CRGS CurAegis Technologies Inc (CE)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.       )

Filed by the Registrant þ
Filed by a Party other than the Registrant o

Check the appropriate box:

o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a- 6(e)(2) )
þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12

 

TORVEC, INC.

(Name of Registrant as Specified In Its Charter)

 

James Y. Gleasman, CEO

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
	(2)		Aggregate number of securities to which transaction applies:
	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)		Proposed maximum aggregate value of transaction:
	(5)		Total fee paid:

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

TORVEC, INC.

Dragon

Shield

Notice of 2009

Annual Meeting of Shareholders

And Proxy Statement

Torvec Stationery

December 1, 2009

Dear Shareholders,

Our 2009 annual meeting of shareholders will be held at the Casa Larga Vineyards, 2287 Turk Hill Road, Fairport, New York 14450 on Thursday, January 28, 2010. The annual meeting will begin promptly at 7:00 p.m., Eastern Standard Time.

Please read the following proxy statement so that you will know what we plan to do at the meeting. Also, please sign your Proxy Card and return it in accordance with the instructions accompanying the Card. This way, your shares will be voted as you direct even if you can not attend the meeting.

Gary A. Siconolfi
Chairman of the Board

TABLE OF CONTENTS

NOTICE OF MEETING			5
QUESTIONS AND ANSWERS CONCERNING PROXY SOLICITATION PROCESS AND PROPOSALS TO BE VOTED ON			6
PROPOSAL ONE — ELECTION OF DIRECTORS			12
— Vote Required			12
— Recommendation of Board			12
— Information about Nominees
— Relationships among Nominees			19
— Corporate Governance			19
— Role of Board			19
— Operation of Board and Committees			20
— Director Independence			20
— Related Party Transaction Policy			23
— Executive Sessions			23
— Committees of Board			23
— Audit			23
— Nominating			25
— Governance and Compensation			27
— Executive			28
— Committee Reports			29
— Shareholder Communications			31
— Compensation Discussion and Analysis			32
— Current Compensation Philosophy			33
— Long-Term Compensation Philosophy			34
— Compensation Tables			37
— Discussion of Director Compensation			41
— Nonmanagement Directors Plan			41
— 1998 Stock Option Plan			43
— Business Consultant Stock Plan

PROPOSAL TWO — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			45
— Services Rendered by Accounting Firm and Disclosure Of Fees Paid
— Pre-Approval Process			47
— Vote Required			47
— Board Recommendation			48
DIRECTOR, OFFICER AND 5% OWNERS OF COMMON STOCK			48
— Ownership Tables
— 1934 Act section 16 Compliance			50
— Shareholder Proposals for 2010			51
Annual Meeting
— Availability of Annual Report			51

TORVEC, INC.

NOTICE OF ANNUAL MEETING

OF

COMMON SHAREHOLDERS

Time:		7:00 p.m., Eastern Time, Thursday, January 28, 2010
Place:		Casa Larga Vineyards 2287 Turk Hill Road Fairport, New York 14450
Proposals:		1.    The election of directors;
		2.     The ratification of the selection of Eisner, LLP as Torvec’s independent registered public accounting firm for 2009.
Who Can Vote:		You can vote if you were a common shareholder of record at the close of business on December 1, 2009.
Internet Availability of Proxy Materials :		Under rules recently adopted by the Securities and Exchange Commission, we are now furnishing proxy materials on the Internet. Instructions on how to access and review the proxy materials on the Internet can be found on the Notice of Internet Availability of Proxy Materials (“Notice”) sent to all common shareholders. The Notice also includes instructions for common shareholders on how to access the proxy card to vote over the Internet.

December 1, 2009		Herbert H. Dobbs
		Secretary

TORVEC, INC .

PROXY STATEMENT

Date of Proxy Statement: December 1, 2009
Date of Distribution: December 14, 2009
Annual Meeting of Common Shareholders January 28, 2010

Our Board of Directors is soliciting proxies for the 2009 annual meeting of common shareholders. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. Please read it carefully.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING OF COMMON SHAREHOLDERS

What is a Proxy?

A proxy is another person that you legally designate to vote your common stock. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card.

What is a Proxy Statement?

A proxy statement is a document that regulations issued by the U.S. Securities and Exchange Commission require that we give to you when we ask you to sign a proxy card to vote your common stock at the annual meeting of common shareholders.

What is the Purpose of the Annual Meeting?

At our annual meeting, common shareholders will act upon the matters outlined in the notice of meeting, specifically, the election of directors and the ratification of the selection of the company’s independent registered public accounting firm. Also, management will report on the state of the company and respond to questions from shareholders.

What is the record date and what does it mean?

The record date for the annual meeting is December 1, 2009. The record date is established by the board of directors as required by New York law and the company’s bylaws. Holders of common stock at the close of business on the record date are entitled to receive notice of the meeting and to vote their common shares at the meeting, and any adjournments or postponements of the meeting.

How many common shares must be present at the annual meeting to conduct business?

The company’s bylaws provide that holders of at least 33 1/3% of the common shares outstanding on the record date must be present at the annual meeting, either by attending the annual meeting in person or by submitting a properly signed proxy card. This requirement is called a “quorum.”

We do not anticipate the lack of a quorum on January 28, 2010. If that event were to occur, we would adjourn the meeting to a later date and provide timely notice to all common shareholders of the new date and time of the adjourned meeting.

Who is entitled to vote at the annual meeting?

Holders of the company’s $.01 par value common stock at the close of business on the record date may vote at the annual meeting. Holders of the company’s convertible Preferred Shares cannot vote at the meeting.

On December 1, 2009, 35,448,646 shares of common stock were outstanding and, thus, are eligible to be voted at the annual meeting.

What are the voting rights of holders of the company’s common stock?

Holders of common stock are eligible to vote on all matters to come before the meeting and possess 100% of the voting power. Each outstanding share of common stock on the record date will be entitled to one vote on each matter to be voted upon.

What is the difference between a shareholder of record and a “street name” holder?

If your common shares are registered directly in your name with Continental Stock & Trust Company, the company’s common stock transfer agent, you are considered the shareholder of record with respect to those shares. If your shares are held in the name of a stock brokerage account or a bank or other nominee, you are considered the beneficial owner of those shares, and your shares are held in “street name.”

How do I vote my common shares?

You may vote on the Internet.

As we explained in the Notice of Internet Availability of Proxy Materials (“Notice”) sent to all common shareholders of record, all common shareholders have the ability to access the Proxy Statement and the company’s Annual Report on a website referred to in the Notice. The Notice includes instructions on how to access these materials over the Internet as well as instructions on how you can access the proxy card to vote over the Internet. The website has mechanisms in place to protect your anonymity.

In the alternative, you may vote by mail.

The Notice also contains instructions on how you can request to receive a printed copy of the proxy materials by mail at no charge. To vote by mail, please sign and date your proxy card and return it in the enclosed, prepaid and addressed envelope. If you mark your voting instructions on the proxy card, your shares will be voted as you instruct.

In addition, any common shareholder may request to receive proxy materials in printed form or electronically by email on an ongoing basis. Choosing to receive future proxy materials by email will save the company the cost of printing and mailing documents to shareholders and will reduce the impact of annual meetings on the environment. A shareholder’s election to receive proxy materials by email will remain in effect until the shareholder terminates it.

In the alternative, you may vote in person at the annual meeting.

To assist you, we will pass out a generic proxy card to anyone who wants to vote at the annual meeting in case you have forgotten your proxy card.

If you hold your shares in street name, your stockbroker, bank or other nominee will provide you with a voting instruction card for you to use in directing the broker or other nominee how to vote your shares. If your shares are held in street name and you wish to attend the annual meeting, you must notify your broker, bank or other nominee and obtain the proper documentation to vote your shares at the annual meeting.

Can I change my vote?

Yes. You can revoke your vote at any time before the beginning of the annual meeting in any one of four ways:

1. You may revoke your vote on the Internet by visiting the website designated in the Notice of Internet Availability of Proxy Materials and by following the instructions in the Notice which explain how to revoke your previous vote and, if you wish, change your vote;

2. You may sign and mail another proxy card with a later date;

3. You may vote in person at the annual meeting; or

4. You may give notice of revocation to us by writing Herbert H. Dobbs, Secretary, Torvec, Inc., 1999 Mount Read Blvd., Building 3, Rochester, New York 14615.

Are votes confidential? Who counts the votes?

The votes of all common shareholders will be held in confidence from the directors and officers of the company except: (a) as necessary to meet applicable legal requirements and to assert or defend claims for or against the company; (b) in case of a contested proxy solicitation; (c) if a shareholder makes a written comment on the proxy card or otherwise communicates his or her vote to management; or (d) to allow the inspectors of election to certify the results of the vote.

