KREIDO BIOFUELS, INC.
EXHIBIT
10.8
00
Xxxx 00xx Xxxxxx
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx
X0X
0X0
January
12, 2007
Xx.
Xxxx
Xxxxxxx
c/o
Kreido Laboratories
0000
Xxxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
Dear
Dr.
Balbien:
I
am
pleased to inform you that, subject to the conditions precedent to the
effectiveness of this Agreement that is set forth in Section 13 of this
Agreement, Kreido Biofuels, Inc. (the “Company”) has granted you a non-qualified
stock option to purchase shares of the Company’s Common Stock, par value $0.001
per share (the “Common Stock”), on the terms and conditions set forth
below.
The
grant
of this stock option is made pursuant to the Kreido Biofuels, Inc. 2006 Stock
Option Plan (the “Plan”). The terms of the Plan are incorporated into this
letter and in the case of any conflict between the Plan and this letter, the
terms of the Plan shall control. This Agreement also references the Employment
Agreement (the “Employment Agreement”), dated as of November 1, 2006, between
you and Kreido Laboratories, a California corporation, which Employment
Agreement the Company will assume at the effective time of the merger (the
“Merger”) that occurs under the Agreement and Plan of Merger, referred to in
Section 13 of this Agreement.
Now,
therefore, in consideration of the foregoing and the mutual covenants
hereinafter set forth:
1. Stock
Option.
The
Company hereby grants you an incentive stock option (the “Stock Option”) to
purchase from the Company One Million Two Hundred Five Thousand Three Hundred
Eighty-Four (1,205,384) shares of Common Stock at a price of $1.35 per share.
The date of grant (the “Date of Grant”) of the Stock Option is the date set
forth above. Unless earlier exercised or terminated in accordance with the
terms
hereunder and in the Plan, this Stock Option will expire on the date that is
the
tenth (10th)
anniversary of the Date of Grant.
1
2. Entitlement
to Exercise the Stock Option.
The
grant of the Stock Option is subject to the following terms and
conditions:
(a) The
Stock
Option shall be vested exercisable in eight (8) quarterly installments of One
Hundred Fifty Thousand Six Hundred Seventy-Three (150,673) shares each with
installments vesting on the date of each March, June, September and December
of
2007 and 2008 that corresponds to the date that is the effective date of the
Merger.
(b) If
you
die when any portion of the Stock Option is exercisable, then the person to
whom
your rights under the Stock Option shall have passed by will or by the laws
of
descent and distribution may exercise any of the exercisable portion of the
Stock Option within one (1) year after your death; provided,
that no
Stock Option may be exercised in any event more than ten (10) years after the
Date of Grant.
3. Method
of Exercise & Payment.
You may
exercise the vested portion of the Stock Option in whole or in part, by giving
written notice to the Company. The written notice shall clearly state your
intent to elect to exercise the Stock Option and the number of shares of Common
Stock with respect to which the Stock Option is being exercised. Further, the
written notice shall be signed by you (or, in the case of your death, the person
exercising the Stock Option) and shall be delivered to the Corporate Secretary
of the Company at the Company’s principal executive office. Except as otherwise
provided in the Plan, payment of the exercise price for the number of shares
of
Stock being purchased pursuant to any Option shall be made (i) by cash or
check payable to the order of the Company; (ii) by
delivery or attestation of shares of Common Stock (valued at their Fair Market
Value) in satisfaction of all or any part of the exercise price; (iii) by
delivery of a properly executed exercise notice with irrevocable instructions
to
a broker to deliver to the Company the amount necessary to pay the exercise
price from the sale or proceeds of a loan from the broker with respect to the
sale of Company Stock or a broker loan secured by the Company Stock;
(iv) by such other consideration as may be approved by the Committee from
time to time to the extent permitted by applicable law; or (v) by any
combination of (i) through (iv) hereof.
4. Tax
Withholding.
As a
condition of exercise, you agree that at the time of exercise that you will
pay
to the Company any applicable withholding taxes, if any, that the Company is
required to withhold in connection with the exercise of the Stock Option. To
satisfy the applicable withholding taxes, you may elect to (a) make cash
payment or authorize additional withholding from your cash compensation;
(b) deliver freely tradable shares of Common Stock (which will be valued at
their Fair Market Value as of the date of delivery); or (c) request that
the Company retain that number of shares of Common Stock that would satisfy
all
or a portion of the applicable withholding taxes.
