Employment Agreement - The Summit Media Group Inc. and Sheldon Hirsch
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of January, 1995 between THE SUMMIT
MEDIA GROUP, INC. ("Company"), a New York corporation having an office at 1414
Avenue of the Americas, New York New York 10019 and SHELDON HIRSCH
("Executive"), residing at 28 Doral Court, New City, New York 10956.
W I T N E S S E T H:
1. Employment.
1.01 Term. Company hereby employs Executive, and Executive hereby
accepts employment with Company with the duties hereinafter set forth, for a
period commencing on January 1, 1995 and ending August 31, 1998 subject,
however, to earlier termination in accordance with the provisions of this
Agreement. This Agreement shall automatically renew on a year-to-year basis
unless terminated by either party hereto giving written notice to the other at
least 90 days prior to August 31, 1998 or any August 31 thereafter.
2. Duties. Executive shall be Chief Executive Officer of Company and
shall perform such duties as may from time to time be assigned to him by
Company's Chairman or the Board of Directors. Executive agrees that, during the
term of this Agreement, he will devote his full time, skills and efforts to the
performance of his duties hereunder and to the furtherance of the interests of
the business of Company.
3. Compensation and Related Matters.
3.01 Fixed Salary. As compensation for Executive's services Company
shall pay Executive a salary of $235,000 per annum for the period January 1,
1995 through December 31, 1995, and $250,000 per annum for the period January 1,
1996 through December 31, 1996 (the "Fixed Salary") in equal monthly (or more
frequent) installments less appropriate payroll deductions as required by law.
In addition to his Fixed Salary, Executive shall receive, with respect to each
full fiscal year during the term hereof, commencing with the year ending
December 31, 1995, an annual bonus (the "Profit Bonus") equal to six percent
(6%) of the Company's annual "Income Before Income Tax Provision" as stated on
the Company's books and records. The Profit Bonus shall be payable within 120
days after the end of the Company's fiscal year. The parties agree to discuss an
increase of the Fixed Salary in good faith at the end of August, 1997.
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3.02 Expenses. Company shall pay or reimburse Executive for all
reasonable travel (including automobile), hotel, entertainment and other
business expenses incurred in the performance of Executive's duties upon
submission of appropriate vouchers and other supporting data, provided, however,
that Executive shall receive a monthly car allowance of $400 without the
submission of such vouchers.
3.03 Benefits. Executive shall be entitled to (i) participate in all
general pension, profit-sharing, life, medical, disability and other insurance
and executive benefit plans at any time in effect for executives of Company,
provided, however, that nothing herein shall obligate Company to establish or
maintain any executive benefit plan, whether of the type referred to in this
clause (i) or otherwise, and (ii) three (3) weeks vacation during each
twelve-month period of employment at mutually agreeable times. In the event the
Company's parent corporation, Leisure Concepts, Inc., shall enter into an
indemnification agreement with Alfred R. Kahn and Joseph P. Garrity, it will
offer to enter into an indemnification agreement on substantially the same terms
and conditions with Executive.
4. Termination for Cause; Disability; Death;
Change of Control.
4.01 For Cause. Company shall have the right to terminate the
employment of Executive hereunder at any time for cause without prior notice
(except as otherwise hereinafter provided). For purposes of the preceding
sentence "for cause" shall mean and include, without limitation, the occurrence
of any of the following acts or events by or relating to Executive: (i) any
material breach of any obligations of Executive under this Agreement which
remains uncured for more than twenty (20) days after written notice thereof by
Company to Executive; (ii) habitual insobriety of Executive while performing his
duties hereunder; (iii) theft or embezzlement from Company or any other material
acts of dishonesty; (iv) repeated insubordination respecting reasonable orders
or directions of Company's Chairman or the Board of Directors, which remains
uncured for more than twenty (20) days after written notice thereof by Company
to Executive; or (v) conviction of a crime (other than traffic violations and
minor misdemeanors). In the event of termination for cause, Executive's Fixed
Salary and Profit Bonus shall terminate as of the effective date of termination
of employment after written notice thereof.
4.02 Disability. If Executive, by reason of illness, mental or
physical incapacity (as determined by a physician) or other disability, is
unable to perform his regular duties hereunder for any consecutive period of 90
days or more from its commencement or for non-consecutive periods aggregating
120 days in any consecutive twelve-month period, then, in either such
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event, Company may terminate this Agreement at any time thereafter upon ten
days' written notice to Executive. Any payments to Executive under any
disability insurance or plan maintained by Company shall be applied against and
shall reduce the amount of the salary payable by Company under this Agreement.
4.03 Death. In the event of Executive's death, this Agreement
shall terminate effective as of the date of death.
4.04 Payment. In the event of termination of this Agreement
under Section 4.01 hereof, Executive's Fixed Salary and Profit Bonus shall cease
as of the date of termination. In the event of termination of this Agreement
under Section 4.02 or 4.03 hereof, Executive's Fixed Salary shall cease as of
the date of termination and his Profit Bonus shall be prorated by multiplying by
a fraction the numerator of which is equal to the number of days in the year
prior to termination and the denominator of which is 365.
4.05 Change of Control. If during the term of this Agreement
there shall occur a Change of Control (as hereinafter defined), Executive may,
during the six month period following such Change of Control, voluntarily
terminate his employment in which case he shall be entitled to receive a payment
equal to the Fixed Salary remaining to be paid for the year during which such
termination occurs and the Profit Bonus accrued to the date of termination.
