CALVIN B. TAYLOR BANKSHARES, INC.
P. O. Box 5, 24 North Main Street, Berlin, Maryland 21811
To the Shareholders of Calvin B. Taylor Bankshares, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of
Calvin B. Taylor Bankshares, Inc. of Berlin, Maryland (the "Company")
will be held at 24 North Main Street, Berlin, Maryland 21811, on Wednesday,
May 11, 2005, at 2:00 p.m., local time, for the following purposes:
1. To elect the Directors of the Company, who shall serve for a one-year
term, and until their respective successors are elected and have qualified.
2. To ratify the appointment of Rowles & Company, LLP as the independent
auditors for Calvin B. Taylor Bankshares, Inc., and Calvin B. Taylor Banking
Company of Berlin, Maryland for the fiscal year ending December 31, 2005.
3. To transact other business as may properly come before the Meeting.
The accompanying Proxy Statement provides a detailed description of the
items to be voted on, certain financial statements of the Company, and other
matters to be considered at the Meeting.
The Board of Directors has carefully reviewed and considered the
proposals for election, and recommends the Shareholders of the Company TO
APPROVE, RATIFY AND CONFIRM the items contained in the Proxy Statement.
Only Shareholders of the record date, at the close of business on
March 18, 2005 are entitled to notice of and to vote at the annual meeting or
any adjournment thereof. Your vote on these matters is very important. We
urge you to carefully review the enclosed materials and return your Proxy
promptly.
You are cordially invited to attend this meeting of Calvin B. Taylor
Bankshares, Inc. of Berlin, Maryland. Whether or not you plan to attend the
Meeting, please sign and promptly return the Proxy in the enclosed postage
paid envelope. If you attend the meeting, you may vote in person if you so
desire, even though you have previously returned your Proxy.
Sincerely,
/s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chief Executive Officer
Chairman of the Board of Directors
Berlin, Maryland
March 15, 2005
CALVIN B. TAYLOR BANKSHARES, INC.
P. O. Box 5, 24 North Main Street, Berlin, Maryland 21811
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder(s) hereby appoints Reese F. Cropper, Jr. and
William H. Mitchell, and each of them, proxies, with the powers that the
undersigned would possess if personally present, and with the full power of
substitution ___________________________ (substitution name, if any), to vote
all shares of the undersigned in Calvin B. Taylor Bankshares, Inc. at the
annual meeting of shareholders to be held on Wednesday, May 11, 2005, at
2:00 p.m., and at any and all adjournments and postponements thereof, upon
all subjects that may properly come before the meeting, including matters
described in the proxy statement furnished herewith, subject to any directions
indicated below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES, AND FOR THE
RATIFICATION OF AUDITORS.
1. Election of the following nominees as Directors:
James R. Bergey, Jr. George H. Bunting, Jr. John H. Burbage, Jr.
Reese F. Cropper, Jr. Reese F. Cropper, III Hale Harrison
Gerald T. Mason William H. Mitchell Joseph E. Moore
Michael L. Quillin,Sr. D. Bruce Rogers Raymond M. Thompson
To vote your shares for all Director nominees, mark the "For" space with
an "X". To vote against all nominees, mark the "Against" space with an "X".
If you do not wish your shares voted "For" a particular nominee, mark the
"For All Except" space with an "X", and strike the name(s) above by drawing
a line through the name(s) of each Director nominee you do not wish to vote
for.
________FOR ________AGAINST ________FOR ALL EXCEPT
2. Ratification of Auditors:
The Board of Directors has appointed Rowles & Company, LLP, Certified
Public Accountants, independent auditors for Calvin B. Taylor Bankshares, Inc.
and Calvin B. Taylor Banking Company of Berlin, Maryland, for the year ending
December 31, 2005. To vote your shares in favor of the ratification of the
appointment of Rowles & Company, LLP, as independent auditors, mark the "For"
space with an "X". If you wish to vote against the ratification, mark the
"Against" space with an "X". If you wish to abstain from voting, mark the
"Abstain" space with an "X".
________FOR ________AGAINST ________ABSTAIN
3. At their discretion, to vote upon such matters as may properly come
before the Annual Meeting.
_________________________________________ Date__________
Shareholder sign on above line and date
_________________________________________ Date__________
Co-shareholder sign on above line and date
CALVIN B. TAYLOR BANKSHARES, INC.
P. O. Box 5, 24 North Main Street, Berlin, Maryland 21811
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 11, 2005
This proxy statement is furnished to the shareholders of Calvin B.
Taylor Bankshares, Inc. (the "Company") in connection with the solicitation
of proxies by the Board of Directors of the Company, to be voted at the Annual
Meeting of Shareholders. The Annual Meeting of Shareholders will held on
Wednesday, May 11, 2005 at 2:00 p.m. and at any adjournment or postponement
thereof, for the purposes set forth in this Proxy Statement. The principal
Executive Office of the Company is 24 North Main Street, Berlin, Maryland
21811. The Proxy Statement and the accompanying Form of Proxy were first
mailed to the shareholders on or about April 1, 2005.
VOTING AND REVOCABILITY OF PROXY APPOINTMENTS
The Company has fixed March 18, 2005, as the record date (the "Record
Date") for determining the shareholders entitled to notice of and to vote at
the meeting. The Company's only stock is its Common Stock, par value $1.00
per share (the "Common Stock"). At the close of business on the Record Date,
there were outstanding and entitled to vote 3,206,884 shares of Common Stock
of the Company, with each share being entitled to one vote. There are no
cumulative voting rights. A majority of the outstanding shares of Common
Stock represented at the Meeting, in person or by proxy, will constitute a
quorum.
All proxies will be voted in accordance with the instructions contained
in the proxies. If no choice is specified, proxies will be voted "FOR" the
re-election of the Board of Directors of all nominees listed below under
"ELECTION OF DIRECTORS," "FOR" the ratification of the appointment of Rowles
and Company, LLP, as independent auditors for the Company for the fiscal year
ending December 31, 2005, and at the proxy holder's discretion, on any other
matter that may properly come before the Meeting. Any shareholder may revoke
a proxy given pursuant to this solicitation prior to the Meeting by delivering
an instrument revoking it, or by delivering a duly executed proxy bearing a
later date, to the Secretary of the Company. A shareholder may elect to
attend the meeting and vote in person even if he or she has a proxy
outstanding.
Management of the Company is not aware of any other matter to be
presented for action at the meeting other than those mentioned in the Notice
of Annual Meeting of Shareholders and referred to in this Proxy Statement.
If any other matters come before the meeting, it is the intention of the
persons named in the enclosed Proxy to vote on such matters in accordance
with their judgment.
SOLICITATION
The costs associated with preparing, assembling, and mailing the proxy
materials and of reimbursing those aforementioned for the out-of-pocket and
clerical expenses of transmitting copies of the proxy materials to the
beneficial owners of shares held of record will be borne by the Company.
ELECTION OF DIRECTORS
Article II of the Company's Articles of Incorporation, and Section 2.03
of the Company's Bylaws, as amended, provide that the Company's Board of
Directors, each thereof, shall serve a one-year term. Furthermore, the
aforementioned shall be elected at the Annual Meeting of Shareholders.
It is the intention of the persons named as proxies in the accompanying
proxy to vote FOR the election of the nominees identified below to serve for
a one-year term, expiring at the 2006 Annual Meeting of Shareholders. Should
any nominee be unable or fail to accept nomination or election (which is not
anticipated), the persons named as proxies in the proxy, unless otherwise
specifically instructed in the proxy, will vote for the election in his stead
for any such other person as the Company's existing Board of Directors may
recommend.
Directors shall be elected by a plurality of the votes cast at the
meeting. Abstentions will not be considered to be either affirmative or
negative votes.
The table below sets forth certain information about the nominees and
officers, including age, position with the Company, and position with Calvin
B. Taylor Banking Company (the "Bank"). All of the nominees are incumbent
Directors of the Company and the Bank. The current term of all of the
incumbent directors expires in May 2005 upon election of their successors.
Title or Position Title or Position
Name Age with the Company with the Bank
James R. Bergey, Jr. 50 Director, Director,
first elected 10/31/95 first elected 02/04/94
Senator George H. Bunting, Jr.
