UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Exchange Act of 1934 (Amendment No. )
| Filed by the Registrant | þ | |
| Filed by a Party other than the Registrant | o |
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Section 240.14a-11(c) or
Section 240.14a-12
| þ | Preliminary Proxy Statement | ||
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
| o | Definitive Proxy Statement | ||
| o | Definitive Additional Materials | ||
| o | Soliciting Material pursuant to § 240.14a-11(c) or § 240.14a-12 |
BLUE DOLPHIN ENERGY COMPANY
(Name
(Name of Registrant as specified in its Charter)
______________________________________________________________________
(Name
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(1) Title of each class of securities to which the
transaction applies:
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(3) Per unit price or other underlying value of the
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):
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(1) Amount previously paid: ______________________________________
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| þ | No fee required | ||
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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| o | 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: |
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| (4) | Date Filed: | |||
BLUE DOLPHIN ENERGY COMPANY
801TRAVIS, SUITETravis Street, Suite 2100
HOUSTON, TEXAS
Houston, Texas 77002
801
Houston, Texas 77002
NOTICE OF SPECIALANNUAL MEETING OF STOCKHOLDERS
To Be Held ___________, 2004
to be held Thursday, May 14, 2009
to be held Thursday, May 14, 2009
To the Stockholders of Blue Dolphin Energy Company:
You are cordially invited to attend a special
The annual meeting of stockholders (the "Special Meeting"“Annual Meeting”) of Blue Dolphin Energy Company (the "Company"“Company”) will be held on Thursday, May 14, 2009, at 9:30 a.m., local time, at The Houston Club at 811 Rusk Street, Houston, Texas 77002in the Magnolia Room for the following purposes:
| 1. | To elect five directors to serve until the next annual meeting of stockholders or until their successors are duly elected and qualified, or until their earlier resignation or removal; | ||
| 2. | To consider and vote upon a proposal to amend the Company’s Certificate of Incorporation (the “Certificate”), as amended and restated, to increase the number of authorized common shares, par value $0.01 per share (the “Common Stock”), from 25,000,000 shares to 100,000,000 shares; and | ||
| 3. | To consider and transact any other business that may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Additional information regarding the meeting and the above proposals is set forth in the accompanying Proxy Statement. The Board of Directors has fixed the close of business on April 2, 2009, as the record date for the meeting, and only holders of common stock on the record date are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof. You are cordially invited to attend the Annual Meeting in person.Even if you plan to attend the Annual Meeting, we urge you to vote your shares at your earliest convenience in order to ensure that your shares will be represented at the meeting. You can vote by signing, dating and returning the enclosed proxy card or by submitting your proxy voting instructions through the Internet. If you hold your shares through a broker or other nominee, you should contact your broker to determine whether you may submit your proxy by telephone or Internet.
| For the Board of Directors | ||||
| /s/ IVAR SIEM | ||||
| IVAR SIEM | ||||
| CHAIRMAN AND CHIEF EXECUTIVE OFFICER | ||||
Houston, Texas
April 20, 2009
April 20, 2009
April 20, 2009
To Our Stockholders:
With the downturn of the economy and Hurricane Ike, the second half of last year turned out to be held
_________, ___________, 2004, at 10:00 a.m., Houston time, atdifficult for our industry in general, and for us. We also expect 2009 to be a challenging year. However, times like these yield opportunities. We have assumed an active role in consolidation of smaller companies and expect to be able to broaden our asset base without taking high risks or paying inflated prices, which we have seen a lot of over the Company's
principal executive offices at last few years.
Our pipeline assets performed well in 2008 and suffered only minor damage and interruption as a result of Hurricane Ike. A successful well drilled in late 2008 was completed and connected to our Blue Dolphin Pipeline in the first quarter of 2009. We participated in the development of the prospect and, in addition to revenue from provision of transportation services, retained a small overriding royalty interest. The delay in drilling of the acreage around our Omega Pipeline in the High Island Area continues to be a disappointment. Several high priced blocks have been leased by various operators, but they have not yet been drilled.
Our income from sales of oil and gas production has continued to decline in line with the natural depletion of the reserves in which we have interests. As a result of Hurricane Ike, our production was shut-in from mid September of last year until early February of this year due to damage to third party owned and operated onshore processing facilities through which our production flows.
Earlier this month, we accepted the resignation of Mr. Michael Jacobson, President, which will be effective on May 14, 2009 following our Annual Meeting of Stockholders. He has been a loyal part of Blue Dolphin’s senior management team for more than nineteen years. His influence, professionalism and leadership directed us through many trials with positive results. We appreciate his efforts in preparing the Company to move to the next level and wish him the best in all of his future endeavors. Mr. Thomas Heath will be appointed to the position of President upon Mr. Jacobson’s departure. Tom, who has been with Blue Dolphin for two years as Executive Vice President, has an understanding of the current inner-workings of the Company and has more than 20 years of energy experience having served in various management positions. We are confident that Tom will be able to take the reins of the Company and lead us into the next phase of our evolution.
We appreciate your support and look forward to the work ahead.
With regards,
| /s/ IVAR SIEM | ||
| IVAR SIEM | ||
| CHAIRMAN AND CHIEF EXECUTIVE OFFICER |
801 Travis Street, Suite 2100, Houston, Texas 77002
Phone (713) 568-4725 · Fax (713) 227-7626 · www.blue-dolphin.com
Phone (713) 568-4725 · Fax (713) 227-7626 · www.blue-dolphin.com
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BLUE DOLPHIN ENERGY COMPANY
801 Travis Street, Suite 2100
Houston, Texas 77002
801 Travis Street, Suite 2100
Houston, Texas 77002
PROXY STATEMENT
2009 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement and accompanying Notice and Proxy Card are being furnished to the stockholders of Blue Dolphin Energy Company, a Delaware corporation (the “Company”), in connection with the solicitation of proxies by the Board of Directors of the Company for use at the annual meeting of stockholders (the “Annual Meeting”) and any adjournment or postponement thereof. The Annual Meeting will be held on Thursday, May 14, 2009, at 9:30 a.m., local time, at The Houston Club at 811 Rusk Street, Houston, Texas 77002 in the Magnolia Room. This Proxy Statement and accompanying Notice and Proxy Card are first being mailed to stockholders on or about April 20, 2009. The Company’s Annual Report on Form 10-K for the following purposes:
1. To consider and vote uponfiscal year ended December 31, 2008 is being mailed with this Proxy Statement.
At the issuance of warrants to purchase up to
1,550,000 shares of the Company's common stock pursuant to that
certain Note and Warrant Purchase Agreement dated September 8, 2004
and the transactions contemplated thereby;
2. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation, as amended, to increase the authorized
common stock from 10,000,000 to 25,000,000 shares;
3. To consider and vote upon a proposal to amend and restate the
Company's Certificate of Incorporation, as amended, to (a)
incorporate the other amendments to the Certificate of
Incorporation, that have been approved, orAnnual Meeting, stockholders will be approved by the
stockholders at the Special Meeting and (b) eliminate the authorized
Series A preferred stock;
4. Toasked to: (i) elect sixfive directors to serve until the next annual meeting of stockholders or until their successors are duly elected and qualified, or until their earlier resignation or removal; 5. To(ii) consider and vote upon a proposal to amend the issuanceCompany’s Certificate of warrantsIncorporation (the “Certificate”), as amended and restated, to purchase upincrease the number of authorized common shares, par value $0.01 per share (the “Common Stock”), from 25,000,000 shares to 100,000 shares of the Company's common stock to each of three of the
director nominees;100,000,000 shares; and 6. To(iii) consider and transact any other business that may properly come before the Special Meeting or any adjournment or postponement thereof.
Only stockholders of record at the close of business on September 15,
2004, are entitled to notice of, and to vote at, the SpecialAnnual Meeting and any adjournment or postponement thereof. Your vote is important. Since many
stockholders are not able to attend the Special Meeting, we have enclosed a
proxy card for your use. You may vote on the matters to be acted upon at the
Special Meeting by completing
Record Date and returning the proxy card promptly in the
enclosed stamped return envelope. The Special Meeting is being held in lieu of
the 2004 annual meeting of stockholders.
For the Board of Directors
____________________________________
IVAR SIEM,
Chairman and Chief Executive Officer
Houston, Texas
__________, 2004
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE ENCOURAGED TO
INDICATE YOUR VOTE AS TO THE MATTERS TO BE ACTED UPON ON THE ENCLOSED PROXY CARD
AND RETURN THE PROXY CARD PROMPTLY. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY
CHANGE YOUR VOTE AT THAT TIME.
BLUE DOLPHIN ENERGY COMPANY
801 TRAVIS, SUITE 2100
HOUSTON, TEXAS 77002
PROXY STATEMENT
------------
SPECIAL MEETING OF STOCKHOLDERS
_______________, 2004
------------
This Proxy Statement, the accompanying notice and form of proxy are first
being mailed to stockholders on or about ____________, 2004. These proxy
materials are being furnished to the stockholders of Blue Dolphin Energy
Company, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
special meeting of stockholders (the "Special Meeting") and any adjournment or
postponement thereof. The Special Meeting will be held on _____, ___________,
2004, at 10:00 a.m., Houston time, at the Company's principal executive offices
at 801 Travis, Suite 2100, Houston, Texas.
At the Special Meeting, stockholders will be asked (i) to consider and
vote upon the issuance by the Company of warrants to purchase up to 1,550,000
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"), pursuant to that certain Note and Warrant Purchase Agreement dated
September 8, 2004 (the "Purchase Agreement") and the transactions contemplated
thereby; (ii) to consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock from 10,000,000 to 25,000,000 shares; (iii) to consider and vote
upon a proposal to amend and restate the Company's Certificate of Incorporation
to (a) incorporate the other amendments to the Certificate of Incorporation that
have been approved or will be approved by stockholders at the Special meeting
and (b) eliminate the authorized Series A Preferred Stock; (iv) to elect six
directors to serve until the next annual meeting of stockholders or until their
successors are duly elected and qualified, or until their earlier resignation or
removal; (v) to consider and vote upon the issuance of warrants to purchase
100,000 shares of Common Stock, to each of Laurence N. Benz, Michael S. Chadwick
and F. Gardner Parker; and (vi) to transact any other business that may properly
come before the Special Meeting or any adjournment or postponement thereof.
The Company will bear all costs of this solicitation. Proxies will be
solicited primarily by mail, but directors, officers and other employees of the
Company may also solicit proxies in person or by telephone in the ordinary
course of business for which they will not be compensated. The Company has
requested that brokerage houses, nominees, fiduciaries and other custodians send
proxy materials to the beneficial owners of the Common Stock, for which the
Company will reimburse them for their reasonable out-of-pocket expenses.
RECORD DATE; QUORUM
Quorum
The Board of Directors has fixed the close of business on September 15,
2004,April 2, 2009, as the record date (the "Record Date"“Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the SpecialAnnual Meeting. A complete list of stockholders entitled to vote at the SpecialAnnual Meeting will be open for
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examination by any stockholder during normal business hours for a period of ten days prior to the SpecialAnnual Meeting at the Company'sCompany’s principal executive offices,office, 801 Travis Street, Suite 2100, Houston, Texas. AtTexas 77002. On the close of business on September
15, 2004,Record Date, there were outstanding 6,756,54711,745,299 shares of Common Stock.Stock issued and outstanding. Stockholders will beare entitled to one vote per share of Common Stock held of record on the Record Date on each matter presented at the SpecialAnnual Meeting.
The holders of a majority of the totalissued and outstanding shares of Common Stock issued and outstanding, whether present in person or represented by proxies, will constitute a quorum for the transaction of business at the SpecialAnnual Meeting. Abstentions and broker non-votes (i.e.(e.g. shares held by brokers and other nominees as to which they have not received voting instructions from the beneficial owners and lack the discretionary authority to vote on a particular matter) are counted as present for purposes of determining whether a quorum is present.
