DEF 14A of FutureFuel Corp., Aug 12, 2024

DEF 14A of FutureFuel Corp.

Filed Aug 12, 2024 · FY20230001437749-24-025947

Open on EDGAR

  1. PROPOSAL ONE - ELECTION OF DIRECTORS

    PROPOSAL ONE - ELECTION OF DIRECTORS Our board has nominated two persons for election to our board at the Annual Meeting: Dale E. Cole and G. Bruce Greer. Dale E. Cole has served on our board since 2015 and is a graduate of the University of Texas at Austin with an undergraduate degree in business and finance and the Graduate School of Banking at Louisiana State University. Mr. Cole’s career in banking began in 1974 with Texas Bank and Trust Company in Dallas, TX. He then worked with First National Bank in Marshal, TX, and became President of Banc Texas McKinney in McKinney, TX in 1983. In 1988, Mr. Cole became Chairman and CEO of Worthen Banking Corporation, with two banks in Batesville and Newark, AR. Mr. Cole founded First Community Bank in 1997. He currently serves as Chairman and CEO of First Community Bank and its holding company. Mr. Cole previously served on the Board of Trustees of the Barret School of Banking in Memphis, TN, the Board of Visitors of the University of Arkansas Community College in Batesville, AR, the Board of the Chamber of Commerce, Economic Development Foundation in Batesville, AR, Lyon College Advisory Counsel, and the board of White River Medical Center in Batesville, AR. Mr. Cole previously served on the board of Lyon College in Batesville. As of December 31, 2023, First Community Bank had 33 branch locations in Northeast Arkansas and Southwest Missouri and maintained assets of over $2.4 billion. Mr. Cole’s extensive career in banking built in him a strong foundation in business, regulatory environments, and corporate governance. Having served on numerous committees throughout his career, including compensation, trust, executive, asset/liability, investment, and many others, Mr. Cole’s well-rounded experience and exposure in banking and regulatory environments will strengthen the governance function of our board. Additionally, Mr. Cole’s service and experience as chairman for other boards, including active involvement in strategic planning for those companies, strengthens the governance and functioning of our board. G. Bruce Greer has served on our board since March 2024. Mr. Greer has served as President of GBGJR Advisors, an advisory firm providing strategic advice to chemical companies, private equity firms and consulting firms, since April 2017. Mr. Greer served as Vice President of Strategic Planning and IT at Olin Corporation (“Olin”) for 12 years. Prior to joining Olin, Mr. Greer spent nine years as a Vice President of Solutia, a public company spin off of The Monsanto Company, heading R&D, Commercial and Corporate Development, Strategy, M&A and running several businesses and was President of Pharma Services, and four years as a Vice President of Gemini Consulting and Services in Europe and the US, a global consulting firm with a focus on chemicals. He was a Vice President/Senior Director of Monsanto, working for the Chairman and at G D Searle. Mr. Greer was Chairman of the Board of Directors of Flexsys America L.P. Mr. Greer spent a year as a Senior Associate at Arthur Andersen LLP where his work focused on cost accounting and chemicals. He was an Assistant Professor at Northwestern University from 1988 through 1991 and served in the U.S. Navy. Our board believes that Mr. Greer’s extensive managerial and leadership experience in the chemical industry add significant value to our board. Under our certificate of incorporation, our directors are divided into three classes, serving staggered three-year terms. Mr. Cole is standing for re-election. Mr. Greer was appointed as a Class C director to fill a vacancy in March 2024. Each nominee has agreed, if elected at the Annual Meeting, to serve as a Class C member of our board for a three-year term expiring in 2027, subject in each case to his earlier resignation, removal or death. Paul A. Novelly is a Class C member of our board whose term expires in 2024. Our board has determined not to nominate Mr. Novelly for re-election as our board anticipates reducing the size of the board to eight directors as of the Annual Meeting. In recognition of long and distinguished service to the Company as its Chief Executive Officer and Chairman, the board intends to designate and bestow upon Mr. Novelly, the honorary title of Chairman Emeritus. As Chairman Emeritus, Mr. Novelly will provide advice and counsel as requested by the board or the Chief Executive Officer. Mr. Novelly, as Chairman Emeritus, will not be entitled to compensation or deemed to be an officer, employee or agent of the Company or a member of the board. The persons named as attorneys-in-fact in the shareholder proxy card electronically available at www.investorvote.com/FF will vote for the election of the nominees listed above as directors, unless authority to so vote is withheld. Although our board expects that the nominees will be available for election, in the event a vacancy in the slate of nominees occurs, 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. The names 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.

