Document:

Letter of Severance Agreement and Release

 EXHIBIT 10.1 

 
 

 
 THIS IS AN IMPORTANT LEGAL DOCUMENT. PLEASE CONFER WITH A LAWYER OR OTHER TRUSTED ADVISOR BEFORE SIGNING THIS
DOCUMENT. 
 August 13, 2012 
 VIA EMAIL  
 Michael J. Provenzano 

Re: Severance Agreement and Release 
 Dear Michael: 
 This letter summarizes the terms of your separation from
employment with Aspect Software, Inc. (the “Company”). The purpose of this letter (also referred to as the “Agreement”) is to establish an amicable arrangement for ending your employment relationship, to release the Company from
all legally waivable claims and to permit you to receive severance pay and related benefits. 
 By signing this Agreement, you will be giving
up valuable legal rights. For this reason, it is very important that you carefully review and understand the Agreement before signing it. The deadline for accepting this Agreement is twenty-one (21) days from the date of receipt of this
document. If you do not sign and return this document within the twenty-one (21) day period, this offer of severance and benefits will expire. The Company encourages you to take advantage of this period of time by consulting with a lawyer
before signing the document and you acknowledge having consulted with Bello, Black & Welsh, LLP for this purpose. 
 The terms of
your separation are as follows: 
 1. Employment Status and Final Payments: 

(a) Termination Date: Your termination from employment with the Company was effective as of July 9, 2012 (the
“Termination Date”). As of the Termination Date, your salary stopped, and any entitlement you had or might have had under a Company-provided benefit plan, program, contract or practice terminated, except as required by federal or state
law. 
 (b) Final Wages: You acknowledge having received a check on the Termination Date for

 
all earned salary and for all accrued but unused vacation time. The Company also shall reimburse you for any unreimbursed business expenses incurred by you prior to the Termination Date in
accordance with its standard expense reimbursement policy as long as such request for reimbursement complies with the policy and is received no later than seven (7) days from the Effective Date of this Agreement (as defined in Section 10
below). 
 2. Consideration: In exchange for, and in consideration of, your full execution of this Agreement, and after the
seven-day revocation period set forth in Section 10 has expired without being exercised, the Company agrees as follows: 
 (a) The Company
agrees to pay you a lump sum severance payment in the amount of Four Hundred and Twenty Five Thousand Dollars ($425,000), less applicable federal, state and/or local withholding and/or payroll taxes. This sum will be paid no later than seven
(7) calendar days from the expiration of the revocation period. 
 (b) Regardless of whether you execute this Agreement,
and provided you timely complete the required election forms (which will be provided to you shortly), you are eligible to continue receiving group medical and/or dental insurance pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”). If you execute and do not rescind this Agreement, for a period of twelve (12) months the Company will pay that part of the COBRA premiums equivalent to the health and dental insurance premiums it would have paid on your
behalf had you remained employed by the Company, after which you may, at your own expense, continue participation in COBRA for the balance of time provide by the statute (provided, however, the “qualifying event” under COBRA shall be
deemed to have occurred on the Termination Date). 
 3. Release: This section of the Agreement is a release of legal claims. In
this section, you are agreeing to release your right to sue the Company and the other releasees defined below for all claims that arose up to the date of the Agreement. Please carefully review this section with your attorney, or other trusted
advisor, and do not sign this document unless you understand what this section says. 
 (a) In exchange for the amounts and
benefits described in Section 2, which are in addition to anything of value to which you are entitled to receive, you and your representatives, agents, estate, heirs, successors and assigns, absolutely and unconditionally release, discharge,
indemnify and hold harmless the Company Releasees, from any and all legally waivable claims that you have against the Company Releasees. Other than as permitted in Section 3(d) below, this means that by signing this Agreement, you are agreeing
not to bring a legal action against the Company Releasees for any type of claim arising from conduct that occurred any time in the past and up to and through the date you sign this document. Company Releasees is defined to include (i) the
Company and/or any of its parents, subsidiaries or affiliates, predecessors, successors or assigns; (ii) all of the existing direct and indirect shareholders of the Company and all affiliates thereof, including without limitation Golden Gate
Private Equity, Inc. and all investment funds and other entities managed by or affiliated with Golden Gate Private Equity, Inc.; (iii) all equity holders of Golden Gate Capital and/or its parents, subsidiaries, affiliates, partnerships and/or
funds; and (iv) as to each of the entities listed in Paragraph 3(a)(i), (ii) and (iii), all of their respective current and former employees, officers, directors, partners, members, attorneys and/or agents, both individually and in their
official capacities. 

