Document:

Unassociated Document

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (this “Agreement”), dated as of October 23, 2011 (the “Effective Date”), between Lihua International, Inc. (the “Company”) and Daphne Yan Huang (“Executive”) (collectively, the “Parties” and, each, a “Party”).

 

WHEREAS, Executive is currently employed by the Company in the position of EVP of Corporate Finance / Director of IR;

 

WHEREAS, the Company has decided to promote Executive to the position of Chief Financial Officer (“CFO”) of the Company; and

 

WHEREAS, the Company desires to employ Executive in such new position, and Executive is willing to accept such employment with the Company, in accordance with the terms and conditions of this Agreement;

 

NOW, THEREFORE, on the basis of the foregoing premises and in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

 

1.           Employment, Title and Duties.  The Company hereby agrees to employ Executive, and Executive hereby accepts employment with the Company, on the terms, and subject to the conditions, set forth herein.  During the Employment Period (as defined in Section 2 below), employee shall (i) render her services to the Company as CFO; and (ii) perform the duties consistent with those typical of the chief financial officer of a publically traded company and such other duties commensurate with her position (including that as the Company’s only US-based employee) as shall be specified or designated by the Company from time to time, including, without limitation, increasing the Company’s profile in the US capital markets, planning and representing the Company at investor road shows and conferences, and targeting and handling buy and sell side research inquiries.  Executive shall be classified as an “exempt employee,” and, as such, shall be ineligible for overtime pay.

 

2.           Term.  Executive’s employment hereunder shall commence on the Effective Date and shall continue for one year following the Effective Date (the “Initial Term”), subject to earlier termination exclusively as provided for in Section 6 below, and subject to extension as provided in the following sentence.  Prior to the first and second anniversary of the Effective Date, Executive’s employment hereunder may, at the election of the Company, be renewed for successive, additional one-year periods (each a “Renewal Term”), subject to earlier termination as exclusively provided for in Section 6 below, upon written notice to Executive delivered no later than 30 days prior to each such anniversary.  For the purposes of this Agreement, the “Term” shall mean the Initial Term as it may be so extended by one or two Renewal Terms, and the “Employment Period” shall mean the period of Executive’s employment with the Company.  In the event Executive remains employed by the Company following the Term, such employment shall be “at-will” and not subject to the terms of this Agreement, except for Sections 9-11 and 14 below.

 

  

  

  

 

3.           Compensation.  During the Employment Period only (unless otherwise expressly provided for herein), Executive shall be entitled to the following compensation.

 

3.1           Salary.  Executive shall receive a base salary (“Base Salary”) at the rate of not less than $200,000 per year, less applicable withholdings and deductions, payable in substantially equal installments in accordance with the Company’s normal payroll practices and procedures in effect at the time of payment.  Subject to the foregoing, and after review and recommendation of the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”), the Company may, at its discretion, periodically review and change Executive’s Base Salary.

 

3.2           Signing Bonus.  Within 15 days after the full execution of this Agreement, Executive shall be paid, in a lump sum, a signing bonus in the amount of $15,000.

 

3.3           Discretionary Bonuses.  Any bonuses to be paid to Executive (each, a “Discretionary Bonus”) shall be determined and paid at the sole and complete discretion of the Compensation Committee and may be based on a variety of factors, including, but not limited to, Executive’s individual performance and the overall performance of the Company.  To be eligible for a Discretionary Bonus, Executive must be employed by the Company at the time such Discretionary Bonus is paid.

 

3.4           Paid Time Off.  Executive shall be entitled to 15 days of paid vacation per calendar year, as well as other paid time off (e.g., for holidays, sick days, personal days, etc.), subject to and in accordance with then current Company policy.

 

3.5           Stock Options.  As soon as is practicable after the full execution of this Agreement, the Company will grant to Executive a nonqualified stock option for 225,000 shares of the Company’s common stock (the “Option”), with a per share exercise price equal to the closing price of a share of the Company’s common stock (a “Share”) on the day of the grant of the Option, under and subject to all of the terms of the Lihua International, Inc. 2009 Omnibus Securities and Incentive Plan.  The Option will vest in the three equal installments of 75,000 Shares each, respectively, on the first, second and third year anniversaries of the Effective Date, provided that any such installment will not vest, and will be forfeited, if on the vesting date therefor Executive is not employed as CFO of the Company.

 

3.6           Required Taxes and Withholdings.  Even if not otherwise specified herein, the Company shall withhold from any payments made under this Agreement all federal, state, local or other taxes and withholdings as shall be required pursuant to any applicable law or governmental regulation or ruling.  As CFO and the only US-based employee of the Company, Executive’s duties hereunder shall also include ensuring that all such required withholdings are made.

 

4.           Exclusivity; Best Efforts; Duty to Company.  During the Employment Period, Executive shall (i) in all respects conform to and comply with the lawful directions and instructions given to her by the Company; (ii) devote her entire business time, energy and best efforts to her services under this Agreement; (iii) use her best efforts to promote and serve the interests of the Company; (iv) comply with the policies and practices established by the Company from time to time; and (v) not engage in any other business or activity that impairs or conflicts with her performance of her obligations and duties to the Company.

 

  

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5.           Reimbursement for Expenses.  Executive is authorized to incur reasonable expenses in the discharge of the services to be performed hereunder in accordance with the Company’s expense reimbursement policy, as the same may be modified by the Company from time to time in its sole and complete discretion.  The Company shall reimburse Executive for all such proper expenses upon presentation by Executive of itemized accounts of such expenditures in accordance with the Company’s expense reimbursement policy in effect from time to time.

 

6.           Termination of Employment.

 

6.1           Death.  Executive’s employment hereunder shall immediately and automatically be terminated upon Executive’s death.

 

6.2           Disability.  If Executive has been, with or without a reasonable accommodation, unable to perform the essential functions of the services contemplated hereunder for a period of not less than 90 consecutive days or an aggregate of 120 days during any twelve-month period, the Company may terminate Executive’s employment hereunder by providing written notice of such termination and its effective date to Executive.  Any dispute as to whether Executive is disabled shall be resolved by an independent physician, reasonably acceptable to Executive and the Company, whose determination shall be final and binding upon both Executive and the Company.

 

6.3           For Cause by the Company.  The Company may terminate Executive’s employment for Cause, at any time, upon written notice describing the nature of such Cause.  For purposes of this Agreement, the term “Cause” means Executive’s (i) willful misconduct; (ii) willful or gross neglect of her job duties; (iii) failure to materially perform her job duties; (iv) insubordination; (v) failure to materially comply with the Company’s policies and practices; (vi) acts of moral turpitude, theft, fraud or dishonesty; (vii) commission of any felony or misdemeanor (other than minor traffic violations or offences of a comparable magnitude not involving dishonesty, fraud or breach of trust); (viii) material breach of any contractual agreement between her and the Company, including, without limitation, this Agreement; or (ix) acts that are (or reasonably would be expected to be) damaging or detrimental to the Company, provided that, in the event of conduct described in clauses (iii), (iv), (v), (viii) or (ix), Cause shall only exist if, to the extent such basis for Cause is curable, Executive fails to cure such basis for Cause to the reasonable satisfaction of Employer within two (2) business days of Employer’s written notice thereof, if reasonably curable within two (2) business days, or if not, then within such time as is reasonable under the circumstances, which in no event shall exceed 15 calendar days.  Executive’s date of termination in the event Executive’s employment is terminated for Cause shall be the date on which Executive is given notice of termination under this Section 6.3, except, if a notice period is required, Executive’s date of termination shall be upon the expiration of said notice period if Executive fails to cure within such period her conduct giving rise to Cause.

 

6.4           Without Cause by the Company.  The Company may terminate Executive’s employment without Cause, at any time, with or without prior notice, in its sole and complete discretion by providing written notice of such termination and its effective date to Executive.

 

  

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6.5           Resignation with Good Reason.  Executive may resign her employment hereunder for Good Reason, at any time, provided that (i) Executive provides the Company with at least 30 days’ (but not greater than one hundred twenty (120) days) prior written notice thereof within thirty (30) days of the occurrence of the event giving rise to Good Reason, and (ii) Executive provides the Company with a thirty (30) day opportunity to cure the event giving rise to Good Reason following the delivery of such notice (the “Cure Period”).  For the purpose of this Agreement, the term "Good Reason" means (i) a material and substantial diminution in Executive’s duties, authority, or responsibilities that would be inconsistent with Executive’s position (other than such a diminution pursuant to Section 8 below), (ii) a material failure by the Company to pay Executive’s Base Salary or other compensation as provided for herein; or (iii) any other material breach by the Company of the terms this Agreement.  For the avoidance of any doubt, if Executive does not provide the Company with timely notice as provided for in this paragraph with respect to an event purporting to give rise to Good Reason, Executive shall have waived her right to terminate her employment hereunder for Good Reason with respect to such event.  For the purpose of this Agreement, Executive’s date of termination in the event Executive resigns her employment for Good Reason shall be the expiration date of the Cure Period provided for in this section (provided the Company has failed to materially cure the condition giving rise to Good Reason), except the Company may waive all or any part of such Cure Period, in which event Executive’s date of termination shall be the last day of such Cure Period that has not been waived or, if the entire Cure Period has been waived, the date that Executive provided notice of termination of employment.

 

7.           Effect of Termination of Employment

 

7.1           Generally.  In the event Executive’s employment with the Company terminates, Executive shall have no right to receive any compensation, benefits or any other payments or remuneration of any kind from the Company, except as otherwise provided by this Section 7, in any separate written agreement between Executive and the Company or as may be required by law.  In the event Executive’s employment with the Company is terminated (regardless of the reason therefor), Executive (or Executive’s estate in the event of termination due to Executive’s death) shall receive the following (collectively, the “Accrued Amounts”):  (i) Executive’s Base Salary through and including the effective date of Executive’s termination of employment (the “Termination Date”), which shall be paid no later than the first regularly scheduled payroll date following the Termination Date;  and (ii) payment for any unreimbursed business expenses subject to, and in accordance with, the terms of Section 5 above.

 

7.2           Severance Pay.  In the event Executive’s employment is terminated pursuant to Sections 6.1 (death), 6.2 (disability), 6.4 (without Cause) or 6.5 (Good Reason), in addition to the Accrued Amounts, Executive shall be entitled to receive severance pay in an amount equal to 6 months of Executive’s Base Salary as of the Termination Date (“Severance Pay”), subject to and in accordance with the terms of this Section 7.2.  Payment of Severance Pay is conditioned on (i) Executive’s continued compliance in all material respects with Section 9 below and (ii) Executive signing (without revoking if such right is provided under applicable law) a separation agreement and general release in a form acceptable to the Company (a “Separation Agreement”).  The Severance Pay shall be paid in the form of salary continuation pursuant to the terms and conditions of Section 3.1 above commencing on a regularly scheduled payroll date of the Company within 90 days following the Termination Date, provided that, if such 90-day period spans two calendar years, then such salary continuation shall commence in the calendar year following the year in which the Termination Date occurs, and provided further that the first payment shall include payment for any payroll dates between the Termination Date and the date of such payment.

 

  

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8.           Notice of Termination.  In the event Executive elects to terminate her employment hereunder by resigning with Good Reason under Section 6.5 above, Executive agrees to provide the Company with the applicable prior written notice of termination required by such section (the “Notice Period”).  The Company may in its discretion elect to place Executive on a paid leave of absence for all or any part of the Notice Period.  If Executive provides the Company with written notice of Executive’s intent to terminate her employment, the Company retains the right to terminate Executive’s employment under Section 6.3 above during the Notice Period, except that the Company shall not terminate Executive’s employment for Cause based on Executive’s failure to report to work during the Notice Period if the Company does not require Executive to report to work during the Notice Period.  Executive shall receive all payments due hereunder for the period of time the Company requires Executive to be subject to such Notice Period.  During the Notice Period, Executive shall perform any duties and responsibilities the Company reasonably requests of Executive consistent with the provisions of Section 1 hereof.

 

9.           Confidentiality, Non-Solicitation and Non-Competition.

 

9.1           Representations and Acknowledgements.  Executive represents and acknowledges that:  (i) among the Company’s most valuable and indispensable assets are its Confidential Information (defined below) and its close relationships with its customers, suppliers and employees, which the Company has devoted and continues to devote a substantial amount of time, money and other resources to develop; (ii) Executive is in a position of trust and confidence, and by working at the Company, Executive will be exposed to and acquire the Company’s Confidential Information and develop, at the Company’s expense, special and close relationships with the Company’s customers and suppliers; (iii) the Company’s Confidential Information and close customer, supplier and employee relationships must be protected; (iv) this Section 9 is a material provision of this Agreement and the Company would not employ Executive hereunder but for the promises and acknowledgements that Executive makes in this Section 9; and (v) to the extent required by law, the covenants in this Agreement contain reasonable limitations as to time, geographical area and scope of activities to be restricted and that such covenants do not impose a greater restraint on Executive than is necessary to protect the Company’s Confidential Information, close customer, supplier and employee relationships and other legitimate business interests.

 

  

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9.2           Non-Disclosure of Confidential Information.  Executive shall not, either during or after the termination of Executive’s employment by the Company, except to the extent necessary to perform Executive’s duties hereunder or as required by law, use or disclose to any other person or entity outside of the Company any Confidential Information of the Company or any information received in confidence by the Company from any third party.  As used in this Agreement, “Confidential Information” shall mean any and all information not in the public domain or generally known in the industry of the Company (and information in the public domain or generally known in the industry only as a result of Executive’s breach of her obligations of confidentiality to the Company), in any form, acquired by Executive during the course of Executive’s employment with the Company, including, without limitation, the Company’s trade secrets and non-public information relating to the Company’s past, present and future actual or prospective businesses, Intellectual Property (as defined in Section 10 below), products and services, operations, structure, designs, concepts, research, software packages, operations, marketing strategies, sources or leads for and methods of obtaining new business, costs, pricing, financial condition, customers, vendors, suppliers, distribution methods, supply chain methods, employees, independent contractors and hiring practices.

