Trico Marine, Outcome

The shareholders of Trico Marine elected the two contested incumbent nominees at the 2009 Annual Meeting, Joseph S. Compofelice and Ben A. Guill.

The Trico Marine Group, which is headquartered in The Woodlands, Texas, provides subsea, trenching, and marine support vessels and services.

This is a defeat for the two Kistefos nominees, Christen Sveaas and Age Korsvold. A proposal to expand the size of the board was also defeated.

But all was not lost for admirers of insurgency. A proposal to declassify the board of directors prevailed.

The company's announcement is here.

One of the unusual features of this particular proxy fight was the involvement of the Jones Act, otherwise known as the Merchant Marine Act of 1920. This is a bill that provides for workers compensation payments to seamen, and that offers various sorts of protectionism to US maritime related industry. For example, the Jones Act prevents US shipholders from refurbishing their ships in foreign ports.

Trico made a point that the Jones distinguishes between US companies and non-US companies, beneficiaries of its protection provisions and non-beneficiaries, based on the control of a company even by indirect means. It said that a May 29th letter the company had received from the US Maritime Administration said that Trico's protected status might be at risk should certain Kistefos-sponsored outcomes ocur at the meeting. I'll try not to get into the technicalities of it, which are intricate.

The bottom line, after all, is that the issue turned out to be a red herring, though, as on June 5 the same agency sent a follow-up letter. "In light of our review of Delaware case law and the affidavit of Messrs Korsvold and Sveaas, we find that concern regarding use of Independent Proxies has been assuaged."

Still, maybe that isn't quite the bottom line. For who knows but that the momentunm of a proxy contest, always an uphill matter, was broken during that period between the 29th and the 5th, when this seemed to be an issue?

Trico Marine Services

The 2009 Annual Meeting of Trico Marine Services' shareholders is scheduled for Wednesday, June 10.

Trico set itself up for a challenge last month (May 11) when it announced a plan to trade 6.5% convertible debentures for 8.125% convertible debentures, cash, and common stock or warrants.

The largest shareholder, Kistefos, strenuously objected to the plan, which dilutes iots own holdings and those of other pre-plan shareholders and benefits the bondholders, Kistefos' statement at that time said:

"While we are still studying the details of this transaction, it appears that in an effort to remedy the adverse consequences of its over-priced and over-levered acquisitions in 2007 and 2008, the company not only has accepted an increased coupon and a significantly reduced conversion price on the new debentures while securing the debt holders, but has also chosen to substantially dilute its existing stockholders in the process when other, more affordable and less dilutive options could have been pursued."

You can see from the chart above that on the day of that announcement, the price of Trico stock fell from above $5.25 to $4.25. Since then, it has continued to decline, and at the close of the day yesterday, Tuesday, a share was worth $3.17. This has happened while broad indices have been headed upward.

Some sort of stockholder rebellion is due, surely.