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10. Commitments and contingencies
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Dec. 31, 2011
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| Commitments and Contingencies Disclosure [Text Block] |
There
is no other litigation of any significance with the
exception of the matters that have arisen under, and are
being handled in, the normal course of business.
Litigation
Involving Former Executive Officer
As
previously reported, on April 7, 2010, Bruce McKinnon, the
former CEO of the Company, and the Company entered into an
Agreement Re: Collection on Judgment
(“Judgment”) (the “Settlement
Agreement”), wherein McKinnon, among other
things, agreed to cease further collection efforts on the
Judgment, and the Company, among other things, agreed to
satisfy the Judgment for, and McKinnon agreed to accept as
full and final satisfaction of the Judgment, subject to
certain payment waivers described below, a total amount of
$360,000, plus interest of ten percent (10%) per annum from
March 15, 2010, on the unpaid balance until paid, payable
as follows: $30,000 on April 7, 2010; $85,000 on
or before April 15, 2010; and, $15,000 per month commencing
on June 1, 2010, until paid. As of
December 31, 2011, all payments were made on time and the
balance has been paid in full.
Employment
agreement
Agreement
with Cecil Bond Kyte. On January 30, 2009, the
Company entered into an employment agreement with Cecil
Bond Kyte, pursuant to which he serves as our Chief
Executive Officer. The initial term of the
agreement became effective on January 30, 2009 and expires
on January 30, 2010 and renews automatically for addition
one-year periods unless either party has given notice of
non-extension prior to October 30, 2010. The
agreement provides for a base compensation of $200,000 per
year. Mr. Kyte is eligible to participate in the
Company’s incentive and benefit plans, including
eligibility to receive grants of stock options under the
2004 plan.
Mr.
Kyte shall be eligible to receive an annual cash bonus in
an amount equal to 2% of the Company’s net profit, if
any, for its most recently completed fiscal year, computed
in accordance with generally accepted accounting principles
applied consistently with prior periods. The
bonus shall be payable, if at all, on the anniversary date
of employment each year of the term; provided that no bonus
shall be paid if the Executive is not, on such payment
date, in the employ of the Company.
Mr.
Kyte shall also receive an option (the
“Option”) to purchase a number of shares (the
“Option Shares”) of the Company’s common
stock equal to the result of (A) 100,000 divided by (B) the
closing price per share of the Company’s Common Stock
on the first anniversary of the Effective
Date. The Option shall be an incentive stock
option, shall be exercisable at the closing price per share
on the first anniversary of the Effective Date, shall be
exercisable for ten years from the date of grant and shall
vest on the second anniversary of the Effective
Date.
Amendment
To Kyte Employment Agreement
On
March 1, 2011, the Board of Directors (the
“Board”) of Save The World Air, Inc. (the
“Company”) approved an amendment (the
“Amendment”) to the employment agreement
between the Company and the Company and Kyte have agreed to
an amendment of the Employment Agreement, providing for
non-cash performance compensation in the form of
nonqualified stock options.
Kyte
has agreed to continue to serve in the role of CEO of the
Company through at least January 29, 2016
and
in furtherance and consideration of the foregoing, the
Board determined to amend the Employment Agreement and
grant Kyte nonqualified stock options to acquire shares of
common stock of the Company under the following terms and
conditions:
Stock Option
Grant of 17,600,000 Shares at an Exercise Price
of $0.25 per share exercisable for 10 years and
will expire on January 30, 2021. (see Note
9)
Twenty
percent (20%) of the Option shall vest on the first
anniversary of the Effective Date; twenty percent (20%) on
the second anniversary of the Effective Date; twenty
percent (20%) on the third anniversary of the Effective
Date; twenty percent (20%) on the fourth anniversary of the
Effective Date; and, twenty percent (20%) on the fifth
anniversary of the Effective Date;
Amendment
#2 to Kyte Employment Agreement
This
Second Amendment to Employment Agreement is made and
entered into by and between Save The World Air, Inc. and
Cecil Bond Kyte effective as of December 1, 2011 with
reference to the following:
It
is the desire of the Company and Executive to amend the
Employment Agreement, pursuant to the terms and conditions
of this 2nd
Amendment. Compensation of the Employment
Agreement is hereby amended, as follows: Executive shall
receive a base salary of $300,000 per year. The
Employment Agreement would remain in full force and effect
through at least January 29, 2016, unless the Company
determines to terminate the employment agreement.
Leases
In
March 2009, the Company entered into a sublease agreement
for its executive offices in Santa Barbara,
California. The term of the lease was for $3,520
per month from April 1, 2010 through December 31, 2010 and
$3,630 per month from January 1, 2010 to December 31,
2010. In November 2010, the
Company amended the lease agreement. Pursuant to
the amendment, the term of the lease was for $5,830 per
month from January 1, 2011 to December 31, 2013.
Total
rent expense under this lease and other operating
leases in effect during the years ended December 31, 2011
and 2010, was $138,840 and $112,320,
respectively. The following is a schedule by
years of future minimum rental payments required under the
non-cancellable operating leases as
of December 31, 2011.
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