 

9.3             No Competition or Interference with Customers and Suppliers.  Executive agrees that, during the Employment Period and for a period of one (1) year thereafter (the “Restricted Period”), regardless of whether, or on what basis, Executive’s employment is terminated prior thereto or any claim that Executive may have against the Company under this Agreement or otherwise, Executive shall not, without the prior written consent of the Company, directly or indirectly, on behalf of herself or on behalf of or in conjunction with any person or entity (a “Person”), whether as an employee, agent, consultant, independent contractor, officer, director, principal, shareholder (except as a holder, for investment purposes only, of not more than one percent (1%) of the outstanding stock of any company listed on a national securities exchange, or actively traded in a national over-the-counter market), equity holder, partner, member, joint venturer, lender, investor or otherwise, attempt to or actually:

 

(a)           solicit, induce, contact or persuade any Customer to terminate, reduce or refrain from renewing or extending its contractual or other relationship with the Company in regard to the purchase of products or services developed, marketed or sold by the Company, or to become a customer of or enter into any contractual or other relationship with Executive or any other person or entity for products or services that are the same, similar or otherwise in competition with the products and services of the Company (collectively, “Competing Services”); and/or

 

(b)           solicit, induce, contact or persuade any supplier of goods or services to the Company (“Supplier”) to terminate, reduce or refrain from renewing or extending its contractual or other relationship with the Company in regard to the supplying of goods or services to the Company; and/or

 

(c)           offer or provide to any Customer any Competing Services; and/or

 

(d)           engage in the business of providing products or services that are the same, similar or otherwise in competition with the products and services that the Company has actually offered or has actively contemplated offering at any time during the Restricted Period, within the United States.

 

  

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For purposes of this Agreement, “Customer” shall mean any company or individual:  (i) who contacted Executive, whom Executive contacted or served, or for whom Executive supervised contact or service regarding the actual or potential purchase of Company products or services during the period of Executive’s employment by the Company; (ii) who purchased products or services from the Company during the period of Executive’s employment by the Company; and/or (iii) who the was an active prospect of the Company for the purchase of products or services from the Company during the period of Executive’s employment by the Company.

 

9.4           No Interference with Employees.  Executive agrees that, during the Restricted Period, regardless of whether, or on what basis, Executive’s employment is terminated prior thereto or any claim that Executive may have against the Company under this Agreement or otherwise, Executive shall not, without the prior written consent of the Company, directly or indirectly, on behalf of herself or on behalf of or in conjunction with any Person, whether as an employee, agent, consultant, independent contractor, officer, director, principal, shareholder (except as a holder, for investment purposes only, of not more than one percent (1%) of the outstanding stock of any company listed on a national securities exchange, or actively traded in a national over-the-counter market), equity holder, partner, member, joint venturer, lender, investor or otherwise, attempt to or actually, (i) solicit, induce or entice any employee, consultant or independent contractor of the Company to terminate, reduce or refrain from renewing or extending such person’s or entity’s business or employment relationship with the Company; (ii) solicit, induce or entice any employee of the Company to perform services in competition with those offered by the Company; (iii) otherwise interfere with the relationship between the Company and any employee, consultant or independent contractor of the Company; or (iv) employ or otherwise engage as an employee, independent contractor or consultant (x) any employee of the Company or (y) any person who was employed by the Company within the prior twelve-month period.

 

9.5           Non-Disparagement.  During and after Executive’s employment with the Company, except as may be required by law, Executive must not make any statement (verbal, written or otherwise) about the Company or its financial status, business, personnel, directors, officers, consultants, services or business methods that is intended to or is reasonably likely to disparage or denigrate the Company.

 

9.6           Notice to Subsequent Employers.  Upon commencing any new employment or independent contractor relationship during the Restricted Period, Executive shall expressly advise each new employer and each Person for whom Executive has agreed to serve as an independent contractor (each, a “New Employer”) of Executive’s continuing obligations to the Company under this Agreement and, in particular, this Section 9.

 

  

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9.7           Injunctive Relief and Other Remedies.  Executive acknowledges that a breach of any of the covenants contained in this Section 9 will result in material irreparable injury to the Company and/or its subsidiaries or affiliates for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary and/or permanent injunction, without the necessity of posting a bond or of proving irreparable harm or injury as a result of such breach or threatened breach of this Section 9, restraining Executive from engaging in activities prohibited by this Section 9 and such other relief as may be required specifically to enforce any of the covenants in this Section 9.  The Executive further agrees that, if she breaches any of the provisions of this Agreement (including any of the covenants contained in this Section 9), to the extent permitted by law, she shall (i) forfeit her right to receive the balance of any compensation and/or benefits due her under this Agreement; (ii) pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Executive as the result of any action or transaction constituting a breach of any provision hereof; and (iii) pay over to the Company all costs and expenses incurred by the Company resulting from Executive’s breach (including, without limitation, reasonable attorneys’ fees and expenses in dealing with her breach or any suits or actions with regard thereto) and for all damages (compensatory, along with punitive) that may be awarded in connection therewith.  The provisions of this section shall not limit any other remedies available to the Parties as a result of a breach of the provisions of this Agreement or otherwise.

 

10.           Company’s Intellectual Property Rights. Executive acknowledges and agrees that all Intellectual Property created, made or conceived by Executive (solely or jointly), during Executive’s employment by the Company, will be owned exclusively by the Company whenever the Intellectual Property relates to the actual or anticipated businesses of the Company or results from or is suggested by any work performed by employees for or on behalf of the Company.  Executive further acknowledges and agrees that all such Intellectual Property shall constitute “works made for hire” under the Copyright Act of 1976.  Executive agrees (i) to the extent such Intellectual Property is deemed not to be a works made for hire, that this Agreement shall constitute an assignment to the Company of the Executive’s rights (including, but not limited to, copyright, trademark, trade dress, trade secret, design and patent rights), if any, in all such Intellectual Property, and (ii) to assist the Company, and to take all reasonable steps, with securing patents, registering copyrights and trademarks, and obtaining any other forms of protection for the Intellectual Property in the United States and elsewhere.  As used in this Agreement, “Intellectual Property” shall mean and include literary works, product designs, artwork, graphic designs, web site designs, audio-visual works, trademarks, business ideas and methods, Confidential Information (as defined in Section 9.2 above), and any other patents, inventions or works of creative authorship.

 

11.           Company Property.  Executive agrees that all drawings, designs, blueprints, reports, computer programs or data, books, handbooks, manuals, files (electronic or otherwise), computerized storage media, papers, memoranda, letters, notes, photographs, facsimile, software, computers, PDAs, Blackberries and other documents (electronic or otherwise), materials and equipment of any kind that Executive has acquired or will acquire during the course of Executive’s employment with the Company are and remain the property of the Company.  Upon termination of employment with the Company, or sooner if requested by the Company, Executive agrees to return all such documents, materials and records to the Company and not to make or take copies of the same without the prior written consent of the Company.

