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EX-31.1 - EXHIBIT 31.1 - FIRST UNITED ETHANOL LLC | c11529exv31w1.htm |
EX-31.2 - EXHIBIT 31.2 - FIRST UNITED ETHANOL LLC | c11529exv31w2.htm |
EX-32.2 - EXHIBIT 32.2 - FIRST UNITED ETHANOL LLC | c11529exv32w2.htm |
EX-32.1 - EXHIBIT 32.1 - FIRST UNITED ETHANOL LLC | c11529exv32w1.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
þ | Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934. |
For the fiscal year ended September 30, 2010
o | Transition report under Section 13 or 15(d) of the Exchange Act. |
For the transition period from to
Commission file number 000-53039
FIRST UNITED ETHANOL, LLC
(Name of registrant as specified in its charter)
Georgia | 20-2497196 | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
incorporation or organization) | ||
4433 Lewis B. Collins Road, Pelham, Georgia | 31779 | |
(Address of principal executive offices) | (Zip Code) |
(229) 522-2822
(Registrants telephone number)
(Registrants telephone number)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. o Yes þ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. o Yes þ No
Note Checking the box above will not relieve any registrant required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. þ Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulations S-T (§ 229.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
o Yes o No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(§229.405 of this chapter) is not contained herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filed, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). o Yes þ No
As of March 31, 2010, the aggregate market value of the membership units held by non-affiliates
(computed by reference to the most recent offering price of such membership units) was $29,230,362.
As of January 28, 2011, there were 81,984 membership units outstanding.
EXPLANATORY NOTE:
This Amendment No. 1 to the Annual Report on Form 10-K/A (Amendment No. 1) of First United
Ethanol, LLC (the Company) for the fiscal year ended September 30, 2010, is being filed for the
purpose of including Part III of the Companys original Annual Report on Form 10-K (the Annual
Report) due to the fact that the Company will not be filing a proxy statement which includes such
information within 120 days of its fiscal year end.
In accordance with Rule 12b-15 under the Securities and Exchange Act of 1934, the complete
text of the items amended by this Amendment No. 1 are set forth herein. The remainder of the
Companys original Annual Report on Form 10-K is unchanged. Pursuant to Rule 12b-15, this Amendment
No. 1 includes new certifications by the Companys principal executive officer and principal
financial officer. This report speaks only as of the original filing date of the Companys Annual
Report on Form 10-K and has not been updated or modified to take into account any events occurring
subsequent to the original filing date.
Table of Contents
PART III.
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE |
Board of Directors and Officers
The business and affairs of First United Ethanol, LLC (we, us, FUEL, First United, or
the Company) are managed by and under the direction of an ten person board. Murray Campbell is
our Chief Executive Officer and Larry Kamp is our Chief Financial Officer. The table below lists
the directors of First United as of our fiscal year ended
September 30, 2010:
Name(1) | Position with the Company | |
Murray Campbell |
Chief Executive Office and Director | |
Tommy L. Hilliard |
Vice-Chairman and Director | |
Miley Adams |
Secretary and Director | |
Steve Collins |
Treasurer and Director | |
Thomas H. Dollar, II |
Chairman and Director | |
Kenneth J. Hunnicutt |
Director | |
Robert L. Holden, Sr. |
Director | |
Donald Shirah |
Director | |
Mark A. Glass |
Director | |
Ralph Powell |
Director |
(1) | Except where otherwise indicated, the address of each director is deemed to be the same as
the address of the Company. |
Business Experience of Directors and Officers
The following is a brief description of the business experience and background of FUELs
officers and directors:
Murray Campbell, Chief Executive Officer and Director. For the past five years, Murray
Campbell has owned and operated a 1300-acre farming operation. He has been involved in agriculture
since beginning in the farm supply business during high school and college. He then worked for 9
years in the farm management industry. For 17 years, he was a partner in CoveyRise Plantation, a
commercial hunting preserve, and Hopeful Peanut Company, a peanut buying point. Mr. Campbell has
served as the Georgia representative and Chairman of the National Peanut Board as well as numerous
peanut industry committees. Mr. Campbell has been deeply involved in water issues in Georgia
serving on several state and regional boards. He has been on boards of directors of cotton gins,
farm bureaus, county USDA committees, state tourism and agriculture committees, athletic
organizations and the Presbyterian Church. Also, Murray Campbell and Miley Adams are
brothers-in-law. Mr. Campbell served as a Director since our inception. He also served as our
Chairman until February 2008. At that time, he became our Chief Executive Officer.
Tommy L. Hilliard, Vice Chairman and Director. In 2006, Tommy L. Hilliard retired after 26
years as Senior Vice President and Board Secretary for Planters & Citizens Bank of Camilla,
Georgia. He currently serves as Chairman of the Mitchell County Development Authority and manages
W. C. Adams & Sons, a family corporation. Mr. Hilliard also owns and operates a farm in the Camilla
area and owns one-third interest in E.H.T. Landholding Company, LLC, a family farming company. He
has served as a member of the board of directors for the Five County Joint Development Authority
and boards of directors for the Mitchell County Schools and Southwest Georgia Economic Development
Corporation. Mr. Hilliard has served as our Vice-Chairman and as a Director since our inception.
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Table of Contents
Steve Collins, Treasurer and Director. For the past five years, Steve Collins has been engaged
in a family farming enterprise in Mitchell County. He also currently serves on the board of the
Mitchell County Farm Bureau. Mr. Collins has served as our Treasurer and a Director since our
inception.
