<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 9
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 Section 240.14a-11(c) or Section
240.14a-12
FIRST MARINER BANCORP
(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>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, MAY 2, 2000, AT 8:00 A.M.
AT
FIRST MARINER BANCORP
1801 S. CLINTON STREET
BALTIMORE, MARYLAND 21224
The Annual Meeting of Stockholders of First Mariner Bancorp, a Maryland
corporation, will be held on May 2, 2000, at 8:00 a.m., local time, at First
Mariner Bancorp, 1801 S. Clinton Street, Baltimore, Maryland 21224 to consider
and vote upon:
1. The election of nine directors, seven to serve until the Annual Meeting
of Stockholders to be held in 2003, one to serve until the Annual Meeting of
Stockholders to be held in 2002 and one to serve until the Annual Meeting of
Stockholders to be held in 2001, and until their successors are duly elected and
qualified.
2. Any other matters that may properly come before the meeting or any
adjournment thereof.
Only stockholders of record at the close of business on March 10, 2000 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 choices 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.
You are cordially invited to attend the meeting in person.
By Order of the Board of Directors,
Eugene A. Friedman
SECRETARY
March 31, 2000
<PAGE>
FIRST MARINER BANCORP
1801 SOUTH CLINTON STREET
BALTIMORE, MARYLAND 21224
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 2, 2000 AT 8:00 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 2, 2000 at First Mariner Bancorp, 1801 S. Clinton
Street, Baltimore, Maryland 21224. The proxy is revocable at any time prior to
or at the Meeting by written notice to Eugene A. Friedman, Secretary of the
Company. In addition to solicitation by mail, proxies may be solicited by
officers, directors and employees of the Company who will not be specifically
compensated for soliciting such proxies. 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. Brokers and other persons will
be reimbursed for their reasonable expenses in forwarding proxy materials to
beneficial owners of the Common Stock of the Company registered in names of
nominees. This proxy material is being sent to the Company's stockholders on or
about March 31, 2000.
OUTSTANDING SHARES AND VOTING RIGHTS
Stockholders of record at the close of business on March 10, 2000 (the
"Record Date") 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
3,166,813 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 a majority of all shares voted at the Meeting is
sufficient for the approval of Proposal One described 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 individuals to serve as the Inspectors of Elections for purposes of
tallying shares voted. The Inspectors 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.
- Proxies will be voted in the discretion of the holder with respect to such
other business as may properly come before the Meeting or any adjournments
thereof.
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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following sets forth information as of the Record Date 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 director nominees; 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 investment
powers with respect to each of the shares
<PAGE>
reported as beneficially owned by such person. The address of each person named
below is the address of the Company.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS(1)
- ---------------- ---------------- -------------------
<S> <C> <C>
Edwin F. Hale, Sr. (2)...................................... 1,033,363 27.85%
Barry B. Bondroff (3)....................................... 21,696 .68%
Edith B. Brown (4).......................................... 1,000 .03%
Rose M. Cernak(5)........................................... 27,841 .88%
Joseph A. Cicero(6)......................................... 19,700 .62%
Christopher P. D'Anna(7).................................... 16,431 .52%
Howard Friedman............................................. 2,000 .06%
Bruce H. Hoffman(8)......................................... 30,593 .96%
Melvin S. Kabik(9).......................................... 15,821 50%
Michael J. Lynch............................................ 1,050 .03%
George H. Mantakos(10)...................................... 33,550 1.05%
Jay J.J. Matricciani(11).................................... 26,441 .83%
James P. O'Conor, Jr........................................ 26,900 .85%
John J. Oliver, Jr. (12).................................... 1,000 .03%
Patricia Schmoke, MD........................................ 100 --
Hanan Y. Sibel(13).......................................... 15,876 .50%
Leonard Stoler(14).......................................... 26,990 .85%
Michael R. Watson........................................... 35 --
All directors and executive officers as a group (18
persons)(15).............................................. 1,300,387 34.14%
</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 the
Record Date.
(2) Includes 2,530 shares in his Individual Retirement Account; also includes
warrants to purchase 408,839 shares and options to purchase 135,333 shares.
It does not include 126,667 options which are currently not exercisable.
(3) Includes warrants to purchase 3,666 shares and options to purchase 1,320
shares.
