INDEPENDENT DIRECTOR AGREEMENT
CHINA
POWER EQUIPMENT, INC
THIS
AGREEMENT (the "Agreement")
is made as of the ___ day of ___________, 2010 and is by and between CHINA POWER
EQUIPMENT, INC., a Maryland corporation (hereinafter referred to as the "Company"),
and ______________ (hereinafter referred to as the "Director").
WHEREAS, it is essential to
the Company to retain and attract as directors the most capable persons
available to serve on the board of directors of the Company (the “Board”);
and
WHEREAS, the Company believes
that Director possesses the necessary qualifications and abilities to serve as a
director of the Company and to perform the functions and meet the Company’s
needs related to its Board; and
WHEREAS, the Board of the
Company desires to appoint the Director to serve as and perform the duties of an
independent director and the Director desires to be so appointed and to perform
the duties required of such position in accordance with the terms and conditions
of this Agreement;
NOW, THEREFORE, the parties
agree as follows:
AGREEMENT
In
consideration for the above recited promises and the mutual promises contained
herein, the adequacy and sufficiency of which are hereby acknowledged, the
Company and the Director hereby agree as follows:
1. DUTIES.
Director will serve as a director of the Company and perform all duties of a
director of the Company, including without limitation (1) attending
meetings of the Board, (2) serving on one or more committees of the Board
(each a “Committee”)
and attending meetings of each Committee of which Director is a member,
(3) using reasonable efforts to promote the business of the Company, and
(4) any other customary duties of a director 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 by the
Maryland Code, Corporations and Associations (the "Maryland
Code"). The Company currently intends to hold one in-person regular
meeting of the Board and each Committee each quarter, together with additional
meetings of the Board and Committees as may be required by the business and
affairs of the Company.
The
Director agrees to devote as much time as is necessary to perform completely the
duties of a 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 in accordance with the
general fiduciary duty of directors arising under the Maryland
Code.
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 and shall continue until the Director’s
removal or resignation.
3.
COMPENSATION. The Company will compensate the Director as
follows:
(i) The
Company shall pay the Director an annual retainer fee of RMB60,000.00 to be paid
arrears in equal installments on the last day of each quarter, but for partial
quarter the retainer fee paid shall be pro-rated for the number of days the
Director serves as director.
(ii) If
the Director is required to travel in order to attend meetings of the Board that
the Director attends in person, the Company shall reimburse the Director for
reasonable travel expenses.
4. EXPENSES.
In addition to the compensation provided in paragraph 3 hereof, the Company will
reimburse the Director for pre-approved reasonable business-related expenses
incurred in good faith in the performance of the 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 the Director each acknowledge that, in
order for the intents and purposes of this Agreement to be accomplished, the
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"). The 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 of this Agreement 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 two percent (2%) 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 may terminate this
Agreement at any time upon ten (10) days’ written notice and the Director may
terminate this Agreement at any time upon thirty (30) days’ written notice, and
the Company shall be obligated to pay to the Director the compensation and
expenses due up to the date of the termination. Nothing contained herein or
omitted here from shall prevent the shareholder(s) of the Company from removing
the Director with immediate effect at any time for any reason.
8.
AMENDMENT AND
WAIVER. No supplement, modification or amendment of this
Agreement will be binding unless executed in writing by both
parties. No waiver of any provision of this Agreement on any occasion
will be deemed to constitute or will constitute a waiver of that provision on
any other occasion or a waiver of any other provision of this
Agreement.
9. 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.
10. 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
New York.
11. 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 the Director may not assign any right or duty under this Agreement
without the prior written consent of the Company.
12.
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 this Agreement
shall remain in full force and effect in the same manner as if the invalid or
illegal provision had not been contained herein.
13. 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.
14.
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.
15. 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.
[Signature Page
Follows]
IN WITNESS WHEREOF, the
parties hereto have caused this Independent Director Agreement to be duly
executed and signed as of the day and year first above written.
CHINA
POWER EQUIPMENT, INC
By:
Name: Yongxing
Song
Title: Chief
Executive Officer
INDEPENDENT
DIRECTOR
[Name]
[Address]
