Document:

Blueprint

 

Exhibit 10.1

 

 

SEPARATION AND RELEASE AGREEMENT

 

THIS
SEPARATION AND RELEASE AGREEMENT (this “
Agreement”) is made and
entered into as of the date indicated on the signature page hereof
(the “Execution
Date”), by and between CHRISTOPHER VON JAKO
(“Executive”), and
DYNATRONICS CORPORATION, a Utah corporation (the
“Company”).
Executive and the Company are referred to collectively as the
“Parties” and each is
sometimes referred to as a “Party” in this
Agreement.

 

RECITALS

 

A. Executive and the
Company have jointly determined that it is in the best interest of
the Company and Executive to terminate Executive’s employment
with the Company.

 

B. Executive’s
last day of employment with the Company is the later of September
1, 2019 or the date his successor takes office (the
“Separation
Date”). After the Separation Date, the Executive will
not represent himself as being an employee, officer, attorney,
agent, or representative of the Company for any purpose. Except as
otherwise set forth in this Agreement, the Separation Date is the
employment termination date for the Executive for all purposes,
meaning the Executive is not entitled to any further compensation,
monies, or other benefits from the Company, including coverage
under any benefit plans or programs sponsored by the Company, as of
the Separation Date.

 

C. The Company and
Executive desire to resolve any and all differences regarding
Executive’s employment and the termination of
Executive’s employment.

 

D. The Company has
offered to provide Executive with certain separation benefits, in
addition to the compensation and benefits that Executive otherwise
is entitled to receive through the Separation Date, in
consideration for Executive entering into this Agreement, and
agreeing to, and complying with, the promises, covenants,
agreements, obligations, releases and waivers contained
herein.

 

E. Executive is
willing to enter into this Agreement, and be bound by the promises,
covenants, agreements, conditions, waivers and releases set forth
herein in exchange for the separation benefits being offered by the
Company.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the promises, covenants, agreements,
releases and waivers contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:

 

1. Return of Property. The
Executive warrants and represents that he has returned all Company
property, including identification cards or badges, access codes or
devices, keys, laptops, computers, telephones, mobile phones,
hand-held electronic devices, credit cards, electronically stored
documents or files, physical files, and any other Company property
in the Executive’s possession; provided, however, that if requested, Executive
may retain his Company-issued laptop, restored to factory settings,
once the Company is satisfied that all information and software
relating to the Company has been removed.

 

 

 

1

 

  

2. Resignation from All Other
Positions. Effective on the Execution Date, the Executive
shall be deemed to have resigned from all positions that the
Executive holds as an officer or member of the Board of Directors
(or a committee thereof) of the Company or any of its
affiliates.

 

3. Employment Agreement. Executive
and the Company are parties to that certain Employment Agreement,
including addenda and ancillary agreements attached to and
incorporated in or forming a part thereof, dated effective June 26,
2018, pursuant to which the Company employed Executive (the
“Employment
Agreement”). Capitalized terms used but not defined
herein shall have the meanings given them in the Employment
Agreement.

 

4. Executive Representations.
Executive’s specifically represents, warrants, and confirms
that the Executive:

 

(a) has not filed any
claims, complaints, or actions of any kind against the Company with
any court of law, or local, state, or federal government or
agency;

 

(b) has been properly
paid for all hours worked for the Company through the Separation
Date;

 

(c) has received all
salary, wages, commissions, bonuses, and other compensation due to
the Executive through the Separation Date, with the exception of
the Executive’s final payroll check for salary and bonus
through and including the Separation Date, which will be paid on
the Company’s next regularly scheduled payroll date for the
pay period in which the Separation Date falls; and

 

(d) has not engaged in
and is not aware of any unlawful conduct relating to the business
of the Company.

 

If any
of these statements is not true, the Executive cannot sign this
Agreement and must notify the Company immediately in writing of the
statements that are not true. This notice will not automatically
disqualify the Executive from receiving these benefits, but will
require the Company’s further review and
consideration.

 

5. Separation Benefits. As
consideration for the Executive’s execution of,
non-revocation of, and compliance with this Agreement, including
the Executive’s waiver and release of claims in Section 8 and other
post-termination obligations, the Company agrees to provide the
following separation benefits (“Separation Benefits”) to
which the Executive is not otherwise entitled:

 

(a) A cash payment
in the total amount of Sixty-eight Thousand Seven Hundred Fifty
Dollars ($68,750), less all relevant deductions for taxes and other
withholdings, which shall be payable in accordance with the
Company’s normal payroll practices over the 90-day period
following the Separation Date;

 

(b) An equity grant
as payment of bonus for the fiscal year ended June 30, 2019 in the
form of Thirty Thousand (30,000) immediately-vested restricted
shares of the Company’s common stock, no par value per share
(“Common
Stock”); and

 

(c) An additional
equity grant in the form of (i) a Restricted Stock Unit award for
Fifty Thousand (50,000) shares of Common Stock; and (ii) an option
for the purchase of Seventy-five Thousand (75,000) shares of Common
Stock, exercisable for ninety (90) days from the date of issuance
at an exercise price of not less than the closing price of the
Company’s Common Stock as of the Separation
Date.

 

 

2

 

  

Notwithstanding
the foregoing, the Company shall have no obligation to provide any
of the Separation Benefits prior to the Effective Date of this
Agreement as defined in Section 13. The Executive
understands, acknowledges, and agrees that these benefits exceed
what the Executive is otherwise entitled to receive on separation
from employment, and that these benefits are being given as
consideration in exchange for executing this Agreement and the
general release and restrictive covenants contained in it. The
Executive further acknowledges that the Executive is not entitled
to any additional payment or consideration not specifically
referenced in this Agreement. Nothing in this Agreement shall be
deemed or construed as an express or implied policy or practice of
the Company to provide these or other benefits to any individuals
other than the Executive.

 

6. Withholding. Executive may
satisfy any federal, state or local tax withholding obligation
relating to the exercise or acquisition of Common Stock under an
award granted under Section 5(a) or Section 5(b), above, by any of the
following means (in addition to the Company’s right to
withhold from any compensation paid to the Executive by the
Company) or by a combination of such means: (a) tendering a cash
payment; (b) authorizing the Company to withhold shares of Common
Stock from the shares of Common Stock otherwise issuable to the
Executive as a result of the exercise or acquisition of Common
Stock under such award, provided, however, that no shares of Common Stock
are withheld with a value exceeding the maximum amount of tax
required to be withheld by law; or (c) delivering to the Company
previously-owned and unencumbered shares of Common Stock of the
Company.

7. Cooperation; Continuing
Covenants. The Parties agree that certain matters in which
the Executive has been involved during the Executive’s
employment may need the Executive’s cooperation with the
Company in the future. Accordingly, to the extent reasonably
requested by the Company, the Executive shall cooperate with the
Company regarding matters arising out of or related to the
Executive’s service to the Company, provided that the Company shall make reasonable
efforts to minimize disruption of the Executive’s other
activities. Executive hereby agrees to comply with
Executive’s duties and obligations under that certain
Agreement Regarding Confidential Information, Ownership of
Inventions, Non-Competition, Customer Non-Solicitation, and
Employee Non-Solicitation Covenants and Acknowledgment of At-Will
Employment dated effective June 26, 2018 (the “Restrictive Covenants”),
including, without limitation, the obligation of confidentiality
and the non-competition, non-solicitation and non-disparagement
covenants thereof. Executive also agrees to return any and all
Company property and/or Confidential Information in
Executive’s possession or control in accordance with the
Restrictive Covenants, provided,
however, that Executive may retain his laptop as provided in
Section 1, above.

 

8. General Release.

 

(a) Executive, on
behalf of himself and his heirs, executors, administrators,
successors and assigns, and all other persons claiming by, through,
or under him, hereby knowingly and voluntarily waives, releases and
forever discharges the Company and all of its parents,
subsidiaries, and affiliate companies, predecessors, successors,
and assigns, and each of their respective current and former
shareholders, directors, officers, employees, representatives,
insurers, attorneys and assigns, and all persons acting by,
through, under or in concert with them, or any of them (all of
whom, with the Company, are collectively referred to throughout the
remainder of this Agreement as the “Releasees”), of and from
any and all claims, demands, charges, grievances, damages, debts,
liabilities, accounts, costs, attorneys’ fees, expenses,
liens, future rights, and causes of action of every kind and
nature, known or unknown, asserted or unasserted, which Executive
has, may have, or claims to have against Releasees, or one or more
of them, arising prior to the Effective Date of this Agreement
(hereinafter collectively referred to as “Released
Claims”).

 

 

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(b) The Released Claims
include, without limitation, (i) any claims based either in whole
or in part upon any facts, circumstances, acts, or omissions in any
way arising out of, based upon, or related to Executive’s
employment with the Company or the termination thereof;
(ii) any claims or regulation, local ordinance, or the common
law, regarding employment or prohibiting employment discrimination,
harassment, or retaliation, including, without limitation, arising
under any federal or state statute or regulation, local ordinance,
or the common law, regarding employment or prohibiting employment
discrimination, harassment, or retaliation, including, without
limitation, the Utah Antidiscrimination Act, the Utah Payment of
Wages Act, the Age Discrimination in Employment Act (the
“ADEA,”
as amended by the Older Workers Benefit Protection Act (the
“OWBPA”)), the Genetic
Information Nondiscrimination Act, Title VII of the Civil Rights
Act of 1964, the Fair Labor Standards Act, the Americans With
Disabilities Act, the
National Labor Relations Act (“NLRA”), the Family
Medical Leave Act, the Executive Retirement Income Security Act of
1974, the Worker Adjustment and Retraining Notification Act, the
Health Insurance Portability and Accountability Act of 1996, the
Immigration Reform and Control Act, and the Occupational Safety and
Health Act, all including any amendments and their respective
implementing regulations, and any other federal, state, local, or
foreign law (statutory, regulatory, or otherwise) that may be
legally waived and released; however, the identification of
specific statutes is for purposes of example only, and the omission
of any specific statute or law shall not limit the scope of this
general release in any manner; (iii) any claim for wrongful
discharge, wrongful termination in violation of public policy,
breach of contract, breach of the covenant of good faith and fair
dealing, personal injury, harm, or other damages (whether
intentional or unintentional), negligence, negligent employment,
defamation, misrepresentation, fraud, intentional or negligent
infliction of emotional distress, interference with contract or
other economic opportunity, assault, battery, or invasion of
privacy; (iv) claims growing out of any legal restrictions on the
Company’s right to terminate its employees; (v) claims for wages, other
compensation or benefits; (vi) any claim for general, special, or
other compensatory damages, consequential damages, punitive
damages, back or front pay, fringe benefits, attorney fees, costs,
or other damages or expenses; (vii) any claim for injunctive relief
or other equitable relief; (viii) any claim arising under any
federal or state statute or local ordinance regulating the health
and/or safety of the workplace; or (ix) any other tort, contract or
statutory claim.

 

(c) Notwithstanding the
foregoing paragraphs, Executive does not release the Company from
any obligations the Company may have to him with respect to the
following: (i) rights under the Company’s 401(k) Plan, if
any; (ii) rights to the continuation of insurance coverage under
COBRA; (iii) right to apply for unemployment compensation or
worker’s compensation; (iv) claims or rights which cannot be
waived pursuant to applicable law; (v) Executive’s rights or
claims under the ADEA that arise after the execution of this
Agreement; and (vi) any rights or remedies which Executive may have
against the Company under the terms of this Agreement.

 

(d) Nothing contained
herein is intended to constitute or shall be construed as a waiver
or release of Executive’s right to file a charge or complaint
with, or participate in an investigation by, the EEOC or any other
federal or state agency. Executive is, however, waiving his right
to recover any monetary award, damages or any other form of
recovery in connection with such a charge or complaint, whether
such charge or complaint is filed by Executive or someone else, or
such an investigation.

 

(e) Executive
represents and warrants that he has not previously signed or
transferred, or attempted to sign or transfer, to any third party,
any of the claims waived and released herein.

 

9. No Admission of Liability or
Wrongdoing. Neither this Agreement nor the payment or
providing of the Separation Benefits pursuant to this Agreement
shall be construed as or constitute an admission by the Company of
any fault, liability or wrongdoing by any Releasee, nor an
admission that Executive has any valid or enforceable claims or
rights whatsoever against the Company or any other Releasee. The
Company specifically denies any liability to, or wrongful act
against, Executive by itself or any of the other
Releasees.

