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As filed with the Securities and Exchange Commission on
November 6, 1998
Registration No. 333-37033
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
ON FORM S-3
TO
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
_______________________________________
GLEN BURNIE BANCORP
___________________________________________________
(Exact name of registrant as specified in charter)
MARYLAND 52-1782444
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
101 CRAIN HIGHWAY, S.E.
GLEN BURNIE, MARYLAND 21061
(410) 766-3300
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
F. WILLIAM KUETHE, JR., PRESIDENT
GLEN BURNIE BANCORP
101 CRAIN HIGHWAY, S.E.
GLEN BURNIE, MARYLAND 21061
(410) 766-3300
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(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
JAMES C. STEWART, ESQUIRE
HOUSLEY KANTARIAN & BRONSTEIN, P.C.
1220 19TH STREET, N.W., SUITE 700
WASHINGTON, D.C. 20036
(202) 822-9611
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: From time to time as determined by market conditions,
after the effective date of this Registration Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. [ ]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of earlier effective registration statements
for the same offering. [ ] _________________________
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ] ___________________________________________
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]
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PROSPECTUS
GLEN BURNIE BANCORP
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
89,677 SHARES OF COMMON STOCK
STOCKHOLDER PURCHASE PLAN
120,000 SHARES OF COMMON STOCK
Glen Burnie Bancorp is offering existing stockholders
89,677 shares of its Common Stock pursuant to its Dividend
Reinvestment and Stock Purchase Plan and 120,000 shares of its
Common Stock pursuant to its Stockholder Purchase Plan. The
Plans offer stockholders a convenient way to acquire additional
shares of the Common Stock without paying the brokerage
commissions, service charges, fees or other expenses that
stockholders would otherwise be charged if they purchased the
Common Stock on the open market.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN. The
Dividend Reinvestment Plan offers stockholders the opportunity
to apply their cash dividends towards the purchase of whole or
fractional shares of Common Stock. Shares will automatically be
credited on each dividend payment date to the accounts of
stockholders who elect to participate in the Dividend
Reinvestment Plan. Shares of Common Stock issued under the
Dividend Reinvestment Plan will come from the Company's
authorized but unissued shares. The price per share of Common
Stock purchased from the Company pursuant to the Dividend
Reinvestment Plan will be based on the fair market value (less a
5% discount unless the Board of Directors determines otherwise).
No shares, however may be issued for less than their par value
of $10.00 per share.
STOCKHOLDER PURCHASE PLAN. Under the Purchase Plan,
stockholders of record may receive an option each quarter to
purchase their pro rata portion of a new issuance of shares of
the Common Stock and may be given the opportunity to purchase
unsubscribed shares as well. The number of shares to be issued
in any quarter will be determined by a Committee of the Board of
Directors. The aggregate number of shares that may be issued
under the Plan may not exceed 120,000 shares (subject to
adjustment for stock splits and dividends). The purchase price
for all shares to be issued pursuant to such options will be the
fair market value of the Common Stock as determined by the
latest sale completed by the principal market maker for the
Common Stock, Legg Mason Walker Wood, Inc., prior to the date of
grant.
There is currently not an active trading market for the
Common Stock. Accordingly, stockholders should only consider an
additional investment in the Common Stock through the Plans if
they have a long-term investment intent.
The Company recommends that you retain this Prospectus for
future reference.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 FOR CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY STOCKHOLDERS INTERESTED
IN ACQUIRING SHARES PURSUANT TO THE PLANS.
THESE SECURITIES ARE NOT BANK DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER STATE OR FEDERAL GOVERNMENT AGENCY
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR
ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OR PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________ ___, 1998<PAGE>
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THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY. IF ANY
SUCH INFORMATION OR REPRESENTATION IS GIVEN OR MADE, IT MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THE BANK SINCE ANY OF THE DATES AS OF
WHICH INFORMATION IS FURNISHED HEREIN OR SINCE THE DATE HEREOF.
TABLE OF CONTENTS
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . i
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . 1
THE PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . 4
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . 7
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . 7
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 7
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . 8
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . 8
DOCUMENTS INCORPORATED BY REFERENCE. . . . . . . . . . . . . 8
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PROSPECTUS SUMMARY
THE COMPANY
Glen Burnie Bancorp is a bank holding company organized in
1990 to hold all the outstanding shares of capital stock of The
Bank of Glen Burnie (the "Bank"), a Maryland commercial bank
organized in 1949. The Bank serves Anne Arundel County and
surrounding areas from its main office in Glen Burnie, Maryland
and branch offices in Odenton, Riviera Beach, Crownsville,
Ferndale and Severn, Maryland. The Bank conducts a commercial
and retail banking business as authorized by the banking
statutes of the State of Maryland, including taking demand and
time deposits, and the making of loans to individuals,
associations, partnerships and corporations. Real estate
financing consists of residential first and second mortgage
loans, home equity lines of credit and commercial mortgage
loans. Commercial lending consists of both secured and
unsecured loans. The Bank's deposits are insured up to
applicable limits by the Federal Deposit Insurance Corporation.
The mailing address of the Company's principal executive
office is 101 Crain Highway, S.E., P.O. Box 70, Glen Burnie,
Maryland 21060 and its telephone number is (410) 766-3300.
