SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange
Act of 1934 (Amendment
No. )
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Filed
by the Registrant
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Filed
by a Party other than the Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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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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New
Generation Biofuels Holdings, Inc.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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fee required.
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Fee
computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
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Title
of each class of securities to which transaction
applies:
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number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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Amount
Previously Paid:
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Form,
Schedule or Registration Statement No.:
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Party:
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NEW
GENERATION BIOFUELS HOLDINGS, INC.
1000
Primera Boulevard
Lake
Mary, Florida 32746
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
Dear
Shareholders:
On
behalf
of the Board of Directors of New Generation Biofuels Holdings, Inc., it is
my
pleasure to invite you to our 2008 Annual Meeting of Shareholders. The Annual
Meeting will be held on Tuesday, August 5, 2008, at 9:00 a.m., Eastern Time,
at
our new corporate headquarters, 1000 Primera Boulevard, Lake Mary, Florida
32746. The Annual Meeting has been called for the following
purposes:
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1.
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Election
of the six nominees named in the attached proxy statement as directors
to
serve on our Board of Directors for a one-year term ending at next
year’s
Annual Meeting;
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2.
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Ratification
of the appointment of Imowitz Koenig & Co., LLP as our independent
registered public accounting firm for 2008;
and
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3.
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Consideration
of any other business properly brought before the meeting, or any
adjournment or postponement.
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Shareholders
of record at the close of business on June 16, 2008 are entitled to notice
of,
and to vote at, the Annual Meeting or any adjournment or
postponement.
This
proxy statement and the enclosed proxy card are first being mailed to our
shareholders on or about June 30, 2008.
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By
Order of the Board of Directors,
David
A. Gillespie
President
and Chief Executive Officer
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Dated:
June 27, 2008
YOUR
VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE POSTAGE-PAID
ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY AND
VOTE
YOUR SHARES IN PERSON.
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TABLE
OF CONTENTS
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Page
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PROXY
STATEMENT
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1
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Questions
and Answers About Proxy Materials and Voting
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1
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PROPOSALS
REQUIRING YOUR VOTE
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Proposal
1: Election of Directors
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6
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Proposal
2: Ratification of the Appointment Independent Registered Public
Accounting Firm
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8
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CORPORATE
GOVERNANCE AND THE BOARD OF DIRECTORS
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Independence
of the Board of Directors
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10
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Meetings
of the Board of Directors
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10
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Committees
of the Board of Directors
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10
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Audit
Committee
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10
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Compensation
Committee
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12
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Nominating
Committee
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12
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Communications
with Board of Directors
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Code
of Business Conduct and Ethics
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EXECUTIVE
OFFICERS
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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TRANSACTIONS
WITH RELATED PARTIES
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SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
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SHAREHOLDER
PROPOSALS FOR THE ANNUAL MEETING
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ANNUAL
REPORT
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HOUSEHOLDING
OF PROXY MATERIALS
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OTHER
MATTERS
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25
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NEW
GENERATION BIOFUELS HOLDINGS, INC.
1000
Primera Boulevard
Lake
Mary, Florida 32746
FOR
THE 2008 ANNUAL MEETING OF SHAREHOLDERS
To
Be Held On August 5, 2008
QUESTIONS
AND ANSWERS ABOUT PROXY MATERIALS AND VOTING
Why
am I receiving these materials?
You
are
receiving this proxy statement and the enclosed proxy card because the Board
of
Directors of New Generation Biofuels Holdings, Inc. (“Company,” “we,” “us,” or
“our”) is soliciting your proxy, as the shareholder of record, to vote at the
2008 Annual Meeting of Shareholders. As of June 16, 2008, you are a shareholder
of record because you own shares of our common stock or our Series A Cumulative
Convertible Preferred Stock (“Series A Preferred Stock”) or Series B Cumulative
Convertible Preferred Stock (“Series B Preferred Stock” and collectively with
the Series A Preferred Stock, the “Preferred Stock.”)
Who
may vote at the Annual Meeting?
Only
shareholders of record at the close of business on June 16, 2008 will be
entitled to vote at the Annual Meeting. As of June 16, 2008, there were a total
of 21,563,857 shares of common stock and Preferred Stock outstanding and
entitled to vote (on an as converted basis), including 18,872,712 shares of
common stock, 29,900 shares of Series A Preferred Stock (which are convertible
into 822,778 shares of common stock including accrued but unissued dividend
shares) and 79,405 shares of Series B Preferred Stock (which are convertible
into 1,868,367 shares of common stock).
Shareholder
of Record: Shares Registered in Your Name
If,
on
June 16, 2008, your shares were registered directly in your name with our
transfer agent, Olde Monmouth Stock Transfer Co. Inc., then you are a
shareholder of record. As a shareholder of record, you may vote in person at
the
meeting or vote by proxy. Whether or not you plan to attend the meeting, we
urge
you to fill out and return the enclosed proxy card by mail or vote by proxy
over
the telephone or the Internet as instructed below to ensure your vote is
counted.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
If,
on
June 16, 2008, your shares were held, not in your name, but rather in an
account at a brokerage firm, bank, dealer, or other similar organization, then
you are the beneficial owner of shares held in “street name” and these proxy
materials are being forwarded to you by that organization. The organization
holding your account is considered to be the shareholder of record for purposes
of voting at the Annual Meeting. As a beneficial owner, you have the right
to
direct your broker or other agent regarding how to vote the shares in your
account. You are also invited to attend the Annual Meeting. However, since
you
are not the shareholder of record,
you
will
need to present a valid picture identification, such as a driver’s license or
passport, and proof of share ownership, such as a bank or brokerage account
statement reflecting your ownership as of the record date, before being admitted
to the Annual Meeting. In addition,
you
may
not vote your shares in person at the meeting unless you request and obtain
a
valid proxy from your broker or other agent.
What
am I voting on?
There
are
two matters scheduled for a vote:
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Election
of the six director nominees named in this proxy statement;
and
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Ratification
of the appointment of Imowitz Koenig & Co., LLP as our independent
registered public accounting firm for
2008.
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Will
any other matters be voted on?
As
of the
date of this proxy statement, we do not know of any other matters that will
be
presented for consideration at the Annual Meeting other than those matters
discussed in this proxy statement. If any other matters properly come before
the
meeting and call for a shareholder vote, valid proxies will be voted by the
holders of the proxies in their own discretion.
How
does the Board of Directors recommend that I vote?
The
Board
of Directors recommends that you vote:
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“FOR”
the six director nominees named in this proxy statement;
and
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“FOR”
the ratification of the appointment of Imowitz Koenig & Co., LLP as
our independent registered public accounting firm for
2008.
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Who
is paying for this proxy solicitation?
We
will
bear the cost of soliciting proxies, including preparation, assembly, printing
and mailing of this proxy statement, the proxy card and any additional
information furnished to shareholders. Copies of solicitation materials will
be
furnished to banks, brokerage houses, fiduciaries and custodians holding in
their names shares of our common stock beneficially owned by others to forward
to such beneficial owners. We may reimburse persons representing beneficial
owners of our common stock for their costs of forwarding solicitation materials
to such beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone or personal solicitation by our directors, officers
or
other employees. No additional compensation will be paid to directors, officers
or other employees for such services.
How
many shares must be present to hold the Annual Meeting?
A
quorum
of shareholders is necessary to hold a valid meeting. A quorum will be present
if shareholders holding at least a majority of the outstanding shares of common
stock and Preferred Stock (on an as converted basis) are present at the meeting
in person or represented by proxy. As of June 16, 2008, there were a total
of
21,563,857 shares of common stock and Preferred Stock outstanding and entitled
to vote (on an as converted basis), including 18,872,712 shares of common stock,
29,900 shares of Series A Preferred Stock (which are convertible into 822,778
shares of common stock including accrued but unissued dividend shares) and
79,405 shares of Series B Preferred Stock (which are convertible into 1,868,367
shares of common stock including accrued but unissued dividend shares). Thus,
the holders of 10,781,929
shares
must be present in person or represented by proxy at the meeting to have a
quorum.
Your
shares will be counted towards the quorum only if you submit a valid proxy
(or
one is submitted on your behalf by your broker, bank or other nominee) or if
you
vote in person at the meeting. Abstentions and broker non-votes will be counted
towards the quorum requirement.
