UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
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))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
BLUE DOLPHIN ENERGY COMPANY
801 TRAVIS, SUITE 2100
HOUSTON, TEXAS 77002
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 2002
To the Stockholders of
Blue Dolphin Energy Company:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of Blue Dolphin Energy Company (the "Company") to be held
in Houston, Texas, on May 14, 2002, at 10:00 a.m., Houston time, at the
Company's principal executive offices, 801 Travis, Suite 2100, Houston, Texas,
for the following purposes:
1. To elect four 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; and
2. To transact such other business as may properly come before the Annual
Meeting, and any adjournment or postponement thereof.
Stockholders of record at the close of business on March 27, 2002, are entitled
to notice of, and to vote at, the Annual Meeting and any adjournment or
postponement thereof.
Your vote is important. Since many stockholders are not able to attend
the Annual Meeting, we have enclosed a proxy card for your use. You may vote on
the matters to be acted upon at the Annual Meeting by completing and returning
the proxy card promptly in the enclosed stamped return envelope.
For the Board of Directors
/s/ Michael J. Jacobson
----------------------------------------
MICHAEL J. JACOBSON,
President and Chief Executive Officer
Houston, Texas
April 15, 2002
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL 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 ANNUAL MEETING, YOU MAY
CHANGE YOUR VOTE AT THAT TIME.
BLUE DOLPHIN ENERGY COMPANY
801 TRAVIS, SUITE 2100
HOUSTON, TEXAS 77002
PROXY STATEMENT
---------
ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 2002
---------
This Proxy Statement is being furnished to the stockholders in
connection with the solicitation of proxies by the Board of Directors of Blue
Dolphin Energy Company, a Delaware corporation (the "Company"), from holders of
its common stock, $.01 par value per share ("Common Stock"), for use at the 2002
Annual Meeting of Stockholders and any adjournment or postponement thereof (such
meeting and any adjournment or postponement thereof is referred to herein as the
"Annual Meeting"). The Annual Meeting is to be held on May 14, 2002, at 10:00
a.m., Houston time, at the Company's principal executive offices, 801 Travis,
Suite 2100, Houston, Texas.
This Proxy Statement, the accompanying notice and form of proxy are
first being mailed to stockholders on or about April 15, 2002 along with the
Annual Report to Stockholders for the year ended December 31, 2001.
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.
VOTING
At the Annual Meeting, stockholders will be asked (i) to consider and
vote upon the election of four nominees to serve on the Board of Directors of
the Company and (ii) to consider and take action upon such other matters as may
properly come before the Annual Meeting.
All shares of the 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" election of all nominees to the Board of Directors. The Board of
Directors of the Company does not know of any other matter to be brought before
the Annual Meeting. If any other matter is properly presented at the Annual
Meeting for action, the persons named in the proxies and acting there under will
have discretion to vote on such matter.
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:
1
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 Annual Meeting.
Any written notice revoking a proxy should be sent to the Secretary of
the Company at the Company's principal executive offices, 801 Travis, Suite
2100, Houston, Texas 77002.
The Board of Directors has fixed the close of business on March 27,
2002, as the record date (the "Record Date") for the determination of
stockholders entitled to notice of, and to vote at, the Annual Meeting. A
complete list of 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 days prior to the Annual Meeting at the Company's principal
executive offices, 801 Travis, Suite 2100, Houston, Texas. At the close of
business on March 27, 2002, there were outstanding 6,371,845 shares of Common
Stock. Stockholders will be entitled to one vote per share of Common Stock held
of record on the Record Date on each matter presented at the Annual Meeting. The
holders of a majority of the total 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 Annual Meeting.
Abstentions and broker non-votes (i.e. 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.
ELECTION OF DIRECTORS
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 Annual
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.
Robert L. Barbanell, who was appointed to the Board of Directors in
2000 and elected to the Board of Directors by stockholders at the 2001 annual
meeting, resigned from the Board of Directors effective February 28, 2002 to
pursue other business interests. The Board expresses its thanks to Mr. Barbanell
for his valuable contributions during his service with the Company. The Company
anticipates that it will fill the vacancy created by Mr. Barbanell's resignation
prior to, or at, the 2003 annual meeting.
