $6,472 contributed to the Bank's 401(k) Plan
by the Bank in 1996, 1995 and 1994, respectively, on behalf of Mr.
Guthrie; 674, 800 and 271 shares held in the ESOP Trust allocated to
Mr. Guthrie in 1996, 1995 and 1994, respectively; $3,000, $3,000 and
$3,000 representing taxable compensation received by Mr. Guthrie related
to an automobile allowance in 1996, 1995 and 1994, respectively;
and $1,523 in 1995 representing a one-time payment to Mr. Guthrie for
past accrued vacation paid.
Includes $3,590, $2,771 and $5,906 contributed to the Bank's 401(k) Plan
by the Bank in 1996, 1995 and 1994, respectively, on behalf of Mr. Woods;
642, 720 and 258 shares held in the ESOP Trust allocated to Mr. Woods in
1996, 1995 and 1994, respectively; and $3,000, $3,000 and $3,000
representing taxable compensation received by Mr. Woods related to an
automobile allowance in 1996, 1995 and 1994, respectively.
</TABLE>
8
<PAGE>
The following table provides information on stock option/stock appreciation
rights ("SAR") grants to the Company's Chief Executive Officer and certain other
executive officers during 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential realizable value
at assumed annual rates of
stock price appreciation
Individual Grants for option term(2)
<S> <C> <C> <C> <C> <C> <C>
Number of securities underlying Percent of total options/ Exercise or
Name options/SARs granted (#) (1) SARs granted to employees base price Expiration
in fiscal year ($/Sh) date 5%($) 10%($)
Michael S.Ives
President and CEO 2,434 39.0% $34.63 5/1/06 $53,009 $134,336
J. Morgan Davis 1,000 16.0% 34.63 5/1/06 21,779 55,191
President and CEO
Princess Anne Bank
John O. Guthrie 800 12.8% 34.63 5/1/06 17,423 44,153
Senior Vice President
Alvin D. Woods 800 12.8% 34.63 5/1/06 17,423 44,153
Senior Vice President
<FN>
_______________
(1) The options granted to Messrs. Ives, Davis, Guthrie and Woods vest over a
four-year period, with one-fourth of the options granted becoming
exercisable on each May 1 commencing May 1, 1997. The options may become
exercisable earlier than such dates upon a "change of control" as defined
in the Company's Stock Option Plan, or upon the grantee's retirement,
disability or death. Each optionee was granted limited stock appreciation
rights with respect to all of the shares covered by the options. Upon
exercise of a limited stock appreciation right, the optionee could elect
to receive, in lieu of purchasing stock, either stock or cash equal to the
difference between the fair market value of the underlying shares of the
Common Stock subject to the option on the date of exercise, and the
exercise price of $34.63 per share. A limited stock appreciation right
may be exercised only in the event of a change in control, as defined in
the Stock Option Plan.
(2) Represents gain that will be realized assuming the options were held for
the entire ten-year period and the price of Common Stock increased at
compounded rates of 5% and 10% from the exercise price of $34.63 per
share. Potential realizable values per option or per share under these
rates of stock price appreciation would be $21.78 and $55.19,
respectively. However, these amounts represent assumed rates of
appreciation only. Actual gains, if any, on stock option exercises and
common stockholdings will be dependent on overall market conditions and on
the future performance of the Company and the Common Stock. There can be
no assurance that the amounts reflected in this table will be achieved.
</TABLE>
9
<PAGE>
The following table provides information on the number of shares acquired on
exercise and on the value of unexercised stock options/SARs held by the
Company's Chief Executive Officer and certain other executive officers at
December 31, 1996.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<S> <C> <C> <C> <C>
Number of Value of
Securities Underlying Unexercised
Unexercised Stock In-the-Money Stock
Shares Acquired Value Options/SARs at Options/SARs At
Name on Exercise (#) Realized ($) End of Fiscal Year End of Fiscal Year
Michael S. Ives -- -- 44,389 $1,185,314 (1)
President and CEO,
CENIT Bancorp, Inc.
and CENIT Bank
J. Morgan Davis -- -- 2,581 43,393 (2)
President and CEO,
Princess Anne Bank
John O. Guthrie 2,500 $53,750 10,053 238,861 (3)
Senior Vice President
CENIT Bancorp, Inc.
and CENIT Bank
Alvin D. Woods -- -- 7,872 158,806 (4)
Senior Vice President
CENIT Bancorp, Inc.
and CENIT Bank
<FN>
(1) The market value of Common Stock at December 31, 1996 was $41.50 per
share, and the exercise price is $11.50 per share on 37,087 shares, $23.00
on 2,434 shares, $34.63 on 2,434 shares and $37.00 on 2,434 shares.
