Exhibit 4.16
AMENDMENT NO. 1
TO EMPLOYMENT AGREEMENT
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AGREEMENT, dated as of March 31, 2003 by and between Radica
Enterprises, Ltd., a Nevada corporation ("Radica USA"), Radica Games Limited, a
Bermuda company ("Radica"), and Xxxxxxx Xxxxx ("Employee").
WHEREAS, Radica, Radica USA and Employee entered into an Amended and
Restated Employment Agreement, dated as of September 2000 (the "Employment
Agreement") with respect to the employment by Radica and Radica USA of Employee;
and
WHEREAS, the parties desire to amend the Employment Agreement with
respect to the Employee's continued employment after March 31, 2003
NOW THEREFORE, it is hereby agreed as follows:
1. Section 1(b) of the Employment Agreement is hereby amended in its
entirety to read as follows:
"b) "Change in Control" means the occurrence of any one of the
following events:
(i) individuals who, on January 1, 2003, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to January 1, 2003, whose election or nomination for
election was approved by a vote of at least two-thirds of the
Incumbent Directors then on the Board (either by a specific vote or
by approval of the proxy statement of Radica in which such person is
named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that
no individual initially elected or nominated as a director of Radica
as a result of an actual or threatened election contest with respect
to directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any person
other than the Board shall be deemed to be an Incumbent Director;
(ii) any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
becomes a "beneficial owner" (as defined in Rule 13d3 under the
Exchange Act), directly or indirectly, of securities of Radica
representing 50% or more of the combined voting power of Radica's
then outstanding securities eligible to vote for the election of the
Board (the "Radica Voting Securities") or any person who
beneficially owns 50% of the Radica Voting Securities increases
their beneficial ownership by more than 5%; provided, however, that
the event described in this paragraph (ii) shall not be deemed to be
a Change in Control by virtue of any of the following acquisitions:
(A) by
Radica or any member of the Radica Group, (B) by any employee
benefit plan (or related trust) sponsored or maintained by Radica or
any member of the Radica Group, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities, (D)
pursuant to a Non-Qualifying Transaction (as defined in paragraph
(iii)), or (E) pursuant to any acquisition by Employee or any group
of persons including Employee (or any entity controlled by Employee
or any group of persons including Employee);
(iii) the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving Radica
or any member of the Radica Group that requires the approval of
Radica's stockholders, whether for such transaction or the issuance
of securities in the transaction (a "Business Combination"), unless
immediately following such Business Combination: (A) more than 50%
of the total voting power of (x) the corporation resulting from such
Business Combination (the "Surviving Corporation"), or (y) if
applicable, the ultimate parent corporation that directly or
indirectly has beneficial ownership of at least 95% of the voting
securities eligible to elect directors of the Surviving Corporation
(the "Parent Corporation"), is represented by Radica Voting
Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which
such Radica Voting Securities were converted pursuant to such
Business Combination), and such voting power among the holders
thereof is in substantially the same proportion as the voting power
of such Radica Voting Securities among the holders thereof
immediately prior to the Business Combination, (B) no person (other
than any employee benefit plan (or related trust) sponsored or
maintained by the Surviving Corporation or the Parent Corporation or
an existing Radica shareholder, with greater than 50% beneficial
ownership of the Radica Voting Securities prior to the Business
Combination, whose percentage beneficial ownership compared to the
other Radica shareholders in existence immediately prior to the
Business Combination does not change on consummation of the Business
Transaction), is or becomes the beneficial owner, directly or
indirectly, of 50% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) and (C) at least a majority of the members of
the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the
consummation of the Business Combination were Incumbent Directors at
the time of the Board's approval of the execution of the initial
agreement providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in (A),
(B) and (C) above shall be deemed to be a "Non-Qualifying
Transaction"); or
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(iv) the stockholders of Radica approve a plan of complete
liquidation or dissolution of Radica or the consummation of a sale
of all or substantially all of Radica's assets.