Nominees
Messrs. Michael S. Chadwick, Harris A. Kaffie, Robert D. Wagner, Jr.
and Ivar Siem (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 have all previously been
elected by the stockholders. 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
2
Annual Meeting, the person or persons exercising the proxies will vote for the
election of a substitute nominee designated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES.
NOMINEES AND EXECUTIVE OFFICERS
The following table provides certain information with respect to the
Nominees, and the executive officers of the Company.
POSITION
NAME AGE POSITION HELD SINCE
---- --- -------- ----------
Ivar Siem 55 Chairman of the Board, 1989
and Director
Michael S. Chadwick 50 Director 1992
Harris A. Kaffie 52 Director 1989
Robert D. Wagner, Jr. 60 Director 2001
Michael J. Jacobson 55 President and Chief 1990
Executive Officer
Roland B. Keller 63 Executive Vice President 1990
John P. Atwood 50 Vice President 1998
G. Brian Lloyd 43 Vice President, Treasurer 1989
and Secretary
The following is a brief description of the background and principal
occupation of each Nominee and executive officer:
Ivar Siem - Chairman of the Board of Directors - 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 interim President (1995) during
its restructuring. Since 1985, he has been an international consultant in
energy, technology and finance. He has served as a Director of Business
Development for Norwegian Petroleum Consultants and as an independent consultant
to the oil and gas exploration and production industry based in London, England.
Mr. Siem holds a Bachelor of Science Degree in Mechanical Engineering from the
University of California, Berkeley, and has completed an executive MBA program
at Amos Tuck School of Business, Dartmouth University.
Michael S. Chadwick - Director - Mr. Chadwick has been engaged in
the commercial and investment banking businesses since 1975. From 1988 to 1994,
Mr. Chadwick was President of Chadwick, Chambers & Associates, Inc., a private
merchant and investment banking firm in Houston, Texas, which he founded in
1988. In 1994, Mr. Chadwick joined Sanders Morris Harris, an investment banking
and financial advisory firm, as Senior Vice President and a Managing Director in
the Corporate Finance Group. Mr. Chadwick holds a Bachelor of Arts Degree in
Economics from the University of Texas at Austin and a Master of Business
Administration Degree from Southern Methodist University.
Harris A. Kaffie - Director - Mr. Kaffie is a partner in Kaffie
Brothers, a real estate, farming and ranching partnership. He currently serves
as a Director of KBK Capital Corporation, Drillmar, Inc., and CCNG, Inc., a
privately held company with interests in natural gas related assets, oilfield
services, and
3
real estate development. Mr. Kaffie received a Bachelor of Business
Administration Degree from Southern Methodist University in 1972.
Robert D. Wagner, Jr. - Director - Mr. Wagner was the Managing
Director of Arthur Andersen's Global Energy Corporate Finance Group from 1999
through April 2001. He previously was the Managing Director of Energy Corporate
Finance of Bankers Trust/BT Alex. Brown and Bear Stearns and was an Executive
Vice President of First City Houston. He is a past President and Director of the
Petroleum Club of Houston. He is also a Director of Comfort Systems USA and
Electric City. Mr. Wagner received a Bachelor of Arts degree in History from
Holy Cross College in 1963 and a Master of Business Administration degree in
Finance from New York University in 1971.
Michael J. Jacobson - President and Chief Executive Officer - Mr.
Jacobson has been associated with the energy industry since 1968, serving in
various senior management capacities since 1980. He served as Senior Vice
President and Chief Financial and Administrative Officer for Creole
International, Inc. and it's subsidiaries, international providers of
engineering and technical services to the energy sector, as well as Vice
President of Operations for the parent holding company, from 1985 until joining
the Company in January 1990. He has also served as Vice President and Chief
Financial Officer of Volvo Petroleum, Inc., and for certain Fred. Olsen oil and
gas interests. Mr. Jacobson began his career with Shell Oil Company, where he
served in various analytical and management capacities in the exploration and
production organization during the period 1968 through 1974. Mr. Jacobson holds
a Bachelor of Science Degree in Finance from the University of Colorado. Mr.
Jacobson has served as President and Chief Executive Officer of the Company
since January 1990.
