Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the
17th day of May, 2012 and shall be deemed to have been effective on the 17th day
of May, 2012 (the “Effective Date”) by and between Zhenggang Wang, an individual
(“Mr. Wang”), and China 3C Group., a Nevada corporation (the “Company”).

 

RECITALS

 

The Company desires to employ Mr. Wang as its Chief Executive Officer (“CEO”)
and Chairman and Mr. Wang agrees to serve in the employ of the Company, all on
the terms and conditions hereinafter provided.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties hereby agree as
follows:

 

Article I
EMPLOYMENT

 

1.1           Employment. The Company hereby employs Mr. Wang as its CEO and
Chairman and Mr. Wang hereby accepts employment by the Company upon the terms
and conditions contained in this Agreement.

 

1.2           Office and Duties. Mr. Wang shall serve the Company as its CEO and
Chairman. As CEO, Mr. Wang. shall perform such duties as are customarily
associated with this position and all such other duties and responsibilities as
are assigned by the Board of Directors of the Company (the “Board”). Mr. Wang
accepts such employment with the Company and shall perform and fulfill such
other duties as are assigned to him hereunder consistent with his status as a
senior executive of the Company, devoting his best efforts and all of his
professional time and attention to accomplish the performance and fulfillment of
his duties and to the advancement of the best interests of the Company, subject
only to the direction, approval, and control of the Board

 

1.3           Place of Employment. In connection with his employment by the
Company, Mr. Wang shall be based in the HangZhou City, People’s Republic of
China except for required travel on Company business.

 

1.4           Term. The term of this Agreement shall commence on the Effective
Date and shall continue for a period of 36 months until May 17, 2015 unless
earlier terminated as set forth herein, and thereafter on a month to month basis
unless and until terminated upon no less than 30 days prior written notice by
either the Company or Mr. Wang The period of time between the commencement and
termination of this Agreement is referred to herein as the “Term.”

 

 

 

 

1.5          Compensation.

 

(a)          Salary. The Company shall pay Mr. Wang as compensation a base
salary in cash of (i) $40,000 per annum for the year beginning on the Effective
Date and ending on the first anniversary of the Effective Date, (ii) $20,000 per
annum for the year beginning on the first anniversary of the Effective Date and
ending on the second anniversary of the Effective Date and (iii) $20,000 per
annum for the year beginning on the second anniversary of the Effective Date and
ending on the third anniversary of the Effective Date. All salary shall be paid
in installments at such times as the Company customarily pays its other senior
executive employees.

 

(b)          Restricted Stock Grant On the Effective Date, the Company shall
grant to Mr. Wang, 17,500,000 restricted shares of the Company’s common stock
(the “Restricted Shares”) pursuant to the Company’s 2011 Restricted Stock Plan.
5,833,333 of the Restricted Shares shall vest on the first anniversary of the
Effective Date, 5,833,333 of the Restricted Shares shall vest on the second
anniversary of the Effective Date and 5,833,344 of the Restricted Shares shall
vest on the third anniversary of the Effective Date provided, in each case, that
Mr. Wang continues to serve the Company as CEO on such applicable vesting date.

 

(c)          Payment and Reimbursement of Expenses. Effective as of the date
hereof, and for the remainder of the Term, the Company shall pay or reimburse
Mr. Wang for all reasonable travel, entertainment and other out-of-pocket
expenses incurred by Mr. Wang in performing his obligations under this
Agreement, consistent with past practices; provided, that, Mr. Wang properly
accounts therefore in accordance with the Company’s expenses reimbursement
policies.

 

(d)          Employee Benefits. During the term of this Agreement, Mr. Wang
shall be provided all employee benefits provided by the Company to its
management and all other Company salaried employees, including without
limitation, all medical insurance and life insurance plans or arrangements and
shall be entitled to participate in all pension, profit sharing, stock option
and any other employee benefit plan or arrangement established and maintained by
the Company, all subject, however, to the Company rules and policies then in
effect regarding participation therein.

 

1.6          Termination of Employment.

 

(a)          Severance upon Termination without Cause. If Mr. Wang’s employment
is terminated by the Company without Cause (as defined below) (the date of
termination is referred to as the “Termination Date”), then the Company shall
pay Mr. Wang in lieu of other damages, an amount (the “Severance Payments”)
equal to his then current base salary payable in installments at the same time
the Company pays salary to its other senior executive employees for a period of
one year (the “Severance Period”). The Company shall have no liability to make
any Severance Payments as provided for in this paragraph unless Mr. Wang
complies with all provisions in Article II hereof. In addition, (i) [any Company
Restricted Shares not vested at the time of termination but that are scheduled
to vest within one year of the Termination Date shall immediately vest] and (ii)
the Company shall maintain during the Severance Period all employee benefit
plans and programs which Mr. Wang participated in immediately prior to such
termination.

