This sheds some light on this frivolous suit!!!
Employment Agreement with John Loughlin
On March 16, 2007 we entered into an Employment Agreement with Mr. John Loughlin to serve as our President until January 1, 2009, subject to annual renewal thereafter and prior termination in accordance with the terms of the agreement. We entered into this employment agreement in anticipation of a proposed agreement with Las Vegas Television Network, Inc.; however, due to the failure of FSBO Media Holdings and Wyndam Media Group to deliver sponsors who were willing to fund production costs, we determined that we could not fund our responsibilities under the memorandum of understanding and the agreement with Las Vegas Television Network was not executed. Under the terms of the employment agreement, we agreed to compensate Mr. Loughlin follows:
• a fixed salary of $150,000 annually for the period of March 1, 2007 through December 1, 2007 and thereafter $180,000 annually through December 31, 2008,
• five year options to purchase 2,000,000 shares of our common stock with an exercise price of $.24 per share, of which options to purchase 250,000 shares vested immediately upon the execution of the agreement and the remaining options vest at the rate of 250,000 per calendar quarter, on the first day of each calendar quarter beginning on April 1, 2007. The options were subject to accelerated vesting in the event of Mr. Loughlin's death or disability. In the event the agreement was terminated for cause, all unexercised and/or unvested options immediately terminated, and
• bonuses at the discretion of the Board of Directors.
The agreement contained customary confidentially, non-compete and invention assignment provisions. We could terminate the agreement for cause, as described in the agreement, in which event his salary immediately terminated. We could also terminate the agreement without cause. In this event, he was entitled to his salary through the date of termination, any earned bonus and a severance payment equal to his base salary
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through the balance of the term of the agreement, payable monthly, and for each full or partial year of at least six months remaining in the term of the agreement an amount equal to the average of the annual bonuses earned by Mr. Loughlin during the preceding two years, payable on the date such bonuses would have been paid had he still been employed by our company. We could also terminate the agreement in the event of Mr. Loughlin's disability, in which event we would have paid him a salary equal to 50% of his then current fixed salary through the balance of the term of the agreement, as well as paying him all other compensation as may be due thereunder.
Finally, if a change of control of our company occurred during the term of the agreement, Mr. Loughlin could terminate the agreement for "good reason" as defined in the agreement. In this event, we would be obligated to pay him an amount equal to 2.99 times his average annual compensation, including bonuses, if any, during the three years preceding the date of termination. For the purposes of the agreement, "change of control" will be deemed to occur on the effective date of (i) the sale of all or substantially all of our assets, or (ii) a merger, acquisition or similar transaction that results in more than 50% of our outstanding equity securities being owned by persons who do not currently own 50% or more of our securities.
In view of our inability to consummate our agreement with Las Vegas Television Network, in May 2007 we reached an understanding with Mr. Loughlin to suspend the parties’ obligations under the employment agreement until such time as performance was possible, upon payment to Mr. Loughlin of $25,000 and the issuance to him of 500,000 options exercisable at $.24 per share. Notwithstanding this understanding, on or about July 7, 2007, Mr. Loughlin commenced suit against us claiming a wrongful termination of our employment agreement with Mr. Loughlin.
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