Exhibit 10.44
Stock Option Agreement
CONFIDENTIAL
This Stock Option Agreement (the "Agreement") made effective as of the 1st
day of October, 2002, by and between Syntroleum Corporation, a Delaware
corporation ("Syntroleum"), and John B. Holmes, Jr. ("Grantee"), evidences the
grant by Syntroleum of an option (the "Option") to Grantee to purchase shares of
Syntroleum common stock, par value $0.01 per share ("Common Stock"), pursuant to
action of the Board of Directors (the "Board") on August 31, 2002 (the "Date of
Grant") and Grantee's acceptance of the Option in accordance with the
resolutions of the Board of Directors dated August 31, 2002. Syntroleum and
Grantee agree as follows:
1. Grant of Option and Exercise Price. Syntroleum grants to Grantee the
Option to purchase 1,000,000 shares of Common Stock at an exercise price of
$1.55 per share, the Fair Market Value (as defined below) of Syntroleum Common
Stock on the Date of Grant, subject to the terms and conditions of this
Agreement. For purposes of this Agreement, "Fair Market Value" means (i) if the
Common Stock is listed on a national securities exchange or admitted to unlisted
trading privileges on such exchange or listed for trading on the NASDAQ system,
the last reported sale price of the Common Stock on such exchange on the last
business day prior to the date on which the value is to be determined, or if no
such sale is made on such day, the average closing bid and asked prices for such
day on such exchange; or (ii) if the Common Stock is not so listed or admitted
to unlisted trading privileges, the mean of the last report bid and asked prices
reported by the National Quotation Bureau, Inc. on the last business day prior
to the date for which the value is to be determined; or (iii) if the Common
Stock is not so listed or admitted to unlisted trading privileges and bid and
asked prices are not so reported, not less than book value, determined in such
reasonable manner as may be prescribed by the Board of Directors, which
determination shall be final and binding upon Grantee.
2. Vesting. Except as otherwise provided in this Agreement, the Option
shall vest as follows: (a) the right to exercise the Option and purchase 333,334
shares shall vest on October 1, 2002, (b) the right to exercise the Option and
purchase 333,333 shares shall vest on October 1, 2003, and (c) the right to
exercise the Option and purchase the remaining 333,333 shares shall vest on
October 1, 2004; provided, however, that in the event Grantee's employment with
Syntroleum is terminated by Syntroleum for any reason other than just cause and
(i) such termination occurs after October 1, 2002 and prior to October 1, 2003,
the right to exercise the Option and purchase 333,333 shares shall vest upon
such termination or (ii) such termination occurs after October 1, 2003 and prior
to October 1, 2004, the right to exercise the Option and purchase 333,333 shares
shall vest upon such termination. Upon any voluntary termination of employment
by Grantee or upon termination of Grantee's employment for just cause, the
Option shall remain vested and exercisable only to the extent vested and
exercisable as of the date of such termination of employment, and no additional
vesting shall occur.
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Syntroleum Stock Option Agreement
Confidential
3. Exercise Period. The Option may be exercised from time to time with
respect to all or any number of the then vested, unexercised shares on any
regular business day of Syntroleum at its then executive offices, until the
earliest to occur of the following dates: (a) the tenth anniversary of the Date
of Grant; (b) 12 months after the date of Grantee's termination of employment
with Syntroleum by reason of death or disability; (c) the third annual
anniversary of Grantee's retirement; or (d) the date 12 months following the
date upon which Grantee's employment with Syntroleum terminates for any reason
other than those described in subsections (b) or (c) of this Section 3.
4. Exercise.
4.01 During the period that the Option is exercisable, it may be exercised
in full or in part by Grantee or, in the event or Grantee's death, by the person
or persons to whom the Option was transferred by will or in accordance with the
provisions of Section 9.03, or by the laws of descent and distribution, by
delivering or mailing to the Secretary of Syntroleum written notice of the
exercise specifying the number of Shares with respect to which the Option is
being exercised. The written notice shall be signed by each person entitled to
exercise the Option and shall specify the address and Social Security number of
each such person. If any person other than Grantee purports to be entitled to
exercise all or any portion of the Option, the written notice shall be
accompanied by proof, satisfactory to Syntroleum, of that entitlement.
4.02 Subject to the provisions of Sections 4.03 and 4.04, the written
notice shall be accompanied by full payment of the exercise price for the shares
as to which the Option is exercised either (i) in cash, (ii) in shares of Common
Stock evidenced by certificates either endorsed or with stock powers attached
transferring ownership to Syntroleum, with the aggregate Fair Market Value equal
to said exercise price on the date the written notice is received by the
Secretary, or (iii) in any combination of cash and such shares.
4.03 In lieu of payment of the exercise price by way of delivery of
certificate(s) evidencing shares of Common Stock, Grantee may furnish a
notarized statement executed by Grantee reciting the number of shares being
purchased under the Option and the number of Syntroleum shares owned by Grantee
which may be freely delivered as payment of all or a portion of the exercise
price based on their Fair Market Value, all pursuant to rules adopted by and
subject to the consent of the Compensation Committee (the "Committee"). Subject
to the consent of the Committee, Grantee will be issued a certificate for new
shares of Common Stock equal to the number of shares of Common Stock acquired by
Grantee and described in the notarized statement. No shares of Common Stock
shall be issued upon exercise of an Option until full payment has been made
therefor.
