EMPLOYMENT AGREEMENT, dated as of the 13th day of September, 1999 (the
"Effective Date"), by and between ChinaMallUSA.com, Inc., Inc., a Utah
Corporation doing business at 1 World Trade Center, Suite 2201, New York, NY
10048 (the "Company") and James Chyn, an individual residing at 337 Dodds Lane,
Princeton, NJ 08540(the "Executive").
WHEREAS, the Company desires to secure the services of the Executive upon the
terms and conditions hereinafter set forth; and
WHEREAS, the Executive desires to render services to the Company upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
SECTION 1: EMPLOYMENT
The Company hereby employs Executive and the Executive hereby accepts such
employment, as the Vice President, Marketing and Business Development of the
Company, subject to the terms and conditions set forth in this Agreement.
SECTION 2: DUTIES
The Executive shall serve as the Vice President, Marketing and Business
Development and shall (i) perform the services and functions required by and/or
relating to such office and position and (ii) perform any and all duties as may
be lawfully assigned to him from time to time by the Company. If requested by
the Company, the Executive shall serve on the Board of Directors or any
committee thereof without additional compensation. During the term of this
Agreement, the Executive shall devote all of his business time to the
performance of his duties hereunder unless otherwise authorized by the Company.
SECTION 3: TERM OF EMPLOYMENT
The term of the Executive's employment shall be for a period of Thirty Six (36)
months (the "Term") commencing on the Effective Date, subject to earlier
termination by the parties pursuant to Sections 5 and 6 hereof The Executive
shall be entitled to Four (4) weeks of vacation during each year of the Term.
SECTION 4: COMPENSATION OF EXECUTIVE.
4.1) SALARY. The Company shall pay to Executive a base salary of Two
Thousand Five Hundred Dollars ($2,500) per month for the first four
months of the Term; Five Thousand dollars ($5,000) per month for the
following twelve months of the Term; and Ten Thousand dollars ($10,000)
per month for the remaining twenty months of the Term. At any time
during the Term of this Agreement, the base salary may be increased if
determined by and at the sole option of the Company. All salaries
payable to Executive shall be paid at such regular weekly, biweekly or
semi-monthly time or times as the Company makes payment of its payroll
in the regular course of business.
4.2) PERFORMANCE BONUS. During each year of the term, the Executive shall be
entitled to receive a performance bonus (the "Performance Bonus") based
upon the Company's financial performance and the Executive's
performance of his duties as determined by the Company's Board of
Directors (or the Compensation Committee thereof).
4.3) STOCK OPTIONS. Upon the execution of this Agreement, the Executive
shall receive options to purchase a total of Two Hundred Thousand
(200,000) shares of the Company's Common Stock at an exercise price of
ninety cents ($0.90) per share, which shall be exercisable and subject
to the terms and conditions of any Option Agreement that the Company
requires its executives or employees to execute. So long as the
Executive continues to remain in the employ of the Company, such
options shall vest as follows: 60,000 options shall vest on the
Effective date of this agreement; 70,000 options shall vest on the
first anniversary date of this agreement and 70,000 options shall vest
on the second anniversary date of this agreement.
4.4) EXPENSES. During the Term, the Company shall reimburse the Executive
for all reasonable and necessary travel, entertainment expenses and
other disbursements incurred by the Executive on behalf of the Company,
and in performance of the Executive's duties hereunder. However,
Execution shall obtain and receive prior approval for such expenses and
disbursements by the Executive's supervisor.
4.5) BENEFITS. The Executive shall be permitted during the Term to
participate in any hospitalization or disability insurance plans,
health programs, pension plans, bonus plans, stock plans or similar
benefits that may be generally available to all other executives of the
Company to the extent the Executive is eligible under the terms of such
plans or programs. The Company agrees to provide the Executive with a
paid health insurance plan comparable to insurance coverage granted to
the other Company Executives. In the event that the Executive elects
not to be covered by the benefit plans provided by the Company to its
other executives, the Company shall pay to the Executive an amount
equal to the amount the Company would have paid on the Executive's
behalf for such benefits, less customary withholding.
SECTION 5: DISABILITY OF THE EXECUTIVE
If the Executive is incapacitated or disabled by accident, sickness or otherwise
so as to render the Executive mentally or physically incapable of performing the
services required to be performed under this Agreement for a period of Sixty
(60) consecutive days, or for a period of One Hundred and Eighty (180) days
during any period of Three Hundred and Sixty (360) days (a "Disability"), the
Company may, at the time or any time thereafter, at its option, terminate the
employment of the Executive under this Agreement immediately upon giving the
Executive written notice to that effect. This contract shall then be deemed null
and void and the Company shall be released of all its obligations hereunder.
