SEC Info - First Financial Corp of Western Maryland - ‘DEFC14A’ on 9/19/96 re: First Financial Corp of Western Maryland

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First Financial Corp of Western Maryland – ‘DEFC14A’ on 9/19/96 re: First Financial Corp of Western Maryland

As of: Thursday, 9/19/96 · Accession #: 912057-96-20696 · File #: 0-19837

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 9/19/96  First Fin’l Corp of Wes… Maryland DEFC14A                1:44K  First Fin’l Corp of Wes… Maryland Merrill Corp/FA

Definitive Proxy Solicitation Material — Contested Solicitation — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFC14A     Schedule 14A                                          23     68K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Common Stock
1	1st Page - Filing Submission
11	Common Stock

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SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. __________)

Filed by the Registrant /X/

Filed by a Party other than the Registrant

Check the appropriate box:

/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only

/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

First Financial Corp of Western Maryland
-------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

-------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box): (previously paid by wire
transfer)

/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2),
or Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies: ------

(2) Aggregate number of securities to which transactions applies: -------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

----------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction: --------

(5) Total fee paid: ------------------------------

/X/ Fee paid previously with preliminary materials.

-------------------------------------------------------------------------------

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount previously paid: ------------------------

(2) Form, schedule or registration statement no.: -----

(3) Filing party: -------------------------------

(4) Date filed: ---------------------------------

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FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND
118 BALTIMORE STREET
CUMBERLAND, MARYLAND 21502
(301) 724-3363

----------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 24, 1996

----------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of First Financial Corporation of Western Maryland (the
"Corporation") will be held at the Holiday Inn, located at 100 South George
Street, Cumberland, Maryland, on Thursday, October 24, 1996 at 10:00 a.m.,
Eastern Time, for the following purposes, all of which are more completely
set forth in the accompanying Proxy Statement:

(1) To elect four (4) directors for a three-year term and until their
successors are elected and qualified;

(2) To ratify the appointment by the Board of Directors of KPMG Peat
Marwick LLP as the Corporation's independent auditors for the year ending
June 30, 1997; and

(3) To transact such other business as may properly come before the
meeting or any adjournment thereof. Management is not aware of any other
such business.

The Board of Directors has fixed August 30, 1996 as the voting record
date for the determination of stockholders entitled to notice of and to vote
at the Annual Meeting and at any adjournment thereof. Only those
stockholders of record as of the close of business on that date will be
entitled to vote at the Annual Meeting or at any such adjournment.

By Order of the Board of
Directors

Patrick J. Coyne
Chairman of the Board, President
and Chief Executive Officer
Cumberland, Maryland
September 19, 1996

YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE
MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE
REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE
THEREOF

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PROXY STATEMENT

-----------------
FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND
118 BALTIMORE STREET
CUMBERLAND, MARYLAND 21502
-----------------

1996 ANNUAL MEETING OF STOCKHOLDERS

OCTOBER 24, 1996

This Proxy Statement is furnished to holders of common stock,
$1.00 par value per share ("Common Stock"), of First Financial Corporation of
Western Maryland (the "Corporation"), a Delaware corporation which is the
holding company for First Federal Savings Bank of Western Maryland (the
"Bank"). Proxies are being solicited on behalf of the Board of Directors of
the Corporation to be used at the Annual Meeting of Stockholders ("Annual
Meeting") to be held at the Holiday Inn, located at 100 South George Street,
Cumberland, Maryland, on Thursday, October 24, 1996 at 10:00 a.m., Eastern
Time, and at any adjournment thereof for the purposes set forth in the Notice
of Annual Meeting of Stockholders. This Proxy Statement is first being
mailed to stockholders on or about September 19, 1996.

The GREEN proxy solicited hereby, if properly signed and
returned to the Corporation and not revoked prior to its use, will be voted
in accordance with the instructions contained therein. If no contrary
instructions are given, each proxy received will be voted FOR the Board of
Directors' nominees for director described herein, FOR the ratification of
the independent auditors and upon the transaction of such other business as
may properly come before the meeting in accordance with the best judgment of
the persons appointed as proxies. Any stockholder giving a proxy has the
power to revoke it at any time before it is exercised by (i) filing with the
Corporation written notice thereof (Patrick J. Coyne, President and Chief
Executive Officer, First Financial Corporation of Western Maryland, 118
Baltimore Street, Cumberland, Maryland 21502); (ii) submitting a
duly-executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person. Proxies solicited hereby may be exercised only at the Annual Meeting
and any adjournment thereof and will not be used for any other meeting.