  
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 (b) This release includes, but is not limited to, any waivable claims you have against the
Company Releasees based on conduct that occurred any time in the past and up to and through the date you sign this Agreement that arises from any federal, state or local law, regulation or constitution dealing with either employment, employment
benefits or employment discrimination. By way of example, this release includes claims against the Company Releasees under the laws or regulations concerning discrimination on the basis of race, color, creed, religion, age, sex, sex harassment,
sexual orientation, gender identity, national origin, ancestry, genetic carrier status, handicap or disability, veteran status, any military service or application for military service, or any other category protected under federal or state law.
This release also includes any claim you may have against the Company Releasees for breach of contract (including those certain employment agreements between you and the Company dated February 9, 2004 and November 23, 2010), whether oral
or written, express or implied; any tort claims; any claims for equity or employee benefits of any other kind; or any other legally waivable statutory and/or common law claims. 

(c) For avoidance of doubt, by signing this Agreement you are agreeing not to bring any waivable claims against the Company Releasees
(other than as permitted in Section 3(d) below) under the following nonexclusive list of discrimination and employment statutes: Title VII of the Civil Rights Act of 1964, The Americans With Disabilities Act (“ADA”), The ADA
Amendments Act, The Equal Pay Act, The Lilly Ledbetter Fair Pay Act, the Family and Medical Leave Act, The Worker Adjustment and Retraining Notification Act (“WARN”), The Genetic Information Non-Discrimination Act (“GINA”), The
Employee Retirement Income Security Act (“ERISA”), The Massachusetts Fair Employment Practices Law (M.G.L. ch. 151B), The Massachusetts Equal Rights Act, The Massachusetts Equal Pay Act, the Massachusetts Privacy Statute and/or The
Massachusetts Civil Rights Act, as well as any other discrimination and employment statutes that may apply to you, including the state and local statutes in New Hampshire and Florida, all as amended.. 

(d) This release does not include any claim under the workers compensation or unemployment compensation statutes or any other claim,
which, as a matter of law, cannot be released by private agreement. Also, this Agreement is not intended to affect the rights and responsibilities of government agencies such as the Equal Employment Opportunity Commission (the “EEOC”), or
any comparable state or local agency, to enforce the laws within their jurisdiction. Notwithstanding the foregoing, with respect to any claim that cannot be released by private agreement, including without limitation any action commenced by the EEOC
or any other federal, state, or local government entity on your behalf, you specifically waive and release your right to recover, if any, monetary damages or other benefits or remedies of any sort whatsoever arising from the governmental action or
third party action. 
 (e) Notwithstanding anything to the contrary herein, this release does not include any claim that in any
way relates to or arises from (i) your rights under the Deferred Compensation Agreement between you and the Company dated February 9, 2004, including (without limitation) your right to a deferred compensation payment of $43,750 upon the schedule set
forth therein; 

  
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and/or (ii) your equity ownership rights under the Company’s 2003 Share Purchase and Option Plan (the “Plan”); your Share Option Agreement dated September 22, 2005; your
Share Purchase Agreement dated September 22, 2005; your Acknowledgment and Option Exercise dated July 31, 2006; your Share Option Agreement dated April 2, 2010; your Share Option Agreement dated April 8, 2010; your Restricted
Share Purchase Agreement dated on or about February 9, 2004; your Rollover Option Agreement dated February 9, 2004; your Share Pledge Agreement dated February 9, 2004; and any other stock, restricted stock or option agreements between
you and the Company regarding or relating to your equity ownership in the Company. The Company hereby reaffirms that (x) you have until 5:00 p.m. EST on August 9, 2012 to exercise any vested stock options you may have; and (y) should
the Company and/or any Investor(s) (as those terms are defined in the Plan) elect to repurchase any Employee Shares (as that term is defined in the Plan), such repurchase price shall be at Two Dollars and Fifty-OneCents ($2.51) per share. For the
avoidance of doubt, your 129,348 Class L non-voting shares and 314,130 Class A-2 shares are not subject to the repurchase right of either the Company or any Investor(s). 
 (f) Except for a wage complaint filed with the Massachusetts Attorney General against several of the Company Releasees, for which you have sought and received a right to sue letter and for which you
represent the Attorney General has elected not to enforce or pursue an action, you represent to each of the Company Releasees that at no time prior to or contemporaneous with your execution of this Agreement have you filed or caused or knowingly
permitted the filing or maintenance, in any federal, state or local court or administrative agency, any legal claim or action against the Company Releasees. You further agree that the release in this Section 3 includes any claims you have
against the Company Releasees for the wages at issue in the complaint filed with the Massachusetts Attorney General (and for which you received a right to sue letter) and any and all other claims for wages under federal or state law. 

4. Accord and Satisfaction: Except as otherwise set forth above in Section 3(e) and any unreimbursed business expenses, the amounts
set forth above in Sections 1 and 2 will be complete and unconditional payment, accord and/or satisfaction with respect to all obligations and liabilities of the Company Releasees to you, including, without limitation, all claims for back wages,
salary, vacation pay, draws, incentive pay, bonuses, commissions, severance pay, any and all other forms of compensation or benefits, attorney’s fees, or other costs or sums. 
 5. Waiver of Rights and Claims Under the Age Discrimination in Employment Act of 1967: 
 Since you are 40 years of age or older, you are being informed that you have or may have specific rights and/or claims under the Age Discrimination in Employment Act of 1967 (ADEA) and you agree that:

 (a) in consideration for the amounts described in Section 2 of this Agreement, which you are not otherwise entitled to
receive, you specifically and voluntarily waive such rights and/or claims under the ADEA you might have against the Company Releasees to the extent such rights and/or claims arose prior to the date this Agreement was executed; 

  
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 (b) you understand that rights or claims under the ADEA which may arise after the date this
Agreement is executed are not waived by you; 
 (c) you are advised to consider the terms of this Agreement carefully and
consult with or seek advice from an attorney of your choice or any other person of your choosing prior to executing this Agreement; 
 (d) you have carefully read and fully understand all of the provisions of this Agreement, and you knowingly and voluntarily agree to all of the terms set forth in this Agreement; and 

(f) in entering into this Agreement you are not relying on any representation, promise or inducement made by the Company or its attorneys
with the exception of those promises described in this document. 
 6. Period for Review and Consideration of Agreement:

 (a) You acknowledge that you were informed and understand that you have twenty-one (21) days to
review this Agreement and consider its terms before signing it. 
 (b) The 21-day review period will not be
affected or extended by any revisions, whether material or immaterial, that might be made to this Agreement. 
 7. Company Files,
Documents and Other Property; Post-Employment Obligations: 
 (a) You agree that on or before August 31, 2012 you
will return all Company owned equipment (including the Company issued laptop and smart phone), materials, confidential information and any other property. You also agree that you will continue to abide by the obligations set out in the
confidentiality, assignment of inventions, noncompetition and nonsolictation covenants in Paragraphs 5, 6, 7 and 8 of the February 9, 2004 Employment Agreement between you and the Company, and that such covenants shall survive both the
termination of your employment and the execution of this Agreement. It is agreed that the term “Noncompete Period” in Paragraph 7(b) of the February 9, 2004 Employment Agreement is herein amended to be defined as a period of one year
from the Termination Date. 
 (b) In connection with Aspect Software Group Holdings’ (the “Company”) Quarterly
Report on Form 10-Q to be filed with the Securities and Exchange Commission for the period ended June 30, 2012, you agree to sign and return the attached Quarterly Reporting Questionnaire & Sub Certification simultaneously with the
execution and return of this Agreement. The Quarterly Reporting Questionnaire & Sub Certification is limited to the period of time you were employed by the Company through the Termination Date. 

8. Future Conduct: 

(a) Nondisparagement: Other than as permitted in Section 3(d), you agree not to make disparaging, critical or otherwise
detrimental comments to any person or entity concerning the 

  
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Company, its officers, directors or employees; the products, services or programs provided or to be provided by the Company; the business affairs, operation, management or the financial condition
of the Company; or the circumstances surrounding your employment and/or separation of employment from the Company. 
 (b)
Confidentiality of this Agreement: Other than as permitted in Section 3(d) above, you agree that you will not disclose, divulge or publish, directly or indirectly, any information regarding the substance, terms or existence of this
Agreement and/or any discussion or negotiations relating to this Agreement, to any person or organization other than your immediate family and accountants or attorneys when such disclosure is necessary for the accountants or attorneys to render
professional services.  
 9. Representations and Governing Law: 

(a) This Agreement sets forth the complete and sole agreement between the parties regarding the subject matter addressed in this document
and supersedes any and all other agreements or understandings, whether oral or written, regarding the subject matter addressed in this document, except (i) Paragraphs 5, 6, 7 and 8 only of the February 9, 2004 Employment Agreement, as
amended herein, between you and the Company; and (ii) the agreements referenced above in Section 3(e), each of which will remain in full force and effect in accordance with their respective terms. This Agreement may not be changed,
amended, modified, altered or rescinded except upon the express written consent of both the Chief Executive Officer of the Company and you. 
 (b) If any provision of this Agreement is held invalid, void or voidable as against public policy or otherwise, the invalidity will not affect other provisions which may be given effect without the
invalid provision. To this extent, the provisions of this Agreement are declared to be severable. The language of all parts of this Agreement will in all cases be construed according to its fair meaning and not strictly for or against either of the
parties. 
 (c) This Agreement and any claims arising out of this Agreement will be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to the principles of conflicts of laws of Massachusetts. Any claims or legal actions by one party against the other will be commenced and maintained in state or federal court
located in Massachusetts, and you submit to the jurisdiction and venue of any such court. 
 (d) You may not assign any of your
rights or delegate any of your duties under this Agreement. The rights and obligations of the Company will inure to the benefit of the Company’s successors and assigns. 
 (e) The Company Releasees are intended third-party beneficiaries of the release in this Agreement, and the release may be enforced by each of them. Your heirs are also intended to be third party
beneficiaries with respect to the severance benefit in the event of your death. 
 (f) The Company hereby represents that the
Promissory Note executed by you in favor of the Company on February 9, 2004 in the amount of $425,000 has been satisfied in full, and that you do have no obligations of any kind to the Company under said Note. The Company further

