YOU On Demand Holdings, Inc.: Exhibit 10.3 - Filed by newsfilecorp.com






Exhibit 10.3

Execution Version 

EMPLOYMENT AGREEMENT 

EMPLOYMENT AGREEMENT, dated January 31, 2014 (this
“Agreement”), between YOU ON DEMAND HOLDINGS, INC., a Nevada corporation
(the “Company”), and Weicheng Liu an individual having the address
specified on the signature page hereto (the “Executive”). 

BACKGROUND 

The Company has entered into a Series E Preferred Stock
Purchase Agreement, dated as of January 31, 2014 (the “Purchase
Agreement”), with C Media Limited (“C Media”) and certain
other purchasers party thereto (the “Other Purchasers” and together with
C Media, the “Purchasers”) pursuant to which the Company has agreed to
sell and the Purchasers have agreed to purchase 14,285,714 shares of Series E
Preferred Stock of the Company, par value $0.001 per share, for an aggregate
purchase price of $19 million. The execution and delivery of this Agreement by
the Executive and the Company is a condition precedent to the consummation of
the transactions contemplated by the Purchase Agreement. 

The Company wishes to secure the services of the Executive as
Chief Executive Officer of the Company upon the terms and conditions hereinafter
set forth, and the Executive wishes to render such services to the Company upon
the terms and conditions hereinafter set forth. 

AGREEMENT 

NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows: 

	1. 	
      Employment by the Company. The Company agrees to
      employ the Executive in the position of Chief Executive Officer of the
      Company and the Executive accepts such employment. The Executive shall
      have such responsibilities and duties as are consistent with his position,
      including as specified on Annex I hereto, and such other duties as
      assigned by the Board of Directors (the “Board”). During the term
      of this Agreement, the Executive will serve the Company faithfully,
      diligently and to the best of his ability, and will devote a majority of
      his business time and efforts to the business and affairs of the Company
      (including its Subsidiaries and Affiliates) and the promotion of its
      interests. Executive shall work primarily from the Company’s offices in
      Beijing, China.

	 	 
	2. 	
      Term of Employment. The term of this Agreement
      (the “Term”) shall be for the initial period commencing on the date
      hereof (the “Effective Date”) and ending on the second anniversary
      of the Effective Date, at which point it shall be automatically renewed
      for additional one year periods unless (a) either party hereto provides
      written notice to the other party that it elects not to renew the Term at
      least ninety (90) days before the end of the then-current term or (b) the
      Executive is earlier terminated as provided in Section 4 hereof
      (provided that the provisions of Section 6 hereof shall survive any
      such termination).








	3. 	
      Compensation and Benefits. As full compensation
      for all services to be rendered by the Executive to the Company and/or its
      Subsidiaries and/or Affiliates in all capacities during the Term, the
      Executive shall receive the following compensation and benefits:

	 	 	 	 
		3.1 	
      Salary.

	 	 	 	 
			3.1.1 	
      The Company will pay an annual base salary of RMB
      1,693,750 (the “Base Salary”). The Executive’s Base Salary will be
      reviewed no less frequently than annually by the Compensation Committee of
      the Board of Directors to determine whether or not such Base Salary should
      be adjusted in light of the Executive’s duties, responsibilities and
      performance.

	 	 	 	 
				
      The Executive’s Base Salary will be payable not less
      frequently than monthly or at more frequent intervals in accordance with
      the then customary payroll practices of the Company.]

	 	 	 	 
		3.2 	
      Bonus. The Company may pay an annual bonus if, as
      and when determined by the Compensation Committee of the Board in its sole
      discretion.

	 	 	 	 
		3.3 	
      Participation in Employee Benefit Plans; Other
      Benefits. The Executive shall be permitted during the Term to
      participate in all employee benefit plans, policies and practices now or
      hereafter maintained by or on behalf of the Company commensurate with the
      Executive's position with the Company. Nothing in this Agreement shall
      preclude the Company from terminating or amending any such plans or
      coverage so as to eliminate, reduce or otherwise change any benefit
      payable thereunder, so long as such change similarly affects all Company
      employees.

	 	 	 	 
		3.4 	
      Expenses. The Company shall pay or reimburse the
      Executive for all reasonable and necessary expenses actually incurred or
      paid by the Executive during the Term in the performance of the
      Executive's duties under this Agreement, upon submission and approval of
      expense statements, vouchers or other supporting information in accordance
      with the then customary practices of the Company.

	 	 	 	 
		3.5 	
      Withholding of Taxes. The Company may withhold
      from any benefits payable under this Agreement all federal, state, city
      and other taxes as shall be required pursuant to any law or governmental
      regulation or ruling.

	 	 	 	 
	4. 	
      Termination.

	 	 	 	 
		4.1 	
      Termination upon Death. If the Executive dies
      during the Term, the Executive’s employment shall terminate as of the date
      of his death.

