Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), effective as of the 5th
day of July, 2002 (the "Effective Date"), by and between CellStar (Asia)
Corporation Limited (the "Employer"), CellStar Corporation, a Delaware
corporation and parent company of Employer ("Parent"), and Hong An-Hsien (the
"Employee").
R E C I T A L S
WHEREAS, Employer desires to provide for the continuing employment of
Employee for the period of time provided in this Agreement; and
WHEREAS, Employee desires to render services for Employer on the
terms and conditions hereinafter provided; and
WHEREAS, Employer desires that Employee be able to continue to
participate in Parent's stock option and incentive compensation plans; and
WHEREAS, the Board of Directors of Parent deems it advisable and in
the best interests of Parent and Employer to retain Employee's services and to
reinforce and encourage the continued attention and dedication of Employee to
his assigned duties; and
WHEREAS, the Board of Directors of Parent deems it advisable and in
the best interests of Parent and Employer to enter into this Employment
Agreement with Employee;
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
ARTICLE I
Employment
1.1 Employment. Effective on the Effective Date the Employer shall
employ the Employee and the Employee shall accept employment by the Employer for
the period and upon the terms and conditions contained in this Agreement.
1.2 Term. The term of this Agreement shall commence on the Effective
Date and shall end on the fifth anniversary of the date on which The Board of
Directors of the Parent notified the Employee that the Board of Directors has
determined to discontinue the automatic daily extension of this Agreement, (the
period of time between the commencement and the end of this Agreement is
referred to herein as the "Term").
1.3 Position and Duties.
(a) Position. During the Term, the Employee shall serve as Chairman
of Employer, with authority, duties and responsibilities consistent with
such position, and shall perform such other services for Employer, Parent
and their affiliated entities consistent with such
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position as may be reasonably assigned to him from time to time by senior
management and/or the boards of directors of Employer and/or Parent. During
the Term, Employee shall, if so elected or appointed, also accept election
or appointment, and serve, as an officer and/or director of Employer or any
of its affiliated entities and perform the duties appropriate thereto,
without additional compensation other than as set forth herein. Employee's
actions hereunder shall at all times be subject to the direction of the
senior management and the boards of directors of Employer and Parent.
(b) Commitment. During the Term, the Employee shall devote
substantially all of his time, energy, skill and best efforts to the
performance of his duties hereunder in a manner that will faithfully and
diligently further the business and interests of Employer, Parent and their
affiliated entities. Subject to the foregoing, the Employee may serve in
any capacity with any civic, educational or charitable organization;
provided that such activities and services do not interfere or conflict
with the performance of his duties hereunder. Employee shall comply with
reasonable policies, standards and regulations established from time to
time by senior management and/or the boards of directors of Employer and
Parent.
1.4 Compensation.
(a) Base Salary. Subject to Section 1.4(c) below, beginning on the
Effective Date, Employer shall pay the Employee as compensation an
aggregate salary ("Base Salary") of U.S. $900,000 per year during the Term,
or such greater amount as shall be approved in accordance with the policies
of Employer and/or Parent, as applicable. The Base Salary for each year
shall be paid by Employer in accordance with the regular payroll practices
of Employer.
(b) Annual Incentive Payment. Each year during the Term, the
Employee shall be eligible to participate in an annual incentive plan
approved by the Parent's Board of Directors.
(c) Withholding. With respect to any compensation received by
Employee with respect to Employee's services for Employer or any of its
affiliates, Employer will deduct such withholding and other payroll taxes
as are required to be withheld by Employer under applicable law.
(d) Stock Options. Parent will recommend to the Board of Directors
of Parent that Employee be granted a stock option (the "Option") entitling
him to purchase 200,000 shares of Parent's common stock at the reported
market closing sales price thereof on the date of grant. The Option shall
become exercisable by the Employee at the rate of 25% of the shares covered
thereby per year, beginning on the first anniversary of the Effective Date
in accordance with the terms of the Parent's 1993 Amended and Restated Long
Term Incentive Plan. The Option shall contain such additional terms as are
set forth in Parent's 1993 Amended and Restated Long Term Incentive Plan
and as are established by the Board of Directors of Parent. Employee shall
be entitled to annual consideration for future grants in amounts (if any)
and on terms and conditions to be determined by the Board of Directors of
Parent.
(e) Payment and Reimbursement of Expenses. During the Term, Employer
shall pay or reimburse the Employee for all reasonable travel and other
expenses incurred by the Employee in performing his obligations under this
Agreement in accordance with the policies
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and procedures of Employer or Parent, provided that the Employee properly
accounts therefor in accordance with the regular policies of Employer or
Parent, as applicable.
(f) Fringe Benefits and Perquisites. During the Term, the Employee
shall be entitled to participate in or receive benefits under any stock
purchase, profit-sharing, pension, retirement, life, medical, dental,
disability or other plan or arrangement made available by Employer or
Parent to employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements. In
addition, Employee will have use of a company car, if any. Nothing paid to
the Employee under any plan or arrangement made available to the Employee
shall be deemed to be in lieu of compensation hereunder.
(g) Vacations. During the Term and in accordance with the regular
policies of Employer, the Employee shall be entitled to no less than 20
days of vacation in any calendar year (prorated in any calendar year in
which Employee is employed hereunder for less than the entire year in
accordance with the number of days in such calendar year during which the
Employee is so employed).
(h) Signing Bonus. As an inducement and in further consideration of
the Employee entering into this Agreement and continuing to serve as set
forth herein, the Employer agrees to pay the Employee a signing bonus in an
amount equal to $1,500,000, such amount being payable upon the Effective
Date. In the event Employee should terminate his employment Without Good
Reason or for a Change of Control (as hereinafter defined) during the first
five (5) years of the Term, Employee shall immediately repay a prorated
amount of such bonus to the Employer, such prorated amount being based on
the ratio of the number of days' service from the Effective Date until the
termination date and the number of days remaining in such five (5) year
period. For purposes of this subsection (h) in the event Employee
terminates his employment Without Good Reason or for a Change of Control
following the expiration of such five (5) year period, no refund of the
signing bonus shall be required.
(i) Success Bonus. Further as an inducement for Employee to enter
into this Agreement and accept the responsibilities and duties necessarily
related to completing such IPO, Employer agrees to pay a success bonus in
the amount of $1.5 million to Employee in the event the Employer (or an
affiliated company organized for such purpose) successfully completes an
initial public offering of its stock on the Hong Kong Stock Market (the
"IPO") and Employee accepts the position of Chairman and/or CEO of such
public entity. Such success bonus shall be paid by the Employer or such
public entity following the successful completion of the IPO. It is
specifically understood that Employer shall be under no obligation to
proceed with any proposed IPO which the Board of Directors of Employer
believes in good faith not to be in the best interests of the Parent and/or
its stockholders.
1.5 Termination.
(a) Disability. Employer may terminate this Agreement for
Disability. "Disability" shall exist if, because of ill health, physical or
mental disability, or any other reason beyond his control, and
notwithstanding reasonable accommodations made by Employer, the Employee
shall have been unable, unwilling or shall have failed to perform his
duties under this Agreement, as determined in good faith by Parent's Board
of Directors or a committee thereof, for a period of 180 consecutive days,
or if, in any 12-month period, the Employee shall have been unable or
unwilling or shall have failed to perform his duties for a period of 270 or
more business days, irrespective of whether or not such days are
consecutive.
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(b) Cause. Employer may terminate the Employee's employment for
Cause. Termination for "Cause" shall mean termination because of the
Employee's (i) gross incompetence, (ii) willful misconduct that causes or
is likely to cause economic harm to Employer, Parent or their affiliated
entities or that brings or is likely to bring substantial discredit to the
reputation of Employer, Parent or any of their affiliated entities, as
determined by the Board of Directors of Parent in good faith, (iii) failure
to follow directions of senior management or the boards of directors of
Employer or Parent that are consistent with his duties under this
Agreement, (iv) conviction of, or entry of a pleading of guilty or nolo
contendre to, any crime involving moral turpitude or entry of an order duly
issued by any federal or state regulatory agency having jurisdiction in the
matter permanently prohibiting Employee from participating in the conduct
of the affairs of Employer, Parent or their affiliated entities, or (v)
material breach of any provision of this Agreement that is not remedied
within 30 days after receipt of written notice from Employer or Parent
specifying such breach.
