UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

     
Date of Report (Date of Earliest Event Reported):   February 13, 2006

VIASPACE Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

     
Nevada 333-110680 76-0742386
_____________________
(State or other jurisdiction
_____________
(Commission
______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
2400 Lincoln Ave., Altadena, California   91001
_________________________________
(Address of principal executive offices)
  ___________
(Zip Code)
     
Registrant’s telephone number, including area code:   626-296-6310

Not Applicable
______________________________________________
Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


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Item 1.01 Entry into a Material Definitive Agreement.

On February 13, 2006, the Board of Directors of the Company amended and replaced the 2005 Non-Employee Director Option Program (the "2005 Program") with the 2006 Non-Employee Director Option Program (the "2006 Program"). The 2005 Program was orginally adopted along with the 2005 Stock Incentive Plan on October 20, 2005. On February 13, 2006, the 2006 Program was approved by a majority of shareholders of the Company by written consent, in accordance with the Company's Articles of Incorporation and Bylaws pursuant to State of Nevada law.

A copy of the 2006 Program is attached to this Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

A 2006 Compensation Package for Outside Members of the Board of Directors which incorporates the 2006 Program approved by the Board of Directors is attached to this Form 8-K as Exhibit 10.2 and is incorporated herein by reference.





Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

Exhibit No. Description

10.1 2006 Non-Employee Director Option Program
10.2 2006 Compensation Package for Outside Members of the Board of Directors






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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

         
    VIASPACE Inc.
          
February 16, 2006   By:   Stephen J. Muzi
       
        Name: Stephen J. Muzi
        Title: Chief Financial Officer


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Exhibit Index


     
Exhibit No.   Description

 
10.1
  2006 Non-Employee Director Option Program
10.2
  2006 Compensation Package for Outside Members of the Board of Directors

Exhibit 10.1

VIASPACE INC.
2006 NON-EMPLOYEE DIRECTOR OPTION PROGRAM

ARTICLE I
ESTABLISHMENT AND PURPOSE OF THE PROGRAM

1.01 Establishment of Program

The VIASPACE Inc. 2006 Non-Employee Director Option Program (the “Program”) is replacing the VIASPACE Inc. 2005 Non-Employee Director Option Program adopted pursuant to the VIASPACE Inc. 2005 Stock Incentive Plan (the “Plan”) that was effective October 20, 2005 and, in addition to the terms and conditions set forth below, is subject to the provisions of the Plan.

1.02 Purpose of Program

The purpose of the Program is to enhance the ability of the Company to attract and retain directors who are not Employees (“Non-Employee Directors”) through a program of automatic Option grants. Non-Employee Directors may also be granted other awards, as referred to in the Plan, by the Board of Directors (the “Board”) in its discretion as Administrator of the Plan.

1.03 Effective Date of the Program

The Program is effective as of February 13, 2006 (the “Effective Date”).

ARTICLE II
DEFINITIONS

Capitalized terms in this Program, unless otherwise defined herein, have the meaning given to them in the Plan.

ARTICLE III
OPTION TERMS

3.01 Date of Grant and Number of Shares

A Non-Qualified Stock Option to purchase 125,000 shares of Common Stock (or such other number of shares determined by the Board in its discretion as Administrator of the Plan) shall be granted (the “Initial Grant”) to each Non-Employee Director upon the date that each such Non-Employee Director is elected or appointed to the Board (or such other date as determined by the Board in its discretion as Administrator of the Plan).
In addition, on the first business day of each fiscal year, commencing with the fiscal year beginning January 1, 2007, each Non-Employee Director who continues as a Non-Employee Director following such annual meeting shall be granted a Non-Qualified Stock Option to purchase 50,000 shares of Common Stock (or such other number of shares determined by the Board in its discretion as Administrator of the Plan) (a “Subsequent Grant”); provided that no Subsequent Grant shall be made to any Non-Employee Director who has not served as a director of the Company, as of the time of such annual meeting, for at least six (6) months. Each such Subsequent Grant shall be made on the date of the annual stockholders’ meeting in question.

