Exhibit 10.6

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is entered into as of June 15, 2003 by
and between ACCLAIM ENTERTAINMENT, INC. a Delaware corporation (“Company”) and
GERARD F. AGOGLIA (“Employee”).

 

WHEREAS, Employee and Company are currently party to an employment agreement
dated August 28, 2000 (the “2000 Agreement”):

 

WHEREAS, the parties wish to terminate the 2000 Agreement and enter into a new
employment agreement on the terms set forth below.

 

NOW THEREFORE, the parties agree as follows:

 

1.  DEFINITIONS:    The following terms shall, where the context allows, have
the following meanings whether such terms shall appear in lower case or with the
first letter of each word capitalized (the foregoing shall apply to all other
defined terms used herein):

 

(a) “Company Client” means any person, business or entity (collectively
“Person”) to or through whom any Company Product or Service is sold or brought
to market prior to or during Employee’s employment under this Agreement.

 

(b) “Company Product or Service” means any product or service developed and/or
sold or otherwise provided by Company during or prior to Employee’s employment
under this Agreement, and all other products and/or services which are similar
to such products or services, including, without limitation, computer game
software of all kinds.

 

(c) “Competitor” means any Person who is engaged in the development or sale of
products or services like or similar to any Company Product or Service
including, without limitation, the development or sale of computer game
software.

 

2.  EMPLOYMENT:

 

(a) Acceptance of Employment by Company:    Company hereby engages Employee and
Employee hereby agrees to provide to Company his full-time services as Executive
Vice President, Chief Financial Officer, in accordance with the terms and
conditions of this Agreement. Employee will report to, and serve under the
direction of the Chief Executive Officer and or such other person(s) as may be
designated by Company, however, Employee shall serve as the highest-ranking
financial officer of the Company. Except during vacation period and reasonable
periods of absence due to sickness, personal injury or other disability
throughout the Term (as defined below) of this Agreement, Employee shall devote
his full working time and attention during normal business hours to performing
his services and duties hereunder to the best of his ability and utilizing all
of his skills, experience and knowledge to advance the business and interests of
the Company in a manner consistent with the professional duties and
responsibilities of his position. Employee shall not, directly or indirectly,
engage in or participate in the operation or management of, or render any
services to, any other Person. Notwithstanding the foregoing to the contrary,
Employee shall not be prevented from investing and managing his assets in such
form or manner as will not unreasonably interfere with the services to be
rendered by Employee hereunder, or from acting as a director, trustee, officer
of, or on a committee of, or a consultant to, any other firm, trust or
corporation or deliver lectures, fulfill speaking engagements or teach or coach
at educational institutions whether or not for compensation where such positions
do not unreasonably interfere with the services to be rendered by Employee
hereunder and where the business of such firm, trust or corporation is not in
competition with Company’s (or any of Company’s affiliates) business.

 

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(b) Location of Employment:    Employee shall render his services at Company’s
offices presently located in Glen Cove, New York; provided, however, that
Employee shall render his services at such other locations from time-to-time as
the proper performance of Employee’s duties may reasonably require.

 

3.  TERM:    The term of this agreement shall commence as of June 15, 2003 and
shall continue for a period of three (3) years through and including June 14,
2006 (the “Term”) unless sooner terminated as provided for herein. Unless this
Agreement is terminated or amended by written agreement, the Term shall
automatically be extended from year to year under the same terms and conditions
as shall be in effect on the last termination date, unless either party
terminates the Term by written notice to the other party at least 90 days prior
to the expiration of the then existing Term. Employee agrees that the covenants
set forth in paragraph 6 (hereinafter “Restrictive Covenants”), and all other
provisions of this Agreement related to the enforcement thereof, shall continue
throughout the full Term of this Agreement, surviving any termination of
Employee’s employment hereunder for any reason.

 

4.  COMPENSATION, BENEFITS:

 

(a) Salary:    Company shall pay to Employee during the Term, an annual base
salary (the “Salary”) of Three Hundred Seventy One thousand Dollars ($371,000)
per annum. The Salary shall be reviewed by the Company annually and may be
increased if the Company, in its sole and absolute discretion, determines that
such an increase is advisable based on such factors as the Company shall
consider appropriate from time to time (it is understood that no such review
shall cause a decrease in Employee’s Salary). Employee’s Salary shall be payable
in accordance with the Company’s customary employee payroll policy as in effect
from time to time. Such Salary, together with any other compensation which may
be payable to Employee hereunder shall be less such deductions as shall be
required to be withheld by applicable law and regulations and shall be pro-rated
for any period that does not constitute a full twelve (12) month period.

