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. )
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Preliminary
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to § 240.14a-12
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Form,
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SMF
ENERGY CORPORATION
200
West Cypress Creek Road, Suite 400
Fort
Lauderdale, Florida 33309
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
be held on November 24, 2008
To
the
Stockholders of SMF Energy Corporation
NOTICE
IS HEREBY GIVEN that
an
annual meeting of Stockholders of SMF Energy Corporation (the “Company”) will be
held at the
Company’s Corporate Offices, 200 West Cypress Creek Rd., Suite 400, Fort
Lauderdale, Florida,
on
November 24, 2008 beginning at 9:00 a.m. local time. At the meeting,
stockholders will act on the following matters:
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To
approve an amendment to the Company’s Certificate of Incorporation to
effect a reverse stock split of the Company’s Common Stock at a specific
ratio to be determined by the Board of Directors in its discretion,
no
later than 12 months after the annual meeting, within a range of not
less than 2 to 1 and not more than 5 to 1;
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To
approve an amendment to the 2001 Director Stock Option Plan to increase
the amount of shares of Common Stock reserved for issuance from 350,000
to
500,000 (pre-split), or 70,000 to 100,000 (post the maximum 5 to
1 split);
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To
approve an amendment to the 2000 Stock Option Plan to increase the
amount
of shares of Common Stock reserved for issuance from 1,000,000 to
2,500,000 (pre-split), or 200,000 to 500,000 (post the maximum 5
to 1
split);
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To
elect seven (7) directors to the Company’s Board of Directors to serve
until the next Annual Meeting of Stockholders or until their successors
are elected;
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To
ratify the appointment of Grant Thornton LLP as our independent registered
public accounting firm for the current fiscal year;
and
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Any
other matters that may properly come before the
meeting.
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Only
stockholders of record at the close of business on September 25, 2008 are
entitled to receive notice of and to vote at the annual meeting or any
postponement or adjournment thereof.
Your
vote
is important. Whether you plan to attend the meeting or not, you may vote your
shares by marking, signing, dating and mailing the enclosed proxy card in the
envelope provided. If you hold your shares through your brokerage account or
in
“street name”, telephone or Internet voting may be available to you. Check your
proxy card for information. If you attend the meeting and prefer to vote in
person, you may do so even if you have already voted your shares. You may revoke
your proxy in the manner described in the proxy statement at any time before
it
has been voted at the meeting.
By
Order
of the Board of Directors
LOUISE
P. LUNGARO
Secretary
July
24,
2008
Fort
Lauderdale, Florida
SMF
ENERGY CORPORATION
200
West Cypress Creek Road, Suite 400
Fort
Lauderdale, Florida 33309
___________________________________
PROXY
STATEMENT
___________________________________
This
proxy statement contains information related to the annual meeting of
Stockholders to be held on November 24, 2008 at 9:00 a.m. local time, at the
Company’s Corporate Office, 200 West Cypress Creek Rd., Suite 400, Fort
Lauderdale, Florida, or at such other time and place to which the annual meeting
may be adjourned or postponed. The enclosed proxy is solicited by the Board
of
Directors of SMF Energy Corporation. The proxy materials relating to the annual
meeting are being mailed to stockholders entitled to vote at the meeting on
or
about September 8, 2008.
ABOUT
THE MEETING
Why
are we calling this annual meeting?
We
are
calling the annual meeting to seek the approval of our stockholders
to:
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Approve
an amendment to the Company’s Certificate of Incorporation to effect a
reverse stock split of the Company’s Common Stock at a specific ratio to
be determined by the Board of Directors in its discretion, within
12 months from the annual meeting and within a range of not less than
2 to 1 and not more than 5 to 1;
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Approve
an increase the amount of shares of Common Stock reserved for issuance
from 350,000 to 500,000 (pre-split), or 70,000 to 100,000 (post the
maximum 5 to 1 split);
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Approve
an increase the amount of shares of Common Stock reserved for issuance
from 1,000,000 to 2,500,000 (pre-split), or 200,000 to 500,000 (post
the
maximum 5 to 1 split);
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To
elect seven directors to the Company’s Board of Directors to serve until
the next Annual Meeting of Stockholders or until their successors
are
elected;
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To
ratify the appointment of Grant Thornton LLP as our independent registered
public accounting firm for the current fiscal year; and
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Any
other matters that may properly come before the
meeting.
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What
are the Board of Directors’ recommendations?
Our
Board
of Directors believes that (i) the approval of an amendment to the Company’s
Certificate of Incorporation in order to effect a reverse stock split of the
Company’s common stock within a range of not less than 2 to 1 and not more than
5 to 1; (ii) the approval of an amendment to
the
Company’s 2001 Director Stock Option Plan to increase the amount of shares
reserved for issuance from
350,000
to
500,000 (pre-split), or 70,000 to 100,000 (post the maximum 5 to 1 split);
(iii)
the approval of an amendment to the Company’s 2000 Stock Option Plan to increase
the amount of shares reserved for issuance from 1,000,000 to 2,500,000
(pre-split), or 200,000 to 500,000 (post the maximum 5 to 1 split); (iv) the
election of the nominated directors and (v) ratification of the appointment
of
Grant Thornton LLP as our independent registered public accounting firm are
advisable and in the best interests of the Company and its stockholders and
recommends that you vote FOR the amendment to the Certificate of Incorporation,
the amendment to the 2001 Director Stock Option Plan, the amendment to the
2000
Stock Option Plan, the nominees and the ratification of Grant Thornton
LLP.
Who
is entitled to vote at the meeting?
Only
stockholders of record at the close of business on the record date, September
25, 2008, are entitled to receive notice of the annual meeting and to vote
the
shares of common stock that they held on that date at the meeting, or any
postponement or adjournment of the meeting.
Holders
of our common stock (the “Common Stock”) are entitled to one vote per share on
each matter to be voted upon. Holders of our Series A Convertible Preferred
Stock (the “Series A Preferred Stock”) and Series B Convertible Preferred Stock
(the “Series B Preferred Stock,” and together with the Series A Preferred Stock,
the “Preferred Stock”) are also entitled
to one vote per share on each matter to be voted upon at the meeting. Except
as
may be required by law, the holders of Preferred Stock vote together with the
holders of Common Stock as a single class. For each of the actions described
herein, the holders of Preferred Stock will vote with the Common Stock as a
single class. The holders of our Common Stock and Preferred Stock are
collectively referred to in this proxy statement as the “Voting
Stockholders.”
As
of the
record date, we had [14,556,295] outstanding
shares of Common Stock, 4,587 outstanding shares of Series A Preferred Stock
and
1,985 outstanding shares of Series B Preferred Stock, for a total of
[14,562,867] Voting Stockholders. If and to the extent holders of our Preferred
Stock convert their shares of Preferred Stock to Common Stock before the record
date for the meeting, the number of shares held by Voting Stockholders would
increase, since each share of Preferred Stock is convertible into 1000 shares
of
Common Stock.
Who
can attend the meeting?
All
stockholders as of the record date, or their duly appointed proxies, may attend
the annual meeting. Please note that if you hold your shares in “street name”
(that is, through a broker or other nominee), to be admitted to the meeting,
you
will need to bring a copy of your proxy card as it was delivered to you by
your
brokerage firm. You cannot vote that proxy card at the meeting, however, since
your brokerage firm has the record ownership of your shares. If you want to
vote
your “street name” shares at the meeting, your brokerage firm can give you a
legal proxy that will give you the right to cast your vote in person at the
meeting. Otherwise, you can cast your vote through your brokerage firm by
returning your proxy and bringing a copy of it to the meeting for admittance.
What
constitutes a quorum?
The
presence at the annual meeting, in person or by proxy, of the holders of not
less than one-third of the shares of our Common Stock outstanding on the record
date will constitute a quorum for our annual meeting. Signed proxies received
but not voted and broker non-votes will be included in the calculation of the
number of shares considered to be present at the annual meeting.
How
do I vote?
You
may
vote your shares at the annual meeting either in person or by proxy. To vote
by
proxy, you should mark, date, sign and mail the enclosed proxy in the prepaid
envelope. Giving a proxy will not affect your right to vote your shares if
you
attend the annual meeting and want to vote in person. The shares represented
by
the proxies received in response to this solicitation and not properly revoked
will be voted at the annual meeting in accordance with the instructions therein.
On the matters coming before the annual meeting for which a choice has been
specified by a stockholder on the proxy card, the shares will be voted
accordingly. If you return your proxy, but do not mark your voting preference,
the individuals named as proxies will vote your shares FOR the matters submitted
for a vote at the meeting.
What
if I vote by proxy and then change my mind?
You
may
revoke your proxy at any time before it is exercised by:
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filing
with the Secretary of the Company a notice of
revocation;
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sending
in another duly executed proxy bearing a later date;
or
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attending
the meeting and casting your vote in
person.
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Your
latest vote will be the vote that is counted.
What
vote is required to approve the items of business?
The
proposal to approve an amendment to the Company’s Certificate of Incorporation
to effect a reverse stock split of the Common Stock requires the affirmative
vote of a majority of our Voting Stockholders entitled to vote at the meeting.
Approval of the amendments to the 2001 Director Stock Option Plan and the 2000
Stock Option Plan to increase the number of shares reserved for issuance under
each of those plans requires the affirmative vote of a majority of the Voting
Stockholders present, in person or by proxy, at the Meeting. For purposes of
electing directors, the nominees receiving the greatest number of votes from
our
Voting Stockholders represented and entitled to vote at the Annual Meeting
shall
be elected as directors. Ratification of Grant Thornton LLP as our independent
registered public accounting firm requires the affirmative vote of a majority
of
the shares of our Voting Stockholders that are present, in person or by proxy,
at the Meeting. Approval of any other matter that may properly come before
the
Annual Meeting requires the affirmative vote of the majority of our Voting
Stockholders represented in person or by
proxy
at
the Meeting (unless such other matter requires a greater vote under our Articles
of Incorporation or Delaware law).
How
are we soliciting this proxy?
We
are
soliciting this proxy on behalf of our Board of Directors and we will pay all
expenses associated therewith. In addition to solicitation by mail, officers,
directors and other employees of the Company may, without compensation other
than their regular compensation, solicit proxies by further mailing or personal
conversations, or by telephone, facsimile or other electronic means. We will
also, upon request, reimburse brokers and other persons holding stock in their
names, or in the names of nominees, for their reasonable out-of-pocket expenses
for forwarding proxy materials to the beneficial owners of the capital stock
and
to obtain proxies. If, for any reason, we have not obtained enough proxies
to
have a quorum at the meeting or enough votes to approve a particular matter
submitted for approval, we may engage the services of proxy solicitation firm
to
encourage persons to cast their votes, though we have no plans to do so at
this
time.
PROPOSAL
NO. 1
APPROVAL
OF AMENDMENT TO THE COMPANY’S CERTIFICATE OF
INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT
Introduction
The
Board
of Directors is recommending that the stockholders approve an amendment to
our
Certificate of Incorporation to effect a reverse stock split of outstanding
shares of our Common Stock at a ratio within a range of 2 to 1 to 5 to 1. If
this proposal is approved, the Board of Directors will have the authority to
decide, within 12 months from the annual meeting, whether to implement the
split and the exact ratio of the split.
If
a
reverse stock split is implemented by the Board of Directors, all of the issued
and outstanding shares of Common Stock will be reduced in accordance with the
exchange ratio selected by the Board. Following the reverse stock split, all
of
our other outstanding securities that are convertible into or exercisable for
shares of Common Stock, including convertible promissory notes and warrants,
will be convertible or exercisable at a proportionately higher price for a
lesser number of shares of Common Stock, as determined by the documents
governing such security. The reverse stock split, if implemented, would not
change the number of authorized shares of Common Stock or the par value of
our
Common Stock.
If
this
proposal is approved and the Board does implement a reverse stock split, it
will
become effective after the amendment to the Company’s Certificate of
Incorporation is filed with the Secretary of State of the State of Delaware
(the
“Effective Date”). The form of the Certificate of Amendment is attached hereto
as Appendix A. The following discussion is qualified in its entirety by the
full text of the Certificate of Amendment, which is hereby incorporated by
reference.
Purposes
of the Reverse Stock Split
The
principal purpose of the reverse stock split is to increase the market price
of
the Common Stock above $1.00 per share. The Common Stock is a listed security
on
the Nasdaq Capital Market and, in order for the Common Stock to continue to
be
quoted thereon, the Company must satisfy various listing standards established
by the Nasdaq Stock Market (“Nasdaq”), including but not limited to maintenance
of a closing bid price per share of $1.00 or more.
On
December 28, 2007, the Company received a notice from Nasdaq (the “Notice”) that
the bid price of its Common Stock had closed below the minimum $1.00 per share
requirement for 30 consecutive business days. The notice further provided that,
in accordance with Marketplace Rule 4310(c)(8)(D), the Company had 180 calendar
days, or until June 25, 2008, to regain compliance. Compliance would be achieved
if at any time before June 25, 2008, the bid price of the Common Stock closes
at
$1.00 or more per share for a minimum of 10 consecutive business days (or,
subject to Nasdaq’s discretion, as many as 20 consecutive trading days), in
which event Nasdaq would provide written notification that the Company is in
compliance with the minimum bid price requirement. The notice also stated that,
if the Company could not demonstrate compliance with the minimum bid price
requirement by June 25, 2008, but met all of the other Nasdaq Capital Market
initial listing criteria as set forth in Nasdaq Marketplace Rule 4310(c)(which
are more
rigorous
than the continued listing criteria), then the Company would be eligible for
an
additional 180 days to regain compliance.
On
June
26, 2008, the Company received a second notice from Nasdaq (the Letter”)
indicating that its common stock had not regained compliance with the $1 minimum
bid price continued listing requirement set forth in Marketplace Rule 4310(c)(4)
during the 180 day period. The Letter further stated that, because the Company
did not meet the Rule 4310(c) initial listing criteria on that date, it was
not
eligible for an additional 180 day compliance period from the Nasdaq Staff.
Accordingly, the Letter stated that, in the absence of an appeal of the Staff’s
determination to a Nasdaq Listing Qualifications Panel (the “Panel”), the
Company’s common stock was subject to delisting from Nasdaq at the opening of
business on July 8, 2008. On July 1, 2008, the Company filed its appeal of
the
Staff’s determination and requested a hearing before the Panel. The Company’s
appeal and hearing request stayed the delisting action pending the issuance
of a
final decision by the Panel. The hearing on the Company’s appeal has been
scheduled for August 14, 2008.
At
the
hearing, the Company intends to seek a temporary exception to the minimum bid
price requirement to allow time for the Company to complete the reverse stock
split, and for the reverse stock split to take effect. There can be no
assurance, however that the Panel will grant the Company’s request for continued
listing on this basis. Moreover, while the Company expects that such a reverse
stock split, once in effect, would increase the Company’s stock price above the
minimum bid price, there can be no assurance that the market price per
post-split share will either exceed or remain in excess of the $1.00 minimum
bid
price for the sustained period of time necessary to ensure long term compliance
with Marketplace Rule 4310(c)(4). The market price of our common stock may
be
affected by various other factors unrelated to the number of shares outstanding
after the reverse stock split, including our future performance and general
market conditions.
If
a
delisting were to occur, the Common Stock would likely trade in the
over-the-counter market on the National Association of Securities Dealers’ OTC
Bulletin Board (the “OTCBB”), which was established for trading the securities
of reporting companies that do not meet the Nasdaq listing requirements. The
OTCBB is generally considered less efficient than the Nasdaq Capital Market.
As
a result, it could be more difficult for an existing shareholder to sell shares
of the Common Stock. On the OTCBB, trading volumes are typically lower,
transactions can be delayed, and coverage of the Company by securities analysts
and news media, which is already limited, may be reduced. In turn, these factors
could result in lower prices for the Common Stock or larger “spreads” between
the “bid” and “ask” prices quoted by market makers for shares of the Common
Stock, either of which could reduce the prices available for sales of the Common
Stock by existing shareholders.
Delisting
from Nasdaq could also impair the Company’s ability to raise additional capital
through equity or debt financing since Nasdaq listed securities are typically
viewed as more liquid than securities that are not traded on a national
securities exchange. In addition, if delisting does cause lower prices for
the
Common Stock, it could then cause an increase in the ownership dilution to
stockholders when the Company issues equity securities in financing or other
transactions. The price at which the Company issues shares in such transactions
is generally based on or related to the market price of its Common Stock, so
a
decline in the market price of its Common Stock could
result
in
the need for the Company to issue a greater number of shares to raise a given
amount of funding or to acquire a given dollar value of goods or
services.
In
addition, if the Common Stock is not listed on the Nasdaq Capital Market, the
Company may become subject to Rule 15g-9 under the Securities and Exchange
Act
of 1934, as amended (the “Exchange Act”) because the Common Stock may be
classified as a “penny stock” under Exchange Act Rule 3a51-1. That rule imposes
additional sales practice requirements on broker-dealers who sell low-priced
securities to persons other than established customers and institutional
accredited investors. For transactions covered by this rule, a broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser’s written consent to the transaction prior to sale.
Consequently, the rule may affect the ability of broker-dealers to sell the
Common Stock and may affect the ability of holders to sell their shares of
Common Stock in the secondary market. Moreover, investors may be less interested
in purchasing low-priced securities because the brokerage commissions, as a
percentage of the total transaction value, tend to be higher for such
securities. Also, institutional investors will usually not invest in low-priced
securities (other than those which focus on small-capitalization companies
or
low-priced securities).
As
a
consequence of no longer having its shares listed on a national securities
exchange, the Company will no longer be able to use the SEC’s short form
registration forms, such as Form S-3, to register under the Securities Act
of
1933 the resale of Common Stock previously sold by the Company in unregistered
offerings or the Common Stock underlying warrants or convertible notes but
will
have to instead use the longer Form S-1. As a result, the registration of these
securities for resale will probably require more time and effort, which may
in
turn reduce the value of any Common Stock or other securities that are sold
in
unregistered offerings. The negative impact of long form registration has been
reduced, however, by recent SEC rule changes that permit most purchasers of
stock in unregistered offering to freely resell their securities six months
after the purchase under Rule 144.
While
there is no guarantee, the Board of Directors believes that the reverse stock
split, at the split ratio ultimately selected by the Board, will increase the
per share closing bid price of our Common Stock enough to ensure continued
compliance with the Nasdaq minimum bid price listing requirement and to generate
additional interest in the Company among investors. On the other hand, it is
possible that the closing bid price will not remain above $1.00 for the 10
to 20
trading days required by Nasdaq to determine that the Company has regained
compliance with the minimum bid price requirement. In addition, even if the
closing bid price does stay above $1.00 long enough for Nasdaq to make such
a
determination, if it subsequently falls below $1.00 for another 30 consecutive
trading days, the Company will once again receive a notice of noncompliance
from
Nasdaq and another 180 days to reestablish compliance with the $1.00 minimum
price standard. If this proposal passes and the Board does decide to effect
the
reverse stock split, the Board will consider these risks when it selects the
split ratio.
