<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
- --------------------------------------------------------------------------------
(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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/ / 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:
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(4) Date Filed:
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<PAGE>
FIRST MARINER BANCORP
1801 SOUTH CLINTON STREET
BALTIMORE, MARYLAND 21224
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, MAY 13, 1997, AT 9:00 A.M.
AT
WOODHOLME COUNTRY CLUB
300 WOODHOLME AVENUE
BALTIMORE, MARYLAND 21208
The Annual Meeting of Stockholders of First Mariner Bancorp, a Maryland
corporation, will be held on May 13, 1997, at 9:00 a.m., local time, at the
Woodholme Country Club, 300 Woodholme Avenue, Baltimore, Maryland 21208, to
consider and vote upon:
1. The election of seven directors to serve until the Annual Meeting of
Stockholders to be held in 2000, and until their successors are duly elected
and qualified.
2. Ratification of the selection of KPMG Peat Marwick LLP, to serve as
the Company's independent auditors for the 1997 fiscal year.
3. Any other matters that may properly come before the meeting or any
adjournment thereof.
Only stockholders of record at the close of business on April 9, 1997 will
be entitled to notice of and to vote at the meeting or any adjournment thereof.
Accompanying this notice is a proxy statement and proxy card. Whether or not you
plan to attend the meeting, please indicate your choice on the matters to be
voted upon, date and sign the enclosed proxy and return it to our transfer
agent, American Stock Transfer & Trust Company, in the enclosed postage-paid
return envelope. You may revoke your Proxy at any time prior to or at the
meeting by written notice to the Company, by executing a Proxy bearing a later
date, or by attending the meeting and voting in person.
You are cordially invited to attend the meeting in person.
By Order of the Board of Directors,
Eugene A. Friedman
SECRETARY
April 11, 1997
<PAGE>
FIRST MARINER BANCORP
1801 SOUTH CLINTON STREET
BALTIMORE, MARYLAND 21224
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
TUESDAY, MAY 13, 1997 AT 9:00 A.M.
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of First Mariner
Bancorp (the "Company") for use at the Annual Meeting of Stockholders (the
"Meeting") to be held on May 13, 1997, and is revocable at any time prior to or
at the meeting. In addition to solicitation by mail, proxies may be solicited by
officers, directors, and regular employees of the Company personally or by
telephone or telegraph. The cost of soliciting proxies will be borne by the
Company and may include reasonable out-of-pocket expenses in forwarding proxy
materials to beneficial owners. This proxy material is being sent to the
Company's stockholders on or about April 11, 1997.
OUTSTANDING SHARES AND VOTING RIGHTS
Stockholders of record at the close of business on April 9, 1997, are
entitled to notice of and to vote at the Meeting. As of the close of business on
that date, there were outstanding and entitled to vote 2,837,263 shares of
Common Stock, $.05 par value ("Common Stock"), each of which is entitled to one
vote.
The presence, in person or by proxy, of stockholders entitled to cast a
majority of all votes entitled to be cast at the meeting shall constitute a
quorum. The affirmative vote of at least a majority of all the shares voted at
the Meeting is sufficient for the approval of Proposals One and Two described on
the preceding page and in this Proxy Statement. An abstention or broker non-vote
is included for purposes of determining the presence or absence of a quorum for
the transaction of business but is not included in calculating votes cast with
respect to the Proposals. The Company designates an individual to serve as the
Inspector of Elections for purposes of tallying shares voted. The Inspector of
Elections will be present at the Meeting.
All proxies will be voted as directed by the stockholder on the proxy card.
A proxy, if executed and not revoked, will be voted in the following manner
(unless it contains instructions to the contrary, in which event it will be
voted in accordance with such instructions):
- FOR the nominees for directors named below.
- FOR ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent public accountants for the 1997 fiscal year.
IT IS ANTICIPATED THAT THE COMPANY'S DIRECTORS AND OFFICERS WILL VOTE THEIR
SHARES OF COMMON STOCK IN FAVOR OF THE NOMINEES FOR ELECTION TO THE BOARD OF
DIRECTORS LISTED HEREIN AND FOR THE RATIFICATION OF THE SELECTION OF KPMG PEAT
MARWICK LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS.