The board of directors has appointed inspectors of election to determine if a quorum is present so that business can be conducted and to count the votes cast by the shareholders on the two proposals to be presented at the meeting.

Can I vote my common shares in person at the annual meeting?

Yes. If you are a shareholder of record, you may vote your common shares at the meeting by completing a proxy card at the meeting and furnishing the card marked with your instructions and properly signed and dated to either the company’s secretary, Herbert H. Dobbs or to its corporate counsel, Richard B. Sullivan.

You must submit your proxy card prior to the beginning of the meeting for your vote to count.

If you are a “street name” holder, you may vote your common shares in person only if you obtain a signed proxy from your broker, bank or other nominee giving you the right to vote your shares.

Even if you plan to attend the meeting, we recommend you submit your proxy as described above so that your vote will be counted if you later decide not to attend the meeting.

What are my choices when voting?

In the election of directors, you may vote for all nominees, or you may vote against one or more nominees. The proposal related to the election of directors is described in this proxy statement under the caption “Proposal 1.” For the proposal to ratify the independent registered public accounting firm, you may vote for the proposal, against the proposal or you may abstain from voting on the proposal. This proposal is described in this proxy statement under the caption “Proposal 2.” What are the Board’s recommendations?

The board of directors recommends a vote FOR all of the nominees for director (Proposal 1) and recommends a vote FOR ratifying the selection of Eisner LLP as the company’s independent registered public accounting firm for 2009 (Proposal 2).

What if I do not specify how I want my common shares voted?

If you properly sign, date and submit your proxy card but do not specify on your proxy card how you want to vote your shares, then either Keith E. Gleasman or James Y. Gleasman or both of them will vote your shares FOR all of the nominees for director (Proposal 1) and FOR the selection of Eisner LLP as the company’s independent registered public accounting firm for 2009 (Proposal 2).

What percentage of the vote is required for a proposal to be approved?

In accordance with the company’s bylaws, the board of directors has determined that there shall be seven directors. The seven nominees with the highest number of votes cast will be elected as directors. The board has nominated seven individuals for election as directors. There are no other nominees. Thus, if a quorum is present at the meeting, all of the board’s nominees will be elected as directors, regardless of the percentage of the vote each may receive.

The proposal to ratify the selection of Eisner LLP as the company’s independent registered public accounting firm for 2009 will require a majority of votes cast at the annual meeting.

The total number of votes cast at the meeting includes only those common shares actually voted and does not include “abstentions.” While an abstention does count for the purpose of determining whether holders of 33 1/3% of the total number of outstanding shares are present at the annual meeting to conduct business (i.e. a quorum), abstentions do not count for the purpose of determining whether a majority of the votes cast were cast in favor or against a proposal.

Suppose I receive multiple proxy cards?

This means that your shares are held in more than one account. In order to make sure you have voted all of your common shares, please make sure you have properly signed, dated and mailed each proxy card you may have received.

Are there any other matters to be acted upon at the annual meeting?

We do not know of any other matters to be presented or acted upon at the meeting. Under our bylaws, no business besides that stated in the meeting notice may be transacted at any meeting of shareholders.

Who is soliciting my vote and who is paying for the solicitation?

The board of directors is soliciting your vote at the annual meeting by distributing this proxy statement to all common shareholders. The board will also request brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to all beneficial owners of our common stock. The company will pay all expenses for this solicitation, including the reimbursement of its transfer agent, brokerage firms, banks and other nominees for their reasonable out-of-pocket expenses in forwarding proxy material to beneficial owners. While the company has not retained the services of a proxy solicitor , it has retained advisory services with respect to the Internet hosting, posting and document conversion of its proxy materials as well as to permit Internet voting.

How will I find out the outcome of the voting?

We will announce preliminary voting results at the meeting. We will publish the final results in our annual report on Form 10-K for the fiscal year ending December 31, 2009 which we will file with the Securities and Exchange Commission. You can get a copy of our annual report by writing Torvec, Inc., Mount Read Industrial Facility, 1999 Mount Read Blvd., Rochester, New York 14615 or by contacting the Securities and Exchange Commission at (800) 732-0330 for the location of its nearest public reference room, or through the Edgar System at www.sec.gov.

ELECTION OF DIRECTORS

(Proposal 1 on the Proxy Card)

Under our Bylaws, our board of directors is elected annually to serve until the next annual meeting of common shareholders and until the directors’ successors are duly elected and shall qualify. Unless authority to vote for the election of directors is withheld or the proxy card is marked to the contrary, executed and valid proxies received will be voted FOR the election of the eight nominees named below. All of the nominees are currently directors of the company. Daniel R. Bickel, Herbert H. Dobbs, Asher J. Flaum, James Y. Gleasman, Keith E. Gleasman, Joseph B. Rizzo and Gary A. Siconolfi were elected at the annual meeting of shareholders in January, 2009. William W. Destler was appointed by the board of directors on September 15, 2009. While we have no reason to believe that any nominee will not be available as a candidate, should such a situation arise, the proxy may be voted for the election of other persons as directors.

Vote Required

Nominees for election to the board of directors must receive a plurality of the common shares cast at the annual meeting, either in person or by proxy.

Recommendation

The board of directors recommends a vote FOR each of the nominees presented for election to the board .

The names of the nominees, their ages as of December 1, 2009 and certain other information about them and about the governance of the company are set forth below to assist you in making a decision as to how to cast your vote.

						Served As
Nominee		Principal Occupation		Age		Director Since
Gary A. Siconolfi		Chairman of the Board		58			10/31/02
325 VanVoorhis Avenue Rochester, NY 14617 (1)
James Y. Gleasman		Chief Executive Officer,		69			02/20/98
987 Elmwood Avenue		Interim Chief Financial Officer,
Brighton, New York 14618 (2)		Director
Keith E. Gleasman		President, Director		62			09/26/96
11 McCoordwoods Drive Fairport, NY 14450 (3)
Herbert H. Dobbs		Secretary, Director		78			02/20/98
448 West Maryknoll Road Rochester Hills, MI 48309 (4)
Daniel R. Bickel		Certified Public Accountant,		61			10/31/02
39 Whippletree Road		Director
Fairport, New York 14450 (5)

						Served As
Nominee		Principal Occupation		Age		Director Since
Asher J. Flaum		Real Estate Developer,		29			10/10/08
49 Sunrise Park		Director
Pittsford, New York 14534
Joseph B. Rizzo		Attorney, Director		44			9/9/05
39 State Street, Suite 700 Rochester, New York 14614 (7)
William W. Destler, Ph.D		College President, Director		63			9/15/09
One Lomb Memorial Drive Rochester, New York 14623

	•		Life-long entrepreneur.
	•		Skilled in management, finance, strategic planning, organizing and marketing.
	•		Principal inventor of the infinitely variable transmissions (IVT); co-inventor of several other patented inventions.

	•		Established manufacturing of the Torsen ® differential in Argentina, Brazil, etc.
	•		Former principal with two companies formerly owned by the Gleasman family.
	•		Set business strategies for small companies’ dealings with large companies.
	•		Joint venture partner with Clayton Brokerage Co. of St. Louis, MO.
	•		Owned financial-consulting business.
	•		Negotiated with numerous Asian Corporations (including Mitsubishi and Mitsui).
	•		Educated in Asian philosophy, business practices and culture.

•		As former Vice President of Sales for the unrelated Gleason Corporation (Power Systems Division), designed and conducted seminars on vehicle driveline systems for engineers at the U.S. army tank automotive command.
•		Designed a complete nationwide after-market program for the Torsen differential, which included trade show participation for the largest after-market shows in the U.S., SCORE and SEMA.
•		Extensive after-market experience including pricing, distribution, sales catalogs, promotions, trade show booths designs and vehicle sponsorships.
•		Responsible for over 300 articles in trade magazines highlighting the Torsen differential (e.g., Popular Science, Auto Week, Motor Trend, Off-Road, and Four Wheeler).
•		Designed FTV vehicle (from concept to assembly).
•		Assisted in developing engineering and manufacturing procedures for the Torsen differential and for all of the Torvec products.
•		Instructed race teams on use of the Torsen differential (Indy cars, Formula 1, SCCA Trans-Am, IMSA, GTO, GTU, GT-1, NASCAR, truck pullers and off-road racers).
•		Has been trained for up-to-date manufacturing techniques such as NWH, statistical process control and MRP II.

Mr. Gleasman has extensive technical and practical experience, covering all aspect of the company’s products such as, promotion, engineering and manufacturing.

