EMPLOYMENT AGREEMENT
Exhibit
10.5
This
EMPLOYMENT AGREEMENT (this “Agreement”),
dated as of October 21, 2008 by and between Xxxxxxx Xxxx, (“Executive”),
and VIASPACE Green Energy Inc. (“VGE”) a British Virgin
Islands corporation having its principal office at 000 X. Xxxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 .
WHEREAS,
VGE and Executive are parties to a Securities Purchase Agreement dated as of
October 21, 2008 (“Purchase
Agreement”), and all capitalized terms not defined herein have the
meanings given in the Purchase Agreement;
WHEREAS,
VGE believes that Executive provides unique advisory and management services for
VGE and wishes to retain the continued services of Executive as its Chief
Financial Officer, Treasurer and Secretary;
WHEREAS,
VGE and Executive have reached an understanding with respect to Executive’s
employment with VGE for a two year period commencing as of the date of this
Agreement; and
WHEREAS,
VGE and Executive desire to evidence their agreement in writing and to provide
for the employment of Executive by VGE on the terms set forth
herein.
NOW,
THEREFORE, IN CONSIDERATION of the foregoing facts, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
parties hereby agree as follows:
1. Employment, Duties and
Acceptance.
1.1 Effective
as of the date of this Agreement, VGE hereby agrees to the employment of
Executive as its Chief Financial Officer, Treasurer and Secretary, and Executive
hereby accepts such employment on the terms and conditions contained in this
Agreement. During the term of this Agreement, Executive shall make
himself available to VGE and to any of its subsidiaries or affiliates as
directed to pursue the business of VGE subject to the supervision and direction
of the Chief Executive Officer of VGE.
1.2 VGE
may assign Executive such general management and supervisory responsibilities
and executive duties for VGE as are appropriate and commensurate with
Executive’s position as Chief Financial Officer, Treasurer and Secretary of
VGE.
1.3 Executive
accepts such employment and agrees to devote substantially all of his business
time, energies and attention to the performance of his duties hereunder and as
an executive officer or director of subsidiaries of VGE. Nothing
herein shall be construed as preventing Executive from making and supervising
investments on a personal or family basis (including trusts, funds and
investment entities in which Executive or members of his family have an
interest); provided, however, that these activities do not materially interfere
with the performance of his duties hereunder or violate the provisions of
Section 4.4 hereof.
2. Compensation and
Benefits.
2.1 VGE
shall pay to Executive a salary at an annual base rate of not less than $180,000
for the term hereof, beginning in the seventh (7th) month
after the date of this Agreement, not less frequently than twice per
month.
2.2 VGE
shall also pay to Executive such bonuses as may be determined from time to time
by the VGE Board of Directors. In determining the annual bonus to be
paid to Executive, the VGE Board may, among other factors they believe to be
appropriate, consider, and give varying degrees of importance to, Executive’s
contribution to the following:
(a) achievement
by VGE of specific identified targets selected by the CEO and agreed to by
Executive from time to time, including without limitation targets based on
increased revenue and profits from the artwork business and the grass
business;
(b) the
attraction and retention of key executive personnel by VGE;
(c) satisfaction
of VGE’s capital requirements;
(d) the
establishment and achievement of VGE goals;
(e) growth
in VGE’s perceived value; and
(f) such
other criteria as the VGE Board deems to be relevant.
2.3 Executive
shall be entitled to such insurance and other benefits if offered by VGE,
including, among others, medical and dental, subject to applicable waiting
periods and other conditions which may be generally applicable.
2.4 Executive
shall be entitled to 15 days of paid time off in each year beginning on the date
of employment.
2.5 VGE
will pay or reimburse Executive for all reasonable or otherwise duly authorized
transportation, hotel and other expenses incurred by Executive on business trips
(including coach class air travel) and for all other ordinary and reasonable
out-of-pocket expenses actually incurred by him in the conduct of the business
of VGE against itemized receipts submitted with respect to any such
expenses.
3. Term and
Termination.
