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January 4, 2013

 

 

 

Thomas C. Leonard

19 Dix Street

Winchester, MA 01890

 

Re: Employment with Dynasil Corporation of America

 

Dear Tom:

 

It is with great pleasure that I write to confirm the terms under which you have
agreed to become employed with Dynasil Corporation of America (the “Company”).
We look forward to your arrival and leadership. The principal terms of your
employment are set forth in this letter (“Letter”).

 

1.Start Date. Your employment with the Company will begin on January 14, 2013
(the “Start Date”).

 

2.Title; Duties. As of February 4, 2013, you will hold the title of Chief
Financial Officer of the Company. You will perform such duties as are inherent
in such position and such other duties as may be assigned by the Company from
time to time. You will be subject to the direction and supervision of the Chief
Executive Officer. You agree to serve the Company diligently and faithfully so
as to advance the Company’s best interests and agree to not take any action in
conflict with the Company’s best interests.

 

3.At-Will Employment. At all times, your employment with the Company will be
at-will employment which may be terminated by you or the Company at any time,
with or without Cause and with or without advance notice. Upon any such
termination, except as set forth in Section 5 of this Letter, the Company will
have no liability or obligation to make any payment or provide any benefits to
you (including, without limitation, any salary or bonus payments or benefits
described in Section 4) or to your executors, legal representatives,
administrators, heirs or assigns or any other person claiming under or through
you, except those required by law. Your at-will employment may be modified only
in writing as detailed in a duly-adopted Board resolution.

 

4.Compensation; Benefits.

 

(a)Base Salary. You will receive a base salary during your employment at rate of
$15,416.66 per month (which is equivalent to $185,000 on an annualized basis),
payable in accordance with the Company’s usual payment practices and subject to
periodic review and, in its sole discretion, adjustment by the Company.

 

 

 

 

(b)Annual Bonus. In each fiscal year during your employment beginning with
fiscal year 2013, you will be eligible to earn an annual cash performance bonus
of up to twenty (20%) percent of your then current Base Salary (“Target Bonus”)
under terms and conditions to be determined by the Chief Executive Officer in
discussions with you and approved by the Compensation Committee of the Board
prior to the start of each fiscal year. The award of any annual bonus will be in
the Company’s sole discretion. The annual bonus, if any, will be payable after
receipt of the Company's audited financial statements for such fiscal year. As
we discussed, the there is no current management bonus plan covering corporate
(“core”) employees. Such a plan will be presented to the board over the next
several months for the 2013 fiscal year with further clarification at that time.

 

(c)Equity. Subject to the approval of the Company’s Board of Directors
(“Board”), you will be granted on or near the Start Date a time-vested
restricted stock award of 100,000 shares (“Time-Based Grant”) of the Company’s
common stock, $0.0005 par value (“Common Stock”). The Time-Based Grant will be
made under the Company’s 2010 Stock Incentive Plan at no cost to you though you
shall be responsible for payment of taxes on the fair market value of the shares
as they vest to you. The Time-Based Grant will vest in accordance with the
following schedule:

 

(i)25% upon start of employment

 

(ii)25% per annum on the employment anniversary date.

 

Further terms and conditions, if any, to be determined by the Board.

 

(d)Benefits. During your employment, you will be eligible to participate in all
employee benefit plans and perquisite plans and policies (including fringe
benefits, 401(k) plan participation, life, health, dental, accident and short
and long term disability insurance) which the Company may, in its sole
discretion, make available to its similarly-situated employees, whether such
benefits are now in effect or hereafter adopted, subject to the terms and
conditions of each such plan or policy. Subject to applicable law, the Company
may alter, modify, add to or delete its employee benefit plans and its
perquisite plans and policies at any time as it, in its sole judgment,
determines to be appropriate, without recourse by you.

 

(e)Vacation. You will receive twenty (20) days of paid vacation time per
calendar year during your employment (pro-rated for partial years), which will
accrue and may be used according to Company policy as in effect from time to
time. Notwithstanding the terms of any Company policy to the contrary, your
unused vacation time will not carry over from one calendar year to the next.

 

(f)Reimbursement for Expenses. You will receive reimbursement from the Company
for expenses that you reasonably incur on behalf of the Company in accordance
with the Company’s normal policies with respect to expense reimbursements.
Notwithstanding the foregoing, it is agreed that the company will allow you use
of a company credit card for business purposes and will pay or reimburse your
mobile phone. The company will also pay or reimburse your legal fees in
connection with this Letter and your taking this position as part of the
Company’s recruitment costs.

 

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(g)Deductions and Withholdings. Notwithstanding any other provision of this
Letter, any payments or benefits from the Company to you will be subject to the
withholding of such amounts, if any, relating to tax and other payroll
deductions, as the Company reasonably determines it should withhold pursuant to
any applicable law or regulation.

