Document:

NUGEN HOLDINGS, INC.

2010 STOCK INCENTIVE PLAN

OF

Marshall G. Webb

This Incentive Stock Option (this “Option”) is granted to the Optionee named above by NuGen Holdings, Inc. (the “Corporation”) pursuant to the NuGen Holdings, Inc. 2010 Stock Incentive Plan (the “Plan”) as of this 1st day of July, 2011, the date this Option was granted pursuant to the Plan. This Option provides you an option to purchase the number of shares of the Common Stock of the Corporation at the times and on the terms set forth below. This Option is intended to qualify as an “Incentive Stock Option” within the meaning of § 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

1.           Number of Shares and Vesting. The total number of shares of Common Stock subject to this Option is Two Hundred Fifty Thousand (250,000) shares. Subject to the other terms of this Option, the shares subject to this Option shall vest and become exercisable as follows: (a) 125,000 shares at the execution of this Agreement (July 1, 2011); and (b) 125,000 shares ratably over the immediately following twelve month period (1/12th each at the end of each fiscal month), with the first installment vesting on July 31, 2011.

 

Regardless of the foregoing schedule, this Option shall become 100% vested in the event of a “Change in Control,” as defined in and subject to the terms of the Plan.

 

2.           Exercise Price. The exercise price of this Option is $0.45 per share, which is not less than the fair market value of the Common Stock on the date of grant of this Option. The exercise price per share shall be paid upon exercise of all or any part of each installment which has become exercisable by you.

 

3.           Minimum Exercise. The minimum number of shares with respect to which this Option may be exercised at any one time is the lesser of ten thousand four hundred seventeen shares (10,417) or the number of shares as to which this Option is then exercisable.

 

4.           Assurances Upon Exercise. The Corporation may require you, or any person to whom this Option is transferred under paragraph 7 of this Option, as a condition of exercising this Option: (i) to give written assurances satisfactory to the Corporation as to such person’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Corporation who is knowledgeable and experienced in financial and business matters, and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising this Option; and (ii) to give written assurances satisfactory to the Corporation stating that such person is acquiring the Common Stock subject to this Option for such person’s own account and not with any present intention of selling or otherwise distributing the stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if: (i) the issuance of the shares of Common Stock upon the exercise of this Option has been registered under a then currently effective registration statement under the Securities Act of 1933, as amended; or (ii) as to any particular requirement, a determination is made by counsel for the Corporation that such requirement need not be met in the circumstances under the then applicable securities laws. The Corporation may, upon advice of counsel to the Corporation, place legends on stock certificates issued upon exercise of this Option as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock.

  

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5.           Term. The term of this Option commences on the date hereof and, unless sooner terminated as set forth below or in the Plan, terminates ten (10) years from the date it was granted. This Option may terminate prior to the expiration of its term as set forth in the Plan.

 

6.           Notice of Exercise. This Option may be exercised, to the extent specified above, by delivering written notice of exercise together with the exercise price to the Secretary of the Corporation, or to such other person as the Corporation may designate, during regular business hours, together with such additional documents as the Corporation may then require pursuant to the Plan. The notice must specify the number of shares to be purchased upon exercise and a date within 15 days after receipt of the notice by the Corporation on which the purchase is to be completed. The exercise price must be paid in cash.

 

7.           Transferability. This Option is not transferable, except by will or by the laws of descent and distribution, or to a family trust owed by you, and shall be exercisable during your life only by you. However, you may designate a third party who, in the event of your death, would be entitled to exercise this Option, by providing a written notice in a form satisfactory to the Secretary of the Corporation.

 

8.           State Securities Laws. Notwithstanding the other provisions of this Option, the Corporation may, in its reasonable discretion, determine that the registration or qualification of the shares of Common Stock covered by this Option is necessary or desirable as a condition of or in connection with the exercise of this Option. If the Corporation makes such a determination, this Option may not be exercised in whole or in part unless and until such registration or qualification shall have been effected or obtained free of any conditions not acceptable to the Corporation, in its reasonable discretion. The Corporation shall use good faith reasonable efforts to obtain or effect such registration or qualification, but is not required to obtain or effect such registration or qualification.

 

9.           Notices. Any notices provided for in this Option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Corporation to you, five days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Secretary of the Corporation.

 

10.         Supremacy of the Plan. This Option is subject to all the provisions of the Plan, a copy of which is attached, and its provisions are hereby made a part of this Option. This Option is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Option and those of the Plan, the provisions of the Plan shall control.

  

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11.           Cashless Exercise. Notwithstanding anything contained herein to the contrary, if you elect a “Cashless Exercise” method of payment for the Option, the Corporation shall issue you the number of shares of common stock determined in accordance with the following formula:

 

X              =              Y(A - B)

   A

 

	                     with:	
X =

	
the number of shares of common stock to be issued;

 

	 	
Y =

	
the number of shares of common stock with respect to which the Option is being exercised;

	 	
A =

	
the fair value per share of common stock on the date of exercise of this Option; and

	 	
B =

	
the then-current exercise price of the Option.

For the purposes of this Section, “fair value” per share of common stock shall mean (A) the average of the closing sales prices, as quoted on the primary national or regional stock exchange on which the Common Stock is listed, or, if not listed, the OTC Bulletin Board if quoted thereon, on the ten (10) trading days immediately preceding the date on which the exercise notice is deemed to have been sent to the Corporation, or (B) if the common stock is not publicly traded as set forth above, as reasonably and in good faith determined by the Board of Directors of the Corporation as of the date which the notice of exercise is deemed to have been sent to the Corporation.

 

12.         Optionee Acknowledgments. By executing this Option, you acknowledge and agree as follows:

 

12.1.           Although the Corporation has made a good faith attempt to qualify this Option as an “Incentive Stock Option” within the meaning of Code § 422, the Corporation does not warrant that this Option granted herein constitutes an “Incentive Stock Option” within the meaning of that section, or that the transfer of stock acquired pursuant to this Option will be treated for Federal Income Tax purposes as specified in Code § 421.

 

12.2.           You shall, from time to time, notify the Secretary of the Corporation in writing of each disposition (including a sale, exchange, gift, or a transfer of legal title) of shares of Common Stock acquired pursuant to the exercise of this Option, within three years after acquiring those shares. Such notification shall be in writing and shall be made within 15 days after each such disposition is made.

  

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12.3.           You understand that if, among other things, you dispose of shares of Common Stock granted to you pursuant to this Option within two years of the granting of this Option to you or within one year of the transfer of such shares to you, or you exercise this Option more than three months after termination of employment, then such shares will not qualify for the beneficial treatment which you might otherwise receive under Code §§ 421 and 422.

 

12.4.           You further understand that upon exercise of this Option you may be subject to alternative minimum tax as a result of such exercise.

 

12.5.           You and your transferees have no rights as a shareholder with respect to any shares of Common Stock covered by this Option until the date of the issuance of a stock certificate for such shares.

 

12.6.           The Corporation is not providing you with advice, warranties or representations regarding any of the legal or tax effects to you with respect to this grant.

 

12.7.           You acknowledge that you are familiar with the terms of the grant made to you under this Option and the Plan, that you have been encouraged by the Corporation to discuss the grant and the Plan with your own legal and tax advisers, and that you agree to be bound by the terms of the grant and the Plan.

 

13.         Withholding. You acknowledge that federal and state income and payroll tax may apply upon exercise of this Option. If the Corporation determines, in its sole discretion, that withholding is required, you agree that such withholding may be accomplished with respect to the cash compensation (if any) due to you from the Corporation. If withholding pursuant to the foregoing sentence is insufficient (in the sole judgment of the Corporation) to satisfy the full withholding obligation, you agree that you will pay over to the Corporation the amount of cash or, if acceptable to the Corporation in its sole discretion, property with a value necessary to satisfy such remaining withholding obligation on the date this Option is exercised or at a time thereafter specified in writing by the Corporation.

 

14.         Entire Agreement. This Option and the Plan constitute the entire agreement between the parties pertaining to the subject matter contained herein and they supersede all prior and contemporaneous agreements, representations, and understandings of the parties. No supplement, modification, or amendment of this Option shall be binding unless executed in writing by all of the parties. No waiver of any of the provisions of this Option shall be deemed or shall constitute a waiver of any other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.

 

15.         Governing Law. This Option shall be construed according to the laws of the State of Delaware and federal law, as applicable. Any dispute relating to this Option shall be brought and heard only in a court of competent jurisdiction in the State of Delaware.

  

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Dated as of the date first written above.

	
NUGEN HOLDINGS, INC.

	  
	
/s/ Michael Kleinman, MD

	
By: Michael Kleinman, M.D.

	  
	
Its: Compensation Committee Chairman

	 
	Date:  July 1, 2011

 

  

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The undersigned:

(a)           Acknowledges receipt of the foregoing Option, agrees to its terms and understands that all rights and liabilities with respect to this Option are set forth in this Option and the Plan; and

 

(b)           Acknowledges that as of the date of grant of this Option, it sets forth the entire understanding between the undersigned and the Corporation and its affiliates regarding the acquisition of the Common Stock of the Corporation covered by this Option and supersedes all prior oral and written agreements on that subject.

	
OPTIONEE:

	  
	
Name:  

	
/s/ Marshall G. Webb

	
Address:  

	
6110 Inwood Drive

	  	
Houston, Texas 77057

Date: July 1, 2011

  

6RELEASE AND SETTLEMENT

This Release and Settlement Agreement (this “Release”) is made and entered into as of this 30th day of June, 2011, between Alan Pritzker (“AP”) and NuGen Holdings, Inc. (the “Company”).

WITNESSETH:

WHEREAS, AP is currently the Chief Financial Officer and Secretary of the Company;

WHEREAS, the Company and AP have mutually consented to the termination of AP’s employment and affiliation with the Company, effective as of the date hereof;

NOW, THEREFORE, in consideration of the premises and mutual promises contained herein, and for other good and valuable consideration, the undersigned, intending to be legally bound by this Agreement, agrees as follows:

1.           Payment.   The Company acknowledges that as of the date hereof, $26,929.37 is due and payable to AP.

2.           Release by AP.

(a)           AP and his agents, representatives, heirs and direct and indirect affiliates and their respective successors and assigns (collectively, the “AP Releasors”) hereby irrevocably and unconditionally release, and forever discharge the Company and its employees, stockholders, officers, directors, agents, representatives and direct and indirect affiliates and their respective successors and assigns, and all persons, firms, corporations, and organizations acting on their behalf (collectively referred to as the “Company Related Persons”) of and from any and all actions, causes of actions, suits, debts, charges, demands, complaints, claims, administrative proceedings, liabilities, obligations, promises, agreements, controversies, damages and expenses (including but not limited to compensatory, punitive or liquidated damages, attorney’s fees and other costs and expenses incurred), of any kind or nature whatsoever, in law or equity, whether presently known or unknown (collectively, the “Claims”), which AP or any of the AP Releasors ever had, now have, or hereafter can, shall, or may have, for, upon, or by reason of any matter, cause, or thing whatsoever against any of the Company Related Persons.  Without limiting the foregoing, AP expressly acknowledges that his release hereunder is intended to include in its effect, without limitation, all Claims which have arisen and of which he knows, does not know, should have known, had reason to know, suspects to exist or might exist in his favor at the time of the signing, including, without limitation, any Claims relating directly or indirectly to the Company, and that this Agreement extinguishes any such Claim or Claims, including without limitation, the Employment Agreement dated as of January 1, 2010 between AP and the Company.  This release shall be binding upon each of AP and the AP Releasors and their respective partners, officers, directors, stockholders, employees, agents, representatives, personal representatives, heirs, assigns, successors and affiliates, and shall inure to the benefit of each Company and each of the respective Company Related Persons.

