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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/X/ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Saratoga Resources, Inc.
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(Name of Registrant as Specified in its Charter)
Saratoga Resources, Inc. Stockholders' Committee
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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SARATOGA RESOURCES, INC.
STOCKHOLDERS' COMMITTEE
C/O JOSEPH T. KAMINSKI
11931 WICKCHESTER, SUITE 209
HOUSTON, TX 77043
SEPTEMBER 7, 1996
Dear Fellow Stockholders:
On May 15, 1996, Joseph T. Kaminski filed a derivative lawsuit on behalf
of the Company [Cause No. 96-24469 in Harris County, Texas] which among other
things, seeks to recover for the benefit of the Company, actual and exemplary
damages against Defendants Thomas F. Cooke, Chief Operating Officer and
Chairman of the Board and stockholder, and Randall F. Dryer, Director and
stockholder, and asked the court to issue an injunction to protect the assets
of the Company until a stockholder meeting could be held. On that date, the
court signed a Temporary Restraining Order restraining Defendants Cooke and
Dryer from among other things: 1) transferring or moving funds or assets of
Saratoga; 2) pledging or otherwise encumbering the assets of Saratoga; 3)
incurring any liabilities on behalf of Saratoga outside the ordinary course of
business; and 4) interfering with Mr. Kaminski's access to corporate records
and files.
On May 20, 1996, Kaminski filed suit to prohibit Cooke and Dryer from
undertaking certain activities which we feel were a breach of these fiduciary
duties to Saratoga. As a result of this action, Cooke and Dryer agreed to an
injunction which enjoined them from among other things:
1. Interfering with Kaminski's rights as a stockholder and director;
2. Conducting any business activity on behalf of Saratoga outside the
ordinary course of business; and
3. Requiring notification to Kaminski at least 72 hours prior to any
Board meeting, including providing an agenda.
Notwithstanding the aforementioned, Cooke and Dryer sought to remove
Kaminski as a director through a solicitation of a stockholder agreement (the
"Agreement") whereby votes were being solicited through what we believe were
false statements and a violation of federal proxy solicitation rules and
regulations.
On July 8, 1996, a hearing was held for a Temporary Injunction and the
Appointment of Receiver. The court signed an order on July 15, 1996.
On or about July 23, 1996, the Court modified the Supplemental Temporary
Injunction with respect to any findings concerning federal securities laws and
Temporary Injunction violations. The
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Court did, however rule that the shareholder agreement is null and void and has
recently denied motions that it be stricken. The Temporary Injunction orders
remaining in place read as follows:
1. "Defendant Saratoga Resources, Inc. is prohibited from paying any
attorneys' fees for or on behalf of Cooke or Dryer, in this lawsuit
or any other lawsuit unless payment of these fees is in compliance
with Delaware law;
2. Defendants are hereby enjoined from any continued solicitation of
the shareholders related in any manner to Plaintiff's status as a
shareholder or director unless such solicitation is in compliance
with Section 14(a) of the Securities Exchange Act and the Proxy
Rules and Regulations related thereto;
3. The "Agreement" marked as Exhibit 1 to the July 8, 1996 hearing is
hereby declared void and unenforceable, together with any
signatures to an agreement similar to Exhibit 1;
4. Defendants are hereby ordered to communicate, in writing, to each of
the individuals or entities solicited by Defendants regarding
Exhibit 1, or a similar agreement, that the agreement is void and
unenforceable;
5. Saratoga Resources, Inc. complete all required SEC filings (8-K,
10-K, 10-Q) not later than August 1, 1996;
6. Defendant Saratoga Resources, Inc. is hereby ordered to submit all
documents which evidence payment of attorneys' fees and expenses,
or being billed for attorneys' fees and expenses, related to the
representation of Defendants by the following law firms from
October 31, 1995 to the present for an in camera inspection by the
Court by July 26, 1996;
7. Plaintiff's application for appointment of a receiver is denied,
without prejudice to Plaintiff's right to move at some later date
for appointment of a receiver;
8. Saratoga Resources, Inc. conduct its annual shareholders meeting to
approve a new business plan and elect new directors no later than
August 24, 1996."
Despite the order described in item 4 above, Defendants Cooke and Dryer
only recently began to comply with those provisions which remained in place.
Again, the Agreement sought to solicit votes to remove Mr. Kaminski from the
Board of Directors as he is the only other director and is opposed to their
actions.
Other litigation currently pending against the Company relates to: 1)
Cooke's refusal to pay Kaminski's deferred salary and expenses and 2) numerous
suits initiated by creditors as a result of management's alleged failure to
satisfy certain obligations. The most recent creditor suit was filed on August
20, 1996.
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Cooke, Dryer and Saratoga have also filed a lawsuit against Kaminski
in Travis County, Texas. Cause No. 96-05540, Saratoga Resources, Inc., Thomas F.
