<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
HAMILTON 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)(1) 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> 2
(HAMILTON BANCORP LOGO)
HAMILTON BANCORP INC.
July 23, 1999
Dear Stockholder:
On behalf of the Board of Directors, I am pleased to extend to you an
invitation to attend the Annual Meeting of Stockholders of Hamilton Bancorp Inc.
to be held in Miami, Florida, on Wednesday, August 18, 1999, beginning at 9:30
a.m., Eastern Daylight Time.
The notice of meeting and proxy statement which appear on the following
pages contain information about matters which are to be considered at the
meeting. During the meeting we will also review our results of operations for
the past year and present other information concerning Hamilton Bancorp Inc. and
its subsidiary, Hamilton Bank, N.A. The meeting should be interesting and
informative, and we hope you will be able to attend.
In order to ensure that your shares are voted at the meeting, please
complete, date, sign and return the enclosed proxy in the enclosed postage-paid
envelope at your earliest convenience. Every stockholder's vote is important,
whether you own a few shares or many.
Sincerely yours,
Eduardo A. Masferrer
Chairman and Chief Executive Officer
3750 N.W. 87th Avenue, Miami, Florida 33178
<PAGE> 3
HAMILTON BANCORP INC.
3750 N.W. 87th Avenue, Miami, Florida 33178
NOTICE OF ANNUAL MEETING
TO BE HELD ON AUGUST 18, 1999
July 23, 1999
The Annual Meeting of Stockholders of Hamilton Bancorp Inc. will be
held at the offices of Hamilton Bancorp at 3750 N.W. 87th Avenue, Miami,
Florida, on Wednesday, August 18, 1999 at 9:30 a.m., Eastern Daylight Time, for
the purpose of considering and acting on the following matters:
1. a proposal to elect the ten nominees named in the attached
proxy statement as directors of Hamilton Bancorp in each case
until their successors are duly elected and qualified;
2. such other business as may properly come before the Meeting or
any adjournments thereof.
All holders of record of Hamilton Bancorp's Common Stock on the books
of Hamilton Bancorp at the close of business on July 16, 1999, are entitled to
notice of and to vote at the Meeting.
By Order of the Board of Directors.
J. Reid Bingham
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE TO ENSURE THAT YOUR SHARES ARE VOTED AT THE MEETING. YOUR VOTE IS
IMPORTANT, WHETHER YOU OWN A FEW SHARES OR MANY.
<PAGE> 4
HAMILTON BANCORP INC.
3750 N.W. 87th Avenue, Miami, Florida 33178
-------------------
PROXY STATEMENT
-------------------
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Hamilton Bancorp Inc. in connection with the Annual Meeting of Stockholders of
Hamilton Bancorp and any adjournments or postponements thereof to be held at the
offices of Hamilton Bancorp at 3750 N.W. 87th Avenue, Miami, Florida, on
Wednesday, August 18, 1999, at 9:30 a.m., Eastern Daylight Time. The
accompanying form of proxy is for use at the Meeting if a stockholder does not
attend the Meeting in person or wishes to have his or her shares voted by proxy
even if he or she attends the Meeting. The proxy may be revoked by the person
giving it at any time before it is exercised by (i) giving written notice of
such revocation to the Secretary of Hamilton Bancorp (ii) submitting a proxy
having a later date or (iii) appearing at the Meeting and deciding to vote in
person. All shares represented by valid proxies received pursuant to this
solicitation and not revoked before they are exercised will be voted in the
manner specified thereon. If no specification is made, proxies will be voted in
favor of approval of Proposal 1 described below. This proxy statement, the
enclosed proxy and the 1998 Annual Report to Stockholders are being first mailed
to Hamilton Bancorp's stockholders entitled to notice of the Meeting on or about
July 30, 1999. The Annual Report does not constitute "soliciting material" and
is not to be deemed "filed" with the Securities and Exchange Commission.
Hamilton Bancorp will bear the cost of preparing this proxy statement
and of soliciting proxies in the enclosed form. Proxies may be solicited by
employees of Hamilton Bancorp and its subsidiaries, either personally, by letter
or by telephone. Such employees will not be specifically compensated for
soliciting such proxies.
VOTING SECURITIES AND PRINCIPAL HOLDERS
As of July 16, 1999, Hamilton Bancorp had outstanding 10,070,313 shares
of Common Stock, par value $.01 per share. Each holder of Common Stock will have
the right to one vote for each share of such stock standing in such holder's
name on the books of Hamilton Bancorp as of the close of business on July 16,
1999 with respect to each matter voted on at the Meeting. Hamilton Bancorp is
not aware of any stockholder who was the beneficial owner of more than 5% of the
outstanding shares of Common Stock on July 16, 1999 except for (i) Mr. Eduardo
A. Masferrer who reports beneficial ownership of 1,071,628 shares of Common
Stock or 10.59% of the outstanding shares of Common Stock and (ii) Provident
Investment Counsel, Inc. which reported on a Schedule
<PAGE> 5
13G filed with the Securities and Exchange Commission on January 28, 1999 that
it beneficially owned at December 31, 1998, 832,162 shares of Common Stock or
8.26% of the outstanding shares of Common Stock.
The presence in person or by proxy of a majority of the shares of
Common Stock outstanding on July 16, 1999 will constitute a quorum for purposes
of conducting business at the Meeting. For purposes of determining the votes
cast with respect to any matter presented for consideration at the Meeting only
those votes cast "FOR" or "AGAINST" are included. Abstentions and broker non-
votes (i.e., shares held by brokers on behalf of their customers, which may not
be voted on certain matters because the brokers have not received specific
voting instructions from their customers with respect to such matters) will be
counted solely for purpose the of determining whether a quorum is present.
