EXHIBIT 10.4

 

  EMPLOYMENT AGREEMENT       

Party A (Employer)

      

Name: Qingdao Sheng Yuan Dairy Co., Ltd. Beijing Representative Office

      

Address: Room 2903, Tower A, No 39, East 3rd Ring Road, Chaoyang District,
Beijing

 

Party B (Employee):

      

Name: Weiguo Zhang                                        Sex: Male

      

ID Number:

    

--------------------------------------------------------------------------------

Party A:

Name: Qingdao Sheng Yuan Dairy Co., Ltd. Beijing Representative Office

Legal Representative (or Person in Charge): Liang Zhang

Company address: Room 2903, Tower A, No 39, East 3rd Ring Road, Chaoyang
District, Beijing

Party B:

Name: Weiguo Zhang

Nationality: U.S.

Number of ID (or other proof of ID):                     

Domicile:                     

Post Code:                     

Place of Residence Registration:             Street (Town)             District
(County)             Province (Municipality)

Adhering to the principle of voluntariness and equality and in accordance with
the Labor Law of the People’s Republic of China and related regulations
currently in effect, Party A and Party B hereby enter into this Agreement for
joint observance upon mutual agreement through consultation.

I. Term of Employment Agreement

Article 1

Fixed-term contract: The term of this Agreement shall commence on January 1,
2007 and expire on December 31, 2008. Among which,             days shall be the
probationary period expiring on             .

Article 2

Contract that sets the completion of a specific task as the term to end the
contract: The term of this Agreement shall commerce on             and expire
upon completion of             .

 

2

--------------------------------------------------------------------------------

II. Job Description

Article 3

Party A employs Party B on President position (type of work) as needed by its
work.

Article 4

Party B shall accept Party A’s work arrangement and meet the requirement for
quantity and quality set forth for his completion of the task on the position.
The task and responsibility of the specific position (type of work) is as
follows: As set out in Post Description, Work Task (Plan) and Performance
Evaluation Form.

Article 5

If, as verified by Party A in its appraisal conducted pursuant to its criteria,
Party B is incompetent for the position (type of work), Party A may change Party
B’s position (type of work). In the event of any change in the operation during
the performance of this Agreement, Party B’s position (type of work) may also be
changed upon mutual agreement of the Parties through consultation.

III. Remuneration

Article 6

Party A shall, pursuant to the requirements of the state and in light of its
actual condition, independently formulate its own post salary distribution
system and determine the form and standard of salary payment to Party B.

Article 7

Party B shall provide normal labor service to Party A within the statutory
working hours and Party A shall, prior to the     day of each month, pay Party B
salary, which shall be US$ 50,000 per year before tax, in the form of currency.

Article 8

If Party A practices piecework wage system, the matters relating to salary shall
be handled pursuant to Party A’s wage system, subject to the requirements of the
state and the municipality regarding minimum salary.

Article 9

During the performance of this Agreement, Party A may adjust Party B’s
remuneration appropriately, depending on Party A’s operating condition and Party
B’s performance.

IV. Insurance and Benefits

Article 10

Party A shall make social insurance contribution for Party B pursuant to the
regulations of the state and the municipality and the social insurance
contribution payable by Party B shall be withheld and paid by Party A on behalf
of Party B.

 

3

--------------------------------------------------------------------------------

Article 11

If Party B suffers from an illness or non-work-related injury, the matters
relating to medical benefits and sick pay shall be handled in accordance with
the regulations of the state and the municipality.

Article 12

If Party B suffers from an occupational disease or work-related injury, Party A
shall, in accordance with the regulations of the state, provinces and
municipality, ensure Party B’s receipt of medical treatment and arrange a
disability assessment and the matters relating to the salary and insurance
benefit shall be handled pursuant to the regulations of the state and the
municipality.

Article 13

If Party B deceases for illness or for work-related or non-work-related reason
during the term of this Agreement, the treatment under such circumstance shall
be determined pursuant to the regulations of the state and the municipality.

Article 14

The benefits to which a female employee is entitled in her pregnancy,
confinement or nursing period shall be determined pursuant to the regulations of
the state, provinces and municipality.

Article 15

Other insurance benefits to which Party B is entitled shall be determined
pursuant to the regulations of the state, province and municipality.