VOTING; REVOCATION OF PROXY
Voting and Revocability of Proxy
All shares of Common Stock represented at the SpecialAnnual Meeting by properly executed proxies will be voted in accordance with the instructions indicated on the proxies. If no instructions are indicated with respect to any shares for which properly executed proxies have been received, such proxies will be votedvoted: (i) "FOR" the issuance“FOR” election of warrants to purchase up to 1,550,000 shares of Common
Stock pursuantall nominees to the Purchase Agreement and the transactions contemplated
thereby;Board of Directors; (ii) "FOR"“FOR” amending the Company'sCompany’s Certificate of Incorporation to increase the number of authorized shares of Common Stock from 10,000,00025,000,000 shares to
25,000,000
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100,000,000 shares; and (iii) "FOR" amending and restatingin the Company's Certificatediscretion of Incorporation to (a) incorporate the proxy holder on any other amendments tomatters properly brought before the Certificate of
Incorporation that have been approved or will be approved by stockholders at the
Special Meeting and (b) eliminate the authorized Series A Preferred Stock; (iv)
"FOR" election of all nominees to the Board of Directors; and (v) "FOR" the
issuance of warrants to purchase 100,000 shares of Common Stock to each of
Messrs. Benz, Chadwick and Parker.
Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted. Proxies may be revoked by any of the following actions:
o by providing written notice of revocation to the Company;
o delivering to the Company a signed proxy of a later date; or
o by voting in person at the Special Meeting.
| - by providing written notice of revocation to the Company; | ||
| - delivering to the Company a signed proxy of a later date; | ||
| - submitting through the Internet a proxy of a later date; | ||
| - if applicable, submitting by telephone a vote of a later date; or | ||
| - by voting in person at the Annual Meeting. |
Any written notice revoking a proxy should be sent to theBlue Dolphin Energy Company, Attention: Secretary, of the
Company at the Company's principal executive offices, 801 Travis Street, Suite 2100, Houston, Texas 77002.
VOTING AGREEMENT
When
Reimbursement of Solicitation Expenses
The Company will bear all costs of this solicitation. Proxies will be solicited primarily by mail, but directors, officers and other employees of the Company entered intomay also solicit proxies in person, by telephone or other electronic means in the Purchase Agreement, Michael J. Jacobson,ordinary course of business for which they will not receive additional compensation.The Company has requested that brokerage houses, nominees, fiduciaries and other custodians send proxy materials to the Company's President,beneficial owners of Common Stock, for which the members of the board of directors, exceptCompany will reimburse them for their reasonable out-of-pocket expenses.
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
Director Nominees
Messrs. Laurence N. Benz, John N. Goodpasture, Harris A. Kaffie, Erik Ostbye and F. Gardner Parker, and Columbus Petroleum Limited, Inc.,
the Company's largest stockholder, entered intoIvar Siem (each a voting agreement with the
investors that are party to the Purchase Agreement and granted an irrevocable
proxy to Mr. Parker and Barrett L. Webster. The proxy granted to Messrs. Parker
and Webster represents approximately 41% of the issued and outstanding shares of
Common Stock and gives Messrs. Parker and Webster the authority to vote all of
shares of Common Stock beneficially owned“Director Nominee”) have been nominated by such stockholder (i) "FOR" the
issuance of warrants to purchase up to 1,550,000 shares of Common Stock pursuant
to the Purchase Agreement and the transactions contemplated thereby; (ii) "FOR"
amending the Company's Certificate of Incorporation to increase the number of
authorized shares of Common Stock from
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10,000,000 to 25,000,000 shares; (iii) "FOR" election of all nominees to the Board of Directors;Directors to serve as directors until the next annual meeting of stockholders, or in each case until their successors have been duly elected and (iv) "FOR"qualified, or until their earlier resignation or removal. All of the issuanceDirector Nominees have previously been elected by the stockholders. Each Director Nominee has consented to being nominated and has expressed his intention to serve if elected. The Board of warrantsDirectors has no reason to purchase 100,000
shares of Common Stock to each of Messrs. Benz, Chadwick and Parker. In
addition, the stockholders executing the voting agreement with the investors
also agreed not to sell, transfer, assign, pledge or otherwise dispose ofbelieve that any of the shares of Common Stock beneficially owned by such stockholder until either
the closing of the transactions contemplated by the Purchase Agreement or the
termination of the Purchase Agreement.
PROPOSAL NO. 1:
ISSUANCE OF ADDITIONAL WARRANTS
The Company's financial condition has been significantly and negatively
affected by the under performance of its assets and its significant
indebtedness, primarily associated with the abandonment of an offshore oil and
gas property. In order to address this, the Company (i) implemented a cost
reduction plan to reduce operating and overhead costs, (ii) has restructured
certain of its outstanding indebtedness, and (iii) engaged Sanders Morris Harris
Group, Inc., a financial services company headquartered in Houston, Texas
("Sanders Morris"), and Amerifund Capital Group, LLC, a financial services
company headquartered in Houston, Texas ("Amerifund") to assist the Company in
raising capital and other related services. On September 8, 2004, the Company
entered into the Purchase Agreement with certain accredited investors and
directors of the Company, including Laurence N. Benz, Michael S. Chadwick and F.
Gardner Parker, for the purchase and sale of promissory notes in an aggregate
principal amount of $750,000 (the "Promissory Notes") and 2,800,000 warrants
(the "Warrants") to purchase shares of Common Stock at a purchase price of
$0.003 per Warrant. The sale of the Promissory Notes and the first tranche of
1,250,000 Warrants (the "Initial Warrants") closed on September 8, 2004, and the
closing of the sale of the second tranche of 1,550,000 Warrants (the "Additional
Warrants") is subject to stockholder approval, as well as customary closing
conditions. The proceeds from the sale of the Promissory NotesDirector Nominees will be used for
working capital and general corporate purposes.
The Promissory Notes mature on December 7, 2004, and accrue interest at a
rate of 12.0% per annum, of which 4% is payable monthly and 8% is payable at
maturity. The Promissory Notes are secured by a second lien on the Company's
Blue Dolphin Pipeline System. The maturity date of the Promissory Notes will be
extendedunable or unwilling to September 8, 2005,serve if stockholders approve the issuance of the
Additional Warrants. The Additional Warrants will also be issued at a price of
$0.003 per warrant. The Initial Warrants and the Additional Warrants are
immediately exercisable and will expire five years after their date of issuance.
Each Warrant is exercisable for one share of Common Stock at an exercise price
of $0.25 per share. The Warrants contain standard antidilution provisions, as
well as provisions that will result in adjustmentselected. However, should any Director Nominee become unable or unwilling to the exercise price of the
Warrants if the Company issues Common Stock at a price below $0.25, subject to
certain exceptions. At the close of business on _______, 2004, the closing sales
price for the Common Stock on the NASDAQ Small Cap Market was _______.
The Additional Warrants are exercisable into an aggregate of 1,550,000
shares of our Common Stock, representing approximately 23%, of the currently
issued and outstanding Common Stock. Because the Common Stock is listed on the
NASDAQ Small Cap Market, the Company is required to comply with the Marketplace
Rules of the National Association of Securities Dealers, Inc. ("NASD") in
connection with any issuance of Common Stock. Marketplace Rule 4350(i)(1)(D)
requires stockholder approval for any sale, issuance or potential issuance of
Common Stock (or securities convertible into or exercisable for Common Stock) at
a price less than the greater of book value or market value where the amount of
stock being issued exceeds 20% of the voting power outstanding before the
issuance. Therefore, the Company must obtain stockholder approval for the
issuance of the Additional Warrants under the Purchase Agreement.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Pursuant to the terms of the Purchase Agreement, Messrs. Benz, Parker and
Chadwick have agreed to purchase 41,667, 341,665 and 20,834 Additional Warrants,
respectively. Certain affiliates and executive officers of Sanders Morris have
also agreed to purchase an aggregate of 395,833 Additional Warrants. No other
director, executive officer, nominee for electionserve as a director associate of
any director, executive officer or nominee or any other person has any
substantial interest, direct or indirect, by security holdings or otherwise, inat the approvaltime of the issuanceAnnual Meeting, the person or persons exercising the proxies will vote for the election of a substitute Director Nominee designated by the Board of Directors.
Remainder of Page Intentionally Left Blank
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The following sets forth, as of April 20, 2009, each Director Nominee’s name, all positions held with the Company, principal occupation, age and year in which the Director Nominee first became a director of the Additional Warrants.
VOTE REQUIRED
The affirmative vote of holders of a majorityCompany.
| Name, Age and Principal Occupation | Director Since | |||
Ivar Siem, 62,Chairman of the Board and Chief Executive Officer. Mr. Siem has served as Chairman of the Board of Directors of the Company since 1989 and was appointed as Chief Executive Officer in 2004. Since 2000 he has also served as Chairman of the Board of Directors and President of Drillmar, Inc., a well construction and intervention company. From 1995 to 2000 Mr. Siem served on the Board of Directors of Grey Wolf, Inc., during which time he served as Chairman from 1995 to 1998 and as interim President in 1995 during its restructuring. Since 1981, he has been an international consultant in energy, technology and finance. From 1974 to 1981, Mr. Siem managed the oil and gas interests of Fred. Olsen and from 1977 he managed their drilling operation, Dolphin International, Inc. Mr. Siem holds a Bachelor of Science in Mechanical Engineering from the University of California, Berkeley, and has completed an executive MBA program at Amos Tuck School of Business, Dartmouth University. | 1989 | |||
Laurence N. Benz, 47,Director. Dr. Benz was elected as a director of the Company in 2004. He is currently the President / Chief Executive Officer of PT Development LLC, a private equity firm with operating holdings in various health care related companies. From 1987 to 2007 he served as the President of Kentucky Orthopedic Rehabilitation LLC, which he founded. From 1984 through 1989, he served as a Captain in the Army Medical Specialists Corps of the United States Army. Dr. Benz is the founder and organizer of multiple private companies representing healthcare, banking, telecommunications, real estate and consulting services. He also serves on the Board of Directors for multiple private companies. Dr. Benz received a Masters in Physical Therapy from Baylor University, a Masters in Business Administration from Ohio State University and a Doctorate in Physical Therapy from MGH Institute of Health Professionals in Boston, Massachusetts. | 2004 | |||
John N. Goodpasture, 60,Director. Mr. Goodpasture was appointed as a director of the Company in 2006. Since 2001 he has served as Vice President of Corporate Development for Texas Eastern Products Pipeline Company, L.L.C., the general partner of TEPPCO Partners, L.P. In this capacity, Mr. Goodpasture directs the Acquisition and Divestiture activities for the partnership, and also has primary commercial responsibility for the Midstream business segment. From 1999 to 2001 he was Vice President of Business Development for Enron Transportation Services. From 1980 to 1999 Mr. Goodpasture held various executive-level positions with Seagull Energy Corporation, including President of Seagull Pipeline & Marketing Company. Previously he held a variety of management positions at Union Carbide Corporation, where he began his career in 1970. Mr. Goodpasture also serves on the Board of Directors of End Hunger Network of Houston. He earned a Bachelor of Science in Mechanical Engineering from Texas Tech University in Lubbock, Texas. | 2006 | |||
Harris A. Kaffie, 59, Director. Mr. Kaffie has served as a director of the Company since 1989. Mr. Kaffie is a private investor with diverse investments and business activities across such areas as energy, finance, venture capital, real estate development, farming, ranching and minerals. Since 1994, he has been associated with Kaffie Brothers, a real estate, farming and ranching company, where he serves as a partner. He also serves on the Board of Directors of several privately held companies. Mr. Kaffie received a Bachelor of Business Administration from Southern Methodist University in 1972. | 1989 | |||
Erik Ostbye, 57,Director. Mr. Ostbye was elected as a director of the Company in 2006. Since 1983 Mr. Ostbye has been associated with the Arne Blystad Group of companies. Since 2007, he has served as President of Chianti Asset Management LLC, from 2003 to 2007 he was Vice President of Finance of Sokana Chartering, from 1988 to 2003 he served as Vice President of Finance of Blystad Shipping (USA) Inc. and from 1983 to 1988 he was Financial Manager of Arne Blystad AS. Following the sale of the Blystad tanker operation to Eitzen Chemical USA in 2006, Mr. Ostbye has continued his work for the Blystad Group of companies as a U.S. representative. Mr. Ostbye also serves on the Board of Directors of several privately held companies. He holds a Sivilokonom/MBA from the Norwegian School of Management (BI). | 2006 | |||
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Vote Required for Approval
A plurality of the shares of Common
Stock issued outstanding as ofvotes cast by the record datestockholders present and entitled to vote and
represented at the SpecialAnnual Meeting, (inin person or by proxy) at which a quorumproxy, is present will be required to approvenecessary for the issuanceelection of the Additional Warrants.
Because approval of the issuance of the Additional Warrants require the
affirmative vote of holders of a majority of the shares of Common Stock
outstandingdirectors. Accordingly, abstentions and entitled to vote and represented at the Special Meeting,
abstentions will have the same effect as a vote cast against the issuance of the
Additional Warrants. Brokerbroker non-votes will have no effect on approvalthe election of the
issuance of the Additional Warrants.
RECOMMENDATION
directors.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR APPROVALA VOTE “FOR”
THE ELECTION OF ALL OF THEISSUANCE OF THE ADDITIONAL WARRANTS.
PROPOSALS NO. 2 AND 3:
AMENDMENTS TO AND RESTATEMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously approved two proposals to amend
the Company's Certificate of Incorporation, as amended (the "Certificate"). The
Board of Directors also has approved a proposal to amend and restate the
Certificate in its entirety to incorporate the other amendments to the
Certificate, if any, that are approved by the stockholders at the Special
Meeting, to eliminate the designation of the Series A Preferred Stock and to
provide one integrated document in order to avoid confusion with previous
amendments. Following the stockholder approval of the two proposed amendments,
the Company intends to file an Amended and Restated Certificate of
Incorporation, or "Amended and Restated Certificate," substantially in the form
set forth as Exhibit A to this Proxy Statement, which assumes both of the
proposed amendments have been adopted by the stockholders. If the stockholders
do not approve both of the proposed amendments, the Company intends to file an
Amended and Restated Certificate reflecting the amendment that has been approved
by the stockholders.
A description of each of the proposals is set forth below. The
descriptions are a summary only and are qualified in their entirety by reference
to the text of such amendments as set forth in the proposed Amended and Restated
Certificate, which will be substantially as set forth in Exhibit A to this Proxy
Statement. The text of the proposed Amended and Restated Certificate in Exhibit
A is subject to revision if the stockholders do not approve either of the
proposals as set forth below.
4
BACKGROUND
The Certificate has been amended numerous times since it was originally
filed with the Secretary of State of the State of Delaware under the name "Zim
Energy Corp." on January 21, 1986. Since the Company's incorporation, numerous
amendments have been made to the Certificate. The Board of Directors has
determined that several of the provisions of the Certificate may be difficult to
interpret, which may lead to confusion or a lack of clarity with respect to the
rights and obligations of stockholders in certain circumstances. The Board of
Directors therefore determined that it is in the best interests of the Company
and its stockholders to amend and restate the Certificate, as described below.
DIRECTOR NOMINEES.
THE ELECTION OF ALL OF THE
PROPOSAL NO. 2 -— INCREASE THE NUMBER OF SHARES OF COMMON STOCK
AUTHORIZED FOR ISSUANCE
AUTHORIZED FOR ISSUANCE
The Certificate currently authorizes a maximum of 10,000,00025,000,000 shares of Common Stock for issuance by the Company. The Board of Directors has considered, deemed advisable and adopted a resolution approving a proposal to increase the number of shares of Common Stock authorized for issuance from 10,000,00025,000,000 shares to a maximum of 25,000,000100,000,000 shares. As of the Record Date there were 6,720,00111,745,299 shares of Common Stock outstanding. Approximately 1,647,084271,559 additional shares of Common Stock currently are issuable upon exercise of outstanding employee stock options
and the Initial Warrants. In addition, if the stockholders approve the issuance
of the Additional Warrants and the Warrants to each of Messrs. Benz, Chadwick
and Parker, an aggregate of 1,850,000 shares of Common Stock will be issuable,
which will exceed the 10,000,000 shares of Common Stock currently authorized for
issuance under the Certificate by 253,631 shares.options. The proposed increase in the number of shares of Common Stock authorized for issuance will permit:
o the Company to satisfy its obligations under the Additional Warrants
and the Warrants issued to Messrs. Benz, Chadwick and Parker, if
approved by stockholders;
o the issuance of shares of Common Stock to raise capital;
o the issuance of shares of Common Stock in connection with
acquisitions or similar transactions; and
o
| • | the issuance of shares of Common Stock to raise capital; | ||
| • | the issuance of shares of Common Stock in connection with acquisitions or similar transactions; and | ||
| • | the issuance of shares of Common Stock for services rendered to the Company. |
The proposed increase in the number of shares of Common Stock authorized for issuance will provide the Company with the flexibility necessary to enable it to (a)to: (i) raise additional capital through one or more public offerings or private placements of shares of Common Stock or options, warrants, convertible debt, convertible preferred stock, or other securities exercisable or convertible into shares of Common Stock; (b)(ii) acquire additional assets or businesses by using shares of Common Stock for a portion or all of the consideration paid to the sellers; (c)(iii) repay existing indebtedness by issuing shares of Common Stock in lieu of cash; (d)(iv) attract and retain directors, officers and key employees and motivate such persons to exert their best efforts on behalf of the Company by issuing options to acquire shares of Common Stock; or (e)(v) effect stock splits in the form of a stock dividend or otherwise to make stock dividends to existing stockholders. The Board of Directors believes that the number of shares of Common Stock currently authorized for issuance is not adequate to provide a sufficient number of shares for transactions such as those described above, including the issuance of the
Additional Warrants.above. The Board of Directors also believes that the proposed increase in the number of authorized shares of Common Stock could be an important factor in the Company'sCompany’s ability to raise capital.
5
Accordingly, the Board of Directors believes that the proposed amendment to the Certificate is appropriate and in the best interests of the Company and its stockholders generally.stockholders.
Upon approval of the proposed amendment to the Certificate and filing of the Amended and Restated Certificate with the Delaware Secretary of the State of Delaware, the authorized shares of Common Stock will be available for issuance by action of the Board of Directors for any reasons described above or for any other corporate purpose. The authorized shares of Common Stock in excess of those issued will be available for issuance at such times and for such corporate purposes as the Board of Directors may deem advisable, without further action by stockholders, except as may be required by applicable law, the MarketplaceNational Association of Securities Dealers Rules
of NASD or by the rules of any stock exchange or national securities
5
association trading system on which the Company’s Common Stock may be listed or traded in the future. Upon issuance, such shares will have the same rights as the outstanding shares of Common Stock. Holders of Common Stock have no preemptive rights.
Other than in connection with the issuance of the Additional Warrants and
the Warrants to Messers. Benz, Chadwick and Parker, if
If approved by stockholders, we havethe Company has no arrangements, agreements, understandings, or plans at the present time for the issuance or use of the additional shares of Common Stock proposed to be authorized. The Board of Directors does not intend to issue any Common Stock except on terms that the directors deem to be in the best interests of the Company and its then-existing stockholders. Any future issuance of Common Stock will be subject to the rights and preferences of holders of outstanding shares of any preferred stock that we may issue in the future.
The issuance in the future of additional authorized shares may have the effect of diluting the earnings per share and book value per share, as well as the stock ownership and voting rights, of the currently outstanding shares of Common Stock. In addition, the effective increase in the number of authorized but unissued shares of Common Stock may be construed as having an anti-takeover effect. Although the Board of Directors is not proposing this amendment to the Certificate for this purpose, the Company could, subject to the Board'sBoard of Director’s fiduciary duties and applicable law, issue such additional authorized shares to purchasers who might oppose a hostile takeover bid or any efforts to amend or repeal certain provisions of the Certificate or bylaws.by-laws. Such a use of these additional authorized shares could render more difficult, or discourage, an attempt to acquire control of the Company through a transaction opposed by the Board.
PROPOSAL NO. 3 - ELIMINATE THE DESIGNATIONS OF THE SERIES A PREFERRED STOCK AND
AMEND AND RESTATE THE CERTIFICATE IN ITS ENTIRETY
The Board of Directors has approved the amendment and restatement of the
Certificate in order to (a) incorporate the other amendments to the Certificate,
if any, that are approved by Company stockholders at the Special Meeting, (b)
eliminate the designations of the Series A Preferred Stock and (c) provide an
integrated document in order to avoid confusion with previous amendments. The
following discussion summarizes the significant change to the Certificate that
will be effected by the proposed amendment and restatement.
The Certificate currently authorizes the Company to issue a total of
2,500,000 shares of preferred stock in one or more series, each of which has
those powers, preferences and rights, and the qualifications, limitations or
restrictions, determined by our Board of Directors. 210,526 of these shares are
currently designated as Preferred Stock Series A, par value $0.10 per share. No
shares of Preferred Stock Series A are currently outstanding. The elimination of
the Series A Preferred Stock will increase the flexibility of the Board of
Directors by making those shares available to be included in one or more new
series of preferred stock. The Board will also be able to, without stockholder
approval, issue from
6
time to time one or more series of preferred stock and determine the voting
powers, designations, preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions of any series and
the number of shares constituting any series of preferred stock. Although at
present the Company has no plan to designate or issue shares of any new series
of preferred stock, the Board's ability to issue shares of preferred stock
without stockholder approval may be used to discourage an unsolicited
acquisition proposal.
VOTE REQUIRED; EFFECTIVE DATE OF AMENDMENTS
The affirmative vote of the holders of a majority of the shares of Common
Stock issued and outstanding as of the Record Date and entitled to vote at the
Special Meeting will be required to approve each of the foregoing amendments to
the Certificate. Because approval of the amendments to the Certificate requires
the affirmative vote of holders of a majority of the shares of Common Stock
outstanding and entitled to vote thereon, abstentions and broker non-votes will
have the same effect as votes cast against a proposal at the Special Meeting.
If stockholders approve the proposed amendments, they will become
effective upon the filing of the Amended and Restated Certificate with the
Secretary of State of the State of Delaware. Assuming stockholders approve the
proposed amendments, the Company intends to file the Amended and Restated
Certificate as soon as practicable after the Special Meeting.
If, in the judgment of the Board of Directors, any circumstances exist
that would make any or all of the amendments inadvisable then, notwithstanding
approval of the proposed amendments by the stockholders, the Board of Directors
may abandon some or all of the amendments, either before or after approval of
the proposed amendments by the stockholders and at any time prior to the filing
of the Amended and Restated Certificate. Under Delaware law, stockholders will
not be entitled to appraisal rights with respect to the proposed amendments to
the Certificate.
RECOMMENDATION
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT A VOTE “FOR”
THECOMPANY'S
STOCKHOLDERS VOTE "FOR" PROPOSAL 2 TO INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FROM10,000,00025,000,000 SHARES TO 25,000,000, AND "FOR" PROPOSAL 3 TO ELIMINATE
THE CERTIFICATE OF DESIGNATIONS FOR THE SERIES A PREFERRED STOCK AND TO AMEND
AND RESTATE THE EXISTING AMENDED CERTIFICATE OF INCORPORATION TO CONSOLIDATE ALL
PRIOR AMENDMENTS AND MAKE ADDITIONAL CLERICAL CORRECTIONS.
PROPOSAL NO. 4
ELECTION OF DIRECTORS
NOMINEES
Messrs. Laurence N. Benz, Michael S. Chadwick, Harris A. Kaffie, F.
Gardner Parker, Ivar Siem and James M. Trimble (each a "Nominee" and
collectively, the "Nominees") have been nominated by the Board of Directors to
serve as directors until the next annual meeting of stockholders, or in each
case, until their successors have been duly elected and qualified, or until
their earlier resignation or removal. Each Nominee is currently a director of
the Company and has previously been elected by the stockholders, except for
Messrs. Benz and Parker. Messrs. Benz and Parker were appointed to the Board
7
on September 8, 2004 pursuant to the Purchase Agreement. Each Nominee has
consented to be nominated and has expressed his intention to serve if elected.
The Board of Directors has no reason to believe that any of the Nominees will be
unable or unwilling to serve if elected. However, should any Nominee become
unable or unwilling to serve as a director at the time of the Special Meeting,
the person or persons exercising the proxies will vote for the election of a
substitute nominee designated by the Board of Directors.
VOTE REQUIRED
The members of the Board of Directors serve one-year terms. A plurality of
the votes cast by the stockholders present and entitled to vote at the Special
Meeting, in person or by proxy, is necessary for the election of directors.
Accordingly, abstentions and broker non-votes will have no effect on the
election of directors.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF EACH OF THE NOMINEES.
NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS
100,000,000 SHARES.
THE
FROM
Executive Officers
The following table provides certain information with respect to our
directorssets forth the age and background of each executive officers.
officer and the year in which the executive officer first joined the Company:
| Name, Age and | Joined Company | |||
Michael J. Jacobson | 1990 | |||
6
| Name, Age and Principal Occupation | Joined Company | |||
Thomas W. Heath, 46,Executive Vice President and Secretary. Mr. Heath was appointed as Executive Vice President of the Company in 2007 and as Secretary in 2009. From 2004 to 2007 he served as a Vice President of Union Bank of California, N.A., an affiliate of Bank of Tokyo-Mitsubishi UFJ, Ltd., where he developed and implemented an energy derivatives desk supporting Energy Capital Services. From 1988 to 2004 Mr. Heath held a variety of management and executive level positions with the evolving marketing units of Acadian Gas Pipeline System, Coral Energy, L.P. (formerly Shell Trading Gas & Power), Sempra Energy Trading Corp. and Tejas Gas Corporation. Mr. Heath began his career in 1983 with Columbia Gulf Transmission Company where he served in various operational and commercial positions until 1988. He is an alumnus of the University of Houston. | 2007 | |||
T. Scott Howard, 36,Accounting Manager, Treasurer and | 2006 | |||
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
Board of Directors
During 2003,2008, the Board of Directors held eight meetings.four regular meetings and one Special Meeting of the Board of Directors. Each director
except for Messers. Benz and Parker who were appointed to the Board in 2004, attended at least 75% of the total number of meetings of the Board of Directors and committees on which he served. At the beginningThe Board of 2003,Directors has two standing committees, an Audit Committee and a Compensation Committee.
Audit Committee
During 2008, the Audit Committee consisted of Mr. Robert
D. Wagner, Jr. and Mr. Chadwick. Mr. Wagner declined to stand for reelection
as a director in May 2003. In May 2003, the Board of Directors appointed
Messrs. Chadwick,Benz, Kaffie and Trimble to serve as the Audit Committee,Ostbye with Mr. Chadwick electedBenz serving as Chairman of the Audit Committee.Chairman. The Board of Directors has determined that Mr. ChadwickBenz qualifies as an "audit committee
financial expert" as that term is defined in Item 401(e) of Regulation S-B
promulgated byAudit Committee Financial Expert. During the SEC.fiscal year ended December 31, 2008, the Audit Committee met four times. The Audit Committee'sCommittee’s duties include overseeing our financial reporting and internal control functions. Thefunctions and the Audit Committee’s charter is available on our website (www.blue-dolphin.com).
Compensation Committee met
five times during the last fiscal year.
At the beginning of 2003,
During 2008, the Compensation Committee consisted of Messrs. SiemGoodpasture and Kaffie. In May 2003, the Board of Directors elected Messers. Chadwick,
Trimble and Siem to serve as the Compensation Committee. The Compensation Committee'sCommittee does not have a charter, however, its duties are to oversee and set the Company'sCompany’s compensation policypolicies, to approve compensation of executive officers and to administer its stock option plans.incentive plan. The Compensation Committee met twiceone time during the last fiscal year.
Theyear ended December 31, 2008.
Nomination Procedures
Given the size of the Board of Directors currently does not have a standing nominating
committee and consequently has no nominating committee charter. The Board of
Directors believes that it is appropriate under existing circumstances for the
Company not to have a nominating committee because the Board is comprised of
only six members, a majority of whomthe members are independent, as defined under the NasdaqNASDAQ Stock Market listing standards. Instandards, the near future, however, the Company intends
to establishBoard of Directors adopted a “Board of Directors Nomination Procedures” policy in July 2005 in lieu of appointing a standing nominating committee and adopt a nominating committee charter.
Currently, each membercommittee. The policy is used by independent members of the Board of Directors participates in the
consideration of director nominees.
when choosing nominees to stand for election.
7
The Board of Directors does not have a formal policy with regard to the
consideration of any director candidates recommended by shareholders because the
Board believes it can adequately evaluate any such recommendation on a
case-by-case basis. However, the Board of Directors wouldwill consider for possible nomination qualified nominees recommended by shareholders. Shareholdersstockholders. As addressed in the “Board of Directors Nomination Procedures” policy, the manner in which independent directors evaluate nominees for director as recommended by a stockholder will be the same as that for nominees received from other sources. Stockholders who wish to propose a qualified candidate for consideration should submit complete information as to the identity and qualifications of that person to the Secretary of the Company atno later than February 12, 2010, for the 2010 Annual Meeting of Stockholders. The information should be sent to: Blue Dolphin Energy Company, Attention: Secretary, 801 Travis Street, Suite 2100, Houston, Texas 10
77002 before February 14, 2005 for the 2005 Annual Meeting. See "Nominations77002. (See “Nominations and Proposals by Stockholders for the 20052010 Annual Meeting."
Absent special circumstances, theMeeting of Stockholders in this Proxy Statement for more information.)
The Board of Directors will continue to nominate qualified incumbent directors whom the Board of Directors believes will continue to make important contributions to the Board of Directors and the Company. The Board of Directors generally requires that nominees be persons of sound ethical character, be able to represent all shareholdersstockholders fairly, have demonstrated professional achievement, have meaningful experience and have a general appreciation of the major business issues facing the Company.
Director Attendance at the Annual Meeting
The Board of Directors does not have a formal process for identifying and evaluating nominees
for director. However, the Board of Directors will evaluate all candidates,
whether recommended by shareholders or otherwise, in accordance with the above
criteria.
COMMUNICATING WITH BOARD OF DIRECTORS
Any stockholders who desires to contact the Board of Directors or
specific members of the Board of Directors may do so by writing to: Board of
Directors, Blue Dolphin Energy Company, 801 Travis, Suite 2100, Houston,
Texas 77002, Attention: Corporate Secretary.
DIRECTOR ATTENDANCE AT ANNUAL MEETING
The Board of Director'sDirectors’ policy regarding director attendance at the Annual Meeting of Stockholders is that they are welcome to attend, and that the Company will make all appropriate arrangements for directors that choose to attend. In 2003, all2008, four of the five incumbent directors of the Company, and four of the five Director Nominees, attended the Annual Meeting. It is anticipated that all
Nominees will attend the Special Meeting.
REPORT OF THE
AUDIT COMMITTEE REPORT
The duties and responsibilities of the Audit Committee are set forth in a written charter adopted by the Board of Directors. The Audit Committee of the
Board of Directors consists entirelyis comprised solely of directors who meet NASDAQ’s definition of independence as is currently applicable to the independence and
experience requirements of Nasdaq Stock Market, Inc.,Company as determined by the Board of Directors. The Audit Committee reviews and reassesses the written charter annually and recommends any changes to the Board of Directors for approval. TheIn addition, the Audit Committee has reviewed theperiodically reviews relevant requirements of the Sarbanes-Oxley Act of 2002, the rules, proposed and adopted rules of the Securities and Exchange Commission (“SEC”) and the proposed new listing standards of the Nasdaq Small CapNASDAQ Capital Market regarding audit committeeAudit Committee procedures and responsibilities. This year, noresponsibilities to ensure Company compliance. The Audit Committee charter was last amended by the Board of Directors in August 2008 and is available on our website (www.blue-dolphin.com). No changes were made to the amended and restatedAudit Committee charter as adopted last year.
have been made since that time.
The Audit Committee'sCommittee’s primary duties and responsibilities are to:
o assess the integrity of the Company's financial reporting process
and systems of internal control regarding accounting;
o assess the independence and performance of the Company's independent
accountants; and
o provide an avenue of communication among the Company's independent
accountants, management and the Board of Directors.
| - assess the integrity of the Company’s financial reporting process and systems of internal control regarding accounting; | |||
| - assess the independence and performance of the Company’s independent registered public accounting firm; and | |||
| - provide an avenue of communication among the Company’s independent registered public accounting firm, management and the Board of Directors. |
Management is responsible for the Company'sCompany’s internal controls and the financial reporting process. The independent accountants areregistered public accounting firm is responsible for performing an independent audit of the Company'sCompany’s consolidated financial statements in accordance with auditing standards generally accepted in
11
of the United StatesPublic Company Accounting Oversight Board and to issue a report thereon. The Audit Committee'sCommittee’s responsibility is to monitor and oversee these processes.
At the beginning of 2003,
8
During 2008, the Audit Committee consisted of Mr. Robert
D. Wagner, Jr. and Mr. Chadwick. In May 2003, the Board of Directors elected
Messrs. Chadwick,Benz, Kaffie and Trimble to serve as the Audit Committee,Ostbye with Mr. Chadwick electedBenz serving as Chairman of the Audit Committee.Chairman. The Board of Directors has determined that Mr. ChadwickBenz qualifies as an "audit committee
financial expert" as that term is defined in Item 401(e) of Regulation S-B
promulgated by the SEC. The Audit Committee's duties include overseeing our
financial reporting and internal control functions.Committee Financial Expert. The Audit Committee met fivefour times during the fiscal year 2003.
ended December 31, 2008.
The Audit Committee reviewed and discussed the audited financial statements of the Company for the fiscal year ended December 31, 20032008 with the Company'sCompany’s management and management represented to the Audit Committee that the Company'sCompany’s financial statements were prepared in accordance with accounting principles generally accepted in the United States.States of America. The Audit Committee discussed with UHY Mann Frankfort Stein & Lipp CPA's, LLP ("Mann Frankfort"(“UHY”), the Company'sCompany’s independent accountants,registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 61,Communication with Audit Committees, and related amendments (Communication
with Audit Committees).
amendments.
The Audit Committee received the written disclosures and the letter from Mann FrankfortUHY as required by Independence Standards Board Standard No. 1,
(IndependenceIndependence Discussion with Audit Committees)Committees, and the Audit Committee discussed with Mann FrankfortUHY their independence from the Company. The Audit Committee considered the non-audit services provided by Mann FrankfortUHY and determined that the services provided are compatible with maintaining Mann
Frankfort'sUHY’s independence. The feesAudit Committee must pre-approve all audit and non-audit services provided to the Company by its independent accountants.
Fees paid to Mann FrankfortUHY in calendarfiscal years 2003ended December 31, 2008 and 20022007 by the Company arewere as follows:
| 2008 | 2007 | |||||||
| Audit fees | $ | 128,000 | $ | 126,615 | ||||
| Audit-related fees | 13,529 | 8,943 | ||||||
| Tax fees | 21,288 | 20,597 | ||||||
| All other fees | — | — | ||||||
| Total | $ | 162,817 | $ | 156,155 | ||||
Audit Feesfees include fees related to the audit of our consolidated financial statements and review of our quarterly reports that are filed with the SEC. Audit-related fees include fees related to consultation concerning financial accounting and reporting standards for share based payments to employees and non-employees, current and deferred taxes and revenue recognition. Tax Fees werefees primarily include fees for preparation of federal and state income tax returns andas well as tax planning services.
The Audit Committee must pre-approve all audit and non-audit services
provided to the Company by its independent accountants.