 

12.           Representations Regarding Prior Work and Legal Obligations.  Executive acknowledges and agrees that (i) she is not permitted to make any unauthorized use of documents or other information in her employment with the Company which could properly be considered or construed to be confidential or proprietary information of another Person and (ii) she may not bring any confidential documents or other form of tangible information onto the Company’s premises relating to any prior employment of Executive.  Executive represents and warrants that she will adhere to such obligations and that she has no contractual commitments or other legal obligations that would prohibit her from entering into this Agreement or performing her obligations and duties hereunder.

 

  

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13.           Indemnification and Liability Insurance.  The Company will indemnify the Executive and hold her harmless to the fullest extent permitted by law and its corporate governance documents against and in respect of any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including advancement of reasonable attorney’s fees), losses, and damages resulting from Executive’s good faith performance of her duties and obligations to the Company.  The Company will cover Executive under its directors’ and officers’ liability insurance in the same amount and to the same extent as the Company covers its other officers and directors.  If, after the Company indemnifies Executive hereunder, it is ultimately determined that Executive is not entitled to have been so indemnified, Executive shall promptly repay to the Company the full amount for which he was so indemnified.

 

14.           Miscellaneous Provisions.

 

14.1         Section 409A Compliance.  Unless otherwise expressly provided, any payment of compensation by the Company to Executive, whether pursuant to this Agreement or otherwise, shall be made within two and one-half months (21⁄2 months) after the later of the end of the calendar year or the Company’s fiscal year in which Executive’s right to such payment vests (i.e., is not subject to a “substantial risk of forfeiture” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)).  For purposes of this Agreement, termination of employment shall be deemed to occur only upon “separation from service” as such term is defined under Section 409A and all payments and installment payments shall be treated as separate individual payments for purpose of applying Code Section 409A to such amounts. To the extent that any severance payments (including payments on termination for “Good Reason”) come within the definition of “involuntary severance” under Section 409A, such amounts up to the lesser of two times the Executive’s annual compensation for the year preceding the year of termination or two (2) times the Section 401(a)(17) limit for the year of termination, shall be excluded from “deferred compensation” as allowed under Section 409A, and shall not be subject to the following Section 409A compliance requirements.  All payments of “nonqualified deferred compensation” (within the meaning of Section 409A) are intended to comply with the requirements of Section 409A, and shall be interpreted in accordance therewith. Neither party individually or in combination may accelerate, offset or assign any such deferred payment, except in compliance with Section 409A, and no amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A.  In the event that Executive is determined to be a “key employee” (as defined and determined under Section 409A) of the Company at a time when its stock is deemed to be publicly traded on an established securities market, payments determined to be “nonqualified deferred compensation” payable upon separation from service shall be made no earlier than (i) the first day of the seventh (7th) complete calendar month following such termination of employment, or (ii) Executive’s death, consistent with the provisions of Section 409A.  Any payment delayed by reason of the prior sentence shall be paid out in a single lump sum at the end of such required delay period in order to catch up to the original payment schedule.  All expense reimbursement or in-kind benefits subject to Section 409A provided under this Agreement or, unless otherwise specified in writing, under any Company program or policy, shall be subject to the following rules: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided during one calendar year may not affect the benefits provided during any other year; (ii) reimbursements shall be paid no later than the end of the calendar year following the year in which the Executive incurs such expenses, and the Executive shall take all actions necessary to claim all such reimbursements on a timely basis to permit the Company to make all such reimbursement payments prior to the end of said period, and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. Notwithstanding anything herein to the contrary, no amendment may be made to this Agreement if it would cause the Agreement or any payment hereunder not to be in compliance with Section 409A.

 

  

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14.2         Severability and Blue Penciling.  If any provision of this Agreement is held to be invalid, the remaining provisions shall remain in full force and effect.  However, if any court determines that any covenant in this Agreement or any part thereof is unenforceable because the duration, geographic scope or restricted activities thereof are overly broad, then such provision or part thereof shall be modified by reducing the overly broad duration, geographic scope or restricted activities by the minimum amount so as to make the covenant, in its modified form, enforceable.

 

14.3         Assignability and Binding Effect.  This Agreement shall inure to the benefit of and shall be binding upon the heirs, executors, administrators, successors and legal representatives of Executive, and shall inure to the benefit of and be binding upon the Company and its successors and assigns, but the obligations of Executive may not be delegated or assigned.  Executive shall not be entitled to assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this Agreement, or any of Executive’s rights hereunder, and any such attempted delegation or disposition shall be null and void and without effect.  It is hereby acknowledged and agreed that the Company shall have the right to assign or transfer all or any part of its rights and obligations hereunder and that this Agreement and all of the Company’s rights and obligations hereunder may be assumed by any assignee of or successor to the Company.

 

14.4         Governing Law and Jurisdiction.  Except to the extent preempted by federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law.  Additionally, in connection with any proceeding brought to enforce this Agreement or arising out of Executive’s employment with the Company, Executive agrees that such proceeding shall be resolved exclusively in an appropriate state or federal court located in New York, New York and hereby consents and waives any objection to the jurisdiction of any such court.

 

14.5         Mutual Waiver of Jury Trial.  Each Party hereto hereby waives the right to trial by jury in any action or proceeding based upon, arising out of, or in any way relating to this Agreement, Executive’s employment with the Company or the termination of such employment, whether sounding in contract, tort or otherwise.

 

  

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14.6         Notices.

 

(a)           Any notice or other communications under this Agreement shall be in writing and shall be delivered by hand, email (provided receipt of such email is acknowledged by the recipient) or mailed by overnight courier or by registered or certified mail, postage prepaid:

 

(i)           if to Executive, to Executive’s address on the books and records of the Company, and

 

(ii)           if to the Company:

c/o Lihua Holdings Limited

Danyang Lihua Electron Co. Ltd.

Houxiang Five-Star Industry District

Danyang City, Jiangsu Province, PRC 212312

with a copy to:

Loeb & Loeb LLP

345 Park Avenue

New York, NY  10154

Attention:  Mitchell S. Nussbaum, Esq.

email: mnussbaum@loeb.com

fax: (212) 504-3103

 

(b)           Any notice so addressed shall be deemed to be given: if delivered by hand, email or facsimile, on the date of such delivery; if mailed by overnight courier, on the first business day following the date of such mailing; and if mailed by registered or certified mail, on the third business day after the date of such mailing.

 

14.7         Survival of Terms.  All provisions of this Agreement that, either expressly or impliedly, contain obligations that extend beyond termination of Executive’s employment hereunder (including, without limitation, those in Sections 7 and 9-11 above and this Section 14) shall survive the  termination of this Agreement and of Executive’s employment hereunder for any reason.

 

14.8         Interpretation.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  No provision in this Agreement will be interpreted in favor of, or against, any of the Parties by reason of the extent to which any such Party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof.  Accordingly, the language in all parts of this Agreement shall in all cases be construed according to its fair meaning, and not strictly for or against any Party.  In this Agreement, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

 

  

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14.9         Entire Agreement.  This Agreement constitutes the entire understanding and agreement of the Parties hereto regarding the subject matter hereof.  This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements regarding such subject matter.  The Company and Executive each acknowledge and agree that they are not relying on, and they may not rely, on any oral or written representation of any kind that is not set forth in writing in this Agreement.

 

14.10       Waivers and Amendments.  This Agreement may be altered, amended, modified, superseded or canceled, and the terms 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 by 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 such right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

 

14.11       Counterparts.  This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the efficacy of a signed original.  Photographic, electronically scanned and facsimiles of such signed counterparts may be used in lieu of the originals for any purpose.

 

[The remainder of this page is intentionally blank; signature page follows.]

 

  

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IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the Effective Date.

	
LIHUA INTERNATIONAL, INC.

	  
	
By:

	 
/s/ Jianhua Zhu

	  	
Name: Jianhua Zhu

	  	
Title: Chief Executive Officer

	  
	
EXECUTIVE

	  
	
By:

	 
/s/ Daphne Yan Huang

	  	
Daphne Yan Huang

 

  

13Unassociated Document

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (as amended, modified or supplemented and in effect from time to time, this “Agreement”) is made and entered into this 23rd day of October 2011 by and between DANYANG LIHUA ELECTRON CO., LTD. (the “Lihua Electron”), and Yang “Roy” Yu (the “Executive”).

 

WHEREAS, Lihua Electron is the indirect, wholly owned subsidiary of Lihua International, Inc. (the “Parent”), a Delaware company whose common stock is listed on The Nasdaq Stock Market, LLC; and

 

WHEREAS, Lihua Electron desires to employ the Executive to provide services to Lihua Electron, pursuant to the terms of this Agreement, and to provide the same or similar services under this Agreement to the Parent and Jiangsu Lihua Copper Industry Co., Ltd.; a PRC limited liability company (together, with Lihua Electron, the “Company”); and

 

WHEREAS, the Board has approved the employment of the Executive to provide the services outlined in this Agreement; and

 

WHEREAS, the Executive desires to provide such services pursuant to this Agreement.

 

NOW THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement, the parties agree as follows:

 

ARTICLE I            SELECTED DEFINITIONS

 

1.1           Defined Terms.  As used herein, the terms below shall have the following meanings:

 

“Board” shall mean the Board of Directors of the Parent.

 

“Business” shall mean the (i) the existing business of the Company, including Copper Clad Aluminum, Scrap Copper Recycling and Copper Anode; and (ii) such other businesses as the Company is engaged, or with respect to which the Company has a written letter of intent, joint venture agreement, acquisition agreement or other similar written agreement to enter into such other business, at the date of the termination of the Effective Period.

 

“Cause” shall mean:

 

(a)           the Executive’s conviction for, or entry of a plea of guilty or nolo contendere or no contest with respect to any felony or a misdemeanor involving dishonesty or moral turpitude;

 

(b)           the Executive’s (i) willful gross misconduct, including, without limitation, dishonesty, embezzlement, fraud, theft or other misappropriation or (ii) willful bad faith act or failure to act that is materially injurious to the business or reputation of the Company;

 

  

  

  

 

(c)           the Executive’s failure to execute and carry out a reasonable lawful directive of the Board relating to the Business; or

 

(d)           the Executive’s material breach of any of his obligations hereunder or the Company’s policies and procedures as in effect from time to time;

 

“Consent” means any consent, authorization or approval;

 

“Effective Period” shall mean the period commencing on the date hereof and ending on the first (1st) anniversary of this Agreement (unless earlier terminated pursuant to this Agreement); provided, however, that the Executive’s employment may be renewed prior to the first and second anniversary of this Agreement, upon written notice to the Executive delivered no later than 30 days prior to each such anniversary;

 

“Good Reason” shall mean the occurrence without the Executive’s written consent of any of the following circumstances: (i) a material breach by the Company of any material provision of this Agreement including, but not limited to, failure to pay salary or benefits when due or the failure to appoint the Executive to the position provided for in Section 2.1 hereof, provided that, such breach is not cured by the Company within fifteen (15) days after receipt of the Executive’s written notification to the Company, specifically in reasonable detail, the facts and circumstances alleged to constitute such breach; or (ii) any material adverse alteration of Executive’s position, duties or responsibilities hereunder, including, without limitation, the duties set forth in Section 2.1 (except in each case in connection with the termination of Executive’s employment for Cause or disability or as a result of the Executive’s death or temporarily as a result of the Executive’s illness or other absence) or the assignment to Executive of duties or responsibilities materially inconsistent with Executive’s position as Executive Vice President of Finance of the Company proved such alteration or assignment is not cured by the Company within fifteen (15) days after receipt of the Executive’s written notification to the Company, specifying in reasonable detail the facts and circumstances alleged to constitute such alteration or assignment;

 

“Governmental Entity” means any government or agency, district, bureau, board, commission, court, department, official, political subdivision, tribunal, taxing authority or other instrumentality of any government, whether federal, state or local, domestic or foreign;

 

“Incentive Plan” shall mean the Parent’s 2009 Omnibus Securities and Incentive Plan;

 

“Law” means any constitutional provision, statute or other law, rule, regulation, or interpretation of any Governmental Entity and any Order;

 

  

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“Order” means any decree, injunction, judgment, order, award, ruling, assessment or writ by a court administrative agency, other Governmental Entity, arbitrator or arbitration panel;

 

“Restricted Period” means one (1) year from the Termination Date;

 

“Salary” shall mean compensation at a rate of One Hundred and Fifty Thousand Dollars ($150,000) per annum;

 

“Termination Date” shall mean the effective date of the termination of the Executive’s employment with the Company;

 

“Termination for Cause” shall mean the discharge of the Executive and termination of this Agreement for any or all of the items set forth in the definition of Cause;

 

“Termination for Good Reason” shall mean the termination of this Agreement by the Executive for Good Reason;

 

“Territory” shall mean the People’s Republic of China.

 

ARTICLE II           EMPLOYMENT

 

2.1           Title: Duties.  The Company agrees to employ the Executive, and the Executive agrees to serve as the Executive Vice President of Finance of the Company during the Effective Period.  The Executive shall have all the responsibilities and power normally associated with such office.  The Executive shall perform such other duties and services for the Company, if any, commensurate with the Executive’s position, and as may be designated from time to time by the Company and the Board.

 

2.2           Performance of Duties

 

2.2.1           The Executive agrees to devote all of his professional time, attention skills and energies to his duties as Executive Vice President of Finance and to use his best efforts to perform such duties in an efficient, trustworthy and businesslike manner.  During the Effective Period the Executive shall not be employed or engaged in any other business activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage, provided, however, the Executive may engage in personal investment activities for himself and his family and he may engage in charitable and civic activities and in all such cases, so long as such activities do not interfere with the performance of his duties hereunder.  The Executive will be based at the Company’s offices in the Danyang City, China, but his position will require reasonable travel outside of such area (taking into consideration the nature and location of the Business, operations, existing and prospective suppliers and customers).

 

2.2.2           The Executive represents and warrants that he is not bound by any employment, consulting, non-competition, confidentiality, finders, marketing or other agreement or arrangement that would or might reasonably be expected to prohibit or restrict him from performing his duties and obligations hereunder.