  
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represents that, to the best of its knowledge, you do not currently have any other monetary obligations to the Company. Likewise, you represent that, to the best of your knowledge, you do not
currently have any other monetary obligations to the Company. 
 10. Effective Date: You may revoke this Agreement for a period of
seven (7) days after signing it. In order to revoke the Agreement, you must submit a written notice of revocation to David Reibel, Vice President and General Counsel, located at 300 Apollo Drive, Chelmsford, MA 01824
(david.reibel@aspect.com). This written notice may be sent by mail, email or hand-delivery but must be received by Mr. Reibel no later than the seventh day. The Agreement will not become effective or enforceable, and no payments will
be made, until this revocation period has expired (“Effective Date”) without being exercised.  
 If this
letter correctly states the agreement and understanding we have reached, please indicate your acceptance by countersigning the enclosed copy and returning it to me. 
 Very truly yours, 
  

									
	ASPECT SOFTWARE, INC.	 		 		 	
					
	By:	  	 /s/ JAMES FOY
	 		 	Title:	 	  

		  	James Foy	 		 		 	Executive Chairmen, Board of Directors

 I REPRESENT THAT I HAVE READ THE THIS AGREEMENT, THAT I FULLY UNDERSTAND THE TERMS AND CONDITIONS OF THE AGREEMENT AND
THAT I AM KNOWINGLY AND VOLUNTARILY EXECUTING THE AGREEMENT. IN ENTERING INTO THIS AGREEMENT, I DO NOT RELY ON ANY REPRESENTATION, PROMISE OR INDUCEMENT MADE BY THE COMPANY OR ITS REPRESENTATIVES WITH THE EXCEPTION OF THE CONSIDERATION DESCRIBED IN
THIS DOCUMENT. 
 Accepted and Agreed to: 
  

	
	 /s/ MICHAEL J. PROVENZANO III

	Michael J. Provenzano III

 Date: August 30, 2012 

  
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 IF YOU DO NOT WISH TO USE THE 21-DAY PERIOD, 

PLEASE CAREFULLY REVIEW AND SIGN THIS DOCUMENT 
 I, Michael J. Provenzano III, acknowledge that I was informed and understand that I have 21-days within which to consider the attached Severance Agreement and Release, have been advised of my right
to consult with an attorney regarding the Agreement and have considered carefully every provision of the Agreement, and that after having engaged in those actions, I prefer to and have requested that I enter into the Agreement prior to the
expiration of the 21-day period. 
  

							
	Dated: August 30, 2012	  		 		 	 /s/ MICHAEL J. PROVENZANO III

		  		 		 	Michael J. Provenzano III
				
	Dated: August 30, 2012	  		 		 	 /s/ ERICA PROVENZANO

		  		 		 	Witness:

  
 8f8k090612ex10i_keyuan.htm

Exhibit 10.1

KEYUAN PETROCHEMICALS, INC.

 

INDEPENDENT DIRECTOR AGREEMENT

 

This INDEPENDENT DIRECTOR AGREEMENT (the “Agreement”) is made and entered into as of this 6th day of  September, 2012, effective as of September 6, 2012 (the “Effective Date”), by and between Keyuan Petrochemicals, Inc., a Nevada corporation (the “Company”), and Yuxin (“James”) Xiang , a citizen of Canada, with a permanent residence at 2151 Robinword Crt, Mississauga, ON, Canada L5M 5H8  (the “Independent Director”).

 

WHEREAS, the Company desires to engage the Independent Director, and the Independent Director desires to serve, as a non-employee director of the Company, subject to the terms and conditions contained in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the receipt of which is hereby acknowledged, the Company and the Independent Director, intending to be legally bound, hereby agree as follows:

 

1.           DEFINITIONS.

 

(a)    “Corporate Status” describes the capacity of the Independent Director with respect to the Company and the services performed by the Independent Director in that capacity.

 

(b)    “Entity” shall mean any corporation, partnership, limited liability company, joint venture, trust, foundation, association, organization or other legal entity.

