Document:

Longhai Steel, Inc. - Exhibit 10.9 - Filed by newsfilecorp.com

Exhibit 10.9

EMPLOYMENT AGREEMENT 

THIS EMPLOYMENT AGREEMENT (the
"Agreement") is made effective as of April 1, 2010, between ACTION INDUSTRIES,
INC. (to be known as LONGHAI STEEL, INC.), a Nevada corporation (the "Company")
and DR. EBERHARD KORNOTZKI (the "Executive"). 

1. 

EMPLOYMENT 

The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to be employed by the Company, on the terms and
conditions set forth herein. 

2. 

TERM 

The term ("Term") of this Agreement shall begin on
April 1, 2010 
and will terminate on March 31, 2012
unless sooner terminated as hereinafter provided. 

3. 

POSITION AND DUTIES 

3.1 

Position. The
Executive hereby agrees to serve as Chief Financial Officer of the Company. At
the Company's request, the Executive may, at the Executive's discretion, serve
the Company and/or its respective subsidiaries and affiliates in other offices
and capacities in addition to the foregoing, but shall not be required to do so.
In the event that the Executive, during the term of this Agreement, serves in
any one or more of the aforementioned capacities, the Executive's compensation
shall not be increased beyond that specified in Section 4 of this Agreement. In
addition, in the event the Company and the Executive mutually agree that the
Executive shall terminate the Executive's service in any one or more of the
aforementioned capacities, or the Executive's service in one or more of the
aforementioned capacities is terminated, the Executive's compensation, as
specified in Section 4 of this Agreement, shall not be diminished or reduced in
any manner. 

3.2 

Duties. The Company agrees that
the duties that may be assigned to the Executive shall be the usual and
customary duties of the Chief Financial Officer. 

3.3 

Devotion of
Time and Effort. Executive shall use Executive's good faith best efforts and
judgment in performing Executive's duties as required hereunder and to act in
the best interests of the Company. Executive shall devote such time, attention
and energies to the business of the Company as are reasonably necessary to
satisfy Executive's required responsibilities and duties hereunder. 

3.4 

Other
Activities. The Executive may engage in other activities for the Executive's own
account while employed hereunder, including without limitation charitable,
community and other business activities, provided that such other activities do
not materially interfere with the performance of the Executive's duties
hereunder. 

4. 

COMPENSATION AND RELATED
MATTERS 

4.1 

Salary. During
the Term, the Company shall pay the Executive a salary of Two Thousand Dollars
(US$2,000.00) per month (the "Base Salary"), 
provided, however,
if (i) 
the Company obtains its first financing
and (ii) the Company completes the listing of its Common Stock for trading on
NASDAQ, the Base Salary shall be increased to Four Thousand Dollars
(US$4,000.00) per month. The Executive's performance and salary shall be subject
to review at any time, and an increase in salary, if one is so determined by the
Board, shall be made, on a basis consistent with the standard practices of the
Company. 

4.2 

Stock Options.
Executive shall be granted a five year option to purchase up to 200,000 shares
of the Company's Common Stock on a cash exercise basis at an exercise price of
$6.00 per share. Subject to the provisions of Section 6, and for so long as
Executive is an employee of the Company, such options shall vest and
become exercisable as follows: 100,000 shares upon execution of
this Agreement; 50,000 shares upon the first anniversary of this Agreement and
50,000 shares as of March 31, 2012. 

 

1 

4.3 

Business Expenses. The Company shall promptly, in accordance with Company
policy, reimburse the Executive for all reasonable business expenses incurred in
accordance with and subject to the limits set forth in the Company's written
policies with respect to business expenses, upon presentation to the Company of
written receipts for such expenses. Notwithstanding the Company’s written
policies, with prior written approval by the Company, all international air
travel shall be the lesser of business class or first class and all lodging in
the US shall be in at least 4 star hotels. 

5. 

TERMINATION

5.1 

Cause. The Company may terminate the Executive for Cause at any time, upon
written notice to Executive. For purposes of this Agreement, "Cause" shall mean:

(a) The Executive's
conviction for commission of a felony or a crime involving moral turpitude;

(b) The Executive's
willful commission of any act of theft, embezzlement or misappropriation against
the Company; or 

(c) The Executive's
material failure to perform his duties hereunder. 

5.2

Termination Without Cause. The Company may terminate this Agreement without
Cause at any time, provided that the Company first delivers to the Executive the
Company's written election to terminate this Agreement at least thirty (30) days
prior to the effective date of termination. 

 6.

COMPENSATION UPON TERMINATION 

6.1 

Termination for Cause. In the event the Executive's employment shall be
terminated for Cause pursuant to Section 5.1 hereof, the Company shall pay the
Executive his salary through the date of termination and all stock options to
purchase the Company's stock granted to the Executive as of the date of
termination and which have not vested prior to the date of termination shall
cease vesting. 

6.2 

Termination without Cause, Termination by Mutual Agreement, Disability or Death.
In the event of a Termination without Cause pursuant to Section 5.2, by mutual
agreement of the parties hereto, or due to disability or death of Executive, the
Company shall pay the Executive through the date of termination, and all stock
options to purchase the Company's stock granted to the Executive as of the date
of termination and which have not vested prior to the date of termination shall
automatically become immediately exercisable by the Executive on the date of
termination and shall remain exercisable until the expiration of the option.

7. 

CONFIDENTIALITY AND NON-SOLICITATION COVENANTS 

7.1 

Non-Competition. The Executive agrees that during the Term of this Agreement
prior to any termination of his employment hereunder and for a period of two (2)
years following the date on which the Executive's employment hereunder is
terminated, he will not directly or indirectly, without the prior written
consent of the Company, manage, operate, join, control, participate in, or be
connected as a stockholder (other than as a holder of shares publicly traded on
a stock exchange or the NASDAQ National Market System), partner, or other equity
holder with, or as an officer, director or employee of, any other company whose
business strategy is competitive with that of the Company, as determined by a
majority of the Company's independent directors. 

7.2 

Confidentiality. The Executive hereby agrees that the Executive will not, during
the Term or at any time thereafter directly or indirectly disclose or make
available to any person, firm, corporation, association or other entity for any
reason or purpose whatsoever, any Confidential Information (as defined below).
The Executive agrees that, upon termination of his employment with the Company,
all Confidential Information in his possession that is in written or other
tangible form (together with all copies or duplicates thereof, including
computer files) shall be returned to the Company and shall not be retained by
the Executive or furnished to any third party, in any form except as provided
herein; provided, however, that the Executive shall not be obligated to treat as
confidential, or return to the Company copies of any Confidential Information
that (i) was publicly known at the time of disclosure to the Executive, (ii)
becomes publicly known or available thereafter other than by any means in
violation of this Agreement or any other duty owed to the Company by the
Executive, or (iii) is lawfully disclosed to the Executive by a third party. As
used in this Agreement the term "Confidential Information" means information
disclosed to the Executive or known by the Executive as a consequence of or
through his relationship with the Company, about the owners, employees, business
methods, public relations methods, organization, procedures, property
acquisition and development, or finances, including, without limitation,
information of or relating to the Company and its affiliates. 

 

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7.3 

Non-Solicitation. For a period of two (2) years following the date on which the
Executive's employment hereunder is terminated, the Executive shall not solicit
or induce any of the Company's employees, agents or independent contractors to
end their relationship with the Company, or recruit, hire or otherwise induce
any such person to perform services for the Executive, or any other person, firm
or company. 

7.4 

Return of Property. The Executive hereby acknowledges and agrees that all
Personal Property and equipment furnished to or prepared by the Executive in the
course of or incident to his employment, belongs to the Company and shall be
promptly returned to the Company upon termination of the Employment Period.
"Personal Property" includes, without limitation, all electronic devices of the
Company used by the Executive, including, without limitation, personal
computers, facsimile machines, cellular telephones, pagers and tape recorders
and all books, manuals, records, reports, notes, contracts, lists, blueprints,
maps and other documents, or materials, or copies thereof (including computer
files), and all other proprietary information relating to the business of the
Company. Following termination, the Executive will not retain any written or
other tangible material containing any proprietary information of the Company.

