Exhibit 10.2

 
KESSELRING HOLDING CORPORATION
EMPLOYEE NONSTATUTORY STOCK OPTION AGREEMENT

This Employee Nonstatutory Stock Option Agreement ("Agreement") is made and
entered into as of the date set forth below, by and between KESSELRING HOLDING
CORPORATION, a Delaware corporation (the "Company"), and the following employee
of the Company ("Optionee"):

In consideration of the covenants herein set forth, the parties hereto agree as
follows:

1.  Option Information.
 
(a)
Date of Option:
December 12, 2007

 
(b)
Optionee:
Douglas Badertscher

 
(c)
Number of Shares:
2,500,000 of which 625,000 shall vest on

 
November 15, 2007, 625,000 shall vest on February 15, 2008, 625,000 shall vest
on May 15, 2008 and 625,000 shall vest on August 15, 2008

 
(d)
Exercise Price:
$0.30

2.  Acknowledgements.
(a) Optionee is an employee of the Company.

 
(b) The Board of Directors (the "Board" which term shall include an authorized
committee of the Board of Directors) and shareholders of the Company have
heretofore adopted a 2007 Incentive Stock Plan (the "Plan"), pursuant to which
this Option is being granted; and

 
(c) The Board has authorized the granting to Optionee of a nonstatutory stock
option ("Option") to purchase shares of common stock of the Company ("Stock")
upon the terms and conditions hereinafter stated and pursuant to an exemption
from registration under the Securities Act of 1933, as amended (the "Securities
Act") provided by Rule 701 thereunder.

3.  Shares; Price.  Company hereby grants to Optionee the right to purchase,
upon and subject to the terms and conditions herein stated, the number of shares
of Stock set forth in Section 1(c) above (the "Shares") for cash (or other
consideration as is authorized under the Plan and acceptable to the Board of
Directors of the Company, in their sole and absolute discretion) at the price
per Share set forth in Section 1(d) above (the "Exercise Price).

4.  Term of Option; Continuation of Service.  This Option shall expire, and all
rights hereunder to purchase the Shares shall terminate, five (5) years from the
date hereof. This Option shall earlier terminate subject to Sections 7 and 8
hereof upon, and as of the date of, the termination of Optionee's employment if
such termination occurs prior to the end of such five (5) year period. Nothing
contained herein shall confer upon Optionee the right to the continuation of his
or her employment by the Company or to interfere with the right of the Company
to terminate such employment or to increase or decrease the compensation of
Optionee from the rate in existence at the date hereof.
 
 
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5.  Vesting of Option.  Subject to the provisions of Sections 7 and 8 hereof,
this Option shall become exercisable as set forth under Section 1(c) of this
Agreement.

6.  Exercise.  This Option shall be exercised by delivery to the Company of (a)
written notice of exercise stating the number of Shares being purchased (in
whole shares only) and such other information set forth on the form of Notice of
Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the
Exercise Price of the Shares covered by the notice (or such other consideration
as has been approved by the Board of Directors consistent with the Plan) and (c)
a written investment representation as provided for in Section 13 hereof.
Notwithstanding anything to the contrary contained in this Option, this Option
may be exercised by presentation and surrender of this Option to the Company at
its principal executive offices with a written notice of the holder’s intention
to effect a cashless exercise, including a calculation of the number of shares
of Common Stock to be issued upon such exercise in accordance with the terms
hereof (a “Cashless Exercise”).  In the event of a Cashless Exercise, in lieu of
paying the Exercise Price in cash, the holder shall surrender this Option for
that number of shares of Common Stock determined by multiplying the number of
Shares to which it would otherwise be entitled by a fraction, the numerator of
which shall be the difference between the then current Market Price per share of
the Common Stock and the Exercise Price, and the denominator of which shall be
the then current Market Price per share of Common Stock.  For example, if the
holder is exercising 100,000 Options with a per Warrant exercise price of $0.75
per share through a cashless exercise when the Common Stock’s current Market
Price per share is $2.00 per share, then upon such Cashless Exercise the holder
will receive 62,500 shares of Common Stock.  Market Price is defined as the
average of the last reported sale prices on the principal trading market for the
Common Stock during the five (5) trading days immediately preceding such
date.  This Option shall not be assignable or transferable, except by will or by
the laws of descent and distribution, and shall be exercisable only by Optionee
during his or her lifetime, except as provided in Section 8 hereof.

