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[GLEN BURNIE BANCORP LETTERHEAD]
February 24, 1999
Dear Stockholder:
In preparation for the 1999 Annual Meeting of Stockholders,
you recently received a copy of the 1998 Annual Report along
with the Proxy Statement of Glen Burnie Bancorp. The proxy
materials relate to the items of business which will be
conducted at the meeting on Thursday, March 11, at LaFontaine
Bleu beginning at 2:00 p.m.
In addition to election of directors and appointment of an
external auditing firm, several important issues will be voted
on during the meeting. The proxy material explains in great
detail four additional issues. I have prepared a simplified
explanation of these issues for your review.
Both the Board of Directors and I support these amendments
and recommend you vote for each one. If you do not cast a vote
either in person at the Annual Meeting or by returning a
completed proxy, your shares will, in effect, be a vote against
these amendments. Therefore, I urge you to complete and return
the proxy form you received.
If you have questions after reading the enclosed
information, please don't hesitate to contact me at
410-768-8863. I hope you are able to attend the 1999 Annual
Meeting.
Sincerely,
/s/ F. William Kuethe, Jr.
F. William Kuethe, Jr.
President & CEO
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GLEN BURNIE BANCORP
ELIMINATION OF PREEMPTIVE RIGHTS
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Stockholders' current Preemptive Rights require that most
additional stock offerings by the company must be offered to
existing stockholders in an amount proportionate to their
existing holdings. As an example, in the company's current
Stockholder Purchase Plan, some stockholders are given the
opportunity to purchase more shares than other stockholders. By
eliminating preemptive rights, we anticipate being able to offer
all stockholders an equal amount of stock each quarter under the
Stockholder Purchase Plan. Buying stock under this manner
eliminates broker fees, reducing the amount paid if bought
through a broker. Most publicly traded companies do not have
preemptive rights and are able to offer stock under a
stockholder purchase plan in equal amounts to all stockholders.
The elimination of preemptive rights will mean that stockholders
will not have the right to subscribe for other offerings as
well. Accordingly, stockholders who wish to maintain their
percentage ownership will be required to buy shares on the open
market.
CLASSIFIED BOARD OF DIRECTORS
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In an effort to increase the stability of your Board of
Directors, we would like to stagger the term of office served by
each member. If this proposal is approved, the 12-member board
would be divided into three groups, and we would begin the
process of staggering the board this year. Four directors would
be elected to serve a three-year term, four would be elected to
serve a two-year term, and four would be elected to serve a
one-year term. After this transition year, only one group would
be coming up for election at the Annual Meeting. As each group
comes up for re-election in future years, the new term of office
would be three years. By staggering the terms of our directors,
we provide greater continuity of experienced leaders on our
Board. A staggered board will also mean that the company will
be less vulnerable to unsolicited takeovers which are not
supported by the Board of Directors even if other shareholders
consider those offers attractive. We believe, however, that the
increased stability of a staggered board outweighs any possible
adverse effect.
DATE OF ANNUAL MEETING
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In an effort to allow more time to prepare the company's
Annual Report and shareholder proxy materials, the Board of
Directors would like to move the Annual Meeting to the second
Thursday of May. The two additional months will give us more
time to prepare the Annual Report and reduce the costs involved
in maintaining the current accelerated auditing schedule
necessary to meet reporting requirements. This change was
suggested by both our Finance Department and our external
auditors.
REDUCING SHAREHOLDER VOTES REQUIRED TO AMEND THE BYLAWS
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We currently require an 80% majority vote to amend the
company's Bylaws. As Glen Burnie Bancorp continues to grow, it
must be flexible. The need to adjust the date of the Annual
Meeting is a perfect example of the flexibility needed in
today's market-place. Yet achieving an 80% vote on nearly any
issue is a challenge since votes that are not cast are counted
as a vote against the motion. Therefore, we would like to
change the number of votes needed to amend the Bylaws from 80%
to 66 2/3%. This number is more realistic to obtain, yet
continues to allow for these important issues to be determined
by a clear majority of shareholders. This amendment would apply
to the Bylaws only. Changes to the Articles of Incorporation
would still require an 80% vote of outstanding shares.
FOR MORE INFORMATION, PLEASE REFER TO THE PROXY STATEMENT
THAT WAS PREVIOUSLY SENT TO YOU. THE PROXY STATEMENT
CONTAINS A MORE COMPLETE DESCRIPTION OF THE PROPOSALS
INCLUDING THE POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN OF
THE PROPOSALS. FOR AN ADDITIONAL COPY OF THE PROXY
STATEMENT OR AN ADDITIONAL PROXY CARD, PLEASE CALL
STOCKHOLDER RELATIONS AT 410-766-3300.
