SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement [ ]Confidential, for Use of the
[x]Definitive Proxy Statement Commission Only (as permitted
[ ]Definitive Additional Materials by Rule 14a-6(e)(2))
[ ]Soliciting Material Under Rule 14a-12
BCSB BANKCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1. Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
-----------------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5. Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:___________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
-----------------------------------------------------------------------
2. Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3. Filing Party:
-----------------------------------------------------------------------
4. Date Filed:
-----------------------------------------------------------------------
[BCSB BANKCORP, INC. LETTERHEAD]
January 10, 2003
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders (the "Annual
Meeting") of BCSB Bankcorp, Inc. (the "Company") to be held at Baltimore County
Savings Bank, F.S.B.'s Perry Hall office located at 4208 Ebenezer Road,
Baltimore, Maryland on Wednesday, February 12, 2003, at 4:00 p.m., eastern time.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting, we will
also report on the operations of Baltimore County Savings Bank, F.S.B. (the
"Bank"), the Company's wholly owned subsidiary. Directors and officers of the
Company and the Bank will be present to respond to any questions the
stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN
THE ACCOMPANYING FORM OF PROXY AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO
ATTEND THE ANNUAL MEETING. Your vote is important, regardless of the number of
shares you own. This will not prevent you from voting in person but will assure
that your vote is counted if you are unable to attend the meeting.
On behalf of the Board of Directors and all the employees of the Company
and the Bank, I wish to thank you for your continued support.
Sincerely,
/s/ Gary C. Loraditch
Gary C. Loraditch
President
- --------------------------------------------------------------------------------
BCSB BANKCORP, INC.
4111 E. JOPPA ROAD, SUITE 300
BALTIMORE, MARYLAND 21236
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 12, 2003
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of BCSB Bankcorp, Inc. (the "Company") will be held at Baltimore
County Savings Bank, F.S.B.'s Perry Hall office located at 4208 Ebenezer Road,
Baltimore, Maryland on Wednesday, February 12, 2003, at 4:00 p.m., eastern time.
A Proxy Statement and Proxy Card for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon the
following matters:
1. The election of two directors of the Company for three-year terms;
2. The ratification of the appointment of Anderson Associates, LLP as
independent certified public accountants of the Company for the fiscal
year ending September 30, 2003; and
3. The transaction of such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The Board of Directors is not aware of any other business to come before
the Annual Meeting.
Any action may be taken on any one of the foregoing proposals at the Annual
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Annual Meeting may be adjourned. Stockholders
of record at the close of business on December 30, 2002, are the stockholders
entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof.
You are requested to fill in and sign the enclosed proxy card which is
solicited by the Board of Directors and mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Annual
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David M. Meadows
David M. Meadows
Secretary
Baltimore, Maryland
January 10, 2003
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
BCSB BANKCORP, INC.
4111 E. JOPPA ROAD, SUITE 300
BALTIMORE, MARYLAND 21236
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 12, 2003
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GENERAL
- --------------------------------------------------------------------------------
This Proxy Statement is furnished to stockholders of BCSB Bankcorp, Inc.
(the "Company") in connection with the solicitation by the Board of Directors of
the Company of proxies to be used at the Annual Meeting of Stockholders (the
"Annual Meeting") which will be held at Baltimore County Savings Bank, F.S.B.'s
Perry Hall office located at 4208 Ebenezer Road, Baltimore, Maryland on
Wednesday, February 12, 2003, at 4:00 p.m., eastern time, and at any adjournment
thereof. The accompanying Notice of Annual Meeting and proxy card and this Proxy
Statement are being first mailed to stockholders on or about January 10, 2003.
- --------------------------------------------------------------------------------
VOTING AND REVOCABILITY OF PROXIES
- --------------------------------------------------------------------------------
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by properly executed proxies
will be voted at the Annual Meeting and all adjournments thereof. Proxies may be
revoked by written notice to David M. Meadows, Secretary of the Company, at the
address shown above, by filing a later dated proxy prior to a vote being taken
on a particular proposal at the Annual Meeting or by attending the Annual
Meeting and voting in person. The presence of a stockholder at the Annual
Meeting will not in itself revoke such stockholder's proxy.
Proxies solicited by the Board of Directors of the Company will be voted in
accordance with the directions given therein. WHERE NO INSTRUCTIONS ARE
INDICATED, PROXIES WILL BE VOTED FOR THE NOMINEES FOR DIRECTORS SET FORTH BELOW
AND FOR THE OTHER PROPOSITION STATED. The proxy confers discretionary authority
on the persons named therein to vote with respect to the election of any person
as a director where the nominee is unable to serve or for good cause will not
serve, and matters incident to the conduct of the Annual Meeting. If any other
business is presented at the Annual Meeting, proxies will be voted by those
named therein in accordance with the determination of a majority of the Board of
Directors. Proxies marked as abstentions will not be counted as votes cast.
Shares held in street name which have been designated by brokers on proxies as
not voted will not be counted as votes cast. Proxies marked as abstentions or as
broker non-votes, however, will be treated as shares present for purposes of
determining whether a quorum is present.