If
this
reverse stock split proposal passes, the Board of Directors may nevertheless
decide not to declare any reverse stock split at all. Under the proposal, the
Board is retaining this discretion for several reasons. First, the closing
bid
price of the Common Stock could go over $1.00 for 10 or 20 consecutive trading
days before the annual meeting of shareholders without the need for any reverse
stock split. Second, the closing bid price could be so low that a reverse stock
split could not assure a post-split price above $1.00. Finally, the Company
may
not otherwise meet
the
requirements for continued listing on the Nasdaq Capital Market. In particular,
Nasdaq Marketplace Rule 4310 provides that, for continued listing, the issuer
must maintain either
(A)
stockholders' equity of $2.5 million; or
(B)
market
value of listed securities of $35 million; or (C)
net
income from continuing operations of $500,000 in the most recently completed
fiscal year or in two of the last three most recently completed fiscal years.
Because (a) the market value of the Company’s common stock is currently less
than $10 million, (b) the Company did not have net income from operation in
the
last three fiscal years, and (c) because the Company’s stockholders’ equity was
below the $2.5 million minimum as of December 31, 2007, the Company received
notice in March of 2008 that it did not otherwise qualify for continued listing
on Nasdaq. While the Company subsequently raised additional equity capital
to
increase its stockholders’ equity above the $2.5 million level and continues to
meet that criterion for Nasdaq listing as of the date hereof, there is no
assurance that the Company will continue to meet the stockholders’ equity or
other Nasdaq listing requirements. If this reverse stock split proposal passes
but Nasdaq makes a final determination to delist the Common Stock on account
of
the stockholders’ equity or any other reason before a reverse stock split has
been declared by the Board, it is unlikely that the Board would declare any
reverse stock split.
In
any
event, the efficacy of a reverse stock split in maintaining compliance with
Nasdaq’s minimum bid price requirement is uncertain. While the short-term result
of a reverse stock split can be fairly predicted, the long-term consequences
are
less predictable. The price of the Common Stock is likely to be affected by
our
performance and by general market and economic conditions that cannot be
predicted or evaluated by the Board of Directors at this time. Accordingly,
even
if the reverse stock split is successful in reestablishing compliance with
Nasdaq’s minimum bid price requirement and we meet the stockholders’ equity and
other requirements needed to maintain our Nasdaq listing, there is no assurance
that the market value of the Common Stock will be greater after a reverse stock
split than it would be without ever effecting a reverse stock split.
Determination
of Reverse Stock Split Ratio
If
the
stockholders approve the proposal, the Board will be authorized to exercise
its
discretion as to whether to effect the reverse stock split, when to effect
it,
and what the split ratio should be. In making these determinations, the Board
of
Directors will consider a number of factors, including:
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the
historical and projected performance of our Common Stock and volume
level
before and after the reverse stock
split,
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prevailing
market conditions,
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general
economic and other related conditions prevailing in our industry
and in
the marketplace generally,
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the
projected impact of the selected reverse stock split ratio on trading
liquidity in our Common Stock and our ability to continue our Common
Stock’s listing on the Nasdaq Capital
Market,
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our
capitalization (including the number of shares of our Common Stock
issued
and outstanding),
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the
prevailing trading price for our Common Stock and the volume level
thereof, and
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potential
devaluation of our market capitalization as a result of a reverse
stock
split.
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The
proposal gives the discretion to select the reverse stock split ratio from
within a range to the Board of Directors, rather than proposing fixing a
specific ratio at this time, in order to give the Company the flexibility to
implement a reverse stock split at a ratio that reflects the Board’s
then-current assessment of the factors described above and to respond to other
developments that may be deemed relevant, when considering the appropriate
ratio. This flexibility is considered essential for the Board to be able to
react to changes in market conditions between the date of this proxy statement
and the date of the annual meeting, as well as the length of time that would
be
required for the Company to hold an additional annual meeting to approve the
final reverse stock split ratio.
Material
Effects of Proposed Reverse Stock Split
The
reverse stock split and amendment of our Certificate of Incorporation will
not
change the terms of the Common Stock. After the reverse stock split, the shares
of Common Stock will have the same voting rights and rights to dividends and
distributions, if any, and will be identical in all other respects to the Common
Stock now authorized. Each stockholder’s percentage ownership of the new Common
Stock will not be altered except for the effect of eliminating fractional
shares. The common stock issued pursuant to the reverse stock split will remain
fully paid and non-assessable. The reverse stock split is not intended as,
and
will not have the effect of, a “going private transaction” covered by Rule 13e-3
under the Exchange Act. Following the reverse stock split, the Company will
continue to file Forms 10-K, 10-Q, and 8-K and will remain subject to the
reporting requirements of the Exchange Act.
The
principal effects of the reverse stock split will be that:
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The
number of shares of Common Stock issued and outstanding will be reduced
from approximately 14,556,295 shares
to a range of approximately 2.911 million to 7.278 million
shares, depending on the reverse stock split ratio selected by the
Board
of Directors.
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·
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All
outstanding warrants entitling holders to purchase shares of Common
Stock
will enable such holders to purchase, upon exercise of their warrants,
the
number of shares of Common Stock as proportionately reduced by the
same
ratio as selected for the reverse stock split at an exercise price
proportionately increased by the same
ratio.
|
| |
·
|
All
outstanding convertible promissory notes entitling holders to convert
the
notes into shares of Common Stock will enable such holders to convert
the
number of shares of Common Stock as proportionately reduced by the
same
ratio as selected for the reverse stock split at a conversion price
proportionately increased by the same
ratio.
|
| |
·
|
All
outstanding shares of Series A Convertible Preferred Stock and Series
B
Convertible Preferred Stock (collectively, the “Preferred Stock”)
entitling holders to convert the notes into shares of Common Stock
will
enable such holders to convert the number of shares of Common Stock
as
proportionately reduced by the same ratio as selected for the reverse
stock split at a conversion price proportionately increased by the
same
ratio.
|
| |
·
|
All
of our equity incentive plans, which include the SMF Energy Corporation
Stock Option Plan, the SMF Energy Corporation 2000 Stock Option Plan
and
the SMF Energy Corporation 2001 Director Stock Option Plan, include
provisions requiring appropriate adjustments to the number of shares
of
Common Stock covered by the plans and stock options and other grants
under
those plans, as well as option exercise prices. Further, the number
of
shares of our Common Stock reserved for issuance (including the number
of
shares subject to automatic annual increase and the maximum number
of
shares that may be subject to options) under our existing stock option
plans and employee stock purchase plans will be reduced by the same
ratio
as selected for the reverse stock
split.
|
Stockholders
should recognize that if the reverse stock split is effected they will own
fewer
number of shares than they presently own, depending on the ratio of the reverse
stock split effected by the Board of Directors. In addition, the reverse stock
split will increase the number of stockholders of the Company who own odd-lots
(less than 100 shares). Stockholders who hold odd-lots may experience an
increase in the cost of selling their shares, as well as greater difficulty
in
effecting such sales.
Procedure
for Effecting Reverse Stock Split and Exchange of Stock
Certificates
If
our
stockholders approve this proposal, and the Board of Directors subsequently
elects to effect the reverse stock split, we will file the Certificate of
Amendment included as Appendix A to this proxy statement (as completed to
reflect the reverse stock split ratio as determined by the Board of Directors,
in its discretion, within the range of not less than 2 to 1 and not more than
5
to 1). The Certificate of Amendment will become effective when it is filed
with
the Secretary of State of the State of Delaware or such later time as is set
forth in the Certificate of Amendment.
Effect
on Beneficial Holders of Common Stock (i.e. stockholders who hold in “street
name”)
Upon
the
reverse stock split, the Company intends to treat shares of Common Stock held
by
stockholders in “street name,” through a bank, broker or other nominee, in the
same manner as registered stockholders whose shares of Common Stock are
registered in their names. Banks, brokers or other nominees will be instructed
to effect the reverse stock split for their beneficial holders holding the
Common Stock in “street name.” However, these banks, brokers or other nominees
may have different procedures than registered stockholders for processing the
reverse stock split. If a stockholder holds shares of Common Stock with a bank,
broker or other nominee and has any questions in this regard, stockholders
are
encouraged to contact their bank, broker or other nominee.
Effect
on Registered “Book-Entry” Holders of Common Stock (i.e. stockholders that are
registered on the transfer agent’s books and records but do not hold
certificates)
Some
of
the Company’s registered holders of Common Stock may hold some or all of their
shares electronically in book-entry form with the Company’s transfer agent.
These stockholders do not have stock certificates evidencing their ownership
of
the Common Stock. They are, however, provided with a statement reflecting the
number of shares registered in their accounts.
If
a
stockholder holds registered shares in book-entry form with the transfer agent,
no action needs to be taken to receive post-reverse stock split shares. If
a
stockholder is entitled to post-reverse stock split shares, a transaction
statement will automatically be sent to the stockholder’s address of record
indicating the number of shares of Common Stock held following the reverse
stock
split.
Effect
on Certificated Shares
Upon
the
reverse stock split, our transfer agent will act as our exchange agent and
will
act for holders of our Common Stock in implementing the exchange of their
certificates.
Commencing
on the effective date of a reverse stock split, stockholders holding shares
in
certificated form will be sent a transmittal letter from the Company’s transfer
agent for the Common Stock. The letter of transmittal will contain instructions
on how a stockholder should surrender his or her certificate(s) representing
shares of the Common Stock (“Old Certificates”) to the transfer agent in
exchange for certificates representing the appropriate number of whole shares
of
post-reverse stock split Common Stock (“New Certificates”). No New Certificates
will be issued to a stockholder until that stockholder has surrendered all
Old
Certificates, together with a properly completed and executed letter of
transmittal, to the transfer agent. No stockholder will be required to pay
a
transfer or other fee to exchange the stockholder’s Old Certificates.
Stockholders will then receive a New Certificate(s) representing the number
of
whole shares of Common Stock to which they are entitled as a result of the
reverse stock split. Until surrendered, the Company will deem outstanding Old
Certificates held by stockholders to be canceled and only to represent the
number of whole shares of post-reverse stock split Common Stock to which these
stockholders are entitled.
Any
Old
Certificates submitted for exchange, whether because of a sale, transfer or
other disposition of stock, will automatically be exchanged for New
Certificates. If an Old Certificate has a restrictive legend on the back of
the
Old Certificate(s), the New Certificate(s) will be issued with the same
restrictive legends that are on the back of the Old Certificate(s) unless that
legend is no longer effective because of the passage of time.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY
CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
No
Fractional Shares
No
fractional shares of Common Stock will be issued in connection with the reverse
stock split. If, as a result of the reverse stock split, a stockholder of record
would otherwise hold a fractional share, the number of shares to be received
by
the shareholder will be rounded up to the next highest number of shares.
Accounting
Matters
The
par
value of the shares of our Common Stock is not changing as a result of the
implementation of the reverse stock split. Our stated capital, which consists
of
the par value per share of our Common Stock multiplied by the aggregate number
of shares of our Common Stock issued and outstanding, will be reduced
proportionately on the effective date of the reverse stock split.
Correspondingly, our additional paid-in capital, which consists of the
difference between our stated capital and the aggregate amount paid to us upon
the issuance of all currently outstanding shares of our Common Stock, will
be
increased by a number equal to the decrease in stated capital. Further, net
loss
per share and book value per share will be increased as result of the reverse
stock split because there will be fewer shares of Common Stock
outstanding.
No
Dissenter’s Rights
Under
the
General Corporation Law of the State of Delaware, stockholders are not entitled
to dissenter’s rights with respect to the proposed amendment to the Certificate
of Incorporation to effect the reverse stock split, and the Company will not
independently provide stockholders with any such right.
Possible
Disadvantages of Reverse Stock Split
Even
though the Board of Directors believes that the potential advantages of a
reverse stock split outweigh any disadvantages that might result, the following
are some of the possible disadvantages of a reverse stock split:
| |
·
|
The
reduced number of shares of our Common Stock resulting from a reverse
stock split could adversely affect the liquidity of our Common
Stock.
|
| |
·
|
A
reverse stock split could result in a significant devaluation of
the
Company’s market capitalization and the trading price of its Common Stock,
on an actual or an as-adjusted basis, based on the experience of
other
companies that have effected reverse stock
splits.
|
| |
·
|
A
reverse stock split may leave certain stockholders with one or more
“odd
lots,” which are stock holdings in amounts of less than 100 shares of our
Common Stock. These odd lots may be more difficult to sell than shares
of
Common Stock in even multiples of 100.
|
| |
·
|
There
can be no assurance that the market price per new share of our Common
Stock after the reverse stock split will remain unchanged or increase
in
proportion to the reduction in the number of old shares of our Common
Stock outstanding before the reverse stock
split.
|
| |
·
|
Accordingly,
the total market capitalization of our Common Stock after the proposed
reverse stock split may be lower than the total market capitalization
before the proposed reverse stock split and, in the future, the market
price of our Common
|
Stock
following the reverse stock split may not exceed or remain higher than the
market price prior to the proposed reverse stock split.
| |
·
|
While
the Board of Directors believes that a higher stock price may help
generate investor interest, there can be no assurance that the reverse
stock split will result in a per-share price that will attract
institutional investors or investment funds or that such share price
will
satisfy the investing guidelines of institutional investors or investment
funds. As a result, the trading liquidity of our Common Stock may
not
necessarily improve.
|
| |
·
|
If
the reverse stock split is effected and the market price of our Common
Stock declines, the percentage decline may be greater than would
occur in
the absence of a reverse stock split. The market price of our Common
Stock
will, however, also be based on our performance and other factors,
which
are unrelated to the number of shares
outstanding.
|
Certain
U.S. Federal Income Tax Consequences of the Reverse Stock Split
The
following is a summary of certain U.S. federal income tax consequences relating
to the reverse stock split as of the date hereof. This summary addresses only
U.S. holders who hold their shares of Common Stock as a capital asset for U.S.
federal income tax purposes (i.e., generally, property held for
investment).
For
purposes of this summary, a “U.S. holder” means a beneficial owner of Common
Stock who is any of the following for U.S. federal income tax purposes: (i)
an
individual who is a citizen or resident of the United States, (ii) a corporation
created or organized in or under the laws of the United States, any state
thereof, or the District of Columbia, (iii) an estate the income of which is
subject to U.S. federal income taxation regardless of its source, or (iv) a
trust if (1) its administration is subject to the primary supervision of a
court
within the United States and one or more U.S. persons have the authority to
control all of its substantial decisions, or (2) it has a valid election in
effect under applicable U.S. Treasury regulations to be treated as a U.S.
person.
This
summary is based on interpretations of the Internal Revenue Code of 1986, as
amended (the “Code”), and regulations, rulings and judicial decisions as of the
date hereof. These authorities may be changed, perhaps retroactively, and may
adversely affect the U.S. federal income tax consequences described herein.
This
summary does not discuss all of the tax consequences that may be relevant to
particular stockholders or to stockholders subject to special treatment under
U.S. federal income tax laws.
Moreover,
this description does not address the U.S. federal estate and gift tax,
alternative minimum tax, state, local, foreign or other tax consequences of
the
reverse stock split.
Each
stockholder should consult their own tax adviser concerning the particular
U.S.
federal tax consequences of the reverse stock split, as well as any consequences
arising under the laws of any other taxing authority, such as any state, local
or foreign income tax consequences to which they may be subject.
To
ensure
compliance with Treasury Department Circular 230, each holder of Common Stock
is
hereby notified that: (a) any discussion of U.S. federal tax issues in this
proxy statement is not intended or written to be used, and cannot be used,
by
such holder for the purpose of avoiding penalties that may be imposed on such
holder under the Code; (b) any such discussion has been included by the Company
in furtherance of the reverse stock split on the terms described herein; and
(c)
each such holder should seek advice based on its particular circumstances from
an independent tax advisor.
Generally,
a reverse stock split will not result in the recognition of gain or loss by
a
U.S. holder for U.S. federal income tax purposes. The aggregate adjusted basis
of the post-reverse stock split shares will be the same as the aggregate
adjusted basis of the pre-reverse stock split shares. The holding period of
the
post-reverse stock split shares will include a U.S. holder’s holding periods for
the pre-reverse stock split shares.
The
Company will not recognize any gain or loss as a result of the reverse stock
split.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
AMENDING
THE COMPANY’S CERTIFICATE OF INCORPORATION
TO
EFFECT A REVERSE STOCK SPLIT
PROPOSAL
NO. 2
APPROVAL
OF AMENDMENT TO THE COMPANY’S 2001 DIRECTOR STOCK OPTION
PLAN
The
2001
Directors Stock Option Plan (the "2001 Plan") was adopted by the Board of
Directors on May 10, 2001 and approved by the shareholders on July 19, 2001.
The
2001 Plan was subsequently amended in December 2004. The
purpose of the 2001 Plan is to provide an additional incentive to attract and
retain qualified and competent directors whose efforts and judgment are
important to the success of the Company, through the encouragement of stock
ownership in the Company by such persons.
On
July
11, 2008, the Board of Directors approved an amendment to the 2001 Plan to
increase the number of shares reserved under the 2001 Plan. The Board
believes that an increase in the number of options available for grant is
important to permit the Company to continue to attract and retain directors
and
to encourage stock ownership by them. Accordingly, the shareholders are being
asked to increase
the number of shares of Common Stock reserved for issuance from 350,000 to
500,000 (pre-split), or from 70,000 to 100,000 (post the maximum 5 to 1
split).
Description
of the 2001 Director Stock Option Plan
The
following description is qualified in its entirety by reference to the 2001
Plan, which was filed as an exhibit to our post-effective amendment to our
Registration Statement on Form S-8, filed on June 7, 2007.
Administration
The
2001
Plan is presently administered by the Board of Directors (the "Board"). Subject
to the 2001 Plan, the Board has the authority to determine to whom stock options
may be granted, the time or times at which stock options are granted, the number
of shares covered by each such grant, the duration of any options and rights,
and any other terms and conditions relating to stock options. All decisions
and
interpretations made by the Board are binding and conclusive on all participants
in the 2001 Plan.
Securities
The
securities to be issued upon the exercise of stock options under the 2001 Plan
are shares of the Company's $.01 par value Common Stock. If any options granted
under the 2001 Plan are surrendered, or for any other reason cease to be
exercisable in whole or in part, the shares as to which the option ceases to
be
exercisable are available for options to be granted to the same or other
participants under the 2001 Plan.