During his career he has:

•		Worked as a manufacturing engineer.
•		Worked as a design engineer in the aircraft and missile industry.
•		Managed Army laboratories as a captain, lieutenant colonel and colonel.

•		Organized, implemented and operated the theater-wide “Red Ball Express” quick response supply system in Vietnam to get disabled weapons and other critical equipment repaired and back into combat as rapidly as possible.
•		Done basic research on multi-phase turbulent fluid dynamics supporting development of the gas turbine primary power system now used in the M1 Abrams Main Battle Tank (MBT).
•		Managed advanced development of the laser guided 155mm-artillery shell now known as the “Copperhead”.
•		Served in Taiwan as a member of the U.S. Military Assistance Advisory Group (MAAG) working with the Republic of China Army General Staff.
•		Served as liaison officer between the Army and Air Force for development of the laser seeker for the Hellfire missile.
•		Guided development of a new family of tactical vehicles for the Army, including the High Mobility Multipurpose Wheeled Vehicle (HMMWV) now known as the “Hummer”, which uses the Torsen ® differential.

•

Served as Technical Director of U.S. Army Tank-automotive Command* (TACOM), which then employed some 6,400 people and is responsible for all support of U.S. military ground vehicles (a fleet of 440,000) from development to ultimate disposal with a budget of nearly $10 billion a year. He was also responsible for negotiation and management of military automotive R&D agreements with the French and German Ministries of Defense.

At the end of 1985, Herbert H. Dobbs left government service and started his own consulting practice and began working with the Gleasmans to develop and market Vernon Gleasman’s and Torvec’s inventions. Herbert H. Dobbs holds a Ph.D. in Mechanical Engineering from the University of Michigan and is a registered professional engineer in Michigan. He holds several patents of his own and, among many affiliations, is a member of SAE, ASME, NSPE, AAAS, Sigma XI, AUSA, NDIA and the U.S. Army Science Board. The last named organization is a small group of senior technical and managerial people chosen from industry and academia to provide direct advice to the Secretary of the Army, the Chief of Staff, and the Department of the Army concerning issues of policy, budgets, doctrine, organization, training and technology.

Relationships; Agreements

Keith E. and James Y. Gleasman are brothers. There are no other family relationships among any of the directors or executive officers of the company. There are no agreements or arrangements for the nomination or the appointment of any persons to the board of directors.

CORPORATE GOVERNANCE

Torvec believes it is important to disclose to you a summary of our major corporate governance practices. Some of these practices have been in place since the company’s inception. Others have been adopted in response to legislative and regulatory changes.

We will continue to assess and refine our corporate governance practices and share them with you.

Role of the Board of Directors

All corporate authority resides in the board of directors as the representative of the shareholders. The board has delegated authority to management in order to implement Torvec’s mission of maximizing long-term shareholder value, while adhering to the laws of the jurisdictions where we operate and at all times observing the highest ethical standards.

Such delegated authority includes the authorization of spending limits and the authority to hire consultants and employees and terminate their services. The board retains responsibility to recommend candidates to the shareholders for election to the Board of Directors. The board retains responsibility for selection and evaluation of the chief executive officer, determination of senior management compensation, approval of the annual budget, assurance of adequate systems, procedures and controls, as well as assisting in the preparation and approval of strategic plans. Additionally, the board provides advice and counsel to senior management.

All major decisions are considered by the board as a whole; however, the board has chosen to exercise certain of its responsibilities through committees of the board. The board has established three standing committees — an Audit Committee, a Nominating Committee, and a Governance and Compensation Committee. On July 8, 2005, the board temporarily created an Executive Committee, composed of a majority of its members and granted to it the full authority of the board, in accordance with and subject to the provisions of section 712 of the New York Business Corporation Law.

It is the company’s policy that all directors attend the annual shareholders meeting. All persons who were directors on the date of last year’s annual shareholders meeting attended such meeting.

Operation of the Board and its Committees

The company’s common stock is traded on the over-the-counter bulletin board, an electronic inter-dealer quotation system that displays real-time quotes, last-sale prices and volume information. While the bulletin board is owned by the National Association of Securities Dealers, Inc., the company’s common stock is not “listed” for trading on the NASDAQ system or any stock exchange.

Despite the company’s common stock not being so listed, the board has voluntarily adopted and implemented the NASD’s “listed company rules” regulating the composition and operation of the board and its committees as in effect from time to time since the company’s common stock began trading in January, 1999.

The board of directors of the company met and/or took official action 4 times during the year from January 1, 2009 through December 1, 2009. During this period, each incumbent director attended, either in person or by telephonic conference as permitted by the company’s Bylaws, approximately 100% of the total number of meetings held during the period for which he was a director and approximately 100% of the total number of meetings of the committees of the board on which he served during the period for which he was a member of such committee(s).

Director Independence

Under NASD’s rules applicable to listed companies, a majority of the board must be independent. This requirement means that a majority of the company’s board must be composed of persons who are not executive officers or employees of the company or who have a relationship with the company which, in the board’s opinion, would interfere with the exercise of independent judgment in carrying out his responsibilities as a director. In addition, a person can not be considered independent if he is compensated by the company for any reason other than for service rendered as a member of the board and/or its committees.

Based upon these independence standards and all of the relevant facts and circumstances, the board determined that Daniel R. Bickel, William W. Destler, Herbert H. Dobbs, Asher J. Flaum, Joseph B. Rizzo and Gary A. Siconolfi (constituting 6 members of an 8 person board) are independent. In making this determination, the board noted that none of these directors is an executive officer or employee of the company and that each is compensated by the company under its Nonmanagement Directors’ Plan and Commercializing Event Plan solely for service as members of the board and its committees. The board considered that while Mr. Rizzo is a partner in a law firm that has been engaged in representing the company in certain litigation during the past three years, such relationship does not impair his independence since the amount of fees paid by the company in any one year during such period did not exceed the greater of $200,000 or 5% of such law firm’s gross revenues. The board considered that while Asher J. Flaum is an affiliate of the company’s landlord, 1999 Mt. Read Blvd, LLC., such relationship does not impair his independence since the amount of fees paid by the company in any one year since the inception of the lease (April, 2008 to December 1, 2009) does not exceed the greater of $200,000 or 5% of such landlord’s gross revenues during such period.

Code of Ethics/Committee Charters

The board has adopted, implemented and published on the company’s website ( www.torvec.com ) the company’s code of business conduct which applies to all members of the Board, all executive and financial officers and all employees and consultants of the company, its divisions and its subsidiaries. The code mandates that all company personnel observe the highest standards of business and personal conduct in the performance of their duties and responsibilities, especially in dealing with other company personnel, our shareholders, the general public, the business community, customers, suppliers, and governmental authorities. It addresses conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of corporate assets, compliance with laws, rules and regulations and requires the reporting of any illegal or unethical behavior.

We require our employees, our officers and directors to talk to supervisors, managers or other appropriate personnel to report and discuss any known or suspected unethical, illegal or criminal activity involving the company and/or its employees. We have established a compliance network which allows employees, officers and directors to anonymously report any known or suspected violation of policies and rules set forth in the code of business conduct.

Waivers or amendments of the code’s provisions are generally not permitted, may be granted only by the board of directors, and if granted, will be disclosed promptly by the company by posting the waiver or amendment on the company’s website and by filing a current report ( Form 8-K ) with the Securities and Exchange Commission. There were no waivers of the code during 2009.

The board has also adopted, implemented and posted on the company’s website the company’s financial integrity and compliance program. The program mandates that the company’s results of operations and financial position must be recorded in accordance with the requirements of law and generally accepted accounting principles and that all books, records and accounts must be maintained in reasonable detail so that they accurately and fairly reflect the business transactions and disposition of assets of the company. The written policy requires all personnel responsible for the preparation of financial information to ensure that the company’s financial policies and internal control procedures are followed and holds each person involved in creating, processing and recording financial information accountable for the integrity of the financial reporting process. The program establishes a network for the receipt, retention, and treatment of complaints received by the company regarding accounting, internal accounting controls or auditing matters and provides for the submission (including the confidential anonymous submission) by company personnel of any concerns they might have regarding questionable accounting or auditing practices.

On November 9, 2004, the board adopted a statement of corporate governance principles which establishes policies governing the role of the board of directors, its relationship to management, qualifications of directors, independence of directors, the size of the board and selection process, board committees, independence of committee members, meetings of independent directors, shareholder communications, board and committee agendas, ethics and conflicts of interest, reporting and access to advisers . The statement can be found on the company’s website and was attached to the proxy statement filed in connection with the annual meeting of shareholders in January, 2005.

