Exhibit 10.1

 

Employment Agreement

Splendid Zuo

Peak Plastics and Metal Products (International) Limited

August 9, 2005

 

This Agreement is effective August 9, 2005 between Splendid Zuo Yi ( LOGO
[g73747logo1.jpg]), residing at                     , in the Peoples Republic of
China (hereinafter “Employee”), and Peak Plastics and Metal Products
(International) Limited., a Hong Kong corporation with a place of business at
Unit E & F, 19th Floor, CDW Building, 388 Castle Peak Road, Tsuen Wan, Hong Kong
(hereinafter “Peak”).

 

The parties agree as follows:

 

1. Employment: Peak hereby employs Employee as its Vice President, General
Manager, Factory Operations. Employee shall report to Dean Personne, President
and Chief Operating Officer. Employee agrees that Peak is entitled to adjust the
position of the Employee at any time without any reason, but 15 days prior
written notice shall be given. In the event Peak shall reduce substantially the
salary of Employee on any basis other than as part of a general reduction in the
salaries of all officers of the Company, then, in such event, such reduction may
be considered by Employee as a termination of Employee’s employment by Company
for convenience.

 

2. Job Responsibility: Direct, manage, and oversee the operation of the
company’s Factory operations. Responsible for managing costs, insuring the
efficient execution of shipping plans, overseeing all matters related to
personnel assigned to Factory. Responsible for insuring a safe, clean work
facility.

 

3. Limitation on Power: As the General Manager, except otherwise agreed by Peak
in writing, Employee (including any of his relatives and/or any entity in which
he and/or any of his relatives have interest) is not allowed to enter into any
employment contract or other contract with the factory he works in, whose
registered name in Chinese is LOGO [g73747logo2.jpg](the “Factory”).

 

4. Location: Employee shall be located in Shenzhen PRC.

 

5. Compensation, Expenses:

 

  5.1. Salary: Peak shall pay to Employee RMB 50,675 per month. Employee shall
bear his individual income tax by himself according to applicable law. Employee
agrees that Peak or other applicable entity is entitled to withhold the tax
according to applicable law.

 

  5.2. Stock: Employee will be granted a nonqualified stock option to purchase
25,000 shares of Peak International Limited Common Stock. The stock options
shall be subject to the terms and conditions of Peak International Limited’s
1997 or 1998 Stock Option Plan and shall vest over three years. The price of the
option will be the fair market value on the date of grant based on the average
of the high and the low price of the shares on the date of grant. The options
will expire four years from the grant date.

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  5.3. Change in Control.

 

  5.3.1. “Change in Control” of Peak International Limited means any transaction
or series of transactions in which any of the following occurs:

 

  5.3.2. 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 International Limited or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of the
“beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then
outstanding voting securities,

 

  5.3.3. the consummation of a merger or consolidation of Peak International
Limited with or into any other corporation, other than a merger or consolidation
that would result in the voting securities of Peak International Limited
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 International Limited or such surviving entity
outstanding immediately after such merger or consolidation, or

 

  5.3.4. the consummation of a plan of complete liquidation of Peak
International Limited or of the sale or disposition by Peak International
Limited of all or substantially all of the Company’s assets.

 

  5.3.5. In the event Employee’s employment with the Company is terminated in
anticipation of or within two years following a Change of Control by the Company
without Good Cause, then, 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.

 

6. Benefits: Employee shall participate in the benefit plans offered by the
factory generally to its employees. Employee shall not participate in any
benefit plans offered to employees of the company resident in Hong Kong.

 

7. Termination for Convenience: This Agreement shall remain in effect until
terminated by either party. Any party is entitled to terminate this Agreement at
any time without any reason, but 30 days prior written notice shall be given.

 

  7.1. Each party represents to the other that it will exercise its best efforts
during the first six months of this employment agreement to cooperate with one
another

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       with the goal of mutual success. Notwithstanding anything to the contrary
set forth in this Agreement, neither party shall terminate this employment
contract during the initial six months of the term of the agreement without
substantial reason, such as labor disruptions and disputes, violations of laws
and regulations, insubordination, conflicts of interest, unexcused failure to
report to work for more than five days, and similar egregious acts by the other
party.”

 

  7.2. In the event Peak shall elect to terminate the employment of Employee for
convenience and not for cause, as hereinafter defined, then Peak shall pay to
Employee the following amounts:

 

  7.2.1. Six months pay, and

 

  7.2.2. An amount equal to a maximum of 12 months pay, being the long service
payment that would have been payable under the laws of the PRC to Employee had
Employee remained in the employ of the Factory, provided that Employee shall
make no claim for nor attempt in any way to collect such payment or any portion
thereof from the Factory, or in fact collect such amount from the Factory or any
other party.

 

8. Release and Waiver.

 

  8.1. Employee shall sign a release and waiver of all claims as a condition of
payment of the amounts payable to Employee pursuant to paragraph 7 above. Such
release and waiver to be in a form reasonably satisfactory to Employer.

 

9. Waiver of Claims: Employee represents that he has resigned voluntarily from
any and all positions with the Factory and that he has given up any and all
claims for compensation in connection with said employment, including without
limitation, any claim for long service payments.

 

10. Stock Options: All stock options heretofore granted to Employee shall remain
in full force and effect according to their terms and none shall be deemed to be
cancelled as a result of Employee’s resignation from employment with the
Factory.

