AGREEMENT
This Agreement dated as of June 15, 2000 among Xxxxxxx Xxxxxxxxx
("Xxxxxxxxx"), an individual whose principal business address is c/o C.A.K.
Universal Credit Corp., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx and
Worldwide Entertainment & Sports Corporation, a Delaware corporation with a
principal address at 00 Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx ("Worldwide")
WITNESSETH
Xxxxxxxxx and Worldwide for these premises and the good and valuable
consideration set forth below, hereby agree as follows:
1. Appointment of Xxxxxxxxx. Worldwide represents that its Board of Directors
has approved the appointment of Xxxxxxxxx as the Chairman of its Board of
Directors. Xxxxxxxxx agrees to serve as the Chairman of the Board of Directors
of Worldwide for a term through and including June 30, 2003(the "Chairmanship
Term"), provided that he is re-elected as a member of the Board of Directors of
Worldwide at any annual meeting of shareholders called for the election of
members to the Board of Directors of Worldwide. Xxxxxxxxx agrees to render such
duties as Chairman as are customarily rendered by a non-executive Chairman and
shall be reasonably available to work in conjunction with Xxxxxx Xxxxxxxxx as
Chief Executive Officer and President of Worldwide.
2. Compensation of Xxxxxxxxx. (A) Subject to the approval of the Board of
Directors of Worldwide, in consideration for his acceptance and performance of
the duties of Chairman of Worldwide, Xxxxxxxxx shall be granted an option to
purchase Two Hundred and Fifty Thousand shares (250,000) of the common stock of
Worldwide (the "Common Stock"), at an exercise price of $1.00 per share of
Common Stock(the "First Stock Options"). The First Stock Options shall be
exercisable for a period of ten years from the date hereof and shall vest
quarterly throughout the twelve month period commencing on the date of this
Agreement at the rate of 62,500 per quarter and provided that (i)in the event of
a "change in control" of Worldwide, any of the unvested First Stock Options
shall be deemed vested and (ii) in the event that Xxxxxxxxx resigns as Chairman
voluntarily before the expiration of the Chairmanship Term other than because he
was either not re-elected Chairman by the shareholders of the Company or because
Xxxxxx Xxxxxxxxx either assumes the Chairmanship of the Company or requests that
Xx. Xxxxxxxxx resign so that another individual would replace Xx. Xxxxxxxxx as
Chairman, then he shall be deemed to have forfeited (i) fifty percent of any of
the First Stock Options which have vested if such resignation occurs during the
second twelve months of the Chairmanship Term and (ii) twenty five percent of
any of the First Stock Options which have vested if such resignation occurs
during the third twelve months of the Chairmanship Term. For purposes hereunder,
a "change in control" of Worldwide shall occur or be deemed to have occurred
only if any of the following events occurs: (a) any "person," as such term is
used in Sections 13(d) and 14(d) of the Exchange Act (other than Worldwide, any
trustee or other fiduciary holding securities under an employee benefit plan of
Worldwide, or any corporation owned directly or indirectly by the
stockholders of Worldwide in substantially the same proportion as the ownership
of stock of Worldwide) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
Worldwide representing more than 50% of the combined voting power of Worldwide's
then outstanding securities; (b) individuals who, as of the "Effective Date",
constitute the Board (as of the Effective Date, the "Incumbent Board"), cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose election, or
nomination for election by Worldwide's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of Worldwide, as such terms are used in Rule
14a-11 of Regulation 14A under the Exchange Act) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or (c) the stockholders of Worldwide approve a merger or consolidation of
Worldwide with any other corporation, other than (i) a merger or consolidation
which would result in the voting securities of Worldwide outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 60% of
the combined voting power of the voting securities of Worldwide or such
surviving entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a recapitalization of
Worldwide (or similar transaction) in which no "person"(as hereinabove defined)
acquired more than 50% of the combined voting power of Worldwide's then
outstanding securities; or (d) the stockholders of Worldwide approve a plan of
complete liquidation of Worldwide or an agreement for the sale or disposition by
Worldwide of all or substantially all of Worldwide's assets. For purposes
herein, the "Effective Date" shall be deemed to be the date upon which Xxxxxx
Xxxxxxxxx is elected to serve as a member of the Board of Directors of
Worldwide.
