Exhibit 10.1
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“Agreement”), is executed and entered into on this 6
th day of October 2009 (the “Effective
Date”), by and between World Series of Golf, Inc., a Nevada
Corporation (WSG or the “Company”), with offices at
10161 Park Run Drive, Suite 150, Las Vegas, Nevada 89145 and John
Daly, an individual resident in the State of California (the
“Executive”).
W I T N E S S E T H
:
WHEREAS, the Company and the
Executive wish to enter into this Agreement, which shall set forth
the Executive’s terms of employment as Vice President of
Broadcast Operations of the Company,
NOW THEREFORE, in consideration of
the mutual promises and agreements herein and for other good and
valuable consideration the receipt and sufficiency of which are
hereby mutually acknowledged, the Company and the Executive agree
as follows:
1. Application and
Effectiveness of Agreements . Effective as of the Effective
Date, this Agreement shall govern (i) the employment relationship
between the Company and the Executive and (ii) other matters as set
forth herein.
2. Employment; Responsibilities
and Authority; Definitions .
(a)
Subject to the terms and conditions of this Agreement, the Company
shall employ the Executive as the Vice President of Broadcast
Operations during the Employment Period (as defined in Section 3,
below) and the Executive shall perform such acts and duties and
furnish such services to the Company and its Subsidiaries (as
defined below) as the Chief Executive Officer of the Company shall
from time to time direct.
(b)
Subject to the terms and conditions of this Agreement, the
Executive hereby accepts such employment and agrees to devote his
full time and continuous best efforts to the duties provided for
herein; provided that nothing herein shall preclude Executive,
subject to prior approval of the Board, from accepting appointment
to or continuing to serve on any board of directors or trustees of
any business corporation or any charitable organization; provided
in each case, and in the aggregate, that such activities do not
conflict or interfere with the performance of Executive’s
duties hereunder or conflict with Section 16 . The Company
acknowledges and approves Executive’s position and activities
with respect to John Daly, Inc; provided, and in the aggregate,
that such activities do not conflict or interfere with the material
performance of Executive’s duties hereunder or conflict with
Section 16.
(c)
For purposes of this Agreement: (1) the “Business of the
Company” means the description of the Company’s
business as is described in Part I, Item 1 of the Company’s
most recent Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission (provided, however, that for
purposes of Sections 16(b) through (e) hereof, “Business of
the Company” shall mean the Company’s business as of
the date of termination of Executive’s employment, as the
same may have changed since the Effective Date), (2) the term
“Subsidiary” means a corporation or other entity that
is at least majority owned, directly or indirectly, by the Company,
and (3) the term “Funding” shall mean the consummation
of the
Company’s sale of 10% convertible secured promissory
notes, convertible into shares of its common stock, par value
$0.001 per share, for aggregate proceeds of at least five million
dollars ($5,000,000).
3. Term; Employment Period . The “Employment
Period” under this Agreement shall commence on the Effective
Date and shall continue until terminated at any time by either
party upon ninety (90) days prior written notice of termination to
the other party, subject to the provisions of Section 9 and 10
hereof.
4. Salary .
(a)
For services rendered to the Company during the Employment Period,
the Company shall compensate the Executive with a base salary
(“Base Salary”), payable in semi-monthly installments,
which initially shall be one hundred eighty thousand dollars
($180,000) per annum commencing on the Effective Date and which
shall thereafter be set by Management and the Board from time to
time as determined by the Board or the Compensation Committee of
the Board (the “Compensation Committee”) (but in no
event shall it be less than the initial Base Salary). In addition,
Executive shall be eligible to receive a target annual percentage
increase to the Base Salary of up to 10% (commencing in fiscal year
2011) based the satisfactory achievement of mutually agreed on MBOs
(management objectives). To the extent possible, such MBOs shall be
established, as to each fiscal year, prior to the end of the second
month of such fiscal year.
(b)
The Base Salary provided for under Section 4(a), shall accrue
monthly, on the first business day of each calendar month,
beginning on the Effective Date. Payment of all or any portion of
Base Salary shall be deferred by the Company until the Funding.
