Employment Agreement

Exhibit 10.1

Employment Agreement

This employment agreement (“Agreement”), executed on December 10, 2007 (“Execution Date”) but effective as of December 1, 2007 (“Effective Date”), by and between Kreido Biofuels, Inc., a Nevada corporation located at 1070 Flynn Avenue, Camarillo, California 93012 and Kreido’s wholly-owned subsidiary, Kreido Laboratories (collectively “Kreido” or the “Company”) and George A. Ben Binninger, an individual (“Executive”).

Recitals

Whereas Executive currently is employed as Company’s Interim Chief Executive Officer; and

Whereas Kreido now wishes to employ Executive as its Chief Executive Officer on an ongoing basis and Executive wishes to be so employed;

Now, therefore, in consideration of good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

Terms and Conditions

1.		Executive’s Duties; Title; Location . As of the Effective Date, Executive is employed as Kreido’s Chief Executive Officer (“CEO”) under the terms and conditions below. Executive shall do and perform all services, acts and things necessary and advisable to manage and conduct the business of the Company that are normally associated with the position of CEO. At all times during his employment, Executive shall report to and be subject to the direction and policies that are established from time to time by the Company’s Board of Directors (the “Board”)
2.		TERM AND TERMINATION . Except as specifically provided herein, the Term of this Agreement shall commence as of the Effective Date. The Term shall continue for eighteen months unless it is terminated earlier as provided herein below.
3.		Efforts; Location. Executive shall work at Kreido’s Camarillo, California office. 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. The nature of the Executive’s duties requires flexibility in the days and hours that the Executive must work.
4.		Compensation.

4.1

Cash Compensation.

4.1.1

Base Salary . Executive shall receive an annual base salary of $225,000.00 in accordance with Kreido’s regular payroll practices.

	4.1.2		Bonus. Executive shall be entitled to participate in a performance-based executive bonus plan (“Bonus Plan”), which shall be promulgated by the Compensation Committee of the Company’s board of directors each fiscal year. The Bonus Plan will set forth three levels of target performance goals “TPGs” for fiscal years 2008 and 2009 which, if achieved, will entitle the Executive to a bonus of $48,000.00, $84,000.00 or $120,000.00 depending upon the level of TPG achieved. The TPGs will consist of a combination of goals for the Executive’s individual performance and the Company’s overall performance in a ratio of 75% Company performance and 25% individual Executive performance. Bonuses paid under the Bonus Plan, if any, will be paid annually within 60 days after the end of the fiscal year. The foregoing notwithstanding, so long as Executive’s employment under this Agreement is not terminated voluntarily by Executive Without Good Reason prior to December 31, 2008 pursuant to Section 8.1 of this Agreement, Executive’s bonus for calendar year 2008 shall be no less than $40,000.00 and no more than $120,000.00 (“2008 Bonus”). In the event Executive’s employment is terminated by Company without Cause or by Executive with Good Reason prior to the end of the fiscal year, Executive shall be entitled to receive a pro rata portion of the 2008 Bonus. With regard to calendar year 2009, regardless whether Executive is employed by Company at the end of Fiscal Year 2009, Executive shall be entitled to a pro rata bonus for those months of 2009 during which he is employed hereunder, under the same terms and conditions that apply to Executive’s fiscal year 2008 Bonus.
	4.1.3		Engagement Bonus . Upon the execution of this Agreement by both parties, Executive shall receive a payment of $25,000.00 less all applicable payroll taxes (“Engagement Bonus”).
	4.1.4.		Stock Options. Executive shall be entitled to participate in the Kreido Biofuels 2006 Equity Incentive Plan (“Plan”). Executive’s participation in the Plan shall be governed by the terms and conditions set forth in the applicable Plan documents to the extent the Plan documents are not inconsistent with the terms of this Agreement except to the extent required by law. Capitalized words not defined in this Agreement but used in this Section shall have the meanings ascribed to them in the Plan.

	4.1.4		(a) Grant of Options. On the Execution Date, the Company will grant Executive an option to purchase 1,250,000 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.
	4.1.4		(b) Option Exercise Price; Term . The per share exercise price of the Options shall be the final closing price per share of Company common stock on the date of grant, that being the Execution Date. The Term of the Option shall be ten years from the date of grant.
	4.1.4		(c) Vesting and Exercise . The Options shall vest and be exercisable as follows: 100,000 options shall vest on the Execution Date; an additional 100,000 options shall vest on the first day of each of the eleven months beginning with January, 2008 and ending with November, 2008; and on December 10, 2008, an additional 50,000 Options shall vest (each a “Monthly Vesting”). Each such Monthly Vesting shall remain exercisable for a period of ten years from the date of grant, subject to Section 4.1.4(e)(iv).

