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.

 

 
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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:

 
(a)
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).

 
(b)
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.

 
(c)
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.

 
(d)
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.

 
(e)
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.

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).

 

 
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(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.

 

 
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(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 inability
to perform his duties because of sickness or injury for more than 30 consecutive
days.

(d)           “Change of Control” Definition.  For purposes of this Agreement,
“Change of Control” shall mean the occurrence of any of the following
events:  (i) the consummation of the sale or disposition by the Company of all
or substantially all the Company’s assets in one or a series of related
transactions; or (ii) the consummation of a merger or consolidation of the
Company or share exchange involving any other corporation, other than (A) a
merger, consolidation or share exchange which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
(B) a merger effected solely for purposes of changing the domicile of the
Company.

7.           Governing Law; Attorneys’ Fees.  This Agreement shall be governed
by and construed in accordance with the laws of the state of Washington
applicable to contracts made and to be performed there.  The substantially
prevailing party in any litigation shall be entitled to recover from the other
party all costs and expenses, including reasonable attorneys’ fees and
disbursements, in connection with such litigation, arbitration or similar
proceeding.

 

 
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8.           Amendments; Waiver; Cure.  No amendment, waiver or modification in
whole or in part of this Agreement, or any term or condition of this Agreement,
shall be effective unless in writing and duly signed by the party sought to be
bound.  Any waiver of any breach of any provision hereof or any right or power
by any party on one occasion shall not be construed as a waiver of, or a bar to,
the exercise of such right or power on any other occasion or as a waiver of any
subsequent breach.

9.           Binding Effect; Successors.  This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the Company and Executive and
their respective heirs, legal representatives, successors and assigns.

EXECUTED by the parties in Seattle, Washington as of the Effective Date.

  EXECUTIVE:          
 
By:
/s/ David T. Grieger       David T. Grieger                  

 

 
COMPANY:
 
VU1 CORPORATION
         
 
By:
/s/ Mark Weber       Name:Mark Weber        Title: Director          

 

 

 
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Exhibit A

Form of Executive Nondisclosure, Nonsolicitation And
Invention Assignment Agreement

This Executive Nondisclosure, Nonsolicitation and Invention Assignment Agreement
Nondisclosure and Invention Assignment Agreement (“Agreement”) is entered into
by and between the individual referenced on the signature page (“Executive”) and
Vu1 Corporation, a California corporation (the “Company”).

The parties agree as follows:

1.           Confidentiality.  Executive recognizes that during the course of
employment with the Company, Executive will have access to certain Confidential
Information (as defined below) relating to the business of the
Company.  Executive agrees that all Confidential Information shall remain the
exclusive property of the Company.

At all times during or following Executive’s employment with the Company,
Executive agrees not to disclose to anyone outside the Company, nor to use for
any purpose other than Executive’s work for the Company, (i) any Confidential
Information or (ii) any information the Company has received from others which
Executive knows the Company is obligated to treat as confidential or
proprietary.

2.           Definition of Confidential Information.  “Confidential Information”
means any information or material in which the Company has rights, whether or
not owned or developed by the Company, which is not generally known other than
by the Company, and which Executive may obtain knowledge of through or as a
result of the employment relationship established with the Company.

Without limiting the foregoing, Confidential Information includes:  (a) any and
all information in which the Company has rights relating to the invention,
design and development of the Company’s products and any other proprietary
technical information of the Company that is not generally known other than by
the Company; and (b) any and all business plans, marketing techniques and plans,
financial materials, cost data, customer lists, vendor lists, pricing policies
and other proprietary business information of the Company that is not generally
known other than by the Company.

Confidential Information will not include information that (i) Executive
lawfully obtains from any third party who has lawfully obtained such
information; (ii) is generally available to the public or is later published or
generally disclosed to the public by the Company; or (iii) was already known to
or in possession of Executive prior to disclosure by the Company.