1
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board proposes the election of the seven directors named below, each
director to hold office until the Annual Meeting of Stockholders to be held in
the year 2000 and until the election and qualification of their successors. All
of the nominees, except for John J. Oliver, Jr. and Ronald M. Shapiro, are now
directors of the Company. The directors whose terms have not expired will
continue to serve as directors until the expiration of their respective terms in
accordance with the Company's Charter and By-Laws. It is not contemplated that
any of the nominees will become unavailable to serve, but if that should occur
before the meeting, proxies that do not withhold authority to vote for the
nominees listed below will be voted for another nominee, or nominees, selected
by the Board of Directors. The Board of Directors of the Company recommends that
stockholders vote FOR election of all nominees.
The following table sets forth certain information concerning the nominees
for election.
NOMINEES FOR ELECTION
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE POSITION WITH THE COMPANY AND OCCUPATION
- ------------------------------------ ----------- -----------------------------------------------------------------
<S> <C> <C>
Melvin S. Kabik, 72................. 1995 Director; Real Estate Investor
Jay J. J. Matricciani, 55........... 1995 Director; President, The Matricciani Company
Hanan Y. Sibel, 65.................. 1995 Director; Chairman and Chief Executive Officer, Chaimson
Brokerage Co., Inc.
Leonard Stoler, 66.................. 1995 Director; Owner and President, Len Stoler Inc.
Joseph A. Cicero, 52................ 1996 Director; President and Chief Operating Officer of the Company,
and Chief Operating Officer of First Mariner Bank.
John J. Oliver, Jr., 51............. -- Chairman of the Board and Publisher, Baltimore Afro-American
Newspaper
Ronald M. Shapiro, 54............... -- Attorney and Professional Baseball Players' Agent
</TABLE>
Melvin S. Kabik operates his own commercial real estate company. He
previously owned and operated Eddie's Supermarkets in Baltimore, Maryland. He is
a former member of the Board of Directors of Baltimore Bancorp.
Jay J. J. Matricciani has served as president of The Matricciani Company, a
utility and paving contractor, since 1992. He is also a partner of Matro
Properties, a heavy equipment rental company.
Hanan Y. Sibel has served as chairman and chief executive officer of
Chaimson Brokerage Co., Inc., a food brokerage company since 1970.
Leonard Stoler has been the owner and president of Len Stoler Inc., an
automobile dealership, since 1968.
Joseph A. Cicero is the President and Chief Operating Officer of the Company
and Chief Operating Officer of First Mariner Bank (the "Bank"). Mr. Cicero was
Maryland Area President of First Union Bank during 1996 and Maryland Area
President for First Fidelity Bank from November, 1994 to December, 1995. Prior
thereto, he was Executive Vice President and Chief Financial Officer and
director of Baltimore Bancorp from January, 1992 to November, 1994.
2
<PAGE>
John J. Oliver, Jr., has served as the Chairman, Chief Executive Officer and
Publisher of the Baltimore African-American newspaper since 1986.
Ronald M. Shapiro, an attorney, is President of Shapiro, Robinson &
Associates, Inc., a professional sports management and contract negotiations
firm which he founded in 1976. Since January, 1992 he has served as Counsel To
The Firm of Shapiro and Olander, Baltimore, Maryland, a law firm he founded in
1972. Since 1996, he has been Chairman of the Shapiro Negotiations Institute.
VOTE REQUIRED
The affirmative vote of at least a majority of the shares represented at the
meeting in person or by proxy is required for the election of the directors.
CONTINUING DIRECTORS
The directors of the Company whose terms have not expired*, their ages,
positions with the Company, and the years in which their terms expire, are as
follows:
<TABLE>
<CAPTION>
TERM
NAME AGE POSITION EXPIRES
- ------------------------------------ --- ------------------------------------------------------------ -----------
<S> <C> <C> <C>
Edwin F. Hale, Sr................... 50 Chairman of the Board and Chief Executive Officer of the 1999
Company and of the Bank.
