Employment Agreement
AMENDED AND
RESTATED
This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is
voluntarily entered into on December 29, 2008 by and between Perfectenergy
International Limited, a Nevada corporation (the “Corporation”), and
Xx. Xxxxxx Xxxx Xxx (Xxxxxx Xxxxxx), an individual residing at Xxxx 0000, Xx. 0, Xxxx 0000,
Xxxxxxxxx Xxxx, Xxxxxxxx (the “Executive”), under
the terms and conditions outlined below and replaces in its entirety the
Employment Agreement dated February 1, 2008 previously executed by
the parties.
RECITALS:
WHEREAS,
the Corporation desires to employ the Executive in the capacity hereinafter
stated, and the Executive desires to enter into the employ of the Corporation in
such capacity for the period and on the terms and conditions set forth
herein;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below, it is hereby covenanted and agreed by the Corporation and the Executive
as follows:
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1.
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Capitalized
Terms. All capitalized terms used herein have the
meaning as set forth in this
Agreement.
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2.
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Employment
Period. The Corporation hereby agrees to employ the
Executive in its Shanghai Office as the Chief Financial Officer
(“CFO”). The Executive, in such capacities, agrees to provide
services to the Corporation for the period beginning on Feb 1, 2008
(“the Commencement
Date”). The Employment Period under this Agreement shall
be 3 year commencing from the Commencement Date. The Employment
Period may be renewed by the mutual agreement of the Executive and the
Corporation one (1) month before this Agreement expires, subject to the
Corporation’s business needs and the Executive’s performance and
competencies (as determined by the
Corporation).
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3.
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Performance of Duties
and Work Location. The Executive agrees that during the
employment period, while he is employed by the Corporation, he shall
devote his full time, energies and talents exclusively to serving in the
capacities of CFO in the best interests of the Corporation, and to perform
the duties assigned to him faithfully, efficiently and in a professional
manner (see Appendix I for detail). The Executive will be based
in Shanghai. The Executive agrees not
to:
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(a)
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serve
as or be a consultant to or employee, officer, agent or director of any
corporation, partnership or other entity other than the Corporation (other
than civic, charitable, or other public service organizations);
or
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(b)
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have
more than a five percent (5%) ownership interest in any enterprise if such
ownership interest would have a material adverse effect upon the ability
of the Executive to perform his duties hereunder; provided, however, the
Executive shall (i) disclose to the Board of Directors of the Corporation
(the “Board”) any 5% ownership interest in any enterprise, (ii) disclose
any financial relationship or ownership (regardless of such percentage),
with any supplier, customer or partner of the Corporation or any of its
affiliates, and (iii) not cause a conflict of interest between the
Corporation or any of its affiliates on the one hand and any supplier,
customer or partner of the Corporation or any of its affiliates on the
other hand.
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4.
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Compensation. Subject
to the terms and conditions of this Agreement, during the employment
period, while he is employed by the Corporation, the Executive shall be
compensated by the Corporation for his services as
follows:
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(a)
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Beginning
on the Commencement Date, the Executive’s base salary (“Base Salary”)
shall be RMB 50,000 per month, payable at the end of each month, and
subject to normal tax and other statutory withholdings in
China. During the employment period, the Executive’s Base
Salary rate shall be reviewed on or before each anniversary of the
Commencement Date to determine whether an increase in the Executive’s rate
of compensation is appropriate;
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(b)
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An
additional month’s salary payable at every Chinese New Year (for 2008,
such 13th
month salary shall be multiplied by a percentage equal to the number of
months employed before Chinese New Year divided by 12 months), subject to
normal tax and other statutory withholdings in
China;
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(c)
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The
Executive shall be entitled to participate in the Corporation’s 2007 Stock
Option Plan, the ultimate holding company of the Corporation pursuant to
the terms and conditions set forth therein and the discretion of the Board
of Directors. The Executive shall be granted a total of 500,000
stock options of PFEN’s common stock. The strike price for such
stock options shall be priced at US$1.02. Such share options
shall vest as follows: One third (1/3) at each year ending in 3 years
after the Commencement Date. Such options shall also be subject
to such other requirements set forth in a Stock Option Agreement to be
entered into by and between the Corporation and the
Executive;
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(d)
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In
addition to public holidays in China, the Executive shall be entitled to
receive 20 days of paid vacation per year beginning after the completion
of the Probation Period;
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(e)
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The
Corporation shall be responsible for the Executive’s social insurance
benefits including health and medical insurance and pension and mandatory
housing fund in accordance with Chinese employment laws. The Executive
shall enter into a supplementary agreement with China Star Corp that shall
provide such benefits and other services for the
Executive.
