EMPLOYMENT AGREEMENT
Exhibit
10.18
THIS EMPLOYMENT AGREEMENT
(this "Agreement") is
entered into as of the 15th day of
April, 2009, by and between AgFeed Industries, Inc., a
corporation under the laws of Nevada (the "Company"), and Xxxxxx Xxx (the "Executive").
WHEREAS,
the Company desires to set forth the nature and terms upon which the Company
will employ Executive, including the amount of compensation and other benefits
to be provided to Executive and any of the rights of the Executive in the event
of the Executive's termination of employment with the Company. The
Executive is willing to commit to serve the Company on the terms and conditions
herein provided.
NOW,
THEREFORE, in consideration of the promises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Employment. The
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to serve the Company, on the terms and conditions set forth
herein. So long as Executive is employed by the Company, Executive
shall devote such business time and energy to the business of the Company as the
Company reasonably determines.
2. Term. The
term ("Term") of Executive's employment under Section 1 will commence on the
date hereof (the "Effective Date") and shall continue until the third
anniversary of the Effective Date, subject to renewal or earlier termination as
may be set forth in this Agreement.
3. Position and
Duties. Subject to the ultimate control of the Company, the
Executive shall serve as the Chief Financial Officer of the Company and its
subsidiaries, and shall handle such responsibilities and duties as are normally
associated with this position and as may be delegated by the Chief Executive
Officer and Chairman of AgFeed from time to time, including, but not limited to:
(i) overseeing corporate finance; (ii) planning and budgeting; (iii) overseeing
internal control functions for financial system, such as SOX compliance; (iv)
giving financial advice in business development and acquisitions integration and
information technologies. The Executive shall report directly to the Chief
Executive Officer and Chairman of AgFeed.
4. Compensation and Related
Matters.
(a) Base
Salary. During the Executive's employment with the Company,
the Company shall pay to the Executive a base salary at a rate of One Hundred
Twenty Thousand RMB (RMB120,000) per annum (Ten Thousand RMB (RMB10,000) per
month), commencing
on the Effective Date. The Chairman and Chief Executive Officer of
AgFeed, together with AgFeed's Compensation Committee, shall review the
Executive's performance and base salary no less than annually and shall decide
whether to grant any increase or decrease in the Executive's base salary and, if
so, the amount of such increase or decrease based upon such review.
(b) Payment of Base
Salary. The base salary (as determined in accordance with
Section 4(a)) shall be to the Executive in immediately available funds by wire
transfer as directed by the Executive no less frequently than monthly in
arrears.
(c) Bonuses. The
Executive shall be eligible for and may receive bonuses. The amount,
if any, and timing of any bonuses, shall be solely within the discretion of the
Company.
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(d) Expenses. During
the Term, the Executive shall be entitled to receive prompt reimbursement for
all pre-approved expenses incurred by the Executive in performing services
hereunder, including all expenses of travel and living on business at the
request of and in the service of the Company, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
established by the Company.
(e) Benefits. The
Company shall provide the Executive with welfare benefits in accordance with the
Company’s employee manual.
(f) Vacation. The
Executive will be entitled to receive vacations as specified in the Company’s
employee manual.
(g) Stock
Options. On the Effective Date, subject to appropriate
approvals, including approval of the Compensation Committee of AgFeed's Board of
Directors, the Executive shall be granted a stock option (the “Option”) to acquire
30,000 shares of the Company's common stock, par value $0.001 per share, under
the Company's 2008 Long-Term Incentive Plan (the "Plan"). The Option
will be subject to the terms and conditions set forth in the Plan, including but
not limited to, determination of the exercise price of the Option and the
expiration date of the Option. In the event that the Executive ceased
to be employed by the Company or AgFeed prior to the initial vesting date, the
Option shall be forfeited and deemed void and of no effect.
5. Directors and Officers
Liability Insurance. During the term of this Agreement, AgFeed
shall have in force and effect (at its own cost) Directors and Officers
Liability Insurance, with coverage in such amounts as may be deemed appropriate
by AgFeed’s Board of Directors. The Executive shall be a covered
employee under such insurance.
6. Termination.
(a) The
Executive's employment under this Agreement may be terminated by the Executive
or the Company at any time, with or without Cause (as defined
below).
(b) In
the event of termination by the Company without Cause, or in the event of the
Executive's death or disability or a Constructive Termination (as defined
below), the Company shall pay the Executive a lump sum severance amount equal
to:
(i) $3,000,
if such termination or Constructive Termination occurs on or before the first
anniversary of the Effective Date;
(ii) $6,500,
if such termination or Constructive Termination occurs after the first
anniversary but on or before the second anniversary of the Effective Date;
or
(iii) $10,000,
if such termination or Constructive Termination occurs on or after the second
anniversary of the Effective Date.
In the
event of termination by the Company with Cause, or if the Executive voluntarily
terminates her employment, then the Executive shall not be entitled to the
severance payment described in Section 6(b).
(c) In
the event of termination by the Company without Cause, or in the event of the
Executive's death or disability or a Constructive Termination, any options
granted to the Executive (including the Option) shall vest immediately and may
be exercised in full or in part within one (1) year from the date of
termination, the Executive's death or disability, or Constructive
Termination. The effect of any other termination of the Executive's
employment on options granted to the Executive shall be the immediate
cancellation and forfeiture of any unexercised portion of the Option (whether or
not vested).
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(d) For
the purposes of this Agreement, "Cause" shall mean (1) a refusal, failure, or
inability to perform any reasonable assigned duties; (2) a material breach or
violation of this Agreement; (3) conduct by the Executive that constitutes gross
negligence or wilful misconduct; (4) material failure to follow AgFeed's
policies, directives, or orders applicable to AgFeed employees holding
comparable positions; (5) intentional destruction or theft of AgFeed property or
falsifications of AgFeed documents; (6) conviction of a felony or any crime
involving moral turpitude or a misdemeanor where imprisonment in excess of
fifteen (15) days is imposed; or (7) violation of AgFeed's Code of
Conduct.
(e) For
the purposes of this Agreement, "Constructive Termination" shall mean: (1)
material reduction by the Company of the scope of the Executive's duties for
forty (40) consecutive Business Days, (2) a material reduction in the
Executive's base salary, or (3) the continued assignment to the Executive of any
duties materially inconsistent with the level of her position with the Company;
provided that none of the foregoing events shall be deemed to result in a
Constructive Termination if the Executive consents to such events or if such
events are the result of actions of the Company or its Board of Directors that
are applicable to all officers of the Company.
(f) The
Company may extend the Term of this Agreement for successive two year terms so
long as the Company provides the Executive at least sixty (60) calendar days
advance written notice and with the consent of the Executive prior to the
expiration of the Term.
(g) A
“Business Day”
means any day other than (1) a Saturday, Sunday or legal holiday, or (2) a day
on which commercial banks in Beijing, PRC are authorized or required by law to
close.
7. Confidential
Information. In the course of the Executive’s employment with
the Company, the Executive may become aware of confidential information
including, without limitation, financial information, computer system and
software designs, customer lists, market research, strategic plans, and other
non-public or similar information that relates to the business of AgFeed and
their affiliates, investors, business partners, customers and/or
clients. The Executive will not use or disclose any such confidential
information of AgFeed, the Company and their affiliates, investors, business
partners, customers or clients except in the course of her duties to AgFeed or
unless ordered to do so by a court of competent jurisdiction (in which latter
case the Executive will promptly inform AgFeed of such order). The
Executive will comply with AgFeed’s or the Company's policies and procedures for
the protection of confidential information. Further, the Executive’s
obligation not to disclose or use such confidential information will continue
after the termination of the Executive’s employment for whatever
reason. Confidential information excludes any information which was
not obtained from AgFeed (or a director, officer, employee or agent of AgFeed)
or which is or becomes known by the public or in AgFeed’s or the Company's
industry other than by a breach by the Executive of a confidentiality obligation
to AgFeed.
8. Non-Solicitation and
Non-Compete
(a) The
Company and the Executive agree that until the Termination Date, the Executive
shall devote substantially all of her working time to the business and affairs
of AgFeed.
(b) The
Executive agrees that for a period of twelve (12) months following the date of
termination of the Executive’s employment with the Company for any reason (the
“Termination
Date”), the Executive will not, and will not assist anyone else to,
directly or indirectly solicit or induce any of AgFeed’s employees to terminate
their employment with AgFeed or divert, interfere with or take away from AgFeed
any person, company or entity which, within the six month period immediately
preceding the Termination Date, was an investor, customer, client, supplier,
business partner, prime contractor, subcontractor, employee or independent
contractor of AgFeed.
(c) From
the Termination Date and for a period of twelve (12) months thereafter, the
Executive agrees that she will not, directly or indirectly, as an equity owner,
director, employee, consultant, lender, agent or in any other capacity, (1)
engage or participate in, or have any interest in any corporation, entity or
other person that engages or participates in any actual, contemplated, or
proposed business or activity engaged or participated in by AgFeed or their
subsidiaries on the Termination Date, or (2) engage or participate in, or have
an interest in any corporation, entity or other person that participates in a
merger, acquisition or consolidation with AgFeed or any of their
subsidiaries.
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(d) For
purposes of Section 8(c), the Executive will be deemed directly or indirectly to
be engaged or participating in the operation of such a business or activity, or
to have an interest in a corporation, entity or other person, if she is a
proprietor, partner, joint venturer, shareholder, director, officer, lender,
manager, employee, consultant, advisor or agent or if she, directly or
indirectly (including as a member of a group), controls all or any part thereof;
provided, that nothing in Section 8(c) shall prohibit the Executive from holding
less than five percent (5%) of a class of an entity's outstanding securities
that are listed on a national securities exchange or traded in the
over-the-counter market.
9. Binding
Agreement. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees. If the Executive should die while
any amounts would still be payable to the Executive hereunder if the Executive
had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate. This Agreement and all rights of the Company
hereunder shall inure to the benefit of and be enforceable to the Company, and
its successors and assigns.
10. Prior
Agreements. All prior agreements between the Company and the
Executive with respect to the employment of the Executive are hereby superseded
and terminated effective as of the date hereof and shall be without further
force or effect.
11. Miscellaneous. No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in a writing signed by the
Executive and a duly authorized officer of the Company. No waiver by
either party hereto 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 of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. 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 set forth expressly in this Agreement.
12. Governing
Law/Venue. This Agreement shall be governed by and construed
under the laws of the PRC, without regard to that country's conflicts of laws
principles.
13. Validity. The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
14. Severability;
Headings. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in any way to describe, interpret, define or limit the extent of intent of the
Agreement or of any part hereof.
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IN WITNESS WHEREOF, the
parties have executed this Employment Agreement on the date and year first above
written.
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COMPANY:
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By:
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/s/ Songyan Li
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Name:
Songyan Li
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Title:
Chairman
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EXECUTIVE:
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/s/ Xxxxxx Xxx
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XXXXXX
XXX
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