<PAGE>
<PAGE>
SCHEDULE 14A INFORMATION
(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
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c)
or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
PATAPSCO BANCORP, INC.
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] NO FEE REQUIRED
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
1. Title of each class of securities to which
transaction applies:
________________________________________________________________
2. Aggregate number of securities to which transaction
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:
________________________________________________________________
[ ] 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:
____________________________________________
<PAGE>
<PAGE>
[LETTERHEAD]
September 27, 1999
Dear Stockholder:
You are invited to attend the annual meeting of stockholders
of Patapsco Bancorp, Inc. to be held at the office of The
Patapsco Bank, located at 1301 Merritt Boulevard, Dundalk,
Maryland, on Thursday, October 28, 1999 at 4:00 p.m.
The accompanying notice and proxy statement describe the
formal business to be transacted at the meeting. During the
meeting, we will also report on the operations of the Company's
wholly owned subsidiary, The Patapsco Bank. Directors and
officers of the Company will be present to respond to any
questions the stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN,
DATE AND RETURN THE ACCOMPANYING FORM OF PROXY AS SOON AS
POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING.
Your vote is important, regardless of the number of shares you
own. This will not prevent you from voting in person but will
assure that your vote is counted if you are unable to attend the
meeting.
Sincerely,
/s/ Joseph J. Bouffard
Joseph J. Bouffard
President
<PAGE>
<PAGE>
_________________________________________________________________
PATAPSCO BANCORP, INC.
1301 Merritt Boulevard
Dundalk, Maryland 21222-2194
(410) 285-1010
_________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on October 28, 1999
_________________________________________________________________
NOTICE IS HEREBY GIVEN that the annual meeting of
stockholders (the "Annual Meeting") of Patapsco Bancorp, Inc.
(the "Company") will be held at the office of The Patapsco Bank,
located at 1301 Merritt Boulevard, Dundalk, Maryland, on
Thursday, October 28, 1999 at 4:00 p.m.
A Proxy Statement and form of proxy for the Annual Meeting
accompany this notice.
The Annual Meeting is for the purpose of considering and
acting upon:
1. The election of two directors of the Company for
terms of three years and one director of the
Company for a term of two years; and
2. The transaction of such other matters as may
properly come before the Annual Meeting or any
adjournments thereof.
The Board of Directors is not aware of any other business to
come before the Annual Meeting.
Any action may be taken on any one of the foregoing
proposals at the Annual Meeting on the date specified above or on
any date or dates to which, by original or later adjournment, the
Annual Meeting may be adjourned. Stockholders of record at the
close of business on September 17, 1999 are the stockholders
entitled to vote at the Annual Meeting and any adjournments
thereof.
You are requested to fill in and sign the accompanying form
of proxy which is solicited by the Board of Directors and to mail
it promptly in the accompanying envelope. The proxy will not be
used if you attend and vote at the Annual Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Theodore C. Patterson
THEODORE C. PATTERSON
SECRETARY
Dundalk, Maryland
September 27, 1999
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE
COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO
ENSURE A QUORUM. THE ACCOMPANYING FORM OF PROXY IS ACCOMPANIED
BY A SELF-ADDRESSED ENVELOPE FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
<PAGE>
_________________________________________________________________
PROXY STATEMENT
OF
PATAPSCO BANCORP, INC.
1301 Merritt Boulevard
DUNDALK, MARYLAND 21222-2194
_________________________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 28, 1999
_________________________________________________________________
_________________________________________________________________
GENERAL
_________________________________________________________________
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Patapsco
Bancorp, Inc. (the "Company") to be used at the annual meeting of
stockholders (the "Annual Meeting") which will be held at the
office of The Patapsco Bank, located at 1301 Merritt Boulevard,
Dundalk, Maryland, on Thursday, October 28, 1999 at 4:00 p.m.
This proxy statement and the accompanying notice and form of
proxy are being first mailed to stockholders on or about
September 27, 1999.
_________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
_________________________________________________________________
Stockholders who execute proxies retain the right to revoke
them at any time. Unless so revoked, the shares represented by
properly executed proxies will be voted at the Annual Meeting and
all adjournments thereof. Proxies may be revoked by written
notice to Dr. Theodore C. Patterson, Secretary of the Company, at
the address shown above, by filing a later dated proxy prior to a
vote being taken on a particular proposal at the Annual Meeting
or by attending the Annual Meeting and voting in person. The
presence of a stockholder at the Annual Meeting will not in
itself revoke such stockholder's proxy.
Proxies solicited by the Board of Directors of the Company
will be voted in accordance with the directions given therein.
Where no instructions are indicated, proxies will be voted for
the nominees for directors set forth below. The proxy confers
discretionary authority on the persons named therein to vote with
respect to the election of any person as a director where the
nominee is unable to serve or for good cause will not serve, and
matters incident to the conduct of the Annual Meeting. If any
other business is presented at the Annual Meeting, proxies will
be voted by those named therein in accordance with the
determination of a majority of the Board of Directors. Proxies
marked as abstentions will not be counted as votes cast. Shares
held in street name which have been designated by brokers on
proxies as not voted will not be counted as votes cast. Proxies
marked as abstentions or as broker non-votes, however, will be
treated as shares present for purposes of determining whether a
quorum is present.
