News Column

Deal for Rockport National faces Tuesday vote

July 18, 2014

By Arianna MacNeill, Gloucester Daily Times, Mass.

July 18--ROCKPORT -- The planned acquisition of Rockport National Bank by Newburyport-based Institution for Savings faces a key hurdle Tuesday, when Rockport National shareholders are scheduled to meet Tuesday and vote on the deal.

The two banks announced in mid-April that they planned to merge through a definitive agreement, pending shareholder approval.

Now it's time for the shareholders to decide the fate of the Rockport-based bank, which has been doing business there since 1851. The special meeting is slated for 10 a.m. Tuesday at the Shalin Liu Performance Center.

"It's important for everyone to get out and vote," said Michael Shea, vice chairman of Rockport National's Board of Directors.

Rockport National has roughly 200 shareholders, Shea said, and those shareholders own just over 204,000 shares in the bank's stock, he added.

A two-thirds majority vote is needed for merger approval, according to a letter from Shea to shareholders dated June 23. However, the vote is based on two-thirds of the stock representation, the letter states -- not two-thirds of the shareholders themselves.

"Each shareholder's vote is extremely important, because the proposal to approve the merger agreement requires the favorable vote of two-thirds of all outstanding shares to be approved," Shea wrote in the letter.

The letter indicates that, if a shareholder turns in a proxy card without checking "yea" or "nay," the vote will be counted as in favor. By the same token, the shares of those who do not vote at all will be considered automatically against.

While shareholders can vote at the meeting, all were reportedly sent a packet with proxy cards to use to vote before the meeting. Voting can also be done via Internet or phone, according to the letter, through the board's proxy solicitor, Morrow and Co., LLC.

In the past, Shea said only around 10 shareholders have shown up for meetings. But because of the nature of this meeting, he believes attendance will break the previous record.

"Hopefully, they'll come," he said.

If the merger is approved, all Rockport National branches -- two in Rockport, and one each in Gloucester and Beverly -- will soon carry the Institution for Savings name. Completion of the deal, if approved, is anticipated during the last quarter of this year.

While the merger may be the main point of interest on the proxy cards and at the meeting, Shea noted that shareholders will also vote to allow the meeting to adjourn and continue at a later time if the two-thirds majority vote requirement isn't met. That would allow both sides to try to get more supporters, he said.

For those holding Rockport National stock, Institution for Savings promises to buy each share at $138.58, according to the pending agreement. That figure is pegged at $69.08 more than the stock's highest sales price over the last two years of $69.50.

Outside of the group of shareholders, however, some have voiced concerns of what will happen if Rockport National is no more.

Judy Bogage, a Rockport resident who used to work at Rockport National, has said she's concerned that Institution for Savings may not have the same community presence that Rockport National has had for over a century and a half.

"I feel the bank is part of the fabric of Rockport and I just don't feel that an institution ... can take the place of the fact that we're so personal," she said.

Some voiced similar concerns that losing the bank that bears the town's name is like giving up an important part of it. Others said they were concerned for Rockport National employees keeping their jobs.

Shea, however, said Institution for Savings plans to keep most Rockport National personnel.

"The vast majority -- 98 percent -- of the employees will be retained if they wish to be retained," he said.

As for the community, Shea said Institution plans to set a up a $2 million charitable fund to give money to local causes, noting that it is planned to have local board membership.

"I'm fairly sure that will not go away," Shea said of the bank's role in the community.

Though Shea and the board have spoken favorable of the merger, he did say the possible merger is bittersweet.

"It's a happy time and it's a sad time," he said. "It's difficult, but I think when you look at all the aspects ... with Institution for Savings taking over, it's probably the best thing to do."

Arianna MacNeill can be reached at 978-675-2710 or at Follow her on Twitter at @GDTArianna.


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Source: Gloucester Daily Times (MA)

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