V Amendment, Discontinuance, Rescission and Termination of the Employment

Agreement and Economic Compensation

Article 16

This Agreement shall be amended appropriately if there is any change in the
laws, regulations or policies pursuant to which this Agreement is entered into.

Article 17

In the event of a major change in the objective circumstances pursuant to which
this Agreement is entered into, which rendered this Agreement incapable of being
performed, this Agreement may be appropriately amended upon mutual agreement of
the Parties through consultation. The Parties shall enter into an amendment
agreement as an appendix to this Agreement.

The Parties may make any amendment they deem necessary to this Agreement upon
mutual agreement of them. The Parties shall enter into an amendment agreement as
an appendix to this Agreement.

 

4

--------------------------------------------------------------------------------

Article 18

This Agreement may be rescinded upon mutual agreement by Party A and Party B. If
the rescission of this Agreement is proposed by Party A, Party A shall pay
economic compensation to Party B pursuant to the regulations of the state and
the municipality.

Article 19

Party A may rescind this Agreement at any time without a thirty (30) days prior
written notice to Party B if Party B falls under any of the following
circumstances:

 

(1) It is proved, during the probationary period, that Party B has failed to
meet employment requirements;

 

(2) Party B has seriously violated labor discipline or the rules and regulations
of Party A;

 

(3) Party B has committed serious dereliction of his duties or graft, causing
serious losses to Party A;

 

(4) Party B has divulged any of trade secrets of Party A, causing losses to
Party A;

 

(5) Party B undergoes re-education through labor or is held criminally liable in
accordance with law; or

 

(6) Other circumstances set forth by laws and regulations.

Article 20

The Parties may discontinue their performance of this Agreement under any of the
following circumstances:

 

(1) The Parties have reached mutual agreement;

 

(2) Any restriction is imposed by the public security, national security or
judicial authorities on the personal liberty of Party B due to Party B’s
suspected unlawful activity or criminal offense;

 

(3) Any event of force majeure occurs; or

 

(4) Other circumstances set forth by laws and regulations.

If the condition for performing this Agreement remain in place after the end of
the circumstance that causes discontinued performance, this Agreement shall
continue to be performed.

Article 21

In any of the following circumstances, Party A may terminate this Agreement with
a thirty (30) days prior written notice to Party B and shall pay economic
compensation to Party B pursuant to the regulations of the state and the
municipality:

 

(1)

After undergoing a period of medical treatment, Party B with an illness or
non-work-related injury is unable to perform his original work duties or another
job

 

5

--------------------------------------------------------------------------------

 

rearranged by Party A or, no longer satisfies the regulations of the state or
the municipality concerning eligibility for certain industry or post, as a
result of which Party A is incapable of assigning other post;

 

(2) Party B is not competent for his position and remains so even after training
or changing his position;

 

(3) A major change in the objective circumstances pursuant to which this
Agreement was entered into has rendered this Agreement incapable of being
performed and Party A and Party B fail to reach agreement on amendment to this
Agreement; or

 

(4) Other circumstances set forth by laws and regulations.

Article 22

If Party A is in a period of statutory reorganization due to its imminent
bankruptcy or encounters major difficulties in its operations, it shall inform
the trade union or all workers of the situation thirty (30) days in advance,
hear the opinions of the trade union or all workers, and report to the labor and
social security authority before rescinding the Agreement; provided that Party A
shall pay economic compensation to Party B pursuant to the regulations of the
state and the municipality.

Article 23

If Party A is dismantled, dissolved or declared bankrupt, this Agreement shall
be rescinded automatically, in which case Party A shall pay economic
compensation to Party B pursuant to the regulations of the state and the
municipality.