	 	 	 	 
		4.2 	
      Termination upon Disability. If during the Term
      the Executive becomes physically or mentally disabled, whether totally or
      partially, so that the Executive is unable to perform his essential job
      functions hereunder for a period aggregating 180 days during any
      twelve-month period, and it is determined by a
physician acceptable to both the Company and the Executive that, by
      reason of such physical or mental disability, the Executive shall be
      unable to perform the essential job functions required of him hereunder
      for such period or periods, the Company may, by written notice to the
      Executive, terminate the Executive’s employment, in which event the Term
      shall terminate thirty (30) days after the date upon which the Company
      shall have given notice to the Executive of its intention to terminate the
      Executive’s employment because of the disability.



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	4.3 	
      Termination for Cause. The Company may at any time
      by written notice to the Executive terminate his employment immediately
      and, except as provided in Section 5.2 hereof, the Executive shall
      have no right to receive any compensation or benefit hereunder on and
      after the date of such notice, in the event that an event of “Cause”
      occurs. For purposes of this Agreement “Cause” shall
mean:

	 	 	 
		4.3.1 	
      the Executive breaches any material term of this
      Agreement and fails to cure such breach (where capable of cure) within 14
      days after the receipt of notice from the Board of such breach, which
      notice shall state in reasonable detail the facts and circumstances
      claimed to be a breach and of the intent of the Company to terminate the
      Executive's employment upon the failure of the Executive to cure such
      breach; or

	 	 	 
		4.3.2 	
      a good faith determination by the Board that the
      Executive has committed a felonious act of fraud, misappropriation,
      embezzlement, or theft or a breach of fiduciary duty involving personal
      profit; or

	 	 	 
		4.3.3 	
      the Executive is convicted of, or enters a no contest
      plea to, any criminal offense constituting a felony or a crime involving
      moral turpitude.

	 	 	 
	4.4 	
      Termination without Cause. The Company may
      terminate the Executive’s employment at any time, without cause, upon 30
      days' written notice by the Company to the Executive and, except as
      provided in Section 5.1 hereof, the Executive shall have no right
      to receive any compensation or benefit hereunder after such
      termination.

	 	 	 
	4.5 	
      Termination with Good Reason. The Executive may
      terminate his employment with “Good Reason”, by giving 30 days’ prior
      written notice of termination to the Company. For purposes of this
      Agreement “Good Reason” shall mean any of the following, without
      the Executive’s written consent:

	 	 	 
		4.5.1 	
      a material reduction in the Executive’s Base Salary
      (unless such reduction is pursuant to a general reduction in salary
      applicable to all similarly situated employees of the Company);

	 	 	 
		4.5.2 	
      any material diminution of the Executive’s authority,
      duties or responsibilities;



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	 	4.5.3 	
      a material change in the Executive’s principal place of
      employment to a location more than 50 miles from the Executive’s place of
      employment as of the Effective Date; or

	 	 	 
	 	4.5.4 	
      a material breach by the Company of this
  Agreement



Notwithstanding the above, the
occurrence of any of the events described in Sections
4.5.1, 4.5.2, 4.5.3 or 4.5.4 above
will not constitute a Good Reason unless and until the Executive gives the
Company notice, within thirty (30) calendar days after the occurrence of any of
the events described in Sections 4.5.1, 4.5.2,
4.5.3 or 4.5.4 above, that such circumstances constitute Good
Reason, and the Company thereafter fails to cure such circumstances within
thirty (30) days after receipt of such notice. 

	5. 	
      Severance Payments.

	 	 	 	 
		5.1 	
      Termination without Cause, with Good Reason, or
      Non-Renewal by the Company. If during the Term (a) the Company
      terminates the Executive’s employment pursuant to Section 4.4
      hereof (Termination without Cause), (b) the Company elects not to
      renew this Agreement pursuant to Section 2 hereof, or (c) the
      Executive terminates his employment pursuant to Section 4.5 hereof
      (Termination with Good Reason), all compensation payable to the Executive
      under Section 3 hereof shall cease as of the date of termination
      specified in the Company's or the Executive’s notice or the expiration of
      the then current term (the “Termination Date”), and the Executive
      shall be entitled to the following:

	 	 	 	 
			5.1.1 	
      (i)(A) if the Termination Date is within the initial two
      years of the Term, the Base Salary in effect on the Termination Date for a
      period of eighteen (18) months from the Termination Date, or (B) if
      termination is the result of Section 5.1(b) or the Termination Date is
      after the initial two years of the Term, the Base Salary in effect on the
      Termination Date for a period of twelve (12) months from the Termination
      Date, (the applicable period being referred to as the “Severance
      Period”), payable in cash in monthly installments beginning on the
      sixtieth (60th ) day following the Termination Date; (ii)
      benefits under group health and life insurance plans in which the
      Executive participated prior to termination through the Severance Period;
      (iii) all unpaid expenses described in Section 3.4, paid on or
      before the Termination Date; (iv) any earned but unpaid bonus pursuant to
      Section 3.2, paid on or before the Termination Date; and (v) all
      previously earned, accrued, and unpaid benefits from the Company and its
      employee benefit plans, including any such benefits under the Company's
      pension, disability, and life insurance plans, policies, and programs, if
      any, paid in accordance with the terms of the applicable plan, policy or
      program;



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	 	5.1.2 	
      notwithstanding the terms of any option or award
      agreements to the contrary, all outstanding unvested options, warrants or
      restricted stock granted to the Executive shall become fully vested on the
      Termination Date and, with respect to options and warrants, shall
      thereafter be exercisable for the full term of the option or
    warrant.




