PERSONAL SERVICES AGREEMENT
This Personal Services
Agreement (the “ Agreement
”) is entered into this May 2, 2008, by and between TW
Sports, Inc., a Delaware corporation (the “ Company ”)
with its principal place of business at 2620 Regatta Drive,
Ste 102, Las Vegas, Nevada 89128 and Tom Olmstead, (“
Executive
”) to be effective as of June 1, 2007 (the “
Effective
Date ”).
PREMISES
WHEREAS , the
Company desires to employ Executive pursuant to the terms and
conditions and for the consideration set forth in this
Agreement and Executive desires to enter the employ of the
Company pursuant to such terms and conditions and for such
consideration;
WHEREAS , the
provisions of this Agreement are a condition of Executive
being employed by Company, of Executive’s having access
to confidential business and technological information, and
of Executive’s being eligible to receive certain
benefits of the Company. This Agreement is entered
into, and is reasonably necessary, to protect confidential
information and customer relationships to which Executive may
have access, and to protect the goodwill and other business
interests of the Company; and
WHEREAS , the
provisions of this Agreement are also a condition to
Executive’s agreement to provide personal services to
the Company.
NOW THEREFORE ,
in consideration of the mutual promises and covenants agreed
to herein, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as
follows:
AGREEMENT
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1.
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Position, Term, Duties, Responsibilities .
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(a)
Position
. Executive shall be employed by the Company as
its President and Chief Operating Officer to act in
accordance with the terms and conditions hereinafter set
forth. Additionally, during the Employment Period, the
Company agrees that it shall recommend to the Board the
election of the Employee as a Director of the Company on the
Commencement Date or as soon as practical
thereafter. Upon the expiration of his term as a
Director during the Employment Period, the Company agrees to
use its best efforts to cause him to be re-nominated for
election and to recommend his election.
(b)
Duties
. Executive shall faithfully and diligently render
such services and perform such related duties and
responsibilities as are customarily performed by a person
holding such title and as otherwise may, from time to time,
be reasonably assigned to Executive by the Company’s
Board of Directors (the “ Board
”). Executive shall comply with the
provisions of this Agreement and all reasonable rules,
regulations and administrative directions now or hereafter
established by the Company.
(c)
Other
Activities . During Executive’s
employment with the Company, Executive shall devote his
entire business time, attention and energies to the
performance of his duties and functions under this Agreement;
provided, however, that nothing in this Agreement shall
prevent Executive from: (i) serving as a director of any
entity that is not a Competitive Business (as defined in
Section 5(a)); (ii) managing his personal investments and
affairs and the personal investments and affairs of any of
his family members; (iii) acquiring any interest in any
entity, whether or not part of a control group, that is
directly or indirectly owned or controlled, in whole or in
part, by Executive and/or one or more members of his family,
or a partnership, trust or other entity held by or for the
benefit of Executive and/or one or more members of his
family, and/or (iv) performing any services for any entity,
whether or not part of a control group, that is directly or
indirectly owned or controlled, in whole or in part, by
Executive and/or one or more members of his family, or a
partnership, trust or other entity held by or for the benefit
of Executive and/or one or more members of his family;
provided, however, that any service shall be insubstantial
and shall not include any active involvement in the
management of such entity and provided further that such
entities do not constitute a Competitive Business (as defined
in Section 5(a)).
(d)
Term
. This Agreement shall be for a term beginning on
the Effective Date and terminating the earlier of (i) the
date which is five (5) years from the Effective Date (the
“Expiration
Date ”), or (ii) the date on which
Executive’s employment is terminated pursuant to
Section 3 of this Agreement (the “ Initial Term
”); provided that, unless earlier terminated pursuant
to Section 3 of this Agreement, the Initial Term shall be
automatically extended for additional one-year terms (each a
“ Renewal
Term” ) upon the expiration of the Initial Term
or any such Renewal Term unless the Board or Executive
delivers to the other at least thirty (30) days prior to the
expiration of the Initial Term or the then current Renewal
Term, as the case may be, a written notice specifying that
the term of the Executive’s employment will not be
renewed at the end of the Initial Term or such Renewal Term,
as the case may be (the “ Term Termination
Notice ”). The Initial Term or, in
the event that the Executive’s employment hereunder is
earlier terminated pursuant to Section 3 or renewed as
provided in this Section 1 (c), such shorter or longer
period, as the case may be, is hereinafter called the “
Term
.”
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2.
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Compensation, Bonuses and Benefits .
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(a)
Base
Salary . During Executive’s
employment with the Company, the Company shall pay Executive
a base annual salary (the “ Base Salary
”) of $90,000.00.
