SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
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the Registrant
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x
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to §240.14a-11(c) or
§240.14a-12
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Sinoenergy
Corporation
(Name of
Registrant as Specified In Its Charter)
N.A.
(Name of
Person(s) Filing Proxy Statement if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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$125
per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
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$500
per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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(1)
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Title
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(2)
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Aggregate
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Per
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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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Proposed
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SINOENERGY
CORPORATION
1603-1604,
Tower B Fortune Centre Ao City
Beiyuan
Road, Chaoyang District
Beijing
China, 100107
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
January
19, 2010
NOTICE IS
HEREBY GIVEN that the 2010 Annual Meeting of Stockholders of Sinoenergy
Corporation, will be held at the offices of the Corporation, 1603-1604, Tower B
Fortune Centre Ao City, Beiyuan Road, Chaoyang District, Beijing, China, 100107,
on Tuesday, January 19, 2010, at 10:00 A.M. local time. At the meeting, you will
be asked to vote on:
(1)
The election of seven directors to serve until the
next annual meeting of stockholders and until their successors are elected and
qualified; and
(2)
The transaction of such other and further business as
may properly come before the meeting.
The board
of directors has fixed the close of business on November 30, 2009 as the record
date for the determination of stockholders entitled to notice of and to vote at
the annual meeting. A list of stockholders of record on the record date will be
available for inspection by stockholders at the office of the Corporation,
1603-1604, Tower B Fortune Centre Ao City, Beiyuan Road, Chaoyang District,
Beijing, China, 100107during the ten days prior to the meeting.
The
enclosed proxy statement contains information pertaining to the matters to be
voted on at the annual meeting.
|
|
By
order of the Board of Directors
Anlin
Xiong
Secretary
|
Beijing,
China
December
29, 2009
THIS
MEETING IS VERY IMPORTANT TO US AND TO OUR STOCKHOLDERS. WHETHER OR NOT YOU PLAN
TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PRE-ADDRESSED POSTAGE-PAID ENVELOPE
AS DESCRIBED ON THE ENCLOSED PROXY CARD. YOUR PROXY, GIVEN THROUGH THE RETURN OF
THE ENCLOSED PROXY CARD, MAY BE REVOKED PRIOR TO ITS EXERCISE BY FILING WITH OUR
CORPORATE SECRETARY PRIOR TO THE MEETING A WRITTEN NOTICE OF REVOCATION OR A
DULY EXECUTED PROXY BEARING A LATER DATE, OR BY ATTENDING THE MEETING AND VOTING
IN PERSON.
SINOENERGY
CORPORATION
1603-1604,
Tower B Fortune Centre Ao City
Beiyuan
Road, Chaoyang District
Beijing
China, 100107
PROXY
STATEMENT
Annual
Meeting of Stockholders
January
19, 2010
The
accompanying proxy and this proxy statement have been prepared by our management
for the board of directors. Your proxy is being solicited by the board of
directors for use at the 2010 annual meeting of stockholders to be held at the
offices of the Corporation, 1603-1604, Tower B Fortune Centre Ao City, Beiyuan
Road, Chaoyang District, Beijing, China, 100107 on Friday, January
19, 2010 at 10:00 A.M., local time, or at any adjournment thereof. This proxy
statement contains information about the matters to be considered at the meeting
or any adjournments or postponements of the meeting and is first being mailed to
stockholders, on or about December 30, 2009.
ABOUT
THE MEETING
What
is being considered at the meeting?
You will
be voting for:
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●
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The
election of seven directors to serve until the next annual meeting of
stockholders and until their successors are elected and qualified;
and
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●
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The
transaction of such other and further business as may properly come before
the meeting.
|
Who
is soliciting your proxy?
Your
proxy is being solicited by our board of directors.
Who
is entitled to vote at the meeting?
You may
vote if you owned stock as of the close of business on November 30, 2009,
which is the record date for determining who is eligible to vote at the annual
meeting. Each share of common stock is entitled to one vote.
How
do I vote?
You can
vote either by attending the meeting and voting at the meeting or by completing,
signing and returning the enclosed proxy card.
Can
I change my mind after I vote?
Yes, you
may change your mind at any time before the polls close at the meeting. You can
change your vote by signing another proxy with a later date and returning it to
us prior to the meeting or by voting again at the meeting. If your stock is held
in a brokerage account, you must provide your broker with instructions as to any
changes in the voting instructions which you previously provided to your
broker.
What
if I sign and return my proxy card but I do not include voting
instructions?
If you
sign your proxy card and return it to us but you do not include voting
instructions as to any proposal, your proxy will be voted FOR the election of
the board of directors’ nominees for directors.
What
does it mean if I receive more than one proxy card?
It means
that you have multiple accounts with brokers and/or our transfer agent. Please
vote all of these shares. We recommend that you contact your broker and/or our
transfer agent to consolidate as many accounts as possible under the same name
and address. Our transfer agent is Continental Stock Transfer and Trust Company,
17 Battery Place, New York, New York 10004.
Will
my shares be voted if I do not provide my proxy?
If they
are held in a brokerage account, they may be voted for the election of directors
if you provide your broker with instructions as to how you want your shares
voted. Your broker will send you instructions as to how
you can vote shares that are held in your brokerage account. If you
do not give your broker instructions as to how you want your shares to be voted,
then your shares will not be voted. .
