<PAGE>
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS
AGREEMENT, made as of this 10 day of February, 2004, by and
between
BEIJING MED-PHARM CORPORATION, a Delaware
corporation ("BMP"), with its
principal offices located at 5906 Highland
Drive, Palatine, IL 60067 and David
Gao, an individual, residing at 5906
Highland Drive, Palatine, IL 60067 (the
"Executive"),
WITNESSETH
BACKGROUND. BMP desires the Executive to be employed by BMP, and
the
Executive is desirous of such employment,
upon the terms and conditions set
forth in this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants
and agreements contained herein, the
parties intending to be legally bound
hereto agree as follows:
1.
Definitions. As used in this Agreement, the following
terms shall have the following
meanings:
(a) "Agreement"
means this Employment Agreement, as
the same may, from time to time, be amended
in accordance with the provisions
hereof.
(b) "Cause"
means, with respect to the Executive, any:
(i) Act of
dishonesty;
(ii) Act of
malfeasance;
(iii) Action taken in knowing contradiction to the
best interests of the Company;
(iv) Refusal to
perform job functions reasonably
required of him under this Agreement;
or
(v) Any other
act which has a direct,
substantial and adverse effect on the
Company's reputation or business.
(c) "Company"
means BMP and its respective successors,
whether now or hereafter existing.
(d) "Competing
Organization" means to the best of the
Executive's knowledge any person or legal
entity engaged in, about to engage in,
or intending to engage in, the business of
providing services to foreign and/or
domestic pharmaceutical companies,
specifically: drug distribution;
physician-oriented drug promotion; product
registration; clinical trial
management; and pre-market entry
analyses.
(e) "Competing
Service" means any service of any
person or legal entity other than the
Company, or a parent, subsidiary or
affiliate of the Company, in
<PAGE>
existence or under development, which
during the Term of this Agreement,
competes with or is an alternative to any
present or planned future service of
the Company, whether or not actively
marketed by the Company.
(f)
"Confidential Information" means all that
knowledge, data, concepts and other like
information acquired by the Executive
in the course of his employment with the
Company.
(g) "Customer"
means any individual, firm,
partnership, corporation, company, joint
venture or governmental or military
unit or any other entity or any parent,
subsidiary or affiliate of any of them
which is negotiating or has a contract with
the Company or a parent, subsidiary
or affiliate of the Company for the
purchase, sale or lease of the Company's or
a parent's, subsidiary's or affiliate's
services or which has been solicited by
the Company or a parent, subsidiary or
affiliate of the Company with respect to
such purchase or lease during the
Executive's employment with the Company.
(h) "Disability"
means the Executive's inability to
perform his duties under this Agreement for
a period of six (6) consecutive
months, or for eighty percent (80%) or more
of the normal working days during
the nine (9) consecutive months then
ending, because of his physical or mental
illness or infirmity.
(i) "Future
Inventions" means all inventions,
discoveries, ideas, concepts, designs and
improvements of any sort, whether
patentable, copyrightable or not, relating
in any way to the business of the
Company, which the Executive may, during
the term of this Agreement, conceive or
invent, whether alone or jointly with
others, and whether during business hours
or thereafter, and such term includes all
"know-how" and Technical Data relating
to the foregoing, and all letters patent
and copyrights of the United States or
any other country which may be issued in
connection with the foregoing.
(j) "Secret or
Confidential Information" means any
ideas or any compilations of information
kept or which shall hereafter be kept
confidential by the Company in the
operation of its business or the conduct of
its research and which are not in the
public domain, and which give or can give
to the Company an advantage over its
competitors, including, by way of
illustration but not limitation: source
codes, object codes, engineering and
other sketches, drawings and tracings,
specifications, engineering data,
memoranda, designs, sources of supplies and
materials, cost and financial data,
processes, production machines and
equipment, procedures, customer lists,
marketing plans and business forecasts,
together with all
<PAGE>
"know-how" and Technical Data relating
thereto.
(k) "Technical
Data" means all written, printed and
other tangible materials embodying or
containing "know-how", and includes,
without limiting the generality of the
foregoing, all correspondence, designs,
processes, source codes, object codes,
engineering sketches, drawings and
tracings, specifications and engineering
data, reporting formats, memoranda,
notebooks, and all copies thereof, together
with all models and prototypes of
every description.
(l) "Term" means
from February 10, 2004 to December
31, 2005; provided, however, Term shall
include any continuation of this
Agreement pursuant to Section 5 hereof.
