<PAGE>
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:
/x/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CARROLLTON BANCORP
- --------------------------------------------------------------------------------
(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):
/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>
CARROLLTON BANCORP
344 NORTH CHARLES STREET, SUITE 300
BALTIMORE, MARYLAND
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2000
TO THE SHAREHOLDERS OF CARROLLTON BANCORP:
The Annual Meeting of Shareholders of Carrollton Bancorp, a Maryland corporation
(the "Company"), will be held at the Company's Corporate Headquarters at 344
North Charles Street, Baltimore, Maryland on April 25, 2000 at 10:00 a.m.,
prevailing local time, for the following purposes:
1. To elect four directors for a three year term ending in 2003.
2. To act upon any other matter which may properly come before the meeting or
any adjournment thereof.
The close of business on March 10, 2000 has been fixed by the Board of Directors
as the date for determining shareholders of record entitled to receive notice of
and to vote at the Annual Meeting.
Your attention is directed to the enclosed Proxy Statement and annual report of
the Company for the fiscal year ended December 31, 1999.
Please sign, date and mail the accompanying proxy in the enclosed,
self-addressed, stamped envelope, whether or not you expect to attend the
meeting in person. You may withdraw your proxy at the meeting should you be
present and desire to vote your shares in person. Your cooperation is
respectfully requested.
BY ORDER OF THE BOARD OF DIRECTORS
D. DOREEN SMITH
SECRETARY
BALTIMORE, MARYLAND
MARCH 15, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED AND VOTED. ACCORDINGLY, PLEASE DATE, SIGN AND RETURN
THE ENCLOSED PROXY PROMPTLY.
<PAGE>
CARROLLTON BANCORP
344 NORTH CHARLES STREET, SUITE 300
BALTIMORE, MARYLAND
PROXY STATEMENT
2000 ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2000
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement (the "Proxy Statement") is being furnished to the
shareholders of Carrollton Bancorp (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders, and any adjournments thereof, to be held at
10:00 AM prevailing local time, on Tuesday, April 25, 2000. This Proxy Statement
is being sent to the shareholders of the Company on or about March 25, 2000.
The Board of Directors has selected Steven K. Breeden, Thelma T. Daley and
Howard S. Klein and each of them, to act as proxies with full power of
substitution. A proxy may be revoked at any time prior to its exercise by giving
written notice of revocation to the Company, by executing and delivering a
substitute proxy to the Company, or by attending the Annual Meeting and voting
in person. If no instructions are specified in the proxy, it is the intention of
the persons named therein to vote FOR the election of the nominees named herein
as directors of the Company.
Shareholders of the Company are requested to complete, date and sign the
accompanying form of proxy and return it promptly to the Company in the enclosed
envelope. If a proxy is properly executed and returned in time for voting, it
will be voted as indicated thereon.
The Company does not know of any matter to be presented at the Annual Meeting
except as described herein. If any other matters are properly brought before the
Annual Meeting, the persons named in the enclosed proxy intend to vote the proxy
according to their best judgement.
The Company will bear the costs of the solicitation of proxies, including the
reimbursement of banks, brokers and other fiduciaries for expenses in forwarding
proxy solicitation materials to beneficial owners. Such expenses are estimated
not to exceed $5,000. Solicitations may be made by mail, telegraph or personally
by directors, officers or employees of the Company, none of whom will receive
additional compensation for performing such services.
2
<PAGE>
VOTING SECURITIES
On February 16, 2000, the Company had outstanding 2,776,439 shares of Common
Stock, $1.00 par value per share. Each share of Common Stock entitles the holder
thereof to one vote on each matter to be voted upon at the Annual Meeting.
Neither the Company's Charter nor its Bylaws provides for cumulative voting
rights.
The close of business on March 10, 2000 has been fixed by the Board of Directors
as the record date for determining the shareholders of the Company entitled to
receive notice of and to vote at the Annual Meeting.
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes. Each year the
directors in one class are elected to serve for a term of three years. The
Shareholders will vote at this Annual Meeting for the election of four directors
for the three year term expiring at the Annual Meeting of Shareholders in 2003.
The proxies solicited hereby, unless directed to the contrary, will be voted FOR
the election as directors of all four nominees listed in the following tables.
In order to be elected, a majority of the shares voted must be voted FOR the
election of each nominee. Each nominee has consented to serve as a director, if
elected.
Your Company's Board of Directors unanimously recommends a vote FOR the election
of each of the Nominees named below as directors of the Company.
In the event that any of the nominees should be unable to serve, the persons
named in the proxy will vote for such substitute nominee or nominees as they, in
their sole discretion, shall determine. The Board of Directors has no reason to
believe that any nominee named herein will be unable to serve.
The following material contains information concerning the nominees for election
and those directors whose terms continue beyond the date of the Annual Meeting.
3
<PAGE>
NOMINEES FOR DIRECTOR FOR TERM EXPIRING IN 2003
<TABLE>
<CAPTION>
<S> <C>
ALBERT R. COUNSELMAN....... Mr. Counselman, age 51, has served as a
director of the Bank since April
1985, and of the Company since its
inception in 1990. He has been
President of Riggs, Counselman,
Michaels & Downes, Inc., an insurance
brokerage firm, since September 1987,
and served in various executive
positions with that firm from 1972 to
September 1987. (1)(2)
JOHN P. HAUSWALD........... Mr. Hauswald, age 77, has served as a
director of the Bank since 1964 and
of the Company since its inception in
1990. He was, until his retirement in
October 1989, President of The
Hauswald Bakery. Since October 1989,
he has been President of The Hauswald
Company, Inc. (1) (2)
DAVID P. HESSLER........... Mr. Hessler, age 43, has served as a
director of the Bank since March
1999, and the Company since May 1999.
He has been President and CEO of
Eastern Sales & Engineering, an
electrical contracting and service
maintenance firm, since 1987 and was
Vice president from 1986 to 1987. Mr.
Hessler has been Vice President of
Advanced Petroleum Equipment, a
distributorship, since its inception
in 1998.
WILLIAM C. ROGERS, JR...... Mr. Rogers, age 73, has served as a director of the
Bank since 1955 and of the Company
since its inception in 1990. He
has been a partner in the law firm
of Rogers, Moore and Rogers, counsel
to the Bank, since 1970. He
has been Chairman of the Board of
The Security Title Guarantee
Corporation of Baltimore since 1970
and a director since 1952, and was
President from 1970 until March 1989.
Mr. Rogers is President of Maryland
Mortgage Company where he has been a
director since 1953. He is also
President of Moreland Memorial Park
Cemetery, Inc. where he has been a
director since 1959. He is the
brother of John Paul Rogers, a
director of the Bank and the Company.
</TABLE>
4
<PAGE>
DIRECTORS CONTINUING IN OFFICE
DIRECTORS WHOSE TERMS EXPIRE IN 2001
<TABLE>
<CAPTION>
<S> <C>
DALLAS R. ARTHUR............. Mr. Arthur, age 55, has served as a
director of Carrollton Bank, and the
Company since October 1991. He has
been President of both the Company
and the Bank since October 1993, and
Chief Executive Officer of both the
Company and the Bank since February
1994. Mr. Arthur was Executive Vice
President of the Bank from October
1991 until October 1993, and had
served as First Senior Vice President
of the Bank from December 1990 until
October 1991. Mr. Arthur has been
with the Bank since 1964.
C. EDWARD HOERICHS........... Mr. Hoerichs, age 88, has served as a
director of the Bank since 1970 and
of the Company since its inception in
1990. He is the founder of Edward
Hoerichs & Sons, Inc., a mechanical
contracting firm, and was its
President from 1975 to its
dissolution in 1993.
ALLEN QUILLE................ Mr. Quille, age 80, has served as a
director of the Bank since 1976 and
of the Company since its inception in
1990. He has been President of
Quille's Parking, Inc. since 1933.
Mr. Quille has also been Secretary of
Quille-Crown Parking of Maryland
since 1983, and Secretary of The
Forum Caterers since 1983. (1)
JOHN PAUL ROGERS............. Mr. Rogers, age 64, has served as a
director of the Bank since 1970 and
of the Company since its inception in
1990. Mr. Rogers has been Chairman of
the Bank since February 1994. He was
a partner in the law firm of Rogers,
Moore and Rogers, counsel to the
Bank, from 1970 until December 1992.
Mr. Rogers was senior title officer
of The Security Title Guarantee
Corporation of Baltimore from May
1991 until December 1992, having
served as President from March 1989
until May 1991, and as Executive Vice
President from March 1970 until March
1989. He is a Director of Maryland
Mortgage Company and The Security
Title Guarantee Corporation of
Baltimore. He is the brother of
William C. Rogers, Jr., a director of
the Bank and the Company.
</TABLE>
5
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE IN 2002
<TABLE>
<CAPTION>
<S> <C>
STEVEN K. BREEDEN.......... Mr. Breeden, age 41, has served as a
director of Carrollton Bank, a
Maryland state chartered commercial
bank, and the principal subsidiary of
the Company (the "Bank") since June
1994, and of the Company since
October 1995. Mr. Breeden is
currently Vice President and
Secretary of Security Development
Corporation, a real estate
development company, a position he
has held for the past five years (2).
THELMA T. DALEY............. Dr. Daley, age 68, has served as a director
of the Bank since November 1995, and
of the Company since May 1998. Dr.
Daley retired as the Coordinator of
Counseling and Guidance for The
Baltimore County Board of Education.
HOWARD S. KLEIN............. Mr. Klein, age 40, has served as a
director of the Bank since March 1999
and of the Company since April 1999.
Mr. Klein has been Vice President and
General Counsel for a family-operated
chain of five full serve supermarkets
and related development and operating
companies since 1987.
LEO A. O'DEA............... Mr. O'Dea, age 69, has served as a
director of the Bank since 1983 and
of the Company since its inception in
1990. Mr. O'Dea was elected Chairman
of the Company in February 1994. He
was President of Hamilton & Spiegel,
Inc., a sheet metal contractor, from
1979 until his retirement in 1997.
(2)
</TABLE>
- -------------------------------------
(1) -- Member of the Audit Committee
(2) -- Member of the Compensation Committee
The Board of Directors of the Company met 9 times and the Board of Directors of
the Bank met 18 times during the year ended December 31, 1999. The Board of
Directors of the Bank meets twice a month. No director attended fewer than 75%
of the total number of meetings of both Boards and committees to which they were
assigned during the year ended December 31, 1999.
As of the date of this Proxy Statement, the Board of Directors does not have a
standing nominating committee.
The Audit Committee held 5 meetings during 1999. Its current members are Messrs.
Counselman, Hauswald and Quille. Only nonemployee directors are eligible to
serve on the
6
<PAGE>
Audit Committee. The duties of the Audit Committee include reviewing the annual
financial statements of the Company and the scope of the independent annual
audit and internal audits. It also reviews the independent accountant's letter
to management concerning the effectiveness of the Company's internal financial
and accounting controls and management's response to that letter. In addition,
the Committee reviews and recommends to the Board the firm to be engaged as the
Company's independent accountants. The Committee may also examine and consider
other matters relating to the financial affairs of the Company as it determines
appropriate.
The Compensation Committee met 2 times during 1999. Its current members are
Messrs. Breeden, Counselman, Hauswald, and O'Dea. The purpose of the
Compensation Committee is to review and approve major compensation and benefit
policies of the Company and the Bank. In addition, the committee recommends to
the Board the compensation to be paid to all officers, Senior Vice President and
above, of the Bank.
Directors who are not employees of the Bank receive a monthly fee of $900 for
Board meetings, and between $75 and $150 per committee meeting attended. The
Chairman of the Board of the Bank receives a monthly fee of $1,100. Directors do
not receive additional fees for their service as directors of the Company.
Employee directors are not compensated for attendance at Board meetings.
