EMPLOYMENT AGREEMENT
EXHIBIT
10.11
EMPLOYMENT
AGREEMENT (this “Agreement”), effective as of
November 9, 2009 (the “Effective Date”), between An Fengbin (“Executive”) and Andatee China
Marine Fuel Services Corporation, a Delaware corporation (“Employer”).
In
consideration of the premises and the mutual covenants hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. EMPLOYMENT
OF EXECUTIVE.
Employer
hereby agrees to employ Executive, and Executive hereby agrees to be and remain
in the employ of Employer, upon the terms and conditions hereinafter set
forth.
2. EMPLOYMENT
PERIOD; EMPLOYMENT YEAR.
2.1 EMPLOYMENT
PERIOD. Subject to earlier termination as provided in Section 5, the
term of Executive’s employment under this Agreement shall commence as of the
date hereof and shall continue until November 9, 2014 (the “Initial Employment
Period”). Unless either party gives notice of non-renewal at
least ninety (90) days prior to the expiration of the Initial Employment Period
or any extension thereof, the term of this Agreement shall be extended for an
additional one (1) year period beyond the end of the Initial Employment Period,
or the end of any extension thereof, as the case may be (the Initial Employment
Period and any extension thereof is hereafter referred to as the “Employment
Period”).
2.2 EMPLOYMENT
YEAR. Each 12-month period ending on December 31 shall be hereinafter
considered an “Employment
Year”.
3. DUTIES
AND RESPONSIBILITIES; PLACE OF PERFORMANCE.
3.1 DUTIES
AND RESPONSIBILITIES. During the Employment Period, Executive shall
have the titles of Chairman of the Board, Chief Executive Officer and President
of the Employer. Executive shall devote substantially all of his
business time to the Employer. Executive shall be responsible for the
affairs of the Employer and its subsidiaries in pursuit of the Employer’s
business. Executive shall perform such duties, consistent with his
status as Chairman of the Board, President and Chief Executive Officer of
Employer, as he may be assigned from time to time by Employer’s Board of
Directors (the “Board”).
3.2 PLACE
OF PERFORMANCE. In connection with his employment during the
Employment Period, the Executive shall be based at the Employer’s current
principal offices in and around the City of Dalian, People’s Republic of China
or such other principal offices as may be established in the future by the
Board. Executive shall travel to such principal office, as necessary,
from his home at the expense of the Executive.
4. COMPENSATION
AND RELATED MATTERS.
4.1 BASE
SALARY. Employer shall pay to Executive a base salary at the rate of
US$120,000 per annum (equivalent of RMB based on the prevailing currency
exchange rate), subject to increase at the discretion of the Board (the initial
base salary, including any Board approved increase thereof, the “Base Salary”), payable in
accordance with applicable rules and regulations in the US and/or the People’s
Republic of China. Following the first anniversary of this Agreement, the
Executive’s salary will be reviewed and increased as determined in the sole
discretion of the Board of Directors, upon recommendations of the Board’s
Compensation Committee (the “Compensation Committee”). The
Compensation Committee will consider increases in Executive’s Base Salary no
less frequently than annually, and, when reviewed and approved by the Board, any
such increase shall become the new Base Salary under this
Agreement.
4.2 ANNUAL
BONUS. As additional compensation, the Executive shall
be entitled to receive a bonus (“Bonus”) for each fiscal year
during the initial and renewal terms of Executive’s employment with the Company
in the amount of at least One Half of One percent (0.5%) of Earnings Before
Income Taxes of the Company earned during the fiscal year for which the Bonus
for that period is determined, as well as any additional compensation, which the
Board may determine appropriate for Executive, upon the Compensation Committee’s
recommendations. The date of payment for such Bonus will made in accordance with
the Company’s customary payroll practices following the end of the fiscal year
in which said Bonus was earned. Notwithstanding the foregoing, all
payment of Bonus compensation will be made in compliance with Section 409A of
the Internal Revenue Code.
