EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of December 15, 1998, by and among
Radica Games Limited, a Bermuda company, having a registered address at
Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx XX00, Xxxxxxx, Disc, Inc., a Nevada
corporation (dba Radica Innovations), having an office at 00000X Xxxx Xxxx,
Xxxxxx, Xxxxx 00000, and Xxx Xxx Wing, who resides at 0000 Xxxx Xxxxx Xxxxx,
Xxxxx, 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 Innovations is engaged in design services and engineering for
products manufactured by Radica;
WHEREAS, Employee has substantial executive management experience including
design and engineering experience;
WHEREAS, Radica Innovations 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:
DEFINITIONS. For the purposes of this Agreement, the parties hereby adopt the
following definitions:
"Cause" means:
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 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.
"Dollars" and "US$" means United States dollars.
"Employee" means Xxx Xxx Wing.
"1994 Plan" means the 1994 stock option plan adopted by Radica, as amended from
time to time.
"Radica" means Radica Games Limited, a Bermuda company.
"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.
"Radica Innovations" means Disc, Inc., a Nevada corporation.
"Termination" means, according to the context, the termination of this Agreement
or the cessation of rendering employment services by Employee.
"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.
EMPLOYMENT.
Employee has previously been employed as Vice President, Engineering and as one
of the Directors of Radica. In such capacities, Employee has had responsibility
for design services and engineering affecting the Radica Group generally,
including Radica Innovations. 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 no change in the title or status of Employee for purposes of
his employment by Radica Group, except that Employee shall be promoted to the
title of Executive Vice President,
Engineering of Radica. Employee's employer within Radica Group shall
be Radica Innovations, but his duties shall extend to other members of Radica
Group including acting as a director of Radica. 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 or around
Dallas, Texas. It is contemplated Employee will frequently travel to carry out
his duties under this Agreement, including travel to the offices of Radica Group
in Hong Kong, 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, and life insurance program, as provided to other
officers of Radica Group.
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
Group.
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 Innovations agrees to pay Employee, and Employee agrees to
accept from Radica Innovations, 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 $160,000 per annum payable in arrears in monthly installments. Employee shall
receive annual salary reviews by the Board provided that such salary shall not
be reduced below US $160,000 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 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.
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.
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.
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.
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.
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 Radica Innovations, 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 or Radica
Innovations or any corporation with or into which they may be consolidated or
merged. Radica and Radica Innovations 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 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
Innovations 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: Disc, Inc.
(dba Radica Innovations).
00000X Xxxx Xxxx
Xxxxxx, Xxxxx 00000
U.S.A.
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
To: Radica Games Limited
Suite R, 6/F
2-12 Au Xxx Xxx Street
Fo Tan
Hong Kong
Attention: Xxxxx X.X. Xxxxxx
Telephone: (000) 0000 0000
Telefax: (000) 0000 0000
To: Employee:
Xx. Xxx Xxx Xxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxx, Xxxxx 00000
X.X.X.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
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:
DISC, INC. (dba RADICA INNOVATIONS)
By:
XXX XXX WING
