MNC Financial Inc. yesterday held what was likely the company's last annual meeting, as a generally supportive and occasionally raucous crowd of shareholders voted overwhelmingly to sell Maryland's largest banking company to NationsBank Corp. of Charlotte, N.C.
NationsBank, America's fourth-largest banking company, has agreed to pay MNC's shareholders $1.36 billion, or $15.17 a share, in a combination of cash and NationsBank stock that will be paid when the merger is completed, probably by the end of the third quarter, officials said.
The merger, which awaits federal regulatory approval, required that at least two-thirds of MNC's 90.4 million outstanding shares be voted in favor of the deal. Nearly 75 percent of the shares, or 67.5 million, were voted in favor of the deal. About 22 percent of the shares did not vote.
MNC stock closed yesterday at $14.625, up 12.5 cents. NationsBank ended up 12.5 cents, to $46.25.
In his remarks to shareholders, Frank P. Bramble Sr., MNC's president and chief executive, recalled the tumultuous three-year run of bad loans, hard work and good luck that accompanied the near-demise and remarkable recovery of MNC and its main subsidiaries, Maryland National Bank and American Security Bank in Washington.
"It is no exaggeration to say Lerner saved this company from bankruptcy, and, if it were not for his efforts, there would be no company," Mr. Bramble said, referring to MNC's chairman, Alfred Lerner, and generating applause from the standing-room-only crowd of about 450 people.
In 1990, at the depths of its troubles, MNC lost nearly $440 million and had a $1.8 billion portfolio of nonperforming assets. Last year, the company reported earnings of $103 million, reduced nonperforming assets to less than $1 billion and negotiated to sell itself to NationsBank.
"I believe that our recovery is truly a clear victory by the people who have worked so hard," Mr. Bramble said of MNC's employees, whom he called "some of the finest bankers in this country."
Aside from introducing Mr. Bramble, Mr. Lerner remained silent during the 90-minute meeting, even when corporate gadfly Evelyn Y. Davis tried to monopolize the microphones set up to allow shareholders to speak their minds.
Among the minority who voted -- and spoke -- against the merger was Rick Remeikis, a former MNC employee who said he now works for Wachovia Bank in Delaware. "This merger is not the right thing," Mr. Remeikis said in a well-received five-minute speech. "It's not right for shareholders, for employees or for the community.
"The loss of the MN sign on the Baltimore skyline would be more than a symbolic loss," he said. "With a bit more patience, I think our company could turn around and earn our faith."
But several shareholders stood up for Mr. Lerner and Mr. Bramble. "I think it's patently unfair to sit here today in today's environment and say this is a bad deal," said Gary Fleming, who said he was a "long-term small shareholder" and a current MNC employee. "I don't think anyone would have said that a year ago."
"I would like to say God bless you, all of you," David Brown said. "You have made me a half-million dollars richer and allowed me to retire."
After the meeting, Mr. Lerner expressed regret over the often critical coverage his role and efforts have received. "One of our wise directors once gave me an expression," Mr. Lerner said. "No good deed goes unpunished."
Mr. Lerner was criticized by a few shareholders for, among other things, the provision that guaranteed him a tax-free exchange of stock. Because NationsBank has said that it will pay 50.1 percent of the purchase price in stock and 49.9 percent in cash, it is possible that some shareholders will not receive the form of payment they prefer.
But H. Rodgin Cohen, MNC's counsel for the deal, said the likelihood that anyone would receive unwanted cash instead of stock was very slim.
(If they receive unwanted stock, of course, they can just turn around and sell it, Mr. Lerner noted.) Morrow & Co., MNC's proxy solicitation agent, has estimated that 44 percent of shareholders will want stock and 56 percent will want cash.
Mr. Lerner, the company's second-largest shareholder, had pledged the support of his 7.36 million shares a year ago.
A question mark, however, had been the FMR Corp., the Boston-based parent of the Fidelity Investments mutual fund company, and MNC's largest stockholder, with 8.9 million shares. Despite hints that FMR might pressure NationsBank for a higher price, the company voted its shares in favor of the deal last week.
Neither MNC nor NationsBank officials offered any details yesterday about how the two companies would be consolidated.