EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of December 15, 2001,
between Radica Enterprises Ltd., a Nevada corporation (dba Radica USA Ltd.),
having an office at 00000X Xxxx Xxxx, Xxxxxx, Xxxxx 00000, and Xxxxxx Xxxxx,
residing at 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx 00000.
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, Radica USA is engaged in the marketing, sales and distribution
products manufactured by Radica;
WHEREAS, Employee has substantial executive management experience;
WHEREAS, Radica USA 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.
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;
(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 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.
(b) 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.
(c) "Dollars" and "US$" means United States dollars.
(d) "Employee" means Xxxxxx Xxxxx.
(e) "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 her position and
status as an executive of the
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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.
(f) "1994 Plan" means the 1994 stock option plan adopted by Radica, as
amended from time to time.
(g) "Radica" means Radica Games Limited, a Bermuda company.
(h) "Radica Group" means Radica, Radica Innovations and any other
corporation or other entity which at the relevant time is more than fifty
percent (50%) owned, directly or indirectly, by Radica.
(i) "Radica USA" means Radica Enterprises Ltd., a Nevada corporation.
(j) "Termination" means, according to the context, the termination of this
Agreement or the cessation of rendering employment services by Employee.
(k) "Total Disability" means Employee shall become disabled to an extent
which renders her unable to perform the essential functions of her 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 USA as Senior Vice
President, Marketing and Operations. 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. Employee shall be
promoted to the title of Executive Vice President and General Manager
of Radica USA. Employee's principal employer within Radica Group shall
be Radica USA where she will act as general manager. Duties will
include directing the design effort of our suppliers including Radica
China Ltd. and working closely with the design team at Disc Inc.
During her 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 her offices with
Radica Group as may from time to time be assigned or delegated to her
by the Board.
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(b) Employee will devote her full business time and attention to his
duties under this Agreement.
(c) Employee shall perform her duties under this Agreement principally in
or around Dallas, Texas. It is contemplated Employee will frequently
travel to carry out her duties under this Agreement, including travel
to the offices of Radica Group in Hong Kong, England, New York City
and California. Air travel and other travel arrangements will comply
with current Radica Group policies respecting class of travel, etc.
(d) Radica USA will provide Employee, including her spouse and children,
with medical and dental benefits, and life insurance program, as
provided to other officers of Radica Group.
(e) Employee shall have four (4) weeks paid vacation during each year of
this Agreement taken at such times as mutually convenient to Employee
and Radica USA.
3. TERM OF EMPLOYMENT.
(a) This Agreement and Employee's employment hereunder shall commence as
of December 15, 2001 and continue until the second anniversary of such
date, and shall be renewed annually at each December 15 anniversary
date (commencing December 15, 2002) 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 USA for Cause, by Employee without consent of
Radica USA, by Radica USA without Cause, or by Radica USA 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 USA for Cause, or by Employee without consent of Radica USA,
all benefits and compensation shall cease as of the date of such
Termination. On termination of this Agreement by Radica USA 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 USA for the reasonable business expenses paid by her on behalf of
Radica Group in the course of her employment hereunder on presentation to
Radica USA 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 USA agrees to pay Employee, and Employee agrees to
accept from Radica USA, during the first year after December 15, 2001, for
the services to be rendered by her hereunder a minimum salary at the rate
of US $200,000 per annum payable as determined by the payroll policies of
Radica USA. Employee shall receive annual salary reviews by the Board
provided that such salary shall not be reduced below US $200,000 per year.
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 USA shall be subject to required withholdings
including taxes.
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, upon execution of this agreement Radica shall grant
to Employee an option to purchase forty thousand (40,000) shares 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. Such stock options together with
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the 60,000 options that were previously granted upon initial
employment under this clause (ii) are herein called the "Stock
Options".
(iii) The Stock Options shall vest and become exercisable 33 1/3% 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 USA for Cause or by Employee
without consent of Radica USA, or (ii) twelve (12) months after the
date of Termination in the event of Termination by Radica USA 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 66 2/3% of the stock subject to the
Stock Option;
(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 33 1/13% 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 her right to purchase stock subject
to the Stock Options, but subject to the foregoing provisions
respecting vesting and forfeitures.
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(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 she 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 she 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 her duties for Radica Group, Employee agrees not to
disclose, divulge, make public, utilize, communicate or use, whether
for her 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.
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(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
her in the course of this employment. All written materials, records,
computer programs or data and documents made by Employee or coming
into her 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 she may have purchased the medium on which such
Proprietary Information is recorded.
(d) Upon Termination, Employee shall not take with her 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 USA, 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 USA, their 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 USA or any
corporation with or into which they may be consolidated or merged. Radica
USA may assign their 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 her spouse, or to a
family member, proceeds of payments resulting from her 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 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 USA Ltd.
000 Xxxxx Xxxx Xxxxxx
Xxxxx 000 Xxxxxxxx, Xxxxxxxxxx 00000 X.X.X.
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
To: Employee:
Xxxxxx Xxxxx
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
X.X.X.
Telephone (000) 000-0000
Telefax: (000) 000-0000
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 ENTERPRISES LTD. (dba Radica USA)
By: /S/ XXX XXXXX on behalf of Radica USA
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XXXXXX XXXXX
/S/ XXXXXX XXXXX
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