 

  

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2.2.3           The Executive shall work no less than five (5) days per week, eight (8) hours per day, with the average working hours not exceeding forty (40) hours per week.  The Company may require the Executive to work overtime due to the business needs of the Company and the Company shall pay the Executive overtime pay in accordance with its overtime management rules and the relevant state and local regulations.

 

2.2.4           The Company shall provide the Executive with appropriate working conditions and facilities with labor protection in accordance with local standards, and the Executive shall comply with the rules and regulations of work safety formulated by the Company.

 

ARTICLE III          COMPENSATION AND OTHER FINANCIAL MATERS

 

3.1           Compensation.  The Company shall pay the Salary to the Executive during the Effective Period in arrears in equal installments pursuant to the Company’s customary payroll policies in force at the time of payment, less payroll taxes and other deductions required by applicable law and other deductions authorized in writing by the Executive.  The Company shall have the right, after review and recommendation of the Compensation Committee of the Board of Directors, to adjust the Salary and welfare of the Executive appropriately based on the capability, experience, attitude, performance, achievement and position of the Executive, as well as according to the Salary and position adjustment policies and business conditions experienced by the Company.

 

3.2           Deductions.  The Company shall deduct the individual income tax of the Executive and the portion of the society insurance and other welfare benefits which are to be borne by the Executive from the salary payable to the Executive in accordance with the relevant PRC laws and regulations.

 

3.3           Insurance, Welfare and Leave.  The parties shall pay premiums for social security insurance schemes, such as Pension, Unemployment and Medical Insurance, in accordance with relevant PRC laws and regulations.

 

3.4           Bonus.  The Company, in the sole discretion of the Compensation Committee of the Board, may pay to the Executive an annual bonus of up to $30,000, payable at such time as is consistent with the Company’s past practice, and subject to the Company’s ordinary payroll practice.

 

3.5           Benefits.  During the Effective Period, the Executive will be entitled to receive and take such number of paid vacation days per year consistent with Company’s prior practices, which may be taken at such times and for such periods as are reasonable, taking into account the best interests of the Company, after consultation with the Board.  The Company shall provide the Executive with such insurance, medical, dental, sick leave, holiday and other benefits as may be given and amended from time to time to other senior management of the Company, with such benefits shall be materially consistent with the Company’s prior practices.

 

  

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3.6           Reimbursement of Expenses.  The Company will reimburse the Executive for all ordinary and necessary business expenses incurred by the Executive during the Effective Period in connection with the Business subject to budgets and guidelines established by the Company from time to time.  Reimbursement of such expenses shall be paid in accordance with the Company’s customary policies in force at the time of payment, upon submission by the Executive of receipts and vouchers, itemizing such expenses in a form reasonably satisfactory to the Company, properly identifying the nature and business purpose of any expenditures.

 

3.7           Stock Grant.  The Executive shall receive a 10-year nonqualified stock option to purchase up to 100,000 shares of common stock of the Parent, awarded pursuant to the Incentive Plan, with an exercise price equal to the closing price of one share of common stock of the Parent on the date hereof, which shall vest in installments of 40,000 shares, 30,000 shares and 30,000 shares on the first, second and third year anniversaries of the date of this Agreement, respectively, so long as the Executive remains employed as an officer by the Company at each such vesting date.

 

ARTICLE IV          TERMINATION OF EMPLOYMENT

 

4.1           Termination by the Company for “Cause.”  The Company shall have the right, acting by Board resolution to effect a Termination for Cause by written notice provided to the Executive, provided, however, that if any such “Cause” is under clause (c) or (d) of the definition of Cause, the Company shall not terminate the Executive’s employment under this Section 4.1, unless the Company first gives the Executive written notice of its intention to terminate and of the specific grounds therefor and the Executive has not within fifteen (15) days following receipt of such notice cured any such events that are capable of being cured and that constitute the “Cause” (such fifteenth (15th) day being the Termination Date if no cure is achieved).  Subject to the foregoing provision, the Termination Date of a Termination for Cause under this Section 4.1 shall be the date specified in a written notice of termination to the Executive.

 

4.2           Termination by the Company due to Disability of the Executive.  The Company shall have the right to discharge the Executive and terminate this Agreement by written notice provided to the Executive not less than fifteen (15) days prior to the intended date of discharge and termination (such intended date being the Termination Date), if Executive has failed to materially perform the essential functions required by his employment by reason of any medically determined physical or mental impairment which has lasted for a continuous period of not less than ninety (90) days or for an aggregate of one hundred and twenty (120) business days during any twelve (12) month period, provided that no such discharge or termination shall be effective if prior to the date when such notice is given, the Executive’s impairment shall have terminated and he shall be physically and mentally able to engage, and he shall be engaging in such activities.

 

4.3           Death.  The Effective Period shall terminate forthwith upon the death of the Executive.  The date of death shall be the Termination Date.

 

4.4           Termination by the Executive for “Good Reason”.  The Executive shall have the right to effect a Termination for Good Reason by written notice, provided to the Company not less than thirty (30) days prior to the intended date of termination.  If no cure is achieved during the thirty (30) day cure period, the Termination Date shall be the last date of the thirty (30) day notice period provided in this Section 4.4.

 

  

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4.5           Termination by the Executive for any reason other than Good Reason, Death or Disability.  The Executive shall have the right to effect a Termination for any reason other than Good Reason, Death or Disability by written notice provided to the Company not less than ninety (90) days prior to the intended date of termination.

 

ARTICLE V           EFFECT OF TERMINATION OF EMPLOYMENT

 

5.1           Termination of Employment by the Company.

 

5.1.1           In the event of termination of the Executive’s employment by the Company for Cause, the Executive shall be entitled to continue to receive from the Company through the Termination Date the Salary in accordance with the Section 3.1 hereof, the benefits in accordance with Section 3.5 hereof, and applicable PRC laws.

 

5.1.2           In the event of termination of the Executive’s employment due to the Executive’s disability or death, the Executive (or, if applicable, his estate) shall be entitled to continue to receive from the Company, or the Company to pay for, through the six month anniversary of the Termination Date, the Salary in accordance with Section 3.1 hereof, the benefits in accordance with Section 3.5 hereof, and applicable PRC laws.

 

5.1.3           In the event of termination of the Executive’s employment by the Company other than for Cause, disability or death or by the Executive for Good Reason, the Executive (or, if applicable, his estate) shall be entitled to continue to receive from the Company, or the Company to pay for, through the first anniversary of the Termination Date, the salary in accordance with Section 3.1 hereof and the benefits in accordance with Section 3.5 hereof.  Any Salary and benefits paid after the Termination Date shall be subject to the Executive’s continued compliance in all material respects with Article 6 hereof and the execution and delivery of a separation agreement and general release (other than of the Company’s obligations under this Agreement) in form reasonably acceptable to the Board.

 

5.2           Termination of Employment by the Executive.  In the event of termination of the Executive’s employment by the Executive for any reason other than for Good Reason the Executive shall be entitled to receive from the Company through the Termination Date, the Salary in accordance with Section 3.1 hereof, the benefits in accordance with Section 3.5 hereof, and applicable PRC laws.

