DIRECTOR AGREEMENT
This
DIRECTOR AGREEMENT is made as of this 3rd
day of
October, 2008 (the "Agreement"), by and between China Advanced Construction
Materials Group, Inc., a Delaware corporation (the "Company") and Xxxxxx
Xxxxxxx
(the “Director”).
WHEREAS,
the Company wishes to appoint the Director as a non-executive member of the
Board of Directors of the Company and enter into an agreement with the Director
with respect to such appointment; and
WHEREAS,
the Director wishes to accept such appointment and to serve the Company on
the
terms set forth herein, and in accordance with, the provisions of this
Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1. Position.
Subject to the terms and provisions of this Agreement, the Company shall
cause
the Director to be appointed as non-executive member of the Board of Directors
(the “Board”) to fill an existing but now vacant directorship and the Director
hereby agrees to serve the Company in that position upon the terms and
conditions hereinafter set forth, provided, however, that the Director's
continued service on the Board after the initial term on the Board shall
be
subject to any necessary approval by the Company's stockholders. This Agreement
is subject to the satisfactory completion of a third party background check
within sixty (60) days of the date hereof.
2. Duties.
During the Directorship Term (as defined in Section 5 hereof), the Director
shall serve as a member of the Board, and the Director shall make reasonable
business efforts to attend all Board meetings, serve on appropriate
subcommittees as reasonably requested by the Board, make himself available
to
the Company at mutually convenient times and places, attend external meetings
and presentations, as appropriate and convenient, and perform such duties,
services and responsibilities and have the authority commensurate to such
position.
Commensurate
with his other duties on the Board, the Director shall assist the Company
by
presenting and participating in roadshows. The Director shall also facilitate
and maintain all communications with the investor relations firm engaged
by the
Company until such time as the Company employs a full time Chief Financial
Officer.
The
Director will use his best efforts to promote the interests of the Company.
The
Company recognizes that the Director (i) is a full-time executive employee
of
another entity and that his responsibilities to such entity must have priority
and (ii) sits on the Board of Directors of other entities. Notwithstanding
same,
the Director will use reasonable business efforts to coordinate his respective
commitments so as to fulfill his obligations to the Company and, in any event,
will fulfill his legal obligations as a director. Other than as set forth
above,
the Director will not, without the prior written approval of the Board, engage
in any other business activity which could materially interfere with the
performance of his duties, services and responsibilities hereunder or which
is
in violation of the reasonable policies established from time to time by
the
Company, provided that the foregoing shall in no way limit his activities
on
behalf of (i) his current employer and its affiliates or (ii) the Board of
Directors of those entities on which he sits.
3. Board
Committees. The
Director hereby agrees to serve on a to be determined Committee of the Board
at
the
Company’s discretion and to perform all of the duties, services and
responsibilities necessary thereunder.
4. Monetary
Remuneration.
(a) Fees
and
Compensation. During the Directorship Term the Director shall receive the
following compensation and benefits:
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A
monthly fee of U.S $3,500
|
The
Director's status during the Directorship Term shall be that of an independent
contractor and not, for any purpose, that of an employee or agent with authority
to bind the Company in any respect. All payments and other consideration
made or
provided to the Director under Sections 3 and 4 shall be made or provided
without withholding or deduction of any kind, and the Director shall assume
sole
responsibility for discharging, all tax or other obligations associated
therewith.
(b) Stock
Option Agreement.
During the Directorship Term, the Director and the Company shall enter into
a
Stock Option Agreement pursuant to the Company’s Equity Incentive Plan to
purchase a total of 50,000 shares of the Company’s common stock at an exercise
price of $2.90 (the “Options”). The Options shall vest according to the
following schedule:
| · |
12,500
shares of the Company’s common stock shall vest and become exercisable
three (3) months from the date hereof (the “Three Month Vesting Date”)
provided that the Director maintains a position on the Board as
of the
Three Month Vesting Date;
|
| · |
an
additional 12,500 shares of the Company’s common stock shall vest and
become exercisable six (6) months from the date hereof (the “Six Month
Vesting Date”) provided that the Director maintains a position on the
Board as of the Six Month Vesting
Date;
|
| · |
an
additional 12,500 shares of the Company’s common stock shall vest and
become exercisable nine (9) months from the date hereof (the “Nine Month
Vesting Date”) provided that the Director maintains a position on the
Board as of the Nine Month Vesting
Date;
|
| · |
an
additional 12,500 shares of the Company’s common stock shall vest and
become exercisable twelve (12) months from the date hereof (the
“Twelve
Month Vesting Date”) provided that the Director maintains a position on
the Board as of the Twelve Month Vesting
Date;
|
(c) Expense
Reimbursements.