(c) Without Cause. During the Term, Employer may terminate the
Employee's employment Without Cause, subject to the provisions of
subsection 1.6(c) (Termination Without Cause or for Company Breach).
Termination "Without Cause" shall mean termination of the Employee's
employment by Employer other than termination for Cause or for Disability.
(d) Company Breach. The Employee may terminate his employment
hereunder for Company Breach. For purposes of this Agreement a "Company
Breach" shall be deemed to occur in the event of a material breach of this
Agreement by Employer or Parent, including without limitation any material
reduction in the authority, duties and responsibilities that the Employee
has on the Effective Date of this Agreement; provided, however, that the
foregoing items shall not constitute Company Breach unless the Employee
notifies Employer thereof in writing, specifying in reasonable detail the
basis therefor and stating that it is grounds for Company Breach, and
unless Employer fails to cure such Company Breach within 60 days after such
notice is sent or given under this Agreement.
(e) Change in Control. The Employee may terminate his employment
hereunder within 12 months of a Change in Control (defined below):
(i)"Change in Control" shall mean any of the following:
(1) any consolidation or merger of Parent in which Parent is
not the continuing or surviving corporation or pursuant to
which shares of Parent's common stock would be converted
into cash, securities or other property, other than a merger
of Parent in which the holders of Parent common stock
immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation
immediately after the merger;
(2) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of Parent;
(3) any approval by the stockholders of Parent of any plan
or proposal for the liquidation or dissolution of Parent;
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(4) the cessation of control (by virtue of their not
constituting a majority of directors) of Parent's Board of
Directors by the individuals (the "Continuing Directors")
who (x) at the date of this Agreement were directors or (y)
become directors after the date of this Agreement and whose
election or nomination for election by Parent's
stockholders, was approved by a vote of at least two-thirds
of the directors then in office who were directors at the
date of this Agreement or whose election or nomination for
election was previously so approved); or
(5) subject to applicable law, in a Chapter 11 bankruptcy
proceeding, the appointment of a trustee or the conversion
of a case involving Parent to a case under Chapter 7.
(ii) It is specifically understood and agreed however that any event
which would otherwise constitute a Change of Control hereunder which
arises out of or in connection with the IPO shall not constitute a
Change of Control for any purpose hereunder.
(f) Without Good Reason. During the Term, the Employee may
terminate his employment Without Good Reason upon 30 days prior written
notice to Employer of such termination, which notice may be waived by
Employer in Employer's discretion. Termination "Without Good Reason" shall
mean termination of the Employee's employment by the Employee other than
termination for Company Breach.
(g) Explanation of Termination of Employment. Any party terminating
this Agreement shall give prompt written notice ("Notice of Termination")
to the other party hereto advising such other party of the termination of
this Agreement stating in reasonable detail the basis for such termination.
The Notice of Termination shall indicate whether termination is being made
for Cause, Without Cause or for Disability (if Employer has terminated the
Agreement) or for Company Breach, upon a Change in Control or Without Good
Reason (if the Employee has terminated the Agreement).
(h) Date of Termination. "Date of Termination" shall mean the last
day of Employee's employment, as determined in accordance with this Section
1.5.
1.6 Compensation Upon Termination.
(a) During Disability. During any period that the Employee fails to
perform his duties hereunder because of ill health, physical or mental
disability, or any other reason beyond his control, he shall continue to
receive his full salary and benefits pursuant to Section 1.4 (Compensation)
through the Date of Termination.
(b) Termination for Cause or Without Good Reason. If Employer shall
terminate the Employee's employment for Cause or if the Employee shall
terminate his employment Without Good Reason, then Employer's obligation to
pay salary and benefits pursuant to Section 1.4 (Compensation) shall
terminate, except that Employer shall pay the Employee his accrued but
unpaid salary and benefits pursuant to Section 1.4 (Compensation) through
the Date of Termination.
