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EXHIBIT 10.2
ZINDART LIMITED
EMPLOYMENT AGREEMENT
FOR
XXXXXXXXX X.X. XXXX
Zindart Limited, a corporation organized under the laws of Hong Kong
(the "Company") agrees with you as follows:
1. POSITION AND RESPONSIBILITIES.
1.1 The Company will employ you and you shall serve in an
executive capacity as President and Chief Executive Officer ("CEO") of the
company and perform the duties customarily associated with such capacity from
time to time and at such place or places as the Company shall reasonably
designate or as shall be reasonably appropriate and necessary in connection with
such employment.
1.2 Subject to Section 4 below, you will, to the best of your
ability, devote your full time and best efforts to the performance of your
duties hereunder and the business and affairs of the Company and its
subsidiaries (the "Group"). You agree to continue your service as a director of
the Company and to perform such executive duties as may be assigned to you by
the Company's Board of Directors from time to time. You will be assigned such
facilities and support staff as are customarily associated with the position of
President and CEO. You will report to the Company's Board of Directors, and
employees of the Company will report to you.
1.3 You will duly, punctually and faithfully perform and
observe any and all rules and regulations which the Company may now or shall
hereafter establish governing the conduct of its business, except to the extent
that such rules and regulations may be inconsistent with your executive
position.
2. TERM OF EMPLOYMENT; TERMINATION.
2.1 The effective date of this Agreement is May 8, 1998
("Effective Date").
2.2 Unless otherwise mutually agreed in writing, this
Agreement and your employment by the Company pursuant to this Agreement shall be
terminated on the earliest of:
(a) your death, or any illness, disability or other
incapacity in such a manner that you are physically rendered unable regularly to
perform your duties hereunder for a period in excess of one hundred twenty (120)
consecutive days or more than one hundred eighty (180) days in any consecutive
twelve (12) month period;
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(b) three (3) months after you, for any reason, give
written notice to the Company of your termination;
(c) three (3) months after the Company, with or
without cause, gives written notice to you of your termination; or
(d) three (3) years from the date hereof.
2.3 The determination regarding whether you are physically
unable regularly to perform your duties under (a) above shall be made by the
Board of Directors. Your inability to be physically present on the Company's
premises shall not constitute a presumption that you are unable to perform such
duties.
2.4 Any notice required to be given pursuant to this Section 2
shall be given in accordance with the provisions of Section 12 hereof. The
exercise of either party's right to terminate this Agreement pursuant to
subsections (b) or (c) above shall not abrogate the rights and remedies of the
terminating party regarding the breach, if any, giving rise to such termination.
2.5 Your employment may be immediately terminated for cause
if, in the reasonable determination of the Company's Board of Directors, you are
convicted of any felony or of any crime involving moral turpitude or dishonesty,
or have participated in any fraud against the Group, or have breached your
duties to the Group, or have wrongfully disclosed any trade secrets or other
confidential information of the Group, or have breached this Agreement or the
Employee Proprietary Information And Inventions Agreement between you and the
Company (the "Proprietary Information Agreement").
2.6 If your employment is terminated by the Company in
accordance with this Agreement, you will have no right to work during the period
of notice provided hereunder (although the Company will have the power to
require you to do so) provided that the Company provides you pay in lieu of such
notice. On the termination of your employment, howsoever arising, you shall at
the request of the Company immediately resign from the position of Director of
the Company and all offices held by you in any company in the Group.
3. COMPENSATION:
3.1 For each year of your employment under this Agreement,
during each of the first eleven months you shall receive the basic monthly
salary of Seventeen Thousand Five Hundred U.S. Dollars (U.S. $17,500) and for
the twelfth month you shall receive a monthly salary which is double this
amount, or Thirty Five Thousand U.S. Dollars (U.S. $35,000), subject to increase
as determined in the sole discretion of the Company's Board of Directors in
accordance with Company policy. The salary to be paid you for the first eleven
months of each year shall be referred to herein as the "Basic Monthly Salary."
You shall also be eligible for discretionary benefits of the Company under
bonus, pension, group insurance, long-term disability, life insurance,
profit-sharing or other Company benefit plans which may be in force from time to
time and provided to the Company's employees generally.
