<PAGE>
<PAGE>
As filed with the Securities and Exchange Commission
on April 19, 2000
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
CECIL BANCORP, INC.
- ------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-1883546
- -------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
127 North Street
Elkton, Maryland 21921
(410) 398-1650
- --------------------------------------------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Stradley Ronon Housley Kantarian & Bronstein, LLP
1220 19th Street, Suite 700
Washington, D.C. 20036
(202) 822-9611
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the effective date of
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. [X]
If any 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,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement 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: [ ]
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================
Proposed maximum Proposed maximum Amount
Title of each class of Amount to offering price aggregate offering of
securities to be registered be registered per unit (2) price registration fee
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share 60,000 $22.00 $1,320,000 $348.48
========================================================================================================
<FN>
(1) Pursuant to Rule 416, this Registration Statement also covers an indeterminate number of
shares of Common Stock that may be issued as a result of stock splits, stock dividends
or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee. Based on the last
sale price as reported on the Nasdaq Bulletin Board as of April 17, 2000 pursuant to
Rule 457(c).
</FN>
</TABLE>
<PAGE>
<PAGE>
[LOGO]
CECIL BANCORP, INC.
COMMON STOCK
($0.01 PAR VALUE PER SHARE)
DIVIDEND REINVESTMENT PLAN
----------------------
PROSPECTUS
---------------------
APRIL 19, 2000
<PAGE>
<PAGE>
[CECIL BANCORP, INC. LETTERHEAD]
April 19, 2000
Dear Shareholder:
The Board of Directors recently voted to establish the
Cecil Bancorp, Inc. Dividend Reinvestment Plan ("Plan") to
provide shareholders of record of at least 50 shares with a
convenient and economical way to automatically reinvest all or a
portion of their cash dividends and to invest optional cash
payments, subject to minimum and maximum purchase limitations,
in additional shares of common stock. You pay no service
charges or brokerage commissions for common stock purchased
under the Plan.
The Plan is completely voluntary. You may terminate your
participation at any time. If you wish to participate in the
Plan, complete and return the enclosed Authorization Form. If
you do not wish to participate in the Plan, you will continue to
receive your dividends, if and when declared, by check from the
Company.
All of the features, terms and conditions of the Plan are
detailed in the enclosed Prospectus, which you should read
carefully. The Prospectus, in simple question-and-answer
format, should answer most of the questions you may have about
the Plan. If you have additional questions, please address them
to the Plan Administrator, Registrar and Transfer Company, 10
Commerce Drive, Cranford, New Jersey 07016, Attention:
Dividend Reinvestment Department (telephone number 1-800-368-
5948).
The Company values its shareholders and we hope that you
find this new Plan an attractive means for holding your shares
and increasing your investment.
Sincerely,
/s/ Mary B. Halsey
Mary B. Halsey
President and Chief Executive Officer
<PAGE>
<PAGE>
PROSPECTUS
CECIL BANCORP, INC.
DIVIDEND REINVESTMENT PLAN
The Dividend Reinvestment Plan ("Plan") of Cecil Bancorp,
Inc., ("Company") provides shareholders of record of at least 50
shares of the Company's common stock, par value $0.01 per share
("Common Stock"), with a convenient and economical way to
reinvest, at no cost, all or a portion of their regular cash
dividends and to invest optional cash payments, subject to
minimum and maximum purchase limitations, in additional shares
of Common Stock. Any special cash dividends or any other cash
distributions that the Company may declare and pay on the Common
Stock are ineligible for reinvestment.
Any holder of record of 50 or more shares of Common Stock
(including shares held within the Plan) is eligible to
participate in the Plan. Beneficial owners whose shares are
registered in a name other than their own (e.g., held in the
name of a broker or bank nominee) and who wish to participate in
the Plan must become record holders of 50 or more shares by
transferring at least 50 shares into their own names. Only
dividends paid on shares registered in your name are eligible
for investment under the Plan.
Plan participants may elect to have regular cash dividends
paid on all or a portion of their shares of Common Stock
automatically reinvested in additional shares of Common Stock.
Holders of Common Stock who choose not to participate in the
Plan will continue to receive regular cash dividends on shares
of Common Stock registered in their name, when and if declared,
by check from the Company or direct deposit.
Shares of Common Stock purchased under the Plan will be
purchased either directly from the Company or in the open
market. The purchase price for each share of Common Stock
purchased with reinvested dividends will be 100% of the market
price on the relevant date of investment. See Question 12.
This Prospectus relates to 60,000 shares of Common Stock
registered for sale under the Plan. These shares may be either
authorized but unissued shares or shares reacquired and held in
the Company's treasury. This Prospectus also covers an
indeterminate number of shares of Common Stock that may be
issued as a result of stock splits, stock dividends or similar
transactions. Participants should retain this Prospectus for
future reference.
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved of these
securities or has passed upon the accuracy or adequacy of this
Prospectus. Any representation to the contrary is a criminal
offense.
See "RISK FACTORS" beginning on page 3 for a discussion of
certain factors that should be considered by Plan participants.
The shares of Common Stock offered hereby are not savings
accounts, deposits or other obligations of a bank or savings
association and are not insured by the Federal Deposit Insurance
Corporation or any other government agency.
THE DATE OF THIS PROSPECTUS IS APRIL 19, 2000.
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
----
Available Information.................................. 1
Incorporation of Certain Information by Reference...... 1
Summary Plan Highlights................................ 2
The Company............................................ 3
Risk Factors........................................... 3
Cecil Bancorp, Inc. Dividend Reinvestment Plan........ 6
Description of Capital Stock........................... 15
Use of Proceeds........................................ 16
Legal Opinions......................................... 16
Experts................................................ 16
Indemnification........................................ 17
<PAGE>
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and
Exchange Commission ("SEC" or "Commission"). Such reports,
proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549 and at the following regional
offices of the Commission: 7 World Trade Center, Suite 1300, New
York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60621. Copies of such material also can be
obtained at prescribed rates from the Commission's Public
Reference Room at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at 1-
800-SEC-0330. Reports, proxy statements and other information
filed by the Company are also available on the Internet at the
Commission's World Wide Web site at http://www.sec.gov.
This Prospectus constitutes part of a Registration
Statement on Form S-3 filed by the Company with the Commission
under the Securities Act of 1933, as amended ("Securities Act").
This Prospectus omits certain of the information contained in
the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the
Registration Statement and related exhibits for further
information with respect to the Company and the Common Stock.
Statements contained herein concerning the provisions of any
document are not necessarily complete and, in each instance,
where a copy of such document has been filed as an exhibit to
the Registration Statement or otherwise has been filed with the
Commission, reference is made to the copy so filed. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following document filed by the Company with the SEC
is hereby incorporated by reference: the Company's Annual Report
on Form 10-KSB for its fiscal year ended December 31, 1999.
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 termination of this
offering shall be deemed to be incorporated by reference from
the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this material to the extent that a
statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any
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 each person to
whom this Prospectus has been delivered, upon the written or
oral request, a copy of any or all of the documents incorporated
by reference herein (including exhibits that are specifically
incorporated by reference in such documents). Written or oral
request should be directed to Mr. Taylor Cameron, Corporate
Administrator, Cecil Bancorp, Inc, P.O. Box 568, Elkton,
Maryland 21922-0568. The telephone number is (410) 398-1650.
1
<PAGE>
<PAGE>
SUMMARY PLAN HIGHLIGHTS
The following summary explains the significant aspects of
the Plan. For additional information about the Plan, please
refer to the more detailed information in this Prospectus.
PURPOSE OF THE PLAN
The purpose of the Plan is to provide record owners of at
least 50 shares of common stock, par value $0.01 per share
("Common Stock"), of Cecil Bancorp, Inc., ("Company") with a
convenient and economical method of investing regular cash
dividends paid on shares of Common Stock. The Plan also
provides record owners with a means of making optional cash
payments, subject to minimum and maximum purchase limitations,
to purchase Common Stock. Any special cash dividends or other
cash distributions that the Company may declare and pay on the
Common Stock are ineligible for reinvestment. If you are
eligible but do not wish to participate in the Plan, you will
continue to receive regular cash dividends, when declared and
paid by the Company, by check from the Company or direct
deposit.
AUTOMATIC DIVIDEND REINVESTMENT
The Plan is administered by Registrar and Transfer Company
("Plan Administrator"). If you enroll in the Plan, your regular
cash dividends will be automatically invested in shares of
Common Stock by the Plan Administrator at no cost to you. You
may also make optional cash payments subject to a minimum cash
payment of $300 and maximum purchase limit of $2,500 per quarter
or, once enrolled, you do not need to take any further action.
If a particular cash dividend is not enough to buy a whole
share of Common Stock, your account will be credited by the Plan
Administrator with a fractional share computed to four decimal
places. Fractional shares also earn cash dividends that will be
applied toward your next regular cash dividend payment.
NO ADMINISTRATION FEES OR BROKER COMMISSIONS FOR STOCK PURCHASES
You will not pay any charges for brokerage commissions or
administrative fees on purchases of Common Stock made through
the Plan. The Company pays all costs associated with the Plan.
However, you will have to pay brokerage commissions for the sale
of any shares held in the Plan plus a $10.00 service fee. There
is a $5.00 fee to issue a stock certificate for shares held in
the Plan.
SIMPLIFIED RECORD KEEPING
No stock certificates will be delivered except upon your
written request. The Plan Administrator will send you a report
confirming each purchase of Common Stock made for your account.
The number of shares purchased will be based on the amount of
cash dividends reinvested and the purchase price for Common
Stock.
TERMINATION OR WITHDRAWAL OF SHARES
You can terminate participation in the Plan or withdraw a
portion of your shares at any time by notifying the Plan
Administrator in writing. If you terminate your participation,
certificates for full shares of Common Stock credited to your
account will be issued and a cash payment will be made for any
fractional shares. Upon request, the Plan Administrator will
sell whole shares credited to your account and pay you the
proceeds after deducting any applicable service charges and
brokerage fees.
2
<PAGE>
<PAGE>
HOW TO PARTICIPATE
If you wish to reinvest your regular cash dividends
automatically towards the purchase of Common Stock, simply
complete the enclosed Authorization Form and mail it to the Plan
Administrator at the following address:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
Attention: Dividend Reinvestment Department
Questions regarding the Plan can be directed to either the
Company or the Plan Administrator at the above address (Toll
Free: 1-800-368-5948). The address of the Company's principal
executive office is 127 North Street, Elkton, Maryland 21921
(telephone number (410) 398-1650).
THE COMPANY
Cecil Bancorp, Inc. (the "Company") was incorporated
under the laws of the State of Maryland in July 1994. On
November 10, 1994, Cecil Federal Savings Bank ("Cecil Federal")
converted from mutual to stock form and reorganized into the
holding company form of ownership as a wholly owned subsidiary
of the Company. As a result of the conversion and
reorganization, the Company issued and sold 481,361 shares of
its common stock ("Common Stock") at a price of $10.00 per share
to its depositors, borrowers, stock benefit plans and the
public, thereby recognizing net proceeds of $4,315,057. The
Company's common stock is registered with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Company is
classified as a multiple savings institution holding company
subject to regulation by the Office of Thrift Supervision
("OTS") of the Department of the Treasury.
On September 30, 1998, the Company completed its
acquisition of Columbian Bank, A Federal Savings Bank
("Columbian") through the exchange of 1.7021 shares of Company
common stock for each outstanding share of Columbian common
stock in a transaction valued at approximately $2.8 million.
The Company issued an additional 128,155 shares of Common Stock
in the acquisition of Columbian, which is currently held as a
subsidiary of the Company. The Company holds all of the stock
of Cecil Federal and Columbian and operates them as two separate
savings institutions.
The Company is primarily engaged in the business of
directing, planning and coordinating the business activities of
Cecil Federal through its three offices, and Columbian through
its one office (together, Cecil Federal and Columbian are
referred to herein as the "Banks"). Accordingly, the
information set forth in this report, including financial
statements and related data, relates primarily to Cecil Federal
and its subsidiaries and Columbian. In the future, the Company
may become an operating company or acquire or organize other
operating subsidiaries, including other financial institutions.
Currently, the Company does not maintain offices separate from
those of Cecil Federal or Columbian, or employ any persons other
than its officers who are not separately compensated for such
service. The Company's main office and telephone number are the
same as Cecil Federal's.
RISK FACTORS
An investment in the shares of common stock offered by
this Prospectus involves risk. In addition to the other
information contained in this Prospectus, the following risk
factors should be considered carefully in evaluating
participation in the Plan. This Prospectus contains certain
"forward-looking statements" (as defined in the federal
securities laws) concerning the Company's proposed operations,
performance and financial condition. These statements
3
<PAGE>
<PAGE>
are not historical facts and are based upon a number of
assumptions and estimates beyond the control of the Company.
Actual results may differ materially from those expressed or
implied by the forward-looking statements. Factors that could
cause actual results to differ materially include, but are not
limited to, those set forth below.
RESTRICTIONS ON ABILITY TO PAY DIVIDENDS
Future declarations and payments of dividends on the
Common Stock, if any, will depend upon the earnings and
financial condition of the Company, liquidity and capital
requirements, the general economic and regulatory climate and
other factors deemed relevant by the Company's Board of
Directors. The Company's principal source of funds to pay
dividends on the shares of Common Stock will be cash dividends
that the Company receives from the Banks. There are statutory
and regulatory requirements applicable to the payment of
dividends by the Banks, as well as by the Company, to its
shareholders.
Under the regulations of the Office of Thrift Supervision
("OTS"), the Banks' primary federal regulator, the Banks, with
prior notice to and the non-objection of the OTS, could
distribute up to 100% of their net income during the calendar
year plus 50% of their surplus capital ratio at the beginning of
the calendar year less any distributions previously paid during
the year. This qualitative limit applies so long as the Banks
remain well-capitalized and well-managed institutions as defined
under applicable OTS regulations. Otherwise, the Banks' ability
to pay dividends would be further limited.
The federal banking statutes prohibit federally insured
banks from making any capital distributions (including a
dividend payment) if, after making the distribution, the
institution would be "undercapitalized" as defined by statute.
In addition, the relevant federal regulatory agencies also have
authority to prohibit an insured bank from engaging in an unsafe
or unsound practice, as determined by the agency, which could
include the payment of dividends.
Under Maryland law, the Company generally is limited to
paying dividends in an amount equal to the excess of its net
assets (total assets minus total liabilities) over its statutory
capital or, if such excess does not exist, to its net profits
for the current and/or immediately preceding fiscal year.
POSSIBLE DILUTIVE EFFECT OF THE PLAN
The Plan allows for the issuance of authorized but
unissued shares by the Company. In the event that authorized
but unissued shares are issued under the Plan, the voting
interests of existing shareholders will be diluted and net
income per share and stockholders' equity per share will
decrease.
GOVERNMENT REGULATION
The banking industry is regulated by and subject to
regular examination by federal and state regulatory authorities.
Under federal banking law, the Company and the Banks are subject
to supervision and limitations with respect to extending credit,
purchasing securities, paying dividends, making acquisitions,
branching and many other aspects of the banking business.
Banking laws are designed primarily to protect depositors and
customers, not investors, and include, among other things,
minimum capital requirements, limitations on products and
services offered, consumer credit regulations, community
investment requirements and restrictions on transactions with
affiliated parties. Financial institution regulation has been
the subject of significant legislation in recent years, and may
be the subject of further significant legislation in the future,
none of which is within the control of the Company. This
regulation substantially affects the business and financial
results of all financial institutions and holding companies,
including the Company and the Banks. The Company is not able to
predict the impact of changes in such regulations on the Banks'
business and profitability, some or all which may be materially
adverse to the Banks.
