EMPLOYMENT AGREEMENT
This
Employment Agreement (the “Agreement”) is made as of the 9th day of January,
2008, by and between, China Clean Energy Inc., a company organized under the
laws of the State of Delaware (the “Company”), and Riwen Xue (the “Executive”).
In
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive, intending to be legally bound, hereby
agree as follows:
1. Employment
and Duties.
The
Company hereby agrees to employ Executive as the Chief Operating Officer of
the
Company (the “COO”), and Executive hereby accepts such employment, on the terms
and conditions hereinafter set forth. During the Term (as defined below),
Executive shall serve as COO and shall report to the Board of Directors of
the
Company (the “Board”). Executive shall have those powers and duties customarily
associated with the position of COO of entities comparable to the Company and
such other powers and duties as may be prescribed by the Board. Executive shall
devote all of his working time, attention and energies to the performance of
his
duties for the Company.
2. Term.
The
term of Executive’s employment hereunder, unless sooner terminated as provided
herein (the “Initial Term”), shall be for a period of two (2) years commencing
on the date hereof (the “Commencement Date”). The term of this Agreement shall
automatically be extended for additional terms of one (1) year each (each a
“Renewal Term”), unless either party gives prior written notice of non-renewal
to the other party no later than ninety (90) days prior to the expiration of
the
Initial Term (“Non-Renewal Notice”), or the then current Renewal Term, as the
case may be. For purposes of this Agreement, the Initial Term and any Renewal
Term are hereinafter collectively referred to as the “Term.”
3. Compensation,
Benefits and Equity Awards.
(a) Base
Salary.
During
the Term, Executive shall receive a base salary of RMB 12,000 per month payable
on a monthly basis, which amount may be increased no less than 10% at the
discretion of the Board following the one year anniversary of the date hereof.
Should Executive remain employed by the Company after two years, his base salary
will be subject to good faith negotiations with the Board. Executive’s base
salary shall be paid in accordance with the Company’s regular payroll practices,
including all usual and customary federal, state, and local tax withholdings.
(b) Expenses.
The
Company shall reimburse Executive for all reasonable business expenses upon
the
presentation of itemized statements of such expenses in accordance with Company
policies and procedures as may be in effect from time to time.
(c) Vacation.
During
the Term, Executive shall be entitled to at least three (3) weeks of paid
vacation per calendar year to be used and accrued in accordance with the
Company’s policies as may be in effect from time to time. In addition to
vacation, Executive shall be entitled to the number of sick days, personal
days
and national holidays per year as to which other Executives of the Company
may
be entitled.
(d) Other
Benefit Plans.
During
the Term, Executive shall be entitled to participate in such employee benefit
plans and insurance programs offered by the Company, or which may be in effect
from time to time, in accordance with any eligibility requirements for
participation therein.
(e) Equity
Awards.
Executive
will receive the following equity awards:
(i) Stock
Options.
The
Company shall grant Executive options to purchase an aggregate of 100,000 shares
of common stock (“Options”), pursuant to the Company’s 2008 Equity Incentive
Plan (the “Incentive Plan”). Such grant shall be evidenced by an Option
Agreement, as contemplated by the Incentive Plan. The per share exercise price
of the Options shall be $2.50 and $3.00 respectively as defined in the Option
Agreement. The term of the Option shall be three years from the Commencement
Date. One-twelfth (1/12) of the Options shall become exercisable each quarter
that Executive remains employed by the Company.
(ii) Future
Grants.
Executive shall be eligible for grants of Options, Restricted Stock and other
permissible awards under the Incentive Plan, as the Board or Compensation
Committee of the Company shall, in its absolute and sole discretion,
determine.
4. Termination.
Executive’s employment by the Company shall terminate under the following
circumstances:
(a) Death.
If
Executive dies, Executive’s employment shall be terminated effective as of the
end of the calendar month during which Executive died.
(b) Disability.
