Document:

Exhibit 10.1

 

EXECUTION VERSION

 

EXECUTIVE SEVERANCE AND RELEASE AGREEMENT

 

This Executive Severance and Release Agreement (the “Agreement”) is entered into by and among Atlantic Power Holdings, Inc. (“Atlantic Holdings” or the “Company”), Atlantic Power Corporation (“Atlantic Power”), and Edward C. Hall (the “Executive”) (collectively, the “Parties”).

 

WHEREAS, Atlantic Holdings, a Delaware corporation, is a wholly-owned subsidiary of Atlantic Power, a corporation continued under the laws of the Province of British Columbia, Canada;

 

WHEREAS, the Executive has been employed as the Executive Vice President — Chief Operating Officer of Atlantic Power and Vice President of the Company;

 

WHEREAS, the Parties entered into an Executive Employment Agreement effective as of April 15, 2013, as amended by the Addendum to Executive Employment Agreement effective August 30, 2013 (together, the “Employment Agreement”);

 

WHEREAS, on February 3, 2015 (the “Separation Date”), the Parties mutually agreed that the Executive would step down as Executive Vice President — Chief Operating Officer of Atlantic Power and Vice President of the Company, as of the Separation Date, and Executive is hereby resigning from any and all other officer and director positions with the Company and any affiliate, including Atlantic Power;

 

WHEREAS, in the interest of an amicable departure and in recognition of the Executive’s substantial services and contributions to the Company, the Company shall treat the Executive’s separation from employment as an event entitling Executive to the severance benefits set forth in Section 7(a)(A-E) of the Employment Agreement (the “Section 7(a) severance benefits”), subject to the terms and conditions therein and herein; and

 

WHEREAS, in exchange for, among other things, the Executive entering into and complying with this Agreement, the Company shall provide the Executive with the Section 7(a) severance benefits as well as certain additional severance benefits described in this Agreement.

 

NOW, THEREFORE, in consideration of the promises and conditions set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

 

1.              Separation from Employment, Director and Officer Positions of the Company and its Affiliates.  The Executive’s separation from employment with the Company and Atlantic Power was effective as of the Separation Date and the Executive ceased all duties and responsibilities in respect of such employment, except as referenced in this Agreement, with the Company and any Company affiliate as of such date.  As of the Effective Date (as defined below), the Executive also hereby resigns from any and all other officer and all director positions with the Company or any Company affiliate, including Atlantic Power, and will cease all related duties and responsibilities, except as referenced in this Agreement, with the Company and any Company affiliate.  The Executive hereby irrevocably appoints the Company to be his attorney-in-fact to execute any documents and do anything in his name to effect the Executive’s ceasing to serve as an officer or director of the Company and any affiliate, including Atlantic Power, should he fail to promptly submit his resignation on the Effective Date or execute any documents requested by the Company or any Company affiliate to effectuate the Executive’s resignation from any and all officer and director positions.  A written notification signed by a director or duly authorized officer of the Company or Atlantic Power that any instrument, document or act falls within the authority conferred by this subsection will be conclusive evidence that it does so.  The Company will prepare any documents, pay any filing fees, and bear any other expenses related to this section.

 

2.              Severance Benefits.  Provided the Executive executes this Agreement by February 13, 2015 and complies with the terms and conditions herein, the Company will provide him with the following severance benefits (the “Severance Benefits”):

 

a.              The Section 7(a) severance benefits paid at the time and in the manner set forth in the Employment Agreement, with the Effective Date treated as the Executive’s date of termination for purposes of the Section 7(a) severance benefits.  The Parties hereby agree

 

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that the amount due under Section 7(a)(B) of the Employment Agreement shall be $1,284,333;

 

b.              An additional cash payment of $106,250 (an amount equivalent to three (3) months of the Executive’s last current base salary), less all applicable taxes and withholdings paid to the Executive on the thirtieth (30th) day following the Effective Date;

 

c.               Employee benefits, as set forth in Section 7(a)(C) of the Employment Agreement, for an additional three (3) months beyond the period set forth in Section 7(a)(C) of the Employment Agreement and incorporated herein at Section 2(a), provided, however, that if for any reason any such benefits or their equivalent cannot be provided through the Company’s group or other plans, the Company shall reimburse the Executive for the reasonable cost of obtaining equivalent benefits within fifteen (15) days of the Executive’s submission of documentation establishing such cost; and

 

d.              An additional cash payment of $375,000 (an amount equivalent to the 2014 performance year LTIP award), less all applicable taxes and withholdings paid to the Executive on the thirtieth (30th) day following the Effective Date.

