Unassociated Document


    EMPLOYMENT
      AGREEMENT

    


     

    This
      EMPLOYMENT AGREEMENT (this “Agreement”),
      dated
      as of ______________, 200_ between _____________________, residing at
      ____________________________ (“Executive”),
      and
      HLS Systems International, Ltd. a British Virgin Islands corporation having
      its
      principal office at 625 Broadway, Suite 1111, San Diego, CA 92101 (the
“Company”)

     

    WHEREAS,
      the Company believes that Executive provides unique management services for
      the
      Company and wishes to retain the continued services of Executive as its
      ______________________; and

     

    WHEREAS,
      the Company and Executive have reached an understanding with respect to the
      extension of Executive’s employment with the Company for a three year period
      commencing as of ___________, 200_ and

     

    WHEREAS,
      the Company and Executive desire to evidence their agreement in writing and
      to
      provide for the employment of Executive by the Company on the terms set forth
      herein.

     

    NOW,
      THEREFORE, IN CONSIDERATION of the foregoing facts, the mutual covenants and
      agreements contained herein and other good and valuable consideration, the
      parties hereby agree as follows:

     

    1.  Employment,
      Duties and Acceptance.

     

    1.1  Effective
      as of ______________, 200_ the Company hereby agrees to the continued employment
      of Executive as its ___________________ hereby accepts such continued employment
      on the terms and conditions contained in the Agreement. During the term of
      this
      Agreement, Executive shall make himself available to the Company to pursue
      the
      business of the Company subject to the supervision and direction of the Board
      of
      Directors of the Company (the “Board”
or
      “Board
      of Directors”).

     

    1.2  The
      Board
      may assign Executive such general management and supervisory responsibilities
      and executive duties for the Company as are appropriate and commensurate with
      Executive’s position as __________________ of the Company (“____”)
      and
      would otherwise be consistent in stature and prestige with the responsibilities
      of a ______.

     

    1.3  Executive
      accepts such employment and agrees to devote substantially all of his business
      time, energies and attention to the performance of his duties; provided,
      however, that Executive may continue to be actively involved in educational
      and
      civic activities to the extent that such activities do not materially detract
      from the reasonable performance of his duties (such material detraction to
      be
      evidenced by a resolution approved by the majority of the Board and a written
      notice to Executive, in which event Executive shall have one hundred and twenty
      (120) days to reduce the level of such activities in a reasonable manner).
      The
      Company recognizes the value to it of Executive’s continued involvement in these
      activities and will reimburse Executive for reasonable expenses incurred by
      him
      in connection with such activities. Nothing herein shall be construed as
      preventing Executive from (i) making and supervising investments on a personal
      or family basis (including trusts, funds and investment entities in which
      Executive or members of his family have an interest) and (ii) serving on the
      Board of Directors of not more than three corporations involved primarily in
      “for profit” business activities; provided, however, that these activities do
      not materially interfere with the performance of his duties hereunder or violate
      the provisions of Section 4.4
      hereof.

     

    
      
        
        

      

      
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    2.  Compensation
      and Benefits.

     

    2.1  The
      Company shall pay to Executive a salary at an annual base rate of not less
      than
      $_______ for the first ___-year period during the term hereof . During
      Executive’s employment, salary will be paid not less frequently than every two
      weeks without the prior written consent of Executive. Executive’s annual base
      rate will be reviewed one month prior to the commencement of the third year
      for
      purposes of determining what the new base salary will be.

