Document:

Filed by Bowne Pure Compliance

 

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by and between RBC Life Sciences, Inc.
(“Employer”) located at 2301 Crown Court, Irving, Texas 75038 and Steven E. Brown (“Employee”),
residing at 2128 Tomahawk Drive, Plano, Texas 75023 as an amendment and restatement of the
employment agreement dated as of January 1, 2007 existing between the parties hereto.

The parties to this Agreement declare that:

Employer is engaged in, among other businesses, the international distribution of nutritional
supplements and personal care products through the network marketing distribution model, and the
distribution of wound care and oncology care products.

Employee is employed by Employer under an existing employment agreement, and Employer is willing to
continue to employ Employee, on the terms, covenants, and conditions set forth in this Agreement as
an amendment and restatement of the existing employment agreement to among other things, extend the
term of the existing agreement and add provisions intended to comply with the provisions of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”).

In consideration of the mutual promises set forth in this Agreement, Employer and Employee agree as
follows:

Section 1. Effective Date and Purpose. The effective date of this Agreement
shall be January 1, 2008 (the “Effective Date”). This Agreement sets forth the terms and
conditions of Employee’s employment with Employer and amends and restates the existing employment
agreement between Employee and Employer regarding Employee’s employment with Employer.

Section 2. Employment Title and Duties. Employer shall employ Employee in the
capacity of Vice President and Chief Financial Officer. In this capacity, Employee shall have the
responsibility to perform all duties that are customarily performed by one holding that position in
other, same, or similar businesses or enterprises as that engaged in by Employer. A diagram of
Employee’s functional responsibility is attached as Exhibit A. Employer reserves the right to
modify Exhibit A as necessary or appropriate throughout the life of this Agreement. Employee
accepts this employment, subject to the general supervision and pursuant to the orders and
direction of Employer. Employee shall also render such other and services and duties, consistent
with such capacity, as may be assigned from time to time by Employer.

Section 3. Compensation of Employee. Employer shall pay Employee, in full
payment for Employee’s services and covenants under this Agreement, the following compensation:

	 	a.	 	Monthly Base Salary. During his employment, Employee’s monthly base
salary shall be $18,367.00 payable bi-weekly in equal payments.

	 	b.	 	Incentive Bonus. During his employment, Employee shall have a
reasonable opportunity to earn a cash incentive bonus as described in Exhibit B. The
maximum cash incentive bonus that may be earned by Employee for any calendar year
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Employment Agreement — Steven E. Brown

	 	c.	 	Health and Welfare Benefits. During his employment, Employee shall be
eligible to participate in the health and welfare benefit plans and programs offered
from time to time by Employer for its similarly situated employees, upon the terms and
subject to conditions of such plans and programs.

Section 4. Best Efforts of Employee. Employee agrees to perform all of the
duties pursuant to the express and implicit terms of this Agreement to the reasonable satisfaction
of Employer. Employee further agrees to perform such duties faithfully and to the best of his
ability, talent, and experience.

Section 5. Place of Employment. Employee shall render such duties at 2301 Crown
Court, Irving, Texas 75038 and at such other places as Employer shall in good faith require or as
the interest, needs, business, or opportunity of Employer shall require.

Section 6. Non-Competition with Employer during Employment. Employee shall
devote all his time, attention, knowledge, and skills solely to the business and interest of
Employer, and Employer shall be entitled to all of the benefits and profits arising from the work
of Employee. Employee shall not, during his employment under this Agreement, perform services for
or be interested directly or indirectly, in any manner, as partner, officer, director, shareholder,
advisor, consultant, employee, or in any other capacity in any other business similar to Employer’s
business, any allied trade, or any business offering a competing or alternative product or service.
However, nothing contained in this section shall prevent or limit Employee from continuing to
receive the benefits of relationships previously described to Employer or investing in the capital
stock or other securities of any corporation whose stock or securities are publicly owned and
traded on any public exchange, nor shall anything contained in this Section 6 prevent or limit
Employee from investing in real estate.

Section 7. Restrictions on the Use of Trade Secrets and Records. During the
term of employment under this Agreement, Employee may have access to various trade secrets and
intellectual property consisting of formulas, patterns, devices, inventions, processes, and
compilations of information, records and specifications, all of which are owned by Employer and
regularly used in the operation of Employer’s business. All files, records, customer lists,
documents, drawings, specifications, equipment, and similar records and items relating to the
business of Employer, whether they are prepared by Employee or come into Employee’s possession in
any other way and whether or not they contain or constitute trade secrets owned by Employer, are
and shall remain the exclusive property of Employer and shall not be removed from the premises of
Employer under any circumstances whatsoever without the prior written consent of Employer.
Employee agrees not to divulge, misappropriate, use, or disclose any of these trade secrets and
records directly or indirectly, to any person, firm, corporation, or other entity in any manner
whatsoever, either during the term of employment under this Agreement or at any time thereafter,
except as required in the course of employment. This Section 7 shall survive Employee’s
termination of employment.

Section 8. Term. This Agreement shall be effective for period of two (2) years
beginning on January 1, 2008 and ending on December 31, 2009. This Agreement shall be
automatically renewed for an additional one-year period upon expiration of its initial term and
each anniversary thereafter, unless either Employer or Employee gives written notice to the other
party at least thirty (30) days prior to the last day of the then current term of the Agreement.

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Employment Agreement — Steven E. Brown

Section 9. Termination of Employment. 

	 	a.	 	Non-renewal of Agreement by Employer. If Employer elects not to renew
employment under this Agreement pursuant to the terms of Section 8, Employee, unless
otherwise requested by Employer, shall continue to render services, and shall be paid
compensation as provided in this Agreement, through the last day of the current term
of the Agreement. In addition, if Employee executes a general release in the form and
at the time requested by Employer (the “Release”), Employee shall continue to be paid
his monthly base salary for a period of six (6) months as severance pay following the
date of termination payable in accordance with Employer’s normal payroll practices and
commencing on the first payroll date of Employer following the expiration of the
applicable statutory periods for considering and revoking the Release, determined
without regard to when Employee executes the Release (the “Release Date”) and
previously accrued, unused personal time off, as determined and limited under the
Employer’s personal time off policy (“PTO”) paid in a single lump sum payment on the
first payroll date of Employer following the Release Date. The amounts paid shall be
reduced by all amounts withheld and deducted pursuant to Section 17. No benefits,
bonuses, PTO, or other forms of compensation, except for the severance payments, will
be paid to Employee or accrued for this six-month severance payment period. If
Employer offers to continue Employee’s employment on a non-contractual basis following
the Employer’s non-renewal of this Agreement and Employee elects to continue his
employment on that basis, Employee will not be entitled to the severance pay referred
to in this Section 9.a.

	 	b.	 	Non-renewal of Agreement by Employee. If Employee elects to resign
prior to the expiration of the then current term of this Agreement pursuant to the
terms of Section 8, Employee shall continue to render services, unless otherwise
requested by Employer, through the last day of the current term of the Agreement. If
he complies with this requirement, he shall be paid his monthly base salary as
provided in this Agreement up to the last day of employment plus any accrued, unused
PTO and any annual incentive bonus or additional compensation that may have otherwise
accrued during the current term of this Agreement.

	 	c.	 	Termination by Employer for Cause. Employer may immediately terminate
the employment of Employee under this Agreement for “Cause” (as defined below) at any
time by giving written notice of termination to Employee without prejudice to any
other remedy to which Employer may be entitled either at law, in equity, or under this
Agreement. In this case, Employee will be paid his monthly base salary up to the date
of his termination of employment and shall not be entitled to any other compensation
or benefits under this Agreement.

For purposes of this Agreement, “Cause” shall mean, in each case, as reasonably
determined by the Board: (i) conviction of, or entry of a pleading of guilty or no
contest by, Employee with respect to a felony or any lesser crime of which fraud or
dishonesty is a material element, (ii) Employee’s willful and continued failure to
perform his duties with Employer, or a failure to follow the lawful direction of
the Board after the Board delivers a written demand for performance and Employee
neglects to cure such a failure to the reasonable satisfaction of the Board within
15 days after receipt of the demand, (iii) Employee’s failure to comply with
applicable laws with respect to the execution of Employer’s
business operations or his material breach of Sections 6 or 7 of this Agreement,
(iv) Employee’s theft, fraud, embezzlement, dishonesty, or similar conduct which
has resulted or is reasonably likely to result in material damage to Employer or
any of its affiliates or subsidiaries, or (v) Employee’s habitual intoxication or
continued abuse of illegal drugs which interferes with Employee’s ability to
perform his assigned duties and responsibilities.

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Employment Agreement — Steven E. Brown

	 	d.	 	Termination by Employee for Good Reason. Employee may terminate his
employment under this Agreement for “Good Reason” (as defined below) at any time by
giving written notice of termination to Employer without prejudice to any other remedy
to which Employee may be entitled either at law, in equity, or under this Agreement.
In this case, if Employee executes a Release, Employee shall be paid his monthly base
salary for a period of six (6) months as severance pay following the date of
termination payable in accordance with Employer’s normal payroll practices and
commencing on the first payroll date of Employer following the Release Date, plus an
amount equal to his accrued, unused PTO paid in a single lump sum payment on the first
payroll date of Employer following the Release Date. In addition, if at the end of
the year in which employee terminates employment, the employee would have received a
bonus as described in Exhibit B, employee will be paid a prorata share of the bonus
for the full months of actual employment in that year payable at the time the bonuses
for that year are paid to eligible employees. The amounts paid shall be reduced by all
amounts withheld and deducted pursuant to Section 17. No benefits, bonuses, PTO, or
other forms of compensation, except for the severance payments, will be paid to
Employee or accrued for this six-month severance payment period.

For purposes of this Agreement, the term “Good Reason” shall mean: (i) a material
breach by Employer of this Agreement which breach is not cured within 30 days after
the Board’s receipt of written notice of such non-compliance from Employee; or (ii)
the assignment to Employee by Employer of duties materially and adversely
inconsistent with Employee’s position, duties, or responsibilities as in effect
immediately after the Effective Date of this Agreement, including, but not limited
to, any material reduction in such position, duties or responsibilities, or a
change in Employee’s title or office, as then in effect, or any removal of Employee
from any of such positions, titles, or offices.

	 	e.	 	Termination Following a Change of Control. If during the one-year
period following the effective date of a “Change of Control” (as defined below),
Employer terminates Employee’s employment under this Agreement for any reason other
than Cause or Employee terminates his employment under this Agreement for Good Reason
and, in either case, Employee executes a Release, Employee shall continue to be paid
his monthly base salary for a period equal to the greater of (i) the remaining portion
of the initial term of this Agreement or (ii) twelve (12) months as severance pay
following the date of termination payable in accordance with Employer’s normal payroll
practices and commencing on the first payroll date of Employer following the Release
Date and accrued, unused PTO paid in a single lump sum payment on the first payroll
date of Employer following the Release Date. The amounts paid shall be reduced by all
amounts withheld and deducted pursuant to Section 17. No benefits, bonuses, PTO, or
other forms of compensation, except for the severance payments, will be paid to
Employee or accrued during this twelve-month severance period.

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Employment Agreement — Steven E. Brown

For purposes of this Agreement, the term “Change of 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
Employer’s current Chief Executive Officer, Clinton H. Howard, becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Employer representing fifty percent (50%) or more of
the combined voting power of Employer’s then outstanding securities;

(ii) as a result of, or in connection with, any tender offer or exchange offer,
merger, or other business combination (a “Transaction”), the persons who were
directors of Employer immediately before the Transaction (except for any person
whose initial election as a director occurs as the result of an actual or
threatened election contest, within the meaning of Rule 14a-11 under the Exchange
Act, or other actual or threatened solicitation of proxies or contests by or on
behalf of a person other than the Board) shall cease to constitute a majority of
the Board of Directors (the “Board”) of Employer or any successor to Employer;

(iii) Employer is reorganized, merged or consolidated with another corporation and
as a result of the reorganization, merger or consolidation less than fifty percent
(50%) of the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by the former stockholders of
Employer; or

(iv) Employer sells or disposes of all or substantially all of its assets to any
person, other corporation, or other legal entity not controlled by Employer, or the
shareholders approve a plan of complete liquidation or an agreement for the sale or
disposition of Employer in a majority.

	 	f.	 	Death of Employee. This Agreement shall be deemed terminated as of
the date of Employee’s death. In this case, Employer shall pay to employee’s estate
Employee’s monthly base salary as provided in this Agreement up to the date of
termination, plus Employee’s accrued, unused PTO.

	 	g.	 	Disability of Employee. Should Employee be unable to perform his
duties under this Agreement by reason of inability to perform the essential functions
of the position for a period of six (6) months, as determined by the Board in its sole
discretion, Employer shall have the right to terminate this Agreement upon written
notice to Employee. During the period that Employee fails to perform his duties as a
result of his inability to perform the essential functions of the position, Employer
will continue to pay Employee Employee’s monthly base salary based on its normal
payroll practices, reduced by any disability payments received by Employee from a
disability program made available by Employer, for a period of six (6) months after
the date on which Employee was determined to be unable to perform the essential
functions of the position. On the date of Employee’s termination of employment,
Employee shall be paid his accrued, unused PTO. The amounts paid shall be reduced by
all amounts withheld and deducted pursuant to Section 17.

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Employment Agreement — Steven E. Brown

	 	h.	 	Early Termination by Employer. Should Employer terminate the
employment of Employee prior to the end of the initial term or any renewal term in
effect,
other than by reason of Cause, death or disability, or during the twelve-month
period following a Change of Control, and Employee executes a Release, Employee
shall be paid the greater of (i) his monthly base salary through the last day of
the initial term or renewal term then in effect, plus an amount equal to his
accrued, unused PTO or (ii) his monthly base salary for a period of six (6) months,
increased by two weeks for each “Year of Service” (as defined below) performed by
Employee prior to his termination date, as severance pay following the date of
termination payable, in each case, in accordance with Employer’s normal payroll
practices and commencing on the first payroll date of Employer following the
Release Date, plus an amount equal to his accrued, unused PTO paid in a single sum
payment on the first payroll date of Employer following the Release Date. In
addition, if at the end of the year in which employment is terminated, the employee
would have received a bonus as described in Exhibit B, employee will be paid a
prorata share for the full months of actual employment in that year payable at the
time the bonuses for that year are paid to eligible employees. The amounts paid
shall be reduced by all amounts withheld and deducted pursuant to Section 17. No
benefits, bonuses, PTO, or other forms of compensation, except for the severance
payments, will be paid to Employee or accrued for any time beyond the last day of
the initial term or renewal term of this Agreement.

For purposes of this Agreement, the term “Year of Service” shall mean each full
year Employee is employed by Employer prior to his last day of actual employment
under this Agreement. In determining an Employee’s Years of Service, all fractions
of a year worked shall be aggregated to determine whether an additional Year of
Service will be credited.

	 	i.	 	Early Termination by Employee. Should Employee terminate his
employment prior to the end of the initial term or any renewal term in effect, other
than for Good Reason, death or disability, Employee shall be paid his monthly base
salary and unused, accrued PTO up to the last day of employment, and shall not be
entitled to any other compensation or benefits under this Agreement, including any
incentive bonus.

	 	j.	 	Section 409A Separation from Service. Notwithstanding any provision
to the contrary in this Agreement, no payment or benefit shall be paid pursuant to
this Section 9 that would be considered “deferred compensation” under Section 409A of
the Code (“Section 409A”) until Employee has incurred a “separation from service” (as
such term is defined under Section 409A).

Section 10. Deferred Payments for Certain Key Employees. Notwithstanding any
other provisions contained in this Agreement to the contrary, no payments that are considered to be
“deferred compensation” under Section 409A may be made to Employee as a result of Employee’s
separation from the service of Employer until the date that is six months after the date of the
separation from service (or, if earlier, the death of Employee) if Employee is a “specified
employee” as described in Section 409A(a)(2)(B)(i) of the Code at the time the payment otherwise
would have been made. The provisions of this Section 10 shall only apply to the minimum extent
required to avoid Employee’s incurrence of taxes imposed under Section 409A.