  2. Nominees for Election as a Class C Director for a Three-Year Term Expiring in 2027

    Nominees for Election as a Class C Director for a Three-Year Term Expiring in 2027

  3. Nominees for Election as a Class C Director for a Three-Year Term Expiring in 2027

    | Name, Age, and Positions with the Company | Director of the Company Since | | Dale E. Cole, 74; Director | 2015 | | G. Bruce Greer, 63; Director | 2024 |

  4. Continuing Directors

    Continuing Directors

  5. Continuing Directors

    | Name, Age, and Positions with the Company | Class | Term Expiring | Director of the Company Since | | Donald C. Bedell, 81. Mr. Bedell has been a member of our board since February 26, 2008. | A | 2025 | 2008 | | Terrance C.Z. Egger, 65. Mr. Egger has been a member of our board since August 27, 2015. | A | 2025 | 2015 | | Ronald J. Kruszewski, 65. Mr. Kruszewski has been a member of our board since July 8, 2022. | A | 2025 | 2022 | | Paul M. Manheim, 74. Mr. Manheim has been member of our board since July 15, 2011. | B | 2026 | 2011 | | Paul A. Novelly, II, 56. Mr. Novelly has been a member of our board since July 8, 2022. | B | 2026 | 2022 |

  6. Continuing Directors

    OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH OF THE NOMINEES FOR ELECTION AS DIRECTOR.

  7. PROPOSAL TWO - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    Mr. Greer was appointed to the Board of Directors as of March 12, 2024, to fill a vacancy upon the resignation of Alain Louvel. 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. Identification of Executive Officers. The current executive officers of the Company are as follows:

  8. PROPOSAL TWO - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    There is no other 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. Family Relationships. Paul A. Novelly, II is the son of Paul A. Novelly, chairman of our board. There are no other family relationship between any of our executive officers and directors. Business Experience of Our Directors and Executive Officers. Paul A. Novelly has been our chairman of the board since 2005. Mr. Novelly recently retired as 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. Mr. Novelly recently retired as a director and the chairman of World Point Terminals, Inc., a Delaware company based in Missouri that, through its operating subsidiaries, owns and operates petroleum storage facilities in the United States, and formerly served as chief executive officer of St. Albans Global Management, LLC, which provided corporate management services. In the past seven years, Mr. Novelly was a director of WPT GP, LLC, a wholly owned subsidiary of World Point Terminals, Inc. and general partner of World Point Terminals, LP. World Point Terminals, LP was a publicly traded master limited partnership listed on the New York Stock Exchange until July 2017. Mr. Novelly has also served on the board of directors at FC Financial Holdings, Inc., a holding company whose material subsidiary was Florida Community Bank. Mr. Novelly previously served on the board of directors of Boss Holdings, Inc., a distributor of work gloves, boots and rainwear, and other consumer products, and World Point Terminals, Inc., a Canadian and Toronto Stock Exchange company and the predecessor of World Point Terminals, Inc. Our board has determined not to nominate Mr. Novelly for re-election as our board anticipates reducing the size of the board to eight directors as of the Annual Meeting. In recognition of long and distinguished service to the Company as its Chief Executive Officer and Chairman, the board intends to designate and bestow upon Mr. Novelly, the honorary title of Chairman Emeritus. Donald C. Bedell has been a member of our board since 2008 and Vice Chairman of the board since December 2023. 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, health care, pharmaceutical, hospice, and therapy facilities throughout Missouri and other states. Mr. Bedell is a director of 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., a Delaware company based in Missouri that, through its operating subsidiaries, owns and operates petroleum storage facilities in the United States. Our board believes that Mr. Bedell’s experience, knowledge, skills, and expertise acquired as the chairman at Castle Partners, including experience and understanding of business strategy formation and execution from both a board and management perspective, add significant value to our board. Additionally, Mr. Bedell’s service and experience as a director for other boards, including active involvement in strategic planning for those companies, strengthens the governance and functioning of our board. Paul M. Manheim has served on our board since 2011. Mr. Manheim is currently a non-executive director of HAL Real Estate Inc., which develops and owns a portfolio of real estate in the Pacific Northwest consisting of multi-family, office, and mixed-use assets. He was the president and chief executive officer of HAL Real Estate Inc. until September 2005. HAL Real Estate Inc. is a subsidiary of HAL Holding N.V. Mr. Manheim joined Holland America Line, N.V., the predecessor of HAL Holding N.V., an international holding company traded on the Amsterdam Stock Exchange, in 1982 and filled various positions in the financial and corporate development areas. June 2005 to 2014, Mr. Manheim was the chairman of the board of Shanghai Red Star Optical Company, which owned a portfolio of optical retail outlets in China and was affiliated with Europe’s largest optical retailer. Mr. Manheim has served as a director and chairman of the audit committee of World Point Terminals, Inc. and its predecessor since 2009. He is also a director of World Point Terminals, Inc., a Delaware company based in Missouri that, through its operating subsidiaries, owns and operates petroleum storage facilities in the United States. Mr. Manheim received a bachelor of commerce degree with honors from the University of New South Wales, Australia, and qualified as a Chartered Accountant in 1976. Our board believes that Mr. Manheim’s experience, knowledge, skills, and expertise acquired as the president and chief executive officer at HAL Real Estate Inc., including experience and understanding of business strategy formation and execution from both a board and management perspective, add significant value to our board. Additionally, Mr. Manheim’s service and experience as a director for other boards, strengthens the governance and functioning of our board. Finally, Mr. Manheim’s experience as the chairman of the audit committee of WPT GP, LLC and his experience as a chartered accountant add significant value to our board. Dale E. Cole has served on our board since 2015 and is a graduate of the University of Texas at Austin with an undergraduate degree in business and finance and the Graduate School of Banking at Louisiana State University. Mr. Cole’s career in banking began in 1974 with Texas Bank and Trust Company in Dallas, TX. He then worked with First National Bank in Marshal, TX, and became President of Banc Texas McKinney in McKinney, TX in 1983. In 1988, Mr. Cole became Chairman and CEO of Worthen Banking Corporation, with two banks in Batesville and Newark, AR. Mr. Cole founded First Community Bank in 1997. He currently serves as Chairman and CEO of First Community Bank and its holding company. Mr. Cole previously served on the Board of Trustees of the Barret School of Banking in Memphis, TN, the Board of Visitors of the University of Arkansas Community College in Batesville, AR, the Board of the Chamber of Commerce, Economic Development Foundation in Batesville, AR, Lyon College Advisory Counsel, and the board of White River Medical Center in Batesville, AR. Mr. Cole previously served on the board of Lyon College in Batesville. As of December 31, 2023, First Community Bank had 33 branch locations in Northeast Arkansas and Southwest Missouri and maintained assets of over $2.4 billion. Mr. Cole’s extensive career in banking built in him a strong foundation in business, regulatory environments, and corporate governance. Having served on numerous committees throughout his career, including compensation, trust, executive, asset/liability, investment, and many others, Mr. Cole’s well-rounded experience and exposure in banking and regulatory environments will strengthen the governance function of our board. Additionally, Mr. Cole’s service and experience as chairman for other boards, including active involvement in strategic planning for those companies, strengthens the governance and functioning of our board.

  9. PROPOSAL TWO - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    Terrance C.Z. (Terry) Egger has served on our board since 2015. He retired as the publisher and CEO of Philadelphia Media Network, parent company of the Philadelphia Inquirer, the Philadelphia Daily News and Philly.com, that region’s largest news company, in which capacity he oversaw all operations of the newspaper and its affiliates. Prior to August 2015, Mr. Egger served as president and CEO of the Cleveland 2016 Host Committee, Inc., where he led the successful effort for the City of Cleveland to host the 2016 Republican National Convention. In 2013, Mr. Egger had retired as chairman of The Plain Dealer Publishing Co. in Cleveland, parent company of The Plain Dealer, Ohio’s largest newspaper, where he had served in several executive capacities from 2006. From 1996 to 2006, Mr. Egger was the president and publisher of the St. Louis Post-Dispatch, where he supervised all operations, including its website STLtoday.com and Suburban Journals of Greater St. Louis. Terry started his newspaper career managing marketing and advertising for papers in Los Angeles, California and Tucson, Arizona. Mr. Egger is a member of the Board of Directors of Medical Mutual of Ohio and a member of the Board of Trustees of the Cleveland Clinic Foundation. He has a bachelor’s degree from Augustana College and a master’s degree in speech communication from San Diego State University. Our board believes that Mr. Egger’s experience, knowledge, skills, and expertise, including experience and understanding of business strategy, development, supervision, operations and management add significant value to our board. Additionally, Mr. Egger’s service and experience on other boards, strengthens the governance and functioning of our board. Paul A. Novelly, II has served on our board since July 2022. He serves as the Chief Executive Officer of Apex Holding Co. and its subsidiary Apex Oil Company, Inc., a privately held company based in St. Louis, Missouri, which together with its affiliates is engaged in 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. He has been a registered broker at Stifel, Nicolaus & Co., Inc. since 2005. Mr. Novelly II is the sole manager of SAGM Holdings, LLC, which is the manager of St. Albans Global Management, LLC, a family investment company. He is also the owner and president of St. Albans Construction Company, which serves the needs of the luxury custom home buyers. He also serves as a director of Apex Oil Company Charitable Foundation. Our board believes that Mr. Novelly’s experience, knowledge, skills, and expertise, including experience acquired in management of various companies, and his knowledge of the Company and its business along with his extensive experience as a broker with national securities firms in evaluating public companies and their financial reports, add significant value to our board and the Company. Ronald J. Kruszewski has served on our board since July 2022. He is Chairman of the Board and Chief Executive Officer of Stifel Financial Corp. and its principal subsidiary, Stifel, Nicolaus & Company, Incorporated (together, “Stifel”). He joined Stifel as Chief Executive Officer in 1997 and was named Chairman in 2001. Mr. Kruszewski currently serves as Vice Chair of the Board of Directors of the Securities Industry and Financial Markets Association (SIFMA). He previously served as Chairman of the American Securities Association (ASA) from 2019 through 2021 and on the Federal Advisory Council of the St. Louis Federal Reserve Board of Directors from 2014 through 2019. Additionally, he serves on the Board of Trustees for Saint Louis University and the U.S. Ski and Snowboard Team Foundation. He is a graduate of Indiana University. Active in community affairs, Mr. Kruszewski serves as a member of the Chair’s Council for Greater St. Louis Inc. He is also past Chairman of the Board of Directors of Downtown STL, Inc. and past non-executive Chairman of the Board of Directors of Angelica Corporation. In addition, he is a member of the St. Louis Chapter of the World Presidents’ Organization, and under Mr. Kruszewski’s leadership, Stifel became a member of the World Economic Forum in 2023. In 2019, Mr. Kruszewski won the Horatio Alger Award and was selected for membership in the Horatio Alger Association of Distinguished Americans, which honors individuals who have overcome adversity to achieve success and who have demonstrated commitment to higher education and charitable endeavors. Our board believes that Mr. Kruszewski’s extensive managerial and leadership experience in the financial services industry in addition to a comprehensive understanding and knowledge of public companies’ day-to-day operations and strategy add significant value to our board. G. Bruce Greer has served on our board since March 2024. Mr. Greer has served as President of GBGJR Advisors, an advisory firm providing strategic advice to chemical companies, private equity firms and consulting firms, since April 2017. Mr. Greer served as Vice President of Strategic Planning and IT at Olin Corporation (“Olin”) for 12 years. Prior to joining Olin, Mr. Greer spent nine years as a Vice President of Solutia, a public company spin off of The Monsanto Company, heading R&D, Commercial and Corporate Development, Strategy, M&A and running several businesses and was President of Pharma Services, and four years as a Vice President of Gemini Consulting and Services in Europe and the US, a global consulting firm with a focus on chemicals. He was a Vice President/Senior Director of Monsanto, working for the Chairman and at G D Searle. Mr. Greer was Chairman of the Board of Directors of Flexsys America L.P. Mr. Greer spent a year as a Senior Associate at Arthur Andersen LLP where his work focused on cost accounting and chemicals. He was an Assistant Professor at Northwestern University from 1988 through 1991 and served in the U.S. Navy. Our board believes that Mr. Greer's extensive managerial and leadership experience in the chemical industry add significant value to our board. Tom McKinlay became the Company and FutureFuel Chemical Company’s Chief Executive Officer in July 2022 and Chief Operating Officer in January 2017. Mr. McKinlay is a Chemical Engineer and business operations executive with over 30 years of global experience in the oil and gas industry. He has extensive experience in the oil and gas industry on both sides of the Atlantic. This includes responsibility for large scale refining and trading operations; midstream assets; renewables production and trading; retail; contract negotiation; and mergers and acquisitions. For over two years prior to his hire by the Company, Mr. McKinlay was the owner and president of Gilrita Consulting Limited, a UK based independent downstream consultancy firm. Prior to Gilrita Consulting Limited, he was Executive Vice President of Murphy Oil Corporation for more than three years, a role which latterly incorporated the role of Managing Director of Murco Petroleum Limited, a UK based oil refining company. Mr. McKinlay was employed for approximately six years by Murphy Oil where he became Executive Vice President of Worldwide Downstream Operations. Mr. McKinlay received a bachelor of science in chemical engineering (with honors) from the University of Strathclyde in Glasgow, UK in 1985. Our board believes the experience, knowledge, skills, and expertise Mr. McKinlay acquired in his past roles in operations add significant, strategic value to the Company. Additionally, Mr. McKinlay’s experience with large scale production and trading provides the company with significant understanding in the regional and global biodiesel industry. Mr. McKinlay has informed the Company he will retire effective September 30, 2024.