	4.1.4		(d) Lock-Up Agreement . The Executive shall enter into a Lock-Up Agreement with the Company in the form attached hereto as Exhibit B . During any period that Executive is precluded by the Lock-Up Agreement from exercising the Option granted to Executive in Section 4.1.4(a), then the exercise period in Section 4.1.4(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.
	4.1.4		(e) Termination of Service; Accelerated Vesting .

(i) If the Executive’s employment is terminated by the Company for Cause as such term is defined below in Section 7.1.1, (1) all unvested Monthly Vestings shall expire immediately effective the date of termination, and; (2) all vested Monthly Vestings shall expire ten years following the date of the grant.

(ii) If the Executive’s employment is terminated voluntarily by the Executive without Good Reason as such term is defined below, all unvested Monthly Vestings shall immediately expire effective the date of termination of employment. Vested Monthly Vestings, to the extent unexercised, shall expire on the later of ten years after the date of grant or the expiration of the contractual Lock-Up Agreement.

(iii) If the Executive’s employment terminates on account of death or Disability, as defined below, all unvested Monthly Vestings shall immediately expire effective the date of death or termination of employment and all vested Monthly Vestings to the extent unexercised, shall expire ten years after the date of the grant unless otherwise limited by applicable federal or state law.

(iv) If the Executive’s employment is terminated (A) in connection with a Change of Control as defined below, (B) by the Company without Cause, or (C) by the Executive for Good Reason, all unvested Monthly Vestings shall immediately vest and become exercisable effective the date of termination of employment, and, to the extent unexercised, shall expire ten years after the date of grant.

4.1.4

(f) 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.

4.1.5

Grant of Restricted Stock . On the Execution Date, the Company will issue to Executive 100,000 shares of Company common stock under the 2006 Equity Incentive Plan, which shall be Restricted Stock in that it shall be subject to repurchase by the Company at the price of $0.01 per share if Executive shall not be in the employ of the Company through the Term of the Agreement other than due to: (1) the death or disability of Executive; (2) the termination of Executive’s employment by the Company without Cause; or (3) the termination of Executive’s employment by Executive for Good Reason. The certificate representing the Restricted Stock shall be held in the custody of the Company or its designee for the account of the Executive pending delivery to Executive upon the lapse of the restriction. The parties agree that the value of the Restricted Stock while subject to restriction is $0.01 per share. The Restricted Stock shall be subject to the restriction described herein and shall bear an appropriate legend with respect to the restriction.

4.1.5

(a) Taxes . The Executive shall be liable for any and all taxes, including withholding taxes, arising out of this grant and the vesting of Restricted Stock hereunder. When the restriction on the Restricted Stock lapses, Executive may elect to satisfy Company’s withholding tax obligation by (1) remitting to Company the amount of Company’s minimum withholding obligation; (2) having Company retain that portion of the Restricted Stock having a fair market value equal to the Company’s minimum withholding obligation; (3) having the Company retain its minimum withholding obligation from payroll otherwise due and payable to Executive at the time the Restriction lapses; or (4) a combination of numbers 1 through 3. Executive shall notify Company of his election under this Section as soon as practicably possible after the restriction on the Restricted Stock has lapsed.

4.2

Additional Benefits .