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Employment Agreement — Steven E. Brown

Section 11. Indemnity. Employer shall indemnify Employee and hold Employee
harmless for any acts or decisions made by Employee in good faith and that were reasonably believed
to be in the best interest of Employer while performing services for Employer. Employer will use
its reasonable best efforts, to maintain Director and Officer insurance coverage in the amount of
$1,000,000 for Employee under an insurance policy covering the officers and directors of Employer
against lawsuits. Employer shall pay all reasonable expenses, including attorney’s fees, actually
and necessarily incurred by Employee in connection with any appeal thereon, including the cost of
court settlements. Notwithstanding the preceding sentence, (i) the obligations of Employer shall
be subject to the condition that the Board shall not have determined based on advice from its legal
counsel that Employee would not be permitted to be indemnified under applicable law, and (ii) the
obligation of Employer to make an expense or fee advance pursuant to this Section 10 shall be
subject to the condition that, if, when and to the extent that the Board determines that Employee
would not be permitted to be so indemnified under applicable law, Employer shall be entitled to be
reimbursed by Employee (who hereby agrees to reimburse Employer) for all such amounts theretofore
paid (it being understood and agreed that the foregoing agreement by Employee shall be deemed to
satisfy any requirement that Employee provide Employer with an undertaking to repay any advancement
of fees or expenses if it is ultimately determined that Employee is not entitled to indemnification
under applicable law); provided, however, that if Employee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination that Employee
should be indemnified under applicable law, any determination made by the Board that Employee would
not be permitted to be indemnified under applicable law shall not be binding and Employee shall not
be required to reimburse Employer for any expense advance until a final judicial determination is
made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have
lapsed). This undertaking by Employee to repay such expense advance shall be unsecured and
interest-free.

Section 12. Effect of Partial Invalidity. The invalidity of any portion of this
Agreement shall not affect the validity of any other provision. In the event that any provision of
this Agreement is held to be invalid, the parties agree that the remaining provisions shall remain
in full force and effect.

Section 13. Entire Agreement. This Agreement contains the complete Agreement
between the parties and shall supersede all other agreements, either oral or written, between the
parties. The parties stipulate that neither of them has made any representations except as are
specifically set forth in this Agreement and each of the parties acknowledges that they have relied
on their own judgment in entering into this Agreement.

Section 14. Successors and Assigns; Survival of Rights and Obligations.

	 	a.	 	Binding Agreement; Employee’s Personal Agreement. This Agreement
shall be binding upon and inure to the benefit of Employee’s and his heirs and legal
representatives and Employer and its successors and assigns. Employee’s rights and
obligations under this Agreement are personal and may not be assigned or transferred
in whole or in part by Employee (except that his rights may be transferred upon his
death by will, trust, or the laws of intestacy).

	 	b.	 	Employer’s Successor. Employer will require any successor to all or
substantially all of the business and assets of Employer (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place; except that no such assumption and agreement will be required if the
successor is bound by operation of law to perform this Agreement. In this
Agreement, “Employer” shall include any successor to Employer’s business and assets
that assumes and agrees to perform this Agreement (either by agreement or by
operation of law).

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Employment Agreement — Steven E. Brown

	 	c.	 	Survival. The respective rights and obligations of Employer and
Employee under this Agreement (including Sections 7, 9, 10, 11 and 16) shall survive
the expiration or termination of the Agreement to the extent necessary to give full
effect to those rights and obligations.

Section 15. Notices. All notices, requests, demands, and other communications
shall be in writing and shall be given by registered or certified mail, postage prepaid, to the
addresses shown on the first page of this Agreement, or to such subsequent addresses as the parties
shall so designate in writing.

Section 16. Dispute Resolution. 

	 	a.	 	Arbitration. The exclusive remedy or method of resolving all disputes
or questions arising out of or relating to this Agreement (including its expiration or
termination) or the expiration or termination of Employee’s employment hereunder
(“Disputes”) shall be arbitration held in Dallas, Texas. Nevertheless, although
disputes or questions arising out of or relating to Sections 6 and 7 shall be subject
to arbitration, Employer shall not be precluded from also seeking and obtaining
injunctive relief from any court of proper jurisdiction to enforce or protect its
rights under Sections 6 and 7. Any arbitration may be requested or initiated by a
party to the Dispute by written notice to the other party or parties to the Dispute
specifying the subject of the requested arbitration and appointing the notifying
Party’s arbitrator (“Arbitration Notice”).

	 	b.	 	Arbitrators. Arbitration shall be before three arbitrators, one to be
appointed by Employer, a second to be appointed by Employee, and a third to be
appointed by the two arbitrators chosen by Employer and Employee. The third
arbitrator shall act as chairman. If (i) the non-initiating party to the Dispute
fails to appoint an arbitrator by written notice to the initiating party to the
Dispute within ten days after the Arbitration Notice is given, or (ii) the two
arbitrators appointed by the parties to the Dispute fail to appoint a third arbitrator
within ten days after the date of the appointment of the second arbitrator, then the
American Arbitration Association in Dallas, Texas, upon application of a party to the
Dispute, shall appoint an arbitrator to fill that position.

	 	c.	 	Award and Costs. The arbitration proceeding shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. A determination or award made or approved by at least two of the
arbitrators shall be the valid and binding action of the arbitrators. The costs of
arbitration (exclusive of the expense of a party to the Dispute in obtaining and
presenting evidence and attending the arbitration and of the fees and expenses of
legal counsel to a party to the dispute, all of which shall be borne by that party to
the Dispute) shall be borne by Employer if Employee receives substantially the relief
sought by him in the arbitration, whether by settlement, award, or judgment;
otherwise, the costs shall be borne one-half by Employer and one-half by Employee.
The arbitration determination or award shall be final and conclusive on the parties
to the Dispute, and judgment upon such award may be entered and enforced in any
court of competent jurisdiction.

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Section 17. Tax Withholding. Employer shall be entitled to deduct and withhold
from payments made under this Agreement all amounts required to satisfy its withholding obligations
with respect to income, employment and any other applicable taxes.

Section 18. Attorney’s Fees. If any arbitration proceeding or any action for
injunctive or declaratory relief is brought to enforce or interpret the provisions of this
Agreement, attorney’s fees shall be borne by Employer if Employee is the prevailing party (or
receives substantially the relief sought by Employee), otherwise each party will be responsible for
its own attorney’s fees.

Section 19. Additional Obligations. During and after the term of this
Agreement, Employee shall, upon reasonable notice from Employer, furnish Employer with such
information as may be in Employee’s possession, and cooperate with Employer as may reasonably be
requested by Employer, in connection with any legal or governmental proceedings in which Employer
or any of its affiliates is or may become a party. The Company shall reimburse Employee for his
reasonable expenses in fulfilling his obligations under this Section 19 promptly, but in no event
later than the last day of the calendar year following the calendar year in which Employee incurs
the expense.

Section 20. Amendment. Any modification, amendment or change of this Agreement
will be effective only if it is in a writing signed by both parties.

Section 21. Governing Law; Interpretation; Section 409A. This Agreement, and
all transactions contemplated by this Agreement, shall be governed by, construed, and enforced in
accordance with the laws of the State of Texas. This Agreement shall (i) be construed and
interpreted by the Board and such determination shall be final, binding and conclusive on all
parties and (ii) be construed and interpreted to the maximum extent possible in a manner to avoid
any adverse tax consequences to Employee under Section 409A.

Section 22. Headings. The titles to the Sections and the paragraphs of this
Agreement are solely for the convenience of the parties and shall not affect in any way the meaning
or interpretation of this Agreement.

Section 23. MANAGEMENT ORGANIZATION. EMPLOYER, ACTING THROUGH ITS CHIEF
EXECUTIVE OFFICER WITH THE CONCURRENCE OF THE INDEPENDENT MEMBERS OF EMPLOYER’S BOARD OF DIRECTORS,
RESERVES THE RIGHT UNILATERALLY TO REVISE THE ORGANIZATION OF ANY AND ALL OF THE MANAGEMENT
FUNCTIONS AND RELATED REPORTING RELATIONSHIPS AT ITS SOLE DISCRETION. THE CONTENTS OF THE DIAGRAM
ATTACHED AS EXHIBIT A SHALL BE SUBORDINATE TO THE AUTHORITY OF EMPLOYER TO REVISE MANAGEMENT
ORGANIZATION AND RELATED REPORTING RELATIONSHIPS AS PROVIDED IN THIS SECTION.

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IN WITNESS WHEREOF, the parties have executed this Agreement on this 11th day of December, 2007.