 

(b) Benefits:    In addition to the payments required by Paragraph 4 to be paid
to the Employee during the Term and to any benefits payable hereunder, the
Employee shall:

 

(i) be eligible to participate in all employee fringe benefits and any pension
and 401(k) plan that may be provided by the Company for its key executive
employees in accordance with the provisions of any such plans;

 

(ii) participate on the commencement of the Term of this Agreement at the
Company’s sole expense in medical, dental, disability, life and accidental death
and dismemberment insurance plans that may be provided by the Company for its
key executive employees in accordance with the provisions of any such plans;

 

(iii) be entitled to sick leave and sick pay in accordance with any Company
policy and practice that may be applicable to key executive employees; and

 

(iv) be eligible for participation in the Company’s Employee Stock Purchase
Plan, effective with the next available enrollment period following commencement
of this Agreement;

 

(v) The Company shall obtain for Employee a life insurance policy (and pay for
same) in the amount of One Million Dollars ($1,000,000) provided that such
annual premium is not in excess of Ten Thousand Dollars ($10,000) per year,
provided it is Employee’s responsibility to secure such life insurance policy.

 

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(c) Bonus:    Employee shall during each fiscal year of Company during which
Employee is employed hereunder, be eligible to participate in the Company’s
Annual Incentive Plan (the “AIP”). Based upon the successful completion of
stated goals as set forth by the Company in the AIP for the fiscal year in
question, employee shall be eligible to receive as a bonus up to 100% of his
Salary (it being understood that the calculation of the amount of such bonus
shall be as set forth in the AIP for such fiscal year). Company reserves the
right to amend, modify or cancel the AIP; provided that if Company does modify
the financial goals of the AIP for any Fiscal Year which were set by Company at
the commencement of such Fiscal Year, such modification will not affect the
calculation of Employee’s AIP Bonus for such Fiscal Year, if any (in other words
Employee’s AIP bonus, if any, shall be calculated pursuant to the financial
goals set at the commencement of the applicable Fiscal Year).

 

(d) Stock Options:    At the discretion of Company Board of Directors, Employee
may be awarded options to purchase shares of the Company’s common stock. Such
options will be granted in accordance with the provisions of the 1998 Stock
Option Plan (the “Plan”) of the Company. The option price will be at the closing
price of the Company’s stock on the NASDAQ SmallCap Market on the day the grant
is officially approved by the Company’s Compensation Committee. The award of any
options and the exercise of such options shall be subject to the terms placed on
such options at the time the Board makes any such award and in accordance with
the provisions of Company’s Plan, as such Plan may be amended from time to time;
provided, however, that if this Agreement is terminated pursuant to Paragraph
8(c) or 8(e)(ii), below, Employee shall have the right to exercise any options
which may be properly vested pursuant to the Stock Option Plan during the
Severance Period (as such term is defined in Paragraph 8(c), below).

 

(e) Automobile Allowance:    Company shall provide Employee with an automobile
allowance of $1,500 per month. Such allowance shall cover any leasing expenses,
gas, maintenance and insurance, all of which shall be Employee’s sole
responsibility.

 

(f) Vacation:    The Employee shall be eligible for four (4) weeks of vacation
each year (20 days). The Employee may carry over as much as ten (10) days into
his vacation bank to a maximum of ten (10) carryover days at any given time.

 

(g) Expenses:    Company will reimburse Employee for actual, ordinary and
necessary travel and accommodation costs, entertainment and other business
expenses incurred as a necessary part of discharging the Employee’s duties
hereunder, subject to receipt of reasonable and appropriate documentation as
required from time-to-time by the Company.

 

