Document:

exv10w7

 Exhibit 10.7  

SEPARATION AGREEMENT AND RELEASE

     This Separation Agreement and Release (the “Agreement”) is dated March 31, 2009, and is
effective on the date described in Section 15. This Agreement is made as a mutually agreed
compromise between the Parties (as defined below) for the complete and final settlement of all
claims, differences, and alleged causes of action existing between them as of the Effective Date.

PARTIES

     The Parties to this Agreement are Synthesis Energy Systems, Inc. (the “Company”) and David
Eichinger (the “Executive”). The Company and the Executive are referred to collectively as the
“Parties.”

PREAMBLE

     WHEREAS, the Executive was previously employed as the President and Chief Executive Officer of
the Company, pursuant to that certain Employment Agreement dated May 30, 2006 (as amended, the
“Employment Agreement”);

     WHEREAS, the Executive and the Company also entered into that certain Indemnification
Agreement dated August 13, 2008 (the “Indemnification Agreement”);

     WHEREAS, the Parties intend to terminate the Employment Agreement as of the Effective Date
(except with respect to the Executive’s and the Company’s continuing obligations under Sections 4
— Restrictive Covenants, 9 — Waiver of Breach, 12 — Applicable Law, Jurisdiction, and 13 —
Attorney and Trial Costs of the Employment Agreement, as revised hereby) and enter into this
Agreement;

     WHEREAS, the Parties intend that this Agreement shall operate as a complete and final
settlement of all claims, differences and alleged causes of action existing between them as of the
Effective Date;

     WHEREAS, the Executive has had at least 21 days to consider this Agreement;

     WHEREAS, the Company has advised the Executive in writing to consult with independent legal
counsel and tax advisors respecting this Agreement;

     WHEREAS, the Executive has had an opportunity to consult with independent legal counsel and
tax advisors with respect to the terms, meaning and effect of this Agreement; and

     WHEREAS, the Executive understands that the Company regards the above representations as
material and that the Company is relying on these representations in entering into this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and obligations contained and
exchanged in this Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:

 

 

1. Definitions.

     1.1 “Code” shall mean the Internal Revenue Code of 1986, as amended, and the notices, rules
and regulations thereunder.

     1.2 “Company and/or its Affiliates” means and includes the Company, its Affiliates, and all of
their predecessors, successors and assigns and parents, subsidiaries, divisions or other affiliated
companies, partners, partnerships, present and former officers, directors, employees, stockholders,
agents, employee benefit plans or programs and their fiduciaries, whether in their individual or
official capacities and all of the successors and assigns of the foregoing. “Affiliates” also
includes a person or entity who, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the Company.

     1.3 “Date of Termination” means March 31, 2009.

2. Termination of the Employment Agreement. The Parties agree that the Employment
Agreement is hereby terminated and of no further force and effect as of the Effective Date, except
with respect to the Executive’s and the Company’s obligations under Sections 4 — Restrictive
Covenants, 9 — Waiver of Breach, 12 — Applicable Law, Jurisdiction, and 13 — Attorney and Trial
Costs, all of which survive the termination of the Employment Agreement; provided, that the
following amendments are hereby made to the surviving provisions of the Employment Agreement: (i)
for purposes of Section 4(a) of the Employment Agreement, the non-public information of the Company
acquired by, or disclosed to, the Executive shall include, but not be limited to, all information
related to the Company’s intellectual property, including without limitation, its U-GAS fluidized
bed gasification technology, and (ii) the third sentence of Section 4(b) of the Employment
Agreement is replaced in its entirety with the following: “As of the date hereof, the Business of
the Corporation is to develop projects or provide the technology for projects that convert coal and
coal/biomass fuels through coal gasification technology to products for the chemicals,
transportation fuels, natural gas, and power markets.” This Agreement shall have no effect on the
Indemnification Agreement, which is hereby ratified and affirmed and shall remain in full force and
effect.

