EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (this “Agreement”),
dated
as of May 5, 2008 by and between Xxxxxxx Xx, residing at
____________________________ (“Executive”),
and
Skystar Bio-Pharmaceutical Company a Nevada corporation having its principal
office at Room 10601, Jiezuo Plaza, No. 4, Fenghui Road South, Gaoxin District,
Xian Province, People’s Republic of China (the “Company”).
WHEREAS,
the Company believes that Executive provides unique advisory and management
services for the Company and wishes to retain the continued services of
Executive as its Chief Executive Officer; and
WHEREAS,
the Company and Executive have reached an understanding with respect to
Executive’s continuing employment with the Company for a [five year period]
commencing as of the date of this Agreement; and
WHEREAS,
the Company and Executive desire to evidence their agreement in writing and
to
provide for the employment of Executive by the Company on the terms set forth
herein.
NOW,
THEREFORE, IN CONSIDERATION of the foregoing facts, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
parties hereby agree as follows:
1. Employment,
Duties and Acceptance.
1.1 Effective
as of the date of this Agreement, the Company hereby agrees to the continued
employment of Executive as its Chief Executive Officer, and Executive hereby
accepts such employment on the terms and conditions contained in this Agreement.
During the term of this Agreement, Executive shall make himself available to
the
Company and to any of its subsidiaries or affiliates as directed to pursue
the
business of the Company subject to the supervision and direction of the Board
of
Directors of the Company (the “Board”
or
“Board
of Directors”).
1.2 The
Board
may assign Executive such general management and supervisory responsibilities
and executive duties for the Company as are appropriate and commensurate with
Executive’s position as Chief Executive Officer of the Company (“CEO”).
1.3 Executive
accepts such employment and agrees to devote substantially all of his business
time, energies and attention to the performance of his duties hereunder and
as
an executive officer or director of subsidiaries of the Company. Nothing herein
shall be construed as preventing Executive from making and supervising
investments on a personal or family basis (including trusts, funds and
investment entities in which Executive or members of his family have an
interest); provided, however, that these activities do not materially interfere
with the performance of his duties hereunder or violate the provisions of
Section 4.4
hereof.
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2. Compensation
and Benefits.
2.1 The
Company shall pay to Executive a salary at an annual base rate of not less
than
$100,000 for the term hereof, subject to increases of 5% of the prior year’s
base annual salary each year beginning January 1, 2009. During Executive’s
employment, salary will be paid not less frequently than every two weeks without
the prior written consent of Executive. Executive’s annual base rate will be
reviewed by the Compensation Committee during December 2009, for purposes of
determining whether the new base salary should be augmented to reflect
prevailing market conditions.
2.2 The
Company shall also pay to Executive such bonuses as may be determined from
time
to time by the Compensation Committee. The amount of annual bonus payable to
Executive may vary at the discretion of the Compensation Authority; provided,
however, that the total bonus shall not exceed 100% of Executive’s annual base
rate under Section 2.1
as of
the date the bonus is awarded. In determining the annual bonus to be paid to
Executive, the Compensation Committee may, among other factors they believe
to
be appropriate, consider, and give varying degrees of importance to, Executive’s
contribution to the following:
(a) achievement
by the Company of specific identified targets selected by the Committee from
time to time;
(b) the
attraction and retention of key executive personnel by the Company;
(c) satisfaction
of the Company’s capital requirements;
(d) the
establishment of strategic direction and significant Company goals;
(e) growth
in
the Company’s per share value; and
(f) such
other criteria as the Compensation Committee deems to be relevant.
2.3 Executive
shall be entitled to such insurance and other benefits including, among others,
medical and disability coverage and life insurance comparable to chief executive
officers of companies similar to the Company, subject to applicable waiting
periods and other conditions which may be generally applicable.
2.4 Executive
shall be entitled to four weeks of vacation in each calendar year.
2.5 The
Company will pay or reimburse Executive for all reasonable or otherwise duly
authorized transportation, hotel and other expenses incurred by Executive on
business trips (including business or first class air travel on scheduled
flights of more than five (5) consecutive hours) and for all other ordinary
and
reasonable out-of-pocket expenses actually incurred by him in the conduct of
the
business of the Company against itemized vouchers submitted with respect to
any
such expenses.