George H. Mantakos.................. 54 President of the Bank; Director 1998
Barry B. Bondroff................... 48 Director 1999
Rose M. Cernak...................... 66 Director 1998
Christopher P. D'Anna............... 32 Director 1998
Bruce H. Hoffman.................... 49 Director 1999
R. Andrew Larkin.................... 44 Director 1999
Dennis C. McCoy..................... 54 Director 1999
Walter L. McManus, Jr............... 54 Director 1999
James P. O'Conor.................... 68 Director 1999
Kevin B. O'Connor................... 33 Director 1998
</TABLE>
* Governor William Donald Schaefer, whose term was to expire in 1998, is no
longer a director of the Company by virtue of having reached the Company's
mandatory retirement age. At the Company's regular Board of Directors
meeting to be held on April 22, 1997, management intends to propose the
adoption of a resolution amending the Company's by-laws to create a new,
non-voting class of directors emeritus who may be appointed by the Board of
Directors from time to time. Management also intends to propose the adoption
of a resolution appointing Governor Schaefer as a director emeritus of the
Company. Governor Schaefer was the Governor of the State of Maryland from
1986 to 1995, and was Mayor of the City of Baltimore from 1971 to 1986. He
is presently of counsel to the law firm of Gordon, Feinblatt, Rothman,
Hoffberger and Hollander, LLC, which firm performs legal services for the
Bank.
EDWIN F. HALE, SR. is Chairman and Chief Executive Officer of the Company
and of the Bank. He also is chairman and chief executive officer of Hale
Intermodal Transport Co., and Hale Intermodal Marine Co., private
Baltimore-based trucking and shipping companies which he founded in 1975 and
1984,
3
<PAGE>
respectively. Mr. Hale is the former chairman of the board and chief executive
officer of Baltimore Bancorp, which is now First Union Bancorp.
GEORGE H. MANTAKOS is a director of the Company, and the President and a
director of the Bank. Mr. Mantakos previously served as President of the Company
and Chief Executive Officer for the Bank. Mr. Mantakos began his banking career
with Union Trust Company (now Signet Bank). In 1985, he resigned his position as
senior vice president in charge of the Corporate and Commercial Banking Division
of Union Trust to become president and chief executive officer of Fairview
Federal. Fairview Federal was acquired by Columbia Bancorp in June 1992. Mr.
Mantakos was appointed to the Board of Directors of Columbia Bancorp and to the
Executive Committee/Board of Directors of the Columbia Bank. He resigned from
these positions to become a founder and organizer of Marylands Bank, FSB, the
predecessor of the Bank.
BARRY B. BONDROFF has been the managing officer of Grabush, Newman & Co.,
P.A. a certified public accounting firm, since 1976. Mr. Bondroff is a member of
the American Institute of Certified Public Accountants, and is a former member
of the board of directors of Baltimore Bancorp.
ROSE M. CERNAK has served as president of Olde Obrycki's Crab House, Inc.,
since 1995. Prior thereto, Ms. Cernak acted as a general manager and vice
president of Obrycki's. She is a former member of the board of directors of
Baltimore Bancorp.
CHRISTOPHER P. D'ANNA is a vice president of Mars Super Markets, Inc., a
regional supermarket chain, and has been employed with Mars in various
capacities for more than five years.
BRUCE H. HOFFMAN has served as the executive director the Maryland Stadium
Authority since 1989. Mr. Hoffman is currently responsible for the operation and
maintenance of Oriole Park at Camden Yards, the Baltimore Convention Center
expansion, the Ocean City Convention Center expansion, and the financing,
design, construction and operation of the proposed National Football League
stadium for the Baltimore Ravens, Baltimore's NFL professional football team. He
is a former member of the board of directors of Baltimore Bancorp.
R. ANDREW LARKIN has served as the president of the Maryland Realty
Investment Corp., a real estate investment firm, since 1985. Mr. Larkin is a
former member of the board of directors of Baltimore Bancorp.
DENNIS C. MCCOY has provided representation in matters relating to state and
local relations with various government bodies and agencies for Government
Affairs-Maryland, Inc., since 1996. Mr. McCoy was the former chief executive
officer and general counsel of Mars Super Markets, Inc., from January 1995
through November 1995. Prior thereto he was a partner at Polovoy & McCoy, a law
firm.
WALTER L. MCMANUS, JR. has served as president of Castlewood Realty Co.
Inc., a commercial real estate company, since 1970.
JAMES P. O'CONOR has served as chairman and chief executive officer of
O'Conor, Piper & Flynn, a real estate brokerage company, since 1984. He is a
former member of the board of directors of Baltimore Bancorp.
KEVIN B. O'CONNOR has served as president of the Maryland State & District
of Columbia Professional Firefighters Association, since 1991.
