Exhibit 10.10(b)
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (the “Agreement”) is made and entered into
this 9 th day of April, 2008, effective
as of April 20, 2008 (the “Effective Date”),
between American Oriental Bioengineering, Inc., a Nevada
corporation with its principal place of business located at Great
International Exchange Square, 25/F Mid Section, 1 Fuhua Rd.,
Futian District, Shenzhen, Guangdong, PRC 518034 (the
“Company”), and Yanchun Li, residing at Haidian
District, Beijing, China (the “Executive”).
WHEREAS, the business of the Company
and its affiliates consists of the development and production of
bioengineered products and traditional Chinese medicinal products
that combine modern biotechnology and traditional Chinese medical
technology, and activities incidental thereto (the
“Business”);
WHEREAS, the Company has expended
considerable time, effort and resources in the development of
certain Confidential Information, as defined in paragraph 10 herein
below, which must be maintained as confidential in order to ensure
the success of the Business;
WHEREAS, prior to the Effective
Date, the Executive has been employed by the Company in the
position of, and has been performing the services required of,
Chief Operating Officer and Chief Financial Officer of the
Company;
WHEREAS, the Executive and the
Company desire to memorialize the terms and conditions of the
Executive’s employment by the Company in the position of
Chief Operating Officer and Chief Financial Officer; and
WHEREAS, the Executive has had,
prior to the Effective Date, and will continue to have, as of the
Effective Date, access to such Confidential Information, as defined
in paragraph 10 herein below.
NOW, THEREFORE, in consideration of
the covenants and promises contained herein, the compensation and
benefits received by the Executive from the Company, and the access
given the Executive to the aforesaid Confidential Information, as
defined in paragraph 10 herein below, and for other good and
valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the Company and the Executive agree as
follows:
1. EMPLOYMENT PERIOD. The Company
offers to employ the Executive, and the Executive agrees to be
employed by the Company, in accordance with the terms and subject
to the conditions of this Agreement commencing on the Effective
Date and terminating on the first anniversary of the Effective Date
(the “Scheduled Termination Date”), unless terminated
prior thereto in accordance with the provisions of paragraph 9
herein below. The term of this Agreement shall be automatically
renewed for successive one (1) year terms, unless either party
gives the other party written notice of its intention not to renew
the Agreement no later than 90 days prior to the expiration of the
then current term. A determination by the Company not to renew this
Agreement without “Company Cause” shall be deemed a
termination of employment for purposes of paragraph 9(d) and the
terms thereof shall apply.
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2. POSITION AND DUTIES. During the
term of the Executive’s employment hereunder, the Executive
will serve in the position, and assume duties and responsibilities
consistent with the position of Chief Operating Officer and Chief
Financial Officer unless and until otherwise instructed by the
Company. The Executive agrees to devote substantially all of her
working time, skill, energy and best business efforts during the
term of her employment with the Company. The Executive covenants
and agrees that for so long as she is employed by the Company, the
Executive shall inform the Company of each and every business
opportunity related to the business of the Company of which the
Executive becomes aware, and that the Executive will not, directly
or indirectly, exploit any such opportunity for the
Executive’s own account, nor will the Executive render any
services to any other person or business, acquire any interest of
any type in any other business or engage in any activities that
conflict with the Company’s best interests or which is in
competition with the Company. The Executive affirms that no
obligation exists between the Executive and any other entity which
would prevent or impede the Executive’s immediate and full
performance of every obligation of this Agreement.
3. HOURS OF WORK. The
Executive’s normal days and hours of work shall coincide with
the Company’s regular business hours. The nature of the
Executive’s employment with the Company requires flexibility
in the days and hours that the Executive must work, and may
necessitate that the Executive work on other or additional days and
hours. The Company reserves the right to require the Executive, and
the Executive agrees, to work during other or further days or hours
than the Company’s normal business hours.
4. LOCATION. The locus of the
Executive’s employment with Company shall be the
Company’s office located at No. 4018 Jintian Road,
Anlian Plaza, 12F Suite B02, Futian, District Shenzhen, PRC 518026.