3. Exchange of Equity Incentive Awards. The Executive has surrendered for cancellation all
of his currently held options, as set on Schedule I hereto, and, in exchange, effective as of the
date hereof, the Company has issued a new stock option grant to purchase 700,000 shares of the
Company’s common stock, at an exercise price of $0.66 per share. Such stock option grant shall be
fully vested as of the date hereof and shall be exercisable until March 31, 2019, the tenth
anniversary of the date hereof. Such grant shall be granted under, and be subject to, the terms
of the Company’s Amended and Restated 2005 Incentive Plan, as amended.

4. Payments to the Executive.

     4.1 In satisfaction of the bonus earned by the Executive for his service to the Company during
the year ended December 31, 2008, effective as of the date hereof, the Company has issued to the
Executive a stock option grant to acquire 68,182 shares of the Company’s common stock at an
exercise price of $0.66 per share. Such stock option grant shall be fully vested as of the date
hereof and shall be exercisable until March 31, 2019, the tenth

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anniversary of the date hereof. Such grant shall be granted under, and be subject to, the
terms of the Company’s Amended and Restated 2005 Incentive Plan, as amended.

     4.2 Provided that the Executive elects COBRA within the time period required by law, the
Company shall reimburse his payment of his COBRA premiums through (i) December 31, 2009 or (ii)
until the Executive is eligible to participate in the health insurance plan of another employer,
whichever is sooner.

5. Pay Through Date of Termination. The Executive acknowledges that he has received all
salary, wages, bonuses, accrued and unpaid vacation time, sick time or other paid time off earned,
and other compensation earned on or before the Date of Termination.

6. Resignation and Acknowledgement by the Executive. Effective as of the Date of
Termination, the Executive hereby resigns from all positions he holds as a director and officer
with the Company and/or its Affiliates. In connection with his resignation, Executive acknowledges
that he has disclosed all information to the Company and the Board of which he has knowledge which
could be expected to result in a material adverse effect on the Company, its business or its
results of operations after the Effective Date.

7. Future Services of Executive for the Company. If the Company so requests after the Date
of Termination, the Executive agrees to (i) assist the Company its contemplated transition plans,
including through service as a consultant to the Company, on such terms and conditions as the
Executive and the Company shall mutually agree; provided that, if Executive’s services as a
consultant shall be requested or required for any period longer than five days, Executive shall be
entitled to receive compensation for such services equal to a pro-rata portion of his annual base
salary as of the Effective Date, to be pro-rated based upon the portion of a calendar year that he
serves as a consultant, and (ii) cooperate with the Company in the resolution of any pending or
future litigation that relates to the time during which the Executive served as an employee of the
Company.

8. Releases

     8.1 Release by the Executive. The Executive unconditionally, fully and forever
waives, releases, discharges, agrees to hold harmless, and promises not to sue the Company and/or
its Affiliates, from and for any claim, action or right of any sort, known or unknown, arising on
or before the Effective Date.

          a. This release includes, but is not limited to, any claim arising out of or related to the
following: any claim for any wages, salary, compensation, sick time, vacation time, paid leave or
other remuneration of any kind; any claim for additional or different compensation or benefits of
any sort, including any participation in any severance pay plan; any claim under any stock option
grant issued by the Company to the Executive (other than the grants pursuant to Sections 3 and 4
hereof), the Company’s Amended and Restated 2005 Incentive Plan, as amended, or any other oral or
written agreement or plan regarding an equity incentive award of Executive; any claim of
discrimination or retaliation on the basis of age, race, sex, religion, marital status, sexual
preference, national origin, handicap or disability, veteran status, or special disabled veteran
status; any claim arising under Title VII of the Civil Rights

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Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967,
the Executive Retirement Income Security Act of 1974, the Americans with Disabilities Act, the
Family and Medical Leave Act, the Fair Labor Standards Act of 1938, the Texas Commission on Human
Rights Act, Chapter 451 of the Texas Labor Code, or the Texas Payday Law, as such statutes may be
amended from time to time; any other claim based on any statutory prohibition; any claim arising
out of or related to an express or implied employment contract, any other contract affecting terms
and conditions of employment, or a covenant of good faith and fair dealing; any tort claim or other
claim for personal injury, death or property damage or loss; any claim for fraud or
misrepresentation; and any personal gain with respect to any claim arising under any whistleblower
or qui tam provisions of any state or federal law.

