NOTICE OF ANNUAL MEETING OF STOCKHOLDERS |
AVAILABILITY OF PROXY MATERIALS – IMPORTANT NOTICE |
Proxy materials are available online https://iproxydirect.com/BDCO |
MEETING DETAILS | ||
Location Blue Dolphin Energy Company 801 Travis Street, 21st Floor Houston, Texas 77002 | Parking Parking will be validated for attendees that park in the 801 Travis Street parking garage (entrance off Rusk Street). |
Proxy Forms Registered stockholders may vote in person at the Annual Meeting by completing a ballot or by submitting their pre-printed proxy form. Beneficial stockholders that desire to vote in person at the Annual Meeting must obtain a legal proxy form from the brokerage firm, bank, trust or other nominee and present it to the inspector of election with their ballot. The inspector of election at the Annual Meeting has access to the registered stockholder’s list to verify whether a registered stockholder is entitled to vote as of the Record Date. However, the inspector of election does not have access to the control number verification system that brokerage firms, banks, trusts and other nominees use to verify whether a beneficial stockholder is entitled to vote at the Annual Meeting. See “Frequently Asked Questions – 7. How do I vote if I am a beneficial stockholder?” for more information on voting shares held through a brokerage firm, bank, trust or other nominee. | |||
By Order of the Board | |||
/s/ JONATHAN P. CARROLL | |||
Jonathan P. Carroll | |||
Chairman of the Board | |||
December 3, 2019 | |||
Houston, Texas |
(in millions) | |
Initial payment (September 2017) | $3.7 |
Interim payments under a letter agreement with GEL (July 2018 to April 2019) | 8.0 |
Settlement payment under the settlement agreement with GEL (May 2019) | 10.0 |
Deferred interim installment payments under the settlement agreement with GEL (June 2019 to August 2019) | 0.5 |
Total payments to GEL | $22.2 |
Jonathan P. Carroll Chairman of the Board, Chief Executive Officer and President | ||
PROXY STATEMENT BLUE DOLPHIN ENERGY COMPANY |
PAGE | |
PROCEDURAL MATTERS | 2 |
General | 2 |
Date, Time and Place | 2 |
Purpose | 2 |
Record Date; Who Is Entitled to Vote | 2 |
Material Delivery | 2 |
Quorum | 2 |
Abstentions and Broker Non-Votes | 3 |
Votes Required for Approval | 3 |
Voting Your Shares | 3 |
Revoking Your Proxy | 4 |
Where to Direct Questions | 4 |
Reimbursement of Solicitation Expenses | 4 |
FREQUENTLY ASKED QUESTIONS (“FAQs”) | 5 |
PROPOSALS | 8 |
(1) ELECTION OF DIRECTORS | 8 |
(2) RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |
(3) TRANSACTION OF OTHER MATTERS | |
11 | |
EXECUTIVE OFFICERS | 12 |
CORPORATE GOVERNANCE AND BOARD MATTERS | |
AUDIT COMMITTEE REPORT | |
COMPENSATION DISCUSSION AND ANALYSIS | |
COMPENSATION COMMITTEE REPORT | |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | |
19 | |
RELATED PARTY TRANSACTIONS | 20 |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | |
DIRECTOR NOMINATION AND STOCKHOLDER PROPOSALS BY STOCKHOLDERS FOR ANNUAL MEETING OF STOCKHOLDERS | |
WHERE YOU CAN FIND MORE INFORMATION | |
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS | |
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS | |
27 |
Name, Age Principal Occupation and Directorships During Past 5 Years | Knowledge and Experience | |
Jonathan P. Carroll, Blue Dolphin Energy Company Chairman of the Board (since 2014) Chief Executive Officer, President, Assistant Treasurer and Secretary (since 2012) Lazarus Energy Holdings, LLC (“LEH”) President Together, LEH and Jonathan Carroll Mr. Carroll has served on Blue Dolphin’s Board since 2014. He is currently Chairman of the Board. Since 2004, he has served on the Board of Trustees of the Salient Fund Group, and has served on the compliance, audit and nominating committees of several of Salient’s private and public closed-end and mutual funds. Mr. Carroll previously served on the Board of Directors of the General Partner of LRR Energy, L.P. (NYSE: LRE) from January 2014 until its merger with Vanguard Natural Resources, LLC in October 2015. | Mr. Carroll earned a Bachelor of Arts degree in Human Biology and a Bachelor of Arts degree in Economics from Stanford University, and he completed a Directed Reading in Economics at Oxford University. Based on his educational and professional experiences, Mr. Carroll possesses particular knowledge and experience in business management, finance and business development that strengthen the Board’s collective qualifications, skills and experience. | |
Ryan A. Bailey, Pacenote Capital Managing Partner (since August 2019) and Co-founder Children’s Health System of Texas Head of Investments The Meadows Foundation Investment Officer/Interim Chief Investment Officer (2006 to 2014) Mr. Bailey was appointed to Blue Dolphin’s Board in November 2015. He is currently a member of the Audit and Compensation Committees. He also serves as an advisor and mentor to Texas Wall Street Women, a non-profit member organization; is a member of the advisory board of Solovis, Inc., an investment software company; and serves as a Board member for the Texas Hedge Fund Association. | Mr. Bailey earned a Bachelor of Arts in Economics from Yale University and completed a graduate course in tax planning from the Yale School of Management. He holds professional credentialing as a Chartered Financial Analyst (CFA), Financial Risk Manager (FRM), Chartered Alternative Investment Analyst (CAIA) and Chartered Market Technician (CMT). Based on his educational and professional experiences, Mr. Bailey possesses particular knowledge and experience in finance, financial analysis and modeling, investment management, risk assessment and strategic planning that strengthen the Board’s collective qualifications, skills and experience. | |
Name, Age Principal Occupation and Directorships During Past 5 Years | Knowledge and Experience | |
Amitav Misra, Arundo Analytics, Inc. General Manager Americas (since Vice President of Marketing (since 2017) Cardinal Advisors Taxa, Inc. President, Director and Chief Operating Officer (2012 to 2014) EnerNOC, Inc. Channel Manager (2011 to 2012) Mr. Misra has served on Blue Dolphin’s Board since 2014. He is currently a member of the Audit and Compensation Committees. Mr. Misra serves as an advisor to several energy, technology and private investment companies. He is also a director of the Houston Center for Literacy, a non-profit organization. | Mr. Misra earned a Bachelor of Arts in Economics from Stanford University and holds FINRA Series 79 and Series 63 licenses. Mr. Misra possesses particular knowledge and experience in economics, business development, private equity, and strategic planning that strengthen the Board’s collective qualifications, skills and experience. | |
Christopher T. Morris, Impact Partners LLC President (since 2017) Tatum (a Randstad Company) New York Managing Partner (2013 to 2017) MPact Partners LLC President (2011 to 2013) Mr. Morris has served on Blue Dolphin’s Board since 2012; he is currently Chairman of the Audit and Compensation Committees. | Mr. Morris earned a Bachelor of Arts in Economics from Stanford University and a Masters in Business Administration from the Harvard Business School. Based on his educational and professional experiences, Mr. Morris possesses particular knowledge and experience in business management, finance, strategic planning and business development that strengthen the Board’s collective qualifications, skills and experience. | |
Herbert N. Whitney, Wildcat Consulting, LLC Mr. Whitney has served on Blue Dolphin’s Board since 2012. He previously served on the Board of Directors of Blackwater Midstream Corporation, the Advisory Board of Sheetz, Inc., as Chairman of the Board of Directors of Colonial Pipeline Company, and as Chairman of the Executive Committee of the Association of Oil Pipelines. | Mr. Whitney has more than 40 years of experience in pipeline operations, crude oil supply, product supply, distribution and trading, as well as marine operations and logistics having served as the President of CITGO Pipeline Company and in various general manager positions at CITGO Petroleum Corporation. He earned his Bachelor of Science in Civil Engineering from Kansas State University. Based on his educational and professional experiences, he possesses extensive knowledge in the supply and distribution of crude oil and petroleum products, which strengthens the Board’s collective qualifications, skills and expertise. | |
Name | Position | Since | Age | Position | Since | Age | ||||||
Jonathan P. Carroll | Chief Executive Officer, President, Assistant Treasurer, and Secretary (Principal Executive Officer) | 2012 | 57 | Chief Executive Officer, President, Assistant Treasurer, and Secretary (Principal Executive Officer) | 2012 | 58 | ||||||
Tommy L. Byrd | Chief Financial Officer (Principal Financial Officer) Treasurer, and Assistant Secretary | 2015 2012 | 61 |
Jonathan P. Carroll was appointed Chairman of the Board of Blue Dolphin in 2014, and he was appointed Chief Executive Officer, President, Assistant Treasurer and Secretary of Blue Dolphin in 2012. He has also served as President of LEH since 2006 and is its majority owner. Together, LEH and Jonathan Carroll own 82.1% of Blue Dolphin’s Common Stock as of the Record Date. Before founding LEH, Mr. Carroll was a private investor focused on direct debt and equity investments, primarily in distressed assets. Since 2004, he has served on the Board of Trustees of Salient Fund Group, and has served on the compliance, audit and nominating committees of several of Salient’s private and public closed-end and mutual funds. Mr. Carroll previously served on the Board of Directors of the General Partner of LRR Energy, L.P. (NYSE: LRE) from January 2014 until its merger with Vanguard Natural Resources, LLC in October 2015. He earned a Bachelor of Arts degree in Human Biology and a Bachelor of Arts degree in Economics from Stanford University, and he completed a Directed Reading in Economics at Oxford University. |
December 31, | December 31, | |||
2017 | 2016 | 2018 | 2017 | |
Audit fees | $229,568 | $196,971 | $137,888 | $229,568 |
Audit-related fees | - | - | ||
Tax fees | - | - | ||
All other fees | - | - | ||
$229,568 | $196,971 | $137,888 | $229,568 |
Name and Principal Position | Year | Salary | Total | Year | Salary | Total |
Jonathan P. Carroll | 2017 | $- | 2018 | $- | ||
Chief Executive Officer and President | 2016 | $- | 2017 | $- | ||
Tommy L. Byrd(1) | 2017 | $100,000 | 2018 | $100,000 | ||
Chief Financial Officer | 2016 | $100,000 | 2017 | $100,000 | ||
Name | Cash Fees | Stock Awards(1)(2) | Total |
Christopher T. Morris | $25,000 | $20,000 | $45,000 |
Ryan A. Bailey | 22,500 | 20,000 | 42,500 |
Amitav Misra | 22,500 | 20,000 | 42,500 |
Herbert N. Whitney | - | - | - |
$70,000 | $60,000 | $130,000 |
(1) | At December 31, |
(2) | In accordance with SEC rules, the grant date fair value of non-employee director stock awards is calculated by multiplying the number of shares of Common Stock awarded by the closing price of Blue Dolphin’s Common Stock on the grant date, which was |