Based
on
the closing price of the Company’s Common Stock on July 10, 2008 of $0.46, the
market value of 350,000 shares of Common Stock was $161,000.
Eligible
Directors
Only
directors of the Company who are not employees, full time or part time, of
the
Company are eligible to receive stock options under the 2001 Plan "Eligible
Directors".
As
of
July 10, 2008, the Company had six directors eligible to receive grants under
the 2001 Plan.
Stock
Options
Options
granted under the 2001 Plan are nonqualified stock options.
Option
Price and Duration
The
option price for nonqualified stock options may be less than the fair market
value of the stock on the business day immediately preceding the date of grant,
but in no event will the option price be less than the par value of the stock
on
the date of the grant.
"Fair
market value" means the closing price on the business day immediately preceding
the date of grant. For purposes of determining fair market value, the closing
price on any business day is (a) if there is an established market for the
Company's Common Stock on a national securities exchange, or if actual
transactions are otherwise reported on a consolidated transaction reporting
system, the last report sale price of the Common Stock on such exchange or
reporting system, (b) if quoted on Nasdaq or any similar system of automated
dissemination of quotations of securities prices in common use, the last
reported sale price on such system, or if sales prices are not reported, the
mean between the closing high bid and low asked quotations for such day as
reported in any newspaper of general circulation, or (c) if neither (a) or
(b)
is applicable, the mean between the high bid and low asked quotations as
reported by the National Quotation Bureau, Incorporated if at least two
securities dealers have inserted both bid and asked quotations for the Common
Stock on at least five of the ten preceding days.
Exercise
of Options and Payment for Stock
Options
are exercisable in accordance with the terms and conditions of the grant to
the
participant. The exercise price of options may be paid in cash or in shares
of
the Company's Common Stock (valued at the fair market value of the shares on
the
date of exercise) or by a combination thereof. The Board in its discretion
may
agree to lend money to a participant, guarantee a loan to a participant, or
otherwise assist a participant to obtain the cash necessary to exercise
all or a portion of an option granted under the 2001 Plan or to pay any tax
liability of the participant attributable to such exercise. If the exercise
price is paid in whole or in part with the participant's promissory note, such
note shall (i) provide for full recourse to the maker, (ii) be collateralized
by
the pledge of the shares that the participant purchases upon exercise of such
option, (iii) bear interest at the prime rate of the Company's principal lender,
and (iv) contain such other terms as the Board in its sole discretion shall
reasonably require. The Board may elect to permit a participant to effect a
net
exercise of an option without tendering shares of the Company's stock as payment
for the option. In such an event, the participant would be deemed to have paid
for
the
exercise of the option with shares of the Company's stock and would receive
from
the Company a number of shares equal to the difference between the shares that
would have been tendered and the number of options exercised. Also, the Board
may elect to permit a participant to effect a cashless exercise through a broker
acceptable to the Company and delivery to the Company by the broker of proceeds
from the sale of shares or a margin loan sufficient to pay the exercise price
and any applicable income taxes.
Nontransferability
of Options
Unless
the prior written consent of the Board is obtained and the transaction does
not
violate the requirements of Rule 16b-3 promulgated under the Securities Exchange
Act, no option shall be subject to alienation, assignment, pledge, charge or
other transfer other than by the participant by will or the laws of descent
and
distribution. Each option is exercisable during a participant's lifetime, or
in
the case of an option that has been assigned or transferred with the prior
written consent of the Board, only by the permitted assignee.
Termination
of Option Period
Unless
otherwise provided in any option agreement, the unexercised portion of any
option shall automatically and without notice terminate and become null and
void
at the time of the earliest to occur of the following: (i) immediately upon
the
removal of the optionee as a director for Cause
which,
for purposes of the 2001 Plan, shall mean the removal of the optionee as a
director by reason of any act by the optionee of (x) fraud or intentional
misrepresentation, (y) embezzlement, misappropriation, or conversion of assets
or opportunities of the Company or any subsidiary or (z) willful misconduct
or
gross negligence, (ii) immediately in the event that the optionee shall file
any
lawsuit
or arbitration claims against the Company or any subsidiary, or any of their
respective officers, directors or shareholders, other than a claim for
indemnification, whether by contract or under applicable law, or (iii) ten
years
from the date of grant of the option.
Amendment,
Suspension and Termination
The
Committee may at any time amend, suspend or terminate the 2001 Plan or any
option, provided, however, that, any amendment to the 2001 Plan shall be subject
to the approval of the Company's shareholders if such shareholder approval
is
required by any federal or state law or regulation (including, without
limitation, Rule 16b-3 or the rules of any stock exchange or automated quotation
system on which the Common Stock may then be listed or granted. Except as
otherwise provided by the 2001 Plan, no amendment, suspension or termination
of
the 2001 Plan or any option under the 2001 Plan shall substantially impair
the
rights or benefits of any optionee pursuant to any option previously granted
without the consent of the optionee.
2001
Plan Benefits
The
2001
Plan provides that Eligible Directors are granted options to purchase 20,000
shares of Common Stock on his or her initial election to the Board. In addition,
on the last day of each fiscal quarter of
the
Company, each then Eligible Director is granted options to purchase 1,500
shares. The Board of Directors also has the discretion to from time to time
grant additional options to the Eligible Directors under the 2001 Plan. Set
forth below in tabular form are the benefits or amounts received or to be
received by or allocated to each of the named persons or groups under the 2001
Plan during fiscal 2008.
|
Name
and Position
|
|
Dollar
Value ($)(1)
|
|
Number
of Shares
|
|
| |
|
|
|
|
|
|
Richard
E. Gathright,
Chairman
|
|
|
|
|
|
|
|
|
of
the Board, CEO and President
|
|
|
0
|
|
|
0
|
|
| |
|
|
|
|
|
|
|
|
Michael
S. Shore,
CFO,
|
|
|
|
|
|
|
|
|
Senior
V.P. and Treasurer
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Paul
C. Vinger,
Senior V.P.,
|
|
|
|
|
|
|
|
|
Corporate
Planning and Fleet Operations
|
|
|
0
|
|
|
0
|
|
| |
|
|
|
|
|
|
|
|
E.
Wayne Wetzel,
|
|
|
|
|
|
|
|
|
Senior
V.P., Lubricants
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Robert
W. Beard,
Senior V.P.,
|
|
|
|
|
|
|
|
|
Marketing
& Sales and
Investor Relations Officer
|
|
|
0
|
|
|
0
|
|
| |
|
|
|
|
|
|
|
|
Timothy
E. Shaw,
Senior V.P.,
|
|
|
|
|
|
|
|
|
Information
Services & Administration
and
Chief Information Officer
|
|
|
0
|
|
|
0
|
|
| |
|
|
|
|
|
|
|
|
All
executive officers, as a group
|
|
|
0
|
|
|
0
|
|
| |
|
|
|
|
|
|
|
|
All
directors who are not executive officers, as a group
|
|
|
29,610
|
|
|
33,000
|
|
| |
|
|
|
|
|
|
|
|
All
employees who are not executive officers as a group
|
|
|
0
|
|
|
0
|
|
| |
|
|
|
|
|
|
|
| (1) |
All
options are granted at not less than the fair market value on the
date of
grant. The dollar value to the grantee is solely dependent on the
increase
in the stock price subsequent to the date of
grant.
|
Federal
Income Tax Consequences
NONQUALIFIED
OPTIONS. Nonqualified options are taxed in accordance with Section 83 of the
Code and the Regulations issued thereunder. The following general rules are
applicable to United States holders of such options and to the Company for
Federal income tax purposes under existing law:
| |
i.
|
The
optionee does not realize any taxable income upon the grant of
nonqualified option, and the Company is not allowed a business expense
deduction by reason of such
grant.
|
|
|
ii. |
The
optionee will recognize ordinary compensation income at the time
of
exercise of a nonqualified option in an amount equal to the excess,
if
any, of the fair market value of the shares on the date of exercise
over
the exercise price.
|
| |
iii.
|
When
the optionee sells the shares, he or she will recognize a capital
gain or
loss in an amount equal to the difference between the amount realized
upon
the sale of the shares and his or her basis in the shares (i.e.,
the
exercise price plus the amount taxed to the optionee as compensation
income). If the optionee holds the shares for longer than one year,
this
gain or loss will be a long-term capital gain or
loss.
|
| |
iv.
|
In
general, the Company will be entitled to a tax deduction in the year
in
which compensation income is recognized by the
optionee.
|
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE
AMENDMENT TO THE COMPANY’S 2001 DIRECTOR STOCK OPTION PLAN
PROPOSAL
3
APPROVAL
OF AMENDMENT TO THE COMPANY’S 2000 STOCK OPTION PLAN
The
2000
Stock Option Plan (the “2000 Plan”) was adopted by the Board of Directors on
December 21, 2000 and approved by the shareholders on February 28, 2001. The
purpose of the 2000 Plan is to provide an additional incentive to attract and
retain qualified competent persons who provide services and upon whose efforts
and judgment our success is largely dependent, through the encouragement of
ownership of our stock by such persons.
On
July
11, 2008, the Board of Directors voted to submit to the Company’s shareholders a
proposed amendment to the 2000 Plan to increase the number of shares reserved
under the 2000 Plan and to eliminate the annual automatic 10% increase in the
number of shares available for issuance. The Board
believes an increase in the number of options available for grant is important
to permit the Company to continue to attract and retain employees and to
encourage stock ownership by them. In
connection with the increase in reserved shares, the Board also desires to
remove from the 2000 Plan Section 3(b), which provides as follows:
“The
number of Shares available for issuance under the Plan shall automatically
increase on the first trading day of each calendar year during the term of
the
Plan, beginning with the 2002 calendar year, by an amount equal to ten percent
(10%) of the total Shares subject to the Plan as of the last trading day of
the
immediately preceding calendar year. No incentive Stock Options may be granted
on the basis of the additional Shares resulting from such annual
increases.”
Through
these annual increases, the 1,000,000 shares originally reserved for issuance
has currently increased to 1,939,853 and will continue to increase accordingly
in subsequent years. Instead of providing for subsequent annual increases,
the
Company desires to increase the reserved shares to 2,500,000 and eliminate
Section 3(b) from the 2000 Plan.
Accordingly,
the shareholders are being asked to increase the number of shares reserved
under
the 2000 Plan from 1,000,000
to 2,500,000 (pre-split), or 200,000 to 500,000 (post the maximum 5 to 1 split)
and to remove Section 3(b) from the 2000 Plan.
Description
of the 2000 Stock Option Plan
The
following description is qualified in its entirety by reference to the 2000
Plan, which was filed as an exhibit to our post-effective amendment to our
Registration Statement on Form S-8, filed on June 6, 2007.
Administration
The
2000
Plan provides that it shall be administered by our Board or a committee
appointed by the Board (the "Committee") which shall be composed of two or
more
directors all of whom shall be "outside directors" (as defined in the 2000
Plan)
in compliance with Rule 16b-3 of
the
Exchange Act and Section 162(m) of the tax code (although Rule 16b-3 also may
be
complied with if the option grants
are approved by the board of directors).
The
Committee or the Board, in its sole discretion, determines the terms of the
Options. In addition, the Committee or the Board has full power and authority
to
construe and interpret the 2000 Plan, and the acts of the Committee or the
Board
are final, conclusive and binding on all interested parties, including our
company, shareholders, officers and employees, recipients of grants under
the
2000
Plan, and all persons or entities claiming by or through such
persons.
Prior
to
the effectiveness of the Amendment, an aggregate of 1,000,000 shares of common
stock was reserved for issuance upon the exercise of Options granted under
the
2000 Plan. Based
on
the closing price of the Company’s Common Stock on July 10, 2008 of $0.46, the
market value of 1,000,000 shares of Common Stock was $460,000. The
maximum number of shares of common stock to which Options may be granted to
any
one individual under the 2000 Plan is 750,000. The shares acquired upon exercise
of Options granted under the 2000 Plan will be authorized and issued shares
of
common stock. Our shareholders will not have any preemptive rights to purchase
or subscribe for any common stock by reason of the reservation and issuance
of
common stock under the 2000 Plan. If any option granted under the 2000 Plan
should expire or terminate for any reason other than having been exercised
in
full, the unpurchased shares subject to that option will again be available
for
purposes of the 2000 Plan.
Terms
and Conditions
All
Options granted under the 2000 Plan must be evidenced by a written agreement
between us and the grantee. The agreement will contain such terms and conditions
as the committee or the board of directors shall prescribe, consistent with
the
2000 Plan, including, without limitation, the exercise price, term and any
restrictions on the exercisability of the Options granted.
For
any
Option granted under the 2000 Plan, the exercise price per share of common
stock
may be any price determined by the Committee or the Board; however, the exercise
price per share of any Incentive Stock Option may not be less than the Fair
Market Value of the common stock on the date such Incentive Stock Option is
granted. For purposes of the 2000 Plan, the "Fair Market Value" on any date
of
reference is deemed to be the closing price of common stock on the business
day
immediately preceding such date, unless the committee or the board of directors
in its sole discretion determines otherwise in a fair and uniform manner. For
this purpose, the closing price of common stock on any business day is (i)
if
the common stock is listed or admitted for trading on any United States national
securities exchange, or if actual transactions are otherwise reported on a
consolidated transaction reporting system, the last reported sale price of
common stock on such exchange or reporting system, as reported in any newspaper
of general circulation; (ii) if common stock is quoted on the National
Association of Securities Dealers Automated Quotations System ("NASDAQ"), or
any
similar system of automated dissemination of quotations of securities prices
in
common use, the mean between the closing high bid and low asked quotations
for
such day of common stock on such system; or (iii) if neither clause (i) nor
(ii)
is applicable, the mean between the high bid and low asked quotations for common
stock as reported by the National Quotations
Bureau,
Incorporated if at least two securities dealers have inserted both bid and
asked
quotations for common stock on at least 5 of the 10 preceding days.
The
Committee or the Board may permit the exercise price of an Option to be paid
for
in cash, by certified or official bank check or personal check, by money order,
with already owned shares of common stock that have been held by the optionee
for at least six (6) months (or such other shares as we determine will not
cause
us to recognize for financial accounting purposes a charge for compensation
expense), the withholding of shares of common stock issuable upon exercise
of
the Option, by delivery of a properly executed exercise notice together with
such documentation as shall be required by the Committee or the Board of
Directors (or, if applicable, the broker) to effect a cashless exercise, or
a
combination of the above. If paid in whole or in part with shares of already
owned common stock, the value of the shares surrendered is deemed to be their
Fair Market Value on the date the Option is exercised. The 2000 Plan also
authorizes us to lend money to Optionee, guarantee a loan to Optionee, or
otherwise assist Optionee in obtaining the cash necessary to exercise all or
a
portion of the Option granted thereunder or to pay any of Optionee's tax
liability attributable to such exercise. If the exercise price is paid in whole
or part with the Optionee's promissory note, such note shall (i) provide for
full recourse to the maker, (ii) be collateralized by the pledge of the shares
that the Optionee purchases upon exercise of such Option, (iii) bear interest
at
the prime rate of our principal lender or such other rate as the board of
directors shall determine, and (iv) contain such other terms as the board of
directors in its sole discretion shall reasonably require.
The
use
of already owned shares of common stock applies to payment for the exercise
of
an option in a single transaction and to the "pyramiding" of already owned
shares in successive, simultaneous Option exercises. In general, pyramiding
permits an Option holder to start with as little as one share of common stock
and exercise an entire Option to the extent then exercisable (no matter
what the number of shares subject thereto). By utilizing already owned shares
of
common stock, no cash (except for fractional share adjustments) is needed to
exercise an Option. Consequently, the optionee would receive common stock equal
in value to the spread between the fair market value of the shares subject
to
the Option and the exercise price of such Option.
No
Incentive Stock Option, and unless the prior written consent of the Committee
or
the Board is obtained (which consent may be withheld for any reason) and the
transaction does not violate the requirements of Rule 16b-3 of the Exchange
Act,
no non-qualified stock option granted under the 2000 Plan is assignable or
transferable, other than by will or by the laws of descent and distribution.
During the lifetime of the optionee, an Option is exercisable only by him or
her, or in the case of a non-qualified stock option, by his or her permitted
assignee. The expiration date of an Option under the 2000 Plan will be
determined by the Committee or the Board at the time of grant, but in no event
may such an Option be exercisable after 10 years from the date of grant. An
Option may be exercised at any time or from time to time or only after a period
of time in installments, as the committee or the board of directors determines.
The Committee or the Board may, in its sole discretion, accelerate the date
on
which any Option may be exercised. Each outstanding Option granted under the
2000 Plan may become immediately fully exercisable in the event of certain
transactions, including certain changes in control, certain mergers and
reorganizations, and certain dispositions of substantially all of our
assets.
Unless
otherwise provided in the Option agreement, the unexercised portion of any
Option granted under the 2000 Plan shall automatically be terminated (a) three
months after the date on which the optionee's employment or service is
terminated for any reason other than (i) Cause (as defined in the 2000 Plan),
(ii) mental or physical disability, or (iii) death; (b) immediately upon the
termination of the optionee's employment or service for Cause; (c) one year
after the date on which the optionee's employment or service is terminated
by
reason of mental or physical disability; or (d) one year after the date on
which
the optionee's employment or service is terminated by reason of optionee's
death, or if later, three months after the date of optionee's death if death
occurs during the one year period following the termination of the optionee's
employment by reason of mental or physical disability.
To
prevent dilution of the rights of the optionee, the 2000 Plan provides for
appropriate adjustment of the number of shares for which Options may be granted,
the number of shares subject to outstanding Options and the exercise price
of
outstanding Options, in the event of any increase or decrease in the number
of
issued and outstanding shares of our capital stock resulting from a stock
dividend, a recapitalization or other capital adjustment. The Committee or
the
Board has discretion to make appropriate antidilution adjustments to outstanding
Options in the event of a merger, consolidation or other reorganization of
or a
sale or other disposition of substantially all of our
assets.
Amendment,
Suspension and Termination
The
2000
Plan will expire on December 20, 2010, and any Option outstanding on such date
will remain outstanding until it expires or is exercised. The Committee or
the
Board may amend, suspend or terminate the 2000 Plan or any Option at any time,
provided that such amendment shall be subject to the approval of the
shareholders if such shareholder approval is required by any federal or state
law or regulation (including, without limitation, Rule 16b-3 or to comply with
Section 162(m) of the tax code) or the rules of any stock exchange or automated
quotation system on which the common stock may then be listed or granted. In
addition, no amendment, suspension or termination shall substantially impair
the
rights or benefits of Optionee, pursuant to any Option previously granted,
without the consent of the Optionee.
Federal
Income Tax Consequences
The
2000
Plan is not qualified under the provisions of Section 401(a) of the tax code,
and is not subject to any of the provisions of the Employee Retirement Income
Security Act of 1974, as amended.
Nonqualified
Stock Options. On exercise of a nonqualified stock option granted under the
2000
Plan, an optionee will recognize ordinary income equal to the excess, if any,
of
the fair market value on the date of exercise of the shares of common stock
acquired on exercise of the Option over the exercise price and that income
will
be subject to the withholding of Federal income tax. The optionee's tax basis
in
those shares will be equal to their fair market value on the date of exercise
of
the Option, and his holding period for those shares will begin on that
date.
If
an
optionee pays for shares of common stock on exercise of an Option by delivering
shares of our common stock, the optionee will not recognize gain or loss on
the
shares delivered, even if their fair market value at the time of exercise
differs from the optionee's tax basis in them. The Optionee, however, otherwise
will be taxed on the exercise of the Option in the manner described above as
if
he had paid the exercise price in cash. If a separate identifiable stock
certificate is issued for that number of shares equal to the number of shares
delivered on exercise of the Option, the optionee's tax basis in the shares
represented by that certificate will be equal to his tax basis in the shares
delivered, and his holding period for those shares will include his holding
period for the shares delivered. The optionee's tax basis and holding period
for
the additional shares received on exercise of the Option will be the same as
if
the optionee had exercised the Option solely in exchange for cash.
We
will
be entitled to a deduction for Federal income tax purposes equal to the amount
of ordinary income taxable to the optionee, provided that amount constitutes
an
ordinary and necessary business expense for us and is reasonable in amount,
and
either the employee includes that amount in income or we timely satisfy our
reporting requirements with respect to that amount.
Incentive
Stock Options. The 2000 Plan provides for the grant of stock options that
qualify as "incentive stock options" as defined in Section 422 of the tax code.
Under the tax code, the optionee generally is not subject to tax upon the grant
or exercise of an incentive stock option. In addition, if the optionee holds
a
share received on exercise of an incentive stock option for at least two years
from the date the Option was granted and at least one year from the date the
Option was exercised (the "Required Holding Period"), the difference, if any,
between the amount realized on a sale or other taxable disposition of that
share
and the holder's tax basis in that share will be
long-term
capital gain or loss.
If,
however, an optionee disposes of a share acquired on exercise of an incentive
stock option before the end of the Required Holding Period (a "Disqualifying
Disposition"), the optionee generally will recognize ordinary income in the
year
of the Disqualifying Disposition equal to the excess, if any, of the fair market
value of the share on the date the incentive stock option was exercised over
the
exercise price. If, however, the Disqualifying Disposition is a sale or exchange
on which a loss, if realized, would be recognized for Federal income tax
purposes, and if the sales proceeds are less than the fair market value of
the
share on the date of exercise of the Option, the amount of ordinary income
recognized by the optionee will not exceed the gain, if any, realized on the
sale. If the amount realized on a Disqualifying Disposition exceeds the fair
market value of the share on the date of exercise of the Option, that excess
will be short-term or long-term capital gain, depending on whether the holding
period for the share exceeds one year.
An
optionee who exercises an incentive stock option by delivering shares of common
stock acquired previously pursuant to the exercise of an incentive stock option
before the expiration of the Required Holding Period for those shares, it is
treated as if the Optionee made a Disqualifying Disposition of those shares.
This rule prevents "pyramiding" the exercise of an incentive stock option (that
is, exercising an incentive stock option for one share and using that share,
and
others so acquired, to exercise successive incentive stock options) without
the
imposition of current income tax.
For
purposes of the alternative minimum tax, the amount by which the fair market
value of a share of common stock acquired on exercise of an incentive stock
option exceeds the exercise price of that Option generally will be an adjustment
included in the optionee's alternative minimum taxable income for the year
in
which the Option is exercised. If, however, there is a Disqualifying Disposition
of the share in the year in which the Option is exercised, there will be no
adjustment with respect to that share. If there is a Disqualifying Disposition
in a later year, no income with respect to the Disqualifying Disposition is
included in the optionee's alternative minimum taxable income for that year.
In
computing alternative minimum taxable income, the tax basis of a share acquired
on exercise of an incentive stock option is increased by the amount of the
adjustment taken into account with respect to that share for alternative minimum
tax purposes in the year the Option is exercised.
We
are
not allowed an income tax deduction with respect to the grant or exercise of
an
incentive stock option or the disposition of a share acquired on exercise of
an
incentive stock option after the Required Holding Period. However, if there
is a
Disqualifying Disposition of a share, we are allowed a deduction in an amount
equal to the ordinary income included in income by the optionee, provided that
amount constitutes an ordinary and necessary business expense for us and is
reasonable in amount, and either the employee includes that amount in income
or
we timely satisfy our reporting requirements with respect to that
amount.
Section
162 Limitations. The Omnibus Budget Reconciliation Act of 2003 added Section
162(m) to the tax code, which generally disallows a public company's tax
deduction for compensation to covered employees in excess of $1 million in
any
tax year beginning on or after January 1, 2004. Compensation that qualifies
as
"performance-based compensation" is excluded from the $1 million deductibility
cap, and therefore remains fully deductible by the company that pays
it.
We intend that Options granted to employees whom the committee expects to be
covered employees at the time a deduction arises in connection with such
Options, will qualify as such "performance-based compensation," so that such
Options will not be subject to the Section 162(m) deductibility cap of $1
million. Future changes in Section 162(m) or the regulations thereunder may
adversely
affect our ability to ensure that Options under the employee 2000 Plan will
qualify as "performance-based compensation" that is fully deductible by us
under
Section 162(m).
Importance
of Consulting Tax Adviser. The information set forth above is a summary only
and
does not purport to be complete. In addition, the information is based upon
current Federal income tax rules and therefore is subject to change when those
rules change. Moreover, because the
tax
consequences to any optionee may depend on his particular situation, each
optionee should consult his tax adviser as to the Federal, state, local and
other tax consequences of the grant or exercise of an Option or the disposition
of common stock acquired on exercise of an Option.
2000
Plan Benefits
Set
forth
below in tabular form are the benefits or amounts received or to be received
by
or allocated to each of the named persons or groups under the 2000 Plan during
fiscal 2008.
|
Name
and Position
|
|
Dollar
Value ($)(1)
|
|
Number
of Shares
|
|
| |
|
|
|
|
|
|
Richard
E. Gathright,
Chairman
|
|
|
|
|
|
|
|
|
0f
the Board, CEO and President
|
|
|
96,000
|
|
|
75,000
|
|
| |
|
|
|
|
|
|
|
|
Michael
S. Shore,
CFO,
|
|
|
|
|
|
|
|
|
Senior
V.P. and Treasurer
|
|
|
51,200
|
|
|
40,000
|
|
| |
|
|
|
|
|
|
|
|
Paul
C. Vinger,
Senior V.P.,
|
|
|
|
|
|
|
|
|
Corporate
Planning and Fleet Operations
|
|
|
51,200
|
|
|
40,000
|
|
| |
|
|
|
|
|
|
|
|
E.
Wayne Wetzel,
|
|
|
|
|
|
|
|
|
Senior
V.P., Lubricants
|
|
|
0
|
|
|
0
|
|
| |
|
|
|
|
|
|
|
|
Robert
W. Beard,
Senior V.P.,
|
|
|
|
|
|
|
|
|
Marketing
& Sales and
Investor Relations Officer
|
|
|
12,800
|
|
|
10,000
|
|
| |
|
|
|
|
|
|
|
|
Timothy
E. Shaw,
Senior V.P.,
|
|
|
|
|
|
|
|
|
Information
Services & Administration
and
Chief Information Officer
|
|
|
12,800
|
|
|
10,000
|
|
| |
|
|
|
|
|
|
|
|
All
executive officers, as a group
|
|
|
224,000
|
|
|
175,000
|
|
| |
|
|
|
|
|
|
|
|
All
directors who are not executive officers, as a group
|
|
|
1,800
|
|
|
3,000
|
|
| |
|
|
|
|
|
|
|
|
All
employees who are not executive officers as a group
|
|
|
136,390
|
|
|
108,000
|
|
| |
|
|
|
|
|
|
|
| (1) |
All
options are granted at not less than the fair market value on the
date of
grant. The dollar value to the grantee is solely dependent on the
increase
in the stock price subsequent to the date of
grant.
|
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE
AMENDMENT TO THE COMPANY’S 2000 STOCK OPTION PLAN
PROPOSAL
4
ELECTION
OF SEVEN INDIVIDUALS TO THE BOARD OF DIRECTORS
Nominees
The
Board
of Directors has fixed at seven the number of directors that will constitute
the
Board of Directors for the ensuing year. Each director elected at the Annual
Meeting will serve for a term expiring at the 2008 Annual Meeting of
Stockholders, or until his successor has been duly elected and
qualified. Wendell
R. Beard, Richard E. Gathright, Steven R. Goldberg, Nat Moore, Larry S. Mulkey,
C. Rodney O’Connor and Robert S. Picow, each of whom is an incumbent director,
have been nominated to be elected at the Annual Meeting by the Voting
Stockholders and proxies will be voted for such persons absent contrary
instructions.
Our
Board
of Directors has no reason to believe that any nominee will refuse to act or
be
unable to accept election; however, in the event that a nominee for a
directorship is unable or unwilling to accept election or if any other
unforeseen contingencies should arise, it is intended that proxies will be
voted
for the remaining nominees and for such other person as may be designated by
the
Board of Directors, unless it is directed by a proxy to do
otherwise.
Each
of
the nominees for election as a director is a current member of our Board of
Directors. Mr. O’Connor has served as a director since 1999, Messrs. Beard,
Gathright and Picow have served as directors since 2001, Mr. Moore has served
as
a director since 2006, Mr. Mulkey has served as a director since 2002, and
Mr.
Goldberg has served as a director since 2005.
The
nominees receiving the greatest number of votes from the Voting Stockholders
that are entitled to vote at the Annual Meeting shall be elected as
directors.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE
ELECTION OF EACH OF THE SEVEN INDIVIDUALS TO THE
BOARD
OF DIRECTORS
PROPOSAL
5
RATIFICATION
OF SELECTION OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
independent registered public accounting firm of Grant Thornton LLP has
been engaged by the Audit Committee to perform the audit of the
consolidated financial statements of the Company for the year ended June 30,
2008. The Audit Committee of the Company’s Board of Directors has also
determined to engage Grant Thornton LLP as the Company’s independent accountants
for the year ending June 30, 2009 and to audit the Company’s financial
statements for that year. At the direction of the Board of Directors, this
appointment is being presented to the stockholders for ratification or rejection
at the Annual Meeting. If the stockholders do not ratify the appointment of
Grant Thornton LLP, the Audit Committee will reconsider its selection of Grant
Thornton LLP to serve as our independent registered public accounting firm
and
will make another proposal to the stockholders with respect to the appointment
of independent accountants for the year ending June 30, 2009.
We
expect
that a representative of Grant Thornton LLP will be present at the meeting
and
will be given an opportunity to make a statement if they desire to do so. We
also expect that the representative will be available to respond to appropriate
questions from stockholders.
Fees
paid to Grant Thornton LLP
Grant
Thornton LLP served as our Independent Registered Accountant for the fiscal
years ended June 30, 2007 and has been engaged by the Audit Committee
to serve as our Independent Registered Accountant for the fiscal year ended
June 30, 2008. Grant Thornton LLP provided services in the following
category and amount:
|
|
|
2008
|
|
2007
|
|
|
Audit
Fees(1)
|
|
$
|
324,051
|
|
$
|
332,315
|
|
|
Audited
Related Fees(2)
|
|
$
|
31,244
|
|
$
|
30,539
|
|
|
Tax
Fees
|
|
$
|
-
|
|
$
|
-
|
|
|
All
Other Fees
|
|
$
|
-
|
|
$
|
-
|
|
| |
|
|
|
|
|
|
|
|
|
(1) |
Represents
the aggregate fees billed for professional services rendered for
the audit
and/or reviews of the Company’s financial statements and in connection
with the Company’s regulatory filings or engagements. Also includes
services related to consents for registration statements filings.
|
|
|
(2) |
Represents
fees for audit-related services for research
and consultation on various issues including the conversion of promissory
notes, private placements and other related services. Also includes
certain services related to the Company’s
acquisitions.
|
There
were no non-audit related services rendered to the Company by Grant Thornton
in
fiscal 2007 and 2008. While the Audit Committee has not established formal
policies and procedures concerning pre-approval of audit or non-audit services,
the Company’s executive officers and the Committee have agreed that all audit
and non-audit services by the Company’s independent accountants will be approved
in advance by the Audit Committee. The establishment of any such formal policies
or procedures in the future is subject to the approval of the Audit Committee.
One-hundred percent of the services provided under the caption “Audit Related
Fees” were approved by the Audit Committee.
The
affirmative vote of the holders of a majority of the common stock present in
person or represented by proxy at the meeting will be required to ratify the
selection of Grant Thornton LLP as the Company’s independent registered public
accounting firm.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
MANAGEMENT
Directors
The
following table sets forth the names, ages and titles of each member of the
Board of Directors of the Company:
|
Name
|
|
Age
|
|
Position
and Office
|
|
Richard
E. Gathright
|
|
54
|
|
Chairman
of the Board, Chief Executive Officer and President;
Director
|
|
Wendell
R. Beard
|
|
81
|
|
Director
|
|
Steven
R. Goldberg
|
|
57
|
|
Director
|
|
Nat
Moore
|
|
56
|
|
Director
|
|
Larry
S. Mulkey
|
|
65
|
|
Director
|
|
C.
Rodney O’Connor
|
|
73
|
|
Director
|
|
Robert
S. Picow
|
|
53
|
|
Director
|
Set
forth
below are the names of all directors of the Company, all positions and offices
with the Company held by each person, the period during which each has served
as
such, and the principal occupations and employment of such persons during at
least the last five years:
Mr.
Gathright
has been
Chief Executive Officer and President of the Company since November 2000, a
Director since March 2001 and Chairman of the Board since November 2002. He
is
responsible for the management of all business affairs of the Company, reporting
directly to the Board of Directors. He was an advisor on operational and
financial matters to the senior management of several domestic and international
energy companies from January 2000 through October 2000. From September 1996
to
December 1999, he was President and Chief Operating Officer of TransMontaigne
Inc., a Denver-based publicly owned company providing logistical services to
major energy companies and large industrial customers; a Director from April
1995 to December 1999; Executive Vice President from April 1995 to September
1996; and from December 1993 to April 1995 was President and Chief Operating
Officer of a predecessor of TransMontaigne. From 1988 to 1993, he was President
and Director of North American Operations for Aberdeen Petroleum PLC, a
London-based public company engaged in international oil and gas operations,
also serving on its Board of Directors. Prior to joining Aberdeen, he held
a
number of positions in the energy industry in the areas of procurement,
operations and management of oil and gas assets.
Mr.
Beard
has
served as a Director of the Company since July 2001. He retired from Ryder
System, Inc. in June 1994 after 17 years of service, the last three years of
which he served as Executive Vice President, responsible for corporate public
relations, advertising, government relations, special events and the Ryder
Foundation. From August 1989 to June 1991, he served as Senior Vice President
and from August 1987 to August 1989 as Vice President. From 1977 to 1984, he
was
Vice President of Corporate Development for Truck Stops Corporation of America,
a Ryder subsidiary. He has served on the Executive Committee of the American
Trucking Associations, and for the past 16 years has been an advisor to the
Truck Rental and Leasing Association. He is a Director of the Doral County
Club
in Miami; a Director of Baptist Health South Florida, a healthcare and hospital
corporation; and a member of the Orange Bowl Committee. Mr. Beard is a noted
speaker to the trucking industry, business and civic groups. He is the father
of
Robert
W.
Beard, the Company’s Senior Vice President, Marketing & Sales and Investor
Relations Officer.
Mr.
Goldberg
has
served as a Director of the Company since July 2005. He currently is President
of Goldhammer Advisory LLC, specializing in M&A and corporate finance
matters, located in Coral Gables, Florida. He was previously CEO of Coral Gables
based Sunbelt Diversified Enterprises LLC, a privately owned holding company
that acquires and oversees the operations of various small cap companies in
diverse industries. Prior to joining Sunbelt in 2006, he was Senior Vice
President, Arrow Air II LLC, after having previously served as Chief Financial
Officer of its affiliate Arrow Air, Inc., a Miami-based cargo airline with
related logistics and leasing entities. Prior to joining Arrow Air in 2004,
he
was a partner at Maplewood Partners LP, a private equity firm based in Coral
Gables, Florida. Mr. Goldberg served with Ryder System, Inc. and its
subsidiaries for 12 years, from 2000 to 2001 and from 1987 to 1998, in positions
including Senior Vice President of Corporate Finance, Vice President of
Corporate Development, and Vice President and Treasurer of Ryder System, Inc.;
and Chief Financial Officer of Ryder Transportation Services. From 1998 to
2000
he was Senior Vice President, Corporate Development of Republic Services, Inc.,
an environmental services company. Prior to joining the Ryder group, Mr.
Goldberg held positions in the finance departments of Squibb Corporation and
J.E. Seagram & Sons, Inc., having started his career at Manufacturers
Hanover Trust in New York. He is a lecturer in finance at the undergraduate
School of Business, University of Miami, as well as a guest lecturer at the
Graduate School of Business in the area of mergers and acquisitions. Mr.
Goldberg currently serves as Chairman of the Company’s Audit
Committee.
Mr.
Moore
has
served as a Director of the Company since May 2006. He currently is the
President of Nat Moore & Associates Inc., an event management company
located in Miami, and is the founder of The Nat Moore Foundation, a charitable
organization that provides needed assistance to inner city organizations
supporting sports teams and scholarships. A former professional football player
with the Miami Dolphins, Mr. Moore is also the Director of Special Project,
Alumni Affairs, for Miami Dolphins Limited and serves as Director of Pro Bowl
Youth Clinics for the National Football League’s Special Events, and did the
same for the Super Bowl Youth Clinics for 18 years. He also appears as a Color
Analyst for the Miami Dolphins Preseason Games on WFOR TV 4 and the University
of Florida, Breakfast
with the Gators,
football game broadcasts, and as a sidelines reporter on Sports Talk Radio
AM790, The
Ticket,
for the
Miami Dolphins. He also has been a Color Analyst for Miami Hurricanes football
broadcasts. Mr. Moore is a 13-year veteran of the Miami Dolphins football team
and was the ninth inductee into the Miami Dolphins Ring of Honor. Mr. Moore
currently serves on the Board of Directors of several other organizations,
including Sun Trust Bank N.A., the Nat Moore Foundation, the Orange Bowl
Committee, and the South Florida Golf Foundation. He currently serves as a
member of the Company’s Audit Committee, Chairman of the Compensation Committee
and Chairman of the Nominating and Corporate Governance Committee.
