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EXHIBIT 10.1
MIDWAY GAMES INC.
0000 X. XXXXXXXXXX XXXXXX
XXXXXXX, XX 00000
October 30, 2000
Xx. Xxxx X. Xxxxxxxx
000 X. Xxxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
Reference is made to your Employment Agreement dated July 1, 1996 (the
"Employment Agreement") between Midway Games Inc. ("Midway") and you, as amended
March 5, 1998, November 5, 1999 and May 4, 2000.
This letter reflects our agreement to further amend the Employment
Agreement as follows:
1. Paragraphs 6(a) and 6(b) of the Employment Agreement are amended in
their entireties to read as follows:
"(a) In the event Xxxxxxxx shall die during the term of this
Agreement but prior to his "Retirement Date" (as hereinafter defined),
Midway shall, in addition to the benefits which may become payable
pursuant to subparagraph 3(c), deliver all of the "Retirement Shares"
(as hereinafter defined) to such person or persons as Xxxxxxxx shall,
at his option, from time to time designate by written instrument
delivered to Midway, each subsequent designation to be deemed to revoke
all prior designations, or if no such designation is made to his
estate.
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(b) "Retirement Date" shall mean the later to occur of (i) the
date on which Xxxxxxxx shall become forty-five (45) years old or (ii)
the date of the termination of Xxxxxxxx'x employment by Midway.
Midway will deliver to Xxxxxxxx, on the first day of the first month
following his Retirement Date and on the first day of each month
thereafter, for a period of ten (10) years 5,065 shares of Midway
common stock, and an additional twenty three (23) shares on the first
day of each of the sixtieth (60th) month and the one hundred twentieth
(120th) month (for a total of 607,846 shares (the "Retirement
Shares")). The number of Retirement Shares may be adjusted pursuant to
the provisions set forth below. In the event that Xxxxxxxx shall die
after his Retirement Date but before the Retirement Shares have been
fully delivered to him, the balance of the Retirement Shares shall be
immediately delivered to his estate."
2. A new paragraph 6(d) shall be added to the Employment Agreement
which shall read as follows:
"(d) Midway covenants and agrees as follows:
(i) Midway will cause to be reserved and kept available out
of authorized and issued shares of Midway common stock held in its
treasury, and to the extent Midway treasury shares are insufficient,
out of authorized and unissued shares of Midway common stock, the
number of shares of Midway common stock that will be sufficient to
permit all of the Retirement Shares to be delivered in accordance with
the terms of this Agreement.
(ii) So long as the shares of Midway common stock deliverable
pursuant to this Agreement are listed on any national securities
exchange or automated quotation system, Midway will use its best
efforts to cause all shares
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reserved for such issuance to be listed on such exchange or quotation
system upon official notice of issuance.
(iii) Midway will, in sufficient time prior to the delivery
of the Retirement Shares, use its best efforts to (A) file a
registration statement under the Securities Act of 1933, as amended
(the "Act"), with respect to the Retirement Shares, (B) cause such
registration statement to become effective and (C) cause such
registration statement to remain effective (together with a resale
prospectus at all times meeting the requirements of the Act) until all
of the Retirement Shares have been sold by Xxxxxxxx, unless such
registration statement is no longer required for Xxxxxxxx to publicly
offer and sell such shares.
(iv) Midway will take such action as may be necessary to
ensure that all Retirement Shares shall, at the time of delivery of the
certificates for such shares, be duly and validly authorized and issued
and fully paid and nonassessable.
(v) Midway will pay when due and payable any and all federal
and state transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Retirement Shares to Xxxxxxxx.
(vi) Until delivered to Xxxxxxxx in accordance with this
Agreement, the Retirement Shares shall not be deemed outstanding for
any purpose, including, without limitation, the right to vote.
(vii) The number and kind of Retirement Shares are subject to
adjustment from time to time as herein provided.
(A) In the event Midway shall at any time after October
1, 2000 (v) declare a dividend on Midway common stock payable in shares
of Midway common stock, (w) effect a spin-off or split-up such that
holders of Midway common stock become entitled to receive securities of
another entity in respect of or in exchange for shares of Midway common
stock (x) subdivide the outstanding Midway common stock into a greater
number of shares, (y) combine the outstanding Midway common stock into
a smaller number of share, or (z) issue any shares of its capital stock
in a reclassification of the Midway common stock (including any such
reclassification in
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connection with a consolidation or merger in which Midway is the
continuing or surviving corporation), the number and kind of shares of
Midway common stock or other securities, as the case may be, issuable
with respect to the Retirement Shares, shall be proportionately
adjusted so that Xxxxxxxx shall be entitled to receive the aggregate
number and kind of shares of Midway common stock or securities, as the
case may be, that he would have been entitled to receive by virtue of
such dividend, spin-off, split-up, subdivision, combination or
reclassification had he owned the Retirement Shares on the record date
for such dividend, spin-off, split-up, subdivision, combination or
reclassification; provided, however, that in the case of any spin-off
or split-up if, in the opinion of Midway's chief financial officer,
the foregoing adjustment provisions will jeopardize the tax free nature
of such spin-off or split-up, then Midway's chief financial officer
may make such other adjustments as he deems to be appropriate in order
to preserve the tax free nature of the spin-off or split-up and to
fairly protect Xxxxxxxx against a diminution in value of the Retirement
Shares by reason of such spin-off or split-up.
(B) In the event that, directly or indirectly, (x)
Midway shall consolidate with, or merge with any other person and, in
connection with such consolidation or merger, all or part of the
outstanding shares of Midway common stock shall be changed into or
exchanged for stock or other securities of any other person and/or cash
or any other property, or (y) Midway shall sell or otherwise transfer
(or one or more of Midway's subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of Midway and its subsidiaries (taken as a whole) to any
person or persons then, and in each such case, proper provisions shall
be made so that Xxxxxxxx shall thereafter have the right to receive
under this Agreement, at the times he would otherwise be entitled to
receive the Retirement Shares, in lieu thereof, such securities,
assets, cash and/or other consideration, as the case may be, as he
would have been entitled to receive had he
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owned the Retirement Shares on the record date for the determination of
shareholders entitled to such securities, assets, cash and/or other
consideration.
(C) If, as a result of an adjustment made pursuant to
this Agreement, Xxxxxxxx shall become entitled to receive any shares of
capital stock or other consideration other than Midway common stock,
thereafter the number of such other shares or other consideration so
receivable hereunder shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the
provisions of this subparagraph 6(d)(vii) with respect to the Midway
common stock.
(D) All adjustments hereunder shall be made in good
faith by the Chief Financial Officer of Midway, whose determination,
absent manifest error, shall be final.
(viii) Midway may establish appropriate procedures to provide
for payment or withholding of such income or other taxes as may be
required by law to be paid or withheld in connection with the issuance
of Retirement Shares."
3. Paragraph 9(b) of the Employment Agreement shall be amended to
delete subparagraph 9(b)(i)(III), and in lieu thereof to add the following at
the end of subparagraph 9(b)(i):
"In addition to all other payments and rights set forth above, all
Retirement Shares not delivered to Xxxxxxxx prior to the date of the
lump sum payments referred to above shall be immediately delivered to
him at the time of delivery of such lump sum payments."
In all other respects, the Employment Agreement is hereby confirmed and
is in full force and effect.
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Please indicate your agreement to the foregoing by signing this letter
in the space provided.
Very truly yours,
MIDWAY GAMES INC.
By: /s/ Xxxxxx X. Xxxx, Xx.
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Xxxxxx X. Xxxx, Xx.
Executive Vice President - Finance
Accepted and Agreed to:
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
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