 

11. Notices: Any notice required or permitted to be given hereunder may be given
by email, fax, courier, personal delivery, or other method and shall be
effective upon actual delivery.

 

12. Disputes: This Agreement is made in and shall be construed in accordance
with the laws of the Peoples Republic of China.

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13. Confidentiality: All of the information developed by Employee shall be the
sole property of Peak. Employee shall maintain the confidentiality of all
information related to Peak or to the work Employee performed for Peak.

 

14. Integration. This Agreement may only be modified from time to time hereafter
by a written instrument signed by an authorized representative of each party.

 

15. Attachments. The following documents are attached to this agreement and
constitute an integral part of the terms hereof:

 

  15.1. Code of Ethics

 

  15.2. Intellectual Property Rights

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in Hong Kong
as of the effective date.

 

Peak Plastics and Metal Products (International) Limited   Splendid Zuo /s/ Dean
Personne   /s/ Splendid Zuo By:  

 

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Dean Personne     President and Chief Operating Officer  

ID No.

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August 9, 2005

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CODE OF ETHICS

 

Dear Colleague:

 

Peak International Limited is committed to serving the best interests of all our
varied constituencies: we strive to increase shareholder value, to provide
customers with quality products, to offer opportunities to all Peak employees,
and to meet our public responsibilities as a member of the global business
community.

 

Since the preservation of our reputation is fundamental to the continued well
being of our business, each employee has a personal responsibility to make sure
that his or her conduct is true to that objective. Proper conduct includes
strict compliance with the spirit and the letter of the laws and regulations
that apply to our business. But it means more than that. It also means that we
are honest and ethical in all of our business practices.

 

We set forth in the succeeding pages the Peak International Limited Code of
Ethics, approved by the Board of Directors. The Code often exceeds the
requirements of the law. The Code does not necessarily provide answers to all
questions that might arise; for that we must ultimately rely on each person’s
judgment as to when it is proper to seek guidance from senior officers of Peak.

 

Read the Code carefully and make sure you understand it and the consequences of
non-compliance. I expect all employees to comply with this Code. If you have any
questions about it or its application to events related to the company, speak
with me, Jack Menache, our Corporate Compliance Officer, or any member of the
board of directors of the company. Section 2 of the Code lists procedures for
making anonymous reports.

 

Our ability to meet the challenges of the future will depend in large measure on
our understanding and support of the Code’s purposes and spirit. We are
committed to providing the most competitive products and finest service to our
customers. Adherence to the policies set forth in the Code will help us to
achieve this goal.

 

Calvin Reed

 

Chairman and Chief Executive Officer

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1. Responsibility To Our People

 

  1.1. We are all responsible for upholding the values, principles and standards
we share as members of the Peak International Limited staff. We must:

 

  1.2. Commit ourselves to creating an environment that encourages and fosters
open communication.

 

  1.3. Respect the privacy and dignity of all individuals.

 

  1.4. Maintain the highest standard of business conduct and ethics when using
electronic resources, such as the computer, phone and fax.

 

  1.5. Report family and personal relationships that may result in a conflict of
interest.

 

  1.6. Dedicate ourselves to maintaining a healthy, safe and secure workplace.

 

  1.7. Except as authorized herein on a de minimus basis, not accept personal
gratuities or give any customer or supplier the impression that we would do so.
Business meals or events where the supplier attends the meal or event may be
accepted if the value of the meal or event does not exceed $100 in any one case
or $1000 in the aggregate in any single calendar year. If a gratuity is offered
that exceeds the guidelines, then the Peak employee will politely refuse,
explaining that it is against company policy to accept the gratuity.

 

  1.8. Follow all company policies governing day-to-day performance of our jobs,
including the standards set forth in this Code of Ethics.

 

  1.9. Not engage in improper or illegal behavior even if directed to do so by
someone in higher authority. No one, regardless of position, has the authority
to direct any of us to commit a wrongful act.

 

2. Open Communication

 

  2.1. The company is committed to providing an environment that encourages and
fosters open communication. This means that we encourage and provide the means
for all company employees to express their ideas, opinions, attitudes and
concerns without fear of reprisal.

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  2.2. Any employee or other person may report, without fear of reprisal, any
actual or suspected wrong-doing of any nature whatsoever related to the company
or its business or customers, including matters related to accounting issues,
internal controls, or auditing issues, to Jack Menache, the company’s Compliance
Officer, or in the discretion of the reporting employee, to Cal Reed, the
company’s CEO, or to Katie Fung, Vice President and Chief Financial Officer. In
addition, any employee may report any matter to the Chairman of the Audit
Committee of the Board of Directors, Christine Russell. Contact information is
set forth below.

 

  2.2.1. Any employee or other person may send a report anonymously if he or she
so chooses. Each report will be reviewed and acted upon, whether or not the
writer identifies himself or herself. While any method selected by the
individual may be used, we encourage the following methods:

 

  2.2.1.1. Mail. Send the report by mail to any one or more of the following
people addressed to the individuals at PO Box 276, Newark, CA. 94538

 

  2.2.1.1.1. Christine Russell, Chairman of the Audit Committee, Peak
International Limited (email:russell@ceva-dsp.com)

 

  2.2.1.1.2. Calvin Reed, Chairman and Chief Executive Officer, Peak
International Limited (email: cal_reed@peakf.com)

 

  2.2.1.1.3. Jack Menache, Vice President, General Counsel, Peak International
Limited (email: jack_menache@peakf.com)

 

  2.2.1.1.4. Katie Fung, Vice President, Chief Financial Officer (email:
Katie_fung@peakf.com)

 

  2.2.1.2. Fax. Send the report by FAX to any one or more of the foregoing
people addressed to the individuals at (510) 449-0102.

 

  2.2.1.3. Email. Send the report by email to any two of the above listed people
at their indicated email address. It is more difficult to send a report
anonymously by email since the sender leaves an electronic trail. Thus, this
method should not be used if the sender wishes to remain anonymous.

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3. Employee Privacy

 

  3.1. We respect the privacy and dignity of all individuals. We limit access to
personal information to authorized personnel who need it for business or legal
purposes, and we will comply with all applicable laws regarding disclosure of
personal information.

 

  3.2. The company does not routinely monitor personal communications and
computer use of its employees, nor search their work spaces. You should not,
however, expect that these communications and work spaces will be private and
the company may elect to monitor such communications and/or search work spaces.
There may be times when appropriate company personnel may access employee work
spaces and monitor electronic and other communications for the safety or
protection of other people, company property or other reasons. Employees are not
permitted to access the electronic communications of other employees or third
parties unless directed to do so by the president or a vice president of the
company.

 

  3.3. The Company uses various forms of electronic communications including,
but not limited to computers, e-mail, telephones, voicemail, fax machines, and
software. All electronic communications, including all software and hardware,
are the sole property of the company and are to be used only for company
business.

 

  3.4. Electronic communication/media may not be used in any manner that would
be discriminatory, harassing or obscene, or for any other purpose which is
illegal, against company policy or not in the best interest of the company.

 

  3.5. Employees who misuse electronic communications and engage in defamation,
copyright or trademark infringement, misappropriation of trade secrets,
discrimination, harassment or related actions will be subject to immediate
termination.

 

  3.6. Employees may not install personal software in company computer systems.
All electronic information created by any employee using any means of electronic
communication is the property of the company. Personal passwords may be used for
purposes of security, but the use of a personal password does not affect

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       the company’s ownership of the electronic information. The company may
override a personal password if, in the judgment of the company, it becomes
necessary to do so.

 

  3.7. Any information about the company, its products or services, or other
types of information that will appear in the electronic media about the company
must be approved by a vice president or president before the information is
placed on an electronic information source.

 

4. Responsibility To Our Organization

 

  4.1. Prohibition on Advances and Loans

 

  4.1.1. The company may not advance or lend money to officers or directors of
the company. Section 402 of the Sarbanes-Oxley Act of 2002 prohibits public
companies from making or arranging personal loans to their executive officers or
directors. Furthermore, any loan or advance of money is subject to Section 96 of
the Bermuda Companies Act.

 

  4.2. Company Time

 

  4.2.1. Company time includes all of the time during the period when we are
assigned to work. We will make the best use of our time, and that of our
colleagues, while meeting our obligations to our customers and owners. We will
be on the job when scheduled and conform to the company’s rules governing our
day-to-day performance. We also must truthfully and accurately report our work
hours.

 

  4.2.2. Company employees who work full time for the company may not seek or
accept other employment without the express written consent of a vice president,
the chief executive officer, or the board of directors.

 

  4.3. Company Property

 

  4.3.1. Company employees must protect all tangible and intangible company
property, including equipment and vehicles, tools, supplies, keys, records and
reports, computer software and data, including e-mail and voice mail, company
proprietary information, intellectual property, and all services that the
company provides. That means:

 

  4.3.2. without specific authorization, no employees may take, loan, donate,
sell,

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       receive, intentionally damage, sabotage, destroy, or otherwise dispose of
any type of company property, regardless of condition or value, or use such
property for non-company purposes;

 

  4.3.3. Company employees must take measures to ensure against theft, damage,
sabotage and misuse of company property and must report any actual or suspected
theft or misuse of company property to management, who in turn must report such
event to a vice president of the company.

 

  4.4. Company Funds

 

  4.4.1. All employees must properly use and protect company cash and its
equivalents, including currency, checks, money orders, postage, charge cards,
bills, vouchers, benefits enrollment forms and reimbursement claims. This means
making sure that all claims, vouchers, bills, estimates and invoices are
accurate and proper.

 

  4.4.2. When and if employees use company charge cards, such as credit cards,
gasoline cards and calling cards, they will do so for company business only.
When approving or certifying any voucher or bill, employees will have reasonable
knowledge that the expense and amounts involved are appropriate and proper.

 

  4.5. Company Reports

 

  4.5.1. Employees must ensure that all company reports, including all time
sheets, vouchers, bills, payroll and service records, measurement and
performance records, and other essential data, whether computerized or on paper,
are accurate and proper.

 

  4.5.2. Employees must follow all laws, regulations and company procedures for
carrying out and reporting business transactions. Employees must also obtain
appropriate authorizations and comply with all internal and external accounting
controls.

 

  4.5.3. Employees may never create a false or misleading report or record
involving vouchers, financial information, measurement data, work time
reporting, benefits enrollment forms or reimbursement claims, or other records
pertaining to company funds or property.

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  4.5.4. Employees must not create or submit false or misleading reports of
operating statistics and measurements (sales or any other reports); nor
suppress, alter or destroy operating data and reports.

 

  4.5.5. Employees must not willfully destroy or alter any corporate accounts,
records or other official company documents without proper authorization.
Employees must not willfully make false entries or conversely, willfully fail to
make correct entries.