THE DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
PURPOSE. The Dividend Reinvestment Plan offers
stockholders of record a simple and convenient way to invest
their cash dividends in additional shares of the Common Stock
without paying brokerage commissions, service charges and other
expenses.
HOW TO PARTICIPATE. Any stockholder of record can
participate in the Dividend Reinvestment Plan by signing and
returning a Stockholder Authorization Form. Stockholders
holding their shares in "street name" through brokers are not
eligible to participate in the Dividend Reinvestment Plan.
Stockholders may enroll at any time. If a Stockholder
Authorization Form is received prior to the record date for a
dividend, that dividend will be reinvested. No fees or
transactional costs are charged for participating in the
Dividend Reinvestment Plan.
WHAT WILL BE THE PURCHASE PRICE. The purchase price for
Common Stock acquired through the Dividend Reinvestment Plan
will be the fair market value of the Common Stock (defined as
the price at which the latest share sale was consummated by Legg
Mason prior to any dividend declaration date) less a 5% discount
unless the Board of Directors determines otherwise. In no
event, however, may shares be purchased at less than their par
value of $10.00 per share.
ADMINISTRATION OF THE DIVIDEND REINVESTMENT PLAN. The
Dividend Reinvestment Plan is administered by the Company. All
correspondence relating to the Dividend Reinvestment Plan should
be addressed to:
President
Glen Burnie Bancorp
101 Crain Highway, S.E.
P.O. Box 70
Glen Burnie, Maryland 21060
(410) 766-3300
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THE STOCKHOLDER PURCHASE PLAN
PURPOSE. The Purchase Plan provides another simple and
convenient way for stockholders to add to their holdings of the
Common Stock without paying the brokerage and other charges that
normally apply to open market transactions. In addition, the
Purchase Plan allows the Company to increase its capital for use
in its business.
HOW TO PARTICIPATE. Each quarter, stockholders of record
will be notified whether they will have the option of purchasing
a pro rata portion of a new issuance of shares. The option
price must be paid in full at the time the option is exercised.
Options must be exercised within the expiration date which will
be no later than three months after the date of grant. No fees
or transactional costs are charged for participating in the
Purchase Plan.
HOW MANY SHARES MAY BE PURCHASED. The number of shares to
be issued each quarter will be determined by the Board of
Directors. Each stockholder will have the right to purchase
their pro rata portion of such shares based on the ratio of the
number of shares owned of record as of the date of the option
grant compared to the total number of shares of Common Stock
outstanding on that date. In its discretion, the Board may
allow stockholders to purchase unsubscribed shares at the same
price per share on such other terms or conditions as the Board
may prescribe. In the event of an oversubscription, such
unsubscribed shares shall be allocated among subscribers on such
basis as the Board may determine.
WHAT WILL BE THE PURCHASE PRICE. The purchase price for
shares under the Purchase Plan will be their fair market value,
as determined by the latest sale consummated by Legg Mason prior
to the date on which the option is granted. Shares, however,
will not be issued for less than their par value of $10.00 per
share.
ADMINISTRATION OF THE PURCHASE PLAN. The Purchase Plan
will be administered by a committee of at least three directors
including the Chairman of the Board, the Chief Executive Officer
and one other director to be appointed annually by the Board of
Directors. All correspondence relating to the Stock Purchase
Plan should be addressed to:
President
Glen Burnie Bancorp
101 Crain Highway, S.E.
P.O. Box 70
Glen Burnie, Maryland 21060
(410) 766-3300
RISK FACTORS
See "Risk Factors" beginning on page 1 for a discussion of
certain factors that should be considered by prospective
investors, including: dependence on real estate; localized
business; interest rate risk; substantial competition in the
banking industry; risk of non-compliance with regulatory
requirements; restrictions on ability to raise capital; limited
market for the common stock; dividend payment risks; pricing
risks in the Plans; potential dilution; and control of the
Company.
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RISK FACTORS
In addition to the information discussed elsewhere in this
Prospectus (or incorporated by reference in the Prospectus),
investors should carefully consider the following information in
deciding whether to participate in the Plans.
DEPENDENCE ON REAL ESTATE; LOCALIZED BUSINESS
The Bank's primary lending focus historically has been
real estate mortgage and commercial lending, and, to a lesser
extent, construction lending. At June 30, 1998, residential and
commercial real estate mortgage loans and construction loans and
land development loans comprised approximately 65% of the Bank's
loan portfolio. The majority of this portfolio is made up of
loans secured by commercial real estate and construction and
land development loans which comprised 37% of the loan
portfolio. This real estate dependence may increase the risk of
loss in the Bank's loan portfolio, especially if there is a
general decline in real estate values in the areas where
properties securing the Bank's loans are located. Approximately
72% of the Bank's loans made during 1997, representing 65% in
outstanding principal amount, were to borrowers located in
northern Anne Arundel County, Maryland at the time of loan
origination. Northern Anne Arundel County is a mature suburb of
Baltimore characterized by modest population growth and an aging
population. Should the economy in this area suffer any
adversity, or deteriorate for any reason, the quality of the
Bank's loans could decline. Adverse developments in the Bank's
market area could particularly affect the performance of the
Bank's portfolio of commercial real estate and construction and
land development loans for which repayment and the value of the
collateral are dependent on the successful operation of the
borrower's business.
