EMPLOYMENT AGREEMENT
Exhibit 10.7
THIS AGREEMENT is dated as of the 20th day of August, 2017 by and between Cenntro Automotive Group Limited, a Cayman Islands
corporation (the “Company”), and, Mr. Xxxx Xx (“Executive”).
W I T N E S S E T H:
WHEREAS, the Company is desirous of engaging Mr. Xxxx Xx as its Chief Financial Officer and he is agreeable to being so appointed on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, the parties agree as follows:
1. Effective Date of Agreement. This Agreement and the obligations of the parties to adhere to the terms and conditions contained herein shall not be deemed effective until (i) the earlier of
30 days from the date of this Agreement, or (ii) the date that the Executive has resolved any prior conflicts with his ability to assume his duties under the terms of this Agreement.
2. Employment and Duties.
(a) Subject to the terms and conditions
hereinafter set forth, the Company hereby employs Mr. Xxxx Xx as its Chief Financial Officer. During the Term, as hereinafter defined, Executive shall report to the Company’s Chief Executive Officer. Executive shall also perform such other duties
and responsibilities as may be determined by the Company’s board of directors and Chief Executive Officer, as long as such duties and responsibilities are consistent with those of the Company’s Chief Financial Officer.
(b) Unless terminated earlier as provided in
Section 5 of this Agreement, this Agreement shall have an initial term (the “Initial Term”) commencing as of (i) the earlier of 30 days from the date of this Agreement, or (ii) the date that the Executive has resolved any prior conflicts with his
ability to assume his duties under the terms of this Agreement, and expiring on August 19, 2022, and continuing on a year-to-year basis thereafter unless terminated by either party on not less than thirty (30) days notice prior to the expiration of
the Initial Term or any one-year extension. The Initial Term and the one-year extensions are collectively referred to as the “Term.”
3. Performance. Executive hereby accepts the employment contemplated by this Agreement. During the Term, he shall devote substantially all of his business time to the performance of his duties
under this Agreement, and shall perform such duties diligently, in good faith and in a manner consistent with the best interests of the Company.
4. Compensation and Other Benefits.
For his services to the Company during the Term, the Company shall (a) pay Executive an annual salary (“Salary”), and (b) grant to Executive
an option (“Option”) to purchase the Company’s common stock. Executive’s Salary and terms of the Option will be discussed and determined separately.
All Salary payments shall be payable in equal monthly installments at the end of each calendar month, as the Company regularly pays its
employees in accordance with normal payroll practices.
The Company shall reimburse Executive, upon presentation of proper expense statements, for all authorized, ordinary and necessary
out-of-pocket expenses reasonably incurred by Executive during the Term in connection with the performance of his services pursuant to this Agreement hereunder in accordance with the Company’s expense reimbursement policy.
5. Termination of Employment.
(a) This Agreement and Executive’s employment
hereunder shall terminate immediately upon his death.
(b) This Agreement and Executive’s employment
pursuant to this Agreement, may be terminated by him or the Company on not less than thirty (30) days’ written notice in the event of Executive’s Disability. The term “Disability” shall mean any illness, disability or incapacity of Executive which
prevents him from substantially performing his regular duties for a period of two (2) consecutive months or three (3) months, even though not consecutive, in any twelve (12) month period.
(c) The Company may terminate this Agreement
and Executive’s employment pursuant to this Agreement for cause with no notice. The term “cause” shall mean:
(i) Repeated failure to perform
material instructions from the Company’s board of directors and/or Chief Executive Office, provided that such instructions are reasonable and consistent with his duties as set forth in Section 1 of this Agreement or any other failure or refusal by
Executive to perform his duties required by said Section 1; provided, however, that Executive shall have received notice from the Board specifying the nature of such failure in reasonable detail and he shall have failed to cure the failure within
ten (10) business days after receipt of such notice:
(ii) a breach of Section 6 or 7 of this Agreement;
(iii) a breach of trust whereby
Executive obtains personal gain or benefit at the expense of or to the detriment of the Company;
(iv) his use of illegal substances;
(v) his abuse of alcohol continuing
after written notice from the board of directors or the Company’s Chief Executive Officer or ;
(vi) any fraudulent or dishonest conduct
by Executive or any other conduct by him, which damages the Company or any of its affiliates or their property, business or reputation;
(vii) a conviction of or plea of nolo contendere by Executive of (A) any felony or (B) any other crime involving fraud, theft,
embezzlement or use or possession of illegal substances; or
(viii) the admission by Executive of any matters set forth in Section 5(c)(vii) of this Agreement.
(d) Executive’s resignation prior to the
expiration of the Term, other than for Good Reason shall be treated in the same manner as a termination for cause. The term “Good Reason” shall mean:
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(i)
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Any material breach by the Company of its obligations under this Agreement which are not cured within ten (10) business days after notice from Executive which sets forth in
reasonable detail the nature of the breach.
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| (ii) |
Any change in Executive’s duties such that Executive is no longer the Company’s Chief Financial Officer, unless such change was made with his consent.
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| (iii) |
Any action on the part of the Company which impairs Executive’s ability to exercise his duties as the Company’s Chief Financial Officer.
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6. Trade Secrets and Proprietary Information. Executive recognizes and acknowledges that the Company, through the expenditure of considerable time and money, has developed and will continue to
develop in the future information concerning customers, clients, marketing, products, services, business, research and development activities and operational methods of the Company and its customers or clients, contracts, financial or other data,
technical data or any other confidential or proprietary information possessed, owned or used by the Company, the disclosure of which could or does have a material adverse effect on the Company, its business, any business it proposes to engage in,
its operations, financial condition or prospects and that the same are confidential and proprietary and considered “confidential information” of the Company for the purposes of this Agreement. In consideration of his employment and engagement as
Chief Financial Officer, Executive agrees that he will not, during or after the Term, without the consent of the Company’s Chief Executive Officer, make any disclosure of confidential information now or hereafter possessed by the Company, to any
person, partnership, corporation or entity either during or after the term here of, except that nothing in this Agreement shall be construed to prohibit him from using or disclosing such information (a) if such disclosure is necessary in the normal
course of the Company’s business in accordance with Company policies or instructions or authorization from the board of directors or executive committee, (b) such information shall become public knowledge other than by or as a result of disclosure
by a person not having a right to make such disclosure, (c) complying with legal process; provided, that in the event he is required to make disclosure pursuant to legal process, he shall give the Company prompt notice thereof and the opportunity
to object to the disclosure, or (d) subsequent to the Term, if such information shall have either (i) been developed by him independent of any of the Company’s confidential or proprietary information or (ii) been disclosed to him by a person not
subject to a confidentiality agreement with or other obligation of confidentiality to the Company. For the purposes of Sections 6 and 7 of this Agreement, the term “Company” shall include the Company, its parent, its subsidiaries and its
affiliates.
7. Covenant Not To Solicit or Compete.
(a) During the period from the date of this
Agreement until two (2) years following the date on which Executive’s employment is terminated, he will not, directly or indirectly:
(i) Be employed by or otherwise
serve (including but not limited to as a director of the board, a founder or co-founder) in any other entities in the industry or business of electric vehicles;
(ii) Persuade or attempt to persuade
any person or entity which is or was a customer, client or supplier of the Company to cease doing business with the Company, or to reduce the amount of business it does with the Company (the terms “customer” and “client” as used in this Section 7
to include any potential customer or client to whom the Company submitted bids or proposals, or with whom the Company conducted negotiations, during the term of Executive’s employment hereunder or during the twelve (12) months preceding the
termination of his employment);
(iii) solicit for himself or any other
person or entity other than the Company the business of any person or entity which is a customer or client of the Company, or was a customer or client of the Company within one (1) year prior to the termination of his employment; or
(iv) persuade or attempt to persuade
any employee of the Company, or any individual who was an employee of the Company during the two (2) year period prior to the lawful and proper termination of this Agreement, to leave the Company’s employ, or to become employed by any person or
entity other than the Company.
(b) Executive acknowledges that the
restrictive covenants (the “Restrictive Covenants”) contained in Sections 6 and 7 of this Agreement are a condition of his employment are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines
that any of the Restrictive Covenants, or any part of any of the Restrictive Covenants, is invalid or unenforceable, the remainder of the Restrictive Covenants and parts thereof shall not thereby be affected and shall remain in full force and
effect, without regard to the invalid portion. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable because of the geographic or temporal scope of such provision, such court shall have the
power to reduce the geographic or temporal scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.
8. Miscellaneous.
(a) Executive represents, warrants, covenants
and agrees that he has a right to enter into this Agreement, that he is not a party to any agreement or understanding, oral or written, which would prohibit performance of his obligations under this Agreement, and that he will not use in the
performance of his obligations hereunder any proprietary information of any other party which he is legally prohibited from using.
(b) This Agreement shall in all respects be
construed and interpreted in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware applicable to contracts executed and to be performed wholly within such State, without regard to principles of
conflicts of laws.
(c) If any term, covenant or condition of
this Agreement or the application thereof to any party or circumstance shall, to any extent, be determined to be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law, and any
court having jurisdiction may reduce the scope of any provision of this Agreement, including the geographic and temporal restrictions set forth in Section 7 of this Agreement, so that it complies with applicable law.
(d) This Agreement constitutes the entire
agreement of the Company and Executive as to the subject matter hereof, superseding all prior or contemporaneous written or oral understandings or agreements, including any and all previous employment agreements or understandings, all of which are
hereby terminated, with respect to the subject matter covered in this Agreement. This Agreement may not be modified or amended, nor may any right be waived, except by a writing which expressly refers to this Agreement, states that it is intended to
be a modification, amendment or waiver and is signed by both parties in the case of a modification or amendment or by the party granting the waiver. No course of conduct or dealing between the parties and no custom or trade usage shall be relied
upon to vary the terms of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
(e) This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, successors, executors, administrators and permitted assigns.
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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above written.
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CENNTRO AUTOMOTIVE GROUP LIMITED
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| By: /s/ Xxxxx X. Xxxx |
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| Name: | Xxxxx X. Xxxx | |
| Title: |
Chairman, and Chief Executive Officer | |
| Executive: /s/ Xxxx Xx | ||
