Document:

Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of         , 20      by and between ZTO Express (Cayman) Inc., an exempted company incorporated and existing under the laws of the Cayman Islands (the “Company”) and                , an individual with [        passport/ID number                 ] (the “Executive”).

 

RECITALS

 

WHEREAS, the Company desires to employ the Executive and to assure itself of the services of the Executive during the term of Employment (as defined below) and under the terms and conditions of the Agreement;

 

WHEREAS, the Executive desires to be employed by the Company during the term of Employment and under the terms and conditions of the Agreement;

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Executive agree as follows:

 

1.                                      EMPLOYMENT

 

The Company hereby agrees to employ the Executive and the Executive hereby accepts such employment, on the terms and conditions hereinafter set forth (the “Employment”).

 

2.                                      TERM

 

Subject to the terms and conditions of the Agreement, the initial term of the Employment shall be             years, commencing on             ,          (the “Effective Date”) and ending on                ,                  (the “Initial Term”), unless terminated earlier pursuant to the terms of the Agreement. Upon expiration of the Initial Term of the Employment, the Employment shall be automatically extended for successive periods of                   months each (each, an “Extension Period”) unless either party shall have given 60 days advance written notice to the other party, in the manner set forth in Section 19 below, prior to the end of the Extension Period in question, that the term of this Agreement that is in effect at the time such written notice is given is not to be extended or further extended, as the case may be (the period during which this Agreement is effective being referred to hereafter as the “Term”).

 

3.                                      POSITION AND DUTIES

 

(a)                                 During the Term, the Executive shall serve as                of the Company or in such other position or positions with a level of duties and responsibilities consistent with the foregoing with the Company and/or its subsidiaries and affiliated entities as the board of directors of the Company (the “Board”) may specify from time to time and shall have the duties, responsibilities and

 

 

obligations customarily assigned to individuals serving in the position or positions in which the Executive serves hereunder and as assigned by the Board, or with the Board’s authorization, by the Company’s Chief Executive Officer.

 

(b)                                 The Executive agrees to serve without additional compensation, if elected or appointed thereto, as a director of the Company or any subsidiaries or affiliated entities of the Company (collectively, the “Group”) and as a member of any committees of the board of directors of any such entity, provided that the Executive is indemnified for serving in any and all such capacities on a basis no less favorable than is currently provided to any other director of any member of the Group.

 

(c)                                  The Executive agrees to devote all of his/her working time and efforts to the performance of his/her duties for the Company and to faithfully and diligently serve the Company in accordance with the Agreement and the guidelines, policies and procedures of the Company approved from time to time by the Board.

 

4.                                      NO BREACH OF CONTRACT

 

The Executive hereby represents to the Company that: (i) the execution and delivery of the Agreement by the Executive and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or by which the Executive is otherwise bound, except that the Executive does not make any representation with respect to agreements required to be entered into by and between the Executive and any member of the Group pursuant to the applicable law of the jurisdiction in which the Executive is based, if any; (ii) that the Executive is not in possession of any information (including, without limitation, confidential information and trade secrets) the knowledge of which would prevent the Executive from freely entering into the Agreement and carrying out his/her duties hereunder; and (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement with any person or entity other than any member of the Group.

 

5.                                      LOCATION

 

The Executive will be based in             ,             or any other location as requested by the Company during the Term.

 

6.                                      COMPENSATION AND BENEFITS

 

(a)                                 Cash Compensation.  As compensation for the performance by the Executive of his/her obligations hereunder, during the Term, the Company shall pay the Executive cash compensation (inclusive of the statutory benefit contributions that the Company is required to set aside for the Executive under applicable law) pursuant to Schedule A hereto, subject to annual review and adjustment by the Board or any committee designated by the Board.

 

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(b)                                 Equity Incentives.  During the Term, the Executive shall be eligible to participate, at a level comparable to similarly situated executives of the Company, in such long-term compensation arrangements as may be authorized from time to time by the Board, including any share incentive plan the Company may adopt from time to time in its sole discretion.

 

(c)                                  Benefits.  During the Term, the Executive shall be entitled to participate in all of the employee benefit plans and arrangements made available by the Company to its similarly situated executives, including, but not limited to, any retirement plan, medical insurance plan and travel/holiday policy, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.

 

7.                                      TERMINATION OF THE AGREEMENT

 

The Employment may be terminated as follows:

 

(a)                                 Death.  The Employment shall terminate upon the Executive’s death.

 

(b)                                 Disability.  The Employment shall terminate if the Executive has a disability, including any physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his/her position at the Company, even with reasonable accommodation that does not impose an undue burden on the Company, for more than 180 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period shall apply.

 

(c)                                  Cause.  The Company may terminate the Executive’s employment hereunder for Cause. The occurrence of any of the following, as reasonably determined by the Company, shall be a reason for Cause, provided that, if the Company determines that the circumstances constituting Cause are curable, then such circumstances shall not constitute Cause unless and until the Executive has been  informed by the Company of the existence of Cause and given an opportunity of ten business days to cure, and such Cause remains uncured at the end of such ten-day period:

 

(1)                                 continued failure by the Executive to satisfactorily perform his/her duties;

 

(2)                                 willful misconduct or gross negligence by the Executive in the performance of his/her duties hereunder, including insubordination;

 

(3)                                 the Executive’s conviction or entry of a guilty or nolo contendere plea of any felony or any misdemeanor involving moral turpitude;

 

(4)                                 the Executive’s commission of any act involving dishonesty that results in material financial, reputational or other harm, monetary or otherwise, to any member of the Group, including but not limited to an act constituting misappropriation or embezzlement of

 

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the property of any member of the Group as determined in good faith by the Board; or

 

(5)                                 any material breach by the Executive of this Agreement.

 

(d)                                 Good Reason.  The Executive may terminate his/her employment hereunder for “Good Reason” upon the occurrence, without the written consent of the Executive, of an event constituting a material breach of this Agreement by the Company that has not been fully cured within ten business days after written notice thereof has been given by the Executive to the Company setting forth in sufficient detail the conduct or activities the Executive believes constitute grounds for Good Reason, including but not limited to: the failure by the Company to pay to the Executive any portion of the Executive’s current compensation or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within twenty business days of the date such compensation is due.

 

(e)                                  Without Cause by the Company; Without Good Reason by the Executive.  The Company may terminate the Executive’s employment hereunder at any time without Cause upon 60-day prior written notice to the Executive. The Executive may terminate the Executive’s employment voluntarily for any reason or no reason at any time by giving 60-day prior written notice to the Company.

 

(f)                                   Notice of Termination.  Any termination of the Executive’s employment under the Agreement shall be communicated by written notice of termination (“Notice of Termination”) from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of the Agreement relied upon in effecting the termination.

 

(g)                                  Date of Termination.  The “Date of Termination” shall mean (i) the date specified in the Notice of Termination, or (ii) if the Executive’s employment is terminated by the Executive’s death, the date of his/her death.

 

(h)                                 Compensation upon Termination.

 

(1)                                 Death.  If the Executive’s employment is terminated by reason of the Executive’s death, the Company shall have no further obligations to the Executive under this Agreement and the Executive’s benefits shall be determined under the Company’s retirement, insurance and other benefit and compensation plans or programs then in effect in accordance with the terms of such plans and programs.

 

(2)                                 By Company without Cause or by the Executive for Good Reason.  If the Executive’s employment is terminated by the Company other than for Cause or by the Executive for Good Reason, the Company shall (i) continue to pay and otherwise provide to the Executive, during any notice period, all compensation, base salary and

 

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previously earned but unpaid incentive compensation, if any, and shall continue to allow the Executive to participate in any benefit plans in accordance with the terms of such plans during such notice period; and (ii) pay to the Executive, in lieu of benefits under any severance plan or policy of the Company, any such amount as may be agreed between the Company and the Executive.

 

(3)                                 By Company for Cause or by the Executive other than for Good Reason.  If the Executive’s employment shall be terminated by the Company for Cause or by the Executive other than for Good Reason, the Company shall pay the Executive his/her base salary at the rate in effect at the time Notice of Termination is given through the Date of Termination, and the Company shall have no additional obligations to the Executive under this Agreement.

 

(i)                                     Return of Company Property.  The Executive agrees that following the termination of the Executive’s employment for any reason, or at any time prior to the Executive’s termination upon the request of the Company, he/she shall return all property of the Group that is then in or thereafter comes into his/her possession, including, but not limited to, any Confidential Information (as defined below) or Intellectual Property (as defined below), or any other documents, contracts, agreements, plans, photographs, projections, books, notes, records, electronically stored data and all copies, excerpts or summaries of the foregoing, as well as any automobile or other materials or equipment supplied by the Group to the Executive, if any.

 

(j)                                    Requirement for a Release.  Notwithstanding the foregoing, the Company’s obligations to pay or provide any benefits shall (1) cease as of the date the Executive breaches any of the provisions of Sections 8, 9 and 11 hereof, and (2) be conditioned on the Executive signing the Company’s customary release of claims in favor of the Group and the expiration of any revocation period provided for in such release.

 

8.                                      CONFIDENTIALITY AND NONDISCLOSURE

 

(a)                                 Confidentiality and Non-Disclosure.

 

(1)                                 The Executive acknowledges and agrees that: (A) the Executive holds a position of trust and confidence with the Company and that his/her employment by the Company will require that the Executive have access to and knowledge of valuable and sensitive information, material, and devices relating to the Company and/or its business, activities, products, services, customers and vendors, including, but not limited to, the following, regardless of the form in which the same is accessed, maintained or stored: the identity of the Company’s actual and prospective customers and, as applicable, their representatives; prior, current or future research or

 

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development activities of the Company; the products and services provided or offered by the Company to customers or potential customers and the manner in which such services are performed or to be performed; the product and/or service needs of actual or prospective customers; pricing and cost information; information concerning the development, engineering, design, specifications, acquisition or disposition of products and/or services of the Company; user base personal data, programs, software and source codes, licensing information, personnel information, advertising client information, vendor information, marketing plans and techniques, forecasts, and other trade secrets (“Confidential Information”); and (B) the direct and indirect disclosure of any such Confidential Information would place the Company at a competitive disadvantage and would do damage, monetary or otherwise, to the Company’s business.

 

(2)                                 During the Term and at all times thereafter, the Executive shall not, directly or indirectly, whether individually, as a director, stockholder, owner, partner, employee, consultant, principal or agent of any business, or in any other capacity, publish or make known, disclose, furnish, reproduce, make available, or utilize any of the Confidential Information without the prior express written approval of the Company, other than in the proper performance of the duties contemplated herein, unless and until such Confidential Information is or shall become general public knowledge through no fault of the Executive.

 

(3)                                 In the event that the Executive is required by law to disclose any Confidential Information, the Executive agrees to give the Company prompt advance written notice thereof and to provide the Company with reasonable assistance in obtaining an order to protect the Confidential Information from public disclosure.

 

(4)                                 The failure to mark any Confidential Information as confidential shall not affect its status as Confidential Information under this Agreement.

 

(b)                                 Third Party Information in the Executive’s Possession.  The Executive agrees that he/she shall not, during the Term, (i) improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive has an agreement or duty to keep in confidence information acquired by Executive, if any, or (ii) bring into the premises of Company any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to in writing by such former employer, person or entity. The Executive will indemnify the Company and hold it harmless from and against all claims, liabilities, damages and expenses,

 

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including reasonable attorneys’ fees and costs of litigation, arising out of or in connection with any violation of the foregoing.

 

(c)                                  Third Party Information in the Company’s Possession.  The Executive recognizes that the Company may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third parties, during the Term and thereafter, a duty to hold all such confidential or proprietary information in strict confidence and not to disclose such information to any person or firm, or otherwise use such information, in a manner inconsistent with the limited purposes permitted by the Company’s agreement with such third party.

 

This Section 8 shall survive the termination of the Agreement for any reason. In the event the Executive  breaches this Section 8, the Company shall have right to seek remedies permissible under applicable law.

 

9.                                      INTELLECTUAL PROPERTY

 

(a)                                 Prior Inventions.  The Executive has attached hereto, as Schedule B, a list describing all inventions, ideas, improvements, designs and discoveries, whether or not patentable and whether or not reduced to practice, original works of authorship and trade secrets made or conceived by or belonging to the Executive (whether made solely by the Executive or jointly with others) that (i) were developed by Executive prior to the Executive’s employment by the Company (collectively, “Prior Inventions”), (ii) relate to the Company’ actual or proposed business, products or research and development, and (iii) are not assigned to the Company hereunder; or, if no such list is attached, the Executive represents that there are no such Prior Inventions. Except to the extent set forth in Schedule B, the Executive hereby acknowledges that, if in the course of his/her service for the Company, the Executive incorporates into a Company product, process or machine a Prior Invention owned by the Executive or in which he/she has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide right and license (which may be freely transferred by the Company to any other person or entity) to make, have made, modify, use, sell, sublicense and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

 

(b)                                 Assignment of Intellectual Property.  The Executive hereby assigns to the Company or its designees, without further consideration and free and clear of any lien or encumbrance, the Executive’s entire right, title and interest (within the United States and all foreign jurisdictions) to any and all inventions, discoveries, improvements, developments, works of authorship, concepts, ideas, plans, specifications, software, formulas, databases, designees, processes and contributions to Confidential Information created, conceived, developed or reduced to practice by the Executive (alone or with others) during the Term which

 

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(i) are related to the Company’s current or anticipated business, activities, products, or services, (ii) result from any work performed by Executive for the Company, or (iii) are created, conceived, developed or reduced to practice with the use of Company property, including any and all Intellectual Property Rights (as defined below) therein (“Work Product”). Any Work Product which falls within the definition of “work made for hire”, as such term is defined in the U.S. Copyright Act, shall be considered a “work made for hire”, the copyright in which vests initially and exclusively in the Company. The Executive waives any rights to be attributed as the author of any Work Product and any “droit morale” (moral rights) in Work Product. The Executive agrees to immediately disclose to the Company all Work Product. For purposes of this Agreement, “Intellectual Property” shall mean any patent, copyright, trademark or service mark, trade secret, or any other proprietary rights protection legally available.

 

(c)                                  Patent and Copyright Registration.  The Executive agrees to execute and deliver any instruments or documents and to do all other things reasonably requested by the Company in order to more fully vest the Company with all ownership rights in the Work Product. If any Work Product is deemed by the Company to be patentable or otherwise registrable, the Executive shall assist the Company (at the Company’s expense) in obtaining letters of patent or other applicable registration therein and shall execute all documents and do all things, including testifying (at the Company’s expense) as necessary or appropriate to apply for, prosecute, obtain, or enforce any Intellectual Property right relating to any Work Product. Should the Company be unable to secure the Executive’s signature on any document deemed necessary to accomplish the foregoing, whether due to the Executive’s disability or other reason, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as the Executive’s agent and attorney-in-fact to act for and on the Executive’s behalf and stead to take any of the actions required of Executive under the previous sentence, with the same effect as if executed and delivered by the Executive, such appointment being coupled with an interest.

 

This Section 9 shall survive the termination of the Agreement for any reason. In the event the Executive breaches this Section 9, the Company shall have right to seek remedies permissible under applicable law.

 

10.                               CONFLICTING EMPLOYMENT.

 

The Executive hereby agrees that, during the Term, he/she will not engage in any other employment, occupation, consulting or other business activity related to the business in which the Company is now involved or becomes involved during the Term, nor will the Executive engage in any other activities that conflict with his/her obligations to the Company without the prior written consent of the Company.

 

11.                               NON-COMPETITION AND NON-SOLICITATION

 

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(a)                                 Non-Competition.  In consideration of the compensation provided to the Executive by the Company hereunder, the adequacy of which is hereby acknowledged by the parties hereto, the Executive agree that during the Term and for a period of one year following the termination of the Employment for whatever reason, the Executive shall not engage in Competition (as defined below) with the Group. For purposes of this Agreement, “Competition” by the Executive shall mean the Executive’s engaging in, or otherwise directly or indirectly being employed by or acting as a consultant or lender to, or being a director, officer, employee, principal, agent, stockholder, member, owner or partner of, or permitting the Executive’s name to be used in connection with the activities of, any other business or organization which competes, directly or indirectly, with the Group in the Business; provided, however, it shall not be a violation of this Section 11(a) for the Executive to become the registered or beneficial owner of up to five percent (5%) of any class of the capital stock of a publicly traded corporation in Competition with the Group, provided that the Executive does not otherwise participate in the business of such corporation.

 

For purposes of this Agreement, “Business” means express delivery services, transportation and courier services, and any other business which the Group engages in, or is preparing to become engaged in, during the Term.

 

(b)                                 Non-Solicitation; Non-Interference.  During the Term and for a period of one year following the termination of the Executive’s employment for any reason, the Executive agrees that he/she will not, directly or indirectly, for the Executive’s benefit or for the benefit of any other person or entity, do any of the following:

 

(1)                                 approach the suppliers, clients, direct or end customers or contacts or other persons or entities introduced to the Executive in his/her capacity as a representative of the Group for the purpose of doing business of the same or of a similar nature to the Business or doing business that will harm the business relationships of the Group with the foregoing persons or entities;

 

(2)                                 assume employment with or provide services to any competitors of the Group, or engage, whether as principal, partner, licensor or otherwise, any of the Group’s competitors, without the Group’s express consent; or

 

(3)                                 seek, directly or indirectly, to solicit the services of, or hire or engage, any person who is known to be employed or engaged by the Group; or

 

(4)                                 otherwise interfere with the business or accounts of the Group.

 

(c)                                  Injunctive Relief; Indemnity of Company.  The Executive agrees that any breach or threatened breach of subsections (a) and (b) of this Section 11 would result in irreparable injury and damage to the Company for which an award of money to

 

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the Company would not be an adequate remedy. The Executive therefore also agrees that in the event of said breach or any reasonable threat of breach, the Company shall be entitled to seek an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all persons and/or entities acting for and/or with the Executive. The terms of this paragraph shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including, but not limited to, remedies available under this Agreement and the recovery of damages. The Executive and the Company further agree that the provisions of this Section 11 are reasonable. The Executive agrees to indemnify and hold harmless the Company from and against all reasonable expenses (including reasonable fees and disbursements of counsel) which may be incurred by the Company in connection with, or arising out of, any violation of this Agreement by the Executive. This Section 11 shall survive the termination of the Agreement for any reason.

 

12.                               WITHHOLDING TAXES

 

Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to the Agreement such national, state, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

13.                               ASSIGNMENT

 

The Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer the Agreement or any rights or obligations hereunder; provided, however, that the Company may assign or transfer the Agreement or any rights or obligations hereunder to any member of the Group without such consent. If the Executive should die while any amounts would still be payable to the Executive hereunder if the Executive had continued to live, all such amounts unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate. The Company will require any and all successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Company had terminated the Executive’s employment other than for Cause, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Section, “Company” shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which executes and delivers the

 

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agreement provided for in this Section 13 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

 

14.                               SEVERABILITY

 

If any provision of the Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of the Agreement are declared to be severable.

 

15.                               ENTIRE AGREEMENT

 

The Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter. The Executive acknowledges that he/she has not entered into the Agreement in reliance upon any representation, warranty or undertaking which is not set forth in the Agreement.

 

16.                               GOVERNING LAW

 

The Agreement shall be governed by and construed in accordance with the law of the State of New York.

 

17.                               AMENDMENT

 

The Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to the Agreement, which agreement is executed by both of the parties hereto.

 

18.                               WAIVER

 

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under the Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

19.                               NOTICES

 

All notices, requests, demands and other communications required or permitted under the Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party; or (iv) sent by e-mail with confirmation of receipt.

 

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20.                               COUNTERPARTS

 

The Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. The Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

 

21.                               NO INTERPRETATION AGAINST DRAFTER

 

Each party recognizes that the Agreement is a legally binding contract and acknowledges that such party has had the opportunity to consult with legal counsel of choice. In any construction of the terms of the Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.

 

[Remainder of the page intentionally left blank.]

 

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IN WITNESS WHEREOF, the Agreement has been executed as of the date first written above.

 

	
COMPANY:
    	
ZTO Express (Cayman) Inc.
    
	
 
    	
a Cayman Islands exempted company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
EXECUTIVE:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Address:
    

 

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SCHEDULE A

 

Cash Compensation

 

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SCHEDULE B

 

Prior Inventions

 

15Exhibit 10.4

 

Executed Version

 

ZTO EXPRESS CO., LTD.

 

and

 

SHANGHAI ZHONGTONGJI NETWORK TECHNOLOGY CO., LTD.

 

 

EXCLUSIVE CONSULTING AND SERVICES AGREEMENT

 

 

August 18, 2015

 

 

EXCLUSIVE CONSULTING AND SERVICES AGREEMENT

 

This Exclusive Consulting and Services Agreement (the “Agreement”) is entered into on August 18, 2015 by and between:

 

(1)                                 SHANGHAI ZHONGTONGJI NETWORK TECHNOLOGY CO., LTD., a limited liability company registered under the laws of the PRC with registered address at Block 5, 1685 Hua Zhi Road, Qingpu District, Shanghai and Meisong Lai as its legal representative (“Party A”); and

 

(2)                                 ZTO EXPRESS CO., LTD., a limited liability company registered under the laws of the PRC with registered address at Block 1, 1685 Hua Zhi Road, Qingpu District, Shanghai and Meisong Lai as its legal representative (“Party B”)

 

(each a “Party”, collectively the “Parties”)

 

WHEREAS

 

1.                                      The principal business of Party A is to conduct development of computer network technology; software integration of computer network systems; transfer of self-owned technology; design and production of computer software; sale of self-produced products; and to provide relevant technical consulting and services; wholesale, commission agency (excluding auction), import and export of the products of the same category as the foregoing and relevant accessory equipment and providing relevant accessory services; enterprise management consulting, business information consulting (excluding financial information) (business activities relating to items subject to approvals according to the law shall be conducted after approved by relevant authority).

 

2.                                      The principal business of Party B include domestic express services, international express services (excluding those specialized business of postal enterprises); marine, air, road international freight transport agency; warehousing services; moving, loading and downloading services; domestic freight transport agency; enterprise image planning; marketing planning; PR activities planning; enterprise management consulting; business information consulting; supply chain management; mechanic equipment leasing; sale of mechanic equipment, mechanical and electrical products, electronic products, communication appliances, garments, footwear and headwear, office equipment and articles.

 

3.                                      Party B wishes to engage Party A to provide technical support and consulting services.

 

THEREFORE, the Parties hereby reach the following agreement upon mutual 

 

 

friendly consultations:

Article 1    Definition

 

1.1                               Except as otherwise defined in the terms or context hereof, the following terms in this Agreement shall have the following meanings:

 

	
“Party B’s Business”
    	
means any and all businesses engaged   in and developed by Party B currently and at any time during the valid term   hereof.
    
	
 
    	
 
    
	
“Services”
    	
means the services to be provided by Party A to Party B, which are   related to Party B’s Business, including but not   limited to:
    
	
 
    	
 
    
	
 
    	
(1)
    	
provision of   professional consulting services relating to Party B’s business;
    
	
 
    	
 
    	
 
    
	
 
    	
(2)
    	
provision of   training for Party B’s personnel;
    
	
 
    	
 
    	
 
    
	
 
    	
(3)
    	
provision of   market research, planning and development services;
    
	
 
    	
 
    	
 
    
	
 
    	
(4)
    	
provision of   business planning and business strategies (advisory suggestions); and
    
	
 
    	
 
    	
 
    
	
 
    	
(5)
    	
provision of   client support and development services (advisory suggestions).
    
	
 
    	
 
    	
 
    
	
“Service Team”
    	
means the team of personnel established by Party A for the purpose of   provision of Services to Party B pursuant to this Agreement, including the   employees of Party A, independent professional advisors and other   contractors.
    
	
 
    	
 
    
	
“Service Fees”
    	
means all fees payable by Party B to Party A pursuant to Article 3   of this Agreement in respect of the Services provided by Party A.
    
	
 
    	
 
    
	
“Operating Revenue”
    	
means in any single fiscal year during the term of this Agreement, the   total revenue generated by Party B in its daily operation of business of that   year as recorded under the “Revenue of Primary Business” in the audited balance   sheet prepared in accordance with the PRC accounting standards.
    
	
 
    	
 
    
	
“Annual Business Plan”
    	
means the development plan and budget report for Party B’s Business in   the next calendar year which is prepared by Party B with the assistance of   Party
    

 

 

	
 
    	
A pursuant to this Agreement before November 30  of each year.
    
	
 
    	
 
    
	
“Equipment”
    	
shall mean any and all equipment owned by Party A or purchased by Party   A from time to time, which are to be used for the purpose of provision of the   Services.
    

 

1.2                               The references to any laws and regulations (the “Laws”) herein shall be deemed to include (1) the references to the amendments, changes, supplements and reenactments of such Laws, irrespective of whether they take effect before or after the execution of this Agreement; and (2) the references to other decisions, notices or regulations enacted in accordance therewith or effective as a result thereof.

 

1.3                               Except as otherwise stated in the context herein, all references to an article, clause, item or paragraph shall refer to the relevant article, clause, item or paragraph of this Agreement.

 

Article 2    Services of Party A

 

2.1                               In order to better operate its business, Party B whishes to engage Party A to provide the Services to it, and Party A agrees to provide such Services to Party B. Therefore, Party B appoints Party A as its exclusive consulting and services provider to provide Party B with the Services defined herein, and Party A agrees to accept such engagement.

 

2.2                               Party A shall provide the Services to Party B in accordance with the terms of this Agreement, and Party B shall use its best efforts to facilitate Party A to provide the Services.

 

2.3                               Party A shall be equipped with various kinds of Equipment and Service Team reasonably necessary for its provision of Services and purchase, acquire new Equipment and personnel according to Party B’s Annual Business Plan and Party B’s reasonable requirements to satisfy the needs of Party A in order to provide Party B with high-quality services in accordance with this Agreement. However, from time to time, Party A may replace any member of the Service Team or change the work duties and responsibilities of any member of the Service Team at its sole discretion, provided that such replacement or change of work duties and responsibilities shall not materially adversely affect the day-to-day business operations of Party B.

 

2.4                               Notwithstanding the other provisions in this Agreement, Party A is entitled to appoint any third party to provide any or all Services hereunder or to perform

 

 

any of its obligations hereunder on its behalf. Party B hereby agrees that Party A  is entitled to assign its rights and obligations hereunder to any third party.

 

Article 3    Service Fees

 

3.1                               With respect to the Services to be provided by Party A pursuant to this Agreement, Party A and Party B estimate that within fifty (50) years Party B will pay to Party A the Service Fees of RMB 10 billion. Notwithstanding the foregoing, Party A and Party B will separately negotiate to determine the amount of annual service fees payable by Party B to Party A after the end of each calendar year throughout the term of this Agreement.

 

3.2                               Party B shall within three months of the end of each calendar year pay the Service Fees determined under Article 3.1 hereof into a bank account designated by Party A on a lump-sum basis. In case that Party A changes its bank account, it shall notify Party B in writing of such change seven (7) working days in advance.

 

3.3                               The Parties agree that, in principle, the payment of said Service Fees shall not cause any difficulty to the operation of either Party of that year. For the aforesaid purposes, Party A may agree to the deferred payment of Service Fees by Party B, or upon the mutual agreement by the Parties through negotiation, Party A may adjust in writing the percentage of calculation and/or the specific amount of Service Fees payable by Party B to Party A specified in Article 3.1 above.

 

Article 4    Obligations of Party B

 

4.1                               The Services provided by Party A under this Agreement shall be exclusive. During the term of this Agreement, without prior written consent of Party A, Party B may not enter into any agreement with any third party or otherwise engage such third party to provide services the same as or similar to those provided by Party A hereunder.

 

4.2                               Party B shall provide Party A with the finalized Annual Business Plan of Party B of the next year before November 30 of each year, in order to facilitate Party A to arrange plans of Services, purchase necessary software and Equipment and secure necessary personnel and technical service force accordingly. In case Party B needs Party A to purchase certain new Equipment or have additional personnel, it shall consult with Party A fifteen (15) days in advance in order to reach mutual agreement between the Parties.

 

4.3                               In order to facilitate provision of the Services by Party A, Party B shall provide

 

 

Party A with relevant materials required by Party A in an accurate and timely  manner.

 

4.4                               Party B shall pay Service Fees to Party A on time and in full amount in accordance with Article 3 hereof.

 

4.5                               Party B shall maintain its good standing and presence, actively develop its business and make effort to maximize the returns.

 

4.6                               The Parties hereby acknowledge that, pursuant to the terms and conditions of the Equity Interest Pledge Agreement entered into by all of the registered shareholders of Party B as of the date of this Agreement (the “Existing Shareholders”) with Party A, each of the Existing Shareholders has pledged all of the equity interests in Party B held by it to Party A as security for Party B’s performance of its obligations under this Agreement and all of the ancillary agreements.

 

4.7                               During the term of this Agreement, Party B agrees to cooperate with Party A and Party A’s direct or indirect parent company in the audit of related party transactions and other audits, to provide related information and materials about Party B’s business, operation, customers, finance and employees to Party A, its parent company or its authorized auditor, and agrees that Party A’s parent company may disclose such related information and materials for purpose of satisfying the regulatory requirements of the stock exchange on which Party A’s parent company is listed.

 

Article 5    Intellectual Property

 

5.1                               To the extent permitted by the then effective applicable PRC Laws, intellectual property on the work products created in the course of Party A’s provision of Services and the intellectual property on the work product developed by Party B on the basis of Party A’s intellectual property shall belong to Party A. Such intellectual property includes, but not limited to, copyright, patent, know-how, trade secret and other intellectual property. In case the applicable PRC Laws expressly prohibits such intellectual property from being owned by Party A, Party B shall hold such intellectual property for the benefit of Party A, and shall immediately transfer such intellectual property to Party A at the lowest price permitted by law to Party B once Party B’s ownership of intellectual property is no longer prohibited by PRC Laws; if there is no requirement on the lowest price for such transfer, Party B shall transfer such intellectual property to Party A free of consideration and use its best effort to assist Party A in completing all the filing and registration procedure as required by the relevant government authorities in respect of such transfer.

 

 

5.2                               For the purpose of performing this Agreement, Party B may use the work products created by Party A in the course of provision of Services, subject to the terms and conditions of this Agreement. However, under no circumstances shall this Agreement grant or be deemed to have granted Party B any license or right to use such work product for any other purpose.

 

5.3                               Each Party warrants to the other Party that it will indemnify the other Party against any and all economic losses incurred by the other Party arising from its infringement of any other person’s intellectual property rights (including copyright, trademark, patent and know-how).

 

Article 6    Confidentiality Obligations

 

6.1                               Within the term of this Agreement, all customer information (the “Customer Information”) and other related materials in connection with Party B’s Business and Services provided by Party A shall be owned by Party A.

