Sooner 10-Q 2005 Q1 Quarterly report

Exhibit 10.12

Summary of Performance Objectives and Target Payouts under the

Syntroleum Corporation Annual Incentive Plan

Under Syntroleum Corporation’s annual incentive plan, employees are eligible to receive a certain number of shares of common stock based on the achievement of certain company-wide objectives and the individual’s performance rating for the year. The company-wide objectives under the annual incentive plan are presented below:

• defining the Company’s Syntroleum Process-based design for GTL FPSO installations;

• evaluating alternatives for raising funds for acquiring additional stranded gas and liquids projects, and if feasible, implementing a plan to secure funds;

• securing additional capital resources to support general corporate purposes;

• identifying and commencing negotiations on three additional integrated stranded gas and liquids projects;

• evaluating alternatives for catalyst development, including possible participation of a third party;

• implementing a new oil and gas accounting software package and completing the documentation and testing of the internal controls for the new system in compliance with the Sarbanes-Oxley Act;

• completing the evaluation of the properties we have leased in Central Kansas for production of low BTU gas, and developing a plan to optimize value; and

• continuing the demonstration and documentation of our Syntroleum GTL Technologies.

The target annual incentive plan award for executive officers is 15% of their base salary earned in 2005. Payouts for executive officers range from 0% to 150% of his or her target award in accordance with the matrix presented below, depending on the assessment by a committee of outside directors of the satisfaction of the company-wide objectives and the individual’s performance.

	Individual Performance Rating
	1		1.5		2		2.5		3		3.5		4		5
Company Rating
1	150	%	130	%	115	%	100	%	80	%	0	%	0	%	0	%
1.5	130	%	120	%	110	%	95	%	75	%	0	%	0	%	0	%
2	115	%	110	%	100	%	90	%	70	%	0	%	0	%	0	%
2.5	100	%	90	%	80	%	70	%	60	%	0	%	0	%	0	%
3	80	%	70	%	60	%	50	%	40	%	0	%	0	%	0	%
4	0	%	0	%	0	%	0	%	0	%	0	%	0	%	0	%