Schedule 14D-9 Solicitation/Recommendation Statement

Summary

This Solicitation/Recommendation Statement template on Schedule 14D-9 provides guidance and example language for each of the required sections of the Schedule 14D-9. This template contains practical guidance and drafting notes. The disclosures required to be set forth in Schedule 14D-9 under Section 14(d) of the Exchange Act of 1934 ("Exchange Act") and Regulation 14D are intended to provide information to the public about tender offers in connection with friendly or hostile takeovers. In particular, Rule 14e-2 under Regulation 14E requires that the offer remain open for at least twenty (20) business days, ten business (10) days following a change in offering price of percentage of securities, and that within 10 business days of a tender offer, the target of such tender offer shall provide a statement on Schedule 14D-9 to its shareholders. Such statement shall include: (a) whether the target recommends acceptance or rejection of the tender offer; (b) whether the target is remaining neutral with respect to the tender offer; or (c) whether the target is unable to take a position regarding the tender offer. Although there is no technical definition of a tender offer, a tender offer is generally defined as a broad solicitation by a company or a third party to purchase a substantial percentage of a company's Section 12 registered equity shares or units for a limited period of time. However, for tender offers for less than five percent (5%) of a target's securities, such "mini-tender offers" are subject only to the anti-fraud and certain other provisions of Regulation 14E and not Section 14(d) of the Exchange Act or Regulation 14D. Upon commencement of a tender offer, a bidder who will own more than 5 percent of a class of the target's stock after consummation of the tender offer is required to file a Schedule TO pursuant to Rule 14d-3. While the bidder prepares and files a Schedule TO, the target prepares and files a Schedule 14D-9. The Rules and Regulations promulgated under the Exchange Act also contain other disclosure and information requirements. Rule 14d-9 sets forth instructions regarding filing and delivery requirements of the Schedule 14D-9. This template requires 9 categories of disclosure. The Schedule 14D-9 form contains cross-references under each of the nine items to those SEC Rules and Regulations that detail the information required under each of such nine items. In addition to the target's reasons for rejecting, accepting, remaining neutral with respect to or being unable to take a position on a tender offer, the target is required to disclose, among other things, the interests of directors, executive officers and affiliates to the extent that such interests differ from those of the target's other stockholders and the opinion of target's financial advisor and the underlying rationale provided by the financial advisor. However, it should be noted that a number of disclosure items that are not technically required are nonetheless included in and fairly consistent across many Schedule 14D-9 filings. Examples of such disclosures are set forth in some of the items contained in this template. For additional information on responses to unsolicited tender offers, see Hostile Takeover Defense Strategies. For a broad collection of content related to hostile takeovers and shareholder activism, see Hostile Takeovers & Shareholder Activism Resource Kit.