60 Director, Director,
first elected 05/03/00 first elected 05/03/00
John H. Burbage, Jr. 62 Director, Director,
first elected 10/31/95 first elected 02/04/87
Reese F. Cropper, Jr. 63 Director Director
first elected 10/31/95 first elected 03/06/74
Chairman of the Board Chairman of the Board
Chief Exec. Officer Chief Exec. Officer
Reese F. Cropper, III 44 Director, Director,
first elected 05/03/00 first elected 05/03/00
Hale Harrison 57 Director, Director,
first elected 10/31/95 first elected 01/08/75
Gerald T. Mason 57 Director, Director,
first elected 10/31/95 first elected 02/02/94
William H. Mitchell 55 Director, Director,
first elected 05/05/99 first elected 05/05/99
Vice President Sr. Vice President, Cashier,
Chief Financial Officer
Joseph E. Moore 62 Director, Director,
first elected 10/31/95 first elected 11/03/76
Michael L. Quillin, Sr.65 Director, Director,
first elected 10/31/95 first elected 12/06/78
D. Bruce Rogers 48 Director, Director,
first elected 05/03/00 first elected 05/03/00
Raymond M. Thompson 42 Director, Director,
first elected 05/08/02 first elected 05/08/02
President President
Mr. James R. Bergey, Jr. is a Certified Public Accountant and a Principal
in Bergey & Co., P.A., in Berlin, Maryland. He is a member of the Board of
Directors of the Community Foundation of the Eastern Shore. Mr. Bergey serves
on the Finance Committee of Atlantic General Hospital in Berlin, Maryland and
is past Chairman of that Board.
Senator George H. Bunting, Jr. was elected State Senator of the 20th
Senatorial District in November 1996. His district covers Delaware's
southeastern corner and includes much of Delaware's ocean coast from Rehoboth
southward to the Maryland State Line at Fenwick Island, inland to Selbyville
and north of Millsboro. Senator Bunting currently serves on the Natural
Resources Committee, Budget Committee, and is Chairman of the Agricultural
Committee and Veterans' Affairs Committee.
Mr. John H. Burbage, Jr. is an owner of Mystic Harbour Development Co.,
Mystic Harbour Utility Co., Bethany Land Co., Bayside Realty, Burbage
Properties, and Blue Water Development Company. He is also a partner in
Holiday House, LLC, Bethany Beach, Delaware.
Mr. Reese F. Cropper, Jr. has been employed by the Bank since May 1962
and was elected President in January 1974. He became President and Chief
Executive Officer of the Company on October 31, 1995. In May 2002,
Mr. Cropper was elected Chairman of the Board of Directors of the Bank and
the Company. Also, in May 2002, he resigned from the presidency of the
Bank and Company, remaining Chief Executive Officer. Mr. Cropper serves on
the Executive Committee of the Bank. Mr. Cropper is a past President of
the Maryland Bankers Association and he served a six-year term as a member
of the Banking Board of the State of Maryland from 1983 to 1989. He is also
a "Corporation Member" of Atlantic General Hospital and a Director of Ocean
City Golf and Yacht Club, partner in the Atlantic Hotel, Berlin, Maryland and
Holiday House, LLC, Bethany Beach, Delaware, and owns several rental
properties in the Berlin-Ocean City area.
Mr. Reese F. Cropper, III is owner of the Ocean City division of ISG
International, Inc., an insurance agency. He serves on the Board of Trustees
of Worcester Preparatory School, Berlin, Maryland.
Mr. Hale Harrison owns and operates Harrison Group Resort Hotels in Ocean
City, Maryland. Mr. Harrison is a former councilman and secretary for the
Town of Ocean City and former Chairman of the Ocean City Planning and Zoning
Commission. He is past Chairman of the Board of Directors and a member of the
Finance Committee of Atlantic General Hospital.
Mr. Gerald T. Mason is the Chief Administrative Officer for Worcester
County Government and a member of the Tri-County Council for the Lower Eastern
Shore.
Mr. William H. Mitchell has been employed by the Bank since June 1970
and was named as its Cashier on February 5, 1986. He became Senior Vice
President and Chief Financial Officer of the Bank on January 6, 1999. He
became Vice President of the Company on February 3, 1999. Mr. Mitchell is a
member of the Berlin Lions Club and serves as a Trustee and the Treasurer of
the Humphreys Foundation, Inc.
Joseph E. Moore, Esq. is a partner in the law firm of Williams, Moore,
Shockley & Harrison, LLP with offices in Ocean City and Ocean Pines. He is a
member of the Board of Directors of Atlantic General Hospital, and a member of
the Board of Trustees of the Worcester Preparatory School. He is the Chairman
of the Board of Zoning Appeals for the Town of Berlin. Mr. Moore also serves
on the Board of Directors of Chesapeake Utilities Corporation of Dover,
Delaware, and the Board of Directors for the Nabb Research Center for Delmarva
History & Culture at Salisbury University. Mr. Moore is a fellow in the
American College of Trial Lawyers.
Mr. Michael L. Quillin, Sr. is retired from the motel business in Ocean
City, Maryland. He owns and operates Michael L. Quillin Enterprises, Inc., a
property management and construction business. Mr. Quillin is a Director and
Treasurer of the Quillin Foundation. He is a member of the Ocean City Chamber
of Commerce, and President of the Ocean City Golf and Yacht Club.
Mr. D. Bruce Rogers is the owner of Sherwood of Salisbury (Maryland) and
Sherwood's Holly Kia of Selbyville, Delaware. Mr. Rogers serves on the Board
of the Community foundation of the Eastern Shore, the Franklin P. Perdue School
of Business Dean's Advisory Council, and the Maryland Business Council. In the
past, he has served as a Director of the Maryland Auto Trade Association and
the Board of the Ford Washington Dealer Council.
Mr. Raymond M. Thompson was employed by the Bank in October 1997 as an
Assistant Vice President and Loan Officer. He was promoted to Vice President
of the Bank on January 6, 1999, and became Treasurer of the Company on
February 2, 2000. Mr. Thompson was elected President of the Bank and the
Company in May 2002. Mr. Thompson serves on the boards of the Southern
Eastern Shore Revolving Loan Fund and the Maryland Financial Bank. He is
also a "Corporation Member" of Atlantic General Hospital, serving on the
Hospital's investment committee. Mr. Thompson is also a member and past
Treasurer of the Berlin Lions Club.
The following Directors have a family relationship: Reese F. Cropper, Jr.
is the father of Reese F. Cropper, III and Joseph E. Moore is a cousin to the
Croppers.
None of the directors or officers of the Company or the Bank have been
involved in any administrative proceedings or convicted of any crime.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTIONS OF THE NOMINEES
NAMED ABOVE.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Executive Officer Compensation
The table below presents a summary of the compensation for the last three
fiscal years of executive officers of the Company and Bank who received an
annual salary and bonus that exceeded $100,000 during that period.
Other
Name and Principal Position Year Salary Bonus Compensation (1)
Reese F. Cropper, Jr. 2004 $216,000 $ 28,600 $ 3,055
Chief Executive Officer and 2003 $216,000 $ 23,640 $ 3,969
Chairman of the Board 2002 $210,000 $ 8,400 $ 3,600
Raymond M. Thompson 2004 $112,000 $ 4,480 $ 2,870
President 2003 $100,000 $ 4,000 $ 2,675
William H. Mitchell 2004 $ 97,000 $ 3,880
Vice President
(1) Represents benefits paid by the bank in connection with the use of
an automobile.
Directors of the Company received a fee of $625 for each board meeting
attended and $625 for each of the Bank's Executive Committee meetings attended.
Total fees paid by the Company to Directors, excluding Mr. Cropper, Jr.,
Mr. Mitchell, and Mr. Thompson were $89,375 during 2004.
COMPLIANCE WITH BENEFICIAL OWNERSHIP RULES
Section 16(a) of the Securities Exchange Act of 1934 requires (i) the
Company's directors and executive officers and (ii) persons who own more than
10% of a registered class of the Company's equity securities to file with the
Securities Exchange Commission (the "SEC"), within certain specified time
periods, reports of ownership and changes in ownership. Such directors,
officers, and shareholders are required by the SEC regulations to furnish the
Company with copies of all such reports that they file.
To the Company's knowledge, based solely upon a review of such copies of
such reports furnished to the Company and representations that no other reports
were required with respect to the year ended December 31, 2004, all persons
subject to the reporting requirements of Section 16(a) filed the required
reports on a timely basis with respect to 2004.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The bank is legally represented by and engages Williams, Moore, Shockley,
and Harrison, LLP, of which Director of the Company, Joseph E. Moore, is a
partner. No legal fees were paid to Mr. Moore, and/or his legal firm by the
Company or Bank in 2004.