PROPOSAL 1. ELECTION OF DIRECTORS
INFORMATION AS TO DIRECTORS AND EXECUTIVE OFFICERS
Directors of Hamilton Bancorp will be elected by a plurality of the
votes, represented in person or by proxy, cast at the Annual Meeting. Shares
cannot be voted for a greater number of persons than the number of nominees
named herein. Should any nominee be unavailable for election by reason of death
or other unexpected occurrence, the enclosed proxy, to the extent permitted by
applicable law, may be voted with discretionary authority in connection with the
nomination by the Board of Directors and election of any substitute nominee. In
addition, the Board may reduce the number of directors to be elected at the
Meeting.
The Board of Directors recommends that the stockholders elect the ten
(10) nominees for directors listed below as directors of Hamilton Bancorp in
each case until their successors are duly elected and qualified.
PROXIES, UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THE
ELECTION OF THE TEN (10) NOMINEES NAMED BELOW, IN EACH CASE UNTIL THEIR
SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
Listed below are the names of the ten nominees to serve as directors,
together with their ages, their principal occupations during the past five
years, any other directorships they hold with companies having securities
registered under the Securities Exchange Act of 1934 and the years during which
their current consecutive terms as directors of Hamilton Bancorp first
commenced. No director or nominee for director beneficially owns more than 5% of
the outstanding shares of Common Stock except for Mr. Eduardo A. Masferrer who
reports beneficial ownership of 10.59% of the outstanding shares of Common
Stock. Also listed below are the other Executive Officers of Hamilton Bancorp
together with their ages, their principal occupations during the past five years
and any other directorships they hold with companies having securities
registered under the Securities Exchange Act of 1934.
2
<PAGE> 6
DIRECTORS' AND NOMINEES' NAME, AGE, PRINCIPAL OCCUPATION AND CERTAIN OTHER
DIRECTORSHIPS
Eduardo A. Masferrer, age 50 Director Since 1988
MR. MASFERRER has served as Hamilton Bancorp's Chairman of the Board
since 1988 and as its President and Chief Executive Officer since 1990.
Mr. Masferrer has also served as a director of Hamilton Bank, N.A.
since his election in 1988, as Chief Executive Officer of Hamilton Bank
since 1990 and as President of Hamilton Bank from 1990 to 1997. Mr.
Masferrer is the husband of Ms. Maura A. Acosta.
William Alexander, age 76 Director Since 1997
MR. ALEXANDER has served as a director and Vice Chairman of Hamilton
Bank since his election in 1988.
Juan Carlos Bernace, age 38 Nominee for Director
MR. BERNACE has served as an Executive Vice President of Hamilton
Bancorp since 1997 and as President, Senior Lending Officer and a
Director of Hamilton Bank since November 1997, as Executive Vice
President of Hamilton Bank from 1996 to 1997 and as Senior Vice
President-Manager of Corporate Trade Finance of Hamilton Bank from
prior to 1994 to 1996.
William Bickford, age 56 Director Since 1997
MR. BICKFORD is a civil engineer and, since prior to 1994, has served
as the President of Consulta, a construction and engineering firm
located in Guatemala, as the President of Tritech, a distributor of
industrial products in Central America and Mexico, and as the President
of Precon, a construction and engineering firm located in Guatemala.
Ronald E. Frazier, age 56 Nominee for Director
MR. FRAZIER has served as a director of Hamilton Bank since his
election in 1988. Mr. Fraizer is the founder and since its
establishment in 1973 has served as the President of Ronald E. Frazier
& Associates, P.A., a Miami, Florida, consulting firm specializing in
architecture and urban design planning.
Thomas F. Gaffney, age 66 Director Since 1997
MR. GAFFNEY currently serves as a director of various non-United States
corporations and investment funds. From prior to 1994 to 1995 Mr.
Gaffney served as the London general manager of Bankgesellshaft, Berlin
and Landesbank, Berlin.
Ronald A. Lacayo, age 43 Director Since 1999
MR. LACAYO has served as a director of Hamilton Bank since his election
in 1988. Since January, 1999 Mr. Lacayo has served as Chairman and
Chief Executive Officer of Banco Nicaraguense de Industria y Comercio,
S.A., a commercial bank in Nicaragua. Since 1996, Mr. Lacayo also has
served as the President and Chief Executive Officer of Crugerwets
Capital Partners, Ltd., a financial consulting firm in Miami, Florida,
and from prior to 1994 as the Secretary of The Record Companies
3
<PAGE> 7
Group, an El Salvadorian manufacturer of automotive batteries. From
prior to 1994 to 1997 Mr. Lacayo was the President and Chief Executive
Officer of Raymel Corporation, a sportswear manufacturer in Miami,
Florida.
George A. Lyall, age 74 Nominee for Director
MR. LYALL has served as a director of Hamilton Bank since his election
in 1988. Since prior to 1994 Mr. Lyall has served as the Chairman of
the Board of Miami Air International, a Miami, Florida, charter air
carrier.
Ben L. Moyer, age 57 Nominee for Director
MR. MOYER has served as a director of Hamilton Bank since his election
in 1999. Since 1996 Mr. Moyer has served as a Senior Consultant for
H.C. Wainwright & Co., Inc., a Boston, Massachusetts, asset management
and bank consulting firm. From 1968 to 1996 Mr. Moyer was an officer of
First National Bank of Boston, serving as Director Global Trade from
1989 to 1994 and as Director of International Business and Development
from 1994 to 1996.
Virgilio E. Sosa, Jr., age 42 Director Since 1997
MR. SOSA is an architect and, since prior to 1994, has served as the
President of Master Builders, Inc., a Panamanian construction company,
and as the President of IDG, Inc., a Panamanian real estate holding
company.
