FutureFuel Corp. Stock Compensation Disclosure

17.	Stock-based compensation

 

The Board of Directors of the Company adopted an omnibus incentive plan which was approved by the shareholders of the Company at its 2017 annual shareholder meeting (the “Incentive Plan”). The purpose of the plan is to:

 

	●	Encourage ownership in the Company by key personnel whose long-term employment with or engagement by the Company or its subsidiaries is considered essential to its continued progress and, thereby, encourage recipients to act in the Company’s shareholders’ interests and share in its success;
	●	Encourage such persons to remain in the Company’s employ or in the employ of its subsidiaries; and
	●	Provide incentives to persons who are not the Company employees to promote the Company’s success.

 

The Incentive Plan authorizes the Company to issue stock options (including incentive stock options and nonqualified stock options), common stock awards, and stock appreciation rights. Eligible participants in the plan include: (i) members of the Company’s board of directors and its executive officers; (ii) regular, active employees of the Company and any of its subsidiaries; and (iii) persons engaged by the Company or any of its subsidiaries to render services to the Company or its subsidiaries as an advisor or consultant.

 

Awards under the Incentive Plan are limited to shares of the Company’s common stock, which may be shares acquired by the Company, including shares purchased in the open market, or authorized but un-issued shares. Awards are limited to 10% of the issued and outstanding shares of the Company’s common stock in the aggregate.

 

The Incentive Plan became effective upon its approval by the Company’s shareholders on September 7, 2017 and continues in effect for a term of ten years thereafter unless amended and extended by the Company or unless otherwise terminated.

 

The Company recognizes compensation expense in its financial statements for common stock-based options, stock units, and stock awards based upon the grant-date fair value over the requisite service period.

 

In 2025, the Company issued the following awards under the Incentive Plan:

 

	●	In April 2025, the Company granted 10,000 stock options to a newly appointed director.  The exercise price was determined by the average of the high and low trading prices of the Company’s common stock on the New York Stock Exchange on the date of the grant. For financial statement purposes, these options are treated as being vested immediately and carry a five-year term, expiring in 2030. The Company estimated the grant-date fair value of $3.96 per option using the Black-Scholes-Merton Valuation method.
	●	In November 2025, the Company granted a total of 40,000 shares of restricted stock to its Board of Directors, consisting of 5,000 shares per non-employee director.  For financial statement purposes, these awards are treated as being vested immediately.  The aggregate grant date fair value for these awards was $130.

●

In December 2025, the Company granted a total of 21,514 shares of restricted stock to seven members of the leadership team.  The awards vest 33% each year over a three-year period and had a compensation expense of $18.

 

In 2024, the Company issued the following awards under the Incentive Plan:

 

●

Pursuant to his employment agreement, the Company granted CEO Roeland Polet 750,000 RSUs on September 3, 2024.  These units vest in five equal annual installments beginning on the first anniversary of the grant date.  The grant-date fair value of the award was $4,519, which is being recognized as compensation expense over the five-year vesting period.  During 2024, the company recorded $392 in related compensation expense.  Dividend equivalents on these RSUs were forfeitable and were recorded as a reduction to retained earnings with a corresponding increase to additional paid in capital for dividends paid and to dividends payable for those declared but unpaid.

●

In December 2024, the Company granted a total of 40,000 shares of restricted stock to its Board of Directors, consisting of 5,000 shares per non-employee director.  These awards vested immediately. The aggregate grant-date fair value of these awards was $206.

●

During 2024, the Company granted a total of 20,000 stock options to two new members of the Board of Directors (10,000 options each) in March and August.  The exercise price for these awards was set at the mean of the high and low trading prices of the Company’s common stock on the NYSE on the respective grant dates. All 2024 director options vested immediately upon grant and carry a five-year term expiring in 2029.  Using the Black-Scholes-Merton valuation model, the Company determined the weighted-average grant-date fair value to be $6.64 per option.

 

In 2023, the Company did not make any grants under the Incentive Plan. 

 

There were no stock options exercised in 2025, 2024 or 2023.

 

The assumptions used in the determination of the fair value of the options granted are provided in the following table: 

 

		2025				2024				2023
Assumptions		Options				Options				Options
Expected volatility rate		47.85		%		49.06		%		N/A
Expected dividend yield		6.06		%		3.69		%		N/A
Risk-free interest rate		3.92		%		4.25		%		N/A
Expected forfeiture rate		0.00		%		0.00		%		N/A
Expected term in years		2.3				2.3				N/A

 

The volatility rate for the options granted in 2025 and 2024 were derived from the historical stock price volatility of the Company’s common stock over the same time period as the expected term of each stock option award. The volatility rate is derived by a mathematical formula using the daily closing stock price data over the expected term.

 

The expected dividend yield is calculated using the Company’s expected dividend amount at the date of the option grant over the expected term divided by the fair market value of the Company’s common stock.

 

Forfeitures for RSU grants are recognized as they occur.

 

For the years ended December 31, 2025, 2024 and 2023, total share-based compensation totaled $1,059, $636, and $0, respectively. In the years ended December 31, 2025, and 2024, this balance was recorded as an element of selling, general, and administrative expenses.  A reduction to retained earnings for the forfeitable dividend of the RSU was recorded for $51and $277, for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, there was no unrecognized compensation expense related to stock options.  As of December 31, 2025 and 2024, there was unrecognized compensation expense related to restricted stock units of $3,313 and $4,218, respectively.  As of December 31, 2025 and 2024, there was unrecognized compensation expense related to restricted stock awards of $54 and $0, respectively.

 

A summary of the activity of the Company’s stock options for the period beginning January 1, 2023, and ending December 31, 2025 is presented below.

 

						Weighted
						Average
		Options				Exercise Price
Outstanding at January 1, 2023			44,000			$	10.74
Granted			-				-
Exercised			-				-
Canceled, forfeited, or expired			(10,000	)			16.21
Outstanding at December 31, 2023			34,000				9.13
Granted			20,000				6.64
Exercised			-				-
Canceled, forfeited, or expired			(10,000	)			12.07
Outstanding at December 31, 2024			44,000				7.33
Granted			10,000				3.96
Exercised			-				-
Canceled, forfeited, or expired			(4,000	)			11.56
Outstanding at December 31, 2025			50,000				6.32

 

There were 3,456,008 shares of stock (options or awards) available for grant under the Incentive Plan. The following table provides the remaining contractual term and weighted average exercise prices of stock options outstanding and exercisable from the Incentive Plan at December 31, 2025.

 

				Options Outstanding												Options Exercisable
								Weighted
				Number				Average				Weighted				Number				Weighted
				Outstanding at				Remaining				Average				Exercisable at				Average
Exercise				December 31,				Contractual				Exercise				December 31,				Exercise
Price				2025				Life				Price				2025				Price
$	7.18				20,000				1.61			$	7.18				20,000			$	7.18
	7.55				10,000				3.21				7.55				10,000				7.55
	5.73				10,000				3.62				5.73				10,000				5.73
	3.96				10,000				4.26				3.96				10,000				5.73
					50,000				2.86				6.32				50,000				6.32

 

The aggregate intrinsic value of total options outstanding and exercisable was $0 at December 31, 2025 and 2024. Intrinsic value is the amount by which the last trade price of the common stock closest to December 31, 2025 and 2024 exceeded the exercise price of the options granted.