(2) The market value of Common Stock at December 31, 1996 was $41.50 per
share, and the exercise price is $17.83 per share on 1,413 shares, $23.18
on 168 shares and $34.63 on 1,000 shares.
(3) The market value of Common Stock at December 31, 1996 was $41.50, and the
exercise price is $11.50 on 6,153 shares, $21.25 on 1,500 shares, $23.00
on 800 shares, $34.63 on 800 shares and $37.00 on 800 shares.
(4) The market value of Common Stock at December 31, 1996 was $41.50, and the
exercise price is $11.50 on 2,472 shares, $21.25 on 3,000 shares, $23.00
on 800 shares, $34.63 on 800 shares and $37.00 on 800 shares.
</TABLE>
Compensation Committee Interlocks and Insider Participation.
There are no known interlocks involving Compensation Committee members and
executive officers of the Company.
During 1996, members of the Compensation Committee engaged in the following
transactions with the Company and its subsidiaries:
Mezzullo & McCandlish, A Professional Corporation. Anne B. Shumadine is a
director of CENIT Bank and Company and also renders, from time to time, certain
legal services to CENIT Bank. The aggregate amount of all fees paid by the
Company and its bank subsidiaries to Mezzullo & McCandlish did not exceed five
percent of the firm's gross revenues during its last full fiscal year. The
Company and its bank subsidiaries believe that their transactions with Mezzullo
& McCandlish have been made on a basis no less favorable than that which would
have been made with unrelated parties.
Pender & Coward, P.C. Until February, 1996, John A. Tilhou was a member of the
law firm of Pender & Coward, P.C., which serves as counsel to Princess Anne.
The aggregate amount of all fees paid by Princess Anne to Pender & Coward,
P.C., did not exceed five percent of the firm's gross revenues during its
last full fiscal year. The Company and its bank
10
<PAGE>
subsidiaries believes that their transactions with Pender & Coward, P.C.,
have been made on a basis no less favorable than that which would have been
made with unrelated parties.
Mays & Valentine. In February, 1996, John A. Tilhou became a member of the law
firm of Mays & Valentine. The aggregate amount of all fees paid by the Company
to Mays & Valentine did not exceed five percent of the firm's gross revenues
during its last full fiscal year. The Company and its bank subsidiaries
believes that their transactions with Mays & Valentine have been made on a
basis no less favorable than that which would have been made with unrelated
parties.
Churchland Branch Lease. CENIT Bank leases its office in the Churchland area
of Chesapeake, Virginia from T. R. & T., a general partnership of which Roger C.
Reinhold and David R. Tynch are two of the partners. This branch was formerly
operated by Homestead. The lease agreement grants the Bank a lease for a term
of 15 years, which commenced February 1, 1986, with options to renew the lease
for four additional terms of five years each. The monthly rent is $3,948 with
adjustments made at the end of each five-year period. The total rent paid for
the year ended December 31, 1996 was $46,905. Based on a review of the lease
in September 1985, the predecessor of the Office of Thrift Supervision approved
the lease in accordance with federal regulations.
Compensation Committee Report on Executive Compensation.
The Compensation Committee (the "Committee"), which is composed of the
nonemployee Directors of the Company listed below, recommends to the Boards of
Directors of the bank subsidiaries the annual salary levels and any bonuses to
be paid to the bank subsidiaries' executive officers. All salaries and bonuses
paid to the Company's executive officers are received by them from their
respective bank subsidiaries in their capacities as officers. The members of
the Committee also serve as the committees with authority to make awards under
the MRP and Stock Option Plan, and this report covers the Committee members'
policies and actions in those capacities.
The Committee recommended the 1996 salaries for executive officers based on a
subjective determination of a reasonable salary level for each officer relative
to the individual's responsibilities and performance. Mr. Ives' salary for 1996
continued at the 1995 level of $167,820.