7.5 

Reasonableness of Restrictions. Each of sections 7.1, 7.2, and 7.3 set out above
is acknowledged by Executive to be reasonable in duration, extent and
application and is the minimum protection necessary for the Company in respect
of its goodwill, Confidential Information, trade connections and business. Each
of the covenants and obligations on Executive’s part set out in sections 7.1,
7.2, and 7.3 is deemed to be separate and severable and enforceable by the
Company accordingly. If any of the restrictions set out above are held to be
void but would be valid if part of the wording was deleted such restriction
shall apply with such deletion as may be necessary to make it valid and
effective. 

7.6 

The restrictions set forth in Sections 7.1, 7.2, and 7.3 hereof shall not apply
if the Executive's employment is terminated pursuant to Section 5.2 hereof or in
the event that any form of compensation due Executive pursuant to the provisions
of Section 4 is not provided as required when due. 

7.7 

In the event of a breach by Executive of this Section 7, any obligations for
payment by the Company otherwise due pursuant to Section 6 hereof shall be void.

8.

GENERAL PROVISIONS 

8.1 

Injunctive Relief and Enforcement. The Executive acknowledges that the remedies
at law for any breach by him of the provisions of Section 7 hereof may be
inadequate and that, therefore, in the event of breach by the Executive of the
terms of Section 7 hereof, the Company shall be entitled to institute legal
proceedings to enforce the specific performance of this Agreement by the
Executive and to enjoin the Executive from any further violation of Section 7
hereof and to exercise such remedies cumulatively or in conjunction with all
other rights and remedies provided by law and not otherwise limited by this
Agreement. 

 

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8.2     

Notice. For the
purposes of this Agreement, notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when addressed as follows and (i) when personally delivered,
(ii) when transmitted by telecopy, electronic or digital transmission with
receipt confirmed, (iii) one day after delivery to an overnight air courier
guaranteeing next day delivery, or (iv) upon receipt if sent by certified or
registered mail. In each case notice shall be sent to: 

If to Executive: 

Dr. Eberhard Kornotzki 

Suite 3-15-1603, New World Center 

Chongwen District 

Beijing 100062, PR China 

If to the Company: 

Action Industries, Inc. 

#1 Jingguang Rd., Neiqiu County 

Xingtai, Hebei Province, China 054200 

Attn: Wang Chaojun, CEO 

or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt. 

8.3 

Severability.
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, in
the event any provision in this Agreement shall be determined by any court of
competent jurisdiction to be unenforceable by reason of extending for too great
a period of time or over too great a geographical area or by reason of being too
extensive in any other respect, each such agreement shall be interpreted to
extend over the maximum period of time for which it may be enforceable and to
the maximum extent in all other respects as to which it may be enforceable, and
enforced as so interpreted, all as determined by such court in such action. 

8.4 

Assignment. This Agreement may
not be assigned by the Executive, but may be assigned by the Company to any
successor to its business and will inure to the benefit and be binding upon any
such successor. 

8.5 

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

8.6 

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

8.7 

Choice of Law;
Venue. This Agreement shall be construed, interpreted and enforced in accordance
with the laws of the State of Nevada without giving effect to the principles of
conflict of laws thereof. By execution and delivery of this Agreement, the
parties agree and accept that any legal action or proceeding brought with
respect to this Agreement shall be brought in the court of appropriate
jurisdiction in and for the County of Clark, State of Nevada, and the parties
expressly waive any objection to personal jurisdiction, venue or forum non
conveniens. 

8.12 

Entire
Agreement. This Agreement contains the entire agreement and understanding
between the Company and the Executive with respect to the employment of the
Executive by the Company as contemplated hereby, and no representations,
promises, agreements or understandings, written or oral, not herein contained
shall be of any force or effect. This Agreement shall not be changed unless in
writing and signed by both the Executive and the Board. 

8.13 

Amendments;
Waivers. This Agreement may be amended or modified, and any of the terms and
covenants may be waived, only by a written instrument executed by the parties
hereto, or, in the case of a waiver, by the party waiving compliance. Any waiver
by any party in any one or more instances of any term or covenant contained in
this Agreement shall neither be deemed to be nor construed as a further or
continuing waiver of any such term or covenant of this Agreement. 

