UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest
event reported): August 26, 2019
Dynatronics
Corporation
(Exact name of registrant as
specified in its charter)
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Utah
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000-12697
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87-0398434
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(State or other jurisdiction of
incorporation)
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(Commission File
Number)
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(IRS Employer Identification
No.)
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7030 Park Centre Dr., Cottonwood
Heights, Utah
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84121
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(801) 568-7000
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(Address of principal executive
offices)
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(Zip Code)
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(Registrant’s telephone number, including area
code)
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Not Applicable
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(Former name or former address, if
changed since last report.)
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Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following
provisions:
☐ Written communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
☐ Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐ Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities registered pursuant to
Section 12(b) of the Act:
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Title of each
class
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Trading Symbol
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Name of each exchange on which
registered
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Common Stock, no par value per
share
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DYNT
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The NASDAQ Stock Market
LLC
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Indicate by check mark whether the
registrant is an emerging growth company as defined in Rule 405 of
the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this
chapter).
☐ Emerging growth company
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
☐
Item
5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Departure of
Principal Executive Officer and Director
On August 26, 2019, Dr. Christopher
R. von Jako stepped down as Dynatronics Corporation’s (the
“Company”) Chief Executive
Officer. In connection with his departure, Dr. von Jako resigned
from the Board of Directors of the Company (the “Board”) effective August
26, 2019. Dr. von Jako’s departure is not the result of any
disagreement with the Company on any matter relating to the
Company’s operations, policies or
practices.
Pursuant to his employment
agreement with the Company, for the fiscal year ended June 30,
2019, Dr. von Jako was granted (i) a restricted stock award of
30,000 shares of common stock in lieu of a cash bonus for the
fiscal year; (ii) an immediately vested grant of 50,000 restricted
stock units; and (iii) a grant of an immediately vested
non-qualified stock option for the purchase of 75,000 shares of
common stock exercisable for 90 days. All of the equity grants to
Dr. von Jako were made under the Company’s 2018 Equity
Incentive Plan (the “2018
Plan”).
The Company has entered into a
Separation and Release Agreement with Dr. von Jako, dated August
26, 2019 (the “Severance Agreement”),
pursuant to which Dr. von Jako will receive a cash payment (less
applicable withholding taxes) equal to three months of base salary
(excluding bonus or any pro ration thereof). The foregoing benefits
are subject to the terms and conditions of the Severance Agreement,
including Dr. von Jako’s release of claims against the
Company. The Severance Agreement is filed as Exhibit 10.1 to this
Current Report.
Appointment of
New Principal Executive Officer and Director
On August 28, 2019, prior to the
opening of trading, the Company announced that its Board had
appointed Brian D. Baker as its Chief Executive Officer, effective
as of August 26, 2019. Mr. Baker succeeds Dr. von Jako, who
resigned as Chief Executive Officer and director effective August
26, 2019. The Board also appointed Mr. Baker to fill the vacancy on
the Board created by Dr. von Jako’s resignation. Mr. Baker
will stand for re-election at the Company’s next annual
meeting.
Mr. Baker has served as the
Company’s Chief Operating Officer since May 2019. From
February 2018 to May 2019, Mr. Baker served as the President of the
Company’s Therapy Products Division. Prior to joining the
Company, he was Vice President of Global Operations of Seaspine
Holdings Corporation from July 2015 to January 2018, where he also
worked as Vice President of Operations of the SeaSpine business
within Integra LifeSciences Corporation from March 2015 to July
2015. From November 2013 until March 2015, he was an industry
consultant providing mergers and acquisitions and business process
optimization services. He is 52 years old.
No family relationships exist
between Mr. Baker and any of the Company’s directors or other
executive officers. There are no arrangements between Mr. Baker and
any other person pursuant to which Mr. Baker was selected as an
officer or director, nor are there any transactions to which the
Company is or was a participant and in which Mr. Baker has a
material interest subject to disclosure under Item 404(a) of
Regulation S-K.
The Company has entered into an
employment agreement with Mr. Baker, dated effective as of August
26, 2019, in connection with Mr. Baker’s appointment as Chief
Executive Officer. Mr. Baker’s salary will be $275,000 per
year and he is eligible for an annual bonus targeted at a maximum
payout of $100,000, which amount will be determined by the
Compensation Committee of the Board of Directors based on results
of operations and Mr. Baker’s performance against goals
established by the Compensation Committee. Mr. Baker will also
receive annual equity grants as determined by the Compensation
Committee of restricted stock units valued at a maximum of
$100,000, vesting 50% upon the date of grant and 50% on the first
anniversary of the date of grant. Upon his hire date, Mr. Baker
received a grant of 50,000 restricted stock units under the
Company’s 2018 Plan, vesting in four equal annual
installments commencing on the first anniversary of the grant date.
Upon vesting, Mr. Baker will receive a number of shares of common
stock equal to the number of restricted stock units that have
vested. Also upon his hire date, Mr. Baker received a grant of a
stock option to purchase 50,000 shares of common stock in
accordance with the terms of the 2018 Plan, exercisable at a price
per share equal to the closing price of one share of the
Company’s common stock on the date of grant. The option also
vests in four equal annual installments, commencing on the first
anniversary of the date of grant. Mr. Baker will operate from the
Company’s Eagan, Minnesota location and the Company will pay
certain relocation expenses for Mr. Baker, not to exceed
$25,000.
The employment agreement continues
until terminated by the Company or by Mr. Baker in accordance with
the terms of the agreement. If the Company terminates Mr.
Baker’s employment during the first 12 months without cause
as defined under the agreement, the Company must pay Mr. Baker an
amount equal to three months base salary. In addition, in such
event, one-half of the initial equity compensation awards granted
to him at the time of his appointment as CEO will automatically
vest, subject to his execution of a release of all claims against
the Company. In the event that the Company is involved in a change
in control transaction, which generally means the transfer of
ownership of more than 50% of the voting control of the Company,
subject to the execution of a general release satisfactory to the
Company, all unvested equity awards held by Mr. Baker at such date
shall become fully vested and exercisable for the remainder of
their full term. Mr. Baker is also subject to a non-solicitation,
non-competition and confidentiality agreement with post-termination
restrictive covenants. The Company has also entered into an
indemnification agreement with Mr. Baker on the same terms as it
has with its other directors and executive
officers.
This summary description is
qualified in its entirety by reference to the employment agreement
and its ancillary agreements between the Company and Mr. Baker,
filed as Exhibits 10.2, 10.3, 10.4 and 10.5 to this Current Report
on Form 8-K incorporated herein by reference.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
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Exhibit
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Description
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Press Release Announcing
Appointment of New Principal Executive Officer August 28,
2019
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Severance Agreement with
Christopher R. von Jako, dated August 26, 2019
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Employment Agreement with Brian D.
Baker, dated August 26, 2019
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Change in Control Addendum to
Employment Agreement dated August 26, 2019
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Agreement Regarding Confidential
Information, Ownership of
Inventions, Non-Competition, Customer Non-Solicitation, and
Employee Non-Solicitation Covenants and Acknowledgment of At-Will
Employment with Brian D. Baker, dated August 26,
2019
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Indemnification Agreement with
Brian D. Baker, dated August 26, 2019
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Signature
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Dynatronics Corporation
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Date: August 28, 2019
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By:
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/s/ David
Wirthlin
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David Wirthlin
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Chief Financial
Officer
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Exhibit 99.1
Dynatronics Promotes Brian Baker to
Chief Executive Officer
COTTONWOOD HEIGHTS, UT (August 28, 2019) –
Dynatronics
Corporation (NASDAQ:DYNT), a leading manufacturer of
athletic training, physical therapy, and rehabilitation products,
today announced that the Dynatronics’
Board of Directors has promoted Brian Baker to Chief Executive
Officer. Mr. Baker also joins the company’s Board of
Directors.
Mr.
Baker will assume day-to-day executive leadership of the
organization effective immediately. He succeeds Dr. Christopher von
Jako, the company’s previous CEO.
Mr.
Baker joined Dynatronics in January 2018 to lead the
company’s operations in Utah and Tennessee. Under his
leadership, the company has made significant progress in
streamlining processes, reducing costs, and improving operational
effectiveness. He was recently named chief operating officer with
oversight over company-wide operations.
“After
thoughtful consideration, the Board of Directors determined that
the company’s CEO needs to be based in our Eagan, Minnesota
facility,” explained Erin S. Enright, chairman of the Board
of Directors. “Dr. von Jako, who resides in the Boston area,
determined that he and his family were not in a position to
relocate at this time and he made the decision to pursue other
opportunities. On behalf of the Board of Directors, I thank Dr. von
Jako for his dedicated service and meaningful contributions to the
company.”
“I
have had the pleasure of working with Brian for many years and have
witnessed firsthand his ability to effectively lead an organization
and drive meaningful change,” continued Ms. Enright.
“He brings decades of proven leadership experience, most
recently in key operational roles at Dynatronics. His promotion to
CEO is a natural progression in his leadership of the
company.”
“I
am honored and grateful to the Board of Directors for the
opportunity to lead the organization as the chief executive based
in our Eagan facility,” stated Mr. Baker. “Dynatronics
is well regarded in the markets we serve for providing trusted,
high-quality restorative products. I see significant opportunity to
expand the reach and depth of our customer relationships and to
accelerate Dynatronics’ growth.”
Prior
to joining Dynatronics, Mr. Baker served as Vice President, Global
Operations for SeaSpine Holdings Corporation from July 2015 to
January 2018, after serving as Vice President, Operations of the
SeaSpine business within Integra LifeSciences Holdings Corporation
from March 2015. From November 2013 until March 2015, Mr. Baker was
an industry consultant guiding teams on business process
optimization and mergers and acquisitions. Beginning in 2007, Mr.
Baker was with Integra LifeSciences, following its acquisition of
Physician Industries, Inc., a company which provided pain
management products and of which Mr. Baker was president and chief
executive officer from 1994 until 2007. At Integra, Mr. Baker
served as President of Integra’s Pain Management Division
from May 2007 to September 2011 and as Vice President, Operations
from September 2011 until November 2013. Mr. Baker received a B.A.
in business administration from the University of
Phoenix.
About Dynatronics Corporation
Dynatronics
is a leading medical device company committed to providing
high-quality restorative products designed to accelerate achieving
optimal health. The company designs, manufactures, and sells a
broad range of products for clinical use in physical therapy,
rehabilitation, pain management, and athletic training. Through its
distribution channels, Dynatronics markets and sells to
orthopedists, physical therapists, chiropractors, athletic
trainers, sports medicine practitioners, clinics, hospitals, and
consumers. The company’s products are marketed under a
portfolio of high-quality, well-known industry brands including
Bird & Cronin®, Dynatron Solaris®, Hausmann™,
Physician’s Choice®, and PROTEAM™ amongst others.
More information is available at www.dynatronics.com.
Contact:
Dynatronics
Corporation
Investor
Relations
Jim
Ogilvie
(801)
727-1755
jim.ogilvie@dynatronics.com
For
additional information, please visit: www.dynatronics.com
Like
Dynatronics on Facebook
Connect
with Dynatronics on LinkedIn
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.
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.
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.
(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”).
(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.
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.
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.
(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.
(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]
IN
WITNESS WHEREOF, the Parties have executed this Separation and
Release Agreement as of the Execution Date.
“EXECUTIVE”
CHRISTOPHER VON
JAKO
Date of
Execution of Agreement:
____________________________________
“COMPANY”
DYNATRONICS
CORPORATION,
a Utah
corporation
Date of
Execution of Agreement:
____________________________________
Signature
Page to Separation and Release Agreement
DYNATRONICS
CORPORATION
9
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:
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Duties:
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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”.
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Location:
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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.
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Start
Date:
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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”).
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Base
Salary:
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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.
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Annual
Bonus:
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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.
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Equity
Grants:
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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.
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Benefits
and Perquisites:
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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.
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Tax
Withholdings:
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All
forms of compensation paid to you as an employee of the Company
shall be less all applicable withholdings.
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Expenses:
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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.
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Relocation
Expenses:
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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.
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Term;
At Will Employee:
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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.
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Insurance;
Indemnification:
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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.
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Securities
and Exchange Commission Regulations:
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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.
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Representations;
Prior Restrictions and Covenants:
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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.
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Confidentiality
and Non-Competition Agreement:
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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.
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Termination
Without Cause:
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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.
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Change
in Control:
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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.
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Section
409A and Section 280G:
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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.
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Clawback:
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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.
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Governing
Law, Severability, Modification, Execution:
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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.
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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. 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
Exhibit 10.3
CHANGE IN CONTROL ADDENDUM TO
THIS
CHANGE IN CONTROL ADDENDUM TO EMPLOYMENT AGREEMENT (the
“Addendum”) is made and
entered into effective as of the 26th day of August, 2019, by and
between Dynatronics Corporation, a Utah corporation (the
“Company”), and Brian Baker
(“Executive”).
The
Company and Executive entered into that certain employment
agreement accepted and approved by the Board of Directors of the
Company effective August 26, 2019, pursuant to which the Company
has employed Executive as Chief Executive Officer (the
“Agreement”). Except as
otherwise provided in this Addendum, all capitalized terms used but
not defined in this Addendum shall have the meanings given to them
in the Agreement.
The
Company and Executive (as evidenced by their execution hereof)
desire to supplement the Agreement as provided herein.
NOW,
THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Incorporation by Reference.
This Addendum is attached to the Agreement as Exhibit D and is hereby
incorporated into and made a part of the Agreement.
2. Severance Payment. Upon a
Change in Control, as defined herein, subject to Executive’s
execution of a general release of known and unknown claims in a
form satisfactory to the Company, notwithstanding the terms of any
equity incentive plan or award agreements, as applicable, all
outstanding unvested equity awards granted to Executive during the
term of his employment prior to termination shall become fully
vested and exercisable for the remainder of their full
term.
3. Section 409A. This Addendum and
the Agreement are 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
the Agreement (including this Addendum), payments provided
thereunder or hereunder may only be made upon an event and in a
manner that complies with Section 409A or an applicable exemption.
Any payments hereunder 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
hereunder in connection with a termination of employment shall only
be made if such termination constitutes a “separation from
service” as defined under Section 409A. Notwithstanding the
foregoing, Company makes no representation that the payments and
benefits provided hereunder 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.
4. Section 280G. If any of the
payments or benefits received or to be received by Executive (in
connection with a Change in Control or termination of employment,
whether pursuant to the terms of the Agreement, this Addendum or
any other plan, arrangement, or agreement, or otherwise) (all such
payments collectively referred to herein as the “280G Payments”)
constitute “parachute payments” within the meaning of
Section 280G of the Code and would, but for this provision, be
subject to the excise tax imposed under Section 4999 of the Code
(the “Excise
Tax”), then such 280G Payments shall be reduced in a
manner determined by the Company (by the minimum possible amounts)
that is consistent with the requirements of Section 409A until no
amount payable to Executive will be subject to the Excise Tax. If
two economically equivalent amounts are subject to reduction but
are payable at different times, the amounts shall be reduced (but
not below zero) on a pro rata basis.
5. Change in Control. For purposes
of this Addendum, “Change in Control” shall
mean the occurrence of any of the following:
a. one person (or more
than one person acting as a group) acquires ownership of stock of
the Company that, together with the stock held by such person or
group, constitutes more than 50% of the total fair market value or
total voting power of the stock of the Company; provided that, a Change in Control shall not
occur if any person (or more than one person acting as a group)
owns more than 50% of the total fair market value or total voting
power of the Company’s stock and acquires additional
stock;
b. one person (or more
than one person acting as a group) acquires (or has acquired during
the twelve-month period ending on the date of the most recent
acquisition) ownership of the Company’s stock possessing 30%
or more of the total voting power of the stock of the
Company;
c. a majority of the
members of the Board of Directors of the Company are replaced
during any twelve-month period by directors whose appointment or
election is not endorsed by a majority of the Board of Directors of
the Company before the date of such appointment or election;
or
d. the complete
liquidation of the Company or the sale or other disposition by the
Company of all or substantially all of the Company’s
assets.
e. Notwithstanding the
foregoing, it is agreed that any change in the equity ownership of
Prettybrook Partners, LLC or Provco Ventures I, LP, or their
affiliated entities, shall not trigger the provisions of this
Section 5.
6. Agreement Affirmed. As modified
hereby, the Agreement is hereby affirmed and deemed to continue in
full force and effect.
7. Counterparts. This Addendum 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.
8. Incorporation by Reference. The
terms of the Agreement (as modified hereby) are hereby incorporated
herein by this reference.
9. Assignment. This Addendum shall
be binding upon, and inure to the benefit of, the parties hereto
and their respective successors, heirs, legal representatives and
permitted assigns. Executive may not directly or indirectly assign
any of his rights or delegate any of his obligations under this
Addendum, by operation of law or otherwise.
10. Expenses. Except as otherwise
provided in this Agreement, each of the Company and the Executive
shall bear its own expenses incurred in connection with the
negotiation and execution of this Addendum and the Agreement, and
each other agreement, document and instrument contemplated by the
Agreement, and the consummation of the transactions contemplated
hereby and thereby.
11. No Third Party Beneficiaries.
This Addendum is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other person any legal or
equitable benefit, claim, cause of action, remedy or right of any
kind.
12. Governing Law. This Addendum
shall be governed by and construed in accordance with the internal
laws of the State of Utah without giving effect to any choice or
conflict of law provision or rule (whether of the State of Utah or
any other jurisdiction).
[SIGNATURES TO FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Change in Control
Addendum to the Employment Agreement as of the date above
written.
“COMPANY”
DYNATRONICS
CORPORATION
By:
_______________________________
Title:
______________________________
“EXECUTIVE”
BRIAN
BAKER
___________________________________
(Signature)
Signature
Page to Change of Control Addendum
Dynatronics
Corporation
4
Exhibit 10.4
AGREEMENT REGARDING CONFIDENTIAL INFORMATION,
OWNERSHIP OF
INVENTIONS, NON-COMPETITION, CUSTOMER
NON-SOLICITATION, AND EMPLOYEE NON-SOLICITATION
COVENANTS,
AND ACKNOWLEDGMENT OF AT-WILL EMPLOYMENT
This
Agreement Regarding Confidential Information, Ownership of
Inventions, Non-Competition, Customer Non-Solicitation, and
Employee Non-Solicitation Covenants and Acknowledgment of At-Will
Employment (“Agreement”) is made and
entered into by Brian Baker (“Employee”) in favor of DYNATRONICS
CORPORATION, a Utah corporation with its principal place of
business at 7030 S. Park Centre Drive, Salt Lake City, Utah 84121
(the “Company”). The Company and Employee are
sometimes referred to collectively as the “Parties,” and
individually as a “Party.”
RECITALS
A. Company designs,
manufactures, markets, and distributes advanced-technology medical
devices, therapeutic and medical treatment tables, rehabilitation
equipment, custom athletic training treatment tables and equipment,
institutional cabinetry, orthopedic soft goods, as well as other
specialty patient, rehabilitation and therapy products and
supplies.
B. Company markets and
sells its products to physical therapists, chiropractors, athletic
trainers, sports medicine practitioners, orthopedists, hospitals,
clinics, and other medical professionals and institutions, and is a
manufacturer and distributor of medical products and equipment
throughout the United States and globally.