     

    2.2  The
      Company shall also pay to Executive such bonuses as may be determined from
      time
      to time by the Compensation Committee of the Board of Directors. The amount
      of
      annual bonus payable to Executive may vary at the discretion of the Compensation
      Committee of the Board of Directors; provided, however, that the total bonus
      shall not exceed 50% of Executive’s annual base rate under
      Section 2.1
      as of
      the date the bonus is awarded. In determining the annual bonus to be paid to
      Executive, the Compensation Committee may, among other factors they believe
      to
      be appropriate, consider, and give varying degrees of importance to, Executive’s
      contribution to the following:

     

    (a)  growth
      in
      the Company’s per share value;

     

    (b)  achievement
      by the Company of specific identified targets selected by the Committee from
      time to time;

     

    (c)  the
      attraction and retention of key executive personnel by the Company;

     

    (d)  satisfaction
      of the Company’s capital requirements;

     

    (e)  the
      establishment of strategic direction and significant Company goals;
      and

     

    (f)  such
      other criteria as the Compensation Committee deems to be relevant.

     

    2.3  Executive
      shall be entitled to such insurance and other benefits including, among others,
      medical and disability coverage and life insurance as are afforded to other
      senior executives of the Company, subject to applicable waiting periods and
      other conditions which may be generally applicable. The Company also shall
      purchase if possible (i) long term disability insurance of not less than 50%
      of
      Executive’s then current annual salary and (ii) split dollar life insurance with
      coverage of not less than $1.0 million. The beneficiary of these policies shall
      be designated by Executive and these policies shall be transferred to Executive
      or his designees by the Company at his written request.

     

    
      
        
        

      

      
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    2.4  Executive
      shall be entitled to five weeks of vacation in each calendar year and to a
      reasonable number of other days off for religious and personal
      reasons.

     

    2.5  Executive
      shall be entitled, at his option, to maintain a suitable automobile for business
      use. The Company shall reimburse Executive for the costs of leasing such
      automobile and for all other costs associated with the use of the vehicle,
      including insurance costs, repairs and maintenance.

     

    2.6  The
      Company will pay or reimburse executive for all transportation, hotel and other
      expenses incurred by Executive on business trips (including business or first
      class air travel on scheduled flights of more than two (5) consecutive hours)
      and for all other ordinary and reasonable out-of-pocket expenses actually
      incurred by him in the conduct of the business of the Company against itemized
      vouchers submitted with respect to any such expenses.

     

    2.7  Executive
      agrees that his services shall be rendered primarily at the Company’s executive
      offices which shall be located in, or within thirty (30) miles of, the Company’s
      current executive offices located in ______________________.

     

    2.8  The
      Company shall not move its executive offices without Executive’s written
      consent. If such consent is provided, the Company will reimburse Executive
      for
      the following, which may be taxable to Executive:

     

    (a)  Usual
      and
      customary expenses incurred if Executive sells his home himself or through
      a
      broker; however, reimbursement for the broker’s commission (if Executive
      utilizes the services of a broker) may not exceed six (6) percent of the sales
      proceeds;

     

    (b)  Reasonable
      expenses incurred in moving furniture, normal household goods and personal
      belongings to the new location and incidental expenses related to the
      move;

     

    (c)  Reasonable
      expenses (including travel and hotel) while house-hunting, including four trips
      to the new location with Executive’s spouse and children;

     

    (d)  Reasonable
      and customary closing costs incurred in buying Executive’s new home;
      and

     

    (e)  Reasonable
      temporary living expenses incurred while awaiting occupancy in Executive’s new
      quarters.

     

    3.  Term
      and Termination.

     

    3.1  The
      term
      of this Agreement commences as of ______________, 200_ and shall continue until
      ______________, 200_ unless sooner terminated as herein provided.

     

    3.2  If
      Executive dies during the term of this Agreement, this Agreement shall thereupon
      terminate, except that the Company shall pay to the legal representative of
      Executive’s estate the base salary due Executive pursuant to Section 2.1 hereof
      through the first anniversary of Executive’s death (or the scheduled expiration
      under Section 3.1, if earlier than the first anniversary date) as well as a
      pro
      rata allocation of bonus payments under Section 2.2 based on the days of service
      during the year of death, and all amounts owing to Executive at the time of
      termination, including for previously accrued but unpaid bonuses, expense
      reimbursements and accrued but unused vacation pay.

