EMPLOYMENT AGREEMENT
AGREEMENT, dated as of April 16, 1997, between WORLDWIDE FOOTBALL
MANAGEMENT, INC. a Delaware corporation having its principal offices at 00
Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000 (the "Corporation"), and XXXX
XXXXX ("Employee") residing at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, the Corporation is a subsidiary of Worldwide Entertainment &
Sports Corp. ("WW");
WHEREAS, the Corporation engages in the business of providing career
management, professional representation, contract negotiation, the
identification and procurement of endorsements and personal appearances,
business management and related services as well as the development of
non-professional football related opportunities for professional football
players (the "Corporation's Business");
WHEREAS, the Employee has significant experience in the Corporation's
Business and the Corporation wishes to assure itself of the continued
availability of the advice and services of Employee in connection with the
Corporation's Business; and
WHEREAS, Employee wishes to be employed by the Corporation;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties hereto agree as follows:
1. Employment and Term. Subject to the terms and conditions of this
Agreement, the Corporation shall employ Employee, and Employee hereby accepts
employment by the Corporation, for a period of five (5) years.
2. Employee's Duties; Employee's Representations and Warranties.
(a) Employee shall serve the Corporation as its President and
as a Director and in such other executive capacities as may be determined by
either the Chairman of the Board of Directors of the Corporation or the Chief
Executive Officer and President of WW and as are consistent with the performance
of his duties hereunder. Employee shall perform and be responsible for the
provision of such executive, administrative, client development, client
managerial, marketing and other services and duties (including, without
limitation, the preparation of periodic reports regarding the business and
affairs of the Corporation), as are required by or incidental to the positions
he holds or as may, from time to time, be requested by the Chairman of the Board
of Directors of the Corporation, the Board of Directors of WW, or the Chief
Executive Officer or President of WW, and the Employee shall report directly to
such persons. During the term of this Agreement, Employee shall devote his
entire business time, attention and energies, on a full-time basis, to the
Corporation's
Business and he shall not be required by the Corporation to relocate his
permanent residence from New York City for the performance of his duties
hereunder. The foregoing notwithstanding, the Employee shall be permitted to
dedicate up to 5 hours per week toward serving as a law professor at Hofstra Law
School. The income Employee derives from teaching at Hofstra shall not be
subjected to the terms of this Agreement.
(b) As of the date hereof, the Employee represents and warrants to the
Corporation as follows:
(i) Employee is currently listed by the National
Football League Players Association ("NFLPA") as being a duly
certified player agent. Except as set forth in Schedule A to
the disclosure letter of the Employee dated the date hereof
(the "Disclosure Letter"); (A) the Employee is in good
standing in accordance with his role as exclusive bargaining
agent for NFL players; (B) Employee is duly registered, or
within sixty (60) days of the date hereof, shall be registered
and in good standing with all amateur and professional sports
agencies and organizations, and all state and local
governmental or regulatory agencies necessary for the
performance of the Employee's duties hereunder; (C) Employee
is not aware of any facts or circumstances which could result
in the revocation or suspension of any of the foregoing; and
(D) Employee has not been, nor is he currently, the subject of
any formal or informal inquiry or investigation with respect
to violation of any regulatory organization, nor has the
Employee been found or alleged to have been in violation of,
or entered into any consent decree or other settlement of any
allegations of, any governmental, academic or self regulatory
organization or agency, including without limitation any
securities regulation or self-regulatory organization rules or
regulations relating to securities.
(ii) Schedule B to the Disclosure Letter is a
complete and accurate schedule as of the date hereof of: (A)
the individuals that Employee represents as a duly certified
player's agent listed with the NFLPA; (B) the current annual
compensation amounts of each individual (including revenues
from endorsement income broken out and so identified); (C) the
number of years remaining on each player's existing contract
and the salary and guaranteed bonus and other payments due to
the player thereunder, and; (D) the percentage of the
respective annual compensation amounts of the listed
individuals that Employee has contracted to receive as
commission (cumulatively, "Employee's Client Business")
pursuant to signed and valid agent agreements, which to his
best knowledge have not been or are not being or threatened to
be terminated or breached by any party thereto. There are no
unpaid fees due to the Employee as of the date hereof from any
such individuals, or any individuals for whom the Employee has
acted as a certified player's agent since January 1, 1994,
which have not been paid in full.