Notwithstanding the foregoing, a Change in Control of Radica shall not
be deemed to occur solely because any person acquires beneficial
ownership of more than 50% of the Radica Voting Securities as a result
of the acquisition of Radica Voting Securities by Radica which reduces
the number of Radica Voting Securities outstanding; provided, that if
after such acquisition by Radica such person becomes the beneficial
owner of additional Radica Voting Securities that increases the
percentage of outstanding Radica Voting Securities beneficially owned
by such person, a Change in Control of Radica shall then occur."
2. Section 1(e) of the Employment Agreement is amended so that a new
sentence is added at the end of the paragraph as follows:
"Notwithstanding the foregoing, if Employee does not deliver to Radica
and Radica USA a notice of termination within 90 days after the
occurrence of the event constituting Good Reason has occurred, the
event will no longer constitute Good Reason. An isolated, insubstantial
and inadvertent action taken in good faith and which is remedied by
Radica or Radica USA within 10 days after receipt of notice thereof
given by Employee shall not constitute Good Reason."
3. Section 1(e) of the Employment Agreement is further amended to
insert the words "within twelve months" in the first sentence after the word
"occurrence".
4. The second sentence of Section 3(c) of the Employment Agreement is
hereby replaced in its entirety with the following:
"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 the event of Total Disability of Employee, (i) Radica USA
will continue to pay Employee his annual salary for twelve months from
the date of Termination, (ii) Radica Group will continue to provide
medical and dental benefits to Employee for twelve months from the date
of Termination on the same basis and at the same Employee cost as at
the date of Termination and (iii) Employee's stock options will be
treated as set forth in Section 6 hereof."
5. The first paragraph of Section 5 is amended to increase Employee's
minimum salary to US$332,600 per annum beginning on April 1, 2003, and by adding
the following sentence to the end of the paragraph:
"After a Change in Control, Employee's salary shall not be reduced
below the level immediately prior to the Change in Control."
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6. Section 6(a)(iii) is hereby amended by adding the words "Subject to
the other provisions of this Section 6," at the beginning of the paragraph.
7. Section 6(c) is hereby amended by deleting the words "Any other
provision hereof to the contrary notwithstanding,".
8. Section 6(c)(ii) is hereby amended by adding the words "(unless
Section 6(f) of this Agreement applies, in which case this Section 6(c) shall
not apply to Employee's Stock Options)" immediately after the words "or by
Employee for Good Reason in the event of a Termination/Change in Control".
9. A new Section 6(f) is hereby added to the Employment Agreement to
read in its entirety as follows:
"Upon the occurrence of a Change in Control under the 1994 Plan, all of
Employee's then outstanding stock options in Radica shall vest and
become immediately exercisable. If Employee is terminated by Radica or
Radica USA without Cause after a definitive agreement for a transaction
described in Sections 9(a)(i) or (ii) of the 1994 Plan has been
approved by the shareholders of Radica, but before such transaction is
consummated, Employee's stock options shall vest on the date of such
termination without Cause."
10. Section 11 of the Employment Agreement is hereby amended by adding
the words immediately after "This Agreement":
", the Change in Control Bonus Agreement between Employee, Radica and
Radica USA and the Agreement dated as of March 31, 2003 between
Employee, Radica and Radica USA"
11. A new Section 16 is hereby added to the Employment Agreement to
read in its entirety as follows:
"16. Reimbursement of Expenses. After a Change in Control,
if any dispute shall arise under this Agreement involving
termination of Employee's employment with Radica or Radica
USA or involving the failure or refusal of Radica or Radica
USA to perform fully in accordance with the terms hereof,
Radica or Radica USA shall reimburse Employee, on a current
basis, for all reasonable legal fees and expenses, if any,
incurred by Employee in connection with such contest or
dispute (regardless of the result thereof), regardless of
whether Employee's claim is upheld by a court of competent
jurisdiction; provided, however, Employee shall be required
to repay any such amounts to the Company to the extent that
a court issues a final and non-appealable order setting
forth the determination that the position taken by Employee
was frivolous or advanced by Employee in bad faith."
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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
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XXXXXXX XXXXX
/s/ Xxxxxxx X. Xxxxx
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