(B) Subject to the approval of the Board of Directors of
Worldwide, Xxxxxxxxx shall be granted an option to purchase Two Hundred and
Fifty Thousand shares (250,000) of the common stock of Worldwide at an exercise
price of $1.00 per share of Common Stock, exercisable for a period of ten years
from the date hereof (the "Second Stock Options"). The Second Stock Options
shall vest according to the following schedule:
i. 83,333 of the Second Stock Options shall vest when
the "Market Price per Share" of a share of the Common
Stock equals or exceeds $3.00 per share for at least
ten consecutive days, each of which is a "Trading
Day". For purposes hereunder, "Market Price per
Share" of a share of the Common Stock shall mean, on
any "Trading Day", any reported sale price for Common
Stock (regular way) or, in case no such reported sale
takes place on such Trading Day, the average of any
bid and asked prices (regular way) for the Common
Stock on such Trading Day, in either case on the
principal national securities exchange on which the
Common Stock is listed or admitted to trading, or if
the Common Stock is not listed or
admitted to trading on any national securities
exchange, but is traded in the over-the-counter
market, any sale prices of the Common Stock on such
Trading Day or, if no sale is publicly reported, the
average of any bid and asked quotations for the
Common Stock on such Trading Day, as reported by
Nasdaq or any comparable system, or, if the Common
stock is not listed on Nasdaq or a comparable system,
any sale price of the Common Stock on such Trading
Day or, if no sale is publicly reported, the average
of any bid and asked prices on such Trading Day, as
furnished by two members of the National Association
of Securities Dealers, Inc. who make a market in the
Common Stock selected from time to time by Worldwide
for that purpose. In addition for purposes of such
definition, a "Trading Day: shall mean, if the Common
Stock is listed on any national securities exchange,
a business day during which such exchange was open
for trading and at least one trade of Common Stock
was effected on such exchange on such business day,
or, if the Common Stock is not listed on any national
securities exchange but is traded in the
over-the-counter market, a business day during which
the over-the-counter market was open for trading and
at least one "eligible dealer" quoted both a bid and
asked price for the Common Stock. An "eligible
dealer" for any day shall include any broker-dealer
who quoted both a bid and asked price for such day,
but shall not include any broker-dealer who quoted
only a bid or only an asked price for such day.
ii. 83,333 of the Second Stock Options shall vest when
the Market Price per Share of a share of Common Stock
equals or exceeds $6.00 per share for ten consecutive
days, each of which is a Trading Day;
iii. 83,333 of the Second Stock Options shall vest when
the Market Price per Share of a share of Common Stock
equals or exceed $9.00 per share for ten consecutive
days, each of which is a Trading Day; and
iv. notwithstanding the foregoing conditions to vesting
of the Second Stock Options set forth in subsections
(i) through (iii) above, in the event of a Change in
Control, all of the Second Stock Options not yet
vested shall be deemed vested.
(C)Xxxxxxxxx hereby acknowledges and agrees that the shares of
the Common Stock issuable upon the exercise of the First Stock Options and the
Second Stock Options are not currently registered under the Securities Act of
1933, as amended (the "Act"), and such securities may not be sold, transferred,
or otherwise disposed of in the absence of an effective registration statement
or an exemption from registration thereunder, and that Rule 701 under the Act
shall not be deemed a valid exemption from registration under the Act with
respect of the resale of Worldwide's common stock
acquired upon exercise of either the First Stock Options or the Second Stock
Options. Worldwide agrees that on or before the expiration of twelve months from
the date of this Agreement, it shall file a registration statement with the
Securities and Exchange Commission on Form S-8 to register Worldwide's common
stock underlying the First Stock Options and the Second Stock Options.
3. Expenses of Xxxxxxxxx. In connection with the performance of his duties
hereunder as Chairman of Worldwide, Xxxxxxxxx shall be entitled to payment of
expenses by Worldwide up to a maximum of Three Hundred Thousand Dollars
($300,000) during every twelve months of the Chairmanship Term for the following
expenses: lease and insurance payment on an automobile and a driver; an
assistant and a secretary. Xxxxxxxxx shall provide all necessary documentation
reasonably required by Worldwide for such above-referenced expenses. Xxxxxxxxx
shall provide Worldwide with reasonable advance notification in the event that
he intends to utilize any of the following personnel on behalf of Worldwide for
which Xxxxxxxxx shall seek payment of expenses from Worldwide under this
Section.
4. Effective Date. This Agreement shall become fully effective as of the date
first set forth above upon execution by the parties hereto.
5. Entire Agreement and Governing Law. This Agreement constitutes the entire
agreement between the parties hereto and shall supersede and/or replace any
other agreements, whether written or oral, between the parties with regard to
the subject matter hereof, provided however, that this Agreement shall not
supercede the terms and conditions of the Agreement among the Company,
Xxxxxxxx.xxx, Inc. and Xxxxxxxxx dated October 12, 1999, which shall remain,
after the date hereof, in full force and effect. This Agreement shall be
construed in accordance with the laws of the State of New York, excluding such
State's conflict of laws principals. The exclusive forum for any disputes
arising between the parties shall be the State and Federal Courts situated in
New York County and the parties hereto irrevocably consent to the jurisdiction
of said court for such purposes and waive any defenses as to improper
jurisdiction, venue or inconvenient forum with regard to such courts.
6. Representations and Warranties of Worldwide. Worldwide represents that it has
the power and authority to execute this Agreement and that upon execution and
delivery by Worldwide, this Agreement will constitute the legal, valid and
binding obligation of Worldwide, enforceable against it in accordance with its
terms.
7. Representations and Warranties of Xxxxxxxxx. Xxxxxxxxx represents that he has
the power and authority to execute this Agreement and that upon execution and
delivery by him, this Agreement will constitute the legal, valid and binding
obligation of Xxxxxxxxx,
enforceable against him in accordance with its terms.
In Witness Whereof, the parties hereto hereby sign this Agreement as of
the day first above written.
WORLDWIDE ENTERTAINMENT &
SPORTS CORPORATION
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By: Xxxx Xxxxxxx
Chairman & Chief Executive Officer
XXXXXXX XXXXXXXXX
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