     

    
      
        
        

      

      
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    3.3  If
      Executive shall be rendered incapable by an incapacitating illness or disability
      (either physical or mental) of complying with the terms, provisions and
      conditions hereof on his part to be performed for a period in excess of 180
      consecutive days during any consecutive twelve (12) month period, then the
      Company, at its option, may terminate this Agreement by written notice to
      Executive (the “Disability
      Notice”)
      delivered prior to the date Executive resumes the rendering of services
      hereunder; provided, however, if requested by Executive (or a representative
      thereof) such termination shall not occur until after examination of Executive
      by a medical doctor (retained by the Company with the consent of Executive
      which
      consent shall not be unreasonably withheld) who certifies in a written report
      to
      the Board with a copy of such report delivered simultaneously to Executive
      that
      Executive is and shall be incapable of performing his duties for in excess
      of
      two additional months because of the continuing existence of such incapacitating
      illness or disability. Notwithstanding such termination, the Company (a) shall
      make a payment to Executive of a pro rata allocation of payments under Section
      2.2 based on the days of service during the year in which the Disability Notice
      is delivered and (b) shall pay to Executive the base salary due Executive
      pursuant to Section 2.1 hereof through the second anniversary of the date of
      such notice (the “Disability
      Period”),
      less
      any amount Executive receives for such period from any Company-sponsored or
      Company-paid for source of insurance, disability compensation or governmental
      program. The Company shall also pay to Executive all amounts owing to Executive
      at the time of termination, including for previously accrued but unpaid bonuses,
      expense reimbursements and accrued but unused vacation pay.

     

    3.4  The
      Company, by notice to Executive, may terminate this Agreement for Cause. As
      used
      herein, “Cause”
means
      (a) the refusal in bad faith by Executive to carry out specific written
      directions of the Board, (b) intentional fraud or dishonest action by Executive
      in his relations with the Company (“dishonest” for these purposes shall mean
      Executive’s knowingly making of a material misstatement to the Board for the
      purpose of obtaining direct personal benefit); or (c) the conviction of
      Executive of any crime involving an act of significant moral turpitude after
      appeal or the period for appeal has elapsed without an appeal being filed by
      Executive. Notwithstanding the foregoing, no Cause for termination shall be
      deemed to exist with respect to Executive’s acts described in clause (a) or (b)
      above, unless the Board shall have given written notice to Executive (after
      five
      (5) days advance written notice to Executive and a reasonable opportunity to
      Executive to present his views with respect to the existence of Cause),
      specifying the Cause with particularity and , within twenty (20) business days
      after such notice, Executive shall not have disputed the Board’s determination
      or in reasonably good faith taken action to cure or eliminate prospectively
      the
      problem or thing giving rise to such Cause, provided, however, that a repeated
      breach after notice and cure, of any provision of clause (a) or (b) above,
      involving the same or substantially similar actions or conduct, shall be grounds
      for termination for cause upon not less than five (5) days additional notice
      from the Company.

     

    
      
        
        

      

      
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    3.5  Executive,
      by notice to the Company, may terminate this Agreement if a Good Reason exists.
      For purposes of this Agreement, “Good
      Reason”
means
      the occurrence of any of the following circumstances without Executive’s prior
      express written consent: (a) a material adverse change in the nature of
      Executive’s title, duties or responsibilities with the Company that represents a
      demotion from his title, duties or responsibilities as in effect immediately
      prior to such change; (b) a material breach of this Agreement by the Company;
      (c) a failure by the Company to make any payment to Executive when due, unless
      the payment is not material and is being contested by the Company, in good
      faith; (d) a liquidation, bankruptcy or receivership of the Company; or (e)
      if
      Executive is at any time not a member of the Board of Directors of the Company
      and a member of the Executive Committee thereof (if such a committee exists),
      unless he voluntarily resigns therefrom; or (f) any person or entity other
      than
      the Company and/or any officers or directors of the Company as of the date
      of
      this Agreement acquires securities of the Company other than from Executive
      or
      his affiliates (in one or more transactions) having 51% or more of the total
      voting power of all the Company’s securities then outstanding.

