EXHIBIT 10.20
EMPLOYMENT AGREEMENT
between
PEAK INTERNATIONAL LIMITED
and
XXXXX XXXX
Dated: December 1, 2000
THIS AGREEMENT is made as of the first day of December, 2000 between PEAK
INTERNATIONAL LIMITED, a company incorporated in Bermuda, with its principal
office at 00000 Xxxxx Xxxxx, Xxxxxxx, XX 00000 (the "Company"); and Xxxx Xxxx To
(Xxxxx Xxxx), residing at Xxxx X0, 0xx Xxxxx, 0 to 2 Xxx Xx Lane, Kowloon, Hong
Kong (the "Employee").
The parties agree as follows:
1. PAYMENT UPON TERMINATION OF EMPLOYMENT
1.1. The term ("Term") of this Agreement shall commence on the date of
execution of this Agreement and shall remain in effect for a
period of three years from the date of this agreement (the
"Employment").
1.2. Subject to clauses 1.4 and 3, the Employee shall be entitled to a
lump-sum payment in an amount equal to the amount, if any, to
which he is entitled under the Employment Ordinance (Cap. 57)
plus such amount the total of which shall be equal to 12 months
base salary at the greater of the rate in effect on the effective
date or as increased from time to time hereafter, and any accrued
but unused vacation pay (the "Termination Payment") within 15
days of the termination of the Employment during the term hereof,
and all of Employee's stock options which would have vested
within 18 months of the date of termination of the Employment
shall immediately vest in full and, notwithstanding anything to
the contrary contained in any other document, be fully
exercisable for a period of one year.
1.3. The Termination Payment shall be in full and final settlement of
any rights, payments or benefits to which the Employee is
entitled under any other agreement or arrangement pursuant to
which he is employed by the Company or any of its subsidiaries or
affiliates other than:
1.3.1. benefits pursuant to any life, disability, health, or
other insurance policy or benefit plan provided by the Company;
1.3.2. stock options issued to Employee pursuant to any stock
option plan of the Company.
1.4. The Employee shall not be entitled to the Termination Payment
when the Employment is terminated in any of the following
circumstances (the Employee being entitled, in such
circumstances, only to payment for accrued and unused vacation,
any payments to which he is otherwise entitled pursuant to life,
disability, health or other insurance plan, and to exercise any
stock option to the extent otherwise vested and exercisable under
the terms of such plan and stock option agreements):
1.4.1. the conviction of the Employee of a felony involving
dishonesty;
2
1.4.2. termination of the Employee for Cause. "Cause" shall mean
(i) Employee's conviction of or guilty plea to the commission
of an act or acts constituting a felony under the laws of the
United States or any state thereof, (ii) action by the Employee
involving personal dishonesty, theft or fraud in connection
with the Employee's duties as an officer of the Company, or
(iii) a breach of any one or more material terms of this
Agreement (including but not limited to the confidentiality and
non-solicitation provisions contained herein.)
1.4.3. any material breach by the Employee of the terms of this
Agreement that the Employee has failed to cure within 10 days
of receipt of written notice of such breach from the Company;
1.4.4. the death of the Employee;
1.4.5. the inability of the Employee due to ill health or
physical or mental condition to perform the duties and
responsibilities in the ordinary and usual manner required of a
person in the Employee's position for 180 consecutive days;
1.4.6. the resignation by the Employee, except if such
resignation is the result of any of the following actions by
the company: (1) the assignment to the Employee of any duties
materially inconsistent with the Employee's position with the
Company on the date of this Agreement or a substantial adverse
alteration in the nature of the Employee's responsibilities
from those in effect on the date of this Agreement; or (2) a
material reduction by the Company of the Employee's annual base
salary in effect on the date hereof or as the same may be
increased from time to time.
