A proxy fight, the second in as many years, appears likely at this fall's annual shareholder meeting of First Financial Corporation of Western Maryland.
Though the $330 million-asset Cumberland thrift agreed this week to its largest shareholder's demand that it explore the possibility of sale, its board on Wednesday refused to put any of his director nominees on the annual ballot.
"We are going into fight mode," said Charles Garcia, the lawyer for the shareholder, Seymour Holtzman, who owns 8.15% of outstanding shares. "This decision gives me more reason to believe that this thing with Alex. Brown could be just a smokescreen."
Mr. Garcia was referring to First Financial's announcement on Monday that it had hired Alex. Brown & Sons Inc. of Baltimore to explore strategic options, including sale.
That announcement came three weeks after Mr. Holtzman, of Boca Raton, Fla., asked the company do just that, in a Securities and Exchange Commission filing.
But the board on Wednesday rejected Mr. Holtzman's second proposal - to put one to three of his nominees on the annual ballot for election to the board.
At last year's annual meeting, Mr. Holtzman lost a proxy fight to get his director nominees elected, but succeeded in defeating a stock option plan for senior officials and directors.