C. Employee is the
Chief Executive Officer of the Company, having entered into an
employment agreement accepted and approved by the Board of
Directors of the Company effective as of August 26, 2019 (the
“Employment
Agreement”).
D. In consideration of
the Company’s employment and continued employment of
Employee, the payment of salary and other compensation and benefits
by the Company to Employee, which Employee acknowledges to be good
and valuable consideration for his obligations hereunder, the
Parties agree and covenant as follows:
a. “Confidential
Information,” as used herein, means any present or
future information belonging to the Company that pertains to its
business, whether developed by Employee, other Company employees,
or any of the Company’s customers, contractors or agents,
that is confidential or proprietary in nature, and that is not
generally known in the public domain. Confidential Information
includes, without limitation, information regarding the
Company’s finances, financial condition, operations, business
plans, business opportunities, purchasing activities, suppliers or
potential suppliers, costs of materials, pricing, margins, sales,
markets, marketing strategies, plans and ideas, customers, customer
lists and information derived therefrom, customer agreements,
customer information and documents (including contract information,
terms, and services), potential customers, employees, employee
compensation, technology, specifications, features, technical data,
research, methodologies, services, software in various stages of
development (source code, object code, documentation, diagrams,
and/or flow charts), developments, Inventions, processes, formulas,
designs, drawings, Trade Secrets, Confidential Materials,
Inventions, Employment Inventions, Intellectual Property, or any
other confidential business information belonging to the Company
that is disclosed to or obtained by Employee, directly or
indirectly, whether in writing, orally, by observation or
electronically (through email, computer disk, DVD, CD-ROM, or other
electronic means).
The
Employee understands that the above list is not exhaustive, and
that Confidential Information also includes other information that
is marked or otherwise identified as confidential or proprietary,
or that would otherwise appear to a reasonable person to be
confidential or proprietary in the context and circumstances in
which the information is known or used.
The
Employee understands and agrees that Confidential Information
developed by him in the course of his employment by the Company
shall be subject to the terms and conditions of this Agreement as
if the Company furnished the same Confidential Information to the
Employee in the first instance. Confidential Information shall not
include information that is generally available to and known by the
public, provided that such disclosure to the public is through no
direct or indirect fault of the Employee or persons acting on the
Employee’s behalf.
b. “Confidential Materials,”
as used herein, means any tangible medium containing Confidential
Information, including but not limited to paper, electronic or
magnetic media, prototypes, products, and other
materials.
c. “Employment Inventions,”
as used herein, means any Invention or part thereof conceived,
developed, reduced to practice, completed or created which is: (i)
conceived, developed, reduced to practice, completed, or created by
Employee (whether solely by Employee or jointly with others) within
the scope of Employee’s employment with the Company; on the
Company’s time; or with the aid, assistance, or use of any
property, equipment, facilities, supplies, resources, personnel, or
Intellectual Property of the Company; (ii) the result of any work,
services, or duties performed or suggested by Employee for or on
behalf of the Company; (iii) related to the industry or trade of
the Company; or (iv) related to the current or demonstrably
anticipated business, research, or development of the
Company.
d. “Intellectual Property,”
as used herein, means any and all patents, copyrights, trademarks,
service marks, Trade Secrets, know how, technology, ideas, or
computer software belonging to the Company or relating to any
Employment Invention.
e. “Inventions,” as used
herein, means any and all inventions, products, formulations,
discoveries, concepts, ideas, developments, improvements,
technology, know-how, products, devices, structures, equipment,
processes, methods, techniques, formulas, Trade Secrets, texts,
research, programs, software, computer programs, source codes,
data, designs, works of authorship, and or other materials, whether
or not published, patented, copyrighted, registered or suitable
therefor, and all Intellectual Property Rights therein, to the
extent they relate to the past, present, future, or anticipated
business, research, development or trade of the
Company.
f. “Trade Secrets,” as used
herein, means information, including a formula, pattern,
compilation, program, device, method, technique, or process, that
(i) derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that
are reasonable under the circumstances to maintain its
secrecy.
2. Covenants
of Confidentiality, Non-Disclosure and Authorized Use of
Confidential Information.
a. In connection with
Employee’s employment with the Company, Employee will receive
or have access to Confidential Information, including Trade
Secrets, Confidential Materials, Inventions, Employment Inventions,
and/or Intellectual Property, as those terms are defined in this
Agreement. Employee acknowledges and agrees that all Confidential
Information shall remain the sole property of the Company. Employee
further acknowledges and agrees that all Confidential Information
belonging to the Company is valuable, special and unique to its
business, that the Company’s business depends upon such
Confidential Information, and that the Company wishes to protect
such Confidential Information by keeping it confidential for the
use and benefit of the Company.
b. Employee agrees
that the Company’s Confidential Information will be kept
confidential and will not, without the prior written consent of the
Company, be disclosed by Employee (whether directly or through some
other person or entity), in whole or in part, and will not be used
by Employee, directly or indirectly, for any purpose other than as
expressly allowed by the Company. In addition, Employee shall not
use any Confidential Information for
Employee’s direct or indirect benefit or for the direct or
indirect benefit of any person
or entity other than the Company. Employee shall not aid,
encourage, or allow any other person or entity to use or disclose
the Confidential Information of the Company without
authorization.
c. Employee further
agrees to use reasonable and diligent efforts to protect the
confidentiality of the Company’s Confidential Information.
Employee specifically agrees: (i) to use the Company’s
Confidential Information solely to fulfill the duties of
Employee’s employment with the Company, and not otherwise to
use such information for Employee’s benefit or the benefit of
others; (ii) not to use, view, or access Confidential Information
where it can be seen or viewed by unauthorized persons, and not to
leave such information or materials where they can be seen or
accessed by unauthorized persons; (iii) to notify the Company if
Employee becomes aware of any loss, misuse, wrongful disclosure, or
other unauthorized access of any Confidential Information by any
person; and (iv) to take all other reasonable steps necessary, or
reasonably requested by the Company, to safeguard the Confidential
Information from unauthorized disclosure or use.
d. Employee’s
duties of non-disclosure and confidentiality under this Agreement
govern Employee both during Employee’s employment with the
Company and following the termination of the employment
relationship. All obligations of confidentiality shall continue for
as long as is permitted by law. Employee authorizes the Company to
notify others, including but not limited to the Company’s
customers or suppliers or Employee’s future employers, of the
terms of this Agreement and Employee’s covenants and
obligations hereunder.
e. Nothing in this
Agreement prohibits or restricts Employee (or Employee’s
attorney) from filing a charge or complaint with the Securities and
Exchange Commission (“SEC”) or any other
federal or state regulatory authority (each a “Government Agency” and
collectively, “Government Agencies”).
Employee further understands that this Agreement does not limit
Employee’s ability to communicate with any Government Agency
or otherwise participate in any investigation or proceeding that
may be conducted by any Government Agency or in connection with
reporting a possible securities law violation without notice to the
Company. This Agreement does not limit Employee’s right to
receive an award for information provided to any Government Agency
or the SEC.
f. Notice
of Immunity Under
the Economic Espionage Act
of 1996, as amended by the Defend Trade Secrets
Act of 2016.
(i) Employee
will not be held criminally or civilly liable under any
federal or state trade secret law for any disclosure of a
Trade Secret that is made: (A) in
confidence to a federal, state,
or local government official, either directly or indirectly, or to
an attorney and solely for the purpose of reporting or
investigating a suspected violation of law; or (B) in a complaint
or other document that is filed under seal in a lawsuit or other
proceeding.
(ii) If
Employee files a lawsuit against the Company for alleged
retaliation by the Company for Employee reporting a suspected
violation of law, Employee may disclose the Company’s
Trade Secrets to Employee’s
attorney and use the Trade
Secret information in the court proceeding if Employee (A) files
any document containing the Trade Secret under seal; and (B) does not disclose
the Trade Secret, except
pursuant to court order.
3. Covenant
to Maintain Confidentiality of Third Party Trade
Secrets.
a. Employee shall not
disclose to the Company any Trade Secrets or confidential
information of any of Employee’s previous employers or of any
other person or entity to whom Employee owes a duty of
confidentiality.
b. Employee may be
exposed to Trade Secrets or confidential information of third
parties with whom the Company has a business relationship, such as
its customers or suppliers, during the course of Employee’s
employment with the Company. Employee agrees to treat third party
Trade Secrets and confidential information in the same manner as
Employee has agreed to treat the Company’s Confidential
Information under this Agreement.
4. Covenant
of Ownership and Disclosure of Developments.
a. Disclosure. Employee agrees to
promptly and fully disclose to the Company the existence, use,
and/or manner of operation of any and all Employment Inventions as
defined in Section
1 of this
Agreement.
b. Work Product. The Employee
acknowledges and agrees that all writings, works of authorship,
technology, Inventions, discoveries, ideas and other work product
of any nature whatsoever, that are created, prepared, produced,
authored, edited, amended, conceived, or reduced to practice by the
Employee individually or jointly with others during the period of
his employment by the Company and relating in any way to the
business or contemplated business, research, or development of the
Company (regardless of when or where the Work Product is prepared
or whose equipment or other resources is used in preparing the
same) and all printed, physical, and electronic copies, all
improvements, rights, and claims related to the foregoing, and
other tangible embodiments thereof (collectively,
“Work
Product”), as well as any and all rights in and to
copyrights, Trade Secrets, trademarks (and related goodwill), mask
works, patents, and other Intellectual Property Rights therein
arising in any jurisdiction throughout the world and all related
rights of priority under international conventions with respect
thereto, including all pending and future applications and
registrations therefor, and continuations, divisions,
continuations-in-part, reissues, extensions, and renewals thereof
(collectively, “Intellectual Property
Rights”), shall be the sole and exclusive property of
the Company.
c. For purposes of
this Agreement, Work Product includes, but is not limited to,
Company information, including plans, publications, research,
strategies, techniques, agreements, documents, contracts, terms of
agreements, negotiations, know-how, computer programs, computer
applications, software design, web design, work in process,
databases, manuals, results, developments, reports, graphics,
drawings, sketches, market studies, formulae, notes,
communications, algorithms, product plans, product designs, styles,
models, audiovisual programs, Inventions, unpublished patent
applications, original works of authorship, discoveries,
experimental processes, experimental results, specifications,
customer information, customer lists, manufacturing information,
marketing information, advertising information, and sales
information.
d. Work Made for Hire; Assignment.
