Registration No. 333-140718
UNITED STATES
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): July 26, 2007
KREIDO BIOFUELS, INC.
(Exact name of registrant as specified in its charter)
Nevada | 333-130606 | 20-3240178 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1140 Avenida Acaso Camarillo, California | 93012 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:(805) 389-3499
Not applicable |
(Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
1
Item 1.01 Entry into a Material Definitive Agreement.
On July 27, 2007, Kreido Biofuels, Inc. (the “Company”) entered into an Employment Agreement with G.A. Ben Binninger as further described in Item 5.02 below.
On July 27, 2007, as a result of the resignation of Joel A. Balbien as further described below under Items 1.02 and 5.02, the Company entered into a Separation Agreement and General Release with Dr. Balbien.
On July 27, 2007, the Company adopted the Outside Director Compensation Program as further described in Item 5.02 below.
Item 1.02 Termination of a Material Definitive Agreement.
On July 27, 2007, as a result of the resignation of Mr. Balbien as further described below under Item 5.02, the Employment Agreement between the Company and Dr. Balbien was terminated. The Executive Employment Agreement between the Company and Dr. Balbien was terminated by Separation Agreement and General Release effective July 27, 2007, a copy of which is attached as Exhibit 10.1. Pursuant to that Agreement and taking into account the salary, accrued vacation, bonus and benefits provisions of the Employment Agreement being terminated, in resolution of all matters between the Company and Dr. Balbien, the Company will make severance payments to Dr. Balbien of approximately $200,000 through November 1, 2007.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Balbien Resignation. On July 26, 2007, Joel A. Balbien submitted to the Company’s Board of Directors (the “Board”), his written notice of resignation as a director effective immediately and as President and Chief Executive Officer of the Company effective as of July 27, 2007. The resignations were accepted by the Board of Directors on July 27, 2007.
Binninger Appointment.On July 27, 2007, the Company appointed Mr. Binninger, age 58, as Interim Chief Executive Officer of the Company. G.A. Ben Binninger has served as a director of the Company since January 12, 2007. From 2003 to 2006, Mr. Binninger served as a consultant to the Company’s wholly-owned subsidiary, Kreido Laboratories (“Kreido Labs”), relating to the development and evaluation of specialty chemical opportunities. He also previously served as Chief Operating Officer of the Company from January 12, 2007 to March 15, 2007. Mr. Binninger has 30 years of experience in the chemicals and fuels industry. Mr. Binninger has hands-on experience leading both large and small technologically sophisticated global process and service businesses with Atlantic Richfield Company (ARCO), Rio Tinto Borax, Exxon and Hercules. From 1995 to 2003, Mr. Binninger served as Senior Vice President of Rio Tinto Borax. Mr. Binninger has a B.E degree in Chemical Engineering from Manhattan College and an M.B.A from Harvard University.
The Company and Mr. Binninger have entered into an Executive Employment Agreement that provides, in part, for Mr. Binninger to serve as Chief Executive Officer and President of the Company. Mr Binninger will dedicate approximately 2-1/2 days per week to Company business. He will receive a salary of $11,666 per month ($140,000 per year) during his tenure as interim Chief Executive Officer. A discretionary bonus of up to $25,000 may be awarded to Mr. Binninger
2
2
at the end of his term as interim Chief Executive Officer. In addition, Mr. Binninger has been granted options to purchase 125,000 shares of Company common stock, of which options to purchase 50,000 shares vested upon the date of grant, 50,000 shares will vest in four equal monthly installments of 12,500 each, provided Mr. Binninger is then serving as Chief Executive Officer of the Company, and 12,500 shares will vest on each of April 15, 2008 and October 15, 2008, provided that Mr. Binninger is then serving either as an officer or a director of the Company. A copy of the Executive Employment Agreement between the Company and G.A. Ben Binninger is attached as Exhibit 10.2. During the period that Mr. Binninger in serving as interim Chief Executive Officer he will continue to serve as a director of the Company but will not qualify as an outside director.
