Exhibit 10.3
Stock Option
Agreement
CONFIDENTIAL
This Stock Option Agreement (the
“Agreement”) made effective as of the * day of *, 2005,
by and between Syntroleum Corporation, a Delaware corporation
(“Syntroleum”) and * (“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 on * (the “Date of Grant”) and
Grantee’s acceptance of the Option in accordance with the
provisions of the Syntroleum Corporation 2005 Stock Incentive Plan
(the “Plan”). Syntroleum and Grantee agree as
follows.
1. Grant of Option and Exercise
Price . Syntroleum grants to Grantee the Option to purchase *
shares of Common Stock at an exercise price of $* per share,
subject to the terms and conditions of this Agreement and of the
Plan, the provisions of which are incorporated into this Agreement
by this reference. The shares subject to the Option are intended to
be Incentive Stock Option (ISO) shares as described in Section
422(b) of the Internal Revenue Code of 1986, as amended.
2. Vesting . Except as
otherwise provided in Section 3 of this Agreement or in the
Plan, the Option shall vest as follows: (a) the right to exercise
the Option and purchase * shares shall vest on *, (b) the right to
exercise the Option and purchase * shares shall vest on *, and (c)
the right to exercise the Option and purchase the remaining *
shares shall vest on *.
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; (d) 3 months following the date of
Grantee’s involuntary termination of employment with
Syntroleum not for cause; or (e) the date 30 days following the
date upon which Grantee’s employment with Syntroleum
terminates for any reason other than those described in subsections
(b), (c), or (d) of this Section 3 .
4. Exercise .
4.01 During the Option exercise
period, it may be exercised in full or in part only by Grantee (or
Grantee’s guardian or legal representative) or, in the event
or Grantee’s death, by the person or persons to whom the
Option was transferred by will or the laws of decent and
distribution, by delivering or mailing written notice of the
exercise to the Secretary of Syntroleum in the form shown in
Exhibit A. 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.
Syntroleum - Stock Option Agreement
CONFIDENTIAL
4.02 Subject to the provisions of
Section 4.04 and 4.05 , 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 (as defined in the Plan) 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 Notwithstanding the provisions
of Section 4.02 , shares acquired through the exercise of an
ISO granted under the Plan may be used as payment at exercise under
this Agreement only if such shares have been held for at least six
months following such acquisition.
4.04 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
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, all pursuant to rules adopted by and subject to the consent
of the Committee. Subject to the consent of the Committee, Grantee
will be issued a certificate for new shares of Common Stock
representing the number of shares as to which the Option is
exercised, less the number of shares described in the notarized
statement as constituting payment under the Option.
4.05 In lieu of payment of the
exercise price in cash, shares of Syntroleum Common Stock, or by
delivery of a statement of ownership pursuant to Section 4.05,
Grantee may, if the Committee consents and pursuant to its rules,
pay the exercise price for shares as to which the Option is
exercised by surrendering his right to exercise a portion of the
Option equal in value to said exercise price. Grantee shall then
receive a certificate for the number of shares issuable pursuant to
Grantee’s exercise of the Option, red