INTEREST RATE RISK
The operations of the Bank are greatly influenced by
general economic conditions and by the monetary and fiscal
policies of the Federal government. The interest rates of paid
on competing investments and general market rates of interest
influence the Bank's deposit flows and cost of funds. Lending
activities are affected by the demand for loans, which in turn
is affected by the interest rates charged and by other factors
affecting the availability of funds.
The profitability of the Bank depends on its net interest
income, which is the difference between the interest income
received from its interest-earning assets and the interest
expense paid on its interest-bearing liabilities. Increases in
the level of interest rates may reduce the amount of loans
originated by the Bank and, thus, the amount of loan and
commitment fees, as well as the value of the Bank's investment
securities and other interest-earning assets. Fluctuations in
interest rates also can result in disintermediation, which is
the flow of funds away from depository institutions into direct
investments, such as corporate securities and other investment
vehicles which, because of the absence of Federal deposit
insurance, generally pay higher rates of return than depository
institutions.
Changes in interest rates will also affect the value of
the Bank's investment securities portfolio designated as
available for sale. Generally, an increase in interest rates
would result in a decline in the value of investment securities
available for sale, which would result in a corresponding
adjustment in stockholders' equity. Therefore, the Bank's and
the Company's stockholders' equity could change based on
fluctuations in interest rates and in the value of investment
securities held for sale.
SUBSTANTIAL COMPETITION IN THE BANKING INDUSTRY
The Bank faces substantial competition for deposits and
loans from other financial institutions, including many which
have substantially greater resources, name recognition and
market presence than the Bank. This competition comes not only
from local institutions but also from out-of-state financial
intermediaries which have opened loan production offices or
which solicit deposits in its market area. Many of the
financial intermediaries operating in the Bank's market area
offer certain services which the Bank does not offer directly.
Additionally, banks with larger capitalization and financial
intermediaries not subject to bank regulatory restrictions have
larger lending limits and are
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thereby able to serve the credit needs of larger customers.
Competitors of the Bank include commercial banks, savings
institutions, credit unions, thrift and loans, insurance
companies, mortgage companies, money market and mutual funds and
other institutions which offer loans and investment products.
Historically, the Bank has sought to compete against larger
institutions on the basis of its local ownership and orientation
which the Bank believes has made it more responsive to its
customers. The Bank, however, also encounters significant
competition from other locally based community banks and
financial institutions who compete on the same basis, including
a bank which recently has been established near its headquarters
by former directors and officers of the Bank and which may be
expected to target the Bank's customer base.
RISK OF NON-COMPLIANCE WITH REGULATORY REQUIREMENTS
Due to the nature of their business, both the Company and
the Bank are subject to extensive legislation, regulation and
supervision. The Federal Reserve Board and the FDIC have
extensive capital requirements applicable to the Company and the
Bank, respectively. The type, location and manner in which they
may conduct business is extensively regulated and examined by
the Federal Reserve Board, the FDIC and the Commissioner.
While the Company and the Bank believe they are in
substantial compliance with all applicable Federal and state
regulations, there can be no assurance that they will continue
to satisfy minimum capital or other Federal or state banking
requirements. Should they fail to comply with such
requirements, enforcement actions may include the issuance of
formal and informal agreements, the issuance of directives to
increase capital, the issuance of removal and prohibition orders
against institution-affiliated parties, the imposition of
restrictions and sanctions under the prompt corrective action
provisions of the FDIC Improvement Act, the imposition of civil
money penalties, the issuance of a cease-and-desist order that
can be judicially enforced, the termination of insurance of
deposits, and the imposition of a conservator or receiver.
RESTRICTIONS ON ABILITY TO RAISE CAPITAL
With certain limited exceptions, the Company's
stockholders generally have preemptive rights to subscribe to
any and all issuances of the Common Stock, on a proportionate
basis and in an amount equal to the ratio that each individual
stockholder's total number of shares bears to the total number
of shares of Common Stock outstanding. As a result of these
pre-emptive rights, the Company generally may not sell shares of
Common Stock without first offering them to the holders of the
Common Stock. Such a rights could limit the Company's ability
to raise capital in the future.
LIMITED MARKET FOR THE COMMON STOCK
The Common Stock is not listed on any stock exchange or
traded in the Nasdaq Stock Market. Although trading information
for the Common Stock is available on the OTC Bulletin Board,
there is limited trading activity in the Common Stock.
Accordingly, stockholders who acquire shares of the Common Stock
through the Plans may encounter difficulty in selling such
shares on the open market. The absence of an active and liquid
trading market for the Common Stock may also have an impact on
the prices which investors are willing to pay for the Common
Stock. Stockholders should only consider an additional
investment in the Common Stock pursuant to the Plans if they
have a long-term investment intent.
DIVIDEND PAYMENT RISKS
The Company intends to pay dividends equal to forty
percent (40%) of its profits for each quarter. The Company's
ability to pay dividends to stockholders depends on its ability
to receive dividends from the Bank. Payment of dividends by the
Bank to the Company and by the Company to its stockholders,
however, is subject to their respective financial conditions and
to regulation. Federal and state banking regulations prohibit
dividend payments unless the Company and the Bank have
sufficient net retained earnings and capital as determined by
the regulators. The Company
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does not believe that these restrictions will materially limit
its ability to pay dividends. There is no assurance that either
the Bank or the Company will be legally or financially able to
pay any specified amount of dividends in the future.
