Document:

PCCW Limited: Exhibit 4(pp) - Prepared by TNT Filings Inc.

EXHIBIT 4(pp)

DATED 20 December 2002   

 

(1) PCCW INTERNATIONAL LIMITED  

-and-  

(2) SIR DAVID FORD  

 

_____________________

SERVICE AGREEMENT 

______________________

 

THIS AGREEMENT  

BETWEEN:  

(1)  
PCCW International Limited
(trading as PCCW Europe), a company incorporated in Hong Kong and whose
registered place of business in the United Kingdom is at Third Floor, 78 Brook
Street, London, W1Y 1YD ("the Company"); and 

(2)   
SIR DAVID FORD of Culverwell
Farm, Branscombe, Devon, EX12 3DA, England ("the Executive"). 

NOW IT IS HEREBY AGREED as follows: 

1.    
Definitions 

1.1   In this Agreement: 

(a)     the
following expressions have the following meanings: 

"the Board"            
means the Board of Directors of the Company for the time being or any committee
duly appointed by the Board of Directors 

"the Employment" 
means the Executive's employment on the terms set out in this Agreement 

"the Group"            
means the Company and the Group Companies 

"Group Company" 
means any firm, company, corporation or other organization:- 

(i)  
which is directly or indirectly controlled by the Company; or 

(ii)  which
directly or indirectly controls the Company; or 

(iii) which is
directly or indirectly controlled by a third party who also directly or
indirectly controls the Company; or 

(iv) of which the
Company or any other Associated Company owns or has a beneficial interest in 20%
or more of the issued share capital or 20% or more of its capital assets; or 

(v) which is the
successor in title or assign of the firms, companies, corporations or other
organizations referred to above. 

(b)   
references to clauses,
sub-clauses and schedules are unless otherwise stated to clauses and sub-clauses
of and schedules to this Agreement; 

(c)
   the headings to
the clauses are for convenience only and shall not affect the construction or
interpretation of this Agreement. 

2 

2.    
Appointment 

2.1   The
Company shall employ the Executive and the Executive agrees to act as Chairman,
PCCW (Europe) on and subject to the terms and conditions specified in this
Agreement. The Company also reserves the right to require the Executive to carry
out the duties of another position of equivalent status either in addition to or
instead of his duties as Chairman, PCCW (Europe). 

3.   
Duration of the Employment 

3.1 
The Employment shall commence
on 1 January 2003 for a period of three years and, subject to Clause 15, shall
continue until terminated by either party giving to the other not less than six
months' notice in writing. The Executive's period of continuous employment will
also begin on 1 January 2003. No previous employment with any other employer
shall be treated as continuous with the Employment. 

3.2
  The Executive
represents and warrants that he is not bound by or otherwise subject to any
court order, agreement, arrangement or undertaking which may in any way restrict
or prohibit him from entering into this Agreement or from performing his duties
under this Agreement on the terms and conditions contained in this Agreement.

3.3
  The Executive confirms
that he has disclosed fully to the Company all circumstances in respect of which
there is or might be a conflict of interest between the Company or any Group
Company and the Executive and he agrees to disclose fully any such circumstances
which may arise during the Employment. 

4.     
Hours and Place of Work 

4.1  
The Executive shall work such
hours as are necessary for the proper performance of his duties. The Executive
is not entitled to additional remuneration for hours worked in excess of normal
working hours. The Executive agrees that the limit on working time set out in
the Working Time Regulations 1998 shall not be applicable to the Employment and
further agrees that if the Executive wishes such limit to apply to the
Employment he will give the Company not less than three months' notice that this
is the case. There is a no-smoking rule in the Company's offices and car parking
is currently not available on the Company's site. 

4.2
   The Executive's
place of work will be at the Company's offices in London but the Company may
require the Executive to work at any place within the United Kingdom on either a
temporary or an indefinite basis. 

4.3
   The Executive
agrees to undertake any domestic or international travel deemed necessary by the
Company for the performance of his duties. This may include periods of
employment overseas of over one month in duration. 

5.      Scope of the Employment 

5.1     The Executive shall: 

(a)
  report to the Chairman
and Chief Executive of PCCW; 

(b)
  devote the whole of his
time, attention and skill as may reasonably be required to the performance of
his duties; 

3 

(c)
  faithfully and
diligently perform such duties and exercise such powers consistent with his
senior status/position as may from time to time be assigned to or vested in him
by the Board; 

(d)
  use his best endeavours
to promote and protect the interests of the Group and shall not do anything
which is harmful to those interests; 

(e)
  obey the reasonable and
lawful directions of the Board; 

(f)
  comply with all the
Company's rules, regulations, policies and procedures from time to time in
force; 

(g)  
keep the Board at all times
promptly and fully informed (in writing if so requested) of his conduct of the
business of the Company and any Group Company and provide such explanations in
connection therewith as the Board may require 

(h)    perform
duties for any Group Company if so required by the Board. 

5.2    The Executive shall not: 

(a)  
at any time during the
Employment be employed or engaged by or in or provide services to (whether as an
employee, officer, director, agent, partner or otherwise) any business other
than that of the Company or of any Group Company without consent in writing
being given by the Board; 

(b)
  have any direct or
indirect financial interest in any business entity which in any way is in a
similar field to the Company or to any Group Company or which is a client of the
Company or a Group Company. Nothing in this clause shall preclude the Executive
from holding any shares or loan capital (not exceeding five per cent of the
share or loan capital of the class concerned for the time being in issue) in any
company whose shares are listed or dealt in on a recognized Stock Exchange. 

