EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of December 15, 1998, by and between
Radica Games Limited, a Bermuda company, having a registered address at
Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx XX00, Xxxxxxx, and Xxxxx X.X. Xxxxxx,
who resides at 46 Xxx Xxxx Tuk Road, Sai Kung, New Territories, Hong Kong.
WHEREAS, Radica is engaged through its subsidiaries in designing and
manufacturing electronic and mechanical gifts and games for worldwide sale, and
ODM manufacturing for others;
WHEREAS, Employee has substantial executive management experience including
financial and accounting experience;
WHEREAS, 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 all as negotiated and agreed by the
parties in Pasadena, California, USA on December 14, 1998.
NOW, THEREFORE, in consideration of the premises, the parties agree as follows:
DEFINITIONS. For the purposes of this Agreement, the parties hereby adopt the
following definitions:
(a) "Cause" means:
(i) breach by Employee of a fiduciary obligation to any member of Radica
Group;
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;
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;
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);
Employee's arrest or indictment for, or written confession of, a felony or any
crime involving moral turpitude under the laws of the United States or Bermuda
or any state or
of Hong Kong;
death of Employee;
declaration by a court that Employee is insane or incompetent to manage his
business affairs; or
the filing of any petition or other proceeding seeking to find Employee bankrupt
or insolvent.
(b) "Dollars" and "US$" means United States dollars.
(c) "Employee" means Xxxxx X.X. Xxxxxx.
(d) "1994 Plan" means the 1994 stock option plan adopted by Radica, as
amended from time to time.
(e) "Radica" means Radica Games Limited, a Bermuda company.
(f) "Radica Group" means 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.
(g) "Termination" means, according to the context, the termination of this
Agreement or the cessation of rendering employment services by
Employee.
(h) "Total Disability" means 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.
Employee has previously been employed by Radica as Executive Vice President,
Chief Financial Officer, Chief Accounting Officer and as one of the Directors of
Radica. In such capacities, Employee has had responsibility for financial and
accounting matters affecting the Radica Group. All prior employment agreements
and arrangements between Radica Group and Employee shall be superceded and
merged into this Agreement, but so that employment of Employee shall continue
without any break in service and with change in the Employee's title to
President Asia Operations, Chief Financial Officer for purposes of his
employment by Radica Group. Employee's principal employer within Radica Group
shall be Radica itself, but his duties shall extend to other members of Radica
Group. During his period of employment, employee also agrees to serve in other
executive capacities for Radica Group as may be determined by the Board of
Directors of Radica ("Board"). 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.
Employee will devote his full business time and attention to his duties under
this Agreement.
Employee shall perform his duties under this Agreement principally in Hong Kong
and China. It is contemplated Employee will frequently travel to carry out his
duties under this Agreement, including travel to the offices of Radica
subsidiaries in Nevada and California. Air travel and other travel arrangements
will comply with current Radica Group policies respecting class of travel, etc.
Radica Group will provide Employee, including his spouse and children, with
medical and dental benefits, as provided to other officers of Radica Group.
Radica Group will contribute to a provident fund for the benefit of Employee on
such terms and conditions to be agreed between Radica Group and Employee.
Radica Group will provide Employee with accommodation in Hong Kong of a standard
and size commensurate (in the opinion of Radica Group) with the position and
remuneration for the time being.
Radica Group will provide Employee with a motor car of a size and type
commensurate (in the opinion of Radica Group) with his position and remuneration
for the time being which he will be permitted to use for reasonable private
journeys. Radica Group will contract for and pay the cost of all repairs,
maintenance, fuel, lubricants and insurance thereof.
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.
3. TERM OF EMPLOYMENT.
This Agreement and Employee's employment hereunder shall commence as of December
15, 1998 and continue until the second anniversary of such date, and shall be
renewed annually at each December 15 anniversary date (commencing December 15,
1999) for an additional one year period so that the term hereof at each renewal
date shall be a two year period, unless a party to this Agreement gives notice
at least ninety (90) days prior to such renewal date that this Agreement shall
not be renewed, in which case this Agreement shall terminate at the end of the
ensuing year.
Notwithstanding Paragraph (a) above, this Agreement may be sooner terminated by
Radica for Cause, by Employee without consent of Radica, by Radica without
Cause, or by Radica in the event of the Total Disability of Employee.
On termination of this Agreement pursuant to Paragraph (a) above, or by Radica
for Cause, or by Employee without consent of Radica, all benefits and
compensation shall cease as of the date of such Termination. On termination of
this Agreement by Radica
without Cause or in event of Total Disability of Employee, all benefits and
compensation shall continue for twelve (12) months after such a Termination.