Mr.
Mulkey has
served as a Director of the Company since November 2002. He currently
is the CEO and President of Mulkey & Associates, Inc., which provides
consulting services specializing in transportation and logistics, business
strategy, and real estate. He retired from Ryder System, Inc. in 1997 after
31
years of service, the last five years as President of Worldwide Logistics and
as
a member of the executive committee. Mr. Mulkey has served as a board
and/or
committee
chairman in numerous organizations, including the American Trucking Association,
and was the 1997 recipient of the Distinguished Service Award of the Council
of
Logistics Management which is the highest honor in the logistics industry.
He
currently serves as a Director of Cardinal Logistics Management, Inc., a private
logistics and transportation company. Mr. Mulkey currently serves as a member
of
the Company’s Audit Committee, Compensation Committee and Nominating and
Corporate Governance Committee.
Mr.
O’Connor
has
served as a Director of the Company since July 1999. Mr. O’Connor previously
assisted in the reorganization and refinancing of the Company, and is one of
its
largest stockholders today. He is the Chairman of Cameron Associates, Inc.,
a
financial communications firm he founded in 1976. Prior to 1976, he served
in
numerous positions over a 20-year period in the investment industry with Kidder
Peabody and Bear Stearns. Mr. O'Connor serves as a Director of Fundamental
Management Corporation, a private fund management company whose partnerships
hold an investment in the Company. He also was a founder and Director of Atrix
Laboratories, Inc., a publicly traded specialty pharmaceutical company focused
on advanced drug delivery which was sold in 2004.
Mr.
Picow
has
served as a Director of the Company since March 2001. Mr. Picow is the Vice
Chairman and Chief Excutive Officer of Eezinet Corporation which is a private
telecommunications company holding PCS licenses for cellular sepctrum. He served
as Chairman of Cenuco Inc. (which subsequently changed its name to Lander Co.
Inc. and is now known as Ascendia Brands, Inc.), a public
communications technology company, from April 2004 until its merger with Lander
Co. Inc. Mr. Picow has served as a member of the board of directors of Cenuco
(and now Ascendia) since July 2003, and as chief executive officer of the Cenuco
Wireless division since 2005. From June 1996 to August 1997, he served as the
Vice Chairman of Brightpoint, Inc., a publicly traded communications company,
and was its President from June 1996 until October 1997. In 1981, Mr. Picow
founded Allied Communications, Inc., the pioneer U.S. wireless electronics
distributorship, serving 16 years as its Chairman, Chief Executive Officer
and
President until the 1996 merger of Allied and Brightpoint. Since May 2001,
he
has served as a Director of Fundamental Management Corporation, a private fund
management company whose partnerships hold an investment in the Company. He
also
is a Director of Infosonics Corporation, a multinational telecommunications
company, American Telecom Services, Inc., a provider of internet phone and
prepaid long distance communications services, and serves on the Board of
Trustees for the Children’s Place at Homesafe. Mr. Picow currently serves as a
member of the Company’s Compensation Committee and its Nominating and Corporate
Governance Committee.
Executive
Officers
The
following table sets forth the name and age of each of our executive officers,
indicating all positions and offices presently held with the Company:
|
Name
|
|
Age
|
|
Position
and Offices
|
|
Richard
E. Gathright
|
|
54
|
|
Chairman
of the Board, Chief Executive Officer and President
|
|
Robert
W. Beard
|
|
54
|
|
Senior
Vice President, Marketing & Sales and Investor Relations
Officer
|
|
Timothy
E. Shaw
|
|
44
|
|
Senior
Vice President, Information Services & Administration and Chief
Information Officer
|
|
Name
|
|
Age
|
|
Position
and Offices
|
|
Michael
S. Shore
|
|
40
|
|
Chief
Financial Officer, Senior Vice President and Treasurer
|
|
Paul
C. Vinger
|
|
38
|
|
Senior
Vice President, Corporate Planning and Fleet Operations
|
|
E.
Wayne Wetzel
|
|
61
|
|
Senior
Vice President, Lubricants
|
|
Gary
G. Williams
|
|
52
|
|
Senior
Vice President, Commercial Operations
|
|
L.
Patricia Messenbaugh
|
|
44
|
|
Vice
President, Finance & Accounting and Chief Accounting Officer
|
Mr.
Gathright
has been
Chief Executive Officer and President of the Company since November 2000, a
Director since March 2001 and Chairman of the Board since November 2002. He
is
responsible for the management of all business affairs of the Company, reporting
directly to the Board of Directors. For a detailed description of
Mr. Gathright’s business experience, see “Management -
Directors.”
Mr.
Beard (Robert W.)
has been
Senior Vice President, Marketing & Sales and Investor Relations Officer of
the Company since December 2006, responsible for all marketing and sales
operations, and for investor relations; and from July 2005 to December 2006,
he
was Vice President, Corporate Development and Investor Relations Officer of
the
Company responsible for product line strategy and development, and for vendor
and public relations. He was employed by Cendian Corporation, a chemical
logistics subsidiary of Eastman Chemical Company, as Group Director of Client
Development and Sales Support from 2004 to July 2005; and as Director of
Business Marketing from 2001 to 2004. He was Senior Manager, Field Marketing
for
Ryder System, Inc. from 1994 to 2001. From 1986 to 1994, he was the Vice
President of Marketing for Comdata Corporation. From 1985 to 1986, he was
Manager of Vendor Relations for First Data Resources, a Division of American
Express Travel Related Services Company. Mr. Beard also was employed by Ryder
Systems from 1977 to 1985, serving in a number of positions including Manager,
Vendor Relations, and as a General Manager and a Controller in its Truckstops
of
America Division. He is the son of Wendell R. Beard, a member of the Company’s
Board of Directors.
Mr.
Shaw
has been
Senior Vice President, Information Services & Administration and Chief
Information Officer since December 2006, responsible for all information systems
management and corporate administration; and from April 2006 to December 2006,
he was Vice President, Information Systems Services and Chief Information
Officer. From 1999 to April 2006 he was the Vice President of Information
Services with Neff Corporation/Neff Rental LLC headquartered in Miami, one
of
the country’s largest construction rental companies. From 1998 to 1999, he
served as Director, Retail and Distribution Systems for Fruehauf Trailer
Services in St. Louis, MO. From 1997 to 1998, he was Manager, Service Center
Mechanization, for Southwestern Bell in St. Louis. From 1994 to 1997, he was
Manager, Information Systems with Aggregate Equipment in East Peoria, IL. From
1991 to 1994, he was Systems Engineer with Electronic Data Systems (EDS) in
Troy, MI. From 1981 to 1991, he was a Manufacturing Engineer and Area Supervisor
for McDonnell Douglas Corp. in St. Louis. Mr. Shaw has an extensive background
in IT leadership, process engineering, business operations, implementing
enterprise resource solutions, storm disaster recovery planning, public company
IT systems Sarbanes-Oxley 404 implementation and compliance, and the integration
of acquisitions.
Mr.
Shore has
been
Chief Financial Officer, Senior Vice President and Treasurer of the Company
since February 2002. He also was the Corporate Secretary from February 2002
to
September 2005. Prior to joining the Company, he was CEO and President of Shore
Strategic and Financial Consulting, providing financial and management services
to corporate clients in the United States and Latin America. From 1998 to 2000,
he served as Director Finance/Controller for the North American Zone Operations
of Paris-based Club Mediterranee. From 1996 to 1998, he was Vice President
of
Finance/Controller for Interfoods of America, Inc., the largest Popeye’s Fried
Chicken & Biscuits franchisee. From 1994 to 1996, he was the Manager of
Accounting and Financial Reporting for Arby’s, Inc. Mr. Shore began his
professional career in 1990 with Arthur Andersen & Company where he became a
Senior Auditor. Mr. Shore has a diverse background in leading growth oriented
public companies in mergers/acquisitions, capital formations, finance, treasury
and accounting.
Mr.
Vinger has
been
Senior Vice President, Corporate Planning and Fleet Operations of the Company
since November 2002 and Vice President, Corporate Planning and Fleet Operations
for the Company since August 2001, managing all fleet operations and fuel
delivery functions, and additionally responsible for corporate planning and
analysis; and from December 2000 to August 2001, he was Director of Corporate
Planning. He was Senior Analyst of Corporate Planning and Finance for
TransMontaigne Inc. from September 1998 to December 2000, responsible for
operations and acquisitions analyses and the management of supply scheduling
and
product allocations. From 1997 to 1998, he was a Manager of Terminal Operations
for TransMontaigne responsible for petroleum product and chemical terminals.
From 1994 to 1997, he was a Research Associate for E. I. DuPont. From 1991
to
2001, Mr. Vinger served to the rank of Captain in the United States Military.
Mr.
Wetzel has
been
Senior Vice President, Lubricants, of the Company since October 2005. From
the
acquisition of H & W Petroleum Company, Inc. (“H & W”) in October 2005
to December 2006, he was also the President and Chief Operating Officer of
H
& W. Prior to that time and since 1980, he was the President and Chief
Executive Officer of H & W, of which he was also the co-founder in 1974.
Under Mr. Wetzel’s leadership, H & W came to be recognized as one of the top
ten distributors in the ExxonMobil (Lubricant) Network of Distributors. From
1974 to 1980, he served in various operating, sales and management positions
with H & W. From 1966 to 1974, Mr. Wetzel served in positions of increasing
responsibility with Harkrider Distributing Company, Inc. (“HDC”) an entity
related to H &W by some common shareholder ownership. He became the
Executive Vice President of HDC in 1979, a position that he also held after
the
formation of H & W and until the acquisition of the operating assets of HDC
by H & W in September 2005. During his career, Mr. Wetzel has served on
numerous lubricant industry advisory boards and councils, including the National
Lubricants Distributors Advisory Council. He also served three years in the
U.
S. Army, including one tour in Vietnam with the First Air Calvary.
Mr.
Williams has
been
Senior Vice President, Commercial Operations of the Company since February
2001.
Since December 2006 he is responsible for product procurement and for inventory
and price management, and prior to that time for marketing and sales and product
procurement. From 1995 to February 2001, he was Vice President of Marketing
for
the supply, distribution and marketing subsidiary of TransMontaigne Inc.,
managing wholesale marketing functions in the Mid-Continent, Southeast and
Mid-Atlantic and serving on that company’s senior risk management committee.
From 1987 to 1995, he was Regional Manager for Kerr-McGee Refining Corporation,
responsible for unbranded petroleum product sales in its southeastern
United
States
11-state marketing region. Mr. Williams was employed by Kenan Transport Company
as its Tampa Assistant Terminal Manager from 1986 to 1987. He was General
Manager of Crum’s Fuel Oil Service from 1980 to 1986.
Ms.
Messenbaugh has
been
the Company’s Chief
Accounting Officer and Principal Accounting Officer since October 2007
and
its Vice
President of Finance & Accounting since April 2007.
Prior to
joining the Company, Ms. Messenbaugh served as Director-Assistant Corporate
Controller for NationsRent, Inc., a SEC reporting construction distribution
company in Fort Lauderdale, from 2005 to 2006. From 2003 to 2005 Ms. Messenbaugh
served as Corporate Controller of Workstream, Inc., a publicly traded software
application service company. From 2001 to 2003 she was the Senior Corporate
Accountant for publicly traded Mayors Jewelers Inc. From 1992 to 2000 Ms.
Messenbaugh served with Interim Healthcare, Inc. and Interim Services, Inc.,
now
known as Spherion Inc., a publicly traded company, where she last held the
position of Senior Financial Analyst. From 1989 to 1991 she was a Financial
Analyst for publicly traded, NationsBank, now known as Bank of America. She
began her career with KPMG. Ms. Messenbaugh is a Certified Public Accountant
and
holds a Bachelors degree in Computer Science and a MBA degree, both from Oral
Roberts University, Tulsa, Oklahoma.
CORPORATE
GOVERNANCE
Independence
After
considering all of the relevant facts and circumstances, the Company’s Board of
Directors has determined that each of Messrs. Goldberg, Moore, Mulkey and Picow
is independent from our management and qualifies as an “independent director”
under the NASDAQ listing standards. This means that, in the judgment of the
Board of Directors, none of those directors (1) is an officer or employee of
the
Company or its subsidiaries or (2) has any direct or indirect relationship
with
the Company that would interfere with the exercise of his independent judgment
in carrying out the responsibilities of a director. As a result, the Company
has
a majority of independent directors as required by the NASDAQ listing
standards.
Code
of Business Conduct
The
Company has adopted a Code of Business Conduct that applies to all of the
Company’s employees, including its senior financial officer and Chief Executive
Officer, which complies with the requirements of the Sarbanes-Oxley Act of
2002
and NASDAQ listing standards. Accordingly, the Code of Business Conduct is
designed to deter wrongdoing, and to promote, among other things, honest and
ethical conduct, full, timely, accurate and clear public disclosures, compliance
with all applicable laws, rules and regulations, the prompt internal reporting
of violations of the Code of Business Conduct, and accountability. The Company’s
Code of Business Conduct is available on the Company’s website at www.mobilefueling.com.
To
access our corporate governance materials, click on “Investors” and then click
on “Corporate Governance.”
Meetings
and Committees of the Board of Directors
During
the fiscal year ended June 30, 2008, the Board of Directors held five (5)
meetings and took action by unanimous written consent seventeen (17) times.
No
incumbent director attended fewer than 75 percent of the aggregate of (i) the
number of meetings of the Board of Directors held during the period he served
on
the Board of Directors, and (ii) the number of meetings of committees of the
Board of Directors held during the period he served on such committees.
The
standing committees of the Board of Directors are as follows: (i) the Audit
Committee, (ii) the Compensation Committee and (iii) the Nominating and
Corporate Governance Committee.
Audit
Committee.
Messrs.
Goldberg, Moore and Mulkey currently serve on the Audit Committee, which met
five (5) times
and
took action by unanimous written consent one (1) time
during the fiscal year ended June 30, 2008. Each member of the Audit Committee
is independent as defined in the NASDAQ listing standards. The duties and
responsibilities of the Audit Committee include (a) the appointment of the
Company’s auditors and any termination of such engagement, including the
approval of fees paid for audit and non-audit services, (b) reviewing the plan
and scope of audits, (c) reviewing the Company’s significant accounting policies
and internal controls and (d) having general responsibility for oversight of
related auditing matters. The
Audit
Committee
was established in accordance with Section 3(a)(58)(A) of the Securities
and Exchange Act of 1934, as amended (the “Exchange Act”).
The
Board
of Directors has determined that Mr. Goldberg qualifies as an “Audit Committee
Financial Expert” as that term is defined by the Securities and Exchange
Commission (the “SEC”). In addition, each member of the Audit Committee is
financially literate, as required pursuant to the NASDAQ listing standards.
The
Board
of Directors has adopted a written charter for the Audit Committee, a copy
of
which is available on the Company’s website at http://www.mobilefueling.com.
To
access our corporate governance materials, click on “Investors” and then click
on “Corporate Governance.”
Compensation
Committee.
Messrs.
Moore, Mulkey and Picow currently serve on the Compensation Committee, which
did
not hold any meetings but took action by unanimous written consent six
(6) times
during the fiscal year ended June 30, 2008. Each member of the Compensation
Committee is independent as defined in the NASDAQ listing standards. This
Committee administers the 1996 and 2000 Stock Option Plans and has the power
and
authority to (a) determine the persons to be awarded options and the terms
thereof and (b) construe and interpret the 1996 and 2000 Stock Option Plans.
This Committee also is responsible for the final review and determination of
compensation of the Chief Executive Officer and other executive officers. The
compensation of executive officers other than the Chief Executive Officer
generally is set by the Compensation Committee based on recommendations from
the
Chief Executive Officer and such other input as the Committee believes
appropriate and necessary in each case.
The
Compensation Committee has the authority to retain and terminate compensation
consultants or other experts to assist the Committee in the evaluation of the
Chief Executive Officer, his compensation or the compensation of any of the
other executive officers. The Company has never engaged any compensation
consultants or similar firms.
The
Board
of Directors has adopted a written charter for the Compensation Committee,
a
copy of which is available on the Company’s website at http://www.mobilefueling.com.
To
access our corporate governance materials, click on “Investors” and then click
on “Corporate Governance.”
Nominating
and Corporate Governance Committee.
Messrs.
Moore, Mulkey and Picow currently serve on the Nominating and Corporate
Governance Committee, which did not hold any meetings but took action by
unanimous written consent one (1) time
during the fiscal year ended June 30, 2008. Each member of the Nominating and
Governance Committee is independent as defined in the NASDAQ listing standards.
This
Committee is responsible for identifying individuals qualified to become
directors of the Company, recommending to the Board of Directors director
candidates to fill vacancies of the Board of Directors and to stand for election
by the stockholders at the Annual Meeting of the Company, periodically assessing
the performance of the Board of Directors, periodically reviewing and assessing
the Company’s Code of Business Conduct, and reviewing and recommending to the
Board of Directors appropriate corporate governance policies and procedures
for
the Company.
The
Board
of Directors has adopted a written charter for the Nominating and Corporate
Governance Committee, a copy of which is available on the Company’s website at
http://www.mobilefueling.com.
To
access our corporate governance materials, click on “Investors” and then click
on “Corporate Governance.”
The
Board
of Directors will, as a matter of policy, give consideration to nominees for
the
Board that are recommended by stockholders. A stockholder who wishes to
recommend a nominee should direct his or her recommendation in writing to the
Company’s Corporate Secretary at the Company’s address. Stockholder
recommendations will be evaluated under the same criteria as the Board of
Director recommendations. The Company must receive the required notice (as
defined below) by the date set forth in the prior year’s annual proxy statement
under the heading “Shareholder Proposals” in order to be considered by the
Nominating and Corporate Governance Committee in connection with the Company’s
next annual meeting of stockholders.
Stockholders
wishing to recommend a director candidate for service on the Board of Directors
may do so by providing advance written notice to the Corporate Secretary. The
notice must include the following information:
As
to
each proposed nominee:
| |
·
|
the
name, age, business address and residence
address;
|
| |
·
|
the
principal occupation or employment;
|
| |
·
|
the
class or series and number of shares of capital stock of the Company
which
are owned beneficially or of record by the nominee;
and
|
| |
·
|
any
other information relating to the nominee that would be required
to be
disclosed in a proxy statement or other filings required to be made
in
connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act, and the rules and regulations
promulgated thereunder.
|
As
to the
stockholder giving notice:
| |
·
|
the
name and record address of such
stockholder;
|
| |
·
|
the
class or series and number of shares of capital stock of the Company
which
are owned beneficially or of record by such stockholder;
|
| |
·
|
a
description of all arrangements or understandings between such stockholder
and each proposed nominee and any other person or persons (including
their
names) pursuant to which the nomination(s) are to be made by such
stockholder;
|
| |
·
|
a
representation that such stockholder intends to appear in person
or by
proxy at the meeting to nominate the persons named in its notice;
and
|
| |
·
|
any
other information relating to such stockholder that would be required
to
be disclosed in a proxy statement or other filings required to be
made in
connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder.
|
Such
notice must be accompanied by a written consent of each proposed nominee to
be
named as a nominee and to serve as a director if elected.