- --------------------------------------------------------------------------------
VOTING SECURITIES AND SECURITY OWNERSHIP
- --------------------------------------------------------------------------------
The securities entitled to vote at the Annual Meeting consist of the
Company's common stock, par value $.01 per share (the "Common Stock").
Stockholders of record as of the close of business on December 30, 2002 (the
"Record Date") are entitled to one vote for each share of Common Stock then
held. As of the Record Date, there were 5,874,082 shares of Common Stock issued
and outstanding. The presence, in person or by proxy, of at least one-third of
the total number of shares of Common Stock outstanding and entitled to vote will
be necessary to constitute a quorum at the Annual Meeting.
Persons and groups beneficially owning more than 5% of the Common Stock are
required to file certain reports with respect to such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The following
table sets forth information regarding the shares of Common Stock beneficially
owned as of the Record Date by persons who beneficially own more than 5% of the
Common Stock, each of the Company's directors, including the executive officers
of the Company named in the Summary Compensation Table, set forth under
"Proposal I -- Election of Directors -- Executive Compensation -- Summary
Compensation Table," and all of the Company's directors and executive officers
as a group.
SHARES OF COMMON STOCK
BENEFICIALLY OWNED PERCENT OF
AT RECORD DATE (1) CLASS (2)
------------------ ----------
Persons Owning Greater than 5%:
------------------------------
Baltimore County Savings Bank, M.H.C. 3,754,960 63.92%
4111 E. Joppa Road, Suite 300
Baltimore, Maryland 21236
BCSB Bankcorp, Inc. 475,335 (3) 8.09
Employee Stock Ownership Plan et. al.
4111 E. Joppa Road Suite 300
Baltimore, Maryland 21236
Directors:
---------
H. Adrian Cox 14,387 *
Henry V. Kahl 11,467 *
Gary C. Loraditch 32,945 *
William M. Loughran 20,167 *
John J. Panzer, Jr. 17,092 *
P. Louis Rohe 21,138 *
Michael J. Klein 2,042 *
William J. Kappauf, Jr. 100 *
All directors and executive 136,611 2.30
officers of the Company
as a group (10 persons)
<FN>
______________
(1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, a
person is deemed to be the beneficial owner, for purposes of this table, of
any shares of Common Stock if he or she has or shares voting or investment
power with respect to such Common Stock. As used herein, "voting power" is
the power to vote or direct the voting of shares and "investment power" is
the power to dispose or direct the disposition of shares. Except as
otherwise noted, ownership is direct, and the named individuals and group
exercise sole voting and investment power over the shares of the Common
Stock. The listed amounts include 7,500, 7,500, 7,500, 7,500, 7,500, 7,500,
0, 0 and 45,000 shares that Directors Cox, Kahl, Loraditch, Loughran,
Panzer, Jr., Rohe, Klein and Kappauf and all directors and executive
officers of the Company as a group, respectively, have the right to acquire
upon the exercise of options exercisable within 60 days of the Record Date.
The listed amounts do not include shares with respect to which Directors
Henry V. Kahl, H. Adrian Cox and William J. Kappauf, Jr. have voting power
by virtue of their positions as trustees of the trusts holding 177,854
shares under the Company's Employee Stock Ownership Plan (the "ESOP") and
128,752 shares under the Baltimore County Savings Bank, F.S.B. (the "Bank")
Deferred Compensation Plan (the "DCP"), nor 59,800 shares as to which such
individuals share dispositive power by virtue of their positions as
directors of Baltimore County Savings Bank Foundation, Inc. (the
"Foundation"), nor 57,264 shares with respect to which Directors Kahl, Cox,
Panzer have voting power by virtue of their positions as trustees of the
Management Recognition Plan ("MRP") trust. ESOP shares are held in a
suspense account for future allocation among participants as the loan used
to purchase the shares is repaid. Shares held by the ESOP trust and
allocated to the accounts of participants are voted in accordance with the
participants' instructions, and unallocated shares are voted in the same
ratio as ESOP participants direct the voting of allocated shares or, in the
absence of such direction, in the ESOP trustees' best judgment. As of the
Record Date, 73,168 shares had been allocated. Shares held by the DCP trust
are voted in the same proportion as are the shares held by the ESOP trust.
The shares held by the MRP trust are voted in the same proportion as the
ESOP trustees vote
2
the shares held in the ESOP trust. Shares held by the Foundation are voted
in the same ratio as all other shares of Common Stock are voted. The shares
held by the DCP trust are held for the benefit of directors in the
following amounts: Mr. Cox, 13,703 shares; Mr. Kahl, 12,631 shares; Mr.
Loraditch, 8,199 shares; Mr. Loughran, 8,199 shares; Mr. Panzer 30,819
shares; Mr. Rohe, 17,580 shares; Mr. Klein, 793 shares; and Mr. Kappauf,
132 shares. Such directors bear the economic risk associated with such
shares.
