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Tuesday, November 24, 2015
VAALCO Energy, Inc. has filed preliminary proxy materials with the SEC to hold Special Meeting of VAALCO stockholders on January 5, 2016 due to the recent push by Group 42, Inc. and Bradley L. Radoff (collectively, the Group 42−BLR Group) to take over the board.
The Special Meeting will be to enable stockholders to vote on a proposal to amend the company’s certificate of incorporation filed in accordance with the General Corporation Law of the State of Delaware so that stockholders will have the power to remove directors without cause. In addition, stockholders will be able to vote on the proposals to remove and replace a majority of VAALCO’s Board of Directors with new directors promoted by Group 42−BLR Group.
Steve Guidry, Chairman and CEO, in a company statement commented: “We continue to believe that it is in stockholders’ best interests that this dispute be quickly resolved and we have therefore provided a forum for stockholders to vote. The Group 42−BLR Group has so far rejected the Company’s offer to provide stockholders with the opportunity to vote on its proposals at a special meeting and instead threatened litigation to pursue its untested legal theory that our charter is invalid under Delaware law.”
Guidry continued, “VAALCO firmly supports stockholder democracy. We will hold the Special Meeting on the same day as the expiration date for the consent solicitation because we strongly believe that Group 42−BLR Group’s plan to use litigation to force through a null and void consent solicitation is unnecessary and a waste of stockholders’ money.”
In early November the Group 42−BLR Group began soliciting consents to remove, without cause, four members of the company’s Board of Directors in order to replace them with Group 42−BLR Group’s four new nominees and therefore take control of VAALCO. As previously announced, VAALCO noted that under its Charter, duly elected members of the board can be removed from office only for cause. This is a common charter provision, which is shared by 1,301 companies incorporated in Delaware, including 248 companies that do not have a staggered board. No Delaware case has ever held invalid a charter provision requiring cause to remove directors from office. Therefore, as fiduciaries of the company, the board cannot ignore, waive or amend the clear language in its current Charter without stockholder approval.
The Company noted that:
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.
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