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3. Term
and Termination.
3.1 The
term
of this Agreement commences as of the consummation of the Agreement and shall
continue for five (5) years unless sooner terminated as herein
provided.
3.2 If
Executive dies during the term of this Agreement, this Agreement shall thereupon
terminate, except that the Company shall pay to the legal representative of
Executive’s estate the base salary due Executive pursuant to Section 2.1 hereof
through the first anniversary after Executive’s death (or the scheduled
expiration under Section 3.1, if earlier than the first anniversary date) as
well as a pro rata allocation of bonus payments under Section 2.2 based on
the
days of service during the year of death, and all amounts owing to Executive
at
the time of termination, including for previously accrued but unpaid bonuses,
expense reimbursements and accrued but unused vacation pay.
3.3 If
Executive shall be rendered incapable by an incapacitating illness or disability
(either physical or mental) of complying with the terms, provisions and
conditions hereof on his part to be performed for a period in excess of 180
consecutive days during any consecutive twelve (12) month period, then the
Company, at its option, may terminate this Agreement by written notice to
Executive (the “Disability
Notice”)
delivered prior to the date Executive resumes the rendering of services
hereunder; provided, however, if requested by Executive (or a representative
thereof) such termination shall not occur until after examination of Executive
by a medical doctor (retained by the Company with the consent of Executive
which
consent shall not be unreasonably withheld) who certifies in a written report
to
the Board with a copy of such report delivered simultaneously to Executive
that
Executive is and shall be incapable of performing his duties for in excess
of
two additional months because of the continuing existence of such incapacitating
illness or disability. Notwithstanding such termination, the Company (a) shall
make a payment to Executive of a pro rata allocation of payments under Section
2.2 based on the days of service during the year in which the Disability Notice
is delivered and (b) shall pay to Executive the base salary due Executive
pursuant to Section 2.1 hereof through the second anniversary of the date of
such notice (the “Disability
Period”),
less
any amount Executive receives for such period from any Company-sponsored or
Company-paid for source of insurance, disability compensation or governmental
program. The Company shall also pay to Executive all amounts owing to Executive
at the time of termination, including for previously accrued but unpaid bonuses,
expense reimbursements and accrued but unused vacation pay.
3.4 The
Company, by notice to Executive, may terminate this Agreement for Cause. As
used
herein, “Cause”
means
(a) the refusal in bad faith by Executive to carry out specific written
directions of the Board, (b) intentional fraud or dishonest action by Executive
in his relations with the Company, (“dishonest” for these purposes shall mean
Executive’s knowingly making of a material misstatement to the Board for the
purpose of obtaining direct personal benefit); (c) the conviction of Executive
of any crime involving an act of significant moral turpitude after appeal or
the
period for appeal has elapsed without an appeal being filed by Executive (d)
any
act (or failure to act), knowingly committed by Executive, that is in violation
of written Company policies, this Agreement or the Company’s written agreements
with third parties and that is materially damaging to the business or reputation
of the Company as determined in good faith by the independent members of the
Board. Notwithstanding the foregoing, no Cause for termination shall be deemed
to exist with respect to Executive’s acts described in clause (a) or (b) or (d)
above, unless the Board shall have given written notice to Executive (after
five
(5) days advance written notice to Executive and a reasonable opportunity to
Executive to present his views with respect to the existence of Cause),
specifying the Cause with particularity and, within twenty (20) business days
after such notice, Executive shall not have disputed the Board’s determination
or in reasonably good faith taken action to cure or eliminate prospectively
the
problem or thing giving rise to such Cause, provided, however, that a repeated
breach after notice and cure, of any provision of clause (a), (b) or (d) above,
involving the same or substantially similar actions or conduct, shall be grounds
for termination for cause upon not less than five (5) days additional notice
from the Company.
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3.5 Executive,
by notice to the Company, may terminate this Agreement if a Good Reason exists.