 

 

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10. Executive’s Acknowledgment of
Notices Pertaining to the Release of Age Discrimination in Employment Act
(ADEA) Rights and Claims. By execution of this Agreement,
Executive specifically agrees and acknowledges that:

 

(a) this Agreement
includes a release of all rights and claims under the ADEA arising
prior to the execution of this Agreement, Executive is not waiving
rights or claims that may arise after the execution of this
Agreement, and Executive has been advised to fully consider this
release before executing this Agreement;

 

(b) Executive has been
given the opportunity to read this Agreement in its entirety, has
had all questions regarding its meaning and content answered to
Executive’s satisfaction, and fully understands all of its
terms;

 

(c) Executive has been
advised of his right to consult with an attorney before executing
this Agreement and Executive has done so to the extent he desired
to do so before executing this Agreement;

 

(d) Executive has been
advised that he has twenty-one (21) days to consider this Agreement
before signing it, and that Executive may revoke the Agreement
within seven (7) calendar days after the date he signs
it;

 

(e) Executive is
entering into this Agreement knowingly, freely, and voluntarily in
exchange for the promises made in this Agreement and that no other
representations or promises have been made to Executive to induce
or influence his execution of this Agreement;

 

(f) the waiver and
release of rights and claims set forth herein is given in exchange
for good and valuable consideration in addition to anything of
value to which Executive is otherwise entitled;

 

(g) Executive is not
waiving or releasing rights or claims that may arise after
Executive signs this Agreement.

 

11. Time to Consider and Sign
Agreement. In accordance with the OWBPA, Executive may take
up to twenty-one (21) calendar days from the date of receipt of
this Agreement to review and consider the terms of this Agreement
and consult with an attorney of the Executive’s choice about
it, and sign the Agreement and deliver it to the Company. Executive
may sign the Agreement sooner if desired and changes to this
Agreement, whether material or immaterial, do not restart the
21-day period.

 

12. Time to Revoke Agreement. After
signing this Agreement, Executive shall have seven (7) calendar
days within which to revoke this Agreement in its entirety. If
Executive revokes this Agreement, he will not be entitled to the
Separation Benefits described above, and this Agreement will be
ineffective and void. Executive may revoke his acceptance of this
Agreement by delivering notice of revocation to David Wirthlin,
Chief Financial Officer of the Company, by email before the end of
the seven-day period. In the event of a revocation by the
Executive, the Company shall have the option of treating this
Agreement as null and void in its entirety. In such event,
Executive will not receive the Separation Benefits or any other
consideration Executive would not be entitled to in the absence of
this Agreement. After the seven-day period has elapsed, Executive
shall not have the right to revoke or rescind this Agreement or the
release contained herein.

 

 

5

 

  

13. Effective Date. This Agreement shall become effective
and enforceable eight (8) days following the execution of this
Agreement by Executive, provided the Agreement has not been revoked
by Executive within the revocation period referenced in Section
12 above (the
“Effective
Date”).

 

14. General
Provisions.

 

(a) Severability. If any provision
of this Agreement shall be held by a court to be invalid,
unenforceable, or void, such provision shall be enforced to the
fullest extent permitted by law, and the remainder of this
Agreement shall remain in full force and effect. In the event that
the time period or scope of any provision is declared by a court of
competent jurisdiction to exceed the maximum time period or scope
that such court deems enforceable, then such court shall reduce the
time period or scope to the maximum time period or scope permitted
by law.

 

(b) Taxes. All amounts paid under
this Agreement shall be paid less all applicable state and federal
tax withholdings and any other withholdings required by any
applicable jurisdiction.

 

(c) Governing Law. This Agreement
shall be governed by the laws of the State of Utah without regard
to conflict of law principles. Any action or proceeding by either
of the Parties to enforce this Agreement shall be brought only in
any state or federal court located in the state of Utah, County of
Salt Lake. The Parties hereby irrevocably submit to the exclusive
jurisdiction of these courts and waive the defense of inconvenient
forum to the maintenance of any action or proceeding in such
venue.

 

(d) Dispute Resolution. All
disputes and controversies arising out of or in connection with
this Agreement shall be resolved exclusively by the state and
federal courts located in Salt Lake County in the State of Utah,
and each Party hereto agrees to submit to the jurisdiction of said
courts and agrees that venue shall lie exclusively with such
courts. Each Party hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which such Party may
raise now, or hereafter have, to the laying of the venue of any
such suit, action or proceeding brought in such a court and any
claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. Each Party agrees
that, to the fullest extent permitted by applicable law, a final
judgment in any such suit, action, or proceeding brought in such a
court shall be conclusive and binding upon such Party, and may be
enforced in any court of the jurisdiction in which such Party is or
may be subject by a suit upon such judgment.

 

(e) WAIVER OF RIGHT TO JURY TRIAL.
TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY WAIVES ITS RIGHTS
TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HEREBY
AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.

 

 

6

 

  

(f) Fees and Costs. The prevailing
party in any arbitration, court action or other adjudicative
proceeding arising out of or relating to this Agreement shall be
reimbursed by the party who does not prevail for their reasonable
attorneys’, accountants’, and experts’ fees and
for the costs of such proceeding. The provisions set forth in this
Section shall survive the merger of these provisions into any
judgment. For purposes of this Section 14(f), “prevailing
party” includes, without limitation, a party who agrees to
dismiss an action or proceeding upon the other’s payment of
the sums allegedly due or performance of the covenants allegedly
breached, or who obtains substantially the relief
sought.

 

(g) Amendments; Waivers. This
Agreement may not be modified, amended, or changed except by an
instrument in writing, signed by Executive and by a duly authorized
representative of the Company other than Executive. No waiver or
consent shall be binding except in a writing signed by the Party
making the waiver or giving the consent. No waiver of any provision
or consent to any action shall constitute a waiver of any other
provision or consent to any other action, whether or not similar.
No waiver or consent shall constitute a continuing waiver or
consent except to the extent specifically set forth in
writing.

 

(h) Section 409A. This Agreement is
intended to comply with Section 409A of the Internal Revenue Code
of 1986, as amended (“Section 409A”), including
the exceptions thereto, and shall be construed and administered in
accordance with such intent. Notwithstanding any other provision of
this Agreement, payments provided under this Agreement may only be
made upon an event and in a manner that complies with Section 409A
or an applicable exemption. Any payments under this Agreement that
may be excluded from Section 409A either as separation pay due to
an involuntary separation from service, as a short-term deferral,
or as a settlement payment pursuant to a bona fide legal dispute
shall be excluded from Section 409A to the maximum extent possible.
For purposes of Section 409A, any installment payments provided
under this Agreement shall each be treated as a separate payment.
To the extent required under Section 409A, any payments to be made
under this Agreement in connection with a termination of employment
shall only be made if such termination constitutes a
“separation from service” under Section 409A.
Notwithstanding the foregoing, Company makes no representations
that the payments and benefits provided under this Agreement comply
with Section 409A and in no event shall Company be liable for all
or any portion of any taxes, penalties, interest, or other expenses
that may be incurred by Executive on account of non-compliance with
Section 409A.

 

(i) Assignment. Executive agrees
that Executive shall have no right to assign and shall not assign
or purport to assign any rights or obligations under this
Agreement. This Agreement may be assigned or transferred by the
Company; and nothing in this Agreement shall prevent the
consolidation, merger or sale of the Company or a sale of any or
all or substantially all of its assets. Subject to the foregoing,
this Agreement shall be binding upon and shall inure to the benefit
of the Parties and their respective heirs, legal representatives,
successors, and permitted assigns, and shall not benefit any person
or entity other than those specifically enumerated in this
Agreement.

 

(j) Parties in Interest. Nothing in
this Agreement shall confer any rights or remedies under or by
reason of this Agreement on any persons other than the Parties
hereto and their respective successors and permitted assigns nor
shall anything in this Agreement relieve or discharge the
obligation or liability of any third person to any Party to this
Agreement, nor shall any provision give any third person any right
of subrogation or action over or against any Party to this
Agreement.

 

(k) Construction. The terms of this
Agreement have been negotiated by the Parties hereto, and no
provision of this Agreement shall be construed against either Party
as the drafter thereof.

 

 

7

 

   

(l) Interpretation. This Agreement
shall be construed as a whole, according to its fair meaning.
Sections and section headings contained in this Agreement are for
reference purposes only, and shall not affect in any manner the
meaning or interpretation of this Agreement. Unless the context of
this Agreement otherwise requires, (i) words of any gender
shall be deemed to include each other gender; (ii) words using
the singular or plural number shall also include the plural or
singular number, respectively; and (iii) the terms
“hereof,” “herein,” “hereby,”
“hereto,” and derivative or similar words shall refer
to this entire Agreement.

 

(m) Notice. Any notices, consents,
agreements, elections, amendments, approvals and other
communications provided for or permitted by this Agreement or
otherwise relating to this Agreement shall be in writing and shall
be deemed effectively given upon the earliest to occur of the
following: (i) upon personal delivery to such Party;
(ii) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next
business day; (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid; (iv) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with
written verification of receipt; or (v) upon actual receipt by
the Party to be notified via any other means (including public or
private mail, electronic mail or telegram); provided, however, that notice sent via
electronic mail shall be deemed duly given only when actually
received and opened by the Party to whom it is addressed. All
communications shall be sent to the Party’s address set forth
on the signature page below, or at such other address as such Party
may designate by ten (10) days advance written notice to the other
Parties in accordance with this Section 14(m).