		
      If, prior to the expiration of the Severance Period, the
      Executive violates Section 6 hereof, then the Company shall have no
      obligation to make any of the payments that remain payable by the Company
      under clause (i) and (ii) of this Section 5.1 on or after the date
      of such violation. Notwithstanding the foregoing, payments of the amounts
      described in clauses (i) and (ii) of this Section 5.1 shall be
      conditioned on the delivery by the Executive, within forty-five (45) days
      following the Termination Date, and effectiveness of a release of any and
      all claims that the Executive may have against the Company through the
      date of termination, which release shall be in substantially the form
      attached as Annex II.

	 	 
	5.2 	
      Termination for Cause, Death or Disability. If
      this Agreement is terminated by the Company pursuant to Sections 4.1
      (Termination upon Death), 4.2 (Termination upon Disability) or
      4.3 (Termination for Cause) hereof or in the event the Executive
      elects not to renew this Agreement pursuant to Section 2, the
      Executive shall receive only the amounts specified in clauses (iii), (iv)
      and (v) of Section 5.1 hereof.




	6. 	
      Certain Covenants of the Executive.

	 	 	 	 
		6.1 	
      Covenants Against Competition. The Executive
      acknowledges that: (i) he is one of the limited number of persons who will
      develop the paid media distribution business of the Company (the
      “Company's Current Lines of Business”); (ii) the Company conducts
      such business in the People’s Republic of China; (iii) his work for the
      Company and its Subsidiaries and Affiliates, will bring him into close
      contact with many confidential affairs not readily available to the
      public; and (iv) the covenants contained in this Section 6 will not
      involve a substantial hardship upon his future livelihood. In order to
      induce the Company to enter into this Agreement, the Executive covenants
      and agrees that:

	 	 	 	 
			6.1.1 	
      Non-Compete. During the Term and for a period of
      one year following the Executive’s termination of employment with the
      Company pursuant to Section 4.3 (Termination for Cause),
      resignation by the Executive other than for Good Reason or in the event
      the Executive elects not to renew this Agreement pursuant to Section 2
      (the “Restricted Period”), the Executive shall not, in the
      People’s Republic of China (including all Special Administrative Regions
      thereof), (i) in any manner whatsoever engage in any capacity with any
      business competitive with the Company's Current Lines of Business for the
      Executive's own benefit or for the benefit of any person or entity other than the
      Company or any Subsidiary or Affiliate of the Company; or (ii) have any
      interest as owner, sole proprietor, shareholder, partner, lender,
      director, officer, manager, employee, consultant, agent or otherwise in
      any business competitive with the Company's Current Lines of Business;
      provided, however, that the Executive may hold, directly or indirectly,
      solely as an investment, not more than two percent (2%) of the outstanding
      securities of any person or entity which are listed on any national
      securities exchange or regularly traded in the over-the-counter market
      notwithstanding the fact that such person or entity is engaged in a
      business competitive with the Company's Current Lines of Business. In
      addition, during the Restricted Period, the Executive shall not develop
      any property for use in the Company's Current Lines of Business on behalf
      of any person or entity other than the Company, its Subsidiaries and
      Affiliates.



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	 	6.1.2 	
      Confidential Information. During the Term, and for
      a three year period following the Executive’s termination of employment,
      the Executive shall not, directly or indirectly, disclose to any person or
      entity who is not authorized by the Company or any Subsidiary or Affiliate
      of the Company to receive such information, or use or appropriate for his
      own benefit or for the benefit of any person or entity other than the
      Company or any Subsidiary or Affiliate of the Company, any documents or
      other papers relating to the Company's Current Lines of Business or the
      customers of the Company or any Subsidiary or Affiliate of the Company,
      including, without limitation, files, business relationships and accounts,
      pricing policies, customer lists, computer software and hardware, or any
      other materials relating to the Company's Current Lines of Business or the
      customers of the Company or any Subsidiary or Affiliate of the Company or
      any trade secrets or confidential information, including, without
      limitation, any business or operational methods, drawings, sketches,
      designs or product concepts, know-how, marketing plans or strategies,
      product development techniques or plans, business acquisition plans,
      financial or other performance data, personnel and other policies of the
      Company or any Subsidiary or Affiliate of the Company, whether generated
      by the Executive or by any other person, except as required in the course
      of performing his duties hereunder or with the express written consent of
      the Company; provided, however, that the confidential information shall
      not include any information readily ascertainable from public or published
      information, or trade sources (other than as a direct or indirect result
      of unauthorized disclosure by the Executive).

