EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT is made and entered into this 25 th day of
September, 2006 by and between Kiwa Bio-tech Products Group Corp.,
a Delaware corporation having its principal place of business at
415 West Foothill Blvd, Suite 206 Claremont, California 91711-2766
and Ju Hua Wang, an individual, whose address N0.1, Building #61, 2
Qu, Tianhuayuan 1 Li, Tianhuaxilu, Yizhuang, Daxing District,
Beijing, China, (''Executive''), with reference to the following
facts:
R E C I T A L
S
WHEREAS,
Company is primarily engaged in the business of developing,
manufacturing, distributing and marketing innovative,
cost-effective and environmentally safe bio-technological products
for the agricultural, stockbreeding, natural resources and
environmental protection markets, primarily in China;
and
WHEREAS,
Company desires to employ Executive and to ensure the continued
availability to Company of Executive’s services, and
Executive desires to accept such employment from Company and render
such services, all in accordance with and subject to the terms and
conditions herein set forth;
NOW, THEREFORE,
in consideration of the promises and of the mutual covenants
contained herein, and for other good and valuable consideration,
receipt of which is hereby acknowledged, Company and Executive do
hereby agree as follows:
A G R E E M E N
T
1.
Term of Employment.
1.01.
Specified
Term. Company
employs Executive, and Executive accepts employment with Company,
for a period of 3 years beginning on August 1, 2006, and ending on
July 31, 2008.
1.02.
Earlier
Termination. This
Agreement may be terminated earlier as hereinafter
provided.
1.03.
Continuing
Effect. Notwithstanding any termination of this
Agreement except for termination under Section 9.02, at the end of
the Term or otherwise, the provisions of Sections 10 and 11 shall
remain in full force and effect and the provisions of Section 11
shall be binding upon the legal representatives, successors and
assigns of the Executive.
2.
Duties and Obligations of Executive.
2.01.
Title and Description of
Duties. Executive
shall serve as the Chief Operating Officer of Kiwa Bio-tech
Products Group, Corp. In that capacity, Executive shall do and
perform all services, acts, or things necessary or advisable to
fulfill the duties of a Chief Financial Officer. However, Executive
shall at all times be subject to the direction of the Chief
Executive Officer (“CEO”), and to the policies
established by the Company’s Board of Directors.
2.02.
Loyal and Conscientious
Performance of Duties. Executive agrees that to the best of his ability
and experience he will at all times loyally and conscientiously
perform all of the duties and obligations required of him either
expressly or implicitly by the terms of this Agreement.
2.03.
Devotion of Entire Time to
Company's Business.
(a) Executive shall devote his entire productive
time, ability, and attention to the business of Company during the
term of this Agreement.
(b) During the term of this Agreement, Executive
shall not engage in any other business duties or pursuits
whatsoever. Furthermore, during the term of this Agreement,
Executive shall not, whether directly or indirectly, render any
services of a commercial, or professional nature to any other
person or organization, whether for compensation or otherwise,
without the prior written consent of Company's President. However,
the expenditure of reasonable amounts of time for educational,
charitable, or professional activities shall not be deemed a breach
of this Agreement if those activities do not materially interfere
with the services required under this Agreement.
(c) This Agreement shall not be interpreted to
prohibit Executive from making passive personal investments or
conducting private business affairs if those activities do not
materially interfere with the services required under this
Agreement. However, Executive shall not, directly or indirectly,
acquire, hold, or retain any interest in any business competing
with or similar in nature to the business of Company.
2.04.
Location of
Office. Executive's principal business office
shall be at Company's corporate headquarters and representative
office in Beijing. However, Executive's job responsibilities shall
include all business travel necessary to the performance of his
job.
2.05.
Uniqueness of Executive's
Services. Executive
represents and agrees that the services to be performed under the
terms of this Agreement are of a special, unique, unusual,
extraordinary, and intellectual character that gives them a
peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law. Executive
therefore expressly agrees that Company, in addition to any other
rights or remedies that Company may possess, shall be entitled to
injunctive and other equitable relief to prevent or remedy a breach
of this Agreement by Executive.
2.06.
Indemnification for
Negligence or Misconduct. Executive shall indemnify and hold Company
harmless from all liability for loss, damage, or injury to persons
or property resulting from the negligence or misconduct of
Executive.
2.07.
Adherence to Inside
Information Policies. Executive acknowledges that Company is
publicly-held and, as a result, has implemented inside information
policies designed to preclude its executives and those of its
subsidiaries from violating federal securities laws by trading on
material, non-public information or passing such information on to
others in breach of any duty owed to Company its parent or any
third party. Executive shall promptly execute any agreements
generally distributed by Company to its employees requiring such
employees to abide by its inside information policies.
3.
Obligations of Company.
3.01.
General
Description. Company
shall provide Executive with the compensation, incentives,
benefits, and business expense reimbursement specified elsewhere in
this Agreement.
3.02.
Indemnification of Losses of
Executive Company
shall indemnify Executive for all necessary expenditures or losses
incurred by Executive in direct consequence of the discharge of his
duties on Company's behalf.
4.
Executive Representations. Executive represents
and warrants that:
(a) Executive has the right to enter into this
Agreement and is not subject to any Agreement, commitment,
agreement, arrangement or restriction of any kind which would
prevent Executive from performing Executive’s duties and
obligations hereunder; and
(b) Executive is currently in good health and to
the best of Executive’s knowledge; Executive is not subject
to any undisclosed medical condition which might have a material
effect on Executive’s ability to perform satisfactorily
Executive’s services hereunder.
