EMPLOYMENT AGREEMENT
Exhibit
10.70
THIS EMPLOYMENT AGREEMENT
(“Agreement”),
is dated as of June 28, 2010, by and between Birch Branch, Inc., a Colorado
company (the “Company”), and Wang
Feng (the “Executive”).
WITNESSETH
WHEREAS, the Company desires
to employ the Executive, and the Executive desires to accept such employment, on
the terms and conditions set forth herein, effective as of the date
hereof.
NOW, THEREFORE, in
consideration of the mutual promises, representations and warranties set forth
herein, and for other good and valuable consideration, it is hereby agreed as
follows:
1.
Employment. The Company hereby agrees to
employ the Executive, and the Executive hereby accepts such employment, upon the
terms and conditions set forth herein. The Company agrees to fully cooperate
with Executive in connection with the obtaining of work visas or other work
permits as may be necessary for Executive to fulfill his responsibilities
hereunder. Executive’s primary office location shall be in Anyang, but Executive
shall be expected to perform many work-related duties in other locations in
China and in the United States as well.
2. Term. This Agreement shall
commence on the date hereof (the “Commencement Date”)
and terminate on the fifth anniversary thereof, unless sooner terminated as
provided in Section 8 of this Agreement (the “Employment
Period”).
3.
Position
and Duties.
(a) During
the Employment Period, the Executive shall serve as the Chief Executive Officer
of the Company and shall have such duties and responsibilities as are consistent
with such office, and as otherwise may be prescribed by the Board of Directors
of the Company (the “Board”) from time to
time.
(b) During
the Employment Period, the Executive shall perform and discharge his duties and
responsibilities well and faithfully and in accordance with the terms and
conditions of this Agreement, and shall devote his best talents, efforts and
abilities to the performance of his duties hereunder.
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(c) During
the Employment Period, unless otherwise approved by the Board, the Executive
shall devote substantially all of his business time, attention and energy to
performing his duties and responsibilities hereunder and shall have no other
employment except by the affiliates of the Company and no other outside business
activities whatsoever; provided, however, that the
Executive shall not be precluded from making passive investments which do not
require the devotion of any significant time or effort.
4.
Compensation.
(a) Base Salary. In
consideration for the Executive’s services hereunder, the Company shall pay the
Executive a minimum annual salary (as the same shall be increased from time to
time at the discretion of the Board, the “Base Salary”) of
US$5270, payable in accordance with the customary payroll practices of the
Company.
(b) Discretionary Bonus.
In addition to the Base Salary, the Executive shall be eligible to receive
discretionary bonuses at times and in amounts to be determined by the Board, or
if the Board organizes a compensation committee, such committee (the “Committee”)
(excluding the Executive if he is then a member of the Committee), in its sole
discretion. This bonus, if any, shall be subject to all applicable tax and
payroll withholdings.
(c) Stock Option
Grants. If the Board decides to adopt an employees stock
option plan, the Board may in its sole discretion, award certain number of
options or other securities to the Executive.
(d) Withholding. All
payments required to be made by the Company to the Executive under this
Agreement shall be subject to withholding taxes, social security and other
payroll deductions in accordance with applicable law and the Company’s policies
applicable to executives of the Company. In addition, the Executive will be
subject to the Company’s tax equalization policy. A hypothetical income
tax, defined as the home-country income tax the Executive would have incurred
under United States tax laws, will be withheld from the Executive’s salary each
pay period. There will be a tax settlement prepared on an annual basis by the
Company’s outside tax consultant for the purpose of comparing the Executive’s
hypothetical withholding to the Executive’s actual hypothetical liability for
that year.
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5.
Benefits. During the Employment
Period, the Company shall provide the Executive with the following benefits
(which may be grossed up as required):
(a) Medical, Health and Social
Insurance Benefits. The Company shall at its own expense provide the
Executive and his eligible dependents with the medical, health and social
insurance coverage provided by the Company generally to its executives or at the
Executive’s option in an annual amount not to exceed US$5270. Nothing herein
shall prevent the Company from amending and/or terminating the coverages and/or
plans described in this Section 5(a); provided, however, that such
amendment and/or termination is applicable generally to the Executives of the
Company.