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VOTING

Only stockholders of record at the close of business on August
30, 1996 ("Voting Record Date") will be entitled to vote at the Annual
Meeting. On the Voting Record Date, there were 2,124,336 shares of Common
Stock issued and outstanding and the Corporation had no other class of equity
securities outstanding. Each share of Common Stock is entitled to one vote
at the Annual Meeting on all matters properly presented at the meeting.

The presence in person or by proxy of at least a majority of
the outstanding shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. Directors are elected by a
plurality of the votes cast at the Annual Meeting. The affirmative vote of a
majority of the total votes cast at the Annual Meeting is required for
approval of the proposal to ratify the appointment of the Corporation's
independent auditors.

Abstentions will be counted for purposes of determining the
presence of a quorum at the Annual Meeting, but will not be counted as votes
cast for the election of directors or the proposal to ratify the appointment
of the independent auditors and, thus, will have no effect on the voting of
these proposals. Under rules of the New York Stock Exchange, the election of
directors and the proposal to ratify the appointment of the independent
auditors are generally considered "discretionary" items upon which brokerage
firms may vote in their discretion on behalf of their clients if such clients
have not furnished voting instructions and for which there will not be
"broker non-votes."

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INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
DIRECTORS WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS

ELECTION OF DIRECTORS

The Certificate of Incorporation and Bylaws of the Corporation
provide that the Board of Directors of the Corporation shall be divided into
three classes as nearly equal in number as possible, and that the members of
each class are to be elected for a term of three years and until their
successors are elected and qualified. The Board of Directors has set the
number of directors at 10 members. One class of directors is to be elected
annually, and stockholders of the Corporation are not permitted to cumulate
their votes for the election of directors.

Unless otherwise directed, each proxy executed and
returned by a stockholder will be voted for the election of the Board of
Directors' nominees for director listed below. If any person named as a
Board of Directors' nominee should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will vote the
proxies for any replacement nominee or nominees recommended by the Board of
Directors. At this time, the Board of Directors knows of no reason why any
of the nominees listed below may not be able to serve as a director if
elected. No Board of Directors' nominee for director is related to any other
director or executive officer of the Corporation by blood, marriage or
adoption. All of the Board of Directors' nominees currently serve as
directors of the Corporation.

The Board of Directors is aware that Mr. Seymour Holtzman had
considered nominating an alternative slate for election to the Corporation's
Board of Directors. As previously announced, the Corporation has engaged
Alex. Brown & Sons Incorporated as its financial advisor in order to assist
the Board of Directors in exploring and evaluating the various options
available to the Corporation to maximize stockholder value. The Corporation
is now actively engaged in the process of identifying potential acquirors. No
assurance can be given that an offer to purchase the Corporation will be made
or that the Board will determine that any such offer, if received, is in the
best interest of stockholders. On September 16, 1996, Mr. Holtzman issued a
press release expressly stating that he had determined not to nominate an
alternative slate for election as directors. Rather, Mr. Holtzman, after
satisfying himself that the Corporation is actively seeking prospective
acquirors, commented that the Corporation's management should be commended
for their actions.

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The following tables present information concerning the Board
of Directors' nominees for director and each director whose term continues,
including his tenure as a director of the Corporation.

NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 1999

[Download Table]

Positions Held in Director
Name Age the Corporation Since (1)

Cheston H. Browning, III 53 Director 1986
L. Fred Dean 76 Director 1976
Morton W. Peskin, Jr. 67 Director 1975
R. Thomas Thayer, Jr. 70 Director 1984

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION
OF THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTOR.

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MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE

DIRECTORS WITH TERMS EXPIRING IN 1997

[Download Table]

Positions Held in Director
Name Age the Corporation Since (1)

Gordon L. Bowie 92 Director 1940
W. Lee Fleming 46 Director 1989
William M. Thompson 79 Vice Chairman of the 1971
Board

DIRECTORS WITH TERMS EXPIRING IN 1998

[Download Table]
Positions Held in Director
Name Age the Corporation Since (1)

Patrick J. Coyne 53 Chairman, President and 1995
Chief Executive Officer
Walter Growden 70 Director 1977
Marc E. Zanger 49 Director 1989

(1) Includes service as a director of the Bank prior to the formation of the
Corporation.

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Each of the Board of Directors' nominee for director and continuing
director of the Corporation is also a director of the Bank. The business
experience of each director for at least the past five years is as follows:

GORDON L. BOWIE has been a director of the Bank since 1940 and a director
of the Corporation since its formation in 1990. Prior to his retirement in
1966, Mr. Bowie was part-owner and Secretary and Treasurer of Tri-State
Paper, a wholesale paper company located in Cumberland, Maryland.