_________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
_________________________________________________________________
The securities entitled to vote at the Annual Meeting
consist of the Company's common stock, $.01 par value per share
(the "Common Stock"). Stockholders of record as of the close of
business on September 17, 1999 (the "Record Date") are entitled
to one vote for each share of Common Stock then held. At the
Record Date, the Company had 344,426 shares of Common Stock
issued and outstanding. The presence, in person or by proxy, of
at least a majority of the total number of shares of Common Stock
outstanding and entitled to vote will be necessary to constitute
a quorum at the Annual Meeting.
-1-
<PAGE>
<PAGE>
Persons and groups beneficially owning in excess of 5% of
the Common Stock are required to file certain reports regarding
such ownership pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The following table sets forth,
as of September 17, 1999, certain information as to the Common
Stock believed by management to be beneficially owned by persons
owning in excess of 5% of the Company's Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF SHARES OF
NAME AND ADDRESS BENEFICIAL COMMON STOCK
OF BENEFICIAL OWNER OWNERSHIP(1) OUTSTANDING
- ------------------ ------------ ------------
<S> <C> <C>
Patapsco Bancorp, Inc. 41,341 (2) 12.0%
Employee Stock Ownership Plan ("ESOP")
1301 Merritt Boulevard
Dundalk, Maryland 21224
<FN>
___________
(1) In accordance with Rule 13d-3 under the Securities Exchange
Act of 1934 (the "Exchange Act"), a person is deemed to be
the beneficial owner, for purposes of this table, of any
shares of Common Stock if he or she has or shares voting or
investment power with respect to such Common Stock or has a
right to acquire beneficial ownership at any time within 60
days from the Record Date. As used herein, "voting power" is
the power to vote or direct the voting of shares and
"investment power" is the power to dispose or direct the
disposition of shares.
(2) These shares are held in a suspense account for future
allocation among participating employees as the loan used to
purchase the shares is repaid. The ESOP trustees, currently
Directors O'Neill and Patterson, vote all allocated shares in
accordance with instructions of the participants. Unallocated
shares and shares for which no instructions have been
received are voted by the ESOP trustees in the same ratio as
participants direct the voting of allocated shares or, in the
absence of such direction, as directed by the Company's Board
of Directors. At the Record Date, 12,574 shares had been
allocated.
</FN>
</TABLE>
_________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
_________________________________________________________________
GENERAL
The Company's Board of Directors currently consists of six
members. The Company's Articles of Incorporation require that
directors be divided into three classes, as nearly equal in
number as possible, with approximately one-third of the directors
elected each year. Under the Company's Articles of
Incorporation, directors are elected by a plurality of the votes
cast at a meeting at which a quorum is present.
It is intended that the persons named in the proxies
solicited by the Board of Directors will vote for the election of
the named nominees. If any nominee is unable to serve, the
shares represented by all valid proxies will be voted for the
election of such substitute as the Board of Directors may
recommend or the size of the Board may be reduced to eliminate
the vacancy. At this time, the Board knows of no reason why any
nominee might be unavailable to serve.
-2-
<PAGE>
<PAGE>
The following table sets forth, for each nominee for director
and continuing director of the Company, as well as for each of
the two directors retiring effective at the Annual Meeting, his
or her age, the year he or she first became a director of The
Patapsco Bank (the "Bank"), which is the Company's principal
operating subsidiary, and the expiration of his or her term as a
director. All such persons were appointed as directors in 1995
in connection with the incorporation and organization of the
Company, except for Mr. Waters who was appointed as a director in
August 1999 to fill a vacancy on the Board of Directors. Each
director of the Company also is a member of the Board of
Directors of the Bank.
<TABLE>
<CAPTION> YEAR FIRST
AGE AT ELECTED AS CURRENT
JUNE 30, DIRECTOR OF TERM
NAME 1999 THE BANK TO EXPIRE
- ---- ----------- ------------ ---------
<S> <C> <C> <C>
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2002
Douglas H. Ludwig 61 1992 1999
Theodore C. Patterson 67 1979 1999
BOARD NOMINEE FOR TERM TO EXPIRE IN 2001
William R. Waters 56 1999 1999
DIRECTORS CONTINUING IN OFFICE
Joseph J. Bouffard 49 1995 2000
Nicole N. Glaeser 41 1993 2000
Thomas P. O'Neill 46 1995 2001
</TABLE>
Set forth below is information concerning the Company's
directors. Unless otherwise stated, all directors have held the
positions indicated for at least the past five years.
DOUGLAS H. LUDWIG served as a teacher, counselor and
principal in the high schools of the southeast area of the
Baltimore County Public Schools until his retirement in 1992.
Mr. Ludwig has been active in many community organizations during
his 47 years of residence in Dundalk.
THEODORE C. PATTERSON is Secretary of both the Company and
the Bank and is a retired physician. Prior to his retirement in
September 1996, he was the Medical Director of Meridian-Heritage
Nursing Center and staff physician at the Fort Howard V.A.
Medical Center. He is the recipient of many awards including
Dundalk Citizen of the Year for 1990, Baltimore County Physician
Community Service Award, University of Maryland School of
Medicine Dedicated Service Award, and most recently, the
Distinguished Service Award given by the University of Maryland
Medical Alumni Association. He has held leadership positions in
a number of community organizations.