Officer Re-alignments.On July 27, 2007, the Board appointed Philip Lichtenberger as the Company’s Chief Operating Officer, and John Philpott as the Company’s Chief Financial Officer. Mr. Lichtenberger has served as Executive Vice President and Chief Operating Officer of Kreido Labs since 1997 and was appointed as Senior Vice President of Operations and Chief Financial Officer of the Company on January 12, 2007.
Mr. Philpott joined the Company on March 19, 2007 as Vice President and Chief Accounting Officer. From September 2006 until joining the Company, Mr. Philpott served as a Partner with Aegis Advisors, LLC, a private management company. For more than 10 years before joining Aegis Advisors, LLC, Mr. Philpott held the position of CFO, Treasurer and Assistant Secretary with Miravant Medical Technologies, Inc., a publicly held pharmaceutical research and development company engaged in drug and laser light development
New Directors Elected.On July 27, 2007, the Board, by resolution, expanded the size of the Board from three directors to four directors. The Board also appointed Murli Tolaney and Richard Redoglia as members of the Board to fill vacancies on the Board.
Mr. Tolaney currently serves as Chairman of Montgomery Watson Harza, a privately-owned global environmental engineering, management, technology and construction company. Mr. Tolaney joined Montgomery Watson Harza in 1973 as a Senior Engineer and in 1992 became its Chief Executive Officer, a position he held until 2001 when he assumed his current post of Chairman of this 130 office worldwide, 6,000 employee firm.
Mr. Redoglia currently serves as Executive Director of Global Energy Horizons, a strategic investment firm focused on businesses within the energy industry. Prior to joining Global Energy Horizons in 2003, Mr. Redoglia served as Director Global Futures Group for ABN AMRO Inc. from 2000 to 2002. During a 15-year tenure with Merrill Lynch, Mr. Redoglia served in various positions of increasing responsibility including Director of the Energy Commodity Group.
Outside Director Compensation Program Adopted.On July 27, 2007, the Board adopted the Outside Director Compensation Program. Under this program each outside director will be paid, in equal quarterly installments, an annual retainer of $20,000, and meeting fees of $1,000 for board meetings ($500 for committee meetings) attended in person and $500 for board meetings ($250 for committee meetings) attended by telephone, not to exceed $1,000 if multiple meetings are attended in person on a given day. In addition, each outside director will receive (a) 2,500 shares of Company common stock upon his or her first election or appointment on or after the
3
3
date of adoption of the Outside Director Compensation Program and (b) annual option grants to purchase 25,000 shares of Company common stock. Option grants will occur on October 15 of each calendar year beginning October 15, 2007. The number of shares of common stock included in an annual option grant will be reduced by the number of shares of common stock included in option grants to the applicable outside director, in any capacity, within the 12 months preceding the October 15 grant date. Options granted to outside directors under the Outside Director Compensation Program will vest in two equal installments of six months each, provided that the outside director is serving as a director of the Company on the vesting date. Options will be granted at the closing bid price on the Company common stock on the date of grant and will have terms of 10 years from the date of grant. Outside director options will be granted from the shares reserved for issuance under the Company’s 2006 Equity Incentive Plan. The Chairperson of the Board of Directors may receive additional compensation to be determined by the other directors.