CHESTON H. BROWNING, III has been a director of the Bank since 1986 and a
director of the Corporation since its formation in 1990. Mr. Browning is the
former President and sole owner of Mark/Scott, Inc., which was primarily a
real estate investment business until Mr. Browning's retirement in 1994, and
which had conducted business prior to 1993 under the name Tommy's Market, a
retail grocery business located in Cumberland, Maryland.

PATRICK J. COYNE has been Chairman of the Board, President and Chief
Executive Officer of the Corporation and the Bank since January 1, 1995.
Previously he was President and Chief Executive Officer of Johnstown Savings
Bank, Johnstown, Pennsylvania, from 1990 until 1994.

L. FRED DEAN has been a director of the Bank since 1976 and a director of
the Corporation since its formation in 1990. Prior to his retirement in
1985, Mr. Dean was owner of Dean's Jewelry Store, located in Frostburg,
Maryland.

W. LEE FLEMING has been a director of the Bank since 1989 and a director
of the Corporation since its formation in 1990. Mr. Fleming is President of
Fleming Oil Corporation, a petroleum distribution company located in Hancock,
Maryland.

WALTER C. GROWDEN has been a director of the Bank since 1977 and a
director of the Corporation since its formation in 1990. Mr. Growden was
self-employed as a builder and has been an independent real estate appraiser
since 1969.

MORTON W. PESKIN, JR. has been a director of the Bank since 1975 and a
director of the Corporation since its formation in 1990. Prior to his
retirement in 1992, Mr. Peskin was President of Peskins, a retailer of men's,
women's and children's shoes and ladies' fashions located in Cumberland,
Maryland.

R. THOMAS THAYER, JR. has been a director of the Bank since 1984 and a
director of the Corporation since its formation in 1990. Mr. Thayer has been
President and Chief Executive Officer of Garrettland, Inc., a real estate
development and property management company headquartered in Oakland,
Maryland.

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WILLIAM M. THOMPSON has been a director of the Bank since 1971 and a
director of the Corporation since its formation in 1990 and has been Vice
Chairman of the Board of the Bank since 1972. Prior to his retirement in
1983, Mr. Thompson was national accounts manager at Westvaco in Luke,
Maryland.

MARC E. ZANGER has been a director of the Bank since 1989 and a director
of the Corporation since its formation in 1990. Mr. Zanger is Chairman of
the Board and Chief Executive Officer of BGS&G Companies, an insurance and
employee benefits company located in Cumberland, Maryland. Mr. Zanger has
been employed by BGS&G since 1976.

STOCKHOLDER NOMINATIONS

Article II, Section 13 of the Corporation's Bylaws governs
nominations for election to the Board and requires all such nominations,
other than those made by the Board, to be made at a meeting of stockholders
called for the election of directors, and only by a stockholder who has
complied with the notice provisions in that section. Stockholder nominations
must be made pursuant to timely notice in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal executive offices of the Corporation
not less than 30 days prior to the date of the meeting; provided, however,
that in the event that less than 40 days' notice or prior disclosure of the
date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be received not later than the close of
business on the tenth day following the day on which such notice of the date
of the meeting was mailed or such public disclosure was made. Public
disclosure of the Annual Meeting was made on August 21, 1996.

Each written notice of a stockholder nomination shall set
forth: (i) as to each person whom such stockholder proposes to nominate for
election or re-election as a director, all information relating to such
person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended
(including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected), or, in the
event Regulation 14A shall be repealed, in accordance with any law or
regulation governing solicitations or proxies for election of directors
existing prior to the repeal of such laws of regulations; and (ii) as to the
stockholder giving the notice (x) the names and address, as they appear on
the Corporation's books, of such stockholder and (y) the class and number of
shares of the Corporation's capital stock that are beneficially owned by such
stockholder.

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THE BOARD OF DIRECTORS AND ITS COMMITTEES

The Board of Directors of the Corporation held a total of 11
regular and special meetings during the year ended June 30, 1996. No
incumbent director attended fewer than 75% of the aggregate total number of
meetings of the Board of Directors held during the year ended June 30, 1996,
and the total number of meetings held by all committees on which he served
during such year.