You
may
either vote “For” all the nominees to the Board of Directors or you may
“Withhold” your vote for any nominee you specify. For any other matter to be
voted on, you may vote “For” or “Against” or abstain from voting. The procedures
for voting are fairly simple:
Shareholder
of Record: Shares Registered in Your Name
If
you
are a shareholder of record, you may a) vote in person at the Annual Meeting,
b)
vote by proxy using the enclosed proxy card, c) vote by proxy over the
telephone, or d) vote by proxy on the Internet. Whether or not you plan to
attend the meeting, we urge you to vote by proxy to ensure your vote is counted.
You may still attend the meeting and vote in person even if you have already
voted by proxy.
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To
vote in person, come to the Annual Meeting and we will give you a
ballot
when you arrive.
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To
vote using the proxy card, simply complete, sign and date the enclosed
proxy card and return it promptly in the envelope provided. If you
return
your signed proxy card to us before the Annual Meeting, we will vote
your
shares as you direct.
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To
vote over the telephone, dial toll-free 1-800-690-6903 using a touch-tone
phone and follow the recorded instructions. You will be asked to
provide
the company number and control number from the enclosed proxy card.
Your
vote must be received by 11:59 p.m., Eastern Time on August 4, 2008,
to be
counted.
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To
vote on the Internet, go to
www.proxyvote.com
to
complete an electronic proxy card. You will be asked to provide the
company number and control number from the enclosed proxy card. Your
vote
must be received by 11:59 p.m., Eastern Time on August 4, 2008, to
be
counted.
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Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
you
are a beneficial owner of shares registered in the name of your broker, bank,
or
other agent, you should have received a proxy card and voting instructions
with
these proxy materials from that organization rather than from us. Simply
complete and mail the proxy card and voting instructions to ensure that your
vote is counted. Alternatively, you may vote by telephone or over the Internet
as instructed by your broker or bank. To vote in person at the Annual Meeting,
you must obtain a valid proxy from your broker, bank, or other agent. Follow
the
instructions from your broker or bank included with these proxy materials,
or
contact your broker or bank to request a proxy form.
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We
provide Internet proxy voting to allow you to vote your shares
online,
with procedures designed to ensure the authenticity and correctness
of
your proxy vote instructions. However, please be aware that you
must bear
any costs associated with your Internet access, such as usage charges
from
Internet access providers and telephone
companies.
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How
many votes do I have?
At
the
Annual Meeting, holders of our common and Preferred Stock vote together as
a
single class, on an as converted basis. As of the record date, votes per share
on each matter scheduled for a vote are as follows:
each
Share of Convertible Preferred Stock entitled to one vote for each share of
Common Stock issuable upon conversion of the Convertible Preferred Stock
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Each
share of common stock is entitled to one
vote;
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Each
share of Series A Preferred Stock is entitled to 25 votes, plus additional
votes based on accrued but unissued
dividends;
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Each
share of Series B Preferred Stock is entitled to 24
votes.
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What
if I return a proxy card but do not make specific choices?
If
you
return a signed and dated proxy card without marking any voting selections,
your
shares will be voted:
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“For”
the election of all six nominees names in this proxy statement as
directors; and
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“For”
ratification of Imowitz Koenig & Co., LLP as our independent
registered public accounting firm for
2008.
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In
addition, if any other matter is properly presented at the meeting, your
proxyholder (one of the individuals named on your proxy card) will vote your
shares in their own discretion.
What
does it mean if I receive more than one proxy card?
If
you
receive more than one proxy card, your shares are registered in more than one
name or are registered in different accounts. Please complete, sign and return
each proxy card to ensure that all of your shares are voted.
Can
I change my vote after submitting my proxy?
Yes.
You
can revoke your proxy at any time before the final vote at the Annual Meeting.
If you are the shareholder of record, you may revoke your proxy in any one
of
four ways:
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(1)
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You
may submit another properly completed proxy card with a later
date;
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(2)
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You
may enter a new vote over the Internet or by
telephone;
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(3)
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You
may send a timely written notice that you are revoking your proxy
to New
Generation Biofuels Holdings, Inc., 1000 Primera Boulevard, Lake
Mary,
Florida 32746, Attention: David A. Gillespie;
or
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(4)
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You
may attend the Annual Meeting and vote in person. Simply attending
the
meeting will not, by itself, revoke your
proxy.
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If
your
shares are held by your broker or bank as a nominee or agent, you should follow
the instructions provided by your broker or bank.
How
do I vote my shares without attending the Annual Meeting?
A
proxy
for use at the Annual Meeting and a return envelope are enclosed. Shares of
our
common stock and Preferred Stock (on an as converted basis) represented by
a
properly executed proxy, if such proxy is received in time and not revoked,
will
be voted at the Annual Meeting according to the instructions indicated in the
proxy. If no instructions are indicated, the shares will be voted “FOR” approval
of each proposal considered at the Annual Meeting. Discretionary authority
is
provided in the proxy as to any matters not specifically referred to in the
proxy. We are not aware of any other matters that are likely to be brought
before the Annual Meeting. If any other matter is properly presented at the
Annual Meeting for action, the persons named in the accompanying proxy will
vote
on such matter in their own discretion.
How
do I vote my shares in person at the Annual Meeting?
Even
if
you plan to attend the Annual Meeting, we encourage you to vote by signing,
dating and returning the enclosed proxy card so your vote will be counted if
you
are unable to, or later decide not to, attend the Annual Meeting. If you are
a
shareholder of record, you may vote in person by marking and signing the ballot
to be provided at the Annual Meeting. If you hold your shares in “street name”,
you must obtain a proxy in your name from your bank, broker or other shareholder
of record in order to vote by ballot at the Annual Meeting.
How
are votes counted?
Votes
will be counted by the inspector of election appointed for the meeting, who
will
separately count “For” and “Withhold” and, with respect to proposals other than
the election of directors, “Against” votes, abstentions and broker
non-votes.
What
are “broker non-votes”?
Generally,
if shares are held in “street name,” the beneficial owner of the shares is
entitled to give voting instructions to the broker or nominee holding the
shares. Broker-dealers who hold their customers’ shares in “street name” may,
under the applicable rules of the exchange and other self-regulatory
organizations of which the broker-dealers are members, sign and submit proxies
for such shares and may vote such shares on routine matters, which typically
include the election of directors. Broker-dealers may not vote such shares
on
other “non-routine” matters without specific instructions from the customers who
beneficially own such shares. Broker non-votes occur when a beneficial owner
of
shares held in “street name” does not give instructions to the broker or nominee
holding the shares as to how to vote on matters deemed “non-routine.” If the
beneficial owner does not provide voting instructions, the broker or nominee
can
still vote the shares with respect to matters that are considered to be
“routine,” but not with respect to “non-routine” matters. Each of the proposals
scheduled for a vote at the Annual Meeting is considered “routine” under the
American Stock Exchange (“AMEX”) rules.
How
many votes are needed to approve each proposal?
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Election
of Directors
:
Directors will be elected by a plurality of votes cast. Plurality
means
that the individuals who receive the largest number of “For” votes cast
are elected as directors up to the maximum number of directors to
be
chosen at the meeting. Accordingly, the six nominees receiving the
most
“For” votes will be elected as directors. Abstentions and broker non-votes
will not affect the outcome of the election of directors.
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Ratification
of the Appointment of Imowitz Koenig & Co., LLP
:
The ratification of Imowitz Koenig & Co., LLP as our independent
registered public accounting firm for 2008 will require the “For” votes
cast to exceed the “Against” votes cast. Abstentions are not counted as
votes cast and they will have no effect on the vote. Similarly, broker
non-votes will have no effect on the
vote.
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How
can I find out the results of the voting at the Annual
Meeting?
Preliminary
voting results will be announced at the Annual Meeting. Final voting results
will be disclosed in our quarterly report on Form 10-Q for the third
quarter of 2008.
PROPOSAL 1
ELECTION
OF DIRECTORS
Our
bylaws provide for no less than one and no more than ten directors. Our Board
of
Directors currently consists of six members, each with terms expiring at the
2008 Annual Meeting. Each director to be elected will hold office until the
next
Annual Meeting of Shareholders and until his successor is elected, or, if
sooner, until the director’s death, resignation or removal. Each of the nominees
listed below is currently one of our directors and has previously been elected
by the shareholders.