A
nominee
for director should be a person of integrity and must be committed to devoting
the time and attention necessary to fulfill his or her duties to the Company.
The Nominating and Corporate Governance Committee will evaluate the independence
of directors and potential directors, as well as their business experience,
understanding of and experience in the industry, personal skills, or specialized
skills or experience, relative to those of the then-current directors. The
Nominating and Corporate Governance Committee also will consider issues
involving possible conflicts of interest of directors or potential directors,
the results of interviews of selected candidates by members of the Nominating
and Corporate Governance Committee and the Board of Directors, and the totality
of the circumstances.
There
were no nominee recommendations provided by stockholders for consideration
for
inclusion in this year’s proxy statement.
Director
Attendance at Annual Meeting
All
members of the Board of Directors are encouraged, but not required, to attend
the annual meeting of stockholders. Each director attended the 2007 Annual
Meeting of Stockholders held on December 7, 2007.
Communications
with the Board of Directors
Stockholders
who wish to communicate with the Board of Directors may do so by addressing
their correspondence to the Board of Directors at SMF Energy Corporation,
Attention: Corporate Secretary, 200 West Cypress Creek Road, Suite 400, Fort
Lauderdale, Florida 33309. The Board of Directors has approved a process
pursuant to which the Corporate Secretary shall review and forward
correspondence to the appropriate director or group of directors for response.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires that our directors, executive officers and
persons who own more than ten percent of our Common Stock, file with the SEC
initial reports of ownership and reports of changes in ownership of Common
Stock. Directors, officers and greater than ten percent stockholders are
required by SEC rules to furnish us with copies of all ownership reports they
file with the SEC.
To
our
knowledge, based solely on review of the copies of such reports furnished to
us
and representations that no other reports were required, during the period
ended
June 30, 2008, all required reports were timely filed.
Certain
Relationships and Related Transactions
Mr.
E.
Wayne Wetzel, the Company’s Senior Vice President, Lubricants, was previously
one of the owners of H & W Petroleum Company, Inc., which was acquired by
the Company in 2005. The Company is currently indirectly obligated to Mr. Wetzel
and various other former owners of H & W, including Mr. Wetzel’s spouse, Kay
Wetzel, his children Quinton E. Wetzel and Peyton W. Wetzel and various members
of his wife’s family, under four operating leases that expire September 30,
2010. The Company paid a total of $261,160 in
rent
on these leases during the fiscal year ended June 30, 2008. The properties
are
located in Houston, Lufkin, Freeport and Waxahachie, Texas. These leases were
negotiated prior to the acquisition of H & W as part of an arm’s length
transaction. The Company believes that the leases were entered into in good
faith and on fair and reasonable terms.
C.
Rodney
O’Connor, a Director of the Company, also is Chairman of Cameron Associates,
Inc., a financial consulting and investor relations public relations firm,
that
has provided investor relations services to the Company since 1997. During
the
fiscal year ended June 30, 2008, the Company paid $79,031 to Cameron Associates,
Inc. for such services.
The
Company believes that the foregoing transactions were entered into in good
faith
and on fair and reasonable terms that are no less favorable to the Company
than
those that would be available for comparable transactions in arm’s length
dealings with unrelated third parties.
The
Company’s Corporate Secretary, Louise P. Lungaro, became the spouse of Richard
E. Gathright, the Company’s President and Chief Executive Officer during fiscal
2007. Ms. Lungaro has been employed by the Company since 2001. Even though
she
is not an executive officer, Ms. Lungaro’s compensation is determined by the
Compensation Committee without the participation of Mr. Gathright.
The
Company has a stated policy against any conflict of interest transaction in
its
Code of Business Conduct, which was most recently revised by the Board of
Directors in March 2007. The Code of Business Conduct specifically prohibits
officers, directors and employees from employment by, or investment in, any
current or prospective customer, supplier or competitor of the Company. The
Code
of Business Conduct also prohibits acceptance of commissions, compensation
or
excessive gifts or entertainment from persons or firms with which the Company
does or may do business, as well as any exploitation of a corporate opportunity
for personal profit. Exceptions to the prohibitions on conflict of interest
transactions may be made on a case-by-case basis to avoid undue hardship, such
as investments made before employment or other pre-existing relationships.
The
Audit
Committee Charter includes a requirement for Audit Committee approval of any
transaction involving the Company and a related party in which the parties’
relationship could enable the negotiation of terms on other than an independent,
arm’s length basis. For these purposes, a “related party transaction” includes
any transaction that is required to be disclosed pursuant to Item 404 of SEC
Regulation S-K. In making any determination concerning whether to approve a
related party transaction, the Audit Committee is guided by the Company’s Code
of Business Conduct. The Audit Committee Charter specifically provides that
the
Committee shall review with management actions taken to ensure compliance with
the Code of Conduct. The Charter also requires the Committee to review any
conduct of executive officers or directors that is alleged to be in violation
or
potential violation of the Code and, in appropriate instances, grant
a
waiver
or
exception for specific individuals. The Committee has the authority to cause
the
Company to take remedial, disciplinary or other measures against executive
officers and directors who violate the Code of Conduct and to cause the prompt
public disclosure of any waiver of or change to the Code as it relates to
executive officers or directors.
Copies
of
the Code of Business Conduct and the Audit Committee Charter are available
on
the Company’s website at http://www.mobilefueling.com.
To
access these corporate governance materials, click on “Investors” and then click
on “Corporate Governance.”
Report
of the Audit Committee
AUDIT
COMMITTEE
Steven
R.
Goldberg
Nat
Moore
Larry
S.
Mulkey
Report
of the Compensation Committee
The
Compensation Committee reviewed and discussed the Compensation Discussion and
Analysis with management and, based on such review and discussions, the
Compensation Committee recommended to the Board of Directors of SMF Energy
Corporation that the Compensation Discussion and Analysis be included in this
proxy statement and incorporated by reference in the Company’s Form 10-K as
filed with the Securities and Exchange Commission.
COMPENSATION
COMMITTEE
Nat
Moore
Larry
S.
Mulkey
Robert
S.
Picow
Compensation
Committee Interlocks and Insider Participation
No
member
of the Compensation Committee during fiscal 2008 was an officer, former officer
or employee of the Company or had any financial relationship with the Company
other than the compensation they received for serving as independent directors
of the Company. None of the Company’s independent directors is an executive
officer of a public company of which one of our executive officers is a
director.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth certain information with respect to the beneficial
ownership of the Company’s Common Stock as of July 9, 2008 by: (i) each
person who beneficially owns more than 5% of its Common Stock, (ii) each of
the Company’s current directors, (iii) the Company’s principal executive
officer, principal financial officer and three other most highly compensated
executive officers, and (iv) all directors and executive officers of the
Company as a group. The percentage of ownership data is based on 14,556,295
shares of the Company’s Common Stock issued and outstanding as of July 9,
2008.
| |
|
Common
Stock
Beneficially
Owned (1)(2)
|
|
|
|
|
Shares
|
|
Percentage
|
|
|
Richard
E. Gathright, Chairman of the Board, Chief Executive Officer and
President
(3)
|
|
|
569,250
|
|
|
3.91
|
|
|
Robert
W. Beard, Senior Vice President, Marketing & Sales and Investor
Relations Officer (4)
|
|
|
45,000
|
|
|
*
|
|
|
Timothy
E. Shaw, Senior Vice President, Information Services & Administration
and Chief Information Officer (5)
|
|
|
41,000
|
|
|
*
|
|
|
Michael
S. Shore, Chief Financial Officer, Senior Vice President and Treasurer
(6)
|
|
|
122,750
|
|
|
*
|
|
|
Paul
C. Vinger, Senior Vice President, Corporate Planning and Fleet Operations
(7)
|
|
|
114,500
|
|
|
*
|
|
|
E.
Wayne Wetzel, Senior Vice President, Lubricants (8)
|
|
|
48,000
|
|
|
*
|
|
|
Gary
G. Williams, Senior Vice President, Commercial Operations
(9)
|
|
|
87,500
|
|
|
*
|
|
|
L.
Patricia Messenbaugh, Vice President, Finance & Accounting and Chief
Accounting Officer (10)
|
|
|
18,000
|
|
|
*
|
|
|
Wendell
R. Beard, Director (11)
|
|
|
47,150
|
|
|
*
|
|
|
Steven
R. Goldberg, Director (12)
|
|
|
33,150
|
|
|
*
|
|
|
Nat
Moore, Director (13)
|
|
|
31,175
|
|
|
*
|
|
|
Larry
S. Mulkey, Director (14)
|
|
|
40,025
|
|
|
*
|
|
|
C.
Rodney O’Connor, Director (15)
|
|
|
1,147,458
|
|
|
7.88
|
|
|
Robert
S. Picow, Director (16)
|
|
|
240,626
|
|
|
1.65
|
|
|
All
directors and executive officers as a group (17)
|
|
|
2,585,584
|
|
|
17.76
|
|
| |
|
|
|
|
|
|
|
|
Triage
Capital Management LP (18)
|
|
|
835,390
|
|
|
5.74
|
|
|
Leon
Frenkel (19)
|
|
|
2,208,992
|
|
|
15.18
|
|
|
Joshua
Tree Capital Partners, LP (20)
|
|
|
1,200,741
|
|
|
8.25
|
|
|
Fred
C. Applegate Trust, Fred C. Applegate, Trustee (21)
|
|
|
751,975
|
|
|
5.17
|
|
|
Fundamental
Management Corporation (22)
|
|
|
2,653,122
|
|
|
18.23
|
|
|
Kevin
Hamilton (23)
|
|
|
803,736
|
|
|
5.52
|
|
|
(1)
|
The
address of each of the officers and directors identified is c/o SMF
Energy
Corporation, 200 West Cypress Creek Road, Suite 400, Fort Lauderdale,
Florida 33309.
|
|
(2)
|
Based
on 14,556,295 shares of Common Stock outstanding. Pursuant to the
rules of
the Securities and Exchange Commission (the “Commission”), certain shares
of Common Stock which a person has the right to acquire within 60
days of
July 9, 2008, pursuant to the exercise of stock options, warrants and
conversion of convertible promissory notes and preferred stock, are
deemed
to be outstanding for the purpose of computing the percentage ownership
of
that person, but not the percentage ownership of any other
person.
|
|
(3)
|
Includes
525,000 shares issuable upon exercise of options that are presently
exercisable and 36,000 shares issuable upon conversion of the Series
A
Convertible Preferred Stock, which are issuable to Mr. Gathright and
Louise P. Gathright, JTWROS.
|
|
(4)
|
Includes
35,000 shares issuable upon exercise of options that are presently
exercisable and 10,000 shares issuable upon conversion of the Series
A
Convertible Preferred Stock.
|
|
(5)
|
Includes
31,000 shares issuable upon exercise of options that are presently
exercisable and 10,000 shares issuable upon conversion of the Series
A
Convertible Preferred Stock.
|
|
(6)
|
Includes
85,000 shares issuable upon exercise of options that are presently
exercisable and 36,000 shares issuable upon conversion of the Series
A
Convertible Preferred Stock.
|
|
(7)
|
Includes
76,000 shares issuable upon exercise of options that are presently
exercisable and 36,000 shares issuable upon conversion of the Series
A
Convertible Preferred Stock.
|
|
(8)
|
Includes
48,000 shares issuable upon exercise of options that are presently
exercisable.
|
|
(9)
|
Includes
85,000 shares issuable upon exercise of options that are presently
exercisable and 18,000 shares issuable upon conversion of the Series
A
Convertible Preferred Stock.
|
|
(10)
|
Includes
9,000 shares issuable upon the exercise of options that are presently
exercisable and 9,000 shares issuable upon conversion of the Series
A
Convertible Preferred Stock.
|
|
(11)
|
Includes
43,150 shares issuable upon exercise of options that are presently
exercisable.
|
|
(12)
|
Includes
33,150 shares issuable upon exercise of options that are presently
exercisable.
|
|
(13)
|
Includes
31,175 shares issuable upon exercise of options that are presently
exercisable.
|
|
(14)
|
Includes
40,025 shares issuable upon exercise of options that are presently
exercisable.
|
|
(15)
|
Includes
43,150 shares issuable upon exercise of options that are presently
exercisable.
|
|
(16)
|
Includes
43,150 shares issuable upon exercise of options that are presently
exercisable.
|
|
(17)
|
Includes
1,127,800 shares of options that are presently exercisable and 137,000
shares issuable upon conversion of the Series A Convertible Preferred
Stock.
|
|
(18)
|
Consists
of 84,032 shares issuable upon the exercise of warrants that are
presently
exercisable, 314,358 shares issuable upon the conversion of certain
promissory notes and 437,000 shares issuable upon conversion of the
Series B Convertible Preferred Stock. These 835,390 shares are also
included in the shares shown for Leonid Frenkel, though he disclaims
beneficial ownership beyond his pecuniary interest therein. The address
for Triage Capital Management LP is 401 City Ave., Ste. 800, Bala
Cynwyd,
PA 19004.
|
|
(19)
|
The
shares consist of: (i) 78,767 shares issuable upon the conversion
of
certain promissory notes; (ii) 306,000 shares issuable upon conversion
of
the Series B Convertible Preferred Stock; (iii) 215,753 shares
issuable to Mr. Frenkel’s IRA, FBO Leonid Frenkel, Pershing LLC
(“IRA”); (iv) 181,000 shares issuable to the IRA upon conversion of the
Series A Convertible Preferred Stock; (v) 84,032 shares issuable to
Triage Capital Management, LP (“Triage”) upon the exercise of warrants
that are presently exercisable; (vi) 314,358 shares issuable to Triage
upon conversion of the Series B Convertible Preferred Stock; (vii)
437,000 shares issuable to Triage upon conversion of the Series B
Convertible Preferred Stock; (viii) 428,082 shares issuable to Periscope
Partners LP (“Periscope”) upon the conversion of certain promissory notes;
and (ix) 164,000 shares issuable to Periscope upon conversion of
the
Series B Preferred Stock. Mr. Frenkel
is the Managing Member of Triage Capital LF Group LLC, the general
partner
of the general partner of Triage Capital Management, L.P. Mr. Frenkel
is
also the general partner of Periscope Partners L.P. Mr. Frenkel disclaims
beneficial ownership of the Company’s securities held by Triage and
Periscope except to the extent of this pecuniary interest therein.
The
address for Mr. Frenkel is 1600 Flat Rock Rd., Penn Valley, PA
19072.
|
|
(20)
|
Consists
of 91,892 shares issuable upon the exercise of warrants that are
presently
exercisable, 256,849 shares issuable upon the conversion of certain
promissory notes and 852,000 shares issuable upon conversion of the
Series B Convertible Preferred Stock. The address for Joshua Tree
Capital Partners, LP is One Maritime Plaza, Ste. 750, San Francisco,
CA
94111.
|
|
(21)
|
Consists
of 102,956 shares issuable upon the exercise of warrants that are
presently exercisable and 89,897 shares issuable upon the conversion
of
certain promissory notes. The address is P.O. Box 675205, Rancho
Sante Fe,
CA 922067.
|
|
(22)
|
The
shares are held by Active Investors II, Ltd. (“Active II”) and Active
Investors III, Ltd. (“Active III”), private funds managed by Fundamental
Management Corporation (“Fundamental”). The shares consists of (i) 411,380
shares of Common Stock and 913,000 shares issuable upon conversion
of the
Series A Convertible Preferred Stock owned by Active II and (ii)
415,742
shares of Common Stock and 913,000 shares issuable upon conversion
of the
Series A Convertible Preferred Stock owned by Active III. Fundamental,
it its capacity as the sole general partner of Active II and Active
III,
may be deemed to beneficially own the securities held by Active II
and
Active III. Messrs. O’Connor and Picow are two of our directors and are
also directors and shareholders of Fundamental. Each of Messrs. O’Connor
and Picow disclaim any beneficial ownership interest in these shares.
The
address for Fundamental is 8567 Coral Way, #138, Miami, FL
33155.
|
|
(23)
|
The
shares consist of (i) 9,934 shares of Common stock, (ii) 7,802 shares
issuable upon the exercise of warrants that are presently exercisable,
(iii) 364,000 shares issuable to Kevin and Debra Hamilton, JTWROS,
upon
conversion of the Series A Convertible Preferred Stock, (iv) 200,000
shares of Common Stock owned by 1041 Partners, LP, (v) 40,000 shares
issuable to 1041 Partners, LP upon the exercise of warrants that
are
presently exercisable, and (vi) 182,000 shares issuable to 1041 Partners,
LP upon conversion of the Series A Convertible Preferred Stock. Mr.
Hamilton is the general partner of 1041 Partners, LP and as such
may be
deemed to beneficially own the securities held by 1041 Partners,
LP. The
address for Mr. Hamilton is Box 111 Wycombe, PA
18980.
|
EXECUTIVE
COMPENSATION AND OTHER INFORMATION
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
paid to our named executive officers for the fiscal year ended June 30, 2008
is
shown in the Summary Compensation Table that follows this discussion. The
Company’s executive compensation program is administered by the Compensation
Committee of the Board of Directors, which is comprised of Messrs. Moore, Mulkey
and Picow. As of the date hereof, in the judgment of our Board of Directors,
each member of the Compensation Committee is independent as required by the
NASDAQ listing standards. The
following discussion and analysis by the Company, which has also been reviewed
and approved by the Compensation Committee, analyzes the objectives and elements
of our executive officer compensation policies and procedures for 2008.
Overall
Program Objectives
The
Company strives to attract, motivate, and retain high-quality executives by
providing total compensation that is performance-based and competitive within
the labor market in which the Company competes for executive talent. The
Company’s compensation program is intended to align the interests of management
with the interests of stockholders by linking pay with performance, thereby
incentivizing performance and furthering the ultimate objective of improving
stockholder value.
The
Company, through its Compensation Committee, seeks to achieve these objectives
through three key compensation elements:
| |
·
|
Grants
of long-term, equity based compensation in the form of stock options;
and
|
| |
·
|
Performance-based
bonus.
|
In
making
compensation decisions with respect to each of these three elements of
compensation, the Compensation Committee considers the competitive market for
executives and the compensation levels provided by comparable companies in
our
industry.