4
<PAGE>
<PAGE>
COMPETITION
The banking business is highly competitive, and the Banks'
profitability depends principally upon the Banks' ability to
compete in the market areas in which it operates. The Banks
compete with commercial banks, other savings institutions,
credit unions, finance companies, mutual funds, insurance
companies, brokerage and investment banking firms, asset-based
non-bank lenders and certain other nonfinancial institutions,
including retail stores which may maintain their own credit
programs, and certain governmental organizations which may offer
more favorable financing than the Banks. Many competitors may
have greater financial and other resources than the Banks.
The Banks have been able to compete effectively with other
financial institutions by emphasizing customer service, by
establishing long-term customer relationships and building
customer loyalty, and by providing products and services
designed to address the specific needs of its customers.
Although the Banks have been able to compete effectively in the
past, no assurance may be given that the Banks will be able to
continue to do so. Further, changes in government regulation of
banking, particularly legislation which removes restrictions on
interstate banking and permits interstate branching, are likely
to increase competition by out-of-state banking organizations or
by other financial institutions in the Banks' market areas.
Recent legislation which permits consolidations among banks,
insurance companies and investment banking companies may further
increase competitive pressure.
CONTROL BY MANAGEMENT
As of December 31, 1999, the directors and officers of the
Company beneficially owned approximately 35% of the outstanding
shares of Common Stock (including shares subject to outstanding
currently exercisable stock options and shares that may be
issued under various stock benefit plans). Accordingly, those
persons have substantial influence over the business, policies
and affairs of the Company, including the potential ability to
control the election of directors and other matters requiring
shareholder approval by simple majority vote.
INVESTMENT RISK
The shares of Common Stock to be issued under the Plan are
subject to general investment risk. Periodically, the stock
market experiences substantial price and volume volatility.
Those market fluctuations may be unrelated to the operating
performance of particular companies whose shares are traded and
may adversely affect the market price of the Common Stock. The
Company cannot assure you that the market price of the Common
Stock will not decline below the price at which the shares are
purchased under the Plan.
INTEREST RATE RISK
As the holding company for the Banks, the Company's
financial condition and performance depends primarily on the
financial condition and performance of the Banks, which is
greatly affected by changes in market interest rates. The
market value of the Banks' investment securities fluctuates
based on the level of market interest rates. In addition, the
Banks' earnings depend primarily on "rate differentials," which
are the differences between interest income earned on loans and
investments and the interest expense paid on deposits and other
borrowings. These rates are highly sensitive to many factors
that are beyond the Banks' control, including general economic
conditions and the policies of various governmental and
regulatory authorities. Increases in the federal funds rate by
the Board of Governors of the Federal Reserve System usually
lead to rising interest rates which affect the Banks' interest
income, interest expense and investment portfolio. Also,
governmental policies, such as the creation of a tax deduction
for individual retirement accounts, can increase savings and
affect the cost of funds. From time to time, maturities of
assets and liabilities are not balanced, and a rapid increase or
decrease in interest rates could have an adverse effect on the
net interest margin and results of operations of the Banks. The
nature, timing and effect of any future changes in federal
monetary and fiscal policies on the Banks and their results of
operations are not predictable.
5
<PAGE>
<PAGE>
CECIL BANCORP, INC.
DIVIDEND REINVESTMENT PLAN
On March 30, 2000, the Board of Directors of the Company
voted to adopt this Plan under which authorized but unissued
shares of the Company's common stock, par value $0.01 per share
("Common Stock"), are available for issuance and sale to the
shareholders of the Company. The Plan also allows for the
purchase of the Company's Common Stock in the open market. The
Plan will be in effect until amended, altered or terminated.
The Company has reserved 60,000 shares of its Common Stock for
issuance and sale under the Plan pursuant to this prospectus.
The Plan is set forth below as a series of questions and answers
explaining its significant aspects.
PURPOSE AND ADVANTAGES
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of record of
at least 50 shares of Common Stock (including shares held within
the Plan) with a convenient and economical method of investing
regular cash dividends paid on the Common Stock in additional
shares of Common Stock without paying any brokerage commissions,
service charges or other fees. The Plan also provides record
owners with a means of making optional cash payments, subject to
minimum and maximum purchase limitations, to purchase Common
Stock. See Questions 21 and 22. Any special cash dividends or
other cash distributions that the Company may declare and pay on
the Common Stock are ineligible for reinvestment. Participants
who elected to have their cash dividends reinvested will be
deemed to have applied such cash dividends to the purchase of
additional shares of Common Stock pursuant to the Plan. To the
extent that those additional shares are purchased directly from
the Company, the Company will receive additional funds to be
used for general corporate purposes, including increased lending
and investment.
2. What are the advantages of the Plan?
A Plan participant may (a) have cash dividends on all of
his or her registered shares of Common Stock automatically
reinvested in Common Stock or (b) have cash dividends on a
portion of his or her registered shares of Common Stock
automatically reinvested in Common Stock.
. Full Investment. Full investment of funds is
possible under the Plan because fractions of shares, as well as
whole shares, will be credited to a participant's account.
Further, dividends on fractional shares, as well as whole
shares, will be reinvested in additional shares of Common Stock
and will be credited to a participant's account. Participants
pay no brokerage commissions, service charges or other fees in
connection with purchases under the Plan.
. Safekeeping. A participant avoids the need for
safekeeping of certificates for shares of Common Stock credited
to his or her account under the Plan because they are held by
the Plan. In addition, participants may deposit for safekeeping
in their Plan account any stock certificates for Common Stock
registered in their names through the free custodial service
described in Question 24. Dividends on shares deposited for
safekeeping under the Plan will also be reinvested. (See
Questions 24 and 25.) By depositing shares for safekeeping,
participants are relieved of the responsibility for loss, theft
or destruction of the certificates.
. Recordkeeping. Regular statements of account will
be mailed to each participant in the Plan as soon as practicable
after each purchase of Common Stock under the Plan. The
statements will show the date of the investment, the amounts
invested, the purchase price, the number and the market value of
shares of Common Stock purchased and the number of shares of
Common Stock in the participant's account, allowing for
simplified record-keeping.
6
<PAGE>
<PAGE>
ADMINISTRATION
3. Who administers the Plan for participants?
Registrar and Transfer Company, the transfer agent for the
Common Stock ("Plan Administrator"), administers the Plan for
participants, maintains records, sends statements of account to
participants and performs other duties relating to the Plan.
The Plan Administrator will hold for safekeeping shares of
Common Stock purchased for, or deposited for safekeeping by,
each participant until termination of participation in the Plan
or receipt of a written request from a participant for the
issuance of a certificate for all or a portion of such shares.
Shares of Common Stock purchased under the Plan and held by the
Plan Administrator will be registered in its name or the name of
one of its nominees and will be credited to the account of each
participant. As the record holder of shares of Common Stock
held for participants under the Plan, the Plan Administrator
will receive dividends on such shares of Common Stock, will
credit such dividends to each participant's account on the basis
of full and fractional shares held in each account, and will
automatically reinvest such dividends in additional shares of
Common Stock. If the Plan Administrator should resign or
otherwise cease to act as agent, the Company will make such
other arrangements as it deems appropriate for the
administration of the Plan.
The Plan Administrator may be contacted by mail at:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
Attention: Dividend Reinvestment Department
Telephone inquiries may be made to the Plan
Administrator at 1-800-368-5948. Please mention Cecil Bancorp,
Inc. in all correspondence.
PARTICIPATION
4. Who is eligible to participate in the Plan?
All holders of record of 50 or more shares of Common Stock
(including shares held within the Plan) are eligible to
participate in the Plan. Beneficial owners whose shares are
held only beneficially (i.e., in the name of a broker or bank
nominee) and who wish to participate in the Plan must become
owners of record of 50 or more shares by transferring at least
50 shares into their own names.
5. How does an eligible shareholder enroll in the Plan?
An eligible shareholder may enroll in the Plan by
completing the enclosed Authorization Form and returning it to
the Plan Administrator in the postage-paid envelope provided.
Authorization Forms may be obtained at any time by written
request to the Plan Administrator at the address set forth in
Question 3, or to Mr. Taylor Cameron, Corporate Administrator,
Cecil Bancorp, Inc., P.O. Box 568, Elkton, Maryland 21922-0568.
