EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10-a
This
EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is
entered into as of January 13, 2010 by and between China Aoxing
Pharmaceutical Company, Inc, a company incorporated under the laws of the
Florida (the “Company”), and
Mr. Zhenjiang Yue, an individual (the “Executive”) and
effective on the Effective Date (as hereinafter defined). The term “Company” as
used herein with respect to all obligations of the Executive hereunder shall be
deemed to include the Company and all of its direct or indirect parent
companies, subsidiaries, affiliates, or subsidiaries or affiliates of its parent
companies (collectively, the “Company”).
RECITALS
A. The
Company desires to employ the Executive and to assure itself of the services of
the Executive during the term of Employment (as defined below).
B. The
Executive desires to be employed by the Company during the term of Employment
and under the terms and conditions of this Agreement.
AGREEMENT
The
parties hereto agree as follows:
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1.
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POSITION
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The
Executive hereby accepts a position of Chief Executive Officer (the “Employment”) of the
Company.
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2.
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TERM
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Subject
to the terms and conditions of this Agreement, the initial term of the
Employment shall be three years, commencing on January 13, 2010 (the “Effective Date”),
until January 13, 2013, unless terminated earlier pursuant to the terms of
this Agreement. Upon expiration of the initial three-year term, the Employment
shall be automatically extended for successive one-year terms unless either
party gives the other party hereto written notice to terminate the Employment no
less than 60 days, and no more than 120 days, prior to the expiration
of such one-year term or unless terminated earlier pursuant to the terms of this
Agreement.
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3.
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DUTIES
AND RESPONSIBILITIES
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The
Executive’s duties at the Company will include all jobs assigned by the Board of
Directors of the Company (the “Board”). The
Executive will report directly to the Board.
The
Executive shall devote all of his working time, attention and skills to the
performance of his duties at the Company and shall faithfully and diligently
serve the Company in accordance with this Agreement and the guidelines, policies
and procedures of the Company approved from time to time by the
Company.
The
Executive shall use his best efforts to perform his duties hereunder. The
Executive shall not, without the prior written consent of the Company, become an
employee or consultant of any entity other than the Company and/or any member of
the Company , and shall not carry on or be interested in the business or entity
that competes with that carried on by the Company (any such business
or entity, a “Competitor”),
provided that nothing in this clause shall preclude the Executive from holding
any shares or other securities of any Competitor that is listed on any
securities exchange or recognized securities market anywhere.
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4.
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NO
BREACH OF CONTRACT
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The
Executive hereby represents to the Company that: (i) the execution and
delivery of this Agreement by the Executive and the performance by the Executive
of the Executive’s duties hereunder shall not constitute a breach of, or
otherwise contravene, the terms of any other agreement or policy to which the
Executive is a party or otherwise bound, except for agreements that are required
to be entered into by and between the Executive and any member of the
Company pursuant to applicable law of the jurisdiction where the
Executive is based, if any; (ii) that the Executive has no information
(including, without limitation, confidential information and trade secrets)
relating to any other person or entity which would prevent, or be violated by,
the Executive entering into this Agreement or carrying out his duties hereunder;
(iii) that the Executive is not bound by any confidentiality, trade secret
or similar agreement (other than this) with any other person or entity except
for other member(s) of the Company , as the case may be.
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5.
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LOCATION
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The
Executive will be based in the United States of America or China, on a full time
basis. The executive may be required to work in other regions on temporary
basis.
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6.
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COMPENSATION
AND BENEFITS
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(a)
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Cash
Compensation. The Executive’s cash compensation shall be provided
by the Company pursuant to Schedule A-1
hereto, subject to annual review and adjustment by the
Board.
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(b)
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Equity Incentives.
The Executive will be eligible to participate in any of the
Company’s equity incentive plans as determined by the Board. Subject to
approval by the Company’s Board of Directors and the execution of an
equity award agreement which will govern the terms and conditions
contained in a stock option agreement to be entered into by you and the
Company prior to the grant, you will receive the equity award listed on
Schedule A-2
(the “Initial Grant”). Following a Company Change of Control Transaction
(as hereinafter defined), all unvested options under the Initial Grant
shall vest upon the closing of the Change of Control
Transaction.
