As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/14/09  Geopetro Resources Co             DEFR14A    12/14/09    1:722K                                   Merrill Corp-MD/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFR14A     Revised Definitive Proxy Solicitation Material      HTML    515K 

Table of Contents

 

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. 1)

 

Filed by the Registrant  x
Filed by a Party other than the Registrant  o
Check the appropriate box:
o	Preliminary Proxy Statement
o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x	Definitive Proxy Statement
o	Definitive Additional Materials
o	Soliciting Material Pursuant to §240.14a-12
GeoPetro Resources Company
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x	No fee required.
o	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:
o	Fee paid previously with preliminary materials.
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

 

Table of Contents

 

EXPLANATORY NOTE

 

In connection with our Schedule 14A filed on April 30, 2009, PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS held June 26, 2009, GeoPetro Resources Company (“we,” “us,” “our,” or the “Company”) is filing this Amendment No. 1 to include the following information:

 

1.              We revised Compensation Discussion and Analysis to identify companies with which we make informal comparisons regarding compensation paid to their executives against compensation paid to our executives.

 

2.              We revised our discussion our discussion in the section entitled “Potential Payments Upon Termination or Change in Control.”

 

With the exception of the foregoing changes, no other information in this report has been supplemented, updated or amended.

 

Table of Contents

 

 

One Maritime Plaza

Suite 700    ·     San Francisco CA    ·    94111

(415) 398-8186    ·    Fax: (415) 398-9227

 

April 30, 2009

 

Dear Shareholder:

 

It is a pleasure to invite you to the Company’s 2009 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on June 26, 2009 at 10:30 a.m. Pacific Daylight Time, at Le Meridien San Francisco, Mercantile Room, 333 Battery Street, San Francisco, California, 94111. I hope you will be able to attend.

 

At this year’s Annual Meeting, shareholders will be asked to elect seven directors and to ratify the appointment of Hein & Associates LLP to serve as GeoPetro’s independent registered public accounting firm for the year ending December 31, 2009.  In addition, shareholders will transact any other business that may properly come before the meeting.

 

Please be advised that we are taking advantage of the Securities and Exchange Commission’s rules that allow us to furnish our proxy statement and related proxy materials to our shareholders over the Internet.  We believe the use of the internet will expedite shareholders’ receipt of proxy materials and lower our costs of delivery.  The “Information Concerning Solicitation and Voting” section of this proxy statement contains instructions on how you can receive a paper copy of the proxy statement and annual report.

 

Please know that your vote is very important to us and we encourage you to vote promptly.  Whether or not you expect to attend the Annual Meeting in person, please vote via the Internet or request a paper proxy card to complete, sign and return by mail so that your shares may be voted.

 

The Past Year in Retrospect and Current Outlook

 

The turbulence in the financial markets has continued and indeed spread to the wider economy. Commodity prices including oil and natural gas prices have been dramatically impacted as the slowing economy affects demand. I believe that oil and natural gas prices are likely to stabilize at current levels until we see signs of growth returning to the economy. I am however concerned about the ability of our industry to meet increased demand when economic growth returns. Investments are currently being cancelled or postponed by most oil and gas companies who have to preserve liquidity and this will only exacerbate the supply problems which existed before the economic downturn. Such supply concerns will re-emerge as the economy recovers and I believe that oil and natural prices will increase in the medium term. However the timing of any such recovery is difficult to predict at this time.

 

We continue to believe in higher oil and natural gas prices in the long term and that access to reserves and production will ultimately create value for shareholders. In this respect, our strategy at GeoPetro has not fundamentally changed but we believe it is prudent to adopt a cautious approach in the current environment.

 

The Company has taken steps to address the weaker commodity price environment. Foremost was the acquisition of the natural gas treatment plant (the “Plant”) from Madisonville Gas Processing, LP (“MGP”), in exchange for shares of GeoPetro’s common stock, assumption of related debt and cash (“the Acquisition”) on December 31, 2008. The new owner of the Plant is GeoPetro’s wholly owned, indirect subsidiary, Madisonville Midstream LLC (“MM”).  The Madisonville Project is located in Madison County, East Texas.

 

The Company hopes to realize both intermediate and long term cost and operating efficiencies by consolidating the upstream and midstream portions of Madisonville under common ownership. Prior to the consolidation, MGP and GeoPetro employed a combined total of 30 persons, whereas subsequent to the consolidation, GeoPetro and MM now employ a combined total of 21 persons, representing a net reduction of 9 persons (30% of the combined pre-consolidation workforce). Despite the challenges of the current environment, we accomplished the necessary goal of vertically integrating our position in the Madisonville field.  The Company continues to explore other longer term cost saving and efficiency measures in the Plant.

 

Table of Contents

 

 

GEOPETRO RESOURCES COMPANY

One Maritime Plaza, Suite 700

San Francisco, California 94111

(415) 398-8186

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be held June 26, 2009

 

To Our Shareholders:

 

NOTICE IS HEREBY GIVEN that the 2009 Annual Meeting of Shareholders of GeoPetro Resources Company will be held on June 26, 2009, at 10:30 a.m. Pacific Daylight Time, at Le Meridien San Francisco, Mercantile Room, 333 Battery Street, San Francisco, California, 94111 for the following purposes:

 

1.          To elect seven directors to serve on the Board of Directors until the next annual meeting of shareholders or until their respective successors are elected and qualified;

 

2.          To ratify the appointment of Hein & Associates LLP as the independent registered public accounting firm of the Company for the Company’s fiscal year ending December 31, 2009; and

 

3.          To transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

 

We cordially invite all shareholders to attend the 2009 Annual Meeting.  Only shareholders of record as shown on the books of the Company at the close of business on May 7, 2009 will be entitled to vote at the Annual Meeting or any adjournment or postponement thereof.  The Annual Meeting may adjourn from time to time without notice other than by announcement at the Annual Meeting, or at any adjournments of postponements thereof, and any and all business for which the Annual Meeting has been noticed may be transacted at any such adjournments or postponements. Your vote is very important.  Regardless of whether you expect to attend the Annual Meeting in person, please vote via the Internet or request a paper proxy card to complete, sign and return by mail so that your shares may be voted.