(iii) Except as set forth in the Disclosure Letter,
neither the execution and delivery of this Agreement by the
Employee, the engagement by the Corporation of
the Employee nor the performance of the activities to be
conducted by the Employee contemplated hereby violates, or
contradicts, the provisions of any agreement or other
instrument or restriction, or any judgment, order or decree of
any governmental, academic or self regulatory organization or
agency, to which the Employee is a party or which is binding
upon the Employee.
(iv) The Employee hereby represents that he has not
and will not have at any time in the future any direct or
indirect financial interest in or with any individual or
entity conducting business with the Corporation or any
affiliate of WW unless disclosed in advance in writing to, and
with the consent of, the President of WW. Nothing herein shall
be construed, however, to prevent the Employee from owning not
more than 5% of the outstanding securities of any entity that
is listed on a national securities exchange or traded in the
over-the-counter market.
3. Client List Assignment. By executing this Agreement, and as more
fully set forth in Exhibit A hereof, Employee hereby assigns the rights and
interests to the revenue generated by any individuals or entities signed to a
valid representation agreement, or with whom material discussions regarding
entering a representation agreement were had by the Employee, the Corporation or
any of its employees or affiliates during the period commencing with the start
of Employee's employment, and continuing for the term of this Agreement and any
extensions hereof (the "Corporation's Clients"). Employee hereby also assigns to
the Corporation all other revenues generated by the performance of any of his
duties hereunder during the term of this Agreement.
4. Employee Certification. Employee covenants to maintain his listing
with the NFLPA and with all necessary governmental and self-regulatory agencies
and organizations. In addition, Employee agrees to apply for any additional
certifications as from time to time may be deemed necessary by the Chairman of
the Board of WW for the development of the Corporation's Business.
5. Corporation's Budget.
Attached as Schedule C to the Disclosure Letter is a projected
one year budget which the Employee has prepared and which the Employee believes
reasonably and accurately estimates the income from, expenses associated with,
and capital needed for, the operation of the Corporation and the development of
the Corporation's Business. Employee, in his capacity as President of the
Corporation, covenants to cause the Corporation to adhere, within a range of
15%, to the projected expense budget as set forth on such Schedule C and as
administered or modified by the Employee in such manner as approved by the Board
of Directors of WW.
6. Compensation.
(a) Salary. During the term of this Agreement, the Corporation
shall pay to Employee a base salary at the rate of $190,000 per annum in
accordance with the Corporation's regular payroll practice, but in no event less
than two times a month.
(b) Cash Bonus. Concurrently with the execution of this
Agreement, the Corporation shall pay to the Employee, as signing bonus, a lump
sum of $75,000 (less withholding taxes and other applicable payroll deductions).
It is understood, however, that if before December 31, 1998 this Agreement is
either (A) terminated by the Company "for cause" (as defined in Paragraph 9
hereof and adjudicated by court of competent jurisdiction) or (B) the Employee
resigns, other than as a result of a breach of this Agreement by the
Corporation, the Employee shall repay such bonus to the Corporation. The Board
of Directors will review, on a quarterly basis, the contribution, if any, of the
Employee to the business operations of WW outside of the Corporation. Based upon
such review, Employee may receive cash or other bonuses as determined at the
discretion of the Chairman of the Board of the Corporation.
(c) Stock Option Plan. Employee shall be eligible to receive
options to purchase shares of the Common Stock of WW ("Options") under the WW
Stock Option Plan, pursuant to the terms and conditions set forth therein, as
applicable to employees of WW's subsidiaries, subject to the discretion of the
WW Board of Directors or any committee thereof. Such grants, if any, shall be
commensurate with the Employee's role in WW, on a consolidated basis.
(d) Travel and Entertainment Reimbursement.
(i) Each month during the Term of this Agreement,
Employee shall submit to the Corporation an employee expense
reimbursement form with respect to all reasonable expenses
incurred by Employee in connection with the performance of his
duties hereunder, including without limitation expenses
incurred in connection with local travel expenses set forth in
Paragraph (e), below. Employee acknowledges that he shall
obtain the prior written approval of WW before incurring any
commitment, expense or other expenditure in excess of $3,000.
