EMPLOYMENT AGREEMENT
AGREEMENT
dated as
of the 15th
day of
January, 2008, by and among China Display Technologies, Inc., a Delaware
corporation with its principal office at 12A Block, Xinhe Road, No. 3 Xinqiao,
Industrial Zone, Shajing District, Baoan Town, Shenzhen, China
150090 (the
“Company”), and Xxx Xxx Ming, an individual residing at Xxxx X, 00/X., Xxxxxx
Xxxx Xxxxx, Xxx Xxxx Plaza, Phase III, Shatin, Hong Kong
(“Executive”).
WITNESSETH:
WHEREAS,
the
Company desires to engage Executive to serve at its chief financial officer
on
and subject to the terms of this Agreement;
NOW,
THEREFORE,
in
consideration of the mutual promises set forth in this Agreement, the parties
agree as follows:
1. Employment
and Duties.
(a) Subject
to the terms and conditions hereinafter set forth, the Company hereby employs
Executive as chief financial officer, during the Term, as hereinafter defined.
As chief financial officer of the Company, Executive shall have the duties
and
responsibilities associated with the chief financial officer of a public
corporation. Executive shall report to the Company’s chief executive officer.
Executive shall also perform such other duties and responsibilities as may
be
determined by the Company’s board of directors (the “Board”), as long as such
duties and responsibilities are consistent with those of the Company’s chief
financial officer.
(b) The
“Probation Term” shall mean the period commencing on January 15, 2008 and ending
on April 14, 2008. The “Term” shall mean the period commencing on April 15, 2008
and continuing thereafter until terminated pursuant to Section 5 of this
Agreement.
2. Executive’s
Performance.
Executive hereby accepts the employment contemplated by this Agreement. During
the Term, Executive shall perform his duties diligently, in good faith and
in a
manner consistent with the best interests of the Company, and shall devote
substantially all of his business time to the performance of his duties under
this Agreement. In the course of his employment, Executive shall comply with
all
policies, including Codes of Ethics, that are applicable to the Company’s
officers in general and chief financial and accounting officers, in
particular.
3. Compensation
and Other Benefits.
(a) For
his
services during the Probation Term and during the Term, the Company shall pay
Executive a salary (“Salary”) at the monthly rate of sixty five thousand Hong
Kong dollars (HK$65,000). Salary payments shall be payable monthly in arrears
in
accordance with the Company’s policy on executive compensation.
(b) Executive
shall not be entitled to any fringe benefits during the Probation Term. During
the Term, Executive shall receive, in addition to Salary, the following
benefits:
(i)
An
annual bonus equal to one month’s salary, payable in December of each year,
based on the monthly salary in effect on November 30 of the year.
(ii)
Such
benefits as are available to Company employees.
(iii)
Ten
days paid sick leave annually. If such sick leave exceeds two days in any one
month, the Executive must provide a physician’s certificate describing the
reasons for the sick leave, which the Company may in its sole discretion approve
or disapprove.
(iv)
Twenty days paid leave annually. Such paid leave may not be carried over or
be
exchanged for cash. Executive shall schedule his leave in a manner consistent
with his duties as chief financial officer, including his services required
in
connection with the Company’s filings with the United States Securities and
Exchange Commission, and the Company’s vacation policy.
(v)
Eligibility to participate in any employee stock option plan or other equity
participation plans that are available to employees of the Company, it being
understood that the grant of options or other equity-based incentives is in
the
discretion of the compensation committee of the board of directors.
(c) During
the Term, Executive shall be eligible for such bonuses payments and increases
in
Salary as shall be determined by the Compensation Committee in its sole
discretion.
(d) The
Company shall grant to Executive 50,000 shares (the “Grant”) per year during the
Term. The initial Grant shall vest in nine equal monthly installments,
commencing April 15, 2008 through and including January 15, 2009. The Company
shall make an additional 50,000 share Grant of the commencement of the Term,
provided that Executive shall be employed by the Company as chief financial
officer on that date. Executive shall be eligible for additional annual Grants
of 50,000 shares, in the discretion of the Compensation Committee. The terms
of
the Grants shall be set forth in the Instrument of Grant from the Company to
the
Executive. If this Agreement is terminated pursuant to Section 5, any nonvested
Shares shall be automatically forfeited to the Company unless the Company
otherwise notifies the Executive. Upon notice from the Company of such
forfeiture, the Executive shall immediately return to the Company any stock
certificate that evidences non-vested Shares and shall execute and all such
documents and instruments to all the Company to reacquire the forfeited Shares.
