Employment Agreement - Internet Advisory Corp., Go West Entertainment Inc. and Richard Goldring
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 1st day of July 2002, among The Internet Advisory
Corp., a Utah corporation with its principal place of business at 150 E. 58th
Street, New York, New York 10022 ("IACP"); Go West Entertainment, Inc. a New
York corporation with its principal place of business at 533-535 West 27th
Street, New York, New York ("Go West"); and, Richard Goldring an individual
whose address is 5 Fox Chase Drive, Watchung, NJ 07067 (the "Employee"). Go West
is a wholly owned subsidiary of IACP. Where context requires, reference to IACP
also includes reference to Go West.
WITNESSETH
WHEREAS, IACP, through Go West, will engage in the business of owning and
operating an adult entertainment nightclub (the "Club") at 533-535 West 27th
Street, New York, New York which will offer topless dancing, a gourmet quality
restaurant and bar facilities, and
WHEREAS, IACP, through Go West, or otherwise, intends to engage in the
business of owning and operating other adult entertainment nightclubs; and
WHEREAS, IACP, through Go West, or otherwise, intents to engage in the
business of managing adult entertainment nightclubs owned by third parties
and/or licensing the right to use the Scores name or other intellectual property
owned by IACP to adult entertainment nightclubs owned by third parties; and
WHEREAS, Employee presently serves as President, Chairman and Chief
Executive Officer, for both IACP and Go West and IACP seeks to further engage
Employee on the terms and conditions set forth below; and
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment. IACP hereby employs Employee and Employee accepts employment
upon the terms and conditions of this Agreement. In addition to his other
duties, Employee shall serve as Operations Manager for the Club, and shall
be primarily responsible for IACP's licensing program. In connection with
the foregoing, Employee shall provide a minimum of 40 hours per week of
services to IACP. Employee shall not be precluded hereunder from continuing
his employment as Operations Manager for Scores Showroom, an adult
entertainment nightclub located at 333-E.60th Street, New York, New York so
long as such employment shall not interfere with Employee's ability to
properly perform the duties assumed pursuant to this Agreement.
2. Term. IACP hereby employs Employee and Employee hereby accepts employment
for a term commencing on the date hereof (the "Commencement Date"), and
expiring on the tenth (10) anniversary of this Agreement, unless sooner
terminated as hereinafter provided (the "Employment Period"). Except as
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otherwise provided herein, Employee may unilaterally terminate this
Agreement at any time, upon providing IACP with sixty (60) days prior
written notice.
3. Employment and Duties.
3.1 Title. Employee is employed in the capacity of President and Chief
Executive Officer for IACP and as Operations Manager for the Club.
3.2 Duties and Responsibilities. The services to be rendered by Employee
pursuant to this Agreement shall consist of such services as defined
and directed by IACP's board of directors. Employee agrees to perform
such services with great diligence and care.
3.3 Observance of Rules and Regulations. Employee agrees to observe and
comply with the rules and regulations of IACP with respect to the
performance of his duties.
4. Compensation; Benefits and Expenses.
4.1 Base Salary. As compensation for the services to be rendered
hereunder, IACP shall pay to Employee a base annual salary (the "Base
Salary") of $520,000 payable in equal bi-weekly installments.
Notwithstanding the foregoing, until the opening of the Club,
Employee's Base Salary shall be $260,000.
4.2 Other Benefits. Employee shall also be eligible to participate in any
benefit programs of IACP, including but not limited to pension,
insurance or other supplemental or special compensation plans or
arrangements. Employee shall also be eligible to receive performance
based bonuses as approved and authorized by IACP's board of directors.
4.3 Travel, Automobile and Living Allowances. During the term of this
Agreement, Employee shall be entitled to annual travel, automobile and
living allowances. In connection herewith, IACP agrees to advance
and/or reimburse Employee for all reasonable travel, automobile,
living and other expenses incurred by Employee in rendering the
services hereunder on behalf of IACP provided Employee has all
expenses in excess of $5,000 pre-approved by IACP. Employee will be
reimbursed upon presentation of vouchers or other documents reasonably
necessary to verify the expenditures and sufficient, in form and
substance, to satisfy Internal Revenue Service requirements for such
expenses. The maximum amount of Employee's annual automobile and
living allowances under this Agreement shall be determined by IACP's
board of directors.
5. Disability or Death of Employee.
5.1 IACP shall obtain death and disability insurance on Employee listing
IACP as the beneficiary in the minimum amount of $5,000,000. In the
event Employee dies or becomes disabled during the Employment Period,
entitling IACP to receive payment under the insurance policy, IACP's
obligation to pay Employee further Base Salary and benefits shall
cease. Notwithstanding the forgoing, Employee or his estate shall be
entitled to all accrued but unpaid Base Salary and other benefits due
to Employee through the date of death or disability.