During the Directorship Term, the Company shall reimburse the Director for
all
reasonable out-of-pocket expenses incurred by the Director in attending any
in-person meetings, provided that the Director complies with the generally
applicable policies, practices and procedures of the Company for submission
of
expense reports, receipts or similar documentation of such expenses. Any
reimbursements for allocated expenses (as compared to out-of-pocket expenses
of
the Director) must be approved in advance by the Company.
5. Directorship
Term.
The "Directorship Term", as used in this Agreement, shall mean the period
commencing on the date hereof and terminating on the earliest of the following
to occur:
(a) one
(1)
year from the date hereof, subject to a one (1) year renewal term upon
re-election by a majority of the shareholders of the Company;
(b) the
death of the Director
("Death");
(c) the
termination of the
Director from the position of member of the Board by the mutual agreement
of the
Company and the Director;
(d) the
removal of the
Director from the Board by the shareholders of the Company;
(e) the
resignation by the
Director from the Board if after the date hereof, the Chief Executive Officer
of
his current employer determines that the Director's continued service on
the
Board conflicts with his fiduciary obligations to his current employer (a
"Fiduciary Resignation"); and
(f) the
resignation by the
Director from the Board if the board of directors or the Chief Executive
Officer
of his current employer requires the Director to resign and such resignation
is
not a Fiduciary Resignation.
6. Director's
Representation and Acknowledgment.
The Director represents to the Company that his execution and performance
of
this Agreement shall not be in violation of any agreement or obligation (whether
or not written) that he may have with or to any person or entity, including
without limitation, any prior employer. The Director hereby acknowledges
and
agrees that this Agreement (and any other agreement or obligation referred
to
herein) shall be an obligation solely of the Company, and the Director shall
have no recourse whatsoever against any stockholder of the Company or any
of
their respective affiliates with regard to this Agreement.
7. Director
Covenants.
(a) Unauthorized
Disclosure.
The Director agrees and understands that in the Director's position with
the
Company, the Director has been and will be exposed to and receive information
relating to the confidential affairs of the Company, including but not limited
to technical information, business and marketing plans, strategies, customer
information, other information concerning the Company's products, promotions,
development, financing, expansion plans, business policies and practices,
and
other forms of information considered by the Company to be confidential and
in
the nature of trade secrets. The Director agrees that during the Directorship
Term and thereafter, the Director will keep such information confidential
and
will not disclose such information, either directly or indirectly, to any
third
person or entity without the prior written consent of the Company; provided,
however, that (i) the Director shall have no such obligation to the extent
such
information is or becomes publicly known or generally known in the Company's
industry other than as a result of the Director's breach of his obligations
hereunder and (ii) the Director may, after giving prior notice to the Company
to
the extent practicable under the circumstances, disclose such information
to the
extent required by applicable laws or governmental regulations or judicial or
regulatory process. This confidentiality covenant has no temporal, geographical
or territorial restriction. Upon termination of the Directorship Term, the
Director will promptly return to the Company all property, keys, notes,
memoranda, writings, lists, files, reports, customer lists, correspondence,
tapes, disks, cards, surveys, maps, logs, machines, technical data or any
other
tangible product or document which has been produced by, received by or
otherwise submitted to the Director in the course or otherwise as a result
of
the Director's position with the Company during or prior to the Directorship
Term, provided that, the Company shall retain such materials and make them
available to the Director if requested by him in connection with any litigation
against the Director under circumstances in which (i) the Director demonstrates
to the reasonable satisfaction of the Company that the materials are necessary
to his defense in the litigation, and (ii) the confidentiality of the materials
is preserved to the reasonable satisfaction of the Company.
(b) Non-Solicitation.
During
the Directorship Term and for a period of three (3) years thereafter, the
Director shall not interfere with the Company's relationship with, or endeavor
to entice away from the Company, any person who, on the date of the termination
of the Directorship Term, was an employee or customer of the Company or
otherwise had a material business relationship with the Company.
(c) Remedies.
The Director
agrees that any breach of the terms of this Section 7 would result in
irreparable injury and damage to the Company for which the Company would
have no
adequate remedy at law; the Director therefore also agrees that in the event
of
said breach or any threat of breach, the Company shall be entitled to an
immediate injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by the Director and/or any and
all
entities acting for and/or with the Director, without having to prove damages,
in addition to any other remedies to which the Company may be entitled at
law or
in equity. The terms of this paragraph shall not prevent the Company from
pursuing any other available remedies for any breach or threatened breach
hereof, including but not limited to the recovery of damages from the Director.
