EMPLOYMENT AGREEMENT
AGREEMENT made as of the 29th July 1997 ("the Effective Date") BETWEEN
(1) GAME-TEK UK LIMITED whose registered office is situate at
("the Employer") and
(2) XXXXX XXXXXX XXXXXX residing at "Chimneys" 00 Xxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx XX00 0XX ("the Employee").
W I T N E S S E T H:
WHEREAS the Employer desires to confirm the employment of the Employee as
an executive officer of the Employer which commenced on the 29th July 1997, and
to that end the Employer and the Employee desire to enter into this Agreement.
However, the date of the commencement of the Employee's period of continuous
employment is the 16th April 1993. This is because previous employment with the
Employer from the 16th April 1993 to the date hereof counts as part of the
Employee's period of continuous employment with the Employer.
NOW THEREFORE in consideration of the premises and of the mutual promises
and covenants contained herein, the Employer and the Employee hereby agree as
follows:
1. Duties. Commencing on the 29th July 1997 Employer hereby employs the
Employee as the President/Managing Director of the Employer to perform such
executive duties as are consistent with the office of President/Managing
Director and in such other senior executive capacity as the Employer may from
time to time reasonably require including service as an executive officer and/or
director of one or more of any associated company of the Employer which is for
the time being a subsidiary or a holding company of the Employer or a subsidiary
(other than the Employer) of the holding company of the Employer. "Subsidiary"
and "holding company" in this context having the same meanings as in Section 736
of the Companies
Xxx 0000 (as amended). The Employer agrees that during the term of this
Agreement the Employee's title shall not be changed to any lesser title nor
shall his duties and responsibilities be materially diminished without his
consent nor shall he be required to live and work outside England except with
his consent and except for travelling on business in the proper performance of
his duties hereunder. The Employee covenants and agrees to devote, during normal
business hours, substantially his entire time, professional efforts and skills
collectively to the performance of such duties except insofar as the same are
require for the performance of the Consultancy Agreement between Game-Tek Inc.
and the Employee dated 24th July 1997 PROVIDED HOWEVER that the Employee shall
be permitted to make passive investments in companies or other entities whose
business activities are unrelated to and not competitive with the business of
the Employer or any associated company as hereinbefore defined so long as such
investments do not require any of his business time.
2. Compensation/Salary and Benefits. In consideration of his services
during the Term (as hereinafter defined) the Employee shall be paid
compensation/salary and benefits by the Employer as follows:-
(a) Salary. For all services to be rendered by the Employee to the
Employer or any associated companies herein defined including services as
an officer and director of the Employer, if asked to serve in such
capacities, the Employer agrees to pay to the Employee an annual salary
("the Salary") at the rate of One Hundred Thousand British Pounds Sterling
((pound)100,000) during each year of the Term or part thereof. The Salary
shall be reviewed annually and may, but need not be, increased in the sole
discretion of the Board of Directors. The Salary shall be paid in
fortnightly installments.
-2-
(b) Bonus. The Employer agrees to pay to the Employee an annual bonus
("the Bonus") in respect of each fiscal year of the Employer during the
Term in an amount equal to seven and a half per cent (7.5%) of the Net
Pre-Tax Profits (as hereinafter defined) of the Employer for each such year
or part thereof on a pro rata basis equal to the number of days during each
such fiscal year during which the Employee shall be employed by the
Employer hereunder if the Employee is employed for less than the entire
fiscal year.
For the purposes of this Agreement "Net Pre-Tax Profits" shall be the net
pre-tax profits of the Employer as determined by independent auditors retained
by the Employer who shall make such determination in accordance with generally
accepted accounting principles (in England and Wales) consistently applied to
the Employer from the date of this Agreement and who shall in making such
determination of net pre-tax profits for the purposes of this Agreement:-
(i) deduct from the relevant amount of net profit any gains on sales
of assets (other than in the ordinary course of business);
(ii) add back to net profit any amount paid by the Employer or any
associated company as the case may be during such period as a bonus to the
Employee or any other of their employees in respect of the prior year's net
pre-tax profit.
The Employee's Bonus shall be paid to him at the same time as other
executive employees of the Employer receive their respective bonuses and as soon
as practicable following the close of the Employer's fiscal year but in any
event no later than three months thereafter.
