Yayi International Inc.: Exhibit 10.1 - Filed by newsfilecorp.com









	Exhibit 10.1  


English Translation of Employment Agreement 


EMPLOYMENT AGREEMENT, dated on Feb. 24, 2010, is hereby entered
into by and between Chen (Veronica) Jing, a Chinese citizen with an
identification number of 120106196601157029 (the “Executive”) and Tianjin Yayi
Industrial Co., Ltd. with the executive offices at 9 Xing Guang Road, Zhong Bei
Industrial Zone, Xi Qing District, Tianjin, China (the “Company”).
 

WHEREAS, the Company believes that the Executive is able to
provide unique management services for the Company, the Company’s controlling
parent company Yayi International Inc. which has been publicly traded (“Yayi
International”) and their subsidiaries and affiliates (Under this Agreement,
Yayi International Inc. and its subsidiaries and affiliated companies are
collectively called “Yayi Group”) and intends to retain the Executive as Yayi
Group’s Chief Financial Officer.  

WHEREAS, the Company and the Executive have reached an
Agreement in writing and provided for the employment of the Executive by Yayi
Group on the terms set forth herein.  

IT IS AGREED:  

	
    1.  
	
    Employment, Duties and Representations
    
    

	
       
	
       

	
    1.1  
	
    Effective as of Feb. 24, 2010, the Company
      hereby agrees to offer the employment of Chief Financial Officer (“CFO”)
      to the Executive and the Executive hereby accepts such employment subject
      to the terms and conditions set forth in this Agreement. During the term
      of this Agreement, the Executive shall make herself available to the Yayi
      Group to pursue its business, subject to the supervision and direction of
      the Board of Directors of the Company and Yayi International Inc.  

	
       
	
       

	
    1.2  
	
    The Company will employ the Executive as Yayi
      Group’s CFO full time. The Executive shall not accept any other employment
      (full time/part time) that is not related to this position. The scope and
      responsibilities of the CFO shall include the following businesses for
      Yayi Group:  



	
     
	
    a.  
	
    To proactively contact and market Yayi Group to
      the investment communities and to establish good relationships with current and
      potential investors of Yayi Group and effectively communicate with such thereof;
     

	
     
	
    b.  
	
    To properly provide information regarding
      current activities of Yayi Group to the relevant external parties, including banks,
      funds and investors;  

	
     
	
    c.  
	
    To formulate and implement relevant policies,
      procedures and strategies to ensure the realization of Yayi Group’s financial strategy;
     

	
     
	
    d.  
	
    To establish a strong financial system and
      strict internal control;  

	
     
	
    e.  
	
    To supervise all financial activities to ensure
      their compliance with applicable laws and Yayi Group’s policies and charter
      documents;  



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    f.  
	
    To be responsible for providing financial
      statements timely and accurately in compliance with US GAAP;  

	
     
	
    g.  
	
    To establish and direct a mechanism for solving
      financial problems timely;  

	
     
	
    h.  
	
    To establish and direct a mechanism for
      reducing costs and increasing efficiency;  

	
     
	
    i.  
	
    To be responsible for Yayi Group’s financial
      planning;  

	
     
	
    j.  
	
    To participate in the business development and
      strategic planning of Yayi Group;  

	
    
	
    k.  
	
    To introduce investment policies for
      implementation of investment strategies based on investment guidelines and
      to manage investment transactions thereof;  

	
    
	
    l.  
	
    To carry out strategic acquisition, capital
      management, and financing, pursuant to the requirements of the Board of
      Directors of the Company and Yayi International;  

	
    
	
    m.  
	
    To provide advice to the Executive Management
      Team and Board of Directors on financial issues of Yayi Group;  

	
    
	
    n.  
	
    To quickly familiarize herself with relevant
      rules and regulations in the US and China and to be responsible for
      enacting and implementing the tax strategic planning for Yayi Group;
    


	
     
	
    o.  
	
    Other responsibilities stipulated by the Board
      of Directors;  



In addition, the CFO is the primary consultant for CEO and
division supervisors in term of strategic planning and management and shall be
in charge of financial and planning duties for Yayi Group, including, but not
limited to, (1) company strategy (2) financial strategy (3) budget and
management control and (4) financial management.  

Company Strategy 

The CFO shall play a leading role in coordinating and
establishing a comprehensive strategy to maximize value:  

	
    (1)  
	
    To ensure that the established plan could
      create the maximum value for Yayi Group based on the current business
      status;  



	
     
	
    a.  
	
    To constantly evaluate such plan’s potential
      for value creation;  

	
     
	
    b.  
	