4.3 OTHER
BENEFITS. During the Employment Period, subject to, and to the extent
Executive is eligible under their respective terms, Executive shall be entitled
to receive such fringe benefits as are, or are from time to time hereafter
generally provided by Employer to Employer’s senior management employees or
other employees (other than those provided under or pursuant to separately
negotiated individual employment agreements or arrangements) under any pension
or retirement plan, disability plan or insurance, group life insurance, medical
and dental insurance, accidental death and dismemberment insurance, travel
accident insurance or other similar plan or program of
Employer. Employer shall provide short-term and long-term disability
insurance for Executive. Executive’s Base Salary shall (where
applicable) constitute the compensation on the basis of which the amount of
Executive’s benefits under any such plan or program shall be fixed and
determined.
4.4 EXPENSE
REIMBURSEMENT. Employer shall reimburse Executive for all business
expenses reasonably incurred by him in the performance of his duties under this
Agreement upon his presentation of signed, itemized accounts of such
expenditures, all in accordance with Employer’s procedures and policies as
adopted and in effect from time to time and applicable to its senior management
employees.
4.5 VACATION. Executive
shall be entitled to paid vacation for each Employment Year during the
Employment Period, in accordance with the Employer’s vacation policy as in
effect from time to time. The Executive shall also be entitled to
paid holidays and personal days in accordance with the Employer’s practice with
respect to same as in effect from time to time.
4.6 EQUITY
INCENTIVE. In order to provide further incentive to Executive and
align the interests of Executive with those of the stockholders of Employer,
Employer may, from time to time, consistent with the terms and provisions of the
Employer’s equity incentive plan(s) then in effect, grant to Executive equity
incentives consisting of shares of Common Stock and other similar compensation,
as may be determined by the Compensation Committee and approved by the
Board.
5. TERMINATION
OF EMPLOYMENT PERIOD.
5.1 TERMINATION
WITHOUT CAUSE; VOLUNTARY TERMINATION BY EXECUTIVE. Employer may, by
notice to Executive at any time during the Employment Period, terminate the
Employment Period without Cause (as defined below). Executive may, by
notice to Employer at any time during the Employment Period, voluntarily resign
from the Employer and terminate the Employment Period. A termination
under this section shall be effective immediately.
2
5.2 BY
EMPLOYER FOR CAUSE. Employer may, at any time during the Employment
Period, by notice to Executive, terminate the Employment Period for “Cause” (as defined below)
effective immediately, except as otherwise provided below. The notice
shall set forth in reasonable detail the basis for such
termination. In the event that it is possible for the Executive to
cure or correct the circumstances set forth in the notice, the termination shall
not be effective until the date that is thirty (30) days following the date on
which such notice is given and the circumstances set forth in the notice shall
not constitute “Cause” if within 30 days of such notice, Executive cures or
corrects such circumstances. The Employer shall have “Cause” to terminate the
Executive’s employment hereunder upon the Executive’s:
(a) fraud,
embezzlement, or any other illegal act committed intentionally by the Executive
in connection with the Executive’s duties as an executive of the Employer or any
subsidiary or affiliate of the Employer which causes or may reasonably be
expected to cause substantial economic injury to the Employer or any subsidiary
or affiliate of the Employer;
(b) conviction
of any felony which causes or may reasonably be expected to cause substantial
economic injury to the Employer or any subsidiary or affiliate of the Employer;
or
(c) willful
or grossly negligent commission of any other act or failure to act which causes
or may reasonably be expected (as of the time of such occurrence) to cause
substantial economic injury to or substantial injury to the reputation of the
Employer or any subsidiary or affiliate of the Employer, including, without
limitation, any material violation of the Foreign Corrupt Practices Act, as
described herein below. An act or failure to act on the part of
Executive shall be considered “willful” if done, or omitted to be done, by
Executive in bad faith or without a reasonable belief that the act or omission
was in the best interest of Employer.
