Exhibit 10.25
 
FORM OF STOCK OPTION AGREEMENT

THIS AGREEMENT is made and entered into as of the date last below written by and
between CleanTech Biofuels, Inc., a Delaware corporation (the “Company”), and
___________ (the “Optionee”).
 
WHEREAS, the Company adopted the Company’s 2007 Stock Option Plan (the “Plan”)
under which the Company is authorized to grant stock options to certain
employees, directors and consultants of the Company; and
 
WHEREAS, the Board of Directors has determined that the Company should, in
recognition of Optionee’s contributions, grant an option to the Optionee
pursuant to the terms of the Board of Directors written consent, this Agreement
and the Plan; and
 
WHEREAS, the Optionee desires to accept the option.
 
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
for other valuable consideration hereinafter set forth, the parties agree as
follows:
 
1. Grant of Option. The Company hereby grants a Qualified Stock Option in the
amount and subject to the terms provided in this Agreement (the “Option”)
effective as of ______________, _____ (the “Grant Date”). If the Option is a
Nonqualified Stock Option, the Option is not intended to be and shall not be
treated as a qualified incentive stock option as defined under Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”). If the Option is a
Qualified Stock Option, the Option is intended to be and shall be treated as a
qualified incentive stock option as defined under Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”). The foregoing notwithstanding, to
the extent the aggregate fair market value of stock with respect to which
Qualified Stock Options are exercisable for the first time by Optionee in any
given calendar year exceeds $100,000, such Qualified Stock Options shall be
treated as Nonqualified Stock Options under the Plan. In such event, Section 8
of this Agreement shall not apply to shares acquired by Optionee as a result of
the exercise of such Nonqualified Stock Options.

2. Shares. The shares of stock subject to the Option shall be the Company’s
authorized but unissued or reacquired Common Stock, $0.001 par value (the
“Common Stock”).

3. Number of Shares. The number of shares of Common Stock which the Optionee may
purchase under the Option is ____________.

 
 
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4. Term and Exercise of Option. The Option shall be first exercisable with
respect to one third (1/3) of the shares subject to the Option commencing on the
first anniversary of the Grant Date, with respect to another one third (1/3) of
the shares subject to the Option commencing on the second anniversary of the
Grant Date and with respect to the final one third (1/3) of the shares subject
to the Option commencing on third anniversary of the Grant Date, if Optionee is
an employee of the Company as of each of such dates; provided, however, if
Optionee’s employment is terminated for any reason other than for Cause or
without Good Reason, as such terms are defined in Optionee’s Employment
Agreement, then one hundred percent (100%) of the shares subject to the Option
shall immediately vest to the extent not already vested at such time. The
exercise period for the Option shall end upon the earliest of the following:
 
 
a.
Immediately upon the termination of Optionee’s employment for Cause or without
Good Reason; or

 
b.
The date seven (7) years after the Grant Date.

To the extent the Option for any of the shares is not exercised within the
foregoing periods, the Option shall expire and thereafter shall be null and
void.

Notwithstanding anything herein to the contrary, if Optionee is employed by the
Company upon the effective date of any merger, consolidation, sale of all (or
substantially all) of the assets of the Company, or other business combination
involving the sale or transfer of all (or substantially all) of the capital
stock or assets of the Company in which the Company is not the surviving entity,
or if it is the surviving entity, either (i) it does not survive as an operating
ongoing concern in substantially the same line of business, or (ii) it is
controlled by persons or entities previously unaffiliated with the Company, the
Option shall become exercisable immediately prior to the consummation of any of
the foregoing events with respect to one hundred percent (100%) of the shares
subject to the Option.

5. Manner of Exercise, Purchase Price, and Payment. Exercise of the Option shall
be made by delivery to the Company by Optionee (or other person entitled to
exercise the Option as provided hereunder) of (i) an executed “Notice of
Exercise of Stock Option and Record of Stock Transfer”, in the form attached
hereto as Exhibit A and incorporated herein by reference, and (ii) payment of
the aggregate purchase price for shares purchased pursuant to the exercise. The
price per share of the Common Stock which the Optionee may purchase hereunder is
$_______. Upon the exercise of the Option, the purchase price shall be payable
in full in United States dollars in cash, by certified check or as otherwise
stated in accordance with the Plan.

6. Restriction on Transfer. This Option is not transferable by the Optionee
other than by will or the laws of descent and distribution, and is exercisable,
during the Optionee’s lifetime, only by the Optionee. Upon the death of the
Optionee, the executors or administrators of the Optionee’s estate, or any
person or persons who shall have acquired the right to exercise the Option by
bequest, inheritance, or otherwise by reason of the death of the Optionee shall
have the right to exercise the Option, provided that such exercise occurs not
more than seven (7) years from the Grant Date and also within one (1) year of
the Optionee’s death.

 
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7. Restrictions on Exercise. The Option shall be exercisable subject to the
following restrictions:
 
 
a.
If the Optionee terminates employment with the Company due to retirement or
disability, the Optionee must be an employee of the Company at all times during
the period beginning on the Grant Date and ending thirty-six (36) months before
the earlier of the date of exercise of the Option or the date of the Optionee’s
death. If the Option is a Qualified Stock Option, the foregoing notwithstanding,
the Optionee recognizes and acknowledges by the Optionee’s signature below that
it is anticipated that the favorable tax consequences afforded by Section 422 of
the Code will only be available to the Optionee if the Optionee exercises the
Option within three (3) months of termination of employment with the Company or,
in the event of the Optionee’s termination of employment due to disability,
within one (1) year of such termination; and

 
 
b.
So long as the Optionee remains an employee of the Company, the Option may be
exercised in whole or in part; provided, however, that the Optionee shall not
exercise part of the Option for fewer than twenty-five (25) shares at one time
unless the total number of shares subject to the Option is fewer than
twenty-five (25), in which case the Optionee shall not exercise the Option for
fewer than all of such shares.

 
8. Restriction on Disposition of Common Stock. It is recognized that, under
current tax laws, if the Option is a Qualified Stock Option and the Optionee
disposes of Common Stock acquired pursuant to the Optionee’s exercise of the
Option within two (2) years after the Grant Date or within one (1) year after
the transfer of such Common Stock to the Optionee, then the Optionee must
recognize ordinary income, as opposed to capital gain, on such disposition.
Further, the Optionee hereby consents to enter into and execute such agreements
restricting the sale, assignment, transfer, or other disposition of the Common
Stock by Optionee as may be required by the Compensation Committee (“Committee”)
and/or Board of Directors of the Company upon any exercise of the Option granted
hereunder.

9. Other Restrictions. The Option shall be subject to all of the terms,
conditions, and restrictions of the Plan, the terms of which are incorporated
herein by reference. The Option shall in all respects be interpreted in
accordance with the Plan. To the extent the terms of the Plan and this Agreement
or any other document pertaining to the Option are inconsistent, the Plan shall
prevail. The Committee and/or Board of Directors shall interpret and construe
the Plan and this Agreement and its interpretations and determinations shall be
conclusive and binding on the parties hereto and any other person claiming an
interest hereunder, with respect to any issue pertaining to the Option or the
Plan.

10. Obligation of the Optionee. The Optionee shall at no time be obligated to
exercise the Option.
 
 
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11. Rights as a Shareholder. The Optionee and any transferee of the Option shall
have no rights as a shareholder of the Company with respect to any shares of
Common Stock which are the subject of the Option until the date of transfer on
the records of the Company of the shares of stock.

12. Adjustment of and Changes in Stock of the Company. In the event of a
reorganization, recapitalization, change of shares, stock split, spin-off, stock
dividend, reclassification, subdivision or combination of shares of stock of the
Company, or the merger, consolidation, rights offering, or any other change in
the corporate structure or shares of the Company, the Committee and/or Board of
Directors shall make such adjustment as it deems appropriate in the number and
kind of shares of Common Stock subject to the Option or in the option price;
provided, however, that no such adjustment shall give the Optionee any
additional benefits under the Option.

13. Employment Rights Not Affected. Neither the granting of the Option nor its
exercise shall be construed as granting to the Optionee any right with respect
to continuance of employment with the Company. Except as may otherwise be
limited by a written agreement between the Company and the Optionee, the right
of the Company to terminate at will the Optionee’s employment with the Company
at any time and for any reason whatsoever is specifically reserved by the
Company, and acknowledged by the Optionee.

14. Amendment of Option. The Option may be amended by the Board of Directors of
the Company or by the Committee at any time (i) if the Board or the Committee
determines, in its sole discretion, that amendment is necessary or advisable in
light of any addition to or change in the Code or in the regulations issued
thereunder, or any federal or state securities law or other law or regulation,
which change occurs after the Grant Date and by its terms applies to the Option;
or (ii) other than in the circumstances described in clause (i) or provided in
the Plan, with the consent of the Optionee. The foregoing notwithstanding, the
Committee and/or Board of Directors may, in its sole discretion, cancel the
Option at any time prior to the Optionee’s exercise of the Option if, in the
opinion of the Committee and/or Board of Directors, the Optionee engages in
activities contrary to the interests of the Company.

15. Notice. Any notice to the Company provided for in this Agreement shall be
addressed to it in care of its Secretary at its executive offices at 7386
Pershing Ave., St. Louis, Missouri 63130, and any notice to the Optionee shall
be addressed to the Optionee at the current address shown on the payroll records
of the Company, or to such other address and to the attention of such other
person(s) or officer(s) as either party may designate by written notice. Any
notice shall be deemed to be duly given if and when properly addressed and
deposited, postage paid, in the United States mail or when hand delivered to the
party to whom it is addressed.

16. Governing Law. This Agreement shall be construed in accordance with and
shall be subject to the internal laws of the State of Missouri, except to the
extent preempted by federal law.
 
17. Acknowledgment of Receipt of Plan. By Optionee’s signature below, Optionee
hereby acknowledges receipt of a copy of the Plan.
 
 
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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute this Agreement and the Optionee has placed his signature hereon as of
the ____ day of ___________________, _____, and effective as of the Grant Date.
 
 

COMPANY: CLEANTECH BIOFUELS, INC.            
By:
      Name:      Title:                   OPTIONEE:    

 
 
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EXHIBIT A
 
Notice of Exercise of Option
and Record of Stock Transfer

I hereby exercise my Option granted by Cleantech Biofuels, Inc. subject to all
the terms and provisions set forth in the Stock Option Agreement dated
_______________, _____, pertaining thereto and of the Company’s 2007 Stock
Option Plan (the “Plan”) referred to therein, and notify you of my desire to
purchase ____________ shares of the Company’s Common Stock, $0.001 par value,
(the “Common Stock”) which were offered to me pursuant to said Stock Option
Agreement. Enclosed is my payment in the sum of $_____________ in full payment
for such shares.

I hereby represent that I have previously received a Stock Option Agreement and
a copy of the Plan from the Company and that I understand the terms and
restrictions described therein. I further represent that the ____________ shares
of Common Stock to be delivered to me pursuant to the above-mentioned exercise
of the Option granted to me on ________________ are being acquired by me as an
investment and not with a view to, or for sale in connection with, the
distribution of any of such shares.

 

 Dated: _________________, ______  
 ___________________________________________________________         Optionee  
   

 
Receipt

Receipt is hereby acknowledged of the delivery to me by ______________, on the
___ day of , of stock certificates for ____________ shares of Common Stock
purchased by me pursuant to the terms and conditions of the Plan referred to
above, which shares were transferred to me on the Company’s stock record books
on the day of ,                                           .

    ___________________________________________________________         Optionee
     

 
 
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