TRANSITION AGREEMENT WITH GENERAL RELEASE AND INDEPENDENT CONTRACTOR CONSULTANT ENGAGEMENT
Exhibit
10.1
TRANSITION
AGREEMENT WITH GENERAL RELEASE
AND
INDEPENDENT CONTRACTOR CONSULTANT ENGAGEMENT
This
Transition Agreement with General Release and Independent Contractor Consultant
Engagement (this “Agreement”) is entered into by and between 1st Mariner
Bancorp and 1st Mariner
Bank (jointly and/or individually, “1st
Mariner” or the “Bank”), as the party of the first part, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(“Cicero”), as the party of the second part (collectively, the “Parties”), for
the purpose of setting forth mutual promises regarding Cicero’s leaving 1st Mariner
employment for retirement and to resolve any and all potential and/or
actual disputes and issues that Cicero may have with respect to 1st
Mariner. In consideration of the mutual undertakings and agreements
set forth herein, as well as other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, 1st Mariner
and Cicero agree as follows:
1. Termination of Employment
and Subsequent Independent Contractor Consulting Agreement.
1.1. By
mutual agreement of the Parties, Cicero’s employment with 1st Mariner
Bancorp, 1st
Mariner Bank and
any and all of their affiliates shall terminate on, and his last day of active
employment shall be, May 22, 2009. Any disability or long term care
insurance enjoyed by Cicero as an employee will terminate on May 22, 2009. The
termination, continuation and/or conversion of any life insurance benefits
enjoyed by Cicero as an employee shall be governed by the terms of such benefit
plans. Any health insurance benefit coverage Cicero and/or his covered
dependents had shall terminate on May 31, 2009. Cicero and his
dependents will be financially responsible for any health insurance continuation
or conversion coverage after May 31, 2009, except as specifically provided for
otherwise below.
1.2. However,
after four (4) copies of this Agreement signed by Cicero have been returned to
and received by ▇▇▇▇▇▇▇▇ ▇▇▇, Bank Vice President of Human Resources, and upon
this Agreement becoming effective as provided by Paragraph 4 below, Cicero shall
be engaged in a consulting status with 1st Mariner
through December 31, 2009, during which time Cicero will be an
independent contractor and will be entitled to receive and retain fees provided
by Paragraph 2.1 below for the performance of his consultant obligations
pursuant to this Paragraph. It is anticipated that Cicero shall focus
his consulting efforts on 1st
Mariner’s regulatory relations as the Bank works to maintain compliance with
various regulatory matters. Nevertheless, Cicero shall perform any
other additional duties that 1st Mariner
may assign to him from time to time. During this
consulting period, Cicero will provide his full and
complete cooperation to 1st
Mariner; hold himself reasonably available, for up to an average of 40 hours per
month, at times to be determined by the Bank; respond competently and
effectively with information, counsel and advice, to requests for such from
1st
Mariner’s representatives and devote his time, attention, skill and
energy to the professional performance of such duties as are requested of him by
1st
Mariner or its officers. Furthermore, Cicero agrees that to perform
these consulting duties, he will come to 1st
Mariner’s offices when requested by 1st Mariner
on an as needed basis; be available by telephone and e-mail to 1st Mariner
representatives on the same basis; and/or from time to time, attend meetings or
activities at 1st
Mariner’s offices or elsewhere, upon 1st
Mariner’s request.
1.3. Assuming
Cicero works for the Bank through May 22, 2009, Cicero will receive his regular
salary at the level last received as an employee, pro rata, less lawful
deductions, including for state and federal withholding and employment taxes,
through that date. Cicero expressly acknowledges that he is not
eligible to receive any further employment compensation, and that when he has
received the payment for the aforementioned regular salary, he will have
received all monies owed to him from 1st Mariner
for any type of employment compensation, including, without limitation, for any
leave benefits, or for any salary, bonuses, commissions or incentive
pay.