5.  OWNERSHIP OF RESULTS AND PROCEEDS OF EMPLOYMENT:    All results and proceeds
of Employee’s employment (“Work Product”) hereunder shall be considered “work
made for hire” and shall be owned exclusively throughout the world by the
Company (including all copyrights and patents therein and thereto, and all
renewals and extensions thereof) in perpetuity (except with respect to patents
or copyrights which shall be owned exclusively by Company for the duration of
any applicable patent or copyright), free of any claims whatsoever by Employee
or any other Person. Company shall have the sole and exclusive right to
copyright or patent the Work Product and documentation thereto, or other
reproductions embodying the Work Product thereof, and any other material capable
of copyright and/or patent protection created in connection with the Work
Product) in Company’s name, as the owner and author thereof, and to secure any
and all registrations, renewals and extensions of such copyrights and patents in
Company’s name or Employee’s name as permitted pursuant to applicable statute.
If Company shall be deemed not to be the owner or author of any of the
aforementioned materials, this Agreement shall constitute an irrevocable
transfer to Company of ownership of copyright and/or patent therein (and all
renewals and extensions). Employee shall, upon Company’s request, execute and
deliver to Company transfers of ownership of copyright (and all renewals and
extensions) or patent, as the case may be, in such materials and any other
documents as Company may deem necessary or appropriate to vest in Company the
rights granted to Company in this Agreement, and if Employee does not execute
any such above described transfers as required hereunder then Employee hereby
irrevocably appoints Company his attorney-in-fact for the purpose of executing
those transfers of ownership and other documents in his name.

 

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6.  CERTAIN COVENANTS OF EMPLOYEE:    Without in any way limiting or waiving any
right or remedy accorded to Company or any limitation placed upon Employee by
law, Employee agrees as follows:

 

(a) Acknowledgment:    Employee understands and agrees that Company is engaged
in the highly competitive business of computer software development; that
Company’s success is highly dependent upon the protection of Company’s trade
secrets and confidential information; that Company has invested considerable
resources of its time and money in developing its products, services, staff,
good will, procedures, clients, techniques, special training, client lists,
manuals, records, documents, and other trade secrets and confidential
information; and that upon and during employment under this agreement Company
has provided and will provide Employee access to and valuable knowledge
regarding Company’s trade secrets and confidential information, creating a
relationship of confidence and trust between Company and Employee. Employee
acknowledges and agrees that the use of such trade secrets or confidential
information, or of Employee’s expertise or leadership, for the benefit of
Company’s Competitors would be greatly harmful to Company, and that Company’s
willingness to enter into business with Employee and to provide Employee access
to its trade secrets and confidential information is conditioned upon (i) the
protection of Company’s trade secrets and confidential information for Company’s
sole and exclusive benefit, (ii) the retention of Employee’s expertise and
leadership during the Term of this Agreement for the sole and exclusive benefit
of Company, and not for any competitor, and (iii) the protection of Company
against Employee’s use for the benefit of any Competitor of the valuable skills
Employee will acquire, develop and/or refine by virtue of employment with
Company under this Agreement. Employee therefore agrees that the covenants and
confidentiality provisions set forth in this Agreement are reasonable in scope,
time, territory and type of activity and necessary for the protection of
Company’s legitimate interests, and further agrees that the knowledge of
Company’s confidential information and trade secrets to which he will gain
access by virtue of employment under this Agreement, constitute good, sufficient
and adequate consideration for the covenants and confidentiality provisions set
forth in this Agreement.

 

(b) Limited Non-Competition.    Except as provided below, Employee expressly
covenants and agrees that during the Term of this Agreement and for a period of
one (1) year following the termination of his employment with Company, for any
reason, with or without cause, Employee shall not, directly or indirectly, alone
or in concert with others, compete with Company in any manner or form, including
but not limited to serving in the capacity of employee, agent, consultant,
owner, investor, stockholder, partner, and/or independent contractor for any
Competitor, nor will Employee, except for or on behalf of Company, solicit or
attempt to solicit clients, business or patronage for the development or sale of
any product or service of Company. Employee acknowledges and agrees that the
computer software development industry in which Company is engaged is not
confined to any particular geographic market, but rather is global in geographic
scope, and that the absence of a restricted geographic scope to the limited
covenant of non-competition set forth herein is therefore reasonable and
necessary for the protection of Company’s assets, trade secrets, confidential
information, good will and other legitimate business interests. Further, the
absence of a restricted geographic scope for the limited covenant of
non-competition set forth herein shall not be invoked as or provide a defense to
the enforceability of this Agreement or any provision hereof. Notwithstanding
the foregoing to the contrary, Employee shall have the right to own as a passive
investment up to one percent (1%) of any Competitor, provided such Competitor is
a public company. Further notwithstanding the foregoing to the contrary, if this
Agreement is terminated pursuant to paragraph 8 (c), then the first sentence of
this paragraph 6(b) shall not apply to such termination.

 

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(c) Limited Non-Solicitation of Company Clients.    Except as provided below,
Employee expressly covenants and agrees that for the one (1) year period
following the termination of his employment with Company, for any reason, with
or without cause, Employee shall not, directly or indirectly alone or in concert
with others, solicit or induce, or attempt to solicit or induce any Company
Client, or any former Company Client who, in the twelve (12) month period prior
to the effective date of such termination was an Company Client, to obtain or
secure computer software or its development from or through a Competitor.
Further notwithstanding the foregoing to the contrary, if this Agreement is
terminated pursuant to paragraph 8 (c), then the first sentence of this
paragraph 6(c) shall not apply to such termination.

 

(d) Limited Non-Solicitation of Company Employees.    Employee expressly
covenants and agrees that for the one (1) year period following the termination
of his employment with Company, for any reason, with or without cause, Employee
shall not, directly or indirectly, alone or in concert with others, recruit,
solicit or induce, or attempt to recruit, solicit or induce any employee,
officer, consultant, representative, independent contractor or advisor of
Company to terminate, alter, or modify their employment or relationship with
Company.

 

(e) Proprietary Information:

 

(i) Employee further acknowledges and agrees that the success of the Company
depends, among other things, upon maintaining strict secrecy with respect to its
trade secrets and confidential information relating to the design, development
and marketing of its products and services, including without limitation
“know-how” trade secrets, details of supplier’s, manufacturer’s, Employee’s,
employee or distributor’s contracts, pricing policies, financial data,
operational methods, marketing and sales information or strategies, product
development techniques or plans, or any strategies relating thereto, technical
processes, designs and design projects, and other proprietary information of the
Company or any parent, subsidiary or affiliate of Company (hereinafter
individually referred to as a “Protected Company”) and to which trade secrets
and confidential information Employee may acquire knowledge of or have access to
during the course of his employment by the Company. Such trade secrets and
confidential information as described above are hereinafter referred to as
“Proprietary Information”. For the purpose of this Agreement, Proprietary
Information also includes, without limitation, any and all information not
lawfully and generally available to the public concerning the Company, and any
Protected Company or any of its respective products, services, clients, affairs,
personnel or suppliers. In addition, in the course of its business, the Company
may receive confidential disclosures of the trade secrets and confidential
information of other persons and entities. In such event, when instructed by the
Company, Employee shall receive and treat the trade secrets and confidential
information of such other persons and entities with the same obligation and
degree of care as Employee treats the Proprietary Information of the Company.

 

(ii) Employee shall use his best efforts to exercise utmost diligence, as an
individual as well as part of a working group, to protect and guard the
Proprietary Information of the Company and any Protected Company. Employee
agrees not to disclose to any Person not employed by the Company or not engaged
to render services to a Protected Company either during or after his employment,
nor to use, for himself or another, during or after his employment, without the
Company’s written consent, any Proprietary Information obtained by him during
his employment, whether developed by him or not, and Employee agrees to hold all
Proprietary Information in strict confidence; provided, however, that this
provision shall not preclude the Employee from making, upon advice of counsel,
any disclosure required by any applicable law or using or disclosing information
known generally to the public (other than information known generally to the
public as a result of any violation of this Paragraph 6(e) by or on behalf of
the Employee).

 

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(iii) Proprietary Information shall at all times, both during the term of this
Agreement and at all times thereafter, be and remain the property of Company for
its sole and exclusive use and benefit, and Employee shall deliver all documents
containing or reflecting such information to Company at any time upon request of
Company, and in any event shall deliver all such documents to Company upon the
termination of his employment regardless of whether or not expressly requested
to do so at the time employment pursuant to this Agreement ceases. Upon leaving
the employment of the Company, Employee shall not take with him any of the
Company’s Proprietary Information.

 

(f) Breach of Covenants.    Employee acknowledges and agrees that the services
to be rendered by him hereunder are of a special, unique, extraordinary and
intellectual character which gives them peculiar value. In the event of any
breach of any covenant or promise set forth herein, Employee agrees that Company
shall be entitled to seek judicial remedies in any appropriate court for the
redress of such breach, including, without limitation, the right to seek
injunctive relief. Employee further acknowledges that it will be difficult, if
not impossible, to measure in money the damage that will be suffered by the
Company in the event that Employee fails to comply with the covenants and
restrictions set forth in this Section 6 and that in such event the Company will
not have an adequate remedy at law. Therefore, Employee agrees that the Company
in such event shall be entitled to injunctive relief, both temporary and
permanent, to enforce such covenants or restrictions, or any of them, in any
court having jurisdiction thereof, in addition to such other equitable and legal
remedies which may be available to it, and in the event that any action or
actions should be instituted in equity to enforce any restriction or covenant
hereunder, no party will raise the defense that there in an adequate remedy at
law.