5. Incentive Cash Compensation .
(a)
For each fiscal year of the Company or portion thereof during the
Employment Period, the Executive shall also be eligible to receive
incentive cash compensation based on the Executive’s
performance in relation to the performance areas and performance
targets which the Board or Compensation Committee shall determine
and communicate to the Executive as described below (the
“Annual Bonus Plan”). The targeted amount of such
Annual Bonus Plan shall be fifty thousand dollars ($50,000) per
year; provided, however, that the Executive and the Company
acknowledge that the amount actually paid to the Executive pursuant
to this Section 5 for any fiscal year or portion thereof may be
nil, or may be more or less than said targeted amount.
(b)
Management and the Board shall establish performance criteria for
determination of the incentive cash compensation that will be
payable to the Executive with respect to each fiscal year of the
Company. To the extent possible, such criteria shall be
established, as to each fiscal year, prior to the end of the second
month of such fiscal year. As an example, such performance criteria
may be comprised of several designated performance areas and one or
more performance targets in each area.
(c)
As soon as practical, and absent unforeseen circumstances no later
than ninety (90) days following the end of each fiscal year of the
Company, the Management shall determine, reasonably and in good
faith, the extent to which the applicable performance criteria
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for such fiscal year shall have been achieved and, accordingly,
shall cause the appropriate amount of incentive cash compensation
to be paid to the Executive. If unforeseen developments occur that
in the opinion of Management make the performance areas and/or
targets previously determined unachievable, infeasible, or
inadvisable — and therefore inappropriate as a measure of the
performance of the Executive — Management shall consider in
good faith the extent to which the actual performance of the
Executive nevertheless warrants payment of the amounts that would
have been payable if the performance criteria had been achieved;
and, to such extent, payment shall be made to the Executive.
6. Stock Options . The Company and the Executive hereby
acknowledge that the Board of Directors shall grant, as and to the
extent provided below in this paragraph, to the Executive options
to purchase shares of common stock of the Company (the
“Outstanding Options”). The terms of the grant
agreements granting such Outstanding Options shall govern the
rights and obligations of the Executive with respect thereto,
subject, however, to the provisions of Sections 10 and 18 of this
Agreement, if and as applicable. Upon the Effective Date of this
Agreement, the Executive shall receive a grant of options to
purchase 500,000 shares of common stock of the Company. The options
shall have an exercise price per share equal to the closing bid
price of the Company’s common stock on the date of grant
(which exercise price shall be subject to customary adjustments for
stock splits and stock dividends as provided in the Company’s
equity incentive plan) and shall expire on the tenth anniversary of
the grant date. The options shall vest monthly over a thirty-six
month period, beginning on the first month anniversary of the
Effective Date, in equal monthly amounts. It is intended that the
maximum number of options qualify as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, and the remaining
options shall be treated as non-qualified options.
7. Benefits .
(a)
During the Employment Period, the Company shall provide or cause to
be provided to the Executive, and the Executive shall be eligible
to participate in or partake of, such employee benefits as are
provided to other executive officers of the Company, including in
any retirement plans established by the Company.
(b)
The Company shall endeavor to establish a profit sharing plan for
its executive officers and certain other employees. If and when
such a profit sharing plan is established, the Executive shall have
the right, on the same basis as other executives of the Company, to
participate in and to receive benefits under such profit sharing
plan, provided that , the amount the Executive shall
be entitled to receive under such profit sharing plan shall not
exceed seventy thousand dollars ($70,000) per calendar year.
8. Paid Time Off . The Executive shall be entitled to
paid time off in accordance with the Company’s policies in
effect from time to time for executive officers of the Company.
9. Termination .
(a)
Executive’s employment by the Company shall be “at
will.” Either the Company or the Executive may terminate
Executive’s employment by the Company, with or without
Cause or Good Reason (as such terms are defined
below), in its or his sole discretion, upon ninety (90) days’
prior written notice of termination. In addition, the
Executive’s employment by the Company shall be terminated by
his death or “Disability” (as defined below).
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Termination of the Executive’s employment as provided for
herein shall terminate the Employment Period.
