CHINA HOLDINGS, INC. EXECUTIVE EMPLOYMENT AND SERVICE CONTRACT
Exhibit
10.1
THIS
EXECUTIVE EMPLOYMENT AND SERVICE CONTRACT (“CONTRACT”) is made as of the
18th day of December, 2007, by and between China Holdings, Inc., a
Nevada corporation, with its principal place of business at 000 Xxxxxxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000-0000, U.S.A. (“CH” or
“Company”); and Xx. Xxxxxxx X. Fu (“Executive”).
WHEREAS,
CH desires to employ Executive, and Executive is willing to accept such
employment (the “Employment”) upon the terms and conditions hereinafter set
forth;
WHEREAS, CH
also desires to retain Executive for certain services (the “Services”) in
connection with joint ventures, mergers and acquisitions in the People’s
Republic China (“China” or the “PRC”) as well as raising capital by CH for such
joint ventures, mergers and acquisitions.
NOW,
THEREFORE, in consideration of the premises and of the agreements hereinafter
contained, the parties agree as follows:
1.
Position and Duties. The Company hereby
affirms its employment of Executive as its President, to perform the duties
and functions as are specified by the Company’s ByLaws, under the authority of
the Board of Directors as selected and approved by the majority of the
shareholders.
In
addition to performing the duties and exercising the powers in connection with
the business of the Company which the Board of Directors may from time to time
assign to the Executive, the Executive shall further exercise the power and
the
business of any associated and/or subsidiary companies of the Company, as may
be
requested by the Board of Directors from time to time.
Executive
hereby accepts such continued employment and, during the Employment Term shall
perform his duties (as set forth herein) in a diligent, trustworthy, loyal,
businesslike and efficient manner, all for the purpose of advancing the business
of the Company and increase shareholder value.
2.
Term. The commencement date of this
CONTRACT is December 18, 2007, and shall continue on for a term of five (5)
years, or until he resigns or is terminated in accordance with Section 5 of
this CONTRACT.
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3.
Compensation. As compensation for his
services, Executive shall receive the following compensation, expense
reimbursement and other benefits:
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a.
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Base
Salary. For all services rendered
by Executive pursuant to this CONTRACT, the Company shall pay Executive
an
annual salary of US$200,000, which shall be accumulated from December
18,
2007, and shall become fully payable upon raising capital by CH in
the
amount that is not less than US$3 million. In addition, the
Company hereby affirms its nomination by the management of the Company,
election and/or appointment of Executive as its Director upon the
success
of raising capital by CH in the amount that is not less than US$3
million.
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The
Executive hereby agrees to waive his base salary in the event that the Executive
terminates the Contract prior to the first success of raising capital in any
amount by CH after the commencement of this CONTRCT.
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b.
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Signing-In
and Performance Stock
Bonuses. (i) Executive shall be
entitled to a signing-in common stock bonus in the amount of (1)
3,000,000
shares of common stock of the Company which is restricted under the
SEC
Rule 144, to be issued to Executive upon signing this CONTRACT and
(2)
1,000,000 shares of common stock of the Company which shall be freely
tradable upon the effectiveness of an amended S-8 registration filing
and
which shall be issued to the Executive immediately upon the effectiveness
of the amended S-8 registration filing. The Company shall file
such S-8 registration as soon possible without undue
delay. (ii) In addition, Executive shall be entitled to an
additional signing-in common stock bonus in the amount of (1) additional
3,000,000 shares of common stock of the Company which is restricted
under
the SEC Rule 144, to be issued to Executive either on July 18, 2008
or
upon raising capital by CH in the amount that is not less than US$3
million, whichever occurs earlier and (2) additional 1,000,000 shares
of
common stock of the Company which shall be freely tradable upon the
effectiveness of an amended S-8 registration filing and which shall
be
issued to Executive either on July 18, 2008 or upon raising capital
by CH
in the amount that is not less than US$3 million, whichever occurs
earlier. The Company shall file such amended S-8 registration
as soon possible without undue delay. (iii) Furthermore,
Executive is also entitled to a performance common stock bonus in
the
amount of 10,000,000 shares of common stock of the Company upon raising
capital by CH in the total amount in aggregate that is not less than
US$8
million, and such stock bonus shall be issued to the Executive no
less
than fifteen (15) business days from the date when the funds are
deposited
into the Company’s bank account.
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c.
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Quarterly
and Annual Stock Options. Executive shall be entitled to
annual option, vested quarterly, in the amount and under the terms
and
conditions as follows:
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1).
During the 1st year
of this Contract (i.e., from December 18,
2007 to December 17, 2008), the Company
shall issue 2 million common stock options at the exercising price of $0.10
per
share as SEC 144 Rule, to be vested quarterly with 500,000 shares per quarter,
and to be expired on and after December 17, 2010. If this Contract
terminated by the Executive before December 17, 2008, these options shall be
void and invalid, provided, however, there is no financing occurred from
December 18, 2007 to December 17, 2008).
2).