5.3  
The Company reserves the right
to suspend all or any of the Executive's duties and powers on such terms as it
considers expedient (including a term that the Executive shall not attend at the
Company's premises) PROVIDED THAT throughout any such period of suspension the
Executive shall continue to receive his normal salary and other contractual
benefits to which he is entitled under this Agreement but excluding any bonus/
commission/share of profit and provided further throughout any such period of
suspension the Executive shall remain fully bound by all duties of fidelity
(including but not limited to duties with regard to confidential information) to
which he was subject under the terms of this Agreement or by general law prior
to the commencement of such period. The Company shall be under no obligation to
assign any duties to the Executive and shall be entitled to exclude him from its
premises. 

5.4  
The Company shall be at
liberty to appoint any other person or persons to act jointly with the Executive
in any position to which he may be assigned from time to time. 

5.5
  The Company may at its
sole discretion transfer this Agreement to any Group Company at any time.

4

6.     
Remuneration 

6.1
  The Company shall pay
to the Executive a basic salary at the rate of £ 166,680 per annum, payable by
credit transfer in equal monthly installments in arrears, less tax and national
insurance contributions. The Board will review the Executive's salary annually
but the Executive shall have no entitlement to a salary increase in any year.

6.2
 The Executive may be
entitled to participate in the Pacific Century CyberWorks Limited Share Option
Scheme whereby, subject to the approval of the Option Committee, he shall be
granted 10,000,000 share options ("Share Options") in respect of the shares in
PCCW within six months from the commencement of employment. The number of share
options to be granted may be adjusted in accordance with the share consolidation
rules of PCCW that may take effect in future. The entitlement to the Share
Options is subject to the terms of the relevant share option scheme from time to
time. 

These Share Options shall be granted
at an exercise price equivalent to the highest of (i) the share market closing
price on the date of the grant or (ii) the average share market closing price of
the five business days immediately prior to the date of grant or (iii) the
nominal value of a share on the date of grant. Provided the Executive remains in
the Company's employ and no notice of termination is given or received, he is
entitled to vest one-third of the total PCCW Share Options after each of the
first, second and third anniversaries of the option grant date. The duration of
the PCCW Share Options is ten years from the date of grant. 

Further details of the share option grant will be
covered in the option grant letter to be issued separately at a later date. 

6.3   The
remuneration specified in Clause 6.1 shall represent the entire remuneration
and/or fees to which the Executive may be entitled as a director and/or employee
of the Company or any Group Company. Any directors fees received by the
Executive from the Company or any Group Company in addition to the remuneration
specified in Clause 6.1 shall be deemed to be received by the Executive as a
trustee for the Company (or the Group Company where relevant) and the Executive
agrees to repay any such fees received to the Company (or relevant Group
Company) forthwith upon receipt. 

7.    
Expenses 

7.1
 The Company shall
reimburse the Executive in respect of all expenses reasonably incurred by him in
the proper performance of his duties, subject to the Executive providing such
receipts or other evidence as the Company may require. 

7.2
  The Company shall
reimburse the Executive in respect of subscription to one professional and
similar body where the Company in its discretion considers such membership to be
beneficial to the Company. 

7.3  
Where the Executive is
travelling in the proper performance of his duties, his entitlement on business
travel shall be business class. For flights with duration of over ten hours,
where there are no beds available in business class, the entitlement shall be
first class. 

5

8.     Deductions 

8.1   For
the purposes of the Employment Rights Act 1996, sections 13-27, the Executive
hereby authorises the Company to deduct from his salary and/or any other sums
due to him under this Agreement any sums due from him to the Company including,
without limitation, the Executive's pension contributions (if any), any
overpayments, loans or advances made to him by the Company, the cost of
repairing any damage or loss to the Company's property caused by him (and of
recovering the same), excess holiday and any other monies owed by him to the
Company. 

9.     Holidays 

9.1   The
Executive shall be entitled to 12 working days' paid holiday in each holiday
year (being the period from 1 January to 31 December) in addition to all bank
holidays. The Executive may only take his holiday at such times as are agreed
with the Board. 

9.2   In the respective
holiday years in which the Employment commences or terminates, the Executive's
entitlement to holiday shall accrue on a pro-rata basis up to the last day of
service during the relevant year. 

9.3   
If, on the termination of the Employment, the Executive has exceeded his accrued
holiday entitlement, an amount in respect of the excess may be deducted from any
sums due to him calculated on the same basis as in Clause 9.2. If the Executive
has any unused holiday entitlement, the Company may either require the Executive
to take such unused holiday during any notice period or make payment in lieu
thereof excluding commission or bonus (if any). 

9.4  
Holiday entitlement for one holiday year may not be taken in subsequent holiday
years. Failure to take holiday entitlement in the appropriate holiday year will
lead to forfeiture of any accrued holiday not taken, without any right to
payment in lieu thereof. 

9.5   The Executive
should fill in a holiday form and if approved by the Board, copy the form to
Human Resources and reception. 

10.   Sickness Benefits 

10.1  The
Company shall continue to pay the Executive's basic salary during any period or
periods of absence on medical grounds in accordance with Clause 10.2 below
provided that the Executive shall from time to time if required: 

(a)   supply the Company
with medical certificates covering any period of sickness or incapacity
exceeding seven days (including weekends); and 

(b)   undergo at the
Company's expense a medical examination by a doctor appointed by the Company and
the Company has the right of disclosure of the results of any such medical
examination. 