	 	 	 
	 	6.1.3 	
      Employees of and Consultants to the Company.
      During the Term and for the Restricted Period, the Executive shall not,
      directly or indirectly (other than in furtherance of the business of
      the Company), initiate communications with, solicit, persuade or attempt
      to persuade, entice, induce or encourage any individual who is then or who
      has been within the preceding 12-month period, an employee of or
      consultant to the Company or any of its Subsidiaries or Affiliates to
      terminate employment with, or a consulting relationship with, the Company
      or such Subsidiary or Affiliate, as the case may be, or to become employed
      by or enter into a contract or other agreement with any other person, and
      the Executive shall not approach any such employee or consultant for any
      such purpose or authorize or knowingly approve the taking of any such
      actions by any other person.



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	 	6.1.4 	
      Solicitation of Customers. During the Term and for
      the Restricted Period, the Executive shall not, directly or indirectly,
      initiate communications with, solicit, persuade, entice, induce, encourage
      (or assist in connection with any of the foregoing) any person who is then
      or has been within the preceding 12-month period a customer or account of
      the Company or its Subsidiaries or Affiliates, or any actual customer
      leads whose identity the Executive learned during the course of his
      employment with the Company, to terminate or to adversely alter its
      contractual or other relationship with the Company or its Subsidiaries or
      Affiliates.

	 	 	 
	 	6.1.5 	
      Business Opportunities. During the Term the
      Executive shall promptly disclose to the Company any business idea or
      opportunity which falls within the meaning of the Company's Current Lines
      of Business, which business idea or opportunity shall become the sole
      property of the Company.

	 	 	 
	 	6.1.6 	
      Intellectual Property. The Executive agrees that
      all Intellectual Property (as defined below) made or conceived by the
      Executive, either solely or jointly with others, during the Executive’s
      employment with the Company and within six (6) months after termination of
      such employment, whether or not such Intellectual Property is made or
      conceived during the hours of the Executive’s employment or with the use
      of the Company’s facilities, materials, or personnel, will be the property
      of the Company or its nominees. “Intellectual Property” means
      discoveries, concepts, and ideas, whether patentable or not, including
      apparatus, processes, methods techniques, and formulae, as well as
      improvements thereof or know-how related thereto, any “works made for
      hire” or other copyrighted or copyrightable material, and any notes,
      drawings, memoranda, correspondence, documents, records, notebooks, flow
      charts, computer programs and source and object codes, related or relating
      to any present or prospective activities of the Company or its affiliates.
      The Executive will, without royalty or any other additional consideration: (i) inform the Company promptly and
fully in writing of such Intellectual Property; (ii) assign to the Company all
the Executive’s right, title, and interest in and to such Intellectual Property;
(iii) assist the Company or its nominees to obtain, maintain and enforce the
Company’s rights with respect to such Intellectual Property; and (iv) execute,
acknowledge, and deliver to the Company such written documents and instruments,
and do such other acts, as may be necessary in the opinion of the Company to
obtain, maintain or enforce the Company’s rights with respect to such
Intellectual Property. 



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	 	6.2 	
      Rights and Remedies Upon Breach. If the Executive
      breaches, or threatens to commit a breach of, any of the provisions of
      Section 6.1 hereof (collectively, the “Restrictive
      Covenants”), the Company and its Subsidiaries and Affiliates shall, in
      addition to the rights set forth in Section 5.1 hereof, have the
      right and remedy to seek from any court of competent jurisdiction specific
      performance of the Restrictive Covenants or injunctive relief against any
      act which would violate any of the Restrictive Covenants, it being
      acknowledged and agreed that any such breach or threatened breach will
      cause irreparable injury to the Company and its Subsidiaries and
      Affiliates and that money damages will not provide an adequate remedy to
      the Company and its Subsidiaries and Affiliates. To the extent permitted
      by applicable law, each of the Company and the Executive waives any
      requirement for the posting of a bond or other security.

	 	 	 
	 	6.3 	
      Severability of Covenants. If any of the
      Restrictive Covenants, or any part thereof, is held by a court of
      competent jurisdiction or any foreign, federal, state, county or local
      government or other governmental, regulatory or administrative agency or
      authority to be invalid, void, unenforceable or against public policy for
      any reason, the remainder of the Restrictive Covenants shall remain in
      full force and effect and shall in no way be affected, impaired or
      invalidated, and such court, government, agency or authority shall be
      empowered to substitute, to the extent enforceable, provisions similar
      thereto or other provisions so as to provide to the Company and its
      Subsidiaries and Affiliates, to the fullest extent permitted by applicable
      law, the benefits intended by such provisions.



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	7. 	
      No Conflicts. The Executive agrees and
      acknowledges that his employment by the Company and compliance with this
      Agreement do not and will not breach any agreement made by the Executive
      to keep in confidence information acquired by him prior to or outside of
      his employment with the Company. The Executive will comply with any and
      all valid obligations which he may now have to prior employers or to
      others relating to confidential information, inventions or discoveries
      which are the property of those prior employers or others, as the case may
      be. The Executive has supplied or will promptly supply to the Company upon
      its request a copy of each written agreement setting forth any
      obligations. The Executive hereby agrees and acknowledges that he has not
      brought and will not bring with him for use in the performance of his
      duties at the Company any materials, documents or information of a former
      employer or any third party that are not generally available to the
      public, unless he has express written authorization from the owner thereof
      for possession and use of the Executive otherwise has undisputed
      proprietary rights to such material, documents or information.

