Exhibit 4.5
BONSO ELECTRONICS INTERNATIONAL INC.
EMPLOYMENT AGREEMENT
WITH
XXX XXX XXXXX
This Employment Agreement is made and entered into effective this 1st
day of April, 2003, by and between Bonso Electronics International Inc., a
British Virgin Islands international business company (the "Company"), and Xxx
Xxx Xxxxx, an individual ("Executive").
RECITALS
A. The Company desires to be assured of the association and services
of Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and
the Company is willing to employ Executive, upon the terms, covenants and
conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its Director of
Engineering and Research and Development.
2. Term. The term of this Agreement shall be for a period of five (5)
years effective as of April 1, 2003, and ending on March 31, 2008 (the "Initial
Term"), unless terminated earlier pursuant to Section 6 below. This Agreement
shall be automatically renewed for successive one year periods (the "Renewal
Term") unless, at least 90 days prior to the expiration of the Initial Term or
any Renewal Term, either party gives written notice to the other party
specifically electing to terminate this Agreement at the end of the Initial Term
or any such Renewal Term.
3. Compensation; Reimbursement.
3.1 Base Salary. For all services rendered by Executive under this
Agreement, the Company shall pay Executive a base salary of Xxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxx Xxxxxx Dollars (US$150,000) per year (the "Base Salary"). The
Base Salary shall be payable in equal, consecutive monthly installments. It is
expressly understood and agreed that the Base Salary may be increased upon the
approval of the Company's Compensation Committee (if such a committee exists) or
by a majority of the members of the Board of Directors.
3.2 Bonus. In addition to the Base Salary and the Deferred
Compensation, the Company shall pay Executive such Bonus or Bonuses as the Board
of Directors shall determine in their sole discretion.
3.3 Additional Benefits. In addition to the Base Salary and the Bonus,
Executive shall be entitled to all other benefits of employment provided to the
employees of the Company.
3.4 Reimbursement. Executive shall be reimbursed for all reasonable
"out-of-pocket" business expenses for business travel and business entertainment
incurred in connection with the performance of his duties under this Agreement.
The reimbursement of Executive's business expenses shall be upon monthly
presentation to and approval by the Company of valid receipts and other
appropriate documentation for such expenses.
4. Scope of Duties.
4.1 Assignment of Duties. Executive shall have such duties as may be
assigned to him from time to time by the Company's Board of Directors
commensurate with his experience and responsibilities in the positions for which
he is employed pursuant to Section 1 above. Such duties shall be exercised
subject to the control and supervision of the Board of Directors of the Company
and the Chief Executive Officer of the Company.
4.2 General Specification of Duties. Executive's duties shall include,
but not be limited to those duties that are generally associated with the
positions of the Director of R&Dof a company similarly situated to the Company.
The foregoing specification is not intended as a complete itemization
of the duties which Executive shall perform and undertake on behalf of the
Company in satisfaction of his employment obligations under this Agreement.
4.3 Executive's Devotion of Time. Executive hereby agrees to devote
his full time abilities and energy to the faithful performance of the duties
assigned to him and to the promotion and forwarding of the business affairs of
the Company, and not to divert any business opportunities from the Company to
herself or to any other person or business entity.
4.4 Conflicting Activities.
(a) Executive may, during the Initial Term or any Renewal Term of this
Agreement, be engaged in other business activities without the prior consent of
the Board of Directors of the Company; provided, however, that Executive may not
compete directly with the Company. Further, nothing in this Agreement shall be
construed as preventing Executive from investing his personal assets in passive
investments in business entities which are not in competition with the Company
or its affiliates, or from pursuing business opportunities as permitted by
Section 4.4(b).
(b) Executive hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or anticipated
future business of the Company, in a manner consistent with the best interests
of the Company and with his duties under this Agreement. Should Executive
discover a business opportunity that does not relate to the current or
anticipated future business of the Company, he shall be free to pursue that
opportunity without first offering such opportunity to the Company. It is
expressly understood that in developing any business opportunity for himself;
such development may not in any material way conflict or interfere with the
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duties owed by Executive to the Company under this Agreement. As used herein,
the term "business opportunity" shall not include business opportunities
involving investment in publicly traded stocks, bonds or other securities, or
other investments of a personal nature.
