The Purchaser notified the Company on October 4, 2009 of its intent to launch the Offer by providing a copy of the press release announcing commencement of the Offer via email to members of the Company’s board of directors. In the evening of October 4, 2009, Mr. Beariault contacted representatives of Baker Botts regarding the Offer. The Purchaser publicly announced its Offer on October 5, 2009 and filed with the SEC a tender offer statement on Schedule TO and an amendment to its Schedule 13D.
On October 5, 2009, Messrs. Beariault and Bennett, other members of the Company’s management and representatives of Baker Botts had discussions regarding the Offer and the responsibilities of the Company under the federal securities laws and the laws of the British Virgin Islands. In addition, on October 5, 2009, representatives of Baker Botts discussed with a representative of Conyers, Dill & Pearman, British Virgin Islands counsel to the Company, the Company’s and the board of directors’ duties and responsibilities under British Virgin Islands law with respect to the Offer. In the evening of October 5, 2009 representatives of Baker Botts had a discussion with representatives of Cooley regarding the Offer.
During the period from October 5 until October 8, 2009, representatives of Baker Botts had discussions with the independent directors on the Company’s board of directors regarding the Offer and their fiduciary duties with respect to the Offer. During this period representatives of Baker Botts also had discussions with the Company’s management regarding the Offer and the obligation to issue a response on Schedule 14D-9.
On October 7, 2009, Mr. Tveter, who had already determined not to stand for re-election to the Company’s board of directors at the Company’s annual shareholder meeting scheduled for November 4, 2009, submitted a written resignation from the board of directors.
On October 8, 2009, the board of directors of the Company held a meeting to discuss the Offer and the Company’s response required by Rule 14e-2. Also present at the meeting were Mr. Beariault and representatives of Baker Botts. During the meeting Baker Botts reviewed for the members of the board the material terms of the Offer and explained the Company’s responsibilities and duties under U.S. federal securities laws and the laws of the British Virgin Islands. After a discussion concerning the Company’s response on Schedule 14D-9, the board of directors authorized management of the Company to file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC in which the Company would remain neutral with respect to the Offer. Each of Mr. Kudelski, Claude Smadja, Mauro Saladini, Lucien Gani, Pierre Roy and Mr. Osadzinski, all of whom are Affiliated Directors, and Mr. Chiddix voted in favor of the proposal for the Company to remain neutral with respect to the Offer. Messrs. Bennett, Deiss and Machovina abstained from the vote.
Reasons and Factors for the Recommendation of the Board of Directors
In considering the Offer and the transactions contemplated thereby, the board of directors consulted with the Company’s outside legal counsel. In expressing no opinion as to whether the Company’s shareholders should accept the Offer and tender their Shares to the Purchaser pursuant to the Offer, the board of directors noted the conflicts of interest facing its members in evaluating the Offer. In light of these conflicts of interest, it was determined that it would be more appropriate to remain neutral than to take a position with respect to the Offer. In determining that the Company will remain neutral with respect to the Offer, the Company’s board of directors also noted that the law of the British Virgin Islands, which governs the duties and obligations of the Company’s board of directors, does not impose any fiduciary or other duty or obligation on the Company or the Company’s board of directors to obtain any particular price or fair price in the Offer, to approve or disapprove the Offer, make any statement or recommendation or otherwise play any role in connection with the Offer. Furthermore, the law of the British Virgin Islands does not impose any fiduciary or other duty or obligation on the Company or the Company’s board of directors to make any determination or analysis regarding the Offer or the Offer Price, including whether the terms of the Offer or the Offer Price is fair to unaffiliated shareholders, nor does it require either of them to obtain, or retain any outside person to prepare, any report, opinion or appraisal relating to the value of the Company, the Shares or the fairness of the Offer or to negotiate on behalf of the unaffiliated shareholders.