Item 8.01. Other Events.
On June 3, 2014, the stockholders of Sooner Holdings, Inc. (f/k/a Syntroleum Corporation) (the
Company
) approved the
sale of substantially all of the assets of the Company to REG Synthetic Fuels, LLC (
Purchase Sub
), a wholly owned subsidiary of Renewable Energy Group, Inc. (
REG
) (the
Transaction
) pursuant to
that certain Asset Purchase Agreement dated as of December 17, 2013 between the Company, REG and Purchase Sub (the
Purchase Agreement
).
In connection with the Transaction, the stockholders of the Company also approved, among other things, a Plan of Liquidation and Dissolution
of Syntroleum Corporation (the
Plan
) allowing the Companys Board of Directors (the
Board
) to, among other things, (i) establish a liquidating trust for the benefit of the common stockholders of the
Company, subject to the claims of the Companys creditors, and (ii) transfer the Companys assets to such trust.
Effective
May 6, 2015, pursuant to the Plan, the Board, among other things, (i) established a liquidating trust known as the Sooner Holdings Trust (the
Trust
), and (ii) transferred all right, title and interest
in, to and under the remaining assets of the Company to the Trust.
As described below, the Company, the Trust, the Defendants (defined
below), and Lead Plaintiff Thomas Victor (the
Lead Plaintiff
and, collectively, the
Parties
) in the class action lawsuit,
In re Syntroleum Corp. Shareholder Litigation
, CJ-201305807 (the
Consolidated Action
), entered into that certain Stipulation and Agreement of Compromise, Settlement and Release (the
Stipulation
, and together with the proposed settlement of those issues to be approved by the
Court, the
Settlement
) and filed the Stipulation in the District Court in and for Tulsa County, State of Oklahoma (the
Court
) on June 24, 2016. On June 29, 2016, the Court issued an Order Granting
Preliminary Approval of Stipulation and Agreement of Compromise, Settlement and Release, and Schedule Order Related Thereto (the
Preliminary Order
).
The Class Action Litigation
On
December 17, 2013, the Company and REG announced that they and the Purchase Sub had entered into the Purchase Agreement. On December 26, 2013, Daniel Baxter, on behalf of himself and all others similarly situated, filed an action in the
Court, styled
Baxter v. Syntroleum Corp. et al.
, CJ-2013-05807 (the
Baxter Action
), alleging, among other things, that the Companys Principal Financial Officer, Karen L. Power, and the Companys Board: P. Anthony
Jacobs, James R. Seward, Alvin R. Albe, Edward G. Roth, Frank M. Bumstead, Robert B. Rosene, Jr. (the
Individual Defendants
), and the Company had breached their fiduciary duties in connection with their consideration and approval
of the Transaction, and that REG and Purchase Sub (the
REG Defendants
, and together with the Individual Defendants, the
Defendants
) had aided and abetted those breaches of fiduciary duty.
On December 30, 2013, Philip Crawley, on behalf of himself and all others similarly situated, filed an action in the Court, styled
Crawley v. Roth et al.
, CJ-2013-05853 (the
Crawley Action
), and on January 10, 2014, George Kashouh and Thomas Victor, on behalf of themselves and all others similarly situated, filed an action in the Court, styled
Kashouh et al. v. Syntroleum Corp. et al.
, CJ-2014-00126 (the
Kashouh Action
), each also challenging the Transaction.
The Court consolidated the Baxter, Crawley, and Kashouh Actions as the Consolidated Action. The members of the plaintiff class in the
Consolidated Action are, collectively, the
Plaintiffs
.
The Parties entered into the Settlement on June 23, 2016
and filed the Stipulation in Court on June 24, 2016.
The Proposed Settlement
The maximum
Settlement Fund
for the class under the Consolidated Action (the
Class
) is $2.8 million.
After subtracting out any Court-approved attorneys fees and litigation expenses and any recoveries attributable to members of the Class who opt out of the Settlement (the
Net Settlement Fund
), each Class members actual
recovery will be based on the Plan of Allocation (described below).
A
Settlement Administrator
to be approved by the
Parties would distribute or cause to be distributed the Net Settlement Fund to the Trust; the Net Settlement Fund would in turn be distributed, pro rata, to the holders of record of Company stock as of June 11, 2014 who have not opted out of
the Settlement and who are eligible to receive distributions from the Net Settlement Fund; provided, however, that no distributions from the Net Settlement Fund would be made to those Class members who were the beneficial owners of less than one
(1) share of Company stock as of June 11, 2014 (the
Plan of Allocation
). The Settlement Fund would be funded within the later of ten (10) calendar days after the date upon which the Effective Date (defined below)
has occurred and thirty (30) days after the Individual Defendants insurer has received all information necessary to process the payment.
Any person falling within the definition of the Class may, upon request, be excluded from or
opt out of the Class. Any such person must submit to the Settlement Administrator a request for exclusion (
Request for Exclusion
), by First-Class Mail, or hand-delivered such that it is received no later than ten
(10) calendar days before the Settlement Hearing (defined below). All persons who submit valid and timely Requests for Exclusion would have no rights under the Stipulation, would not share in the distribution of the Net Settlement Fund, would
not be bound by the Stipulation or any final judgment, and their pro rata share of the Settlement Fund would be deducted from the Settlement Fund and excluded from the Net Settlement Fund.
The Effective Date would be the first day after which all of the following events and conditions of the Stipulation have been met
or have occurred: (a) Plaintiffs counsel and Defendants respective counsel have executed the Stipulation; (b) the Court has conditionally certified the Class, preliminarily approved the Stipulation, and approved the notice to
the Class by entry of an order substantially conforming with the terms hereof and of the final Stipulation; (c) the Court has issued an Order granting Final Approval of the Settlement and has signed a judgment conforming thereto; (d) the
signed judgment has become final and conclusive; and (e) the time expires for filing an appeal from the judgment, or if the judgment is appealed, any appeal and subsequent appeal is resolved provided that that such resolution results in final
judicial approval of the Settlement.
