UNITED STATES
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 |
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Filed by a Party other than the Registrant | ☐ |
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material pursuant to |
BLUE DOLPHIN ENERGY COMPANY |
(Name of Registrant as specified in its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required |
☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount previously paid: _________________________________________ |
| (2) | Form, Schedule or Registration Statement No.: |
| (3) | Filing Party: ___________________________________________________ |
| (4) | Date Filed: |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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To Our Stockholders:
Notice is hereby given that an Annual Meeting of Stockholders (the “Annual Meeting”) of Blue Dolphin Energy Company, a Delaware corporation (referred to herein as “Blue Dolphin,” “we,” “us” and “our”), will be held on Wednesday, June 22, 202221, 2023 at 10:00 a.m. Central Time at Blue Dolphin’s principal office located at 801 Travis Street, 21st Floor, Houston, Texas 77002. At the Annual Meeting, stockholders will consider proposals to:
| (1) | elect five (5) directors, all of whom shall serve until the next annual meeting of stockholders, or in each case until their successors are duly elected and qualified, or until their earlier resignation or removal; |
| (2) | approve, on an advisory basis, a non-binding vote on executive compensation (“Say on Pay”); |
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| ratify the selection of UHY LLP (“UHY”) as our independent registered public accounting firm for the fiscal year ending December 31, |
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| transact any other business that may properly come before the Annual Meeting. |
Additional information regarding the Annual Meeting is set forth in the accompanying proxy statement. Our Board of Directors (the “Board”) has specified the close of business on April 25, 202226, 2023 as the record date (“Record Date”) for the purpose of determining the stockholders who are entitled to receive notice of, and to vote at, the Annual Meeting. Only stockholders of record at the close of business on the Record Date are entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof.
Regardless of whether you plan to attend the Annual Meeting in person, we request that you vote your shares of Blue Dolphin common stock at your earliest convenience in order to ensure that your shares of Blue Dolphin common stock will be represented at the Annual Meeting. Depending on how you hold your shares of Blue Dolphin common stock, options to cast your ballot include the Internet, telephone, fax, or mail. If you have Internet access, we recommend that you record your vote via the Internet.
AVAILABILITY OF PROXY MATERIALS – IMPORTANT NOTICE |
Proxy materials are available online https://iproxydirect.com/BDCO
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Registered stockholders may vote during the Annual Meeting, if they have registered in advance to participate, by casting a ballot through the Internet or by phone. Beneficial stockholders that desire to cast a ballot during the Annual Meeting must obtain and use the legal proxy form provided by their brokerage firm, bank, trust, or other nominee, which contains a control number. The inspector of election at the Annual Meeting has access to the registered stockholder’s list to verify whether a registered stockholder is entitled to vote as of the Record Date. However, the inspector of election does not have access to the control number verification system that brokerage firms, banks, trusts, and other nominees use to verify whether a beneficial stockholder is entitled to vote at the Annual Meeting. See “Frequently Asked Questions – 7. How do I vote if I am a beneficial stockholder?” for more information on voting shares held through a brokerage firm, bank, trust, or other nominee. |
| By Order of the Board |
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/s/ JONATHAN P. CARROLL |
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Jonathan P. Carroll |
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Chairman of the Board |
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Houston, Texas |
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BLUE DOLPHIN ENERGY COMPANY
April 28, 2022
May 5, 2023
Fellow Stockholders:Shareholders:
DuringAgainst a yearbackdrop of continued global healthserious economic and economicgeopolitical challenges, we continued to make progress towards improving our overall businessachieved phenomenal success in 2022. While disconcerting, events like the war in Ukraine and identifying ways to improve shareholder valueglobal hyperinflation demonstrate the vital role that energy plays in an evolving sustainable environment.the world economy.
Business RecoveryRecord-Setting Financial Performance
AsI am immensely proud to report that we achieved record-setting financial performance last year. For the global economy began to rebound with the availabilitytwelve months ended December 31, 2022, Blue Dolphin reported gross profit of COVID-19 vaccines, we effectively managed our business operations to navigate market fluctuations. We concentrated on protecting our personnel by providing timely information$46.1 million and promoting vaccines as they became available, which allowed the Nixon facility to continue to operate. We also focused on optimizing receivables and payables by prioritizing payments, optimizing inventory levels based on demand, and controlling discretionary spending. These austerity measures, combined with maintenance and repair activities, gave rise to improved refinery throughput, production, and sales during 2021.
During 2021 we made considerable progress in bolstering liquidity through additional financing. We successfully secured $10.5net income of $32.9 million, or $2.34 per share. This represented an increase of $45.2 million in working capital through the Small Business Administration’s (SBA’s) Economic Injury Disaster Loangross profit and the U.S. Department of Agriculture’s CARES Act loan programs. In February 2022, we also secured an additional $1.5$45.7 million in working capital through modification of one ofnet income, or $3.35 per share, compared to the earlier SBA loans. We will continue to actively explore additional financing to meet working capital needssame period in 2021. Increased profitability was primarily driven by favorable refining margins and refinance and restructure debt.increased product demand during the post-pandemic recovery.
