PR Newswire
HOUSTON, Nov. 16, 2015
HOUSTON, Nov. 16, 2015 /PRNewswire/ -- VAALCO Energy, Inc. (NYSE: EGY) today responded to the request of the stockholder group consisting of Group 42, Inc. as well as Bradley L. Radoff, together with other participants (collectively, the "Group 42−BLR Group") to solicit consents to remove without cause four duly elected members of VAALCO's Board of Directors and replace them with Group 42−BLR Group's nominees.
The Company noted that under its certificate of incorporation filed in accordance with the General Corporation Law of the State of Delaware (the "Charter"), duly elected members of VAALCO's Board can only be removed from office for cause. As fiduciaries of the Company, the Board cannot ignore, waive or amend the clear language in its current Charter without stockholder approval. Accordingly, the Board believes that the Group 42−BLR Group proposal to remove four VAALCO Board members without cause is not an action that can properly be taken under the Company's Charter, and therefore, any purported action by written consent to remove a director without reference to the cause requirement would be null and void.
VAALCO's Board firmly believes in stockholder democracy. Therefore, the Board has offered to convene a Special Meeting in December 2015 (the "Special Meeting") to let the stockholders decide whether they should be allowed to remove directors without cause. The Board would invite stockholders to vote on a proposal to amend the Charter so that stockholders would have the power to remove directors without cause. The Board would commit to approve such Charter amendment if the stockholders approve it at the Special Meeting. In addition, the Board would put Group 42−BLR Group's proposals to remove and replace a majority of VAALCO's Board on the agenda and up to a vote for the stockholders at the December Special Meeting.
Steve Guidry, Chairman and CEO, commented: "The Company firmly believes that it is in the best interests of all stockholders that the dispute with Group 42−BLR Group be resolved swiftly and without consuming our limited corporate resources. In the current challenging environment for the E&P industry, a company of VAALCO's size cannot afford to have its liquidity used up in a protracted confrontation. Given that the consent solicitation is not actionable under VAALCO's charter, we have offered an alternative that appropriately provides stockholders with a forum to decide on Group 42−BLR Group's proposals. We have also reiterated our offer to end this unnecessary dispute by appointing one Group 42−BLR Group nominee to the Board so that we can work together to capitalize on VAALCO's significant opportunities to deliver increased stockholder value."
As communicated in a November 16, 2015 letter from VAALCO's Board of Directors to the Group 42−BLR Group, the Company is prepared to expeditiously proceed with setting a record date for the consent solicitation once the Group 42−BLR Group revises the Notice of Action by Written Consent to comply with VAALCO's Charter. Alternatively, if the Group 42-BLR Group accepts VAALCO's offer to convene a Special Meeting in December, 2015, the Board is also prepared to file preliminary proxy materials for such meeting with the Securities and Exchange Commission. The Company has requested that the Group 42−BLR Group respond to the offer to convene a Special Meeting by Friday, November 20, 2015, and will consider its offer rejected if the Group 42−BLR Group fails to respond by that date.
VAALCO urges all VAALCO stockholders to refrain from taking any action (including returning any consent card sent by the Group 42−BLR Group) at this time.
Vinson & Elkins L.L.P. is serving as legal counsel to the Company.
VAALCO stockholders with questions may contact the Company's proxy solicitor, D.F. King & Co., Inc., (212) 269-5550.
The full text of the November 16, 2015 letter from VAALCO's Board of Directors to the Group 42−BLR Group is included below:
November 16, 2015
By Email
Group 42, Inc.