2. CHANGE IN CONTROL
2.1. "Change in Control" of the Company means any transaction or
series of transactions in which any of the following occurs:
2.1.1. the acquisition by any "person" (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (other than by an Excluded
Person (as defined below) or by the Company or a person that
directly or indirectly controls, is controlled by, or is under
common control with, the Company) of the "beneficial ownership"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing fifty
percent (50%) or more of the total voting power represented by
the Company's then outstanding voting securities,
2.1.2. the consummation of a merger or consolidation of the
Company with or into any other corporation, other than a merger
or consolidation that would result in the voting securities of
the Company outstanding prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least fifty
percent (50%) of the total voting power represented
3
by the voting securities of the Company or such surviving
entity outstanding immediately after such merger or
consolidation, or
2.1.3. the consummation of a plan of complete liquidation of the
Company or of the sale or disposition by the Company of all or
substantially all of the Company's assets; provided, however,
that a Change of Control shall not be deemed to have occurred
as a result of the consummation of transactions pursuant to
that certain Purchase Agreement relating to the Common Stock
between Luckygold 18A Limited and Peak TrENDS Trust dated as
of May 28, 1998. As used herein, "Excluded Person" means X.X.
Xx, any of his immediate family members, trusts established
for the exclusive benefit of X.X. Xx or any of his immediate
family members and any person who controls, is controlled by
or is under common control with X.X. Xx, including without
limitation, Luckygold 18A Limited; provided, however, that for
the purposes of the definition of Excluded Person, "control"
means the beneficial ownership of more than 50% of the total
voting power of a person normally entitled to vote in the
election of directors, managers or trustees, as applicable to
a person.
2.2. In the event Employee's employment with the Company is terminated
in anticipation of or within two years following a Change of
Control (i) by the Company without Good Cause or (ii) by Employee
with Good Reason (as defined below), then, in addition to the
payments Employee shall be entitled to pursuant to paragraph 1,
above, all of Employee's stock options shall immediately vest in
full and, notwithstanding anything to the contrary contained in
any other document, be fully exercisable for a period of one
year.
3. LIMITATION ON PAYMENTS
3.1. In the event that the payments to Employee under this Agreement
(i) constitute "parachute payments" within the meaning of Section
280G of the Code, and (ii) but for this Section 3, would be
subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code or any similar or successor provision, then the
payments shall be reduced to such lesser amount that would result
in no portion of the payments being subject to excise tax under
Section 4999 of the Internal Revenue Code. Any determination
required under this Section 3 shall be made by the Company's
independent accountants (the "Accountants"), whose determination
shall be conclusive and binding upon Employee and the Company for
all purposes. For purposes of making the calculations required by
this Section 3, the Accountants may make reasonable assumptions
and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application
of Sections 280G and 4999 of the Code. The Company and Employee
shall furnish to the Accountants such information and documents
as the Accountants may reasonably request in order to make a
determination under this Section 3.
4. CONFIDENTIALITY
4
4.1. The Employee understands that by virtue of the Employment, the
Employee has been and will be exposed to confidential information,
including all ideas, information and materials, tangible or
intangible, relating to the business of the Company and its
subsidiaries, their personnel (including their officers,
directors, shareholders, trustees, agents, employees and
contractors), their customers, clients, vendors, suppliers,
distributors, consultants, and others with whom the Company and
its subsidiaries do business ("Confidential Information").
4.2. The Employee agrees not to disclose any Confidential Information
obtained during the Employment for a period of 12 months after the
termination of the Employment and thereafter not to disclose the
same unless the Employee shall have procured that the proposed
recipient of the Confidential Information has entered into an
undertaking with the Employee to keep the same confidential on
terms no less exacting than those set out herein; and provided
always that the Employee shall not be obliged to keep confidential
any Confidential Information required to be disclosed as a matter
of law or to the extent that it becomes generally known to the
public other than as a result of any breach by the Employee of the
terms herein.
4.3. The Employee covenants and undertakes that after the termination
of the Employment, the Employee
4.3.1. shall not for a period of 12 months after the termination
of the Employment use any Confidential Information for any
purpose;
4.3.2. shall not retain or take with the Employee any Confidential
Information in a tangible form, which includes ideas,
information or materials in written or graphic form, on a
computer disc or other medium, or otherwise stored in or
available through electronic or other form ("Tangible
Form"); and
4.3.3. shall immediately deliver to the Company any Confidential
Information in a Tangible Form that the Employee may then
or thereafter hold or control, as well as all other
property, equipment, documents or things that the Employee
was issued or otherwise received or obtained during the
Employment.