WILLIAM R. WATERS is a Vice President and owner of Scott
Pontiac in Bel Air, Maryland. He is the President and owner of
Bel Air Medicine Inc., which trades as The Medicine Shop. He is
a member of the advisory board of Donahue-Hart and Associates, an
insurance and financial services company located in Bel Air,
Maryland. Mr. Waters also serves on the financial board of Grace
Community Church of Perry Hall. He was formerly a member of the
Board of the Bank's predecessor organization, Patapsco Federal
Savings and Loan Association, from 1984 to 1994.
-3-
<PAGE>
<PAGE>
JOSEPH J. BOUFFARD joined the Bank's predecessor, Patapsco
Federal Savings and Loan Association (the "Association"), in
April, 1995 as its President and Chief Executive Officer. Prior
to joining the Association, from December 1990 Mr. Bouffard was
Senior Vice President of The Bank of Baltimore, and its
successor, First Fidelity Bank. Prior to that, he was President
of Municipal Savings Bank, FSB in Towson, Maryland. He is a
current Board member of the Dundalk Community College Foundation.
He is a former chairman of the Board of Governors of the Maryland
Mortgage Bankers Association. He served as Treasurer of the
Neighborhood Housing Services of Baltimore and was a charter
member and Treasurer of the TowsonTowne Rotary Club.
NICOLE N. GLAESER is Budget Director for the Baltimore
County Police Department, a position she has held since 1988,
except for six months in 1992, during which time she served as
Chief of Staff to the Baltimore County Executive. On a part-time
basis, Ms. Glaeser is a practicing attorney and is also a
Certified Public Accountant.
THOMAS P. O'NEILL was named Chairman of the Board of the
Company and the Bank in August 1999 and has been a director since
1995. He is a managing director of American Express Tax and
Business Services. Formerly he was the managing partner of the
regional accounting firm of Wolpoff & Company LLP, which merged
with American Express Tax and Business Services in 1998. He
joined Wolpoff as a staff accountant in 1974 and became a partner
in 1983. Mr. O'Neill is a member of the American Institute of
Certified Public Accountants, the Maryland Association of
Certified Public Accountants and the Pennsylvania Associates of
Certified Public Accountants. He has served on the boards of
many charitable and civic groups.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following sets forth information with respect to
executive officers of the Bank who do not serve on the Board of
Directors.
<TABLE>
<CAPTION>
Age at
June 30,
Name 1999 Title with the Bank
- ---- -------- -------------------
<S> <C> <C>
Debra L. Penczek 43 Vice President - Operations
Frank J. Duchacek, Jr. 55 Senior Vice President -
Commercial Lending
Michael J. Dee 39 Chief Financial Officer and
Controller of the Company
and the Bank
John W. McClean 55 Vice President - Real Estate
Lending
Joseph R. Sallese 64 Vice President - Consumer
Lending
</TABLE>
DEBRA L. PENCZEK has served in various capacities since
joining the Bank in 1974 and has served in her present capacity
as Vice President of Operations since 1992. Ms. Penczek is
Secretary and the former President of the Breakfast Optimist Club
of Dundalk, Lieutenant Governor of the Maryland-South Delaware
Optimist District, President of the Dundalk Association of
Business, Inc. and Director of the Maryland Institute of
Financial Education. She is a past member of the Management
Studies Advisory Board of Dundalk Community College, the Eastern
Baltimore Area Chamber of Commerce, the North Point Peninsula
Community Coordinating Council and the Sandy Plains Elementary
School Improvement Team and various boards and committees of the
Patapsco United Methodist Church.
FRANK J. DUCHACEK, JR. is a Senior Vice President who joined
the Bank in February 1996 as its Vice President of Commercial
Lending. Prior to that time, Mr. Duchacek was a credit
underwriter and business development officer for First Union
Bank, successor of First Fidelity Bank, N.A. From 1989 to 1993,
Mr. Duchacek was a department manager for commercial lending at
Provident Bank of Maryland. During the preceding 28 years, Mr.
Duchacek occupied various lending and management positions with
Union Trust Bank and its successor, Signet Bank, Maryland. Mr.
Duchacek is a Director of the Eastern Baltimore County Chamber of
Commerce. Mr. Duchacek served as a member
-4-
<PAGE>
<PAGE>
of the Maryland Home Improvement Commission and currently is
active with the Greater Kingsville Civic Association and St.
John's Episcopal Church in Kingsville, Maryland.
MICHAEL J. DEE joined the Company and the Bank in May 1999
as its Chief Financial Officer and Controller. From September
1997 to May 1999, Mr. Dee was Vice President of Management
Accounting for Sandy Spring National Bank of Maryland. From May
1995 to October 1997, Mr. Dee was the Manager of Financial
Planning and Analysis with United Press International in
Washington, D.C. From December 1989 to March 1995, Mr. Dee was
employed by The Bank of Baltimore and its successors, First
Fidelity Bank, N.A. and First Union Bank, in a variety of
financial positions. Mr. Dee is a Certified Management
Accountant (CMA).