5.3 BY
EXECUTIVE FOR GOOD REASON. Executive may, at any time during the
Employment Period by notice to Employer, terminate the Employment Period under
this Agreement for “Good
Reason” (as defined below) effective immediately. For the
purposes hereof, “Good
Reason” means any of the following without Executive’s consent: (a)
subject to Section 3 above, a material and adverse change in the nature and
scope of Executive’s authority and duties from those exercised or performed by
Executive immediately after the Effective Date; or (b) a material breach of this
Agreement by Employer (including, but not limited to, failure to pay any amount
due to Executive when due, diminution of Executive’s duties and responsibilities
or a change in Executive’s place of performance); provided, however,
that the circumstances set forth in this Section 5.3(A) and (B) will not be Good
Reason if within 30 days of notice by the Executive to the Employer, Employer
cures such circumstances.
5.4 DISABILITY. During
the Employment Period, if, as a result of physical or mental incapacity or
infirmity, Executive shall be unable to perform his duties under this Agreement
for over 180 consecutive days during any period of 12 consecutive months (each a
“Disability Period”),
and at the end of the Disability Period there is no reasonable probability that
Executive can promptly resume his duties hereunder, Executive shall be deemed
disabled (the “Disability”) and Employer, by
written notice to Executive, shall have the right to terminate the Employment
Period for Disability at, as of or after the end of the Disability
Period. The existence of the Disability shall be determined by a
reputable physician licensed to practice medicine in the United
States. The parties shall attempt to agree on such a
physician. In the event that the parties are unable to so agree, such
physician shall be selected by an arbitrator provided by the American
Arbitration Association in New York, New York. Executive shall
cooperate in all reasonable respects to enable an examination to be made by such
physician.
3
5.5 DEATH. The
Employment Period shall end on the date of Executive’s death.
6. TERMINATION
COMPENSATION.
6.1 TERMINATION
WITHOUT CAUSE BY EMPLOYER OR FOR GOOD REASON BY EXECUTIVE. If the
Employment Period is terminated by Employer without Cause or by Executive for
Good Reason, Employer will pay to Executive a lump sum payment equal to eighteen
(18) months of Executive’s then Base Salary. Employer shall also continue to
provide the Executive with all employee benefits and perquisites which he was
participating in or receiving at the effective date of termination (or if
greater, at the end of the prior year) for two years. If such
benefits cannot be provided under the Employer’s programs, such benefits and
perquisites will be provided on a tax effective basis on an individual basis to
the Executive.
6.2 TERMINATION
BY REASON OF DEATH. If the Employment Period is terminated by death,
pursuant to the provisions of Section 5.5, Employer shall pay to Executive’s
estate, semi-monthly, his current Base Salary for a period of up to one year
from the date of termination or the expiration of the Employment Agreement if
earlier than the anniversary date, as well as pro rata allocation of any bonus
based on the days of service during the year of death, and all amounts owing to
Executive at the time of termination, including for previously accrued but
unpaid bonuses, expense reimbursements and accrued but unused vacation
pay.
6.3 CERTAIN
OTHER TERMINATIONS. If the Employment Period is terminated by
Employer pursuant to the provisions of Sections 5.2 or 5.4, Employer shall pay
to Executive, within thirty (30) days of the effective date of termination, Base
Salary through the date of termination.
6.4 NO
OTHER TERMINATION COMPENSATION. Executive shall not, except as set
forth in this Section 6, be entitled to any compensation following termination
of the Employment Period.
6.5 MITIGATION
OF DAMAGES. In the event of any termination of the Executive’s
employment by the Employer, the Executive shall not be required to seek other
employment to mitigate damages, and any income earned by the Executive from
other employment or self-employment shall not be offset against any obligations
of the company to the Executive under this Agreement. The Employer’s
obligations hereunder and the Executive’s rights to payment shall not be subject
to any right of set-off, counterclaim or other deduction by the Employer not in
the nature of customary withholding, other than in any judicial proceeding or
arbitration.
7. PROFESSIONAL
LIABILITY INSURANCE; INDEMNIFICATION.
7.1 INSURANCE. The
Employer will provide coverage for Executive under the Employer’s director and
officer liability insurance policy.
