EXHIBIT 10.19
 

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PacificNet Inc. (Nasdaq:PACT)

US Office: 860 Blue Gentian Road, Suite 360, Eagan, MN 55121, USA. Tel. +1 (651)
209-3100 Fax. +1 (651) 209-3103
HK Office: Unit 1702, ChinaChem Century Tower, 178 Gloucester Road, Wanchai,
Hong Kong.  Tel: (852) 28762900 Fax: (852) 2793 0689
 
PACIFICNET INC. EXECUTIVE EMPLOYMENT CONTRACT

THIS EMPLOYMENT CONTRACT (“CONTRACT”) is made as of the 25th day of March, 2003,
by and between PacificNet Inc., a company registered in the State of Delaware,
USA, with its primary office located at 860 Blue Gentian Road, Suite 360, Eagan,
MN 55121-1575, USA (“PacificNet” or “Company”);
and Mr. Victor Tong. (“Executive”).

WHEREAS, PacificNet desires to employ Executive, and Executive is willing to
accept such employment upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and of the agreements
hereinafter contained, the parties agree as follows:

1. Position and Duties. The Company hereby affirms its employment of Executive
as its Vice President of North America Operations, Executive Director, and
Company Secretary, to perform the duties and functions as are specified by the
Company’s Articals of Incorporation and ByLaws, under the authority of the Board
of Directors.

Duties include but not limited to:

l  
IR/PR in North America, communication with instutional investors, retail
investors, brokers, research analysts, market makers, road-shows, etc.

l  
Business development in North America, business promotion, developing new
customers, identifying and negotiating with potential customers in North
America.

l  
Corporate Compliance: keep compliance with NASDAQ, the SEC, federal and state
regulatory requirements, federal/state/IRS tax compliance, social security
compliance, Code of Ethics, etc.

l  
Company Secretary: keeping track of all company records, board minutes, company
registration records, critical corporate records and file backup, etc.

 
In addition to performing the duties and exercising the powers in connection
with the business of the Company which the Board of Directors may from time to
time assign to the Executive, the Executive shall further exercise the power and
the business of any associated and/or subsidiary companies of the Company and/or
the parent company of the Company, PacificNet Inc., 860 Blue Gentian Road, Suite
360, Eagan, MN 55121-1575, USA, as may be requested by the Board of Directors
from time to time.

Executive hereby accepts such continued employment and, during the Employment
Term shall perform his duties (as set forth herein) in a diligent, trustworthy,
loyal, businesslike and efficient manner, all for the purpose of advancing the
business of the Company and increase shareholder value.

2. Term. The commencement date of this employment CONTRACT is January 1, 2003,
and shall continue on for a term of three (3) years, or until he resigns or is
terminated in accordance with Section 5 of this CONTRACT.

3. Compensation. As compensation for his services, Executive shall receive the
following compensation, expense reimbursement and other benefits:

a.          
Base Salary. For all services rendered by Executive pursuant to this CONTRACT,
the Company shall pay Executive an annual salary of US$58,000, out of which
US$48,000 is payable in Cash and US$10,000 is payable in freely tradable and
fully registered PACT Shares (the number of PACT Shares to be issued each month
is based on the average price of PACT shares during the month). Such annual
salary shall be paid once per month in equal installments and shall be subject
to such periodic cost of living and/or merit increases as PacificNet’s Board of
Directors in its discretion as it may deem appropriate.

 
 
 

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b.         
Performance Bonuses. For distinguished services, Executive may be entitled to a
annual performance bonus (payable in Cash, stock options or free trading PACT
shares) as granted by the Compensation Committee as it may deem appropriate.

c.         
Quarterly Stock Options. Executive shall be entitled to quarterly stock options
grant as recommended by the CEO and approved the Compensation Committee as it
may deem appropriate

d.         
Housing Allowance.  Executive shall be entitled to US$2,000 per month as
accommodation allowance. This accommodation allowance should be used to minimize
any possible hotel and lodging expenses in Minneapolis, Hong Kong, ShenZhen,
GuangZhou, Beijing.

e.          
Allowances for Automobile. Executive shall be entitled to an Automobile
Allowance of US$500 per month.

f.          
Reimbursement of Expenses. Executive shall be reimbursed, upon submission of
appropriate vouchers and supporting documentation, for all travel,
communications, entertainment and other out-of-pocket expenses incurred by
Executive in the performance of his duties hereunder.

g.         
Medical and Life Insurance Coverage. Executive and his immediate family shall be
entitled to medical, dental, out-patient, hospitalization, health and life
insurance coverages. The Company also agrees to provide Executive with a term
life insurance policy. The amount of such policy shall be determined by the
Company provided that such policy shall provide benefits in an amount at least
equal to US$200,000. The Company’s Board of Directors may from time to time
grant Executive further benefits.

h.         
Relocation and Moving Allowances.  If relocation is needed, Executive shall be
compensated for all the necessary moving and relocation expenses, visa fees,
regular family visit travel expenses, and children’s education and school
expenses as a result of the move or relocation.

i.          
Annual Leave. Executive shall be entitled to paid annual vacation of thirty (30)
days. Any unused vacation in a particular year may be carried over into the
following year.

 
4. Other Terms of Employment. All other conditions of employment will be in
accordance with the terms and conditions outlined in the Company's Conditions of
Employment Handbook.