    To ensure that such plan is in direct
      connection with the main issues and conduct evaluation repeatedly based on various
      assumptions and reasons that could occur in business operations and provide external
      information for reference with respect to value creation (e.g. certain business’ value
      for other possible owners);  

	
     
	
    c.  
	
    To provide expert opinions to CEO and division
      supervisors in connection with major proposals;  

	
     
	
    d.  
	
    To establish financial measurement standard and
      supervision system to keep track of progress thereof;  



 	
    (2)  
	
    To assist in establishing shareholder value; an
      expansion strategy for Yayi Group and creating greater
    
    
    
    
    



	
     
	
    a.  
	
    To provide comments for market opportunities
      that are closely related to the current business;  



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    b.  
	
    To evaluate Yayi Group’s capacity to take
      advantage of such opportunities and its asset conditions thereof, and
      propose suggestions to offset such incapacity if any;  

	
     
	
    c.  
	
    To evaluate specific proposals in terms of
      business and financial aspects.  



Financial Strategy 

The CFO shall perform other obligations as set forth below:



The CFO shall be responsible for establishing, recommending and
executing a comprehensive financial strategy and providing support for Yayi
Group’s operational strategy and creating maximum value for the shareholders.



	
    (1)  
	
    To propose recommendations in terms of capital
      whose value is created by opportunities and dividend policies;  

	
    (2)  
	
    To design and manage to explain Yayi Group’s
      strategic points and operation plans to investors and financial industry;
    
    

	
    (3)  
	
    To negotiate and perform all major financial
      deals, including loans, stock issuance and stock buy-back. 




Budget and Management Control 


The CFO shall establish and execute certain procedures to
ensure that management in Yayi Group obtain accurate information so as to define
target goals, make decisions and supervise operations thereof.  

	(1)
     	
    To coordinate and establish short term budget;
    
    

	(2) 
    	
    To define main incentive standard in each
      business division;  

	(3)  	
    To ensure each business division has complete
      management control;  

	(4)  	
    To evaluate incentives in each business
      division along with the CEO and division supervisors.
       
    



Financial Management 


The CFO shall ensure effective management for financial work in
Yayi Group.  

	
    (1)  
	
    To ensure all reports for external use are
      complete and obligations are fulfilled;  

	(2)  	
    To establish control system to ensure property
      safety for Yayi Group;  

	
    (3)  
	
    To ensure completeness and high efficiency for
      cash management, accounts receivable and accounts payable;  

	
    (4)  
	
    To perform all tax related duties;
     

	
    (5)  
	
    To seek opportunities to lower tax obligations
      for Yayi Group;  

	
    (6)  
	
    To establish close contact and relationship
      with banks that hold accounts for Yayi Group;  

	
    (7)  
	
    To manage risk management plans for Yayi Group.
    
    



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CFO and her team shall be responsible for managing important
external relationships, including:  

	(1)  	
    financial institution (banks and investment
      banks);  

	(2)  	
    external auditors;  

	(3)  	
    supervising institutions and tax authorities.
    
    



     	
    1.3  
	
      Pursuant to the requirements such position entails, the
      Executive shall perform and fulfill her responsibilities diligently and
      competently.

	
     
	
     

	
    1.4  
	
      The Board of Directors of the Company or Yayi
      International may assign the Executive such general management and
      supervisory responsibilities and executive duties for the Company as are
      appropriate and commensurate with the Executive’s position as CFO of the
      Company.



 	
    2.  
	
    Compensation and Benefits
     

	
     
	
     

	
    2.1  
	
    Cash Compensation  



The Company shall pay to the Executive an annual salary of RMB
800,000 pre tax which will be paid on a monthly basis, i.e. the monthly salary
shall be RMB 66,666.67. The annual salary is comprised of base salary, housing,
transportation and meals. The payment structure for each month’s salary shall be
as follows: The base salary shall be RMB 40,666.67; due to the fact that the
Executive is a Beijing citizen, the Company shall provide a rented high-end
apartment and a company vehicle for her work use in Tianjin (the total amount
for housing and car shall be RMB 22,000); the meal expense for each month shall
be RMB 4,000 per dime. During the employment, except for written statements
given in advance, the salary shall be paid on a monthly basis. The pay date
shall be the 18th of next month. If such date falls into a national
holiday, such payment shall be made on the first working date after such
holidays.  

	
    2.2  
	
    Option



The Company shall request Yayi International to grant to the
Executive an option to purchase 250,000 shares of common stock of Yayi
International from the date the Executive starts working, which shall be
approved by the Board of Directors of Yayi International. Such options shall be
valid for 4 years, 25% of which (i.e. 62,500) shall be exercisable upon the
first date after the Executive completes the first 12 month of duties as stated
herein, and the rest of which shall be exercisable as 2.08% each month (5,208),
to be fully exercised in 36 installments. The ceiling of the options shall be
the above-mentioned percentages and all unexercised options shall be carried
over to the next exercise. The Company shall cancel all unexercised options
after ten years from the grant of the options. The option can be exercised on a
“cashless” basis. Upon the approval from the Board of Directors of Yayi
International, the Executive shall sign an option agreement to reflect the
above-mentioned with Yayi International. The option agreement as stated herein
is subject to the employee equity incentive plan to be adopted by the Board of
Directors of Yayi International.  

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Based on performance of the Executive each year, the salary as
stated above could be increased upon approval from the Board.  

	
    2.3  
	
    Insurance and Welfare  

	 	 


	
    2.3.1  
	
    During the Agreement term, both
      Parties shall contribute various social security funds, such as pension,
      unemployment and work accidents as required by state, provincial and
      municipal regulations. Meanwhile, the Company shall periodically notify
      the Executive of the status for the contribution of social insurance
      funds.  

	
    2.3.2  
	
    The Company shall provide “Five
      Periods” work-related welfare (period, pregnancy, birth, lactation and
      menopause) for female employees and medical treatment shall the Executive
      abides by the “One Family One Child” policy in accordance with regulations
      on the state, provincial and municipal level.  

	
    2.3.3  
	
    In the event the Executive
      suffers any disease or work-related injuries during the contract term, the
      salary for her sick leaves, disease relief fees and other fees for medical
      treatment provided shall be implemented according to the standard not
      lower than the State, provincial and municipal mandatory standards.  

	
    2.3.4  
	
    In the event of the Executive’s
      demise, whether it is work-related, such relevant compensations shall be
      paid by the social security or the Company respectively in accordance with
      regulations as stipulated by the State or the municipality thereof.  

	
    2.3.5  
	
    During the period which the
      Company stops operation and production due to reasons not attributable to
      the Executive, benefits for various leaves, social insurance and medical
      treatment entitled to the Executive in accordance with regulations as
      stipulated by the State shall remain unchanged.  

	
    2.3.6  
	
    Other social welfares and
      benefits which the Executive may enjoy shall be implemented in accordance
      with the rules and regulations promulgated by the Company according to
      laws and regulations.  

	 	 


	
    2.4  
	
    The Executive shall pay individual taxes
      pursuant to regulations of the competent tax authorities, and the Company
      shall deduct a corresponding amount from the monthly salary of the
      Executive and pay such amount on behalf of the latter to the relevant tax
      authorities.  

	
    2.5  
	
    Other than the stipulated compensation and
      bonuses as stated above, Yayi Group is not obligated to pay other fees in
      relation with the Executive’s fulfillment of her duties stated herein.
    
  

	
     
	
     



	
    3.  
	
    Term and Termination
     

	
       
	
       

	
    3.1  
	
    The term of this Agreement is for a period of 3
      years, beginning on Feb. 24, 2010 and  

	
       
	
    terminating on Feb. 23, 2013.
    




If neither Party notifies the other Party regarding termination
of the Agreement 30 days before such expires, this Agreement shall be extended
for another 2 years automatically.  

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    3.2 The Executive, by notice to the Company 30
      days in advance, may terminate this Agreement if one of following with
      respect to the Company occurs:  

	(1)  	
    Failure to provide work protection or
      conditions as agreed to in this Agreement;  

	(2)  	
    Failure to pay compensation or reimbursement in
      full and on time;  

	(3)  	
    Failure to contribute social insurance fees on
      behalf of the Executive;  

	(4)	
    Establishing regulations in violation of laws
      and regulations which are detrimental to the Executive;  

	(5)	
    Liquidation, bankruptcy or other events that
      would entitle the Executive to terminate the Agreement as stated by laws
      and regulations.  



If the Company coerces the Executive to perform through
violence, threat or other illegal and restraining method, or directs the
Executive to work under conditions that are in violation of relevant regulations
and detrimental to the Executive’s personal safety, the Latter is entitled to
terminate the Agreement immediately without any advanced notice to the Company.



	
    3.3 The Company may terminate the agreement
      immediately without paying any compensation if one of the following with
      respect to Executive occurs.  