In the
event Executive, by reason of physical or mental incapacity, shall be
substantially unable to perform his duties hereunder for a period of three
(3)
consecutive months, or for a cumulative period of six (6) months within any
12
month period (such incapacity deemed to be “Disability”), the Company shall have
an option, at any time thereafter, to terminate Executive’s employment hereunder
as a result of such Disability. Such termination will be effective ten (10)
days
after the Board gives written notice of such termination to Executive, unless
Executive shall have returned to the full performance of his duties prior to
the
effective date of the notice. Upon such termination, Executive shall be entitled
to any benefits as to which he and his dependents are entitled by law, and
except as otherwise expressly provided herein, all obligations of the Company
hereunder shall cease upon the effectiveness of such termination other than
payment of salary earned through the date of Disability, provided that such
termination shall not affect or impair any rights Executive may have under
any
policy of long term disability insurance or benefits then maintained on his
behalf by the Company. Executive’s base salary shall continue to be paid during
any period of incapacity prior to and including the date on which Executive’s
employment is terminated for Disability.
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(c) Cause.
The
Company shall have the right to terminate Executive's employment for “Cause.”
For purposes of this Agreement, “Cause” shall mean:
(i) the
willful or continued failure by Executive to substantially perform his duties,
including, but not limited to, acts of fraud, willful misconduct, gross
negligence or other act of dishonesty;
(ii) a
material violation or material breach of this Agreement which is not cured
within 10 days written notice to Executive;
(iii) misappropriation
of funds, properties or assets of the Company by Executive or any action which
has a materially adverse effect on the Company or its business;
(iv) the
conviction of, or plea of guilty or no contest to, a felony or any other crime
involving moral turpitude, fraud, theft, embezzlement or dishonesty; or
(v) abuse
of
drugs or alcohol which impairs the Executive’s ability to perform his duties as
COO.
(d) Good
Reason.
Executive may terminate his employment for “Good Reason.” For purposes of this
Agreement, “Good Reason” shall mean: (i) a material diminution of Executive’s
authority or duties with the Company (other than as a result of Executive’s
incapacity or disability); or (ii) a greater than 10% reduction in Executive’s
base salary. Prior to the Executive terminating his employment with the Company
for “Good Reason,” Executive must provide written notice to the Company that
such “Good Reason” exists and setting forth, in detail, the grounds Executive
believes constitutes such “Good Reason.” If the Company does not cure the
grounds upon which Executive believes “Good Reason” exists within thirty (30)
days after being provided with notice by the Executive, then Executive’s
employment shall be deemed terminated.
(e) Without
Cause.
The
Company shall have the right to terminate Executive’s employment hereunder
without cause at any time by providing Executive with written notice of such
termination, which termination shall take effect 10 days after the date such
notice is provided.
(f) Voluntary
Resignation.
Executive shall have the right to terminate his employment hereunder by
providing the Company with a written notice of resignation. Such notice must
be
provided 60 days prior to the date upon which Executive wishes such resignation
to be effective. Upon receipt of such resignation, the Company shall have the
option to accelerate the resignation to a date prior to the expiration of the
60
day period.
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5. Payments
Due Upon Termination.
In the
event Executive’s employment is terminated pursuant to Section 5(d) or (e)
above, then any unvested Options held by Executive shall immediately vest and
the Company shall continue pay to Executive his base salary as in effect on
the
date of termination for a period of twelve (12) months and reimburse Executive
for the costs of obtaining comparable medical benefits for twelve (12) months,
unless the Executive obtains other employment which provides for comparable
medical benefits as Executive received while employed by the Company. In the
event Executive’s employment is terminated for any other reason, then Executive
shall be entitled to receive his base salary though the effective date of
termination and the Company shall reimburse Executive for any reasonable
expenses previously incurred for which Executive had not been reimbursed prior
to the termination of employment. Executive acknowledges and agrees that prior
to receiving any payments under this Section, and as a material condition
thereof, Executive shall, if requested by the Company, sign and agree to be
bound by a general release of claims against the Company related to Executive’s
employment (and termination of employment) with the Company in such form as
the
Company may deem appropriate. Upon Executive’s termination of employment for any
reason, upon the request of the Board, he shall resign any memberships or
positions that he then holds with the Company.
6. Executive’s
Representations.
Executive hereby represents and warrants to the Company that: (i) his execution
and performance of duties under this Agreement does not and shall not conflict
with, breach, violate or cause a default under any contract, agreement,
arrangement, understanding, order, judgment or decree as to which Executive
is a
party or by which he is bound; (ii) Executive is not a party to or bound by
any
employment agreement, non-compete agreement, confidentiality agreement or any
similar agreement or arrangement with any other person or entity which effects
or impacts his ability to be employed by the Company pursuant to the terms
of
this Agreement; and (iii) upon the execution and delivery of this Agreement
by
the Company, this Agreement shall constitute a valid and binding obligation
of
Executive, enforceable in accordance with its terms. In addition, Executive
acknowledges that the Company has relied on such representations and warranties
in employing Executive, that he has not entered into, and will not enter into,
any agreement, either oral or written, in conflict with this Agreement. If
it is
determined that Executive is in breach or has breached any of the
representations set forth herein, the Company shall have the right to
immediately terminate the Executive’s employment with the company and that such
termination shall be deemed a termination with Cause. Executive hereby
acknowledges and represents that he has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and that he fully
understands the terms and conditions contained herein.
7. Successors.
The
rights and benefits of Executive hereunder shall not be assignable, whether
by
voluntary or involuntary assignment or transfer by Executive. This Agreement
shall be binding upon, and inure to the benefit of, the successors and assigns
of the Company, and the heirs, executors and administrators of the Executive,
and shall be assignable by the Company to any entity acquiring substantially
all
of the assets of the Company, whether by merger, consolidation, sale of assets
or similar transactions.
8. 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 delivered (i)
personally, (ii) by first class mail, certified, return receipt requested,
postage prepaid, (iii) by overnight courier, with acknowledged receipt, or
(iv)
by facsimile transmission followed by delivery by first class mail or by
overnight courier, in the manner provided for in this Section, and properly
addressed as follows:
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If
to the Company, to: China Clean Energy Inc. Fulong Industrial Park,
Longtian, Fuqing City, Fujian Province, People’s Republic of
China
|
|
If
to Executive to: Room501ô
No
00 Xxxxxxxxxxx Xxxxx
Rongcheng Town,
Fuqing City, Fujian Province, People’s Republic of
China
|
or
to
such other address as the Company or Executive may later indicate in
writing.
9. Governing
Law and Dispute Resolution.
This
Agreement is governed by, and is to be construed and enforced in accordance
with, the laws of the State of Delaware, without regard to principles of
conflicts of laws. If, under such law, any portion of this Agreement is at
any
time deemed to be in conflict with any applicable statute, rule, regulation
or
ordinance, such portion shall be deemed to be modified or altered to conform
thereto or, if that is not possible, to be omitted from this Agreement, and
the
invalidity of any such portion shall not affect the force, effect and validity
of the remaining portion hereof.
10. Amendment.
No
provisions of this Agreement may be amended, modified, or waived unless such
amendment or modification is agreed to in writing signed by Executive and by
a
duly authorized officer of the Company. No waiver by either party hereto at
any
time of any breach by the other party hereto of any condition or provision
of
this Agreement to be performed by such other party shall be deemed a waiver
of
similar or dissimilar provisions or conditions at the same or at any prior
or
subsequent time.
11. Entire
Agreement.
This
Agreement sets forth the entire agreement of the parties hereto in respect
of
the subject matter contained herein and supersedes any and all prior agreements,
promises, covenants, arrangements, understandings, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto. Any prior agreement by the parties hereto
with respect to the subject matter of this Agreement is hereby terminated and
canceled as of the date hereof.
12. Severability.
The
covenants of this Agreement shall be construed as covenants independent of
one
another and as obligations distinct from any other agreement between the
parties. Should any provision herein be held to be void or unenforceable, the
remaining provisions shall remain in full force and effect, to be read and
construed as if the void or unenforceable provisions were originally
deleted.
13. Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original but all of which together will constitute one and the same
instrument.
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IN
WITNESS HEREOF,
the
parties hereby enter into this Agreement and affix their signatures as of the
date first above written.
| CHINA CLEAN ENERGY INC. | ||||
| By: | /s/ Taiming Ou | |||
|
Name:
Taiming Ou
Title:
Chief Executive Officer
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| /s/ Riwen Xue | ||||
|
Riwen Xue
Chief Operating Officer
|
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