JOHN W. MCCLEAN joined the Bank in August 1995 as its Vice
President of Real Estate Lending. From January 1994 to August
1995, Mr. McClean was a self-employed business consultant. Prior
to engaging in his own business, Mr. McClean was employed by
Baltimore Bancorp from December 1990 as Vice President of the
Bank of Baltimore's Asset Management and Disposition Group and
from December 1985 as Senior Vice President and Chief Lending
Officer of Municipal Savings Bank. Prior to that, Mr. McClean
spent 20 years working for First National Bank of Maryland in the
Commercial Real Estate Department. Mr. McClean is a past
president of the Maryland Mortgage Bankers Association and has
served on the Board of Neighborhood Housing Services of
Baltimore. He is the Vice President of Finance of the Baltimore
County Volunteer Firemen's Association and past president and
current member of the Board of Directors of the Providence
Volunteer Fire Company.
JOSEPH R. SALLESE joined the Bank in May 1995 as Vice
President of Consumer Lending. Prior to that time, Mr. Sallese
was Vice President - Indirect Lending with the Bank of Baltimore
and its successor, First Fidelity Bank, for over 35 years. Mr.
Sallese currently serves on the Board of Directors and is the
Treasurer of the Maryland Improvement Contractor's Association
(MICA), a trade association for home improvement contractors.
Mr. Sallese serves on the Finance Committee of Our Lady of Hope
Church and is a former Treasurer of its Home and School
Association.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company holds regular monthly
meetings and holds special meetings as needed. During the year
ended June 30, 1999, the Board of Directors of the Company met 13
times. No director of the Company attended fewer than 75% in the
aggregate of the total number of Board meetings held while he was
a member during the year ended June 30, 1999 and the total number
of meetings held by committees on which he or she served during
such fiscal year.
The Board of Directors' Audit Committee consists of
Directors Bouffard, Ludwig and Glaeser, who serves as
Chairperson. The Committee met five times during the year ended
June 30, 1999 to examine and approve the audit report prepared by
the independent auditors of the Company, to review and recommend
the independent auditors to be engaged by the Company, to review
the internal audit function and internal accounting controls, and
to review and approve Company policies.
The Company's full Board of Directors acts as a nominating
committee. The Company's full Board of Directors met once as a
Nominating Committee during the year ended June 30, 1999. In
its deliberations, the Board, functioning as a nominating
committee, considers the candidate's knowledge of the banking
business and involvement in community, business and civic
affairs, and also considers whether the candidate would provide
for adequate representation in its market area. The Company's
Articles of Incorporation set forth procedures that must be
followed by stockholders seeking to make nominations for
directors. In order for a stockholder of the Company to make any
nominations, he or she must give written notice thereof to the
Secretary of the Company not less than thirty days nor more than
sixty days prior to the date of any such meeting; provided,
however, that if less than forty days' notice of the meeting is
given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Company not later
than the close of business on the tenth day following the day on
which notice of the meeting was mailed to stockholders. Each
such notice given by a stockholder with respect to nominations
for the election of directors
-5-
<PAGE>
<PAGE>
must set forth (i) the name, age, business address and, if known,
residence address of each nominee proposed in such notice; (ii)
the principal occupation or employment of each such nominee; and
(iii) the number of shares of stock of the Company which are
beneficially owned by each such nominee. In addition, the
stockholder making such nomination must promptly provide any
other information reasonably requested by the Company.
The Board of Directors' Compensation Committee consists of
Directors Patterson, Bouffard and O'Neill. The Compensation
Committee evaluates the compensation and benefits of the
directors, officers and employees, recommends changes, and
monitors and evaluates employee performance. The Compensation
Committee met four times during the fiscal year ended June 30,
1999.
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash
compensation for the fiscal years ended June 30, 1999, 1998 and
1997 awarded to or earned by the Chief Executive Officer for
services rendered in all capacities to the Company and the Bank
during those years. No other executive officer of the Company
earned salary and bonus in fiscal 1999 exceeding $100,000 for
services rendered in all capacities to the Company and the Bank.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION (1) ----------------------
NAME AND --------------------------------- RESTRICTED SECURITIES
PRINCIPAL FISCAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
- --------- ------ ------ ----- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph J. Bouffard 1999 $100,000 $12,295 $6,000 $ -- -- $17,193 (3)
President and CEO 1998 100,002 23,300 6,000 -- -- 27,101
1997 89,265 -- 6,000 85,745 (4) 6,743 11,115
<FN>
__________
(1) Executive officers of the Bank receive indirect compensation in the form of
certain perquisites and other personal benefits. The amount of such
benefits received by the named executive officers in fiscal 1999 did not
exceed 10% of the executive officer's salary and bonus.
(2) Consists of an automobile allowance.
(3) For fiscal year 1999, such amount represents the value of shares of Common
Stock allocated to Mr. Bouffard's account under the ESOP, based on the
closing price of the Common Stock of $28.75 as quoted on the OTC Bulletin
Board on June 30, 1999.
(4) Value shown in the table is based on the closing price of the Common Stock
of $27.50 as quoted on the OTC Bulletin Board on the date of grant, October
11, 1996. The restricted Common Stock awarded vests at the rate of 20% per
year following the date of grant, with the first 20% having vested on
October 11, 1997. In addition, during the year ended June 30, 1998, the
Management Recognition Plan ("MRP") Trust used cash it received from
dividends on shares of restricted Common Stock awarded on October 11, 1996
to purchase an additional 663 shares of restricted Common Stock for Mr.