          b. The Executive represents that the Executive has read and understands this release provision
and that rights and claims under the Age Discrimination in Employment Act of 1967 are among the
rights and claims against the Company that the Executive is releasing. The Parties further
acknowledge and agree that the Executive is not releasing any of the following: (i) any rights or
claims arising after the Date of Termination, (ii) any rights or claims arising from or related to
any obligations that are stated or affirmed in this Agreement, (iii) any rights or claims for
indemnification pursuant to any applicable contract, policy, bylaw, or law (including but not
limited to the Indemnification Agreement), (iv) any rights or claims under any agreement or plan
governing the Executive’s stock option awards granted pursuant to Sections 3 and 4 hereof, and (v)
any rights or claims that may not be released as a matter of law (for example, claims for
unemployment insurance).

     8.2 Release by the Company. The Company unconditionally, fully and forever waives,
releases, discharges, agrees to hold harmless, and promises not to sue the Executive and/or any of
the Executive’s heirs, administrators, successors and/or assigns, from and for any claim, action or
right of any sort, known or unknown, arising on or before the Effective Date. The parties further
acknowledge and agree that the Company is not releasing any of the following: (i) any rights or
claims arising after the Date of Termination; (ii) any rights or claims arising from or related to
any obligations, agreements, representations or covenants that are stated or affirmed in this
Agreement; (iii) any rights or claims under any agreement or plan governing the Executive’s stock
option awards granted pursuant to Sections 3 and 4 hereof; and/or (iv) any rights or claims that
may not be released as a matter of law.

     9. Consideration. As consideration for the Executive’s execution and performance of his
obligations under this Agreement, the Company (i) has granted the release set forth in Section 8.2
of this Agreement and (ii) will perform its remaining obligations pursuant to this Agreement. The
Executive agrees that the release set forth in Section 8.2 of this Agreement is in addition to
anything of value which the Executive is already entitled from the Company.

     10. No Other Claims. The Executive represents that the Executive has not filed or
authorized the filing of any complaints, charges or lawsuits against the Company and/or its
Affiliates with any federal, state or local court, governmental agency, or administrative agency,
and that if, unbeknownst to the Executive, any such complaint has been filed on the Executive’s
behalf, the Executive will use the Executive’s best efforts to cause it to be withdrawn immediately
and dismissed with prejudice.

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     11. Confidentiality. Both Parties shall keep strictly confidential all the terms and
conditions, including amounts payable, in the Agreement and shall not disclose them to any person
other than legal and/or financial advisors, government officials who seek such information in the
course of their official duties, individuals at the Company responsible for implementing the
Agreement, and the Executive’s spouse, unless compelled to do so by law or regulation, or business
necessity (including the requirement to file this Agreement with the Securities and Exchange
Commission or tax reporting obligations). Nothing in this Section is intended to prevent the
Executive from disclosing the fact that he was employed by the Company or from describing his
employment duties.

     12. Consultation With Counsel. The Company advises the Executive to consult with
independent legal counsel and tax advisors prior to executing this Agreement, and the Executive
acknowledges being given that advice. The Executive acknowledges that Porter & Hedges, LLP is
acting solely as counsel to the Company with respect to this Agreement.

     13. No Defamatory Statements. The Executive agrees that he will refrain from making any
representation, statement, comment or any other form of communication (hereinafter collectively
referred to as “representation”), whether written or oral, to any person or entity, including but
not limited to the principals, officers, directors, employees, advisors, agents, customers,
suppliers and competitors of the Company and/or its Affiliates, or any government officials, which
representation has the effect or tendency to disparage, denigrate, or otherwise reflect negatively
on the Company and/or its Affiliates and/or their business, officers, directors, shareholders,
employees, agents, advisors or investors. The Company agrees it will take all reasonable steps to
ensure that the Company and its officers, directors, and employees refrain from making any external
representation that would have the effect or tendency to disparage, denigrate, or otherwise reflect
negatively on the Executive.

