-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HzKc3IyvPRgPCU35lL6nGYzX6hrH9YwPFCjtttAbHGtWhFszxwM61V4Vrh9OMgqf 0EMhT8P5rDtgH/eyT0EtEA== 0000899243-98-001540.txt : 19980814 0000899243-98-001540.hdr.sgml : 19980814 ACCESSION NUMBER: 0000899243-98-001540 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980807 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNTROLEUM CORP CENTRAL INDEX KEY: 0001029023 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 431764632 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21911 FILM NUMBER: 98684443 BUSINESS ADDRESS: STREET 1: 5000 WEST 95TH STREET SUITE 260 STREET 2: P O BOX 7568 CITY: SHAWNEE MISSION STATE: KS ZIP: 66207 BUSINESS PHONE: 9136521000 MAIL ADDRESS: STREET 1: 5000 WEST 95TH STREET SUITE 260 STREET 2: P O BOX 7568 CITY: SHAWNEE MISSION STATE: KS ZIP: 66207 FORMER COMPANY: FORMER CONFORMED NAME: SLH CORP DATE OF NAME CHANGE: 19961213 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): August 7, 1998 SYNTROLEUM CORPORATION (Exact name of registrant as specified in its charter) KANSAS 000-21911 43-1764632 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File Number) Identification No.) 1350 SOUTH BOULDER SUITE 1100 TULSA, OKLAHOMA 74119-3295 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (918) 592-7900 SLH CORPORATION 5000 WEST 95TH STREET SUITE 260 SHAWNEE MISSION, KANSAS 66207 (Registrant's former name and former address, if changed since last report) ITEM 1. CHANGES IN CONTROL OF REGISTRANT On August 6, 1998, the stockholders of SLH Corporation, a Kansas corporation ("SLH"), and the stockholders of Syntroleum Corporation, an Oklahoma corporation ("Syntroleum"), at separate meetings approved and adopted the Agreement and Plan of Merger dated as of March 30, 1998 by and between Syntroleum and SLH (the "Merger Agreement") and the transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, on August 7, 1998 (i) Syntroleum merged (the "Merger") with and into SLH, with SLH being the surviving corporation (the survivor of the Merger is referred to herein as the "Company"), (ii) SLH changed its name to "Syntroleum Corporation," (iii) the officers of SLH were replaced by the officers of Syntroleum, (iv) six of the eight SLH directors were replaced by Syntroleum directors, (v) each outstanding share of common stock, par value $0.001 per share, of Syntroleum (the "Syntroleum Common Stock") was converted into the right to receive 1.28990 shares of common stock, par value $0.01 per share, of the Company (the "Company Common Stock") and (vi) the Company's Articles of Incorporation were amended to increase the number of authorized shares of Company Common Stock from 30,000,000 shares to 150,000,000 shares and the number of authorized shares of the Company's preferred stock, par value $0.01 per share, from 1,000,000 shares to 5,000,000 shares. The transactions relating to the Merger are more fully described in the Joint Proxy Statement/Prospectus filed with the Securities and Exchange Commission pursuant to Rule 424 under the Securities Act of 1933, as amended, on July 6, 1998 (the "Joint Proxy Statement/Prospectus"). The Joint Proxy Statement/Prospectus constitutes a part of the Company's Registration Statement on Form S-4 (Registration No. 333-50253), as amended (the "Registration Statement"). As a result of the Merger, an aggregate of approximately 16,825,000 shares (which represent approximately 62.5% of the total of approximately 26,900,000 shares of Company Common Stock outstanding following the Merger) are held by the former stockholders of Syntroleum. Management of the Company currently beneficially owns an aggregate of 8,294,058 shares of Company Common Stock (which represents approximately 30.5% of the outstanding shares of Company Common Stock). Of this amount, 5,014,440 shares (18.6%) of Company Common Stock are beneficially owned by Kenneth L. Agee (Chief Executive Officer and Chairman of the Board of the Company), 1,443,055 shares (5.4%) of Company Common Stock are beneficially owned by Mark A. Agee (President and Chief Operating Officer of the Company), and an aggregate of 1,836,562 shares (6.5%) of Company Common Stock are beneficially owned by other members of the Company's management. In addition, 3,593,983 shares (13.4%) of Company Common Stock are beneficially owned by Robert A. Day, a long-time stockholder of Syntroleum. In connection with the Merger, the Rights Agreement by and between the Company and American Stock Transfer & Trust Company dated as of January 31, 1997, as amended, was amended so that neither Kenneth L. Agee, nor Mark A. Agee, nor members of their immediate families, nor any of their affiliates