other party with written notice of non-renewal at least 60 days prior to the date the Agreement and Contract Employment Period would otherwise automatically renew. Notwithstanding the foregoing,you understand that the employment relationship is “at will” in accordance with California law, and that either side may terminate the employment relationship at any time with or without cause, and with or without notice. However, if theCompany terminates your employment during the Contract Employment Period for any reason other than for cause or reasons enumerated under Section 6.4, or if you resign for Good Reason during the Contract Employment Period, under Section 6.5, then youshall be entitled to a severance payment of one full year of regular base pay, in addition to any other severance benefits that may be negotiated between you and the Company. The Company’s payment of any severance compensation is conditionedupon execution of the Release Agreement attached hereto as Exhibit B.  **2.  Compensation and Benefits.** **2.1****  Base Salary.**    For services renderedhereunder, you shall receive an annualized base salary of one hundred sixty thousand dollars ($160,000), less standard withholdings and deductions, payable in accordance with the Company’s standard payroll procedures. You will be considered forannual changes in base salary in accordance with Company policy and subject to review and approval by the GTR Board of Directors (“GTR Board.”)  **2.2****  Bonuses.**    You shall be eligible to receive bonuses as determined by the GTR Board, in consultation withyou and the President according to the terms of any Company executive bonus plans that may be in effect from time to time.**** **2.3****  Stock Options.**    You shall be entitled to participate in the stock option plan managed and controlled by the GTR Board. The terms and conditions of thePlan for vesting and exercising shares shall continue to govern. Both the Plan and the written Option Agreement, pursuant to the Plan, are attached hereto and incorporated herein by reference.  In the event the terms of the Plan and this Agreement conflict, the provisions of this Agreement shall control.  **2.4****  Standard Company Benefits for Executives.**    You shall be entitled to allrights and benefits for which you are eligible under the terms and conditions of the standard Company benefits and compensation plans which may be in effect from time to time and provided by the Company to its executive level employees generally.You shall receive 4 weeks of Paid Time Off (“PTO”) per year and such PTO shall be governed by the Company’s policies on PTO, in effect from time to time.  **2.5****  Business Expense Reimbursement.**    The Company shall reimburse you for all reasonable travel, entertainmentor other out-of-pocket expenses incurred by you in furtherance of or in connection with the performance of your duties hereunder, in accordance with the Company’s written expense reimbursement policies in effect from time to time. 2 
 **2.6****  Indemnification.**    You shall receive indemnification as a corporate officer of the Company to the maximum extent extended to the other executive officers of the Company. If sorequested by the Board, you will be required to enter into the Company’s standard form of Indemnification Agreement, pursuant to which the Company agrees to advance any expenses for which indemnification is available to the extent allowed byapplicable law.**** **3.  Proprietary Information Obligations.** **3.1****  Proprietary Information Agreement.**    You agree to execute and abide bythe Employee Proprietary Information and Inventions Agreement, attached hereto as Exhibit A.  **3.2****  Remedies.**    Your duties under the Employee Proprietary Information and Inventions Agreement shall survive termination of your employment with the Company. You acknowledge that aremedy at law for any breach or threatened breach by you of the provisions of the Employee Proprietary Information and Inventions Agreement would be inadequate and you therefore agree that the Company shall be entitled to injunctive relief in caseof any such breach or threatened breach.  **4.  Outside Activities.** **4.1**  **Activities.**    Except with the prior written consent of the GTR Board,you will not during your employment with the Company undertake or engage in any other employment, occupation or business enterprise, other than ones in which you are a passive investor. You may accept speaking or presentation engagements in exchangefor honoraria and may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of your duties hereunder.  **4.2**  **Investments and Interests.**    Except as permitted by Section 4.3, you agree not to acquire, assume orparticipate in, directly or indirectly, any position, investment or interest known by you to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise.  **4.3**  **Non-Competition.