EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered into this 1st day of April,
2007, is by and between Sun Reporter, Inc. (formerly known as Photon
Pharm, Inc.,) ("Employer") and Xxxxxxx X. Xxxxxxxxx("Employee").
EXPLANATORY STATEMENT
WHEREAS, Employer is engaged in the business of restoring a dormant
corporation to active status and developing a public entity qualified
as a "business development corporation" with the SEC and commencing
operations to assist emerging developing companies with their capital
needs; and
WHEREAS, Employer desires to employ Employee as Chairman of the Board
of Directors and Treasurer and Secretary of the Corporation and its
Chief Executive Officer, and Employee desires to become employed by
Employer, all on the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the Explanatory Statement, which
shall be deemed to be a substantive part of this Agreement, and the
mutual covenants and agreements hereinafter contained, the parties
hereby agree as follows:
1. Employment. Employer hereby employs Employee as Chairman of the
Board of Directors and Treasurer and Secretary of the Corporation and
its Chief Executive Officer, and Employee hereby accepts such
employment by Employer upon all of the terms and conditions hereinafter
set forth.
2. Duties.
a. Employee agrees to devote twenty to forty hours per week or
such further time as is required and his best efforts to the
performance of his duties for Employer and agrees to perform such
other duties as are assigned to Employee from time to time by the
Board of Directors of Employer ("Board of Directors"). Employee
agrees to observe and comply with the rules and regulations of
Employer as adopted from time to time by the Board of Directors.
3. Term. The term of employment under this Agreement shall be for
the three year period beginning April 1, 2007 and ending March 31, 2010
and shall be automatically renewed for two successive three year
periods ending March 31, 2013 and March 31, 2016 thereafter, unless
sooner terminated as hereinafter provided.
4. Compensation. For all the services to be rendered by Employee in
any capacity hereunder, including services as an officer, member of the
Board of Directors, or any other duties assigned to Employee by the
Board of Directors, Employer shall pay Employee the following
compensation:
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a. An annual base salary of $180,000 payable in equal
installments during each year of this Agreement as follows: as
cash is available, semi monthly payments of $7500.00 each, less
any required or authorized deductions for taxes or benefits for
which Employee is responsible for cost sharing. The base salary
may be increased, but not decreased, each year in an amount
determined by the Board of Directors, utilizing as a guide and a
ceiling, the percentage amount of increase in the Corporation's
stock value during the preceding year. Upon termination of this
Agreement, the base salary shall be prorated through the date of
termination.
b. In addition, a bonus equal to 3% of Operating Cash Flow,
which Operating Cash Flow is defined in paragraph d hereof.
c. Employer shall make reasonable estimates of the Operating
Cash Flow for each quarter and shall pay to Employee at the end
of each quarter the estimated bonus which will be payable to
Employee pursuant to paragraph b. Promptly after the Operating
Cash Flow for each year of this Agreement is determined,
appropriate adjustments shall be made if the bonus payable to
Employee hereunder differs from the aggregate bonus payments made
to Employee during such year. In such case, Employer shall
promptly pay to Employee, or Employee shall promptly pay to
Employer, as the case may be, the amount of such difference. For
purposes of this paragraph, any retirement plan contributions
paid or accrued on behalf of Employee shall be deemed to be part
of the compensation of Employee for the year with respect to
which such contributions are paid or accrued. Actual Operating
Cash Flow for each year shall be determined within sixty (60)
days after the end of each such year.
d. For purposes of this paragraph, the term "Operating Cash
Flow" shall mean the net income of Employer determined on a cash
basis of accounting and otherwise in accordance with generally
accepted accounting principles, increased by (aa) all non-taxable
funds received by Employer, and (bb) the amount of depreciation
and amortization deductions taken in computing such net income,
and decreased by (cc) payments upon the principal of any
obligations or debts of Employer, (dd) expenditures for capital
equipment, improvements and replacements and such reserves for
such equipment, improvements, replacements, repairs, anticipated
expenses and working capital as shall be determined by the Board
of Directors, and (ee) any other expenditures not deducted in
computing the net income of Employer.
Upon termination of this Agreement, the bonus payable to Employee shall
be prorated through the date of termination based on the estimate of
Operating Cash Flow under paragraph c hereof. Any adjustments required
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under paragraph d hereof shall be made promptly after the Operating
Cash Flow for that part of the year through the date of termination is
determined.
All compensation paid to Employee shall be subject to customary
withholding and employment taxes.
