AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the “Agreement”) is effective as of
the 7th day
of January, 2010 and is
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BETWEEN:
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SOLAR ENERTECH CORP., a
company incorporated under the laws of the State of Delaware and having a
business address at 000 Xxxxxx Xxxxxx, Xxxxx
#000,
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Xxxxxxxx
Xxxx, XX, 00000 (the “Company”)
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AND:
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XXXXX XXX XX, an accountant (the
“CFO”).
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A.
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The
Company is a company incorporated under the laws of the State of
Delaware;
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B.
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The
Company is in the business of manufacturing, distributing and selling
solar energyrelated products;
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C.
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The
Company requires a person to act as its Chief Financial Officer and, in
addition to this, provide other management
services;
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D.
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The
Company wishes to retain the services of the CFO on the terms and
conditions of this Agreement;
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THIS AGREEMENT
WITNESSES that in consideration
of the mutual covenants and agreements hereinafter contained, the parties agree
as follows:
ARTICLE
1
APPOINTMENT
AND AUTHORITY OF CHIEF FINANCIAL OFFICER
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1.01
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APPOINTMENT
OF CHIEF FINANCIAL OFFICER
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This
Agreement confirms the employment of Xxxxx Xxx Xx as its Chief Financial Officer
to perform certain services for the benefit of the Company on the terms and
conditions herein set forth.
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1.02
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AUTHORITY
OF CFO
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The CFO
shall have no right or authority, express or implied, to commit or otherwise
obligate the Company in any material manner whatsoever except to the extent
specifically provided herein or specifically authorized in writing by the
President of the Company or the Board of Directors of the Company (the “Board”).
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1.03
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CFO’S
WARRANTIES
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The CFO
represents and warrants that he will provide competent management; that he has
the qualifications, experience and capabilities necessary to carry out the
Services (as defined in Section 2.02 below) to be performed hereunder; and that
the Services will be performed in a competent and efficient
manner.
ARTICLE
2
CFO’S
AGREEMENTS
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2.01
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ROLE
OF CFO
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The CFO
will undertake all activities which will further and enhance the business and
affairs of the Company as he is directed by the Board. For purposes
of this Agreement, “Company” means the Company and all of its subsidiaries and
affiliates. The CFO acknowledges that the Company initially has
limited personnel and resources, and that the CFO will be requested to undertake
activities which will be outside the general nature of work ordinarily performed
by a Chief Financial Officer of a corporation.
The CFO,
at the expense of and on behalf of the Company, shall:
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(a)
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make
and implement or cause to be implemented all lawful decisions of the
President of the Company and the Board in accordance with and as limited
by this Agreement;
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(b)
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at
all times be subject to the direction of the President of the Company and
the Board and keep the Board informed as to all material matters
concerning the CFO’s activities;
and
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(c)
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at
all times faithfully and industriously perform to the best of the CFO’s
ability all of the duties that may be required of the CFO pursuant to the
terms of this Agreement. The Company shall be entitled to all
benefits or profits arising from or incidental to all work and services
performed by the CFO on behalf of the Company hereunder. The
CFO agrees to devote as much of his business time, skills and energy to
the business of the Company as needed to properly perform the functions of
CFO.
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2.02
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MANAGEMENT
ACTIVITIES
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In
carrying out its obligations under this Agreement, the CFO shall undertake all
activities necessary to develop the business of the Company including those
activities described in Section 2.01 hereof and including the following:
overseeing, coordinating and supervising the preparation and audit of the
Company's financial statements, overseeing and supervising the preparation of
the Company's financial statement filings in accordance with applicable rules
under the Securities Exchange Act of 1934 and acting as the liaison and contact
person for outside counsel and audit staff on all matters concerning the
preparation, filing and audit of the Company's financial statements
(collectively, the “Services”).
2
The CFO
acknowledges that the Company is a reporting issuer under the laws of the United
States of America and that any funds received as subscriptions or sales revenues
of the Company’s products must be fully accounted for in a manner in accordance
with US GAAP, the U.S. securities laws, and the rules and regulations of the
U.S. Securities and Exchange Commission thereunder. The CFO agrees
that he will make all reasonably necessary efforts to ensure that the management
of the Company, and the accounting for it, is in accordance with US GAAP
principles.
The
Services will be delivered and performed primarily in Shanghai, PRC and at the
Company's offices in Shanghai, PRC.
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2.03
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AUTHORITY
OF CFO
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The
Company hereby authorizes the CFO, subject to the other provisions of this
Agreement, to do all lawful acts and things as the CFO may in its discretion
deem necessary or desirable to enable the CFO to carry out its duties hereunder,
and hereby grants the CFO the inherent authority to undertake all such lawful
activities as a CFO normally has.
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2.04
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LIMITATION
OF CFO’S OBLIGATIONS
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Notwithstanding
anything in this Agreement, the CFO shall not be required to expend his own
money or to incur any liabilities, obligations, costs, dues or debts and all
money necessary to carry out his duties under this Agreement shall be provided
by the Company to the CFO forthwith upon the CFO’s request.
The
engagement of the CFO by the Company will be exclusive.
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2.05
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RELATIONSHIP
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The
parties confirm the CFO will be a full-time at-will employee of the Company and
will be subject to the control and direction of the President of the Company and
the Board, and that income tax deductions and other deductions will be made by
the Company where necessary.
ARTICLE
3
COMPANY’S
AGREEMENTS
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3.01
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COMPENSATION
OF CFO
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As
compensation for the services rendered by the CFO pursuant to this Agreement,
the Company agrees to pay the CFO an annual salary of RMB￥600,000 (the
“Salary”). The CFO’s
Salary shall increase to RMB￥672,000 per annum
in the event the Company is profitable (on a cash basis) for each of the
quarters ending March 30, 2010 and June 30, 2010 as evidenced by its filings on
Form 10-Q with the Securities and Exchange Commission for such quarters, which
increase shall take effect upon the filing of the Form 10-Q for the quarter
ending June 30, 2010. The Salary shall be payable on or before the
first day of each month, or if a Saturday, Sunday or holiday, the preceding
business day. Salary adjustments for future years shall be determined
by the Board in its sole and exclusive discretion.
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The CFO
may be granted portion(s) of Restricted Stock as may be forfeited by departed or
departing management members from time to time as determined by the Board in its
sole and exclusive discretion. The CFO may also be granted an option
to purchase additional shares of the Company’s common stock as approved by the
Compensation Committee of the Board. The new option grant shall vest
over four (4) years, with 25% of the shares vesting each year.
The CFO
shall be entitled to two weeks paid vacation for every twelve months worked
under this Agreement.
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3.02
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REIMBURSEMENT
OF EXPENSES
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The
Company shall only be obligated to pay or reimburse the CFO for the normal and
usual expenses of managing the Company as provided herein, including, without
any limitation, any other expenses as set out herein. In the event of
a dispute between the CFO and the Company regarding the amount set out in the
statement of expenses the Company will nevertheless be obligated to pay the
amount set out herein to the CFO, and the Company may then refer the matter to
arbitration as provided for herein.
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3.03
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ACCESS
TO COMPANY INFORMATION
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The
Company shall make available to the CFO such financial information and data and
shall permit the CFO, to have access to such documents or premises as are
reasonably necessary to enable his to perform the services provided for under
this Agreement, subject to Article 5.
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3.04
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INDEMNITY
BY COMPANY
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The
Company agrees to indemnify, defend and hold harmless the CFO from and against
any and all claims, demands, losses, actions, lawsuits and other proceedings,
judgments and awards, and costs and expenses (including reasonable legal fees),
arising directly, in whole or in part, out of any matter related to any action
taken by the CFO within the scope of his duties or authority hereunder,
excluding only such of the foregoing as arise from the fraudulent, negligent, or
wilful act or omission of the CFO and the provisions hereof shall survive
termination of this Agreement. Nothing in the paragraph may be
construed to commit the Company to indemnify the CFO or provide insurance where
such an act is prohibited by statutory, legal or regulatory
requirements.
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ARTICLE
4
DURATION,
TERMINATION AND DEFAULT
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4.01
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EFFECTIVE
DATE
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This
Agreement shall become effective as of the day and year first written above and
shall remain in force on an at-will basis, until terminated in accordance with
Section 4.02 below. This Agreement replaces and supersedes any oral
or written agreement regarding the terms of the CFO’s employment.
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4.02
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TERMINATION
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This
Agreement may be terminated by either party at any time with or without cause by
giving the other party written notice of such termination.
The CFO
understands that his employment is at-will and that there is no obligation for
the Company to continue to employ the CFO for any specific period of time, or in
any specific role or geographic location.
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4.03
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DUTIES
UPON TERMINATION
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Upon
termination of this Agreement for any reason, the CFO shall promptly deliver the
following:
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(a)
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a
final accounting, reflecting the balance of expenses incurred on behalf of
the Company as of the date of
termination;
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(b)
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all
documents pertaining to the Company or this Agreement, including but not
limited to all books of account, financial records, audit working papers,
correspondence and contracts, invoices, sales records, inventory records
and financial data in electronic form provided;
and
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(c)
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all
property of the Company, including product inventory, which is in his
possession or the possession of his family, associates and
affiliates.
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Upon
termination, the Company will pay to the CFO any outstanding amounts owed to him
under this Agreement, including, to the extent applicable, Section 4.04 (subject
to the CFO’s full compliance with the provisions of Sections 4.03 and 4.07
herein). The CFO agrees that upon his termination, the CFO will not
be entitled to any additional payments beyond amounts already accrued under the
terms of this Agreement except as provided by law.
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4.04
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TERMINATION
BY COMPANY OTHER THAN CAUSE OR RESIGNATION BY CFO DUE TO A DIMINUTION OF
RESPONSIBILITIES
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In the
event of the CFO’s involuntary termination from service for reasons other than
Cause (as defined below), or due to the event of a Diminution of
Responsibilities (as defined below) (“Involuntary Termination”):
(a) the CFO shall receive all salary and accrued vacation (less
applicable withholding) earned through the CFO's date of Involuntary
Termination, and the benefits, if any, under Company benefit plans to which the
CFO may be entitled pursuant to the terms of such plans, (b) provided that the
CFO complies with Sections 4.03 and 4.07, all outstanding stock options granted
and restricted stock issued by the Company to the CFO prior to the date of
Involuntary Termination shall become fully vested and exercisable immediately
prior to the effective date of the Involuntary Termination, and (c) provided
that the CFO complies with Section 4.07 below prior to the fiftieth (50th) day
following such Involuntary Termination, the CFO shall receive a lump sum cash
payment in an amount equal to six (6) months of the CFO’s then effective base
salary (less applicable withholding), paid on the first payroll date which is
fifty (50) days after the date of such Involuntary Termination.
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4.05
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TERMINATION
BY COMPANY FOR CAUSE OR RESIGNATION BY CFO WITHOUT DIMINUTION OF
RESPONSIBILITIES.
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In the
event of the CFO’s termination by the Company for Cause or resignation
by
the CFO
without Diminution of Responsibilities, the CFO shall only be entitled to
receive all salary and accrued vacation (less applicable holding) earned through
the CFO’s date of termination or resignation, as applicable, and the benefits,
if any, under Company benefit plans to which the CFO may be entitled pursuant to
the terms of such plans.
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4.06
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CAUSE; DIMINUTION OF
RESPONSIBILITIES.
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For
purposes of this Agreement:
“Cause” means the CFO’s (a)
failure to perform any reasonable and lawful duty of the CFO’s position or
failure to follow the lawful written directions of the President or Board; (b)
commission of an act that constitutes misconduct and is injurious to the Company
or any subsidiary; (c) conviction of, or pleading “guilty” or “no contest” to, a
felony under the laws of the United States or any state thereof; (d) committing
an act of fraud against, or the misappropriation of property belonging to, the
Company or any subsidiary; (e) commission of an act of dishonesty in connection
with the CFO’s responsibilities as an employee and affecting the business or
affairs of the Company; (f) material breach of any confidentiality, proprietary
information or other agreement between the CFO and the Company or any
subsidiary; or (g) failure or refusal to carry out the reasonable directives of
the President or the Board.
“Diminution of
Responsibilities” means the occurrence of any of the following
conditions, without the CFO’s written consent which condition(s) remain(s) in
effect twenty (20) days after receipt by Company from the CFO of a written
notice to: (i) a significant diminution in the nature or scope of the CFO’s
authority, title, function or duties from the CFO’s authority, title, function
or duties; (ii) a ten percent (10%) reduction in the CFO’s base salary or a
twenty-five percent (25%) reduction in the CFO’s target bonus opportunity, if
any (in either case, unless such reduction is part of a Company officer-wide
program to reduce expenses); (iii) any material breach of the terms of this
Agreement by the Company; or (iv) failure of any successor or assignee to the
Company to assume this Agreement. Notwithstanding the foregoing, the CFO’s
continued employment for ninety (90) days following the occurrence of any
condition constituting “Diminution of Responsibilities” without the CFO
providing written notice to the Company shall constitute consent to, or a waiver
of right with respect to, such condition.
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4.07 RELEASE OF
CLAIMS. The Company shall condition the payments and benefits
set forth in Section 4.04 of this Agreement upon the delivery by the CFO of a
signed customary full release of all known and unknown claims (“Release”) in a
form satisfactory to the Company. With respect to the payments
provided pursuant to Section 4.04, such Release must become effective in
accordance with its terms prior to the fiftieth (50th) day
following the date of Involuntary Termination.
ARTICLE
5
CONFIDENTIALITY
5.01 OWNERSHIP
OF WORK PRODUCT
Subject
to Section 5.02, all financial data, financial records (be they in electronic or
hard form), reports, documents, concepts, products and processes together with
any marketing schemes, business or sales contracts, or any business
opportunities prepared, produced, developed, or acquired, by or at the
discretion of the CFO alone or in conjunction with other employees of the
Company, directly or indirectly, in connection with or otherwise developed or
first reduced to practice by the CFO performing the services (collectively, the
“Work Product”) shall
belong exclusively to the Company which shall be entitled to all right,
interest, profits or benefits in respect thereof and shall further be entitled
to exclusive possession thereof.
5.02 CONFIDENTIALITY
In the
course of the CFO’s employment with the Company, the CFO has acquired and will
acquire access to confidential and proprietary information about the Company
including, but not limited to, trade secrets, methods, access to files,
financial information, records, software programs, plans, budgets, practices,
concepts, strategies, methods of operation, financial and business projections
of the Company, and other information not generally available to third parties,
which, if known to them, may put the Company at a competitive
disadvantage. The foregoing shall collectively be referred to as
“Confidential Information.” The CFO acknowledges that Confidential
Information is not readily available to the public, and accordingly, the CFO
agrees that the CFO will not at any time, whether during his employment or
thereafter, disclose to anyone Confidential Information, or utilize such
Confidential Information for the CFO’s own benefit, or for the benefit of third
parties. The CFO agrees that the foregoing restrictions shall apply
whether or not such information is marked “Confidential.” The CFO
agrees that the remedy at law for any breach or threatened breach of this
Section 5.02 will be inadequate and that the Company, in addition to any remedy
at law, shall be entitled to seek appropriate injunctive relief (without posting
of any bond or security) in case of any such breach or threatened
breach.
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5.03
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RESTRICTIVE
COVENANTS
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The CFO
shall, during the term of this Agreement, devote all reasonable time, attention,
and abilities to the business of the Company and, where directed by the
President or the Board, to the business of companies associated with the Company
as is reasonably necessary for the proper exercise of his duties.
ARTICLE
6
MISCELLANEOUS
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6.01
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WAIVER;
CONSENTS
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No
consent, approval or waiver, express or implied, by either party to or of any
breach or default by the other party in the performance by the other party of
its obligations hereunder shall be deemed or construed to be a consent or waiver
to or of any other breach or default in the performance by such other party of
the same or any other obligations of such other party or to declare the other
party in default, irrespective of how long such failure continues, shall not
constitute a general waiver by such party of its rights under this Agreement,
and the granting of any consent or approval in any one instance by or on behalf
of the Company shall not be construed to waiver or limit the need for such
consent in any other or subsequent instance.
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6.02
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GOVERNING
LAW
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This
Agreement shall be governed by the laws of the State of California, and subject
to Section 6.08. The parties agree to be exclusively bound by
the terms set forth in Section 6.08, and shall not bring any claim against the
other in any other place or forum.
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6.03
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NO
ASSIGNMENT PERMITTED
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All of
the rights, benefits, duties, liabilities and obligations of the parties hereto
shall inure to the benefit of and be binding upon the respective successors of
the parties provided that in no circumstances is this Agreement assignable by
either party save and except that, where approved in writing by both parties,
the CFO may be assigned to complete tasks and provide services to a subsidiary
of the Company or an associated company thereof.
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6.04
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MODIFICATION
OF AGREEMENT
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Save and
except any non-disclosure agreement which may be executed between the CFO and
the Company, the Agreement constitutes the entire agreement between the CFO and
the Company and to be effective any modification of this Agreement must be in
writing and signed by the party to be charged thereby.
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6.05
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NOTICES
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All
notices, requests and communications required or permitted hereunder shall be in
writing and shall be sufficiently given and deemed to have been received upon
personal delivery or, if mailed, upon the first to occur of actual receipt of
forty-eight (48) hours after being placed in the mail in the United States of
America, postage prepaid, registered or certified mail, return receipt
requested, respectively addressed to the Company or the CFO as first noted
above, or to such other address as may be specified in writing to the other
party, but notice of a change of address shall be effective only upon the actual
receipt; and provided that in the event of an interruption in the ordinary
postal service, all notices, requests and communications shall be delivered and
not mailed.
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6.06
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FURTHER
ASSURANCES
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The
parties will execute and deliver all such further documents and instruments and
do all such further acts and things as may be required to carry out the full
intent and meaning of this Agreement and to effect the transactions contemplated
hereby.
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6.07
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COUNTERPARTS
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This
Agreement may be executed in several counterparts, each of which will be deemed
to be an original and all of which will together constitute one and the same
instrument. A faxed signature shall be accepted as an
original.
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6.08
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ARBITRATION
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The
parties agree that any controversy, claim or dispute arising out of or in any
way relating to this Agreement, the CFO’s employment by the Company, or the
ending of such employment, including, without limitation, any claim arising
under this Agreement, shall be settled by final and binding
arbitration. Arbitration shall be conducted according to the
Employment Arbitration Rules & Procedures of JAMS in effect at the time a
claim is filed. The arbitration shall be filed with JAMS and shall be
heard on a confidential and expedited basis in Santa Xxxxx County,
California. California Code of Civil Procedure Section 1283.05, which
provides for certain discovery rights, shall apply to any
arbitration. In reaching a decision, the arbitrator shall have no
authority to change, extend, modify or suspend any of the terms of this
Agreement but shall have the authority to order injunctive and/or other
equitable relief. The arbitrator shall render an award and written
opinion in the form typically rendered in employment arbitrations no later than
thirty (30) days from the date the arbitration hearing concludes or the
post-hearing briefs (if requested) are received, whichever is
later. The opinion shall include the factual and legal basis for the
award. A judgment upon any award rendered by the arbitrator may be
entered in any court having jurisdiction. Either the CFO or the
Company may bring an action in any court of competent jurisdiction, if
necessary, to compel arbitration under this provision, to obtain preliminary
relief in support of claims to be prosecuted in arbitration, or to enforce an
arbitration award. The Company shall bear the cost of the
arbitrator’s fees and other costs unique to arbitration if it is required to do
so by applicable law.
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This
Section 6.08 does not apply to or cover the following claims: (i)
claims by the CFO for workers' compensation benefits; (ii) claims by for
unemployment compensation benefits; (iii) claims brought in a court of competent
jurisdiction by either the CFO or the Company to compel arbitration under this
Section 6.08, to enforce an arbitration award or to obtain preliminary
injunctive and/or other equitable relief in support of claims to be prosecuted
in an arbitration by either party; and (iv) claims based upon a pension or
benefit plan which contains an arbitration or other dispute resolution
procedure, in which case the provisions of such plan shall apply.
The CFO
acknowledges that he has carefully read and understands this Section 6.08 and
agrees to be bound by and comply with all of its terms. The CFO
acknowledges that he has voluntarily agreed to arbitrate claims and understands
and acknowledges that by signing this arbitration agreement, the Company and the
CFO are giving up the right to a jury trial and to a trial in a court of
law.
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6.09
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INDEPENDENT
LEGAL ADVICE
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The
CFO hereby acknowledges that he has acted for himself in the preparation and
negotiation of this Agreement and acknowledges that he has been advised to seek
independent legal counsel and review of this Agreement, and in particular tax
counsel, prior to its execution.
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IN WITNESS WHEREOF the parties
have executed the Agreement effective January 7, 2010.
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XXXXX
XXX XX
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by
its authorized signatory:
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/s/ Xxx Xxx Young
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/s/ Xxxxx Xxx Xx
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Name:
Xxx X. Xxxxx
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XXXXX
XXX XX
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Title:
Chief Executive Officer
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