DYNASIL CORPORATION OF AMERICA
AGREEMENT OF EMPLOYMENT
THIS AGREEMENT is effective as of December 1, 2000, by and between
DYNASIL CORPORATION OF AMERICA (the "Company"), a New Jersey corporation,
with offices at 385 Cooper Road, West Berlin, New Jersey, 08091, and JOHN
KANE ("Employee"), whose address is 149 Plowshare Road, Norristown,
Pennsylvania, 19403.
1. Employment. Company agrees to employ Employee as President (and
Secretary, until a replacement can be elected) of the Company, with such
duties as are customary for such position. Included in such duties shall be
oversight of the Company's compliance with pollution and environmental safety
laws. The parties agree that as of August 1, 2001, Employee will be elected
to and will assume the additional position of Chief Executive Officer, with
no additional remuneration. 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.
2. Term.
(a) The term of employment of Employee hereunder shall be for a
period of three (3) years commencing on December 1, 2000, subject to the
conditions set forth herein.
(b) In the event that during the second year of this Agreement the
Company does not reach gross annual revenues of $5 million and net income
before taxes of $400,000, then the Company shall have the right to
renegotiate this Agreement with respect to the third year of its term. In
the event that the parties cannot reach an agreement during such
renegotiation, the Company may terminate this Agreement and pay Employee a
severance payment equal to 30% of Employees base annual salary of $110,000,
or $33,000.
(c) 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.
3. Compensation.
(a) Base Salary. Employee shall receive as 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. The Company agrees to pay Employee the following
performance bonuses based on net income before Employee bonus and taxes:
YEAR 1 of contract:
$252,000 to $352,001 - 15% of excess over $252,000 and less than
$352,001 Above $352,001 - 3% of excess over $352,001
YEAR 2 of contract:
$302,000 to $402,001 - 15% of excess over $302,000 and less than
$402,001 Above $402,001 - 3% of excess over $402,001
YEAR 3 of contract:
$352,000 to $452,001 - 15% of excess over $352,000 and less than
$452,001 Above $452,001 - 3% of excess over $452,001
(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.
4. Other Benefits During the Employment Period.
(a) Employee shall receive all other benefits made available to
executive employees of the Company, from time to time, at its discretion
("Benefits"), which currently includes, 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) Employee shall have the sole use of a Company car (a Toyota
Camry or equivalent model of another manufacturer), with all normal
related expenses paid by the Company.
(e) It is agreed between the parties that Employee may hire a
bookkeeper or assistant, provided Employee obtains prior approval of the
Board of Directors.
5. Termination. This Agreement is subject to termination prior to
the expiration of its initial term or any extended term as follows:
(a) Termination for Cause. Company and Employee agree that no
salary or other benefits (except for insurance benefits for disability
or death and health insurance shall continue pursuant to the Company's
insurance policy 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;
(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.
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. Non-competition. Employee understands and agrees that, in addition
to Employee's above-described exposure to Company's Confidential Information
or Trade Secrets, Employee may, in his capacity as an employee, at times meet
with Company's customers and/or suppliers on behalf of Company, and that as a
consequence of using or associating himself with Company's name, goodwill,
and professional reputation, Employee's employment will place him in a
position where Employee can further develop personal and professional
relationships with Company's current and prospective customers and/or
suppliers. Employee further acknowledges that during the course and as a
result of his employment Employee may be provided certain specialized
training or know-how. Employee understands and agrees that this goodwill and
reputation, as well as Employee's knowledge of Confidential Information or
Trade Secrets and specialized training and know-how, could be used unfairly
in competition against Company.
Accordingly, Employee agrees that, during the course of Employee's
employment with Company and for eighteen (18) months from the date of
Employee's voluntary termination of employment, involuntary termination of
employment, or the termination of this Agreement at the end of its initial
term or any renewal term, Employee shall not:
(a) Directly or indirectly, individually or collectively in
conjunction with others, engage in competition with the Company or any
of its subsidiaries.
(b) Cause or attempt to cause any existing or prospective
customer, client, or account who then has a relationship with the
Company or any of its subsidiaries for current or prospective business
to divert, terminate, limit or in any manner modify, or fail to enter
into any actual or potential business relationship with Company or any
of its subsidiaries.
(c) Directly or indirectly solicit, employ or conspire with others
to employ any of Company's or Company's subsidiary's employees or
subcontractors. The term "employ" for purposes of this paragraph means
to enter into an arrangement for services as a full-time or part-time
employee, independent contractor, agent or otherwise.
Employee further agrees during the above-stated eighteen (18) month
period to inform any new employer or other person or entity with whom
Employee enters into a business relationship, before accepting employment or
entering into a business relationship, of the existence of this Agreement and
give such employer, person or other entity a copy of this Paragraph 9,
Non-competition.
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. Employee acknowledges that breach by him of
the provisions of this Agreement will cause Company irreparable harm that is
not fully remedied by monetary damages. Accordingly, Employee agrees that
Company shall, in addition to any relief afforded by law, be entitled to
injunctive relief. Employee agrees that both damages at law and injunctive
relief shall be proper modes of relief and are not to be considered
alternative remedies. Employee further agrees that Company shall 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, 8 and 9 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
/s/ James Saltzman, Chairman of the Board
By:
/s/ John Kane
JOHN KANE