     14. Return of Company Materials. The Executive agrees to deliver to the Company promptly
after the Date of Termination all originals and copies of Company materials and all other property
of the Company and/or its Affiliates in the Executive’s possession, custody or control.

     15. Revocation of Agreement; Effective Date. The Executive, at the Executive’s sole
discretion, may revoke this Agreement on or before the expiration of seven calendar days after
signing it. Revocation shall be in writing and effective upon dispatch to the following: Chief
Accounting Officer, Synthesis Energy Systems, Inc., Three Riverway, Suite 300, Houston, Texas
77056. If the Executive elects to revoke the Agreement, all of the provisions of the Agreement
shall be void and unenforceable. If the Executive does not so elect, the Agreement shall become
effective at the expiration of the revocation period (i.e., on the eighth day after the Executive
signs the Agreement) (the “Effective Date”).

     16. Miscellaneous.

     16.1 The Parties acknowledge that this Agreement is the result of a compromise and shall never
be construed as, or said by either of them to be, an admission by the other of any liability,
wrongdoing, or responsibility. The Parties expressly disclaim any such liability, wrongdoing,
fault, or responsibility.

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     16.2 This Agreement constitutes the entire agreement between the Parties, except to the extent
that it expressly incorporates provisions of the Employment Agreement. This Agreement shall have
no effect on the Indemnification Agreement and any agreement or plan governing the Executive’s
equity incentive awards granted pursuant to Sections 3 and 4 hereof. This Agreement may be
executed in identical counterparts, each of which shall constitute an original and both of which
shall constitute one and the same agreement. Except as expressly provided herein, this Agreement
supersedes the Employment Agreement, each stock option grant issued by the Company to the Executive
(other than the grants pursuant to Sections 3 and 4 hereof), and any severance benefit plan or
program and any bonus program at the Company and/or its Affiliates.

     16.3 The Parties understand and agree that any breach of the terms of this Agreement may give
rise to liability for money damages and other legal or equitable relief.

     16.4 The Parties warrant that no representations have been made other than those contained in
the written provisions of this Agreement, and that they do not rely on any representations not
stated in this Agreement.

     16.5 The Parties further warrant that they or their undersigned representatives are legally
competent and fully authorized to execute and deliver this Agreement.

     16.6 The Parties confirm they have had the opportunity to have this Agreement explained to
them by independent legal counsel and tax advisors of their choice, and that they execute this
Agreement freely, knowingly and voluntarily. The Company is relying on its own judgment and on the
advice of its independent legal counsel and tax advisors and not upon any recommendation of the
Executive or his agents, independent counsel or other representatives. Likewise, the Executive is
relying on his own judgment and on the advice of his independent legal counsel and tax advisors,
and not upon any recommendation of the Company or its directors, officers, employees, agents,
independent counsel or other representatives. By voluntarily executing this Agreement, both
Parties confirm their competence to understand and do hereby accept the terms of this Agreement as
resolving fully all differences, disputes and claims that may exist within the scope of this
Agreement.

     16.7 This Agreement may not be modified or amended except by a writing signed by both Parties.
No waiver of this Agreement or of any of the promises, obligations, terms, or conditions contained
in it shall be valid unless it is in writing signed by the Party against whom the waiver is to be
enforced. The waiver by either Party hereto of a breach of any provision of this Agreement shall
neither operate nor be construed as a waiver of any subsequent breach by any Party. Except as
expressly provided for herein, the failure of either Party hereto to take any action by reason of
any breach will not deprive such Party of the right to take action at any time while such breach
occurs.

     16.8 If any part or any provision of this Agreement shall be finally determined to be invalid
or unenforceable under applicable law by a court of competent jurisdiction, that part shall be
ineffective to the extent of such invalidity or unenforceability only, without in any way affecting
the remaining parts of said provision or the remaining provisions of the Agreement.

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     16.9 The Parties have cooperated in the preparation of this Agreement. Hence, the Agreement
shall not be interpreted or construed against or in favor of either Party by virtue of the
identity, interest, or affiliation of its preparer.

     16.10 This Agreement is made and shall be enforced pursuant to the laws of the State of Texas,
without regard to its law governing conflicts of law.