(4) Includes 330 shares owned by her husband over which she may be deemed to
have beneficial ownership.
(5) Includes 11,000 shares held jointly with her husband, 4,000 shares owned by
her husband, 3,500 shares held by Olde Obrycki's Crab House, Inc., of which
she is the owner; also includes warrants to purchase 3,666 shares and
options to purchase 1,210 shares.
(6) Includes options to purchase 16,500 shares.
(7) Includes 11,000 shares held by D'Anna Family Enterprise, LLC, of which he
is a member; also includes warrants to purchase 3,666 shares and options to
purchase 1,210 shares.
(8) Includes 18,050 shares held jointly with his wife and 5,430 shares held in
an Individual Retirement Account for his wife; also includes warrants to
purchase 3,666 shares and options to purchase 1,320 shares.
(9) Includes 11,000 shares held jointly with his wife; also includes warrants
to purchase 3,666 shares and options to purchase 1,100 shares.
(10) Includes 4,400 shares held in an Individual Retirement Account and 1,100
shares held jointly with his wife; also includes warrants to purchase
5,500 shares and options to purchase 22,550 shares.
2
<PAGE>
(11) Includes 5,300 shares held jointly with his wife, 1,100 shares held in an
Individual Retirement Account, and 11,000 shares held by Matro Properties,
of which he is a partner; also includes warrants to purchase 3,666 shares
and options to purchase 1,320 shares.
(12) Includes warrants to purchase 11,000 shares and options to purchase 1,100
shares.
(13) Includes warrants to purchase 3,666 shares and options to purchase 1,210
shares.
(14) Includes warrants to purchase 5,500 shares and options to purchase 990
shares.
(15) Includes warrants to purchase 456,501 shares and options to purchase
185,113 shares. It does not include 226,667 options which are currently
not exercisable.
3
<PAGE>
PROPOSAL ONE:
ELECTION OF DIRECTORS
The Board proposes the election of the nine directors named below, seven
directors to hold office for a three year term until the Annual Meeting of
Stockholders to be held in the year 2003 and one director to hold office until
the Annual Meeting of Stockholders to be held in the year 2002 and one director
to hold office until the Annual Meeting of Stockholders to be held in the year
2001 and until the election and qualification of their successors. All of the
nominees 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 AS DIRECTORS
TERM TO EXPIRE IN 2003
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
- ---- -------- --------------
<S> <C> <C>
Joseph A. Cicero............................................ 55 1996
Melvin S. Kabik............................................. 75 1995
Howard Friedman............................................. 35 1999
Jay J.J. Matricciani........................................ 58 1995
John J. Oliver, Jr.......................................... 54 1997
Hanan Y. Sibel.............................................. 68 1995
Leonard Stoler.............................................. 69 1995
</TABLE>
JOSEPH A. CICERO is the President 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.
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.
HOWARD FRIEDMAN has been the Chairman of Circa Capital, since 1997. From
1998 to 1997 he was the Publisher and CEO of Whitemark Press, Inc.
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.
JOHN J. OLIVER, JR. is the CEO and Publisher of the Afro-American
Newspapers.
HANAN Y. SIBEL is the chief executive officer of Sibel Enterprises and Vice
President of Nyberg & Assoc. He had previously served as Chairman/CEO of
MAI-Chaimson, Inc.
LEONARD STOLER has been the owner and president of Len Stoler Inc., an
automobile dealership, since 1968.
4
<PAGE>
TERM TO EXPIRE IN 2002
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
- ---- -------- --------------
<S> <C> <C>
Patricia Schmoke, MD........................................ 45 1999
</TABLE>
PATRICIA SCHMOKE, MD is a practicing pediatrician.
TERM TO EXPIRE IN 2001
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
- ---- -------- --------------
<S> <C> <C>
Michael J. Lynch............................................ 39 1998
</TABLE>
MICHAEL J. LYNCH is the Vice President of The General Ship Repair, a ship
repair company, and has been with that company since 1982.
CONTINUING DIRECTORS
The directors of the Company whose terms have not expired, their ages, the
years in which their terms expire and year in which they became directors are as
follows:
TERM TO EXPIRE IN 2002
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
- ---- -------- --------------
<S> <C> <C>
Edwin F. Hale, Sr........................................... 53 1995
Barry B. Bondroff........................................... 51 1995
Bruce H. Hoffman............................................ 52 1995
James P. O'Conor, Jr........................................ 71 1995
</TABLE>
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
Trans, Inc., the parent company of both Hale Intermodal Transport Co., and Hale
Intermodal Marine Co., private Baltimore-based trucking and shipping companies
which he founded in 1975 and 1984, respectively. He is the Chairman and Chief
Executive Officer of Hale Trucks of Maryland, LLC, the parent company of both
Peterbilt of Central Maryland, LLC, and Volvo Truck, North America, Inc.,
organized in 1997 and 1998, respectively. He is also the Chairman of the
Baltimore Blast Corp., an indoor soccer franchise. Mr. Hale is the former
Chairman of the Board and Chief Executive Officer of Baltimore Bancorp, which is
now First Union Bancorp.
BARRY B. BONDROFF has been the managing officer of Grabush, Newman & Co.,
P.A. a certified public accounting firm, since 1982. 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.
BRUCE H. HOFFMAN is the Vice President of the Gilban Building Company in
Maryland. He previously served as the executive director of the Maryland Stadium
Authority from 1989 to 1999. He is a former member of the Board of Directors of
Baltimore Bancorp.
JAMES P. O'CONOR, JR. 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.
5
<PAGE>
TERM TO EXPIRE IN 2001
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
- ---- -------- --------------
<S> <C> <C>
Edith B. Brown.............................................. 67 1998
Rose M. Cernak.............................................. 69 1995
Christopher P. D'Anna....................................... 35 1995
George H. Mantakos.......................................... 57 1994
Michael R. Watson........................................... 57 1998
</TABLE>
EDITH B. BROWN has served as the Director of Public and Community Relations
at Centre Management, a sports and entertainment arena, since 1979.
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 an executive 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.
GEORGE H. MANTAKOS is Executive Vice President of the Company, and the
President 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 First Union 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 Maryland
Bank, FSB, the predecessor of the Bank.
MICHAEL W. WATSON has served as the President of the Association of Maryland
Pilots since 1983.
BOARD MEETINGS AND COMMITTEES
During 1999, the Board of Directors met twelve times, the Audit Committee
met four times, and the Compensation Committee met four 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 or she served.
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, Bruce H. Hoffman, Melvin S. Kabik, and
George H. Mantakos. In its capacity as the Nominating Committee, the Executive
Committee selects qualified persons as nominees for election by the stockholders
to the Company's Board of Directors. Its recommendations are presented to the
Board of Directors at regularly scheduled meetings. The Executive Committee will
also consider those recommendations by stockholders which are submitted in
writing to the Secretary of the Corporation, giving the recommended candidates
name, biographical data and qualifications. The Executive Committee met one time
in 1999 in its capacity as the Nominating Committee.
The Audit Committee of the Board of Directors consists of Barry B. Bondroff,
Michael R. Watson (Chairman) and Jay J.J. Matricciani. The Committee recommends
to the Board the selection of the independent public accountants, reviews the
financial statements with such accountants, discusses with the accountants and
management other results of the audit, and oversees internal accounting
procedures and controls. The Audit Committee also reviews, considers and makes
recommendations regarding proposed related party transactions, if any.
6
<PAGE>
The Compensation Committee of the Board of Directors consists of Barry B.
Bondroff (Chairman), 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 the 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 received $500
for each Board meeting attended and $200 for attending the meeting of the Bank's
Loan Committee. Directors receive no compensation for attending other committee
meetings.
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, 1999 except that year-end reports on Form 5 for Edwin F.
Hale, Sr. (covering two option grants), Joseph A. Cicero (covering one option
grant) and George H. Mantakos (covering one option grant) were filed late; one
report on Form 4 of Hanan Y. Sibel (covering one transaction) was filed late;
and initial reports on Form 3 were filed late for Patricia Schmoke, MD and
Howard Friedman.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company and the
Bank 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.
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- ------------------------------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) UNDERLYING OPTIONS COMPENSATION(2)
- --------------------------- -------- -------- -------- --------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Edwin F. Hale, Sr........... 1999 $250,000 $100,000 $ 10,220 130,000 $1,364
Chairman of the Board and 1998 $250,000 $300,000 $ 12,238 0 $2,500
Chief Executive Officer of 1997 $200,000 $100,000 $ 12,050 0 $1,260
the Company and the Bank
Joseph A. Cicero............ 1999 $175,000 $ 15,000 $ 0 60,000 $1,737
President of the Company 1998 $175,000 $ 25,000 $ 0 0 $2,500
and Chief Operating 1997 $150,000 $ 0 $ 0 0 $1,299
Officer of the Bank
George H. Mantakos.......... 1999 $125,000 $ 30,000 $ 7,827 40,000 $2,062
Executive Vice President 1998 $125,000 $ 45,000 $ 4,139 0 $2,136
of the Company and 1997 $110,000 $ 20,000 $ 4,000 0 $1,580
President of the Bank
</TABLE>
- ------------------------
(1) The amount disclosed represents car lease payments made by the Company on
behalf of Mr. Hale and Mr. Mantakos, respectively.
(2) The amount disclosed represents the matching funds under the Company's
401(K) Plan.
OPTION GRANTS IN LAST FISCAL YEAR
Options granted to the executive officers named in the above Summary
Compensation Table during 1999 are set forth below:
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
INDIVIDUAL GRANTS PRICE APPRECIATION
-------------------------------- FOR OPTION TERM
PERCENT OF ---------------------
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTION/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR ($/S) DATE 5% ($) 10% ($)
- ---- -------------- ------------ -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Edwin F. Hale, Sr. 120,000(2) 45.47% $11.75 02/16/09 $665,100 $2,247,600
10,000(3) 3.79% $ 8.69 11/22/09 $ 54,700 $ 138,500
Joseph A. Cicero 60,000(2) 22.74% $11.75 02/16/09 $332,550 $1,123,800
George H. Mantakos 40,000(2) 15.16% $11.75 02/16/09 $221,700 $ 749,200
</TABLE>
- ------------------------
(1) Options granted in the year ended December 31, 1999 were issued under the
1998 Stock Option Plan.
(2) These options were granted on February 16, 1999. One third of these options
vest on the date of grant, one third vest on the first anniversary of the
date of grant and one third vest on the second anniversary of the date of
grant, subject to the following conditions: (i) the first 50% of the total
number of options may be exercised only if the price of the Company's Common
Stock on the exchange the shares are traded equals or exceeds $14.25 for at
least 10 trading days in any consecutive 30 calendar day period (the
"Trading Period"); (ii) the next 25% of the total number of options may be
exercised only if the price of the Company's Common Stock on the exchange
the shares are traded equals or exceeds $16.75 for the Trading Period; and
(iii) the last 25% of the total number of options may be
8
<PAGE>
exercised only if the price of the Company's Common Stock on the exchange
the shares are traded equals or exceeds $19.25 for the Trading Period.
(3) These options were granted on November 22, 1999. One third of the options
are exercisable on the date of grant, one third are exercisable on the first
anniversary of the date of grant and one third are exercisable on the second
anniversary of the date of grant.
9
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
No stock options were exercised by the executive officers named in the
Summary Compensation Table during 1999. The following table sets forth certain
information regarding unexercised options held by the Named Executive Officers
as of December 31, 1999:
<TABLE>
<CAPTION>
AGGREGATE FISCAL YEAR-END OPTION VALUES
-----------------------------------------------------------
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END (#) FISCAL YEAR-END ($)(1)
---------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Edwin F. Hale, Sr............................ 135,333(2) 126,667(4) $0 $0
Joseph A. Cicero............................. 16,500(3) 60,000(5) $0 $0
George H. Mantakos........................... 22,550(3) 40,000(5) $0 $0
</TABLE>
- ------------------------
(1) Represents the total gain which would be realized if all in-the-money
options held at December 31, 1999 were exercised, determined by multiplying
the number of shares underlying the options by the difference between the
per share option exercise price and the fair market value of the shares at
December 31, 1999 of $8.25.
(2) The exercise price of these options is $9.09 per share with respect to
132,000 of these options and $8.6875 per share with respect to 3,333 of
these options.
(3) The exercise price of these options is $9.09 per share.
(4) The exercise price of these options is $11.75 per share with respect to
120,000 of these options and $8.6875 per share with respect to 6,667 of
these options.
(5) The exercise price of these options is $11.75 per share.
EMPLOYMENT ARRANGEMENTS AND AGREEMENTS
The Bank has a key man life insurance policy on Mr. Hale in the amount of
$10,000,000.
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. The agreement provides for an annual salary of $125,000
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 a maximum amount of $20,000
per year. The Compensation Committee is empowered to grant a larger bonus to
Mr. Mantakos. Mr. Mantakos receives the use of an automobile provided by the
Bank. The term of the Employment Agreement is one year, expiring May 1, 2000
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 part of Mr. Mantakos'
Common Stock.
10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board consists of Messrs. Bondroff,
O'Conor and Sibel, who are non-employee directors and have no interlocking
relationship or insider participation as defined by the Securities and Exchange
Commission.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The objectives of the Company's management compensation policy are to
attract and retain the best available executive officers; to motivate them to
achieve the goals set forth in the Company's business plan; to link executive
and stockholder interest through equity-based compensation; and to provide a
compensation package that recognizes the executive's contribution, as well as
the Company's performance, measured by both short-term and long-term
achievements.
The management compensation policy and the general compensation policies of
the Company are established by the Compensation Committee of the Board (the
"Committee"). The Committee formulates the compensation policy and specific
compensation levels for executive officers and administers the Company's stock
option plans.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Committee believes that the compensation of the Chief Executive Officer,
Edwin F. Hale, Sr., should be based largely upon corporate performance relative
to the Company's business plan. In setting Mr. Hale's salary and bonus, the
Committee considered the key role Mr. Hale plays in the development and
expansion of the Company, its substantial growth, the increase in public
awareness of the Company and the development of commercial and consumer business
of the Bank.
In 1995, Mr. Hale acquired a significant financial position in the Company's
predecessor and changed the name to First Mariner Bancorp. He developed a
business plan which emphasized rapid growth, branch expansion, market awareness,
a strong capital base and the generation of profits within a short time frame.
Largely through Mr. Hale's efforts, personal contact and his own financial
resources, the Company generated capital in 1995 and 1996 through private
placements. The Company then undertook an initial public offering in December,
1996 to generate significant additional capital and to offer stock in the public
market. This public offering was very successful largely due to the efforts of
Mr. Hale and his image and reputation in the market and community.
After the success of the capital generation program, the Company with
Mr. Hale's leadership, implemented its business plan of expansion of branch
locations and growth in loans and deposits. During the period mid-1995 to the
end of 1999, the Company increased its branch locations to twenty-four from two
while assets grew twenty five times to $616 million at year end 1999. According
to investment banking sources, the Company's growth rate is one of the fastest
in the United States. Public awareness of the Company and the Bank's customer
base have also increased substantially over this period. The Company recorded
its first profitable quarter in early 1997 and has remained profitable each
quarter thereafter.
In establishing Mr. Hale's total compensation for 1999, including base
salary and bonus, the Committee reviewed his performance for the prior year,
including the extraordinary growth by the Bank, the significant increase in
pre-tax profitability and the enhanced awareness and reputation of the Company
in the Greater Baltimore area. The Committee set Mr. Hale's base salary for
fiscal year 1999 at $250,000, which reflected no increase over the prior year,
and a bonus of $100,000.
Mr. Hale also received stock options in 1999. To link more strongly the
Company's interest with that of its shareholders Mr. Hale was granted an option
to purchase 120,000 shares of Common Stock in the form of a step up option.
Under the plan the option is exercisable only at certain prices which are above
the price at which the shares were issued. Specifically, 50% of the options may
be exercised when the price
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of the Company's stock trades at the set strike price ($11.75) plus $2.50 per
share. Twenty five percent may be exercised when the price of the Company's
stock trades at the strike price ($11.75) plus $5.00 per share. The last twenty
five percent may be exercised only when the price of the Company's stock trades
at the strike price ($11.75) plus $7.50. In November 1999, Mr. Hale also
received an option to purchase 10,000 shares of Common Stock. The option is
exercisable immediately as to one-third of the shares covered by the option,
one-third of the shares may be purchased after the first anniversary, and the
remaining one-third may be purchased after the second anniversary of the date
the option was granted. The exercise price for all shares covered by the option
is $8.69 per share.
COMPENSATION OF OTHER EXECUTIVE OFFICERS
Recommendations regarding the base salary of the Executive Officers, other
then the Chief Executive Officer, are made to the Committee by the Chief
Executive Officer and either approved or modified by the Committee. The
recommendation as to the bonus paid to each Executive Officer is based upon a
review of the performance of these officers during the prior year by the Chief
Executive Officer and includes the factors described in the preceding section on
compensation of the Chief Executive Officer. The Committee concurred with the
recommendations made by the Chief Executive Officer.
Mr. Cicero and Mr. Mantakos were granted options to purchase 60,000 shares
and 40,000 shares, respectively. The options were granted on the same terms,
including the same step up vesting schedule, as the step up option granted to
Mr. Hale.
SUBMITTED BY THE COMPENSATION COMMITTEE OF FIRST MARINER
BANCORP BOARD OF DIRECTORS
Barry B. Bondroff, Chair
James P. O'Conor
Hanan Y. Sibel
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PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock,
since its 1996 initial public offering, with the performance of a broad market
index and a nationally-recognized industry standard assuming in each case both
an initial $100 investment and reinvestment of dividends. The Company has
selected the Nasdaq Market Index as the relevant broad market index because
prices for the Company's Common Stock are quoted on Nasdaq National Market.
Additionally, the Company has selected the Middle Atlantic Bank Index as the
relevant industry standard because such index consists of financial institutions
which are headquartered in the mid Atlantic region and the Company believes that
such institutions generally possess assets, liabilities and operations more
similar to the Company than other publicly-available indices. However, given the
short history of the Company's operations and its rapid growth, the Company
believes no truly appropriate comparative index exists.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1996 1997 1998 199
<S> <C> <C> <C> <C>
First Mariner Bancorp 100 123.08 110.54 69.81
Middle Atlantic Bank Index 100 163.09 179.52 120.84
Nasdaq Market Index 100 122.32 172.52 315.2
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------
1996 1997 1998 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
First Mariner Bancorp................................... $100.00 $123.08 $110.54 $ 69.81
Middle Atlantic Bank Index.............................. $100.00 $163.09 $179.52 $120.84
Nasdaq Market Index..................................... $100.00 $122.32 $172.52 $315.20
</TABLE>
13
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has had in the past, and expects to have in the future, banking
transactions in the ordinary course of business with directors and executive
officers on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with other unaffiliated persons and, in the opinion of management,
these transactions do not and will not involve more than the normal risk of
collectibility or present other unfavorable features.
The Bank has seven full-service branches with ATMs and seven non-branch
ATMs in Mars Super Markets. The Bank pays rent of $35,000 per year to Mars Super
Markets, Inc. for approximately 200-500 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 terms of the arrangement are described in a Master
Lease Agreement between the Company and Mars dated March 1, 1996. Christopher P.
D'Anna, Executive Vice President of Mars Super Markets, Inc., is a member of the
Board of Directors of the Company and the Bank.
The Company entered into a 16 year Lease Agreement dated November 1, 1997,
amended and restated on October 1, 1998 and amended on January 1, 2000, with
Hale Properties, L.L.C., a wholly owned corporation of Edwin F. Hale, Sr. for
the premises that has a full service branch of the Bank and the headquarters and
executive offices of the Bank and the Company at 1801 South Clinton Street,
Baltimore, Maryland. The Company pays rent of $553,717 per year. Mr. Hale is the
Chairman and Chief Executive Officer of the Company.
The Company entered into a 16-year Lease Agreement dated September 1, 1998,
amended and restated on October 1, 1998, with Building No 2, L.L.C., a wholly
owned corporation of Edwin F. Hale, Sr. for the premises that has served as the
operations center of the Company at 1516 Baylis Street, Baltimore, MD 21224. The
Company pays the rent of $132,000 per year. In addition, the Company entered
into a 13-year Lease Agreement dated January 1, 2000 with Building No 2, L.L.C.,
a wholly owned corporation of Edwin F. Hale, Sr. for the first floor of the
premises that has served as the operations center of the Company at 1516 Baylis
Street, Baltimore, Maryland 21224. The Company pays the rent of $99,720 per
year.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP performed the audit of the Company's financial statements for the
year ended December 31, 1999. Representatives of KPMG LLP will be present at the
Annual Meeting and will be given the opportunity to make a statement if they so
desire, and will answer appropriate questions directed to them relating to their
audit of the Company's consolidated financial statements.