10.2  During any rolling period of 24 months, the following payments
will be made in accordance with Clause 10.1: 

(a)   for the first four
months' absence in aggregate, full basic salary; and 

(b)   for the fifth
month's absence in aggregate, four fifths basic salary 

(c)   for the sixth
month's absence in aggregate, half basic salary 

6 

10.3
Payment of the Executive's
salary pursuant to Clause 10.2 shall be inclusive of any Statutory Sick Pay to
which the Executive may be entitled. When calculating the Executive's normal
salary, deductions will be made for any State sickness or other benefits due to
the Executive, as well as normal deductions for tax and National Insurance. 

10.4
If the Executive is sick
during any period of holiday leave, he may request that this period of illness
be counted against any sickness benefit rather than his holiday entitlement. Any
such requests should be made promptly and a medical certificate from a doctor
must be produced. 

10.5
Once entitlement to salary
under Clause 10.1 lapses, the Executive shall have no right to any benefit or
emolument from the Company. Any outstanding or prospective entitlement to
Company Sick Pay, private medical insurance cover or long-term disability
benefits shall not prevent the Company from exercising its right to terminate
the Employment in accordance with Clauses 3 or 15 hereof or otherwise and the
Company shall not be liable for any loss arising from such termination. 

10.6
If the Executive's absence
shall be occasioned by the actionable negligence of a third party in respect of
which damages are recoverable, then all sums paid by the Company shall
constitute loans to the Executive, who shall: 

(a)
  forthwith notify the Company
of all the relevant circumstances and of any claim, compromise, settlement or
judgement made or awarded in connection therewith; and 

(b)
  if the Company so requires,
refund to the Company such sum as the Company may determine, not exceeding the
lesser of: 

(i) the amount of damages recovered
by him under any compromise, settlement or judgement; and 

(ii) the sums advanced to him by
the Company in respect of the period of incapacity. 

11.   Pension 

11.1 The Executive
will be eligible for the Company pension scheme once established subject to the
terms and conditions of such scheme from time to time in force. The Company
reserves the right not to establish a pension scheme or to terminate its
participation in such a scheme or to substitute another scheme whether or not
providing for different benefits for any such scheme from time to time. 

Alternatively, the Company may at its
discretion choose to make contribution to the Executive's personal pension
scheme in lieu of the Company pension scheme at the same contribution level as
that of the Company pension scheme. 

7 

12.   Other Benefits 

12.1
The Executive shall
participate in such health care schemes as the Company shall establish and
maintain in the UK from time to time subject to the terms and conditions of such
schemes from time to time in force. The Company reserves the right to terminate
or substitute other scheme(s) for such scheme(s) or amend the scale of benefits
of such scheme(s) including the level of benefits from time to time. If any
scheme provider (including but not limited to any insurance company) refuses for
any reason (whether based on its own interpretation of the terms of the
insurance policy or otherwise) to provide any benefits to the Executive, the
Company shall not be liable to provide any such benefits itself or any
compensation in lieu thereof. 

12.2
Any actual or prospective loss
of entitlement to health cares schemes insurance benefits shall not limit or
prevent the Company from exercising its right to terminate the Employment in
accordance with Clauses 3 or 15 hereof or otherwise and the Company shall not be
liable for any such loss. 

13.   Taxation  

13.1  For the
avoidance of doubt, the Executive shall be liable for all taxes that may be due
to him in United Kingdom from his remuneration, including salary, bonuses,
granting and exercise of share options, share grants and benefits. 

14.   Confidential Information and Company Documents 

14.1 During the Employment (except
in the proper performance of his duties) or at any time (without limit) after
the termination of the Employment directly or indirectly, the Executive: 

(a)
  shall not divulge or
communicate to any person, company, business entity or other organization; 

(b)
  shall not use for his
own purposes or for any purposes other than those of the Company or any Group
Company; 

(c)
  shall not through any
failure to exercise due care and diligence, cause any unauthorized disclosure
of, and 

(d)
  shall use all
reasonable endeavours to avoid the improper disclosure by any other person of,

any trade secrets or Confidential
Information relating to the Company or any Group Company but so that these
restrictions shall cease to apply to any disclosures required by law and any
information which shall become available to the public generally otherwise than
by way of unauthorised disclosure. 

8 

14.2
"Confidential Information"
shall include details of suppliers and their terms of business, details of
customers and their requirements, the prices charged to and terms of business
with customers, marketing plans and sales forecasts, financial information,
results and forecasts (save to the extent that these are included in published
audited accounts), any proposals relating to the acquisition or disposal of a
company or business or any part thereof or to any proposed expansion or
contraction of activities, details of employees and officers and of the
remuneration and other benefits paid to them, information relating to research
activities, inventions, secret processes, designs, formulae and product lines,
programming, software, distribution channels, franchises, investors, sponsors,
advertisers, market research, any information which the Executive is told is
confidential or which he might reasonably expect the Company would regard as
confidential and any information which has been given to the Company or any
Group Company in confidence by customers, suppliers or other persons. 

14.3
All notes, memoranda, records,
lists of customers and suppliers and employees, correspondence, documents,
computer and other discs and tapes, data listings, codes, designs and drawings
and other documents and material whatsoever (whether made or created by the
Executive or otherwise) relating to the business of the Company or any Group
Company (and any copies of the same): 

(a)  
shall be and remain the
property of the Company or the relevant Group Company; and 

(b)
  shall be handed over by
the Executive to the Company or to the relevant Group Company on demand and in
any event on the termination of the Employment. 