     16.11 The payments under this Agreement shall be paid from the general assets of the Company
and there shall be no separate trust established to make any payments under this Agreement.

     16.12 All payments under this Agreement shall be subject to all applicable federal, state and
local taxes and tax requirements.

     16.13 This Agreement shall be binding on and inure to the benefit of the successors and
assigns of the Parties. No rights or obligations, benefits of or payments to the Executive under
this Agreement may be subject to claims of the Executive’s creditors, or in any manner may be
assigned or transferred by the Executive other than his rights to compensation and benefits that
are transferred by will or to his estate by operation of law.

     16.14 All notices and other communications required or permitted hereunder or necessary or
convenient in connection herewith shall be in writing and shall be deemed to have been given when
(i) delivered by hand or sent by facsimile, or (ii) on the third business day following deposit in
the United States mail by registered or certified mail, return receipt requested, to the addresses
as follows (provided that notice of change of address shall be deemed given only when received):

If to the Company to:

Synthesis Energy Systems, Inc.

Three Riverway, Suite 300

Houston, Texas 77056

Attention: Chief Accounting Officer

Facsimile No.: (713) 579-0610

If to the Executive to:

David Eichinger

19 Bunnell

The Woodlands, Texas 77385

or to such other addresses as the Company or the Executive, as the case may be, shall designate by
notice to the other party hereto in the manner specified in this Section 16.14.

     16.15 Titles and headings to Sections are for the purpose of reference only and shall in no
way limit, define or otherwise affect the provisions hereof. Any and all Exhibits referred to in
this Agreement are, by such reference, incorporated herein and made a part hereof for all

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purposes. The words “herein”, “hereof”, “hereunder” and other compounds of the word “here”
shall refer to the entire Agreement and not to any particular provision hereof.

     16.16 Wherever appropriate to the intention of the Parties, the respective rights and
obligations of said parties, including, but not limited to, the rights and obligations set forth in
Sections 10 through 13 hereof and this Section 16, shall survive any termination or expiration of
this Agreement.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this
Agreement as of the date indicated below

	 	 	 	 	 	 	 	 	 	 	 
	DAVID EICHINGER  (“Executive”)
 	 	SYNTHESIS ENERGY SYSTEMS, INC.

(“Company”)
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ David Eichinger	 	By:	 	/s/ Robert W. Rigdon
	 
	 	 	 	Name:	 	Robert W. Rigdon
	Date: March 31, 2009 
	 	 	 	Title:	 	President and Chief Executive Officer
	 
	 	 	 	Date:	 	March 31, 2009

			
	THE STATE OF TEXAS
 
COUNTY OF HARRIS	 	§

§

 §

     BEFORE ME, the undersigned authority, on this day personally appeared David Eichinger, who,
being by me first duly sworn, upon his oath deposed and stated that he has read the foregoing
Agreement; that he has been advised to discuss the provisions of this Agreement with an attorney of
his choice before signing it; that he fully understands the terms and conditions of this Agreement;
that he is legally competent to execute this Agreement; and that he has voluntarily executed this
Agreement for the purposes and consideration therein expressed.

     Given under my hand and seal of office on this 31st day of March, 2009.

	 	 	 	 	 
	 	 	 
	 	/s/ Jeanean Sirkel
 	 
	 	NOTARY PUBLIC IN AND FOR 	 
	 	THE STATE OF TEXAS 	 
	 

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	THE STATE OF TEXAS
 
COUNTY OF HARRIS	 	§

§

 §

     BEFORE ME, the undersigned authority, on this day personally appeared Robert W. Rigdon, who
being by me first duly sworn, upon his oath deposed and stated that he is the Chief Executive
Officer of Synthesis Energy Systems, Inc. (the “Company”); that he has read the foregoing
Agreement; that he has discussed the provisions of this Agreement with any attorney of his choice;
that he fully understands the terms and conditions of this Agreement; that he is legally competent
and fully authorized to execute this agreement on behalf of the Company; and that he has
voluntarily executed this Agreement for the purposes and consideration therein expressed.

     Given under my hand and seal of office on this 31st day of March, 2009.