312 Pearl Parkway, CIA Building II, Suite 2403
San Antonio, Texas 78215
Attention: Paul A. Bell, President and Chief Executive Officer
Bradley L. Radoff
1177 West Loop South, Suite 1625
Houston, Texas 77027
Re: Proposal to Convene a Special Meeting
Messrs. Bell and Radoff:
On behalf of our client, VAALCO Energy, Inc. (the "Company"), I am writing in response to your letter dated November 6, 2015 (the "November 6 Letter") on behalf of Group 42, Inc. ("Group 42") and Bradley L. Radoff, each together with certain affiliates (collectively, the "Group" or "you"). The November 6 Letter includes as Annex B your letter as of the same date, in which Group 42 provided notice (all such notice materials sent on November 6, together with the November 6 Letter, constituting together the "Notice") of its intention to conduct stockholder business and nominate candidates (the "Group 42 Nominees") for election as directors in connection with a consent solicitation. I am also writing in consideration of the consent solicitation you have attempted to commence by means of a public filing on Schedule 14A filed November 6, 2015 (the "Consent Solicitation").
This letter is being delivered to you concurrently with another letter (the "Notice Reply"), also sent on behalf of the Company, discussing certain deficiencies that the Board of Directors of the Company (the "Board") identified in your Notice.
As discussed in the Notice Reply, Proposal #2 as set forth in the Notice and the Consent Solicitation seeks to remove without cause four members of the Board (the "Removal Proposal"). However, Article V, Section 3 of the Charter provides that directors may be removed from office only for cause. The Board cannot ignore the clear language in its current Charter by, in this instance, permitting an action by written consent that plainly contradicts explicit language in the Charter. As fiduciaries of the Company, the Board is bound to follow the Charter. Pursuant to Article II, Section 11 of the Bylaws, the Board believes that the Removal Proposal is not an action that can properly be taken under the Company's organizational documents, and therefore, the Board considers any purported action by written consent in respect of the Removal Proposal to be null and void. To become a valid matter for stockholder action by written consent, the Removal Proposal would need to be revised to include the cause requirement.
It is clear that the Company and the Group could arrive at an impasse with respect to the validity of the Removal Proposal. The Group presumably believes there is a reason that the Company should ignore Article V, Section III of the Charter. The Company, for its part, finds no legal basis that would cause or permit the Board in this instance to ignore or waive Article V, Section III of the Charter within the context of your Removal Proposal. Faced with an impasse, the Group may attempt to proceed with its Consent Solicitation as is, but the Board will continue to be obligated to maintain that any purported stockholder action in respect of the Removal Proposal would be null and void. In any given scenario under these circumstances, the Group and the Company may be heading toward a dispute.
The Company firmly believes that it is in the best interests of all stockholders that the current situation be resolved swiftly and without consuming limited corporate resources on litigation concerning the Charter. In the current challenging environment for the E&P industry, a company of VAALCO's size cannot afford to have its liquidity used up in a protracted confrontation.
To avoid a dispute, the Company would like to offer an alternative that serves the best interests of our stockholders and the Company. The Board is a firm believer in stockholder democracy. Therefore, it offers to convene a Special Meeting in December (the "Special Meeting") to let the stockholders decide whether they should be allowed to remove directors without cause. The Board would invite stockholders to vote on a proposal to amend the Charter so that stockholders would have the power to remove directors without cause. The Board would commit to approve such Charter amendment if the stockholders approve it at the Special Meeting. In addition, the Board would put your other proposals on the meeting agenda and up to a vote for the stockholders. The Company agrees to convene the Special Meeting for the foregoing purposes on the conditions that the Group (1) withdraw the Consent Solicitation, (2) covenant not to launch another consent solicitation until after the conclusion of the 2016 annual meeting and (3) covenant not to initiate any litigation over the "cause" requirement. We have already prepared a preliminary proxy statement and meeting notice, which we will file promptly upon your acceptance of our offer to call a special meeting. An agreement to effect the foregoing offer is attached to this letter as Annex A.
Given the delicate nature of the situation and the short time windows involved in the SEC's review of the consent solicitation and consent revocation statements, please respond to this offer by Friday, November 20, 2015. If I have not heard from you by that time, the Company will conclude that you have rejected its offer.