Based on the Audit Committee's discussions with management and Mann
Frankfort, and the Audit Committee'sUHY, review of the representation of management and review of the report of Mann FrankfortUHY to the Audit Committee, the Audit Committee recommended to the Board of Directors that the Company'sCompany’s audited financial statements be included in the Company'sCompany’s Annual Report on Form 10-KSB/A10-K for the fiscal year ended December 31, 2003 for filing2008, as filed with the Securities and Exchange
Commission.
12
SEC.
The Audit Committee:
Michael S. Chadwick,
Laurence N. Benz, Chairman
Harris A. Kaffie
James M. Trimble
COMPENSATION OF DIRECTORS
Erik Ostbye
Laurence N. Benz, Chairman
Harris A. Kaffie
Erik Ostbye
9
CORPORATE GOVERNANCE
Director Independence
The Board of Directors has affirmatively determined that with the exception of Mr. Siem, all directors are independent and have no material relationship with the Company (either directly or indirectly or as a stockholder or officer of an organization that has a relationship with the Company), and that all members of the Audit and Compensation Committees are independent, pursuant to NASDAQ Stock Market listing standards.
Code of Conduct
All directors, officers and employees must act ethically at all times and in accordance with the Code of Conduct policy adopted by the Board of Directors in July 2005. The Audit Committee has established procedures to enable anyone who has a concern about the Company’s conduct or policies, or any employee who has a concern about the Company’s accounting, internal accounting controls or auditing matters, to communicate that concern directly to the Chairman of the Audit Committee. The Company’s Code of Conduct policy prohibits any employee from retaliating or taking any adverse action against anyone for raising or helping to resolve an integrity concern. Violations and/or concerns may be sent anonymously by mail to Laurence N. Benz (Audit Committee Chairman, Blue Dolphin Energy Company), 13000 Equity Place, Suite 105, Louisville, Kentucky 40223, via email to larry@physicaltherapist.com or such other contact information for Dr. Benz that the Company may post on its website from time to time.
Code of Ethics
In fiscal yearApril 2003, the Board of Directors adopted a Code of Ethics that is applicable to the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Ethics is posted on our website (www.blue-dolphin.com) and is available to any stockholder, without charge, upon written request to Blue Dolphin Energy Company, paidAttention: Secretary, 801 Travis Street, Suite 2100, Houston, Texas 77002. Any amendments to, non-employeeor waivers to, provisions of the Code of Ethics will be disclosed on our website.
Communicating with the Directors
Any stockholder who desires to contact the Board of Directors or specific members of the Board of Directors an annual retainermay do so by writing to: Blue Dolphin Energy Company, Attention: Secretary for Board of $12,000, payable 50%Directors, 801 Travis Street, Suite 2100, Houston, Texas 77002.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors does not know of any matter to be acted upon at the Annual Meeting other than those matters as described in Proposal Nos. 1 and 2 and as set forth in the Notice. If other business comes before the Annual Meeting, the persons named on the proxy will vote the proxy in accordance with their best judgment.
10
EXECUTIVE AND DIRECTOR COMPENSATION
Executive Compensation Policy and Procedures
Compensation for the Company’s executive officers consists of base salary, cash bonuses and 50%incentive awards that have historically consisted of stock options. The Compensation Committee has the authority to approve compensation in Common Stock.all forms for executive officers based on its experience and informal consideration of competitive market practices regarding the compensation of executive officers in companies of similar size and complexity. The AuditCompensation Committee chairman receives an annual retainer of $3,000has not used compensation consultants in the past in making its determinations. The Company believes that stock ownership by its executive officers and other Audit Committee members receive an annual retainer of $1,500. No
additional remuneration is paid to directors for committee meetings attended,
except that directors are entitled to be reimbursed for expenses related to
attendance of board or committee meetings. No additional compensation is paid to
directors serving onemployees furthers the Compensation Committee.
EXECUTIVE COMPENSATION
The following table sets forthalignment between the compensation paid to the Company's
Chief Executive Officer and eachinterests of the executive officers whose annual salary
exceeded $100,000 in fiscal 2003 (collectively,and other employees and the "Named Executive Officers")
for services renderedstockholders, thereby enhancing the Company’s efforts to the Company.
SUMMARY COMPENSATION TABLE*
- ----------------
* Excludes certain personal benefits, the aggregate value of which do not
exceed 10% of the Annual Compensation shown for each person.
(1) In fiscal year 2001 no options were granted to the Named Executive
Officers.
(2) In connection with the implementation of the Company's cost reductionimprove stockholder returns.
The Company’s stock incentive plan Mr. Atwood ceased to be an employee of the Company on August 1,
2004.
13
OPTION GRANTS IN LAST FISCAL YEAR
- ---------------
(*) The per share market price, as reported by the NASDAQ Small Cap Market on
January 6, 2003, the date of grant, was $0.43.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
- ---------------
(1) Includes options that expired on January 13, 2004 as follows: Mr. Siem -
4,000, Mr. Jacobson - 4,000, Mr. Atwood - 2,667 and Mr. Lloyd - 1,667.
(2) Based on the difference between the closing bid price on December 31, 2003
(the last trading day of 2003) which was $1.66 per share, which exceeded
the exercise price.
The Company's stock option plans provideprovides that upon a change of control, the Compensation Committee may accelerate the vesting of options, cancel options and make payments in respect thereof in cash in accordance with the terms of the stock option plans,incentive plan, adjust the outstanding options as appropriate to reflect such change of control or provide that each option shall thereafter be exercisable for the number and class of securities or property that the optionee would have been entitled to receive had the option been exercised. The stock option plans provideincentive plan provides that a change of control occurs if any person, entity or group acquires or gains ownership or control of more than 50% of the outstanding Common Stock or, if after certain enumerated transactions, the persons who were directors before such transactions cease to constitute a majority of the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The compensation of executive officers is reviewed on an annual basis, as well as when changes in responsibilities occur. The Compensation Committee may not delegate its authority to approve compensation determinations for executive officers. The Compensation Committee approves changes in compensation for Messrs. Jacobson, Heath and Howard based on the recommendations of Mr. Siem as principal executive officer and Chairman of the Board of Directors. The Compensation Committee determines the compensation for Mr. Siem.
Remainder of Page Intentionally Left Blank
11
Compensation for Named Executives
The following table sets forth the compensation paid to the Company’s principal executive officer and the two most highly compensated executive officers other than the principal executive officer whose annual salary exceeded $100,000 in the fiscal year ended December 31, 2008 (collectively, the “Named Executive Officers”) for services rendered to the Company:
SUMMARY COMPENSATION TABLE
| Non-Equity | ||||||||||||||||||||||||||||||||
| Stock | Option | Incentive Plan | All Other | |||||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus | Awards | Awards(3) | Compensation | Compensation | Total | ||||||||||||||||||||||||
Ivar Siem(1) Chairman of the Board and | 2008 | $ | 100,000 | $ | — | — | $ | 84,970 | — | — | $ | 184,970 | ||||||||||||||||||||
| Chief Executive Officer | 2007 | $ | 83,333 | $ | 30,000 | — | $ | 21,243 | — | — | $ | 134,576 | ||||||||||||||||||||
| Michael J. Jacobson President | 2008 | $ | 180,000 | $ | — | — | $ | 42,485 | — | — | $ | 222,485 | ||||||||||||||||||||
| 2007 | $ | 180,000 | $ | 20,000 | — | $ | 10,621 | — | — | $ | 210,621 | |||||||||||||||||||||
Thomas W. Heath(2) Executive Vice President | 2008 | $ | 175,000 | — | — | $ | 161,280 | — | — | $ | 336,280 | |||||||||||||||||||||
| and Secretary | 2007 | $ | 116,667 | — | — | $ | 94,080 | — | — | $ | 210,747 | |||||||||||||||||||||
| (1) | Mr. Siem’s current salary is based on part-time employment with the Company in his capacity as Chief Executive Officer. | |
| (2) | Mr. Heath has a three year employment contract with an annual base salary of $175,000. His employment with the Company began May 1, 2007. Therefore, the amounts reflected for 2007 are for a partial year. | |
| (3) | Represents amounts recognized for financial statement purposes for the fiscal year ended December 31, 2008, in accordance with Statement of Financial Accounting Standards No. 123(R),Share Based Payments. Assumptions used in the calculation of these amounts are included in footnote 8 to the Company’s audited financial statements for the fiscal year ended December 31, 2008, which is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. |
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12
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||||||
| Equity | Incentive Plan | |||||||||||||||||||||||||||||||||||
| Incentive | Awards: | |||||||||||||||||||||||||||||||||||
| Plan Awards: | Market | Equity Incentive | Market or | |||||||||||||||||||||||||||||||||
| Number of | Number of | Number of | Number of | Value of | Plan Awards: | Payout Value | ||||||||||||||||||||||||||||||
| Securities | Securities | Securities | Shares or | Shares or | Number of | of Unearned | ||||||||||||||||||||||||||||||
| Underlying | Underlying | Underlying | Units of | Units of | Unearned Shares, | Shares, Units | ||||||||||||||||||||||||||||||
| Unexercised | Unexercised | Unexercised | Option | Option | Stock that | Stock that | Units or Other | or Other Rights | ||||||||||||||||||||||||||||
| Options | Options | Unearned | Exercise | Expiration | Have Not | Have Not | Rights that Have | that Have Not | ||||||||||||||||||||||||||||
| Name | - Exercisable | - Unexercisable | Options | Price | Date | Vested | Vested | Not Vested | Vested | |||||||||||||||||||||||||||
Ivar Siem(1) | 8,000 | — | — | $ | 6.00 | 5/17/2010 | — | — | — | — | ||||||||||||||||||||||||||
| 50,000 | 50,000 | — | $ | 2.81 | 10/15/2013 | — | — | — | — | |||||||||||||||||||||||||||
Michael J. Jacobson(1) | 6,000 | — | — | $ | 6.00 | 5/17/2010 | — | — | — | — | ||||||||||||||||||||||||||
| 25,000 | 25,000 | — | $ | 2.81 | 10/15/2013 | — | — | — | — | |||||||||||||||||||||||||||
Thomas W. Heath(2) | 66,000 | 134,000 | — | $ | 2.99 | 5/31/2017 | — | — | — | — | ||||||||||||||||||||||||||
| (1) | Messrs. Siem’s and Jacobson’s unexercisable options vest on October 15, 2009. | |
| (2) | Mr. Heath’s unexercisable options vest 49% on May 1, 2009 and 51% on May 1, 2010. |
Director Compensation Policy and Procedures
Directors who are also employees of the Company are not paid any fees or other compensation for services as a member of September 15, 2004,the Board of Directors or any committee of the Board of Directors. Compensation for members of the Board of Directors and committees of the Board of Directors is approved by the Board of Directors based on recommendations by Mr. Siem as principal executive officer and Chairman of the Board of Directors. As with employee stock ownership, the Company believes that stock ownership by members of the Board of Directors furthers the alignment between the interests of the directors and the stockholders, resulting in an enhancement of the Company’s efforts to improve stockholder returns.
Compensation for Non-Employee Directors
Non-employee directors are paid an annual retainer of $20,000, payable quarterly in the Company’s Common Stock with the number of shares based upon the fair value on the date of payment. The shares are restricted from sale pursuant to holding periods under SEC Rule 144 of the Securities Act of 1933, as amended, and applicable state securities laws. The Audit Committee chairman receives an additional annual retainer of $5,000 and other Audit Committee members receive an additional annual retainer of $2,500. The Audit Committee retainer is payable semi-annually in cash. No additional compensation is paid to directors serving on the Compensation Committee. Directors are entitled to be reimbursed for reasonable out-of-pocket expenses related to in-person meeting attendance.