Item 8.01 Other Events
On July 27, 2007, the Company issued a press release announcing the resignation of Joel A. Balbien as the Company’s Chief Executive Officer and as a director of the Company, as well as the appointments of G.A. Ben Binninger as interim Chief Executive Officer, Philip Lichtenberger as Chief Operating Officer and John M Philpott as Chief Financial Officer. The press release also announced the election of. Messrs. Murli Tolaney and Richard Redoglia to the Board. A copy of the press release is attached hereto as Exhibit 99.1. The information contained in Item 8.01 to this Form 8-K, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and the information shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
Exhibit Number Exhibit
10.1 | Separation Agreement and General Release dated July 27, 2007 by and between Kreido Biofuels, Inc. and Joel Balbien |
10.2 | Executive Employment Agreement dated July 27, 2007 by and between Kreido Biofuels, Inc. and G. A. Ben Binninger |
10.3 | Kreido Biofuels, Inc. Outside Director Compensation Program adopted July 27, 2007 |
99.1 | Press release of Kreido Biofuels, Inc. issued July 27, 2007 |
4
4
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
KREIDO BIOFUELS, INC. | ||||
Date: July 30, 2007 | By: | /s/ John M. Philpott | ||
Name: | John M. Philpott | |||
Its: | Chief Financial Officer | |||
5
5
EXHIBIT INDEX
Exhibit Number Exhibit
10.1 | Separation Agreement and General Release dated July 27, 2007 by and between Kreido Biofuels, Inc. and Joel Balbien |
10.2 | Executive Employment Agreement dated July 27, 2007 by and between Kreido Biofuels, Inc. and G. A. Ben Binninger |
10.3 | Kreido Biofuels, Inc. Outside Director Compensation Program adopted July 27, 2007 |
99.1 | Press release of Kreido Biofuels, Inc. issued July 27, 2007 |
6
6
THIS SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter “Agreement”) is made
and entered into by and between Joel Balbien, Ph.D., an individual and resident of California (hereinafter
“Balbien”) and Kreido Biofuels, Inc., a Nevada corporation (hereinafter “Kreido” or the “Company”).
If to Kreido: | Kreido Biofuels, Inc. | With a copy to: | Susan Keenberg, Esq. | |||
1140 Avenida Acaso, | Law Office of Susan Keenberg | |||||
Camarillo, California 93012 | 1217 Acacia Avenue | |||||
Attention: Betsy Wood Knapp, Chair | Torrance, California 90501 | |||||
Fax: (805) 384-0989 | Fax: (310) 783-0111 | |||||
If to Balbien: | Joel Balbien | With a copy to: | Frank Melton, Esq. | |||
INFORMATION ON FILE | Rutter, Hobbs & Davidoff, Inc. | |||||
1900 Ave. of the Stars, #1700 | ||||||
Los Angeles, CA 90067 | ||||||
Fax: (310) 286-1728 |
Dated: | ||||||||
Kreido Biofuels, Inc. | ||||||||
Dated: | ||||||||
TO
ARBITRATE CLAIMS
Kreido Biofuels, Inc. | Employee | |||||
Signature: | Signature: | |||||
Print Name: | Betsy Wood Knapp | Print Name: | Joel Balbien, Ph.D. | |||
Print Title: | Chair of the Board | Date: | ||||
Date: |
1. | Executive’s Duties;Title;Location. As of the Effective Date, Executive is employed as Kreido’s Interim CEO under the terms and conditions below. Executive shall do and perform all services, acts, or things necessary or advisable to manage and conduct the business of the Company which are normally associated with the position of CEO. However, at all times during his employment, Executive shall be subject to the direction and policies from time to time established by the Board of Directors (the “Board”). | |
2. | Term and Termination. It is the expectation of the parties that Executive’s tenure as Interim CEO will be approximately 90 to 120 days. The foregoing notwithstanding, the Company’s employment of Executive as Interim CEO shall commence on July 26, 2007 and shall continue for an indefinite period of time to be determined at the sole discretion of the Board (the “Interim Period”). The Parties understand and agree that upon two (2) days’ written notice from the Board to the Executive of the conclusion of the Interim Period, Executive’s employment by the Company shall terminate effective the last day of the Interim Period. Notwithstanding anything contained herein to the contrary, the Parties agree Executive is an at-will employee and either Party may terminate Executive’s employment under this Agreement at any time, with or without cause upon two (2) days’ notice. | |