(2) Based on a total of 5,874,082 shares of Common Stock outstanding at the
Record Date.
(3) Includes 177,854 shares owned by the ESOP, 128,752 shares owned by the DCP,
51,655 shares owned by the Bank's 401(k) Plan, 57,264 shares owned by the
MRP trust and 59,800 shares owned by the Foundation. Henry V. Kahl, H.
Adrian Cox and William J. Kappauf, Jr., who serve as directors of the
Company, serve as trustees of the ESOP and the DCP and serve as three of
the Foundation's seven directors. Such individuals share voting power over
shares held by the ESOP and the DCP and share dispositive power over shares
held by the DCP trust and the Foundation. Henry V. Kahl, H. Adrian Cox and
John J. Panzer, Jr. who serve as a directors of the Company, serve as
trustees of the MRP trust. The trustees of the MRP trust share voting and
dispositive power over the shares held by the MRP trust. The Bank is the
trustee of the 401(k) Plan assets invested in Common Stock, and in their
capacities as directors of the Bank, Messrs. Kahl, Cox and Kappauf share
voting and dispositive power over shares held by the 401(k) Plan. In their
individual capacity, such individuals disclaim beneficial ownership of
shares held by the ESOP, the DCP, the MRP trust, the 401(k) Plan and the
Foundation.
* Less than 1% of outstanding Common Stock.
</FN>
- --------------------------------------------------------------------------------
PROPOSAL I -- ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
GENERAL
The Company's Charter requires that directors be divided into three
classes, as nearly equal in number as possible, with approximately one-third of
the directors elected each year. At the Annual Meeting, two directors will be
elected for terms expiring at the 2006 Annual Meeting. The Board of Directors
has nominated Gary C. Loraditch and William J. Kappauf to serve as directors for
a three-year period. All nominees currently are members of the Board. Under
Federal law and the Company's Bylaws, directors are elected by a plurality of
the votes at a meeting at which a quorum is present.
It is intended that the persons named in the proxies solicited by the Board
of Directors will vote for the election of the named nominees. If any nominee is
unable to serve, the shares represented by all valid proxies will be voted for
the election of such substitute as the Board of Directors may recommend or the
size of the Board may be reduced to eliminate the vacancy. At this time, the
Board knows of no reason why any nominee might be unavailable to serve.
3
The following table sets forth, for each nominee for director and
continuing director of the Company, his age, the year he first became a director
of the Bank, which is the Company's principal operating subsidiary, and the
expiration of his term as a director. All such persons were appointed as
directors in 1998 in connection with the incorporation and organization of the
Company, except that Mr. Michael J. Klein was appointed a director of the
Company and the Bank on November 28, 2001 and William J. Kappauf was appointed a
director of the Company and the Bank on March 27, 2002. Each director of the
Company also is a member of the Board of Directors of the Bank.
YEAR FIRST
AGE AT ELECTED AS CURRENT
SEPTEMBER 30, DIRECTOR OF TERM
NAME 2002 THE BANK TO EXPIRE
---- ------- ---------- ---------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2006
Gary C. Loraditch 48 1991 2003
William J. Kappauf, Jr. 56 2002 2003
DIRECTORS CONTINUING IN OFFICE
Henry V. Kahl 59 1989 2005
P. Louis Rohe 80 1955 2005
Michael J. Klein 47 2001 2005
H. Adrian Cox 58 1987 2004
William M. Loughran 57 1991 2004
John J. Panzer, Jr. 60 1991 2004
Set forth below is biographical information concerning the Company's
directors. Unless otherwise stated, all directors have held the positions
indicated for at least the past five years.
GARY C. LORADITCH was named President of the Company, the Bank and the MHC
effective January 4, 1999. Previously, he served as Vice President, Secretary
and Treasurer of the Bank. He is a certified public accountant and an attorney.
Mr. Loraditch joined the Bank in 1974.
WILLIAM J. KAPPAUF, JR. is Director of Cash Management of Baltimore Gas &
Electric Company, Baltimore, Maryland. He is a certified public accountant.
HENRY V. KAHL is an Assessor Supervisor with the State of Maryland
Department of Assessments & Taxation in Baltimore, Maryland.
P. LOUIS ROHE has been retired for approximately 10 years. Prior to his
retirement, Mr. Rohe was an attorney. He has been a director of the Bank since
its incorporation in 1955.
MICHAEL J. KLEIN is Vice President of Klein's Super Markets, a family owned
chain of supermarkets, with locations throughout Harford County, Maryland. Mr.
Klein is also Vice President and partner in several other family owned
businesses including Forest Hill Lanes, Inc., Colgate Investments, LLP and
Riverside Parkway, LTD.
H. ADRIAN COX is an insurance agent with Rohe and Rohe Associates, Inc. in
Baltimore, Maryland. Mr. Cox also is employed as a real estate agent with
Century 21 Horizon Realty, Inc. in Baltimore, Maryland.