 

(c)   “Expenses” shall mean all reasonable fees, costs and expenses, approved by the Company in advance and reasonably incurred in connection with any Proceeding, including, without limitation, attorneys’ fees, disbursements and retainers, fees and disbursements of expert witnesses, private investigators, professional advisors (including, without limitation, accountants and investment bankers), court costs, transcript costs, fees of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial services, and other disbursements and expenses.

 

(d)    “Liabilities” shall mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement.

 

(e)    “Parent” shall mean any corporation or other entity (other than the Company) in any unbroken chain of corporations or other entities ending with the Company, if each of the corporations or entities, other than the Company, owns stock or other interests possessing 50% or more of the economic interest or the total combined voting power of all classes of stock or other interests in one of the other corporations or entities in the chain.

 

  

  

  

 

“(f)   Proceeding” shall mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation, administrative hearing, appeal, or any other proceeding, whether civil, criminal, administrative or investigative, whether formal or informal, including a proceeding initiated by the Independent Director pursuant to Section 12 of this Agreement to enforce the Independent Director’s rights hereunder

 

(g)    “Subsidiary” shall mean any corporation or other entity (other than the Company) in any unbroken chain of corporations or other entities beginning with the Company, if each of the corporations or entities, other than the last corporation or entity in the unbroken chain, owns stock or other interests possessing 50% or more of the economic interest or the total combined voting power of all classes of stock or other interests in one of the other corporations or entities in the chain.

 

2.           SERVICES OF INDEPENDENT DIRECTOR. While this Agreement is in effect, the Independent Director shall perform duties as an independent director and/or a member of the committees of the Board, be compensated for such and be reimbursed expenses in accordance with the Schedule A attached to this Agreement, subject to the following.

 

(a)    The Independent Director will perform services as is consistent with Independent Director’s position with the Company, as required and authorized by the By-Laws and Articles of Incorporation of the Company, and in accordance with high professional and ethical standards and all applicable laws and rules and regulations pertaining to the Independent Director’s performance hereunder, including without limitation, laws, rules and regulations relating to a public company.

 

(b)    The Independent Director is solely responsible for taxes arising out of any compensation paid by the Company to the Independent Director under this Agreement, and the Independent Director understands that he/she will be issued a U.S. Treasury form 1099 for any compensation paid to him/her by the Company.  The Independent Director acknowledges and agrees that because he is not an employee of the Company the Company will not withhold any amounts for taxes from any of his payments under the Agreement.

 

(c)    The Company may, with prior written notice to the Independent Director, offset any and all monies payable to the Independent Director to the extent of any monies owing to the Company from the Independent Director.

 

(d)    The rules and regulations of the Company notified to the Independent Director in writing, from time to time, apply to the Independent Director where appropriate. Such rules and regulations are subject to change by the Company in its sole discretion. Notwithstanding the foregoing, in the event of any conflict or inconsistency between the terms and conditions of this Agreement and rules and regulations of the Company, the terms of this Agreement control.

 

3.           REQUIREMENTS OF INDEPENDENT DIRECTOR. During the term of the Independent Director’s services to the Company hereunder, Independent Director shall observe all applicable laws and regulations relating to independent directors of a public company as promulgated from to time, and shall not: (1) be an employee of the Company or any Parent or Subsidiary; (2) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the Company other than as a director and/or a member of a committee of the Board; (3) be an affiliated person of the Company or any Parent or Subsidiary, as the term “affiliate” is defined in 17 CFR 240.10A-3(e)(1), other than in his capacity as a director and/or a member of a committee of the Board; (4) possess an interest in any transaction with the Company or any Parent or Subsidiary, for which disclosure would be required pursuant to 17 CFR 229.404(a), other than in his capacity as a director and/or a member of a committee of the Board committees; (5) be engaged in a business relationship with the Company or any Parent or Subsidiary, for which disclosure would be required pursuant to 17 CFR 229.404(b), except that the required beneficial interest therein shall be modified to be 5% hereby.

 

  

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4.           REPORT OBLIGATION. While this Agreement is in effect, the Independent Director shall immediately report to the Company in the event: (1) the Independent Director knows or has reason to know or should have known that any of the requirements specified in Section 3 hereof is not satisfied or is not going to be satisfied; and (2) the Independent Director simultaneously serves on an audit committee of any other public company.