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5.2 (i) IACP shall apply the insurance proceeds to the purchase of
Employee's stock in IACP which will be valued and purchased by IACP at
a 20% discount from the market price of the stock as at the date of
death or disability.
(ii) Except as otherwise provided in Section 5.2(iv) below, in the
event Employee owns IACP stock with a value of less than $5,000,000 as
at the date of death or disability, IACP shall be entitled to retain
the balance of insurance proceedings remaining after the purchase of
Employee's IACP stock.
(iii) In the event Employee owns stock with a value of more than
$5,000,000 as at the date of death or disability, IACP shall have the
right, but not the obligation, to purchase more than $5,000,000 of
such stock at the discounted price. In connection therewith, IACP
shall give notice to Employee or his estate, as the case may be, not
more than 15 days after the date of death or disability to advise of
its intention as to Employee's additional IACP shares. Such notice
will include the number of additional IACP shares which are being
purchased.
(iv) Notwithstanding Section 5.2(ii) above, in the event Employee owns
no IACP stock or owns IACP stock with a discounted value of less than
$1,000,000 as at the date of death or disability , Employee or his
estate, as the case may be, shall be entitled to retain all of their
IACP shares and receive $1,000,000 of the insurance proceeds.
6. Termination.
6.1 Termination By IACP For Cause. Notwithstanding anything to the
contrary in this Agreement, IACP shall have the right, subject to this
Section 6, to terminate this Agreement "for cause", by giving Employee
7 days prior written notice to that effect, and Employee's right to
further compensation and benefits hereunder, shall then immediately
cease. Any termination IACP under this paragraph "for cause" shall be
without prejudice to Employee's right to receive all compensation and
benefits owed to him through the effective date of termination. As
used herein and throughout this Agreement, the term "for cause" shall
mean (i) commission of a willful act of dishonesty in the course of
Employee's duties hereunder, (ii) a material breach of this Agreement
that is not cured within 30 days of receipt of notice thereof, or
(iii) Employee's conviction of a criminal offense or crime
constituting a felony or conviction in respect to any act involving
fraud, dishonesty or moral turpitude resulting in detriment to IACP or
reflecting upon IACP's integrity (other than traffic infractions or
similar minor offenses).
6.2 Termination By Employee Other Than For Good Reason. In the event
Employee terminates this Agreement without Good Reason (as defined in
Section 6.3 hereof), Employee's rights to further compensation and
benefits, hereunder shall then immediately cease. Employee must give
IACP a minimum of 60 days prior written notice to effect such a
termination. Notwithstanding the foregoing, in the event Employee
terminates this Agreement without Good Reason more than three years
and less than seven years after the Commencement Date, IACP shall pay
Employee a $1,000,000 termination fee.
6.3 Termination By Employee For Good Reason or Termination BY IACP Without
Cause. (i) In the event Employee terminates this Agreement for "Good
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Reason" or IACP terminates this Agreement without cause, Employee
shall be entitled to receive all of the remaining Base Salary then due
Employee under this Agreement plus any previously unreimbursed travel,
living or car expenses.
(ii) Employee shall have the right to terminate this Agreement and his
employment hereunder for "Good Reason" if (A) Employee shall have
given IACP prior written notice of the reason therefore, (B) such
notice shall have been given to IACP within fifteen (15) days
after Employee is notified or otherwise first learns of the event
constituting "Good Reason," and (C) a period of fifteen (15) days
following receipt by IACP of such notice shall have lapsed and
the matters which constitute or give rise to such "Good Reason"
shall not have been cured or eliminated within such fifteen (15)
day period, such period shall be extended up to forty-five (45)
days, provided that IACP shall take and diligently pursue during
such period such action necessary to cure or eliminate such
matters. In the event IACP shall not take such action within such
period, Employee may send another notice to IACP electing to
terminate his employment hereunder and, in such event, Employee's
employment hereunder shall terminate and the effective date of
such termination shall be the 30 days after IACP shall have
received such notice.
(iii)For the purpose of this Agreement, "Good Reason" shall mean the
occurrence of any of the following without Employee's prior
written consent:
(1) Requiring Employee to engage in an illegal act, or an act
which is inconsistent with prior practices of IACP and which
could reasonably be deemed to be materially damaging or
detrimental to Employee;
(2) A default by IACP in the payment of any material sum or the
provision of any material benefit due to Employee pursuant
to this Agreement;
(3) The failure of IACP to obtain the assumption of this
Agreement by any successor to substantially all of the
assets or business of IACP; or
(4) Any material breach by IACP of any provision of this
Agreement which is not corrected by IACP or, if the breach
cannot be corrected, as to which SCOT fails to pay to
Employee reasonable compensation for such breach, within 60
days following receipt by IACP of written notice from
Employee specifying the nature of such breach.