Each reimbursement form shall be accompanied by copies of
appropriate receipts and/or invoices and shall be in a form
and in sufficient detail so as to facilitate compliance with
applicable Internal Revenue Service guidelines and
regulations. The Corporation shall reimburse Employee for such
reasonable expenses within fifteen (15) days of the date of
the submission of Employee's monthly reimbursement form.
(ii) Employee shall be given a corporate credit card or
access to other corporate credit facilities, in accordance
with the policies established from time to time by the
Corporation, coincidental with their establishment by WW or
the Corporation for use in Corporation matters.
(e) Automobile Credits. Employee shall be reimbursed for up to
$1,000 per month during the term of this Agreement for local travel expenses
incurred, including, in his discretion, for the rental, leasing, purchase or
other procurement, parking, maintenance and operation of an automobile. Employee
shall submit to the Corporation appropriate expense reimbursement forms to
receive such reimbursement.
(f) Disability Compensation. If the Employee becomes unable to
substantially perform his duties hereunder due to physical or mental disability
or incapacity (is "Disabled") he shall be allowed to continue to receive payment
of his salary, at his base salary rate set forth in 6(a) above, for a period of
time totaling either: (i) three (3) consecutive months; or (ii) an aggregate of
six (6) months during the Term of this Agreement ("Disability Compensation").
Non-consecutive periods of absence for Disability taken during the Term shall be
aggregated and counted against such six (6) month period. The amount of
Disability Compensation payable to Employee shall be reduced by the aggregate
amount of all income disability benefits which for such period he may receive or
to which he may be entitled by reason of (i) any group health insurance plan
which is intended to function as a salary replacement plan, (ii) any applicable
compulsory state disability law, (iii) the Federal Social Security Act, (iv) any
applicable workmen's compensation law or similar law, (v) any plan towards which
the Corporation or any parent, subsidiary or affiliate of the Corporation has
contributed or for which it has made payroll deductions, such as group accident
or health policies, other than those which reimburse for actual medical
expenses, and (vi) any income Employee may receive from third parties for his
performance of any services.
(g) Medical Insurance; Life Insurance. Employee shall be
provided Medical Insurance benefits commensurate, in amount and scope of
coverage, with those benefits generally provided by WW to its key employees
consistent with the policies and practices established from time-to-time by WW's
Board of Directors. The Corporation shall purchase a term life insurance policy
for the benefit of the Employee with an annual premium payout obligation not to
exceed $750.
7. GAAP Accounting to be Used. Except as otherwise specifically stated
herein, all calculations made by either party for any purpose set forth in this
Agreement shall be made in accordance with GAAP.
8. Termination on Disability or Death. In the event that Employee is
Disabled for: (a) a period of three (3) or more consecutive months; or (b) six
(6) months in the aggregate during the Term of this Agreement, either the
Corporation or the Employee shall have the right to terminate this Agreement,
and Employee's employment hereunder, upon thirty (30) days' prior written
notice. In the event that Employee is able to render, and recommences rendering,
services and performing his duties hereunder to the satisfaction of WW's Board
of Directors within such thirty (30) day notice period, Employee shall be
reinstated. If Employee dies during the term of this Agreement, this Agreement
shall terminate immediately upon his death, any benefits unvested as of such
date shall lapse unless otherwise specifically made to vest by other written
agreement, and all of Employee's assignments hereunder shall become irrevocable.
9. Termination; Termination for Certain Causes.
(a) The Corporation may terminate this Agreement at any time
"for cause." As used herein, "for cause" shall mean the Employee's gross
negligence, misfeasance, malfeasance in the performance of his services
hereunder, conviction of any fraud or felony, the commission of acts which in
the reasonable determination of the Board of Directors may be damaging to the
business or
reputation of the Corporation or WW, the material breach by the Employee of any
provision hereof, or the Employee's misappropriation of funds.
(b) From and after December 31, 1998 either the Corporation or
the Employee may, but neither is obligated to, terminate this Agreement on sixty
(60) days' prior written notice to the other.
