Dated __________ 1999
WORKABLE COMPANY LIMITED
and
TUNG HOK KI
---------------------------------------------------
SERVICE AGREEMENT
---------------------------------------------------
Cameron McKenna
5th Floor
Tower One Lippo Centre
89 Queensway
Hong Kong
T +852 2846 9100
F +852 2845 3575
Ref: JAO/GMC/NKT/02485.0001
THIS AGREEMENT is made the day of 1999
BETWEEN:-
(1) The Company: WORKABLE COMPANY LIMITED, a company incorporated in Hong
Kong whose registered office is at Unit 1, 1st Floor, Tak King Industrial
Building, 27 Lee Chung Street, Chai Wan, Hong Kong; and
(2) You: TUNG HOK KI of 24H, Han Kung Mansion, Taikoo Shing, Hong Kong.
1. Employment
1.1 Your employment under this Agreement will commence on the date of this
Agreement (the "Commencement Date") and will continue until terminated by
either party giving to the other not less than six months' prior notice
to expire on or at any time after the date which is 36 months after the
Commencement Date.
1.2 Your period of continuous employment with the Group commenced on 1 April
1988.
1.3 You are employed as a senior executive of the Company and will perform
such duties as may be reasonably assigned to you from time to time by or
with the authority of the Board. At the Commencement Date, your job title
is Joint Managing Director.
1.4 You will (without further remuneration), if and for as long as the
Company requires, during this Agreement:
1.4.1 carry out duties for the benefit of or on behalf of any Group
Company; and/or
1.4.2 hold any office and/or other appointment in or on behalf of the
Group;
1.5 You will, at all times during the period of this Agreement:
1.5.1 devote the whole of your time, attention and ability during your
hours of work (as set out in Clause 1.6) to the duties of your
employment;
1.5.2 faithfully and diligently perform your duties and exercise only
such powers as are consistent with them;
1.5.3 obey all and any lawful and reasonable directions of the Board;
1.5.4 act only in accordance with the Memorandum and Articles of
Association of the Company or, where acting pursuant to Clause
1.4, of the relevant Group Company;
1.5.5 use your best endeavours to promote the interests of the Group;
and
1.5.6 keep the Board promptly and fully informed (in writing if so
requested) of your conduct of the business or affairs of the Group
and provide such explanations as they may require.
1
1.6 Your hours of work are the normal hours of business of the Company
together with such additional hours as may be necessary for you to
perform your duties properly.
1.7 Your normal place of work is the Company's office at Tak King Industrial
Building, 27 Lee Chung Street, Chai Wan, Hong Kong and/or such other
place of business of the Group as the Board may reasonably require from
time to time. You will, if and for as long as required by the Company,
make visits in the ordinary course of your duties to such places anywhere
in the world as it may specify.
2. Pay
2.1 During your employment, the Company will reimburse you at the rate of
HK$1,300,000 each year (or such higher rate as may be awarded to you
pursuant to Clause 2.3) which will accrue from day to day and be payable
in equal monthly instalments in arrears on or about the last working day
of each month (the "Remuneration"). The Remuneration is inclusive of all
and any fees receivable by you as the holder of offices or appointments
within the Group or on behalf of the Company or any Group Company and is
to be apportioned by you between salary (the "Salary") and housing
allowance (the "Housing Allowance") in accordance with relevant
provisions of Hong Kong law in proportions to be agreed by the Board:-
2.2 The Housing Allowance must be supported by receipts or other
documentation evidencing the expenditure in accordance with procedures
which will be advised to you by the Board.
2.3 On or about 31 December in each year (starting on 31 December 1999), your
Remuneration will be reviewed by the Board and the Board may in its sole
discretion decide to increase the rate of the Remuneration.
2.4 Subject to and in accordance with rules of the bonus or incentive
compensation plan of the Company or Cunningham Graphics International,
Inc. ("CGI") for the time being in force, you will be eligible to receive
a bonus each year, payable within 90 days after the end of the relevant
fiscal year of the Company, of such amount, if any, as the Compensation
Committee of CGI determines in its absolute discretion to be an
appropriate bonus for the Managing Director of the Company, having regard
to your and the Company's achievement of performance goals set annually
in advance by the Compensation Committee in consultation with you.
