Ex. 10.82
Syntroleum — Management Stock Option Agreement

CONFIDENTIAL
This stock option Agreement (the “Agreement”) is effective as of the Grant Date
set forth in the attached Notice. The Agreement is by and between Syntroleum
Corporation, a Delaware corporation (“Syntroleum”), and the Grantee listed in
the Notice. The Agreement evidences the grant by Syntroleum of the Option to
Grantee to purchase the number of shares of Syntroleum common stock, par value
$0.01 per share Common Stock indicated in the Notice. The grant is made pursuant
to action of the Board of Directors and Grantee’s acceptance of the Option in
accordance with the provisions of the Plan. Syntroleum and Grantee agree as
follows.

1.  
Definitions

  1.1.  
“Change in Control” shall be deemed to occur if any person or group within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
shall become the beneficial owner of 25% or more of the shares of Syntroleum
Common Stock then outstanding. A Change of Control shall not have occurred if
the beneficial owner is Syntroleum, a subsidiary of Syntroleum or an employee
benefit plan of Syntroleum.
    1.2.  
“Common Stock” means the shares of Syntroleum common stock, par value $0.01 per
share.

  1.3.  
“Committee” means the Nominating and Compensation Committee of Syntroleum’s
Board of Directors.
    1.4.  
“Employee in Good Standing” means a Syntroleum employee who is not in violation
of any of the following terms and conditions of his employment agreement and/or
general company policy;

  1.4.1.  
has not threatened and has no pending legal or quasi-legal proceeding against
Syntroleum including but not limited to negotiations (related to employment),
mediations, arbitration or litigation;
    1.4.2.  
is current in all monies owed Syntroleum;
    1.4.3.  
has been in the continuous employment of Syntroleum from the Grant Date; 1.4.4.
is not on performance or disciplinary probation,
    1.4.5.  
is not under felony indictment;
    1.4.6.  
has not resigned. Authorized leaves of absence from Syntroleum shall not
constitute a resignation/termination of employment for purposes of this
Agreement. For purposes of this Agreement, an authorized leave of absence shall
be an absence while Grantee is on military leave, sick leave, or other bona fide
leave of absence so long as Grantee’s right to employment with Syntroleum is
guaranteed by statute or contract and is mandatory in nature.

  1.5.  
“Exercise Price” means the price set out in line 5 of Exhibit A of this
Agreement

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

  1.6.  
“Good Reason” means

  1.6.1.  
the assignment to the Grantee of any duties that are materially inconsistent
with the Grantee’s position or any other assignment that results in a material
diminution of the Grantee’s position, authority or responsibilities (excluding
performance or disciplinary action) that are not generally imposed on Syntroleum
employees as a whole. Good Reason does not include any isolated or inadvertent
action not taken in bad faith and remedied by Syntroleum in the normal course of
business after receipt of written notification.

  1.6.2.  
the assignment of the Grantee to an office outside the Tulsa metropolitan area
unless the assignment is necessary in order to complete a Syntroleum project, is
not intended to be permanent, does not last for more than twelve (12) months and
for which Syntroleum compensates the Grantee as per common industry practices
(if any).

  1.7.  
“Grant Date” means the date set out in line 3 of Exhibit A of this Agreement.

  1.8.  
“Grantee” means the person set out in line 1 of Exhibit A of this Agreement.

  1.9.  
“Incentive Stock Option(s)” or “Option(s)” means the grant by Syntroleum to
Grantee of the right to purchase shares of Common Stock pursuant to the terms of
this Agreement and the Plan. 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.

  1.10.  
“Notice” means Exhibit A attached to this Agreement.

  1.11.  
“Performance Test” has the definition set out in Exhibit A of the Site License
Agreement attached to the Biofining Master License Agreement between Syntroleum
Corporation and Dynamic Fuels dated June 22, 2007.

  1.12.  
“Plan” means the Syntroleum Corporation 2005 Stock Incentive Plan as amended

  1.13.  
“Plant” means the Dynamic Fuels bio-refinery located in Geismar, Louisiana.

2.  
Vesting: The Option shall vest as indicated in the Notice except as otherwise
provided herein.

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

3.  
Exercise Period: The vested portion of the Option may be exercised from time to
time with respect to any number of shares on any regular business day at
Syntroleum’s offices until the earliest to occur of the following dates subject
to a ten thousand (10,000) share minimum or balance of ownership whichever is
less.

