Document:

Exhibit 10.1 Agency Agreement

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

Exhibit 10.1

Agency Agreement

This agreement ("Agreement") is entered into on this 1st day of January 2012 (“the Effective Date”), Fuel Doctor Holdings, Inc., located at 23961 Craftsman Road, #L, Calabasas, California 91302 (the “Company”), and Ma Song Hai/Fuel Doctor Automobile Care China Beijing Co Huai rou zhong lu 36# 3rd Floor No.3913 Beijing China 101400 (the “Agent”).  

Whereas, the Company engages in manufacturing, marketing and distribution of a fuel saving component, which reduces the utilization of fuel known as “Fuel Doctor” (the “Product(s)”); 

Whereas, the Agent is in the business of distribution and marketing of such product and represents to the Company that it has the experience, knowledge, know-how, marketing connections and ability to market and distribute the Products to potential clients in Mainland China, Hong Kong Province, and Macao Province (the “Territory”); and 

Whereas, the Company desires to appoint the Agent as its exclusive representative for the purposes of marketing and distribution of the Product(s) in the Territory and Agent wishes to accept such appointment.  Therefore, in consideration of the following conditions set forth in this Agreement, the parties hereto agree to the following.

1.

Agency Grant

1.1. 

Grant Of License. Subject to the terms and conditions set forth herein and for the duration thereof and in consideration of Agent’s agreement to pay the Company the fees and payments hereunder, the Company hereby grants the Agent and the Agent hereby accepts a right and license to sell, market, and distribute the Product in the Territory and to make use of the trademark “Fuel Doctor” (“Marks”). 

Serial Number: 77-720,259

Mark: FUEL DOCTOR E F(STYLIZED/DESIGN)

International Class(es): 009

Attorney Reference Number: 5412/2.1

Serial Number: 85-040,795

Mark: FUEL DOCTOR(STANDARD CHARACTER MARK)

International Class(es): 035,037

1.2.  

Reserved Rights. All rights not specifically granted to the Agent hereunder are reserved by the Company. Except as expressly provided hereunder in connection with the sales, marketing and distribution of the Product, the Company does not convey any Intellectual Property to the Agent hereunder. Without derogating from any of the foregoing and except as provided herein, the license granted to the Agent in this Agreement shall not enable the Agent to, and the Agent shall not: (i) attempt to discover, obtain, revise, modify or enhance the components of the Product, and not attempt to decompile, disassemble, or otherwise reverse engineer the Product or enable any third party to do the same; and (ii) sell, license (or sub-license), lease, assign, transfer, pledge, or share the rights pursuant to this Agreement with/to any third party.  Except as provided herein, this Agreement shall not be construed, defined, interpreted or understood as limiting or binding the Company, in any manner whatsoever, to promote, advertise, market, distribute, sell, lease or license the Product, itself and/or via the assistance of any third party. The Agent acknowledges that the Intellectual Property in connection with the Product is the property of the Company and the Agent has no rights, express or implied, in the foregoing except those expressly granted by this Agreement and the Product shall not be used by the Agent for any other purpose, including, without limiting the generality of the foregoing, for any commercial or business purposes.

1.3. 

Exclusivity 

1.3.1. 

Subject to securing agreed minimum purchase orders as set forth in Appendix 1, the Agent will have an exclusive license to sell and market the Product in the Territory (for quantities see attached (Appendix 1). The agent must meet these minimum quantities in order to keep the exclusive distribution rights in the territory. The Company must produce and timely deliver the above quantities, in accordance with the provisions of this Agreement. In the event that the Agent shall meet the aforementioned minimum quantities, the Company agrees that any Product(s) orders or Product(s) inquiries that it may receive with respect to placements within the Territory shall be transmitted to Agent. The Company will not sell Products to anyone in the Territory, except as set forth herein.  A breach of this provision is considered material.

1.3.2. 

For the avoidance of any doubt, the minimum quantities stated in section 1.3.1 above, are referring to units actually ordered by the Agent, in accordance with the terms and provisions of this Agreement.

1.3.3.

It is hereby agreed that in the event that the Agent shall secure purchase orders of the Product in a quantity that exceeds the mentioned above minimum quantities in a specific annum, than the minimum quantity demand in the next annum shall be reduced in a measure of the extra quantity (actual quantity – minimum quantity).

1.3.4.

In any event that the Company shall not be able to supply the quantities mentioned in this Agreement, it is agreed that the parties shall negotiate the effect of such incapability in amicable manner.  

1.3.5.

It is hereby agreed and declared that the Company shall have the right to terminate this Agreement with immediate effect, in any event that the Agent fails to meet with the stated minimum quantities.

1.4.  

Termination. This Agreement may be terminated by the Company in the event that the Agent has committed a material breach of any of its obligations hereunder that has not been cured within thirty (30) days after the Agent has received a written notice of such breach.

1.5.  

Modifications to the Product. The Company reserves its right and discretion to discontinue developing, producing, licensing, or distributing the Product, and/or to modify and/or to make changes in the Product, at any time with thirty (30) days prior notice to Agent. It is hereby agreed and declared that any future development or improvement of the Product by the Company or any kind of knowledge in connection with the current applications of the Product shall be solely made and owned by the Company and the Agent shall not have any rights in such developments and/or knowledge. The Company shall keep the Agent reasonably advised of any improvements and modifications of the Product.

This provision shall be effective even if such developments and/or knowledge shall be achieved by using the Agent’s funding and even if such developments and/or knowledge shall be achieved during the period of this Agreement. 

2.

Distribution & Marketing 

2.1.       

Cost of Distribution. All costs relating to selling, marketing, shipping and distribution of the Product, shall be solely borne by the Agent. 

2.2.       

Marketing Commitment. The Agent shall promote vigorously and aggressively the acquisition of the Product by end users. Notwithstanding the foregoing, any and all material, which the Agent intends to use for the purpose of promoting the Product, shall not contain information or statements, regarding the Product, differing from those contained in the Company's promotional materials and/or this Agreement.