If you
hold your shares directly in your own name, they will only be voted if you
either sign and deliver a proxy or attend and vote at the meeting.
How
many votes must be present to hold the meeting?
In order
for us to conduct our meeting, we must have a quorum. We will have a quorum, and
be able to conduct the meeting, if a majority of our outstanding shares as of
November 30, 2009, are present at the meeting. Your shares will be counted as
being present at the meeting if you attend the meeting or if you properly return
a proxy by mail or if you give your broker voting instructions and the broker
votes your shares.
On the
record date, November 30, 2009, we had 15,922,391 shares of common stock
outstanding. This number of shares does not include treasury stock. We will have
a quorum if 7,961,196 shares of common stock are present and voting at the
annual meeting.
What
vote is required to elect directors?
Directors
are elected by a plurality of the votes cast, which means that, as long as a
quorum is present, the seven nominees for director who receive the most votes
will be elected. Abstentions will have no effect on the voting outcome with
respect to the election of directors.
How
are broker non-votes treated at the meeting?
Broker
non-votes are proxies signed by brokers without voting on the election of
directors. Broker non-votes are treated as present at the meeting for
purposes of determining whether we have a quorum. However, since
directors are elected by a plurality, and broker non-votes will not be voted for
any nominees, as long as we have a quorum, including shares represented by
broker non-votes, the seven nominees for directors who receive the most votes
will be elected.
Who is paying the cost of the
meeting?
We will
pay for preparing, printing and mailing this proxy statement. Proxies may be
solicited on our behalf by our directors, officers or employees in person or by
telephone, electronic transmission and facsimile transmission. We will reimburse
banks, brokers and other custodians, nominees and fiduciaries for their
out-of-pocket costs of sending the proxy materials to our beneficial
owners. We estimate our costs at approximately $10,000.
ELECTION OF
DIRECTORS
Directors
are elected annually by the stockholders to serve until the next annual meeting
of stockholders and until their respective successors are duly elected. Our
bylaws provide that the number of directors comprising the whole board shall be
determined from time to time by the Board. The size of the board for the ensuing
year is seven directors. Our board of directors is recommending that the seven
incumbent directors named below be re-elected. If any nominee becomes
unavailable for any reason, a situation which is not anticipated, a substitute
nominee may be proposed by the board, and any shares represented by proxy will
be voted for the substitute nominee, unless the board reduces the number of
directors.
All of
our present directors, other than Xiang Dong (Donald) Yang, were elected in 2006
by Skywide, which was, at that time, the holder of a majority of the outstanding
shares of our common stock, and information concerning their election was
provided to shareholders in an information statement. We have not held a meeting
of shareholders since 2006.
All of
the nominees for election have consented to being named in this proxy statement
and to serve if elected. The following table sets forth certain information
concerning the nominees for director.
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Name
|
|
Age
|
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Position
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Bo
Huang
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39
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Chief
executive officer and director
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Tianzhou
Deng
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53
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Chairman
and director
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Robert
I. Adler
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75
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Director
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Renjie
Lu
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74
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Director
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Greg
Marcinkowski
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49
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Director
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Baoheng
Shi
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71
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Director
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Xiang
Dong (Donald) Yang
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43
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Director
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Bo Huang
has been our chief executive officer and a director since the completion of the
reverse acquisition in June 2006. He has been chief executive officer and
chairman of Sinogas since its organization in 2005. He and Mr. Deng are the
founders of Sinogas. He was president of Beijing Tricycle Technology Development
Co., Ltd., a company engaged in the development of natural gas conversion kits
from 2003 to 2005, and vice president of Chengchen Group, an investment and
trading company from 1997 to 2003. Mr. Huang graduated from Renmin University of
China in Beijing in 1993 with a bachelor’s degree in international
finance.
Tianzhou
Deng has been our chairman and a director since the completion of the reverse
acquisition in June 2006. He is also a founder of Sinogas. He has been the chief
executive officer and chairman of Beijing Sinogas Co., Ltd ., a company engaged
in research and development with respect to CNG stations from 2001 to 2005,
chairman of Shanghai CNPC Group Co., Ltd., an investment and trading company
from 2003 to 2005, president and director of Beijing Tricycle Technology
Development Co., Ltd., a company engaged in the development of natural gas
conversion kits from 1999 to 2001, president and director of Natural Gas Vehicle
Development Center, from 1997 to 1999. Mr. Deng graduated from University of
Petroleum, China in 1982 with a chemical bachelor degree, and received a master
of management degree from China Science & Technology University. Mr. Deng
holds a senior engineer certificate with professor rank issued by the Chinese
government. Mr. Deng is recognized as a leader in the CNG/LPG industry in
China.
Robert I.