5. Working Facilities. Employee shall be provided with such
facilities, office supplies and services suitable to his position and
adequate for the performance of his duties as determined by the Board
of Directors.
6. Expenses.
a. The Employer shall pay or reimburse Employee for the
reasonable and necessary business expenses of Employee including
automobile expenses up to a maximum amount of $2000 per month
upon Employee's submission of substantiation thereof. In
addition, Employer shall reimburse Employee for the reasonable
and necessary business expenses incurred while traveling on
Employer's business. Any expenses in excess of this amount shall
be reimbursed only upon approval by the Board of Directors.
b. Employee is required to maintain and use as necessary an
automobile and home telephone in connection with Employee's
performance of duties under this Agreement, all of which shall be
at Employee's expense, except as may be furnished or reimbursed
as provided above or otherwise from time to time by Employer at
its expense. Employee shall also, at his own expense, carry
public liability insurance coverage protecting Employee against
claims arising out of the use of such automobile (or other motor
vehicle) in the course of his employment hereunder) in such
amounts as the Board of Directors may request.
c. If any salary, compensation, travel, entertainment or other
expense, paid or incurred by Employer to or on behalf of Employee
is disallowed in whole or in part as a deductible expense of
Employer for federal income tax purposes, Employee shall
reimburse Employer to the full extent of the disallowed portion.
Such disallowed amount shall be repaid to Employer within sixty
(60) days after the date on which Employer pays the deficiency
with respect to such disallowed amount. It is further understood
that Employer shall not be required to legally defend any
proposed disallowance by the Internal Revenue Service and the
amount required to be reimbursed by Employee shall be the amount,
as finally determined by agreement or otherwise, actually
disallowed as a deduction.
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7. Vacation and Holidays. Employee shall be entitled to vacation
with pay of up to six weeks during each year during the term of this
Agreement. Vacations shall be taken by Employee at such time or times
as shall be approved by Employer which approval shall not be
unreasonably withheld. In addition, Employee shall be entitled to such
holidays as Employer may approve in advance. Unused days of vacation
and holidays may be carried over from one year to another and
additional compensation will not be paid for vacation time or holidays
not taken during any year.
8. Sickness and Disability.
a. Employee shall be entitled to such number of days sick leave
in each year during the term of this Agreement because of
sickness or accident (not resulting in Employee becoming
"disabled," as that term is hereinafter defined) as may be
approved by the Board of Directors] without any adjustment in his
salary. Sick leave may be used by Employee only for a bona fide
illness, disease, or other medical impairment. Unused sick leave
may be carried over from one year to another. In the event that
Employee takes sick leave in excess of the number of days
allowed, then Employee shall not be paid his salary attributable
to such excess days.
b. Should Employee become disabled as a result of sickness or
accident and unable to attend to his duties prescribed in this
Agreement, his salary shall be reduced in accordance with the
following schedule during the continuance of such disability and
for a period not exceeding 12 months for each continuous
disability.
9. DISABILITY BENEFIT SCHEDULE
Percentage of Employee's
Months Disabled Salary To Be Paid
One to three 75%
Four to six 60%
Seven to nine 45%
Ten to Twelve 30%
More than Twelve 0%
The salary paid to Employee under this paragraph shall be reduced by
any disability insurance proceeds received by Employee.
a. Should such disability continue for a period of twelve (12)
months, this Agreement shall, at the end of such twelve (12)
months, be automatically terminated. If, however, prior to the
end of such twelve (12) month period, Employee's disability shall
have ceased and Employee shall have commenced to perform his
duties hereunder, this Agreement shall continue in full force and
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effect and Employee shall be entitled to resume his employment
hereunder and to thereafter receive his full compensation as
though Employee had not been disabled; provided, however, that
unless Employee shall perform his duties hereunder for a
continuous period of at least sixty (60) consecutive business
days following a period of disability, Employee shall not be
entitled to start a new twelve (12) month period of disability.
In such event, the running of the original twelve (12) month
period of disability shall be suspended during the time of
Employee's performance of his duties for less than sixty (60)
consecutive business days and shall continue upon Employee
becoming disabled again.
b. In the event Employee becomes disabled, Employee shall not be
entitled to any sick leave at full salary during such period of
disability in addition to the disability benefits under the
Disability Benefit Schedule, it being understood that Employee,
if disabled, shall receive only such benefits for such period of
time as provided for in said Disability Benefit Schedule.
c. For purposes of this Agreement, Employee shall be deemed
disabled if Employee (1) has been declared legally incompetent by
a final court decree (the date of such decree being deemed to be
the date on which the disability occurred), (2) receives
disability insurance benefits for total disability from any
disability income insurance policy maintained by Employer or
Employee for a period of twelve (12) consecutive months (which
period shall be deemed to include the waiting period), or (3) has
been found to be disabled pursuant to a Disability Determination.