7.  Termination of Employment.  If Optionee is terminated "for cause" or the
Optionee resigns without “good reason”, as such terms are defined in the certain
Amended and Restated Employment Agreement entered by and between the Company and
Optionee (the “Employment Agreement”), this Option shall automatically terminate
as to all Shares covered by this Option that have not vested in accordance with
Section 1(c) prior to such termination.  If the Optionee is terminated “without
cause” or if the Employment Agreement is terminated for “good reason” by the
Optionee, as such terms are defined in the Employment Agreement, then the
Optionee shall continue to have rights as set forth under this Agreement with
respect to all Shares covered by this Option regardless of whether such Options
have vested pursuant to Section 1(c).
 
 
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Unless earlier terminated, all rights under this Option shall terminate in any
event on the expiration date of this Option as defined in Section 4 hereof.

8.  Death of Optionee.  If the Optionee shall die while in the employ of the
Company, Optionee's personal representative or the person entitled to Optionee's
rights hereunder may at any time within six (6) months after the date of
Optionee's death, or during the remaining term of this Option, whichever is the
lesser, exercise this Option and purchase Shares to the extent, but only to the
extent, that Optionee could have exercised this Option as of the date of
Optionee's death; provided, in any case, that this Option may be so exercised
only to the extent that this Option has not previously been exercised by
Optionee.

9.  No Rights as Shareholder.  Optionee shall have no rights as a shareholder
with respect to the Shares covered by any installment of this Option until the
effective date of issuance of the Shares following exercise of this Option, and
no adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate or certificates are issued
except as provided in Section 10 hereof.

10.  Recapitalization.  Subject to any required action by the shareholders of
the Company, the number of Shares covered by this Option, and the Exercise Price
thereof, shall be proportionately adjusted for any increase or decrease in the
number of issued shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend, or any other increase or decrease in the
number of such shares effected without receipt of consideration by the Company;
provided however that the conversion of any convertible securities of the
Company shall not be deemed having been "effected without receipt of
consideration by the Company".

In the event of a proposed dissolution or liquidation of the Company, a merger
or consolidation in which the Company is not the surviving entity, or a sale of
all or substantially all of the assets or capital stock of the Company
(collectively, a "Reorganization"), this option shall fully vest.

If the Company shall be the surviving entity in any merger or consolidation,
this Option thereafter shall pertain to and apply to the securities to which a
holder of Shares equal to the Shares subject to this Option would have been
entitled by reason of such merger or consolidation, and the installment
provisions of Section 5 shall continue to apply.

In the event of a change in the shares of the Company as presently constituted,
which is limited to a change of all of its authorized Stock without par value
into the same number of shares of Stock with a par value, the shares resulting
from any such change shall be deemed to be the Shares within the meaning of this
Option.

To the extent that the foregoing adjustments relate to shares or securities of
the Company, such adjustments shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as hereinbefore
expressly provided, Optionee shall have no rights by reason of any subdivision
or consolidation of shares of Stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class, and the number and price of Shares subject to this Option shall not
be affected by, and no adjustments shall be made by reason of, any dissolution,
liquidation, merger, consolidation or sale of assets or capital stock, or any
issue by the Company of shares of stock of any class or securities convertible
into shares of stock of any class.
 
 
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The grant of this Option shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes in
its capital or business structure or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or assets.

11.  Taxation upon Exercise of Option.  Optionee understands that, upon exercise
of this Option, Optionee will recognize income, for Federal and state income tax
purposes, in an amount equal to the amount by which the fair market value of the
Shares, determined as of the date of exercise, exceeds the Exercise Price. The
acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate
with Company in establishing the amount of such income and corresponding
deduction to the Company for its income tax purposes. In the event that the
Company should become liable with respect to withholding for federal or state
income and employment tax purposes (the “Tax Liability”) as a result of the
Optionee’s exercise of this Option, the Optionee shall reimburse the Company for
the Tax Liability prior to such Tax Liability becoming due.

12.  Modification, Extension and Renewal of Options.  The Board or Committee, as
described in the Plan, may modify, extend or renew this Option or accept the
surrender thereof (to the extent not theretofore exercised) and authorize the
granting of a new option in substitution therefore (to the extent not
theretofore exercised), subject at all times to the Plan and the
Code.  Notwithstanding the foregoing provisions of this Section 12, no
modification shall, without the consent of the Optionee, alter to the Optionee's
detriment or impair any rights of Optionee hereunder.