Vote
Required
Directors
are elected by a plurality of the votes. The six nominees receiving the highest
number of affirmative votes will be elected. Shares represented by executed
proxies will be voted, if authority to do so is not withheld, for the election
of the six nominees named below. If at the time of the 2008 Annual Meeting
any
of the nominees named below is unable to serve, the discretionary authority
provided in the proxy will be exercised to vote for the substitute nominee
or
nominees, if any, as shall be designated by the Board of Directors. Each nominee
has agreed to serve if elected. Our management has no reason to believe that
any
nominee will be unable to serve.
Our
Recommendation
THE
BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE FOLLOWING
NOMINEES:
Nominees:
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Name
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Age
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Position
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Lee
S. Rosen
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54
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Chairman
of the Board of Directors
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David
A. Gillespie
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47
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President,
Chief Executive Officer and Director
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Phillip
E. Pearce
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79
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Director
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John
E. Mack
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60
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Director
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James
R. Sheppard, Jr.
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60
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Director
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Steven
F. Gilliland
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57
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Director
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The
following is a brief biography of each nominee for director:
Lee
S. Rosen
is the
founder of H2Diesel, Inc., our wholly owned subsidiary now known as New
Generation Biofuels, Inc., and has served as the Chairman of the Board since
February 2006. Mr. Rosen has been engaged as a private investor and business
and
financial consultant for the last five years. Mr. Rosen has been involved in
the
financial and securities brokerage industry since 1980 and has worked as a
broker dealer with a number of firms.
David
A. Gillespie
has
served as a Director and as President and Chief Executive Officer since October
2006. From 2001 to 2006, Mr. Gillespie served as a Vice President--Business
Development and Asset Management of Duke Energy Corporation, a Fortune 500
energy company with business units that included regulated gas pipeline and
electric utilities, natural gas liquids processing, and domestic and
international merchant energy. In this position Mr. Gillespie developed and
led
all aspects of Duke Energy North America’s 8000 megawatt $3 billion power
generation business in the western United States and in Canada. Mr. Gillespie
received his MBA from the Rensselaer Polytechnic Institute and his bachelor’s
degree in mechanical engineering from the Worcester Polytechnic
Institute.
Phillip
E. Pearce
has
served as a Director since November 2006. Mr. Pearce has been a Principal with
Phil E. Pearce & Associates, an independent business consulting firm since
1990. He previously served as Senior Vice President and a Director of E.F.
Hutton, Chairman of the Board of Governors of the National Association of
Securities Dealers and was closely involved in the formation of NASDAQ. Mr.
Pearce has served as a Governor of the New York Stock Exchange and a member
of
The Advisory Council to the United States Securities and Exchange Commission
on
the Institutional Study of the Stock Markets.
John
E. Mack
has
served as a Director since February 2007. Mr. Mack has over 30 years of
international banking, financial business management and mergers and
acquisitions experience, and has worked closely with investment bankers and
external advisors with regard to the sale of international import-finance
products to domestic customers. He currently serves as a Director of HBOSplc,
an international banking group based in the United Kingdom and parent
company of the Bank of Scotland, Incapital Holdings, LLC, and Strategic
Solutions, Inc. From November 2002 through September 2005, Mr. Mack served
as
Senior Managing Executive Officer and Chief Financial Officer of Shinsei Bank,
Limited of Tokyo, Japan. Prior to joining Shinsei Bank and for more than
twenty-five years Mr. Mack served in senior management positions at Bank of
America and its predecessor companies, including twelve years as Corporate
Treasurer. Mr. Mack is also a member of the Board of Directors of HBOS plc,
Incapital Holdings LLC and Wilson TurboPower. Mr. Mack holds an MBA from the
University of Virginia and received his bachelor’s degree in economics from
Davidson College.
James
R. Sheppard, Jr.
has
served as a Director since August 2007. Mr. Sheppard has been the Managing
Director of J.R. Sheppard & Company LLC, a consulting firm, since 2002. Mr.
Sheppard’s current assignment, initiated by the Infrastructure Experts Group, an
organization formed under the auspices of the United Nations (UN), is to arrange
capital markets financing for up to two developing-country infrastructure
projects as part of a Demonstration Project financed by the Swiss Agency for
Cooperation and Development. In his capacity as Managing Director, Mr. Sheppard
has also worked as a consultant for The World Bank on projects including
advising on structures to mitigate foreign exchange risk for electric power
and
water projects in developing countries and concerning application of partial
risk guarantees in the transport sector and local capital markets financing
for
infrastructure. Mr. Sheppard holds a JD and an MBA from the University of North
Carolina at Chapel Hill. He is a member of the North Carolina Bar and was a
member of the Task Force on US Participation in Multilateral Development Banks,
as well as the Financing Project Advisory Committee for the North Carolina
Alternative Energy Corporation.
Steven
F. Gilliland
has
served as a Director since August 2007. Mr. Gilliland has served as the
Executive Vice President of Operations for Synenco Energy Inc., a Canadian
oil
sands energy company, since 2004. Additionally, Mr. Gilliland is the founder,
President, Chief Executive Officer and Director of Federal Power Company, LLC
and Federal Power Kings County, LLC, which is focused upon strategic power
generation opportunities including greenfield and brownfield development,
divestitures, and energy industry consulting. Mr. Gilliland was employed at
Duke
Energy Corporation, since 1996 in varying capacities, most recently as Senior
Vice President-Asset Management for Duke Energy North America (DENA). Mr.
Gilliland holds an MBA from the Harvard Business School, a masters degree in
architecture and urban planning from Princeton University and a bachelors degree
in architecture from the University of Virginia.
PROPOSAL 2
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The
Audit
Committee of the Board of Directors has appointed Imowitz Koenig & Co., LLP
(“Imowitz Koenig”) as our independent registered public accounting firm for
2008, and has further directed that management submit the selection of
independent auditors for ratification by the shareholders at the Annual Meeting.
Imowitz Koenig has audited our financial statements since 2006. Representatives
of Imowitz Koenig are expected to be present by telephone or in person at
the 2008 Annual Meeting. The representatives will have an opportunity to make
a
statement if they so desire and will be available to respond to appropriate
questions.
Shareholder
ratification of the selection of Imowitz Koenig as our independent registered
public accounting firm is not required by law, our bylaws or other governing
documents. However, the Audit Committee is submitting the appointment of Imowitz
Koenig to the shareholders for ratification as a best corporate practice. If
the
shareholders fail to ratify the appointment, the Audit Committee will reconsider
whether or not to retain Imowitz Koenig. Even if the appointment is ratified,
the Audit Committee in its discretion may appoint a different independent
registered public accounting firm at any time during the year if the Audit
Committee determines that such a change would be in the best interests of our
company and our shareholders.
Vote
Required
The
ratification of Imowitz Koenig & Co., LLP as our independent registered
public accounting firm for 2008 will require the “For” votes cast to exceed the
“Against” votes cast at the Annual Meeting.
Our
Recommendation
THE
BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT
OF IMOWITZ KOENIG & CO. LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR 2008.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES
During
the years ended December 31, 2006 and 2007, the Company was billed or expects
to
be billed by our independent registered public accounting firm, Imowitz Koenig,
for the following fees:
|
|
|
2006
|
|
2007
|
|
|
Audit
Fees (1)
|
|
$
|
136,620
|
|
$
|
145,000
|
|
|
Audit-Related
Fees (2)
|
|
|
22,241
|
|
|
6,101
|
|
|
Tax
Fees (3)
|
|
|
—
|
|
|
23,513
|
|
|
All
Other Fees (4)
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
$
|
158,861
|
|
$
|
174,614
|
|
|
(1)
|
Audit
fees principally include those for services related to the annual
audit of
the consolidated financials statements, SEC registration statements
and
other filings and consultation on accounting
matters.
|
|
(2)
|
Audit-related
fees principally include assurance and related services that were
reasonably related to the performance of the Imowitz
Koenig
’s
assurance and review of the financial statements and not reported
under
the caption “Audit Fees.”
|
|
(3)
|
Tax
fees principally include services for federal, state and international
tax
compliance, tax planning and tax consultation, but excluding tax
services
rendered in connection with the
audit.
|
|
(4)
|
Imowitz
did not perform any services for us other than those described
above.
|
Audit
Committee’s Pre-Approval Policies and Procedures
The
Audit
Committee has not adopted procedures for the pre-approval of all audit and
non-audit services rendered by our independent registered public accounting
firm, Imowitz Koenig. Our Audit Committee Charter provides that the Audit
Committee may adopt pre-approval policies and procedures to avoid the need
of
the Audit Committee approval of services on an engagement-by-engagement basis.