	4.2.1		Welfare Benefit Plans . Executive shall at all times be entitled to participate in all benefit, 401(k) and other ERISA-qualified plans made available to senior management executives of Kreido under the same terms offered to other senior management executives, including without limitation, health benefit coverage for Executive’s spouse and dependant children, if any.
	4.2.2		Expense Reimbursement . Kreido shall reimburse Executive for all ordinary and necessary expenses reasonably incurred by Executive on Kreido’s behalf (“Business Expenses”). Executive shall provide Kreido with documentation for all Business Expenses at the time reimbursement is requested. In the event it is necessary for Executive to travel on Kreido’s behalf, Executive shall be entitled to fly and have travel accommodations on the same level as Kreido’s other most senior management Executives.
	4.2.3		Discretionary Time Off . During his employment hereunder, Executive shall be entitled to accrue Paid Time Off (“PTO”) in accordance with Kreido’s regular PTO policy for all employees, or at the rate of fifteen days per calendar year, whichever is greater. In addition, Executive may devote up to 4 work days per calendar month to philanthropic, civic, charitable, personal, business or religious activities, or to serving on the boards of directors or as a trustee of other entities (“Discretionary Time Off”). Time off Executive takes prior to December 6, 2007, if any, shall not count against Executive’s 2008 PTO accrual nor his 2008 Discretionary Time Off accrual. The quantum of Executive’s Discretionary Time Off shall not be limited or reduced by any other provision of this Agreement, including, without limitation, Section 10.4.
			Executive shall provide written notice to the Company of those companies, if any, for which he now serves as a director or trustee, and Executive shall provide written notice to the Company in advance of any additional board memberships and/or trusteeships he proposes to take on that involve the area of biofuels technology, supply, facilities, equipment, production, sales, and/or services.

5.

Proprietary Covenants of Executive .

	5.1		No Conflicts Of Interest. Executive acknowledges that he is bound to use good judgment, to adhere to the highest ethical standards, and to avoid situations that create an actual, potential, or apparent conflict of interest. Executive warrants and represents to Kreido that he is currently unaware of any actual, potential, or apparent conflicts of interest. He also agrees to immediately disclose to the Board of Directors of Kreido any and all actual, potential, or apparent conflicts of interest, should they later arise. In addition, Executive further represents and warrants to Kreido that for so long as he is employed by the Company, he shall inform the Company of each and every business opportunity presented to the Executive that arises that could be reasonably feasible for the Company to undertake in the area of biofuels technology, supply, facilities, equipment, production, sales, and/or services and that he will not, directly or indirectly, exploit any such opportunity for his own account or the account of any third party without first obtaining the Company’s written consent. Nothing contained in this Section 5.1 shall be construed to prevent Executive from engaging in the consulting activities in which he is currently engaged.
	5.2		Covenant Not to Use or Disclose Confidential Information.

	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, 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. Confidential Information shall not include any Kreido information that has been voluntarily disclosed to the public by Kreido, independently developed and disclosed by others, information about Kreido that Executive did not obtain by virtue of his employment or fiduciary relationship with the Company, or information which otherwise enters the public domain through lawful means.
	5.2.2		Non-disclosure of Confidential Information. Executive expressly acknowledges that in the performance of his duties and responsibilities with the Company prior to the execution of this Agreement, he has been exposed to Confidential Information and that he will continue to be exposed to the Confidential Information after the execution of this Agreement. During his employment and for three years thereafter, Executive shall regard and preserve as confidential all Confidential Information pertaining to Kreido and its affiliates that have been or may be obtained by Executive in any way by reason of Executive’s employment by Kreido. Executive shall not, without the prior and specific written consent of Kreido, or unless ordered to do so by court order or subpoena (i) use, publicize, release or disclose to others, either during or after the period of employment, Confidential Information 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 which calls for information deemed Confidential under this Agreement and to give Kreido reasonable opportunity to contest the subpoena. The foregoing notwithstanding, nothing contained in this Section 5.2.2 shall be construed to prevent Executive from using or disclosing Confidential Information when it is necessary for him to do so in the course of conducting his regular employment duties.

	5.3		Covenant Not to Interfere With Kreido’s Business Relationships. During his employment and for a period of 18 months after the termination of his employment, executive shall not, whether for Executive’s own account or for the account of a third-party, solicit or endeavor to entice any employee or vendor of Kreido to end any business and/or contractual relationship with Kreido. In addition, Executive will not use any of Company’s Confidential Information in order to induce any client or customer of Kreido to end its relationship with the Company.
	5.4		Ownership and Use of Materials.

	5.4.1		Kreido Materials. Executive agrees that all information encompassed in all 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 or that come into Executive’s possession during the Term are the property of Kreido and shall not be used by Executive in any way after the Agreement is terminated.
	5.4.2		Delivery of Materials . Upon termination of this Agreement, Executive shall promptly deliver to Kreido or destroy 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. The foregoing notwithstanding, if Executive is still a member of the Board of Directors of the Company after his employment with the Company terminates, Executive may retain the Confidential Information he acquired in his capacity as a director of the Company and not as the Company’s Chief Executive Officer.

6.

Termination Due to Death or Disability . If Executive dies during the employment, Executive’s employment shall automa