Document:

Executive Employment Contract

    
      EXHIBIT
        10.18

       

    

    
      		

              PacificNet
                Inc. (Nasdaq:PACT)

            

    

    
      US
        Office: 860 Blue Gentian Road, Suite 360, Eagan, MN 55121, USA. Tel. +1 (651)
        209-3100 Fax. +1 (651) 209-3103

      HK
        Office: Unit 1702, ChinaChem Century Tower, 178 Gloucester Road, Wanchai,
        Hong
        Kong.  Tel:
        (852) 28762900 Fax: (852) 2793 0689 

    

     

    PACIFICNET
      INC. EXECUTIVE EMPLOYMENT CONTRACT

    

    THIS
      EMPLOYMENT CONTRACT (“CONTRACT”) is made as of the 30th
      day of December, 2002,
      by and
      between PacificNet Inc., a company registered in the State of Delaware, USA,
      with its primary office located at 860 Blue Gentian Road, Suite 360, Eagan,
      MN
      55121-1575, USA (“PacificNet” or “Company”); and Mr. Tony
      I
      Tong.
      (“Executive”).

    

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

    

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

    

    1.
      Position and Duties.
      The
      Company hereby affirms its employment of Executive as its Chief
      Executive Officer,
      to
      perform the duties and functions as are specified by the Company’s Articals of
      Incorporation and ByLaws, under the authority of the Board of Directors as
      selected and approved by the majority of the shareholders.

     

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

     

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

    

    2.
      Term.
      The
      commencement date of this employment CONTRACT is April
      1, 2002,
      and
      shall continue on for a term of three
      (3) years,
      or
      until he resigns or is terminated in accordance with Section 5 of this
      CONTRACT.

    

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

    

    
      	a.            
               	
              Base
                Salary. For
                all services rendered by Executive pursuant to this CONTRACT, the
                Company
                shall pay Executive an annual salary of US$160,000,
                out of which US$100,000 is payable in Cash and US$60,000 is payable
                in
                freely tradable and fully registered PACT Shares (the number of PACT
                Shares to be issued each month is based on the average price of PACT
                shares during the month). Such annual salary shall be paid once per
                month
                in equal installments and shall
                be subject to such periodic cost of living and/or merit increases
                as
                PacificNet’s Board of Directors in its discretion as it may deem
                appropriate. 

            

    

    

    
      	b.            
              	
              Performance
                Cash Bonuses.
                Executive shall be entitled to a quarterly performance bonus as defined
                in
                Appendix 1, (payable in Cash, stock options, or free trading PACT
                shares).
                

            

    

    

    
      	c.            
              	
              Quarterly
                Stock Options.
                Executive shall be entitled to quarterly stock options grant as defined
                in
                Appendix 1; the Company’s Compensation Committee may elect to grant more
                for any quarter. 

            

    

    

    
      	d.            
              	
              Housing
                Allowance.  Executive
                shall be entitled to US$2,500
                per month
                as
                accommodation allowance.

            

    

    

    
      	e.            
              	
              Allowances
                for Automobile and Tax Preparation Services. Executive
                shall be entitled to an Automobile Allowance of US$500
                per month
                and US$2000
                per year for Tax Preparation expenses.
                

            

    

    

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

            

    

    

    
      	g.           
              	
              Medical
                and Life Insurance Coverage.
                Executive and his immediate family shall be entitled to medical,
                dental,
                out-patient, hospitalization, health and life insurance coverage.
                The
                Company also agrees to provide Executive with a term life insurance
                policy. The amount of such policy shall be determined by the Company
                in
                its sole discretion, provided that such policy shall provide benefits
                in
                an amount at least equal to US$1,000,000. The Company’s Board of Directors
                may from time to time grant Executive further
                benefits.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

            

    

    

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

            

    

     

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

    

    5.
      Termination.

    

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

            

    

    

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

            

    

     

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

            

    

     

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

     

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

            

    

     

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

            

    

     

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

            

    

    

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

            

    

    

    6.
      General
      Provisions.

     

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

            

    

    
      	 	 

    

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

            

    

    
      	 	 

    

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

            

    

    
      	 	 

    

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

            

    

    
      	 	 

    

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

            

    

    
      	 	 

    

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

            

    

    

    7.
      Non-Disclosure Agreement. Executive
      acknowledges the interest of the Company in maintaining the confidentiality
      of
      information related to its business and shall not at any time during the
      Employment Term or thereafter, regardless of the reason for or circumstances
      of
      termination of employment, directly or indirectly, reveal or cause to be
      revealed to any person or entity the production processes, inventions, trade
      secrets, customers lists or other confidential business information obtained
      by
      him as a result of his employment or relationship with the Company, except
      when
      authorized in writing to do so by the Board of Directors of the Company;
      provided, however, that the parties acknowledge that it is not the intent of
      this section to include within its subject matter (i) information not
      proprietary to the Company, or (ii) information which is in the public
      domain.