Simultaneously with the sending of this letter, the Company has filed a preliminary consent revocation statement with the SEC. If the Group accepts our offer, the Company will withdraw its preliminary consent revocation statement. If the Group declines our special meeting offer and another compromise cannot be worked out, the Company will proceed to take all necessary steps to protect the Company and all of its stockholders from any action that is not in the best interest of the Company and all of its stockholders. The Company will continue to consider any purported stockholder action with respect to the Removal Proposal that is not in compliance with the Charter null and void.
The Company also reiterates its standing offer, which was extended previously, to add one of your nominees to the Board. The Company regrets that the Group has not taken the Company up on its numerous efforts to meet and discuss its offer as well as to consider other means of compromise, but it remains open to resolving this unnecessary confrontation in an amicable way.
This letter is being sent on behalf of the Company while expressly reserving, and without waiving, any and all rights and defenses that the Company may have with respect to this matter. In particular, this letter should not be construed as confirmation that the Notice or terms of the Consent Solicitation are in compliance with the Charter, Bylaws and applicable law.
Should you have questions, please contact Kai Haakon E. Liekefett at (713) 758-3839.
Very truly yours,
/s/ Kai Haakon E. Liekefett
Kai Haakon E. Liekefett
cc: Eric J. Christ, Vice President, General Counsel and Secretary, VAALCO Energy, Inc.
Steve Wolosky, Esq.
Aneliya Crawford, Esq.
Annex A
VAALCO Energy, Inc.
9800 Richmond Ave., Suite 700
Houston, Texas 77042
Tel: (713) 623-0801
Fax: (713) 623-0982
November 16, 2015
By Email
Group 42, Inc.
312 Pearl Parkway, CIA Building II, Suite 2403
San Antonio, Texas 78215
Attention: Paul A. Bell, President and Chief Executive Officer
Bradley L. Radoff
1177 West Loop South, Suite 1625
Houston, Texas 77027
Re: Letter Agreement to Convene Special Meeting
Gentlemen:
This letter agreement dated November 16, 2015 (the "Agreement"), is with reference to (i) the notice to VAALCO Energy, Inc. (the "Company") of a proposed action by written consent of stockholders dated November 6, 2015 (the "Notice") of Group 42, Inc. ("Group 42") of its intention to solicit consents of stockholders (the "Consent Solicitation") for certain stockholder business, including the removal of four members of the Board of Directors of the Company, and the nomination of candidates for election as directors of the Company; and (ii) the consent solicitation statement filed on Schedule 14A on November 6, 2015 (the "Consent Statement") on behalf of Group 42, Bradley L. Radoff and certain other participants (collectively, the "Group").
With respect to the foregoing and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, each of the undersigned hereby agree as follows:
If the foregoing is acceptable and agreed to by you, please sign on the line provided below to signify such acceptance and agreement.
Very truly yours,
/s/ Eric J. Christ
Eric J. Christ
Accepted and Agreed to by:
Group 42, Inc. | ||
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By: | | |
| Name: | Paul A. Bell |
| Title: | President and Chief Executive Officer |
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Paul A. Bell | ||
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By: | | |
| Name: | Paul A. Bell |
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BLR Partners LP | ||
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By: | BLRPart, LP General Partner | |
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By: | BLRGP Inc. General Partner | |
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By: | | |
| Name: | Bradley L. Radoff |
| Title: | Sole Director |
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BLRPart, LP | ||
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By: | BLRGP Inc. General Partner | |
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By: | | |
| Name: | Bradley L. Radoff |
| Title: | Sole Director |
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BLRGP Inc. | ||
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By: | | |
| Name: | Bradley L. Radoff |
| Title: | Sole Director |
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Fondren Management, LP | ||
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By: | FMLP Inc. General Partner | |
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By: | | |
| Name: | Bradley L. Radoff |
| Title: | Sole Director |
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FMLP Inc. | ||
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By: | | |
| Name: | Bradley L. Radoff |
| Title: | Sole Director |
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The Radoff Family Foundation | ||
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By: | | |
| Name: | Bradley L. Radoff |
| Title: Werbung Mehr Nachrichten zur VAALCO Energy Inc Aktie kostenlos abonnieren
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