EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 1st day of January 2006, between SCORES HOLDING
COMPANY, INC., a Utah corporation with its principal place of business at
000-000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("SCOH") and XXXXXXX XXXXXXXX
an individual whose address is 0 Xxx Xxxxx Xxxxx, Xxxxxxxx, XX 00000 (the
"Employee").
WITNESSETH
WHEREAS, SCOH intends to engage in the business of licensing the right to
use the Scores name or other intellectual property owned by SCOH to adult
entertainment nightclubs owned by third parties and affiliates; and
WHEREAS, Employee presently serves as President, Chairman, Chief Executive
Officer and Financial advisor, 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 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 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx and Go West
Entertainment, Inc. located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX and SMG
located at 00000 Xxxxxxxx Xxxxxxxxx Xxxxx Xxxxx Xxxxx, XX 00000 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
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.
3.1 Title. Employee is employed in the capacity of President, Chief
Executive Officer and Financial advisor for SCOH.
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 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
and comply with the rules and regulations of SCOH 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, SCOH shall pay to Employee a base annual salary (the "Base Salary")
of $160,000 payable in equal monthly installments.
4.2 Other Benefits. Employee shall also be eligible to participate
in 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 a performance based bonus as approved and
authorized by SCOH'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, SCOH agrees to advance and/or
re-imburse 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 $1,000 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.
5.1 SCOH shall obtain both death and disability insurance on
Employee listing SCOH as the beneficiary in the combined 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%
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 maybe, shall be entitled to
retain all of their SCOH shares and receive $1,000,000 of the
insurance proceeds.
6. TERMINATION.
6.1 Termination By SCOH For Cause. Notwithstanding anything to the
contrary in this Agreement, SCOH shall have the right, subject to this Section
6, to terminate this Agreement "for cause", by giving Employee seven (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
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
without Cause.
(i) In the event Employee terminates this Agreement for "Good
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 un-reimbursed
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 SCOH 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.
7. CONFIDENTIALITY. Employee agrees that all confidential and proprietary
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.
8. ASSUMPTION OF INSURANCE POLICY. In the event this Agreement is
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.
9. INDEMNIFICATION. SCOH 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. 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.
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 SCOH: 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
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
SCOH 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.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
SCORES HOLDING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