    

    8.
      Notices.
      All
      notices and other communications under this CONTRACT will be sufficient if
      written and sent by registered or certified mail, return receipt requested,
      in
      the case of Executive, to his residence as shown on the Company’s records, and
      in the case of the Company, to its registered office.

    

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

    

    EXECUTIVE:

    

    
      /s/
        Tony I.
        Tong                                         

      Tony
        I.
        Tong

    

     

    Approval
      by the Board of Directors of PacificNet Inc. Date
      of
      Approval:  December
      30, 2002

    

    

    
      Signed
        by:  /s/
        Yue (Justin)
        Tang                                                                          

      Yue
        (Justin) Tang, Chairman of the Compensation Committee

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    PACIFICNET
      INC. EXECUTIVE EMPLOYMENT
      CONTRACT

     

    Appendix
      1: Quarterly Performance Cash Bonus and Stock Options Bonus
      Schedule

    

    1.
      Quarterly Performance Cash Bonus

    

    Year
      2002 and 2003

    

    
      	
              GAAP
                loss/profit for the quarter

            	
              Cash
                bonus

            
	
              GAAP
                loss

            	
              US$0

            
	
              GAAP
                net profit greater than US$0 but less than US$100,000

            	
              3%
                of net profit

            
	
              GAAP
                net profit greater than US$100,000 but less than
                US$250,000

            	
              4%
                of net profit

            
	
              GAAP
                net profit greater than US$250,000 but less than
                US$500,000

            	
              5%
                of net profit

            
	
              GAAP
                net profit greater than US$500,000 but less than
                US$1,000,000

            	
              6%
                of net profit

            
	
              GAAP
                net profit greater than US$1,000,000 

            	
              7%
                of net profit

            

    

    

    Year
      2004
      - to be
      determined in January 2004.

    Year
      2005
      - to be
      determined in January 2005.

    

    2.
      Quarterly Stock Options Bonus

    

    Year
      2002 and 2003 

    

    Exercise
      Price of Options: US$0.20 per share, and will be exercisable on a 1-1 basis
      with
      the stock. Options will be granted on quarterly basis within 10 days of the
      release of each Quarterly Financial Report, and exercisable immediately after
      the grant. Other terms will be consistent with the Company’s Stock Option
      Plan.

    

    
      	
              Average
                PACT share price during each quarter (US$)

            	
              Number
                of Options*

            
	
              Less
                than 0.10

            	
              0

            
	
              0.101
                - 0.20

            	
              100,000

            
	
              0.201
                - 0.40

            	
              200,000

            
	
              0.401
                - 0.60

            	
              300,000

            
	
              0.601
                - 0.80

            	
              400,000

            
	
              0.801
                - 1.00

            	
              500,000

            
	
              1.001
                - 2.00

            	
              600,000

            
	
              Greater
                than 2.00

            	
              1,000,000

            

    

    *Calculated
      on a pre-split adjusted basis. For example a 5-1 reverse split will decrease
      the
      number options by 80%.

    

    Year
      2004
      - to be
      determined in January 2004.

    Year
      2005
      - to be
      determined in January 2005.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Amendment
      1 -- Dated: 10th
      day of April, 2003

    

    PACIFICNET
      INC. EXECUTIVE EMPLOYMENT CONTRACT - AMENDMENT 1

    

    THIS
      EMPLOYMENT CONTRACT (“CONTRACT”) Amendment 1 is made as of the 10th
      day of April, 2003,
      by and
      between PacificNet Inc., a company registered in the State of Delaware, USA,
      with its primary office located at 860 Blue Gentian Road, Suite 360, Eagan,
      MN
      55121-1575, USA (“PacificNet” or “Company”); 

    and
      Mr.
Tony
      I
      Tong.
      (“Executive”).

    

    Background

    In
      order
      to conserve the cash position of PacificNet and reduce the Company’s net cash
      out-flow, both parties, PacificNet (“Company”) and Tony Tong (“Executive”),
      agree to the following amendments to the original Employment Contract dated
      December 30, 2002.

    

    List
      of amendments:

    A1-1.
      

    Clause
      3a, Base Salary, is amended to:

    Beginning
      in May 1, 2003, Executive’s Base Salary Cash Component of US$100,000 annually
      will be substituted with the Exercise Price payment of Executive’s Stock Options
      of the equivalent amount.

    

    A1-2.

    Clause
      3b, Performance Cash Bonuses, is amended to:

    Beginning
      in May 1, 2003, Executive’s Performance Cash Bonuses will be substituted with
      the Exercise Price payment of Executive’s Stock Options of the equivalent
      amount.

    

    A1-3.

    Term
      of
      Amendment:

    The
      above
      temporary amendments will be valid for 12 months: beginning in May 1, 2003
      and
      ending in March 31, 2004. After March 31, 2004, all the original terms of this
      Employment Contract shall resume valid.