During the 2nd year
of this Contract (i.e., from December 18, 2008 to
December 17, 2009), the Company shall issue 2 million common stock
options at the exercising price of $0.20 per share as SEC 144 Rule, to
be vested quarterly with 500,000 shares per quarter, and to be expired on and
after December 17, 2013. If this Contract terminated by the Executive
before December 17, 2009, these options shall be void and invalid, provided,
however, there is no financing occurred from December 18, 2007 to December
17,
2009).
3).
During the 3rd year
of this Contract (i.e., from December 18, 2009 to
December 17, 2010), the Company shall issue 2 million common stock
options at the exercising price of $0.30 per share as SEC 144 Rule, to
be vested quarterly with 500,000 shares per quarter, and to be expired on and
after December 17, 2014. If this Contract terminated by the Executive
before December 17, 2008, these options shall be void and invalid, provided,
however, there is no financing occurred from December 18, 2007 to December
17,
2010).
4).
During the 4th year
of this Contract (i.e., from December 18, 2010 to
December 17, 2011), the Company shall issue 2 million common stock
options at the exercising price of $0.40 per share as SEC 144 Rule, to be
vested quarterly with 500,000 shares per quarter, and to be expired on and
after
December 17, 2015. If this Contract terminated by the Executive
before December 17, 2008, these options shall be void and invalid, provided,
however, there is no financing occurred from December 18, 2007 to December
17,
2011).
5).
During the
5th
year of this Contract (i.e., from December 18, 2011 to December 17,
2012), the Company shall issue 2 million common stock options at
the exercising price of $0.50 per share as SEC 144 Rule, to be vested
quarterly with 500,000 shares per quarter, and to be expired on and after
December 17, 2016. If this Contract terminated by the Executive
before December 17, 2008, these options shall be void and invalid, provided,
however, there is no financing occurred from December 18, 2007 to December
17,
2012).
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d.
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Medical
and Life Insurance
Coverage. Executive and his
immediate family shall be entitled to medical, dental, out-patient,
hospitalization, health and life insurance coverage. The Company
also
agrees to provide Executive with a term life insurance
policy. The amount of such policy shall be determined by the
Company in its sole discretion. The Company’s Board of Directors may from
time to time grant Executive further benefits. This clause,
however, shall only become applicable upon raising capital by CH
in the
total amount in aggregate that is not less than US$5
million.
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e.
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Relocation
and Moving Allowances. If
relocation is needed, Executive shall be compensated for all the
necessary
moving and relocation expenses, visa fees, regular family visit travel
expenses, and children’s education and school expenses as a result of the
move or relocation, subject to prior approval by the Chief Executive
Officer of the Company in writing.
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f.
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Annual
Leave. Executive shall be
entitled to paid annual vacation of thirty (30) days. Any
unused vacation in a particular year may be carried over into the
following year.
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g.
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Reimbursement
of Expenses. Executive shall be
reimbursed, upon submission of appropriate vouchers and supporting
documentation, for all travel, entertainment and other out-of-pocket
expenses incurred by Executive in the performance of his duties hereunder,
subject to prior approval by the Chief Executive Officer of the Company
in
writing..
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4.
Termination.
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a.
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Termination
Upon Notice. Executive’s
employment by CH may be terminated at the discretion of either the
Board
of Directors of the Company or Executive by means of written notice
given
to the other at least 90 days prior to the effective date of such
termination. Executive’s employment shall terminate immediately in the
event of Executive’s death or “Disability” (as defined
below).
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x.
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Xxxxxxxxx
Pay. In the event Executive’s
employment by CH is terminated by CH for reasons that do not constitute
“Cause” (as defined below) then:
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(i)
CH
shall continue to pay Executive his base salary (in cash, stock and options,
and
on the same dates as would have been paid had he remained an employee) at the
same rate (combined base rate and annual bonus rate per pay period as was in
effect at the time of termination) for a period of six (6) months after the
date
of termination, provided that the Company has raised capital in the amount
of no
less than US$3 million. The severance period shall increase to twelve
(12) months in the event of a Change in control of the Company.
‘Change
in Control’ shall mean (1) the consummation of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization,
if
more than 50% of the combined voting power of the continuing or surviving
entity’s securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other reorganization;
or (2) the sale, transfer or other disposition of all or substantially all
of
the Company’s assets; or (3) the consummation of transactions that result in
more than 50% of the combined voting power or beneficial interests of the
Company’s securities being owned by persons who are current stockholders of the
Company. A transaction shall not constitute a Change of Control if
its sole purpose is to change the state of the Company’s incorporation or to
create a holding company that will be owned in substantially the same
proportions by the persons who held the Company’s securities immediately before
such transaction."
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(ii)Those
options to purchase shares in CH which have been granted to Executive
by
CH, and which would have (but for such termination) vested and become
exercisable at the next vesting date following such termination,
shall
become vested as of the date of termination and (together with any
options
which have already vested) shall be exercisable for the same period
as
their original terms.