The certificates for these shares shall include an appropriate legend referring
to the forfeiture provisions of the Grant.
4. Reimbursement
of Expenses.
The
Company shall reimburse Executive, upon presentation of proper expense
statements, for all authorized, ordinary and necessary out-of-pocket expenses
reasonably incurred by Executive during the Term in connection with the
performance of his services pursuant to this Agreement in accordance with the
Company’s expense reimbursement policy.
5. Termination
of Employment
(a) During
the Probation Term, this Agreement and Executive’s Employment, may be terminated
by the Company or Executive for any reason and without any prior notice. No
severance pay shall be payable to Executive for termination during the Probation
Term.
(b) During
the Term, this Agreement and Executive’s employment pursuant to this Agreement
may be terminated by the Executive or the Company on not less than 30 days’
written notice, provided that the Company may elect to terminate this Agreement
and the Executive’s employment pursuant to this Agreement forthwith upon payment
to the Executive one month’s Salary.
-2-
6. Trade
Secrets and Proprietary Information.
(a) Executive
recognizes and acknowledges that the Company, through the expenditure of
considerable time and money, has developed and will continue to develop in
the
future confidential information. “Confidential information” shall mean all
information of a proprietary or confidential nature relating to Covered Persons,
including, but not limited to, such Covered Person’s trade secrets or
proprietary information, confidential know-how, and marketing, services,
products, business, research and development activities, inventions and
discoveries, whether or not patentable, and information concerning such Covered
Person’s services, business, customer or client lists, proposed services,
marketing strategy, pricing policies and the requirements of its clients and
relationships with its lenders, suppliers, licensors, licensees and others
with
which a Covered Person has a business relationship, financial or other data,
technical data or any other confidential or proprietary information possessed,
owned or used by the Company, the disclosure of which could or does have a
material adverse effect on the Company, its businesses, any business in which
it
proposes to engage. Executive agrees that he will not at any time use or
disclose to any person any confidential information relating to Company;
provided, however, that nothing in this Section 6(a) shall be construed to
prohibit Executive from using or disclosing such information if he can
demonstrate that such information (i) became public knowledge other than by
or
as a result of disclosure by a person not having a right to make such disclosure
or (ii) was disclosure that was authorized by the Company. The term “Covered
Person” shall include the Company, any subsidiaries and affiliates and any other
person who provides information to the Company pursuant to a secrecy or
non-disclosure agreement.
(b) In
the
event that any confidential information is required to be produced by Executive
pursuant to legal process (including judicial process or governmental
administrative subpoena), Executive shall give the Company notice of such legal
process within a reasonable time, but not later than ten business days prior
to
the date such disclosure is to be made, unless Executive has received less
notice, in which event Executive shall immediately notify the Company. The
Company shall have the right to object to any such disclosure, and if the
Company objects (at the Company’s cost and expense) in a timely manner so that
Executive is not subject to penalties for failure to make such disclosure,
Executive shall not make any disclosure until there has been a court
determination on the Company’s objections. If disclosure is required by a court
order, final beyond right of review, or if the Company does not object to the
disclosure, Executive shall make disclosure only to the extent that disclosure
is required by the court order, and Executive will
exercise reasonable efforts at the Company’s expense, to obtain reliable
assurance that confidential treatment will be accorded the confidential
information.
(c) Executive
shall, upon expiration or termination of the Term, or earlier at the request
of
the Company, turn over to the Company or destroy all documents, papers, computer
disks or other material in Executive’s possession or under Executive’s control
which may contain or be derived from confidential information. To the extent
that any confidential information is on Executive’s hard drive or other storage
media, he shall, upon the request of the Company, cause either such information
to be erased from his computer disks and all other storage media or otherwise
take reasonable steps to maintain the confidential nature of the
material.