The board adopted an Audit Committee charter delineating the composition and the responsibilities of the Audit Committee which became effective on April 17, 2000. The charter was revised by the board on January 15, 2003 to further delineate the Committee’s responsibilities and authority in accordance with provisions of the Sarbanes-Oxley Act of 2002. The charter is on the company’s website at www.torvec.com. It was filed as an appendix to the proxy statements distributed to shareholders in connection with the 2003 and 2006 annual meetings.

On November 9, 2004, the board adopted a Nominating Committee charter, a copy of which was attached to the company’s proxy statement filed in connection with the annual meeting of shareholders held in January, 2005. The Nominating Committee charter is on the company’s website at www.torvec.com .

Policy/Procedure for Review/ Approval of Related Party Transactions

Business transactions between Torvec and its officers or directors, including companies in which a director or officer (or an immediate family member) has a substantial ownership interest or a company where such director or officer (or an immediate family member) serves as an executive officer (“related party transactions”) are not prohibited. In fact, certain related party transactions can be beneficial to the company and to its shareholders.

It is important, however, to ensure that any related party transactions are beneficial to the company. Accordingly, any related party transaction, regardless of amount, is submitted to the Governance and Compensation Committee in advance for review and approval. All existing related party transactions are reviewed at least annually by the Governance and Compensation Committee. All related party transactions are reviewed by the company’s general counsel to determine the appropriateness of each related party transaction. The Committee may, at its discretion, consult with outside legal counsel.

No related party transaction may be approved by the Committee if such transaction, regardless of its benefit to the company, would violate the company’s written code of business conduct, its written financial integrity and compliance program and/or its statement of corporate governance principles.

Any director or officer with an interest in a related party transaction is expected to recluse himself from considering the matter and voting upon it. In all cases, a director or officer with an interest in a related party transaction may not attempt to influence company personnel in making any decision with respect to the transaction.

Executive Sessions of Independent Directors

The company’s independent directors meet in executive session without management or non-independent directors present. Currently, Gary A. Siconolfi presides at all executive sessions of the independent directors.

Committees of the Board

The Audit Committee

Number of Members: 3

Members:

Daniel R. Bickel (Chair)
Herbert H. Dobbs
Gary A. Siconolfi

Number of Meetings in 2009: 4

Functions:

The primary function of the Audit Committee as stated in its charter is to assist the board of directors in fulfilling its oversight responsibilities relating to monitoring the quality, reliability and integrity of the company’s external financial reporting process, the adequacy of the company’s internal controls particularly with respect to the company’s compliance with legal and regulatory requirements and corporate policy, and the independence and performance of the company’s registered public accounting firm who is ultimately accountable and must report directly to the Audit Committee. More specifically, the Audit Committee is directly responsible for:

• the appointment, compensation, retention and oversight of the work of the independent, registered public accounting firm engaged (including the resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services;

• the pre-approval of all auditing and legally permissible non-auditing services to be performed by the company’s independent, registered public accounting firm;

• the disclosure by the company of all pre-approved non-audit services in periodic reports filed by the company with the Securities and Exchange Commission;

• the disclosure by the company of the number and name(s) of each Audit Committee member who is an “audit committee financial expert” as defined by the charter in accordance with rules promulgated by the Securities and Exchange Commission;

• the establishment of internal procedures for complaints concerning the company’s accounting, internal accounting controls or auditing matters;

• the review of internal controls, accounting practices, and financial reporting, including the results of the annual audit and the review of the interim financial statements with management and the independent, registered public accounting firm;

• the engagement of independent counsel and advisors as it determines necessary to carry out its duties and the funding therefore.

All members of the Audit Committee are “independent” as independence is defined in Rule  4200(a)(15) of the National Association of Securities Dealers, Inc. listing standards and as defined by Rule 10A- 3(b)(1)(ii) promulgated by the Securities and Exchange Commission. Daniel R. Bickel has been appointed the Audit Committee’s “financial expert” as defined by the Audit Committee’s charter in accordance with rules promulgated by the Securities and Exchange Commission.

The Nominating Committee

Number of Members: 3

Members:

Joseph B. Rizzo (Chair)
Daniel R. Bickel
Gary A. Siconolfi

Number of Meetings in 2009: 2

Functions:

As specified in its charter, the purpose of the Nominating Committee is to identify, consider and recommend qualified individuals to the Board for election as directors, including the slate of directors that the board proposes for election by shareholders at the annual meeting. The charter sets forth the following policy and procedures with respect to the consideration of any director candidates recommended by security holders:

Shareholders wishing to directly nominate candidates for election to the board of directors at an annual meeting must do so by giving notice in writing to the chairman of the Nominating Committee, Torvec, Inc., Mount Read Industrial Facility, 1999 Mount Read Blvd., Rochester, New York 14615. The notice with respect to any annual meeting must be delivered to the chairman not less than 120 days prior to the first anniversary of the preceding year’s annual meeting. The notice shall set forth (a) the name and address of the shareholder who intends to make the nomination; (b) the name, age, business address and residence address of each nominee; (c) the principal occupation or employment of each nominee; (d) the class and number of shares of Torvec securities which are beneficially owned by each nominee and by the nominating shareholder; (e) any other information concerning the nominee that must be disclosed in nominee and proxy solicitations pursuant to Regulation 14A of the Securities Exchange Act of 1934; and (f) the executed consent of each nominee to serve as a director of Torvec if elected.

Nominations submitted in accordance with the foregoing procedure will be considered and voted upon by the Nominating Committee. Any shareholder nominee recommended by the Committee and proposed by the board for election at the next annual meeting of shareholders shall be included in the company’s proxy statement for such annual meeting.

The Nominating Committee charter also sets forth the qualifications and a specific description of skills that members of the board of the company should possess, regardless of by whom nominated:

In recommending candidates, the Committee shall consider the candidates’ mix of skills, experience with businesses and other organizations of comparable size, reputation, background and time availability (in light of anticipated needs), the interplay of the candidate’s experience with the experience of other board members, the extent to which the candidate would be a desirable addition to the board and any committees of the board and any other factors the Committee deems appropriate. At a minimum, the Committee shall address the following skill sets in evaluating director candidates: accounting or finance, business or management experience, industry knowledge, customer base experience or perspective, international marketing and business experience, strategic planning and leadership experience.

Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interest of the shareholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment. The board should represent diverse experience at policy making levels in business, government, education and technology, and in areas that are relevant to the company’s worldwide activities.

Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively, and should be committed to serve on the board for an extended period of time. Directors should consider offering their resignation in the event that significant change in their personal circumstances, including their health, family responsibilities, or a change in their principal job responsibilities, would preclude them from devoting sufficient time to carrying out their responsibilities effectively.

The board does not believe that arbitrary term limits on director service are appropriate, nor does it believe that directors should expect to be renominated automatically. The contribution of each member as a member of a committee or the board shall be evaluated each year by the Committee before his renomination is recommended to the board.

Each of member of the Nominating Committee is an independent director as defined by Rule 10A- 3(b)(1)(ii) promulgated by the Securities and Exchange Commission and as defined by Rule 4 200(a)(15) of the National Association of Securities Dealers, Inc.

The Governance and Compensation Committee

Number of Members: 3

Members:

Gary A. Siconolfi (Chair)
Daniel R. Bickel
Joseph B. Rizzo

Number of Meetings in 2009: 2

Functions:

The purpose of the Governance and Compensation Committee is to regularly monitor the effectiveness of management’s policies and decisions including the execution of the company’s strategies in order to insure that the company represents the shareholders’ interests, including optimizing long term as well as short term financial returns. The Committee develops and recommends to the board corporate governance principles and guidelines and reviews the charter and composition of each committee of the board and makes recommendations to the board for the adoption of or revisions to committee charters, the creation of additional committees or the elimination of committees.

The Committee also:

(1) establishes and reviews the overall executive compensation philosophy and strategy of the company and oversees the company’s various compensation programs and plans.

( 2) reviews and makes recommendations to the board of directors on employment and business consultants compensation policies, forms and levels of annual compensation, including specifically, the performance and level of annual compensation of the executive officers and top management personnel of the company;

(3) specifically reviews the annual compensation of the chief executive officer in the light of established goals and objectives and based upon such evaluation, makes specific recommendations to the board regarding such compensation;

( 4) reviews and makes recommendations to the board on the operation, performance and administration of the company’s employee benefit plans, including the company’s Business Consultants Stock Plan, the Nonmanagement Directors Plan and Commercializing Event Plan.

All members of the Committee are independent within the meaning of Rule 10A- 3(b) (1)(ii) and Rule 4 200(a)(15) promulgated by the Securities and Exchange Commission and the National Association of Securities Dealers, Inc. respectively.