  3.1.  
30 month period after the first running of the Plant Performance Test if the
Grantee is an Employee in Good Standing;

  3.2.  
30 month period after the first running of the Plant Performance Test if the
Grantee’s employment is terminated without cause or the Grantee resigns for Good
Reason, or

  3.3.  
30 month period after the first running of the Plant Performance Test if
Grantee’s termination of employment with Syntroleum is by reason of death or
disability or retirement, or

  3.4.  
10 business days following the date of Grantee’s termination of employment for
any other reason, or

  3.5.  
the tenth anniversary of the Grant Date. [This language is required in order for
the Option to qualify as an ISO.]

4.  
Exercise:

  4.1.  
The Option may be exercised only by Grantee or, in the event or Grantee’s death,
by the person to whom the Option was transferred by delivering or mailing
written notice of the exercise to the Secretary of Syntroleum in the form shown
in Exhibit B. 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. All legal
expenses incurred by Syntroleum in exercising the Option will be to the
Grantee’s account.

  4.2.  
The written notice of exercise will be effective and the Option shall be deemed
exercised to the extent specified in the notice on the date one day after the
written notice is received by the Secretary of Syntroleum at its offices during
regular business hours and is accompanied by full payment of the exercise price
for the shares as to which the Option is exercised in certified funds.

  4.3.  
In the event of a Change in Control, the Option will be canceled, and Syntroleum
will issue to the Grantee Common Stock equal in number to the gross number of
shares that would have been acquired upon the exercise of the remaining
unexercised portion of the Option. Grantee is responsible for its tax
obligations.

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

5.  
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 4.0, or upon the occurrence of a Change in Control, the
Secretary of Syntroleum shall cause ownership of the appropriate number of
shares of Syntroleum Common Stock to be issued to the person exercising the
Option or the person entitled to receive shares by reason of the Change in
Control by delivering to such person a certificate for such number of shares
registered in the name of such person. Each such certificate shall bear a legend
describing, to the extent applicable, the restrictions imposed by applicable
state and federal securities laws. Notwithstanding the foregoing, if Syntroleum
requires payment of any tax required by law to be withheld with respect to a
Notice or a Change in Control, the Secretary shall not transfer ownership of
shares until the required payment is made. Syntroleum reserves the right to
withhold cash from salary or other cash payments made to the Grantee or to
retain shares of Common Stock that would otherwise be transferred pursuant to
the exercise of an Option or the Change in Control in order to satisfy the tax
withholding obligations of Syntroleum resulting from the exercise of an Option
or the Change in Control.

6.  
Miscellaneous.

  6.1.  
The rights under this Agreement may not be transferred except by will or the
laws of descent and distribution.

  6.2.  
The rights under this Agreement may be exercised during his lifetime only by
Grantee. The terms of the Option shall be binding upon the executors,
administrators, heirs, and successors of Grantee.

  6.3.  
The Option may not be exercised, and the exercise period shall be extended day
for day, if the Committee determines that the issuance of shares of Syntroleum’s
Common Stock upon such exercise of the Option would constitute a violation of
any applicable federal or state securities or other law or regulation or
restrict Syntroleum’s ability to use its net operating loss for tax purposes;
provided however, that the exercise period shall in no event be extended beyond
the tenth anniversary of the Grant Date. In addition, the net operating loss
restriction on the Grantee’s ability to exercise will not apply in the event of
a Change in Control. 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.

  6.4.  
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.

  6.5.  
The number of shares of Common Stock subject to the Options will be adjusted as
appropriate to avoid dilution of the Grantee’s Option rights pursuant to the
Plan, and Sections 409A and 424 of the Internal Revenue Code of 1986, as
amended. No adjustment to the number of shares subject to the Options will be
made if additional shares are issued in the following situations:

  6.5.1.  
shares issued and reserved as employee shares as described in the Plan;

  6.5.2.  
shares issued for consideration other than cash pursuant to a merger,
consolidation, acquisition, or similar business combination approved by the
Board;

  6.5.3.  
shares issued at or above market price;

  6.5.4.  
shares issued pursuant to any equipment loan or leasing arrangement, real
property leasing arrangement or debt financing from a bank or similar financial
institution approved by the Board.

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

  6.6.  
Grantee agrees not to disclose to any person, directly or indirectly, the terms
of this Agreement.

  6.7.  
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 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.

  6.8.  
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 in Tulsa
Oklahoma.

  6.9.  
Any dispute arising out of or in connection with this Agreement, including any
question regarding its existence, validity or termination, shall be addressed
exclusively in the following priority order:

  6.9.1.  
Negotiation. Syntroleum and the Grantee (the “Parties” or “Party”) shall arrange
a meeting at the Syntroleum office in person to discuss the issues of each Party
and negotiate for a resolution of the dispute. The period of negotiation shall
extend no longer than thirty (30) calendar days from the first meeting of the
negotiators. Each Party shall work in good faith to accommodate their schedules
to allow a meeting to occur.

  6.9.2.  
Mediation. If the Parties have failed to resolve the dispute by negotiation, the
Parties shall submit to mediation prior to seeking resolution by binding
arbitration in Tulsa, OK. The Parties will cooperate with one another in
selecting a mediator from the American Arbitration Association panel of
neutrals, which shall be requested to promptly schedule the mediation
proceedings. The Parties covenant that they will participate in the mediation in
good faith and they will each bear their own costs. All offers, promises,
conduct and statements, whether oral or written, made in the course of the
mediation by any of the parties, their agents, employees, experts and attorneys,
and by the mediator, are expected to be treated as confidential, privileged and
inadmissible for any purpose, including impeachment, in any arbitration or other
proceeding involving the Parties, provided that evidence that is otherwise
admissible or discoverable shall not be rendered inadmissible or
non-discoverable as a result of its use in the mediation. If the dispute is not
resolved within thirty (30) calendar days from the date of the submission of the
dispute to mediation, the administration of the arbitration shall proceed
forthwith. The mediator shall be disqualified from serving as arbitrator in the
case. This clause shall not preclude the Parties from seeking provisional
remedies in aid of arbitration, such as a temporary or permanent injunction or
restraining order to prevent a continuing harm to a Party, from a court of
appropriate jurisdiction.

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

  6.9.3.  
Arbitration. Within five (5) business days after the Parties have failed to
resolve the dispute by negotiation, the dispute shall be resolved by binding
arbitration in Tulsa, Oklahoma, before three (3) arbitrators. The arbitration
shall be administered by the American Arbitration Association pursuant to its
Commercial Rules for Arbitration. The arbitrators’ award may be enforced in
State District Courts in Tulsa County, Oklahoma, the United States District
Court for the Northern District of Oklahoma or in any other court having
jurisdiction over the Parties. The Parties covenant that they will participate
in the arbitration in good faith, and that they will each bear their own costs.
This clause shall not preclude the Parties from seeking provisional remedies in
aid of arbitration, such as a temporary or permanent injunction or restraining
order to prevent a continuing harm to a Party, from a court of appropriate
jurisdiction.

  6.9.4.  
The Parties agree that the dispute resolution priority set forth herein is a
material term of this agreement and that the damages for failure to comply with
the dispute resolution priority are and would be difficult to measure.
Consequently, the Parties agree that in the event a Party elects to ignore the
dispute resolution priority order requirements set forth in this Section, the
Party making the election shall be obligated for all (internal and external)
costs, fees and expenses, including attorneys’ fees, of the other Party,
regardless of how the dispute is ultimately decided. In other words, any Party
electing to forego the dispute resolution priority in Section 5.9 also elects to
pay the fees, costs and expenses of the other Party even if the electing Party
ultimately prevails.

  6.10.  
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. Unless and until some other
address is designated, all notices or communications by Grantee to Syntroleum
shall be mailed or delivered to Syntroleum at the offices of its Secretary at
5416 S Yale Suite 400, Tulsa, Oklahoma 74135, and all notice or communications
by Syntroleum to Grantee may be given to Grantee personally or may be mailed to
him.

  6.11.  
This Agreement and the grant of the Option pursuant to this Agreement are
subject to the terms of the Plan, and all the provisions applicable to Options
in general and Incentive Stock Option (ISO) shares as described in Section
422(b) of the Internal Revenue Code of 1986, as amended in particular in the
Plan are incorporated by reference into this Agreement; however, where the terms
of the Plan and the terms of this Agreement are inconsistent, the terms of this
Agreement shall govern.

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

7.  
Additional Payments.

  7.1.  
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that the Grantee shall become entitled to payments and/or
benefits provided by this Agreement or any other agreement or arrangement
between Syntroleum and Grantee resulting from a change of ownership or effective
control of Syntroleum covered by Section 280G(b )(2) of the Code as a result of
such change in ownership or effective control of Syntroleum (a “Payment”), and
if the payment would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Grantee with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then the Grantee
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Grantee of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Grantee
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.

