USA Truck’s board of directors has rejected the conditional resignation of Chairman Robert Peiser - overriding concerns by a shareholders’ advisory group about the date stockholders will be allowed to vote on the company’s shareholders’ rights or “poison pill” provision.
“The Board determined unanimously that it would not be in the best interests of the company and its stockholders to accept Mr. Peiser’s resignation,” according to the trucker’s filing Monday with the federal Securities and Exchange Commission.
Peiser will remain a board member and chairman, a company spokesman said Monday.
The conflict came out of the USA Truck board’s adoption in November of a “poison pill” plan. Designed to thwart unwanted takeover attempts, the provision typically creates more stock at discounted prices for purchase by other shareholders. It discourages takeover attempts by driving up their difficulty and cost.
One of the nation’s biggest proxy advisers, ISS Proxy Advisory Services of Rockville, Md., asks that companies allow shareholders to vote on poison-pillprovisions within 12 months of their adoption.
USA Truck’s board decided holding the vote at this year’s annual meeting on May 8 was too soon to measure current management’s turnaround attempts. USA Truck has posted losses for the past six quarters, but narrowed its losses in the first quarter of this year to $2.5 million, or 24 cents per share, and beat analysts’ expectations.
Board members have said they plan to hold the poisonpill vote in May 2014.
As a result, an April 24 ISS report recommended USA Truck shareholders “withhold votes” from Peiser’s re-election nomination “for failure to submit the poison pill to a shareholder vote at this year’s annual meeting.”
Peiser, a former chief executive officer and president of an air-medical service provider company, got 3,425,810 votes for re-election, with 4,979,433 withheld. Because he didn’t receive a majority of favorable votes, company policy required his conditional resignation. Then a board committee and the full board - minus Peiser - had to decide whether to acceptthe resignation.
According to Monday’s filing, board members considered the ISS 12-month limit for a poison-pill vote, as opposed to the 17-month wait after adoption that shareholders face now with a May 2014 vote.
“The board believed that this small five-month difference was warranted,” the filing said, because the company’s “turnaround strategy, inclusive of the attraction and integration of additional highcaliber operating personnel, will take several quarters to implement…”
Distraction of an unsolicited offer “could be damaging to the execution of the plan aswell as to shareholder value,” the filing said.
ISS officials could not be reached for comment Monday afternoon.
USA Truck, listed as the nation’s 49th largest publicly traded trucking company, closed at $6.48 per share Monday on the NASDAQ. Its stock has traded in the past year between $2.65 and $6.77.
Business, Pages 25 on 05/21/2013