Article 24

Party A may not rescind this Agreement in accordance with the provisions of
Article 21 and 22 hereof in any of the following circumstances:

 

(1) Party B suffers from an occupational disease or has sustained work-related
injury and has been determined to be disabled;

 

(2) Party B suffers from an illness or non-work-related injury and the
proscribed time period of medical treatment has not expired;

 

(3) Party B, in case of a female employee, is in her pregnancy, confinement or
nursing period;

 

(4) Party B has been working for the employer for 10 or more consecutive years
and is less than 5 years away from the statutory age for his retirement;

 

(5) Party B is a demobilized serviceman or a retired serviceman transferred to
civilian work and has worked for less than three years after retiring from the
service;

 

(6) Party B is a worker converted from a farmer due to requisition of land for
construction and has worked for less than three years after beginning his first
job;

 

(7) Party B is in the compulsory military service period;

 

6

--------------------------------------------------------------------------------

(8) The collective negotiating representative of the workers has held the
position of the representative for less than 5 years within the term of the
employment agreement; or

 

(9) Other circumstances set forth by laws and regulations.

In the event of expiry of this Agreement in the circumstances described in
clauses (2) and (3) of this Article 24, the term of this Agreement shall be
extended until the expiry of the period of medical treatment or the nursing
period.

Article 25

Party B may rescind this Agreement by giving thirty (30) days’ prior written
notice to Party A.

Article 26

Party B may notify Party A at any time to rescind the Agreement without prior
notice in any of the following circumstances:

 

(1) Party B is in the probationary period;

 

(2) Party A has coerced Party B to work by violence, threat or illegal
restriction on Party B’s personal liberty;

 

(3) Party A fails to pay remuneration or provide working conditions in
accordance with the terms of this Agreement; or

 

(4) Party A fails to pay social insurance contribution for the worker in
accordance with law.

In the event of rescission of this Agreement in the circumstances described in
clause (1) of this Article 26, Party A will not pay economic compensation to
Party B.

Article 27

Party B may not rescind this Agreement in any of the following circumstances:

 

(1) The result of training received by Party B, the expenses for which are borne
by Party A, fails to meet the requirements of the Training Agreement, or Party B
has not completed its service term set forth in this Agreement;

 

(2) This Agreement is being performed and the production and operational needs
really necessitate Party B’s continued service; or

 

(3) Party B acts as key technical and operational person in an uncompleted major
task of Party A or under an uncompleted contract signed by Party B.

Article 28

This Agreement shall terminate in any of the following circumstances:

 

(1) The term of this Agreement expires;

 

(2) Party B retires, resigns or deceases;

 

7

--------------------------------------------------------------------------------

(3) Party A’s subject qualification is vacated in accordance with law; or

 

(4) Other circumstances set forth by laws and regulations.

Article 29

After rescission or termination of this Agreement by the Parties, Party A shall
handle the formalities for transfer of social insurance and file for Party B.

VI. Labor Protection and Working Conditions

Article 30

Party A must provide Party B with labor safety and sanitary conditions
consistent with the requirements of the state and the municipality and necessary
labor protection articles.

Article 31

Party A must establish and perfect labor safety and sanitation system and
procedures for safe operation and production and educate Party B on labor
security and sanitation.

Article 32

Party A must take special labor protection measures for female employees and
underage workers pursuant to the regulations of the state and the municipality.

Article 33

The Parties shall strictly comply with the industrial accident and occupational
disease reporting system adopted by the state and the municipality. Party B must
strictly comply with the procedures for safe operation in the course of
production (work).

VII. Working Hours, Break and Vacations

Article 34

Party A will arrange Party B to work under the working hours system described in
clause (3) below:

 

(1) Standard working hours system, under which Party B will work a maximum of
eight hours a day and on average a maximum of forty hours a week.

 

(2) The working hours system of comprehensive calculation, under which Party B’s
daily and weekly working hours on average shall not exceed the statutory working
hours.

 

(3) Flexible working hours system, under which the working hours, break and
vacation of Party B shall be agreed upon by the Parties through consultation,
subject to ensured completion of Party A’s work assignments

The practice of the working hours system described in clause (2) or (3) above
shall be subject to approval by the labor and social security administrative
authority of the municipality..

 

8

--------------------------------------------------------------------------------

Article 35

Party A shall have the right to reasonably adjust or arrange the rest days of
Party B, as needed by work.

Article 36

In case of extension of working hours or working on holidays under any of the
following circumstances, Article 34 shall not apply:

 

(1) There is a need for taking urgent measures as a result of occurrence of
natural disasters or accidents or for other reasons that threaten people’s life
and health or the security of state property;

 

(2) There is a need for timely rush-repair of production equipment,
transportation routes or public facilities that fail and as a result affect
production and public interests;

 

(3) Rush-repair and maintenance of equipment have to be conducted on statutory
or public holidays;

 

(4) Work can not be discontinued on statutory or public holidays; or

 

(5) Other circumstances set forth by laws and regulations.