  10. Compensation Discussion and Analysis

    Compensation Discussion and Analysis The objectives of our compensation program are to provide a competitive compensation package that rewards sustained financial and operating performance that creates long-term value for our shareholders. Our compensation programs are intended to meet the goals of attracting and retaining qualified personnel; motivating these individuals to achieve short-term and long-term corporate goals without undue risk-taking and to promote equity among executive officer positions, while considering external competitiveness and differences in job responsibilities. The elements of our compensation program include base salary, bonuses, and certain retirement, insurance, and other benefits generally available to all employees. In addition, in 2017, our board adopted an omnibus incentive plan which was approved by our shareholders at our 2017 annual meeting on September 7, 2017 (the “Incentive Plan”). The Incentive Plan provides equity-based compensation to our executive officers and our directors. Our compensation committee, and the Company generally, makes decisions with respect to each compensation element paid or payable to our personnel on an individual-by-individual basis and does not necessarily take into account decisions made with respect to other elements of compensation that may be paid to such individual. The overall goal of our compensation program, however, is to achieve the goals described above. Further, we have certain prohibitions on our employees, officers, and directors with respect to hedging and pledging Company securities as described above under the “Hedging and Pledging” heading. Cash Salaries and Bonuses Upon his appointment to Chief Executive Officer, Mr. McKinlay’s base salary was initially unchanged, but in January 2023, the compensation committee adjusted Mr. McKinlay’s annual base salary to $400, retroactive to his date of appointment, with the aggregate amount of the retroactive adjustment paid to Mr. McKinlay in a lump sum in February 2023. The base salary for Mrs. Sparks was increased for 2023, and director fees of $105 were paid to Mrs. Sparks in 2023. Mr. Lyon’s and Mr. Gaither's base salaries were also increased in 2023. For the year 2023, we established a bonus pool for the employees of our subsidiary, FutureFuel Chemical Company. The total bonus target amount was determined by our chief executive officer in consultation with our other executive officers. Eligible FutureFuel Chemical Company employees hired prior to January 1, 2023 received bonuses of approximately 114 hours of pay at their normal hourly rate. Employees hired in 2023 received a prorated or reduced amount based on their length of service. Salaried employees of FutureFuel Chemical Company (other than FutureFuel Chemical Company’s lead management team) received an additional bonus amount ranging from $0 to $9. Bonuses to FutureFuel Chemical Company’s managers other than the lead management team were determined by FutureFuel Chemical Company’s officers. Bonuses in 2023 for Mr. McKinlay, Mrs. Sparks, Mr. Lyon, Mr. Gaither, and other members of lead management of FutureFuel Chemical Company were recommended by our compensation committee in respect of our chief executive officer and by our chief executive officer for all other executive officers, then reviewed and approved by the Compensation Committee of our Board after considering several factors, including our overall financial performance and comparative information regarding the executive pay practices of our competitors. Such bonus distributions were designed to be sufficient compensation for the services rendered, competitive with market rates for similar services, and sufficient to motivate these individuals to aid in our achievement of short-term and long-term corporate goals. We expect to establish an annual cash bonus program commencing in 2024. The total bonus amount will be determined based on annual performance and will be solely on a discretionary basis. In determining actual bonus payouts for such years, we expect the compensation committee will consider performance against Company performance goals to be established by us, as well as individual performance goals. We expect that this annual cash bonus program will apply to certain key employees 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 2017 annual shareholder meeting on September 7, 2017. The purpose of the Incentive Plan is to:

  11. Compensation Discussion and Analysis

    | ● | 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. |

  12. Compensation Discussion and Analysis

    The Incentive Plan authorizes us to issue stock options (including incentive stock options and nonqualified stock options), stock awards, and stock appreciation rights. As of December 31, 2023, 44,000 options for shares of stock and no awards of shares of stock have been made under the Incentive Plan. See Note 17 to our consolidated financial statements in the 2023 Annual Report, for a detailed discussion of 2023 stock based compensation awards. 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 unissued shares. Awards are limited to 10% of the issued and outstanding shares of our common stock in the aggregate, or 4,374,167 shares, as of the date of the adoption of the Incentive Plan. Taking into account the prior grants of stock options and stock awards under the Incentive Plan, 4,310,167 shares are available to be issued under the Incentive Plan as of December 31, 2023. The Incentive Plan is administered by: (i) our board, (ii) a committee of our board appointed for that purpose; or (iii) if no such committee is appointed, our board’s compensation committee (in any case, 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 and will continue 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 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 to eligible participants pursuant to the 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 conditions 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). Neither our management nor our compensation committee, however, has through the year ended December 31, 2023 made any awards that were contingent upon the achievement of specified performance goals or that were otherwise performance-vested. Rather, through 2023, all grants were made in the discretion of our compensation committee based upon their authority under the Incentive Plan. 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 us 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.

  13. Federal Income Tax Consequences of the Incentive Plan

    Federal Income Tax Consequences of the Incentive Plan Upon the exercise of a non-qualified stock option, a participant in the Incentive Plan will realize income in the year of exercise equal to the difference between the exercise price and the value of the shares acquired, and we may deduct an amount equal to the income recognized by the participant, subject to the limits under applicable laws. We will not receive a tax deduction at the time of a grant or exercise of an incentive stock option, and no income is recognized by a participant when an incentive stock option is granted or exercised. When an incentive stock option is exercised, the difference between fair market value at the date of exercise and the exercise price will be an item of adjustment for purposes of calculating the participant's alternative minimum tax for the year of exercise. If the shares of our common stock acquired upon exercise of an incentive stock option are disposed of after the later of two years from the date of option grant or one year after the transfer of the shares to the participant (the “holding period”), any gain or loss upon disposition of the shares will be treated for federal income tax purposes as long-term capital gain or loss, as the case may be. A disposition includes a sale, exchange, gift or other transfer of legal title. In general, a participant’s basis in the shares of our common stock received upon exercise of an incentive option will be the exercise price paid by him or her for the shares. If the option shares are disposed before the expiration of the holding period, all or part of any gain will be characterized as ordinary income depending upon the relative amount of the sale price of the shares as compared with the exercise price of the shares. The amount of ordinary income realized by an employee in a sale or exchange for which a loss would be recognized is limited to the excess of the amount realized on the sale or exchange over the stock’s adjusted basis. Ordinary income received on account of a disposition of shares within the holding period will be taxable as additional compensation, and we may treat that income as a deductible expense for federal income tax purposes. Retirement Benefits We adopted a 401(k) plan for FutureFuel Chemical Company which is generally available to all of its employees. Say-on-Pay At our 2023 annual meeting of shareholders held on September 19, 2023, we submitted a proposal to our shareholders regarding the 2022 compensation awarded to our executive officers (commonly known as a “say-on-pay” vote). Our shareholders approved the proposal. We hold our say-on-pay votes every three years. Our next say-on-pay vote and advisory vote on the frequency of say-on-pay votes (commonly known as “say-when-on-pay” vote) will be held at the 2026 annual meeting of shareholders. The Compensation Committee considers the results of our say-on-pay vote as one factor in evaluating our executive compensation practices. Life Insurance and Other Employee Benefits Our executive officers generally 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. The Compensation Committee Our compensation committee currently consists of Donald C. Bedell (Chair), Dale E. Cole, and Terrance C.Z. Egger. Each of these individuals is an “independent director” under the rules of the NYSE, 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. Recommendations from Management Our chief executive officer makes recommendations to the compensation committee regarding salaries and bonuses for executive officers, as well as awards under the Incentive Plan. The compensation committee takes these recommendations into consideration in approving all such salaries, bonuses, and awards. Summary Compensation Table. Our executive officers were paid the following compensation for the three-year period ended December 31, 2023.

  14. Summary Compensation Table

    Summary Compensation Table

  15. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End

  16. Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | | | | | | Number of | Number of | | | | | | Securities | Securities | Equity | | | | | Underlying | Underlying | Incentive | | | | | Unexercised | Unexercised | Plan Awards: | Option | Option | | | Options | Options | Number of | Exercise | Expiration | | Name | (#) Exercisable | (#)Unexercisable | Options (#) | Price ($) | Date | | Tom McKinlay(a) | 4,000 | 0 | 0 | 11.56 | 1/21/2025 | | Rose M. Sparks(b) | 10,000 | 0 | 0 | 12.07 | 9/27/2024 |

  17. Outstanding Equity Awards at Fiscal Year-End

    (a) In January 2020, we granted 24,000 stock options to Tom McKinlay as our chief operating officer. The options awarded have an exercise price equal to the mean between the highest and lowest quoted sales prices for the Company’s common stock as of the grant date as reported by the New York Stock Exchange. The options awarded vested immediately and expire on January 21, 2025. Please see Note 17 to our consolidated financial statements for a discussion of the Company’s plan-based awards. (b) In September 2019, we granted 10,000 stock options to Rose M. Sparks in connection with her appointment to our board of directors and in her capacity as a board member. The options awarded have an exercise price equal to the mean between the highest and lowest quoted sales price for the Company’s common stock as of the grant date as reported by the New York Stock Exchange. The options awarded vested immediately and expire on September 17, 2024. This same information is reflected in the unexercised options, stock awards, and equity in incentive plan table in the Compensation of Directors table below. See note 17 to our consolidated financial statements for a discussion of the Company’s plan-based awards.

  18. Option Exercises and Stock Vested

    Option Exercises and Stock Vested No options were exercised by our executive officers in 2023. No stock awards vested in 2023. Compensation of Directors. For 2023, our directors received an annual fee of $50, prorated if their service was for less than the full year. Committee heads received an additional $25 (chairman of the board), $20 (audit committee chairman), or $10 (other committee chairmen), on an annual basis, again prorated if serving as committee chairman for less than the full year. The compensation committee also approved the payment to our directors of $5 for each board meeting and $2.5 for each committee meeting, whether attended in person or telephonically. For 2024, the compensation committee reviewed and approved this fee schedule as reasonable and appropriate compensation to our directors and determined to use the same fee structure as 2023. The following is the compensation our directors earned for 2023.

  19. Option Exercises and Stock Vested

    | Director | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Paul A. Novelly | 135 | 0 | 0 | 0 | 0 | 0 | 135 | | Donald C. Bedell | 146 | 0 | 0 | 0 | 0 | 0 | 146 | | Paul M. Manheim | 145 | 0 | 0 | 0 | 0 | 0 | 145 | | Dale E. Cole | 141 | 0 | 0 | 0 | 0 | 0 | 141 | | Terrance C.Z. Egger | 141 | 0 | 0 | 0 | 0 | 0 | 141 | | Alain Louvel | 120 | 0 | 0 | 0 | 0 | 0 | 120 | | P.A. Novelly, II* | 115 | 0 | 0 | 0 | 0 | 0 | 115 | | Ronald J. Kruszewski* | 110 | 0 | 0 | 0 | 0 | 0 | 110 | | Rose Sparks | 105 | 0 | 0 | 0 | 0 | 0 | 105 |

  20. Option Exercises and Stock Vested

    *Director fees were designated to be paid to a charitable organization by P.A. Novelly, II and Ronald J. Kruszewski in the amount of $115 and $20, respectively. The following table sets forth information concerning unexercised options, stock awards that have not vested, and equity incentive plan awards as of December 31, 2023 with respect to our directors.

  21. Option Exercises and Stock Vested

    | | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) 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 ($) | | Rose Sparks | 10,000 | 0 | 0 | 12.07 | 9/17/2024 | 0 | 0 | 0 | 0 | | P.A. Novelly, II | 10,000 | 0 | 0 | 7.18 | 8/1/2027 | 0 | 0 | 0 | 0 | | Ronald Kruszewski | 10,000 | 0 | 0 | 7.18 | 8/1/2027 | 0 | 0 | 0 | 0 |

  22. Option Exercises and Stock Vested

    | (a) In August 2022 and December 2019, we granted a total of 20,000 and 10,000, respectively, stock options to our new board members. The options awarded have an exercise price equal to the mean between the highest and lowest quoted sales prices for the Company’s common stock as of the grant date as reported by the New York Stock Exchange. The options awarded vested immediately and expire on August 1, 2027 and September 17, 2024, respectively. See Note 17 to our consolidated financial statements for a discussion of the company’s plan-based awards. |

  23. Pay Ratio Disclosure

    Pay Ratio Disclosure This section provides the annual ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (‟PEO”). The Company’s PEO is Mr. Tom McKinlay. The purpose of this disclosure is to provide a measure of the equitability of pay within the organization. The Company believes its compensation philosophy and process yield an equitable result. Median total annual compensation of all employees other than our PEO: $70,819 PEO total annual compensation: $675,560 Ratio of PEO to Median Employee Compensation – 9.54 In determining the median employee, a listing was prepared of all full and part-time employees as of December 31, 2023. Employees’ actual gross wages and salaries were used for the full year of 2023. The median amount was selected from the list. For simplicity, the value of the Company’s 401(k) plan and medical benefits provided was excluded. As of December 31, 2023, the Company employed 515 persons of which approximately 341 were in an operations role.