3. | Hours.Executive shall provide his services to Company on a half-time basis, which the parties agree will be an average of 2.5 days per week, unless Executive, in his sole discretion, determines additional time is necessary. Executive shall work at Kreido’s Camarillo, California, office or such other location as Kreido deems appropriate; provided, however, that Executive shall not be required routinely to provide services outside of a reasonable commuting distance from the current Camarillo office except when traveling on Kreido business. | |
4. | Compensation. |
Page 1 of 13
4.2 (a) | Grant of Options. On the Effective Date, the Company will grant Executive an option to purchase 125,000 shares of the Company’s common voting stock under the Plan (the “Options”). Subsequently, the Executive shall be eligible for such additional grants of options and other permissible grants (collectively “Awards”) under the Plan as the Compensation Committee of the board of directors of the Company shall determine in its absolute discretion. | ||
4.2 (b) | Option Exercise Price; Term.The per share exercise price of the Option shall be the closing bid price per share of Company common stock on the date of grant. The Term of the Option shall be ten years from the date of grant. | ||
4.2 (c) | Vesting and Exercise.The Options shall vest and be exercisable as follows: (A) 50,000 options shall vest upon signing of this Employment Agreement (“Signing Grant”); (B) 50,000 options shall vest in four equal installments of 12,500 options at the conclusion of each month of employment the Executive completes with the Company beginning with the month of August, 2007 (“Monthly Installments”) up to a maximum of four Monthly Installments; and (C) the remaining 25,000 options shall vest in two equal installments of 12,500 options each on April 15, 2008 and October 15, 2008 if the Executive is employed by the Company or is a member of the Company’s board of directors on those dates. All vested options shall remain exercisable for ten years from the date of the Grant. | ||
4.2 (d) | Lock-Up Agreement.The Executive shall enter into a Lock-Up Agreement with the Company in the form attached hereto asExhibitB. During any period that Executive is precluded by the Lock-Up Agreement from exercising the Option granted to Executive in Section 4.2(a), then the exercise period in Section 4.2(b) will be extended by the amount of time during which Executive could not exercise the Option, but in no event beyond ten years from the date of grant. | ||
4.2 (e) | Payment.The full consideration for shares purchased by the Executive upon exercise of the Option shall be paid: (a) by delivery of a certified check payable to the order of the Company; (b) by delivery and attestation of Mature Shares (valued at their Fair Market Value on the date of delivery) or (c) 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 of proceeds of a loan from the broker with respect to the sale of such award or a broker loan secured by Mature Shares. |
Page 2 of 13
5. | Proprietary Covenants of Executive. |
5.2.1 | Definition of Confidential Information.For purposes of this Agreement, the term Confidential Information means all and any confidential information and/or trade secrets of Kreido and its affiliates, including without limitation, scientific discoveries, recipes, formulations, information encompassed in all advertising and marketing plans, customer lists, costs, pricing information, information concerning software and all concepts or ideas, in or reasonably related to the business of Kreido as well as business and financial information of Kreido’s customers and business partners that has been disclosed to Kreido on a confidential basis (“Confidential Information”). Confidential Information shall not include any Kreido information that has been voluntarily disclosed to the public by Kreido, independently developed and disclosed by others, or otherwise enters the public domain through lawful means. | ||
5.2.2 | Non-disclosure of Confidential Information.During his employment and after the termination of his employment, Executive shall regard and preserve as confidential all Confidential Information that has been or may be obtained by Executive in any way by reason of Executive’s employment by Kreido.Without the prior and specific written consent of Kreido, or unless ordered to do so by a court order or subpoena, Executive shall not (i) use, publicize, release or disclose Confidential Information to others, either during or after the period of employment, or (ii) take, retain or copy any Kreido executive compensation plans, Executive benefit plans, business plans, customer lists, costs, pricing information, documents, reports, information encompassed in advertising and marketing plans, or other concepts or ideas, in or reasonably related to the business of Kreido. Executive agrees to notify Kreido’s Board of Directors within two (2) business days of receipt of any court order or subpoena that calls for information deemed Confidential under |
