DATED: 1 AUGUST 1996
SUNBASE ASIA, INC. (1)
KAN XXX XXX, XXXXX XXXXXX (2)
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EMPLOYMENT CONTRACT
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TABLE OF CONTENTS
CLAUSE HEADINGS
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1 DEFINITIONS AND INTERPRETATION
2 TERM OF EMPLOYMENT
3 DUTIES AND WORKING HOURS
4 SALARY
5 STOCK OPTIONS
6 EXPENSES
7 INSURANCE
8 SICKNESS OR DISABILITY
9 HOLIDAYS
10 CONFIDENTIAL INFORMATION
11 TERMINATION
12 SUSPENSION
13 OBLIGATIONS UPON TERMINATION OF EMPLOYMENT
14 RESTRICTIONS AFTER TERMINATION
15 GRIEVANCE AND DISCIPLINARY PROCEDURE
16 NOTICES
17 CANCELLATION OF PREVIOUS AGREEMENTS
18 GOVERNING LAW, JURISDICTION
19 CONTINUANCE OF TERMS
EXECUTION
DATED: 1 AUGUST 1996
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PARTIES:
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(1) Sunbase Asia, Inc., a Nevada corporation whose registered office is at
0000 Xxxxxxxx Xxx, Xxxxx 0, Xxxx, Xxxxxx 00000, Xxxxxx Xxxxxx xx
Xxxxxxx and whose Hong Kong office is at 19/F First Pacific Bank
Centre, 00-00 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx (the "Company"); and
(2) XXX XXX XXX, XXXXX XXXXXX of D6, Dragon Garden, 0-0 Xxxx Xxx Xxxxxxx,
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Xxx Hong Road, Hong Kong (the "Director").
OPERATIVE PROVISIONS:
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1. DEFINITIONS AND INTERPRETATION
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1.1 In this Agreement, unless the context otherwise requires, the
following words and expressions shall have the following meanings:
"Associated Company" any company which is (a) a subsidiary company,
or (b) a company having an ordinary share
capital of which not less than 25% is owned
directly or indirectly by the Company, or (c) a
company to which the Company or any of its
Associated Companies renders managerial,
administrative or technical services in the
ordinary course of its business;
"Board" the board of directors from time to time of the
Company and any duly appointed committee
thereof;
"Business of the Company" the business of trading, marketing,
manufacturing or otherwise dealing in bearing
components or products;
"Commencement Date" 1 August 1996;
"subsidiary" the same meanings as attributed to it by section
2 of the Companies Ordinance (Cap.32) Laws of
Hong Kong; and
"Option" an option to subscribe for Shares in Sunbase
Asia, Inc.;
"Option Period" the term of each Option shall be no more than
ten years from the Year(s) of Exercise;
"Share" an ordinary share in the capital of the Company
to be issued fully paid;
"Shareholder" the holder of a Share;
"$" and "cents" Hong Kong dollars and cents;
"US$ and cents" United States dollars and cents.
1.2 Words denoting the singular shall include the plural and vice versa
and words denoting any gender shall include all genders.
1.3 Headings used in this Agreement are for convenience only and shall
not affect its interpretation.
2. TERM OF EMPLOYMENT
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2.1 The Director shall serve the Company as Vice Chairman and Managing
Director or in such other capacity of an equivalent status as the Company
may reasonably require. The director accepts that the Company may require
him to perform other duties or tasks not within the scope of his normal
duties and the Director agrees to perform those duties or undertake those
tasks as if they were specifically required under this Agreement.
2.2 The Director's employment shall commence on the Commencement Date
and shall continue (subject to earlier termination as provided in this
Agreement) until terminated by either party giving to the other not less
than 12 months' prior notice expiring on or at any time after the end of
the specified period.
2.3 The Company is entitled at any time to appoint another person or
persons to act jointly with the Director.
3. DUTIES AND WORKING HOURS
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3.1 During the continuance of his employment hereunder the Director
shall:
(a) develop, market and promote such products of the Company or
any Associated Company as may be required by the Board;
(b) exercise such powers and functions and perform such duties in
relation to the Business of the Company or any Associated
Company as may from time to time be vested in or assigned to
him by the Board and shall comply with all directions from
time to time given to him by the Board (or by anyone
authorized by the Board) and with all rules and regulations
from time to time laid down by the Company concerning its
employees;
(c) (unless prevented by ill health or accident and except during
holidays permitted by this Agreement) devote not less than 100
hours each month of his time, attention and abilities to
carrying out his duties hereunder;
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(d) carry out his duties in a proper loyal and efficient manner
and shall use his best endeavours to promote the interests and
reputation of the Company and its Associated Companies and not
do anything which is to their detriment;
(e) work at and/or travel to such places in such manner and on
such occasions as the Company may from time to time require;
(f) keep the Board promptly and fully informed (in writing if so
requested) of his conduct of the business or affairs of the
Company and its Associated Companies and provide such
explanations as the Board may require.