The Director acknowledges that the Company would not have entered into this
Agreement had the Director not agreed to the provisions of this Section
7.
The
provisions of this Section 7 shall survive any termination of the Directorship
Term, and the existence of any claim or cause of action by the Director against
the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants and
agreements of this Section 7.
8. Indemnification.
The Company agrees to indemnify the Director for his activities as a director
of
the Company to the fullest extent permitted by law, and to cover the Director
under any directors and officers liability insurance obtained by the Company.
Further, the Company and the Director agree to enter into an indemnification
agreement substantially in the form of agreement entered into by the Company
and
its other Board members.
9. Non-Waiver
of Rights.
The failure to enforce at any time the provisions of this Agreement or to
require at any time performance by the other party of any of the provisions
hereof shall in no way be construed to be a waiver of such provisions or
to
affect either the validity of this Agreement or any part hereof, or the right
of
either party to enforce each and every provision in accordance with its terms.
No waiver by either party hereto of any breach by the other party hereto
of any
provision of this Agreement to be performed by such other party shall be
deemed
a waiver of similar or dissimilar provisions at that time or at any prior
or
subsequent time.
10. Notices.
Every notice relating to this Agreement shall be in writing and shall be
given
by personal delivery or by registered or certified mail, postage prepaid,
return
receipt requested; to:
If
to the
Company:
Xxxxx
Xxxxx, 0 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx
Xxxxxxxx, Xxxxxxx 100080 PRC
with
a
copy to:
Xxxxxx
& Jaclin, LLP
000
Xxxxx
0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
If
to the
Director:
Xxxxxx
Xxxxxxx
Xxxxx
00
X Xxxxx 0
Xxxx
Xxxxxx Xxxxxxxx Xxxx 2
Tai
Xxx
Xxxx, Kowloon, Hong Kong
Either
of
the parties hereto may change their address for purposes of notice hereunder
by
giving notice in writing to such other party pursuant to this Section
10.
11. Binding
Effect/Assignment.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, personal representatives, estates,
successors (including, without limitation, by way of merger) and assigns.
Notwithstanding the provisions of the immediately preceding sentence, neither
the Director nor the Company shall assign all or any portion of this Agreement
without the prior written consent of the other party.
12. Entire
Agreement.
This Agreement (together with the other agreements referred to herein) sets
forth the entire understanding of the parties hereto with respect to the
subject
matter hereof and supersedes all prior agreements, written or oral, between
them
as to such subject matter.
13. Severability.
If any provision of this Agreement, or any application thereof to any
circumstances, is invalid, in whole or in part, such provision or application
shall to that extent be severable and shall not affect other provisions or
applications of this Agreement.
14. Governing
Law.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware, without reference to the principles
of
conflict of laws. All actions and proceedings arising out of or relating
to this
Agreement shall be heard and determined in any Delaware state or federal
court
and the parties hereto hereby consent to the jurisdiction of such courts
in any
such action or proceeding; provided, however, that neither party shall commence
any such action or proceeding unless prior thereto the parties have in good
faith attempted to resolve the claim, dispute or cause of action which is
the
subject of such action or proceeding through mediation by an independent
third
party.
15. Legal
Fees.
The parties hereto agree that the non-prevailing party in any dispute,
claim, action or proceeding between the parties hereto arising out of or
relating to the terms and conditions of this Agreement or any provision thereof
(a "Dispute"), shall reimburse the prevailing party for reasonable attorney's
fees and expenses incurred by the prevailing party in connection with such
Dispute; provided, however, that the Director shall only be required to
reimburse the Company for its fees and expenses incurred in connection with
a
Dispute, if the Director's position in such Dispute was found by the court,
arbitrator or other person or entity presiding over such Dispute to be frivolous
or advanced not in good faith.
16. Modifications.
Neither this Agreement nor any provision hereof may be modified, altered,
amended or waived except by an instrument in writing duly signed by the party
to
be charged.
17. Tense
and Headings.
Whenever any words used herein are in the singular form, they shall be construed
as though they were also used in the plural form in all cases where they
would
so apply. The headings contained herein are solely for the purposes of
reference, are not part of this Agreement and shall not in any way affect
the
meaning or interpretation of this Agreement.
18. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall
be deemed to be an original but all of which together shall constitute one
and
the same instrument.
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of this page intentionally left blank)
IN
WITNESS WHEREOF, the Company has caused this Director Agreement to be executed
by authority of its Board of Directors, and the Director has hereunto set
his
hand, on the day and year first above written.
By: /s/
Xxxxxx Xxx
Name: Xxxxxx
Xxx
Title: Chief
Executive Officer
DIRECTOR
/s/
Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