13
The following table sets forth the compensation paid to non-employee directors in fiscal year ended December 31, 2008:
DIRECTOR COMPENSATION
| Fees Earned | Non-Equity | |||||||||||||||||||||||
| or Paid in | Stock | Option | Incentive Plan | All Other | ||||||||||||||||||||
| Name | Cash | Awards(1) | Awards | Compensation | Compensation | Total | ||||||||||||||||||
| Laurence N. Benz | $ | 5,000 | $ | 20,000 | — | — | — | $ | 25,000 | |||||||||||||||
| John N. Goodpasture | $ | — | $ | 20,000 | — | — | — | $ | 20,000 | |||||||||||||||
| Harris A. Kaffie | $ | 2,500 | $ | 20,000 | — | — | — | $ | 22,500 | |||||||||||||||
| Erik Ostbye | $ | 2,500 | $ | 20,000 | — | — | — | $ | 22,500 | |||||||||||||||
| (1) | Represents amounts recognized for financial statement purposes for the fiscal year ended December 31, 2008, in accordance with Statement of Financial Accounting Standards No. 123(R),Share Based Payments. Assumptions used in the calculation of these amounts are included in footnote 5 to the Company’s audited financial statements for the fiscal year ended December 31, 2008, which is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. |
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14
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth certain information with respect to the beneficial ownership offor shares of Common Stock (the Company's only class of voting security issued and outstanding) as toof April 2, 2009, as held by: (i) all persons or institutions known by us to be beneficial owners of 5% or more of the outstanding shares of Common Stock, (ii) each director and Director Nominee, (iii) each Named Executive Officerexecutive officer; and (iv) all
14
executive officers and directors as a group. Unless otherwise indicated, each of the following persons hasor institutions have sole voting and dispositive power with respect to such shares.
| Shares Owned Beneficially | ||||||||
| Name of Beneficial Owner | Number | Percent(1) | ||||||
Columbus Petroleum Limited, Inc.(2) | 911,712 | 7.8 | % | |||||
Spencer Finance Corp. and Arne Blystad(3) | 842,743 | 7.2 | % | |||||
Spencer Energy AS(3) | 586,743 | 5.0 | % | |||||
Harris A. Kaffie(4) | 853,577 | 7.3 | % | |||||
Ivar Siem(4) | 689,265 | 5.9 | % | |||||
Thomas W. Heath(4) | 227,000 | 1.9 | % | |||||
Michael J. Jacobson(4) | 127,250 | 1.1 | % | |||||
| Laurence N. Benz | 91,010 | * | ||||||
| Erik Ostbye | 40,537 | * | ||||||
| John N. Goodpasture | 39,660 | * | ||||||
T. Scott Howard(4) | 4,500 | * | ||||||
Directors and Executive Officers as a Group (8 Persons) | 2,072,799 | 17.6 | % | |||||
| * | Less than 1%. | |
| (1) | Based upon 12,082,858 shares of Common Stock issued and outstanding on April 2, 2009 and shares of Common Stock issuable upon exercise of options that may be exercised within 60 days of April 2, 2009. | |
| (2) | Based upon a Schedule 13D filed with the SEC on September 8, 2004, the address of Columbus Petroleum Limited, Inc. | |
| (3) | Based on a Schedule 13D filed with the SEC on April 9, 2007, Spencer Finance Corp. and Arne Blystad jointly exercise voting and investment authority over the shares owned by Spencer Finance Corp. Spencer Energy AS is a subsidiary of Spencer Finance Corp., and as such, the 586,743 shares held by Spencer Energy AS are included in the 842,743 shares controlled by Spencer Finance Corp. and Arne Blystad. The principal business address for Spencer Finance Corp., Arne Blystad and Spencer Energy AS was Haakon VII gt. 1, 0161 Oslo, Norway. | |
| (4) | Includes shares of Common Stock issuable upon exercise of options that may be exercised within 60 days of April 2, 2009 as follows: Mr. Kaffie — 83,571; Mr. Siem |
Remainder of Common Stock outstanding on September
Page Intentionally Left Blank
15 2004.
(2) Based on a Schedule 13D filed with the Securities and Exchange
Commission on February 1, 1999. The address of Colombus Petroleum
Limited, Inc., is Aeulestrasse 74, FL-9490, Vaduz, Liechtenstein.
(3) Based on a Schedule 13D filed with the Securities and Exchange Commission
on September 17, 2004. The address of Western Gulf Pipeline Partners, LP
("Western Gulf"), Peregrine Management, LLC ("Peregrine") and Steven A.
Webster is 14701 St. Mary's Lane, Suite 800, Houston, Texas 77079.
(4) Includes shares of Common Stock issuable upon exercise of options that may
be exercised within 60 days of September 15, 2004 as follows: Mr. Siem -
48,000; Mr. Kaffie - 83,571; Mr. Chadwick - 83,571; Mr. Trimble - 57,142;
Mr. Jacobson - 46,000; Mr. Lloyd - 43,000 and all directors and executive
officers as a group - 361,284. Includes shares of Common Stock issuable
upon exercise of warrants that may be exercised within 60 days of
September 15, 2004 as follows: Mr. Chadwick - 20,834; Mr. Benz - 41,667;
Mr. Parker - 41,664; Western Gulf Pipeline Partners, LP - 458,334 and all
directors and executive officers as a group - 104,165.
(5) Peregrine is deemed to be the beneficial owner of Western Gulf due to its
position of general partner of Western Gulf. Steven A. Webster is deemed
to be the beneficial owner of Peregrine due to his position of President
of Peregrine.
(6) In connection with the placement of the Promissory Notes and the Warrants,
Michael S. Chadwick, Harris A. Kaffie, Ivar Siem and James M. Trimble,
directors of the Company, Michael J. Jacobson, the Company's President and
Colombus Petroleum Limited, Inc., a large
15
stockholder of the Company, who combined beneficially own approximately
41% of the Common Stock, entered into a voting agreement with the
purchasers of the Promissory Notes and the Warrants. Under the terms of
this voting agreement, a proxy was granted to F. Gardner Parker, a
director of the Company, and Barrett L. Webster, to vote on (i) the
issuance of the Additional Warrants, (ii) the issuance of Warrants to
Messrs. Benz, Parker and Chadwick, directors of the Company, (iii) the
election of directors, and (iv) the amendment to the Certificate to
increase the authorized Common Stock. With respect to Messrs. Parker and
Webster, includes the 2,744,034 shares of common stock subject to the
voting agreement.
Equity Compensation Plans. The following table sets forth certain
information as of December 31, 2003 with respect to shares of Common Stock that
may be issued under our Incentive Plan and other equity compensation plans.
EQUITY COMPENSATION PLAN INFORMATION
NUMBER OF
SECURITIES
REMAINING
AVAILABLE FOR
FUTURE
NUMBER OF ISSUANCE UNDER
SECURITIES EQUITY
TO BE WEIGHTED-AVER COMPENSATION
ISSUED UPON EXERCISE PLANS
EXERCISE OF PRICE OF (EXCLUDING
OUTSTANDING OUTSTANDING SECURITIES
OPTIONS, OPTIONS, REFLECTED IN
WARRANTS WARRANTS THE FIRST
PLAN CATEGORY AND RIGHTS AND RIGHTS COLUMN)
- -------------------------------- ------------- ------------- ----------------
Equity compensation plan
approved by security holders(1) 487,084 $1.00 162,916
Equity compensation plan not
approved by security holders(2) 14,835 3.13 381,988
------------- ------------- ----------------
Total 501,919 $1.09 544,904
============= ============= ================
- ---------------
(1) Represents shares of Common Stock issuable upon exercise of outstanding
options granted under the Incentive Plan.
(2) All remaining options issued pursuant to this plan expired January 13,
2004.
PROPOSAL NO. 5
TO APPROVE THE ISSUANCE OF WARRANTS TO PURCHASE 100,000 SHARES EACH OF THE
COMPANY'S COMMON STOCK TO THREE DIRECTORS PURSUANT TO THE PURCHASE AGREEMENT
Pursuant to the terms of the Purchase Agreement, the Company agreed to
grant Warrants to acquire 100,000 shares of Common Stock to each of Laurence N.
Benz, Michael S. Chadwick and F. Gardner Parker, each of whom are currently
directors of the Company. The Warrants granted to Messrs. Benz, Chadwick and
Parker will be immediately exercisable and will expire five years after their
date of issuance. Each Warrant is exercisable for one share of Common Stock at
an exercise price of $0.25 per share. These Warrants contain standard
antidilution provisions, as well as provisions that will result in adjustments
to the exercise price of the Warrants if the Company issues Common Stock at a
price below $0.25, subject to certain exceptions.
Marketplace Rule 4350(i)(1)(A) requires stockholder approval for the grant
of the Warrants to Messrs Benz, Chadwick and Parker. Therefore, the Company must
obtain approval for the issuance of these Warrants.
16
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock issued and outstanding and entitled to vote and represented at the Special
Meeting (in person or by proxy) at which a quorum is present, will be required
to approve the issuance of the Warrants to each of Messrs. Benz, Chadwick and
Parker. Because approval of the issuance of Warrants to Messrs. Benz, Chadwick
and Parker require the affirmative vote of holders of a majority of the shares
of Common Stock outstanding and entitled to vote and represented at the Special
Meeting, abstentions will have the same effect as a vote cast against the
issuance of the Warrants to Messrs. Benz, Chadwick and Parker. Broker non-votes
will have no effect on approval of the issuance of the Warrants to Messrs. Benz,
Chadwick and Parker.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR APPROVAL OF
THE ISSUANCE OF THE WARRANTS TO LAURENCE N. BENZ, MICHAEL S. CHADWICK AND F.
GARDNER PARKER.
COMPLIANCE WITH SECTION 16(A)16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires ourthe Company’s directors, executive officers, and stockholders who own more than 10% of our Common Stock, to file reports of stock ownership and changes in ownership with the Securities and Exchange CommissionSEC and to furnish us with copies of all such reports they file.as filed. Based solely on a review of the copies of the Section 16(a) reports furnished to us, we believethe Company believes that during fiscal year 2003,2008, all Section
16(a) filing requirements applicable toof its directors, executive officers and greater than 10% shareholders werestockholders complied with except for Mr. Chadwick who
filed one such report late that reported two transactions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 2003, we entered into a sublease agreement expiring December 31,
2006 for certain of the Company's office space with Tri-Union Development
Corporation ("Tri-Union"). The Company's annual receipts from this sublease are
$78,552. A director of the Company, Mr. James M. Trimble, is the Chairman and
Chief Executive Officer of Tri-Union.
The Company owns 12.8% of the common stock of Drillmar, Inc. Ivar
Siem, Chairman and Chief Executive Officer of the Company, and Harris A.
Kaffie, a director of the Company, are owners of 30.3%, and 30.6%,
respectively, of Drillmar's common stock. Messrs. Siem and Kaffie are both
directors, and Mr. Siem is also Chairman and President, of Drillmar.
In January 2003, Drillmar stockholders approved a restructuring plan
whereby Drillmar will issue up to $3.0 million of convertible notes that will
convert into common stock representing over 99% of Drillmar's outstanding
shares. As a result, the Company's ownership in Drillmar can be reduced to less
than 1%. However, in November 2003, the Company converted its contingent
obligation due from Drillmar for providing office space, accounting and
administrative services from May 2002 through January 2003 totaling $162,000 (9
months at $18,000 per month) into a convertible note, which if converted along
with all of Drillmar's outstanding convertible notes would represent 7.7% of
Drillmar's common stock. Messrs. Siem, Kaffie and Trimble, another director of
the Company, hold Drillmar convertible notes which if converted along with all
of Drillmar's outstanding convertible notes would represent 22.2%, 27.5% and
2.1%, respectively, of Drillmar's common stock.
17
In February 2003, the Company entered into a new agreement with Drillmar
effective as of February 1, 2003, whereby the Company provides office space to
Drillmar for $1,500 per month. The Company also provides professional,
accounting and administrative services to Drillmar based on hourly rates based
on our cost. The agreement can be terminated upon 30 days notice or by the
mutual agreement of the parties.
Several of the Company's directors participated in the Company's recent
placement of Promissory Notes and Warrants. Messers. Benz and Parker each
purchased a Promissory Note in the aggregate principal amount of $25,000 and
Michael S. Chadwick purchased a Promissory Note in the aggregate principal
amount of $12,500. Messrs. Benz, Parker and Chadwick also purchased 41,667,
41,663 and 20,834 Initial Warrants, respectively.