**    During your employment by the Company, and for one year from termination, you will notdirectly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any businessconnection with any other person, corporation, firm, partnership or other entity whatsoever known by you to compete directly with the Company, anywhere in the world, in any line of business engaged in (or in which the Company plans to be engaged andyou are aware of such plans as of the date your employment with the Company terminates) by the Company; provided, however, that anything above to the contrary notwithstanding, you may own, as a passive investor, securities of any competitorcorporation, so long as your direct holdings in any one such corporation shall not in the aggregate constitute more than one percent (1%) of the voting stock of such corporation. 3 
 **5.  Other Agreements.** You represent and warrant that your employment by the Company will not conflict with and will not be constrained by any prior agreement orrelationship with any third party. You represent and warrant that you will not disclose to the Company or use on behalf of the Company any confidential information governed by any agreement with any third party except in accordance with an agreementbetween the Company and any such third party. During your employment by the Company, you may use, in the performance of your duties, all information generally known and used by persons with training and experience comparable to your own and allinformation which is common knowledge in the industry or otherwise legally in the public domain.  **6.  Termination of Employment.** **6.1**  **At-WillEmployment.**    Your relationship with the Company is at-will. Both you and the Company shall have the right to terminate your employment with the Company at any time with or without Cause and with or without notice, providedthat you may be removed from any position you hold as a member of the Company’s Board only in the manner provided by the Bylaws of the Company and applicable law.  **6.2****  Termination by Company for Cause.**    If the Company terminates your employment at any time for Cause (asdefined below), your salary shall cease on the date of termination and you shall not be entitled to severance pay, pay in lieu of notice or any other such compensation other than payment of accrued salary and vacation and such other benefits asexpressly required in such event by applicable law or the terms of applicable benefit plans. All stock options and any unvested stock awards issued to you shall be controlled by the terms of the Plan.  **(a)**  **Definition.**    For purposes of this Agreement, “Cause” shallmean the occurrence of one or more of the following: (i) your unauthorized use or disclosure of confidential information or trade secrets of the Company, which use or disclosure causes material harm to the Company; (ii) your conviction of, or yourplea of “guilty” or “no contest” to, a felony under the laws of the United States, or any state thereunder; (iii) gross negligence in the performance of your duties to the Company, willful or habitual neglect of your duties orviolation of Company policy, which is not cured by you within fourteen (14) days of receiving written notice of such breach from the Board; (iv) a willful act by you which constitutes gross misconduct and which causes material injury to the Company,which is not cured by you within fourteen (14) days of receiving written notice of such breach from the Board; or, (v) your material breach of the Employee Proprietary Information and Inventions Agreement attached hereto. Your physical or mentaldisability or death shall not constitute Cause hereunder. For purposes hereof, “gross negligence” in the performance of your duties to the Company shall only include such gross negligence which has resulted or is likely to result insubstantial and material damage to the Company.  **6.3****  Your VoluntaryResignation.**    You may voluntarily terminate your employment with the Company at any time with or without notice, and with or without 4 
Good Reason (as defined in Section 6.6 below). In the event that you voluntarily terminate your employment other than for Good Reason, you will not be entitled to severance pay, pay in lieu ofnotice or any other such compensation other than payment of accrued salary and vacation and such other benefits as expressly required in such event by applicable law or the terms of applicable benefit plans. All stock options and any unvested stockawards issued to you shall be controlled by the terms of the Plan.  **6.4****  Termination for Death or Disability**.    Your employment with the Company will be terminated in the event of your death, or any illness, disability or other incapacity that renders youphysically or mentally unable regularly to perform your duties hereunder for a period in excess of one hundred twenty (120) consecutive days or more than one hundred eighty (180) days in any consecutive twelve (12) month period. The determinationregarding whether you are physically or mentally unable regularly to perform your duties shall be made by the Board. Your inability to be physically present on the Company’s premises shall not constitute a presumption that you are unable toperform such duties. In the event that your employment with the Company is terminated for death or disability as described in this Section 6.4, you or your heirs, successors, and assigns shall not receive any compensation or benefits other thanpayment of accrued salary and vacation and such other benefits as expressly required in such event by applicable law or the terms of applicable benefit plans. All stock options and any unvested stock awards issued to you shall be controlled by theterms of the Plan.  **6.5****  Your Resignation for GoodReason.**    You may resign your employment for Good Reason so long as you tender your resignation to the Company within sixty (60) days after the occurrence of the event which forms the basis for your termination for GoodReason.  For purposes of this Agreement, “Good Reason” shall mean any one of the following events whichoccurs on or after the commencement of your employment without your consent: (i) any reduction of your then existing annual base salary by more than ten percent (10%) unless comparable reductions are made for all other executive officers of theCompany; (ii) any material reduction in the package of benefits and incentives, taken as a whole, provided to you (except that employee contributions may be raised to the extent of any cost increases imposed by third parties) or any action by theCompany which would materially and adversely affect your participation or reduce your benefits under any such plans, except to the extent that such benefits and incentives of all other executive officers of the Company are similarly reduced; (iii)any material diminution of your duties, responsibilities, authority, reporting structure, excluding for this purpose an isolated or inadvertent action not taken in bad faith which is remedied by the Company immediately after notice thereof is givenby you; (iv) any request that you relocate to a work site that would increase your one-way commute distance by more than fifty (50) miles from your then principal residence, unless you accept such relocation opportunity; (v) following a Change inControl, as defined in Section 7.1; or (v) any material breach by the Company of its obligations under this Agreement that is not remedied by Company within thirty (30) days of written notice of such breach from you. 5 
 **7.  Change in Control.** **7.1****  Change In Control Definition.**    For purposes of this Agreement, Changein Control shall mean any of the following: (i) any consolidation or merger of the Company or GTR with or into any other corporation or other entity or person, or any other corporate reorganization in which the stockholders of the Company or GTRimmediately prior to such consolidation, merger or reorganization by reason of the securities in the Company or GTR owned by them prior to same, own less than fifty percent (50%) of the Company’s or GTR’s voting power immediately aftersuch consolidation, merger or reorganization, or any transaction or series of related transactions in which in excess of fifty percent (50%) of the Company’s or GTR’s voting power is transferred; or (ii) a sale, lease or other dispositionof all or substantially all of the assets of the Company or the assets of GTR.  **8.****  Release.**    Upon your termination of employment, you shall enter into and execute a release substantially in the form attached hereto as Exhibit B (the “Release”), as acondition of your receipt of any severance benefits (including, without limitation, any cash severance payment or accelerated vesting of shares) provided under this Agreement. Additionally, unless the Release is executed by you and becomes fullyeffective under the terms set forth in the Release, any acceleration of your stock awards as provided under this Agreement shall not apply and your stock awards in such event may be exercised following the date of your termination only to the extentprovided under the Plan.  **9.****  Dispute Resolution.**    If a disputearises between the parties, the parties agree to use the following dispute resolution procedure:  **9.1****  Meet and Confer.**    A meeting shall be held promptly between the parties, attended by individuals with decision-making authority regarding the dispute, to attempt, in good faith, tonegotiate a resolution of the dispute.  **9.2****  Mediation.**    If within 15 days after such meeting, the parties have not succeeded in negotiating a resolution of the dispute, they agree to submit the dispute to mediation in SanDiego, California, under the auspices of, and in accordance with the rules of, JAMS/Endispute (“JAMS”). The parties will jointly appoint a mutually acceptable mediator, seeking assistance in such regard from JAMS if they are unable toagree upon such appointment. The cost of the mediator and any administrative fee shall be shared equally by the parties. The parties agree to participate in good faith in the mediation and negotiations related thereto for a period of not less than15 days. If the parties are not successful in resolving the dispute through mediation, then the parties agree that the dispute shall be decided by arbitration as provided below.  **9.3****  Arbitration.**    If the parties have been unable to resolve their dispute through mediation, as providedabove, any remaining controversy or claim arising out of, or relating to, the employment relationship or subject matter of this Agreement, or the making, performance or interpretation hereof, shall be decided by binding arbitration in San Diego,California. The arbitration shall be conducted under the auspices of, and in accordance with the rules of JAMS, by a neutral arbitrator who is mutually agreeable to the 6 
parties hereto, or appointed by JAMS if the parties cannot agree. There will be only one arbitrator appointed. The cost of the arbitrator and any administrative fees shall be shared equally bythe parties. The arbitrator may award damages as well as equitable and declaratory relief. The arbitration award shall be final and conclusive upon the parties and a judgment or decree upon the award may be entered in any court having jurisdictionover the subject matter of the controversy.  **9.4****  Provisional Remedies andInjunctive Relief.**    Notwithstanding the agreement to submit disputes to negotiation, mediation and arbitration, as provided above, either party may seek from a court of competent jurisdiction any provisional or interimrelief that is necessary to protect the rights or property of that party. Such provisional or interim relief may include, without limitation, restraining orders and other injunctive relief necessary to preserve the status quo based on claims forunfair competition and/or misappropriation of trade secrets and/or solicitation, as referenced in Exhibit A attached hereto.  **Notice: by initialing in the space below, you are agreeing to have any dispute arising out of the matters included in the “Arbitration” provision decided by neutral arbitration as provided by law and you are giving upany rights you might possess to have the dispute litigated in a court or jury trial. By initialing in the space below, you are giving up your judicial rights to discovery and appeal. If you refuse to submit to arbitration after agreeing to thisprovision, you may be compelled to arbitrate under the authority of the California Code of Civil Procedure. Your agreement to this arbitration provision is voluntary.** **WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION” PROVISION, WHICH INCLUDE ANYCLAIMS FOR WRONGFUL TERMINATION, DISCRIMINATION OR HARASSMENT, TO NEUTRAL BINDING ARBITRATION. BY PLACING THEIR INITIALS HERE, THE PARTIES AGREE TO BINDING ARBITRATION IN ACCORDANCE WITH THE FOREGOING PROVISION.** **Company:      DR            ** **Employee:      AS            ** **10.  General Provisions.** **10.1****  Severability.**    Whenever possible, each provision of this Agreementwill be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, suchinvalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but such invalid, illegal or unenforceable provision will be reformed, construed and enforced in such jurisdiction so as to render it valid,legal, and enforceable consistent with the intent of the parties insofar as possible. 7 
 **10.2****  EntireAgreement.**    This Agreement, together with the Employee Proprietary Information and Inventions Agreement, and any stock option or stock award agreements which may be entered into now or in the future between you and theCompany, constitutes the entire agreement between you and the Company and it supersedes any prior agreement, promise, representation, or statement written or otherwise between you and the Company with regard to this subject matter. It is enteredinto without reliance on any promise, representation, statement or agreement other than those expressly contained or incorporated herein, and it cannot be modified or amended except in a writing signed by you and a duly authorized officer of theCompany.  **10.3****  Successors and Assigns.**    ThisAgreement is intended to bind and inure to the benefit of and be enforceable by you, the Company and you and their respective successors, assigns, heirs, executors and administrators, except that you may not assign any of your duties hereunder andyou may not assign any of your rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.  **10.4****  Governing Law.**    All questions concerning the performance, construction, validity and interpretation of this Agreement shall be governed by the law ofthe State of California, without regard to its conflicts of law doctrine, as applied to contracts made and to be performed entirely within California.  **10.5****  Notices.**    Any notice required or permitted under this Agreement shall be given in writing and shall bedeemed to have been effectively made or given if personally delivered, or if sent by facsimile, or mailed to the other party at its address set forth below, or at such other address as such party may designate by written notice to the other partyhereto. Any effective notice hereunder shall be deemed given on the date personally delivered or on the date sent by facsimile or two business days after deposited in the United States mail (sent by Certified Mail, Return Receipt Requested), as thecase may be, at the following address.  If to Company:  If to Employee:    Board of Directors   Mad Catz, Inc.  Andrew C. Schmidt7480 Mission Valley Road  1271 Santa Luisa DriveSuite 101  Solana Beach, CA 92075San Diego, California 92108           With a copy to:      Mad Catz’ legal department 7480Mission Valley Road, Suite 101, San Diego, California 92108. 8 
 To indicate your acceptance of the Company’s offer of continued employmenton these terms, please sign and date this Agreement in the space provided below and return it to me.   Sincerely, /s/    DARRENRICHARDSON        **Darren Richardson****Forthe Company**      ACCEPTED AND AGREED:    /s/    ANDREW C. SCHMIDT        **Andrew C. Schmidt**  July 1,2001 Date 9 
 **EXHIBIT A** **EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT** In consideration this employment agreement, employee’s continued employment with the company and other good and valuable consideration, the receipt of which is hereby acknowledged by Mad Catz Inc., and Andrew C. Schmidt(collectively, the “Parties), the Parties hereby agree that that Agreement entitled AGREEMENT RELATING TO EMPLOYEE CONFIDENTIALITY, NON-DISCLOSURE AND ASSIGNMENT OF INVENTIONS, PATENTS, IDEAS AND DISCOVERIES and attached hereto as Exhibit A ishereby made part of this employment agreement. 
 **EXHIBIT B** **RELEASE AGREEMENT** I understand thatmy position with GTR/Mad Catz (the “Company”) terminated effective             ,              (the “SeparationDate”). The Company has agreed that if I choose to sign this Release, the Company will pay me certain severance benefits pursuant to the terms of the Employment Agreement (the “Agreement”) between myself and the Company, and anyagreements incorporated therein by reference. I understand that I am not entitled to such benefits unless I sign this Release and it becomes fully effective. I understand that, regardless of whether I sign this Release, the Company will pay me allof my accrued salary and vacation through the Separation Date, to which I am entitled by law.  In considerationfor the severance benefits I am receiving under the Agreement, I hereby release the Company and its officers, directors, agents, attorneys, employees, shareholders, parents, subsidiaries, and affiliates from any and all claims, liabilities, demands,causes of action, attorneys’ fees, damages or obligations of every kind and nature, whether they are now known or unknown, arising at any time prior to the date I sign this Release and which arise out of my employment or my termination ofemployment with the Company, including, without limitation, any such claims based on federal and state statutory and common law, breach of contract, tort, wrongful termination, discrimination, wages or benefits, or claims for any form ofcompensation for services. Notwithstanding the foregoing, I am not releasing any right of indemnification I may have for any liabilities arising from my actions within the course and scope of my employment with the Company. Notwithstanding anythingherein to the contrary, the release described herein does not apply to any rights or obligations arising under this Release Agreement.  In releasing claims unknown to me at present, I am waiving all rights and benefits under Section 1542 of the California Civil Code, and any law or legal principle of similar effect in any jurisdiction: “**A generalrelease does not extend to claims which the creditor does not know or suspect to exist in your favor at the time of executing the release, which if known by him must have materially affected your settlement with the debtor**.”  If I am forty (40) years of age or older as of the Separation Date, I acknowledge that I am knowingly and voluntarily waivingand releasing any rights I may have under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”). I also acknowledge that the consideration given for the waiver in the above paragraph is in addition to anything ofvalue to which I was already entitled. I have been advised by this writing, as required by the ADEA that: (a) my waiver and release do not apply to any claims that may arise after my signing of this Release; (b) I should consult with an attorneyprior to executing this Release; (c) I have twenty-one (21) days within which to consider this Release (although I may choose to voluntarily execute this Release earlier); (d) I have seven (7) days following the execution of this release to revokethe Release; and (e) this Release will not be effective until the eighth day after this Release has been signed both by me and by the Company (“Effective Date”).  Agreed:        **[COMPANY]**       **[EMPLOYEE]**By:                                                                                                                                                                                               [Name]        [Title]        Date:                                                                                            Date: