Who will run Baltimore Bancorp remains an open question today in the wake of yesterday's annual shareholders' meeting, as both management and a slate of dissident director candidates claimed that they had won enough shareholder votes to control the parent company of the Bank of Baltimore.
The voting won't actually close until noon on Tuesday, since the company made a last-minute change to extend the polling, which had been slated to close at the meeting. But the fight still won't be over on Tuesday. Not only will it take several days, at the least, to validate and count the ballots, but the two sides also must resolve a dispute over who should do the counting.
The company said the Securities and Exchange Commission requested the extension of the voting to allow shareholders to digest news of the Federal Reserve's rejection of a management bid to disqualify some of the insurgent candidates, and to allow more time for shareholders to return a new set of ballots that management sent out last week.
Edwin F. Hale Sr., the leader of the dissident slate, said his group had won more than 5 million votes to elect six new rTC directors to the board, ousting management-backed incumbents. But management isn't giving up.
"We think we're over the top," said Jerome P. Baroch, executive vice president of Baltimore Bancorp. But he added, "Nobody knows. Proxies can be revoked. We'll continue to talk to shareholders, and they'll continue to talk to shareholders."
Mr. Hale, however, said he's going ahead with previous plans to take a weekend fishing trip.
"We believe the vote's over," said Daniel H. Burch, a proxy solicitor retained by Mr. Hale.
Mr. Burch said the dissidents also think they will win, by a smaller margin, a bid to expand the board to 28 members from 18, which would allow 10 unopposed candidates backed by Mr. Hale to join the board and give the Hale slate control of the company. But that issue will be decided in court, because Baltimore Bancorp says its bylaws require an 80 percent vote to expand the board of directors. The dissidents say it takes only a majority.
The company has about 12.8 million shares. The Hale camp, which has been more willing than management to discuss voting prospects, has projected that about 10 million of the shares will be voted -- either cast directly by shareholders or through proxies the holders grant to one side or the other to vote on their behalf.
The meeting itself, held at the Sheraton Inner Harbor Hotel, was more subdued than many expected. While the air was tense early, company Chairman Harry L. Robinson and Mr. Hale were polite to each other.
There was even a laugh when Mr. Hale nominated his slate of director candidates. No one immediately seconded the motion, and Mr. Robinson asked, "Is there a second?", playfully acting as if he didn't know the answer.
Shareholders favoring each slate stated their case. Management supporters generally praised the company for avoiding the travails of banks hammered by the national real estate slowdown, while dissidents said some banks not only had survived the slowdown but were much more profitable than Baltimore Bancorp.
The meeting, held in the hotel's largest ballroom, lacked the overcrowded, shouting atmosphere of last year's session, when shareholders criticized Mr. Robinson for spurning a $17-a-share takeover proposal from First Maryland Bancorp and a combative Mr. Robinson proclaimed that the company was not for sale.
"I thought it was going to be more lively," Mr. Hale admitted afterward.
"We just had what I think was an excellent meeting," Mr. Robinson said.
But by 10 minutes after the meeting, the verbal sparring that has marked the battle was back. Mr. Robinson dismissed Mr. Hale's claims of victory, insisting that Mr. Hale was mistaken in claiming the support of major institutional shareholders such as Legg Mason Inc. and First Maryland Bancorp, each of which owns between 4 percent and 5 percent of the company's shares.
Legg Mason and at least two other institutions voted to put six of Mr. Hale's candidates on the board but voted against expanding the board, Mr. Hale said.
When told of his rival's remarks, Mr. Hale said, "Jeez, Harry, give me a break."
Mr. Hale and Mr. Burch said that most of the major institutional shareholders supporting the Hale slate voted in the last two days, making it unlikely that they have since revoked their proxies and thrown their support to management.
"If anyone got revoked, it was them," Mr. Burch said.
Mr. Robinson added that the bank thinks that it is illegal for the insurgents to disclose how individual shareholders voted, a view that Mr. Burch disputed.
And Mr. Robinson accused the insurgents of spreading rumors that the meeting was going to be canceled or postponed. Mr. Hale denied that, saying that the rumors reflected confusion over management's decision to keep the polls open until next week, which the dissidents think reflects management's desperation to scrape up votes over the weekend.