For purposes of this Agreement, “Good
Reason”
means
the occurrence of any of the following circumstances without Executive’s prior
express written consent: (a) a material adverse change in the nature of
Executive’s title, duties or responsibilities with the Company that represents a
demotion from his title, duties or responsibilities as in effect immediately
prior to such change; (b) a material breach of this Agreement by the Company;
(c) a failure by the Company to make any payment to Executive when due, unless
the payment is not material and is being contested by the Company, in good
faith; (d) any person or entity other than shareholders of the Company and/or
any officers or directors of the Company as of the date of this Agreement
acquires securities of the Company other than from Executive or his affiliates
(in one or more transactions) having 51% or more of the total voting power
of
all the Company’s securities then outstanding.
Notwithstanding
the foregoing, no Good Reason shall be deemed to exist with respect to the
Company’s acts described in clauses (a), (b) or (c) above, unless Executive
shall have given written notice to the Company specifying the Good Reason with
reasonable particularity and, within twenty (20) business days after such
notice, the Company shall not have cured or eliminated the problem or thing
giving rise to such Good Reason; provided, however, that a repeated breach
after
notice and cure of any provision of clauses (a), (b) or (c) above involving
the
same or substantially similar actions or conduct, shall be grounds for
termination for Good Reason without any additional notice from
Executive.
3.6 In
the
event that Executive terminates this Agreement for Good Reason, pursuant to
the
provisions of paragraph 3.5, or the Company terminates this Agreement without
Cause, as defined in paragraph 3.4, the Company shall continue to pay to
Executive (or in the case of his/her death, the legal representative of
Executive’s estate or such other person or persons as Executive shall have
designated by written notice to the Company), all payments, compensation and
benefits required under paragraph 2 hereof through the earlier of (y) two (2)
years from the date of termination or (z) through the term of this Agreement;
provided, however, that Executive’s insurance coverage shall terminate upon
Executive becoming covered under a similar program by reason of employment
elsewhere. If Executive’s employment is terminated for Good Reason or without
Cause, Executive shall have no duty to mitigate awards paid or payable to him
pursuant to this subsection, and any compensation paid or payable to Executive
from sources other than the Company will not offset or terminate the Company’s
obligation to pay to Executive the full amounts pursuant to this subsection
3.6.
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4. Protection
of Confidential Information; Non-Competition, Corporate
Opportunities.
4.1 Executive
acknowledges that:
(a) As
a
result of his current employment with the Company, Executive will obtain secret
and confidential information concerning the business of the Company and its
subsidiaries and affiliates (referred to collectively in this Article 4 as
the
(“Company”),
including, without limitation, financial information, designs and other
proprietary rights, trade secrets and know-how, customers and sources
(“Confidential
Information”),
and
that the business opportunities of which Executive becomes aware to undertake
or
participate in municipal and infrastructure planning projects and related
development investments, including BT or BOT investments and financing
opportunities related thereto, and to acquire or purchase, or, except for
Permitted Competitive Investments, otherwise make equity or debt investments
in,
companies primarily involved in a Competitive Business if such opportunities
become known to Executive while he is an employee of Company, whether in the
course of his employment, his Approved Academic and Civic Activities or
otherwise, are considered to be business opportunities of the Company
(“Corporate
Opportunities”).
(b) The
Company will suffer substantial damage which will be difficult to compute if,
during the period of his employment with the Company or thereafter, Executive
should enter a business competitive with the Company or divulge Confidential
Information.
(c) The
provisions of this Agreement are reasonable and necessary for the protection
of
the business of the Company.
4.2 Executive
agrees that he will not at any time, either during the term of this Agreement
or
thereafter, divulge to any person or entity any Confidential Information
obtained or learned by him as a result of his employment with the Company,
except (i) in the course of performing his duties hereunder, (ii) to
the extent that any such information is in the public domain other than as
a
result of Executive’s breach of any of his obligations hereunder,
(iii) where required to be disclosed by court order, subpoena or other
government process or (iv) if such disclosure is made without Executive’s
knowing intent to cause material harm to the Company. If Executive shall be
required to make disclosure pursuant to the provisions of clause (iii) of the
preceding sentence, Executive promptly, but in no event more than 72 hours
after
learning of such subpoena, court order, or other government process, shall
notify, by personal delivery or by electronic means, confirmed by mail, the
Company and, at the Company’s expense, Executive shall: (a) take reasonably
necessary and lawful steps required by the Company to defend against the
enforcement of such subpoena, court order or other government process, and
(b)
permit the Company to intervene and participate with counsel of its choice
in
any proceeding relating to the enforcement thereof.