In addition to serving on the Company's Board of Directors, Mr. Chadwick
is also a Senior Vice President and Managing Director of Sanders Morris. The
Company paid Sanders Morris a $25,000 fee in connection with the placement of
the Promissory Notes and Warrants and has agreed to retain Sanders Morris as its
financial advisor to provide, among other services, a fairness opinion in
connection with the Company's next merger, acquisition or similar transaction.
In September 2004 the Company also entered into a consulting agreement with Mr.
Parker. Mr. Parker's consulting agreement with the Company has a term of up to
eighteen months. The Company will pay Mr. Parker a monthly fee of $2,000 and a
bonus that will accrue at the rate of $3,000 per month, payable upon
consummation of a merger or acquisition by the Company.
their Section 16(a) filing requirements.
NOMINATIONS AND PROPOSALS BY STOCKHOLDERS
FOR THE20052010 ANNUAL MEETING OF STOCKHOLDERS
FOR THE
The Company has tentatively set its year 2005 annual meetingthe 2010 Annual Meeting of Stockholders for May 18,
2005.13, 2010. Accordingly, stockholders should submit nominations and proposals in accordance with the guidance set forth below.
Nominations for the year 20052010 Annual Meeting. Meeting of Stockholders
The Company'sCompany’s Certificate of
Incorporation provides that no person shall be eligible for nomination and election as a director unless written notice of such nomination is received from a stockholder of record by the Secretary of the Company 90 days before the anniversary date of the previous year'syear’s annual meeting. Further, such written notice is to be accompanied by the written consent of the nominee to serve, the name, age, business and residence addresses, and principal occupation of the nominee, the number of shares beneficially owned by the nominee, and any other information which would be required to be furnished by law with respect to any nominee for election to the Board of Directors. Stockholders who desire to nominate at the year 2005 annual meeting of stockholders, persons to serve on the Board of Directors at the 2010 Annual Meeting of Stockholders must submit nominations to the Company, at its principal executive office, so that such notice is received by the Company no later than February 17, 2005.12, 2010. In order to avoid controversy as to the date on which any such nomination is received by the Company, it is suggested that stockholders submit their nominations, if any, by certified mail, return receipt requested. (See “Nomination Procedures” in this Proxy Statement for more information.)
Proposals for the year 20052010 Annual Meeting. Meeting of Stockholders
Stockholders who desire to present proposals, other than notices of nomination for the election of directors, to stockholders of the Company at the year 2005 annual meeting2010 Annual Meeting of stockholders,Stockholders, and to have such proposals included in the Company'sCompany’s proxy materials, must submit their proposals to the Company, at its principal executive office, by December 17, 2004.19, 2009. In order to avoid controversy as to the date on which any such proposal is received by the Company, it is suggested that stockholders submit their proposals, if any, by certified mail, return receipt requested.
18
Moreover, any stockholder who intends to submit a proposal for consideration at the Company's 2005 annual meeting,Company’s 2010 Annual Meeting of Stockholders, but not for inclusion in the Company'sCompany’s proxy materials, must notify the Company. Pursuant to the rules of the U.S. Securities and Exchange Commission,SEC, such notice must (1)must: (i) be received at the Company'sCompany’s executive offices no later than [____________, 2005]March 12, 2010 and (2)(ii) satisfy the rules of the U.S. Securities and Exchange Commission.
SEC.
16
RELATIONSHIP WITH INDEPENDENT
REGISTERED PUBLICACCOUNTANTS
In February 2002, on the recommendation of the Audit Committee, the Board
of Directors elected not to continue the engagement of KPMG LLP ("KPMG") as the
Company's independent accountants. The Audit Committee recommended, and the
Board approved, the selection of Mann Frankfort as its new independent
accountants.
In connection with the audits of the Company's consolidated financial
statements for each of the two fiscal years ended December 31, 1999 and 2000,
and the subsequent interim period through February 15, 2002, there were no
disagreements with KPMG on any matter of accounting principles or practices,
financial disclosure, or auditing scope or procedures, which disagreements if
not resolved to their satisfaction, would have caused them to make reference in
connection with their opinion to the subject matter of the disagreement. The
audit reports of KPMG on the consolidated financial statements of the Company
and subsidiaries as of and for the years ended December 31, 1999 and 2000 did
not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting principles,
except that KPMG's report on the Company's consolidated financial statements for
the years ended December 31, 1999 and 2000 contain a separate paragraph stating
that "As discussed in Note 1 to the consolidated financial statements, effective
January 1, 1999, the Company changed its method of accounting for costs of
start-up activities."
During the two fiscal years ended December 31, 2001 and the subsequent
interim period prior to engaging Mann Frankfort, neither the Company nor anyone
on its behalf consulted with Mann Frankfort regarding the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial
statements, and neither a written report nor advice was provided to the Company
by Mann Frankfort that was an important factor considered by the Company in
reaching a decision as to any accounting, auditing or financial reporting issue.
Mann Frankfort,ACCOUNTING FIRM
REGISTERED PUBLIC
UHY has been engaged by the Company'sCompany’s Board of Directors as the Company’s independent accountants for the Company.registered public accounting firm since 2002. The Company expects that they will continue to serve as the Company’s independent accountants.registered public accounting firm. Through December 31, 2008, UHY had a continuing relationship with UHY Advisors, Inc. (“Advisors”) from which it leased auditing staff who were full time, permanent employees of Advisors and through which UHY’s partners provide non-audit services. UHY has only a few full-time employees and therefore, few, if any of the audit services performed were provided by permanent full-time employees of UHY. UHY manages and supervises the audit services and audit staff, and is exclusively responsible for the opinion rendered in connection with its examination. Representatives of Mann FrankfortUHY are expected to be present at the SpecialAnnual Meeting, with the opportunity to make a statement if they desire to do so, and to respond to questions.
OTHER BUSINESS
At the date of this Proxy Statement, the Board of Directors does not know
of any matter to be acted upon at the Special Meeting other than those matters
described above and set forth in the Notice. If other business comes before the
Special Meeting, the persons named on the proxy will vote the proxy in
accordance with their best judgment.
19
INFORMATION INCORPORATED BY REFERENCE
The following documents are being mailed with this proxy statement
and are incorporated herein by reference and deemed to be a part of this proxy
statement:
o Annual Report on Form 10-KSB/A for the fiscal year ended
December 31, 2003; and
o Quarterly Report on Form 10-QSB for the quarter ended
June 30, 2004.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement to the extent that a statement contained
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Proxy Statement.
By Order of the Board of Directors
__________________________________
G. Brian Lloyd
Vice President, Treasurer and Secretary
| By Order of the Board of Directors | ||||
| /s/ MICHAEL J JACOBSON | ||||
| MICHAEL J JACOBSON | ||||
| PRESIDENT | ||||
Houston, Texas
September [____], 2004
April 20,
EXHIBIT A
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BLUE DOLPHIN ENERGY COMPANY
(PURSUANT TO SECTIONS 242 AND 245 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE)
2008
April 20,
17
Blue Dolphin Energy Company a corporation organized and existing under
and by virtueAnnual Meeting of Stockholders (the “Annual Meeting”)
May 14, 2009 at 9:30 a.m. Local Time
The Houston Club (Magnolia Room), 811 Rusk Street, Houston, Texas 77002
May 14, 2009 at 9:30 a.m. Local Time
The Houston Club (Magnolia Room), 811 Rusk Street, Houston, Texas 77002
The undersigned acknowledges receipt of the provisionsNotice of the General Corporation LawAnnual Meeting of Stockholders and the Proxy Statement, revokes all previous proxies and appoints Michael J. Jacobson and T. Scott Howard, and each of them, as proxies, each with the power to appoint his substitute, and authorizes each of them to represent and to vote, as designated on the reverse hereof, all of the Stateshares of Delaware (the "Delaware General Corporation Law"),
DOES HEREBY CERTIFY:
FIRST: That the name of this corporation is Blue Dolphin Energy
Company.
SECOND: That the name under which this corporation was originally
incorporated was ZIM Energy Corp., and the original Certificate of Incorporation
of this corporation was filed with the Secretary of State of the State of
Delaware on January 21, 1986.
THIRD: That this Amended and Restated Certificate of Incorporationcommon stock of Blue Dolphin Energy Company was duly adopted in accordance with the provisions
of Sections 242 and 245 of the General Corporation Law of the State of Delaware.
FOURTH: The text of the Amended and Restated Certificate of
Incorporation of this corporation, as amended hereby, is restated to read in its
entirety as follows:
ARTICLE I
Name
The name of the corporation is Blue Dolphin Energy Company (the
"Corporation").
ARTICLE II
Registered Agent and Office
The address of the registered office of the Corporation in the State of
Delaware is 1209 Orange Street, Corporation Trust Center, Wilmington, County of
New Castle, Delaware 19801. The name of the registered agent of the Corporation
at such address is The Corporation Trust Company.
ARTICLE III
Purposes and Powers
The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful business, act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware (the "Law").
In addition to the powers and privileges conferred upon the Corporation
by law and those incidental thereto, the Corporation shall possess and may
exercise all the powers and privileges, which are necessary or convenient to the
conduct, promotion or attainment of the business, objects or purposes of the
Corporation.
ARTICLE IV
Capital Stock
The total number of shares of stock which the Corporation shall have
the authority to issue is 27,500,000 shares, of which 25,000,000 shall be shares
of Common Stock, par value of $.01 per share ("Common Stock"), and 2,500,000
shall be shares of Preferred Stock of the par value of $.10 per share
("Preferred Stock").
A description of the respective classes of stock and a statement of the
designations and the powers, preferences, and rights, and the qualifications,
limitations and restrictions of the shares of such classes of stock and the
limitations on or denial of the voting rights of the shares of such classes of
stock are as follows:
Section 4.1. Common Stock Provisions. The following provisions apply to
all shares of Common Stock of the Corporation.
(a) Dividends. Subject to the provisions of law and any preferences
of the Preferred Stock or of any other stock then outstanding ranking
prior to the Common Stock as to dividends, the holders of the Common
Stock shall be entitled to receive, when, as and if declared by the
Board of Directors of the Corporation, out of funds legally available
therefor as determined by the Board of Directors, dividends payable in
cash, securities or other property, or any other stock having a
preference as to the payment of dividends. No dividends shall be
declared or paid on any class of Common Stock unless any and all
current and accumulated dividends payable with respect to any Preferred
Stock or any other stock then outstanding having a preference as to the
payment of dividends shall have been declared and paid or the
Corporation shall have reserved or provided for the payment thereof.
(b) Voting. Each holder of Common Stock shall be entitled to one
vote for each share held on all matters submitted to a vote of
stockholders of the Corporation.
(c) Liquidation. In the event of any voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the
Corporation (as used in this Article IV, "liquidation"), after payment
or provision for the payment of the
2
debts and other liabilities of the Corporation and any preferential
amounts to which the holders of Preferred Stock or of any other stock
then outstanding ranking prior to the Common Stock in the distribution
of assets shall be entitled upon liquidation, the holders of the Common
Stock and the holders of any other stock then outstanding ranking on a
parity with the Common Stock in the distribution of assets upon
liquidation shall be entitled to share proportionately in the
distribution of the remaining net assets of the Corporation.
As used in this Article IV, neither the merger nor consolidation of the
Corporation into or with any other corporation, nor the merger or consolidation
of any other corporation into or with the Corporation, nor any sale, transfer,
lease or other exchange of all or any part of the assets of the Corporation,
shall be deemed to be a liquidation of the Corporation.
Section 4.2. Preferred Stock Provisions. The following provisions apply
to all shares of Preferred Stock of the Corporation.
