EMPLOYMENT AGREEMENT
Exhibit
10.9
THIS
EMPLOYMENT AGREEMENT (the "Agreement") is made effective as of September 16,
2010, between BUDDHA STEEL, INC. a Delaware corporation (the "Company") and XX.
XXXXXXXXX XX (the "Executive").
1. EMPLOYMENT
The
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to be employed by the Company, on the terms and conditions set forth
herein.
2. TERM
The term
("Term") of this Agreement shall begin on September 16, 2010 and will
terminate on September 15, 2013 unless sooner terminated as hereinafter
provided.
3. POSITION
AND DUTIES
3.1 Position. The
Executive hereby agrees to serve as Chief Executive Officer of the
Company. At the Company's request, the Executive may, at the
Executive's discretion, serve the Company and/or its respective subsidiaries and
affiliates in other offices and capacities in addition to the foregoing, but
shall not be required to do so. In the event that the Executive,
during the term of this Agreement, serves in any one or more of the
aforementioned capacities, the Executive's compensation shall not be increased
beyond that specified in Section 4 of this Agreement. In addition, in
the event the Company and the Executive mutually agree that the Executive shall
terminate the Executive's service in any one or more of the aforementioned
capacities, or the Executive's service in one or more of the aforementioned
capacities is terminated, the Executive's compensation, as specified in Section
4 of this Agreement, shall not be diminished or reduced in any
manner.
3.2 Duties. The
Company agrees that the duties that may be assigned to the Executive shall be
the usual and customary duties of the Chief Executive Officer.
3.3 Devotion
of Time and Effort. Executive shall use Executive's good faith best efforts and
judgment in performing Executive's duties as required hereunder and to act in
the best interests of the Company. Executive shall devote such time,
attention and energies to the business of the Company as are reasonably
necessary to satisfy Executive's required responsibilities and duties
hereunder.
3.4 Other
Activities. The Executive may engage in other activities for the
Executive's own account while employed hereunder, including without limitation
charitable, community and other business activities, provided that such other
activities do not materially interfere with the performance of the Executive's
duties hereunder.
4. COMPENSATION
AND RELATED MATTERS
4.1 Salary. During
the Term, the Company shall pay the Executive a salary of Fifteen Thousand US
DOLLARS (USD 15,000.00) per month (the "Base Salary"). The
Executive's performance and salary shall be subject to review at any time, and
an increase in salary, if one is so determined by the Board, shall be made, on a
basis consistent with the standard practices of the Company.
4.2 Stock
Options. Executive shall be granted a five year option to purchase up
to 150,000 shares of the Company's Common Stock on a cash exercise basis at an
exercise price of $8.50 per share. Should the offering price of the
Company’s next registered offering of securities be less than $7.75, the
exercise price will be the offering price of the shares registered in that
offering. Subject to the provisions of Section 6, and for so long as Executive
is an employee of the Company, such options shall vest at
issuance.
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4.3 Business
Expenses. The Company shall promptly, in accordance with Company
policy, reimburse the Executive for all reasonable business expenses incurred in
accordance with and subject to the limits set forth in the Company's written
policies with respect to business expenses, upon presentation to the Company of
written receipts for such expenses. Notwithstanding the Company’s
written policies, with prior written approval by the Company, all international
air travel shall be the lesser of business class or first class and all lodging
in the US shall be in at least 4 star hotels.
5. TERMINATION
5.1 Cause. The
Company may terminate the Executive for Cause at any time, upon written notice
to Executive. For purposes of this Agreement, "Cause" shall
mean:
(a) The
Executive's conviction for commission of a felony or a crime involving moral
turpitude;
(b) The
Executive's willful commission of any act of theft, embezzlement or
misappropriation against the Company; or
(c) The
Executive's material failure to perform his duties hereunder.
5.2 Termination
Without Cause. The Company may terminate this Agreement without Cause
at any time, provided that the Company first delivers to the Executive the
Company's written election to terminate this Agreement at least thirty (30) days
prior to the effective date of termination.
6. COMPENSATION
UPON TERMINATION
6.1 Termination
for Cause. In the event the Executive's employment shall be terminated for Cause
pursuant to Section 5.1 hereof, the Company shall pay the Executive his salary
through the date of termination.