Renewable EnergyRecognized Stock Performance
WithBlue Dolphin was named to the 2023 OTCQX® Best 50, a world that is rapidly embracing sustainability, we must keep pace. In March 2021, we announced plans to leverage our existing infrastructure to establish adjacent linesranking of business, capture growing market opportunities, and capitalizetop performing companies traded on the OTCQX Best Market in 2022. The annual ranking is calculated based on an equal weighting of one-year total return and average daily dollar volume growth in the previous calendar year. Blue Dolphin ranked fourth among eligible companies. For the complete 2023 OTCQX Best 50 ranking information, please visit https://www.otcmarkets.com/stock/OTCM/news/OTC-Markets-Group-Announces-the-2023-OTCQX-Best-50?id=386707.
Blue Dolphin’s strong 2022 performance and results put us in a considerably more favorable financial position. Over the coming year, we plan to further strengthen our capital structure through the refinancing of renewable energy. During 2021, we explored several potential commercial partnershipscertain of our debt. We will also continue to focus on safely executing operational excellence initiatives and projects as vehicles to expand our corporate strategy intogaining traction in the renewable fuels space and we will continue these efforts throughout 2022.other profitable opportunities.
Our progresssuccess in a tough economic climate2022 would not have been possible without the dedication and determination of our people. Their immense dedication enables us to deliver on our commitment to excellence, and I am extremely grateful for theirthese efforts. I am also thankful to you,appreciate all of our shareholders for continuing to place yourtheir continued trust in us.
and support.
Jonathan P. Carroll Chairman of the Board, Chief Executive Officer and President |
801 Travis Street, Suite 2100, Houston, Texas 77002
Phone (713) 568-4725 · Fax (713) 227-7626 · www.blue-dolphin-energy.com
PROXY STATEMENT BLUE DOLPHIN ENERGY COMPANY
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND |
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CAUTIONARY NOTICE REGARDING FORWARD-LOOKING |
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DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN | 25 |
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This proxy statement and accompanying notice and proxy form are being furnished to the stockholders of Blue Dolphin Energy Company (referred to herein as “Blue Dolphin,” “we,” “us” and “our”) in connection with the solicitation of proxies by Blue Dolphin’s Board of Directors (the “Board”) for use at the Annual Meeting of Stockholders (the “Annual Meeting”) and any adjournment or postponement thereof.
The Annual Meeting will be held on Wednesday, June 22, 202221, 2023 at 10:00 a.m. Central Time at Blue Dolphin’s principal office, which is located at 801 Travis Street, 21st Floor, Houston, Texas 77002.
At the Annual Meeting, stockholders are being asked to consider and vote upon proposals to:
| (1) | elect five (5) directors, all of whom shall serve until the next annual meeting of stockholders, or in each case until their successors are duly elected and qualified, or until their earlier resignation or removal; |
| (2) | approve, on an advisory basis, a non-binding vote on executive compensation (“Say on Pay”); |
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| ratify the selection of UHY LLP (“UHY”) as our independent registered public accounting firm for the fiscal year ending December 31, |
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| transact any other business that may properly come before the Annual Meeting. |
Record Date; Who Is Entitled to Vote
The Board has fixed the close of business on April 25, 202226, 2023 as the record date (the “Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. A list of registered stockholders entitled to vote at the Annual Meeting will be open for examination by any stockholder during normal business hours for a period of ten (10) days prior to the Annual Meeting at our principal office, which is located at 801 Travis Street, 21st Floor, Houston, Texas 77002. On the Record Date, there were 12,693,51414,921,968 shares of our common stock, par value $0.01 per share (the “Common Stock”), issued and outstanding. Stockholders are entitled to one (1) vote per share of Common Stock held on the Record Date on each matter presented at the Annual Meeting.
This proxy statement, along with its accompanying notice and proxy form, are first being mailed to stockholders on or about May 9, 2022.2023. Our Form 10-K for the fiscal year ended December 31, 20212022 (the “Annual Report”), which has been incorporated by reference, is being mailed with this proxy statement.
The holders of a majority of theshares of Common Stock entitled to vote at the Annual Meeting and represented in person or by proxy shall constitute a quorum at the Annual Meeting for the transaction of business.
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Abstentions and Broker Non-Votes
Abstentions – If a stockholder abstains from voting on a proposal, the shares are considered present and entitled to vote at the Annual Meeting. Therefore, abstentions will count toward determining whether or not a quorum is present. Under Delaware law, a proxy marked “abstain” is not considered a vote cast. Accordingly, an abstention will have no effect on the proposal regarding the election of directors, as the nominees are elected by a plurality of the votes cast. Abstentions on proposals that require the affirmative vote of a majority of the shares entitled to vote and represented at the Annual Meeting, in person or by proxy, will, in effect, be a vote against such matter.