2.
Employment. The Company hereby employs the Executive, and the
Executive hereby accepts such employment,
upon the terms and conditions set
forth in this Agreement.
3.
Duties.
The Executive shall be employed by the Company as its President
and
Chief Executive Officer, and he shall
perform such duties and render such
services consistent therewith as may from
time to time be required of him by the
Board of Directors (the "Board") of the
Company; provided, however, the
Executive shall not have the power to hire
or fire officers of the Company
without the approval of the Board, nor
shall the Executive take any of the
following actions on behalf of the Company
without the approval of the Board:
(a) Borrowing or
obtaining credit in any amount or
executing any guaranty;
(b) Expending
funds for capital equipment in excess of
budgeted expenditures for any calendar
month;
(c) Selling or
transferring capital assets;
(d) Executing
any lease of real property; or
(e) Exercising
any discretionary authority or control
over the management of any employee
welfare, pension benefit plan, or stock
option plan, or over the disposition of the
assets of any such plan.
4. Extent
of Service. During the Term of this Agreement,
the Executive agrees that he will:
(a) Serve the
Company faithfully, diligently and to
the best of
<PAGE>
his ability under the direction of the
Board;
(b) Devote his
best efforts and his entire working
time, attention and energy to the
performance of his duties hereunder and to
promoting and furthering the interests of
the Company; and
(c) Not, without
the prior written approval of the
Board, become associated with or engaged
in, any business other than that of the
Company, and he will do nothing
inconsistent with his duties to the Company.
5. Term of
Employment. The term of employment of the
Executive under this Agreement shall be for
the Term, unless terminated pursuant
to Section 9 of this Agreement.
Notwithstanding the foregoing, the term of the
Executive's employment hereunder shall
continue beyond the Term on a year-to-
year basis, subject to Section 9 hereof,
unless either party gives notice of
termination to the other in accordance with
the terms of this Agreement.
6. Base
Salary Compensation; Annual Bonus. (a) For all
services to be rendered by the Executive
under this Agreement, excluding
services as an officer, director and member
of any committee, and such duties as
the Board may assign to him in accordance
with Section 3 hereof, the Company
agrees to pay the Executive a base salary
of $200,000 per annum, payable at such
times as is customary for employees of the
Company and in accordance with the
normal payroll practices of the
Company.
(b) Effective
January 1,2005 and on each subsequent January
1 during the Term, the Executive shall be
entitled to receive an annual cash
bonus in an amount determined by the
Board.
7. Other
Compensation. The Executive will participate in a
Company Stock Incentive Plan pursuant to
which the Executive will have the
option to purchase shares of the voting
common stock of the Company for a period
of years and at an option price determined
by the Board.
8. OTHER BENEFITS.
A. The Executive shall be entitled to participate in any
disability, medical or life insurance or
other similar plan or arrangement, any
stock bonus, purchase or option plan and
any bonus or profit sharing plan or
retirement plan or other fringe benefit
provided by the Company to its
executives generally. The Company shall
reimburse the Executive for reasonable
out-of-pocket expenses incurred in
connection with the Company's business,
including travel expenses, food, and
lodging while away from home, subject to
such policies as Company may
<PAGE>
from time to time reasonably establish for
its employees and subject to
substantiation of expenses as required
under applicable federal and state tax
laws and regulations. The Company shall
cause its wholly-owned subsidiary,
Beijing Med-Pharm Marketing Calculating Co.
Ltd. ("BMP China"), to arrange for
the Executive's use of an automobile while
the Executive is working on Company
and/or BMP China business in The People's
Republic of China.
B. The Executive shall be entitled to receive four weeks of
paid vacation during each year of this
Agreement, which shall be taken at such
time or times as will not unreasonably
hinder or interfere with the Executive's
business or operations. Vacation time may
be accrued from year to year in
accordance with the Company's general
vacation policy.
C. Death Benefit and Life Insurance.
I. The
Executive is entitled to participate in any life
insurance, accidental death and
dismemberment and travel accident plans
maintained by the Company for its
employees, on terms no less favorable than
those extended to any other senior
executive of the Company.
II. The Company
may, if it so chooses, apply for and procure
in its own name, and for its own benefit,
additional life insurance and
disability insurance on the Executive, and
the Executive shall have no right,
title or interest therein.
III. The Executive
agrees to submit to any medical or other
examination, and to execute any application
or other instrument, reasonably
necessary to obtain any policy of insurance
under this Section.
D.
Liability Insurance. The Company w