 

  4.5.6. Employees will advise all customers and suppliers of any clerical or
accounting errors, as they become known, and effect prompt correction of errors
through credits, refunds or other mutually acceptable means.

 

5. Use of Property Owned by Directors, Officers and Employees

 

  5.1. Directors, officers, and other employees may not charge the company for
the use of assets they own or rent except as specifically authorized by written
policies and procedures, such as reimbursement for personal use of one’s
automobile.

 

6. Conflicts Of Interest—Outside Employment And Other Activities

 

  6.1. A conflict of interest may arise if you engage in any activities or
advance your personal interests at the expense of the company’s interests. It is
your responsibility to avoid situations in which your loyalty may become
divided. Each individual’s situation is different, and, in evaluating your own,
you will have to consider many factors.

 

  6.2. The rules applicable to the most common conflict of interest situations
are provided below. Whenever you have doubts about a possible conflict, you
should review the company policy stated in this Manual. You should also candidly
discuss the matter with the CEO or the company’s General Counsel. Each situation
will be evaluated on a case-by-case basis.

 

7. Assisting a Competitor

 

  7.1. An obvious conflict of interest is assisting an organization that markets
products in competition with the company’s current or proposed product
offerings. Without company consent you may not: (a) work for such an
organization as an employee, consultant or member of its board of directors; or
(b) have any

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     ownership interest in any enterprise which competes with any business of
the company, except as a holder of less than 1 % of publicly traded stock in a
company. Such activities are prohibited because they divide your loyalty between
the company and the other organization.

 

8. Competing Against the Company

 

  8.1. You may not market products in competition with the company’s current or
proposed product offerings.

 

  8.2. It is your responsibility to consult with the CEO or the General Counsel
of the company if you are uncertain whether your planned activity will compete
with any of the company’s actual or proposed product lines. You should obtain
the written approval of the CEO or the General Counsel of the company before
pursuing the activity.

 

9. Supplying the Company

 

  9.1. You may not work for or represent a supplier or vendor to the company, or
be a member of a supplier’s or vendor’s board of directors while you work for
the company. In addition, you may not accept money or benefits of any kind for
any advice or services you may provide to a supplier in connection with its
business with the company.

 

10. Someone Close to You Working in the Industry

 

  10.1. You may find yourself in a situation where your spouse, another member
of your immediate family, or someone else you are close to is a competitor or
supplier of the company or is employed by one. Such situations call for
particular attention to security, confidentiality and conflicts of interest. The
closeness of the relationship might lead you to inadvertently compromise the
company’s interests.

 

  10.2. There are several factors to consider in assessing such a situation.
Among them: the relationship between Peak and the other company; the nature of
your responsibilities as a Peak employee and those of the person close to you;
and the access each of you has to your respective employer’s confidential
information.

 

  10.3. You should also be aware that the situation, however harmless it may

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       appear to you, could arouse suspicions among your co-workers that might
affect your working relationships. The very appearance of a conflict of interest
can create problems, regardless of the behavior of the employee involved.

 

  10.4. To remove any such doubts or suspicions, you should review your specific
situation with the CEO or the General Counsel of the company, to assess the
nature and extent of any concern and how it can be resolved. Frequently, any
risk to the company’s interest is sufficiently remote that you need only be
reminded to guard against inadvertently disclosing the company’s confidential
information. However, in some instances, a change in the job responsibilities of
one of the people involved may be necessary.

 

11. Transactions With Affiliated Companies

 

  11.1. When dealing with companies affiliated with Peak, either through common
ownership or through subsidiary relationships, we must avoid even the appearance
of impropriety.

 

12. Transactions with Interested Parties

 

  12.1. Any director, officer, or other employee with an interest in any company
transaction shall fully disclose that interest before the company undertakes the
transaction. Should a director, officer or employee discover their interest in a
company transaction after it begins, the director, officer or employee shall
disclose their interest immediately in writing to the Board of Directors.

 

  12.2. A director, officer, or employee is “interested” in a transaction when
he/she:

 

  12.2.1. is a director, officer, or employee of an entity that transacts
business or proposes to transact business with the company;

 

  12.2.2. is closely related to any director, officer, or employee of a company
that transacts business or proposes to transact business with the company; or

 

  12.2.3. has an ownership interest in any entity transacting business with the
company.

 

  12.3. The Audit Committee of the Board of Directors shall review these
transactions. In order for the company to undertake the transaction, the Audit
Committee must approve it.

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13. Monitoring of Sales to Affiliates

 

  13.1. In addition to its standard comprehensive accounting procedures, the
company shall monitor sales to affiliates. The CFO shall monitor sales to
affiliates and report such sales to the CEO and to the Board of Directors at
each board meeting.

 

14. Insider Trading

 

  14.1. General Rules

 

  14.2. Under United States Securities Laws and Company Policy you may not:

 

  14.2.1. buy or sell Peak’s securities (or in some cases the securities of
other companies) while in possession of material non-public information (“inside
information”).

 

  14.2.2. disclose inside information to outsiders, including family members,
who then trade in the Peak’s securities or the securities of another company on
the basis of that information. This is called “tipping” and can lead to civil
and criminal liability for both the “tipper” and “tippee;”

 

  14.2.3. sell Peak’s securities without complying with all the requirements of
Rule 144 of the 1933 Securities Act. Rule 144 is described in detail later in
this section.

 

  14.2.4. answer questions or provide company outsiders with information about
the company and its affairs unless you are specifically authorized to do so.

 

15. Who Is An “Insider” And What Is “Material Inside Information?”

 

  15.1. The term “insider” includes not only corporate directors, officers and
employees, but also persons who learn of material non-public information through
their job duties or special relationships with corporate insiders. For example,
secretaries, mail room clerks and messengers can discover material non-public
information while performing their duties. Anyone who discovers material
non-public information in this way is an “insider” under federal securities
laws.

 

16. Materiality

 

  16.1. Under federal securities laws, inside information is “material” if a
reasonable investor would consider it important in deciding whether to buy or
sell securities.

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  16.2. “Material” inside information includes:

 

  16.2.1. Company financial results, earnings, possible dividend increases or
decreases, stock splits, stock dividends and other financial information;

 

  16.2.2. anticipated public or private offerings of company securities;

 

  16.2.3. Company evaluation of an acquisition candidate, business unit
divestiture, joint venture, tender offer or other restructuring activity;

 

  16.2.4. mergers, acquisitions, divestitures, or other restructuring activity
in progress or under discussion or negotiation;

 

  16.2.5. any significant litigation, actual or threatened disputes or
governmental investigations;

 

  16.2.6. changes in management or control of the company.

 

  16.3. This list is not exhaustive. Depending on the circumstances, other types
of information can be “material.”

 

  16.4. Until material non-public information does become public, any director,
officer, or employee with knowledge of it may not trade in Peak’s securities. In
addition, if directors, officers or employees obtain inside information
concerning another company in the course of performing their duties, they may
not trade in that company’s securities or tip others.

 

17. Window Period

 

  17.1. After material information is disclosed to the public, a director,
officer, or employee must not trade in the Peak’s securities until the market
has had sufficient time to consider the information. All directors and officers,
and employees with inside information, must therefore refrain from trading in
Peak’s securities for at least 3 business days after the disclosure of material
information.

 

  17.2. Officers and directors of the company, and employees with inside
information, may not purchase or sell Peak shares during the period beginning
two weeks before the end of each fiscal quarter until 3 days after publication
of the company’s disclosure of material information.

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  17.3. All officers and directors and other insiders should obtain the approval
of the company’s General Counsel, Jack Menache, before undertaking any
transaction in company securities.

 

18. Rule 144: Resale Restrictions on Company Securities

 

  18.1. Under the Securities Act of 1933, an “affiliate” of the company who owns
Peak’s securities must comply with Rule 144 of the Securities Act of 1933 in
order to resell them. Unless directors and executive officers comply with Rule
144, they may not be able to sell Peak’s shares in the open market without
registering the shares under the Securities Act of 1933. Rule 144 applies to
common and preferred stock, bonds, debentures and any other form of security,
even those that were once registered under the Securities Act of 1933 but are
not registered at the time of proposed resale.

 

  18.2. The following provisions of Rule 144 apply to resale of Peak’s
securities by affiliates:

 

  18.2.1. Current public information

 

  18.2.2. Investors must have access to sufficient current information about the
company. The company meets this requirement only if it has filed all reports
required by the 1934 Securities Exchange Act during the 12 months prior to the
proposed resale.

 

  18.2.3. Manner of sale

 

  18.2.3.1. The director or officer or employee must sell the company’s shares:
in an open market transaction;

 

  18.2.3.2. through a broker;

 

  18.2.3.3. at the prevailing market price for no more than the usual and
customary brokerage commission. The broker may not solicit nor arrange for the
solicitation of customers to purchase the shares.

 

  18.3. Number of shares which may be sold in any three month period

 

  18.3.1. A director, officer or employee may sell no more than the greater of:

 

  18.3.2. one percent of the outstanding shares of the company; or

 

  18.3.3. the average weekly reported trading volume in the four calendar weeks
preceding the transactions.

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19. Notice of proposed sale

 

  19.1. If a director, officer or affiliate proposes to sell more than 500
shares or $10,000 worth of shares during any three-month period, then the
officer, director or affiliate must file a notice of sale with the SEC on Form
144 prior to, or concurrently with, placing the order to sell shares.

 

20. Holding Periods

 

  20.1. Anyone acquiring company securities directly or indirectly from the
company in a transaction that was not registered with the SEC under the 1933 Act
must hold these securities for at least one year before reselling them. There is
no statutory minimum holding period for securities previously registered under
the 1933 Act.

 

  20.2. Penalties for Violating Securities Law and Company Policy

 

  20.3. Securities law violations can carry severe and expensive civil penalties
for both the company and any individual directors, officers and employees who
willfully violate securities laws. Individuals may also be liable for criminal
penalties up to a maximum of $1 million and ten years in prison. A director may
be forced to resign. Officers and employees may be subject to disciplinary
action, including termination.

 

21. You Are Responsible for Knowing Your Obligations Under This Policy

 

  21.1. All directors, officers and employees should review this material
carefully and contact the company’s General Counsel prior to engaging in any
transaction in Peak’s securities which might violate securities laws and/or this
company policy. Contact the company’s General Counsel for guidance on the rules
about responding to questions or requests for information from outsiders.
Contact the company’s General Counsel regarding any SEC mandated reporting or
form-filing requirements.

 

22. Compliance

 

  22.1. In order to facilitate compliance with legal requirements, the company
is adopting the following policy to govern transactions by directors, officers,
and employees in Peak’s securities.

