Exhibit 4.20(a)
AMENDMENT NO. 2
TO EMPLOYMENT AGREEMENT
AGREEMENT, dated as of February 18, 2005, by and between Radica Games Limited, a
Bermuda company ("Radica"), and Xxxxx X.X. Xxxxxx ("Employee").
WHEREAS, Radica and Employee entered into an amended and restated employment
agreement, dated as of September 29, 2000 (the "Employment Agreement"), with
respect to the employment by Radica and of Employee;
WHEREAS, Radica and Employee entered into Amendment No. 1, dated as of March 31,
2003 ("Amendment No. 1"), to the above-mentioned Employment Agreement; and
WHEREAS, the parties desire to further amend the Employment Agreement
(hereinafter, references to the Employment Agreement shall include the changes
made to such Agreement by Amendment No. 1) with respect to Employee's continued
employment after the date of this Amendment No. 2.
NOW, THEREFORE, it is hereby agreed as follows:
1. Section 1(a) of the Employment Agreement is hereby amended in its
entirety to read as follows:
(a) "Cause" means:
(i) material breach by Employee of a fiduciary obligation to any
member of Radica Group;
(ii) intentional 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 material
adverse consequences to any member of Radica Group;
(iii) material 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 after notification
of same, 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 arrest or indictment for, or written confession
of, a felony or any crime involving moral turpitude under the laws of
the United States or any state or of Bermuda or Hong Kong;
(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.
2. Section 1(d) of the Employment Agreement is hereby amended in its
entirety to read as follows:
(f) "1994 Plan" means the 1994 stock option plan
adopted by Radica, as amended from time to time, and
"Omnibus Plan" means the 2004 omnibus equity incentive
plan adopted by Radica, as amended from time to time.
Any reference in this Employment Agreement to either
the 1994 Plan or the Omnibus Plan shall include both of
such plans and shall give effect to the plan or plans
that are applicable to the stock options or other
incentives granted by Radica to Employee.
3. Section 3(c) of the Employment Agreement is hereby amended in its
entirety to read as follows:
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 by Employee for Good Reason in the
event of a Termination/Change in Control or in the
event of Total Disability of Employee, (i) Radica will
continue to pay Employee his annual salary for twelve
months from the date of Termination, (ii) Radica Group
will continue to provide medical and dental benefits to
Employee for twelve months from the date of Termination
on the same basis and at the same Employee cost as at
the date of Termination, (iii) Employee's stock
options, restricted stock, and restricted stock units
will be treated as set forth in Section 6 hereof, and
(iv) Radica will continue to provide Employee's Hong
Kong housing, car and pensions benefit as described in
Employee's Employment Agreement for a period of twelve
months from the date of Termination or until Employee
changes his primary residence from Hong Kong, whichever
comes first.
2
4. The lead-in paragraph to Section 6(c) of the Employment Agreement is
hereby amended in its entirety to read as follows (but the subparagraphs in
capital letters that immediately follow that lead-in paragraph shall not be
amended hereby):
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 by Employee for Good Reason in the
event of a Termination/Change in Control (unless
Section 6(f) of this Agreement applies, in which case
this Section 6(c) shall not apply to Employee's Stock
Options, restricted stock and restricted stock units)
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:
5. Sections 6(d), (e) and (f) of the Employment Agreement are
hereby amended in their entirety to read as follows:
(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. Restricted Stock, and restricted stock
units, if not forfeited, shall be deliverable to
Employee upon its applicable vesting date, free of the
previously existing restrictions, but subject to
applicable state and federal securities laws.
(e) Employee shall have no right to sell, alienate,
mortgage, pledge, gift or otherwise transfer the Stock
Options, the Restricted Stock or any restricted stock
units or any rights thereto, except by will or by the
laws of descent and distribution, and except pursuant
to applicable state and federal securities laws and
except as specifically contemplated herein.
(f) Upon the occurrence of a Change in Control under
the Omnibus Plan, all of Employee's then outstanding
stock options, restricted stock, and restricted stock
units in Radica shall vest and become immediately
exercisable. If Employee is terminated by Radica
without Cause after a definitive agreement for a
transaction that would constitute a Change in Control
as described in the Omnibus Plan has been approved by
the shareholders of Radica, but before such transaction
is consummated, Employee's stock
3
options, restricted stock, and restricted stock units
in Radica shall vest on the date of such termination
without Cause. Income realized by Employee as a result
of the acceleration of vesting of equity compensation
or otherwise resulting from a Termination/Change in
Control is specifically paid in consideration of
post-employment restrictions of Section 7 hereunder.
6. Section 13 of the Employment Agreement is hereby amended in its
entirety to read as follows:
13. 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. Each party agrees to make any
modifications to this Agreement, including changing the
timing of payments hereunder, as may be reasonably
necessary to comply with Section 409A of the Internal
Revenue Code.
7. Section 16 of the Employment Agreement is hereby amended in its
entirety to read as follows:
REIMBURSEMENT OF EXPENSES. After a Change in Control or
a Termination for Cause later determined to be a
Termination Without Cause, if any dispute shall arise
under this Agreement involving termination of
Employee's employment with Radica or involving the
failure or refusal of Radica to perform fully in
accordance with the terms hereof, Radica shall
reimburse Employee, on a current basis, for all
reasonable legal fees and expenses, if any, incurred by
Employee in connection with such contest or dispute
(regardless of the result thereof), regardless of
whether Employee's claim is upheld by a court of
competent jurisdiction; provided, however, Employee
shall be required to repay any such amounts to Radica
to the extent that a court issues a final and
non-appealable order setting forth the determination
that the position taken by Employee was frivolous or
advanced by Employee in bad faith.
4
IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 as of the
date and year first above written.
RADICA GAMES LIMITED
By /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
/s/ Xxxxx X.X. Xxxxxx
-------------------------------------
XXXXX X.X. XXXXXX
5