4.3 Upon
termination of his employment with the Company, Executive will promptly deliver
to the Company all memoranda, notes, records, reports, manuals, drawings,
blue-prints and other documents (and all copies thereof) relating to the
business of the Company and all property associated therewith, which he may
then
possess or have under his control; provided, however, that Executive shall
be
entitled to retain one copy of such documents for his personal use and
records.
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4.4 During
the term of this Agreement and terminating three years after termination of
employment, Executive, without the prior written permission of the Company,
shall not for any reason whatsoever, anywhere in the People’s Republic of China,
(i) enter into the employ of or render any services to any person, firm or
corporation engaged in any business which is in competition with the Company’s
principal existing business at the time of termination (“Competitive
Business”);
(ii)
engage in any Competitive Business as an individual, partner, shareholder,
creditor, director, officer, principal, agent, employee, trustee consultant,
advisor or in any other relationship or capacity; (iii) employ, or have or
cause
any other person or entity to employ, any person who was employed by the Company
at the time of termination of Executive’s employment by the Company (other than
Executive’s personal secretary and assistant); or (iv) solicit, interfere with,
or endeavor to entice away from the Company, for the benefit of a Competitive
Business, any of its customers. Notwithstanding the foregoing, (i) Executive
shall not be precluded from investing and managing the investment of, his or
his
family’s assets in the securities of any corporation or other business entity
which is engaged in a Competitive Business if such securities are traded on
a
national stock exchange or in the over-the-counter market and if such investment
does not result in his beneficially owning, at any time, more than 2% of any
class of the publicly-traded equity securities of such Competitive Business
(“Permitted Competitive
Investment”);
and
(ii) during the term of this Agreement and terminating one year after
termination of Executive’s employment (except for investments in a class of
securities trading on public markets), Executive shall refer to the Company
for
consideration (before any other party) any and all Corporate Opportunities
that
arise during the term of this Agreement or for a period of one year thereafter.
If the Company determines not to exploit any Corporate Opportunity, the Company
shall determine what, if anything, should be done with such opportunity.
Executive shall not be entitled to any compensation, as a finder or otherwise,
if either the Company or Executive introduces such opportunity to other persons,
it being understood that any such compensation shall be paid to the Company.
Notwithstanding the foregoing, in the event the Company terminates this
Agreement without cause or if Executive terminates this Agreement for Good
Reason under Section 3.5 hereof, Executive’s obligations under this Section 4.4
shall terminate immediately upon such event.
4.5 If
Executive commits a breach of any of the provisions of Sections 4.2 or 4.4,
the
Company shall have the right:
(a) to
have
the provisions of this Agreement specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed by Executive that the
services being rendered hereunder to the Company are of a special, unique and
extraordinary character and that any breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company; and
(b) to
require Executive to account for and pay over to the Company all monetary
damages determined by a non-appealable decision by a court of law to have been
suffered by the Company as the result of any actions constituting a breach
of
any of the provisions of Section 4.2 or 4.4, and Executive hereby agrees to
account for and pay over such damages to the Company (up to the maximum of
all
payments made under the Agreement).
6
(c) to
not
perform any obligation owed to Executive under this Agreement, to the fullest
extent permitted by law. Company shall also have the right, to the fullest
extent permitted by law, to adjust any amount due and owing or to be due and
owing to Executive, whether under this Agreement or any other agreement between
Company and Executive in order to satisfy any losses to Company as a result
of
Executive’s breach.
4.6 If
Executive shall violate any covenant contained in Section 4.4, the duration
of
such covenant so violated shall be automatically extended for a period of time
equal to the period of such violation.
4.7 If
any
provision of Sections 4.2 or 4.4 is held to be unenforceable because of the
scope, duration or area of its applicability, the tribunal making such
determination shall not have the power to modify such scope, duration, or area,
or all of them and such provision or provisions shall be void ab
initio.
5. Miscellaneous
Provisions.
5.1 All
notices provided for in this Agreement shall be in writing, and shall be deemed
to have been duly given when delivered personally to the party to receive the
same, when transmitted by electronic means, or when mailed first class postage
prepared, by certified mail, return receipt requested, addressed to the party
to
receive the same at his or its address set forth below, or such other address
as
the party to receive the same shall have specified by written notice given
in
the manner provided for in this Section 5.1. All notices shall be deemed to
have
been given as of the date of personal delivery, transmittal or mailing
thereof.
| If to Executive: |
Xxxxxxx
Xx
|
|
Room
10601, Jiezuo Plaza, Xx. 0
|
|
Xxxxxxx
Xxxx Xxxxx
|
|
Xxxxxx
Xxxxxxxx, Xxxx Xxxxxxxx, Xxxxx
|
| Fax: |
| If to the Company: |
|
Room
10601, Jiezuo Plaza, Xx. 0
|
|
Xxxxxxx
Xxxx Xxxxx
|
|
Xxxxxx
Xxxxxxxx, Xxxx Xxxxxxxx, Xxxxx
|
| Fax: |
5.2 In
the
event of any claims, litigation or other proceedings arising under this
Agreement (including, among others, arbitration under Section 3.4), Executive
shall be reimbursed by the Company within thirty (30) days after delivery to
the
Company of statements for the costs incurred by Executive in connection with
the
analysis, defense and prosecution thereof, including reasonable attorneys’ fees
and expenses; provided, however, that Executive shall reimburse the Company
for
all such costs if it is determined by a non-appealable final decision of a
court
of law that Executive shall have acted in bad faith with the intent to cause
material damage to the Company in connection with any such claim, litigation
or
proceeding.
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5.3 The
Company, shall to the fullest extent permitted by law, indemnify Executive
for
any liability, damages, losses, costs and expenses arising out of alleged or
actual claims (collectively, “Claims”)
made
against Executive for any actions or omissions as an officer and/or director
of
the Company or its subsidiary. To the extent that the Company obtains director
and officers insurance coverage for any period in which Executive was an
officer, director or consultant to the Company, Executive shall be a named
insured and shall be entitled to coverage thereunder.
5.4 The
provision of Article 4, Sections 5.2 and 5.3 and any provisions relating to
payments owed to Executive after termination of employment shall survive
termination of this Agreement for any reason.
5.5 This
Agreement sets forth the entire agreement of the parties relating to the
employment of Executive and is intended to supersede all prior negotiations,
understandings and agreements. No provisions of this Agreement may be waived
or
changed except by a writing by the party against whom such waiver or change
is
sought to be enforced. The failure of any party to require performance of any
provision hereof or thereof shall in no manner affect the right at a later
time
to enforce such provision.
5.6 All
questions with respect to the construction of this Agreement, and the rights
and
obligations of the parties hereunder, shall be determined in accordance with
the
law of the British Virgin Islands applicable to agreements made and to be
performed entirely in the British Virgin Islands.
5.7 This
Agreement shall inure to the benefit of and be binding upon the successors
and
assigns of the Company. This Agreement shall not be assignable by Executive,
but
shall inure to the benefit of and be binding upon Executive’s heirs and legal
representatives.
5.8 Should
any provision of this Agreement become legally unenforceable, no other provision
of this Agreement shall be affected, and this Agreement shall continue as if
the
Agreement had been executed absent the unenforceable provision.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the
date first above written.
|
“COMPANY”
|
“EXECUTIVE”
|
|
XXXXXXX
XX
|
|
|
By:
/s/
Xxxxxxx
Xx
|
By:
/s/
Xxxxxxx
Xx
|
|
Title:
Chairman
of the Board of Directors
|
|
9