Page 3 of 13
5.4.1 | Kreido Materials.Executive agrees that all of its executive compensation plans, Executive benefit plans, business plans, advertising plans and marketing materials and other Confidential Information concerning Kreido, its Executives and shareholders, customer lists, costs, pricing information, documents, reports, plans, proposals or other items made or created by Executive during the period of employment or that come into Executive’s possession during the Interim Period (“Kreido Materials”) are the property of Kreido and shall not be used by Executive in any way after the time this Agreement is terminated. | ||
5.4.2 | Delivery of Materials. Upon termination of this Agreement, Executive shall promptly deliver to Kreido all “Kreido Materials”. The foregoing notwithstanding, if Executive is still a member of the board of directors of the Company at the end of the Interim Period, Executive may retain those Kreido Materials he acquired in his capacity as a director of the Company and not as the Company’s Interim CEO. |
6. | Termination Due to Death or Disability. If Executive dies during the employment, Executive’s employment shall automatically cease and terminate as of the date of Executive’s death. In the event of Executive’s disability for a period of 21 consecutive days during any 30-day period, Company shall thereafter have the right, upon written notice to Executive, to terminate this Agreement, in which case the date of termination shall be the date of such written notice to Executive. As used herein, “disability” means a physical and/or mental disability of Executive that prevents Executive from substantially performing the essential functions of his position even with reasonable accommodation (“Disability”). Company does not currently offer disability insurance to its employees. In the event Company, in its sole discretion, elects to offer such insurance coverage (“Disability Policy”) to its employees at any time in the future, the definition of Disability as used herein automatically shall be modified by the adoption of the definition of disability as used in the Disability Policy. | |
In the event of the termination of Executive’s employment due to his death or Disability, Executive’s estate and/or Executive shall be entitled to receive: (i) a lump sum cash payment, payable within ten (10) business days after the date of death equal to the sum of any accrued but unpaid salary as of the date of death; and (ii) earned Executive benefits, perquisites and reimbursements described in Section 4 inclusive, if any, as to which Executive may be entitled hereunder or under Executive benefit plans, programs and arrangements of Kreido through the date of death. | ||
7. | Right to Assign. This Agreement shall be assignable only by Kreido. |
Page 4 of 13
8. | Miscellaneous Terms. |
8.1 | Post-Termination Defense of Claims. In the event that Executive and/or Kreido are named as defendants in any legal proceeding arising from the operation of Kreido’s business, Kreido shall defend, indemnify and hold Executive harmless to the full extent required by law. Kreido shall provide Executive with defense counsel of Kreido’s choosing, but who is also reasonably acceptable to Executive. In the event Executive’s interests in the proceeding are adverse to Kreido’s interests, Kreido shall provide Executive with the reasonable costs and fees of an attorney of Executive’s choosing. | ||
8.2 | Alternative Dispute Resolution; Mediation Before Arbitration. |
8.2.1 | Arbitrable Disputes.To the fullest extent allowed by law, any controversy, claim, or dispute between Executive and Kreido (and/or any of its directors, shareholders, officers, Executives, representatives or agents) relating to or arising out of his employment or the termination of that employment (“Arbitrable Dispute”) will be submitted to final and binding arbitration in Los Angeles County, California. Executive agrees to execute the Mutual Agreement to Arbitrate attached hereto as Exhibit “A” and incorporated herein by reference. | ||
8.2.2 | Mediation Before Arbitration.The foregoing provisions regarding | ||