Miley Adams, Secretary and Director. For the past five years, Miley Adams has been a farmer in
the Camilla area. In addition, Mr. Adams owns and manages farming operations for Joe B. Adams &
Sons, Inc. and Adams Poultry. He currently serves on the board of directors of Planters and
Citizens Bank. He also serves on the board of directors for W.C. Adams & Sons and Adams & Walker,
Inc. Mr. Adams and Murray Campbell, our CEO, are brothers-in-law. Mr. Adams has served as our
Secretary since 2009 and has been a Director since our inception.
Thomas H. Dollar, II, Chairman and Director. For the past five years, Thomas H.
Dollar has been President and owner of Dollar Farm Products Company and President of Decatur
Gin Company and Miller County Gin. Mr. Dollar is also engaged in a farming operation under the
name Dollar Family Farms. Mr. Dollar has served on the boards of the Georgia Soybean Association,
Tri River Waterway and Chickasha Oil Mills. He presently is on the board of directors at Port City
Bank in Bainbridge, American Peanut Growers Group-Donalsonville, Georgia, Hidden Dunes Condo-Panama
City Beach, Florida and Chem-Nut in Albany, Georgia. Mr. Dollar has served as Chairman since
February 2008 and has been a Director since September 2005.
Kenneth J. Hunnicutt, Director. In 2006, Kenneth J. Hunnicut retired as Chairman of
Ameris Bancorp, a position he held for 20 years. Mr. Hunnicutt is also engaged in farming and
cattle operations. He has held leadership positions that include: Chairman and Board of Director
for the Georgias Bankers Association; Advisory Board for Norfolk Southern; Chairman of Colquitt
County Economic Development Corporation; and President of Moultire-Colquitt Chamber of Commerce.
Mr. Hunnicutt has been a Director since September 2005.
Robert L. Holden, Sr., Director. For the past five years, Robert L. Holden has been a co-owner
and operator of Grady Ranch, has served on the board of directors of the AgFirst Farm Credit Bank,
and has served as director of the Southwest Georgia Agricultural Credit Association in Bainbridge,
Georgia. Mr. Holden also serves on the board of directors of Georgia Milk Producers, American Dairy
Association and Grady County Farm Bureau. Mr. Holden has served as a Director since September 2005.
Donald Shirah, Director. For the past five years, Donald Shirah has been farming in Mitchell
County. He currently serves as Vice-President of the Mitchell County Farm Bureau and is a member of
the board of directors of the Bank of Camilla. He also serves on the Flint River Soil and Water
Conservation District Board. Mr. Shirah has served as a Director since our inception.
Mark A. Glass, Director. For the past five years, Mark A. Glass has been the president and
chief executive officer of Glass Enterprises, located in Camilla, Georgia. Mr. Glass has served on
the Georgia Farm Bureau board of directors and currently serves on boards for Mitchell County Farm
Bureau, Flint River National Bank and United Poultry Growers Association. Mr. Glass has served on
the Management Committee of Southwest Georgia Ethanol, LLC since its inception in October 2007. Mr.
Glass has served as a Director since 2010.
Ralph Powell, Director. For the past five years, Ralph Powell, has served as a consultant for
Southwind Plantation. He began his 34 year career with Georgia Power in 1964. Mr. Powell is a
Vietnam Veteran and serves on the board of Southern Fidelity Insurance Company in Tallahassee,
Florida. He has served as president of several civic club organizations including Lions Club,
Chamber of Commerce and Rotary Club. Mr. Powell resides in Brinson, Georgia. Mr. Powell has served
as a Director since 2010.
John B. Bubba Johnson, Director. John B. Bubba Johnson is a row crop farmer in Mitchell
County. He is a member of the board of directors of Mitchell Electric Corp. and a member of the
Flint River Planning and Water Policy Council, the Stake Holders Committee for the Flint River
Basin and the Camilla Chamber of Commerce. Mr. Johnson is active in Farm Bureau, currently serving
as the President of the Mitchell County Farm Bureau, and he previously served on the Georgia Farm
Bureaus Water Commodity Committee, Poultry Committee, and Policy Development Committee. He was
also a member of the board of directors of Mitchell Baker Service Center, the Mitchell County
Hospital Authority, the Mitchell County Zoning Board and Westwood Schools. Mr. Johnson served as a
Director from our inception through February 2010.
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Table of Contents
Michael W. Harrell, Director. Michael W. Harrell is President, CEO and majority shareholder of
Southwest Georgia Oil Company, Inc. of Bainbridge, Georgia. He is on the board of trustees for
Bainbridge College, the Library Foundation, past President of the Bainbridge-Decatur YMCA, past
Director of the Bainbridge Housing Authority, and a member of the Bainbridge Rotary Club. Mr.
Harrell served as a Director from September 2005 through February 2010.
Business Experience of Significant Employee
Lawrence Kamp, Chief Financial Officer. Lawrence Kamp was hired as our CFO in March 2007.
Prior to that, Mr. Kamp had been employed as the CFO of Agri Ethanol located in Raleigh, North
Carolina and prior to his employment with Agri Ethanol, Mr. Kamp was Controller at ConAgras
Raleigh, North Carolina location. From 2000 to 2005 Mr. Kamp was the Director of Finance at
Coca-Cola Bottling plant in Lehigh Valley, Pennsylvania.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act),
requires the Companys officers and Directors, and persons who own more than ten percent (10%) of a
registered class of the Companys equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the SEC). Officers, Directors and greater
than ten percent (10%) beneficial owners are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. To the Companys knowledge, based solely on a
review of the copies of such reports furnished to the Company and written representations from our
officers and Directors, all Section 16(a) filing requirements were complied with during the fiscal
year ended September 30, 2010.
Code of Ethics
On November 28, 2006, our board of directors adopted a code of ethics for the Chief Executive
and Chief Financial Officers of First United Ethanol, LLC. The code is designed to promote honesty
and integrity and to avoid conflicts of interest between personal and professional relationships in
conducting our business affairs. A copy of our code of ethics was filed as Exhibit 14.1 to our
Form 10-KSB filed with the SEC on December 22, 2006 and any interested Member may obtain a copy
without charge by contacting our Director of Communications, Alicia Shirah, at (229) 522-2822 or
Alicia@firstunitedethanol.com.
Audit Committee
The purpose of the audit committee is to monitor the integrity of the Companys financial
reporting process and systems of internal controls. The audit committee appoints and monitors the
independence and qualifications of the Companys independent auditors, monitors the performance of
the Companys internal audit function, provides an avenue of communication among the independent
auditors, management, and the Companys board of directors, and prepares an audit committee report
to be included in the Companys annual proxy statement. The audit committee of the board of
directors operates under a charter adopted by the board of directors in November 2006, which is
included in an appendix to the 2009 Proxy Statement. Under the charter, the audit committee must
have at least three Members. The board of directors appointed Miley Adams, Robert L. Holden, Sr.
and Kenneth J. Hunnicutt to the audit committee. The chairperson of the audit committee is Mr.
Hunnicutt.
The audit committee is exempt from the independence listing standards because the Companys
securities are not listed on a national securities exchange or listed in an automated inter-dealer
quotation system of a national securities association or to issuers of such securities.
Nevertheless, a majority of our audit committee is independent within the definition of
independence provided by NASDAQ rules 4200 and 4350, including the chairman of the committee, Mr.
Hunnicutt. The board of directors has determined that Mr. Holden will serve as the audit
committees financial expert as defined in Item 407 of Regulation S-K. The audit committee held
six (6) meetings during the fiscal year ended September 30, 2010. All of our audit committee
Members attended each of the audit committee meetings.
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Table of Contents
Audit Committee Report
The audit committee delivered the following report to the board of directors of the Company on
January 12, 2011. The following report of the audit committee shall not be deemed to be
incorporated by reference in any previous or future documents filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933 or the Securities Exchange Act
of 1934, except to the extent that the Company specifically incorporates the report by reference in
any such document.
The audit committee reviews the Companys financial reporting process on behalf of the board
of directors. Management has the primary responsibility for the financial statements and the
reporting process. The Companys independent registered public accountants are responsible for
expressing an opinion on the conformity of the audited financial statements to generally accepted
accounting principles. The committee reviewed and discussed with management the Companys audited
financial statements as of and for the fiscal year ended September 30, 2010. The committee has
discussed with McGladrey and Pullen, LLP, its independent auditors, the matters required to be
discussed by the Statement on Auditing Standards No. 61, as amended, as adopted by the Public
Company Accounting Oversight Board in Rule 3200T. The committee has received the written
disclosures and the letter from McGladrey & Pullen, LLP required by Independence Standards Board
Standard No. 1, as adopted by the Public Company Accounting Oversight Board in Rule 3600T, and has
discussed with the independent accountant the independent accountants independence. The committee
has considered whether the provision of services by McGladrey & Pullen, LLP not related to the
audit of the financial statements referred to above are compatible with maintaining McGladrey &
Pullen, LLPs independence.
Based on the reviews and discussions referred to above, the audit committee recommended to the
board of directors that the audited financial statements referred to above be included in the
Companys Annual Report on Form 10-K for the fiscal year ended September 30, 2010.
Audit Committee | ||
Kenneth J. Hunnicutt, Chair | ||
Miley Adams | ||
Robert L. Holden, Sr. |
Nominating Committee
The nominating committee of the board of directors operates under a charter adopted
by the board of directors on December 10, 2008, which is included in an appendix to the 2009 Proxy
Statement. Under the charter, the nominating committee must have at least three Members. The
board of directors appointed Steve Collins, Miley Adams, Robert Holden and Thomas Dollar, II to the
nominating committee. The chairperson of the nominating committee is Thomas Dollar, II. The
nominating committee held two (2) meetings during the fiscal year ended September 30, 2010. All of
our nominating committee members attended both of the nominating committee meetings.
Based upon the size of the Company and the boards familiarity with the Company since
inception, the board also has determined that each of the directors is qualified to suggest
nominees for consideration to the nominating committee. The nominating committee oversees the
identification and evaluation of individuals qualified to become directors and recommends to the
board of directors the director nominees for each annual meeting of the Members. The major
responsibilities of the nominating committee are to:
| Identify, recruit and evaluate candidates for directors positions; |
| Make recommendations to the board concerning board composition; |
| Evaluate the participation and contribution of each director before deciding whether to
recommend for re-election; |
| Fill vacancies on the board of directors; and |
| Recommend nominees to the board of directors for election or re-election. |
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The nominating committee is exempt from the independence listing standards because the
Companys securities are not listed on a national securities exchange or listed in an automated
inter-dealer quotation system of a national securities association or to issuers of such
securities. Nevertheless, two members of our four member nominating committee are independent
within the definition of independence provided by NASDAQ rules 4200 and 4350.
