AGREEMENT
AGREEMENT
THIS
AGREEMENT ("Agreement") is entered into and is effective as of April 15, 2008,
by and between Jade Art Group, Inc., a Nevada corporation ("JADG") and Xxxxxxx
X. Xxxxxxx, an individual resident in the State of New York ("Xxxxxxx" or
“Director”).
Preliminary
Statement
JADG desires to retain Xx.
Xxxxxxx, and Xx. Xxxxxxx is willing to serve, as a member of the Board of
Directors of JADG on the terms and subject to the conditions set forth in this
agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
below, intending to be legally bound, JADG and Xx. Xxxxxxx hereby agree as
follows:
1. Appointment. Xx.
Xxxxxxx has agreed to serve as a member of the Board of Directors of JADG,
effective as of the date of his election to the Board by the current Members of
the Board of Directors (the “Election Date”).
Xx.
Xxxxxxx’x appointment to the Board will be announced to the public in a press
release. The timing and wording of such release shall be approved by
both JADG and Xx. Xxxxxxx, which shall not be unreasonably withheld or
delayed.
2. Compensation. For the
duties and services to be performed by him under this agreement, JADG will pay
to Xx. Xxxxxxx, and Xx. Xxxxxxx agrees to accept, the compensation described
below in this Section 2.
a.
Director’s Fees. JADG will pay Xx. Xxxxxxx a director's fee of
$40,000 per annum, payable in equal monthly installments commencing on the
Election Date. This fee represents a retainer for services rendered as a member
of its Board of Directors, and is in addition to any fees to which Xx. Xxxxxxx
may be entitled under guidelines and rules established by JADG from time to time
for compensating non-employee directors for serving on, and attending meetings
of, committees of its Board of Directors and the boards of directors of its
subsidiaries.
b.
Equity Component. In addition to the cash fee(s) described in subsection (a), on
the Election Date and subject to the provisions hereof JADG will grant Xx.
Xxxxxxx non-qualified options to purchase 100,000 shares of JADG common stock.
The exercise price of these non-qualified options will be the closing sales
price of a share of JADG common stock on the OTC Bulletin Board on the Election
Date. Options to purchase 33,333 shares may be exercised immediately;
options to purchase an additional 33,333 shares may be exercised commencing
April 15, 2009, and options to purchase the remaining 33,334 shares may be
exercised commencing April 15, 2010, provided that all outstanding and
unexercised options shall expire on the date that Xx. Xxxxxxx is no longer
serving as a member of the Board of Directors of JADG or otherwise engaged by
JADG to provide services to JADG. Subject to the foregoing provisions, the
options may be exercised until April 15, 2018, at which time any such options
that have not been exercised shall automatically expire.
3. Expenses. JADG will
reimburse Xx. Xxxxxxx for reasonable expenses incurred by him in furtherance of
his performance of duties hereunder, provided that such expenses are
substantiated in accordance with JADG policies applicable to members of its
Board of Directors.
4. Fringe and Medical
Benefits. Xx. Xxxxxxx may participate in any of JADG's medical, dental
and other benefit programs as are available to non-employee members of its
Board.
5. Confidential Treatment of
Information. Director shall not, either during or after
the term of this Agreement, directly or indirectly publish or disclose to any
third party any information pertaining in any way to the business of JADG, its
customers or suppliers, which is developed, acquired or derived from association
with JADG, unless JADG gives written authorization to do so. Such information
shall not be used apart from JADG business without written approval of JADG.
Such prohibition against disclosure to others shall not apply to information
after it is clearly disclosed to the public by JADG in writing.
6. Term and
Termination. The term of this Agreement will commence on the
Election Date and will remain in effect until Xx. Xxxxxxx is removed, resigns,
or is not reelected as a member of the Board in accordance with JADG’s bylaws.
JADG has no obligation to cause the nomination or recommend the election of Xx.
Xxxxxxx to the Board for any period of time in the future. Upon the termination
of Xx. Xxxxxxx'x tenure as a member of the Board, JADG will promptly pay to Xx.
