Concerned InterOil Shareholders Achieve Full Compliance of InterOil with Requisition

• InterOil agrees to fully comply with its obligations under Yukon law
• Shareholder concerns raised by Requisition to be heard at Annual General Meeting
• Yukon Supreme Court action dismissed

HOUSTON, April 25, 2016 /PRNewswire/ -- The founding shareholder and former chairman and Chief Executive Officer of InterOil Corporation ("InterOil" or the "Company"(NYSE: IOC), Phil Mulacek, and Petroleum Independent & Exploration, LLC (the "Concerned InterOil Shareholders", announced today that InterOil had finally agreed to comply with its obligations under the Business Corporations Act (Yukon) to permit the shareholders of the Company to vote on the shareholder resolutions that were included in the March 21, 2016 requisition (the "Requisition" of a special meeting of shareholders (the "Special Meeting" made by the Concerned InterOil Shareholders and certain other shareholders who collectively own over 7.5% of the issued and outstanding shares of the Company. Mr. Mulacek said that in view of the Company's agreement, the Concerned InterOil Shareholders will terminate legal proceedings previously instituted against the Company seeking to require compliance, and the Requisition resolutions will be placed on the agenda of the Company's annual general and special meeting to be held on June 14, 2016 (the "AGM".

"The Concerned InterOil Shareholders appreciate the InterOil Board's decision to finally comply with its legal obligation to allow InterOil's shareholders to express their views on the proposals in the Requisition," Mr. Mulacek said. "We are deeply disappointed, however, that InterOil only reached this decision after more than four weeks of correspondence, notices, meetings and, ultimately, litigation between the parties at a cost of thousands of dollars in legal and other fees and costs on both sides. InterOil first denied that the Requisition had been properly submitted in March 2016, and then opposed the Concerned InterOil Shareholders' action in the Yukon Supreme Court to call a Special Meeting to consider the Requisition matters. This waste of resources could and would have easily been avoided had InterOil simply confirmed to us after the Requisition was submitted that our proposals would be addressed at the AGM."

Mr. Mulacek continued, "We will post the pleadings in this case on our website, www.ConcernedInterOilShareholders.com, so that InterOil's shareholders may see for themselves how InterOil's Board and management tried to prevent the Requisition proposals from coming before the shareholders in disregard of basic shareholder rights."

Mr. Mulacek noted that in view of InterOil's conduct to date, it was important for the parties to agree in good faith on a fair and equitable set of protocols to govern conduct of the AGM. However, Mr. Mulacek also stated that if InterOil fails on its part to negotiate in good faith so that protocols are agreed in a reasonable period of time, "the Concerned InterOil Shareholders will take any and all steps to secure a fair and transparent meeting process, including again invoking the Supreme Court of Yukon's jurisdiction in these matters."

The terminated action was originally filed in the Supreme Court of Yukon, Philippe E. Mulacek, Petitioner, and InterOil Corporation, Respondent (S.C. No. 16-A0002) (the "Yukon Action".

Background

On March 21, 2016, the Concerned InterOil Shareholders and certain other shareholders delivered the Requisition to the Company, and in the Requisition, the Concerned InterOil Shareholders requested that the Company call the Special Meeting and include several resolutions focused on improving the corporate governance of InterOil (the "Proposals".

The Company did not acknowledge publicly that it had received the Requisition for ten days, until after the Concerned InterOil Shareholders issued a press release on March 31, 2016.

On April 1, 2016, InterOil wrote to Mr. Mulacek, proposing to meet to discuss the Proposals. In the interests of avoiding further delay in adopting the Proposals in connection with the Special Meeting, Mr. Mulacek - after consultation with other shareholders - readily agreed to the meeting. The meeting was finally held on April 8, 2016 to accommodate representatives of the Company, only one business day before InterOil was required to call the Special Meeting. By this time, Mr. Mulacek had received significant supportive feedback from numerous InterOil shareholders, and he came prepared to constructively discuss the Proposals with the Company. Much to his disappointment, it quickly became clear that InterOil's representatives had no intention of discussing the Proposals. After requesting Mr. Mulacek to repeat the Proposals, InterOil's representatives vaguely replied that they would consider the Proposals and respond when appropriate.

InterOil had until April 11, 2016 to call the Special Meeting, but made no announcement to that effect, nor did it confirm that the Proposals would be included for consideration by InterOil's shareholders at the AGM. After receiving a letter from the Concerned InterOil Shareholders' counsel on April 10, 2016, the Company finally responded with a letter on April 11, 2016, that suggested the Requisition had not been validly delivered (despite being received by the Company), and proposed that all parties "cease all public activities and related shareholder communications in connection with these matters for a period of 15 business days," to facilitate further discussions.