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(c)
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Benefits. The
Executive is eligible for participation in any standard employee benefit
plan of the Company, including any health insurance plan and annual
holiday plan.
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(d)
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Certain
Definitions. For purposes of this Agreement, a Change of Control
Transaction shall mean (a) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions) of all or
substantially all of the assets of the Company other than to a Company
Affiliate; (b) any consolidation or merger or other business
combination of the Company with any other entity, other than a Company
Affiliate, where the shareholders of the Company, immediately prior to the
consolidation or merger or other business combination would not,
immediately after the consolidation or merger or other business
combination, beneficially own, directly or indirectly, shares representing
fifty percent (50%) of the combined voting power of all of the outstanding
securities of the entity issuing cash or securities in the consolidation
or merger or other business combination (or its ultimate parent
corporation, if any); or (c) the Board of the Company adopts a
resolution to the effect that a “Change In Control” has occurred for
purposes of this Agreement.
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7.
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TERMINATION
OF THE AGREEMENT
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(a)
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By the Company with
cause. The Company may terminate the Executive’s Employment for
cause, at any time, without advance notice or remuneration, if
(1) the Executive is convicted or pleads guilty to a felony or to an
act of fraud, misappropriation or embezzlement, (2) the Executive has
been grossly negligent or acted dishonestly to the detriment of the
Company, (3) the Executive has engaged in actions amounting to gross
misconduct or failed to perform his duties hereunder and such failure
continues after the Executive is afforded a reasonable opportunity to cure
such failure, (4) the Executive has died, or (5) the Executive
has a disability which shall mean a physical or mental impairment which,
as reasonably determined by the Board, renders the Executive unable to
perform the essential functions of his employment with the Company, even
with reasonable accommodation that does not impose an undue hardship on
the Company, for more than 180 days in any 12-month period, unless a
longer period is required by applicable law, in which case that longer
period would apply.
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(b)
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By the Company without
cause. The Company may terminate the Executive’s Employment without
cause, at any time, upon one-month prior written notice to the Executive
during the first year after the Effective Date, or two-month prior written
notice to the Executive during any period after the first anniversary of
the Effective Date.
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(c)
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By the Executive for
Good Reason. If there is a material and substantial reduction in
the Executive’s existing authority and responsibilities and such
resignation is approved by the Board, the Executive may resign upon
one-month prior written notice to the Company during the first year after
the Effective Date, or two-month prior written notice to the Company
during any period after the first anniversary of the Effective
Date.
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(d)
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Notice of
Termination. Any termination of the Executive’s employment under
this Agreement shall be communicated by written notice of termination from
the terminating party to the other party. The notice of termination shall
indicate the specific provision(s) of this Agreement relied upon in
effecting the termination.
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(e)
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Remuneration upon
Termination. Upon the Company’s termination of the Employment
without cause pursuant to Section 7(b) above or the Executive’s
resignation upon the Board’s approval pursuant to Section 7(c) above and
upon the execution of a general release agreement in a form reasonably
acceptable to the Company, the Company will provide remuneration to the
Executive as follows: (1) if such termination or resignation becomes
effective during the first year after the Effective Date, the Company will
provide the Executive with a severance pay equal to three months base
salary of the Executive; (2) if such termination or resignation
becomes effective during any period after the first anniversary of the
Effective Date, the Company will provide the Executive with a severance
pay equal to six months base salary of the Executive; and (3) the
Company will vest any equity award plan of the Initial Grant that would
have vested during the applicable severance period. Any
payments made pursuant to Section 7(e)(1) or Section 7(e)(2)
shall be paid in accordance with the Company’s normal payroll cycles in
effect on the termination or resignation
date.
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(f)
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Termination by
Executive for No Reason. The Executive may terminate his Employment
for any reason, at any time, upon 90 days prior written notice to the
Company.
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8.