Xxxxxxx, or to his estate if his service is terminated upon his death, all fees
accrued for services rendered as a member of the Board and committees thereof
and expense reimbursements due as of the date of termination.
7. Indemnification by
JADG. JADG shall indemnify Xx. Xxxxxxx, as a director of JADG,
to the maximum extent permitted under applicable Nevada law, against all
liabilities and expenses, including amounts paid in satisfaction of judgments,
in compromise, or as fines and penalties, and counsel fees, reasonably incurred
by Xx. Xxxxxxx in connection with the defense or disposition of any civil,
criminal, administrative or investigative action, suit or other proceeding,
whether civil or criminal, in which he may be involved or with which he may be
threatened, while an officer or director of JADG. Expenses (including reasonable
attorney’s fees) incurred by Xx. Xxxxxxx in defending any such action, suit or
other proceeding may be paid by JADG in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of him
to repay such amount if it shall be ultimately determined that he is not
entitled to be indemnified by JADG. The provisions hereof shall
survive expiration or termination of this Agreement for any reason whatsoever.
In the event of any conflict between the provisions hereof and the
indemnification provisions contained in JADG's articles of incorporation or
bylaws, or in any agreement between JADG and Xx. Xxxxxxx with respect to
indemnification, unless he has explicitly agreed otherwise, Xx. Xxxxxxx will be
given the benefit of the provisions more favorable to him.
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8. Liability Insurance.
JADG will maintain in effect at all times while Xx. Xxxxxxx continues to serve
as a member of the Board liability insurance provided by a recognized carrier
covering members of its Board with a face amount of no less than $5,000,000 and
deductibles of no more than $150,000.
9. Non-Exclusive.
Subject to the last sentence of this Section, nothing in this agreement will
prevent Xx. Xxxxxxx (1) from serving as an employee, officer or director of or
providing services to (directly or indirectly) any other company (an
“Engagement”), provided that such Engagement is consistent with Xx. Xxxxxxx'x
fiduciary duties to JADG (“Permitted Engagements”), (2) from serving on
voluntary, community service committees and boards, and (3) from owning shares
representing less than 5% of the outstanding equity securities of a company that
is a competitor of JADG (the “Competitor’s Equity”), in which event Xx. Xxxxxxx
shall notify JADG in writing regarding the Competitor’s Equity promptly after he
obtains the Competitor’s Equity. Xx. Xxxxxxx will comply with and be
bound by JADG's policies, procedures and practices applicable to members of its
Board of Directors from time to time in effect during the term of this
agreement. Director shall, during the term hereof, (i) advise
JADG prior to entering into any Engagement, and (ii) shall not enter into any
Engagement that is not a Permitted Engagement without the prior written approval
of JADG, which approval shall not be unreasonably withheld.
10. Representations, Warranties
and Covenants of Director. Xx. Xxxxxxx represents and warrants that his
performance of this agreement will not violate any applicable laws or
regulations or conflict with or breach any other agreement to which he is a
party or may be bound. Xx. Xxxxxxx has not, and will not during the term of this
agreement, enter into any oral or written agreement in conflict with any of the
provisions of this agreement. Xx. Xxxxxxx represents and warrants that he is not
bound by any agreements which prohibit or restrict him from: (a) competing with,
or in any way participating in a business that competes with, any former
employer or business of any former employer to the extent that Xx. Xxxxxxx'x
performance of his duties under this agreement would be deemed to constitute
such competition; (b) soliciting personnel of a former employer or business to
leave such former employer's employment or to leave such business; or (c)
soliciting customers, suppliers, financing sources or other entities having a
substantial relationship with a former employer or business. Xx. Xxxxxxx shall,
during the term of this Agreement, comply with all applicable listing
requirements, laws and regulations (collectively, the “Laws”) including but not
limited to those Laws applicable to his service as an independent member of the
Board of Directors of JADG, as determined by the Board of Directors under the
independence standards of NASDAQ.