Management believes that the terms of all of the above-described
transactions are at least as favorable to the Company and the Banks as could
have been obtained in negotiating transactions with independent third parties.
PRINCIPAL BENEFICIAL OWNERS OF THE COMPANY'S COMMON STOCK
The following table sets forth the number and percentage of
outstanding shares of the Company's Common Stock beneficially owned by
(a) each executive officer of the Company, (b) each director of the
Company, (c) all directors and executive officers of the Company as a
group, and (d) each person or entity known to the Company to own more
than five percent of the outstanding Common Stock.
The percentage of outstanding shares owned is based on 3,208,478
shares of common Stock outstanding as of December 31, 2004.
Shares of Common Stock
Beneficially Owned
Name Relationship to Company Number Percent(1)
James R. Bergey, Jr. Director 8,288 .26%
George H. Bunting, Jr. Director 700 .02%
John H. Burbage, Jr. Director 95,959 2.99%
Reese F. Cropper, Jr. Director, Chairman 170,218 5.31%
Chief Executive Officer
Reese F. Cropper, III Director 3,394 .11%
Hale Harrison Director 49,968 1.56%
Gerald T. Mason Director 400 .01%
William H. Mitchell Director, 2,101 .07%
Vice President
Joseph E. Moore Director 3,451 .11%
Michael L. Quillin, Sr. Director 32,938 1.03%
D. Bruce Rogers Director 11,073 .35%
Raymond M. Thompson President 8,480 .26%
D. Kenneth Bates Secretary 515 .02%
Jennifer G. Hawkins Treasurer 400 .01%
All Directors and Officers as a Group 387,885 12.09%
Mary E. Humphreys None 196,344 6.12%
CEDE & Co. None 297,672 9.28%
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS AND OTHER
AUDIT DISCLOSURES
Subject to ratification by the shareholders, the Board of Directors has
appointed Rowles & Company, LLP (Rowles) as independent auditors to audit the
financial statements of the Company for the 2005 fiscal year. Rowles has
served as independent auditors for the Company since its formation in 1995.
Fees paid to Rowles for the last two fiscal year's annual audits and other
services are detailed in the table below. Audit Fees include services rendered
for the audit of the Company's annual financial statements and review of
financial statements included in the Company's quarterly public filings.
Audit-Related All Other
Year Audit Fees Fees Tax Fees Fees
2004 $ 26,800 $ - $ 2,220 $ -
2003 $ 25,100 $ - $ 4,278 $ -
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
ROWLES & COMPANY, LLP, AS INDEPENDENT AUDITORS.
AUDIT COMMITTEE MATTERS
The Audit Committee (the Committee) of the Board of Directors is comprised
of seven independent directors. The Board of Directors has adopted a written
Audit Policy, which serves as a charter for the Committee.
The Committee has discussed with Rowles the compatibility of non-audit
services with the auditors' independence and has received related disclosures
from Rowles. All services provided by Rowles are pre-approved by the Committee.
The Committee has reviewed and discussed the audited financial statements
with the Company's management. The Committee has discussed with Rowles the
scope and results of the audit. Based on these discussions, the Committee
recommends that the audited financial statements be included in the Company's
Annual Report and Form 10-K, which is filed with the Securities and Exchange
Commission.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING OF SHAREHOLDERS
Shareholders' proposals, intended to be presented at the 2006 Meeting of
Shareholders, must be received by the Company no later than December 7, 2005,
to be presented at the 2006 Annual Meeting of Shareholders or considered for
inclusion in the Company's Proxy statement for that meeting.
ANNUAL REPORTS
COPIES OF THE COMPANY'S ANNUAL REPORT ARE BEING MAILED TOGETHER WITH THIS
PROXY STATEMENT. THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO ANY
SHAREHOLDER OF RECORD AS OF MARCH 18, 2005, WHO SO REQUESTS IN WRITING A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) FOR
THE YEAR ENDED DECEMBER 31, 2004, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. ANY SUCH REQUESTS SHOULD BE DIRECTED TO WILLIAM H. MITCHELL,
VICE PRESIDENT, CALVIN B. TAYLOR BANKSHARES, INC., P.O. BOX 5, BERLIN,
MARYLAND 21811-0005.