Exhibit 10.1

 

NONSTATUTORY STOCK OPTION AGREEMENT
SYNTHESIS ENERGY SYSTEMS, INC.
2015 LONG TERM INCENTIVE PLAN

 

This Stock Option Agreement (the “Agreement”), is entered into effective as of
_____ between Synthesis Energy Systems, Inc., a Delaware corporation
(the “Company”), and __________ (the “Optionee”).

 

WITNESSETH:

 

WHEREAS, the Company has adopted the Synthesis Energy Systems, Inc. 2015 Long
Term Incentive Plan (as amended from time to time, the “Plan”), to encourage
officers, employees, outside directors and consultants of the Company and its
Subsidiaries to acquire or increase their ownership interest in the Company and
to provide a means whereby they may develop a sense of proprietorship and
personal involvement in the development and financial success of the Company,
and to encourage them to remain with and devote their best efforts to the
business of the Company thereby advancing the interests of the Company and its
stockholders; and

 

WHEREAS, the Plan provides that such selected individuals may be granted a
certain number of Options (as defined in the Plan) to purchase shares of the
Common Stock, par value $.01 per share (“Common Stock”), of the Company to
provide them with an ownership interest in the growth of the Company; and

 

WHEREAS, the Optionee has been selected to receive such award.

 

NOW, THEREFORE, in consideration of the premises, the terms and conditions set
forth herein, the mutual benefits to be gained by the performance thereof and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

1.                  Grant of Option. Pursuant to the Plan, the Company grants
Optionee an option (the “Option” or “Stock Option”) to purchase ______ shares
(the “Optioned Shares”) of Common Stock at an Option Price equal to _____ per
share. The Date of Grant of this Stock Option is _________. The “Option Period”
shall commence on the Date of Grant and shall expire on the date immediately
preceding the tenth (10th) anniversary of the Date of Grant. The Stock Option is
a Nonstatutory Stock Option.

 

2.                  Subject to Plan. The Stock Option and its exercise are
subject to the terms and conditions of the Plan, and the terms of the Plan shall
control to the extent not otherwise inconsistent with the provisions of this
Agreement. The capitalized terms used herein that are defined in the Plan shall
have the same meanings assigned to them in the Plan. The Stock Option is subject
to any rules promulgated pursuant to the Plan by the Committee.

 

3.                  Vesting: Time of Exercise. Except as specifically provided
in this Agreement and subject to certain restrictions and conditions set forth
in the Plan, the Stock Option shall be vested and exercisable as follows (it
being understood that the right to purchase Option Shares shall be cumulative so
that the Optionee may purchase on or after any such anniversary and during the
remainder of the Option Period those quantifies of Option Shares which the
Optionee was entitled to purchase but did not purchase during any preceding
period or periods):

 

 

 

With respect to _____ of the total Optioned Shares, the Stock Option shall vest
and become exercisable on May 31, 2017 provided the Optionee is continuously
employed by (or, if the Optionee is a consultant or an Outside Director, is
providing services to) the Company or a Subsidiary from the Date of Grant
through that date.

 

With respect to _____ of the total Optioned Shares, the Stock Option shall vest
and become exercisable on June 30, 2017 provided the Optionee is continuously
employed by (or, if the Optionee is a consultant or an Outside Director, is
providing services to) the Company or a Subsidiary from the Date of Grant
through that date.

 

With respect to _____ of the total Optioned Shares, the Stock Option shall vest
and become exercisable on July 31, 2017 provided the Optionee is continuously
employed by (or, if the Optionee is a consultant or an Outside Director, is
providing services to) the Company or a Subsidiary from the Date of Grant
through that date.

 

With respect to _____ of the total Optioned Shares, the Stock Option shall vest
and become exercisable on August 31, 2017 provided the Optionee is continuously
employed by (or, if the Optionee is a consultant or an Outside Director, is
providing services to) the Company or a Subsidiary from the Date of Grant
through that date.

 

With respect to _____ of the total Optioned Shares, the Stock Option shall vest
and become exercisable on September 30, 2017 provided the Optionee is
continuously employed by (or, if the Optionee is a consultant or an Outside
Director, is providing services to) the Company or a Subsidiary from the Date of
Grant through that date.

 

With respect to _____ of the total Optioned Shares, the Stock Option shall vest
and become exercisable on October 31, 2017 provided the Optionee is continuously
employed by (or, if the Optionee is a consultant or an Outside Director, is
providing services to) the Company or a Subsidiary from the Date of Grant
through that date.

