WONDER AUTO TECHNOLOGY, INC. INDEPENDENT DIRECTOR’S CONTRACT
Exhibit
10.3
INDEPENDENT
DIRECTOR’S CONTRACT
THIS
AGREEMENT (The “Agreement”) is made as of the 23rd
day of
March, 2007 and is by and between Wonder Auto Technology, Inc., a Nevada
corporation (hereinafter referred to as “Company”) and Xxx Xxxxx (hereinafter
referred to as “Director”).
BACKGROUND
The
Board
of Directors of the Company desires to appoint Director to fill an existing
vacancy and to have the Director perform the duties of independent director
and
Director desires to be so appointed for such position and to perform the duties
required of such position in accordance with the terms and conditions of this
Agreement.
AGREEMENT
In
consideration for the above recited promises and the mutual promises contained
herein, the adequacy and sufficiency of which are hereby acknowledged, Company
and Director hereby agree as follows:
1. DUTIES.
The
Company requires that the Director be available to perform the duties of an
independent director as described in the Company’s Handbook for Prospective
Directors and such other duties customarily related to this function as may
be
determined and assigned by the Board of Directors of the Company and as may
be
required by the Company’s constituent instruments, including its certificate or
articles of incorporation, bylaws and its corporate governance and board
committee charters, each as amended or modified from time to time, and by
applicable law, including the Nevada General Corporation Law. Director agrees
to
devote as much time as is necessary to perform completely the duties as Director
of the Company, including duties as a member of the Audit Committee and such
other committees as the Director may hereafter be appointed to. The Director
will perform such duties described herein in accordance with the general
fiduciary duty of Directors arising under the Nevada General Corporation Law
and
Chapter 78 of the Nevada Revised Statutes.
2. TERM.
The
term of this Agreement shall commence as of the date of the Director’s
appointment by the board of directors of the Company (in the event the Director
is appointed to fill a vacancy) or the date of the Director’s election by the
stockholders of the Company and shall continue until the Director’s removal or
resignation. Each 12-month period ending on the anniversary date of the
Director’s appointment is a “Service Year.”
3. COMPENSATION.
For all
services to be rendered by Director in any capacity hereunder, the Company
agrees to (i) pay Director a fee of $20,000 in cash per Service Year payable
in
equal quarterly installments (the “Base Cash Compensation”) throughout the
Company’s fiscal year; and (ii) in any Service Year in which the Company
consummates either (a) a registered public offering by it of its shares for
its
own account for cash or (b) a resale registration of shares on behalf of
investors who purchased Company securities in a private placement for cash,
but
only if such placement occurred during that Service Year or a prior Service
Year
of the Director (a “Registered Offering”), grant and issue to Director (as
additional non-cash compensation for his services as director in lieu of
additional cash director compensation and expressly not as compensation for
any
services in connection with any Company offering, which services are not being
offered or provided by the Director) such number of shares having a fair market
value (calculated as determined below) equal to the aggregate value of the
Base
Cash Compensation to be paid to the Director for the Service Year in which
the
registration statement for the Registered Offering is first declared effective.
The fair market value of the shares to be issued to the Director shall be the
initial offering price of the Company’s shares in the Registered Offering. The
shares issued to the Director shall bear restrictive legends and shall be
saleable and transferable only in accordance with SEC Rule 144, but may be
registered for resale on Form S-8 or S-3 if and when determined by the full
Board of Directors of the Company. In the event a Registered Offering is not
effected during a Service Year, an amount equal to the Base Cash Compensation
amount shall be paid to the Director in cash at the end of the Service Year
in
lieu of any share grant. If the Director does not serve on the Board of
Directors for at least 12 months prior to the effectiveness of the Registered
Offering, the total number of shares granted to the Director will be reduced
on
a pro rata basis to reflect time actually served on the Board of Directors
prior
to the effectiveness of the Registered Offering. The initial year’s Base Cash
Compensation is considered earned when paid and is nonrefundable. Upon execution
of this Agreement, the Company shall pay to the Director a pro rata portion
of
the initial Service Year’s Base Cash Compensation described above (pro-rated for
the remaining portion of the Company’s then-current fiscal year). Thereafter,
payment shall be due on or before the first business day of the Company’s next
fiscal year and in succeeding fiscal quarters as described above. Such Base
Compensation and grant shares may be adjusted from time to time as agreed by
the
parties.
4. EXPENSES.
In
addition to the compensation provided in paragraph 3 hereof, the Company will
reimburse Director for pre-approved reasonable business related expenses
incurred in good faith in the performance of Director’s duties for the Company.
Such payments shall be made by the Company upon submission by the Director
of a
signed statement itemizing the expenses incurred. Such statement shall be
accompanied by sufficient documentary matter to support the
expenditures.