3.1 The
initial term of this Agreement commences as of the date of this Agreement and,
unless sooner terminated as herein provided, shall continue for two (2)
years. The initial term may be extended by Executive for two
additional one-year periods.
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3.2 If
Executive dies during the term of this Agreement, this Agreement shall thereupon
terminate, except that VGE shall pay to the legal representative of Executive’s
estate the base salary due Executive at the time of death, including previously
accrued but unpaid bonuses, expense reimbursements and accrued but unused paid
time off pay.
3.3 If
Executive shall be rendered incapable by an incapacitating illness or disability
(either physical or mental) of complying with the terms, provisions and
conditions hereof on his part to be performed for a period in excess of 180
consecutive days during any consecutive twelve (12) month period, then VGE, at
its option, may terminate this Agreement by written notice to
Executive. VGE shall pay to Executive all amounts owing to Executive
at the time of termination, including for previously accrued but unpaid bonuses,
expense reimbursements and accrued but unused vacation pay.
3.4 VGE,
by notice to Executive, may terminate this Agreement for Cause. As
used herein, “Cause”
means (a) the refusal in bad faith by Executive to carry out specific written
directions of the Board, (b) intentional fraud or dishonest action by Executive
in his relations with VGE, (“dishonest” for these purposes shall mean
Executive’s knowingly making of a material misstatement to the Board for the
purpose of obtaining direct personal benefit); (c) the conviction of Executive
of any crime involving an act of significant moral turpitude; (d) any act (or
failure to act), knowingly committed by Executive, that is in violation of
written VGE policies, this Agreement or VGE’s written agreements with third
parties and that is materially damaging to the business or reputation of VGE as
determined in good faith by the CEO. Notwithstanding the foregoing,
no Cause for termination shall be deemed to exist with respect to Executive’s
acts described in clause (a) or (b) or (d) above, unless the CEO shall have
given written notice to Executive (after five (5) days advance written notice to
Executive and a reasonable opportunity to Executive to present his views with
respect to the existence of Cause), specifying the Cause with particularity and,
within twenty (20) business days after such notice, Executive shall not have
disputed the CEO’s determination or in reasonably good faith taken action to
cure or eliminate prospectively the problem or thing giving rise to such
Cause.
3.5 Executive,
by notice to VGE, may terminate this Agreement if a Good Reason
exists. For purposes of this Agreement, “Good
Reason” means the occurrence of any of the following circumstances
without Executive’s prior express written consent: (a) a material adverse change
in the nature of Executive’s title, duties or responsibilities with VGE that
represents a demotion from his title, duties or responsibilities as in effect
immediately prior to such change; (b) a material breach of this Agreement by
VGE; (c) a failure by VGE to make any payment to Executive when due, unless the
payment is not material and is being contested by VGE, in good
faith.
3.6 If
Executive’s employment with VGE is terminated without Cause or for Good Reason,
Executive shall be entitled to receive all salary and benefits due to Executive
during the term of this agreement, and all Executive’s stock options, if any,
shall vest on the date of termination.
Notwithstanding
the foregoing, no Good Reason shall be deemed to exist with respect to VGE’s
acts described in clauses (a), (b) or (c) above, unless Executive shall have
given written notice to VGE specifying the Good Reason with reasonable
particularity and, within twenty (20) business days after such notice, VGE shall
not have cured or eliminated the problem or thing giving rise to such Good
Reason.
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3.7 If
the Second Closing fails to occur by the Second Closing Date, this Agreement
shall automatically terminate and neither party shall owe any obligations
whatsoever to the other party under this Agreement, provided that VGE shall
remain obligated under the provisions of Section 5.2 and shall pay to Executive
all amounts owing to Executive at the time of termination, including for
previously accrued but unpaid bonuses and expense reimbursements.
4. Protection of Confidential
Information; Non-Competition; Corporate Opportunities.