The selection of independent auditors to audit the Company's consolidated
financial statements for the year ended December 31, 2000, has not yet been
made. The Board of Directors intends to make its selection based on the
recommendation of the Audit Committee by the end of the second quarter of 2000,
and will consider the expertise, skill, services offered and cost of prospective
auditing firms.
STOCKHOLDER PROPOSALS
Any stockholder desiring to present a proposal pursuant to Rule 14a-8 of the
Securities Exchange Act of 1934, as amended to be included in the proxy
statement and voted on by the stockholders at the Annual Meeting of Stockholders
to be held in May 2001 must submit in writing proposals, including all
supporting materials, to the Company at its principal executive offices no later
than December 1, 2000 (120 days before the date of mailing based on this year's
proxy statement date) and meet all other requirements for inclusion in the proxy
statement. Additionally, the Company will be authorized to exercise
discretionary voting authority with respect to any stockholder proposal not
disclosed in the Company's 2001 proxy
14
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statement if the Company has not received written notice of such proposal by
February 14, 2001 (45 days before the date of mailing based on this year's proxy
statement date).
ANNUAL REPORT
THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1999 IS ENCLOSED
HEREWITH. COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, ARE
AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON A 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
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APPENDIX A
SOLICITED BY THE BOARD OF DIRECTORS
FIRST MARINER BANCORP
ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 2000
The undersigned stockholder of First Mariner Bancorp (the "Company")
hereby appoints James Gast and Eugene A. Friedman and each of them acting
singly, with full power of substitution, the attorneys and proxies of the
undersigned and authorizes them to represent and vote on behalf of the
undersigned as designated all of the shares of capital stock of the Company
that the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held on May 2, 2000 and at any adjournment
or postponement of such meeting for the purposes identified on the reverse
side of this proxy and with discretionary authority as to any other matters
that may properly come before the Annual Meeting, including substitute
nominees, if any of the named nominees for Director should be unavailable to
serve for election in accordance with and as described in the Notice of
Annual Meeting of Stockholders and Proxy Statement. This proxy when properly
executed will be voted in the manner directed herein by the undersigned
stockholder. If this proxy is returned without direction being given, this
proxy will be voted FOR proposal 1. The undersigned acknowledges receipt
of the Company's 1999 Annual Report and the Notice of the Annual Meeting of
the Company.
(IMPORTANT--TO BE SIGNED ON THE REVERSE SIDE) SEE REVERSE
SIDE
<PAGE>
Please Detach and Mail in the Envelope Provided
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<CAPTION>
<C> <S> <S> <S>
/ / Please mark your
A / X / votes as in this
/ / example.
WITHHOLD The Board of Directors recommends a vote FOR proposal 1.
FOR ALL AUTHORITY TO VOTE
NOMINEES LISTED FOR ALL NOMINEES NOMINEES:
AT RIGHT LISTED AT RIGHT Term Expiring 2003 2. In their discretion the proxies are authorized
1. Election of / / / / Joseph A. Cicero to vote upon any other business which properly
Directors / / / / Melvin S. Kabik comes before the meeting and any adjournments
/ / / / Howard Friedman thereof.
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING Jay JJ. Matricciani
NOMINEE(S): John J. Oliver, Jr. PLEASE MARK, SIGN, DATE AND RETURN CARD PROMPTLY
Hanan Y. Sibel USING THE ENCLOSED ENVELOPE.
Leonard Stoler
Term Expiring 2002
Patricia Schmoke
____________________________________________ Term Expiring 2001
Michael J. Lynch
MARK HERE FOR / / MARK / /
ADDRESS CHANGE / / HERE FOR / /
AND NOTE BELOW / / COMMENTS / /
Signature ______________________________ Date ___________, 2000 Signature ______________________________ Date ___________, 2000
Note: Please sign exactly as your name appears on stock certificate. If acting as attorney, executor, trustee, guardian, or in
other representative capacity, sign name and title. If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by authorized person. If held jointly, both parties must
sign and date.
</TABLE>