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11. Representations and
Warranties of JADG. JADG has filed all reports required to be
filed by it under the Securities Act and the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), including pursuant to Section 13(a) or 15(d) thereof, since
January 1, 2007 (the foregoing materials being collectively referred to herein
as the “SEC
Reports”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Securities and
Exchange Commission (the “Commission”) promulgated thereunder, and none of the
SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of JADG
included in the SEC Reports complied in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of JADG and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.
There is no claim, action, suit,
proceeding, arbitration, reparation, investigation or hearing, pending or to
JADG’s knowledge, threatened, before any court or governmental, administrative
or other competent authority or private arbitration tribunal, which would likely
have a material adverse effect on the business of JADG; nor are there any facts
known to JADG which would likely be expected to give rise to a claim, action,
suit, proceeding, arbitration, investigation or hearing, which would likely have
a material adverse effect upon the business of JADG.
12. Indemnification by
Director. Director shall indemnify, defend and hold harmless JADG and its
affiliates, officers, directors, employees, agents and representatives
(collectively, “Indemnified Parties”) from and against all loss, liability,
claim, damage or expense (including costs of investigation and reasonable
attorney’s fees) incurred by such Indemnified Parties, to the extent
arising out of or relating to: (i) any breach of a representation, warranty,
covenant or agreement of Director under this Agreement; or (ii) any fault,
intentional misconduct or wrongful act of Director. The provisions hereof shall
survive expiration or termination of this Agreement for any reason
whatsoever.
13. Governing Law. This
agreement will be governed by, and construed in accordance with the laws of the
State of Delaware, without regard to its choice-of-law principles, and the
United States of America.
14. Notices. All notices
or other communications which are required or permitted hereunder will be in
writing and sufficient if delivered personally or sent by air courier or first
class certified or registered mail, return receipt requested and postage
prepaid, addressed as follows:
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If
to Xx. Xxxxxxx, to:
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000
Xxxxxxxxx Xxxxx Xxx 0X
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Xxx
Xxxx, XX 00000
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If
to JADG, to:
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1330
Ave. of the Xxxxxxxx, 00xx
Xxxxx
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Xxx
Xxxx, XX 00000
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Attention:
President
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with
a copy to:
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White
and Xxxxxxxx LLP
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0000
Xxx Xxxxxxx Xxxxx
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Xxxxxxxxxxxx,
XX 00000-0000
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Attention:
Chungsheng Lu
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or to
such other address as the party to whom notice is to be given may have furnished
to the other party in writing in accordance herewith. All notices and other
communications given to any party hereto in accordance with the provisions of
this agreement shall be deemed to have been given on the date of delivery if
personally delivered; on the business day after the date when sent if sent by
air courier; and on the third business day after the date when sent if sent by
mail, in each case addressed to such party as provided in this Section or in
accordance with the latest written direction from such party.
15. Entire Agreement.
This agreement constitutes the sole agreement of the parties and supersedes all
oral negotiations and prior writings, including any and all prior agreements
between Xx. Xxxxxxx and JADG, with respect to the subject matter
hereof.
16. Advice of Counsel.
EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT,
SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL
COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS
AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF
THE DRAFTING OR PREPARATION HEREOF.
17. Counterparts. This
agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.
18. Amendments. No
modification, waiver, amendment, discharge or change of this agreement shall be
valid unless the same is in writing and signed by the party against which the
enforcement of said modification, waiver, amendment, discharge or change is
sought.
19. Severability. If any
portion of any provision of this agreement, or the application of such provision
or any portion thereof to any person or circumstance shall be held invalid or
unenforceable, the remaining portions of such provision or portion of such
provisions of this agreement or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
effected thereby.
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The
parties, by signing below, agree to the terms and conditions set forth in this
agreement.
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Director
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Jade
Art Group, Inc.
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| /s/ Xxxxxxx X. Xxxxxxx |
By:
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/s/
Hua-Cai Song
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Xxxxxxx
X. Xxxxxxx
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Xxx-Xxx
Song, Chief Executive Officer
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