EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") dated as June 1, 2000 is between
XinLei Wang (the "Employee") and Intermost Corporation (the "Company",
"Employer", or collectively, with subsidiaries, affiliates and related entities,
the "Group"), whose principal office is located at 38/F, Guomao Building, Remnin
Road South, Shenzhen, China 518005.
Whereas the Company desires to employ the Employee, and the Employee desires to
serve the Company, as the Chief Technology Officer of the Company under the
terms and condition of this Agreement; and
Now, therefore, intending to be legally bound hereby, Employee and Company
agrees as follows:
Article 1: Position and Duties
The Company shall employ Employee as its Chief Technology Officer, subject to
the approval of Board of Directors of Intermost Corporation, under the terms and
subject to the conditions set forth herein. The Employee will be classified as,
and shall assume duties appropriate for the position of an executive officer of
the Company.
During the Term, the Employee shall diligently and faithfully serve the Group
and shall devote all his working time, attention and efforts toward the
performance of his duties and responsibilities hereunder. Employee shall not,
directly or indirectly, without the prior consent of the Company's Board of
Directors, as owner, partner, joint venture, stockholder, employee, corporate
officer or director, engage or become financially interested in, or be concerned
with any other duties or pursuits which interfere with the performance of his
duties hereunder, or which even if non-interfering, may be inimical or contrary
to the best interest of the Group.
These duties include, but are not limited to, assisting the President and
management of the Company and/or the Group to:
(a) Maximize long-term shareholder value of the companies in the Group and the
Group's profitability by formulating and executing Intermost's Business
plan and strategic plan for becoming a long-term player in the Internet
industry in the People's Republic of China (PRC) and other areas;
(b) Provide the Group sound technical and other professional advice, and
provide leadership in formulating and executing the Group's strategic
development, marketing and technology plan;
(c) Provide leadership in Company's technical planning and execution; Lead
Company technology development activities;
(d) Perform such other duties as the Company President and management team
and/or the Group President and management team may reasonably require.
Article 2: Term
The term of the employment of the Employee by the Company pursuant to this
Agreement (the "Term") is for a period commencing June 1, 2000 and terminating
two years later, on May 31, 2002, unless sooner terminated in accordance of the
terms hereof.
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Article 3: Compensation
(a) Base Salary. In consideration of the Employee's service rendered pursuant
hereto and the Employee's compliance with the covenants and restrictions
set forth in section 6 here, Company shall pay to the Employee, effective
as of the date hereof, an annual base salary of HK$455,000 (the "Base
Salary"). This Base Salary will be paid by the Group to the Employee in
Hong Kong. All tax liabilities relating to the Base Salary and taxable
benefits, including income taxes payable by the Employee, shall be for the
account of the Employee. The Base Salary shall be reviewed by the Company
at least annually and may be adjusted from time to time, at the sole
discretion of the Board of Directors of the Company.
(b) Payment. The Company shall pay the Employee by paying HK$35,000.00 on the
last business day of each month. The Employee shall receive double pay at
the end of Chinese lunar year.
(c) Bonus. During the period of the Employee's employment, the Company agrees
to award the Employee an annual bonus in an amount of HK$100,000, payable
in the manner determined by the Company, provided that the revenues of the
Group exceed US$5,000,000 for the first year of employment and US$6,000,000
for the second year of employment.
(d) Allowance. During the period of the Employee's employment, the Company will
reimburse to the Employee for his out-of-pocket expenses related to the
Company business, according to the Company policy.
(e) Stock Options. Upon the commencement of the Employment Term, Employee shall
receive options (each an "Option" and together, the "Options") to purchase,
on each of the first anniversary and second anniversary of this Agreement,
the following shares of the Common Stock of Intermost (the "Option Shares")
at the prices indicated:
Anniversary Date Number of Shares Price per share
First Anniversary 150,000 US $3.00
Second Anniversary 230,000 US $4.00
(i) The Options shall be fully vested immediately, and shall be
immediately exercisable, notwithstanding the exercise periods
specified above, upon a Change of Control. A "Change of Control" shall
mean the occurrence of any of the following: (i) a sale of
substantially all of Intermost's assets in a single transaction or a
series of related transactions or a complete liquidation of Intermost,
or (ii) any other event that the Board of the Intermost determines to
be a Change of Control.
(ii) The Option Shares shall be shares of Intermost, which can be
registered under a registration statement filed with the Securities
and Exchange Commission of the United States.
(iii)The Options are intended to be part of an employee stock option plan
to be executed by Intermost in favor of the Employee. To the extent
that any terms of this Agreement are inconsistent with the terms of
any such plan, the terms of this Agreement shall control. Intermost is
executing this Agreement and is a party hereto for the sole purpose of
confirming and agreeing to the provisions contained in paragraphs 3(d)
through 3(j) of this Agreement.
