Exhibit 10.11
AMENDMENT AND RESTATEMENT
OF
EMPLOYMENT AGREEMENT
THIS AMENDMENT AND RESTATEMENT is made and entered into as of September
27, 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, made and entered into as of the 16th day of May, 1997,
provided the employment hereunder shall commence July 1, 1997, by and among
Radica Enterprises Ltd., a Nevada corporation, having an office at 0000 Xxxxxxx
Xxxx, Xxxxx 000, Xxxx, Xxxxxx 00000, Radica Games Limited, a Bermuda company,
having an office at Suite R, 6/F, 2-12 Au Xxx Xxx Street, Fo Tan, Hong Kong, and
Xxxxxxx Xxxxx, who resides at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx
00000.
WHEREAS, Radica is engaged through its subsidiaries in designing and
manufacturing electronic and mechanical gifts and games for worldwide sale, and
OEM manufacturing for others;
WHEREAS, Radica USA is engaged in marketing and distributing products
manufactured by Radica;
WHEREAS, Employee has substantial executive management experience
including marketing experience in the United States;
WHEREAS, Radica USA and Radica desire 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;
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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
or Radica USA (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
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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 Xxxxxxx 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 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.
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 USA 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 him unable to perform the essential functions of his
job, with or without
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reasonable accommodation, for a cumulative period of twelve (12) weeks
in any twelve (12) month period.
2. EMPLOYMENT.
a) Commencing July 1, 1997, Radica hereby employs Employee and Employee
hereby accepts employment by Radica to serve as the President and
Chief Operating Officer of Radica. Employee shall also be employed as
the President, or in another senior executive position, of Radica USA.
During his period of employment, employee also agrees to serve as a
member of the board of directors of Radica, Radica USA and of such
other members of 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 and Radica
USA and as a director of Radica as may from time to time be assigned
or delegated to him by the Board. It is envisioned that these duties
will include inter alia management of the business of Radica USA.
b) Employee will devote his full business time and attention to his
duties under this Agreement.
c) Employee shall perform his duties under this Agreement principally in
or around Los Angeles. It is contemplated Employee will frequently
travel to carry out his duties under this Agreement, including travel
to the offices of Radica USA in Nevada and Texas. Air travel and other
travel arrangements will comply with current Radica Group policies
respecting class of travel, etc.
d) Radica Group will provide to Employee, his spouse and children medical
benefits which are 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 Group.
3. TERM OF EMPLOYMENT.
a) This Agreement and Employee's employment hereunder shall commence as
of July 1, 1997 and continue until the second anniversary of such
date, and shall be renewed annually at each July 1 anniversary date
(commencing July 1, 1998) 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.
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b) Notwithstanding Paragraph (a) above, this Agreement may be sooner
terminated by Radica or Radica USA for Cause, by Employee without
consent of Radica or Radica USA, by Radica or Radica USA without
Cause, or by Radica or 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 or Radica USA for Cause, or by Employee without consent of
Radica or Radica USA, all benefits and compensation shall cease as of
the date of such Termination. On termination of this Agreement by
Radica or 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.
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 USA agrees to pay Employee, and Employee agrees to
accept from Radica USA, during the first year after July 1, 1997, for the
services to be rendered by him hereunder a minimum salary at the rate of
US$185,000 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$185,000 per year. Employee shall also be
entitled to a signing bonus of U.S.$15,000.
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If Radica Group institutes a retirement, bonus or other benefit plan which
applies generally to U.S. executive officers of Radica Group, Employee
shall be entitled to participate therein, but not to the extent such
benefits would be duplicative of the benefits herein.
6. STOCK OPTIONS.
a) (i) As of the date of this Agreement, Radica hereby grants to Employee
an option to purchase three hundred thousand (300,000) shares of the
common stock of Radica at $3.625 per share (representing the current
market price as of a recent date), subject to the terms and conditions
of this Section 6 and the 1994 Plan (the "Initial Stock Option").
(ii) Additionally, with reasonable promptness after the end of each of
Radica's 1998, 1999 and 2000 fiscal years (i.e., fiscal years ending
October 31 in such years), Radica shall grant to Employee an option
(up to three such options in total) to purchase sixty thousand
(60,000) shares (up to 180,000 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 condition that
Radica achieves consolidated income from continuing operations before
income taxes of at least U.S.$9.0 million in fiscal year 1998,
U.S.$11.0 million in fiscal year 1999, and U.S.$14.0 million in fiscal
year 2000, respectively. The determination of the amount of
consolidated income from continuing operations before income taxes
shall be based on Radica's consolidated statement of operations
included in its annual report on Form 20-F for such year as filed with
the Securities and Exchange Commission. For comparability purposes, it
is noted that the amount of consolidated income from continuing
operations before income taxes for the fiscal year ended October 31,
1996 was $3.086 million. If such requirement is not met in such fiscal
year (or if Employee's employment hereunder has previously
Terminated), the stock option associated with such fiscal year will
not be granted. Such stock options are herein called the "Subsequent
Stock Options". The Initial Stock Option and the Subsequent Stock
Options are herein collectively called the "Stock Options". It is
expected that the Subsequent Stock Options will be granted
approximately in December of each applicable year after the end of the
related fiscal year.
(iii) The Stock Options shall vest and become exercisable 20% per year
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
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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 or Radica USA for Cause or by
Employee without consent of Radica or Radica USA, or (ii) twelve (12)
months after the date of Termination in the event of Termination by
Radica or 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 80% 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 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.
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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
pursuant to applicable state and federal securities laws and except as
specifically contemplated herein.
7. NON-COMPETE; CONFIDENTIALITY.
a) During the term of employment of Employee, and for a period of one
year ("Prohibition Period") after any Termination (other than in the
event of a Termination/Change in Control) of such relationship or
employment for any other reason (either by Employee or Radica or
Radica USA), with or without cause, voluntarily or involuntarily,
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 ("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) [RESERVED.]
c) 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"). 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 or Radica USA to do so.
d) Employee shall promptly communicate and disclose to Radica Group all
information, inventions, improvements, discoveries, knowhow, methods,
techniques, processes, observations and data ("Proprietary
Information") obtained,
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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.
e) 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 or Radica USA, 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 or 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 and 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
or Radica USA or any corporation with or into which they may be
consolidated or merged. Radica and 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.
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.
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,
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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 Enterprises Ltd.
0000 Xxxxxx X Xxxxxxxxx, Xxxxx 000
Xxxx, Xxxxxx 00000-0000
X.X.X.
Attention: Xxx X. Xxxxxxxx
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. Xxxxxxx Xxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
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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.
By: /s/ Xxx X. Xxxxxxxx
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RADICA GAMES LIMITED
By: /s/ Xxx X. Xxxxxxxx
---------------------------------
XXXXXXX XXXXX
/s/ Xxxxxxx Xxxxx
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