DATE 24 JUNE 1999
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RADICA GAMES LIMITED
XXXX XXXXXXX
CONFORMED COPY
EMPLOYMENT AGREEMENT
CONTENTS
CLAUSE PAGE
1 Definitions 1
2 Employment 3
3 Term of Employment 4
4 Business Expense Reimbursement 5
5 Compensation 5
6 Stock Options 6
7 Confidentiality and Restrictions following Termination 8
8 Termination 11
9 Benefit and Binding Effect 12
10 Counterparts 13
11 Governing law 13
12 Entire Agreement 13
13 Validity of Provisions 13
14 Modifications or Discharge 14
15 Notices 14
16 Number and Gender 14
EMPLOYMENT AGREEMENT
DATE 24 June 1999
PARTIES
1 RADICA GAMES LIMITED, a Bermuda company, having a registered address at
Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx XX00, Xxxxxxx
2 XXXX XXXXXXX who resides at 00 Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx XX0
0XX
RECITALS
A Radica is engaged through its subsidiaries in designing and
manufacturing electronic and mechanical gifts and games for worldwide
sale, and ODM manufacturing for others.
B Employee is currently Sales Director of Leda Media Products ("LMP") and
has substantial executive management experience.
C Radica desires to secure the services of Employee, and Employee is
willing to provide such services, each upon the terms and subject to
the conditions set forth in this Agreement.
AGREEMENT
1 DEFINITIONS
For the purposes of this Agreement, the parties hereby adopt the
following definitions:
CAUSE:
(i) breach by Employee of a fiduciary obligation to any member of
Radica Group;
(ii) commission by Employee of any act or omission to perform any
act (excluding the omission to perform any act attributable to
Employee's Total Disability) which results in serious adverse
consequences to any member of Radica Group;
(iii) breach of any of Employee's agreements set forth in this
Agreement including, but not limited to, continual failure to
perform substantially his duties with Radica Group, excessive
absenteeism and dishonesty;
(iv) any attempt by Employee to assign or delegate this Agreement
or any of the rights, duties, responsibilities, privileges or
obligations hereunder without the prior written consent of
Radica (except in respect of any delegation by Employee of his
employment duties hereunder to other employees of Radica Group
in accordance with its usual business practice);
(v) Employee's being charged or indictment for, or written
confession of, a felony or any crime involving moral turpitude
under the laws of the United Kingdom or Bermuda or the United
States or any state of Hong Kong other than an offence under
the Road Traffic Acts for which non-custodial penalty is
imposed;
(vi) death of Employee;
(vii) declaration by a court that Employee is insane or incompetent
to manage his business affairs; or
(viii) the filing of any petition or other proceeding seeking to find
Employee bankrupt or insolvent;
EMPLOYEE: Xxxx Xxxxxxx;
1994 PLAN: the 1994 stock option plan adopted by Radica, as amended
from time to time;
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RADICA: Radica Games Limited, a Bermuda company;
RADICA GROUP: Radica and any other corporation or other entity which at
the relevant time is more than fifty percent (50%) owned, directly or
indirectly, by Radica;
RESTRICTED TERRITORIES: the United Kingdom, the Channel Islands, the
Isle of Man, the Republic of Ireland. France, Germany, China, Austria,
Belgium, Czech Republic, Greece, Holland, Italy, Portugal, Scandinavia,
Spain, Switzerland and any other country in which Radica or Radica
Group is resident or otherwise carries on business at the Termination
Date;
TERMINATION: according to the context, the termination of this
Agreement or the cessation of rendering employment services by
Employee;
TOTAL DISABILITY: Employee shall become disabled to an extent which
renders him unable to perform the essential functions of his job, with
or without reasonable accommodation, for a cumulative period of twelve
(12) weeks in any twelve (12) month period.
2 EMPLOYMENT
2.1 Commencing 1 July 1999, Radica hereby employs Employee and Employee
hereby accepts employment by Radica to serve as Managing Director LMP.
In such capacity, Employee has responsibility for sales and
distribution of Radica's products in Europe. Employee shall perform
services of an executive nature consistent with his offices with Radica
Group as may from time to time be assigned or delegated to him by the
Board of Directors of Radica ("Board").
2.2 Employee will, unless prevented by sickness, injury or other incapacity
or otherwise agreed by the Board, devote his full business time and
attention to his duties under this Agreement.