The policies and procedures must be detailed as to the particular service and
may not involve a delegation of pre-approval responsibility to
management.
All
of
the services set forth under the table “Independent Registered Accounting Firm
Fees and Services” above were approved by the Audit Committee.
In
connection with the audits of our financial statements for the years ended
December 31, 2006 and 2007, there were no disagreements with Imowitz Koenig
on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, that would have caused Imowitz
Koenig to report the disagreement if it had not been resolved to the
satisfaction of Imowitz Koenig.
CORPORATE
GOVERNANCE AND THE BOARD OF DIRECTORS
INDEPENDENCE
OF THE BOARD OF DIRECTORS
Our
common stock is listed on the American Stock Exchange, or AMEX. AMEX listing
standards require a majority of our Board of Directors to be “independent.” For
a director to be “independent” under these standards, the Board must
affirmatively determine that the director has no material relationship with
us,
either directly or as a partner, shareholder, or officer of an organization
that
has a relationship with us. In addition, the AMEX rules specify certain
relationships between a director, or an immediate family member of a director,
and the company which would preclude the Board from determining a director
to be
independent.
Applying
the AMEX corporate governance standards, and all other applicable laws, rules
and regulations, the Board of Directors has determined that all of our directors
presently in office are independent, except for our Chairman of the Board Lee
S.
Rosen and our President and Chief Executive Officer David A.
Gillespie.
MEETINGS
OF THE BOARD OF DIRECTORS
The
Board
of Directors met 13 times during 2007, in person or by phone. All of the
directors attended at least 75% or more of the aggregate of the meetings of
the
Board and of the committees on which each director served. In accordance with
the Company’s policy on director attendance at Annual Meetings, all of our
directors attended the 2007 Annual Meeting of Shareholders.
COMMITTEES
OF THE BOARD OF DIRECTORS
The
Board
has three committees: an Audit Committee, a Compensation Committee and a
Nominating Committee. The following table provides membership and meeting
information for 2007 for each of the Board committees:
|
Name
|
|
Audit
|
|
Compensation
|
|
Nominating
|
|
|
Steven
F. Gilliland
|
|
|
X
|
|
|
X
|
|
|
|
|
|
John
E. Mack
|
|
|
X
*
|
|
|
X
|
|
|
X
|
|
|
Phillip
E. Pearce
|
|
|
X
|
|
|
X
*
|
|
|
X
|
|
|
James
R. Sheppard, Jr.
|
|
|
X
|
|
|
|
|
|
|
X
*
|
|
|
Total
meetings in 2007
|
|
|
5
|
|
|
1
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Committee Chairman
|
|
|
|
|
|
|
|
|
|
|
|
|
Below
is
a description of each committee of the Board of Directors. The Board of
Directors has determined that each member of each committee meets the applicable
AMEX rules and regulations regarding “independence” and that each member is free
of any relationship that would impair his or her individual exercise of
independent judgment with regard to the company.
Audit
Committee
On
March
19, 2007, the Board of Directors established an Audit Committee to oversee
our
accounting and financial reporting processes and audits of its financial
statements. The Audit Committee consists of four members, Messrs Mack,
Gilliland, Pearce and Sheppard. The Board has determined that Mr. Mack is the
“audit committee financial expert” and serves as the Chairman of the Audit
Committee. The Audit Committee met five times during 2007. The Audit
Committee adopted a written charter on November 13, 2007, which is available
to
shareholders on our website at
www.newgenerationbiofuels.com
.
As
set
forth in the Audit Committee Charter, among other responsibilities, the Audit
Committee performs several oversight functions, including:
|
|
·
|
resolves
any disagreements between management and the outside independent
registered public accounting firm regarding financial
reporting;
|
|
|
·
|
serves
as an independent and objective body to monitor and assess our compliance
with legal and regulatory requirements, our financial reporting processes
and related internal control systems and the performance, generally,
of
our internal audit function;
|
|
|
·
|
oversees
the audit and other services of our outside independent registered
public
accounting firm and is directly responsible for the appointment,
independence, qualifications, compensation and oversight of the outside
independent registered public accounting firm, who reports directly
to the
Audit Committee;
|
|
|
·
|
provides
an open avenue of communication among the outside independent registered
public accounting firm, accountants, financial and senior management
and
our Board; and
|
|
|
·
|
considers
and approves transactions between the Company and our directors,
executive
officers, nominees for directors or 5% or greater beneficial owners,
any
of their immediate family members or certain entities affiliated
with
them.
|
Report
of the Audit Committee Of The Board of Directo
rs
1
The
following is the report of the Audit Committee with respect to our audited
financial statements for the year ended December 31, 2007:
The
Audit
Committee has reviewed and discussed the audited financial statements for the
year ended December 31, 2007 with the management of New Generation Biofuels
Holdings, Inc. The Audit Committee has discussed with the independent registered
public accounting firm the matters required to be discussed by the Statement
on
Auditing Standards No. 61, as amended (AICPA,
Professional Standards
, Vol.
1. AU section 380), as adopted by the Public Company Accounting Oversight Board
(“PCAOB”) in Rule 3200T. The Audit Committee has also received the written
disclosures and the letter from the independent registered public accounting
firm required by the Independence Standards Board Standard No. 1,
(
Independence
Discussions with Audit Committees
),
as
adopted by the PCAOB in Rule 3600T and has discussed the independent
registered public accounting firm’s independence with the firm. Based on the
foregoing, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in New Generation Biofuels Holdings,
Inc.’s Annual Report in Form 10-K for the year ended December 31, 2007 for
filing with the SEC.
Mr. John
E. Mack, Chairman
Mr. Steven
F. Gilliland
Mr.
Phillip E. Pearce
Mr.
James
R. Sheppard, Jr.
|
(1)
|
The
material in this report is not “soliciting material,” is not deemed
“filed” with the SEC and is not to be incorporated by reference in any
filing we make under the Securities Act of 1933 or the Exchange Act,
whether made before or after the date hereof and irrespective of
any
general incorporation language in any such
filing.
|
Compensation
Committee
On
March
19, 2007, the Board of Directors established a Compensation Committee. The
Compensation Committee consists of three members, Messrs. Pearce, Gilliland,
and
Mack. Mr. Pearce is Chairman of the Compensation Committee. The Compensation
Committee met once during 2007. The Compensation Committee adopted a written
charter on November 13, 2007, which is available to our shareholders on our
website at
www.newgenerationbiofuels.com
.
Compensation
Committee Processes and Procedures
Pursuant
to its charter, the Compensation Committee is responsible for discharging the
Board’s responsibilities relating to compensation of our directors and executive
officers and administering our incentive compensation and equity-based plans.
The Compensation Committee’s assigned duties include:
|
|
·
|
annually
reviewing and approving corporate goals and objectives for the Chief
Executive Officer (“CEO”), evaluating the CEO’s performance in light of
those goals and objectives and reviewing and approving (subject to
the
ratification of the full Board of Directors) the CEO’s compensation each
year;
|
|
|
·
|
annually
reviewing and approving compensation for our executive
officers;
|
|
|
·
|
retaining
and terminating any compensation
consultant;
|
|
|
·
|
periodically
reviewing and making recommendations to the Board regarding compensation
to be paid to our non-employee directors;
and
|
|
|
·
|
administering
our incentive compensation plans including approving options and
restricted stock awards, determining the rules and regulations of
the
plans, and imposing limitations, restrictions or conditions on any
grant
or award.
|
The
Compensation Committee believes executive compensation should reflect the
Company’s developmental stage the Compensation Committee considers the
recommendations of Mr. Gillespie, our President and CEO, when setting each
component of executive compensation but retains ultimate decision making
authority. The Compensation Committee is solely responsible for CEO
compensation. There is no fixed or rigid formula for determining compensation,
however, and the Committee retains the flexibility to take into account other
objective and subjective considerations it deems relevant during the year,
such
as rewarding extraordinary executive contributions, overall company performance
for the year and increases or decreases in job responsibilities. The
Compensation Committee does not currently engage the services of a compensation
consultant.
