Exhibit 10.13
AMENDMENT AND RESTATEMENT
OF
EMPLOYMENT AGREEMENT
THIS AMENDMENT AND RESTATEMENT is made and entered into as of September
29, 2000 in order to amend and restate in its entirety the following Employment
Agreement between the parties named below. The amendments made by this Amendment
and Restatement shall be effective as of August 23, 1999 (being the date of the
Compensation and Organization Committee meeting that approved these amendments)
but the other provisions of the Agreement shall be dated as of the original date
of the Agreement or as of the date of any prior amendments, as the case may be.
This Amendment and Restatement is intended to embody all previously agreed
amendments and to supercede all prior versions of the 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:
1. 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;
(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;
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(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 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;
(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.
(aa) A "Change in Control" shall be deemed to have occurred if, at any
time after the commencement of employment hereunder: (i) any person or group of
persons (as defined in Section 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) together with its affiliates, excluding
employee benefit plans of Radica, is or becomes, directly or indirectly, the
"beneficial owner" (as defined in rule 13d-3 promulgated under the 0000 Xxx) of
securities of Radica representing 50% or more of the combined voting power of
Radica's then outstanding securities; or (ii) as a result of a proxy contest,
merger, consolidation, sale of assets, tender offer or exchange offer or as a
result of any combination of the foregoing, Directors who were members of the
Board of Directors of Radica two years prior to such time and new Directors
whose election or nomination for election by Radica's shareholders was approved
by a vote of at least two-thirds of the Directors still in office who were
Directors two years prior to such time, cease to constitute at least two-thirds
of the members of the Board of Directors of Radica; or (iii) the shareholders of
Radica approve a merger or consolidation of Radica with any other corporation or
entity regardless of which entity is the survivor, other than a merger or
consolidation which would result in the voting securities of Radica outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
at least 50% of the combined voting power of the voting securities of Radica or
such surviving entity outstanding immediately after such merger or
consolidation; or (iv) the shareholders of Radica approve a plan of complete
liquidation or winding-up of Radica or an agreement for the sale or disposition
by Radica of all or substantially all of Radica's assets.
(b) "Dollars" and "US$" means United States dollars.
(c) "Employee" means Xxxxx X.X. Xxxxxx.
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(cc) "Good Reason" shall mean the occurrence after a Change in Control
of any of the following events without the Employee's express written consent:
(i) the assignment to the Employee of duties inconsistent with his position and
status as an executive of the Radica Group, or a substantial alteration in the
nature, status or prestige of the Employee's responsibilities with the Radica
Group from those in effect immediately prior to such Change in Control; or (ii)
a reduction in the Employee's base salary or bonus at the rate most recently
approved by the Board prior to the occurrence of such Change in Control; or
(iii) any other material adverse change in the terms or conditions, including
location and travel, of the Employee's employment hereunder following the
occurrence of such Change in Control.
(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.
(a) 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.
(b) Employee will devote his full business time and attention to his
duties under this Agreement.
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(c) 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.
(d) Radica Group will provide Employee, including his spouse and
children, with medical and dental benefits, as provided to other officers of
Radica Group.
(e) 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.
(f) 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.
(g) 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.
(h) 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.
(a) 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.
(b) 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.
This Agreement may also be sooner terminated by Employee following any Change in
Control and if following such Change in Control Employee has Good Reason for
such Termination; such Termination by Employee is herein called a
"Termination/Change in Control".
(c) 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 event of Total Disability of
Employee, all benefits and compensation shall continue at the rate most recently
approved by the Board for twelve (12) months after such a Termination.
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4. 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:
(i) the amount, date, and place of each such expense;
(ii) 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
(iii) 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. 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.
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6. 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
Annual General Meetings held in 2000, 2001 and 2002, 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 by Employee for Good Reason in the event
of a Termination/Change in Control 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:
(A) 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;
(B) 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;
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(C) 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;
(D) 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
(E) 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.
7. NON-COMPETE; CONFIDENTIALITY.
(a) During the term of employment of Employee, and for a period of one
year after any Termination (other than in the event of a Termination/Change in
Control) 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
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(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.
8. 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.
9. 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.
10. 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.
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11. 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.
12. 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.
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.
14. 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
000 Xxxxx Xxxx Xxxxxx
Xxxxx 000 Xxxxxxxx, Xxxxxxxxxx 00000
U.S.A.
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
To: Employee:
Xx. Xxxxx X.X. Xxxxxx
00 Xxx Xxxx Xxx Xxxx
Xxx Xxxx, Xxx Xxxxxxxxxxx, Xxxx Xxxx
Telephone: 000-0000-0000
Telefax: 000-0000-0000
15. 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.
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IN WITNESS WHEREOF, the parties have executed this Amendment and
Restatement as of the day and year first above written.
RADICA GAMES LIMITED
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
XXXXX X.X. XXXXXX
/s/ Xxxxx X.X. Xxxxxx
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