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(f) Method of Exercising Options. The Options may be exercised by written
notice to Intermost at its principal executive office, or to such transfer
agent as the Intermost shall designate. Such notice shall state the
election to exercise an Option and the number of Option Shares for which it
is being exercised, and shall be signed by the person so exercising the
Option. Such notice shall be accompanied by payment of the full purchase
price of such shares, and Intermost shall deliver a certificate or
certificates representing such shares as soon as practicable after notice
shall be received; provided that the person exercising the Option may pay
all or any portion of the purchase price by electing to have Intermost
withhold Option Shares, or by delivering previously owned shares of
Intermost, having a fair market value equal to the amount to be paid.
(g) Termination of Options. The Options shall terminate on the earlier of the
following:
(i) one (1) year after the termination of the employment of the Employee
by death, disability or for any other reason; and
(ii) the tenth anniversary of the date of this Agreement.
(h) Options Not Transferable. The Options are not transferable or assignable
except (i) by will or by the laws of descent and distribution, (ii) as
approved by the Board of Directors of Intermost, (iii) to the Employee's
spouse, ex-spouse, children, step-children, mother or father (the
"Immediate Family") (iv) to an entity in which the Employee or his
Immediate Family, individually or collectively, have at least 99% of the
equity, profit and loss interest, or (v) to a trust holding the option for
the benefit of the Employee (each such transferee under subsections (ii)
through (v) being referred to as a "Permitted Transferee"). During the
Employee's lifetime only the Employee or a Permitted Transferee can
exercise this option.
(i) Sales of Option Shares. Employee shall not sell shares obtained through the
exercise of an Option prior to one year after the Option is exercised.
(j) Capital Adjustments. If at any time while the Options are in effect or
unexercised there shall be any increase or decrease in the number of issued
and outstanding shares of the Common Stock of Intermost due to (i) the
declaration of or payment of a stock dividend, or (ii) any recapitalization
resulting in a stock split, combination or exchange of shares or (iii) any
other increase or decrease in such shares effected without receipt of
consideration by Intermost, then the number of Option Shares then subject
to purchase shall be adjusted to the end that the same proportion of
Intermost's issued and outstanding shares of Common Stock in each such
instance shall remain subject to purchase at the same aggregate price as
provided in this Agreement. Except as expressly provided above, the
issuance by Intermost of shares of its capital stock of any class shall not
affect, and no adjustment by reason thereof shall be made for, the number
of or price of Option Stock granted under this Agreement
(k) Personal Income Tax. Personal income tax payable upon the sale of any
Option Shares shall be borne by the Employee.
(l) Retirement Plans and other Deferred Compensation Plans. The Employee shall
be entitled to participate under all qualified and nonqualified retirement
or deferred compensation plans approved by the Board of Directors of the
Company for which his position would make him eligible.
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(m) Reimbursement of Expenses. The Company shall reimburse the Employee for all
reasonable out-of-pocket expenses incurred by the Employee in the course of
his duties, in accordance with normal policies of the Company. The Company
also agrees to specifically reimburse the Employee for the following
expenses: one round trip ticket (economy airfare) between one Canadian or
U.S. destination and Hong Kong per year of employment.
Article 4: Vacations
The Employee shall be entitled to 15 business days of vacation under guidelines
established by the Company form time to time. Vacation time shall not cumulate
from year to year.
Article 5: Termination by Company
(a) Death and Disability. Except as provided herein, or any agreement made
pursuant thereto, if the Employee shall die or become "Permanently
disabled" during the term of the Agreement, this Agreement and all benefits
hereunder shall terminate except that such termination shall not affect any
vested rights which the Employee may have at the time of his death pursuant
to any insurance or other death benefit plans or arrangements of the
Company, or any rights under the Options, which rights shall continue to be
governed by the provisions of such plans and agreements or this Agreement,
as applicable. For the purposes of this Agreement, Employee shall be deemed
to be "Permanently disabled" if, during the term here, because of ill
health, physical or mental disability, or for other causes beyond
Employee's control, Employee shall have been unable or unwilling, or shall
have failed to perform his duties hereunder for sixty (60) days for a total
period of one hundred twenty (120) days either consecutive or not after the
Company has made reasonable accommodation for such disability.
(b) Termination for Cause. This Agreement may be terminated by Company for
"Cause" which, for the purpose of this Agreement shall mean: i) the
commission by the Employee of fraud or dishonesty, or another act of
intentional wrongdoing causing harm to Company, or (ii) the conviction of
the Employee of a crime, or (iii) any act of gross negligence or
malfeasance by the Employee causing material harm to Company, or (iv) any
material breach by Employee of this Agreement, which breach is not cured
within thirty (30) days following written notice of such breach from the
Company. Any termination for cause shall be accompanied by a written notice
from the Company to the Employee setting forth in reasonable detail the
reasons for such termination.