7. Confidentiality. Employee agrees that all confidential and proprietary
information relating to the business of IACP shall be kept and treated as
confidential both during and after the term of this Agreement, except as
may be permitted in writing by IACP's Board of Directors or as such
information is within the public domain or comes within the public domain
without any breach of this Agreement.
8. Assumption of Insurance Policy. In the event this Agreement is terminated
by IACP without cause or by Employee for Good Reason, Employee shall have
the right, if exercised by Employee in writing within 15 days of such
termination, to assume the death and disability insurance policy, and to
make Employee the beneficiary thereof.
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9. Indemnification. IACP and Employee shall indemnify the other party for any
losses, damages, liabilities, judgments, claims, costs, penalties and
expenses incurred by such other party (including without limitation costs
and reasonable attorneys' fees and costs), resulting from the indemnifying
party's failure to perform any of their obligations contained in this
Agreement. IACP shall indemnify Employee against any liabilities incurred
by him in connection with any proceeding to which he is made a party as the
result of his performing his duties hereunder, unless such liability
results from Employee's gross negligence or misconduct in the performance
of such duties.
10. Vacation. Employee shall be entitled to eight (8) weeks of paid vacation
time per contract year.
11. Governing Law. This Agreement shall be governed by the internal laws of the
State of New York. Any action to enforce any term hereof shall be brought
exclusively within the state or federal courts of New York, New York to
which jurisdiction and venue all parties hereby submit themselves.
12. Binding Effect. Except as otherwise herein expressly provided, this
Agreement shall be binding upon, and shall inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors
and assigns.
13. Notices. All notices, designations, consents, offers, acceptances, waivers
or any other communication provided for herein, or required hereunder shall
be in writing and shall be mailed by certified mail, return receipt
requested, overnight courier, or delivered by hand.
The notices shall be addressed as follows:
If to Employee: to the address set forth above
If to IACP: to the address set forth above
or to such other address as a party hereto may notify the other pursuant to
this Section.
14. Additional Documents. Each of the parties hereto agrees to execute and
deliver, without cost or expense to any other party, any and all such
further instruments or documents and to take any and all such further
action reasonably requested by such other of the parties hereto as may be
necessary or convenient in order to effectuate this Agreement and the
intents and purposes thereof.
15. Counterparts. This Agreement and any amendments hereto may be executed in
two (2) or more counterparts, each of which shall be deemed an original and
all of which shall constitute one and the same instrument, binding on the
parties and the signature of any party to any counterpart shall be deemed a
signature to, and may be appended to, any other counterpart.
16. Entire Agreement. This Agreement contains the sole and entire agreement and
understanding of the parties and supersedes any and all prior agreements,
discussions, negotiations, commitments and understandings among the parties
hereto with respect to the subject matter hereof. There are no
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representations, agreements, arrangements or understandings, oral or
written, between or among the parties concerning the subject matter hereto,
which are not fully expressed herein or in any supplemental written
agreements of even or subsequent date hereof.
17. Severability. If any provision of this Agreement, or the application
thereof to any person or circumstances, shall, for any reason and to any
extent, be invalid or unenforceable, the remainder of this Agreement and
the application of such provision to other persons or circumstances shall
not be affected thereby, but rather shall be enforced to the greatest
extent permitted by law.
18. Modification. This Agreement cannot be changed, modified or discharged
orally, but only if consented to in writing by both parties.
19. Contract Headings. All headings of the Sections of this Agreement have been
inserted for convenience of reference only, are not to be considered a part
of this Agreement, and shall in no way affect the interpretation of any of
the provisions of this Agreement.
20. Waiver. Failure to insist upon strict compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition, nor shall any waiver or relinquishment of any right
or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
21. Representation of Employee. Employee, with the full knowledge that IACP is
relying thereon, represents and warrants that he has not made any
commitment inconsistent with the provisions hereof and that he is not under
any disability which would prevent him from entering into this Agreement
and performing all of his obligations hereunder.
[Signature page follows]
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
THE INTERNET ADVISORY CORP.
By: /s/John Neilson
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Name: John Neilson
Title: Secretary
GO WEST ENTERTAINMENT, INC.
By: /s/Elliot Osher
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Name: Elliot Osher
Title: Vice President
/s/Richard Goldring
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Richard Goldring
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