     

    Notwithstanding
      the foregoing, no Good Reason shall be deemed to exist with respect to the
      Company’s acts described in clauses (a), (b) or (c) above, unless Executive
      shall have given written notice to the Company specifying the Good Reason with
      reasonable particularity and, within twenty (20) business days after such
      notice, the Company shall not have cured or eliminated the problem or thing
      giving rise to such Good Reason; provided, however, that a repeated breach
      after
      notice and cure of any provision of clauses (a), (b) or (c) above involving
      the
      same or substantially similar actions or conduct, shall be grounds for
      termination for Good Reason without any additional notice from
      Executive.

     

    3.6  In
      the
      event that Executive terminates this Agreement for Good Reason, pursuant to
      the
      provisions of paragraph 3.5, or the Company terminates this Agreement without
      Cause, as defined in paragraph 3.4, the Company shall continue to pay to
      Executive (or in the case of his death, the legal representative of Executive’s
      estate or such other person or persons as Executive shall have designated by
      written notice to the Company), all payments, compensation and benefits required
      under paragraph 2 hereof through the earlier of (y) two (2) years from the
      date
      of termination or (z) through the term of this Agreement; provided, however,
      that Executive’s insurance coverage shall terminate upon Executive becoming
      covered under a similar program by reason of employment elsewhere. If
      Executive’s employment is terminated for Good Reason or without Cause, Executive
      shall have no duty to mitigate awards paid or payable to him pursuant to this
      subsection, and any compensation paid or payable to Executive from sources
      other
      than the Company will not offset or terminate the Company’s obligation to pay to
      Executive the full amounts pursuant to this subsection 3.6.

     

    4.  Protection
      of Confidential Information; Non-Competition.

     

    4.1  Executive
      acknowledges that:

     

    (a)  As
      a
      result of his current employment with the Company, Executive will obtain secret
      and confidential information concerning the business of the Company and its
      subsidiaries and affiliates (referred to collectively in this Article 4 as
      the
“Company”),
      including, without limitation, financial information, designs and other
      proprietary rights, trade secrets and know-how, customers and sources
      (“Confidential
      Information”).

     

    
      
        
        

      

      
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    (b)  The
      Company will suffer substantial damage which will be difficult to compute if,
      during the period of his employment with the Company or thereafter, Executive
      should enter a business competitive with the Company or divulge Confidential
      Information.

     

    (c)  The
      provisions of this Agreement are reasonable and necessary for the protection
      of
      the business of the Company.

     

    4.2  Executive
      agrees that he will not at any time, either during the term of this Agreement
      or
      thereafter, divulge to any person or entity any Confidential Information
      obtained or learned by him as a result of his employment with the Company,
      except (i) in the course of performing his duties hereunder, (ii) to
      the extent that any such information is in the public domain other than as
      a
      result of Executive’s breach of any of his obligations hereunder,
      (iii) where required to be disclosed by court order, subpoena or other
      government process or (iv) if such disclosure is made without Executive’s
      knowing intent to cause material harm to the Company. If Executive shall be
      required to make disclosure pursuant to the provisions of clause (iii) of the
      preceding sentence, Executive promptly, but in no event more than 72 hours
      after
      learning of such subpoena, court order, or other government process, shall
      notify, by personal delivery or by electronic means, confirmed by mail, the
      Company and, at the Company’s expense, Executive shall: (a) take reasonably
      necessary and lawful steps required by the Company to defend against the
      enforcement of such subpoena, court order or other government process, and
      (b)
      permit the Company to intervene and participate with counsel of its choice
      in
      any proceeding relating to the enforcement thereof.

