Document:

f8k082908ex10ii_somerset.htm

     

     

     

    AMENDMENT
NO. 1 TO EMPLOYMENT AGREEMENT

    DATED
JANUARY 6, 2004

    

    

    As of
August 29, 2008, this agreement shall serve as the first Amendment to the
Employment Agreement dated January 6, 2004 between Somerset International Group,
Inc. (the “Company”), a Delaware Corporation at 90 Washington Valley Road,
Bedminster, NJ 07921, and John X. Adiletta, (“Employee”) at 51 Boulderwood
Drive, Bernardsville, NJ 07924.

    

    IN
CONSIDERATION of the mutual covenants contained in this Amendment to the
Employment Agreement, and for other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the Company and the Employee
agree that the Employment Agreement shall be amended as follows:

    

    
      	
              2.  

            	
              Term:  The term of
      the Agreement shall be extended for an additional three (3) years from
      January 6, 2009.

            

    

    

    IN WITNESS WHEREOF, this
Amendment has been executed as of the date and year first above
written.

     

     

     

     

     

    
      
        	 
      	 
      	
                The
      “Company”

                Somerset
      International Group, Inc.

              
	
                Attest:

                 

                 

              	 
      	 
      
	
                Secretary

              	 
      	
                Name:  John
      X. Adiletta

                Title:   
      President and Chief

              
	 
      	 
      	
                            
      Executive Officer

              
	 
      	 
      	 
      
	 
      	 
      	
                The
      “Employee”

                 

                 

              
	
                Witness

              	 
      	
                John
      X. Adilettaex10_1.htm

    EXHIBIT 10.1

     

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement (this “Agreement”) is made as of this 11th day of September 2008,
by and between SinoHub, Inc., a Delaware corporation (the “Company”), and Tracy
A. Edwards (the "Employee").

    

    WHEREAS,
the Company wishes to secure the employment of the Employee and the Employee
wishes to be so employed by the Company.

    

    NOW,
THEREFORE, in consideration of the mutual covenants and promises herein
contained and intending to be legally bound hereby, it is hereby agreed by and
between the parties as follows:

    

    (1)           Employment.  Subject
to the terms and conditions of this Agreement, the Company hereby employs the
Employee to perform such duties as may from time to time be prescribed by the
Chief Executive Officer of the Company, subject in all instances to the general
supervision and direction of the Board of Directors of the
Company.  The Employee hereby accepts such employment.

    

    (2)           Duties.  The
Employee shall serve as Chief Financial Officer and Corporate Secretary of the
Company and shall perform and discharge fully and faithfully such duties as are
assigned to him pursuant to Section 1.  The Employee’s initial duties
hereunder shall include, but not be limited to, overseeing the day-to-day
financial operations of the Company and its subsidiaries and such other duties
and responsibilities as are customarily undertaken by a chief financial officer
of a corporation.  The Employee will operate within the guidelines,
budgets, policies and procedures now or hereafter established by the Company,
copies of which shall be provided to the Employee or of which the Employee is
aware.

    

    (3)           Salary.  The
Company shall pay the Employee, during the Term (as defined below) of this
Agreement, a salary of US$180,000 (as calculated on an
annualized basis) (the “Salary”), before applicable withholding taxes, payable
in accordance with normal Company pay policies. The Employee understands and
agrees that the Salary may be reviewed on an annual or more frequent basis, and
may be subject to modification.

    

    (4)           Bonus.  During
the Term (as defined below), the Employee will be eligible to receive a bonus of
up to US$10,000 per
fiscal quarter subject to the achievement of and based upon criteria to be
determined in the sole discretion of the Chief Executive Officer of the
Company.  The Employee agrees and acknowledges that in the event that
his employment with the Company is terminated for any reason, he will not be
entitled to any bonus, including a pro rata bonus, potentially payable relative
to the year in which his employment is terminated.

     

     

    
      	Employment
      Agreement 	
              Page 1 
      

            
	 	 

    

    
      
        

      

    

    
    

     

