EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT is made as of June 30, 2009 by and between RINO
International Corporation, a Nevada corporation (the "Company"), and Yi (Xxxxx)
Xxx (“Employee”).
WITNESSETH:
WHEREAS,
Employee wishes to be employed by the Company with the duties and
responsibilities as hereinafter described, and the Company desires to assure
itself of the availability of Employee’s services in such capacity.
NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and Employee hereby agree as follows:
1. EMPLOYMENT. The
Company hereby agrees to employ Employee, and Employee hereby agrees to serve
the Company, upon the terms and conditions hereinafter set forth.
2. TERM. The employment
of Employee by the Company pursuant to this Agreement shall be for a thirty-six
(36) month period commencing on June 30, 2009 (the “Employment Term”).
3. DUTIES. Employee
shall, subject to overall direction consistent with the legal authority of the
Chief Executive Officer and Chairman of the Board, serve as, and have all power
and authority inherent in the offices of Chief Financial Officer of the Company
and shall be responsible for those areas in the conduct of the business
reasonably assigned to her by the Chief Executive Officer and the Chairman of
the Board. Employee shall devote substantially all her business time and efforts
to the business of the Company; provided, however, that it is understood and
agreed that, while Employee may devote time to other business matters in which
she may have an interest, in the event of a conflict, Employee’s first and
primary responsibility shall be to the performance of her duties for the
Company.
4. RESPONSIBILITIES. The
general responsibilities of the chief financial officer (CFO) include but are
not limited to the responsibilities set forth in Exhibit A attached
hereto.
5. COMPENSATION AND OTHER PROVISIONS.
Employee shall be entitled to the compensation and benefits hereinafter
described in subparagraphs (A) through (G) (such compensation and benefits being
hereinafter referred to as “Compensation Benefits”).
A. ANNUAL BASE SALARY. The
Company shall pay to Employee a base salary (the “Base Salary”) as
follows:
A
gross amount of USD120, 000 per annum or USD10, 000 per month, paid on the first
business day of each month for the prior month’s employment.
B. EQUITY COMPENSATION. The
Company shall grant to Employee 50,000 options to purchase common stock at the
exercise price of $6.15 per share, vesting in the following
schedule:
● 10,000
shares will vest on June 30, 2010;
● 20,000
shares will vest on June 30, 2011 and
● 20,000
shares will vest on June 30, 2012
C. BONUS COMPENSATION. The
Company may, at the discretion of and subject to approval of the
Compensation Committee of the Board of Directors, award the Employee a bonus.
The Bonus Compensation may be in the form of securities or cash. The
Company guarantees that the Employee’s annual base salary, bonus compensation
and equity compensation would be no less than USD146,000 (RMB1, 000,000) per
annum commencing on June [1], 2009.
D. COMPENSATION ADJUSTMENT.
The Base Salary and Employee’s other compensation will be reviewed by the Board
of Directors of the Company (the “Board”) at least annually and may be increased
(but not decreased) from time to time as the Board may determine.
E. PARTICIPATION IN BENEFIT
PLANS. During the Employment Term, Employee shall be eligible to
participate in all Employee benefit plans and arrangements now in effect or
which may hereafter be established, including, without limitation, all group
insurance and medical care plans and all disability, retirement and other
Employee benefit plans of the Company. Should the Employee not want to
participate in the Company’s health plan, with Board approval, the company will
reimburse the Employee for the expense incurred in participating in another
plan.
F. OTHER PROVISIONS.
During the Employment Term, Employee shall be entitled to four (4) weeks paid
vacation per annum. Employee shall make herself available via email and an
enabled mobile phone during periods in which she is not in the offices of
the Company. Employee shall be reimbursed for all reasonable expenses incurred
by her in the performance of her duties, including, but not limited to,
entertainment, travel and other expenses incurred in connection with such
duties.
G. INDEMNIFICATION. The
Company shall indemnify and hold harmless the Employee to the fullest extent
permitted by law for any action or inaction of the Employee while serving as an
officer and director of the Company or, at the Company’s request, as an officer
or director of any other entity affiliated with the Company, or as a fiduciary
of any benefit plan. The Company shall include the Employee under the Company’s
directors’ and officers’ liability insurance in the same amount and to the same
extent as the Company covers its other officers and directors both (i) during
the Employment Term, and (ii) for a five (5) year period after the Employment
Term.
6. TERMINATION.
Employee’s employment hereunder shall terminate as a result of any of the
following events:
A. Employee’s
death;
B. Employee
shall be unable to perform her duties hereunder by reason of illness, accident
or other physical or mental disability for a continuous period of at least three
(3) months or an aggregate of nine (9) months during any continuous eighteen
(18) month period (“
Disability ”);
C. Voluntary
resignation by the Employee;
D. Termination for Good
Reason. If any of the following events occurs after the Effective Date,
the Employee may resign from her employment for Good Reason by giving written
notice of resignation within 60 days following such event:
(i)
a
material reduction in the scope of the Employee'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
Employee's status in the Company;
(ii)
the
failure by the Company to continue to provide the Employee with benefits
substantially similar to those specified in Section 5 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
Any
written notice of resignation for Good Reason shall describe in reasonable
detail the circumstances believed to constitute Good Reason. Notwithstanding
Employee'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 Employee as constituting Good Reason
and Employee'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.
E. Termination
by the Company with Cause, where “Cause” shall mean:
(i) final non-appealable adjudication of the Employee of a felony, which would
have a material or adverse effect on the business of the Company; or (ii) the
determination of the Board (other than the Employee) that the Employee has
engaged in intentional misconduct or the gross neglect of her duties, which has
a continuing material adverse effect on the business of the Company;
or
F. Termination
by the Company for any reason other than Cause.
Any
termination pursuant to subparagraph B, C, D, E or F of this Section shall
be communicated by a written notice (“Notice of Termination”); such
notice will set forth with specificity the grounds for termination if
termination is for “Cause”. The Employee’s employment under this Agreement shall
be deemed to have terminated as follows: (i) if the Employee’s employment is
terminated pursuant to subparagraph A above, on the date of her death; (ii) if
the Employee’s employment is terminated pursuant to subparagraph B, E, or F
above, on the date the Notice of Termination is received by the Employee; and
(iii) if the Employee’s employment is terminated pursuant to subparagraph C
above, thirty (30) days after the date on which the Company receives the Notice
of Termination from the Employee. The date on which termination is deemed to
have occurred pursuant to this paragraph is hereinafter referred to as the
“ Date of
Termination ”. If the Notice of Termination is sent to the Employee by
the Company, then it shall be sent to the Employee pursuant to the terms set
forth in Section 15 of this Agreement.
7. PAYMENTS ON
TERMINATION. In the event that the Employee’s employment is terminated
pursuant to Sections 6 A, B, D or F above, the Company shall pay to the Employee
and/or her estate, (i) all the Compensation Benefits the Employee is entitled to
through the Date of Termination, (ii) all benefits and other compensation, if
any, due and owing as of the Date of Termination, and (iii) any Severance
Payments that the Employee may be entitled to pursuant to Section
16.
8. LIFE INSURANCE. If
requested by the Company, the Employee shall submit to such physical
examinations and otherwise take such actions and execute and deliver such
documents as may be reasonably necessary to enable the Company to obtain life
insurance on the life of the Employee for the benefit of the
Company.
9. REPRESENTATIONS AND
WARRANTIES. The Employee represents and warrants to the Company that she
is under no contractual or other restriction or obligation that would prevent
the performance of her duties hereunder or interfere with the rights of the
Company hereunder.
10. DISCLOSURE AND PROTECTION OF
CONFIDENTIAL INFORMATION.
A. For
purposes of this Agreement, “Confidential
Information” means knowledge, information and material which is
proprietary to the Company, of which the Employee may obtain knowledge or access
through or as a result of her employment by the Company (including information
conceived, originated, discovered or developed in whole or in part by the
Employee). Confidential Information includes, but is not limited to, (i)
technical knowledge, information and material such as trade secrets, processes,
formulas, data, know-how, improvements, inventions, computer programs, drawings,
patents, and experimental and development work techniques, and (ii)
marketing and other information, such as supplier lists, customer lists,
marketing and business plans, business or technical needs of customers,
consultants, licensees or suppliers and their methods of doing business,
arrangements with customers, consultants, licensees or suppliers, manuals and
personnel records or data. Confidential Information also includes any
information described above which the Company obtains from another party and
which the Company treats as proprietary or designates as confidential, whether
or not owned or developed by the Company. Notwithstanding the foregoing, any
information which is or becomes available to the general public other than by
breach of this Section 10 shall not constitute Confidential Information for
purposes of this Agreement.
B. During
the period in which the Employee is employed by the Company and for two (2)
years thereafter, the Employee agrees, to hold in confidence all Confidential
Information and not to use such information for the Employee’s own benefit or to
reveal, report, publish, disclose or transfer, directly or indirectly, any
Confidential Information to any person or entity, or to utilize any Confidential
Information for any purpose, except in the course of Employee’s work for the
Company, or as required by law.
C. The
Employee will abide by any and all policies and procedures, whether formal or
informal, that may from time to time be imposed by the Company for the
protection of Confidential Information, and will inform the Company of any
defects in, or improvements that could be made to, such policies and
procedures.
D. The
Employee will notify the Company in writing immediately upon receipt of any
subpoena, notice to produce, or other compulsory order or process of any court
of law or government agency which requires or may require the disclosure or
other transfer of Confidential Information.
E. Upon
termination of Employee’s employment with the Company, Employee will deliver to
the Company or destroy (at Employee’s election) any and all records and tangible
property that contain Confidential Information that are in her possession or
under her control.
11. COVENANT NOT TO
COMPETE.
A. In
consideration for the Company entering into this Agreement, Employee covenants
and agrees that during the period in which the Employee is employed by the
Company and for one (1) year thereafter, Employee will not, without the express
prior written consent of the Company, directly or indirectly, compete with the
business of the Company anywhere within the United States of America or the
Peoples Republic of China. Employee will not undertake any activities that are
competitive with or acquire interests in an entity which is competitive with the
business of the Company, whether alone, as a partner, or as an officer,
director, Employee, independent contractor, consultant or shareholder holding 5%
or more of the outstanding voting stock of any other corporation, or as a
trustee, fiduciary or other representative of any other person or
entity.
B. During
the period in which the Employee is employed by the Company and for one (1) year
thereafter, Employee will not, directly or indirectly, solicit or induce any
Employee of the Company or any Employee of a subsidiary of the Company to leave
her or her employment, or solicit or induce any consultant or independent
contractor to sever that person’s relationship with the Company.
C. If
any court shall determine that the duration or geographical limit of any
covenant contained in this Section 11 is unenforceable, it is the intention of
the parties that covenant shall not be terminated but shall be deemed amended to
the extent required to render it valid and enforceable, such amendment to apply
only in the jurisdiction of the court that has made such
adjudication.
D.
The Employee acknowledges and agrees that (i) the covenants contained in
Sections 10 and 11 hereof are the essence of this Agreement and that such
covenants are reasonable and necessary to protect and preserve the interests,
properties, and business of the Company, and (ii) irreparable loss and damage
will be suffered by the Company should the Employee breach any of such
covenants.
12. AVAILABILITY OF INJUNCTIVE
RELIEF. The Employee acknowledges and agrees that any breach by her of
the provisions of Sections 10 or 11 hereof will cause the Company irreparable
injury and damage for which it cannot be adequately compensated in damages. The
Employee therefore expressly agrees that the Company shall be entitled to seek
injunctive and/or other equitable relief, on a temporary or permanent basis to
prevent an anticipatory or continuing breach of this Agreement. Nothing herein
shall be construed as a waiver by the Company of any right it may have, or
hereafter acquire, to monetary damages by reason of any injury to its property,
business or reputation or otherwise arising out of any wrongful act or omission
of it.
13. SURVIVAL. The
covenants, agreements, representations and warranties contained in or made
pursuant to this Agreement shall survive the Employee’s termination of
employment, irrespective of any investigation made by or on behalf of any
party.
14. MODIFICATION. This
Agreement sets forth the entire understanding of the parties with respect to the
subject matter hereof, supersedes all existing agreements between them
concerning such subject matter, and may be modified only by a written instrument
duly executed by each party.
15. NOTICES. Any notice
required or permitted hereunder shall be deemed validly given if delivered by
hand, verified overnight delivery, or by first class, certified mail to the
following addresses (or to such other address as the addressee shall notify in
writing to the other party):
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If
to the Employee:
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Yi (Xxxxx) Xxx
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If
to the Company:
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11 Youquan Road, Zhanqian Street, Jinzhou District
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Dalian,
China 116100
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16. SEVERANCE UPON TERMINATION
WITHOUT CAUSE OR FOR GOOD REASON. If, during the Term, Company terminates
the Employee's employment with the Company and its subsidiaries for any reason
other than for Cause or the Employee's death or disability, or the Employee
terminates her employment for Good Reason (not including Company's or the
Employee's non-renewal of the Term) and the Employee executes and delivers to
the Company a valid and effective release of all claims against the Company and
its affiliates in a form and format as prepared and provided by the Company, the
Employee 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 Employee 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) 50% of her then current annual base salary and (b) 50% of the average
annual cash bonus payments paid by the Company to the Employee during the
current year 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 Employee was receiving on the date
of her termination, with any related costs to be paid by the Employee being no
more than what Employee 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 the Employee has commenced employment
elsewhere and becomes eligible for participation in a similar type of benefit
program of her successor employer.
17. WAIVER. Any waiver by
either party of a breach of any provision of this Agreement shall not operate as
or be construed to be a waiver of any other breach of such provision or of any
breach of any other provision of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. All waivers must be in writing.
18. BINDING EFFECT. The
Company’s rights and obligations under this Agreement shall not be transferable
by assignment or otherwise, and any attempt to do any of the foregoing shall be
void. The provisions of this Agreement shall be binding upon the Employee and
her heirs and personal representatives, and shall be binding upon and inure to
the benefit of the Company, its successors and assigns.
19. HEADINGS. The
headings in this Agreement are solely for convenience of reference and shall be
given no effect in the construction or interpretation of this
Agreement.
20. GOVERNING LAW; VENUE.
This Agreement is to be performed in the State of Nevada, and the validity,
construction and enforcement of, and the remedies under, this Agreement shall be
governed in accordance with the laws of the State of Nevada, without giving
effect to any choice of laws or principles.
21. INVALIDITY. The
invalidity or unenforceability of any term of this Agreement shall not
invalidate, make unenforceable or otherwise affect any other term of this
Agreement, which shall remain in full force and effect.
22. ATTORNEYS’ FEES. Except for any
disputes arising pursuant to Section 16 of this Agreement, if any dispute or
litigation arises hereunder between any of the parties hereto, then the
prevailing party shall be entitled to all reasonable costs and expenses incurred
by it in connection therewith (including, without limitation, all
reasonable attorneys’ fees and costs incurred before and at any trial or other
proceeding and at all tribunal levels), as well as all other relief granted in
any suit or other proceeding. As used herein, a party shall be deemed
“prevailing” when it recovers (i) as to a damage claim, an aggregate of more
than fifty percent (50%) of the damages which it seeks among its various
asserted claims exclusive of interest, attorney’s fees, costs incurred and
exemplary damages, and (ii) as to an equity claim, substantial injunctive or
other equitable relief upon its asserted claim. Either of the parties herein
shall be entitled to request the trier of fact in any dispute, litigation or
arbitration between them, to determine which of the parties is
“prevailing”.
23. REGISTRATION OF OPTION
SHARES. When and if the Company files an registration statement of Form
S-8 for registration under Securities Act of 1933, as amended (the “Securities
Act”), of securities issued pursuant to any employee benefit plan (as such term
is defined under Rule 405 promulgated under the Securities Act) of the Company,
the parent, any subsidiary, any controlled affiliate or variable interest entity
of the Company, the Company shall include in such registration statement on Form
S-8 shares issuable upon exercise of the options granted to the Employee under
Section 5.B.
WITNESS
WHEREOF, the parties have executed this Agreement as of the date first
hereinabove written.
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RINO
International Corporation, a Nevada corporation
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By: /s/ Xxx
Xxxxx
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Name:
Xxx Xxxxx
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Title: Chief
Executive Officer
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Employee
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Yi
(Xxxxx) Xxx
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/s/ Yi (Xxxxx)
Liu
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