Roland B. Keller - Executive Vice President Exploration and
Production - Mr. Keller has been associated with the energy industry since 1962,
serving in senior management capacities since 1976. Prior to joining the Company
in 1990, he served as Senior Vice President - Exploration for Sandefer Oil and
Gas Company, an independent oil and gas company from 1982. He served as Vice
President - Exploration and Production for Volvo Petroleum, Inc., from 1980 to
1982, and Vice President and Division Manager for Florida Exploration Co., from
1976 to 1980. Mr. Keller began his career with Amoco Production Co., serving in
various technical and management capacities from 1962 through 1976. Mr. Keller
holds Bachelor of Science and Master of Science degrees in Geology from the
University of Florida. Mr. Keller has served as Executive Vice President -
Exploration and Production of the Company since September 1990.
John P. Atwood - Vice President, Business Development - Mr.
Atwood has been associated with the energy industry since 1974, serving in
various management capacities since 1981. He served as Senior Vice President of
Land and Administration for Glickenhaus Energy from 1987 to 1991, Area Land
Manager for CSX Oil & Gas Corporation and Division Land Manager for Hamilton
Brothers Oil Company/Volvo Petroleum, Inc. He served in various land capacities
for Tenneco Oil Company from 1977 to 1981. Mr. Atwood is a Certified
Professional Landman and holds a Bachelor of Arts Degree from Oklahoma City
University and a Master of Business Administration Degree from Houston Baptist
University. Mr. Atwood served as Vice President of Land from 1991 to 1998 and
Vice President of Finance and Corporate Development until his appointment as
Vice President of Business Development in 2001.
G. Brian Lloyd - Vice President, Treasurer and Secretary - Mr.
Lloyd is a Certified Public Accountant and has been employed by the Company
since December 1985. Prior to joining the Company, he was an accountant for
DeNovo Oil and Gas Inc., an independent oil and gas company. Mr. Lloyd
4
received a Bachelor of Science Degree in Finance from Miami University, Oxford,
Ohio in 1982 and attended the University of Houston in 1983 and 1984. Mr. Lloyd
has served as Secretary of the Company since May 1989, Treasurer since September
1989 and Vice President since March 1998.
There are no family relationships between any director or executive
officer.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During 2001, the Board of Directors of the Company held four meetings.
Each director attended at least 75% of the total number of meetings of the Board
of Directors and committees on which he served. Mr. Barbanell's resignation from
the Board of Directors created vacancies, which the Company does not presently
anticipate filling, on the Audit Committee and the Compensation Committee, each
of which is discussed below.
At the beginning of 2001, the Audit Committee consisted of Messrs.
Barbanell, Siem and Chadwick. In May 2001, Mr. Siem resigned from the Audit
Committee and Mr. Wagner was appointed to fill the vacancy on the Audit
Committee. After Mr. Barbanell's resignation in February 2002, Mr. Wagner was
elected to replace Mr. Barbanell as Chairman of the Audit Committee. The Audit
Committee's duties include overseeing the Company's financial reporting and
internal control functions. The Audit Committee met twice during the last fiscal
year.
During 2001, the Compensation Committee, consisted of Messrs. Siem,
Kaffie, and Barbanell met once. The Compensation Committee's duties are to
oversee and set the Company's compensation policy and to administer its stock
option plans.
The Company does not have a nominating committee. However, pursuant to
the Company's Certificate of Incorporation, stockholder nominations for election
to the Board of Directors must be received by the Company before February 13,
2003. See "Nominations and Proposals by Stockholders for the 2003 Annual
Meeting."
REPORT OF THE AUDIT COMMITTEE
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 entirely of directors who meet the independence and
experience requirements of Nasdaq Stock Market, Inc., as determined by the Board
of Directors. The Audit Committee reviews and reassesses the charter annually
and recommends any changes to the Board of Directors for approval.
The Audit Committee'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
outside auditors; and
o provide an avenue of communication among the outside auditors,
management and the Board of Directors.
5
Management is responsible for the Company's internal controls and the
financial reporting process. The independent accountants are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States of America and to issue a report thereon. The Audit Committee's
responsibility is to monitor and oversee these processes.
The Audit Committee held two meetings during fiscal 2001. In February
2002, the Company elected not to continue the engagement of KPMG LLP ("KPMG") as
the Company's independent accountants and the Audit Committee recommended, and
the Board approved, the selection of Mann Frankfort Stein & Lipp CPAs, LLP
("Mann Frankfort") as its new independent accountants.