5. Change of Control. If any time during the Initial Term or any
Renewal Term of this Agreement there is a change of control of the Company, as
defined below, and Executive's employment is terminated by the Company under
Section 6.1(a), (b), (c) or (d) within the greater of one (1) year following the
change of control or the remaining term of this Agreement (the "Change of
Control Date"), the Company shall pay to Executive (a) the balance of all
amounts due from the Change of Control Date until the end of the Initial Term,
including deferred compensation, due under this Agreement plus (b) an amount
equal to five times the sum of (i) his annual Base Salary as in effect on the
date of termination plus (ii) the amount of bonus paid in the prior year to
executive, and (c) any other amounts due to Executive under any other provision
of this Agreement. This amount shall be paid to Executive in one lump sum as
soon as practicable, but in no event later than one hundred twenty (120) days,
after the date that Executive's employment is terminated. In addition to the
lump sum payment referenced in the preceding sentence, the Company shall pay to
Executive any accrued and unpaid Bonuses as provided for in Section 3.2 at the
same time as the lump sum payment is made. For example, if the Change of Control
Date was April 1, 2003, the amount paid to would be equal to [$150,000 (Base
Salary) + $0.00 (Deferred Compensation)] X 5 (years remaining on contract)] +
[$150,000 (base salary) + $0.00 (deferred compensation) X 5] or an aggregate of
$1,500,000).
For purposes of this subsection, a Change of Control shall mean a
change in control of the Company of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), whether
or not the Company is subject to such reporting requirement; provided, however,
that, anything in this Agreement to the contrary notwithstanding, a Change in
Control shall be deemed to have occurred if:
(1) Any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity or person, or any
syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act, is or becomes the "beneficial owner" (as defined in Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
directly or indirectly, of securities of the Company representing 30%
or more of the combined voting power of the Company's then outstanding
securities entitled to vote in the election of directors of the
Company;
(2) During any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement) individuals who at
the beginning of such period constituted the Board and any new
directors, whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof;
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(3) Within two years after a tender offer or exchange offer for voting
securities of the Company, the individuals who were directors of the
Company immediately prior thereto shall cease to constitute a majority
of the Board;
(4) There occurs a reorganization, merger, consolidation or other
corporate transaction involving the Company (a "Transaction"), in each
case, with respect to which the stockholders of the Company
immediately prior to such Transaction do not, immediately after the
Transaction, own more than 50 percent of the combined voting power of
the Company or other corporation resulting from such Transaction; or
(5) All or substantially all of the assets of the Company are sold,
liquidated or distributed.
6. Termination.
6.1 Bases for Termination.
(a) Executive's employment hereunder may be terminated at any time by
mutual agreement of the parties.
(b) This Agreement shall automatically terminate on the last day of
the month in which Executive dies or becomes permanently incapacitated.
"Permanent incapacity" as used herein shall mean mental or physical incapacity,
or both, reasonably determined by the Company's Board of Directors based upon a
certification of such incapacity by, in the discretion of the Company's Board of
Directors, either Executive's regularly attending physician or a duly licensed
physician selected by the Company's Board of Directors, rendering Executive
unable to perform substantially all of his duties hereunder and which appears
reasonably certain to continue for at least six consecutive months without
substantial improvement. Executive shall be deemed to have "become permanently
incapacitated" on the date the Company's Board of Directors has determined that
Executive is permanently incapacitated and so notifies Executive. If Executive's
employment under this Agreement is terminated pursuant to this Section 6.1(b),
the Company shall (i) make a lump sum cash payment to Executive within 10 days
after termination is effective of an amount equal to (1) Executive's Base Salary
accrued to the date of termination; (2) unreimbursed expenses accrued to the
date of termination; and (3) any other amounts due to Executive under any other
provision of this Agreement. In addition, Company shall pay Executive or his
family (if Executive is deceased) an amount equal to Three times the Executive's
annual Base Salary within 60 days after termination is effective. For purposes
of this provision, Executive's annual Base Salary shall be calculated as of the
termination date.
(c) Executive's employment may be terminated by the Company (for any
reason or no reason at all) at any time by giving Executive 180 days prior
written notice of termination, which termination shall be effective on the 180th
day following such notice. If Executive's employment under this Agreement is so
terminated, the Company shall (i) make a lump sum cash payment to Executive
within 10 days after termination is effective of an amount equal to (1)
Executive's Base Salary accrued to the date of termination; (2) unreimbursed
expenses accrued to the date of termination; (3) an amount equal to the greater
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of (a) Five times the Executive's annual Base Salary (i.e., 60 months of Base
Salary), or (b) amounts remaining due to Executive as Base Salary (assuming that
payments under this Agreement were made until expiration of the Initial Term or
if applicable the Renewal Term), and (4) any other amounts due to Executive
under any other provision of this Agreement. For purposes of this provision,
Executive's annual Base Salary and the remaining portion of the term of the
Agreement shall be calculated as of the termination date. In addition to the
lump sum payment referenced in the preceding sentence, the Company shall pay to
Executive the Bonus provided for in Section 3.2 based upon the number of days in
the year that Executive was employed by the Company, within one hundred five
days after the end of the fiscal year in which Executive was terminated.