6. Must a shareholder submit his or her certificate for
Common Stock to the Plan Administrator in order to participate
in the Plan?
No. A participant should retain the stock certificates
registered in his or her name and indicate on the Authorization
Form whether the dividends on all or some number of such shares
should be reinvested in shares of Common Stock. Of course, if
the participant wishes to take advantage of the Plan's
safekeeping feature, certificates for Common Stock may be sent
to the Plan Administrator as set forth in Question 24. All
shares of Common Stock purchased under the Plan will be held by
the Plan for the account of the participant until withdrawn by
the participant.
7
<PAGE>
<PAGE>
7. When may an eligible shareholder join the Plan?
An eligible shareholder may join the Plan at any time and
investments will be made on his or her behalf as follows:
If an Authorization Form requesting reinvestment of Common
Stock dividends is received by the Plan Administrator at least
five (5) business days before the record date established for a
particular Common Stock dividend, reinvestment will begin with
that dividend payment date.
If an Authorization Form is received by the Plan
Administrator less than five (5) business days before the record
date established for a particular Common Stock dividend,
reinvestment of dividends will begin with the dividend payment
date immediately following the next dividend record date, if
such shareholder is still a holder of record on the record date
for that dividend.
8. What does the Authorization Form provide?
The Authorization Form provides for the purchase of
additional shares of Common Stock through the following
investment options:
A. "FULL DIVIDEND REINVESTMENT," which directs the
Company to pay the Plan Administrator all of the participant's
regular cash dividends on all shares of Common Stock then or
subsequently registered in his or her name for reinvestment in
accordance with the Plan.
B. "PARTIAL DIVIDEND REINVESTMENT," which directs the
Company to pay the Plan Administrator regular cash dividends on
less than all shares of Common Stock then registered in the
participant's name for reinvestment in accordance with the Plan
while continuing to pay the participant cash dividends on the
remaining shares of Common Stock by check.
C. "OPTIONAL CASH PAYMENT" An initial optional cash
payment may be made by a Participant when enrolling by enclosing
a check or money order with the Authorization Form. Checks or
money orders should be made payable to "Registrar and Transfer
Company, Administrator" and returned along with the
Authorization Form in the envelope provided.
Regardless of the option selected, all cash dividends on
shares of Common Stock credited to a participant's account as a
result of reinvestment of dividends and shares held under the
safekeeping deposit feature will be automatically reinvested in
accordance with the Plan. A participant may change his or her
election by written notice to the Plan Administrator at the
address set forth in Question 3.
The Authorization Form also appoints the Plan
Administrator agent for each participant and directs the Plan
Administrator to apply cash dividends in accordance with the
terms of the Plan.
COSTS
9. Are there any costs to participants associated with
purchases under the Plan?
No. The Company pays all administration costs of the
Plan. There are no brokerage commissions, service charges or
other fees charged to participants in connection with the
purchase of shares of Common Stock under the Plan. However, if
a participant asks the Plan Administrator to sell shares of
Common stock held in his or her account under the Plan, any
brokerage commissions paid in connection with such sale will be
charged to such participant along with a $10.00 service charge.
(See Question 23).
8
<PAGE>
<PAGE>
PURCHASES
10. What is the source of Common Stock purchased under the
Plan?
Shares of Common Stock will be purchased, at the Company's
discretion, either directly from the Company, in which event
such shares will be either authorized but unissued shares or
shares held in the treasury of the Company, or on the open
market, or by combination of the foregoing.
11. When will shares be purchased under the Plan?
In a month in which a regular cash dividend is paid on the
Common Stock, the investment date for the regular dividend on
the Common Stock and for optional cash payments received at
least two (2) business days prior to the dividend payment date
is the dividend payment date ("Investment Date"). In a month in
which a regular cash dividend is not paid on the Common Stock,
the investment date for optional cash payments received at least
two (2) business days prior to the last business day of the
month is the last business day of the month ("Optional Payment
Investment Date"). If an Investment Date falls on a day that is
not a trading day, the Investment Date shall be the prior
trading day.
Purchases of Common Stock from the Company in a month in
which a regular cash dividend is paid on the Common Stock will
be made on the Investment Date. Purchases of Common Stock from
the Company funded by optional cash payments in a month in which
a regular cash dividend is not paid on the Common Stock will be
made on the last business day of the month. Purchases on the
open market will begin on the Investment Date or Optional
Payment Investment Date and will be completed no later than 30
days from that date except where completion at a later date is
necessary or advisable under any applicable federal securities
laws. If open market purchases cannot be completed within
thirty (30) days, any uninvested dividends and optional cash
payments will be paid in cash. Open market purchases may be
made on the Nasdaq Bulletin Board System, or by negotiated
transactions and may be subject to such terms with respect to
price, delivery, and other terms as to which the Plan
Administrator may agree. Neither the Company nor any
participant shall have any authority or power to direct the time
or price at which shares may be purchased, or the selection of
the broker or dealer through or from whom purchases are to be
made.
12. At what price will shares of Common Stock be purchased
under the Plan?
The purchase price of each share of Common Stock purchased
by a participant in the Plan with reinvested dividends will be
100% of the market price. In the case of shares of Common Stock
purchased from the Company, the "market price" is the average of
the high and low sales prices of a share of Common Stock on the
Nasdaq Bulletin Board System on the Investment Date. If there
is no trading in the shares of Common Stock on the Nasdaq
Bulletin Board System for a substantial amount of time at the
time of any Investment Date, the Company will determine the
market price on the basis of such market quotations as it shall
deem appropriate. In the case of purchases of Common Stock on
the open market, the "market price" will be the weighted average
purchase price of shares purchased for the relevant Investment
Date.
13. How many shares of Common Stock will be purchased for
participants?
The number of shares of Common Stock to be purchased
depends on the amount of a participant's reinvested dividends
and the applicable purchase price as determined in the manner
described in Question 12. Each participant's account will be
credited with that number of shares, including fractions
computed to four decimal places, equal to each participant's
total amount to be invested divided by the Purchase Price.
9
<PAGE>
<PAGE>
REPORTS TO PARTICIPANTS
14. What kinds of reports will be sent to participants in the
Plan?
As soon as practicable after each Investment Date on which
shares of Common Stock have been purchased for a participant's
Plan account, the Plan Administrator will mail a statement of
account to the participant. Each statement of account will be
cumulative for each calendar year. The statement is a
participant's continuing record of the cost of his or her
purchases and should be retained for income tax purposes. In
addition, each participant will receive copies of communications
sent to holders of the Common Stock generally, including the
Company's Annual Reports to Shareholders, Notice of Annual
Meeting and Proxy Statement, and any Internal Revenue Service
information for reporting dividend income.
DIVIDENDS ON FRACTIONS OF SHARES
15. Will participants be credited with dividends on fractions
of shares?
Yes. Dividends paid on fractions of shares of Common
Stock held under the Plan, as well as on whole shares of Common
Stock, will be credited to the participant's account and will be
reinvested in additional shares.
ISSUANCE OF CERTIFICATES FOR COMMON STOCK
16. Will certificates be issued for shares of Common Stock
purchased?
No. Certificates will not be issued to a participant for
shares of Common Stock credited to his or her account unless he
or she so requests of the Plan Administrator in writing, or
until his or her account is terminated. The number of shares of
Common Stock credited to an account under the plan will be shown
on the participant's statement of account. This safekeeping
service protects against loss, theft or destruction of stock
certificates. At any time, a participant may request in writing
that the Plan Administrator send him or her a certificate for
all or a portion of the whole shares of Common Stock credited to
his or her account as described in Question 17. There is a
$5.00 service fee to issue a certificate. Any remaining whole
shares and any fractions of a share will continue to be credited
to the participant's account. (See Question 18.)
Shares of Common Stock credited to the account of a
participant under the Plan may not be pledged or assigned. A
participant who wishes to pledge or assign any such shares must
request that a certificate for such shares be issued in his or
her name.
