futuredef14a.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934
Filed by
the
Registrant √
Filed by a Party other than the
Registrant
Check the
appropriate box:
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Preliminary
proxy statement.
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Confidential,
for use of the Commission only (as permitted by
Rule 14a-6(e)(2)).
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√
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Definitive
Proxy Statement.
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Definitive
Additional Materials.
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Soliciting
Material Pursuant to
§240.14a-12.
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FUTUREFUEL
CORP.
(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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No
fee required. |
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11. |
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(1) |
Title
of each class of securities to which transaction
applies:
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(2) |
Aggregate
number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) |
Proposed
maximum aggregate value of transaction:
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(5) |
Total
fee
paid:
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Fee
paid previously with preliminary materials. |
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
number, or the form or schedule and the date of its filing. |
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(1) |
Amount
Previously Paid:
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Form,
Schedule or Registration Statement No.:
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Filing
Party:
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(4) |
Date
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8235
Forsyth Blvd. - 4th
Floor
Clayton,
Missouri 63105
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON JUNE 30, 2009
and
NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIALS
May 29,
2009
TO
THE SHAREHOLDERS OF FUTUREFUEL CORP.
Notice is hereby given that the annual
meeting of shareholders of FutureFuel Corp. (the “Company”)
will be held on Tuesday, June 30, 2009 at 8235 Forsyth, 4th Floor,
Clayton, Missouri 63105 at 10:00 a.m. local time, for the following
purposes:
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(1)
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to
elect three directors: Paul A. Novelly, Paul G. Lorenzini and Richard L.
Knowlton;
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(2)
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to
ratify the appointment of RubinBrown LLP as the Company’s independent
auditor for the year ending December 31, 2009;
and
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(3)
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to
transact such other business as may properly come before the
meeting.
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The record date for the determination
of holders of the Company’s common stock entitled to notice of and to vote at
the annual meeting of shareholders is May 22, 2009. Only
shareholders of record at the close of business on the record date will be
entitled to vote at the annual meeting or any adjournment thereof. It
is important that your shares be represented at this meeting to help ensure the
presence of a quorum.
Warrant holders are not entitled to
vote for or against any of the matters to be voted upon at this meeting of
shareholders.
By Order of the Board
of Directors,
Douglas D. Hommert, Corporate
Secretary
PLEASE
SIGN AND RETURN THE APPLICABLE ENCLOSED PROXY CARD(S) AS PROMPTLY AS POSSIBLE,
WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT. YOU MAY WITHDRAW YOUR
PROXY AT ANY TIME PRIOR TO THE MEETING, OR AT THE MEETING.
IMPORTANT
NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON JUNE 30, 2009
This
notice, the proxy statement attached to this notice and our annual report to
shareholders for the year
ended
December 31, 2008 are available free of charge on the “Investor Relations”
page of our website at
http://ir.futurefuelcorporation.com/sec.cfm.
8235
FORSYTH BLVD., 4TH
FLOOR
CLAYTON,
MISSOURI 63105
PROXY
STATEMENT
This
Proxy Statement contains information relating to the 2009 Annual Meeting of
Shareholders of FutureFuel Corp. (the “Company”,
“we”,
“us”
or “our”). Through
this mailing, our board of directors (the “Board”) is
soliciting proxies for the Annual Meeting. Our Annual Report for the
year ended December 31, 2008 is also enclosed with this Proxy Statement, as
are proxy cards. These documents provide important information about
our business, including audited financial statements, and are first being mailed
to shareholders on or about May 29, 2009.
Date,
Time and Place of the Annual Meeting.
The
Annual Meeting will be held at 8235 Forsyth Blvd., 4th Floor,
Clayton, Missouri 63105 on Tuesday, the 30th day of
June, 2009 at 10:00 a.m., local time, subject to adjournments or
postponements.
We
encourage you to vote your shares and warrants by proxy even if you plan to
attend the Annual Meeting. If you do attend the Annual Meeting, you
will be asked to present valid photo identification, such as a driver’s license
or passport. If you hold your stock in an account at a brokerage firm
or bank (in nominee name), you will need to bring a copy of an account statement
reflecting such ownership on or after the May 22, 2009 record date for the
meeting.
Proposals
to be Voted Upon.
At the
Annual Meeting, the following proposals (as described in greater detail below)
will be voted upon by our shareholders:
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·
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The
election of Paul A. Novelly, Paul G. Lorenzini and Richard L. Knowlton as
Class C directors of the Company for a term expiring at the 2012
Annual Meeting of shareholders; and
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·
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The
ratification of the appointment of RubinBrown LLP as our independent
auditor for the year ending December 31,
2009.
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Our Board
recommends that you vote to approve these proposals.
Voting
at the Annual Meeting.
Proxies
and Voting.
Shares of
our common stock represented by properly executed proxies will, unless the
proxies have been properly revoked, be voted in accordance with the instructions
indicated on the proxies or, if no instructions are indicated, will be voted FOR
the resolutions to: (i) elect Paul A. Novelly, Paul G. Lorenzini and
Richard L. Knowlton as Class C directors of the Company; and
(ii) approve the appointment of RubinBrown LLP as our independent auditor
for 2009. You can vote for approval of a particular resolution by
marking the shareholder proxy card enclosed herewith with an “X” in the box
under “FOR” for such resolution. If you do not wish to vote “FOR” the
election of Paul A. Novelly, Paul G. Lorenzini and/or Richard L. Knowlton, you
can mark the shareholder proxy card with an “X” in the box under “WITHHOLD” for
Item 1 on the card next to their respective names, and you can vote against
approval of any of the other proposals by marking the shareholder proxy card
with an “X” in the box under “AGAINST” for such proposal. Abstentions
(other than with respect to the election of directors) may be specified with
respect to any of the resolutions by properly marking with an “X” in the box
under “ABSTAIN” on the shareholder proxy card, and will be counted as present
for the purpose of determining the existence of a shareholder
quorum.
If you
own shares in “street name” in an account at a bank or brokerage firm, we
generally cannot mail our proxy materials directly to you. You may
instead receive a voting instruction form with this Proxy Statement that you
should use to instruct how your shares are to be voted, and you should also vote
your shares by completing, signing and returning the voting instruction form in
the envelope provided. Many brokerage firms have arranged for
internet or telephonic voting of shares and provide instructions for using those
services on the voting instruction form. If your shares are held by a
brokerage firm, the brokerage firm may under certain circumstances vote your
shares. Such entities may have authority to vote their customers’
shares on certain routine matters, including the election of
directors. When a firm votes its customers’ shares on routine
matters, those shares are also counted for the purpose of establishing a quorum
to conduct business at the meeting. A brokerage firm cannot vote its
customers’ shares on non-routine matters without instructions from the
customers. Accordingly, those shares are not counted as votes against
a non-routine matter, but rather are not counted at all for such a
matter.
Record
Date; Quorum.
Our Board
has fixed the close of business on May 22, 2009 as the record date for the
determination of our shareholders entitled to receive notice of, and to vote at,
the Annual Meeting. Accordingly, only holders of record of shares of
our common stock at the close of business on the record date are entitled to
notice of the Annual Meeting and to attend and vote at the Annual
Meeting. On the record date, 28,190,300 shares of our common stock
were outstanding with approximately 417 record holders thereof. Each
share of our common stock issued and outstanding on the record date is entitled
to one vote on any proposal at the Annual Meeting.
The
presence, in person or by proxy, of shareholders owning shares of our common
stock representing a majority of the votes entitled to be cast by shareholders
at the Annual Meeting will constitute a quorum for the transaction of business
at the Annual Meeting for which shareholders have the right to
vote. Shareholders who deliver valid proxies or vote in person at the
Annual Meeting will be considered part of the respective
quorums. Once a share is represented for any purpose at the Annual
Meeting, it is deemed present for quorum purposes for the remainder of the
Annual Meeting and for any adjourned meeting. We will count
abstentions as present and entitled to vote for purposes of determining the
applicable quorum.
Classes
of Voting Stock.
We only
have one class of voting stock outstanding, and that is our common
stock. There currently are outstanding 28,190,300 shares of our
common stock. Each share of common stock is entitled to one vote on
each proposal. We also have outstanding 21,317,500 warrants entitling
the holders thereof to acquire, in the aggregate, one share of our common
stock. Our warrants do not carry voting rights for purposes of this
Annual Meeting.
Required
Vote.
In
accordance with Delaware law and our bylaws, our directors will be elected at
the Annual Meeting by a plurality of the votes cast by
shareholders. “Plurality” means that the nominees receiving the
largest number of votes cast are elected as directors up to the maximum number
of directors to be elected at the meeting. Any other matter on which
shareholders vote at the Annual Meeting will be determined by the affirmative
vote of a majority of the votes cast.
If any
other matters are properly presented for consideration at the Annual Meeting,
the persons named as attorneys-in-fact on the enclosed shareholder proxy card
and acting thereunder will have discretion to vote on those matters according to
their best judgment to the same extent as the person delivering the proxy would
be entitled to vote.
Revocability
of Proxy.
Execution
and return of a proxy card will not in any way affect a shareholder’s right to
attend and to vote in person at the Annual Meeting. Any proxy may be
revoked by the shareholder giving it, at any time prior to its being voted, by:
(i) filing a notice of revocation with our corporate secretary, Douglas D.
Hommert, at 8235 Forsyth Blvd., 4th Floor,
Clayton, Missouri 63105; (ii) executing and delivering a duly executed
proxy bearing a later date; or (iii) attending the Annual Meeting and
voting in person. A notice of revocation need not be on any specific
form. Attendance at the Annual Meeting will not by itself constitute
revocation of a proxy.
Dissenters Rights of Appraisal.
There are
no rights of appraisal or similar rights of dissenters with respect to any
matter to be acted upon at the Annual Meeting.
Persons
Making the Solicitation.
The
solicitation in this Proxy Statement is being made by us. We will
solicit proxies by mail or by telephone, and our directors, officers and
employees also may solicit proxies, without additional compensation, on our
behalf. We will not be using any specially engaged employees or paid
solicitors. All expenses incurred in this solicitation will be paid
by us. Banks, brokerage houses and other institutions, nominees and
fiduciaries will be requested to forward the proxy materials to beneficial
owners and to obtain authorization for the execution of proxies.
None of
our directors has informed us in writing that he intends to oppose any action
intended to be taken by us at the Annual Meeting.
Interest
of Certain Persons in Matters to be Acted Upon.
None of
our directors, executive officers, the nominees for director or any of their
associates has any substantial interest, direct or indirect, by security
holdings or otherwise, in any matter to be acted upon at the Annual
Meeting.
PROPOSAL ONE - ELECTION OF
DIRECTORS
Our Board
has nominated three persons for election to the Board at the Annual Meeting:
Paul A. Novelly, Paul G. Lorenzini and Richard L. Knowlton, each as a
Class C director. Under our certificate of incorporation, our
directors are divided into three classes, which serve for staggered three-year
terms. Mr. Novelly was originally elected as a Class C director
on August 19, 2005, and both Paul G. Lorenzini and Richard L. Knowlton were
originally elected as a Class C director on January 24,
2007. Each of these nominees has agreed, if elected, to serve as a
Class C member of the Board and, if elected at the Annual Meeting, will
serve for a three-year term expiring in 2012.
The
persons named as attorneys-in-fact in the accompanying shareholder proxy card
are expected to vote to elect the nominees listed above as director, unless
authority to so vote is withheld. Although the Board expects that the
nominees will be available for election, in the event a vacancy in the slate of
nominees occurs, it is intended that shares of our common stock represented by
proxies will be voted for the election of a substitute nominee selected by the
persons named as attorneys-in-fact in the accompanying shareholder proxy
card. Holders of our common stock do not have cumulative voting
rights in the election of directors.
The name
of the nominees for election and the other continuing members of our Board, and
certain other information with respect to such persons are set forth
below.
Nominee
For Election as a Class C Director
For
the Three-Year Term Expiring in 2012
Name,
Age and Positions with the Company
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Director
of
the
Company
Since
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Paul
A. Novelly, 65. Mr. Novelly has been our chairman of the board
since our incorporation in August 2005.
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2005
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Paul
G. Lorenzini, 69. Mr. Lorenzini has been a member of
our Board since January 2007. On April 21, 2008, he became
our chief operating officer.
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2007
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Richard
L. Knowlton, 76. Mr. Knowlton s been a member of our Board
since January 2007
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2007
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Continuing
Directors
Name,
Age and Positions with the Company
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Class
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Term
Expiring
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Director
of
the
Company
Since
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Lee
E. Mikles, 53. Mr. Mikles has been our chief executive officer
and a member of our Board since inception. In addition, he
served as our principal financial officer before our acquisition of
FutureFuel Chemical Company and thereafter through January 31,
2008.
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B
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2011
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2005
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Edwin
A. Levy, 72. Mr. Levy has been a member of our Board since
November 2005.
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A
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2010
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2005
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Thomas
R. Evans, 54. Mr. Evans has been a member of our Board since
May 2006.
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B
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2011
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2006
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Donald
C. Bedell, 68. Mr. Bedell has been a member of our Board since
March 17, 2008.
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A
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2010
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2008
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THE
BOARD RECOMMENDS THAT SHAREHOLDERS VOTE
“FOR”
THE NOMINEES NAMED ABOVE.
PROPOSAL TWO - RATIFICATION
OF INDEPENDENT PUBLIC ACCOUNTANT
RubinBrown
LLP was our independent auditors for the fiscal years ending December 31,
2007 and 2008. On April 28, 2009, the audit committee of our
Board took action to approve the retention of the accounting firm of RubinBrown
LLP as the independent auditor for us for the fiscal year ending
December 31, 2009. The Board subsequently approved the actions
of the audit committee but made the decision to seek shareholder ratification of
the appointment of RubinBrown LLP as our independent auditor for the year ended
December 31, 2009. A representative from the firm is expected to
be present at the Annual Meeting and will have an opportunity to respond to
shareholder questions.
Fees
to Auditors.
The
following table shows the aggregate fees billed to us by RubinBrown LLP for
professional services attributable to 2008 and 2007.
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2008
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2007
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Audit
Fees
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$ |
307,000 |
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$ |
- |
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Audit-Related
Fees
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12,000 |
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- |
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Tax
Fees
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15,100 |
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2,500 |
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All
Other Fees
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- |
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10,730 |
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Total
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$ |
334,100 |
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$ |
13,230 |
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Tax
Fees.
During
fiscal 2008 and 2007, we incurred fees of $15,100 and $2,500, respectively, for
tax compliance, tax advice and tax planning services from RubinBrown
LLP.
All
Other Fees.
We
incurred $10,730 in fees from RubinBrown LLP during fiscal 2007 related to the
settlement of final working capital amounts stemming from our acquisition of
Eastman SE, Inc. We did not incur any other fees to RubinBrown LLP
during 2008 except the audit fees and audit-related fees disclosed
above.
Approval
Policies and Procedures.
The audit
committee of our Board engages the independent public accountants and defines
the scope of their services on an annual basis. Any proposed changes
to the services established by the audit committee through the engagement
process will be reviewed with the audit committee in advance of the services
being rendered to ensure that the accounting firm’s independence is
maintained. All audit related services and other services for 2008
and 2007 were approved by the audit committee through the engagement process,
and the audit committee has concluded that the services provided by RubinBrown
LLP during 2008 and 2007 were compatible with the maintenance of that firm’s
independence in the conduct of its auditing functions. The audit
committee’s charter provides for approval of audit and audit-related
services.
Auditor
Independence.
The audit
committee is required to consider the independence of RubinBrown LLP when
engaging the firm to perform audit-related and other services. It was
determined by the audit committee that audit-related and other services provided
and the fees paid for those services for 2008 and 2007 were compatible with
maintaining the independence of RubinBrown LLP.
Failure
to Ratify the Selection of RubinBrown LLP.
If our
shareholders do not ratify the appointment of RubinBrown LLP, our Board will
consider the selection of other auditors.
THE
BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR”
THE
RATIFICATION OF THE SELECTION OF RUBINBROWN LLP
Ownership
of Stock.
Security
Ownership of Certain Beneficial Owners and Management.
As of the
date of this Proxy Statement, 28,190,300 shares of our common stock were issued
and outstanding and we had issued warrants to purchase 21,317,500 additional
shares of our common stock. The following table sets forth the number
and percentage of shares and warrants owned by all persons known by us to be the
beneficial owners of more than 5% of our shares of common stock and/or our
warrants as of May 20, 2009.
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Common
Stock
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Warrants
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Fully
Diluted
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Name and Address of Beneficial
Owner
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Amount
of
Beneficial
Ownership
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Percent
of
Common
Stock
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Amount
of
Beneficial
Ownership
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Percent
of
Warrants
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Amount
of
Beneficial
Ownership
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Percent
of
Common
Stock
and
Warrants(f)
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Paul
A. Novelly, 8235 Forsyth
Blvd.,
4th
Floor, Clayton, MO
63105(a)
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11,703,750 |
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41.5 |
% |
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6,168,850 |
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28.9 |
% |
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17,872,600 |
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36.1 |
% |
Lee
E. Mikles, 1486 E. Valley
Road,
Santa Barbara, CA 93108(b)
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2,210,000 |
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7.8 |
% |
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12,500 |
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0.1 |
% |
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2,222,500 |
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4.5 |
% |
SOF
Investments, L.P., 645 5th
Avenue,
21st
Floor, New York,
NY
10022(c)
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1,800,000 |
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6.4 |
% |
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1,800,000 |
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8.4 |
% |
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3,600,000 |
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7.3 |
% |
Fir
Tree, LLC, Camellia Partners,
LLC,
Jeffrey Tannenbaum and
Andrew
Fredman, 505 Fifth
Avenue,
23rd
Floor, New York,
NY
10017(d)
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- |
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0.0 |
% |
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1,350,000 |
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6.3 |
% |
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1,350,000 |
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2.7 |
% |
Burlingame
Equity Investors, LP
One
Market Street, Spear Street
Tower,
Suite 3750, San Francisco,
CA
94105(e)
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486,600 |
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1.7 |
% |
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1,972,500 |
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9.3 |
% |
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2,459,100 |
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5.0 |
% |
Osmium
Special Situations Fund
Ltd.,
Canon’s Court, 22 Victoria
Street,
Hamilton, Bermuda DO
HM
11(g)
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3,380,992 |
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12.0 |
% |
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1,154,895 |
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5.4 |
% |
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4,535,887 |
|
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9.2 |
% |
David
M. Knott, 484 Underhill
Blvd.,
Suite 205, Syosset, NY
11791-3419(h)
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2,204,380 |
|
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7.8 |
% |
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1,763,900 |
|
|
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8.3 |
% |
|
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3,968,280 |
|
|
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8.0 |
% |
_________
(a)
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Includes
10,978,750 shares of common stock and 6,168,850 warrants held by St.
Albans Global Management, Limited Partnership, LLLP, 625,000 shares of
common stock held by Apex Holding Co. and 100,000 shares of common stock
held by Mr. Novelly. Mr. Novelly is the chief executive officer
of both of these entities and thereby has voting and investment power over
such shares, but he disclaims beneficial ownership except to the extent of
a minor pecuniary interest.
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(b)
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Includes
2,110,000 shares of common stock held by Lee E. Mikles Revocable Trust
dated March 26, 1996 and 100,000 shares of common stock held by Lee
E. Mikles Gift Trust dated October 6, 1999. Also includes
12,500 warrants held by the Alison L. Mikles Irrevocable
Trust. Miss Mikles is the minor child of Mr. Mikles and lives
in Mr. Mikles household. However, Mr. Mikles is not the trustee
of such trust and disclaims beneficial
ownership.
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(c)
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Based
solely upon review of a Schedule 13G filed on February 14, 2008,
we understand that SOF Investments, L.P. is the record and direct
beneficial owner of the shares and warrants listed above, MSD Capital,
L.P. is the general partner of SOF Investments, L.P. and may be deemed to
indirectly beneficially own securities owned by SOF Investments, L.P., and
MSD Capital Management LLC is the general partner of MSD Capital,
L.P. Except as set forth in this footnote, we have no knowledge
as to the beneficial ownership of these
entities.
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(d)
|
Based
solely upon information contained in a Form 3 filed with the SEC on
March 7, 2008 and a Form 4 filed on July 17, 2008, Fir
Tree, L.L.C. is the general partner of Fir Tree Value Master Fund, LP, a
Cayman Islands exempted limited partnership (“Fir Tree
Value”), and Camellia Partners, LLC is the general partner of Fir
Tree Capital Opportunity Master Fund, LP, a Cayman Islands exempted
limited partnership (“Fir Tree
Capital Opportunity”). Fir Tree, L.L.C. and Camellia
Partners, LLC hold indirectly the warrants through the accounts of Fir
Tree Capital Opportunity and Fir Tree Value; Jeffrey Tannenbaum, a
principal of Fir Tree, L.L.C. and Camellia Partners, LLC, and Andrew
Fredman, another principal of Camellia Partners, LLC, at the time of
purchase, controlled the disposition of the warrants. Except as
set forth in this footnote, we have no knowledge as to the beneficial
owners of these entities.
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(e)
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Based
solely upon a Schedule 13G/A filed with the SEC on February 17,
2009. Burlingame Equity Investors, LP beneficially owns 328,035
shares of common stock and 1,330,668 warrants. Burlingame
Equity Investors II, LP beneficially owns 40,606 shares of common stock
and 164,410 warrants. Burlingame Equity Investors (Offshore)
Ltd. beneficially owns 117,959 shares of common stock and 477,422
warrants. Burlingame Asset Management, LLC is the general
partner of Burlingame Equity Investors, LP and Burlingame Equity Investors
II, LP, and is the investment manager of Burlingame Equity Investors
(Offshore) Ltd. and may be deemed to beneficially own the shares and
warrants held by them. Mr. Blair E. Sanford is the managing
member of Burlingame Asset Management, LLC and may be deemed to
beneficially own the shares and warrants held by it. Except as
set forth in this footnote, we have no knowledge as to the beneficial
owners of these entities.
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(f)
|
Assumes
the exercise of all warrants issued and outstanding as of the date of this
report.
