DYNASIL CORPORATION OF AMERICA
AGREEMENT OF EMPLOYMENT
THIS AGREEMENT is effective as of the closing of the EMF Corporation
("EMF") stock sale to Dynasil Corporation of America (the "Closing
Date"), by and between DYNASIL CORPORATION OF AMERICA, a New Jersey
corporation with offices at 385 Cooper Road, West Berlin, New Jersey,
08091, for itself and/or on behalf of any of its wholly-owned
subsidiaries (collectively, the "Company") and MEGAN SHAY ("Employee"),
whose address is 405 Mitchell Street, Ithaca, New York 14850.
1. Employment. Effective at the Closing Date (the "Effective Date"),
the Company agrees to employ Employee as Chief Executive Officer of the
Company's Evaporated Metal Films Corp. subsidiary ("EMF"), with such
duties as are customary for such position, and such other
responsibilities as the parties shall mutually agree, from time to time.
Employee shall perform these duties principally at the EMF offices in
Ithaca, New York, subject to the direction and supervision of the
President and CEO and Board of Directors of the Company. This role is
intended to be a transitional role to assist the Company in selecting and
training a CEO to replace Employee and to help the Company plan and
implement a successful integration and transition for the acquisition of
EMF by the Company. Employee accepts such employment and agrees to
devote her full time (for at least six months as outlined below) and
skills to the conduct of the Company's and EMF's businesses, performing
to the best of Employee's abilities such duties as may be reasonably
requested by the Company. Employee's required travel (including
management of the EMF Rochester Sales Office and other business
development-related travel) shall be consistent with recent past history,
which has averaged four (4) days per calendar month. Employee agrees to
serve the Company diligently and faithfully so as to advance the
Company's best interests and agrees to not take any action in conflict
with its best interests.
2. Term.
(a) The term of employment of Employee hereunder shall be for a
period of one (1) year commencing on the Closing Date (the "Term"),
subject to the conditions set forth herein.
a. Six months after the Closing Date, the parties shall evaluate the
transition progress. At that review or at a later date, the parties can
mutually agree to reduce the time commitment from full time if the
Company is comfortable that full time is not required to complete a
successful transition.
b. This Agreement may also be extended at the end of the initial Term
by mutual written agreement of the parties for an additional term up to
six months if the parties agree that more time is required to complete a
successful transition.
3. Compensation.
(a) Base Salary. While this Agreement remains in effect, Employee
shall receive as base salary not less than Ninety Five Thousand Four
Hundred Dollars ($95,400) per annum, to be paid in accordance with EMF's
regular payroll schedule and subject to EMF's ordinary course annual
Scost of living" increases.
(b) Bonus. For the fiscal year ending September 30, 2007, the
Company agrees to pay Employee an annual performance bonus equal to ten
percent (10%) of EMF's net income from operations for the 2007 fiscal
year. EMF's net income from operations calculations hereunder will be
performed in accordance with past EMF practice and generally accepted
accounting principles, and Employee shall be provided with a written
explanation of the calculation of each such figure. If the Employee's
employment extends past September 30, 2007, the Company agrees to pay
Employee a bonus equal to ten percent (10%) of EMF's net income from
operations for fiscal year 2008 ("Fiscal 2008"), prorated by multiplying
EMF's Fiscal 2008 net income from operations by a fraction, the numerator
of which is the number of hours Employee worked during Fiscal 2008, and
the denominator of which is one thousand eight hundred eighty (1,880).
Each such bonus will be payable not later than thirty (30) days after
receipt of the Company's audited financial statements for the relevant
fiscal year. The amount of such bonus shall be paid to Employee in cash.
(d) Reimbursement for Expenses. Employee will receive reimbursement
from the Company for expenses reasonably incurred by Employee on behalf
of the Company in accordance with the Company's normal policies with
respect to expense reimbursements.
4. Other Benefits During the Employment Period.
(a) Employee shall receive all other benefits substantially similar
to those generally currently available to executives or employees of EMF
(collectively, "Benefits"). The Benefits currently include among other
things: health insurance, life insurance, disability insurance and
participation in EMF's 401k Savings Plan.
(b) The Company shall furnish Employee with such working facilities
and other services as are suitable to Employee's positions and adequate
to the performance of her duties under this Agreement.
(c) Employee shall be entitled to 25 days paid vacation per fiscal
year in accordance with EMF's policies then in effect regarding
vacations.
5. Termination. This Agreement is subject to termination prior to
the expiration of its initial Term or any extended term for only the
following reason:
(a) Termination for Cause. The 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 or for 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 (A) any of the terms or conditions of this
Agreement in any material respect or (B) in any material way any of the
rules, regulations or policies of the Company, and such violation is not
corrected within fifteen (15) days after written notice thereof is
provided to Employee;
(ii) Employee is convicted of a felony or any crime involving moral
turpitude; or
(iii) Employee engages in a general course of conduct of non-
cooperation, gross negligence or other gross misconduct materially and
adversely affecting the welfare, continuity or future of the Company's
business, and such conduct is not corrected within fifteen (15) days
after written notice thereof is provided to Employee.