The Corporation has an Audit Committee of the Board of
Directors, which meets with the Corporation's independent auditors and
reports on such meetings to the Board. The Audit Committee reviews the
auditors' performance in the annual audit and in assignments unrelated to the
audit, reviews auditors' fees, discuses the Corporation's internal accounting
control policies and procedures and considers and recommends the selection of
the Corporation's independent auditors. The Audit Committee met four times
during the fiscal year ended June 30, 1996. The current Audit Committee
members are Messrs. Thompson (Chairman), Bowie, Browning, Dean and Zanger.

The Corporation has a Stock Option Committee of the Board of
Directors, which administers the Corporation's stock option plans including
granting of stock options under the plans. The Stock Option Committee met
once during the fiscal year ended June 30, 1996. The current members of the
Committee are Messrs. Thompson, Browning and Zanger (Chairman).

The Nominating and Proxy Committee is authorized to recommend
to the Board of Directors nominees for election as directors. The current
members of the Nominating and Proxy Committee, which met once during the year
ended June 30, 1996, are Messrs. Coyne (Chairman), Growden and Zanger.

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BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table includes, as of the Voting Record Date,
certain information as to the Common Stock beneficially owned by (i) the only
persons or entities, including any "group" as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended ("1934 Act"), who
or which was known to the Corporation to be the beneficial owner of more than
5% of the issued and outstanding Common Stock, (ii) the directors of the
Corporation, and (iii) all directors and executive officers of the
Corporation and the Bank as a group.

[Download Table]

Common Stock
Beneficially
Name of Owned as of
Beneficial Owner August 30, 1996(1)

No. %

Beneficial Owners of More than 5%:

Seymour and Evelyn Holtzman 175,325 (2) 8.2%
and related parties
100 N. Wilkes-Barre Boulevard
Wilkes-Barre, Pennsylvania 18702

Richard C. Deckerhoff 116,263 5.5
P.O. Box 6341
Cumberland, Maryland 21501

Directors:

Gordon L. Bowie 8,176 (3) *
Cheston H. Browning, III 20,000 (4) *
Patrick J. Coyne 61,857 (5) 2.9
L. Fred Dean 15,426 *
W. Lee Fleming 10,870 (6) *
Walter C. Growden 15,676 (7) *
Morton W. Peskin, Jr. 15,326 (8) *
R. Thomas Thayer, Jr. 16,000 (9) *
William M. Thompson 14,176 (10) *
Marc E. Zanger 8,404 (11) *

All directors and executive officers
of the Corporation and the Bank
as a group (13 persons) 221,219 (12) 10.1

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* Represents less than 1% of the outstanding Common Stock.

(1) For purposes of this table, pursuant to rules promulgated under the 1934
Act, an individual is considered to beneficially own shares of Common
Stock if he or she directly or indirectly has or shares (1) voting power,
which includes the power to vote or to direct the voting of the shares;
or (2) investment power, which includes the power to dispose or direct
the disposition of the shares. Unless otherwise indicated, a director
has sole voting power and sole investment power with respect to the
indicated shares. Shares which are subject to stock options which are
exercisable within 60 days of the Voting Record Date are deemed to be
outstanding for the purpose of computing the percentages of Common Stock
beneficially owned by the respective individuals and group.

(2) Based upon information filed pursuant to the 1934 Act. Represents
121,975 shares held jointly by Seymour and Evelyn Holtzman, 3,000 shares
held by Allison Holtzman, 3,000 shares held by Steven Holtzman, 1,500
shares held by Mr. Holtzman in a Custodial Account for the benefit of
Chelsea Holtzman (Allison, Steven and Chelsea Holtzman are children of
Seymour and Evelyn Holtzman), and 44,350 shares held by Jewelcor
Management & Consulting Corp., a management and consulting corporation of
which Seymour and Evelyn Holtzman are the majority shareholders.

(3) Includes 6,106 shares held jointly with Mr. Bowie's wife.

(4) Includes 8,930 shares held jointly with Mr. Browning's wife.

(5) Includes 11,567 shares held jointly with Mr. Coyne's wife, 393 shares
held for Mr. Coyne's account in the Corporation's 401(k) Plan, 478 shares
held for Mr. Coyne's account in the Corporation's Employee Stock
Ownership Plan ("ESOP"), 8,417 shares held in a self directed Individual
Retirement Account and 40,000 shares which may be acquired upon the
exercise of outstanding stock options exercisable within 60 days of the
Voting Record Date. Also includes 1,002 shares held by Mr. Coyne's
children for which Mr. Coyne disclaims beneficial ownership.