 

Please note that registration will begin at 9:30 a.m., and seating will begin immediately thereafter.  For admission to the Annual Meeting, each shareholder may be asked to present valid picture identification, such as a driver’s license or passport, and proof of ownership of GeoPetro stock as of the record date, such as the enclosed proxy card or a brokerage statement reflecting stock ownership as of the record date.

 

By Order of the Board of Directors
Stuart J. Doshi, Chairman, President and
Chief Executive Officer
San Francisco, CA
April 30, 2009

 

We encourage each shareholder to sign and return a proxy card or to use Internet voting.  Please see our “Information Concerning Solicitation and Voting” section for information about voting by Internet or mail.

 

Table of Contents

 

GEOPETRO RESOURCES COMPANY

One Maritime Plaza, Suite 700

San Francisco, California 94111

(415) 398-8186

 

PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS

To be held June 26, 2009

 

INFORMATION CONCERNING SOLICITATION AND VOTING

 

Our Board of Directors has made these materials available to you on the Internet or, upon your request, has delivered printed versions of these materials to you by mail, in connection with the Board’s solicitation of proxies for use at the 2009 Annual Meeting of Shareholders of GeoPetro Resources Company (the “Company,” “GeoPetro,” “we,” or “us”), which will take place on June 26, 2009, at 10:30 a.m. Pacific Daylight Time, at Le Meridien San Francisco, Mercantile Room, 333 Battery Street, San Francisco, California, 94111, or at any adjournment or postponement thereof.  This proxy statement describes matters on which we would like you, as a shareholder, to vote.  It also gives you information on these matters so that you can make an informed decision.

 

These materials include:

 

·      our statement for the 2009 Annual Meeting; and

 

·                  our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, which includes our audited consolidated financial statements.

 

If you request printed versions of these materials by mail, these materials also include the proxy card or voting instruction card for the Annual Meeting.

 

In accordance with rules adopted by the Securities and Exchange Commission, instead of mailing a printed copy of our proxy materials to shareholders, we have elected to furnish such materials by providing access to these documents over the Internet.  A Notice of Internet Availability of Proxy Materials is first being sent to shareholders on or about May 13, 2009.  The Notice of Internet Availability of Proxy Materials provides you with instructions as to how you may (1) view the proxy materials for the Annual Meeting on the Internet; (2) vote your shares after you have viewed the proxy materials; (3) request a printed copy of the proxy materials; and (4) instruct us how to send future proxy materials to you.

 

Choosing to receive your future proxy materials by email will lower our costs of delivery.  If you choose to receive our future proxy materials by email, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting site.  Your election to receive proxy materials by email will remain in effect until you terminate it.

 

If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions included in the Notice of Internet Availability of Proxy Materials.

 

At our Annual Meeting, shareholders will act upon the matters outlined in the notice of Annual Meeting on the cover page of this proxy statement, including the election of seven directors, each for a term of one year, and the ratification of Hein & Associates LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2009.

 

Only shareholders of record at the close of business on May 7, 2009, the record date for the Annual meeting, are entitled to receive notice of and to vote at the Annual Meeting.  If you are a shareholder of record on May 7, 2009, you will be entitled to vote all of the shares that you hold on that date at the Annual Meeting, or any postponements or adjournments thereof.  If you attend the Annual Meeting, please note that you may be asked to present valid picture identification, such as a driver’s license or passport.  Please also note that if you hold your shares in “street name” (that is, through a broker or other nominee), you will need to bring a copy of a brokerage statement reflecting your stock ownership as of the record date and check in at the registration desk at the Annual Meeting.

 

The presence, in person or by proxy, of persons entitled to vote a majority of the outstanding common stock will constitute a quorum, permitting business to be conducted at the Annual Meeting.  Abstentions and broker non-votes are counted as shares present at the Annual Meeting for purposes of determining whether a quorum exists.

 

1

Table of Contents

 

Broker non-votes occur when brokers or nominees have voted on some of the matters to be acted on a meeting, but do not vote on certain other matters because, under the rules of the NYSE Amex, they are not allowed to vote on those or other matters without instructions from the beneficial owners of the shares.  If you hold your shares indirectly through a broker, bank, trustee, nominee, or other third party, that party is the registered holder of your shares and submits the proxy to vote your shares. You are the beneficial owner of the shares and typically you will be asked to provide the registered holder with instructions as to how you want your shares to be voted.  If you are a shareholder who holds your shares through a broker or other nominee, you may vote in person at the Annual Meeting only by obtaining a proxy form from the broker or other nominee that holds your shares.

 

If you are a registered shareholder (that is, you hold your stock in certificate form or otherwise directly and not through a broker or other nominee) and attend the Annual Meeting, you may vote in person at the Annual Meeting.

 

We will give you a ballot when you arrive.  If you are the beneficial owner of shares held in street name and you wish to vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or nominee.  If you do not wish to vote in person or if you will not be attending the Annual Meeting, you may vote by proxy.  You can vote by proxy over the Internet by following the instructions provided in the Notice of Internet Availability of Proxy Materials, or, if you requested printed copies of the proxy materials by mail, you can also vote by mail.

 

VOTE BY INTERNET — www.investorvote.com

 

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:55 P.M. Pacific Time, June 24, 2009.  Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

 

VOTE BY MAIL

 

Mark, sign and date your proxy card and return it in the postage-paid envelope we provide.

 

A shareholder giving a proxy may revoke it at any time before it is exercised by delivering written notice of revocation to our Secretary, by voting again on a later date on the Internet (only your latest Internet proxy submitted prior to the meeting will be counted) or by signing and returning a new proxy card or voting instruction card with a later date, or by attending the Annual Meeting and voting in person.

 

The Board of Directors of the Company recommends a vote:

 

·                  FOR election of the seven director nominees, each for a term of one year (see Proposal 1); and

 

·                  FOR the ratification of the appointment of Hein & Associates LLP as the independent registered public accounting firm for the Company’s fiscal year ending December 31, 2009.

 

If you are a shareholder of record and you sign and return a proxy card and do not indicate how you wish to vote, the proxy holders will vote FOR election of all the nominees for director (Proposal 1) and FOR the ratification of the appointment of Hein & Associates LLP, as the independent registered public accounting firm for the Company’s fiscal year ending December 31, 2009 (Proposal 2).  With respect to other business that may properly come before the Annual Meeting, the proxy holders will vote as recommended by the Board of Directors, or, if no recommendation is given, in accordance with their judgment.

 

If you are a registered shareholder and you do not provide voting instructions to a designated proxy or cast a ballot at the Annual Meeting, your shares will not be voted.  If you hold your shares in street name and you do not provide voting instructions to your bank, broker or other nominee on how to vote your shares, the bank, broker or other nominee may be authorized to vote your shares as it chooses on the matters to be considered at the meeting.  If your bank, broker or other nominee lacks discretionary authority to vote on an item, your shares will not be voted on that item and will be treated as a “broker non-vote” on that item.  Under NYSE Amex Rules, the proposals to elect directors and to ratify the appointment of independent auditors are considered “discretionary” items for which brokers may vote, so we do not expect broker non-votes on these proposals.

 

As of the date of this proxy statement, April 30, 2009, GeoPetro had  34,284,646 shares of common stock and 2,466,672 shares of Series B Convertible Preferred Stock outstanding and entitled to vote at the Annual Meeting. Only shareholders of record as of the record date will be entitled to vote at the Annual Meeting.  Each share of common and Series B Convertible Preferred Stock is entitled to one vote on each Proposal presented at the Annual Meeting, except with respect to the election of directors, in which each share is entitled to a number of votes equal to the number of directors to be elected, as discussed below.

 

2

Table of Contents

 

For Proposal No.1, the election of directors, provided that the shares represented and voting at the meeting constitute a quorum, the candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected.  A shareholder may cumulate his, her or its votes for one or more candidates, but only if each such candidate’s name has been placed in nomination prior to the voting and the shareholder has given notice at the meeting, prior to the voting, of his intention to cumulate his votes. If any one shareholder has given such notice, all shareholders may cumulate their votes for the candidates in nomination. If the voting for directors is conducted by cumulative voting, each share will be entitled to a number of votes equal to the number of directors to be elected. These votes may be cast for a single candidate or may be distributed among two or more candidates in such proportions as the shareholder chooses. The seven candidates receiving the highest number of affirmative votes will be elected.  Withheld votes will have no effect on the outcome of the vote, nor will broker non-votes.

 

Discretionary authority to cumulate votes is being solicited hereby.  Unless otherwise directed by a shareholder, the proxies named in the accompanying proxy card may elect to cumulate votes cast pursuant to a proxy by casting all such votes for one nominee or by distributing such votes among as many nominees as they deem desirable.  If a shareholder desires to restrict the proxies named in the accompanying proxy card in casting votes for certain nominees, the shareholder should give such direction on the proxy card.

 

For Proposal No. 2, the ratification of Hein & Associates LLP, the affirmative vote of a majority of the shares represented and voting at the Annual Meeting, in person or by proxy, provided that such shares constitute a quorum, is required for approval.  Abstentions will be counted as represented and voting and will therefore have the effect of votes against the proposal.  Broker non-votes will have no effect.

 

The Annual Meeting may adjourn from time to time without notice other than by announcement at the Annual Meeting, or at any adjournments of postponements thereof, and any and all business for which the Annual Meeting has been noticed may be transacted at any such adjournments or postponements. Your vote is very important.

 

The proxies being solicited hereby are being solicited by the Board of Directors of the Company.  The solicitation of proxies is to be made principally by mail and the Internet; however, following the initial solicitation, our officers, directors and employees may engage in further solicitations by telephone or oral communication with shareholders.  These persons will not receive compensation for that solicitation other than their regular compensation as officers, directors and employees. Arrangements also will be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to beneficial owners of the shares held of record by those persons. We may reimburse those persons for reasonable out-of-pocket expenses incurred by them in so doing. We will pay all expenses involved in preparing, assembling, distributing and mailing our proxy materials.

 

AVAILABLE INFORMATION

 

Copies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, which include our consolidated financial statements and our auditor’s report thereon, are being provided to shareholders with this proxy statement. The annual report is not part of the proxy soliciting material.  Shareholders may also obtain a copy of our annual report, free of charge, by accessing the SEC’s website at www.sec.gov or by sending a written request to:  President, GeoPetro Resources Company, One Maritime Plaza, Suite 700, San Francisco, CA 94111.

 

PROPOSAL 1: ELECTION OF DIRECTORS

 

Shareholders are being asked to elect seven directors to serve on the Board of Directors of GeoPetro Resources Company.  If elected as director, each individual will hold office until the next annual meeting of shareholders or until his/her successor is elected and qualified, except in the case of his/her death, resignation, ineligibility or removal.  Presently, the Board of Directors is composed of Stuart Doshi, David Creel, Chris Steinhauser, David Anderson, Thomas Cunningham, and Nick DeMare and Jeffrey Friedman.  Based upon the recommendation of our independent directors, the seven nominees for director for election at the 2009 Annual Meeting are Stuart Doshi, David Creel, Chris Steinhauser, David Anderson, Thomas Cunningham, Nick DeMare and Jeffrey Friedman.

 

Nominees for Director

 

All of the nominees for director are current directors of the Company.    All of the nominees have agreed to serve if elected.  If a nominee becomes unable or unwilling to accept nomination or election, either the Board will reduce the size of the Board, or the proxy holders named on the enclosed proxy card will vote for substitute nominees as recommended by the Board, or, if no recommendation is given, in accordance with their judgment.

 

3

Table of Contents

 

About the Director Nominees

 

Information is provided on the following pages about the nominees for director, including their principal occupations for the past five years, certain other directorships, age and length of service as a director for GeoPetro.  Membership on Board committees, attendance at Board and committee meetings and ownership of GeoPetro stock are provided in separate sections following the biographical information on the nominees.

