Michael R. Watson
is the interim Chairman of the Board of the Company and the Bank. Mr. Watson is the President of the International Pilots Association and the former President of the American Pilots Association. Mr. Watson has served as a member of the Federal Reserve Board.
Mr. Watson has extensive management level experience both inside and outside of the financial services industry. Such management experience in regulated industries has exposed Mr. Watson to many of the issues facing public companies today, particularly regulated entities, making Mr. Watson a
valued component of a well-rounded board.
Hector Torres
is President of Prosaber Consulting, an Emergency Management Consulting Company. He was the former Executive Director of the Governors Commission on Hispanic Affairs. He was formerly the Battalion Chief and Public Information Officer of the Baltimore City Fire Department.
Mr. Torres is an entrepreneur and is active in both the business and civic communities in the Baltimore area. Mr. Torres is one of the areas most visible minority leaders.
Gregory A. Devou
, currently retired, was formerly the Executive Vice President and Chief Marketing Officer for CareFirst Blue Cross BlueShield, a healthcare payor since 1996. Prior to that, Mr. Devou served for a year as CareFirst Senior Vice President for Corporate Marketing.
Mr. Devou brings significant business and management level experience from a setting outside of the financial services industry. In addition, through his local business experience, Mr. Devou has gained significant local marketing knowledge, adding additional value to the board.
Term to Expire in 2014
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Name
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Age
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Director Since
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Barry B. Bondroff
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63
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1995
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Patricia Schmoke, MD
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58
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1999
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John Brown III
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64
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2002
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Anirban Basu
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43
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2008
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Barry B. Bondroff
became a partner in the certified public accounting firm of Gorfine, Schiller & Gardyn, P.A. on July 1, 2008. He was the former managing partner for the certified public accounting firm of Smart & Associates in Baltimore, MD. Prior to that, he was 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. Mr. Bondroff is a member of the Board of Directors of Medifast, Inc. (NYSE:
MED).
Mr. Bondroff is a certified public accountant and has the financial background to qualify as an audit committee financial expert. Mr. Bondroff provides expertise with regard to tax, financial, and accounting matters.
Patricia Schmoke, MD
has been a practicing ophthalmologist since 1982. She is also the president of Metropolitan Eye Care Associates, providing eye care with Baltimore Medical System.
Dr. Schmokes strong ties to the community, through her medical practice and involvement in civic and professional organizations, provides the Board with valuable insight regarding the local business and consumer environment.
John Brown III
is President of M.B.K. Enterprises, Inc. (R. J. Bentleys Restaurant) and managing partner of the College Park Professional Office Building, LLC. Mr. Brown is also the former Chairman of the Maryland Stadium Authority.
As President of M.B.K. Enterprises, Inc. and managing partner of the College Park Professional Office Building, LLC, Mr. Brown provides the Board with essential business and finance experience, as well as valuable leadership capability.
Anirban Basu
is the founder, Chairman, and CEO of Sage Policy Group, Inc., an economic and policy consulting firm in Baltimore, Maryland since 2004. He has a Bachelor of Science Degree from
5
Georgetown University, and Masters Degrees from Harvard University and The University of Maryland as well as a J.D. from the University of Maryland School of Law.
As an entrepreneur and as Chairman and CEO of Sage Policy Group, Inc., Mr. Basu brings significant business and management level experience from a setting outside of the financial services industry. In addition, through his business and education experience, Mr. Basu has gained significant
technological knowledge, adding additional value to the board.
DIRECTORS EMERITUS
We currently have two Directors Emeritus: Melvin S. Kabik and Governor Marvin Mandel.
BOARD MEETINGS AND COMMITTEES
GOVERNANCE OF THE COMPANY
Our business, property and affairs are managed by or, are under the direction of, the Board of Directors, pursuant to the Maryland General Corporation Law and our Bylaws. Members of the Board of Directors are kept informed of the Companys business through discussions with the Chairman,
with the President and other Executive Officers, and with key members of management by reviewing materials provided to them and participating in meetings of the Board and its committees.
The Board of Directors and management periodically review the corporate governance policies and practices of the Company, including by comparing our current policies and practices to policies and practices suggested by our outside counsel and other public companies. Based upon these periodic
reviews, the Board of Directors adopts changes from time to time that the Board believes are the best corporate governance policies and practices for the Company and/or are required by applicable law, including the Securities Exchange Act of 1934, as amended (the Exchange Act), and The
NASDAQ Stock Market.
DIRECTOR INDEPENDENCE
The Board of Directors has determined that all of its members are independent under the listing standards of The NASDAQ Stock Market, except for the management directors, Mark A. Keidel and George H. Mantakos, who are each executive officers of the Company. In determining the
independence of its directors, the Board of Directors considered transactions, relationships and arrangements between the Company and its directors that are not required to be disclosed under the heading
Transactions with Certain Related Persons,
including loans or lines of credit that 1st Mariner Bank
has directly or indirectly made to Directors Basu, Bondroff, Brown, Caret, Devou, Keidel, Mantakos, Schmoke, and Torres.
BOARD LEADERSHIP STRUCTURE AND BOARDS ROLE IN RISK OVERSIGHT
The Board of Directors has determined that the separation of the offices of Chairman of the Board and President and Chief Executive Officer will enhance Board independence and oversight. Moreover, the separation of the Chairman of the Board and President and Chief Executive Officer will
allow the President and Chief Executive Officer to better focus on his responsibilities of running the Company, enhancing stockholder value and expanding and strengthening our franchise while allowing the Chairman of the Board to lead the Board in its fundamental role of providing advice to and
independent oversight of management. Consistent with this determination, Michael R. Watson serves as Chairman of the Board of Directors. Mr. Watson is independent under the listing requirements of The NASDAQ Stock Market.
To further strengthen the regular oversight of the full Board and in compliance with the requirements of The NASDAQ Stock Market, the Audit, Nominating and Compensation Committees of the Board are entirely comprised of independent directors. The Compensation Committee reviews and
evaluates the performance of all executive officers of the Companyincluding the CEOand reports to the Board. The Audit Committee oversees the Companys
6
financial practices, regulatory compliance, accounting procedures and financial reporting functions. In addition, the Audit Committee is specially entrusted by law to fully review and make recommendations to the full Board on related party transactions and possible conflicts of interest, if any. Furthermore,
as a regulated entity, all related party transactions are closely scrutinized by federal and state government agencies that regularly examine the Company.
The Board believes that success is promoted by active and independent directors and loyal and hard-working executives who act consistently with a strong set of corporate governance ethics, rather than a particular Board structure. The Board believes that it needs to retain the ability to balance
board structure with the flexibility to determine board leadership. The Board does not currently have a lead director.
Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day
management of risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented
by management are adequate and functioning as designed. To do this, the Chairman of the Board meets regularly with management to discuss strategy and the risks facing the Company. Senior management attend Board meetings and is available to address any questions or concerns raised by the Board
on risk management and any other matters. The Chairman of the Board and the other independent members of the Board work together to provide strong, independent oversight of the Companys management and affairs through its standing committees and special meetings of independent directors.
DIRECTORS ATTENDANCE AT ANNUAL MEETINGS
Although the Company does not have a formal policy regarding director attendance at annual stockholder meetings, all directors are encouraged to attend the annual meeting of stockholders and the annual meeting of the Board of Directors. All of the Companys directors who were serving as such
attended the 2011 Annual Meeting of Stockholders.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Stockholders may communicate directly with any member of the Board of Directors of the Company by writing the First Mariner Bancorp Board of Directors, 1501 South Clinton Street, Baltimore, MD 21224. Communications received are distributed to the Chairman of the Board, Chairman of the
Audit Committee or other member of the Board as appropriate, depending on the facts and circumstances of the communications.
COMMITTEES OF THE BOARD OF DIRECTORS
During 2011, the Board of Directors met eight times, the Audit Committee met eight times, the Compensation Committee met once, and the Nominating Committee met once. Each director attended at least 75% or more of all meetings of the Board of Directors and Committees of the Board on
which he or she served during 2011.
All members of each of the Audit, Compensation and Nominating Committees are independent in accordance with the listing requirements of The NASDAQ Stock Market. Each committee operates under a written charter that is approved by the Board of Directors that governs its composition,
responsibilities and operation. Each committee reviews and reassesses the adequacy of its charter at least annually. The charters of all three committees are available in the Governance Documents portion of the Investor Relations section of the Companys Web site
7
(www.1stmarinerbancorp.com). The following table identifies our standing committees and their members as of October 4, 2012.
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Name
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Audit
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Compensation
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Nominating
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Anirban Basu
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Barry B. Bondroff
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X
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Chairman
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John Brown III
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X
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X
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Robert L. Caret
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X
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X
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Chairman
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Gregory A. Devou
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X
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X
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X
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Mark A. Keidel
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George H. Mantakos
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John J. Oliver, Jr.