Bouffard's account, and during the year ended June 30, 1999, the MRP trust
used cash from dividends it received on shares of restricted Common Stock
to buy an additional 386 shares of restricted Common Stock for Mr.
Bouffard's account. Such shares vest on the same schedule as the October
11, 1996 award shares to which the dividends were attributable. As of June
30, 1999, based on the closing sale price of the Common Stock of $28.75 as
reported on the OTC Bulletin Board, the aggregate value of the 2,755 shares
of restricted Common Stock held by Mr. Bouffard was $79,206. In addition,
at June 30, 1999, the Company's MRP Trust held $858 in cash representing
accrued dividends for the benefit of Mr. Bouffard. In the event the
Company pays dividends with respect to its Common Stock, when shares of
restricted stock vest and/or are distributed, the holder will be entitled
to receive any cash dividends and a number of shares of Common Stock equal
to any stock dividends, declared and paid with respect to a share of
restricted Common Stock between the date the restricted stock was awarded
and the date the restricted stock is distributed, plus interest on cash
dividends, provided that dividends paid with respect to unvested restricted
stock must be repaid to the Company in the event the restricted stock is
forfeited prior to vesting.
</FN>
</TABLE>
-6-
<PAGE>
<PAGE>
Year-end Option Values. The following table sets forth
information concerning the value as of June 30, 1999 of options
held by the executive officer named in the Summary Compensation
Table set forth above.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
Joseph J. Bouffard 3,372/5,057 $33,180/$49,761
<FN>
_________
(1) Based on the difference between the fair market value of the underlying
Common Stock of $28.75 as quoted on the OTC Bulletin Board on June 30,
1999 and the exercise price of $18.91 per share.
</FN>
</TABLE>
No options were granted to or exercised by the named
executive officer during the year ended June 30, 1999, and no
options held by any executive officer of the Company repriced
during the past ten full fiscal years.
DIRECTOR COMPENSATION
General. Each nonemployee member of the Company's Board of
Directors receives a fee of $450 for each regular and special
meeting attended of the Company's Board of Directors and $200
for each meeting attended of a committee of either the Company's
or the Bank's Board of Directors. No fees are paid for
attendance at meetings of the Bank's Board of Directors. The
Chairman of the Board receives an additional $500 per month.
Nonemployee directors also participate in the Company's 1996
Stock Option and Incentive Plan (the "Option Plan") Management
Recognition Plan (the "MRP"), Incentive Compensation Plan (the
"ICP") and The Patapsco Bank Retirement Plan for Non-Employee
Directors (the "Retirement Plan"). Directors did not receive
any awards under the Option Plan or the MRP during the year
ended June 30, 1999. Nonemployee directors Glaeser, Ludwig,
O'Neill and Patterson each received $2,462 during the year ended
June 30, 1999 under the ICP.
Director Retirement Plan. The Bank's Board of Directors has
adopted a retirement plan (the "Directors' Plan"), for each
non-employee director (i) who is a voting member of the Bank's
Board of Directors at any time on or after September 28, 1995,
which is the plan's effective date, and (ii) who is not an
employee on the date of being both nominated and elected or
reelected to the Bank's Board of Directors. Under the
Directors' Plan, a participant who terminates service as a
voting member of the Bank's Board of Directors will receive a
payment equal to the product of his or her "Benefit Percentage,"
his or her "Vested Percentage," and $60,000 (as indexed after
1995 for cost-of-living changes). A participant's "Benefit
Percentage" increases from 0% for less than five years of
service on the Bank's Board of Directors to 30% for five years
of service, and thereafter in additional increments of 7% for
each year of service from six to fourteen years, to 100% for
fifteen or more years of service. A participant's "Vested
Percentage" begins at 50%, increases to 75% upon completion of
one year of service following the effective date, and becomes
100% if the participant completes a second year of service
following the effective date. However, a participant's Vested
Percentage becomes 100% regardless of his or her years of
service in the event the participant terminates service on the
Bank's Board of Directors due to death, "disability," retirement
at or after age 72, or in the event of a "change in control" (as
such terms are defined in the Directors' Plan). The provision
accelerating a participant's Vested Percentage due to a change
in control may have the effect of deferring a hostile change in
control by increasing the costs of acquiring control.
<PAGE>
Each participant may elect to receive his or her plan
benefits either in a lump sum cash payment or in substantially
equal annual payments over a period of up to ten years, in which
event the undistributed portion of the participant's benefits
will be credited with an annual rate of return equal to the
Bank's highest rate of interest on certificates of deposit
having a one year term. If a participant dies, his or her
beneficiary will receive the participant's benefits in a lump
sum (unless the participant elects a distribution period of up
to ten years).
-7-
<PAGE>
<PAGE>
The Bank will pay all plan benefits from its general assets,
and expects to establish a trust in the event of a change in
control of the Bank. All expenses associated with the
implementation and maintenance of the trust will be paid by the
Bank. The Bank will fund the trust through a lump sum deposit
of an amount that is projected to be sufficient to pay each
director the benefits to which he or she is entitled pursuant to
the Directors' Plan as of the date of the change in control.