7
<PAGE>
OTHER EXECUTIVE OFFICERS AND DIRECTORS OF THE BANK
Certain information regarding directors and significant employees of the Bank
other than those previously mentioned is set forth below.
<TABLE>
<CAPTION>
<S> <C>
ROBERT A. ALTIERI.......... Mr. Altieri, age 38, has been Senior Vice
President - Lending of the Bank since
June 1994 and previously was Vice
President - Commercial Lending since
September 1991.
EDWARD R. BOOTEY........... Mr. Bootey, age 53, has been Senior Vice
President - Automation & Technology
since October, 1995, and was Senior
Vice President - Operations of the
Bank from June 1994 to October 1995.
Mr. Bootey previously served as Vice
President - Operations from January
1991. He served as Assistant Vice
President - Operations from December
1987 until January 1991.
RANDALL M. ROBEY...... Mr. Robey, age 42, has been Senior Vice President,
Chief Financial Officer and Treasurer
of the Bank since October 1999. Prior
to joining Carrollton Bank, Mr. Robey
was Vice President of Financial
Services of Mercantile Bank & Trust
in Baltimore, Maryland from June 1998
to October 1999, and prior to that
Senior Vice President and Chief
Financial Officer of Annapolis Bank &
Trust from March 1989 to June 1998.
GARY M. JEWELL.............. Mr. Jewell, age 53, has been Senior Vice
President and Retail Delivery Group
Manager since July 1998. He was
previously Senior Vice President
Electronic Banking from March 1996 to
July 1998. Prior to joining
Carrollton Bank, Mr. Jewell was
Director of Product Management and
Point of Sale Services for the MOST
EFT network in Reston, Virginia from
March 1995 to March 1996 and prior to
that Director/Manager of Merchant
Services for the Farmers and
Mechanics National Bank from 1993 to
March 1995.
</TABLE>
8
<PAGE>
Stock Performance Table
Carrollton Bancorp is required by the SEC to provide a five-year comparison of
the cumulative total stockholder return on our Common Stock compared with that
of a broad equity market index and either a published industry index or a
Carrollton Bancorp constructed peer group index.
The following chart compares the cumulative stockholder return on Carrollton
Bancorp Common Stock from December 31, 1994, to December 31, 1999, with the
cumulative total of the NASDAQ Composite (U.S.) and the NASDAQ Bank Indices. The
comparison assumes $100 was invested on December 31, 1994 in Carrollton Bancorp
Common Stock and in each of the foregoing indices. It also assumes reinvestment
of any dividends.
Carrollton Bancorp does not make, nor does it endorse, any predictions as to
future stock performance.
[GRAPH]
9
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 1999, certain information
concerning shares of the Common Stock of the Company beneficially owned by (i)
the chief executive officer of the Company; (ii) all directors and nominees for
directors of the Company and the Bank; (iii) all directors and officers of the
Company and the Bank as a group; and (iv) other significant shareholders.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner (12) Beneficial Ownership (1) Percent of Class (1)
<S> <C> <C>
Directors:
Dallas R. Arthur 3,024(2) *
Steven K. Breeden 5,820(3) *
Albert R. Counselman 30,602(4) *
Thelma T. Daley 110 *
John P. Hauswald 11,802(5) *
David P. Hessler 400 *
C. Edward Hoerichs 4,466 *
Howard S. Klein 3,400(6) *
Leo A. O'Dea 11,216(7) *
Allen Quille 3,890 *
John Paul Rogers 193,412(8) 6.91%
William C. Rogers, Jr. 257,372(8)(9)(10) 9.24%
All Directors and Executive
Officers of the Company as
A Group (17 persons) 529,350(11) 19.07%
OTHER SIGNIFICANT SHAREHOLDER:
Patricia A. Rogers 224,782 8.07%
</TABLE>
- -------------------------------------------------------------------------------
* Less than 1%
(1) Unless otherwise indicated, the named person has sole voting and investment
power with respect to all shares.
(2) Includes 1,678 shares owned jointly by Mr. Arthur and his wife. Excludes
976 shares owned by Mr. Arthur's wife.
