EXHIBIT 10.1
CHANGHAI CHEN EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into June 24th, 2009
(the "Effective Date"), by and between China Wi-Max Communications, Inc., a
Nevada corporation (the "Company") and Mr. Changhai Chen (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to employ the Executive and secure the services of
the Executive subject to the contractual terms and conditions set forth herein;
and
WHEREAS, the Executive is willing to enter into this Agreement upon the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
herein, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to accept such employment with the Company, all upon the
terms and conditions set forth herein.
2. Term of Employment. Subject to the terms and conditions of this Agreement,
the Executive shall be employed year to year commencing on the Effective Date
and ending each and every one year anniversary (the "Term") unless sooner
terminated as provided for herein. The Term shall renew automatically for an
additional one (1) year period of time, unless either party gives written notice
no less than sixty (60) days prior to the expiration of the Term that the one
party does not intend to extend the Term.
3. Duties and Responsibilities.
A. Capacity. During the Term, the Executive shall serve in the capacity
of Managing Director of Yuan Shan Da Chaun (Company "B") and Yuan Shan
Shi Dai Technology Development Company (Company "D"), each a
wholly-owned foreign entity ("WOFE") of the Company, subject to the
supervision of the President and CEO, or other senior executive
officer of the Company as directed by the Board.
B. Full-Time Duties. During the Term, and excluding any periods of
disability, vacation or sick leave to which the Executive is entitled,
the Executive shall devote substantially all of his business time,
attention and energies to the business of the Company and its WOFEs.
During the Term, it shall not be a violation of this Agreement for the
Executive to (i) serve on corporate, civic or charitable boards or
committees, including continuing to fulfill his commitment to one or
more "clubs" with which Executive is currently involved in; (ii)
deliver lectures or fulfill speaking engagements and (iii) manage
personal investments, so long as such activities do not materially
interfere with the performance of the Executive's responsibilities as
an employee of the Company in accordance with this Agreement. C.
Standard of Performance. The Executive will perform his duties under
this Agreement with fidelity and loyalty, to the best of his ability,
experience and talent and in a manner consistent with his duties and
responsibilities.
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4. Compensation.
A. Base Pay. The Company shall pay the Executive a salary (the "Base
Salary") of $5000 USD per month, prorated for partial months of
employment. The Base Salary shall be payable in accordance with the
general payroll practices of the Company in effect from time to time.
During the remainder of the Term, the Base Salary shall be reviewed at
least annually by the President and CEO (or Board) after consultation
with the Executive and may from time to time be increased (but not
decreased without the Executive's consent) as solely determined by the
President and CEO. Effective as of the date of any such increase, the
Base Salary as so increased shall be considered the new Base Salary
for all purposes of this Agreement
B. Annual Performance Bonus. The Executive shall be eligible for annual
discretionary bonus awards payable in cash, options and/or common
stock of the Company, as so determined solely by the Board, based on
performance objectives submitted annually by senior management and
approved by the Board.
C. Long-Term Incentives. Upon the execution of this Agreement, the
Company agrees to issue the Executive the initial grant of stock and
option award set forth on the term sheet attached hereto as Exhibit A,
and incorporated herein by reference. Following the initial grant
and/or option award, the Executive shall be eligible for grants of
stock options, restricted stock and/or other long-term incentives, in
the sole discretion of the Board.
D. Benefits. If, and to the extent that, the Company maintains employee
benefit plans for other employees primarily based in China (including,
but not limited to, pension, profit-sharing, disability, accident,
medical, life insurance, and hospitalization plans) (it being
understood that the Company may but shall not be obligated to do so)
then (1) the Executive shall be entitled to participate therein in
accordance with the Company's regular practices with respect to
similarly situated senior executives. (2) The Executive shall be
entitled to prompt, normally 15 days or less from receipt of approved
expenses incurred by him in the course of the performance of his
duties hereunder, upon the submission of appropriate documentation in
accordance with the practices, policies and procedures applicable to
other senior executives of the Company. (3) The Executive shall be
entitled to such vacation, holidays and other paid or unpaid leaves of
absence as are consistent with the Company's normal policies available
to other senior executives of the Company or as are otherwise approved
by the Board. Notwithstanding the foregoing, vacation will be up to
three weeks per year, accrued monthly, beginning on the first
anniversary of the Effective Date.
