EMPLOYMENT AGREEMENT
This
AGREEMENT (this “Agreement”) is made effective as of June 10, 2008 (the
“Effective Date”), by and between Genesis Pharmaceuticals Enterprises,
Inc., a Florida corporation (“Company” or “Employer”), and Xxxx Xxxx, an
individual resident of Florida (“Executive”).
WHEREAS,
the Employer and the Executive desire to enter into an agreement to reflect
the
Executive’s duties and responsibilities and to provide for the Executive’s
employment by the Employer upon the terms and conditions set forth herein;
and
WHEREAS,
the Executive has agreed to certain confidentiality, non-competition and
non-solicitation covenants contained herein, in consideration of the additional
benefits provided to the Executive under this Agreement;
NOW
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and intending to be legally bound, the Employer and the Executive agree as
follows:
1. Employment.
The Employer agrees to employ the Executive and the Executive agrees to be
employed by the Employer on the terms and conditions set forth in this
Agreement.
2. Capacity.
The Executive shall serve the Employer as its Chief Financial Officer. The
Executive shall also serve the Employer in such other or additional offices
as
the Executive may reasonably be requested to serve by the Board of Directors
of
the Employer (the “Board”). In such capacity or capacities, the Executive shall
perform such services and duties in connection with the business, affairs and
operations of the Employer, consistent with such positions, as may be assigned
or delegated to the Executive from time to time by or under the authority of
the
Board of Directors.
3. Term.
Subject to the provisions of Sections 4(j), 4(k), 6 and 7, the term of
employment pursuant to this Agreement (the “Term”) shall commence on the
Effective Date and terminate on the first anniversary of the Effective Date;
provided that the Term shall automatically be renewed for successive periods
of
one (1) year unless either party gives written notice to the other party, at
least sixty (60) days prior to the end date of the then-current Term, of that
party’s intent not to renew this Agreement.
4. Compensation
and Benefits. The compensation and benefits payable to the Executive during
the
Term shall be as follows:
(a) Salary.
For all
services rendered by the Executive under this Agreement, the Employer shall
pay
the Executive a salary (“Salary”) at the annual rate of one hundred twenty
thousand dollars ($120,000.00), subject to increases from time to time in
the sole discretion of the Board or the Compensation Committee of the Board
(the
“Compensation Committee”). Salary shall be payable in semi-monthly installments.
From time to time during the Term, Executive’s base salary may be increased at
the discretion of the Board or the Compensation Committee, but shall in no
event
be decreased from the amount of the base salary in effect at that
time.
(b) Performance
Bonus.
In
addition to Executive’s base salary, Executive shall be awarded $18,000 if the
Company is successfully listed or quoted on the
New
York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select
Market, the NASDAQ Global Market and the NASDAQ Capital Market. Executive
shall also be awarded $8,000 and $20,000 if the Company meets its 2008
Guaranteed EBT and its 2009 Guaranteed EBT, respectively, defined in the May
2008 Make Good Escrow Agreement. The Executive may be awarded additional
performance bonuses basis generally available to senior executives of the
Company on an annual, including any cash bonus plans and equity incentive plans
sponsored by the Company. The performance bonus, if any, shall be paid to the
Executive within 30 days after the Company’s performance goals are achieved.
(c) Equity
Award.
The
Executive shall be granted 300,000 options (or
as
equitably adjusted for any stock splits, stock combinations, stock dividends
or
similar transactions) vested
in
tranches on the dates and with the exercise prices as follows, provided
Executive remains employed with the Company and its subsidiaries on the
applicable vesting dates:
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Number of Shares
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Vesting Date
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Exercise Price per Share
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|||||
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80,000
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July 1, 2008
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$
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0.30
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||||
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70,000
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December
31, 2008
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$
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0.40
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||||
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75,000
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June
30, 2009
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$
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0.50
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||||
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75,000
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December
31, 2009
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$
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0.60
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||||
(d) Regular
Benefits.
The
Company shall provide for Executive health/medical insurance coverage acceptable
to Executive in the U.S. and P.R.C. at the Company’s expense during the Term.
The Company shall pay for and provide Executive with a term life insurance
policy in an amount of $150,000 at standard, non-smoking insurance premium
rates.
(e) Automobile
and Cell Phone.
