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AMENDED AND RESTATED EXECUTIVE SERVICES AGREEMENT

Consulting Services Agreement

AMENDED AND RESTATED EXECUTIVE SERVICES AGREEMENT | Document Parties: CDC CORP | CHINA.COM CORPORATION LIMITED You are currently viewing:
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CDC CORP | CHINA.COM CORPORATION LIMITED

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Title: AMENDED AND RESTATED EXECUTIVE SERVICES AGREEMENT
Date: 6/30/2005
Industry: Computer Services     Sector: Technology

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                                                                 Exhibit 4.(c).1

 

                          CHINA.COM CORPORATION LIMITED

 

                                       AND

 

                           DR. RAYMOND KUO-FUNG CH'IEN

 

                     ----------------------------------------

 

                              AMENDED AND RESTATED

                          EXECUTIVE SERVICES AGREEMENT

                              (EXECUTIVE CHAIRMAN)

 

                    ----------------------------------------

 

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      THIS AMENDED AND RESTATED EXECUTIVE SERVICES AGREEMENT (EXECUTIVE

CHAIRMAN) dated as of March 2, 2005 between china.com Corporation Limited

located at 34/F Citicorp Centre, 18 Whitfield Road, Causeway Bay, Hong Kong (the

"Company") and Dr. Raymond Kuo-Fung Ch'ien located at c/o china.com Corporation

Limited, 34/F Citicorp Centre, 18 Whitfield Road, Causeway Bay, Hong Kong (the

"Executive"). The Company and the Executive are collectively referred to as the

"Parties" and each, a "Party".

 

      WHEREAS, effective as of April 27, 2004, the Company and the Executive had

entered into an Executive Services Agreement pursuant to which the Executive had

agreed to provide certain services to the Company on the terms set forth therein

(the "Original Executive Services Agreement").

 

      WHEREAS, effective as of April 27, 2004, the Company and the Executive had

entered into Amendment No. 1 to the Original Executive Services Agreement

pursuant to which, among other things, the Executive agreed to serve as Acting

Chief Executive Officer of the Company until March 31, 2005 on the terms set

forth in such Amendment.

 

      WHEREAS, the Company and the Executive desire for the Executive to

continue to provide certain services to the Company as both Executive Chairman

and Chief Executive Officer of the Company.

 

      WHEREAS, concurrently with entry into this Amended and Restated Executive

Services Agreement (Executive Chairman), the Company and the Executive have

agreed to enter into an Executive Services Agreement (Chief Executive Officer)

(the "CEO Services Agreement") which sets forth the terms pursuant to which the

Executive has agreed to provide services as Chief Executive Officer of the

Company.

 

       WHEREAS, the Company and the Executive desire to amend and restate in its

entirety the terms pursuant to the Executive has agreed to provide certain

services to the Company as Executive Chairman.

 

      WHEREAS, the terms of this Agreement have been approved by the Board (as

defined below) and the Agreement has been so ratified by the Board.

 

      NOW, THEREFORE, in consideration of the foregoing mutual covenants and

agreements contained herein, the Parties hereby agree, pursuant to the terms of

the Original Executive Services Agreement (as amended) and in accordance with

Clause 14.6 thereof, to amend and restate in its entirety the Original Executive

Services Agreement, as amended by Amendment No. 1 to such Agreement, effective

as of the Effective Date as follows:

 

1.     DEFINITIONS AND INTERPRETATION

 

1.1    In this Agreement, the following words and expressions shall bear the

following meanings, unless the context otherwise requires:

 

      "Appointment Date" means April 27, 2004.

 

      "Associated Company" means any corporation or other business entity or

entities that directly or indirectly controls, is controlled by, or is under

common control with the Company after the Appointment Date or all other entities

in the group of companies of such Associated Companies, and "Associated Company"

shall have a corresponding meaning.

 

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      "Average Trading Price" means the average of the per share closing price

of the Shares on the Nasdaq during the five consecutive trading days ending on

(and including) the trading day that is one trading day prior to such date.

 

      "Board" means the board of directors of the Company from time to time.

 

      "CEO Services Agreement" has the meaning set forth in the recitals above.

 

      "Compensation Committee" means the compensation committee of the Board.

 

      "Company" has the meaning set forth in the introductory paragraph above.

 

      "Confidential Information" has the meaning set forth in Clause 7.2.

 

      "Effective Date" means April 27, 2004.

 

      "Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended.

 

      "Executive" has the meaning set forth in the introductory paragraph above.

 

      "Executive Committee" means the executive committee established by the

Board in accordance with the Company's Articles of Association.

 

      "Hong Kong" means the Hong Kong Special Administration Region of the

People's Republic of China.

 

      "Initial Term" has the meaning set forth in Clause 2.1.

 

       "Option Term" has the meaning set forth in Clause 5.4.

 

      "Options" has the meaning set forth in Clause 5.1.

 

      "Original Executive Services Agreement" has the meaning set forth in the

recitals above.