 

5.           TERM AND TERMINATION. This Agreement and the Independent Director’s services hereunder shall terminate upon the earlier of the following:

 

(a)    Removal of the Independent Director as a director of the Company, upon proper Board or stockholder action in accordance with the By-Laws and Articles of Incorporation of the Company and applicable law;

 

(b)    Resignation of the Independent Director as a director of the Company upon written notice to the Board of Directors of the Company; or

 

(c)    Termination of this Agreement by the Company, in the event any of the requirements specified in Section 3 hereof is not satisfied, as determined by the Company in its sole discretion;

 

(d)    Occurrence of the event that the Company goes private; provided that the Independent Director shall not continue with the directorship of the Company upon the Company becoming private. or

 

(d)    Occurrence of next annual shareholder meeting since the Effective Date of this Agreement, where the Independent Director is not reelected or reappointed .

 

6.           LIMITATION OF LIABILITY. In no event shall the Independent Director be individually liable to the Company or its shareholders for any damages for breach of fiduciary duty as an independent director of the Company, unless the Independent Director’s act or failure to act involves intentional misconduct, fraud or a knowing violation of law.

 

7.           AGREEMENT OF INDEMNITY. The Company agrees to fully indemnify the Independent Director as follows:

 

(a)    Subject to the exceptions contained in Section 8(a) below, if the Independent Director was or is a party or is threatened to be made a party to any Proceeding (other than an action by or in the right of the Company) by reason of the Independent Director’s Corporate Status, the Independent Director shall be indemnified by the Company against all Expenses and Liabilities incurred or paid by the Independent Director in connection with such Proceeding including but not limited to legal fees (referred to herein as “INDEMNIFIABLE EXPENSES” and “INDEMNIFIABLE LIABILITIES,” respectively, and collectively as “INDEMNIFIABLE AMOUNTS”).

 

  

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(b)    Subject to the exceptions contained in Section 8(b) below, if the Independent Director was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Company, to procure a judgment in its favor by reason of the Independent Director’s Corporate Status, the Independent Director shall be indemnified by the Company against all Indemnifiable Expenses.

 

(c)    For purposes of this Agreement, the Independent Director shall be deemed to have acted in good faith in conducting the Company’s affairs as an independent director of the Company and/or a member of a committee of the Board of the Company, if the Independent Director: (i) exercised or used the same degree of diligence, care, and skill as an ordinarily prudent man would have exercised or used under the circumstances in the conduct of his own affairs; or (ii) took, or omitted to take, an action in reliance upon advise of counsels or other professional advisors for the Company, or upon statements made or information furnished by other directors, officers or employees of the Company, or upon a financial statement of the Company provided by a person in charge of its accounts or certified by a public accountant or a firm of public accountants, which the Independent Director had reasonable grounds to believe to be true.

 

8.           EXCEPTIONS TO INDEMNIFICATION. Director shall be entitled to indemnification under Sections 7(a) and 7(b) above in all circumstances other than the following:

 

(a)    If indemnification is requested under Section 7(a) and it has been adjudicated finally by a court or arbitral body of competent jurisdiction that, in connection with the subject of the Proceeding out of which the claim for indemnification has arisen, (i) the Independent Director failed to act in good faith and in a manner the Independent Director reasonably believed to be in or not opposed to the best interests of the Company, (ii) the Independent Director had reasonable cause to believe that the Independent Director’s conduct was unlawful, or (iii) the Independent Director’s conduct constituted willful misconduct, fraud or knowing violation of law, then the Independent Director shall not be entitled to payment of Indemnifiable Amounts hereunder.

 

(b)    If indemnification is requested under Section 7(b) and

 

(i)    it has been adjudicated finally by a court or arbitral body of competent jurisdiction that, in connection with the subject of the Proceeding out of which the claim for indemnification has arisen, the Independent Director failed to act in good faith and in a manner the Independent Director reasonably believed to be in or not opposed to the best interests of the Company, including without limitation, the breach of Section 4 hereof by the Independent Director, the Independent Director shall not be entitled to payment of Indemnifiable Expenses hereunder; or

 

  

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(ii)   it has been adjudicated finally by a court or arbitral body of competent jurisdiction that the Independent Director is liable to the Company with respect to any claim, issue or matter involved in the Proceeding out of which the claim for indemnification has arisen, including, without limitation, a claim that the Independent Director received an improper benefit or improperly took advantage of a corporate opportunity, the Independent Director shall not be entitled to payment of Indemnifiable Expenses hereunder with respect to such claim, issue or matter.

 

9.           WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that the Independent Director is, by reason of the Independent Director’s Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, the Independent Director shall be indemnified in connection therewith. If the Independent Director is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify the Independent Director against those Expenses reasonably incurred by the Independent Director or on the Independent Director’s behalf in connection with each successfully resolved claim, issue or matter. For purposes of this section, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

10.         ADVANCES AND INTERIM EXPENSES. The Company shall pay to the Independent Director all Indemnifiable Expenses incurred by the Independent Director in connection with any Proceeding, including a Proceeding by or in the right of the Company, in advance of the final disposition of such Proceeding, if the Independent Director furnishes the Company with a written undertaking, to the satisfaction of the Company, to repay the amount of such Indemnifiable Expenses advanced to the Independent Director in the event it is finally determined by a court or arbitral body of competent jurisdiction that the Independent Director is not entitled under this Agreement to indemnification with respect to such Indemnifiable Expenses.