15.    Termination 

15.1  
Notwithstanding the terms of Clause 3 above, the Employment may be terminated by
the Company without notice or payment in lieu of notice if the Executive shall
at any time: 

(a)
  be guilty of fraud,
dishonesty, serious misconduct or gross incompetence;  

(b)
  commit a serious or
persistent breach or neglect of the Executive's duties under this Agreement;
 

(c)
  refuse or neglect to
comply with any lawful order given to the Executive by the Company; or 

(d)
  be guilty of misconduct
inconsistent with the due and faithful discharge of the Executive's duties; or

(e)
 act in any manner
(whether in the course of his duties or otherwise) which brings the Executive,
the Company or any Group Company into disrepute or seriously prejudices the
interests of the Company or any Group Company; 

(f)
  be convicted of an
indictable offence; or 

(g)
 become bankrupt, apply
for or have made against him a receiving order under section 286 of the
Insolvency Act 1986, or have any order made against him to reach a voluntary
arrangement as defined by Section 253 of that Act; or

(h)   be or become
prohibited by law from being a director; or 

(i)    be or become of
unsound mind

Any delay by the Company in
exercising such right of termination shall not constitute a waiver thereof. 

9 

15.2
The Company shall have the
right to suspend the Executive (on full pay) pending any investigation into any
potential dishonesty, gross misconduct or any other circumstances which may give
rise to a right for the Company to terminate the Employment pursuant to Clause
14.1 above. 

15.3
The termination of the
Employment shall be without prejudice to any right the Company may have in
respect of any breach by the Executive of any of the provisions of this
Agreement which may have occurred prior to such termination. 

15.4
The Executive agrees that he
will not at any time after the termination of the Employment represent himself
as still having any connection with the Company or any Associated Company, save
as a former employee for the purpose of communicating with prospective employers
or complying with any applicable statutory requirements. 

15.5
The Company reserves the right
at any time to terminate the Employment with immediate effect by paying to the
Executive a sum equal to his basic salary for the relevant period of notice and
excluding any bonus/commission/share of profit and any other emolument referable
to the Employment. The Executive's entitlement to stock options (if any) on the
termination of his employment shall be governed by the rules of the relevant
Share Option Scheme. The Company may exercise this right regardless of whether
or by whom notice under Clause 3.1 has been given and in respect of the whole or
the balance of the notice period which would otherwise be required under that
clause. For the avoidance of doubt, the Executive shall have no entitlement to
such payment, or payments unless and until the Company notifies the Executive in
writing of its decision to make such payment(s) to him. 

15.6
The giving of any period of
notice of termination under Clause 3.1 (whether given by the Company or the
Executive), does not limit the Company's right to suspend any of the Executive's
duties and powers under Clause 5.3. In addition, or alternatively, the Company
may, during the whole or part of such period of notice, require the Executive to
perform duties or to perform no duties (including any modified duties arising
from an exercise by the Company of its rights under Clause 5.3) at such
locations as the Company may require consistent with Clause 4.2. Throughout any
such period of suspension or amendment, the Executive shall continue to receive
his normal salary and other contractual benefits to which he is entitled under
this Agreement but excluding any bonus/ commission/share of profit. 

15.7
On the termination of the
Employment (or on either the Company or the Executive having served notice of
such termination), the Executive shall: 

(a)   at
the request of the Company resign from office as a Director of the Company and
all offices including any directorship held by him in any Group Company
forthwith without compensation for loss of office and shall transfer without
payment to the Company or as the Company may direct any qualifying shares
provided by it, provided however that such resignation shall be without
prejudice to any claims which the Executive may have against the Company or any
Group Company arising out of the termination of the Employment; and 

10 

(b)  
immediately transfer to the Company all materials within the scope of Clause
14.3 and all credit cards, motor-cars, car keys and other property of or
relating to the business of the Company or of any Group Company which may be in
his possession or under his power or control, and if the Executive should fail
to do so the Company is hereby irrevocably authorized to appoint some person in
his name and on his behalf to sign any documents and do any things necessary or
requisite to give effect thereto.

16.    Copyright. Inventions and Patents 

16.1 All records,
documents, papers (including copies and summaries thereof) and other copyright
protected works made or acquired by the Executive in the course of the
Employment shall, together with all the worldwide copyright and design rights in
all such works, be and at all times remain the absolute property of the Company.

16.2 The Executive
hereby irrevocably and unconditionally waives all rights granted by Chapter IV
of Part I of the Copyright, Designs and Patents Act 1988 that vest in him
(whether before, on or after the date hereof) in connection with his authorship
of any copyright works in the course of his employment with the Company,
wherever in the world enforceable, including without limitation the right to be
identified as the author of any such works and the right not to have any such
works subjected to derogatory treatment, 

16.3 The Company
and the Executive acknowledge and accept the provisions of Sections 39 to 42 of
the Patents Act 1977 ("the Act") relating to the ownership of employees'
inventions and the compensation of employees for certain inventions
respectively. 

16.4 The Executive
acknowledges and agrees that, by virtue of the nature of his duties and the
responsibilities arising, he has a special obligation to further the interests
of the Company within the meaning of Section 39(l)(b) of the Act. 

16.5 Any invention,
development, process, plan, design, formula, specification, programme or other
matter or work whatsoever (collectively "the Inventions") made, developed or
discovered by the Executive, either alone or in concert, during the course of
the Executive's duties of employment for the Company shall forthwith be
disclosed to the Company and, subject to Section 39 of the Act, shall belong to
and be the absolute property of the Company. 

16.6 With respect
to those rights in the Inventions which do not belong to the Company pursuant to
Clause 16.5 but which were made (wholly or partly, either alone or in concert)
using the Company's equipment, or (wholly or partly, either alone or in concert)
using information obtained during the course of the Executive's employment, or
else are Inventions which are or may be relevant to or related to the Company's
existing or future business (collectively "Executive Rights"), the Executive at
the request and cost of the Company (and notwithstanding the termination of his
employment) shall forthwith license or assign (as determined by the Company) to
the Company the Executive Rights and shall deliver to the Company all documents
and other materials relating to the Inventions. The Company shall pay to the
Executive such compensation for the licence or assignment as the Company shall
determine in its absolute discretion, subject to Section 40 of the Act. 