5. RESTRICTIVE COVENANTS
5.1. The Employee covenants and undertakes that for a period of 12
months following the termination of the Employment for any reason,
the Employee shall not:
5.2. directly or indirectly induce any person who is an employee of the
Company (or any of its subsidiaries) to terminate his or her
employment with the Company (or any of its subsidiaries), whether
or not such termination constitutes a breach of that person's
employment contract;
5
5.3. directly or indirectly solicit the customer or business of any
person who, as at the date of termination of the Employment, is
(or, within the preceding period of 12 months, was) a client or
customer of the Company or its subsidiaries, with the intention or
for the purpose of supplying (or procuring the supply of)
precision engineered semiconductor packing material (including,
without limitation, the collecting and recycling of semiconductor
packing material); or
5.4. directly or indirectly and whether on his own account or on
account of any future employer, partner or associate, compete with
the Company or otherwise engage in or provide services related to
the precision engineered semiconductor packing business
(including, without limitation, the business of collecting and
recycling semiconductor packing material) in Hong Kong, Singapore,
Malaysia or the United States of America.
5.5. Notwithstanding the term specified in clause 3.1, the Employee may
accept employment with, or provide services as an independent
contractor to, a client or customer of the Company or its
subsidiaries if, to do so, will not breach any term or condition
of this Agreement.
6. RELEASE
6.1. In consideration of, and as an express condition precedent to, the
Company's obligation to make the Termination Payment, the Employee
shall sign and deliver to the Company a General Release in the
form attached hereto as Appendix 1.
6.2. The Company shall not be obliged to make the Termination Payment
in the event that the General Release is not signed and delivered
to the Company within 15 days of receipt of notice following
termination of the Employment and the Company shall, thereafter,
be released of its duties and obligations or further duties and
obligations under this Agreement and the Employee shall waive or
cause to be waived any claims that the Employee may have under
this Agreement.
7. ASSIGNMENT
7.1. The rights and obligations under this Agreement shall inure to and
be binding upon the parties hereto and their respective heirs,
successors and assigns.
8. NOTICES
8.1. All notices and other communications provided for hereunder must
be in writing and must be sent by courier to the party's address
indicated above or to such other address as may be designated by a
party by notice.
8.2. Notices hereunder shall be effective when delivered.
6
9. MISCELLANEOUS
9.1. This Agreement shall supersede any and all prior written or oral
agreements and discussions between the Employee and the Company
regarding the subject matter hereof and this Agreement contains
the entire understanding of the parties in respect of the subject
matter hereof.
9.2. If any of the restrictions contained in this Agreement shall be
void or unenforceable, then the remainder of this Agreement shall
be enforced to the fullest extent permitted by law.
9.3. This Agreement is made in and shall be governed by and construed
in accordance with the laws of Hong Kong.
10. DISPUTES
10.1. Any dispute hereunder shall be settled by binding arbitration in
Hong Kong in the English language before a single arbitrator
pursuant to the rules of the International Chamber of Commerce.
Each party shall bear its own legal fees and costs. The cost of
arbitration shall be paid by the Company.
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement the day
and year first above written.
/s/ Xxxxx Xxxx
-----------------------------
Xxxxx Xxxx
SIGNED by /s/ Xxxxxx Xxxx
-------------------------
duly authorized for and on behalf of
PEAK INTERNATIONAL LIMITED
7
APPENDIX I
GENERAL RELEASE
[Insert Date]
I, Xxxxx Xxxx, hereby release Peak International Limited (the "Company") of
certain duties and obligations and waive any rights or remedies that I may have
against the Company as provided in this letter. This letter is delivered
pursuant to the Employment Agreement entered into between the Company and me
dated December 1, 2000 (the "Employment Agreement").
In consideration of the promises and mutual covenants contained in the
Employment Agreement, and for good and valuable consideration, the receipt and
sufficiency of which is expressly acknowledged, I hereby:
1. release and discharge the Company and its subsidiaries, and each
of their respective past and present officers, directors,
shareholders, managers, employees and agents, and their respective
successors and assigns (collectively the "Released Parties"), from
any and all claims or demands, that I may have, whether past,
present or future, against the Released Parties, statutory or
otherwise, to the fullest extent permissible by law; and
2. waive the obligations, duties and liabilities that the Company may
have, whether past, present or future, statutory or otherwise, to
the fullest extent permissible by law; arising out of or relating
in any way to my employment with or termination of my employment
with the Company.
This letter shall be governed by, subject to and construed and enforced pursuant
to the terms and conditions of the Employment Agreement.
________________
Xxxxx Xxxx
8