	 	 	 
	8. 	
      Other Provisions.

	 	 	 
		8.1 	
      Notices. Any notice or other communication
      required or which may be given hereunder shall be in writing and shall be
      delivered personally, telecopied, telegraphed or telexed, or sent by
      certified, registered or express mail, postage prepaid, to the parties at
      the addresses of the respective parties as specified on the signature
      pages hereto or at such other addresses as shall be specified by the
      parties by like notice, and shall be deemed given when so delivered
      personally, telecopied, telegraphed or telexed, if delivered during
      regular business hours (or the next business day, if after regular
      business hours) or if mailed, three days after the date of mailing, as
      follows.

	 	 	 
		8.2 	
      Entire Agreement. This Agreement contains the
      entire agreement between the parties with respect to the subject matter
      hereof and supersedes all prior contracts and other agreements, written or
      oral, with respect thereto.

	 	 	 
		8.3 	
      Waivers and Amendments. This Agreement may be
      amended, modified, superseded, cancelled, renewed or extended, and the
      terms and conditions hereof may be waived, only by a written instrument
      signed by the parties or, in the case of a waiver, by the party waiving
      compliance. No delay on the part of any party in exercising any right,
      power or privilege hereunder shall operate as a waiver thereof, nor shall
      any waiver on the part of any party of any right, power or privilege
      hereunder, nor any single or partial exercise of any right, power or
      privilege hereunder preclude any other or further exercise thereof or the
      exercise of any other right, power or privilege hereunder.

	 	 	 
		8.4 	
      Governing Law, Consent to Jurisdiction, etc. All
      questions concerning the construction, validity, enforcement and
      interpretation of this Agreement shall be governed by and construed and
      enforced in accordance with the internal laws of the State of New York,
      without regard to the principles of conflicts of law thereof (except
      Section 5-1401 of New York’s General Obligations Law). Each party agrees
      that all legal proceedings concerning the interpretations, enforcement
      and defense of the transactions contemplated by this
      Agreement (whether brought against a party hereto or its respective
      affiliates, directors, officers, shareholders, employees or agents) shall
      be commenced exclusively in the state and federal courts sitting in the
      City of New York. Each party hereto hereby irrevocably submits to the
      exclusive jurisdiction of the state and federal courts sitting in the City
      of New York, New York for the adjudication of any dispute hereunder, and
      hereby irrevocably waives, and agrees not to assert in any suit, action or
      proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is
      improper. Each party hereto hereby irrevocably waives personal service of
      process and consents to process being served in any such suit, action or
      proceeding by mailing a copy thereof via registered or certified mail or
      overnight delivery (with evidence of delivery) to such party at the
      address in effect for notices to it under this Agreement and agrees that
      such service shall constitute good and sufficient service of process and
      notice thereof. Nothing contained herein shall be deemed to limit in any
      way any right to serve process in any manner permitted by law.



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	 	8.5 	
      Compliance with Section 409A. The parties to this
      Agreement intend that the Agreement complies with Section 409A of the
      Code, where applicable, and this Agreement will be interpreted in a manner
      consistent with that intention. Notwithstanding any other provisions of
      this Agreement to the contrary, and solely to the extent necessary for
      compliance with Section 409A of the Code, if as of the date of Executive’s
      “separation from service” (within the meaning of Section 409A of the Code
      and the applicable regulations) from the Company, (i) Executive is deemed
      to be a “specified employee” (within the meaning of Section 409A of the
      Code), and (ii) the Company or any member of a controlled group including
      the Company is publicly traded on an established securities market or
      otherwise, no payment or other distribution required to be made to
      Executive hereunder (including any payment of cash, any transfer of
      property and any provision of taxable benefits) solely as a result of
      Executive’s separation from service will be made earlier than the first
      day of the seventh month following the date on which the Executive
      separates from service with the Company, or if earlier within thirty (30)
      days of the Executive’s date of death following the date of such
      separation. Notwithstanding the foregoing, this provision will not apply
      to (a) all payments on separation from service that satisfy the short-term
      deferral rule of Treas. Reg. §1.409A-1(b)(4), (b) to the portion of the
      payments on separation from service that satisfy the requirements for
      separation pay due to an involuntary separation from service under Treas.
      Reg. §1.409A-1(b)(9)(iii), and (c) to any payments that are otherwise
      exempt from the six month delay requirement of the Treasury Regulations
      under Code Section 409A. Notwithstanding anything to the contrary herein,
      a termination of employment will not be deemed to have occurred for
      purposes of any provision of this Agreement providing for the payment of
      amounts or benefits upon or following a termination of employment unless
      such termination is also a “separation from service” within the meaning of
      Section 409A of the Code and, for purposes of any such provision of this
      Agreement, references to a “resignation,” “termination,” “termination of
      employment,” or like terms will mean a separation from service. For purposes of Section 409A of the Code, each payment
      made under this Agreement will be designated as a “separate payment”
      within the meaning of the Section 409A of the Code. Notwithstanding
      anything to the contrary herein, except to the extent any expense,
      reimbursement or in-kind benefit provided pursuant to this Agreement does
      not constitute a “deferral of compensation” within the meaning of Section
      409A of the Code: (x) the amount of expenses eligible for reimbursement or
      in-kind benefits provided to Executive during any calendar year will not
      affect the amount of expenses eligible for reimbursement or in-kind
      benefits provided to Executive in any other calendar year, (y) the
      reimbursements for expenses for which Executive is entitled to be
      reimbursed will be made on or before the last day of the calendar year
      following the calendar year in which the applicable expense is incurred,
      and (z) the right to payment or reimbursement or in-kind benefits
      hereunder may not be liquidated or exchanged for any other
  benefit.



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	 	8.6 	
      Binding Effect; Benefit. This Agreement shall
      inure to the benefit of and be binding upon the parties hereto and any
      successors and assigns permitted or required by Section 8.7 hereof.
      Nothing in this Agreement, expressed or implied, is intended to confer on
      any person other than the parties hereto or such successors and assigns,
      any rights, remedies, obligations or liabilities under or by reason of
      this Agreement.

	 	 	 
	 	8.7 	
      Assignment. This Agreement, and the Executive's
      rights and obligations hereunder, may not be assigned by the Executive.
      The Company may not assign this Agreement and its rights, together with
      its obligations, hereunder without the Executive’s prior written consent,
      except in connection with any sale, transfer or other disposition of all
      or substantially all of the Company’s assets or business, whether by
      merger, consolidation or otherwise.

	 	 	 
	 	8.8 	
      Further Assurances. The Executive will executive
      and deliver all instruments and other documents which the Company
      reasonably determines to be necessary or appropriate to carry out the
      terms of this Agreement.

	 	 	 
	 	8.9 	
      Indemnification. The Executive will be entitled to
      indemnification to the fullest extent provided under applicable law and
      the terms of the Company’s Articles of Incorporation and By-laws, and any
      other indemnity agreement to which he is a party or beneficiary. Further,
      the Executive shall be covered under any applicable insurance coverage
      maintained by the Company with respect to its executive officers. Without
      limiting any other provision of this Agreement, this Section 8.9
      will survive the termination or expiration of this Agreement for any
      reason.

	 	 	 
	 	8.10 	
      Definitions. For purposes of this
  Agreement:




	 	8.10.1 	
      “Affiliate” means a person that, directly or
      indirectly, controls or is controlled by, or is under common control with
      the Company;



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	 	8.10.2 	
      “control” (including, with correlative meaning,
      the terms “controlled by” and “under common control with”) as used with
      respect to any person or entity, means the possession, directly or
      indirectly, of the power to direct or cause the direction of the
      management and policies of such person or entity, whether through
      ownership of voting securities or by contract or other agreement or
      otherwise; and

	 	 	 
	 	8.10.3 	
      “Subsidiary” means any person or entity as to
      which the Company, directly or indirectly, owns or has the power to vote,
      or to exercise a controlling influence with respect to, fifty percent
      (50%) or more of the securities of any class of such person, the holders
      of which class are entitled to vote for the election of directors (or
      persons performing similar functions) of such person and shall
      specifically include any variable interest entity of the Company whose
      financial results are consolidated with those of the Company under U.S.
      generally accepted accounting principles.




	 	8.11 	
      Counterparts. This Agreement may be executed in
      two or more counterparts, each of which shall be deemed an original but
      all of which together shall constitute one and the same
  instrument.

	 	 	 
	 	8.12 	
      Headings. The headings in this Agreement are for
      reference purposes only and shall not in any way affect the meaning or
      interpretation of this Agreement.



[Signature page follows] 

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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written. 

COMPANY: 

YOU ON DEMAND HOLDINGS, INC. 

By: /s/ Marc
Urbach                                        

       Name: Marc Urbach

       Title: President and Chief
FinancialOfficer
       Address: 27 Union
Square West,

                       
Suite 502

                       
New York, New York, 10003


[Signature to Liu Employment Agreement] 





	 	EXECUTIVE: 
	 	 
	 	WEICHENG LIU 
	 	 
	 	 /s/ Weicheng Liu 
	 	Address: 
	 	 
	 	 


[Signature to Liu Employment Agreement] 




Annex I 

Duties and Responsibilities 

The Chief Executive Officer shall have general supervision of
the business of the Corporation and shall see that all orders and resolutions of
the Board of Directors are carried into effect. The Chief Executive Officer
shall regularly communicate with the Chairman and shall perform all duties which
from time to time may be requested of him or her by the Chairman and the Board
of Directors. The Chief Executive Officer, shall, in the absence of both the
Chairman and the Executive Chairman, preside at meetings of the Board of
Directors and stockholders of the Corporation. 




