Shareholders gathered today at Newcastle's Metro Radio Arena to help shape the company's future. Graeme Wearden was there to bring you the action from an extraordinary EGM.
Scroll down to see how the action unfolded
8.30am
As dawn breaks over the Tyne and drizzle gently falls, I arrive at the Metro Arena. It's an interesting looking place - from a distance away it resembles a giant wartime bunker with a green trim. A few protesters have gathered outside, but there's little sign of shareholders. Plenty of media, though.
It's soon clear that security has been set to levels of near paranoia. Photographers are corralled outside the building, forced to elbow each other aside for a shot through the entrance.
Inside, I'm quickly intercepted by a large security guard who makes me empty my bag of electronics. Exactly what is Northern Rock expecting to happen this morning?
9.15am
The auditorium is starting to fill up. This place holds rock concerts, so with an 11,000 capacity there could be lots of empty space. One estimate is that we'll get 1,000 shareholders today - and the company admits it doesn't know how long the EGM will run for or when we'll get the results of the votes.
9.45am
Back outside the Arena, the Unite union have organised a demonstration involving around 30 Northern Rock employees. They're kitted out in T-shirts that declare "Rock Solid", a claim they drive home by chanting "R-O-C-K solid".
The media scrum has built up, such that shareholders have to dodge questions as they slalom through the crowds into the building. Those we see aren't prepared to say how they'll be voting.
One Northern Rock employee stopped to chat - explained that he was joining in today's protest in an attempt to safeguard his job and pension. He doesn't like the sound of nationalisation - hoping that a private buyer might yet succeed.
9.50am
At a rough guestimate, there are around 300 people in the arena now, mostly wrapped up in coats, and the occasional hat. They look similar in age to the crowds we saw outside Northern Rock branches in September - mostly middle-aged and pensioners.
10.05am
Bryan Sanderson, chairman of Northern Rock, gets the EGM running by welcome the crowd of maybe 350 people for attending in such poor weather. He introduces several new directors - parachuted in like he was after Matt Ridley and Adam Applegarth left the building. "They have a wealth of financial knowledge," he claims [that's the new directors, not the old ones].
Sanderson embarks on a brief explanation of the Rock's recent turbulent time - saying he won't waste time with a thorough history.
10.15am
Here are the key early points from Sanderson's address:
- Northern Rock is in a unique situation. Its assets are sound, with no asset writedowns, apart from one Treasury writedown last autumn.
- The situation is "very serious, and it's important that everyone with a stake acts responsibility" - including the two hedge funds who organised today's EGM, presumably.
- "A satisfactory outcome is vital to keeping Northern Rock as an important north-east company and employer, and to maintain the UK's status as a centre of financial excellence. Indeed this may be the most important factor."
10.20am
Sanderson has just teased a chortle out of the audience, describing his job as "the second toughest job in Newcastle". Is sorting out Newcastle United trickier than saving Northern Rock? Sanderson, don't forget, used to help run local rivals Sunderland - maybe he shouldn't risk reminding his audience of that fact.
He also pays tribute to the Rock's employees, for working extremely professionally in these difficult times. "We've benefited from a Geordie backs-to-the-wall adversity".
On the issue of rescuing the bank ... he says the board is still on track to complete the review in February but concedes that the timing isn't under his control.
On the share price slump. "I am aware that the decline in share price has brought pain to shareholders ... We have you at the top of our minds on all occasions".
Sanderson moves onto two particular shareholders - RAB Capital and SRM, who forced today's meeting and tabled four resolutions that would prevent the bank's board from selling assets or issuing new shares.
"These additional restrictions are more likely to hamper the board's ability to rescue the bank, than to help it," Sanderson insists.
The chairman now gets much more personal, apologising for the legalese of his speech which made it "sound like it was translated from the German original" (the audience didn't like that joke as much as the football gag).
He compares his job to "navigating a minefield between two sides firing bullets and lobbing shells".
"It's tempting to run for cover, but if we did that we would not be doing our duty to shareholders, employees or taxpayers."
And with that, to polite applause, he hands over to Philip Richards of RAB and Jon Wood of SRM.
10.30am
Now it's the hedge funds - a collective who we rarely see in the spotlight.
RAB's Philip Richard's first - nattily dressed in a blue-and-white checked shirt and green and red tie.
He tells the gathering that passing the first four resolutions on the table would actually help the rescue process.
"We believe that however the vote turns out, the mood has changed from there being a view that shareholders should be wiped out, to now understanding that shareholders should have a vote," Richards claims.
He also outlines a bleak future if the Rock is nationalised (as Bryan Sanderson says is rather more likely if RAB's resolutions are passed).
"Who here really believes that Northern Rock would be allowed to grow aggressively? There's only one future under nationalisation - a slow fire sale, and as the business shrank the number of employees would shrink."
After taking a pop at the Bank of England for mishandling the credit markets, Richards finishes his address by saying that his "Christian beliefs" mean that he believes "that righteousness and justice are important".
And his fellow shareholders give him a fairly rousing round of applause - is the Northern Rock board going to lose this one?
10.50am
Now we have Jon Wood (white stripey shirt, no tie), the one-time star UBS trader who runs SRM - and who must have found the drizzly Newcastle weather a refreshing change after Monaco.