The Employee acknowledges that, by reason of being employed by the
Company at the relevant times, to the extent permitted by law, all
of the Work Product consisting of copyrightable subject matter is
“work made for hire” as defined in the Copyright Act of
1976 (17 U.S.C. § 101), and such copyrights are therefore
owned by the Company. To the extent that the foregoing does not
apply, the Employee hereby irrevocably assigns to the Company, for
no additional consideration, the Employee’s entire right,
title, and interest in and to all Work Product and Intellectual
Property Rights therein, including the right to sue, counterclaim,
and recover for all past, present, and future infringement,
misappropriation, or dilution thereof, and all rights corresponding
thereto throughout the world. Nothing contained in this Agreement
shall be construed to reduce or limit the Company’s rights,
title, or interest in any Work Product or Intellectual Property
Rights so as to be less in any respect than that the Company would
have had in the absence of this Agreement. Employee agrees to take
all actions reasonably requested by the Company, both during and
after the term of Employee’s employment with the Company, to
assign to the Company, and to establish, perfect, exercise or
protect the Company’s rights in any Employment Inventions or
title thereto, including, without limitation, assisting in
obtaining or registering copyrights, patents, trademarks or similar
Intellectual Property Rights and executing assignments to the
Company.
e. Further Assurances; Power of
Attorney. During and after his employment, the Employee
agrees to reasonably cooperate with the Company to (i) apply for,
obtain, perfect, and transfer to the Company the Work Product and
Intellectual Property Rights in the Work Product in any
jurisdiction in the world; and (ii) maintain, protect, and enforce
the same, including, without limitation, executing and delivering
to the Company any and all applications, oaths, declarations,
affidavits, waivers, assignments, and other documents and
instruments as shall be requested by the Company. The Employee
hereby irrevocably grants the Company power of attorney to execute
and deliver any such documents on the Employee’s behalf in
his name and to do all other lawfully permitted acts to transfer
the Work Product to the Company and further the transfer, issuance,
prosecution, and maintenance of all Intellectual Property Rights
therein, to the full extent permitted by law, if the Employee does
not promptly cooperate with the Company’s request (without
limiting the rights the Company shall have in such circumstances by
operation of law). The power of attorney is coupled with an
interest and shall not be impacted by the Employee’s
subsequent incapacity.
f. Moral Rights. To the extent any
copyrights are assigned under this Agreement, the Employee hereby
irrevocably waives, to the extent permitted by applicable law, any
and all claims the Employee may now or hereafter have in any
jurisdiction to all rights of paternity, integrity, disclosure, and
withdrawal and any other rights that may be known as “moral
rights” with respect to all Work Product and all Intellectual
Property Rights therein.
g. No License. The Employee
understands that this Agreement does not, and shall not be
construed to, grant the Employee any license or right of any nature
with respect to any Work Product or Intellectual Property Rights or
any Confidential Information, materials, software, or other tools
made available to him by the Company.
5. Return of Information; Exit
Obligations. Upon (a)
voluntary or involuntary termination of the Employee’s
employment or (b) the Company’s request at any time during
Employee’s employment, the Employee shall (i) provide or
return to the Company any and all Company property, including keys,
key cards, access cards, identification cards, security devices,
employer credit cards, network access devices, computers, cell
phones, smartphones, PDAs, pagers, fax machines, equipment,
speakers, webcams, manuals, reports, files, books, compilations,
Work Product, email messages, recordings, tapes, disks, thumb
drives, or other removable information storage devices, hard
drives, negatives, and data and all Company documents and materials
belonging to the Company and stored in any fashion, including but
not limited to those that constitute or contain any Confidential
Information or Work Product, that are in the possession or control
of the Employee, whether they were provided to the Employee by the
Company or any of its business associates or created by the
Employee in connection with his employment by the Company; and (ii)
delete or destroy all copies of any such documents and materials
not returned to the Company that remain in the Employee’s
possession or control, including those stored on any non-Company
devices, networks, storage locations, and media in the
Employee’s possession or control.
6. Publicity. Employee hereby consents to any and
all uses and displays, by the Company and its agents, of the
Employee’s name, voice, likeness, image, appearance, and
biographical information in, on or in connection with any pictures,
photographs, audio, and video recordings, digital images, websites,
television programs, and advertising, other advertising, sales, and
marketing brochures, books, magazines, other publications, CDs,
DVDs, tapes, and all other printed and electronic forms and media
throughout the world, at any time during or after the period of his
employment by the Company, for all legitimate business purposes of
the Company (“Permitted Uses”).
Employee hereby forever releases the Company and its directors,
officers, employees, and agents from any and all claims, actions,
damages, losses, costs, expenses, and liability of any kind,
arising under any legal or equitable theory whatsoever at any time
during or after the period of his employment by the Company, in
connection with any Permitted Use.
7. Requests for Clarification. In the event
Employee is uncertain as to the meaning of any provision of this
Agreement or its application to any particular information,
document, item or activity, Employee will inquire in writing to the
Company’s human resources manager, specifying any areas of
uncertainty. The Company will respond in writing within a
reasonable time and will endeavor to clarify any areas of
uncertainty, including such things as whether it considers
particular information or documents to be Confidential Information,
and will endeavor to explain any provisions of this
Agreement.
8. Notice
of Compelled Disclosure. In the event that Employee becomes
legally compelled (by subpoena, discovery request, civil
investigative demand, or other judicial or compulsory process) to
disclose any of the Company’s Confidential Information,
Employee will provide the Company with prompt written notice so
that it may seek a protective order or other appropriate remedy to
protect and preserve the confidentiality of such Confidential
Information and/or waive compliance with the provisions of this
Agreement. In the event that such a protective order or other
remedy is not obtained, or compliance with the provisions of this
Agreement is waived, Employee shall disclose or furnish only that
portion of the Confidential Information that Employee is legally
required or authorized to produce and will exercise
Employee’s best efforts to obtain reliable assurance that the
Confidential Information will be kept confidential to the greatest
extent possible.
9. Non-Compete Covenant. In order to
preserve the confidentiality of the Company’s Confidential
Information, and to protect the goodwill and other legitimate
business interests of the Company, Employee agrees that, during
Employee’s employment with the Company and during the
twelve-month period following the termination of Employee’s
employment with the Company for any reason or no reason by Employee
or the Company (“Non-Competition Period”),
Employee shall not directly or indirectly engage in competition
with the Company, and/or provide other products or services that
are competitive with the products and/or services provided by the
Company (collectively, a “Competing Business”),
within the “Restricted Territory”
defined below, without the express written consent of the Company.
Employee further agrees that, during the Non-Competition Period,
Employee will not directly or indirectly assist, perform services
for, contract with, be employed by, establish or operate, or have
an equity interest in any person or entity, whether as an employee,
officer, director, owner, member, manager, agent, consultant,
independent contractor, or otherwise, that engages in a Competing
Business within the Restricted Territory, without the express
written consent of the Company. Employee agrees that the
Non-Competition Period set forth herein shall be extended for a
period equal to the duration of any breach of this covenant by
Employee. For purposes of this Agreement, the term
“Restricted
Territory” means (a) each and every country, province,
state, city or other political subdivision of the United States and
Canada; (b) each and every country, province, state, city or other
political subdivision of the European Union; and (c) each and every
country, province, state, city, or other political subdivision of
the world in which the Company or any of its subsidiaries or
affiliates is currently engaged in, currently plans to engage in,
or engages in business in during the Non-Competition
Period.
10. Non-Solicitation of Customers.
Employee understands and acknowledges that: (a) the
Company’s relationships with its customers are of great
competitive value; (b) the Company has invested and continues to
invest substantial resources in developing and preserving its
customer relationships and goodwill; and (c) the loss of any such
customer relationship or goodwill will cause significant and
irreparable harm to the Company. Employee promises, covenants and
agrees that during Employee’s employment with the Company and
for a period of two (2) years following the termination of
Employee’s employment with the Company for any reason or no
reason by Employee or the Company (the “Customer Non-Solicitation Restricted
Period”), Employee shall not personally or on behalf
of any other person or entity, or through any other person or
entity, directly or indirectly, contact, call on, solicit business
from, sell to, or do business with any customer of the Company who
did business with the Company during the term of Employee’s
employment with the Company, in connection with providing products
or services of, or entering into, any Competing Business. Employee
agrees that the Customer Non-Solicitation Restricted Period set
forth herein shall be extended for a period equal to the duration
of any breach of this covenant by Employee.