 

4.                  Term; Forfeiture. In the event of Optionee’s termination of
employment (or consulting agreement in the event Optionee is a consultant) with
the Company and its Subsidiaries (in each case, a “Termination”) for any reason
other than for Cause (as defined below) or Optionee’s death or Disability, the
Option outstanding on such date of Termination, to the extent vested on such
date, may be exercised by Optionee (or, in the event of Optionee’s subsequent
death, by Optionee’s Heir (as defined below)) within six (6) months following
such Termination, but not thereafter. However, in no event shall the Option be
exercisable after the tenth (10th) anniversary of the Date of Grant. To the
extent the Option is not vested on Optionee’s date of Termination, the Option
shall automatically lapse and be canceled unexercised as of such date.

 

In the event Optionee’s employment or consulting agreement is terminated for
Cause, any Option granted pursuant to this Agreement whether vested or unvested
shall be forfeited upon the date of Optionee’s Termination. Termination for
“Cause” shall be termination resulting from (i) the continuing and material
failure by the Optionee to fulfill the Optionee’s duties as an employee or
consultant of the Company or willful misconduct or gross neglect in the
performance of such duties, (ii) committing fraud, misappropriation or
embezzlement in the performance of the Optionee’s duties as an employee or
consultant of the Company, or (iii) the Optionee’s commission of an felony for
which the Optionee is convicted and which, as determined in good faith by the
Company, constitutes a crime involving moral turpitude. For the purposes of the
definition of Cause, the term “Company” includes Subsidiaries of the Company.

 

 2 

 

In the event of Optionee’s Termination by reason of death or Disability, the
Option shall be fully vested on such date of termination and may be exercised by
Optionee or, in the event of Optionee’s death, by the person to whom Optionee’s
rights shall pass by will or the laws of descent and distribution (“Heir”), at
any time within the twelve (12) month period beginning on Optionee’s
Termination, but not thereafter. However, in no event shall the Option be
exercisable after the tenth (10th) anniversary of the Date of Grant. For the
purposes of this Agreement, Disability shall mean disability as defined in any
employment agreement between Optionee and the Company or, if there is no such
definition or agreement, shall mean Optionee’s inability, due to physical or
mental incapacity, to substantially perform his duties and responsibilities for
a period of ninety (90) days during any twelve-month period as determined by the
Committee. Optionee agrees to submit to any examination that is necessary for a
determination of Disability and agrees to provide any information necessary for
a determination of Disability, including any information that is protected by
the Health Insurance Portability and Accountability Act.

 

Notwithstanding the above, if the Optionee has an employment agreement or offer
letter with the Company, the terms of such employment agreement shall govern the
terms and conditions of the term and forfeiture of the Optioned Shares to the
extent it is inconsistent with the terms and conditions provided herein.

 

5.                  Who May Exercise. Subject to the terms and conditions set
forth in Sections 3 and 4 above, during the lifetime of the Optionee, the Stock
Option may be exercised only by the Optionee, or by the Optionee’s guardian or
personal or legal representative (in the event of his or her Disability or by a
broker dealer subject to Section 2.3 of the Plan).

 

6.                  No Fractional Shares. The Stock Option may be exercised only
with respect to full shares, and no fractional share of stock shall be issued.

 

7.                  Manner of Exercise. Subject to such administrative
regulations as the Committee may from time to time adopt, the Option may be
exercised by the delivery of written notice to the Committee or designated
Company representative setting forth the number of shares of Common Stock with
respect to which the Option is to be exercised, the date of exercise thereof
(the “Exercise Date”) which shall be at least three (3) days after giving such
notice unless an earlier time shall have been mutually agreed upon. On the
Exercise Date, the Optionee shall deliver to the Company consideration with a
value equal to the total Option Price of the shares to be purchased, payable to
the Company in full in either: (i) in cash, or (ii) subject to prior approval by
the Committee in its discretion, by withholding Shares which otherwise would be
acquired on exercise having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price, or (iii) subject to prior approval by
the Committee in its discretion, by a combination of (i), and (ii) above.

 

 3 

 

The Committee, in its discretion, also may allow the Option Price to be paid
with such other consideration as shall constitute lawful consideration for the
issuance of Shares (including, without limitation, effecting a “cashless
exercise” with a broker of the Option), subject to applicable securities law
restrictions and tax withholdings, or by any other means which the Committee
determines to be consistent with the Plan’s purpose and applicable law. A
“cashless exercise” of an Option is a procedure by which a broker provides the
funds to the Optionee to effect an Option exercise, to the extent consented to
by the Committee in its discretion. At the direction of the Optionee, the broker
will either (i) sell all of the Shares received when the Option is exercised and
pay the Optionee the proceeds of the sale (minus the Option Price, withholding
taxes and any fees due to the broker) or (ii) sell enough of the Shares received
upon exercise of the Option to cover the Option Price, withholding taxes and any
fees due the broker and deliver to the Optionee (either directly or through the
Company) a stock certificate for the remaining Shares.