Title of Class | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | |
Common Stock | Lazarus Energy Holdings, LLC | 8,426,456 | 76.8% | Lazarus Energy Holdings, LLC | 8,426,456 | 68.4% | |
801 Travis Street, Suite 2100 | 801 Travis Street, Suite 2100 | ||||||
Houston, Texas 77002 | Houston, Texas 77002 | ||||||
801 Travis Street, Suite 2100 | |||||||
Houston, Texas 77002 |
Title of Class | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | |
Common Stock | Jonathan P. Carroll(2) | 8,763,300 | 79.8% | Jonathan P. Carroll(2) | 10,115,151 | 82.1% | |
Common Stock | Christopher T. Morris / Mpact Partners, LLC | 75,026 | * | Christopher T. Morris / Mpact Partners, LLC | 75,026 | * | |
Common Stock | Amitav Misra | 66,767 | * | Amitav Misra | 66,767 | * | |
Common Stock | Ryan A. Bailey | 60,676 | * | Ryan A. Bailey | 60,676 | * | |
Common Stock | Herbert N. Whitney | 9,683 | --- | Herbert N. Whitney | 9,683 | --- | |
Common Stock | Tommy L. Byrd | --- | |||||
Directors/Nominees and Executive Officers as a Group (6 Persons) | 8,975,452 | 81.8% | |||||
Directors/Nominees and Executive Officers as a Group (5 Persons) | Directors/Nominees and Executive Officers as a Group (5 Persons) | 10,327,303 | 83.8% | ||||
Principal Amount: | $4.0 million |
Maturity Date: | August 2018 |
Principal and Interest Payment: | $500,000 annually |
Interest Rate: | 16.00% |
September 30, | December 31, | |||
2018 | 2017 | September 30, | December 31, | |
(in thousands) | 2019 | 2018 | ||
(in thousands) | ||||
LEH | $4,303 | $4,000 | ||
June LEH Note (in default) | $868 | $611 | ||
BDPL Loan Agreement (in default) | 6,014 | 5,534 | ||
LEH total | 6,882 | 6,145 | ||
Ingleside | 1,263 | 1,169 | ||
March Ingleside Note (in default) | 1,345 | 1,283 | ||
Jonathan Carroll | 966 | 439 | ||
March Carroll Note (in default) | 1,705 | 1,147 | ||
6,532 | 5,608 | 9,932 | 8,575 | |
Less: Long-term debt, related party, | ||||
current portion | (6,532) | (4,000) | ||
Less: Long-term debt, related party, current portion, in default | (7,918) | (7,041) | ||
Less: Accrued interest payable, related party (in default) | (2,014) | (1,534) | ||
$- | $1,608 | $- |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | (in thousands, except percent amounts) | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Refinery operations | (in thousands, except percent amounts) | |||||||||||||||
LEH | $27,299 | 28.7% | $20,803 | 31.1% | $73,415 | 28.6% | $59,786 | 33.8% | $25,034 | 31.8% | $27,299 | 28.7% | $70,016 | 31.0% | $73,415 | 28.6% |
Other customers | 67,169 | 70.4% | 45,330 | 67.8% | 180,830 | 70.4% | 114,882 | 65.0% | 52,503 | 66.8% | 67,169 | 70.4% | 152,636 | 67.6% | 180,830 | 70.4% |
Tolling and terminaling | ||||||||||||||||
LEH | - | 0.0% | 56 | 0.1% | - | 0.0% | 675 | 0.4% | ||||||||
Other customers | 1,075 | 0.9% | 710 | 1.0% | 2,659 | 1.0% | 1,499 | 0.8% | 1,096 | 1.4% | 1,075 | 0.9% | 3,253 | 1.4% | 2,659 | 1.0% |
$95,543 | 100.0% | $66,899 | 100.0% | $256,904 | 100.0% | $176,842 | 100.0% | $78,633 | 100.0% | $95,543 | 100.0% | $225,905 | 100.0% | $256,904 | 100.0% |
Three Months Ended September 30, | Nine Months Ended September 30 | |||||||
2018 | 2017 | 2018 | 2017 | |||||
Amount | per bbl | Amount | per bbl | Amount | per bbl | Amount | per bbl | |
(in thousands, except per bbl amounts) | ||||||||
Blue Dolphin's direct operating | ||||||||
expenses | $1,033 | $0.85 | $1,674 | $1.46 | $4,175 | $1.22 | $5,927 | $1.84 |
LEH operating fee | 52 | 0.04 | 84 | 0.07 | 209 | 0.06 | 296 | 0.09 |
Total refinery operating expenses | $1,085 | $0.89 | $1,758 | $1.53 | $4,384 | $1.28 | $6,223 | $1.93 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | 2019 | 2018 | 2019 | 2018 | |||
2018 | 2017 | 2018 | 2017 | (in thousands) | ||||
(in thousands) | ||||||||
Jonathan Carroll | $180 | $171 | $519 | $521 | ||||
Guaranty Fee Agreements | ||||||||
First Term Loan Due 2034 | $110 | $114 | $333 | $344 | ||||
Second Term Loan Due 2034 | 46 | 47 | 138 | 141 | ||||
March Carroll Note (in default) | 33 | 19 | 86 | 34 | ||||
LEH | 166 | 164 | 489 | 542 | ||||
BDPL Loan Agreement (in default) | BDPL Loan Agreement (in default) | |||||||
June LEH Note (in default) | 17 | 6 | 40 | 7 | ||||
Ingleside | 25 | 23 | 96 | 69 | ||||
March Ingleside Note (in default) | 12 | 25 | 63 | 96 | ||||
$371 | $358 | $1,104 | $1,132 | $378 | $371 | $1,140 | $1,104 |
Office of Freedom of Information and Privacy Act Operations | Conventional Reading Rooms | Electronic Reading Rooms | ||
100 F Street, N.E. Mail Stop 2736 Washington, D.C. 20549 (202) 551-8300 | Headquarters Office 100 F Street, N.E. Room 1580 Washington, D.C. 20549 (202) 551-8090 | Public Company Information / SEC Comment and Response Letters https://www.sec.gov/edgar/searchedgar/companysearch.html SEC Opinion, Policy Statements, and Staff Manuals https://www.sec.gov/foia/efoiapg.htm |
By Order of the Board | ||
/s/ JONATHAN P. CARROLL | ||
Jonathan P. Carroll | ||
Chairman of the Board |
BLUE DOLPHIN ENERGY COMPANY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS – DECEMBER | ||||||||||||
CONTROL ID: | ||||||||||||
REQUEST ID: | ||||||||||||
This Proxy is Solicited on Behalf of the Board of Directors Blue Dolphin Energy Company. THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE PROPOSALS WHEN APPLICABLE. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY FORM IS VALID ONLY WHEN SIGNED AND DATED ON THE REVERSE. THE SIGNER ACKNOWLEDGES RECEIPT OF THE NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS AND THE PROXY STATEMENT, REVOKES ALL PREVIOUS PROXIES AND APPOINTS JONATHAN P. CARROLL | ||||||||||||
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.) | ||||||||||||
VOTING INSTRUCTIONS | ||||||||||||
If you vote by phone, fax or internet, please DO NOT mail your proxy card. | ||||||||||||
MAIL: | Please mark, sign, date, and return this Proxy Card promptly using the enclosed envelope. | |||||||||||
FAX: | Complete the reverse portion of this Proxy Card and Fax to | |||||||||||
INTERNET: | https://www.iproxydirect.com/BDCO | |||||||||||
PHONE: | 1-866-752-VOTE(8683) | |||||||||||
ANNUAL MEETING OF THE STOCKHOLDERS BLUE DOLPHIN ENERGY COMPANY PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS | PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: ☒ | |||||||||
Proposal 1 | FOR ALL | ALL | FOR ALL EXCEPT | |||||||
Election of Directors: | ||||||||||
◻ | ||||||||||
Jonathan P. Carroll | CONTROL ID: | |||||||||
Ryan A. Bailey | ||||||||||
Amitav Misra | ||||||||||
Christopher T. Morris | ||||||||||
Herbert N. Whitney | ||||||||||
◻ | ||||||||||
Proposal 2 | FOR | AGAINST | ABSTAIN | |||||||
Ratify the selection of UHY LLP (“UHY”) as our independent registered public accounting firm for the fiscal year ending December 31, | ||||||||||
Proposal 3 | FOR | AGAINST | ABSTAIN | |||||||
Transact any other business that may properly come before the Annual Meeting. | ||||||||||
MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING: ◻ | ||||||||||
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL OF THE DIRECTOR NOMINEES AND “FOR” THE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. | MARK HERE FOR ADDRESS CHANGE ____________________________ ____________________________ ____________________________ IMPORTANT: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. Dated: ________________________, 2012 | |||||||||
(Print Name of Stockholder and/or Joint Tenant) | ||
(Signature of Stockholder) | ||
(Second Signature if held jointly) |