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Consulting Services Agreement-restricted Stock Unit Agreement

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Title: Consulting Services Agreement-RESTRICTED STOCK UNIT AGREEMENT
Governing Law: Delaware     Date: 2/18/2010

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Exhibit 10.3






THIS RESTRICTED STOCK UNIT AGREEMENT  (this “ Agreement ”) is entered into as of the 3rd day of February, 2010, by and between BioNeutral Group, Inc., a Nevada corporation (the “ Company ”), and Chertoff Group, L.L.C., a Delaware limited liability company (the “ Grantee ”).


WHEREAS, this Agreement evidences an equity award the Company is obligated to grant to Advisor pursuant to that certain Advisory Agreement, dated as of August 26, 2009, by and between the Company and the Advisor, as amended from time to time (the " Advisory Agreement ").


NOW, THEREFORE, for and in consideration of the mutual promises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:



Grant of Restricted Stock Units .


Subject to the restrictions and other conditions set forth herein, the Board of Directors of the Company (the “ Board ”) hereby grants to the Grantee on February 3, 2010 (the “ Grant Date ”) the right to receive the Applicable Number of Shares of Common Stock on the Delivery Date to the extent then vested (the “ Restricted Stock Units ”).  For purposes hereof, (i) the “ Applicable Number of Shares of Common Stock ” means the number of shares of Common Stock equal to A divided by B, where A equals $1,384,346.85, and B equals the greater of (x) the Fair Market Value of a share of Common Stock on the Delivery Date and (y) $0.186, and (ii) the “ Delivery Date ” means the earlier to occur of January 2, 2013 and the date that is immediately prior to a Change in Control.



Vesting and Payment .


(a)   Normal Vesting .  Except as set forth in Section 2(b) hereof, the Restricted Stock Units shall vest on a cumulative basis as set forth below, subject to the Grantee’s continued service with the Company or any of its affiliates on each applicable vesting date:



Vesting Date


Cumulative Percentage of Units Vested


September 1, 2010

25 %

September 1, 2011

50 %

September 1, 2012





(b)   Accelerated Vesting .  Notwithstanding the vesting provisions of Section 2(a) hereof, the Restricted Stock Units shall become fully vested upon the earlier to occur of (i) the consummation of a “Change in Control” (as defined below) or (ii) the termination of the Grantee’s service by the Company on or after February 26, 2010 pursuant to Section 4(b)   of the Advisory Agreement.  In the event that the Grantee voluntarily resigns the Grantee’s service with the Company on or after February 26, 2010, the Grantee shall be obligated to refund to the Company the after-tax value of any portion of the Restricted Stock Units that vested and for which the Company issued the underlying shares of Common Stock during the three-month period preceding such termination ( provided that such refund obligation shall not be required if such termination of service occurs within three months prior to a Change in Control).  This Agreement shall not in any way affect the right of the Company to adjust, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.


For purposes hereof, the term “ Change in Control ” shall mean:


(i)   any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) (other than (A) the Company, (B) any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or (C) any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company, becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities;


(ii)   during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any Approved Directors (collectively, the “Incumbent Directors”) cease to constitute a majority of the Board (an “Approved Director” being defined to mean any person whose election to the Board or nomination for election by the Company’s stockholders was approved by a vote of (x) at least two-thirds of the Incumbent Directors or (y) all of the Incumbent  Directors who are directors at the time of such election; provided that any person designated by a person who has entered into an agreement with the Company to effect a transaction described in paragraph (i), (iii), or (iv) of this definition or a person whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board) shall not be considered to be an Approved Director);


(iii)   a merger or consolidation of the Company or a direct or indirect subsidiary of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or the ultimate parent company of the Company (or, in each case, the entity surviving any merger with the Company); provided , however , that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than those covered by the exceptions in paragraph (i) of this definition) acquires more than 50% of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control of the Company; or




(iv)   a complete liquidation or dissolution of the Company or the consummation of a sale or disposition of all or substantially all of the assets of the Company and its direct and indirect subsidiaries on a consolidated basis other than the sale or disposition of all or substantially all of such assets to a person or persons who beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding voting securities of the Company immediately prior to such sale.


Notwithstanding anything to the contrary contained herein, the Grantee shall be permitted to participate in any Change in Control involving a merger of the Company or any of its subsidiaries that affects or involves the Common Stock or tender offer or other general offer to purchase, acquire, exchange or convert shares of Common Stock with respect to shares of Common Stock subject to outstanding Restricted Stock Units on a contingent basis ( i.e. , by allowing the Grantee to receive all or a portion of the Applicable Number of Shares of Common Stock contingent upon consummation of such transaction and to receive the per share consideration payable in respect of such transaction for the Applicable Number of Shares of Common Stock).


(c)   Distribution of Restricted Stock Units .  Subject to the provisions of Section 2(d) hereof, the Grantee shall receive the number of shares of common stock of the Company, par value $.00001 per share (the “ Common Stock ”), that correspond to the number of Restricted Stock Units that have become vested on the Delivery Date.   For purposes hereof, the term “ Fair Market Value ” shall mean, as of any date, the last sales price reported for the Common Stock on the applicable date:  (A) as reported on the principal national securities exchange in the United States on which it is then traded, (B) if the Common Stock is traded on the OTC Bulletin Board, the closing bid price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (C) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (D) if the Common Stock is not traded, listed or otherwise reported or quoted, Fair Market Value shall be determined without applying minority interest, lack of liquidity or other similar discounts by a nationally recognized, independent appraisal firm mutual

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