Document:

f8k120111ex10ii_chinagrowth.htm

Exhibit 10.2

 

AMENDMENT NO. 2 TO

 

HOLDBACK ESCROW AGREEMENT

 

This AMENDMENT NO. 2 TO HOLDBACK ESCROW AGREEMENT (this “Second Amendment”) dated as of December 1, 2011 (the “Effective Date”) is entered into by and among China Growth Corporation, a Cayman Island corporation (the “Company”), Anslow & Jaclin, LLP (the “Escrow Agent”) and Access America Investments, LLC hereto (the “Investor Representative”).

 

Recitals

 

WHEREAS, the Company, the Escrow Agent and the Investor Representative are parties to that certain Holdback Escrow Agreement dated as of December 15, 2010 (the “Original Agreement”), as amended by that certain Amendment No. 1 to the Original Agreement dated as of May 20, 2011 (the “First Amendment” and, together with the Original Agreement, the “Amended Agreement”);

 

WHEREAS, pursuant to Section 4.2 of the Amended Agreement the Company agreed that $1,500,000 of the proceeds of the Offering (the “Escrow Amount”) be held in the Escrow Account until a Qualified CFO has been appointed whereupon the Investor Representative shall execute and deliver to the Escrow Agent written instructions to release the Chief Financial Officer Holdback to the Company; provided, however that the Investor Representative may in its sole discretion authorize the Escrow Agent in writing to disburse a portion of the Chief Financial Officer Holdback, not to exceed $750,000 in the aggregate, to the Company (a “Good Faith Disbursement”);

 

WHEREAS, in connection with the First Amendment, $750,000 of the Chief Financial Officer Holdback was disbursed as a Good Faith Disbursement pursuant to the written authorization of the Investor Representative;

 

WHEREAS, as of the date of this Second Amendment, the remaining balance of the Chief Financial Officer Holdback is $750,000;

 

WHEREAS, notwithstanding Section 4.2 of the Amended Agreement, the Parties desire to further amend the Amended Agreement to provide for a series of disbursements from the Chief Financial Officer Holdback to the Company of $100,000 commencing on December 1, 2011 and continuing on the first day of each successive month thereafter until the remaining balance of the Chief Financial Officer Holdback is disbursed to the Company;

 

WHEREAS, on the date hereof, the Company and the Lead Investor (as defined in the Subscription Agreement) have entered into that certain Second Amendment to Subscription Agreement; and

 

WHEREAS, an amendment of the Amended Agreement requires the approval of the Company, the Escrow Agent and the Investor Representative.

 

NOW, THEREFORE, in consideration of the foregoing, and of the mutual representations, warranties, covenants, and agreements herein contained, the parties hereto agree as follows:

 

  

  

  

 

Agreement

 

Section 1. Defined Terms. Unless otherwise indicated herein, all terms which are capitalized but are not otherwise defined herein shall have the meaning ascribed to them in the Amended Agreement.

 

Section 2. Amendment to Amended Agreement.  Section 4.2 of the Amended Agreement is hereby amended and restated in its entirety as follows:

 

“4.2           Pursuant to Section 5.5 of the Subscription Agreement, during the Nomination Period, the Company shall employ an English-speaking Chief Financial Officer who shall have experience with financial reporting companies under the Sarbanes-Oxley Act of 2002 and other federal or state securities laws and shall also meet the approval, which shall not be unreasonably withheld, and requirements of the Investor Representative (a “Qualified CFO”). To secure the hiring of a Qualified CFO, the Chief Financial Officer Holdback shall be held in the Escrow Account until a Qualified CFO has been appointed.  Notwithstanding the foregoing: (i) the Investor Representative may in its sole discretion authorize the Escrow Agent in writing (a “Good Faith Disbursement Notice”) to disburse a portion of the Chief Financial Officer Holdback, such portion not to exceed $750,000 in the aggregate, to the Company (a “Good Faith Disbursement”); and (ii) the Company and the Investor Representative agree that, commencing on December 1, 2011 and on the first day of each successive month thereafter (each, a “Monthly Disbursement Date”), the Escrow Agent shall cause to be disbursed $100,000 (the “Disbursement Amount”) of the Chief Financial Officer Holdback from the Escrow Account to the Company (each, a “Monthly Disbursement”) until all of the Chief Financial Officer Holdback is disbursed to the Company; provided, however, that, if prior to giving effect to a Monthly Disbursement, the remaining amount of the Chief Financial Holdback is less than $100,000 (a “Disbursement Shortfall”), the Disbursement Amount with respect to such Monthly Disbursement shall be equal to the amount of such Disbursement Shortfall.  Any portion of the Chief Financial Officer Holdback not disbursed pursuant to a Good Faith Disbursement or a Monthly Disbursement shall continue to be held in the Escrow Account in accordance with the terms of this Agreement.”

 

Section 3. Ratifications; Inconsistent Provisions. Except as otherwise expressly provided herein, the Amended Agreement, is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the Effective Date: (i) all references in the Amended Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or words of like import referring to the Amended Agreement shall mean the Amended Agreement as amended by this Second Amendment and  (ii) all references in the other Transaction Documents, to “the Holdback Escrow Agreement”, “the Holdback Escrow Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Amended Agreement shall mean the Amended Agreement as amended by this Second Amendment.  Notwithstanding the foregoing to the contrary, to the extent that there is any inconsistency between the provisions of the Amended Agreement and this Second Amendment, the provisions of this Second Amendment shall control and be binding.