Adler has been a director since July 2006. Mr. Adler is a private
investor. He retired in 1973 from a position as investment advisor with UBS
Financial Services, where he had been employed for the prior year. Mr. Adler’s
prior experience includes terms as a managing director for ING Furman Selz Asset
Management, vice president and senior investment officer of BHF Securities Corp
and DG Bank, New York Branch and vice president of Kuhn, Loeb & Co. Recently
he taught financial English for a semester in Shanghai University of Finance and
Economics. Mr. Adler obtained a B.A. degree from Swarthmore College and studied
at New York University School of Business Administration. He is a member of
Institute of Chartered Financial Analysts and the New York Society of Security
Analysts. Mr. Adler is also a director of China Medicine Corporation, a company
that markets and distributes medicine products in the PRC, and Precision
Aerospace Components, Inc., a stocking distributor of precision fasteners based
in New York City.
Renjie Lu
has been a director since July 2006. Mr. Lu has more than 40 years of
working experience in the energy industry in China. As an industry veteran, he
currently is a senior member of the Advisory Council Committee of Shengli
Administration Bureau, SINOPEC (China Petroleum & Chemical Corp, a
NYSE-listed company). Mr. Lu was chief executive officer and director of Shengli
Administration Bureau, SINOPEC from 1989 to 1996, where he managed about 500,000
employees; he was chief executive officer and director of Jianghan
Administration Bureau, SINOPEC from 1987 to 1989; and executive vice president
of Zhongyuan Exploration Bureau, SINOPEC from 1975 to 1987. Mr. Lu graduated
from University of Petroleum, China in 1963 with a BSc.
Greg
Marcinkowski has been a director since July 2006. Mr. Marcinkowski
has been a vice president of operations at WorldStrides since 2000. WorldStrides
is a U.S. provider of student educational and performing arts tours in a variety
of programs and destinations throughout the world. From 1999 to 2000, Mr.
Marcinkowski was the vice president of purchasing at Solo Cup Corporation, which
is a manufacturer of packaging products for retail food industries. Mr.
Marcinkowski has a MBA and a BSc in mechanical engineering from Northwestern
University.
Baoheng
Shi has been a director since July 2006. Mr. Shi is a pioneer and a top
scientist/researcher in the Chinese clean energy area. Mr. Shi is a professor at
Beijing University, University of Petroleum, China, and China Geology
University. He is deputy director of natural resource, China National Science
& Technology Development Committee. Since 1993, Mr. Shi has initiated
natural gas vehicle usage in China, and is recognized as a pioneer in the
industry in China. He published “Natural Gas Vehicle Development” in 1999 and
“Technology of Natural Gas Vehicle” in 2000. Mr. Shi has been director of New
Technology Development Center, China National Petroleum Corp, a NYSE-listed
company from 1993 to 2000; president of China National Petroleum’s Science &
Technology Bureau from 1978 to 1993. Mr. Shi has a B.Sc. from Beijing
University.
Xiang
Dong (Donald) Yang has been a director since May 2008. Mr. Yang has been
president of Abax Global Capital, a Hong Kong based investment firm of which Mr.
Yang is a founding partner, focused on Pan-Asian public and private investments
with a particular emphasis on Greater China and South East Asia. From 2000 to
2007, Mr. Yang was a managing director and head of Hong Kong and China Debt
Capital Market at Merrill Lynch. Mr. Yang holds an MBA degree from the Wharton
School of Business and a BA degree from Nankai University in China. Abax Lotus
Ltd., an affiliate of Abax Global Capital, is the lead investor in our
$30,000,000 note financing which closed in September 2007, having purchased
$10,700,000 principal amount of our 12% Guaranteed Senior Notes due 2012 and
$9,300,000 principal amount of our 3% Guaranteed Senior Convertible Note due
2012. Abax Lotus has transferred its notes to its affiliates, Abax Nai Xin A Ltd
and, Abax Jade Ltd. Pursuant to an investor rights agreement, Abax has the right
to appoint up to 20% of the members of our board of directors and Mr. Tianzhou
Deng, our chairman of the board of directors, and Mr. Bo Huang, our chief
executive officer, have agreed to vote the shares of common stock beneficially
owned by them in favor of the election of the Abax nominees for director at each
annual or special meeting of shareholders at which an election of directors is
held or pursuant to any written consent of the shareholders.
Director
Independence
Four of
our directors, Robert I. Adler, Greg Marcinkowski, Renjie Lu, Baoheng Shi, are
independent directors, using the Nasdaq definition of independence. These four
directors comprise the audit committee and the stock option subcommittee of the
compensation committee and they, together with Mr. Tianzhou Deng, our chairman,
comprise the compensation committee. Mr. Deng is not an independent director.
Because of his affiliation with Abax Global Capital, Mr. Yang is not deemed to
be an independent director.
Committees
Our
business, property and affairs are managed by or under the direction of the
board of directors. Members of the board are kept informed of our business
through discussion with the chief executive and financial officers and other
officers, by reviewing materials provided to them and by participating at
meetings of the board and its committees.
Our board
of directors has three committees - the audit committee, the compensation
committee and the corporate governance/nominating committee. The audit committee
is comprised of Robert I. Adler, Greg Marcinkowski, Renjie Lu, Baoheng Shi,
with Mr. Adler as chairman. The compensation committee is comprised of Renjie
Lu, Robert I. Adler, Greg Marcinkowski and Baoheng Shi, with Mr. Lu as chairman.
The nomination committee is comprised of Robert I. Adler, Greg Marcinkowski,
Renjie Lu, Baoheng Shi, with Mr. Shi as chairman. Our 2006 long-term incentive
plan is administered by the compensation committee.
