JUNE 6, 2006 BEIJING HOLLYSYS CO., LTD.
Draft:
27
June
2006
JUNE
6, 2006
BEIJING
HOLLYSYS CO., LTD.
KEY
EMPLOYEE EMPLOYMENT
AGREEMENT
(MANAGEMENT
EMPLOYEES)
THIS
KEY EMPLOYEE EMPLOYMENT AGREEMENT (Management Employees)
is made
on June 6,2006
BETWEEN:
(1) Beijing
HollySys Co., Ltd.
(the
Company),
a
company established in the PRC with its registered address at Xx. 00,
Xxxxxxxxxxxx Xxxxx Xx, Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, XXX; and
(2) Wang
Changli (the Employee),
a
national of the PRC [with PRC identification number
110108196311162410].
IT
IS
AGREED as follows:
1. DEFINITIONS
1.1 In
this
Agreement, the following expressions shall have the following
meanings:
Agreement
means
this Employment Agreement.
Agreement
Period
is
defined in clause 5.1.
Employment
means
the Employee’s employment in accordance with the terms of this
Agreement.
Parties
means
the Employee and the Company and a Party
means
any of them.
PRC
means
the People’s Republic of China, which for the purposes of this Agreement does
not include the Hong Kong Special Administrative Region, Taiwan or the Macao
Special Administrative Region.
2. TITLE
AND
DUTIES
2.1 The
Employee shall be employed by the Company as Chief Executive Officer. The
Employee shall report to the Board of Directors.
2.2 The
Employee will perform such duties and exercise such powers as the Company may
from time to time assign to him. During the Employment, the Employee will well
and faithfully serve the Company.
2.3 During
the Employment, the Employee shall not (without the Company’s written consent)
remain or become a director or employee of any company which is not an affiliate
or subsidiary of the Company, nor be directly or indirectly engaged, concerned
or interested in any other business, trade or occupation.
2.4 During
the Employment, the Employee shall abide by the work rules of the
Company.
1
3. PLACE
OF
WORK
The
Employee shall be based at the Company’s principal site at its registered
address in the PRC.
4. HOURS
OF
WORK
The
Employee is a full-time and key employee of the Company and shall work the
hours
as are required in the proper performance of his duties or as required of him
by
the Company. The Employee acknowledges that the reasonable remuneration for
any
travel time or for any further hours in excess of the Company’s normal business
hours as the Employee may be required to work in accordance with this clause
4
has been included into the Employee’s salary and benefits in clause 6 below, and
that he has no entitlement to additional remuneration for any overtime
work.
5. TERM
5.1 Subject
to clause 13 below, the Employment is for a fixed term of 3 years beginning
on
the date of the consummation of the stock purchase under the Stock Purchase
Agreement entered into by and between Chardan North China Acquisition
Corporation, Shanghai Jinqiaotong Industrial Develompent Co., Wang Changli,
ChengWusi, Xxx An, Team Spirit Indistrioal Limited and OSCAF International
Co.,
Ltd. dated as of February 2, 2006 (the Agreement
Period).
5.2 The
Employment expires without prior notice at the end of the Agreement Period.
No
later than 6 months prior to the expiration, discussions between the Parties
will be held to determine whether the Employment should be prolonged or
terminated.
6. SALARY
AND
BENEFITS
6.1 The
Employee’s salary is US$50,000 per annum net of PRC personal income tax
withholdings payable in equal installments monthly in arrears. The Company
shall
withhold from the Employee’s gross salary any PRC personal income tax in
accordance with relevant PRC laws and regulations.
6.2 The
Employee’s salary will be reviewed on December of each year, starting at the
effective date of the Agreement. The Company is under no obligation to increase
the Employee’s salary following such review.
6.3 During
the Agreement Period, the Company, in its sole discretion, may award to the
Employee an annual bonus based on the Employee’s performance, the Company’s
performance, and other factors deemed relevant by the Company’s compensation
committee of the board of directors.
6.4 During
the Employment, the Company shall make contributions to government-mandated
social insurance funds as required under applicable law. The Company shall
have
the right to deduct from the Employee’s salary any contributions the Employee is
required to make to such social insurance funds under applicable
law.
2
6.5 The
Employee agrees that the Company has the right to deduct from his salary or
any
other payments due to him (including any payment due upon the termination of
his
employment) any sums which may come due from the Employee to the
Company.