Annex II 

GENERAL RELEASE 

I, Weicheng Liu, in consideration of and subject to the
performance by the Company, of its obligations under Section 5.1
of the Employment Agreement, dated as of January 31, 2014 (the
“Agreement”), do hereby release and forever discharge as of the date
hereof the Company and its respective affiliates and subsidiaries and all
present, former and future directors, officers, agents, representatives,
employees, successors and assigns of the Company and/or its respective
affiliates and subsidiaries and direct or indirect owners (collectively, the
“Released Parties”) to the extent provided herein (this
“General Release”). The Released Parties are intended third-party
beneficiaries of this General Release, and this General Release may be enforced
by each of them in accordance with the terms hereof in respect of the rights
granted to such Released Parties hereunder. Terms used herein but not otherwise
defined shall have the meanings given to them in the Agreement. 

	1. 	
      I understand that any payments or benefits paid or
      granted to me under Section 5.1 of the Agreement represent, in part,
      consideration for signing this General Release and are not salary, wages
      or benefits to which I was already entitled. I understand and agree that I
      will not receive the payments and benefits specified in Section 5.1 of the
      Agreement unless I execute this General Release and do not revoke this
      General Release within the time period permitted hereafter or breach this
      General Release. Such payments and benefits will not be considered
      compensation for purposes of any employee benefit plan, program, policy or
      arrangement maintained or hereafter established by the Company or its
      respective affiliates.

	 	 
	2. 	
      Except as provided in paragraphs 4 and 5 below and except
      for the provisions of the Agreement which expressly survive the
      termination of my employment with the Company, I knowingly and voluntarily
      (for myself, my heirs, executors, administrators and assigns) release and
      forever discharge the Company and the other Released Parties from any and
      all claims, suits, controversies, actions, causes of action, cross-claims,
      counter-claims, demands, debts, compensatory damages, liquidated damages,
      punitive or exemplary damages, other damages, claims for costs and
      attorneys’ fees, or liabilities of any nature whatsoever in law and in
      equity, both past and present (through the date that this General Release
      becomes effective and enforceable) and whether known or unknown,
      suspected, or claimed against the Company and/or any of the Released
      Parties which I, or any of my heirs, executors, administrators or assigns,
      ever had, now have, or hereafter may have (through the date that this
      General Release becomes effective and enforceable), by reason of any
      matter, cause, or thing whatsoever, from the beginning of my initial
      dealings with the Company to the date of this General Release relating
      exclusively to any claims arising from or relating in any way to my
      employment relationship with the Company, the terms and conditions of that
      employment relationship, and the termination of that employment
      relationship (including, but not limited to, any allegation, claim or
      violation, arising under: Title VII of the Civil Rights Act of 1964, as
      amended; the Civil Rights Act of 1991; the Age Discrimination in
      Employment Act of 1967, as amended (including the Older Workers Benefit
      Protection Act); the Equal Pay Act of 1963, as amended; the Americans with
      Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the
      Worker Adjustment Retraining and Notification Act; the Employee Retirement
      Income Security Act of 1974; any applicable Executive Order Programs; the
      Fair Labor Standards Act; or their state or local counterparts; or under any other
      federal, state or local civil or human rights law, or under any other
      local, state, or federal law, regulation or ordinance; or under any public
      policy, contract or tort, or under common law; or arising under any
      policies, practices or procedures of the Company; or any claim for
      wrongful discharge, breach of contract, infliction of emotional distress,
      defamation; or any claim for costs, fees, or other expenses, including
      attorneys’ fees incurred in these matters) (all of the foregoing
      collectively referred to herein as the “Claims”). I understand and
      intend that this General Release constitutes a general release of all
      claims and that no reference herein to a specific form of claim, statute
      or type of relief is intended to limit the scope of this General
      Release.








	3. 	
      I represent and warrant that I have made no assignment or
      transfer of any right, claim, demand, cause of action, or other matter
      covered by paragraph 2 above.

	 	 
	4. 	
      I agree that this General Release does not waive or
      release any rights or claims that I may have under the Age Discrimination
      in Employment Act of 1967 which arise after the date I execute this
      General Release. I acknowledge and agree that my separation from
      employment with the Company in compliance with the terms of the Agreement
      shall not serve as the basis for any claim or action (including, without
      limitation, any claim under the Age Discrimination in Employment Act of
      1967).

	 	 
	5. 	
      Notwithstanding anything in this General Release to the
      contrary, this General Release shall not relinquish, diminish, or in any
      way affect any rights or Claims (a) arising out of any breach by the
      Company or by any Released Party of the Agreement after the date hereof,
      (b) I have to workers’ compensation benefits or vested benefits under any
      pension plan, employee benefit plan or any other plan or program of the
      Company, or (c) with respect to indemnification for actions brought
      against me in my capacity as an officer, manager or director of the
      Company or any subsidiary or affiliate of the Company, whether pursuant to
      statute, the Company’s articles of incorporation or bylaws, or any
      separate agreement, but excluding any claims which I, or any of my heirs,
      executors, administrators or assigns, ever had, now have, or hereafter may
      have (through the date that this General Release becomes effective and
      enforceable), by reason of any matter, cause, or thing whatsoever, from
      the beginning of my initial dealings with the Company to the date of this
      General Release, relating to any other relationship with the Company,
      including, without limitation, as option holder, stockholder, lender,
      director or otherwise.