3. Sickness Subject to the Employee producing medical certificates
satisfactory to the Employer, Salary shall not cease to be payable by reason
only of the
-3-
Employee's incapacity for work due to sickness or accident during a period not
exceeding One Hundred and Twenty (120) consecutive working days in aggregate in
any twelve consecutive months (after which period Salary shall be paid only in
the absolute discretion of the Employer) but any such Salary shall include any
sums which the Employer is obliged to pay to the Employee by way of statutory
sick pay. The Employer may reduce the Salary during the Employee's incapacity by
an amount equal to the benefit (excluding any lump sum benefit) which the
Employee would be entitled to claim during such incapacity under the Social
Securities Acts (whether or not such benefit is claimed by the Employee).
4. Pension There is not in force a Contracting Out Certificate under the
Xxxxxxx Xxxxxxx Xxx 0000.
5. Reimbursement of Expenses: Benefits The Employee shall be reimbursed by
the Employer for all reasonable business expenses incurred by him in connection
with the discharge by the Employee of his duties hereunder, upon presentation of
such documentation substantiating the incurring of such expenses as may be
reasonably required by, and in accordance with expense reimbursement policies
established by the Employer. The Employee shall be entitled to participate in
all employee benefit programmes made available by the Employer to all of its
executive officers. In addition, the Employer will meet the cost of a lease car
for the Employee up to Five Hundred British Pounds Sterling ((pound)500) per
month plus all the expenses of running the same including fuel, vehicle
taxation, insurance, repairs and maintenance and will provide for the Employee
at the Employer's expense death in service benefit up to an agreed amount and
medical insurance cover up to an agreed amount, and the employee shall be
entitled to four weeks paid vacation days in each year of the Term, plus one
additional paid vacation day for each full year of service to the Company not to
exceed five (5)
-4-
weeks paid vacation in any year, the amount of such vacation to be pro rated in
any year of the Term during which the Employee is employed hereunder for less
than the entire year. Unused vacation days may not be carried forward to future
periods of the Term and will not be compensated.
6. Term: Termination by Either Party This Agreement shall commence as of
29th July 1997 and PROVIDED THAT three months notice in writing in advance shall
have been served by either the Employer or the Employee on the other to
terminate this Agreement at 28th July 2000, failing which this Agreement shall
continue until terminated by either party in the case of the Employer on six (6)
months notice in writing and in the case of the Employee on three months notice
in writing unless earlier terminated as provided in Section 7 hereof "the
Term").
7. Termination of Employment
(a) The Employee's employment hereunder shall terminate upon his death.
(b) The Employer may terminate the Employee's employment hereunder in the
event the Employee shall have been unable for one hundred and twenty (120) or
more consecutive working days due to illness, accident other physical or mental
incapacity to perform his duties hereunder.
(c) The Employer may terminate the Employee's employment hereunder for
cause which shall mean:
(i) the Employee having been convicted of any criminal or civil acts
prejudicial to the Employer whether or not committed in the course of his
employment;
-5-
(ii) wilful misconduct by the Employee in the discharge of his duties
hereunder involving the misuse or misappropriation of the Employer's funds
or property;
(iii) the wilful neglect, failure or refusal of the Employee
substantially to perform the services lawfully required to be performed by
him hereunder (not including any failure resulting from illness, accident
or other physical or mental incapacity);
(iv) conduct constituting a violation of the law relating to
harassment or discrimination against any person or,
(v) any other breach by the Employee of a material term of this
Agreement if the Employee fails to remedy such breach within fifteen (15)
days following the Employee's receipt of written notice and demand to cure
such breach.
(d) The Employee may terminate this Agreement on thirty (30) days written
notice if the Employer fails, after written notice and demand to cure any breach
of or to perform within thirty (30) days of such notice and demand, any material
obligation of the Employer hereunder.
8. Effect of Termination
(a) Except as otherwise expressly set forth in this Section 8 and
notwithstanding any provision of this Agreement to the contrary:
(i) the Employee's right to receive the Salary provided for in Section
2 shall cease prospectively upon the effective date of any termination of
his employment hereunder ("the Termination Date") except as otherwise
herein provided;
-6-
(ii) the Employee shall be paid any unpaid Bonus up to the Termination
Date and,
(iii) any share options which remain unexercised at the Termination
Date shall expire.