Nominations for the election of directors may also be made by any member entitled to vote
generally in the election of Directors. In accordance with the Companys operating agreement, a
member desiring to nominate one or more persons for election as a Director must submit written
notice of such intent either by personal delivery or regular mail to the Secretary of the Company
at least 60 days, but not more than 90 days, prior to the annual meeting. This notice must
contain: (i) the name and address of record of the Member who intends to make the nomination; (ii)
a representation that the Member is holder of units of the Company entitled to vote at the annual
meeting and intends to appear personally or by proxy at the meeting to nominate the person or
persons specified in the notice; (iii) the name, age, business and residence addresses, and
principal occupation or employment of each nominee; (iv) a description of all arrangements or
understandings between the Member and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be made by the Member;
(v) such other information regarding each nominee proposed by the Member as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission; (vi) the consent of each nominee to serve as a Director of the Company if so elected;
and (vii) a nominating petition signed and dated by the holders of at least five percent (5%) of
the Companys outstanding units that clearly sets forth the proposed candidate as a nominee of the
Directors seat to be filled at the next election of Directors. If a presiding officer at a
meeting of the Members determines that a nomination is not made in accordance with this procedure,
the officer must declare that the nomination was defective and therefore must be disregarded.
ITEM 11. | EXECUTIVE COMPENSATION |
Compensation Discussion and Analysis
The general philosophy of First United Ethanol, LLC is to provide competitive levels of
compensation that are influenced by our performance, that reward individual achievements, and that
enable us to retain qualified executives. Compensation consists primarily of annual compensation,
which includes base salary intended to provide a stable annual salary at a level consistent with
individual contributions.
The terms of Mr. Campbells and Mr. Kamps employment agreements were recommended by our
compensation committee to the full board of directors. The board of directors then approved the
employment agreements. No other executive officers play any role in determining or recommending
the amount or form of Mr. Campbells or Mr. Kamps compensation.
The compensation of our other employees is principally based on the recommendations of the
Chief Executive Officer and reflects his assessment of the nature of each employees position,
individual performance, and contribution to our overall performance, experience and tenure with the
Company. The compensation committee also considers various other factors, including the level of
each employees responsibilities within the Company, our financial performance and the level of
compensation increases in our industry.
We do not utilize compensation consultants in determining or recommending the amount or form
of any compensation.
Compensation Committee
The board of directors has appointed Miley Adams (chairman) and Ralph Powell to the
compensation committee. The compensation committee has direct responsibility with respect to the
compensation of the Companys chief executive officer and oversees the compensation of the
Companys other executive officers. The compensation committee held a total of two (2) meetings
during the fiscal year ended September 30, 2010. All of our compensation committee Members
attended both of the compensation committee meetings.
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The compensation committee has the overall responsibility for approving and evaluating the
Companys executive compensation plans, policies and programs. The committee makes a
recommendation to the full board of directors, which then makes the final decision regarding
executive compensation plans, policies and programs. The compensation committee of the board of
directors operates under a charter adopted by the board of directors, which is included in an
appendix to the 2009 Proxy Statement. The compensation committee is exempt from the independence
listing standards because the Companys securities are not listed on a national securities exchange
or listed in an automated inter-dealer quotation system of a national securities association or to
issuers of such securities.
Summary Compensation Table
The following table summarizes all compensation paid or payable by the Company during the last
two fiscal years to our Chief Executive Officer and our Chief Financial Officer.
Non-Equity | ||||||||||||||||||||
Name and | Incentive Plan | |||||||||||||||||||
Principal | Compensation | All Other | ||||||||||||||||||
Position | Year | Salary | Earnings(1) | Compensation(2) | Total | |||||||||||||||
Murray Campbell, |
Fiscal Year 2010 | $ | 211,296 | $ | 0 | $ | 3,600 | $ | 214,896 | |||||||||||
Chief Executive Officer |
Fiscal Year 2009 | $ | 176,875 | $ | 0 | $ | 800 | $ | 177,675 | |||||||||||
Lawrence Kamp |
Fiscal Year 2010 | $ | 144,762 | $ | 0 | $ | 0 | $ | 144,762 | |||||||||||
Chief Financial Officer |
Fiscal Year 2009 | $ | 119,230 | $ | 0 | $ | 0 | $ | 119,230 |
(1) | Mr. Campbell and Mr. Kamp are each eligible for an annual performance bonus.
However, both executives and the board of directors have agreed that performance
bonuses will not be paid until after the ethanol plant has been operational for a
sufficient period of time. |
|
(2) | Mr. Campbell received additional compensation for his participation on our
board of directors. |
Option Plan and Option Agreements
In April 2007, our Board of Directors adopted a Membership Unit Option Plan (the Plan). The
Plan permits the company to grant unit options and units to its employees for up to two percent
(2%) of the total number of units outstanding at the close of our registered offering, or 1,532
units. We believe that the awards will better align the performance goals of its employees with
those of its members. Option awards are generally granted with an exercise price of $1,000 per
unit, and they generally vest over three to five years of continuous service and have ten-year
contractual terms. Certain option awards may provide for accelerated vesting if there is a change
in control of the Company or the employee is terminated without cause.
On December 18, 2007, we entered into Non-Qualified Membership Unit Option Agreements with our
Chief Financial Officer, Lawrence Kamp. Mr. Kamps option agreement grants him the option to
purchase 191 units, which represents 1/4 of 1% of our outstanding units as of the close of our
registered offering. This agreement was entered into in accordance with the Plan as discussed
above. All of the option units are initially unvested units. They will become vested over a
three-year period from 2008 through 2010. However, Mr. Kamp may exercise his options to purchase
units at any time from the grant date of June 8, 2007 until 10 years thereafter, whether or not the
units are vested. If the units are unvested, then the unvested units, if purchased, will be
subject to a repurchase option held by the Company unless and until they become vested units. In
addition, the Company has a right of first refusal in the event that Mr. Kamp desires to transfer
any or all of their vested units to any person other than the Company.
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On April 9, 2009, we entered into Non-Qualified Membership Unit Option Agreements with our
Chief Executive Officer, Murray Campbell. Mr. Campbells option agreement grants him the option to
purchase 383 units, which represents 1/2 of 1% of our outstanding units as of the close of our
registered offering. This agreement was entered into in accordance with the Plan as discussed
above. All of the option units are initially unvested units. They will become vested over a
three-year period from 2009 through 2011. However, Mr. Campbell may exercise his options to
purchase units at any time from the grant date of April 9, 2009 until 10 years thereafter, whether
or not the units are vested. If the units are unvested, then the unvested units, if purchased,
will be subject to a repurchase option held by the Company unless and until they become vested
units. In addition, the Company has a right of first refusal in the event that Mr. Campbell
desires to transfer any or all of their vested units to any person other than the Company.
Director Compensation
Miley Adams (chairman) and Ralph Powell sit on our board of directors compensation committee.
The compensation committee has direct responsibility with respect to the compensation of the
Companys board of directors. All of the director compensation committees actions are reported to
the Board of Directors and, where appropriate, submitted to the board of directors for
ratification.
Our directors are compensated based on the number of board or committee meetings they attend
and are reimbursed for certain out of pocket expenses. The board members receive $300 per month
and the chairman receives $400 per month for attending regular board meetings and each board member
receives $250 per committee meeting attended.
DIRECTOR COMPENSATION
Annual Compensation | ||||||||||||||||
Fees | ||||||||||||||||
Earned | All Other | |||||||||||||||
Fiscal | or Paid in | Compensation | Total Compensation | |||||||||||||
Name | Year | Cash ($) | ($) | ($) | ||||||||||||
Miley Adams |
2010 | 5,100 | 0 | 5,100 | ||||||||||||
Steve Collins |
2010 | 3,850 | 0 | 3,850 | ||||||||||||
Murray Campbell (CEO) (1) |
2010 | 3,600 | 211,296 | 214,896 | ||||||||||||
Thomas H. Dollar, II |
2010 | 11,500 | 0 | 11,500 | ||||||||||||
Ralph Powell |
2010 | 3,750 | 0 | 3,750 | ||||||||||||
Tommy L. Hilliard |
2010 | 10,100 | 0 | 10,100 | ||||||||||||
Robert L. Holden, Sr. |
2010 | 4,850 | 0 | 4,850 | ||||||||||||
Kenneth J. Hunnicutt |
2010 | 9,350 | 0 | 9,350 | ||||||||||||
Mark Glass |
2010 | 3,850 | 0 | 3,850 | ||||||||||||
Donald Shirah |
2010 | 3,850 | 0 | 3,850 | ||||||||||||
John B. Bubba Johnson |
2010 | 3,750 | 0 | 3,750 | ||||||||||||
Michael W. Harrell |
2010 | 3,750 | 0 | 3,750 |
(1) | Murray Campbell is also compensated for his role as the Companys Chief
Executive Officer. |
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Outstanding Equity Awards at Fiscal Year-End
The table below represents the outstanding options awarded by the Company to our Chief
Executive Officer and Chief Financial Officer that have not yet vested as of September 30, 2010.
The terms of our Membership Unit Option Plan are described above under the heading Option Plan and
Option Agreements.
Name | Number of Unit Options That Have Not Vested(1)(2) | |||
Murray Campbell, CEO |
325 | (3) | ||
Larry Kamp, CFO |
68 | (4) |
(1) | Represents unit options awarded pursuant to our Membership Unit Option Plan that
have not yet vested. The details of our Membership Unit Option Plan are described above under the
heading Option Plan and Option Agreements. |
|
(2) | The market value of our units is determined by using a Black-Scholes
option-pricing model in order to calculate the compensation costs of employee stock-based
compensation. Based on the Black-Scholes model, the fair value of the unit options on the option
grant date was approximately $625 per unit option. |
|
(3) | Mr. Campbells unit options are scheduled to vest as follows: (i) During calendar
year 2009, eight percent (8%) of the options shall vest per calendar quarter; (ii) During calendar
year 2010, eight percent (8%) of the options shall vest per calendar quarter; (iii) During calendar
year 2011, eight percent (8%) of the options shall vest per calendar quarter during the first three
calendar quarters; and (iv) On the last day of the fourth calendar quarter of 2011 the remaining
options shall vest. |
|
(4) | Mr. Kamps unit options are scheduled to vest as follows: (i) During calendar year
2008, eight percent (8%) of the options shall vest per calendar quarter; (ii) During calendar year
2009, eight percent (8%) of the options shall vest per calendar quarter; (iii) During calendar year
2010, eight percent (8%) of the options shall vest per calendar quarter during the first three
calendar quarters; and (iv) On the last day of the fourth calendar quarter of 2010 the remaining
options shall vest. |
Option Exercises and Stock Vested
The table below represents the number of unit options awarded by the Company to our Chief
Executive Officer and Chief Financial Officer during our 2010 fiscal year. The terms of our Membership Unit Option Plan are
described above under the heading Option Plan and Option Agreements.