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2.3.       

Projected Sales Plan. The Agent shall submit to the Company by no later than October 1st of each year, a yearly sales plan (“Sales Plan”), detailing its forecast and estimate of expected annual and quarterly sales of the units of the Product for the coming year. The Agent shall take all necessary actions in order to execute the Sales Plan and fulfill the expectations contained thereto. All costs pertaining to the foregoing execution shall be solely born by the Agent.

2.4.      

Delivery & Acceptance. The Company shall deliver to the Agent no later than 60 days after receipt of the deposit called for in this Agreement at section 4.3, the units of the Product on a FOB and any airfreight charges will be equally split 50/50 by both parties. Any taxes, duties and levies will be borne solely by the Agent. If the Agent does not provide written rejection of any unit of the Product within sixty (60) days of the actual date of delivery by the Company to the Agent, the units shall be deemed accepted upon the expiry of the foregoing period. It is hereby agreed that title and risk of loss to the Products under this Agreement shall pass to Agent from the Company FOB upon delivery thereof to the carrier.

2.5.       

Minimum Quantity Per Each Order Each and every purchase order made by the Agent according to this Agreement shall not be less than 10,000 units of the Product (“Minimum quantity per order obligation”). Notwithstanding the aforesaid, it is hereby agreed that first purchase order made by the Agent shall not be subject to the Minimum quantity per order obligation.

2.6.       

Sell Price Range to End Users It is hereby agreed that the selling price of each unit of the Product to the end users shall be retail priced, that not be less than 39.95 US Dollars and shall not exceed the amount negotiated by agent and company to be determined on their market. It is hereby agreed that only for the purpose of selling units of the Product in the Fuel Doctor China website, to be determined by agent and company), for the FD-47 Product. The FD-65 truck series price per unit shall be determined by Company after pre-production samples are approved.

2.7  

Sales Report The Agent shall submit to the Company each and every quarter, a sales report, detailing the number of the units of Product that has been actually sold by the Agent to distributors and retailers in the previous quarter in each Country in the Territory. All costs pertaining to the foregoing execution shall be solely born by the Agent.

**

(Please note that above pricing is subject to market conditions. All above pricing can be discussed amicably by both Company and Agent.)

3.

Support Services Obligations

The Agent shall have the sole responsibility to make available and provide to its   customers timely, professional and adequate support services in accordance with the highest professional standards prevailing in the industry.

4.

Ordering and Payment

4.1.      

Purchase Orders. Purchase Orders of the Product shall be in writing and be subject to acceptance by the Company. Such orders shall set forth the quantities to be purchased and the delivery dates. The Company shall have ten (10) business days to accept or decline the purchase order. In the event the Company cannot meet the quantity or dates specified, it shall notify the Agent, and the parties shall in good faith negotiate a mutually satisfactory schedule. Each order issued hereunder shall be governed by the terms of this Agreement. It is agreed that once a purchase order is approved by the Company, the Agent may not cancel and/or modify it and is obligated to pay for such purchase order in full, unless otherwise agreed upon by the Company.

4.2.      

Payments In consideration for the license granted to the Agent pursuant to Section 2 to this Agreement and for providing the Product, the Agent shall pay the Company fee in accordance with the following scale:

4.2.1.  

[*] units in one order- $[*] USD NET per unit FOB Bangkok, Thailand (packaged in blister, including [*] units in a counter top display in [*] inner carton, and [*] inner cartons (Total of [*] units) in [*] master.)

4.2.2.  

Initial 1 time SET-UP   fee of $[*] will be paid for use of all existing marketing tools (website, packaging, specials, commercials etc.). This fee is due upon final signing of Master Agreement and refundable if year one minimum number of unit requirements are achieved.

4.2.3.  

50% to be paid upon Purchase Order submission to Company. Balance of 50% to be paid prior to first shipment.

_________________

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

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It is hereby agreed and declared that the mentioned above fees shall be granted to the Agent for a period of 12 months, and thereafter the Company and Agent may mutually agree on any price modification. In the event that the parties fail to agree upon such price modifications, this Agreement shall be terminated with immediate effect. 

For the avoidance of any doubt, the mentioned above fees are exclusive of any applicable taxes, duties, and levies of any kind what so ever, however designated by any federal state or local governmental agency. In the event that the mentioned above fees are subject to withholding tax, that the fees shall increase in the proportion of the withholding tax, such that after such withholding, the Company shall receive stated above net of any withholding.

4.3.       

Payment Terms 50% of Company’s consideration for each Purchase Order placed by the Agent shall be paid by the Agent not later than the date of the Company’s acceptance of such purchase order. Balance of payment on each Purchase Order placed by the Agent will be due and payable in full, prior to delivery of the Product to the Agent and subject to bill of lading which shall be submitted to the Agent by the Company prior to each delivery. 

4.4.       

Failure to Pay. Any payment or part of a payment that is not paid by the Agent to the Company when due shall bear interest at the rate of 1.5% per month, and shall constitute sufficient cause for the Company to immediately suspend its performance hereunder and terminate the Agreement.

4.5.       

Taxes and Expenses. Except as expressly provided in this Agreement, each party shall bear all its own taxes and expenses incurred in rendering performance.

5.

Intellectual Property Rights

5.1.       

Definition “Intellectual Property” - means all intangible legal rights, titles and interests evidenced by or embodied in (i) any invention (whether patentable or un-patentable and whether or not reduced to practice), all improvements thereto, and all patent, patent applications and patent disclosures; (ii) any work of authorship, regardless of copyrightability, copyrightable works, all copyrights (including the droit morale rights); (iii) all trade secrets and Confidential Information; and (vi) any other similar rights, in each case on a worldwide basis.

5.2.       

