Annual report pursuant to section 13 and 15(d)

Note 11: Employment Agreements

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Note 11: Employment Agreements
12 Months Ended
Dec. 31, 2011
Compensation and Employee Benefit Plans [Text Block]
Note 11:  Employment Agreements

On January 1, 2008, the Company entered into Employment Agreements with four of the Officers of the Company for a term of five years, expiring on December 31, 2012.  The agreements specified increasing annual salary amounts, car allowances, participation in benefit plans, vacations, and stock option plans, and severance benefits.

Authorized salaries for each officer for the fiscal year ended December 31, 2010 were $210,000.  On April 1, 2009, each of the four officers agreed to a salary reduction to $125,000.  On February 11, 2011 each of the four officers agreed to a retroactive salary reduction for 2010 to $80,000 inclusive of the car allowance.  As of September 30, 2010, this balance was converted to subordinated, long term debt.

On April 26, 2011, the Company and each of the four Officers agreed to terminate the existing employment agreements and enter into new five-year employment agreements unless written termination is provided by either party.  Each employment agreement provides for a graduated base salary beginning at $165,000 per annum retroactive to March 20, 2011 and continuing to December 31, 2011 and increasing to $195,000 for 2012, $225,000 for 2013. After 2013, the agreement provides for base salary increases at the discretion of the Board of Directors, with a minimum 5% increase.  In addition to base salary, each Executive continues to receive an annual car allowance of $11,400. The following is a schedule by year of the future minimum salary payments related to these employment agreements:

2012
 
$
780,000
 
2013
   
900,000
 
2014
   
945,000
 
2015
   
992,250
 
Total
 
$
3,617,250