On April 12, 2016, fearing further delay or obstruction by InterOil, the Concerned InterOil Shareholders commenced the Yukon Action to call the Special Meeting to protect and ensure that InterOil shareholders have an opportunity to consider the Proposals and hold the Board accountable for the matters related to the Proposals.

On April 20, 2016, InterOil wrote a letter to the Concerned InterOil Shareholders agreeing to place all of the Proposals on the agenda for the AGM if the Yukon Action was terminated.

At a hearing for the Yukon Action on April 22, 2016, the Concerned InterOil Shareholders notified InterOil and the court that they intended to terminate the Yukon Action. Termination papers will be filed with the court shortly by the parties.

'Tree' pid='68619' datel Wrote:Spite. This release goes beyond presentation of fact to take opportunity for unneeded digs at management. This makes Phil look more bitter than concerned. Not how best to express concern.

For me this gives useful background information  that management certainly has not given as to what each party has done or not done in relation to this issue.  Management as usual, gives no information, so I find this useful background information.

There was no option from a legal standpoint to not agree to have these proposals voted on.

What is management's reason for waiting this long to agree? I would like to know that.

Spite. This release goes beyond presentation of fact to take opportunity for unneeded digs at management. This makes Phil look more bitter than concerned. Not how best to express concern.

*******

Agreed. When I ask someone to do something for me (especially something they are initiallty reluctant to do)...and they decide to do it...I usually say "thank you" (or at least try to be somewhat conciliatory).  Phil got what he wanted...and then still chose to attack Hession further.  Certainly allows one to question Phil's true motives.  That being said, it's probably a good end result.

'steve3752' pid='68620' datel Wrote:

'Tree' pid='68619' datel Wrote:Spite. This release goes beyond presentation of fact to take opportunity for unneeded digs at management. This makes Phil look more bitter than concerned. Not how best to express concern.

For me this gives useful background information  that management certainly has not given as to what each party has done or not done in relation to this issue.  Management as usual, gives no information, so I find this useful background information.

There was no option from a legal standpoint to not agree to have these proposals voted on.

What is management's reason for waiting this long to agree? I would like to know that.

Steve, did you learn from this self-serving release that InterOil proposed a reduction of the board size to 8, which Mulacek rejected?  As for "delay", no responsible Board would respond without consultation with lawyers and amongst themselves.  If one thinks this doesn't take time, I would suppose that one has little experience with lawyers and committee meetings.   How long might one suppose a Board would take to fully discuss the implications of all of the proposals, not least of which is that four of the Board would have to give up their seats?  Personally, I am surprised that Finlayson suggested a Board of 8, assuming PM's filings to be true.

This is a negotiation in which one side decides to selectively disclose to an audience.  No doubt on advice of counsel, and perhaps also Board preference, the company has chosen to remain silent.  There is nothing peculiar or nefarious in waiting until the last day, or minute for that matter, in responding to an action which was not welcome.  From IOC's perspective, there is nothing to be gained in a public war of words with a diissident shareholder and his family.

'katytrader' pid='68623' datel Wrote:

'steve3752' pid='68620' datel Wrote:

'Tree' pid='68619' datel Wrote:Spite. This release goes beyond presentation of fact to take opportunity for unneeded digs at management. This makes Phil look more bitter than concerned. Not how best to express concern.

For me this gives useful background information  that management certainly has not given as to what each party has done or not done in relation to this issue.  Management as usual, gives no information, so I find this useful background information.

There was no option from a legal standpoint to not agree to have these proposals voted on.

What is management's reason for waiting this long to agree? I would like to know that.

Steve, did you learn from this self-serving release that InterOil proposed a reduction of the board size to 8, which Mulacek rejected?  As for "delay", no responsible Board would respond without consultation with lawyers and amongst themselves.  If one thinks this doesn't take time, I would suppose that one has little experience with lawyers and committee meetings.   How long might one suppose a Board would take to fully discuss the implications of all of the proposals, not least of which is that four of the Board would have to give up their seats?  Personally, I am surprised that Finlayson suggested a Board of 8, assuming PM's filings to be true.

This is a negotiation in which one side decides to selectively disclose to an audience.  No doubt on advice of counsel, and perhaps also Board preference, the company has chosen to remain silent.  There is nothing peculiar or nefarious in waiting until the last day, or minute for that matter, in responding to an action which was not welcome.  From IOC's perspective, there is nothing to be gained in a public war of words with a diissident shareholder and his family.

I am confused. I thought they just agreed to have all of the issues voted on at the annual meeting.

Did they actually agree to reduce the board without a vote?

'steve3752' pid='68626' datel Wrote:

'katytrader' pid='68623' datel Wrote:

'steve3752' pid='68620' datel Wrote:

'Tree' pid='68619' datel Wrote:Spite. This release goes beyond presentation of fact to take opportunity for unneeded digs at management. This makes Phil look more bitter than concerned. Not how best to express concern.

For me this gives useful background information  that management certainly has not given as to what each party has done or not done in relation to this issue.  Management as usual, gives no information, so I find this useful background information.

There was no option from a legal standpoint to not agree to have these proposals voted on.

What is management's reason for waiting this long to agree? I would like to know that.

Steve, did you learn from this self-serving release that InterOil proposed a reduction of the board size to 8, which Mulacek rejected?  As for "delay", no responsible Board would respond without consultation with lawyers and amongst themselves.  If one thinks this doesn't take time, I would suppose that one has little experience with lawyers and committee meetings.   How long might one suppose a Board would take to fully discuss the implications of all of the proposals, not least of which is that four of the Board would have to give up their seats?  Personally, I am surprised that Finlayson suggested a Board of 8, assuming PM's filings to be true.

This is a negotiation in which one side decides to selectively disclose to an audience.  No doubt on advice of counsel, and perhaps also Board preference, the company has chosen to remain silent.  There is nothing peculiar or nefarious in waiting until the last day, or minute for that matter, in responding to an action which was not welcome.  From IOC's perspective, there is nothing to be gained in a public war of words with a diissident shareholder and his family.

I am confused. I thought they just agreed to have all of the issues voted on at the annual meeting.

Did they actually agree to reduce the board without a vote?

No.  My understanding from the filing, without looking it up again, is that IOC was willing to propose a Board of 8, that is, have 8 Board members elected at the AGM.   I believe that the by-laws allow a Board to number as many as 15, but that the Board proposes expansion/contraction in the election process for the AGM.  My interpretation is that IOC said 8 to see what PM would say to that and he said "nyet."   As he no doubt did to XOM proposals a few years ago....lol

I believe the filings gave no elaboration on other issues but presumably IOC and PM will continue to formulate (haggle/wrangle/whatever) what gets voted on.

Did anybody else wade through the filings and find anything else of substance?

Everyone has the facts of this situation essentially correct.

• Phll and his group presented a "requisition" (request) to the IOC BOD to have a set of shareholder proposals voted on at the AGM or have a special meeting called to hold such vote.
• IOC rejected the call for the special meeting.
• Phil's group then petitioned the Yukon Supreme Court to have a special meeting called.
• While the petition for a special meeting was pending, IOC and Phil met and corresponded.
• IOC, responding to one of Phil's proposals (to limit the BOD to six), agreed to limit the BOD to eight.
• Phil rejected this proposal, holding to his demand for six.
• The IOC BOD then agreed to have the "Phil proposals" voted on by shareholders at the AGM, in return for which Phil will drop the petition in the Yukon courts calling for a special meeting.
• Thus, as it now stands, Phil's various proposals will all be voted on at the AGM. (They are all listed in another Thread).
• Unfortunately, a lot of Phil's PR pieces seem to be filled with innuendo and propaganda, rather than with valid legal arguments. Phil is clearly very angry with the BOD/Hession, but it is also clear why Phil was removed from the company when delicate negotiations were required of its CEO to strike the best deal possible for the sale of its assets to a super major.

I cut and pasted this from an earlier post of mine on April 15, 2016 (Under : IOC Update re: Call for Special Meeting).

"It may also be a good idea to review what exactly PM et.al. are seeking.

They are seeking to have a special shareholders meeting at which all shareholders would be able to vote on the following proposals:

• reduce the size of the BOD from 10 to 6
• change IOC executive compensation policy to 1) reduce the amount of cash paid to $600K/year max, 2) require compensation to be at least 50% equity, 2) impose holding periods for stock compensation (actually to restrict the sale of any IOC stock to no more than 50% of director/officer's holding while employed and for 1 year after) , 3) restrict 'change of control' compensation payments to not allow such unless the IOC share price is over $60 and also over the share price when the office/director was hired or pro-rate the compensation respectively
• amend BOD policy on board member's qualifications to require 1/3 of directors to have competency in exploration/development of onshore O&G assets in the "PNG jungle"
• amend BOD policy of third-party reviews of assets to increase communication to shareholders regarding discoveries and development plans, specifically that the BOD disclose 1) why a discovery location is considered 'commercial' by the BOD, including the BOD views and assumptions on the cost of development, including specifically overall cost breakdowns for wells and development,) 2) likely markets for the production from the discovery, and 3) what update such discovery may imply to the company's annual resource reports
• amend BOD policy to insure that any resource evaluation companies retained have expertise in evaluating assets in the "PNG jungle".
• amend IOC charter to require shareholder approval of any sale of 10% or greater of IOC assets
• adopt a more rigorous disclosure policy by BOD to insure that shareholders "understand fully the exploration and development status of the Corporation's onshore licenses and development assets in the Papua New Guinea jungle"