EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (the “Agreement”),
dated
as of September 18, 2008 is entered into by and between Energroup Holdings
Corporation, a company organized and existing under the laws of the State of
Nevada, with a principal executive office at Xx.0 Xxx Xx Xxxxxx, Xxxxxxxxx
Xxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, XXX 000000 (“Company”),
and
Zhang Yizhao (aka Philips Zhang) (“Employee”)
(collectively, the “Parties”),
and
shall become effective as of the date hereof (the “Effective
Date”)
WITNESSETH:
WHEREAS,
the Company is engaged in the business of producing, pack, selling, marketing
and distributing fresh and processed meat products to customers in the People’s
Republic of China (the “Business”);
WHEREAS,
Employee has represented to Company that he has the experience, background
and
expertise necessary to enable him to be the Chief Financial Officer of the
Company;
WHEREAS,
based on Employee’s representation and the Company’s reasonable due diligence,
the Company wishes to employ Employee as its Chief Financial Officer, and
Employee wishes to enter into such employment with the Company and to enter
into
this Agreement; and
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein,
and
for other good and valuable consideration, the Parties hereby agree as
follows:
1. DEFINITIONS.
As
used
herein, the following terms shall have the following meanings:
1.1 “Affiliate”
of
a
Person (the “Subject
Person”)
means
any other Person directly or indirectly controlling, controlled by or under
common control with the Subject Person, where “control”
means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise, and includes (a)
ownership directly or indirectly of 50% or more of the shares in issue or other
equity interests of such Person; (b) possession directly or indirectly of 50%
or
more of the voting power of such Person or (c) the power directly or indirectly
to appoint a majority of the member of the board of directors or similar
governing body of such Person, and the terms “controlling”
and
“controlled”
have
meaning correlative to the foregoing.
1.2 “Board”
means
the Board of Directors of the Company.
1.3 “Cause”
shall
have the meaning provided in Section 5.1.
1.4 “Confidential
Information”
shall
have the meaning provided in Section 7.1.
1.5 “Date
of Termination”
shall
have the meaning provided in Section 5.4
1.6 “Disability”
shall
have the meaning provided in Section 5.2
1.7 “Early
Termination”
shall
have the meaning provided in Section 5.3.
1.8 “Losses”
shall
have the meaning provided in Section 8.1.
1.9 “Notice
of Termination”
shall
have the meaning provided in Section 5.4.
1.10 “Person”,
for
the purpose of this Agreement, means an individual, corporation, joint venture,
enterprise, partnership, trust, unincorporated association, Limited Liability
Company, government or any department or agency hereof, or any other
entity.
1.11 “Prospective
Customer”
means
any Person whom has either (a) entered into a nondisclosure agreement with
the
Company or its subsidiary or Affiliate; or (b) has received a reasonably
detailed written proposal from the Company or its subsidiary or Affiliate,
and
such Person has not yet rejected such proposal.
1.12 “Salary”
shall
have the meaning provided in Section 4.1.
1.13 “Term”
shall
have the meaning provided in Section 3.
2. EMPLOYMENT.
2.1 Agreement
to Employ.
As of
the Effective Date, the Company hereby agrees to employ Employee, and Employee
hereby accepts such employment, subject to the provisions of this Agreement,
as
an officer and employee of the Company.
2.2 Duties
and Schedule.
Employee shall serve as the Chief Financial Officer of the Company. In such
position, Employee shall have such responsibilities as designated by the
Company’s Chief Executive Officer and/or the Board that are not inconsistent
with applicable laws, regulations and rules. Employee shall report directly
to
the Company’s Chief Executive Officer and/or the Board.
2.3 Specific
Powers.
In
addition to the responsibilities described above in Section 2.2, the Employee,
so long as the Employee shall act in the capacity as Chief Financial Officer
of
the Company, shall have the following specific powers:
2.3.1 The
Chief
Financial Officer shall oversee and have direct responsibility over any Company
employee or external consultant who is involved with the Company’s financial
affairs; and
2.3.2 The
Chief
Financial Officer shall:
2
2.3.2.1 have
the
authority to approve any single payment, or notified of any acceptance of a
liability, by the Company in excess of RMB 450,000; and
2.3.2.2 have
the
authority to approve cumulative payments, or be notified of any acceptance
of
liabilities, by the Company (or any subsidiary or affiliate) in excess of RMB
450,000 in any given month.
3. TERM
OF EMPLOYMENT.
Subject
to the provisions of Section 5 of this Agreement, this Agreement shall be
effective for a period commencing on the Effective Date and ending on the day
immediately preceding the Third (3rd)
anniversary of the Effective Date (the “Term”).
4. COMPENSATION.
4.1 Salary.
During
the Term, the Company shall pay Employee a salary at the annual rate of One
Hundred Eighty Thousand U.S. Dollars ($180,000) (the “Salary”),
payable in monthly installments of Fifteen Thousand Dollars ($15,000); provided
however, the Employees Salary shall be paid in RMB at the applicable inter-bank
exchange rate at the time of each monthly installment. The Board may from time
to time review and increase (but not decrease) the Employee’s Salary in its sole
discretion. A discretionary bonus, if any, may be paid each year at the sole
discretion of the Board or compensation committee thereof (if applicable).
4.2 Vacation.
Employee shall be entitled to fifteen (15) days annual paid vacation in
accordance with the vacation accrual policy of the Company, in additional to
the
official regulatory holidays.
4.3 Business
Expenses.
During
the Term, the Company in accordance with Company policies shall reimburse all
business expenses incurred by Employee in the performance of his duties
hereunder.
5. TERMINATION.
Notwithstanding any other provision of this Agreement:
5.1 For
Cause by the Company.
The
Company hereunder, may terminate the Term, and the Employee’s employment at any
time for “Cause” (as defined below) upon delivery of a “Notice of Termination”
(as defined in Section 5.4) by the Company to Employee, in which the cause
or
reason of such termination is stated. For purposes of this Agreement,
“Cause”
means,
in each case, as reasonably determined by the Board: (i) conviction of, or
entry
of a pleading of guilty or no contest by, Employee with respect to a felony
or
any lesser crime of which fraud or dishonesty is a material element; (ii)
Employee's willful dishonesty towards the Company; (iii) Employee's willful
and
continued failure to perform substantially all of his duties with the Company,
or a failure to follow the lawful direction of the Board after the Board
delivers a written demand for substantial performance and Employee neglects
to
cure such a failure to the reasonable satisfaction of the Board within fifteen
(15) days following receipt of such written demand; (iv) Employee's material,
knowing and intentional failure to comply with applicable laws with respect
to
the execution of the Company's business operations or his material breach of
this Agreement; (v) Employee's theft, fraud, embezzlement, dishonesty or similar
conduct which has resulted or is likely to result in material damage to the
Company or any subsidiaries and Affiliate; or (vi) Employee's habitual
intoxication or continued abuse of illegal drugs which materially interferes
with Employee's ability to perform his assigned duties and responsibilities.
3
If
Employee is terminated for Cause pursuant to this Section 5.1, he shall be
entitled to receive only his Salary and authorized benefits through the date
of
termination and he shall have no further rights to any compensation (including
any Salary or discretionary bonus) or any other benefits under this Agreement.
All other benefits, if any, due to Employee following Employee’s termination of
employment for Cause pursuant to this Section 5.1 shall be determined in
accordance with the plans, policies and practices of the Company; provided,
however, that Employee shall not participate in any severance plan, policy
or
program of the Company.
5.2 Disability
or Death.
The
Term and Employee’s employment hereunder, shall terminate immediately upon his
death or following delivery of a Notice of Termination by the Company to
Employee if Employee becomes physically or mentally incapacitated and is
therefore unable for a period of ninety (90) consecutive days (such incapacity
is hereinafter referred to as “Disability”).
Upon
termination of Executive’s employment hereunder for either Disability or death,
Employee or Employee’s estate (as the case may be) shall be entitled to receive
his Salary through the date of termination, any earned but unpaid vacation,
and
all other compensation and benefits that were vested through the date of
Disability or death. All other benefits, if any, due Employee following the
Employee’s termination for Disability or death shall be deterred in accordance
with the plans, policies and practices of the Company, provided, however, that
Employee (or his estate, as the case may be) shall not participate in any
severance plan, policy or program of the Company.
5.3 Early
Termination.
Both
the Company and the Employee may terminate the employment hereunder by delivery
of written notice to the other party at least thirty (30) days prior to
termination date (“Early
Termination”).
Upon
the effective date of the Early Termination, Employee shall be entitled to
(a)
accrued and unpaid vacation through such Early Termination date; and (b) all
other compensation and benefits that were vested through such Early Termination
date.
5.4
Notice of Termination.
The
“Date
of Termination”
shall
mean the applicable date on which the Employee’s employment is terminated under
this Agreement. Any purported termination of employment by the Company or
Employee (other than on account of the death of Employee) shall be communicated
by a written Notice of Termination to Employee or the Company, respectively,
delivered in accordance with Section 8.4 hereof. For purposes of this Agreement,
a "Notice
of Termination"
shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon, the date of termination, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated. The date of
termination of Employee's employment shall be the date so stated in the Notice
of Termination and shall be no less than thirty (30) days following the delivery
of a Notice of Termination; except that in the case of a termination by the
Company for Cause in accordance with the terms of Section 5.1 hereof, in which
case the date of termination of Employee’s employment may be, at the sole
discretion of the Company, be the same date as the delivery of the Notice of
Termination.
4
5.5 Payment.
The
Employee shall not be entitled to severance payments upon any termination
provided in Section 5 herein. Except as otherwise provided in this Agreement,
any payments to which the Employee shall be entitled under this Section 5,
including, without limitation, any economic equivalent of any benefit, shall
be
made as promptly as possible following the Date of Termination, but in no event
more than thirty (30) days after the Date of Termination. If the amount of
any
payment due to the Employee cannot be determined within thirty (30) days after
the Date of Termination, such amount shall be reasonably estimated on a good
faith basis by the Company, and such estimated amount shall be paid no later
than thirty (30) days after such Date of Termination. As soon as practicable
thereafter, the final determination of the amount due shall be made and any
adjustment requiring a payment to the Employee shall be made as promptly as
practicable. The payment of any amount under this Section 5 shall not affect
Employee’s rights to receive any workers’ compensation benefits.
6. EMPLOYEE’S
REPRESENTATION.
The
Employee represents and warrants to the Company that: (a) he is not subject
to
any contractual, fiduciary or other obligation which may affect the performance
of his duties under this Agreement; (b) he has terminated any and all
contractual obligation which may affect his performance under this Agreement;
and (c) his employment with the Company shall not require him to use or disclose
proprietary or confidential information of any other person or
entity.
7. NON-COMPETITION:
NON-DISCLOSURE; INVENTIONS.
7.1 Confidential
Information.
Employee acknowledges that his employment position with the Company is one
of
trust and confidence. Employee further understands and acknowledges that, during
the course of Employee's employment with the Company, Employee will be entrusted
with access to certain confidential information, specialized knowledge and
trade
secrets which belong to the Company, its subsidiaries or Affiliate, including,
but not limited to, their methods of operation and developing customer base,
its
manner of cultivating customer relations, its practices and preferences, current
and future market strategies, formulas, patterns, patents, devices, secret
inventions, processes, compilations of information, records, and customer lists,
all of which are regularly used in the operation of their business and which
Employee acknowledges have been acquired, learned and developed by them only
through the expenditure of substantial sums of money, time and effort, which
are
not readily ascertainable, and which are discoverable only with substantial
effort, and which thus are the confidential and the exclusive property of the
Company and its subsidiaries (“Confidential
Information”).
Employee covenants and agrees to use his best efforts and utmost diligence
to
protect those Confidential Information from disclosure to third parties.
Employee further acknowledges that, absent the protections afforded the Company
and its subsidiaries in Section 7, Employee would not be entrusted with any
of
such Confidential Information. Accordingly, Employee agrees and covenants as
follows:
5
7.1.1 Employee
agrees (whether during or after Employee’s employment with the Company) not to
issue, circulate, publish or utter any false or disparaging statements, remarks
or rumors about the Company, or its officers, directors, managers or
shareholders of the Company or its subsidiaries and Affiliates unless giving
truthful testimony under subpoena;
7.1.2 During
the period of Employee's employment with the Company and for five (5) years
immediately following the termination of such employment, Employee shall not
disclose or reveal to any person, firm or corporation other than in connection
with the business of the Company and its subsidiaries or as may be required
by
law, any Confidential Information used or useable by the Company or any of
its
subsidiaries, divisions or Affiliates (collectively the “Companies”)
in
connection with their respective businesses, known to Employee as a result
of
his employment by the Company, or other relationship with the Companies, and
which is not otherwise publicly available. Employee further agrees that during
the Term and for five (5) years thereafter, he shall keep confidential and
not
disclose or reveal to any person, firm or corporation other than in connection
with the business of the Companies or as may be required by applicable law,
any
information received by him during the course of his employment with regard
to
the financial, business, or other affairs of the Companies, their respective
officers, directors, customers or suppliers which is not publicly available;
7.1.3 Upon
the
termination of Employee's employment with the Company, Employee shall return
to
the Company all documents, customer lists, customer information, product
samples, presentation materials, drawing specifications, equipment and other
materials relating to the business of the Companies, which Employee hereby
acknowledges are the sole and exclusive property of the Companies. Nothing
in
this Agreement shall prohibit Employee from retaining any of his personal
belongings and documents;
7.1.4 During
the term of the Agreement and for a period of six (6) months immediately
following the termination of the Employee's employment with the Company,
Employee shall not compete, or participate as a shareholder, director, officer,
partner (limited or general), trustee, holder of a beneficial interest,
employee, agent of or representative in any business competing directly with
the
Companies without the prior written consent of the Company, which may be
withheld in the Company’s sole discretion; provided, however, that nothing
contained herein shall be construed to limit or prevent the purchase or
beneficial ownership by Employee of less than five percent (5%) of any security
registered under Section 12 or 15 of the Securities Exchange Act of 1934;
7.1.5 During
the term of the Agreement and for a period of eighteen
(18) months immediately following the termination of the Employee's employment
with the Company, Employee shall not:
6
7.1.5.1 solicit
or accept competing business from any customer of the Companies, or any person
or entity known by Employee to be or have been, during the preceding eighteen
(18) months, a customer or Prospective Customer of the Companies without the
prior written consent of the Company;
7.1.5.2 encourage,
request or advise any such customer or Prospective Customer of the Companies
to
withdraw or cancel any of their business from or with the Companies; or
7.1.5.3 conspire
with any person employed by any of the Companies with respect to any of the
matters covered by this Section 7;
7.1.5.4 encourage,
induce or solicit any person employed by any of the Companies to facilitate
Employee's violation of the covenants contained in this Section 7;
7.1.5.5 assist
any entity to solicit the employment of any employee of any of the Companies;
or
7.1.5.6 employ
or
hire any employee any of the Companies, or solicit or induce any such person
to
join the Employee as a partner, investor, coventurer, or otherwise encourage
or
induce them to terminate their employment with any of the Companies.
7.2 Employee
expressly acknowledges that all of the provisions of this Section 7 of this
Agreement have been bargained for and Employee's agreement hereto is an integral
part of the consideration to be rendered by the Employee which justifies the
rate and extent of the compensation provided for hereunder.
7.3 Employee
acknowledges and agrees that a violation of any one of the covenants contained
in this Section 7 shall cause irreparable injury to the Company, that the remedy
at law for such a violation would be inadequate and that the Company shall
thus
be entitled to temporary injunctive relief to enforce that covenant until such
time that a court of competent jurisdiction either (a) grants or denies
permanent injunctive relief or (b) awards other equitable remedy as it sees
fit.
7.4 Successors.
7.4.1 Employee.
This
Agreement is personal to Employee and without the prior express written consent
of the Company, shall not be assignable by Employee, except the Employee’s
rights to receive any compensation or benefits under this Agreement may be
transferred or disposed of pursuant to testamentary disposition, intestate
succession or a qualified domestic relations order or in connection with a
Disability. This Agreement shall inure to the benefit of and be enforceable
by
Employee’s estate, heirs, beneficiaries, and/or legal
representatives.
7
7.4.2 The
Company.
This
Agreement shall inure to the benefit of and be binding upon the Company and
its
successors and assigns.
8. MISCELLANEOUS.
8.1 Indemnification.
The
Company and each of its subsidiaries shall, to the maximum extent provided
under
applicable law, indemnify and hold Employee harmless from and against any
expenses, including reasonable attorney’s fees, judgments, fines, settlements
and other legally permissible amounts (“Losses”),
incurred in connection with any proceeding arising out of, or related to,
Employee’s employment by the Company, other than any such Losses incurred as a
result of Employee’s negligence or willful misconduct. The Company shall, or
shall cause a subsidiary thereof to, advance to Employee any expenses, including
attorney’s fees and costs of settlement, incurred in defending any such
proceeding to the maximum extent permitted by applicable law. Such costs and
expenses incurred by Employee in defense of any such proceeding shall be paid
by
the Company or applicable subsidiary in advance of the final disposition of
such
proceeding promptly upon receipt by the Company of (a) written request for
payment; (b) appropriate documentation evidencing the incurrence, amount and
nature of the costs and expenses for which payment is being sought; and (c)
an
undertaking adequate under applicable law made by or on behalf of Employee
to
repay the amounts so advanced if it shall ultimately be determined pursuant
to
any non-appealable judgment or settlement that Employee is not entitled to
be
indemnified by the Company or any subsidiary thereof. The Company shall provide
Employee with coverage under all director’s and officer’s liability insurance
policies which shall be in effect during the Term, with no deductible payable
by
Employee.
8.2 Applicable
Law.
Except
as may be otherwise provided herein, this Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, applied without
reference to principles of conflict of laws.
8.3 Amendments.
This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors or legal
representatives.
8.4 Notice.
For the
purpose of this Agreement, notices and all other communications provided for
in
this Agreement shall be in writing and shall be deemed to have been duly given
if delivered personally, if delivered by overnight courier service,
if sent
by facsimile transmission or if mailed
by
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses or sent via facsimile to the respective facsimile numbers,
as the case may be, as set forth below, or to such other address as either
party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt; provided,
however, that (i) notices sent by personal delivery or overnight courier shall
be deemed given when delivered; (ii) notices sent by facsimile transmission
shall be deemed given upon the sender's receipt of confirmation of complete
transmission, and (iii) notices sent by United States registered mail shall
be
deemed given seven
(7)
days after the date of deposit in the United States mail.
8
If
to
the Employee:
Zhang
Yizhao
Xxxx
0-0,
Xxxx X, Xxxxxxxx #00,
Xxxxx
Xxxxxx, Chunde Street,
Dalian,
Liaoning Province, China 116001
If
to
the Company:
Xx.0
Xxx
Xx Xxxxxx, Xxxxxxxxx Xxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx xxxxxxxx,
XXX
000000
Tel:
00
000 0000 0000
Attn:
Xx.
Xxx Huashan
With
a copy to (which shall not constitute notice):
Xxxxx
Xxxx, Esq.
Xxxxxxxxxx
& Xxxxx LLP
00000
Xxxxxxxx Xxxx., 0xx
Xxxxx
Xxx
Xxxxxxx, XX 00000
8.5 Withholding
Taxes.
The
Company may withhold from any amounts payable under this Agreement, such
national, provincial, local and foreign taxes as may be required to be withheld
pursuant to any applicable law or regulation.
8.6 Severability.
In the
event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, each such provision
shall be processed with whatever deletion or modification is necessary so that
the provision is otherwise legal, valid and enforceable and gives effect to
the
commercial intention of the parties. To the extent it is not possible to delete
or modify the provision, in whole or in part, then such provision or part of
it
shall, to the extent that it is illegal, invalid or unenforceable, be deemed
not
to form part of this Agreement and the validity, legality and enforceability
of
the remaining provisions of this Agreement shall, subject to any deletion or
modification made hereunder, not be affected.
8.7 Entire
Agreement.
This
Agreement contains the entire agreement among the Parties concerning the subject
matter hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the Parties
with
respect thereto.
8.8 Survivorship.
The
respective rights and obligations of the Parties hereunder shall survive any
termination of this Agreement or the Employee’s employment hereunder to the
extent necessary to the intended preservation of such rights and
obligations.
9
8.9 Waiver.
Either
Party's failure to enforce any provision or provisions of this Agreement shall
not in any way be construed as a waiver of any such provision or provisions,
or
prevent that party thereafter from enforcing each and every other provision
of
this Agreement.
8.10 Joint
Efforts/Counterparts.
Preparation of this Agreement shall be deemed to be the joint effort of the
Parties hereto and shall not be construed more severely against any party.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one and the same
instrument.
8.11 Representation
by Counsel.
Each
Party hereby represents that it has had the opportunity to be represented by
legal counsel of its choice in connection with the negotiation and execution
of
this Agreement.
[The
Remainder Of This Page Is Intentionally Left Blank]
Employment
Agreement
10
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year
first above written.
|
EMPLOYEE:
|
|
|
|
Zhang
Yizhao
|
|
ENERGROUP
HOLDINGS CORPORATION
|
|
|
|
Shi
Huashan
|
|
Chief
Executive Officer
|
Employment
Agreement
11