The Company may, in its sole discretion, require the Executive to
travel to and reside in, on a temporary, indefinite or permanent
basis, in any other location throughout the world in which the
Company or any of its affiliates has offices.
5. BASE SALARY. In consideration of
the Executive’s services under this Agreement, the Company
shall pay or cause to pay, and the Executive agrees to accept,
during the one year period following the Effective Date (the
“First Year”), an annual base salary of
US$160,000 , less all applicable taxes and other appropriate
deductions, paid in accordance with the Company’s standard
payroll practices. Following the First Year, the Executive’s
base salary shall be reviewed annually by the Board of Directors of
the Company. The decision to increase or decrease the
Executive’s base salary and the amount of any such increase
or decrease are within the sole discretion of the Board of
Directors. Nothing contained in this paragraph 5 is intended to be,
or should be construed as, a promise or guarantee by the Company to
increase the Executive’s base salary. The Company reserves
the right, in its sole discretion, and the Executive hereby
acknowledges the Company’s right, to make no such payments or
make reduced payments in connection with any periods of
unauthorized or unjustified absence from work or in the event that
the Executive is unavailable or unable to perform the
Executive’s duties for the Company without adequate
justification, as determined by the Company in its sole
discretion.
6. BONUS COMPENSATION. During the
term hereof, the Executive shall have the opportunity to earn an
annual performance based bonus equal to up to US$30,000 based upon
the Company’s attainment of certain annual net income
targets, as set by the Board of Directors
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in its sole discretion on an annual basis. Such
bonus amount may be increased in the event the annual net income
target is exceeded, however, shall not exceed 300% of the annual
performance based bonus. The Board of Directors may, from time to
time, also pay such other bonus or bonuses to the Executive as the
Board of Directors, in its sole discretion, deems appropriate. In
order to receive the annual performance based bonus, the Executive
must continue to be employed by the Company through the end of the
period with respect to which the annual performance bonus has been
earned. The annual performance based bonus will be paid to the
Executive at such time as bonuses for the applicable period are
regularly paid to senior executives of the Company.
7. STOCK OPTIONS. The Executive
shall receive stock options to purchase 271,543 shares of
common stock of the Company for the First Year. The exercise price
per share shall be determined by the Compensation Committee of the
Board and shall be at least equal to the last closing price of the
Company’s common stock, as reported by Bloomberg LP, on the
New York Stock Exchange, or any such securities exchange on which
the Company’s common stock is listed or quoted for trading,
on April 20, 2008, the date of grant (the “Stock
Options”). The Stock Options shall vest in five equal
installments on each April 19 of the first, second, third,
fourth and fifth anniversary of the grant, subject to the
Executive’s continued employment with the Company on each
vesting date, and further to subject to accelerated vesting under
the applicable incentive plan, the applicable grant agreement and
the terms of this Agreement. The Stock Options shall be granted
under the Company’s 2006 Equity Incentive Plan and pursuant
to the terms of the Company’s standard form of stock option
agreement approved by the Board of Directors. The Compensation
Committee shall determine, on an annual basis, the number of Stock
Options to be granted to the Executive for each renewal
period.
8. REIMBURSEMENT OF EXPENSES. During
the term of this Agreement, in accordance with the Company’s
expense reimbursement policy, the Executive shall be entitled to
reimbursement for reasonable expenses (including, without
limitation, reasonable travel expenses) paid or incurred by her, in
connection with and related to the performance of her duties and
responsibilities hereunder for the Company. All requests by
Executive for reimbursement for such expenses must be supported by
appropriate invoices, vouchers, receipts or such other supporting
documentation in such form and containing such information as the
Company may from time to time require, evidencing that the
Executive, in fact, incurred or paid said expenses.
