Employment Agreement
This EMPLOYMENT
AGREEMENT (“Agreement”) is dated on May 1, 2009 between
Veronica J. Chen (the “Executive”), a citizen of China,
ID number 120106196601157029, and China Natural Gas, Inc. (the
“Company”), a Delaware Corporation, with primary
business address of No. 35 Tangyan Road, High-Tech Zone,
Xi’an 710065, Shaanxi Province, PRC.
WHEREAS, the
Company believes the Executive provides unique management services
for the Company and wishes to retain the Executive as its Chief
Financial Officer; and
WHEREAS, the
Company and the Executive have reached the following understanding
with respect to the Executive's employment by the Company for a
period of one year commencing on May 1, 2009;
and
WHEREAS, the
Company and the Executive desire to evidence their agreement in
writing and to retain the Executive by the Company on terms set
forth herein.
1. Employment,
Duties and Acceptance.
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Effective as of
May 1, 2009, the Company hereby agrees to the employment of the
Executive as the Chief Financial Officer ("CFO") and both parties
hereby accept such employment on the terms and conditions contained
in this Agreement. During the term of this Agreement, the Executive
shall devote herself to the business of the Company and she is
subject to the supervision and direction of the Board of Directors
of the Company ("Board" or "Board of Directors").
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The Company retains the Executive to serve as
the Company’s full time CFO. The scope of work and
responsibilities of the CFO include the following:
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(a)
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To proactively contact and market the company to
the investment community; set up good relationship and communicate
effectively with current and potential investors
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(b)
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To provide accurate information on the financial
resources, obligations and current activities of the Company to the
relevant external parties, including banks, funds, and
investors;
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(c)
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To formulate and implement relevant policies,
procedures and strategies to ensure the realization of the
Company’s financial strategy;
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(d)
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To establish a strong financial system and
strict internal control procedure;
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(e)
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To supervise all financial activities to ensure
their compliance with law and the Company’s
policy;
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(f)
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To be responsible for quality and timely filing
of accurate US GAAP financial reports;
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(g)
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To establish and direct a mechanism to timely
solve financial problems;
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(h)
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To establish and direct a mechanism for reducing
costs and increasing efficiency;
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(i)
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To be responsible for the Company’s
financial planning;
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(j)
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To participate in business development and
strategic planning;
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(k)
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To recommend investment policies, implement
investment strategies based on approved investment guidelines, and
to manage investment transactions;
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(l)
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To carry out strategic acquisition, capital
management, financing etc. pursuant to the requirements of the
Board of Directors;
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(m)
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To provide comments to the Executive Management
Team and the Board of Directors on financial issues of the
Company;
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(n)
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To actively aware of the changing rules and
regulations in the US and China;
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(o)
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Other responsibilities stipulated by the Board
of Directors.
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Meanwhile, the
CFO is the primary resource of the Chief Executive Officer
(“CEO”) and department directors with respect to
strategies and operations, and will be responsible for the
Company’s financial management and planning, including the
following: (1) Company strategy; (2) financial strategy; (3) budget
and management control; and (4) financial management.
Company
strategy
CFO shall play
a major role in coordinating a comprehensive strategy to maximize
Company value:
(1) Ensure the existing plans are
well based on the Company’s current business to maximize the
value to the Company;
1. Continuously
assess the plan’s value creation potential;
2. Ensure the
plans are targeted towards major problems faced by the Company. In
doing so, Executive should repeatedly research reasons and
possibilities related to changes in the Company’s operations
and provide external references for value creation (such as some
business of value to other possible owner);
3. Advise the
CEO and department directors regarding major proposals;
4. Formulate
criteria for financial control and establish mechanism for progress
assessment
(2) Assist in
developing the Company’s expansion strategy and creating
shareholder value.
1. Comment on
the current market opportunities closely related to the
Company’s business;
2. Evaluate the
Company’s capacity and assets to capitalize the market
opportunity; propose proper remedies for capacities
lacking;
3. Provide
business and financial evaluations regarding specific
proposals.
Financial
Strategy
CFO shall be
responsible for the formulation and implementation of comprehensive
financial plans and strategies to provide support for the company's
business and create greatest value for shareholders.
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(1)
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Propose capital
and dividend policies for value creation;
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(2)
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Design and
manage Company presentation of the Company’s operations and
plan to the financial community;
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(3)
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Negotiate major
financial transactions, including loans, stock offerings and
buybacks;
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Budget and
Management Control
CFO shall
formulate and implement a program to ensure the management obtains
correct information for goal setting, decision making and operation
supervising:
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(1)
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Coordinates
short-term budget compilation.
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(2)
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Evaluate main
performance standards of each business unit.
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(3)
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Ensure business
units are properly authorized;
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(4)
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Assess
performance of business units with CEO and department directors of
the performance evaluation of business unit.
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. Financial
Management
CFO shall
ensure effective management of the Company’s financial
issues:
(1) Ensure
timely reporting and effective compliance;
(2) Establish
internal control system to ensure the safety of the company's
assets;
(3) Ensure
effective and efficient management of cash / accounts receivables /
accounts payable;
(4) Perform
all tax reporting and tax obligations;
(5) Seek
opportunities to reduce the tax burden;
(6) Maintaining
close relationship with the Company’s banks;
(7)
Risk management and plan of the Company.
CFO shall be
responsible for maintaining and management of important external
relations, including:
1. Financial
institutions (Banks and investment Banks)
3. Supervising
authorities and tax authorities.
1.3. The
Executive shall perform his duties diligently and competently
pursuant to the requirements for the position.
1.4 Working
times: Except during periods of quarterly and annual filings with
Securities and Exchange Commission (“SEC”), CFO shall
spend half of his / her time in the Xi’an headquarter and
half at the Company’s subsidiary in Beijing.
1.5 The Board
may assign the Executive such general management and supervisory
responsibilities and executive duties for the Company as are
appropriate and commensurate with the Executive's position as CFO
of the Company.
2. Compensation
and Benefits.
2.1. The
Company shall pay to the Executive a salary of RMB 650,000 pre-tax
annually which equal to monthly salary of RMB 54,166. According to
relevant provisions of the Company, 80% of the salary (RMB 43,333)
is paid monthly and the remaining 20% (RMB 10,833 monthly / RMB
129,996) is paid one time after the Executive serves the Company
for one year. Salary of the Executive consist of three parts: base
salary, housing, and transportation. Each month, RMB 34,166 is paid
as base salary; since the Executive resides in Tianjin, Company
shall provide housing and business vehicle for the Executive which
represents RMB 20,000 each month. There is a three-month probation
period for the Executive. During the probation period, the Company
shall pay the Executive a monthly salary of RMB 34,666. During the
probation period, if not informed by written notice, monthly salary
is paid on the 20 th of
next month. If the payment date coincides with a holiday, the
salary will be paid on the first business day after the
holiday.
Since the
Executive works in Beijing for half of his / her employment period,
the Executive shall be entitled to at least six round-trip air
tickets from Xi’an to Beijing, excluding business trips.
Besides holidays and vacations, the Executive shall work in the
Company’s Beijing subsidiary with the traveling day be deemed
a working day.
The Company
shall provide the Executive with health insurance in Beijing or
Xi’an. Other benefits the Executive is entitled to will be
determined according to relevant policies of the