4. SALARY
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4.1 The Director shall be paid by way of remuneration for his services
during his employment hereunder a salary at the rate of HK$1,625,000.00 per
annum. Such salary shall be paid by twelve monthly instalments in arrear
on the last day of every month and one instalment on the last day before
Chinese New Year Day.
4.2 The salary payable hereunder shall be reviewed annually by the
Board and the rate thereof may be increased with effect from any such
review date.
4.3 If Director dies or, as defined in Section 11.1(e) below, becomes
totally disabled, the Company shall continue to pay Director or Director's
heirs, successors or assigns the Salary for a period of six months,
commencing on the date that Director dies or becomes totally disabled.
5. STOCK OPTIONS
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5.1 The Company shall grant the following Stock Options to the Director
under the terms and conditions as approved by the Company's Compensation
Committee on 1 July 1996:
Exercise Price Number of Shares
Years of Exercise per Share per Option Rights
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one year from 16 Jan 1996 US$6.375 200,000
one year from 16 Jan 1997 US$6.375 200,000
one year from 16 Jan 1998 US$6.375 200,000
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600,000
5.2 If Director dies or as defined in Section 11.1(e) below becomes
totally disabled, then in addition to any Options that have vested in any
previous year(s) of employment hereunder, the amount of One Hundred
Thousand (100,000) Options will be deemed vested in Director if Director
has completed less than one hundred eighty-three (183) calendar days of
employment for the relevant year and the amount of Two Hundred Thousand
(200,000) Options will be deemed vested in Director if Director has
completed more than one hundred eighty-three (183) calendar days of
employment for the relevant year. Any Options that have
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vested as of the date that Director dies or becomes totally disabled may be
exercise by Director's estate, heirs, successors or assigns, prior to such
Option's expiration as described in Section 1.1 above.
5.3 If Director's employment with the Company is terminated, then in
addition to any Options that have vested in any previous year(s) of
employment hereunder, the amount of Options accrue from day to day will
also be deemed vested in Director up to the last day of employment for the
relevant year. Any Options that have vested in Director during his
employment may be exercise by him or his estate, heirs, successors or
assigns at any time prior to such Option's expiration as described in
Section 1.1 above notwithstanding that he no larger works for the Company.
5.4 Upon the written request of the Director or his estate, heirs,
successors, or assigns, at any time during the ten (10) year period that
commences after 16 Jan 1997, the Company shall file with the Securities and
Exchange Commission all necessary Forms and Registration Statements
covering that amount of shares of the common stock of Sunbase Asia, Inc.
which are issued to the Director hereunder.
6. EXPENSES
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The Company shall reimburse to the Director all reasonable travel,
accommodation, entertainment and other out-of-pocket expenses which he may
from time to time properly incur in the exercise of his duties hereunder
PROVIDED THAT the Company shall be entitled to require such expenses to be
duly vouched by written evidence.
7. INSURANCE
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7.1 The Company shall take out such liability insurance coverage as
approved by the Board to protect the Director of his position of being a
Director and Officer of the Company. In the event that no sufficient
liability coverage is arranged by the Company, any losses of the Director's
personal assets not covered by insurance shall be indemnifiable by the
Company.
8. SICKNESS OR DISABILITY
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8.1 First class Medical benefits are to be provided to the Director,
his spouse and unmarried children under the age of 18. The Board may
determine whether it wish to take out a comprehensive healthcare coverage
such as the BUPA Gold medical scheme or such other less comprehensive
medical care and hospitalization schemes but to reimburse the Director of
any excess not covered.
8.2 The Company shall continue to pay the Director his full
remuneration if the Director is absent from work on medical grounds for a
consecutive period of 90 working days or for any aggregate period of 120
working days in any period of 6 months provided that the
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Director shall, if required, supply the Company with medical certificates
covering his period or periods of absence.
8.3 In the event of the Director being prevented by illness or
incapacity from performing his duties hereunder for a consecutive period of
90 working days or for any aggregate period of 120 working days in any
period of 6 months the Company may terminate this Agreement in accordance
with the provisions of Clause 11.
9. HOLIDAYS
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9.1 The holiday year is from 1st January to 31st December.
9.2 The Director will be entitled during every holiday year to the
following holidays, during which his salary will continue to be paid:
(a) statutory holidays in Hong Kong; and
(b) 28 working days' holiday (exclusive of statutory holidays).
9.3 The overriding decision as to when holiday entitlement may be taken
lies with the Board.
9.4 Any holiday not taken by the end of the relevant holiday may be
carried forward or be paid in lieu provided agreed in writing by the Board.
9.5 For the calendar year during which the employment commences the
Director shall be entitled to such proportion of his annual holiday
entitlement as the period of his employment for such year shall bear to one
calendar year.