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3.2 On the Effective Date, the Company will grant you an
incentive stock option in the amount of four hundred thousand (400,000) shares
of the Company's common stock (the "Option"), with an exercise price equal to
the fair market value of the shares on the grant date. One hundred thousand
(100,000) shares under the Option will immediately vest and become exercisable
on the Effective Date in recognition of your prior services to the Company as a
Director and advisor and one forty-eighth (1/48) of the remaining shares under
the Option will vest and become exercisable at the end of each month thereafter
until all shares of the Option are fully vested; provided, however, that you
must continue to render services to the Company continuously over such period.
The Option shall be subject to the terms of the Company's 1997 Equity Incentive
Plan (the "Plan") and your corresponding Stock Option Grant
3.3 You shall be entitled to vacation and illness days during
the term of this Agreement consistent with the Company's standard practice for
its employees generally.
3.4 In the event your employment is terminated due to a
"Change in Control" of the Company (defined below), in addition to amounts
payable under Section 7 hereof, if applicable, in exchange for a general release
of all claims against the Company and all persons and entities affiliated with
it (the form of which must be satisfactory to the Company), the Company will pay
you severance benefits as follows:
(a) The Company will pay you the Basic Monthly
Salary applicable as of the date of the termination for a period of thirteen
(13) months following any such termination; and
(b) Fifty percent (50%) of the unvested portion of
the Option at the time of the termination of your employment due to a Change in
Control will immediately vest and become exercisable on your employment
termination date; provided, however, that such vesting shall be nullified in the
event that such action would result in an acquisition of the Company that would
otherwise be eligible to be accounted for as a "pooling of interests" accounting
transaction to become ineligible for such accounting treatment. Additionally, in
the event that this nullification provided for in the immediately preceding
sentence by itself would result in an acquisition of the Company to become
ineligible to be accounted for as a "pooling of interests" accounting
transaction, then such nullification shall be deemed inoperative. Accounting
issues shall be determined by the Company's independent public accountants
applying U.S. Generally Accepted Accounting Principles.
(c) For purposes of this Agreement, a "Change of
Control" shall mean (a) a merger or consolidation of the Company with, or any
sale of all or substantially all of the assets of the Company to, any other
person, corporation or entity, unless as a result of such merger, consolidation
or sale of assets the holders of the Company's voting securities prior thereto
hold at least fifty percent (50%) of the total voting power represented by the
voting securities of the surviving or successor corporation after such
transaction; or (b) any event or series of events at the conclusion of which the
stockholders
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of the Company shall cease to beneficially own at least fifty percent (50%) of
the outstanding equity interest in the Company.
4. OTHER ACTIVITIES DURING AND AFTER EMPLOYMENT.
4.1 Except with the prior written consent of the Company's
Board of Directors, you will not during the term of this Agreement undertake or
engage in any other employment, occupation or business enterprise, other than
ones in which you are a passive investor. You may engage in civic and
not-for-profit activities so long as such activities do not materially interfere
with the performance of your duties hereunder.
4.2 Except as permitted by Section 4.3, you will not acquire,
assume or participate in, directly or indirectly, any position, investment or
interest known by you to be adverse or antagonistic to the Group, its business
or prospects, financial or otherwise.
4.3 During the term of your employment by the Company and for
a period of one (1) year following termination of your employment with the
Company, except on behalf of the Company, you will not directly or indirectly,
whether as an officer, director, stockholder, owner, partner, proprietor,
associate, representative, consultant, or in any capacity whatsoever engage in,
become financially interested in, be employed by or have any business connection
with any other person, corporation, firm, partnership or other entity whatsoever
which directly or indirectly competes with the Group in China and Hong Kong, in
any line of business engaged in (or planned to be engaged in) by the Group;
provided, however, that anything above to the contrary notwithstanding, you may
own, as a passive investor, securities of any competitor corporation, so long as
your direct holdings in any one such corporation shall not in the aggregate
constitute more than 1% of the voting stock of such corporation.
4.4 During the term of your employment with the Company and
for a period of two (2) years following termination of your employment with the
Company, you will not, either directly or through others, solicit or attempt to
solicit any employee of the Group, or any independent contractor who performs
forty (40) or more hours per month of services for the Group, to terminate his
or her relationship with the Group in order to become an employee, consultant or
independent contractor to or for any other person or entity.
5. FORMER EMPLOYMENT.
5.1 You represent and warrant that your employment by the
Company will not conflict with and will not be constrained by any prior
employment or consulting agreement or relationship. You represent and warrant
that you do not possess confidential information arising out of any prior
employment which, in your best judgment, would be utilized in connection with
your employment by the Company, except in accordance with agreements between
your former employer and the Company.