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(c) Termination Without Cause or for Company Breach. If Employer
shall terminate the Employee's employment Without Cause or if the Employee
shall terminate his employment for Company Breach, then Employer shall pay
to the Employee, as severance pay in a lump sum on the 15th day following
the Date of Termination, the following amounts:
(i) his accrued but unpaid Base Salary through the Date of
Termination at the rate in effect as of the Date of Termination;
and (ii) in lieu of any further Base Salary and Annual Incentive
Payments for periods subsequent to the Date of Termination, an
amount equal to the product of (A) the sum of Employee's Base
Salary at the rate in effect as of the Date of Termination plus
the amount of the Annual Incentive Payment paid to the Employee
for the preceding year (or such shorter period for which any
Annual Incentive Payment has been paid) divided by 365 and (B)
multiplied by the number of days from the Date of Termination to
the last day of the Original Term.
In addition, the Employee will be entitled to a prorated portion
of any annual incentive payment earned for the fiscal year in
which his employment is terminated, if earned in accordance with
the terms of its grant.
Employee hereby acknowledges and agrees that the payments by the
Employer under this Section 1.6(c) shall be the sole and exclusive remedy
of the Employee for termination of Employee's employment Without Cause or
by reason of a Company Breach, and Employee hereby waives any and all other
remedies under law or in equity.
If the Employee terminates his employment for Company Breach based
upon a material reduction by Employer of the Employee's Base Salary, then
for purposes of this subsection 1.6(c) (Termination Without Cause or for
Company Breach), the Employee's Base Salary as of the Date of Termination
shall be deemed to be the Employee's Base Salary immediately prior to the
reduction that the Employee claims as grounds for Company Breach.
(d) Termination Upon a Change in Control. If the Employee terminates
his employment after a Change in Control pursuant to subsection 1.5(e)
(Change in Control), then Employer shall pay to the Employee as severance
pay and as liquidated damages (because actual damages are difficult to
ascertain), in a lump sum, in cash, within 15 days after termination, an
amount equal to $100 less than three (3) times the Employee's "annualized
includable compensation for the base period" (as defined in Section 280G of
the Internal Revenue Code of 1986); provided, however, that if such lump
sum severance payment, either alone or together with other payments or
benefits, either cash or non-cash, that the Employee has the right to
receive from Employer, including, but not limited to, accelerated vesting
or payment of any deferred compensation, options, stock appreciation rights
or any benefits payable to the Employee under any plan for the benefit of
employees, would constitute an "excess parachute payment" (as defined in
Section 280G of the Internal Revenue Code of 1986), then such lump sum
severance payment or other benefit shall be reduced to the largest amount
that will not result in receipt by the Employee of a parachute payment. The
determination of the amount of the payment described in this subsection
shall be made by Parent's independent auditors.
(e) Termination for Disability. If Employer shall terminate the
Employee's employment for Disability, Employer's obligation to pay salary
and benefits pursuant to Section 1.4 (Compensation) shall terminate, except
that Employer shall pay the Employee (i)
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accrued but unpaid salary and benefits pursuant to Section 1.4
(Compensation) through the Date of Termination, and (ii) the benefits set
forth in Section 1.6(f) (Employee Benefits) through the Original Term. The
Employer also shall make any additional payments necessary to provide the
disability benefits set forth in Section 1.4(f) (Disability Insurance)
above.
(f) Employee Benefits. Employer shall maintain in full force and
effect (to the extent consistent with past practice), for the continued
benefit of Employee and, if applicable, his wife and children, the employee
benefits set forth in subsections 1.4(e) (Life Insurance), 1.4(f)
(Disability Insurance), 1.4(h) (Fringe Benefits and Perquisites) and 1.4(j)
(Medical Expenses) through the Date of Termination (subject to the
provisions of Section 1.6(e)); provided that his continued participation
or, if applicable, the participation of his wife and children, is possible
under the general terms and conditions of such plans and programs.
