EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT is made and entered into this 1th day of July, 2015 by and between Kiwa Bio-tech Products Group Corp., a Delaware corporation having its principal place of business at 000 X. Xxxxxx Xxxx Xxxx., #000 Xxxxxxxxx, Xxxxxxxxxx and Xxxxx Xx Xxxx, an individual, whose address is 0000 X. Xxxxxx Xxx Xxxx Xxxxxx, XX 00000 (“Executive”), with reference to the following facts:
1.02. Earlier Termination. This Agreement may be terminated earlier as hereinafter provided.
1.04. “Employment Term” Defined. “Employment term” refers to the entire period of employment of Executive by Company, whether for the periods provided above, or whether terminated earlier as hereinafter provided or extended by mutual Agreement between Company and Executive.
| Page 1 of 10 Pages |
2. Duties and Obligations of Executive.
(a) Borrow on behalf of Company in each transaction an amount in excess of $500,000;
(b) Permit any customer of Company to become indebted to Company in an amount in excess of $500,000;
(c) Purchase capital equipment for amounts in excess of the amounts budgeted for expenditure by the Board of Directors;
(d) Sell any single capital asset of Company having a market value in excess of $300,000 or a total of capital assets during a fiscal year having a market value in excess of $1,00,000; and
(e) Commit Company to the expenditure of more than $200,000 in the development and sale of new products or services.
2.03. Devotion to Company’s Business.
(a) Executive shall devote his entire productive time, ability, and attention to the business of Company during the term of this Agreement.
(b) Executive shall not engage in any other business duties or pursuits whatsoever, or directly or indirectly render any services of a business, commercial, or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of Company’s Board of Directors. However, the expenditure of reasonable amounts of time for educational, charitable, or professional activities shall not be deemed a breach of this Agreement if those activities do not materially interfere with the services required under this Agreement and shall not require the prior written consent of Company’s Board of Directors.
| Page 2 of 10 Pages |
(c) This Agreement shall not prohibit Executive from making passive personal investments or conducting private business affairs if those activities do not materially interfere with the services required under this Agreement. However, Executive shall not directly or indirectly acquire, hold, or retain any interest in any business competing with or similar in nature to the business of Company.
(a) During the term of this Agreement Executive shall not, directly or indirectly, either as an Executive, Company, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any business that is in competition in any manner whatsoever with the business of Company.
(b) Executive agrees that during the term of this Agreement and for a period of one year after termination of this Agreement, Executive shall not directly or indirectly solicit, hire, recruit, or encourage any other Executive of Company to leave Company.
(a) The parties acknowledge and agree that during the term of this Agreement and in the course of the discharge of his duties hereunder, Executive shall have access to and become acquainted with financial, personnel, sales, scientific, technical and other information regarding formulas, patterns, compilations, programs, devices, methods, techniques, operations, plans and processes that are owned by Company, actually or potentially used in the operation of Company’s business, or obtained from third parties under an Agreement of confidentiality, and that such information constitutes Company’s ’‘trade secrets.’’
(b) Executive specifically agrees that he shall not misuse, misappropriate, or disclose in writing, orally or by electronic means, any trade secrets, directly or indirectly, to any other person or use them in any way, either during the term of this Agreement or at any other time thereafter, except as is required in the course of his employment.
| Page 3 of 10 Pages |
(c) Executive acknowledges and agrees that the sale or unauthorized use or disclosure in writing, orally or by electronic means, of any of Company’s trade secrets obtained by Executive during the course of his employment under this Agreement, including information concerning Company’s actual or potential work, services, or products, the facts that any such work, services, or products are planned, under consideration, or in production, as well as any descriptions thereof, constitute unfair competition. Executive promises and agrees not to engage in any unfair competition with Company, either during the term of this Agreement or at any other time thereafter.
(d) Executive further agrees that all files, records, documents, drawings, specifications, equipment, software, and similar items whether maintained in hard copy or on line relating to Company’s business, whether prepared by Executive or others, are and shall remain exclusively the property of Company and that they shall be removed from the premises or, if kept on-line, from the computer systems of Company only with the express prior written consent of Company’s Board of Directors.
2.09. Use of Executive’s Name.
(a) Company shall have the right to use the name of Executive as part of the trade name or trademark of Company if it should be deemed advisable to do so. Any trade name or trademark, of which the name of Executive is a part, that is adopted by Company during the employment of Executive may be used thereafter by Company for as long as Company deems advisable.
(b) Executive shall not, either during the term of this Agreement or at any time thereafter, use or permit the use of his name in the trade name or trademark of any other enterprise if that other enterprise is engaged in a business similar in any respect to that conducted by Company, unless that trade name or trademark clearly indicates that the other enterprise is a separate entity entirely distinct from and not to be confused with Company and unless that trade name or trademark excludes any words or symbols stating or suggesting prior or current affiliation or connection by that other enterprise or its Executives with Company.
| Page 4 of 10 Pages |
(a) As compensation for the services to be performed hereunder, Executive shall receive a salary at the rate of $84,000 per annum, of which shall be paid in equal monthly installments of $7,000 during the period of employment, prorated for any partial employment period.
(b) Executive shall receive such annual increases in salary as may be determined by Company’s Board of Directors in its sole discretion at its annual meeting.