Certificates for fractions of a share will not be issued
to participants under any circumstances. (See Questions 17 and
20.)
An institution that is required by law to maintain
physical possession of certificates may request the issuance of
certificates for whole shares purchased under the Plan. This
request must be made for each payment date and mailed to the
Plan Administrator at the address set forth in Question 3.
17. Can a participant withdraw shares of Common Stock held
under the Plan?
Yes. Certificates for any number of whole shares held in
the participant's account under the Plan will be issued upon
receipt by the Plan administrator of a written request signed by
the participant, specifying the number of whole shares to be
withdrawn. This request should be sent to the Plan
Administrator at the address set forth in Question 3 and should
contain a reference to Cecil Bancorp, Inc. Depending on the
participant's authorization, the dividends on these withdrawn
shares may continue to be reinvested pursuant to the Plan. (See
Question 18.)
10
<PAGE>
<PAGE>
18. Will dividends on shares of Common Stock withdrawn from
the Plan continue to be reinvested?
If the participant has authorized "Full Dividend
Reinvestment," cash dividends with respect to shares of Common
Stock withdrawn from a participant's account will continue to be
reinvested. However, if cash dividends with respect to only
part of the shares of Common Stock registered in a participant's
name are being reinvested, the Plan Administrator will continue
to reinvest dividends on only the number of shares specified by
the participant on the Authorization Form unless a new
Authorization Form specifying a different number of shares is
delivered to the Plan Administrator.
19. What happens when a participant sells or transfers all or
a portion of the shares of Common Stock registered in his or her
name?
If a participant who is reinvesting the cash dividends on
part of the shares of Common Stock registered in his or her name
disposes of a portion of such shares, the Plan Administrator
will continue to reinvest the dividends on the remainder of the
shares up to the number of shares of Common Stock originally
specified on the Authorization Form, provided the participant
continues to hold at least 50 shares in his or her name, in the
Plan.
If a participant disposes of his or her shares of Common
Stock (including shares credited to his or her account under the
Plan) so that the total balance of his or her shares is less
than 50 shares, the Plan Administrator will discontinue the
investment of regular cash dividends on the shares credited to
the participant's account under the Plan, or otherwise, until
the participant's share ownership increases to at least 50
shares in the aggregate. All applicable dividends will be
paid in cash until such participant's stock ownership increases
to at least 50 shares. If following a disposition of stock, a
participant's aggregate record ownership of the Common Stock is
less than 50 shares of Common Stock, the Plan Administer will
notify the participant that he or she is no longer eligible to
participate in the Plan. If the participant does not increase
his or her stock ownership to at least 50 shares within 30 days
of such notice, a certificate will be issued for the whole
number of shares in the account, a cash payment will be made for
any fractional shares and the account will be terminated. There
will be a $5.00 service fee to issue a certificate.
20. In whose name will certificates be registered when issued
to participants?
Shareholder accounts under the Plan are maintained in the
names in which certificates of participants were registered at
the time they enrolled in the Plan. Accordingly, certificates
for whole shares of Common Stock will be similarly registered
when issued. Should a participant want such shares registered
in any name other than that of the holder of record participant
in the Plan, he or she must indicate such name in his or her
request. In the event of such re-registration, a participant
would be responsible for any possible transfer taxes and for
compliance with any applicable transfer requirements. In
addition, federal backup withholding of 31% may apply to
dividends subsequently paid on such re-registered shares unless
the taxpayer identification number of the person in whose name
such shares are registered is provided to the Plan
Administrator. (See Question 33.)
OPTIONAL CASH PAYMENTS
21. Who will be eligible to make optional cash payments?
Stockholders who have submitted a properly completed
Authorization Form are eligible to make optional cash payments
at any time. The Plan Administrator will apply any optional
cash payments received from a Participant no later than 2
business days before an Optional Investment Date to the purchase
of shares for the account of the Participant. Any optional cash
payment received within 2 business days of or after an Optional
Investment Date will be applied to the next Optional Investment
Date.
An initial optional cash payment may be made by a
Participant when enrolling by enclosing a check or money order
with the Authorization Form. Checks or money orders should be
made payable to "Registrar and Transfer
11
<PAGE>
<PAGE>
Company, Administrator" and returned along with the
Authorization Form in the envelope provided. Thereafter,
optional cash payments may be made at any time by sending them
to Registrar and Transfer Company, 10 Commerce Drive, Cranford,
New Jersey 07016, Attn: Dividend Reinvestment Department.
Participants may also authorize a periodic automatic draft on a
deposit account at their bank or other depository institution in
accordance with its rules and procedures or by any other method
authorized by the Participant from time to time. Please include
your Plan account number on your check (or money order) and on
any correspondence with respect to the Plan. While optional
cash payments may be made at any time, it is recommended that
they be sent so as to be received at least 5 days before an
Optional Investment Date. NO INTEREST WILL BE PAID ON THESE
PAYMENTS. A Participant may obtain the return of any optional
cash payment by written notice to and received by the Plan
Administrator up to 2 business days before it is to be invested.
22. What are the limitations on making optional cash payments?
Optional cash payments may be made at any time. The same
amount of money need not be sent each month and you are under no
obligation to make an optional cash payment at any time. An
optional cash payment must be at least $300 in amount, and
payment on behalf of any Participant may not aggregate to more
than $2,500 in any calendar quarter. For purposes of this
limitation, all Plan accounts controlled by a Participant will
be aggregated. Participants may, however, invest amounts in
excess of the $2,500 maximum quarterly purchase limit with the
prior approval of the Company. The grant or denial of waivers
will be made by the Company in its sole discretion and on either
a uniform or selected basis. In considering any requests for a
waiver of the $2,500 maximum quarterly purchase limit, the
Company will consider the then-current market price for the
Common Stock, the identity of the party requesting the waiver,
the Company's capital needs, and such other factors as it deems
relevant under the circumstances. Requests for such prior
approval should be directed, prior to the beginning of any
relevant pricing period, to the attention of Mr. Taylor Cameron,
Corporate Administrator at (410) 398-1650.
TERMINATION OF PARTICIPATION
23. How may a participant withdraw from and cease
participation in the Plan?
A participant may withdraw from participation in the Plan
entirely at any time. To do so, a participant must notify the
Plan Administrator in writing that he or she wishes to withdraw.
Such notice should be forwarded to the Plan Administrator at the
address set forth in Question 3. When a participant withdraws
from the Plan or upon termination of the Plan by the Company, a
certificate for the number of whole shares of Common Stock
credited to his or her account under the Plan will be issued and
a cash payment will be made for any fractions of a share. Such
cash payment will be based on the actual market price of a share
of Common Stock less any brokerage fees or commissions, any
other costs of sale and any transfer tax. Federal backup
withholding of 31% may apply to any such cash payments from the
Plan. (See Questions 32 and 33.)
If the Plan Administrator receives the request to withdraw
and cease participation prior to the record date for a dividend,
the withdrawal will be processed promptly following receipt of
the request. If the request to withdraw and cease participation
is received on or after the record date for a dividend payment,
the request may not become effective until any cash dividend
paid on the dividend payment date has been reinvested and the
shares of Common Stock purchased are credited to the
participant's account under the Plan. The Plan Administrator,
in its sole discretion, may either pay any such dividend in cash
or reinvest it in Common Stock on behalf of the terminating
participant. The request for withdrawal will then be processed
as promptly as possible following such Investment Date.
After a participant ceases to participate in the Plan, all
subsequent dividends will be paid to the participant in cash
unless he or she re-enrolls in the Plan, which he or she may do
at any time by requesting an Authorization Form from the Plan
Administrator or from the Company.
12
<PAGE>
<PAGE>
In his or her written request for withdrawal of shares
from the Plan, a participant may also request that all or a
portion of the whole shares of Common Stock credited to his or
her account be sold. If he or she requests such sale, the sale
will be made by the Plan Administrator as promptly as possible
after processing the request for withdrawal, however, if a
request to sell shares is received less than three days prior to
a dividend record date, the request will not be processed until
after the cash dividend has been reinvested. Subject to the
applicability of federal backup withholding, the participant
will receive the proceeds from such sale, less any brokerage
fees or commissions, a $10.00 service fee, any other costs of
sale and any applicable transfer tax.
