Exhibit 10.15

 

SEVERANCE AGREEMENT

Change in Control

 

This AGREEMENT (the “Agreement”) is dated as of April 2, 2003 between First
Mariner Bancorp (the “Company”), a Maryland corporation, and Mark A. Keidel (the
“Employee”).

 

WHEREAS, the Employee is currently serving as the Company’s Chief Financial
Officer and Senior Vice President and Executive Vice President and Chief
Financial Officer of First Mariner Bank.

 

WHEREAS, the Board of Directors of the Company believes that it is in the best
interests of the Company to encourage the Employee’s continued employment with
and dedication to the Company in the face of potentially distracting
circumstances arising from the possibility of a sale of the Company;

 

WHEREAS, the Board of Directors of the Company has approved and authorized the
entry into this Agreement with the Employee; and

 

WHEREAS, the parties desire to enter into this Agreement setting forth the terms
and conditions for the payment of special compensation to the Employee in the
event of a sale of the Company;

 

NOW, THEREFORE, it is AGREED as follows:

 

1.               TERM.  The initial term of this Agreement shall be for a period
commencing on the date hereof  and ending on the earlier of (i) the date sixty
(60) months after the Effective Date, or (ii) the date on which the Employee, by
reason of his or her voluntary resignation, is no longer employed by the Company
or any subsidiary of the Company or (iii) the termination of the Employee by the
Company (provided that the Agreement will continue in effect for one year after
the termination when the termination is for reasons other than “for cause” as
defined below).  Upon the expiration of the initial term, this Agreement shall
be automatically renewed for one additional year on each anniversary of the date
hereof, unless the Company gives contrary written notice to the Employee at
least twelve (12) before such renewal date.  References herein to the term of
this Agreement shall include the initial term and any additional years for which
this Agreement is renewed.

 

2.               Special Compensation in the Event of a Sale.

 

(a)          If, during the term of the Agreement, there is a sale of the
Company (as defined below) and the Employee’s employment is terminated
involuntarily, or voluntarily with Good Reason (as defined in Section

 

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2(b) hereof), in connection with or within 18 months after a sale of the
Company, unless such termination is “for cause” (as defined below) or occurs by
virtue of normal retirement, permanent and total disability (as defined in
Section 22(e) of the Internal Revenue Code) or death, subject to Section 2(d)
below.

 

(1) The Employee shall be entitled to receive from the Company, for services
previously rendered to the Company, a lump sum cash payment equal to 2.00 times
Base Compensation, as defined is Section 2(e) below:

 

(2)            The Bank shall provide at its expense (or shall reimburse the
Employee for the cost of) (I) continuation coverage (within the meaning of
Section 601-607 of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”) under any group health plan (as defined for such purposes in
Section 607(1) of ERISA) that covers the Employee at the time of any termination
of his employment and (ii) continued life insurance and long term disability
insurance coverage substantially equal to those in effect before the termination
of his employment for a period of twelve (12) months or, if earlier, until he
becomes employed full time by another employer; and

 

(3)  If requested, by the employee, the Company shall provide to the Employee at
the Company’s expense comprehensive outplacement services for a period of up to
six (6) months following termination of his employment until he accepts other
full time employment.

 

(4)  All stock option awards or other forms of stock awards containing vesting
provisions will accelerate and become fully vested upon the conditions outlined
in section 2(a) above being met.

 

Payment under Section 2(a)(1) shall be made at the time of the termination of
employment and shall be in lieu of any amount that may be otherwise owed to the
Employee as damages for the loss of employment.  The employee may request that
the payment be spread evenly over the number of months outlined in 2(a)(1) above
in lieu of a lump sum payment.  Payment under Section 2(a)(1) shall not be
reduced by any compensation that the Employee may receive from other employment
with another employer after termination of the Employee’s employment with the
Bank.  No payment hereunder shall affect the Employee’s entitlement to any
vested retirement benefits or other compensation payments.  The obligation of
the Company to make any payment hereunder is subject to any law or regulation of
the Board of Governors of the Federal Reserve System or the Federal Deposit
Insurance Corporation, including any final regulation promulgated under 12
U.S.C. Section 1828(k), which would prohibit or limit such payment.  Termination
“for cause” means termination because of the Employee’s personal dishonesty,
willful gross

 

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misconduct that is materially injurious to the Company, breach of fiduciary duty
involving personal profit, willful violation of any law, regulation or cease and
desist order or similar “written agreement” relating to the Company or
conviction of a felony.

 

(b)         To establish that a voluntary termination was with Good Reason, the
Employee shall state in his notice of resignation the reasons why he believes
that Good Reason exists for his resignation.  For purposes of this Agreement,
“Good Reason” shall include a material reduction in the  authority,
responsibilities, duties or scope of the Employee’s position from those that
existed before the sale, a reduction in the Employee’s salary from the rate that
existed before the sale, or requirement that the Employee relocate to an office
that is more than 35 miles distant from the City of Baltimore.  Unless the
Company within 30 days of the date of such notice of resignation, shall reject
the Employee’s statement that Good Reason exists, the Employee shall be
conclusively deemed to have voluntarily resigned with Good Reason.  If the
Company rejects the Employee’s statement of Good Reason exists, the dispute
shall be resolved by arbitration in accordance with Section 5 hereof, and the
Company shall have the burden of proving that such rejection of the Employee’s
statement was proper.

 

(c)          A “sale of the Company”, for purposes of this Agreement, shall be
deemed to have taken place if:  (I) any person other than Edwin F. Hale, Sr. and
members of his immediate family (within the meaning of Section 318 of the Code)
becomes the beneficial owner of 50 percent or more of the total number of voting
shares of the Company; (ii) there is a sale or other transfer of substantially
all of the operating assets of the Company or a subsidiary of the Company by
which the Employee is primarily employed (other than to a subsidiary of the
Company); or (iii) the Company’s beneficial ownership of the total voting shares
of a subsidiary by which the Employee is primarily employed is reduced to less
than 50 percent; or (iv) the Company or any subsidiary of the Company to which
Employee is primarily employed, merges, combines, or consolidated with any
company other than a subsidiary of the Company.   For purposes of the Agreement,
a “person” includes an individual corporation, partnership, trust or group
acting in concert.  A person for these purposes shall be deemed to be a
beneficial owner as that term is used in Rule 13d-3 under the Securities
Exchange Act of 1934.

 

(d)         Notwithstanding any other provision of this Agreement or of any
other agreement, contract, or understanding heretofore or hereafter entered into
by Employee with the Company, or any affiliate of the Company, except an
agreement, contract, or understanding hereafter entered into that expressly
modifies or excludes application of the Section 2(d) (the

 

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“Other Agreements”), and notwithstanding any formal or informal plan or other
arrangement heretofore or hereafter adopted by the Company or any affiliate of
the Company for the direct or indirect provision of the compensation of the
Employee (including groups or classes of participants of beneficiaries of which
the Employee is a member), whether or not such compensation is deferred, is in
cash, or is in the form of a benefit to or for the Employee (a “Benefit Plan”),
the employee shall not have any right to receive any payment or other benefit
(including any acceleration of vesting or payment that would otherwise cause a
parachute payment) under this Agreement, any Other Agreement, or any Benefit
Plan to the extent that such payment or benefit, taking into account all other
payments or benefits to or for the Employee under this Agreement, all Other
Agreements, and all Benefit Plans, would cause any payment to the Employee under
this Agreement to be considered an “excess parachute payment” within the meaning
of Section 280G(b)(1) of the Internal Revenue Code (an “Excess Parachute
Payment”).  In the event that the receipt of any such payment or benefit under
this Agreement, any Other Agreement or any Benefit Plan would or reasonably
could cause the Employee to be considered to have received an Excess Parachute
Payment under this Agreement, then the Employee shall have the right, in the
Employee’s sole discretion, to designate those payments or benefits (including
any acceleration of vesting or payment that would otherwise cause a parachute
payment) under this Agreement, any Other Agreements, and/or any Benefit Plans,
which should be reduced, eliminated or made contingent on the Employee’s
performance of services (or agreement to refrain from the performance of
services) after the date of sale of the Company on terms and conditions
consistent with those set forth in the agreement attached as Exhibit A, in all
cases so as to avoid having the payment to the Employee under this Agreement be
deemed to be an Excess Parachute Payment.  Any determination of whether or not
an Excess Parachute Payment results from any payment, benefit, or agreement
referenced in this paragraph (including the form of agreement attached as
Exhibit A) shall be made by an accounting firm or law firm that is mutually
acceptable to the Employee and the Company.