5. Termination of Employment. Notwithstanding the provisions of Section 2
hereof, the Executive's employment hereunder shall terminate under any of the
following conditions:
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A. Death. The Executive's employment under this Agreement shall terminate
automatically upon his death.
B. Total Disability. The Company shall have the right to terminate this
Agreement if the Executive becomes Totally Disabled. For purposes of
this Agreement, "Totally Disabled" means that the Executive is not
working and is currently unable to perform the substantial and
material duties of his position hereunder as a result of sickness,
accident or bodily injury that lasts for a period of two calendar
weeks or more. Prior to a determination that Executive is Totally
Disabled (which shall be made in the sole discretion of the Company),
but after Executive has exhausted all sick leave and vacation benefits
provided by the Company, if any, Executive shall continue to receive
his Base Salary, offset by any disability benefits he may be eligible
to receive, conditioned on the execution by the Executive or the
Executive's representative of a release of all employment-related
claims; provided, however, that such release shall be contingent upon
the Company's satisfaction of all terms and conditions of this
Agreement.
C. Termination "At Will" By Company. Notwithstanding any provision to the
contrary, the Executive's employment hereunder is "at will" and may be
terminated by the Company with prior written notice by the President
and CEO (or Board) to the Executive.
6. Payments Upon Termination.
A. Upon termination of Executive's employment hereunder for any reason as
so provided for in Section 5 hereof, the Company shall be obligated to
pay and the Executive shall be entitled to receive, within thirty (30)
days of termination, Base Salary which has accrued for services
performed to the date of termination and which has not yet been paid.
In addition, the Executive shall be entitled to any vested benefits to
which he is entitled under the terms of any applicable Executive
benefit plan or program, vested restricted stock plan and stock option
plan of the Company, and, to the extent applicable, short-term or
long-term disability plan or program with respect to any disability,
or any life insurance policies and the benefits provided by such plan,
program or policies, or applicable law as duly adopted from time to
time by the Board.
B. Upon voluntary termination of employment by the Executive for any
reason whatsoever, the Company shall have no further liability under
or in connection with this Agreement, except to provide the amounts
set forth in Section 6.A.
C. Upon termination of employment, the Executive shall continue to be
subject to the provisions of Section 7, hereof. it being understood
and agreed that such provisions shall survive any termination or
expiration of the Executive's employment hereunder for any reason
whatsoever.
7. Confidentiality; Return of Property; Covenant Not To Compete; Confidential
Information.
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A. Company Information. The Company agrees that it will provide the
Executive with Confidential Information, as defined below, which will
enable the Executive to optimize the performance of the Executive's
duties to the Company. In exchange, the Executive agrees to use such
Confidential Information solely for the Company's benefit. The Company
and the Executive agree and acknowledge that its provision of such
Confidential Information is not contingent on the Executive's
continued employment with the Company. "Confidential Information"
means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product
plans, products services, customer lists and customers (including, but
not limited to, customers of the Company on whom the Executive called
or with whom the Executive became acquainted during the term of the
Executive's employment), markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing finances or other
business information disclosed to the Executive by the Company either
directly or indirectly in writing, orally or by drawings or
observation of parts or equipment. Confidential Information does not
include any of the foregoing items which has become publicly known and
made generally available through no wrongful act of the Executive or
of others who were under confidentiality obligations as to the item or
items involved or improvements or new versions. The Executive agrees
at all times during the Term and thereafter, to hold in strictest
confidence, and not to use, except for the exclusive benefit of the
Company, or to disclose to any person or entity without written
authorization of the Board of Directors of the Company, any
Confidential Information of the Company.