BUSINESS EXPENSE REIMBURSEMENT. Employee will be entitled to reimbursement by
Radica Group for the reasonable 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:
the amount, date, and place of each such expense;
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
the names, occupations, addresses, and other information sufficient to establish
the business relationship to Radica Group of any person who was entertained by
Employee.
COMPENSATION. Radica agrees to pay Employee, and Employee agrees to accept from
Radica, during the first year after December 15, 1998, for the services to be
rendered by him hereunder a minimum salary at the rate of US$162,000 per annum
and holiday warrant allowance of US$20,000 payable in arrears in thirteen (13)
installments, payable monthly, with two (2) payments at the end of January.
Employee shall receive annual salary reviews by the Board provided that such
salary and holiday warrant allowance shall not be reduced below US$182,000 per
year. Such compensation shall be paid to Employee's account in Jersey or such
other place as he may from time to time direct.
In respect of the payments under holiday warrant allowance, Employee is
requested to provide receipts and/or invoices to substantiate these payments.
In so far as the total receipts or invoices exceed the figures under holiday
warrant allowance, no additional payment will be made to Employee in respect of
the excess. In so far as the total of such receipts or invoices is less than the
said figures, Radica Group may declare a discretionary bonus in Employee's
favor. This bonus will be taxable as normal remuneration in Employee's hands.
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.
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.
All payments by Radica Group shall be subject to required withholdings including
taxes.
STOCK OPTIONS.
(a) (i) Nothing in this Agreement shall affect stock options previously granted
to Employee, which shall continue to be governed by the 1994 Plan and the terms
of the grant of such stock options.
(ii) Additionally, at or promptly after the end of each of Radica's 1999, 2000
and 2001 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 Section 6 and the 1994 Plan; provided, however,
that each such grant shall be subject to the conditions that (x) Employee
continues to be employed in good standing by Radica Group through the relevant
date of grant and (y) sufficient shares are available under the 1994 Plan to
cover Employee and other similarly situated executives (i.e. adequate shares
must be available for this special program in the option pool under the 1994
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 (ii) are herein called the "Stock Options".
(iii) 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.
(b) 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 capitalization,
including but not limited to the issuance by Radica of new securities (including
options or convertible securities), ESOP's 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.
(c) Any other provision hereof to the contrary notwithstanding, (i) as of the
date of Termination in the event of Termination pursuant to Section 3(a) 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:
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;
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;
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;
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
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.
(d) 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.
(e) 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.
NON-COMPETE; CONFIDENTIALITY.
(a) During the term of employment of Employee, and for a period of one year
after any Termination of such relationship or employment for any reason (either
by Employee or Radica), with or without cause, voluntarily or involuntarily (the
period of employment plus such additional year being called the "Prohibition
Period"), Employee agrees that he will not engage in, be employed by or become
affiliated with, in the United States of America or anywhere else in the world,
directly or indirectly, any person or entity which offers, develops, performs or
is engaged in services, products or systems which are competitive with the
business of Radica Group or any other products, services or systems hereafter
developed, produced or offered by Radica Group, to be determined at the relevant
time but not later than the commencement of such one-year period ("Companies'
Business"). During the Prohibition Period, Employee shall not, directly or
indirectly, become an owner or member, to the extent of an ownership interest of
five percent (5%) or more, of a joint venture, partnership, corporation or other
entity, or a consultant, employee, agent, officer or director of a corporation,
joint venture, partnership or other entity, which is competitive with, directly
or indirectly, the Companies' Business.
(b) 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 or related to the Companies' Business, 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 section: (a) information known to Employee or to the public at the date
of this Agreement; and (b) 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 Radica Group, Employee agrees not
to disclose, divulge, make public, utilize, communicate or use, whether for his
own benefit or for the benefit of others, either directly or indirectly, any
Confidential Information relating to the Companies's Business unless
specifically authorized in writing by Radica to do so.
(c) Employee shall promptly communicate and disclose to Radica Group all
information, inventions, improvements, 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.
(d) 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 Section 7 shall survive any Termination of this Agreement.
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.
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.
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEVADA WITHOUT REFERENCE TO THE CHOICE OF LAW
PRINCIPLES THEREOF.
ENTIRE AGREEMENT. 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.
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.
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.
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 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
Suite R, 6/F
2-12 Au Xxx Xxx Street
Fo Tan
Hong Kong
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 0000 0000
Telefax: (000) 0000 0000
To: Employee:
Xx. Xxxxx X.X. Xxxxxx
Xxx Xxxx Tuk Road
Sai Kung, New Territories, Hong Kong
Telephone: 000-0000-0000
Telefax: 000-0000-0000
NUMBER; 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.
RADICA GAMES LIMITED
By:
XXXXX X.X. XXXXXX
