OUTSIDE DIRECTOR AGREEMENT
Exhibit
10.1
This
Outside Director Agreement (this “Agreement”) is
entered into effective as of August 1, 2010 (the “Effective Date”) by
and between American Dairy, Inc., a Utah corporation (the “Company”), and Xxxx
Xxxx (the “Outside
Director”).
The
parties hereto agree as follows:
1. Services. The Outside
Director agrees to service as a director on the Company’s Board of Directors
(the “Board”),
as the Chair of the
Audit Committee of the Board and as a member of the Compensation and the
Nominating/Corporate Governance Committees of the Board, and in such
capacities to collaborate and provide advice and assistance to the Company as is
mutually agreed by the parties (collectively, the “Services”).
2. Compensation. In consideration
for the Services, the Company agrees to pay the Outside Director three thousand
United States dollars ($3,000) per month, net of any applicable withholdings,
payable upon completion of each monthly period. In addition, in
consideration for the Services, subject to approval by the Compensation
Committee of the Board, the Company will issue to the Outside Director an option
to purchase 12,000 shares of the Company’s Common Stock pursuant to the
Company’s 2009 Stock Incentive Plan, with an exercise price per share equal to
the fair market value at the time of grant and vesting in four equal amounts on
each three-month anniversary of the Effective Date until all such shares are
fully vested (provided the Outside Director continues to provide the Services
each such vesting date), as provided in this Agreement and as specified in a
stock option agreement between the Company and the Outside
Director. The parties hereto acknowledge and agree that all
compensation paid by the Company to the Outside Director relates solely to the
Outside Director’s Services, and not pursuant to any separate consulting or
other relationship with the Company.
3. Expenses. The Company shall
reimburse the Outside Director for reasonable travel and related expenses
incurred in the course of performing the Services; provided, however, that any
expenses in excess of $100 shall be approved in advance by the
Company.
4. Term and
Termination. This Agreement
shall have no term and may be terminated (a) by either party for any reason upon
five (5) days prior written notice without further obligation or liability, or
(b) by the Company immediately upon the Outside Director’s breach of any
material provision of this Agreement.
5. No
Employment; Independence. With respect to
the Services, the Outside Director’s relationship with the Company will be that
of an independent contractor and not that of an employee. The Outside
Director will not be eligible for any employee benefits, nor will the Company
make deductions from payments made to the Outside Director for employment or
income taxes, all of which will be the Outside Director’s
responsibility. The Outside Director will have no authority to enter
into contracts that bind the Company or create obligations on the part of the
Company (except to the extent that the Outside Director’s actions as part of the
Board or Board committee create obligations on the part of the Company) without
the prior written authorization of the Company. It is the intent of
the parties hereto that the Outside Director (a) qualify as an “independent
director” of the Board in accordance with NYSE Rule 303A.02 and the provisions
of the Board’s Corporate Governance Guidelines, and (b) with respect to the
Outside Director’s service on the Audit Committee of the Board, satisfy the
independence requirements of Rule 10A-3(b)(1).
6. Nondisclosure
of Confidential Information.
(a) Agreement Not to
Disclose. The Outside Director agrees not to use any
Confidential Information (as defined below) for the Outside Director’s own use
or for any purpose other than to carry out discussions concerning, and the
undertaking of, the Services. The Outside Director shall not disclose
any Confidential Information to third parties outside the Company. The Outside Director agrees
to take all commercially reasonable measures to protect the secrecy of and avoid
disclosure by the Outside Director of Confidential Information in order to
prevent it from falling into the public domain or the possession of persons
other than those persons authorized under this Agreement to have any such
information. The Outside Director further agrees to notify the
Company in writing of any actual or suspected misuse, misappropriation or
unauthorized disclosure of Confidential Information of which the Outside
Director may become consciously aware. The Outside Director shall
follow the Company’s policies and procedures regarding xxxxxxx xxxxxxx and the
disclosure and use of material nonpublic information.
(b) “Confidential
Information” means any information of the Company, technical data of the
Company or know-how of the Company (whether disclosed before or after the
Effective Date), including, but not limited to, information relating to business
and product or service plans, financial projections, customer lists, business
forecasts, sales and merchandising, human resources, patents, patent
applications, computer programs, computer code, software source documents,
software design and architecture, testing procedures, product requirements and
specifications, research, inventions, processes, designs, drawings, engineering,
marketing or finance, in each case that is marked as confidential or proprietary
or which information would, under the circumstances, appear to a reasonable
person to be confidential or proprietary. “Confidential Information”
does not include information, technical data or know-how of the Company that
becomes generally publicly available, not as a direct or indirect result of any
improper action or inaction of the Outside Director.