	 	 	 	 	 
	EMPLOYEE:	 	EMPLOYER:
	 
	 	 	 	 
	 	 	RBC Life Sciences
	 
	 	 	 	 
	/s/ Steven E. Brown

	 	By:
	 	/s/ Clinton H. Howard
	 

	 	 	 	 
	(Signature)

	 	 	 	(Signature)
	 
	 	 	 	 
	(Steven E. Brown)	 	Clinton H. Howard
	 	 	Chief Executive Officer

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EXHIBIT A

 

 

 

EXHIBIT B

CASH INCENTIVE BONUS

In 2008, if Employer’s Pre-tax Income exceeds one million dollars ($1,000,000) as the “Base
Income”, Employee shall be awarded a bonus for 2008 in an amount equal to 3% of that part of the
Pre-tax Income of Employer that exceeds the Base Income. The amount of Employee’s cash incentive
bonus for 2008 may not exceed two (2) times Employee’s annual base salary for 2008. Employee must
be employed on December 31, 2008 in order to receive the bonus, unless otherwise provided under
Section 9. The bonus for 2008 will be paid between January 1, 2009 and March 15, 2009.

Example: If the Pre-tax Income of Employer for 2008 is two million dollars ($2,000,000), Employee
will be paid 3% of one million dollars ($1,000,000) or thirty thousand dollars ($30,000) provided
Employer remained employed by Employer on December 31, 2008.

Employee shall be eligible for additional bonuses at the discretion of Employer’s Board, and will
participate in an annual bonus plan that will be adopted in advance each year by the Board. At the
time an annual bonus plan is adopted, the Board will establish the “base income” amount each year
applicable to the bonus for that year and the time at which the bonus will be paid.

For purposes of this Exhibit B, “Pre-tax Income” means earnings (loss) from continuing operations
before income taxes, as reported in Employer’s audited financial statements prepared in accordance
with generally accepted accounting principles.Filed by Bowne Pure Compliance

 

Exhibit 10.1

Employment Agreement

This employment agreement (“Agreement”), executed on December 10, 2007 (“Execution Date”)
but effective as of December 1, 2007 (“Effective Date”), by and between Kreido Biofuels, Inc., a
Nevada corporation located at 1070 Flynn Avenue, Camarillo, California 93012 and Kreido’s
wholly-owned subsidiary, Kreido Laboratories (collectively “Kreido” or the “Company”) and George A.
Ben Binninger, an individual (“Executive”).

Recitals

Whereas Executive currently is employed as Company’s Interim Chief Executive Officer; and

Whereas Kreido now wishes to employ Executive as its Chief Executive Officer on an ongoing
basis and Executive wishes to be so employed;

Now, therefore, in consideration of good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties agree as follows:

Terms and Conditions

	1.	 	Executive’s Duties; Title; Location. As of the Effective Date, Executive
is employed as Kreido’s Chief Executive Officer (“CEO”) under the terms and conditions below.
Executive shall do and perform all services, acts and things necessary and advisable to manage
and conduct the business of the Company that are normally associated with the position of CEO.
At all times during his employment, Executive shall report to and be subject to the direction
and policies that are established from time to time by the Company’s Board of Directors (the
“Board”)
	 
	2.	 	TERM AND TERMINATION. Except as specifically provided herein, the Term of this
Agreement shall commence as of the Effective Date. The Term shall continue for eighteen months
unless it is terminated earlier as provided herein below.
	 
	3.	 	Efforts; Location. Executive shall work at Kreido’s Camarillo, California
office. Executive shall not be required routinely to provide services outside of a reasonable
commuting distance from the current Camarillo office except when traveling on Kreido business.
The nature of the Executive’s duties requires flexibility in the days and hours that the
Executive must work.
	 
	4.	 	Compensation.

	 	4.1	 	Cash Compensation.

	 	4.1.1	 	Base Salary. Executive shall receive an annual base salary of $225,000.00 in
accordance with Kreido’s regular payroll practices.

 

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	 	4.1.2	 	Bonus. Executive shall be entitled to participate in a performance-based executive
bonus plan (“Bonus Plan”), which shall be promulgated by the Compensation Committee of
the Company’s board of directors each fiscal year. The Bonus Plan will set forth three
levels of target performance goals “TPGs” for fiscal years 2008 and 2009 which, if
achieved, will entitle the Executive to a bonus of $48,000.00, $84,000.00 or $120,000.00
depending upon the level of TPG achieved. The TPGs will consist of a combination of
goals for the Executive’s individual performance and the Company’s overall performance
in a ratio of 75% Company performance and 25% individual Executive performance. Bonuses
paid under the Bonus Plan, if any, will be paid annually within 60 days after the end of
the fiscal year. The foregoing notwithstanding, so long as Executive’s employment under
this Agreement is not terminated voluntarily by Executive Without Good Reason prior to
December 31, 2008 pursuant to Section 8.1 of this Agreement, Executive’s bonus for
calendar year 2008 shall be no less than $40,000.00 and no more than $120,000.00 (“2008
Bonus”). In the event Executive’s employment is terminated by Company without Cause or
by Executive with Good Reason prior to the end of the fiscal year, Executive shall be
entitled to receive a pro rata portion of the 2008 Bonus. With regard to calendar year
2009, regardless whether Executive is employed by Company at the end of Fiscal Year
2009, Executive shall be entitled to a pro rata bonus for those months of 2009 during
which he is employed hereunder, under the same terms and conditions that apply to
Executive’s fiscal year 2008 Bonus.
	 
	 	4.1.3	 	Engagement Bonus. Upon the execution of this Agreement by both parties, Executive
shall receive a payment of $25,000.00 less all applicable payroll taxes (“Engagement
Bonus”).
	 
	 	4.1.4.	 	Stock Options. Executive shall be entitled to participate in the Kreido Biofuels
2006 Equity Incentive Plan (“Plan”). Executive’s participation in the Plan shall be
governed by the terms and conditions set forth in the applicable Plan documents to the
extent the Plan documents are not inconsistent with the terms of this Agreement except
to the extent required by law. Capitalized words not defined in this Agreement but used
in this Section shall have the meanings ascribed to them in the Plan.

	 	4.1.4	 	(a) Grant of Options. On the Execution Date, the Company
will grant Executive an option to purchase 1,250,000 shares of the Company’s
common voting stock under the Plan (the “Options”). Subsequently, the
Executive shall be eligible for such additional grants of options and other
permissible grants (collectively “Awards”) under the Plan as the Compensation
Committee of the board of directors of the Company shall determine in its
absolute discretion.
	 
	 	4.1.4	 	(b) Option Exercise Price; Term. The per share
exercise price of the Options shall be the final closing price per share of
Company common stock on the date of grant, that being the Execution Date.
The Term of the Option shall be ten years from the date of grant.
	 
	 	4.1.4	 	(c) Vesting and Exercise. The Options shall vest
and be exercisable as follows: 100,000 options shall vest on the Execution
Date; an additional 100,000 options shall vest on the first day of each of
the eleven months beginning with January, 2008 and ending with November,
2008; and on December 10, 2008, an additional 50,000 Options shall vest (each
a “Monthly Vesting”). Each such Monthly Vesting shall remain exercisable for
a period of ten years from the date of grant, subject to Section
4.1.4(e)(iv).

 

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	 	4.1.4	 	(d) Lock-Up Agreement. The Executive shall enter
into a Lock-Up Agreement with the Company in the form attached hereto as
Exhibit B. During any period
that Executive is precluded by the Lock-Up Agreement from exercising the
Option granted to Executive in Section 4.1.4(a), then the exercise period in
Section 4.1.4(b) will be extended by the amount of time during which
Executive could not exercise the Option, but in no event beyond ten years
from the date of grant.
	 
	 	4.1.4	 	(e) Termination of Service; Accelerated Vesting.

(i) If the Executive’s employment is terminated by the Company for Cause as
such term is defined below in Section 7.1.1, (1) all unvested Monthly
Vestings shall expire immediately effective the date of termination, and; (2)
all vested Monthly Vestings shall expire ten years following the date of the
grant.

(ii) If the Executive’s employment is terminated voluntarily by the Executive
without Good Reason as such term is defined below, all unvested Monthly
Vestings shall immediately expire effective the date of termination of
employment. Vested Monthly Vestings, to the extent unexercised, shall expire
on the later of ten years after the date of grant or the expiration of the
contractual Lock-Up Agreement.

(iii) If the Executive’s employment terminates on account of death or
Disability, as defined below, all unvested Monthly Vestings shall immediately
expire effective the date of death or termination of employment and all
vested Monthly Vestings to the extent unexercised, shall expire ten years
after the date of the grant unless otherwise limited by applicable federal or
state law.

(iv) If the Executive’s employment is terminated (A) in connection with a
Change of Control as defined below, (B) by the Company without Cause, or (C)
by the Executive for Good Reason, all unvested Monthly Vestings shall
immediately vest and become exercisable effective the date of termination of
employment, and, to the extent unexercised, shall expire ten years after the
date of grant.

	 	4.1.4	 	(f) Payment. The full consideration for shares
purchased by the Executive upon exercise of the Option shall be paid: (a) by
delivery of a certified check payable to the order of the Company; (b) by
delivery and attestation of Mature Shares (valued at their Fair Market Value
on the date of delivery) or (c) by delivery of a properly executed exercise
notice with irrevocable instructions to a broker to deliver to the Company
the amount necessary to pay the exercise price from the sale of proceeds of a
loan from the broker with respect to the sale of such award or a broker loan
secured by Mature Shares.

	 	4.1.5	 	Grant of Restricted Stock. On the Execution Date, the Company will issue
to Executive 100,000 shares of Company common stock under the 2006 Equity Incentive
Plan, which shall be Restricted Stock in that it shall be subject to repurchase by the
Company at the price of $0.01 per share if Executive shall not be in the employ
of the Company through the Term of the Agreement other than due to: (1) the death
or disability of Executive; (2) the termination of Executive’s employment by
the Company without Cause; or (3) the termination of Executive’s employment by Executive
for Good Reason. The certificate representing the Restricted Stock shall be held in the
custody of the Company or its designee for the account of the Executive pending delivery
to Executive upon the lapse of the restriction. The parties agree that the value of the Restricted
Stock while subject to restriction is $0.01 per share. The Restricted Stock shall be
subject to the restriction described herein and shall bear an appropriate legend with
respect to the restriction.

 

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	 	4.1.5	 	(a) Taxes. The Executive shall be liable
for any and all taxes, including withholding taxes, arising out of this
grant and the vesting of Restricted Stock hereunder. When the restriction
on the Restricted Stock lapses, Executive may elect to satisfy Company’s
withholding tax obligation by (1) remitting to Company the amount of
Company’s minimum withholding obligation; (2) having Company retain that
portion of the Restricted Stock having a fair market value equal to the
Company’s minimum withholding obligation; (3) having the Company retain
its minimum withholding obligation from payroll otherwise due and payable
to Executive at the time the Restriction lapses; or (4) a combination of
numbers 1 through 3. Executive shall notify Company of his election under
this Section as soon as practicably possible after the restriction on the
Restricted Stock has lapsed.

	 	4.2	 	Additional Benefits.

	 	4.2.1	 	Welfare Benefit Plans. Executive shall at all times be entitled to
participate in all benefit, 401(k) and other ERISA-qualified plans made available
to senior management executives of Kreido under the same terms offered to other
senior management executives, including without limitation, health benefit coverage
for Executive’s spouse and dependant children, if any.
	 
	 	4.2.2	 	Expense Reimbursement. Kreido shall reimburse Executive for all
ordinary and necessary expenses reasonably incurred by Executive on Kreido’s behalf
(“Business Expenses”). Executive shall provide Kreido with documentation for all
Business Expenses at the time reimbursement is requested. In the event it is
necessary for Executive to travel on Kreido’s behalf, Executive shall be entitled
to fly and have travel accommodations on the same level as Kreido’s other most
senior management Executives.
	 
	 	4.2.3	 	Discretionary Time Off. During his employment hereunder, Executive
shall be entitled to accrue Paid Time Off (“PTO”) in accordance with Kreido’s
regular PTO policy for all employees, or at the rate of fifteen days per calendar
year, whichever is greater. In addition, Executive may devote up to 4 work days
per calendar month to philanthropic, civic, charitable, personal, business or
religious activities, or to serving on the boards of directors or as a trustee of
other entities (“Discretionary Time Off”). Time off Executive takes prior to
December 6, 2007, if any, shall not count against Executive’s 2008 PTO accrual nor
his 2008 Discretionary Time Off accrual. The quantum of Executive’s Discretionary
Time Off shall not be limited or reduced by any other provision of this Agreement,
including, without limitation, Section 10.4.
	 
	 	 	 	Executive shall provide written notice to the Company of those companies, if any,
for which he now serves as a director or trustee, and Executive shall provide
written notice to the Company in advance of any additional board memberships
and/or trusteeships he proposes to take on that involve the area of biofuels technology,
supply, facilities, equipment, production, sales, and/or services.

 

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	5.	 	Proprietary Covenants of Executive.

	 	5.1	 	No Conflicts Of Interest. Executive acknowledges that he is bound to use good
judgment, to adhere to the highest ethical standards, and to avoid situations that create
an actual, potential, or apparent conflict of interest. Executive warrants and represents
to Kreido that he is currently unaware of any actual, potential, or apparent conflicts of
interest. He also agrees to immediately disclose to the Board of Directors of Kreido any
and all actual, potential, or apparent conflicts of interest, should they later arise. In
addition, Executive further represents and warrants to Kreido that for so long as he is
employed by the Company, he shall inform the Company of each and every business opportunity
presented to the Executive that arises that could be reasonably feasible for the Company to
undertake in the area of biofuels technology, supply, facilities, equipment, production,
sales, and/or services and that he will not, directly or indirectly, exploit any such
opportunity for his own account or the account of any third party without first obtaining
the Company’s written consent. Nothing contained in this Section 5.1 shall be construed to
prevent Executive from engaging in the consulting activities in which he is currently
engaged.
	 
	 	5.2	 	Covenant Not to Use or Disclose Confidential Information.

	 	5.2.1	 	Definition of Confidential Information. For purposes of this
Agreement, the term Confidential Information means all and any confidential
information and/or trade secrets of Kreido, including without limitation,
scientific discoveries, recipes, formulations, information encompassed in all
advertising and marketing plans, customer lists, costs, pricing information,
information concerning software and all concepts or ideas, in or reasonably related
to the business of Kreido. Confidential Information shall not include any Kreido
information that has been voluntarily disclosed to the public by Kreido,
independently developed and disclosed by others, information about Kreido that
Executive did not obtain by virtue of his employment or fiduciary relationship with
the Company, or information which otherwise enters the public domain through lawful
means.
	 
	 	5.2.2	 	Non-disclosure of Confidential Information. Executive expressly
acknowledges that in the performance of his duties and responsibilities with the
Company prior to the execution of this Agreement, he has been exposed to
Confidential Information and that he will continue to be exposed to the
Confidential Information after the execution of this Agreement. During his
employment and for three years thereafter, Executive shall regard and preserve as
confidential all Confidential Information pertaining to Kreido and its affiliates
that have been or may be obtained by Executive in any way by reason of Executive’s
employment by Kreido. Executive shall not, without the prior and specific written
consent of Kreido, or unless ordered to do so by court order or subpoena (i) use,
publicize, release or disclose to others, either during or after the period of
employment, Confidential Information or (ii) take, retain or copy any Kreido
executive compensation plans, Executive benefit plans, business plans, customer
lists, costs, pricing information, documents, reports, information encompassed in
advertising and marketing plans, or other concepts or ideas, in or
reasonably related to the business of Kreido. Executive agrees to notify
Kreido’s Board of Directors within two (2) business days of receipt of any court
order or subpoena which calls for information deemed Confidential under this
Agreement and to give Kreido reasonable opportunity to contest the subpoena. The
foregoing notwithstanding, nothing contained in this Section 5.2.2 shall be
construed to prevent Executive from using or disclosing Confidential Information
when it is necessary for him to do so in the course of conducting his regular
employment duties.

 

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	 	5.3	 	Covenant Not to Interfere With Kreido’s Business Relationships. During his
employment and for a period of 18 months after the termination of his employment,
executive shall not, whether for Executive’s own account or for the account of a
third-party, solicit or endeavor to entice any employee or vendor of Kreido to end any
business and/or contractual relationship with Kreido. In addition, Executive will not use
any of Company’s Confidential Information in order to induce any client or customer of
Kreido to end its relationship with the Company.
	 