11 

16.7 The Executive
shall at the request and cost of the Company (and notwithstanding the
termination of his employment) sign and execute all such documents and do all
such acts as the Company may reasonably require:- 

(a)  
to apply for and obtain in the
sole name of the Company alone (unless the Company otherwise directs) patent,
registered design, or other protection of any nature whatsoever in respect of
the Inventions in any country throughout the world and, when so obtained or
vested, to renew and maintain the same; 

(b)
  to resist any objection
or opposition to obtaining, and any petitions or applications for revocation of,
any such patent, registered design or other protection; 

(c)
  to bring any
proceedings for infringement of any such patent, registered design or other
protection; and 

(d)
  otherwise to give
effect to the assignments, waivers and licences contemplated under this Clause
16. 

16.8 The Company shall decide, in its sole discretion, when
and whether to apply for patent, registered design or other protection in
respect of the Inventions and reserves the right to work any of the Inventions
as a secret process in which event the Executive shall observe the obligations
relating to confidential information which are contained in Clause 14 of this
Agreement. 

17.   Restrictive Covenants 

17.1  In relation to the restrictions set out in this Clause 17: 

(a)
 "Relevant Business"
means any business or commercial activity undertaken by the Company at the
Relevant Date including, without limitation, the research into, development,
manufacture, supply, sale, provision or marketing of any services or goods by
the Company with which the Executive was involved to a material degree at any
time in the 12 months immediately preceding such date; 

(b)
  "Relevant Customer"
means any person, firm, company or other organization who or which at any time
in the period of 12 months immediately preceding the Relevant Date was a
customer or client of, or who had regular dealings with, the Company and with
whom or which the Executive had contact or about whom or which the Executive
obtained confidential information during the Employment; 

(c)
  "Relevant Employee"
means any person who, at the Relevant Date, was employed by the Company at a
senior level and with whom the Executive had material contact or dealings in
performing the duties of his employment and who could cause material loss or
damage to the Company if he was to be employed in any business competing or
seeking to compete with any Relevant Business; and 

(d)
 "Relevant Date" means
the earliest date on which (i) the Executive ceased to carry out productive work
for the Company under Clause 15.6 of this Agreement or (ii) the date on which
any period of suspension of the Executive's duties and power in clause 5.3 where
such period continues without interruption through to the date on which the
Executive's employment with the Company terminates or (iii) the date on which
the Executive's employment with the Company terminates. 

12 

(e)    "Prohibited
Area" means 

(i)    the United
Kingdom; 

(ii)  
any other country in the world where, on the Relevant Date, the Company
develops, sells, supplies, manufactures or researches its products or services
or where the Company is intending within three months following the Relevant
Date to develop, sell, supply, manufacture or research its products or services
and in respect of which the Executive has been responsible (whether alone or
jointly with others), concerned or active on behalf of the Company during any
part of the twelve months immediately preceding the Relevant Date. 

17.2
The Executive agrees that he
or his agent will not (without the consent in writing of the Board), for a
period of 12 months immediately after the Relevant Date, solicit, assist in
soliciting or seek to entice away from the Company the business or trade of a
Relevant Customer with the intention of supplying goods or services to that
Relevant Customer so as to compete or seek to compete with any Relevant
Business. 

17.3
The Executive agrees that he
or his agent will not (without the consent in writing of the Board), for a
period of 12 months immediately after the Relevant Date, supply goods or
services to, facilitate the acceptance of orders from, or otherwise have
business dealings with any Relevant Customer on his own behalf in competition
with any Relevant Business or on behalf of any other person, firm, company or
other organization which is or seeks to be in competition with any Relevant
Business. 

17.4
The Executive agrees that he
or his agent will not (without the consent in writing of the Board), for a
period of 12 months immediately after the Relevant Date, for his benefit in
competition with any Relevant Business or on behalf of any business, entity or
organization which is or seeks to be in competition with any Relevant Business,
offer employment to or in any way entice away a Relevant Employee from the
Company. 

17.5
The Executive agrees that he
or his agent will not (without the consent in writing of the Board), for a
period of six months immediately after the Relevant Date within the Prohibited
Area, be engaged in, perform services in respect of or otherwise be concerned in
any capacity in any business, firm, organization or entity which is or seeks to
be in competition with any Relevant Business. 

17.6
Following termination of this
Agreement, the Executive shall not in any way hold himself out or permit himself
to be held out as being interested in or in any way connected with the business
of the Company. 

17.7
Nothing in this clause shall
prevent the Executive from being engaged in or by, or from participating in, any
business or entity to the extent that any of its or his activities for such
business or entity shall relate solely matters of a type with which the
Executive was not materially concerned in the 12 months immediately preceding
the Relevant Date. 

13 

17.8
The restrictions set out in
this Clause 17 shall apply whether the Executive acts for his own benefit or on
behalf of any company, other organization or person and whether he acts directly
or indirectly. 

17.9
The provisions of Clauses
17.10 and 17.11 below shall only apply in respect of those Group Companies (i)
to whom the Executive gave his services, or (ii) for whom he was responsible, or
(iii) with whom he was otherwise concerned, in the 12 months immediately
preceding the Relevant Date. 