	(1)  	
    proved to be not qualified for this position
      during the probation period;  

	(2)  	
    materially breaching Yayi Group’s rules and
      regulations and the refusal to carry out the written instructions by the
      Board of Directors of Yayi International;  

	(3)  	
    intentional fraud and dishonest actions by the
      Executive (“dishonest" shall mean the Executive's knowingly making of a
      material misstatement to the Board of Directors for the purpose of
      obtaining direct personal benefit);  

	(4)  	
    establishing an employment relationship during
      the term of this Agreement by the Executive with another company, causing
      negative impact on the process of completing the duties stated herein
      under this Agreement or refusing to remediate the damages after being
      requested by the Company;  

	(5)  	
    conviction of any crime by the Executive
    
  



 	
    3.4 The Company, by written notice to the
      Executive 30 days in advance or paying an extra month salary to the
      Executive, may terminate the agreement if one the following with respect
      to Executive occurs.  

	(1)  	
    Failure to conduct the original work or the
      work assigned alternatively by the Company after the medical treatment
      period resulted from an illness or non-work related injuries;  

	(2)  	
    Incompetent for the work even after additional
      training procedures or being assigned to another position;  

	(3)  	
    Conditions based upon which this Agreement is
      signed have materially changed which make it impracticable to perform, and
      after negotiations between the Company and the Executive no agreement as
      to modification of this Agreement can be reached.  



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4. Confidential Information and Non-compete
 

The Executive agrees to enter into a separate standard
“Confidentiality, Non-compete and Intellectual Property Agreement” with the
Company and fulfill her obligations thereof.  

5. Liability for Breach
 

If either Party to this Agreement is under any of the following
circumstances, the Party shall be liable for breach of the Agreement:  

	
    (a)
	
     
	
    The Company violates the provisions of the
      Agreement and unilaterally terminate this Agreement, unless otherwise
      provided by this Agreement;  

	
    (b)  
	
     
	
    The Executive resigns without consent from the
      Company.  



Either Party in breach of this Agreement shall pay the other
Party damages. The standard damages shall be equal to twice of the salary the
Executive has actually received in the month prior to the date of breach.  

If the damages as provided above are insufficient to cover
losses incurred by the other Party, the breaching Party shall compensate the
other Party for the actual loss caused by such breach.  

The Executive warrants (1) that all the relevant information
she provides to the Company, including without limitations her identification,
address, academic credentials, work experiences and professional skills are true
and accurate; (2) that, by working for the Company and by entering into this
Agreement with the Company, the Executive does not violate any agreement on
confidentiality or non-competition entered into with her previous employer or
any other company or individual. If the Executive breaches this warranty, the
Company has the right to rescind this Agreement and demand that the Executive
compensate the Company for any losses due to such breach.  

6. Miscellaneous Provisions
 

6.1 All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when transmitted by electronic means, or when
mailed first class postage prepared, by certified mail, return receipt
requested, addressed to the party to receive the same at his/her or its address
set forth below, or such other address as the party to receive the same shall
have specified by written notice given in the manner provided for in this
Article 6.1. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.  

If to the Executive: 

Address: 5-2-301, Phoenix Town, Xiangtai Road, Hexi District,
Tianjin, China. Zip code 300074 

Telephone: +86 136 8204 7099  

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If to the Company: 
Address: D1-4, Xinmao Technology Zone,
Huayuan Industrial Park, 16 Rongyuan Road, Nankai District, Tianjin, China. Zip
code: 300384 
Telephone: +8622 5859 8970  

	
    6.2 In the event of any claims, litigation or other
      proceedings arising under this Agreement (including, among others,
      arbitration under Article 3.4), the Executive shall be reimbursed by the
      Company within thirty (30) days after delivery to the Company of
      statements for the costs incurred by the Executive in connection with the
      analysis, defense and prosecution thereof, including reasonable attorneys'
      fees and expenses; provided, however, that Executive shall reimburse the
      Company for all such costs if it is determined by a non-appealable final
      decision of a court of law that the Executive acted in bad faith with the
      intent to cause material damage to the Company in connection with any such
      claim, litigation or proceeding.  

	
       

	
    6.3 The Company, shall to the fullest extent permitted by
      law, indemnify the Executive for any liability, damages, losses, costs and
      expenses arising out of alleged or actual claims (collectively, "Claims")
      made against the Executive for any actions or omissions as an officer
      and/or director of the Company or its subsidiary. To the extent that the
      Company obtains director and officers insurance coverage for any period in
      which the Executive was an officer, director or consultant to the Company,
      the Executive shall be a named insured and shall be entitled to coverage
      thereunder.  

	
       

	
    6.4 All questions with respect to the construction of this
      Agreement, and the rights and obligations of the parties hereunder, shall
      be determined in accordance with the laws of China applicable to
      agreements made and to be performed entirely in Tianjin, China.  

	
       

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

	
     


	
    Signed by:  

	
     

	
    /s/ Liu Li

	
    Director/CEO  

	
       

	
    Signed by:  

	
     

	
    /s/ Chen Jing  



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