1.4. Cicero
shall resign any and all positions that he holds on any boards of directors,
including any committees thereof, of 1st Mariner
Bancorp and any of its subsidiaries or affiliates, effective
immediately. Cicero shall accomplish such resignations by submitting
a written letter of resignation to each board of which he is a director
concurrently with his execution of this Agreement, stating clearly his intent to
resign effective immediately. Cicero acknowledges that he received no
compensation for serving on any such boards of directors or their committees,
and thus, he is owed no compensation or other moneys related to his service
thereon. Moreover, Cicero covenants and agrees that he will not, at
any time hereafter, hold or attempt to hold a position on any boards of
directors, including any committees thereof, of 1st Mariner
Bancorp or any of its subsidiaries or affiliates.
1.5. Cicero
covenants and agrees that he shall not, at any time hereafter, whether as a
proprietor, stockholder, partner, officer, director, employee, consultant or in
any other manner or capacity whatsoever (other than as the holder of not more
than one percent (1%) of the total outstanding stock of a publicly-held
company), become interested in, provide assistance or support to, or
otherwise become associated with, any individual, enterprise, entity, business
venture or any combination of such, that has purchased or obtained beneficial
ownership of or over or is planning or attempting to purchase or obtain
beneficial ownership of or over, individually or as part of a group, a
Controlling Interest in the outstanding stock of 1st Mariner
Bancorp or any of its subsidiaries or affiliates. Any individual,
enterprise, entity, business venture or any combination of such will be deemed
part of such a group to the extent there is a formal or informal agreement to
act together for the purpose of acquiring, holding, voting or disposing of the
stock of 1st Mariner
Bancorp or any of its subsidiaries or affiliates.
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For the
purposes of this Agreement, a “Controlling Interest” shall be defined, for
1st
Mariner Bancorp and each of its subsidiaries or affiliates, as five percent (5%)
beneficial ownership in the outstanding stock of the entity or, to the extent
the entity is publicly held, the lesser of a five percent (5%) beneficial
ownership in the outstanding stock of the entity or a level of beneficial
ownership that would subject Cicero or any enterprise, entity, business venture
or any combination of such with which Cicero is associated, either individually
or as a member of a group, to the beneficial ownership reporting requirements of
the Securities Exchange Act of 1934.
In the
event Cicero becomes associated with any individual, enterprise, entity,
business venture or any combination of such which thereafter purchases or
obtains beneficial ownership of or over, or attempts to purchase or obtain
beneficial ownership of or over such a Controlling Interest in such stock,
individually or as part of a group, Cicero shall immediately terminate his
involvement with and otherwise divest himself of all interest in the activities
of that individual, enterprise, entity, venture or combination
thereof. Moreover, Cicero covenants and agrees that he shall not, at
any time hereafter, directly or indirectly, obtain a beneficial ownership (as
defined by Rule 13d-3(a) promulgated under the Securities Exchange Act of 1934)
in more than five percent (5%) of the outstanding stock in 1st Mariner
Bancorp or any of its subsidiaries or affiliates.
In
addition, Cicero covenants and agrees that he shall not, at any time hereafter,
directly or indirectly, whether as a proprietor, stockholder, partner, officer,
director, employee, consultant or in any other manner or capacity whatsoever,
take any actions,
regardless of Cicero’s beneficial ownership in 1st Mariner Bancorp
outstanding stock or any of its subsidiaries or affiliates, having the purpose
or effect of changing or influencing the control of 1st Mariner Bancorp or any of
its subsidiaries or affiliates. In the event Cicero becomes
associated with any individual, enterprise, entity, business venture or any
combination of such which thereafter takes any action having the purpose
or effect of changing or influencing the control of 1st Mariner Bancorp or any of
its subsidiaries or affiliates, individually or as a group, Cicero shall
immediately terminate his involvement with and otherwise divest himself of all
interest in the activities of that individual, enterprise, entity, venture or
combination thereof.
2. Independent Consultant
Compensation and Transition Payments.