 

  22.2. Before trading in Peak’s securities, directors, officers and employees

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       must obtain advance approval of the transaction from a “Compliance
Officer,” who will initially be Jack Menache, the company’s General Counsel. To
approve the transaction, the Compliance Officer must (a) determine that no
circumstances exist which might subject the director, officer or employee to a
charge of trading on the basis of material non-public information, (b) determine
whether the securities may be properly transferred under the Securities Act of
1933, as amended, and (c) ensure that the records of the Compliance Officer with
respect to the director, officer, or employee’s ownership of Peak’s securities
are up to date.

 

23. Disclosure Controls And Procedures

 

  23.1. Confidentiality of Company Information

 

  23.2. As a general matter, all information relating to the company’s business
that has not been publicly disclosed is confidential, subject to the exceptions
listed below.

 

  23.3. Directors, officers, and employees may disclose information about the
company to company outsiders only if specifically authorized to do so in
accordance with the procedures set forth in this Code. After the company
authorizes or commences disclosure; Rule l0b-5 of the 1934 Securities Exchange
Act governs statements by the company or its agents. Directors, officers and
employees may not make any untrue statement of material fact. Rule l0b-5 also
prohibits the omission of material facts during disclosure if such omission
would make the disclosure misleading.

 

  23.4. All employees must adhere to the following company procedures when
responding to inquiries about the company:

 

  23.5. The company’s designated spokespersons are Cal Reed, William Snyder and
Jack Menache;

 

  23.6. Any inquiries from outsiders regarding the company should be referred
directly to the spokespersons identified above;

 

  23.7. When responding to inquiries concerning corporate activities, directors,
officers and employees must not deny the existence of those activities. Such
statements may subject the company to an affirmative disclosure obligation if
the facts change. Instead, refer inquiries to the company spokespersons;

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  23.8. You should direct any questions about this policy and these procedures
to the company’s designated spokespersons.

 

24. Sarbanes-Oxley Certifications

 

  24.1. The CEO and CFO, pursuant to §906 of the Act, must certify that to the
best of their knowledge the periodic report containing financial statements
filed by Peak with the SEC fully complies with the requirements of the
Securities Exchange Act of 1934 and that information contained in the periodic
report fairly presents, in all material respects, the financial condition and
results of operations of the company.

 

  24.2. In addition, the CEO and CFO, pursuant to §302 of the Act, must each
certify that:

 

  24.2.1. he has reviewed the report;

 

  24.2.2. based on his knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by the
report;

 

  24.2.3. based on his knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
company as of, and for, the periods presented in the report;

 

  24.2.4. that he is responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
Peak and the CEO and CFO have:

 

  24.2.5. he has designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to the CEO and CFO by others within those entities,
particularly during the period in which this report is being prepared;

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  24.2.6. he has evaluated the effectiveness of Peak’s disclosure controls and
procedures as of a date within 90 days prior to the filing date of the report
(the “Evaluation Date”); and

 

  24.2.7. presented in the report his conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;

 

  24.2.8. that he has disclosed, based on his most recent evaluation, to Peak’s
auditors and to the audit committee:

 

  24.2.8.1. all significant deficiencies in the design or operation of internal
controls which could adversely affect Peak’s ability to record, process,
summarize and report financial data and has identified for Peak’s auditors any
material weaknesses in internal controls; and

 

  24.2.8.2. any fraud, whether or not material, that involves management or
other employees who have a significant role in Peak’s internal controls; and

 

  24.2.8.3. has indicated in the report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

 

25. Due Diligence Procedures

 

  25.1. In order to facilitate the certifications and disclosures described
above, the company has established the following procedures to ensure that the
CFO and CEO are knowledgeable regarding the financial and operational affairs of
the company and with the content of periodic reports to be filed with any
governmental agency:

 

  25.1.1. The vice president, manufacturing operations, shall maintain and or
establish practices to assure the accurate and timely collection of information
and report weekly in writing to the CEO, CFO and such other executive officers
and employees as such vice president shall determine

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       regarding the status of manufacturing operations, costs, quality,
inventories, backlog, capital equipment, personnel, and other information
relative to such vice president’s area of responsibility.

 

  25.1.2. The vice president, CFO shall maintain written policies and procedures
relating to such officer’s area of responsibility, including procedures and
controls to assure the accurate and timely collection of financial data and
information from all operating entities of the company. In addition, the CFO
shall provide written reports to the CEO and such other executive officers and
employees as such vice president shall determine, not less frequently than
monthly regarding the results of operations, cash flows and financial affairs of
the company. The CFO shall report any material events to the CEO and such other
executive officers of the company as shall be affected by such event as promptly
as practicable.

 

  25.1.3. The vice president, General Counsel, shall provide written reports to
the CEO and CFO regarding the status of litigation not less frequently than
quarterly and shall report all material events as promptly as practicable.

 

  25.1.4. The vice presidents, sales and marketing, shall report to the CEO not
less frequently than monthly regarding trends, competition, and other matters
related to sales and marketing of the company’s products.

 

  25.2. The CFO and CEO shall review the system of internal controls as of a
date within 90 days prior to the issuance of any report to be filed with the
Securities and Exchange Commission and include in each such report their
conclusions about the effectiveness of their internal controls based on their
evaluation as of that date.