(b) Upon the termination of the Employee's employment hereunder pursuant to
Section 7(a) the Employee's estate shall be entitled to receive and the Employer
shall pay to such estate, an amount equal to the full Salary provided for in
Section 2(a) for a period of three months from the Termination Date plus the
amount of the Bonus that otherwise would have been payable with respect to the
fiscal year in which the Employee's employment is terminated ("the Termination
Year") multiplied (in the case of the Bonus) by a fraction the numerator of
which is the number of days in the Termination Year to and including the
Termination Date and the denominator of which is three hundred and sixty-five
(365) plus all other benefits to be provided hereunder. In addition, all share
options shall be exercisable by the Employee's estate in accordance with the
terms of any Incentive Stock Option Scheme.
(c) Upon the termination of the Employee's employment hereunder without
cause pursuant to Section 7(b):
(i) the Employee shall be entitled to receive and the Employer shall
pay to the Employee an amount equal to his Salary for a period of six
months from the Termination Date plus the amount of the Bonus that
otherwise would have been payable with respect to the fiscal year of the
Employer in which the Termination Date falls, multiplied by a fraction the
numerator of which is the sum of days in such year to and including the
Termination Date the denominator of which is thee hundred and sixty-five
(365), less in the case of a termination by reason of the Employee's
disability,
-7-
any amounts received by the Employee in respect of disability insurance
maintained by the Employer and,
(ii) any share options available for exercise by the Employee at the
Termination Date under any Incentive Stock Option Scheme shall be
exercisable by him within a period of six (6) months from the Termination
Date.
(d) Upon termination of the Employee's employment hereunder pursuant to
Section 7(c) the Employee shall only be entitled to receive his Salary accrued
up to the Termination Date. Any rights the Employee might otherwise have had
with respect to any unpaid Bonus shall bc forfeit and all unexercised Share
Options shall expire.
(e) Upon termination of the Employee's employment hereunder pursuant to
Section 7(d) the Employee may recover any damages occasioned by the Employer's
conduct as may be permitted by law but in any event shall receive his Salary
until the end of the Term gross of tax so far as permitted by law plus the Bonus
which he would otherwise have received until the end of the Term plus the right
to exercise all unexercised Share Options plus compensation for the loss of any
other benefits to which the Employee is entitled under this Agreement
9. Change of Control Upon the happening of any Change of Control in the
constitution of the Employer which shall bring about a termination of this
Agreement the Employee shall be entitled to receive a bonus in addition to any
other amounts owing to him hereunder or any other rights and benefits hereunder
or at law in an amount equal to six (6) month's salary gross of tax insofar as
the law permits payable within thirty (30) days following the event bringing
about the Change of Control.
10. Covenant Relating to Employment and Not to Compete
-8-
(a) The Employee acknowledges that his services are of a particular
significance to the Employer that his position with the Employer will give him a
close knowledge of its policies and trade secrets and that the Employer is in a
creative and competitive business. Accordingly, the Employee hereby covenants
that from and after the date hereof until six (6) months after the end of the
stated Term or six (6) months from earlier termination whichever shall apply,
unless this Agreement shall be terminated by the Employee pursuant to Section
7(d), the Employee shall not be except as provided in this Agreement, directly
or indirectly, alone or as a partner, officer, director, consultant, lender,
agent or representative of any other entity engage anywhere in England and Wales
in any business competitive with the business of the Employer. In the event of
any termination or expiration of this Agreement, except in the event of
termination by the Employee as aforesaid, the Employee covenants, represents and
agrees that for a period of six (6) months after such termination or expiration:
(i) he shall not, directly or indirectly, either for the Employee's
own benefit or for the benefit of any other person, firm or corporation
whatsoever, solicit or divert the services of any persons employed by the
Employer or any of its subsidiaries or affiliates at any time within six
(6) months of such termination or expiration and
(ii) he shall not, directly or indirectly, either for the Employee's
own benefit or for the benefit of any other person, firm or corporation
whatsoever, do any act or thing to cause or induce any interference with or
interruption of any of the relationships of the Employer or any of its
subsidiaries or affiliates with any of their licensors, licensees,
customers, suppliers, employees and/or consultants then existing or with
which such relationship existed at any time within six (6) months of such
termination or expiration.
