Exhibit 10.3 Employment Agreement
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated January 27 , 2006 (this "Agreement") by and
between CHINA DIRECT TRADING CORPORATION, a Florida corporation ("CHDT"),
COMPLETE POWER SOLUTIONS, LCC, a Florida limited liability company ("CPS")
(collectively referred herein as "Employer"), and XXXXXXX XXXX, an individual
("Executive).
RECITALS
A. Concurrently with the execution and delivery of this Agreement,
Executive has sold fifty-one percent (51%) of the member interests of CPS to
CHDT pursuant to that certain Purchase Agreement dated January 27, 2006 (the
"Purchase Agreement"). Capitalized terms used herein without definition have the
meanings ascribed to them in the Purchase Agreement.
B. Executive serves as President of CPS and Executive has contributed
substantially to the success and growth of CPS and its business, and Employer
desires to employ Executive to reinforce and encourage the continued success and
growth of CPS and its business following the Closing.
C. In connection with the Purchase Agreement, CHDT, Executive and CPS
have entered into a limited liability company operating agreement of even date
herewith (the "Operating Agreement") pursuant to which, among other things,
Executive serves as a member of the board of managers of CPS and has the right
to nominate and have elected a majority of the members of the Board of Managers
of CPS.
D. CPS desires to assure the continued services of Executive and the
Executive desires to continue employment with CPS.
E. In order to promote these goals, and in satisfaction of a condition
to the consummation of the transactions contemplated by the Purchase Agreement,
Employer and Executive have entered into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, and the
mutual promises of the parties hereto, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, each intending to be legally bound, agree as follows:
1. RECITALS. The Recitals are true and correct and are hereby
incorporated into this Agreement by this reference.
2. EMPLOYMENT; DUTIES; AND ACCEPTANCE.
2.1 Employment by the Company; Duties. On the terms and
subject to the conditions set forth herein, Employer hereby agrees to employ
Executive for a period beginning on the date hereof, and continuing for a period
of five (5) years, unless earlier terminated as herein provided (the "Term").
During the Term, Executive shall serve in the capacities of President, Chief
Executive Officer ("CEO") and a member of the Board of Managers of CPS and shall
report to the Board of Directors of CHDT. Executive shall possess all power and
authority to manage CPS which an individual holding the titles of President and
CEO would normally possess.
2.2 Acceptance of Employment by Executive. Executive hereby
accepts such employment and agrees to render the services and perform the duties
described above. During the Term, Executive shall use his good faith and best
efforts and judgment in performing Executive duties as required hereunder and
shall act in the best interests of the Employer. Executive shall be employed
full time by Employer and shall devote such time, attention and energies to the
business of Employer as are reasonably necessary to satisfy Executive's required
responsibilities and duties hereunder.
3. COMPENSATION AND OTHER BENEFITS.
3.1 Annual Salary. During the Term, Employer shall pay to
Executive an initial base salary ("Base Salary") at an annual rate of $100,000
per year, subject to annual increases in an amount equal to not less than the
greater of (a) the most recently reported annual positive change in the Consumer
Price Index and (b) five percent (5%) of Executive's prior year's Base Salary
further increased by any amount determined by the disinterested members of the
Board of Directors of CHDT.
3.2 Bonus.
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(a) In addition to the Annual Salary, Executive shall be
eligible to receive a bonus ("Bonus") in an amount equal to twenty percent (20%)
of the net income of CPS determined in accordance with generally accepted
accounting principals and payable ninety (90) days after the end of CPS' fiscal
year.
(b) Employer shall provide Dato with a schedule (the "Bonus
Schedule") showing the calculation of the Bonus, including the determination of
net income. Employer shall provide Dato upon his request with the opportunity to
review any work papers or other information relied upon by Employer in
calculating the Bonus. For a period of ten (10) business days following receipt
of the Bonus Schedule, Dato may dispute the calculation of the Bonus by
providing CHDT and Employer with a statement of his disagreement, which sets
forth in reasonable detail as the basis for his disagreement (the "Objection
Notice"). Dato, Employer and CHDT shall attempt in good faith to settle the
dispute. However, if the parties are unable to settle the disagreement within
ten (10) business days following delivery of the Objection Notice, either Dato
or CHDT shall have the right to present the dispute to an independent arbitrator
experienced in such matters who shall settle such dispute in accordance with the
rules of the American Arbitration Association. The cost of any such arbitration
shall be borne by the losing party.
3.3 Withholding, Etc. The payment of Salary and Bonus
hereunder shall be subject to applicable withholding and payroll taxes, and
other such deductions as may be required by law or under Employer's employee
benefit plan.
3.4 Other Benefits. Executive shall be entitled to receive the
standard benefits afforded to other senior executives of CHDT and its
subsidiaries, including, without limitation, health insurance, certain annual
compensated absences for vacation, equity incentives, car allowance and an
expense account.
4. TERMINATION.
4.1 Termination upon Death. If Executive dies during the Term,
this Agreement shall terminate, except that Executive's legal representatives
shall be entitled to receive at the times provided for herein (a) the Annual
Salary earned up to the date of Executive's death and (b) unpaid Benefits and
Bonuses accrued up to the date of Executive's death.