 

  25.3. The CEO and CFO shall disclose to the company’s outside auditors and to
the audit committee of the board of directors:

 

  25.3.1. all significant deficiencies in the design or operation of internal
controls which could adversely affect the company’s ability to record, process,
summarize, and report financial data and have identified for the company’s
auditors any material weaknesses in internal controls;

 

  25.3.2. any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer’s internal controls; and

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  25.3.3. whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

 

26. Temporary Investment Of Corporate Funds And Diversification Of Risk

 

  26.1. Temporary Investment of Corporate Funds

 

  26.2. The company shall invest its excess cash not required for operations
only with financial institutions having the highest credit rating available at
such time, in Hong Kong, Singapore, or the United States. This provision shall
not be applicable to cash required for operations in other jurisdictions. The
company shall also limit its cash investment risk exposure by investing with
several unrelated financial institutions. The company shall invest no more than
$10 million with any one financial institution. Any deviation of this policy may
only be made in unusual circumstances on a temporary basis with the approval of
the CEO and CFO, provided that the Audit Committee is notified at the earliest
possible time and in no event more then 15 days from the date of such deviation.

 

  26.3. The CFO shall issue reports to the Audit Committee of the Board of
Directors at the end of each quarter and from time to time upon request.

 

  26.4. We recognize the risks involved in limiting company investments to a
small number of industries and investments. Therefore we will attempt to reduce
investment risk through diversification of the company’s investment portfolio.
We will maintain a diversified portfolio and will periodically review the
portfolio to ensure that it is properly diversified to reduce risk.

 

27. Credit And Collections Policies

 

  27.1. The company recognizes that the extension of trade credit and the terms
on which it is extended can be sensitive matters of business judgment. From time
to time management will review the company’s trade credit arrangements to
determine whether the arrangements work to the benefit of the company.

 

  27.2. Any account receivable unpaid longer than 90 days from the end of the

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       approved credit period shall be designated a “delinquent account.” The
company will refer all delinquent accounts to its internal collections
department for collection. While any customer’s account is delinquent, the
company shall make new shipments to that company only on a prepaid, cash on
delivery, or other suitable basis specifically approved by the CFO.

 

  27.3. Should the customer bring a delinquent account back to good standing,
the company shall review the customer’s trade credit terms and take appropriate
action.

 

  27.4. If any account remains unpaid 150 days from the end of the approved
credit period, the company shall refer the account for collection and report
such delinquency to the Audit Committee. In such event, the company shall
establish a bad debt reserve in accordance with procedures to be established by
the CFO. Except in unusual circumstances, the company shall make no further
shipments to any such customer until that customer’s account is no longer
delinquent. Any unusual circumstances shall be documented in writing and
provided to the Audit Committee.

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I acknowledge receipt of a copy of the Code of Ethics of Peak International and
its subsidiaries and agree to abide by both the letter and spirit of its terms.
I acknowledge receipt of the company’s instructions regarding the procedure for
making anonymous complaints or reports set forth in Section 2, above.

 

DATE:

 

Employee’s Name  

            Splendid Zou

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Employee’s Signature  

            /s/ Splendid Zou

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Employment Contract

Splendid Zuo

August 9, 2005

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EXHIBIT A

INTELLECTUAL PROPERTY RIGHTS

 

As used herein, the term “Inventions” shall mean all inventions, discoveries,
improvements, trade secrets, formulas, techniques, data, programs, systems,
specifications, documentation, algorithms, flow charts, logic diagrams, source
codes, processes, and other information, including works-in-progress, whether or
not subject to patent, trademark, copyright, trade secret, or mask work
protection, and whether or not reduced to practice, which are made, created,
authored, conceived, or reduced to practice by The employee, either alone or
jointly with others, during the period of employment with the Company
(including, without limitation, all periods of employment with the Company prior
to the Effective Date) which (A) relate to the actual or anticipated business,
activities, research, or investigations of the Company or (B) result from or is
suggested by work performed by The employee for the Company (whether or not made
or conceived during normal working hours or on the premises of the Company), or
(C) which result, to any extent, from use of the Company’s premises or property,
unless, in the case of clause (C) only, (i) The employee has reimbursed the
Company in an amount equal to the value of the. use of such premises or property
(as determined by the Company based upon the Company’s all in cost, which shall
include without limitation compensation and overhead expense) and (ii) the
Company approved the use of its premises or property prior to the use thereof by
The employee.

 

Work For Hire. The employee expressly acknowledges that all copyrightable
aspects of the Inventions are to be considered “works made for hire” within the
meaning of the Copyright Act of 1976, as amended (the “Act”), and that the
Company is to be the “author” within the meaning of such Act for all purposes.
All such copyrightable works, as well as all copies of such works in whatever
medium fixed or embodied, shall be owned exclusively by the Company as of its
creation, and The employee hereby expressly disclaims any and all interest in
any of such copyrightable works and waives any right of morale or similar
rights.

 

Assignment, The employee acknowledges and agrees that all Inventions constitute
trade secrets of the Company and shall be the sole property of the Company or
any other entity designated by the Company. In the event that title to any or
all of the Inventions, or any part or element thereof, may not, by operation of
law, vest in the Company, or such Inventions may be found as a matter of law not
to be “works made for hire” within the meaning of the Act, The employee hereby
conveys and irrevocably assigns to the Company, without further consideration,
all his right, title and interest, throughout the universe and in perpetuity, in
all Inventions and all copies of them, in whatever medium fixed or embodied, and
in all written records, graphics, diagrams, notes, or reports relating thereto
in the employee’s possession or under his control, including, with respect to
any of the foregoing, all rights of copyright, patent, trademark, trade secret,
mask work, and any and all other proprietary rights therein, the right to modify
and create derivative works, the right to invoke the benefit of any priority
under any international convention, and all rights to register and renew same.
The employee understands that Inventions do not include, and the obligations set
forth above in this Section 7(c) do not apply to, subject matter that qualifies
fully under the provisions of Section 2870 of the California Labor Code.

