Document:

EX-10.55

 

Exhibit 10.55

TORVEC, INC.

Minutes of a Meeting

Governance and Compensation Committee

Held on February 19, 2008

          The meeting was called to order by Gary A. Siconolfi, chairman. In attendance, either in
person or via telephone as permitted by the company’s Bylaws, were Committee members Daniel Bickel
and Joseph Rizzo.

COMMERCIALIZING EVENT PLAN

          Mr. Siconolfi stated that the first order of business was for the Committee to consider and
vote upon amendments suggested by management to made to the company’s Commercializing Event Plan.
The suggested amendments—

a) clarify that for purposes of the “good standing” requirement of the
Plan, all participants are considered to be in good standing unless a
unanimous vote of the board of directors determines otherwise and to
provide that in making this determination, the board shall interpret
good standing to mean that a participant is, at the time payment under
Plan is due, actively engaged as a consultant to Torvec and has not been
engaged in deliberate and/or conduct so negligent that Torvec, its
technologies, its business operations, its financial condition and/or its
reputation is significantly harmed. In making such determination, the
board shall consider material violations of the company’s Code of
Conduct, as in effect from time to time, to constitute prima facie evidence
that the company has been significantly harmed;

b) provide that participants shall be entitled to payment in accordance
with the terms of the Plan even though, at the time payment would
otherwise be made, the participant is not actively engaged as a consultant

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to Torvec if the cause of such nonengagement is due to death, disability
from accident, disease or similar circumstance beyond the participant’s
control (referred to as “Acts of God”) or on a leave of absence approved
by an authorized officer of the company;

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

d) clarify that the benefits provided by the Plan from time to time
may not be reduced during its term as to amount, time, method, manner
of payment and/or any other material condition with respect to any
and all participants as of February 19, 2008;

e) clarify that distributions under the Plan shall be made on a
“commercializing event by commercializing event” basis and shall
be made in shares of the company’s business consultants’ stock;

f) clarify and refine the formula used to calculate benefits under the
Plan so that, as amended, the formula shall provide that in the case of
any commercializing event not involving the acquisition of the company
and/or substantially all its assets [ that is, commercializing event
transactions generating gross revenues to Torvec without a change
of ownership], for each $1,000,000 or proportionate amount of gross
revenues generated, each participant shall be entitled to receive—

— 2,222 common shares in the case of directors and administrators;

— 1,667 common shares in the case of engineers;

but that, in the case of a commercializing event which involves the
acquisition of substantially all of the company’s technologies in an
asset transaction or an acquisition which involves the acquisition of
substantially all of Torvec’s issued and outstanding equity, the number
of common shares to which each participant shall be entitled and/or
credited to his account as of the closing date shall calculated based
upon the trading price of the acquiring company’s stock on the

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trading date immediately preceding the date of the announcement
of the transaction.

Example: Assume xyz corporation acquired 100% of
the issued and outstanding shares of Torvec on a fully-diluted basis
[approximately 40,000,000 common shares] for 40,000,000 common
shares of xyz corporation valued at $100 per share. The
aggregate consideration, expressed in dollars, is $4,000,000,000. Under
the formula, the directors-administrators commission is $240,000,000
[$4,000,000,000 x .06]. The engineers commission is $80,000,000
[$4,000,000,000 x .02].

Under the formula, each director-administrator is entitled to receive
$26,666,667[$240,000,000 divided by 9] and each engineer is entitled
to receive $20,000,000 [$80,000,000 divided by 4].

The conversion factor for converting dollars into Torvec common as
of the date of closing [ for calculating the number of xyz shares each
participant is entitled to receive upon closing] is the trading
price of xyz corporation on the trading date immediately preceding
the date of the announcement of the transaction.

Assume such average trading price is $100. Based upon the formula,
each director-administrator is entitled to receive 266,667 common
shares and each engineer is entitled to receive 200,000 common shares.

g) clarify that, for purposes of calculating the benefits payable to
all participants as of February 19, 2008 only, the denominator of the
fraction utilized to establish each such participant’s pro rata share of the
“commission” payable upon the happening of any commercializing
event shall be nine(9) in the case of the director-administrator
group and shall be four (4) in the case of the engineer group.

          After discussion concerning and due consideration given to the above suggested amendments,
upon motion duly made and seconded, it was:

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RESOLVED, that the amendments set forth in these minutes
to Torvec’s Commercializing Event Plan be and they hereby
are approved and that this Committee hereby agrees to make a
unanimous recommendation to the company’s board of directors
that such amendments be adopted, effective February 19, 2008.

          Mr. Siconolfi then explained that, as of February 19, 2008, the
following persons were included in the “director-administrator” group: Daniel R. Bickel, Herbert H.
Dobbs, David M. Flaum, James Y. Gleasman, Keith E. Gleasman, Joseph B. Rizzo, Gary A. Siconolfi,
Andrew K. Gleasman and Richard B. Sullivan. He also explained that, as of February 19, 2008, the
following persons constituted the “engineers” group: Lawrence Clark, Joseph McMahon, Matthew
Sullivan and Steven Urbanik.