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CONFIDENTIALITY
AND NONDISCLOSURE
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(a)
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Confidentiality and
Non-disclosure. In the course of the Executive’s services, the
Executive may have access to the Company and/or the Company’s client’s
and/or prospective client’s trade secrets and confidential information,
including but not limited to those embodied in memoranda, manuals, letters
or other documents, computer disks, tapes or other information storage
devices, hardware, or other media or vehicles, pertaining to the Company
and/or the Company’s client’s and/or prospective client’s business. All
such trade secrets and confidential information are considered
confidential. All materials containing any such trade secret and
confidential information are the property of the Company and/or the
Company’s client and/or prospective client, and shall be returned to the
Company and/or the Company’s client and/or prospective client upon
expiration or earlier termination of this Agreement. The Executive shall
not directly or indirectly disclose or use any such trade secret or
confidential information, except as required in the performance of the
Executive’s duties in connection with the Employment, or pursuant to
applicable law.
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(b)
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Trade Secrets.
During and after the Employment, the Executive shall hold the Trade
Secrets in strict confidence; the Executive shall not disclose these Trade
Secrets to anyone except other employees of the Company who have a need to
know the Trade Secrets in connection with the Company’s business. The
Executive shall not use the Trade Secrets other than for the benefits of
the Company.
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“Trade Secrets” means
information deemed confidential by the Company, treated by the Company or which
the Executive know or ought reasonably to have known to be confidential, and
trade secrets, including without limitation designs, processes, pricing
policies, methods, inventions, conceptions, technology, technical data,
financial information, corporate structure and know-how, relating to the
business and affairs of the Company and its subsidiaries, affiliates and
business associates, whether embodied in memoranda, manuals, letters or other
documents, computer disks, tapes or other information storage devices, hardware,
or other media or vehicles. Trade Secrets do not include information generally
known or released to public domain through no fault of the
Executive.
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(c)
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Former Employer
Information. The Executive agrees that he has not and will not,
during the term of his employment improperly use or disclose any
proprietary information or trade secrets of any former employer, unless
the former employer has been acquired by the Company, or other person or
entity with which the Executive has an agreement to keep in confidence
information acquired by Executive, if any. The Executive will indemnify
the Company and hold it harmless from and against all claims, liabilities,
damages and expenses, including reasonable attorneys’ fees and costs of
suit, arising out of or in connection with any violation of the
foregoing.
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(d)
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Third Party
Information. The Executive recognizes that the Company may have
received, and in the future may receive, from third parties their
confidential or proprietary information subject to a duty on the Company’s
part to maintain the confidentiality of such information and to use it
only for certain limited purposes. The Executive agrees that the Executive
owes the Company and such third parties, during the Executive’s employment
by the Company and thereafter, a duty to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it
to any person or firm and to use it in a manner consistent with, and for
the limited purposes permitted by, the Company’s agreement with such third
party.
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This
Section 8 shall survive the termination of this Agreement for any reason.
In the event the Executive breaches this Section 8, the Company shall have
right to seek any and all remedies at law or in equity.
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9.
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NON-COMPETITION
AND NON-SOLICITATION
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(a) In
consideration of the base salary provided to the Executive by the Company
hereunder, the adequacy of which is hereby acknowledged by the parties hereto,
the Executive agrees that during the term of the Employment and for a period of
one year following the termination of the Employment for whatever
reason:
(i) The
Executive will not approach clients, customers or contacts of the Company or
other persons or entities introduced to the Executive in the Executive’s
capacity as a representative of the Company for the purposes of doing business
with such persons or entities which will harm the business relationship between
the Company and such persons and/or entities;
(ii) unless
expressly consented to by the Company, the Executive will not seek directly or
indirectly, by the offer of alternative employment or other inducement
whatsoever, to solicit the services of any employee of the Company employed as
at or after the date of such termination, or in the year preceding such
termination.
(b) In
consideration of the base salary provided to the Executive by the Company
hereunder, the adequacy of which is hereby acknowledged by the parties hereto,
the Executive agrees that during the term of the Employment and for a period of
one year thereafter (except in the event of a Termination by the Company without
cause pursuant to Section 7(b) or in the event of a Termination by the Executive
for Good Reason pursuant to Section 7(c)), following the termination of the
Employment for whatever reason, unless expressly consented to by the Company,
the Executive will not assume employment with or provide services for any
Competitor, or engage, whether as principal, partner, licensor or otherwise, in
any Competitor.