7.2 INDEMNIFICATION. The
Employer shall, to the fullest extent permitted by law, indemnify Executive for
any liability, damages, losses, costs and expenses arising out of alleged or
actual claims (collectively, “Claims”) made against
Executive for any actions or omissions as an officer and/or director of the
Company or its subsidiary.
4
8. CONFIDENTIALITY.
Unless
otherwise required by law or judicial process, Executive shall retain in
confidence during the Employment Period and after termination of Executive’s
employment with Employer pursuant to this Agreement all confidential information
known to the Executive concerning Employer and its businesses. The
obligations of Executive pursuant to this Section 8 shall survive the expiration
or termination of this Agreement.
9. NON-COMPETITION
9.1 NON-COMPETITION.
During the Employment Period and for twelve (12) months thereafter (the “Non-Compete Period”),
Executive agrees that, without the prior written consent of the Employer, it (A)
will not, directly or indirectly, in the United States, the People’s Republic of
China or anywhere else in the world, hold any Position (as defined below)
or manage, control, participate in, consult with, render services
for, or in any manner engage in by the entity which is in competition with any
Business of the Employer (as defined below), and (B) will not, on its own behalf
or on behalf of any person, firm or company, directly or indirectly, solicit or
offer employment to any person who has been employed by the Employer at any time
during the twelve (12) months immediately preceding such
solicitation.
The term
"Position" shall include, without limitation, a partner, director, holder of
more than 5% of the outstanding voting shares, principal, executive, officer,
manager or any employment or consulting position. It is acknowledged and agreed
that the scope of the clause as set forth above is essential, because (i) a more
restrictive definition of "Position" (e.g. limiting it to the "same" position
with a competitor) will subject the Employer to serious, irreparable harm by
allowing competitors to describe positions in ways to evade the operation of
this clause, and substantially restrict the protection sought by the Company,
and (ii) by allowing Executive to escape the application of this clause by
accepting a position designated as a "lesser" or "different" position with a
competitor, the Employer is unable to restrict Executive from providing valuable
information to such competing company to the harm of the Employer.
The term
“Business of the Employer” shall mean the production, storage, distribution,
trading and bunkering of blended marine fuel oil for cargo vessels and fishing
boats.
A
business shall be deemed to be in competition with the Employer if it is
principally involved in the purchase, sale or other dealing in any property or
the rendering of any service purchased, sold, dealt in or rendered by the
Employer as a material part of the Business of the Employer within the same
geographic area in which the Employer effects such purchases, sales or dealings
or renders such services.
Executive
and the Employer agree that this covenant not to compete is a reasonable
covenant under the circumstances, and further agree that if in the opinion of
any court of competent jurisdiction such restraint is not reasonable in any
respect, such court shall have the right, power and authority to excise or
modify such provision or provisions of this covenant as to the court shall
appear not reasonable and to enforce the remainder of the covenant as so
modified. Executive agrees that any breach of the covenants contained herein
would irreparably injure the Employer and, accordingly, agrees that the Employer
may, in addition to pursuing any other remedies it or they may have in law or in
equity, cease making any payments otherwise required by this Agreement and
obtain an injunction against Executive from any court having jurisdiction over
the matter restraining any further violation of this Agreement by
Executive.
5
10. NONSOLICITATION.
During
the Non-Compete Period, Executive shall not directly or indirectly solicit to
enter into the employ of any other Entity, or hire, any of the employees of the
Employer (or individuals who were employees of the Employer within six months of
termination of the Non-Compete Period). During the Non-Compete
Period, Executive shall not, directly or indirectly, solicit, hire or take away
or attempt to solicit, hire or take away (i) any customer or client of the
Employer or (ii) any former customer or client (that is, any customer or client
who ceased to do business with the Employer during the one (1) year immediately
preceding such date) of the Employer or encourage any customer or client of the
Employer to terminate its relationship with the Employer without the Employer’s
prior written consent. The obligations of Executive pursuant to this
Section 10 shall survive the expiration or termination of this
Agreement.