 

(n) Counterparts. This Agreement
may be executed in one or more counterparts, any one of which need
not contain the signatures of more than one Party, but all such
counterparts taken together will constitute one and the same
instrument. Counterparts may be delivered via facsimile, electronic
mail (including .pdf or any electronic signature complying with the
U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other
transmission method and any counterpart so delivered shall be
deemed to have been duly and validly delivered and be valid and
effective for all purposes.

 

(o) Authority. Each Party
represents and warrants that such Party has the right, power and
authority to enter into and execute this Agreement and to perform
and discharge all of the obligations hereunder; and that this
Agreement constitutes the valid and legally binding agreement and
obligation of such Party and is enforceable in accordance with its
terms.

 

(p) Entire Agreement. This
Agreement contains the entire agreement between Executive and the
Company and there have been no promises, inducements or agreements
not expressed in this Agreement.

 

(q) EXECUTIVE ACKNOWLEDGEMENT.
EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL
CONCERNING THIS AGREEMENT AND HAS OBTAINED AND CONSIDERED THE
ADVICE OF SUCH LEGAL COUNSEL TO THE EXTENT EXECUTIVE DEEMS
NECESSARY OR APPROPRIATE, THAT EXECUTIVE HAS READ AND UNDERSTANDS
THE AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT,
AND THAT EXECUTIVE HAS ENTERED INTO IT FREELY BASED ON
EXECUTIVE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR
PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

 

[SIGNATURES TO FOLLOW]

 

 

8

 

 

IN
WITNESS WHEREOF, the Parties have executed this Separation and
Release Agreement as of the Execution Date.

 

“EXECUTIVE”

 

 

CHRISTOPHER VON
JAKO

 

Address: 

 

Phone:                       

Fax:            

Email:                       

 

Date of
Execution of Agreement:

 

____________________________________

 

“COMPANY”

 

DYNATRONICS
CORPORATION,

a Utah
corporation

 

 

By:                                                                

Name:                                                                 

Title:                                                                 

 

Address: 

 

Phone:                       

Fax:            

Email:                       

 

Date of
Execution of Agreement:

 

____________________________________

 

 

Signature
Page to Separation and Release Agreement

DYNATRONICS
CORPORATION

9Blueprint

 

Exhibit 10.2

 

 

 

 

 

 

August
22, 2019

 

Brian
Baker

 

Hand-delivered

 

Re:
Employment Agreement with Dynatronics Corporation

 

Dear
Brian,

 

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
Company’s 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. The
Board’s approval of this Agreement will include its consent
for your service on the boards
of directors of the corporations, if any, indicated in the
attached Schedule
I, “Approved Directorships”.

 

	

Location:

	
 

	

The
Company’s principal executive offices are currently located
in Salt Lake City, Utah. However, your office will be located in
Eagan, Minnesota. Your duties will require you to be onsite
regularly at our Eagan, Minnesota office and to travel periodically
to our other facilities, including Salt Lake City. 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 as Chief Executive Officer by the
Company will commence on August 26, 2019 (the “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.

 

 

 

1

 

 

	

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 $100,000.
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 the earlier of the date on
which such bonuses are paid to other executives of the Company for
the same fiscal period or a date which is within three (3) months
following the end of the fiscal year for which the bonus is earned.
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 fiscal year ending June 30,
2020.

 

	

Equity
Grants:

	
 

	