 

Name		Age		Position with GeoPetro (1)
Stuart J. Doshi(4)		63		Director, Chairman, President and Chief Executive Officer
David V. Creel(4)		69		Director and Vice President of Exploration
J. Chris Steinhauser(5)		49		Director and Chief Financial Officer
Thomas D. Cunningham(2)(3)		60		Director
David G. Anderson(2)(3)		56		Director
Nick DeMare(2)(3)		54		Director
Jeffrey Friedman(3)		56		Director

 

Notes:

 

(1)	Each director is elected or appointed to hold office until the next annual meeting of shareholders or until their successor is duly elected or appointed, unless their office is earlier vacated. Our bylaws currently authorize a minimum of four and a maximum of seven directors to serve on the Board of Directors and, by resolution of the Board of Directors, the current number of directors has been set at seven.
(2)	Member of the Audit Committee.
(3)	Independent, in accordance with the rules of the NYSE Amex.
(4)	Executive Officer.
(5)	On January 9, 2009, J. Chris Steinhauser resigned from his positions as the Chief Financial Officer, Vice President of Finance and Secretary of the Company for family reasons, effective as of January 9, 2009. The resignation notification submitted by Mr. Steinhauser did not reference any disagreement with the Company on any matter relating to the Company’s operations, policies and practices. Mr. Steinhauser resumed his duties as Chief Financial Officer, Vice President of Finance and Secretary of the Company on April 27, 2009.

 

Stuart J. Doshi. Mr. Doshi, 63, has been actively engaged in the oil and gas business for the past 39 years. Mr. Doshi began his oil and gas career with Natomas Company in 1970. He held various positions of increasing responsibility in planning, corporate development and financial management with Natomas. Mr. Doshi’s activities covered international oil and gas exploration and production, domestic oil and gas exploration and production, geothermal energy production, coal production and petroleum trading and marketing companies.  After leaving Natomas in 1985, Mr. Doshi served as a Senior Vice President of Energy Sources Group until 1988. Mr. Doshi then served as Vice President of Pan Pacific Petroleum, Inc. from 1988 to 1991. Immediately prior to forming GeoPetro, Mr. Doshi was the Managing Director of Sierra Overseas Corporation. Mr. Doshi founded GeoPetro in 1994 and has served as a director and our President and Chief Executive Officer since our inception and as Chairman of the Board since March 1998. Mr. Doshi is a graduate of the University of San Francisco with a Bachelor’s Degree in Finance and the University of California, Santa Barbara with a Master’s Degree in Economics.

 

David V. Creel. Mr. Creel, 69, has 45 years oil and gas experience as a petroleum exploration geologist. Mr. Creel held various geological and supervisory positions in Libya during his eleven-year career with AMOSEAS (the operator for CALTEX Petroleum). Mr. Creel was also the Exploration Manager of the Rocky Mountain Region and Canada for Ladd Petroleum Company; Exploration Manager of the Rocky Mountain Region for Kilroy Company of Texas; and President of Aztec Resources Corporation. Since 1995, Mr. Creel worked as an independent geologic consultant and in June 1998 he joined GeoPetro in his current role as Vice President of Exploration. Mr. Creel has served as a director of GeoPetro since October 2001. Mr. Creel is a graduate of the University of  Notre Dame with a Bachelor’s degree in Geology and the University of Tulsa with a Master’s degree in Geology.

 

J. Chris Steinhauser. Mr. Steinhauser, 49, is an accountant with 23 years of experience in the energy and financial services industries. Mr. Steinhauser began his career with Peat, Marwick, Mitchell & Co. from 1981 through 1984. From September 1987 through January 1998, Mr. Steinhauser was employed by Sharon Energy Ltd. and Sharon Resources, Inc., its

 

4

Table of Contents

 

operating subsidiary, ultimately serving as Executive Vice President and Chief Financial Officer of the parent and President, Chief Operating Officer and Director of the subsidiary. From January 1998 until June 2000 Mr. Steinhauser was employed by Beta Oil & Gas, Inc. as a director and Chief Financial Officer where his primary activities included Beta’s initial public offering and listing on the NASDAQ National Market System, business development and corporate acquisitions. Mr. Steinhauser served as  GeoPetro’s Chief Financial Officer and Vice President of Finance from June 2000 to January 2009 and resumed his duties in that capacity effective April 27, 2009.   Mr. Steinhauser has served as a director of GeoPetro since October 2001. From January 2009 until April 2009 Mr. Steinhauser was employed by PetroHunter Energy Corporation as Chief Financial Officer.  Mr. Steinhauser is a graduate of the University of Southern California with a Bachelor’s degree in Business and conducted graduate studies at the University of Denver Graduate Tax Program and was a certified public accountant.

 

Thomas D. Cunningham. Mr. Cunningham, 60, has 32 years of experience in general management, with expertise in mergers and acquisitions, foreign exchange, sales, financial analysis and personnel management. Since January 2003, he has served as Senior Vice President of OfficePower L.L.C., a privately owned company in the distributed generation business. Prior to joining OfficePower Inc. , Mr. Cunningham served as Executive Vice President and Chief Financial Officer of Microban International, Ltd., a seller and licensor of branded additives from 2000 to 2003. From 1997 to 2000, Mr. Cunningham was a member of the Board and Executive Vice President of EMCOR Group, Inc. Prior to EMCOR, Mr. Cunningham was with Swiss Army Brands Inc. from 1994 to 1997, where he served on the Board of Directors and as Executive Vice President and Chief Financial Officer. Prior to that position, Mr. Cunningham spent 21 years with J.P. Morgan & Co., in various positions of increasing responsibility and last served as Managing Director in the Corporate Banking Group. Mr. Cunningham has served as a director of GeoPetro since April 2000. Mr. Cunningham is a graduate of Harvard College with a Bachelor’s degree in Economics and Columbia University with a Master’s degree in Business Administration.