WILLIAM M. LOUGHRAN was named Senior Vice President of the Bank effective
January 4, 1999. He also serves as Vice President of the Company and Baltimore
County Savings Bank, M.H.C. (the "MHC"). Prior to being named Senior Vice
President, he served as Vice President of the Bank in charge of lending
operations. Mr. Loughran joined the Bank in 1973.
4
JOHN J. PANZER, JR. has been a self-employed builder of residential homes
since 1971.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following sets forth information with respect to executive officers of
the Company who do not serve on the Board of Directors.
AGE
AS OF THE
NAME RECORD DATE TITLE
---- ----------- -----
Bonnie M. Klein 47 Vice President and Treasurer of the Company and the Bank
David M. Meadows 46 Vice President, General Counsel and Secretary of the Company and the Bank
BONNIE M. KLEIN joined the Bank in 1975 and has served in various
capacities of increasing responsibility since then. She was named Vice President
and Treasurer of the Company and the Bank effective January 4, 1999. She is a
Certified Public Accountant.
DAVID M. MEADOWS was named Vice President, General Counsel and Secretary of
the Company and the Bank effective January 4, 1999. Previously, he was a Partner
in the law firm of Moore, Carney, Ryan and Lattanzi, L.L.C.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors of the Company and the Bank meet monthly and may
have additional special meetings. During the year ended September 30, 2002, the
Board of Directors of the Company met 14 times and the Board of Directors of the
Bank met 14 times. All directors attended at least 75% in the aggregate of the
total number of Company or Bank Board of Directors meetings held during the year
ended September 30, 2002 and the total number of meetings held by committees on
which he served during such fiscal year.
The Bank Board of Directors' Audit Committee consists of Directors Kahl,
Cox, Panzer and Kappauf. The members of the Audit Committee are "independent,"
as "independent" is defined in Rule 4200(a)(15) of the National Association of
Securities Dealers listing standards. The Committee met three times during the
year ended September 30, 2002 to examine and approve the audit report prepared
by the independent auditors of the Bank, to review and recommend the independent
auditors to be engaged by the Bank and to review internal accounting controls.
The Company's Board of Directors has adopted a written charter for the Audit
Committee.
The Bank Board of Directors' Executive Committee serves as the compensation
committee. The Executive Committee consists of Directors Cox, Kahl, Rohe,
Panzer, Klein and Kappauf. The Executive Committee evaluates the compensation
and benefits of the directors, officers and employees, recommends changes, and
monitors and evaluates employee performance. The Executive Committee reports its
evaluations and findings to the full Board of Directors and all compensation
decisions are ratified by the full Board of Directors. Directors of the Bank who
also are officers of the Bank abstain from discussion and voting on matters
affecting their compensation. The Executive Committee met 12 times during the
fiscal year ended September 30, 2002.
The Company's full Board of Directors acts as a nominating committee for
selecting the management nominees for election as directors of the Company in
accordance with the Company's Bylaws. In its deliberations, the Board,
functioning as a nominating committee, considers the candidate's knowledge of
the banking business and involvement in community, business and civic affairs,
and also considers whether the candidate would provide for adequate
representation of its market area. The Board of Directors met three times as a
nominating committee during the year ended September 30, 2002. The Company's
Bylaws set forth procedures that must be followed by stockholders seeking to
make nominations for directors. In order for a stockholder of the Company to
make any nominations, he or she must give written notice thereof to the
Secretary of the Company not less than 30 days nor
5
more than 60 days prior to the date of any such meeting; provided, however, that
if less than 40 days' notice of the meeting is given to stockholders, such
written notice shall be delivered or mailed, as prescribed, to the Secretary of
the Company not later than the close of business on the tenth day following the
day on which notice of the meeting was mailed to stockholders. Each such notice
given by a stockholder with respect to nominations for the election of directors
must set forth (i) the name, age, business address and, if known, residence
address of each nominee proposed in such notice; (ii) the principal occupation
or employment of each such nominee; and (iii) the number of shares of stock of
the Company which are beneficially owned by each such nominee. In addition, the
stockholder making such nomination must promptly provide any other information
reasonably requested by the Company.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the cash and
noncash compensation for the last fiscal year awarded to or earned by the
executive officers of the Company in fiscal 2002 that exceeded $100,000 for
services rendered in all capacities to the Company, the Bank and their
affiliates.