Nominating
Committee
On
March
19, 2007, the Board of Directors established a Nominating Committee. The
Nominating Committee consists of three members, Messrs. Sheppard, Mack, and
Pearce. Mr. Sheppard is Chairman of the Nominating Committee. During 2007,
the
Nominating Committee did not meet and thus, o
ur
entire
Board of Directors evaluated and recommended the nominees for membership on
the
Company’s Board of Directors and its committees.
The
Nominating Committee adopted a written charter on November 13, 2007, which
is
available to our shareholders on our website at
www.newgenerationbiofuels.com
.
Under
the
Nominating Committee Charter, the primary functions of the Nominating Committee
are to:
|
|
·
|
identify
individuals qualified to become directors and recommend to our Board
candidates for election or re-election to the
Board;
|
|
|
·
|
consider
and make recommendations to our Board concerning the size and composition
of our Board, committee structure and makeup, retirement policies
and
procedures affecting Board
members;
|
|
|
·
|
make
recommendations to the Board regarding management succession planning;
and
|
|
|
·
|
take
a leadership role with respect to the development, implementation
and
review of our principles of corporate governance and
practices.
|
The
Nominating Committee considers candidates suggested by its members, other
directors, senior management and stockholders in anticipation of upcoming
elections and actual or expected board vacancies. All candidates, including
those recommended by stockholders, are evaluated on the same basis in light
of
the entirety of their credentials and the need of the Board of Directors and
the
Company. Of particular importance are the candidate’s integrity and judgment,
professional achievements and experience relevant to the Company’s business and
strategic challenges, his or her potential contribution to the diversity and
business judgment of the Board of Directors and his or her willingness to devote
adequate time to fulfill duties as a director.
COMMUNICATIONS
WITH THE BOARD
We
have
not implemented a formal process relating to communications by shareholders
and
other interested parties with the Board. Nevertheless, we invite shareholders
and other interested parties to communicate any concerns they may have about
our
company directly and confidentially with the non-management directors as a
group
by writing to the Non-Management Directors, c/o John Mack, New Generation
Biofuels Holdings, Inc., 1000 Primera Boulevard, Lake Mary, Florida
32746.
CODE
OF BUSINESS CONDUCT AND ETHICS
In
November 2007, our Board and Audit Committee adopted a Code of Business Conduct
and Ethics that applies to each of our directors, officers and employees. This
Code sets forth our policies and expectations on a number of topics,
including:
|
|
·
|
compliance
with laws, including insider
trading;
|
|
|
·
|
preservation
of confidential information relating to our business and that of
our
clients;
|
|
|
·
|
reporting
of illegal or unethical behavior or concerns regarding accounting
or
auditing practices;
|
|
|
·
|
corporate
opportunities; and
|
|
|
·
|
the
protection and proper use of our
assets.
|
We
have
also established and implemented formal “whistleblower” procedures for receiving
and handling complaints from employees. As discussed in the Code, we encourage
our employees to promptly report illegal or unethical behavior as well as
questionable accounting or auditing matters and other accounting, internal
accounting controls or auditing matters on a confidential, anonymous basis
to
their supervisors. Any concerns regarding accounting or auditing matters
reported will be communicated to the Audit Committee. The Audit Committee
intends to review the Code on an annual basis, and the Board will review and
act
upon any proposed additions or amendments to the Code as appropriate.
The
Code
of Business Conduct and Ethics is available to our shareholders on our website
at
www.newgenerationbiofuels.com
.
EXECUTIVE
OFFICERS
The
following table sets forth information concerning our executive officers.
Officers are elected by and serve at the discretion of our Board of
Directors.
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
|
|
Lee
S. Rosen
|
|
54
|
|
Chairman
of the Board of Directors
|
|
|
|
|
|
|
|
David
A. Gillespie
|
|
47
|
|
President,
Chief Executive Officer and Director
|
|
|
|
|
|
|
|
Cary
J. Claiborne
|
|
47
|
|
Chief
Financial Officer and Secretary
|
|
|
|
|
|
|
|
Andrea
Festuccia
|
|
36
|
|
Chief
Technology Officer
|
|
|
|
|
|
|
|
Phillip
J. Wallis
|
|
44
|
|
Chief
Marketing Officer
|
|
|
|
|
|
|
|
Connie
L. Lausten
|
|
41
|
|
Vice
President, Regulatory and Legislative Affairs
|
|
|
|
|
|
|
|
David
H. Goebel, Jr.
|
|
48
|
|
Vice
President, Global Sourcing and Supply Chain
|
|
|
|
|
|
|
|
Philip
R. Cherry, Jr.
|
|
45
|
|
Vice
President, Engineering and
Operations
|
Set
forth
below are the descriptions of the backgrounds of each of our executive officers,
other than Messrs. Rosen and Gillespie, whose positions and backgrounds are
described above.
Cary
J. Claiborne
has
served as Chief Financial Officer since December 2007 and Secretary since
January 2008. Prior to joining New Generation Biofuels, Mr. Claiborne served
as
the Chief Financial Officer of Osiris Therapeutics, a publicly traded biotech
company from 2004 to 2007. From 2001 to 2004, Mr. Claiborne was the Vice
President of Financial Planning and Analysis at Constellation Energy. Mr.
Claiborne earned an MBA degree in Finance from Villanova University and a
bachelor of arts degree in business administration from Rutgers
University.
Andrea
Festuccia
has
served as Chief Technology Officer since April 2006.
Currently,
Mr. Festuccia is the Director of the “Environment and Territory Business Unit”
of IGEAM S.r.l., a private Italian company engaged in consulting environmental
and safety problems where he has worked since June 1999. Prior to his
current position with IGEAM S.r.l., Mr. Festuccia was the Director of Special
Research Projects at IGEAM S.r.l. Mr. Festuccia was Adjunct Professor of
General and Inorganic Chemistry with the University of “La Tuscia” of Viterbo
from 1999 to 2000. Mr. Festuccia is member of the Board of Directors of 3TI
Progetti Italia since 2004. Mr. Festuccia is currently an external consultant
with the University “La Sapienza” of Rome, a position that he has held since
2001. He also worked as an external expert for the Minister of Foreign
Affairs of Italy-Farnesina from 2002-2004 and as Technical Director of
Ecosystems S.r.l. from 2002 to present. In October 1996, h
e
received
a
degree
in chemical engineering and subsequently, in 2007,
his
doctor of philosophy degree in chemical engineering from the University of
Rome
- “La Sapienza”.
Phillip
J. Wallis
has
served as Chief Marketing Officer since January 2008. Mr. Wallis served as
Manager, Regional Sales and Solutions for Asia Pacific and Africa at the Chevron
corporation from September 2001 to December 2006 and as Process Documentation
Team Lead, Chevron Supply Trading from December 2006 to January
2008.
Connie
L. Lausten, P.E.
has
served as Vice President of Regulatory and Legislative Affairs since May 2007.
From 2003 to 2007, Ms. Lausten served as Manager of Federal Affairs for National
Grid USA, one of the world's largest utilities. Ms. Lausten also has
served at the Federal Energy Regulatory Commission and in the United States
House of Representatives Government Reform Committee, subcommittee for Energy
Policy, Natural Resources & Regulatory Affairs. Ms. Lausten is a Licensed
Professional Engineer and received a master of science degree and a bachelor
of
science degree in mechanical engineering from the University of
Minnesota.
David
H. Goebel, Jr.
has
served as Vice President of Global Sourcing and Supply Chain since September
2007. Mr. Goebel previously worked at MeadWestvaco, a packaging solutions and
products company, as the acting Vice President of Supply Chain/Director of
Customer Service. He was responsible for redesigning the corporate order-to-cash
processes, strategizing organizational and process changes in capacity planning,
demand forecasting, inventory management/ operations, logistics/distribution,
and customer service. Additionally, for nearly 20 years, Mr. Goebel worked
at
ExxonMobil and its predecessor, Mobil Corporation, in many different leadership
capacities including manufacturing, engineering, supply chain, operations,
marketing, and sales. Mr. Goebel holds a bachelor of science degree in
microbiology from University of Minnesota along with graduate studies at both
the University of Texas at Dallas and Northeastern University in
Boston.
Philip
R. Cherry, Jr.
has
served as Vice President of Engineering and Operations since June 2008. Mr.
