Former Bancorp officials sue over stock options

March 19, 1994|By David Conn | David Conn,Sun Staff Writer

Six former executives of Baltimore Bancorp yesterday sued the company for allegedly failing to make good on thousands of dollars worth of stock options awarded to the bankers before they were laid off in 1991 and 1992.

When the company's stock price rose substantially last year, the executives tried to cash in some of the stock options they were given when they worked in senior management at Baltimore Bancorp, parent of The Bank of Baltimore, according to the $15 million suit filed in Baltimore City Circuit Court.

But the executives were told that the options, which gave the holders the right to buy company stock at prices averaging $8 to $12 a share, had expired when they were laid off, according to the suit. Now that the company's improved health, and speculation about an imminent takeover, have driven the stock into the$18 range, the options are worth far more than when they were issued.

The lawsuit says the plaintiffs initially were given reason to believe the options were still valid, even after the executives were laid off.

"Over the last eight or nine months when people have been attempting to exercise their options as the price has gone up, for obvious reasons, the door has been slammed shut in their face," said Jeffrey J. Plum, who represents the plaintiffs.

James A. Gast, Baltimore Bancorp's general counsel, said the company's board of directors never agreed to extend the options, as required, and in fact decided to cancel them. "I can state without reservations that I find it unconscionable and offensive that these former members of senior management who took part in running this bank into the ground now want to come back and capitalize on the turnaround that has been accomplished at the bank since their departure," Mr. Gast said.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.