Ownership of The Product. All Intellectual Property evidenced by or embodied in and/or related to the Marks and the Product and/or any derivative work thereof or invention relating thereto, shall be owned solely by the Company. The Company has not been determined to be infringing any patents or similar rights with respect to the Products. The Agent acknowledges that except for the right of use expressly provided hereunder in connection with the marketing and selling the Product or any units of the Product, the Company does not convey any Intellectual Property to the Agent hereunder, and that the Agent has not, does not, and shall not acquire any intellectual property rights with respect to the Product, and/or any invention relating thereto.

5.3.       

The Agent’s Obligations. The Agent shall: (i) not attempt to obtain, receive, review, or otherwise use or have access to the Product (or any part thereof) by any means other than through delivery of the Product to the Agent by the Company; (ii) refrain from reverse engineering, disassembling or modifying the Product, or granting any other third party the right to do so; (iii) not engage, itself or through the assistance of any third party, directly or indirectly, in the research, development, manufacturing, marketing, distribution, sale, lease or licensing of any product which is or may constitute a derivative work of the Product (iv) not represent that it possesses any proprietary interest in the Product; and (v) not directly or indirectly, take any action to contest the Company’s Intellectual Property or infringe them in any way. 

IT IS HEREBY AGREED AND DECLARED THAT ANY BREACH OF THIS SECTION 5 AND\OR ANY ATTEMPT MADE BY THE AGENT IN ORDER TO PURCHASE THE PRODUCT FROM THIRD PARTY, SHALL GRANT THE COMPANY THE RIGHT  TO RECEIVE FROM THE AGENT AGREED COMPENSATION IN THE SUM OF $20,000,000 (TWENTY MILLION) US DOLLARS.

5.4.       

Notification. The Agent shall promptly notify the Company of Agent’s knowledge of (i) any claims, allegations, or notification that its marketing, licensing, support, or service of the Product may or will infringe the Intellectual Property of any third party; and (ii) any determination, discovery, or notification that any third party is or may be infringing the Intellectual Property of the Company. The Agent shall not take any legal action relating to the protection or defense of any Intellectual Property pertaining to the Product without the prior written approval of the Company. The Agent shall assist in the protection and defense of such Intellectual Property, however, all legal fees and costs pertaining to such protection and defense shall be borne by the Company.

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6.

Confidential Information 

6.1.       

Definition “Confidential Information” means any data or information, not available to the general public, whether oral or written, treated as confidential that relates to the Product or the Company (or, if the Company is bound to protect the confidentiality of any other third party's information, such other third party's) past, present, or future research, development or business activities, including any unannounced product(s) and service(s), and including, but not limited to any information relating to services, developments, inventions, processes, plans, financial information, customer and supplier lists, forecasts, and projections.

6.2.       

Confidential Information. Insofar as Confidential Information or any portion of it is disclosed in writing and is identified as “Proprietary” and/or “Confidential” by the Company it will be received and accepted by the Agent  as Confidential Information: (i) The Agent represents and warrants that it will hold Confidential Information in confidence and protect the Confidential Information to the same extent and by the same means it uses to protect the confidentiality of its own proprietary or confidential information that it does not wish to disclose; (ii) The Agent represents and warrants that it will restrict disclosure of Confidential Information solely to those of its employees, agents, attorneys and accountants with a need to know, and will advise those individuals to whom the Confidential Information is disclosed of their obligations under this Agreement with respect to the Confidential Information, except Confidential Information will be disclosed pursuant to a Court order or pursuant to Law; provided however, that in such an event, as soon as practical after receiving the order or requirement of a court, administrative agency or other governmental body, the Agent shall give the Company a written notice of such order or requirement and in any event such notice shall be prior to disclosure of such information. (iii) all Confidential Information made available hereunder, including copies thereof, shall be returned to the Company or shall be certified as destroyed at the request of the Company.

6.3.       

Employee Agreement. The Agent shall obtain and maintain in effect written agreements with each of its employees, agents, attorneys and accountants who participate in any of the work being performed pursuant to this Agreement. Such agreements shall impose an obligation of confidence with respect to the Confidential Information enclosed by the Company.

7.

Non-Compete and Non-Solicitation

7.1.       

Prohibited Activities. For the term of this Agreement, for consideration to enter into this Agreement and for a period of one (1) year thereafter, the Agent shall not, without the prior written authorization of the Company, whether directly or indirectly, as an employee, independent entity, consultant, shareholder or howsoever otherwise, engage in the research and/or development of any technology, product, system, and/or device which competes with the Product, or any part thereof, and/or which imitates and/or can serve as a substitute thereof. Notwithstanding the aforesaid, for the term of this Agreement and for the period of two (2) years thereafter, the Agent shall not, without the prior written authorization of the Company, whether directly or indirectly, as an employee, independent entity, consultant, shareholder or howsoever otherwise, sell or market or distribute any technology, product, system, and/or device which competes with the Product, or any part thereof, and/or which imitates and/or can serve as a substitute thereof worldwide, which competes with or can serve as a substitute to the Product, or any part thereof and/or sell or market or distribute such technology. For the purpose of this Agreement, “Compete” shall mean any product, system, device which competes with the Product, or any part thereof, and/or which imitates and/or can serve as a substitute thereof.

7.2.       

Non-Solicitation. The Agent hereby agrees that neither it nor any of its shareholders and\or affiliates, or any officers, employees or agents of it or its affiliates (each, a “Covered Person”) shall at any time during the term of this Agreement or for a period of one year thereafter, solicit the employment of, seek to employ or employ, or engage the services in any capacity of any individual who was employed by the Company at any time during the previous year or who rendered services to or for the benefit of the Agent or any affiliate thereof.  In addition and under the time periods set forth in this paragraph 7.2, no Covered Person shall induce or encourage any individual to leave the employ of the Company or to cease rendering services to or for the benefit of the Company.  

7.3.       