LONG-TERM COMPENSATION
--------------------------
AWARDS
ANNUAL COMPENSATION --------------------------
--------------------------------------- RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS(2) OPTIONS (#) COMPENSATION
- ------------------ ---- ------ ----- --------------- --------- ----------- ------------
Gary C. Loraditch 2002 $ 191,706 $ 28,493 -- $ 22,750 6,000 $21,850 (3)
President 2001 186,597 30,631 -- -- -- 21,219
2000 147,000 25,466 -- -- -- 19,852
William M. Loughran 2002 149,902 21,851 -- 22,750 6,000 19,054 (3)
Senior Vice President 2001 151,234 23,778 -- -- -- 18,219
2000 125,884 20,846 -- -- -- 16,616
David M. Meadows 2002 105,302 10,519 -- 11,375 3,000 14,234 (3)
Vice President, General 2001 100,497 11,444 -- -- -- 4,513
General and Secretary 2000 98,355 10,392 -- -- -- 1,295
Bonnie M. Klein 2002 92,994 8,483 -- 11,375 3,000 12,667 (3)
Vice President and 2001 85,998 6,129 -- -- -- 13,326
Treasurer 2000 78,000 8,085 -- -- -- 10,640
<FN>
_________________
(1) Executive officers of the Company receive indirect compensation in the form
of certain perquisites and other personal benefits. The amount of such
benefits received by the named executive officer in fiscal 2002 did not
exceed the lesser of 10% of the executive officer's salary and bonus or
$50,000.
(2) Amounts shown in the table are based on the average of the high and low
sales price of the Common Stock of $11.375 as quoted on the Nasdaq National
Market on the date of grant, July 24, 2002. The restricted Common Stock
awarded vests at the rate of 25% per year following the date of grant, with
the first 25% vesting on July 24, 2003. As of September 30, 2002, based on
the average of the high and low sale price of the Common Stock of $12.50,
as reported on the Nasdaq National Market, the aggregate value of the
unvested 3,425, 3,425, 1,000 and 1,000 shares of restricted Common Stock
held by Messrs. Loraditch, Loughran and Meadows and Ms. Klein,
respectively, was $42,813 $42,813, $12,500 and $12,500, respectively. In
the event the Company pays dividends with respect to its Common Stock, when
shares of restricted stock vest and/or are distributed, the holder will be
entitled to receive any cash dividends and a number of shares of Common
Stock equal to any stock dividends, declared and paid with respect to a
share of restricted Common Stock between the date the restricted stock was
awarded and the date the restricted stock is distributed, plus interest on
cash dividends, provided that dividends paid with respect to unvested
restricted stock must be repaid to the Company in the event the restricted
stock is forfeited prior to vesting.
(3) Amounts include $10,000, $7,204, $5,849 and $4,488 of matching
contributions paid by the Bank pursuant to the Bank's 401(k) Plan for the
benefit of Messrs. Loraditch, Loughran, Meadows and Ms. Klein,
respectively, and $11,850, $11,850, $8,385 and $8,179 in stock allocated to
the accounts of Messrs. Loraditch, Loughran, Meadows and Ms. Klein,
respectively, under the ESOP.
</FN>
6
Option Grants in Fiscal Year 2002. The following table contains information
concerning the grant of stock options during fiscal 2002 to each of the
executive officers listed in the Summary Compensation Table.
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS GRANTED ANNUAL RATES OF STOCK
UNDERLYING TO EMPLOYEES EXERCISE EXPIRATION PRICE APPRECIATION
NAME OPTIONS GRANTED (1) IN FISCAL YEAR PRICE(1) DATE FOR OPTION TERM (2)
- ---- ------------------- -------------- -------- ---------- ---------------------
5% 10%
------ -------
Gary C. Loraditch 6,000 7.8% $11.375 7/24/12 $42,900 $108,780
William M. Loughran 6,000 7.8 11.375 7/24/12 42,900 108,780
David M. Meadows 3,000 3.9 11.375 7/24/12 21,450 54,390
Bonnie M. Klein 3,000 3.9 11.375 7/23/12 21,450 54,390
<FN>
_____________
(1) Options vest at a rate of 25% per year following the date of grant, with
the first 25% becoming exercisable on July 24, 2003.
(2) Represents the difference between the aggregate exercise price of the
options and the aggregate value of the underlying Common Stock at the
expiration date of the options assuming the indicated annual rate of
appreciation in the value of the Common Stock as of the date of grant, July
24, 2002, based on the closing sale price of the Common Stock as quoted on
the Nasdaq National Market.
</FN>
Fiscal Year-End Option Values. The following table sets forth information
concerning the value as of September 30, 2002 of options held by the executive
officers named in the Summary Compensation Table set forth above.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
---------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Gary C. Loraditch 7,500 8,500 $ 33,750 $14,063
William M. Loughran 7,500 8,500 33,750 14,063
David M. Meadows -- 3,000 -- 3,375
Bonnie M. Klein -- 3,000 -- 3,375
<FN>
- -----------
(1) Calculated based on the product of: (a) the number of shares subject to
options and (b) the difference between the fair market value of underlying
Common Stock at September 30, 2002, determined based on the closing sale
price of the Common Stock of $12.50 as quoted on the Nasdaq National Market
System and the exercise prices of the options.
</FN>
No options were exercised by the named executive officers during fiscal
year 2002, and no options held by any executive officer of the Company repriced
during the past ten full fiscal years.