11. Non-Solicitation of Employees. Employee
promises, covenants and agrees that during Employee’s
employment with the Company and for a period of two (2) years
following the termination of Employee’s employment with the
Company for any reason or no reason by Employee or the Company (the
“Employee
Non-Solicitation Restricted Period”), Employee shall
not personally or on behalf of any other person or entity, or
through any other person or entity, directly or indirectly (a)
recruit, solicit or encourage any person who is employed by the
Company or was employed by the Company within six (6) months of the
termination of Employee’s employment with the Company
(“Restricted
Employee”) to become an employee or independent
contractor of, or perform other work for, Employee, any other
employer of Employee or any affiliated company, or any other person
or entity; (b) employ or hire, offer to employ or hire, or
facilitate or assist in the employing or hiring of, any Restricted
Employee, to work for Employee, any other employer of Employee or
any affiliated company, or any other person or entity; (c) ask,
invite, induce or encourage any Restricted Employee to terminate
his or her employment relationship with the Company or seek
employment with another person or entity; or (d) otherwise
interfere with or disrupt the employment or business relationship
between the Company and any of its employees. Employee agrees that
the Employee Non-Solicitation Restricted Period set forth herein
shall be extended for a period equal to the duration of any breach
of this covenant by Employee.
12. Remedies for Breach of the
Covenants. Employee
recognizes that the Company’s business interest in
maintaining the confidentiality of its Confidential Information,
its rights in its Employee Inventions, its relationships and
goodwill with its customers, and the stability of its work force,
is so great that the Company shall not have an adequate remedy at
law for any breach or threatened breach of the covenants contained
in this Agreement by Employee and shall suffer irreparable harm
from any such breach or threatened breach. Employee agrees that, in
the event of a breach or threatened breach by Employee of any of
the covenants contained in this Agreement, a court of competent
jurisdiction may issue a restraining order or an injunction against
Employee, restraining or enjoining Employee from engaging in
conduct or actions that violate the said covenants. In addition,
the Company shall be entitled to any and all other remedies
available to it at law or in equity, and no action by the Company
in pursuing a given remedy shall constitute an election to forego
other remedies.
13. Non-Disparagement.
Employee agrees and covenants that he
will not at any time make, publish, or communicate to any person or
entity or in any public forum any derogatory, defamatory or
disparaging remarks, comments, or statements concerning the
Company’s products or services, its existing and prospective
customers, suppliers, investors, or other associated third
parties, or any of the Company’s
current or former employees or
officers.
14. Reasonableness of Covenants. Employee
understands that the restrictions contained in the covenants set
forth herein have been imposed only to the extent necessary to
protect the Company from the loss of goodwill, from unfair
competition, and to preserve the Company’s Confidential
Information, including its Trade Secrets. Each Party expressly
acknowledges and agrees that the respective covenants and
agreements contained herein are reasonable as to both scope and
time, as applicable.
15. Judicial
Modification. Should any of the foregoing
restrictive covenants be determined by a court of competent
jurisdiction to be overbroad, unreasonable or unenforceable as
drafted, the court shall be authorized to modify or “blue
pencil” the overbroad or unenforceable provision and limit
the restrictions in such provision so that the provision is not
overbroad or unreasonable.
16. At-Will Employment. Employee’s
employment with the Company is at-will, and may be terminated by
Employee or by the Company at any time, with or without cause and
with or without advance notice. Nothing in this Agreement shall be construed to
in any way terminate, supersede, undermine, or otherwise modify the
at-will status of the employment relationship between the Company
and the Employee, pursuant to which either the Company or the
Employee may terminate the employment relationship at any time,
with or without cause, with or without notice.
17. General
Provisions.
. Attorneys’ Fees and
Costs. In the event that either Party commences an action to
enforce the terms of this Agreement, or to seek damages or
injunctive relief for the alleged breach thereof, the prevailing
Party shall be entitled to collect from the non-prevailing Party
the prevailing Party’s reasonable attorneys’ fees and
costs incurred therein.
a. Entire
Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof, and
supersedes all prior oral and written negotiations, communications,
discussions and agreements pertaining to its subject matter. The
Parties expressly acknowledge and agree, however, that no provision
in this Agreement is intended to, or shall be construed to, modify,
supersede, void, or otherwise alter the obligations of the Parties
under the Employment Agreement or any of the agreements and addenda
referenced therein and forming a part thereof.
b. Amendments.
No amendment or modification of any provision of this Agreement
will be effective unless it is agreed
to in a written document
that expressly amends this Agreement and is signed by all
Parties.
c. Waiver.
No waiver of any provision of this Agreement shall be effective
unless made in writing and signed by the waiving Party. The failure
of either Party to require the performance of any term or
obligation of this Agreement, or the waiver by either Party of any
breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
d. Severability.
Should any provision of this
Agreement be held by a court of competent jurisdiction to be
unenforceable as written, such
provision shall be enforced to the fullest extent permitted by
applicable law. Any such modification
of the unenforceable provision shall become a part hereof and
treated as though originally set forth in this Agreement. The
Parties further agree that any such court is expressly authorized
to modify any such
unenforceable provision of this Agreement in lieu of severing such
unenforceable provision from this Agreement in its entirety,
whether by rewriting the offending provision, deleting any or all
of the offending provision, by adding additional language to this
Agreement, or by making such other modifications as it deems
warranted to carry out the intent and agreement of the Parties as embodied herein to the
maximum extent permitted by law. The Parties expressly agree that
this Agreement as so modified by the court shall be binding upon
and enforceable against each of them. In any event, should one or
more of the provisions of this Agreement be held to be invalid,
illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other
provisions hereof, and if such provision or provisions are not
modified as provided above, this Agreement shall be construed as if
such invalid, illegal, or unenforceable provisions had not been set
forth herein.
e. Governing
Law, Jurisdiction
and Venue. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Utah,
without regard to any conflicts of law provisions. Any action or
proceeding by either Party to enforce this Agreement or to recover
damages or obtain injunctive relief or any other remedy 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 such courts and waive (a) any
objection to the laying of venue with respect to any such action,
proceeding, or litigation arising out of or in connection with this
Agreement in any of the aforesaid courts, and (b) any right to stay
or dismiss any such action, proceeding or litigation brought in any
of the aforesaid courts on the ground of inconvenient
forum.
f. Successors and
Assigns.
(i) Assignment by the
Company. The Company may assign
this Agreement to any subsidiary or corporate affiliate, or to any
successor or assign (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of
the business or assets of the Company. This Agreement shall
inure to the benefit of
the Company and its permitted
successors and assigns.
(ii) No Assignment by the
Employee. Employee may not
assign this Agreement or any part hereof. Any purported assignment
by Employee shall be null and void from the initial date of the
purported assignment.
g. Waiver
of Jury Trial. To the
fullest extent permitted by applicable law, each
Party hereby waives its right to a
trial by jury with respect to any claim or cause of action based
upon or arising out of or related to this Agreement, in any action,
proceeding or other litigation of any type brought by any Party
against the other Party, whether with respect to contract claims,
tort claims, statutory claims, or otherwise. Each Party agrees that
any such claim or cause of action shall be tried by the 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
paragraph 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.
h. Headings.
The section and paragraph headings used in this Agreement are for
convenience only and are not to be considered in construing or
interpreting this Agreement.
i. 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.
[Signatures on following page.]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth
below.
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EMPLOYEE:
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THE
COMPANY:
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BRIAN
BAKER
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DYNATRONICS
CORPORATION
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___________________________________
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By:
___________________________________
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Brian
Baker
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Its:_________________________________
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DATED__________________________
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TITLE
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___________________________________
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PRINT
NAME
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DATED:
_______________________
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INDEMNIFICATION AGREEMENT
This Indemnification Agreement
(“Agreement”),
dated as of August 26, 2019, is entered into by and between
DYNATRONICS CORPORATION, a Utah corporation (the
“Company”)
and Brian Baker (the “Indemnitee”).
Company and Indemnitee are sometimes referred to as a
“Party”
or collectively as the “Parties”
in this Agreement.
RECITALS:
WHEREAS, Indemnitee is the Chief Executive Officer of the
Company and a member of the Company’s Board of Directors
(“Board”);
WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted
against directors and executive officers of public
companies;
WHEREAS, the Board is aware that because of the increased
exposure to litigation and the costs associated with such
litigation, talented and experienced Persons are increasingly reluctant to serve or
continue serving as officers and directors of corporations unless
they are protected by comprehensive liability insurance and
indemnification;
WHEREAS, the Board has concluded that, in order to retain
and attract talented and experienced individuals to serve as
officers and directors of the Company
and its subsidiaries and to encourage such individuals to take the
business risks necessary for the success of the Company and its
subsidiaries, the Company should contractually indemnify its
officers and directors, and the officers and directors of its
subsidiaries, in connection with claims against such officers and
directors relating to their services to the Company and its
subsidiaries and has further concluded that the failure to provide
such contractual indemnification could be detrimental to
the Company, its subsidiaries and
shareholders and
WHEREAS, Indemnitee’s willingness to serve as an
officer of the Company is predicated, in substantial part, upon
the Company’s willingness
to indemnify Indemnitee in accordance with the principles reflected
above, to the fullest extent permitted by the laws of the State of
Utah, and upon the other undertakings set forth in this
Agreement.
AGREEMENT:
NOW,
THEREFORE, in consideration of
the mutual promises made in this Agreement and for other good and
valuable consideration, the receipt and legal sufficiency of which
is hereby acknowledged, the Parties, intending to be legally bound
hereby, agree as follows:
1. Definitions.
For purposes of this Agreement, the following terms shall have the
following meanings:
(a) “Agent”
with respect to the Company means any person who is
or was a director, officer, employee
or other agent of the Company
or a subsidiary; or is or was serving at the request of, for the
convenience of, or to represent
the interests of, the Company
or a subsidiary as a director,
officer, employee or Agent of another corporation, partnership,
joint venture, trust or other enterprise (including without
limitation any employee benefit plan whether or not subject to
the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”));
or was a director, officer,
employee or Agent of a predecessor corporation (or other
predecessor entity or enterprise) of the Company or a subsidiary, or was a
director, officer, employee or Agent
of another corporation, partnership, joint venture, trust or other
enterprise (including without limitation any employee benefit plan
whether or not subject to the ERISA) at the request of, for the convenience of,
or to represent the interests of such
predecessor.
(b) “Beneficial
Owner” has the meaning
given to the term “beneficial owner” in
Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”).
(c) “Change
in Control” means the
occurrence after the date of this Agreement of any of the following
events: (i) any Person is or
becomes the Beneficial Owner, directly or indirectly,
of securities of the Company
representing 30% or more of the Company’s then outstanding
Voting Securities; (ii) the
consummation of a reorganization, merger or consolidation, unless
immediately following such reorganization, merger or consolidation,
all of the Beneficial Owners of
the Voting Securities of the Company immediately prior to such
transaction beneficially own, directly or indirectly, more than 60%
of the combined voting power of the outstanding Voting Securities
of the entity resulting from such transaction; (iii)
during any period of two (2)
consecutive years, not including any period prior to the execution
of this Agreement, individuals who at the beginning of such period
constituted the Board (including for this purpose any new directors
whose election by the Board or nomination for election by the
Company’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute at least a majority of the Board; or
(iv) the shareholders of the
Company approve a plan of complete liquidation or dissolution of
the Company or an agreement for
the sale or disposition by the Company of all or substantially all
of the Company’s assets. Notwithstanding anything in this
Agreement, however, it is agreed that a change in ownership of
Prettybrook Partners, LLC or of Provco Partners I, LP, shall not be
deemed a Change in Control for purposes of this
Agreement.
(d) “Company”
shall include, in addition to Dynatronics Corporation, any constituent
corporation (including any constituent of a constituent) absorbed
in a consolidation or merger to which Dynatronics Corporation (or any of its
wholly owned subsidiaries) is a party which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, employees, Agents or fiduciaries, so that if Indemnitee
is or was a director, officer,
employee, Agent or fiduciary of
such constituent corporation, or is or was serving at the request
of such constituent corporation as a director, officer, manager, employee,
Agent or fiduciary of another
corporation, partnership, limited liability company, joint venture,
employee benefit plan, trust or other enterprise, Indemnitee shall
stand in the same position under the provisions of this Agreement
with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation
if its separate existence had continued.
(e) “Expense
Advance” means any
payment of Expenses advanced to
Indemnitee by the Company pursuant to Section
2
or Section
3
hereof.
(f) “Expenses”
means any and all expenses,
including attorneys’ and experts’ fees, court costs,
transcript costs, travel expenses, duplicating, printing and
binding costs, telephone charges, and all other costs and
expenses incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness or
participate in, any Proceeding. Expenses also shall include (i) expenses incurred
in connection with any appeal resulting from any Proceeding,
including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal
bond or its equivalent, and (ii) for purposes of
Section
4
only, Expenses incurred by Indemnitee in connection with
the interpretation, enforcement or defense of Indemnitee’s
rights under this Agreement, by litigation or otherwise. Expenses,
however, shall not include amounts paid in settlement by Indemnitee
or the amount of judgments or fines against
Indemnitee.
(g) “Indemnifiable
Event” means any event or
occurrence, whether occurring before, on or after the date of this
Agreement, related to the fact that Indemnitee is
or was a director, officer, employee or Agent of the Company or any subsidiary of the
Company, or is or was serving at the request of the Company as a
director, officer, employee, member, manager, trustee or
Agent of any other corporation,
limited liability company,
partnership, joint venture, trust or other entity or enterprise or
by reason of an action or inaction by Indemnitee in any such
capacity (whether or not serving in such capacity at the time any
Loss is incurred for which indemnification can be provided under
this Agreement).
(h) “Independent
Counsel” means a law
firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently performs, nor in the past
three (3) years has performed, services for either: (i) the Company
or Indemnitee (other than in connection with matters concerning
Indemnitee under this Agreement or of other indemnitees under similar agreements) or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(i) “Losses”
means any and all Expenses, damages, losses, liabilities,
judgments, fines, penalties (whether civil, criminal or
other), ERISA excise taxes,
amounts paid or payable in settlement, including any interest,
assessments, and all other charges paid or payable in connection
with investigating, defending, being a witness in or participating
in (including on appeal), or preparing to defend, be a witness or
participate in, any Proceeding.
(j) Other
References. References to
“other enterprises” shall include employee benefit
plans; references to “fines” shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit
plan; and references to “serving at the request of the
Company” shall include any service as a director, officer,
employee, Agent or fiduciary of
the Company which imposes duties on, or involves services by,
such director, officer,
employee, Agent or fiduciary
with respect to an employee benefit plan, its participants or its
beneficiaries; and if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this
Agreement.
(k) “Person”
means any individual, corporation, firm, partnership, joint
venture, limited liability company, estate, trust, business association,
organization, governmental entity or other entity and includes the
meaning set forth in Sections
13(d) and 14(d) of the Exchange Act.
(l) “Proceeding”
means any threatened, pending, or completed claim, suit, action,
proceeding or alternative dispute resolution mechanism, or any
hearing or investigation, whether civil, criminal, administrative,
investigative or otherwise, including without limitation any
situation which Indemnitee
believes in good faith might lead to the institution of any
such proceeding.
(m) “Reviewing
Party” shall mean,
subject to the provisions of Section
2(e),
any person or body appointed by the Board in accordance with
applicable law to review the Company’s obligations
hereunder and under applicable law,
which may include a member or members of the Board,
Independent Counsel or any other
person or body not a party to the
particular Proceeding for which Indemnitee is seeking
indemnification, as set forth in Section
2(g).
(n) “Utah
Court” shall have the
meaning ascribed to it in Section
8(e)
below.
(o) “Voting
Securities” means any
securities of the Company that vote generally in the election of
directors.
(a) Third Party
Proceedings. The Company shall
defend, indemnify and hold harmless Indemnitee to the fullest
extent permitted by the Utah
Revised Business Corporation Act (the “Act”) if Indemnitee is or was a
party or is threatened to be made
a party to any Proceeding
(other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is
or was or is claimed to be an Agent of the
Company or any subsidiary of the Company, by reason of any action
or inaction on the part of Indemnitee while an Agent of the Company, against all Expenses and
liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld)) actually and reasonably incurred by
Indemnitee in connection with such Proceeding if Indemnitee acted
in good faith and in a manner Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe Indemnitee’s
conduct was unlawful.
(b) Proceedings
By or in
the Right of the Company. The
Company shall defend, indemnify and hold harmless Indemnitee to the
fullest extent permitted by the Act if Indemnitee was or is
a party or is threatened to be
made a party to any Proceeding
by or in the right of the
Company or any subsidiary of the Company to procure a judgment in
its favor by reason of the fact that Indemnitee is or was or is
claimed to be an Agent of the Company, all Expenses and liabilities
of any type whatsoever (including, but not limited to, legal fees,
judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld)), in each case to the extent actually and
reasonably incurred by Indemnitee in connection with the
defense or settlement of such
Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company and its stockholders, except that no
indemnification shall be made in respect of any claim, issue or
matter as to which Indemnitee shall have been finally adjudicated
by court order or judgment to be liable to the Company in the
performance of
Indemnitee’s duty to the Company
and its stockholders unless and only to the extent that the court
in which such action or Proceeding is or was pending shall
determine upon application that, in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses,
which such court shall deem proper.
(c) Actions
Where Indemnitee Is Deceased.
If Indemnitee was or is a party, or is threatened to be made a
party, to any Proceeding by reason of
the fact that Indemnitee is or was an Agent of the Company, or by
reason of anything done or not done by Indemnitee in any such
capacity, and prior to, during the pendency of, or after completion
of, such Proceeding, Indemnitee shall die, then the Company shall defend, indemnify and hold
harmless the estate, heirs and legatees of Indemnitee against any
and all Expenses and liabilities reasonably incurred by or for
such persons or entities in
connection with the investigation, defense, settlement or appeal of
such Proceeding on the same basis as provided for Indemnitee
in Section
2(a)
and Section
2(b)
above.
(d) Extent
of Insurance. The Expenses and
liabilities covered hereby shall be net of any payments made
by D&O Insurance (as
defined in Section
14)
carriers or others.
(e) Review of
Indemnification Obligations.
Notwithstanding the foregoing, in the event any Reviewing Party
shall have determined (in a written opinion, in any case in
which Independent Counsel is
the Reviewing Party) that Indemnitee is not entitled to be
indemnified hereunder under applicable law: (i) the Company shall
have no further obligation under Section
2(a)
or Section
2(b)
to make any payments to Indemnitee not
made prior to such determination by such Reviewing Party; and (ii)
the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all Expenses
theretofore paid to Indemnitee to which Indemnitee is not
entitled hereunder under applicable
law; provided, however, that if Indemnitee has commenced or
thereafter commences legal Proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee is entitled to be indemnified hereunder under
applicable law, any determination made by any Reviewing Party that
Indemnitee is not
entitled to be indemnified
hereunder under applicable law shall
not be binding and Indemnitee shall not be required to reimburse
the Company for any Expenses theretofore paid in indemnifying
Indemnitee until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed). Indemnitee’s obligation to reimburse the
Company for any Expenses shall be unsecured and no interest shall
be charged thereon.
(f) Indemnitee
Rights on Unfavorable Determination; Binding
Effect. If any Reviewing Party
determines that Indemnitee
substantively is not entitled to be indemnified hereunder in whole
or in part under applicable law, Indemnitee shall have the right to
commence litigation seeking an initial determination by the court
or challenging any such determination by such Reviewing Party or
any aspect thereof, including the legal or factual bases therefor,
and the Company hereby consents to service of process and to appear
in any such Proceeding. Absent
such litigation, any determination by any Reviewing Party shall be
conclusive and binding on the Company and
Indemnitee.
(g) Selection of Reviewing
Party; Change in Control. A
determination, if required by applicable law, with respect
to Indemnitee’s
entitlement to indemnification shall be made in accordance with the
provisions of this Section
2(g).
If there has not been a Change in Control, a Reviewing Party shall
be selected by the Board, and if there has been such a Change in
Control (other than a Change in Control which has been approved by
a majority of the Board who were directors immediately prior to
such Change in Control), any Reviewing Party with respect to all
matters thereafter arising concerning the rights of Indemnitee to
indemnification of Expenses under this Agreement or any
other agreement or under
the Company’s Articles of
Incorporation or Bylaws (collectively, the
“Constituent
Documents”) as now or
hereafter in effect, or under any other applicable law, if desired
by Indemnitee, shall be Independent Counsel selected by Indemnitee and
approved by the Company (which
approval shall not be unreasonably withheld). Such counsel, among
other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified hereunder under applicable law and the
Company agrees to abide by such opinion. The Company agrees to pay
the reasonable fees of the Independent Counsel referred to above and to
indemnify fully such counsel against any and all
Expenses (including
attorneys’ fees), claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. Notwithstanding any
other provision of this Agreement, the Company shall not be
required to pay Expenses of more than one Independent Counsel in connection with all matters
concerning a single Indemnitee, and such Independent Counsel shall be the
Independent Counsel for any or all
other Indemnitees unless: (i) the employment of separate counsel by
one (1) or more Indemnitees has been previously authorized by the
Board in writing; or (ii) an Indemnitee shall have provided to the
Company a written statement that such Indemnitee has reasonably
concluded that there may be a conflict of interest between such
Indemnitee and the other Indemnitees with respect to the matters
arising under this Agreement.
3. Advancement of
Expenses. The Company shall
advance, prior to the final disposition of any Proceeding by final
adjudication to which there are no further rights of appeal, any
and all Expenses actually and reasonably paid or incurred by
Indemnitee in connection with any Proceeding arising out of an Indemnifiable Event.
Indemnitee’s right to such advancement is not subject to the
satisfaction of any standard of conduct. Without limiting the
generality or effect of the foregoing, within thirty (30) days
after any request by Indemnitee, the Company shall, in accordance
with such request, (a) pay such Expenses on behalf of Indemnitee,
(b) advance to Indemnitee funds in an amount sufficient to pay such
Expenses, or (c) reimburse Indemnitee for such Expenses. In
connection with any request for Expense Advances, Indemnitee shall
not be required to provide any documentation or information to the
extent that the provision thereof would undermine or otherwise
jeopardize attorney-client privilege. Execution and delivery to the
Company of this Agreement by Indemnitee constitutes an undertaking
by the Indemnitee to repay any amounts paid, advanced or reimbursed
by the Company pursuant to this Section
3
in respect of Expenses relating to,
arising out of or resulting from any Proceeding in respect of which
it shall be determined, pursuant to Section 8,
following the final disposition of such Proceeding,
that Indemnitee is not entitled to
indemnification hereunder. No other form of undertaking shall be
required other than the execution of this Agreement.
Indemnitee’s obligation to reimburse the Company for Expense
Advances shall be unsecured and no interest shall be charged
thereon.
4. Indemnification for
Expenses in Enforcing Rights.
To the full extent allowable under applicable law,
the Company shall also indemnify
against, and, if requested by Indemnitee, shall advance to
Indemnitee subject to and in accordance with Section
2,
any Expenses actually and reasonably paid or incurred by Indemnitee
in connection with any action or Proceeding by Indemnitee for (a) indemnification
or reimbursement or advance payment of Expenses by the Company under any
provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect
relating to Proceedings relating to Indemnifiable Events, and/or
(b) recovery under any directors’ and officers’
liability insurance policies maintained by the Company. However, in
the event that Indemnitee is ultimately determined not to be
entitled to such indemnification or insurance recovery, as the case
may be, then all amounts advanced under this Section
4
shall be repaid. Indemnitee shall be
required to reimburse the Company in the event that a final
judicial determination is made that such action brought by
Indemnitee was frivolous or not made in good
faith.
5. Partial
Indemnity. If Indemnitee is
entitled under any provision of this Agreement to indemnification
by the Company for a portion of any Losses in respect of a
Proceeding related to an Indemnifiable Event but not for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee
for the portion thereof to which Indemnitee is
entitled.
6. Notification
and Defense.
(a) Notification.
Indemnitee shall notify the Company in writing as soon as
practicable of any Proceeding which could relate to an
Indemnifiable Event or for which Indemnitee could seek Expense
Advances, including a brief description (based upon information
then available to Indemnitee) of the nature of, and the facts
underlying, such Proceeding. The failure by Indemnitee to timely
notify the Company hereunder shall not relieve the Company from any
liability hereunder unless such failure materially prejudices the
Company.
(b) Notice
to Insurers. If, at the time of
the receipt of a notice of a claim pursuant to Section
6(a)
hereof, the Company has
D&O Insurance (as defined
in Section 14
below) in effect, the Company shall
give prompt notice of the commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable
as a result of such Proceeding
in accordance with the terms of such policies.
(c) Defense
of Proceedings. The Company
shall be entitled to participate in the defense of any Proceeding
relating to an Indemnifiable Event at its own expense and, except as otherwise provided below,
to the extent the Company so wishes, it may assume the defense
thereof with counsel reasonably satisfactory to Indemnitee. After
notice from the Company to Indemnitee of its election to assume
the defense of any such
Proceeding, the Company shall not be liable to Indemnitee under
this Agreement or otherwise for any Expenses subsequently directly
incurred by Indemnitee in connection with Indemnitee’s
defense of such Proceeding other than
reasonable costs of investigation or as otherwise provided
below.
(d) Selection of
Counsel. Indemnitee shall be
entitled to retain one (1) or more counsel from time to time
selected by Indemnitee in Indemnitee’s reasonable discretion to act as
its counsel in and for the investigation, defense, settlement or
appeal of each Proceeding. The Company shall not waive any
privilege or right available to Indemnitee in any such
Proceeding. All Expenses
related to such counsel incurred after notice from the Company of
its assumption of the defense shall be at Indemnitee’s
own expense;
provided,
however, that if (i) Indemnitee’s employment of its
own legal counsel has been authorized by the Company, (ii)
Indemnitee has reasonably determined that there may be a conflict
of interest between Indemnitee and the Company in the defense of
such Proceeding, (iii) after a Change in Control,
Indemnitee’s employment of its own counsel has been approved
by the Independent Counsel or (iv) the Company shall not in fact
have employed counsel to assume the defense of such Proceeding,
then Indemnitee shall be entitled to retain its own separate
counsel (but not more than one (1) law firm plus, if applicable,
local counsel in respect of any such Proceeding) and all Expenses related to such
separate counsel shall be borne by the Company.
7. Procedure
upon Application for Indemnification. In order to obtain indemnification pursuant to
this Agreement, Indemnitee shall submit to the Company a written
request therefor, including in such request such documentation and
information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification following the final
disposition of the Proceeding. Indemnification shall be made
insofar as the Company determines Indemnitee is entitled to
indemnification in accordance with Section
8
below.
8. Determination of Right
to Indemnification.
(a) Mandatory
Indemnification; Indemnification as a Witness.
(i) To
the extent that Indemnitee shall have been successful on the merits
or otherwise in defense of any Proceeding relating to an Indemnifiable Event or
any portion thereof or in defense of any issue or matter therein,
including without limitation dismissal without prejudice,
Indemnitee shall be indemnified against all Losses relating to such
Proceeding in accordance with Section
2
to the full extent allowable by
law.
(ii) To
the extent that Indemnitee’s involvement in a Proceeding
relating to an Indemnifiable Event is to prepare to serve and serve
as a witness, and not as a party, the Indemnitee shall be indemnified against
all Losses incurred in connection therewith to the full extent
allowable by law.
(b) Standard of
Conduct. To the extent that the
provisions of Section
8(a)
are inapplicable to a Proceeding
related to an Indemnifiable Event that shall have been finally
disposed of, any determination of whether Indemnitee has satisfied the applicable standard
of conduct set forth in Section 16-10a-902 of
the Act that is a legally required condition to indemnification of
Indemnitee hereunder against Losses relating to such Proceeding and
any determination that Expense Advances must be repaid to the
Company (a “Standard of Conduct
Determination”) shall be
made as follows: (i) by a
majority vote of the Disinterested Directors (as defined by the Act),
even if less than a quorum of the Board; (ii) by a committee
of Disinterested Directors
designated by a majority vote of the Disinterested Directors, even though less than a
quorum; or (iii) if there are no such Disinterested Directors, by Independent Counsel in
a written opinion addressed to the Board, a copy of which shall be
delivered to Indemnitee.
(c) Making the Standard of
Conduct Determination. The
Company shall use its reasonable best efforts to cause any Standard
of Conduct Determination required under Section
8(b)
to be made as promptly as practicable.
If the person or persons designated to make the Standard of Conduct
Determination under Section
8(b)
shall not have made a determination
within thirty (30) days after the later of (A) receipt by the
Company of a written request from Indemnitee for indemnification
pursuant to Section 6(d)
(the date of such receipt being the
“Notification
Date”) and (B) the
selection of an Independent Counsel, if such determination is to be
made by Independent Counsel, then Indemnitee shall be deemed to
have satisfied the applicable standard of conduct;
provided
that such 30-day period may be
extended for a reasonable time, not to exceed an additional thirty
(30) days, if the person or persons making such determination in
good faith requires such additional time to obtain or evaluate
information relating thereto. Notwithstanding anything in this
Agreement to the contrary, no determination as to entitlement of
Indemnitee to indemnification under this Agreement shall be
required to be made prior to the final disposition of any
Proceeding.
