Employment Agreement

Exhibit 10.3

Employment Agreement

This Employment Agreement (“ Agreement ”), dated as of June, 1, 2008, is entered into between China Biologic Products, Inc., a company established in the United States with its principal office located at No. 14., East Hushan Road, Taian City, Shandong, PRC (“Company”), and Yu-Yun Tristan Kuo (the “ Executive ”).  

WHEREAS, the Company desires to engage the Executive as, and the Executive agrees to serve as, Chief Financial Officer of the Company, upon the terms and conditions contained herein.

NOW THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged by the parties, the parties hereto hereby agree as follows:

1.

EFFECTIVENESS OF AGREEMENT AND EFFECTIVE DATE

This Agreement will become effective as of the date hereof. For the purpose of this Agreement, the term “Effective Date” means June 1, 2008.

2.

EMPLOYMENT AND DUTIES

2.1

General . The Executive will perform such duties and services for the Company as may be designated from time to time by the Board of Directors of the Company (the “ Board ”) or the Chief Executive Officer of the Company. The Executive agrees to serve the Company faithfully and to the best of his ability under the direction of the Board and the Chief Executive Officer of the Company and to carry out the functions typically performed by a Chief Financial Officer, including but not limited to responsibility for (i) all financial management and accounting for the Company, (ii) compliance with local GAAP principles (and in a form that can be converted into US GAAP) and all applicable regulatory authorities, and (iii) supervising the Company’s compliance with its SEC reporting obligations, its internal controls and other corporate governance obligations, the Sarbanes-Oxley Act and other applicable securities laws.  The Executive and the Company further agree that the Executive is also serving as the Chief Financial Officer of Shandong Taibang Biological Products Co., Ltd. (“Shandong Taibang”) the Company’s primary operating subsidiary that a substantial portion of the CFO’s time and attention will be devoted to the business and affairs of Shandong Taibang and the Company’s other subsidiary companies (collectively the “Subsidiaries”), that such time and attention to the business and affairs of the Subsidiaries is for the benefit of the Company and in furtherance of the Executive’s duties and responsibilities to the Company under this Agreement and applicable law, and that the CFO will not be required to allocate any fixed minimum amount of time to any one entity during any one time period, although is expected and required to devote substantially all of his time and attention during normal business hours to the affairs of the Company and/or the Subsidiaries.    

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2.2

Term of Employment . The Executive’s employment under this Agreement will  commence as of the date hereof and will terminate on the first year of the Effective Date; provided, however , that the term of the Executive’s employment will be automatically extended without further action of either party for additional one (1) year periods unless written notice of either party’s intention not to extend has been given to the other party hereto at least thirty (30) days prior to the expiration of the then effective term (the initial term and any extensions thereof, the “ Term of Employment ”). Notwithstanding the foregoing, the Executive’s employment may be terminated during the Term of Employment as provided in Section 5 below.

2.3

Reimbursement of Expenses . Unless otherwise agreed to by the Executive and the Company, the Company will reimburse the Executive for reasonable travel and other business expenses incurred by him to fulfill his duties hereunder upon presentation by the Executive of an itemized account of such expenditures, in accordance with Company practices consistently applied.

3.

COMPENSATION

3.1

Base Salary . From the Effective Date, the Executive will be entitled to receive a base salary (“ Base Salary “) at a rate of ￥1,320,000 per annum (to be paid in Executive’s personal accounts), payable in accordance with the Company’s payroll practices and applicable law.  If the rate of Base Salary per annum paid to Executive is increased during the Term of Employment, such increased rate will thereafter constitute the Base Salary for all purposes of this Agreement.  Base Salary will not be decreased during the Term of Employment without the mutual consent of Executive and the Company.

3.2

Annual Review . The Executive’s Base Salary will be reviewed by the Board, based upon the Executive’s performance not less than annually.

3.3

Bonus Compensation .  In addition to his Base Salary, Executive shall be eligible to receive an annual cash performance bonus (the “Bonus”) for each calendar year during the Term of Employment in an amount equivalent to one month’s Base Salary if, and to the extent that, Executive remains employed by the Company on December 15th of such calendar year. Such Bonus shall be paid no later than January 15 ^th of the calendar year following the year in which the Bonus is earned.  Executive further may be eligible receive additional bonus compensation as may be awarded to the Executive from time to time by the Board in the sole and absolute discretion of the Board.

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3.4

Additional Compensation .

3.4.1

Initial Stock Option . Subject to approval by the Board of Directors (or an appropriate Committee appointed by such Board of Directors), on or before June 1, 2008, Executive will be granted an option (the “Initial Option”) to purchase 75,000 shares of the Company’s common stock (the “Shares”) under the Company’s 2008 Equity Incentive Plan (the “Plan”).  The Initial Option will be evidenced by a Stock Option Agreement as contemplated by the Plan, both of which will govern the Initial Option, notwithstanding any other provision of this Agreement.  The exercise price of the Initial Option will be $4.00 per share; provided, however, that if the fair market value of the Shares as of the grant date is greater than $4.00 per share, then the exercise price of the Initial Option will be the fair market value as of the grant date.  The Initial Option will vest in accordance with the provisions of the Stock Option Agreement.    

3.4.2

Bonus Upon PIPE Financing . Upon completion of each PIPE financing by the Company (or within one (1) month following the closing of each such financing) and, provided Executive remains employed by the Company on the date of the closing of each such financing, Executive shall receive a cash bonus equivalent to one percent (1%) of the gross proceeds raised via such financing (“Cash Bonus”); provided, however, that if the Company does not complete the first PIPE financing before 12/31/2008, the Executive will not be entitled to any Cash Bonus upon the Company’s completion of its first PIPE financing following 12/31/2008 (but will be eligible to receive the Cash Bonus upon completion by the Company of subsequent PIPE financing as long as he remains employed by the Company on the date of the closing of such subsequent PIPE financing).  In lieu of the cash bonus described above, the Executive may elect to receive an equivalent number of shares of the Company’s common stock at no cost to him.

3.4.3

Stock Option Upon Listing on NASDAQ/NYSE/AMX . Upon the Company’s listing on NASDAQ, NYSE or AMX (or within one (1) month following such listing), and provided Executive remains employed by the Company on the date of such listing, Executive shall receive an option (“Listing Option”) to purchase 50,000 shares of the Company’s common stock pursuant to the Company’s Plan.  The exercise price of the Listing Option shall be the fair market value as of the date of the grant.  The Listing Option shall be immediately vested and exercisable on the date of the grant.  The Listing Option will be evidenced by a Stock Option Agreement as contemplated by the Plan, both of which will govern the Listing Option, notwithstanding any other provision of this Agreement.   

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3.4.4

Executive will be eligible to participate in any employment compensation plan established by the Company under the same terms as other Company executives and at levels recommended by the CEO of the Company and approved by the Board of Directors.

3.5

Taxes . The Company shall be responsible for the employer’s share of taxes as required by United States laws and regulations and the Executive shall be responsible for payment of any personal income or other taxes in the PRC and the United States; provided, however, that if the Company requires the Executive to travel within the United States for more than thirty-five (35) days during any period of twelve (12) consecutive months and, as a result solely of such required travel within the United States, the Executive is unable to claim the foreign earned income exclusion on his United States tax return, the Company shall reimburse the Executive, on a fully grossed-up basis, for any such net United States income taxes, in excess of foreign tax credits, that Executive is required to pay.  

4.

EMPLOYEE BENEFITS

4.1

Leave .  The Executive will be entitled to accrue 15 working days paid annual leave each calendar year (which will not be carried over in the event that they are not used by the Executive).  All annual leave days will be taken at times mutually agreed by the Executive and the Company and will be subject to the business needs of the Company.  If, however, in any calendar year during the Term of Employment, the Executive is unable to take any annual leave due to the business needs of the Company, the Company, in its discretion, shall either pay the Executive the equivalent of 15 working days, or permit the Executive to carry such leave over into the following calendar year.  

4.2

Medical Coverage. The Company will either (a) purchase and provide Executive and his spouse with reasonable medical health insurance that provides coverage both within and outside the PRC or (b) reimburse the Executive for the premiums he incurs for purchasing such medical health insurance for himself and his spouse.

4.3

Home Trip Allowance .  After b