(a) Authority of the Board of Directors to Issue in Series. The
Preferred Stock may be divided into and issued and reissued from time
to time in one or more series. Subject to the provisions of this
Certificate of Incorporation and of the Law, the Board of Directors is
hereby granted and vested with authority from time to time by the
adoption of a resolution or resolutions to authorize, establish and
designate one or more series of Preferred Stock, and to fix and
determine the voting rights, designations, preferences and the
relative, participating, optional and other special rights and
qualifications, limitations and restrictions of the shares of any
series so established to the full extent now or hereafter permitted by
the Law, including but not limited to the following:
(i) The number of shares of such series, which may subsequently
be increased (except as otherwise provided by the resolution or
resolutions of the Board of Directors providing for the issue of
such series) or decreased (to a number not less than the number of
shares then outstanding) by resolution or resolutions of the Board
of Directors, and the distinctive designation thereof;
(ii) The rate or amount of dividends and dividend rights, if any,
of such series, the preferences, if any, over any other class or
series of stock, or of any other class or series of stock over such
series, as to dividends, the extent, if any, to which shares of such
series shall be entitled to participate in dividends on a parity
with shares of any other series or class of stock, whether dividends
on shares of such series shall be fully, partially or conditionally
cumulative, or a combination thereof, and any limitations,
restrictions or conditions on the payment of such dividends;
(iii) The rate or amount and rights, if any, of such series, and
the preferences, if any, over any other class or series of stock, or
of any other class or series of stock over such series, in the event
of any
3
liquidation and the extent, if any, to which shares of any such
series shall be entitled to participate in such event on a parity
with shares of any other series or class of stock;
(iv) The time or times during which, the price or prices and rate
or rates at which, and the terms and conditions, including any
adjustments, on which, the shares of such series may be redeemed;
(v) The terms of any purchase, retirement or sinking fund which
may be provided for the shares of such series;
(vi) The price or prices or the rate or rates and the
adjustments, if any, upon which the shares of such class or series
shall be convertible into or exchangeable for, at the option of
either the holder or the Corporation or upon the happening of a
specified event, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the
Corporation;
(vii) The voting powers, if any, of such series in addition to
the voting powers provided by the Law.
(b) Limitation on Dividends. No holders of shares of any series of
the Preferred Stock shall be entitled to receive any dividends thereon
other than those specifically provided for by the Certificate of
Incorporation or the resolution or resolutions of the Board of
Directors providing for the issue of such series of Preferred Stock,
nor shall any accumulated dividends on the Preferred Stock bear any
interest.
(c) Limitation on Liquidation Distributions. In the event of any
liquidation the holders of shares of each series of the then
outstanding Preferred Stock shall be entitled to receive only such
amount as shall have been fixed for such purpose by the Certificate of
Incorporation or in the resolution or resolutions of the Board of
Directors establishing the respective series of each class of Preferred
Stock, together with a sum equal to the amount of all accumulated and
unpaid dividends thereon at the dividend amount or rate fixed therefor
in such resolution or resolutions.
(d) Voting Rights. Each holder of shares of each series of Preferred
Stock shall be entitled to only such voting rights as shall be
established by the Certificate of Incorporation or the resolution or
resolutions of the Board of Directors providing for the issuance of
such series of Preferred Stock.
ARTICLE V
Election of Directors
Election of directors need not be by written ballot unless the By-laws
of the Corporation shall so provide.
4
ARTICLE VI
Amendment of By-laws
The by-laws of the Corporation may from time to time be altered,
amended, or repealed, or new by-laws adopted, by the Board of Directors of the
Corporation subject to the right of stockholders to adopt, alter, amend or
repeal the by-laws as provided by law subject to any limitation contained in the
by-laws of the Corporation.
ARTICLE VII
Nomination of Directors
No person (other than a person nominated or recommended for nomination
by the Board of Directors or any nominating committee thereof or any person to
be elected by the holders of any one or more classes or series of Preferred
Stock of the Corporation or any other classes or series of stock of the
Corporation other than the Common Stock which may be outstanding at some time,
voting separately as a class or classes) shall be eligible for election as a
director at any annual or special meeting of stockholders unless a written
notice regarding such person's nomination, together with the written consent of
such person to serve as a director, is received from a stockholder of record by the Secretary of the Corporation not later than (i) with respect to an election
to be heldundersigned at an annual meeting of stockholders, ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of stockholders, or
(ii) with respect to an election to be held at a special meeting of
stockholders, the close of business on the tenth day following the date on which
notice of such meeting is first given to stockholders. Each such notice shall
set forth (i) the name, age, business address and residence address of each
nominee proposed in such notice, (ii) the principal occupation of employment of
each such nominee, (iii) the number of shares of stock of the Corporation which
are beneficially owned by each such nominee, and (iv) such other information in
respect of such nominee as would be required by the federal securities laws and
the rules and regulations promulgated thereunder in respect of an individual
nominated as a director of the Corporation and for whom proxies are solicited by
the Board of Directors.
The Chairman of any meeting of stockholders may, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so determine, he shall
so declare to the meeting and the defective nomination shall be disregarded.
ARTICLE VIII
Limitation of Director Liability; Indemnification
Section 8.1. Limitation of Director Liability. A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of his or her fiduciary duty as a
director, except for liability (i) for any breach of such director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, as the
same exists or may hereinafter be amended, or (iv) for any transaction from
which the director derived an improper personal benefit. In addition to the
circumstances in which a director of the Corporation is not personally liable as
set forth in
5
the preceding sentence, if the Delaware General Corporation Law is amended after
approval of this Article by the stockholders to authorize corporate action
further eliminating or limiting the liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as so amended. Any
repeal or modification of the foregoing Section 8.1 by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existingApril 2, 2009, at the time of such repealAnnual Meeting and at any adjournment or modification.
Section 8.2. Indemnification of Directors. Officers, Employeespostponement thereof.
Date and Agents.
(a) Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason ofsign the fact that
he or she or a person of whom he or she isproxy card below, mark your elections on the legal representative, is
or was or has agreed to become a director or officer ofreverse side and return the Corporation
or is or was serving or has agreed to serve at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official
capacity as a director or officer or in any other capacity while
serving or having agreed to serve as a director or officer, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists
or may hereafter be amended, (but,proxy card in the casepostage-paid envelope provided.
| DATED: | ||||
| Signature | ||||
| Signature (If Held Jointly) | ||||
| Please sign EXACTLY as your name appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If more than one trustee, all should sign. If shares are held jointly, both owners must sign. |
Blue Dolphin Energy Company Annual Meeting of any such amendment,
only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment) against all expense,
liability and loss (including without limitation, attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such
person in connection therewith and such indemnification shall continue
as to a person who has ceased to serve in the capacity which initially
entitled such person to indemnity hereunder and shall inure to the
benefit of his or her heirs, executors and administrators; provided,
however, that the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. Stockholders (the “Annual Meeting”)
May 14, 2009 at 9:30 a.m. Local Time
Theright to
indemnification conferred in this Section 8.2 shall be a contract right
and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Delaware General
Corporation Law requires, the payment of such expenses incurred by a
current, former or proposed director or officer in his or her capacity
as a director or officer or proposed director or officer (and not in
any other capacity in which service was or is or has been agreed to be
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such indemnified
person, to repay all amounts so advanced if it shall ultimately be
determined that such indemnified person is not entitled to be
indemnified under this Section 8.2 or otherwise.
6
(b) Indemnification of Employees and Agents. The Corporation may, by
action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the
same scope and effect as the indemnification of directors and officers
provided for in this Section.
(c) Right of Claimant to Bring Suit. If a written claim received by
the Corporation from or on behalf of an indemnified party under this
Section 8.2 is not paid in full by the Corporation within ninety days
after such receipt, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and,
if successful in whole or in part, the claimant shall be entitled to be
paid also the expense of prosecuting such claim. It shall be a defense
to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has
been tendered to the Corporation) that the claimant has not met the
standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant
for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its stockholders)
to have made a determination prior to the commencement of such action
that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth
in the Delaware General Corporation Law, nor an actual determination by
the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable
standard of conduct.
(d) Nonexclusivity of Rights. The right to indemnification and the
advancement and payment of expenses conferred in this Article VII shall
not be exclusive of any other right which any person may have or
hereafter acquire under any law (common or statutory)Houston Club (Magnolia Room), provision of the
Certificate of Incorporation of the Corporation, bylaw, agreement, vote
of stockholders or disinterested directors or otherwise.
(e) Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as a
director, officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or loss,
whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the Delaware
General Corporation Law.
7
(f) Savings Clause. If this Section 8.2 or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction,
then the Corporation shall nevertheless indemnify and hold harmless
each director and officer of the Corporation, as to costs, charges and
expenses (including attorneys' fees), judgments, fines, and amounts
paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative to the full
extent permitted by any applicable portion of this Section 8.2 that
shall not have been invalidated and to the fullest extent permitted by
applicable law.
(g) Definitions. For purposes of this Section, reference to the
"Corporation" shall include, in addition to the Corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger prior to (or, in the case of an
entity specifically designated in a resolution of the Board of
Directors, after) the adoption hereof and which, if its separate
existence had continued, would have had the power and authority to
indemnify its directors, officers and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of
this Section with respect to the resulting or surviving corporation as
he would have with respect to such constituent corporation if its
separate existence had continued.
8
IN WITNESS WHEREOF, this Amended and Restated Certificate of
Incorporation has been executed by the President and the Secretary of the
Corporation on this ____ day of __________, 2004.
------------------------------------
Michael J. Jacobson, President
------------------------------------
G. Brian Lloyd, Secretary
9
BLUE DOLPHIN ENERGY COMPANY
SPECIAL MEETING OF STOCKHOLDERS ___________ ______, 2004811 Rusk Street, Houston, Texas 77002
May 14, 2009 at 9:30 a.m. Local Time
The
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE PROPOSALS. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Special Meeting of Stockholders to be held on _____________
______, 2004DIRECTORS.
Mark Votes in Blue or Black Ink Only · This Proxy Card is Valid Only When Signed and the Proxy Statement, and appoints Michael J. Jacobson and G.
Brian Lloyd, and each of them, the proxy of the undersigned, with full power of
substitution to vote all shares of common stock of Blue Dolphin Energy Company
(the "Company") that the undersigned is entitled to vote, either on his or her
own behalf or on behalf of any entity or entities, at the Special Meeting of
Stockholders of the Company to be held at the Company's principal executive
offices at 801 Travis, Suite 2100 Houston, Texas 77002 on _________ ________,
2004 at 10:00 a.m. local time, and at any adjournment or postponement thereof,
with the same force and effect as the undersigned might or could do if
personally present thereat. The shares represented by this proxy shall be voted
in the manner set forthDated on the reverse side.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
To withhold authority toReverse Side
The Board of Directors recommends a vote for fewer than all of nominees, mark "For All
Except" and writeFOR the nominee's name in the list below.
Nominees
Laurence N. Benz F. Gardner Parker
Michael S. Chadwick Ivar Siem
Harris A. Kaffie James M. Trimble
following proposals:
| 1. | ELECTION OF DIRECTORS. | Withhold | ||||
| For | Authority | |||||
| (01) Laurence N. Benz | o | o | ||||
| (02) John N. Goodpasture | o | o | ||||
| (03) Harris A. Kaffie | o | o | ||||
| (04) Erik Ostbye | o | o | ||||
| (05) Ivar Siem | o | o |
| 3. | IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. |
IF YOU RETURN YOUR PROPERLY EXECUTED PROXY,PLAN TO ATTEND THE PROXIES WILL VOTE YOUR SHARES AS
YOU DIRECT. IF YOU DO NOT SPECIFY ON YOUR PROXY HOW YOU WANT TO VOTE YOUR
SHARES, THE PROXIES WILL VOTE THEM "FOR" PROPOSAL 1, 2, 3 AND 5, AND FOR ALL FOR
PROPOSAL 4, AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE
MEETING,OR ANY ADJOURNMENT THEREOF.
Please sign EXACTLY as your name appears
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such. If more than
one trustee, all should sign. If shares are
held jointly, both owners must sign.
------------------------------------ -------------
Signature Date
------------------------------------ --------------
Signature (Joint Owners) Date
2
PLEASE CHECK HERE:o
MEETING,
| 2. | INCREASE IN NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE FROM 25,000,000 SHARES TO 100,000,000 SHARES. o For o Against o Abstain |