DIRECTOR AGREEMENT
EXHIBIT
10.1
This
DIRECTOR AGREEMENT is made as of this 29 day of June, 2007 (the "Agreement"),
by
and between FuQi International, Inc., a Delaware corporation (the "Company")
and
[______] (the “Director”).
WHEREAS,
the Company designs, develops, promotes and sells jewelry products in China
(the
“Business”);
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.
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.
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; although 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. Monetary
Remuneration.
(a)
Fees
and Compensation. During the Directorship Term the Director shall receive the
following compensation and benefits:
| — |
An
annual fee of U.S. $20,000
|
| — |
A
fee of U.S. $2,000 for each in-person meeting
attended
|
| — |
An
annual fee of U.S. $2,500 for serving on the Company’s Audit
Committee
|
| — |
An
annual fee of U.S. $2,000 for serving on the Company’s Compensation
Committee
|
The
Director's status during the Agreement 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)
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.
4. Equity
Arrangements.
Subject
to the Board’s approval, the Company shall grant the Director, on the effective
date of the Company’s proposed public offering (the “Offering”), under the
Company’s 2006 Equity Incentive Plan, a non-qualified ten-year stock option (the
"Option") to purchase 30,000 (Thirty Thousand) shares of common stock at an
exercise price per share equal to 100% of the Offering price with a vesting
schedule of one-half being vested upon the effective date of the Offering,
the
remaining one-half being vested in four equal quarterly installments thereafter,
the vesting predicate on Director’s continued service on the Board of Directors
at the date of vesting, and other terms pursuant to an option agreement
substantially in the form of agreement entered into by the Company and its
other
Board members (the "Option Agreement"). The Board will also consider the grant
of additional stock options each year after the first year that Director serves
on the Board of Directors.
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)
the
death of the Director ("Death");
(b)
the
termination of the Director from the position of member of the
Board;
(c)
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;
(d)
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.
Based
on the understanding that the Company is currently only engaged in the Business,
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 Noncompetition Term, 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.
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:
0/X.,
Xxxxx 0, Xxx Xxx Xxxxxxxxxx Xxxx
Xxx
Xxx
Road North
Shenzhen,
518019
People’s
Republic of China
with
a
copy to:
Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
00000
Xxxxx Xxxxxx Xxxx., 0xx
Xxxxx
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxx, Esq.
If
to the
Director:
____________________________
____________________________
____________________________
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:
__________________________________
Name:
Yu
Xxxx
Xxxxx
Title:
Chairman
& C.E.O
DIRECTOR
______________________________________
Name:
