EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment Agreement is entered
into as of December 31, 2008 (the “ Effective Date
”) by and between Vu1 Corporation, a California corporation
(the “ Company ”), and David T. Grieger (“
Executive ”).
1.
Employment . The Company hereby employs Executive
and Executive hereby accepts employment by the Company as its Chief
Executive Officer. The Executive shall perform such
executive and managerial duties and responsibilities customary to
his office and as are reasonably necessary to the operations of the
Company and as may be assigned to him from time to time by or under
authority of the Board of Directors of the Company (the “
Board ”). Executive shall report to the
Board. In furtherance of the foregoing, during the Term
and subject to the authority of the Board, the Executive shall have
responsibility for the general management and day to day operations
of the Company.
As a condition to the effectiveness of this
Agreement, concurrently with this Agreement, Executive shall
execute and deliver the Company Nondisclosure, Invention
Assignment, Noncompetition and Nonsolicitation Agreement in the
form attached hereto as Exhibit A , which is part of this
Agreement.
2.
Attention and Effort . The Executive's employment
by the Company shall be full-time and exclusive, and during the
Term, the Executive agrees that he will (a) devote his reasonable
business time and attention, his reasonable best efforts, and all
his skill and ability to promote the interests of the Company,
(b) carry out his duties in a competent and professional
manner; and (c) work with other employees of the Company in a
competent and professional manner; provided , however
, that Executive may devote reasonable periods of time to
(i) engaging in personal investment activities that do not
involve Executive providing any advice or services to the
businesses that compete with the Company or any of its
subsidiaries; and (ii) engaging in charitable or community
service activities, so long as none of the foregoing additional
activities materially interfere with Executive’s duties under
this Agreement.
3.
Term . Unless earlier terminated by either party,
the initial term of this Agreement shall be from the date hereof
until December 31, 2010. No later than August 30, 2010,
the Board and the Executive will initiate discussions for the
extension of the term and mutually acceptable modifications to
Section 4, including additional appropriate stock options
compensation and performance bonuses.
4.
Compensation . During the term of this Agreement,
the Company shall pay or cause to be paid to Executive, and
Executive shall accept in exchange for the services rendered
hereunder by him, the following compensation:
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Base
Salary . Executive’s compensation
shall consist of, in part, an annual base salary (the “
Base Salary ”) of $240,000 before all customary
payroll deductions. The Base Salary shall be paid to
Executive in substantially equal installments and at the same
intervals as other executives of the Company are
paid. At the end of each calendar year (or sooner if
determined by the Board), Executive’s total compensation
package payable to Executive under this Section 4 (including
Executive’s Base Salary, bonuses and option grants) shall be
reviewed by the Board and may be increased as determined by the
Board in its sole discretion. In no event will changes
be made to Sections 4(b) or 4(c).
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Stock
Compensation . Executive shall be granted 400,000
shares of common stock from the 2007 Stock Compensation Plan as of
the date of the agreement set forth above, with the exercise price
equal to the closing market price of the common stock on the grant
date. The grant is fully vested upon
issuance.
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Option
Compensation. Executive
shall be granted an option to purchase 600,000 shares of common
stock from the 2007 Stock Compensation Plan as of the date of the
agreement set forth above, with the exercise price equal to the
closing market price of the common stock on the grant
date. The options shall have a life of 10 years and will
vest in equal monthly amounts over the 12 months from the date of
grant, which is December 31, 2008.
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Bonus
Compensation. Executive
shall be eligible for a bonus of up to 100% of Base Salary payable
in options to purchase common stock of the Company at the
discretion of the Board. If the term of this Agreement
is extended beyond December 31, 2010, then the bonus will be
payable in a combination of cash and options.
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Performance
Bonus . Executive shall be granted an
option to purchase 1,000,000 shares of common stock from the 2007
Stock Compensation Plan as of the date of the agreement set forth
above, with the exercise price equal to the closing market price of
the common stock on the grant date, which is December 31,
2008. The options shall have a life of 10 years and will
vest in equal monthly amounts beginning January 1, 2010 and will be
fully vested on December 31, 2010. Performance bonuses will also be
established for any extension of the term of this
Agreement.