(d) Executive
further realizes that any trading in Company’s common stock or other securities
or aiding or assisting others in trading in Company’s common stock or other
securities, including disclosing any non-public information concerning Company
or its affiliates to a person who uses such information in trading in the
Company’s common stock or other securities, may constitute a violation of
federal and state securities laws. Executive will not engage in any transactions
involving the Company’s common stock or other securities while in the possession
of material non-public information in a manner that would constitute a violation
of federal and state securities laws.
-3-
(e) For
the
purposes of Sections 6, 7 and 8 of this Agreement, the term “Company” shall
include the Company, and any subsidiaries and affiliates.
7. Covenant
Not To Solicit or Compete.
(a) During
the period from the date of this Agreement until one year following the date
on
which Executive’s employment is terminated, Executive will not, directly or
indirectly:
(i)
persuade or attempt to persuade any person which is or was a customer, client
or
supplier of the Company to cease doing business with the Company, or to
reduce
the amount of business it does with the Company (the terms “customer” and
“client” as used in this Section 7 to include any potential customer or
client to whom the Company submitted bids or proposals, or with whom the Company
conducted negotiations, during the term of Executive’s employment or consulting
relationship hereunder or during the twelve (12) months preceding the
termination of his employment or consulting relationship, as the case may
be);
(ii)
solicit for himself or any other person other than the Company the business
of
any person which is a customer or client of the Company, or was a customer
or
client of the Company within one (1) year prior to the termination of his
employment or consulting relationship;
(iii)
persuade or attempt to persuade any employee of the Company, or any individual
who was an employee of the Company during the one (1) year period prior to
the
lawful and proper termination of this Agreement, to leave the Company’s employ,
or to become employed by any person in any business in the PRC or HK whether
as
an officer, director, consultant, partner, guarantor, principal, agent,
employee, advisor or in any manner, which directly competes with the business
of
the Company as it is engaged in at the time of the termination of this
Agreement, unless, at the time of such termination or thereafter during the
period that the Executive is bound by the provisions of this Section 7, the
Company ceases to be engaged in such activity, provided, however, that nothing
in this Section 7 shall be construed to prohibit the Executive from owning
an interest of not more than five (5%) percent of any public company engaged
in
such activities.
(b) Executive
will not, during or after the Probation Term or the Term, make any disparaging
statements concerning the Company, its business, officers, directors and
employees that could injure, impair, damage or otherwise affect the relationship
between the Company, on the one hand, and any of the Company’s employees,
suppliers, customers, clients or any other person with which the Company has
or
may conduct business or otherwise have a business relationship of any kind
and
description; provided, however, that this sentence shall not be construed to
prohibit either from giving factual information required to be given pursuant
to
legal process, subject to the provisions of Section 6(b) of this Agreement.
The
Company will not make any disparaging statements concerning Executive. This
Section 7(b) shall not be construed to prohibit the either party from giving
factual information concerning the other party in response to inquiries that
such party believes are bona fide.
(c) The
Executive acknowledges that the restrictive covenants (the “Restrictive
Covenants”) contained in Sections 6 and 7 of this Agreement are a condition
of his employment and are reasonable and valid in geographical and temporal
scope and in all other respects. If any court determines that any of the
Restrictive Covenants, or any part of any of the Restrictive Covenants, is
invalid or unenforceable, the remainder of the Restrictive Covenants and parts
thereof shall not thereby be affected and shall remain in full force and effect,
without regard to the invalid portion. If any court determines that any of
the
Restrictive Covenants, or any part thereof, is invalid or unenforceable because
of the geographic or temporal scope of such provision, such court shall have
the
power to reduce the geographic or temporal scope of such provision, as the
case
may be, and, in its reduced form, such provision shall then be
enforceable.
-4-
(d) Nothing
in this Section 7 shall be construed to prohibit Executive from owning a
passive, non-management interest of less than 5% in any public company that
is
engaged in activities prohibited by this Section 7.
8. Injunctive
Relief.