11. FOREIGN
CORRUPT PRACTICES ACT.
The
Executive agrees to comply in all material respects with the applicable
provisions of the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”), as amended, which
provides generally that: under no circumstances will foreign
officials, representatives, political parties or holders or public offices be
offered, promised or paid any money, remuneration, things of value, or provided
any other benefit, direct or indirect, in connection with obtaining or
maintaining contracts or others hereunder. When any representative,
employee, agent, or other individual or organization associated with the
Executive is required to perform any obligation related to or in connection with
this Agreement, the substance of this section shall be imposed upon such person
and included in any agreement between the Executive and any such
person. Failure by the Executive to comply in all material respects
with the provisions of the FCPA (other than an inadvertent violation on the
basis of advice from counsel to the Employer that the conduct in question is not
a violation) shall constitute a material breach of this Agreement and shall
entitle the Employer to terminate the Executive’s employment for
Cause.
12. CONSOLIDATION;
MERGER; SALE OF ASSETS; CHANGE OF CONTROL.
Nothing
in this Agreement shall preclude the Employer from combining, consolidating or
merging with or into, transferring all or substantially all of its assets to, or
entering into a partnership or joint venture with, another corporation or other
entity, or effecting any other kind of corporate combination provided that the
corporation resulting from or surviving such combination, consolidation or
merger, or to which such assets are transferred, or such partnership or joint
venture assumes this Agreement and all obligations and undertakings of the
Employer hereunder. Upon such a consolidation, merger, transfer of assets or
formation of such partnership or joint venture, this Agreement shall inure to
the benefit of, be assumed by, and be binding upon such resulting or surviving
transferee corporation or such partnership or joint venture, and the term
“Employer” as used in this Agreement, shall mean such corporation, partnership
or joint venture or other entity, and this Agreement shall continue in full
force and effect and shall entitle the Executive and his heirs, beneficiaries
and representatives to exactly the same compensation, benefits, perquisites,
payments and other rights as would have been their entitlement had such
combination, consolidation, merger, transfer of assets or formation of such
partnership or joint venture not occurred.
13. SUCCESSORS;
BINDING AGREEMENT.
This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by Executive and Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts
would still be payable to him hereunder if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Executive’s devisee, legatee, or other beneficiary
or, if there be no such beneficiary, to Executive’s estate. This
Agreement shall not be assignable by the Employer and any such attempted
assignment shall be null and void; provided however, that nothing herein shall
preclude the Employer from entering into a merger, consolidation, reorganization
change of entity solution of the Employer from a limited liability company to a
corporation (“a Permissible Assignment”); and
further provided that this Agreement shall be enforceable by the Executive
against the Employer’s successor in any Permissible Assignment; and the
Employer’s successor in any Permissible Assignment shall be obligated
to honor all of the representations, warranties and covenants of the
Employer.
6
14. SURVIVORSHIP.
The
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
15. MISCELLANEOUS.
15.1 NOTICES. Any
notice, consent or authorization required or permitted to be given pursuant to
this Agreement shall be in writing and sent to the party for or to whom
intended, at the address of such party set forth below, by registered or
certified mail, postage paid (deemed given five days after deposit in the U.S.
mails) or personally or by facsimile transmission (deemed given upon receipt),
or at such other address as either party shall designate by notice given to the
other in the manner provided herein.
If to
Employer or to Executive:
Dalian
Ganjingzi District, Dalian Wan Lijiacun
24F Xx.00
Xxxx Xxxxxx Xxxx, Xxxx X, Xxxxxx Xxxxxxxx Dalian
People’s
Republic of China
15.2 TAXES. Employer
is authorized to withhold (from any compensation or benefits payable hereunder
to Executive) such amounts for income tax, social security, unemployment
compensation and other taxes as shall be necessary or appropriate in the
reasonable judgment of Employer to comply with applicable laws and
regulations.