1.7 Death of Employee. If Employee dies prior to the expiration of
this Agreement, Employee's employment and other obligations under this Agreement
shall automatically terminate and all compensation to which Employee is or would
have been entitled hereunder (including without limitation under subsections
1.4(a) (Base Salary) and 1.4(b) (Annual Incentive Payment)) shall terminate as
of the end of the month in which Employee's death occurs; provided, however,
that (i) Employer shall pay to Employee's estate, as soon as practicable, a
prorated Annual Incentive Payment, if earned in accordance with Parent's annual
incentive plan; and (ii) for the balance of the month in which Employee's death
occurs, Employee's wife and children shall be entitled to receive their benefits
under Employer's group hospitalization, medical and dental plans (if any), to
the extent permitted under the terms of such plans.
ARTICLE 2
Non-Competition and Confidentiality
2.1 Non-Competition.
(a) Description of Proscribed Actions. During the Term and for a
period of 18 months thereafter, in consideration for the obligations of
Employer and Parent hereunder, including without limitation their
disclosure (pursuant to subsection 2.2(b) (Obligation of The Company)
below) of Confidential Information, the Employee shall not:
(i) directly or indirectly, engage or invest in, own, manage,
operate, control or participate in the ownership, management,
operation or control of, be employed by, associated or in any
manner connected with, or render services or advice to, any
Competing Business (defined below); provided, however, that the
Employee may invest in the securities of any enterprise (but
without otherwise participating in the activities of such
enterprise) if (x) such securities are listed on any national or
regional securities exchange or have been registered under Section
12(g) of the Exchange Act and (y) the Employee does not
beneficially own (as defined Rule 13d-3 promulgated under the
Exchange Act) in excess of 5% of the outstanding capital stock of
such enterprise;
(ii) directly or indirectly, either as principal, agent,
independent contractor, consultant, director, officer, employee,
employer, advisor (whether paid or unpaid), stockholder, partner
or in any other individual or representative capacity whatsoever,
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either for his own benefit or for the benefit of any other person
or entity, solicit, divert or take away any suppliers, customers
or clients of the Company or any of its Affiliates; or
(iii) directly or indirectly, either as principal, agent,
independent contractor, consultant, director, officer, employee,
employer, advisor (whether paid or unpaid), stockholder, partner
or in any other individual or representative capacity whatsoever,
either for his own benefit or for the benefit of any other person
or entity, either (i) hire, attempt to hire, contact or solicit
with respect to hiring, any employee of Employer or Parent or any
Affiliate thereof, (ii) induce or otherwise counsel, advise or
encourage any employee of Employer, Parent or any Affiliate
thereof to leave the employment of Employer, Parent or any
Affiliate thereof, or (iii) induce any representative or agent of
Employer, Parent or any Affiliate thereof to terminate or modify
its relationship with Employer, Parent or such Affiliate.
(b) Judicial Modification. The Employee agrees that if a court of
competent jurisdiction determines that the length of time or any other
restriction, or portion thereof, set forth in this Section 2.1
(Non-Competition) is overly restrictive and unenforceable, the court may
reduce or modify such restrictions to those which it deems reasonable and
enforceable under the circumstances, and as so reduced or modified, the
parties hereto agree that the restrictions of this Section 2.1
(Non-Competition) shall remain in full force and effect. The Employee
further agrees that if a court of competent jurisdiction determines that
any provision of this Section 2.1 (Non-Competition) is invalid or against
public policy, the remaining provisions of this Section 2.1
(Non-Competition) and the remainder of this Agreement shall not be affected
thereby, and shall remain in full force and effect.