Name | Number of Unit Options Acquired on Vesting(1)(2) | |||
Murray Campbell, CEO |
58 | |||
Larry Kamp, CFO |
123 |
(1) | Represents vested unit options awarded pursuant to our Membership Unit
Option Plan. The details of our Membership Unit Option Plan are described above under the heading
Option Plan and Option Agreements. |
|
(2) | The market value of our units is determined by using a
Black-Scholes option-pricing model in order to calculate the compensation costs of employee
stock-based compensation. Based on the Black-Scholes model, the fair value of the unit options on
the option grant date was approximately $625 per unit option. |
Compensation Committee Interlocks and Insider Participation
No Member of the compensation committee was, during the last fiscal year, an executive officer
or employee of the Company and no Member of the compensation committee is a former officer of the
Company. No executive officer of the Company has: (i) served as a Member of the compensation
committee (or other board committee performing equivalent functions, or in the absence of such a
committee, the entire board of directors) of another entity, one of whose executive officers served
on the Companys compensation committee, (ii) served as a director of another entity, one of whose
executive officers served on the Companys compensation committee, or (iii) served as a Member of
the compensation committee (or other board committee performing equivalent functions, or in the
absence of such a committee, the entire board of directors) of another entity, one of whose
executive officers served as a Director of the Company. However, as discussed above under Director
Independence, Miley Adams is not considered independent because of his familial relationship with
Murray Campbell, our Chief Executive Officer.
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Compensation Committee Report
The committee has reviewed and discussed with management the Compensation Discussion and
Analysis required by Item 402(b) of Regulation S-K and based on such review and discussions, the
committee recommended to the board of directors that the Compensation Discussion and Analysis by
included in the Companys proxy statement on Schedule 14A.
Compensation Committee | ||
Miley Adams, Chair | ||
Ralph Powell |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The table below sets forth information regarding the beneficial ownership of our membership
units as of January 28, 2011, by each 5% unit holder. Other than Ethanol Capital Partners, LP and
Green Capital, LLC no person or entity is currently known to the Company to be the beneficial owner
of more than 5% of our outstanding units. Except as otherwise noted in the footnotes to the table,
each individual has sole investment and voting power with respect to the membership units set forth
opposite its name.
Name and Address of | Amount and Nature of | |||||||||
Title of Class | Beneficial Owner | Beneficial Ownership | Percent of Class | |||||||
Membership Units |
Ethanol Capital Group, LLC 5151 E. Broadway Ste. 510 Tucson, AZ 85711 |
5,000 units | 6.10 | % | ||||||
Membership Units |
Green Capital, LLC 8501 E. Willow Ridge Sioux Falls, SD 57110 |
5,000 units | 6.10 | % |
The table below sets forth information regarding the beneficial ownership of our directors and
executive officers and by all of our directors and executive officers as a group.
Name of | Amount and Nature | Percent of Class | ||||||||
Title of Class | Beneficial Owner(1) | of Beneficial Owner | at 2010 Year End | |||||||
Membership Units |
Miley Adams | 250 units | 0.30 | % | ||||||
Membership Units |
Steve Collins | 155 units | 0.19 | % | ||||||
Membership Units |
Murray Campbell (3) | 763 units | 0.93 | % | ||||||
Membership Units |
Thomas H. Dollar, II (2) | 1,740 units | 2.12 | % | ||||||
Membership Units |
Tommy L. Hilliard | 270 units | 0.33 | % | ||||||
Membership Units |
Robert L. Holden, Sr. | 270 units | 0.33 | % | ||||||
Membership Units |
Kenneth J. Hunnicutt | 120 units | 0.15 | % | ||||||
Membership Units |
Lawrence Kamp, CFO(3) | 191 units | 0.23 | % | ||||||
Membership Units |
Donald Shirah | 290 units | 0.35 | % | ||||||
Membership Units |
Mark Glass | 2,000 units | 2.44 | % | ||||||
Membership Units |
Ralph Powell | 550 units | 0.67 | % | ||||||
Membership Units |
John B. Bubba Johnson | 180 units | 0.22 | % | ||||||
Membership Units |
Michael W. Harrell(4) | 1,051 units | 1.29 | % | ||||||
Totals: | 7,830 units | 9.55 | % |
(1) | Except where otherwise indicated, the address of the beneficial owner is
deemed to be the same address as the Company. |
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(2) | Units beneficially owned by the Thomas H. Dollar Marital Trust of which our
Director Thomas H. Dollar, II is the trustee and by Dollar Farm Products of which
our Director Thomas H. Dollar, II is the president. |
|
(3) | Reflects options to purchase Units issued to Mr. Campbell and Mr. Kamp
pursuant to the Option Plan and Option Agreement. The percentage of class is
calculated based on the total number of units currently outstanding plus the number
of units for which options may be exercised. |
|
(4) | Units beneficially owned by Southwest Georgia Oil Company, Inc. Our
Director Michael W. Harrell is the president. |
The information presented in the tables above is based on information furnished by the
specified persons and entities and was determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934. Briefly stated, under that rule, units are deemed to be
beneficially owned by any person or group having the power to vote or direct the vote of, or the
power to dispose or direct the disposition of, such units, or who has the right to acquire
beneficial ownership thereof within 60 days. Beneficial ownership for the purposes of this proxy
statement is not necessarily to be construed as an admission of beneficial ownership for other
purposes.
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
The following members of our board of directors meet the definition of independent director
set forth by NASDAQ: Tommy Hilliard, Steve Collins, Thomas Dollar, II, Ralph Powell, Mark Glass,
Donald Shirah, Kenneth Hunnicutt and Robert Holden, Sr.
Conflicts of Interest
Conflicts of interest exist and may arise in the future as a result of the relationships
between and among our members, officers, directors and their affiliates. Although our officers and
directors have fiduciary duties to us, certain of our directors also owe fiduciary duties and other
obligations to entities with whom we compete or do business with. Whenever conflicts arise between
us and an officer or director or an entity with which that officer or director is affiliated, the
board as a whole will seek to resolve the conflict. A director will not participate when the board
considers a transaction where he or she has a conflict of interest. We do not have a committee of
independent directors or members or an otherwise disinterested body to consider transactions or
arrangements that result from, or are burdened by conflicts of interest. Some conflict situations,
including disputes that may arise between us and Fagen or ICM as a result of the construction of
the ethanol plant, are expected to be resolved through binding arbitration according to
construction industry rules.
Conflicts of interest could arise in the situations described below, among others:
| We may engage in transactions with affiliates of our directors. Members will
have no right to individually enforce the obligations of our directors or their affiliates
in our favor. |
| Our directors decisions regarding various matters, including expenditures
that we make for our business, reserves for accrued expenses, including officer salaries
and reimbursement of directors expenses, loan covenants, capital improvements,
contingencies or a sale, merger or business combination that will effect the amount of cash
available for distribution to members. |
| We may reimburse our directors for out-of-pocket expenses relating to our
business. We do not have a reimbursement policy or guideline for determining what expenses
will be reimbursed. We will review and reimburse all reasonable expenses that directors
submit to us. |
| We have retained counsel that has assisted us in various aspects of our
formation and development. We have not retained separate counsel on behalf of unit holders. |
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| Fagen Inc. is involved in and/or owns interests in various ethanol
construction and development projects throughout the United States. These projects will
compete with our project for purchasing corn and other raw material supplies, and the sale
of ethanol and distillers grains. |
| Our Third Amended and Restated Operating Agreement does not prevent our
directors from being involved in activities that compete with us. |
| Our members or their affiliates may loan money to us for which we may pay
interest up to a rate of prime plus 4%. |
Agreements Involving Our Securities
There are no agreements relating to our units other than our Second Amended and Restated
Operating Agreement, which sets forth the rights and preferences of the membership units.
Employment Agreements with Directors or Officers
FUEL entered into an Employment Agreement (Agreement) with Lawrence Kamp on March
6, 2007. Pursuant to the Agreement, Mr. Kamp will be the Chief Financial Officer for FUEL and shall
report directly to the Chief Executive Officer.
In consideration of his services, Mr. Kamp will receive an annual base salary of $115,000 and
will be eligible for an annual performance bonus of up to 20% of his annual base salary. Mr. Kamp
will be entitled to fully participate in FUELs employee benefit plans and programs. Either Mr.
Kamp or FUEL may terminate the agreement without cause upon 90 days advance notice to the other.
In connection with the future termination of the Agreement, Mr. Kamp will have the obligation
not to disclose FUELs confidential information or trade secrets to any person or entity for a
period of 12 months following termination of the Agreement. Under the Agreement, Mr. Kamp is also
subject to a covenant not to compete with FUEL within a 200 mile radius of FUELs facilities in
Mitchell County, Georgia.
On April 9, 2009, FUEL also entered into an amended Employment Agreement (Employment
Agreement) with Murray Campbell for his services as its Chief Executive Officer. Under the amended
Employment Agreement, Mr. Campbells annual base salary is $180,250 and he is eligible for an
annual performance bonus of up to 20% of his annual base salary. Mr. Campbell will be entitled to
participate fully in FUELs employee benefit plans and programs. Either Mr. Campbell or FUEL may
terminate the agreement without cause upon 90 days advance notice to the other.
Director Independence
Our independent directors are Tommy Hilliard, Steve Collins, Thomas Dollar, II, Ralph Powell,
Mark Glass, Donald Shirah, Kenneth Hunnicutt, Robert Holden, Sr, John B. Bubba Johnson, and
Michael Harrell. Our directors that are not independent are Murray Campbell and Miley Adams. The
determination of independence is made by reference to NASDAQ rule 4200. Murray Campbell is not
considered independent because of his role as an executive officer of the Company. Miley Adams is
not considered independent because of his familial relationship with Murray Campbell, our Chief
Executive Officer. In evaluating the independence of our directors, we considered the following
factors: (i) the business relationships of our directors; (ii) positions our directors hold with
other companies; (iii) family relationships between our directors and other individuals involved
with the Company; (iv) transactions between our directors and the Company; and (v) compensation
arrangements between our directors and the Company.
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ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
The audit committee selected McGladrey & Pullen, LLP as independent registered public
accountants for the fiscal year October 1, 2010 to September 30, 2011. A representative of
McGladrey & Pullen, LLP is expected to
be present at the annual meeting of Members and will have an opportunity to make a statement
if so desired. The representative is also expected to be available for questions from the Members.