Our audit
committee is involved in discussions with our independent auditor with respect
to the scope and results of our year-end audit, our quarterly results of
operations, our internal accounting controls and the professional services
furnished by the independent auditor. Our board of directors has adopted a
written charter for the audit committee which the audit committee reviews and
reassesses for adequacy on an annual basis.
The
compensation committee serves as the stock option committee for our stock option
plan, and it reviews and approves any employment agreements with management and
changes in compensation for our executive officers.
The
nomination committee will be involved evaluating the desirability of and
recommending to the board any changes in the size and composition of the board,
evaluation of and successor planning for the chief executive officer and other
executive officers. In September 2009, the board of directors
approved the merger of us with and into Skywide, which is wholly-owned by Mr.
Deng and Mr. Huang. See “Related Party Transactions.” All
directors who are elected at this meeting will cease serving as directors upon
the completion of the merger with Skywide, at which time the sole directors will
be Mr. Deng and Mr. Huang, who are the directors of
Skywide. Accordingly, the nominating committee did not seek any
additional potential candidates for directors and recommended that the current
director be named as the board of directors nominees for director.
During
the year ended September 30, 2009, the board of directors appointed a special
committee, whose members are Robert I. Adler, Greg Marcinkowski, Renjie
Lu, Baoheng Shi, with Mr. Adler as chairman. The function of the
special committee was to determine whether an acquisition of us by Skywide was
in our and our shareholders’ best interests and, if they were to reach an
affirmative conclusion in that regard, to review, evaluate and negotiate the
terms and conditions of the merger and the merger agreement. Each
member of the special committee is being paid $20,000 for his services on the
committee, except for Mr. Adler, who is being paid $30,000 for his services as
chairman of the special committee.
Section
16(a) Compliance
Section
16(a) of the Securities Exchange Act of 1934, requires our directors, executive
officers and persons who own more than 10% of our common stock to file with the
SEC initial reports of ownership and reports of changes in ownership of common
stock and other of our equity securities. During the fiscal year ended September
30, 2009, the following officers, directors and 10% stockholders were late in
their filings: Shiao Ming Sheng was late in filing a Form 3. Mr. Liu,
Mr. Adler, Mr. Marcinkowski and Mr. Shi were late in filing a Form
4. Donald Yang, Abax Lotus Ltd., Abax Global Opportunities Fund, Abax
Arhat Fund, Abax Upland Fund LLC, Abax Global Capital and Abax Claremont Ltd.
were each late in filing a Form 3 and Form 4. Abax Nai Xin A Ltd. and
Abax Jade Ltd. were each late in filing a Form 3. Jeff Feinberg was
late in filing five separate Form 4s. Chongjun Duan was late in
filing a Form 3.
Directors’
Compensation
Each
independent director receives an annual directors’ fee of $18,000. Pursuant to
the 2006 long-term incentive plan, each newly-elected independent director
received at the time of his or her election, a five-year option to purchase
15,000 shares of common stock at fair market value on the date of his or her
election. In addition, the plan provides for the annual grant to each
independent director of an option to purchase 2,500 shares of common stock on
first trading day in April of each calendar year at market price commencing in
2007 and 5,000 shares commencing in 2009. Tianzhou Deng is our
chairman. He received an annual salary of $
42
,
000
.
He is eligible
for the grant of options pursuant to our 2006 long term incentive
plan.
The
following table sets forth information as to compensation paid to our directors
who are not listed in the Summary Compensation Table during the year ended
September 30, 2009.
|
Director
Compensation
|
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|
Name
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Fees
Earned
or
Paid in Cash
|
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Option
Awards
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All
Other
Compensation
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Total
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On April
1, 2009, we granted Mr. Adler, Mr. Lu, Mr. Marcinkowski and Mr. Shi options to
purchase 5,000 shares at an exercise price of $1.32 pursuant to the automatic
grant provisions of our 2006 long-term incentive plan.
The value of the options was
determined in accordance with the Black-Scholes option pricing
model.
The compensation
paid to our directors included, with respect to the members of the special
committee, compensation of $20,000 to be paid to each of Messrs. Lu,
Marcinkowski and Shi for services as members of the special committee and of
$30,000 to be paid to Mr. Adler for services as chairman of the special
committee. The compensation to the special committee members,
including the chairman, was accrued, but not paid, in the year ended September
30, 2009.
Communications with our Board of
Directors
Any
stockholder who wishes to send a communication to our board of directors should
address the communication either to the board of directors or to the individual
director c/o Mr. Anlin Xiong, Secretary, Sinoenergy Corporation, 1603-1604,
Tower B Fortune Centre Ao City, Beiyuan Road, Chaoyang District, Beijing, China,
100107. Mr. Xiong will forward the communication either to all of the directors,
if the communication is addressed to the board, or to the individual director,
if the communication is directed to a director.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
The
following table provides information as to shares of common stock beneficially
owned as of November 30, 2009 by:
|
●
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Each
current officer named in the summary compensation
table;
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●
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Each
person owning of record or known by us, based on information provided to
us by the persons named below, at least 5% of our common stock;
and
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●
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All
directors and officers as a group
|
For
purposes of the following table, “beneficial ownership” means the sole or shared
power to vote, or to direct the voting of, a security, or sole or shared
investment power with respect to a security, or any combination thereof, and the
right to acquire such power (for example, through the exercise of employee stock
options granted by the Company) within 60 days. Unless otherwise noted, the
business address of each of our directors and officers is 1603-1604, Tower B
Fortune Centre Ao City, Beiyuan Road, Chaoyang District, Beijing, People’s
Republic of China 100107.
|
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Shares
of Common
Stock
Beneficially
Owned
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Number
of
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Name and Address of Beneficial
Owner
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Shares
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Percent
(1)
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Tianzhou
Deng (2)
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3,188,551
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20.0
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%
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Bo
Huang (2)
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3,188,551
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20.0
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%
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Chongjun
Duan (3)
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2,080,699
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13.1
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%
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Xiang
Dong (Donald) Yang (4)
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2,249,036
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12.4
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%
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Abax
Nai Xin A Ltd. (4)
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1,741,405
|
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9.9
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%
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CCIF
Petrol Limited (5)
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1,119,048
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6.6
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%
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Robert
I. Adler (6)
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25,000
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*
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Greg
Marcinkowski (6)
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25,000
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*
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Renjie
Lu (6)
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25,000
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*
|
|
|
Baoheng
Shi (6)
|
|
|
25,000
|
|
|
|
*
|
|
|
Anlin
Xiong
|
|
|
0
|
|
|
|
0
|
|
|
Shiao
Ming Sheng
|
|
|
0
|
|
|
|
0
|
|
|
Cindy
Ye
|
|
|
0
|
|
|
|
0
|
|
|
All
directors and executive officers as a group (seven persons
owning stock)
|
|
|
8,726,138
|
|
|
|
47.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
_________________
|
|
|
|
|
|
|
|
|
|
*
Represents less than 1% of the shares outstanding
|
|
|
|
|
|
|
|
|
(1) Based
upon 15,922,391shares of common stock outstanding on November 30,
2009.
(2) Include
50,000 shares of common stock which each of Mr. Deng and Mr., Huang have the
right to acquire pursuant to options exercisable within 60 days of November 30,
2009. Mr. Deng and Mr. Huang each owns a 50% interest in Skywide,
which owns 6,277,102 shares of common stock. Thus, Mr. Deng and Mr. Huang are
deemed to beneficially own 50% of the shares owned by Skywide. As the sole
owners of Skywide, they have joint voting and dispositive power with respect to
the shares owned by Skywide.
(3) The
business address of Chongjun Duan is 26 Huangsi Street, Building 1, F1 11,
Xicheng District, Beijing, Peoples Republic of China. The information concerning
Chongjun Duan was derived from a Schedule 13G filed with the SEC on March 17,
2009.
(4) Mr.
Yang is a director, and he may be deemed a controlling person with respect to
Abax Lotus, Ltd., Abax Nai Xin and Abax Jade. The shares deemed to be
beneficially owned by Mr. Yang represent the shares of common stock directly and
beneficially owned by Abax Nai Xin and Abax Jade. In September 2007,
Abax Lotus purchased from us 12% senior notes and 3% senior convertible notes in
the principal amount of $9,300,000, which are convertible into 2,214,286 shares
of common stock at the current conversion rate, and Abax Lotus subsequently
purchased 34,750 shares of common stock in the open market. On May 1,
2009, Abax Lotus transferred to its affiliates, Abax Nai Xin and Abax Jade, for
no consideration, the notes and shares of common stock. As a result
of that transfer Abax Nai Xin owns 27,119 shares of common stock and $7,200,000
principal amount of 12% senior notes and 3% convertible notes, which are
convertible into 1,714,286 shares of common stock, and Abax Jade owns 7,631
shares of common stock and $2,100,000 principal amount of 12% senior notes and
3% convertible notes which are convertible into 500,000 shares of common
stock. Mr. Yang has sole voting and dispositive power with respect to
the securities owned by Abax Lotus, Abax Nai Xin and Abax Jade. Mr. Yang
disclaims beneficial ownership of these securities, except to the extent of his
pecuniary interest therein. Mr. Yang does not have any direct
interest in the Sinoenergy securities owned by Abax Nai Xin and Abax
Jade. Mr. Yang is an equity holder in the management company that
acts as advisor to Abax Nai Xin and Abax Jade, of which Sinoenergy is a
portfolio company. The business address of Mr. Yang and Abax Nai Xin
A Ltd. is Suite 6708, 67/F Two Int’l Finance Center, Hong Kong.
(5) The
shares beneficially owned by CCIF Petrol Limited represent shares of common
stock issuable upon conversion of our 3.0% convertible notes in the principal
amount of $4,700,000. CCIF Petrol Limited is wholly owned by China Century
Investment Fund Limited, a Cayman Islands company, whose sole corporate director
is China Renaissance Capital Investment Inc., a Cayman Islands company. Voting
and investment powers of securities held by CCIF Petrol Limited is exercised by
the board of directors of China Renaissance Capital Investment Inc. which
consists of Mark Qiu, Hung Shih, Li Zhenzhi, Charles Pieper and Nicole
Arnaboldi. The business address of CCIF Petrol Limited is c/o China
Renaissance Capital Investment Inc., M&C Corporate Services, Ltd., P.O. Box
309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman
Islands.
(6) The
shares beneficially owned by Mr. Adler, Mr. Marcinkowski, Mr. Lu, and Mr. Shi
represent shares issuable upon exercise of options held by each of
them.
Compensation
The
following table is the compensation to our chief executive officer and chief
financial officer during the year ended September 30, 2009 and 2008. No officer
received compensation of $100,000 or more.
Summary
Compensation Table
Name
and principal position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bo
Huang, chief executive officer
|
|
2009
|
|
$
|
60,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60,000
|
|
|
|
|
2008
|
|
|
50,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
50,000
|
|
|
ShiaoMing
Sheng, chief financial officer
|
|
2009
|
|
|
55,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
55,000
|
|
Employment
Agreements
Except
for an employment agreement with Shiao Ming Sheng, we have no employment
agreements with any of our executive officers, and none of our executive
officers have any severance arrangements.
On
October 20, 2008, we entered into an employment agreement with Mr. Sheng to
serve as our chief financial officer, for an initial term of three years.
Pursuant to the agreement, Mr. Sheng shall receive compensation of $5,000 per
month during the term of the agreement. Mr. Sheng shall also receive a $5,000
bonus on each anniversary of the effective date. In addition, Mr. Sheng shall
receive an aggregate of 30,000 shares of common stock of the Company during the
initial term of the agreement as follows. Mr. Sheng will not receive any shares
until he has been employed for one year, at which time he is to receive 10,000
shares. Thereafter, his shares will vest at the rate of 833 shares per month
over the remaining two years of the initial term. The shares of common stock
issuable to Mr. Sheng shall be transferred by Skywide, our principal stockholder
which is owned by Mr. Tianzhou Deng and Mr. Bo Huang.
Pursuant
to the employment agreement, Mr. Sheng will also receive options to purchase up
to 150,000 shares of common stock, of which 50,000 shares shall be granted
annually commencing on the effective date of his employment, which was October
20, 2008, and on each anniversary of the effective date during the initial
term. The options will be immediately excisable upon grant and will
terminate upon termination of Mr. Sheng’s employment under the terms of the
employment agreement. After completing one full year of employment, the second
and third option grants covering 50,000 shares of common stock per year will be
adjusted in direct proportion to the length of his employment. The exercise
price of the options granted shall be equal to the intraday market price of our
common stock on the date the options are granted. Mr. Sheng is also to receive
certain performance-based compensation in the form of an increase in number of
shares underlying the options to be granted to him, depending on our stock price
performance at the end of Mr. Sheng’s first full employment year. Pursuant to
this provision, Mr. Sheng may receive additional options equivalent to 50% of
the margin of increase of our stock price at the end of first full employment
year. For the second and third years of employment, the additional amount of
options granted to Mr. Sheng will be directly proportional to the percentage
increase in our stock price. Thus, if the stock price increases by 100% during
Mr.Sheng’s first year, the number of shares subject to options will increase by
50%. During the second and third years, the number of shares subject
to options for each year will increase by the same percentage as the increase in
the stock price.
Mr.
Sheng’s employment may be terminated at any time, with or without cause. In the
event that Mr. Sheng’s employment is terminated by us without cause, Mr. Sheng
is entitled to a severance payment of two months salary.
2006 Long-Term Incentive
Plan
In 2006,
we adopted the 2006 long-term incentive plan covering 1,000,000 shares of common
stock. The plan provides for the grant of incentive and non-qualified options,
stock grants, stock appreciation rights and other equity-based incentives to
employees, including officers, and consultants. The 2006 Plan is to be
administered by a committee of not less than two directors each of whom is to be
an independent director. In the absence of a committee, the plan is administered
by the board of directors. The plan is presently administered by the
compensation committee. Independent directors are not eligible for
discretionary options. However, each newly elected independent director receives
at the time of his election, a five-year option to purchase 15,000 shares of
common stock at the market price on the date of his or her election. In
addition, the plan provides for the annual grant of an option to purchase 2,500
shares of common stock on April 1st of each year, commencing April 1,
2007.
Outstanding
Equity Awards at Fiscal Year End
During
the year ended September 30, 2009, we did not grant any options or stock awards
to the officers named in the summary compensation table. The
following table sets forth information as to options held at September 30, 2009
by the officers named in the Summary Compensation Table.
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
Number of Securities
Underlying
Unexercised Options
(#) Unexercisable
|
|
Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised
Unearned Options (#)
|
|
Option Exercise
Price ($)
|
|
Option
Expiration Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shiao
Ming Sheng
|
|
|
0
|
|
0
|
|
0
|
|
|
|
|
|
No
options were exercised by any officer named in the summary compensation table.
And no stock awards granted to any officer during the year ended September 30,
2009.
RELATED
PARTY TRANSACTIONS
From the time of our
organization until Sinoenergy Holding acquired Sinogas in November 2005, the
principal shareholder of Sinogas was Beijing Sanhuan Technology Development Co.,
Ltd. (“Beijing Sanhuan”), which was then owned by Bo Huang and Tianzhou Deng.
