Management Team
The NGAS management team is well known in the oil and gas industry. At NGAS, employees are expected to serve the industry by holding positions on various national and state boards that directly impact the American oil and gas industry. Several of its employees have worked at many of the major Appalachian energy companies before serving at NGAS and its subsidiaries. The management team has a collective 80 years experience in the oil and gas industry.
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William S. Daugherty
President and Chief Executive Officer
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William S. Daugherty, age 54, has served as the President, Chief Executive Officer and member of the NGAS board of directors since September 1993, as well as its Chairman of the Board since 1995. He has also served as Chairman of the Board of DPI since 1984. Mr. Daugherty currently serves as the Governor of Kentucky’s Official Representative to the Interstate Oil and Gas Compact Commission and as a member of the Board of Directors of the Independent Petroleum Association of America. He is a past president of the Kentucky Oil and Gas Association (“KOGA”) and the Kentucky Independent Petroleum Producers Association. Mr. Daugherty holds a B.S. Degree from Berea College, Berea, Kentucky.
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William G. Barr III
Vice President
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William G. Barr III, age 59, joined Daugherty Petroleum in 1993 and now serves as Chief Executive Officer. He also serves as a Vice President of NGAS. Previously, he served as Vice President – Acquisitions and Legal Affairs of Daugherty Petroleum. He has 30 years experience in the corporate and legal sectors of the oil and gas industry. Mr. Barr currently serves as Governing Member Trustee for the Energy & Mineral Law Foundation. He also serves as President and on the Board of Directors of the Kentucky Oil and Gas Association (“KOGA”) and as Chairman of its Legislative Committee. Mr. Barr also serves as Vice Chairman of the Kentucky Gas Pipeline Authority. Mr. Barr received a Juris Doctorate from the University of Kentucky in 1975.
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D. Michael Wallen
Vice President
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D. Michael Wallen, age 54, joined Daugherty Petroleum in 1995 and now serves as its President. He also serves as a Vice President and Secretary of NGAS. Previously, he served as Vice President – Engineering of Daugherty Petroleum. For the six years before joining Daugherty Petroleum, Mr. Wallen served as Director of the Kentucky Division of Oil and Gas. He has 24 years experience as a drilling and completion engineer for various exploration and production companies. Mr. Wallen recently served as President of KOGA and currently serves on the Executive Committee and the Board of Directors. He has also served as President of the Society of Petroleum Engineers East Region and as the Governor’s Representative to the Interstate Oil & Gas Compact Commission. Mr. Wallen received a B.S. Degree in Physics from Morehead State University in 1975.
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Michael P. Windisch
Chief Financial Officer
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Michael P. Windisch, age 34, joined DPI and NGAS in September 2002 as Chief Financial Officer. Prior to that time, Mr. Windisch was employed by PricewaterhouseCoopers LLP, participating for five years in the firms’ audit practice. He is a member of the American Institute of Certified Public Accountants and holds a B.S. Degree from Miami University, Oxford, Ohio.
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Members of the Board
In addition to Mr. Daugherty, who has served on our board of directors since September 1993, we have four independent directors currently serving on the board and its committees. The business experience of our outside directors is summarized below:
James K. Klyman, age 54, has served as a member of our board of directors and various committees of the board since 1992. For the past ten years, he has worked in various executive capacities with computer software firms specializing in digital media, computer and electronic arts. Mr. Klyman received a B.A. Degree from York University, Toronto, Canada.
Thomas F. Miller, age 63, has served as a member of our board since 2004. In February 2003, he joined Rural Development and Finance Corporation, a provider of housing development and community loans in the border region of Texas and on Indian reservations in Montana, serving as Chief Operating Officer since December 2003. Prior to joining that organization, he served for two years as Senior Vice President of Low Income Investment Fund, a provider of investment capital for affordable housing and community facilities. From 1973 through 2001, Mr. Miller was engaged in various economic development, job creation and poverty reduction projects, initially with Kentucky Highlands Investment Corporation, a development venture capital group focused in Kentucky, where he served as President for ten years, followed by fifteen years of service with the Ford Foundation, both in the United States and East Africa. Before entering project finance, Mr. Miller was employed by Arthur Andersen & Co. for five years. He received his CPA certificate in 1972 and holds a B.A. Degree from Marietta College, Marietta, Ohio.