Change-in-Control Severance Agreements. The Bank's Severance Agreements
with Officers Loraditch, Loughran, Meadows and Klein (collectively, the
"Employees") have a term ending on the earlier of (a) 36 months after their
recent renewal on October 23, 2002 and (b) the date on which the Employee
terminates employment with the Bank. On each annual anniversary date from the
date of commencement of the Severance Agreements, the term of the Severance
Agreements may be extended for additional one-year periods beyond the then
effective expiration date upon a determination by the Board of Directors that
the performance of these individuals has met the required performance standards
and that such Severance Agreements should be extended. An Employee becomes
entitled to collect severance benefits under the Severance Agreement in the
event of the Employee's (a) voluntary termination of employment (i) within 30
days following a change of control or (ii) within 30 days of certain specified
events that both occur during the Covered Period (defined below) and constitute
a Change in Duties, or (b) involuntary termination of employment for any reason
other than "for Cause" during the period that begins 12 months before a change
in control and ends 18 months after a change in control (the "Covered Period").
Because the MHC owns 64.0% of the Company's outstanding Common Stock, it is
unlikely that there will be a change-in-control of the Company that would
trigger a payment obligation under the Severance Agreements.
7
In the event an Employee becomes entitled to receive severance benefits,
the Employee will (i) be paid an amount equal to (i) 2.99 times the annualized
base salary paid to the Employee in the immediately preceding 12-month period
(excluding board fees and bonuses) and (ii) will receive either cash in an
amount equal to the cost to the Employee of obtaining all health, life,
disability and other benefits which the Employee would have been eligible to
participate in through the second annual anniversary date of his termination of
employment or continued participation in such benefit plans through the second
annual anniversary date of his termination of employment, to the extent the
Employee would continue to qualify for participation therein. The Severance
Agreements provide that within 10 business days of a change of control, the Bank
shall fund, or cause to be funded, a trust in the amount necessary to pay
amounts owed to the Employees as a result of the change of control. The amount
to be paid to an Employee from this trust upon his or her termination is
determined according to the procedures outlined in the Severance Agreements, and
any money not paid to the Employee is returned to the Bank.
The aggregate payments that would be made to Officers Loraditch, Loughran,
Meadows and Klein, assuming termination of employment under the foregoing
circumstances at September 30, 2002, would have been approximately $1.4 million.
These provisions may have an anti-takeover effect by making it more expensive
for a potential acquiror to obtain control of the Company. In the event that one
of these Employees prevails over the Bank in a legal dispute as to the Severance
Agreement, he or she will be reimbursed for legal and other expenses.
DIRECTOR COMPENSATION
Fees. The Chairman of the Board of Directors receives a monthly retainer of
$1,250 per month, and all other nonemployee directors receive $1,000 per month.
Each nonemployee director also receives a fee of $250 per each regular and
special Board and committee meeting attended. Directors who serve as officers of
the Company or the Bank do not receive additional compensation for their service
as directors.
Deferred Compensation Plans. The Bank maintains a Deferred Compensation
Plan (the "DCP"), which is a restatement of the Bank's Directors' Retirement
Plan, for directors and select executive officers. The Bank also maintains a
Cash Deferred Compensation Plan (the "Cash DCP") for directors and select
executive officers. Prior to each plan year, each non-employee director may
elect to defer receipt of all or part of his future fees (including retainers),
and any other participant may elect to defer receipt of up to 25% of salary or
100% of bonus compensation. On each September 30 beginning with 1998, each DCP
participant who has between three and 12 years of service as a director will
have his account credited with $6,222. A participant who, after the DCP's
effective date, completes three years of service as a director, will have his
account credited with $24,000 on the September 30 following completion of three
years of service. The participant is entitled to elect to contribute deferred
amounts to the DCP or the Cash DCP, or to split deferred amounts between the DCP
and the Cash DCP in such percentages as the participant may elect. All amounts
credited to a participant's account under the DCP are converted into the right
to receive a fixed number of shares of Common Stock equal to the amount credited
divided by the market price of the Common Stock. Amounts credited to the
participant's account under the Cash DCP are credited with the investment return
which would have resulted if such amounts had been invested in the Bank's
highest annual rate of interest on certificates of deposit having a one-year
term. Each participant may make an election to receive Common Stock
distributions from the DCP and/or cash distributions from the Cash DCP, as the
case may be, either in a lump sum or in annual installments over a period up to
ten years. During the year ended September 30, 2002, the Bank credited $6,222
under the DCP and the Cash DCP to each of Directors Kahl, Loraditch, Loughran
and Panzer.
The Bank has established a grantor trust and may, at any time or from time
to time, make additional contributions to the trust. In the event of a change in
control, the Bank will contribute to the trust an amount sufficient to provide
the trust with assets having an overall value equal to the aggregate account
balances under the Plan. The trust's assets are subject to the claims of the
Bank's general creditors and are available for eventual payments to
participants.
Incentive Compensation Plan. The Bank's Board of Directors adopted the
Incentive Compensation Plan (the "ICP"), effective October 1, 1994. The ICP is
administered by the Executive Committee, which is appointed by the Bank's Board
of Directors. Under the ICP, each eligible director and employee receives annual
cash bonus awards based on the Bank's performance under criteria specified in
the ICP. In addition, pursuant to the terms of the ICP, directors are permitted
to make deferral elections, and to elect to have the rate of return on their
deferrals
8
measured by either the Multiplier times 1.5% or the highest 12-month CD rate.