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(g)
|
Based
solely on Schedule 13G, Form 3 and Form 4s filed with the
SEC. Mr. Chris Kuchanny, as chairman and chief executive
officer of Osmium Special Situations Fund Ltd., may, by virtue of such
position, be deemed to have beneficial ownership of such shares and
warrants. Mr. Kuchanny disclaims beneficial ownership other
than the portion of such shares and warrants which relates to his
individual economic interest in Osmium Special Situations Fund
Ltd. Except as set fort in this footnote, we have no knowledge
as to the beneficial owners of Osmium Special Situations Fund
Ltd.
|
(h)
|
Based
solely on Schedule 13G, Form 3 and Form 4s filed with the
SEC. Knott Partners, L.P. beneficially owns 787,000 shares of
common stock and 883,800 warrants. Shoshone Partners, L.P.
beneficially owns 233,430 shares of common stock and 355,300
warrants. Mulsanne Partners, L.P. beneficially owns 341,800
shares of common stock. Knott Partners Offshore Master Fund,
L.P. beneficially owns 758,350 shares of common stock and 454,200
warrants. 83,800 shares of common stock and 70,600 warrants are
held in accounts managed by Dorset Management
Corporation. David M. Knott is the managing member of
Knott Partners Management, LLC, a general partner of Knott Partners, L.P.
and the sole director of Dorset Management Corporation. Knott
Partners Management, LLC is: (i) the sole general partner of Shoshone
Partners, L.P., Knott Partners Offshore Master Fund, L.P. and Mulsanne
Partners, L.P.; and (ii) the managing general partner of Knott
Partners, L.P. As a result of Mr. Knott’s interests in Knott
Partners Management, LLC and in Dorset Management Corporation, Mr. Knott
has investment discretion and control of the securities described
above. Mr. Knott may be deemed to beneficially own an indirect
pecuniary interest in the securities described above as a result of its
performance-related fee. Except with respect to Knott Partners,
L.P., Knott Partners Offshore Master Fund, L.P. and Shoshone Partners,
L.P., in which Mr. Knott owns a beneficial interest, Mr. Knott disclaims
beneficial ownership therein except to the extent ultimately
realized. Each of Knott Partners, L.P., Knott Partners Offshore
Master Fund, L.P., Shoshone Partners, L.P., Mulsanne Partners, L.P. and
each of the managed accounts disclaims beneficial ownership of securities
reported as owned by any other party. Except as set forth in
this footnote, we have no knowledge as to the beneficial owners of these
entities.
|
The
following table sets forth, as of May 20, 2009, certain information with
respect to beneficial ownership of shares of our common stock and warrants by
each of the members of our Board who will continue in office after the Annual
Meeting, each of the executive officers named in the “Summary Compensation
Table” below (the “named executive officers”) and all directors and named
executive officers as a group. Unless otherwise indicated, we believe
that all persons named in the table below have sole voting and investment power
with respect to all shares of common stock beneficially owned by them and none
of such shares or warrants have been pledged as security.
|
|
Common
Stock
|
|
|
Warrants
|
|
|
Fully
Diluted
|
|
Name and Address of Beneficial
Owner
|
|
Amount
of
Beneficial
Ownership
|
|
|
Percent
of
Common
Stock
|
|
|
Amount
of
Beneficial
Ownership
|
|
|
Percent
of
Warrants
|
|
|
Amount
of
Beneficial
Ownership
|
|
|
Percent
of
Common
Stock
and
Warrants(d)
|
|
Paul
A. Novelly(a)
|
|
|
11,703,750 |
|
|
|
41.5 |
% |
|
|
6,168,850 |
|
|
|
28.9 |
% |
|
|
17,872,600 |
|
|
|
36.1 |
% |
Lee
E. Mikles(b)
|
|
|
2,210,000 |
|
|
|
7.8 |
% |
|
|
12,500 |
|
|
|
0.0 |
% |
|
|
2,222,500 |
|
|
|
4.5 |
% |
Douglas
D. Hommert(c)
|
|
|
260,000 |
|
|
|
0.9 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
260,000 |
|
|
|
0.5 |
% |
Edwin
A. Levy
|
|
|
260,000 |
|
|
|
0.9 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
260,000 |
|
|
|
0.5 |
% |
Thomas
R. Evans
|
|
|
30,000 |
|
|
|
0.1 |
% |
|
|
30,000 |
|
|
|
0.1 |
% |
|
|
60,000 |
|
|
|
0.1 |
% |
Richard
L. Knowlton
|
|
|
160,000 |
|
|
|
0.6 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
160,000 |
|
|
|
0.3 |
% |
Paul
G. Lorenzini
|
|
|
250,000 |
|
|
|
0.9 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
250,000 |
|
|
|
0.5 |
% |
Donald
C. Bedell
|
|
|
10,000 |
|
|
|
0.0 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
10,000 |
|
|
|
0.0 |
% |
David
Baker
|
|
|
6,650 |
|
|
|
0.0 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
6,650 |
|
|
|
0.0 |
% |
Gary
Hess
|
|
|
10,100 |
|
|
|
0.0 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
10,100 |
|
|
|
0.0 |
% |
Sam
Dortch
|
|
|
100 |
|
|
|
0.0 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
100 |
|
|
|
0.0 |
% |
Ben
Ladd
|
|
|
20,100 |
|
|
|
0.1 |
% |
|
|
-- |
|
|
|
-- |
|
|
|
20,100 |
|
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
directors and executive officers
|
|
|
14,920,700 |
|
|
|
52.9 |
% |
|
|
6,211,350 |
|
|
|
29.1 |
% |
|
|
21,132,050 |
|
|
|
42.7 |
% |
__________
(a)
|
Includes
10,978,750 shares of common stock and 6,168,850 warrants held by St.
Albans Global Management, Limited Partnership, LLLP, 625,000 shares of
common stock held by Apex Holding Co. and 100,000 shares of common stock
held by Mr. Novelly. Mr. Novelly is the chief executive officer
of both of these entities and thereby has voting and investment power over
such shares, but he disclaims beneficial ownership except to the extent of
a minor pecuniary interest.
|
(b)
|
Includes
2,110,000 shares of common stock held by Lee E. Mikles Revocable Trust
dated March 26, 1996 and 100,000 shares of common stock held by Lee
E. Mikles Gift Trust dated October 6, 1999. Also includes
12,500 warrants held by the Alison L. Mikles Irrevocable
Trust. Miss Mikles is the minor child of Mr. Mikles and lives
in Mr. Mikles household. However, Mr. Mikles is not the trustee
of such trust and disclaims beneficial
ownership.
|
(c)
|
Includes
260,000 shares of common stock held by the Douglas D. Hommert Revocable
Trust, which is a trust established by Mr. Hommert for the benefit of his
descendants, of which Mr. Hommert is the
trustee.
|
(d)
|
Assumes
the exercise of all warrants issued and outstanding as of the date of this
report.
|
|
Section 16(a)
Beneficial Ownership Reporting
Compliance.
|
The
following table sets forth transactions in 2008 for which our directors and
executive officers were required to file with the SEC a Form 3 or
Form 4, and whether or not such Form was filed timely with the
SEC.
Director
or Officer
|
Transaction
|
Form
Required
|
Filed
Timely
|
Paul
A. Novelly
|
4-7-08
award of 100,000 options
|
Form
4
|
|
|
4-15-08
purchase of 1,525,100 shares of our common stock by warrant
exercise
|
Form
4
|
yes
|
|
7-14-08
exercise of 100,000 options
|
Form
4
|
yes
|
|
7-16-08
purchase of 862,000 shares of our common stock
|
Form
4
|
yes
|
|
10-3-08
purchase of 500,000 shares of our common stock
|
Form
4
|
yes
|
|
10-6-08
purchase of 500,000 shares of our common stock
|
Form
4
|
yes
|
|
10-6-08
purchase of 185,400 shares of our common stock
|
Form
4
|
yes
|
|
10-21-08
exercise of 625,000 warrants
|
Form
4
|
|
|
12-8-08
award of 100,000 options
|
Form
4
|
|
Lee
E. Mikles
|
4-7-08
award of 10,000 options
|
Form
4
|
|
|
7-16-08
purchase of 100,000 shares of our common stock
|
Form
4
|
yes
|
|
9-3-08
exercise of 10,000 options
|
Form
4
|
|
Paul
G. Lorenzini
|
4-7-08
award of 100,000 options
|
Form
4
|
|
|
7-16-08
purchase of 150,000 shares of our common stock
|
Form
4
|
yes
|
|
10-3-08
exercise of 100,000 options
|
Form
4
|
|
Douglas
D. Hommert
|
7-16-08
purchase of 10,000 shares of our common stock
|
Form
4
|
yes
|
Edwin
A. Levy
|
4-7-08
award of 10,000 options
|
Form
4
|
|
|
10-10-08
exercise of 10,000 options
|
Form
4
|
|
Thomas
R. Evans
|
4-7-08
award of 10,000 options
|
Form
4
|
|
Richard
L. Knowlton
|
4-7-08
award of options
|
Form
4
|
|
|
7-16-08
purchase of 150,000 shares of our common stock
|
Form
4
|
yes
|
|
10-20-08
exercise of 10,000 options
|
Form
4
|
|
Donald
C. Bedell
|
4-7-08
award of 10,000 options
|
Form
4
|
|
|
10-9-08
exercise of 10,000 options
|
Form
4
|
|
David
Baker
|
4-7-08
award of 10,000 options
|
Form
4
|
|
|
10-2-08
purchase of 3,600 shares of our common stock
|
Form
4
|
|
|
10-2-08
purchase of 2,600 shares of our common stock
|
Form
4
|
|
|
10-7-08
purchase of 350 shares of our common stock
|
Form
4
|
|
|
12-3-08
award of 100 shares of our common stock
|
Form
4
|
|
Gary
Hess
|
4-7-08
award of 10,000 options
|
Form
4
|
|
|
10-22-08
exercise of 10,000 options
|
Form
4
|
|
|
12-3-08
award of 100 shares of our common stock
|
Form
4
|
|
Sam
Dortch
|
4-7-08
award of 10,000 options
|
Form
4
|
|
|
12-3-08
award of 100 shares of our common stock
|
Form
4
|
|
Ben
Ladd
|
4-7-08
award of 10,000 options
|
Form
4
|
|
|
7-16-08
purchase of 10,000 shares of our common stock
|
Form
4
|
yes
|
|
10-2-08
exercise of 10,000 options
|
Form
4
|
|
|
12-3-08
award of 100 shares of our common stock
|
|
|
To our
knowledge, based upon the reports provided to us under Section 16(a) of the
Exchange Act, no other filing required under such section was not timely
filed.
Directors,
Executive Officers and Certain Significant Employees.
Our
directors are as follows.
Name
|
|
Age
|
|
Director
Since
|
|
Term
Expires
|
Paul
A. Novelly, executive chairman of the board
|
|
65
|
|
2005
|
|
2009
|
Lee
E. Mikles, chief executive officer and president
|
|
53
|
|
2005
|
|
2011
|
Paul
G. Lorenzini, chief operating officer
|
|
69
|
|
2007
|
|
2009
|
Edwin
A. Levy
|
|
72
|
|
2005
|
|
2010
|
Thomas
R. Evans
|
|
54
|
|
2006
|
|
2011
|
Richard
L. Knowlton
|
|
76
|
|
2007
|
|
2009
|
Donald
C. Bedell
|
|
68
|
|
2008
|
|
2010
|
There is
no arrangement or understanding between any of the above directors and any other
person pursuant to which such person was or is to be selected as a
director.
Our
executive officers are as follows.