SAFEKEEPING
24. How does a participant deposit shares of Common Stock for
safekeeping under the Plan?
A participant may deposit with the Plan Administrator any
Common Stock certificates registered in his or her name for
safekeeping under the Plan. There is no charge for this
custodial service. By having the Plan Administrator hold such
certificates, a participant is relieved of the responsibility
for loss, theft or destruction of any such certificates.
Dividends paid on shares of Common Stock held for safekeeping by
the Plan Administrator will be reinvested in shares of Common
Stock pursuant to the Plan.
Participants who wish to deposit their Common Stock
certificates with the Plan Administrator for safekeeping under
the Plan should send their certificates (which need not be
endorsed) to the Plan Administrator at the address set forth in
Question 3. Because the participant bears the risk of loss in
sending Common Stock certificates to the Plan Administrator, it
is recommended that certificates be sent by registered mail,
return receipt requested and properly insured. Whenever
certificates are issued to a participant either upon request for
withdrawal or termination of participation, new, differently
numbered certificates will be issued.
25. May a participant request that his or her shares of Common
Stock be deposited for safekeeping under the Plan without having
the dividends thereon reinvested?
No. Safekeeping under the Plan is only available for
shares of Common Stock on which dividends are being reinvested
in additional shares of Common Stock under the Plan.
OTHER INFORMATION
26. If the Company declares and pays a special cash dividend
or any other cash distribution on the shares of Common Stock,
are they eligible for reinvestment under the Plan?
No. Only regular cash dividends declared and paid by the
Company and optional cash payments, subject to minimum and
maximum purchase limitations, are eligible for reinvestment.
27. If the Company conducts a rights offering, how will the
rights on the shares of Common Stock held under the Plan be
handled?
If a participant is entitled to participate in a rights
offering, he or she will receive rights certificates for only
the number of whole shares of Common Stock held for his or her
account under the Plan.
28. What happens if the Company splits its stock or declares a
dividend or other distribution payable in stock or other noncash
assets?
Any dividend payable in Common Stock or split shares of
Common Stock distributed by the Company on shares of Common
Stock credited to the account of a participant under the Plan
will be added to the participant's account. Any dividend or
other distribution payable in stock other than Common Stock and
all other noncash dividends distributed by the Company on shares
of Common Stock credited to the account of a participant under
the Plan will be mailed directly to such participants in the
same manner as to shareholders who are not participating in the
Plan. Of
13
<PAGE>
<PAGE>
course, all stock dividends, split shares and other
noncash distributions made on shares of Common Stock registered
in the name of the participant and not held by the Plan will
also be mailed directly to the participant.
29. How will a participant's shares of Common Stock held in
the Plan be voted at shareholders' meetings?
Shares of Common Stock held by the Plan Administrator
under the Plan for a participant will be voted as the
participant directs in a proxy card provided for that purpose.
A proxy card will be sent to each participant in connection with
any annual or special meeting of shareholders, as in the case of
shareholders not participating in the Plan. This proxy will
apply to all whole shares of Common Stock registered in the
participant's own name, if any, as well as to all shares
credited to the participant's account under the Plan. The Plan
Administrator will aggregate the participant's shares voting in
a certain way on each matter presented to the shareholders and,
after completing such aggregation, any fractions of a share will
not be voted.
30. What are the responsibilities of the Company and the Plan
Administrator under the Plan?
The Company and the Plan Administrator will not be liable
under the Plan for any act done in good faith or for any good
faith omission to act including, without limitation, any claim
of liability arising out of failure to terminate a participant's
account upon such participant's death or with respect to the
prices at which shares of Common Stock are purchased or sold for
the participant's account, the times when such purchases or
sales are made, or with respect to any fluctuation in market
value of the Common Stock.
The participant should recognize that neither the Company
nor the Plan Administrator can assure him or her of a profit or
protect the participant against a loss on the Common Stock
purchased by him or her under the Plan.
31. May the Plan be changed or discontinued?
Notwithstanding any other provision of the Plan, the Board
of Directors of the Company or any designated committee thereof
may amend, suspend, modify or terminate the Plan at any time
(including the period between a record date and a dividend
payment date). Notice of any such amendment, suspension,
modification or termination will be sent to all participants.
Upon a termination of the Plan, certificates for whole shares of
Common Stock credited to a participant's account under the Plan
will be issued, and a cash payment will be made for any
fractions of a share credited to a participant's account. Such
cash payment may be subject to backup withholding and will be
based on the actual market price of a share of Common Stock less
any brokerage fees or commissions, any other costs of sale and
any transfer tax.
TAXES
32. What are the federal income tax consequences of
participation in the Plan?
Reinvested Dividends. In the case of shares of Common
Stock purchased directly from the Company with reinvested
dividends, a participant will be subject to federal income tax
on a taxable dividend in an amount equal to the number of shares
of Common Stock so purchased multiplied by the fair market value
(as defined below) on the Investment Date of the shares so
acquired. The participant's basis in such shares will also
equal the fair market value of the shares on the relevant
Investment Date.
Alternatively, when the Plan Administrator purchases
shares of Common Stock on the open market with reinvested
dividends, a participant will be subject to federal income tax
on a taxable dividend in an amount equal to the actual purchase
price to the Plan Administrator of the shares so acquired plus
that portion of any brokerage commissions paid by the Company
which is attributable to the purchase of the participant's
shares. The participant's basis in such shares will equal their
actual purchase price to the Plan Administrator plus allocable
brokerage commissions.
For purposes of this Question 32, the "fair market value"
of shares on the Investment Date will be determined under
applicable Internal Revenue Service regulations. Under those
regulations, if the Common Stock trades on the
14
<PAGE>
<PAGE>
Investment Date, the fair market value is the average of the
high and low sales prices as reported on the Nasdaq Bulletin
Board System for that date; if the Common Stock does not trade
on that date, the fair market value is the weighted average of
the mean of the high and low sales prices on the nearest trading
dates before and after the Investment Date.
Receipt or Disposition of Shares. A participant will not
realize any taxable income when he or she receives a certificate
for whole shares of Common Stock credited to his or her account,
either upon his or her request for a certificate for certain of
such shares or upon withdrawal from or termination of the Plan.
A participant will realize gain or loss when shares of
Common Stock are sold or exchanged, whether such sale or
exchange is pursuant to his or her request upon his or her
withdrawal from the Plan or takes place after withdrawal from or
termination of the Plan. In the case of fractions of a share, a
participant will realize gain or loss when he or she receives a
cash payment for such fractions of a share credited to his or
her account. The amount of such gain or loss will be the
difference between the amount which the participant receives for
such whole shares or fractions of a share and the tax basis
thereof.
Additional Information. An information statement (on Form
1099) will be sent to each participant and to the Internal
Revenue Service at year-end showing the amounts taxable to the
participant during the year.
All participants are urged to consult their own tax
advisors to determine the particular tax consequences, including
consequences under state and local laws, which may result from
their participation in the Plan and the subsequent disposal by
them of shares of Common Stock purchased pursuant to the Plan.
The income tax consequences for participants who do not reside
in the United States will vary between jurisdictions.
33. How are federal backup withholding provisions applied to
participants in the Plan?
Under the federal income tax law, each participant in the
Plan is required to provide his or her correct taxpayer
identification number to the Plan Administrator. For an
individual, the taxpayer identification number is his or her
social security number. If the correct number is not provided,
dividends paid on shares of Common Stock held for a participant
under the Plan and dividends paid on shares of Common Stock held
by a participant (including dividends paid into the Plan and
including any deemed dividends resulting from the payment of
brokerage fees by the Company) may be subject to backup
withholding. In addition, cash distributions from the plan as
described in Question 19 and 28 may be subject to backup
withholding.
If backup withholding applies, 31% of any such dividends
or payments is required to be withheld. Exempt participants
(including, among others, all corporations and certain foreign
individuals) are not subject to backup withholding and reporting
requirements. In order to qualify as exempt, a foreign
individual must submit a statement attesting to that
individual's exempt status.