Trust assets will be subject to the claims of the Bank's general
creditors.
During the year ended June 30, 1999, $4,784, $3,581, $4,020
and $1,049 were accrued under the Directors' Plan for the
benefit of Directors Glaeser, Ludwig, O'Neill and Patterson,
respectively.
EMPLOYMENT AGREEMENTS
The Company and the Bank have entered into employment
agreements (the "Employment Agreements") with Mr. Joseph J.
Bouffard, President and Chief Executive Officer of the Bank and
of the Company. In such capacities, Mr. Bouffard is responsible
for overseeing all operations of the Bank and the Company, and
for implementing the policies adopted by the Boards of Directors
of the Company and the Bank. The Employment Agreements provide
for a term of three years. On each anniversary date from the
date of commencement of the Employment Agreements, the term of
Mr. Bouffard's employment under the Employment Agreements may be
extended for an additional one-year period beyond the then
effective expiration date, upon a determination by the Board of
Directors that Mr. Bouffard's performance has met the required
performance standards and that such Employment Agreements should
be extended. The Employment Agreements provide Mr. Bouffard
with a salary review by the Boards of Directors not less often
than annually, as well as with inclusion in any discretionary
bonus plans, retirement and medical plans, customary fringe
benefits and vacation and sick leave. Mr. Bouffard's base
salary currently is $100,000. The Employment Agreements will
terminate upon Mr. Bouffard's death or disability, and are
terminable by the Bank for "just cause" as defined in the
Employment Agreements. In the event of termination for just
cause, no severance benefits are available. If the Company or
the Bank terminates Mr. Bouffard without just cause, he will be
entitled to a continuation of his salary and benefits from the
date of termination through the remaining terms of the
Employment Agreements plus an additional 12-month period
(but not, from the Bank, in excess of three times his five
years' average compensation). If the Employment Agreements are
terminated due to Mr. Bouffard's "disability" (as defined in the
Employment Agreements), he will be entitled to a continuation of
his salary and benefits through the date of such termination,
including any period prior to establishment of Mr. Bouffard's
disability. In the event of Mr. Bouffard's death during the
term of the Employment Agreements, his estate will be entitled
to receive his salary through the last day of the month in which
his death occurs.
The Employment Agreements provide that in the event of Mr.
Bouffard's involuntary termination of employment in connection
with, or within one year after, any "change in control" (as
defined in the Employment Agreements) of the Bank or the
Company, other than for "just cause," Mr. Bouffard will be paid
within 10 days of such termination an amount equal to the
difference between (i) 2.99 times his "base amount," as defined
in Section 280G(b)(3) of the Internal Revenue Code, and (ii) the
sum of any other parachute payments, as defined under Section
280G(b)(2) of the Internal Revenue Code, that Mr. Bouffard
receives on account of the change in control. The Employment
Agreement with the Bank provides that within five business days
before or after a change in control which was not approved in
advance by a resolution of a majority of the Continuing
Directors, the Bank shall fund, or cause to be funded,
a trust in the amount of 2.99 times Mr. Bouffard's base amount,
that will be used to pay Mr. Bouffard amounts owed to him upon
termination, other than for just cause. The Employment
Agreements also provide for a similar lump sum payment to be
made in the event of Mr. Bouffard's voluntary termination of
employment within one year following a change in control, upon
the occurrence, or within 90 days thereafter, of certain
specified events following the change in control, which have not
been consented to in writing by Mr. Bouffard. Such events
generally relate to a reduction in Mr. Bouffard's salary,
benefits or duties. The aggregate payments that would be made
to Mr. Bouffard assuming his termination of employment under the
foregoing circumstances at June 30, 1999 would have been
approximately $299,000. These provisions may have an
anti-takeover effect by making it more expensive for a potential
acquiror to obtain control of the Company. In the event that
Mr. Bouffard prevails over the Company and the Bank in a legal
dispute as to the Employment Agreements, he will be reimbursed
for his legal and other expenses.
-8-
<PAGE>
<PAGE>
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
In January 1998, in order to provide Joseph J. Bouffard (the
"Executive") with supplemental retirement benefits and thereby
encourage his continuing service as President and Chief
Executive Officer of the Company and the Bank, the Bank has
entered into a Supplemental Executive Retirement Agreement (the
"SERA") with the Executive. Pursuant to the terms of the SERA,
the Bank established an account in the name of the Executive to
which the Bank credits $439 on the first day of each month in
which the Executive continues to be employed with the Bank.
For each calendar year, the value of this account will
appreciate or depreciate as if the account was invested in, at
the election of the Executive, the highest rate paid by the Bank
on certificates of deposit having a term of one year, a fund
that invested in the Common Stock or a mutual fund agreed upon
by the Bank and the Executive. Amounts credited to the
Executive's account are unvested and forfeitable until the
earlier of one of the following events (at which time the
Executive becomes fully vested in his account): (i) the
Executive's continued status as an employee through April 2,
2000; (ii) termination of the Executive's status as an employee
due to his death or disability; or (iii) termination of the
Executive's status as an employee either without Just Cause (as
defined in the Employment Agreements) or on or after a Change in
Control (as defined in the Employment Agreements).