At the
next regularly scheduled meeting of the Compensation Committee
following your Start Date, the Compensation Committee will consider
a grant to you of an equity award in the form of (1) restricted
stock units (“RSUs”) for 50,000 shares, and (2) a stock
option for the purchase of 50,000 shares of common stock. The value
of the RSUs will be based on the market price of the
Company’s common stock on the date of grant. The value of the
stock options will be based on a grant date fair value generally
estimated using a Black-Scholes or similar model; the exercise
price of the options will be based on the market price of the
Company’s common stock on the date of grant. The initial
equity award above shall vest in equal amounts of twenty-five
percent (25%) each on the first, second, third and fourth
anniversaries of the date of grant of such award. In addition, for
each full fiscal year of employment, you will be eligible to
receive annual equity awards, as determined by the Compensation
Committee, in the form of RSUs, valued at $100,000, with such
grants to vest fifty percent (50%) on the date of grant and fifty
percent (50%) on the first anniversary of the date of grant. The
actual number of shares included in any future equity awards
hereunder and all other terms and conditions applicable to each
such award shall be determined by the Compensation Committee. The
value of such equity awards will be determined based on the market
price of the Company’s common stock on the date of grant of
such awards. Equity awards will be subject to the terms and
conditions of the Company’s 2015 Equity Incentive Award Plan,
the 2018 Equity Incentive Plan, or any successor plan adopted by
the Company pursuant to which such awards may be made, and the
applicable 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 current “Dynatronics Benefits
Guide” 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.

 

	

Tax
Withholdings:

	
 

	

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

 

	

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 principal residence, which (within three (3) months of
this letter) is expected to be in Minnesota) incurred by you in
connection with the performance of your duties in accordance with
the Company’s expense reimbursement policies and
procedures.

 

	

Relocation
Expenses:

	
 

	

You
will be entitled to reimbursement of your actual, documented
reasonable relocation expenses related to your move from your
residence in Utah to your new residence in or around Eagan,
Minnesota in an amount up to $25,000.

 

	

Term;
At Will Employee:

	
 

	

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 (as defined below), 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.

 

	

Insurance;
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.

 

 

 

2

 

 

	

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, you will be entitled to cash
severance in an amount equal to ninety (90) days of your
then-current annual base salary. In addition, fifty percent (50%)
of the initial equity grant previously 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,
for more than fifteen (15) days following written notice of such
failure; (ii) failure to comply with any valid and legal directive
of the Board, which failure is not cured within fifteen (15) days
of notice thereof; (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, unless
such breach is cured pursuant to the terms of such agreement; (vii)
material breach of any material obligation under this or any other
written agreement between you and the Company which continues
without cure for a period of fifteen (15) days following notice
thereof; 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, provided, that
we mutually agree to cooperate to minimize the amount of tax
payable by both you and the Company in connection with such
payments.

 

	

Clawback:

	
 

	

Any
incentive-based or other compensation, paid to you under this
Agreement or any other agreement or arrangement with the Company
which is subject to recovery under any law, government regulation,
or stock exchange listing requirement, will be subject to such
deductions and clawback as may be required to be made pursuant to
such law, government regulation, or stock exchange listing
requirement (whether currently in existence or later adopted) or
any policy established by the Company pursuant to any such law,
government regulation or stock exchange listing
requirement.

 

	

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 fullest 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.

 

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:

 

 

3

 

 

1. Supplementation, as
necessary, of applicable U.S. right to work documentation on file
with the Company (including, for example, Form I-9 and referenced
documentation verifying your identity and work
authorization).

 

2. Continued
compliance with Company employment testing including drug screening
and, if reasonably required, satisfactory completion of a
background investigation, for which the required notice and consent
forms will be provided to you.

 

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 of
Control Addendum, 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 August 26,
2019.

 

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

 

DYNATRONICS CORPORATION

 

 

 

Erin S.
Enright,

Chairman of the Board of Directors

 

 

 

Accepted and Agreed

 

__________________________________________ 

Brian
Baker

Date:
August 22, 2019

 

 

 

Signature
Page to Employment Agreement of Brian Baker

Dynatronics
Corporation

4

 

 

Exhibits to Employment Agreement

 

Exhibit A
– 

Dynatronics
Benefits Guide 2018

 

Exhibit B
– 

Dynatronics Insider
Trading Policy and Acknowledgement (to be executed by
Executive)

 

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
(to be executed by Executive)

 

Exhibit D
– 

Form of Change in
Control Addendum (to be executed by Executive)

 

Exhibit E
– 

Form of
Indemnification Agreement (to be executed by
Executive)

 

Exhibit F
– 

2019 Dynatronics
Corporation Officer and Director Questionnaire (to be completed by
Executive)

 

 

 

 

 

 

 

Exhibits
to Employment Agreement of Brian Baker

Dynatronics
Corporation

5

 

Schedule I to Employment Agreement

 

Approved Directorships

 

 

 

 

 

 

 

Schedule
I to Employment Agreement of Brian Baker

Dynatronics
Corporation

6

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