The
Compensation Committee does not attempt to set each compensation element for
each executive within a specific range related to levels provided by industry
peers. Instead, the Compensation Committee uses market comparisons as one
factor— albeit a significant factor— in making compensation decisions. Other
factors considered when making individual executive compensation decisions
regarding each of the three key compensation elements include individual
contribution and performance, reporting structure, internal pay relationships,
complexity and importance of role and responsibility, leadership and growth
potential. The performance of the Company overall can also be an overriding
factor in making executive compensation decisions.
Elements
of Compensation
Set
forth
below is a discussion of each element of compensation, what each element is
designed to reward, the reason the Company pays each element, and how that
element fits into the Company’s overall compensation philosophy.
Base
Salary.
The base
salary for the named executive officers is intended to reflect job
responsibilities, value to the Company and individual performance with respect
to market competitiveness. These salaries are determined based on a variety
of
factors, including:
| |
·
|
the
nature and responsibility of the position and, to the extent available,
salary norms for persons in comparable positions at comparable
companies;
|
| |
·
|
the
expertise of the individual executive and his or her history with
the
Company; and
|
| |
·
|
the
competitiveness of the market for the executive’s
services.
|
Base
salary amounts are generally reviewed annually. The Compensation Committee
sets
the base salary level of the Company’s Chief Executive Officer, and, based on
input from the Chief Executive Officer, of the other executive officers.
Under
the
Chief Executive Officer’s employment agreement, as amended and restated in 2005,
Mr. Gathright has a minimum annual base salary of $323,000, which salary may
be
increased if the Compensation Committee determines an increase is warranted
under the circumstances. To date, the Compensation Committee has not elected
to
increase Mr. Gathright’s compensation above the minimum provided in his
employment agreement.
None
of
the salaries of the other named executive officers were increased during fiscal
2008. To date, none of the salaries of any of the other named executive officers
have been increased on account of their performance during fiscal 2008 or
otherwise.
Long-term
Incentive Compensation—Stock Options.
The
Company provides executive officers and other employees with long-term incentive
compensation in the form of stock options. While it is the Company’s intent to
provide awards on an annual basis, the decision to make any grants in a given
year is typically performance based. The objective is to align compensation
for
executive officers over a multi-year period directly with the interests of
stockholders of the Company by motivating and rewarding the creation and
preservation of long-term stockholder value. The level of long-term incentive
compensation is determined based on an evaluation of competitive factors in
conjunction with total compensation provided to the executive officers and
the
goals of the compensation program.
Stock
options produce value for executives only if our stock price increases over
the
exercise price, which is equal to the Fair Market Value (as determined under
the
Plan) of a share of stock on the Grant Date. Also, through vesting and
forfeiture provisions, stock options serve to encourage executive officers
to
remain with the Company. Stock options grants are often made to executive
officers and other employees in connection with new hires or promotions and,
from time to time, as part of a broad series of grants to officers and key
employees generally. There is, however, no specific time of year at which
regular grants to executive officers or other existing employees
are
made.
The
most recent broad series of grants to employees, including executive officers,
was made in October of 2007. Automatic grants are also made each quarter to
members of the Board of Directors as compensation for service as directors.
Bonuses -
Discretionary Cash Bonuses: The
Company’s compensation program also provides for consideration of a
discretionary cash bonus if the Committee believes that bonuses are justified
under the circumstances. In making its judgment as to whether to give a
discretionary cash bonus to an individual executive officer, the Committee
considers the Company’s financial performance and the individual’s performance,
as assessed by the Committee, with input from the Chief Executive Officer and,
occasionally, other named executive officers, except as to any individual’s own
performance or compensation. The objective of the Company’s cash bonus program
is to compensate individuals based on the achievement of specific goals and
achievements. Some of these goals or achievements may be specified prior to
the
period during which performance is evaluated but, generally speaking, there
are
no pre-established objective goals by which a cash bonus is to be measured.
In
most cases, cash bonuses are based upon a subjective analysis of performance
and
achievements that, in the Committee’s view, correlate closely with the growth of
long-term stockholder value. Historically, the Committee has granted cash
bonuses to executive officers only in rare circumstances based on extraordinary
performance or achievements. As the Company’s overall performance improves in
the future, however, the Committee expects that the frequency and the amount
of
cash bonuses will increase commensurately.
In
making
a determination as to whether to grant discretionary cash bonuses to named
executive officers other than the Chief Executive Officer, the preliminary
determination as to bonuses is typically based upon the recommendation of the
Chief Executive Officer combined with the Committee’s assessment of each
officer’s performance and, if individual goals are set at the beginning of the
year, the achievement of those performance goals. The subjective assessments
of
the Committee and the Chief Executive Officer allow bonus decisions to take
into
account each named executive officer’s individual performance and unique
contributions during the year. The bonus can then be adjusted up or down
depending on the level of achievement of the individual’s objective performance
goals, if any.
As
noted
above, the Compensation Committee has not generally set individual performance
goals for the Chief Executive Officer or other individual named executive
officers at the beginning of the fiscal year for purposes of calculating
entitlement to base salary increases, discretionary cash bonuses or incentive
compensation such as stock options. As the Company’s performance improves in the
future, however, the Committee may elect to establish such individually tailored
goals at the beginning of a fiscal year for purposes of measuring performance
and determining compensation at year-end. In establishing any such performance
objectives, the Committee would seek to provide incentives that would reward
exceptional performance of job responsibilities, leadership, innovation,
collaboration, the successful completion of particular projects, and other
activities critical to creating long-term value for stockholders. The
Compensation Committee does not utilize any objective overall Company
performance goals for the year in determining whether to pay the Chief Executive
Officer a cash bonus other than the bonus pool described below.
Mandatory
Bonus Pool.
Under
the Chief Executive Officer’s employment agreement, as amended and restated in
2005, 10%
of
the Company’s pretax profits must be set aside
in
a
bonus pool. That
agreement provides that, in addition to and not as a replacement for any
discretionary bonus payments and incentive compensation such as that described
above, the Chief Executive Officer shall participate in an annual management
incentive bonus pool equal to ten percent (10%) of the Company’s pre-tax
earnings. If the Company does not achieve positive pre-tax earnings for any
fiscal year, no bonus pool is established for that year. If there is a bonus
pool, it is allocated among the Chief Executive Officer and such other officers
of the Company as recommended by the Chief Executive Officer and approved by
the
Committee. While the Committee, in its sole discretion, determines the
allocation of funds among the eligible participants, the agreement requires
that
the entire bonus pool be allocated each year. The agreement also requires the
Company to pay any allocation made to the Chief Executive Officer within ninety
days after the end of the fiscal year.
In
light
of the Company’s financial performance, no bonus pool has ever been created nor
have any allocations from such a pool ever been made to Mr. Gathright or any
other officer under the agreement.
The
Compensation Committee intends to review the Company’s financial performance
annually to determine whether it is appropriate to initiate the payment of
regular annual bonuses to executive officers in addition to the mandatory bonus
plan created by Mr. Gathtright’s employment agreement. In addition, the
Committee plans to review both the annual bonus program and the long-term
incentive program on an annual basis to ensure that the key elements of each
program continue to meet the objectives previously discussed.
Compliance
with Section 162(m). Section
162(m) of the Internal Revenue Code generally disallows a tax deduction to
public corporations for compensation over $1 million paid for any fiscal year
to
the corporation’s Chief Executive Officer and four other most highly compensated
executive officers as of the end of the fiscal year. However, the statute
exempts qualifying performance-based compensation from the $1 million deduction
limit if certain requirements are met. While the Company has never paid
compensation to an executive officer in an amount that would trigger the
statute, the Compensation Committee nevertheless seeks, to the extent
practicable, to design the components of compensation so that these requirements
are met and full deductibility under Section 162(m) is allowed. The Compensation
Committee believes, however, that stockholder interests are best served by
not
restricting the Committee’s discretion and flexibility in crafting compensation
programs even though such programs may result in certain non-deductible
compensation expenses. Accordingly, the Compensation Committee may from time
to
time approve elements of compensation for certain officers that are not fully
deductible under Section 162(m).
Perquisites
and Other Personal Benefits.
The
Company does not provide named executive officers with any significant
perquisites or other personal benefits.
Retirement
Plans.
The
Company does not provide any of its executive officers with pension benefits,
deferred compensation or other similar plans other than a tax qualified 401(k)
defined contribution plan in which an executive officer may be able to
participate on the same terms as those generally offered to other employees.
However,
executive officers are currently prohibited
from
participating in the 401(k) defined contribution plan due to plan qualification
rules that affect highly compensated employees.
Health
and Insurance Benefits.
The
Company provides no health or insurance benefits to executive officers other
than those generally offered to salaried employees. The executive officers
are
eligible to participate in Company-sponsored benefit programs on the same terms
and conditions as those generally made available to salaried employees. Basic
health benefits, life insurance, disability benefits and similar programs are
provided to ensure that all employees have access to healthcare and income
protection for themselves and their family members.
Process
for Determining Executive Officer Compensation
In
setting the amounts of each component of an executive officer’s compensation and
considering their overall compensation package, the Committee considers the
following factors:
Benchmarking.
For
executive officers, the Committee may consider the level of compensation paid
to
individuals in comparable executive positions of other similar companies of
comparable size, such as small to midsize trucking, fueling and lubricants
distribution companies. The Compensation Committee believes that these companies
are the most appropriate for comparison because they are representative of
the
types of companies with which we compete to recruit and retain executive talent.
In some cases, the Compensation Committee may review data on salary, annual
cash
incentive bonuses and equity compensation, as well as total compensation, from
such other companies. In most cases, however, considering the Company’s limited
resources and the rare situations in which salary increases or cash bonuses
are
considered, the information considered by the Committee has been limited to
comparable salary information paid by a small group of competitors or comparable
local businesses.
Internal
Equity.
The
Compensation Committee considers the salary level for each executive officer
and
each position in overall management in order to reflect not only their relative
value to the Company but also the market demand for the particular skills of
the
executive officer. In many cases, because of the burdens placed on public
companies after the Sarbanes-Oxley Act of 2002, the market demand for executives
with particular skills, such as information systems management and accounting,
may be a greater consideration than their relative value to the Company’s
business.
Individual
Performance.
The
Compensation Committee considers the individual responsibilities and performance
of each named executive officer. For the executive officers other than the
Chief
Executive Officer, the Compensation Committee’s evaluation
is partially based on the Chief Executive Officer’s assessment of that
individual’s performance. In the case of the Chief Executive Officer, the
Compensation Committee alone judges his job performance.
Fiscal
Year Ended June 30, 2008 Decisions. The
Compensation Committee did not establish any objective performance goals for
the
Company’s individual executive officers for fiscal 2008 against which their
entitlement to increased base salaries, discretionary cash bonuses or other
incentive compensation, such as stock options, could be measured quantitatively
at the end of fiscal 2008. The Committee did determine, however, that in light
of the paucity of cash bonuses and other
incentive
compensation in recent years, it was necessary and appropriate to grant stock
options to named executive officers and certain other employees in the fiscal
year ended June 30, 2008. Accordingly, the Compensation Committee granted a
total of 263,000 stock options to officers and other key employees whose
performance has, in the Committee’s judgment, materially benefited the Company.
The number of stock options awarded to the various executive officers other
than
the Chief Executive Officer was determined by the Committee after consultation
with the Chief Executive Officer.
Of
the
263,000 stock options granted in fiscal year ended June 30, 2008, the
Compensation Committee granted a total of 175,000 stock options to five of
its named executive officers on October 8, 2007. All of the options granted
to
the named executive officers were unvested ten year incentive stock options
with
an exercise price of $1.28 per share which is equal to the Fair Market Value
(as
determined under the Plan ) of a share of stock on the Grant Date, vesting
over
three years, with forty percent vesting each of the first two years after the
grant date and twenty percent vesting after the third year. Richard Gathright
received 75,000 options, Paul Vinger and Michael Shore each received 40,000
options, and Robert Beard and Timothy Shaw each received 10,000
options.
The
Compensation Committee has determined not to establish any objective performance
criteria for the executive officers for fiscal 2009 other than the mandatory
bonus pool established by the Chief Executive Officer’s employment
agreement.
Summary
Compensation
The
following table provides information concerning total compensation earned or
paid to the Chief Executive Officer, the Chief Financial Officer, and the three
other most highly compensated executive officers of the Company for services
rendered to the Company for the fiscal year ended June 30, 2008. These six
officers are referred to as the named executive officers in this proxy
statement.
SUMMARY
COMPENSATION TABLE
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)
|
Option
Awards ($)(1)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
($)
|
All
Other Compensa-tion ($) (2)
|
Total
($)
|
|
Richard
E. Gathright,
Chairman
of the Board,
CEO
and President
|
2008
|
323,000
|
-0-
|
-0-
|
84,675
|
-0-
|
-0-
|
12,000
|
419,675
|
|
Michael S.
Shore,
CFO,
Senior V.P. and Treasurer
|
2008
|
175,000
|
-0-
|
-0-
|
45,160
|
-0-
|
-0-
|
12,000
|
232,160
|
|
Paul C.
Vinger,
Senior
V.P., Corporate Planning and Fleet Operations
|
2008
|
148,000
|
-0-
|
-0-
|
45,160
|
-0-
|
-0-
|
12,000
|
205,160
|
|
E.
Wayne Wetzel,
Senior V.P., Lubricants
|
2008
|
200,000
|
-0-
|
-0-
|
0
|
-0-
|
-0-
|
8,400
|
208,400
|
|
Robert
W. Beard,
Senior V.P., Marketing & Sales and Investor Relations
Officer
|
2008
|
138,000
|
-0-
|
-0-
|
11,290
|
-0-
|
-0-
|
12,000
|
161,290
|
|
Timothy
E. Shaw,
Senior V.P., Information Services & Administration and Chief
Information Officer
|
2008
|
138,000
|
-0-
|
-0-
|
11,290
|
-0-
|
-0-
|
12,000
|
161,290
|
| (1) |
The
amounts in this column reflect the aggregate grant date fair value
under
SFAS 123(R) of awards made during the fiscal year ended June 30,
2008. The
assumptions we use in calculating these amounts are discussed in
Note 2 -
Summary of Significant Accounting Policies on Stock-Based Compensation
to
the Consolidated Financial Statements included in the Company's
Form 10-K
for the year ended June 30, 2007.
|
| (2) |
The
amounts in this column reflect the annual automobile
allowance.
|
Grants
of Plan-Based Awards
There
were no grants of plan-based awards made during fiscal year ended June 30,
2008
to the named executive officers.
Outstanding
Equity Awards at Fiscal Year-End
The
following table provides information with respect to outstanding stock options
held by the
named
executive officers as of the fiscal year ending June 30, 2008.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|
Option
Awards
|
Stock
Awards
|
|
Name
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights
That Have Not Vested
(#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or
Other Rights That Have Not Vested
($)
|
|
Richard
E. Gathright,
Chairman
of the Board,
CEO
and President
|
500,000
25,000
|
0
0
75,000
|
0
|
1.50
1.45
1.28
|
12/21/2010
10/12/2014
10/8/2017
|
0
|
0
|
0
|
0
|
|
Michael S.
Shore,
CFO,
Senior V.P. and Treasurer
|
60,000
25,000
|
0
0
40,000
|
0
|
1.07
1.45
1.28
|
2/12/2012
10/12/2014
10/8/2017
|
0
|
0
|
0
|
0
|
|
Paul C.
Vinger,
Senior
V.P., Corporate Planning and Fleet Operations
|
1,000
50,000
25,000
|
0
0
0
40,000
|
0
|
1.50
1.50
1.45
1.28
|
12/28/2010
9/24/2011
10/12/2014
10/8/2017
|
0
|
0
|
0
|
0
|
|
E.
Wayne Wetzel,
Senior V.P., Lubricants
|
48,000
|
32,000
|
0
|
3.60
|
10/1/2015
|
0
|
0
|
0
|
0
|
|
Robert
W. Beard,
Senior V.P., Marketing & Sales and Investor Relations
Officer
|
30,000
5,000
|
20,000
20,000
10,000
|
0
|
2.37
1.55
1.28
|
7/21/2015
12/8/2016
10/8/2017
|
0
|
0
|
0
|
0
|
|
Timothy
E. Shaw,
Senior V.P., Information Services & Administration and Chief
Information Officer
|
24,000
2,000
5,000
|
16,000
8,000
20,000
10,000
|
0
|
2.98
1.70
1.55
1.28
|
4/6/2016
10/11/2016
12/8/2016
10/8/2017
|
0
|
0
|
0
|
0
|
Option
Exercises and Stock Vested
During
the fiscal year ended June 30, 2008, no amounts were received by the named
executive officers upon exercise or vesting of stock options.
Potential
Payments Upon Termination of Employment or Change in
Control
The
Company has no agreements with any of its named executive officers or with
any
other person that would require the Company to make any payments or provide
any
other consideration in the event of a transaction or other event resulting
in a
change in control of the Company.
Chief
Executive Officer. The
Company entered into an employment agreement (the “Agreement”) with Richard E.
Gathright, its Chief Executive Officer, on October 26, 2000, pursuant to which
Mr. Gathright serves as Chief Executive Officer and President of the Company.
That Agreement had a term of three years, commencing on October 26, 2000. On
September 25, 2003, the Company and Mr. Gathright amended the terms of the
Agreement extending it from three to four years and increasing his annual base
salary to $323,000. On September 23, 2004, the Company and Mr. Gathright
extended the term of the Agreement until October 31, 2005. In March 2005, the
Agreement was amended and restated and further extended to February 28, 2006,
and providing for automatic one year extensions thereafter unless either party
gives notice of intent not to renew prior to such extension. As amended and
restated, the Agreement provides for a minimum annual base salary of $323,000,
participation, with other members of management, in a bonus program whereby
up
to 10% of the Company’s pretax profits will be set aside for bonus payments, and
the grant of 500,000 options to purchase shares of the Company’s Common Stock at
a price of $1.50 per share. By its terms, Mr.
Gathright’s employment agreement is automatically renewed on an annual basis.
However,
the Company may terminate Mr. Gathright’s employment agreement at any time and
for any reason. If the Agreement is terminated by the Company without cause,
Mr.