17.10
Clauses 17.1 to 17.8 and
Clause 17.12 of this Agreement shall apply as though references to the "Group
Company" were substituted for references to the "Company". The obligations
undertaken by the Executive pursuant to these clauses shall, with respect to
each Group Company, constitute a separate and distinct covenant and the
invalidity or unenforceability of any such covenant shall not affect the
validity or enforceability of the covenants in favour of the Company or any
other Group Company. 

17.11
In relation to each Group
Company referred to in Clauses 17.9 and 17.10 above, the Company contracts as
trustee and agent for the benefit of each such Group Company. The Executive
agrees that, if required to do so by the Company, he will enter into covenants
in the same terms as those set out in Clauses 17.1 to 17.8 hereof directly with
all or any of such Group Companies, mutatis mutandis. If the Executive fails,
within seven days of receiving such a request from the Company, to sign the
necessary documents to give effect to the foregoing, the Company shall be
entitled, and is hereby irrevocably and unconditionally authorised by the
Executive, to execute all such documents as are required to give effect to the
foregoing, on his behalf. 

17.12
Each of the restrictions
contained in this Clause 17 shall be read and construed independently of the
others and all such restrictions are considered reasonable by the parties to
this Agreement, but in the event that any such restriction shall be found or
held to be void in circumstances where it would be valid if some part of it were
deleted or the period, scope or distance of the application reduced, the parties
to this Agreement agree that such restriction shall apply with such modification
as may be necessary to make it valid and effective and that such modification
shall not affect the validity of any other restriction contained in this
Agreement. 

18.    
Grievance procedure 

18.1 If the
Executive wishes to obtain redress of any grievance relating to the Employment
or is dissatisfied with any reprimand, suspension or other disciplinary step
taken by the Company, he shall apply in writing to the Chairman of the Board,
setting out the nature and details of any such grievance or dissatisfaction.
Thereafter (if the matter is not resolved), the Board will deal with the matter
by discussion and a majority decision of those present and voting (but without
the Executive being entitled to vote on that issue) will be binding. There is no
disciplinary procedure applicable to the Executive. 

19.    
Miscellaneous 

19.1 The various
provisions and sub-provisions of this Agreement are severable and if any
provision or sub-provision is held to be unenforceable by any court of competent
jurisdiction then such unenforceability shall not affect the enforceability of
the remaining provisions or sub-provisions in this Agreement. 

14

19.2 The benefit of
each agreement and obligation of the Executive under this Agreement may be
assigned to and enforced by all successors and assigns for the time being of the
Company and its Group Companies (where applicable) and such agreements and
obligations shall operate and remain binding notwithstanding the termination of
this Agreement. 

20.    Notices

20.1 Any notice or
other document to be given under this Agreement shall be in writing and may be
given personally to the Executive or to the Secretary of the Company (as the
case may be) or may be sent by first class post or other fast postal service or
by facsimile transmission to, in the case of the Company, the address at 39/F,
PCCW Tower, TaiKoo Place, 979 King's Road, Quarry Bay, Hong Kong. Attention:
Company Secretary (fax : +852 2962 5725) and in the case of the Executive either
to his address shown on the face of this Agreement or to his last known place of
residence. 

20.2  Any such notice shall be
deemed served when in the ordinary course of the means of transmission it would
first be received by the addressee in normal business hours. 

21.   Former
Service Agreements 

21.1 This Agreement shall be in
substitution for any previous letters of appointment, agreements or
arrangements, whether written, oral or implied, relating to the employment of
the Executive. 

21.2 The Executive hereby
acknowledges that he has no outstanding claims of any kind against the Company.

22.   Choice of law
and submission to jurisdiction 

22.1 This Agreement shall be
governed by and interpreted in accordance with English law. 

22.2 The parties hereby submit to
the jurisdiction of the Courts of England and Wales. 

15

IN WITNESS whereof this Agreement has been executed by the parties hereto the
day and year first above written. 

 

16PCCW Limited: Exhibit 4(qq) - Prepared by TNT Filings Inc.

EXHIBIT 4(qq)

PRIVATE & CONFIDENTIAL 

28 March 2003 

Mr Chung Cho Yee Mico 

S/N 08170946 

Present 

Dear Mr Chung 

In view of your present duties and responsibilities as the
Executive Director of PCCW Limited, the Head of Mergers and Acquisitions and
Chairman, CyberWorks Ventures, we have restructured your current package and the
new package will take effect from 1 April 2003. You will continue to be employed
by PCCW Services Limited ("the Company") and the following terms and conditions
of employment (which have incorporated all the previous changes to the terms and
conditions of your employment already communicated to you since you commenced
employment with the PCCW Group on 15 March 1999) will continue to apply: 

1.     Salary 

A basic salary of HK$300,000 per month payable in
arrears. Salaries will be paid on the 28th of each month or earlier if the 28th
falls on a public holiday. 

2.    
Housing Benefits 

Your housing benefits is HK$l16,700 per month. 

3.    
Target Bonus 

Your target bonus for a full performance year (ending
on 31 December) is not less than HK$2,000,000 per year. 

The amount of target bonus payable is
solely at the Company's discretionary and the amount to be paid is generally
guided by your achievement of those standards of performance agreed between you
and your reporting manager from time to time. A performance review is conducted
at the end of each year. Any target bonus payable in relation to a performance
year is payable in the ensuing April / May. 

4.    
Directors' Fees 

During the term of your employment
with the Company, you may be asked from time to time to act as a director in a
company or companies within the PCCW Group (where "PCCW Group" shall mean PCCW
Limited and its subsidiaries (as defined under the Companies Ordinance)) or any
company associated with the Company. In the event that you do act as a director,
if the Company so requests you should tender your resignation as director of
such a company forthwith in the form and which is provided by the Company which
may require that you confirm that you do not have any claims against that
company. 