Cherry was previously employed by the ethanol producer VeraSun Energy from
2007
through May 2008 as Director of Operations, Start-Up / Shut Down Support Systems
where he was responsible for the commissioning, initial operation and annual
maintenance shutdowns of a fleet of ethanol facilities. Prior to joining
VeraSun, Mr. Cherry worked for U.S. BioEnergy providing contract management
to
ethanol facility owners. Mr. Cherry was also President of The O-H Group from
2003 through 2006, providing project management and technical consulting
services to renewable fuel producers. Additionally, for nine years Mr. Cherry
worked for Mobil Oil Corporation in a variety of process and scientific roles.
Mr. Cherry holds a bachelor of science degree in chemistry from Chapman
University. He is a member of the American Chemical Society, American Coalition
for Ethanol, and the California Biomass Collaborative.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth information regarding the beneficial ownership of
shares of our capital stock as of June 16, 2008 by:
|
|
·
|
Each
of our named executive officers;
|
|
|
·
|
All
of our directors and executive officers as a group;
and
|
|
|
·
|
Each
person known by us to beneficially own more than 5% of our outstanding
common stock.
|
As
of
June 16, 2008, 18,872,712 shares of our common stock were
outstanding.
Under
SEC
rules, beneficial ownership includes any shares of common stock which a person
has sole or shared voting power or investment power and any shares of common
stock which the person has the right to acquire within 60 days through the
exercise of any option, warrant or right, through conversion of any security
or
pursuant to the automatic termination of a power of attorney or revocation
of a
trust, discretionary account or similar arrangement. Percentage of beneficial
ownership is calculated based on 18,872,712 shares of our common stock
outstanding as of
June
16
,
2008.
In
calculating the number of shares beneficially owned and the percentage
ownership, shares of common stock subject to Preferred Stock conversion rights
(including accrued dividends), options or warrants held by that person that
are
currently exercisable or convertible or become exercisable or convertible within
60 days after June 16, 2008 are deemed outstanding even if they have not
actually been exercised or converted.
The
shares issuable under these securities are treated as outstanding for computing
the percentage ownership of the person holding these securities but are not
treated as outstanding for the purpose of computing the percentage ownership
of
any other person
.
Unless
otherwise indicated, we believe that all persons named in this table have sole
voting power and investment power over all the shares beneficially owned by
them.
Security
Ownership of Management and Directors:
|
Title
of Class
|
|
Name
Beneficial Owner
|
|
Amount
and Nature of
Beneficial
Ownership (1)
|
|
Percentage
of Class
|
|
Common
Stock
|
|
Lee
S. Rosen
|
|
3,609,667
(2)
|
|
17.7%
|
|
Common
Stock
|
|
David
A. Gillespie
|
|
847,291
(3)
|
|
4.3%
|
|
Common
Stock
|
|
Andrea
Festuccia
|
|
875,078
(4)
|
|
4.5%
|
|
Common
Stock
|
|
Steven
F. Gilliland
|
|
50,000
(5)
|
|
**
|
|
Common
Stock
|
|
John
Mack
|
|
109,834
(6)
|
|
**
|
|
Common
Stock
|
|
Phillip
E. Pearce
|
|
100,000
(7)
|
|
**
|
|
Common
Stock
|
|
James
R. Sheppard, Jr.
|
|
50,000
(8)
|
|
**
|
|
Common
Stock
|
|
Directors
and executive officers as a group (12 people)
|
|
6,063,531
|
|
27.1%
|
Other
Stockholders:
|
Title
of Class
|
|
Name
and Address of Beneficial Owner
|
|
Amount
and Nature of
Beneficial
Ownership (1)
|
|
Percentage
of Class (2)
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Xethanol
Corporation
1185
Avenue of the Americas,
20
th
Floor
New
York, New York 10036
|
|
5,490,000
(9)
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|
29.1%
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Lee
Rosen 2006 Irrevocable Trust I
17698
Foxborough Lane
Boca
Raton, Florida 33496
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|
2,109,667
(10)
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|
11.2%
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(1)
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Unless
otherwise indicated, includes shares owned by a spouse, minor children
and
relatives sharing the same home, as well as entities owned or controlled
by the named person. Also includes shares if the named person has
the
right to acquire those shares within 60 days after June 16, 2008,
by the
exercise of any warrant, stock option or other right. Unless otherwise
noted, shares are owned of record and beneficially by the named
person.
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|
(2)
|
Includes
immediately exercisable stock options to purchase 1,500,000 shares
of our
common stock at $1.50 per share held personally by Mr. Rosen. Also
includes 2,090,000 shares of common stock, 12,500 shares of common
stock issuable upon the initial conversion of 500 shares of Series
A
Preferred Stock, 6,250 shares common stock issuable upon the
exercise of 6,250 warrants and 917 shares of common stock
from accrued but unissued dividends on Series A Preferred Stock owned
by the Lee Rosen 2006 Irrevocable Trust I. Excludes 1,304,000 shares
of
common stock held by The River Trust and The Aspen Trust as to which
Mr. Rosen holds no sole or shared voting or investment power and
disclaims beneficial ownership.
|
|
(3)
|
Includes
37,500 shares of common stock, options immediately exercisable for
800,000
shares of our common stock at $1.50 per share, 6,250 shares of common
stock issuable upon the initial conversion of 250 shares of Series
A
Preferred Stock, 3,125 shares of common stock issuable upon the
exercise of 3,125 warrants and 416 shares of common stock from accrued
but
unissued dividends on Series A Preferred
Stock.
|
|
(4)
|
Includes
375,078 shares of common stock and immediately exercisable stock
options
to purchase 500,000 shares of common stock at a price of $1.50 per
share.
|
|
(5)
|
Includes
options immediately exercisable for 50,000 shares of our common stock
at
$6.00 per share.
|
|
(6)
|
Includes
options immediately exercisable for 100,000 shares of our common
stock at
$10.50 per share, 6,250 shares of common stock issuable upon the
initial
conversion of 250 shares of Series A Preferred Stock, 3,125 shares
of
common stock issuable upon the exercise of 3,125 warrants and 459
shares from accrued but unissued dividends on Series A Preferred
Stock.
|
|
(7)
|
Includes
options immediately exercisable for 100,000 shares of our common
stock at
$7.50 per share.
|
|
(8)
|
Includes
options immediately exercisable for 50,000 shares of our common stock
at
$6.00 per share.
|
|
(9)
|
Xethanol
Corporation is the record owner of 5,490,000 shares of our common
stock
based upon the Form 4 filing with the SEC on June 9,
2008.
|
|
(10)
|
Includes
2,090,000 shares of common stock,12,000 shares of common stock issuable
upon the initial conversion of 500 shares of Series A Preferred Stock,
6,250 shares of common stock issuable upon the exercise of 6,250
warrants and 917 shares of common stock from accrued but unissued
dividends on Series A Preferred Stock.
|
** Less
than 1%
TRANSACTIONS
WITH RELATED PARTIES
CERTAIN
RELATED PARTY TRANSACTIONS
Except
as
set forth below, there have been no material transactions, series of similar
transactions or currently proposed transactions during 2007 in which we or
our
subsidiary was or is to be a party, in which the amount involved exceeded the
lesser of $120,000 or 1% of the average of our total assets at year end for
the
last two completed fiscal years and in which any director or executive officer
or any security holder who is known to us to own of record or beneficially
more
than 5% of our common stock, or any member of the immediate family or sharing
the household (other than a tenant or employee) of any of the foregoing persons,
had a direct or indirect material interest.
In
October 2007, we entered into a stock purchase and termination agreement with
Xethanol in which we agreed, subject to raising the requisite financing, to
purchase from Xethanol 5,460,000 shares of our common stock for an aggregate
purchase price equal to $7,000,000. Our board of directors reviewed and
unanimously approved the transaction. The shares subject to the agreement
represented approximately 30% of the outstanding shares of the Company. Upon
the
repurchase of the shares, all of the existing agreements with Xethanol were
to
be cancelled, and there was to be no further commercial relationship between
the
parties. The agreements included the sublicense agreement and the technology
access agreement. A letter agreement regarding registration rights would have
been terminated and a $50,000 loan from Xethanol would also have been deemed
to
be satisfied and cancelled. A mutual release by the parties of all claims would
have been effective at closing. The closing was contingent upon our ability
to
raise a minimum of $10,000,000 of new financing. We did not raise the
necessary funds and ultimately Xethanol terminated the agreement, effective
January 17, 2008. In connection with the agreement, we paid Xethanol a
non-refundable deposit of $250,000, which was forfeited and charged to other
expense for the year ended December 31, 2007.