The
Employer shall provide Executive with an automobile and cell phone allowance
of
$600 per month to compensate Executive for expenses related to the use of an
automobile and cell phone and reasonable business-related expenses associated
with such automobile and its maintenance and operation.
(f)
Expenses.
Executive is authorized to incur reasonable expenses in connection with the
business of Company, including reasonable expenses for business travel and
similar items, in accordance with Company’s business expense policy in effect
from time to time. The Company shall also reimburse Executive for expense
incurred for professional dues and subscriptions, continued professional
education to maintain Executives’ U.S. Certified Public Accountant license
status, all dues, fees and expenses associated with membership in various
professional, business and civic associations and societies of which Employee's
participation is in the best interest of Employer.
(g)
Vacation and sick days.
Executive shall be entitled to twenty paid vacations days and ten paid sick
or
personal days during each calendar year of the Term. Executive is not entitled
to payment for any unused vacation, sick or personal days as of the end of
any
calendar year.
(h)
Additional
Benefits.
During
the Term, the Company shall provide Executive use of a corporate apartment
in
Shandong Province, China, at the Company’s expense. The location and conditions
of the corporate apartment shall be up to Executive’s satisfaction. The Company
shall be responsible for providing transportation and any medical expenses
incurred by Executive in P.R.C.
(i)
Taxation
of Payment and Benefits.
The
Employer shall undertake to make deductions, withholdings and tax reports with
respect to payments and benefits under this Agreement to the extent that it
reasonably and in good faith believes that it is required to make such
deductions, withholdings and tax reports. Payments under this Agreement shall
be
in amounts net of any such deductions or withholdings. Nothing in this Agreement
shall be construed to require the Employer to make any payments to compensate
the Executive for any adverse tax effect associated with any payments or
benefits or for any deduction or withholding from any payment or
benefit.
(j)
Death
During Employment.
If
Executive dies during the Term, Company shall pay to the estate of Executive
(i)
any accrued and unpaid salary and (ii) any accrued and unpaid bonus (iii) all
vested options a pro rata amount of any bonus payable with respect to the fiscal
year of service in which death occurs (such pro rata amount determined by
multiplying the bonus that would have been paid for the full fiscal year had
Executive survived by a ratio, the numerator of which is the number of days
since the beginning of the fiscal year until the date of death and the
denominator of which is 365). Additionally, all unvested options shall be
transferred to estate of Executive and become immediately vested.
(k)
Permanent
Disability During Employment.
If
Executive becomes permanently disabled during the Term, Company shall pay to
Executive any accrued and unpaid base salary to which she would otherwise be
entitled to the end of the month in which such permanent disability occurs.
Thereafter, the Executive shall continue to receive her then base salary, minus
any payments provided by the Company’s benefit plans and by any government
sponsored program, for a six (6) month period from the date of permanent
disability. All granted and unvested options shall become immediately vested.
This Agreement shall thereupon terminate and Company shall have no further
obligation to Executive except as may be provided under Company’s long-term
disability plans during the term of such disability and any pro rata portion
of
any bonus or incentive plan. Permanent disability for purposes of this Agreement
shall mean a physical or mental condition of Executive that renders Executive
incapable of performing the essential duties of her job and which condition
shall be medically determined to be of permanent duration as same is construed
under Company’s disability plans.
5. Extent
of Service. During the Term, the Executive shall, subject to the direction
and
supervision of the Board, devote the Executive’s full business time, best
efforts and business judgment, skill and knowledge to the advancement of the
Employer’s interests and to the discharge of the Executive’s duties and
responsibilities under this Agreement, provided that nothing in this Agreement
shall be construed as preventing the Executive from (a) investing the
Executive’s assets in any company or other entity in a manner not prohibited by
Section 9(a) , or (b) engaging in religious, charitable or other community
or
non-profit activities that, in the case of (a) or (b) above, do not in any
way
impair the Executive’s ability to fulfill the Executive’s duties and
responsibilities under this Agreement.
6. Termination
for Cause. Company may terminate Executive’s employment at any time “for Cause.”