PRICING RISKS IN THE PLANS
DIVIDEND REINVESTMENT PLAN. The Company cannot assure
investors that the market price of the Common Stock will stay at
the level at which it is trading at the time the dividend
reinvestment price is calculated pursuant to the Dividend
Reinvestment Plan. Under the Dividend Reinvestment Plan, the
value of the shares to be issued in lieu of cash dividends is
determined based on the higher of (a) ninety-five percent (95%)
of the market price at the time a dividend is declared or (b)
the stock's par value ($10.00 per share). By the time the
dividend is actually paid, the market price at which the
Company's stock is selling may have declined from the dividend
reinvestment price. Thus, the number of shares to be issued may
be less than the number that would have been issuable had such
number been based on the sales price of the shares at the time
the dividend is paid and the market value of the shares actually
issued may be less than the amount of cash that would have been
received had the dividend been paid in cash. See "The Plans --
Dividend Reinvestment and Stock Purchase Plan."
PURCHASE PLAN. The Company cannot assure investors that
shares purchased pursuant to options issued under the Purchase
Plan will continue to trade at their purchase price. Further
there can be no assurance that the market price of the Common
Stock will not decline in the period between the date an option
is exercised and the date shares are issued to a stockholder.
Accordingly, there can be no assurance that price paid by stock
holding to acquire shares through the Purchase Plan will be less
than the price at which shares could have been acquired on the
open market.
POTENTIAL DILUTION
Stockholders who do not elect to participate in the Plans
may suffer substantial dilution in their voting rights and their
proportional interest in any future net earnings of the Company.
CONTROL OF THE COMPANY
Under the Company's Articles of Incorporation, the
affirmative vote of 80% of the outstanding shares is required
for the approval of any merger, consolidation or share exchange
involving the Company. In addition, amendments to Company's
Articles of Incorporation and Bylaws require an 80% vote. As a
result, the holders of 20% of the Company's outstanding Common
Stock would be able to prevent most business combinations
involving the Company even if the proposed business combination
was favored by a majority of the shares outstanding. In
addition, such holders could prevent any amendment to the
Articles of Incorporation that might lower this voting
requirement. The Board of Directors currently controls over 20%
of the outstanding stock. Accordingly, the Board of Directors
voting together as a group would be in a position to prevent
most acquisitions of the Company. In addition, the Maryland
General Corporation Law includes certain restrictions on
business combinations with stockholders who have not been
approved by the Board of Directors in advance and limits the
voting rights of larger stockholders unless such voting rights
have been approved by a vote of the stockholders. These
provisions may have the effect of discouraging or preventing a
future takeover attempt in which stockholders might otherwise
receive a premium for their shares over then current market
prices.
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THE PLANS
Following is a general summary of the Plans. Periodic
reports are generally not furnished under the Plans although the
Company makes annual reports available to its stockholders which
may contain some information about the Plans. See "Available
Information." Copies of the Plans will be sent to stockholders
upon written request to the Treasurer of Glen Burnie Bancorp,
101 Crain Highway, S.E., P.O. Box 70, Glen Burnie, Maryland
21060-0070.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Under the Dividend Reinvestment Plan, the Company offers
its stockholders of record the opportunity to receive additional
shares of the Common Stock in lieu of cash dividends. Any
record stockholder who elects to participate in the Dividend
Reinvestment Plan will receive, if and when any dividend is
declared, shares of Common Stock rather than cash on the
dividend payment date. The number of shares he will receive
will equal the number obtained by dividing the amount that he
would have been paid in cash by a deemed per share "Purchase
Price" which is equal to the per share price paid in the latest
sale consummated by Legg Mason prior to the dividend declaration
date less a 5% discount unless the Board of Directors determines
otherwise. In no event, however, will the Purchase Price be
less than the par value per share of $10.00.
Once an election to participate is made, all dividends
thereafter payable to the electing stockholder will be paid in
Common Stock until such time as (i) the stockholder advises the
Company in writing that he no longer wishes to participate in
the Dividend Reinvestment Plan, (ii) the Company receives
written notice of the stockholder's death or adjudicated
incapacity, or (iii) the stockholder transfers record ownership
of the shares dividends with respect to which are subject to
payment in stock under the Plan.
The Company will maintain an account reflecting stock
dividends issued under the Dividend Reinvestment Plan. Shares
held in a participant's account are voted directly by the
participant. Certificates for stock dividends issued under the
Dividend Reinvestment Plan will only be provided upon (i)
request by a participating stockholder, (ii) withdrawal by a
participating stockholder from the Dividend Reinvestment Plan,
or (iii) termination of the Dividend Reinvestment Plan by the
Company. Should participation in the Dividend Reinvestment Plan
be withdrawn or terminated, cash will be issued in lieu of
fractional shares. Certificates are generally issued within a
week.
Stockholders holding Common Stock in "street name" through
a broker are not eligible to participate in the Dividend
Reinvestment Plan with respect to those shares. Any such holder
who desires to participate in the Dividend Reinvestment Plan
should contact their broker and arrange to have such shares
registered in their name as a record holder.