5.2 If, in spite of the second sentence of Section 5.1, you
should find that confidential information belonging to any former employer might
be usable in connection with the Company's business, you will not intentionally
disclose to the
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Company or use on behalf of the Company any confidential information belonging
to any of your former employers (except in accordance with agreements between
the Company and any such former employer); but during your employment by the
Company you will use in the performance of your duties all information which is
generally known and used by persons with training and experience comparable to
your own and all information which is common knowledge in the industry or
otherwise legally in the public domain.
6. PROPRIETARY INFORMATION AND INVENTIONS. You agree to be bound by the
provisions of the Proprietary Information Agreement, which you must sign at the
same time you sign this Agreement as a condition of your employment under this
Agreement.
7. POST-EMPLOYMENT CONSULTATION.
7.1 Upon the termination or expiration of your employment with
the Company pursuant to Section 2.2 above, the Company shall have the option to
retain you as a consultant by notifying you in writing of its desire to so
retain you within 30 days following the date of such termination or expiration.
Such notice shall be mailed to you at your last address as it appears in the
Company's records. Whether or not you are retained, you shall, for a period of
24 months after such termination or expiration, notify the Company of any change
of address and each subsequent employment (stating the name and address of the
employer and the nature of your position) or business activity in which you
engage during such 24 months.
7.2 If the Company retains you as a consultant, you shall
during the period of such retention hold yourself available to render consulting
services in your area of expertise or special competence for up to 24 months for
not more than 16 hours per month, for which the Company shall pay you monthly an
amount equal to 50% of your Basic Monthly Salary at the time of the termination
of your employment, whether or not you shall be called upon to render any
services in any such month. Any out-of-pocket expenses which your consulting
activities for the Company may require will be reimbursed against receipts and
vouchers therefor in accordance with the Company's policies in force from time
to time.
7.3 During any period in which you are retained by the Company
as a consultant, the Company may terminate your status as a consultant by giving
you 90 days written notice, during which 90-day period you shall continue to
receive your monthly consulting fee but shall not be obligated to render or hold
yourself available to render any consulting services during such period.
Thereafter the Company shall have no further liability for consulting fees. All
other prohibitions of the Proprietary Information Agreement shall survive
termination of your status as a consultant.
8. GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement will
be governed by and construed according to the laws of Hong Kong as such laws are
applied to agreements entered into and to be performed entirely within Hong Kong
between Hong Kong residents. I hereby expressly consent to the non-exclusive
jurisdiction of the Hong Kong courts for any lawsuit filed there against me by
the Company arising from or related to this Agreement.
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9. REMEDIES. Your duties under the Proprietary Information Agreement
shall survive termination of your employment with the Company. You acknowledge
that a remedy at law for any breach or threatened breach by you of the
provisions of the Proprietary Information Agreement would be inadequate and you
therefore agree that the Company shall be entitled to injunctive relief in case
of any such breach or threatened breach.
10. ASSIGNMENT. Neither this Agreement nor any rights or obligations
hereunder may be assigned by the Company or by you.
11.SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear.
12. NOTICES. Any notice which the Company is required or may desire to
give you shall be given by personal delivery or registered or certified mail,
return receipt requested, addressed to you at the address of record with the
Company, or at such other place as you may from time to time designate in
writing. Any notice which you are required or may desire to give to the Company
hereunder shall be given by personal delivery or by registered or certified
mail, return receipt requested, addressed to the Company at its principal
office, or at such other office as the Company may from time to time designate
in writing. The date of personal delivery or the date of mailing any such notice
shall be deemed to be the date of delivery thereof.
13. WAIVER. If either party should waive any breach of any provisions
of this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
14. COMPLETE AGREEMENT; AMENDMENTS. The foregoing, together with the
Proprietary Information Agreement, is the entire agreement of the parties with
respect to the subject matter hereof and thereof and may not be amended,
supplemented, canceled or discharged except by written instrument executed by
both parties hereto.
15. HEADINGS. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
16. ATTORNEY FEES. If either party hereto brings any action to enforce
its rights hereunder, the prevailing party in any such action shall be entitled
to recover his or its reasonable attorneys' fees and costs incurred in
connection with such action.
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ZINDART LIMITED
By: /s/ Feather Fok
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Date: August 10,1998
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Accepted and agreed this
10th day of August, 1998.
/s/ XXXXXXXXX X.X. XXXX
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XXXXXXXXX X.X. NGAN
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