4.2 Termination Without Cause. Either party may terminate
Executive's employment upon 30 days written notice to the other party; provided,
however, that if Employer terminates Executive "Without Cause", he shall be
entitled to Severance as set forth in Section 4.5.
4.3 Termination for Good Reason. Executive may terminate his
employment hereunder for "Good Reason"; provided, however, that if Executive
terminates his employment for "Good Reason", he shall be entitled to Severance
as set forth in Section 4.5 . As used herein, "Good Reason" means:
(i)ny act of constructive termination, including, without limitation,
the assignment to Executive of duties inconsistent with the position of CEO and
any substantial adverse change in Executive's position, including titles,
authority or responsibility;
(ii) failure by CHDT or CPS to comply with the terms of this Agreement
or the Purchase Agreement; or
(iii) requiring Executive without his consent to be based at any
location other than his current offices in south Florida.
4.4 Termination for Cause. Employer may terminate Executive's
employment at any time, upon written notice to Executive, for "Cause." As used
herein, "Cause" means the conviction of Executive and the exhaustion of all
appeals by a court of competent jurisdiction with respect to the following:
(i) the intentional breach by Executive of any duty of loyalty owed by
Executive in his capacities as an officer, director or shareholder of CPS or
CHDT having a material adverse effect on CPS or CHDT;
(ii) an act of fraud relating to CPS or CHDT;
(iii) any criminal act involving moral turpitude; or
(iv) gross negligence or intentional dereliction in the performance by
Executive of his duties under this Agreement resulting in material damage to the
business or reputation of CPS or CHDT after notice of such conduct in writing.
4.5 Severance. In the event that Executive's employment is
terminated pursuant to Sections 4.2 or 4.3, then Executive shall be entitled to
a severance payment in cash equal to three (3) times his annual Base Salary
("Severance"). Payment of this Severance shall be guaranteed by CHDT, which
guarantee shall be secured by the pledge of shares of common stock of CHDT
having a fair market value not less than the Severance.
4.6 Disability. If during the Term Executive becomes
physically or mentally disabled so that Executive is unable substantially to
perform Executive's duties hereunder for (a) a period of 270 consecutive days,
or (b) for shorter periods aggregating 270 days during any 365-day period,
Employer may at any time after the last day of the nine consecutive months of
disability or the day on which the shorter periods of disability equal an
aggregate of 270 days terminate Executive's employment under this Agreement by
written notice to Executive. In the event that Executive's employment under this
Agreement is terminated pursuant to this Section 4.6, Executive shall be
entitled to receive (i) the Annual Salary earned up to the date of such
termination, and (ii) unpaid Benefits and Bonuses accrued up to the date of such
termination. Nothing in this Section 4.6 shall be deemed to extend the Term or
to constitute a breach of this Agreement.
5. MISCELLANEOUS.
5.1 Benefits; Binding Effect. This Agreement shall be for the
benefit of and binding upon the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and, where
applicable, assigns. Notwithstanding the foregoing, Executive may not assign his
rights or benefits or delegate any of his duties, hereunder without the prior
written consent of Employer. Employer may assign its rights or benefits, or
delegate any of its duties, hereunder without the prior written consent of
Executive.
5.2 Provisions Severable. This Agreement is intended to be
performed in accordance with, and to the extent permitted by, all applicable
laws, ordinances, rules, and regulations of the State of Florida. If any
provision of this Agreement shall be adjudicated to be invalid or unenforceable,
then such provision shall be deemed modified, as to duration, territory or
otherwise, so as to be enforceable in a manner such that its substantive effect
is as similar as possible to the provision at issue consistent with rendering
the remainder of this Agreement valid and enforceable. The invalidity or
unenforceability of any provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision were omitted.
5.3 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior discussions and agreements, written or oral, with respect
thereto.
5.4 Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by both parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof. No waiver on the part of any party of any right, power or
privilege hereunder, or any single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any right, power or privilege hereunder.
5.5 Governing Law and Enforcement. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
and enforcement of this Agreement or any action taken or held with respect to
this Agreement may be taken in courts of Broward County, Florida or the federal
courts of the southern district of Florida.
5.6 Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which together shall constitute one agreement.
5.7 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
5.8 Gender. Any pronoun used herein may be deemed to mean the
corresponding masculine, feminine or neuter in form thereof and the singular
form of any nouns and pronouns herein may be deemed to mean the corresponding
plural and vice versa as the case may require.
5.9 Survival. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement.
5.10 Notices. Any notice required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been given
when delivered by hand or when deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid
addressed as follows:
To CHDT: China Direct Trading Corporation
00000 Xxxxxxx Xxxx, #000
Xxxxxx Xxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx, President
To CPS: Complete Power Solutions Corporation
0000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx 0-0
Xxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxx, President
To Executive: Xxxxxxx Xxxx
0000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx 0-0
Xxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxx, President
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
CHINA DIRECT TRADING CORP.
By: _________________________
Name: Xxxxxx Xxxxxx
Title: CEO and President
COMPLETE POWER SOLUTIONS CORP.
By: __________________________
Name: Xxxxxxx Xxxx
Title: President
XXXXXXX XXXX
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Xxxxxxx Xxxx, individually