 

-2-

 

 

(b)          Voluntary Termination; Termination for Cause. If Mr. Wang’s
employment with the Company is terminated for “Cause” by the Company (as defined
below) or if Mr. Wang voluntarily terminates his employment with the Company at
any time, then (i) all payments of compensation by the Company to Mr. Wang
hereunder will terminate immediately (except as to amounts already earned), and
(ii) any Company Restricted Shares not vested at the time of termination shall
immediately terminate.

 

(c)          Cause. For purposes of this Agreement, “Cause” shall mean:
(i) Mr. Wang’s continued substantial violations of his employment duties (other
than a failure resulting from his inability to perform his duties because of
illness or other physical or mental incapacity (based on a medical report
provided to the Company) after Mr. Wang has received written demand for
performance from the Company’s Board which sets forth the factual basis for the
Company’s belief that he has not substantially performed his duties;
(ii) Mr. Wang engaging in illegal conduct that was or is reasonably likely to be
materially injurious to the business or reputation of the Company or its
affiliates; (iii)  Mr. Wang’s violation of a law or regulation materially
applicable to the Company’s business; (iv) Mr. Wang’s material breach of the
terms of any provision of this Agreement; or (v) Mr. Wang being convicted, in
any court of competent jurisdiction, of any crime (other than a traffic
violation) or committing any act of moral turpitude, dishonesty or fraud
against, or the misappropriation of material property belonging to, the Company
or its affiliates.

 

Article II
RESTRICTIVE COVENANTS

 

2.1          Non-Competition. Mr. Wang agrees that at all times while he is
employed by the Company and, regardless of the reason for termination of his
employment or this Agreement, for a period of 2 years thereafter (the
“Restrictive Period”), unless Mr. Wang is not paid all amounts due to him under
this Agreement, he will not, directly or indirectly, approach, solicit business
from, or otherwise do business or deal with any customer of the Company in
connection with any product or service competitive to any provided by the
Company.

 

2.2          Non-solicitation of Employees. During the Term and, unless Mr. Wang
is not paid all amounts due to him under this Agreement, the Restrictive Period,
Mr. Wang shall not in any manner, directly or indirectly(a) solicit, induce or
encourage or attempt to solicit, induce or encourage, any employee of the
Company to leave the Company, (b) hire any employee of the Company or (c)
otherwise interfere with the Company’s employment relationship with any
employee. The word “employee” in this Section 2.2 means any person who is or was
employed by the Company or any of its affiliates at the time of, or within 180
days prior to, such solicitation, inducement, encouragement, hiring or
interference.

 

2.3          Non-interference with Contract. During the Term and, unless Mr.
Wang is not paid all amounts due to him under this Agreement, the Restrictive
Period, other than in connection with, for the benefit of, or in furtherance of
the Company’s business, Mr. Wang shall not in any manner, directly or indirectly
solicit, encourage or induce, or attempt to solicit, encourage or induce, any
vendor, supplier or other third party with whom the Company is doing business or
has a contract as of the date of termination, of employment, to terminate such
vendor’s, supplier’s or other third party’s business relationship or contract
with the Company.

 

-3-

 

 

2.4           Confidentiality. Mr. Wang recognizes that, by virtue of his
employment with the Company, he will have access to Confidential Information (as
defined below) relating to the Company’s business. Mr. Wang agrees that such
Confidential Information is a valuable asset, and if it were to be known or used
by others engaged in a similar business, it would be harmful and detrimental to
the Company’s interests. Accordingly, except as may be required or appropriate
for the performance of Mr. Wang’s duties in the normal course of business, or
unless specifically authorized in writing by the Board of the Company, Mr. Wang
shall not use or disclose, either during or after the Term, any Confidential
Information, except for any Confidential Information required to be disclosed by
law or to comply with a request by a court or governmental authority (pursuant
to a subpoena or otherwise), but only if Mr. Wang promptly notifies the Company
of the required or requested disclosure so the Company may seek a protective
order to prevent disclosure of such Confidential Information.

 

For purposes of this Agreement, “Confidential Information” shall mean any and
all information relating to the business, finances, customers, clients and
operations of the Company, whether obtained by or furnished to Mr. Wang before
or after the date hereof, and regardless of the manner in which it is obtained
or furnished. Confidential Information does not include, however, information
which: (a) is or becomes generally available to the public other than as a
result of an impermissible disclosure by Mr. Wang; (b) was known by or made
available on a non-confidential basis to Mr. Wang prior to his employment with
the Company, or (c) becomes available to Mr. Wang on a non-confidential basis
from a Person who is not known by Mr. Wang to be bound by a confidentiality
agreement with or other obligation of secrecy to the Company.