Stockholders who reside in jurisdictions in which it is
unlawful for the Company to permit their participation are not
eligible to participate in the Dividend Reinvestment Plan.
The Company also reserves the right to exclude a stockholder who
resides in a foreign country or in a jurisdiction which requires
registration or qualification of the Common Stock or of the
Company's directors, officers or other employees as agents in
connection with sales pursuant to the Dividend Reinvestment
Plan.
The Board of Directors may amend, modify or suspend the
Dividend Reinvestment Plan at any time and from time to time but
the Dividend Reinvestment Plan may not be permanently terminated
unless the Company's stockholders elect to terminate it. The
Company's stockholders have approved the Dividend Reinvestment
Plan.
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As of the date of this Prospectus, a total of 26,308
shares of Common Stock previously have been issued under the
Dividend Reinvestment Plan. An additional 89,677 shares are
reserved for issuance under the Dividend Reinvestment Plan.
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TAX CONSEQUENCES. The following discussion summarizes
certain material U.S. Federal income tax consequences for U.S.
taxpayers participating in the Dividend Reinvestment Plan. The
discussion is based upon provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), its legislative history,
judicial authority, current administrative rulings and practice,
and existing and proposed Treasury Regulations, all as in effect
and existing on the date hereof, and all of which are subject to
change, perhaps with retroactive effect. This discussion does
not purport to deal with all aspects of U.S. Federal income
taxation that might be relevant to particular participants in
light of their personal circumstances or status, nor does it
discuss state, local or foreign income tax consequences.
THEREFORE, EACH STOCKHOLDER IS STRONGLY URGED TO CONSULT WITH
HIS OWN TAX ADVISORS WITH RESPECT TO THOSE MATTERS.
A participant who chooses to receive a distribution of
additional shares of Common Stock in lieu of cash under the
provisions of the Dividend Reinvestment Plan will be treated for
U.S. Federal income tax purposes as having received a taxable
dividend to the extent such distribution is treated as made from
the Company's current and accumulated earnings and profits, in
an amount equal to the "Purchase Price" (as determined under the
Dividend Reinvestment Plan) of all full and fractional shares
credited to the participant's account, and otherwise as a non-
taxable return of capital to the extent of such participant's
tax basis in his shares of Common Stock (with a corresponding
reduction in his tax basis in such Common Stock) and thereafter
as capital gain.
The participant's tax basis in the shares credited under
the Dividend Reinvestment Plan will be an amount equal to the
"Purchase Price" of such shares (as determined under the
Dividend Reinvestment Plan). The holding period for shares
acquired through the Dividend Reinvestment Plan will begin on
the day after the dividend payment date.
Following termination of participation in the Dividend
Reinvestment Plan and receipt by the participant of shares of
Common Stock previously held by the Dividend Reinvestment Plan
administrator, a participant will realize gain or loss upon
receipt of a cash payment for any fractional share interests
credited to the participant's account. The amount of any such
gain or loss will be the difference between the cash payment and
the participant's tax basis in such fractional share interests.
The tax discussion as set forth above is for general
information purposes only. Each stockholder considering
participation in the Dividend Reinvestment Plan is urged to
consult his own tax and financial advisors as to any U.S.
Federal, state and other tax consequences of participating in
the Dividend Reinvestment Plan based upon his particular facts
and circumstances.
STOCKHOLDER PURCHASE PLAN
Pursuant to the Purchase Plan, stockholders of record will
be granted an option (an "Option") each quarter to purchase
newly issued shares of the Common Stock. The number of shares
that may be purchased pursuant to Options shall be determined by
the Board. Each Option will entitle the stockholder to purchase
one share. Options will be granted in proportion to
stockholders' record share holdings as of the date of grant at a
per share price (the "Purchase Price") equal to the latest per
share price reported for a sale of the Common Stock by Legg
Mason prior to the date of grant. Options may be exercised in
full or partially at the election of the stockholder. Options
may only be exercised by returning the option exercise form and
paying the Purchase Price in full prior to the expiration date
for the Option which may not be later than three months after
the date of grant. Once an Option has been exercised, the
exercise is irrevocable. Shares will be issued to persons
exercising Options as soon as practicable after receipt of a
properly completed option exercise form and payment of the
Purchase Price in full. Shares may be issued in either
certificated or uncertificated form at the election of the
stockholder.
Stockholders will be notified on a quarterly basis in
writing that they have the option to purchase Common Stock.
Stockholders holding shares for the account of others, such as
banks, brokers, trustees and depositories, should contact the
beneficial owners of those securities to ascertain the
intentions of those beneficial owners with respect to
5<PAGE>
<PAGE>
the Options. Persons beneficially owning Common Stock held in
brokerage accounts or which is otherwise held on their behalf by
a nominee should contact their broker or nominee to exercise
subscription rights on their behalf.
The total number of shares that may be issued under the
Purchase Plan shall not exceed 120,000 shares subject to
adjustment for stock splits and stock dividends subsequent to
the date the Purchase Plan is adopted. The number of shares
subject to the Purchase Plan has been adjusted for the six-for-
five stock split to be effected through a stock dividend payable
January 10, 1998 to stockholders of record on January 3, 1998.