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Patricia L. Schmoke
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Hector Torres
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Michael R. Watson
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Chairman
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AUDIT COMMITTEE
The Board of Directors has determined that Barry B. Bondroff, CPA qualifies as an audit committee financial expert under the rules of the Securities and Exchange Commission (the SEC).
The Audit Committee meets with management and independent public accountants to review financial results and the quarterly and annual reports, discuss the financial statements, the auditors independence and accounting methods, and recommend and review with such accountants and management
the internal accounting procedures and controls. The Audit Committee also discusses with the Companys senior management and independent public accountants the process used for certifications by the Companys CEO and CFO that are required by the Exchange Act and the rules promulgated
thereunder. The Audit Committee is responsible for engaging the independent public accountants and also reviews, considers and makes recommendations regarding proposed related party transactions, if any. The Audit Committee Report is included in this proxy statement.
COMPENSATION COMMITTEE
The Compensation 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-based compensation is granted and the terms of such grants, and reviews the selection of
officers who participate in incentive and other compensation plans and arrangements. The Compensation Committee reviews all components of compensation including base salary, bonus, equity compensation, benefits and other perquisites. In addition to reviewing competitive market values, the
Compensation Committee also examines the total compensation mix, pay-for-performance relationship and how all elements, in the aggregate, comprise the executives total compensation package. The CEO makes recommendations to the Compensation Committee from time to time regarding the
appropriate mix and level of compensation for other officers. Those recommendations consider the objectives of our compensation philosophy and the range of compensation programs authorized by the Compensation Committee. Decisions by the Compensation Committee with respect to the
compensation of executive officers are approved by the full Board of Directors. The Compensation Committee determines director compensation by reviewing peer group comparison reports prepared by compensation consultants.
NOMINATING COMMITTEE
The Nominating Committee selects qualified persons as nominees for election by the stockholders to the Companys Board of Directors. The duties and responsibilities of the Nominating Committee include, among other things:
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Establish criteria and qualifications for Board membership, including standards for assessing independence.
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8
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Identify and consider candidates, including those recommended by stockholders and others, to fill positions on the Board, and assess the contributions and independence of incumbent directors in determining whether to recommend them for reelection to the Board.
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Recommend to the Board candidates for election or reelection at each annual meeting of stockholders.
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In evaluating candidates for nominees for director, the Nominating Committee considers the needs of the Company with respect to the particular talents and experience of its directors. Nominees should have, among other things, the highest ethical standards and integrity; a willingness to act and be
accountable for Board decisions; an ability to provide wise, informed and thoughtful counsel to top management on a range of issues; loyalty and commitment to driving the success of the Company; sufficient time to devote to the affairs of the Company; and a history of achievements that reflect high
standards for the nominee and others. Further, when identifying nominees to serve as director, the Nominating Committee seeks to create a Board that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership,
vision and strategy, business operations, business judgment, industry knowledge and corporate governance.
The Nominating Committee may identify director nominees through a combination of referrals, including by management, existing Board members, stockholders, direct solicitations and from outside search firms if warranted. Once a candidate has been identified, the Nominating Committee reviews
the individuals experience and background and may discuss the proposed nominee with the source of the recommendation.
The Nominating Committees recommendations are presented to the Board of Directors at regularly scheduled meetings. The Nominating Committee will also consider recommendations by stockholders, which must be submitted in writing to the Secretary of the Company at its principal executive
office and include the recommended candidates name, biographical data and qualifications. It should be noted that a stockholder recommendation is not a nomination, and there is no guarantee that a candidate recommended by a stockholder will be approved by the Nominating Committee or nominated
by the Board of Directors. A stockholder who desires to nominate a candidate for election may do so only in accordance with the Companys Bylaws. Pursuant to the Companys Bylaws, any stockholder that wishes to submit director nominations must submit advance notice of the proposed nomination to
the Secretary of the Company not less than 90 days or more than 120 days in advance the anniversary date of the release of the Companys proxy statement to stockholders in connection with the preceding years annual meeting of stockholders, provided that if the date of the annual meeting has been
changed by more than 30 days from the anniversary of the annual meeting date stated in the previous years proxy statement, nominations must be received by the Company not later than the close of business on the 10th day following the first public announcement of the date of the meeting. In addition
to meeting the applicable deadline, nominations must be accompanied by certain information specified in the Companys Bylaws.
The Nominating Committee received no security holder recommendations for nomination to the Board of Directors in connection with the 2012 Meeting.