OTHER EXECUTIVE OFFICERS NAME, AGE, PRINCIPAL OCCUPATION AND CERTAIN OTHER
DIRECTORSHIPS
Maura A. Acosta, age 49
MS. ACOSTA has served as a Director of Hamilton Bancorp from 1997 to
1999, as an Executive Vice President since 1997 and as First Vice
President from 1993 to 1997. Ms. Acosta has also served as an Executive
Vice President of Hamilton Bank since 1994 and prior to 1994 as a
Senior Vice President of Hamilton Bank. Ms. Acosta is the wife of Mr.
Eduardo A. Masferrer.
J. Reid Bingham, age 53
MR. BINGHAM has served as General Counsel and Secretary of Hamilton
Bancorp and Hamilton Bank since 1996. From 1994 to 1996 Mr. Bingham was
a partner in the law firm of Concepcion, Sexton, Bingham & Urdaneta.
Mr. Bingham also serves as a director of Johnston Industries Inc., a
publicly held company engaged in the manufacture of textile products.
Raul Camaliche, age 42
MR. CAMALICHE has served as Senior Vice President and Chief Information
Officer of Hamilton Bank since December 1998. From 1995 to 1998 Mr.
Camaliche served as a Vice President-Group Systems Manager for the
Latin American Region of Barclays Bank PLC. From prior to 1994 to 1995
Mr. Camaliche served as a Second Vice President - Information Systems
of Chase Manhattan Bank, N.A.
4
<PAGE> 8
Luis Entenberg, age 68
MR. ENTENBERG has served as Senior Vice President-International Banking
Services of Hamilton Bank since April 1999. From prior to 1994 to 1999
Mr. Entenberg served as a Vice President of CitiBank International,
Miami, Florida.
Guillermo Gomez, age 40
MR. GOMEZ has served as Senior Vice President - Corporate Lending - of
Hamilton Bank since January 1998. From 1996 to 1998 Mr. Gomez was
Senior Vice President - Corporate and Private Lending and Cash
Management at City National Bank of Florida and from prior to 1994 to
1996 Team Leader in Corporate Lending at Intercontinental Bank, Miami,
Florida.
Claudia Helguero, age 38
MS. HELGUERO has served as Senior Vice President - Discount &
Forfaiting - of Hamilton Bank since August 1998 and as Second Vice
President and Vice President. from 1995 to 1998. From prior to 1994 to
1995 Ms. Helguero was a Domestic Lender at BarnettBank of South
Florida.
John M. R. Jacobs, age 49
MR. JACOBS has served as Senior Vice President - Finance since November
1998; as Senior Vice President - Commodities/Banking Relations of
Hamilton Bank from January 1998 to November 1998 and as Vice President
- Commodities Group of Hamilton Bank from January 1997 to January 1998.
From prior to 1994 to 1997 Mr. Jacobs was Chief Financial Officer of
Amerop Sugar Corporation, a sugar trader.
Maria L. Justo, age 40
MS. JUSTO has served as Senior Vice President - Senior Credit Officer
of Hamilton Bank since July 1999. From 1996 to 1999 Ms. Justo was
President and Chief Executive Officer of Eagle National Bank of Miami
and from prior to 1994 to 1996 Ms. Justo was Vice President of Barclays
Bank PLC.
Adolfo Martinez, age 49
MR. MARTINEZ has served as a Senior Vice President - Correspondent
Banking and Structuring and Syndications since 1998 and as Senior Vice
President - Capital Markets of Hamilton Bank from prior to 1994 to
1998.
Hector F. Ramirez, age 48
MR. RAMIREZ has served as a Senior Vice President - Structured Finance
of Hamilton Bank since March 1998 and as Vice President - Structured
Finance Group of Hamilton Bank from 1996 to March 1998. From 1994 to
1996 Mr. Ramirez was Regional Manager for GE Capital Corp.
Sergio Sotolongo, age 47
MR. SOTOLONGO has served as Senior Vice President-International Banking
Services of Hamilton Bank since 1996. From prior to 1994 to 1996 Mr.
Sotolongo served as
5
<PAGE> 9
a Senior Vice President and Deputy Manager of the International
Division of Popular Bank of South Florida.
John F. Stumpff, age 51
MR. STUMPFF has served as Senior Vice President of Hamilton Bancorp
since 1998. From prior to 1994 to 1998 Mr. Stumpff served as Senior
Vice President- Administration of Hamilton Bank.
OWNERSHIP OF EQUITY SECURITIES
The following table sets forth information concerning the beneficial
ownership of the Common Stock of Hamilton Bancorp as of July 16, 1999 by (i)each
director and nominee for director, (ii) each person known to Hamilton Bancorp to
be the beneficial owner of more than 5% of its outstanding Common Stock, (iii)
the Chief Executive Officer and the other Executive Officers listed in the
summary compensation table and (iv) all directors and Executive Officers of
Hamilton Bancorp as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percentage of Outstanding
Name of Beneficial Owner Beneficial Ownership Shares Owned
- ------------------------- -------------------- -------------
<S> <C> <C>
Eduardo A. Masferrer................. 1,071,628(1) 10.59%
William Alexander ................... 44,875(2) *
William Bickford .................... 61,803(3) *
Thomas F. Gaffney ................... 1,000(4) *
Ronald A. Lacayo..................... 122,685(5) 1.22%
Virgilio E. Sosa, Jr. ............... 266,918(6) 2.65%
Juan Carlos Bernace.................. 82,414(7) *
Ronald E. Frazier.................... 48,750(8) *
George A. Lyall...................... 52,740(9) *
Ben L. Moyer......................... 1,000 *
Maura A. Acosta...................... 79,712(10) *
John M. R. Jacobs ................... 5,719(11) *
J. Reid Bingham...................... 33,969(12) *
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C> <C>
All Directors and Executive
Officers of Hamilton Bancorp as a
group, including those listed above
(21 persons) 1,999,530(13) 18.92%
Provident Investment Counsel, Inc.