          He noted that Donald Gabel and Floyd Cady had elected not to participate in the company’s
Commercializing Event Plan but had elected to “keep” the options they had been granted earlier.
Since such options had been, in effect, cancelled as of October 10, 2007, it is necessary to grant
new options to such individuals as “replacement” options for their previously cancelled options.
The company had granted Don Gabel an option to acquire 60,000 common shares on October 1, 2005
exercisable at $5.00 per share
and an option to acquire 50,000 common shares exercisable until 12/1/2016 at $5.00 per share. The
company had granted Floyd Cady options for 35,000 and 50,000 common shares respectively on the same
dates and under the same terms and conditions.

          Mr. Siconolfi further noted that management has suggested that new options should be granted
to Messrs. Gabel and Cady in the same amounts, the same exercise price and the same terms as had
been previously granted. After discussion concerning and due consideration given to management’s
suggestion, upon motion duly made and seconded, it was:

RESOLVED, that Donald Gabel is hereby granted a stock
option for an aggregate 110,000 common shares, exercisable
at $5.00 per share and that Floyd Cady is hereby granted
a stock option for an aggregate 85,000 common shares, exercisable
at $5.00 per share; and

BE IT FURTHER RESOLVED, that the term of each option granted
to Gabel and Cady shall commence on February 19, 2008 and shall
extend until December 1, 2016;

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BE IT FURTHER RESOLVED, that this Committee hereby
agrees to make a unanimous recommendation to the company’s
board of directors reflecting the above-referenced resolutions.

CONSULTANTS’ FEES

          Mr. Siconolfi next indicated that management had made certain suggestions with respect to
executive and related-party compensation requiring Governance Committee approval. Specifically,
management has suggested that, effective January 1, 2008, Andrew Gleasman’s consultant fee be
increased from $1,800 per week to $1,950 per week and that Matthew Sullivan’s consultant fee be
increased from $1,640 per week to $1,790 per week. Management’s suggestion is based upon, in part,
its decision to
increase all consultants’ fees beginning in 2008 and, in part, the significantly increased
responsibilities management has requested Messrs. Gleasman and Sullivan assume for the 2008 year,
including but not limited to, in the case of Andrew Gleasman, representing the company in
discussions with Lockheed Martin, Ford, General Motors and NASA and, in the case of Matthew
Sullivan, assuming the role of “ombudsman” with respect to the
actual production-ready status of the company’s FTV, IVT, IsoTorque differential and
constant velocity joint technologies for design-specific applications.

          After discussion concerning and due consideration given to management’s suggestions, upon
motion duly made and seconded, it was:

RESOLVED, that management’s suggestions with respect
to consultant fee increases for Andrew Gleasman and
Matthew Sullivan be and they hereby are approved based,
in part, upon management’s representations concerning these
individual’s increased responsibilities in the year 2008 and
this Committee hereby agrees to make a unanimous
recommendation to the company’s board of directors reflecting
the contents of this resolution.

          Mr. Siconolfi next indicated that management had suggested that Richard Sullivan’s consultant
fee as general counsel be increased from $144,000 to

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$175,000 per year, commencing January 1, 2008. This suggestion is based upon the fact that Mr.
Sullivan has not received an increase in such fee since his appointment to such position in
December, 2005 and that Mr. Sullivan’s duties had significantly expanded as the result of the
increased application of the Sarbanes-Oxley Act to the company’s operations, the ongoing litigation
affecting the company and its officers and directors and an significant increase in nonlegal
services rendered by Mr. Sullivan.

          After discussion concerning and due consideration given to management’s suggestions, upon
motion duly made and seconded, it was:

RESOLVED, that management’s suggestion with respect to a
fee increase for Richard Sullivan be and it hereby is approved
based, in part, upon management’s representations concerning Mr.
Sullivan’s increased responsibilities and additional services
rendered and this Committee hereby agrees to make a unanimous
recommendation to the company’s board of directors reflecting
the contents of this resolution.

          Mr. Siconolfi then asked the Committee to recall that, commencing January 1, 2004, James,
Keith and Vernon Gleasman had elected to continue to perform
consulting services for the company and continue to assign all patents, improvements and know-how
with respect to the company’s automotive technologies to the company without payment of consulting
fees. This election has now continued for four years, during which the Gleasmans have had to access
personal monies and property to pay ordinary living expenses. Management has suggested that,
effective January 1, 2008, each of James and Keith Gleasman be compensated at the rate of $300,000
per year. Management has also suggested that such yearly consulting fees be payable in cash and
that no payment of all
or any portion of such consulting fees be paid unless and until the company shall have the
requisite cash available for payment of all or a portion of such yearly fees to both Gleasmans on a
pro rata basis. The determination of the availability of cash for such payments(s) shall be made by
the board of directors in the light of approved-budgets, existing and anticipated capital
requirements and existing and estimated cash flows, all determined in accordance with generally
accepted accounting principles consistently applied, as such principles are interpreted by rules
and regulations promulgated from time to time by the Public Company Accounting Oversight Board.

          Since, under its proposal, Messrs. Gleasman would not be paid unless and until sufficient cash
is available to do so, management has requested that the Committee’s approval explicitly provide
for the accumulation of unpaid amounts from one year to the next on a carryforward basis.

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          The factors considered in making this recommendation are:

	 	(i)	 	the fact that the Gleasmans have not been paid any consulting
fees for the period January 1, 2004 to December 31, 2007, a
period of four years;
	 
	 	(ii)	 	the fact that for the year ended December 31, 2002, the
Gleasmans consulting fees were not paid but converted
into options to purchase the company’s stock exercisable
at $5.00 per share and that such options have now expired;
	 
	 	(iii)	 	the fact that for the year ended December 31, 2003, the
Gleasmans consulting fees were not paid but converted
into options to purchase the company’s stock exercisable
at $5.00 per share which expire in December, 2013;
	 
	 	(iv)	 	the fact that such recommended payment is not merely
for services rendered by them as executive officers of the
company but also for their agreement to convey all patents,
improvements and know-how with respect to the company’s
automotive technologies to the company on an ongoing basis;
	 
	 	(v)	 	a review of compensation arrangements of executive officers
of comparable public companies located in the greater
Rochester metropolitan area, taking into account that most
of these arrangements include change in control payments,
disability and retirement benefits and severance packages
not available to the Gleasmans;
	 
	 	(vi)	 	the fact that payment of any significant portion of such fees
will of necessity require significant commercialization of the
company’s products for the benefit of all of the company’s
shareholders.

          After discussion concerning and due consideration given to management’s suggestion, upon
motion duly made and seconded, it was:

RESOLVED, that management’s suggestion with respect
to the payment of consulting fees to James and Keith Gleasman,
including the provision for the accumulation of unpaid amounts,
as set forth herein be and the same is hereby approved and this

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Committee hereby agrees to make a unanimous recommendation
to the company’s board of directors reflecting the contents of
this resolution.

          Mr. Siconolfi then stated that in making the recommendations to the company’s board of
directors as set forth in each of the above resolutions, the Committee had considered the impact of
such transactions upon the independence of the
company’s directors and had determined that the approval of such transactions would not adversely
affect such independence.

          Mr. Siconolfi also noted that the implementation of the
recommendations as set forth above would constitute “related party transactions” and that,
consequently, the Committee had reviewed such implementation and had concluded that neither the
recommendations nor their implementation would violate the company’s Code of Conduct, Financial
Integrity and Compliance Program and/or its Statement of Corporate Governance Principles.

          There being no further business, the meeting was adjourned.

	 	 	 	 	 
	 	 	 
	 	/s/
Gary A. Siconolfi
 	 
	 	Gary A. Siconolfi, Chairman 	 
	 	 	 
	 

96Exhibit 4.1

Exhibit 4.1

	Number  	  	Shares  
	DONG FANG MINERALS, INC. 
	INCORPORATED UNDER THE LAWS OF THE STATE OF 
	NEVADA 100,000,000 SHARES COMMON STOCK AUTHORIZED, 
	PAR VALUE $0.00001 
	  
	  	  	CUSIP  _______
	  	  	SEE REVERSE  
	  	  	FOR  
	This  	  	CERTAIN  
	certifies  	  	DEFINITIONS  
	that  	  	  
	is the owner of  	  	  
	  
	  
	FULLY PAID AND NON-ASSESSABLE 
	SHARES OF COMMON STOCK OF 
	  
	  
	DONG FANG MINERALS, INC. 
	transferable on the books of the corporation in person or by duly 
	authorized attorney upon surrender of this certificate properly 
	endorsed. This certificate and the shares represented hereby 
	are subject to the laws of the State of Nevada, and to the 
	Articles of Incorporation and Bylaws of the Corporation, 
	as now or hereafter amended. This certificate is not valid 
	unless countersigned by the Transfer Agent. WITNESS 
	the facsimile seal of the Corporation and the signature 
	of its duly authorized officers 
	  
	  
	  
	  
	PRESIDENT  	[SEAL]  	SECRETARY  

 

 

     The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations.

	TEN COM  	as tenants in common  	UNIF GIFT MIN ACT   ________________	Custodian  ________________
	TEN ENT  	as tenants by the entireties  	                                             (Cust)  	                      (Minor)  
	JT TEN  	as joint tenants with the right of  	                       Act      ________________________________  
	  	survivorship and not as tenants  	             (State)  
	  	in common  	  	  

Additional abbreviations may also be used though not in the above list.

For value received, ______________________________________hereby sell, assign and transfer unto

                                         PLEASE INSERT SOCIAL SECURITY OR OTHER 

                                                              IDENTIFYING NUMBER OF ASSIGNEE

__________________________________________________________________________________________________________________

                (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)

__________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________

_____________________________________________________________________________ shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

_____________________________________________________________________________, Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.

Dated _______________________

X ________________________________________________________________________________

THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions)

 

SIGNATURE GUARANTEED:

 

 

TRANSFER FEE WILL APPLY

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