     

    4.3  Upon
      termination of his employment with the Company, Executive will promptly deliver
      to the Company all memoranda, notes, records, reports, manuals, drawings,
      blue-prints and other documents (and all copies thereof) relating to the
      business of the Company and all property associated therewith, which he may
      then
      possess or have under his control; provided, however, that Executive shall
      be
      entitled to retain one copy of such documents for his personal use and
      records.

     

    4.4  During
      the period commencing ______________, 200_ and terminating three years after
      termination of employment, Executive, without the prior written permission
      of
      the Company, shall not, anywhere in the People’s Republic of China, (i) enter
      into the employ of or render any services to any person, firm or corporation
      engaged in any business which is directly in competition with the Company’s
      principal existing business at the time of termination (“Competitive
      Business”);
      (ii)
      engage in any Competitive Business as an individual, partner, shareholder,
      creditor, director, officer, principal, agent, employee, trustee consultant,
      advisor or in any other relationship or capacity; (iii) employ, or have or
      cause
      any other person or entity to employ, any person who was employed by the Company
      at the time of termination of Executive’s employment by the Company (other than
      Executive’s personal secretary and assistant); or (iv) solicit, interfere with,
      or endeavor to entice away from the Company, for the benefit of a Competitive
      Business, any of its customers. Notwithstanding the foregoing, Executive shall
      not be precluded from investing and managing the investment of, his or his
      family’s assets in the securities of any corporation or other business entity
      which is engaged in a Competitive Business if such securities are traded on
      a
      national stock exchange or in the over-the-counter market and if such investment
      does not result in his beneficially owning, at any time, more than 5% of any
      class of the publicly-traded equity securities of such Competitive Business;
      provided, however, that for a period commencing ______________, 200_ and
      terminating three years after termination of Executive’s employment (except for
      investments in a class of securities trading on public markets), Executive
      shall
      refer to the Company for consideration (before any other party) any and all
      opportunities to acquire or purchase, or otherwise make equity or debt
      investments in, companies primarily involved in a Competitive Business if such
      opportunities becomes known to Executive while he is the _______________ of
      the
      Company. If the Company determines not to exploit any opportunity referred
      to in
      the foregoing sentence, the Company shall determine what, if anything, should
      be
      done with such opportunity. Executive shall not be entitled to any compensation,
      as a finder or otherwise, if either the Company or Executive introduces such
      opportunity to other persons, it being understood that all such compensation
      shall be paid to the Company. Notwithstanding the foregoing, in the event the
      Company terminates this Agreement without cause or if Executive terminates
      this
      Agreement for Good Reason under Section 3.5 hereof, Executive’s obligations
      under this Section 4.4 shall terminate one month following
      termination.

     

    
      
        
        

      

      
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    4.5  If
      Executive commits a breach of any of the provisions of Sections 4.2 or 4.4,
      the
      Company shall have the right:

     

    (a)  to
      have
      the provisions of this Agreement specifically enforced by any court having
      equity jurisdiction, it being acknowledged and agreed by Executive that the
      services being rendered hereunder to the Company are of a special, unique and
      extraordinary character and that any breach or threatened breach will cause
      irreparable injury to the Company and that money damages will not provide an
      adequate remedy to the Company; and

     

    (b)  to
      require Executive to account for and pay over to the Company all monetary
      damages determined by a non-appealable decision by a court of law to have been
      suffered by the Company as the result of any actions constituting a breach
      of
      any of the provisions of Section 4.2 or 4.4, and Executive hereby agrees to
      account for and pay over such damages to the Company (up to the maximum of
      all
      payments made under the Agreement).

     

    4.6  If
      Executive shall violate any covenant contained in Section 4.4, the duration
      of
      such covenant so violated shall be automatically extended for a period of time
      equal to the period of such violation.

