The chairman of the board of USA Truck of Van Buren, Robert Peiser, has submitted his conditional resignation after failing to receive a majority of shareholder votes for re-election to the board at the company’s May 8 annual meeting, according to a truck company filing Wednesday.
The truck carrier’s remaining directors are in the process of deciding whether to accept Peiser’s resignation, which was required by company policy after the vote, according to the filing with the federal Securities and Exchange Commission.
The issue behind Peiser’s resignation was a shareholders’ advisory group’s disapproval regarding the date stockholders will vote on a shareholders’ rights plan, commonly known as a “poison pill.”
A poison pill typically kicks in when an unsolicited takeover starts. It often creates more stock, for sale at a discount, to other shareholders. A poison pill provision can make it more difficult and expensive for a takeover to succeed.
ISS Proxy Advisory Services of Rockville, Md., recommended shareholders withhold their votes on Peiser’s re-election after USA Truck decided stockholders wouldn’t vote until May 2014 on the poison pill, which was adopted last November.
“The board did not submit the poison pill to a shareholder vote at this year’s meeting, and does not plan to put it to a vote within 12 months of its adoption,” said an April 24 report by the shareholders’ advisory company. “ISS recommends that shareholders withhold votes from incumbent director nominee Robert A. Peiser for failure to submit the poison pill to a shareholder vote at this year’s annual meeting.”
The ISS report said its policy calls for companies such as USA Truck to submit a poison pill vote to shareholders within 12 months of adoption.
USA Truck hasn’t faced this issue before, said Chief Financial Officer Cliff Beckham, who said board members have 60 days to make a decision. “But in the market, this happens. It is not uncommon for the board to reject the resignation if the circumstances dictate it.”
Beckham said company directors believed a five-month window, from the poison pill adoption last November to this month’s meeting, wouldn’t give shareholders enough time to evaluate the company’s turnaround efforts. Peiser has been chairman since February 2012.
“The board … felt certain that the new management team would not have an opportunity to demonstrate what it was capable of producing in terms of results by May of 2013,” Beckham said. “The intent is not to prevent the changing of control of the company,” he said, but to keep shareholders from being deprived of “significantly greater long-term value.”
Peiser, a former chief executive officer and president of an air medical service provider company, got 3,425,810 votes for re-election to the board at the May 8 annual meeting. Withheld votes were 4,979,433.
Because Peiser received a plurality of votes cast, he was legally re-elected, Beckham said. But company policy requires the conditional resignation and reconsideration of the board if a board member doesn’t get a favorable majority vote.
The trucking company narrowed its net losses in the year’s first quarter to $2.5 million, or 24 cents per share on improved revenue, according to the company’s earnings statement issued May 6. The performance improved on last year’s first-quarter loss of $4.9 million, or 47 cents per share, and beat analysts’ average estimate.
Business, Pages 27 on 05/16/2013