2.3 Employee shall perform his duties under this Agreement principally in
the United Kingdom and Europe. It is contemplated that Employee will
frequently travel to
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carry out his duties under this Agreement, including travel to the
offices of Radica subsidiaries in Dallas, Texas, Hong Kong and
California. Air travel and other travel arrangements will comply with
current Radica Group policies respecting class of travel, etc.
2.4 Radica Group will provide Employee, including his spouse and children
with medical and dental benefits, as provided to other officers of
similar seniority of Radica Group.
2.5 Radica Group will provide Employee with an automobile consistent with
the current practices of LMP. Radica Group will replace the automobile
with another motor vehicle suitable for the Employee's role and status
of such value and at such intervals as the Board of Radica Group may in
its reasonable discretion decide in accordance with the current custom
and practice within LMP.
2.6 Employee shall have five (5) weeks paid vacation during each year of
this Agreement taken at such times as mutually convenient to Employee
and Radica Group. This vacation is in addition to paid holidays that
are allowed under Radica policy.
3 TERM OF EMPLOYMENT
3.1 This Agreement and Employee's employment hereunder shall commence as of
1 July 1999 and continue for a minimum of two (2) years from this date.
Thereafter the Agreement may be terminated by either party upon six (6)
months' notice to the other party.
3.2 Notwithstanding Clause 3.1 above, this Agreement may be sooner
terminated by Radica for Cause.
3.3 On termination of this Agreement pursuant to Clause 3.1 above, or by
Radica for Cause, all benefits and compensation shall cease as of the
date of such Termination.
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4 BUSINESS EXPENSE REIMBURSEMENT
Employee will be entitled to reimbursement by Radica Group for the
proper business expenses paid by him on behalf of Radica Group in the
course of his employment hereunder on presentation to Radica Group of
appropriate vouchers (accompanied by receipts or paid bills) setting
forth information sufficient to establish:
4.1 the amount, date, and place of each such expense;
4.2 the business reason for each such expense and the nature of the
business benefit derived or expected to be derived as a result thereof;
and
4.3 the names, occupations, addresses, and other information sufficient to
establish the business relationship to Radica Group of any person who
was entertained by Employee.
5 COMPENSATION
5.1 Radica agrees to pay Employee, and Employee agrees to accept from
Radica, during the first year after 1 July 1999, for the services to be
rendered by him hereunder a minimum salary at the rate of
(pound)106,000 per year payable monthly in arrears. Employee shall
receive annual salary reviews by the Board to take effect from 1 July
in each year commencing 2000, provided that such salary shall not be
reduced below (pound)106,000 per year.
5.2 Employee shall be considered for annual bonuses pursuant to the Radica
Games Bonus Policy for officers of Radica Group. Such Radica Games
Bonus Policy describes potential amounts of bonus which may be earned
in respect of each fiscal year, but with no mandatory amount for any
particular employee. However, in the case of Employee in both fiscal
years 1999 and 2000, Employee shall be entitled to a guaranteed minimum
bonus of(pound)50,000 in each year under such plan under the conditions
that Employee has not terminated his employment before the plan payment
dates, been terminated for cause by Radica prior to such
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date, and that LMP shall have been profitable in its normal trading
activities in such Radica fiscal year as the bonus payment pertains.
5.3 If Radica Group institutes a retirement, bonus or other benefit plan
which applies generally to executive officers of Radica Group of
similar status as Employee, Employee shall be entitled to participate
therein, but not to the extent such benefits would be duplicative of
the benefits herein.
5.4 All payments by Radica Group shall be subject to required withholdings
including taxes.
6 STOCK OPTIONS
6.1 As of the date of this agreement, Radica hereby grants to Employee an
option to purchase 50,000 shares of the common stock of Radica at the
current market price as of the date of this Agreement subject to the
terms and conditions of this Clause 6 and the 1999 Plan (the "Initial
Stock Option").
6.2 Additionally, at or promptly after the end of each of Radica's 2000,
2001 and 2002 fiscal years (i.e., fiscal years ending December 31),
Radica shall grant to Employee an option (up to three such options in
total) to purchase twenty-five thousand (25,000) shares (up to 75,000
shares in the aggregate) of the common stock of Radica at the then
applicable market price, subject to the terms and conditions of this
Clause 6 and the 1999 Plan, provided, however, that each such grant
shall be subject to the conditions that (i) Employee continues to be
employed in good standing by Radica Group through the relevant date of
grant and (ii) sufficient shares are available under the 1999 Plan to
cover Employee and other similarly situated executives (i.e., adequate
shares must be available for this special programme in the option pool
under the 1999 Plan). If such quantity of shares is not available, the
grant dates will roll forward by one year per year until such shares
are available. Such stock options under this Clause 6.2 and the Initial
Stock Option are herein called the "Stock Options".