or associates, individually or collectively, would be deemed to be "Acquiring Persons" as that term is defined in the Rights Agreement. -2- Pursuant to the Merger Agreement, Kenneth L. Agee, Mark A. Agee, Alvin R. Albe, Jr., Frank M. Bumstead, Robert Rosene, Jr. and J. Edward Sheridan were appointed as six of the eight directors of the Company (James R. Seward, SLH's President and Chief Executive Officer, and P. Anthony Jacobs, SLH's Chairman of the Board, who were directors of both companies prior to the Merger, have remained as directors of the Company). In addition, the officers of Syntroleum replaced the officers of SLH. The current officers of the Company are as follows: Kenneth L. Agee (Chief Executive Officer and Chairman of the Board), Mark A. Agee (President and Chief Operating Officer), Charles A. Bayens (Vice President of Engineering and Vice President of Research and Development), Eric Grimshaw (Vice President, General Counsel and Secretary), Peter V. Snyder, Jr. (Vice President of Product Sales), Randall M. Thompson (Vice President and Chief Financial Officer), and Larry J. Weick (Vice President of Licensing and Business Development). As a result of the foregoing, management of the Company or the former stockholders of Syntroleum (to the extent they act together) could be deemed to effectively control the Company. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Pursuant to the Merger Agreement, Syntroleum merged with and into SLH on August 7, 1998. In connection with the Merger, each outstanding share of Syntroleum Common Stock was converted into the right to receive 1.28990 shares of Company Common Stock. The exchange ratio relating to the exchange of Company Common Stock for Syntroleum Common Stock in the Merger was determined by negotiations between management of SLH and management of Syntroleum and was based upon a formula set forth in the Merger Agreement that established the exchange ratio as equal to the ratio of the Implied Syntroleum Per Share Common Stock Market Value divided by the SLH Per Share Common Stock Market Value. "SLH Per Share Common Stock Market Value" was defined in the Merger Agreement as the average closing price of Company Common Stock during the five trading days ending on the business day immediately preceding the meeting of stockholders of the Company held to vote upon the Merger Agreement (the "Company Stockholders Meeting"), which was held on August 6, 1998. The "Implied Syntroleum Per Share Common Stock Market Value" was defined in the Merger Agreement as equal to (i) the difference between the SLH Market Capitalization and $50,520,000 (SLH's total stockholders' equity as of March 31, 1998 (excluding the book value of the shares of Syntroleum Common Stock that SLH owned, which was zero)) divided by (ii) 5,950,000 (the number of shares of Syntroleum Common Stock that SLH owned). The "SLH Market Capitalization" was defined in the Merger Agreement as the product of (A) the average closing price of Company Common Stock during the five trading days ending on the business day immediately preceding the Company Stockholders Meeting and (B) 10,519,121 (the sum of the number of shares of Company Common Stock outstanding on the date of the Merger Agreement, the number of shares of Company Common Stock issuable pursuant to vested options (as of such date) to purchase such shares and 250,000 shares (which reflected a portion of the number of shares of Company Common Stock issuable pursuant to non-vested options)). The SLH Per Share Common Stock Market Value was calculated to be $17.7625, and the Implied Syntroleum Per Share Common Stock Market Value was calculated to be $22.9119. The ratio of the Implied Syntroleum Per Share Common Stock Market Value divided by the SLH Per Share Common Stock Market Value was calculated to be -3- 1.28990 (the exchange ratio in the Merger). Approximately 16,825,000 shares of Company Common Stock were issued in the Merger to former stockholders of Syntroleum. Prior to the Merger, SLH owned approximately 31% of the outstanding shares of Syntroleum Common Stock. In addition, as indicated above, James R. Seward, SLH's President and Chief Executive Officer, and P. Anthony Jacobs, SLH's Chairman of the Board, were directors of Syntroleum prior to the Merger and continue as directors of the Company following the Merger. As a result of the Merger, the Company has acquired all of the assets of Syntroleum and has become subject to all of its liabilities. Syntroleum is the developer and owner of a proprietary process (the "Syntroleum Process") designed to catalytically convert natural gas into synthetic liquid hydrocarbons ("gas-to-liquids" or "GTL"). Syntroleum has formed a joint venture with Enron Capital & Trade Resources Corp. with respect to the development of a proposed 8,000 barrel-per-day GTL plant in Sweetwater County, Wyoming. Syntroleum has also entered into a project development agreement with Texaco, Inc. ("Texaco") and Brown & Root, Inc. with respect to the development of a small GTL plant. To date, Syntroleum has entered into license agreements for the Syntroleum Process with Texaco, Atlantic Richfield Company, Marathon Oil Company, YPF International, Ltd., an affiliate of Argentina-based Yacimentos Petroliferos Fiscales, S.A., Enron Capital & Trade Resources Corp. and Kerr-McGee Corporation. Syntroleum's business is more fully described in the Joint Proxy Statement/Prospectus. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of business acquired. The financial statements of Syntroleum included on pages F-1 to F-15 of the Joint Proxy Statement/ Prospectus are incorporated herein by reference. (b) Pro forma financial information. The unaudited pro forma financial information of Syntroleum and SLH included on pages 33-37 of the Joint Proxy Statement/Prospectus are incorporated herein by reference. (c) Exhibits *2.1 Agreement and Plan of Merger dated as of March 30, 1998 by and between SLH and Syntroleum (incorporated by reference to Appendix A to the Joint Proxy Statement/Prospectus). -4- *4.1 Articles of Incorporation of the Company (incorporated by reference to Exhibit 3(a) to the Form 10 of the Company filed with the Securities and Exchange Commission on December 24, 1996). 4.2 Certificate of Merger filed on August 7, 1998. *4.3 Bylaws of the Company (incorporated by reference to Exhibit 3(b) to the Form 10 of the Company filed with the Securities and Exchange Commission on December 24, 1996). *4.4 Rights Agreement dated as of January 31, 1997 (incorporated by reference to Exhibit 4 to the Form 10/A of SLH filed with the Securities and Exchange Commission on February 12, 1997). *4.5 Amendment to Rights Agreement dated as of March 30, 1998 (incorporated by reference to Exhibit 4.2 to the Registration Statement). 4.6 Second Amendment to Rights Agreement dated as of August 7, 1998. *4.7 Certificate of Designations of Series A Junior Participating Preferred Stock of SLH Corporation, dated February 19, 1997, together with Statement of Increase, dated June 1, 1998 (incorporated by reference to Exhibit 4.3 to the Registration Statement). 99.1 Press Release dated August 6, 1998. 99.2 Press Release dated August 7, 1998. *99.3 Audited Consolidated Financial Statements of Syntroleum as of December 31, 1996 and 1997 and for the years ended December 31, 1995, 1996 and 1997 (incorporated by reference to pages F-1 to F-15 of the Joint Proxy Statement/Prospectus). *99.4 Unaudited Consolidated Financial Statements of Syntroleum as of March 31, 1998 and for the three-month periods ended March 31, 1997 and 1998 (incorporated by reference to pages F-1 to F-15 of the Joint Proxy Statement/Prospectus). -5- *99.5 Unaudited Pro Forma Combined Financial Statements of SLH and Syntroleum as of March 31, 1998, for the year ended December 31, 1997 and for the three-month period ended March 31, 1998 (incorporated by reference to pages 33 to 37 of the Joint Proxy Statement/Prospectus). - --------------------- *Incorporated by reference as indicated -6- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SYNTROLEUM CORPORATION By: /s/ Eric Grimshaw ---------------------------- Name: Eric Grimshaw Title: Vice President, General Counsel and Secretary Date: August 12, 1998 -7- EX-4.2 2 CERTIFICATE OF MERGER EXHIBIT 4.2 CERTIFICATE OF MERGER OF SYNTROLEUM CORPORATION, AN OKLAHOMA CORPORATION INTO SLH CORPORATION, A KANSAS CORPORATION (PURSUANT TO SECTION 17-6702 OF THE KANSAS GENERAL CORPORATION CODE AND SECTION 1082 OF THE OKLAHOMA GENERAL CORPORATION ACT) Pursuant to the provisions of the Kansas General Corporation Code and the Oklahoma General Corporation Act, the undersigned corporation certifies as follows: 1. The constituent corporations to the merger are SLH Corporation, a Kansas corporation, and Syntroleum Corporation, an Oklahoma corporation. 2. SLH Corporation and Syntroleum Corporation have entered into an Agreement and Plan of Merger and Reorganization, dated as of March 30, 1998 (the "Merger Agreement"), which has been approved, adopted, certified, executed and acknowledged by SLH Corporation and Syntroleum Corporation in accordance with Section 17-6702 of the Kansas General Corporation Code and Section 1082 of the Oklahoma General Corporation Act. 3. The name of the surviving corporation is SLH Corporation. 