Broker Non-Votes – Broker non-votes occur when brokers, banks, or other nominees that hold shares on behalf of beneficial (“street name”) stockholders do not receive voting instructions from the beneficial stockholders prior to the Annual Meeting and do not have discretionary voting authority to vote those shares. Broker non-votes are considered present and entitled to vote at the Annual Meeting. Therefore, broker non-votes will count toward determining whether or not a quorum is present. However, brokers are prohibited from voting shares of Common Stock for which they have not received instructions on non-routine matters, including the election of directors.
With the exception of the election of directors, our By-Laws, as amended and restated (the “By-Laws”), require an affirmative vote of a majority of the votes cast by the stockholders present, either in person or by proxy, and entitled to vote at the Annual Meeting for the proposal to be approved. The votes required for approval, and the impact of abstentions and broker non-votes for each proposal stockholders are being asked to consider and vote upon are as follows:
Proposal (1) — Election of Directors: You may vote “FOR” any one, or all, of the nominees, or withhold your vote for any one or more of the nominees. As the nominees are elected by a plurality of the votes cast, withheld votes and abstentions will not affect the outcome of this proposal. This proposal is considered a non-routine matter and brokers will not have discretionary authority to vote shares for which they have not received instructions;
Proposal (2) – Advisory Say on Pay Vote: You may vote “FOR” or “AGAINST” or abstain from voting. The affirmative vote of the holders of a majority of the shares of Common Stock entitled to vote and represented at the Annual Meeting, in person or by proxy, is required to approve the advisory proposal concerning the compensation of our named executive officers. This proposal is considered a non-routine matter and brokers will not have discretionary authority to vote shares for which they have not received instructions; and
Proposal (2)(3) – Ratification of Independent Registered Public Accounting Firm: You may vote “FOR” or “AGAINST” or abstain from voting. The affirmative vote of the holders of a majority of the shares of Common Stock entitled to vote and represented at the Annual Meeting, in person or by proxy, is required to approve the ratification of UHY as our independent registered public accountants for the fiscal year ending December 31, 2022.2023. Under applicable SECSecurities and Exchange Commission (“SEC”) rules, this proposal is considered a routine matter and brokers will have the discretionary authority to vote shares of Common Stock for which they have not received instructions.
All shares of Common Stock represented at the Annual 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 voted “FOR” Proposal Nos. (1), (2), and (2)(3).
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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 pursuant to the following actions:
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| providing written or electronic notice of revocation; |
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| submitting a proxy of a later date; or |
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| voting in person. |
A written notice of revocation should be sent by email to investor.relations@blue-dolphin.com.investor.relations@blue-dolphin.com. Depending on how you hold your shares, you can submit a proxy of a later date via the Internet, by telephone, by fax, or by mail.
To assist you with casting your vote, we have attempted to answer key questions you may have as a stockholder related to the proposals you are being asked to consider. Please review the frequently asked questions (FAQs) section, which is included as part of this proxy statement. If you have any additional questions, please contact Investor Relations at investor.relations@blue-dolphin.com.investor.relations@blue-dolphin.com.
Reimbursement of Solicitation Expenses
Blue Dolphin will bear all costs of this solicitation. Proxies will be solicited primarily by mail but may also be solicited by telephone or other electronic means by directors, officers, and employees of Blue Dolphin in the ordinary course of business, for which they will not receive additional compensation. Blue Dolphin has requested that brokers, nominees, fiduciaries, and other custodians send proxy materials to the beneficial owners of Common Stock, for which Blue Dolphin will reimburse them for their reasonable out-of-pocket expenses.
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FREQUENTLY ASKED QUESTIONS (“FAQs”)
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The FAQs presented in this section are to assist you in understanding the proposals you are being asked to vote upon for the Annual Meeting. The items addressed may not answer all questions that may be important to you as a stockholder. For additional information, please refer to the more detailed discussion contained elsewhere in this proxy statement or contact Blue Dolphin, Investor Relations at (713) 568-4725.