6.3 The Stock Options shall vest and become exercisable 20% per year for
each year Employee is employed by Radica Group following the date of
grant, commencing at the first anniversary of the date of grant.
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6.4 The number of shares subject to the Stock Options will be adjusted for
stock splits and reverse splits Provided that such number of shares
shall not be adjusted if Radica should otherwise change or modify its
capitalisation, including but not limited to the issuance by Radica of
new securities (including options or convertible securities), ESOPs or
other employee stock plans. It is the intent of the parties that the
stock subject to the Stock Options shall be subject to dilution, except
for stock splits and reverse splits.
6.5 Any other provision hereof to the contrary notwithstanding (i) as of
the date of Termination in the event of Termination pursuant to Clause
3.1 or Termination by Radica for Cause or by Employee without consent
of Radica, or (ii) twelve (12) months after the date of Termination in
the event of Termination by Radica without Cause or the Total
Disability of Employee (each of such applicable dates being called a
"Determination Date") Employee shall forfeit the Stock Options
(measured by percentages of the stock subject to the Stock Options) and
they shall expire as follows:
6.5.1 if the Determination Date is within the first year after the date the
Stock Option is granted (the "Grant Date") then Employee shall forfeit
100% of the stock subject to the Stock Option;
6.5.2 if the Determination Date is after the end of said first year and
within the second year after the Grant Date, then Employee shall
forfeit 80% of the stock subject to the Stock Option;
6.5.3 if the Determination Date is after the end of said second year and
within the third year after the Grant Date, then Employee shall forfeit
60% of the stock subject to the Stock Option;
6.5.4 if the Determination Date is after the end of said third year and
within the fourth year after the Grant Date, then Employee shall
forfeit 40% of the stock subject to the Stock Option; or
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6.5.5 if the Determination Date is after the end of said fourth year and
within the fifth year after the Grant Date, then Employee shall forfeit
20% of the stock subject to the Stock Option.
6.6 In any event each Stock Option shall expire to the extent not
previously exercised on the tenth anniversary of the Grant Date.
Otherwise, Employee may at any time within ninety (90) days following
the Determination Date, exercise his right to purchase stock subject to
the Stock Options, but subject to the foregoing provisions respecting
vesting and forfeitures.
6.7 Employee shall have no right to sell, alienate, mortgage, pledge, gift
or otherwise transfer the Stock Options or any rights thereto, except
by will or by the laws of descent and distribution, and except as
specifically contemplated in the 1994 Plan. In any event, any transfer
must comply with applicable state and federal securities laws.
6.8 Upon Termination, Employee shall have no claim against Radica for loss
arising out of ineligibility to exercise any Stock Options granted to
him or otherwise in relation to the 1999 Plan or any other stock option
plan adopted by Radica and the rights of Employee shall be determined
solely by the rules of such plan(s) (as the case may be) in force at
Termination.
7 CONFIDENTIALITY AND RESTRICTIONS FOLLOWING TERMINATION
7.1 Employee understands and agrees that he has been exposed to (or had
access to), and may be further exposed to (or have access to),
confidential information, knowhow, knowledge, data, techniques,
computer software and hardware, and trade secrets of Radica Group,
including, without limitation, customer or supplier requirements,
notes, drawings, writings, designs, plans, specifications, records,
charts, methods, procedures, systems, price lists, financial data,
records, and customer or supplier lists (collectively "Confidential
Information"). Notwithstanding the above, the following shall not be
considered "Confidential Information" within the meaning of this
sub-Clause: (i) information known to Employee or to the public at the
date of this Agreement; and (ii) information which hereafter becomes
known to the public through no fault of Employee. Accordingly, except
as permitted or required in the performance of his duties for
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Radica Group, Employee agrees not to disclose, divulge, make public,
utilise, communicate or use, whether for his own benefit or for the
benefit of others, either directly or indirectly, any Confidential
Information relating to Radica Group's business unless specifically
authorised in writing by Radica to do so.