Restrictions - Fairness. The Agent acknowledges that the restrictions contained in Section 7.1 and 7.2 are fair and reasonably required to protect the interest of the Company pursuant to the terms and conditions contained herein, and that these restrictions will not deprive the Agent of an opportunity to earn a living or to produce a profit. The Agent acknowledges and agrees that the foregoing covenant not to compete and/or not to solicit the employees and/or consultants of the Company is part of the Company’s consideration under this Agreement and that any breach of the foregoing covenant will deprive the Company substantially of its consideration in an amount of injury that would be impossible or difficult to fully ascertain. The Company shall, therefore, be entitled to obtain an injunction restraining any violation, further violation or threatened violation of the covenant not to compete and/or not to solicit set forth above, in addition to any other remedies which the Company may pursue, as well as immediately cease any of Agent’s right of exclusivity, as stipulated in section 2.3 above.

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7.4.       

Severability. The period of time, geographical area and scope of restrictions on the Agent's activities are intended to be divisible, so that if any provision of such covenant not to compete and/or not to solicit is found invalid, that provision shall be automatically modified to the extent necessary to make it valid, rather than such provision being declared invalid or void for such reason. 

8.

Warranty Disclaimer Limitation Of Liability And Product Return 

8.1.       

Customer Warranty The Company shall supply the Product in accordance with standards generally accepted in the manufacture of the units of the Products.   The Company warrants to customers that, for a period of one year from the date of shipment of any new Product, the Product will be free from defects in workmanship and material. Warranty service will be performed by the Company. This warranty is limited to repairing or replacing, at Company’s option, any Products or parts thereof that Company determines are covered by this warranty and are defective in workmanship or material.  In the event the Company determines that the Products are covered by this warranty, Company shall prepay return shipping charges.  In all other instances, such charges shall be paid by customer.  This warranty does not extend to any Products that have been subjected (at Company’s discretion) to misuse, neglect, accident, or modification by anyone.  Agent shall inspect the Product promptly upon receipt thereof at the shipping destination and may reject any Product which fails in any significant respect to meet the quality expected of the Product based solely on Agent’s discretion.  Rejected goods shall be returned freight prepaid to Company within fourteen (14) days of rejection.  As promptly as possible, but not later than ten (10) days after receipt by Company of properly rejected goods, Company shall replace properly rejected Product.  The Company will prepay transportation charges back to the Agent and shall reimburse Agent for any costs of transportation incurred by Agent in connection with the return to Company of properly rejected Product.

8.2.      

EXPRESS DISCLAIMER. THE COMPANY MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE PRODUCT, EXCEPT AS SET FORTH HEREIN.  

8.3.      

LIMITATION OF LIABILITY. THE LIABILITY OF THE COMPANY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SUPPLY OF PRODUCT HEREUNDER, SHALL BE LIMITED TO THE LOWER BETWEEN $200,000 US DOLLAR (TWO HUNDRED THOUSAND US DOLLARS) AND THE ACTUAL AMOUNTS PAID BY THE AGENT TO THE COMPANY FOR THE UNITS OF THE PRODUCT IN THE PREVIOUS 12 MONTHS, GIVING RISE TO SUCH DAMAGES, AND SHALL IN NO EVENT INCLUDE LOSS OF PROFITS, COST OF PROCURING SUBSTITUTE GOODS OR SERVICES, OR ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF THE COMPANY IS AWARE OF THE POSSIBILITY OF SUCH DAMAGES. 

9.

Insurance.

During the term of this Agreement the Agent shall maintain an adequate insurance policy which is required by law in the Territory and which is sufficient to adequately protect against the risks associated with its ongoing business, including the risks which might possibly arise in connection with the transactions contemplated by this Agreement and provides that it cannot be terminated or cancelled without giving the Company thirty (30) days prior written notice. It is clarified and agreed that the coverage under such insurance policy shall not be less than $5,000,000 US Dollars (or whatever minimum product liability insurance is required). The Agent shall provide the Company with evidence of such insurance upon request and the policy shall name Company as an additional insured.  Prior to delivery of the Product, Agent shall provide to Company an insurance certification or declaration confirming the above insurance requirements are satisfied.

10.       

Indemnification

10.1.    

By The Company. The Company will defend (by counsel of its choice), indemnify and hold Agent harmless from and against any third party claims against Agent for any loss, damage, liability, or expense (including reasonable attorneys’ fees) sustained by it as result of a claim or allegation that the use of the Product, as licensed in this Agreement, infringes any Intellectual Property of any third party, as of the date hereof, provided that the Agent promptly notifies The Company in writing of the claim and Company has sole control of its defense and settlement; and receives reasonable assistance from the Agent in its defense and settlement. Upon notice of an alleged infringement, or upon the Company’s conclusion that such a claim is likely, the Company shall have the right, at its option, to obtain the right for the Agent to continue to exercise the rights granted under this Agreement, substitute other products with similar operating capabilities, or modify the Product so that it is no longer infringing. If none of the above options are reasonably available in the Company’s sole discretion, the Agent may terminate this Agreement and the Agent shall cease all infringing use or sale of the Product and shall return the Product and shall receive reimbursement from the Company of all amounts paid to the Company with respect thereto. Notwithstanding the foregoing, the Company shall have no liability under this Section 10.1 if the alleged infringement arises from (i) The Agent's or any End User's modification of the Product, or (ii) the combination of the Product with other equipment not provided by the Company, if such action would have been avoided but for such use or combination. The Agent shall, at its own expense, defend (by counsel selected by Company), or at the Agent’s option settle and hold the Company harmless from any action instituted against The Company resulting from any infringement claim based upon either of the foregoing. 

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10.2.   

By The Agent. The Agent shall defend, indemnify and hold the Company, its Affiliates and their respective officers, directors, employees and agents harmless from and against any and all losses, demands, liabilities, costs and expenses (including reasonable attorney's fees and disbursements) incurred by or imposed upon any of them arising out of any and all governmental or private actions (or their insurers under rights of subrogation or otherwise)  that are related in any way to (i) the storage, use, transfer or sale including without limitation, the labeling, packaging, distribution, promotion and marketing of the units of the Product supplied by the Company to the Agent; (ii) any claim of failure by the Agent to comply with governmental requirements applicable to the Agent relating to the Product; or (iii) any negligent or willful act or omission by the Agent in connection with its performance of this Agreement or any breach by the Agent of any of its representations, warranties or covenants contained herein.