Arbitration notwithstanding, before any Arbitrable Dispute is submitted to arbitration, the Parties agree to mediate such dispute in good faith with a professional mediator who is also a licensed attorney experienced in the area of employment law. If the parties cannot agree on the choice of a mediator, each party shall select a mediator, the two of whom will then select a third mediator who alone will conduct the mediation. In the event one party makes a demand on the other for mediation to which such party fails to respond for a period of thirty days, the party demanding mediation may then submit the dispute directly to Arbitration pursuant to the Mutual Agreement to Arbitrate. |
9. | General Terms and Conditions. |
9.1 | Waiver. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any prior or subsequent breach; provided, however, that either party to this Agreement may waive any obligation owed to such party, if such waiver is in writing signed by an authorized signer. | ||
9.2 | Integration; Modification.This Agreement constitutes the entire understanding and agreement between Kreido and Executive regarding its subject-matter and supersedes all prior negotiations and agreements between them with respect to its subject-matter whether oral or written. This Agreement may not be modified except by a writing signed by Executive and a duly authorized officer of Kreido. | ||
9.3 | Enforceability; Severability. If any provision of this Agreement shall be deemed invalid or unenforceable in whole or in part, such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be. |
Page 5 of 13
9.4 | Binding Effect.All the terms and conditions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. | ||
9.5 | Descriptive Headings.The paragraph and section headings in this Agreement are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. | ||
9.6 | Counterparts and Facsimile Signatures.This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all such counterparts together shall constitute but one agreement. Facsimile signatures on this Agreement shall be treated as original signatures. | ||
9.7 | Third-Party Beneficiaries.No person shall be a third-party beneficiary of this Agreement and no person other than the parties hereto and their permitted successors and assigns shall receive any of the benefits of this Agreement. | ||
9.8 | Applicable Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflicts of laws principles. | ||
9.9 | Arms Length Agreement.This Agreement has been negotiated at arms length between persons knowledgeable in the matters dealt with herein. Accordingly, any rule of law or any statute, legal decision, or common law principle of similar effect that would require interpretation of any ambiguity in this Agreement against the party that drafted it is of no application and is hereby expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intentions of the Parties hereto. | ||
9.10 | Notices. All notices, statements and other documents that any party is required or desires to give to the other party hereunder shall be given in writing and shall be served in person, by express mail, by certified mail, by overnight delivery or by facsimile at the respective addresses of the parties as set forth below, or at such other addresses as may be designated in writing by such party in accordance with the terms of this Section 9.10. |
If to Kreido: | Kreido Biofuels, Inc. | |
1140 Avenida Acaso, Camarillo, California 93012 | ||
Attention: Betsy Wood Knapp, Chair of the Board | ||
Telephone: (805) 389-3499 Fax: (805) 384-0989 | ||
With a copy to: | Susan Keenberg, Esq. | |
1217 Acacia Avenue | ||
Torrance, California 90501 | ||
Telephone: (310) 783-0999 | ||
Fax: (310) 783-0111 | ||
If to Executive: | George A. Ben Binninger | |
INFORMATION ON FILE |
Page 6 of 13
Kreido | Biofuels, Inc. | Executive | ||
By: | ||||
Betsy Wood Knapp, Chair of the Board | George A. Ben Binninger |
Page 7 of 13
TOARBITRATE CLAIMS
Page 8 of 13
Page 9 of 13
Page 10 of 13
Kreido Biofuels, Inc. | Employee | |||||
Signature: | Signature: | |||||
Print Name: | Betsy Wood Knapp | Print Name: | George A. Binninger | |||
Print Title: | Chair | Date: | ||||
Date: | ||||||
Page 11 of 13
Page 12 of 13
DATE OF AGREEMENT: | April 28, 2007 | |||
EXPIRATION DATE: | January 12, 2008 | |||
OFFICER: | ||||
KREIDO BIOFUELS, INC. | OFFICER: | |||||
By: | ||||||
Name: Betsy Wood Knapp | Signature | |||||
Its: Chair | Name: George A. Binninger |
Page 13 of 13
Exhibit 10.3
KREIDO BIOFUELS, INC.