     

    4.7  If
      any
      provision of Sections 4.2 or 4.4 is held to be unenforceable because of the
      scope, duration or area of its applicability, the tribunal making such
      determination shall not have the power to modify such scope, duration, or area,
      or all of them and such provision or provisions shall be void ab
      initio.

     

    5.  Miscellaneous
      Provisions.

     

    5.1  All
      notices provided for in this Agreement shall be in writing, and shall be deemed
      to have been duly given when delivered personally to the party to receive the
      same, when transmitted by electronic means, or when mailed first class postage
      prepared, by certified mail, return receipt requested, addressed to the party
      to
      receive the same at his or its address set forth below, or such other address
      as
      the party to receive the same shall have specified by written notice given
      in
      the manner provided for in this Section 5.1. All notices shall be deemed to
      have
      been given as of the date of personal delivery, transmittal or mailing
      thereof.

     

    
      
        
        

      

      
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    If
      to
      Executive:                   
 __________________

    __________________

    __________________

    __________________

    


    If
      to the
      Company: 
__________________

    __________________

    __________________

    __________________

     

    5.2  In
      the
      event of any claims, litigation or other proceedings arising under this
      Agreement (including, among others, arbitration under Section 3.4), Executive
      shall be reimbursed by the Company within thirty (30) days after delivery to
      the
      Company of statements for the costs incurred by Executive in connection with
      the
      analysis, defense and prosecution thereof, including reasonable attorneys’ fees
      and expenses; provided, however, that Executive shall reimburse the Company
      for
      all such costs if it is determined by a non-appealable final decision of a
      court
      of law that Executive shall have acted in bad faith with the intent to cause
      material damage to the Company in connection with any such claim, litigation
      or
      proceeding.

     

    5.3  The
      Company, shall to the fullest extent permitted by law, indemnify Executive
      for
      any liability, damages, losses, costs and expenses arising out of alleged or
      actual claims (collectively, “Claims”)
      made
      against Executive for any actions or omissions as an officer and/or director
      of
      the Company or its subsidiary. To the extent that the Company obtains director
      and officers insurance coverage for any period in which Executive was an
      officer, director or consultant to the Company, Executive shall be a named
      insured and shall be entitled to coverage thereunder.

     

    5.4  The
      provision of Article 4, Sections 5.2 and 5.3 and any provisions relating to
      payments owed to Executive after termination of employment shall survive
      termination of this Agreement for any reason.

     

    5.5  This
      Agreement and the Stock Option Agreements executed simultaneously herewith
      set
      forth the entire agreement of the parties relating to the employment of
      Executive and are intended to supersede all prior negotiations, understandings
      and agreements. No provisions of this Agreement or the Stock Option Agreements
      may be waived or changed except by a writing by the party against whom such
      waiver or change is sought to be enforced. The failure of any party to require
      performance of any provision hereof or thereof shall in no manner affect the
      right at a later time to enforce such provision.

     

    5.6  All
      questions with respect to the construction of this Agreement, and the rights
      and
      obligations of the parties hereunder, shall be determined in accordance with
      the
      law of the State of California applicable to agreements made and to be performed
      entirely in California.

     

    
      
        
        

      

      
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    5.7  This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      assigns of the Company. This Agreement shall not be assignable by Executive,
      but
      shall inure to the benefit of and be binding upon Executive’s heirs and legal
      representatives.

     

    5.8  Should
      any provision of this Agreement become legally unenforceable, no other provision
      of this Agreement shall be affected, and this Agreement shall continue as if
      the
      Agreement had been executed absent the unenforceable provision.

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

     

    
      	 EXECUTIVE	 	HLS
              SYSTEMS INTERNATIONAL LTD.
	 	 	 	 	 
	
               By:
                

            	 	 	
               By:
                

            	 
	 

              Title
                

            	
              
                

              

            	 	
               Title

            	
              
                
 

            
	 

               

            	
              
 	 	 	
              
 


    

     

     

    
      
        
        

      

      
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