f8k112208ex10i_chinavalves.htm


     

     

    
      Exhibit
10.1

       

      


      CHINA
VALVES TECHNOLOGY, INC.

      ENGLISH
TRANSLATION OF INDEPENDENT DIRECTOR AGREEMENT WITH PETER LI

      


      Due to
business requirement, China Valves Technology, Inc. (hereinafter referred to as
“Party A” or “Company”), intends to employ Yichen Li (a.k.a. Peter Li)
(hereinafter referred to as “Party B”) to be a director of Party A in accordance
with the State’s relevant laws, regulations and rules on labor
issues.  Based on the principles of equality, volunteer, and
consultation, both Parties enter into this Agreement to establish relations and
specify both Parties’ rights and obligations for mutual abidance.

      


      1.  Term

      


      This
Agreement becomes effective on November 22, 2008.  Unless one party
terminates the Agreement pursuant to the terms of this section, the term of the
Agreement is two years. If no party gives a thirty-day notice prior to the
termination of the Agreement, the Agreement will be automatically extended for
one more year. The Agreement is at will and either party may terminate the
Agreement with or without cause. In the event that either Party intends to
terminate this Agreement, it shall notify the other Party in writing or by email
thirty (30) days in advance.

      


      Given
that Party A’s investor, The Pinnacle Fund, has veto power to the appointment of
Party B, if The Pinnacle Fund does not agree to Party B’s appointment, the
Agreement will be void automatically.

      


      2.  Position:

      


      The
position of Party B is independent director of Party A’s board of directors and
the chairman of the Audit Committee.

      


      3.
Responsibilities:

      


      
        	
                1)  

              	
                Party
      B provides consulting services to Party A as independent director and
      chairman of the Audit Committee. Party B is not deemed as a full-time
      employee of Party A and thus does not have insurance and other benefits
      other than the salary and the
option.

              


      

      
        	
                2)  

              	
                Party
      B shall keep all the business activities and trade secret of Party A
      confidential and shall not disclose to any third parties without
      permission of Party A.

              


      

      
        	
                3)  

              	
                Party
      B agrees, during the contract term and within two (2) years after the
      expiration of the contract term, not to engage in any business which will
      compete with the business activities of Party A and not to join in any
      companies which compete with Party
A.

              


      

       

      4.  Remuneration:

      


      Monthly
salary: US $ 1,000 base salary

      Date of
payment: Party A will pay Party B the salaries for half year ($6,000) within one
week after the Agreement becomes effective. Party A will pay Party B on a
bi-yearly basis afterwards.

      Method of
payment for the remuneration: payment in US Dollar or in RMB according to the
foreign exchange ratio on the date when the payment is actually
made.

       

      5.  Stock
Options

      


      Considering
the actual work performance of Party B and upon approval of the Board of
Directors, within three month of Party B’s employment, Party A will grant Party
B stock options to purchase 45,000 shares of the Company’s common stock at the
exercise price of $4 per share. In a period of two years, Party B may exercise
33.336% of his options (or 15,000 shares) on the first anniversary of her
employment with the Company. Party B may exercise 8.333% of the remaining
options (or 3,750 shares) every three months after the first anniversary until
the options are fully exercised. The ceiling of the options should be the
above-mentioned percentages. All unexercised options shall be carried over to
the next exercise. Party A shall cancel all unexercised options after five years
since the issuance of the options.

      


      6.  Mediation
and Arbitration

      


      The
disputes arising from the performance of this Agreement shall be resolved first
through consultation.  In the event that the disputes can not be
resolved through consultation, the disputes can be resolved through mediation by
the Disputes Mediation Commission where Party A is located or through
arbitration by the Labor Disputes Arbitration Commission where Party A is
located within sixty (60) days after the disputes have arose.  If not
satisfied with the arbitration awards, either Party may institute a lawsuit with
the people’s court where Party A is located within fifteen (15) days after
receiving the arbitration awards.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      7.  Amendment

      


      Any
amendment to this Agreement shall not take into effect before the amendment is
signed and recognized in writing by both Parties.

      


      8.  Governing
Law

      


      This
Agreement shall be governed by the laws of the People’s Republic of
China.  During the contract term, in case of any discrepancy between
the articles of this Agreement and the provisions of the law, the latter shall
prevail.

      


      Because
Party A is an American public listing company, after conclusion of this
Agreement, Party A is obliged to file an 8-K report on hiring Party B to
SEC.  Party B shall also be obliged to provide Party A any materials
required for filing 8-K report.  Meanwhile, all the behaviors and
activities of Party B, as CFO of Party A, shall also be supervised and governed
by SEC.

      


      


      
        	
                Party
      A or Representative

                (Signature
      or Seal)

              	
                Party
      B or Representative

                (Signature
      or Seal)

              
	
                 

                Signature:
      /s/ Siping
      Fang                
      

                                  
      Siping Fang

                                 
       CEO, President and Chairman

              	
                 

                Signature:
      /s/ Peter
      Li         
      

                 

              
	
                 

                Date:
      November 22, 2008

              	
                 

                Date:
      November 22, 2008