5. CONFIDENTIALITY.
The
Company and Director each acknowledge that, in order for the intents and
purposes of this Agreement to be accomplished, Director shall necessarily be
obtaining access to certain confidential information concerning the Company
and
its affairs, including, but not limited to business methods, information
systems, financial data and strategic plans which are unique assets of the
Company (“Confidential Information”). Director covenants not to, either directly
or indirectly, in any manner, utilize or disclose to any person, firm,
corporation, association or other entity any Confidential
Information.
6. NON-COMPETE.
During
the Term and for a period of twelve (12) months following the Director’s removal
or resignation from the Board of Directors of the Company or any of its
Subsidiaries or Affiliates (the "Restricted Period"), the Director shall not,
directly or indirectly, (i) in any manner whatsoever engage in any capacity
with
any business competitive with the Company's current lines of business or any
business then engaged in by the Company, any of its Subsidiaries or any of
its
Affiliates (the "Company's Business") for the Director’s own benefit or for the
benefit of any person or entity other than the Company or any Subsidiary or
Affiliate; or (ii) have any interest as owner, sole proprietor, shareholder,
partner, lender, director, officer, manager, employee, consultant, agent or
otherwise in any business competitive with the Company's Business; provided,
however,
that
the Director may hold, directly or indirectly, solely as an investment, not
more
than one percent (1%) of the outstanding securities of any person or entity
which are listed on any national securities exchange or regularly traded in
the
over-the-counter market notwithstanding the fact that such person or entity
is
engaged in a business competitive with the Company's Business. In addition,
during the Restricted Period, the Director shall not develop any property for
use in the Company's Business on behalf of any person or entity other than
the
Company, its Subsidiaries and Affiliates.
7. TERMINATION.
With or
without cause, the Company and Director may each terminate this Agreement at
any
time upon ten (10) days written notice, and the Company shall be obligated
to
pay to Director the compensation and expenses due up to the date of the
termination. If the director voluntarily resigns prior to October 1st of any
year after the first year of this agreement, the Company shall be entitled
to
receive, upon written request by the Company, a prorated refund of the portion
of the Base Cash Compensation that relates to the period after the termination
date. Such written request must be submitted within ninety (90) days of the
termination date. Nothing contained herein or omitted herefrom shall prevent
the
shareholder(s) of the Company from removing Director with immediate effect
at
any time for any reason.
8. INDEMNIFICATION.
The
Company shall indemnify, defend and hold harmless Director, to the full extent
allowed by the law of the State of Nevada, and as provided by, or granted
pursuant to, any charter provision, bylaw provision, agreement (including,
without limitation, the Indemnification Agreement executed herewith), vote
of
stockholders or disinterested directors or otherwise, both as to action in
Director’s official capacity and as to action in another capacity while holding
such office. The Company and the Director are executing the Indemnification
Agreement in the form attached hereto as Exhibit A.
9. EFFECT
OF WAIVER.
The
waiver by either party of the breach of any provision of this Agreement shall
not operate as or be construed as a waiver of any subsequent breach
thereof.
10. NOTICE.
Any and
all notices referred to herein shall be sufficient if furnished in writing
at
the addresses specified on the signature page hereto or, if to the Company,
to
the Company’s address as specified in filings made by the Company with the U.S.
Securities and Exchange Commission and if by fax to 000.000.0000.
11. GOVERNING
LAW.
This
Agreement shall be interpreted in accordance with, and the rights of the parties
hereto shall be determined by, the laws of the State of Nevada without reference
to that state’s conflicts of laws principles.
12. ASSIGNMENT.
The
rights and benefits of the Company under this Agreement shall be transferable,
and all the covenants and agreements hereunder shall inure to the benefit of,
and be enforceable by or against, its successors and assigns. The duties and
obligations of the Director under this Agreement are personal and therefore
Director may not assign any right or duty under this Agreement without the
prior
written consent of the Company.
13. MISCELLANEOUS.
If any
provision of this Agreement shall be declared invalid or illegal, for any reason
whatsoever, then, notwithstanding such invalidity or illegality, the remaining
terms and provisions of the within Agreement shall remain in full force and
effect in the same manner as if the invalid or illegal provision had not been
contained herein.
14. ARTICLE
HEADINGS.
The
article headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
15. COUNTERPARTS.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one instrument. Facsimile execution and delivery
of
this Agreement is legal, valid and binding for all purposes.
16. ENTIRE
AGREEMENT. Except
as
provided elsewhere herein, this Agreement sets
forth the entire agreement of the parties with respect to
its
subject
matter and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any
officer, employee or representative of any party to this
Agreement with respect
to
such
subject matter.
IN
WITNESS WHEREOF, the parties hereto have caused this Independent Director’s
Contract to be duly executed and signed as of the day and year first above
written.
| WONDER AUTO TECHNOLOGY, INC. | ||
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| By: | /s/ Xxxxxxx Xxxx | |
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Name: Xxxxxxx Xxxx |
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| Title: CEO and President | ||
| INDEPENDENT DIRECTOR | ||
| |
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| By: | /s/ Xxx Xxxxx | |
|
Name: Xxx
Xxxxx
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