EMPLOYMENT AGREEMENT
Exhibit
10.16
THIS
EMPLOYMENT AGREEMENT
(this
"Agreement")
is
entered into as of the 19th
day of
August, 2008, by and between Nanchang
Best Animal Husbandry Co., Ltd.,
a
corporation organized under the laws of the People's Republic of China (the
"Company"),
and
Xxxxxx
Xxxxxxxxx (the
"Executive").
WHEREAS,
the Company desires to set forth the nature and terms upon which the Company
will employ Executive, including the amount of compensation and other benefits
to be provided to Executive and any of the rights of the Executive in the event
of the Executive's termination of employment with the Company. The Executive
is
willing to commit to serve the Company on the terms and conditions herein
provided.
NOW,
THEREFORE, in consideration of the promises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Employment.
The
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to serve the Company, on the terms and conditions set forth herein. So long
as
Executive is employed by the Company, Executive shall devote such business
time
and energy to the business of the Company as the Company reasonably determines.
The Executive shall spend no less than five (5) months per annum in the People's
Republic of China ("PRC") on behalf of the Company, unless the Chairman and
Chief Executive Officer of AgFeed Industries, Inc. ("AgFeed") otherwise agree
that the Executive may spend less time in the PRC.
3. Position
and Duties.
Subject
to the ultimate control of the Company, the Executive shall serve as the Chief
Operating Officer of the Company and its parent, AgFeed, and shall handle such
responsibilities and duties as are normally associated with this position and
as
may be delegated by the Chief Executive Officer and Chairman of AgFeed from
time
to time, including, but not limited to: (i) providing operational and strategic
development guidance to the Company and its affiliates, including its parent,
AgFeed; (ii) growing and increasing the profitability of AgFeed's hog production
and breeding business; and (iii) communicating with investors, possible
strategic partners, financial advisors and other professionals regarding
AgFeed's business. The Executive shall report directly to the Chief Executive
Officer and Chairman of AgFeed.
(b) Payment
of Base Salary.
The
base salary (as determined in accordance with Section 4(a)) shall be to the
Executive in immediately available funds by wire transfer as directed by the
Executive no less frequently than monthly in arrears.
(c) Bonuses.
The
Executive shall be eligible for and may receive bonuses. The amount, if any,
and
timing of any bonuses, shall be solely within the discretion of the
Company.
(d) Expenses.
During
the Term, the Executive shall be entitled to receive prompt reimbursement for
all pre-approved expenses incurred by the Executive in performing services
hereunder, including all expenses of travel and living while away from the
Executive's home in the United States of America, on business at the request
of
and in the service of the Company, provided that such expenses are incurred
and
accounted for in accordance with the policies and procedures established by
the
Company. The Executive understands and agrees that he shall be reimbursed for
domestic and international travel only to the cost of coach class flight
tickets.
(e) Benefits.
The
Company shall not be required to provide the Executive with any health and
welfare benefits.
(f) Vacation.
The
Executive will be entitled to receive two (2) weeks vacation per year and shall
be entitled to receive the same paid holidays as are observed by all of the
members of AgFeed's senior management team.
(g) Stock
Options.
On the
Effective Date, subject to appropriate approvals, including approval of the
Compensation Committee of AgFeed's Board of Directors, the Executive shall
be
granted a stock option (the “Option”)
to
acquire 100,000 shares of the Company's common stock, par value $0.001 per
share, under the Company's 2008 Long-Term Incentive Plan (the "Plan"). The
Option will be subject to the terms and conditions set forth in the Plan,
including but not limited to, determination of the exercise price of the Option
and the expiration date of the Option. Unless otherwise expressed herein, the
Option will vest in two installments: 66,667 shares vesting on the second
anniversary and 33,333 shares vesting on the third anniversary of the date
of
the grant provided that the Executive is employed by the Company on such vesting
dates. In the event that the Executive ceased to be employed by the Company
or
AgFeed prior to the initial vesting date, the Option shall be forfeited and
deemed void and of no effect.
5. Directors
and Officers Liability Insurance. During the term of this Agreement, AgFeed
shall have in force and effect (at its own cost) Directors and Officers
Liability Insurance, with coverage in such amounts as may be deemed appropriate
by AgFeed’s Board of Directors. The Executive shall be a covered employee under
such insurance.