Forms for certifying a participant's taxpayer
identification number and for establishing the exemption of a
foreign participant as well as additional information concerning
the requirements for certification may be obtained by writing
the Plan Administrator at the address set forth in Question 3 or
by calling the Plan Administrator at 1-800-368-5948.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 4,000,000 shares of
Common Stock and 1,000,000 shares of preferred stock, par value
$0.01 per share. Each share of Common Stock has the same
relative rights and is identical in all respects with every
other share of Common Stock. The following summary does not
purport to be a complete description of the applicable
provisions of the Company's Certificate of Incorporation and
Bylaws or of applicable statutory or other law, and is qualified
in its entirety by reference thereto. See "AVAILABLE
INFORMATION."
15
<PAGE>
<PAGE>
COMMON STOCK
Voting Rights. The holders of Common Stock possess
exclusive voting rights in the Company. Each holder of Common
Stock is entitled to one vote for each share held of record on
all matters submitted to a vote of holders of Common Stock.
Holders of shares of Common Stock are not entitled to cumulate
votes for the election of directors.
Dividends. The holders of Common Stock are entitled to
such dividends as the Board of Directors may declare from time
to time out of funds legally available therefor. Dividends from
the Company depend upon the receipt by the Company of dividends
from the Bank because the Company has no source of income other
than dividends from the Bank.
Liquidation. In the event of liquidation, dissolution or
winding up of the Company, the holders of shares of Common Stock
are entitled to share ratably in all assets remaining after
payment of all debts and other liabilities of the Company.
Other Characteristics. Holders of Common Stock do not
have any preemptive, conversion or other subscription rights
with respect to any additional shares of Common Stock which may
be issued. Therefore, the Board of Directors may authorize the
issuance and sale of shares of capital stock of the Company
without first offering them to existing shareholders of the
Company. The Common Stock is not subject to any redemption or
sinking fund provisions.
PREFERRED STOCK
The Company's Articles of Incorporation authorizes the
Board of Directors to issue from time to time one or more series
of preferred stock with such designations and preferences,
relative, participating, optional and other special rights and
qualifications, limitations and restrictions thereon, as
permitted by law and as fixed from time to time by resolution of
the Board of Directors. Because of its broad discretion with
respect to the creation and issuance of any series of preferred
stock without shareholder approval, the Board of Directors could
adversely affect the voting power of the holders of common
stock, and by issuing shares of preferred stock with certain
voting, conversion and/or redemption rights, could discourage
any attempt to obtain control of the Company in any transaction
not approved by the Board of Directors.
USE OF PROCEEDS
The Company does not know the number of shares of Common
Stock that ultimately will be sold under the Plan, or the prices
thereof, but the Company intends to use the net proceeds from
the sale of Common stock offered pursuant to the Plan for
general corporate purposes, including increased lending and
investment.
LEGAL OPINIONS
The validity of the shares of Common Stock offered hereby
has been passed upon for the Company by Stradley Ronon Housley
Kantarian & Bronstein, LLP.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference from the Company's Annual Report on Form
10-KSB for the year ended December 31, 1999, have been audited
by Simon, Master & Sidlow, P.A. independent auditors, as stated
in their report, which is incorporated herein by reference, and
have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and
auditing.
16
<PAGE>
<PAGE>
INDEMNIFICATION
The Company's Articles of Incorporation requires
indemnification of directors, officers, employees and agents of
the Company to the fullest extent permitted by Maryland law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to
directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been
informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as
expressed in such Act and is therefore unenforceable. Plan
participants should rely only on the information contained in
this Prospectus or incorporated by reference in this Prospectus.
The Company and the Banks have not authorized anyone to provide
Plan participants with different information.
This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction in which, or to any person to whom,
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 in this
Prospectus or since the date of this Prospectus.
17
<PAGE>
<PAGE>
CECIL BANCORP, INC.
COMMON STOCK
($0.01 PAR VALUE PER SHARE)
DIVIDEND REINVESTMENT PLAN
PROSPECTUS
APRIL 19, 2000
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses are expected to be minimal and will be paid
by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Indemnification of directors and officers of the Company
is provided under Articles XVI and XVII of the Articles of
Incorporation of the Company. Article XVI of the Company's
Articles of Incorporation provides that an officer or director
of the Corporation, as such, shall not be liable to the
Corporation or its stockholders for money damages, except (i) to
the extent that it is proved that the person actually received
an improper benefit or profit in money, property or services for
the amount of the benefit or profit in money, property or
services actually received; (ii) to the extent that a judgment
or other final adjudication adverse to the person is entered in
a proceeding based on a finding in the proceeding that the
person's action, or failure to act, was the result of active and
deliberate dishonesty and was material to the cause of action
adjudicated in the proceeding; or (iii) to the extent otherwise
required by Maryland law. If Maryland law is amended to further
eliminate or limit the personal liability of officers and
directors, then the liability of officers and directors of the
Corporation shall be eliminated or limited to the fullest extent
permitted by Maryland law, as so amended.
Any repeal or modification of the foregoing paragraph by
the stockholders of the Corporation would not adversely affect
any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
Article XVII of the Company's Articles of Incorporation
provides that the Corporation shall indemnify, to the fullest
extent permissible under the Maryland General Corporation Law,
any individual who is or was a director, officer, employee or
agent of the Corporation, and any individual who serves or
served at the Corporation's request as a director, officer,
partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, other enterprise or employee
benefit plan, in any proceeding in which the individual is made
a party as a result of his service in such capacity.
Any repeal or modification of the foregoing paragraph by
the stockholders of the Corporation would not adversely affect
any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
The Company has purchased director and officer liability
insurance that insures directors and officers against certain
liabilities in connection with the performance of their duties
as directors and officers, including liabilities under the
Securities Act of 1933, as amended, and provides for payment to
the Company of costs incurred by it in indemnifying its
directors and officers.
II-1
<PAGE>
<PAGE>
Under Maryland law, indemnification of directors and
officers may be provided for judgments, fines, settlements, and
expenses, including attorney's fees, incurred in connection with
any threatened, pending, or completed action, suit, or
proceeding other than an action by or in the right of the
Company. This applies to any civil, criminal, investigative or
administrative action provided that the director or officer
involved acted in good faith, in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Indemnification of directors and officers may be also
provided for judgments, fines, settlements, and expenses,
including attorney's fees, incurred in connection with any
threatened, pending, or completed action, or suit by or in the
right of the corporation if such director or officer acted in
good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation. However,
no indemnification shall be made in respect of any claim, issue
or matter in which such person is adjudged to be liable for
negligence or misconduct in the performance of his duties to the
corporation unless the court in which the action is brought
deems indemnity proper.
The grant of indemnification to a director or officer
shall be determined by a majority of a quorum of disinterested
directors, by a written opinion from independent legal counsel,
or by the stockholders.
Indemnification shall be provided to any directors and
officers for expenses, including attorney's fees, actually and
reasonably incurred in the defense of any action, suit or
proceeding to the extent that he or she has been successful on
the merits.
ITEM 16. EXHIBITS
5 Opinion of Stradley Ronon Housley Kantarian &
Bronstein, LLP
23.1 Consent of Stradley Ronon Housley Kantarian &
Bronstein, LLP (contained in its opinion)
23.2 Consent of Simon, Master & Sidlow, P.A.
24 Power of attorney (contained in signature page)
99 Authorization form
ITEM 17. UNDERTAKINGS.
The undersigned hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.
II-2
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Elkton, State of Maryland, on the 19th day of April,
2000.
CECIL BANCORP, INC.