11.   

Term and Termination

11.1.   

Term. The term of this Agreement shall commence as of the Effective Date, and shall continue for five (5) years unless terminated earlier (“Term”).  The Agent shall have the option to extend the term for an additional 5 years provided that the Agent is not then in a default of this Agreement.  To exercise the option, Agent must deliver written notice to Company no earlier than 180 days or later than 90 days prior to the Term expiration date and the option shall be based on satisfying the quantity order requirements set forth in Appendix 2 and complying with the terms and conditions of this Agreement.

11.2.   

Termination. This Agreement may be terminated (i) by either party in the event that the other party has committed a material breach of any of its obligations hereunder that has not been cured within thirty  (30) days after the breaching party has received a written notice thereof; (ii) by the Company, at its sole and absolute discretion (and with immediate effect as of the date the Company informs the Agent of its decision), in case of a change of the ownership of the Agent or (iii) by mutual written agreement of the parties.

11.3.   

Termination Upon Bankruptcy. Effective immediately and without any requirement of notice, either party may, at its option, terminate this Agreement and/or suspend its performance in the event that: (i) the other party files a petition in bankruptcy, files a petition seeking any reorganization, arrangement, composition, or similar relief under any law regarding insolvency or relief for debtors, or makes an assignment for the benefit of creditors; (ii) a receiver, trustee, or similar officer is appointed for the business or property of such party; (iii) any involuntary petition or proceeding under bankruptcy or insolvency laws is instituted against such party and not stayed, enjoined, or discharged within 60 days; or (iv) the other party adopts a resolution for discontinuance of its business or for dissolution.

11.4.   

Consequences. Upon termination of this Agreement, the Agent shall cease all further promotion, marketing, and support of the Product. Without limiting the generality of the foregoing, the Agent shall cease all display, advertising, and use of all of the Company’s Marks. Upon termination of this Agreement: (i) the due date of all outstanding payments shall automatically be accelerated and all such payments shall become immediately due and payable; (ii) all orders or portions thereof remaining un-provided as of the effective date of termination may be canceled by the Company, at its option; (iii) The Agent shall promptly return to the Company all plans, drawings and other tangible property representing the Company’s Confidential Information and/or Intellectual Property rights and/or any such tangible property representing the disclosed Confidential Information divulged by the Company to the Agent pursuant to this Agreement and all copies thereof; (iv) The Agent shall erase/delete any such Confidential Information held by it in electronic form, and shall confirm in writing to the Company that it has complied with its obligations under this paragraph; and (v) The Company shall have the right to repurchase of all the units of the Product in the Agent’s stock.

11.5.   

Survival. Notwithstanding any termination of this Agreement, Sections 1.2 (Reserved Rights), 5 (Intellectual Property Rights), 6 (Confidential Information), 7 (Non-Compete and Non Solicitation), 8.2 (Disclaimer), 8.3 (Limited Liability), 10 (Indemnification), 11.4 (Consequences), 11.5 (Survival), 11.6 (Limitation on Liability), 12.9 (Governing Law), and 12.13. (Notices) shall survive and continue to be in effect in accordance with their term.

11.6.   

Limitation on Liability. Except as set forth herein, in the event of termination by either party in accordance with any of the provisions of this Agreement, neither party shall be liable to the other, because of such termination, for compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or on account of expenditures, inventory, investments, leases or commitments in connection with the business or goodwill of the Company or the Agent. 

12.     

Miscellaneous

12.1.   

Relationship Of Parties. In performing their respective services hereunder, the Agent and the Company shall operate as, and have the status of, independent contractors and shall not act as or be an employee of the other. Neither party shall have any right or authority or assume or create any obligations or make any representations or warranties on behalf of the other party, whether expressed or implied, or to bind the other party in any respect whatsoever.

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12.2.   

No Conflict. Each party represents and warrants, on a present and ongoing basis, to the other party that its commitments and the rights and privileges granted herein do not conflict with any other agreement or legal obligation.

12.3.   

Assignment. The rights of the Agent under this Agreement are restricted solely to the Agent and cannot be assigned, transferred, subleased, sublicensed, encumbered, or subject to any security interest without the written authorization of the Company.

12.4.  

Communication. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the next business day following transmission by fax, email upon receipt (or refusal to receive) if hand delivered, or 3 business days after it is mailed by certified or registered mail postage prepaid, to the Parties at the following addresses, or at such other address as may be given in writing in the future by either Party to the other:

To the Company:   Fuel Doctor Holdings,Inc.

Name: Mark H. Soffa

Title:  President/CEO

Address:  23961 Craftsman Road #LM, Calabasas, California. 91302

Telephone: 818-224-5678 877-512-(FUEL)

Facsimile: 818-224-3150

Email: mark@fueldoctorusa.com

To the Agent: Fuel Doctor Automobile Care China Beijing Co. Ltd

Name: Ma Song Hai

Title: CEO

Address: Huai rou zhong lu 36# 3rd Floor No.3913 Beijing China 101400

北京市怀柔中路36#3楼3913#

Telephone: tel: +86-10 63331007   Cell: 18610220909

Facsimile: fax: 010-63331011

Email: 1448868125@qq.com

12.5.   

Amendment. This Agreement may only be amended by an instrument in writing signed by each of the parties hereto.

12.6.   

Waiver. Any waiver of any right or default hereunder shall be effective only if made in writing and in the instance given and shall not operate as or imply a waiver of any similar right or default on any subsequent occasion. No waiver by either party of any breach or series of breaches or defaults in performance by the other party, and no failure, refusal or neglect of either party to exercise any right, power or option given to it hereunder or to insist upon strict compliance with or performance of either party's obligations under this Agreement, shall constitute a waiver of the provisions of this Agreement with respect to any subsequent breach thereof or a waiver by either party of its right at any time thereafter to require exact and strict compliance with the provisions thereof.