During the year ended September 30, 2002, the Bank paid $3,302, $3,742, $28,492,
$21,851, $3,302, $3,210, $2,660 and $1,651 to Directors Cox, Kahl, Loraditch,
Loughran, Panzer, Rohe, Klein and Kappauf, respectively, pursuant to the ICP.
Stock Benefit Plans. Non-officer directors are eligible to receive awards
under the Company's stock option plan and MRP. During the year ended September
30, 2002, each director was granted options to acquire 6,000 shares of Common
Stock at an exercise price of $11.375 per share. The options have 10-year terms
and vest at the rate of 25% per year beginning on July 24, 2003. In addition, on
July 24, 2002, each director was granted 2,000 shares of restricted Common Stock
under the MRP. Based on the average of the high and low sales price for the
Common Stock as quoted on the Nasdaq National Market on the date of grant of
$11.375, the 2,000 shares of restricted Common Stock had a value of $22,750. The
restricted stock vests at the rate of 25% per year beginning on July 24, 2003.
Reimbursement for Tax Advice. The Bank's Board of Directors has also
adopted a policy to reimburse designated directors and officers for expenses
they incur in connection with professional tax, estate planning or financial
advice they obtain related to the benefits they receive under the stock and
non-stock related benefit plans of the Bank and the Company. Reimbursements are
limited to $1,000 for each eligible individual during any fiscal year, with a
one-time allowance not to exceed $5,000 for estate planning expenses. The level
of annual reimbursements may be increased to $2,000 on a one-time basis in the
event of a change in control of the Company. No reimbursements were made by the
Bank during the year ended September 30, 2002.
TRANSACTIONS WITH MANAGEMENT
The Bank offers loans to its directors and officers. These loans currently
are made in the ordinary course of business with the same collateral, interest
rates and underwriting criteria as those of comparable transactions prevailing
at the time and to not involve more than the normal risk of collectibility or
present other unfavorable features. Under current law, the Bank's loans to
directors and executive officers are required to be made on substantially the
same terms, including interest rates, as those prevailing for comparable
transactions and must not involve more than the normal risk of repayment or
present other unfavorable features. Furthermore, all loans to such persons must
be approved in advance by a disinterested majority of the Board of Directors. At
September 30, 2002, the Bank had $689,000 in loans outstanding to directors and
executive officers.
Director Michael J. Klein is a member holding a 20% ownership interest in
Colgate Investments, LLC, a limited liability company that owns real property
that the Bank leases for a branch office site. The Bank paid $57,000 in rent to
Colgate Investments, LLC during the year ended September 30, 2002 and expects to
pay the same amount during the year ending September 30, 2003. The remaining 80%
of Colgate Investments, LLC is owned by Mr. Klein's immediate family members.
- --------------------------------------------------------------------------------
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors has heretofore renewed the Company's arrangements
with Anderson Associates LLP, independent public accountants, to be its auditors
for the 2003 fiscal year, subject to ratification by the Company's stockholders.
A representative of Anderson Associates, LLP will be present at the Annual
Meeting to respond to stockholders' questions and will have the opportunity to
make a statement if he or she so desires. The representative will also be
available to answer appropriate questions.
THE APPOINTMENT OF THE AUDITORS MUST BE APPROVED BY A MAJORITY OF THE VOTES
CAST BY THE STOCKHOLDERS OF THE COMPANY AT THE ANNUAL MEETING. THE BOARD OF
DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE APPROVAL OF THE
APPOINTMENT OF AUDITORS.
9
- --------------------------------------------------------------------------------
REPORT OF THE AUDIT COMMITTEE
- --------------------------------------------------------------------------------
The Audit Committee of the Board of Directors (the "Audit Committee") has:
1. Reviewed and discussed the audited financial statements for the fiscal
year ended September 30, 2002 with the management of the Company.
2. Discussed with the Company's independent auditors the matters required
to be discussed by Statement of Accounting Standards No. 61, as the
same was in effect on the date of the Company's financial statements;
and
3. Received the written disclosures and the letter from the Company's
independent auditors required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees), as the same
was in effect on the date of the Company's financial statements.
Based on the foregoing materials and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements for
the fiscal year ended September 30, 2002 be included in the Company's Annual
Report on Form 10-KSB for the year ended September 30, 2002.
Members of the Audit Committee
Henry V. Kahl
H. Adrian Cox
John J. Panzer, Jr.
William J. Kappauf, Jr.
- --------------------------------------------------------------------------------
AUDIT AND OTHER FEES PAID TO INDEPENDENT ACCOUNTANT
- --------------------------------------------------------------------------------
AUDIT FEES
During the fiscal year ended September 30, 2002, the aggregate fees billed
for professional services rendered for the audit of the Company's annual
financial statements and the reviews of the financial statements included in the
Company's Quarterly Reports on Form 10-QSB filed during the fiscal year ended
September 30, 2002 were $76,675, of which $16,975 has been billed through
September 30, 2002.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not engage Anderson Associates, LLP to provide advice to
the Company regarding financial information systems design and implementation
during the fiscal year ended September 30, 2002.