/s/ Mary B. Halsey
--------------------------------
Mary B. Halsey
President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Cecil
Bancorp, Inc. (the "Corporation") do hereby severally
constitute and appoint Mary Beyer Halsey true and lawful
attorney and agent to do any and all things and acts in our
names in the capacities indicated below and to execute any and
all instruments for us and in our names in the capacities
indicated below which said Mary Beyer Halsey may deem necessary
or advisable to enable the Corporation to comply with the
Securities Act of 1933 in connection with the Registration
Statement on Form S-3 relating to the offering of the
Corporation's Common Stock, including specifically, but not
limited to, power and authority to sign for us or any of us in
our names in the capacities indicated below the Registration
Statement and any and all amendments (including post-effective
amendments) thereto; and we hereby ratify and confirm all that
said Mary Beyer Halsey shall do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
By:/s/ Mary B. Halsey Date: April 19, 2000
-------------------------------------
Mary B. Halsey
President and Chief Executive Officer
(Principal Executive Officer)
By:/s/ Mary B. Halsey Date: April 19, 2000
-------------------------------------
Mary B. Halsey
President and Chief Executive Officer
(Principal Financial and Accounting
Officer)
By:/s/ Bernard L. Siegel Date: April 19, 2000
-------------------------------------
Bernard L. Siegel
Chairman of the Board
By:/s/ Thomas L. Foard Date: April 19, 2000
-------------------------------------
Thomas L. Foard
Secretary and Director
By:/s/ Howard J. Neff Date: April 19, 2000
-------------------------------------
Howard J. Neff
Director
II-3
<PAGE>
<PAGE>
By:/s/ Doris P. Scott Date: April 19, 2000
-------------------------------------
Doris P. Scott
Director
By:/s/ Howard B. Tome Date: April 19, 2000
-------------------------------------
Howard B. Tome
Director
By:/s/ Donald F. Angert Date: April 19, 2000
-------------------------------------
Donald F. Angert
Director
By:/s/ Robert L. Johnson Date: April 19, 2000
-------------------------------------
Robert L. Johnson
Director
By:/s/ Charles Sposato Date: April 19, 2000
-------------------------------------
Charles Sposato
Director
By:/s/ Matthew G. Bathon Date: April 19, 2000
-------------------------------------
Matthew G. Bathon
Director
II-4
<PAGE>
EXHIBIT 5
[LETTERHEAD OF STRADLEY RONON HOUSLEY KANTARIAN
& BRONSTEIN, LLP]
April 19, 2000
Board of Directors
Cecil Bancorp, Inc.
127 North Street
Elkton, Maryland 21921
Attention: Mary B. Halsey, President
Re: Cecil Bancorp, Inc.
Registration Statement on Form S-3
Dear Ms. Halsey:
We have acted as counsel to and for Cecil Bancorp, Inc., a
Maryland corporation (the "Company"), in connection with the
preparation and filing with the Securities and Exchange
Commission of a registration statement on Form S-3 (the
"Registration Statement"), for the purpose of registering under
the Securities Act of 1933, as amended, 60,000 shares (the
"Shares") of the Company's common stock, $.01 par value per
share (the "Common Stock"). The Shares are issuable pursuant to
purchases made under the Company's Dividend Reinvestment Plan
(the "Plan").
In our capacity as counsel, we have been requested to
render the opinions set forth in this letter and, in connection
therewith, we have reviewed the following documents: (i) the
Registration Statement, (ii) the Plan, (iii) the Articles of
Incorporation of the Company dated July 6, 1994 ("Articles of
Incorporation"), certified by the Secretary of the Company to
have not been amended and to be in full force and effect as of
the date hereof, (iv) certain minutes of meetings of the Board
of Directors of the Company, certified as true and correct by
the Secretary of the Company, (v) Bylaws of the Company, as
amended, certified as true and correct by the Secretary of the
Company, and (vi) an Officer's Certificate executed by the
President of the Company certifying the number of shares of
Common Stock of the Company authorized, issued and outstanding
as of the date hereof.
In rendering this opinion, we have assumed and relied
upon, without independent investigation, (i) the authenticity,
completeness, truth and due authorization and execution of all
documents submitted to us as originals, (ii) the genuineness of
all signatures on all documents submitted to us as originals,
and (iii) the conformity to the originals of all documents
submitted to us as certified or photostatic copies.
<PAGE>
<PAGE>
The law covered by the opinion expressed herein is limited
to the general corporation law of the State of Maryland.
This opinion letter is given only with respect to laws and
regulations presently in effect. We assume no obligation to
advise you of any changes in law or regulation which may
hereafter occur, whether the same are retroactively or
prospectively applied, or to update or supplement this letter in
any fashion to reflect any facts or circumstances which
hereafter come to our attention.
Based upon and subject to, the foregoing, we are of the
opinion that the Shares, when issued pursuant to and in
accordance with the Plan, will be validly issued, fully paid and
nonassessable.
We hereby consent to the use of this opinion as an exhibit
to the Registration Statement and we further consent to the
reference to our firm under the caption "Legal Opinions" in the
Plan and to any reference to our firm in the Registration
Statement as legal counsel who have passed upon the legality of
the securities offered thereby.
Very truly yours,
STRADLEY, RONON, HOUSLEY KANTARIAN & BRONSTEIN
By:/s/ Howard S. Parris
-----------------------------------
Howard S. Parris, A Partner
Exhibit 23.2
[LETTERHEAD OF SIMON, MASTER & SIDLOW, P.A.]
BOARD OF DIRECTORS AND STOCKHOLDERS
CECIL BANCORP, INC.
ELKTON, MARYLAND
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement of Cecil Bancorp, Inc. (the "Company")
on Form S-3 of our report dated February 23, 2000, appearing in
and incorporated by reference in the Annual Report on Form 10-
KSB of the Company for the year ended December 31, 1999, and to
the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Simon, Master & Sidlow, P.A.
Wilmington, Delaware
April 19, 2000
<PAGE>
Exhibit 99
SHAREHOLDER AUTOMATIC DIVIDEND REINVESTMENT
AUTHORIZATION FOR
CECIL BANCORP, INC.
AUTHORIZATION AGREEMENT FOR AUTOMATIC DIVIDEND REINVESTMENT
Company Name: Cecil Bancorp, Inc. Tax ID No.: 52-1883546
[ ] Full Reinvestment: I (we) hereby authorize Cecil Bancorp,
Inc. to pay to Registrar and Transfer Company as my (our)
agent for my (our) account all cash dividends due to me
(us) on shares of Cecil Bancorp, Inc. Common Stock for
which I (we) am (are) the holder of record. I (we) want
to reinvest dividends on all shares registered in my (our)
name(s) for the purchase of full or fractional shares of
Cecil Bancorp, Inc. Common Stock in accordance with the
terms of the Cecil Bancorp, Inc. Dividend Reinvestment
Plan ("Plan").
[ ] Partial Reinvestment: I (we) hereby authorize Cecil
Bancorp, Inc., to pay to Registrar and Transfer Company as
my (our) agent for my (our) account all cash dividends due
to me (us) on _________ shares of Cecil Bancorp, Inc.,
Common Stock for which I(we) am (are) the holder of
record. I (we) want to reinvest dividends on the
indicated number of shares registered in my (our) name(s)
for the purchase of full or fractional shares of Cecil
Bancorp, Inc., Common Stock in accordance with the terms
of the Plan.
[ ] Optional Cash Payment: I (we) enclose herewith my (our)
check (money order) payable to Registrar and Transfer
Company, Administrator, in the sum of $________________
and hereby authorize Registrar and Transfer Company as my
(our) agent to invest the entire proceeds from that check
(money order) in full or fractional shares of Cecil
Bancorp, Inc., in accordance with the terms of the Plan.
I understand that the purchase of Common Stock will be made
subject to the terms and conditions of the Plan, and that I may
terminate this authorization at any time by notifying Registrar
and Transfer Company in writing.
This authorization form, when signed, should be mailed to:
Registrar and Transfer Company, ATTN: Dividend Reinvestment
Department, 10 Commerce Drive, Cranford, New Jersey 07016. An
addressed, postage-prepaid envelope is provided for that
purpose.
NAME(S): _____________________________________________________
(Please Print)
TAX ID NO._________________ DAYTIME PHONE ( )______________
DATE: _____________________ SIGNED:_______________________
DATE: _____________________ SIGNED:_______________________