BOARD OF DIRECTORS OUTSIDE DIRECTOR COMPENSATION PROGRAM
July 26, 2007
The Outside Directors’ Compensation Program set forth below is subject to modification by the Company’s Board and the Company’s Shareholders.
a.Annual Retainer.Each Outside Director will be paid an Annual Retainer for services as a Director of the Company and any subsidiary of the Company, if applicable, of $20,000, which will be paid in quarterly payments of $5,000. The Chair of the Audit Committee shall receive additional annual compensation of $5,000, which will be paid in quarterly payments of $1,250, and the Chairs of other committees each shall receive additional annual compensation of $1,000, which will be paid in quarterly payments of $250. The Chair of the Board, in recognition of the duties and responsibilities attendant with such a position, shall receive additional annual compensation of an amount to be determined by the Board. The Annual Retainer and all other Director compensation paid to Outside Directors shall be prorated for partial years of service. These amounts will be paid in gross and Outside Directors will be responsible for reporting and paying all applicable taxes.
b.Meeting Fees.Each Outside Director shall receive $1,000 for each Board meeting attended in person physically and $500 for each Board meeting attended telephonically. In addition, each Outside Director shall receive $500 for each committee or subsidiary Board meeting attended in person physically and $250 for each committee or subsidiary Board meeting attended telephonically. The total compensation for such board and committee meetings shall not exceed $1,000 if multiple meetings are attended in person physically on any given day and shall not exceed $500 if multiple meetings are attended telephonically on any given day. No fees will be paid for telephone calls other than board and committee meetings as set forth above, nor for meeting preparation or other time spent on Board business.
1
c.Stock Grant and Options. Each Outside Director shall receive a grant of 2,500 shares of Company stock upon his/her election or appointment to the Board after the adoption of this Outside Director Compensation Director Program. In addition, each Outside Director shall be entitled to participate in the Kreido Biofuels 2006 Equity Incentive Plan (“Plan”) as described in this Paragraph (c). The Outside Director’s participation in the Plan shall be governed by the terms and conditions set forth in the applicable Plan documents. Capitalized words not defined in this paragraph (c) but used here shall have the meanings ascribed to them in the Plan. Upon his/her first appointment or election to the Board, each Outside Director shall receive options to purchase 25,000 shares of the Company’s common stock (“Grant”) at a strike price equal to the closing bid price on the date on which the Grant is made. On October 15 of each calendar year beginning in 2007, each Outside Director shall receive options to purchase 25,000 shares of the Company’s common stock less the number of shares covered by Grants made to such Outside Director during the 12-month period immediately preceding the applicable October 15 grant date (also a “Grant”). All Grants shall vest 50% six months after the date of grant and 50% twelve months after the date of grant. The Term of the Option shall be ten years from the date of grant.
d.Expense Reimbursements. Reasonable out-of-pocket expenses incurred by an Outside Director related to the performance of the Outside Director’s duties will be reimbursed to him/her. Requests for reimbursement of expenses shall be documented by the Outside Director and transmitted to the Corporate Secretary, who will authorize payment by the CFO, subject to review by the Board Audit Committee.
2
Kreido Biofuels CEO Steps Down; Board Names Interim CEO and Expands the Board of Directors
Camarillo, Calif., July 27, 2007– The Board of Directors of Kreido Biofuels, Inc. (OTC BB: KRBF), a renewable energy company, announced today that it has accepted the resignation of Chief Executive Officer Dr. Joel Balbien, effective immediately, and has appointed Kreido Board member G.A. Ben Binninger as interim Chief Executive Officer. In addition, Richard A. Redoglia and Murli Tolaney have been elected to the company’s board.
Betsy Wood Knapp, Kreido’s Chair of the Board, stated, “We appreciate Dr. Balbien’s efforts on the part of Kreido. He led us through our public offering and helped set the course for commercializing our proprietary technology in biodiesel production and will remain available to provide advice and assistance to the company through October 31, 2007. I am pleased to appoint Ben Binninger as Kreido’s interim CEO. We are fortunate to have someone with Ben’s 30 years experience in fuels and chemicals to continue the progress being made in carrying out our business plan. Investors will continue to hear about our progress in the coming weeks and months.”