Article 37

Party A shall ensure Party B’s right to rest pursuant to the regulations of the
state and the municipality and during the term of this Agreement, Party B shall
be entitled to statutory holidays and matrimonial leave, bereavement leave and
other paid leaves as set forth by the state and the municipality.

VIII. Labor Discipline

Article 38

Party A shall, in accordance with the labor laws, regulations, rules and
relevant policies of the state and in light of its actual condition, formulate
and perfect rules, regulations and labor disciplines.

Party B shall strictly comply with the rules and regulations and labor
discipline of Party A, observe the operation procedures and work rules, submit
to the management of Party A and treat as confidential the trade secret of Party
A, take good care of Party A’s property and adhere to professional ethics and
actively participate in the training programs organized by Party A in order to
improve his performance.

Article 39

Party B shall comply with all rules and regulations set forth by Party A.

Article 40

If Party B breaches any of the rules and regulations and labor discipline of
Party A, Party A may, pursuant to its rules and regulations, take appropriate
measures ranging from criticism for education purpose or administrative
disciplinary punishment to dismissal or rescission of this Agreement, depending
on actual circumstance.

 

9

--------------------------------------------------------------------------------

IX. Liability for Breach of Contract

Article 41

This Agreement shall be strictly complied with by the Parties upon its
conclusion. In the event of breach of this Agreement, the breaching Party shall
bear the liability for breach by paying the other Party liquidated damages
calculated by multiplying the duration of default (month) by 10% of the average
salary income of the non-breaching Party in the six months prior to the
rescission of this Agreement. If the breaching Party causes any economic losses
to the other Party, the breaching Party shall, according to the consequences and
extent of liability, compensate the other Party therefor.

Article 42

The Parties shall enter into a training agreement as a appendix hereto in
respect of the training received by Party B, the expenses for which is born by
Party A, clarifying the term of service after the training and liability for
breach. If Party B does not perform the training agreement without reason, Party
B shall pay the training expenses to Party A pursuant to the agreement and in
case there is no such agreement, one-fifth of the training expenses shall be
exempted for each year of Party B’s performance after the training.

Article 43

The Parties shall enter into ad hoc agreement as appendix hereto in respect of
such matters as duration of the period in which Party A’s trade secret shall be
kept confidential and liability for breach. In the event of breach by Party B of
trade secret agreement, Party B shall bear liability for breach and compensate
Party A for the actual economic losses incurred by Party A as a result of such
breach and the liability for damages in connection with the breach shall be
determined pursuant to the agreement between the Parties.

Article 44

If Party B unilaterally leaves office in violation of this Agreement, which
causes economic loss to Party A, and the liquidated damages paid by Party B is
insufficient to recover the actual loss incurred by Party A, Party B shall bear
the liability for damages by compensating Party A for the actual amount of loss.

X. Labor Dispute Resolution

Article 45

If any dispute arises in connection with any breach by a Party of this
Agreement, either Party may apply to Party A’s labor dispute mediation committee
for mediation. If the mediation comes to no avail, the Parties shall, within
sixty days of the occurrence of the dispute, apply for arbitration to the labor
dispute arbitration committee where Party A is located. Either Party disagreeing
with the arbitration award may, within fifteen days of its receipt of the
arbitration award, institute an action with the people’s court where Party A is
located.

 

10

--------------------------------------------------------------------------------

Article 46

This Agreement shall be filled out in fountain pen or roller pen. If altered
unilaterally or signed by a person not duly authorized, this Agreement shall be
void and null.

Article 47

This Agreement is executed in two counterparts which are of the same force and
effect, with each Party holding one counterpart. This Agreement shall take
effect on the date on which the Parties affix their signatures thereto.

Other matters to be agreed upon by the Parties

None.

 

Party A

   Party B (signature or seal)

Legal representative

  

(Authorized proxy) (signature or seal)

  

Date: January 1, 2007

   Date: January 1, 2007

 

11