(c) Termination without Cause. This Agreement may be terminated by the Company
without cause at any time by delivery of a written notice sixty (60) days
prior to the date of termination. In the absence of such notice, the
Company shall pay the Employee an amount equal to two (2) months of Base
Salary in addition to the severance pay. The severance pay package for
Termination without cause should be no more than (i) an amount equal to
four (4) months of Base Salary; (ii) Half of the number of Stock Options
granted to the Employee in Article 3, Section (e) for the 12 months period
of termination, which shall be vested immediately at the date of
termination.
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Article 6: Termination by Employee
Employee may terminate this Agreement at any time by delivery of a written
notice of resignation to Company ("Notice of Resignation") sixty (60) days prior
to the date of termination. In the event of termination by Employee pursuant to
this provision, Employee shall be entitled to (i) the Base Salary paid or
provided to Employee under this Agreement through the date of termination, and
(ii) exercise the Options, provided the Employer wish to retain the Employee's
services for sixty (60) days. In the event that the Employer elect to have less
than sixty (60) days of service from the Employee, the Employer is obligated to
pay for only the services received. In the event that this Agreement is
terminated pursuant to this provision, and to the extent the Options are not
exercisable, the Options shall cease and be of no further force or effect.
Article 7: Protection of Confidential Information.
Employee acknowledges that his employment by the Company will, throughout the
term of this Agreement, bring him in contact with many confidential affairs of
the Company and/or any companies in the Group not readily available tot he
public, and plans for future developments. In recognition of the foregoing, the
Employee covenants and agrees that he will not use or disclose to anyone outside
of the Company, as the case may be, any material confidential mattes of the
Company and/or any companies in the Group, which are not otherwise in the public
domain, either during or for a period of 36 months after the termination of his
employment with Company, except with the Company's written consistent as
required by court order, law or subpoena, or other legal compulsion to disclose.
Article 8: Covenant Not to Compete
The Employee agrees that during the term of this Agreement, employee shall not
either directly or indirectly, whether by establishing a new business or by
joining an existing one, and whether as a principal, employee, stockholder,
officer, direct, agent, consultant or in any other capacity, compete with the
Company and/or any companies in the Group. This restriction shall apply (i) only
to existing clients of the Group and to those companies for which the Group has
developed a tangible business relationship and (ii) during the period of the
Employee's employment and for a period of twelve months after the termination of
his employment for any reason.
Article 9: Intellectual Property
If during the term of the Agreement, Employee performs work that results in the
development of any inventions relating to processes, formulations and inventions
("Intellectual Property"), such Intellectual Property shall be the exclusive
property of the Company and Employee shall promptly turn over the Intellectual
Property to the Company and shall take all necessary steps, including the
execution of documents, to vest title and ownership of the Intellectual Property
with the Company.
Article 10: Notice
For the purposes of this Agreement, notices, demands and all other
communications provided for in the Agreement shall be in writing and may be sent
either by registered mail or telegram to him at his last known place or
residence. Any notice given by post shall be deemed served at the expiration of
twenty-four hours or may be sent by post addressed, in the case of the Company,
to its registered office and, in the case of the Employee, may be given
personally or may be deemed served at the expiration of twenty-four (24) hours
after the same was posted or sent.
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Article 11: Validity
The invalidity or unenforceability for any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
Article 12: Entire Agreement
This Agreement sets forth the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein, and supersedes all
prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto or any predecessor of any party hereto.
Article 13: Non-Assignability
This Agreement is entered into in consideration of the personal qualities of the
Employee and may not be, nor may any right or interest hereunder be, assigned by
him without the prior written consent of the Company.
Article 14: Choice of Law
This Agreement is to be governed by and interpreted under the laws of the Hong
Kong, without regard to the conflict of law principles.
Article 15: Resolution of Disputes
Any disputes or claims relating to this Agreement or the interpretation, breach,
termination or validity hereof shall be resolved through conciliatory
consultation. If the dispute or claim cannot be resolved through consultation,
the Parties shall apply for arbitration to the Arbitration Association in Hong
Kong, under the International Commercial Arbitration Rules of such association.
The arbitration decision shall be final and conclusive and binding on the
parties.
Article 16: Counterparts
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which other shall constitute one and the
same instrument.
Article 17: Severability
The expiration or termination of this Agreement shall not affect any provisions
hereof (such as "Protection of Confidential Information", "Covenant Not to
Compete", etc.) that shall survive the term of this Agreement.
Article 18: Miscellaneous
No provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by the
Employee and such officers of the Company as be specifically designed by its
Board of Directors. No waiver by either party hereto any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such party shall be deemed a waiver of similar
or dissimilar provisions or conditions the same or at any prior or subsequent
time.
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Article 19: Language
This Agreement shall be written in English. Two original is to be held by
Company, and one original is to be held by Employee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
INTERMOST CORPORATION
By:
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Title & Date:
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EMPLOYEE:
