EXHIBIT 10.16

EMPLOYMENT AGREEMENT

 

between

 

PEAK PLASTICS & METAL PRODUCTS (INTERNATIONAL) LIMITED

 

and

 

JERRY MO

 

Dated: January 16, 2003

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Employment Agreement

January 16, 2003

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THIS AGREEMENT is made as of January 16, 2003 between PEAK PLASTICS & METAL
PRODUCTS (INTERNATIONAL) LIMITED, a company incorporated in Hong Kong, with its
principal office at Units 3 to 5 & 7, 37th Floor, Cable TV Tower, 9 Hoi Shing
Road, Tsuen Wan, Hong Kong (the “Company”); and Jerry Mo, residing at Flat B2,
5th Floor, 1 to 2 Hok Yu Lane, Kowloon, Hong Kong (the “Employee”).

 

The parties agree as follows:

 

1. PAYMENTS AND TERM

 

  1.1.   The Company shall pay the sum of US$100,000 to Employee upon execution
of this Agreement and the Release attached hereto as Appendix II.

 

  1.2.   The term (“Term”) of this Agreement shall commence on January 16, 2003
and shall remain in effect until the earlier of (a) January 15, 2005 or (b)
until terminated as hereinafter provided.

 

  1.3.   Employee shall be paid a monthly salary of US$16,666.67 and shall be
entitled to participate in all Company benefit plans in effect from time to
time. Except as set forth on Exhibit A, The Fringe Benefit List, attached hereto
and made a part hereof, there are no benefits payable or available to Employee
that are not payable to all employees of the Company generally.

 

  1.4.   Subject to clauses 1.5, 1.6 and 3, the Employee shall be entitled to a
lump-sum payment in an amount equal to US$200,000 (the “Termination Payment”)
within 15 days of the termination of employment during the term hereof, and all
of Employee’s stock options which would have vested within 18 months of the date
of termination of employment shall immediately vest in full and, notwithstanding
anything to the contrary contained in any other document, be fully exercisable
for a period of one year.

 

  1.5.   The Termination Payment shall be in full and final settlement of any
rights, payments or benefits to which the Employee is entitled under any other
agreement or arrangement pursuant to which he is employed by the Company or any
of its subsidiaries or affiliates other than:

 

  1.5.1.   benefits pursuant to any life, disability, health, or other insurance
policy or benefit plan provided by the Company;

 

  1.5.2.   stock options issued to Employee pursuant to any stock option plan of
Peak International Limited, (“PEAK”) an affiliate of the Company.

 

  1.6.   The Employee shall not be entitled to the Termination Payment if
employment is terminated in any of the following circumstances (the Employee
being entitled, in such

 

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circumstances, only to payment for accrued and unused vacation, any payments to
which he is otherwise entitled pursuant to life, disability, health or other
insurance plan, and to exercise any stock option to the extent otherwise vested
and exercisable under the terms of such plan and stock option agreements):

 

  1.6.1.   the conviction of the Employee of a felony involving dishonesty;

 

  1.6.2.   termination of the Employee for Good Cause. “Good Cause” shall mean
(i) Employee’s conviction of or guilty plea to the commission of an act or acts
constituting a felony, (ii) action by the Employee involving personal
dishonesty, theft or fraud in connection with the Employee’s duties as an
officer of the Company, or (iii) a breach of any one or more material terms of
this Agreement (including but not limited to the confidentiality and
non-solicitation provisions contained herein.).

 

  1.6.3.   any material breach by the Employee of the terms of this Agreement
that the Employee has failed to cure within 10 days of receipt of written notice
of such breach from the Company;

 

  1.6.4.   the death of the Employee;

 

  1.6.5.   the inability of the Employee due to ill health or physical or mental
condition to perform the duties and responsibilities in the ordinary and usual
manner required of a person in the Employee’s position for 180 consecutive days;

 

  1.6.6.   the resignation by the Employee, except if such resignation is the
result of any of the following actions by the company (which actions are
hereinafter referred to as “Good Reason”): (1) the assignment to the Employee of
duties materially inconsistent with the Employee’s position as Vice President,
Finance; or (2) a reduction by the Company of the Employee’s base salary to less
than US$200,000 per year.

 

2. CHANGE IN CONTROL

 

  2.1.   “Change in Control” of the Company means any transaction or series of
transactions in which any of the following occurs:

 

  2.1.1.   the acquisition by any “person” (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) or by PEAK or a person that directly or indirectly controls, is
controlled by, or is under common control with PEAK) of the “beneficial
ownership” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of PEAK representing fifty percent (50%) or more of
the total voting power represented by PEAK’s then

 

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  outstanding   voting securities,

 

  2.1.2.   the consummation of a merger or consolidation of PEAK with or into
any other corporation, other than a merger or consolidation that would result in
the voting securities of PEAK outstanding prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of PEAK or such surviving entity
outstanding immediately after such merger or consolidation, or

 

  2.1.3.   the consummation of a plan of complete liquidation of PEAK or of the
sale or disposition by PEAK of all or substantially all of PEAK’s assets.

 

  2.2.   In the event Employee’s employment with the Company is terminated in
anticipation of or within two years following a Change of Control (i) by the
Company without Good Cause or (ii) by Employee with Good Reason (as defined
above), then, in addition to the payments Employee shall be entitled to pursuant
to paragraph 1, above, all of Employee’s stock options shall immediately vest in
full and, notwithstanding anything to the contrary contained in any other
document, be fully exercisable for a period of one year.

 

3. LIMITATION ON PAYMENTS

 

  3.1.   In the event that the payments to Employee under this Agreement (i)
constitute “parachute payments” within the meaning of Section 280G of the Code,
and (ii) but for this Section 3, would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code or any similar or successor provision,
then the payments shall be reduced to such lesser amount that would result in no
portion of the payments being subject to excise tax under Section 4999 of the
Internal Revenue Code. Any determination required under this Section 3 shall be
made by the Company’s independent accountants (the “Accountants”), whose
determination shall be conclusive and binding upon Employee and the Company for
all purposes. For purposes of making the calculations required by this Section
3, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company
and Employee shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this Section 3.

 

4. CONFIDENTIALITY

 

  4.1.   The Employee understands that by virtue of the Employment, the Employee
has been and will be exposed to confidential information, including all ideas,
information and materials, tangible or intangible, relating to the business of
the Company and its

 

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subsidiaries and affiliates, their personnel (including their officers,
directors, shareholders, trustees, agents, employees and contractors), their
customers, clients, vendors, suppliers, distributors, consultants, and others
with whom the Company and its subsidiaries and affiliates do business
(“Confidential Information”).

 

  4.2.   The Employee agrees not to disclose any Confidential Information
obtained during the Employment for a period of 12 months after the termination
of the Employment and thereafter not to disclose the same unless the proposed
recipient of the Confidential Information has entered into an undertaking with
the Company to keep the same confidential on terms no less exacting than those
set out herein; and provided always that the Employee shall not be obliged to
keep confidential any Confidential Information required to be disclosed as a
matter of law or to the extent that it becomes generally known to the public
other than as a result of any breach by the Employee of the terms herein.

 

  4.3.   The Employee covenants and undertakes that after the termination of the
Employment, the Employee

 

  4.3.1.   shall not for a period of 12 months after the termination of the
Employment use any Confidential Information for any purpose;

 

  4.3.2.   shall not retain or take with the Employee any Confidential
Information in a tangible form, which includes ideas, information or materials
in written or graphic form, on a computer disc or other medium, or otherwise
stored in or available through electronic or other form (“Tangible Form”); and

 

  4.3.3.   shall immediately deliver to the Company any Confidential Information
in a Tangible Form that the Employee may then or thereafter hold or control, as
well as all other property, equipment, documents or things that the Employee was
issued or otherwise received or obtained during the Employment.