5.
Compensation of Executive.
5.01.
Annual
Salary.
(a) As compensation for the services to be
rendered by Executive hereunder, Company shall pay Executive an
annual salary at the rate per annum of RMB300,000 (approximately
$37,500), of which RMB240,000 shall be paid in equal monthly
installments of RMB20,000 during the period of employment, prorated
for any partial employment period, and RMB60,000 shall be paid as
an annual performance bonus in three months after each employment
year.
(b) Executive shall receive such annual increases in
salary as may be determined by Company's CEO in his sole discretion
at least annually on or about each anniversary of the execution of
this Agreement.
(c) Executive shall pay the due individual income
tax levied by the applicable laws and other individual tax (if
applicable) levied for the above benefits paid by Executives.
Company shall be entitled to deduct from each salary payment, all
deductions as may be required by applicable laws, including,
without limitation, deductions for U.S.A federal, state and local
income taxes and FICA, and deductions for P.R.C applicable
laws.
5.02.
Salary Continuation During
Disability. If
Executive for any reason whatsoever becomes permanently disabled so
that he is unable to perform the duties prescribed herein, Company
agrees to pay Executive his monthly installments of salary, payable
in the same manner as provided for the payment of salary herein,
for a period of up to six (6) months from the date of disability or
until the expiration of the employment term provided for herein,
whichever occurs sooner.
5.03.
Repayment of Disallowed
Salary. In the event
that any portion of the compensation paid by Company to Executive
is disallowed as an income tax deduction on an income tax return of
Company, Executive agrees to immediately repay to Company the full
amount of that portion.
6.
Executive Incentives
6.01.
Cash Bonus Based on
Profitability. At
the beginning of any fiscal year during the employment term as
herein provided, Company’s CEO shall set forth for Executive
goals and objectives to be accomplished by Executive during that
year. For the successful completion of all goals and objectives by
the end of that year, Executive shall receive a performance bonus
provided for in Section 5.01 for his services in addition to any
other compensation which he is entitled to receive hereunder. The
amount and form of bonus shall be determined by the CEO and to be
approved by the Board of Directors. This bonus shall be paid within
one month after the annual meeting of the Board of
Directors.
6.02.
Stock Incentive
Plan.
(a) As additional compensation, Company agrees to
grant Executive each year certain number of stock options pursuant
to Company’s Stock Incentive Plan and the board resolutions
on stock option allocation plan each fiscal year.
(c) All terms and conditions of Company’s
Stock Incentive Plan, including but not limited to option grant,
exercise and any other items are applicable for Executive as a plan
participant.
7.
Executive Benefits.
7.01.
Annual
Vacation. Executive
shall be entitled to two (2) week vacation time each year with full
pay. Executive may be absent from his employment for vacation only
at such times as Company's CEO shall determine from time to time.
If Executive is unable for any reason to take the total amount of
authorized vacation time during any year, he may accrue that time
and add it to vacation time for any following year or may receive a
cash payment in an amount equal to the amount of annual salary
attributable to that period.
7.02.
Illness.
On completion of one (1) year in the
service of Company, Executive shall be entitled to five (5) days
per year as sick leave with full pay. Sick leave may not be
accumulated or accrued for any following year.
7.03.
Employee Benefit
Programs. Executive
is entitled to participate in any pension, 401(k), insurance or
other employee benefit plan that is maintained by Company for its
executive officers, including programs of life and medical
insurance and reimbursement of membership fees in civic, social and
professional organizations
7.04.
Insurance.
Company shall provide to Executive
and pay premiums on Company's group medical insurance policy
offered through Company, covering Executive and Executive's
dependents.
7.05.
Severance
Package. If
Executive's employment with Company is terminated pursuant to
Sections 9.03 or 9.04, Executive shall be entitled to three (3)
month severance package consisting of Executive's compensation and
all benefits as provided for in Sections 5, 6 and 7 and all
Executive's remaining unvested options shall vest immediately.
Payments shall be made monthly or in a lump sum payment at the
Board's sole discretion. In the event severance is paid in a lump
sum, the cash amount excluding insurance benefits shall be paid at
the present value for the time remaining in the 3-month severance
agreement based on the current prime interest rate as charged by
the Federal Reserve Bank in New York.
8.
Business Expenses.
8.01.
Business
Expenses.
(a) Company shall promptly reimburse Executive for
all reasonable business expenses incurred by Executive in promoting
the business of Company, including expenditures for entertainment,
gifts, and travel.
(b) Each such expenditure shall be reimbursable only
if it is of a nature qualifying it as a proper deduction on the
federal and state income tax return of Company.
(c) Each such expenditure shall be reimbursable only
if Executive furnishes to Company adequate records and other
documentary evidence required by federal and state statutes and
regulations issued by the appropriate taxing authorities for the
substantiation of that expenditure as an income tax
deduction.
8.02.
Repayment by Executive of
Disallowed Business Expenses. In the event that any expenses paid for
Executive or any reimbursement of expenses paid to Executive shall,
on audit or other examination of Company's income tax returns, be
determined not to be allowable deductions from Company's gross
income, and in the further event that any such determination is
acceded to by the Company or made final by the appropriate federal
or state taxing authority or a final judgment of a court of
competent jurisdiction, and no appeal is taken from the judgment or
the applicable period for