6. Termination.
(a) The
Executive's employment under this Agreement may be terminated by the Executive
or the Company at any time, with or without Cause (as defined
below).
(b) In
the
event of termination by the Company without Cause, or in the event of the
Executive's death or disability or a Constructive Termination (as defined
below), the Company shall pay the Executive a lump sum severance amount equal
to:
(i) $36,000,
if such termination or Constructive Termination occurs on or before the first
anniversary of the Effective Date;
(ii) $60,000,
if such termination or Constructive Termination occurs after the first
anniversary but on or before the second anniversary of the Effective Date;
or
(iii) $100,000,
if such termination or Constructive Termination occurs on or after the second
anniversary of the Effective Date.
In
the
event of termination by the Company with Cause, or if the Executive voluntarily
terminates his employment, then the Executive shall not be entitled to the
severance payment described in Section 6(b).
(c) In
the
event of termination by the Company without Cause, or in the event of the
Executive's death or disability or a Constructive Termination, any options
granted to the Executive (including the Option) shall vest immediately and
may
be exercised in full or in part within one (1) year from the date of
termination, the Executive's death or disability, or Constructive Termination.
The effect of any other termination of the Executive's employment on options
granted to the Executive shall be the immediate cancellation and forfeiture
of
any unexercised portion of the Option (whether or not vested).
(d) For
the
purposes of this Agreement, "Cause" shall mean (1) a refusal, failure, or
inability to perform any reasonable assigned duties; (2) a material breach
or
violation of this Agreement; (3) conduct
by the Executive that constitutes gross negligence or wilful
misconduct;
(4)
material failure to follow AgFeed's or the Company's policies, directives,
or
orders applicable to AgFeed or Company employees holding comparable positions;
(5) intentional destruction or theft of AgFeed or Company property or
falsifications of AgFeed or Company documents; (6) conviction of a felony or
any
crime involving moral turpitude or a misdemeanor where imprisonment in excess
of
fifteen (15) days is imposed; or (7) violation of AgFeed's Code of Conduct.
(e) For
the
purposes of this Agreement, "Constructive Termination" shall mean: (1) material
reduction by the Company of the scope of the Executive's duties for forty (40)
consecutive Business Days, (2) a material reduction in the Executive's base
salary, or (3) the continued assignment to the Executive of any duties
materially inconsistent with the level of his position with the Company;
provided that none of the foregoing events shall be deemed to result in a
Constructive Termination if the Executive consents to such events or if such
events are the result of actions of the Company or its Board of Directors that
are applicable to all officers of the Company.
(f) The
Company may extend the Term of this Agreement for successive two year terms
so
long as the Company provides the Executive at least sixty (60) calendar days
advance written notice prior to the expiration of the Term.
(g) A
“Business
Day”
means
any day other than (1) a Saturday, Sunday or legal holiday, or (2) a day on
which commercial banks in Beijing, PRC are authorized or required by law to
close.
7. Confidential
Information. In the course of the Executive’s employment with the Company, the
Executive may become aware of confidential information including, without
limitation, computer system and software designs, customer lists, market
research, strategic plans, and other non-public or similar information that
relates to the business of AgFeed, the Company and their affiliates, investors,
business partners, customers and/or clients. The Executive will not use or
disclose any such confidential information of AgFeed, the Company and their
affiliates, investors, business partners, customers or clients except in the
course of his duties to AgFeed or the Company or unless ordered to do so by
a
court of competent jurisdiction (in which latter case the Executive will
promptly inform AgFeed or the Company of such order). The Executive will comply
with AgFeed’s or the Company's policies and procedures for the protection of
confidential information. Further, the Executive’s obligation not to disclose or
use such confidential information will continue after the termination of the
Executive’s employment for whatever reason. Confidential information excludes
any information which was not obtained from AgFeed or the Company (or a
director, officer, employee or agent of AgFeed or the Company) or which is
or
becomes known by the public or in AgFeed’s or the Company's industry other than
by a breach by the Executive of a confidentiality obligation to AgFeed and
the
Company.
8. Non-Solicitation
and Non-Compete
(a) The
Company and the Executive agree that until the Termination Date, the Executive
shall devote substantially all of his working time to the business and affairs
of AgFeed and the Company.