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

"Company" 

ACTION INDUSTRIES, INC., a Nevade corporation 

By: /s/
Wang Chaojun                               

Wang Chaojun, Chief Executive Officer 

"Executive" 

/s/
Dr. Eberhard Kornotzki                      

Dr. Eberhard Kornotzki 

 

 

5Longhai Steel, Inc.: Exhibit 10.10 - Filed by newsfilecorp.com

Exhibit 10.10

INDEPENDENT DIRECTOR AGREEMENT 

THIS INDEPENDENT DIRECTOR AGREEMENT (this
“Agreement”) is made effective as of _______, 2010 by and
between Longhai Steel Inc. (the “Company”), and _____ (“Director”). 

WHEREAS, the Company seeks
to attract and retain as directors, capable and qualified persons to serve on
the Company’s board of directors (the “Board”); and 

WHEREAS, the Company has
requested and received from Director certain information regarding Director’s
qualifications and fitness to serve on the Board and has considered and relied
upon the accuracy of such information in offering Director the opportunity to
serve on the Board; and 

WHEREAS, the Company
believes that Director possesses the necessary qualifications and abilities to
serve as a director of the Company and to perform the functions and meet the
Company’s needs related to its Board. 

NOW, THEREFORE, the parties agree as follows: 

1. Service to the Board. 

(a) Service as a
Director. Director will serve for a period of three years (the
“term as a director of the Company in accordance with the bylaws of the Company
and perform all duties as a director of the Company, including without
limitation (1) attending meetings of the Board, (2) serving on such committees
of the Board (each a “Committee”) to which Director has been
appointed, (3) attending meetings of each Committee of which Director is a
member and (4) performing Director’s duties on behalf of the Company in good
faith and in a manner that is not opposed to the best interests of the
Company.

(b) Service on
Committees. Director will serve on the following committees and
in the capacities stated: 

	                                                                                                                                                                               
     	Member 	 	Chairperson 
	Audit Committee 	----	 	----
	Compensation/Nominating Committee 	----	 	----
	Corporate Governance Committee 	----	 	----

To the extent Director serves as Audit Committee Chairperson,
Director agrees that Director is also serving as the financial expert for
purposes of filings before the Securities and Exchange Commission. 

2. Term. The term of this
Agreement shall commence as of the date of Director’s appointment by the Board
of Directors of the Company and shall continue until the Director’s removal or
resignation. 

3. Compensation and Expenses. 

(a) Director
Compensation. In recognition of the services provided by and to
be provided by Director, the Company agrees to issue to Director, an aggregate
of _______________ restricted shares of the Company’s common stock (such
issuance, the “Compensation”), one-sixth (1/6) of the restricted shares to be
granted on the date that is six (6) months following the closing date of a
secondary offering of shares of the Company’s common stock, and the remaining
restricted shares to be granted on each six
(6) month interval thereafter in five equal installments (each such date a “grant date”). The Board reserves the right to change the Compensation from time to time, to take into consideration the responsibilities associated with different
committees in setting Compensation levels and to grant additional restricted shares periodically, which may vary from the terms described in this section. If Director ceases to serve as a director on the Company’s Board at any time and for any
reason prior to a grant date associated with any restricted shares, all restricted shares described in the restricted share agreement that have not been granted as of such time of cessation of services will not be granted.  All such cancelled or
forfeited restricted shares shall be returned to the Company’s incentive pool. 

(b) Expenses. The Company will reimburse Director for all reasonable, out-of-pocket expenses, approved by the Company in advance, incurred in connection with the performance of
Director’s duties under this Agreement (“Expenses”), upon submission of receipts and a written request for payment. Such statement shall be accompanied by sufficient documentary matter to support the expenditures. The
Company may withhold from any payment any amount of withholding required by law. 

(c) Future Compensation and Benefits. The Board, with the compensation committee, reserves the right to determine the compensation for services provided under this Agreement. The Board may from time
to time authorize additional compensation and benefits for Director, including stock options and restricted stock. 

(d) Insurance and Indemnification. This Agreement is effective only when the directors’ and officers’ insurance policy previously shown to the Director is in place and an Indemnification
Agreement satisfactory to the Director is signed by the Company. When and if the Company anticipates the successful qualification of its common stock for trading on the NASDAQ Stock Exchange or any similar exchange for securities trading, the
Company shall amend its existing directors’ and officers’ insurance policy to increase limits available to independent directors by approximately $5,000,000 or a lesser or greater amount which is determined and approved by the Board to
be appropriate, with such insurance effective on date of such listing or as soon thereafter as possible, provided that such increase is in the best interests of the Company and its shareholders. 

