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EXHIBIT 4.2
EMPLOYMENT AGREEMENT
The parties to this agreement are LJ International Inc., a British Virgin
Islands Company (the "Company") and XXX Xx Chuan (the "Executive"). The Company
and the Executive hereby agree as follows:
1. EMPLOYMENT AND DUTIES
The Company shall employ the Executive and the Executive shall serve
the Company as President and Chief Executive Officer of the Company.
The Executive shall use his best efforts to promote the interests of
the Company, and shall perform his duties in relation to the Company
and/or its subsidiaries (collectively "the Group") faithfully and
diligently, consistent with sound business practices.
2. TERM OF EMPLOYMENT
The Executive shall be employed by the Company under this Agreement for
a period of three (3) years commencing as of the date of this
agreement.
3. REMUNERATION AND REIMBURSEMENT
(A) Subject to Clause 5, the Executive shall receive during the
continuance of the Appointment:
(1) A salary at the rate of HK$1,800,000 per annum such
salary to accrue on a day to day basis (including any
sum receivable by the Executive as directors' fee
from any company in the Group) and to be payable
monthly in twelve equal installments in arrears on
the last day of each calendar month provided that if
the Appointment is terminated prior to the end of a
calendar month, the Executive shall only be entitled
to a proportionate part of such salary in respect of
the period of service during the relevant month up to
the date of termination. Such salary shall be
adjusted on annual basis at a rate to be determined
by the Board as its absolute discretion having regard
to the operating results of the Group and the
performance of the Executive.
(2) An annual management bonus of a sum to be determined
by the Board at its absolute discretion having
regard to the operating results of the Group and the
performance of the Executive during the relevant
financial year or any proportionate part thereof in
which service of the Executive pursuant to this
Agreement is rendered. The management bonus shall be
payable in arrears in respect of each relevant
financial year within one month after the issue of
the consolidated audited accounts of the Group for
such financial
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year. The amount payable to the Executive shall be
decided by majority decision of the members of the
Board present in the meeting called for that purpose
provided that the Executive shall abstain from voting
and not be counted in the quorum in respect of the
resolution regarding the amount so payable to
himself.
(B) The Executive shall continue to receive his salary during any
period of absence on medical grounds up to a maximum of 12
weeks in any period of 12 months provided that the Executive
shall if required supply the Company with medical certificates
covering the period of absence.
(C) The Executive shall be reimbursed all reasonable out-of-pocket
expenses (including expenses of entertainment subsistence and
travelling) incurred by him on the Group's business which
expenses shall be evidenced in such manner as the Board may
require.
(D) The Executive will be entitled to the benefits of any medical
or provident fund scheme as maybe maintained by the Group
from to time.
(E) The Executive shall be entitled to 12 working days paid
vacation each year.
4. OTHER BENEFITS
The Executive shall be entitled, during the continuance of the
Executive's engagement hereunder, to the use of a motor car and the
Company shall pay all vehicle registration fees, taxes and insurance
premiums in respect of the car and shall pay or reimburse against
receipts all maintenance, repair and other running costs in respect of
the car and the cost of petrol.
5. TERMINATION OF THE APPOINTMENT
(A) Without prejudice to the accrued rights (if any) or remedies
of either party under or pursuant to this Agreement:
(1) the Executive shall be entitled to terminate the Appointment
by two months' notice in writing to the Company if any money
payable by the Company to the Executive under or pursuant to
this Agreement is not paid in full by the Company to the
Executive within a period of 30 days from any written demand
by the Executive for the payment thereof:
(2) the Company shall be entitled to terminate the Appointment
without any compensation to the Executive:
(a) by not less that three months' notice in writing
given at any time while the Executive shall have been
incapacitated or prevented by reason of ill health,
injury or accident from performing his duties
hereunder for a period of or periods aggregating 90
days in the proceeding 12 months provided that if at
any time during the currency of a notice given
pursuant to this sub-paragraph the Executive shall
provide a medical certificate satisfactory to
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the Board to the effect that he has fully recovered
his physical and/or mental health and that no
recurrence of illness or incapacity can reasonably be
anticipated the Company shall withdraw such notice;
or
(b) by summary notice in writing if the Executive shall
at any time:
i. commit any serious or persistent breach of
any of the provisions herein contained (and
to the extent that such breach is capable of
remedy shall fail to remedy such breach
within 60 days after within warning given by
the Board);
ii. be guilty of any given misconduct or willful
neglect in the discharge of his duties (and
to the extent that such breach is capable of
remedy shall fail to remedy such breach
within 60 days after written warning given
by the Board);
iii. become bankrupt or have a receiving order
made against him;
iv. become a lunatic or of unsound mind;
v. absent himself from the meetings of the
Board during a continuous period of three
months, without special leave of absence
from the Board, and his alternate director
(if any) shall not during such period have
attended in his stead;
vi. become prohibited by law from acting as a
director;
vii. be guilty of conduct tending to bring
himself or any company in the Group into
disrepute;
viii. be prohibited by law from fulfilling his
duties hereunder; or
ix. be convicted of any criminal offence (other
than an offence which in the reasonable
opinion of the Board does not effect his
position as a director of the Company).