INDEBTEDNESS
OF MANAGEMENT
No
officer, director or security holder known to us to own of record or
beneficially more than 5% of our common stock or any member of the immediate
family or sharing the household (other than a tenant or employee) of any of
the
foregoing persons is indebted to the Company.
TRANSACTIONS
WITH PROMOTERS
The
Company did not expressly engage a promoter at the time of its formation. The
Company has used selling agents and consultants from time to time. The terms
of
those arrangements have been disclosed in previous filings with the Securities
and Exchange Commission.
SUMMARY
COMPENSATION TABLE
The
following table presents information concerning compensation for each of our
named executive officers for services in all capacities during the years
indicated:
|
Name
and Principal Position (a)
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|
Year
(b)
|
|
Salary
(c)
($)
|
|
Option
Awards
(f)
($) (1)
|
|
Nonequity
Incentive Plan Compensation
(g)
($) (2)
|
|
All
Other Compensation
(i)
($) (3)
|
|
Total
(j)
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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David
A. Gillespie
President
& Chief Executive Officer
|
|
2007
2006
|
|
240,000
51,077
|
|
428,032
(4)
172,395
|
|
120,000
—
|
|
—
—
|
|
788,032
223,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lee
S. Rosen
Chairman
of the Board
|
|
2007
2006
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|
180,000
30,000
|
|
—
785,863
|
|
120,000
—
|
|
—
105,000
|
|
300,000
920,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrea
Festuccia
Chief
Technology Officer
|
|
2007
2006
|
|
150,000
112,500
|
|
78,296
97,871
|
|
15,000
—
|
|
—
—
|
|
243,296
210,371
|
|
(1)
|
Reflects
the dollar amount that was recognized in each respective fiscal year
for
financial statement reporting purposes under SFAS 123(R) with respect
to
stock option awards granted to our Named Executive Officers. As required
by SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based conditions.
|
|
(2)
|
Represents
the cash bonuses earned by each Named Executive Officer in 2007 based
on
achievement of 2007 performance targets and paid in 2008.
|
|
(3)
|
Represents
consulting fees paid to Mr. Rosen for services rendered to the Company
prior to the reverse merger.
|
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(4)
|
Mr.
Gillespie was hired October 16, 2006 and as such the 2007 SFAS 123(R)
option award disclosure only represented approximately two and a
half
months of expense. The increase in 2008 was due to a full year of
expense
being recognized.
|
Employment
Agreements
Each
employment agreement requires the executive to adhere to our policy that (a)
prohibits an executive from disclosing confidential information regarding the
Company, and (b) confirms that all intellectual property developed by an
executive and relating to the Company’s business constitutes the sole and
exclusive property of the Company.
David
A Gillespie and Cary J. Claiborne
Effective
December 1, 2007, we entered into an employment agreement with Cary J. Claiborne
to serve as our Chief Financial Officer. This agreement is similar to the
employment agreements with our other senior executive officers. Under the
employment agreement, Mr. Claiborne receives an initial salary of $18,750 per
month and options to purchase 750,000 shares of our common stock at an exercise
price of $4.00 per share, the fair market value of the our common stock on
the
grant date of December 1, 2007 and restricted stock in the amount of $75,000.
The stock options consists of 300,000 time based options and 450,000 performance
based options. The stock options and the restricted stock will vest
incrementally through 2010. The options expire on December 1, 2017. The
employment agreement provides for a relocation expense reimbursement of up
to
$50,000 and for participation in our executive bonus plan, with a maximum
eligible bonus of 50% of base salary, subject to achieving certain performance
targets. The agreement includes other customary terms, including participation
in any incentive and benefit plans made available to executive officers. The
employment agreement will automatically renew for successive one year periods
unless we elect to terminate the agreement upon not less than 270 days notice
prior to the expiration of the then current term.
On
October 18, 2006, we entered into a three-year employment agreement with David
A. Gillespie to serve as our President and Chief Executive Officer. Under the
terms of the employment agreement, Mr. Gillespie replaced Lee S. Rosen as our
President and Chief Executive Officer and receives an initial salary of $20,000
per month and received a grant of 800,000 stock options at an exercise price
of
$1.50 per share, of which 200,000 vested immediately and the balance vest in
three annual installments. Mr. Gillespie is entitled to an additional 1,200,000
“performance vesting” options at an exercise price of $1.50 per share, which
vest in three equal annual installments beginning on December 31, 2007, subject
to certain performance targets being achieved during the preceding annual
period. The employment agreement provides for a relocation expense reimbursement
of up to $50,000 and provides for participation in our executive bonus plan,
with a maximum eligible bonus during 2007 targeted at 50% of Mr. Gillespie’s
annual salary. The agreement includes other customary terms, including
participation in any incentive and benefit plans made available to executive
officers. The employment agreement will automatically renew for successive
one
year periods unless we elect to terminate the agreement upon not less than
270
days notice prior to the expiration of the then current term.
The
employment agreements for Messrs. Gillespie and Claiborne provide that such
executive’s employment may be terminated by the Company upon death, disability,
for “cause,” and “without cause” and that such executive can resign from the
Company with or without good reason or retire. Upon the death of such executive,
such executive’s employment will automatically terminate and (i) any vested
options may be exercised on or before the expiration date of such options
(payments made under this subsection (i) are referred to as “Equity
Compensation”); and (ii) the executive’s legal representatives shall receive (A)
such executive’s compensation that is earned but unpaid and (B) any other
amounts or benefits owing to such executive under an employee benefit plan,
long
term incentive plan or equity plan (payments made under this subsection (ii)
are
collectively referred to as, the “Accrued Amounts”). If Mr. Gillespie’s or Mr.
Claiborne’s employment is terminated without cause or by Mr. Gillespie or Mr.
Claiborne for good reason, then he shall receive (i) his base salary and bonus,
if any (with the achievement of bonus targets presumed), for the time period
that is remaining under his employment agreement or 12 months, whichever amount
is less; (ii) such executive’s Equity Compensation, including all unvested time
vesting options and the next unvested tranche of performance vesting options;
and (iii) such executive’s Accrued Amounts. If Mr. Gillespie’s or Mr.
Claiborne’s employment is terminated because he is disabled, then he shall
receive (i) his base salary, for the time period that is remaining under his
employment agreement or six months, whichever amount is less; (ii) such
executive’s Equity Compensation, including the next unvested tranche of
performance vesting options; and (iii) such executive’s Accrued Amounts. If Mr.
Gillespie or Mr. Claiborne is terminated by the Company for “cause,” then he
shall receive the Accrued Amounts and may exercise his vested options for a
period of thirty days. If Mr. Gillespie or Mr. Claiborne resigns without good
reason or retires then he shall receive the Accrued Amounts.
The
employment agreements for Mr. Gillespie and Mr. Claiborne also provide that
in
the event that a “Change of Control” (as defined in the agreement) of the
Company shall occur during the term of his employment agreement, and within
12
months thereafter his employment is terminated without cause or by him for
good
reason, then (1) his severance compensation will be as set forth above for
termination without cause or by him for good reason, as the case may be, and
(2)
all his unvested time vesting options and performance vesting options will
vest
and remain exercisable for the balance of the option term.
Lee
S. Rosen and Andrea Festuccia
On
May 5,
2006, New Generation Biofuels entered into an employment agreement with Mr.
Rosen to serve as the Chairman of our board of directors for a term of three
years, which is automatically extended for additional one-year terms unless
notice of termination is given at least ninety days prior to the end of the
term
by either Mr. Rosen or the Company.
On
September 19, 2006, New Generation Biofuels entered into an amended and restated
employment agreement with Mr. Festuccia to serve as the Chief Technology Officer
for a term expiring on April 1, 2009, which is automatically extended for
additional one-year terms unless notice of termination is given at least ninety
days prior to the end of the term by either Mr. Festuccia or the
Company.
The
employment agreements of Messrs. Rosen and Festuccia provide that they will
initially receive a fixed base salary at an annual rate of $180,000 and
$150,000, respectively and customary employee benefits. Each employment
agreement provides that if the board of directors establishes an incentive
compensation plan or a bonus plan, Messrs. Rosen and Festuccia will be eligible
to participate in such incentive compensation plan and bonus plan. In addition,
Mr. Festuccia’s agreement also provides for a grant of 500,000 stock options at
a price of $1.50 per share, of which 100,000 vest immediately and the balance
vest, in two annual installments.