4
<PAGE>
BOARD MEETINGS AND COMMITTEES
During 1996, the Board of Directors met twelve times, the Audit Committee
met three times, and the Compensation Committee met three times.
Each director attended seventy-five percent or more of all meetings of the
Board of Directors and committees of the Board on which he served except for
Margaret McManus, who attended none, and who resigned from the Board of
Directors in February, 1996.
The Executive Committee of the Board of Directors serves as the Nominating
Committee. The Executive Committee consists of Edwin F. Hale, Sr. (Chairman),
Barry B. Bondroff, Joseph A. Cicero, Melvin S. Kabik, George H. Mantakos, Walter
L. McManus, Jr., and R. Andrew Larkin. In its capacity as the Nominating
Committee, the Executive Committee selects persons as nominees for election by
the stockholders to the Company's Board of Directors.
The Audit Committee of the Board of Directors consists of Walter L. McManus
(Chairman), Jay Matricciani and R. Andrew Larkin, Jr. The Committee recommends
to the Board the selection of the independent public accountants, review the
financial statements with such accountants, discusses with the accountants and
management other results of the audit, and oversees internal account procedures
and controls. The audit committee also reviews, considers and makes
recommendations regarding proposed related party transactions, if any.
The Compensation Committee of the Board of Directors consists of Barry B.
Bondroff, (Chairman) Edwin F. Hale, Sr., James P O'Conor, and Hanan Y. Sibel.
The Committee reviews and determines salaries and other benefits for executive
and senior management of the Company and its subsidiaries, reviews and
determines employees to whom stock options are to be granted and the terms of
such grants, and reviews the selection of officers who participate in incentive
and other compensation plans and arrangements.
DIRECTOR COMPENSATION
Directors receive fees for their services, and are reimbursed for expenses
incurred in connection with their service as directors. Directors receive $200
for each Board meeting attended, $300 for each executive committee meeting
attended, and $200 for each loan committee meeting attended. Directors receive
no compensation for attending other committee meetings. In addition, each
director received, pursuant to the 1996 Stock Option Plan, an option to purchase
100 shares of the Company's Common Stock for each Board meeting attended. This
automatic grant of options was discontinued effective November 1996.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors and executive officers, and persons who own more
than 10% of the Company's Common Stock, are required to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of any securities of the Company. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to the Company and
written representations that no other reports were required, all of the
Company's directors, executive officers and beneficial owners of greater than
10% of the Company's Common Stock made all required filings during the fiscal
year ended December 31, 1996.
5
<PAGE>
EXECUTIVE OFFICERS AND KEY EMPLOYEES
The following individuals are the executive officers and key employees of
the Company and the Bank:
<TABLE>
<CAPTION>
EXECUTIVE
NAME AGE POSITION OFFICER SINCE
- ------------------------------------ --- ------------------------------------------------------- ---------------
<S> <C> <C> <C>
Edwin F. Hale, Sr................... 50 Chairman of the Board and Chief Executive Officer of 1995
the Company and Chairman of the Board and Chief
Executive Officer of the Bank.
Joseph A. Cicero.................... 52 President and Chief Operating Officer of the Company 1996
and Chief Operating Officer of the Bank; Director
George H. Mantakos.................. 54 Executive Vice President of the Company and President 1994
of the Bank; Director
Kevin M. Healey..................... 40 Controller of the Company and Controller and Senior 1996
Vice President of the Bank
</TABLE>
For information concerning Edwin F. Hale, Sr., see "Continuing Directors" in
this Proxy Statement.
For information concerning Joseph A Cicero, see "Continuing Directors" in
this Proxy Statement.
For information concerning George H. Mantakos, see "Continuing Directors" in
this Proxy Statement.
Kevin M. Healey is the controller of the Company and controller and Senior
Vice President of the Bank. From 1984 through 1996, he served as an assistant
controller for Provident Bank of Maryland, a regional bank.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth information as of December 31, 1996, relating to
the beneficial ownership of the Common Stock by (i) each person or group known
by the Company to own beneficially more than five percent (5%) of the
outstanding Common Stock; (ii) each of the Company's directors; and (iii) all
directors and executive officers of the Company as a group. Unless otherwise
noted below, the persons named in the table have sole voting and sole investment
powers with respect to each of the shares reported as beneficially owned by such
person.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF
NAME AND ADDRESS SHARES PERCENT OF CLASS OWNED (1)
- --------------------------------------------------------- ---------------------------- ---------------------------
<S> <C> <C>
Edwin F. Hale, Sr. (2)................................... 883,359 24.4%
Barry B. Bondroff (3).................................... 15,533 .4%
Rose M. Cernak (4)....................................... 18,483 .5%
Joseph A. Cicero (5)..................................... 17,000 .5%
Christopher P. D'Anna (6)................................ 14,983 .4%
Bruce H. Hoffman (7)..................................... 20,033 .6%
Melvin S. Kabik (8)...................................... 14,383 .4%
R. Andrew Larkin, Jr. (9)................................ 10,550 .3%
George H. Mantakos (10).................................. 30,500 .8%
Jay J. J. Matricciani (11)............................... 21,583 .6%
Dennis C. McCoy (12)..................................... 14,333 .4%
Walter L. McManus, Jr. (13).............................. 80,066 2.2%
Kevin B. O'Connor (14)................................... 450 --
James P. O'Conor (15).................................... 23,800 .7%
Hanan Y. Sibel (16)...................................... 14,433 .4%
Leonard Stoler (17)...................................... 20,900 .6%
All directors and executive officers as a group (17
persons) (18).......................................... 1,204,939 33.1%
</TABLE>
- ------------------------
(1) Includes shares of Common Stock subject to options or warrants held by the
named individual which are exercisable as of, or within 60 days of, December
31, 1996.
(2) Includes warrants to purchase 371,672 shares and options to purchase 120,000
shares.
(3) Includes warrants to purchase 3,333 shares and options to purchase 1,200
shares.
(4) Includes 4,050 shares held individually and 10,000 shares held jointly with
her husband; also includes warrants to purchase 3,333 shares and options to
purchase 1,100 shares.
(5) Includes options to purchase 15,000 shares.
(6) Includes 550 shares held individually and 10,000 shares held by D'Anna
Family Enterprises, LLC, of which he is a member; also includes warrants to
purchase 3,333 shares and options to purchase 1,100 shares
(7) Includes 15,500 shares held jointly with his wife; also includes warrants to
purchase 3,333 shares and options to purchase 1,200 shares.
(8) Includes 50 shares held individually and 10,000 shares held jointly with his
wife; also includes warrants to purchase 3,333 shares and options to
purchase 1,000 shares.
(9) Includes 50 shares held individually and 5,000 shares held in an Individual
Retirement Account; also includes warrants to purchase 5,000 shares and
options to purchase 500 shares.
7
<PAGE>
(10) Includes 4,000 shares held in an Individual Retirement Account and 1,000
shares held jointly with his wife; also includes warrants to purchase 5,000
shares; and options to purchase 20,500 shares.
(11) Includes 3,050 shares held individually, 2,000 shares held jointly with his
wife, 2,000 shares held in an Individual Retirement Account, and 10,000
shares held by Matro Properties, of which he is a partner; also includes
warrants to purchase 3,333 shares and options to purchase 1,200 shares.
(12) Includes 50 shares held individually and 9,950 shares held jointly with his
wife; also includes warrants to purchase 3,333 shares and option to purchase
1,000 shares.
(13) Includes warrants to purchase 16,666 shares and options to purchase 1,200
shares.
(14) Includes options to purchase 400 shares.
(15) Includes warrants to purchase 10,000 shares and options to purchase 1,000
shares.
(16) Includes warrants to purchase 3,333 shares and option to purchase 1,100
shares.
(17) Includes warrants to purchase 5,000 shares and options to purchase 900
shares.
(18) Includes warrants to purchase 471,668 shares and options to purchase
156,500 shares.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company and
First Mariner Bank (the "Bank") and their predecessors for the last three fiscal
years to the Chief Executive Officer of the Company and the Bank and to any
other executive officer of the Company or the Bank who received compensation in
excess of $100,000 during any of the last three fiscal years of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------------
NAME AND SECURITIES ALL OTHER
PRINCIPAL POSITION FISCAL YEAR SALARY BONUS UNDERLYING OPTIONS COMPENSATION
------------------ ------------- ---------- --------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
Edwin F. Hale, Sr.,.................... 1996 $ 50,000 -- 120,000 $ 12,048(1)
Chairman of the Board and Chief 1995 $ 12,048(1)
Executive Officer of the Company and
the Bank;(2)
George H. Mantakos,.................... 1996 $ 110,000 $ 20,000 10,000 $ 4,000(1)
Executive Vice President of the 1995 $ 110,000 $ 20,000 10,500 $ 3,000(1)
Company and President of the Bank 1994 $ 85,000 $ 20,000 $ 4,000(1)
David M.K. Metzger..................... 1995 $ 100,000 -- -- --
Chief Financial Officer and Senior
Vice President of the Bank(3)
</TABLE>
- ------------------------
(1) The amount disclosed represents car lease payments made by the Company on
behalf of Mr. Hale and Mr. Mantakos, respectively.
(2) Starting on October 1, 1996, Mr. Hale began receiving a salary of $200,000
per annum.
(3) Mr. Metzger left the Company in May, 1996.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
Options granted to the executive officers named in the above Summary
Compensation Table during 1996 are set forth below:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES PERCENT OF TOTAL OPTIONS EXERCISE EXPIRATION
NAME UNDERLYING OPTIONS GRANTED TO EMPLOYEES PRICE DATE
- -------------------------------------------- ------------------ ------------------------- ----------- -----------
<S> <C> <C> <C> <C>
Edwin F. Hale, Sr. ......................... 120,000 78.4% $ 10/share 10/15/06
Joseph A. Cicero............................ 15,000 9.4% $ 10/share 12/17/06
George H. Mantakos.......................... 10,000 6.5% $ 10/share 10/15/06
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR END OPTION VALUES
No stock options were exercised by the Named Executive Officers during 1996.
There were no stock appreciation rights outstanding during 1996. The following
table sets forth certain information regarding unexercised options held by the
Named Executive Officers as of December 31, 1996.
<TABLE>
<CAPTION>
AGGREGATE FISCAL YEAR-END OPTION VALUES
--------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END (#) FISCAL YEAR-END ($)(1)
------------------------------ ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------- ----------- ----------------- ----------- -----------------
<S> <C> <C> <C> <C>
Edwin F. Hale, Sr...................................... 120,000(2) -- $ 360,000 --
Joseph A. Cicero....................................... 15,000(2) 45,000
George H. Mantakos..................................... 20,500(2) -- 61,500 --
</TABLE>
- ------------------------
(1) The closing price of the Common Stock on December 31, 1996 was $13.00.
(2) The exercise price of these options is $10.00 per share.
EMPLOYMENT ARRANGEMENTS AND AGREEMENTS
The Board of Directors has approved a salary of $200,000 per year for Mr.
Hale commencing October 1, 1996. In addition, the Bank has a key man life
insurance policy on Mr. Hale in the amount of $10 million.
The Company and the Bank are parties to an Employment Agreement with George
H. Mantakos dated May 1, 1995, pursuant to which Mr. Mantakos is employed as the
President of the Bank. This Employment Agreement will expire on May 1, 1997. The
agreement provides for an annual salary of $110,000, which will be adjusted on
the anniversary date of the agreement to an amount to be approved by the Board
of Directors. Mr. Mantakos is entitled to participate in any management bonus
plans established by the Bank and to receive all benefits offered to employees.
Mr. Mantakos will, at the discretion of the Chairman, have the opportunity to
receive a bonus in the maximum amount of $20,000 per year. Mr. Mantakos receives
the use of an automobile provided by the Bank. The term of the Employment
Agreement is two years, expiring in 1997 and, if not terminated within 90 days
of its termination date, is automatically renewed for one additional year,
provided, however, that the Board of Directors of the Bank may terminate the
agreement at any time. In the event of involuntary termination for reasons other
than gross negligence, fraud or dishonesty (or in the event of the material
diminution of or interference with Mr. Mantakos' duties, or a change of control
of the Bank), the Bank is obligated to pay Mr. Mantakos his salary through the
remaining term plus additional severance equal to the then current annual
salary, but not less than $110,000. In such event, Mr. Mantakos is permitted to
exercise all options, and warrants held by him, and the Company is obligated to
repurchase all or any part of Mr. Mantakos' Common Stock.
9
<PAGE>
STOCK OPTION PLAN
On April 16, 1996, the Board of Directors approved the 1996 Stock Option
Plan (the "Plan"). The Plan authorizes options to purchase a total of 190,000
shares. The Plan is administered by the Compensation Committee appointed by the
Board of Directors. Full-time employees of the Company or any subsidiary and
each director of the Company or any subsidiary are eligible to participate. As
of December 31, 1996, 180,600 options have been granted under the Plan.