    (5)           Equity. The Company
and the Employee acknowledge and agree that the Company intends to, but has not
yet, adopted an equity incentive plan (the “Plan”).  Consequently, the
Company and the Employee agree that after the adoption of the Plan the Company
shall issue to the Employee, as mutually agreed upon by the Company and the
Employee, either: (a) 200,000 shares of restricted Common Stock of the Company
(the “Restricted Shares”); or (b) a stock option to purchase 200,000 shares of
Common Stock (the “Option Shares”) of the Company (the “Option”).  If
the Company and the Employee agree that the Employee shall receive the
Restricted Shares, the issuance of such Restricted Shares shall be contingent
upon the Restricted Shares: (i) being issued to the Employee at a price per
share mutually agreeable to the parties; (ii) being subject to all of the terms
and conditions of the Plan; and (iii) being subject to the terms and conditions
of a restricted stock agreement (the “Restricted Stock Agreement”) mutually
agreeable to the parties which will provide, in part, that the Restricted Shares
shall be subject to a four (4) year reverse vesting schedule which shall lapse
as follows: 25% on the first anniversary of the Employee’s start date and then
6.25% at the end of each subsequent fiscal quarter.  If the Company
and the Employee agree that the Employee shall receive the Option, the issuance
of the Option shall be contingent upon the Option: (x)  being
exercisable as to each Option Share at a price per share not less than the fair
market value of a share of Company’s Common Stock on the day that the Option is
issued; and (y) being subject to all of the terms of the Plan and a stock option
agreement by and between the Company and the Employee (the “Option Agreement”),
which will provide, in part, that the Option shall vest as to 25% of the Option
Shares on the first anniversary of the Employee’s start date and then 6.25% at
the end of each fiscal quarter thereafter.

     

    (6)           Expenses.  The
Employee shall be reimbursed for all reasonable, ordinary, and necessary
business expenses in accordance with Company policy.  The Employee
shall furnish the Company with the appropriate documentation relating to such
expenses and shall comply with any additional requirements of the Company
generally applicable to the Company's employees in connection
therewith.

     

    (7)           Benefits.  During
the Term hereof, the Employee shall be entitled to the benefits generally made
available to similarly situated employees of the Company as offered from time to
time and as approved by the Board of Directors of the Company.

     

    (8)           Vacation.  For
each year during the Term, the Employee shall be entitled to fifteen (15)
business days paid vacation to be taken at such times as not to unduly disrupt
the business of the Company in accordance with the vacation policies of the
Company in effect from time to time.

     

    (9)           Full-Time
Duties.  The Employee shall devote the Employee’s full working
time, attention and best efforts to fulfill his duties hereunder and, to the
business and interest of the Company and its affiliates during the Term of this
Agreement.

     

    (10)         Term and
Termination.  The Employee shall be an “at will” employee of
the Company.  The Employee’s employment pursuant to the terms and
conditions of this Agreement shall commence on the date hereof and shall
continue unless and until terminated under any of the following circumstances
(the “Term”):

     

    (a)           Disability.  The
Company may terminate the Employee’s employment hereunder at any time and
without further obligation after having established the Employee’s long-term
disability.  For purposes of this Agreement, "long-term disability"
shall mean the incapacity, by accident, sickness or otherwise so as to render
the Employee mentally or physically incapable of devoting to the business of the
Company the Employee’s full time, commercially reasonable efforts, skill and
attention, and such condition continues for a period of sixty (60) consecutive
days or ninety (90) total days in any twelve (12) month period.

    
      
         

         

        
          	Employment
      Agreement 	
                  Page 2 
      

                
	 	 

        

        
          
            

          

        

        
        

         

      

    

    (b)           With
Cause.  The Company may terminate the Employee’s employment
hereunder at any time and without further obligation for cause.  For
purposes of this Agreement, "cause" shall mean the occurrence of any of the
following events on the part of the Employee during the Term
hereof:

     

    
      	
               
      

            	
              (i)

            	
              any
      act of personal dishonesty or a breach of trust in connection with the
      Employee’s responsibilities to the Company and intended to result in
      substantial personal enrichment of the
Employee;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      commission by the Employee of any crime classified as a felony under any
      Federal, state or local law;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              continued
      violations by the Employee of the Employee’s obligations under this
      Agreement after there has been delivered to the Employee a written demand
      for performance from the Company which describes the basis for the
      Company’s belief that the Employee has not substantially performed his
      duties and such violations have not been corrected by the Employee within
      ten (10) days following such
demand;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              any
      breach by the Employee of the Non-Solicitation, Invention Assignment and
      Non-Disclosure Agreement dated as of the date hereof by and between the
      Company and the Employee (the “Inventions
  Agreement”);

            

    

     

    
      	
               
      

            	
              (v)

            	
              the
      use by the Employee of a controlled substance without a prescription or
      the use of alcohol which in any way impairs the Employee’s ability to
      carry out his duties and responsibilities;
or

            

    

     

    
      	
               
      

            	
              (vi)

            	
              any
      violation or refusal to obey the lawful directives and/or instructions of
      the Chief Executive Officer, President or Board of Directors of the
      Company after there has been delivered to the Employee a written demand
      for performance by the Company which describes the basis for the Company’s
      belief that the Employee has not obeyed the lawful directives and/or
      instructions of the Chief Executive Officer, President or Board of
      Directors of the Company and such violation or refusal has not been
      corrected by the Employee within five (5) days following such
      demand.