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5.
Benefits .
(a)
Health Benefits . During the term of this
Agreement, the Company shall provide Executive with the health
insurance provided to other senior executives and Executive will be
entitled to participate, subject to and in accordance with
applicable eligibility requirements, in fringe benefit programs as
shall be provided from time to time by, to the extent required,
action of the Board (or any person or committee appointed by the
Board to determine fringe benefit programs).
(b)
Business Expenses . Executive shall be reimbursed
for all reasonable business expenses according to the
Company’s standard practices for expense
reimbursement. The Executive, as a condition precedent
to obtaining such payment or reimbursement, shall provide to the
Company any and all statements, bills or receipts evidencing the
travel or out-of-pocket expenses for which the Executive seeks
payment or reimbursement, and any other information or materials,
as the Company may from time to time reasonably request.
(c)
Vacation . During each calendar year for the term
of this Agreement, Executive shall be entitled to 20 days paid
vacation. Executive agrees that no more than 10 days vacation will
be used consecutively without prior consent of the Company. Unused
vacation time may be accrued during the term of this Agreement, but
in no event shall Executive accrue and carry over more than 10 days
of paid vacation. Any unused vacation time above the
amount that may be carried over is forfeited.
6. Payments
and Benefits Upon Termination.
(a)
Voluntary Resignation by Employee or Termination for Cause by
the Company . Following termination of
Executive’s employment by Executive or by the Company for
Cause (as defined below), Company shall pay Executive salary due
and owing as of the Executive’s last day of Employment, plus
any accrued but unused vacation, less standard deductions, and
shall reimburse Executive for any outstanding
expenses. If Executive voluntarily resigns, dies, is
Disabled or is terminated by the Company for Cause, then Executive
will not be entitled to any compensation provided by Section
6(b).
(b)
Termination Without Cause or Following a Change of Control
. Upon termination of Executive’s employment by
the Company (i) for any reason other than Cause (as defined
below) or (ii) on or within 90 days after a Change of Control,
and in each case provided that the Executive signs a release of all
claims or potential claims against the Company, the Company shall
pay Executive six months of Executive’s annual Base Salary in
effect immediately prior to the date of Executive’s
termination (the “ Cash Severance ”), payable on
the Company’s regularly scheduled pay day(s). All
payments under this Section 6 are subject to applicable
federal and state payroll withholding or other applicable
taxes. In addition, the Company will reimburse Executive
for 6 months for each year or portion thereof of service with the
Company for any COBRA related payments made by Executive beginning
with the first month of eligible COBRA benefits available to
Executive for a maximum of 12 months. In addition,
any and all stock options in Section 4 or granted subsequent to
this Employment Agreement that are not vested as of the
date of termination shall vest immediately and become exercisable
effective with the date of termination.
(c)
“Cause” Definition . For purposes of
this Agreement, “ Cause ” means, in the
Company’s sole determination, the occurrence of any of the
following: (i) the Executive's failure or refusal
to perform, or Executive’s gross misconduct or negligence in
the performance of, his duties and responsibilities as Chief
Executive Officer, or the breach by Executive of any provision of
this Agreement, but in each case, any occurrence of
“Cause” under this subsection 6.(c)(i) will exist only
if Executive has received first written notice of the alleged
misconduct, negligence, or breach and has failed to perform the
duties or responsibilities or cure the alleged breach within the
30-day period following Executive’s receipt of the notice;
(ii) violation by Executive of a state or federal law, rule or
regulation involving the commission of a crime against the Company
(including violation of any statutory or common law duty of loyalty
to the Company) or that is potentially materially injurious to the
Company, or any felony or any crime involving moral turpitude,
dishonesty or theft; (iii) any act of misconduct, theft,
misappropriation of Company property, moral turpitude, fraud,
intentional misrepresentation, bad faith or dishonesty by
Executive; (iv) any act by Executive that substantially
materially injures or could reasonably be expected to substantially
materially injure the business or business relationships of the
Company; or (vi) Executive’s in