The
Base Salary shall be payable in accordance with the
Company’s normal payroll schedule, less all applicable
tax withholdings for state and federal income taxes, FICA and
other deductions as required by law and/or authorized by
Executive. The Executive’s Base Salary shall
be reviewed by the Compensation Committee of the Board (the
“ Compensation
Committee ”) no less frequently than annually to
determine whether or not it should be changed (if it is
decreased it will be subject to the provisions of Section 3(g)
Termination for Good Reason) in light of the duties and
responsibilities of the Executive and the performance thereof,
and, if it is determined by the Compensation Committee in its
sole discretion that an increase is merited, such increase
shall be promptly put into effect and the base salary of the
Executive as so increased shall constitute the Base Salary of
the Executive for purposes of this Agreement from and after
such date. Executive’s salary shall be
deferred until the company has sufficient resources to pay
Executives’ salary. Executive may at his sole
discretion convert such deferred salary at the then current
market price on the date the salary is earned.
(b)
Reserved.
(c)
Incentive
Compensation Program . During
Executive’s employment with the Company, Executive
shall be entitled to participate in such incentive
compensation programs as are from time to time established
and approved by the Board in accordance with the
Company’s practice for similarly situated
employees.
(d)
Benefits
. Executive shall be entitled to participate in
such employee benefit plans which the Company provides or may
establish from time to time for the benefit of employees,
subject to the terms of each such plan and subject to the
right of the Company and the Board to modify, revise or
eliminate such benefit plans from time to time in their sole
discretion. Executive shall pay for the portion of
the cost of such benefits as is from time-to-time established
by the Company as the portion of such cost to be paid by
senior executives of the Company.
(e)
Costs and
Expenses . Executive shall be entitled to
reimbursement for all ordinary reasonable out-of-pocket
business expenses which are reasonably incurred by him in the
furtherance of the Company’s business, in accordance
with the policies adopted from time to time by the Company or
the Board. Executive will comply with the
Company’s travel policies as established from time to
time by the Company or the Board.
(f)
Vacation
. Executive shall be entitled to two weeks of
vacation with pay each year, which shall accrue in accordance
with the Company’s practice for senior executives of
the Company. Executive will schedule vacation
periods to minimize disruption of the Company’s
business.
(g)
Allowances
. Executive shall be entitled to an automobile and
cell phone allowance. The amount of the allowance
shall be determined by the compensation committee; however,
such amount shall not be less than $1,000 (in a combined
total of the allowances).
(h)
Retention
Bonus . If the Executive is an active employee of the
Company July 1 st
of each year while this Agreement is effective, the Executive
will be paid a bonus equal to $100,000. If the Executive is an
active employee of the Company on each successive anniversary
(the "Anniversary Date") of the Effective Date, the Executive
will be paid a bonus equal to $200,000. In the sole
discretion of the Executive, the amount of the bonus may be
converted into Common Stock at the closing price of the
stock.
(a)
Mutual
Agreement . Executive’s employment
under this Agreement may be terminated at any time by the
mutual agreement of the Company and Executive, expressed in
writing.
(b)
Voluntary
. Executive’s employment under this
Agreement may be terminated by Executive with or without the
consent of the Company by giving written notice of his/her
intent to terminate with the effective date of termination at
least four weeks after the effective date of the notice of
termination. After such notice, the Company may
accelerate the date such termination will take effect
pursuant to this paragraph (b) without being in breach
hereof.
(c)
Without
Cause . The Company may terminate
Executive’s employment under this Agreement at any time
without Cause effective immediately upon delivery of written
notice to Executive.
(d)
Disability or
Death . The Company may terminate
Executive’s employment under this Agreement upon the
death or disability of Executive. For purposes of
this Agreement, Executive shall be considered disabled if
he/she is unable to perform his/her duties under this
Agreement as a result of injury, illness or other disability
for a period of 90 consecutive days, or 180 days in any 365
day period, and the Board reasonably determines that
Executive has been unable to perform his/her duties for the
180 day period as a result of injury, illness or other
disability.