In 1996, the Bank paid certain bonuses to executive officers pursuant to the
Bank's Key Executive Incentive Plan ("Incentive Plan") based upon 1995
performance. The Incentive Plan provides for the Board of Directors of the
Bank, with the recommendation of the Committee and the Chief Executive Officer,
to establish a target bonus award for each officer early in each year. The
award is expressed as a percentage of the officer's base salary. The Board also
establishes two sets of performance measures under the Incentive Plan. The
first set, Company Performance Measures, consists of specific quantitative
goals with respect to earnings per share growth rate, return on assets,
return on equity, tangible capital ratio, operating efficiency, net interest
margin, charge-offs, non-performing assets and classified assets. The Chief
Executive Officer's performance is determined solely pursuant to these
Company Performance Measures. The second set, Individual Performance
Measures, consists of specific quantitative, qualitative or project-related
goals for the year. With respect to each measure, the Board sets a target
goal and minimum attainment and maximum value levels with points
corresponding to each. The Board also weights the points for each measure
among the officers individually based upon the
relationship of each officer's responsibilities to various corporate results.
The sum of the points for all target goals equates to 100% of the officer's
target bonus award. Achievement above the target goals can result in an award
exceeding the target bonus; however, the maximum award is 40% of base salary,
unless increased by the Board. After the close of the year, the Committee
assesses the extent to which the corporate and individual performance goals have
been attained, and after any adjustments to the total awards or individual
awards, recommends to the Board for final action the bonus awards to be paid to
the officers under the Incentive Plan.
Mr. Ives' 1996 bonus of $30,000, representing 17.9% of 1995 base salary, was
paid pursuant to the Incentive Plan. The bonus was based on 1995 corporate
performance which achieved 50.5% of Mr. Ives' aggregate target points assigned
to the Company Performance Measures, as described above. Mr. Ives' 1995 target
points and actual points (indicated parenthetically) were weighted as follows:
earnings per share growth rate--15% (1.2%); return on assets--5% (0%); return on
equity--15% (2.8%); tangible capital ratio--5% (0%); operating efficiency ratio
- --10% (0%); net interest margin--15% (6.7%); charge-offs--10% (12.5%); non-
performing assets--15% (15.5%); and classified assets--10% (11.8%).
In 1996, the Committee made MRP and Stock Option Plan awards to executive
officers pursuant to a general policy, subject to annual discretion and change,
of making grants on a substantially consistent basis resulting in approximately
the same total awards each year. The Committee determined the individual
officers' respective awards based on a subjective
11
<PAGE>
determination of a reasonable level for each officer relative to the
individual's responsibilities, performance and prior grants. The amounts of
Mr. Ives' awards were determined on this basis.
COMPENSATION COMMITTEE
William H. Hodges
Patrick E. Corbin
Roger C. Reinhold
Anne B. Shumadine
John A. Tilhou
Neither the Compensation Committee report above nor the stock performance graph
that follows is incorporated by reference in any prior or future SEC filings,
directly or by reference to the incorporation of Proxy Statements of the
Company, unless such filing specifically incorporates the report or the stock
performance graph. SEC rules provide that the compensation committee report
and the stock performance graph are not deemed to constitute "soliciting
material" or to be filed with the SEC, and are not subject to SEC Regulations
14A or 14C, except as provided in SEC regulations, or to the liabilities under
Section 18 of the Exchange Act.
Stock Performance Graph.
The following graph provides a comparison with the stated indices of the
percentage change in the Company's cumulative total stockholder return on its
Common Stock for the period beginning August 6, 1992, the date the Company's
stock began trading. The Company's stock performance is compared to the Center
for Research in Securities Prices ("CRSP") Total Return Index for the Nasdaq
Stock Market (U.S. Companies) which is a broad market equity index calculated by
CRSP at the University of Chicago. This index comprises all domestic common
shares traded on the Nasdaq National Market and the Nasdaq Small Cap Market.
In addition, the Company's stock performance is compared to the Nasdaq Total
Return Industry Index of Savings Institutions (SIC Code 603). This industry
index has also been calculated by the CRSP.