 

5. RESTRICTIVE COVENANTS

 

  5.1.   The Employee covenants and undertakes that for a period of 12 months
following the termination of the Employment for any reason, the Employee shall
not:

 

  5.2.   directly or indirectly induce any person who is an employee of the
Company (or any of its subsidiaries) to terminate his or her employment with the
Company (or any of its subsidiaries), whether or not such termination
constitutes a breach of that person’s employment contract;

 

  5.3.   directly or indirectly solicit the customer or business of any person
who, as at the date of termination of the Employment, is (or, within the
preceding period of 12 months, was) a client or customer of the Company or its
subsidiaries, with the intention or for the

 

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purpose of supplying (or procuring the supply of) precision engineered
semiconductor packing material (including, without limitation, the collecting
and recycling of semiconductor packing material); or

 

  5.4.   directly or indirectly and whether on his own account or on account of
any future employer, partner or associate, compete with the Company or otherwise
engage in or provide services related to the precision engineered semiconductor
packing business (including, without limitation, the business of collecting and
recycling semiconductor packing material) in Hong Kong, Singapore, Malaysia or
the United States of America.

 

6. RELEASE

 

  6.1.   In consideration of, and as an express condition precedent to, the
Company’s obligation to make the Termination Payment, the Employee shall sign
and deliver to the Company a General Release in the form attached hereto as
Appendix 1.

 

  6.2.   The Company shall not be obliged to make the Termination Payment in the
event that the General Release is not signed and delivered to the Company within
15 days of receipt of notice following termination of the Employment and the
Company shall, thereafter, be released of its duties and obligations or further
duties and obligations under this Agreement and the Employee shall waive or
cause to be waived any claims that the Employee may have under this Agreement.

 

7. ASSIGNMENT

 

  7.1.   The rights and obligations under this Agreement shall inure to and be
binding upon the parties hereto and their respective heirs, successors and
assigns.

 

8. NOTICES

 

  8.1.   All notices and other communications provided for hereunder must be in
writing and must be sent by courier to the party’s address indicated above or to
such other address as may be designated by a party by notice. A copy of any
notice by Employee to the Company shall be sent by courier to: Peak
International Limited, 44091 Nobel Drive, Fremont, CA 94506 Attn. Jack Menache

 

  8.2.   Notices hereunder shall be effective when delivered.

 

9. MISCELLANEOUS

 

  9.1.   This Agreement shall supersede any and all prior written or oral
agreements and discussions between the Employee and the Company regarding the
subject matter hereof, including, without limitation, the Employment Agreement
of December 1, 2000. This

 

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Agreement contains the entire understanding of the parties in respect of the
subject matter hereof.

 

  9.2.   If any of the restrictions contained in this Agreement shall be void or
unenforceable, then the remainder of this Agreement shall be enforced to the
fullest extent permitted by law.

 

  9.3.   This Agreement is made in and shall be governed by and construed in
accordance with the laws of Hong Kong.

 

10. DISPUTES

 

  10.1.   Any dispute hereunder shall be settled by binding arbitration in Hong
Kong in the English language before a single arbitrator pursuant to the rules of
arbitration of the International Chamber of Commerce. Each party shall bear its
own legal fees and costs. The cost of arbitration shall be paid by the Company.

 

11. Survival

 

  11.1.   Sections 2, 4, 5, 6, 9, and 10 shall survive the termination of this
Agreement.

 

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement the day
and year first above written.

 

/s/    JERRY MO         

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Jerry Mo

 

SIGNED by

 

/s/    JACK MENACHE        

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duly authorized for and on behalf of

PEAK PLASTIC & METAL PRODUCTS (INTERNATIONAL) LIMITED

 

 

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Employment Agreement

January 16, 2003

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EXHIBIT A

THE FRINGE BENEFIT LIST

 

The Company will make the following fringe benefits available to Employee during
the term of the Agreement:

 

1. Use of the following Company car: 1997 Mazda MPV. This benefit shall cease at
such time as the vehicle is no longer reasonably servicable.

 

2. A Bonus in the amount of $US12,500 on January 15 and July 15 of each year
during the term of this agreement provided Employee is employed by the Company
on the payment date. If Employee is not employed by the Company on the payment
date due to layoff by the Company for its convenience, then, in such event,
Company shall pay to Employee a final pro rated bonus based on the portion of
the period actually worked.