12.7.   

Severability. Any clause, provision, or portion of this Agreement found or ruled invalid, void, illegal or otherwise unenforceable under any law or by any court, arbitrator, or other proceeding, shall be amended to the extent required to render it valid, legal and enforceable, or deleted if no such amendment is feasible, and such amendment or deletion shall not affect the enforceability of the other provisions hereof.

12.8.   

Remedies Cumulative. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

12.9.   

Governing Law.  This Agreement shall be governed and construed under the laws of United States, State of California. Each party hereby submits to the jurisdiction of the courts in the United States, State of California.

12.10. 

Headings. The headings and sub-headings contained in this Agreement are for convenience and reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

12.11. 

Entire Agreement. The parties agree that this Agreement is the complete and exclusive statement of the agreement between the parties, which supersedes all prior agreements, oral or written, and all other communications between the parties relating to the subject matter of this Agreement.

12.12. 

Compliance With Law. Agent and Company represent that each will comply with all applicable laws and regulations.

Page 8

12.13. 

Signatures. This Agreement may be executed in two or more counterparts, each which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective authorized representatives.

SIGNED at Beijing on this the 25 day of December 2011.

For: Fuel Doctor Automobile Care China Beijing Co

Company Name:

/s/ Ma Song Hai                       

Signatory:

Capacity: CEO

Authority:

SIGNED at Calabasas on this the 15 day of December 2011.

For: Fuel Doctor Holding Inc.

Company Name:

/s/ Mark Soffa                          

Signatory:

Capacity: President/CEO

Authority:

Page 9

APPENDIX 1

		
	

Contract Year Ending:

	Minimum Number of

Units Requirement

	First year (02/01/2012-01/31/2013)

	80,0001

	Second year (02/01/2013-01/31/2014)

	180,000

	Third year (02/01/2014-01/31/2015)

	504,000

	Fourth year (02/01/2015-01/31/2016)

	720,000

	Fifth year (02/01/2016-01/31/2017)

	936,000

APPENDIX 2

		
	

Contract Year Ending:

	Minimum Number of

Units Requirement

	Sixth year (02/01/2017-01/31/2018)

	1,080,000

	Seventh year (02/01/2018-01/31/2019)

	1,440,000

	Eighth year (02/01/2019-01/31/2020)

	1,800,000

	Ninth year (02/01/2020-01/31/2021)

	1,440,000

	Tenth year (02/01/2021-01/31/2022)

	1,260,000

_________________________

1. No more than 60 days or less than 30 days prior to the expiration of year one, Company will work toward revising the minimum number of unit requirements should Agent request an adjustment.

Page 10ex10_1.htm

EX 10.1

VECTREN CORPORATION

 

CHANGE IN CONTROL AGREEMENT

 

This VECTREN CORPORATION CHANGE IN CONTROL AGREEMENT is entered into by and between Vectren Corporation, an Indiana corporation (the “Company”), and _______________ (the “Executive”), dated as of the 31st day of December, 2011 (the “Commencement Date”).

 

1. Definitions.

 

(a) Affiliate.  “Affiliate” shall mean any company or other entity controlled by or under common control with the Company.

 

(b) Cause.  “Cause” shall mean:

 

(i) intentional gross misconduct by the Executive damaging in a material way to the Company or any Affiliate,

 

(ii) the Executive’s commission of fraud against the Company or any Affiliate,

 

(iii) the Executive’s public acts of dishonesty or conviction of a felony, or

 

(iv) a material breach of this Agreement, after the Company has given the Executive notice thereof and a reasonable opportunity to cure.

 

(c) Change in Control.  “Change in Control” shall mean:

 

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute an acquisition of control:  (A) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (A), (B) and (C) of subsection (iii) of this paragraph are satisfied; or

 

(ii) Individuals who, as of the Commencement Date, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors of the Company (the “Board”); provided, however, that any individual becoming a director subsequent to the Commencement Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

  

  

  

(iii) Consummation of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (A) more than sixty percent (60%) of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding the Company, any employee benefit plan or related trust of the Company, or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, thirty percent (30%) or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, thirty percent (30%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or

 

(iv) Approval by the shareholders of the Company of and consummation of (A) a complete liquidation or dissolution of the Company or (B) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition (1) more than sixty percent (60%) of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding the Company and any employee benefit plan or related trust of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, thirty percent (30%) or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, thirty percent (30%) or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (3) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.

 

(d) Date of Termination.  “Date of Termination” shall mean the date the Executive’s employment is terminated.

 

  

  

  

(e) Disability.  “Disability” shall have the meaning set forth in the Company’s then current long term disability plan.

 

(f) Good Reason.  “Good Reason” shall mean, without the Executive’s written consent, (i) a demotion in the Executive’s status, position or responsibilities which, in the Executive’s reasonable judgment, does not represent a promotion from the Executive’s status, position or responsibilities as in effect immediately prior to the Change in Control; (ii) the assignment to the Executive of any duties or responsibilities which, in the Executive’s reasonable judgment, are inconsistent with such duties or responsibilities immediately prior to the Change in Control; (iii) any removal of the Executive from or failure to reappoint or reelect the Executive to any positions that the Executive had immediately prior to the Change in Control, except in connection with the termination of the Executive’s employment for Disability, death or Cause or by the Executive other than for Good Reason; (iv) a reduction by the Company or an Affiliate in the Executive’s base salary as in effect on the date of the Change in Control or as the same may be increased from time to time by the Company or an Affiliate after the date of the Change in Control or the Company’s and its Affiliate’s failure to increase (within twelve (12) months of the Executive’s last increase in base salary) the Executive’s base salary after a Change in Control in an amount which at least equals, on an appropriate percentage basis, an amount reasonably comparable to the percentage increases in base salary for all Company and Affiliate employees at the same employment level as the Executive effected in the preceding twelve (12) months; (v) the relocation of the principal executive offices of the Company or Affiliate, whichever entity on behalf of which the Executive performs a principal function of that entity as part of the Executive’s employment services, to a location more than fifty (50) miles outside the Evansville, Indiana metropolitan area or, if the Executive’s services are not performed in Evansville, Indiana, the Company’s or Affiliate’s requiring the Executive to be based at any place more than fifty (50) miles outside the location at which the Executive performed the Executive’s duties immediately prior to the Change in Control, except for required travel on the Company’s or Affiliate’s business to an extent substantially consistent with the Executive’s business travel obligations at the time of a Change in Control; (vi) a reduction in the Executive’s total direct compensation opportunity after the Change in Control from that available immediately prior to the Change in Control; (vii) the failure by the Company and Affiliates to continue in effect any incentive, bonus or other compensation plan in which the Executive participates immediately prior to the Change in Control, including, but not limited to, the Company’s stock option, stock award and restricted stock plans, if any, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan in connection with the Change in Control, or the failure by the Company or any Affiliate to continue the Executive’s participation therein, or any action by the Company or any Affiliate which would directly or indirectly materially reduce the Executive’s participation therein; (viii) the failure by the Company or any Affiliate to provide benefits (including, but not limited to, annual and long term bonus opportunities), in the aggregate, that are reasonably comparable to the benefits, in the aggregate, being provided for the majority of the other Company and Affiliate employees at the same employment level as the Executive prior to the Change in Control; (ix) the failure of the Company or any Affiliate to obtain a satisfactory agreement from any successor or assign of the Company and any Affiliate to assume and agree to perform this Agreement; or (x) any request by the Company or any Affiliate that the Executive participate in an unlawful act or take any action constituting a breach of the Executive’s professional standard of conduct.

 

(g) Notice of Termination.  “Notice of Termination” shall mean a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) if the Date of Termination is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty (30) days after the giving of such notice).  The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing the Executive’s rights hereunder.

 

(h) Release.  “Release” shall mean the agreement that the Executive must execute in order to receive any severance benefits under this Agreement, which shall be approved by the Committee and shall contain only typical post separation release of all claims that the Executive may have against the Company and all Affiliates relating to the employment and termination of employment of the Executive.

 

  

  

  

2. Termination in Connection with a Change in Control.  If during the period beginning on the Change in Control and continuing for two (2) years thereafter, the Company and all Affiliates shall terminate the Executive’s employment other than for Cause, death or Disability, or the Executive shall resign employment for Good Reason (which shall be communicated by the Executive by Notice of Termination to the Company), then

 

(a) The Company shall pay, or cause the appropriate Affiliate to pay, to the Executive in a lump sum in cash within sixty calendar days after the Date of Termination the aggregate of the amounts set forth in clauses (i) and (ii) below:

 

(i) the Executive’s annual base salary, accrued and unpaid vacation and unreimbursed expenses through the Date of Termination to the extent not theretofore paid (“Accrued Obligations”); provided, however, that for purposes of this Section 2, annual base salary shall mean gross annual base salary and shall include, for example, any elective salary reductions in effect for the Executive under any tax qualified or non-qualified deferred compensation plan maintained by the Company or any Affiliate; and

 

(ii) the amount equal to the product of (A) and (B) where:

 

A. is [three / two / one], and

 

B. is the sum of (1) the Executive’s annual base salary and (2) the target bonus currently in effect for the Executive; and

 

(b) for the period of [three / two / one] years, the Company shall continue benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the medical, prescription and dental plans, to the extent applicable generally to other peer executives of the Company and Affiliates as if the Executive’s employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families (with the Executive responsible for the employee portion of the premiums); provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive such benefits under another employer provided plan, such benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. It is the intention of the parties that the benefits provided for in this subparagraph meet the requirements of either one or more of (i) Treas. Reg. § 1.409A-1(b)(9)(v)(B) to the extent such rights apply during the period of time beginning on the Termination Date and during which the Executive would be entitled continuation coverage under a Company or Affiliate group health plan under COBRA such shall not provide for a deferral of compensation under Section 409A, (ii) Treas. Reg. § 1.409A-1(b)(9)(iii) due to such being payments that meet the requirements of a separation pay plan under such regulation, and/or (iii) Treas. Reg. § 1.409A-3(a)(4) due to such payments being made on a fixed schedule.  For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed for the duration of employment after the Date of Termination and to have retired on the last day of such period; and

 

(c) to the extent not theretofore paid or provided, the Company and all Affiliates shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is entitled to receive under any plan, program, policy or practice or contract or agreement of the Company and all Affiliates, excluding any severance plan or policy.

 

  

  

  

 

Notwithstanding anything contained in this Agreement to the contrary, if the Executive’s employment is terminated before a Change in Control and the Executive reasonably demonstrates that such termination (i) was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a “Change in Control” and who effectuates a “Change in Control” or (ii) otherwise occurred in connection with, or in anticipation of, a “Change in Control” which actually occurs, then for all purposes of this Agreement, the date of a “Change in Control” with respect to the Executive shall mean the date immediately prior to the date of such termination of the Executive’s employment.

3. Termination.  Except as otherwise provided in the last sentence of Section 2, this Agreement shall terminate upon the earlier of (a) cessation of employment of the Executive with the Company and all Affiliates for any reason or no reason prior to a Change in Control, or (b) one year after the Executive receives notice from the Company that it terminates this Agreement.

 

4. Release.  Any compensation and benefits to be provided under Sections 2(a)(ii), 2(b) and 2(c) hereof shall be provided only if the Executive timely executes and does not revoke a Release. The Release must be provided by the Company within ten days after the Termination Date.  The Release must be signed by the Executive or his legal representative, if applicable, and become effective and irrevocable in accordance with its terms (taking into account any applicable revocation period set forth therein), no later than the sixtieth day after the Termination Date. If the Company fails to provide the Release within ten days after the Termination Date, then the Executive shall be entitled to such compensation and benefits without being required to execute and furnish the Release.  If the Release is timely delivered by the Company and the Executive fails to execute and furnish the Release, or if the Release furnished by the Executive has not become effective and irrevocable in accordance with its terms (taking into account any applicable revocation period set forth therein) within such sixty day period, the Executive will not be entitled to any payment or benefit under this Agreement other than the Accrued Obligations.