 

5.Severance.

 

(a)Severance Package. If the Company terminates your employment without Cause
(as defined in this Section), and provided that you first deliver to the Company
an irrevocable separation agreement in a form and of a scope reasonably
acceptable to the Company (which will include a general release of claims among
other terms) within sixty (60) days of the effective date of your separation,
the Company will provide you with a severance payment (the “Severance Payment”)
as follows:

 

(i)If the separation date occurs between ninety (90) days and eighteen (18)
months after the Start Date, a payment in the gross amount of three months of
your then-current Base Salary, paid in substantially equal installments over a
period of 3 months according to the Company’s regular payroll schedule,
beginning 60 days after the separation date; or

 

(ii)If the separation date occurs more than 18 months after the Start Date, a
payment in the gross amount of six months of your then Base Salary, paid in
substantially equal installments over a period of 6 months according to the
Company’s regular payroll schedule, beginning 60 days after the separation date.

 

For purposes of clarity, you will not be eligible for any severance payment if
your separation date occurs within 90 days of the Start Date. As an additional
condition of the Severance Package, you agree to make yourself reasonably
available to answer questions by telephone during the period from the separation
date through the end of any period in which you are receiving the Severance
Payment.

 

(b)Cause Definition.

 

(i)For purposes of this Letter, “Cause” means any of the following:

 

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(A)You materially breach any duty or obligation owed to the Company, under this
Letter or the Dynasil Confidential Information and Invention Assignment
Agreement, or the rules and regulations of the Company and such violation, if
susceptible to cure in the Company’s reasonable judgment, is not cured to the
Company’s reasonable satisfaction within fifteen (15) days after written notice
thereof is provided to you;

 

(B)You refuse or are unwilling to perform any of the duties assigned by the
Company in good faith, after a written request from the Company to do so, and
such refusal or unwillingness, if susceptible to cure in the Company’s
reasonable judgment, is not cured to the Company’s reasonable satisfaction
within fifteen (15) days after written notice thereof is provided to you;

 

(C)You are convicted by a court of competent jurisdiction of, or plead guilty or
nolo contendere to, any felony or any crime involving moral turpitude;

 

(D)You engage in conduct that would tend to bring public disrespect, contempt or
ridicule to the Company, as reasonably determined in good faith by the Company)
and such conduct, if susceptible to cure in the Company’s reasonable judgment,
is not cured to the Company’s reasonable satisfaction within fifteen (15) days
after written notice thereof is provided to you; or

 

(E)You are repeatedly absent from work (excluding vacations, illnesses,
disability leaves, or other leaves of absence approved by the Company) and such
absence is not corrected within fifteen (15) days after written notice thereof
is provided to you;

 

6.Death or Disability. If you die or become totally and permanently disabled
during the term of employment, the parties agree that the employment
relationship and this Letter will terminate automatically. "Total disability"
means your inability, resulting from sickness, disease, injury or physical or
mental illness, to perform in all material respects all of the services
pertaining to your employment under this Letter, with or without reasonable
accommodation. Such total disability will be deemed "permanent" if you have not
recovered and returned to render the full services of his employment hereunder
within six (6) months of becoming totally disabled. You will not be eligible for
any Severance Payment if your employment is terminated under this paragraph.

 

7.Section 409A. The intent of the parties is that payments and benefits under
this Agreement comply with Internal Revenue Code Section 409A and the
regulations and guidance promulgated thereunder (collectively “Code Section
409A”) and, accordingly, to the maximum extent permitted, this Agreement shall
be interpreted to be in compliance therewith. To the extent that any provision
hereof is modified in order to comply with Code Section 409A, such modification
shall be made in good faith and shall, to the maximum extent reasonably
possible, maintain the original intent and economic benefit to you and the
Company of the applicable provision without violating the provisions of Code
Section 409A.  A termination of employment shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.” If you are deemed on the date of termination to
be a “specified employee” within the meaning of that term under Code Section
409A(a)(2)(B), then with regard to any payment or the provision of any benefit
that is considered deferred compensation under Code Section 409A payable on
account of a “separation from service,” such payment or benefit shall be made or
provided at the date which is the earlier of (A) the expiration of the six
(6)-month period measured from the date of your “separation from service,” and
(B) the date of your death, to the extent required under Code Section 409A. Upon
the expiration of the foregoing delay period, all payments and benefits delayed
pursuant to this subsection (whether they would have otherwise been payable in a
single sum or in installments in the absence of such delay) shall be paid or
reimbursed to you in a lump sum, and any remaining payments and benefits due
under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein.  For purposes of Code Section 409A,
your right to receive any installment payments pursuant to this Agreement shall
be treated as a right to receive a series of separate and distinct payments.