300 N. Lake Ave. 832,162(14) 8.26%
Pasadena, CA 91101
</TABLE>
- ------------------------
* Less than 1%
(1) Includes (i) 17,687 shares of Common Stock held by Mr. Masferrer and
his wife, Maura A. Acosta, as joint tenants with rights of
survivorship, (ii) 48,750 shares of Common Stock issuable upon the
exercise of options granted to Mr. Masferrer under the 1993 Stock
Option Plan and (iii) 261,089 shares of Common Stock held in a trust
established by Mr. Masferrer for the benefit of Mr. Masferrer's and Ms.
Acosta's children. Mr. Masferrer does not exercise voting or investment
control over the shares of Common Stock held by the trust and,
accordingly, disclaims beneficial interest in the shares of Common
Stock held in the trust other than those shares deemed to be indirectly
beneficially owned by minor children of Mr. Masferrer or Ms. Acosta
living in their household.
(2) Includes 29,249 shares of Common Stock issuable upon the exercise of
options granted to Mr. Alexander under the 1993 Stock Option Plan. Does
not include 2,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Alexander under the 1993 Stock Option Plan,
which options are not currently exercisable.
(3) Represents 64,803 shares of Common Stock held by Beneficial Express,
Inc., a Panamanian corporation, of which Mr. Bickford is a significant
shareholder. Does not include 5,000 shares of Common Stock issuable
upon the exercise of options granted to Mr. Bickford under the 1993 and
1998 Stock Option Plan, which options are not currently exercisable.
(4) Does not include 5,000 shares of Common Stock issuable upon the
exercise of options granted to Mr. Gaffney under the 1993 Stock Option
Plan, which options are not currently exercisable.
(5) Includes 25,750 shares of Common Stock issuable upon the exercise of
options granted to Mr. Lacayo under the 1993 Stock Option Plan. Does
not include 2,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Lacayo under the 1993 Stock Option Plan, which
options are not currently exercisable.
(6) Includes 144,509 shares of Common Stock held by VES Ventures Inc., a
Panamanian corporation, of which Mr. Sosa is principal shareholder.
Does not include 5,000 shares of Common Stock issuable upon the
exercise of options granted to Mr. Sosa under the 1993 Stock Option
Plan, which options are not currently exercisable.
7
<PAGE> 11
(7) Includes 81,014 shares of Common Stock issuable upon the exercise of
options granted to Mr. Bernace under the 1993 Stock Option Plan. Does
not include 55,956 shares of Common Stock issuable upon the exercise of
options granted to Mr. Bernace under the 1993 Stock Option Plan, which
options are not currently exercisable.
(8) Includes 48,750 shares of Common Stock issuable upon the exercise of
options granted to Mr. Frazier under the 1993 Stock Option Plan. Does
not include 2,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Frazier under the 1993 Stock Option Plan, which
options are not currently exercisable.
(9) Includes 48,750 shares of Common Stock issuable upon the exercise of
options granted to Mr. Lyall under the 1993 Stock Option Plan. Does not
include 2,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Lyall under the 1993 Stock Option Plan, which
options are not currently exercisable.
(10) Includes (i) 17,687 shares of Common Stock held by Ms. Acosta and her
husband, Eduardo A. Masferrer, as joint tenants with rights of
survivorship and (ii) 61,525 shares of Common Stock issuable upon the
exercise of options granted to Ms. Acosta under the 1993 Stock Option
Plan. Does not include 1,091,941 of the shares of Common Stock reported
as beneficially owned by Eduardo A. Masferrer or 26,450 shares of
Common Stock issuable upon the exercise of options granted to Ms.
Acosta under the 1993 Stock Option Plan, which options are not
currently exercisable.
(11) Represents 5,719 shares of Common Stock issuable upon the exercise of
options granted to Mr. Jacobs under the 1993 Stock Option Plan. Does
not include 12,860 shares of Common Stock issuable upon the exercise of
options granted to Mr. Jacobs under the 1993 Stock Option Plan, which
options are not currently exercisable.
(12) Includes 27,669 shares of Common Stock issuable upon the exercise of
options granted to Mr. Bingham under the 1993 Stock Option Plan. Does
not include 14,084 shares of Common Stock issuable upon the exercise of
options granted to Mr. Bingham under the 1993 Stock Option Plan, which
options are not currently exercisable.
(13) Includes an aggregate of 495,003 shares of Common Stock issuable upon
the exercise of options granted under the 1993 and 1998 Stock Option
Plans. Does not include an aggregate of 190,762 shares of Common Stock
issuable upon the exercise of options granted under the 1993 and 1998
Stock Option Plans, which options are not currently exercisable. See
footnotes (1) - (10) above.
(14) According to a Schedule 13G filed with the Securities and Exchange
Commission on January 28, 1999 by Provident Investment Counsel, Inc.,
such entity beneficially owned 832,162 shares of Common Stock as of
December 31, 1998, had the sole power to dispose of such shares, had
the sole power to vote 741,522 of such shares and no power to vote
90,640 of such shares.
8
<PAGE> 12
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
AUDIT COMMITTEE. The Audit Committee of the Board of Directors held one
meeting in 1998. The principal responsibilities of the Committee are to ensure
that the Board of Directors receives objective information regarding policies,
procedures and activities of Hamilton Bancorp with respect to auditing,
accounting, internal accounting controls, financial reporting, regulatory
matters and such other activities of Hamilton Bancorp as may be directed by the
Board of Directors. The following directors are the current members of the Audit
Committee: Messrs. William Bickford, Thomas F. Gaffney and Virgilio E. Sosa, Jr.