 

5. Full Settlement.  After a Change in Control, the Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or any Affiliate may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any non-frivolous contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

6. Successors.

 

(a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

 

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

 

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

  

  

  

7. Certain Additional Payments by the Company.

 

(a) Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company and all Affiliates to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Severance Payments”), would, but for this Section, be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the following provisions shall apply:

 

(i) If the Severance Payments, reduced by the sum of (1) the Excise Tax (as defined below) and (2) the total of the Federal, state, and local income and employment taxes payable by the Executive on the amount of the Severance Payments which are in excess of the Threshold Amount (as defined below), are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement.

 

(ii) If the Threshold Amount is less than (x) the Severance Payments, but greater than (y) the Severance Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Severance Payments which are in excess of the Threshold Amount, then the benefits payable under this Agreement shall be reduced (but not below zero) to the extent necessary so that the maximum Severance Payments shall not exceed the Threshold Amount.

 

(b) For the purposes of this Section, “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by the Executive with respect to such excise tax.

 

(c) The determination as to which of the alternative provisions of Section 6(a) shall apply to the Executive shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 30 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. For purposes of determining which of the alternative provisions of Section 6(a) shall apply, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in the state and locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent fraud or manifest error.

 

(d) In addition, notwithstanding anything herein to the contrary, (i) in the event any payments under this Section 6 are to be reduced, the reduction shall take place in a manner that produces the greatest economic advantage to the Executive (and if reduction of two or more payments produce the same economic advantage they shall be reduced proportionally), and (ii) any payment required under this Section 6 shall be made by the end of the Executive's taxable year next following the Company’s taxable year in which the Executive remits the payment. This Section 7(d) shall be interpreted consistent with Treas. Reg. § 1.409A-3(i)(1)(v).

 

  

  

  

8. Section 409A.

 

(a) Notwithstanding any provision to the contrary in this Agreement, payments or distributions to the Executive, if the Executive is at the time of termination of employment a “specified employee” (as determined under the Company’s policy for identifying specified employees) on his/her date of termination, shall not be made or commence until the earlier of the date of the Executive’s death or the first day after expiration of the six-month period immediately following the Date of Termination of the Executive and all payments that would have been made during such period shall be accumulated and paid (along with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on  the Termination Date) on the first day after the earlier of death or expiration of such period; provided, however, that the six (6) month delay required under this Section shall not apply to (a) the portion of any payment that is not a deferral of compensation as set forth in Treas. Reg. § 1.409A-1(b)(9)(v), or (b) the portion of any payment resulting from the Executive’s “involuntary separation from service” (as defined in Treas. Reg. § 1.409A-1(n) and including a “separation from service for good reason,” as defined in Treas. Reg. § 1.409A-1(n)(2)) that (i) is payable no later than the last day of the second year following the year in which the separation from service occurs, and (ii) does not exceed two times the lesser of (A) the Executive’s annualized compensation for the year prior to the year in which the separation from services occurs or (B) the dollar limit described in Section 401(a)(17) of the Code.

 

(b) Upon the inclusion of any amount into the Executive’s income as a result of the failure of this Agreement to comply with the requirements of Section 409A of the Code a distribution not to exceed the amount that shall be included in income shall be made as soon as is administratively practicable following the discovery of the failure of the Agreement to comply with Section 409A of the Code and the regulations promulgated thereunder. This Section shall be interpreted consistent with Treas. Reg. § 1.409A-3(j)(4)(vii).

 

(c) Termination of employment of the Executive under this Agreement shall be interpreted to mean “Separation from Service” (as such term is defined in the Vectren Corporation Nonqualified Deferred Compensation Plan effective January 1, 2005, as amended).

 

(d) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A of the Code: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder. This Section 8(d) shall be interpreted in accordance with Treas. Reg. § 1.409A-3(i)(1)(iv)(A).

 

(e) The tax treatment of the benefits provided under this Agreement is not warranted or guaranteed. The Company nor any Affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Executive (or any other individual claiming a benefit through the Executive) as a result of this Agreement.

 

9. Miscellaneous.

 

(a) This Agreement shall be governed by and construed in accordance with the laws of Indiana, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force, or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

 

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed with respect to the Company attention the Chairperson of the Compensation Committee at the Company’s corporate headquarters address, and with respect to the Executive at the last address of the Executive on the Company’s books and records.  Notice and communications shall be effective when actually received by the addressee.

 

  

  

  

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

 

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

 

(e) On and after the Commencement Date, this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof and any such agreement shall be deemed terminated without any remaining obligations of either party thereunder.

 

(f) This Agreement shall not be construed as giving the Executive any right of employment or continuing employment with the Company or any Affiliate.

 

(g) The Company and the Executive each acknowledge that each party to this Agreement has had the opportunity to be represented by counsel in connection with this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it, has no application and is expressly waived.

 

(h) Any dispute arising out of or in any way pertaining to this Agreement or any other agreement or document executed pursuant to or in connection with this Agreement or the entitlement to severance shall be resolved by binding arbitration to be held in Evansville, Indiana, in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, and judgment on the award may be entered in any court having jurisdiction thereof.

 

(i) Notwithstanding anything herein to the contrary, the Executive agrees that payments made to the Executive may be subject to repayment pursuant to one or more clawback or recoupment policies of the Company as are in effect at anytime and from time to time.

 

  

  

  

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.

 

____________________________________

__________________, the Executive

____________________________________

Date: ______________ ____, 20______

Vectren Corporation

By:                                                                

 

Printed:                                                                

 

Title:                                                                

 

____________________________________

Date: ______________ ____, 20______

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