Stockholder vows F&M charter fight not over

May 24, 1997


Staff Writer

Amendments to F&M Bancorp's charter that were opposed by some shareholders in Hagerstown passed easily on Tuesday.

Bank officials said the amendments bring the bank's charter up to date but opponents say the amendments are an abuse of shareholders' rights and are designed to prevent takeovers that could benefit shareholders.

"We may have lost the skirmish but we haven't lost the battle," said Jack Hershey, senior vice president emeritus of Ferris Baker Watts in Hagerstown.

Hershey said if he didn't see marked improvement in financial performance over the next year he and other shareholders might nominate a new board of directors.


The three amendments passed by majorities ranging from 75 percent to 81 percent of the shares voted.

The Hershey family, shareholders since 1981, owns about 18,000 shares of F&M stock, and their clients own about 600,000 shares, they said.

About 5.7 million shares are outstanding.

Hershey said the company should be growing faster than it is because of its location in Frederick County, Md., which is growing by leaps and bounds. Hershey said such conditions made the company ripe for a takeover.

F&M owns Farmers and Mechanics National Bank in Frederick and Home Federal Savings Bank in Hagerstown. It is not connected to the Farmers and Merchants Bank and Trust in Hagerstown.

David Spilman, F&M treasurer and chief financial officer of Farmers and Mechanics Bank, said the amendments will bring discipline to the process that the board uses to make major decisions about the company, including any merger activities, and denied that they were intended to thwart takeovers.

"At the right price the board will absolutely act in the best interest of shareholders," he said.

Asked if any takeover offers have been made, Spilman said it was bank policy not to discuss such matters.

Spilman said senior management and the board of directors own 7 percent of the bank's stock.

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