He gets an early cheer for thanking the employees, without which there wouldn't be any bank to fight over, ignores his lawyer's advice (he claims) by attacking Mervyn King for failing to save Northern Rock discretely, and insists that the Rock is a "great bank" (more applause).
Wood also denies that SRM are predators, revealing that it and RAB have offered very significant financial support to the board, Virgin and Olivant (the two firms still considering a takeover offer).
10.55am
Now Q&A time, our first shareholder, a Mr Crooks, starts by thanking Sanderson for his board's professional behaviour which he says should be applauded. Some scattered applause greets this - another indication that the audience isn't here to roll over.
He gets more support for demanding to know why the new directors haven't bought any shares. "Perhaps they should be paid in Northern Rock shares instead," he suggests, to chortling.
Sanderson admits this is the first time he's never owned shares in a bank he's been a director of. Says he didn't want the possibility of the new directors making a large profit if Northern Rock's shares soared once again.
11am
Bryan Sanderson fended off one shareholder, a Mr Shipley, who demanded to know why Sir Ian Gibson (senior director) was still picking up his £80,000 salary while other directors have quit. Gibson has "been working almost full-time, and been invaluable", the chairman says.
But then another shareholder (whose name I sadly didn't catch) who demanded to know why Adam Applegarth was allowed to make a fortune by selling Northern Rock shares last year before the crisis. Sanderson explains that by selling shares at £12, or whatever, Applegarth was simply doing what shareholders do with shares.
"That's a load of rubbish," our shareholder responds. "You must think we were dug up yesterday".
Did Applegarth have a better idea of Northern Rock's impending problems than other shareholders, she wonders?
"As long as he acted legally, there's nothing we can do about it," Sanderson responds, perhaps a tad warily.
"He's been a clever lad!" signs off his questioner, to more applause.
Another shareholder, Douglas Gibson, wanted to know how many directors sold shares last year - but we don't get that information until the AGM and annual report comes around. Might there be more grubby shocks ahead?
11.20am
Sanderson spoke earlier about the Geordie back-to-the-wall spirit, but he's now finding himself on the sharp end of some acerbic Geordie wit.
One shareholder, who concedes he's more used to barking orders than public speaking, wants the voting shaken up so that those present can vote on whether to reappoint the new board first. "This is the board's job interview", he barks.
Sanderson declines to shuffle the resolutions, explaining that the board decided to kick off with the hedge fund resolutions as the hedge funds called the meeting.
"I'm not sure I'd enjoy taking orders from you," he remarks.
The reply: "I"m a shareholder, so you have to!"
Another, called Michael Scott, has little time for the Board's claim that the hedge fund's resolutions would tie its hands. "We need you kept on a short leash - my son has a dog who benefits from being kept on a short leash," he says.
There's a lot of North East (hurt?) pride being expressed, and another speaker is unhappy that while the current board will benefit whatever happens, local people will be harmed if Northern Rock goes under.
"Just for the record, I grew up here," responds a grim-faced Sanderson, who might be forgiven for wondering whether taking the chairmanship was worth it.
11.40am
More people have been trickling into the hall since we started. Company sources just coughed up the official headcount - just under 650 shareholders have been signed in this morning. That's a small fraction of the roughly 180,000 small shareholders out there, but still many many more than at a typical AGM when there are often just a
few people scrapping over the sandwiches.
One of them wants to know whether the 14.2p a share dividend that was axed in October, once the run began on Northern Rock, might make a reappearance. Many in the audience mumble their support - clearly the sudden disappearance of this promised payout is a sore point.
In reply, the board says that "any future dividend will depend on the company's performance".
11.45am
Some 20 people have now spoken. Sanderson says that we're around half-way through the questions. In an attempt to get through the rest a bit faster (isn't he enjoying it?), he warns that there is only enough coffee and snacks for another hour.
Midday
Robin Ashby, representing the Northern Rock small shareholders group, now speaks - starting with an endorsement for the bank's Silver Saving account.
"It's a great savings rate, and it's as safe as the Bank of England," he jokes.
More seriously, Ashby asks to hear from the non-exec directors. Several of them speak - along the same lines, they think Northern Rock is a great business, that its near-collapse is a tragedy, and they hope it can be recovered.
12.10pm
Sanderson's threat of a refreshment famine has worked! We have our final questions.
One shareholder, Mark Hazeley, asks what a fair price for shares would be if the bank is nationalised. Sanderson suggests he asks Alistair Darling instead.
The final question, asking how much it would cost to remutualise the bank, leaves the board baffled. They promise to look into it and report back.
And now the voting...
12:15pm
Annoyingly, we aren't going to get the results of the resolution straight away. Everyone's been issued with electronic voting devices, and Sanderson says the results will be posted on the Northern Rock site this afternoon.
Adding to the slightly surreal atmosphere, we get a practice vote on whether the 2014 World Cup should be held in Newcastle. Once that has been roundly backed, we run through the nine resolutions and shareholders click away.
And that's it. With a final reminder to hand the electronic gismos back - "They don't work on televisions, you know" said Sanderson - the meeting is closed.