	 	5.4	 	Ownership and Use of Materials.

	 	5.4.1	 	Kreido Materials. Executive agrees that all information encompassed
in all executive compensation plans, Executive benefit plans, business plans,
advertising plans and marketing materials and other Confidential Information
concerning Kreido, its Executives and shareholders, customer lists, costs, pricing
information, documents, reports, plans, proposals or other items made or created by
Executive or that come into Executive’s possession during the Term are the property
of Kreido and shall not be used by Executive in any way after the Agreement is
terminated.
	 
	 	5.4.2	 	Delivery of Materials. Upon termination of this Agreement, Executive
shall promptly deliver to Kreido or destroy all of its executive compensation
plans, Executive benefit plans, business plans, advertising plans and marketing
materials and other Confidential Information concerning Kreido, its Executives and
shareholders, customer lists, costs, pricing information, documents, reports,
plans, proposals or other items made or created by Executive during the period of
employment. The foregoing notwithstanding, if Executive is still a member of the
Board of Directors of the Company after his employment with the Company terminates,
Executive may retain the Confidential Information he acquired in his capacity as a
director of the Company and not as the Company’s Chief Executive Officer.

	6.	 	Termination Due to Death or Disability. If Executive dies during the employment,
Executive’s employment shall automatically cease and terminate as of the date of Executive’s
death. In the event of Executive’s disability for a period of 120 consecutive days during any
365-day period, Company shall thereafter have the right, upon written notice to Executive, to
terminate this Agreement, in which case the date of termination shall be the date of such
written notice to Executive. As used herein, “disability” means a physical and/or mental
disability of Executive that prevents Executive from substantially performing the essential
functions of his position even with reasonable accommodation (“Disability”). Company does not
currently offer disability insurance to its employees. In the event Company, in its sole
discretion, elects to offer such insurance coverage (“Disability Policy”) to its employees at
any time in the future, the definition of Disability as used
herein automatically shall be modified by the adoption of the definition of disability as used in
the Disability Policy.

 

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	 	 	In the event of the termination of Executive’s employment due to his death or Disability,
Executive’s estate and/or Executive shall be entitled to receive: (i) a lump sum cash payment,
payable within ten (10) business days after the date of death equal to the sum of any accrued but
unpaid salary and bonus as of the date of death; and (ii) earned Executive benefits, perquisites
and reimbursements described in Section 4 inclusive, if any, as to which Executive may be
entitled hereunder or under Executive benefit plans, programs and arrangements of Kreido through
the date of death. In the event of the termination of Executive’s employment due to Disability,
Executive shall not be entitled to any severance pay.
	 
	7.	 	Termination by Kreido.

	 	7.1	 	Termination for Cause.

	 	7.1.1	 	Definition of Cause. The term “Cause” for purposes of this Agreement means the
following, which will constitute a material breach of this Agreement (“Material
Breach”): Executive’s conviction of or plea of nolo contendere to any felony or any
offense involving moral turpitude.
	 
	 	7.1.2	 	Entitlements Upon a Termination for Cause. In the event of the termination of the
Executive’s employment hereunder due to a termination by the Company for Cause, on the
date of termination Executive shall be entitled to receive: (i) a lump sum cash
payment, payable immediately upon the termination of Executive’s employment, equal to
the sum of any accrued but unpaid base salary and bonus as of the date of such
termination; and (ii) earned Executive benefits, as described in Section 4 of this
Agreement, as to which Executive may be entitled hereunder or under Executive benefit
plans, programs and arrangements of Kreido.

	 	7.2	 	Termination Without Cause. Kreido may terminate Executive’s employment hereunder without
Cause at any time by providing Executive written notice of such termination. If Executive’s
employment is terminated without Cause, the termination shall take effect on the effective
date of written notice of such termination to Executive (pursuant to Section 11.10).

	 	7.2.1	 	Entitlements Upon a Termination Without Cause. In the event of the
termination of Executive’s employment hereunder due to a termination by Kreido
without Cause (other than due to Executive’s death), Executive shall be entitled to:
(i) a lump sum cash payment, payable immediately upon the termination of Executive’s
employment, equal to the sum of any accrued but unpaid base salary and bonus as of
the date of such termination; (ii) earned Executive benefits, as described in
Section 4 of this Agreement, as to which Executive may be entitled hereunder or
under Executive benefit plans, programs and arrangements of Kreido through the date
of his termination; and (iii) severance pay on the date of the Termination without
Cause equal to Executive’s then-current base salary for three months.

 

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	8.	 	Termination by Executive.

	 	8.1	 	Termination Without Good Reason. Executive shall have the right to terminate
Executive’s employment hereunder at any time without Good Reason (as defined below)
upon written notice of such termination to Kreido. A voluntary termination by
Executive in accordance with this Section 8.1 shall not be deemed a breach of this
Agreement. Upon any voluntary termination of employment by Executive pursuant to this
Section 8.1, Executive shall have the same entitlements as provided in Section 7.1.2
in the case of a termination by Kreido for Cause.
	 
	 	8.2	 	Termination With Good Reason. The following events constitute grounds for
Executive to terminate his employment for good reason (“Good Reason”):

	 	(i)	 	removal of Executive from the position specified in Section 1
without Cause;
	 
	 	(ii)	 	material diminution in Executive’s salary, duties or title;
	 
	 	(iii)	 	assignment to Executive of duties that are materially
inconsistent with his position or that materially impair his ability to perform
his duties;
	 
	 	(iv)	 	Change of Control. For purposes of this Agreement, “Change of
Control” means the occurrence of: (A) any consolidation or merger of the
Company pursuant to which the stockholders of the Company immediately before the
transaction do not retain immediately after the transaction, in substantially
the same proportions as their ownership of shares of the Company’s voting stock
immediately before the transaction, direct or indirect beneficial ownership of
more than 50% of the total combined voting power of the outstanding voting
securities of the surviving business entity; (B) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company other than any sale, lease,
exchange or other transfer to any company where the Company owns, directly or
indirectly, 100% of the outstanding voting securities of such company after any
such transfer; (C) the direct or indirect sale or exchange in a single or series
of related transactions by the stockholders of the Company of more than 50% of
the voting stock of the Company; (D) any sale, lease, exchange or other transfer
of stock (in one transaction or a series of transactions) which results in a
single shareholder having more than 50% of the voting stock of the Company.
	 
	 	(v)	 	the foregoing notwithstanding, i, ii, and iii above will not
constitute Good Reason unless Executive first notifies Kreido in writing
describing the event(s) that constitutes Good Reason (Executive’s Notice of Good
Reason ) and unless Kreido thereafter fails to cure such event(s) within fifteen
business days after Executive delivers Executive’s Notice of Good Reason to
Kreido (“Kreido’s Cure Period”). It will be incumbent upon Executive to deliver
Executive’s Notice of Good Reason to Kreido within fifteen business days after
making a good faith determination that an event constituting Good Reason has
occurred.

	 	8.2.1	 	Entitlements Upon a Termination for Good Reason. Upon Executive’s
termination of his employment hereunder for Good Reason in accordance with Section
8.2 hereof, Executive shall have the same entitlements as provided under Section 7.2
for a termination by Kreido without Cause.

 

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	9.	 	Right to Assign. This Agreement shall be assignable only by Kreido.
	 
	10.	 	Miscellaneous Terms.

	 	10.1	 	Post-Termination Defense of Claims. In the event that Executive and/or Kreido
are named as defendants in any legal proceeding arising from the operation of Kreido’s
business, Kreido shall defend, indemnify and hold Executive harmless to the full extent
required by law. Kreido shall provide Executive with defense counsel of Kreido’s
choosing, but who is also reasonably acceptable to Executive. In the event Executive’s
interests in the proceeding are adverse to Kreido’s interests, Kreido shall provide
Executive with the reasonable costs and fees of an attorney of Executive’s choosing.
	 
	 	10.2	 	Alternative Dispute Resolution; Mediation Before Arbitration.

	 	10.2.1	 	Arbitrable Disputes. To the fullest extent allowed by law, any controversy,
claim, or dispute between Executive and Kreido (and/or any of its directors,
shareholders, officers, Executives, representatives or agents) relating to or
arising out of his employment or the termination of that employment
(“Arbitrable Dispute”) will be submitted to final and binding arbitration in
Los Angeles County, California. Executive agrees to execute the Mutual
Agreement to Arbitrate attached hereto as Exhibit “A” and incorporated herein
by reference.
	 