(b)
For purposes of this Agreement, in the case of a termination of the
Executive’s employment hereunder by the Executive, the term
“Good Reason” shall have the meaning set forth for it
below; in the case of a termination of the Executive’s
employment hereunder by the Company, the term “Cause”
shall have the meaning set forth for it below; and the other terms
set out below in this Section 9 shall have the meanings provided
for them respectively:
(i)
“Good Reason” shall mean (i) any material diminution in
the Executive’s authority or role as Vice President of
Broadcast Operations, including his no longer serving as a ranking
executive officer in the Company; (ii) failure of the Company to
pay to the Executive any amounts of Base Salary and/or incentive
cash compensation as provided for in Sections 4 or 5 above, or to
honor promptly any of its obligations or commitments regarding
stock options or other benefits referred to in Sections 6, 7,
and/or 8 above, or to honor promptly any of its other material
obligations hereunder, or the Company’s material violation of
any of the terms, covenants, representations or warranties
contained in this Agreement; (iii) a material demotion in the
Executive’s title or status; or (iv) failure of the Executive
to have been appointed to a higher level position; provided
that , the Executive must notify the Company of the
existence of a Good Reason within 90 days of the initial event
giving rise to such Good Reason, and the Company shall have 30 days
from the date of such notice to cure and remediate such condition
and thereby eliminate the Good Reason.
(ii)
“Cause” shall mean (i) the Executive’s willful
and repeated failure to perform his duties hereunder or to comply
with any reasonable and proper direction given by Management and
the Board, which failure continues for a period of thirty (30) days
following receipt by the Executive of written notice from the
Company containing a specific description of any such alleged
failure(s) and a demand for immediate cure thereof; (ii) conviction
of the Executive of a criminal offense involving moral turpitude;
(iii) the Executive’s commission of an act of fraud or theft
against the Company; or (iv) the Executive’s material
violation of any of the terms, covenants, representations or
warranties contained in this Agreement provided that
, in the case of this clause “iv,” if such violation is
subject to cure and effective remediation by the Executive, such
violation is not so cured and remediated by the Executive within
thirty (30) days following receipt by the Executive of written
notice from the Company containing a reference to the violation and
a demand for immediate cure thereof.
(c)
“Disability” shall mean that the Executive is unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, as
determined by a physician chosen by the Company and to whom the
Executive has no reasonable objection.
(d)
“Termination Date” shall mean (i) if this Agreement is
terminated on account of death, the date of death; (ii) if this
Agreement is terminated for Disability, the date that such
Disability is established; (iii) if this Agreement is terminated by
the Company or by the Executive, the effective date of the
termination as provided in Section 9(a) hereof.
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10. Severance .
(a)
Subject to Section 18 hereof, if (i) the Company terminates the
employment of the Executive during the Employment Period without
Cause, or (ii) the Executive terminates his employment during the
Employment Period for Good Reason, then Executive shall be entitled
to receive Base Salary, incentive cash compensation (determined on
a pro-rated basis as to the year in which the Termination Date
occurs), pay for accrued but unused paid time off, and
reimbursement for expenses pursuant to Section 11 hereof through
the Termination Date, and six (6) months of the Executive’s
specified Base Salary hereunder at the rate in effect on the
Termination Date payable over six months in accordance with the
Company’s regular payroll practices; any then un-vested
Outstanding Options shall terminate (with the then-vested
Outstanding Options vested and exercisable as specified in the
option grant agreements). The Company shall pay the cash amounts
provided for in this Section (other than Base Salary) within thirty
(30) days after the six (6) month anniversary of the date of such
termination (but no later than the end of the calendar year in
which such six (6) month anniversary occurs); provided, however,
that pay for accrued but unused paid time off shall be paid as soon
as practicable following such termination. Notwithstanding the
foregoing, the Company shall not be required to pay any severance
pay for any period following the Termination Date if it shall have
been determined in writing by a court of competent jurisdiction or
by any arbitrator appointed pursuant to Section 23 that the
Executive has materially violated the provisions of Sections 16 and
17 of this Agreement and such violation has not been cured within
thirty (30) days following receipt of written notice from the
Company containing a description of the violation and a demand for
immediate cure. The Company also may withhold any severance pay
while it pursues such determination.
(b)
Subject to Section 18 hereof, if (A) the Executive voluntarily
terminates his employment during the Employment Period other than
for Good Reason or (B) the Executive’s employment is
terminated by the Company during the Employment Period for Cause,
then the Executive shall be entitled to receive salary, pay for
accrued but unused paid time off, and reimbursement of expenses
pursuant to Section 11 hereof through the Termination Date only;
vesting of Outstanding Options shall cease on such Termination
Date; any then un-vested Outstanding Options shall terminate (with
the then-vested Outstanding Options vested and exercisable as
specified in the option grant agreements). The Company shall pay
the cash amounts provided for in this Section within thirty (30)
days after the six (6) month anniversary of the date of such
termination (but no later than the end of the calendar year in
which such six (6) month anniversary occurs); provided, ho