 

As soon as practicable after receipt of a written notification of exercise and
full payment, the Company shall deliver, or cause to be delivered, to or on
behalf of the Optionee, in the name of the Optionee or other appropriate
recipient, Share certificates for the number of Shares purchased under the
Option. Such delivery shall be effected for all purposes when the Company or a
stock transfer agent of the Company shall have deposited such certificates in
the United States mail, addressed to Optionee or other appropriate recipient.

 

If the Optionee fails to pay for any of the Shares specified in such notice or
fails to accept delivery thereof, then the Option, and right to purchase such
Shares may be forfeited by the Company.

 

8.                  Nonassignability. The Stock Option is not assignable or
transferable by the Optionee except by will or by the laws of descent and
distribution or pursuant to a domestic relations order that would qualify as a
qualified domestic relations order as defined in Section 414(p) of the Code, if
such provision were applicable to the Stock Option and as otherwise permitted
under Section 4.2 of the Plan.

 

9.                  Rights as Stockholder. The Optionee will have no rights as a
stockholder with respect to any shares covered by the Stock Option until the
issuance of a certificate or certificates to the Optionee for the Optioned
Shares. The Optioned Shares shall be subject to the terms and conditions of this
Agreement and Plan regarding such Shares. Except as otherwise provided in
Section 10 hereof, no adjustment shall be made for dividends or other rights for
which the record date is prior to the issuance of such certificate or
certificates.

 

10.              Adjustment of Number of Optioned Shares and Related Matters.
The number of shares of Common Stock covered by the Stock Option, and the Option
Prices thereof, shall be subject to adjustment in accordance with Section 4.5 of
the Plan.

 

11.              Nonstatutory Stock Option. The Stock Option shall not be
treated as an Incentive Stock Option.

 

 4 

 

12.              Community Property. Each spouse individually is bound by, and
such spouse’s interest, if any, in any Shares is subject to, the terms of this
Agreement. Nothing in this Agreement shall create a community property interest
where none otherwise exists.

 

13.              Optionee’s Representations. Notwithstanding any of the
provisions hereof, the Optionee hereby agrees that he will not exercise the
Stock Option granted hereby, and that the Company will not be obligated to issue
any shares to the Optionee hereunder, if the exercise thereof or the issuance of
such shares shall constitute a violation by the Optionee or the Company of any
provision of any law or regulation of any governmental authority or Company
policies, or the rules of the stock exchange on which the Common Stock is
listed. Optionee acknowledges and agrees that if he or she is an officer,
director or key employee of the Company, Optionee will be subject to the
Company’s securities trading policy as it may be in effect from time to time and
which may “black out” periods of time during which the Stock Option may not be
exercised or which may also limit the amount of Shares that may be purchased or
sold to a number that is less than requested by the Optionee. Any determination
in this connection by the Company shall be final, binding, and conclusive. The
obligations of the Company and the rights of the Optionee are subject to all
applicable laws, rules, and regulations, rules of the stock exchange on which
the Common Stock is listed and policies of the Company.

 

14.              Investment Representation. The Optionee represents and warrants
to the Company that all Common Stock which may be purchased hereunder will be
acquired by the Optionee for investment purposes for his own account and not
with any intent for resale or distribution in violation of federal or state
securities laws.

 

15.              Optionee’s Acknowledgments. The Optionee acknowledges receipt
of a copy of the Plan, and represents that he or she is familiar with the terms
and provisions thereof, and hereby accepts this Option subject to all the terms
and provisions thereof. The Optionee hereby agrees to accept as binding,
conclusive, and final all decisions or interpretations of the Committee, the
Company or the Board, as appropriate, upon any questions arising under the Plan
or this Agreement.

 

16.              Governing Law. This Agreement shall be governed by, construed,
and enforced in accordance with the laws of the State of Delaware.

 

17.              No Right to Continue Service or Employment. Nothing herein
shall be construed to confer upon the Optionee the right to continue in the
employ or to provide services to the Company, its Affiliates or any Parent or
Subsidiary or their Affiliates, whether as an employee or as a consultant or as
an Outside Director, or interfere with or restrict in any way the right of the
Company or any of the other foregoing entities to discharge the Optionee as an
employee, consultant or Outside Director at any time.

 

18.              Legal Construction. In the event that any one or more of the
terms, provisions, or agreements that are contained in this Agreement shall be
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect for any reason, the invalid, illegal, or
unenforceable term, provision, or agreement shall not affect any other term,
provision, or agreement that is contained in this Agreement and this Agreement
shall be construed in all respects as if the invalid, illegal, or unenforceable
term, provision, or agreement had never been contained herein.

 

 5 

 

19.              Covenants and Agreements as Independent Agreements. Each of the
covenants and agreements that is set forth in this Agreement shall be construed
as a covenant and agreement independent of any other provision of this
Agreement. The existence of any claim or cause of action of the Optionee against
the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants and
agreements that are set forth in this Agreement.

 

20.              Entire Agreement. This Agreement together with the Plan
supersede any and all other prior understandings and agreements, either oral or
in writing, between the parties with respect to the subject matter hereof and
constitute the sole and only agreements between the parties with respect to the
said subject matter. All prior negotiations and agreements between the parties
with respect to the subject matter hereof are merged into this Agreement. Each
party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, orally or otherwise, have been made by any party or by
anyone acting on behalf of any party, which are not embodied in this Agreement
or the Plan and that any agreement, statement or promise that is not contained
in this Agreement or the Plan shall not be valid or binding or of any force or
effect.

 

21.              Parties Bound. The terms, provisions, and agreements that are
contained in this Agreement shall apply to, be binding upon, and inure to the
benefit of the parties and their respective heirs, executors, administrators,
legal representatives, and permitted successors and assigns, subject to the
limitation on assignment expressly set forth herein. No person or entity shall
be permitted to acquire any Optioned Shares without first executing and
delivering an agreement in the form satisfactory to the Company making such
person or entity subject to the restrictions on transfer contained herein.

 

22.              Modification. No change or modification of this Agreement shall
be valid or binding upon the parties unless the change or modification is in
writing and signed by the parties. Notwithstanding the preceding sentence, the
Company may amend the Plan or revoke this Stock Option to the extent permitted
by the Plan.

 

23.              Headings. The headings that are used in this Agreement are used
for reference and convenience purposes only and do not constitute substantive
matters to be considered in construing the terms and provisions of this
Agreement.

 

24.              Gender, Number and Term Optionee. Words of any gender used in
this Agreement shall be held and construed to include any other gender, and
words in the singular number shall be held to include the plural, and vice
versa, unless the context requires otherwise. Whenever the term “Optionee” is
used herein under circumstances applicable to any other person or persons to
whom this award may be assigned in accordance with the provisions of Paragraph
8, the term “Optionee” shall be deemed to include such person or persons.

 

25.              Independent Legal and Tax Advice. Optionee acknowledges that
the Company has advised Optionee to obtain independent legal and tax advice
regarding the grant and exercise of the Option and the disposition of any Shares
acquired thereby.

 

26.              Notice. Any notice required or permitted to be delivered
hereunder shall be deemed to be delivered only when actually received by the
Company or by the Optionee, as the case may be, at the addresses set forth
below, or at such other addresses as they have theretofore specified by written
notice delivered in accordance herewith:

 

 6 

 

Notice to the Company shall be addressed and delivered as follows:

 

Synthesis Energy Systems, Inc.

Three Riverway, Suite 300

Houston, Texas 77056

Attn: Corporate Secretary

Fax: (713) 579-0610

 

Notice to the Optionee shall be addressed and delivered to Optionee’s address as
set forth in the Company’s records.

 

27.              Tax Requirements.

 

Tax Withholding. This Option is subject to and the Company shall have the power
and the right to deduct or withhold, or require the Optionee to remit to the
Company, an amount sufficient to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of the Plan and this Option.

 

Share Withholding. With respect to tax withholding required upon the exercise of
Stock Options or upon any other taxable event arising as a result of the Stock
Option, Optionee may elect, subject to the approval of the Committee in its
discretion, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the
tax is to be determined equal to the minimum statutory total tax which could be
imposed on the transaction. All such elections shall be made in writing, signed
by the Optionee, and shall be subject to any restrictions or limitations that
the Committee, in its discretion, deems appropriate. Any fraction of a Share
required to satisfy such obligation shall be disregarded and the amount due
shall instead be paid in cash by the Optionee.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Optionee, to evidence his consent and approval
of all the terms hereof, has duly executed this Agreement, as of the date
specified in Section 1 hereof.

 

 

 

 

 

 

 

 

 

 

 7 

 

COMPANY:

SYNTHESIS ENERGY SYSTEMS, INC.

 

 

By: ________________________________

Name:

Title:

 

OPTIONEE:

 

 

By: ________________________________

Name:

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8