7. TAX
7.1 The
Employee shall be responsible for effecting payment of all taxes, social
security contributions payable by the Employee and fees for which he is liable
on the income and benefits earned under this Agreement [save that the Company
shall be liable to withhold PRC personal income tax from the Employee’s gross
salary in accordance with clause 6.1 pursuant to applicable PRC laws and
regulations]. The Company shall have no obligation to provide extra compensation
over and above the amounts specified in this Agreement to offset any tax
liabilities, social security contributions payable by the Employee and fees
of
the Employee for which he is liable.
8. EXPENSES
8.1 Compensation
for traveling expenses which the Employee properly and necessarily incurs in
the
course of his Employment will be paid in accordance with the relevant rules
of
the Company for the time being in force. Such reimbursement shall be subject
to
the Employee producing official receipts evidencing payment.
9.
HOLIDAYS
9.1 The
Employee is entitled to five (5) weeks paid holiday per calendar year during
his
Employment (plus bank and public holidays in the PRC), to be taken at such
reasonable time or times as may be approved by the Company. The right to
paid
holiday will accrue pro-rata during each calendar year of the Employment.
The
Employee is not entitled to carry forward untaken holiday from one calendar
year
to the next.
10. SICKNESS
10.1 Subject
to the Employee’s compliance with the Company’s policy on notification and
certification of periods of absence from work, the Employee will continue to
be
paid his full salary during any period of absence from work due to sickness
or
injury for a period of a total of up to 20 days.
10.2 The
Employee agrefes that he will, whenever requested by the Company, undergo a
medical examinaf on by a doctor appointed by the Company (provided
that
the
costs
of all such examinations are paid for by the Company). The Company will be
entitled to receive a copy of any report produced in connection with all such
examinations and to discuss the contents of the report with the doctor who
produced it.
11. INTELLECTUAL
PROPERTY
11.1 The
Employee agrees that all Work Product (as defined below) shall be the sole
property of the Company. The Employee agrees to waive, and hereby waives and
irrevocably and exclusively assigns to the Company all right, title and interest
he has or may have in or to any other Work Product, and to the extent that
such
rights may not be waived or assigned, agrees not to assert such rights against
the Company or its licensees (and sublicensees), successors or
assigns.
3
11.2 The
Employee agrees to promptly disclose all Work Product to the appropriate
individuals in the Company as such Work Product is created in accordance with
the requirements of his job and as directed by the Company.
11.3 “Work
Product” means any and all inventions, improvements, developments, concepts,
ideas, expressions, processes, prototypes, plans, drawings, designs, models,
formulations, specifications, methods, techniques, shop-practices, discoveries,
innovations, creations, technologies, formulas, algorithms, data, computer
databases, reports, laboratory notebooks, papers, writings, photographs, source
and object codes, software programs, other works of authorship, and know-how
and
show-how, or parts thereof conceived, developed, or otherwise made by the
Employee alone or jointly with others (i) during the period of the
employment with the Company or (ii) during the six month period next
succeeding the termination of the employment with the Company if the same in
any
way relates to the present or proposed products, programs or services of the
Comp or to tasks assigned to the Employee during the course of the employment,
whether or not patentable or subject to copyright or trademark protection,
whether or not reduced to tangible form or reduced to practice, whether or
not
made during regular working hours, and whether or not made on Company
premises.
11.4 It
shall
be part of the Employee’s normal duties or other duties specifically assigned to
him at all times, whether or not during the Company’s normal business hours and
whether or not performed at the Employee’s normal place of work, to consider in
what manner and by what new methods or devices the products, services,
processes, equipment or systems of the Company or its affiliates with which
he
is concerned or for which he is responsible might be improved and to originate
designs (whether registrable or not) or patentable work or other work in which
copyright, trademark right or patent rights may subsist.
Accordingly:
| (a) |
the
Employee shall forthwith disclose full details of the same in confidence
to the Company or its affiliates and shall regard himself in relation
thereto as a trustee for the Company or its
affiliates;
|
| (b) |
the
Employee hereby acknowledges that all works created during Employment
are
created mainly using the material, know-how and technical resources
of the
Company or its affiliates;
|
| (c) |
all
intellectual property rights in such designs or works shall vest
absolutely in the Company or its affiliates which shall be entitled,
so
far as the law permits, to the exclusive use
thereof;
|
| (d) |
notwithstanding
(c) above, the Employee shall at any time assign to the Company or
its
affiliates any copyright, trademark right or patent rights (by way
of
assignment of copyright, trademark right or patent rights) and other
intellectual property rights in respect of all works written, originated,
conceived or made by the Employee during the continuance of the
Employment; and
|
4
| (e) |
the
Employee agrees and undertakes that at any time during or after the
termination of the Employment he will execute such documents and
do all
such acts and things as the Company or its affiliates may deem necessary
or desirable to substantiate its rights in respect of the matters
referred
to above including for the purpose of obtaining letters patent, copyright
or trademark registration or other privileges in all such jurisdictions
as
the Company or its affiliates may
require.