Preliminary Order
The Court entered the Preliminary Order on June 29, 2016. The Preliminary Order provides for, among other things: (i) approval of the
manner and form of notice to the Class; and (ii) scheduling a hearing for the Courts final consideration of the Stipulation to be held on October 3, 2016, certification of the Class, and Plaintiffs counsels application
for attorneys fees and expenses and an incentive award for Lead Plaintiff, which Plaintiffs counsel believes are warranted by the Settlement contemplated herein (the
Settlement Hearing
).
Order and Final Judgment Proposed Under Preliminary Order
If the Settlement is approved by the Court, the Parties have agreed to jointly seek entry of an Order and Final Judgment (the
Order
and Judgment
) substantially in the form attached as Exhibit C to the Stipulation. The Judgment would, among other things: (i) certify the Class as an opt-out class pursuant to Oklahoma Statutes, tit. 12, §§ 2023(A) and
2023(B)(3); (ii) certify the Lead Plaintiff as the Class representative; (iii) approve the Settlement as fair, reasonable and adequate and in the best interests of the Class under Oklahoma Statutes, tit. 12, §§ 2023(E)(2) and
2023.1; (iv) dismiss the Consolidated Action with prejudice on the merits as against any and all Defendants, without fees or costs to any party except as herein may be provided; (v) provide for the release of claims as described herein;
(vi) reserve jurisdiction for the purpose of effectuating the Settlement; (vii) rule on Plaintiffs motion for an award of attorneys fees and expenses and incentive award to Lead Plaintiff as may be made as set forth herein and
pursuant to Oklahoma Statutes, tit. 12, § 2023(G); and (viii) enjoin all members of the Class from prosecuting or continuing to litigate any Settled Claim (as defined below) against any Released Person (as defined below).
Final Approval means that the Court has entered the Judgment and that the Judgment is final and no longer subject to further appeal or review,
whether by affirmance on or exhaustion of any possible appeal or review, by writ of certiorari or otherwise, or by lapse of time or otherwise. If the Judgment is set aside, materially modified, or overturned, and is not fully reinstated on
reconsideration, reargument, or further appeal, the Judgment would not become final and conclusive.
The Order and Judgment would provide
for the full and complete release of, dismissal with prejudice of, and a permanent injunction barring, among other things, any and all manner of claims, demands, rights, actions, causes of action, liabilities, damages, losses, obligations,
judgments, duties, suits, costs, expenses, matters, and issues known or unknown, asserted or unasserted, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, liquidated or unliquidated, matured or unmatured, accrued or
unaccrued, apparent or unapparent, that have been or could have been asserted in the Consolidated Action, any of the Actions, or any other court, tribunal, or proceedings (including but not limited to any claims arising under federal, state,
foreign, statutory or common law, including the federal securities laws, any state disclosure law or any claims for quasi-appraisal), by or on behalf of the REG Defendants, Plaintiffs or any member of the Class or derivatively on behalf of the
Company, whether individual, direct, class, derivative, representative, legal, equitable, or any other type or in any other capacity (collectively, the
Releasing Persons
), against the Company, Trust, Defendants and certain other
persons, or any of their respective families, parent entities, controlling persons, associates, affiliates, investment funds, or subsidiaries and each and all of their respective past or present officers, directors, stockholders, principals,
representatives, employees, attorneys, financial or investment advisors, insurers, consultants, accountants, investment bankers, commercial bankers, entities providing fairness opinions, advisors or agents, heirs, executors, trustees, general or
limited partners or partnerships, limited liability companies, members, joint ventures, personal or legal representatives, estates, administrators, predecessors, successors, or assigns (the
Released Persons
), whether or not each
of the Released Persons was named, served with process,
or appeared in the Consolidated Action or any of the Actions, which any of the Releasing Persons ever had, now have, or may have had by reason of, arising out of, relating to, or in connection
with (i) the acts, events, facts, matters, transactions, occurrences, statements, representations, or omissions, or any other matters whatsoever that were or that could have been set forth in the Petition, or any of its predecessor petitions in
the Consolidated Action or the Actions; (ii) the Transaction, or (iii) the Proxy and any other agreements, compensation or disclosures made in connection with the Transaction (the
Settled Claims
).
The Order and Judgment would provide for the release by Syntroleum and the Individual Defendants of any and all claims or sanctions, known or
unknown, accrued or unaccrued, against the REG Defendants, Plaintiffs and Plaintiffs counsel arising out of or relating to the acts, events, facts, matters, transactions, occurrences, statements, or representations, or any other matter
whatsoever set forth in or otherwise related, directly or indirectly, to the Transaction; provided, however, that the release would not include any release of the right by the Parties and the proposed Class members to enforce the Stipulation or the
Settlement, or to opt out, object to or otherwise seek relief pursuant to Oklahoma Statutes, tit. 12, §§ 2023 or 2023.1 with respect to the Settlement, or the Order and Final Judgment, or the award of attorneys fees and expenses to
Plaintiffs counsel, or to be heard at the Settlement Hearing.
This Current Report on Form 8-K contains forward-looking statements
within the meaning of Private Securities Litigation Reform Act of 1995, as amended, that involve risks and uncertainties. These forward-looking statements include any statements regarding the Companys operational plans. Forward-looking
statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on
information available at the time those statements are made and/or managements good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ
materially from those expressed in or suggested by the forward-looking statements. The Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.
Capitalized terms not defined herein have the meaning ascribed to them in the Stipulation.