 

      "Parties" or "Party" has the meaning set forth in the introductory

paragraph above.

 

      "PRC" means the People's Republic of China.

 

      "Prior Services Agreement" means the Executive Services Agreement dated as

of April 27, 2001 between the Parties and any and all amendments thereof.

 

       "Released Party" has the meaning set forth in Clause 3.1.

 

      "Services" means the services rendered by the Executive to the Company as

described in Schedule 1 hereto.

 

      "Shares" has the meaning set forth in Clause 5.1.

 

      "Two Year Period" has the meaning set forth in Clause 13.1.3.

 

      "1999 Stock Option Plan" means the Company's stock option plan, which was

initially registered pursuant to a registration statement on Form S-8 with the

U.S. Securities and Exchange Commission in December 1999, as amended from time

to time.

 

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1.2 Any reference in this Agreement to any ordinance or other enactment shall be

deemed also to refer to any statutory modification, amendment, codification or

re-enactment thereof or substitution therefore or regulations or guidelines

issued under any of the foregoing.

 

1.3 Any reference to a numbered clause or a numbered schedule shall be a

reference to the relevant clause, or as the case may be, the relevant schedule

of this Agreement.

 

1.4 The headings to the clauses of this Agreement shall not affect its

interpretation.

 

2. TERM OF APPOINTMENT AND TERMINATION OF PRIOR SERVICES AGREEMENT

 

2.1 The Company hereby engages the Executive, and the Executive accepts such

engagement, to render Services, including the services of the Executive as the

Executive Chairman of the Company effective the Appointment Date for a period of

thirty-six (36) months until April 27, 2007 (the "Initial Term").

 

2.2 This Agreement shall be automatically renewed for successive periods of one

(1) year after the expiry of the Initial Term unless either the Company or the

Executive informs the other Party in writing not less than three (3) months

prior to the expiration of the then-current term of its or his desire for this

Agreement to not be automatically renewed for the successive term.

 

2.3 The Company and the Executive agree that this Agreement shall supersede and

replace the Prior Services Agreement, and that the Prior Services Agreement is

hereby and forever terminated. The Company and the Executive agree that this

Agreement amends and restates in its entirety the Original Executive Services

Agreement effective as of April 27, 2004, as amended by Amendment No. 1 to such

Original Executive Services Agreement. The Executive hereby releases the Company

from all obligations or claims related to the Prior Services Agreement and the

Original Executive Services Agreement.

 

3. RIGHT TO NOMINATION AS DIRECTOR

 

3.1 For so long as the Executive serves as Executive Chairman of the Company

pursuant to this Agreement, the Executive shall have the right to be nominated

to serve as a Director to the Company's Board, subject to the approval of the

shareholders of the Company. For the avoidance of doubt, in the event the

shareholders of the Company do not approve the Executive to serve as a Director

to the Company's Board, the Executive, irrevocably and unconditionally releases

and waives all claims, causes of action or similar rights of any type arising

under this Clause 3 that the Executive, has or may have against the Company, all

current and former parents, subsidiaries, related companies, partnerships, or

joint ventures, and, with respect to each of them, their predecessors and

successors; and, with respect to each such entity, all of its past, present and

future employees, officers, directors, shareholders, owners, representatives,

assigns and any other persons acting by, through, under or in concert with any

of the persons or entities listed in this clause, and their successors (each, a

"Released Party").

 

4. REMUNERATION

 

4.1 Effective the Appointment Date, the Company shall pay, provide or grant to

the Executive; (a) no basic salary; (b) additional options to purchase the

shares of the Company as described in Clause 5; and (c) the other benefits as

set forth in Clause 6 hereof. The Executive's remuneration shall be payable in

accordance with the usual practice of the Company as at the date hereof which

may be amended from time to time by the Company during the term of this

Agreement. The

 

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Company will not be obliged to increase the Executive's remuneration at any time

during the Initial Term or any renewed term.

 

4.2 To the extent reasonably practicable the Company shall cooperate with the

Executive to ensure that the remuneration arrangements set forth in this

Agreement are structured in a tax efficient manner for all concerned parties.

The Executive agrees and warrants to the Company that he shall indemnify the

Company and any Associated Company, and hold the Company and any Associated

Company harmless against the Executive's non-payment of any income tax,

professional indemnity, and other national, provincial or local taxes or

assessments in connection with his remuneration arrangements and benefits from

the Company and any Associated Company. In addition, the Executive specifically

represents, warrants and covenants to the Company that to the extent that he is

subject to any withholding or deduction under income tax laws of any

jurisdiction with respect to the remuneration arrangements and benefits from the

Company and any Associated Company, that he will hold the Company and each

Associated Company harmless against any non-withholding or non-deduction in

connection with the remuneration arrangements and benefits from the Company and

any Associated Company.

 

4.3 The Executive shall not be entitled to any fee as a director of the Company

or any Associated Company.