 

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8.Confidential Information and Invention Assignment Letter. As a condition of
your employment, you will sign, and be bound by, the “Dynasil Confidential
Information and Invention Assignment Letter,” a copy of which is enclosed with
this Letter.

 

9.Return of Company Property. You agree that upon the termination or cessation
of your employment with the Company for any reason (whether initiated by you or
by the Company), or at any other time upon the Company’s request, you will
immediately return to the Company all Company property of any kind then in your
possession or under your control, including, without limitation, the originals
and all copies of any and all documents, files or records (including computer
data, disks, programs, or printouts) that contain any non-public information
that in any way relates to the Company, any of its subsidiaries or affiliates,
any of their products or services, clients, suppliers or other aspects of any of
their business(es) or prospects, all other notes, drawings, lists, memoranda,
magnetic disks or tapes, other recording media, reports, files, memoranda,
software, credit cards, door and file keys, telephones, PDAs, computers,
computer access codes, instructional manuals, and any other physical property
that you received, prepared, or helped prepare in connection with your
employment. You further agree to not retain any copies, summaries or excerpts of
any such property in any format, whether hardcopy, electronic or otherwise. To
the extent that you have Company property stored on any home computer(s) or
other personal storage device(s), you agree to forward a copy of any such
property to a designated Company official and then irretrievably delete all such
property from your personal home computer(s) and any other personal electronic
device(s) at the same time that you return all tangible property to the Company.

 

10.Other Agreements. You hereby represent to the Company that you are not bound
by any agreement or any other previous or existing business relationship which
conflicts with or prevents the full performance of your duties and obligations
to the Company (including your duties and obligations under this Letter or any
other agreement with the Company), Therefore, you agree that during your
employment and at all times thereafter, you will not improperly use or disclose
any proprietary information or trade secrets of any former or concurrent
employer, or any other person or entity with whom you have an agreement or to
whom you owe a duty to keep such information in confidence.

 

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11.Notices. Any notice hereunder by either Party to the other will be given in
writing by personal delivery, telex, facsimile, overnight courier or certified
mail, return receipt requested, addressed, if to the Company, to the attention
of the Chief Executive Officer (or such other person as the Company may
designate) at Dynasil Corporation of America, 44 Hunt Street, Watertown, MA
02472 or to such other address as the Company may designate in writing at any
time or from time to time to you, and if to you, to your most recent address on
file with the Company. Notice will be deemed given, if by personal delivery or
by overnight courier, on the date of such delivery or, if by telex or facsimile,
on the business day following receipt of answer back or facsimile information
or, if by certified mail, on the date shown on the applicable return receipt.

 

12.Continuing Obligations. Your obligations under Sections 8 through 10 of this
Letter, inclusive, will survive any change in your employment status with the
Company, by promotion or otherwise, and the termination or cessation of your
employment with Company for any reason. The Company’s obligations under this
Letter will be binding on successors to the Company.

 

13.Severability. If any arbitrator, agency, tribunal or court of competent
jurisdiction finds any provision or part of this Letter to be excessively broad,
in whole or in part, such provision will be deemed and construed to be reduced
to the maximum duration, scope or subject matter allowable under applicable law.
If any provision or part of this Letter is declared illegal or unenforceable by
any arbitrator, tribunal or court of competent jurisdiction even after the
reformation and construction as provided in the previous sentence, then the
remainder of this Letter, or the application of such provision or part in
circumstances other than those as to which it is so declared illegal or
unenforceable, will not be affected thereby, and each provision and part of this
Letter will be valid and enforceable to the fullest extent permitted by law.

 

14.Governing Law. This Letter will be governed by, construed and enforced in
accordance with, the laws of Massachusetts, without regard to conflict of laws
principles.

 

15.Counterparts. This Letter may be executed in any number of counterparts, any
one of which will constitute an original of this Letter, provided that this
Letter will not become effective until each party has executed at least one
counterpart. The parties agree that signatures on separate counterparts may be
transferred to a single document upon the request of any party. For the
convenience of the parties, facsimile, pdf or other electronic signatures will
be accepted as originals.

 

If the terms of this Agreement are acceptable to you, please sign the enclosed
copy of this letter where indicated and return to me. Once again, the Company is
grateful for your willingness to undertake these duties and I look forward to
working with you.

 

Sincerely,

 

 

/s/ Peter Sulick                           

Peter Sulick

Interim Chief Executive Officer

 

 

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Enclosure

 

 

AGREED AND ACCEPTED:

 

 

/s/ Thomas C. Leonard                 

Thomas C. Leonard

 

 

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