Newly appointed Kreido interim Chief Executive Officer Ben Binninger, remarked on his appointment, “I look forward to helping the Kreido team demonstrate the value and capabilities of the STT System by working to execute on current initiatives so that our plants are online in 2008. I am confident that my familiarity with Kreido’s technology, business and people will enable me to be immediately effective.”
Mr. Binninger previously served as Kreido’s Chief Operating Officer and as a consultant to Kreido Laboratories, a wholly owned subsidiary of Kreido Biofuels. Mr. Binninger has hands-on experience leading both large and small technologically sophisticated global process and service businesses with Atlantic Richfield Company (ARCO), Rio Tinto Borax, Exxon and Hercules. Mr. Binninger has a B.E. degree in Chemical Engineering from Manhattan College and a M.B.A. from Harvard University.
The Board is conducting a comprehensive search to fill the CEO position with a leader who has the experience and skills to capitalize on all the opportunities Kreido has before it.
Kreido Announces New Board Members
Commenting on the new board appointments, Chair of the Board, Knapp stated, “Richard and Murli are two proven business executives who bring an exceptional degree of leadership and expertise to our board, as well as depth and breadth of experience in the engineering, environmental and financial industries. They will add valuable strategic guidance to Kreido as we continue to execute our business strategy.”
Mr. Redoglia has more than 25 years of experience in the energy/finance industry including long tenures with two global financial institutions, running their energy institutional brokerage
1
operations. He currently serves as Executive Director of Global Energy Horizons (GEH), a strategic investment firm focused on businesses within the energy industry. Prior to GEH, he was the Director of Global Energy Futures Group for ABN AMRO Inc. During his 15-year tenure with Merrill Lynch, Mr. Redoglia rose to the position of Director of the Energy Commodities Group.
Mr. Tolaney is Chairman of Montgomery Watson Harza (MWH), a privately owned global environmental engineering, management, technology and construction company. Mr. Tolaney joined MWH in 1973 as a Senior Engineer and in 1992 became its Chief Executive Officer, a position he held until 2001 when he assumed his current post of Chairman of this 130 office worldwide, 6,000 employee firm.
Realignment of Key Staff
The Board, at the recommendation of the interim CEO Ben Binninger, has realigned the company’s management team:
• | Phil Lichtenberger, who has been Senior Vice President and Chief Financial Officer, has been appointed Chief Operating Officer. |
• | John Philpott, who has been the company’s Chief Accounting Officer, will now take the position of Chief Financial Officer. |
• | Larry Sullivan will continue in his role as the company’s Chief Technology Officer. |
About Kreido Biofuels
Kreido Biofuels, Inc. has invested $20 million to provide the world renewable energy through its proprietary process intensification technology – the STT® system. The Company is currently developing biodiesel plants in the U.S. that will have an anticipated aggregate nameplate capacity of 100 million gallons per year. Kreido’s plants are built around its STT® 30G biodiesel production unit, a complete pipe-to-pipe biodiesel production system that significantly improves the efficiency, quality, and process control of biodiesel production. Committed to building a sustainable future, Kreido Biofuels’ plants have a smaller footprint and offer feedstock flexibility. The Company plans to license its biodiesel technology internationally and to third-party biodiesel producers in the U.S. Kreido Biofuels is based in Camarillo, California. STT is a registered USPTO trademark of Kreido Biofuels, all rights reserved. For more information about Kreido Biofuels, visitwww.kreido.com.
# # #
Investor Relations Contact:
Ina McGuinness
Integrated Corporate Relations
Office: (310) 954-1100
2
Public Relations Contact:
Denica Gordon
DGPR Consulting
Office: (323) 253-9337
dgprconsulting@aol.com
3