In connection with the audits of the Company's two fiscal years ended
December 31, 2000 and 1999, and the subsequent interim period through February
15, 2002, there were no disagreements with KPMG on any matter of accounting
principles or practices, financial statement 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, 2000 and 1999 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,
2000 and 1999 contained 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, 2000 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.
The Audit Committee, comprised of Messers. Chadwick and Wagner reviewed
and discussed the audited financial statements of the Company for the fiscal
year ended December 31, 2001 with the Company's management and management
represented to the Audit Committee that the Company's financial statements were
prepared in accordance with accounting principles generally accepted in the
United States of America. The Audit Committee discussed with Mann Frankfort the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The Audit Committee received the written disclosures and the letter
from Mann Frankfort required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees), and the Audit Committee
discussed with Mann Frankfort their independence from the Company. The Audit
Committee considered the non-audit services provided by Mann Frankfort and
determined that the services provided are compatible with maintaining Mann
Frankfort's independence. There were no fees paid to Mann Frankfort in calendar
year 2001, and estimated audit fees to be paid to Mann Frankfort in calendar
year 2002 are $70,000.
6
Based on the Audit Committee's discussions with management and Mann
Frankfort, and the Audit Committee's review of the representation of management
and the report of Mann Frankfort to the Audit Committee, the Audit Committee
recommended to the Board of Directors that the Company's audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 for filing with the Securities and Exchange
Commission.
The Audit Committee
Robert D. Wagner, Jr., Chairman
Michael S. Chadwick
COMPENSATION OF DIRECTORS
In fiscal 2001, the Company paid to non-employee members of the Board
of Directors an annual retainer of $12,000, payable 50% in cash and 50% in
Common Stock. The Audit Committee chairman receives an annual retainer of $3,000
and other Audit Committee members receive an annual retainer of $1,500. In
addition, directors received stock options based upon a market value of $20,000
of the underlying shares. 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.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to the Chief
Executive Officer and each of the executive officers of the Company whose annual
salary exceeded $100,000 in fiscal 2001 (collectively, the "Named Executive
Officers") for services rendered to the Company.
7
SUMMARY COMPENSATION TABLE*
Long-Term
Compensation
Awards
-----------------
Annual Compensation Securities
Name and --------------------------- Underlying
Principal Position Year Salary (1) Bonus Options (#) (2)
------------------------------ ------------- ------------- ----------- -----------------
Ivar Siem 2001 $150,000 - -
Chairman of the Board 2000 $150,000 - 8,000
1999 $150,000 - 12,000
Michael J. Jacobson 2001 $200,000 - -
President and Chief 2000 $200,000 - 6,000
Executive Officer 1999 $200,000 - 12,000
Roland B. Keller 2001 $140,000 - -
Executive Vice 2000 $140,000 - 3,000
President - Exploration 1999 $140,000 - 8,000
and Production
John P. Atwood
Vice President - 2001 $137,500 - -
Business 2000 $124,167 - 4,000
Development 1999 $120,000 - 8,000
G. Brian Lloyd 2001 $103,083 - -
Vice President - 2000 $99,422 - 3,000
Treasurer 1999 $85,000 - 5,000
* Excludes certain personal benefits, the aggregate value of which do not
exceed 10% of the Annual Compensation shown for each person.
(1) Effective January 1, 2002, as part of the Company's cost reduction program,
the annual salaries of Messers Siem, Jacobson, Keller and Atwood were
reduced to $75,000, $125,000, $75,000 and $75,000, respectively.
(2) In fiscal year 2001 no options were granted to named Executive Officers.
8
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
Value of Unexercised
Number of Unexercised In-the-Money Options
Shares Acquired Value Options at Year End (#) at Year End (1)
Name on Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
Ivar Siem - $ - 15,334 4,000 $ - $ -
Michael J. Jacobson 3,333 $ - 13,333 4,000 $ - $ -
Roland B. Keller - $ - 8,445 5,333 $ - $ -
John P. Atwood - $ - 7,778 5,333 $ - $ -
G. Brian Lloyd - $ - 5,778 3,333 $ - $ -
(1) Based on the difference between the average of the closing bid and ask
prices on December 31, 2001 (the last trading day of 2001), which exceeded
the exercise price.
The Company's stock option plans provide 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, 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 provide 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.