(c) Exceptions. Notwithstanding
the foregoing, the Outside Director shall have no liability hereunder to the
Company with regard to any Confidential Information that:
(i) is
disclosed with the prior written approval of the Company;
(ii) is
disclosed pursuant to the order or requirement of a court, administrative
agency, or other governmental body; provided, however, that the Outside Director
shall provide prompt notice of such court order or requirement to the Company to
enable the Company or its appropriate subsidiary to seek a protective order or
otherwise prevent or restrict such disclosure; or
(iii) is
disclosed by the Outside Director to legal counsel of the Company, of the Board,
of any committee of the Board, or of the Outside Director, in connection with
seeking legal advice regarding compliance with law or regulation or fulfillment
of the Outside Director’s duties as a Director of the Company.
7. No
Duplication; Return of Materials. The Outside
Director agrees, except as otherwise expressly authorized by the Company, not to
make any copies or duplicates of any Confidential Information. Any
materials or documents that have been furnished by the Company to the Outside
Director in connection with the Services shall be promptly returned by the
Outside Director to the Company, accompanied by all copies of such
documentation, within ten days of (a) the termination of the Services, or (b)
the written request of the Company, except that the Outside Director may keep
one copy of all meeting minutes and consents of the Board and of all Board
committees of which the Outside Director was a member covering the period during
which the Outside Director was on the Board.
8. No Rights
Granted. Nothing in this
Agreement shall be construed as granting any rights under any patent, copyright
or other intellectual property right of the Company, nor shall this Agreement
grant the Outside Director any rights in or to the Confidential Information,
except the limited right to use the Confidential Information in connection with
the Services.
9. No
Conflicts. The Outside
Director represents that the Outside Director’s compliance with the terms of
this Agreement and provision of the Services hereunder will not violate any duty
which the Outside Director may have to any other person or entity (such as a
present or former employer), including obligations concerning providing services
to others, confidentiality of proprietary information and assignment of
inventions, ideas, patents or copyrights, and the Outside Director agrees that
the Outside Director will not do anything in the performance of Services
hereunder that would violate any such duty. In addition, the Outside
Director agrees that, during the term of this Agreement, prior to performing any
services for or otherwise participating in a company developing or
commercializing services, methods or products that may be competitive with the
Company, the Outside Director shall first notify the Company in
writing. It is understood that, in such event, the Company will
review whether the Outside Director’s activities are consistent with the Outside
Director remaining a member of the Board.
10. Miscellaneous. Any term of this
Agreement may be amended or waived only with the written consent of the parties
hereto. This Agreement, together with the stock option agreement and
related documents contemplated in Section 2, constitutes the entire agreement of
the parties and supersedes all prior agreements and negotiations, oral or
written, with respect to the subject matter hereof or thereof. Any
notice required or permitted by this Agreement shall be in writing and delivered
by certified mail, return receipt requested, personally delivery, any form of
private or governmental express mail or delivery service providing receipted
delivery, or facsimile or other electronic transmission, and shall be deemed
sufficient upon the earlier of actual receipt, the date shown on a conformation
of facsimile or other electronic transmission, the date reflected on a signed
delivery receipt, or two (2) business days following tender of delivery or
dispatch by express mail or delivery service, if such notice is addressed to the
party to be notified at such party’s address or facsimile number as set forth
below (or as subsequently modified by written notice). If any
provision of this Agreement is held by a court of law to be illegal, invalid or
unenforceable, that provision shall be deemed amended to achieve as nearly as
possible the same economic effect as the original provision, and the legality,
validity and enforceability of the remaining provisions of this Agreement shall
not be affected or impaired thereby. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Utah, without giving effect to the principles of conflict of
laws. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument. Execution and delivery of this Agreement by
facsimile or other electronic transmission shall be deemed for all purposes to
be due execution and delivery.
[Signature
page follows]
The
parties have executed this Agreement as of the date first written
above.
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AMERICAN
DAIRY, INC.
By: /s/ Leng
You-Bin
Leng
You-Bin
Chief
Executive Officer and President
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Address: Star
City International Building,
10
Jiuxianqiao Road, X-00xx Xxxxx
Xxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx, 000000
Facsimile: 86 10
64311050
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XXXX
XXXX
s/ Xxxx
Xxxx
Signature
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Address:
Facsimile:
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[Signature
page to Outside Director Agreement]