 

2.5           Breach of Restrictive Covenants. The period of time during which
Mr. Wang is prohibited from engaging in business practices pursuant to the
restrictive covenants set forth in Sections 2.1 through 2.3 shall be extended by
the length of time during which Mr. Wang is in breach of any such covenant.

 

2.6           Condition Precedent. So long as the Company is in compliance with
its obligations under Sections 1.5 and 1.6, the restrictive covenants set forth
in Sections 2.1 through 2.5 are essential elements of this Agreement and
enforceable by the Company, and, but for Mr. Wang’s agreement to comply with
such covenants, the Company would not have entered into this Agreement. Such
covenants are for the benefit of the Company and may be enforced by the Company
and by any Person succeeding to the business of the Company pursuant to a merger
or purchase of all or substantially all the assets or outstanding voting stock
of the Company. Except as otherwise provided in the first sentence of this
Section 2.6, such covenants by Mr. Wang shall be construed as agreements
independent of any other provision contained in this Agreement, and the
existence of any claim or cause of action of Mr. Wang against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants.

 

2.7           Injunctive Relief. Mr. Wang acknowledges that the services to be
rendered by him under this Agreement are extraordinary and unique and are vital
to the success of the Company, and that damages at law shall be an insufficient
remedy in the event that Mr. Wang violates or threatens to violate any of the
terms of Sections 2.1 through 2.5, and the Company shall be entitled, upon
application to a court of competent jurisdiction, to seek injunctive relief
(including temporary restraining orders) to enforce any or all of the provisions
of said sections, without being required to show any actual damage or to post an
injunction bond or other security. The foregoing injunctive relief shall be in
addition to any other rights and remedies available under applicable laws.

 

-4-

 

 

Article III
MISCELLANEOUS

 

3.1         Notices. All notices, requests, demands and other communications
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing or electronically and shall be deemed to have been
duly sent, given, made and received when personally delivered, or when sent by
confirmed telecopy or other electronic means or one business day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt, addressed as set forth below:

 

If to Mr. Wang:

 

Zhenggang Wang

368 HuShu Nan Road

HangZhou City, Zhejiang Province

China 310014

Fax:

Phone: 086-0571-88381700

Email:

 

If to the Company:

 

China 3C Group

368 HuShu Nan Road

HangZhou City, Zhejiang Province

China 310014

Fax:

Phone: 086-0571-88381700

Email:

 

Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this section for the giving of notice, which shall be effective only upon
receipt.

 

3.2         Severability. The provisions of this Agreement are independent of
and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part. If any
provision of this Agreement is held to be unenforceable for any reason, it shall
be adjusted rather than voided, if possible, in order to achieve the intent of
the parties to the extent possible.

 

-5-

 

 

3.3           Entire Agreement; Amendment. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. This Agreement may not be modified or amended other
than by an agreement in writing executed by the parties hereto.

 

3.4           Waiver. Neither the failure nor any delay on the part of either
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.

 

3.5           Interpretation. The parties hereto acknowledge and agree that (i)
each party and each party’s counsel have reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its revision, (ii) the rule
of construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement,
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto and not in favor of or against any party regardless of
which party was generally responsible for the preparation of this Agreement.

 

3.6           Headings. The headings of paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.

 

3.7           Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada, without giving effect to its
principles of conflict of laws.

 

3.8           Survival. The covenants and agreements of the parties set forth in
Article II are of a continuing nature and shall survive the expiration,
termination or cancellation of this Agreement, regardless of the reason
therefore and in a manner consistent with the applicable section.

 

3.9           Binding Effect. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, personal representatives, successors and assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the activities or assets of the Company. The Company shall
require and cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all or substantially all, of the business or
assets of the Company, by written agreement in form and substance satisfactory
to Mr. Wang, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place; provided, however, that any such succession
or assignment shall not relieve the Company from its continuing responsibility
and liability for the complete payment and performance of all obligations owed
to Mr. Wang under this Agreement.

 

-6-

 

 

3.10         Forum Selection. Any litigation based hereon or arising out of,
under or in connection with this Agreement, may be brought and maintained
non-exclusively in the courts of the State of Nevada or in the United States
District Court for the District of Nevada.

 

3.11         Counterparts. This Agreement may be executed in counterparts and
multiple originals, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

-7-

 

 

 

IN WITNESS WHEREOF, the Company has caused this AGREEMENT to be executed by its
duly authorized representative, and Mr. Wang has signed this Agreement, all as
of the day and year first above written.

 

  CHINA 3C GROUP       By:           Title:               Zhenggang Wang

 

-8-