A "Disability Determination" means that Employee, because of a
medically determinable disease, injury or other mental or
physical disability, is unable to perform substantially all of
his regular duties to Employer on a substantially full-time basis
and that such disability has lasted or reasonably is expected to
last at least twelve (12) months. In determining whether
Employee has been disabled for twelve (12) months, the twelve
(12) month period shall not be deemed interrupted by a return to
work for less than five consecutive business days. A disability
determination prior to the expiration of such twelve (12) month
period may be made only based upon and in accordance with the
written opinion of a physician appointed by the Board of
Directors. If Employee disagrees with the opinion of this
physician (the "first physician"), Employee may engage at his own
expense another physician (the "second physician") to examine
Employee. If the first and second physicians agree in writing
that Employee is or is not disabled within the meaning of this
paragraph, such written opinion shall be conclusive on the issue
of disability. If the first and second physicians disagree on
the disability of Employee, they shall choose a third consulting
physician (whose expense shall be borne by the Employer), and the
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written opinion of a majority of these three physicians shall be
conclusive as to Employee's disability. The date on which
disability shall be deemed to have occurred shall be upon the
expiration of the twelve (12) month period of disability or, if
earlier, on the date of any written opinion conclusively finding
Employee to be disabled in compliance with the provisions of this
paragraph.
10. Fringe Benefits. Employer agrees to provide Employee with such
fringe benefits as are generally provided to all employees of Employer.
11. Termination.
a. Employer may terminate this Agreement without cause and at
any time (except during a period when Employee is disabled) which
termination shall be effective on the 90th day following the
provision of notice of termination by Employer to Employee.
Employee may terminate this Agreement without cause only upon at
least 30 days written notice.
b. This Agreement shall also terminate (i) upon Employee's
death,(ii) upon Employee being disabled for a period of 12
months, (iii) for cause, pursuant to paragraph c hereof, or (iv)
upon Employer's cessation of business activity. On or after the
giving of any notice of termination hereunder Employer shall have
the right to terminate the active services of Employee at any
time after such notice is given and to pay Employee the
compensation due to Employee for the duration of the notice
period, if any.
c. Notwithstanding any other provision of this Agreement, if
Employee (i) is convicted of a felony or other offense involving
moral turpitude, (ii) fails or refuses to faithfully and
diligently perform the duties of his employment and the
provisions of this Agreement, (iii) breaches his fiduciary duty
of loyalty to Employer, (iv) engages in fraud, embezzlement,
theft or other dishonest or criminal conduct, or (v) otherwise
materially breaches this Agreement, then Employee's employment
shall be terminated for cause immediately.
d. Upon termination of Employee's employment for any reason,
Employer shall pay to Employee severance compensation equal to
three years of the compensation due to Employee under Paragraph 4
above, the figure to be determined by the amount paid to Employee
over the preceding twelve month period prior to termination,
payable in thirty six consecutive monthly payments, commencing on
the first day of the first month following Employee's termination
of employment hereunder.
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12. Covenants Regarding Confidential and Proprietary Information.
a. The Employee acknowledges that in and as a result of his
employment by Employer, Employee will be making use of,
acquiring, and/or adding to confidential and proprietary
information of Employer, including, but not limited to, trade
secrets. Such trade secrets and other confidential and
proprietary information shall be deemed to include, but not be
limited to, the business methods, ideas, disclosures and
improvements, whether patented or unpatented, copyrightable
material, copyrights, trademarks, tradenames, service marks,
patents, all applications and registrations pertaining to the
foregoing, processes, systems, procedures, policies, manuals,
confidential reports, plans, data and data bases, lists of
customers and potential customers, the nature and type of
services rendered by Employer and the fees paid for them, and all
proceeds, products, variations, additions, improvements,
enhancements, modifications and derivations thereof. As a
material inducement to Employer to enter into this Agreement and
to pay to Employee the compensation stated in paragraph 4,
Employee covenants and agrees that Employee shall hold in strict
confidence all of such trade secrets and other confidential and
proprietary information and shall not, at any time during or
following the term of his employment (except in connection with
his duties hereunder), directly or indirectly divulge, disclose
or make use of for any purpose whatsoever any of such trade
secrets or other confidential or proprietary information of
Employer.
b. Employee agrees and understands that any of the trade
secrets and other confidential and proprietary information of any
of the types described in this paragraph which are made or
conceived by Employee during the term of his employment with
Employer shall be and become the property of Employer. During
the term of this Agreement, Employee shall promptly disclose to
Employer in writing or otherwise in tangible form all
information, details and data pertaining to any of the foregoing
trade secrets and other confidential or proprietary information.