(c) In
consideration of the base salary provided to the Executive by the Company
hereunder, the adequacy of which is hereby acknowledged by the parties hereto,
the Executive agrees that in the event of a Termination by the Company without
cause pursuant to Section 7(b) or in the event of a Termination by the Executive
for Good Reason pursuant to Section 7(c), then during the term of the
Employment and for the period of the duration of the severance pay described in
Section 7(e)(1) or Section 7(e)(2), as appropriate, unless expressly
consented to by the Company, the Executive will not assume employment with or
provide services for any Competitor, or engage, whether as principal, partner,
licensor or otherwise, in any Competitor.
The
provisions contained in this Section 9 are considered reasonable by the
Executive and the Company. In the event that any such provisions should be found
to be void under applicable laws but would be valid if some part thereof was
deleted or the period or area of application reduced, such provisions shall
apply with such modification as may be necessary to make them valid and
effective.
This
Section 9 shall survive the termination of this Agreement for any reason.
In the event the Executive breaches this Section 9, the Executive
acknowledges that there will be no adequate remedy at law, and the Company shall
be entitled to injunctive relief and/or a decree for specific performance, and
such other relief as may be proper (including monetary damages if appropriate).
In any event, the Company shall have right to seek any and all remedies
permissible at law or in equity.
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10.
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ASSIGNMENT
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This
Agreement is personal in its nature and neither of the parties hereto shall,
without the consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder; provided, however, that (i) the Company
may assign or transfer this Agreement or any rights or obligations hereunder to
any member of the Company without such consent, and (ii) in the
event of a Change-of-Control Transaction of the Company, this Agreement shall,
subject to the provisions hereof, be binding upon and inure to the benefit of
such successor and such successor shall discharge and perform all the promises,
covenants, duties, and obligations of the Company hereunder.
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11.
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SEVERABILITY
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If any
provision of this Agreement or the application thereof is held invalid, the
invalidity shall not affect other provisions or applications of this Agreement
which can be given effect without the invalid provisions or applications and to
this end the provisions of this Agreement are declared to be
severable.
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12.
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GOVERNING
LAW
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This
Agreement shall be governed by and construed in accordance with the law of the
State of Florida, U.S.A.
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13.
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AMENDMENT
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This
Agreement may not be amended, modified or changed (in whole or in part), except
by a formal, definitive written agreement expressly referring to this Agreement,
which agreement is executed by both of the parties hereto.
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14.
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WAIVER
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Neither
the failure nor any delay on the part of a party to exercise any right, remedy,
power or privilege under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any right, remedy,
power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver shall
be effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
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15.
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NOTICES
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All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given
and made if (i) delivered by hand, (ii) otherwise delivered against receipt
therefor, or (iii) sent by a recognized courier with next-day or second-day
delivery to the last known address of the other party.
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16.
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COUNTERPARTS
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This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original as against any party whose signature appears thereon, and all
of which together shall constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories. Photographic copies of such signed counterparts may be used in
lieu of the originals for any purpose.
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17.
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NO
INTERPRETATION AGAINST DRAFTER
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Each
party recognizes that this Agreement is a legally binding contract and
acknowledges that such party has had the opportunity to consult with legal
counsel of choice. In any construction of the terms of this Agreement, the same
shall not be construed against either party on the basis of that party being the
drafter of such terms.
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18.
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LANGUAGE
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This
Agreement is prepared and executed in English.
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first written
above.
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CHINA
AOXING PHARMACEUTICAL COMPANY, INC
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/s/ Zhenjiang
Yue
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/s/ Xxxx
X’Xxxx
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Zhenjiang
Yue
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Xxxx
X’Xxxx
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/s/ Min
Jun
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/s/ Xxxxxx
Xxxxxxxx
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/s/ Guozhu
Xx
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Xxx
Jun
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Xxxxxx
Xxxxxxxx
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Xxxxxx
Xx
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Schedule A-1
Cash Compensation
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Amount
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Pay
Period
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Base
Salary
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1,000,000
RMB annually, subject to applicable
withholding
and other taxes.
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Payable
in 12 equal
monthly
installments
for
each
calendar year
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Bonus
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Discretionary
as approved by the Board of Directors.
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As
determined by
the
Board of
Directors
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Schedule A-2
Initial Equity
Award
Subject
to the approval of the Company’s Board of Directors, the Executive is eligible
to receive equity based award in the form of restricted common stock, stock
option or other securities by the Company from time to time.