2.1. After
four (4) copies of this Agreement signed by Cicero have been returned to and
received by ▇▇▇▇▇▇▇▇ ▇▇▇, Bank Vice President of Human Resources, and upon this
Agreement becoming effective as provided in Paragraph 4 below, and so long as
Cicero complies with the terms of this Agreement, 1st Mariner
shall pay to Cicero, as compensation for his independent contractor consultant
services, for the period beginning on May 23, 2009 through December 31, 2009, a
fee in an amount equal to a proportionate share of his regular salary last
received as an active employee for that period, prorated over and paid on a
bi-weekly basis during that period. Cicero shall be responsible for
paying all taxes due on such consulting payments, for which he shall receive a
1099 form from the Bank. To the extent that any taxes may be due on
such consulting payments, Cicero agrees to indemnify and hold 1st Mariner
harmless from any tax, interest or penalties resulting from the consulting
payments or from any failure of Cicero and/or the Bank to make any payment of
tax, interest or penalties.
2.2. As
further consideration for Cicero’s execution of and continued compliance with
this Agreement, but only after it becomes effective, Cicero shall receive, in
addition to the foregoing independent contractor engagement, transition payments
equal to four and one-half (4½) months of his regular salary last received as an
active employee, which shall be paid in accordance with the following terms of
this Paragraph. For each of the two months January and February,
2010, Cicero shall receive payments equal to a pro-rated monthly portion of his
regular salary last received as an active employee. On or before
March 15, 2010, Cicero shall receive an additional lump sum payment equal to two
and one-half (2½) months of his regular salary last received as an active
employee. Lawful deductions shall be made from the foregoing
transition payments, including for withholding and employment taxes, as was done
when Cicero was an active employee.
2.3. 1st Mariner
shall make the independent contractor consultant services payments and the
transition payments to Cicero by personally delivering checks to him or by
mailing these checks to him at his last address provided to 1st Mariner
or at such other address subsequently provided by Cicero to 1st Mariner
in writing.
2.4. Cicero’s
coverage under the Company’s health insurance benefit plans will terminate on
May 31, 2009. However, as further consideration for Cicero’s
execution of and continued compliance with this Agreement after it becomes
effective, 1st Mariner
will continue to periodically pay its portion of health insurance premiums for
1st
Mariner’s health insurance coverages last in effect for Cicero, his spouse and
any other dependents, as if Cicero were an active employee, for the period
through December 31, 2009, but only so long as: (1) Cicero, his spouse and/or
his other dependents elect continuation of health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and are
otherwise eligible for such continuation pursuant to COBRA, (2) 1st Mariner
continues to provide such benefits to its employees, (3) Cicero remains current
in making co-payments for the COBRA coverage(s) elected by him and/or his
dependents as is required of active employees, and (4) Cicero is entitled to
receive or retain payments made pursuant to this Paragraph 2 and all its
subparts. The Bank will deduct from Cicero’s consultant engagement
payments made pursuant to this Paragraph 2 the portion of health benefit
insurance premiums for which Cicero was last responsible as an active employee
for those coverages. If not disqualified for health benefit
continuation because of being covered by other group health insurance that would
disqualify them by the end of December 31, 2009, or because of any other reason,
Cicero, his spouse and/or any other dependents shall have the opportunity to
continue to exercise their COBRA rights to continue coverage under 1st
Mariner’s health insurance plan completely at their own expense for the balance
of the COBRA period after December 31, 2009.
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2.5. Cicero
and 1st Mariner
expressly acknowledge that Cicero will not continue to accrue vacation leave,
sick leave or any other leave benefits after May 22, 2009.
2.6. Cicero
acknowledges that in the absence of this Agreement, he would not be entitled to
any payment made pursuant to this Paragraph 2, to him or on his behalf as a
right incident to his employment and/or termination of employment, and that only
because of his entering into this Agreement and his continued compliance with
its provisions is he entitled to receive and retain this
consideration. Cicero acknowledges and understands that 1st Mariner
makes no representations or warranties as to the tax consequences of any
compensation or benefits provided under this Agreement (including, without
limitation, under any section of the Internal Revenue Code). Cicero
is solely responsible for any and all income, excise or other taxes imposed on
him with respect to any and all such compensation or other
benefits.
3. General
Release.
