Brad Radoff and Group 42 Gain Representation on the Board of Vaalco Energy after Delaware Court Validates Shareholder Right to Remove Directors Without Cause
Bloomberg and other media sources, including the Houston Business Journal and the San Antonio Business Journal, reported that a shareholder group, the Group 42-BLR Group, consisting of Olshan clients Group 42 and Brad Radoff have reached a Settlement Agreement with Vaalco Energy to gain representation on its Board of Directors. Vaalco agreed to a range of Board changes and shareholder friendly reforms, including the replacement of two incumbent Vaalco directors with Michael Keane, a designee of the Group 42-BLR Group, and another shareholder representative. A third mutually-agreed upon director candidate will be nominated for election at Vaalco’s 2016 Annual Meeting. Vaalco also agreed to separate the Chairman and CEO roles and to appoint Group 42’s Michael Keane as the Vice Chairman of the Board. In addition, Vaalco will immediately terminate its recently adopted shareholder rights plan.
The agreement followed a decision by the Delaware Chancery Court striking down Vaalco’s defensive claim challenging the validity of the Group 42-BLR Group’s consent solicitation based on language in its charter requiring cause in order to remove directors. In a decision of first impression, the Delaware Chancery Court ruled that Vaalco’s charter provision was invalid therefore confirming the validity of Group 42-BLR Group’s consent solicitation to remove directors without cause. Steve Wolosky and Timothy D. Knox with assistance from Meagan Reda represented Group 42 and Bradley Radoff in connection with their activist campaign at VAALCO.