 

6.2                               Notwithstanding the termination of this Agreement, the Parties shall be obliged to keep in strict confidence the trade secrets and proprietary information of the other Party acquired during the performance of this Agreement, the Customer Information jointly owned by both Parties and any non-public information of the other Party (collectively, the “Confidential Information”). The receiving party of the Confidential Information (the “Receiving Party”) shall not disclose the Confidential Information or any part thereof to any third parties unless it obtains prior written consent of the other Party, or required by relevant laws and regulations or requirements of relevant stock exchange. The Receiving Party may not use, directly or indirectly, such Confidential Information or any part thereof for purposes other than performing its obligations under this Agreement.

 

6.3                               The following information shall not constitute Confidential Information:

 

(a)         any information which, as shown by written evidence, has previously been known to the Receiving Party;

 

(b)         any information which enters the public domain not due to the fault of the Receiving Party or is known by the public for other reasons; or

 

(c)          any information lawfully acquired by the Receiving Party from another source subsequent to the receipt of relevant information.

 

6.4                               The Receiving Party may disclose the Confidential Information to its relevant employees, agents or professionals it retains, but shall secure that the above persons should be bound by this Agreement, keep the Confidential Information confidential, and use such Confidential Information solely for the purpose of

 

 

performing this Agreement.

 

6.5                               Upon termination of this Agreement, the Receiving Party of the Confidential Information shall return any and all documents, information or software containing any such Confidential Information to the original owner or provider of such Confidential Information; or with prior consent of the original owner or provider, destroy and delete all of such Confidential Information from any electronic device, and cease to use it in all circumstances.

 

6.6                               The Parties agree that this Article shall survive the amendment, expiration or termination of this Agreement.

 

Article 7    Representations and Warranties

 

7.1                               Party A hereby represents and warrants as follows:

 

7.1.1                     it is a limited liability company duly registered and validly existing under the laws of its incorporation place with independent legal person status, and has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act as an independent party in any lawsuits;

 

7.1.2                     it has full corporate power and authority to execute and deliver this Agreement and all the other documents related to the transaction contemplated hereunder which are to be executed by it, and has full power and authority to consummate the transaction hereunder. This Agreement shall be lawfully and duly executed and delivered by it and shall constitute its legal, valid and binding obligations, enforceable against it pursuant to the terms hereof.

 

7.2                               Party B hereby represents and warrants as follows:

 

7.2.1                     it is a limited liability company duly registered and validly existing under the laws of its incorporation place with independent legal person status, and has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act as an independent party in any lawsuits;

 

7.2.2                     it has full corporate power and authority to execute and deliver this Agreement and all the other documents related to the transaction contemplated hereunder which are to be executed by it, and it has full power and authority to consummate the transaction contemplated hereunder.  This Agreement shall be lawfully and duly executed and delivered by it and shall constitute its legal, valid and binding 

 

 

obligations, enforceable against it pursuant to the terms hereof;

 

7.2.3                     as of the effectiveness of this Agreement, it has obtained complete operating permits necessary for its operations, and has full right and qualification to conduct Party B’s Business as is currently conducted within the PRC;

 

7.2.4                     it shall notify Party A in a timely manner any litigation and other adverse situations it is involved in that has or may have material adverse effect on Party B’s Business and its operations, and make its best efforts to prevent further losses therefrom;

 

7.2.5                     without written consent of Party A, Party B shall not dispose of its material assets in any form nor change its current shareholding structure;

 

7.2.6                     it shall not enter into or consummate any transaction that may have material impact on the assets, obligations, business operation, shareholding structure of Party B, any equity interests in any third party and any other legitimate right held by Party B (except for those transactions incurred in the ordinary course of business or those transactions which have been disclosed to and approved in writing by Party A).

 

7.2.7                     it waives any right to require the amendment and cancellation of any provision of this Agreement on the ground of material misunderstanding or unconscionability, whether with respect to the percentage and amount of the Service Fees provided hereunder, or the quantity and quality of any service provided by Party A, or with respect to the stipulation prohibiting Party B to engage a third party to provide the same services as, or other services similar to, those provided by Party A, or any other stipulation hereof.

 

Article 8    Term of Agreement

 

8.1                               The Parties hereby acknowledge that this Agreement shall become effective upon duly execution by the Parties hereto, and shall remain valid until it is terminated by written agreement of the Parties hereto or by the opeartaion of applicable PRC Laws and regulations.

 

8.2                               Each Party shall complete the approval and registration formalities for extension of its business term three (3) months before the expiry of its term of business such that the validity of this Agreement shall be maintained.

 

8.3                               Following the termination of this Agreement, the Parties shall continue to settle 

 

 

the Service Fees already incurred pursuant to Article 3 hereof, and continue to  comply with its obligations under Article 6 hereof.

 

Article 9    Notice

 

9.1                               Any notice, request, demand and other correspondences required by or made in accordance with this Agreement shall be in writing and delivered to the relevant Party.

 

9.2                               The aforesaid notice or other correspondences shall be deemed to have been delivered upon delivery when it is transmitted by facsimile; or upon handed over to the receiver when it is delivered in person; or on the fifth (5) day after posting if delivered by mail.