 

David G. Anderson. Mr. Anderson, 56, is a Senior Vice President and director of Dundee Securities Corporation where he has managed the firm’s investment banking and capital markets activities since 1998. Mr. Anderson began his career with the National Energy Board of Canada in 1976 and later was employed by Amoco Production Company from 1978 to 1986 in its Calgary, Chicago and Houston offices. In 1987, Mr. Anderson returned to Canada with Midland Doherty and later joined BBN James Capel where he was the Managing Director from 1988 to 1995. From 1995 to 1998, Mr. Anderson was a partner and Managing Director with another investment dealer, Loewen, Ondaatje, McCutcheon Limited. Mr. Anderson has served as a director of GeoPetro since March 2006. Mr. Anderson is a graduate from the University of Manitoba with a Master’s degree in Business Administration and Bachelor’s degree in Arts.

 

Nick DeMare. Mr. DeMare, 54, is a member in good standing of the Institute of Chartered Accountants of British Columbia. Since May 1991, Mr. DeMare has been the President of Chase Management Ltd., a private company which provides a broad range of administrative, management and financial services to private and public companies engaged in mineral exploration and development, gold and silver production, oil and gas exploration and production and venture capital. Mr. DeMare indirectly owns 100% of Chase Management Ltd. Mr. DeMare currently serves as an officer and director of the following public companies: Kola Mining Corp., a base and precious metal exploration company, , and Tumi Resources Limited, a mineral exploration company, each of which trades on the OTC Bulletin Board. Mr. DeMare has served as a director of GeoPetro since March 2006. Mr. DeMare is a graduate of the University of British Columbia with a Bachelor’s degree in Commerce.

 

Jeffrey C. Friedman MD,.   Mr. Friedman, 56, has been actively employed in the medical profession for the past 28 years.  He attended the University of California at Berkeley where he majored in Economics and minored in French.  He subsequently received a medical degree from the University of Chicago Medical School.  He became a cosmetic and reconstructive surgeon attending the University of California at Davis, and received his subspecialty surgical training at the Oakland Naval Hospital.  After serving in the U.S. Navy for 6 years as a surgeon he started a private surgical practice in Lafayette, California.  He has been in practice there for 22 years.  Mr. Friedman has served as a director of GeoPetro since June 2008.

 

Recommendation of the Board of Directors

 

The Board of Directors recommends a vote FOR the election of each of the nominees for director presented in this proxy statement. Unless instructed to the contrary, the shares represented by the proxies will be voted for the election of the seven nominees named above.  Although it is anticipated that each nominee will be able to serve as a director, should any nominee become unavailable to serve, the persons acting under proxies in the enclosed proxy card will vote for such other person or persons as may be recommended by our Board of Directors, or if no such recommendation is given, in accordance with their judgment.

 

5

Table of Contents

 

CORPORATE GOVERNANCE

 

Board of Directors

 

David Anderson, Thomas Cunningham, Nick DeMare and Jeffrey Friedman, current directors, are independent as defined by the rules of the NYSE Amex. In addition, Kevin Delehanty, who served as a director through June 2008, was independent as defined by the rules of the NYSE Amex.  Stuart Doshi, David Creel and Chris Steinhauser, current directors, are not independent as defined by the rules of the NYSE Amex. Our Board of Directors is currently comprised of a majority of independent directors.

 

Committees of the Board of Directors

 

We have an Audit Committee of the Board of Directors which complies with the rules of the NYSE Amex and the SEC.  Our Audit Committee charter is available on our website, www.geopetro.com, under the investor relations section. The inclusion of our website address in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement.

 

Audit Committee

 

Our Audit Committee currently consists of three directors, Thomas Cunningham, Nick DeMare and David Anderson. Messrs. Cunningham, DeMare and Anderson are independent as defined by the rules of the NYSE Amex and the SEC. Each member of the Audit Committee meets the financial literacy and experience requirements of the SEC and NYSE Amex rules. Mr. Cunningham serves as the chairperson of the Audit Committee and Nick DeMare is an “audit committee financial expert” under applicable SEC rules.  Our Audit Committee operates pursuant to a written charter that satisfies applicable SEC and NYSE Amex rules.  Our Audit Committee charter is available on our website at http://www.geopetro.com.

 

Our Audit Committee charter requires that the Audit Committee oversee our corporate accounting and financial reporting processes. The primary duties of our Audit Committee are to, among other things:

 

·  evaluate our independent auditors’ qualifications, independence and performance;

 

·  determine the engagement and compensation of our independent auditors;

 

·  approve the retention of our independent auditors to perform any audit and permissible non-audit services;

 

·  monitor the rotation of partners of the independent auditors on our engagement team as required;

 

·  review our consolidated financial statements;

 

·  review our critical accounting policies;

 

·  meet with our management periodically to consider the adequacy of our internal controls and procedures for financial reporting;

 

·  establish procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters;

 

·  review on an ongoing basis and approve related party transactions;

 

·  prepare the reports required by the rules of the SEC to be included in our annual proxy statement;

 

·  discuss with our management and our independent auditors the results of our annual audit and the review of our quarterly consolidated financial statements.

 

Compensation Committee

 

We do not have a Compensation Committee and, as such, we do not have a Compensation Committee charter. The Board of Directors believes that it is in the best interest of the Company to permit all independent directors to fully participate in the compensation decisions for our officers including Stuart Doshi, our President and Chief Executive Officer, Chris Steinhauser, our Chief Financial Officer, and David Creel, our Vice President of Exploration, as well as our directors. In accordance with the rules of the NYSE Amex, the compensation of our Chief Executive Officer and all other officers are determined, or recommended to the Board of Directors for determination, by a majority of independent directors.

 

6

Table of Contents

 

The independent directors consider the input of Mr. Doshi in making their recommendations for Messrs. Steinhauser and Creel.  The independent directors’ duties include:

 

·  establishing overall employee compensation policies and recommending to our Board of Directors major compensation programs;

 

·  reviewing and approving the compensation of our corporate officers and directors, including salary, bonus awards and stock option grants;

 

·  administering our various employee benefit, pension and equity incentive programs;

 

·  reviewing executive officer and directors indemnification and insurance matters;

 

·  managing and reviewing employee loans; and

 

·  preparing a report on executive compensation for inclusion in our annual report and, as applicable, our proxy or information statement.

 

Our independent directors who participate in the consideration of executive officer and director compensation are David Anderson, Thomas Cunningham,  Nick DeMare and Jeffrey Friedman.  In establishing compensation for our executive officers and directors, we do not rely on independent compensation consultants to analyze or prepare formal surveys for us.  Our independent directors review executive compensation on an annual basis.  In establishing compensation to our executives, we strive to provide compensation that will:  (1) motivate and retain executives and reward performance; (2) encourage our long-term success; (3) encourage the long-term enhancement of shareholder value; and (4) encourage the application of prudent decision-making processes in an industry marked by volatility and high risk.

 

Nominating Committee

 

We do not have a Nominating Committee and, as such, we do not have a Nominating Committee charter. The Board of Directors believes that it is in the best interest of the Company to permit all independent directors to fully participate in the director nomination process. In accordance with the rules of the NYSE Amex, director nominees are selected, or recommended to the Board of Directors for selection, by a majority of independent directors. In addition, the independent directors’ duties include:

 

·  establishing standards for service on our Board of Directors and nominating guidelines and principles;

 

·  identifying individuals qualified to become members of our Board of Directors and recommending director candidates for election to our Board of Directors;

 

·  considering and making recommendations to our Board of Directors regarding its size and composition, committee composition and structure and procedures affecting directors;

 

·  establishing policies regarding the consideration of any director candidates recommended by our shareholders, and the procedures to be followed by shareholders in submitting such recommendations;

 

·  evaluating and reviewing the performance of existing directors; and

 

·  monitoring our corporate governance principles and practices and making recommendations to our Board of Directors regarding governance matters, including our articles of incorporation, bylaws and charters of our committees.

 

Our independent directors who participate in the consideration of director nominees are David Anderson, Thomas Cunningham,  Nick DeMare, and Jeffrey Friedman.  At an appropriate time prior to each annual meeting of shareholders at which directors are to be elected or reelected, and whenever there is otherwise a vacancy on the Board, the independent directors who participate in the consideration of director nominees will assess the qualifications and effectiveness of the current board members and, to the extent there is a need, shall actively seek replacement of additional individuals well-qualified and available to serve to become board members.  Members of management, the independent directors or any other member of the board may identify a need to add a new member to the board with specific criteria at any other time.  Shareholders of the Company may identify a potential director candidate in accordance with the procedures set forth below.  The independent directors may choose to hire an independent search firm to identify potential director candidates in those situations where particular qualifications are required or where existing contacts are not sufficient to identify an appropriate candidate.

 

7

Table of Contents

 

FEES PAID TO HEIN AND ASSOCIATES LLP

 

Hein & Associates LLP has acted as the Company’s independent registered public accounting firm  since 2002, and has been selected by the Audit Committee to conduct the audit of our consolidated financial statements as of and for the year ended December 31, 2009 and conduct an audit of our internal control over financial reporting as of December 31, 2009.  The following table lists the aggregate fees and costs billed by Hein & Associates LLP to the Company for the years ended December 31, 2008 and 2007:

 

		2008			2007
Audit fees (1)		$	335,000		$	195,000
Audit related fees (2)		6,000			0
Tax fees (3)		47,000			59,500
All other fees		—			—
		$	389,000		$	254,500

 

(1)        Audit fees consist of fees and expenses for professional services rendered in connection with the audit of our consolidated financial statements, and internal control over financial reporting as of December 31, 2008, quarterly reviews of our interim consolidated financial statements, and review of our registration statements.

 

(2)        Audit related fees consist of fees and expenses related to  professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements and consist primarily of consultations concerning financial accounting and reporting standards.

 

(3)        Tax fees consist of fees and expenses related to the preparation of federal and state tax returns, tax advice and planning and related compliance matters.

 

Policy on Audit Committee Pre-Approval

 

The Audit Committee is responsible for pre-approving the engagement of our independent auditors for audit or permissible non-audit services.  Audit Committee pre-approval of specific audit and non-audit services is not required if the engagement for the services is entered into pursuant to general pre-approval policies and procedures established by the Committee regarding GeoPetro’s engagement of the independent auditor, provided the policies and procedures are detailed as to the particular service, the Committee is informed of each service provided and such policies and procedures do not include delegation of the Committee’s responsibilities under the Exchange Act to the Company’s management.  The Committee may delegate to one or more designated members of the Committee the authority to grant pre-approvals, provided such approvals are presented to the Committee at a subsequent meeting.  Committee pre-approval of non-audit services (other than review and attest services) is not required if such services fall within available exceptions established by the U.S. Securities & Exchange Commission.  All of the services covered by the fees disclosed above were pre-approved by the Chairman of the Audit Committee.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The  following table sets forth certain information about the beneficial ownership of common shares as of April 30, 2009 by:

 

·       Each of our directors and director nominees;

 

·       Each of the named executive officers listed in the Summary Compensation table;

 

·       All of our directors and executive officers as a group; and

 

·       Each person known to us to be the beneficial owner of more than 5% of our outstanding common shares.

 

For purposes of the following table, a person is deemed to be the beneficial owner of securities that can be acquired by that person within 60 days from April 30, 2009 upon the exercise of warrants or options. Each beneficial owner’s percentage is determined by assuming that options and warrants that are held by that person regardless of price, but not those held by any other person, and which are exercisable within 60 days from April 30, 2009 have been exercised.

 

The information in the following table is based upon information supplied by officers, directors and principal shareholders. Except as otherwise noted below, and subject to applicable community property laws, the persons named have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Unless otherwise indicated, the address of the following shareholders is c/o GeoPetro Resources Company, One Maritime Plaza, Suite 700, San Francisco, CA 94111.

 

10

Table of Contents

 

GRANTS OF PLAN-BASED AWARDS

 

Stock Incentive and Option Plans

 

Effective as of September 10, 2001, the Board of Directors approved the 2001 Stock Incentive Plan (the “Stock Incentive Plan”), providing for awards under the terms and provisions of such plan of incentive stock options, nonqualified stock options, stock appreciation rights and restricted stock to our officers, directors, employees and consultants. The purpose of the Stock Incentive Plan was to attract, motivate, reward and retain personnel and provide incentive compensation through participation in our growth. The awards available under the Stock Incentive Plan were exercisable for up to 5,000,000 shares of our common stock.

 

In 2004, we implemented a new 2004 Stock Option and Appreciation Rights Plan (the “Stock Option Plan”) providing for awards of incentive stock options, non-qualified stock options and stock appreciation rights. The Stock Option Plan replaced the Stock Incentive Plan as to new award grants effective in 2004 or thereafter to our directors, officers, employees and consultants. Outstanding awards issued under the Stock Incentive Plan will continue to be outstanding in accordance with their terms and the terms of the Stock Incentive Plan, but will count toward the limits in the number of shares of common stock available to be issued under the Stock Option Plan, which is 5,000,000 common shares.

 

Awards to purchase 1,750,000 shares of our common stock were issued under the Stock Incentive Plan, and to date, awards to purchase 910,000 shares of our common stock have been issued under the Stock Option Plan.  At December 31, 2008,  shares remain available for issuance pursuant to award grants under the Stock Option Plan was 2,340,000 shares.

 

The Stock Option Plan is administered by the Board of Directors or a committee designated by the Board. The Board of Directors or committee designated by the Board determines the number of shares of common stock which may be purchased pursuant to an award grant, the exercise price, vesting schedule, expiration date, and all other terms and conditions of the award grant, subject to the terms of the Stock Option Plan.

 

The exercise price of stock options granted under the Stock Option Plan may not be less than 110% of the fair market value of our common stock on the date of grant. The maximum number of shares of common stock which may be reserved for issuance to insiders under the Stock Option Plan is 10% of our shares of common stock outstanding at the time of the grant, less any shares reserved for issuance to insiders under any other stock compensation arrangement. The maximum number of shares of common stock which may be issued to insiders under the Stock Option Plan is also subject to certain annual limits.

 

During 2008, the Company issued 820,000 stock options to named executive officers, directors and employees.  The Company did not grant any stock options, shares of stock or stock appreciation rights under any plan to any of its named executive officers, directors, or employees during 2007.  During 2006, the Company issued 150,000 stock options to named directors.

 

The following table sets forth information with respect to the options granted to the named executive officers under the Stock Option Plan and otherwise, as of December 31, 2008.

 

GRANTS OF PLAN-BASED AWARDS

 

Name and Principal Position		Grant Date		Estimated Future Payouts Under Equity Incentive Plan Awards		Exercised Price (1)			Grant Date Fair Value (2)
				Maximum(#)
Stuart J. Doshi		6/27/2008		275,000	(3)	$	4.28		$	596,097
David V. Creel		6/27/2008		75,000	(3)	$	4.28		162,572
J. Chris Steinhauser		6/27/2008		75,000	(3)	$	4.28		162,572

 

Notes:

 

(1)        Based on the closing price of our common stock on the NYSE Amex on June 26, 2008.

 

(2)        This column reflects the grant date fair value computed accordance with FAS 123R of the stock option grants in this table.  These award fair values have been determined based on the assumptions in Note 2 to our audited financial statements for the fiscal year ended December 31, 2008 included in our annual report on Form 10-K filed with the SEC on March 24, 2009.

 

(3)        Subject to continued employment, the stock options will vest 20% per year beginning June 26, 2009 and ending June 26, 2013. 

 

19

Table of Contents

 

Indebtedness of Directors and Officers

 

None of our directors or officers, nor any of their associates or affiliates, are or have been indebted to us, nor have any of the foregoing been the subject of a guarantee, support agreement, letter of credit or similar arrangement or understanding provided by us.

 

Potential Payments Upon Termination or Change in Control

 

Messrs. Doshi, Creel, and Steinhauser are parties to employment agreements which provide for payments upon the termination of their employment under certain circumstances and/or a change in control.

 

Mr. Doshi’s employment contract provides that in the event of a change of control, or if we do not renew Mr. Doshi’s agreement, if Mr. Doshi is terminated without cause, or if Mr. Doshi terminates his employment due to our uncured, material breach of his employment contract, he is entitled to receive:

 

(a)    in exchange for all of his vested stock options and vested restricted shares, such number of shares of common stock having a market value equal to the difference between (x) the aggregate total market value of all vested restricted shares and shares of common stock he would receive upon exercise of all vested stock options less (y) the aggregate total exercise price for all of his vested stock options; provided, however, that if the common stock to be delivered to Mr. Doshi upon such change of control or termination have not been registered so as to permit immediate public resale, Mr. Doshi shall instead receive a cash payment equal to the market value on the date of termination of all vested stock options and restricted shares without any discount for liquidity or minority position against cancellation of such options and restricted shares,

 

(b)    a cash payment equal to the greater of (i) his salary for the remainder of his term and the aggregate amount of his bonuses in respect of the last four fiscal years and (ii) four times his compensation in the current year and the aggregate amount of his bonuses for the last four fiscal years, and

 

(c)    an additional cash payment representing his employment benefits equal to 20% of the amount of salary he is entitled to receive under (b)(i) or (b)(ii) above, as applicable.

 

In addition, in the event of a change of control or termination without cause, all unvested options issued by us to Mr. Doshi will vest.

 

For purposes of Mr. Doshi’s employment contract, “cause” for termination is either:  a final felony conviction of Mr. Doshi; Mr. Doshi’s willful refusal, without proper legal cause, to perform his duties or responsibilities; or Mr. Doshi continuing to willfully engage in conduct, which he knows or should have reason to know may be materially injurious to the Company, after receipt of written notice from the Company.