 

11.         PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. The Independent Director shall submit to the Company a written request specifying the Indemnifiable Amounts, for which the Independent Director seeks payment under Section 7 hereof and the Proceeding of which has been previously notified to the Company and approved by the Company for indemnification hereunder. At the request of the Company, the Independent Director shall furnish such documentation and information as are reasonably available to the Independent Director and necessary to establish that the Independent Director is entitled to indemnification hereunder. The Company shall pay such Indeminfiable Amounts within thirty (30) days of receipt of all required documents.

 

12.         REMEDIES OF INDEPENDENT DIRECTOR.

 

(a)    RIGHT TO PETITION COURT. In the event that the Independent Director makes a request for payment of Indemnifiable Amounts under Sections 7, 9-11 above, and the Company fails to make such payment or advancement in a timely manner pursuant to the terms of this Agreement, the Independent Director may petition the appropriate judicial authority to enforce the Company’s obligations under this Agreement.

 

  

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(b)    BURDEN OF PROOF. In any judicial proceeding brought under Section 12 (a) above, the Company shall have the burden of proving that the Independent Director is not entitled to payment of Indemnifiable Amounts hereunder.

 

(c)    EXPENSES. The Company agrees to reimburse the Independent Director in full for any Expenses incurred by the Independent Director in connection with investigating, preparing for, litigating, defending or settling any action brought by the Independent Director under Section 12 (a) above, or in connection with any claim or counterclaim brought by the Company in connection therewith.

 

(d)    VALIDITY OF AGREEMENT. The Company shall be precluded from asserting in any Proceeding, including, without limitation, an action under Section 12 (a) above, that the provisions of this Agreement are not valid, binding and enforceable or that there is insufficient consideration for this Agreement and shall stipulate in court that the Company is bound by all the provisions of this Agreement.

 

(e)    FAILURE TO ACT NOT A DEFENSE. The failure of the Company (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders) to make a determination concerning the permissibility of the payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses under this Agreement shall not be a defense in any action brought under Section 12 (a) above.

 

13.         PROCEEDINGS AGAINST COMPANY. Except as otherwise provided in this Agreement, the Independent Director shall not be entitled to payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect to any Proceeding brought by the Independent Director against the Company, any Entity which it controls, any director or officer thereof, or any third party, unless the Company has consented to the initiation of such Proceeding. This section shall not apply to counterclaims or affirmative defenses asserted by the Independent Director in an action brought against the Independent Director.

 

14.         INSURANCE AND SUBROGATION.

 

(a)    The Company shall use its best efforts to purchase a commercially acceptable D&O insurance within a reasonable time frame after the execution of this Agreement and shall maintain the Insurance valid during the period when the Independent Director is on board, of which the Independent Director will be named as an insured. to

 

(b)    In the event of any payment of Indemnifiable Amounts under this Agreement or the D&O Insurance, the Company or its Insurance Carrier, as the case may be, shall be subrogated to the extent of such payment to all of the rights of contribution or recovery of the Independent Director against other persons, and the Independent Director shall take, at the request of the Company, all reasonable action necessary to secure such rights, including the execution of such documents as are necessary to enable the Company to bring suit to enforce such rights, to the extent that such subrogation is not otherwise inconsistent with any rights or entitlements of the Independent Director hereunder. .

 

  

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15.         AUTHORITY. Each party has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by each party hereto:

 

16.         SUCCESSORS AND ASSIGNMENT. This Agreement shall (a) be binding upon and inure to the benefit of all successors and assigns of the Company (including any transferee of all or a substantial portion of the business, stock and/or assets of the Company and any direct or indirect successor by merger or consolidation or otherwise by operation of law), and (b) be binding on and shall inure to the benefit of the heirs, personal representatives, executors and administrators of the Independent Director. The Independent Director has no power to assign this Agreement or any rights and obligations hereunder.

 

17.         CHANGE IN LAW. To the extent that a change in applicable law (whether by statute or judicial decision) shall mandate broader or narrower indemnification than is provided hereunder, the Independent Director shall be subject to such broader or narrower indemnification and this Agreement shall be deemed to be amended to such extent.

 

18.         SEVERABILITY. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application to the minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining provisions and clauses of this Agreement shall remain fully enforceable and binding on the parties.