  

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(b)           AP acknowledges and agrees that he will never institute a Claim or sue the Company, or any of the Company Related Persons, concerning any Claim covered by Section 2(a) hereof.  AP acknowledges and agrees that if he or any of the AP Releasors violates this Agreement by suing the Company or any of the Company Related Persons, AP agrees that he will pay all costs and expenses of defending against the suit incurred by the Company or any of the Company Related Persons, including attorneys' fees and expenses.

3.           Release by the Company.

(a)           The Company and its agents, representatives, directors, officers, and direct and indirect affiliates and their respective successors and assigns (collectively, the “Company Releasors”) hereby irrevocably and unconditionally release, and forever discharge AP of and from any and all actions, causes of actions, suits, debts, charges, demands, complaints, claims, administrative proceedings, liabilities, obligations, promises, agreements, controversies, damages and expenses (including but not limited to compensatory, punitive or liquidated damages, attorney’s fees and other costs and expenses incurred), of any kind or nature whatsoever, in law or equity, whether presently known or unknown (collectively, the “Claims”), which the Company or any of the Company Releasors ever had, now have, or hereafter can, shall, or may have, for, upon, or by reason of any matter, cause, or thing whatsoever against AP, excluding the Excluded Claims (defined below).  Without limiting the foregoing, the Company expressly acknowledges that its release hereunder is intended to include in its effect, without limitation, all Claims which have arisen and of which he knows, does not know, should have known, had reason to know, suspects to exist or might exist in his favor at the time of the signing, and that this Agreement extinguishes any such Claim or Claims.  This release shall be binding upon each of Company and the Company Releasors and their respective partners, officers, directors, stockholders, employees, agents, representatives, personal representatives, heirs, assigns, successors and affiliates, and shall inure to the benefit of AP.

(b)           The Company and each of the Company Releasors acknowledges and agrees that none of them will ever institute a Claim or sue AP concerning any Claim covered by Section 3(a) hereof.  The Company acknowledges and agrees that if it violates this Agreement by suing AP, the Company agrees that it will pay all costs and expenses of defending against the suit incurred by AP, including attorneys' fees and expenses.

  

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4.           Excluded Claims.  Notwithstanding the foregoing, AP shall not be indemnified for any Excluded Claims. Excluded Claims shall include any Claims based directly or indirectly (i) on bad faith of AP, (ii) which are the result of active and deliberate dishonesty of AP, or (iii) on the fact that AP gained any financial profit or other advantage or if any payment by the Company pursuant to this Agreement is not permitted by applicable law.

5.           General Provisions.

(a)           This Agreement shall in all respects be interpreted, enforced and governed under the laws of the State of New York, without regard to conflict of law rules applied in such State.  The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties.

(b)           Should any part, term or provision of this Agreement be declared or be determined by any court to be illegal or invalid, the validity of the remaining parts, terms or provisions, including the release of all Claims, shall not be affected thereby and said illegal or invalid part, term or provision shall be modified by the court so as to be legal or, if not reasonably feasible, shall be deleted.  This Agreement sets forth the entire agreement concerning the subject matter herein, including, without limitation, the release of all Claims, and may not be modified except by a signed writing.

(c)           Each of the parties hereto acknowledges and agrees that (a) such party has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to accept the Agreement except for those set forth herein; (b) such party has been advised to consult an attorney before signing this Agreement, and that such party has had the opportunity to consult with an attorney; (c) such party does not feel that he or it is being coerced to sign this Agreement or that his or its signing would for any reason not be voluntary; and (d) such party has thoroughly reviewed and understands the effects of this Agreement before signing it.

(d)           This Agreement shall be binding upon each of parties hereto and their respective partners, officers, directors, stockholders, employees, agents, representatives, personal representatives, heirs, assigns, successors and affiliates, and shall inure to the benefit of the other party hereto.

  

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IN WITNESS WHEREOF, the undersigned has executed and delivered this Release on the day and year first written above.

	
/s/ Alan Pritzker

	
Alan Pritzker

	  
	
NUGEN HOLDINGS, INC.

	  
	
By:

	
/s/ Henry Toh

	
Name:  

	
Henry Toh

	
Title:

	
 Executive Vice President of

	  	
Corporate Development

  

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