 

 
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3.           Inventions, Copyrights and Patents.  The Company owns all
Inventions and Works (as defined below) that Executive makes, conceives,
develops, discovers, reduces to practice or fixes in a tangible medium of
expression, alone or with others, either (a) during the term of Executive’s
employment by the Company (whether or not during working hours), or (b) within
12 months after Executive’s employment ends if the Invention or Work is derived
from or relates to any work Executive performed for the Company or involves the
use or assistance of the Company’s facilities, materials, personnel or
Confidential Information.  The Company also owns all Inventions and Works that
Executive brings to the Company that are used in the course of the Company’s
business or that are incorporated into any Inventions or Works that belong to
the Company.

Executive will promptly disclose to the Company, hold in trust for the Company’s
sole benefit, and assign to the Company and hereby assigns exclusively to the
Company all Executive’s right, title, and interest in and to any and all
Inventions and Works.  Executive hereby waives any and all claims of any nature
whatsoever that Executive now or hereafter may have for infringement of any
patent resulting from any patent applications for any Inventions.  Executive
agrees that all Works shall be considered “works made for hire” so that the
Company will be considered the author of the Works under the federal copyright
laws.  At the Company’s direction and expense Executive will execute all
documents and take all actions necessary or convenient for the Company to give
effect to the assignment to, and vesting of ownership in, the Company of all
Inventions and Works.  The Company shall have full control over all applications
for patents or other legal protection of Inventions and Works.

“Inventions” means discoveries, developments, concepts, ideas, improvements to
existing technology, processes, procedures, machines, products, compositions of
matter, formulae, algorithms, software, computer programs and techniques, and
all other matters ordinarily intended by the word “invention,” whether or not
patentable or copyrightable, including all copyrights (including renewal
rights), patent rights and trade secret rights, vested and
contingent.  “Inventions” also includes all records and expressions of those
matters.  “Works” means original works of authorship, including interim work
product, modifications and derivative works, and all similar matter, whether or
not copyrightable.

Except as expressly provided herein, “Inventions” or “Works” shall not include
inventions or works for which no equipment, supplies, facilities or trade secret
information of the Company was used and which were developed entirely on
Executive’s own time, unless (a) the invention or work relates directly to the
Company’s actual or demonstrably anticipated business, or (b) the invention or
work derives from or relates to any work Executive performed for the Company.

4.           Reverse Engineering.  Executive agrees that Executive will not
engage, nor cause any other person, firm, corporation or other entity to engage,
in the reproduction of Confidential Information, Inventions or Works through the
techniques of “reverse engineering” as described in Title 17, United States
Code, Section 906, as such statute may be amended from time to time.

5.           Return of Materials.  At the time Executive leaves the employ of
the Company, or sooner at the request of the Company, Executive shall return all
papers, drawings, notes, memoranda, manuals, specifications, designs, devices,
documents, diskettes, tapes, prototypes and products, and any other material on
any media containing or disclosing any confidential or proprietary technical or
business information, except for any documents or other materials received as a
shareholder of the Company, this Agreement, the Executive Employment Agreement
and any other Company documents describing or setting forth Executive’s rights
to compensation or benefits from the Company.  Executive shall also return any
keys, pass cards, identification cards, or other property belonging to the
Company.

 

 
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6.           Other Employment While Employed by the Company.  While employed by
the Company, Executive shall not do work that competes with or relates to any of
the Company’s products or activities without first obtaining the Company’s
written permission.  Any business opportunities related to the Company’s
business that Executive learns of or obtains while employed by the Company
(whether or not during working hours) belong to the Company, and Executive shall
pursue them only for the Company’s benefit.

7.           Disclosure of New Work.  Before Executive undertakes any work for
any other party during employment by the Company or within 12 months after
employment ends that will involve subject matter related to the Company’s
activities, Executive shall fully disclose the proposed work to the Company.