The Executive Committee

Number of Members: 5

Members:

Gary A. Siconolfi (Chair)
Daniel R. Bickel
Herbert H. Dobbs
James Y. Gleasman
Keith E. Gleasman

Number of Meetings in 2009: 1

Functions

On July 8, 2005, the board of directors created an Executive Committee. The members of the committee constitute a majority of the company’s board, and is composed of 2 of the company’s founders who have guided the company from inception, a long-term advisor to the Gleasman family and the company, especially on military matters (Dr. Dobbs), and an individual who was nominated and elected for the express purpose of representing the interests of all of the company’s shareholders, including its minority shareholders (Mr. Siconolfi).

As permitted by section 712 of the New York Business Corporation Law and the company’s Bylaws, the Executive Committee has and may exercise all of the powers and authority of the board (including but not limited to engaging such attorneys and advisors on terms determined by the Executive Committee, including the payment of retainers, fees and expenses of such advisors, with such reasonable retainers, fees and expenses of such advisors to be paid by the company), provided, however, that the Executive Committee does not have the authority to:

	(i)		submit matters requiring shareholder approval under the Business Corporation Law;
	(ii)		fill vacancies in the board of directors or in any committee;
	(iii)		fix compensation of the directors for serving on the board of directors or on any committee;
	(iv)		amend or repeal the company’s Bylaws; or
	(v)		amend or repeal any resolution of the board which by its terms is not amenable or repealable.

COMMITTEE REPORTS

Audit Committee Report

The Audit Committee operates under a written charter adopted by the board of directors on April 17, 2000 and amended on January 15, 2003. A copy of the written charter may be found on the company’s website, www.torvec.com . During 2009, the members of the Audit Committee were Daniel R. Bickel, chairman, Herbert H. Dobbs and Gary A. Siconolfi. All of these persons meet the independence standards contained in the listing rules of the National Association of Securities Dealers, Inc., rules promulgated by the Securities and Exchange Commission and the company’s corporate governance principles.

The Audit Committee is directly responsible for the appointment, compensation and oversight of the work of the independent, registered public accounting firm employed by the company (including resolution of any disagreements between management and the auditor regarding financial reporting) to prepare and issue an audit report or relative work with respect to the company’s financial statements.

The Audit Committee has the responsibility to preapprove all audit services and non-audit services to be performed by the company’s registered accounting firm.

In carrying out its responsibilities, the Audit Committee requires the company’s independent, registered public accounting firm to timely of report to it:

	•		all critical accounting policies and practices to be used in any audit of the company’s financial statements;
	•		all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, the ramifications of the use of such alternative disclosures and treatments and the treatment preferred by the company’s independent, registered public accounting firm; and
	•		other material written communications between the independent, registered public accounting firm and management, such as any management letter or schedule of unadjusted differences.

Management has represented to the Audit Committee that our financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee met, reviewed and discussed the audited financial statements contained in the company’s Annual Report on Form 10-K for its year ended December 31, 2008 with management and separately, with the company’s independent, registered public accounting firm. The Audit Committee discussed with the company’s independent, registered public accounting firm the matters required to be discussed by Statement on Auditing Standards Nos. 61 and 90 (Communication with Audit Committees) relating to the conduct of the audit.

The Audit Committee has received the written disclosures and accompanying letter from the company’s independent, registered public accounting firm required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) disclosing to the Audit Committee all relationships between such firm and the company that may reasonably bear on independence and confirming the such firm’s’ independence. The Audit Committee discussed the issue of independence with the company’s independent registered accounting firm and received confirmation of such discussion from such firm.

Based upon its review of the audited financial statements and the discussions referred to in this report, the Audit Committee recommended to the board of directors that the audited financial statements of the company for its fiscal year ended December 31, 2008 be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2008 for filing with the Securities and Exchange Commission.

		Daniel R. Bickel, Chairman
		Herbert H. Dobbs
		Gary A. Siconolfi

Compensation Committee Report

The Governance and Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis (CD & A). Based upon this review and discussion, the Committee recommended to the board of directors that the CD&A be included in this proxy statement.

		Gary A. Siconolfi, Chairman
		Daniel R. Bickel
		Herbert H. Dobbs

Compensation Committee Interlocks and Insider Participation

The Governance and Compensation Committee is composed of Gary A. Siconolfi, Daniel R. Bickel and Herbert H. Dobbs. None of these persons is a current or former employee of the company. Herbert H. Dobbs currently serves as a director and as the company’s secretary and Gary A. Siconolfi is currently chairman of the board of directors and a former secretary. None of these individuals serves as a member of the board of directors or as an executive officer of any company which provides services to the company.

SHAREHOLDER COMMUNICATIONS

We encourage all shareholders to communicate with management and with our directors, including our independent directors. Any shareholder wishing to communicate directly with management should e-mail or address regular mail to:

Officer		Mailing Address		E-mail
James Y. Gleasman		Torvec, Inc.		jgleasman@torvec.com
Chief Executive Officer, Interim Chief Financial Officer		Mt. Read Industrial Facility 1999 Mt. Read Blvd. Rochester, New York 14615
Keith E. Gleasman		Torvec, Inc.		kgleasman@torvec.com
President		Mt. Read Industrial Facility 1999 Mt. Read Blvd. Rochester, New York 14615

Any shareholder wishing to communicate directly with any of our independent directors should e-mail him as follows:

Herbert H. Dobbs		dr.hh.dobbs@earthlink.net
Joseph Rizzo		josephrizzo@gallolaw.com
Daniel R. Bickel		dbickel@frontiernet.net
Gary A. Siconolfi		gary1015@rochester.rr.com
Asher J. Flaum		aflaum@flaummgt.com
William W. Destler		wwdpro@rit.edu
Regular mail may be addressed to:		Torvec Independent Directors c/o Torvec, Inc.
		Mt. Read Industrial Facility 1999 Mt. Read Blvd. Rochester, New York 14615
		Attention: Gary A. Siconolfi

COMPENSATION DISCUSSION AND ANALYSIS

The company is a development stage company which means that the company has not generated significant revenues on an ongoing basis. Since its inception in September, 1996, the company’s principal business activity has consisted of research, development and patenting its automotive technologies worldwide. Since inception through December 1, 2009, the company has relied primarily on monies generated by the sale of its common and preferred equity to sustain its business. In each of the years 2007, 2008 and 2009, the company sold a limited number of its products generating a modest amount of revenue. The board of directors has adopted and has consistently followed a policy to expend the proceeds of equity sales and any revenues generated by the sale of its products directly on the costs and expenses associated with the actual development and manufacture of its products (including the development of prototypes, pre-production and production-ready models, and the leasing of research and testing facilities.

Current Compensation Philosophy

In the light of the above described facts and circumstances, the board has developed a current compensation philosophy based upon the following elements:

— no compensation is payable, whether in cash, stock, options, warrants or similar instruments, to the company’s chief executive officer, interim chief financial officer and president for services rendered unless and until the company shall have engaged in one or more commercial or governmental transactions generating or which has the potential to generate dollars to the company or its shareholders. Upon such an event(s), compensation shall be payable to such persons only in accordance with the provisions of the company’s Commercializing Event Plan as described in this proxy statement;

— current compensation payable for services rendered by nonexecutive individuals, including engineering, business consulting, legal and patent services, as well as for services rendered by non-executive management and the company’s nonmanagement directors, is to be paid to the extent feasible pursuant to the company’s business consultants’ stock plan. The company has registered common shares issuable under the plan so that nonaffiliates are able to sell such shares immediately and affiliates are able to sell such shares without regard to the “restricted stock” provisions of Rule 144 promulgated by the Securities and Exchange Commission;

— the number of common shares to be issued in satisfaction of consultants’ invoices is to be calculated as of the date of the invoice or, in the case of retainer agreements, on the date(s) specified in the retainer agreement(s). With respect to calculating the number of shares to be issued under the Nonmanagement Directors’ Plan and to the company’s general counsel, the number of shares is to be calculated based upon the closing price of the company’s $.01 par value common stock on the last trading day of each calendar month immediately preceding the date of payment;

— all of the policies described above were adopted by the board of directors upon the recommendation of the Governance and Compensation Committee, a committee composed of independent directors. The specific annual rates of current compensation payable to each of the individuals is set by this committee and is commensurate with the level of current compensation payable for the services rendered by persons in the capacities indicated in the greater metropolitan Rochester, New York region.