9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 27, 2002, certain information
with respect to the beneficial ownership of shares of Common Stock (the
Company's only class of voting security issued and outstanding) as to (i) all
persons known by the Company to be beneficial owners of 5% or more of the
outstanding shares of Common Stock, (ii) each director and Nominee, (iii) each
Named Executive Officer and (iv) all executive officers and directors, as a
group. Unless otherwise indicated, each of the following persons has sole voting
and dispositive power with respect to such shares.
SHARES OWNED BENEFICIALLY
NAME OF ---------------------------------------
BENEFICIAL OWNER NUMBER PERCENT (1)
---------------------------------- ---------------------------------------
Colombus Petroleum
Limited, Inc. (2) 911,712 14.3
Ivar Siem (3) 436,625 6.9
Harris A. Kaffie (3) 717,897 11.3
Michael S. Chadwick (3) 24,819 *
Robert D. Wagner, Jr. (3) 12,997 *
Michael J. Jacobson (3) 144,114 2.3
Roland B. Keller (3) 46,728 *
John P. Atwood (3) 29,697 *
G. Brian Lloyd (3) 21,479 *
Executive Officers and
Directors, as a Group
(8 persons) (3) 1,434,356 22.5
----------------------------------
* Less than 1%
(1) Based upon 6,371,845 shares of Common Stock outstanding on March 27, 2002.
(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) Includes shares of Common Stock issuable upon exercise of options that may
be exercised within 60 days of March 27, 2002 as follows: Mr. Siem -
15,334; Mr. Kaffie - 16,306; Mr. Chadwick - 14,471; Mr. Jacobson - 13,333;
Mr. Keller - 8,445; Mr. Atwood - 7,778; Mr. Wagner - 10,526; Mr. Lloyd -
5,778 and all directors and executive officers as a group - 112,497.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 1, 1999, the Company issued a $1,000,000 promissory note to
Harris A. Kaffie, a director of the Company. The note was due June 1, 2000, bore
interest at 10% per annum, and was convertible into Common Stock at $6.60 per
share. The due date of the note was subsequently extended to March 31, 2001, and
was convertible into common stock at $6.00 per share. The Company issued
10
three convertible promissory notes in the principal amount of $200,000, $200,000
and $600,000 on May 25, 2000, July 6, 2000 and November 30, 2000, respectively.
These notes were issued to Ivar Siem, Chairman of the Company. These convertible
promissory notes were due March 31, 2001, bore interest at the rate of 10% per
annum and were convertible into common stock at the rate of $6.00 per share. The
principal and accrued interest due to Messrs. Kaffie and Siem were paid in full
in January 2001.
In late 2000, the Company formed Drillmar, Inc. ("Drillmar"), at which
time it had a 37.5% ownership interest in Drillmar. In September 2000, Drillmar
acquired a 1% general partnership interest in Zephyr Drilling, Ltd. ("Zephyr").
Zephyr owned a semi-submersible drilling rig that has been prepared for
reconfiguration into a semi-tender. At December 31, 2000, Drillmar's investment
in Zephyr was $86,000. Harris A. Kaffie, director of the Company, and Ivar Siem,
Chairman of the Company, are limited partners in Zephyr, investing $3.0 million
dollars for a 37.5% interest and $2.97 million for a 37.1% interest,
respectively.
In May 2001, the Company increased its ownership in Drillmar from 37.5% to
64%. Consideration paid by the Company included cash of approximately $131,000,
and contribution of services in the amount of $434,000.
In September 2001, Drillmar entered into a merger agreement and merged
with Zephyr. Prior to the merger, Zephyr was a limited partnership in which
Drillmar was the general partner. As a result of the merger, the Company's
interest in Drillmar decreased from 64% to 12.8%. Messers. Siem and Kaffie
became owners of 30.3% and 30.6%, respectively, of Drillmar's common stock.
During 2001, Messrs. Siem and Kaffie provided funding to Drillmar of $525,000
and $425,000, respectively, and were issued unsecured promissory notes from
Drillmar. The promissory notes are due June 30, 2002 and bear interest at the
rate of 10% per annum. Along with the promissory notes, Drillmar issued
detachable warrants to Messrs. Siem and Kaffie of 52,500 and 42,500,
respectively. Each warrant provides for the purchase of one share of Drillmar
common stock at $5 per share and are exercisable through January 31, 2005. The
promissory notes issued by Drillmar are nonrecourse to the Company.