(b) The
Executive agrees that for a period of twelve (12) months following the date
of
termination of the Executive’s employment with the Company for any reason (the
“Termination
Date”),
the
Executive will not, and will not assist anyone else to, directly or indirectly
solicit or induce any of AgFeed or the Company’s employees to terminate their
employment with AgFeed or the Company or divert, interfere with or take away
from AgFeed or the Company any person, company or entity which, within the
six
month period immediately preceding the Termination Date, was an investor,
customer, client, supplier, business partner, prime contractor, subcontractor,
employee or independent contractor of AgFeed or the Company.
(c) From
the
Termination Date and for a period of twelve (12) months thereafter, the
Executive agrees that he will not, directly or indirectly, as an equity owner,
director, employee, consultant, lender, agent or in any other capacity, (1)
engage or participate in, or have any interest in any corporation, entity or
other person that engages or participates in any actual, contemplated, or
proposed business or activity engaged or participated in by AgFeed or the
Company or their subsidiaries on the Termination Date, or (2) engage or
participate in, or have an interest in any corporation, entity or other person
that participates in a merger, acquisition or consolidation with AgFeed or
the
Company or any of their subsidiaries.
(d) For
purposes of Section 8(c), the Executive will be deemed directly or indirectly
to
be engaged or participating in the operation of such a business or activity,
or
to have an interest in a corporation, entity or other person, if he is a
proprietor, partner, joint venturer, shareholder, director, officer, lender,
manager, employee, consultant, advisor or agent or if he, directly or indirectly
(including as a member of a group), controls all or any part thereof; provided,
that nothing in Section 8(c) shall prohibit the Executive from holding less
than
five percent (5%) of a class of an entity's outstanding securities that are
listed on a national securities exchange or traded in the over-the-counter
market.
9. Strategic
Advisory Consultant. Notwithstanding anything to the contrary contained herein,
the Company and the Executive agree that the Executive shall not be prohibited
from accepting a position as a strategic advisory consultant with M2P2, LLC,
a
Delaware limited liability company headquartered in Iowa ("M2P2"), which is
engaged in the pork production industry, whether during or following the
expiration of the Term of this Agreement. The Company understands and
acknowledges that, in connection with such strategic advisory position, the
Executive may become aware of confidential information relating to M2P2 or
be
subject to an obligation of confidentiality. The Executive is under no
obligation to disclose any such confidential information of M2P2 to the Company,
AgFeed or any of their affiliates, officers, directors, consultants or advisors.
10. Binding
Agreement. This Agreement and all rights of the Executive hereunder shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributes,
devisees and legatees. If the Executive should die while any amounts would
still
be payable to the Executive hereunder if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Executive's devisee, legatee, or other
designee or, if there be no such designee, to the Executive's estate. This
Agreement and all rights of the Company hereunder shall inure to the benefit
of
and be enforceable to the Company, and its successors and assigns.
11. Notice.
For the purposes of this Agreement, notices, demands and all other
communications provided for in the Agreement shall be in writing and shall
be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed, in the case of the Company, to its principal office, and,
in
the case of the Executive, to the Executive's address as shown on the Company's
records or to such other address as any party may have furnished to the other
in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
12. Prior
Agreements. All prior agreements between the Company and the Executive with
respect to the employment of the Executive are hereby superseded and terminated
effective as of the date hereof and shall be without further force or effect.
13. Miscellaneous.
No provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in a writing signed by
the
Executive and a duly authorized officer of the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by
such other party shall be deemed a waiver of similar or dissimilar provisions
or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
14. Governing
Law/Venue. This Agreement shall be governed by and construed under the laws
of
the PRC, without regard to that country's conflicts of laws principles.
15. Validity.
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
16. Severability;
Headings. If any portion of this Agreement is held invalid or inoperative,
the
other portions of this Agreement shall be deemed valid and operative and, so
far
as is reasonable and possible, effect shall be given to the intent manifested
by
the portion held invalid or inoperative. The paragraph headings herein are
for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent of intent of the Agreement or of any part
hereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF,
the
parties have executed this Employment Agreement on the date and year first
above
written.
COMPANY:
NANCHANG
BEST ANIMAL HUSBANDRY CO., LTD.,
By: /s/
Songyan Li
Name:
Songyan Li
Title:
Chairman
EXECUTIVE:
/s/
Xxxxxx Xxxxxxxxx
XXXXXX
XXXXXXXXX