 

e.               The Company will reimburse Executive for legal fees he expends in connection with this Agreement in an amount up to $5,000.

 

The payment and provision of the Severance Benefits shall be subject to the terms and conditions of Section 11 of the Employment Agreement.

 

3.              Release by Executive.

 

a.              In consideration of the Severance Benefits, the Executive hereby releases, remises, discharges, and acquits Atlantic Power and all of its subsidiaries, affiliates (including the

 

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Company), successors, and assigns, and their respective past, present, and future officers, directors, shareholders, members, partners, agents, employees, and attorneys (collectively, the “Released Parties”), jointly and severally, of and from any and all claims, charges, demands, causes of action, obligations, damages, or liabilities or claims under any contract (including the Employment Agreement except as expressly provided herein), known or unknown (the “Executive Claims”), which the Executive or the Executive’s heirs, successors or assigns have, ever had, or may now have against any of the Released Parties, arising from, connected with, or related to any event that has happened, developed, or occurred, or any state of facts existing, up to and including the date of the Executive’s execution of this Agreement.  Without limiting the generality of the foregoing, the Executive specifically releases the Released Parties from all Executive Claims that could have been asserted as a result of Executive’s employment with the Company, separation from employment, or other status with Atlantic Power or the Company, including but not limited to Executive Claims conferred by or arising under any federal, state, local, and/or municipal law, including but not limited to the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Title VII of the United States Civil Rights Act of 1964, 42 U.S.C. § 1981, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act, the Massachusetts Fair Employment Practices Act (“MFEPA”), the Massachusetts Equal Rights Law, and the Massachusetts Wage Act, M.G.L.c. 149, §§148 and 150 (including Executive Claims for compensation, salary, wages, bonuses, commission, multiple damages, or attorneys’ fees) and Executive Claims for any form of relief, no matter how denominated, including any claims for injunctive relief, additional compensation, wages, or benefits (including front pay and back pay), compensatory or consequential damages, liquidated or punitive damages, attorneys’ fees, employment, re-employment, or future employment in any capacity, provided, however, that this Agreement shall not act to release, and shall not apply to (1)

 

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all continuing obligations of Atlantic Power or its affiliates, including the Company, under Section 2 of this Agreement, (2) all rights in the nature of indemnification and rights to continued coverage under directors’ and officers’ insurance policies (including tail policies) which the Executive may have with respect to claims against the Executive relating to or arising out of his employment with Atlantic Power or its affiliates (including the Company), including rights under Section 5 of the Employment Agreement (entitled “Indemnification”) and any Indemnity Agreement between Atlantic Power and the Company and the Executive, all of which survive the Executive’s termination of employment; (3) any vested benefit to which the Executive is entitled under any tax qualified pension plan of Atlantic Power or its affiliates, including the Company; or (4) COBRA continuation coverage benefits or any other similar benefits required to be provided by statute or the Employment Agreement.

 

b.              The Executive agrees that he will not file or permit to be filed on the Executive’s behalf any Executive Claim against any of the Released Parties involving any matter occurring up to and including the date of the Executive’s execution of this Agreement, except with respect to those obligations, rights, and benefits that are excepted and excluded from the scope of the foregoing release.  Notwithstanding any other provision of this Agreement, this Agreement is not intended to interfere with the Executive’s right to file a charge with the Equal Employment Opportunity Commission or any state human rights commission in connection with any claim he believes he may have against Atlantic Power or its affiliates (including the Company), or to bar or prohibit contact with or participation in any proceeding before a federal or state administrative agency, provided however, that by executing this Agreement, the Executive hereby waives the right to recover monetary damages or personal relief with respect to any such charge or proceeding.

 

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4.              Release by the Company and Atlantic Power.  The Company, Atlantic Power and their affiliates hereby release, remise, discharge, and acquit the Executive of and from any and all claims, charges, demands, causes of action, obligations, damages, or liabilities or claims under any contract (including the Employment Agreement, except as expressly provided herein), known or unknown (the “Company and Atlantic Power Claims”), which the Company, Atlantic Power or their affiliates have, ever had, or may now have against the Executive arising from, connected with, or related to any event that has happened, developed, or occurred, or any state of facts existing, up to and including the date of the Company and Atlantic Power’s execution of this Agreement.   This release includes, without implication of limitation, the complete waiver and release of all Company and Atlantic Power Claims arising in connection with Executive’s employment with and/or service as an officer and/or director of the Company and Atlantic Power and their affiliates, or Executive’s separation from employment with and/or service as an officer and/or director of the Company and Atlantic Power and their affiliates; provided, however, that notwithstanding the foregoing, the Company, Atlantic Power and their affiliates do not release Executive from any Company and Atlantic Power Claims based on any acts and/or omissions that satisfy the elements of a criminal offense or claims arising out of any intentional misconduct by Executive that resulted in injury to the Company, Atlantic Power or their affiliates (provided that the Company and Atlantic Power hereby represent that they know of no such Company and Atlantic Power Claims), nor do the Company or Atlantic Power release Executive with respect to the recoupment rights set forth in Section 19 of the Employment Agreement.

 

5.              Continuing Obligations.  The Executive acknowledges and reaffirms each of the following obligations: (a) his confidentiality obligations under Section 8 of the Employment Agreement, which remain in full force and effect; (b) his non-solicitation obligations under Section 9(b) of the Employment Agreement; and (c) his recoupment obligations under Section 19 of the Employment Agreement.  The Parties agree that the Executive’s obligations under Section 9(a) of the

 

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Employment Agreement shall not be applicable and that instead (i) for six (6) months following the Separation Date, Executive shall not divert or otherwise appropriate, directly or indirectly, alone or with others, any project acquisition, development and/or construction opportunities that the Company considered within the nine (9) month period immediately preceding the Separation Date and (ii) Executive shall not be employed by any public or private company that, within six (6) months of the Separation Date, undertakes any transaction which would constitute a “change in control” as defined in paragraph 6(b) of the Employment Agreement with respect to Atlantic Power or Atlantic Holdings.

 

6.              Return of Company Property.  The Executive agrees to return to the Company or the applicable Company affiliate, all keys, files, records (and copies thereof), equipment (including, but not limited to, computer hardware, software and printers, wireless handheld devices, USB storage devices, cellular phones, tablets, etc.), Company or Company affiliate identification, Company or Company affiliate vehicles and any other Company-owned or Company affiliate-owned property in Executive’s possession or control and to leave intact all electronic Company and Company affiliate documents, including but not limited to, those that Executive developed or helped to develop during his employment and/or his role as an officer or director of the Company or any Company affiliate; provided, however, that the Executive may keep any computer, wireless handheld device, cellular telephone or tablet provided by the Company so long as the Executive provides such computer, device, telephone or tablet to the Company within one month of the Effective Date to enable the Company to delete any and all information related to the Company and its affiliates from such item.  The Executive further agrees to cancel within 30 days of the Effective Date, all accounts for his benefit, if any, in the Company’s or any Company affiliate’s name, including but not limited to, credit cards, telephone charge cards, cellular phone, wireless data or internet accounts, and/or and computer accounts; provided that the Executive shall promptly reimburse the Company for any personal use of Company credit cards, telephone charge

 

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cards or other accounts following the Separation Date.

 

7.              Final Compensation; Expense Reimbursement.  On the Company’s next regular payroll date following the Separation Date, the Company shall pay Executive his accrued but unpaid base salary and any accrued but unused vacation based on Executive’s employment through the Separation Date.  The Executive shall be entitled to be reimbursed for his reasonable business expenses incurred prior to the Separation Date in connection with his employment, subject to the Company’s policies and procedures with respect to expense reimbursement, and provided that Executive submits documentation for any open expenses within thirty (30) days of the Separation Date.  Consistent with Company policy, any outstanding expenses will be reimbursed to Executive by the next payroll date after submission.

 

8.              Non-Disparagement.  The Executive understands and agrees that, to the extent permitted by law, he shall not make any false, disparaging, derogatory or defamatory statements to any person or entity, including, but not limited to, any media outlet, industry group, financial institution or current or former officer, employee, board member, consultant, client or customer of the Company or any Company affiliate regarding the Company or any of the other Released Parties, or regarding the Company’s or Atlantic Power’s business affairs, business prospects, or financial condition.  The Company and Atlantic Power will instruct all current officers and directors to refrain from making any false, disparaging or derogatory statements to any person or entity, including, but not limited to, any media outlet, industry group, financial institution or current or former officer, employee, board member, consultant, client or customer of the Company or any Company affiliate about Executive.