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Proprietary Notices: No Filings, Waiver of Moral Rights. The employee
acknowledges that all Inventions shall, at the sole option of the Company, bear
the Company’s patent, copyright, trademark, trade secret, and mask work notices.

 

The employee agrees not to file any patent, copyright, or trademark applications
relating to any Invention, except with prior written consent of an authorized
representative of the Company (other than The employee).

 

The employee hereby expressly disclaims any and all interest in any Inventions
and waives any right of droit morale or similar rights such as rights of
integrity or the right to be attributed as the creator of the Invention.

 

Further Assurances. The employee agrees to assist the Company, or any party
designated by the Company, promptly on the Company’s request, whether before or
after the termination of employment, however such termination may occur, in
perfecting, registering, maintaining, and enforcing, in any jurisdiction, the
Company’s rights in the Inventions by performing all acts and executing all
documents and instruments deemed necessary or convenient by the Company,
including, by way of illustration and not limitation:

 

Executing assignments, applications, and other documents and instruments in
connection with (A) obtaining patents, copyrights, trademarks, mask works, or
other proprietary protections for the Inventions and (B) confirming the
assignment to the Company of all right, title, and interest in the Inventions or
otherwise establishing the Company’s exclusive ownership rights therein.

 

Cooperating in the prosecution of patent, copyright, trademark and mask work
applications, as well as in the enforcement of the Company’s rights in the
Inventions, including, but not limited to, testifying in court or before any
patent, copyright, trademark or mask work registry office or any other
administrative body.

 

The employee shall be reimbursed for all out-of-pocket costs incurred in
connection with the foregoing, if the Company requests such assistance after the
termination of the employee’s employment. In addition, to the extent that, after
the termination of employment for whatever reason, the employee’s technical
expertise shall be required in connection with the fulfillment of the
aforementioned obligations, the Company shall compensate the employee at a
reasonable rate for the time actually spent by the employee at the Company’s
request rendering such assistance.

 

Power of Attorney. The employee hereby irrevocably appoints the Company to be
his Attorney-In-Fact to execute any document and to take any action in his name
and on his behalf and to generally use his name for the purpose of giving to the
Company the full benefit of the assignment provisions set forth above.

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Disclosure of Inventions. The employee shall make full and prompt disclosure to
the Company of all Inventions subject to assignment to the Company, and all
information relating thereto in the employee’s possession or under his control
as to possible applications and use thereof.

 

No Violation of Third-Party Rights. The employee represents, warrants, and
covenants that he is not a party to any conflicting agreements with third
parties, which shall prevent him from fulfilling the terms of employment and the
obligations of this Agreement.

 

Confidential Information: Non-Competition and, Non-Solicitation.

 

Confidentiality. The employee acknowledges that in his employment hereunder he
shall occupy a position of trust and confidence. The employee shall not, except
as may be required in the normal course of business to perform his duties
hereunder or as required by applicable law, without limitation in time or until
such information shall have become public other than by the employee’s
unauthorized disclosure, disclose to others, whether directly or indirectly, any
Confidential Information regarding the Company, its subsidiaries and affiliates.
“Confidential Information” shall mean information about the Company, its
subsidiaries and affiliates, and their respective clients and customers that is
not disclosed by the Company for financial reporting purposes and that was
learned by the employee in the course of his employment by the Company, its
subsidiaries and affiliates, including (without limitation) any proprietary
knowledge, trade secrets, data, formulae, information and client and customer
lists and all papers, resumes, and records (including computer records) of the
documents containing such Confidential Information. The employee acknowledges
that such Confidential Information is specialized, unique in nature and of great
value to the Company, its subsidiaries and affiliates, and that such information
gives the Company a competitive advantage. The employee agrees to (i) deliver or
return to the Company, at the Company’s request at any time or upon termination
or expiration of his employment or as soon thereafter as possible, (A) all
documents, computer tapes and disks, records, lists, data, drawings, prints,
notes and written information (and all copies thereof furnished by the Company,
its subsidiaries and affiliates, or prepared by the employee during the term of
his employment by the Company, its subsidiaries and affiliates, and (B) all
notebooks and other data relating to research or experiments or other work
conducted by the employee in the scope of employment or any Inventions made,
created, authored, conceived, or reduced to practice by the employee, either
alone or jointly with others, and (ii) make full disclosure relating to any
Inventions.

 

If the employee would like to keep certain property, such as material relating
to professional societies or other non-confidential material, upon the
termination of employment with the Company, he agrees to discuss such issues
with the Company. Where such a request does not put Confidential Information of
the Company at risk, the Company shall customarily grant the request.

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The employee consents to the use of the employee’s name, image, and/or voice for
purposes of advertising or trade in connection with the business of the Company
or any of its subsidiaries or affiliates.

 

DATE:

 

Employee’s Name   

            Splendid Zou

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Employee’s Signature   

            /s/ Splendid Zou

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