Long-Term Compensation Philosophy

The core of the board’s long-term compensation philosophy is based upon its realization that the company’s shareholders will be rewarded only by a business transaction involving the commercialization of one or more of the company’s automotive technologies. This means that the company sells, licenses, enters into supply contracts, receives purchase orders and/or enters into any other arrangement for any of the company’s technologies in a manner designed to generate revenue for the company. This also means that the company itself is acquired in a business combination such that the company’s shareholders will receive cash, the buyer’s stock or a combination of cash and purchaser stock. This also means that the company receives significant dollars from federal, state and/or similar governmental entities to enable it to commercialize one or more of its technologies.

The board concluded that while directors, officers and key management personnel should be provided with a long-term financial incentive to commercialize the company’s technologies, such incentive should be provided only upon a commercializing event which benefits the company’s shareholders. The board also concluded that such incentive should be directly proportional to the dollar amount of gross revenue expected to be generated by the commercializing event.

To accomplish this goal, the board adopted a commercializing event plan designed to reward the company’s directors, executive officers and specified management and engineering personnel for the successful completion of one or more commercializing events. Under the plan, business consultants’ shares will be issued to participants in the plan if and only if a revenue-producing business transaction is consummated.

The commercializing event plan (2007 Event Plan) provides as follows:

Participants

All directors, executive officers, management and engineering personnel engaged by the company.

Any other individual recommended by the Governance Committee and approved by the board of directors from time to time.

Effective Date of 2007 Event Plan

October 10, 2007

Salient Terms of the 2007 Event Plan

Upon the happening of any commercializing event, each of the directors, executive officers and specified management personnel are entitled to share equally in 6% of the gross revenues and/or governmental dollars derived or to be derived from the transaction and/or transactions constituting a commercializing event. Upon the happening of any commercializing event, each of the specified engineering consultants shall be entitled to share equally in 2% of the gross revenues and/or governmental dollars derived and/or to be derived from the transaction and/or transactions constituting a commercializing event.

The amount payable to each individual who was a participant in the 2007 Event Plan as of the 2007 Event Plan’s effective date, October 10, 2007, shall be paid in business consulting shares of the company at a rate of $3.00 per share, the closing price of the company’s common stock on the OTCBB on such date. This means, by way of illustration, that for each $1,000,000 or proportionate amount thereof in gross revenue generated and/or governmental dollars received as the result of a commercializing event, each individual who was a director, officer or specified management participant as of October 10, 2007 shall be entitled to receive 2,222 business consulting shares ($1,000,000 multiplied by .06 divided by nine participants divided by $3.00). Each specified engineering participant as of October 10, 2007 shall be entitled to receive 1,667 business consulting shares ($1,000,000 multiplied by .02 divided by four participants divided by $3.00).

Additional individuals may be added to the 2007 Event Plan from time to time, either at the 6% management level or at the 2% engineering level. With respect to each additional individual, however, the actual number of shares issuable as the result of any commercializing event shall be calculated based upon the closing price of the company’s common stock on the OTCBB (or if the company’s shares are listed on an exchange, including NASDAQ, on such exchange) on the date the individual becomes a participant in the 2007 Event Plan. In no event, however, may the calculation be based upon a rate which is less than $3.00 per share.

In order to actually receive payment under the 2007 Event Plan, each participant must be both a) employed by, a consultant to or associated with Torvec and b) judged to be “in good standing” with the company at the time of any and all such payments, all as determined by the board of directors as of the date of the Board’s authorization of payments to be made under the 2007 Event Plan.

For purposes of 2007 Event Plan, a commercializing event consists in any completed transaction, or series of completed transactions, regardless of form, structure or size and/or dollar amount by which the company and/or its shareholders derive dollars or an increase in the value of their shares or are expected to derive dollars or such increase under the terms of the transaction and/or the terms of any agreement or working arrangement entered into by the company. In addition, a commercializing event consists in the receipt by the company of significant dollars from one or more governmental entities which enables the company to commercialize one or more of its technologies. For purposes of the 2007 Event Plan, payments to be made to participants with respect to each given commercializing event shall be made in full upon the finalization of the commercializing event even if the company is to be paid in installments or some other type of revenue- deferred arrangement. Where payments are to be made pursuant to an arrangement, such as a license or supply contract, where the aggregate consideration to be received by the company as the result of the commercializing event is not stated, the aggregate dollar-value ascribed to the license, supply contract or similar instrument based upon an estimate of the total dollars to be received over the term of the instrument shall be utilized for purposes of fixing the gross revenues to be derived from the commercializing event.

Participants in the 2007 Event Plan shall be entitled to receive payments regardless of the number of commercializing events with respect to each individual piece of technology.

On March 28, 2008 the board of directors approved amendments to the 2007 Event Plan recommended by the Governance and Compensation committee to clarify that:

1) for purposes of the good standing requirement, all participants are considered to be in good standing unless a unanimous vote of the board of directors determines otherwise. In making this determination, the board is required to consider whether a person has engaged in conduct which has significantly harmed the company and to consider that any material violation of the company’s Code of Conduct shall constitute prima facie evidence that the company has been harmed;

2) participants shall be entitled to payment even though the participant is not actively engaged as a consultant to or employee of the company if the reason for not being so engaged is due to death, disability from accident, disease or similar circumstance beyond the participant’s control or is on a leave of absence approved by an authorized officer;

3) the 2007 Event Plan shall terminate no earlier than October 10, 2017 but that subject to such condition, the 2007 Event Plan may be terminated by the board of directors in its sole direction;

4) the benefits provided by the 2007 Event Plan may not be reduced during its term as to amount, time, method, manner of payment and/or any other material condition;

5) distributions under the 2007 Event Plan shall be made on a commercializing event by commercializing event basis;

6) if the entire company is acquired in a transaction where Torvec’s common shareholders receive shares issued by the acquiring company, the number of shares distributable to the participants in the 2007 Event Plan shall be calculated based upon the greater of $3.00 or trading price of the acquiring company on the date the acquisition is announced publically.

In May, 2009, the company issued 389 common shares (valued at $1,167) to each director and executive officer under the 2007 Event Plan upon the receipt of monies from the National Aeronautics and Space Administration in payment for seven infinitely variable transmissions sold to NASA.

SUMMARY COMPENSATION TABLE FOR YEARS

ENDED DECEMBER 31, 2006, 2007 and 2008

																										Change in
																										Pension Value
																						Non-				and
																						Equity				Nonqualified
																						Incentive				Deferred				All
Name and														Stock				Option				Plan				Compensation				Other
Principal						Salary				Bonus				Awards				Awards				Compensation				Earnings				Compensation				Total
Position		Year				($)				($)				($)				($)				($)				($)				($)				($)
(a)		(b)				(c)				(d)				(e)				(f)				(g)				(h)				(i)				(j)
Keith E. Gleasman,			06			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0
President(1)			07			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0
			08			$	0			$	0			$	3,015			$	0			$	0			$	0			$	0			$	3,015
James Y. Gleasman,			06			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Chief Executive Officer,			07			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Interim Chief Financial Officer(2)			08			$	0			$	0			$	3,015			$	0			$	0			$	0			$	0			$	3,015
Richard B. Sullivan			06			$	0			$	0			$	0			$	0			$	0			$	0			$	129,000			$	129,000
General Counsel(3)			07			$	0			$	0			$	0			$	0			$	0			$	0			$	144,000			$	144,000
			08			$	0			$	0			$	3,015			$	0			$	0			$	0			$	175,000			$	178,015

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2008

Option Award

Stock Awards

Equity

Incentive

Equity

Plan

Equity

Incentive

Awards:

Incentive

Plan

Market or

Plan

Awards:

Payout

Awards:

Number

Market

Number of

Value of

Number

Number

Number

of

Value

Unearned

Unearned

of

of

of

Shares

of Shares

Shares,

Shares,

Securities

Securities

Securities

or Units

or Units

Units or

Units or

Underlying

Underlying

Underlying

of Stock

of Stock

Other

Other

Unexercised

Unexercised

Unexercised

Option

That

That

Rights That

Rights That

Options

Options

Unearned

Exercise

Option

Have Not

Have Not

Have Not

have Not

(#)

(#)

Options

Price

Expiration

Vested

Vested

Vested

Vested

Name

Exercisable

Unexercisable

(#)

($)

Date

(#)

($)

(#)

($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

James Y. Gleasman

39,575

0

0

$

5.00

2013

(1)

0

$

0

0

$

0

Keith E. Gleasman

31,818

0

0

$

5.00

2013

(2)

0

$

0

0

$

0

Richard B. Sullivan

0

0

0

$

0

0

0

$

0

0

$

0

DIRECTOR COMPENSATION FOR THE YEAR ENDED DECEMBER 31, 2008

																		Change in
														Non-				Pension
		Fees												Equity				Value and
		Earned or												Incentive				Nonqualified
		Paid in				Stock				Option				Plan				Deferred				All Other
		Cash				Awards				Awards				Compensation				Compensation				Compensation				Total
Name		($)				($)				($)				($)				Earnings				($)				($)
(a)		(b)				(c)				(d)				(e)				(f)				(g)				(h)
Daniel R. Bickel (1)		$	0				42,075			$	0			$	0			$	0			$	0			$	42,075
Herbert H. Dobbs (2)		$	0				29,475			$	0			$	0			$	0			$	0			$	29,475
Joseph B. Rizzo (3)		$	0				34,830			$	0			$	0			$	0			$	0			$	34,830
Gary A. Siconolfi (4)		$	0				174,015			$	0			$	0			$	0			$	0			$	174,015
Asher J. Flaum (5)		$	0				29,475			$	0			$	0			$	0			$	3,015			$	29,475
William W. Destler (6)		$	0			$	0			$	0			$	0			$	0			$	0			$	0

DISCUSSION OF DIRECTOR COMPENSATION

1) Participation in the Nonmanagement Directors’ Plan

At its meeting held on October 19, 2004, the board adopted a Nonmanagement Directors’ Plan for directors who are not employees, consultants or part of management for services exclusively rendered by them as directors, including services rendered as chairman of the company’s standing committees.