Cooke and Randall F. Dryer v. Joseph T. Kaminski, 261st Judicial District Court
Travis County, Texas. This lawsuit alleges fraud, breach of fiduciary duty,
intentional and negligent misrepresentation and other claims. These litigation
proceedings are described in the Company's proxy as well as its other public
documents. It is our belief that Mr. Cooke and Dr. Dryer will ask the Company
to pay their personal legal expenses in this action as well as others.
In their Proxy Statement, Cooke and Dryer, as a majority or the current
Board of Directors, seek to have their personal legal expenses paid by the
Company which could be excessive and further, ask the stockholders to ratify
the personal expenses paid by the Company on behalf of Cooke. Both proposals
are complaints in the Company's derivative lawsuit against Cooke and Dryer. The
Committee believes that payment of these expenses would adversely affect the
Company.
Further Cooke and Dryer will be asking the stockholders to ratify a
plan whereby the Board of Directors, NOT THE STOCKHOLDERS, would determine the
future of the Company. Mr. Cooke has had five months to formulate a business
plan for the Company but has yet to do so. He does however say that he wants to
keep all his options open. PLEASE DO NOT PRE-APPROVE ANY PLAN WHICH HAS YET TO
BE FORMULATED.
Management's Proxy Statement asks for ratification of a proposal which
allows for ... "Entering into a business combination with one or more businesses
at the discretion of the Board of Directors". However, the Committee has been
made aware that in at least two instances stockholders of the Company have
introduced potential merger candidates to the Company. We believe that
management did not give due consideration to the merits of these proposals prior
to rejecting them.
Cooke and Dryer are determined to take control of the Company for the
purpose of promoting their self interest. This has been evidenced by their
continued circumvention of the Temporary Injunction and their continued abuse
and waste of corporate assets.
FAILURE BY THE COMPANY'S STOCKHOLDERS TO ACT NOW MAY RESULT IN THE
CURRENT BOARD AND MANAGEMENT OBTAINING COMPLETE CONTROL OF THE COMPANY
AND PREVENT MEANINGFUL STOCKHOLDER INPUT ON THE FUTURE OPERATION OF
THE COMPANY.
The Saratoga stockholders should decide the future of the Company, and
we are determined to give you that opportunity. In the near future, you will
receive proxy materials from us that will give you the chance to vote FOR our
nominees to serve on the Board and FOR a change of direction in the Company
towards more effective leadership. ADDITIONALLY, WE WILL BE GIVING YOU THE
OPPORTUNITY TO VOTE NO TO CERTAIN OF THE PROPOSALS OF THE BOARD AND MANAGEMENT
OF SARATOGA THAT THEY WILL PROPOSE TO YOU IN THEIR PROXY INCLUDING:
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PROPOSAL 4: APPROVAL OF PAYMENTS OF LEGAL EXPENSES OF COOKE AND
DRYER;
PROPOSAL 5: APPROVAL OF REIMBURSEMENT OF TRAVEL AND LIVING
EXPENSES OF COOKE; AND
PROPOSAL 6: AUTHORIZATION TO PROCEED WITH A BUSINESS PLAN.
KEEP MR. COOKE AND DR. DRYER FROM USING THE COMPANY FOR THEIR PERSONAL
BENEFIT AND WASTING THE RESOURCES OF THE COMPANY. Our nominees are committed
to operating the Company for the maximum benefit of all stockholders.
Our Nominees:
Joseph T. Kaminski, age 46, was one of the co-founders of Saratoga in
July 1990. Mr. Kaminski has been an exploration geophysicist for over 25 years
and has been involved in several start up companies and acquisitions in the oil
and gas industry. In 1971 he started his career at Amoco Production Company and
after seven years, resigned with the title of Senior Exploration Geophysicist.
After several years as an explorationist with three independent oil and gas
firms, he co-founded a company called Seismic Enterprises ("Seismic") in 1982.
From Seismic's inception until 1987 Mr. Kaminski was the CEO and Chairman of
the Board. During his tenure, the company grew and was taken public in 1984
through an I.P.O. This company now called Seitel, is traded on the New York
Stock Exchange. After leaving Seitel, Mr. Kaminski was involved in
acquisitions of both private and publicly traded companies as well as
participation in oil & gas exploration through his wholly owned company,
Kaminski Enterprises. In 1990 he co-founded Saratoga as a private corporation.
In 1993 the Company was merged with Sterling Resources, a publicly traded
company. From September 1993 until May 1996 Mr. Kaminski was the President and
CEO of Saratoga. Mr. Kaminski has been a member of the Society of Exploration
Geophysicists for over 25 years. Other professional affiliations include The
Houston Geophysical Society, Houston Geological Society, American Association
of Petroleum Geologists, Southwest CEO council, Explorer member of the Texas
Independent Producers and Royalty Owners and the Texas Producers Forum.
Ronald F. Bearden, Ph.D., age 54, has for the last 23 years been
primarily engaged in financial consulting activities through R. F. Bearden
Associates, Inc. Most of his consulting activity has been with firms in which
the R. F. Bearden, Associates, Inc. has a significant ownership interest. In
most of the companies for which he acts as an investor and financial consultant
Dr. Bearden serves as an officer and director. Dr. Bearden usually consults
for businesses that are start-ups, high growth or financially troubled
companies requiring financial and operational restructuring. Dr. Bearden
became President and Chairman of this Company in 1988 with the purpose of
assisting in the reorganization of Primo, Inc. (the former name of the
predecessor company Sterling Resources, Inc). Dr. Bearden served as a
Director of the Company from 1988 until 1993.