(e)
For
Cause by the Company . The Company may
terminate Executive’s employment for
“Cause” at any time prior to the expiration of
the Term effective immediately upon delivery of written
notice to Executive. For purposes of this
Agreement, “Cause” shall mean:
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(i)
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Executive
engaging in a material act of theft, embezzlement, misappropriation
of funds or property, or fraud against, or with respect to the
business, of the Company or any affiliate;
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(ii)
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Current
use of illegal drugs on or off the job;
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(iii)
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Executive
has been determined as a result of his/her incapacity due to
physical or mental illness, by two physicians selected by the
president of the Los Angeles, California chapter of the American
Medical Association, to be unable to perform substantially and
continuously the Executive’s obligations under this Agreement
for a period of three consecutive months or for an aggregate of six
months in any 12-month period (a “ Disability
”);
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(iv)
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Executive
commits a breach of any material term of this Agreement and, if
such breach is capable of being cured, fails to cure such breach
within 30 days of notice of such breach;
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(v)
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Executive
is charged with or found guilty of, or pleads guilty or nolo
contendere to a felony or a crime involving moral
turpitude;
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(vi)
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As
a result of Executive’s gross negligence or willful
misconduct, Executive commits any act that causes, or knowingly
fails to take reasonable and appropriate action to prevent, any
material injury to the financial condition or business reputation
of the Company or any affiliate; however, this shall not apply to
any act of the Company or of its affiliates or subsidiaries or any
other employee thereof except to the extent that such act was
committed at the direction of, or with the knowledge and consent
of, Executive;
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(vii)
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Engaging
in any offense punishable by the termination of employment as set
forth in the Company’s employment policies manual, as said
manual is now in effect or as said manual is amended from time to
time during the term of this Agreement;
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(f)
Termination
After Change of Control . Executive may
terminate his/her employment within three (3) months after a
Change of Control and prior to the expiration of the Term
upon two (2) weeks prior written notice to the
Company.
(g)
Termination by
the Employee with Good Reason. At the
election of the Employee upon Good Reason or otherwise, upon
five business days' prior written notice of termination
employee may terminate this Agreement. For purposes
of this Agreement, "Good Reason" for termination shall be
deemed to exist solely if the Employee terminates employment
within one year after the occurrence of any of the following
without the explicit written consent of the
Employee: (a) diminution of title,
responsibilities, authority or duties; (b) a failure to be
elected to or removal from the Board; (c) a change in work
location beyond a 50 mile radius from the Employee's current
location of employment (it being understood that foreign
business travel shall not constitute a "change in work
location" for these purposes unless it averages more than one
calendar week per month outside North America), (d) the
failure of the Company to obtain and deliver to the Employee a
satisfactory written agreement from any successor to the
Company to assume and agree to perform this Agreement, or (e)
any breach of this Agreement or any other material breach of
this Agreement by the Company.
“ Change of Control
” shall mean the occurrence of one or more of the
following:
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(
i)
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a
person (as defined in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, as amended (“ Exchange Act ”),
other than an already existing shareholder as of the date hereof,
that have an existing equity interest of 25% or greater, either
individually or collectively, directly or indirectly becomes the
“beneficial owner” (as defined in Rule 13d-3
promulgated pursuant to the Exchange Act) of 50% or more of the
securities or combined voting power of the Company’s
outstanding securities;
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(ii)
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a
complete liquidation or dissolution of the Company other than a
liquidation or dissolution occurring after any of the following
transactions: the merger or consolidation of the Company with an
Affiliate, the transfer of 50% or more of the Voting Stock of the
Company to an Affiliate or Affiliates or the sale or other transfer
of all or substantially all of the assets of the Company to an
Affiliate or Affiliates;
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(iii)
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the
sale of all or substantially all of the Company’s assets to a
single purchaser or group of affiliate purchasers, other than any
Affiliate or Affiliates, in one or a series of related
transactions;
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(iv)
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the
Company engages in a merger or consolidation with another entity
other than an Affiliate and immediately after that merger or
consolidation, the terms or entities which were stockholders of the
Company immediately prior to that merger or consolidation hold,
directly or indirectly, less than 50% of the Voting Stock of the
surviving entity; or
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(v)
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individuals
who were members of the Board immediately prior to any particular
meeting of the Company’s shareholders which involves a
contest for the election of directors, fail to constitute a
majority of the members of the Board following such
election.
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“ Affiliate ”
shall mean any corporation, partnership, trust or other
entity of which the Company and/or any of its Affiliates
directly or indirectly owns a majority of the outstanding
shares of any class of equity security of such corporation,
partnership, trust or other entity and any corporation,
partnership, trust or other entity which directly or
indirectly owns a majority of the outstanding shares of any
class of equity security of the Company or any of its
Affiliates.
“ Voting Stock
” shall mean, with respect to a corporation, the
capital stock of any class or classes of that corporation
having general voting power under ordinary circumstances, in
the absence of contingencies, to elect directors of such
corporation and, with respect to any other entity, the
securities of that entity having such general voting power to
elect the members of the managing body of that
entity.
(h)
Notice of
Termination . Any purported termination of
employment shall be communicated through written notice
indicating the specific provision in this Agreement relied
upon.
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