Shares optioned and not exercised shall continue to be available
for inclusion in subsequent Option grants provided that, in its
discretion, the Board of Directors may give stockholders the
opportunity to purchase unsubscribed optioned shares at the
Purchase Price on such other terms and conditions as the Board
of Directors may determine. Purchase orders for unsubscribed
shares will not be filled until after the expiration date for
the Options. In the event of an oversubscription, such
unsubscribed shares shall be allocated among subscribers on such
basis as the Board of Directors may determine. The Board of
Directors reserves the right to allocate unsubscribed shares on
any basis it deems appropriate including, but not limited to,
the order in which orders were received, the relative size of
orders, the number of shares held by subscribers or on any other
basis in its sole discretion.
Options are not transferable except upon death. Holders
of Options do not receive any rights or benefits of stockholders
with respect to the underlying Common Stock until the Options
are fully exercised and certificates evidencing the Common Stock
are issued.
Options are only exercisable during a stockholder's
lifetime by the stockholder. In the event a stockholder dies
without having fully exercised their Options, the stockholder's
executors or administrators shall have the right to exercise
such Options during their remaining term to the same extent that
the stockholder was entitled to exercise the Option.
The Company will make reasonable efforts to comply with
the securities laws of all states in which stockholders reside.
The Board of Directors reserves the right not to issue Options
to stockholders residing in a foreign country or in a
jurisdiction in which the granting of Options or the offer or
sale of the Common Stock would be unlawful or in which the
Company or its directors, officers or employees would be
required to register as a broker, dealer or selling agent.
The Purchase Plan will be administered by a Committee made
up of the Company's Chairman of the Board, Chief Executive
Officer and another director, who is appointed by the Company's
Board of Directors annually. All questions concerning the
timeliness and validity of Option exercises and the eligibility
of stockholders for Options will be determined by the Committee
whose determinations will be final and binding on all parties.
TAX CONSEQUENCES. The following discussion summarizes
certain material U.S. Federal income tax consequences for U.S.
taxpayers upon the receipt, disposition, exercise or lapse of
Options. The discussion is based upon provisions of the Code,
its legislative history, judicial authority, current
administrative rulings and practice, and existing and proposed
Treasury regulations, all as in effect and existing on the date
hereof, and all of which are subject to change, perhaps with
retroactive effect. This discussion assumes that such Options,
and the Common Stock acquired upon exercise of the Options, will
be held as capital assets (as defined in Section 1221 of the
Code) by the holders thereof. This discussion does not purport
to deal with all aspects of U.S. Federal income taxation that
might be relevant to particular holders in light of their
personal circumstances or status, nor does it discuss state,
local or foreign income tax consequences. EACH STOCKHOLDER IS
STRONGLY URGED TO CONSULT WITH HIS OWN TAX ADVISORS WITH RESPECT
TO THESE MATTERS.
Under Section 305 of the Code, a stockholder's receipt of
Options pursuant to the Purchase Plan will not be subject to
U.S. Federal income tax. A stockholder's basis in the Options
will be treated as zero so long as either (1) both (a) the value
of the Options at the time of receipt is less than 15% of the
value of the Common Stock in respect of which the Options were
distributed (which the Company expects to be the case) and (b)
such stockholder does not otherwise
6<PAGE>
<PAGE>
elect to allocate his basis in such Common Stock among such
Common Stock and the Options in accordance with Section 307(a)
of the Code, or (2) such Options are allowed to lapse.
No gain or loss will be recognized for U.S. Federal income
tax purposes by holders of the Options upon the exercise of the
Option and acquisition of the Common Stock of the Company. A
holder's tax basis in the Common Stock received on exercise of
the Options will equal the sum of his tax basis, if any, in the
Options plus the exercise price paid. The holding period of the
Common Stock received on the exercise of the Options will
commence on the date of exercise and will not include the
holding period of the Options.
If Options acquired pursuant to the Purchase Plan are not
exercised and are allowed to expire, no gain or loss will be
recognized by the holder of such Options.
CERTAIN RESALE RESTRICTIONS
Shares acquired by affiliates of the Company pursuant to
the Plans will, be subject to certain resale restrictions. Rule
144 imposes a volume limit on the amount of securities which
each affiliate of an issuer, as well as each holder of
"restricted" securities, may sell during any three-month period
and limits on the manner in which such sales may be made.
"Restricted" shares are shares which have not been registered
under the Securities Act of 1933 in reliance upon an exemption
which restricts their resale. "Restricted" securities may only
be sold if they are subsequently registered for resale or if
resale is authorized under an applicable rule such as Rule 144.
USE OF PROCEEDS
To the extent stockholders participate in the Dividend
Reinvestment Plan and receive dividends in stock rather than
cash, the cash savings to the Company will increase its working
capital. The proceeds from the sale of Common Stock under the
Purchase Plan will also increase the Company's working capital.
The Company believes that it will benefit from investment by
stockholders on a continuing basis. Such investment should
assist it and the Bank to maintain and expand their operations
and business activities.
PLAN OF DISTRIBUTION
The Company will not engage any outside broker-dealers in
connection with the sale of shares of the Common Stock pursuant
to the Plans. Certain directors and executive officers of
the Company will assist the Company in the administration of the
Plans. None of such directors and executive officers will
receive compensation for such services. None of such directors
and executive officers are registered as securities brokers or
dealers under federal or applicable state securities laws, nor
are any of such persons affiliated with any broker or dealer.