 

3. The Company shall issue two stock options to Employee as follows:

 

a. 17,000 shares vesting on December 31, 2003.

 

b. 83,000 shares vesting on September 1, 2004.

 

Each such stock option shall be issued pursuant to PEAK’s stock option plans and
shall be a nonqualified stock option and shall have a term of approximately four
years. The exercise price of the stock option shall be the fair market value of
PEAK common stock determined in accordance with the terms of the plan on the
date of grant. The date of grant shall be the date the options are issued by
PEAK’s Compensation Committee or Board of Directors, as the case may be.

 

4. Stock Options as summarized on the Options and Awards Summary dated January
15, 2003, attached hereto and made a part hereof. (None of the terms and
conditions of such stock options shall be amended by the terms of this
Employment Contract and all such stock options shall be subject to all of the
terms and conditions of the applicable PEAK stock option plan.)

 

5. As of January 15, 2003, Employee has no accrued and unused vacation time.

 

Except as set forth above, there are no fringe benefits or perquisites that are
available to Employee that are not made available to all employees of the
Company generally.

 

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Employment Agreement

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APPENDIX I

 

GENERAL RELEASE

 

[Insert Date]

 

I, Jerry Mo, hereby release Peak Plastic & Metal Products (International)
Limited and its subsidiaries, parent and affiliates (hereinafter collectively
referred to as the “Company”) of certain duties and obligations and waive any
rights or remedies that I may have against the Company as provided in this
letter. This letter is delivered pursuant to the Employment Agreement entered
into between Peak Plastic & Metal Products (International) Limited and me dated
January 16, 2003 (the “Employment Agreement”).

 

In consideration of the promises and mutual covenants contained in the
Employment Agreement, and for good and valuable consideration, the receipt and
sufficiency of which is expressly acknowledged, I hereby:

 

  1.   release and discharge the Company and its subsidiaries, and each of their
respective past and present officers, directors, shareholders, managers,
employees and agents, and their respective successors and assigns (collectively
the “Released Parties”), from any and all claims or demands, that I may have,
whether past, present or future, against the Released Parties, statutory or
otherwise, to the fullest extent permissible by law; and

 

  2.   waive the obligations, duties and liabilities that the Company may have,
whether past, present or future, statutory or otherwise, to the fullest extent
permissible by law; arising out of or relating in any way to my employment with
or termination of my employment with the Company.

 

This letter shall be governed by, subject to and construed and enforced pursuant
to the terms and conditions of the Employment Agreement.

 

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Jerry Mo

 

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Employment Agreement

January 16, 2003

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APPENDIX II

 

GENERAL RELEASE

 

January 16, 2003

 

I, Jerry Mo, hereby release Peak Plastic & Metal Products (International)
Limited and its subsidiaries, parent and affiliates (hereinafter collectively
referred to as the “Company”) of certain duties and obligations and waive any
rights or remedies that I may have against the Company as provided in this
letter. This letter is delivered pursuant to the Employment Agreement entered
into between Peak Plastic & Metal Products (International) Limited and me dated
January 16, 2003 (the “Employment Agreement”).

 

In consideration of the promises and mutual covenants contained in the
Employment Agreement, and for good and valuable consideration, the receipt and
sufficiency of which is expressly acknowledged, I hereby:

 

  1.   release and discharge the Company and its subsidiaries, and each of their
respective past and present officers, directors, shareholders, managers,
employees and agents, and their respective successors and assigns (collectively
the “Released Parties”), from any and all claims or demands that I may have from
the beginning of time through the date of this release, against the Released
Parties, statutory or otherwise, to the fullest extent permissible by law; and

 

  2.   waive the obligations, duties and liabilities that the Company may have,
whether past, present or future, statutory or otherwise, to the fullest extent
permissible by law; arising out of or relating in any way to my employment with
the Company or any of its affiliates except as arising under the Employment
Contract to which this Appendix II is attached.

 

This letter shall be governed by, subject to and construed and enforced pursuant
to the terms and conditions of the Employment Agreement.

 

/s/    JERRY MO       

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Jerry Mo

 

 

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