(B) If the Company becomes entitled to terminate the Appointment
pursuant to subclause (A)(2)(b) it shall be entitled (but
without prejudice to its right subsequently to terminate the
Appointment on the same or any other ground) to suspend the
Executive without payment of salary in full or in part for so
long as it may think fit.
(C) If the Executive shall have refused or failed to agree to
accept without reasonable grounds an appointment offered to
him on terms no less favourable to him than the terms in
effects under this Agreement, either by a company which has
acquired or agreed to acquire the whole or substantially the
whole of the undertaking and assets of the Company or which
shall own or has agreed to acquire the whole or not less than
90% of the issued share capital of the Company, the Executive
shall have no claim against the Company by reason of
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the subsequent voluntary winding up of any company in the
Group or of the disclaimer or termination of this Agreement by
the Company within three months after such refusal or failure
to agree.
(D) On the termination of the Appointment howsoever arising the
Executive shall:
(1) at any time and from time to time thereafter at the
request of the Company resign from office as a
director of the Company and all offices held by him
in any company in the Group and shall transfer
without payment to the Company or as the Company may
direct any qualifying shares provided by it or any
shares held by the Executive as nominee for the
Company or any company in the Group provided by it
and the Executive hereby irrevocable appoints the
Company to be his attorney and in his name and on his
behalf to sign and do any documents or things
necessary or requisite to give effect thereto and a
certificate in writing signed by any director or by
the secretary of the Company that any instrument or
act falls within the authority hereby conferred shall
be conclusive evidence that such is the case and any
third party shall be entitled to rely on such
certificate without further enquiry provided however
that such resignation or resignations shall be given
and accepted on the footing that it is or they are
without prejudice to any claims which the Executive
may have against any such company or which any such
company may have against the Executive arising out of
this Agreement or of the termination of the
appointment; and
(2) forthwith deliver to the Company all books,
documents, papers, materials, credit cards (if any)
and other property of or relating to the business of
the Group which may then be in his possession or
under his power or control.
(E) Save as expressly provided herein, neither party may terminate
this Agreement.
6. CONFIDENTIALITY
The Company shall not, at any time during or after his employment under
this agreement, disclose to any third party, except in the performance
of his duties under this agreement, any confidential information
regarding the Company's customers, suppliers, trade secrets or
business. The Executive shall return all tangible evidence of such
confidential information to the Company prior to or at the termination
of his employment.
7. WAIVER
(A) Time is of the essence of this Agreement but no failure or
delay on the part of either party to exercise any power, right
or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by either party of any
power, right or remedy preclude any other or further exercise
thereof or the exercise of any other power, right or remedy by
that party.
(B) The remedies provided herein are cumulative and are not
exclusive of any remedies provided by law.
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8. FORMER SERVICE AGREEMENTS
This agreement contains a complete statement of all the arrangements
between the parties with respect to its subject matter, supersedes all
existing and former agreements between them with respect to that
subject matter, may not be changed or terminated orally and any
amendment or modification must be in writing and signed by the party to
be charged.
9. NOTICES
All notices, requests, demands, consents or other communications to or
upon the parties under or pursuant to this Agreement shall be in
writing addressed to the relevant party at such party's address set out
below (or at such other address as such party may hereafter specify to
the other party) and shall be deemed to have been duly given or made:
(A) in the case of a communication by letter 48 hours after
despatch or, if such letter is delivered by hand, on the day
of delivery;
(B) in the case of communication by telex or facsimile, when sent.
The Company's address:
Xxxx 00, 00/X., Xxxxx X, Xxxxx Xxxxxxxxxx Xxxxxx
00 Xxx Xxx Xxxxxx, Xxxxxxx
Xxxxxxx, XXXX XXXX
The Executive's address:
House Xx. X00, Xxxxx XX, Xxxxxx Xxxx, Xxx Xxxx
XXXX XXXX
10. ASSIGNABILITY
This Agreement shall be binding upon and ensure to the benefit of each
party hereto and its successors and assigns and personal
representatives (as the case may be), provided always that the
Executive may not assign his obligations and liabilities under this
Agreement without the prior written consent of the Company.
11. RELATIONSHIP
None of the provisions of this Agreement shall be deemed to constitute
a partnership or joint venture between the parties for any purpose.
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12. AMENDMENT
This Agreement may not be amended, supplemented or modified except by a
written agreement or instrument signed by or on behalf of the parties
hereto.
13. SEVERABILITY
Any provision of this Agreement prohibited by or unlawful or
unenforceable under any applicable law actually applied by any court of
competent jurisdiction shall, to the extent required by such law, be
severed from this Agreement and rendered ineffective so far as is
possible without modifying the remaining provisions of this Agreement.
Where, however, the provisions of any such applicable law may be
waived, they are hereby waived by the parties to the full extent
permitted by such law to the end that this Agreement shall be a valid
and binding agreement enforceable in accordance with its terms.
14. LAW AND JURISDICTION
This Agreement shall be governed and construed in all respects in
accordance with the laws of Hong Kong and the parties hereby submit to
the non-exclusive jurisdiction of the courts of Hong Kong.
IN WITNESS whereof this Agreement has been duly executed the 1st day of October,
2000.
Signed by
For and on behalf of
LJ INTERNATIONAL INC.
/s/ [ILLEGIBLE]
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Authorized Signature(s)
/s/ XXX XX CHUAN
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LJ International Inc. XXX Xx Chuan
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