3.1. In
consideration of the payments made under and promises set forth in this
Agreement to or for the benefit of Cicero, Cicero, on behalf of himself and his
heirs, executors, personal representatives, administrators, assigns, attorneys
and representatives, hereby irrevocably and unconditionally releases, waives and
forever discharges 1st Mariner
Bancorp, 1st Mariner
Bank, all of their past, present and future parent, subsidiary and affiliated
entities, and all owners, shareholders, officers, directors, employees,
representatives, agents and attorneys of any of the foregoing, and of all of
their successors and assigns (hereafter collectively and/or individually the
“Releasees”), from any and all claims, agreements, rights, causes of action,
suits, demands, damages, or liabilities of any nature whatsoever (collectively,
referred to as “claims”) arising, occurring or existing at law or in equity at
any time prior to the effective date of this Agreement, whether or not known or
claimed as of the effective date of this Agreement. Cicero
understands that this General Release is intended to and does waive and
release:
(i) Any
and all claims arising from or relating to Cicero’s employment with and/or the
termination of his employment with 1st Mariner
and/or the Releasees, any and all claims for breach of its or their policies,
rules, regulations, or handbooks or for breach of express or implied contracts
or express or implied covenants of good faith, and any and all claims for
wrongful discharge, defamation, invasion of privacy, fraud, negligent
misrepresentation, violation of public policy, retaliation, mental distress or
any other personal injury;
(ii) Any
and all claims for back pay, front pay, or for any kind of compensatory, special
or consequential damages, punitive or liquidated damages, attorneys’ fees,
costs, disbursements or expenses of any kind whatsoever, including any and all
claims for failure to pay in whole or part any compensation or benefits,
including vacation pay and severance pay;
(iii) Any
and all claims arising under federal, state or local constitutions, laws, rules
or regulations or court decision common law, including that which relates to
prohibiting employment discrimination based upon age, race, color, sex,
religion, handicap or disability, national origin or any other protected
category or characteristic, including but not limited to any and all claims
arising under the federal Age Discrimination in Employment Act (“ADEA”), as
amended, the Civil Rights Act of 1866, the Civil Rights Act of 1964, as amended,
the Civil Rights Act of 1991, the Older Workers Benefit Protection Act of 1990,
42 USC Sections 1981, 1983 and 1985, the Rehabilitation Act of 1973, the Family
and Medical Leave Act, the Consolidated Omnibus Budget Reconciliation Act of
1985, the Employee Retirement Income Security Act, the Fair Labor Standards Act,
the National Labor Relations Act, as amended, the Equal Pay Act, the Americans
with Disabilities Act, the Health Insurance Portability and Accountability Act
of 1996, the Uniformed Services Employment and Reemployment Rights Act, the
False Claims Act, Article 49B of the Annotated Code of Maryland, the
Baltimore City Code, and/or under any other federal, state or local human
rights, civil rights, employment discrimination or employment-related statute,
or regulation; and
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(iv) Any
and all other claims of any kind whatsoever that Cicero has or may have against
1st
Mariner and/or any or all of the other Releasees as of the effective date of
this Agreement -- whether he knows about them or not.
3.2. Cicero
expressly understands and acknowledges that it is possible that unknown losses
or claims exist or that present losses may have been underestimated in amount or
severity, and he explicitly took that into account in determining the amount of
consideration to be paid for the giving of his General Release in this Paragraph
3 and entering into this Agreement, and a portion of said consideration, having
been bargained for between the Parties with the knowledge of the possibility of
such unknown claims, was given in exchange for a full accord, satisfaction and
discharge of all such claims.
3.3. The
General Release in this Paragraph 3 does not (i) apply to any rights or claims
under the ADEA that may arise after the date this Agreement is executed, (ii)
apply to any rights or claims arising under any retirement or pension plan in
which Cicero participated during his 1st Mariner
employment, or (iii) preclude Cicero from filing a lawsuit for the purpose of
enforcing his contractual rights under this Agreement or his rights under law
not waived by this Agreement.
4. Waiver of Age Discrimination
Claims.
4.1. The
General Release set forth above at Paragraph 3 includes claims under the Age
Discrimination in Employment Act of 1967 (the “ADEA”). This means
that Cicero waives any right to bring a lawsuit alleging age discrimination or
to participate in the settlement or remedy of any action brought under the ADEA
by any other individual or by the Equal Employment Opportunity Commission, the
agency that enforces the ADEA, with regard to any act or omission that occurred
prior to the effective date of this Agreement, for any monetary or personal
relief.