Because none of such persons are in the business of either
effecting securities transactions for others or buying and
selling securities for their account, they are not required to
register as broker or dealers under the federal securities laws.
In addition, the proposed activities of such directors and
executive officers are exempted from registration pursuant to a
specific safe-harbor provision under Rule 3a4-1 under the 1934
Act. Substantially similar exemptions from registration are
available under applicable state securities laws.
INDEMNIFICATION
Under the Company's Articles of Incorporation, the Company
shall indemnify a present or former director or officer of the
company in connection with a proceeding to the fullest extent
permitted by Section 2-418 of the Maryland General Corporation
Law. Such section provides that a Maryland corporation may
indemnify any director or officer made a party to any civil,
criminal, administrative or investigative proceeding by reason
of serving in such
7<PAGE>
<PAGE>
capacity unless it is established that (a) the act or omission
of such person was material to the matter giving rise
to the proceeding and either was committed in bad faith or was
the result of active and deliberate dishonesty, (b) the person
actually received an improper personal benefit, or (c) in the
case of a criminal proceeding, the person had reasonable cause
to believe the act or omission was unlawful. The
indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses (including attorneys' fees)
actually incurred in connection with the proceeding. The
Company has been advised that, insofar as indemnification for
liabilities under the Securities Act of 1933 (the "Act") may be
permitted under these provisions, it is the position of the
Securities and Exchange Commission (the "Commission") that such
indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
EXPERTS
The Company's Consolidated Financial Statements at and for
the years ended December 31, 1997 and 1996 that are incorporated
into this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 were
audited by Trice & Geary LLC, independent auditors, as set forth
in their report thereon, and are included in reliance upon such
report given upon the authority of such firm as experts in
accounting and auditing. The Consolidated Financial Statements
of the Company at December 31, 1995 and for the year then ended
have been audited by Rowles & Company, LLP, independent
auditors, as set forth in their report therein appearing
elsewhere herein, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting
and auditing.
LEGAL MATTERS
The legality of the Common Stock offered hereby has been
passed upon for the Company by Housley Kantarian & Bronstein,
P.C., Washington, D.C.
AVAILABLE INFORMATION
The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and accordingly files reports and other
information with the Securities and Exchange Commission (the
"Commission"). These reports and other information can be
inspected and copied at the Commission's public reference
facilities in Washington, D.C., and at 7 World Trade Center,
Suite 1300, New York, NY 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, IL 60661.
Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. You may obtain
information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330. The Commission
maintains a Web site that contains reports and other information
regarding the Company and other registrants that file
electronically with the Commission: The Commission's Website
address is http://www.sec.gov. The Company maintains a Website
at http://www.thebankofglenburnie.com.
Since its inception the Company has and intends to
continue to make available to its stockholders annual reports
containing financial information that has been examined and
reported upon, with an opinion expressed by, an independent firm
of certified public accountants.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of the Company which have been
previously filed with the Commission are incorporated by
reference in this Prospectus:
(a) the Company's Annual Report on Form 10-K for the
Fiscal Year Ended December 31, 1997;
8<PAGE>
<PAGE>
(b) the Company's Quarterly Reports on Form 10-Q for the
Quarters Ended March 31, 1998 and June 30, 1998;
(c) the description of the Company's Common Stock
contained in its Form 8-A, dated March 31, 1998; and
(d) the Company's Current Reports on Form 8-K dated
March 2, 1998 and June 17, 1998.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of any
offering of securities made by this Prospectus shall be deemed
to be incorporated by reference into this Prospectus and to be a
part hereof from the respective dates of filing such documents.
Any statement contained herein or in a document all or part of
which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to
whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the foregoing
documents incorporated by reference (other than exhibits to such
documents which are not specifically incorporated by reference
in such documents). Requests for such copies should be directed
to Glen Burnie Bancorp, Corporate Secretary, 101 Crain Highway,
S.E., P.O. Box 70, Glen Burnie, Maryland 21060.
9<PAGE>
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and
distribution of the securities to be registered are as follows:
SEC registration fees $ 1,458
Blue Sky fees and expenses 3,785
Legal fees and expenses 60,000
Printing and Engraving 7,500
Accounting fees and expenses 7,500
Miscellaneous 2,500
-------
Total $82,743
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation provide that all
current and former directors and officers are entitled to
receive indemnification in connection with any proceeding to the
fullest extent permitted by Section 2-418 of the Corporations
and Associations Article of the Annotated Code of Maryland.
