Exhibit 10.10
H2DIESEL,
INC.
Stock Option
Agreement
1.
Grant of
Option . In accordance with and subject to the terms and
conditions of this Stock Option Agreement (the “
Agreement ”), H2Diesel, Inc., a Delaware corporation
(the “ Corporation ” which term shall include
any entity which acquires, through merger, share exchange, purchase
of assets or otherwise, substantially all of the capital stock or
assets of the Corporation), grants to the person identified on
Schedule 1 attached hereto (the “ Optionee
”) a nonqualified stock option (the “ Option
”) to purchase the number of shares (the “ Option
Shares ”) of its Common Stock, par value $.0001 per share
(“ Common Stock ”), set forth on Schedule
1 , at the initial option exercise price set forth in
Schedule 1 (such price, as it may be adjusted hereunder from
time to time, the “ Exercise Price
”).
2.
Acceptance by
Optionee . The exercise of the Option or any portion
thereof is conditioned upon acceptance by the Optionee of the terms
and conditions of this Agreement, as evidenced by the
Optionee’s execution of Schedule 1 to this Agreement
and the delivery of an executed copy of this Agreement to the
Corporation.
3.
Vesting of
Option . The Option shall vest and be exercisable as set
forth in Schedule 1 .
4.
Expiration of
Option . The Option shall expire on the expiration date
set forth in Schedule 1 (the “ Expiration
Date ”) unless earlier terminated as set forth in
Section 6 below, and may not be exercised after such
date.
5.
Conditions to Exercise of
Option. Except
as otherwise set forth in Section 6 , the Optionee may
exercise the Option or any portion thereof at any time or from time
to time during the period commencing on the Grant Date set forth on
Schedule 1 and ending on the Expiration Date (the “
Option Term ”). The Option may be exercised only by
the Optionee or, in the event of his death or incompetence, his
personal representative or heirs, as the case may be.
6.
Termination of Employment
or Service as a Director . Upon termination of the Optionee’s
employment by or service as a director of the Corporation or any of
its subsidiaries for Cause (as defined below), the Option may be
exercised in whole or in part at any time or from time to time
until and including the 30th day after such termination. If such
employment or service as a director is terminated for any other
reason, then the Option may be exercised in whole or in part at any
time and from time to time during the remaining portion of the
Option Term. Notwithstanding anything in this Agreement to the
contrary, in no event may the Option be exercised following the
Expiration Date. For purposes of this Section 6 , the term
“ Cause ” shall mean (1) an action or omission
of the Optionee which constitutes a willful and material breach of,
or a willful and material refusal (other than by reason of his
disability or incapacity) to perform his duties which is not cured
within fifteen (15) days after receipt by the Optionee of written
notice of same, (2) fraud, embezzlement, misappropriation of funds
or breach of trust in connection with his services to the
Corporation, (3) conviction of a felony crime, or (4) gross
negligence in connection with the performance of the
Optionee’s duties which is not cured within fifteen (15) days
after receipt by the Optionee of written notice of same.
7.
Procedure for
Exercise . (a) The Option may be exercised for the number
of Option Shares specified in a written notice delivered to the
Corporation at least five days prior to the date on which purchase
is requested (such notice, an “ Exercise Notice
”), accompanied by full payment in cash of the aggregate
Exercise Price in respect of such Option Shares. If specified in
the Exercise Notice, payment of such Exercise Price may also be
made by means of the Corporation retaining from the Option Shares
to be delivered upon exercise of the Option, or portion thereof,
that number of Option Shares having an aggregate Fair Market Value
(as defined below) on the date that the Exercise Notice is
delivered to the Corporation (the date that the Exercise Notice is
delivered to the Corporation being referred to as the “
Valuation Date ”; provided, however ,
that if such date is not a day on which securities markets are open
for trading, then the Valuation Date shall be the first succeeding
date that such markets are open) equal to the aggregate Exercise
Price of the total number of Option Shares with respect to which
the Optionee shall then be exercising the Option. If upon exercise
of all or a portion of the Option there shall be payable by the
Corporation or a subsidiary any amount for withholding taxes, then,
at the Corporation’s election and as a condition to such
exercise, either (i) the Corporation shall reduce the number of
Option Shares to be issued to the Optionee by a number of Option
Shares of Common Stock having an aggregate Fair Market Value on the
Valuation Date equal to the amount of such withholding tax or (ii)
the Optionee shall pay such amount to the Corporation or its
subsidiary, as applicable.
(b) If any applicable law requires the
Corporation to take any action with respect to the Option Shares
specified in the Exercise Notice, or if any action remains to be
taken under the Certificate of Incorporation or Bylaws of the
Corporation, as in effect at the time, to effect due issuance of
Option Shares, then the Corporation shall take such action and the
day for delivery of such Option Shares shall be extended for the
period necessary to take such action. The Optionee shall not have
any of the rights of a shareholder of the Corporation under the
Option.
(c) As used herein, the phrase “Fair
Market Value” shall mean (i) if the Common Stock is
listed or admitted for trading on a national securities exchange,
an automated quotation system or the Over-the-Counter Bulletin
Board, the last reported sale price per share of the Common Stock
on the Valuation Date, or, in case no such reported sale takes
place on such day or is reported, then the average of the last
reported per share bid and ask prices for shares of the Common
Stock on such date (or if such bid and ask prices are not available
on such date, the most recent