Executive agrees that his violation or threatened violation of any of the
provisions of Sections 6 or 7 of this Agreement shall cause immediate and
irreparable harm to the Company. In the event of any breach or threatened breach
of any of said provisions, Executive consents to the entry of preliminary and
permanent injunctions by a court of competent jurisdiction prohibiting Executive
from any violation or threatened violation of such provisions and compelling
Executive to comply with such provisions. This Section 8 shall not affect
or limit, and the injunctive relief provided in this Section 8 shall be in
addition to, any other remedies available to the Company at law or in equity
or
in arbitration for any such violation by Executive. The provisions of Sections
6, 7 and 8 of this Agreement shall survive any termination of this Agreement
and
Executive’s employment and consulting relationship pursuant to this
Agreement.
9. Indemnification.
The
Company shall provide Executive with indemnification to the maximum extent
permitted by the Company’s certificate of incorporation, by-laws and applicable
law.
10. Representations
by the Executive.
Executive represents, warrants, covenants and agrees that he has a right to
enter into this Agreement, that he is not a party to any agreement or
understanding, oral or written, which would prohibit performance of his
obligations under this Agreement, and that he will not use in the performance
of
his obligations hereunder any proprietary information of any other party which
he is legally prohibited from using.
11. Miscellaneous.
(a) Any
notice, consent or communication required under the provisions of this Agreement
shall be given in writing and sent or delivered by hand, overnight courier
or
messenger service, against a signed receipt or acknowledgment of receipt, or
by
registered or certified mail, return receipt requested, or telecopier or similar
means of communication if receipt is acknowledged or if transmission is
confirmed by mail as provided in this Section 11(b), to the parties at
their respective addresses set forth at the beginning of this Agreement, with
notice to the Company being sent to the attention of the individual who executed
this Agreement on its behalf. Any party may, by like notice, change the person,
address or telecopier number to which notice is to be sent.
(b) Any
dispute or difference arising out of or in connection with this Agreement must
be referred to and determined by arbitration by one arbitrator at the Hong
Kong
International Arbitration Centre.
(c) If
any
term, covenant or condition of this Agreement or the application thereof to
any
party or circumstance shall, to any extent, be determined to be invalid or
unenforceable, the remainder of this Agreement, or the application of such
term,
covenant or condition to parties or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
term, covenant or condition of this Agreement shall be valid and be enforced
to
the fullest extent permitted by law, and any court or arbitrator having
jurisdiction may reduce the scope of any provision of this Agreement, including
the geographic and temporal restrictions set forth in Section 7 of this
Agreement, so that it complies with applicable law.
-5-
(d) This
Agreement constitutes the entire agreement of the Company and Executive as
to
the subject matter hereof, superseding all prior or contemporaneous written
or
oral understandings or agreements, including any and all previous employment
agreements or understandings, all of which are hereby terminated, with respect
to the subject matter covered in this Agreement. This Agreement may not be
modified or amended, nor may any right be waived, except by a writing which
expressly refers to this Agreement, states that it is intended to be a
modification, amendment or waiver and is signed by both parties in the case
of a
modification or amendment or by the party granting the waiver. No course of
conduct or dealing between the parties and no custom or trade usage shall be
relied upon to vary the terms of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on any occasion
shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.
(e) No
party
shall have the right to assign or transfer any of its or his rights hereunder
except that the Company’s rights and obligations may be assigned in connection
with a merger of consolidation of the Company or a sale by the Company of all
or
substantially all of its business and assets.
(f) This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors, executors, administrators and permitted
assigns.
(g) The
headings in this Agreement are for convenience of reference only and shall
not
affect in any way the construction or interpretation of this
Agreement.
(h) This
Agreement may be executed in counterparts, each of which when so executed and
delivered will be an original document, but both of which counterparts will
together constitute one and the same instrument.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above
written.
| CHINA DISPLAY TECHNOLOGIES, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxxx Xxxx-Xxx Xxxx | |
|
Xxxxxxxx Xxxx-Xxx Xxxx, Chief Executive Officer |
||
| /s/ Xxx Xxx Xxxx | ||
|
Xxx Xxx Xxxx |
||
-6-