8.           Nonsolicitation.  So long as Executive is employed by the Company
and for 12 months after employment ends, regardless of the reason it ends,
Executive shall not directly or indirectly (a) solicit any employee or executive
to leave his or her employment with the Company or (b) solicit business from
clients, customers or account holders of the Company that is substantially
similar to the business then conducted by the Company.  For purposes of the
foregoing, Executive shall not do any of the following:  (i) disclose to any
third party the names, backgrounds or qualifications of any Company employees or
executives or otherwise identify them as potential candidates for employment;
(ii) personally or through any other person, approach, recruit or otherwise
solicit employees or executives of the Company to work for any other employer;
(iii) participate in any pre-employment interviews with any person who was
employed by the Company during the term of this Agreement; (iv) disclose to any
third party the names, background or any information about any Company clients,
customers or account holders, or otherwise identify them as potential sources of
business; (v) personally or through any other person, approach or otherwise
solicit clients, customers or account holders of the Company as potential
sources of business.  The term “solicit” or “solicitation” or the like does not
include general advertisements or other solicitations to the general public.

9.           No Conflicting Agreements.  Except for obligations to former
employers, Executive is not a party to any agreements, such as confidentiality
agreements, or assignment of invention agreements, with any other party except
for those disclosed to the Company in writing prior to the execution of this
Agreement.  No agreement with a former employer prohibits Executive from being
employed by the Company.

10.           Trade Secrets.  Executive acknowledges that disclosure or use of a
trade secret without express or implied consent violates the Uniform Trade
Secrets Act. RCW 19.108.010. Executive acknowledges that the Company is not
seeking to obtain such trade secrets and agrees not to improperly disclose trade
secrets to the Company.

11.           Intentionally Blank.

12.           Injunctive Relief.  Executive acknowledges that any violation of
this Agreement by Executive will cause irreparable injury to the Company and the
Company shall be entitled to extraordinary relief in court, including, but not
limited to, temporary restraining orders, preliminary injunctions, and permanent
injunctions, without the necessity of posting bond or security. Executive
consents to the Company notifying anyone to whom Executive may provide services
of the existence and terms of this Agreement.

 

 
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13.           Severability.  To the extent that any provision of this Agreement
shall be determined to be invalid or unenforceable, such provision shall be
deleted from this Agreement, and the validity and enforceability of the
remainder of this Agreement shall be unaffected.  In furtherance of, and not in
limitation of, the foregoing, it is expressly agreed that, should the duration
or geographical extent of, or the business activities covered by this Agreement
be finally determined to be in excess of that which is valid or enforceable
under applicable law, such provision shall be construed to cover only that
geography, duration, extent, or activities that may validly or enforceably be
covered. Executive acknowledges the uncertainty of the law in this respect and
expressly stipulates that this Agreement shall be construed in a manner which
renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.

14.           Miscellaneous.  The substantially prevailing party in any
litigation brought under the terms of this Agreement shall be entitled to an
award of reasonable costs and expenses of litigation and any appeal, including
reasonable attorneys’ fees.  This Agreement shall be governed by the laws of the
State of Washington.  Executive’s obligations under this Agreement supplement
and do not limit other obligations Executive has to the Company, including
without limitation under the law of trade secrets.  This Agreement shall be
enforceable regardless of any claim Executive may have against the Company.  If
any provision of this Agreement is held to be unenforceable as written, it shall
be enforced to the maximum extent allowed by applicable law.  If any provision
of this Agreement is void or is so declared, such provision shall be severed
from this Agreement, which shall otherwise remain in full force and
effect.  This Agreement shall survive termination of Executive’s employment,
however caused.  This Agreement is the final and complete expression of the
parties’ agreement on these subjects, and may be amended only in a writing
signed by the Company and Executive.

DATED this 31st day of December, 2008.
 

  EXECUTIVE:          
 
By:
/s/ David T. Grieger       David T. Grieger                  

 

 
COMPANY:
 
VU1 CORPORATION
         
 
By:
/s/ Mark Weber       Name:Mark Weber        Title: Director          

 

 

 
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