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(f)
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The
Executive shall be reimbursed by the Corporation for all reasonable
business, promotional, cell phone service, travel and entertainment
expenses incurred or paid by the Executive during the Employment Period in
the performance of his services under this Agreement: (i) provided that
such expenses constitute business deductions from taxable income for the
Corporation and are excludable from taxable income to the Executive under
the governing laws and regulations; and (ii) to the extent that such
expenses do not exceed the amounts allocable for such expenses in budgets
that are approved from time to time by the Corporation and are not in
violation of the Corporation’s travel and living expense reimbursement
policies. In order that the Corporation reimburse the Executive
for such allowable expenses, the Executive shall furnish to the
Corporation, in a timely fashion, the appropriate documentation in
connection with such expenses and shall furnish such other documentation
and accounting as the Corporation may from time to time reasonably
request;
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(g)
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Any
overtime working activities are already compensated within the
compensation package provided to the Executive under this
Agreement.
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5.
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Restrictive
Covenants. The Executive acknowledges and agrees that:
(i) the Executive has a major responsibility for the operation,
development and growth of the Corporation’s business; (ii) the Executive’s
work for the Corporation has brought him and will continue to bring him
into close contact with confidential information of the Corporation, its
affiliates and its customers; and (iii) the agreements and covenants
contained in this paragraph 5 are essential to protect the business
interests of the Corporation and its affiliates and that the Corporation
will not enter into this Agreement but for such agreements and
covenants. Accordingly, the Executive covenants and agrees to
the following:
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(a)
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Confidential
Information. Except as may be required by the lawful
order of a court or agency of competent jurisdiction, the Executive agrees
to keep secret and confidential, both during the Employment Period and for
two (2) years after the Executive’s employment with the Corporation
terminates, all non-public information concerning the Corporation and its
affiliates that was acquired by, or disclosed to, the Executive
during the course of his employment by the Corporation or any of its
subsidiaries or affiliates, including information relating to customers
(including, without limitation, credit history, repayment history,
financial information and financial statements), costs, and
operations, financial data and plans, whether past, current or planned and
not to disclose the same, either directly or indirectly, to any other
person, firm or business entity, or to use it in any way; provided, however,
that the provisions of this paragraph 5(a) shall not apply to information
that: (a) was, is now, or becomes generally available to the public (but
not as a result of a breach of any duty of confidentiality by which the
Executive is bound); (b) was disclosed to the Executive by a third party
not subject to any duty of confidentiality to the Corporation prior to its
disclosure to the Executive; or (c) is disclosed by the Executive in the
ordinary course of the Corporation’s business as a proper part of his
employment in connection with communications with customers, vendors and
other proper parties, provided that it is for a proper purpose solely for
the benefit of the Corporation. The Executive further agrees
that he shall not make any statement or disclosure that (i) would be
prohibited by applicable State or local laws and regulations, or (ii) is
intended or reasonably likely to be detrimental to the Corporation or any
of its affiliates.
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(b)
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Non-Competition. The
Executive agrees that for the period commencing on the Commencement Date
and ending twenty four (24) months after this Agreement expires, the
Executive is terminated for any reason or voluntarily resigns (the “Non-Competition
Period”), the Executive, unless the Corporation and all of its
affiliates cease business in China, shall not directly or indirectly,
alone or as a partner, officer, director, employee, consultant, agent,
independent contractor, member or stockholder of any person or entity
(“Person”), engage in any business activity in which is directly or
indirectly in competition with the Business of the Corporation or its
affiliates, or which is directly or indirectly detrimental to the Business
or business plans of the Corporation or its affiliates. The
“Business” of
the Corporation shall mean the actual or intended business of the
Corporation during the Employment Period and as of the date the Executive
leaves the employment of the Corporation. As of the date
hereof, the Business of the Corporation is to provide coal gasification
technology, coal gasification plant development, operations and
maintenance based on coal gasification technology. The
Executive further agrees that during the Non-Competition Period, he shall
not in any capacity, either separately or in association with others: (i)
employ or solicit for employment or endeavor in any way to entice away
from employment with the Corporation or its affiliates any employee of the
Corporation or its affiliates; (ii) solicit, induce or influence any
supplier, customer, agent, consultant or other person or entity that has a
business relationship with the Corporation or its affiliates to
discontinue, reduce or modify such relationship with the Corporation or
its affiliates; nor (iii) solicit any of the Corporation’s or its
affiliate’s identified potential acquisition
candidates.
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(c)
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Remedies. If
the Executive breaches, or threatens to commit a breach of any of the
provisions contained in paragraphs 5(a) or 5(b) (the “Restrictive
Covenants”), the Corporation shall have the following rights and
remedies, each of which shall be enforceable, and each of which is in
addition to, and not in lieu of, any other rights and remedies available
to the Corporation at law or in
equity:
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(i)
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The
Executive shall account for and pay over to the Corporation all
compensation, profits, and other benefits which inure to the Executive’s
benefit which are derived or received by the Executive or any person or
business entity controlled by the Executive, or his relatives, resulting
from any action or transactions constituting a breach of any of the
Restrictive Covenants.
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(ii)
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Notwithstanding
the provisions of paragraph 5(c)(i) above, the Executive acknowledges and
agrees that in the event of a violation or threatened violation of any of
the Restrictive Covenants, the Corporation shall be entitled to enforce
each such provision by any available mandatory relief obtained in any
court of competent jurisdiction without prejudice to any other rights and
remedies that may be available at law or in equity, and the Corporation
shall also be entitled to recover its attorneys’ fees and costs incurred
to enforce any of the Restrictive Covenants from the Executive if the
Corporation prevails in such enforcement
action.
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(d)
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Severability. If
any of the Restrictive Covenants, or any part thereof, are held to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard to
the invalid or unenforceable portions. Without limiting the
generality of the foregoing, if any of the Restrictive Covenants, or any
part thereof, are held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties hereto agree that the
court making such determination shall have the power to reduce the
duration and/or area of such provision and, in its reduced form, such
provision shall then be
enforceable.
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(e)
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Proprietary
Rights. The Executive acknowledges and agrees that all
know-how, documents, reports, plans, proposals, marketing and sales plans,
client lists, client files, and any materials made by the Executive or by
the Corporation or its affiliates are the property of the Corporation and
shall not be used by the Executive in any way adverse to the Corporation’s
interests. The Executive shall not deliver, reproduce or in any
way allow such documents or things to be delivered or used by any third
party without specific direction or consent of the Board. The
Executive hereby assigns to the Corporation any rights which he may have
in any such trade secret or proprietary
information.
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6.
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Termination and
Compensation Due Upon Termination. The Executive’s right
to compensation for periods after the date the Executive’s employment with
the Corporation terminates shall be determined in accordance with the
following:
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(a)
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Voluntary
Resignation. The Executive may terminate his employment
with the Corporation for any reason (or no reason at all) at any time by
giving the Corporation thirty (30)1 days prior written notice of
voluntary resignation; provided, however, the Corporation may decide that
the Executive’s voluntary resignation be effective immediately upon notice
of such resignation. The Corporation shall have no
obligation to make payments to the Executive in accordance with
the provisions of paragraph 4 for periods after the date on which the
Executive’s employment with the Corporation terminates due to the
Executive’s voluntary
resignation.
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(b)
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Termination with Prior
Notice. The Corporation may terminate the Executive with
30 days’ prior notice (or payment in lieu of notice) based on one of the
following grounds:
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(i)
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the
Executive is suffering non-work related illness and is unable to perform
his duties after the medical treatment
period;
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(ii)
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the
Executive is not able or not competent, as determined by the Corporation,
to perform his duties even after training (including on-the-job
training);
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(iii)
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there
is a major change of circumstances which were relied on as the basis to
enter into this Agreement, including merger, division or acquisition of
the Corporation; or
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(iv)
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the
Corporation is undergoing a statutory reorganization or sustaining major
financial difficulties.
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Upon
termination based on any of the above grounds, the Corporation shall pay the
Executive compensation at the rate of one month of the current Base Salary for
each year of services with the Corporation.
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(c)
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Termination for
Cause. The Executive may only be terminated for cause,
without prior notice, by the agreement of the President &
CEO. The Corporation shall have no obligation to make
payments to the Executive in accordance with the provisions of paragraph 4
or otherwise for periods after the Executive’s employment with the
Corporation is terminated on account of the Executive’s discharge for
cause. For purposes of this Agreement, the Executive shall
be considered terminated for “cause” if he is
discharged by the Corporation on account of the occurrence of one or more
of the following events:
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(i)
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the
Executive becomes habitually addicted to drugs or
alcohol;
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(ii)
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the
Executive discloses confidential information in violation of paragraph
5(a) and such disclosure has a material adverse effect on the Corporation,
or engages in competition in violation of paragraph
5(b);
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(iii)
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the
Corporation is directed by regulatory or governmental authorities to
terminate the employment of the Executive or the Executive engages in
activities that cause actions to be taken by regulatory or
governmental authorities that have a material adverse effect on the
Corporation;
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(iv)
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the
Executive is indicted of a felony crime (other than a felony resulting
from a minor traffic
violation);
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(v)
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the
Executive commits an act of fraud against the Corporation, violates a duty
of loyalty to the Corporation, or acts against the interest of the
Corporation, or
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(vi)
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any
other causes as prescribed under the governing laws and
regulations.
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(d)
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Disability. Disability
of the Executive shall be dealt with in accordance with the Corporation’s
long term disability plan (if any) and the applicable
law.
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(e)
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Death. The
Corporation shall have no obligation to make payments to the
Executive in accordance with the provisions of paragraph 4 for
periods after the date of the Executive’s death, except payments due
and owing as of such date.
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(f)
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Stock
Options. In the event of termination of this Agreement
(regardless of reason), and notwithstanding anything contained herein, the
Executive must exercise all vested stock options issued to the Executive
pursuant to this Agreement within six (6) months after the effective
termination date of the
Agreement.
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(g)
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Probation
Period. The Executive shall be subject to a three (3)
month probation/trial period (the “Probation Period”), beginning on the
Commencement Date, during which time the Executive may be terminated
immediately by the Corporation, the Corporation shall have no
obligation to make payments to the Executive in accordance with
the provisions of paragraph 4 for periods after the date on which the
Executive’s employment with the Corporation terminates due to such
termination.
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7.
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Successors and
Assignment. This Agreement shall be binding on, and
inure to the benefit of the Corporation and its successors and assigns and
any person acquiring, whether by merger, consolidation, purchase of
all or substantially all of the Corporation’s assets and business, or
otherwise without further action by the Executive; provided however, that
Executive hereby agrees to execute an acknowledgement of assignment if
requested to do so by the successor, assign or acquiring
person. The Corporation may assign this agreement to any of its
direct and indirect subsidiaries or its
affiliates.
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8.
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Waiver of
Breach. The waiver by either the Corporation or the
Executive of a breach of any provision of this Agreement shall not operate
as, or be deemed a waiver of, any subsequent breach by either the
Corporation or the Executive.
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9.
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Notice. Any
notice to be given hereunder by a party hereto shall be in writing and
shall be deemed to have been given when received or, when deposited in the
mail, certified or registered mail, postage
prepaid:
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(a)
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to
the Executive addressed as follows:
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Xx.
Xxxxxx Xxxx Xxx, Xxxxxx
Adress:Room
1001, Xx. 0, Xxxx 0000 Xxxxxxxxx Xxxx, Xxxxxxxx
Cell :
00000000000
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(b)
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to
the Corporation addressed as
follows:
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No. 479
You Xxxx Xxxx, XxxXxxxxx
Xxxxxxxx
000000 Xxxxx
Tel:
x00-00-00000000
Fax:
x00-00-00000000
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10.
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Amendment. This
Agreement may be amended or canceled by mutual agreement of the parties in
writing without the consent of any other person and no person, other than
the parties hereto (and the Executive’s estate upon his death), shall have
any rights under or interest in this Agreement or the subject matter
hereof. The parties hereby agree that no oral conversations
shall be deemed to be a modification of this Agreement and neither party
shall assert the same.
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11.
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Applicable
Law. The provisions of this Agreement shall be construed
in accordance with the laws of the People’s Republic of
China.
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12.
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Dispute
Resolution. Any dispute arising
from or in connection with this Agreement which cannot be resolved through
amicable consultations shall be submitted to the relevant local
arbitration commission for resolution. If any party is not satisfied with
the arbitration award, that party may file an action with a Chinese
court. However, for any disputes arising from or in connection
with the restrictive covenants as set out under Clause 5 of this
Agreement, such disputes shall be dealt with in accordance with Clause 5
(c) (ii).
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13.
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Termination. All of the
provisions of this Agreement shall terminate after the expiration of the
Employment Period.
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14.
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Miscellaneous:
This Agreement is made in two (2) copies duly initiated on each page by
the Parties and has been signed by the Executive and signed and sealed by
the Corporation on the date first set forth
above.
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* * *
Employment
Agreement
IN
WITNESS WHEREOF, the Executive and the Corporation have executed this Employment
Agreement as of the day and year first above written.
| Zhuang Xxxx Xxx, Xxxxxx | |
| /s/ Zhuang Xxxx Xxx | |
| Perfect Energy International Limited | |
| /s/ Wennan Li | |
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By:
Wennan Li (CEO)
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