4.1 Executive
acknowledges that:
(a) As
a result of his employment with VGE, Executive will obtain secret and
confidential information concerning the business of VGE and its subsidiaries and
affiliates (referred to collectively in this Article 4 as VGE), including,
without limitation, financial information, designs and other proprietary rights,
trade secrets and know-how, customers and sources (“Confidential
Information”).
(b) Any
business opportunities of which Executive becomes aware related to the grass
business described in Section 3.17(e) of the Purchase Agreement (“Grass
Business”) or the framed artwork business shall be deemed corporate
opportunities of VGE and Executive shall refer all such business opportunities
to VGE.
(c) Pursuant
to the Purchase Agreement, VGE is purchasing companies engaged in the Grass
Business and the framed artwork business (each a “Competitive
Business”).
(d) VGE
will suffer substantial damage which will be difficult to compute if, during the
period of his employment with VGE or thereafter, Executive should enter into a
Competitive Business with VGE or divulge Confidential Information.
(e) The
provisions of this Agreement are reasonable and necessary for the protection of
the business of VGE.
4.2 Executive
agrees that he will not at any time, either during the term of this Agreement or
any time thereafter, divulge to any person or entity any Confidential
Information obtained or learned by him as a result of his employment with VGE,
except (i) in the course of performing his duties hereunder, (ii) to
the extent that any such information is in the public domain other than as a
result of Executive’s breach of any of his obligations hereunder,
(iii) where required to be disclosed by court order, subpoena or other
government process or (iv) if such disclosure is made without Executive’s
knowing intent to cause material harm to VGE. If Executive shall be
required to make disclosure pursuant to the provisions of clause (iii) of the
preceding sentence, Executive promptly, but in no event more than 72 hours after
learning of such subpoena, court order, or other government process, shall
notify, by personal delivery or by electronic means, confirmed by mail, VGE and,
at VGE’s expense, Executive shall: (a) take reasonably necessary and lawful
steps required by VGE to defend against the enforcement of such subpoena, court
order or other government process, and (b) permit VGE to intervene and
participate with counsel of its choice in any proceeding relating to the
enforcement thereof.
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4.3 Upon
termination of his employment with VGE, Executive will promptly deliver to VGE
all memoranda, notes, records, reports, manuals, drawings, blue-prints and other
documents (and all copies thereof) relating to the business of VGE and all
property associated therewith, which he may then possess or have under his
control; provided, however, that Executive shall be entitled to retain one copy
of such documents for his personal use and records.
4.4 During
the period commencing upon the date of this Agreement and terminating
three years after termination of employment, Executive, without the prior
written permission of VGE, shall not for any reason whatsoever, (i) enter into
the employment of or render any services to any person, firm or corporation
engaged in any business which is in the Competitive Business; (ii) engage in any
Competitive Business as an individual, partner, shareholder, creditor, director,
officer, principal, agent, employee, trustee consultant, advisor or in any other
relationship or capacity; (iii) employ, or have or cause any other person or
entity to employ, any person who was employed by VGE at the time of termination
of Executive’s employment by VGE (other than Executive’s personal secretary and
assistant); or (iv) solicit, interfere with, or endeavor to entice away from
VGE, for the benefit of a Competitive Business, any of its
customers. Notwithstanding the foregoing, (i) Executive shall not be
precluded from investing and managing the investment of, his or his family’s
assets in the securities of any corporation or other business entity which is
engaged in a Competitive Business if such securities are traded on a national
stock exchange or in the over-the-counter market and if such investment does not
result in his beneficially owning or otherwise controlling or managing, at any
time, more than 2% of any class of the publicly-traded equity securities of such
Competitive Business.
4.5 If
Executive commits a breach of any of the provisions of Sections 4.2 or 4.4, VGE
shall have the right:
(a) to
have the provisions of this Agreement specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed by Executive that the
services being rendered hereunder to VGE are of a special, unique and
extraordinary character and that any breach or threatened breach will cause
irreparable injury to VGE and that money damages will not provide an adequate
remedy to VGE;
(b) to
require Executive to account for and pay over to VGE all monetary damages
awarded in a non-appealable judgment by a court of law of competent jurisdiction
as the result of any actions constituting a breach of any of the provisions of
Section 4.2 or 4.4, and Executive hereby agrees to account for and pay over such
damages to VGE (up to the maximum of all payments made under the Agreement);
and
(c) to
not perform any obligation owed to Executive under this Agreement, to the
fullest extent permitted by law. VGE shall also have the right, to the fullest
extent permitted by law, to adjust any amount due and owing or to be due and
owing to Executive, whether under this Agreement or any other agreement between
VGE and Executive in order to satisfy any losses to VGE as a result of
Executive’s breach.
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4.6 If
Executive shall violate any covenant contained in Section 4.4, the duration of
such covenant so violated shall be automatically extended for a period of time
equal to the period of such violation.
4.7 If
any provision of Sections 4.2 or 4.4 is held to be unenforceable because of the
scope, duration or area of its applicability, the tribunal making such
determination shall not have the power to modify such scope, duration, or area,
or all of them and such provision or provisions shall be void ab
initio.
5. Miscellaneous
Provisions.
5.1 All
notices provided for in this Agreement shall be in writing, and shall be deemed
to have been duly given when delivered personally to the party to receive the
same, when transmitted by electronic means, or when mailed first class postage
prepared, by certified mail, return receipt requested, addressed to the party to
receive the same at his or its address set forth below, or such other address as
the party to receive the same shall have specified by written notice given in
the manner provided for in this Section 5.1. All notices shall be
deemed to have been given as of the date of personal delivery, transmittal or
mailing thereof.
If to
Executive Xxxxxxx
Xxxx
c/o
VIASPACE INC.
000 X.
Xxxxxxxx Xx.
Xxxxxxxx,
Xxxxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile: (000)
000-0000
Email:
xxxx@xxxxxxxx.xxx
If to
VGE:
VIASPACE Green Energy Inc.
c/o
VIASPACE INC.
000 X.
Xxxxxxxx Xx.
Xxxxxxxx,
Xxxxxxxxxx 00000
Attention: Xxxx
Xxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Email: Xxxxxxxx@xxxxxxxx.xxx
5.2 VGE,
shall to the fullest extent permitted by law, indemnify Executive for any
liability, damages, losses, costs and expenses arising out of alleged or actual
claims (collectively, “Claims”)
made against Executive for any actions or omissions as an officer and/or
director of VGE or its subsidiary. To the extent that VGE obtains
director and officers insurance coverage for any period in which Executive was
an officer, director or consultant to VGE, Executive shall be a named insured
and shall be entitled to coverage thereunder.
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5.3 The
provisions of Article 4 and Section 5.2 and any provisions relating to payments
owed to Executive after termination of employment shall survive termination of
this Agreement for any reason.
5.4 This
Agreement sets forth the entire agreement of the parties relating to the
employment of Executive and are intended to supersede all prior negotiations,
understandings and agreements. No provisions of this Agreement may be
waived or changed except by a writing by the party against whom such waiver or
change is sought to be enforced. The failure of any party to require
performance of any provision hereof or thereof shall in no manner affect the
right at a later time to enforce such provision.
5.5 All
questions with respect to the construction of this Agreement, and the rights and
obligations of the parties hereunder, shall be determined in accordance with the
laws of California applicable to agreements made and to be performed entirely in
California.
5.6 This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of VGE. This Agreement shall not be assignable by Executive,
but shall inure to the benefit of and be binding upon Executive’s heirs and
legal representatives.
5.7 Should
any provision of this Agreement become legally unenforceable, no other provision
of this Agreement shall be affected, and this Agreement shall continue as if the
Agreement had been executed absent the unenforceable provision.
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IN
WITNESS WHEREOF, the parties have executed this Employment Agreement as of the
date first above written.
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“VGE”
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“EXECUTIVE”
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/s/
XXXXXXX
XXXX
XXXXXXX
XXXX
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By:
/s/ XXXX
XXXXXXXX
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Title CEO
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