Procedural Matters
1. | Why am I receiving this proxy statement? |
You are receiving this proxy statement because you hold shares of Blue Dolphin Common Stock as of the Record Date for the Annual Meeting. | |
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2. | What does it mean if I receive more than one proxy? |
If you receive more than one proxy form, it means that you hold shares of Common Stock in more than one account. For example, you may own your shares of Common Stock individually, jointly with your spouse, as trustee of a trust, or as custodian for a minor. To ensure that all of your shares of Common Stock are voted, you will need to sign and return each proxy form received because they are held in a different form of ownership. | |
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3. | Who is entitled to attend and vote at the Annual Meeting? |
If you owned shares of Common Stock as of the close of business on April | |
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4. | When and where will the Annual Meeting be held? |
The Annual Meeting will be held on Wednesday, June | |
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5. | What do I need to do now? |
| After carefully reading and considering the information contained in this proxy statement, please vote your shares of Common Stock as described below. You are entitled to one (1) vote for each share of Common Stock you own as of the Record Date. |
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6. | How do I vote if I am a registered stockholder? |
If your shares of Common Stock are registered directly in your name with our transfer agent, Securities Transfer Corporation, you are considered, with respect to those shares, the stockholder of record or a “registered stockholder.” Registered stockholders may vote as follows: (i) by mail by completing, signing and dating each proxy form received and returning it in the enclosed prepaid envelope, (ii) by fax by completing, signing and dating each proxy form received and faxing to (202) 521-3464, (iii) via the Internet at https://www.iproxydirect.com/BDCO by following the instructions, or (iv) by participating in the Annual Meeting in person. If voting by mail, fax, or the Internet, your voting instructions must be received by the “voting closed” determination that will be made live during the Annual Meeting. Voting by mail, fax, or the Internet will not prevent you from participating in the Annual Meeting in person. You are encouraged to submit a proxy by mail, fax, or the Internet even if you plan to participate in the Annual Meeting in person to ensure that your shares of Common Stock are present in person or represented by proxy. |
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7. | How do I vote if I am a beneficial stockholder? |
| If your shares of Common Stock are held by a brokerage firm, bank, trust, or other nominee, you are considered the “beneficial stockholder” of the shares of Common Stock. The Common Stock is being held in “street name” and your broker, bank, or other nominee is considered to be the holder of these shares. This means that, as a beneficial stockholder, you cannot vote your shares of Common Stock directly. You have the right to direct / instruct the brokerage firm, bank, trust, or other nominee on how to vote your shares of Common Stock. You also have the right to participate in the Annual Meeting in person. Your broker, bank, trustee, or nominee is obligated to provide you with a voting instruction form for voting purposes. |
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Under SEC Rules, brokers are not permitted to vote on your behalf for non-routine matters. They may vote on your behalf for routine matters. Therefore, it is important that you promptly follow the directions provided by your brokerage firm, bank, trust, or other nominee regarding how to instruct them to vote your shares of Common Stock. | |
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Non-Routine Matters: | |
Proposal (1), election of directors | |
Proposal (2), Say on Pay
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Routine Matters: | |
Proposal | |
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If you wish to vote in person, you must obtain a legal proxy form from the brokerage firm, bank, trust, or other nominee and present it to the inspector of election with your ballot. If you hold some shares of Common Stock as a registered stockholder and some shares of Common Stock as a beneficial stockholder, the shares of Common Stock cannot be combined for voting purposes because the shares of Common Stock held beneficially list the brokerage firm, bank, trust, or other nominee as the stockholder of record. | |
8. | What if I fail to instruct my brokerage firm, bank, trust, or other nominee how to vote? |
Because your brokerage firm, bank, trust, or other nominee does not have discretionary authority to vote on non-routine matters, failure to provide your broker or other nominee with voting instructions on how to vote your shares of Common Stock will result in a broker non-vote for | |
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9. | What are the proposals that will be voted on at the Annual Meeting? |
You are being asked to consider and vote upon proposals to: (1) elect five directors, (2) approve, on an advisory basis, a non-binding vote on Say on Pay, (3) ratify the selection of UHY as our independent registered public accounting firm for the fiscal year ending December 31, | |
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10. | How does Blue Dolphin’s Board recommend that I vote on the proposals? |
The Board has determined that each of the proposals presented in the proxy statement are in the best interests of you | |
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11. | How many votes are required to approve an adjournment or postponement of the Annual Meeting to a later time, if necessary or appropriate, to obtain a quorum or solicit additional proxies in favor of the proposals? |
If a quorum is not met, the Board may submit a proposal to adjourn or postpone the Annual Meeting to a later date or dates until a quorum is met. If a quorum is met but there are insufficient votes to adopt the proposals, our By-Laws require the affirmative vote of a majority of the votes cast in order to adjourn or postpone the Annual Meeting to a later time. Withheld votes, abstentions and broker non-votes will have no effect on this matter. |
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12. | How are votes counted? |
The inspector of election that is appointed for the Annual Meeting will count the votes. Such person will separately count “FOR,” “WITHHELD” and “AGAINST” votes, as well as abstentions and broker non-votes. | |
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13. | What constitutes a quorum for the Annual Meeting? |
The presence, in person or by proxy, of stockholders representing a majority of the shares of Common Stock entitled to vote at the Annual Meeting will constitute a quorum for the Annual Meeting. Shares of Common Stock held by registered stockholders that submit a properly executed proxy form will be counted as part of the quorum. Shares of Common Stock held by beneficial stockholders that either provide their brokerage firm, bank, trust, or other nominee with voting instructions or obtain a legal proxy form for voting in person at the Annual Meeting will be counted as part of the quorum. | |