3. Fringe Benefits
3.1 You are entitled to be and remain a member of the Company's pension
scheme (the "Scheme") subject to the terms of the deed and rules
governing its operation from time to time. The Company is entitled at any
time to terminate the Scheme or your membership of it subject to
procuring membership for you of another pension scheme (the "New Scheme")
providing you with benefits which are not, in aggregate, less favourable
than the benefits provided to you under the Scheme and subject to
procuring that you are fully credited in the New Scheme for your past
pensionable service under the Scheme.
2
3.2 The Company will, subject to Inland Revenue limits for the time being,
contribute (in monthly instalments in arrears) to the Scheme for each
year of your employment an amount equal to 10% of your Remuneration at
the rate then payable.
3.3 The Company will provide you with life assurance cover of four times your
Remuneration payable in the event of your death in service.
3.4 You, your spouse and your children (if any) who are less than 18 years
old are entitled to participate in any permanent health and medical
expenses insurance schemes maintained by the Company from time to time
for the benefit of its senior executives, subject always to the rules of
such schemes, including without limitation, each of you, your spouse and
children undertaking a medical for the purposes of such insurance
schemes.
3.5 The Company will reimburse you for reasonable Automobile Expenses in
connection with the car currently used by you. Subject to the aforesaid,
the Company will provide a suitable (having regard to the image of the
Company and to your status within the Company) car for use on Company
business and you agree to ensure that it is appropriately maintained,
repaired, cleaned, taxed and insured for such use. For the purposes of
this clause, Automobile Expenses shall mean:-
3.5.1 petrol expenses; and
3.5.2 tunnel charges; and
3.5.3 the cost of comprehensive motor vehicle insurance; and
3.5.4 the cost of road tax and the licence fee applicable in Hong Kong;
and
3.5.5 the costs of maintaining the car in proper working order including
the cost of workshop repairs.
3.6 You must comply with all Group regulations relating to Company cars,
notify the Company immediately of any accident involving your car while
being used on Company business and of any charge brought against you for
a traffic offence.
4. Expenses
4.1 The Company will reimburse you with your reasonable travelling,
telephone, hotel, entertainment and other business expenses incurred in
the course of your duties provided that you comply with Group regulations
from time to time in this respect and provide the Company with receipts
or other proof of payment as the Company may require.
4.2 You must make available for business use your home telephone. The Company
will reimburse you with the cost of bills for your home telephone
provided you use any supplier or system designated by the Company and
provided you disclose to the Company any overseas telephone calls not for
the purposes of the business, in respect of which the Company reserves
the right not to reimburse you.
5. Holiday
5.1 In addition to public holidays, you are entitled to 21 working days'
holiday without loss of pay in each holiday year (which runs from January
to December) to be taken at
3
such time or times as may be authorised in advance by the Board. In any
holiday year you may carry forward to the next subsequent holiday year
upto a maximum of 6 untaken working days' holiday so that, for the
avoidance of doubt, the maximum number of working days' holiday which you
may take in any holiday year shall not exceed 27 working days. You may
not, except as provided in this clause, carry forward any unused part of
your holiday entitlement to a subsequent holiday year and no payment in
lieu will be paid therefor.
5.2 In the first holiday year and in the holiday year in which you leave,
your entitlement to holiday will be calculated at the rate of 1.25
working days' holiday for each complete calendar month of your employment
by the Company during that holiday year. Unless you are dismissed
pursuant to Clause 8.2, you will be entitled on termination to pay in
lieu of any unused holiday entitlement. If you have taken holiday in
excess of your accrued entitlement, you will be required to repay any
excess Remuneration you have received for such holiday. The basis for
payment and repayment is 1/360th of your Remuneration for each day.
6. Incapacity
6.1 If you are absent from work because of illness, mental disorder or injury
("Incapacity"), you must report that fact immediately to the Company
Secretary and, after seven continuous days' absence, provide medical
practitioners' certificate(s) of your Incapacity and its cause for
sickness allowance purposes covering the whole period of your absence.
For sickness allowance purposes, your qualifying days are your normal
working days.
6.2 If you are absent from work due to Incapacity and have complied with the
provisions of Clause 6.1, you will continue to be paid sickness allowance
in accordance with the Ordinance. If your absence exceeds 30 consecutive
days, the Company will be entitled to appoint a temporary replacement to
cover your absence.
6.3 You will, whenever requested by the Board (in circumstances where the
Board has reasonable grounds to believe that you may be suffering from
any Incapacity or that you may not be fit to carry out your duties),
submit to examination by a medical practitioner selected and paid for by
the Company. You hereby authorise such medical practitioner to disclose
to and discuss with the Board any matters which, in his opinion, might
hinder or prevent you (if during a period of Incapacity) from returning
to work for any period or (in other circumstances) from properly
performing your duties at any time.