 

5. SHARE OPTIONS

 

5.1 Subject to the provisions of this Clause 5, the Executive shall be granted a

total of 800,000 share options under the 1999 Stock Option Plan ("Options") as

set forth in the option award agreement to purchase an equivalent number of the

Company's Class A Common Shares, par value US$0.00025 (the "Shares"). Such

Options shall be granted in three tranches. The first tranche of 300,000 Options

were granted to the Executive at such time as the Board ratified the Original

Executive Services Agreement with an exercise price of US$7.77 per Option, the

fair market value of the Shares on the date of such ratification. The second

tranche of an additional 250,000 Options will be granted to the Executive on the

first anniversary of the Appointment Date at an exercise price equal to the

higher of (i) Average Trading Price and (ii) the fair market value of the Shares

on such date. The third tranche of the remaining 250,000 Options will be granted

to the Executive on the second anniversary of the Appointment Date at an

exercise price equal to the higher of (i) the Average Trading Price and (ii) the

fair market value of the Shares on such date

 

5.2 The Options granted under Clause 5.1 shall vest over the course of the

Initial Term according to a vesting schedule as set forth in Schedule 2;

provided (a) the Executive remains at the Company to provide the Services on the

day the vesting of the relevant portion of those Options takes place and (b)

this Agreement has not otherwise been terminated. Except as otherwise provided

in this Clause 5, the Options granted shall be subject to the terms and

conditions of the 1999 Stock Option Plan.

 

5.3 If the Executive is terminated other than pursuant to Clause 12.1, 12.3,

12.4 or 12.5 of this Agreement, provided that the Executive executes a written

release in favor of the Company and its affiliates, the Company shall cause the

Executive's Options to accelerate and fully vest. In the event of such

termination other than pursuant to Clause 12.1 of this Agreement, the Executive

shall have a reasonable period of time following such termination to exercise

the Executive's Options, such period to be not less than ninety (90) days

following the date the Board determines the Executive is no longer in possession

of material non-public information such that the Executive may freely exercise

the Options in compliance with the Company's insider trading policy and

applicable law. Notwithstanding the above, if under Clauses 12.3, 12.4 or 12.5

the Executive is terminated or initiates the termination as a result of a death

or disability that is tangibly related to the performance of the duties by the

Executive for the Company hereunder, the Company shall cause the Executive's

 

                                        5

 

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Options to accelerate and fully vest and the Executive or his successors or

assigns, as the case may be, shall have up to one year following such

termination to exercise the Executive's Options. For avoidance of doubt if under

Clauses 12.3, 12.4 or 12.5 the Executive is terminated or initiates the

termination as a result of a death or disability that is NOT tangibly related to

the performance of the duties by the Executive for the Company hereunder, the

Executive's Options shall not accelerate but the Executive or his successors or

assigns, as the case may be, shall have up to one year following such

termination to exercise the Executive's Options that had vested as of the date

of termination.

 

5.4 The Executive agrees that, without the prior written consent of the Company,

the Executive will not sell, offer to sell, contract to sell, grant any option

to purchase or otherwise dispose of any Options (whether vested or unvested), or

any securities convertible into, exercisable or exchangeable for such Options

(whether vested or unvested), including the Shares, or in any other manner

transfer all or a portion of the economic consequences associated with the

ownership of any Option (whether vested or unvested) until the expiration of the

"Option Term" which shall be the earlier of (A) the end of the Initial Term (and

any subsequent renewals thereof) or (B) termination of this Agreement; provided,

however, that the provisions of this Clause 5.4 shall not apply to the sale of

Shares received upon exercise of such Options in order to satisfy any tax

liability associated with a disposal permitted by this Clause 5.4. For the

avoidance of doubt, (A) any disposal made pursuant to this Clause 5.4 must also

comply with the provisions of the 1999 Stock Option Plan and any option award

agreement; the Executive may exercise his Options during the Option Term so long

as he complies with this Clause 5.4; and if the Executive's Options are

accelerated and fully vested as a result of Clause 5.3, this Clause 5.4 will no

longer apply.

 

5.5 The award of Options under this Agreement shall not affect the accrued

rights of the Executive in relation to other options on the shares of the

Company or any Associated Company held by the Executive.

 

6. OTHER BENEFITS

 

6.1 Upon presentation of proper vouchers, receipts or other proof, the Company

shall reimburse the Executive with respect to reasonable expenses of the

Executive related to travel, entertaining and subscriptions, in accordance with

the policies of the Company, in each case reasonably incurred in the performance

of his Services. All reimbursable expenses in the amount of $20,000 or less,

shall be approved in writing by the then current chairman of the Company, or in

his absence or if the Executive is such chairman, by two members of the

executive management team comprised of the Chief Financial Officer, General

Counsel and Human Resources Director. All reimbursable expenses in excess of

$20,000, shall be approved in writing by a member of the Audit Committee. The

Executive understands and agrees that at no time will the Executive approve his

own reimbursable expenses. For the avoidance of doubt, the Company or any of its

Associated Companies shall not be required to reimburse any cost associated with

any motor vehicle, chauffeur or executive assistant used or hired by the

Executive during the term o


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