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Exhibit 10.4
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 Chao Ming Zhao (the “
Executive ”).
WHEREAS, the Company desires to
engage the Executive as, and the Executive agrees to serve as,
Chief Executive 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 ”).
The Executive agrees to serve the Company faithfully and to the
best of his ability under the direction of the Board and to
carry out the functions typically performed by a Chief Executive
Officer. He further agrees to perform such duties in
accordance with the general fiduciary duties of officers and
directors arising under the Delaware General Corporation Law.
The Executive and the Company further agree that the Executive
is also serving as Vice President of Shandong Taibang Biological
Products Co., Ltd. (“Shandong Taibang”) the
Company’s primary operating subsidiary, pursuant to an
Employment Agreement dated as of June 1, 2008, that a
substantial portion of the CEO’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 CEO 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 ￥840,000 per annum, 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.
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 115,000 shares of the Company’s common stock (the
“Shares”) under the Company’s 2008 Equity
Incentive Plan (the “Plan”). 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 be vested in full
and exercisable on the grant date. 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.
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3.4. 2
The Company may, in its sole
discretion, award Executive additional equity-based
compensation. Employee further 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.
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
Other Programs
. The Executive will, during his employment
under this Agreement, be included to the extent eligible
thereunder in all employee benefit plans, programs or
arrangements (including, without limitation, any plans, programs
or arrangements providing for retirement benefits, incentive
compensation, profit sharing, bonuses, disability benefits,
health and life insurance, or vacation and paid holiday) which
may be established by the Company for, or made available to, its
executives generally.
5.
TERMINATION OF
EMPLOYMENT
5.1
Termination Events
.
5.1.1.
By the Company
. The Company may terminate the Executive’s
employment immediately with Cause, without Cause upon thirty
(30) days notice to the Executive, or upon the Executive’s
death or Permanent Disability (as hereinafter
defined).
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5.1.2.
By the Executive
. The Executive may terminate his employment at
any time for any reason upon thirty (30) days written notice to
the Company.
5.2
Termination by Company With
Cause . If the Executive’s
employment is terminated by the Company with Cause, the Company
shall pay to the Executive all compensation to which the
Executive is entitled through the date of termination, and
thereafter, all of the Company’s obligations under this
Agreement shall cease.
5.3
Termination by Company Without
Cause . Except in situations
where the Executive’s employment is terminated for Cause,
by death or by Permanent Disability, in the event that the
Company terminates Executive̵
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