-9-
Notwithstanding the foregoing, such covenant not to compete shall be of no
further force or effect if the Employee's employment hereunder is terminated by
reason of the Employer's filing for bankruptcy, making an assignment for the
benefit of creditors, seeking liquidation, dissolution, re-organisation or other
similar relief or having such relief sought against it and ceasing operations
and being liquidated as a result thereof. The provisions of this Section 10 and
of Section 11 shall survive any termination or expiration of this Agreement.
11. Disclosure: Return of Employer Data Except as the Employer may
otherwise permit or direct in writing or as may be necessary or appropriate to
carry out his duties hereunder, the Employee will not disclose, during the Term
or thereafter, any confidential information, knowledge or data (other than
information, knowledge or data which is or becomes publicly known or part of the
public domain (other than as a result of the Employee's breach of any legal or
contractual duty of confidentiality owed to the Employer or which is acquired by
the Employee from or disclosed to the Employee by a third party not in breach of
any legal or contractual duty owed to the Employer concerning the Employer or
any of its subsidiaries or affiliates which the Employee may obtain during his
employment) except to the extent that such disclosure is required by law or to
comply with legal process duly served. At the request of the Employer during the
Term or thereafter the Employee will immediately return to the Employer any
books, contracts, records, documents, products and other data of the Employer in
the Employee's possession including all copies thereof or extracts therefrom.
12. Notices Any notice under this Agreement may be given personally to the
Employee or to the secretary of the Employer (as the case may be) or may be
posted to the Employer (for the attention of its secretary) to its registered
office for the time being or to the Employee either to the address given above
or to his last known address. Any such notice sent
-10-
by post shall be deemed to be served forty-eight hours after it is posted and in
proving such service it shall be sufficient to prove that the notice was
properly addressed and put in the post. Any addressee may alter the address to
which communications are to be sent by giving notice of such change of address
in conformity with the provisions of this Section 10 for giving notice.
13. Disciplinary and Grievance Procedure
(a) There are no disciplinary rules in force in relation to the Employee
who is expected at all times to conduct himself in a manner consistent with his
senior status.
(b) If the Employee has a grievance relating to his employment he should
first apply to the Chief Executive/President of Take Two Interactive Software
Inc. If the matter is not then settled the Employee should write to the Board of
Take Two Interactive Software Inc. setting ut full details of the matters. The
decision of the Board shall be final. For this purpose "the Board" means the
Board of Directors from time to time of Take Two Interactive Software Inc. or
any duly authorized committee or member of such Board.
14. Successors and Assigns Neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to charge by either party without the
prior written consent of the other having first been obtained. Any attempted or
purported assignment without such required consent shall be void and a material
breach of this Agreement. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
legal representatives, successors and permitted assigns.
15. Waiver and Amendments No waiver of any of the provisions hereof shall
be effective unless in writing and signed by the part to be charged with such
waiver. No waiver shall be deemed a continuing waiver or a waiver in respect of
any subsequent or other breach
-11-
or default, unless expressly so stated in writing. This Agreement shall not be
modified or amended except by a further written document signed by the Employee
and the Employer.
16. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, negotiations, representation and understanding, written or
oral, among the parties hereto. No termination of this Agreement or any part
hereof shall be valid unless in writing and signed by the parties hereof.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with English law and each of the parties hereby submits to the
exclusive jurisdiction of the English courts to settle any disputes which may
arise out of or in connection with this Agreement.
18. Headings. The headings of the sections in this Agreement are inserted
for convenience only and shall not control or affect the meaning or
constructions of any of the provisions of this Agreement.
IN WITNESS whereof the parties hereto have duly executed this Agreement as
of the day and year first above written.
/s/ Xxxx Xxxxx
-----------------------------------------
Chairman
for and on behalf of Game-Tek UK Limited
/s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx Xxxxxx Xxxxxx
-12-