The Company has provided the Director with a summary of the limits and terms of its current Directors’ and Officers’ Liability Insurance (the “D&O Insurance”) and the provisions of
its corporate by-laws and governing documents dealing with indemnification of directors (the “Indemnification Provisions”).  To the fullest extent permitted by applicable law, the Company agrees that it will not voluntarily
change the terms of such D&O Insurance or the Indemnification Provisions to the detriment of the Director at anytime while he is entitled to benefit of such D&O Insurance or Indemnification Provisions. 

4. Confidentiality.  The Company and Director each acknowledge that, in order for the intents and purposes of this Agreement to be accomplished, Director shall necessarily be obtaining access to certain
confidential information concerning the Company and its affairs, including, but not limited to business methods, information systems, financial data and strategic plans which are unique assets of the Company (“Confidential
Information”). Director covenants not to, either directly or indirectly, in any manner, utilize or disclose to any person, firm, corporation, association or other entity any Confidential Information. 

5. Non-Compete.  During the term of this Agreement and for a period of twelve (12) months following Director’s removal or resignation from the Board of Directors of the Company or any of its
subsidiaries or affiliates (the “Restricted Period”), Director shall not, directly or indirectly, (i) in any manner whatsoever engage in any capacity with any business competitive with the Company’s
current lines of business or any business then engaged in by the Company, any of its subsidiaries or any of its affiliates (the “Company's Business”) for Director’s own benefit or for the benefit of any person or entity other
than the Company or any subsidiary or affiliate; 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
Business; provided, however, that Director 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 Business. In addition, during the Restricted Period, Director shall not develop
any property for use in the Company’s Business on behalf of any person or entity other than the Company, its subsidiaries and affiliates. 

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6. Termination. With or without cause, the Company and Director may each terminate this Agreement at any time upon ten (10) days written notice, and the Company shall be obligated to pay to Director the
compensation and expenses due up to the date of the termination. Nothing contained herein or omitted herefrom shall prevent the shareholder(s) of the Company from removing Director with immediate effect at any time for any reason. 

7. Amendments and Waiver. No supplement, modification or amendment of this Agreement will be binding unless executed in writing by both parties. No waiver of any provision of this Agreement
on a particular occasion will be deemed or will constitute a waiver of that provision on a subsequent occasion or a waiver of any other provision of this Agreement. 

8. Binding Effect. This Agreement will be binding upon and inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 

9. Severability. The provisions of this Agreement are severable, and any provision of this Agreement that is held by a court of competent jurisdiction to be invalid, void, or otherwise
unenforceable in any respect will not affect the validity or enforceability of any other provision of this Agreement. 

10. Governing Law. This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in that
state without giving effect to the principles of conflicts of laws. 

 11. Notice. Any and all notices referred to herein shall be sufficient if furnished in writing at the addresses specified on the signature page hereto or, if to the Company, to the Company’s address as specified in filings made
by the Company with the U.S. Securities and Exchange Commission. 

 12. Assignment.  The rights and benefits of the Company under this Agreement shall be transferable, and all the covenants and agreements hereunder shall inure to the benefit of, and be enforceable by or against, its successors and
assigns. The duties and obligations of Director under this Agreement are personal and therefore Director may not assign any right or duty under this Agreement without the prior written consent of the Company. 

 13. Entire Agreement.  Except as provided elsewhere herein, this Agreement sets forth the entire agreement of the parties with respect to its subject matter and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party to this Agreement with respect to such subject matter. 

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14. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one instrument. Facsimile execution and delivery of this Agreement is legal,
valid and binding for all purposes. 

[Signature Page Follows]

4 

IN WITNESS WHEREOF, the parties hereto have caused this Independent Director Agreement to be duly executed and signed as of the day and year first above written. 

	
LONGHAI STEEL INC.
	
	
 
	
 
	
By: ______________________________
	
Name:
	
	
Title:
	
	
 
	
	
DIRECTOR
	
	
 
	
_________________________________
	
Name:
	
	
Address:
	
	
__________________________________________________________________

_________________________________

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