FORM OF CONSULTANT STOCK OPTION AGREEMENT

EXHIBIT 10.3

FORM OF

CONSULTANT STOCK OPTION AGREEMENT

This Non-Qualified Stock Option Agreement (this “Agreement”) is made and entered into as of January 10, 2008 (the “Grant Date”) by and between BioLargo, Inc., a Delaware corporation (the “Company”), whose address is 2603 Main Street, Suite 1155, Irvine, California 92614, and ________________________________, an individual (“Optionee”). Capitalized terms used herein without definition shall have the meanings given to them in Appendix “A” attached hereto and incorporated herein by this reference).

RECITALS

A. The Board of Directors of the Company (the “Board”) has authorized granting to Optionee, effective as of the date of this Agreement, a non-qualified stock option under such terms and conditions as are hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties herein set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

1. Grant of Stock Option . The Company hereby grants to Optionee a Non-Qualified Stock Option (the “Option”) to purchase, upon and subject to the terms and conditions of this Agreement, all or any part of One Million Two Hundred Thousand (1,200,000) shares of Stock at a per share exercise price of $0.99 (the “Per Share Exercise Price”).

2. Vesting . Subject to Sections 4.2 and 6 hereof, the Option shall become exercisable with respect to the following percentages of the number of shares subject to the Option on the following dates (each, a “Vesting Date”) and at any time thereafter until such Option shall terminate in accordance with the terms of this Agreement:

Notwithstanding the foregoing, no portion of this Option shall vest if the Optionee is not, on a Vesting Date, providing services to the Company pursuant to his related consulting agreement.

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3. Manner of Exercise and Payment . Optionee shall exercise the Option by giving (a) written notice of such exercise to the Board (or, if so authorized by the Board, to the Compensation Committee of the Board (the “Committee”), specifying the number of shares of Stock with respect to which such Option is being exercised, together with (b) payment of the full purchase price for such shares, by wire transfer to a Company account designated by the Board (or the Committee) or by unendorsed certified or cashier’s check, equal to the number of shares to be purchased multiplied by the Per Share Exercise Price.

3.1. Effective Date of Exercise . The date upon which such written notice is given and payment of the full purchase price is received by the Company shall be the exercise date for the Option. From such exercise date, Optionee shall be entitled to the issuance of a stock certificate evidencing Optionee’s ownership of the shares of Stock acquired pursuant to such exercise (but subject to Section 8 hereof). Optionee shall not have any of the rights or privileges of a stockholder of the Company (including, without limitation, rights to distributions, voting rights, inspection rights, dissenter’s rights, rights to bring a derivative action, or other rights of a shareholder under applicable corporate law) in respect of any shares of Stock issuable upon exercise of such Option until and only to the extent such Option is exercised and certificates representing such shares shall have been issued and delivered.

3.2. No Fractional Shares . No installment of such Stock Option shall be exercisable except with respect to whole shares.

4. Termination .

4.1. In General . The Option granted under Section 1 hereof, to the extent unexercised, shall terminate at the close of business on the fifth (5th ) anniversary of the Grant Date, subject to Section 6 or Section 7 hereof (as applicable).

4.2. Change of Control. If, in connection with the Change of Control, this Option is not assumed, or if a substitute Option is not issued, or if the assumed or substituted awards fail to contain similar terms and conditions as the Option prior to the Change of Control or fail to preserve, to the extent applicable, the benefit to be provided to the Optionee as of the date of the Change of Control, including but not limited to the right of the Optionee to receive shares upon exercise of the Option that are registered for sale to the public pursuant to an effective registration statement filed with the U.S. Securities and Exchange Commission, then each holder of an Option that is outstanding as of the date of the Change of Control shall have the right, exercisable by written notice to the Company (or its successor in the Change of Control transaction) within 30 days after the Change of Control (but not beyond the Option’s expiration date), to receive, in exchange for the surrender of the Option, an amount of cash equal to the excess of the greater of the Fair Market Value of the Shares determined on the Change of Control date or the Fair Market Value of the Shares on the date of surrender covered by the Option (to the extent vested and not yet exercised) that is so surrendered over the purchase or grant price of such Shares under the Award. If the Board (or the Committee) so determines prior to the Change of Control, any such Option that is not exercised or surrendered prior to the end of such 30-day period will be cancelled.

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5. Non-Transferability . Neither Optionee nor any successor or assignee thereof shall have any power or right to transfer, assign, anticipate, hypothecate or otherwise encumber any part or all of the Option granted under Section 1 hereof, other than by will or by the laws of descent and distribution, and such Option shall be exercisable during Optionee’s lifetime only by Optionee; nor shall all or any part of such Option be subject to seizure by any creditor of any such person, by a proceeding at law or in equity, and no such benefit shall be transferable by operation of law in the event of the bankruptcy or insolvency of Optionee or any successor or assignee thereof. Any such attempted assignment or transfer shall be void and shall terminate this Agreement, and the Company shall thereupon have no further liability hereunder.

6. Cessation of Employment .

6.1. In General . Subject to Sections 6.2 and 7 hereof, if Optionee ceases to be employed by the Company or any of Subsidiary, Optionee may, subject to the time limitations of Section 4 hereof, exercise the Option granted under Section 1 hereof to the extent that Optionee was entitled to exercise it under Section 2 hereof on the date of such cessation at any time (a) within one (1) year after such cessation if such cessation results from the Disability of Optionee, or (b) otherwise within ninety (90) days after such cessation.

6.2. Termination for Cause . If Optionee is terminated as an employee of the Company or any Subsidiary for Cause, the right to exercise any unexercised portion of the Option granted under Section 1 hereof shall terminate immediately. For the purposes of this Agreement “Cause” with respect to an Optionee means (a) a material breach by Optionee of any employment agreement between such Optionee on the one hand and the Company or Subsidiary on the other hand, together with failure to correct such breach within thirty (30) days after notice of such breach is given to such Optionee by the employer; (b) gross malfeasance by Optionee in the performance of Optionee’s duties on behalf of the Company or Subsidiary; or (c) the conviction of or plea of guilty or nolo contendere by Optionee with respect to any misdemeanor or felony arising from or related to the conduct of the affairs of the Company or Subsidiary.

7. Death of Optionee . If Optionee dies while employed by the Company or Subsidiary, or during the period described in clause (a) or clause (b) of Section 6.1 hereof as applicable, then, subject to the time limitations of Section 4 hereof, the Option granted under Section 1 hereof shall expire within one (1) year after the date of death; and the executor or administrator of Optionee’s estate, or the person or persons to whom Optionee’s rights under such Option shall have passed by will or by the applicable laws of descent and distribution, shall have the right to exercise the Option to the extent that Optionee was entitled to exercise the Option under Section 2 hereof on the date of death.

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8. Compliance With Securities and Tax Laws . No shares of Stock shall be issued pursuant to the exercise of the Option except in compliance with all applicable federal and state securities and tax laws and regulations and in compliance with rules of stock exchanges