(c) In the event of a termination of this Agreement by the
Corporation pursuant to Paragraph 9(b) hereof, or in the event of the
non-renewal of this Agreement at the end of the Term hereof, then (i) the
Corporation shall, within ten (10) business days after receipt thereof, pay to
the Employee 50% of the revenues to be derived from the Corporation's Clients,
after deduction of direct expenses applicable to the Corporation's Clients, and
(ii) the Employee shall, within ten (10) business days after receipt thereof,
pay to the Corporation 50% of the revenues to be derived from the Corporation's
Clients, after deduction of direct expenses applicable to the Corporation's
Clients, received by Employee or his future employers, affiliates,
representatives, or those acting in concert therewith. It is understood,
however, that in the event of the termination of this Agreement as a result of
(i) the termination by the Corporation of the Employee's employment "for cause";
or (ii) the voluntary termination of this Agreement by the Employee at any time
during the Term hereof, then (A) the Corporation shall, within ten (10) business
days after receipt thereof, pay to the Employee 40% of the revenue to be derived
from the Corporation's Clients after deduction of direct expenses applicable
thereto, and (B) the Employee shall, within ten (10) business days after receipt
thereof, pay to the Corporation 60% of the revenues to be derived from the
Corporation's Clients, after deduction of direct expenses applicable to the
Corporation's Clients, received by Employee or his future employers, affiliates,
representatives, or those acting in concert therewith. The payments under this
Paragraph 9(c) shall be in lieu of any other claims for damages as a result of
such termination.
10. Confidentiality.
(a) Employee understands and acknowledges that as a result of
Employee's involvement with the Corporation's Business he is or shall
necessarily become informed of, and have access to, confidential information of
the Corporation, WW and their respective affiliates, clients, licensees,
franchises, subsidiaries and joint ventures (collectively the "Worldwide
Network"), including without limitation, trade secrets, know-how, plans,
specifications and the identity of clients. The Employee understands and
acknowledges that such information, to the extent it is not directly related to
the Employee's Client Business or the Corporation's Clients for whom the
Employee acts as exclusive player's agent, even though it may have been or may
be developed or otherwise acquired by Employee during his employment with the
Corporation, is the exclusive property of the Worldwide Network to be held by
Employee in trust and solely for the Worldwide Network's benefit and Employee
shall not at any time, either during or subsequent to his employment hereunder,
reveal, report, publish, transfer or otherwise disclose to any person,
corporation or other entity, or use, any of the Worldwide Network's confidential
information not directly related to the Employee's Client Business or the
Corporation's Clients for whom he acts as exclusive Player's Agent, without the
written consent of the Corporation's or WW's Board of Directors, except for use
on behalf of the Corporation in connection with the Corporation's Business, and
except for such information (i)
known to the Employee on the date hereof and (ii) which legally and legitimately
is or becomes disclosed by authorized sources other than Employee.
(b) Upon the termination of his employment with the
Corporation for any reason, Employee shall promptly deliver to the Corporation
all manuals, letters, notes, notebooks, reports and copies thereof and all other
materials, including, without limitation, those of a secret or confidential
nature, relating to the Corporation's Business which are in Employee's
possession or control.
11. Non-Competition.
(a) During his employment with the Corporation, Employee shall
refer to WW all opportunities within the scope of business of the Worldwide
Network presented to Employee, and Employee shall not, anywhere in the United
States of America, or elsewhere in the world (or for such lesser area as may be
determined by a court of competent jurisdiction to be a reasonable limitation on
the competitive activity of the Employee), directly or indirectly:
(i) engage in any activities directly or indirectly
competitive with the Corporation's Business or with the
interests of the Worldwide Network or any of them;
(ii) otherwise divert or attempt to divert any business
whatsoever from the Worldwide Network; solicit or attempt to
solicit, for any non-Corporation business endeavor, any
employee of the Worldwide Network or any of them; or
(iii) interfere in any material respect with any
business relationship between any of the Worldwide Network and
any other person.
