Equal Energy Files Suit against Nawar Alsaadi and Adam Goldstein;
Cites Repeated and Flagrant Violations of Securities Laws
CALGARY, Alberta, Jan. 24, 2013 /CNW/ - Equal Energy Ltd. (TSX:
EQU) (NYSE: EQU) has today initiated legal proceedings against Mr.
Nawar Alsaadi and Dr. Adam Goldstein on the grounds of their repeated
and flagrant violation of disclosure requirements under US
securities laws.
Equal's filing with the United States District
Court, Southern District of New
York, alleges that Mr. Alsaadi and Dr. Goldstein have
ignored since as early as February
2012 disclosure requirements under Sections 13(d) and 14(a)
of the US Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder as part of their campaign
against Equal's board of directors and senior management.
As a result of these actions, the investing
public has been unable to gain crucial information required by law
relating to disclosure by shareholders or shareholder groups
holding more than 5% of a company's shares and by persons engaging
in proxy solicitations. Investors are thus unable to assess the
degree of control that Mr. Alsaadi, Dr. Goldstein and other members
of their group exert over Equal, details of their true plans and
intentions, and whether they have any understandings or
arrangements with third parties regarding the ownership or voting
of Equal shares. This information is material to the investing
public.
"Such undisclosed agreements potentially enable
certain shareholders to take control of a company without warning
and without paying a control premium, to the distinct disadvantage
of other uninformed shareholders", the filing says. "Moreover,
shareholders fulminating for change may have undisclosed financial
incentives, including ones that may present conflicts of interest
with other shareholders." Equal believes that the violations of Mr.
Alsaadi and Dr. Goldstein could undermine the integrity of
shareholder votes at the upcoming annual meeting, and is therefore
pursuing the matter to ensure that all shareholders have access to
full and complete information prior to the meeting.
Mr. Alsaadi and Dr. Goldstein have waged an
irresponsible campaign against Equal that serves their own ends
rather than the interests of all Equal shareholders. In particular,
Mr. Alsaadi has used his blog and Twitter accounts to create
unrealistic expectations among other shareholders. For example, he
asserted on July 26, 2012, that the
conclusion of Equal's strategic review would result in a "50%+
upside within two weeks". Rather than admit his unrealistic
expectations, Mr. Alsaadi has chosen to blame Equal's board and
management for failing to meet his irresponsibly aggressive
targets.
Mr. Alsaadi's and Dr. Goldstein's inappropriate
actions are also disruptive to the responsible governance
priorities being pursued by Equal's board, including the
recruitment of new board members and highly qualified operational
and technical management.
Don Klapko,
Equal's President and Chief Executive Officer, said: "Equal is not
seeking to prevent Mr. Alsaadi and Dr. Goldstein from expressing
their opinions or properly communicating with other shareholders.
However, we are committed to protecting the interests of all our
shareholders. We have filed this suit to ensure that Mr. Alsaadi
and Dr. Goldstein provide the level of transparency to all other
shareholders required by law."
Advance Notice Provision:
In keeping with sound corporate governance, Equal's board has
approved certain advance-notice provisions to the company's
by-laws. Under the provisions, any nomination to the board of
directors must be received by the company no less than 30 days and
no more than 65 days prior to the annual meeting of shareholders.
In the case of a special meeting of shareholders, which is not also
an annual meeting, nominations must be received no later than 15
days after the announcement of the special meeting.
The advance notice policy is designed to comply
with 2013 proxy guidelines set by Institutional Shareholder
Services, a leading independent proxy advisory firm.
The quorum requirement for shareholder meetings
has also been revised. In future, the minimum quorum will comprise
two shareholders holding not less than 25% of the votes.
The amended by-laws are effective immediately
and will apply in relation to the company's 2013 annual shareholder
meeting. Shareholder approval of the amended and restated by-laws
will be sought at such shareholder meeting. A copy of the
amended and restated by-laws will be available on the company's
profile at www.sedar.com.
Other Developments:
Contrary to the impression created by Mr. Alsaadi and Dr.
Goldstein, Equal has taken numerous steps in recent months to
address shareholder concerns:
- We have disposed of several assets, particularly in
Canada, giving the company a
clearer focus in addition to significantly strengthening the
balance sheet.
- We are focusing our resources on the Hunton property in
Oklahoma, which has delivered
excellent returns for our shareholders in the past and which, we
believe, will continue to do so in the future. The Hunton property
will also benefit significantly from higher natural gas and natural
gas liquids prices.
- An annual dividend of 20 U.S. cents per share, paid quarterly,
has been instituted.
- We have strengthened the balance sheet to take advantage of
future opportunities and as a prudent safeguard against future
swings in commodity prices.
- We are reviewing the composition of senior management and the
board to reflect the shift in Equal's focus to Oklahoma. Several management changes have
already been implemented, and further announcements can be
expected.
