Exhibit 10.9
DYNASIL CORPORATION OF AMERICA
AGREEMENT OF EMPLOYMENT
THIS AGREEMENT is effective as of October 1, 2004, by and
between DYNASIL CORPORATION OF AMERICA, a New Jersey corporation
(the "Company"), with offices at 000 Xxxxxx Xxxx, Xxxx Xxxxxx,
Xxx Xxxxxx, 00000, and XXXXX X. XXXXXX ("Employee"), whose
address is 000 Xxxxxxxx Xxxxx, Xxxxxxx Xxxx, XX 00000.
1. Employment. Effective October 1, 2004, Company agrees to
employ Employee as President and Chief Executive Officer (and
Secretary, until a replacement can be elected or appointed) of
the Company, with such duties as are customary for such position.
Employee shall perform these duties subject to the direction and
supervision of the Board of Directors of the Company. Employee
accepts such continued employment and agrees to devote his full
time and skills to the conduct of Company's business, performing
to the best of Employee's abilities such duties as may be
reasonably requested by Company. Employee agrees to serve Company
diligently and faithfully so as to advance Company's best
interests and agrees to not take any action in conflict with
Company's interests. In addition to the foregoing, to the extent
permitted by applicable law, and subject to obtaining all
required shareholder and director votes, Company agrees to
endeavor to have Employee elected to Company's Board of
Directors.
2. Term.
(a) The term of employment of Employee hereunder shall be
for a period of three (3) years commencing on October 1, 2004,
subject to the conditions set forth herein.
(b) This Agreement shall be automatically renewed at the end
of the initial Term for additional terms of one (1) year;
provided, however, either party may terminate this Agreement at
the end of a term by providing written notice to the other party
no later than ninety (90) days prior to the expiration of the
then current term.
(c) Employee may terminate this Agreement within thirty (30)
days after any of the following events: a significant diminution
in Employee's executive responsibilities; relocation of the
Company's principal executive offices to a location that is more
than fifty (50) miles from Mullica Hill, NJ; or Employee shall
not have beneficial ownership of at least ten percent (10%) of
the Company's outstanding shares of common stock.
3. Compensation.
(a) Base Salary. Employee shall receive as base salary,
during the Term of this Agreement, the sum of One Hundred Ten
Thousand Dollars ($110,000) per annum payable in accordance with
the Company's regular payroll schedule.
(b) Bonus. In each year of the Term of this Agreement, the
Company agrees to pay Employee an annual performance bonus equal
to twenty percent (20%) of its net income after taxes in excess
of $100,000 for each fiscal year ending after October 1, 2004.
This bonus will be payable not later than thirty (30) days after
receipt of the Company's audited financial statements for such
fiscal year. The amount of such bonus shall be paid to Employee
one-third in cash and two-thirds in shares of the Company's
common stock acquired as if such amount had been paid to Employee
and then paid to the Company by Employee through his exercise of
a Stock Purchase Warrant issued by the Company to Employee of
even date herewith.
(c) Other Bonus. Employee will also be eligible for cash
bonuses, stock bonuses and stock options for meeting profit goals
and for exceeding profit goals, and other such bonuses as
determined by the Board of Directors at the discretion of the
Board of Directors.
(d) Reimbursement for Expenses. Employee will receive
reimbursement from the Company for expenses reasonably incurred
by Employee on behalf of the Company and pursuant to its
policies.
(e) Annual Review. Notwithstanding any other provision of
this Agreement, Employee will be entitled to receive from the
Company's Board of Directors (or committee thereof) an annual
review of his and the Company's performance within ninety (90)
days after the end of each anniversary of the effective date of
this Agreement and the opportunity to negotiate increases in the
compensation and benefit provisions of this Agreement.
(f) Severance. In the event this Agreement terminates for
any reason other than "Cause" as set forth in paragraph 5(a) of
this Agreement, the Company will make a severance payment to
Employee of thirty percent (30%) of his base salary at the time
and continue his health insurance for an additional six months.