10. CONFIDENTIAL INFORMATION
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10.1 The Director shall not either during his appointment or at any time
after its termination:
(a) disclose to any person or persons (except to those authorized
by the Company to know);
(b) use for his own purposes or for any purposes other than those
of the Company; and
(c) through any failure to exercise all due care and diligence
cause any unauthorized disclosure of any private, confidential
or secret information of the Company (including, without
limitation, lists or details of customers of the Company or
relating to the working of any process or intervention carried
on or used by the Company) which he has obtained by virtue of
his appointment
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or in respect of which the Company is bound by an obligation
of confidence to a third party. These restrictions shall cease
to apply to information or knowledge which may (otherwise than
through the default of the Director) become available to the
public generally.
10.2 The provisions of clause 10.1 shall apply mutatis mutandis in
relation to the private, confidential or secret information of each
Associated Company which the Director may have received or obtained during
his appointment and the Director shall upon request enter into an
enforceable agreement with any such company to the like effect.
10.3 All notes, memoranda, records and writing made by the Director
relating to the Business of the Company or its Associated Company shall be
and remain the property of the Company or Associated Company to whose
business they relate and shall be delivered by him to the company to which
they belong forthwith upon request.
10.4 Without prejudice to the generality of this clause all notes,
memoranda, records or other written information which are marked as being
private, confidential or secret shall be treated as private, confidential
or secret (as the case may be) for the purposes of this clause.
11. TERMINATION
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11.1 The Company may without prejudice to any remedy which it may have
against the Director for the breach or non-performance of any of the
provisions of this Agreement, by notice in writing to him forthwith
terminate the employment of the Director if he:
(a) is guilty of misconduct or conduct likely to be prejudicial to
the Company or if he commits any act of dishonesty or serious
breach of his obligations hereunder or repeated or continued
(after warning) breaches of his obligations hereunder or he
becomes bankrupt or makes any composition or enters into any
deed of arrangement with his creditors;
(b) becomes a patient as defined in the Mental Health Ordinance
(Cap. 136) of the Laws of Hong Kong;
(c) is convicted of any criminal offence (other than an offence
under road traffic legislation in Hong Kong or elsewhere); or
(d) is prevented by illness or otherwise from performing his
duties hereunder for a consecutive period of 90 working days
or for any aggregate period of 120 working days in any period
of 6 months.
11.2 If before the expiration of this Agreement the employment of the
Director hereunder shall be terminated by reason of the liquidation of the
company for the purposes of the amalgamation or reconstruction or as part
of any arrangement for the amalgamation of the undertaking of the Company
not involving liquidation and the Director shall be offered
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employment with the amalgamated or reconstructed company on terms generally
not less favourable than the terms of this Agreement the Director shall
have no claim against the Company in respect of the termination of his
employment by the Company.
11.3 If during his employment hereunder the Director shall (otherwise
than by reason of death or resignation) cease to be a director of the
Company his employment hereunder shall continue as if it had been to the
office of a manager of the Company.
11.4 The Company reserves the right to pay to the Director his basic
salary (at the rate then current) for the unexpired portion of the duration
of his appointment or in lieu of his entitlement to notice as provided for
in Clause 2.2 (as the case may be).
11.5 If either party to this Agreement shall terminate the Director's
employment on notice in accordance with Clause 2.2 then the Company hereby
reserve the right to require the Director and the Director agrees not to
work at his place of work during any such notice period. During any period
in which the Director is required not to work at his place of work in
accordance with this clause the Company shall continue to comply with its
obligations under the terms of this Agreement and in particular, but
without limitation, shall continue to remunerate the Director throughout
the notice period in the normal manner. The Director shall throughout any
such period in which he is not required to work at his place of work
continue to be an employee of the Company and shall not, without
limitation, seek any alternative employment of whatsoever nature or
howsoever arising with any other company, firm or person during such period
without the express consent in writing of the Board.
12. SUSPENSION
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Notwithstanding the provisions of Clause 3 of this Agreement the
Company shall be under no obligation to vest in or assign to the Director
any powers or duties or to provide any work for the Director and the
Company may at any time or from time to time suspend the Director from the
performance of his duties or exclude him from any premises of the Company,
but salary shall not cease to be payable by reason only of that suspension
or exclusion of the Director unless and until his employment under this
Agreement shall be terminated under any provision of this Agreement.
