Document:

Exhibit 10.13

 

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 Joseph A. Cicero. (the
“Employee”).

 

WHEREAS, the
Employee is currently serving as the Company’s President and Chief Operating
Officer.

 

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 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 2.99 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

 

2

 

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 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.

 

3

 

(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 “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.

 

4

 

(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 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

 

5

 

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.

 

 

	
   

  	
  FIRST
  MARINER BANCORP

  
	
   

  
	
   

  	
  By: 

  	
   

  	
  /s/ George
  H. Mantakos

  	
   

  
	
   

  	
   

  	
  George H.
  Mantakos

  
	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  
	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  
	
   

  
	
   

  	
   

  	
  /s/ Joseph
  A. Cicero

  	
   

  

 

6Exhibit 10.14

 

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 George H. Mantakos. (the
“Employee”).

 

WHEREAS, the
Employee is currently serving as the Company’s Executive Vice President and
President 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 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 2.99 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

 

2

 

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 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.

 

3

 

(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 “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.

 

4

 

(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 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

 

5

 

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.

 

 

	
   

  	
  FIRST
  MARINER BANCORP

  
	
   

  
	
   

  	
  By: 

  	
   

  	
  /s/ Joseph
  A. Cicero

  	
   

  
	
   

  	
   

  	
  Joseph A.
  Cicero

  
	
   

  	
   

  	
  President
  & COO

  
	
   

  
	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  
	
   

  
	
   

  	
   

  	
  /s/ George
  H. Mantakos

  	
   

  

 

6

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