6. Intentionally omitted
7. Confidential Information/Trade Secrets. Employee acknowledges
that during the course and as a result of her employment hereunder and
previously with EMF, Employee has received or had access to, or
contributed to the production of Confidential Information. Confidential
Information means information or trade secrets that (i) are proprietary
to or in the unique knowledge of Company (including information
discovered or developed in whole or in part by Employee); (ii) 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; or
(iii) are the subject of efforts that are reasonable under the
circumstances to maintain secrecy.
Employee understands and acknowledges that all such information that
she has previously obtained or will obtain in the course of Employee's
employment with the Company constitutes Confidential Information. 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
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 constitutes valuable assets of the Company, that the 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 the Company or as permitted by the express written
consent of the Company's President and CEO or its Board of Directors,
Employee shall not, either during employment with the Company or for a
period of five (5) years thereafter, directly or indirectly disclose any
Confidential Information.
The restrictions with respect to Confidential Information set forth
herein shall not apply to any Confidential Information which (i) is on
the date hereof or hereafter becomes generally available to the public
other than as a result of a disclosure, directly or indirectly, by
Employee in violation of the terms of this Agreement; (ii) Employee is
compelled to disclose by operation of law, court order or regulation
(including, without limitation, the rules promulgated by the United
States Securities and Exchange Commission, the National Association of
Securities Dealers Automated Quotation System or the Over the Counter
Bulletin Board); (iii) is required to be disclosed in order to enforce
the terms of this Agreement.
8. Return of Property. Employee agrees that upon the termination of
her employment with the Company that she will immediately return to the
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
Confidential Information that in any way relates to the Company, its
products or services, clients, suppliers or other aspects of its
business(es). Employee further agrees to not retain any summary of such
information. It is understood and agreed that the items listed on
Schedule A are the sole property of Employee.
9. Non-competition. Employee understands and agrees that, in the
performance of her duties under this Agreement and as a result of her
previous employment by EMF, Employee may at times meet with the Company's
customers and/or suppliers and that, as a consequence of using or
associating herself with the Company's name, goodwill and professional
reputation, Employee's employment will place her in a position where
Employee can further develop personal and professional relationships with
the Company's current and prospective customers and/or suppliers.
Employee further acknowledges that in the performance of her duties under
this Agreement and as a result of her previous employment by EMF,
Employee has been and will continue to be provided with certain
specialized skills, training and/or know-how, as well as possess the
Confidential Information referred to above. Employee understands and
agrees that this goodwill and reputation, as well as Employee's skills,
training, know-how and knowledge of Confidential Information could be
used to compete with the Company. Accordingly, Employee agrees that,
during the course of Employee's employment with Company and for the time
period specified below from the date of Employee's termination of
employment (whether voluntarily or involuntarily) or the termination of
this Agreement at the end of any Term, Employee shall not directly or
indirectly, individually or with others:
(a) compete with the Company in the design, development, manufacture
or sale of any of its then current products or services (or products or
services known by her to be contemplated as of such date to be offered
for sale by the Company) for a period of two (2) years.
(b) cause or attempt to cause any existing customer of the Company
to divert, terminate, limit, modify adversely or not enter into any
business relationship with the Company for a period of four (4) years.
(c) solicit, employ or contract with any of Company's or any of its
subsidiaries' employees in any capacity that competes with the Company's
business for a period of four (4) years. 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 time periods to inform
any new person, firm or entity with whom Employee proposes to enter into
an employment or a business relationship that Employee reasonably expects
could relate to these non-compete/ non-solicitation provisions, before
accepting such employment or entering into such a relationship, of the
restrictions on Employee set forth in Paragraphs 7, 8 and 9 of this
Agreement.
10. Consideration. Employee and Company agree that the provisions of
this Agreement are reasonable and necessary for the protection of
Employee and 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 seek 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.
Furthermore, each party agrees that all actions, suits or proceedings
arising under or relating to this Agreement may be brought only in a
court of general jurisdiction in and for Tompkins County, New York or the
United States District Court for the Northern District of New York, to
the jurisdiction and venue of which each party hereto consents and waives
the right to argue forum non conveniens. The prevailing party in any
dispute arising hereunder shall be entitled to recover its expenses from
the other party (including, without limitation, attorneys' and experts'
fees).
12. General Provisions. The parties 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 all 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 or assign of Company by
acquisition, merger, sale of assets or similar significant corporate
transaction. The term "Company" as used herein is intended to include
Dynasil Corporation of America, its successors and/or assigns, if any. No
assignment of this Agreement shall be made by Employee, and any purported
assignment shall be null and void.
(e) Employee's obligations under Paragraphs 7, 8 and 9 of this
Agreement, as well as Paragraph 11, shall survive any change in
Employee's employment status with Company 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 York.
(h) This Agreement may be executed in any number of counterparts,
including counterparts transmitted by telecopier or facsimile, 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: /s/ Craig T. Dunham Date:
Craig T. Dunham
President and CEO
EMPLOYEE:
/s/ Megan Shay Date:
Megan Shay