The Company also will make the same payment to Employee if
Employee resigns within thirty (30) days for the reasons set
forth in paragraph 2(c) of this Agreement. Otherwise, the Company
will have no obligation to make any severance payments to
Employee hereunder.
4. Other Benefits During the Employment Period.
(a) Employee shall receive all other benefits made available
to executives or employees of the Company, from time to time, at
its discretion ("Benefits"), which currently include, inter alia,
health insurance, New Jersey short term disability insurance, and
401(k).
(b) The Company shall furnish Employee with such working
facilities and other services as are suitable to Employee's
position with the Company and adequate to the performance of his
duties under this Agreement.
(c) Employee shall be entitled to four weeks paid vacation
per calendar year in accordance with the Company's policies then
in effect regarding vacations.
(d) At his option, Employee shall be entitled to (i) sole
use of a Company car (Toyota Camry or equivalent), with all
normal related expenses paid by the Company or (ii) a monthly
automobile expense allowance of equivalent amount.
5. Termination. This Agreement is subject to termination
prior to the expiration of its initial term or any extended term
for only the following reasons:
(a) Termination for Cause. Company and Employee agree that
no future or further salary or other benefits (except for
insurance benefits for disability or death and health insurance
shall continue pursuant to the Company's policies, if any, for
terminated employees or as provided by law) will be payable to
the Employee by the Company and the employment relationship
between the parties will terminate immediately following the
occurrence of any one or more of the following events:
(i) Employee violates any material terms or conditions of
this Agreement;
(ii) Employee commits a felony, gross misdemeanor or act of
dishonesty or engages in material violations of the established
rules, regulations and policies of Company; or
(iii) Employee engages in a general course of conduct of non-
cooperation, disorganization, gross negligence or other gross
misconduct adversely affecting the welfare, continuity or future
of Company's business
(b) Death or Disability. If Employee should die or become
totally and permanently disabled during the term of employment,
the parties agree that the employment relationship and this
Agreement will terminate automatically. "Total disability" means
the continuous inability of Employee, resulting from disease or
injury, to perform substantially all the services pertaining to
his employment under this Agreement. Such total disability will
be deemed "permanent" if Employee has not recovered and returned
to render the full services of his employment hereunder within
six (6) months of becoming totally disabled.
(c) Failure to Perform. Employee fails to present a
reasonable plan to the Company to cure a "Gross Shortfall" (as
hereafter defined) within thirty (30) days after written notice
to Employee identifying the "Gross Shortfall". For these purposes
a "Gross Shortfall" means a revenue deficiency of twenty percent
(20%) or more, an expense overrun of twenty percent (20%) or
more, a decrease of ten percent (10%) or more in total assets or
an increase of ten percent (10%) or more in total assets, in each
case when compared to financial objectives agreed to by Employee
and the Company's Board of Directors.
6. Key Person Insurance. Employee agrees that during the
term of this Agreement, the Company may purchase key person life
insurance covering the life of Employee in the amount of
$500,000, with the Company to be named as the sole beneficiary.
The Company shall pay the premiums on such policy as they become
due out of the funds of the corporation. Employee represents and
warrants that Employee has no knowledge of any condition which
would prevent such key person life insurance from being obtained
at rates for a healthy male of his age. For purposes of such key
person insurance, Employee agrees to submit to reasonable medical
examinations and shall cooperate with reasonable information
requests.
7. Confidential Information/Trade Secrets. Employee
acknowledges that during the course and as a result of his
employment, Employee may receive or otherwise have access to, or
contribute to the production of, Confidential Information or
Trade Secrets. Confidential Information or Trade Secrets means
information that is proprietary to or in the unique knowledge of
Company (including information discovered or developed in whole
or in part by Employee); or information that derives independent
economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure
or use, and is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy. Confidential
Information shall also include all terms and conditions of this
Agreement.