4.2. Cicero
is advised to consult with an attorney of his own choosing to review this
Agreement and its Release, as it pertains to waiving any claims of age
discrimination, before signing the Agreement. Cicero is provided
twenty-one (21) days from the date he receives this Agreement within which to
execute the Agreement.
4.3. Cicero
may revoke this Agreement at any time during a period of seven (7) calendar days
after his execution of this Agreement (the “revocation
period”). Notice of revocation shall be given to 1st Mariner
in writing, delivered to ▇▇▇▇▇▇▇▇ ▇▇▇, Bank Vice President of Human Resources,
on behalf of 1st
Mariner, within said seven (7) day revocation period. This Agreement
shall become effective automatically upon the expiration of the revocation
period if Cicero has not revoked this Agreement in this fashion. The
“effective date” of this Agreement shall be the date on which the revocation
period expires, provided that there has been no revocation in the form described
above during said period. If Cicero does revoke this Agreement, all
of 1st
Mariner’s obligations under Paragraph 2 above shall become null and
void. Cicero acknowledges that the waiver of his claims under
Paragraph 3 above is completely voluntary and not the result of any duress or
coercion.
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5. Non-Admissions,
Confidentiality and Non-Disparagement.
5.1. The
Parties hereto acknowledge that this Agreement does not constitute an admission
by 1st Mariner
and/or any of the Releasees of any unlawful or tortious action or any violation
of any contract or any federal, state or local law, by court decision, statute,
regulation or constitution; nor does any statement made or action taken by or on
behalf of 1st Mariner
in connection with this Agreement constitute such an admission.
5.2. Cicero
covenants and agrees that the fact and/or terms of this Agreement, as well as
any discussions between the Parties concerning this Agreement or its terms, are
to be held confidential by him, his agents and any person to whom he is
permitted to make a disclosure pursuant to subsection (iv) below, and that
neither he nor any other such person will disclose any such information to any
person or entity that is not a Party to this Agreement, except (i) as necessary,
with regard to a proceeding for enforcement of this Agreement, (ii) pursuant to
a properly issued summons, subpoena or court order, (iii) as required by state
or federal law, and (iv) Cicero may disclose and discuss such information with
his immediate family, accountants, attorneys and income tax return
preparers. Before Cicero makes any disclosure permitted by subsection
(iv) above, he shall inform the person to whom disclosure is to be made of this
confidentiality provision, obtain the person’s agreement to be bound by the
confidentiality obligations under the terms of this Agreement as a condition of
receiving such disclosure, and instruct such person that any breach of
confidentiality by such person will constitute a material violation of this
Agreement attributable to Cicero.
5.3. Cicero
agrees that he will not make, nor cause to be made, any public statements,
disclosure or publications (other than to the extent necessary in an employment
application process) which relate in any way, directly or indirectly, to his
cessation of employment with 1st Mariner
without express prior approval of the Chairman of the Board of 1st
Mariner. Cicero further agrees that he will not make, nor cause to be
made, any public statement, disclosures or publications which portray
unfavorably, reflects adversely on or are derogatory or inimical to the best
interests of 1st
Mariner, its subsidiaries, parent or affiliated entities, owners, directors,
officers, employees or agents, past, present and future.
6. Proprietary Information and
Property Return.
6.1. Cicero
acknowledges and agrees that all information, whether or not in writing, of a
trade secret, confidential or proprietary nature, concerning the business,
business relationships, technical affairs, financial affairs, or
strategies/plans of the Bank or its customers or business associates
(collectively “Proprietary Information”) is and shall be exclusive property of
the Bank and/or its customers or business associates. Cicero further
understands and acknowledges that despite the termination of his employment
relationship with the Bank, he has a continuing legal obligation not to
disclose, and not to use, directly or indirectly, any such Proprietary
Information owned by the Bank, its customers or business associates, except in
connection with and as required and permitted for his performing consulting
services for 1st Mariner
under this Agreement.