The
employment agreements for Messrs. Rosen and Festuccia provide that such
executive’s employment may be terminated by the Company upon death, disability,
for “cause,” and “without cause” and that such executive can resign from the
Company with or without good reason or retire. Upon the executive’s death, his
employment will automatically terminate and (i) any unvested equity compensation
granted to such executive shall immediately vest and any vested options may
be
exercised on or before the earlier of (A) the expiration date of such options
and (B) twelve months after such executive’s death (payments made under this
subsection (i) are referred to as “Equity Compensation”); and (ii) the
executive’s legal representatives shall receive (A) such executive’s
compensation that is earned but unpaid and (B) any other amounts or benefits
owing to such executive under an employee benefit plan, long term incentive
plan
or equity plan (payments made under this subsection (ii) are collectively
referred to as, the “Accrued Amounts”). If Mr. Rosen or Mr. Festuccia’s
employment is terminated without cause, because such executive is disabled
or if
such executive resigns for good reason, then such executive shall receive (i)
such executive’s base salary for the time period that is remaining under such
executive’s employment agreement or six months, whichever amount is less; (ii)
such executive’s Equity Compensation; and (iii) such executive’s Accrued
Amounts. If either Mr. Rosen or Mr. Festuccia is terminated by the Company
for
“cause,” resigns without good reason or retires, then such executive shall
receive the Accrued Amounts.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END TABLE
|
Name
and Principal Position
|
|
Number
of
Securities
Underlying Unexercised Options (#) Exercisable
|
|
Number
of
Securities
Underlying Unexercised Options (#) Unexercisable
|
|
Option
Exercise Price
($)
|
|
Option
Expiration Date
|
|
|
|
|
|
|
|
|
|
|
|
David
A. Gillespie
President
& Chief Executive Officer (1)
|
|
800,000
|
|
1,200,000
|
|
$1.50
|
|
October
18, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Lee
S. Rosen
Chairman
of the Board
|
|
1,500,000
|
|
—
|
|
$1.50
|
|
September
15, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Andrea
Festuccia
Chief
Technology Officer (2)
|
|
300,000
|
|
200,000
|
|
$1.50
|
|
September
19, 2016
|
_________________
|
(1)
|
Of
Mr. Gillespie’s 1,200,000 options to purchase common stock, 400,000 are
time based options and 800,000 are performance-based options. The
400,000
time-based options vest as follows: 200,000 on October 18, 2008;
and
200,000 on October 18, 2009. The 800,000 performance-based options
vest
contingent upon the achievement of certain targets determined at
the end
of each fiscal year as follows: 400,000 on December 31, 2008; 400,000
on
December 31, 2009.
|
|
(2)
|
Mr.
Festuccia’s 200,000 options to purchase common stock vest on April 1,
2008.
|
We
pay
our directors for their attendance and participation at board and committee
meetings. Currently, our directors receive $1,500 for each board meeting and
$1,000 for each telephonic board meeting. Committee chairmen receive $2,000
for
each committee meeting. In addition, we reimburse our directors for their
out-of-pocket expenses.
|
Name
and Principal
Position
|
|
Fees
Earned
or
Paid
in Cash
($)
|
|
Option
Awards
($)
(1)
|
|
Total
($)
|
|
Phillip
E. Pearce (2)
|
|
14,000
|
|
290,278
|
|
304,278
|
|
John
E. Mack (3)
|
|
10,500
|
|
787,607
|
|
798,107
|
|
James
R. Sheppard, Jr. (4)
|
|
5,000
|
|
305,553
|
|
310,553
|
|
Steven
F. Gilliland (5)
|
|
4,000
|
|
305,675
|
|
309,675
|
|
(1)
|
Represents the dollar amount recognized for financial
statement purposes with respect to year 2007 in accordance with FAS
123R
with respect to option awards which were granted in 2006 and 2007.
As
required by SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based conditions. Because these amounts
reflect accounting expenses for these awards, they do not necessarily
correspond to the actual value that will be realized by the directors.
|
|
(2)
|
Mr.
Pearce holds stock options to purchase 100,000 shares of our common
stock
at $7.50 per share.
|
|
(3)
|
Mr.
Mack holds stock options to purchase 100,000 shares of our common
stock at
$10.50 per share.
|
|
(4)
|
Mr.
Sheppard holds stock options to purchase 100,000 shares of our common
stock at $6.00 per share, 50,000 of which will vest on August 22,
2008.
|
|
(5)
|
Mr.
Gilliland holds stock options to purchase 100,000 shares of our common
stock at $6.00 per share, 50,000 of which will vest on August 27,
2008.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers and persons who own more than 10% of a registered class
of
our equity securities to file initial reports of ownership and reports of
changes in ownership with the SEC. Such reporting persons are required by rules
of the SEC to furnish us with copies of all Section 16(a) reports they file.
All
Section 16(a) filings required by any directors and executive officers, and
holders of more than 10% of the Company’s common stock during the year ended
December 31, 2007 were filed late, including the following:
|
|
·
|
late
reports by Mr. Gillespie and Messrs. Mack and Rosen with respect to
their purchase of Series A Preferred Stock and warrants on May 9,
2007,
which were reported on June 6, 2008 and May 17, 2007,
respectively;
|
|
|
·
|
a
late report by Mr. Sheppard with respect to an award of 100,000 stock
options received on August 22, 2007, which was reported on August
31,
2007;
|
|
|
·
|
a
late report by Mr. Gilliland with respect to an award of 100,000
stock
options received on August 27, 2007, which was reported on September
5,
2007;
|
|
|
·
|
a
late report by Mr. Claiborne required to report his initial holdings
upon
becoming an executive officer and with respect to an award of employee
stock options on December 1, 2007, which was reported on January
11, 2008;
|
|
|
·
|
a
late report by Mr. Claiborne with respect to an award shares of restricted
stock received on January 10, 2008, which was reported on January
11,
2008; and
|
|
|
·
|
a
late report by Mr. Gillespie with respect to an award of 800,000
time-based options granted pursuant to an employment agreement entered
into on October 20, 2006, which was reported on June 6,
2008.
|
SHAREHOLDER
PROPOSALS FOR THE ANNUAL MEETING
Shareholder
proposals for the 2009 Annual Meeting of Shareholders must be received at our
principal executive offices by March 2, 2009 to be considered timely or to
be
eligible for inclusion in the proxy materials. A shareholder who wishes to
present a proposal at the 2009 Annual Meeting, but who does not request that
the
Company solicit proxies for the proposal, must submit the proposal to our
principal executive offices by May 16, 2009.
ANNUAL
REPORT
A
copy of
our 2008 annual report on Form 10-K for the year ended December 31,
2007, is enclosed and is also available through our website at
www.newgenerationbiofuels.com
.
HOUSEHOLDING
OF PROXY MATERIALS
The
SEC
has adopted rules that permit companies and intermediaries (e.g., brokers)
to satisfy the delivery requirements for proxy statements and annual reports
with respect to two or more shareholders sharing the same address by delivering
a single proxy statement addressed to those shareholders. This process, which
is
commonly referred to as “householding,” potentially means extra convenience for
shareholders and cost savings for companies.
This
year, some brokers with account holders who are our shareholders will be
“householding” our proxy materials. A single proxy statement will be delivered
to multiple shareholders sharing an address unless contrary instructions have
been received from the affected shareholders. Once you have received notice
from
your broker that they will be “householding” communications to your address,
“householding” will continue until you are notified otherwise or until you
revoke your consent. If, at any time, you no longer wish to participate in
“householding” and would prefer to receive a separate proxy statement and annual
report, please notify your broker.
You
may
also request an additional proxy statement and annual report by sending a
written request to:
New
Generation Biofuels Holdings, Inc.
1000
Primera Boulevard
Lake
Mary, Florida 32746
Shareholders
who currently receive multiple copies of the proxy statement at their addresses
and would like to request “householding” of their communications should contact
their brokers.
OTHER
MATTERS
The
Board
of Directors does not intend to present to the Annual Meeting any other matters
not referred to above and does not presently know of any matters that may be
presented to the meeting by others. If other matters are properly brought before
the meeting, the persons named in the enclosed proxy will vote on such matters
in their own discretion.
|
|
By
Order of the Board of Directors
David
A. Gillespie
President
and Chief Executive Officer
|
Dated: June
27, 2008
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