COMPENSATION COMMITTEE. The Compensation Committee of the Board of
Directors held two meetings in 1998. The Compensation Committee is authorized,
among other things, to review and make recommendations to the Board of Directors
regarding employee compensation, to administer various employee benefit plans
and to monitor employment conditions and personnel policies. The following
directors are the current members of the Compensation Committee: Messrs. William
Bickford, Thomas F. Gaffney and Virgilio E. Sosa, Jr.
ATTENDANCE. The Board of Directors of Hamilton Bancorp held four
meetings in 1998. All of the directors attended at least 75% of the aggregate of
the meetings of the Board of Directors of Hamilton Bancorp and of the above
committees on which they served, during the period they were directors and
members of such committees in 1998.
9
<PAGE> 13
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by Hamilton
Bancorp for services rendered during the past year to the five most highly
compensated Executive Officers (the "Named Officers") of Hamilton Bancorp and/or
Hamilton Bank.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- AWARDS
------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) # ($)
- ----------------------------- ---- ------ ------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Eduardo A. Masferrer.................. 1998 775,900 1,103,591 --(3) -0- 4,621(2)
Chairman of the Board, 1997 705,400 798,058 9,500(1) -0- 4,400(2)
President and Chief 1996 550,000 891,410 100,400(1) 48,750 2,375(2)
Executive Officer
Juan Carlos Bernace.................. 1998 200,000 100,000 --(3) 35,576 4,648(2)
Executive Vice President 1997 152,499 95,000 --(3) 48,396 4,400(2)
1996 125,000 46,000 --(3) 48,750 2,375(2)
Maura A. Acosta....................... 1998 195,000 70,000 --(3) 20,062 4,664(2)
Executive Vice President 1997 191,800 60,000 --(3) 19,163 4,400(2)
1996 160,000 46,000 --(3) 48,750 2,375(2)
John M. R. Jacobs..................... 1998 140,000 80,000 --(3) 10,000 4,050(2)
Senior Vice President 1997 93,205 -0- --(3) 8,578 -0-
(4)
J. Reid Bingham........................1998 165,000 35,000 --(3) 10,000 4,855(2)
General Counsel and 1997 150,000 30,000 --(3) 12,253 1,688(2)
Secretary 1996 37,500 -0- --(3) 19,500 -0-
(5)
</TABLE>
- ------------------------
(1) Represents Bank director fees paid to Mr. Masferrer during 1996 and the
first three months of 1997.
(2) Represents matching and additional contributions made by Hamilton Bank
under its 401(k) Plan.
(3) The aggregate amount of perquisites and other personal benefits provided
to such named officer is less than 10% of the total annual salary and
bonus of such officer.
(4) Mr. Jacobs joined Hamilton Bank on January 1, 1997.
(5) Mr. Bingham joined Hamilton Bancorp on October 1, 1996.
10
<PAGE> 14
DIRECTORS' COMPENSATION
The Directors of Hamilton Bancorp other than Executive Officers,
receive a quarterly retainer of $4,000 and a fee of $1,000 for each meeting of
the Board or committee attended in excess of regular quarterly meetings of the
Board and one meeting of each committee per year. Hamilton Bancorp also
reimburses all directors of Hamilton Bancorp for all travel-related expenses
incurred in connection with their activities as directors.
HAMILTON BANCORP BONUS POLICY
Historically, Hamilton Bank has distributed an aggregate percentage of
up to 11% (approximately 6% in 1998) of pre-tax net income, after the deduction
of loan loss provisions ("Available Pre-Tax Net Income"), to its Executive
Officers and other employees as bonuses. Up to five percent (5%) of the
Available Pre-Tax Net Income has historically been distributed to Eduardo A.
Masferrer, Hamilton Bancorp's Chairman of the Board, President and Chief
Executive Officer, although in 1997 and 1998 the amount was 4% and 3%,
respectively. Up to 6% (3% in 1998) of the Available Pre-Tax Net Income has
historically been distributed to other employees based upon and in accordance
with the following criteria: (i) each employee whose job performance was
satisfactory or better, as determined by an appropriate department head, has
received a bonus equal to two weeks' salary, (ii) each employee whose quarterly
job performance is significantly above average, as determined by an appropriate
department head, has received an additional bonus equal to one week's salary for
each quarter in which such a review is received and (iii) any remaining portion
of the percentage is distributed to those employees who have made superior
contributions to Hamilton Bancorp and Hamilton Bank during the year as
determined by the Personnel Management Committee. Hamilton Bank may also make an
additional contribution from the Available Pre-Tax Net Income to the 401(k) plan
for its Executive Officers and other employees on behalf of all participants in
the 401(k) plan at the end of the year ($.50 per participant in 1998). During
the year ended December 31, 1998, $2,152,000 of Available Pre-Tax Net Income was
distributed pursuant to the bonus plan.