	.../2 
	PCCW Limited        
         
    www.pccw.com.
	PO Box 9896 GPO Hong Kong        
    Tel +852 2888 2888         Fax +852
    2877 8877

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28 March 2003

Chung Cho Yee Mico

 

As it is the Group policy that an
employee shall not receive any additional remuneration as a result of acting as
a director of any company in the PCCW Group or any company associated with the
Company, you agree and understand that any director's fees payable to you shall
be considered part of your remuneration and, in such case, your remuneration for
the month in which you are in receipt of such director's fees (and if applicable
the following months, to the extent necessary to achieve an offset of the
aggregate amount of such fees) shall be reduced by a corresponding amount. This
arrangement, however, will not in any way affect your fringe benefits, including
the employer contribution to the Provident Fund Scheme. 

5.     Hours of Work 

Your normal working hours is from
9:00 am to 6:00 pm, Monday to Friday, with one hour lunch break. You are
required to dedicate all your working hours to work relating to the business of
the Company and of the PCCW Group. 

It may be necessary to work additional hours,
including Saturdays, Sundays and Public Holidays for which overtime is not paid.

6.     Holiday Entitlement - Annual Leave 

Your annual leave entitlement will
remain at 24 working days' leave with pay each year. A working day for this
purpose excludes Saturdays, Sundays and Public Holidays. All annual leave must
be taken before the end of the relevant calendar year (i.e. 31 December) and no
annual leave entitlement may be carried forward to the following year. Save
where the Company agrees in writing and in accordance with the Employment
Ordinance, there will be no payment in lieu of any unused annual leave. 

If your leave taken is more than you
have accrued at the date of leaving, the Company will deduct the excess holiday
pay from any salary due on termination. Pay for this purpose means basic salary
and housing benefits, excluding commission or bonus of whatever kinds. 

If you spend a certain amount of your
leave time visiting company connections in places where you spend your leave,
time spent on such calls cannot be 'deducted' from the duration of leave. This
is considered a normal practice with the Company. 

7.     PCCW Medical Scheme 

You and your spouse and children are
provided with hospitalization assistance benefits and a clinical expenses
scheme, up to the limits specified in the attached medical leaflet. You are
eligible for Class 8 benefits. 

Should you cease to be employed by the Company, you
must return the medical card(s) to the Human Resources Department on or before
your last day of service. 

8.     PCCW Provident Fund Scheme 

You will remain a member of the PCCW
Provident Fund Scheme, a non-contributory scheme with the Group contributing an
equivalent of 12% of your basic monthly salary. All the rules applicable to the
Scheme will continue to form part of the terms and conditions of your
employment. A quick summary of the main provisions of the Scheme is attached.

	.../3 

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28 March 2003

Chung Cho Yee Mico

 

9.     Termination of Employment 

Your employment with the Company is
on a continuous basis which may be terminated by either party giving to the
other six months' notice in writing or six months' basic salary and housing
benefits in lieu thereof. This period of notice can commence from any day. 

Should you (i) be guilty of fraud,
dishonesty or serious misconduct or (ii) commit a serious or persistent breach
or neglect of your duties hereunder or (iii) be in breach of any representation
by you or any undertaking made by you hereunder or otherwise in relation to your
employment or benefits arising out of your employment or (iv) make any
misleading statement in relation to your previous employment or (v) refuse or
neglect to comply with any lawful order given to you by the Company or (vi) be
guilty of misconduct inconsistent with the due and faithful discharge of your
duties or (vii) commit any act that may cause undue embarrassment or moral or
social condemnation to the Company, the Company shall be entitled to terminate
this Agreement forthwith without notice or payment in lieu thereof. The Company
shall also be entitled to so terminate this Agreement on any other ground on
which an employer would be entitled to terminate an employee's contract without
notice at common law. 

If required by the Company, you will
agree not to carry out any work or attend the offices or contact any clients of
the Company or of any of its associated companies during your notice period. 

Upon termination of employment, you
will immediately transfer and deliver to the Company all papers, documents,
notes, memoranda, records and writings belonging to the Company or its
subsidiaries, holding or associated companies which you may have in your
possession or control by reason of your position in the Company in any way
relating to the business of the Company or its subsidiaries, holding or
associated companies or to the business of the clients of the Company and its
subsidiaries, holding or associated companies together with all extracts or
copies thereof. 

If notice of termination of your
employment is given by you or the Company, you will resign immediately from all
directorships and any other offices appointed by or held at the request of the
Company or any of its subsidiaries or affiliates. 

10.    Expenses 

The Company will reimburse authorised
expenses properly incurred on Company business upon production of receipts or
supporting payment vouchers. A guiding principle in settling expenses is that
there should neither be loss nor benefit financially as a result of any
reasonable expense incurred on Company business. 

Claims for expenses must be approved by the Company.
No employee is entitled to authorise his own expenses. 

11.    Business Travel 

For business travel, you are entitled to travel
business class. However, flights with a duration of less than three hours will
be made economy class. 

	.../4 

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28 March 2003

Chung Cho Yee Mico

 

12.     Professional Fees 

The Company will reimburse membership
subscriptions to professional and similar bodies, where such memberships are
considered beneficial to the PCCW business at the discretion of the Company. 