(6) Includes 4,053 shares held jointly with Mr. Fleming's wife and children,
814 shares held by Mr. Fleming's children, 827 shares held by Fleming Oil
Company, of which Mr. Fleming is President, and 2,105 shares which may be
acquired upon the exercise of outstanding stock options exercisable within
60 days of the Voting Record Date.

(7) Includes 10,500 shares held jointly with Mr. Growden's wife.

(8) Includes 5,205 shares held jointly with Mr. Peskin's wife.

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(9) Includes 10,930 shares held jointly with Mr. Thayer's wife. Also
includes 3,000 shares held jointly by Mr. Thayer's wife and daughter for
which Mr. Thayer disclaims beneficial ownership.

(10) Includes 750 shares held by Mr. Thompson's wife.

(11) Includes 5,579 shares held jointly with Mr. Zanger's wife or children.

(12) Includes 63,858 shares which may be acquired by all officers and
directors as a group upon the exercise of outstanding stock options
exercisable within 60 days of the Voting Record Date.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the 1934 Act requires the Corporation's officers and
directors, and persons who own more than 10% of the Common Stock to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Officers, directors and greater than 10% stockholders are required by
regulation to furnish the Corporation with copies of all Section 16(a) forms
they file. The Corporation knows of no person who owns 10% or more of the
Common Stock.

Based solely on review of the copies of such forms furnished to the
Corporation, the Corporation believes that during the year ended June 30,
1996, all Section 16(a) filing requirements applicable to its officers,
directors and 10% stockholders were complied with.

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EXECUTIVE COMPENSATION

SUMMARY

The following table sets forth a summary of certain information concerning
the compensation awarded to or paid by the Corporation for services rendered in
all capacities during the last three fiscal years to the Chief Executive
Officer. No other executive officer had total compensation during the last
fiscal year which exceeded $100,000.

SUMMARY COMPENSATION TABLE

[Enlarge/Download Table]

Annual Compensation Long Term Compensation
Awards
Other Awards All
Year Annual Other
Name and Ended Compensation Stock Compensation
Principal Position June 30 Salary Bonus (2) Grants Options (3)

Patrick J. Coyne(1)
President and 1996 $125,004 $61,000(4) $12,300 -- -- $18,163
Chief Executive Officer 1995 62,503 -- 5,000 -- 40,000 --

(1) Mr. Coyne was elected as President and Chief Executive Officer effective
January 1, 1995. The compensation information for the fiscal year ended
June 30, 1995 relates only to a partial year.

(2) Represents directors fees paid by the Corporation and its
subsidiaries. Does not include amounts attributable to miscellaneous
benefits received by the named executive officer, including the use of
a Corporation-owned automobile. In the opinion of management of the
Corporation the costs to the Corporation of providing such benefits to
the named executive officer during the year ended June 30, 1996 did not
exceed the lesser of $50,000 or 10% of the total of annual salary and
bonus reported for the individual.

(3) In fiscal 1996, represents $8,238, which was the Corporation's
contribution to the 401(k) Plan for the account of Mr. Coyne, and
$9,925, which was the market value of the shares of Common Stock
allocated to the ESOP for the account of Mr. Coyne.

(4) Represents bonus paid in August 1996 pursuant to the Corporation's
Executive Annual Incentive Plan for the fiscal year ended June 30, 1996.

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STOCK OPTIONS

The following table sets forth certain information concerning exercises of
stock options by the named executive officer during the year ended June 30,
1996 and options held at June 30, 1996.

[Enlarge/Download Table]

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
Number of Value of
Shares Unexercised Unexercised
Acquired on Value Options/SARs at Year End Options/SARs at
Name Exercise Realized Year End(1)

Exercisable Unexercisable Exercisable Unexercisable

Patrick J. Coyne -- -- 40,000/-- --/-- $30,000/-- --/--

(1) Based on a per share market price of $20.75 at June 30, 1996.

COMPENSATION OF DIRECTORS
Each director of the Corporation receives a
retainer of $200 each month so long as the director's rate of attendance at
meetings of the Board of Directors exceeds seventy-five percent during the
immediately preceding twelve-month period. The directors receive a fee of
$50 per committee meeting attended for serving on committees of the Board of
Directors of the Corporation. In addition, directors of the Bank receive
fees of $500 for each meeting of the Board of Directors attended and $50 for
each committee meeting attended.

REPORT OF THE COMPENSATION COMMITTEE

This report is submitted by the members of the Compensation Committee,
which is comprised of non-employee directors of the Board, and addresses the
compensation policies of the Corporation relating to its executive officers,
including the Chief Executive Officer, for the fiscal year ended June 30,
1996. The Compensation Committee sets and reviews compensation policy,
although it acts through its Stock Option Committee with respect to the
stock option aspects of the executive compensation.