7. Confidentiality and Integrity
7.1 During your employment under this Agreement, you will not:-
7.1.1 directly or indirectly receive or obtain any discount, rebate,
commission or other inducement (whether in cash or in kind) which
is not authorised by regulations or guidelines from time to time
governing dealings by executives on behalf of the Company, or, if
you do, you will account immediately to the Company for the amount
so received;
7.1.2 directly or indirectly disclose or make use of any Confidential
Information for any purpose other than a legitimate purpose of the
Company;
4
7.1.3 (except in the proper course of your duties under this Agreement)
remove from Company premises or copy or allow others to copy the
contents of any document, computer disk, tape or other tangible
item which contains any Confidential Information or which belongs
to the Company; or
7.1.4 at any time make any untrue or misleading statement relating to
the Group.
8. Termination of agreement
8.1 This Agreement will automatically terminate:
8.1.1 when you reach your 65th birthday; or
8.1.2 if you are prohibited by law from being a director;
8.2 The Company will be entitled, by giving notice, to terminate this
Agreement with immediate effect if you:
8.2.1 commit any act of gross misconduct or repeat or continue any other
breach of your obligations under this Agreement; or
8.2.2 engage in any conduct which, in the reasonable opinion of the
Board, is likely to cause your continued employment to be
detrimental to the interests of the Group and fail, within 60 days
of receiving written notice from the Company, to cure the matter;
or
8.2.3 are convicted of any criminal offence; or
8.2.4 commit any act of dishonesty, whether or not relating to your
employment; or
8.2.5 become bankrupt or make any arrangement or composition with your
creditors generally; or
8.2.6 resign or vacate your office as a director of the Company or any
Group Company; or
8.2.7 are, in the reasonable opinion of the Board, incompetent in the
performance of your duties having failed within 60 days of written
notice from the Company, to remedy the position.
8.3 The Company will be entitled to terminate this Agreement notwithstanding
Clause 6.2 or your entitlement at that time to sick pay or benefits under
the Company's permanent health insurance scheme, by notice which is not
less than your then entitlement to statutory minimum notice plus a week
given at any time when you have been absent from work due to Incapacity
for a period or periods aggregating 120 days in the preceding 12 months
provided that the Company will withdraw any such notice if, before it
expires, you resume your duties full time and provide medical evidence
satisfactory to the Board that you are fully recovered and that no
recurrence of your Incapacity can reasonably be anticipated.
8.4 On serving or receiving notice to terminate this Agreement or at any time
thereafter during the currency of such notice the Company is, at its
discretion, entitled to pay you your Remuneration (at the rate then
payable under Clause 2.1 hereof) together
5
with monetary compensation for loss of all fringe benefits and
reimbursement of expenses in lieu of notice.
8.5 At any time after notice (including summary notice) to terminate this
Agreement has been served or received by the Company, the Company may:-
8.5.1 require you to resign (without any claim for compensation) from
any offices and/or appointments which you hold as a director,
nominee or representative of the Company or any Group Company;
and/or
8.5.2 require you to transfer, without payment, to the Company (or as
the Company may direct) any qualifying shares or nominee
shareholdings provided to you by or held by you in or on behalf of
any Group Company; and/or
8.5.3 require you to return to the Company on request any documents,
computer disks and tapes and other tangible items in your
possession or under your control which belong to the Company or
which contain or refer to any Confidential Information; and/or
8.5.4 require you to delete all Confidential Information from any
computer disks, tapes or other re-usable material in your
possession or under your control and destroy all other documents
and tangible items in your possession or under your control which
contain or refer to any Confidential Information; and/or
8.5.5 suspend you from the performance of all or any of your duties
under this Agreement provided that the period of any such
suspension may not exceed 6 months and provided further that where
such action is taken following notice being provided to the
Company by you in circumstances where you are in full compliance
with your obligations under this Agreement, such suspension shall
be without prejudice to the benefits accruing to you under this
Agreement; and/or
8.5.6 appoint a replacement to hold the same or similar job title as you
and/or to carry out all or any of your duties instead of you;
and/or
8.5.7 exclude you from all or any premises of the Group; and/or
8.5.8 require you not, without the prior consent of the Board, to engage
in any contact (whether or not at your own instance) with any
customer, supplier, employee, director, officer or agent of any
company in the Group which touches and concerns any of the
business affairs of the Group.