Gathright shall be due a severance payment equal to the greater of all base
salary payable through the remaining term of the Agreement or eighteen months
base salary. At the end of fiscal 2008, the greater amount would be the eighteen
months salary, or $484,500. The agreement provides that the severance payment,
which may be paid in a lump sum or ratably over the term on which the payment
was calculated, as the Company elects, is subject to the limitations on
severance payments imposed by the American Jobs Creation Act of 1986 and Section
409A of the Internal Revenue Code. Those limits would generally require that
the
$484,500 cannot be paid to Mr. Gathright until six months after the termination
of his employment. The agreement provides, however, that if Mr. Gathright’s
severance payments are so deferred, however, he will not be bound by the
post-employment restrictions on non-competitive employment during the period
of
time that no payments are made, provided, however, that the Company has the
option of electing, at the time of termination, to pay Mr. Gathright an amount
equal to his salary for such six month period, or $161,500, in exchange for
his
being immediately bound by the non-competition covenant. Because the Agreement
provides that such an election by the Company also causes the maximum severance
benefit payable to Mr. Gathright to be reduced to twelve months base salary
rather than eighteen months base salary, the maximum amount of cash payments
that would be made to Mr. Gathright after a termination for cause would remain
at $484,500. If the agreement is terminated for cause, Mr. Gathright will not
be
entitled to the severance payments specified in the Agreement. Termination
of
the agreement on account of Mr. Gathright’s death or disability is treated as a
termination without cause so the severance payment would be $484,500 in either
event.
Mr.
Gathright’s agreement also provides that he is entitled to receive certain
severance benefits upon a termination without cause for the same period of
time
for which he is entitled to severance payments, though severance benefits may
not be paid in a lump sum like severance payments. In particular, Mr. Gathright
would be entitled to receive, at the Company’s expense, health insurance, an
automobile allowance and all other employee benefits for a period of eighteen
months after a termination without cause. If it is assumed that the Company’s
cost for the health insurance averages $1,500 per month over the eighteen month
period, that Mr. Gathright’s
automobile
allowance remains at the current level of $1,000 per month specified in the
agreement, that his reimbursement for continuing education expenses are $1,000
per year and that his entitlement to other miscellaneous employee benefits
does
not exceed $2,500 per year, then the value of the severance benefits to Mr.
Gathright for the eighteen month period would be $51,250.
These
estimate of the value of Mr. Gathright’s severance payments and severance
benefits upon a termination without cause are “forward looking statements” which
may prove to be inaccurate because they are based upon assumptions that may
not
prove to be correct. While the Company believes that all of those assumptions
are reasonable and does not believe that it has not made any other assumptions
other than those expressly stated above, stockholders and others should not
rely
on the accuracy of any forward looking statements in making a decision with
respect to the purchase or sale of the Company’s securities or how to vote their
shares of the Company’s stock.
E.
Wayne Wetzel.
When the Company acquired H & W Petroleum Company, Inc. in October 2005, it
entered into an employment agreement with E. Wayne Wetzel, who was the President
and former owner of H & W prior to the acquisition, to continue in that role
and to serve as Senior Vice President of Lubricants for the Company. The
five year agreement provides for an annual salary of $200,000 and a $700 monthly
car allowance. Under the agreement, the Company may not terminate Mr.
Wetzel’s employment before September 30, 2008 except for cause. While the
Company may terminate Mr. Wetzel’s employment without cause after that date, if
such termination occurs before September 30, 2010, the Company must engage
him
as a consultant to the Company for at least one (1) year after the termination
at rate of $200 per hour for at least 20 hours per week, or $208,000.
During the consulting period, Mr. Wetzel would continue to participate in the
Company’s health insurance plan, or comparable COBRA benefits, for the same cost
that he would pay if he were still an employee of the Company.
Accordingly, the Company believes that the total payments due to Mr. Wetzel
upon
a termination of his employment by the Company without cause at the end of
fiscal 2008 would have been approximately $271,975, comprised
of $50,000 for unpaid salary through September 30,
2008, $2,100 in automobile allowance through that date,
$208,000 for consulting services, $11,250 in health insurance contributions
(based on an average employer contribution of $750 during the 15 month period
ending September 30, 2009) and $625 in miscellaneous employee benefits
(based on annual cost of $2,500 over the 3 month period ending September 30,
2008. Of that amount, however, $208,000 would only be paid if Mr. Wetzel in
fact
provides the consulting services or the Company declines to accept such
services.
As
the
term of Mr. Wetzel’s agreement passes, the amount payable for a termination
without cause declines.
Under
the
agreement, if Mr. Wetzel’s employment is terminated by the Company prior to
September 30, 2008, because of disability, the Company would be required to
engage him as a consultant for six months after termination on the same terms
described above, for a total estimated cost of $104,000. If Mr. Wetzel dies
prior to that date, the agreement provides that his estate is to receive at
least $100,000 in proceeds from a Company supplied insurance policy on his
life,
the cost of which is included in the $2,500 in miscellaneous benefits described
above.
Michael
S. Shore.
By
letter agreement dated February 7, 2002, the Company and Mr. Shore agreed to
his
employment as the Company’s Chief Financial Officer and Senior Vice President at
an
initial
base salary of $125,000 per annum. The letter agreement also provides that
the
Company will give Mr. Shore six months notice prior to terminating his
employment without cause and that Mr. Shore will give a corresponding six month
notice to the Company prior to any resignation. As of the end of fiscal 2008,
Mr. Shore’s base salary was $175,000. The Company therefore estimates its
liability for terminating Mr. Shore’s employment at the end of fiscal 2008 would
have been no greater than $97,750, comprised of a maximum of $87,500 for six
months salary, $6,000 in auto allowance, $3,000 in employer health insurance
contributions (based on an average of $500 per month over a 6 month period)
and
$1,250 in miscellaneous employee benefits (based on a $2,500 annual estimate
of
such benefits). Mr.
Shore’s entitlement to such payments and compensation would, however, require
him to continue to provide services as a full time employee for the six month
period unless the Company declines to accept those services.
Other
Named Executive Officers.
None of
the other named executive officers have entered into any written agreements
with
respect to the termination of their employment by the Company except that Paul
Vinger and the Company intend to abide by an informal agreement with respect
to
notice of termination substantially identical to the agreement between Mr.
Shore
and the Company. Accordingly, the Company estimates its liability for
terminating Mr. Vinger’s employment at the end of fiscal 2008 would have
been no greater than $84,250, comprised of a maximum of $74,000 for six months
salary, $6,000 in auto allowance, $3,000 in employer health insurance
contributions (based on an average of $500 per month over a 6 month period)
and
$1,250 in miscellaneous employee benefits (based on a $2,500 annual estimate
of
such benefits). Like
Mr.
Shore, Mr. Vinger's entitlement to such payments and compensation would,
however, require him to continue to provide services as a full time employee
for
the six month period unless the Company declines to accept those
services.
NON-EMPLOYEE
DIRECTOR COMPENSATION
The
Company compensates each non-employee director with a director’s fee of $2,000
per quarter. In addition, the Company’s directors are reimbursed for any
out-of-pocket expense incurred by them for attendance at meetings of the Board
of Directors or committees thereof. Because Mr. Goldberg serves as Chairman
of
the Audit Committee, he receives an additional fee of $4,000 per quarter.
Because Mr. Moore serves as Chairman of the Compensation and Nominating and
Corporate Governance Committees, he receives additional fees of $2,500 and
$1,500 per quarter, respectively, for serving as Chairman of these
committees.
Each
non-employee who served as a member of the Company’s Board of Directors as of
May 10, 2001, the effective date of the Directors Plan, and each non-employee
who is elected or otherwise appointed as one of the Company’s directors
thereafter, received a fully vested option to purchase 20,000 shares of stock
at
an exercise price which
was
equal to the Fair Market Value (as determined under the Plan) of a share of
stock on the Grant Date.
In
addition, on the last day of each fiscal quarter while the Directors Plan is
in
effect, each non-employee director receives an additional grant of an option
to
purchase 1,500 shares at an exercise price which
is
equal to the Fair Market Value (as determined under the Plan) of a share of
stock on the Grant Date.
Prior
to March 31, 2007, the grant was 725 shares. Further, in accordance with
the Directors Plan, additional options may be granted to non-employee directors
from time to time on a discretionary basis.
The
following table discloses the cash, equity awards and other compensation earned,
paid or awarded, as the case may be, to each of the Company’s non-employee
Directors during the fiscal year ended June 30, 2008
|
Name
|
Fees
Earned or Paid in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
(1)
|
Non-Equity
Incentive Plan Compensation
($)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
|
All
Other Compensation
($)
(2)
|
Total
($)
|
|
Wendell R.
Beard
|
24,000
(3)
|
0
|
4,493
|
0
|
0
|
0
|
28,493
|
|
Steven R.
Goldberg
|
24,000
(4)
|
0
|
4,493
|
0
|
0
|
0
|
28,493
|
|
Nat
Moore
|
34,000
(5)
|
0
|
4,493
|
0
|
0
|
0
|
38,493
|
|
Larry S.
Mulkey
|
8,000
|
0
|
4,493
|
0
|
0
|
355
|
12,848
|
|
C.
Rodney O’Connor
|
8,000
|
0
|
4,493
|
0
|
0
|
862
|
13,355
|
|
Robert S.
Picow
|
8,000
|
0
|
4,493
|
0
|
0
|
0
|
12,493
|
|
(1)
|
The
amounts in this column reflect the aggregate grant date fair value
under
SFAS 123(R) of awards made during the fiscal year ended June 30,
2008. The
assumptions we use in calculating these amounts are discussed in
Note 2 -
Summary of Significant Accounting Policies on Stock-Based Compensation
to
the Consolidated Financial Statements included in the Company's Form
10-K for the year ended June 30, 2007.
|
The
aggregate number of outstanding option awards for each director as of June
30,
2008, was as follows: Mr. Beard - 43,150 options; Mr. Goldberg - 33,150 options;
Mr. Moore - 31,175 options; Mr. Mulkey - 40,025 options; Mr. O’Connor - 43,150
options; and Mr. Picow - 43,150 options.
| (2) |
This
column represents reimbursable out-of-pocket expenses incurred in
connection with activities as a
Director.
|
| (3) |
Includes
a $4,000 payment per quarter for management consultation and oversight
duties.
|
| (4) |
Includes
a $4,000 payment per quarter for duties as the Chairman of the Audit
Committee.
|
|
(5)
|
Includes
a $2,500 payment per quarter for duties as the Chairman of the
Compensation Committee, a $1,500 payment per quarter as Chairman
of the
Nominating & Corporate Governance Committee and $10,000 earned in
prior fiscal year but paid this fiscal
year.
|
Securities
Authorized for Issuance under Equity Compensation Plans
EQUITY
COMPENSATION PLAN INFORMATION AT
JUNE 30, 2008
|
Plan
Category
|
Number
of securities to be issued upon exercise of
outstanding
options, warrants and rights
(a)
|
Weighted
average exercise price of outstanding options, warrants and
rights
(b)
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
(c)
|
|
Equity
compensation plans approved by security holders
|
1996
Employee Stock Option Plan - 42,052
2000
Employee Stock Option Plan - 1,605,400(1)
2001
Directors Stock Option Plan - 349,650
|
$
5.92
$
1.67
$
1.66
|
-0-
261,053
350
|
|
Equity
compensation plans not approved by security holders
|
Not
Applicable
|
Not
Applicable
|
Not
Applicable
|
|
Total
|
1,997,102
|
$
1.76
|
261,403
|
|
(1)
|
Under
the 2000 Plan, 1,000,000 shares of Common Stock are reserved for
issuance
upon the exercise of options, with the amount reserved being increased
each year by ten percent of the total shares subject to the 2000
Plan at
the end of the previous calendar
year.
|
OTHER
MATTERS
As
of the
date of this proxy statement, the Board of Directors does not intend to present
at the annual meeting any matters other than those described herein and does
not
presently know of any matters that will be presented by other parties. If any
other matter requiring a vote of the stockholders should come before the
meeting, it is the intention of the persons named in the proxy to vote with
respect to any such matter in accordance with the recommendation of the Board
of
Directors or, in the absence of such a recommendation, in accordance with the
best judgment of the proxy holder.
STOCKHOLDER
PROPOSALS
Stockholders
interested in presenting a proposal for consideration at our 2009 annual meeting
of Stockholders may do so by following the procedures prescribed in Rule 14a-8
promulgated by the Securities and Exchange Act of 1934, as amended, and our
Bylaws. Shareholder proposals must be submitted, in writing, to the Corporate
Secretary of the Company at 200 West Cypress Road, Suite 400, Fort Lauderdale,
Florida 33309. To
be
eligible for inclusion in our proxy statement and form of proxy relating to
the
2009 annual meeting, our Corporate Secretary must receive shareholder proposals
no later than August 26, 2009. If the date of the 2009 annual meeting is
advanced by more than 30 days or delayed (other than as a result of adjournment)
by more than 60 days from the anniversary of the November 24, 2008 annual
meeting, any such proposals must be submitted no later than the close of
business on the later of the 90th day prior to the 2009 annual meeting or the
10th day following the day on which public announcement of the date of such
meeting is first made. You can obtain a copy of the Company’s Bylaws by writing
to the Corporate Secretary at the address stated above.
We
reserve the right to reject, rule out of order, or take other appropriate action
with respect to any proposal or nomination that does not comply with these
and
other applicable requirements.
By
Order
of the Board of Directors
LOUISE
P. LUNGARO
Secretary
Ft.
Lauderdale, Florida
July
24,
2008
APPENDIX
A
CERTIFICATE
OF AMENDMENT TO THE
CERTIFICATE
OF INCORPORATION
OF
SMF
ENERGY CORPORATION
SMF
ENERGY CORPORATION, a corporation organized and existing under the laws of
the
State of Delaware, hereby certifies as follows:
FIRST:
The name of this corporation is SMF Energy Corporation.
SECOND:
The Certificate of Incorporation of the corporation, filed on October 6,
2006 and amended by the Certificate of Amendment to the Certificate of
Incorporation filed on February 12, 2007 (collectively, the “Certificate”),
shall be amended as set forth in this Certificate of Amendment.
THIRD:
The Board of Directors of SMF Energy Corporation, by the unanimous consent
of
its members, adopted resolutions declaring advisable the following amendment
to
the Certificate of Incorporation:
Article
4
of the Certificate is amended by adding the following section to the end of
Article 4:
“(c)
Effective as of [ * ], Eastern Time, on [ * ], (the
“Effective Date”), each [ * ] shares of the Company’s Common Stock,
par value $0.01 per share, issued and outstanding shall, automatically and
without any action on the part of the respective holders thereof, be combined
and converted into one (1) share of Common Stock, par value $0.01 per
share, of the Company. No fractional shares shall be issued in connection with
the reverse split and in lieu thereof, a whole share shall be issued in lieu
of
any fractional shares.”
FOURTH:
This Certificate of Amendment and the amendments set forth herein have been
duly
adopted in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, SMF Energy Corporation has caused this certificate to be signed
by Richard E. Gathright, its Chief Executive Officer and President, this
____ day of ______, 200__.
SMF
Energy Corporation
Richard
E. Gathright, Chief Executive Officer and President
SMF
ENERGY CORPORATION
This
Proxy is Solicited on Behalf of the Board of Directors
For
the Annual Meeting of Stockholders on November 24, 2008
The
undersigned hereby appoints Richard E. Gathright and Michael S. Shore, and
each
of them as proxies, each with full power of substitution and authorizes them
to
represent and to vote as designated on the reverse side of this form, all the
shares of Common Stock of SMF Energy Corporation held of record by the
undersigned on September 25, 2008, at the annual meeting of Stockholders to
be
held on November 24, 2008, at 9:00 a.m. local time
at the Company’s Corporate Offices, 200 West Cypress Creek Rd., Suite 400, Fort
Lauderdale, Florida,
or any
adjournment or postponement of such meeting.
THIS
PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR
THE PROPOSALS LISTED HEREIN.
(Continued
and to be signed on the reverse side)
ANNUAL
MEETING OF STOCKHOLDERS OF
SMF
ENERGY CORPORATION
November
24, 2008
Please
date, sign and mail your proxy card in the
envelope
provided as soon as possible!
ê
Please
detach along perforated line and mail in the envelope provided ê
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2, 3, 4
and 5. PLEASE SIGN,
DATE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE
OR
BLACK INK AS SHOWN HERE x
|
1.
TO APPROVE AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO
EFFECT A REVERSE STOCK SPLIT OF THE COMPANY’S COMMON STOCK AT A SPECIFIC
RATE TO BE DETERMINED BY THE BOARD OF DIRECTORS IN ITS DISCRETION,
WITHIN
12 MONTHS FROM THE ANNUAL MEETING AND WITHIN A RANGE OF NOT LESS THAN
2 to 1 AND NOT MORE THAN 5 to 1.
£ FOR
£ AGAINST
£ ABSTAIN
|
4.
ELECTION OF DIRECTORS:
NOMINEES:
O
WENDELL R. BEARD
O
RICHARD E. GATHRIGHT
O
STEVEN R. GOLDBERG
O
LARRY S. MULKEY
O
C. RODNEY O’CONNOR
O
ROBERT S. PICOW
O
NAT MOORE
£
FOR ALL NOMINEES
£
WITHHOLD AUTHORITY
FOR
ALL NOMINEES
£
FOR ALL EXCEPT
(See
instructions below)
INSTRUCTION:
To withhold authority to vote for any for any individual nominee(s),
mark
“FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to
withhold, as shown here. l
|
|
2.
TO
APPROVE AN AMENDMENT TO THE 2001 DIRECTOR STOCK OPTION PLAN TO INCREASE
THE AMOUNT OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE FROM 350,000
TO
500,000 (PRE-SPLIT), OR 70,000 TO 100,000 (POST THE MAXIMUM 5 TO
1
SPLIT).
£ FOR
£ AGAINST
£ ABSTAIN
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5.
THE
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS SMF ENERGY
CORPORATION’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
£ FOR
£ AGAINST
£
ABSTAIN
|
|
3.
TO APPROVE AN AMENDMENT TO THE 2000 STOCK OPTION PLAN TO INCREASE
THE
AMOUNT OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE FROM 1,000,000
TO
2,500,000 (PRE-SPLIT), OR 200,000 TO 500,000 (POST THE MAXIMUM 5
TO 1
SPLIT).
£ FOR
£ AGAINST
£ ABSTAIN
|
6.
IN THEIR DISCRETION, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE
THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.
£ FOR
£ AGAINST
£
ABSTAIN
|
|
|
|
|
|
|
|
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PLEASE
MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE
PROVIDED. NO POSTAGE NECESSARY IF MAILED WITHIN THE UNITED
STATES.
|
|
To
change the address on your account, please check the box and indicate
your
new address in the address space to the right. Please note that changes
to
the registered name(s) on the account may not be submitted via this
method. £
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NEW
ADDRESS:
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Signature
of Stockholder:___________________Date:__________Signature of
Stockholder:__________________Date: __________
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NOTE:
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Please
sign exactly as your name or names appear on this Proxy. When shares
are
held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title
as
such. If the signer is a corporation, please sign full corporate
name by
duly authorized officer, giving full title as such. If signer is
a
partnership, please sign in partnership name by authorized
person.
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