Further, the Board in its discretion as Administrator of the Plan may make additional grants of Non-Qualified Stock Options to Non-Employee Directors at any time.

3.02 Vesting

Unless otherwise specified by the Board with regard to a specific grant, each Option under the Program shall normally vest and become exercisable as to one-quarter (1/4) of the shares of Common Stock subject to the Option at the end of the first full fiscal quarter for which the Non-Employee Director served as a director of the Company and an additional one-quarter (1/4) of the shares of Common Stock subject to the Option shall vest at the end of each subsequent full fiscal quarter for which the Non-Employee Director served as a director of the Company thereafter, such that the Option will be fully exercisable four full fiscal quarters after its date of grant.

3.03 Exercise Price

The exercise price per share of Common Stock of each Initial Grant and Subsequent Grant shall be one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

3.04 Corporate Transaction/Change in Control

(a) In the event of a Corporate Transaction, each Option which is at the time outstanding under the Program automatically shall become fully vested and exercisable immediately prior to the effective date of such Corporate Transaction. Effective upon the consummation of the Corporate Transaction, all outstanding Options under the Program shall terminate. However, all such Options shall not terminate if the Options are, in connection with the Corporate Transaction, assumed by the successor corporation or Parent thereof.

(b) In the event of a Change in Control (other than a Change in Control which also is a Corporate Transaction), each Option which is at the time outstanding under the Program automatically shall become fully vested and exercisable, immediately prior to the specified effective date of such Change in Control. Each such Option shall remain so exercisable until the expiration or sooner termination of the applicable Option term.

3.05 Other Terms

The Administrator shall determine the remaining terms and conditions of the Options awarded under the Program.

Exhibit 10.2

2006 COMPENSATION PACKAGE FOR OUTSIDE MEMBERS OF
THE BOARD OF DIRECTORS OF
VIASPACE INC.

Following is the compensation package for the Outside Members of the Board of Directors of VIASPACE Inc. (the “Company”):

             
 
  A)   New members  
 
           
 
      a.   Option grant: One-time option grant of 125,000 options (or such other
number of shares determined by the Board of Directors in its discretion
as Administrator), on the date of appointment (or such other date as
determined by the Board of Directors in its discretion as
Administrator), at the closing market price on the day of grant, vesting
quarterly for each full fiscal quarter for which the Board member holds
office (or such other vesting period as determined by the Board of
Directors in its discretion as Administrator).
 
           
 
      b.   Cash Compensation: $2,500 payable upon election to the Board of Directors
 
           
    B)   Current board members – Current outside members of the Company’s Board of Directors earn the
 
           
        following compensation:
 
           
 
      a.   Cash compensation: $2,500 per quarter payable at the on the first
business day following the end of each full fiscal quarter for which the
member served on the board. Additionally, outside Board members will
receive cash compensation of $1,000 for every meeting attended in person
and $500 for every meeting attended telephonically.
 
           
 
      b.   Option grants: For outside Board members that have served on the Board
for at least 6 months, 50,000 options (or such other number of shares
determined by the Board of Directors in its discretion as Administrator)
on the first business day of each fiscal year, at closing market price
on the day of grant, vesting ratably over four quarters (or such other
vesting period as determined by the Board of Directors in its discretion
as Administrator).
 
           
    C)   Current committee members – In addition to compensation earned under “b” above, members of
 
           
        Committees of the Company’s Board of Directors will receive compensation of $250 for every
 
           
        committee meeting attended whether in person or telephonically.
 
           
    D)   Should any grant of Stock Options to outside members of the Board of Directors occur on a day
 
           
        when the stock market is closed, then the option price shall be the previous day’s closing
 
           
 
      market price.  
 
           
    E)   Should a change in control of the company occur all stock option will vest immediately. Change
 
           
        of control is defined as a change in at least 50% ownership of the stock within a 60 day
 
           
 
      period.