5.01. Annual Cash Bonus Based on Performance.
(a) If the employment term is terminated by Company for cause, Executive shall not be entitled to any portion of the annual cash bonus for the fiscal year in which that termination occurs. However, if this Agreement should expire or be terminated for reasons other than cause, Executive shall be entitled to a percentage of the annual cash bonus equal to the percentage of the goals and objectives accomplished.
(b) As additional compensation, Company agrees to grant Executive each year certain number of stock options pursuant to Company’s Stock Incentive Plan and the board resolutions on stock option allocation plan each fiscal year. All terms and conditions of Company’s Stock Incentive Plan, including but not limited to option grant, exercise and any other items are applicable for Executive as a plan participant.
| Page 5 of 10 Pages |
7.01. Lump-Sum Entertainment Fund.
(a) It is understood and agreed by the parties that the services required by Company will require Executive to incur entertainment expenses on behalf of Company. Company hereby agrees to and shall make available to Executive for this purpose the sum of $50,000 per annum, payable in such amounts and at such times as Executive shall request.
(b) Executive shall, however, furnish to Company adequate records and other documentary evidence required by federal and state statutes and regulations for the substantiation of each such expenditure as an income tax deduction.
7.02. Reimbursement of Other Business Expenses.
(a) Company shall promptly reimburse Executive for all other reasonable business expenses incurred by Executive in connection with the business of Company.
(b) Each such expenditure shall be reimbursable only if it is of a nature qualifying it as a proper deduction on the federal and state income tax return of Company.
(c) Each such expenditure shall be reimbursable only if Executive furnishes to Company adequate records and other documentary evidence required by federal and state statutes and regulations issued by the appropriate taxing authorities for the substantiation of each such expenditure as an income tax deduction.
| Page 6 of 10 Pages |
(a) Company reserves the right to terminate this Agreement if Executive willfully breaches or habitually neglects the duties which he is required to perform under the terms of this Agreement; or commits such acts of dishonesty, fraud, misrepresentation or other acts of moral turpitude as would prevent the effective performance of his duties.
(b) Company may at its option terminate this Agreement for the reasons stated in this Section by giving written notice of termination to Executive without prejudice to any other remedy to which Company may be entitled either at law, in equity, or under this Agreement.
(c) The notice of termination required by this section shall specify the ground for the termination and shall be supported by a statement of all relevant facts.
(d) Termination under this section shall be considered ’‘for cause’’ for the purposes of this Agreement.
8.02. Failure to Meet Profit Standard.
(a) If the net operating profits of Company for any annual accounting period of Company shall be less than the net operating profits in the previous fiscal year by 20% percent, Company at its option may terminate this Agreement by giving written notice of termination to Executive.
(b) The term ’‘net operating profits,’’ as used herein, means the net operating profits after taxes as determined and certified by the independent certified public accountants regularly retained by Company in accordance with sound accounting principles and in accordance with the past accounting practices of Company.
(c) Termination under this section shall be considered ’‘for cause’’ for the purposes of this Agreement.
| Page 7 of 10 Pages |
8.03. Termination Without Cause.
(a) This Agreement shall be terminated upon the death of Executive.
(b) Company reserves the right to terminate this Agreement not less than six (6) months after Executive suffers any physical or mental disability that would prevent the performance of his essential job duties under this Agreement, unless reasonable accommodation can be made to allow Executive to continue working. Such a termination shall be effected by giving twenty (20) days’ written notice of termination to Executive. Termination pursuant to this provision shall not prejudice Executive’s rights to continued compensation pursuant to Section 4.02 of this Agreement.
(c) Termination under this section shall not be considered ’‘for cause’’ for the purposes of this Agreement.
8.04. Effect of Merger, Transfer of Assets, or Dissolution.
(a) This Agreement shall not be terminated by any voluntary or involuntary dissolution of Company resulting from either a merger or consolidation in which Company is not the consolidated or surviving corporation, or a transfer of all or substantially all of the assets of Company.
(b) In the event of any such merger or consolidation or transfer of assets, Company’s rights, benefits, and obligations hereunder shall be assigned to the surviving or resulting corporation or the transferee of Company’s assets.
| To Company: | Kiwa Bio-Tech Products Group, Corp. |
000 X. Xxxxxx Xxxx Xxxx., #000
Xxxxxxxxx, Xxxxxxxxxx
| To Executive: | Xxxxx Xx Xxxx |
0000 X. Xxxxxx Xxx
Xxxx Xxxxxx, XX 00000
or to such other address as either of them, by notice to the other may designate from time to time. The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of successful facsimile delivery. Time shall be counted to, or from, as the case may be, the delivery in person or by mailing
| Page 8 of 10 Pages |
9.06. Law Governing Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
9.10. Arbitration. Except for a claim for equitable relief, any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in Los Angeles County, California (unless the parties agree in writing to a different location), before three arbitrators in accordance with the rules of the American Arbitration Association then in effect. In any such arbitration proceeding the parties agree to provide all discovery deemed necessary by the arbitrators. The decision and award made by the arbitrators shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof.
| Page 9 of 10 Pages |
| COMPANY: | EXECUTIVE: | |
| Kiwa Bio-Tech Products Group Corp. | Xxxxx Xx Xxxx | |
| /s/ Xxxxxx Xxxx | /s/ Xxxxx Xx Xxxx | |
| (Authorized Signature) | (Signature) | |
| Xxxxxx Xxxx, Secretary | 7/1/15 | |
| (Print Name and Title) | (Date) | |
| 7/1/15 | ||
| (Date) |
| Page 10 of 10 Pages |