As originally adopted and as in force through July 1, 2006, the plan provided that nonmanagement directors who have been board members for at least one full year and have attended, in person or by telephonic conference as permitted by our by-laws, at least 75% of both board meetings and meetings of committees of which they are a member were entitled to receive on a yearly basis, warrants to purchase up to 12,000 common shares at a purchase price of $.01 per share. The warrants were issued quarterly on a pro rata basis and were issued contingently in anticipation of a director’s satisfactory completion of one year of service and/or 75% of board/committee meetings. The warrant term was for a period of ten years. In addition, the chairman of the audit committee was entitled to earn as payment for services on such committee 5,000 warrants per year, payable quarterly.

On October 13, 2006, the board modified the plan to provide that, effective for periods commencing on and after July 1, 2006, a stipulated sum per annum should be paid to each nonmanagement director solely for his service as a director, with the amount of such payment determined by the board from time to time, based upon such considerations as risk, number of meetings, monitoring and reviewing company compliance with the Sarbanes-Oxley Act as well as all other applicable local, state, national and international rules and regulations, development and implementation of policies, including establishing and reviewing executive compensation, longevity, 24-hour a day availability, as well as oversight of management’s pursuit of one or more commercializing events for the company’s technologies. Until adjusted in accordance with such factors, the board determined that each nonmanagement director shall be paid $25,200 per annum exclusively for board and committee service, payable pro rata on a quarterly basis, provided each such director shall have attended, either in person or via telephonic conference, 75% of the meetings of the board and of the committee(s) of which he is a member, such attendance measured on an annual basis. Such amount shall be paid either in cash, business consultants stock or a combination of both and is payable to a newly elected director on a prospective basis upon his election as a director.

At the same meeting, the board also determined that a stipulated sum per annum should be paid to those nonmanagement directors serving as chairman of the board, chairman of the executive committee, chairman of the audit committee, chairman of the nominating committee and chairman of the compensation and governance committee, exclusively for service rendered in such capacities. Until further adjusted, the board determined that the chairman of the board shall be paid $7,500 per annum, the chairman of the executive committee shall be paid $12,000 per annum, the chairman of the audit committee shall be paid $12,000 per annum, the chairman of the nominating committee shall be paid $5,100 per annum and the chairman of the governance and compensation committee shall be paid $5,100 per annum. Such amounts are to be paid pro rata on a quarterly basis with payments made in cash, business consultants stock or a combination of both and is payable to a newly elected chairman on a prospective basis upon his election as chairman. With respect to amounts payable to chairmen for calendar 2006, such amounts shall be payable retroactively to January 1, 2006(except for the audit committee chairman who has received payment for the six month period ended June 30, 2006).

Each unexercised, nonmanagement director warrant outstanding as of October 13, 2006 was amended to provide that such warrants may be exercised only upon the happening of the earlier to occur of the following events: death or disability of the director, termination of his service as a director, change in control of the company or the sale, license or other commercial transfer of a substantial amount of the company’s assets, all of such terms to be interpreted in accordance with the provisions of section 409A of the Internal Revenue Code of 1986 and the regulations promulgated thereunder.

On October 10, 2007, the governance and compensation committee recommended and on October 31, 2007, the Board of Directors approved amendments to the Nonmanagement Directors’ Plan, effective for the quarter commencing July 1, 2007 and for all subsequent quarters commencing thereafter.

The first amendment provided for an across the board increase of 5% per annum to the amounts payable for board service and an additional across the board increase of 5% per annum for service as chairman of the committees enumerated. Thus, under the first amendment, each director would receive $26,460 for board and committee service per annum. The chairman of the audit committee would receive an additional $13,125 per annum and the chairman of the nominating committee would receive an additional $5,355 per annum.

In recognition of the circumstance that the chairman of the board, chairman of the governance and compensation committee and the chairman of the executive committee is the same individual, the value of such service performed by such individual and the fact that the time expended by such individual in service to the company in each of these positions has expanded greatly as the result of the Sarbanes-Oxley Act, the Board approved an increase in the fee payable to such person to $125,000 per annum.

Daniel R. Bickel, Herbert H. Dobbs, Asher J. Flaum, Joseph B. Rizzo and Gary A. Siconolfi were each eligible to participate in the Nonmanagement Directors’ Plan in 2009.

Keith E. Gleasman and James Y. Gleasman were not eligible to participate since they are executive officers of the company. Dr. William W. Destler has elected not to participate in the Nonmanagement Directors’ Plan.

2) Participation in 1998 Stock Option Plan

On December 1, 1997, the company’s board of directors adopted the company’s 1998 Stock Option Plan pursuant to which officers, directors, key employees and/or consultants of the company may be granted incentive stock options and/or non-qualified stock options to purchase up to an aggregate of 2,000,000 shares of the company’s common stock. On May 27, 1998, the company’s shareholders approved the 1998 Stock Option Plan. On December 17, 1998, the company registered the shares reserved for issuance under the 1998 Stock Option Plan under the Securities Act of 1933.

With respect to incentive stock options, the Stock Option Plan provided that the exercise price of each such option must be at least equal to 100% of the fair market value of the common stock on the date that such option is granted (110% of fair market value in the case of shareholders who, at the time the option is granted, own more than 10% of the total outstanding common stock), and required that all such options have an expiration date not later than the date which is one day before the tenth anniversary of the date of the grant of such options (or the fifth anniversary of the date of grant in the case of 10% shareholders). However, in the event that the option holder ceases to be an employee of the company, such option holder’s incentive options immediately terminate. Pursuant to the provisions of the Stock Option Plan, the aggregate fair market value, determined as of the date(s) of grant, for which incentive stock options are first exercisable by an option holder during any one calendar year cannot exceed $100,000.

With respect to non-qualified stock options, the Stock Option permitted the exercise price to be less than the fair market value of the common stock on the date the option is granted and permitted Board discretion with respect to the establishment of the terms of such options. Unless the Board otherwise determined, in the event that the option holder ceases to be an employee of the company, such option holder’s non-qualified options immediately terminate.

As of December 1, 2009, current and former officers and directors held 396,393 common stock options, exercisable until 2013 at $5.00 per share.

The Stock Option Plan terminated on May 27, 2008. Consequently, no new options will be granted under the Stock Option Plan although outstanding options remain exercisable in accordance with their terms.

RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

(Proposal No. 2 on the Proxy Card)

The Audit Committee has appointed Eisner LLP as the independent registered public accounting firm responsible for the independent audit of our financial statements for the year ended December 31, 2009. This appointment is subject to shareholder ratification.

Torvec’s management is responsible for the company’s internal controls and the financial reporting process. The independent registered public accounting firm (Eisner LLP) is responsible for performing an independent audit of the company’s consolidated financial statements and issuing an opinion on the conformity of those audited financial statements with United States generally accepted accounting principles.

Audit Fees

Eisner LLP served as the company’s independent registered public accounting firm for the years ended December 31, 2008 and 2007. The aggregate amount the company paid for professional services rendered by Eisner LLP for the audit of the company’s annual consolidated financial statements included in the company’s Annual Report on Form 10-K , for the review of the company’s consolidated financial statements included in the company’s Quarterly Reports on Form 10-Q , and for services normally provided in connection with statutory and regulatory filings or engagements for each of those years was:

2008			2007
$120,000			$170,500

Audit-Related Fees

The aggregate amount the company paid for professional services rendered by Eisner LLP for audit related services, including but not limited to accounting consultations, assistance with interpretation of financial accounting and reporting standards, for the years ended December 31, 2008 and 2007 was:

2008			2007
None			None

Tax Fees

The company did not engage Eisner LLP for any tax services for the years ended December 31, 2008 and 2007.