 

9.              Cooperation.  The Executive agrees to cooperate with the Company or any Company affiliate, including Atlantic Power, in the investigation, defense or prosecution of any claims or actions now in existence or that may be brought in the future against or on behalf of the Company or any

 

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Company affiliate that involve matters relating to the Executive’s role as a director, officer, or employee of the Company or any Company affiliate, including Atlantic Power.  The Executive’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with the Company’s counsel to prepare for discovery or any mediation, arbitration, trial, administrative hearing or other proceeding or to act as a witness when reasonably requested by the Company or any Company affiliate at mutually agreeable times and at locations mutually convenient to the Parties.  The Executive shall be entitled to receive a prompt reimbursement of all reasonable expenses incurred by the Executive in cooperating hereunder including expenses related to travel and other expenses while away from home.  The Company shall reimburse such expenses subject to Company’s expense reimbursement policy and further subject to the terms set forth in Section 11(d) of the Employment Agreement.

 

10.       Amendment.  This Agreement shall be binding upon the Parties and may not be modified in any manner, except by an instrument in writing of concurrent or subsequent date signed by duly authorized representatives of the Parties hereto.  This Agreement is binding upon and shall inure to the benefit of the Parties and their respective agents, assigns, heirs, executors, successors and administrators.

 

11.       Waiver of Rights.  No delay or omission by Atlantic Power or Atlantic Holdings in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent given by Atlantic Power or Atlantic Holdings on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

 

12.       Validity.  Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement.

 

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13.       Acknowledgements.  The Executive acknowledges that he has been given a reasonable period of time to consider this Agreement and that the Company and Atlantic Power are hereby advising the Executive to consult with an attorney of his own choosing prior to signing this Agreement.  The Executive understands and agrees that he will not be entitled to receive the Severance Benefits if he fails to timely execute this Agreement.

 

14.       Voluntary Assent.  The Executive affirms that no other promises or agreements of any kind have been made to or with the Executive by any person or entity whatsoever to cause him to sign this Agreement, and that he fully understands the meaning and intent of this Agreement.  The Executive states and represents that he has had an opportunity to fully discuss and review the terms of this Agreement with an attorney.  The Executive further states and represents that he has carefully read this Agreement, understands the contents herein, freely and voluntarily assents to all of the terms and conditions hereof, and signs his name of his own free act.

 

15.       Applicable Law.  This Agreement shall be governed by the laws of the Commonwealth of Massachusetts without regard to conflict of laws provisions.  The Parties hereby irrevocably submit to and acknowledge and recognize the jurisdiction of the courts of the Commonwealth of Massachusetts, or if appropriate, a federal court located in the Commonwealth of Massachusetts (which courts, for purposes of this Agreement, are the only courts of competent jurisdiction), over any suit, action or other proceeding arising out of, under or in connection with this Agreement or the subject matter hereof.

 

16.       Tax Acknowledgement.  In connection with the payments and consideration provided to the Executive pursuant to this Agreement, the Company will withhold and remit to the tax authorities the amounts required under applicable law, and the Executive shall be responsible for all applicable taxes with respect to such payments and consideration under applicable law.  The Executive acknowledges that he is not relying upon the advice or representation of the Company

 

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or Atlantic Power with respect to the tax treatment of any of the payments or benefits set forth in Paragraph 2 of this Agreement or otherwise.

 

17.       Entire Agreement.  This Agreement contains and constitutes the entire understanding and agreement between the Parties hereto with respect to the Executive’s severance benefits and the settlement of claims against the Company and Atlantic Power and cancels all previous oral and written negotiations, agreements, commitments and writings in connection therewith.  The Executive hereby acknowledges that the payments, benefits, and rights set forth in this Agreement are the exclusive payments, benefits, and rights due to Executive in connection with his separation from employment with the Company.

 

18.       Recital Paragraphs.  The recital paragraphs at the beginning of this Agreement are incorporated by reference as if fully set forth herein.

 

19.       Execution.  This Agreement may be executed by facsimile or electronic mail and in two (2) or more signature counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

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IN WITNESS WHEREOF, the Parties have freely and voluntarily entered into this Agreement effective as of the date set forth below (the “Effective Date”).