Steve U. Morgan, age 54, was appointed to our board in June 2008. He has served since 1993 as the President and CEO of First & Farmers National Bank and President of its parent company, Albany Bancorp, Inc. Mr. Morgan previously held senior management positions with several regional banks in Florida and Kentucky. He is currently the Chairman of the Clinton County Library Board and has served as a member of the Somerset Community College Advisory Board, the Board of Directors of the Clinton County Industrial Authority and other community organizations. Mr. Morgan holds a B.S. Degree in Banking from Western Kentucky University in Bowling Green, Kentucky.
Paul R. Ferretti, age 61, currently serves as a Managing Director and Head of Energy Investment Banking at Wunderlich Securities, Inc., a regional broker-dealer with 19 offices throughout the United States. His career has spanned three decades, initially as a highly regarded energy analyst and more recently as an investment banker with a focus on small to mid-cap exploration and production companies. Prior to joining Wunderlich in 2008, Mr. Ferretti spent four years with Ferris, Baker Watts, Inc., where he was Senior Vice President–Energy Investment Banking, two years as First Vice President–Institutional Sales at Maxim Group, Inc. and two years as a Managing Director at Ladenburg Thalman & Company. His equity research career started in 1973, with senior positions in energy research at firms including Wasserstein Perella & Co., ABN AMRO, Inc., Rodman & Renshaw, Inc. and Dillon, Read & Co., where he was responsible for research coverage of several oil and gas pipeline, gathering and production sectors. His career also included several years with El Paso Company, a diversified natural gas pipeline company, where he headed the public, investor and regulatory relations programs until its acquisition by Burlington Northern. Mr. Ferretti holds a B.S. Degree in Economics from Brooklyn College in Brooklyn, New York.
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Board Committees and Charters
Nominating and Corporate Governance Committee. The nominating and corporate governance committee of our board of directors is responsible for recommending nominees for election to the board by our shareholders and candidates to fill any vacancies on the board between annual meetings of shareholders. The committee is also responsible for overseeing the board’s self-evaluation process and overseeing the administration of the company’s code of ethics. Printable versions of the code of ethics and the nominating and corporate governance committee charter are provided below.
Audit Committee. The audit committee of our board of directors oversees our internal controls and financial reporting process. In addition to our code of ethics and nominating and corporate governance committee charter, our board of directors has adopted an audit committee charter that outlines the role and responsibilities of the audit committee in this process. A printable version of the audit committee charter is provided below.
Code of Ethics
This Code of Ethics (the “Code”) is adopted by the Board of Directors (the “Board”) of NGAS Resources, Inc. (the “Company”), in accordance with Rule 406 of Regulation S-K under the Securities Exchange Act of 1934 (the “Exchange Act”), to memorialize the Company’s policies and procedures for deterring wrongdoing and promoting compliance with the Exchange Act and other applicable governmental laws, rules and regulations (“Applicable Laws”).
1. Scope. The policies and procedures of the Code apply generally to all employees of the Company and in particular to its officers performing the functions of principal executive officer, principal financial officer, principal accounting officer and any other persons performing similar functions (“Principal Officers”).
2. Ethical Conduct. Each Principal Officer will continue to promote honest and ethical conduct by, among other things:
• Acting as a role model for employees under his supervision through his own honest and ethical conduct; and
• Avoiding conflicts of interest between personal and professional relationships and discouraging any potential or apparent conflicts of interest in relationships of employees under his supervision.
3. Disclosure. Each Principal Officer will promote full, fair, accurate, timely and understandable disclosure in the Company’s reports and documents filed with or submitted to the Securities and Exchange Commission (the “SEC”) and in the Company’s other public communications (collectively, “Company Disclosure Materials”) by, among other things:
• Staying familiar with the Company’s disclosure requirements under Applicable Laws and keeping up to date with its business operations and financial affairs;
• Providing appropriate input based on careful review of all Company Disclosure Materials prior to their release outside the Company;
• Supervising the preparation of the Company’s financial disclosure required in its periodic reports under the Exchange Act and providing appropriate input based on careful review and analysis of that information prior to its filing with the SEC; and
• Consulting with the Company’s legal counsel and, when appropriate, its independent auditors to ensure that all Company Disclosure Materials conform to the requirements of Applicable Laws.