4. The Articles of Incorporation of the surviving corporation shall be SLH Corporation's Articles of Incorporation with the following amendments: (a) Article I shall be amended to change the name of the corporation to Syntroleum Corporation, as follows: ARTICLE I NAME The name of the corporation (which is hereinafter referred to as the "Corporation") is: SYNTROLEUM CORPORATION (b) The first paragraph of Article IV shall be amended (i) to increase the authorized shares of Common Stock, par value $0.01 per share, from Thirty -1- Million shares to One Hundred Fifty Million shares and (ii) to increase the authorized shares of Preferred Stock, par value $0.01 per share, from One Million shares to Five Million shares, as follows: ARTICLE IV Capital Stock The total number of shares of stock which the Corporation shall have authority to issue is One Hundred Fifty Five Million (155,000,000), consisting of Five Million (5,000,000) shares of Preferred Stock, par value $0.01 per share (hereinafter referred to as "Preferred Stock"), and One Hundred Million (150,000,000) shares of Common Stock, par value $0.01 per share (hereinafter referred to as "Common Stock"). 5. The executed Merger Agreement is on file at the office of the surviving corporation located at 1350 South Boulder, Suite 1100, Tulsa, Oklahoma 74119. 6. A copy of the Merger Agreement will be furnished by the surviving corporation, on request and without cost, to any stockholder of SLH Corporation or Syntroleum Corporation. 7. The authorized capital stock of Syntroleum Corporation, the only constituent corporation to the merger which is not a Kansas corporation, is as follows: Common Stock, par value $.001 per share - 50,000,000 shares Preferred Stock, par value $0.01 per share - 1,000,000 shares 8. SLH Corporation hereby agrees that it may be served with process in Oklahoma in any proceeding for enforcement of any obligation of Syntroleum Corporation, as well as for enforcement of any obligation of SLH Corporation arising from the merger, including any suit or other proceeding to enforce the right of any stockholders as determined in appraisal proceedings pursuant to Section 1091 of the Oklahoma General Corporation Act and SLH Corporation hereby irrevocably appoints the Secretary of State of the State of Oklahoma as its agent to accept service of process in any such suit or other proceedings and a copy of such process shall be mailed by the Secretary of State to SLH Corporation at the following address: 1350 South Boulder, Suite 1100 Tulsa, Oklahoma 74119 Attn: General Counsel -2- IN WITNESS WHEREOF, this Certificate of Merger has been executed on behalf of the surviving corporation by James R. Seward, its President and Chief Executive Officer, as of August 7, 1998. SLH CORPORATION a Kansas corporation By: /s/ James R. Seward ----------------------------------------- Name: James R. Seward Title: President and Chief Executive Officer Attest: /s/ Steven K. Fitzwater - --------------------------------- Steven K. Fitzwater, Secretary -3- EX-4.6 3 2ND AMENDMENT TO RIGHTS AGREEMENT EXHIBIT 4.6 SECOND AMENDMENT TO THE RIGHTS AGREEMENT BETWEEN SYNTROLEUM CORPORATION AND AMERICAN STOCK TRANSFER & TRUST COMPANY THIS SECOND AMENDMENT TO THE RIGHTS AGREEMENT (the "Second Amendment") is made and entered into as of the 7th day of August, 1998, by and between Syntroleum Corporation, a Kansas corporation formerly named SLH Corporation ("Syntroleum"), and American Stock Transfer & Trust Company (the "Rights Agent"). W I T N E S S E T H: WHEREAS, Syntroleum and the Rights Agent entered into that certain Rights Agreement dated as of January 31, 1997 (the "Rights Agreement"); and WHEREAS, Syntroleum and the Rights Agent amended the Rights Agreement effective as of March 30, 1998 (the "First Amendment"); and WHEREAS, in connection with the merger between SLH Corporation, a Kansas corporation, and Syntroleum Corporation, an Oklahoma corporation, Syntroleum and the Rights Agent deem it desirable to further amend the Rights Agreement as set forth below; NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein and in the Rights Agreement, the parties hereto agree as follows: 1. Section 1(a) of the Rights Agreement is amended, effective as of the day of execution of the Agreement and Plan of Merger Agreement by and between SLH Corporation, a Kansas corporation, and Syntroleum Corporation, an Oklahoma corporation, pursuant to Section 27 of the Rights Agreement by deleting the last sentence of Section 1(a) thereof (which sentence was added by the First Amendment to the Rights Agreement) and adding the following sentence to the end of Section 1(a) thereof: "Notwithstanding anything in this Section 1(a) relating to the definition of Acquiring Person to the contrary, neither Kenneth L. Agee, nor Mark A. Agee, nor members of their immediate families, nor any of their Affiliates or Associates, individually or collectively, shall be deemed an Acquiring Person." 