13. OBLIGATIONS UPON TERMINATION OF EMPLOYMENT
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Upon the termination of his employment hereunder for any cause
whatsoever the Director shall:
(a) immediately delivery top the Company all documents, accounts,
records, programs and other items of whatsoever nature or
description which may be in his possession or under his
control which relate in any way to the Business of the company
or of any Associated Company and no copies of any such
documents as aforesaid or any part thereof shall be retained
by him;
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(b) if so requested send to the Company Secretary a signed
statement confirming that he has complied with Clause 14.1;
(c) at any time at the request of the Board:
(i) resign without compensation from office as a director of
the Company or any Associated Company as the Director
may hold at the time of such request; and
(ii) transfer any shares in the Company or any Associated
Company which the Director holds as nominee to such
other person as the Board may direct and should the
Director fail so to do the Company is HEREBY IRREVOCABLY
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APPOINTED by way of security for the performance of the
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Director's obligations hereunder as the Director's
attorney to sign any documents and perform any other
acts as are required to give effect hereto; and
(d) not at any time represent himself as being employed by or
connected with the Company or any Associated Company.
14. RESTRICTIONS AFTER TERMINATION
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14.1 The Director agrees that for a period of 2 years after termination
of his employment hereunder (howsoever caused) he shall not within the
Prohibited Area (as hereinafter defined):
(a) be directly or indirectly engaged, concerned or interested
whether as director, principal, agent, partner, consultant,
shareholder, employee or otherwise in any other business of
whatever kind which is wholly or partly in competition with
the Business of the Company.
(b) accept employment in any executive with any business concern
which is wholly or partly in competition with the Business of
the Company;
(c) provide advice to any business concern which is wholly or
partly in competition with the Business of the Company; or
14.2 The Director shall not within the Prohibited Area for a period of
12 months after the termination of his period of his employment hereunder
(howsoever that comes about and whether lawfully or not) directly or
indirectly and whether on his own behalf or on behalf of any other business
concern, person, partnership, firm, company or other body which is wholly
or party in competition with the Business of the Company:
(a) canvass, solicit or approach or caused to be canvassed or
solicited or approached for business any person or persons who
at the date of the
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termination of the Directors' appointment is or was a client
or customer of the Company or was in the habit of dealing with
the Company;
(b) solicit or entice or endeavour to solicit or entice away from
the Company any person employed by the Company at the date of
such termination; or
(c) employ any person who was employed by the Company during the
last 12 months of the Director's employment hereunder.
14.3 The Director hereby convenants with the Company (acting on its own
behalf and as trustee for each Associated Company) that he will perform and
observe in relation to each such Associated Company the several convenants
set out in the subclause and this convenant shall be construed and
enforceable as a separate convenant in relation to each such Associated
Company.
14.4 It is agreed that the restrictions contained in this clause are
considered reasonable by the parties but in the event that any such
restrictions shall be found to be void but would be valid if some part
thereof were deleted or the period or area of application reduced such
restrictions shall apply with such modification as may be necessary to make
them valid and effective.
14.5 In this clause "the Prohibited Areas" means Hong Kong.
14.6 It is hereby agreed and declared that each of the convenants
contained in the preceding sub-clauses on the part of the Director shall be
a separate convenant and shall be construed and enforceable as a separate
convenant.
15. GRIEVANCE AND DISCIPLINARY PROCEDURE
------------------------------------
In the event of the Director wishing to seek redress for any
grievance relating to his employment or if he is dissatisfied with any
disciplinary decision relating to him he should first apply in person to
the Chairman of the Company. The Director must then promptly answer (in
writing if required) such questions (if any) as the Chairman or the Board
wishes to put to him on the matter before the Board comes to a decision.
The decision of the Board on such matter shall be final.
16. NOTICES
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Any notice to be given hereunder must be in writing. Notice to the
Director will be sufficiently served by being delivered personally to him
or by being sent by registered post addressed to him at his usual or last
known place of abode. Notice to the Company shall be sufficiently served
by being delivered to the Company Secretary or by being sent by registered
post to the registered office of the Company. Any notice is so posted
shall be deemed served upon the second day following that on which it was
posted if not actually received sooner.
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17. CANCELLATION OF PREVIOUS AGREEMENTS
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As from the Commencement Date all previous agreements or
arrangements (whether written or oral, express or implied) between the
Company and the Director relating to the employment of the Director by the
Company shall be deemed to have been cancelled.
18. GOVERNING LAW, JURISDICTION
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This Agreement is governed by and is to be construed in accordance
with the laws of Hong Kong and the parties hereby agree to submit to the
non-exclusive jurisdiction of the courts of Hong Kong.
19. CONTINUANCE OF TERMS
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The expiration or determination of this Agreement howsoever arising
shall not affect such of the provisions hereof as are expressed to operate
or have effect after the termination of this Agreement.
IN WITNESS whereof the Director has been signed by or on behalf of
the parties hereto the day and year first before written.
For and on behalf of
SUNBASE ASIA, INC.
_______________________________________
Authorized Signature(s)
SIGNED by )
on behalf of the Company )
in the presence of: )
SIGNED, SEALED AND DELIVERED )
by the Director in the )
presence of: )
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