Audit Fees
The aggregate fees billed by the principal independent registered public accountants to the
Company for the fiscal year ended September 30, 2010, and the
fiscal year ended September 30, 2009
are as follows:
Category | Fiscal Year | Fees | ||||||
Audit Fees (1) |
2010 | $ | 145,349 | |||||
2009 | $ | 137,250 | ||||||
Audit-Related Fees (2) |
2010 | $ | 3,500 | |||||
2009 | 0 | |||||||
Tax Fees (3) |
2010 | $ | 27,215 | |||||
2009 | $ | 15,000 | ||||||
All Other Fees (4) |
2010 | $ | 11,210 | |||||
2009 | 0 |
(1) | For the fiscal year ended September 30, 2010 and September 30, 2009, the Company
used the services of McGladrey & Pullen, LLP as its independent registered public
accounting firm. The audit fees were incurred for the audit of the Companys annual
financial statements included within Form 10-K and review of the financial statements
included in the Companys quarterly reports on Form 10-Q as well as services in connection
with other statutory and regulatory filings or engagements for the fiscal year ended
September 30, 2010. |
|
(2) | Audit-related fees related to the RIN attest engagement for December 31, 2009 provided
by McGladrey & Pullen, LLP. |
|
(3) | Tax fees consist of tax return preparation and cost segregation services provided
during the year ended September 30, 2010, provided by RSM McGladrey an entity associated
with McGladrey & Pullen, LLP. |
|
(4) | All other fees include services related to property tax assistance by RSM McGladrey
an entity associated with McGladrey & Pullen, LLP. |
Prior to engagement of the principal accountant to perform audit services for the Company, the
principal accountant was pre-approved by our Audit Committee pursuant to Company policy requiring
such approval.
One hundred percent of all audit, audit-related and tax services were pre-approved by our
Audit Committee.
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PART IV
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
The following exhibits are filed as part of, or are incorporated by reference into, this
report:
Exhibit | Method of | |||||||
No. | Description | Filing | ||||||
10.1 | Fourth Amendment to Accounts Agreement between
Southwest Georgia Ethanol, LLC and WestLB Ag dated
June 7, 2010.
|
1 | ||||||
10.2 | Sixth Amendment to Senior Credit Agreement between
Southwest Georgia Ethanol, LLC and WestLB Ag dated
June 7, 2010.
|
1 | ||||||
10.3 | Grain Brokerage Agreement between Southwest Georgia
Ethanol, LLC and Palmetto Grain Brokerage, LLC
dated December 15, 2009.
|
2 | ||||||
31.1 | Certificate pursuant to 17 CFR 240 15d-14(a)
|
* | ||||||
31.2 | Certificate pursuant to 17 CFR 240 15d-14(a)
|
* | ||||||
32.1 | Certificate pursuant to 18 U.S.C. Section 1350
|
* | ||||||
32.2 | Certificate pursuant to 18 U.S.C. Section 1350
|
* |
(1) | Incorporated by reference to Exhibit of the same number filed with our quarterly report on
Form 10-Q filed with the Securities and Exchange Commission on August 16, 2010. |
|
(2) | Incorporated by reference to Exhibit of the same number filed with our annual report on Form
10-K filed with the Securities and Exchange Commission on December 29, 2010. |
|
(*) | Filed herewith. |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
FIRST UNITED ETHANOL, LLC | ||||
Date: January 27, 2011
|
/s/ Murray Campbell
|
|||
Chief Executive Officer and Director | ||||
Date: January 27, 2011
|
/s/ Lawrence Kamp
|
|||
Chief Financial Officer |
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In accordance with the Exchange Act, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: January 27, 2011
|
/s/ Murray Campbell
|
|||
Chief Executive Officer and Director | ||||
Date: January 27, 2011
|
/s/ Lawrence Kamp
|
|||
Chief Financial Officer | ||||
Date: January 27, 2011
|
/s/ Miley Adams
|
|||
Date: January 27, 2011
|
/s/ Steve Collins
|
|||
Date: January 27, 2011
|
/s/ Mark Glass
|
|||
Date: January 27, 2011
|
/s/ Donald Shirah
|
|||
Date: January 27, 2011
|
/s/ Tommy Hilliard
|
|||
Date: January 27, 2011
|
/s/ Thomas H. Dollar, II
|
|||
Date: |
|
|||
Date: January 27, 2011
|
/s/ Kenneth Jack Hunnicutt
|
|||
Date: January 27, 2011
|
/s/ Ralph Powell
|
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EXHIBIT INDEX
Exhibit | Method of | |||||||
No. | Description | Filing | ||||||
10.1 | Fourth Amendment to Accounts Agreement between
Southwest Georgia Ethanol, LLC and WestLB Ag dated
June 7, 2010.
|
1 | ||||||
10.2 | Sixth Amendment to Senior Credit Agreement between
Southwest Georgia Ethanol, LLC and WestLB Ag dated
June 7, 2010.
|
1 | ||||||
10.3 | Grain Brokerage Agreement between Southwest Georgia
Ethanol, LLC and Palmetto Grain Brokerage, LLC
dated December 15, 2009.
|
2 | ||||||
31.1 | Certificate pursuant to 17 CFR 240 15d-14(a)
|
* | ||||||
31.2 | Certificate pursuant to 17 CFR 240 15d-14(a)
|
* | ||||||
32.1 | Certificate pursuant to 18 U.S.C. Section 1350
|
* | ||||||
32.2 | Certificate pursuant to 18 U.S.C. Section 1350
|
* |
(1) | Incorporated by reference to Exhibit of the same number filed with our quarterly report on
Form 10-Q filed with the Securities and Exchange Commission on August 16, 2010. |
|
(2) | Incorporated by reference to Exhibit of the same number filed with our annual report on Form
10-K filed with the Securities and Exchange Commission on December 29, 2010. |
|
(*) | Filed herewith. |
17