|
12. GRIEVANCE
AND DISCIPLINARY
PROCEDURES
12.1 If
the
Employee has any grievance relating to the Employment, he may seek redress
orally or in writing by referring the grievance to the Company.
12.2 The
disciplinary rules and procedures of the Company in force from time to time
can
be obtained from Human Resources Department.
13. TERMINATION
AND SUSPENSION
13.1 The
Company may terminate the Employment by written notice to the Employee,
effective immediately upon the delivery of such notice, with no liability to
make any further payment to the Employee (other than in respect of amounts
accrued due at the date of termination) if the Employee:
| (a) |
commits
any serious or repeated breach of any of his obligations under this
Agreement;
|
| (b) |
is
guilty of misconduct, negligence or omission which, in the Company’s
opinion, has damaged or may damage the business or affairs of the
Company
or an affiliate or subsidiary of the
Company;
|
| (c) |
engages
in conduct which, in the Company’s reasonable opinion, brings or is likely
to bring the Employee, the Company or an affiliate or subsidiary
of the
Company into disrepute;
|
| (d) |
engages
in conduct which, in the Company’s reasonable opinion, could be
characterized as competing with the Company, including, but not limited
to, as described in Article 15
herein;
|
| (e) |
violates
the obligations of Confidentiality, as described
herein;
|
| (f) |
is
convicted of a criminal offence (other than a road traffic offence
not
subject to a custodial sentence);
|
5
| (g) |
is
declared bankrupt or makes any arrangement with or for the benefit
of his
creditors; or
|
| (h) |
any
other cause provided by law as grounds for summary
termination.
|
This
clause shall not restrict any other right the Company may have to terminate
the
Employment summarily. Any delay by the Company in exercising its rights under
this clause shall not constitute a waiver of those rights.
13.2 If
(due
to illness or otherwise) the Employee cannot properly and effectively perform
his duties under this Contract for a period of 180 consecutive days during
any
consecutive twelve (12) month period, the Company may terminate the Employment
forthwith by giving the Employee written notice prior to the date Employee
resumes the rendering of services hereunder, and salary and all benefits will
cease as of the date of termination, and the Company shall pay the Employee
six
month’s salary as severance pay.
13.3 The
Company may in its absolute discretion suspend the Employee from the Employment
on full salary during any period in which the Company is carrying out an
investigation into any acts or defaults (or alleged or suspected acts or
defaults) of the Employee.
13.4 Upon
termination of the Employment for whatever reason the Employee will deliver
to
the Company all books, documents, papers, materials, credit cards and other
property relating to the business of the Company which may then be in his
possession or under his power or control.
13.5 The
Employee will not at any time after termination of the Employment represent
himself as being in any way connected with or interested in the business of,
or
employed by, the Company or any of its affiliates.
14. RESTRAINT
ON ACTIVITIES AND CONFIDENTIALITY
14.1 During
the Employment the Employee will not (without the prior written consent of
the
Company) be directly or indirectly engaged or interested in any capacity in
any
other business, trade or occupation whatsoever.
14.2 For
3
years from the end of the Employment, the Employee shall not solicit or entice
or endeavour to solicit or entice from the Company, any individual who is
employed or engaged by the Company.
14.3 During
the Employment and for 3 years from the end of the Employment, the Employee
shall not approach clients, customers or contacts of the Company or other
persons or entities introduced to him in his capacity as a representative of
the
Company in order to do business with them or encourage them to terminate their
relationships with the Company, or, on his own behalf, or as owner, manager,
shareholder, consultant, director, officer or employee of or in any other manner
connected with any business entity, participate or be involved in any competitor
of the Company in or outside of the PRC without the prior written authorization
of the Company. For each year or portion thereof during which the provisions
of
this section apply, the Company shall pay the Employee statutory
compensation.