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14. | Am I entitled to appraisal rights? |
Under Delaware law, stockholders are not entitled to appraisal rights with respect to any of the proposals presented at the Annual Meeting. | |
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15. | What happens if I sell my shares of Blue Dolphin Common Stock before the Annual Meeting? |
The | |
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16. | Who can answer further questions? |
For additional questions, please contact Blue Dolphin, Investor Relations at | |
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Say | |
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17. | What is Say on Pay? |
Proxy rules require public companies to provide their shareholders with an advisory vote on the compensation of the most highly compensated executives. Say on Pay votes must be held at least once every three years. | |
18. | Is Say on Pay binding on Blue Dolphin and the Board? |
Say on Pay votes are advisory rather than binding. It is up to the Board to determine what it considers to be the best compensation policies and practices for Blue Dolphin. Unlike a binding vote, advisory votes do not require Blue Dolphin or the Board to take a specific action. | |
Selection of UHY as Independent Registered Public Accounting Firm | |
19. | How long has UHY been our independent registered public accounting firm? |
| UHY has been engaged as our independent registered public accounting firm since 2002. Although ratification of UHY as our independent registered public accounting firm by our stockholders is not required by our By-Laws, the Board believes that submitting this matter to a vote reflects good corporate practice. |
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| What happens if UHY’s selection is not ratified? |
In the event of a negative vote on such ratification, the Audit Committee of the Board (the “Audit Committee”) will consider whether it is appropriate to select another independent registered public accounting firm. Even if this appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in our best interest and that of our stockholders. |
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Director Nominees
The Board has affirmatively determined that each of Ryan A. Bailey, Amitav Misra, and Christopher T. Morris, each an outside director, is considered an “Independent Director” as such term is defined by OTCQX and SEC rules. Jonathan P. Carroll, our Chief Executive Officer and President, and Herbert N. Whitney, are not independent directors.directors; Mr. Whitney serves as a consultant. The independent members of the Board nominated Messrs. Bailey, Misra, Morris, Carroll, and Whitney to serve as directors until the next annual meeting of stockholders. See “Corporate Governance and Board Matters – Nominating Procedures” for more information. Each director that was nominated (each a “Director Nominee”) shall serve as a director until the next annual meeting of stockholders, or in each case until their successors have been duly elected and qualified, or until they resign or are removed.
Each Director Nominee has consented to being nominated and has expressed a willingness to serve if elected. The Board has no reason to believe that any of the Director Nominees will be unable or unwilling to serve if elected. However, should any Director Nominee become unable or unwilling to serve as a director at the time of the Annual Meeting, the person or persons exercising the proxies will vote for the election of a substitute Director Nominee designated by the Board.
This table reflects, as of the Record Date: (i) each Director Nominee’s name, age, principal occupation, and directorships during the past five (5) years and (ii) their relevant knowledge and experience that led to their nomination to the Board:
Name, Age Principal Occupation and Directorships During Past 5 Years |
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Jonathan P. Carroll,
Blue Dolphin Energy Company Chairman of the Board (since 2014) Chief Executive Officer, President, Assistant Treasurer and Secretary (since 2012)
Lazarus Energy Holdings, LLC (“LEH”) Manager (since 2006) and Majority Owner Together, LEH and Jonathan Carroll
Mr. Carroll has served on Blue Dolphin’s Board since 2014. He is currently Chairman of the Board.
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Mr. Carroll earned a Bachelor of Arts degree in Human Biology and a Bachelor of Arts degree in Economics from Stanford University, and he completed a Directed Reading in Economics at Oxford University. Based on his educational and professional experiences, Mr. Carroll possesses particular knowledge and experience in business management, finance, and business development that strengthen the Board’s collective qualifications, skills, and experience. |
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Name, Age Principal Occupation and Directorships During Past 5 Years |
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Ryan A. Bailey, Paradigm Institutional Investments Chief Investment Officer and Managing Partner (April 2023 to Present) Investment Office Resources Co-Chief Investment Officer and Partner (June 2022 to March 2023)
Carbonado Partners Strategic Advisor (June 2022 to Present) Managing Partner (
Pacenote Capital Managing Partner (2019 to 2020) and Co-founder
Children’s Health System of Texas Head of Investments (2014 to 2019)
Mr. Bailey was appointed to Blue Dolphin’s Board in November 2015. He is currently a member of the Audit and Compensation Committees. He also serves as an advisor and mentor to Texas Wall Street Women, a non-profit member organization; serves as Chairman of the Texas Alternative Investment Association; |
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Mr. Bailey earned a Bachelor of Arts in Economics from Yale University and completed a graduate course in tax planning from the Yale School of Management. He holds professional credentialing as a Chartered Financial Analyst (CFA), Financial Risk Manager (FRM), Chartered Alternative Investment Analyst (CAIA) and Chartered Market Technician (CMT). Based on his educational and professional experiences, Mr. Bailey possesses particular knowledge and experience in finance, financial analysis and modeling, investment management, risk assessment, and strategic planning that strengthen the Board’s collective qualifications, skills, and experience. |
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Amitav Misra,
HighRadius Corporation Vice President of Experiential Marketing and Partnerships (since December 2022) Vice President of Global Marketing, Mid-Market (July 2022 to December 2022) Vice President of Treasury Line of Business (December 2020 to July 2022) Vice President of Treasury Marketing
Arundo Analytics, Inc. General Manager Americas (2018 to 2020) Vice President of Marketing (2017 to 2020)
Mr. Misra has served on Blue Dolphin’s Board since 2014. He is currently a member of the Audit and Compensation Committees. Mr. Misra serves as an advisor to several energy, technology, and private investment companies. He is also a director of the Houston Center for Literacy, a non-profit organization. |
