Baltimore Bancorp, the target of a bitter proxy fight over control of the company, has announced that it will extend stockholder voting for directors on the board and other issues through noon next Tuesday to give shareowners a chance to digest recent developments in the battle.
The bank holding company's annual meeting was being held today at the Sheraton Inner Harbor Hotel.
Jerome Baroch, senior executive vice president for Baltimore Bancorp, said the bank decided to hold open the polls for stockholders in light of a decision yesterday by the Federal Reserve System and concerns by the Securities and Exchange Commission about possible stockholder confusion.
"This is to give the stockholder the opportunity to consider these developments," Baroch said.
Baltimore Bancorp, the parent of Bank of Baltimore, is the target of a takeover attempt by a 16-person group headed by Edwin F. Hale Sr., a Baltimore truck and shipping executive and owner of the Baltimore Blast soccer team.
In a proxy fight, a group tries to persuade shareholders to support its slate of candidates by sending in their votes before the annual meeting or casting them at the meeting.
Under the new arrangement, the annual meeting will be held today, then adjourned until 11 a.m. Tuesday. It then will remain in session for voting until noon, Baroch said. The reconvened meeting will be held at the bank's headquarters at 120 E. Baltimore St.
Yesterday, the dissident stockholders claimed a small victory with a decision by the Federal Reserve that the group is not violating banking regulations by staging a proxy fight. Baltimore Bancorp had asked the Federal Reserve to examine the issue, contending that the dissidents might be breaking regulations relating to changing the control of banks.
The meeting today was expected to provide a forum for the supporters and opponents of the dissident shareholders of the state's fifth-largest banking company.
Meanwhile, the bank yesterday announced its regular quarterly dividend of 15 cents a share payable July 1 to stockholders of record June 14.
The dissidents are trying to persuade the 4,300 shareholders, who hold a total of 12.8 million shares, to enlarge the company's board from 18 to 28 members and to elect the dissidents to the enlarged board.
The counting of the votes is complicated by the ability of stockholders to revoke previous votes and cast new ballots up to the time of the closing of the polls. Adding to possible stockholder confusion, three separate ballots have been mailed to shareholders -- the initial one April 9 by the company, one by the dissidents May 9 and a revised ballot by Baltimore Bancorp last Friday.
Even before today's meeting, the two sides have been filing suits against each other and running critical newspaper advertisements.
The Hale group has filed a protest with the SEC, contending that the bank is misrepresenting the record of some of the candidates. On the other side, Baltimore Bancorp filed a suit in U.S. District Court on Monday saying the Hale group was unfairly comparing the performance of the bank to a select group of high-earning banks.
The bank also has filed a suit in Baltimore Circuit Court saying that the candidacy of Robert A. Pascal, who is chairman of United Propane Inc. and also Gov. William Donald Schaefer's appointments secretary, is in violation of the state's public ethics law. Baltimore Bancorp contends that Pascal has indirect control over banks through his power to recommend regulators.
The issue of what percentage of votes is necessary to change the size of the board has yet to be resolved. An 80 percent requirement is in the company's bylaws. The dissidents say state law requires that such a re
striction be in the charter rather than in the bylaws.
However, federal Judge J. Frederick Motz ruled that the issue was a question of state law. The dissidents have asked that the case by shifted to the Maryland Court of Appeals.