ALL OTHER FEES
For the fiscal year ended September 30, 2002, the aggregate fees paid by
the Company to Andersen Associates, LLP for all other services (other than audit
services and financial information systems design and implementation services)
were $32,125, of which $6,125 has been billed through September 30, 2002. All
other fees consist of tax return preparation and assistance with filings under
the Securities Exchange Act of 1934.
The Audit Committee has reviewed the non-audit services currently provided
by the Company's independent auditor and has considered whether the provision of
such services is compatible with maintaining the independence of the Company's
independent auditors.
10
- --------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Pursuant to regulations promulgated under the Exchange Act, the Company's
officers and directors and all persons who own more than ten percent of the
Common Stock ("Reporting Persons") are required to file reports detailing their
ownership and changes of ownership in the Common Stock (collectively, "Reports")
and to furnish the Company with copies of all such Reports that are filed. Based
solely on its review of such Reports or written representations that no such
Reports were necessary that the Company received in the past fiscal year or with
respect to the past fiscal year, management believes that during fiscal year
2002 all Reporting Persons have complied with these reporting requirements.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described above in this proxy statement
and matters incident to the conduct of the Annual Meeting. However, if any other
matters should properly come before the Annual Meeting, it is intended that
proxies in the accompanying form will be voted in respect thereof in accordance
with the determination of a majority of the Board of Directors.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation
therefor.
The Company's 2002 Annual Report to Stockholders, including financial
statements, is being mailed to all stockholders of record as of the close of
business on the Record Date. Any stockholder who has not received a copy of such
Annual Report may obtain a copy by writing to the Secretary of the Company. Such
Annual Report is not to be treated as a part of the proxy solicitation material
or as having been incorporated herein by reference.
11
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
For consideration at the Annual Meeting, a stockholder proposal must be
delivered or mailed to the Company's Secretary no later than January 20, 2003.
In order to be eligible for inclusion in the proxy materials of the Company for
the Annual Meeting of Stockholders for the year ending September 30, 2002, any
stockholder proposal to take action at such meeting must be received at the
Company's executive offices at 4111 E. Joppa Road, Suite 300, Baltimore,
Maryland 21236 by no later than September 12, 2003. Any such proposals shall be
subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934, as amended.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David M. Meadows
David M. Meadows
Secretary
January 10, 2003
Baltimore, Maryland
- --------------------------------------------------------------------------------
ANNUAL REPORT ON FORM 10-KSB
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2002 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE
FURNISHED WITHOUT CHARGE TO EACH STOCKHOLDER AS OF THE RECORD DATE UPON WRITTEN
REQUEST TO THE CORPORATE SECRETARY, BCSB BANKCORP, INC., 4111 JOPPA ROAD, SUITE
300, BALTIMORE, MARYLAND 21236.
12
REVOCABLE PROXY
BCSB BANKCORP, INC.
BALTIMORE, MARYLAND
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 12, 2003
The undersigned hereby appoints the Board of Directors, with full powers of
substitution, to act as attorneys and proxies for the undersigned, to vote all
shares of the common stock of BCSB Bankcorp, Inc. which the undersigned is
entitled to vote at the Annual Meeting of Stockholders, to be held at Baltimore
County Savings Bank, F.S.B.'s Perry Hall office located at 4208 Ebenezer Road,
Baltimore, Maryland, on Wednesday, February 12, 2003, at 4:00 p.m. (the "Annual
Meeting"), and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
--- --------
1. The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
Gary C. Loraditch
William J. Kappauf, Jr.
INSTRUCTION: TO WITHHOLD YOUR VOTE
FOR ANY OF THE INDIVIDUALS NOMINATED, INSERT
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
___________________________________
FOR AGAINST ABSTAIN
--- ------- -------
2. Proposal to ratify the appointment of
Anderson Associates, LLP as independent
certified public accountants of the Company
for the fiscal year ending September 30, 2003 [ ] [ ] [ ]
The Board of Directors recommends a vote "FOR" the listed propositions.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT THE ANNUAL MEETING, INCLUDING MATTERS RELATING TO THE CONDUCT OF
THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN
ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS. AT
THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE ANNUAL MEETING.
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual Meeting
or at any adjournment thereof, then the power of said attorneys and prior
proxies shall be deemed terminated and of no further force and effect. The
undersigned may also revoke his proxy by filing a subsequent proxy or notifying
the Secretary of his decision to terminate his proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting and a Proxy Statement
dated January 10, 2003.
Dated:________________________________
_______________________________ _________________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
_______________________________ _________________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the enclosed card. When signing
as attorney, executor, administrator, trustee or guardian, please give your full
title. Corporation proxies should be signed in corporate name by an authorized
officer. If shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.