 

Article 10    Default Liabilities

 

10.1                        The Parties agree and confirm that, if any Party (the “Defaulting Party”) breaches substantially any of the agreements or substantially fails to perform any of the obligations hereunder, such a breach or failure shall constitute a default hereunder (the “Default”), and the non-defaulting Party shall be entitled to demand the Defaulting Party to rectify such Default or take remedial measures within a reasonable period of time. If the Defaulting Party fails to rectify such Default or take remedial measures within such reasonable period of time or within ten (10) days upon receipt of the written notice from the non-defaulting party, the non-defaulting party shall be entitled to decide to, at its discretion:

 

10.1.1              provided that if the Defaulting Party is Party B, Party A shall be entitled to terminate this Agreement and require the Defaulting Party to indemnify all the damages; or

 

10.1.2              provided that if the Defaulting Party is Party A, Party B shall be entitled to require the Defaulting Party to indemnify all the damages. However, unless otherwise provided by the laws, under no circumstances shall Party B be entitled to terminate or rescind this Agreement.

 

10.2                        Notwithstanding any other provisions herein, this Article 10 shall survive the suspension or termination of this Agreement.

 

Article 11    Force Majeure

 

11.1                        In the event of earthquake, typhoon, flood, fire, war, change of policies or laws,

 

 

and other unforeseeable or unpreventable or unavoidable event of force  majeure, which directly prevents a Party from performing this Agreement pursuant to the agreed conditions, the Party affected by such a force majeure event shall forthwith issue a notice by facsimile and, within thirty (30) days, present the documents evidencing the details of such force majeure event and the reasons for failure of or delay in its performance, and such documents shall be issued by the notary institution of the area where such force majeure event takes place. The Party affected by such a force majeure event shall take appropriate measures to mitigate or eliminate the effects resulting from such event and shall make its efforts to reassume the obligations the performance of which have been delayed or impeded by such force majeure event. The Parties shall consult each other and decide whether this Agreement shall be waived in part or postponed in its performance with regard to the extent of impact of such force majeure event on the performance of this Agreement. No Party shall be liable for the economic losses suffered by the other Party resulting from the force majeure event.

 

Article 12    Miscellaneous Provisions

 

12.1                        This Agreement is made in Chinese in three (3) originals with each Party holding one (1) original and Beijng Wudao Technology Investment Management Co., Ltd. holding one (1) original.

 

12.2                        The formation, effectiveness, performance, amendment, interpretation and termination of this Agreement shall be governed by the PRC Laws.

 

12.3                        Any disputes arising hereunder and in connection herewith shall be settled through consultations between the Parties, and if the Parties cannot reach an agreement regarding such disputes within thirty (30) days of their occurrence, such disputes shall be submitted to Shanghai International Economic and Trade Arbitration Commission for arbitration in accordance with the arbitration rules thereof. The place of arbitration shall be in Shanghai, the language to be used in arbitration is Chinese and the arbitration award shall be final and equally binding on the Parties.

 

12.4                        Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and the exercise of its rights, powers and remedies by a Party shall not preclude its exercise of its other rights, powers and remedies by such Party.

 

12.5                        No failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with law (the “Rights”) shall be construed as a waiver of such Rights, and the waiver of any single or partial exercise of the Rights shall not preclude its exercising of such Rights in any other way and other Rights.

 

 

12.6                        The headings of the Articles herein are for reference only, and in no circumstances shall such headings be used in or affect the interpretation of the provisions hereof.

 

12.7                        This Agreement, upon its execution, supersedes any other agreements, orally or written, between the Parties in respect of the same subject hereof, and constitutes the complete agreement between the Parties.

 

12.8                        Each provision contained herein shall be severable and independent from other provisions, and if at any time one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected as a result thereof.

 

12.9                        Any amendments or supplements to this Agreement shall be made in writing and shall take effect upon due execution by the Parties hereto.

 

12.10                 Party B shall not assign any of its rights and/or obligations hereunder to any third parties without the prior written consent of Party A. Party A shall be entitled to assign any of its rights and/or obligations hereunder to any third party upon issuance of notice of such assignment to Party B and to the extent as permitted by PRC Laws.

 

12.11                 This Agreement shall be binding on the legal successors and assigns of the Parties.

 

12.12                 The Parties undertake that they shall make their respective tax declaration and payment pursuant to Law in connection with the transaction hereunder.

 

12.13                 Party A, Party B and all of Party B’s shareholders have separately entered into two ancillary agreement to this Agreement on the date hereof, namely the Exclusive Call Option Agreement and Shareholders’ Voting Rights Agreement, both of which have become effective as of the date of execution.

 

[The following is intentionally left blank]

 

 

[This page is the signature page of the Exclusive Consulting and Services Agreement and contains no body text]

 

IN WITNESS HEREOF, the Parties have caused this Exclusive Consulting and Services Agreement to be executed on the date first above written.

 

SHANGHAI ZHONGTONGJI NETWORK TECHNOLOGY CO., LTD.

 

(Company seal: /s/ Shanghai Zhongtongji Network Technology Co., Ltd.)

 

	
By:
    	
/s/ Meisong Lai
    	
 
    
	
Name: Meisong Lai
    	
 
    
	
Title: Legal Representative
    	
 
    

 

 

ZTO EXPRESS CO., LTD.

 

(Company seal: /s/ ZTO Express Co., Ltd.)

 

	
By:
    	
/s/ Meisong Lai
    	
 
    
	
Name: Meisong Lai
    	
 
    
	
Title: Legal Representative

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