 

7.  RIGHTS AND REMEDIES UPON BREACH:    If Employee breaches any of the
provisions of the Restrictive Covenants, Company shall have the following rights
and remedies, each of which rights and remedies shall be independent of the
other and severally enforceable:

 

(a) Specific Performance:    The right and remedy to have the Restrictive
Covenants specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company.

 

(b) Severability of Covenants:    If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants shall not thereby be affected and shall
be given full effect, without regard to the invalid portions.

 

(c) Blue-Penciling:    If any court construes any of the Restrictive Covenants,
or any part thereof, to be unenforceable because of the duration or geographical
scope of such provision, such court shall have the power to reduce the duration
or scope of such provision and, in its reduced form, such provision shall then
be enforceable.

 

(d) No Waiver, Cumulative Remedies:    The failure of any party to this
Agreement to seek redress for a violation of or to insist upon the strict
performance of any covenant or condition of this Agreement shall not prevent a
subsequent act, which would have originally constituted a violation, from having
the effect of an original violation. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive the right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights or remedies the
parties may have by law, statute, ordinance or otherwise.

 

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8.  TERMINATION/SUSPENSION/CHANGE OF CONTROL:

 

(a) Termination Upon Death or Disability:

 

(i) If during the Term of this Agreement Employee should die, then this
Agreement shall be deemed to have automatically terminated as of the date of
Employee’s death. Employee’s estate shall be entitled to (I) any earned and
accrued but unpaid Salary and earned and accrued by unpaid vacation pay accrued
prior to the date of such death and (2) a prorated AIP bonus (prorated based on
the number of months expired from the commencement of the Fiscal Year in which
Employee is terminated until the date of such termination), if any, pursuant to
the AIP (or any successor plan, if any,) which would otherwise have been payable
to Employee for the Fiscal Year in which Employee dies (such amount, if any,
shall be payable to Employee when such AIP bonuses are otherwise payable for
such fiscal year), but no later than 120 days following the expiration of the
Fiscal Year in which Employee dies.

 

(ii) If during the Term of this Agreement Employee becomes Disabled (as such
term is defined below) and such disability has lasted for a period of 180 days
in any consecutive 12 month period and no reasonable accommodation (as such term
is defined in the Americans With Disabilities Act) is available or can be
furnished, then following such period Company shall have the right to terminate
this Agreement or suspend the Term at Company’s election. In the event the
Company elects to terminate this Agreement pursuant to this Paragraph 8 (a)
(ii), then the Employee shall be entitled to receive from the Company all the
amounts and benefits payable or provided to the Employee under Paragraph 8 (c).
In the event Company elects to suspend the Term hereof and Company’s obligations
hereunder, then such suspension shall be for the duration of such disability and
the Term shall be automatically extended by a number of days equal to the total
number of days of the suspension, or such fewer number of days of which Company
may advise Employee in writing. Employee may only return to work following such
disability upon submission to Company of a certificate from the physician
selected by the Company as aforesaid certifying that Employee is able to return
to work. No suspension shall in any manner suspend or otherwise impair Company’s
rights under this Agreement. During the period that Employee is Disabled and
prior to any Termination or suspension by Company, Employee shall retain his
status and continue to receive his full compensation (Salary plus prorated AIP).
As used in this Agreement, the term “Disabled” shall mean Employee’s inability
to substantially perform his duties and responsibilities under this Agreement by
reason of a non-intentionally self-inflicted medical disability, including
mental or physical illness, as certified by a physician appointed by the
Company.

 

(b) Termination for Cause:    Company shall have the right to terminate
Employee’s employment pursuant to this Agreement for Cause. “Cause” for
termination means (i) any act of fraud, embezzlement, or other misappropriation
or any other act or omission by Employee that amounts to a willful breach of
Employee’s fiduciary duty to Company or its direct or indirect clients, (ii)
Employee’s conviction of a felony or any crime involving moral turpitude under
state or federal law, or the equivalent under foreign law, (iii) Employee’s
material breach of any rules or regulations of employment, or any policies
related thereto, which may be adopted or amended from time to time by Company of
which Employee has been given written notice and which are consistent with this
Agreement, (iv) Employee’s refusal to perform satisfactorily Employee’s duties
and obligations under this Agreement, (v) any other acts or omissions by
Employee constituting neglect or dereliction of Employee’s duties hereunder,
(vi) Employee’s willful refusal to carry out the reasonable instructions of the
Board, or the Chief Executive Officer or such other person as either the Board
or Chief Executive Officer have determined, (vii) the happening of any event
which, under the provisions of any federal, state or foreign laws applicable to
Company or its activities, disqualifies Employee from acting in any capacity
provided for herein, including, without limitation, any event which disqualifies
Employee under the Securities Act of 1933 or the Securities Exchange Act of
1934, or (viii) Employee’s default of any material obligations under this
Agreement (other than those specified in clauses (i) through (vi) above);
provided however, that the Company shall have given Employee written notice
specifying any event or breach specified in clauses (iii) through (vi) and
(viii) above and permitted Employee to cure any such breach within the period of
20 days after receipt of such notice if such breach is capable of being cured
and Employee has failed to cure such breach within such 20 days; provided,
further, however that the Company shall not be obligated to provide Employee
with notice and opportunity to cure more than one event or breach under each of
clauses (iii) through (vi)and (viii) above. If Employee’s employment is
terminated by Company for Cause, Company’s obligations to Employee shall
terminate immediately; provided that Company shall pay to Employee any unpaid
salary and earned but unpaid vacation and AIP bonuses accrued prior to such
termination and reimburse Employee for any approved business expenses incurred
by Employee prior to such termination.

 

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(c) Termination Without Cause by Company or for Cause by Employee:    If the
Company terminates this Employment Agreement without cause by written notice to
the Employee, or if Employee’s employment hereunder is terminated by Employee
pursuant to Paragraph 8(e) hereunder, the Employee shall be entitled to receive
from the Company, (i) any unpaid Salary, unpaid vacation pay, unreimbursed
business expenses and any other monies payable to the Employee under any
employee benefit plan, in each case earned through the date of the Employee’s
termination; (ii) from and after the effective date specified in the Company’s
notice of termination and for a period of twelve (12) months thereafter (the
“Severance Period”), the Salary (it being understood, for the avoidance of
doubt, that Employee shall not be entitled to receive any bonuses of any type
during the Severance Period) except with respect to any earned and accrued but
unpaid AIP, as set forth in item (iv) below; (iii) continued coverage under
Company’s then available medical, dental, life and disability benefits for the
12-month period commencing with Employee’s termination of employment; (iv)
Employee shall be entitled to a prorated bonus (prorated based on the number of
months expired from the commencement of the Fiscal Year in which Employee is
terminated until the date of such termination), if any, pursuant to the AIP (or
any successor plan, if any,) which would otherwise have been payable to Employee
for the Fiscal Year in which Employee is terminated hereunder (such amount, if
any, shall be payable to Employee when such AIP bonuses are otherwise payable
for such fiscal year), but no later than 120 days following the expiration of
the Fiscal Year in which Employee is terminated, and (v) notwithstanding
anything to the contrary contained in the Stock Option Plan (as defined in
Paragraph 4(d) hereinabove), all options previously granted to Employee shall
become immediately vested and exercisable in full for a period of 180 days from
Employee’s termination. If the Employee should die at any time after the
termination of this Employment Agreement pursuant to this Paragraph 8(c), the
amounts or benefits payable or provided to the Employee under this Paragraph
8(c) shall continue to be paid to the Employee’s estate or designated
beneficiary in accordance with the provisions of Paragraph 8(a); provided,
further, that any payments made to the Employee pursuant to this Paragraph 8(c)
shall be offset by any compensation that the Employee may receive from
employment during the Severance Period. Fiscal Year as used in this Agreement
means the fiscal year of Company.

 

(d) Designation of Beneficiary:    The parties hereto agree that the Employee
shall designate, by written notice to the Company, a beneficiary to receive the
payments described in Paragraph 4 in the event of his death. The designation of
any such beneficiary may be changed by the Employee from time to time by written
notice to the Company. In the event the Employee fails to designate a
beneficiary as herein provided, any payments which are otherwise to be made to a
designated beneficiary under Paragraph 4 shall be made to the Employee’s estate.

 

(e) Termination by Employee for Cause/Change in Control:    If, during
Employee’s employment, (i) Company shall materially breach a material term of
this agreement or (ii) there shall occur a “Change in Control” (as defined
below) of Company and, within one year thereafter, there shall occur a change in
Employee’s “Circumstances of Employment” (as defined below), then Employee may
terminate his employment pursuant to this Agreement by written notice to Company
and Employee shall be entitled to receive the benefits provided in paragraph
8(c)(i) through (v) above; provided, however, that Employee shall first have
given Company written notice specifying the specific nature of such breach or
such change in Employee’s Circumstances of Employment as case may be, and
Company has not cured any such breach or Change in Circumstances within the
period of 20 days after receipt of such aforementioned notice.

 

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(i) A “Change in Control” shall be deemed to occur upon (a) the sale by Company
of all or substantially all of its assets to any person (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), the
consolidation of Company with any person, or the merger of Company with any
person as a result of which merger Company is not the surviving entity as a
publicly held corporation, or (b) the sale or transfer or issuance of shares of
Common Stock by Company and/or any one or more of its stockholders (other than
Gregory E. Fischbach or James R. Scoroposki), as the case may be, in one or more
transactions, related or unrelated, to one or more persons as a result of which
any person and its “affiliates” (as hereinafter defined), other than Gregory E.
Fischbach or James R. Scoroposki, shall own more than 35% of the outstanding
Common Stock, unless such sale or transfer has been approved in advance by the
Board. An “affiliate” shall mean any person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, any other person.

 

(ii) Employee’s “Circumstances of Employment” shall be deemed to have changed if
there shall have occurred any of the following events: (A) a material reduction
or change in Employee’s duties or reporting responsibilities; (B) a material
breach by Company of any provision of this Agreement; (C) a material reduction
in the fringe benefits made available by Company to Employee, unless such
reduction is also applicable to all senior executive officers of Company
generally; (D) a material diminution in Employee’s status, working conditions or
economic benefits; or (E) a reduction in Employee’s Salary or AIP.

 

9.  EMPLOYEE’S REPRESENTATIONS, WARRANTIES AND INDEMNITIES:

 

(a) Right to Enter Into Agreement:    Employee has the right and is free to
execute this Agreement, to grant the rights granted by him to the Company
hereunder, and to perform each and every term and provision hereof.

 

(b) Breach Under Other Agreement or Arrangement:    Neither the execution and
delivery of this Agreement nor the performance by Employee of any of his
obligations hereunder will constitute a violation, breach, or default under, any
agreement, arrangement or understanding, or any other restriction of any kind,
to which Employee is a party or by which Employee is bound.

 

(c) Services Rendered Deemed Special, Etc.:    Employee acknowledges and agrees
that the services to be rendered by him hereunder are of a special, unique,
extraordinary and intellectual character which gives them peculiar value, the
loss of which cannot be adequately compensated for in an action at law and that
a breach of any term, condition or covenant hereof will cause irreparable harm
and injury to Company and in addition to any other available remedy Company will
be entitled to seek injunctive relief.

 

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(d) Indemnity:    Employee agrees and does hereby indemnify save and hold
Company harmless from and against any and all damages, liabilities, costs,
losses and expenses (including legal costs and reasonable attorney’s fees)
arising out of or in connection with any claim, demand or action by a third
party which is inconsistent with any of the warranties, representations or
agreements made by Employee in this contract. Employee agrees to reimburse
Company, within ten (10) business days after demand is made by the Company, for
any payment made by Company at any time with respect to any such demand,
liability, costs, loss or expense to which the foregoing indemnity applies;
provided, such payment arises from a final judgment or arbitration or a
settlement made with Employee’s prior consent, which consent Employee shall not
unreasonably withhold. Company shall notify Employee in writing of any such
claim, demand or action promptly after Company has been formally advised thereof
and Employee shall have the right, at his expense to participate in the defense
thereof with counsel of his choice. Notwithstanding the foregoing to the
contrary, Employee shall not be liable to indemnify Company as provided above to
the extent that any above referenced claim is covered by any insurance policies
Company may elect to maintain generally for the benefit of officers or in
connection with any proceeding to which Employee (or Employee’s legal
representatives or other successors) may be made a party by reason of Employee’s
being or having been an officer or Employee of Company and its subsidiaries and
affiliates including, without limitation, any joint venture or partnership in
which Company or any of its subsidiaries has an interest as long such actions
were within the scope of Employees duties hereunder.

 

10.  NOTICES:    Any notice, consent or other communication under this Agreement
(hereinafter “Notice”) shall be in writing and shall be delivered personally,
sent by facsimile transmission (and confirmed in writing) or overnight courier
(regularly providing proof of delivery) or sent by registered, certified, or
express mail and shall be deemed given when so delivered personally, sent by
facsimile transmission and confirmed in any other manner permitted in this
Paragraph 10 or overnight courier, or if mailed two (2) days after the date of
deposit in the United States mail as provided herein. Notices shall be addressed
to Employee at 135 Meadowview Drive, Trumbull, Connecticut 06611-1925, with
copies to: Mark G. Sklarz, Cummings & Lockwood, 700 State Street, New Haven,
Connecticut 06511. Notices shall be addressed to Company at One Acclaim Plaza,
Glen Cove, New York 11542, Attention: Chief Executive Officer, and to Fischbach,
Perlstein & Lieberman, LLP, 1875 Century Park East, Suite 850, Los Angeles, CA
90067, Attention: Bernard J. Fischbach, Esq. Either party may change its address
for Notices hereunder by notice to the other party in accordance with this
Paragraph 10.

 

11.  ASSIGNMENT:    Subject to paragraph 8(e), Company shall have the right, at
its election, to assign any of its rights or obligations hereunder, in whole or
in part to any parent, subsidiary, affiliated, or related company, or to any
person, firm, or corporation owning or acquiring a substantial portion of
Company’s or Company’s stock or assets, and, to the extent of such assignment,
Company and/or Company shall thereafter be relieved of their obligations
hereunder. Employee shall not have the right to assign any of his rights or
obligations hereunder, except for family gifts or transfers of compensation
payable under paragraph 4 to heirs, beneficiaries, or otherwise by operation of
law, in accordance with Company’s policies, practices and procedures.

 

12.  FURTHER INSTRUMENTS:    Employee shall furnish Company with any further
instruments, in such form and substance as shall be approved or designated by
Company, which Company may reasonably require or deem necessary, from time to
time, in its discretion, to evidence, establish, protect, enforce, defend or
secure to Company any or all of its rights, titles, properties or interests or
more fully to effectuate or carry out the purposes, provisions or intent of this
Agreement. In this connection, Employee hereby irrevocably constitutes and
appoints Company as its lawful attorney-in-fact to execute, acknowledge and
deliver all such further instruments and to do all acts and things contemplated
by this paragraph.

 

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13.  COMPLETE AGREEMENT; MODIFICATION AND TERMINATION:    This Agreement
contains the entire agreement between the parties with respect to Employee’s
employment by Company, superseding all existing agreements between them
concerning Employee’s employment. This Agreement may not be amended, modified,
superseded, canceled, or waived except by a written instrument signed by the
party to be charged. The headings in this Agreement are solely for the
convenience of reference and shall not affect its interpretation.

 

14.  COMPANY INDEMNITY:    Company shall indemnify Employee (and Employee’s
legal representatives or other successors) to the fullest extent permitted by
the laws of the State of Delaware and its existing certificate of incorporation
and by-laws, and Employee shall be entitled to the protection of any insurance
policies Company may elect to maintain generally for the benefit of officers,
against all costs, charges and expenses whatsoever incurred or sustained by
Employee (or Employee’s legal representatives or other successors) in connection
with any action, suit or proceeding to which Employee (or Employee’s legal
representatives or other successors) may be made a party by reason of Employee’s
being or having been an officer or Employee of Company and its subsidiaries and
affiliates including, without limitation, any joint venture or partnership in
which Company or any of its subsidiaries has an interest.

 

15.  GOVERNING LAW:    Subject to paragraph 14, this Agreement shall interpreted
with, and governed by, the laws of the State of New York, without regard to
conflicts of law doctrines. Any claim, dispute or disagreement in respect of
this Agreement may be brought only in the courts of the State of New York, in
Nassau County or the federal courts within the State of New York and in Nassau
County, which courts shall have exclusive jurisdiction thereof. Any process in
any action or proceeding commenced in such courts may, among other methods, be
served upon the parties hereto, as applicable, by delivering or mailing the
same, via registered or certified mail, return receipt requested, addressed to
Company or Employee, as applicable, at the addresses set forth or designated
pursuant to paragraph 10, above. Any such service by delivery or mail shall be
deemed to have the same force and effect as personal service within the State of
New York.

 

16.  2000 EMPLOYMENT AGREEMENT:    The 2000 Employment Agreement is terminated
effective as of the execution of this Agreement.

 

WHEREFORE, the parties hereto have executed this Agreement as of the day and
year first above written.

 

ACCLAIM ENTERTAINMENT, INC.

 

By: Rodney P. Cousens

Its: Chief Executive Officer

 

/s/ Gerard F. Agoglia    

GERARD F. AGOGLIA

 

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