	 	 
	6. 	
      I agree that I hereby waive all rights to sue or obtain
      equitable, remedial or punitive relief from any or all Released Parties of
      any kind whatsoever for any Claim, including, without limitation,
      reinstatement, back pay, front pay, and any form of injunctive relief.
      Notwithstanding the foregoing, I acknowledge that I am not waiving and am
      not being required to waive any right that cannot be waived under law,
      including the right to file an administrative charge or participate in an
      administrative investigation or proceeding; provided, however, that I
      disclaim and waive any right to share or participate in any monetary award
      resulting from the prosecution of such charge or investigation or
      proceeding.

	 	 
	7. 	
      In signing this General Release, I acknowledge and intend
      that it shall be effective as a bar to each and every one of the Claims
      hereinabove mentioned or implied. I expressly consent that this General
      Release shall be given full force and effect according to each and all of
      its express terms and provisions, including those relating to unknown and
      unsuspected Claims (notwithstanding any state or local statute that
      expressly limits the effectiveness of a general release of unknown,
      unsuspected and unanticipated Claims), if any, as well as those relating
      to any other Claims hereinabove mentioned or implied. I acknowledge and
      agree that this waiver is an essential and material term of this General
      Release and that without such waiver the Company would not have agreed to
      the terms of the Agreement. I further agree that in the event that I
      should bring a Claim seeking damages against the Company, or in the event
      that I should seek to recover against the Company in any Claim brought by
      a governmental agency on my behalf, this General Release shall serve as a
      complete defense to such Claims to the maximum extent permitted by law.



- 17 - 




	8. 	
      I agree that neither this General Release, nor the
      furnishing of the consideration for this General Release, shall be deemed
      or construed at any time to be an admission by the Company, any Released
      Party or myself of any improper or unlawful conduct.

	 	 
	9. 	
      I agree that this General Release and the Agreement are
      confidential and agree not to disclose any information regarding the terms
      of this General Release or the Agreement, except to my immediate family
      and any tax, legal or other counsel that I have consulted regarding the
      meaning or effect hereof or as required by law, and I will instruct each
      of the foregoing not to disclose the same to anyone. The Company agrees to
      disclose any such information only to any tax, legal or other counsel of
      the Company or as required by law.

	 	 
	10. 	
      Any non-disclosure provision in this General Release does
      not prohibit or restrict me (or my attorney) from responding to any
      inquiry about this General Release or its underlying facts and
      circumstances by the Securities and Exchange Commission (SEC), the
      Financial Industry Regulatory Authority (FINRA), or any other
      self-regulatory organization or governmental entity.

	 	 
	11. 	
      I hereby acknowledge that certain provisions of the
      Agreement, including Section 6 thereof shall survive my execution of this
      General Release.

	 	 
	12. 	
      I acknowledge that I may hereafter discover Claims or
      facts in addition to or different than those which I now know or believe
      to exist with respect to the subject matter of the release set forth in
      paragraph 2 above and which, if known or suspected at the time of entering
      into this General Release, may have materially affected this General
      Release and my decision to enter into it.

	 	 
	13. 	
      Whenever possible, each provision of this General Release
      shall be interpreted in such manner as to be effective and valid under
      applicable law, but if any provision of this General Release is held to be
      invalid, illegal or unenforceable in any respect under any applicable law
      or rule in any jurisdiction, such invalidity, illegality or
      unenforceability shall not affect any other provision or any other
      jurisdiction, but this General Release shall be reformed, construed and
      enforced in such jurisdiction as if such invalid, illegal or unenforceable
      provision had never been contained herein. This General Release
      constitutes the complete and entire agreement and understanding among the
      parties, and supersedes any and all prior or
  contemporaneous agreements, commitments, understandings or arrangements,
whether written or oral, between or among any of the parties, in each case
concerning the subject matter hereof. 



- 18 - 




BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:


	 	(i) 	
      I HAVE READ IT CAREFULLY;

	 	 	 
	 	(ii) 	
      I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING
      UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE
      DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE
      CIVIL RIGHTS ACT OF 1964, AS AMENDED, THE EQUAL PAY ACT OF 1963, THE
      AMERICANS WITH DISABILITIES ACT OF 1990, AND THE EMPLOYEE RETIREMENT
      INCOME SECURITY ACT OF 1974, AS AMENDED;

	 	 	 
	 	(iii) 	
      I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

	 	 	 
	 	(iv) 	
      I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE
      EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND
      CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

	 	 	 
	 	(v) 	
      I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT
      OF THIS RELEASE TO CONSIDER IT AND THE CHANGES MADE SINCE MY RECEIPT OF
      THIS RELEASE ARE NOT MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT
      RESTART THE REQUIRED 21-DAY PERIOD;

	 	 	 
	 	(vi) 	
      I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE
      EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT
      BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
      EXPIRED;

	 	 	 
	 	(vii) 	
      I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND
      VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH
      RESPECT TO IT; AND

	 	 	 
	 	(viii) 	
      I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY
      NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN
      WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY
      ME.




	SIGNED: 	 	DATE:
    


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