(c) Nature of Restrictions. The Employee acknowledges that the
business of Employer and Parent and their Affiliates is international in
scope and that the Restrictions imposed by this Agreement are legitimate,
reasonable and necessary to protect Employer's, Parent's and their
Affiliates' investment in their businesses and the goodwill thereof. The
Employee acknowledges that the scope and duration of the restrictions
contained herein are reasonable in light of the time that the Employee has
been or will be engaged in the business of Employer, Parent and/or their
Affiliates, and the Employee's relationship with the suppliers, customers
and clients of Employer, Parent and their Affiliates. The Employee further
acknowledges that the restrictions contained herein are not burdensome to
the Employee in light of the consideration paid therefor and the other
opportunities that remain open to the Employee. Moreover, the Employee
acknowledges that he has other means available to him for the pursuit of
his livelihood.
(d) Competing Business. "Competing Business" shall mean any
individual, business, firm, company, partnership, joint venture,
organization, or other entity engaged in the wholesale distribution or
retail sales of wireless communication equipment in any domestic or
international market area in which Employer, Parent or any of their
Affiliates does business at any time during the Employee's employment with
Employer or any of its Affiliates.
2.2 Confidentiality. For the purposes of this Section 2.2
(Confidentiality), the term "the Company" shall be construed also to include
Employer, Parent and any and all Affiliates of Employer and Parent.
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(a) Confidential Information. "Confidential Information" shall mean
information that is used in the Company's business and
(i) is proprietary to, about or created by the Company;
(ii) gives the Company some competitive advantage, the
opportunity of obtaining such advantage or the disclosure of which
could be detrimental to the interests of the Company;
(iii) is not typically disclosed to non-employees by the Company,
or otherwise is treated as confidential by the Company; or (iv) is
designated as Confidential Information by the Company or from all
the relevant circumstances should reasonably be assumed by the
Employee to be confidential to the Company.
Confidential Information shall not include information publicly known
(other than as a result of a disclosure by the Employee ). The phrase
"publicly known" shall mean readily accessible to the public in a written
publication and shall not include information that is only available by a
substantial searching of the published literature or information the
substance of which must be pieced together from a number of different
publications and sources, or by focused searches of literature guided by
Confidential Information.
(b) Obligation of The Company. During the Term, the Company shall
provide access to, or furnish to, the Employee Confidential Information of
the Company necessary to enable the Employee properly to perform his
obligations under this Agreement.
(c) Non-Disclosure. The Employee acknowledges, understands and agrees
that all Confidential Information, whether developed by the Company or
others or whether developed by the Employee while carrying out the terms
and provisions of this Agreement (or previously while serving as an officer
of the Company), shall be the exclusive and confidential property of the
Company and (i) shall not be disclosed to any person other than employees
of the Company and professionals engaged on behalf of the Company, and
other than disclosure in the scope of the Company's business in accordance
with the Company's policies for disclosing information, (ii) shall be
safeguarded and kept from unintentional disclosure and (iii) shall not be
used for the Employee's personal benefit. Subject to the terms of the
preceding sentence, the Employee shall not use, copy or transfer
Confidential Information other than as is necessary in carrying out his
duties under this Agreement.
2.3 Injunctive Relief. Because of the Employee's experience and
reputation in the industries in which Employer, Parent and their Affiliates
operate, and because of the unique nature of the Confidential Information, the
Employee acknowledges, understands and agrees that Employer and Parent will
suffer immediate and irreparable harm if the Employee fails to comply with any
of his obligations under Article 2 (Non-Competition and Confidentiality) of
this Agreement, and that monetary damages will be inadequate to compensate
Employer and Parent for such breach. Accordingly, the Employee agrees that
Employer and Parent shall, in addition to any other remedies available to them
at law or in equity, be entitled to injunctive relief to enforce the terms of
Article 2 (Non-Competition and Confidentiality), without the necessity of
proving inadequacy of legal remedies or irreparable harm.
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ARTICLE 3
Representations and Warranties by Employee
Employee hereby represents and warrants, the same being part of the essence
of this Agreement, that, as of the Effective Date, he is not a party to any
agreement, contract or understanding, and that no facts or circumstances exist,
that would in any way restrict or prohibit him from undertaking or performing
any of his obligations under this Agreement. The foregoing representation and
warranty shall remain in effect throughout the Term.