6
14.4 Save
insofar as such information is already in the public domain, the Employee will
keep secret and will not either during or after the termination of the
Employment use or reveal to any person, firm, company or organisation any
information which he knows or ought reasonably to have known to be confidential,
concerning the business or affairs of the Company or of any of the Company’s
affiliates or any of its or their customers. The Employee shall at all times
during and after tie termination of the Employment use his best endeavours
to
prevent the publication or disclosure of such confidential information. The
restrictions in this clause shall not apply to any disclosure or use authorised
by the Company or required by law or by the Employment.
14.5 All
notes, memoranda, records and writings (including photocopies and electronic
reproductions) made by the Employee in the course of the Employment are and
remain the Company’s exclusive property. The Employee shall turn them over to
the Company on demand and in any event at the end of the
Employment.
15. MISCELLANEOUS
15.1 This
Agreement shall be effective upon signing by the Parties. The Parties agree
that
the rights and obligations set forth in clauses 11, 13.2, 13.5, 16 and 17 shall
survive the termination of this Agreement.
15.2 This
Agreement, together with any documents referred to in this Agreement,
constitutes the entire agreement and understanding between the Parties and
supersedes all other agreements both oral and in writing between the Company
and
the Employee (other than those expressly referred to herein), including without
limitation any and all service or employment contracts or related arrangements
existing between the Company and the Employee prior to the Employment. The
Employee acknowledges that he has not entered into this Agreement in reliance
upon any representation, warranty or undertaking which is not set out in this
Agreement.
15.3 The
Employee represents and warrants to the Company that he will not by reason
of
entering into the Employment or performing this Agreement be in breach of any
terms of employment (express or implied) with a third party or of any other
obligation binding on him.
15.4 If
any
provision of this Agreement is held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
shall not in any way be impaired. The Parties shall then use all reasonable
endeavours to replace the invalid or unenforceable provisions by a valid and
enforceable substitute provision the effect of which is as close as possible
to
the intended effect of the invalid or unenforceable provision.
7
15.5 Three
signed copies of this Agreement have been made. The Company shall keep two
signed copies and the Employee shall keep one signed copy. Each signed copy
shall be deemed an original without production of the others.
16. NOTICES
16.1 Notice
under these terms and conditions will be treated as having been given if sent
by
ordinary first class post, by the Employee to the Company’s registered office or
by the Company to the Employee at his last known address, as appropriate, and
will be deemed to be given on the day when it would ordinarily be delivered
after such posting.
17. GOVERNING
LAW AND DISPUTE
RESOLUTION
17.1 This
Agreement is governed by, and construed in accordance with, the published laws
of the PRC.
17.2 Any
dispute, controversy, or claim arising out of or relating to this Agreement,
or
the breach, termination or invalidity thereof, shall be settled by relevant
labor arbitration proceedings.
17.3 During
arbitration, the parties shall, with the exception of the matters in dispute,
continue to perform their obligations under this Agreement.
IN
WITNESS WHEREOF,
the
Parties have caused this Agreement to be executed in three originals on the
date
above written.
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Beijing HollySys Co.,
Ltd.
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|||||||||
|
By:
|
|
Wang Changli | |||||||
|
Name:
|
|||||||||
| Title: | By: | /s/ Wang Changli | |||||||
8
CONTENTS
| CLAUSE |
PAGE
|
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|
1
|
DEFINITIONS
|
1
|
||
|
2.
|
TITLE
AND DUTIES
|
1
|
||
|
3.
|
PLACE
OF WORK
|
2
|
||
|
4.
|
HOURS
OF WORK
|
2
|
||
|
5.
|
TERM
|
2
|
||
|
6.
|
SALARY
AND BENEFITS
|
2
|
||
|
7.
|
TAX
|
3
|
||
|
8.
|
EXPENSES
|
3
|
||
|
9.
|
HOLIDAYS
|
3
|
||
|
10.
|
SICKNESS
|
3
|
||
|
11.
|
INTELLECTUAL
PROPERTY
|
3
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||
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12.
|
GRIEVANCE
AND DISCIPLINARY PROCEDURES
|
5
|
||
|
13.
|
TERMINATION
AND SUSPENSION
|
5
|
||
|
14.
|
RESTRAINT
ON ACTIVITIES AND CONFIDENTIALITY
|
6
|
||
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15.
|
MISCELLANEOUS
|
7
|
||
|
16.
|
NOTICES
|
8
|
||
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17.
|
GOVERNING
LAW AND DISPUTE RESOLUTION
|
8
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