Payment of Fixed Salary shall be payable to Executive in one payment on the date
of termination. Payment of Profit Bonus shall be payable to Executive in one
payment within 120 days of the end of the fiscal year in which termination
occurs. As used in this Agreement, a Change of Control shall be deemed to have
occurred on the first day on which (i) Leisure Concepts, Inc. does not own a
majority of the outstanding shares of common stock of the Company or (ii) a
majority of the Directors of Leisure Concepts, Inc. do not consist of
individuals recommended by Alfred R. Kahn or Tiger Electronics Inc.
5. Confidential Information; Non-Competition.
5.01 Confidential Information. Executive shall not, at any time
during or following termination or expiration of the term of this Agreement,
directly or indirectly, disclose, publish or divulge to any person (except in
the regular course of Company's business), or appropriate, use or cause, permit
or induce any person to appropriate or use, any proprietary, secret or
confidential information of Company including, without limitation, knowledge or
information relating to its trade secrets, business methods, the names or
requirements of its customers or clients or the terms of any license or other
agreement between the Company or Leisure Concepts, Inc. and third parties, all
of which Executive agrees are and will be of great value to Company and shall at
all times be kept confidential.
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Upon termination or expiration of this Agreement, Executive shall promptly
deliver or return to Company all materials of a proprietary, secret or
confidential nature relating to Company together with any other property of
Company which may have theretofore been delivered to or may then be in
possession of Executive.
5.02 Non-Competition. During the term of this Agreement and for
a period of one year after the sooner of the expiration date of this Agreement
or the date when Executive ceases to be employed by Company, Executive shall not
either directly or indirectly, engage, hire, employ, or induce or encourage to
leave employment any employee of the Company. Anything contained herein to the
contrary notwithstanding, in the event Executive's employment is terminated for
cause by Company pursuant to Section 4.01, or in the event Executive shall
terminate his employment in breach of this Agreement, Executive shall not,
within the boundary of the United States, without the prior written consent of
Company in each instance, directly or indirectly, in any manner or capacity,
whether for himself or any other person and whether as proprietor, principal,
owner, shareholder, partner, investor, director, officer, executive,
representative, distributor, consultant, independent contractor or otherwise,
engage or have any interest in any entity which at any time during such term or
such one year period is engaged in the business of providing media buying,
planning and marketing services and television syndication services or the
licensing of products or concepts or in any other manner performs services
similar to those provided by Company.
5.03 Reasonableness. Executive agrees that each of the
provisions of this Section 5 is reasonable and necessary for the protection of
Company; that each such provision is and is intended to be divisible; that if
any such provision (including any sentence, clause or part) shall be held
contrary to law or invalid or unenforceable in any respect in any jurisdiction,
or as to any one or more periods of time, areas or business activities, or any
part thereof, the remaining provisions shall not be affected but shall remain in
full force and effect as to the other and remaining parts; and that any invalid
or unenforceable provision shall be deemed, without further action on the part
of the parties hereto, modified, amended and limited to the extent necessary to
render the same valid and enforceable in such jurisdiction. Executive further
recognizes and agrees that any violation of any of his agreements in this
Section 5 would cause such damage or injury to Company as would be irreparable
and the exact amount of which would be impossible to ascertain and that, for
such reason, among others, Company shall be entitled, as a matter of course, to
injunctive relief from any court of competent jurisdiction restraining any
further violation. Such right to injunctive relief shall be cumulative
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and in addition to, and not in limitation of, all other rights
and remedies which Company may possess.
5.04 Survival. The provisions of this Section 5 shall survive
the expiration or termination of this Agreement for any reason.
6. Miscellaneous.
6.01 Notices. All notices under this Agreement shall be in
writing and shall be deemed to have been duly given if personally delivered
against receipt or if mailed by first class registered or certified mail, return
receipt requested, addressed to Company and to Executive at their respective
addresses set forth on the first page of this Agreement, or to such other person
or address as may be designated by like notice hereunder. Any such notice shall
be deemed to have been given on the day delivered, if personally delivered, or
on the third day after the date of mailing if mailed.
6.02 Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors and, in the case of Company,
assigns, but no other person shall acquire or have any rights under or by virtue
of this Agreement, and the obligations of Executive under this Agreement may not
be assigned or delegated.
6.03 Governing Law; Severability. This Agreement shall be
governed by and construed and enforced in accordance with the laws and decisions
of the State of New York applicable to contracts made and to be performed
therein without giving effect to the principles of conflict of laws. In addition
to the provisions of 5.03 above, the invalidity or unenforceability of any other
provision of this Agreement, or the application thereof to any person or
circumstance, in any jurisdiction shall in no way impair, affect or prejudice
the balance of this Agreement, which shall remain in full force and effect, or
the application thereof to other persons and circumstances.
6.04 Entire Agreement; Modification; Waiver; Interpretation.
This Agreement contains the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes all prior
negotiations and oral understandings, if any. Neither this Agreement nor any of
its provisions may be modified, amended, waived, discharged or terminated, in
whole or in part, except in writing signed by the party to be charged. No waiver
of any such provision or any breach of or default under this Agreement shall be
deemed or shall constitute a waiver of any other provision, breach or default.
All pronouns and words used in this Agreement shall be read in the appropriate
number and gender, the masculine,
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feminine and neuter shall be interpreted interchangeably and the singular shall
include the plural and vice versa, as the circumstances may require.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement this 3rd day of August, 1995 as of the date first above written.
THE SUMMIT MEDIA GROUP, INC.
By /s/ Alfred R. Kahn
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Alfred R. Kahn, Chairman
By /s/ Sheldon Hirsch
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Sheldon Hirsch
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