- --------------------------------------------------------------------------------
10
<PAGE>
(3) Includes 2,698 shares owned jointly by Mr. Breeden and his wife.
(4) Excludes 1,000 shares owned by Mr. Counselman's wife.
(5) Includes 11,490 shares owned jointly by Mr. Hauswald and his wife. Excludes
10,538 shares owned by Mr. Hauswald's wife.
(6) Includes 400 shares owned jointly by Mr. Klein and his wife. Also includes
1,600 shares owned by Colgate Investments, LLP, of which Mr. Klein is a
shareholder and 600 shares Mr. Klein holds as trustee for minor children
under the Maryland Uniform Gift to Minors Act.
(7) Excludes 15,754 shares owned by Mr. O'Dea's wife.
(8) Includes 63,904 shares owned by The Security Title Guarantee Corporation of
Baltimore and 9,506 shares owned by Maryland Mortgage Company, of which
John Paul Rogers is a director, and of which William C. Rogers, Jr. is
Chairman and President, respectively, as well as a director.
(9) Includes 6,494 shares owned by the Moreland Memorial Park Cemetery, Inc.
11,548 shares owned by the Moreland Memorial Park Cemetery, Inc. Perpetual
Care Fund, 3,226 shares owned by the Moreland Memorial Park, Inc. Bronze
Perpetual Care Fund, and 32,414 shares owned by the Moreland Memorial Park,
Inc. Perpetual Care Trust Agreement for which William C. Rogers, Jr. serves
as a trustee.
(10) Includes 128,598 shares owned jointly by Mr. Rogers and his wife. Excludes
11,548 shares owned by Mr. Roger's wife.
(11) Includes 151,372 shares owned by Mrs. Rogers. Also includes 63,904 shares
owned by The Security Title Guarantee Corporation of Baltimore and 9,506
shares owned by Maryland Mortgage Company, of which Mrs. Rogers is a
principal shareholder.
(12) All directors, executive officers and other significant shareholders may be
contacted at the Company's corporate offices by addressing correspondence
to the appropriate person, care of Carrollton Bancorp, 344 North Charles
Street, Suite 300, Baltimore, Maryland 21201.
- --------------------------------------------------------------------------------
11
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth information with respect to the ownership of
shares of Common Stock of the Company by the only persons believed by management
to be the beneficial owners of more than five percent of the Company's
outstanding Common Stock. The information is based on the most recent Schedule
13G filed by such person with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
Name and Address of Beneficial Ownership Common Stock
of Beneficial Owner Outstanding
------------------- ----------------------- ---------------
<S> <C> <C>
John Paul Rogers 193,412(a) 6.91%
46 C Queen Anne Way
Chester, MD 21619
William C. Rogers, Jr. 257,372(b) 9.24%
6 South Calvert Street
Baltimore, MD 21201
Patricia A. Rogers 224,782(c) 8.10%
P.O. Box 246
Gibson Island, MD 21056
</TABLE>
(a) A Schedule 13G dated February 10, 2000 states that John Paul Rogers has
sole voting and dispositive power over 120,002 shares, and shared voting
and dispositive power over 73,410 shares.
(b) A Schedule 13G dated February 10, 2000 states that William C. Rogers, Jr.
has sole voting and dispositive power over 1,480 shares, and shared voting
and dispositive power over 255,892 shares.
(c) A Schedule 13G dated February 10, 2000 states that Patricia A. Rogers has
sole voting and dispositive power over 151,372 shares, and shared voting
and dispositive power over 73,410 shares.
12
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or allocated for services
rendered to the Company in all capacities during the years ended December 31,
1996, 1997 and 1998, 1999 to the chief executive officer of the Company. The
compensation of other members of executive management is not required to be
provided because the base compensation of each of such individuals does not
exceed $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Name and Principal Position Year Salary ($) Long-Term Incentive Bonus
Plan Stock Option ($)
Grants (Shares)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dallas R. Arthur, President 1999 $132,912 16,000 $7,500
and Chief Executive Officer 1998 $126,757 16,000 -0-
1997 $119,911 -0- -0-
1996 $109,140 -0- -0-
- --------------------------------------------------------------------------------------
</TABLE>
The Company has no employment agreements, termination of employment, or
change-in-control agreements or understandings with any of its directors,
executive officers or any other party whatsoever, except that the President of
Carrollton Mortgage Services, Inc., a subsidiary of the Bank, has an employment
contract that provides for a termination settlement of $50,000 if terminated by
the Bank.
LONG-TERM INCENTIVE PLAN
The 1998 Long-Term Incentive Plan which was approved at the 1998 Annual meeting
of Shareholders, authorizes the granting of Awards in the form of Options, Stock
Appreciation Rights, Restricted Stock, Performance Awards, Phantom Shares, Bonus
Shares or Cash Awards. Any executive or other employee of the Company, its
subsidiaries, affiliated entities and Non-employee Directors of the Company
shall be eligible to receive Awards under the Plan. Non-employee Directors of
subsidiaries or affiliated entities of the Company will not be eligible to
participate in the Plan.
The Plan provides for 200,000 shares of the Company's Common Stock to be issued
as Awards under the Plan, either directly or upon exercise of an option. The
Plan provides for appropriate adjustments in the number of Shares subject to the
Plan in the event of a stock dividend, stock split, reverse stock split or other
similar changes in the Company's Common Stock or in the event of a merger,
consolidation or certain other types of recapitalizations affecting the Company.
13
<PAGE>
OPTION GRANTS IN 1999
The following table contains information concerning the grant of stock options
under the Long-Term Incentive Plan to the Chief Executive Officer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Name Options % of Total Exerc Expirat Potential Realizable
Granted Options Granted ise or ion Value at Assumed annual
(Number of to Employees Base Date Rates of Stock
Shares) in year Price Appreciate for Option
Term
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5% 10%
- -----------------------------------------------------------------------------------------------------------
Dallas R. Arthur 16,000 31% $16.19 2009 $162,909 $412,815
- -----------------------------------------------------------------------------------------------------------
</TABLE>
A total of 59,400 incentive stock options were granted in 1999 under the 1998
Long-Term Incentive Plan to directors and employees. Of the total, 6,600
incentive stock options were granted to directors at an exercise price ranging
from $16.13 to $16.19. The options granted to directors vest over a three year
period and expire if not exercised in 2009. There were no grants in 1999 for
restricted stock, stock appreciation rights, performance grants, phantom shares,
bonus shares or cash awards.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the past year the Bank has had banking transactions in the ordinary
course of its business with: (i) its directors and nominees for directors; (ii)
its executive officers; (iii) its 5% or greater shareholders; (iv) members of
the immediate family of its directors, nominees for directors or executive
officers and 5% shareholders; and (v) the associates of such persons on
substantially the same terms, including interest rates, collateral, and
repayment terms on loans, as those prevailing at the same time for comparable
transactions with others. The extensions of credit by the Bank to these persons
have not and do not currently involve more than the normal risk of
collectibility or present other unfavorable features. At December 31, 1999, the
balance of loans outstanding to directors, executive officers, owners of 5% or
more of the outstanding Common Stock, and their associates, including loans
guaranteed by such persons, aggregated $2,699,906 which represented
approximately 9.0% of the Company's equity capital accounts.
William C. Rogers, Jr., a director of both the Company and the Bank, is a
partner of the law firm of Rogers, Moore and Rogers which performs legal
services for the Company and its subsidiaries. Management believes that the
terms of these transactions were at least as favorable to the Company as could
have been obtained elsewhere.
Albert R. Counselman, a director of both the Company and the Bank, is President
of Riggs, Counselman, Michaels & Downes, Inc., an insurance brokerage firm
through which the
14
<PAGE>
Company and the Bank place various insurance policies. The Company and the Bank
paid total premiums for insurance policies placed by Riggs, Counselman, Michaels
& Downes, Inc in 1999 of $126,252. Management believes that the terms of these
transactions were at least as favorable to the Company as could have been
obtained elsewhere.
15
<PAGE>
VOTING PROCEDURES
Each proposal submitted to the Company shareholders for a vote is deemed
approved if a majority of the shares of Common Stock of the Company present in
person or by proxy at a meeting at which a quorum is present votes in favor of
the proposal. The presence in person or by proxy of shareholders entitled to
cast a majority of all the votes entitled to be cast at the meeting constitutes
a quorum. A shareholder is entitled to one vote for each share owned.
Shareholder votes are tabulated by the Company's Registrar and Transfer Agent.
Proxies received by the Company, if such proxy is properly executed and
delivered, will be voted in accordance with the voting specifications made on
such Proxy. Proxies received by the Company on which no voting specification has
been made by the shareholder will be voted for all items discussed in the Proxy
Statement, in the manner stated on the proxy card. Shareholders who execute and
deliver proxies retain the right to revoke them by notice in writing delivered
to the Company Secretary at any time before such proxies are voted.
Under applicable Maryland corporate law and the Charter and By-Laws of the
Company, proxies received by the Company specifying an abstention as to any
proposal will cause the shares so represented to be counted toward a quorum, but
are not counted as favorable votes and, therefore, have the same effect as a
vote against the proposal. To the extent holders or brokers having the right to
vote shares do not attend the meeting or return a proxy, such shares will not
count toward a quorum and, if a quorum is otherwise achieved, will have no
effect on the vote of the proposals considered at the meeting.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no matters submitted to a vote of the Company's security holders
since its 1999 Annual Shareholder's Meeting held on April 27, 1999.
SHAREHOLDER PROPOSALS
Proposals of shareholders to be presented at the 2000 annual Meeting of the
Company must be received prior to November 17, 2000 in order to be included in
the proxy statement for such meeting. In order to curtail controversy as to
compliance with this requirement, shareholders are urged to submit proposals to
the Secretary of the Company by Certified Mail - Return Receipt Requested.
INDEPENDENT PUBLIC ACCOUNTANT
The Company's Board of Directors has selected the firm of Rowles & Company,
certified public accountants, as independent auditors for the Company for the
fiscal year 2000. Rowles & Company has served as independent auditors for the
Company since 1955. No qualified opinions
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have been issued during such engagement. A representative of Rowles & Company
will be present at the 2000 Annual Shareholders' Meeting, but has not been
invited to make a statement or be available to respond to questions.
ANNUAL REPORT
The Annual Report of the Company for the year 1999 is included herewith. Copies
of the report will also be available at the Annual Meeting on April 25, 2000.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
ON FORM 10-KSB FOR THE PERIOD ENDED DECEMBER 31, 1999, INCLUDING FINANCIAL
STATEMENTS AND THE SCHEDULES THERETO WILL BE FURNISHED BY MANAGEMENT TO ANY
BENEFICIAL OWNER OF ITS SECURITIES WITHOUT CHARGE UPON RECEIPT OF A WRITTEN
REQUEST FROM SUCH PERSON. REQUESTS IN WRITING SHOULD BE DIRECTED TO RANDALL M.
ROBEY, TREASURER, CARROLLTON BANCORP, 344 NORTH CHARLES STREET, SUITE 300,
BALTIMORE, MARYLAND 21201-4301. EACH REQUEST MUST SET FORTH A GOOD FAITH
REPRESENTATION THAT, AS OF MARCH 10, 2000, THE RECORD DATE FOR THE ANNUAL
MEETING, THE PERSON MAKING THE REQUEST WAS A BENEFICIAL OWNER OF SECURITIES
ENTITLED TO VOTE AT SUCH MEETING.
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OTHER MATTERS
The management of the Company knows of no matters to be presented for action at
the meeting other than those mentioned above; however, if any other matters
properly come before the meeting, it is intended that the persons named in the
accompanying proxy will vote on such other matters in accordance with their
judgement of the best interest of the Company.
By Order of the Board of Directors
D. Doreen Smith
Secretary
Baltimore, Maryland
March 15, 2000
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