(d) Executive may terminate his employment hereunder by giving the
Company 60 days prior written notice, which termination shall be effective on
the 60th day following such notice.
6.2 Payments Upon Termination Pursuant To Sections 6.1(a), or (d).
Upon termination under Sections 6.1(a), or (d), the Company shall pay to
Executive within 10 days after termination an amount equal to the sum of (1)
Executive's Base Salary accrued to the date of termination; (2) unreimbursed
expenses accrued to the date of termination, and (3) any other amounts due to
Executive under any other provision of this Agreement. Except for the foregoing
compensation then due and owing, the Company shall not be obligated to
compensate Executive, her estate or representatives after any such termination.
7. Miscellaneous.
7.1 Transfer and Assignment. This Agreement is personal as to
Executive and shall not be assigned or transferred by Executive without the
prior written consent of the Company. This Agreement shall be binding upon and
inure to the benefit of all of the parties hereto and their respective permitted
heirs, personal representatives, successors and assigns.
7.2 Severability. Nothing contained herein shall be construed to
require the commission of any act contrary to law. Should there be any conflict
between any provisions hereof and any present or future statute, law, ordinance,
regulation or other pronouncement having the force of law, the latter shall
prevail, but the provision of this Agreement affected thereby shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law, and the remaining provisions of this Agreement shall remain in full
force and effect.
7.3 Governing Law. This Agreement is made under and shall be construed
pursuant to the laws of BVI.
7.4 Counterparts. This Agreement may be executed in several
counterparts and all documents so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all of the parties
did not sign the original or the same counterparts.
7.5 Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties with respect to the subject matter hereof and
supersedes all prior oral or written agreements, arrangements and understandings
with respect thereto. No representation, promise, inducement, statement or
intention has been made by any party hereto that is not embodied herein, and no
party shall be bound by or liable for any alleged representation, promise,
inducement or statement not so set forth herein.
7.6 Modification. This Agreement may be modified, amended, superseded
or cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
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party or parties to be bound by any such modification, amendment, supersession,
cancellation or waiver.
7.7 Attorneys' Fees and Costs. In the event of any dispute arising out
of the subject matter of this Agreement, the prevailing party shall recover, in
addition to any other damages assessed, its attorneys' fees and court costs
incurred in litigating or otherwise settling or resolving such dispute whether
or not an action is brought or prosecuted to judgment. In construing this
Agreement, none of the parties hereto shall have any term or provision construed
against such party solely by reason of such party having drafted the same.
7.8 Waiver. The waiver by either of the parties, express or implied,
of any right under this Agreement or any failure to perform under this Agreement
by the other party, shall not constitute or be deemed as a waiver of any other
right under this Agreement or of any other failure to perform under this
Agreement by the other party, whether of a similar or dissimilar nature.
7.9 Cumulative Remedies. Each and all of the several rights and
remedies provided in this Agreement, or by law or in equity, shall be
cumulative, and no one of them shall be exclusive of any other right or remedy,
and the exercise of any one or such rights or remedies shall not be deemed a
waiver of, or an election to exercise, any other such right or remedy.
7.10 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement.
7.11 Notices. Any notice under this Agreement must be in writing, may
be telecopied provided that evidence of the transmission and receipt is created
at the time of transmission, sent by express 24-hour guaranteed courier, or
hand-delivered, or may be served by depositing the same in the United States
mail, addressed to the party to be notified, postage-prepaid and registered or
certified with a return receipt requested. The addresses of the parties for the
receipt of notice shall be as follows:
If to the Company: Bonso Electronics International, Inc.
If to Executive: Xxx Xxx Xxxxx
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
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notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice by
giving notice thereof in the manner provided above.
7.12 Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on Executive and the
Company.
7.13 Right of Set-Off. Upon termination or expiration of this
Agreement, the Company shall have the right to set-off against the amounts due
Executive hereunder the amount of any outstanding loan or advance from the
Company to Executive.
7.14 Effective Date. This Agreement shall become effective as of the
date set forth on page 1 when signed by Executive and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
XXX XXX XXXXX XXXXX ELECTRONICS INTERNATIONAL, INC.
/s/ Xxx Xxx Xxxxx By: /s/ Xxxxxxx So
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Xxxxxxx So, Chief Executive Officer and
Director
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