If requested by Employer during the term of this Agreement or
thereafter, Employee shall execute and deliver such formal
transfers and assignments as are required to vest all right,
title and interest in and to any of the foregoing trade secrets
and confidential and proprietary information in Employer.
c. Upon termination of Employee's employment Employee shall
immediately return to Employer all copies of Employer's trade
secrets and other proprietary and confidential information
including, but not limited to, all sample equipment, price lists,
sales leads, quotation guides, outstanding quotations, books,
manuals and sales literature and paraphernalia, customer records,
business cards, correspondence, contacts, orders and other papers
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and documents in Employee's possession which pertain or relate to
any of Employer's trade secrets or other proprietary and
confidential information or otherwise with respect to Employer's
business whether furnished to Employee by Employer or compiled or
obtained by Employee in the course of Employee's employment. All
of such property, books, records and other documents are and
shall remain at all times the property of Employer and Employee
agrees that Employer may withhold any compensation otherwise due
to Employee until such time as the provisions of this paragraph
are complied with.
d. In the event of a breach or threatened breach by Employee of
any of the provisions of this paragraph, Employer, in addition
to, and not in limitation of, any other rights, remedies, or
damages available to Employer at law or in equity, shall be
entitled to preliminary, temporary and permanent injunctions,
orders or decrees in order to enjoin, prevent and/or restrain any
such breach by Employee or by Employee's partners, agents,
representatives, servants, employers, employees, family members,
and/or any and all persons directly or indirectly acting for or
with Employee.
13. Remedies for Breach of Employee's Covenants Regarding
Confidential Information
In the event of a breach or threatened breach of any of the covenants
in paragraph 11, Employer shall have the right to obtain monetary
damages for any such breach and equitable relief, including, but not
limited to, a preliminary, temporary and permanent restraining order
and injunction against Employee or against Employee's partners, agents,
representatives, servants, employers, employees, family members, and/or
any and all persons acting directly or indirectly by or with Employee,
to enjoin, prevent and/or restrain any further breach. The rights and
remedies set forth in this paragraph 12 shall be independent of each
other, shall be severally enforceable, and shall be in addition to any
other rights or remedies available to Employer under law or in equity.
14. Arbitration. Except as herein otherwise provided, any claim or
controversy arising out of or relating to this Agreement or any breach
hereof shall, upon the request of either Employer or Employee, be
submitted to and settled by arbitration in accordance with the rules of
the American Arbitration Association then in effect. Any decision made
pursuant to such arbitration shall be binding and conclusive upon
Employer and Employee and judgment upon such decision may be entered in
any court having jurisdiction thereof.
15. Waiver of Breach or Violation not Deemed Continuing. The waiver
by either party of a breach or violation of any provision of this
Agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach hereof.
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16. Notices. Any and all notices required or permitted to be given
under this Agreement shall either be furnished in writing, personally
delivered or sent by certified mail, postage prepaid, return receipt
requested or by overnight mail, to his last known residence in case of
Employee or to its principal office in the case of Employer. Any such
notice shall be effective as of the time of personal delivery, three
(3) business days following mailing by certified mail, or on the date
of delivery by overnight mail.
17. Governing Law. This Agreement shall be interpreted, construed
and governed according to the laws of the State of Maryland.
18. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective personal and legal
representatives, successors and assigns except that Employee may not
assign this Agreement or any part thereof.
19. Paragraph Headings. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed
as a part of this Agreement.
20. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and together shall constitute
one and the same agreement.
21. Entire Agreement. This Agreement constitutes the sole and entire
agreement of the parties with respect to the matters contained herein
and any representation, inducement, promise or agreement, whether oral
or written, which pertains to such matters and is not embodied herein
shall be of no force or effect.
22. Amendment. This Agreement may be amended only by a written
instrument executed by Employer and Employee.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
ATTEST: Sun Reporter, Inc.
(SEAL) By:
WITNESS:
/s/Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
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