The term “for Cause” shall mean any act or failure to act on the part of the
Executive which constitutes: (i) an unauthorized use or disclosure by the
Executive of the Company’s Confidential Information ( as hereinafter defined) or
trade secrets, which use or disclosure causes material harm to the Company;
(ii)
a material breach by the Executive of any agreement between the employee and
the
Company; (iii) a material failure by the Executive to comply with the Company’s
written policies in compliance with the laws of the United States or any state
thereof; (iv) the Executive’s indictment of, or plea of “
guilty”
or
“
no
contest”
to,
a
felony under the laws of the United States or any state thereof or any foreign
jurisdiction in which the Company conducts business which if occurring in the
United States would constitute a felony under its laws or the laws of any state
thereof; (v) the Executive’s gross negligence or willful misconduct that results
in material harm to the Company; or (vi) a continual failure by the Executive
to
perform assigned duties after receiving written notification of such failure
from the Board. Company shall be entitled to terminate the employment
relationship hereunder upon thirty (30) days’ prior written notice to Executive,
which notice shall state the reason for such termination, and during such notice
period Executive shall be removed from her duties and responsibilities. In
the
event of a termination for cause, Company shall pay Executive any accrued and
unpaid salary and any accrued and unpaid bonus for any prior fiscal year, and
Company shall have no further obligation or liability to Executive under this
Agreement.
7. Termination
for Good Reason. If any of the following events occurs after the Effective
Date,
the Executive may resign from her employment for Good Reason by giving written
notice of resignation within 60 days following such event:
(a) a
material reduction in the scope of the Executive’s assigned duties and
responsibilities from those in effect under this Agreement on the Effective
Date
or the assignment of duties or responsibilities that are inconsistent with
the
Executive’s status in the Company;
(b) a
reduction by the Company in the Executive’s base salary;
(c) the
failure by the Company to continue to provide the Executive with benefits
substantially similar to those specified in Section 4 of this Agreement unless
the new owner of the Company or the Company deem it necessary to change such
benefits in order to conform to applicable law; or
(d) any
material breach of this Agreement by the Company.
Any
written notice of resignation for Good Reason shall describe in reasonable
detail the circumstances believed to constitute Good Reason. Notwithstanding
Executive’s provision of a notice of resignation for Good Reason, the Company
has a right to remedy or cure for a period of 30 days following its receipt
of
such notice the circumstances described by the Executive as constituting Good
Reason and Executive’s resignation shall become effective on the 31st day
following notice to the Company if the Company fails to remedy or cure the
circumstances constituting Good Reason within such 30-day period.
8. Severance
upon Termination Without Cause or for Good Reason. If, during the Term, Company
terminates Executive’s employment with the Company and its subsidiaries for any
reason other than for Cause or Executive’s death or disability, or Executive
terminates her employment for Good Reason (not including Company’s or
Executive’s non-renewal of the Term), the Executive shall be entitled to receive
(i) a lump sum cash payment in the amount of any accrued and unpaid salary
as of
her date of termination, (ii) a lump sum cash payment equal to any accrued
and
unpaid bonus for any prior fiscal year, (iii) a lump sum cash payment equal
to
the pro rata amount of any bonus payable with respect to the fiscal year in
which termination occurs (such pro rata amount determined by multiplying the
bonus that would have been paid for the full fiscal year had the Executive
continued to render service to the Company as of the last day of the fiscal
year
multiplied by a ratio, the numerator of which is the number of days since the
beginning of the fiscal year until the date of termination and the denominator
of which is 365), (iv) an amount equal to the sum of (a) 80% of her then current
annual base salary and (b) 50% of the average annual cash bonus payments paid
by
the Company to the Executive during the preceding two (2) fiscal years of the
Company, and such sum shall be payable in six (6) substantially equal monthly
payments; provided that each payment is intended to constitute a separate
payment within the meaning of Section 409A of the Internal Revenue Code of
1986,
as amended (“Code”). Further, the Company shall continue the medical and life
insurance benefits which Executive was receiving on the date of her termination,
with any related costs to be paid by Executive being no more than what Executive
had been paying prior to the date of termination, for a period of six (6) months
after the date of her termination; provided such continued coverage shall end
on
the date Executive has commenced employment elsewhere and becomes eligible
for
participation in a similar type of benefit program of her successor employer.
All options to purchase shares of common stock of the Employer issued to the
Executive in accordance with the Executive’s stock option agreement hereunder
shall become immediately vested. Except as provided in this Section 8, Executive
shall not be entitled to any other severance benefits from the Company or any
of
its subsidiaries or affiliates, and the Company shall have no other obligation
or liability to Executive under this Agreement.
