Employment Agreement - Scores Holding Co. Inc. and Richard Goldring
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 31st day of March 2003, between Scores Holding
Company, Inc., a Utah corporation with its principal place of business at
533-535 West 27th Street, New York, NY 10001 ("SCOH") and Richard Goldring an
individual whose address is 5 Fox Chase Drive, Watchung, NJ 07067 (the
"Employee").
WITNESSETH
WHEREAS, SCOH intends to engage in the business of owning and operating
adult entertainment nightclubs; and
WHEREAS, SCOH intends 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 SCOH to adult
entertainment nightclubs owned by third parties; and
WHEREAS, Employee presently serves as President, Chairman and Chief
Executive Officer, for SCOH and SCOH 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. SCOH hereby employs Employee and Employee accepts employment
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upon the terms and conditions of this Agreement. In addition to his other
duties, Employee shall be primarily responsible for SCOH's licensing program.
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. SCOH hereby employs Employee and Employee hereby accepts
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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
otherwise provided herein, Employee may unilaterally terminate this Agreement at
any time, upon providing SCOH with sixty (60) days prior written notice.
3. EMPLOYMENT AND DUTIES.
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3.1 Title. Employee is employed in the capacity of President and Chief
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Executive Officer for SCOH.
3.2 Duties and Responsibilities. The services to be rendered by
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Employee pursuant to this Agreement shall consist of such services as defined
and directed by SCOH'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
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and comply with the rules and regulations of SCOH with respect to the
performance of his duties.
4. COMPENSATION; BENEFITS AND EXPENSES.
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4.1 Base Salary. As compensation for the services to be rendered
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hereunder, SCOH shall pay to Employee a base annual salary (the "Base Salary")
of $104,000 payable in equal bi-weekly installments.
4.2 Other Benefits. Employee shall also be eligible to participate in
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any benefit programs of SCOH, 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 SCOH's board of directors.
4.3 Travel, Automobile and Living Allowances. During the term of this
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Agreement, Employee shall be entitled to annual travel, automobile and living
allowances. In connection herewith, SCOH 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 SCOH
provided Employee has all expenses in excess of $5,000 pre-approved by SCOH.
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 SCOH's board of directors.
5. DISABILITY OR DEATH OF EMPLOYEE.
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5.1 SCOH shall obtain death and disability insurance on Employee
listing SCOH as the beneficiary in the minimum amount of $5,000,000. In the
event Employee dies or becomes disabled during the Employment Period, entitling
SCOH to receive payment under the insurance policy, SCOH'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.
5.2 (i) SCOH shall apply the insurance proceeds to the purchase of
Employee's stock in SCOH which will be valued and purchased by SCOH at a 20%
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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 SCOH stock with a value of less than $5,000,000 as at
the date of death or disability, SCOH shall be entitled to retain the balance of
insurance proceedings remaining after the purchase of Employee's SCOH 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, SCOH 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, SCOH 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 SCOH shares.
Such notice will include the number of additional SCOH shares which are being
purchased.
(iv) Notwithstanding Section 5.2(ii) above, in the event Employee
owns no SCOH stock or owns SCOH 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 SCOH shares and
receive $1,000,000 of the insurance proceeds.
4. TERMINATION.
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6.1 Termination By SCOH For Cause. Notwithstanding anything to the
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contrary in this Agreement, SCOH 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 SCOH 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 SCOH or reflecting upon SCOH's integrity (other than traffic
infractions or similar minor offenses).
6.2 Termination By Employee Other Than For Good Reason. In the event
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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 SCOH 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, SCOH shall pay
Employee a $1,000,000 termination fee.
6.3 Termination By Employee For Good Reason or Termination BY SCOH
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Without Cause. (i) In the event Employee terminates this Agreement for "Good
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Reason" or SCOH 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
SCOH prior written notice of the reason therefore, (B) such notice shall have
been given to SCOH 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 SCOH 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 SCOH shall take and
diligently pursue during such period such action necessary to cure or eliminate
such matters. In the event SCOH shall not take such action within such period,
Employee may send another notice to SCOH 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 SCOH 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 SCOH and which could
reasonably be deemed to be materially damaging or detrimental to Employee;
(2) A default by SCOH 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 SCOH to obtain the assumption of this
Agreement by any successor to substantially all of the assets or business
of SCOH; or
(4) Any material breach by SCOH of any provision of this
Agreement which is not corrected by SCOH 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 SCOH of
written notice from Employee specifying the nature of such breach.
5. CONFIDENTIALITY. Employee agrees that all confidential and proprietary
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information relating to the business of SCOH shall be kept and treated as
confidential both during and after the term of this Agreement, except as may be
permitted in writing by SCOH'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.
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6. ASSUMPTION OF INSURANCE POLICY. In the event this Agreement is
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terminated by SCOH 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.
7. INDEMNIFICATION. SCOH and Employee shall indemnify the other party for
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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. SCOH
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.
8. VACATION. Employee shall be entitled to eight (8) weeks of paid vacation
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time per contract year.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of
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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.
10. BINDING EFFECT. Except as otherwise herein expressly provided, this
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Agreement shall be binding upon, and shall inure to the benefit of the parties
hereto, their respective heirs, legal representatives, successors and assigns.
11. NOTICES. All notices, designations, consents, offers, acceptances,
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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 SCOH: to the address set forth above
or to such other address as a party hereto may notify the other pursuant to this
Section.
12. ADDITIONAL DOCUMENTS. Each of the parties hereto agrees to execute and
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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
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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.
13. COUNTERPARTS. This Agreement and any amendments hereto may be executed
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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.
14. ENTIRE AGREEMENT. This Agreement contains the sole and entire agreement
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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 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.
15. SEVERABILITY. If any provision of this Agreement, or the application
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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.
16. MODIFICATION. This Agreement cannot be changed, modified or discharged
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orally, but only if consented to in writing by both parties.
17. CONTRACT HEADINGS. All headings of the Sections of this Agreement have
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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.
18. WAIVER. Failure to insist upon strict compliance with any of the terms,
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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.
19. REPRESENTATION OF EMPLOYEE. Employee, with the full knowledge that SCOH
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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.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
SCORES HOLDING COMPANY, INC.
By: ________________________
Name: _____________________
Title: ____________________
___________________________
Richard Goldring
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