KeyStar Corp. appointed Mark Thomas ("Thomas as new CEO

Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 


Amendment of Officer's Compensation


On January 10, 2023, the Board appointed Mark Thomas ("Thomas") as the new Chief Executive Officer, Principal Executive Officer, President and Chief Technology Officer of the Company. In lieu of an employment agreement, Thomas received a written offer letter (the "Offer") that stated he will receive an annual salary of $380,000, and he is eligible to participate in the Company's benefit plans. The Offer also stated that by February 1, 2023, the Board will set milestones for incentive compensation (in either annual salary increases or bonuses) in such amounts that, if all of the milestones are met, Thomas' total annual compensation will reach $500,000 or more (the "Incentive Compensation"). On February 6, 2023, we entered into a supplement to the Offer (the "Supplement") with Thomas that sets forth the following terms and conditions relating to the Incentive Compensation.


Within 60 calendar days after we have $1,000,000 or more in gross gaming revenue (defined as sports betting handle minus pass through betting wins, plus betting fees), the Board (or its compensation committee, if any) will engage at least two executive compensation consultants to provide reports to the Board regarding compensation of Chief Executive Officers of comparable companies. The Board will timely review and consider such reports in determining potential adjustments to Thomas' annual salary. Any adjustments will be at the Board's sole discretion.


In the event that we receive a sports betting license (or equivalent) in the State of Tennessee, within 30 days after the issue date, Thomas will receive a cash bonus of $50,000.00.


For the next 24 months, in each event that we receive a sports betting license (or equivalent) in a new jurisdiction (other than the State of Tennessee), within 30 days after the issue date, Thomas will receive a cash bonus in an amount equal to the lesser of: (i) $100,000; or (ii) the product of 0.01% multiplied by the subject jurisdiction's trailing 12-month sports betting handle (using the most recent 12 months reported by Legal Sports Report which currently posts such data at www.legalsportsreport.com/sports-betting/revenue/). After the 24-month period, the Board (or its compensation committee, if any) will review and consider an extension or adjustment to this bonus structure. Any extensions or adjustments will be at the Board's sole discretion.


If our net loss for our 2022-2023 fiscal year, as determined by our Chief Financial Officer, is less than $6,197,719, Thomas will be eligible for a cash bonus in an amount equal to 8% of the difference of the actual net loss minus and $6,197,719. The cash bonus will be due within 30 days after the determination of the 2022-2023 fiscal year net loss.


If Thomas' employment is terminated without "cause," provided that he executes and returns a general release of claims to us (in a form reasonably acceptable to us), he will be entitled to a severance through continued payments of his current annual base salary of $380,000 for 6 months. A change to Thomas's title(s) or responsibilities will not constitute a termination without "cause' if he is offered continued employment in a different role unless the continued employment is offered at a lower annual base salary or unless he is asked to permanently relocate outside of the Miami metro area for work. The Supplement defines "cause" as: (i) gross negligence, recklessness, intentional misrepresentation or willful misconduct by Thomas in the performance of his duties; (ii) the commission by Thomas of any act of fraud, embezzlement, theft or other financial dishonesty, or of any felony, or to any crime involving moral turpitude; (iii) the breach by Thomas of his Employment Conditions Agreement (or any other replacement agreement); (iv) Thomas' material violation of state or federal law relating to sexual harassment or other prohibited harassment or discrimination; or (v) Thomas' failure to comply with any policy of the Company of which he had notice.


The foregoing summary of the Supplement is qualified in its entirety by reference to the full text of the Supplement which is attached as Exhibit 10.1 hereto, and is incorporated by reference herein. You are urged to read said exhibit attached hereto in its entirety.


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