W. Wayne Hardin, age 56, served in numerous capacities in the field of
oil and gas exploration and production. Since 1981, Mr. Hardin has been a
self-employed attorney and business consultant specializing in energy, minerals
and related financial matters. From June 1980 through November 1981 Mr. Hardin
served as Executive Vice President, Chief Operating Officer and a director of
Texas General Resources, Inc. and President of Texas General Petroleum
Corporation.
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From June 1977 to June 1980 Mr. Hardin was President, Chief Operating Officer
and a director of National Exploration Company. Mr. Hardin received his B.S.,
Petroleum Engineering, from Louisiana State University, his J.D. from South
Texas College of Law and his P.M.D. from Harvard Graduate School of Business.
Mr. Hardin is also a past chairman of the Oil Recovery Committee and a member
of the State Bar of Texas.
We believe that our nominees will provide the management and direction
necessary for all investors to realize the full value of the Company.
Our reasons for mounting this campaign are straightforward. We do not
believe that the current Board is running the Company for the benefit of its
stockholders.
SARATOGA STOCKHOLDERS OWN THE COMPANY. THE BOARD AND MANAGEMENT ARE
SUPPOSED TO WORK FOR YOU, THE STOCKHOLDER. WE BELIEVE THAT COOKE AND
DRYER HAVE FORGOTTEN FOR WHOM THEY WORK, AND ARE MORE CONCERNED WITH
THEIR PERSONAL MONETARY GAIN RATHER THAN THE COMPANY'S PERFORMANCE. IN
THE NEAR FUTURE, WE WILL BE GIVING YOU A CHANCE TO REMIND THEM TO WHOM
THEY ARE HELD ACCOUNTABLE.
Our proxy materials will be sent to you soon, along with more detailed
communications explaining our particular concerns and our belief that needed
change at Saratoga can only come from the approval of our director nominees IN
CONJUNCTION WITH THE NEGATIVE VOTE REGARDING CERTAIN CURRENT MANAGEMENT'S
PROPOSALS.
PLEASE DO NOT SIGN ANY PROXY SENT TO YOU BY SARATOGA'S MANAGEMENT OR ANY
OTHER ENTITY PRIOR TO THE TIME YOU HAVE REVIEWED THE IMPORTANT INFORMATION WE
WILL SEND TO YOU.
Please take the time to read the materials to be provided to you. If you
have any questions or concerns, or would like to offer support to our effort,
do not hesitate to call Joseph T. Kaminski at (713) 556-1375.
We look forward to speaking with you as our efforts to realize
Saratoga's full potential move forward.
Sincerely yours,
/s/ RONALD F. BEARDEN /s/ JOSEPH T. KAMINSKI
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Ronald F. Bearden Joseph T. Kaminski,
CO-CHAIRMAN SARATOGA CO-CHAIRMAN, SARATOGA
STOCKHOLDER'/COMMITTEE STOCKHOLDERS' COMMITTEE
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INFORMATION CONCERNING
SARATOGA RESOURCES, INC. STOCKHOLDERS' COMMITTEE
As required by the Securities and Exchange Commission, listed below
are the names, principal occupations or employment, and business addresses of
each member of Saratoga Resources, Inc. Stockholders' Committee (the
"Committee") and each of the Committee's nominees for election as directors
of Saratoga Resources, Inc. ("Saratoga"). Also provided is the name and
description, the principal business of any corporation or other organization at
which such employment occurs. The number of shares of common stock of Saratoga
beneficially owned by each person is also noted.
Joseph T. Kaminski is the principal of Kaminski Enterprises and a
Director of Saratoga Resources, Inc. His address is 11931 Wickchester, Suite
209, Houston, Texas 77043. Mr. Kaminski beneficially owns 2,623,371 shares of
stock which includes 100,000 warrants to purchase stock at 120% of an
established offering price. He is a candidate for director.
Ronald F. Bearden is a principal of R. F. Bearden Associates, a
consulting firm. His address is 2800 Post Oak Blvd., Suite 5260, Houston,
Texas 77056. Mr. Bearden beneficially owns 207,014 shares of stock which
includes 200,000 warrants to purchase stock as 120% of offering price in any
secondary offering by Saratoga. He is a candidate for director.
W. Wayne Hardin is an attorney and business consultant specializing
in energy, minerals and financial matters. His address is P.O. Box 571750,
Houston, Texas 77257-1750. Mr. Hardin owns 1,000 shares of stock. He is
a candidate for director.
Rebecca Bearden, wife of Ronald F. Bearden resides at 3350 McCue,
Suite 1103, Houston, Texas 77056. Ms. Bearden beneficially owns 80,667 shares
of stock.