4. Compliance. Each Principal Officer will promote the Company’s compliance with Applicable Laws by, among other things:
• Staying familiar with Applicable Laws;
• Consulting with the Company’s legal counsel to ensure that all Company operations and practices conform to the requirements of Applicable Laws; and
• Providing guidance and training to employees under his supervision to promote their understanding of Applicable Laws.
5. Internal Reporting. Each Principal Officer will promote appropriate internal reporting procedures in accordance with this Code by, among other things:
• Promptly advising the Company’s Chief Executive Officer or Chairman of Audit Committee of the Board (each, a “Compliance Officer”) of any perceived or reported violation or potential violation of the Code;
• Encouraging employees under his supervision to report any violation of this Code to him; and
• Ensuring anonymity of employees who report any violation of this Code and preventing retaliation against any employee for doing so in good faith.
6. Accountability. Each Principal Officer will promote accountability for adherence to this Code by, among other things:
• Ensuring that copies of this Code are distributed at least annually to employees under his supervision;
• Encouraging employees under his supervision to seek his guidance on any questions about Code compliance;
• Supporting appropriate procedures, with due process considerations deemed appropriate, by (a) the two Compliance Officers, acting together, for evaluating a potential Code violation by an employee other than a Principal Officer and (b) the Board for evaluating a potential Code violation by a Principal Officer; and
• Supporting appropriate sanctions for Code violations.
7. Sanctions. If a Compliance Officer determines that a Principal Officer may have violated a provision of this Code, the violation shall be reported to the Board. If the Board determines that a violation has occurred by a Principal Officer, or if the Compliance Officers determine that a violation has occurred by an employee other than a Principal Officer, they will impose sanctions deemed appropriate in their best judgment.
8. Certification. At least annually and whenever requested by a Compliance Officer, each Principal Officer will certify in writing whether he has complied in all material respects with the provisions of this Code and whether all other Principal Officers have done so to the best of his knowledge.
9. Waiver. If any material departure from the provisions of this Code is approved or condoned, the Company will disclose the event in a current report on Form 8-K within five days after its occurrence.
10. Amendment. Any amendment to this Code must be approved by the Board and disclosed in a current report on Form 8-K filed by the Company within five days after its approval.
11. Interpretation. All questions about the interpretation of this Code shall be referred to and conclusively determined by the two Compliance Officers, acting together.
Nominating and Corporate Governance Committee Charter
Purpose
The Board of Directors (the “Board”) of NGAS Resources, Inc. (the “Company”) has established a Nominating and Corporate Governance Committee (the “Committee”) to identify individuals qualified to become Board members, recommend to the Board candidates to be nominated for election at the each annual general meeting of shareholders and develop and administer related corporate governance guidelines.
Composition
The Committee will be comprised of two or more directors, as determined by the Board. Committee members, including the Chairman of the Committee, must meet the independence requirements of the Nasdaq Stock Market, Inc. (“Nasdaq”), as defined under Nasdaq rules. Members of the Committee will be appointed by the Board on an annual basis and may be removed by the Board.
Meetings
The Committee will meet at the times and places or by the communications means determined by its members and shall report regularly to the Board about its meetings. A majority of the members of the Committee will constitute a quorum for its meetings.
Responsibilities
Nominating. The Committee will screen, evaluate, identify and recommend to the Board qualified nominees to be submitted to the Company’s shareholders for election as directors at each annual general meeting, including any director candidates recommended on a timely basis by shareholders of the Company. The Committee will also recommend to the Board the appointment of individuals to fill any vacancies occurring on the Board between annual general meetings of shareholders. The qualifications to be considered by the Committee in assessing director candidates include the following:
(a) An understanding of business and financial affairs and the complexities of managing a publicly held business organization, as reflected in a proven record of competence and accomplishments in business, education or the professions;
(b) A reputation for honesty and integrity;
(c) A willingness to maintain a committed relationship with the Company as a director and a genuine interest in representing its shareholders overall;
(d) A desire and ability to spend the time required to function effectively as a director; and
(e) A resolve to independently analyze matters presented for consideration in a fair and open-minded manner and in the best interests of the Company’s shareholders.