ARTICLE 4
Indemnification
Parent agrees to indemnify, and advance expenses to, the Employee to the
extent provided in the Certificate of Incorporation and Bylaws of Parent as of
the date of this Agreement. To the extent that a change in the Delaware General
Corporation Law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under Parent's
Certificate of Incorporation and Bylaws and this Agreement, it is the intent of
the parties hereto that the Employee shall enjoy by this Agreement the greater
benefits so afforded by such change.
ARTICLE 5
Miscellaneous
5.1 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
5.2 Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power, or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence.
5.3 Employee's Sole Remedy. The Employee's sole remedy shall be against
Employer or Parent for any claim, liability or obligation of any nature
whatsoever arising out of or relating to this Agreement or an alleged breach of
this Agreement or for any other claim arising out of the Employee's employment
by Employer, his service to Employer or its Affiliates or the termination of the
Employee's employment hereunder (collectively, "Employee Claims"). The Employee
shall have no claim or right of any nature whatsoever against any of Employer's
or its Affiliates' directors, former directors, officers, former officers,
employees, former employees, stockholders, former stockholders, agents, former
agents or the independent counsel in their individual capacities arising out of
or relating to any Employee Claim. The Employee hereby releases and covenants
not to xxx any person other than Employer or Parent over any Employee Claim. The
persons described in this Section 5.3 (other than Employer, Parent and the
Employee) shall be third-party beneficiaries of this Agreement for purposes of
enforcing the terms of this Section 5.3 (Employee's Sole Remedy) against the
Employee.
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5.4 Notices. All notices, requests, demands and other communications
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been duly given, made and
received when sent by telecopy (with a copy sent by mail) or when personally
delivered or one business day after it is sent by overnight service, addressed
as set forth below:
If to the Employee:
Hong An-Hsien
If to Employer or Parent:
CellStar Corporation
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Attn: General Counsel
Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this subsection for the giving of notice, which shall be effective only upon
receipt.
5.5 Provisions Separable. The provisions of this Agreement are independent of
and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
5.6 Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained, which shall be deemed terminated effective immediately. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
5.7 Headings; Index. The headings of paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
5.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without giving effect to
principles of conflict of laws.
5.9 Dispute Resolution. Subject to Employer's and Parent's right to seek
injunctive relief in court as provided in Section 2.3 (Injunctive Relief) of
this Agreement, any dispute, controversy or claim arising out of or in relation
to or connection to this Agreement, including without limitation any dispute as
to the construction, validity, interpretation, enforceability or breach of
11
this Agreement, shall be exclusively and finally settled by arbitration, and any
party may submit such dispute, controversy or claim, including a claim for
indemnification under this Section 5.10 (Dispute Resolution), to arbitration.
(a) Arbitrators. The arbitration shall be heard and determined by one
arbitrator, who shall be impartial and who shall be selected by mutual
agreement of the parties; provided, however, that if the dispute involves
more than $2,000,000, then the arbitration shall be heard and determined by
three (3) arbitrators. If three (3) arbitrators are necessary as provided
above, then (i) each side shall appoint an arbitrator of its choice within
thirty (30) days of the submission of a notice of arbitration and (ii) the
party-appointed arbitrators shall in turn appoint a presiding arbitrator of
the tribunal within thirty (30) days following the appointment of the last
party-appointed arbitrator. If (x) the parties cannot agree on the sole
arbitrator, (y) one party refuses to appoint its party-appointed arbitrator
within said thirty (30) day period or (z) the party-appointed arbitrators
cannot reach agreement on a presiding arbitrator of the tribunal, then the
appointing authority for the implementation of such procedure shall be the
Senior United States District Judge for the Northern District of Texas, who
shall appoint an independent arbitrator who does not have any financial
interest in the dispute, controversy or claim. If the Senior United States
District Judge for the Northern District of Texas refuses or fails to act as
the appointing authority within ninety (90) days after being requested to do
so, then the appointing authority shall be the Chief Executive Officer of the
American Arbitration Association, who shall appoint an independent arbitrator
who does not have any financial interest in the dispute, controversy or
claim. All decisions and awards by the arbitration tribunal shall be made by
majority vote.