 

 

	
 
    	
 
    	
 
    	
ATLANTIC   POWER HOLDINGS, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
February   12, 2015
    	
 
    	
 
    	
By:
    	
/s/   Terrence Ronan
    
	
 
    	
 
    	
 
    	
 
    	
Name:   Terrence Ronan
    
	
 
    	
 
    	
 
    	
 
    	
Title:   Chief Financial Officer and Executive Vice President
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
ATLANTIC   POWER CORPORATION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
February   12, 2015
    	
 
    	
 
    	
By:
    	
/s/   Terrence Ronan
    
	
 
    	
 
    	
 
    	
 
    	
Name:   Terrence Ronan
    
	
 
    	
 
    	
 
    	
 
    	
Title:   Chief Financial Officer and Executive Vice President
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
EDWARD   C. HALL
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
February   12, 2015
    	
 
    	
 
    	
/s/   Edward C. Hall
    

 

12ex10_2.htm

 Exhibit 10.2 

 

 ARTICLES OF ASSOCIATION FOR ZHEN DING 

 

 LIMITED LIABILITY COMPANY 

 

 

 INDEX 

 Chapter 1 General Provision 

 Chapter 2 The Purpose l Scope and Scale of the Business 

 Chapter 3 Total Amount of Investment and the Registered Capital 

 Chapter 4 The Board of Directors 

 Chapter 5 Business Management Office 

 Chapter 6 Finance and Accounting 

 Chapter 7 Profit Sharing 

 Chapter 8 Staff and Workers 

 Chapter 9 The Trade Union Organization 

 Chapter 10 Duration, Termination and Liquidation of the Joint Venture Company 

 Chapter 11 Rules and Regulations 

 Chapter 12 Applicable Law 

 Chapter 13 Supplementary Articles 

 Chapter 1            General Provision 

 Article 1 

 In accordance with the "Law of the People's Republic of China on joint Venture Using Chinese and Foreign Investment" and the contract signed on in shanghai, china, by, Xin Zhou Gold Co.LTD(hereinafter referred to as Party A). and Z&W Zhen Ding Corp.. (hereinafter referred to as Party B), to set up a joint venture, Zhen Ding Mining Limited Liability Company (hereinafter referred to as joint venture company), the Articles of Association hereby is formulated. 

 

    

    

    

 Article 2 

 The names of the joint venture company shall be Zhen DING Mining Limited Liability Company Its abbreviation is Z.D Lit. The Legal address of the joint venture company is at Wuxi Village ,Langqiao District, Jing  County, CHINA. 

 Article 3 

 The names and legal addresses of each parties are as follows: 

 

 Party A: Xin Zhou Gold CO.LTD ,China, and its legal address is Wuxi Village, Langqiao District, Jing  County, CHINA.  

 

 party B: Z&W Zhen Ding Corp.,and its legal address is 8861 W, Kaella Ave. Anaheim, CA 92804 

 article 4 

 The organization form of joint venture company is a limited liability company. The liabilities of each party to the joint venture company just limits to its contributed capital, which stipulated in the Articles of Association or in the revised afterwards. The profits, risks and losses of the joint venture company shall be shared by the parties in proportion to their contributions of the registered capital. 

 Article 5 

 The joint venture company has the status of a legal person and is subject to the jurisdiction and protection of Chinese laws concerned. All activities of the joint venture company shall be governed by the laws. decrees and pertinent rules and regulations of the People's Republic of China. 

 

    

    

    

 Chapter 2 The Purpose, Scope and Scale of the Business 

 Article 6 

 The purpose of the parties to the joint venture is in conformity with the wish of enhancing the economic cooperation and technical exchanges, to raise economic results and ensure satisfactory economic benefits for each investor by improving the product quality, developing new products, and gaining competitive position in the world market in quality and price through advanced and appropriate technology and scientific management. 

 Article 7 

 Business scope of the joint venture company is mining Resource 

 Article 8 

 The products of the joint venture company will be sold on Chinese market and overseas market and after-sale services will be provided by themselves. In order to pursuing the success and development of the joint venture company, the joint venture company shall give the top priority on export of the products and earning foreign currency. 

 

 

 

 

 Chapter 3 Total Amount of Investment and the Registered Capital 

 Article 9 

 The total amount of investment of the joint venture company is 1.693 million U. S. Dollars. The registered capital for the joint venture company is 1.693 million U. S. Dollars. 

 Article 10 

 Both parties shall contribute the capital as follows: 

 

 Party A shall pay amounts for 30% 

 

 Party B shall pay amounts for 70% 

 

    

    

    

 Article 11 

 The amount of the investment in Article 10 shall be paid by Party A and Party B according to the time limit stipulated in the contract. 

 Article 12 

 After the payment of investment by the parties to the joint venture, a Chinese registered accountant invited by the joint venture company shall verify it and provide a certificate for contributed investment. Thereafter the joint venture company shall issue an investment certificate to confirm the date and amount of the contribution. 

 ArticIe13 

 Within the term of the joint venture, the joint venture company shall not reduce its registered capital. Neither party shall be allowed to mortgage any part of the investment to the third party. 

 Article 14 

 Any increase, assignment of the registered capital of the joint venture company shall be approved by the board of directors and submitted to the original examining and approving authority for approval. The registration procedures for changes shall be dealt with at the original registration and administration office. 

 Chapter 4   The Board of Directors 

 Article 15 

 The joint venture company shall establish the board of directors which is the highest authority of the joint venture company. 

 

    

    

    

 Article 16 

 The board of directors shall decide all major issues concerning the joint venture company. As for the following issues. unanimous approval shall be required: 

 l)amending the Articles of Association of the joint venture company ; 

 2)discussing and deciding the termination and dissolution of the joint venture company; 

 3)deciding the merger, affiliation and consolidation of the joint venture company with other economic organization; 

 4)deciding the increase and assignment of the registered capital; 

 5)deciding to set up branches; 

 6)ratifying the project of development on medium term and long term; 

 7)deciding an annual management strategy and plan; 

 8)ratifying fiscal budget, fiscal report and accounting statement; 

 9)deciding the plan on annual profits sharing; 

 l0)inviting and dismissing the general manager and the deputy general managers; 

 11)settling the disputes between each party to the joint venture and joint venture company. As for other matters, approval by more than 2/3 directors shall be required. such as; 

 1)deciding the top line of annual circulating capital and issues on purchasing, leasing and mortgage of assets in the joint venture company; 

 2)approving. the labor contracts and other important regulations of the joint venture company; 

 3)examining and approving the annual business report submitted by the general manager; 

 4)inviting and dismissing the senior administrative  personal who shall be recommended by general manager, and deciding their salary and welfare; 

 

    

    

    

 5)deciding the system of salary and welfare for staff and workers in joint venture company in accordance with the relevant regulations of China; 

 6)defining and adjusting the structure of the joint venture company 

 7)deciding the proportion of allocation for reserve funds, expansion funds and bonuses from the taxed profits of joint venture company; 

 8)deciding the types and scope of insurances for joint venture company 

 9)deciding the scope of authorized power for the general manager; 

 10)deciding the plan on living houses and other welfare for staff and workers of joint venture company; 

 11)deciding other matters which shall made decision by the board of directors. 

 Article 17 

 The board of directors shall consist of 7 directors. of which 4 directors shall be appointed by Party A,3  by Party B. The term of office for the directors is four years and may be renewed. When appointing and replacing directors, a written notice shall be submitted to the board and the other party. 

 Article18 

 The chairman shall give each director a written notice thirty (30) days before the date of the board meeting. The notice shall cover the agenda, time and place of the. Should the directors be unable to attend the board meeting, he may present a proxy in written form to the board. In case the director neither attends nor entrusts others to attend the meeting, he will be regarded as abstention. 

 Article 19 

 The board meeting requires a quorum of over three quarter of the total number of directors. When the quorum is less than three quarter, the decisions adopted by the board meeting are invalid. Detailed written records shall be made for each board meeting and signed by all the attended directors or by the attended proxy. The record shall be made in Chinese and in English, and shall be filed with the company. 

    

    

    

 Chapter 5 Business Management Office 

 

 

 Article 20 

 The joint venture company shall establish a management office which shall be responsible for its daily management. The management office shall have one general manager, deputy general managers. They shall be invited by the board of directors whose term of office is four years and may be renewed by the board of directors. 

 Article 21 

 The system of job responsibility of the general manager under the board of directors is adopted by the joint venture company. The general manager shall be responsible to the board of directors directly, carry out the decisions of the board of directors and organize the daily  works on production, technology and management of joint venture company. 

 Article 22 

 At the invitation of the board of directors, the chairman, vice chairman of directors of the board may concurrently be the general manager, deputy general manager and general manager assistant of the joint venture company. 

 Article 23 

 The general manager or deputy general managers shall not hold positions concurrently as general manager or deputy general manager of other economic organizations on commercial competition with their own joint venture company without the approval of the board of directors. 