  24. Pay Versus Performance

    Pay Versus Performance Under the recently adopted Item 402(v) of Regulation S-K, we must disclose pay-versus performance information for the most recently completed three fiscal years. The following table sets forth the required pay-versus performance disclosures in the form of the “total compensation” as reported in the Company’s “Summary Compensation Table” for the PEO (current and former) and as an average for the other named executive officers.

  25. Pay Versus Performance

    | | Summary Compensation Table Total for PEO (a) | | Compensation Actually Paid to PEO (a)(c) | | Average | Average | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Paul A. Novelly | Tom McKinlay | Paul A. Novelly | Tom McKinlay | Summary Compensation Table Total for Non-PEO NEOs (b) | Compensation Actually Paid to Non-PEO NEOs (b)(c) | Total Shareholder Return (1) | Peer Group Total Shareholder Return (2) | Net Income | Adjusted EBITDA (3) | | 2023 | - | $699,000 | - | $699,000 | $481,000 | $481,000 | $87.11 | $147.44 | $37,382,000 | $34,983,000 | | 2022 | $34,000 | $486,000 | $34,000 | $486,000 | $380,000 | $380,000 | $118.17 | $140.82 | $15,211,000 | $27,763,000 | | 2021 | - | - | - | - | $304,000 | $304,000 | $107.61 | $145.65 | $26,255,000 | $24,080,000 |

  26. Pay Versus Performance

    | (a) Mr. McKinlay was appointed as chief executive officer on July 31, 2022 upon Mr. Novelly’s retirement. In 2023, the compensation committee approved an adjustment to Mr. McKinlay’s base salary to $400 per annum and that resulted in a lump sum payment in February 2023 of $56 (based on a deemed retroactive adjustment to August 2022). This lump sum payment was included in Mr. McKinlay’s compensation for 2023 as reported in the 2023 Annual Report. | | (b) Non-PEO NEOs in 2023 included Rose M. Sparks, Charles Lyon and Kyle Gaither. Non-PEO NEOs in 2022 included Rose M. Sparks and Charles Lyon. Non-PEO NEOs in 2021 included Rose M. Sparks, Tom McKinlay and Charles Lyon. | | (c) No stock awards or stock options were granted to our PEOs or Non-PEO NEOs in 2023 or 2022. |

  27. Pay Versus Performance

    | (1) Total stockholder return as calculated based on a fixed investment of one hundred dollars measured from the market close on December 31, 2020 (the last trading day of 2020) through and including the end of the fiscal year for each year reported in the table. | | (2) Our peer group used for the total stockholder return calculation is Archer-Daniels-Midland Co., Arkema SA, Albemarle Corp., Alto Ingredients Inc., Aemetis Inc., Bunge Global SA, Cabot Corp., Chemours Co., Celanese Corp., Darling Ingredients Inc., Dow Inc., Eastman Chemical Co., Gevo Inc., Green Plains Inc., Hudson Technologies Inc., Huntsman Corp., Kronos Worldwide Inc., Lanxess Ag, Lyondellbasell Industries NV, Olin Corp., Rex American Resources Corp., Stepan Co., Solvay SA and Westlake Corp. | | (3) Our Company-selected measure, which is the measure we believe represents the most important financial performance measure not otherwise presented in the table above that we use to link compensation actually paid to our named executive officers for 2023 to our Company’s performance, is Adjusted EBITDA (a non-GAAP financial measure). For a reconciliation of Adjusted EBITDA to net income (the relevant GAAP measure), please see the Company’s Annual Report on Form 10-K; provided, that for purposes of the above table, the Company restated previously reported Adjusted EBITDA per interpretive guidance to exclude unrealized (non-cash) gains and losses on derivative instruments. |

  28. Relationship Between Compensation Actually Paid and Performance Measures

    Relationship Between Compensation Actually Paid and Performance Measures The charts below illustrate, for the past three fiscal years, the relationship between compensation actually paid to the PEOs and the average other NEOs and the financial metrics disclosed in the Pay versus Performance Table.