 

19.         MODIFICATIONS AND WAIVER. Except as provided in Section 18 hereof with respect to changes in applicable law which broaden or narrow the right of the Independent Director to be indemnified by the Company, no supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto. No delay in exercise or non-exercise by the Company of any right under this Agreement shall operate as a current or future waiver by it as to its same or different rights under this Agreement or otherwise.

 

20.         NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by certified or registered mail with postage prepaid, on the third business day after the date en which it is so mailed:

 

If to Independent Director, to: _________________________.

If to the Company, to: Chunfeng Tao, CEO, Keyuan Petrochemicals, Inc., Qingshi Industrial Park, Ningbo Economic and Technological Development Zone, Ningbo, Zhejiang Province, PRC 315803, China or to such other address as may have been furnished in the same manner by any party to the others.

 

  

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21.         GOVERNING LAW. This Agreement shall be governed by and construed and enforced under the laws of the State of New York, United States.

 

22.         CONSENT TO JURISDICTION. The parties hereby consent to the jurisdiction of the courts having jurisdiction over matters arising in New York County, New York for any proceeding arising out of or relating to this Agreement. The parties agree that in any such proceeding, each party shall waive, if applicable, inconvenience of forum and right to a jury.

 

23.         AGREEMENT GOVERNS. This Agreement is to be deemed consistent wherever possible with relevant provisions of the By-Laws and Articles of Incorporation of the Company; however, in the event of a conflict between this Agreement and such provisions, the provisions of this Agreement shall control.

 

24.         INDEPENDENT CONTRACTOR. The parties understand, acknowledge and agree that the Independent Director’s relationship with the Company is that of an independent contractor and nothing in this Agreement is intended to or should be construed to create a relationship other than that of independent contractor. Nothing in this Agreement shall be construed as a contract of employment/engagement between the Independent Director and the Company or as a commitment on the part of the Company to retain the Independent Director in any capacity, for any period of time or under any specific terms or conditions, or to continue the Independent Director’s service to the Company beyond any period.

 

25.         ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the Company and the Independent Director with respect to the subject matter hereof, and supersedes all prior understandings and agreements with respect to such subject matter.

 

IN WITNESS WHEREOF, the parties hereto have executed this Independent Director Agreement as of the day and year first above written.

 

  

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AGREED

	 	
AGREED

	  	 	  
	
Keyuan Petrochemicals, Inc.

	 	
Independent Director

	  	 	  
	
/s/ Chunfeng Tao

	
 

	 	
/s/ Yuxin Xiang

	
 

	
Name:  Chunfeng Tao

	 	
Name: Yuxin Xiang

	
Title:   CEO

	 	  

 

  

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SCHEDULE A

 

I          POSITION:

 

INDEPENDENT DIRECTOR.

 

II.           COMPENSATION:

FEES. For all services rendered by the Independent Director pursuant to this Agreement, both during and outside of normal working hours, including but not limited to, attending in person or telephonically all required meetings of the Board or applicable committees thereof, executive sessions of the independent directors, reviewing filing reports and other corporate documents as requested by the Company, providing comments and opinions as to business matters as requested by the Company, the Company agrees to pay to the Independent Director a fee in cash of $2,000 per month during the Term, payable in cash to the Independent Director on a monthly basis in equal installments on the last day of each calendar month.

 

EXPENSES. During the term of the Independent Director’s service as a director of the Company, the Company shall promptly reimburse the Independent Director for all expenses incurred by him/her in connection with attending (a) all meetings of the Board or applicable committees thereof, (b) executive sessions of the independent directors, and (c) stockholder meetings, as a director or a member of any committee of the Board , provided that any such expenses over $1,000 shall be approved by the Company in writing in advance.  The Independent Director shall be allowed to travel Business Class or better on all flights from the United States and/or Canada  to overseas destinations with the Company prior written consent. In addition, the Independent Director shall rely on the Company to arrange all hotel accommodations in connection with any such meetings the Independent Director must attend. The amount of such expenses eligible for reimbursement by the Company during a calendar year shall not affect such expenses eligible for reimbursement by the Company in any other calendar year, and the reimbursement of any such eligible expenses shall be made within 30 days of receipt of the Independent Director’s expense report, including supporting receipts for such expense..

 

NO OTHER BENEFITS OR COMPENSATION. The Independent Director acknowledges and agrees that he/she is not granted and is not entitled to any other benefits or compensation from the Company for the services provided under this Agreement except expressly provided for in this Schedule A.

 

  

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AGREED

	 	
AGREED

	  	 	  
	
Keyuan Petrochemicals., Inc.

	 	
Independent Director

	  	 	  
	
/s/ Chunfeng Tao

	
 

	 	
/s/ Yuxin Xiang

	
 

	
Name:  Chunfeng Tao

	 	
Name:  Yuxin Xiang

 

 

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