Kistefos AS announced today it has sent the following letter to
Trico Marine Services, Inc. (NASDAQ: TRMA) stockholders to provide
the real facts about Trico's ongoing efforts to mislead
stockholders with regard to Jones Act requirements. Specifically,
the letter advises stockholders that:
- The United States Maritime
Administration (Marad) has confirmed that Kistefos' proposals to
place two highly qualified directors on Trico's Board and enact
several proposals to improve management accountability and the
company's corporate governance practices will not place Trico's
Jones Act eligibility at risk.
- Trico�s latest communication
with stockholders intentionally misrepresents Marad's letter and
misleads stockholders as part of management�s ongoing efforts to
use the Jones Act as a smokescreen to avoid accountability for the
company�s poor operational and financial performance.
Kistefos goes on to urge stockholders to support its Board
nominees and other proposals at Trico�s upcoming Annual Meeting of
Stockholders on June 10, 2009.
The full text of the letter is below.
June 1, 2009
Dear Fellow Trico Marine Services Stockholder:
If you are a concerned Trico Marine Services stockholder who
feels that eligibility for service on the Trico Board of Directors
should be measured strictly by the qualifications of the candidates
and the performance of the company, please feel free to skip
reading this lengthy letter. We feel we have already made and
proven our case for change to you and look forward to your support
on June 10.
This letter is solely for the Trico stockholders who still have
concerns about the Jones Act compliance issues that management has
repeatedly raised � as a shameless smokescreen, we submit � during
the course of this contest. For you, our message is simple.
Neither our proposals nor the election of our two highly
qualified nominees to Trico's Board create any true risk of
non-compliance with the Jones Act.
As we will discuss below, Kistefos firmly believes that:
- Trico is using the Jones Act as
a shield to avoid accountability for its terrible performance
- The United States Maritime
Administration (Marad) has confirmed our position that there are no
Jones Act issues
- Trico�s latest release cynically
misinterprets Marad's letter and misleads stockholders
We pledge that if the company is ever formally advised by Marad
that our nominees' continuing service would for any reason risk
causing the company to lose its Jones Act qualification, and if
asked by the remaining members of the Board to resign, we would
readily do so.
DO NOT LET YOURSELF BE MISLED BY
TRICO
BEFORE VOTING, CONSIDER WHAT IS
REALLY IMPORTANT: MANAGEMENT'S DISMAL RECORD AND NOT TRICO'S JONES
ACT SMOKESCREEN.
YOUR VOTE MATTERS.
PUT A STOP TO TRICO'S SHAMELESS
MISREPRESENTATIONS AND VOTE FOR THE KISTEFOS PROPOSALS ON THE
REVISED BLUE CARD.
Beginning with our first meeting with Mr. Compofelice's
representatives in January through Trico's duplicitous press
release last Friday, management has tried to use the fear of Jones
Act non-compliance as a de facto poison pill to reject our
proposals. In doing so, Trico is avoiding defending to concerned
stockholders its bottom-of-the-bottom-quartile record of
non-performance.
As you may know, the Jones Act limits the participation of
non-U.S. citizens on the boards of companies that wish to engage in
the "coastwise trade"1 to a "minority of a quorum" of the Board.
Another, less clear, provision of the Jones Act restricts non-U.S.
citizen "control" of a Jones Act company to a 25% "interest" and
may, accordingly, be read to limit the representatives of foreign
stockholders on the Board to 25% of the total number of
directors.
When we first sought to join the Board last December, the Board
consisted (as it does today) of seven directors with the quorum set
at four. Therefore, a minority of the quorum was one. Since one
non-U.S. citizen, Mr. Per Staehr, was already sitting on the Board,
we understood that Mr. Staehr would have to step down and/or the
size of the quorum or board or both would have to be increased to
accommodate our request for two seats. We indicated to Mr.
Compofelice a willingness to join an expanded Board. We observed
that if the Board were expanded to nine and the quorum to seven,
and if the Board supported our election to fill the two new seats,
there would be three non-U.S. citizen directors on the Board
(equaling a minority of the newly expanded quorum) and Kistefos'
"interest" on the Board would be limited to two of nine directors
(equaling less than 25%). By doing so, Trico would remain in
compliance with the Jones Act. Simple, at least so we thought.
Trico absolutely rejected this solution.
Thus began what we can only describe as an Alice in Wonderland
experience of trying to reach an understanding with an ever elusive
Trico on how to structure a Board with first three and then two
non-U.S. citizen directors in compliance with the Jones Act.
Trico's repeated and unceasing objections to every one of our
proposals are too numerous to list in this letter. Suffice it to
say that every suggestion we made was summarily rejected by Trico
as impossible. It soon became clear that the Board had no intention
of responding to us in good faith.
In frustration, we turned to Marad, which administers the Jones
Act. In fact, we offered to go to Marad jointly with Trico, but it
repeatedly refused our offer. We asked Marad whether the election
of our two nominees to an expanded board of nine with an increased
quorum of seven would comply with the Jones Act. On March 12, Marad
confirmed to us orally that our proposal would not violate the
Jones Act.
The next day, Trico filed its 2008 annual report with the U.S.
Securities and Exchange Commission and pulled an amazing trick,
demonstrating its desperate intention to put up a Jones Act barrier
to our proposals at any and all cost. All of Trico's past filings
have stated clearly that the test for non-U.S. citizen directors
under the Jones Act was, as the Jones Act itself clearly provides,
that "no more than a minority of the number of directors� necessary
to constitute a quorum for the transaction of business can be
non-U.S. citizens." Now, Trico suddenly changed its public
disclosure to claim that "no more than 25% of the directors �
necessary to the transaction of business can be non-U.S. citizens."
This statement can only be interpreted to mean that the number of
non-U.S. citizen directors cannot exceed 25% of a quorum, because a
quorum is defined as the number of directors necessary to the
transaction of business. While Trico had made this extreme
assertion to us privately in the past, we had disregarded it
because there is no support for it in the Jones Act. We were
shocked to read it in Trico�s SEC filing as a statement of the law.
If the statement were true, no more than one of the seven directors
at any time constituting a quorum could be a non-U.S. citizen.
Because we had only one business day before the deadline for our
nominations for director and related proposals for the 2009 Annual
Meeting under Trico's "advance notice bylaw," we immediately sought
to obtain assurances from Marad that Trico's statement inaccurately
misstated the law. Unfortunately, the timeframe was too tight and
we could not obtain necessary advice from Marad before the March 15
deadline. Faced with no alternative if we wished to have our
proposals considered at the 2009 Annual Meeting, we restructured
our proposals to comply with Trico's statement in its annual
report. We added proposals to remove Mr. Staehr from the Board and
to add a proviso that a quorum of seven must consist of at least
six U.S. citizens. By doing so, our proposals complied not only
with the oral confirmation we had received from Marad but with
Trico's "creative" restatement of the law in its annual report.
Shortly thereafter, Marad confirmed to us in writing its oral
advice of March 12 that our proposals complied with the Jones Act,
subject only to confirmation that (1) non-U.S. citizens do not
control more than 25% of the interest in Trico and (2) any proxies
solicited by Kistefos would be voted independently by U.S.
citizens. We felt confident that these two conditions would not
pose a problem since Trico has repeatedly affirmed that its
non-U.S. citizen ownership is less than 25%, and we fully intend to
comply with the non-U.S. citizen proxy requirement.
Since then, Trico has repeatedly questioned in its proxy
statement and fight letters whether our proposals would jeopardize
the company's Jones Act eligibility, as if we had proposed an
unworkable structure to Marad or Marad had not approved it. This
stance culminated with a press release on May 29 in which Trico
claimed that the approval of some or all of our proposals could
raise questions regarding Trico's continuing eligibility under the
Jones Act. The press release goes on to suggest that we have
misrepresented Marad's confirmation of the acceptability of our
proposals.
The truth is that Marad did approve our proposals, and our
proposals do not place Trico's Jones Act eligibility at
risk.
Notwithstanding Trico's desperate spin, Marad's May 29 letter
confirms that Kistefos' proposals are acceptable. As Marad states,
we had in fact previously provided Marad with the Independent Proxy
Agreement and Marad had confirmed to us that it raised no issue
under the Jones Act. The May 29 letter does state that if the
Independent Proxies for the stockholders who wish to vote for
Kistefos' proposals are influenced by Kistefos in exercising their
discretion, an issue could arise. However, Marad failed to note
that pursuant to the Independent Proxy Agreement the Independent
Proxies are sworn to follow only the instructions of the
stockholders giving them proxy authority and have no responsibility
to Kistefos. In addition, to lay this issue firmly to rest, each of
Kistefos and the Kistefos nominees and both of the Independent
Proxies will give Marad confirmatory affidavits to the effect that
no instructions regarding the exercise of the Independent Proxies'
discretion will be given by Kistefos or any related party and no
instructions regarding the exercise of the Independent Proxies'
discretion will be taken by the Independent Proxies from Kistefos
or any related party. This issue is another shameless management
"red herring" and a desperate attempt to influence votes at the
11th hour.
Second, the Marad letter hypothetically cautions Trico that if
the Kistefos nominees are elected to the Board, and if Mr. Staehr
is removed from the Board, and if his proposed successor, Mr.
Swanson, is not elected to replace him, then the two Kistefos
nominees could exercise "negative control" over Trico by preventing
a quorum from forming. While Marad never expressed this concern
during our discussions, we are certain that there is no real risk
that Jones Act non-compliance could arise. The fact is, if Mr.
Staehr is removed, both management and Kistefos recommend the
election of Mr. Swanson, making his election a certainty and this
hypothetical eventuality an impossibility. Furthermore, if a
vacancy did arise, the stockholders and/or the Board, depending on
the circumstance, would have the power to fill it, thereby avoiding
the possibility of the Kistefos nominees exercising "negative
control."
The hypothetical concern also ignores the fact that at every
Jones Act-compliant company with a non-U.S. citizen director on its
Board, the existence of a vacancy or vacancies could give the
non-U.S. citizen director the power to frustrate the formation of a
quorum. In fact, under this theory, Trico today is already in
violation of the Jones Act because the possible creation of two
vacancies for any reason would allow the existing non-U.S. citizen
director, Mr. Staehr, the ability to exercise negative control. In
any event, we have advised Marad that we believe it would be
impossible for there to be a permanent vacancy created by the
removal of Mr. Staehr, and Marad has advised us that if this is the
case, then no Jones Act issue would arise.
Let us be absolutely frank. We respect and understand the
restrictions of the Jones Act, and we have carefully structured our
proposals to comply with the law. We have sought and obtained
Marad's confirmation that our proposals do not violate the Jones
Act.
On the other hand, management has spent enormous time and energy
trying to undermine our proposals, instead of addressing the real
issues at hand here: the severe underperformance of Trico under its
watch. Management's poor record and disgraceful performance simply
cannot be successfully defended. Don't be misled by Trico's cynical
and disingenuous Jones Act smokescreen. Please give us your support
on June 10 by voting the enclosed BLUE card. Thank you very
much.
Yours sincerely,
?ge Korsvold
REMEMBER:
TO BEST EFFECT CHANGE, OUR
PROPOSALS MUST BE APPROVED BY AT LEAST TWO-THIRDS OF THE OUTSTANDING STOCK AND
STOCKHOLDERS MUST APPROVE ALL
OF KISTEFOS' PROPOSALS.
SHARES NOT VOTED ARE LIKE A VOTE
FOR MANAGEMENT.EVERY VOTE COUNTS.
PLEASE READ THE ENCLOSED MATERIAL
CAREFULLY, SIGN AND DATE THE ENCLOSED REVISED BLUE PROXY CARD AND RETURN IT
TODAY.
To elect the Kistefos nominees and support our corporate
governance initiatives, we urge all stockholders to sign and return
the revised BLUE Proxy
whether or not you have already returned a white proxy sent to you
by the company.
We urge all stockholders not to sign
or return any white proxy sent to you by the company.Instead, we
recommend that�you use the revised BLUE Proxy today.
If you have already returned the
white proxy, you can effectively revoke it by voting the revised
BLUE Proxy.
Only your latest-dated proxy will be
counted.
If you have any questions or need
assistance in voting the revised BLUE Proxy, please contact our
proxy solicitor, Okapi Partners, at the toll-free number or email
address listed below.
Call Toll-Free: 1-877-869-0171
Or
Email: info@okapipartners.com
1 At one time, providing supply services in the Gulf of Mexico
trade was a major business of Trico. In recent periods, however,
this business has dwindled to less than 10% of Trico's revenue. As
of December 31, 2008, Trico employed 11 vessels in the Gulf out of
a total world-wide fleet of at least 77 vessels, according to
Trico's annual report filed on Form 10-K with the SEC on March 11,
2009. In Trico's first quarter 2009 10-Q, it discloses that five
vessels in the Gulf have been warm stacked. Management's publicly
stated outlook suggests that Trico's Gulf operations will continue
to shrink.
About Kistefos AS
Kistefos AS is a private investment firm focused on making
investments in medium-sized companies. Kistefos typically invests
in turnaround opportunities and businesses that experience industry
consolidation. Kistefos has holdings in dry cargo-shipping,
offshore services and financial services, as well as
technology-founded investments and real estate development.
Kistefos AS was founded in 1979 and is based in Oslo, Norway.
CERTAIN INFORMATION REGARDING THE PARTICIPANTS
KISTEFOS AS, CHRISTEN SVEAAS AND �GE KORSVOLD (COLLECTIVELY, THE
�PARTICIPANTS�) HAVE MADE A FILING WITH THE SECURITIES AND EXCHANGE
COMMISSION OF A DEFINITIVE PROXY STATEMENT AND AN ACCOMPANYING
REVISED PROXY CARD IN CONNECTION WITH THE SOLICITATION OF PROXIES
FOR THE 2009 ANNUAL MEETING OF THE STOCKHOLDERS OF TRICO MARINE
SERVICES, INC. (THE �COMPANY�). SECURITY HOLDERS ARE ADVISED TO
READ THE DEFINITIVE PROXY STATEMENT AND ANY ADDITIONAL PROXY
MATERIAL FILED BY THE PARTICIPANTS IN CONNECTION WITH THE 2009
ANNUAL MEETING, AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF
PROXIES FROM STOCKHOLDERS OF THE COMPANY FOR USE AT THE 2009 ANNUAL
MEETING BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING
INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY
SOLICITATION. A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY HAVE
BEEN MAILED TO THE COMPANY�S STOCKHOLDERS AND ARE AVAILABLE AT NO
CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION�S WEBSITE AT
HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN
SUCH PROXY SOLICITATION IS AND WILL BE CONTAINED IN SCHEDULES 13D
AND 14A FILED BY THE PARTICIPANTS AND IN AMENDMENTS THERETO.
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