13.  Investment Intent; Restrictions on Transfer.

 
(a)  Optionee represents and agrees that if Optionee exercises this Option in
whole or in part, Optionee will in each case acquire the Shares upon such
exercise for the purpose of investment and not with a view to, or for resale in
connection with, any distribution thereof; and that upon such exercise of this
Option in whole or in part, Optionee (or any person or persons entitled to
exercise this Option under the provisions of Sections 7 and 8 hereof) shall
furnish to the Company a written statement to such effect, satisfactory to the
Company in form and substance. If the Shares represented by this Option are
registered under the Securities Act, either before or after the exercise of this
Option in whole or in part, the Optionee shall be relieved of the foregoing
investment representation and agreement and shall not be required to furnish the
Company with the foregoing written statement.

 
(b)  Optionee further represents that Optionee has had access to the financial
statements or books and records of the Company, has had the opportunity to ask
questions of the Company concerning its business, operations and financial
condition, and to obtain additional information reasonably necessary to verify
the accuracy of such information

 
 
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(c)  Unless and until the Shares represented by this Option are registered under
the Securities Act, all certificates representing the Shares and any
certificates subsequently issued in substitution therefor and any certificate
for any securities issued pursuant to any stock split, share reclassification,
stock dividend or other similar capital event shall bear legends in
substantially the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE
SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR
SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN
MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY
STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
 

and/or such other legend or legends as the Company and its counsel deem
necessary or appropriate. Appropriate stop transfer instructions with respect to
the Shares have been placed with the Company's transfer agent.

14.  Stand-off Agreement.  Optionee agrees that, in connection with any
registration of the Company's securities under the Securities Act pursuant to a
public offering, and upon the request of the Company or any underwriter managing
an underwritten offering of the Company's securities, Optionee shall not sell,
short any sale of, loan, grant an option for, or otherwise dispose of any of the
Shares (other than Shares included in the offering) without the prior written
consent of the Company or such managing underwriter, as applicable, for a period
of at least one year following the effective date of registration of such
offering.

15.  Notices.  Any notice required to be given pursuant to this Option or the
Plan shall be in writing and shall be deemed to be delivered upon receipt or, in
the case of notices by the Company, five (5) days after deposit in the U.S.
mail, postage prepaid, addressed to Optionee at the address last provided by
Optionee for his or her employee records.

16.  Agreement Subject to Plan; Applicable Law.  This Option is made pursuant to
the Plan and shall be interpreted to comply therewith. A copy of such Plan is
available to Optionee, at no charge, at the principal office of the Company. Any
provision of this Option inconsistent with the Plan shall be considered void and
replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Delaware, and the interpretation
and enforcement shall be governed by the laws thereof and subject to the
exclusive jurisdiction of the courts therein.

In Witness Whereof, the parties hereto have executed this Option as of the date
first above written.
 
 
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COMPANY:
KESSELRING HOLDING CORPORATION,
a Delaware corporation
         
 
By:
/s/ Cliff Wildes       Name: Cliff Wildes       Title: Chairman          

 
OPTIONEE:
       
By:
/s/ Douglas Badertscher      
(signature)
     
Name: Douglas Badertscher
         

 
 
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Appendix A

NOTICE OF EXERCISE

KESSELRING HOLDING CORPORATION
_________________
_________________
_________________

Re: Nonstatutory Stock Option

1)           Notice is hereby given pursuant to Section 6 of my Nonstatutory
Stock Option Agreement that I elect to purchase the number of shares set forth
below at the exercise price set forth in my option agreement:

Nonstatutory Stock Option Agreement dated: ____________

Number of shares being purchased: ____________

Exercise Price: $____________

A check in the amount of the aggregate price of the shares being purchased is
attached.

OR

2)           I elect a cashless exercise pursuant to Section 6 of my
Nonstatutory Stock Option Agreement.  The Average Market Price as of _______ was
$_____.

I hereby confirm that such shares are being acquired by me for my own account
for investment purposes, and not with a view to, or for resale in connection
with, any distribution thereof. I will not sell or dispose of my Shares in
violation of the Securities Act of 1933, as amended, or any applicable federal
or state securities laws. Further, I understand that the exemption from taxable
income at the time of exercise is dependent upon my holding such stock for a
period of at least one year from the date of exercise and two years from the
date of grant of the Option.

I understand that the certificate representing the Option Shares will bear a
restrictive legend within the contemplation of the Securities Act and as
required by such other state or federal law or regulation applicable to the
issuance or delivery of the Option Shares.

I agree to provide to the Company such additional documents or information as
may be required pursuant to the Company's 2007 Incentive Stock Plan.
 

               
By:
/s/       
(signature)
      Name:           

 
 
 
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