    

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

    

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

    

    EXECUTIVE:

    
      /s/
        Tony I.
        Tong                                         

      Tony
        I.
        Tong

    

    

    Approval
      by the Board of Directors of PacificNet Inc. Date
      of
      Approval:  April
      10, 2003

    

     

    
      Signed
        by:  /s/
        Yue (Justin)
        Tang                                                                          

      Yue
        (Justin) Tang, Chairman of the Compensation Committee

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Amendment
      2 -- Dated: 14th
      day of May, 2003

    

    PACIFICNET
      INC. EXECUTIVE EMPLOYMENT CONTRACT - AMENDMENT 2

    

    THIS
      EMPLOYMENT CONTRACT (“CONTRACT”) Amendment 2 is made as of the 14th
      day of May, 2003,
      by and
      between PacificNet Inc., a company registered in the State of Delaware, USA,
      with its primary office located at 860 Blue Gentian Road, Suite 360, Eagan,
      MN
      55121-1575, USA (“PacificNet” or “Company”); 

    and
      Mr.
Tony
      I
      Tong.
      (“Executive”).

    

    Background

    In
      order
      to conserve the cash position of PacificNet and reduce the Company’s net cash
      out-flow, both parties, PacificNet (“Company”) and Tony Tong (“Executive”),
      agree to the following amendments to the original Employment Contract dated
      December 30, 2002.

    

    List
      of amendments:

    A2-1.
      

    Clause
      3d, Housing Allowance, is amended to:

    Beginning
      in May 1, 2003, Executive’s Housing Allowance will be suspended for one year or
      until after the company has achieved 4 consecutive profitable
      quarters.

    

    A2-2.

    Clause
      3e, Allowances for Automobile and Tax Preparation Services, is amended
      to:

    Beginning
      in May 1, 2003, Executive’s Allowances for Automobile and Tax Preparation
      Services will be suspended for one year or until after the company has achieved
      4 consecutive profitable quarters.

    

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

    

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

    

    EXECUTIVE:

    

     

    /s/
      Tony I.
      Tong                                         

    Tony
      I.
      Tong

    

    

    

    Approval
      by the Board of Directors of PacificNet Inc. Date
      of
      Approval:  May
      14, 2003

    

    

    Signed
      by:  /s/
      Yue (Justin)
      Tang                                                                          

    Yue
      (Justin) Tang, Chairman of the Compensation CommitteeExecutive Employment Contract

    EXHIBIT
      10.19

     

    
      		

              PacificNet
                Inc. (Nasdaq:PACT)

            

US
      Office: 860 Blue Gentian Road, Suite 360, Eagan, MN 55121, USA. Tel. +1 (651)
      209-3100 Fax. +1 (651) 209-3103

    HK
      Office: Unit 1702, ChinaChem Century Tower, 178 Gloucester Road, Wanchai, Hong
      Kong.  Tel:
      (852) 28762900 Fax: (852) 2793 0689 

     

    
      PACIFICNET
        INC. EXECUTIVE EMPLOYMENT CONTRACT

    

    

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

    and
      Mr.
Victor
      Tong.
      (“Executive”).

    

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

    

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

    

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

    

    Duties
      include but not limited to:

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

            

    

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

            

    

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

            

    

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

            

    

     

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

    

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

    

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

    

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

    

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

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

          

    

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

          

    

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

          

    

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

          

    

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

          

    

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

          

    

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

          

    

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

          

     

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

    

    5.
      Termination.

    

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

            

    

    

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

            

    

     

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

          

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

          

     

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

          

     

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

            

    

    

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

            

    

    

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

            

    

    

    6.
      General
      Provisions.

    

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

          

     

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

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

          

    

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

          

    

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

          

    

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

          

    

    7.
      Non-Disclosure Agreement. Executive
      acknowledges the interest of the Company in maintaining the confidentiality
      of
      information related to its business and shall not at any time during the
      Employment Term or thereafter, regardless of the reason for or circumstances
      of
      termination of employment, directly or indirectly, reveal or cause to be
      revealed to any person or entity the production processes, inventions, trade
      secrets, customers lists or other confidential business information obtained
      by
      him as a result of his employment or relationship with the Company, except
      when
      authorized in writing to do so by the Board of Directors of the Company;
      provided, however, that the parties acknowledge that it is not the intent of
      this section to include within its subject matter (i) information not
      proprietary to the Company, or (ii) information which is in the public
      domain.

     

    8.
      Notices.
      All
      notices and other communications under this CONTRACT will be sufficient if
      written and sent by registered or certified mail, return receipt requested,
      in
      the case of Executive, to his residence as shown on the Company’s records, and
      in the case of the Company, to its registered office.

    

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

    

    

    EXECUTIVE:

    

    /s/
      Victor
      Tong                                         

    Victor
      Tong     

    

    

    Approval
      by the CEO.

    

    

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

    

    

    Approval
      by the Compensation Committee.

    

    

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

    

     

    Approval
      by the Board of Directors of PacificNet Inc.

    

    

    Date
      of
      Approval:  _____________________________________

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