            

    

     

    (c)           Without
Cause.  The Company may terminate the Employee’s employment
hereunder at any time and for any reason without cause.

    
      
         

         

        
          	Employment
      Agreement 	
                  Page 3 
      

                
	 	 

        

        
          
            

          

        

        
        

         

      

    

    (d)           Employee
Termination.  The Employee may terminate the Employee’s
employment hereunder at any time.

    

    (11)           Severance.  If
the Company terminates the Employee without cause pursuant to Section 10(c) of
this Agreement, the Company shall pay to the Employee a sum equal to the lesser
of: (a) one month of the Employee’s Salary (calculated as of the last day of the
Term) per year of the Employee’s employment with the Company; and (b) six (6)
months of the Employee’s Salary (calculated as of the last day of the
Term).  Notwithstanding the foregoing, the Company shall not owe any
monies to the Employee pursuant to the previous sentence unless the Employee has
been employed by the Company for one year after the date of this
Agreement.

    

    (12)           Indemnity.  The
parties will work together in good faith to enter an Indemnity Agreement with
terms and conditions consistent with those provided to directors and officers of
the Company generally.

     

    (13)           Notices.  Any
notice or other communication in connection with this Agreement shall be deemed
to be delivered if in writing (addressed as provided below) and if either: (a)
actually delivered (electronically or physically) at said address; or (b) in the
case of a letter, three (3) business days shall have elapsed after the same
shall have been deposited in the United States mail, postage prepaid and
registered or certified, return receipt requested or forty eight (48) hours
shall have elapsed after the same shall have been deposited with an
internationally recognized overnight courier; or (c) by facsimile, when
transmission acknowledged by telephonic receipt to the following
addresses:

     

    

    If to the Company:

    

    SinoHub,
Inc.

    2/F,
M-10

    Shenzhen
High Tech Park

    Shenzhen,
China 518057

    Fax:
011-86-755-26012224

    Attn:
Chief Executive Officer

    

    With a
copy to:

    

    Seyfarth
Shaw LLP

    Two
Seaport Lane

    Boston,
MA 02210

    Fax:
(617) 946-4801

    Attn:
William Hanlon, Esquire

    

    If to the
Employee:

    

    Tracy A.
Edwards

    2505 26th
Street

    Santa
Monica, CA 90405

    Fax:
(310) 450-2762

    
      
         

         

        
          	Employment
      Agreement 	
                  Page 4 
      

                
	 	 

        

        
          
            

          

        

        
        

         

      

    

    (14)           Entire
Agreement/Amendment.  This Agreement (and the agreements
referred to herein) constitute the entire agreement between the parties with
respect to the subject matter hereof, and all promises, representations,
understandings, warranties and agreements with reference to the subject matter
hereof and inducements to the making of this Agreement relied upon by any party
hereto have been expressed herein and will be expressed in the: (a) Option Plan;
(b) Option Agreement or Restricted Stock Agreement (as applicable); and (c)
Inventions Agreement.  This Agreement may be amended only by a writing
signed by both parties hereto.

     

    (15)           Governing
Law.  This Agreement shall be deemed a contract made under the
laws of the State of California (without regard to its conflict of law
provisions) and, together with the rights and obligations of the parties
hereunder, shall be construed under and governed by the laws of such
state.

     

    (16)           Counterparts.  This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

     

    (17)           Effect of
Headings.  Any title of a section heading herein contained is
for convenience of reference only, and shall not affect the meaning of
construction or any of the provisions hereof.

     

    (18)           Successors and
Assigns.  All covenants, promises and agreements by or on
behalf of the parties contained in this Agreement shall inure to the benefit of,
and be binding upon, the successors and assigns of the parties
hereto.

     

    IN
WITNESS WHEROF, the parties hereto have caused this Agreement to be executed in
multiple counterparts as of the date set forth above by their duly authorized
representative.

    

    

    
      	
              EMPLOYEE

            	
              SINOHUB,
      INC.

            
	 
      	 
      
	/s/ Tracy
      A. Edwards	
               

            	
              By:
      

            	/s/ Henry
      T. Cochran	
               

            
	
              Tracy
      A. Edwards

            	 	 	
              Henry
      T. Cochran

            	 
	 	 	 	Chief Executive
      Officer	 

    

     

     

     

     

     

     

     

    
      	Employment
      Agreement	
               Page 5

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