Unassociated Document


    Exhibit
10.2

    


    SKYSTAR
BIO-PHARMACEUTICAL COMPANY

    Room
10601, Jiezuo Plaza

    No. 4,
Fenghui Road South

    Gaoxin
District, Xian Province

    People’s
Republic of China

    


    May 26,
2009

    


    Mr. Mark
D. Chen

    Suite
10-64

    #9
Jianguomenwai Avenue

    Beijing,
P.R. China 100600

    


    
      	
            	
              Re:

            	
              Director Offer
      Letter

            


    

    


    Dear Mr.
Chen:

    


    Skystar
Bio-Pharmaceutical Company, a Nevada corporation (the “Company”), is pleased to
offer you a director position on its Board of Directors (the
“Board”).  We are all very impressed with your credentials and we look
forward to your future success in this role.

    


    Should
you choose to accept this position as a member of the Board, this letter shall
constitute an agreement between you and the Company and contains all the terms
and conditions relating to the services you are to provide.

    


    1.           Term.  This agreement
shall be for the ensuing year, commencing on May 26, 2009 (the “Effective
Date”).  Your term as director shall continue subject to the
provisions in Section 8 below or until your successor is duly elected and
qualified.  The position shall be up for re-election each year at the
annual shareholder’s meeting and upon re-election, the terms and provisions of
this agreement shall remain in full force and effect.

    


    2.           Services.  You shall render
services as a member of the Board, as well as a member of the Board’s audit
committee in the capacities of the committee chairman and “audit committee
financial expert” as that term is defined under Item 407(d)(5)(ii) of Regulation
S-K, and as a member of the Board’s compensation committee (hereinafter your
“Duties”). During the term of this Agreement, you shall attend and participate
in such number of meetings of the Board and of the committees of which you are a
member as regularly or specially called in accordance with the terms of the
Company’s by-laws and/or the committee charters. You may attend and participate
at each such meeting, via teleconference, video conference or in person. You
shall consult with the other members of the Board and committees regularly and
as reasonably necessary via telephone, electronic mail or other reasonable forms
of correspondence.

    


    3.           Services
for Others.  You shall be free
to represent or perform services for other persons during the term of this
agreement.  However, you agree that you do not presently perform and
do not intend to perform, during the term of this agreement, similar Duties,
consulting or other services for companies whose businesses are or would be, in
any way, competitive with the Company (except for companies previously disclosed
by you to the Company in writing).  Should you propose to perform
similar Duties, consulting or other services for any such company, you agree to
notify the Company in writing in advance (specifying the name of the
organization for whom you propose to perform such services) and to provide
information to the Company sufficient to allow it to determine if the
performance of such services would conflict with areas of interest to the
Company.

    


    4.           Compensation.

    


    (a)           You
shall receive cash compensation of USD $14,000 per calendar year of service,
payable in accordance with the attached Schedule A, and
prorated for partial time periods.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)           Additionally,
you shall have the right to receive 2,778 shares of the Company’s common stock,
$0.001 par value, in the form of a restricted stock grant (the “Restricted
Stock”) at the commencement of your term hereof and at each commencement of your
re-elected terms thereafter. The Restricted Stock shall be “restricted” and
cannot be resold without their prior registration or compliance with the terms
of Rule 144 promulgated by the Act or an exemption from the Act.  The
number of shares of Restricted Stock is subject to adjustment in the case of any
stock split, reverse stock split, combination or similar events.

    


    Upon the filing of an election pursuant
to Section 83(b) of the Internal Revenue Code (the “Code”) with respect to such
grant of Restricted Stock, the Company will not reimburse you for any federal
and state taxes due as a result of such election.

    


    For each grant of Restricted Stock, you
shall not, directly or indirectly, prior to the first anniversary of its
issuance date: (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of, directly
or indirectly, any of the shares of such Restricted Stock or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of any of the shares of such Restricted
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of shares of such Restricted Stock, in cash or
otherwise.

    


    In connection with each grant of
Restricted Stock, you hereby represent and warrant to the Company, as of the
date hereof, that:

    


    A.           The
shares of such Restricted Stock will be acquired for investment for your own
account, not as a nominee or agent, and not with a view to the public resale or
distribution thereof within the meaning of the Securities Act of 1933, as
amended (the “Securities Act”), and you have no present intention of selling,
granting any participation in or otherwise distributing the same.

    


    B.           You
understand that the acquisition of the shares of such Restricted Stock involves
substantial risk. You have experience as an investor in securities of companies
and acknowledges that your are able to fend for yourself, can bear the economic
risk of your investment and has such knowledge and experience in financial or
business matters that you are capable of evaluating the merits and risks of your
investment and protecting your own interests in connection with this
investment.

    


    C.           You
are an "accredited investor" within the meaning of Regulation D of the
Securities Act.

    


    D.           You
understand that: (i) the shares of such Restricted Stock are characterized as
"restricted securities" under the Securities Act, inasmuch as they are being
acquired from the Company in a transaction not involving a public offering, and
(ii) under the Securities Act and applicable rules and regulations thereunder,
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. You are familiar with Rule 144 under the
Securities Act, as presently in effect, and understand the resale limitations
imposed thereby and by the Securities Act.

    


    (c)           The
Company agrees to reimburse all of your travel, hotel, car rental, meals and
other reasonable expenses relating to your attendance at meetings of the Board.
In addition, the Company agrees to reimburse you for reasonable expenses that
you incur in connection with the performance of your duties as a director of the
Company, provided that you shall seek the Company’s approval prior to the
incurrence of any such expenses exceeding $500.

    


    5.           D&O
Insurance Policy. During the
term under this Agreement, the Company shall include you as an insured
under an
officers and directors insurance policy with coverage not to exceed $1,000,000,
which the Company shall obtain within a reasonable period of time.