In January 2001, the Company entered into an agreement with Drillmar
whereby it agreed to provide office space and certain management and
administrative services to Drillmar for approximately $40,000 per month. This
agreement can be terminated at any time by the mutual agreement of the parties.
Through October 2001, the Company used the monthly payments it was entitled to
receive to fund its investment in Drillmar.
NOMINATIONS AND PROPOSALS BY STOCKHOLDERS
FOR THE 2003 ANNUAL MEETING
The Company has tentatively set its year 2003 annual meeting for May 14,
2003. Accordingly, stockholders should submit nominations and proposals in
accordance with the guidance set forth below.
Nominations for the year 2003 Annual Meeting. The Company'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'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
11
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 2003 annual meeting of
stockholders, persons to serve on the Board of Directors, must submit
nominations to the Company, at its principal executive office, so that such
notice is received by the Company no later than February 13, 2003. 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.
Proposals for the year 2003 Annual Meeting. Stockholders who desire to
present proposals, other than notices of nomination for the election of
Directors, to stockholders of the Company at the year 2003 annual meeting of
stockholders, and to have such proposals included in the Company's proxy
materials, must submit their proposals to the Company, at its principal
executive office, by December 16, 2002. 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.
Moreover, any stockholder who intends to submit a proposal for
consideration at the Company's 2003 annual meeting, but not for inclusion in the
Company's proxy materials, must notify the Company. Pursuant to the rules of the
U.S. Securities and Exchange Commission, such notice must (1) be received at the
Company's executive offices no later than February 28, 2003 and (2) satisfy the
rules of the U.S. Securities and Exchange Commission.
RELATIONSHIP WITH
INDEPENDENT PUBLIC ACCOUNTANTS
Mann Frankfort Stein & Lipp CPAs LLP, has been engaged by the Company's
Board of Directors as the principal accountants for the Company. The Company
expects that they will continue as principal accountants. Representatives of
Mann Frankfort are expected to be present at the Annual 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 Annual Meeting other than those
matters described above and 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.
By Order of the Board of Directors
---------------------------------------
G. Brian Lloyd
Vice President, Treasurer and Secretary
Houston, Texas
April 15, 2002
12
BLUE DOLPHIN ENERGY COMPANY
The undersigned hereby (a) acknowledges receipt of the Notice of Annual
Meeting of Stockholders of Blue Dolphin Energy Company (the "Company") to be
held on May 14, 2002, at 10:00 AM., Houston time, at the Company's principal
executive offices, 801 Travis, Suite 2100, Houston, Texas and the Proxy
Statement in connection therewith, and (b) appoints Michael J. Jacobson and G.
Brian Lloyd, and each of them, his proxies with full power of substitution and
revocation, for and in the name, place and stead of the undersigned, to vote
upon and act with respect to all of the shares of Common Stock, par value $0.01
per share, of the Company standing in the name of the undersigned or with
respect to which the undersigned is entitled to vote and act at said meeting and
at any adjournment or postponement thereof, as set forth below.
PROPOSAL 1. For Withhold For All Except
The Election of Directors [ ] [ ] [ ]
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING [ ]
IVAR SIEM, HARRIS A. KAFFIE, MICHAEL S. CHADWICK, AND ROBERT D. WAGNER, JR.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
"FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
____________________________________________________________________________
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
Whether or not you plan to attend the Annual Meeting and regardless of the
number of shares you own, please date, sign and return this proxy card in the
enclosed envelope (which requires no postage if mailed in the United States).
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES NAMED.
The undersigned hereby revokes any proxy or proxies heretofore given to
vote upon or act with respect to such stock and hereby ratifies and confirms
all that said Proxies, their substitutes, or any of them, may lawfully do by
virtue hereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
DATED:
---------------------------
---------------------------
Signature
---------------------------
(Signature if held jointly)
Please date the proxy and sign your name
exactly as it appears hereon. Where there is
more than one owner, each should sign. When
signing as an attorney, administrator,
executor, guardian or trustee, please add
your title as such. If executed by a
corporation, the proxy should be signed by a
duly authorized officer. Please sign the
proxy and return it promptly whether or not
you expect to attend the meeting. You may
nevertheless vote in person if you do attend.