EMPLOYMENT AGREEMENT
Exhibit
10.2
This
employment agreement (this "Agreement"), dated as of June 11, 2008 (the
"Effective Date"), is made by and between China Yingxia International, Inc., a
Florida corporation (the "Company"), and Ren Hu (the "Executive") (each, a
"Party" and together, the "Parties").
WHEREAS,
the Parties wish to establish the terms of the Executive's continued employment
by the Company;
NOW,
THEREFORE, in consideration of the foregoing, of the mutual promises contained
herein and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be legally bound,
hereby agree as follows:
1. POSITION/DUTIES.
(a) During the Employment Term (as defined
in Section 2 below), the Executive shall serve as a Chief Financial Officer of
the company. In this capacity the Executive shall have such duties, authorities
and responsibilities commensurate with the duties, authorities and
responsibilities of persons in similar capacities in similarly sized companies
and such other reasonable duties and responsibilities as the Board of Directors
of the Company (the "Board") shall designate. The Executive shall
report directly to the Board of Directors and Audit Committee. The
Executive shall obey the lawful directions of the Board, and any other senior
executive of the Company to whom the Executive reports and shall use his
diligent efforts to promote the interests of the Company and to maintain and
promote the reputation thereof.
(b) During the Employment Term, the
Executive shall perform all duties as a Chief Financial Officer of the Company,
including without limitation: SEC compliance and auditing including overseeing
the current accounting operations and bringing it up to SOX 404 standards;
hiring of the accounting manager, comptroller, and/or necessary accounting staff
for the company in China; training and implementing accounting procedures and
standards (including software) according to the US GAAP; and working with
management to answer SEC comment letters. The Executive is also
responsible for corporate filings including working with corporate attorneys,
auditors, and consultants to file in a timely manner the quarterly and annual
reports and working with management to file 8K disclosure
reports. The Executive shall perform all duties associated with
investor relations, including but not limited to, working with the current
investor relations firm to create the IR documents, including the presentation,
investor kit, and company IR website; and working with the current investor
relations firm to introduce appropriate investors and arrange meetings and
conference calls intensively, such as 1-2 days of one-on-ones (4 each day) and
3-4 conference calls every week.
(c) During the Employment Term, the
Executive shall use his best efforts to perform his duties under this Agreement
and shall devote all of his business time, energy and skill in the performance
of his duties with the Company. The Executive shall not during the
Employment Term (except as a representative of the Company or with consent in
writing of the Board) be directly or indirectly engaged or concerned in any
other business activity. Notwithstanding the foregoing provisions,
the Executive is not prohibited from (1) participating in charitable, civic,
educational, professional or community affairs or serving on the board of
directors or advisory committees of non-profit entities, and (2) managing his
and his family's personal investments, in each case, provided that such activities in the aggregate do
not materially interfere with his duties hereunder.
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2. EMPLOYMENT
TERM. Except
for earlier termination as provided in Section 6, the Executive's employment
under this Agreement shall be for a one-year term commencing on the Effective
Date and ending on June 10, 2009 (the "Initial Term"). Subject to Section 6, the
Initial Term shall be automatically extended for additional terms of successive
one-year periods (the "Additional Term") unless the Company or the Executive
gives written notice to the other of the termination of the Executive's
employment hereunder at least 90 days prior to the expiration of the Initial
Term or Additional Term. The Initial Term and any Additional Term shall be
referred to herein as the "Employment Term."
3. STOCK
COMPENSATION. The Company agrees to pay
the Executive an annual stock compensation (the “Stock
Compensation”) of 60,000
shares in the form of restricted shares of the Company’s common stock to be
issued six months following the date of engagement.
4. BASE
SALARY. The
Company agrees to pay to the Executive a base salary at a monthly rate of not
less than US$4,500, payable in accordance with the regular payroll practices of
the Company. The Executive's Base Salary shall be subject to annual review by
the Board (or a committee thereof). The base salary as determined
herein from time to time shall constitute "Base Salary" for purposes of this
Agreement.
5. BONUS. With respect to each full
fiscal year during the Employment Term, the Executive shall be eligible to earn
an annual bonus (the "Annual Bonus") in such amount, if any, as determined in
the sole discretion of the Board of up to 100% of the Executive's Base Salary.
In addition, the Executive shall be eligible to participate in the Company's
bonus and other incentive compensation plans and programs (if any) for the
Company's senior executives at a level commensurate with his position and may be
entitled to bonus payments in addition to the amount set forth
hereinabove.1
6. EMPLOYEE
BENEFITS.
(a) Benefit
Plans. The
Executive shall be eligible to participate in any employee benefit plan of the
Company, including, but not limited to, equity, pension, thrift, profit sharing,
medical coverage, education, or other retirement or welfare benefits that the
Company has adopted or may adopt, maintain or contribute to for the benefit of
its senior executives, at a level commensurate with his positions, subject to
satisfying the applicable eligibility requirements. The Company may at any time
or from time to time amend, modify, suspend or terminate any employee benefit
plan, program or arrangement for any reason in its sole
discretion.
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(b) Vacation. The Executive shall be
entitled to an annual paid vacation in accordance with the Company's policy
applicable to senior executives from time to time in effect, but in no event
less than two weeks per calendar year (as prorated for partial years), which
vacation may be taken at such times as the Executive elects with due regard to
the needs of the Company. The carry-over of vacation days shall be in
accordance with the Company's policy applicable to senior executives from time
to time in effect.
(c) Business and
Entertainment Expenses. Upon presentation of
appropriate documentation, the Executive shall be reimbursed for all reasonable
and necessary business and entertainment expenses incurred in connection with
the performance of his duties hereunder, all in accordance with the Company's
expense reimbursement policy applicable to senior executives from time to time
in effect.
7. TERMINATION. The Executive's employment
and the Employment Term shall terminate on the first of the following to
occur:
(a) Disability. The thirtieth
(30th) day following written notice by the
Company to the Executive of termination due to Disability. For purposes of this
Agreement, "Disability" shall mean a determination by the Company in
accordance with applicable law that due to a physical or mental injury,
infirmity or incapacity, the Executive is unable to perform the essential
functions of his job with or without accommodation for 180 days (whether or not
consecutive) during any 12-month period.
(b) Death. Automatically on the date
of death of the Executive.
(c) Cause. Immediately upon written
notice by the Company to the Executive of a termination for Cause. "Cause" shall
mean, as determined by the Board (or its designee) (1) conduct by the Executive
in connection with his employment duties or responsibilities that is fraudulent,
unlawful or grossly negligent; (2) the willful misconduct of the Executive; (3)
the willful and continued failure of the Executive to perform the Executive's
duties with the Company (other than any such failure resulting from incapacity
due to physical or mental illness); (4) the commission by the Executive of any
felony (or the equivalent under the law of the People's Republic of China)
(other than traffic-related offenses) or any crime involving moral turpitude;
(5) violation of any material policy of the Company or any material provision of
the Company's code of conduct, employee handbook or similar documents; or (6)
any material breach by the Executive of any provision of this Agreement or any
other written agreement entered into by the Executive with the
Company.
(d) Without
Cause. On the
thirtieth (30th) day following written notice by the Company to the Executive of
an involuntary termination without Cause, other than for death or
Disability.
(e) Good
Reason. On the
sixtieth (60th) day following written notice by the
Executive to the Company of a termination for Good Reason. "Good Reason" shall
mean, without the express written consent of the Executive, the occurrence of
any the following events unless such events are cured (if curable) by the
Company within fifteen days following receipt of written notification by the
Executive to the Company that he intends to terminate his employment hereunder
for one of the reasons set forth below: any material reduction or diminution
(except temporarily during any period of incapacity due to physical or mental
illness) in the Executive's title, authorities, duties or responsibilities or
reporting requirements with the Company.
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8. CONSEQUENCES OF
TERMINATION.
(a) Disability. Upon termination of the
Employment Term because of the Executive's Disability, the Company shall pay or
provide to the Executive (1) any unpaid Base Salary and any accrued vacation
through the date of termination; (2) any unpaid Annual Bonus accrued with
respect to the fiscal year ending on or preceding the date of termination; (3)
reimbursement for any unreimbursed expenses properly incurred through the date
of termination; and (4) all other payments or benefits to which the Executive
may be entitled under the terms of any applicable employee benefit plan, program
or arrangement (collectively, "Accrued Benefits").
(b) Death. Upon the termination of the
Employment Term because of the Executive's death, the Executive's estate shall
be entitled to any Accrued Benefits.
(c) Termination for
Cause. Upon the
termination of the Employment Term by the Company for Cause or by either party
in connection with a failure to renew this Agreement, the Company shall pay to
the Executive any Accrued Benefits.
(d) Termination without
Cause or for Good Reason. Upon the termination of the
Employment Term by the Company without Cause or by the Executive with Good
Reason, the Company shall pay or provide to the Executive (1) the Accrued
Benefits, and (2) subject to the Executive's execution (and non-revocation) of a
general release of claims against the Company and its affiliates in a form
reasonably requested by the Company, (A) continued payment of his Base Salary
for [two (2) months] after termination, payable in accordance with the regular
payroll practices of the Company, but off the payroll; and (B) payment of the
Executive's cost of continued medical coverage for [two (2) months] after
termination (subject to the Executive's co-payment of the costs in the same
proportion as such costs were shared immediately prior to the date of
termination).2 Payments provided under
this Section 7(d) shall be in lieu of any termination or severance payments or
benefits for which the Executive may be eligible under any of the plans,
policies or programs of the Company.
9. NO
ASSIGNMENT. This Agreement is personal
to each of the Parties. Except as provided below, no Party may assign
or delegate any rights or obligations hereunder without first obtaining the
written consent of the other Party hereto; provided, however, that the Company may assign this
Agreement to any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company.
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10. NOTICES. 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 (1) on the date of delivery
if delivered by hand, (2) on the date of transmission, if delivered by confirmed
facsimile, (3) on the first business day following the date of deposit if
delivered by guaranteed overnight delivery service, or (4) on the fourth
business day following the date delivered or mailed by United States registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the
Executive:
At the
address (or to the facsimile number) shown on the records of the
Company
If to the
Company:
c/o
Xxxxxx Xxxxxxx Industrial Co., Ltd.
Xx. 000
Xxxxxxx Xxxxxx Xxxxxx
Xxxxxx
Xxxxxxxxxxxx, Xxxxx 150001
Attention:
Jiao Yingxia
With a
copy to:
Xxxxxx
& Xxxxxx, LLP
000 Xxxxx
0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxx Xxxxxx, 00000
Attention:
Xxxxxxx Xxxxxx
Facsimile:
(000) 000-0000
or to
such other address as either Party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
11. PROTECTION OF THE
COMPANY'S BUSINESS.
(a) Confidentiality. The Executive acknowledges
that during the course of his employment by the Company (prior to and during the
Employment Term) he has and will occupy a position of trust and confidence. The
Executive shall hold in a fiduciary capacity for the benefit of the Company and
shall not disclose to others or use, whether directly or indirectly, any
Confidential Information regarding the Company, except (i) as in good faith
deemed necessary by the Executive to perform his duties hereunder, (ii) to
enforce any rights or defend any claims hereunder or under any other agreement
to which the Executive is a party, provided that such disclosure is relevant to the
enforcement of such rights or defense of such claims and is only disclosed in
the formal proceedings related thereto, (iii) when required to do so by a court
of law, by any governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative body (including
a committee thereof) with jurisdiction to order him to divulge, disclose or make
accessible such information, provided that the Executive shall give prompt
written notice to the Company of such requirement, disclose no more information
than is so required, and cooperate with any attempts by the Company to obtain a
protective order or similar treatment, (iv) as to such Confidential Information
that shall have become public or known in the Company's industry other than by
the Executive's unauthorized disclosure, or (v) to the Executive's spouse,
attorney and/or his personal tax and financial advisors as reasonably necessary
or appropriate to advance the Executive's tax, financial and other personal
planning (each an "Exempt Person"), provided, however, that any disclosure or use of Confidential
Information by an Exempt Person shall be deemed to be a breach of this Section
10(a) by the Executive. The Executive shall take all reasonable steps
to safeguard the Confidential Information and to protect it against disclosure,
misuse, espionage, loss and theft. The Executive understands and
agrees that the Executive shall acquire no rights to any such Confidential
Information. "Confidential Information" shall mean information about the
Company, its subsidiaries and affiliates, and their respective clients and
customers that is not disclosed by the Company and that was learned by the
Executive in the course of his employment by the Company, including, but not
limited to, any proprietary knowledge, trade secrets, data and databases,
formulae, sales, financial, marketing, training and technical information,
client, customer, supplier and vendor lists, competitive strategies, computer
programs and all papers, resumes, and records (including computer records) of
the documents containing such Confidential Information.
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(b) Non-Competition. During the Employment Term
and for the one-year period following the termination of the Executive's
employment for any reason (the "Restricted Period"), the Executive shall not,
directly or indirectly, without the prior written consent of the Company,
provide employment (including self-employment), directorship, consultative or
other services to any business, individual, partner, firm, corporation, or other
entity that competes with any business conducted by the Company or any of its
subsidiaries or affiliates on the date of the Executive's termination of
employment or within one year of the Executive's termination of employment in
the geographic locations where the Company and its subsidiaries or affiliates
engage or propose to engage in such business (the "Business"). Nothing herein
shall prevent the Executive from having a passive ownership interest of not more
than 2% of the outstanding securities of any entity engaged in the Business
whose securities are traded on a national securities
exchange.
(c) Non-Solicitation of
Employees. The
Executive recognizes that he possesses and will possess confidential information
about other employees of the Company and its subsidiaries and affiliates
relating to their education, experience, skills, abilities, compensation and
benefits, and inter-personal relationships with customers of the Company and its
subsidiaries and affiliates. The Executive recognizes that the information he
possesses and will possess about these other employees is not generally known,
is of substantial value to the Company and its subsidiaries and affiliates in
developing their business and in securing and retaining customers, and has been
and will be acquired by him because of his business position with the Company.
The Executive agrees that, during the Restricted Period, he will not, directly
or indirectly, (i) solicit or recruit any employee of the Company or any of
its subsidiaries or affiliates (a "Current Employee") or any person who was an
employee of the Company or any of its subsidiaries or affiliates during the
twelve (12) month period immediately prior to the date the Executive's
employment terminates (a "Former Employee") for the purpose of being employed by
him or any other entity, or (ii) hire any Current Employee or Former
Employee.
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(d) Non-Solicitation of
Customers. The
Executive agrees that, during the Restricted Period, he will not, directly or
indirectly, solicit or attempt to solicit (i) any party who is a customer or
client of the Company or its subsidiaries, who was a customer or client of the
Company or its subsidiaries at any time during the twelve (12) month period
immediately prior to the date the Executive's employment terminates or who is a
prospective customer or client that has been identified and targeted by the
Company or its subsidiaries for the purpose of marketing, selling or providing
to any such party any services or products offered by or available from the
Company or its subsidiaries, or (ii) any supplier or vendor to the Company or
any subsidiary to terminate, reduce or alter negatively its relationship with
the Company or any subsidiary or in any manner interfere with any agreement or
contract between the Company or any subsidiary and such supplier or
vendor.
(e) Property. The Executive acknowledges
that all originals and copies of materials, records and documents generated by
him or coming into his possession during his employment by the Company or its
subsidiaries are the sole property of the Company and its subsidiaries ("Company
Property"). During the Employment Term, and at all times thereafter,
the Executive shall not remove, or cause to be removed, from the premises of the
Company or its subsidiaries, copies of any record, file, memorandum, document,
computer related information or equipment, or any other item relating to the
business of the Company or its subsidiaries, except in furtherance of his duties
under this Agreement. When the Executive's employment with the
Company terminates, or upon request of the Company at any time, the Executive
shall promptly deliver to the Company all copies of Company Property in his
possession or control.
(f) Non-Disparagement. Executive shall not, and
shall not induce others to, Disparage the Company or its subsidiaries or
affiliates or their past and present officers, directors, employees or products.
"Disparage" shall mean making comments or statements to the press, the Company's
or its subsidiaries' or affiliates' employees or any individual or entity with
whom the Company or its subsidiaries or affiliates has a business relationship
which would adversely affect in any manner (1) the business of the Company or
its subsidiaries or affiliates (including any products or business plans or
prospects), or (2) the business reputation of the Company or its subsidiaries or
affiliates, or any of their products, or their past or present officers,
directors or employees.
(g) Cooperation. Subject to the Executive's
other reasonable business commitments, following the Employment Term, the
Executive shall be available to cooperate with the Company and its outside
counsel and provide information with regard to any past, present, or future
legal matters which relate to or arise out of the business the Executive
conducted on behalf of the Company and its subsidiaries and affiliates, and,
upon presentation of appropriate documentation, the Company shall compensate the
Executive for any out-of-pocket expenses reasonably incurred by the Executive in
connection therewith.
(h) Equitable Relief and
Other Remedies. The Executive acknowledges
and agrees that the Company's remedies at law for a breach or threatened breach
of any of the provisions of this Section 10 would be inadequate and, in
recognition of this fact, the Executive agrees that, in the event of such a
breach or threatened or attempted breach, in addition to any remedies at law,
the Company, without posting any bond, shall be entitled to obtain equitable
relief in the form of specific performance, a temporary restraining order, a
temporary or permanent injunction or any other equitable remedy which may then
be available. In addition, without limiting the Company's remedies for any
breach of any restriction on the Executive set forth in this Section 10, except
as required by law, the Executive shall not be entitled to any payments set
forth in Section 7(d) hereof if the Executive has breached the covenants
applicable to the Executive contained in this Section 10, the Executive will
immediately return to the Company any such payments previously received under
Section 7(d) upon such a breach, and, in the event of such breach, the Company
will have no obligation to pay any of the amounts that remain payable by the
Company under Section 7(d).
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(i) Reformation. If it is determined by a
court of competent jurisdiction in any state that any restriction in this
Section 10 is excessive in duration or scope or is unreasonable or unenforceable
under the laws of that state, it is the intention of the parties that such
restriction may be modified or amended by the court to render it enforceable to
the maximum extent permitted by the law of that state. The Executive
acknowledges that the restrictive covenants contained in this Section 10 are a
condition of this Agreement and are reasonable and valid in temporal scope and
in all other respects.
(j) Survival of
Provisions. The
obligations contained in this Section 10 shall survive in accordance with their
terms the termination or expiration of the Executive's employment with the
Company and shall be fully enforceable thereafter.
12. INDEMNIFICATION. The Executive shall be
indemnified to the extent permitted by the Company's organizational documents
and to the extent required by law.
13. SECTION HEADINGS AND
INTERPRETATION. The
section headings used in this Agreement are included solely for convenience and
shall not affect, or be used in connection with, the interpretation of this
Agreement. Expressions of inclusion used in this agreement are to be understood
as being without limitation.
14. SEVERABILITY. The provisions of this
Agreement shall be deemed severable and the invalidity of unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof.
15. COUNTERPARTS. This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same
Agreement.
16. GOVERNING LAW AND
VENUE. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Florida without regard to its conflicts
of law principles. The Parties agree irrevocably to submit to the exclusive
jurisdiction of the federal courts or, if no federal jurisdiction exists, the
state courts, located in the State of Florida, for the purposes of any suit,
action or other proceeding brought by any Party arising out of any breach of any
of the provisions of this Agreement and hereby waive, and agree not to assert by
way of motion, as a defense or otherwise, in any such suit, action, or
proceeding, any claim that it is not personally subject to the jurisdiction of
the above-named courts, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is
improper, or that the provisions of this Agreement may not be enforced in or by
such courts. IN ADDITION, THE
PARTIES AGREE TO WAIVE A TRIAL BY JURY.
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17. ENTIRE
AGREEMENT. This Agreement
contains the entire agreement between the Parties with respect to the subject
matter hereof and supersedes all prior agreements, written or oral, with respect
thereto. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.
18. WAIVER AND
AMENDMENT. No
provision of this Agreement may be modified, amended, waived or discharged
unless such waiver, modification, amendment or discharge is agreed to in writing
and signed by the Executive and such officer or director as may be designated by
the Board. No waiver by either Party at any time of any breach by the other
Party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other Party shall be deemed a waiver or
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
19. BINDING
EFFECT. This
Agreement will be binding upon and inure to the benefit and be enforceable by
the parties and their respective successors and assignees.
20. WITHHOLDING. The Company may withhold from any and
all amounts payable under this Agreement such federal, state, local and foreign
taxes as may be required to be withheld pursuant to any applicable law or
regulation.
21. AUTHORITY AND
NON-CONTRAVENTION. The Executive represents
and warrants to the Company that he has the legal right to enter into this
Agreement and to perform all of the obligations on his part to be performed
hereunder in accordance with its terms and that he is not a party to any
agreement or understanding, written or oral, which could prevent him form
entering into this Agreement or performing all of his obligations
hereunder.
22. COUNTERPARTS. This Agreement may be
executed in counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument.
[REMAINDER
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2 NOTE:
typically the period for severance payments corresponds to the length of the
noncompete and nonsolicitation period.
IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first written
above.
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By:
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/s/ Xxxxxxx
Xxxx
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Xxxxxxx
Xxxx
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Director/
Chief Executive Officer
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EXECUTIVE
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By:
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/s/ Ren
Hu
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Ren
Hu
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