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(iii)
The performance stock bonuses set forth in Section 3.b shall survive
the
termination of this CONTRACT, for three (3) years from the date of
termination, provided the contacts with the sources of the financing
were
initiated by the Executive during the term of this Contract.
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c.
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“Cause”
Defined. For purposes of this
CONTRACT, “Cause” means: (i) a material violation of a specific
written resolution by the majority of the Board of Directors; (ii)
gross
negligence or willful misconduct by Executive as to a matter which
is
material to CH. No termination shall be for “Cause” under
clauses (i) or (ii) above unless Executive shall have first received
written notice from the Company’s Board of Directors advising Executive of
the act or omission that constitutes Cause and, if such act or omission
is
capable of cure, has continued uncured for 60 days or such longer
period for cure as is specified in CH’s notice identifying such act or
omission.
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d.
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“Disability”
Defined. For purposes of this
CONTRACT, “Disability” means that Executive shall have failed, because of
illness or incapacity, to render services of the character contemplated
by
this CONTRACT for a period of three (3) consecutive months and on
the date
of determination continues to be so disabled. The existence or
nonexistence of disability shall be determined in good faith by the Board
of Directors after notice in writing given to Executive at least
30 days
prior to such determination. During such 30-day period,
Executive shall be permitted to make a presentation to the Board
of
Directors for its consideration.
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5. Non-Disclosure
Agreement. Executive acknowledges the
interest of the company in maintaining the confidentiality
of information related to its business and shall not at any
time during the Employment Term or thereafter, regardless of the
reason
for or circumstances of termination of employment, directly or indirectly,
reveal or cause to be revealed to any person or entity the production
processes, inventions, trade secrets, customers lists or other
confidential business information obtained by him as a result of
his
employment or relationship with the Company, except when authorized
in
writing to do so by the Board of Directors of the Company;
provided, however, that the parties acknowledge that it is not the
intent
of this section to include within its subject matter (i) information
not
proprietary to the Company, or (ii) information which is in the public
domain.
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6. Non-Competition
Within
the non-competition territory, which is defined as the People’s Republic of
China (PRC) including the Hong Kong Special Administration Region
(Non-competition Territory), the Executive shall not, during the term of the
employment, directly compete with CH in the hydro-electric power industry and/or
biomass energy projects and/or mining industry (Non-competition Industries),
by
being an executive, executive director, holder to more than five per cent of
the
voting power of an entity that directly competes with CH in the Non-Competition
Industries within the Non-competition Territory, except as a beneficial
holder of shares or other securities of a corporate entity whose shares are
quoted on a recognized stock exchange.
7. General
Provisions.
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a.
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Successors;
Assignment. This CONTRACT shall
be binding upon and inure to the benefit of CH and its respective
successors and assigns, and any entity which purchases all or
substantially all of the business assets of CH, and any such other
entity
shall be deemed “CH” hereunder.
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CH
has the right to assign payment of the compensation amount to one
of its
overseas operating subsidiaries according to the location and service
provided by Executive. Company agrees that Executive shall have
to right to assign the compensation and terms of this CONTRACT to
a
consulting company designated and controlled by Executive. This
CONTRACT shall be binding upon and inure to the benefit of Executive
and
his respective successors and
assignees.
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b.
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Entire
Agreement; Modifications. This
CONTRACT constitutes the entire agreement between the parties respecting
the subject matter hereof, and supersedes all prior negotiations
agreements with respect thereto, whether written or oral. No
provision of this CONTRACT may be modified or waived except by a
written
agreement signed by the parties
hereto.
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c.
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Obligations
and Benefits. The obligations and
benefits set forth in this CONTRACT shall be binding and inure to
the
benefit of the respective parties hereto and their personal
representatives, successors and permitted
assigns.
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d.
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Governing
law. This CONTRACT shall in all
respects be interpreted, construed and governed by and in accordance
with
the laws of New York, U.S.A. and the parties hereby submit to the
exclusive jurisdiction of the New York, U.S.A.
courts.
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e.
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Severability. If
any portion or portions of this CONTRACT shall be, for any reason,
invalid
or unenforceable, the remaining portion or portions shall nevertheless
be
valid and enforceable.
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f.
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Counterparts. This
CONTRACT may be executed simultaneously in two or more counterparts,
each
of which shall be deemed an original, but all of which together shall
constitute one and the same
CONTRACT.
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6.
Notices. All
notices and other communications under this CONTRACT will be sufficient if
written and sent by registered or certified mail, return receipt requested,
in
the case of Executive, to his residence as shown on the Company’s records, and
in the case of the Company, to its registered office.
In
Witness Whereof, this CONTRACT has been executed as of the date first written
above.
EXECUTIVE:
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/s/
Xxxxxxx
X. Fu
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Xxxxxxx
X. Fu
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/s/
Julianna
Xxxxx Xx
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Julianna
Xxxxx Xx , Chairman of the Board and the Chief Executive
Officer
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Dated:
December 18, 2007
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