(b) Proceedings. Unless otherwise expressly agreed in writing by the
parties to the arbitration proceedings:
(i) The arbitration proceedings shall be held in Dallas, Texas,
at a site chosen by mutual agreement of the parties, or if the
parties cannot reach agreement on a location within thirty (30) days
of the appointment of the last arbitrator, then at a site chosen by
the arbitrators;
(ii) The arbitrators shall be and remain at all times wholly
independent and impartial;
(iii) The arbitration proceedings shall be conducted in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as amended from time to time;
(iv) Any procedural issues not determined under the arbitral
rules selected pursuant to item (iii) above shall be determined by
the law of the place of arbitration, other than those laws which
would refer the matter to another jurisdiction;
(v) The costs of the arbitration proceedings (including
attorneys' fees and costs) shall be borne in the manner determined by
the arbitrators;
(vi) The decision of the arbitrators shall be reduced to
writing; final and binding without the right of appeal; the sole and
exclusive remedy regarding any claims, counterclaims, issues or
accounting presented to the arbitrators; made and promptly paid in
United States dollars free of any deduction or offset; and any costs
or
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fees incident to enforcing the award shall, to the maximum extent
permitted by law, be charged against the party resisting such
enforcement;
(vii) The award shall include interest from the date of any
breach or violation of this Agreement, as determined by the arbitral
award, and from the date of the award until paid in full, at 6% per
annum; and
(viii) Judgment upon the award may be entered in any court
having jurisdiction over the person or the assets of the party owing
the judgment or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may
be.
5.10 Survival. The covenants and agreements of the parties set forth in
Article 2 (Non-Competition and Confidentiality), and Article 5 (Miscellaneous)
are of a continuing nature and shall survive the expiration, termination or
cancellation of this Agreement, regardless of the reason therefor.
5.11 Subrogation. In the event of payment under this Agreement, Employer
and Parent shall be subrogated to the extent of such payment to all of the
rights of recovery of the Employee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable Employer or Parent effectively
to bring suit to enforce such rights.
5.12 No Duplication of Payments. Employer and Parent shall not be liable
under this Agreement to make any payment in connection with any claim made
against the Employee to the extent the Employee has otherwise actually received
payment (under any insurance policy, Bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder.
5.13 Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of Employer, Parent, spouses, heirs, and personal and legal
representatives. Employer and Parent shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all, substantially all, or a substantial part, of their business or assets, by
written agreement in form and substance satisfactory to the Employee, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent that Employer or Parent would be required to perform if no such
succession had taken place.
5.14 Contribution. If the indemnity contained in this Agreement is
unavailable or insufficient to hold the Employee harmless in a Claim for an
Indemnifiable Event, then separate from and in addition to the indemnity
provided elsewhere herein, Parent shall contribute to Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by or on behalf of the Employee in connection with such Claim in such proportion
as appropriately reflects the relative benefits received by, and fault of,
Parent on the one hand and the Employee on the other in the acts, transactions
or matters to which the Claim relates and other equitable considerations.
5.15 Parent Guaranty. Parent guarantees the payment and performance of all
obligations of Employer under this Agreement and agrees it will pay or perform
those obligations if for any reason Employer fails to do so. This guarantee is
absolute, continuing, irrevocable and not
13
conditional or contingent. Any notice given hereunder to either Employer or
Parent will be deemed to be notice to Parent for purposes of this guaranty.
5.16 Prior Employment Agreement. This Agreement supersedes, for all
purposes, that certain Employment Agreement, effective as of January 22, 1998,
by and between Employer and Employee.
* * * * * * * *
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IN WITNESS WHEREOF, Employer and Parent have caused this Agreement to be
executed by their officer/general partner thereunto duly authorized, and
Employee has signed this Agreement, as of the date(s) indicated below.
CELLSTAR (ASIA) CORPORATION LIMITED
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx
Director
Date:
CELLSTAR CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx
Chief Executive Officer
Date:
/s/ Hong An-Hsien
----------------------------------
Hong An-Hsien
Date:
15