"We have been and continue to be guided by a
prudent and balanced approach that, we are confident, will bring
significant benefits for all shareholders over time", Mr. Klapko
said. "We are determined to ensure that we do not take Equal back
to the dark days of five years ago when its predecessor
over-extended itself by taking on too much debt. An unsustainable
distribution -- as demanded by Mr. Alsaadi and Dr. Goldstein - was
a key factor in landing the company in financial trouble at that
time."
Dan Botterill,
Equal's Chairman, added: "We appreciate the support we have
received from many shareholders. Equal's board and management will
not allow the distraction caused by Mr. Alsaadi and Dr. Goldstein
to slow down the execution of our strategic plan to preserve and
add value for shareholders.
"We are firmly focused on delivering results
under our 2013 business plan and on positioning Equal to take
advantage of the anticipated recovery in commodity prices."
Further details of Equal's strategic review and
its benefits can be found at www.sedar.com, and at
www.equalenergy.ca.
About Equal Energy:
Equal Energy is an oil and gas exploration and production company
based in Calgary, Alberta, with
its United States operations
office located in Oklahoma City,
Oklahoma. Our common shares and convertible debentures are
listed on the Toronto Stock Exchange under the symbols (EQU,
EQU.DB.B), and our common shares are listed on the New York Stock
Exchange under the symbol (EQU). Our oil and gas assets are
centered on the Hunton liquids-rich natural gas property in
Oklahoma.
Forward-looking Statements:
Certain information in this press release constitutes
forward-looking statements under applicable securities law
including payment of future dividends, the recovery of commodity
prices to more historical norms and the reassertion of the
previously outlined go-forward strategy. Any statements that are
contained in this press release that are not statements of
historical fact may be deemed to be forward-looking statements.
Forward-looking statements are often identified by terms such as
"may," "should," "anticipate," "expects," "seeks" and similar
expressions.
Forward-looking statements necessarily
involve known and unknown risks, oil and gas production; marketing
and transportation; loss of markets; volatility of commodity
prices; currency and interest rate fluctuations; imprecision of
reserve and future production estimates; environmental risks;
competition; incorrect assessment of the value of acquisitions;
failure to realize the anticipated benefits of dispositions;
inability to access sufficient capital from internal and external
sources; changes in legislation, including but not limited to
income tax, environmental laws and regulatory matters. Readers are
cautioned that the foregoing list of factors is not
exhaustive.
Readers are cautioned not to place undue
reliance on forward-looking statements as there can be no assurance
that the plans, intentions or expectations upon which they are
placed will occur. Such information, although considered reasonable
by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated
forward-looking statements contained in this press release are
expressly qualified by this cautionary statement.
Additional information on these and other
factors that could affect Equal's operations or financial results
are included in Equal's reports on file with Canadian and U.S.
securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com), the SEC's website (www.sec.gov),
Equal's website (www.equalenergy.ca) or by contacting Equal.
Furthermore, the forward looking statements contained in this news
release are made as of the date of this news release, and Equal
does not undertake any obligation to update publicly or to revise
any of the included forward-looking statements, whether as a result
of new information, future events or otherwise, except as expressly
required by securities law.
--------------------------------------------
Equal Energy Ltd. ("Equal Energy") will be
filing a proxy statement with the Securities and Exchange
Commission (the "SEC") in connection with the solicitation of
proxies for its 2013 annual meeting of shareholders. Shareholders
are strongly advised to read Equal Energy's 2013 proxy statement
(including any amendments or supplements thereto) when it becomes
available because it will contain important information.
Shareholders will be able to obtain copies of Equal Energy's 2013
proxy statement, any amendments or supplements to the proxy
statement, and other documents filed by Equal Energy with the SEC
in connection with its 2013 annual meeting of Shareholders for no
charge at the SEC's website at www.sec.gov.
Equal Energy, its directors, executive
officers and certain employees may be deemed participants in the
solicitation of proxies from shareholders in connection with Equal
Energy's 2013 annual meeting of Shareholders. Information
concerning the ownership of Equal Energy securities by Equal
Energy's directors and executive officers is included in their SEC
filings on Forms 3, 4 and 5, and additional information is
available in Equal Energy's Notice of Annual General Meeting of
Shareholders held on May 11, 2012 and
the Management Information Circular and Proxy Statement for its
2012 annual meeting of shareholders filed with the Canadian
Securities Administrators on www.sedar.com on April 4, 2012. Information regarding Equal
Energy's directors, executive officers and other persons who may,
under rules of the SEC, be considered participants in the
solicitation of proxies for the 2013 annual meeting of
shareholders, including their respective interests by security
holdings or otherwise, will also be set forth in the definitive
proxy statement for Equal Energy's 2013 annual meeting of
shareholders when it is filed with the SEC.
SOURCE Equal Energy Ltd.