2. Except as expressly amended hereby, the Rights Agreement shall remain in full force and effect in accordance with the provisions thereof. 3. This Second Amendment shall be deemed to be a contract made under the laws of the State of Kansas and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state. 4. This Second Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed and attested, effective as of the day and year first above written. SYNTROLEUM CORPORATION By: /s/ Randall M. Thompson ------------------------------------ Name: Randall M. Thompson ----------------------------------- Title: Chief Financial Officer ---------------------------------- ATTEST: By: /s/ Eric Grimshaw ------------------------------- Name: Eric Grimshaw ----------------------------- Title: Vice President/Secretary ---------------------------- AMERICAN STOCK TRANSFER & TRUST COMPANY By: /s/ Geraldine M. Zarbo ---------------------------- Name: Geraldine M. Zarbo -------------------------- Title: Vice President ------------------------- ATTEST: By: /s/ Robert Shiner --------------------------- Name: Robert Shiner ------------------------- Title: Senior Vice President ------------------------ EX-99.1 4 PRESS RELEASE DATED AUGUST 6, 1998 EXHIBIT 99.1 NEWS RELEASE [SLH CORPORATION LOGO APPEARS HERE] - -------------------------------------------------------------------------------- 5000 W. 95TH STREET, SUITE 260 P.O. BOX 7568 SHAWNEE MISSION, KS 66207 PHONE (913) 652-1000 FAX (913) 652-1025 FOR IMMEDIATE RELEASE: Contacts: Steve Fitzwater Kim Schaefer August 6, 1998 SLH CORPORATION ANNOUNCES MERGER APPROVAL SHAWNEE MISSION, KS - SLH Corporation (SLH) announced that both SLH and Syntroleum (R) Corporation stockholders voted to approve the merger between SLH and Syntroleum. The merger is expected to become effective on August 7, 1998. In the merger, each share of Syntroleum common stock not presently owned by SLH will be exchanged for 1.2899 shares of SLH common stock, the name of SLH will be changed to "Syntroleum Corporation", and SLH management and six of the eight SLH directors will be replaced with Syntroleum management and directors. P. Anthony Jacobs, Chairman of SLH, and James R. Seward, President and CEO of SLH, who are currently directors of both companies, will remain as directors of the merged company. Approximately 16,825,000 shares of common stock are to be issued pursuant to the merger, resulting in approximately 26,900,000 shares of SLH common stock issued and outstanding. Although the merger will effect a change in the name of SLH to "Syntroleum Corporation," certificates evidencing shares of SLH common stock prior to the merger that bear the name "SLH Corporation" will continue to evidence the same number of shares of SLH common stock after the merger. However, holders of SLH certificates may obtain new certificates that bear the name "Syntroleum Corporation" by delivering the old certificates to SLH's transfer agent together with appropriate transmittal documents that may be obtained from the transfer agent upon request. SLH's transfer agent is American Stock Transfer & Trust Company, 40 Wall Street, 46/th/ Floor, New York, NY 10005, and the telephone number is (718) 921-8200. The common stock of the newly merged company is expected to begin trading on the National Market System of Nasdaq on Monday, August 10 under the symbol "SYNM". (R)Syntroleum is both a service mark and trademark of Syntroleum Corporation. This document contains forward-looking statements as well as historical information. Forward-looking statements are identified by or are associated with such words as "intend," "believe," "estimate," "expect," "anticipate," "should," "hopeful" and similar expressions, and include statements relating to the effectiveness of the merger. They reflect management's beliefs and estimates of future circumstances and conditions. Although the Company believes that the expectations reflected in any forward-looking statements are reasonable, it can give no assurance that such expectations will be met. These and other forward- looking statements are based on many assumptions and factors, all of which may not be detailed in this document. Any changes in the assumptions or factors could produce materially different results than those predicted and could impact stock values. EX-99.2 5 PRESS RELEASE DATED AUGUST 7, 1998 EXHIBIT 99.2 FRIDAY AUGUST 7, 3:02 PM EASTERN TIME COMPANY PRESS RELEASE SOURCE: Syntroleum Corporation SLH AND SYNTROLEUM COMPLETE MERGER MERGER PROVIDES CAPITAL TO ACCELERATE COMMERCIAL DEVELOPMENT OF SYNTROLEUM PROCESS AND FUND CONSTRUCTION OF GAS-TO-LIQUIDS PLANTS TULSA, Okla., Aug. 7 -- Syntroleum Corporation today announced that it has completed its merger with SLH Corporation which, prior to the merger owned approximately 31% of the outstanding common shares of Syntroleum. The merger was approved by the shareholders of both companies at separate meetings held yesterday. Among other things, the merger gives the combined company, which will be called Syntroleum Corporation, access to approximately $50 million of cash and other assets formerly held by SLH. Syntroleum intends to use this capital to accelerate the development and commercial implementation of its proprietary process designed to catalytically convert natural gas into synthetic crude oil and other hydrocarbon-based products. In the merger, each outstanding share of Syntroleum common stock was converted into 1.28990 shares of SLH common stock. As a result, pre-merger shareholders of Syntroleum own 62.5% of the combined company and pre-merger shareholders of SLH own the remaining 37.5%. Approximately 16,825,000 shares of SLH common stock were issued in the merger, resulting in a total of approximately 26,900,000 outstanding shares after the merger. The last trading day for the common shares of SLH will be today, August 7, 1998. Shares of Syntroleum common stock will begin trading on August 10, 1998 on Nasdaq under the trading symbol "SYNM". "With the financial resources and access to capital provided by this transaction, Syntroleum can now move aggressively to bring our gas-to-liquids technology to the energy market and capitalize on the significant opportunities we see there," said Kenneth Agee, Syntroleum's Chairman and Chief Executive Officer. With the assets provided by the merger, we now have capital to push the development of our commercial plants forward. Mark Agee, Syntroleum's President, added, "As a result of becoming a publicly traded company after the merger, our current and potential shareholders, licensees, business partners and employees will now have access to much greater information about Syntroleum, its strategy and its prospects. We believe this will work to the benefit of all concerned." "We are also convinced that our business model, which combines the considerable capabilities of our own R&D and engineering staffs with those of our licensees and technology partners, creates a clear and compelling competitive advantage for Syntroleum," said Mark Agee. Syntroleum plans to use a portion of the cash made available by the merger to fund its capital commitments for two previously announced gas-to-liquids projects -- a specialty product GTL plant being developed with Enron Capital & Trade Resources in Sweetwater County, Wyoming, and a second GTL plant being developed with Texaco and the engineering firm of Brown & Root. The company also intends to continue to make significant investments in the research and development of improvements to the Syntroleum Process. The Syntroleum Process The Syntroleum Process is a simplification of traditional GTL technologies aimed at substantially reducing both the capital cost and minimum economical size of a GTL plant, as well as plant operating costs. To this end, a unique characteristic and primary advantage of the Syntroleum Process over competing processes is its use of air, rather than pure oxygen, in the conversion process. Syntroleum believes that the Syntroleum Process can, in some circumstances, be cost effective in GTL plants with throughput levels as low as 2,000 barrels per day (based on energy prices in recent years), and can be competitive with other GTL processes at any plant size. Syntroleum believes its ability to scale plant size down will enable it to place its GTL plants in skids, barges and ocean-going vessels. This is expected to allow Syntroleum licensees to use GTL plants in a wider variety of locations, including isolated and offshore areas where much of the world's stranded gas reserves are found. The potential for small and portable plants also makes Syntroleum's GTL technology more suitable for converting natural gas associated with oil fields that would otherwise be flared (which is now prohibited or severely restricted in many countries) or reinjected into the reservoir at significant cost. In addition, the synthetic crude oil produced by the Syntroleum Process has certain performance and environmental advantages over conventional crude oil. Syntroleum's Strategy Syntroleum's objective is to be a leading GTL technology provider to the oil and gas industry. Its strategy to achieve this objective involves the following key elements: Broadly License the Syntroleum Process. Syntroleum intends to continue offering licenses to the Syntroleum Process and related proprietary catalysts to the oil and gas industry for the production of synthetic crude oil and liquid fuels primarily outside of North America. To date, Syntroleum has entered into license agreements with Texaco, ARCO, Marathon, YPF, Enron, and Kerr-McGee, and is currently in discussions with several other oil and gas companies with respect to additional license agreements. Own Specialty Product GTL Plants. Syntroleum intends to establish joint ventures with its licensees and other oil and gas industry partners and/or financial partners to design, construct and operate GTL plants designed to produce high margin specialty products. Syntroleum has formed a joint venture with Enron with respect to the development of a proposed 8,000-barrel per day GTL plant in Sweetwater County, Wyoming. The company is currently in discussions with several other potential participants in this joint venture. Syntroleum has also entered into a project development agreement with Texaco and Brown & Root with respect to the development of a small GTL plant. Provide Mobile GTL Plants on a Contract Basis. Syntroleum intends to make mobile GTL plants available to customers on a contract basis through efforts with industry partners and others. Syntroleum believes that there will be a significant market potential for mobile GTL plants in various applications, including (i) extended well testing; (ii) conversion of small associated gas fields; and (iii) short-term use of a GTL plant on large fields while a permanent GTL plant is being built. Continue Reducing Costs Through Research and Development Activities and Acquisitions. Syntroleum intends to continue its research and development activities with a focus on developing further improvements to the Syntroleum Process and further reducing the capital and operating costs of GTL plants based on the Syntroleum Process. Syntroleum has leveraged its own research and development capabilities through joint development arrangements with its licensees and other industry partners. Texaco, ARCO, Marathon, Bateman Engineering, Brown & Root, ABB Power Generation and ABB STAL AB, AGC Manufacturing Services, Catalytica Combustion Systems and Catalytica Advanced Technologies are currently participating in specific joint development projects with Syntroleum. Syntroleum believes that the network created through its license and joint development agreements, along with its strategic alliances with engineering companies and critical component vendors, will allow it to more rapidly commercialize and improve the Syntroleum Process, thereby providing it and its licensees with an important competitive advantage and enhancing Syntroleum's ability to attract additional licensees and joint development partners. Under these agreements, Syntroleum generally acquires title to or rights to use all inventions and improvements to the Syntroleum Process that results from these collaborative efforts. Those improvements are then made available to all licensees. This document includes forward-looking statements as well as historical information. Forward-looking statements include, but are not limited to, statements relating to the use of funds provided by the merger, the Syntroleum Process and related technologies, GTL plants based on the Syntroleum Process (including the development of planned plants), the economic use of such plants and the continued development of the Syntroleum Process. When used in this document, the words "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "plan," "should," and similar expressions are intended to be among the statements that identify forward-looking statements. Although Syntroleum believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that commercial-scale GTL plants will not achieve the same results as those demonstrated on a laboratory or pilot basis or that such plants will experience technological and mechanical problems, the potential that improvements to the Syntroleum Process currently under development may not be successful, the impact on plant economics of operating conditions (including energy prices), competition, intellectual property risks, Syntroleum's ability to obtain financing and other risks described in the company's filings with the Securities and Exchange Commission. (R) "Syntroleum" is registered as a trademark and service mark in the U.S. Patent and Trademark Office. -----END PRIVACY-ENHANCED MESSAGE-----