NOTE 5 - DUE TO RELATED PARTIES
|12 Months Ended|
Dec. 31, 2011
|Compensation Related Costs, General [Text Block]||
NOTE 5 – DUE TO RELATED PARTIES
On September 1, 2010, the Company entered into Amendment No 1 to the Employment Agreement with Mark Meller, President and Chief Executive Officer of the Company, whereby the term of the Employment Agreement was extended to September 15, 2017. As consideration, the Company agreed to pay Mr. Meller the sum of $180,000 the first year with a 10% increase every year thereafter, as well as a monthly travel expense allowance of $600 and an auto allowance of $800. The employment agreement with Mr. Meller also provides for a severance payment to him of three hundred percent (300%), less $100,000 of his gross income for services rendered to the Company in each of the five prior calendar years should his employment be terminated following a change in control, as defined in the employment agreement. Mr. Meller will also be paid the sum of $350,000 upon the completion of the Spin-Off, and compensation retroactive to August 1, 2003, at the annual rate dictated by the terms of the employment agreement, as a result of the Company acquiring SWK, Inc. on June 2, 2004.
On June 29, 2011, Mr. Meller forgave outstanding liabilities representing unpaid salary, unpaid expense and auto allowances, and the one-time payment in connection with a previous transaction in the amount of $1,338,967. Such amount is recorded as a contribution of capital in Additional Paid-In Capital in the accompanying balance sheet.
During the year ended December 31, 2010, the Company isssued 83,638 shares of Class A Common stock to Mr. Meller for repayment of $1,515 in deferred compensation with a fair value of $27,779. The difference in the fair value and the amount of deferred compensation repaid was charged to general and administrative expense in the amount of $27,264 and included in operating expenses in the statement of operations.
Total amounts owed to Mr. Meller as of December 31, 2011 and December 31, 2010, representing unpaid salary, unpaid expense and auto allowances, accrued interest, and the one-time payment in connection with a previous transaction, totaled $6,335 and $1,293,941.
The entire disclosure for compensation costs, including compensated absences accruals, compensated absences liability, deferred compensation arrangements and income statement compensation items. Deferred compensation arrangements may include a description of an arrangement with an individual employee, which is generally an employment contract between the entity and a selected officer or key employee containing a promise by the employer to pay certain amounts at designated future dates, usually including a period after retirement, upon compliance with stipulated requirements. This type of arrangement is distinguished from broader based employee benefit plans as it is usually tailored to the employee. Disclosure also typically includes the amount of related compensation expense recognized during the reporting period, the number of shares (units) issued during the period under such arrangements, and the carrying amount as of the balance sheet date of the related liability.
Reference 1: http://www.xbrl.org/2003/role/presentationRef