Employee understands and acknowledges that all such
information that he obtains in the course of Employee's
employment with Company constitutes Confidential Information or
Trade Secrets. In particular, Employee agrees that this
information includes among other things, procedures, manuals,
confidential reports, lists of clients, customers, suppliers, or
products, and information concerning the prices of charges paid
by the Company's customers to the Company, or by the Company to
its suppliers.
Employee further acknowledges and appreciates that any
Confidential Information or Trade Secrets constitutes a valuable
asset of Company and that Company intends any such information to
remain secret and confidential. Employee therefore specifically
agrees that except to the extent required by Employee's duties to
Company or as permitted by the express written consent of the
Company's Board of Directors, Employee shall never, either during
employment with Company or at any time thereafter, directly or
indirectly use, discuss or disclose any Confidential Information
or Trade Secrets of Company or otherwise use such information to
his own or a third party's benefit.
8. Return of Property. Employee agrees that upon the
termination of his employment with Company that he will
immediately return to Company the originals and all copies of any
and all documents (including computer data, disks, programs, or
printouts) that contain any customer information, financial
information, product information, or other information that in
any way relates to Company, its products or services, its
clients, its suppliers, or other aspects of its business.
Employee further agrees to not retain any summary of such
information.
9. [Intentionally Omitted.]
10. Consideration. Employee and Company agree that the
provisions of this Agreement are reasonable and necessary for the
protection of Company.
11. Remedies for Breach. Each party acknowledges that breach
by the other party of the provisions of this Agreement will cause
the first party irreparable harm that is not fully remedied by
monetary damages. Accordingly, each party agrees that the other
party shall, in addition to any relief afforded by law, be
entitled to injunctive relief. Each party agrees that both
damages at law and injunctive relief shall be proper modes of
relief and are not to be considered alternative remedies. Each
party further agrees that the other partyshall be entitled to
recover costs of litigation and reasonable attorney fees incurred
in enforcing this Agreement.
12. General Provisions. Employee and Company acknowledge and
agree as follows:
(a) This Agreement contains the entire understanding of the
parties with regard to all matters contained herein. There are no
other agreements, conditions, or representations, oral or
written, express or implied, with regard to such matters. This
Agreement supersedes and replaces any prior agreement between the
parties generally relating to the same subject matter.
(b) This Agreement may be amended or modified only by a
writing signed by both parties.
(c) Waiver by either Company or Employee of a breach of any
provision, term or condition hereof shall not be deemed or
construed as a further or continuing waiver thereof or a waiver
of any breach of any other provision, term or condition of this
Agreement.
(d) The rights and obligations of Company hereunder may be
transferred or assigned to any successor, representative or
assign of Company. The term "Company" as used herein is intended
to include Dynasil Corporation of America, its successors,
affiliates, or assigns, if any. No assignment of this Agreement
shall be made by Employee, and any purported assignment shall be
null and void.
(e) Except as set forth herein, Employee's obligations under
paragraphs 7 and 8 of this Agreement shall survive any change in
Employee's employment status with Company, by promotion or
otherwise, or the termination of Employee's employment with
Company.
(f) If any Court finds any provision or part of this
Agreement to be unreasonable, in whole or in part, such provision
shall be deemed and construed to be reduced to the maximum
duration, scope or subject matter allowable under applicable law.
Any invalidation of any provision or part of this Agreement will
not invalidate any other part of this Agreement.
(g) This Agreement will be construed and enforced in
accordance with the laws and legal principles of the State of New
Jersey.
(h) This Agreement may be executed in any number of
counterparts, including counterparts transmitted by telecopier or
FAX, any one of which shall constitute an original of this
Agreement. When counterparts of facsimile copies have been
executed by all parties, they shall have the same effect as if
the signatures to each counterpart or copy were upon the same
document and copies of such documents shall be deemed valid as
originals. The parties agree that all such signatures may be
transferred to a single document upon the request of any party.
This Agreement is intended to be a legally binding document
fully enforceable in accordance with its terms.
DYNASIL CORPORATION OF AMERICA
By:
Xxxxx X. Xxxxxxxx
Chairman of the Board
EMPLOYEE:
Xxxxx X. Xxxxxx