HAMILTON BANCORP STOCK OPTION PLANS
In December 1993, Hamilton Bancorp adopted the 1993 Stock Option Plan
for Key Employees and Directors, pursuant to which 5,750 shares of Common Stock
are currently reserved for issuance upon exercise of options. In June 1998,
Hamilton Bancorp adopted the 1998 Executive Incentive Compensation Plan,
pursuant to which 69,168 shares of Common Stock are currently reserved for
issuance upon exercise of options. The Stock Option Plans are designed as a
means to retain and motivate key employees and directors. Hamilton Bancorp's
Compensation Committee, or in the absence thereof, the Board of Directors,
administers and interprets the Stock Option Plans and is authorized to grant
options thereunder to all eligible employees of Hamilton Bancorp including
Executive Officers and directors (whether or not they are employees) of Hamilton
Bancorp or affiliated companies. Options granted under the Stock Option Plans
are on such terms and at such prices as determined by the Compensation
Committee, except that the per share exercise price of incentive stock options
cannot be less than the fair market value of the Common Stock on the date of
grant. Each option is exercisable after the period or periods specified in the
option agreement, but
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<PAGE> 15
no option may be exercisable after the expiration of ten years from the date of
grant. The 1993 Stock Option Plan will terminate on December 3, 2003 and the
1998 Stock Option Plan will terminate on June 15, 2008, unless either is sooner
terminated by Hamilton Bancorp's Board of Directors. Options granted to an
individual who owns (or is deemed to own) at least 10% of the total combined
voting power of all classes of stock of Hamilton Bancorp or its subsidiary must
have an exercise price of at least 110% of the fair market value of the Common
Stock on the date of grant, and a term of no more than five years. The Stock
Option Plans also authorizes Hamilton Bancorp to make or guarantee loans to
optionees to enable them to exercise their options. Such loans must (i) provide
for recourse to the optionee, (ii) bear interest at a rate not less than the
prime rate of interest, and (iii) be secured by the shares of Common Stock
purchased. The Board of Directors has the authority to amend or terminate the
Stock Option Plans, provided that no such amendment may impair the rights of the
holder of any outstanding option without the written consent of such holder, and
provided further that certain amendments of the Stock Option Plans are subject
to stockholder approval.
The following table sets forth certain information with respect to
options to purchase shares of Common Stock granted under Hamilton Bancorp's
Stock Option Plans to the Named Officers during the year ended December 31,
1998, and represents all options granted by Hamilton Bancorp to such Named
Officers for the period. In accordance with rules of the Securities and Exchange
Commission, the table also describes the hypothetical gains that would exist for
the respective options granted based on assumed rates of annual compounded stock
appreciation of 5% and 10% from the date of grant to the end of the option term.
These hypothetical gains are based on assumed rates of appreciation and,
therefore, the actual gains, if any, on stock option exercises are dependent on
the future performance of the Common Stock, overall stock market conditions and
the Named Officer's continued employment with Hamilton Bancorp. As a result, the
amounts reflected in this table may not necessarily be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------- VALUE AT ASSUMED
Number of ANNUAL RATES OF STOCK
Securities % of Total PRICE APPRECIATION
Underlying Options Granted Exercise FOR OPTION TERM
Options to Employees in Price Expiration -----------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5% 10%
- ---- ----------- --------------- ------ ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Eduardo A. Masferrer ... -0- -- -- -- -- --
Maura A. Acosta ........ 20,062 12.9% $25.00 12/23/08 $315,422 $799,342
Juan Carlos Bernace..... 35,576 22.9% 25.00 12/23/08 $559,339 $1,417,475
John M. R. Jacobs....... 10,000 6.4% 25.00 12/23/08 $157,224 $398,436
J. Reid Bingham......... 10,000 6.4% 25.00 12/23/08 $157,224 $398,436
</TABLE>
12
<PAGE> 16
The following table shows information concerning the exercise of stock
options during fiscal year 1998 by each of the Named Officers and the fiscal
year-end value of their unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED IN-
SHARES NUMBER OF UNEXERCISED THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT FY-END (#) AT FY-END ($)(1)
ON REALIZED ------------------------- ------------------------
NAME EXERCISE ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------- ------ ------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Eduardo A. Masferrer....... -0- -0- 48,750 /-0- $851,078/-0-
Maura A. Acosta............ -0- -0- 55,137/ 32,838 $851,078/$33,865
Juan Carlos Bernace........ -0- -0- 64,882/ 67,840 $851,078/$60,052
John M. R. Jacobs.......... -0- -0- 2,859/ 15,719 $-0-/$16,880
J. Reid Bingham............ -0- -0- 23,585 / 18,168 $340,431/$16,880
</TABLE>
- ------------------------
(1) Represents the difference between the closing price of Hamilton Bancorp's
common stock on December 31, 1998 ($26.688) and the exercise price of the
options multiplied by the number of shares represented by such options.
401(k) PLAN
Hamilton Bancorp maintains a 401(k) plan for its Executive Officers and
other employees. Under the terms of the 401(k) plan, for each dollar contributed
by an employee, Hamilton Bancorp intends to contribute a discretionary amount on
behalf of the participant (the "Matching Contribution"). In addition, at the end
of the plan year, Hamilton Bancorp may make an additional contribution from the
Available Pre-Tax Net Income bonus pool on behalf of all participants at the end
of the year ("Additional Contribution"). The amount that Hamilton Bancorp
contributes to the 401(k) plan has historically varied from year to year. During
the year ended December 31, 1998, Hamilton Bancorp made a $.25 Matching
Contribution and a $.25 Additional Contribution on behalf of each participant in
the aggregate amount of $154,819.
COMPENSATION COMMITTEE REPORT
In 1998 the Compensation Committee was composed of Messrs. William
Bickford, Thomas F. Gaffney and Virgilio E. Sosa, Jr. The three members of the
Compensation Committee are non-employee directors.
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<PAGE> 17
The Securities and Exchange Commission has adopted rules requiring
public companies to provide detailed information regarding compensation and
benefits provided to their chief executive officer and to the four most highly
compensated Executive Officers, other than the chief executive officer, whose
annual base salary and bonus compensation was in excess of $100,000.
COMPENSATION PHILOSOPHY
Hamilton Bancorp's Executive Compensation Program is designed to be
closely linked to corporate performance and returns to stockholders. To this
end, Hamilton Bancorp has developed an overall compensation strategy and
specific compensation plans that tie a very significant portion of executive
compensation to Hamilton Bancorp's success in meeting specified performance
goals and to appreciation in the price of Hamilton Bancorp's Common Stock. The
overall objectives of this strategy are to attract and retain the best possible
executive talent, to motivate these executives to achieve the goals inherent in
Hamilton Bancorp's business strategy, to link executive and stockholder
interests and to provide a compensation package that recognizes individual
contributions as well as overall business results.
The Compensation Committee annually reviews Hamilton Bancorp's results
and personal performance and compares stock price appreciation with executive
compensation levels. The Compensation Committee does not limit its compensation
comparison to the financial services industry because Hamilton Bancorp competes
for executive talent both within and outside the banking industry. These annual
reviews permit an ongoing evaluation of the link between Hamilton Bancorp's
executive compensation, its performance and the competitive market.
The key elements of Hamilton Bancorp's executive compensation consists
of three components, each of which is intended to serve the overall compensation
philosophy: base salary, an annual bonus and stock options. The Compensation
Committee's policies with respect to each of these elements, including the basis
for the compensation awarded to Mr. Eduardo A. Masferrer, Hamilton Bancorp's
Chairman, President and Chief Executive Officer, are discussed below. In
addition, while the elements of compensation described below are considered
separately, the Compensation Committee takes into account the full compensation
package afforded by Hamilton Bancorp and Hamilton Bank to each individual,
including pension benefits, insurance and other benefits, as well as the
programs described below.
BASE SALARY
Base salaries for Executive Officers are determined by evaluating the
responsibilities of the executive's position and the experience of the
individual, and by reference to the competitive marketplace for executive
talent, including a comparison to base salaries for comparable positions at
other companies.
The Compensation Committee considers the following criteria relevant
for reviewing on an annual basis the base salaries of executives: (i) evaluating
the performance of Hamilton Bancorp, Hamilton Bank and each executive officer,
(ii) considering changes in responsibilities for executives, (iii) with respect
to Executive Officers with responsibility for a particular business unit,
considering
14
<PAGE> 18
the unit's financial results and (iv) considering increases in median pay levels
for comparable positions at other companies and salary increases granted to
other employees of Hamilton Bancorp or Hamilton Bank aiming to implement similar
increases to maintain a competitive position.
The base salary for Mr. Eduardo A. Masferrer in 1998 was $775,900 per
year. This salary reflected a 10% increase over Mr. Masferrer's salary for 1997
and represented a merit increase for such period reflecting the increased growth
and increased profitability of Hamilton Bancorp.
ANNUAL BONUS
Pursuant to Hamilton Bancorp's Annual Bonus Policy, Executive Officers
are eligible for an annual cash bonus based on their contribution to Hamilton
Bancorp during the year. Historically Hamilton Bancorp has distributed up to 11%
(5% to Mr. Eduardo A. Masferrer and 6% to other Executive Officers and
employees) of its pre-tax net income, after the deduction of loan loss
provisions ("Available Pre-Tax Net Income"), as bonuses to its Executive
Officers and other employees. In 1998 Hamilton Bancorp distributed approximately
six percent (6%) of the Available Pre-Tax Net Income, three percent (3%) was
distributed to Mr. Masferrer by the Personnel, Compensation and Benefits
Committee of Hamilton Bank and three percent (3%) to other Executive Officers
and employees. The distribution to other Executive Officers and employees was
made first as additional weeks' salary based upon a formula relating to each
employee's periodic job performance evaluations, second as an additional
contribution to the 401(k) plan for Executive Officers and other employees and
the balance to those employees, including Executive Officers, who made superior
contributions to Hamilton Bancorp during the year.
Under Section 162 (m) of the Internal Revenue Code of 1986, as amended,
publicly traded corporations such as Hamilton Bancorp are not permitted to
deduct compensation in excess of $1,000,000 paid to certain top executives,
unless the compensation qualifies as "performance-based compensation". The
annual cash bonus paid to Mr. Eduardo A. Masferrer with respect to 1998 resulted
in his compensation exceeding $1,000,000, but was deductible as "performance
based compensation". For 1998 and subsequent years the Compensation Committee
has set Mr. Masferrer's "performance based compensation" bonus percentage at
five percent (5%) of Available Pre-Tax Net Income, although the Committee
reserves the right to reduce this amount in its discretion after year end
results are known. It is expected that if compensation paid to Mr. Masferrer
with respect to 1999 exceeds $1,000,000, it will be deductible as "performance
based compensation".
STOCK OPTIONS
Under Hamilton Bancorp's 1993 Stock Option Plan and 1998 Executive
Incentive Compensation Plan, the Compensation Committee may grant options to
purchase Common Stock at its then current market value. The Compensation
Committee sets guidelines for the number of such awards based on factors
including competitive compensation data, the importance of the executive's
position, incentive towards achievement of future long-term goals, corporate
performance and individual performance against objectives agreed upon between
each employee and his or her manager. The options granted in 1998 vest in thirds
twelve, eighteen and twenty-four
15
<PAGE> 19
months after the grant if the executive is then employed with Hamilton Bancorp
or Hamilton Bank.
CONCLUSION
Through the programs described above, a substantial portion of Hamilton
Bancorp's executive compensation is linked directly to individual and corporate
performance and stock price appreciation. The Compensation Committee intends to
continue the policy of directly linking a significant portion of executive
compensation to corporate performance and stockholder returns.
COMPENSATION COMMITTEE
William Bickford
Thomas F. Gaffney
Virgilio E. Sosa, Jr.
CERTAIN TRANSACTIONS WITH MANAGEMENT
From time to time, Hamilton Bank makes loans and extends credit to
certain of Hamilton Bancorp's and/or Hamilton Bank's officers and directors and
to certain companies affiliated with such persons. In the opinion of Hamilton
Bancorp all of such loans and extensions of credit were made in the ordinary
course of business, on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other third parties. At December 31, 1998, an aggregate of $424,000 of loans and
extensions of credit were outstanding to Executive Officers and directors of
Hamilton Bancorp and/or Hamilton Bank and to companies affiliated with such
persons.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Hamilton
Bancorp's directors, Executive Officers and holders of more than 10% of Hamilton
Bancorp's Common Stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of Hamilton Bancorp. Based solely upon its review of
Section 16(a) reports furnished to Hamilton Bancorp and upon representations
made to Hamilton Bancorp, Hamilton Bancorp believes that during 1998 its
directors, Executive Officers and holders of more than 10% of its Common Stock
complied with all Section 16(a) filing requirements, with the following
exceptions: Mr. William Alexander filed a late Form 4 relating to his sale of
2,188 shares of Hamilton Bancorp Common Stock in November 1998; Mr. Adolfo
Martinez filed a late Form 4 relating to his sale of 16,250 shares of Hamilton
Bancorp Common Stock in July 1998; and a trust that holds shares of Hamilton
Bancorp Common Stock which have been included in Mr. Eduardo A. Masferrer's
statement of beneficial ownership of Hamilton Bancorp Common Stock sold 8,000 of
such shares without the knowledge of Mr. Masferrer in November 1998 and for
which Mr. Masferrer filed a Form 5 (Mr. Masferrer does not exercise voting or
investment control over any shares held by the trust and, accordingly, disclaims
beneficial interest in such shares other than those shares deemed to be
indirectly beneficially owned by minor children of Mr. Masferrer or Ms. Acosta
living in their household).
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<PAGE> 20
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total
stockholder return on Hamilton Bancorp's Common Stock, based on the market price
of the Common Stock, with the cumulative total return of companies on Standard &
Poor's 500 Stock Index, Standard & Poor's Small Cap 600 Index and the NASDAQ
Bank Index, for the period commencing March 31, 1997 and ended December 31,
1998. Returns are based upon the quarter-end to quarter-end price and assume
dividends, if any, are reinvested. The graph assumes $100 was invested on March
31, 1997 in Hamilton Bancorp's Common Stock, Standard & Poor's 500 Stock Index,
Standard & Poor's Small Cap 600 Index and the NASDAQ Bank Index. Standard &
Poor's Small Cap 600 Index was added this year to the Performance Graph to
replace Standard & Poor's 500 Stock Index because Hamilton Bancorp believes
Standard & Poor's Small Cap 600 Index is more representative in terms of market
capitalization than Standard & Poor's broader based 500 Stock Index. Standard &
Poor's 500 Stock Index is included in the Performance Graph this year for
comparison purposes.
HAMILTON BANCORP INC.
PERFORMANCE CHART
<TABLE>
<CAPTION>
DATE HABK S&P 500 NASDAQ BANK INDEX S&P SMALL CAP
---- ---- ------- ----------------- -------------
<S> <C> <C> <C> <C>
03/31/97 100 100 100 100
06/30/97 155 117 117 118
09/30/97 159 125 137 137
12/31/97 169 128 151 132
03/31/98 191 146 161 147
06/30/98 209 150 154 140
09/30/98 151 134 126 110
12/31/98 155 162 133 129
</TABLE>
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of Hamilton Bancorp has reappointed Deloitte &
Touche as independent auditors to audit the financial statements of Hamilton
Bancorp for the current fiscal year.
Representatives of Deloitte & Touche are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
STOCKHOLDERS PROPOSALS
Proposals of stockholders intended to be presented at the 2000 annual
meeting of Hamilton Bancorp must be in writing, not exceeding 500 words in
length, and received by the Secretary of Hamilton Bancorp at its main offices,
3750 N.W. 87 Avenue, Miami, Florida 33178, no later than
17
<PAGE> 21
January 1, 2000. If such proposal or proposals are in compliance with applicable
rules and regulations, they will be included in Hamilton Bancorp's proxy
statement and form a proxy for that meeting.
BY ORDER OF THE BOARD OF DIRECTORS
J. Reid Bingham
Secretary
18
<PAGE> 22
PROXY
HAMILTON BANCORP INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned does hereby constitute and appoint EDUARDO A. MASFERRER, or
failing him, JUAN CARLOS BERNACE, or failing him, J. REID BINGHAM and each of
them of with power of substitution to each, the proxies of the undersigned to
vote all shares of HAMILTON BANCORP INC. which the undersigned may be entitled
to vote at the Annual Meeting of its stockholders to be held on August 18, 1999,
at 9:30 a.m., local time, and at any adjournment or adjournments thereof upon
the matter described in the accompanying Proxy Statement and upon any other
business that may properly come before the meeting or adjournment thereof. Said
proxies are directed to vote or to refrain from voting as checked below upon the
following matters, and otherwise in their discretion upon other matters in
connection with the following or otherwise as may properly come before the
meeting or any adjournment thereof.
(Continued on the other side)
FOLD AND DETACH HERE
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C> <C> <C>
VOTE FOR ALL WITHHOLD FROM To withhold a vote for any individual director, please strike
(except as marked VOTING FOR ALL a line through the name below.
to the contrary
to the right) William Alexander Ronald A. Lacayo
Juan Carlos Bernace George A. Lyall
[ ] [ ] William Bickford Eduardo A. Masferrer
Ronald E. Frazier Ben L. Moyer
Thomas F. Gaffney Virgilio E. Sosa, Jr.
(1) PLEASE DATE, SIGN EXACTLY AS YOUR NAME APPEARS,
AND RETURN THIS FORM IN THE ENCLOSED ENVELOPE.
(2) Your Shares will be voted according to your instructions.
If you do not indicate specific instructions in the spaces
provided above, but you properly sign the instruction card,
your shares will be voted "FOR".
Signature ______________________________________________________________________________ Date _________________________________
</TABLE>
FOLD AND DETACH HERE