	 	10.2.2	 	Mediation Before Arbitration. The foregoing provisions regarding
Arbitration notwithstanding, before any Arbitrable Dispute is submitted to
arbitration, the Parties agree to mediate such dispute in good faith with a
professional mediator in Los Angeles County who is also a licensed attorney
experienced in the area of employment law. If the parties cannot agree on the
choice of a mediator, each party shall select a mediator, the two of whom will
then select a third mediator who alone will conduct the mediation. In the
event one party makes a demand on the other for mediation to which such party
fails to respond for a period of thirty days, the party demanding mediation
may then submit the dispute directly to Arbitration pursuant to the Mutual
Agreement to Arbitrate.

	 	10.3	 	Limitation of Claims. To the fullest extent allowed by law, every controversy,
claim, or dispute between Executive and Kreido (and/or its directors, shareholders,
officers, Executives, representatives and agents) relating to or arising out of his
employment or the termination of that employment (“Claim”) shall be asserted in
writing, with a specific demand first to mediate and then, if still necessary, to
arbitrate the Claim, by the party asserting such Claim (“Claimant”) and delivered to
the non-asserting party no later than twelve months after the Claimant knows or should
have known of the existence of the Claim or the Claim will be forever barred. The
foregoing notwithstanding, any such Claim that has a statutory limitations period
shorter than twelve months will be subject to the shorter statutory limitations period.
	 
	 	10.4	 	Executive’s Fiduciary Duty to Company. No term contained herein is intended to
nor shall be construed to limit or reduce Executive’s fiduciary duties to the Company.

 

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	11.	 	General Terms and Conditions.

	 	11.1	 	Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any prior or subsequent
breach; provided, however, that either party to this Agreement may waive any obligation
owed to such party, if such waiver is in writing signed by an authorized signer.
	 
	 	11.2	 	Integration; Modification. This Agreement constitutes the entire understanding
and agreement between Kreido and Executive regarding its subject-matter and supersedes
all prior negotiations and agreements between them with respect to its subject-matter
whether oral or written. This Agreement may not be modified except by a writing signed
by Executive and the Chairperson of Kreido’s Board of Directors.
	 
	 	11.3	 	Enforceability; Severability. If any provision of this Agreement shall be
deemed invalid or unenforceable in whole or in part, such provision shall be deemed to
be modified or restricted to the extent and in the manner necessary to render the same
valid and enforceable, or shall be deemed excised from this Agreement, as the case may
require, and this Agreement shall be construed and enforced to the maximum extent
permitted by law as if such provision had been originally incorporated herein as so
modified or restricted, or as if such provision had not been originally incorporated
herein, as the case may be.
	 
	 	11.4	 	Binding Effect. All the terms and conditions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
	 
	 	11.5	 	Descriptive Headings. The paragraph and section headings in this Agreement are
for convenience only and shall not control or affect the meaning or construction of any
provision of this Agreement.
	 
	 	11.6	 	Counterparts and Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one agreement. Facsimile signatures on this
Agreement shall be treated as original signatures.
	 
	 	11.7	 	Third-Party Beneficiaries. No person shall be a third-party beneficiary of
this Agreement and no person other than the parties hereto and their permitted
successors and assigns shall receive any of the benefits of this Agreement.
	 
	 	11.8	 	Applicable Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard to
conflicts of laws principles.

 

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	 	11.9	 	Arms Length Agreement. This Agreement has been negotiated at arms length
between persons knowledgeable in the matters dealt with herein. Accordingly, any rule
of law or any statute, legal decision, or common law principle of similar effect that
would require interpretation of any ambiguity in this Agreement against the party
that drafted it is of no application and is hereby expressly waived.
	 
	 	11.10	 	Notices. All notices, statements and other documents that any party is
required or desires to give to the other party hereunder shall be given in writing and
shall be served in person, by express mail, by certified mail, by overnight delivery or
by facsimile at the respective addresses of the parties as set forth below, or at such
other addresses as may be designated in writing by such party in accordance with the
terms of this Section 11.10.

	 	 	 	 	 
	 

	 	If to Kreido:
	 	Kreido Biofuels, Inc.

1070 Flynn Avenue

Camarillo, California 93012

Attention: Betsy Knapp, Chair of the Board

Fax: (805) 384-0989
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Susan Keenberg, Esq.

1217 Acacia Avenue

Torrance, California 90501

Fax: (310) 783-0111
	 
	 	 	 	 
	 

	 	If to Executive:
	 	George A. Binninger

INFORMATION ON FILE
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Janet I. Swerdlow, Esq.

Swerdlow Florence Sanchez Swerdlow & Wimmer

9401 Wilshire Boulevard, Suite 828

Beverly Hills, California 90212

Fax: (310) 273-8680

Delivery shall be deemed conclusively made (I) at the time of service, if personally
served, (ii) when deposited in the United States mail, properly addressed and
postage prepaid, if delivered by express mail or certified mail, (iii) upon deposit
with the private overnight deliverer, if served by overnight delivery, and (iv) at
the time of electronic facsimile transmission (as confirmed in writing), provided a
copy is mailed within twenty-four (24) hours after such transmission.

 

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In Witness Whereof, Kreido and Executive have executed this Agreement this
 _____ 

day of
December, 2007.

This Agreement is subject to an arbitration agreement, which is attached hereto and
incorporated herein by reference.

	 	 	 	 	 
	Kreido Biofuels, Inc., a Nevada Corporation

and Kreido Laboratories, a California Corporation	 	Executive
	 
	 	 	 	 
	By:

	 	 
	 	 
	 	 	 	 	 
	 

	 	Betsy Knapp, Chair of the Board
	 	George A. Binninger

 

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EXHIBIT A

MUTUAL AGREEMENT

TO

ARBITRATE CLAIMS

This Agreement is between Kreido Biofuels, Inc. (“Company”) and George A. Binninger (referred
to as “I” or “me”). While I am employed by the Company or thereafter, disputes may arise between
the Company and me related to my employment. By entering into this Agreement, both the Company and
I anticipate that we will benefit by resolving these disputes through binding arbitration.

Arbitration is a fair and impartial procedure that in most cases is faster and less expensive
than civil litigation. References to “the Company” in this Agreement include Kreido Biofuels,
Inc., its parents, subsidiaries, shareholders, partners, directors, and all affiliates of Kreido
Biofuels, Inc., together with all benefit plans of Kreido Biofuels, Inc. and the sponsors,
fiduciaries and administrators of such benefit plans.

Claims Covered by This Agreement: Except as described in the next paragraph, this Agreement
applies to all disputes between the Company and me, all claims the Company may have against me, and
all claims I may have against the Company or its agents, arising out of my employment with the
Company or the termination of my employment (referred to as Claims). This Agreement will apply to
Claims asserted during my employment with the Company or after it has ended. Claims covered by
this Agreement include but are not limited to: claims for breach of express or implied contract or
covenant; claims for the commission of any intentional or negligent tort; claims for violation of
any federal, state or local law, ordinance, regulation or rule; claims for wages, benefits or other
compensation due; claims for wrongful termination, demotion or disciplinary action; and claims of
discrimination or harassment under the Fair Employment and Housing Act and Title VII of the Civil
Rights Act, as amended.

Claims Not Covered by This Agreement: This Agreement does not apply to the following claims:
Claims for worker’s compensation or unemployment compensation benefits; Claims or charges before
any administrative agency having jurisdiction of the Claim, if private dispute resolution
procedures cannot be compelled as to such Claim; or Claims for benefits under a benefit plan which
has a claim procedure inconsistent with this Agreement.

Exclusive Remedy: All Claims must be resolved according to the procedures in this Agreement,
and not otherwise except for the provision for Mediation before Arbitration as provided in the
Employment Agreement between me and the Company of even date herewith (the “Employment Agreement”).
Neither the Company nor I will file or prosecute any lawsuit or administrative action in any way
related to any Claim, except as expressly permitted by this Agreement and the Employment Agreement.
Either the Company or I may bring an action in any court of competent jurisdiction to compel
arbitration under this Agreement. The parties understand and agree that they are waiving any right
to a jury trial by entering into this Agreement.

Arbitration: All Claims must be resolved through final and binding arbitration. The
arbitrator must be a neutral arbitrator chosen by the parties. Arbitration will take place at a
location determined by the arbitrator in Los Angeles County, California. The arbitration will be
administered in compliance with (a) the Federal Arbitration Act, U.S. Code, Tit. 9, § 1 et seq.,
California Arbitration Act, or such other state or federal law as may be adopted, (b) the
procedures set forth below and, (c) to the extent not inconsistent with such procedures, the then
existing AAA California Employment Dispute Resolution Rules. Any dispute about the interpretation,
applicability, enforceability or validity of this Agreement, or whether any issue is subject to
arbitration under this Agreement, will be determined by the arbitrator.