13.     Employment 

You will not (without the prior
written consent of the Company or such of its subsidiaries, holding or
associated companies) during your employment, directly or indirectly be engaged
in, or provide services to any other person, company, business entity whatsoever
(whether as an employee, officer, director, agent, shareholder, if such
shareholding is more than 5% of a company, partner, consultant or otherwise) it
being the intention of the Company or such of its subsidiaries, holding or
associated companies that you will devote your time and attention to the service
of the Company or such of its subsidiaries, holding or associated companies. 

As the Company or such of its
subsidiaries, holding or associated companies may have interests and business
dealings overseas, in the performance of your duties of employment with the
Company or such of its subsidiaries, holding or associated companies, the
Company shall be entitled to require you from time to time to work overseas. 

14.     Representation of Employee 

You represent and warrant that you
are not bound by or subject to any court order, agreement, arrangement or
undertaking (including, but without limitation, any non-competition or
non-solicitation undertakings) which may in any way restrict or prohibit you
(with or without the payment of compensation) from entering into this contract
of employment or from performing your duties in whole or in part and providing
services under this contract of employment on the same terms and conditions. 

15.     Disclosure of Information and Conflict of
Interest 

Within seven days from the
commencement of your employment, and thereafter once in every six months during
the term of your employment, you are required to disclose to the Company in
writing full details of any interest you have (whether legally or beneficially
or through any agent and including any interest in any share or loan capital or
other securities) in any company or other commercial entity or body corporate or
unincorporate ("Interest"). For the purposes of disclosure you shall be taken to
be interested in and required to disclose any Interest of your spouse, children
under 21 years of age or any corporation which acts, or the directors of which
are accustomed to act, in accordance with your directions or instructions or in
respect of which you are entitled to exercise or control the exercise of
one-quarter or more of the voting powers at general meetings of that
corporation. Whether any Interest so disclosed is in a company or other
commercial entity or body corporate or unincorporate, you shall disclose, so far
as you are aware having made all reasonable enquiries, all Interests of such
other company or other commercial entity or body corporate or unincorporate. 

	.../5 

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28 March 2003

Chung Cho Yee Mico

 

If required at any time by the
Company, you shall dispose of, or shall procure your spouse or children under 21
years of age as the case may be to dispose of, any Interest disclosed or
required to be disclosed to the Company. In addition, without altering your duty
to make the necessary disclosure, you shall be required to dispose of any
Interest which you bona fide hold as an investment of a personal nature if such
Interest is in conflict with the business or affairs of the Company or it
subsidiaries, holding or associated companies or any company that forms part of
the PCCW Group. 

Furthermore, you shall promptly
disclose to the Company all information or material which at any time shall have
come to your knowledge or into your possession which may be used by the Company
or its subsidiaries, holding or associated companies or any company that forms
part of the PCCW Group for the carrying on or development of its or their
existing businesses or the development of a new business. 

Without prejudice to any other
provisions of this letter, you agree to declare any of your business in conflict
with the business or activities of the Company or such of its subsidiaries,
holding or associated companies, at the date hereof or in which you may
subsequently become involved in reasonable detail to the Company or such of its
subsidiaries, holding or associated companies. 

16.    Severability 

The various provisions and
sub-provisions of this letter are severable and if any provision or
sub-provision or identifiable part thereof is held to be invalid or
unenforceable by any court of competent jurisdiction then such invalidity or
unenforceability will not affect the validity or enforceability of the remaining
provisions or sub-provisions or identifiable parts thereof in this letter. 

17.    Confidentiality 

It is a condition of this contract of
employment that you will keep confidential and not disclose, exploit or use
neither for your own purpose nor for any purpose other than that of the Company,
directly or indirectly, during and subsequent to your employment with the
Company, any information in relation to the affairs of the Company or any of its
subsidiaries, holding or associated companies obtained by virtue of your
employment or during your work with the Company or any of its subsidiaries,
holding or associated companies including without limitation details of your
terms of employment. Any breach or failure to observe this condition will make
you liable to immediate dismissal without compensation and the Company reserves
the right to take appropriate action. 

18.    Company Policies 

(a)   For
other applicable terms and conditions of employment not covered in this letter
and related human resources policies, please refer to the website http://intra.pccw.com/hr
for details. The Company reserves the right to modify, alter or amend such
policies as the circumstances may require from time to time. 

(b)   In
addition to 18(a) above, you are also required to comply with the individual
policies, procedures, and processes of various business functional units that
are applicable from time to time. 

	.../6 

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28 March 2003

Chung Cho Yee Mico

 

19.    Severability 

The various provisions and
sub-provisions of this letter are severable and if any provision or
sub-provision or identifiable part thereof is held to be invalid or
unenforceable by any court of competent jurisdiction then such invalidity or
unenforceability will not affect the validity or enforceability of the remaining
provisions or sub-provisions or identifiable parts thereof in this letter. 

20.    Governing Law 

This contract shall be governed in accordance with
the laws of the Hong Kong Special Administrative Region of the People's Republic
of China. 

21.    Transfer of Employment 

The Company reserves its rights to
transfer your employment or second you to other related companies within the
PCCW Group when it sees fit in accordance with the provisions of the Employment
Ordinance. The transfer or secondment may be overseas. 

This letter aims to provide an update summary of the written
terms and conditions governing your contract of employment with the Company.
Please, therefore, signify your acknowledgement of the terms contained within
this letter by signing and returning to me the duplicate contract and the
Confidentiality / Intellectual Property Undertaking. 

Yours sincerely 

Francis Yuen 

Deputy Chairman 

	.../7 

Page 7

28 March 2003

Chung Cho Yee Mico

 

I have received a copy of this letter and have read and
understood its contents. I acknowledge that the contents of this letter provides
an update of the current terms and conditions of my employment with PCCW
Services Limited.

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