Executive Employment Agreement for Beihong (Linda) Zhang
Executive
Employment Agreement
for
Beihong (Xxxxx) Zhang
THIS
AGREEMENT is made as of the 1st day of September, 2009, by and between Fushi
Copperweld, Inc., a Nevada corporation (“Company”), and Beihong (Xxxxx) Zhang,
an individual resident of Illinois, USA (“Executive”).
WITNESSETH:
WHEREAS,
Company is engaged in the manufacture, distribution, and sale of bimetallic wire
and stranded products; and
WHEREAS,
Company desires to employ Executive as an executive of the Company consistent
with the terms and conditions set forth herein and Executive desires to accept
employment with the Company consistent with such terms and conditions upon the
date of the execution of this Agreement (the “Effective Date”);
NOW,
THEREFORE, in consideration of the mutual promises contained herein, the parties
agree as follows:
1. Employment. Company
hereby employs Executive, and Executive hereby accepts employment on the terms
and conditions hereinafter set forth.
2. Term of Employment.
The initial term of employment under this Agreement shall be for a one-year
period commencing on the Effective Date and terminating on the one year
anniversary of the Effective Date (the “Term”) unless the Agreement is
terminated earlier consistent with the provisions herein; provided that such
Term shall be automatically extended for an additional one year period upon the
same terms and conditions contained herein on the expiration date of the Initial
Term and on any additional term (each period being the “Term”) unless a written
notice of nonrenewal is given by either party at least six full months prior to
the expiration date of the then current Term.
3. Nature of Employment.
Executive shall be employed as Chief Financial Officer and consistent with, as
such, Executive shall perform duties consistent with such position and duties
assigned by and subject to the direction of the President or any other such
executive officer as may be designated in writing from time to time. If
requested, Executive agrees to serve as an executive officer or director of the
Company or other entity affiliated with the Company with no additional
compensation. Executive shall be based at the location of the Company in
Fayetteville, Tennessee. During the Term (including any extensions or renewals
thereof), Executive shall have no other employment or provide services to any
other person other than the Company and any affiliated entities without the
prior written consent of the Executive Committee. Accordingly, Executive agrees
to devote her full working time to the business of the Company; provided,
however, nothing herein contained shall restrict or prevent Executive from
owning and dealing in stocks, bonds, securities, real estate, commodities, or
other investment properties for her own benefit or the benefit of her family.
Further, nothing herein contained shall restrict or prevent Executive, subject
to the prior approval of the Executive Committee, from serving on the of
directors of any entity, including any charitable, religious or civic entity,
which does not directly or indirectly compete with the Company and does not
materially interfere with her duties and responsibilities with the
Company.
1
4. Compensation.
(a) Annual Base Salary.
Executive’s annual salary rate for the services rendered on behalf of the
Company and its subsidiaries during the Term shall be no less than $150,000.00
per year, subject to applicable withholdings and deductions, payable in equal
semimonthly installments. From time to time during the Term, Executive’s base
salary may be increased at the discretion of the Compensation Committee, but
shall in no event be decreased from the amount of the base salary in effect at
that time. The Compensation Committee shall review Executive’s base salary at
least on an annual basis.
(b) Annual Cash Bonus. In
addition to Executive’s base salary, Executive will be guaranteed a year end
performance bonus amount determined by the Board of Directors.
(c) Equity Award. Stock
options in the amount of 100,000 shares at strike price upon signing with three
year vesting delineated by:
|
Year
1
|
Year
2
|
Year
3
|
|
50%
|
30%
|
20%
|
5. 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.
Company will reimburse Executive for all such expenses during any calendar year
upon the presentation by Executive, from time to time, of an itemized account of
expenditures applicable to such calendar year, but in no event later than the
end of the calendar year following the calendar year in which such expenditures
occurred.
6. Vacation. Executive
shall be entitled to paid vacations during each calendar year of the Term at
such times and for such duration as may be determined by the Executive
Committee, taking into consideration the needs and requirements of Company for
Executive’s services; provided, however, the minimum paid vacation to which
Executive shall be entitled in any calendar year is three (3) weeks, and
Executive is not entitled to payment for any unused vacation as of the end of
any calendar year.
7. Additional
Benefits. During the Term, the Company shall pay for and
provide Executive with a term life insurance policy in an amount of $150,000.00
at standard, non-smoking insurance premium rates (or such lesser amount that can
be provided at the same cost as such policy). During the Term, Executive and,
subject to the terms of the applicable plan, her eligible dependents shall have
the right to participate in any Executive employee pension or welfare benefit
plans provided by Company to its U.S.-based officers generally, including any
group life, hospitalization, medical, dental, accidental death and disability,
long-term disability income replacement insurance, and retirement
plans.
2
8. 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 for any prior fiscal year, and (iii) 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 the 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). This Agreement
shall thereupon terminate, and Company shall have no further obligation to the
estate of Executive.
9. 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 he 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
(including disability benefits paid pursuant to Section 7 above) and by any
government sponsored program, for a six (6) month period from the date of
permanent disability. 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 their 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.
10. 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 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 Executive Committee. 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.
3
11. 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
material 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 7 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.
12. 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) and Executive 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
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) 50% 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 three (3) 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. Except as provided in this Section
12, 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.
4
13. Board/Committee
Resignation. Upon termination of Executive’s employment for any reason,
Executive agrees to resign, as of the date of such termination and to the extent
applicable, from the Board (and any committees thereof) and the Board of
Directors (and any committees thereof) of any of the Company’s affiliates for
which he may serve as a Director.
14. Property of Company.
Executive agrees that upon the termination of her employment he will turn over
to Company all property and confidential information of Company which has come
into her possession while an Executive of Company.
15. Covenants by
Executive.
(a) Non-competition. As a
separate document, Executive agrees to sign Fushi Copperweld’s Employee
Nondisclosure, Noncompetition, and Intellectual Property Agreement. Executive
understands that execution of this agreement is a condition of the effectiveness
of this Executive Employment Agreement.
(b) Respect for Economic
Relationships. Executive will not, during the term of her employment
under this Agreement including any renewals or extensions thereof, and for a
period of eighteen (18) months thereafter, 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. Executive agrees that the
Term, increase in base salary represented by Section 4(a), and termination
provisions contained in Sections 2, 10, 11, and 12 above constitute fully
adequate and sufficient consideration for the covenants contained in Sections 15
and 17 of this Agreement.
5
(d) Specific Performance.
Executive agrees that a breach or violation of any of the covenants under this
Section will result in immediate and irreparable harm to Company in an amount
which will be impossible to ascertain at the time of the breach or violation and
that the award of monetary damages will not be adequate relief to Company.
Therefore, the failure on the part of Executive to perform all of the covenants
established by this Section shall give rise to a right to Company to obtain
enforcement of this Section in a court of equity by a decree of specific
performance or other injunctive relief. This remedy, however, shall be
cumulative and in addition to any other remedy Company may have.
(e) Survival of
Covenants. The provisions of this Section 15 shall survive the
termination of this Agreement and Executive’s employment for any
reason.
16. Patent and Trademark
Assignment. If Executive creates, invents, designs, develops, contributes
to or improves any works of authorship, inventions, intellectual property,
materials, documents or other work product (including without limitation,
research, reports, software, databases, systems, applications, presentations,
textual works, content, or audiovisual materials), either alone or with third
parties, at any time during Executive’s employment by the Company and within the
scope of such employment and/or with the use of any Company resources, without
additional consideration Executive hereby irrevocably assigns, transfers and
conveys to Company, to the maximum extent permitted by applicable law, all
rights, title, and interest in and to any and all trade secrets, inventions,
letters patent, applications for letters patent, and trademarks whether or not
subject to state or federal trademark. Executive further agrees to disclose
promptly to Company any such works of authorship, inventions, intellectual
property, materials, documents or other work product, and, at the request and
expense of Company, to apply for letters patent or registration thereon in every
jurisdiction designated by Company. Executive represents that he has complied
with this provision as contained in her employment agreement with the Company,
dated January 1, 2007.
17. 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 and financial data, 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 17 shall survive
the termination of this Agreement and Executive’s employment for any
reason.
6
18. 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.
19. 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, to the appropriate address indicated
below or to such other address as may be given in a notice sent to all parties
hereto:
|
|
(a)
|
If
to Company, to:
|
|
|
Xxxxx
Xxxx
|
|
|
Fushi
Copperweld, Inc,
|
|
|
Grand
Orient Tower A, 24thFI H-2
|
|
|
Dong
Zhi Men Xxx Xxxx Jie, Xxx 0
|
|
|
Xxxxxxx,
XXX 000000
|
|
|
00-00-0000-0000
|
|
|
(b)
|
If
to Executive, to:
|
|
|
Beihong
(Xxxxx) Zhang
|
|
|
0000
Xxxx Xxxxxx, #0X
|
|
|
Xxxxx
Xxxxxx, XX 00000
|
20. 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.
21. Severability. If anyone 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.
22. 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.
7
23. Settling Disputes.
Subject to Section 23(b), in any dispute, claim, question or difference arises
with respect to this Agreement or its performance, enforcement, breach,
termination or validity (a “Dispute”), the parties will use their reasonable
efforts to attempt to settle the Dispute.
(a) Arbitration. Subject
to Section 23(b), except as is expressly provided in this Agreement, if the
parties do not reach a solution within a period of 30 business days following
the first notice of the Dispute by any party to the other, then upon written
notice by any party to the other, the Dispute shall be finally settled by
arbitration in accordance with the following procedures:
|
|
(1)
|
The
matter shall be determined by mandatory arbitration in Nashville,
Tennessee by a Tennessee corporate lawyer who is rated “AV” by Martindale
Xxxxxxx Law Directory, who is selected by agreement of the parties to the
dispute and shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. If the parties
do not agree on the selection of an arbitrator, the arbitrator will be
selected by the American Arbitration Association based on the criteria
stated above. The parties to the dispute shall pay on a pro rata basis all
fees and expenses charged by the American Arbitration Association for its
services in selecting an arbitrator. The arbitrator shall base his or her
award on applicable law and judicial precedent and, unless all parties
agree otherwise, shall include in such award the findings of fact and
conclusions of law upon which the award is based. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
|
|
|
(2)
|
The
award of the arbitrator will be final and binding as to all the parties to
the claim, dispute, or controversy and will not be subject to appeal,
review, or reexamination by a court or the arbitrator, except for fraud,
perjury, manifest clerical error, or evident partiality or misconduct by
the arbitrator that prejudices the rights of a party to the arbitration.
The award of the arbitrator may include an award of any damages other than
treble, special, punitive, exemplary, or consequential damages, and,
pursuant to the pleading of any party to the dispute, any court having
jurisdiction may enter a judgment of any award rendered in the
arbitration. The arbitrator shall award to the prevailing party in the
arbitration, if any, as determined by the arbitrator, all costs incurred
by it in connection with the arbitration. Except as otherwise required by
law, the arbitrator and the parties to the arbitration shall treat the
arbitration proceeding as strictly confidential and shall not disclose the
existence, content, or results of the arbitration without the advance
written consent of every party to the
arbitration.
|
8
|
|
(3)
|
If
any party fails to proceed with arbitration as provided herein or
unsuccessfully seeks to stay such arbitration, or fails to comply with any
arbitration award, the other party shall be entitled to be awarded costs,
including reasonable attorneys’ fees, paid or incurred by such other party
in successfully compelling such arbitration or defending against the
attempt to stay, vacate or modify such arbitration
award.
|
(b) Arbitration Does Not
Apply. Nothing in this shall limit or prevent a party from seeking to
enforce the performance of this Agreement by injunction or specific performance
upon application to a court of competent jurisdiction without proof of actual
damage (and without the requirement of posting a bond or other
security).
24. Set Off. Company’s
obligation to pay Executive the amounts provided and to make arrangements
provided hereunder shall be subject to set-off, counterclaim or recoupment of
amounts owed by Executive to the Company or its affiliates.
25. Withholding Taxes.
Company may withhold from any amounts payable under this Agreement such Federal,
state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.
26. Section 409A of the
Code. It is the intention of the parties to this Agreement that no
payment or entitlement pursuant to this Agreement will give rise to any adverse
tax consequences to the Executive under Section 409A of the Code and Department
of Treasury regulations and other interpretative guidance thereunder, including
that issued after the date hereof (collectively, “Section 409A”). The Agreement
shall be interpreted to that end and, consistent with that objective and
notwithstanding any provision herein to the contrary, Executive and the Company
agree to amend this Agreement in order to avoid, if practicable, the application
of such taxes or interest under Section 409A and in a manner to preserve the
economic benefits of this Agreement from Executive’s perspective at no
additional cost to the Company. Further, no effect shall be given to any
provision herein in a manner that reasonably could be expected to give rise to
adverse tax consequences under that provision. Notwithstanding any other
provision herein, if the Executive is a “specified employee” (as defined in, and
pursuant to, Treasury Regulation 1.409A-1(i))on the date of termination, no
payment of compensation under this Agreement shall be made to the Executive
during the period lasting six (6) months from the date of termination unless the
Company determines that there is no reasonable basis for believing that making
such payment would cause the Executive to suffer any adverse tax consequences
pursuant to Section 409A. If any payment to the Executive is delayed pursuant to
the foregoing sentence, such payment instead shall be made on the first business
day following the expiration of the six-month period referred to in the prior
sentence. Moreover, in the event the Executive is required to execute a Release,
no amount payable pursuant to Section 12 that is subject to Section 409A shall
be paid prior to the expiration of the revocation period without regard to
whether the Executive waives such revocation right prior to the expiration of
such period. Although the Company shall consult with the Executive in good faith
regarding implementation of this Section 26, neither the Company nor its
employees or representatives shall have liability to the Executive with respect
to any additional taxes that the Executive may be subject to in the event that
any amounts under this Agreement are determined to violate Section
409A.
9
27. Executive
Representation. Executive hereby represents to the Company that the
execution and delivery of this Agreement by Executive and the Company and the
performance by the Executive of Executive’s duties hereunder shall not
constitute breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound.
28. Cooperation.
Executive shall provide Executive’s reasonable cooperation in connection with
any action or proceeding (or any appeal from any action or proceeding) which
relates to events occurring during Executive’s employment hereunder. This
provision shall survive any termination of this Agreement or Executive’s
employment.
29. Captions. Captions to
the Sections of this Agreement are inserted solely for the convenience of the
parties, are not a part of this Agreement, and in no way define, limit, extend
or describe the scope thereof or the intent of any of the
provisions.
30. Counterparts. This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
31. Applicable Law. This
Agreement shall be construed and the legal relationship between the parties
determined in accordance with the laws of the State of Tennessee without
application of its choice of law rules.
IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals as
of the day and year first above written, the corporate party acting through duly
authorized officers.
|
By:
|
/s/ Xxxxx
Xxxx
|
|
|
Xxxxx
Xxxx
|
||
| Title: President, Fushi Copperweld, Inc. | ||
|
EXECUTIVE
|
||
| /s/ |
/s/
Beihong (Xxxxx) Zhang
|
|
|
(Witness)
|
Beihong
(Xxxxx)
Zhang
|
|
10