7.2 Employee acknowledges that during the course of his employment he will
be privy to Confidential Information and that he will make, maintain
and develop personal knowledge of, influence over and valuable contacts
with customers, suppliers, staff and third parties. Employee therefore
covenants with Radica that:
7.2.1 he will not in the Restricted Territories for the period of one year
following Termination directly or indirectly in competition with Radica
or Radica Group engage in business with or be in any way interested in
or connected with any concern, undertaking, firm or body corporate
which engages in or carries on within any part of the Restricted
Territories any business which competes with any business carried on by
Radica or Radica Group as at Termination in which Employee was involved
on behalf of Radica or Radica Group at any time within the twelve
months immediately preceding Termination and in particular (but without
limitation) the business of the manufacture and distribution of
peripherals and accessories to the video games and PC games market;
7.2.2 he will not in the Restricted Territories for the period of one year
following Termination directly or indirectly:-
7.2.2.1 interfere with or, in competition with Radica or Radica Group
in relation to any business which competes with any business
carried on by Radica or Radica Group at Termination in which
Employee was involved on behalf of Radica or Radica Group at
any time within the twelve months immediately preceding
Termination, offer or agree to provide goods or services of
any description to, or solicit or endeavour to entice away
from Radica or Radica Group the custom of any person, firm or
body corporate which, at any time during the period of twelve
months immediately preceding Termination, has been a customer
or client of, or in the habit of dealing with, Radica or
Radica Group or which, at any time during that period, was to
his knowledge
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negotiating with Radica or Radica Group in relation to the
provision of goods or services by Radica or Radica Group;
7.2.2.2 interfere or seek to interfere with contractual or other trade
relations between Radica or Radica Group and any of its or
their respective suppliers in existence or under negotiation
at any time during the period of twelve months immediately
preceding Termination;
7.2.2.3 solicit the services of or endeavour to entice away from
Radica or Radica Group any director, senior or managerial
employee or consultant of Radica or Radica Group known
personally to the Executive (whether or not such person would
commit any breach of his contract of employment or engagement
by reason of leaving the service of such company) or knowingly
employ, assist in or procure the employment by any other
person, firm or body corporate of any such person.
7.3 The Executive agrees that the restrictions contained in Clause 7.2
shall apply in relation to all customers and suppliers with whom he
personally has had dealings on behalf of Radica notwithstanding that
such customers and suppliers may have been introduced to Radica or
Radica Group by Employee before or during his employment with Radica.
He further agrees that if any of the restrictions in Clause 7.2 is held
to be void or ineffective for any reason, but would be held to be valid
and effective if part of its wording were deleted, that restriction
shall apply with such deletions as may be necessary to make it valid
and effective.
7.4 The restrictions contained in each sub-clause of Clause 7.2 shall be
construed as separate and individual restrictions and shall each be
capable of being severed without prejudice to the other restrictions or
to the remaining provisions.
7.5 Employee waives irrevocably all Moral Rights (as defined in Chapter IV
of Part I of the Copyright, Designs and Patents Act 1988) in any works
produced during his employment in which copyright is vested in Radica
or Radica Group whether by virtue of this Clause 7.5 or otherwise.
Employee shall promptly communicate and disclose to Radica Group all
information, inventions, improvements,
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discoveries, knowhow, methods, techniques, processes, observations and
data ("Proprietary Information") obtained, developed, invented or
otherwise discovered by him in the course of this employment. All
written materials, records, computer programs or data and documents
made by Employee or coming into his possession during the employment
period concerning any Proprietary Information used or developed by
Radica Group, or by Employee, shall be the sole exclusive property of
Radica Group. Employee shall have no right, title or interest therein
notwithstanding that he may have purchased the medium on which such
Proprietary Information is recorded.
7.6 Upon Termination, Employee shall not take with him any of the
Confidential Information or Proprietary Information. Upon Termination,
or at any time upon the request of Radica, Employee shall promptly
deliver all Confidential Information and Proprietary information, and
all copies thereof, to Radica Group with no cost or charge to Radica
Group. Upon request by Radica, Employee shall promptly execute and
deliver any documents necessary or convenient to evidence ownership of
the Confidential Information and Proprietary Information by Radica
Group, or the transfer and assignment of the Confidential Information
and Proprietary Information to Radica Group without cost or charge. The
provisions of this Clause 7 shall survive any Termination of this
Agreement.