9. Covenants
by Executive
(a) Non-competition.
During the Term under this Agreement including any renewals or extensions
thereof, Executive shall not, without the prior written approval of Company,
directly or indirectly, engage in any competitive activity as employer,
employee, partner, stockholder, joint venturer, consultant, director or
otherwise, enter into or in any manner take part in any business or other
endeavor which would be in competition with Company in the continental United
States and mainland China, and to the extent Executive has or has had direct
involvement in the Company’s business activities in any other jurisdiction, such
other jurisdictions as such business is conducted or, to the knowledge of
Executive, proposed to be conducted at the time of termination.
(b) Respect
for Economic Relationships. Executive will not, during the term of her
employment under this Agreement including any renewals or extensions thereof,
in
any fashion, form, or manner, either directly or indirectly, solicit, interfere
with, or otherwise be involved with any customer or person, firm or corporation
regularly dealing with Company or directly or indirectly interfere with, entice
away, or otherwise materially adversely affect its relationship with the Company
or to diminish its business with the Company, or to cause any other entity
to
employ any other employee of Company.
(c) Validity
of Covenants. Executive agrees that the covenants contained in this Section
are
reasonably necessary to protect the legitimate interests of Company, are
reasonable with respect to time, territory and scope, and do not interfere
with
the interests of the public. Executive further agrees that the descriptions
of
the covenants contained in this Section are sufficiently accurate and definite
to inform Executive of the scope of such covenants.
(d) Confidentiality.
The Executive understands and agrees that the Executive’s employment creates a
relationship of confidence and trust between the Executive and the Company
with
respect to all Confidential Information. At all times, both during the
Executive’s employment with the Employer and after its termination, the
Executive will keep in confidence and trust all such Confidential Information,
and will not use or disclose any such Confidential Information without the
prior
written consent of the Company, except as may be necessary in the ordinary
course of performing the Executive’s duties to the Company.
(e) Documents.
Records. etc. All documents, records, data, apparatus, equipment and other
physical property, whether or not pertaining to Confidential Information, which
are furnished to the Executive by the Employer or are produced by the Executive
in connection with the Executive’s employment will be and remain the sole
property of the Employer. The Executive will return to the Employer all such
materials and property as and when requested by the Employer. In any event,
the
Executive will return all such materials and property immediately upon
termination of the Executive’s employment for any reason. The Executive will not
retain with the Executive any such material or property or any copies thereof
after such termination.
(f) Litigation
and Regulatory Cooperation. During and after the Executive’s employment, the
Executive shall cooperate fully with the Employer in the defense or prosecution
of any claims or actions now in existence or which may be brought in the future
against or on behalf of the Employer which relate to events or occurrences
that
transpired while the Executive was employed by the Employer. The Executive’s
full cooperation in connection with such claims or actions shall include, but
not be limited to, being available to meet with counsel to prepare for discovery
or trial and to act as a witness on behalf of the Employer at
mutually-convenient times. During and after the Executive’s employment, the
Executive also shall cooperate fully with the Employer in connection with any
investigation or review of any federal, state or local regulatory authority
as
any such investigation or review relates to events or occurrences that
transpired while the Executive was employed by the Employer. The Employer shall
reimburse the Executive for any reasonable out-of-pocket expenses incurred
in
connection with the Executive’s performance of obligations. If the
Executive is entitled to reimbursement of expenses hereunder, the amount
reimbursable in any one calendar year shall not affect the amount reimbursable
in any other calendar year, and the reimbursement of an eligible expense must
be
made no later than December 31 of the year after the year in which the expense
was incurred. The Executive’s rights and obligations pursuant to this
Section 9(f) shall expire at the end of five (5) years after the Effective
Date
and shall not be subject to liquidation or exchange for another
benefit.
10. Confidential
Information. Executive agrees both during the Term and thereafter to keep secret
and confidential all information labeled confidential or not generally known
which is heretofore or hereafter acquired concerning the business and affairs
of
Company, including without limitation, information regarding trade secrets,
proprietary processes, confidential business plans, market research data,
financial data and trade secrets (collectively, “Confidential Information”), and
further agrees not to disclose any such information to any person, firm, or
corporation or use the same in any manner other than in furtherance of the
business or affairs of Company or unless such information shall become public
knowledge by other means. Executive agrees that such information is a valuable,
special, and unique asset of Company. Upon the termination of Executive’s
employment with Company, Executive shall immediately return to Company all
documents, records, notebooks, and similar repositories of information relating
to Confidential Information of Company and/or the development of any inventions.
The provisions of this Section 10 shall survive the termination of this
Agreement and Executive’s employment for any reason.
11. Integration.
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements between the
parties with respect to any related subject matter.
12. Enforceability.
If any portion or provision of this Agreement (including, without limitation,
any portion or provision of any section of this Agreement) shall to any extent
be declared illegal or unenforceable by a court of competent jurisdiction,
then
the remainder of this Agreement, or the application of such portion or provision
in circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
of
this Agreement shall be valid and enforceable to the fullest extent permitted
by
law.
13. Waiver
of Breach. The waiver by Company or Executive of any breach of a provision
of
this Agreement shall not operate or be construed as, a waiver of any subsequent
breach by the parties.
14. Amendment.
This Agreement may be amended or modified only by a written instrument signed
by
the Executive and by a duly authorized representative of the
Employer.
15. Notice.
All
notices, requests, demands, payments, or other communications hereunder shall
be
deemed to have been duly given if in writing and hand delivered or sent by
certified or registered mail, return receipt requested or by a nationally
recognized overnight courier service , to the appropriate address indicated
below or to such other address as may be given by a party hereto in a notice
sent to all parties hereto and shall be effective on the date of delivery in
person or by courier or three (3) days after the date mailed:
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(a)
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if
to Company, to:
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Wubo
Cao
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Middle
Section, Longmao Street, Area A,
Laiyang
Waixiangxing Industrial Park
Laiyang
City, Yantai, Shandong Province,
People’s
Republic of China 710075
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With
a copy to:
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Loeb
& Loeb, LLP
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000
Xxxx Xxxxxx
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Xxx
Xxxx, XX00000
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b)
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If
to Executive, to:
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Xxxx
Xxxx
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000
X. Xxxx Xxxxxx Xxxx Xxxxx X-000
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Xxxxxxxxxx,
XX00000
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16. Entire
Agreement. This Agreement supersedes any and all other understandings and
agreements, either oral or in writing, between the Executive, on one hand,
and
the Company, the Subsidiary or any other subsidiary of the Company, on the
other
hand, with respect to the subject matter hereof and constitutes the sole and
only agreement between such persons with respect to said subject matter. Each
party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, oral or otherwise, have been made by any party or
by
anyone acting on behalf of any party, which are not embodied herein, and that
no
agreement, statement, or promise not contained in this Agreement shall be valid
or binding or of any force or effect. No change or modification of this
Agreement shall be valid or binding upon the parties hereto unless such change
or modification is in writing and is signed by the parties hereto.
17. Severability.
If any one or more of the provisions contained in this Agreement shall be held
by a court of competent jurisdiction to be invalid, illegal, or unenforceable
in
any respect for any reason, that invalidity, illegality, or unenforceability
shall not affect any other provisions hereof, and this Agreement shall be
construed as if that invalid, illegal, or unenforceable provision had never
been
contained herein.
18. Parties
Bound. The terms, promises, covenants, and agreements contained in this
Agreement shall apply to, be binding upon, and inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement may not be assigned by Company or Executive without the
prior written consent of the other party.
19. Governing
Law. This is a Florida contract and shall be construed under and be governed
in
all respects by the laws of the State of Florida, without giving effect to
the
conflict of laws principles of Florida. With respect to any disputes concerning
federal law, such disputes shall be determined in accordance with the law as
it
would be interpreted and applied by the United States Court of Appeals for
the
Second Circuit.
20.
Others. To the extent the Executive is covered by any Director’s and Officer’s
insurance maintained by the Employer for the period during which the Executive
provides services hereunder, the Employer will undertake reasonable efforts
to
make available to the Executive the benefit of such insurance.
21.
Counterparts. This Agreement may be executed in any number of counterparts,
each
of which when so executed and delivered shall be taken to be an original; but
such counterparts shall together constitute one and the same
document.
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By:
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/s/
Wubo Cao
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Title:
Chief Executive Officer and Chairman of the Board
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EXECUTIVE
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/s/Xxxx Xxxx
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Xxxx
Xxxx
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