    


    6.           No
Assignment.  Because of the
personal nature of the services to be rendered by you, this agreement may not be
assigned by you without the prior written consent of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7.           Confidential
Information; Non-Disclosure.  In consideration
of your access to the premises of the Company and/or you access to certain
Confidential Information of the Company, in connection with your business
relationship with the Company, you hereby represent and agree as
follows:

    


    a.           Definition.  For purposes of
this agreement the term “Confidential Information” means:

    


    i.           Any
information which the Company possesses that has been created, discovered or
developed by or for the Company, and which has or could have commercial value or
utility in the business in which the Company is engaged; or

    


    ii.           Any
information which is related to the business of the Company and is generally not
known by non-Company personnel.

    


    iii.           By
way of illustration, but not limitation, Confidential Information includes trade
secrets and any information concerning products, processes, formulas, designs,
inventions (whether or not patentable or registrable under copyright or similar
laws, and whether or not reduced to practice), discoveries, concepts, ideas,
improvements, techniques, methods, research, development and test results,
specifications, data, know-how, software, formats, marketing plans, and
analyses, business plans and analyses, strategies, forecasts, customer and
supplier identities, characteristics and agreements.

    


    b.           Exclusions.  Notwithstanding
the foregoing, the term Confidential Information shall not include:

    


    i.           Any
information which becomes generally available to the public other than as a
result of a breach of the confidentiality portions of this agreement, or any
other agreement requiring confidentiality between the Company and
you;

    


    ii.           Information
received from a third party in rightful possession of such information who is
not restricted from disclosing such information; and

    


    iii.           Information
known by you prior to receipt of such information from the Company, which prior
knowledge can be documented.

    


    c.           Documents. You agree that, without the
express written consent of the Company, you will not remove from the Company's
premises, any notes, formulas, programs, data, records, machines or any other
documents or items which in any manner contain or constitute Confidential
Information, nor will you make reproductions or copies of same.  In
the event you receive any such documents or items by personal delivery from any
duly designated or authorized personnel of the Company, you shall be deemed to
have received the express written consent of the Company.  In the
event that you receive any such documents or items, other than through personal
delivery as described in the preceding sentence, you agree to inform the Company
promptly of your possession of such documents or items.  You shall
promptly return any such documents or items, along with any reproductions or
copies to the Company upon the Company's demand, upon termination of this
agreement, or upon your termination or Resignation, as defined in Section 8
herein.

    


    d.           No
Disclosure.  You agree that
you will hold in trust and confidence all Confidential Information and will not
disclose to others, directly or indirectly, any Confidential Information or
anything relating to such information without the prior written consent of the
Company, except as maybe necessary in the course of your business relationship
with the Company.  You further agree that you will not use any
Confidential Information without the prior written consent of the Company,
except as may be necessary in the course of your business relationship with the
Company, and that the provisions of this paragraph (d) shall survive termination
of this agreement.

    


    8.            Termination
and Resignation.  Your membership
on the Company’s Board may be terminated for any or no reason at a meeting
called expressly for that purpose by a vote of the stockholders holding at least
two-thirds of the shares of the Company’s issued and outstanding shares entitled
to vote.  You may also terminate your membership on the Board for any
or no reason by delivering your written notice of resignation to the Company
(“Resignation”), and such Resignation shall be effective upon its acceptance by
the Board, provided, however, that if the Board has not acted on such written
notice within ten days from its date of delivery, then your Resignation shall
upon the tenth day be deemed accepted by the Board.  Upon the
effective date of the termination or Resignation, your right to compensation
hereunder will terminate subject to the Company's obligations to pay you any
cash compensation (or equivalent value in Company common stock shares) that you
have already earned and to reimburse you for approved expenses already incurred
in connection with your performance of your Duties as of the effective date of
such termination or Resignation.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    9.           Governing
Law.  All questions
with respect to the construction and/or enforcement of this agreement, and the
rights and obligations of the parties hereunder, shall be determined in
accordance with the law of the State of Nevada applicable to agreements made and
to be performed entirely in the State of Nevada.

    


    10.           Entire
Agreement; Amendment; Waiver; Counterparts.  This agreement
expresses the entire understanding with respect to the subject matter hereof and
supersedes and terminates any prior oral or written agreements with respect to
the subject matter hereof.  Any term of this agreement may be amended
and observance of any term of this agreement may be waived only with the written
consent of the parties hereto.  Waiver of any term or condition of
this agreement by any party shall not be construed as a waiver of any subsequent
breach or failure of the same term or condition or waiver of any other term or
condition of this agreement.  The failure of any party at any time to
require performance by any other party of any provision of this agreement shall
not affect the right of any such party to require future performance of such
provision or any other provision of agreement.  This agreement may be
executed in separate counterparts each of which will be an original and all of
which taken together will constitute one and the same agreement, and may be
executed using facsimiles of signatures, and a facsimile of a signature shall be
deemed to be the same, and equally enforceable, as an original of such
signature.

    


    [Remainder of Page Left Blank
Intentionally]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
Agreement has been executed and delivered by the undersigned and is made
effective as of the date set first set forth above.

    


    
      


      
        	 
      	
                Sincerely,

              	 
      
	 
      	 
      	 
      	 
      
	 
      	
                SKYSTAR
      BIO-PHARMACEUTICAL COMPANY

              	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	  
      	 
      
	 
      	 
      	
                Weibing
      Lu

              	 
      
	 
      	 
      	
                Chief
      Executive Officer

              	 
      


      

      


      


      


      
        	
                AGREED
      AND ACCEPTED:

              	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                  
      

              	 
      
	
                Mark
      D. Chen