It should be noted that in light of the extremely short period of time
reflected by this graph, there is no reason to assume that the performance of
the Company's Common Stock for the period shown on the graph will be reflective
of long-term performance. In any event, the following graph is designed to be
only a general depiction of one method of measure of corporate performance to
be used by stockholders in evaluating the performance of the Company.
12
<PAGE>
Comparison of Cumulative Total Return Among CENIT Bancorp, Inc. CRSP
Total Return Index for the Nasdaq Stock Market (US Companies) and
CRSP Total Return Index for Nasdaq Savings Institutions (SIC Code 603)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
8/6/92 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
CENIT Bancorp, Inc. $100.00 $111.54 $165.89 $162.36 $293.76 338.98
CRSP Index for Nasdaq $100.00 $118.32 $135.82 $132.76 $187.75 230.95
Stock Market
CRSP Index for Savings $100.00 $115.39 $161.94 $165.18 $247.58 317.57
Institutions
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends
B. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used
C. The index level for all series was set to $100.00 on 8/6/92
13
</TABLE>
Employment Agreements.
President and Chief Executive Officer of the Company and CENIT Bank. Under an
Employment Agreement (the "Agreement") entered into between the Company, CENIT
Bank and Michael S. Ives on July 1, 1995 and amended on November 26, 1996, Mr.
Ives is employed as the President and Chief Executive Officer of both the
Company and CENIT Bank. The current term of the Agreement expires June 30,
1998, and the Agreement is renewable by the Boards of Directors of the Company
and CENIT Bank for successive one year terms.
The Agreement provides a base salary of not less than $167,820, subject to
increases approved at the discretion of the Boards of Directors of the Company
and CENIT Bank, and for annual incentive bonuses of up to 40% of Mr. Ives' then
current base salary. The incentive bonus is based on CENIT Bank's attainment of
objective standards of financial performance established by agreement between
Mr. Ives and the Boards of Directors. For the year ended December 31, 1996,
Mr. Ives received base salary in the amount of $167,820. Mr. Ives received a
$30,000 bonus in 1996 for services rendered in 1995. In addition, the
Agreement provides for Mr. Ives' participation in certain fringe benefits, and
in any stock option or similar rights offered to other officers and employees
of CENIT Bank.
The Agreement provides for termination of Mr. Ives' employment for "cause" (as
defined in the Agreement) at any time or in certain events specified by OTS
regulations. In the event that Mr. Ives' employment is terminated for reasons
other than cause, including a voluntary resignation by Mr. Ives upon his failure
to be reelected to his current offices in the Company and CENIT Bank or a
material change in his responsibilities or reduction in base salary, Mr. Ives
would be entitled to continue to receive his base salary for one year from the
date of termination. CENIT Bank is also required to continue Mr. Ives' benefits
plans for a period of one year following a termination without cause. In
addition, if a "change in control" of the Company or CENIT Bank occurs, Mr.
Ives will be entitled to additional compensation if within 12 months thereafter
his employment is terminated without cause or he voluntarily terminates his
employment with CENIT Bank as a result of a material change in his
responsibilities. In these circumstances, Mr. Ives will be entitled to receive,
in lieu of the one-year salary continuation generally provided for in the event
of a termination without cause, a lump sum payment equal to 2.99 times Mr. Ives'
average annual compensation received during the five years next ending prior to
the date of the change of control. A "change of control" is defined in the
Agreement to occur upon any of the following events: (a) the acquisition by any
person or group of 20% or more of the outstanding shares or the voting power of
the outstanding securities of the Company; (b) either a majority of the
directors of Company at the annual stockholders meeting have been nominated
other than by or at the direction of the incumbent directors of the Company's
Board of Directors, or the incumbent directors cease to constitute a majority
of the Company's Board of Directors; (c) the Company's shareholders approve a
merger or other business combination pursuant to which the outstanding common
stock of the Company no longer represents at least 50% of the combined entity
after the transaction; (d) the Company's shareholders approve a plan of complete
liquidation or an agreement for the sale or disposition of all or substantially
all of the Company's assets; or (3) any other event or circumstance determined
by the Company's Board of Directors to affect control of the Company and
designated by resolution of the Board of Directors as a change of control.
Mr. Ives would be entitled to a severance payment of $770,896 in addition to
certain stock option and related stock appreciation rights acceleration rights,
were a change of control of the Company to occur during 1997. Under Section
280G of the Internal Revenue Code, if Mr. Ives' severance payments and the
value of his stock option and stock appreciation rights acceleration equal or
exceed three times his average W-2 compensation for the five tax years
immediately preceding a change in control and if they are contingent upon
the change of control, the amount by which those severance payments and
benefits exceed his average W-2 compensation for the five-year period will
be deemed to be "excess parachute payments." In that event, a 20% excise
tax would be imposed on Mr. Ives' excess parachute payments and the Company
would not be entitled to deduct the excess parachute payments. The
Agreement provides that if the severance payments to Mr. Ives would
otherwise constitute excess parachute payments in the opinion of the
Company's independent accountants, then the Company and CENIT
Bank will reduce the severance payments to an amount that would not give
rise to excess parachute payments.
The Agreement also restricts the ability of Mr. Ives to compete with the
Company or CENIT Bank for a period of 12 months after the termination of his
employment under the Agreement, but this non-competition provision is not
operative following any change of control.
President and Chief Executive Officer of Princess Anne. J. Morgan Davis is
employed by Princess Anne pursuant to the terms of an Employment Agreement
(the "Davis Agreement") entered into between Mr. Davis and Princess Anne as of
January 30, 1995 and amended on November 13, 1996. Under the Davis Agreement,
Mr. Davis is employed as the
14
<PAGE>
President and Chief Executive Officer of Princess Anne for a term ending on
August 1, 1998. The Davis Agreement is renewable by the Board of Directors
of Princess Anne for successive periods of one year.
The Davis Agreement provides for a base salary of $114,000, subject to
increases approved in the discretion of Princess Anne's Board of Directors, and
for Mr. Davis' participation in fringe benefit and other plans offered to other
senior officers of Princess Anne.
The Davis Agreement provides for termination of Mr. Davis' employment for
"cause" (as defined in the Davis Agreement). If Mr. Davis' employment is
terminated by Princess Anne for reasons other than cause, including voluntary
resignation by Mr. Davis upon his failure to be reelected to his current offices
in Princess Anne or a material change in his responsibilities or a reduction in
base salary, Mr. Davis will be entitled to receive his salary and benefits for
a period of one year following termination. In addition, if the termination of
Mr. Davis' employment is associated with a "change of control," Mr. Davis will
be entitled to severance pay equal to 2.99 times the cash compensation received
by Mr. Davis during the 12 months ending immediately prior to the termination of
employment. The term "change of control" is defined in a manner similar to that
provided for in Mr. Ives' Agreement, and is also subject to the limitations of
Section 280G of the Internal Revenue Code.
The Agreement also restricts the ability of Mr. Davis to compete with Princess
Anne for a period of 12 months after the termination of his employment under the
Agreement, but this non-competition provision is not operative following any
change of control.
Transactions with Certain Related Persons.
In the ordinary course of business, the Company's bank subsidiaries have made
loans, and may continue to make loans in the future, to its officers, directors
and employees. Under current policy, such loans are made on substantially the
same terms, including collateral, as are available to the general public. The
previous policy of CENIT Bank permitted the directors and executive officers to
borrow at an interest rate one percentage point in excess of CENIT Bank's then
existing cost of funds.
In the opinion of management, the loans to officers, directors and employees
do not involve more than the normal risk of collectibility.
Set forth below is certain information as of December 31, 1996 as to loans made
by the Company's bank subsidiaries to certain of the Company's directors and
banks' subsidiary executive officers whose aggregate indebtedness to CENIT Bank
or Princess Anne Bank exceeded $60,000 at any time since January 1, 1996.
Except as otherwise indicated, all of the loans are first mortgage loans
secured by the residence of the directors and officers listed.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Largest Amount Balance as of
Maturity Date Outstanding Since December 31, Interest
Date of Loan of Loan January 1, 1996 1996 Rate Type
David L. Bernd(1) 05/87 06/17 $160,039 $157,035 7.875% Fixed
J. Morgan Davis 05/96 06/26 207,000 - 8.125% Fixed
05/96 05/26 68,000 67,727 8.875% Fixed,
Callable
David R. Tynch 07/92 08/07 166,650 156,267 8.000% Fixed
03/90 02/05 24,243 23,474 7.375% Adjustable
<FN>
__________________
(1) Although CENIT Bank's present policy, as now required by law, is to make
loans to directors and executive officers on substantially the same terms
as are available to the general public, this loan was made pursuant to
CENIT Bank's previous policy described above.
15
<PAGE>
</TABLE>
Other Potential Conflicts. Management of the Company does not believe that
any director or officer or affiliate of the Company, or any record or beneficial
owner of more than 5% of the Common Stock of the Company, or any associate of
any such director, officer, affiliate or stockholder, is a party adverse to the
Company or any of its subsidiaries or has a material interest adverse to the
Company or any of its subsidiaries in any material proceeding.
Cooper, Spong & Davis, P.C. David R. Tynch is a member of the law firm of
Cooper, Spong & Davis, P.C. The aggregate amount of all fees paid by the
Company and its bank subsidiaries to Cooper, Spong & Davis did not exceed five
percent of the firm's gross revenues during its last full fiscal year. The
Company and its bank subsidiaries believe that their transactions with Cooper,
Spong & Davis have been made on a basis no less favorable than that which would
have been made with unrelated parties.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the National
Association of Securities Dealers. Officers and directors and greater than ten
percent stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, the
Company is aware Mr. Davis did not report until 1997 a transaction involving the
exercise of warrants for 303 shares that should have been reported in May 1996,
and that Mrs. Shumadine filed a late report of an August 1996 purchase of 200
shares by an adult child then living in her household. In addition, Messrs.
Davis, Tilhou and Stant were required to file amended Forms 3 during 1996 or to
report amended Form 3 holdings on Forms 5 in order to reflect the terms of and
minor differences in rounding the number of Princess Anne stock options and
warrants that had been converted to options and warrants to purchase the
Company's Common Stock.
Independent Accountants.
The Board of Directors has selected the accounting firm of Price Waterhouse
LLP, independent accountants, to be the Company's independent accountants for
the year ended December 31, 1996. A representative of Price Waterhouse LLP is
expected to be present at the Meeting, will have the opportunity to make a
statement at the meeting if he or she desires to do so, and will be available to
respond to appropriate questions. The Board of Directors has not yet made a
determination regarding the selection of independent accountants for the year
ending December 31, 1997. Under the Company's Certificate of Incorporation and
Bylaws, stockholders are not required to ratify or confirm the selection of
independent accountants made by the Board of Directors.
Stockholder Participation.
In the event that a stockholder wishes to submit a proposal for consideration
by the stockholders of the Company at the 1998 Annual Meeting of Stockholders
(the "1998 Meeting"), then in order for the proposal to be includible in the
proxy statement for the 1998 Annual Meeting, such proposal must be received by
the Secretary of the Company no later than November 17, 1997.
The Bylaws of the Company provide a procedure for certain business to be
brought before annual meetings of the Company's stockholders, and such proposals
may be properly brought before the meeting even if they are not includible in
the proxy statement for the meeting, so long as the proposing stockholder
complies with the advance notice provisions of the Bylaws. If written
notice of business proposed to be brought before the 1998 Meeting is given
to the Secretary of the Company, delivered or mailed to and received at the
principal executive offices of the Company not later than November 17, 1997,
such business may be brought before the 1998 Meeting. Information regarding
the contents of the required notice to the Company is to be found in the
Company's Bylaws, which are available from the Company upon request.
Stockholders are also permitted to submit nominations of candidates for the
Board of Directors. If a stockholder wishes to nominate a candidate to stand
for election as a director at the 1998 Meeting, the nomination shall be made by
written notice to the Secretary of the Company, which must be delivered or
mailed to and received at the principal executive offices of the Company not
later than November 17, 1997. The requirements regarding the form and content
of stockholder nominations for directors are also set forth in the Bylaws.
16
<PAGE>
Other Matters Which May Properly Come Before the Meeting.
Neither the Board of Directors nor management of the Company intends to bring
before the Meeting any business other than the matters referred to in the Notice
of Meeting and this Proxy Statement. However, Mid-Atlantic may present one or
more resolutions at the Meeting. These resolutions propose that the
stockholders express a desire that (i) the Board of Directors engage an
investment banker to determine the Company's value and report the investment
banker's conclusions to the stockholders, (ii) the Board of Directors contact
potential acquirors of the Company to determine the possible terms of an
acquisition, (iii) the Board of Directors not adopt or pursue any long-term
plans that would interfere with the acquisition of the Company in the near
term, and (iv) the Company and its subsidiaries not employ members of the
Company's Board of Directors or their law firms as legal counsel. If any of
these proposals is properly presented, the persons named in the proxy intend
to use their discretionary authority to vote against such proposals. If any
other business should be properly presented, the persons named in the proxy
will vote on such matters according to their best judgment. Should any
stockholder of the Company elect to solicit proxies with respect to any of
these proposals or the Mid-Atlantic director nominations, the Company may send
or deliver additional proxy materials to the stockholders.
Whether or not you intend to be present at the Meeting, you are urged to return
your proxy promptly. If you are present at the Meeting and wish to vote your
shares in person, your proxy may be revoked by voting at the Meeting.
Annual Report on Form 10-K and Additional Information.
A copy of Form 10-K as filed with the Securities and Exchange Commission is
available without charge to stockholders upon written request. Requests for
this or other financial information about CENIT Bancorp, Inc., CENIT Bank,
FSB, or Princess Anne Bank should be directed to Stuart F. Pollard, Vice
President Corporate Communications, CENIT Bank, FSB, Post Office Box 1811,
Norfolk,Virginia 23501-1811, Telephone (757) 446- 6692.
By Order of the Board of Directors
John O. Guthrie
Corporate Secretary
CENIT Bancorp, Inc.
Norfolk, Virginia
March 17, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND PROMPTLY RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
17
<PAGE>
- -------------------------------------------------------------------------------
(card)
CENIT BANCORP, INC.
REVOCABLE PROXY
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CENIT BANCORP,
INC., FOR USE ONLY AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 23,
1997 AND ANY ADJOURNMENT THEREOF.
The undersigned hereby acknowledges prior receipt of the Notice of the Annual
Meeting of Stockholders (the "Meeting") and the Proxy Statement describing the
matters set forth below, and indicating the date, time and place of the meeting,
and hereby appoints the Board of Directors of CENIT Bancorp, Inc. (the
"Company"), or any of them, as proxy, each with full power of substitution to
represent the undersigned at the Meeting, and at any adjournment or adjournments
thereof, and thereat to act with respect to all votes that the undersigned would
be entitled to cast, if then personally present on the matters referred to on
the reverse side in the manner specified.
This Proxy, if executed, will be voted as directed, but, if no instructions
are specified, this Proxy will be voted FOR the proposal listed. Please sign
and date this Proxy on the reverse side and return it in the enclosed
envelope. This Proxy must be received by the Company no later than
April 23, 1997.
This Proxy is revocable and the undersigned may revoke it at any time prior
to the Meeting by giving written notice of such revocation to the Secretary
of the Company or by filing with the Secretary of the Company a duly executed
proxy bearing a later date. Should the undersigned be present and wish to
vote in person at the Meeting, or any adjournment thereof, the undersigned
may revoke this Proxy by giving written notice of such revocation to the
Secretary of the Company on a form provided at the Meeting.
(Continued and to be signed on reverse side)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
Please mark your vote as indicated in this example /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
FOR WITHHOLD
(Except As Marked AUTHORITY
To The Contrary)
/ / / /
(1) Election of Directors of all nominees (2) To vote, in its discretion,
listed David L. Bernd, Patrick E. Corbin, upon any other matters that
John A. Tilhou, David R. Tynch may properly come before
the Annual Meeting or any
adjournment thereof. See
"Other Matters Which May
Properly Come Before the
Meeting" in the CENIT
Bancorp, Inc. Proxy
Statement.
INSTRUCTION: To withhold your vote for any individual nominee, write that
nominee's name on the line provided below.
- --------------------------------------------------------------------------
Signatures(s)__________________________________________ Date_____________,1997
Please sign your name exactly as it appears hereon. Joint accounts need only
one signature, but all accountholders should sign if possible. When signing as
an administrator, agent, corporation officer, executor, trustee, guardian or
similar position or under a power of attorney, please add your full title to
your signature. PLEASE RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