 

    

    

    

 Article 24 

 The general manager, deputy general managers and other senior administrative personnel who ask for resignation shall submit their written reports to the board of directors in advance. In case any one of the above-mentioned persons conduct graft or serious dereliction of duty, they may be dismissed at any time upon the decision of the board 

 Chapter 6 finance and Accounting 

 Article 25 

 The finance and accounting of the joint venture company shall be handled in accordance with the "Stipulations of the Finance and Accounting System of the Joint Venture Using Chinese and Foreign Investment" which formulated by the Ministry of Finance of the People's Republic of China. 

 Article 26 

 The fiscal year of the joint venture company shall be calendar year from January 1 to December 31. All vouchers, receipts, accounting statements and reports, accounting books shall be written in Chinese and English. 

 Article 27 

 The joint venture company adopts Renminbi (RMB) as its accounts keeping unit. The conversion of RMB into other currency shall be in accordance with the exchange rate of the converting day published by the State Administration of Foreign Exchange Control of the People's Republic of China. 

 

    

    

    

 Article 28 

 The joint venture company shall open accounts in RMB and foreign currency with the Band of China or other banks which agreed by the Bank of China. 

 Article 29 

 The accounting of the joint venture company shall adopt the internationally used accrual basis and debit and credit accounting system in their work. 

 Article 30 

 The accounting books of the joint venture company shall include the following contents: 

 

 (1)all amount of income and payment and payment in cash of the joint venture company; 

 (2)situations concerning sale and purchasing the materials of the joint venture company; 

 (3)situations concerning registered capital and debt of the joint venture company; 

 (4)situations concerning and assignment of the registered capital. 

 Article 31 

 In the first three months of each fiscal year, the manager shall prepare the profits year's balance sheet, profit and loss statement and proposal regarding the disposal of profits which should be examined and signed by the auditor, then submit them to the board of directors. 

 

 Article 32 

 

 Parties of the joint venture company have the right to invite an auditor to undertake annual financial check and examination at his own expense. The joint venture company shall provide convenience for the checking and examination. 

 

 Article 33 

 

 The depreciation period for the fixed assets of the joint venture company shall be decided by the board of directors in accordance with the "The Income Tax Law of the People's R-public of China for Foreign Investment Enterprises and Foreign Enterprises" 

 

    

    

    

 

 Article 34 

 

 All matters concerning foreign exchange shall be handled in accordance with the "provisional Regulations for Exchange Control of the People's Republic of China" and other pertaining regulations. 

 

 

 

 Chapter 7 Profit Sharing 

 Article 35 

 The joint venture company shall allocate reserve funds, expansion funds and bonuses welfare funds for staff and workers after payment of taxes. The proportion of allocation shall be decided by the board of directors. 

 Article 36 

 After paying the taxes in accordance with the law and drawing the various funds, the profits in net will be distributed according to the proportion of each party's investment in the registered capital. 

 Article 37 

 The joint venture company shall distribute its profits once a year. The profit distribution plan and amount of profit distributed to each party shall be published within the first three months following each fiscal year. 

 

    

    

    

 

 Chapter 8 Staff and Workers 

 Article 38 

 The employment, recruitment, dismissal and resignation of the staff and workers of the joint venture company and their salary, welfare, labor insurance, labor protection, labor discipline and other matters shall be handled according to the "Regulations of the People's Re-public of China on Labor Management in Joint Ventures Using Chinese and Foreign Investment" and its implementation rules, and relevant regulations issued b 

 AnHui province. 

 Article 39 

 The joint venture company has the right to take disciplinary actions, such as warning, demerit recording and salary reducing against those staff and workers who violate the rules and regulations of the joint venture company and labor disciplines. Those with serious cases 

 may be dismissed. Discharging of workers shall be filed with the local labor and personnel department. 

 Article 40 

 The matters concerning the welfare funds, bonuses, labor protection and labor insurance, etc, shall be stipulated respectively in various rules by the joint venture company in accordance with relevant regulations of the People's Republic of China and Anhui province, to ensure that the staff and workers go in for production and work under normal condition. 

    

    

    

 Chapter 9  The Trade Union Organization 

 Article 41 

 The staff and workers of joint venture company have the right to establish trade union organization and carry out activities in accordance with the stipulation of the "Trade Union Law of the people's Republic of China". 

 Article 42 

 The trade union in the joint venture company is the representative of the interests of the staff and workers. The tasks of the trade union are: to protect the democratic rights and material interests of the staff and workers pursuant to the law; to assist the joint venture company to arrange and make rational use of welfare funds and bonuses; to organize political, professional, scientific and technical studies, to carry out literary, art and sports activities; and to educate staff and workers to observe labor discipline and strive to fulfill the economic tasks of the joint venture company. 

 Article 43 

 The persons in charge of the trade union of the joint venture company has the right to attend as nonvoting members and to report the opinions and demands of staff and workers to meetings of the board of directors held to discuss issues such as development plans, production and managing activities of the joint venture company. 

 Article 44 

 The trade union shall take part in the mediation of disputes arising between the staff and workers and the joint venture company. 

 Article 45 

 The joint venture company shall allot an amount of money totally 2% of all the salaries of the staff and workers of the joint venture company as trade union's funds which shall be used by the trade union in accordance with the "Managerial Rules for the Trade Union Funds" formulated by the All China Federation of Trade Union. 

 

    

    

    

 Chapter 10   Duration, Termination and Liquidation of the Joint Venture 

 Article 46 

 The duration of the joint venture company is 20 years. The establishment of the joint venture company shall start from the date on which the business license of the joint venture company is issued. 

 An application for the extension of the duration. proposed by one party and unanimously approved by the board of directors, shall be submitted to the original examining and approving authority 6 months prior to the expiry date of the joint venture. 

 Article 47 

 With the agreement between both parties on the termination which should be pursuing the best benefits for the parties, the joint venture will be terminated. In this case, the decision for the termination shall be made by the board meeting 90 days before the date of termination of the joint venture, and be submitted to the original examining and approving authority. 

 Article 48 

 When the following situations happened, either party have right to terminate the joint venture: 

 1)expiration of the duration of the joint venture company; 

 2)inability to continue operations due to heavy losses; 

 3)inability to continue operations due to heavy losses caused by the Force Majeure; 

 4)inability to continue operations due to the failure of the party to fulfill its obligations prescribed in the contract and the Articles of Association; 

 

    

    

    

 

 5)failure to obtain the desired objectives of the operation and no prospects for the future development of the joint venture company. 

 Article 49 

 Upon the expiration of the duration or termination of the joint venture company, the board of directors shall work out procedures and principles for the liquidation, nominate candidates for the liquidation committee for liquidating the assets of the joint venture company. 

 Article 50 

 The task of the liquidation committee are: to conduct through check of the property of the joint venture company, its claims and indebtedness; to work out the statement of assets and liabilities and list of property; to formulate a liquidation plan. All these shall be carried out upon the approval of the board of directors. 

 Article 51 

 The remaining property after the clearance of debts of the joint venture company shall be carried out upon the approval of the board of directors. 

 Article 52 

 On completion of the liquidation, the joint venture company shall submit a liquidation report to the original examining and approving authority, go through the formalities for nullifying its registration in the original registration office and hand in its business license, at the same time, make an announcement to the public. 

 Article 53 

 After winding up of the joint venture company, its accounting books shall be left in the care of Party A. 

 

    

    

    

 Chapter 11   Regulations 

 Article 54 

 Following are the rules and regulations formulated by the board of directors of the joint venture company: 

 1) Management regulations, including the powers and functions of the managerial branches and its working rules and procedures; 

 2)Rules for the staff and workers; 

 3)System of labor and salary; 

 4)System of work attendance record, promotion and awards and penalty for the staff and workers; 

 5)Detailed rules of staff and worker's welfare; 

 6)Financial system; 

 7)Liquidation procedures upon the dissolution of the joint venture company; 

 8)Other necessary rules and regulations. 

 

 

 Chapter l2 Applicable Law 

 Article 55 

 The formation of this contract, its validity, interpretation, execution and settlement of the disputes shall be governed by the relevant laws of the People's Republic of china. 

    

    

    

Chapter 13   Supplementary Articles 

 Article 56 

 The amendment to the Articles of Association shall be unanimously agreed and decided by the board of directors and submitted to the original examining and approving authority for approval. 

 Article 57 

 The contract shall be written in Chinese and in English. Both languages are equally Authentic. In events of any discrepancy between the two aforementioned versions, the Chinese version shall prevail. 

 Article 58 

 The Articles of Association is signed in shanghai China by the authorized representatives of both parties on Oct.12 2006. 

 

 

  

	
 Party A 

	
 Party  B

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