Such section provides that a corporation may indemnify any
director or officer made a party to any civil, criminal,
administrative or investigative proceeding by reason of serving
in such capacity unless it is established that (a) the act or
omission of such person was material to the matter giving rise
to the proceeding and either was committed in bad faith or was
the result of active and deliberate dishonesty, (b) the person
actually received an improper personal benefit, or (c) in the
case of a criminal proceeding, the person had reasonable cause
to believe the act or omission was unlawful. The
indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses (including attorneys' fees)
actually incurred in connection with the proceeding. However,
if the proceeding was by or in the right of the corporation,
indemnification may not be made if the person is adjudged to be
liable to the corporation. The corporation must indemnify
directors and officers for expenses incurred in contesting any
such proceeding if such persons are successful on the merits,
unless the corporation's articles of incorporation limit such
indemnification (the Company's Articles do not). Determination
that the indemnification is proper and the amount to be paid in
indemnification is to be made by a majority vote of a quorum of
disinterested directors (or a committee of disinterested
directors), by special legal counsel chosen by disinterested
directors (or a committee of disinterested directors) or by a
majority vote of disinterested stockholders. A corporation may
purchase and maintain insurance on behalf of any director or
officer against any liability asserted against and incurred by
such person in any such capacity or arising out of such person's
position whether or not the corporation would have the power to
indemnify against such liability under Maryland law. A
corporation must report any indemnification or advance of
expenses to a director or officer arising out of a proceeding by
or in the right of the corporation to the stockholders of the
corporation.
The Company maintains director and officer liability
insurance. The scope of such insurance is essentially the same
as the indemnification provisions outlined above.
II-1<PAGE>
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibit List
------------
* 4.1 Articles of Incorporation. Incorporated
herein by reference to Exhibit 3.1 to the
Annual Report on Form 10-K of Glen Burnie
Bancorp for its Fiscal Year Ended December 31,
1995, (the "1995 Form 10-K")
* 4.2 By-Laws. Incorporated herein by reference to
Exhibit 3.2 to the 1995 Form 10-K
* 4.3 Glen Burnie Bancorp and The Bank of Glen
Burnie Shareholder Rights Plan. Incorporated
by reference to the Form 8-K filed on March 2,
1998
* 5 Opinion of Housley Kantarian & Bronstein, P.C.
23.1 Consent of Trice & Geary LLC
23.2 Consent of Rowles & Company, LLP
* 23.3 Consent of Housley Kantarian & Bronstein, P.C.
(included in their opinion filed as Exhibit 5)
* 24 Power of Attorney (reference is made to
the signature page of the Form S-1 as originally
filed, Registration Number 333-37073)
__________
* Previously filed.
ITEM 17. UNDERTAKING
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) to remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-2<PAGE>
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of
1933, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Glen Burnie, State of Maryland, on
November 6, 1998.
GLEN BURNIE BANCORP
By: /s/ F. William Kuethe, Jr.
-----------------------------
F. William Kuethe, Jr.
President and Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ F. WILLIAM KUETHE, JR. President and Director November 6, 1998
- ------------------------------ (Principal Executive
F. William Kuethe, Jr. Officer)
/s/ JOHN E. PORTER * Chief Financial Officer November 6, 1998
- ------------------------------ (Principal Financial
John E. Porter Officer)
/s/ BEATRICE S. MCQUARRIE * Assistant Treasurer of November 6, 1998
- ------------------------------ (Principal Accounting
Beatrice S. McQuarrie Officer)
/s/ JOHN E. DEMYAN * Chairman of the Board, November 6, 1998
- ------------------------------- Director
John E. Demyan
/s/ THEODORE L. BERTIER, JR. * Director November 6, 1998
- -------------------------------
Theodore L. Bertier, Jr.
- ------------------------------- Director
Shirley E. Boyer
/s/ THOMAS CLOCKER * Director November 6, 1998
- -------------------------------
Thomas Clocker
/s/ ALAN E. HAHN * Director November 6, 1998
- -------------------------------
Alan E. Hahn
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ Charles L. Hein * Director November 6, 1998
- -------------------------------
Charles L. Hein
/s/ F.W. Kuethe, III * Director November 6, 1998
- -------------------------------
F. W. Kuethe, III
/s/ Eugene P. Nepa * Director November 6, 1998
- -------------------------------
Eugene P. Nepa
/s/ William N. Scherer, Sr.* Director November 6, 1998
- -------------------------------
William N. Scherer, Sr.
/s/ Karen Thorwarth * Director November 6, 1998
- -------------------------------
Karen Thorwarth
/s/ Mary L. Wilcox * Director November 6, 1998
- -------------------------------
Mary L. Wilcox
*By: /s/ F. William Kuethe, Jr.
---------------------------
F. William Kuethe, Jr.
Attorney-in-fact
</TABLE>
EXHIBIT 23.1
[TRICE & GEARY LLC LETTERHEAD]
Board of Directors
Glen Burnie Bancorp
We hereby consent to the incorporation by reference of our
report dated February 4, 1998 included or incorporated by
reference in the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997 and to the references to our firm
under the head ing "Experts" in the prospectus included in Post-
Effective Amendment No. 1 on Form S-3 to the Registration
Statement for the Registrant's Dividend Reinvestment and Stock
Purchase Plan and Stockholder Purchase Plan (File No. 333-
37073).
/s/ Trice & Geary LLC
TRICE & GEARY LLC
November 4, 1998
EXHIBIT 23.2
[ROWLES & COMPANY, LLP LETTERHEAD]
Board of Directors
Glen Burnie Bancorp
We hereby consent to the incorporation by reference of our
report on the consolidated financial statements of Glen Burnie
Bancorp as of December 31, 1995 and for the year then ended in
Post-Effective Amendment No. 1 to the Company's Registration
Statement for its Dividend Reinvestment Plan and Stock Purchase
Plan on Form S-3 (File no. 333-37033).
/s/ Rowles & Company, LLP
Baltimore, Maryland
November 4, 1998