Corporate Governance. The Committee will administer and periodically review with the Board an evaluation of the processes and performance of the Board and its members to identify areas where the effectiveness of the Board and its committees may be refined or improved. This will include a review of the manner and process by which major matters are brought to the Board for evaluation and authorization. The Committee will also oversee administration of the Company’s code of ethics and maintain procedures for the receipt, administration and resolution of any complaints received by the Company on matters addressed by the code of ethics or on director nominations or other corporate governance matters.
Authority to Engage Advisers
The Committee is authorized to engage independent advisers it deems necessary to assist its members in performing the duties assigned to the Committee under this Charter.
Audit Committee Charter
The Audit Committee (the “Committee”), of the Board of Directors (the “Board”) of NGAS Resources, Inc. (the “Company”), has reviewed and assessed the adequacy of its formal written charter (the “Audit Committee Charter”) with a view to ensuring its compliance with applicable Marketplace Rules of the Nasdaq Stock Market, Inc. (“Marketplace Rules”) and regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In accordance therewith, the Audit Committee Charter has been amended and restated, effective January 15, 2004, as set forth below.
Composition
The Committee will be comprised of two or more directors, each of whom (i) is independent, as defined under Marketplace Rule 4200(a)(15), (ii) meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act, (iii) has not participated in the preparation of the financial statements of the Company or any subsidiary at any time during the past three years and (iv) is able to read and understand fundamental financial statements, as required by Marketplace Rule 4350(d)(2). In addition, by July 31, 2005 or such earlier date as the Company ceases to be a small business reporting company under the Exchange Act, the Committee will be comprised of three or more members of the Board, each of whom meets the foregoing criteria and at least one of whom has past employment experience in finance or accounting, or any other comparable experience or background that results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior official with financial oversight responsibilities. The members of the Committee will be elected annually at the organizational meeting of the Board and will appoint one of its members to serve as Chairman of the Committee.
Responsibilities Relating to Auditors
In its capacity as a committee of the Board, the Committee is responsible for (i) the appointment and retention of the firm of independent registered or chartered public accountants (the “Auditors”) engaged for the purpose of auditing the Company’s annual financial statements and issuing an audit report thereon, for reviewing the Company’s quarterly financial statements and, unless the Company ceases to be a small business reporting company under the Exchange Act, issuing a review report thereon and for performing related audit, review or attest services for the Company (“Audit Services”) and any necessary tax compliance and tax planning or related services (“Tax Services”), (ii) review and evaluation of the written disclosures from the Auditors required by Independence Standards Board Standard No. 1, which will include discussions with the Auditors on the matters required to be covered under that Standard and by the Statement of Auditing Standards No. 61, (iii) approval of the Company’s compensation arrangements with the Auditors for Audit Services and Tax Services, (iv) oversight of the work performed by the Auditors in connection with the Audit Services and (v) review and resolution of any disagreements between management and the Auditors on financial reporting matters.
Responsibilities Relating to Internal Controls and Procedures
In its capacity as a committee of the Board, the Committee is responsible for (i) monitoring the Company’s internal controls and financial reporting process, (ii) assessing whether the internal controls over financial reporting provide reasonable assurances on the reliability of the Company’s financial reporting and the preparation of its financial statements for external purposes in accordance with generally accepted accounting principles and (iii) prior to the filing of the Company’s annual report under the Exchange Act with the Securities and Exchange Commission (the “SEC”), based on the Committee’s review and discussions with management and representatives of the Auditors about the financial statements and the underlying internal controls and financial reporting process, making a recommendation to the Board whether the audited financial statements in the form presented to the Committee should be included in the report for filing with the SEC.
Procedures for Resolving Complaints
The Committee will establish and maintain procedures for (i) the receipt, retention and treatment of any complaints received by the Company on accounting, internal accounting controls or auditing matters and (ii) the confidential, anonymous submission by employees of the Company of any concerns about questionable accounting or auditing matters, with due regard for preventing retaliation against any employee for doing so in good faith.
Authority to Engage Advisers
The Committee is authorized to engage independent counsel and any other advisers it deems necessary in performing its duties under this Audit Committee Charter.
Funding
The Company will provide appropriate funding, as determined by the Committee, in its capacity as a committee of the Board, for payment of (i) professional fees to the Auditors for Audit Services and Tax Services, (ii) professional fees to any advisers engaged by the Committee and (iii) ordinary administrative expenses of the Committee that are necessary or appropriate for carrying out its duties under this Audit Committee Charter.
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