4.04 In lieu of payment by Grantee in cash or in shares of Common Stock or
by delivery of a notarized statement of ownership pursuant to Sections 4.02 and
4.03, Grantee may, pursuant to rules adopted by the Committee, elect to pay all
or part of the purchase price for the shares being purchased under the Option by
requesting Syntroleum to reduce the number of shares remaining subject to the
Option by the number of shares of Common Stock with a Fair Market Value
sufficient to pay the exercise price. Any such election shall be made by
delivering written notice thereof to Syntroleum, together with such information
and documents as the Committee may prescribe, and shall be subject to approval
by the Committee.
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4.05 In the event Grantee pays the Option exercise price by delivery of a
notarized statement of ownership or by surrendering his right to exercise a
portion of the Option as described in Sections 4.03 and 4.04, the number of
shares remaining subject to the Option shall be reduced not only by the number
of new shares issued upon exercise of the Option but also by the number of
previously owned shares listed on the notarized statement of ownership and
deemed to be surrendered as payment of the exercise price or, as applicable, by
the number of shares in connection with which Grantee has surrendered his right
to exercise the Option.
4.06 The written notice of exercise shall be effective and the Option shall
be deemed exercised to the extent specified in the notice on the date that the
written notice (together with required payment of the exercise price) is
received by the Secretary of Syntroleum at its executive offices during regular
business hours.
5. Postponement or Non-exercise. Syntroleum shall not be required to issue
any certificate or certificates for shares of Common Stock upon the exercise of
the Option prior to (i) the obtaining of any approval from any governmental
agency which Syntroleum shall, in its sole discretion, determine to be necessary
or advisable, (ii) the taking of any action in order to comply with restrictions
or regulations incident to the maintenance of a public market for its shares of
Common Stock (including, without limitation, the taking of any action in order
to comply with the rules of the Nasdaq Stock Market, Inc.), and (iii) the
completion of any registration or other qualification of such shares of Common
Stock under any state or Federal law or rulings or regulations of any
governmental body which Syntroleum shall, in its sole discretion, determine to
be necessary or advisable. Syntroleum shall not be obligated by virtue of any
provisions of this Agreement to recognize the exercise of the Option or to sell
or issue shares in violation of the laws of any government having jurisdiction
thereof or in violation of the rules of the Nasdaq Stock Market, Inc. or any
other securities exchange on which the Common Stock is listed or admitted for
trading. Any postponement or delay by Syntroleum in recognizing the exercise of
the Option hereunder shall not extend the period during which the Option may be
exercised, and neither Syntroleum nor its directors or officers shall have any
obligation or liability to Grantee, to a legal representative of the estate of
Grantee or to the person or persons who shall acquire the right to exercise the
Option by bequest or inheritance or by reason of the death of Grantee (such
representative or person, a "Successor"), or to any other person with respect to
any shares of Common Stock as to which the Option shall lapse because of such
postponement.
6. Transfer of Shares; Tax Withholding. As soon as practicable after receipt of
an effective written notice of exercise and full payment of the exercise price
as provided in Section 4 above, the Secretary of Syntroleum shall cause
ownership of the appropriate number of shares of Syntroleum Common Stock to be
issued to the person or persons exercising the Option by having a certificate or
certificates for such number of shares registered in the name of such person or
persons and shall have each certificate delivered to the appropriate person.
Each such certificate shall bear a legend describing, to the extent applicable,
(a) Syntroleum's right of first refusal, if any, in the event such person
desires or attempts to transfer such shares, and (b) the restrictions imposed by
applicable state and federal securities laws, as described in Section 9.05.
Notwithstanding the foregoing, the Secretary shall not transfer ownership of
shares of Common Stock until all applicable tax withholding obligations have
been satisfied. The Committee shall take such steps as it deems necessary or
desirable for the withholding of any taxes that are
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Syntroleum Stock Option Agreement
Confidential
required by laws or regulations of any governmental authority in connection with
any exercise of all or a portion of the Option, including the withholding of
shares the Fair Market Value of which is sufficient to satisfy such obligations.
7. Change in Control. All outstanding Options shall become exercisable
immediately if either of the following events occur, unless otherwise determined
by the Committee:
(a) any "person" (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Syntroleum representing 25%
or more of the combined voting power of Syntroleum's then outstanding
securities; or
(b) at any time (not including any period prior to the date hereof)
there shall cease to be a majority of the Board comprising individuals who
at the beginning of such period constitute the Board and any new
Director(s) whose election by the Board or nomination for election by the
Board or nomination for election by Syntroleum's shareholders was approved
by a vote of at least two-thirds of the Directors then still in office who
either were Directors at the beginning of the period or whose election or
nomination for election was previously so approved.