8 TERMINATION
8.1 Upon Termination Employee shall immediately resign without claim for
compensation for loss of office (but without prejudice to any claim he
may have against Radica arising out of any breach of this Agreement by
Radica) from such offices held by him in Radica and any company in the
Radica Group and from any other offices he may hold as nominee or
representative of Radica and any company in the Radica Group and Radica
is irrevocably authorised by Employee 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 to such resignations.
8.2 If either party gives notice to terminate this Agreement, Employee
agrees:
8.2.1 that for a period not exceeding three months the Board may in its
absolute discretion require Employee not to perform any of his duties
and may require
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him not to have any contact with clients or customers of Radica or
Radica Group nor any contact (other than purely social contact) with
such employees of Radica or Radica Group as the Board shall determine
and/or may exclude him from any premises Radica or Radica Group
(without providing any reason for doing so); and
8.2.2 that such action on the part of Radica shall not constitute a breach of
this Agreement nor shall Employee have any claim against Radica in
respect of any such action;
Provided always that throughout such period Employee's salary and other
benefits shall not cease to be paid or provided (unless and until his
employment is terminated).
9 BENEFIT AND BINDING EFFECT
This Agreement shall inure to the benefit of and be binding upon Radica
and its successors and assigns, including but not limited to any
corporation, person or other entity which may acquire all or
substantially all of the assets and business of Radica or any
corporation with or into which it may be consolidated or merged. Radica
may assign its rights and obligations to another present or future
member of Radica Group. The rights and obligations of Employee
hereunder may not be delegated or assigned, except that Employee may,
without the prior consent of any member of Radica Group, assign to his
spouse, or to a family member, proceeds of payments resulting from his
death or a disability which, in either case, occurs after a termination
of this Agreement.
10 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
instrument.
11 GOVERNING LAW
This agreement shall be governed by and construed in accordance with
the law of
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England and Wales. The parties submit to the non-exclusive jurisdiction
of the English Courts as regards to any claim, dispute or matter out of
or relating to this Agreement.
12 ENTIRE AGREEMENT
12.1 This Agreement sets forth and is an integration of all of the
promises, agreements, conditions and understandings among the parties
hereto with respect to all matters contained or referred to herein, and
all prior promises, agreements, conditions, understandings, warranties
or representations, oral, written, express or implied, are hereby
superseded and merged herein.
12.2 This Agreement replaces all previous contracts of service or other
employment arrangements between Employee and Leda Media Products
Limited, which shall have no further effect as from the date of this
Agreement.
13 VALIDITY OF PROVISIONS
Should any provision(s) of this Agreement be void or unenforceable in
whole or in part, the remainder of this Agreement shall not in any way
be affected thereby, and such provision(s) shall be modified or amended
so as to provide for the accomplishment of the provision(s) and
intentions of this Agreement to the maximum extent possible.
14 MODIFICATIONS OR DISCHARGE
This Agreement shall not be deemed waived, changed, modified,
discharged or terminated in whole or in part, except as expressly
provided for herein or by written instrument signed by all parties
hereto.
15 NOTICES
Any notice which either party may wish to give to the other parties
hereunder shall be deemed to have been given when actually received by
the party to whom it is addressed. Notices by Employee to either Radica
or Radica USA shall be
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sent to both of them. Notices hereunder may be sent by courier, mail,
telefax, telegram or telex, to the following addresses, or to such
other addresses as the parties may from time to time furnish to each
other by like notice:
To. Radica Games Limited
000 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx
Xxxxxxxxxx 00000
XXX
Attention: Xxxxxxx X Xxxxx
Telephone: (000) 000 0000
Telefax: (000) 000 0000
To: Employee:
Xx. Xxxx Xxxxxxx
c/o Leda Media Products
Xxxxxxxxxxx Xxxxx
00 Xxxxxxx Xxxxxx
Xxxxxxxx
Xxxxx XX00 0XX
Telephone: (00) 00000 000000
Telefax: (00) 00000 000000
16 NUMBER AND GENDER
In this Agreement, the masculine shall include the feminine and neuter
and vice versa, and the singular shall include the plural and vice
versa, as the context may reasonably require or permit.
IN WITNESS whereof, the parties have executed this Agreement as of the day and
year first above written.
SIGNED by ) Signed on behalf of Radica Games Limited
for and on behalf of RADICA GAMES ) by Xxxxxxx X Xxxxx
LIMITED )
SIGNED by XXXX XXXXXXX ) Signed by Xxxx Xxxxxxx
[1208587.01]
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