Exhibit 10.3

 

BioLargo, Inc.

2020 Engagement Extension Agreement

 

This Engagement Extension Agreement (the “Extension”) references the Engagement
Agreement and Scope Letter dated February 1, 2008 (“2008 Agreement”) by and
between CFO 911 (Charles K. Dargan II) (the “Advisor)” and BioLargo, Inc. (the
“Company”), and written extensions to the Agreement (the “Prior Extensions”),
pursuant to which Charles K. Dargan II has been serving as the Company’s Chief
Financial Officer. The parties desire to extend the terms of the prior
agreements for a period of one year, pursuant to the terms of this Extension.
The 2008 Agreement, the Prior Extensions and this Extension are collectively
referred to herein as the “Agreement”.

 

Except as expressly amended or modified herein, all terms and conditions set
forth in the 2008 Agreement and Prior Extensions are incorporated herein by this
reference and continue to be in full force and effect. The parties acknowledge
and confirm that Mr. Dargan has been serving as the Company’s Chief Financial
Officer since February 1, 2008, and that he continues to do so through today’s
date. Retroactively effective as of October 1, 2019, the Advisor and the Company
hereby agree to extend the Term of the engagement as set forth in the 2008
Agreement to expire January 31, 2021 (the “Extended Term”). Notwithstanding the
foregoing, either party may terminate this Agreement upon 30 days’ written
notice. At the end of the Extended Term, unless this Agreement has been
terminated, Advisor shall continue to serve as the Company’s Chief Financial
Officer until new terms are agreed upon, or until one of the parties gives
notice to terminate the relationship.

 

During the Extended Term, the Advisor shall receive the compensation as set
forth in this Extension. The Company shall issue to Charles K. Dargan II an
option (the “Option”) to purchase 25,000 shares of the Company’s common stock
for each month during the Extended Term (thus, an option to purchase 400,000
shares). The Option shall vest over the period of the Extended Term, with 75,000
shares having vested as of December 31, 2019, and the remaining shares to vest
25,000 shares monthly beginning January 31, 2020, and each month thereafter, so
long as this Agreement is in full force and effect. The Option shall be
exercisable at the closing price of the Company’s common stock as of the date
hereof, and shall expire ten years from the grant date. The Option shall be
issued pursuant to the Company’s 2018 Equity Incentive Plan.

 

The Company also acknowledges that Advisor has never received a penny of cash
compensation from the Company, but has been paid solely through the issuance of
ten-year options pursuant to the 2008 Agreement, and that those options have
begun to expire, unexercised, as the exercise prices are higher than current
stock prices. The Company has recently adopted a plan to replace options issued
to those still providing services to the Company that have expired under those
circumstances. The Company acknowledges the following options to purchase an
aggregate 110,000 shares issued to Advisor that have now expired unexercised:

 

Issue Date

Expiration

Date

Shares

Exercise Price

9/30/2009

9/30/2019

10,000

$ 0.40

11/2/2009

11/2/2019

10,000

$ 0.45

11/30/2009

11/30/2019

10,000

$ 0.57

12/31/2009

12/31/2019

10,000

$ 0.70

1/31/2010

1/31/2020

10,000

$ 0.50

2/1/2010

2/1/2020

60,000

$ 0.575

 

 

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The Company agrees to issue an option to Advisor for 27,500 shares, for the
purpose of replacing the options issued and expired in the above table. The
Option shall be exercisable at the closing price of the Company’s common stock
as of the date hereof, and shall expire ten years from the grant date. The
Option shall be issued pursuant to the Company’s 2018 Equity Incentive Plan, and
is fully vested upon grant.

 

AGREED TO AND ACCEPTED AS OF THE DATE LAST SIGNED BELOW

 

CFO 911   BioLargo, Inc.   18851 NE 29TH Avenue, Suite 700   14921 Chestnut
Street   Aventura, FL 33180   Westminster, CA 92683                 /S/CHARLES
K. DARGAN II     /S/DENNIS P. CALVERT   By:     By:     Name: Mr. Charles K.
Dargan II   Name: Mr. Dennis P. Calvert   Title: Chief Executive Officer   
Title: President/CEO   Dated signed: February 25, 2020   Dated signed: February
25, 2020