(b) Disability and Accident
Insurance Benefits. Provided that (i) the Executive is and remains
insurable; (ii) the Executive is and remains eligible for coverage under either
a group insurance policy maintained by the Company or its affiliates, as
determined by the insurance underwriter designated by the Company, based upon an
individual in good health and such other factors, including, but not limited to,
age, gender and income; and (iii) the Executive shall do, execute, acknowledge
and deliver, or cause to be done, executed, acknowledged or delivered, all
documents, applications, instruments, assurances or acts (including but not
limited to physical examinations), as may be necessary to obtain such insurance
coverage, the Company shall provide the Executive with long term disability
insurance coverage from the underwriter providing for “lifetime” disability
benefits in an amount to be determined by the Board. In the event the
underwriter offers the Executive (x) such coverage at a cost in excess of the
standard rate, or (y) insurance coverage providing reduced benefits, the
Executive may, at his option, pay the excess cost to obtain the insurance
coverage or accept the disability insurance coverage with reduced benefits.
Under no circumstances will the Company have any liability for the excess cost
or resulting from the inability to obtain full benefits.
(c) Liability Insurance.
The Executive shall be provided with the liability insurance coverage generally
provided to officers and managers of the Company. However, the Company shall not
be required to obtain such coverage. Notwithstanding the foregoing, the Company
agrees to indemnify the Executive against all costs, damages and expenses,
including attorneys’ fees, incurred by the Executive as a result of claims by
third parties arising out of or from the Executive’s lawful acts as an Executive
of the Company, provided such acts are not grossly negligent and are performed
in good faith and in a manner reasonably believed by the Executive to be in the
Company’s best interests. Any counsel employed to defend the Executive in any
such action shall be reasonably acceptable to the Executive and the Company. Any
counsel appointed by any insurance carrier for the Company shall be deemed
acceptable. It is the intent of the parties that the obligation imposed by this
paragraph will survive the termination of this Agreement.
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(d) Life Insurance
Benefits. Provided that (i) the Executive is and remains insurable; (ii)
the Executive is and remains eligible for coverage under either a group
insurance policy maintained by the Company or its affiliates or an individual
insurance policy in either case at a cost to the Company no greater than the
standard rate, as determined by the insurance underwriter designated by the
Company, based upon an individual in good health and such other factors,
including, but not limited to, age, gender and income; and (iii) the Executive
shall do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged or delivered, all documents, applications, instruments, assurances
or acts (including but not limited to physical examinations), as may be
necessary to obtain such insurance coverage, the Company shall provide the
Executive with life insurance in an amount to be determined by the
Board.
(e) Other Benefits. The
Company shall make available to the Executive any and all other Executive or
fringe benefits (in accordance with their terms and conditions) which the
Company may make available to its other Executives, including tax filing
preparation services for the first year in an amount not to exceed
US$1464.
6. Vacation. The Executive shall be
entitled to paid vacation during each full calendar year of the Employment
Period of a duration provided by the Company generally to its Executives (and a
pro rata portion thereof for any portion of the Employment Period that is less
than a full calendar year); provided, however, that no
single vacation may exceed two consecutive weeks in duration.
7. Termination.
The employment of the Executive hereunder may be terminated prior to the
expiration of the Employment Period in the manner described in this
Section
(a) Termination upon
Death. The employment of the Executive hereunder shall terminate
immediately upon his death.
(b) Termination upon
Disability. The Company shall have the right to terminate this Agreement
during the continuance of any Disability of the Executive, as hereafter defined,
upon fifteen (15) days’ prior notice to the Executive during the continuance of
the Disability.
(c) Termination by the Company
Without Good Cause. The Company shall have the right to terminate the
Executive’s employment hereunder without Good Cause (as such term is defined
herein) by written notice to the Executive.
(d) Termination by the Company
for Good Cause. The Company shall have the right to terminate the
employment of the Executive for Good Cause by written notice to the Executive
specifying the particulars of the circumstances forming the basis for such Good
Cause.
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(e) Voluntary Resignation by the
Executive. The Executive shall have the right to voluntarily resign his
employment hereunder for other than Good Reason (as such term is defined herein)
by written notice to the Company.
(f) Resignation by the Executive
for Good Reason. The Executive shall have the right to terminate his
employment for Good Reason by written notice to the Company specifying the
particulars of the circumstances forming the basis for such Good
Reason.
(g) Termination Date. The
“Termination
Date” is the date as of which the Executive’s employment with the Company
terminates. Any notice of termination given pursuant to the provisions of this
Agreement shall specify the Termination Date.