Name
|
|
Position
|
|
Age
|
|
Officer
Since
|
Paul
A. Novelly
|
|
Executive
chairman of the board
|
|
65
|
|
2005
|
Lee
E. Mikles
|
|
Chief
executive officer and president
|
|
53
|
|
2005
|
Paul
G. Lorenzini
|
|
Chief
operating officer
|
|
69
|
|
2008
|
Douglas
D. Hommert
|
|
Executive
vice president, secretary and treasurer
|
|
53
|
|
2005
|
There is
no arrangement or understanding between any of the above officers and any other
person pursuant to which such person was or is to be selected as an
officer.
The
following individuals are executive officers of our subsidiary, FutureFuel
Chemical Company, who are expected to make significant contributions to our
business.
Name
|
|
Position
|
|
Age
|
|
Officer
Since
|
David
Baker
|
|
Senior
vice president - operations support
|
|
62
|
|
2006
|
Gary
Hess
|
|
Senior
vice president - commercial operations
|
|
58
|
|
2006
|
Benjamin
Ladd
|
|
Chief
financial officer and treasurer
|
|
32
|
|
2006
|
Samuel
Dortch
|
|
Senior
vice president - operations
|
|
60
|
|
2007
|
Business
Experience.
The
following is a description of the business experience and background of our
directors, officers and significant employees identified above.
Paul A.
Novelly has been our chairman of the board since
inception. For at least the past five years, Mr. Novelly has been
chairman and chief executive officer of Apex Oil Company, Inc., a privately-held
company based in St. Louis, Missouri engaged in the trading, storage, marketing
and transportation of petroleum products, including liquid terminal facilities
in the Midwest and Eastern United States, and towboat and barge operations on
the inland waterway system. Mr. Novelly is president and a director
of AIC Limited, a Bermuda-based oil trading company, chairman and a director of
World Point Terminals Inc., a publicly-held Canadian company based in Calgary
which owns and operates petroleum storage facilities in the Bahamas and United
States, and chief executive officer of St. Albans Global Management, Limited
Partnership, LLLP, which provides corporate management services. He
currently serves on the board of directors at Boss Holdings, Inc., a distributor
of work gloves, boots and rainwear and other consumer products, and within the
past five years also served on the board of directors of Intrawest Corporation,
a company in the destination resorts and adventure travel industry, and The Bear
Stearns Companies, Inc., a broker-dealer and global securities and investment
firm.
Lee E.
Mikles has been our chief executive officer and a member of our board
since inception. In addition, he served as our principal financial
officer before our acquisition of FutureFuel Chemical Company and thereafter
through January 31, 2008. Mr. Mikles was chairman of
Mikles/Miller Management, Inc., a registered investment adviser and home to the
Kodiak family of funds, between 1992 and 2005. He was also chairman
of Mikles/Miller Securities, LLC, a registered broker-dealer, between 1999 and
2005. Additionally, Mr. Mikles has served on the board of directors
of Official Payments Corporation, Coastcast Corporation, Nelnet, Inc., Imperial
Bank and Imperial Bancorp. He currently serves on the board of
directors of Boss Holdings, Inc. and Pacific Capital Bankcorp. and is the chair
of the audit committee for Boss Holdings, Inc.
Paul G.
Lorenzini has been a member of our board since January 2007 and our chief
operating officer since April 21, 2008. In January 1970, Mr.
Lorenzini co-founded Packaging Consultants, Inc., a distribution business
supplying packaging materials to the food industry. In 1983, Bunzl
PLC, a supplier of supermarket and food service packaging, acquired Packaging
Consultants, Inc. Mr. Lorenzini continued to work for Bunzl PLC and
in 1986 became president of Bunzl USA. He subsequently became the
chief executive officer of Bunzl USA and retired in July 2004 with the title of
chairman emeritus. Mr. Lorenzini served as a director of Bunzl PLC
between 1999 and 2004.
Douglas D.
Hommert has been our executive vice president, secretary and treasurer
since inception. He was a member of our board from inception through
January 14, 2008. He became our principal financial officer on
February 1, 2008. Mr. Hommert has been executive vice president
and general counsel of Apex Oil Company, Inc. since September
2002. Between October 1988 and September 2002, he was a partner in
the St. Louis law firm of Lewis, Rice & Fingersh, L.C. With that
firm, he practiced in the areas of business law, taxation, mergers and
acquisitions, financing and partnerships. He was licensed as a
Certified Public Accountant in 1982.
Edwin A.
Levy has been a member of our board since November 2005. In
1979, Mr. Levy co-founded Levy, Harkins & Co., Inc., an investment advisory
firm, where he now serves as chairman of the board and individual
advisor. Mr. Levy was a director of Traffix, Inc. between November
1995 and 2006, and served as a member of its audit committee and stock options
committee. He is a director of World Point Terminals Inc., a
publicly-held Canadian company based in Calgary which owns and operates
petroleum storage facilities in the Bahamas and United States, and in the past
five years was a director of Forward Industries, Inc., a publicly-held company
in the business of designing, manufacturing and distributing custom carrying
case solutions.
Thomas R.
Evans has been a member of our board since May 2006. Since
June 2004, he has served as president and chief executive officer of Bankrate,
Inc., an Internet based aggregator of financial rate information. Mr.
Evans was elected to Bankrate, Inc.’s board of directors in May
2004. From 1999 to 2002, Mr. Evans was chairman and chief executive
officer of Official Payments Corporation, an Internet processor of payment to
government entities.
Richard L.
Knowlton has been a member of our board since January
2007. Between 1956 and 1995, Mr. Knowlton worked for Hormel Foods
Corporation, a multinational manufacturer and marketer of consumer-branded meat
and food products. He started as a merchandising manager and became
the president and chief operating officer in 1979. He became the
chief executive officer and chairman of the board in 1981 and retired in
1995. Mr. Knowlton currently serves as a director on The Hormel
Foundation and the Horatio Alger Association and is a member of the Business
Advisory Council for the University of Colorado Leeds School of Business, the
Mayo Laboratory Services Advisory
Board and the Eisenhower Medical Center Board. Mr. Knowlton served as
a director of NG America Insurance Holdings, Inc. between 2000 and 2005 and
SUPERVALU INC. between 1994 and 2005.
Donald C.
Bedell has been a member of our board since March 17,
2008. Mr. Bedell is chairman of the board of privately held Castle
Partners and its affiliates, based in Sikeston, Missouri, which operate over 35
skilled nursing and health care facilities throughout Missouri, Arkansas and
Arizona. Mr. Bedell is a director of several privately held
commercial banks, including First Community Bank of Batesville, Arkansas and is
a member of the executive committee of such bank and its holding
company. He is also a director of World Point Terminals Inc., serving
as chairman of World Point’s Corporate Governance and Human Resources
Committees. FutureFuel Corp.’s chairman, Paul A. Novelly, is the
chairman of the board of World Point Terminals Inc.
David
Baker was the vice president - manufacturing operations of FutureFuel
Chemical Company between October 31, 2006 and October 14, 2007 and has
been senior vice president - operations support since October 15,
2007. In 1967, he joined Eastman Chemical Company’s filter products
division in Kingsport, Tennessee as a
development
engineer. In 2001, Mr. Baker was named managing director of Eastman
Chemical Company’s Peboc division, relocating to the United
Kingdom. The Peboc division manufactures specialty chemicals
including active pharmaceutical ingredients. In August 2005, Mr.
Baker relocated to Kingsport as a business development manager in performance
chemicals exclusive manufacturing. Mr. Baker is a registered
professional engineer and past president of the East Tennessee Society of
Professional Engineers.
Gary Hess
was the vice president - commercial operations of FutureFuel Chemical Company
between October 31, 2006 and October 14, 2007 and has been senior vice
president - sales and marketing since October 15, 2007. Mr. Hess
was the vice president for commercial operations for Bayer Corporation, where he
had responsibility for sales, marketing, customer service, purchasing, research
and development and quality control, prior to joining Eastman Chemical Company
in December 2002 as the market development executive for
agrochemicals. During his tenure with Bayer Corporation, Mr. Hess
resided two years in Germany where he directed the market development efforts in
pharmaceutical intermediates and photographic chemicals. In 2004, he
was appointed to the position of global business leader for exclusive
manufacturing with responsibility for sales, marketing and business
development.
Benjamin
Ladd became FutureFuel Chemical Company’s chief financial officer on
October 31, 2006. From October 2003 to October 2006, Mr.
Ladd was a fund manager and financial consultant for St. Albans Global
Management, Limited Partnership, LLLP. In this position, he assisted
with the management of capital in the equity and derivative markets worldwide
and was responsible for all financial analysis and reporting related to the
firm’s merchant banking and consulting activities. From 1999 to 2003,
Mr. Ladd served in various capacities for Green Manning & Bunch, Ltd., a
middle-market investment banking firm in Denver, Colorado.
Samuel
Dortch was the vice president - operations services of FutureFuel
Chemical Company between July 30, 2007 and October 14, 2007 and has
been senior vice president - operations since October 15,
2007. In 1972, Mr. Dortch joined Eastman Chemical Company’s technical
services division in Kingsport, Tennessee as a development chemical
engineer. He has served in numerous management positions in
Kingsport, Batesville and at Eastman Kodak’s Kirby, England
facility. In 2004, Mr. Dortch became manager of research and
development at the Batesville plant and director of research and development in
December 2006.
Board
of Directors.
Board
Meetings and Committees; Annual Meeting Attendance.
Directors
are expected to attend all meetings of the Board, the Annual Meeting of
shareholders and assigned committee meetings. The Board held 18
meetings during 2008 (15 of which were unanimous consents in lieu of
meetings). These meetings were attended by all of the
directors. The 2008 Annual Meeting of shareholders was held on
June 24, 2008. Three directors (Messrs. Novelly, Mikles,
Lorenzini and Hommert) attended that Annual Meeting.
The Board
has established the following committees: audit committee, remuneration
committee and nominating committee. The 2008 members of each of these
committees, a summary of the responsibilities and authority of each of the
committees and the number of meetings held by each committee in 2008,
follow.
Name
of Committee and Members during 2008
|
Functions
of the Committee
|
Number
of
Meetings
in
2008
|
Audit:
Thomas R. Evans
(chairman)
Richard L.
Knowlton
Edwin A. Levy
|
-
Appoints, compensates and oversees the work of any public accounting firm
employed by the
Company;
-
Resolves any disagreements between management and the auditor regarding
financial reporting;
-
Pre-approves all audit and non-audit services;
-
Retains independent counsel, accountants or others to advise the Committee
or assist in the conduct
of
an investigation;
-
Seeks any information it requires from employees - all of whom are
directed to cooperate with the
Committee’s requests;
-
Meets with the Company’s officers, external auditors, or outside counsel,
as necessary; and
-
Oversees that management has established and maintained processes to
assure compliance by the
Company
with all applicable laws, regulations and corporate
policies.
|
8
(all
member attended each meeting except that Mr. Evans did not attend one of
the meetings)
|
Remuneration:
Donald C. Bedell
(chairman)
Richard L.
Knowlton
Edwin A. Levy
|
-
In consultation with the Company’s management, establishes the Company’s
general policies relating
to compensation of the Company’s officers and directors and the directors
and executive officers of
the Company’s subsidiaries, and oversees the development and
implementation of such compensation
programs;
-
Approves the annual and long-term performance goals for the Company’s
incentive plans (including
incentive plans for the Company’s subsidiaries);
-
Annually reviews and approves corporate goals and objectives relevant to
the compensation of the
Company’s executive officers and annually evaluates such officers’
performance in light of those
goals and objectives and sets such officers’ compensation levels based on
this evaluation;
-
As required under applicable securities laws and rules, reviews the
Compensation Discussion and
Analysis section (the “CD&A”)
to be included in the Company’s annual proxy statement or
other
reports or filings with the SEC or other governmental authorities and
stock exchanges, discusses the
CD&A with the Company’s management and recommends to the Board that
the CD&A be included in
the Company’s annual report on Form 10-K, proxy statement on Schedule 14A,
information
statement on Schedule 14C or any other filing with the SEC or other
governmental authorities and
stock exchanges;
-
Reviews and makes recommendations to the Board periodically with respect
to the compensation of
all non-employee directors, including any compensation under the Company’s
equity-based plans; and
-
Evaluates the committee’s performance and the adequacy of its charter on
an annual basis and
recommends any proposed changes to the Board for approval.
|
8
(all
members attended each meeting)
|
Nominating:
Edwin A. Levy
(chairman)
Thomas R. Evans
Donald C.
Bedell
|
-
Assists the Board by identifying qualified candidates for director, and
recommends to the Board the
director nominees for the next annual meeting of
shareholders;
-
Leads the Board in its annual review of Board performance;
-
Recommends to the Board director nominees for each Board
committee;
-
Oversees the annual process of evaluation of the performance of the
Company’s management; and
-
Develops and recommends to the Board corporate governance guidelines
applicable to the Company.
|
none
|
Audit
Committee.
We have a
separately-designated standing audit committee and have adopted an audit
committee charter. A copy of this audit committee charter may be
accessed at http://ir.futurefuelcorporation.com/governance.cfm
on our internet website. A copy may also be obtained free of charge
from us by written request to our corporate secretary at our principal office
set forth above. The members of the audit committee in 2008 were:
Thomas R. Evans (chairman), Edwin A. Levy and Richard L.
Knowlton. Paul G. Lorenzini was the chairman of the audit
committee. On April 21, 2008, Mr. Lorenzini became our chief
operating officer and was replaced as chairman of the audit committee on
April 25, 2008 by Thomas R. Evans.
The
primary duties and responsibilities of the audit committee are to monitor:
(i) the integrity of our financial statements, including the financial
reporting process and systems of internal controls regarding finance and
accounting; (ii) our compliance with related legal and regulatory
requirements; and (iii) the independence and performance of our external
auditor. The audit committee also selects our independent registered
public accounting firm. Management of the Company is responsible for
designing and implementing the internal controls and the financial reporting
process. The independent registered public accounting firm is
responsible for performing an independent audit of our financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon. The audit committee’s responsibility is to monitor and
oversee these processes.
Audit
Committee Recommendation
In the
performance of its oversight function, the audit committee has performed the
duties required by its charter, and it has reviewed and discussed our
consolidated financial statements for 2008 with management and the independent
registered public accounting firm. The audit committee also has
discussed with the independent registered public accounting firm the matters
required to be discussed by the Statement on Auditing Standards Number 61, Communication with Audit
Committees, as amended, as adopted by the Public Company Accounting
Oversight Board (“PCAOB”) in
Rule 3200T.
The audit
committee has received the written disclosures and the letter from the
independent registered public accounting firm required by the applicable
requirements of PCAOB regarding the independent registered public accounting
firm’s communications with our audit committee concerning independence, and has
discussed with the independent registered public accounting firm its
independence. The audit committee also has received confirmations
from management and has considered whether the provision of any nonaudit
services by the independent registered public accounting firm to us is
compatible with maintaining the independence of the auditors.
Based
upon a review of the reports by, and discussions with, management and the
independent registered public accounting firm and the audit committee’s review
of the representations of management and the report of the independent
registered public accounting firm, the audit committee recommended to the Board
to include the audited financial statements in our Form 10-K and Annual
Report for the year ended December 31, 2008.
Thomas R.
Evans, Edwin A. Levy and Richard L. Knowlton
Audit
Committee Expert
Our Board
has determined that each member of our audit committee is an audit committee
financial expert. During 2008, each such member of our audit
committee was independent, as independence for audit committee members is
defined in the listing standards applicable to us as described
below. On April 21, 2008, Mr. Lorenzini became our chief
operating officer and ceased being independent. On April 25,
2008, Mr. Thomas R. Evans replaced Mr. Lorenzini as the chairman of the audit
committee. Our Board has determined that Mr. Evans is an audit
committee financial expert and is independent, as independence for audit
committee members is defined in the listing standards applicable to us as
described below.
Nominating
Committee.
The
nominating committee has a charter. A copy of that charter may be
found at our internet web site at http://ir.futurefuelcorporation.com/governance.cfm. A
copy may also be obtained free of charge by written request to our corporate
secretary at our principal office set forth above.
Our Board
has adopted Procedures for Shareholders Submitting Nominating Recommendations,
which sets forth the procedure for a shareholder to submit a director nominee
recommendation, the timelines for receiving such nominations and the information
required on each director nominee. The Board has also adopted a
Policy on Shareholder Recommendation of Candidates for Election as Directors,
which sets forth the evaluation process adopted by the Board. Any
shareholder desiring to submit a director nominee for consideration by the
nominating committee of the Board for the 2010 Annual Meeting must do so in
accordance with our bylaws and policies described below under “Shareholder
Proposals for the Next Annual Meeting”. Director nominations should
be submitted in writing to our corporate secretary, acting as agent for the
nominating committee, at FutureFuel Corp., 8235 Forsyth Blvd., 4th Floor,
Clayton, Missouri 63105. A copy of such Procedures and Policy is
available to any shareholder and may be obtained from our corporate
secretary.
Once a
director nominee has been recommended, whether by a shareholder or otherwise,
the nominating committee reviews the background and qualifications of the
nominee. In selecting the slate of nominees to be recommended by the
nominating committee to the Board, and in an effort to maintain a proper mix of
directors that results in a highly effective governing body, the nominating
committee also considers such factors as the occupational, geographic and age
diversity of all director nominees; the particular skills and ability of each
nominee to understand financial statements and finance matters generally;
community involvement of each nominee; and the independence status of each
nominee in accordance with our corporate governance guidelines, SEC rules and
other applicable laws and regulations.
The
nominating committee reports its recommendations concerning each director
nominee to the Board. The Board then considers the nominating
committee’s recommendations and selects those director nominees to be submitted
to the shareholders for approval at the next Annual Meeting of
shareholders. The Board may, as a part of its consideration, request
the nominating committee to provide it with such information pertaining to a
director nominee as the Board deems appropriate to fully evaluate the
qualifications of the nominee.
Remuneration
Committee.
Our Board
has established a remuneration committee. The remuneration committee
has a charter which may be found at our internet web site at http://ir.futurefuelcorporation.com/governance.cfm. In
addition, a copy will be provided free of charge by written request to our
corporate secretary at our principal office set forth above. Our
processes and procedures for the consideration and determination of executive
and director compensation are described in “Compensation of Directors and
Executive Officers” below.
Director
Independence.
Our Board
has adopted corporate governance guidelines which incorporate certain rules of
the SEC and U.S. securities exchanges for use by the Board when determining
director independence. These guidelines include the Company’s Policy
for Approving Transactions with Related Parties and Insider Trading
Policy. The Board also broadly considers all other relevant facts and
circumstances that bear on the materiality of each director’s relationship with
us, including the potential for conflicts of interest, when determining director
independence.
The
nominating committee of our Board evaluates each incumbent director and all new
director nominees based on applicable law, regulations and rules and makes a
recommendation to the full Board as to the independence of directors and
director nominees. Our Board has determined that, of the seven
current members of the Board who will continue to serve after the Annual
Meeting, the following four directors have no disqualifying material
relationships with us or our subsidiaries and are, therefore, independent:
Messrs. Levy, Evans, Knowlton and Bedell. In addition, in 2008 each
of our Board’s remuneration, audit and nominating committees was comprised of
directors who were independent under such definitions. The guidelines
referenced above, as well as other corporate governance initiatives adopted by
us, are available to any shareholder free of charge upon request to our
corporate secretary at our principal office set forth above.
Compensation
of Directors and Executive Officers.
General
Our board
of directors has established a remuneration committee. The
remuneration committee’s responsibilities include, among other things,
determining our policy on remuneration to our (that is, FutureFuel Corp.’s)
officers and directors and the executive officers and directors of FutureFuel
Chemical Company. Given that we were a start-up company and only
consummated our acquisition of FutureFuel Chemical Company on October 31,
2006, we determined for 2006 not to pay salaries, bonuses or other forms of
compensation to any of our executive officers who have been elected by the
FutureFuel Chemical Company board of directors to an executive officer position
with FutureFuel Chemical Company. The FutureFuel Corp. board also
determined not to pay any compensation to any member of its board of directors
or to any member of the board of any subsidiary for the year 2006. On
January 16, 2008, our remuneration committee recommended that we pay each
of our then directors $25,000 in compensation, and $25,000 to our past director
William J. Doré. The remuneration committee also recommended that we
pay $100,000 in compensation to each of Paul A. Novelly and Paul G. Lorenzini
for services provided in 2007 to our subsidiary, FutureFuel Chemical Company,
and to reimburse an affiliate of Lee E. Mikles $100,000 for expenses incurred by
such affiliate in 2007 in the course of Mr. Mikles performing services for us
and our subsidiary, FutureFuel Chemical Company. Our board approved
such payments on January 22, 2008. On December 11, 2008,
our remuneration committee recommended that we pay each of our then directors
$25,000 in compensation. The remuneration committee also recommended
that we pay $100,000 in compensation to Paul G. Lorenzini for services provided
in 2008 to our subsidiary, FutureFuel Chemical Company, and to reimburse an
affiliate of Paul A. Novelly and an affiliate of Lee E. Mikles $100,000 each for
expenses incurred by such affiliates in 2008 in the course of Mr. Novelly and
Mr. Mikles performing services for us and our subsidiary, FutureFuel Chemical
Company. Our board approved such payments on December 30,
2008. No compensation for our directors or executive officers has
been set at this time for the calendar year 2009. Rather, our board
believes it is more appropriate to set such compensation later in the year when
2009 results are capable of reasonable estimation.
We pay
salaries, bonuses and other forms of compensation to the officers of FutureFuel
Chemical Company as described below. For purposes of the following
discussion of executive compensation, the term “executive officers” includes
executive officers of both FutureFuel Corp. and FutureFuel Chemical
Company. Only Paul A. Novelly, Lee E. Mikles, Paul G. Lorenzini and
Douglas D. Hommert have been elected officers of FutureFuel Corp. by our board
of directors.
Compensation
Discussion and Analysis
We have
not yet established a comprehensive executive compensation philosophy, nor have
we determined definitively the material elements of the compensation of our
executive officers. The current elements of our compensation program
include base salary, bonuses and certain retirement, insurance and other
benefits generally available to all employees. In addition, our board
adopted an Omnibus Incentive Plan (the “Incentive
Plan”) which was approved by our shareholders at our 2007 annual meeting
on June 26, 2007. The Incentive Plan provides equity-based
compensation to our executive officers and our directors.
Cash
Salaries and Bonuses
At this
time, we have determined that we will pay $100,000 compensation to Mr. Lorenzini
for services rendered by Mr. Lorenzini to our subsidiary, FutureFuel Chemical
Company during 2008, and to reimburse an affiliate of Mr. Novelly and an
affiliate of Mr. Mikles $100,000 each for expenses incurred by such affiliate in
the course of Mr.
Novelly
and Mr. Mikles performing services for us and our subsidiary, FutureFuel
Chemical Company. Such services included reviewing business
operations and reducing operating costs. The $100,000 was determined
by Messrs. Novelly and Mikles as reasonable in relation to the services
rendered, and was approved by our remuneration committee and our
board. No compensation will be paid to Mr. Hommert for
2008. Our executive chairman, Mr. Novelly, also receives compensation
from our affiliate, St. Albans Global Management, Limited Partnership,
LLLP. Our chief executive officer, Mr. Mikles, receives compensation,
in addition to the amounts received from us, from existing business enterprises
and investments, none of which are affiliated with us. Our executive
vice president, secretary and treasurer, Mr. Hommert, receives compensation from
our affiliate, Apex Oil Company, Inc. Except as described above, none
of Messrs. Novelly, Mikles, Lorenzini or Hommert received any increase in their
salary, bonus or other income to compensate them for their services to
us. As to our other executive officers, we continued their base
salaries paid for 2007 with a modest percentage increase for 2008. We
expect that our remuneration committee will establish future salaries for our
executive officers commensurate with those paid by companies comparable to us
and to FutureFuel Chemical Company, as applicable.
For the
year 2008, we established a bonus pool for the employees of our subsidiary,
FutureFuel Chemical Company. The total bonus target amount was
determined at 10% of the estimated (as of December 15, 2008) after-tax
earnings of FutureFuel Chemical Company for the year ended December 31,
2008, subject to certain adjustments. We believe the 10% amount was
reasonable and provides an incentive for such employees to continue implementing
the business plan that we have installed at FutureFuel Chemical
Company. This bonus was paid in cash and shares of our common
stock. FutureFuel Chemical Company employees with over one year of
service received approximately two weeks pay. Employees with less
than one year service received $250. In addition, FutureFuel Chemical
Company employees with over three years service received 100 shares of our
common stock issued under the Incentive Plan. The cash portion of
such bonuses was paid on December 19, 2008. The shares of stock
were issued on December 3, 2008. Salaried employees of
FutureFuel Chemical Company received an additional bonus amount ranging from $0
to $40,000, with the larger bonuses going to FutureFuel Chemical Company’s
executive officers as determined by FutureFuel Chemical Company’s board of
directors.
We expect
to establish an annual cash bonus program for fiscal years commencing after 2008
in an amount equal to 10% of after-tax earnings of FutureFuel Chemical Company,
subject to certain adjustments, but solely on a discretionary
basis. In determining actual bonus payouts for such years, we expect
that the remuneration committee will consider performance against Company
performance goals to be established, as well as individual performance
goals. We expect that this annual cash bonus program will apply to
certain key executives of FutureFuel Chemical Company in addition to the
executives whose compensation is described herein. The actual amount
of bonuses, if any, will be determined near the end of our fiscal
year.
Omnibus
Incentive Plan
Our board
of directors adopted the Incentive Plan, which was approved by our shareholders
at our 2007 annual shareholder meeting on June 26, 2007. The
purpose of the Incentive Plan is to:
|
·
|
encourage
ownership in us by key personnel whose long-term employment with or
engagement by us or our subsidiaries (including FutureFuel Chemical
Company) is considered essential to our continued progress and, thereby,
encourage recipients to act in our shareholders’ interests and share in
our success;
|
|
·
|
encourage
such persons to remain in our employ or in the employ of
our subsidiaries; and
|
|
·
|
provide
incentives to persons who are not our employees to promote our
success.
|
The
Incentive Plan authorizes us to issue stock options (including incentive stock
options and nonqualified stock options), stock awards and stock appreciation
rights. To date, options for 410,000 shares of stock and awards of
39,800 shares of stock have been made. We will consider issuing
additional stock options, stock awards and/or stock appreciation rights pursuant
to the criteria set forth below. However, no determinations have been
made for 2009.
Eligible
participants in the Incentive Plan include: (i) members of our board of
directors and our executive officers; (ii) regular, active employees of us
or of any of our subsidiaries; and (iii) persons engaged by us or by any of
our subsidiaries to render services to us or our subsidiaries as an advisor or
consultant.
Awards
under the Incentive Plan are limited to shares of our common stock, which may be
shares reacquired by us, including shares purchased in the open market, or
authorized but un-issued shares. Awards will be limited to 10% of the
issued and outstanding shares of our common stock in the aggregate, or
approximately 2,670,000 shares as of the date of adoption of the Incentive
Plan.
The
Incentive Plan will be administered by our board’s remuneration committee (the
“Administrator”). The
Administrator may appoint agents to assist it in administering the Incentive
Plan. The Administrator may delegate to one or more individuals the
day-to-day administration of the Incentive Plan and any of the functions
assigned to the Administrator in the Incentive Plan. Such delegation
may be revoked at any time. All decisions, determinations and
interpretations by the Administrator regarding the Incentive Plan and the terms
and conditions of any award granted thereunder will be final and binding on all
participants.
The
Incentive Plan became effective upon its approval by our shareholders on
June 26, 2007 and continues in effect for a term of ten years thereafter
unless amended and extended by us or unless earlier terminated. The
individuals and number of persons who may be selected to participate in the
Incentive Plan in the future is at the discretion of the Administrator and,
therefore, are not determinable at this time. Likewise, the number of
stock options, stock awards and stock appreciation rights that will be granted,
or that would have been granted during the last completed fiscal year if the
Incentive Plan had been in effect, to eligible participants pursuant to the
Incentive Plan are not determinable at this time.
The
Administrator may grant a stock option or provide for the grant of a stock
option either from time to time in the discretion of the Administrator or
automatically upon the occurrence of events specified by the Administrator,
including the achievement of performance goals or the satisfaction of an event
or condition within the control of the participant or within the control of
others. Each option agreement must contain provisions regarding:
(i) the number of shares of common stock that may be issued upon exercise
of the option; (ii) the type of option; (iii) the exercise price of
the shares and the means of payment for the shares; (iv) the term of the
option; (v) such terms and conditions on the vesting or exercisability of
the option as may be determined from time to time by the Administrator;
(vi) restrictions on the transfer of the option and forfeiture provisions;
and (vii) such further terms and condition not inconsistent with the plan
as may be determined from time to time by the Administrator. Unless
otherwise specifically determined by the Administrator or otherwise set forth in
the Incentive Plan, the vesting of an option will occur only while the
participant is employed or rendering services to us or one of our subsidiaries,
and all vesting will cease upon a participant’s termination of employment for
any reason.
The
Administrator may grant annual performance vested
options. Performance will be tied to annual cash flow targets (our
consolidated income plus depreciation plus amortization) in amounts to be
determined. Annual performance vested options will vest 25% for each
year that the annual cash flow target is achieved (with provisions for
subsequent year catch-ups).
The
Administrator may grant cumulative performance vested
options. Performance will be tied to cumulative cash flow in amounts
to be determined for periods to be determined.
The
Administrator may issue other options based upon the following performance
criteria either individually, alternatively or in any combination, applied to
either the Company as a whole or to a business unit, subsidiary or business
segment, either individually, alternatively or in any combination, and measured
either annually or cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous years’ results or to a
designated comparison group, in each case as specified by the Administrator:
(i) cash flow; (ii) earnings (including gross margin, earnings before
interest and taxes, earnings before taxes, and net earnings);
(iii) earnings per share; (iv) growth in earnings or earnings per
share; (v) stock price; (vi) return on equity or average shareholders’
equity; (vii) total shareholder return; (viii) return on capital;
(ix) return on assets or net assets; (x) return on investment;
(xi) revenue; (xii) income or net income; (xiii) operating income
or net operating income; (xiv) operating profit or net operating profit;
(xv) operating margin; (xvi) return on operating revenue;
(xvii) market share; (xviii) overhead or other expense reduction;
(xix) growth in shareholder value relative to the moving
average
of the
S&P 500 Index or a peer group index; (xx) strategic plan development
and implementation; and (xxi) any other similar criteria.
Such
options will vest and expire (including on a pro rata basis) on such terms as
may be determined by the Administrator from time to time consistent with the
terms of the Incentive Plan.
The
Administrator may award our common stock to participants. The grant,
issuance, retention or vesting of each stock award may be subject to such
performance criteria and level of achievement versus these criteria as the
Administrator determines, which criteria may be based on financial performance,
personal performance evaluations or completion of service by the
participant. Unless otherwise provided for by the Administrator, upon
the participant’s termination of employment other than due to death or
retirement, the unvested portions of the stock award and the shares of our
common stock subject thereto will generally be forfeited. Unless
otherwise provided for by the Administrator, if a participant’s termination of
employment is due to death or retirement, all outstanding stock awards will
continue to vest provided certain conditions to be determined are
met. Unless otherwise provided for by the Administrator, if a
participant’s termination of employment is due to his death, a portion of each
outstanding stock award granted to such participant will immediately vest and
all forfeiture provisions and repurchase rights will lapse as to a prorated
number of shares of common stock determined by dividing the number of whole
months since the grant date by the number of whole months between the grant date
and the date that the stock award would have fully vested.
The
Administrator may grant stock appreciation rights either alone or in conjunction
with other awards. The Administrator will determine the number of
shares of common stock to be subject to each award of stock appreciation
rights. The award of stock appreciation rights will not be
exercisable for at least six months after the date of grant except as the
Administrator may otherwise determine in the event of death, disability,
retirement or voluntary termination of employment of the
participant. Except as otherwise provided by the Administrator, the
award of stock appreciation rights will not be exercisable unless the person
exercising the award of stock appreciation rights has been at all times during
the period beginning with the date of the grant thereof and ending on the date
of such exercise, employed by or otherwise performing services for us or one of
our subsidiaries.
In the
event there is a change in control of the Company, as determined by our board,
our board may, in its discretion: (i) provide for the assumption or
substitution of, or adjustment to, each outstanding award; (ii) accelerate
the vesting of awards and terminate any restrictions on cash awards or stock
awards; and (iii) provide for the cancellation of awards for a cash payment
to the participant.
Retirement
Benefits
We
adopted a 401(k) plan for FutureFuel Chemical Company which is generally
available to all of its employees.
Our
executive officers who are not officers of FutureFuel Corp. participate in
employee welfare plans (life insurance, medical insurance, disability insurance,
vacation pay and the like) maintained by FutureFuel Chemical Company for all of
its employees. We do not provide life insurance or other employee
benefits for our executive officers who have been elected to officer positions
with both FutureFuel Corp. and FutureFuel Chemical Company.
The
Remuneration Committee
Our
remuneration committee currently consists of Mr. Bedell, Mr. Knowlton and Mr.
Levy. Each of these individuals is an “independent director” under
the rules of the New York Stock Exchange, a “Non-Employee Director” within the
meaning of Section 16 of the Exchange Act, and an “outside director” within the
meaning of §162(m) of the Internal Revenue Code of 1986, as
amended.
Summary
Compensation Table
Our
executive officers were paid the following compensation for the three-year
period ended December 31, 2008.
Summary
Compensation Table
Person
|
Year
|
Salary
|
Bonus
(e)
|
Stock
Awards (d)
|
Option
Awards (g)
|
All
Other
Compensation
(b)
|
Total
|
Paul
A. Novelly(c)
Executive
chairman
FutureFuel
Corp.
|
2008
2007
2006
|
$ 0
$ 0
$ 0
|
$ 0
$
100,000
$ 0
|
$ 0
$ 0
$ 0
|
$
175,000
$ 0
$ 0
|
$ 25,000
$ 25,000
$
0
|
$ 200,000
$ 125,000
$
0
|
Lee
E. Mikles(c)
Chief
executive officer
FutureFuel
Corp.
|
2008
2007
2006
|
$ 0
$ 0
$ 0
|
$ 0
$ 0
$ 0
|
$ 0
$ 0
$ 0
|
$ 25,250
$ 0
$ 0
|
$ 25,000
$ 25,000
$
0
|
$ 50,250
$ 25,000
$
0
|
Paul
G. Lorenzini(c)
Chief
operating officer
FutureFuel
Corp.
|
2008
2007
2006
|
$ 0
$ 0
n/a
|
$ 100,000
$ 100,000
n/a
|
$ 0
$ 0
n/a
|
$ 211,500
$ 0
n/a
|
$ 25,000
$ 25,000
n/a
|
$ 336,500
$ 125,000
n/a
|
Douglas
D. Hommert(c)
Executive
vice president, secretary and treasurer, FutureFuel Corp.
|
2008
2007
2006
|
$ 0
$ 0
$ 0
|
$
0
$
0
$
0
|
$ 0
$ 0
$ 0
|
$ 0
$ 0
$ 0
|
$
0
$
0
$
0
|
$
0
$
0
$
0
|
Benjamin
Ladd(a)
Chief
financial officer, FutureFuel Chemical Company
|
2008
2007
2006
|
$ 163,943
$ 147,117
$ 23,750
|
$ 74,788
$ 27,885
$ 40,000
|
$
525
$ 0
$ 0
|
$ 23,900
$ 0
$ 0
|
$ 11,586
$ 99,547
$
0
|
$ 274,742
$ 274,549
$ 63,750
|
David
Baker(a)
Vice
president - operations support, FutureFuel Chemical
Company
|
2008
2007
2006
|
$ 170,957
$ 170,005
$ 140,618
|
$ 75,173
$ 28,270
$ 64,044
|
$
525
$ 0
$ 0
|
$ 0
$ 0
$ 0
|
$ 14,266
$ 24,634
$ 28,389
|
$ 260,921
$ 222,909
$ 233,051
|
Gary
Hess(a)
Vice
president - sales and marketing, FutureFuel Chemical
Company
|
2008
2007
2006
|
$ 170,623
$ 170,000
$ 125,984
|
$ 75,173
$ 18,268
$ 41,500
|
$
525
$ 0
$ 0
|
$ 20,250
$ 0
$ 0
|
$ 14,633
$ 11,359
$ 20,531
|
$ 281,203
$ 199,628
$ 188,015
|
Samuel
Dortch(a)(f)
Vice
president, operations, FutureFuel Chemical Company
|
2008
2007
2006
|
$ 176,298
$ 145,000
n/a
|
$ 74,692
$ 27,788
n/a
|
$
525
|
$ 0
$ 0
n/a
|
$ 20,381
$ 9,689
n/a
|
$ 271,896
$ 182,477
n/a
|
__________
(a)
|
Executive
officers of FutureFuel Chemical Company for the years
indicated. Prior to November 1, 2006, Messrs. Powell,
Baker, Hess and Dortch were employed by Eastman Chemical
Company. Prior to November 1, 2006, Mr. Ladd was employed
by St. Albans Global Management, Limited Partnership, LLLP, an affiliate
of Mr. Novelly. For 2006, the table includes both amounts paid
by FutureFuel Chemical Company as well as by Eastman Chemical Company, if
applicable.
|
(b)
|
For
Messrs. Novelly, Mikles and Lorenzini, includes $25,000 in directors fees
for 2008 and 2007 as described below. Includes our
contributions (including accrued contributions) to vested and unvested
defined contribution plans and the dollar value of any insurance premiums
paid by, or on behalf of, us during or for the covered fiscal year with
respect to life and disability insurance for the benefit of the named
person. 2006 also includes the following payments by Eastman
Chemical Company to or for the benefit of the named individual: special
pay makeup, employee recognition, personal umbrella, non-qualified stock
options to purchase stock of Eastman Chemical Company, pay-in-lieu of
vacation, stock awards to purchase stock of Eastman Chemical Company, and
lump sum payment. 2007 includes a separation allowance of
$55,769 and vacation cash-out of $7,212 for Mr. Powell, a relocation
allowance of $13,077 for Mr. Baker, and nondeductible moving expenses
(grossed up) of $78,746 and deductible moving expenses (not grossed up) of
$11,123 for Mr. Ladd. 2008 includes $6,003 of moving expenses
for Mr. Dortch, exclusive of $14,686 in deductible moving expenses paid
directly to movers. The above amounts do not include travel
expenses reimbursed pursuant to company
policy.
|
(c)
|
Our
executive officers for the years indicated. For the year 2006,
we did not pay Messrs. Novelly, Mikles or Hommert any form of
compensation. See the discussion above. However, we
did reimburse them for
|
|
certain
ordinary and necessary business expenses that they incurred in connection
with our business. We reimbursed an affiliate of Mr. Mikles
$100,000 in 2008 and 2007 as set forth above for expenses incurred by such
affiliate in 2008 and 2007 in connection with Mr. Mikles performing
services for us and FutureFuel Chemical Company in 2008 and
2007. We reimbursed an affiliate of Mr. Novelly $100,000 in
2008 as set forth above for expenses incurred by such affiliate in 2008 in
connection with Mr. Novelly performing services for us and FutureFuel
Chemical Company in 2008.
|
(d)
|
Calculated
at the number of shares awarded multiplied by the average between the high
and low trade prices of shares of our common stock on the OTCBB on the
date of the award.
|
(e)
|
2007
amounts were earned in 2007 but paid in
2008.
|
(f)
|
Mr.
Dortch did not become an officer of FutureFuel Chemical Company until
2007.
|
(g)
|
Calculated
at the number of options exercised multiplied by the average between the
high and low trade prices of shares of our common stock on the OTCBB on
the date of the exercise.
|
None of
the above-named persons is a party to an employment agreement or employment
arrangement with us or with FutureFuel Chemical Company.
Grants
of Plan-Based Awards
We
adopted the Incentive Plan but did not make any awards thereunder until
2008. In April 2008, we granted a total of 55,000 stock options to
selected members of our management. An additional 5,000 management
options were issued in September 2008. The options awarded in April
2008 had an exercise price equal to the average of the bid and ask price of our
common stock on the date of grant as established in private sales, which our
board of directors determined to be the fair market value of such stock on that
date. The management options awarded in September 2008 had an
exercise price equal to the closing price of our common stock on the date of
grant as quoted on the OTCBB. Originally, one-third of the management
options granted in April 2008 vested on each of the annual anniversary dates of
the grant. Our compensation committee determined that it was in our
best interests if those options were to vest
immediately. Accordingly, those management options were amended in
September 2008 to provide for immediate vesting. The management
options issued in September 2008 vested immediately upon grant. The
management options awarded in April 2008 expire on April 7,
2013. The management options awarded in September 2008 expire on
September 30, 2013. On December 3, 2008, we awarded an
aggregate of 39,800 shares of our common stock to employees of FutureFuel
Chemical Company. These shares vested upon grant.
The
following tables set forth certain information regarding the awards to our
executive officers and certain officers of FutureFuel Chemical Company of
options and shares of our common stock under the Incentive Plan.
Grants
of Plan-Based Awards
|
|
Estimated
Future Payout Under
Equity
Incentive Plan Awards
|
|
|
|
|
Name
|
Grant
Date
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
All
Other
Option
Awards:
Number
of
Shares
of
Stock
or
Units
(#)
|
All
Other
Option
Awards:
Number
of
Securities
Underlying
Options(#)
|
Exercise
or
Base
Price
of
Option
Awards
($/Sh)
|
Grant
Date
Fair Value of
Stock
and Option Awards
|
Paul
A. Novelly
Executive
chairman
FutureFuel
Corp.
|
04/07/08
12/10/08
|
100,000
100,000
|
100,000
100,000
|
100,000
100,000
|
0
|
0
|
$4.00
$5.65
|
$4.00
$5.65
|
Lee
E. Mikles
Chief
executive officer
FutureFuel
Corp.
|
04/07/08
|
10,000
|
10,000
|
10,000
|
0
|
0
|
$4.00
|
$4.00
|
Paul
G. Lorenzini
Chief
operating officer
FutureFuel
Corp.
|
04/07/08
|
100,000
|
100,000
|
100,000
|
0
|
0
|
$4.00
|
$4.00
|
Douglas
D. Hommert
Executive
vice president,
secretary
and treasurer, and
principal
financial officer,
FutureFuel
Corp.
|
n/a
|
n/a
|
n/a
|
n/a
|
0
|
0
|
n/a
|
n/a
|
Benjamin
Ladd
Chief
financial officer,
FutureFuel
Chemical Company
|
04/07/08
12/03/08
|
10,000
100
|
10,000
100
|
10,000
100
|
0
|
0
|
$4.00
n/a
|
$4.00
$5.65
|
David
Baker
Vice
president - operations
support,
FutureFuel Chemical
Company
|
04/0708
12/03/08
|
10,000
100
|
10,000
100
|
10,000
100
|
0
|
0
|
$4.00
n/a
|
$4.00
$5.65
|
Gary
Hess
Vice
president - sales and
marketing,
FutureFuel
Chemical
Company
|
04/07/08
12/03/08
|
10,000
100
|
10,000
100
|
10,000
100
|
0
|
0
|
$4.00
n/a
|
$4.00
$5.65
|
Samuel
Dortch
Vice
president, operations,
FutureFuel
Chemical Company
|
04/07/08
12/03/08
|
10,000
100
|
10,000
100
|
10,000
100
|
0
|
0
|
$4.00
n/a
|
$4.00
$5.65
|
Outstanding
Equity Awards at Fiscal Year End
|
Option
Awards
|
Stock
Awards
|
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (3)
Unexercisable
|
Equity
Incentive
Plan
Awards: Number of Securities Unexercised Unearned Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration Date
|
Number
of Shares or
Units
of Stock That Have
Not
Vested
(#)
|
Market
Value
of
Shares or Units of Stock That Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards: Number of Unearned Shares, Units
or
Other
Rights
That Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards: Market or Payout Value
of
Unearned Shares, Units
or
Other
Rights
That Have Not
Vested
($)
|
Paul
A. Novelly
|
0
|
0
|
0
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
Lee
E. Mikles
|
0
|
0
|
0
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
Paul
G. Lorenzini
|
0
|
0
|
0
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
Douglas
D. Hommert
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
Benjamin
Ladd
|
0
|
0
|
0
|
n/a
|
n/a
|
0
|
0
|
0
|
0
|
David
Baker
|
10,000
|
0
|
0
|
$4.00
|
04/07/13
|
0
|
0
|
0
|
0
|
Gary
Hess
|
0
|
0
|
0
|
n/a
|
n/a
|
0
|
0
|
0
|
0
|
Sam
Dortch
|
10,000
|
0
|
0
|
$4.00
|
04/07/13
|
0
|
0
|
0
|
0
|
Option
Exercises and Stock Vested
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
|
|
Value
Realized
on
Exercise
($)
(a)
|
|
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
|
|
Value
Realized
on
Vesting
($)
(b)
|
|
Paul
A. Novelly
|
|
|
100,000 |
|
|
$ |
175,000 |
|
|
|
n/a |
|
|
|
n/a |
|
Lee
E. Mikles
|
|
|
10,000 |
|
|
$ |
25,000 |
|
|
|
n/a |
|
|
|
n/a |
|
Paul
G. Lorenzini
|
|
|
100,000 |
|
|
$ |
212,000 |
|
|
|
n/a |
|
|
|
n/a |
|
Douglas
D. Hommert
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
Benjamin
Ladd
|
|
|
10,000 |
|
|
$ |
23,900 |
|
|
|
100 |
|
|
$ |
565 |
|
David
Baker
|
|
|
n/a |
|
|
|
n/a |
|
|
|
100 |
|
|
$ |
565 |
|
Gary
Hess
|
|
|
10,000 |
|
|
$ |
20,300 |
|
|
|
100 |
|
|
$ |
565 |
|
Sam
Dortch
|
|
|
n/a |
|
|
|
n/a |
|
|
|
100 |
|
|
$ |
565 |
|
__________
(a)
|
Calculated
as the number of options exercised multiplied by the average between the
high and low trade price of our common stock as quoted on the OTCBB on the
exercise date, minus the option exercise
price.
|
(b)
|
Calculated
as the number of shares of our common stock awarded multiplied by the
average between the high and low trade price of our common stock as quoted
on the OTCBB on the award date.
|
Compensation
of Directors
We have
determined to pay to each of our directors $25,000 for services provided as
director in 2008. The $25,000 was determined by Mr. Novelly as a
reasonable amount and was recommended to the remuneration committee and our
board, who approved such payments. No directors fees have been
determined for 2009 or thereafter, but rather will be set towards the end of our
fiscal year.