Mr. Huang and Mr. Deng have advised us that they no longer have any direct or
indirect ownership or, and are not directors of, Beijing Sanhuan, except that
Mr. Bo Huang was still the legal representative of Beijing Sanhuan before July
2007. During 2005, Sinogas signed an agreement to acquire the land use right for
the land on which Sinogas’ offices and manufacturing facilities are located with
initial transfer price of $12.3 million, of which $5.0 million was paid during
2005 and $4.1 million was paid in 2006. In May 2007, the purchase price for the
land use right was increased to $18.6 million pursuant to an amendment to the
sales agreement, as a result of increased costs and an increase in the value of
the land use right. Pursuant to the amendment, the increase was conditioned upon
Beijing Sanhuan providing the Company with a special purpose audit report to
support the increased cost, and the management is to engage third party
independent professionals to provide a report for the land use right valuation.
We considered that the independent valuation report was fair, based on the
nature of land use right and the fact that the price for the land use
right had been is increasing year by year and did not require a third party
report. In May 2007, we received the land use right certificate,
which has a term of 50 years. As of September 30, 2009, we had paid the purchase
price to Beijing Sanhuan in full.
We have
an agreement with Beijing Sanhuan pursuant to which Beijing Sanhuan granted us
the right to use Beijing Sanhuan’s technology and software relating to the
integration, installation and maintenance of CNG station
systems. Under this agreement, we pay Beijing Sanhuan for the
technology and software at the rate of $12,800 for each CNG substation and
$23,051 for each CNG mother station. The, which became effective on January 1,
2006 as a ten-year term. We also pay Beijing Sanhuan $64 per hour for engineers
provided by Beijing Sanhuan. We believe that the transactions with Beijing
Sanhuan were at prices and on terms no less favorable to us that would be
available from non-affiliated third parties.
Xiang
Dong (Donald) Yang, a director, is president of Abax Global
Capital. Abax Lotus Ltd is an affiliate of Abax Global Capital and is
the lead investor in our $30,000,000 note financing which closed in September
2007, having purchased $10,700,000 principal amount of our 12% senior notes due
2012 and $9,300,000 principal amount of our 3% senior convertible notes due
2012. Pursuant to an investor rights agreement, Abax has the right to appoint up
to 20% of the members of our board of directors and Mr. Tianzhou Deng, our
chairman of the board of directors, and Mr. Bo Huang, our chief executive
officer, have agreed to vote the shares of common stock beneficially owned by
them in favor of the election of the Abax nominees for director at each annual
or special meeting of shareholders at which an election of directors is held or
pursuant to any written consent of the shareholders. Mr. Yang is the
nominee of Abax. At the time Abax purchased its senior notes and
convertible notes, there was no relationship between us and either of the
investors.
The
indenture relating to the convertible notes provides for an adjustment in the
conversion price of the notes if we fail to meet certain earnings
levels. Although we did not meet the earnings level for 2007, the
investors waived the right to any adjustment based on 2007 net income, in
consideration for which Skywide agreed to pay the investors $600,000 by December
1, 2008. There was no formal arrangement between Skywide, the Company and
the noteholders pursuant to which Skywide agreed to make a payment to the
noteholders in consideration for the noteholders waiving the net income test for
2007. Since Skywide is our largest stockholder and is owned by our
chairman and our president, Skywide voluntarily agreed to enter into the
agreement with the noteholders since they felt it would be in our best interest
if there were no downward adjustment in the conversion price of the convertible
notes. The noteholders waived this obligation for no
consideration. Pursuant to an agreement dated December 17, 2009 among
the noteholders and us, the waived any downward adjustment in the conversion
price based on our failure to meet the net income requirements for 2008 and
2009.
Abax Nai
Xin A Ltd. and Abax Jade Ltd. (and their predecessors, which are affiliates of
the Abax Nai Xin A Ltd. and Abax Jade Ltd.) were issued 12% senior notes in the
total principal amount of $10,700,000 and 3% convertible notes in the total
principal amount of $9,300,000, and CCIF was issued 12% senior notes in the
principal amount of $5,300,000 and 3% convertible notes in the
principal amount of $4,700,000. All of these notes were outstanding
at September 30, 2009. Subsequent to September 30, 2009, the 12%
senior notes were paid in full. We paid interest to Abax and CCIF in
the amount of $1,476,501 in the year ended September 30, 2009 and $970,667 in
the year ended September 30, 2008.
We
entered into agreements dated October 5, 2009 and December 17, 2009 pursuant to
which among other thing, we paid the 12% senior notes in full and agreed to pay
the 3% convertible notes in two installments following completion of the merger
with Skywide. The first payment is due ten days after the completion
of the merger and the second payment is due 30 days
thereafter. Because the convertible notes are being paid in cash and
not converted, we are to pay interest on the convertible notes which will result
in a yield to maturity of 13.8% per annum, net of interest paid at the rate of
3% per annum. The note holders also agreed to waive any adjustment in
the conversion price of the convertible notes resulting from our failure to meet
the net income targets for 2008 and 2009 and from any sale of common stock or
the issuance of convertible securities at an exercise or conversion price which
is less than the conversion price of the notes, which is presently
$4.20. The noteholders also waived compliance with financial
covenants through March 31, 2010 and waived all but $280,000 of additional
interest resulting from our failure to register the shares of common stock
issuable upon conversion of the convertible notes.