9. TERMINATION.
a. DEATH OR RESIGNATION. If the
Executive dies or resigns during the term of this Agreement, this
Agreement shall automatically terminate on the date of the
Executive’s death or resignation and, following the date of
the Executive’s death or resignation, the Company shall have
no further obligations or liability to the Executive or her heirs,
administrators or executors with respect to compensation and
benefits thereafter, except for the obligation to pay the Executive
(i) any earned but unpaid base salary through the
Executive’s date of death or resignation, (ii) for any
unused accrued and unforfeited vacation, and (iii) subject to
paragraph 8 hereinabove, for any unreimbursed business expenses
incurred by the Executive prior to her death or resignation. The
Company shall deduct, from all payments made hereunder, all
applicable taxes, including income tax, FICA and FUTA, and other
appropriate deductions.
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b. DISABILITY. At any time during
the term of this Agreement, the Company may terminate this
Agreement and the Executive’s employment with the Company
because of the Executive’s “Disability,” by
written notice to the Executive. For purposes of this Agreement,
“Disability” shall mean, if at the end of any calendar
month during the term of this Agreement, the Executive, as a result
of mental or physical illness or injury, is or has been unable to
perform her duties under this Agreement, with or without reasonable
accommodation, for (i) the four (4) preceding consecutive
calendar months, or (ii) any 180 days in the previous twelve
(12) months. If this Agreement is terminated because of the
Executive’s “Disability,” the Company shall have
no further obligations or liability to the Executive or her heirs,
administrators or Executors with respect to compensation and
benefits thereafter, except for the obligation to pay the Executive
(x) any earned but unpaid base salary through the date of
termination for “Disability”, at the rate then in
effect, (y) for any unused accrued and unforfeited vacation,
and (z) subject to paragraph 8 hereinabove, for any
unreimbursed business expenses incurred by the Executive prior to
her last date of employment with the Company. The Company shall
deduct, from all payments made hereunder, all applicable taxes,
including income tax, FICA and FUTA, and other appropriate
deductions.
c. “CAUSE.” At any time
during the term of this Agreement, the Company may terminate this
Agreement and the Executive’s employment with the Company, at
any time, for “Company Cause.” For purposes of this
Agreement, “COMPANY CAUSE” shall mean: (i) the
good faith determination by the Company’s Board of Directors
that there has been continued neglect by the Executive of her
duties hereunder, or (ii) willful misconduct on the
Executive’s part in connection with the performance of her
duties hereunder, PROVIDED HOWEVER, that the Executive shall have
been given one (1) written notice of such determination by the
Company’s Board of Directors of continued neglect or willful
misconduct and thereafter the Executive shall not have cured such
neglect or willful misconduct to the satisfaction of the
Company’s Board of Directors within fifteen (15) days of
the Executive’s receipt of such written notice,
(iii) the Executive is convicted of or pleads guilty or no
contest to a felony or other conduct involving moral turpitude. If
this Agreement and the Executive’s employment is terminated
for “Company Cause,” following the Executive’s
last date of employment with the Company, the Company shall have no
further obligations or liability to the Executive or her heirs,
administrators or Executors with respect to compensation and
benefits thereafter, except for the obligation to pay the Executive
(x) any earned but unpaid base salary through the
Executive’s last date of employment, at the rate then in
effect, (y) for any unused accrued and unforfeited vacation,
and (z) subject to paragraph 8 hereinabove, for any
unreimbursed business expenses incurred by the Executive prior to
the last date of employment with the Company. The Company shall
deduct, from all payments made hereunder, all applicable taxes,
including income tax, FICA and FUTA, and other appropriate
deductions.
d. TERMINATION BY THE CHIEF
EXECUTIVE OFFICER. At any time during the term of this Agreement,
the Chief Executive Officer of the Company, in his sole discretion,
may terminate this Agreement and the Executive’s employment
with the Company without “Company Cause” by delivering
to the Executive written notice. If this Agreement and the
Executive’s employment with the Company is terminated without
“Company Cause,” following
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the Executive’s last date of employment
with the Company, the Company shall have no further obligations or
liability to the Executive or her heirs, administrators or
executors w