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Mr. Misra earned a Bachelor of Arts in Economics from Stanford University and holds FINRA Series 79 and Series 63 licenses. Mr. Misra possesses particular knowledge and experience in economics, business development, private equity, and strategic planning that strengthen the Board’s collective qualifications, skills, and experience. |
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Christopher T. Morris, Mpact Partners LLC President (2011 to Present)
Bonaventure Realty Group Executive Vice President (2020 to
Impact Partners LLC President (2017 to 2020)
Mr. Morris has served on Blue Dolphin’s Board since 2012; he is currently Chairman of the Audit and Compensation Committees. |
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Mr. Morris earned a Bachelor of Arts in Economics from Stanford University and a Masters in Business Administration from |
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Name, Age Principal Occupation and Directorships During Past 5 Years |
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Herbert N. Whitney,
Wildcat Consulting, LLC President (since 2006) and Founder
Mr. Whitney has served on Blue Dolphin’s Board since 2012. He previously served on the Board of Directors of Blackwater Midstream Corporation, the Advisory Board of Sheetz, Inc., as Chairman of the Board of Directors of Colonial Pipeline Company, and as Chairman of the Executive Committee of the Association of Oil Pipelines. |
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Mr. Whitney has more than 40 years of experience in pipeline operations, crude oil supply, product supply, distribution, and trading, as well as marine operations and logistics having served as the President of CITGO Pipeline Company and in various general manager positions at CITGO Petroleum Corporation. He earned his Bachelor of Science in Civil Engineering from Kansas State University. Based on his educational and professional experiences, he possesses extensive knowledge in the supply and distribution of crude oil and petroleum products, which strengthens the Board’s collective qualifications, skills, and expertise. |
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Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE ELECTION OF ALL OF THE DIRECTOR NOMINEES.
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For additional information related to this matter, refer to Numbers 17 and 18 of the FAQs provided as part of this proxy statement.
As required pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we seek a non-binding advisory vote from our stockholders to approve the compensation of our executives as described under “Compensation Discussion and Analysis” in this proxy statement. Say on Pay gives our stockholders the opportunity to express their views on our executive compensation. Because your vote is advisory, it will not be binding on the Board or the Compensation Committee. However, the Compensation Committee will consider the outcome of the vote when making future executive compensation decisions. Accordingly, we ask our stockholders to vote on the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders of Blue Dolphin Energy Company approve, on an advisory basis, the compensation of the named executive officers as disclosed in our proxy statement for the 2023 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, the compensation table, and any related material disclosed therein.”
The Say on Pay vote is non-binding on the Board and the Compensation Committee. However, the Board values the opinions of our stockholders as expressed through their votes and other communications with us, and the Board and the Compensation Committee will consider the outcome of the Say on Pay vote when making future executive compensation decisions.
Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE “FOR” SAY ON PAY.
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(3) RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
For additional information related to this matter, refer to Numbers 19 and 20 of the FAQs provided as part of this proxy statement.
For purposes of determining whether to select UHY as our independent registered public accounting firm to perform the audit of our consolidated financial statements for the fiscal year ending December 31, 2022,2023, the Audit Committee conducted a thorough review of UHY’s performance. The Audit Committee considered:
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| UHY’s performance on previous audits, including the quality of the engagement team and the firm’s experience, client service, responsiveness and technical expertise; |
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| the firm’s leadership, management structure and client and employee retention; |
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| the firm’s financial strength and performance; and |
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| the appropriateness of fees charged. |
UHY has acted as our principal independent registered public accounting firm since 2002. We are asking our stockholders to ratify the selection of UHY as our independent registered public accounting firm for the fiscal year ended December 31, 2022.2023. Although ratification is not required by our By-Laws or otherwise, the Board is submitting the selection of UHY to our stockholders for ratification as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of Blue Dolphin and our stockholders.
A representative of UHY is expected to be available during the Annual Meeting, with the opportunity to make a statement if he or she decides to do so, and will respond to appropriate questions.
This table shows fees paid to UHY during the periods indicated:
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| December 31, |
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| December 31, |
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| 2021 |
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| 2020 |
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| 2022 |
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| 2021 |
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Audit fees |
| $ | 175,000 |
| $ | 167,500 |
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| $ | 232,500 |
| $ | 175,000 |
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Audit-related fees |
| - |
| - |
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| - |
| - |
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Tax fees |
| - |
| - |
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| - |
| - |
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| $ | 175,000 |
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| $ | 167,500 |
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| $ | 232,500 |
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| $ | 175,000 |
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Amounts billed but unpaid during 2022 and 2021 totaled $55,000 and 2020 totaled $107,500, and $100,000, respectively. Audit fees for 20212022 and 20202021 related to the audit of our consolidated financial statements and the review of our quarterly reports that are filed with the SEC. The Audit Committee must pre-approve all audit and non-audit services provided to us by our independent registered public accounting firm.
Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION
OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
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At the date of this proxy statement, the Board was not aware of any matter to be acted upon at the Annual Meeting other than those matters set forth in Proposal Nos. (1), (2), and (2)(3) as described herein. If other business comes before the Annual Meeting, the persons named on the proxy will vote the proxy in accordance with their best judgment.
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This table shows, as of the Record Date, the name and age of each executive officer, as well as their principal occupation during the past five (5) years:
Name |
| Position |
| Since |
| Age |
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Jonathan P. Carroll |
| Chief Executive Officer, President, Assistant Treasurer, and Secretary (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) |
| 2012 |
| 60 |
Name Position Since Age Jonathan P. Carroll Chief Executive Officer, President, Assistant Treasurer, and Secretary (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) 2012 61 Jonathan P. Carroll was appointed Chairman of the Board of Blue Dolphin in 2014, and he was appointed Chief Executive Officer, President, Assistant Treasurer and Secretary of Blue Dolphin in 2012. He has also served as Manager of LEH since 2006 and is its majority owner. Together, LEH and Jonathan Carroll own approximately 82%
Jonathan P. Carroll was appointed Chairman of the Board of Blue Dolphin in 2014, and he was appointed Chief Executive Officer, President, Assistant Treasurer and Secretary of Blue Dolphin in 2012. He has also served as Manager of LEH since 2006 and is its majority owner. Together, LEH and Jonathan Carroll owned approximately 83% of Blue Dolphin’s Common Stock as of the Record Date. Before founding LEH,
Board
The Board consists of Messrs. Carroll, Bailey, Misra, Morris, and Whitney, with Mr. Carroll serving as Chairman. During
Audit Committee
The Audit Committee consists of Messrs. Morris, Bailey, and Misra, with Mr. Morris serving as Chairman. During
Compensation Committee
The Compensation Committee consists of Messrs. Morris, Bailey, and Misra, with Mr. Morris serving as Chairman. The Compensation Committee only meets by special meeting; the Compensation Committee did not meet during
Nominating Procedures
Given the small size of the Board, the Board adopted a “Board Nomination Procedures” policy in lieu of appointing a standing nominating committee. Using the “Board Nomination Procedures” policy, the Audit Committee, which is comprised of independent directors, uses the policy to perform in a similar function as a standing nominating committee. The policy is used by the independent directors when choosing nominees to stand for election. The Board will consider for possible nomination qualified nominees recommended by stockholders in accordance with Blue Dolphin’s Certificate of Incorporation. As addressed in the “Board Nomination Procedures” policy, the manner in which independent directors evaluate nominees for director as recommended by a stockholder is the same as that for nominees received from other sources. See “Director Nomination and Stockholder Proposals by Stockholders for Annual Meeting of Stockholders” in this proxy statement for more information.
The Board endeavors to nominate qualified directors that will make important contributions to the Board and to Blue Dolphin. The Board generally requires that nominees be persons of sound ethical character, be able to represent all stockholders fairly, have demonstrated professional achievements, have meaningful experience, and have a general appreciation of the major business issues facing Blue Dolphin. There have not been any material changes to the procedures by which shareholders may recommend nominees to the Board Board Diversity Blue Dolphin does not maintain a formal diversity policy for Board membership. However, the Board believes that the directors, considered as a group, should provide a mix of The following table presents our Board diversity statistics as of the Record Date.
Director Attendance at Annual Meeting
Given the small size of the Board, director attendance at our annual meeting of stockholders is encouraged but not required. Generally, Mr. Carroll is the only director that attends the annual meeting of stockholders.
Leadership Structure
Blue Dolphin is led by Mr. Carroll, who has served as Chairman of the Board since 2014 and as our Chief Executive Officer and President since 2012. Having a single company leader
Risk Oversight
Our Board is involved in overseeing Blue Dolphin’s risk management. The two standing Board committees provide appropriate risk oversight. The Audit Committee oversees the accounting and financial reporting processes, as well as compliance, internal control, legal, and risk matters. The Compensation Committee oversees compensation policies, including the approval of compensation for directors and management. We believe that the processes established to report and monitor systems for material risks applicable to us are appropriate and effective.
Code of Ethics and Code of Conduct
In compliance with the Sarbanes-Oxley Act of 2002, the Board adopted a code of ethics policy and a code of conduct policy. The Audit Committee established procedures to enable anyone who has a concern about our conduct, policies, accounting, internal control over financial reporting, and/or auditing matters to communicate that concern directly to the Chairman of the Audit Committee. Our code of ethics and code of conduct policies are available on our website (http://www.blue-dolphin-energy.com). Any amendments or waivers to provisions of our code of ethics or code of conduct will be disclosed on Form 8-K as filed with the SEC and/or posted on our website.
Communicating with Directors
As the Board does not receive a large volume of correspondence from stockholders, at this time, there is no formal process by which stockholders can communicate with the Board. Instead, any stockholder who desires to contact the Board or specific members of the Board may do so by writing to: Blue Dolphin Energy Company, Attention: Secretary for the Board, 801 Travis Street, Suite 2100, Houston, Texas 77002. Currently, all communications addressed in such manner are sent directly to the indicated directors. In the future, if the Board adopts a formal process for determining how communications are to be relayed to directors, that process will be disclosed on Form 8-K as filed with the SEC and/or posted on our website (http://www.blue-dolphin-energy.com).
The duties and responsibilities of the Audit Committee are set forth in a written charter adopted by the Board. The Audit Committee is comprised solely of independent directors who have the requisite financial experience and expertise and meet the requirements of OTCQX rules and SEC Rule 10A-3. The Audit Committee reviews and reassesses its written charter annually and recommends any changes to the Board for approval. In addition, the Audit Committee periodically reviews relevant requirements of the Sarbanes-Oxley Act of 2002, as well as proposed and adopted rules of the SEC regarding Audit Committee procedures and responsibilities to ensure compliance. The Audit Committee charter is available on our website (http://www.blue-dolphin-energy.com).
The Audit Committee’s primary duties and responsibilities are to:
For the fiscal year ended December 31,
As a smaller reporting company, we are not required to have an audit of our internal control over financial reporting. However, UHY’s audit as of December 31,
Pursuant to Public Company Accounting Oversight Board (“PCAOB”) guidance, UHY:
With regard to determining UHY’s performance and independence for the fiscal year ended December 31,
Performance
Independence
The Audit Committee received the written disclosures and the letter from our independent registered public accounting firm as required by the
The Audit Committee holds a meeting at least quarterly in which management and UHY participate. Following the Audit Committee meeting, independent members of the Board meet separately in an executive session with representatives from UHY. As a result, an avenue of communication between UHY, management, and the Board is accomplished on a regular basis.
Based on discussions with management and UHY, as well as review of UHY’s report to the Audit Committee, the Audit Committee recommended to the Board that our audited consolidated financial statements for the fiscal year ended December 31,
The Audit Committee: Christopher T. Morris, Chairman Ryan A. Bailey Amitav Misra
Executive Compensation Policy and Procedures
LEH operates and manages all Blue Dolphin assets pursuant to
Compensation for Named Executives
Jonathan Carroll is our only executive officer. As noted above under “Executive Compensation Policy and Procedures,” Mr. Carroll’s remuneration is provided by LEH under the Second Amended and Restated Operating Agreement.We do not provide any of his remuneration, but rather pay a management fee to LEH under the Second Amended and Restated Operating Agreement. During the fiscal year ended December 31, 2022, we paid $0.7 million in operating fees to LEH under this agreement. Also, as disclosed under “Related Party Transactions – Affiliate Agreements,” Mr. Carroll receives certain fees under various other affiliate agreements.
Compensation Risk Assessment
LEH’s approach to compensation practices and policies applicable for
Outstanding Equity Awards
None.
Director Compensation Policy and Procedures
Although Jonathan Carroll is a director of Blue Dolphin, his services as Chief Executive Officer are provided under the Second Amended and Restated Operating Agreement (see above under “Executive Compensation Policy and Procedures.”) Therefore, we do not have any directors that are also employed by Blue Dolphin. The Compensation Committee reviews and recommends to the Board for its approval all compensation for
Compensation for Non-Employee Directors
For the first and third quarters, the number of shares of Common Stock
Non-employee, independent directors also
Pay Versus Performance The following disclosure is required by SEC rules but is not reflective of how we or the Compensation Committee determine executive compensation for our sole executive officer, Jonathan Carroll. As noted above under “Executive Compensation Policy and Procedures,” Mr. Carroll’s remuneration is provided by LEH under the Second Amended and Restated Operating Agreement. As a result, there is no applicable information to be provided pursuant to this table.
Compensation Committee Interlocks and Insider Participation
Only one of our directors, Jonathan P. Carroll, also serves as an executive officer. Mr. Carroll does not serve on any of our standing committees.
None of our executive officers serve on the board of directors of another entity whose executive officers serve on our Board. None of our officers or LEH’s personnel, other than Mr. Carroll, participated in the deliberations of our Board or our Compensation Committee concerning executive officer or director compensation.
Family Relationships between Directors and Executive Officers
As of the Record Date, there were no relationships between any of our directors or executive officers and any other director or executive officer of Blue Dolphin.
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Security Ownership of Certain Beneficial Owners
This table shows information with respect to persons or groups known to us to be the beneficial owners of more than five percent (5%) of our Common Stock as of the Record Date. Unless otherwise indicated, each named party has sole voting and dispositive power with respect to such shares.
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