 

ARTICLE VI          NON-COMPETITION/NON-SOLICITATION; NON-DISCLOSURE AND NON-USE; NON-DISPARAGEMENT; EQUITABLE RELIEF

 

6.1           Non-Solicitation.

 

6.1.1           In consideration of the Executive’s employment with the Company and his participation in the Incentive Plan, which the Executive acknowledges is of direct benefit to the Executive, the Executive hereby covenants that during the Effective Period and the Restricted Period the Executive and his affiliates shall not directly or indirectly through any other individual person or entity, (i) employ, solicit or induce any individual who is or was at any time during the one (1) year period prior to the Termination Date, an employee or consultant of the Company, or (ii) cause such individual to terminate or refrain from renewing or extending his or her employment by or consulting relationship with the Company.

 

  

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6.1.2           In consideration of the Executive’s employment with the Company and his participation in the Incentive Plan, which the Executive acknowledges is of direct benefit to the Executive, the Executive hereby covenants that during the Effective Period and the Restricted Period the Executive and his affiliates shall not directly or indirectly through any other individual person or entity, solicit, persuade or induce any Customer (as defined below) to terminate, reduce or refrain from renewing or extending its contractual or other relationship with the Company in regard to the purchase of products or services performed, manufactured, rented or sold by the Company or any other individual, person or entity in regard to the purchase of products or services similar or identical to those performed, manufactured, marketed, rented or sold by the Company.  For purposes hereof, “Customer” means any individual, person or entity which is a customer of the Company or which was a customer of the Company within one (1) year prior to the Termination Date.

 

6.1.3           In consideration of the Executive’s employment with the Company and his participation in the Incentive Plan, which the Executive acknowledges is of direct benefit to the Executive, the Executive hereby covenants that during the Effective Period and the Restricted Period the Executive and his affiliates shall not directly or indirectly through any other individual, person or entity, solicit, persuade or induce any Supplier (as defined below) to terminate, reduce or refrain from renewing or extending his, her or its contractual or other relationship with the Company, directly or indirectly in regard to this sale of products or services similar or identical to those performed, manufactured, marketed or sold or purchased by the Company.  For purposes hereof, “Supplier” shall mean any individual, person or entity which is a supplier of any product or service to the Company or which was a supplier to the Company within one (1) year prior to the Termination Date.

 

6.2           Non-Compete.  In consideration for the Executive’s employment with the Company and his participation in the Incentive Plan, which the Executive acknowledges is of direct benefit to the Executive, the receipt and sufficiency of which is hereby acknowledged, the Executive hereby covenants that during the Effective Period and the Restricted Period the Executive shall not directly or indirectly, in his, her and its own capacity or through one or more affiliates, whether as owner, consultant, executive, partner, member, manager, officer, director, venturer, agent through stock ownership, investment of capital, lending of money or property, rendering of services or otherwise, engage or assist others to engage in the Business in the Territory, provided, that the Executive may own up to 4.99% percent of the outstanding shares of a company engaged in such Business if such shares are listed on The Nasdaq Stock Market, LLC or another national securities exchange.

 

  

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6.3           Non-Disclosure and Non-Use.  Without the prior written consent of the Company, neither the Executive nor his/her affiliates shall disclose any confidential information of the Company with respect to the Business, which any of its respective officers, directors, employees, counsel, agents, investment bankers, or accountants, may now possess or may hereafter create or obtain relating to, without limitation know-how, trade secrets, customer lists, supplier lists, referral source lists, costs, profits or margin information, markets, sales, pricing policies, operational methods, plans for future development, data drawings, samples, processes, products, software, the financial condition, results of operations, business, properties, assets, liabilities, or future prospects of the Company with respect to the Business and such information shall not be published, disclosed or made accessible by any of them to any other Person or entity or used by any of them, provided, however, that the Executive may disclose or use any such information (i) as has become generally available to the public other than through a breach of this Agreement by the Executive or any of its affiliates and representatives, (ii) as becomes available to the Executive on a non-confidential basis from a source other than any other party hereto or such other party’s affiliates or representatives, provided that such source is not known or reasonably believed by the Executive to be bound by a confidentiality agreement or other obligations of secrecy, (iii) as may be required in any report, statement or testimony required to be submitted to any Governmental Entity having or claiming to have jurisdiction over it, or as may be otherwise required by applicable Law, or as may be required in response to any summons or subpoena or in connection with any litigation, (iv) as may be required to obtain any governmental approval or Consent required in order to consummate the transactions contemplated by this Agreement or (v) as may be necessary to establish the Executive’s rights under this Agreement; provided, further, that in the case of clauses (i), (iii), and (iv), the Executive shall promptly notify the party to whom it is obliged to keep such information confidential and, to the extent practicable, provide such party a reasonable opportunity to prevent public disclosure of such information.

 

6.4           Non-Disparagement.  The Executive agrees not to (i) in any way publicly disparage the Company, equity holders, officers, directors, employees or agents or the Company, (ii) cause embarrassment or public humiliation to such entitles or persons, or (iii) make any public statement that is adverse, inimical or otherwise detrimental to the interests of any such entities or persons or the Business.

 

6.5           Developments.  The Executive acknowledges that the Company, at the Company’s expense, has acquired, created and maintains, and will continue to acquire, create and maintain, significant goodwill with its current and prospective customers, vendors and employees, and that such goodwill is valuable property of the Company.  The Executive further acknowledges that to the extent such goodwill will be generated through the Executive’s efforts, such efforts will be funded by the Company and the Executive will be fairly compensated for such efforts. The Executive acknowledges that all goodwill developed by the Executive relative to the Company’s customers, vendors and employees will be the sole and exclusive property of the Company and will not be personal to the Executive.  In consideration for the Executive’s employment with the Company and his participation in the Incentive Plan, which the Executive acknowledges is of direct benefit to the Executive, the receipt and  sufficiency of which is hereby acknowledged, the Executive hereby covenants that:

 

6.5.1           All work, designs, materials (tangible and intangible) and products produced, developed, created or completed by the Executive on behalf of the Company during the Effective Period shall be deemed “work made for hire,” as such term is defined under the copyright laws of the United States, and are expressly intended to be wholly owned, and all copyright rights therein to be held, by the Company.  To the extent that any such copyrightable works may not, by operation of law, be works for hire, the executive agrees to and hereby does assign to the Company ownership of all copyright rights in those works.  Each Person within the Company shall have the right to obtain and hold in his/her own name copyrights, registrations and similar protection which may be available for those works.  The Executive agrees to give the Company all assistance it may reasonably require to secure or protect those rights.

 

  

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6.5.2           All discoveries, developments, ideas, improvements, modifications, innovations, inventions, processes, programs, operating instructions, manuals, documentation, discs, tapes, written materials, systems, techniques, hardware, software, test procedures or other things, whether or not patentable (referred to herein as “Inventions”), that are made, conceived or reduced to practice by the Executive, while employed by the Company, solely or with others, whether or not during working hours or on the Company’s premises, and that (i) relate to the Business or actual or demonstrably anticipated research or development or a reasonable or contemplated expansion thereof, or (ii) result from any work performed by the Executive for the Company, or (iii) are developed on the Company’s time or using the Company’s equipment, supplies, facilities or trade secret information, or (iv) are based upon or are related to trade secrets and other confidential information of the Company shall be the property of, and shall promptly be disclosed by the Executive to the Company.