Arbitration Agreement

 

Page 1

 

Arbitration Procedures; Discovery:

5.1 A deposition is a chance for each party to ask questions of a witness, and the witness
must answer the questions under oath, with a court reporter present. Each party may take the
deposition of whatever persons they elect to depose. Additional depositions may be ordered by the
arbitrator. At or before the final Arbitration Management Conference, each party will provide the
other with copies of all non-privileged documents in their possession or control which they intend
to introduce as exhibits at the hearing or on which they rely to support their positions.

5.2 Interrogatories, Requests to Produce, and Requests to Admit are written methods that the
parties may use to learn about the other party’s case. These discovery methods will be allowed in
the manner permitted under California Arbitration Act, Calif. Code of Civil Proc. § 1283.05.

5.3 The arbitrator may rule on pre-hearing disputes and hold such pre-hearing conferences by
telephone or in person as he or she may determine. Either party may make motions to dismiss, for
summary judgment and/or for summary adjudication of issues.

5.4 Either party may submit, or the arbitrator may order either or both parties to submit, a
brief before the arbitration hearing. Either party, at its own expense, may arrange for a court
reporter to provide a stenographic record of proceedings at the hearing. The arbitrator will apply
the substantive law and the law of remedies of the State of California or the United States, as
applicable to the Claims.

5.5 After the end of the arbitration hearing, either party may file a post-hearing brief
within a time set by the arbitrator.

5.6 The arbitrator shall issue a written award, which shall include a statement of the
essential findings and conclusions on which the award is based. The award will be final and
binding on the parties to the arbitration. The arbitrator’s award may be reviewed by a court of
competent jurisdiction.

Arbitration Costs: the Company will pay the costs of arbitration, including reasonable fees
imposed by the AAA and the arbitrator. I will be responsible for the costs of discovery initiated
by me or on my behalf, any depositions noticed by me or on my behalf, expert witnesses retained by
me or on my behalf and for any out-of-pocket expenses incurred by me or on my behalf.

Legal Representation: In any arbitration under this Agreement, both the Company and I may be
represented by legal counsel of our own choosing. Each of us will be responsible for the fees of
our own counsel, provided that an arbitrator may award attorneys’ fees to the prevailing party
under any applicable statute or written agreement to the same extent that attorneys’ fees could be
awarded in standard civil litigation. This provision for the award of attorneys’ fees is subject
to the provisions of the Employment Agreement requiring Mediation before Arbitration.

Integrated Agreement; Amendment: This Agreement contains the final and complete expression
and understanding between the Company and me with respect to the subjects covered hereby. This
Agreement cannot be amended or modified except in writing, signed by an authorized representative
of Kreido Biofuels, Inc. and by me.

Severability: If any provision of this Agreement is held invalid, in whole or part, such
invalidity will not affect the remainder of such provision or the remaining provisions of this
Agreement.

Arbitration Agreement

 

Page 2

 

Headings: The headings in this Agreement are inserted for convenience only and do not affect
the meaning or interpretation of this Agreement or any provision hereof.

Successors and Assigns: This Agreement will be binding upon, and inure to the benefit of, the
Company, me and our respective heirs, executors, administrators, representatives, successors and
assigns.

Governing Law: I acknowledge that the Company is engaged in interstate commerce and that this
Agreement is covered by the provisions of the Federal Arbitration Act. This Agreement is to be
construed, and the rights and obligations of the parties hereunder determined, in accordance with
the laws of the United States and the State of California.

IMPORTANT

I agree that I have been given a reasonable opportunity to read this Agreement carefully, I have
read it, understand it and I am signing it voluntarily. I have not been promised anything for
signing it that is not described in this Arbitration Agreement and the Employment Agreement. The
Company encourages me to discuss this Agreement with my legal advisor if I wish before signing it.

In Witness Whereof, Kreido and Executive have executed this Agreement this 20th
day of November, 2007.

	 	 	 	 	 
	Kreido Biofuels, Inc.	 	Executive
	 
	 	 	 	 
	By:

	 	 
	 	 
	 	 	 	 	 
	 

	 	Betsy Knapp, Chair of the Board
	 	George A. Binninger

Arbitration Agreement

 

Page 3

 

EXHIBIT B

LOCK-UP AGREEMENT

THIS LOCK-UP AGREEMENT (the “Agreement”) is made and entered into as of the date indicated
below, by and between the officer named in the space provided below (the “Officer”) and KREIDO
BIOFUELS, INC., a Nevada corporation (the “Company”).

RECITALS:

WHEREAS, the Officer in the future may be owner of shares of Common Stock of the Company
either pursuant to the exercise of stock purchase options or otherwise (such shares owned or to be
owned by the Officer, the “Shares”); and

WHEREAS, in order to facilitate certain transactions consummated by the Company the Officer
desire to enter into this Agreement and restrict the sale, assignment, transfer, conveyance,
hypothecation or alienation of the Shares, all on the terms set forth below.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, contained
herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. The Officer hereby agrees to not sell, assign, transfer, pledge, convey, hypothecate or
otherwise alienate any Shares at any time beginning the date of this Agreement indicated in the
space provided below and the expiration date of this Agreement indicated in the space provided
below except as otherwise permitted in this Agreement.

2. Notwithstanding anything contained in this Agreement, Officer may transfer Shares to his or
her spouse or lineal descendants or to trusts established solely for the benefit of Officer, his or
her spouse or lineal descendants, for estate planning purposes provided that the transferee (or the
legal representative of the transferee) executes an agreement to be bound by all of the terms of
this Agreement.

3. Notwithstanding anything to the contrary set forth herein, the Company may, at any time
and from time to time, waive in writing any of the conditions or restrictions contained herein.

4. In the event of a tender offer to purchase all or substantially all of the Company’s issued
and outstanding securities, or a merger, consolidation or other reorganization with or into an
unaffiliated entity, this Agreement shall terminate and the Shares restricted pursuant hereto shall
be released from such restrictions if the requisite number of the record and beneficial owners of
the Company’s securities then outstanding are voted in favor of such tender offer, merger,
consolidation or reorganization.

5. Except as otherwise provided in this Agreement, Officer shall be entitled to his or her
beneficial rights of ownership of the Shares, including the right to vote the Shares for any and
all purposes.

6. This Agreement may be executed in any number of counterparts with the same force and effect
as if all parties had executed the same document.

7. All notices, instructions or other communications required or permitted to be given
pursuant to this Agreement shall be given in writing and delivered by certified mail, return
receipt requested, overnight delivery or hand-delivered to all parties to this Agreement at the
principal office of the Company, Attention: CFO, in the case of notice to the
Company, or to the principal office of Officer or his or her residence address indicated in the
employment records of the Company, whichever the Company may elect, in the case of notice to
Officer. All notices shall be deemed to be given on the same day if delivered by hand or on the following business day if sent by overnight delivery or the
second business day following the date of mailing.

 

 

 

8. The execution and delivery of this Agreement, although a condition of employment of
Officer, shall not be interpreted as an employment agreement or a guaranty or assurance of
employment. This Agreement shall survive the expiration or termination of any employment agreement
between the Company and Officer and the termination of Officer as an employee of the Company.

9. This Agreement sets forth the entire understanding of the parties hereto with respect to
the subject matter hereof, and may not be amended except by a written instrument executed by the
parties hereto. This Agreement shall be governed by the laws of the State of California.

	 	 	 	 	 
	DATE OF AGREEMENT:

	 	December 10, 2007		 
	 	 	 	 	 
	 

	 	 	 	 
	EXPIRATION DATE:

	 	January 12, 2008	 	 
	 	 	 	 	 
	 
	 	 	 	 
	OFFICER:

	 	 	 	 
	 	 	 	 	 

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement in
Camarillo, California.

	 	 	 	 	 
	KREIDO BIOFUELS, INC.	 	OFFICER:
	 
	 	 	 	 
	By:

	 	 
	 	 
	 	 	 	 
	Name:

	Betsy Wood Knapp
	 	Signature
	Its:

	Chair
	 	Name: George A. Binninger

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