On January 1, 2004, the Company entered into an employment agreement with its President, Michael Mak, which provided for an annual salary of $100,000, plus bonuses of up to 1% of base salary. On January 15, 2004, the Company amended the employment agreement to adjust the salary to $60,000 per year plus bonuses of up to 1% of net sales of BonusAmerica over and above $10 million, valid for one year.
On August 18, 2006, the Company entered into a new employment agreement with its President, Michael Mak, for an initial term of five years renewable for an additional five-year period until terminated by the parties. Compensation includes (i) a base salary of $60,000 per year, (ii) bonuses ranging from 0% to 120% of base salary; (iii) a signing bonus in the total gross amount of 2,000,000 shares of restricted common stock payable upon execution of the employment agreement, subject to certain terms and conditions, and (iv) a stock award of 500,000 shares of Series A Convertible Preferred Stock, convertible at 1 preferred share to 200 shares of common stock, payable upon execution of the employment agreement. As of the date of this filing, neither the common stock nor the Series A Convertible Preferred Stock have been issued.
For the year ended December 31, 2006, the Company's President's salary charged to operations was $30,000 (2005: $60,000).
The yearly base salary of our former CEO Mr. Michael Mak for the years of 2008 and 2007 was $60,000 of which $0 was paid in 2007 and $0 was paid in 2008. Mr. John Leper and Mr. Hin Lee Kwong received no salary in 2008 or 2007.
(2)Pursuant to an Employment Agreement (dated August 18, 2006) with Mr. Michael Mak, our former Chief Executive Officer, Mr. Mak received 500,000 shares of Series A Convertible Preferred Stock (“Series A Shares”), which is convertible to 100,000,000 shares of the Company’s Common Stock. On October 9, 2007, Mr. Mak requested that 100,000 shares of the Series A Shares be converted into 20,000,000 144 Restricted shares of the Company’s Common Stock, which have been included as part of Mr. Mak’s total beneficial ownership. On November 17, 2008, Mr. Mak notified the Board of Directors that he was surrendering 150,000 shares of Series A Stock back to the Company for cancellation. The Board of Directors approved the surrendering of the 150,000 shares of the Series A Stock. After the return of the 150,000 shares of the Series A Stock, Mr. Mak still controls 250,000 shares of the Series A Stock. The Company contacted its transfer agent to cancel the 150,000 shares of the Series A Stock.
(3)Mr. Michael Mak, our former Chief Executive Officer, former interim Chief Financial Officer and former director, has 250,000 shares of Series A Convertible Preferred Stock (“Series A Shares”), which is convertible to 50,000,000 Shares of the Company’s Common Stock. Pursuant to the Certificate of Designation, the Series A Shares have the right to vote as if converted. If Mr. Mak was to convert all his Series A Shares, the total outstanding would increase to 184,862,000 shares. Mr. Mak, through his holdings and that of Stanford would then control 45.2% of the Company’s outstanding shares.
Ok, so if you add the 150K he paid himself for 04, 05 & 06, add that to the 547K loan and divide by the total number of years he was CEO it comes to about 139K per year salary. Not bad for the CEO of a penny stock that only had 3 profitable qtrs of the 5 years he served as CEO but not enviable either. Whether it was enough to cover all expenses associated with the job, I don't know.
But the point is he still holds a ton of series A stock that represents the rest of his compensation for his term as CEO and therefore still holds formidable sway in the affairs of the company. He is still an affiliate of the company and if he was to convert and sell all those shares in one fell swoop he would get about 250K for the lot at the current price. But he legally can't do that. What he can do is use his influence and connections to push the stock price higher over time and sell legally through 144 rules applying to affiliates and 5% holders.
This stock has a long row to hoe but there is still hope.
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