On
October 12, 2009, we entered into an agreement and plan of merger with and into
Skywide Capital Management Limited, a corporation which is wholly owned by Mr.
Tianzhou Deng, our chairman, and Mr. Bo. Huang, our chief executive officer,
both of whom are also directors. Pursuant to the merger agreement, at the
effective time of the merger, each shares of common stock, other than shares
owned by Skywide, Mr. Deng and Mr. Huang, will become and be converted into the
right to receive, upon presentation of the certificates for their common stock,
the sum of $1.90. In addition, the holders of options and warrants, other
than those held by Mr. Deng and Mr. Huang, with an exercise price which is less
than $1.90 per share will receive, upon cancellation of the option or warrant,
the amount by which $1.90 exceeds the exercise price of the warrant or
option. The merger is subject to stockholder approval.
FINANCIAL
STATEMENTS
Our
audited financial statements, which include our consolidated balance sheets at
September 30, 2009 and 2008, and the related consolidated statements of
operations and comprehensive income, stockholders’ equity and cash flows for
each of the two years in the period ended September 30, 2009, are included in
our Form 10-K for the year ended September 30, 2009. A copy of our 10-K for 2009
either accompanied or preceded the delivery of this proxy
statement.
Copies of
our Form 10-K for the year ended September 30, 2009 may be obtained without
charge by writing to Mr. Anlin Xiong,, Secretary, Sinoenergy Corporation,
1603-1604, Tower B Fortune Centre Ao City, Beiyuan Road, Chaoyang District,
Beijing, China, 100107. Exhibits will be furnished upon request and upon payment
of a handling charge of $.25 per page, which represents our reasonable cost on
furnishing such exhibits. Copies of our Form 10-K are available on our website
at http://www.portasystems.com/secfilings/index.html. The SEC maintains a web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of such site is http//www.sec.gov.
OTHER MATTERS
Other Matters to be
Submitted
Our board
of directors does not intend to present to the meeting any matters not referred
to in the form of proxy. If any proposal not set forth in this proxy statement
should be presented for action at the meeting, and is a matter which should come
before the meeting, it is intended that the shares represented by proxies will
be voted with respect to such matters in accordance with the judgment of the
persons voting them.
Deadline for Submission of
Stockholder Proposals for the 2011 Annual Meeting
Proposals
of stockholders intended to be presented at the 2011 Annual Meeting of
Stockholders pursuant to SEC Rule 14a-8 must be received at our principal office
not later than September 30, 2010 to be included in the proxy statement for that
meeting.
In
addition, in order for a stockholder proposal to be presented at our meeting
without it being included in our proxy materials, notice of such proposal must
be delivered to the Secretary of our company at our principal offices no later
than November 30, 2010. If notice of any stockholder proposal is
received after November 30, 2010, then the notice will be considered untimely
and we are not required to present such proposal at the 2011 annual meeting. If
the board of directors chooses to present a proposal submitted after November
30, 2010 at the 2011 annual meeting, then the persons named in proxies solicited
by the board of directors for the 2011 annual meeting may exercise discretionary
voting power with respect to such proposal.
After
completion of the merger with Skywide, we will no longer be subject to the proxy
rules of the Securities and Exchange Commission.
|
|
By
Order of the Board of Directors
Bo
Huang
Chief
Executive Officer
|
December
29, 2009
PROXY
SINOENERGY
CORPORATION
2010
Annual Meeting of Stockholders - January 19, 2010
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby appoints Bo Huang and Tianzhou Deng or either one of them
acting in the absence of the other, with full power of substitution or
revocation, proxies for the undersigned, to vote at the 2010 Annual Meeting of
Stockholders of Sinoenergy Corporation (the "Company"), to be held at 10:00
a.m., local time, on Tuesday, January 19, 2010, at the offices of the Company,
1603-1604, Tower B Fortune Centre Ao City, Beiyuan Road, Chaoyang District,
Beijing, China, 100107, and at any adjournment or adjournments thereof,
according to the number of votes the undersigned might cast and with all powers
the undersigned would possess if personally present.
(1) To
elect the following seven (7) directors:
Bo Huang,
Tianzhou Deng, Robert I. Adler, Renjie Lu, Greg Marcinkowski, Baoheng Shi and
Xiang Dong (Donald) Yang
|_| FOR
all nominees listed above (except as marked to the contrary below).
|_|
Withhold authority to vote for all nominees listed above.
INSTRUCTION:
To withhold authority to vote for any individual nominee, print that nominee's
name below.
(2) In
their discretion, upon the transaction of such other business as may properly
come before the meeting;
all as
set forth in the Proxy Statement, dated December __, 2009.
The
shares represented by this proxy will be voted on Items 1 and 2 as directed by
the stockholder, but if no direction is indicated, will be voted FOR Items 1and
2.
If you
plan to attend the meeting please indicate below:
I plan to
attend the meeting |_|
Dated:
_________________________, 2009
|
|
(Signature(s))
Please
sign exactly as name(s) appear
hereon.
When signing as attorney,
executor,
administrator, trustee or
guardian,
please give full title as such.
Please
date, sign and mail this proxy in
the
enclosed envelope, which requires no
postage
if mailed in the United States.
|
-14-
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