Blueprint





 







Exhibit 10.1

 



 


 



CONFIDENTIAL

 



May 24, 2018

 



Christopher Richard von Jako, Ph.D.



Lynnfield, MA 01940

 



Re: Employment Agreement with Dynatronics Corporation

 



Dear Chris,

 



This letter (this “Agreement”)
sets forth the terms of your employment as Chief Executive Officer
of Dynatronics Corporation, a Utah corporation (the
“Company”).
Your employment under this Agreement is conditioned on your
satisfactory completion of certain requirements, as more fully
explained below.

 



Agreement:

 



Subject to the following terms and conditions, it is agreed as
follows:

 


	


Duties


 

	
 

	

In your capacity as Chief Executive Officer,
you will perform duties and responsibilities that are commensurate
with this position as the Company’s principal executive
officer, as well as such other duties as may be assigned to you
from time to time. You will report directly to the Chairman of the
Board of Directors of the Company (the “Board”). You
will also serve as a member of the Board, for no additional
compensation. You will have direct supervisory responsibility for
and receive reports from the heads of the Company’s operating
divisions and executive officers. You agree to devote your full
business time, attention and best efforts to the performance of
your duties and to the furtherance of the Company’s
interests. Notwithstanding the foregoing, nothing in this letter
shall preclude you, from devoting reasonable periods of time to
charitable and community activities, and managing personal
investment assets, provided that none of these activities
interferes with the performance of your duties hereunder or creates
a conflict of interest in the judgment of the Board. The policy of
the Company is that all outside board of director service,
including charitable and community activities, be pre-approved by
the Board. As we have discussed, the Board’s approval of this
Agreement will include its consent for your service on the boards
of directors of the corporations indicated in the attached
Schedule I, “Approved
Directorships”.


 


	



Location


 

	
 

	


The Company’s principal executive offices are currently
located in Cottonwood Heights, Utah and Eagan, Minnesota. Your
duties will require you to be onsite regularly at our principal
offices and divisional facilities a minimum of two weeks each
month, which will require you to travel as needed to properly
fulfill your employment duties and responsibilities. While you may
otherwise work from home so long as the Board determines that this
arrangement continues to meet the needs of the Company, you
understand that your direct reports and any administrative staff
reporting to you will work out of one of our existing locations.
The Company will not provide for an office or administrative staff
except at one of its existing locations.


 


	


Start Date


 

	
 

	

Subject to satisfaction of all of the
conditions described in this Agreement, your employment by the
Company will commence on a mutually acceptable start date to be
determined, but projected to be not later than June 27, 2018
(“Start
Date”).


 







 




 








 






 

 


	


Base Salary


 

	
 

	


In consideration of your services, you will be paid an annual base
salary of $275,000 per year, payable in accordance with the
standard payroll practices of the Company and subject to all
withholdings and deductions as required by law.


 


	


Annual Bonus


 

	
 

	

During your employment, you will be eligible
to receive an annual bonus, payable at such times and in such
amounts, as determined by the Compensation Committee of the Board
(“Compensation
Committee”), with a maximum payout opportunity of 30%
of base salary. Actual payments will be determined based on a
combination of Company results and individual performance against
the applicable quantitative and qualitative performance goals
established by the Compensation Committee. Any annual bonus with
respect to a particular fiscal year will be paid within three (3)
months following the end of the year. You must remain continuously
employed through the bonus payment date to be eligible to receive
an annual bonus payment for a particular fiscal year. Your first
annual bonus will be payable after the completion of the 2019
fiscal year (which ends on June 30th).


 


	


Equity Grants


 

	
 

	

For each full fiscal year of employment, you
will be eligible to receive an annual equity award, which may be in
the form of restricted stock units, stock options or a combination
of such awards of between $150,000 and $200,000, as determined by
the Compensation Committee. At the next regularly scheduled meeting
of the Compensation Committee following your Start Date, the
Company will recommend to the Compensation Committee that it grant
you, the initial such annual equity award in the form of a
restricted stock award of 50,000 shares and a stock option for the
purchase of 50,000 shares of common stock; the estimated aggregate
grant date fair value of this award is approximately $200,000. The
actual number of shares of restricted stock and stock options
included in any future equity awards hereunder will be determined
by the Compensation Committee. The value of restricted stock awards
will be based on the market price of the Company’s common
stock on the date of grant. The value of stock options will be
based on a grant date fair value generally estimated using a
Black-Scholes or similar model. Equity awards will be subject to
the terms and conditions of the Company’s 2015 Equity
Incentive Award Plan or a successor plan adopted by the Company
(“Plan”) and an applicable
award agreement (“Award Agreement”). The
initial equity award above will vest in four equal amounts annually
commencing 25% with the first anniversary of the Start Date and 25%
each year thereafter until fully vested, subject to the conditions
and terms of the Plan and the Award Agreement.