5. Transferability
of Stock Option.
Other
than upon your death by will or by the laws of descent and distribution, the
Stock Option is not transferable by you and may be exercised during your
lifetime only by you.
2
6. Termination
of Stock Option.
(a) If
your
employment with the Company is terminated for Cause, as such term is defined
in
the Employment Agreement, the Stock Option, whether or not vested, shall
immediately expire effective the date of termination of employment.
(b) If
you
terminate your employment with the Company voluntarily without Good Reason,
as
such term is defined in the Employment Agreement, all unvested installments
of
the Stock Option shall immediately expire effective the date of termination
of
employment. The Stock Option, to the extent unexercised, shall expire on the
later of (a) ninety (90) days after the termination of employment, and (b)
the
expiration of the contractual lock-up agreement.
(c) If
your
employment with the Company terminates on account of death or Disability, as
defined below, all unvested installments of the Stock Option shall immediately
expire effective the date of termination of employment. Vested installments
of
the Stock Option, to the extent unexercised, shall expire one (1) year after
the
termination of employment.
(d) If
you
terminate your employment with the Company (A) in connection with a Change
of
Control, as defined in the Employment Agreement, (B) if the Company terminates
your employment without Cause or (C) if you terminate your employment with
the
Company for Good Reason, one-half (1/2) of all unvested installments of the
Stock Option shall immediately vest up to a maximum of two (2) quarters and
become exercisable effective the date of your termination of employment, and,
to
the extent unexercised, shall expire one (1) year after any such
event.
7. Adjustments.
If the
number of outstanding shares of Common Stock is increased or decreased as a
result of one or more stock splits, reverse stock splits, stock dividends,
recapitalizations, mergers, share exchange acquisitions, combinations or
reclassifications, the number of shares with respect to which you have an
unexercised Stock Option and the Stock Option price shall be appropriately
adjusted as provided in the Plan.
8. Delivery
of Certificate.
The
Company may delay delivery of the certificate for shares of Common Stock
purchased pursuant to the exercise of a Stock Option until (i) it receives
any required representation by you or completion of any registration or other
qualification of such shares under any state or federal law regulation that
the
Company’s counsel shall determine as necessary or advisable, or (ii) it
receives advice of counsel that all applicable legal requirements have been
complied with. As a condition of exercising the Stock Option, you may be
required to execute a customary written indication of your investment intent
and
such other agreements the Company deems necessary or appropriate to comply
with
applicable securities laws.
3
9. No
Guaranteed Right of Employment.
If you
are employed by the Company, nothing contained herein shall confer upon you
any
right to be continued in the employment of the Company or interfere in any
way
with the right of the Company to terminate your employment at any time for
any
cause.
10. Notice
of Certain Dispositions.
You
agree to notify the Company in writing immediately after you make a disposition
of any shares acquired upon exercise of this Stock Option if you are required
to
report information related to your ownership of Common Stock pursuant to any
applicable securities laws, or if such disposition occurs before the later
of
(a) the date that is two years after the Date of Grant, or (b) the date that
is
one year after the date that you acquired such shares upon exercise of this
Stock Option.
11. Notices.
Notices
hereunder shall be mailed or delivered to the Company at its principal place
of
business, and shall be delivered to you in person or mailed or delivered to
you
at the address set forth below, or in either case at such other address as
one
party may subsequently furnish to the other party in writing.
12. Choice
of Law.
This
Agreement shall be governed by New York law, without giving effect to the
conflicts or choice of laws principles thereof.
13. Condition
Precedent.
This
Agreement shall not be or become effective until the merger referred to in
the
Agreement and Plan of Merger, dated as of January 12, 2007, between the Company
and Kreido Laboratories, shall have been consummated.
[Signature
page follows]
4
| |
|
|
| By: | /s/ Xxxxxx Xxxxxxxxxxxxx | |
|
Name: Xxxxxx Xxxxxxxxxxxxx
|
||
|
Title:
Executive
Vice President
|
||
|
|
||
ACKNOWLEDGEMENT
BY OPTIONEE
The
foregoing Stock Option is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned as of the Date of Grant specified
above.
| /s/ Xxxx Xxxxxxx | ||
|
Optionee's Signature |
||
| Xxxx Xxxxxxx, Ph.D. | ||
|
Printed Name |
||
| Optionee's Address: | ||
|
|
||
|
|
||
|
|
||
5