8.6 If you fail to comply with Clauses 8.5.1 and/or 8.5.2 within seven days
of being so required, the Company is hereby irrevocably authorised to
appoint some person in your name and on your behalf to sign any document
or do any thing necessary or requisite to effect such resignation(s)
and/or transfer(s) (without prejudice to any claims which you may have
against the Company arising out of this Agreement or its termination).
6
9. Intellectual Property
9.1 In relation to each and every improvement, invention or discovery which
relates either directly or indirectly to the business of the Company
which you (jointly or alone) make at any time during your employment, you
will:-
9.1.1 promptly disclose full details, including any drawings and models,
of it to enable the Company to determine whether or not, applying
the provisions of section 57 of the Patents Ordinance (Cap 514 of
the Laws of Hong Kong), it is the property of the Company (a
"Company Invention");
9.1.2 hold any Company Invention in trust for the Company and, at its
request and expense, do all things necessary or desirable to
enable the Company or its nominee to exploit the Company Invention
for commercial purposes and to secure patent or other appropriate
forms of protection for it anywhere in the world. Decisions as to
the patenting and exploitation of any Company Invention are at the
sole discretion of the Company;
9.2 In relation to each and every copyright work or design which relates
either directly or indirectly to the business of the Company (a "Company
Work") which you (jointly or alone) originate, conceive, write or make at
any time during the period your employment:-
9.2.1 you will promptly disclose such Company Work to the Company.
Company Works made wholly outside your normal working hours which
are wholly unconnected with your employment are excluded from the
ambit of Clause 9.2;
9.2.2 you hereby assign to the Company by way of future assignment all
copyright, design right and other proprietary rights (if any)
throughout the world in such Company Work;
9.2.3 you hereby irrevocably and unconditionally waive in favour of the
Company any and all moral rights conferred on you by Division IV
of Part II of the Copyright Ordinance (Cap 528 of the Laws of Hong
Kong) in relation to any such Company Works;
9.2.4 you acknowledge that, for the purposes of section 3(3) of the
Registered Designs Ordinance (Cap 522 of the Laws of Hong Kong),
such Company Works is created in the course of your employment;
9.3 You agree that (at the request and expense of the Company) you will do
all things necessary or desirable to substantiate the rights of the
Company to each and every Company Invention or Company Work and that you
will permit the Company (whom you hereby irrevocably appoint as your
attorney for this purpose) to execute documents, to use your name and to
do all things which may be necessary or desirable for the Company to
obtain for itself or its nominee the full benefit of each and every
Company Invention or Company Work. A certificate in writing signed by any
Director or the Secretary of the Company that any instrument or act falls
within the authority hereby conferred will be conclusive evidence to that
effect so far as any third party is concerned.
7
10. Restrictive Covenants
10.1 For the period of 12 months after the termination of your employment
under this Agreement, you will not directly or indirectly:-
10.1.1 be engaged or concerned or interested in any business carried on
within the Restricted Area wholly or partly in competition with
any Restricted Business (save for the holding as a passive
investor only of not more than 3% of the issued ordinary shares of
any company of a class which are listed or traded on the Hong Kong
Stock Exchange, any other recognised stock exchange or NASDAQ).
10.1.2 seek or accept, in any capacity whatsoever, any business, orders
or custom which is wholly or partly in competition with any
Restricted Business from any Customer.
10.1.3 induce or attempt to persuade any Employee to leave employment or
engagement by the Company or any Group Company or offer employment
or engagement to any Employee.
10.2 You will not at any time after the termination of your employment under
this Agreement, directly or indirectly:-
10.2.1 induce or seek to induce, by any means involving the disclosure or
use of Confidential Information, any Customer to cease dealing
with the Company or any Group Company or to restrict or vary the
terms upon which it deals with the Company or any Group Company;
10.2.2 disclose or make use of any Confidential Information; or
10.2.3 represent yourself or permit yourself to be held out as having any
connection with or interest in the Company or any Group Company.
10.3 Each restriction in Clause 10 (whether drafted separately or together
with another) is independent and severable from the other restrictions
and enforceable accordingly. If any restriction is unenforceable for any
reason but would be enforceable if part of the wording were deleted, it
will apply with such deletions as may be necessary to make it
enforceable.
10.4 The Company may transfer or assign its rights under this Clause 10 to its
successors in title. You may not transfer or assign any rights or
obligations under this Clause 10.
11. Interpretation
11.1 The headings to the clauses are for convenience only and shall not affect
the construction or interpretation of this Agreement.
11.2 Any reference in this Agreement to any ordinance or delegated legislation
shall include any statutory modification or re-enactment of it or of the
provision referred to.
11.3 In this Agreement:
8
"Board" means the board of directors of the Company and includes any
committee of such board duly authorised to act on its behalf.
"Confidential Information" means all and any information (whether or not
recorded in documentary form or on computer disk or tape) of the Company,
any Group Company or any of its or their customers, suppliers or agents
which the Company or the relevant Group Company regards as confidential
or in respect of which it owes an obligation of confidentiality to a
third party which is not part of your own stock in trade and which is not
readily ascertainable to persons not connected with the Company either at
all or without a significant expenditure of labour, skill or money.
"Customer" means any person with whom you or anyone working under your
supervision or control deals personally who, at the termination of your
employment, is negotiating with the Company or any Group Company for
Restricted Business or with whom the Company or any Group Company has
conducted any Restricted Business at any time during the final two years
of your employment with the Group.
"Employee" means any person who is and was, at any time during the period
of two years prior to the termination of your employment, employed or
engaged by the Company or any Group Company in a senior management,
senior technical or senior sales position and who, by reason of such
position, possesses any Confidential Information or is likely to be able
to solicit the custom of any Customer or to induce any Customer to cease
dealing with the Company or any Group Company, were he to accept
employment or engagement in a business which is similar to or in
competition with any Restricted Business.
"Group Company" means a member of a group of companies as defined in
Section 2 of the Companies Ordinance (Cap 32 of the Laws of Hong Kong).
"Group" means the Company and each Group Company.
"NASDAQ" means the National Association of Securities Dealers Automatic
Quotation.
"Ordinance" means the Employment Ordinance (Cap 57 of the Laws of Hong
Kong).
"Restricted Area" means each of Hong Kong , China, Taiwan, Singapore and
any other country in which the Company or any Group Company carries on or
intends to carry on any Restricted Business as at the termination of your
employment.
"Restricted Business" means time-sensitive financial printing and all or
any other commercial activities carried on or to be carried on by the
Company or any Group Company in which you worked or about which you knew
Confidential Information to a material extent at any time during the
final two years of your employment with the Group.
12. General
12.1 You are not subject to any particular disciplinary rules or procedures
but should conduct yourself in a thoroughly professional manner at all
times. In order to investigate a complaint of breach of contract or
misconduct against you, the Company
9
is entitled to suspend you on full pay for so long as the Board considers
appropriate in all the circumstances to carry out a disciplinary
investigation and/or hearing.
12.2 If you have a grievance relating to your employment (other than one
relating to a disciplinary decision), you should refer that grievance to
the Board whose decision will be final and binding on you.
12.3 This Agreement is in substitution for any representations and warranties
made by or on behalf of the Company and any previous contracts of
employment or for services between you and the Company or any Group
Company (which are deemed to have been terminated by mutual consent).
12.4 The termination of this Agreement will not affect such of the provisions
of this Agreement as are expressed to operate or to have effect after
termination and will be without prejudice to any accrued rights or
remedies of the parties.
12.5 The validity, construction and performance of this Agreement is governed
by the law of Hong Kong.
12.6 All disputes, claims or proceedings between the parties relating to the
validity, construction or performance of this Agreement are subject to
the exclusive jurisdiction of the High Court of the Hong Kong Special
Administrative Region (the "High Court") to which the parties irrevocably
submit. Each party irrevocably consents to the award or grant of any
relief in any such proceedings before the High Court and either party is
entitled to take proceedings in any other jurisdiction to enforce a
judgment or order of the High Court.
12.7 Any notice to be given by a party under this Agreement must be in writing
in the English language and must be delivered by hand or sent by first
class post or equivalent postal service, telex, facsimile transmission or
other means of telecommunication in permanent written form (provided that
the addressee has his or its own facilities for receiving such
transmissions) to the last known postal address or appropriate
telecommunication number of the other party. Where notice is given by any
of the prescribed means, it is deemed to be received when, in the
ordinary court of that means of transmission, it would be received by the
addressee. To prove the giving of a notice, it is sufficient to show that
it has been despatched. A notice has effect from the sooner of its actual
or deemed receipt by the addressee.
IN WITNESS whereof this Agreement has been entered into the day and year first
above written:-
SIGNED by )
for and on behalf of )
WORKABLE COMPANY LIMITED )
In the presence of : )
10
SIGNED by TUNG HOK KI )
In the presence of: )
11