Upon his termination of employment from the Bank for a
reason other than Just Cause, the balance in his account will be
paid to the Executive either in a lump sum or in substantially
equal annual installments over a period of up to ten years, with
the first installment due on the first day of the second month
after he leaves employment. If the Executive's employment with
the Bank is terminated for Just Cause, he will forfeit the right
to receive any payments pursuant to the SERA. In the event of a
Change in Control, the present value of the benefits to which he
is entitled shall be payable to the Executive in accordance with
his distribution election form.
TRANSACTIONS WITH MANAGEMENT
The Bank offers loans to its directors and officers. These
loans currently are made in the ordinary course of business with
the same collateral, interest rates and underwriting criteria as
those of comparable transactions prevailing at the time and do
not involve more than the normal risk of collectibility or
present other unfavorable features. Under current law, the
Bank's loans to directors and executive officers are required to
be made on substantially the same terms, including interest
rates, as those prevailing for comparable transactions and must
not involve more than the normal risk of repayment or present
other unfavorable features. Furthermore, all loans to such
persons must be approved in advance by a disinterested majority
of the Board of Directors. At June 30, 1999, the Bank's loans
to directors and executive officers totaled $134,606, or 1.5% of
the Company's stockholders' equity, at that date.
-9-
<PAGE>
<PAGE>
________________________________________________________________
SECURITY OWNERSHIP OF MANAGEMENT
________________________________________________________________
The following table sets forth, as of the Record Date, the
beneficial ownership of the Company's Common Stock by each of
the Company's directors and nominees, the sole executive officer
named in the Summary Compensation Table and by all directors and
executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF SHARES OF
BENEFICIAL COMMON STOCK
NAME OWNERSHIP (1) OUTSTANDING
---- ------------- ------------
<S> <C> <C>
Joseph J. Bouffard 12,915 (2) 3.69%
Nicole N. Glaeser 3,455 1.00
Douglas H. Ludwig 4,896 (3) 1.42
Thomas P. O'Neill 3,291 (4) 0.95
Theodore C. Patterson 5,956 1.72
William R. Waters 2,150 (5) 0.62
All Executive Officers and
Directors as a Group
(11 persons) 59,687 (6) 16.23%
<FN>
____________
(1) For the definition of beneficial ownership, see footnote 1
to the table in "Voting Securities and Principal Holders
Thereof." Unless otherwise indicated, ownership is direct
and the named individual exercises sole voting and
investment power over the shares listed as beneficially
owned by such person. Amounts shown include 5,057, 976,
1,168, 1,053, 1,328, 0 and 19,696 shares which may be
acquired by Directors Bouffard, Glaeser, Ludwig, O'Neill,
Patterson and Waters, and by all directors and executive
officers of the Company as a group, respectively, upon the
exercise of options exercisable within 60 days of the Record
Date. Amounts shown include 909, 203, 203, 54, 203, 0 and
3,621 shares of restricted Common Stock which are held in
the MRP Trust for the benefit of Directors Bouffard,
Glaeser, Ludwig, O'Neill, Patterson and Waters, and all
executive officers and directors as a group, respectively,
and which will vest within 60 days of the Record Date. Does
not include shares with respect to which Directors O'Neill
and Patterson have "voting power" by virtue of their
positions as trustees of the trusts holding 23,597 shares
under the Company's ESOP and 8,691 shares under the MRP.
Shares held by the ESOP trust and allocated to the accounts
of participants are voted in accordance with the
participants' instructions, and unallocated shares are voted
in the same ratio as ESOP participants direct the voting of
allocated shares or, in the absence of such direction, in
the ESOP trustees' best judgment. The shares held by the
MRP trust are voted in the same proportion as the ESOP
trustees vote the shares held in the ESOP trust.
(2) Includes 100 shares owned by Mr. Bouffard's wife, 100 shares
owned by Mr. Bouffard's wife as custodian for their son and
100 shares owned by Mr. Bouffard's son.
(3) Includes 349 shares owned by Mr. Ludwig's wife.
(4) Includes 100 shares owned by Mr. O'Neill as custodian for
his daughter.
(5) Includes 750 shares owned by Mr. Waters' wife.
(6) Includes shares held by certain directors and executive
officers as custodian under the Uniform Transfer to Minors
Act and by their spouses as set forth above. The amount
shown includes 6,442 shares of Common Stock allocated to the
accounts of all executive officers and directors as a group
under the ESOP.
</FN>
</TABLE>
<PAGE>
________________________________________________________________
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________________________________
Anderson Associates, LLP ("Anderson") which was the
Company's independent certified public accounting firm for the
1999 fiscal year, has been retained by the Board of Directors to
be the Company's auditors for the 2000 fiscal year. A
representative of Anderson Associates, LLP is expected to be
present at the Annual Meeting and will have the opportunity to
make a statement if he or she so desires.
-10-
<PAGE>
<PAGE>
On March 11, 1998, the Company, with the approval of its
Board of Directors, dismissed its independent public auditors,
KPMG Peat Marwick L.L.P. ("KPMG") and engaged Anderson effective
March 11, 1998 to perform such function. During the fiscal year
ended June 30, 1997 and the interim period through March 11,
1998 (the date of dismissal), there were not any disagreements
between the Company and KPMG on any matter of accounting
principles or practices, consolidated financial statement
disclosure or audit scope or procedure.