SECTION 6: TERMINATION
a) The Company may terminate the employment of the Executive and all of
the Company's obligations under this Agreement at any time for Cause
(as hereinafter defined) by giving the Executive notice of such
termination, with reasonable specificity of the details thereof "Cause"
shall mean (i) the Executive's misconduct that could reasonably be
expected to have a material adverse effect on the business and affairs
of the Company, (ii) the Executive's disregard of lawful instructions
of the Company's Board of Directors or its president/chief executive
officer, or neglect of duties or failure to act, which, in each case,
could reasonably be expected to have a material adverse effect on the
business and affairs of the Company, (iii) the commission by the
Executive of an act constituting common law fraud, or a felony, or
criminal act against the Company or any affiliate thereof or any of the
assets of any of them, (iv) the Executive's material breach of any of
the agreements contained herein provided Executive shall have the right
to cure such breach during the Sixty (60) day period after receiving
written notice of such breach or (v) the Executive's death or
resignation hereinunder. A termination pursuant to Section 6(a)(i),
(ii) shall take effect Ten (10) days after the giving of the notice
contemplated hereby unless the Executive shall, during such 10-day
period, remedy to the reasonable satisfaction of the Board of Directors
of the Company the misconduct, disregard, abuse or breach specified in
such notice; provided, however, that such termination shall take effect
immediately upon the giving of such notice if the Board of Directors of
the Company shall, in its sole discretion, have determined that such
misconduct, disregard, abuse or breach is not remediable (which
determination shall be stated in such notice). A termination pursuant
to Section 6(a)(iii) shall take effect immediately upon the giving of
the notice contemplated hereby.
b) The Company may at its sole option terminate the employment of the
Executive and all of the Company's obligations under this Agreement
(except as hereinafter provided) at any time during the Term without
Cause provided that the Executive is given a written notice of such
termination. The termination shall be effective Thirty (30) days
following the giving of such written notice. This right to terminate
can be exercised at any time by the Company. For convenience of
reference, the date upon which any termination of this Agreement
pursuant to Sections 5 or 6 is effective shall be referred to as the
SECTION 7: EFFECT OF TERMINATION OF EMPLOYMENT
a) Upon the termination of the Executive's employment for Cause, neither
the Executive nor the Executive's beneficiaries or estate shall have
any further rights under this Agreement or any claims against the
Company arising out of this Agreement, except the right to receive (i)
the unpaid portion of the Base Salary provided for in Section 4.1,
computed on a pro rata basis to the Termination Date (the "Unpaid
Salary Amount"), (ii) reimbursement for any expenses for which the
Executive shall not have theretofore been reimbursed, (the "Expense
Reimbursement Amount") and (iii) unpaid amounts owed to the Executive
for accrued and unused vacation days through the Termination Date (the
b) Upon the termination of the Executive's employment for other than Cause
including without Cause, or for a Disability, neither the Executive nor
the Executive's beneficiaries or estate shall have any further rights
under this Agreement or any claims against the Company arising out of
this Agreement, except the right to receive (i) the Unpaid Salary
Amount as defined in (a) above, (ii) the Expense Reimbursement Amount
as defined in (a) above, (iii) the Vacation Amount as defined in (a)
above and (iv) severance compensation equal to the Base Salary for
Twelve (12) months, 50% of which is payable on the Termination Date and
50% of which is payable in equal monthly installments during the period
commencing thirty (30) days following the Termination Date and
continuing for a period of six months thereafter.
c) In the event of an early termination of this Agreement, all options
granted to the Executive that have been vested pursuant to Section 4
shall be exercisable in accordance with the standard Option Agreement
that the Company requires its executives and employees to execute and
shall be deemed null and void if they are not exercised within the
period provided in the Option Agreement or one year (1) whichever is
later, along with any and all unvested portion of the options and
Company's obligations under Section 4 shall terminate.
SECTION 8: DISCLOSURE OF CONFIDENTIAL INFORMATION
Executive recognizes that he has had and will continue to have access to secret
and confidential information regarding the Company, including but not limited to
its customer list, products, know-how, and business plans. Executive
acknowledges that such information is of great value, to the Company, is the
sole property of the Company, and has been and will be acquired by him in
confidence. In consideration of the obligations undertaken by the Company
herein, Executive will not, at any time, during or after his employment
hereunder, reveal, divulge or make known to any person, any information acquired
by Executive during the course of his employment, which is treated as
confidential by the Company. The provisions of this Section 8 shall survive
Executive's employment hereunder.
SECTION 9: COVENANT NOT TO COMPETE
a) Executive recognizes that the services to be performed by him hereunder
are special, unique and extraordinary. The parties confirm that it is
reasonably necessary for the protection of Company that Executive
agree, and accordingly, Executive does hereby agree, that he shall not,
directly or indirectly, at any time during the term of the Agreement
and the "Restricted Period", as defined in Section 9(e) below, employ
or engage, or cause or authorize, directly or indirectly, to be
employed or engaged, for or on behalf of himself or any third party,
any employee or agent of Company or any affiliate thereof.
b) Executive hereby agrees that he will not, directly or indirectly, for
or on behalf of himself or any third party, at any time during the term
of the Agreement and during the Restricted Period, solicit any
customers of the Company or any affiliate thereof.
c) If any of the restrictions contained in this Section 9 shall be deemed
to be unenforceable by reason of the extent, duration or geographical
scope thereof, or otherwise, then the court making such determination
shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form this Section
shall then be enforceable in the manner contemplated hereby.
d) This Section 9 shall not be construed to prevent Executive from owning,
directly or indirectly, in the aggregate, an amount not exceeding five
percent (5%) of the issued and outstanding voting securities of any
class of any company whose voting capital stock is traded on a national
securities exchange or on the over-the-counter market other than
securities of the Company.
e) The term "Restricted Period," as used in this Section 9, shall mean the
period of Executive's actual employment hereunder plus twelve (12)
months after the Termination Date.
f) The provisions of this Section 9 shall survive the end of the Term as
provided in Section 9(e) hereof.
SECTION 10: MISCELLANEOUS
10.1) INJUNCTIVE RELIEF. Executive acknowledges that the services to be
rendered under the provisions of this Agreement are of a special,
unique and extraordinary character and that it would be difficult or
impossible to replace such services. Accordingly, Executive agrees that
any breach or threatened breach by him of Sections 8 or 9 of this
Agreement shall entitle Company, in addition to all other legal
remedies available to it, to apply to any court of competent
jurisdiction to seek to enjoin such breach or threatened breach.
The parties understand and intend that each restriction agreed to by
Executive hereinabove shall be construed as separable and divisible
from every other restriction, that the unenforceability of any
restriction shall not limit the enforceability, in whole or in part, of
any other restriction, and that one or more or all of such restrictions
may be enforced in whole or in part as the circumstances warrant. In
the event that any restriction in this Agreement is more restrictive
than permitted by law in the jurisdiction in which Company seeks
enforcement thereof, such restriction shall be limited to the extent
permitted by law.
10.2) ASSIGNMENTS. Neither Executive nor the Company may assign or delegate
any of their rights or duties under this Agreement without the express
written consent of the other.
10.3) ENTIRE AGREEMENT. This Agreement constitutes and embodies the full and
complete understanding and agreement of the parties with respect to
Executive's employment by Company, supersedes all prior understandings
and agreements, whether oral or written, between Executive and Company,
and shall not be amended, modified or changed except by an instrument
in writing executed by the party to be charged. The invalidity or
partial invalidity of one or more provisions of this Agreement shall
not invalidate any other provision of this Agreement. No waiver by
either party of any provision or condition to
be performed shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or any prior or subsequent
10.4) BINDING EFFECT. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their
respective successors, heirs, beneficiaries and permitted assigns.
10.5) HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.6) NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given when personally delivered, sent
by registered or certified mail, return receipt requested, postage
prepaid, or by private overnight mail service (e. g. Federal Express)
to the party at the address set forth above or to such other address as
either party may hereafter give notice of in accordance with the
provisions hereof. Notices shall be deemed given on the sooner of the
dates actually received or the third business day after sending.
10.7) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of [New York]without giving
effect to such State's conflicts of laws provisions and each of the
parties hereto irrevocably consents to the jurisdiction and venue of
the federal and state courts located in the State of New York, County
of New York.
10.8) COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one of the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
By: /s/ Max P. Chen
Name: Max P. Chen
Title: Chief Executive Officer
By: /s/ James Chyn
Name: James Chyn