6.2 Termination
without Cause, Termination by Mutual Agreement, Disability or
Death. In the event of a Termination without Cause pursuant to
Section 5.2, by mutual agreement of the parties hereto, or due to disability or
death of Executive, the Company shall pay the Executive through the date of
termination.
6.3 Termination
for any reason. The options granted under Section 4.2 shall be subject to a
“clawback” provision. The options granted or their realized value from exercise
shall be recoverable on a sliding scale from the Executive by the Company. The
scale is as follows: 125,000 options or the equivalent dollar value shall be
returned to the Company if the Executive is terminated within 6 months of this
agreement. 100,000 options or the equivalent dollar value shall be returned to
the Company if the Executive is terminated more than 6 months but less than 12
months of this agreement. 75,000 options or the equivalent dollar value shall be
returned to the Company if the Executive is terminated more than 12 months but
less than 18 months of this agreement. 50,000 options or the equivalent dollar
value shall be returned to the Company if the Executive is terminated in more
than 18 months but less than 24 months of this agreement. 25,000 options or the
equivalent dollar value shall be returned to the Company if the Executive is
terminated more than 24 months but less than 36 months of this
agreement
7.
CONFIDENTIALITY
AND NON-SOLICITATION COVENANTS
7.1 Non-Competition. The
Executive agrees that during the Term of this Agreement prior to any termination
of his employment hereunder and for a period of two (2) years following the date
on which the Executive's employment hereunder is terminated, he will not
directly or indirectly, without the prior written consent of the Company,
manage, operate, join, control, participate in, or be connected as a stockholder
(other than as a holder of shares publicly traded on a stock exchange or the
NASDAQ National Market System), partner, or other equity holder with, or as an
officer, director or employee of, any other company whose business strategy is
competitive with that of the Company, as determined by a majority of the
Company's independent directors.
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7.2 Confidentiality.
The Executive hereby agrees that the Executive will not, during the Term or at
any time thereafter directly or indirectly disclose or make available to any
person, firm, corporation, association or other entity for any reason or purpose
whatsoever, any Confidential Information (as defined below). The Executive
agrees that, upon termination of his employment with the Company, all
Confidential Information in his possession that is in written or other tangible
form (together with all copies or duplicates thereof, including computer files)
shall be returned to the Company and shall not be retained by the Executive or
furnished to any third party, in any form except as provided herein; provided,
however, that the Executive shall not be obligated to treat as confidential, or
return to the Company copies of any Confidential Information that (i) was
publicly known at the time of disclosure to the Executive, (ii) becomes publicly
known or available thereafter other than by any means in violation of this
Agreement or any other duty owed to the Company by the Executive, or (iii) is
lawfully disclosed to the Executive by a third party. As used in this
Agreement the term "Confidential Information" means information disclosed to the
Executive or known by the Executive as a consequence of or through his
relationship with the Company, about the owners, employees, business methods,
public relations methods, organization, procedures, property acquisition and
development, or finances, including, without limitation, information of or
relating to the Company and its affiliates.
7.3 Non-Solicitation. For
a period of two (2) years following the date on which the Executive's employment
hereunder is terminated, the Executive shall not solicit or induce any of the
Company's employees, agents or independent contractors to end their relationship
with the Company, or recruit, hire or otherwise induce any such person to
perform services for the Executive, or any other person, firm or
company.
7.4 Return
of Property. The Executive hereby acknowledges and agrees that all
Personal Property and equipment furnished to or prepared by the Executive in the
course of or incident to his employment, belongs to the Company and shall be
promptly returned to the Company upon termination of the Employment Period.
"Personal Property" includes, without limitation, all electronic devices of the
Company used by the Executive, including, without limitation, personal
computers, facsimile machines, cellular telephones, pagers and tape recorders
and all books, manuals, records, reports, notes, contracts, lists, blueprints,
maps and other documents, or materials, or copies thereof (including computer
files), and all other proprietary information relating to the business of the
Company. Following termination, the Executive will not retain any written or
other tangible material containing any proprietary information of the
Company.
7.5 Reasonableness
of Restrictions. Each of sections 7.1, 7.2, and 7.3 set out above is
acknowledged by Executive to be reasonable in duration, extent and application
and is the minimum protection necessary for the Company in respect of its
goodwill, Confidential Information, trade connections and
business. Each of the covenants and obligations on Executive’s part
set out in sections 7.1, 7.2, and 7.3 is deemed to be separate and severable and
enforceable by the Company accordingly. If any of the restrictions set out above
are held to be void but would be valid if part of the wording was deleted such
restriction shall apply with such deletion as may be necessary to make it valid
and effective.
7.6 The
restrictions set forth in Sections 7.1, 7.2, and 7.3 hereof shall not apply if
the Executive's employment is terminated pursuant to Section 5.2 hereof or in
the event that any form of compensation due Executive pursuant to the provisions
of Section 4 is not provided as required when due.
7.7 In
the event of a breach by Executive of this Section 7, any obligations for
payment by the Company otherwise due pursuant to Section 6 hereof shall be
void.
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8. GENERAL
PROVISIONS
8.1 Injunctive
Relief and Enforcement. The Executive acknowledges that the remedies
at law for any breach by her of the provisions of Section 7 hereof may be
inadequate and that, therefore, in the event of breach by the Executive of the
terms of Section 7 hereof, the Company shall be entitled to institute legal
proceedings to enforce the specific performance of this Agreement by the
Executive and to enjoin the Executive from any further violation of Section 7
hereof and to exercise such remedies cumulatively or in conjunction with all
other rights and remedies provided by law and not otherwise limited by this
Agreement.
8.2 Notice. For
the purposes of this Agreement, notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when addressed as follows and (i) when personally delivered,
(ii) when transmitted by telecopy, electronic or digital transmission with
receipt confirmed, (iii) one day after delivery to an overnight air courier
guaranteeing next day delivery, or (iv) upon receipt if sent by certified or
registered mail. In each case notice shall be sent to:
If to
Executive: Xx.
Xxxxxxxxx Xx
If
to the Company: Xx.
Xxxxxx Xxxx
Dachang
Hui Autonomous County
Industrial
Park
Hebei
Province, China 065300
or to
such other address as any 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.
8.3 Severability. 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. In addition,
in the event any provision in this Agreement shall be determined by any court of
competent jurisdiction to be unenforceable by reason of extending for too great
a period of time or over too great a geographical area or by reason of being too
extensive in any other respect, each such agreement shall be interpreted to
extend over the maximum period of time for which it may be enforceable and to
the maximum extent in all other respects as to which it may be enforceable, and
enforced as so interpreted, all as determined by such court in such
action.
8.4 Assignment. This
Agreement may not be assigned by the Executive, but may be assigned by the
Company to any successor to its business and will inure to the benefit and be
binding upon any such successor.
8.5 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
instrument.
8.6 Headings. The
headings contained herein are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
8.7 Choice
of Law; Venue. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Delaware without giving
effect to the principles of conflict of laws thereof. By execution and delivery
of this Agreement, the parties agree and accept that any legal action or
proceeding brought with respect to this Agreement shall be brought in the court
of appropriate jurisdiction in and for the State of Delaware, and the parties
expressly waive any objection to personal jurisdiction, venue or forum non
conveniens.
8.12 Entire Agreement. This
Agreement contains the entire agreement and understanding between the Company
and the Executive with respect to the employment of the Executive by the Company
as contemplated hereby, and no representations, promises, agreements or
understandings, written or oral, not herein contained shall be of any force or
effect. This Agreement shall not be changed unless in writing and
signed by both the Executive and the Board.
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8.13 Amendments;
Waivers. This Agreement may be amended or modified, and any of the
terms and covenants may be waived, only by a written instrument executed by the
parties hereto, or, in the case of a waiver, by the party waiving
compliance. Any waiver by any party in any one or more instances of
any term or covenant contained in this Agreement shall neither be deemed to be
nor construed as a further or continuing waiver of any such term or covenant of
this Agreement.
IN
WITNESS WHEREOF, the parties have executed this Employment Agreement as of the
date and year first above written.
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“Company”
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BUDDHA
STEEL, INC., a Delaware corporation
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By:
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/s/ Xxxxxx Xxxx
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Xx.
Xxxxxx Xxxx, Director, Chief Operating Officer
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“Executive”
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/s/ Hongzhong Li
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Xx.
Xxxxxxxxx Xx
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