 

(e)          “Base Compensation,” for purposes of this Agreement, shall mean the
greater of (i) the Employee’s annual salary computed at the annual rate in
effect immediately before payment, or (ii) the amount paid to the Employee
during the 12-month period preceding the sale of the Company, divided by twelve
and the average bonus paid over the past three years under the Company’s
executive management bonus plan.

 

3.               No Assignments.  This Agreement is personal to each of the
parties hereto.  No party may assign or delegate any rights or obligations
hereunder without

 

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first obtaining the written consent of the other party hereto.  However, in the
event of the death of the Employee, all rights to receive payments hereunder
shall become rights of the Employee’s estate.

 

4.               Amendments or Additions; Action by Board of Directors.  No
amendments or additions to this Agreement shall be binding unless in writing and
signed by the parties hereto.  The prior approval by a two-thirds affirmative
vote of the Board of Directors of the Company shall be required in order for the
Company to authorize any amendments or additions to this Agreement.

 

5.               Arbitration.  Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in the Baltimore, Maryland metropolitan area in accordance with the
rules of the American Arbitration Association then in effect.  Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.  The
Employee, if he is the prevailing party or if there is a settlement, shall be
entitled to the costs and expenses (including reasonable attorney’s fees) of the
arbitration and enforcement of the arbitrator’s award, and shall be entitled to
prejudgment interest at 120 percent of the applicable federal rate, compounded
semiannually, in effect under Section 1274(d) of the Code as of the date payment
hereunder was due.

 

 

6.               Continued Enforceability after Change in Ownership;
Enforceability Against Successors and Transferees.  The parties intend that this
Agreement shall continue to be a legally valid, binding agreement, enforceable
in accordance with its terms, notwithstanding a change in the ownership of the
stock of the Company.  The parties further agree that any transferee of all or
substantially all of the assets of the Company or any other successor of the
Company, shall be subject to the obligations of the Company, hereunder, whether
such transfer or succession occurs by merger, operation of law, or otherwise. 
Except to the extent required by applicable law related to banking or deposit
insurance or by applicable regulations thereunder, the Company agrees that
before the consummation of any such transfer (other than a transfer whereby such
obligations are assumed by operation of law) it will obtain the agreement of the
transferees, enforceable by the Employee, to assume such obligations.  No such
transfer shall release the Company of its obligations hereunder without the
prior written consent of the Employee.

 

7.               Section Headings.  The section heading used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.

 

8.               Governing Law.  This Agreement shall be governed by the laws of
United States to the extent applicable and otherwise by the laws of the State of
Maryland, excluding the choice of law rules thereof.

 

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FIRST MARINER BANCORP

 

 

 

 

By:

      /s/ Joseph A. Cicero

 

 

 

      Joseph A. Cicero

 

 

      President & COO

 

 

 

 

 

 

 

 

EMPLOYEE:

 

 

 

 

 

 

 

 

     /s/ Mark A. Keidel

 

 

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