 

6.5.3           At any time during or after the Effective Period, the Executive shall, without further compensation but at the Company’s sole expense, sign all papers and cooperate in all other acts reasonably required to secure or protect the Company’s rights in all such property identified in subsection 6.5.1 and 6.5.2 above, including without limitation executing written assignments therefor and applying for, obtaining and enforcing copyrights or patents thereon in any and all countries.  In the event that the Executive is unable or unavailable or shall refuse to sign any lawful or necessary documents required in order for the Company to apply for and obtain any copyright or patent with respect to any work performed by the Executive under this Agreement (including applications or renewals, extensions, divisions or continuations), the Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his agents and attorneys-in-fact to act for and in the Executive’s behalf, and in Executive’s place and stead, to execute and file any such applications or documents and to do all other lawfully permitted acts to further the prosecution and issuance of copyrights and patents with respect to such new developments with the same legal force and effect as if executed by the Executive.

 

6.6          Equitable Relief. The Executive acknowledges that a breach of the covenants contained in this Article 6, may cause irreparable damage to the Business and the Company, the amount of which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Executive agrees that, in addition to any other remedy which may be available at law or in equity, any person within the Company shall be entitled to specific performance and injunctive relief with or without posting a bond (as determined by a court of competent jurisdiction) to prevent any actual, intended or likely breach. The parties acknowledge that the time, scope and other provisions of this Article 6 have been specifically negotiated by sophisticated commercial parties, each with separate qualified counsel, and agree that all such provisions are reasonable under the circumstances and fair and necessary to protect the interests of the Company and to prevent the Executive from unfairly taking advantage of contacts established during employment by the Company. Accordingly, except to the extent provided in the last sentence of this Section 6.6, the Executive agrees not to contest the validity or enforceability of any provision of Article 6 of this Agreement. In the event that any provision in this Article 6 or any other provision contained in this Agreement shall be determined by any arbitrator or any court of competent jurisdiction to be unenforceable such provisions shall be interpreted to extend only over the maximum period of time for which they may be enforceable and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which they may be enforceable, all as determined by any arbitrator or such court in such action so as to be enforceable to the extent consistent with then applicable law.

 

  

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ARTICLE VII        MISCELLANEOUS PROVISIONS

 

7.1           Assignment and Successors.  The rights and obligations of the Company under this Agreement may be assigned and shall inure to the benefit of and be binding upon the successors and assigns of the Company, provided, that the Company may not assign this Agreement except to its affiliates, pursuant to a reorganization of the Company and any attempt to do so shall be void.  The Executive’s rights or obligations hereunder may not be assigned to or assumed by any other person, provided that the rights of the Executive hereunder shall inure to the benefit of the heirs and personal representatives of the Executive.  No other persons shall have any right, benefit or obligation hereunder.

 

7.2           Notices.  Any notice, request, instruction or other document or communication to be given hereunder shall be in writing and shall be deemed to have been duly given (i) if mailed, at the time when mailed in any general or branch office of the United States Postal service, enclosed in a registered or certified postage-paid envelope, (ii) if sent by facsimile transmission, when so sent and receipt acknowledged by an appropriate facsimile receipt, or (iii) if sent by other means (including e-mail), when actually received by the party to which such notice has been directed, in each case at the respective addresses or numbers set forth below or such other address or number as such party may have fixed by notice; provided, however, that in the event of delivery under clauses (ii) or (iii) (otherwise than by receipted hand delivery), such notice shall be promptly followed by notice pursuant to clause (i);

 

If to the Company:

c/o Lihua Holdings Limited

Danyang Lihua Electron Co. Ltd.

Houxiang Five-Star Industry District,

Danyang City, Jiangsu Province, PRC 212312

 

With a copy to:

 

Loeb & Loeb LLP

345 Park Avenue

New York, NY 10154

Attention: Mitchell S. Nussbaum, Esq.

Fax: (212) 504-3103

 

  

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If to the Executive:

Building 503 3B, 10 Nanhunan Road

Beijing, China, 100102

Attn: Mr. Roy Yu

 

7.3           Severability.  If any provision or portion of this Agreement shall be or become illegal, invalid or unenforceable in whole or in part for any reason, such provision shall be ineffective only to the extent of such illegality, invalidity or unenforceability without invalidating the remainder of such provision or the remaining provisions of this Agreement.  Upon such determination that any term or other provision is illegal, invalid, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the agreements contemplated hereby are fulfilled to the extent possible.

 

7.4           Amendment, Waiver etc..  This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all  prior agreements between the parties with respect to the subject matter hereof and incorporates and supersedes all prior agreements between the parties concerning the employment of the Executive of the Company and may be modified or amended only by a mutual written agreement of the Board, acting by resolution, and the Executive.  There are no other agreements, conditions or representations, oral or written, express or implied, with regard thereto.

 

7.5           Counterparts.  This Agreement may be executed and delivered (including by facsimile or PDF transmission) in counterparts, and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

 

7.6           Non-Waiver of Rights and Breaches.  No failure or delay of any party hereto in the exercise of any right given to such party hereunder shall constitute a waiver thereof unless the time specified herein for the exercise of such right has expired, nor shall any single or partial exercise of any right preclude other or further exercise thereof or of any other right.  The waiver of a party hereto of any default of any other party shall not be deemed to be a waiver of any subsequent default or other default by such party, whether similar or dissimilar in nature.

 

7.7           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PEOPLE’S REPUBLIC OF CHINA.

 

7.8           Dispute Resolution: Consent to Jurisdiction.  Any dispute, controversy or claim arising out of or relating to this Agreement shall be settled by binding and final arbitration in Beijing City under the commercial arbitration rules of the People’s Republic of China then existing.  The decision of the arbitration shall be final and judgment on the arbitration award may be entered in any court having jurisdiction of the subject matter over the controversy.

 

7.9           Expenses.  Each party shall bear his or its own fees and expenses in connection with the preparation, negotiation and execution of this Agreement.

 

  

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7.10         Survival.  Unless otherwise provided herein, the provisions of Articles 6 and 7 hereof shall survive the termination of the Effective Period or termination of this Agreement and shall cease to survive upon the end of the period provided for in Article 6.

 

7.11         Interpretation.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  The language in all parts of this Agreement shall in all cases be construed according to its fair meaning, and not strictly for or against any party hereto.  In this Agreement, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

 

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IN WITNESS WHEREOF, the parties, intending to be legally bound, executed this Agreement as of the date first above written.

	
DANYANG LIHUA ELECTRON CO., LTD.

	  
	
By:

	/s/ Jianhua Zhu
	  	
Name: Jianhua Zhu

	  	
Title: Chief Executive Officer

	  
	
EXECUTIVE

	  
	
By:

	/s/ Yang “Roy” Yu
	  	
Name: Yang “Roy” Yu

 

  

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}]]