5. Termination.

a.         
Termination Upon Notice. Executive’s employment by PacificNet may be terminated
at the discretion of either the Board of Directors of the Company or Executive
by means of written notice given to the other at least 90 days prior to the
effective date of such termination. Executive’s employment shall terminate
immediately in the event of Executive’s death or “Disability” (as defined
below).

b.         
Severance Pay. In the event Executive’s employment by PacificNet is terminated
by PacificNet for reasons that do not constitute “Cause” (as defined below)
then:

 

(i)            
PacificNet shall continue to pay Executive his base salary (in cash, stock and
options, and on the same dates as would have been paid had he remained an
employee) at the same rate (combined base rate and annual bonus rate per pay
period as was in effect at the time of termination for a period of six (6)
months after the date of termination. The severance period shall increase to
twelve (12) months in the event of a Change in control of the Company.

 
‘Change in Control’ shall mean (1) the consummation of a merger or consolidation
of the Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the continuing
or surviving entity’s securities outstanding immediately after such merger,
consolidation or other reorganization is owned by persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization; or (2) the sale, transfer or other disposition of all or
substantially all of the Company’s assets; or (3) the consummation of
transactions that result in more than 50% of the combined voting power or
beneficial interests of the Company’s securities being owned by persons who are
current stockholders of the Company. A transaction shall not constitute a Change
of Control if its sole purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities
immediately before such transaction."
 
 
 

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(ii)          
Those options to purchase shares in PacificNet which have been granted to
Executive by PacificNet, and which would have (but for such termination) vested
and become exercisable at the next vesting date following such termination,
shall become vested as of the date of termination and (together with any options
which have already vested) shall be exercisable for a period of up to 5 years
after the date of termination, at which time any unexercised options shall
terminate.

 

(iii)        
PacificNet shall provide medical, dental, and life insurance benefits for a
period of 12 months after termination.

 

c.           
“Cause” Defined. For purposes of this CONTRACT, “Cause” means: (i) a material
violation of a specific written resolution by the majority of the Board of
Directors; (ii) gross negligence or willful misconduct by Executive as to a
matter which is material to PacificNet. No termination shall be for “Cause”
under clauses (i) or (ii) above unless Executive shall have first received
written notice from the Company’s Board of Directors advising Executive of the
act or omission that constitutes Cause and, if such act or omission is capable
of cure, has continued uncured for 60 days or such longer period for cure as is
specified in PacificNet’s notice identifying such act or omission.

d.           
“Disability” Defined. For purposes of this CONTRACT, “Disability” means that
Executive shall have failed, because of illness or incapacity, to render
services of the character contemplated by this CONTRACT for a period of three
consecutive months and on the date of determination continues to be so disabled.
The existence or nonexistence of disability shall be determined in good faith by
the Board of Directors after notice in writing given to Executive at least 30
days prior to such determination. During such 30-day period, Executive shall be
permitted to make a presentation to the Board of Directors for its
consideration.

e.           
Surrender of Records and Property. Upon termination of his employment with
PacificNet, Executive shall deliver promptly to PacificNet all records,
documents, letters, memoranda, notes, notebooks, reports, data, tables,
calculations or copies thereof, which are the property of PacificNet.

6. General Provisions.

a.           
Successors; Assignment. This CONTRACT shall be binding upon and inure to the
benefit of PacificNet and its respective successors and assigns, and any entity
which purchases all or substantially all of the business assets of PacificNet,
and any such other entity shall be deemed “PacificNet” hereunder. Company agrees
that Executive shall have to right to assign the compensation and terms of this
CONTRACT to a consulting company designated by Executive. This CONTRACT shall be
binding upon and inure to the benefit of Executive and its respective successors
and assignees.

 

b.           
Entire Agreement; Modifications. This CONTRACT constitutes the entire agreement
between the parties respecting the subject matter hereof, and supersedes all
prior negotiations agreements with respect thereto, whether written or oral. No
provision of this CONTRACT may be modified or waived except by a written
agreement signed by the parties hereto.

 
 
 

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c.           
Obligations and Benefits. The obligations and benefits set forth in this
CONTRACT shall be binding and inure to the benefit of the respective parties
hereto and their personal representatives, successors and permitted assigns.

d.           
Governing law. This CONTRACT shall in all respects be interpreted, construed and
governed by and in accordance with the laws of Minnesota, USA and the parties
hereby submit to the non-exclusive jurisdiction of the Minnesota, USA courts.

e.           
Severability. If any portion or portions of this CONTRACT shall be, for any
reason, invalid or unenforceable, the remaining portion or portions shall
nevertheless be valid and enforceable.

f.            
Counterparts. This CONTRACT may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same CONTRACT.

7. Non-Disclosure Agreement. Executive acknowledges the interest of the Company
in maintaining the confidentiality of information related to its business and
shall not at any time during the Employment Term or thereafter, regardless of
the reason for or circumstances of termination of employment, directly or
indirectly, reveal or cause to be revealed to any person or entity the
production processes, inventions, trade secrets, customers lists or other
confidential business information obtained by him as a result of his employment
or relationship with the Company, except when authorized in writing to do so by
the Board of Directors of the Company; provided, however, that the parties
acknowledge that it is not the intent of this section to include within its
subject matter (i) information not proprietary to the Company, or (ii)
information which is in the public domain.
 
8. Notices. All notices and other communications under this CONTRACT will be
sufficient if written and sent by registered or certified mail, return receipt
requested, in the case of Executive, to his residence as shown on the Company’s
records, and in the case of the Company, to its registered office.

In Witness Whereof, this CONTRACT has been executed as of the date first written
above.

EXECUTIVE:

/s/ Victor Tong                                         
Victor Tong     

Approval by the CEO.

Tony Tong, CEO:    /s/ Tony Tong    Date of Approval: __________

Approval by the Compensation Committee.

Justin Tang, Chairman of Compensation Committee:    /s/ Justin Tang    Date of
Approval: __________

 
Approval by the Board of Directors of PacificNet Inc.

Date of Approval:  _____________________________________