12. Remedies and Survival. Because the Corporation does not have an
adequate remedy at law to protect its business from Employee's competition or to
protect its interest in its trade secrets, privileged, proprietary or
confidential information and similar commercial assets, the Corporation shall be
entitled to injunctive relief, in addition to such other remedies and relief
that would, in the event of a breach of the provisions of Paragraphs 10 and 11,
be available to the Corporation. The provisions of Paragraphs 3 (subject to
paragraph 9), 9 and 10, and this Paragraph 12, shall survive any termination of
Employee's employment with the Corporation.
13. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to its subject matter, merges
and supersedes any prior or contemporaneous understanding with respect to its
subject matter, and shall not be modified or terminated except by another
agreement in writing executed by the Corporation and Employee. Failure of a
party to enforce one or more of the provisions of this Agreement or to require
at any time performance of any of the obligations hereof shall not be construed
to be a waiver of such provisions by such party nor to in any way affect the
validity of this Agreement or such party's right thereafter to enforce any
provision of this Agreement, nor to preclude such party from taking any other
action at any time which it would legally be entitled to take.
14. Severability. If any provision of this Agreement is held to be
invalid or unenforceable by any court or tribunal of competent jurisdiction, the
remainder of this Agreement shall not be affected by such judgment, and such
provision shall be carried out as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability.
15. Successors and Assigns. Neither party shall have the right to
assign this personal agreement, or any rights or obligations hereunder, without
the consent of the other party; provided, however, that upon the sale of all or
substantially all of the assets and business of the Corporation to another party
under the control of Xxxx Xxxxxxx, or upon the merger or consolidation of the
Corporation with another corporation under the control of Xxxx Xxxxxxx, this
Agreement shall inure to the benefit of, and be binding upon, both Employee and
such party purchasing such assets, business and goodwill, or surviving such
merger or consolidation, as the case may be, in the same manner and to the same
extent as though such other party were the Corporation. Subject to the
foregoing, this Agreement shall inure to the benefit of, and bind, the parties
hereto and their legal representatives, heirs, successors and assigns. For the
purpose of this paragraph, "control" means the ownership of at least a numerical
majority of the equity ownership of the Corporation.
16. Communications. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given at the
time when mailed in any United States post office enclosed in a registered or
certified postage-paid envelope and addressed as set forth at the beginning of
this Agreement, or to such other address as any party may specify by notice to
the other parties, or delivered by Federal Express or a similar overnight
courier to such address; provided, however, that any notice of change of address
shall be effective only upon receipt.
17. Construction; Counterparts. The headings contained in this
Agreement are for convenience only and shall in no way restrict or otherwise
affect the construction of the provisions hereof. References in this Agreement
to Paragraphs are to the sections of this Agreement. This Agreement may be
executed in multiple counterparts, each of which shall be an original and all of
which together shall constitute one and the same instrument.
18. Governing Law Jurisdiction. This Agreement and the exhibits hereto
shall be construed in accordance with and governed by the laws of the State of
New York without giving effect to that State's conflict of laws principles. By
executing this Agreement, the Corporation and the Employee consent to the
exclusive personal jurisdiction and venue of the State and Federal courts
sitting in New York County for any action or proceedings arising out of this
Agreement or the subject matter hereof and the Corporation and the Employee
irrevocably waive any defense or claims in any such actions or proceedings based
on lack of personal jurisdiction, improper venue, forum non conveniens or any
similar basis, to the maximum extent permitted by law.
19. No Third Party Beneficiary. No provision in this Agreement shall
constitute any person or entity a third party beneficiary. Without limiting the
foregoing, in no event shall any person, other than the parties hereto and their
successors or assigns have any claims for breach of this Agreement.
20. Product of Negotiation. The terms of this Agreement are the product
of mutual negotiation and compromise between Employee and the Corporation. The
meaning, effect and terms of this Agreement have been discussed by both parties
with their respective counsel and are fully understood and agreed upon by the
parties hereto. In the event of an ambiguity in the interpretation of this
Agreement and its Exhibits, neither party shall be deemed to have been the
draftsman thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first set forth above.
/s/ Xxxx Xxxxx
WORLDWIDE FOOTBALL MANAGEMENT,INC.
By: /s/ Xxxx Xxxxxxx, Chairman of the Board