15.3 INVENTIONS;
WORK FOR HIRE. Executive hereby agrees to assign and does hereby
assign all of Executive’s right, title and interest in or to any and all ideas,
concepts, know-how, techniques, processes, inventions, discoveries,
developments, works of authorship, innovations and improvements (collectively
“Inventions”) conceived
or made by Executive, whether alone or in concert with others whether patentable
or subject to potential copyrights or not, except those that the Executive
developed or develops entirely on Executive’s own time without using the
equipment, supplies, facilities, or confidential or proprietary information of
the Employer and provided that such Inventions are unrelated to the business of
the Employer. Executive agrees to promptly inform and disclose all
Inventions to the Employer in writing and with respect to those Inventions that
Executive is required to assign to the Employer hereunder to provide all
assistance reasonably requested by the Employer in the preservation of its
interests in the Inventions (such as by executing documents, testifying, etc.),
such assistance to be provided at the Employer’s expense but without additional
compensation to the Executive. Executive agrees that any work
prepared by the Executive during the Employment Period which work is subject to
assignment under this paragraph and which is eligible for United States
copyright protection or protection under the Universal Copyright Convention the
Berne Copyright Convention and/or the Buenos Aires Copyright Convention, shall
be a “work made for hire”. In the event that any such work is deemed
not to be a “work made for hire”. Executive hereby assigns all right,
title and interest in and to the copyright in such work to the Employer, and
agrees to provide all assistance reasonably requested in the establishment,
preservation and enforcement of the Employer’s copyright in such work, such
assistance to be provided at the Employer’s expense but without any additional
compensation to Executive.
7
15.4 GOVERNING
LAW. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware, without reference to the
principles of conflicts of laws therein.
15.5 DISPUTE
RESOLUTION AND ARBITRATION. In the event that any dispute arises
between the Employer and the Executive regarding or relating to this Agreement
and/or any aspect of the Executive’s employment relationship with the Employer,
AND IN LIEU OF LITIGATION AND A TRIAL BY JURY, the parties consent to resolve
such dispute through mandatory arbitration under the Commercial Rules of the
American Arbitration Association, before a single arbitrator in Wilmington,
Delaware. The parties hereby consent to the entry of judgment upon award
rendered by the arbitrator in any court of competent jurisdiction.
Notwithstanding the foregoing, however, should adequate grounds exist for
seeking immediate injunctive or immediate equitable relief, any party may seek
and obtain such relief; provided that, upon obtaining such relief, such
injunctive or equitable action shall be stayed pending the resolution of the
arbitration proceedings called for herein. The parties hereby consent
to the exclusive jurisdiction in the state and federal courts located in the
state courts of Delaware, and the parties hereto submit to the personal
jurisdiction of such courts for purposes of seeking such injunctive or equitable
relief as set forth above.
15.6 HEADINGS. All
descriptive headings in this Agreement are inserted for convenience only and
shall be disregarded in construing or applying any provision of this
Agreement.
15.7 COUNTERPARTS. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
15.8 SEVERABILITY. If
any provision of this Agreement, or any part thereof, is held to be
unenforceable, the remainder of such provision and this Agreement, as the case
may be, shall nevertheless remain in full force and effect.
15.9 ENTIRE
AGREEMENT AND REPRESENTATION. This Agreement contains the entire
agreement and understanding between Employer and Executive with respect to the
subject matter hereof. No representations or warranties of any kind
or nature relating to Employer or its several businesses, or relating to
Employer’s assets, liabilities, operations, future plans or prospects have been
made by or on behalf of Employer to Executive. This Agreement
supersedes any prior agreement between the parties relating to the subject
matter hereof.
8
IN WITNESS WHEREOF, the
parties hereto have executed this Employment Agreement as of the date first
above written.
|
By:
|
/s/ Xxxx Xxx | |
| Name: Xxxx Xxx | ||
| Title: Chief Financial Officer | ||
EXECUTIVE
|
|
/s/ An Fengbin | |
| Name: An Fengbin | ||
| Title: Chief Executive Officer | ||
9