 

Section 4. Counterparts. This Second Amendment may be executed in any number of counterparts, all of which will constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.  Facsimile or other electronic transmission of any signed original document shall be deemed the same as delivery of an original.

 

[Signatures follow on next page]

 

  

  

  

 

IN WITNESS WHEREOF, the Company, the Escrow Agent and the Investor Representative have caused this Second Amendment to be duly executed as of the date first written above.

 

	 	
Company:

CHINA GROWTH CORPORATION

By: /s/ Mingzhuo Tan 
Name: Mingzhuo Tan

Title: President and Chief Executive Officer

Escrow Agent:

ANSLOW & JACLIN, LLP

 

By: /s/Richard I. Anslow

Name: Richard I. Anslow

Title: Managing Partner

Investor Representative:

ACCESS AMERICA INVESTMENTS, LLC

By: /s/ Christopher Efird          

Name: Christopher Efird

Title: President 

 

 

[Signature Page to Second Amendment to Holdback Escrow Agreement]EX-10.1

Exhibit 10.1

SUMMARY OF ANNUAL COMPENSATION OF OUTSIDE DIRECTORS

The following table summarizes the annual compensation of our outside directors effective as of
January 1, 2012. Employee directors are not separately compensated for service as a director.

Cash Retainer

	 	•	 	$55,000

Non-Executive Chairman of the Board Retainer

	 	•	 	$150,000

Audit Committee Chairperson Retainer

	 	•	 	$20,000

Committee Chairperson Retainer (other than Audit Committee) 

	 	•	 	$15,000

Board Meeting Attendance Fee

	 	•	 	$2,000

Committee Meeting Attendance Fee

	 	•	 	$2,000

CEO Search Committee Fee

	 	•	 	One-time fee payable to the three directors comprising the special CEO Search
Committee established in May 2011 for their service on the CEO Search Committee, as
approved by the Board of Directors on October 28, 2011 in the amounts of $25,000 for
Thomas A. Datillo, Chairperson of the CEO Search Committee, and $15,000 for each of
Stephen P. Kaufman and Gregory T. Swienton.

Deferred Compensation Plan 

	 	•	 	Under the terms of the Harris Corporation 2005 Directors’ Deferred Compensation Plan
(As Amended and Restated Effective January 1, 2009), as amended (the “2005 Directors’
Plan”), on January 1, April 1, July 1, and October 1 (each such day an “Award Date”) of
each year, Harris credits each non-employee director’s account with a number of Harris
stock equivalent units having a fair market value equal to $29,000 (for an annual rate of
$116,000), which amount may be changed from time to time by the Board. In addition, under
the 2005 Directors’ Plan, prior to the commencement of a calendar year each non-employee
director may make an irrevocable election to defer all or a portion of his or her
director compensation for the subsequent year or years. Amounts deferred at the election
of the non-employee director may be invested in investment alternatives similar to those
available under the Harris Corporation 401(k) Retirement Plan or in Harris stock
equivalent units, pursuant to which a non-employee director’s account is credited with a
number of units of Harris stock equivalents based upon the fair market value of Harris
common stock on the date of deferral. Such Harris stock equivalent units are equivalent
in value to our shares of common stock. A non-employee director may not transfer or
reallocate amounts invested in other investments into Harris stock equivalents. Amounts
credited in Harris stock equivalents may be reallocated into any other investment
alternatives, provided director minimum stock ownership guidelines are satisfied.
Deferred amounts and investment earnings on such amounts are payable in cash following
the non-employee director’s resignation, retirement, or death. Each Harris stock
equivalent unit is credited with dividend equivalents, which are deemed reinvested in
additional Harris stock equivalent units on the dividend payment date.

	 	•	 	Amounts invested in Harris stock equivalents shall be appropriately adjusted in the
event of any stock dividend or split, recapitalization, merger, spin-off, extraordinary
dividends, or other similar events.

	 	•	 	A non-employee director may elect to receive amounts deferred under the 2005
Directors’ Plan, including amounts deferred in the form of Harris stock equivalent units,
either in a cash lump sum on a date certain within five years of his or her resignation
or retirement or in annual substantially equal cash installments over a designated number
of years beginning on a date certain within five years of a director’s resignation or
retirement, provided that all amounts are fully paid within ten years of resignation or
retirement.

	 	•	 	Within ninety (90) days of a Change of Control (as defined in the 2005 Directors’
Plan), and to the extent permitted by Section 409A of the Internal Revenue Code, each
non-employee director (or former non-employee director) will receive a lump sum cash
payment equal to the then remaining balance in his or her account.

	 	•	 	The foregoing summary description of the 2005 Directors’ Plan is not complete and is
qualified in its entirety by, and should be read in conjunction with, the complete text
of the 2005 Directors’ Deferred Compensation Plan.

Travel and Other Expenses

	 	•	 	Actual expenses incurred in the performance of their services as directors are
reimbursed.

Director Education Institutes/Activities

	 	•	 	Reimbursed for costs and expenses.

Accidental Death and Dismemberment Insurance and Business Travel Insurance

	 	•	 	Up to $200,000 accidental death and dismemberment insurance and an additional $200,000
in the event a director is involved in an accident while traveling on business relating
to our affairs.

Charitable Gift Matching Program

	 	•	 	Annual maximum of $10,000 per director is matched to eligible educational institutions
and charitable organizations.

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