6.2. Cicero
agrees that he shall promptly return to 1st
Mariner, in a complete, organized and useable fashion and without any
destruction or deletions, all of 1st
Mariner’s property, files and materials, and all Proprietary Information of 1st
Mariner, its customers and business associates in his possession or subject to
his control. Cicero expressly agrees that after May 22, 2009,
he will no longer, either directly or indirectly, access or attempt to access
the 1st Mariner
computer network, server or any 1st Mariner
database from any location, except in connection with and as required and
permitted for his performing consulting services for 1st Mariner
under this Agreement. Cicero further agrees that during the period
from May 23, 2009 through March 15, 2010, he will provide his full cooperation
to the Bank, and hold himself reasonable available to respond to requests for
information from Bank officers and employees.
7. Non-Competition and
Non-Solicitation.
7.1. Cicero
covenants that he shall not, at any time before May 22, 2010, in any Prohibited
Territory, whether as a proprietor, stockholder, partner, officer, director,
employee, consultant or in any other manner or capacity whatsoever (other than
as the holder of not more than one percent (1%) of the total outstanding stock
of a publicly-held company), engage in any business or assist any business that
is in competition with 1st Mariner
for its existing or potential customer or client base in any line of business in
which 1st Mariner
is engaged or has substantive plans to engage as of May 22, 2009. For
the purposes of this Agreement, the term “Prohibited Territory” shall mean any
location within a fifty (50) mile radius of 1st
Mariner’s main offices at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or within
a ten (10) mile radius of any branch or other office of 1st
Mariner.
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7.2. Cicero
covenants that he shall not, at any time before May 22, 2011, on his own behalf
or on behalf of any other business or entity, or otherwise for any or no reason,
solicit, entice or encourage any customers, clients, contractors or vendors of
1st
Mariner to cease doing business with 1st
Mariner, to decrease the amount of their business with 1st
Mariner, or to otherwise alter their business relationship with 1st Mariner
in any way that is detrimental to 1st
Mariner.
7.3. Cicero
covenants that he shall not, at any time before May 22, 2011, on his own behalf
or on behalf of any other business or entity, or otherwise for any or no reason,
solicit, entice or encourage any employee of 1st Mariner
to leave 1st
Mariner’s employ, nor shall he employ any such employees of 1st Mariner
or encourage them to take any other employment.
8. Miscellaneous
Provisions.
8.1. This
Agreement embodies the entire agreement between 1st Mariner
and Cicero and fully supersedes any and all prior agreements or understandings
between the Parties pertaining to the subject matter hereof, except as
specifically provided to the contrary herein.
8.2. Each
Party waives its/his right to a trial by jury in any proceeding brought with
respect to this Agreement or any right or obligation hereunder or any matter
covered by this Agreement. The Parties understand that by giving up
their right to a jury trial by this Paragraph, they are not giving up their
right to make a legal claim against the other Party with respect to matters
concerning this Agreement; they are only giving up their right to have a jury
decide that claim.
8.3. The
provisions of this Agreement shall inure to the benefit of the Parties, their
successors and assigns, and shall be binding upon the Parties and their heirs,
executors, administrators, successors and assigns.
8.4. Should
any provision of this Agreement be invalid or unenforceable, in whole or in
part, then such provision shall be deemed to be modified or restricted only to
the extent and in an amount necessary to render the same valid and enforceable,
or shall be deemed excised from this Agreement, as the case may require, and
this Agreement shall be construed and enforced to the maximum extent permitted
by law, as if such provision had been originally incorporated herein as so
modified or restricted or as if such provision had not been incorporated herein,
as the case may be.
The
Parties have executed this Agreement on the date set forth next to each Party’s
signature.
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/s/
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5/20/09
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Date
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1st
Mariner Bancorp
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1st
Mariner Bank
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By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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5/20/09
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By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇
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5/20/09
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(Signature)
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Date
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(Signature)
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Date
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| ▇▇▇▇ ▇. ▇▇▇▇▇▇ |
SVP/CFO
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▇▇▇▇▇▇▇
▇▇▇, VP – Human Resources
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(Printed
Name and Title)
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(Printed
Name and Title)
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