All Other Fees

The company did not engage Eisner LLP for any other services for the years ended December 31, 2008 and 2007.

Total Fees

The company paid Eisner LLP a total of $120,000 for the year ended December 31, 2008 in fees, down approximately $50,000 from the total paid for 2007.

Pre-Approval Policies and Procedures

Article II of our Audit Committee charter, as amended, specifically provides that the Audit Committee must pre-approve all auditing and legally permissible non-auditing services to be performed by the company’s registered public accounting firm. In accordance with such mandate the Audit Committee has established a set of procedures governing the pre-approval process. Under the procedure, for each fiscal year, the Committee first shall determine the general nature and scope of the audit, audit-related, tax and other legally permissible non-audit services to be performed by the company’s registered accounting firm. Prior to the performance of any services, the Committee shall require such firm to submit to the Committee one or more engagement letter(s) delineating specific audit, audit-related, tax and other legally permissible non-audit services to be rendered (together with a schedule of fees with respect to each of such services). Upon receipt of such engagement letter(s), the Committee shall review and approve such engagement letter(s) in advance of the performance of any such services, including the specific advance approval of fees in connection with each of such services. Upon approval and execution of each of such engagement letter(s) by the Committee, the registered public accounting firm shall perform such pre-approved services in accordance with the terms and conditions of each engagement letter and shall not engage in any other services unless each of said services, if any, shall have been specifically approved (including the specific approval of all fees associated therewith) by the Audit Committee in advance of the rendering any such service.

Vote Required

This proposal requires the affirmative vote of a majority of the common shares cast at the annual meeting, whether in person or by proxy.

Recommendation of the Board:

The Board of Directors recommends a vote FOR the ratification of Eisner LLP as the company’s independent registered public accounting firm for the year ended December 31, 2009.

STOCK OWNERSHIP BY DIRECTORS,
OFFICERS AND 5 PERCENT OWNERS

The following table shows how much Torvec common stock is owned by each of our directors, nominees, named executive officers and by persons who have told us they own at least 5% of our common stock, all calculated as of December 1, 2009.

The percentages set forth in the table are based upon the number of common shares outstanding as of December 1, 2009, namely, 35,448,646.

The number of common shares owned by each person reflects his or her “beneficial ownership” of our common stock, meaning the number includes common shares which may be acquired by that person by the exercise of options and/or warrants on or within 60 days after December 1, 2009. The number also includes common shares owned by each person indirectly, such as through a trust.

		Amount and Nature				Percent
Name of		of				Common Stock
Beneficial Owner		Beneficial Ownership				Owned
Margaret F. Gleasman			2,310,314	(1)			6.5	%

				Number of				Percent
Name of				Shares				of Shares
Beneficial Owner		Position		Owned				Owned
Gary A. Siconolfi		Chairman of Board			405,498	(1)			1. 14	%
James Y. Gleasman		Chief Executive Officer, Interim Chief Financial Officer, Director			5,884,013	(2)			15. 37	%
Keith E. Gleasman		President, Torvec, Inc.;			9,328,273	(3)			23. 34	%
		Director
Herbert H. Dobbs		Director			397,469				1.12	%
Daniel R. Bickel		Director			135,723	(4)		Less than 1%
Joseph B. Rizzo		Director			12,004			Less than 1%
Asher J. Flaum		Director			441,211	(5)			1.23	%
William W. Destler		Director			20,000			Less than 1		%
All Directors as a Group					13,518,693	(6)			37. 89	%

Section 16(a) Beneficial Ownership Reporting Compliance

Section  16(a) of the Securities Exchange Act of 1934 requires our directors, our executive officers and persons who own more than 10% of our common stock to file initial reports of ownership (Form 3) and reports of changes in ownership of our common stock (Forms 4 and 5) with the Securities and Exchange Commission. These persons are required by SEC regulations to furnish us with copies of all section 16(a) reports they file.

Based upon company records and other information, we believe that for the year ended December 31, 2008 and for the period January 1, 2009 through December 1, 2009, all our directors and executive officers complied with all applicable filing requirements.

Shareholders Proposals for 2010

Common shareholders may present matters for consideration at our next annual meeting either by having the matter included in the company’s own Proxy Statement and listed on its Proxy Card or by conducting his or her own proxy solicitation.

To have your proposal included in our Proxy Statement and listed on our Proxy Card for the 2010 annual meeting, you must submit your proposal to the company before August 2, 2010 in writing to Herbert H. Dobbs, Secretary, Torvec, Inc., Mount Read Industrial Facility, 1999 Mount Read Blvd., Rochester, New York 14615. You may submit a proposal only if you have continuously owned at least $2,000 worth or 1% in market value of the company’s common stock for at least 1 year before you submit your proposal to the company, and you must continue to hold this level of common security ownership in our company through the 2010 annual meeting of shareholders.

If you decide to conduct your own proxy solicitation, you must provide the company with written notice of your intent to present your proposal at the 2010 annual meeting, and the written notice must be received by the company before November 4, 2010. If you submit a proposal for the 2010 annual meeting after November 4, 2010, management may or may not in its sole discretion, present the proposal at the annual meeting, and the proxies for the 2010 annual meeting will confer discretion on management proxy holders to vote against your proposal.

Annual Report

The Annual Report ( Form 10-K ) for 2008 including the company’s consolidated financial statements, is being mailed to you together with this proxy statement.

Multiple Shareholders Sharing the Same Address

If you and other residents at your mailing address own shares of common stock in street name, your broker or bank may have sent you a notice that your household will receive only one annual report and proxy statement. This practice is known as “householding” and is designed to reduce our printing and postage costs. However, if any shareholder residing at such an address wishes to receive a separate annual report or proxy statement, he or she may telephone James Y. Gleasman, c/o Investor Relations at 585-254-1100 or write us at Torvec, Inc., c/o Investor Relations, Mt. Read Industrial Facility, 1999 Mt. Read Blvd., Rochester, New York 14615.

The notice of the annual meeting of shareholders, this proxy statement and accompanying proxy card has been authorized by order of the board of directors.

December 1, 2009		/S/ HERBERT H. DOBBS
		Herbert H. Dobbs, Secretary

TORVEC, INC., Mt. Read Industrial Facility, 1999 Mt. Read Blvd. Rochester, New York 14615
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 28, 2010

The undersigned shareholder of Torvec, Inc. hereby appoints and constitutes James Y. Gleasman and Keith E. Gleasman, and either of them, the proxy or proxies of the undersigned with full power of substitution and revocation, for and in the name of the undersigned to attend the annual meeting of shareholders of the company to be held at the Casa Larga Vineyards, 2287 Turk Hill Road, Fairport, New York 14450, on Thursday, January 28, 2010, at 7:00 P.M., local time, and any and all adjournments of said meeting, and to vote all shares of stock of Torvec, Inc., registered in the name of the undersigned and entitled to vote at said meeting upon the matters set forth below.

Management Recommends a VOTE FOR Items 1 and 2

1.

ELECTION OF DIRECTORS : Election of the directors listed below to serve until the next annual meeting of shareholders and until their successors are duly elected and qualified.

FOR ALL NOMINEES LISTED BELOW: (EXCEPT AS MARKED TO THE CONTRARY BELOW):

WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW:

INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through his name on the list below:

Gary A. Siconolfi, James Y. Gleasman, Keith E. Gleasman, Herbert H. Dobbs, Daniel R. Bickel, Asher J. Flaum, Joseph B. Rizzo and William W. Destler

2.

APPOINTMENT OF AUDITORS : Ratification of the appointment of Eisner LLP by the Audit Committee of the board of directors as the company’s Independent Registered Public Accounting Firm for the year ending December 31, 2009.

						Torvec, Inc.
FOR		AGAINST		ABSTAIN		Annual Meeting — January 28, 2010
						Dated:
						Number of Shares Voted

				Signature
This Proxy will be voted as specified. If no specification is made, this Proxy will be voted IN FAVOR OF PROPOSALS 1 and 2		Joint owners should each sign. Executors, trustees, guardians, corporate officers, and other representatives should give title		Signature

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

CurAegis Technologies (CE) (USOTC:CRGS)
Historical Stock Chart
From Jun 2024 to Jul 2024

CurAegis Technologies (CE) (USOTC:CRGS)
Historical Stock Chart
From Jul 2023 to Jul 2024