 

In the event of a change of control, or if we do not renew Mr. Doshi’s agreement, Mr. Doshi is terminated without cause, or Mr. Doshi terminates his employment due to our uncured, material breach of his employment contract, and assuming the triggering event took place on the last business day of the Company’s last completed fiscal year, December 31, 2008, the potential post-employment benefits payable to Mr. Doshi are estimated as follows (estimates are based on the $0.73 closing market price of our common stock as quoted on the NYSE Amex on December 31, 2008):

 

a.                  With regards to outstanding commons stock options, since the December 31, 2008 market price was less than the option exercise price, no shares of the company’s commons stock would be required to be issued as noted in the following table:

 

Number of options		Exercise price			Market price			# of shares
1,000,000		$	2.10		$	0.73		—
275,000		$	4.28		$	0.73		—
								—

 

If the common stock to be delivered to him upon the triggering event have not been registered with the Securities and Exchange Commission so as to permit immediate resale, he shall instead receive an immediate cash payment equal to the market value of all vested stock options as noted in the following table:

 

Number of options		Exercise price			Market price			Market value of options
1,000,000		$	2.10		$	0.73		$	—
275,000		4.28			0.73			$	—

 

21

Table of Contents

 

b.      A cash payment equal to four times his 2008 salary of $435,657 and the aggregate amount of his bonuses of $17,000 for the last four fiscal years, for a total of $1,810,628, which is payable immediately.

 

c.      And an additional cash payment representing employment benefits equal to 20% of the amount calculated in paragraph (b) or $362,125, which is payable immediately.

 

Mr. Creel’s employment contract provides that he may be terminated by us without cause upon the payment to Mr. Creel of cash payments equal to the lesser of three months’ base salary or base salary during the remainder of the employment term, and, in the event of termination without cause, all unvested options issued by us to Mr. Creel will vest.

 

Upon termination of Mr. Creel without cause, and assuming the triggering event took place on the last business day of the Company’s last completed fiscal year, December 31, 2008, the potential post-employment benefits payable are estimated as follows:

 

a.      Mr. Creel would be entitled to receive $13,600 per month over a three month period for an aggregate amount of $40,800.

 

b.      In addition, all of Mr. Creel’s unvested options shall become immediately vested and exercisable. As of December 31, 2008, Mr. Creel has a total of 75,000 unvested options to purchase common stock at an exercise price of $4.28 and an expiration date of June 26, 2013.  As of December 31, 2008, Mr. Creel has a total of 150,000 vested options to purchase common stock at an exercise price of $2.10 and an expiration date of May 12, 2013.  The Company’s closing market price as quoted on the NYSE Amex on December 31, 2008 was $0.73 which was less than the exercise price of all the outstanding options and, therefore, at that date all of Mr. Creel’s stock options were out of the money.

 

Mr. Creel’s employment contract provides that he may terminate his employment with us upon an uncured, material breach by us, of his employment contract.  In such an event, his employment contract provides that he shall be entitled to receive his base salary for the remainder of his employment term, in accordance with our standard payroll practices.  In addition, all of his unvested options shall become immediately vested and exercisable.

 

Upon Mr. Creel’s termination of his employment agreement due to our uncured, material breach of his employment contract, and assuming the triggering event took place on the last day of the company’s last completed fiscal year, December 31, 2008, the potential post-employment benefits payable are estimated as follows:

 

(a)    Mr. Creel would be entitled to receive $13,600 per month until June 1, 2009; and

 

(b)   All of Mr. Creel’s unvested options shall become immediately vested and exercisable.  As of December 31, 2008, Mr. Creel has a total of 75,000 unvested options to purchase common stock at an exercise price of $4.28 and expiration date of June 26, 2013.  As of December 31, 2008, Mr. Creel has a total of 150,000 vested options to purchase common stock at an exercise price of $2.10 and an expiration date of May 12, 2013.  The company’s closing market price as quoted on the NYSE Amex on December 31, 2008 was $0.73, which was less than the exercise price of all the outstanding options and therefore, at that date, all of Mr. Creel’s stock options were out of the money.

 

Upon termination of Mr. Steinhauser without cause, and assuming the triggering event took place on the last business day of the Company’s last fiscal year, December 31, 2008, the potential post-employment benefits payable under our previous employment agreement with Mr. Steinhauser then in effect are estimated as follows:

 

a.      Mr. Steinhauser would be entitled to receive $14,500 per month over a three month period for an aggregate amount of $43,500.

 

22

Table of Contents

 

b.    The Company’s closing market price as quoted on the NYSE Amex on December 31, 2008 was $0.73 which was less than the exercise price of all the then outstanding options and, therefore, at that date all of Mr. Steinhauser’s then outstanding stock options were out of the money.

 

We entered into a new employment agreement with Mr. Steinhauser effective April 27, 2009, that currently expires on April 27, 2012.  Either we or Mr. Steinhauser may terminate the employment relationship at any time, subject to other provisions of the agreement.  Mr. Steinhauser serves as Chief Financial Officer and Vice President of Finance.  Mr. Steinhauser’s employment agreement entitles him to an annual salary of $225,000.  In addition, it provides that the exercise price of certain options to acquire 150,000 shares of common stock which were previously granted to Mr. Steinhauser on May 13, 2003 would be reduced from $2.10 per share to $1.00 per share.  The options are fully vested as of the date hereof and have an expiration date of May 12, 2013.  Certain other options granted to Mr. Steinhauser to acquire 75,000 shares of common stock at $4.28 per share on June 27, 2008 were cancelled.  Mr. Steinhauser’s employment agreement provides for the payment of salary for nine months if he is terminated by us for any reason other than for cause of if there is an occurrence of change in control.  All grants made under equity incentive plans shall vest in full immediately prior to the occurrence of a change of control or termination without cause.

 

We provide the foregoing post-employment payments in the event of termination and/or a change in control in order to attract and retain an appropriate caliber of talent for the position. We believe that our severance and change in control provisions are consistent with the provisions and benefit levels of other companies disclosing such provisions as reported in public SEC filings.

 

The payment and benefit levels to Messrs. Creel and Steinhauser were determined under the various circumstances that trigger post employment payments or provision of benefits were based on negotiations between them and us.

 

The termination provisions of Mr. Doshi’s employment contract were designed, in part, to impede and discourage a hostile takeover attempt and to protect the continuity of management. The termination provisions, including appropriate payment and benefit levels and the various circumstances that trigger payments or provision of benefits, were determined through negotiations between Mr. Doshi, our directors and representatives of Dundee Securities Corporation, the lead underwriter in connection with a sale of common shares we completed on March 30, 2006.

 

23