(h) Certain Definitions.
For purposes of this Agreement, the following terms shall have the following
meanings:
(i)
“Disability” shall
mean an inability by the Executive to perform a substantial portion of the
Executive’s duties hereunder by reason of physical or mental incapacity or
disability for a total of one hundred twenty (120) days or more in any
consecutive period of three hundred and sixty five (365) days, as determined by
the Board in its good faith judgment.
(ii)
“Good
Cause” as used herein, shall mean (A) the commission of a felony, or a
crime involving moral turpitude, or the commission of any other act or omission
involving dishonesty, disloyalty, or fraud with respect to the Company; (B)
conduct tending to bring the Company or any of its affiliates into substantial
public disgrace or disrepute; (C) substantial and repeated failure to perform
duties as reasonably directed by the Board; (D) gross negligence or willful
misconduct with respect to the Company or any of its affiliates; or (E) any
material misrepresentation by the Executive under this Agreement; provided, however, that such
Good Cause shall not exist unless the Company shall first have provided the
Executive with written notice specifying in reasonable detail the factors
constituting such Good Cause, as applicable, and such factors shall not have
been cured by the Executive within thirty (30) days after such notice or such
longer period as may reasonably be necessary to accomplish the
cure.
(iii) “Good Reason” means
the occurrence of any of the following events:
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(A) the
assignment to the Executive of any duties inconsistent in any material respect
with the Executive’s then position (including status, offices, titles and
reporting relationships), authority, duties or responsibilities, or any other
action or actions by the Company which when taken as a whole results in a
significant diminution in the Executive’s position, authority, duties or
responsibilities, excluding for this purpose any isolated, immaterial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
(B) a
material breach by the Company of one or more provisions of this Agreement,
provided that such Good Reason shall not exist unless the Executive shall first
have provided the Company with written notice specifying in reasonable detail
the factors constituting such material breach and such material breach shall not
have been cured by the Company within thirty (30) days after such notice or such
longer period as may reasonably be necessary to accomplish the
cure;
(C) any
purported termination by the Company of the Executive’s employment otherwise
than as expressly permitted by this Agreement.
(D) A
Change in Control whereby:
(i)
A person (other than a person who is an officer or director of the
Company on the Effective Date), including a group as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended, becomes, or obtains the
right to become, the beneficial owner of the Company’s securities having fifty
one percent (51%) or more of the combined voting power of then outstanding
securities of the Company;
(ii) The
Company consummates a merger in which it is not the surviving
entity;
(iii) All
or substantially all of the Company’s assets are sold;
(iv) The
Company’s shareholders approve the dissolution or liquidation of the
Company.
8.
Obligations
of Company on Termination or Resignation. If you are terminated by the
Company without Good Cause, if you resign from the Company for Good Reason, you
will be entitled to receive as severance (a) the Base Salary for a period of
twelve months, and (b) all options granted but not yet vested shall immediately
vest and shall be exercisable.
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9.
Covenants
of the Executive.
(a)
Confidentiality.
(i)
The Executive recognizes that the Executive’s position with the Company
is one of trust and confidence. The Executive acknowledges that, the Company has
devoted substantial time and effort and resources to developing the Company’s
business and clients, and that during the course of the Executive’s employment
with the Company, the Executive will necessarily become acquainted with
confidential information relating to the clients or potential clients (including
names, addresses and telephone numbers) of the Company, and the Company’s
investments or potential investments in and/or financings and/or potential
financings to be provided to these clients or potential clients, and trade
secrets, processes, methods of operation and other information, which the
Company regards as confidential and in the nature of trade secrets
(collectively, “Confidential
Information”). The Executive acknowledges and agrees that the
Confidential Information is of incalculable value to the Company and that the
Company would suffer damage if any of the Confidential Information was
improperly disclosed.
(ii) The
Executive recognizes that because of the opportunities and support so provided
to the Executive and because of Executive’s access to the Company’s Confidential
Information, Executive would be in a unique position to divert business from the
Company and to commit irreparable damage to the Company were Executive to be
allowed to divulge any of the Confidential Information.
(iii) The
Executive covenants and agrees that the Executive will not, at any time during
or after the termination of the Executive’s relationship with the Company,
regardless of whether termination is initiated by either Executive or the
Company, reveal, divulge, or make known to any person, firm or corporation, any
Confidential Information made known to the Executive or of which the Executive
has become aware, regardless of whether developed, prepared, devised or
otherwise created in whole or in part by the efforts of the Executive, except
and to the extent that such disclosure is necessary to carry out the Executive’s
duties for the Company. The Executive further covenants and agrees that the
Executive shall retain all Confidential Information in trust for the sole
benefit of the Company, and will not divulge or deliver or show any Confidential
Information to any unauthorized person including, without limitation, any other
employer of the Executive, and the Executive will not make use thereof in an
independent business related to the business of the Company; provided, however, that the
Executive has no obligation, express or implied, to refrain from using or
disclosing to others any such knowledge or information which is or hereafter
shall become available to the public other than through disclosure by the
Executive.
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(iv) The
Executive agrees that, upon termination of the Executive’s employment with the
Company, for any reason whatsoever, or for no reason, and at any time, the
Executive shall return to the Company all papers, documents and other property
of the Company placed in the Executive’s custody or obtained by the Executive
during the course of the Executive’s employment which relate to Confidential
Information, and the Executive will not retain copies of any such papers,
documents or other property for any purpose whatsoever.
(b) Non-Competition. The
Company is in the business of processing coal, manufacturing coke and the
by-products of coke (the "Business"). Executive acknowledges that during his
employment with the Company he will become familiar with trade secrets and other
information relating to the Company and its Business, and that his services have
been and will be of special, unique and extraordinary value to the Company.
Therefore, Executive agrees that, during the Employment Period, and for one (1)
year thereafter (collectively, the “Non-Compete Period”), he will not directly
or indirectly own, manage, control, participate in, consult with, render
services for, or in any other manner engage in any business, or as an investor
in or lender to any business (in each case including, without limitation, on his
own behalf or on behalf of another entity) which competes either directly or
indirectly with the Company in the Business, in any market in which the Company
is operating, or is considering operating at any given point in time during the
Employment Period, or as of the end of the Employment Period if the Employment
Period has ended. Nothing in this Section 9(b) will be deemed to prohibit the
Executive from being a passive owner of less than 5% of the outstanding stock of
a corporation engaged in a competing business as described above of any class
which is publicly traded, so long as Executive has no direct or indirect
participation in the business of such corporation.
(c) Work Product. The
Executive agrees that all innovations, inventions, improvements, developments,
methods, designs, analyses, drawings, reports, and all similar or related
information which relate to the Company’s Business, or any business which the
Company has taken significant action to pursue, and which are conceived,
developed or made by the Executive during the Employment Period (any of the
foregoing, hereinafter “Work Product”),
belong to the Company. The Executive will promptly disclose all such Work
Product to the Board and perform all actions reasonably requested by the Board
(whether during or after the Employment Period) to establish and confirm such
ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
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(d) No Conflict. The
Executive represents and warrants to the Company that the Executive is not a
party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity or any other agreement
which would prevent or limit his ability to enter into this Agreement or perform
his obligations hereunder.
(e) Enforcement.
(i) The
Executive acknowledges that the Company will suffer substantial and irreparable
damages not readily ascertainable or compensable in terms of money in the event
of the breach of any of the Executive’s obligations under Sections 9(a) through
(d) hereof. The Executive therefore agrees that the provisions of Sections 9(a)
through (d) shall be construed as an agreement independent of the other
provisions of this Agreement and any other agreement and that the Company, in
addition to any other remedies (including damages) provided by law, shall have
the right and remedy to have such provisions specifically enforced by any court
having equity jurisdiction thereof.
(ii) If
at any time any of the provisions of this Section 9 shall be determined to be
invalid or unenforceable, by reason of being vague or unreasonable as to area,
duration or scope of activity, this Section 9 shall be considered divisible and
shall become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter, and the Executive agrees that
this Section 9 as so amended, shall be valid and binding as though any invalid
or unenforceable provision had not been included herein.
(iii) The
Executive agrees to cooperate with the Company, during the Employment Period and
thereafter (including following the Executive’s termination of employment for
any reason), by making himself reasonably available to testify on behalf of the
Company or any of its affiliates in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, and to assist the Company, or
any affiliate, in any such action, suit, or proceeding, by providing information
and meeting and consulting with the Company’s Board or its representatives or
counsel, or representatives or counsel to the Company, or any affiliate as
reasonably requested; provided, however, that the
same does not materially interfere with his then current professional activities
and is not contrary to the best interests of the Executive. The Company agrees
to reimburse the Executive, on an after-tax basis, for all expenses actually
incurred in connection with his provision of testimony or
assistance.
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10. Indemnification. To the fullest extent
permitted by law, including the Colorado Business Corporation Act and other
relevant statutes, the Company will indemnify and hold harmless Executive
against any actual action, suit or proceeding, whether civil, criminal, or
administrative, arising by reason of Executive’s status as a director, officer,
employee and/or agent of the Company or any of its affiliates during Executive’s
employment or Executive’s status, if any, as a trustee or other fiduciary of any
employee benefit plan sponsored by the Company or its affiliates. In addition,
to the fullest extent permitted by law, the Company will pay or reimburse
Executive for any costs and expenses, including reasonable attorney’s fees,
Executive incurs arising from any claim as to which the Company is providing
indemnification hereunder.
11. Insurance. The Company may, for its own
benefit, in it sole discretion, maintain “key-man” life and disability insurance
policies covering the Executive. The Executive shall cooperate with the Company
and provide such information or other assistance as the Company may reasonably
request in connection with the Company’s obtaining and maintaining such
policies.
12. Severability.
Should any provision of this Agreement be held, by a court of competent
jurisdiction, to be invalid or unenforceable, such invalidity or
unenforceability shall not render the entire Agreement invalid or unenforceable,
and this Agreement and each other provision hereof shall be enforceable and
valid to the fullest extent permitted by law.
13. Successors
and Assigns.
(a) This
Agreement and all rights under this Agreement are personal to the Executive and
shall not be assignable other than by will or the laws of descent. All of the
Executive’s rights under the Agreement shall inure to the benefit of his heirs,
personal representatives, designees or other legal representatives, as the case
may be.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. Any entity succeeding to the business of the Company by
merger, purchase, consolidation or otherwise shall assume by contract or
operation of law the obligations of the Company under this
Agreement.
14. Governing
Law. This Agreement shall be construed in accordance with and governed by
the laws of the State of Delaware, without regard to the conflicts of laws rules
thereof.
15. Arbitration.
Any controversy or claim arising out of or relating to this Agreement or the
breach hereof shall be settled by Arbitration by and in accordance with the
Commercial Rules of the American Arbitration Association then in effect in
accordance with the laws of the State of Delaware, and the judgment upon any
award rendered by the arbitrator or arbitrators may be entered in any court
having competent jurisdiction thereof. The award of the Arbitrator shall be
final, non-appealable and binding upon the parties hereto and their respective
successors and permitted assigns
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16. Notices.
All notices, requests and demands given to or made upon the respective parties
hereto shall be deemed to have been given or made three business days after the
date of mailing when mailed by registered or certified mail, postage prepaid, or
on the date of delivery if delivered by hand, or one business day after the date
of delivery by Federal Express or other reputable overnight delivery service,
addressed to the parties at their addresses as disclosed in the public
disclosure of the Company, or to such other addresses furnished by notice given
in accordance with this Section 16.
17. Complete
Understanding. Except as expressly provided below, this Agreement
supersedes any prior contracts, understandings, discussions and agreements
relating to employment between the Executive and the Company and constitutes the
complete understanding between the parties with respect to the subject matter
hereof. No statement, representation, warranty or covenant has been made by
either party with respect to the subject matter hereof except as expressly set
forth herein.
18. Modification;
Waiver.
(a) This
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by the Company and the
Executive or in the case of a waiver, by the party against whom the waiver is to
be effective. Any such waiver shall be effective only to the extent specifically
set forth in such writing.
(b) No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
19. Headings
and Word Meanings. Headings and titles in this
Agreement are for convenience of reference only and shall not control the
construction or interpretation of any provisions hereof. The words “herein,”
“hereof,” “hereunder” and words of similar import, when used anywhere in this
Agreement, refer to this Agreement as a whole and not merely to a subdivision in
which such words appear, unless the context otherwise requires. The singular
shall include the plural unless the context otherwise requires.
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20. Counterparts.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by the other party
hereto.
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IN WITNESS WHEREOF, the Company has caused this
Agreement to be duly executed in its corporate name by one of its officers duly
authorized to enter into and execute this Agreement, and the Executive has
manually signed his name hereto, all as of the day and year first above
written.
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By:
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Name:
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Title:
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(Signature): /s/ Wang
Feng
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