8. Adjustments for Corporate Changes.
8.01 In the event of a recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, rights offering,
reorganization or liquidation, or any other change in the corporate structure or
shares of Syntroleum, the Committee shall (i) make such equitable adjustments,
when appropriate, designed to protect against dilution or enlargement, in the
number and kind of shares of Common Stock exercisable under the Option and in
the Option price, and (ii) make such arrangements for the substitution of new
options to purchase Common Stock for any unexpired portion of the Option then
outstanding or for the assumption of any such unexpired portion of the Option.
8.02 In the event that Syntroleum agrees (i) to sell or otherwise dispose
of all or substantially all of Syntroleum's assets, or (ii) to be wholly or
partially liquidated, or (iii) to participate in a merger, consolidation or
reorganization, then the Committee may determine that the entire Option shall be
immediately exercisable in full. The Committee may also determine that any
portion of the Option not exercised prior to any such event, or within such
period of time thereafter (not to exceed 30 days) as the Committee shall
determine, shall terminate.
9. Miscellaneous.
9.01 The Committee shall have the sole responsibility for construing and
interpreting this Agreement, for establishing such rules and regulations as it
deems necessary or desirable for the proper administration of the provisions of
this Agreement, and for resolving all questions arising under this Agreement.
Any decision taken by the Committee arising out of or in connection with the
construction, administration, interpretation and effect of this Agreement and
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Syntroleum Stock Option Agreement
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of any rules or regulations adopted by the Committee in connection herewith
shall, to the extent permitted by law, be within its absolute discretion and
shall be conclusive and binding upon Grantee, all Successors, and any other
person, whether that person is claiming under or through Grantee or otherwise.
9.02 Except as specifically provided in Section 9.03, the rights under this
Agreement may not be transferred except by will or the laws of descent and
distribution. The rights under this Agreement may be exercised during the
lifetime of Grantee only by Grantee (or by his guardian or legal
representative). The terms of the Option shall be binding upon the executors,
administrators, heirs, successors, and assigns of Grantee.
9.03 Grantee may name, from time to time, any beneficiary or beneficiaries
(who may be named contingently or successively) to whom any benefit or rights
under this Agreement is to be paid or transferred in case of his death before he
receives any or all of such benefit or exercises such rights. Each designation
shall revoke all prior designations by Grantee, shall be in a form prescribed by
the Committee, and shall be effective only when filed by Grantee in writing with
the Committee during his lifetime. In the absence of any such designation,
rights remaining unexercised at Grantee's death shall be exercisable by his
estate, subject to the terms hereof.
9.04 Authorized leaves of absence from Syntroleum shall not constitute a
termination of employment for purposes of this Agreement. For purposes of this
Agreement, an authorized leave of absence is an absence while Grantee is on
military leave, sick leave, or other bona fide leave of absence.
9.05 Notwithstanding any other provision to the contrary, the Option may
not be exercised if the issuance of shares of Common Stock upon such exercise of
the Option would constitute a violation of any applicable federal or state
securities or other law or regulation.
9.06 Grantee shall have no rights as a stockholder with respect to any
shares covered by the Option until the date of the actual issuance of the
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date the shares or any part thereof
are issued pursuant to exercise of all or any part of the Option.
9.07 Grantee agrees not to disclose to any person, directly or indirectly,
the terms of this Agreement or any other matters relating to the Option or the
shares, including the number of shares subject to the Option or purchased
hereunder, without the prior consent of Syntroleum.
9.08 The existence of the Option granted in this Agreement shall not affect
in any way the right or the power of Syntroleum or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in Syntroleum's capital structure or its business, or any merger or
consolidation of Syntroleum, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of Syntroleum or any sale or transfer
of all or any part of its assets or business, or any other corporate act or
preceding, whether of a similar character or otherwise.
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Syntroleum Stock Option Agreement
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9.09 Nothing contained in this Agreement, and no action of Syntroleum or
the Committee with respect hereto, shall confer or be construed to confer on
Grantee any right to continue in the employment of Syntroleum.
9.10 Every notice or other communication relating to this Agreement shall
be in writing and shall be mailed to or delivered to the party for whom it is
intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided, however, that
unless and until some other address be so designated, all notices or
communications by Grantee to Syntroleum shall be mailed or delivered to
Syntroleum at the offices of its Secretary at Suite 1100, 1350 S. Boulder,
Tulsa, Oklahoma 74119, and all notice or communications by Syntroleum to Grantee
may be given to Grantee personally or may be mailed to him.
9.11 The validity and effect of this Agreement and the rights and
obligations of the parties, and all other persons affected by this Agreement
shall be construed and determined in accordance with the laws of the State of
Oklahoma.
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Syntroleum Stock Option Agreement
Confidential
IN WITNESS WHEREOF, Syntroleum, by its duly authorized officer, and Grantee
have signed this Agreement as of the date first above written.
COMPANY:
SYNTROLEUM CORPORATION
By:
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Kenneth L. Agee, Chairman
Syntroleum Corporation
1350 S. Boulder, Ste. 1100
Tulsa, Oklahoma 74119
GRANTEE:
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John B. Holmes, Jr.
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