 


	


Benefits and Perquisites

	
 

	

You will be eligible to participate in the
employee benefit plans and programs generally available to the
Company’s senior executives, as outlined in the enclosed
“Dynatronics Benefits Guide 2018” which is attached
as Exhibit A and incorporated herein by reference,
subject to the terms and conditions of such plans and programs. You
will also be entitled to the fringe benefits and perquisites that
may be made available from time to time to other top executives of
the Company at the discretion of the Compensation Committee, in
accordance with and subject to the eligibility and provisions of
such plans and programs. The Company reserves the right to amend,
modify or terminate any of its benefit plans or programs at any
time and for any reason.


 


	


Withholding

	
 

	


All forms of compensation paid to you as an employee of the Company
shall be less all applicable withholdings.


 







 




 

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Expenses

	
 

	


You will be entitled to reimbursement for reasonable and necessary
out-of-pocket business and travel expenses (including economy
airfare, and reasonable hotel accommodations while travelling away
from your home) incurred by you in connection with the performance
of your duties in accordance with the Company's expense
reimbursement policies and procedures.


 


	


At-will Employment

	
 

	


Your employment will be for no specific period of time.
Rather, your employment will be
at-will, meaning that you or the Company may terminate the
employment relationship at any time, with or without cause, and
with or without notice and for any reason or no particular
reason. Although your
compensation and benefits may change from time to time, the at-will
nature of your employment may only be changed by an express written
agreement signed by an authorized officer of the
Company.


 


	


Indemnification

	
 

	


You will be covered under the Company’s Directors and
Officers Liability policy. In addition, Utah corporation law and
the Company’s articles of incorporation and bylaws, each as
amended, provide certain indemnification rights and limitation of
liability for officers and directors of the Company performing
their duties in good faith. In addition, the Company has
entered into indemnification agreements with its Board and certain
of its executive officers.


 


	


Securities and Exchange Commission Regulations

	
 

	


As an executive officer of a public company, you will be subject to
rules and regulations of the Securities and Exchange Commission
(“SEC”)
and the Nasdaq Stock Exchange (“NASDAQ”), including
requirements that you report your beneficial ownership of and
trading activity involving the Company’s equity securities
and file reports with the SEC. We will provide training on these
requirements and assist you in complying with all regulations.
These regulations limit when you may trade our securities. In
addition, we are required to include information regarding you and
your education and professional background to the SEC and NASDAQ.
You will be required to comply with these regulations. A copy of
the Company’s Insider Trading Policy is attached hereto
as Exhibit B. This Agreement,
and your employment hereunder, are conditioned, among other things,
upon your representation and warranty that you are not under any
disciplinary bar or restriction from the SEC, NASDAQ or any other
regulatory agency from serving as an executive officer of a public
company.


 


	


Representations; Prior Restrictions and Covenants

	
 

	


Upon execution of this Agreement you represent that you have read
and understood, and that you accept all of the terms of employment
as provided in this Agreement, that you have not relied on any
agreements or representations, express or implied, that are not set
forth expressly in this Agreement, and that this Agreement
supersedes all prior and contemporaneous understandings,
agreements, representations and warranties, both written and oral,
with respect to the subject matter of this Agreement. Furthermore,
by executing this Agreement, you represent that you are able to
accept this position and carry out the work that it would involve
without breaching any legal restrictions on your activities, such
as non-competition, non-solicitation or other work-related
restrictions imposed by a current or former employer. You and the
Company agree that we have no interest in any information you may
have that is deemed proprietary or confidential under any
restrictive covenants with any prior employer or other third party.
You represent that you will inform the Company about any such
restrictions and provide the Company with as much information about
them as possible, including any agreements between you and your
current or former employer describing such restrictions on your
activities. You further confirm that you will not remove or take
any documents or proprietary data or materials of any kind,
electronic or otherwise, with you from your current or former
employer without written authorization from your current or former
employer, nor will you use or disclose to the Company, directly or
indirectly, any such confidential information during the course and
scope of your employment with the Company. If you have any
questions about the ownership of particular documents or other
information, you should discuss such questions with your former
employer before removing or copying the documents or
information.


 







 




 

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Confidentiality and Non-Competition Agreement

	
 

	

As a condition of employment, you will be
required to sign an agreement that will: (i) restrict your ability
to be employed by a competitor of the Company during and for one
year following termination of your employment, and (ii) prohibit
your solicitation of the Company’s customers and employees
during your employment and for a period of two years following
termination of your employment. The form of such agreement, an
“Agreement Regarding Confidential Information, Ownership of
Inventions, Non-Competition, Customer Non-Solicitation, and
Employee Non-Solicitation Covenants and Acknowledgment of At-Will
Employment” (“Confidentiality
Agreement”) is attached hereto as Exhibit C and by this reference incorporated in and
made a part hereof.


 


	


Termination without Cause

	
 

	

Notwithstanding that your
employment with the Company is “at will”, if we
terminate your employment during the first twelve (12) months for
any reason other than for Cause, 50% of the initial equity grant
made to you will vest immediately upon your termination, subject to
your execution, and non-revocation, of a release of claims in a
form provided by the Company. “Cause” shall mean: (i)
failure to perform (other than any such failure resulting from
incapacity due to physical or mental illness) to
the reasonable satisfaction of the Company your duties and
responsibilities assigned by the Board which failure continues, in
the reasonable judgment of the Board, after written notice of such
failure has been given to you; (ii) failure to comply with any
valid and legal directive of the Board; (iii) engagement in
dishonesty, illegal conduct, or gross misconduct, which is, in each
case, injurious to the Company or its affiliates; (iv)
embezzlement, misappropriation, or fraud, whether or not related to
your employment with the Company; (v) conviction of or plea of
guilty or nolo
contendere to a crime that constitutes
a felony (or state law equivalent) or a crime that constitutes a
misdemeanor involving moral turpitude; (vi) breach of the
Confidentiality Agreement to be entered into by you; (vii) material
breach of any material obligation under this or any other written
agreement between you and the Company; or (viii) any material
failure to comply with the Company’s policies or rules, as
they may be in effect from time to time during the term of your
employment through your willful misconduct or
negligence.


 


	


Change in Control

	
 

	

Upon a Change in Control following the Start
Date, the provisions of the Change in Control Addendum
(“Change in Control
Addendum”, attached as Exhibit D and by this reference incorporated herein)
shall apply.


 


	


Section 409A and Section 280G

	
 

	


Payments in event of termination, including in the event of a
Change in Control, shall be subject to applicable tax law and
regulations, including, without limitation, Section 409A and
Section 280G of the Internal Revenue Code, as amended, as provided
in the release agreement to be executed at the time of
termination.


 


	


Clawback

	
 

	


Any amounts payable hereunder are subject to any policy (whether
currently in existence or later adopted) established by the Company
providing for clawback or recovery of amounts that were paid to
you. The Company will make any determination for clawback or
recovery in its sole discretion and in accordance with any
applicable law or regulation.


 


	


Governing Law, Severability, Modification, Execution

	
 

	


This Agreement shall be governed by the laws of the State of Utah,
without regard to conflict of law principles. In the event any of
the provisions hereof (including any portion thereof) are held by a
court of competent jurisdiction to be invalid, illegal, void or
otherwise unenforceable, the remaining provisions shall remain
enforceable to the full extent permitted by law. No supplement,
modification or amendment shall be binding unless executed in
writing by both you and the Company. No waiver of any provision
shall be binding unless in writing signed by the party against whom
enforcement of the waiver is sought, and no such waiver shall
operate as a waiver of any other provisions hereof (whether or not
similar), nor shall such waiver constitute a continuing
waiver.


 







 




 

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Your employment under this Agreement is contingent upon the
following conditions precedent, each of which must be completed to
the satisfaction of the Company if not expressly waived in advance
by the Company in writing:

 



1. 

Verification
of your right to work in the United States, as demonstrated by your
completion of an I-9 form upon hire and your submission of
acceptable documentation (as noted on the I-9 form) verifying your
identity and work authorization within three days of your Start
Date. For your convenience, a copy of the I-9 Form’s List of
Acceptable Documents is enclosed for your review.





 



2. 

Completion
of all standard pre-employment testing including drug screening and
satisfactory completion of a background investigation, for which
the required notice and consent forms are attached to this
letter.





 



3. 

Your
execution of the Company’s (A) Agreement Regarding
Confidential Information, Ownership of Inventions, Non-Competition,
Customer Non-Solicitation, and Employee Non-Solicitation Covenants
and Acknowledgment of At-Will Employment, (B) Insider Trading
Policy Acknowledgement, (C) Officer/Director Questionnaire, (D)
Change in Control Policy, and (E) Indemnification
Agreement.





 



4. 

Final
approval of the Board of all terms and conditions of your
employment hereunder.





 



5. 

Your
execution of this Agreement before the close of business on May 24,
2018.





 



Please sign below and return a copy of this Agreement to
me.

 

 


DYNATRONICS
CORPORATION

 


/s/
Erin S. Enright

 


Erin
S. Enright,



Chairman of the Board of Directors

 



Accepted and Agreed

 



Christopher Richard von Jako, Ph.D.

 

 



Signed: /s/ Christopher Richard von Jako



Date: May 24, 2018

 


 




 

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Exhibits to Employment Agreement

 



Exhibit A – Dynatronics Benefits Guide 2018

 



Exhibit B – Dynatronics Insider Trading Policy

 


Exhibit
C – Form of Agreement Regarding Confidential Information,
Ownership of Inventions, Non-Competition, Customer
Non-Solicitation, and Employee Non-Solicitation Covenants and
Acknowledgment of At-Will Employment

 



Exhibit D – Form of Change in Control Addendum

 


 




 








 





 



Schedule I to Employment Agreement

 



Approved Directorships

 

 



nView medical, inc., a Delaware corporation

 



NinePoint Medical, Inc., a Delaware corporation