COMPENSATION PHILOSOPHY

The Compensation Committee seeks to ensure that the compensation of
executives permits the Corporation to attract and retain talented executives.
In addition, through the award of stock options, senior management is
encouraged to develop an ownership stake in the Company to align executive
compensation with future shareholder return. The

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Corporation's executive
compensation generally consists of three components: (i) base salary, (ii)
bonus, and (iii) stock options.

Base salary levels generally reflect the historical level of salary paid
to such persons. Annual increases to base salaries are considered based on
an evaluation of the individual's performance for the year, including
operational performance and cost-effective management, as well as the overall
financial performance of the Corporation. In addition, the Compensation
Committee reviews the base salaries of officers against available comparative
data for executive compensation in thrift organizations of asset size
equivalent to that of the Corporation in the Corporation's geographic region
and attempts to set base salaries near the median of such group.

The Corporation also maintains the Executive Annual Incentive Plan,
which provides for the payment of cash performance incentives to certain
officers and employees of the Corporation and the Bank. The plan provides for
annual cash awards to be made to plan participants, based upon target
financial performance for the Corporation, including return on assets, and
individual performance amounts for each participant depending on the
participation category of the participant. Based upon these factors, the
Corporation paid cash bonuses for fiscal 1996 pursuant to the plan.

In order to promote the best interests of the Corporation and its
stockholders, the Stock Option Committee of the Board of Directors granted
stock options to three senior executive officers during fiscal 1996. The
options were granted at an exercise price equal to the market price of a
share of Common Stock on the date of grant. Grants of stock options were
made to increase a link between executive compensation and total return to
stockholders. In making grants of options, the Corporation considers the
amount of options already held by the executive officer.

CHIEF EXECUTIVE OFFICER COMPENSATION

Generally, the criteria for Chief Executive Officer compensation are the
same as those of the executive officers, except that the Corporation's Chief
Executive Officer also receives as Chairman of the Board cash compensation in
the form of director's fees from the Corporation and its subsidiaries. The
Compensation Committee believes that the Chief Executive Officer's package of
base salary and director's fees is below market when compared to financial
institutions of equivalent asset size.

The Compensation Committee:

Gordon L. Bowie
Cheston H. Browning, III
L. Fred Dean
W. Lee Fleming
Walter C. Growden
Morton W. Peskin, Jr.
R. Thomas Thayer, Jr.
William M. Thompson
Marc E. Zanger

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15

PERFORMANCE GRAPH

The following graph compares the yearly cumulative total return on the
Common Stock over the measurement period since the Corporation issued stock
to the public on February 10, 1992 with (i) the yearly cumulative total
return on all stocks listed on the Nasdaq Stock Market (U.S. Companies) and
(ii) the yearly cumulative total return on all savings institutions listed on
Nasdaq Stock Market. All of these cumulative returns are computed assuming
the reinvestment of dividends at the frequency with which dividends were paid
during the applicable years.

COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND

Produced on 08/21/96 including data on 06/28/96

[Enlarge/Download Table]

06/28/91 06/30/92 06/30/93 06/30/94 06/30/95 06/28/96

FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND 110.8 170.2 319.5 312.3 301.6
Nasdaq Stock Market (US Companies) 73.9 88.7 111.6 112.6 150.4 193.1
NASDAQ Stocks (SIC 6030-6039 US Companies) 78.9 116.7 171.2 226.0 254.0 329.4

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16

EMPLOYMENT AND SEVERANCE AGREEMENTS
The Corporation and the Bank (collectively the "Employers") have
entered into an employment agreement with Patrick J. Coyne, effective
January 1, 1995. The Employers have agreed to employ Mr. Coyne for a
term of three years in the positions of President and Chief Executive
Officer at an initial annual salary of $125,000. The term of the
employment agreement shall be extended each year for a successive
additional one-year period unless the Employers or Mr. Coyne elects, not
less than 30 days prior to the annual anniversary date, not to extend
the employment term.

The employment agreement is terminable with or without cause by the
Employers. Mr. Coyne shall have no right to compensation or other
benefits pursuant to the employment agreement for any period after
voluntary termination or termination by the Employers for cause,
disability, retirement or death, provided, however, that (i) in the
event that Mr. Coyne terminates his employment because of failure of the
Employers to comply with any material provision of the employment
agreement or (ii) the employment agreement is terminated by the
Employers other than for cause, disability, retirement or death or by
Mr. Coyne as a result of good reason, as defined, following a Change in
Control of the Corporation, as defined, Mr. Coyne will be entitled to a
cash severance amount equal to three times his total annual
compensation.

A Change in Control is generally defined in the employment
agreement to include (i) the acquisition by any person of 25% or more of
the Corporation's outstanding voting securities and (ii) a change in a
majority of the directors of the Corporation during any two-year period
without the approval of at least two-thirds of the persons who were
directors of the Corporation at the beginning of such period. The
employment agreement provides that in the event that any of the payments
to be made thereunder or otherwise upon termination of employment are
deemed to constitute "excess parachute payments" within the meaning of
Section 280G of the Internal Revenue Code of 1986 ("Code"), then such
payments and benefits received thereunder shall be reduced, in the
manner determined by Mr. Coyne, by the amount, if any, which is the
minimum necessary to result in no portion of the payments and benefits
being non-deductible by the Employers for federal income tax purposes.
Excess parachute payments generally are payments in excess of three
times the base amount, which is defined to mean the recipient's average
annual compensation from the employer includable in the recipient's
gross income during the most recent five taxable years ending before the
date on which a change in control of the employer occurred. Recipients
of excess parachute payments are subject to a 20% excise tax on the
amount by which such payments exceed the base amount, in addition to
regular income taxes, and payments in excess of the base amount are not
deductible by the employer as compensation expense for federal income
tax purposes.

The Employers have entered into severance agreements with three
executive officers of the Corporation and the Bank in order to assist
the Corporation and the Bank in maintaining a stable and competent
management base. The agreements provide for a three-

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17

year term, and
subject to satisfactory performance reviews by the Boards of Directors
or a committee designated by the Boards, extends on each anniversary
date for an additional year so that the remaining term will be three
years. The agreements provide for severance payments upon termination
of the executive in certain cases following a "change in control" of the
Corporation in an amount equal to three times the employee's annual
compensation.

INDEBTEDNESS OF MANAGEMENT

The Bank makes mortgage and other types of loans to its directors,
officers and employees and certain of their affiliates. Such loans are
made in the ordinary course of business and on substantially the same
terms, including interest rates, loan fees and collateral, as those
prevailing at the time for comparable transactions with other persons.
The Bank believes that loans to its directors, officers and employees do
not involve more than the normal risk of collectibility or present other
unfavorable features.

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18

RATIFICATION OF APPOINTMENT OF AUDITORS

The Board of Directors of the Corporation has appointed KPMG Peat
Marwick LLP, independent certified public accountants, to perform the
audit of the Corporation's financial statements for the year ending June
30, 1997, and further directed that the selection of auditors be
submitted for ratification by the stockholders at the Annual Meeting.

The Corporation has been advised by KPMG Peat Marwick LLP that neither that
firm nor any of its associates has any relationship with the Corporation other
than the usual relationship that exists between independent certified public
accountants and clients. KPMG Peat Marwick LLP will have one or more
representatives at the Annual Meeting who will have an opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS FOR THE YEAR ENDING JUNE 30, 1997.

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19

SUBMISSION OF SHAREHOLDER PROPOSALS

Any proposal which a stockholder wishes to have included in the
proxy materials of the Corporation relating to the next annual meeting
of stockholders of the Corporation, which is scheduled to be held in
October 1997, must be received at the principal executive offices of the
Corporation, 118 Baltimore Street, Cumberland, Maryland 21502, no later
than May 22, 1997. If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the 1934 Act, it will be included in
the proxy statement and set forth on the form of proxy issued for such
annual meeting of stockholders. It is urged that any such proposals be
sent certified mail, return receipt requested.

ANNUAL REPORTS

A copy of the Corporation's Annual Report to Stockholders for the
year ended June 30, 1996 accompanies this Proxy Statement. Such annual
report is not part of the proxy solicitation materials.

UPON RECEIPT OF A WRITTEN REQUEST, THE CORPORATION WILL FURNISH TO
ANY STOCKHOLDER WITHOUT CHARGE A COPY OF THE CORPORATION'S ANNUAL REPORT
ON FORM 10-K REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE 1934 ACT. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED
TO THE CORPORATE SECRETARY, FIRST FINANCIAL CORPORATION OF WESTERN
MARYLAND, 118 BALTIMORE STREET, CUMBERLAND 21502. THE FORM 10-K IS NOT
PART OF THE PROXY SOLICITATION MATERIALS.

OTHER MATTERS

Management is not aware of any business to come before the Annual
Meeting other than the matters described above in this Proxy Statement.
However, if any other matters should properly come before the meeting,
it is intended that the GREEN proxies solicited hereby will be voted
with respect to those other matters in accordance with the judgment of
the persons voting the proxies.

The Corporation will bear the cost of soliciting proxies on behalf of
the Board of the Corporation. The Corporation may solicit proxies by mail,
advertisement, telephone, facsimile, telegraph and personal solicitation.
Directors, officers and employees of the Corporation and the Bank may
solicit proxies personally or by telephone without additional
compensation. The Corporation will reimburse banks, brokerage firms and
other custodians, nominees and fiduciaries for reasonable expenses incurred
by them in sending proxy solicitation materials to the beneficial owners of
the Common Stock.

The Corporation has retained Morrow & Co., Inc., 909 Third Avenue,
20th Floor, New York, New York 10022, a professional proxy solicitation
firm, to assist in the solicitation of proxies and for related services.
The Corporation will pay Morrow & Co., Inc. a fee of $7,500 and has
agreed to reimburse it for its reasonable out-of-pocket expenses.

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REVOCABLE PROXY

FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST
FINANCIAL CORPORATION OF WESTERN MARYLAND FOR USE AT THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON OCTOBER 24, 1996 AND AT ANY ADJOURNMENT
THEREOF.

The undersigned hereby appoints the Board of Directors of First
Financial Corporation of Western Maryland (the "Corporation") as
proxies, each with power to appoint his substitute, and hereby
authorizes them to represent and vote, as designated below, all the
shares of Common Stock of the Corporation held of record by the
undersigned on August 30, 1996 at the Annual Meeting of Stockholders to
be held at the Holiday Inn, located at 100 South George Street,
Cumberland, Maryland, on Thursday, October 24, 1996, at 10:00 a.m.,
Eastern Time, and any adjournment thereof.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE BOARD OF
DIRECTORS' NOMINEES FOR DIRECTOR AND "FOR" THE RATIFICATION OF THE INDEPENDENT
AUDITORS.

1. ELECTION OF DIRECTORS FOR THREE-YEAR TERM

/ / FOR all nominees listed
below
(except as marked to the
contrary below)

/ / WITHHOLD AUTHORITY
to vote for all
nominees listed below

Nominees for three-year term expiring in 1999:

Cheston H. Browning, III; L. Fred Dean; Morton W. Peskin, Jr.; and
R. Thomas Thayer, Jr.

(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)

------------------------------------------------------------------------------

2. PROPOSAL TO RATIFY THE APPOINTMENT by the Board of Directors of
KPMG Peat Marwick LLP as the Corporation's independent auditors for the
year ending June 30, 1997.

FOR / / AGAINST / / ABSTAIN / /

3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.

(CONTINUED ON REVERSE SIDE)

DEFC14A Last Page of 23 TOC 1st Previous Next ↓Bottom Just 23rd
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. THE SHARES OF THE
CORPORATION'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT OTHERWISE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS, "FOR" THE PROPOSAL TO
RATIFY THE INDEPENDENT AUDITOR AND OTHERWISE AT THE DISCRETION OF THE
PROXIES. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO THE TIME IT IS
VOTED AT THE ANNUAL MEETING.

Dated: , 1996
--------------------

------------------------
------------------------
Signatures

PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAMES(S) APPEAR(S) ON THIS PROXY.
WHEN SIGNING IN A REPRESENTATIVE CAPACITY, PLEASE GIVE TITLE. WHEN
SHARES ARE HELD JOINTLY, ONLY ONE HOLDER NEED SIGN.

-------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
-------------------------------------------------------------------------------

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘DEFC14A’ Filing	Date	First	Last	Other Filings

	6/30/97	2	22
	5/22/97	21
	10/24/96	2	22
Filed on:	9/19/96	2	3
	9/16/96	5
	8/30/96	2	22
	8/21/96	9
	6/30/96	10	21	10-K405
	6/30/95	14
	1/1/95	8	18
	2/10/92	17
				List all Filings

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Filing Submission 0000912057-96-020696 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

First Financial Corp of Western Maryland – ‘DEFC14A’ on 9/19/96 re: First Financial Corp of Western Maryland

As of: Thursday, 9/19/96 · Accession #: 912057-96-20696 · File #: 0-19837

Definitive Proxy Solicitation Material — Contested Solicitation — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Definitive Proxy Solicitation Material — Contested Solicitation — Schedule 14A
Filing Table of Contents