B. Former Employer Information. The Executive agrees that he will not,
during his employment with the Company, improperly use or disclose any
proprietary information or trade secrets of any former employer or
other person or entity and that the Executive will not bring onto the
premises of the Company any unpublished document or proprietary
information belonging to any such employer, person or entity unless
consented to in writing by such employer, person or entity.
C. Third Party Information. The Executive recognizes that the Company has
received and in the future will 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 shall hold
all such confidential or proprietary information in the strictest
confidence and not disclose it to any person or entity or use it
except as necessary in carrying out the Executive's work for the
Company consistent with the Company's agreement with such third party.
D. Returning Confidential Information. At the time of leaving the employ
of the Company, the Executive will deliver to the Company (and will
not keep any copies in the Executive's possession) any and all
Confidential Information or other Company information developed in
whole or part by the Executive during the Executive's employment with
the Company or otherwise belonging to the Company, its successors or
assigns.
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E. Notification of New Employer. In the event that the Executive leaves
the employ of the Company, the Executive hereby grants consent to
notification by the Company to the Executive's new employer about the
Executive's rights and obligations under this Agreement.
F. Solicitation of Employees. The Executive agrees that for a period of
twenty-four (24) months immediately following the termination of the
Executive's relationship with the Company for any reason, the
Executive shall not either directly or indirectly solicit, induce or
recruit any of the Company's employees to leave their employment, or
take away such employees, or attempt to solicit, induce, recruit,
encourage or take away employees of the Company, either for himself or
for any other person or entity.
G. Covenant Not to Compete.
(1) The Executive agrees that during the course of his employment and
for twenty-four (24) months following the termination of the
Executive's relationship with the Company for any reason, the
Executive will not compete, without the prior written consent of
the Company, as a partner, employee, consultant, officer,
director, manager, agent, associate, investor, or otherwise,
directly or indirectly, own, purchase, organize or take
preparatory steps for the organization of, build, design,
finance, acquire, lease, operate, manage, invest in, work or
consult for or otherwise affiliate with any business, in
competition with the Company's Chinese communications business,
provided, however, that the beneficial ownership by Executive of
up to 5% of the voting stock of any corporation subject to the
periodic reporting requirements of the Securities and Securities
Exchange Act of 1934 shall not violate this Section 7. The
foregoing covenant shall cover the Executive's activities in
every part of the Territory in which the Executive may conduct
business during the term of such covenant as set forth above.
"Territory" shall mean the Peoples Republic of China.
(2) The Executive acknowledges that he will derive significant value
from the Company's agreement in Section 7.A to provide the
Executive with that Confidential Information to enable the
Executive to optimize the performance of the Executive's duties
to the Company. The Executive further acknowledges that his
fulfillment of the obligations contained in this Agreement,
including, but not limited to, the Executive's obligation neither
to disclose nor to use the Company's Confidential Information
other than for the Company's exclusive benefit and the
Executive's obligation not to compete contained in subsection G.
above, is necessary to protect the Company's Confidential
Information and, consequently, to preserve the value and goodwill
of the Company. The Executive further acknowledge the time,
geographic and scope limitations of the Executive's obligations
under subsection (1) above are reasonable, especially in light of
the Company's desire to protect its Confidential Information, and
that the Executive will not be precluded from gainful employment
if the Executive is obligated not to compete with the Company
during the period and within the Territory as described above.
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(3) The covenants contained in subsection (1) above shall be
construed as a series of separate covenants, one for each city,
county and state of any geographic area in the Territory. Except
for geographic coverage, each such separate covenant shall be
deemed identical in terms to the covenant contained in subsection
(1) above. If, in any judicial proceeding, a court refuses to
enforce any of such separate covenants (or any part thereof),
then such unenforceable covenant (or such part) shall be
eliminated from this Agreement to the extent necessary to permit
the remaining separate covenants (or portions thereof) to be
enforced. In the event the provisions of subsection (1) above are
deemed to exceed the time, geographic or scope limitations
permitted by Colorado and U.S. law, then such provisions shall be
reformed to the maximum time, geographic or scope limitations, as
the case may be, then permitted by such law.
H. Representations. The Executive agrees to execute any proper oath or
verify any proper document required to carry out the terms of this
Agreement. The Executive represents that his performance of all the
terms of this Agreement will not breach any agreement to keep in
confidence proprietary information acquired by the Executive in
confidence or in trust prior to the Executive's employment by the
Company. The Executive has not entered into, and the Executive agrees
that he will not enter into, any oral or written agreement in conflict
herewith.
8. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement (other than any dispute or controversy arising from a violation
or alleged violation by the Executive of the provisions of Section 7) shall be
settled exclusively by final and binding arbitration in Denver, Colorado (or
such other location in the United States as determined by the President and CEO)
in accordance with the Employment Arbitration Rules of the American Arbitration
Association ("AAA"). The arbitrator shall be selected by mutual agreement of the
parties, if possible. If the parties fail to reach agreement upon appointment of
an arbitrator within thirty days following receipt by one party of the other
party's notice of desire to arbitrate, the arbitrator shall be selected from a
panel or panels of persons submitted by the AAA. The selection process shall be
that which is set forth in the AAA Employment Arbitration Rules then prevailing,
except that, if the parties fail to select an arbitrator from one or more
panels, AAA shall not have the power to make an appointment but shall continue
to submit additional panels until an arbitrator has been selected. This
agreement to arbitrate shall not preclude the parties from engaging in
voluntary, non-binding settlement efforts including mediation.
9. Notices. All notices and other communications hereunder shall be in writing
in the English language and shall be given (and shall be deemed to have been
duly given upon receipt) by delivery in person, by registered or recorded
delivery international air mail letter or by(and in proving such it shall be
sufficient to prove that the envelope containing the same was properly addressed
and posted as aforesaid), or facsimile transmission to the respective parties.
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China Wi-Max Communications, Inc.
Mr. Steven T. Berman, President and CEO
Denver Tower
1905 Sherman Street, Suite 335
Denver, CO 80203
Fax No. 703.349.4118
if to the Executive:
Mr. Changhai Chen, Managing Director
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10. Amendment; Waiver. The terms and provisions of this Agreement may be
modified or amended only by a written instrument executed by each of the parties
hereto, and compliance with the terms and provisions hereof may be waived only
by a written instrument executed by each party entitled to the benefits thereof.
No failure or delay on the part of any party in exercising any right, power or
privilege granted hereunder shall constitute a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege granted hereunder.
11. Entire Agreement. This Agreement and all Exhibits attached hereto constitute
the entire agreement between the parties with respect to the subject matter
hereof and supersede all prior written or oral agreements or understandings
between the parties relating thereto.
12. Severability. In the event that any term or provision of this Agreement is
found to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining terms and provisions hereof shall not be in any
way affected or impaired thereby, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
therein.
13. Binding Effect; Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns (it
being understood and agreed that, except as expressly provided herein, nothing
contained in this Agreement is intended to confer upon any other person or
entity any rights, benefits or remedies of any kind or character whatsoever).
The Executive may not assign this Agreement without the prior written consent of
the Company. Except as otherwise provided in this Agreement, the Company may
assign this Agreement to any of its affiliates or to any successor (whether by
operation of law or otherwise)
to all or substantially all of its business and assets without the consent of
the Executive. For purposes of this Agreement, "affiliate" means any entity in
which the Company owns shares or other measure of ownership representing at
least 40% of the voting power or equivalent measure of control of such entity.
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14. Governing Law.
A. Choice of Law. This Agreement, which is in English, shall be
interpreted in accordance with the commonly understood meaning of the
words and phrases hereof in the United States of America, and it and
performance of the parties hereto shall be construed and governed
according to the federal laws of the United States of America and the
internal laws of Colorado applicable to contracts made and to be fully
performed therein, without regard to its conflicts of law provisions.
Executive waives any right he may have under the law of Executive's
Territory to have this Agreement written in the language of
Executive's Territory; provided, however, that the English version
shall govern.
B. Jurisdiction. The parties irrevocably submit to the jurisdiction of
the courts of Denver, Colorado, U.S.A.; provided, however, that
nothing herein shall preclude Company from instituting proceedings
concerning this Agreement in any place which may have jurisdiction for
the purpose of protecting and enforcing Company's rights either
hereunder or pursuant to any other agreements, documents, instruments
or otherwise.
C. Waiver of Venue. Each party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any suit,
action or proceeding relating to this Agreement in Denver, Colorado,
U.S.A. and further irrevocably waives any claim that Denver, Colorado,
U.S.A. is not a convenient forum for any such suit, action or
proceeding. Each party consents to the enforcement of any judgment
rendered in the United States of America in any action between
Executive and Company. Any and all defenses concerning the validity
and enforceability of the judgment shall be deemed waived unless first
raised in a court of competent jurisdiction in the United States.
D. Lawyers' Fees. In the event any litigation is brought by either party
in connection with this Agreement, the prevailing party shall be
entitled to recover from the other party all the costs, lawyers' fees
and other expenses incurred by such prevailing party in the
litigation.
15. Headings. The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
16. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS THEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and the Executive has signed this Agreement as of the
Effective Date.
China Wi-Max Communications, Inc.
By: Steven T. Berman, President and CEO
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Executive:
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Changhai Chen
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Exhibit A -- Term Sheet -- Initial Award - Changhai Chen Employment Agreement
I. Options. Company will grant Executive a signing bonus of 100,000 shares on
the Effective Date, and an option to purchase 400,000 shares of Company common
stock, based on the fair market value as of the grant date, which shall be the
date of execution of this Agreement.
A. Fair market value shall be $0.50 per share, the price established as
of the Effective Date.
B. Options vested and exercisable in accordance with this paragraph with
respect to (i) 100,000 shares on the first anniversary of the
Effective Date; (ii) an additional 100,000 shares on the second
anniversary of the Effective Date; (iii) an additional 100,000 shares
on the third anniversary of the Effective Date, and (iv) an additional
100,000 shares on the fourth anniversary of the Effective Date. In
addition, vesting and exercisability will be subject to the Executive
(i) achieving revenue milestones established by the Board on an annual
basis; and (ii) setting up and overseeing in China all necessary
financial and operational control systems to meet the reporting
requirements of the Company, as the Company determines in its sole
judgment. In the event of termination for any reason, all options not
yet vested shall be null and void.
C. Options will have a term of 3 years.
D. Company will register the shares subject to the option on Form S-8 or
such other form as may be available and required, and shall provide a
cashless exercise procedure.
II. Change in Control.
A. In the event of a Change in Control and to the extent that Executive
is subject to taxation in the U.S.A., Company will pay Executive a
gross-up payment to cover the excise tax, if any, imposed under
Section 4999 of the Internal Revenue Code in connection with excess
parachute payments as defined in Section 280G of the Internal Revenue
Code.
B. For purpose of the options, "Change in Control" means: (a) the
consummation of a merger or consolidation of the Company with or into
another entity or any other transaction, where the stockholders of the
Company immediately prior to such merger, consolidation or other
transaction own or beneficially own immediately after such merger,
consolidation or other transaction less than 50% of the voting power
of the outstanding securities of each of (i) the continuing or
surviving entity and (ii) any direct or indirect parent entity of such
continuing or surviving entity; (b) the sale, transfer or other
disposition of all or substantially all of the Company's assets to a
Person which is not owned or controlled by the Company or its
stockholders immediately prior to such sale, transfer or other
disposition; (c) individuals who, 30 days following the effective date
of this Agreement, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director thereafter
whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board; or (d)
any transaction as a result of which any person is the "Beneficial
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Owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing at least 50% of
the total voting power represented by the Company's then outstanding
voting securities. For purposes of this definition of Change in
Control, the term "Persons" means, acting individually or as a group,
an individual or a corporation, Limited Liability Company,
partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or
other entity.
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