Options granted under the Plan may be either incentive stock options within
the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended,
or non-qualified options. The purchase price of each share subject to an option
is fixed by the Committee and stated in each option agreement. The purchase
price of any option intended to be an "incentive stock option" shall not be less
than the fair market value of a share of Common Stock on the date the option is
granted. In the event the optionee owns 10% of the Common Stock, the purchase
price is not less than 110% of the fair market value per share at the time the
option is granted. Each option granted under the Plan expires on the 10th
anniversary of the date the option was granted or such earlier date as the
Compensation Committee provides.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has engaged in transactions in the ordinary course of business
with some of its directors, officers, principal stockholders and their
associates. Management believes that all such transactions were made on the same
terms as those prevailing at the time between unrelated persons in similar
transactions.
The Bank has three full-service branches with ATMs and 10 non-branch ATMs in
Mars supermarkets. The Bank pays rent of $36,500 per year to Mars for
approximately 400-500 square feet of space in each of the stores where branches
are located. The Bank also bears all costs of construction of each branch. The
Bank, however, incurs no charge from Mars in connection with the installation of
ATMs. The Bank intends to open additional branches in Mars supermarkets in the
future. The terms of the arrangements are described in a Master Lease Agreement
between the Company and Mars dated March 1, 1996. Dennis C. McCoy, formerly the
Chief Executive Officer and General Counsel of Mars, is a member of the Board of
Directors of the Company and the Bank. Christopher P. D'Anna, Vice President of
Mars, is also a member of the Board of Directors of the Company and the Bank.
The Company has entered into a 15-year Lease Agreement dated January 17,
1997 with Blakefield Associates, L.L.C. for a full service branch of the Bank
located at 1740 York Road. The Company pays rent of $36,000 per year to
Blakefield Associates, L.L.C. Dennis M. Doyle, President of Blakefield
Associates, L.L.C., together with his wife, controls Blakefield Associates,
L.L.C. and was a member of the Board of Directors of the Company.
The company has entered into a five year Lease Agreement dated September 1,
1996 with Hale Intermodal Trucking Company for the premises that has a full
service branch and the headquarters and executive offices of the Company at 1801
South Clinton Street, Baltimore, Maryland, 21224. The Company pays rent of
$212,688 per year to Hale Intermodal Trucking Company. Edwin F. Hale, Sr.
controls Hale Intermodal Trucking Company and is the Chairman and Chief
Executive Officer of the Company.
Ronald M. Shapiro, a nominee for director, is counsel to the law firm of
Shapiro and Olander, which firm provides legal services to the Company and the
Bank.
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PROPOSAL TWO
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of KPMG Peat Marwick LLP as
independent public accountants for the Company for 1997, subject to approval by
the stockholders. KPMG Peat Marwick LLP has served the Company in such capacity
since May, 1994.
The Company has been informed that neither KPMG Peat Marwick LLP nor any of
its partners has any direct financial interest or any material indirect
financial interest in the Company and during the past three years has had no
connection therewith in the capacity of promoter, underwriter, voting trustee,
director, officer or employee.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Meeting with the opportunity to make a statement, if such representative so
desires, and to be available to respond to appropriate questions.
The Board of Directors of the Company recommends that stockholders vote FOR
the ratification of selection of such firm.
STOCKHOLDERS PROPOSALS
Proposals of stockholders intended for inclusion in the proxy material for
the Annual Meeting of Stockholders to be held in 1998 must be received in
writing by the Company on or before December 11, 1997. The inclusion of any
proposal will be subject to applicable rules of the Securities and Exchange
Commission.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31, 1996 is enclosed
herewith. Copies of the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1996, as filed with the Securities and Exchange Commission,
are available to shareholders without charge on written request directed to
Eugene A. Friedman, Secretary, First Mariner Bancorp, 1801 South Clinton Street,
Baltimore, Maryland, 21224.
OTHER MATTERS
The Board of Directors knows of no other business to be presented for action
at the Meeting, but if any other business should properly come before the
Meeting, it is intended that the proxies will be voted in accordance with the
best judgment of the persons acting thereunder in their discretion.
By Order of the Board of Directors,
Eugene A. Friedman
SECRETARY
April 11, 1997
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