We
adopted the Incentive Plan but did not make any awards thereunder until
2008. In April 2008, we granted a total of 250,000 stock options to
members of our board of directors. An additional 100,000 director
options were granted on December 10, 2008. The options awarded
in April 2008 had an exercise price equal to the average of the bid and ask
price of our common stock on the date of grant as established in private sales,
which our board of directors determined to be the fair market value of such
stock on that date. The director options awarded in December 2008 had
an exercise price equal to the closing price of our common stock on the date of
grant as quoted on the OTCBB. The director options vested immediately
upon grant. The director options awarded in April 2008 expire on
April 7, 2013. The director options awarded in December 2008
expire on December 10, 2013.
The
following is the compensation our directors earned for 2008.
Director
|
|
Fees
Earned
or
Paid
in
Cash
|
|
|
Stock
Awards
|
|
|
Option
Awards
(a)
|
|
|
Non-
Equity
Incentive
Plan
Compensa-
tion
|
|
|
Change
in Pension
Value
and
Non-
Qualified
Deferred Compensa-
tion
Earnings
|
|
|
All
Other
Compensa-
tion
|
|
|
Total
|
|
Paul
A. Novelly
|
|
$ |
25,000 |
|
|
$ |
0 |
|
|
$ |
341,450 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
366,450 |
|
Lee
E. Mikles
|
|
$ |
25,000 |
|
|
$ |
0 |
|
|
$ |
12,797 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
37,797 |
|
Edwin
A. Levy
|
|
$ |
25,000 |
|
|
$ |
0 |
|
|
$ |
12,797 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
37,797 |
|
Thomas
R. Evans
|
|
$ |
25,000 |
|
|
$ |
0 |
|
|
$ |
12,797 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
37,797 |
|
Richard
L. Knowlton
|
|
$ |
25,000 |
|
|
$ |
0 |
|
|
$ |
12,797 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
37,797 |
|
Paul
G. Lorenzini
|
|
$ |
25,000 |
|
|
$ |
0 |
|
|
$ |
127,967 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
152,967 |
|
William
J. Doré
|
|
$ |
25,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
__________
(a)
|
The
amounts reported represent the grant date fair value of options vested in
2008 and recognized as expense in our financial statements in 2008,
measured in accordance with Financial Accounting Standards Board Statement
of Financial Accounting Standards No. 123 (revised 2004) Shares Based
Payments.
|
Messrs.
Novelly, Mikles and Lorenzini also received compensation as executive
officers. See the discussion above.
Compensation
Committee Interlocks and Insider Participation.
The
members of our remuneration committee between January 1, 2008 and
April 25, 2008 were Mr. Levy, Mr. Knowlton and Mr. Lorenzini and the
committee was chaired by Mr. Levy. The members of our remuneration
committee between April 25, 2008 and December 31, 2008 were Mr. Bedell, Mr.
Knowlton and Mr. Levy and the committee was chaired by Mr.
Bedell. None of such individuals other than Mr. Lorenzini are or have
been an officer or employee of the Company. On April 21, 2008,
Mr. Lorenzini became our chief operating officer. Prior to that time
Mr. Lorenzini was neither an officer nor an employee of the
Company.
Mr.
Novelly, our executive chairman of the board, and Mr. Mikles, our chief
executive officer and one of our directors, are both directors of Boss Holdings,
Inc. Mr. Novelly is a member of Boss Holdings, Inc.’s compensation
committee and Mr. Mikles is a member of its audit committee. Mr.
Novelly, Mr. Levy (one of our directors and a member of our remuneration
committee), and Mr. Bedell (one of our directors and a member of our
remuneration committee) are directors of World Point Terminal Inc.; World Point
Terminal Inc. does not have a separate compensation committee.
Compensation
Committee Report.
The
remuneration committee of our board has reviewed and discussed the Compensation
Discussion and Analysis set forth above with our management. Based on
this review and discussions, the remuneration committee recommended to our board
of directors that the Compensation Discussion and Analysis be included in this
Proxy Statement.
Donald C.
Bedell, Richard L. Knowlton and Edwin A. Levy
Transactions
with Related Persons.
Sales of Products
From time
to time, FutureFuel Chemical Company may sell to Apex Oil Company, Inc. and/or
its affiliates biodiesel produced by FutureFuel Chemical Company, and Apex Oil
Company, Inc. and/or its affiliates may sell to FutureFuel Chemical Company
diesel fuel, gasoline and other petroleum products and natural gas for use in
FutureFuel Chemical Company’s business. Such sales will be at then
posted prices for comparable products plus or minus applicable geographical
differentials.
Lease of Centrifuge
FutureFuel
Chemical Company has executed an agreement with South Riding Point Holding, Ltd.
to lease a centrifuge for a four-month term at a lease rate of $750 per
day. This lease will commence upon delivery and installation of the
centrifuge, which is expected to occur in May 2009. South Riding
Point Holding, Ltd. is a wholly-owned subsidiary of World Point Terminals Inc.,
an affiliate of Mr. Novelly.
Review,
Approval or Ratification of Transactions with Related Persons.
Any
transaction in which we (or one of our subsidiaries) are a participant, the
amount involved exceeds the lesser of $120,000 or 5% of our net income, total
assets or total capital, and in which any party related to us has or will have a
direct or indirect material interest must be approved by a majority of the
disinterested members of our Board as fair to us and our
shareholders. This policy was adopted by our Board on January 8,
2007 and can be found at our internet website at http://ir.futurefuelcorporation.com/governance.cfm. A
copy will also be provided free of charge pursuant to written request to our
corporate secretary.
In
addition, we adopted a Code of Ethics and Business Conduct which sets forth
legal and ethical standards of conduct for our directors, officers and employees
and the directors, officers and employees of our subsidiaries, including
FutureFuel Chemical Company. This Code is designed to deter
wrongdoing and to promote: (i) honest and ethical conduct, including the
ethical handling of actual or apparent conflicts of interest between personal
and professional relationships; (ii) full, fair, accurate, timely and
understandable disclosure in reports and documents that we file with, or submit
to, the SEC and in other public communications made by us; (iii) compliance
with applicable governmental laws, rules and regulations; (iv) the prompt
internal reporting of violations of this Code to appropriate persons identified
in this Code; and (v) accountability for adherence to this
Code. This Code was adopted by our Board on November 30, 2005,
is in writing and can be found through the “Investor Relations - Corporate
Governance” section of our internet web site at http://ir.futurefuelcorporation.com/governance.cfm. A
copy also will be provided free of charge pursuant to written request to our
corporate secretary.
Each of
the transactions described above (under the caption “Transactions with Related
Persons”) was undertaken in compliance with our Code of Ethics and Business
Conduct and approved by a majority of the disinterested members of our
Board.
Shareholder
Communications.
Any
shareholder who wishes to contact the Board or any individual director serving
on the Board may do so by written communication mailed to: Board (Attention:
Name of Director(s), if appropriate), Corporate Secretary, FutureFuel Corp.,
8235 Forsyth Blvd., 4th Floor,
Clayton, Missouri 63105. Any proper communication received will be
processed by our corporate secretary as agent for the Board. A copy
of the communication will be promptly forwarded to each member of the Board or,
if appropriate, to the member(s) of the Board named in the
communication. The original shareholder communication will be
maintained on file in our corporate secretary’s office and made readily
available to any director who should wish to review it.
Shareholder
Proposals for the Next Annual Meeting.
Any
shareholder desiring to make a proposal to be acted upon at the 2010 Annual
Meeting of our shareholders must present such proposal to us at our principal
office set forth above by January 15, 2010 for the proposal to be
considered for inclusion in our proxy statement for that Annual
Meeting.
In
addition to any other applicable requirements, for business properly to be
brought before an annual meeting by a shareholder, our bylaws provide that the
shareholder must have given timely notice thereof in proper written form to our
corporate secretary. To be timely, a shareholder’s notice must be
delivered to or mailed and received at our principal office not less than 30
days nor more than 60 days prior to the annual meeting; provided, however, that
in the event that less than 40 days’ notice or prior public disclosure of the
date of the annual meeting is given or made to shareholders, notice by the
shareholder to be timely must be received not later than the close of business
on the tenth day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made. To be
in proper written form, a shareholder’s notice to our corporate secretary must
set forth in writing as to each matter the shareholder proposes to bring before
the annual meeting: (i) a brief description of the
business
desired to be brought before the annual meeting and the reason for conducting
such business at the annual meeting; (ii) the name and address, as they
appear on our books, of the shareholder proposing such business; (iii) the
class and number of shares of our stock which are beneficially owned by the
shareholder; and (iv) any material interest of the shareholder in such
business.
Shareholder
nominations for director must comply with the notice and informational
requirements described above for other shareholder proposals, as well as
additional information that would be required under applicable SEC proxy rules
and the policies of the nominating committee of our Board, particularly
appendices A, B and C of the Nominating Committee Charter. A
copy of our Nominating Committee Charter may be found on our internet web site
at http://ir.futurefuelcorporation.com/governance.cfm. In
addition, a copy may be obtained free of charge through a written request to us
at our principal office set forth above, attention corporate
secretary.
Financial
Information - Annual Report.
Our
Annual Report for the year ended December 31, 2008 is included
herewith. We will provide without charge additional copies of our
Annual Report upon written request. Requests and related inquiries
should be directed to Corporate Secretary, FutureFuel Corp., 8235 Forsyth Blvd.,
4th
Floor, Clayton, Missouri 63105.
Other
Business.
The Board
knows of no other matter to come before the Annual Meeting. However,
if any other matter requiring a vote of the shareholders arises, it is the
intention of the persons named in the accompanying shareholder proxy to vote
such proxy in accordance with their best judgment.
|
|
|
By
Order of the Board of Directors
|
|
![](hommert_sig.jpg) |
|
Secretary
|
May 29
2009