	 	 	 	 	 
	 	 	 
	 	/s/ Jeanean Sirkel
 	 
	 	NOTARY PUBLIC IN AND FOR 	 
	 	THE STATE OF TEXAS 	 

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SCHEDULE I

	 	•	 	Grant of 1,750,000 shares of common stock on May 30, 2006

11exv10w8

Exhibit 10.8

NONSTATUTORY STOCK OPTION AGREEMENT

SYNTHESIS ENERGY SYSTEMS, INC.

AMENDED & RESTATED 2005 INCENTIVE PLAN

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

WITNESSETH:

     WHEREAS, the Company has adopted the Amended & Restated Synthesis Energy Systems, Inc. 2005
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;

     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 $.0l 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 (number of shares) shares (the “Optioned Shares”) of Common
Stock at an Option Price equal to (Fair Market Value determined in accordance with the Plan) per
share. The Date of Grant of this Stock Option is (Date). 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

1 Template (name or initials) Option Grant — (Date)

 

 

during the remainder of the Option Period those quantities of Option Shares which the Optionee
was entitled to purchase but did not purchase during any preceding period or periods):

	 	a.	 	With respect to 25% (Shares) of the total Optioned Shares, the Stock Option
shall vest and become exercisable on the first anniversary of the Date of Grant
provided the Optionee is employed by (or, if the Optionee is a consultant or an Outside
Director, is providing services to) the Company or a Subsidiary on that date.
	 
	 	b.	 	With respect to 25% (Shares) of the total Optioned Shares, the Stock Option
shall vest and become exercisable on the second anniversary of the Date of Grant
provided the Optionee is employed by (or, if the Optionee is a consultant or an Outside
Director, is providing services to) the Company or a Subsidiary on that date.
	 
	 	c.	 	With respect to 25% (Shares) of the total Optioned Shares, the Stock Option
shall vest and become exercisable on the third anniversary of the Date of Grant
provided the Optionee is employed by (or, if the Optionee is a consultant or an Outside
Director, is providing services to) the Company or a Subsidiary on that date.
	 
	 	d.	 	With respect to 25% (Shares) of the total Optioned Shares, the Stock Option
shall vest and become exercisable on the fourth anniversary of the Date of Grant
provided the Optionee is employed by (or, if the Optionee is a consultant or an Outside
Director, is providing services to) the Company or a Subsidiary on that date.
	 
	 	e.	 	An Optionee shall become 100% vested in the total Optioned Shares hereunder on
the day preceding an event which constitutes a Change in Control as defined in the
Plan.

     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 Optionee’s voluntary termination, for
Cause 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 three (3) 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 that the Optionee voluntarily terminates his or her employment (or consulting
agreement in the event Optionee is a consultant) with the Company or a Subsidiary, or if 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 that the Optionee’s
Termination. Termination for “Cause” shall be termination resulting from (i) the

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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 any 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.

     In the event of Optionee’s Termination by reason of death or disability, as defined by the
Committee in its sole discretion pursuant to the terms of the Plan, 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.

     Notwithstanding the above, if the Optionee has an employment agreement with the Company, or any other agreement with the Company which governs the terms and conditions of their options, the
terms of such agreement shall govern the terms and conditions of the term and forfeiture
of their options.

     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 (iv)
subject to prior approval by the Committee in its discretion, by a combination of (i), and (ii)
above.

     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

3

 

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.

     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

4

 

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. Law Governing. This Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of Delaware (excluding any conflict of laws rule that might
refer the governance, construction, or interpretation of this agreement to the laws of another
state).

     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.

     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

5

 

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:

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

6

 

Synthesis Energy Systems, Inc.

Three Riverway, Suite 300

Houston, Texas 77056

Attn: Corporate Secretary

Fax: (832) 494-1006

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

     27. Tax Requirements.

	 	a.	 	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.
	 
	 	b.	 	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.

	 	 	 	 	 
	 	COMPANY:

SYNTHESIS ENERGY SYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	OPTIONEE:

 	 
	 	 	 
	 	(Optionee Name) 	 
	 	 	 
	 

7

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