  7.2.  
All determinations required to be made under this paragraph 7, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by a nationally or regionally recognized accounting firm (the “Accounting
Firm”) which shall provide detailed supporting calculations both to Syntroleum
and the Grantee within 15 business days of the receipt of notice from the
Grantee that there has been a Payment, or such earlier time as is requested by
Syntroleum. The Accounting Firm shall be jointly selected by Syntroleum and the
Grantee and shall not, during the two years preceding the date of its selection,
have acted in any way on behalf of Syntroleum or its affiliated companies. All
fees and expenses of the Accounting Finn shall be borne solely by Syntroleum.
Any Gross-Up Payment, as determined pursuant to this paragraph 7, shall be paid
by Syntroleum to the Grantee within five (5) days of the receipt of the
Accounting Firm’s determination. If the Accounting Firm determines that no
Excise Tax is payable by the Grantee, it shall furnish the Grantee with a
written opinion, based upon “substantial authority” (within the meaning of
Section 6230 of the Code), that failure to report the Excise Tax on the
Grantee’s applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon Syntroleum and the Grantee, absent
manifest error. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by Syntroleum should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder. In the event that Grantee
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Syntroleum to or for the benefit of the
Grantee.

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

  7.3.  
Compliance With Section 409A. Notwithstanding anything to the contrary herein,
if any of the benefits payable pursuant to this Agreement shall be deemed to
constitute nonqualified deferred compensation, within the meaning of
Section 409A of the Internal Revenue Code, then the payment of such benefits
shall be delayed until the earliest date on which such benefits can be paid
without subjecting the Grantee to the payment of any interest or tax penalty
which may be imposed under Section 409A of the Internal Revenue Code, but in no
event later than six months and five days after the Employee’s separation from
service, within the meaning of Section 409A.

8.  
Previous Agreement. Grantee agrees to waive any rights she has under the
restricted stock agreement between Grantee and Syntroleum dated July 12th, 2007,
and that agreement is hereby terminated. The restricted stock issued to Grantee
pursuant to that agreement and held by Syntroleum shall be canceled except for
15,000 shares of such restricted stock which shall remain issued and outstanding
and held by Grantee, fully paid, and free and clear of any liens, claims or
encumbrances. Pursuant to the terms of the Plan, the Shares of Common Stock
subject to that agreement shall not count against the number of Shares of Common
Stock available for Awards under the Plan and shall be available for future
Awards.

IN WITNESS WHEREOF, Syntroleum, by its duly authorized officer, and Grantee have
signed this Agreement as of the date first above written.

             
SYNTROLEUM CORPORATION
  Grantee  
 
            Name: Robert B. Rosene, Jr.                                        
  Name:   Karen Gallagher
 
   
 
            Signature: /s/ Robert B. Rosene, Jr.   Signature: /s/ Karen L.
Gallagher
 
            Date: 11/21/08   Date: 11/21/08
 
           
Address: 5416 South Yale, Suite Tulsa OK 74135
           

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL
Exhibit A
Notice of Stock Option Grant

1.  
Name (“Grantee”): Karen Gallagher
  2.  
Address: 5520 S. Yorktown Pl, Tulsa, OK 74105
  3.  
Date of Grant (“Grant Date”): November 21, 2008
  4.  
Number of shares of Common Stock subject to Option: 485,000
  5.  
Exercise Price per share of common stock (“Exercise Price”): 66 Cents (.66)
  6.  
Vesting Schedule:

  a.  
Options with respect to 60,000 shares of Syntroleum common stock may be
exercised at any time after the Grant Date, subject to the limitation set forth
in the Agreement.

  b.  
Options with respect to 60,000 shares of Syntroleum common stock may be
exercised at any time after the Committee certifies to the Board of Directors
that substantially all the financing for the Plant has occurred.
    c.  
Options with respect to 65,000 shares of Syntroleum common stock may be
exercised at any time after the Committee certifies to the Board of Directors
that mechanical completion of the Plant has occurred.
    d.  
The remaining shares of Syntroleum common stock subject to this option grant may
be exercised at any time after the Committee certifies to the Board of Directors
that the Plant has successfully completed the Performance Test.

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL
EXHIBIT B
ELECTION OF EXERCISE OF STOCK OPTIONS
The undersigned hereby gives notice to Syntroleum Corporation (“Syntroleum”)
that the undersigned is exercising stock options issued to him pursuant to the
terms of the Stock Option Agreement between Syntroleum and the undersigned,
dated as of  _____, to purchase  _____  shares of the common stock of Syntroleum
(the “Agreement”). The undersigned acknowledges that no shares will be issued
before Syntroleum receives payment of the purchase price for the shares of
common stock and for payment of any tax withholding obligation.
DATED this  _____  day of _____, 20  _____.

         
 
 
 
   
 
  Name    
 
       
 
       
 
  Signature    
 
       
 
       
 
  Address    
 
       
 
       
 
  Social Security Number    

 

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