________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________
Pursuant to regulations promulgated under the Exchange Act,
the Company's officers, directors and persons who own more than
10 percent of the outstanding Common Stock ("Reporting Persons")
are required to file reports detailing their ownership and
changes of ownership in such Common Stock (collectively,
"Reports"), and to furnish the Company with copies of all such
Reports. Based solely on its review of the copies of such
Reports or written representations that no such Reports were
necessary that the Company received during the past fiscal year
or with respect to the last fiscal year, management believes
that during the fiscal year ended June 30, 1999, all of the
Reporting Persons complied with these reporting requirements.
________________________________________________________________
OTHER MATTERS
________________________________________________________________
The Board of Directors is not aware of any business to come
before the Annual Meeting other than those matters described
above in this proxy statement and matters incident to the
conduct of the Annual Meeting. However, if any other matters
should properly come before the Annual Meeting, it is intended
that proxies in the accompanying form will be voted in respect
thereof in accordance with the determination of a majority of
the Board of Directors.
________________________________________________________________
MISCELLANEOUS
________________________________________________________________
The cost of soliciting proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by
them in sending proxy materials to the beneficial owners of
Common Stock. In addition to solicitations by mail, directors,
officers and regular employees of the Company may solicit
proxies personally or by telegraph or telephone without
additional compensation.
The Company's 1999 Annual Report to Stockholders, including
financial statements, is being mailed to all stockholders of
record as of the close of business on the Record Date. Any
stockholder who has not received a copy of such Annual Report
may obtain a copy by writing to the Secretary of the Company.
Such Annual Report is not to be treated as a part of the proxy
solicitation material or as having been incorporated herein by
reference.
-11-
<PAGE>
<PAGE>
________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________
Under the Company's Articles of Incorporation, stockholder
proposals must be submitted in writing to the Secretary of the
Company at the address stated later in this paragraph no less
than 30 days nor more than 60 days prior to the date of such
meeting; provided, however, that if less than 40 days' notice of
the meeting is given to stockholders, such written notice shall
be delivered or mailed, as prescribed, to the Secretary of the
Company not later than the close of business on the tenth day
following the day on which notice of the meeting was mailed to
stockholders. For consideration at the Annual Meeting, a
stockholder proposal must be delivered or mailed to the
Company's Secretary no later than October 7, 1999. In order
to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the
Company's main office at 1301 Merritt Boulevard, Dundalk,
Maryland 21222-2194, no later than May 30, 2000. Any such
proposal shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Theodore C. Patterson
THEODORE C. PATTERSON
SECRETARY
Dundalk, Maryland
September 27, 1999
________________________________________________________________
ANNUAL REPORT ON FORM 10-KSB
________________________________________________________________
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR
THE FISCAL YEAR ENDED JUNE 30, 1999 AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO EACH
STOCKHOLDER AS OF THE RECORD DATE UPON WRITTEN REQUEST TO
CORPORATE SECRETARY, PATAPSCO BANCORP, INC., 1301 MERRITT
BOULEVARD, DUNDALK, MARYLAND 21222-2194.
________________________________________________________________
-12-
<PAGE>
<PAGE>
REVOCABLE PROXY
________________________________________________________________
PATAPSCO BANCORP, INC.
DUNDALK, MARYLAND
________________________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 28, 1999
The undersigned hereby appoints Nicole N. Glaeser, Joseph
J. Bouffard and Thomas P. O'Neill , with full powers of
substitution, to act as proxies for the undersigned, to vote all
shares of Common Stock of Patapsco Bancorp, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting
of Stockholders, to be held at the office of The Patapsco Bank,
located at 1301 Merritt Boulevard, Dundalk, Maryland, on
Thursday, October 28, 1999, at 4:00 p.m., and at any and all
adjournments thereof, as follows:
##
VOTE
FOR WITHHELD
--- --------
1. The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
Nominnees for Terms Expiring in 2002:
------------------------------------
Douglas H. Ludwig
Theodore C. Patterson
Nominnee for Term Expiring in 2001:
----------------------------------
William R. Waters
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL
NOMINEE, INSERT THAT NOMINEE'S NAME ON THE LINE PROVIDED
BELOW.
______________________________
The Board of Directors recommends a vote "FOR" each of
the nominees listed above.
________________________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE LISTED PROPOSITION
STATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD
OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
THIS PROXY CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS
THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS
DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE
WILL NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL
MEETING.
________________________________________________________________
<PAGE>
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at
the Annual Meeting or at any adjournment thereof and after
notification to the Secretary of the Company at the Annual
Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed
terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company
prior to the execution of this proxy of notice of the annual
meeting, a Proxy Statement dated September 27, 1999 and an
Annual Report to Stockholders.
Dated: _______________________, 1999
__________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ __________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope
in which this form of proxy was mailed. When signing as
attorney, executor, administrator, trustee or guardian, please
give your full title. If shares are held jointly, each holder
should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ACCOMPANYING POSTAGE-PREPAID ENVELOPE.