(d) Payment
of Indemnification. If, in
regard to any Losses: (i)
Indemnitee shall be entitled to indemnification pursuant to
Section
8(a);
(ii) no Standard of Conduct
Determination is legally required as a condition to indemnification
of Indemnitee hereunder; or (iii) Indemnitee has been determined or deemed pursuant
to Section or Section 8(c)
to have satisfied the Standard of
Conduct Determination, then the
Company shall pay to Indemnitee, within five (5) days after the
later of (A) the Notification Date or (B) the earliest date on
which the applicable criterion specified in clause (i), (ii) or (iii)
is satisfied, above, an amount equal to such
Losses.
(e) Selection of
Independent Counsel for Standard of Conduct
Determination. If a Standard of
Conduct Determination is to be made by Independent Counsel pursuant
to Section
8(b),
the Independent Counsel shall be selected by the Board of
Directors, and the Company shall give written notice to Indemnitee
advising Indemnitee of the identity of the Independent Counsel so
selected.
(f) Presumptions
and Defenses.
(i) Indemnitee’s
Entitlement to Indemnification.
In making any Standard of Conduct Determination, the person or
persons making such determination shall presume that Indemnitee has
satisfied the applicable standard of conduct and is entitled to
indemnification, and the Company shall have the burden of proof to
overcome that presumption and establish that Indemnitee is not so
entitled. Any Standard of Conduct Determination that is adverse to
Indemnitee may be challenged by the Indemnitee in the Utah Court.
No determination by the Company (including by its directors or any
Independent Counsel) that Indemnitee has not satisfied any applicable
standard of conduct may be used as a defense to any legal
Proceedings brought by Indemnitee to
secure indemnification or reimbursement or advance payment of
Expenses by the Company hereunder or create a presumption
that Indemnitee has not met any
applicable standard of conduct.
(ii) Reliance
as a Safe Harbor. For purposes
of this Agreement, and without creating any presumption as to a
lack of good faith if the following circumstances do not exist,
Indemnitee shall be deemed to have acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best interests of the Company if
Indemnitee’s actions or omissions to act are taken in good
faith reliance upon the records of the Company, including its
financial statements, or upon information, opinions, reports or
statements furnished to Indemnitee by the officers or employees
of the Company or any of its
subsidiaries in the course of their duties, or by committees of the
Board or by any other Person (including legal counsel, accountants
and financial advisors) as to matters Indemnitee reasonably
believes are within such other Person’s professional or
expert competence and who has been selected with reasonable care by
or on behalf of the Company. In addition, the knowledge and/or
actions, or failures to act, of any director, officer,
Agent or employee of the Company shall
not be imputed to Indemnitee for purposes of determining the right
to indemnity hereunder.
(iii) No
Other Presumptions.
In making any determination concerning
Indemnitee’s right to indemnification, there shall be a
presumption that Indemnitee has satisfied the applicable standard
of conduct, and the Company may overcome such presumption only by
its adducing clear and convincing evidence to the contrary. For
purposes of this Agreement, the termination of any Proceeding by
judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not
meet any particular standard of conduct or have any particular
belief or that a court has determined that indemnification is not
permitted by this Agreement or applicable law. In addition, neither
the failure of any Reviewing Party to have made a determination as
to whether Indemnitee has met any particular standard of conduct or
had any particular belief, nor an actual determination by any
Reviewing Party that Indemnitee has not met such standard of
conduct or did not have such belief, prior to the commencement of
legal Proceedings by Indemnitee to secure a judicial determination
that Indemnitee should be indemnified under this Agreement under
applicable law, shall be a defense to Indemnitee’s claim or
create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief. Any
determination concerning Indemnitee’s right to
indemnification that is adverse to Indemnitee may be challenged by
Indemnitee in the courts of the State of Utah. No determination by
the Company (including without limitation by its directors or any
Independent Counsel) that Indemnitee has not satisfied any applicable
standard of conduct shall be a defense to any claim by Indemnitee
for indemnification or reimbursement or advance payment of Expenses
by the Company hereunder or create a presumption that
Indemnitee has not met any applicable
standard of conduct.
(iv) Defense
to Indemnification and Burden of Proof. It shall be a defense to any action brought by
Indemnitee against the Company to enforce this Agreement (other
than an action brought to enforce a Proceeding for Losses incurred
in defending against a Proceeding related to an Indemnifiable Event
in advance of its final disposition) that it is not permissible
under applicable law for the Company to indemnify Indemnitee for
the amount claimed. In connection with any such action or any
related Standard of Conduct Determination, the burden of proving
such a defense or that the Indemnitee did not satisfy the
applicable standard of conduct shall be on the
Company.
(g) The
Parties acknowledge and agree that the Standard of Conduct
Determination described in Section
8(b)
is being conducted solely for purposes of compliance with applicable Utah
state law. The standards to be utilized in making the Standard of
Conduct Determination shall be those set forth in
Section 16-10a-902 of
the Act. Such Standard of Conduct Determination, when made,
is expressly for use by the Company and shall not be used or
relied upon in any way by any other person or entity nor shall any
Standard of Conduct Determination made under or in connection with
this Agreement be admissible in any judicial or
administrative Proceeding for
any purpose whatsoever other than the enforcement of this Agreement
by the Parties to this Agreement.
9. Exclusions
from Indemnification.
Notwithstanding anything in this Agreement to the contrary, the
Company shall not be obligated to:
(a) indemnify or advance funds to Indemnitee for
Expenses or Losses with respect to Proceedings initiated by Indemnitee, including
any Proceedings against the
Company or its directors, officers, employees or other
indemnitees and not by way of defense,
except: (i) Proceedings
referenced in this Section
9(a)
(unless a court of competent
jurisdiction determines that each of the material assertions made
by Indemnitee in such Proceeding was not made in good faith or was
frivolous); or (ii) where the
Company has joined in or the Board has consented to the initiation
of such Proceedings.
(b) indemnify
Indemnitee if a final decision by a court of competent jurisdiction
determines that such indemnification is prohibited by applicable
law.
(c) indemnify
Indemnitee for the disgorgement of profits or the advancement or
reimbursements of any Expenses
incurred in connection with the purchase or sale by Indemnitee of
securities of the Company in violation of Section 16(b) of the Exchange Act, or any similar
successor statute.
(d) To
indemnify Indemnitee for Expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines,
ERISA excise taxes or penalties, and
amounts paid in settlement) to the extent such Expenses or liabilities have been paid directly to
Indemnitee by an insurance carrier under a policy of
officers’ and directors
liability insurance maintained by the Company;
or
(e) indemnify
or advance funds to Indemnitee for Indemnitee’s reimbursement
to the Company of any bonus or other incentive-based or
equity-based compensation previously received by Indemnitee or
payment of any profits realized by Indemnitee from the sale of
securities of the Company, as required in each case under
the Exchange Act (including any
such reimbursements under Section 304 of the Sarbanes-Oxley Act of 2002 in
connection with an accounting restatement of the Company or the payment to the Company of
profits arising from the purchase or sale by Indemnitee of
securities in violation of Section 306 of the Sarbanes-Oxley
Act).
10. Settlement.
The Company shall not be liable to Indemnitee under this Agreement
for any amounts paid in settlement of any threatened or pending
Proceeding related to an Indemnifiable Event effected without the
Company’s prior written consent, which shall not be
unreasonably withheld. The Company shall not settle any Proceeding
related to an Indemnifiable Event in any manner that would impose
any Losses on the Indemnitee without the Indemnitee’s prior
written consent.
11. Mutual
Acknowledgement. Both the
Company and Indemnitee acknowledge that in certain instances,
Federal law or public policy may override applicable state law and
prohibit the Company from indemnifying its directors and officers
under this Agreement or otherwise. For example, the Company and
Indemnitee acknowledge that the Securities and Exchange Commission
(the “SEC”) has taken the position that
indemnification is not permissible for liabilities arising under
certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in
the future to undertake with the SEC to submit the question of
indemnification to a court in certain circumstances for a
determination of the Company’s right under public policy to
indemnify Indemnitee.
12. Duration.
All agreements and obligations
of the Company contained herein shall continue during the period
that Indemnitee is a director or officer of the Company (or is
serving at the request of the Company as a director, officer,
employee, member, trustee or Agent of another enterprise) and shall continue
thereafter (i) so long as Indemnitee may be subject to any possible
Proceeding relating to an Indemnifiable Event (including any rights
of appeal thereto) and (ii) throughout the pendency of any
Proceeding (including any rights of
appeal thereto) commenced by Indemnitee to enforce or interpret his
or her rights under this Agreement, even if, in either case, he or
she may have ceased to serve in such capacity at the time of any
such Proceeding.
13. Non-Exclusivity.
The rights of Indemnitee hereunder will be in addition to any other
rights Indemnitee may have under the Constituent Documents, the Act, any other contract or otherwise
(collectively, “Other Indemnity
Provisions”); provided,
however, that (a) to the extent that Indemnitee otherwise would
have any greater right to indemnification under any Other Indemnity
Provision, Indemnitee will be deemed to have such greater right
hereunder and (b) to the extent that any change is made to any
Other Indemnity Provision which permits any greater right to
indemnification than that provided under this Agreement as of the
date hereof, Indemnitee will be deemed to have such greater right
hereunder.
14. Liability
Insurance. For the duration of
Indemnitee’s service as a director or officer of the Company,
and thereafter for so long as Indemnitee shall be subject to any
pending Proceeding relating to an Indemnifiable Event, the Company
shall use commercially reasonable efforts (taking into account the
scope and amount of coverage available relative to the cost
thereof) to continue to maintain in effect policies of
directors’ and officers’ liability insurance
(“D&O
Insurance”) providing
coverage that is at least substantially comparable in scope and
amount to that provided by the Company’s current policies of
D&O Insurance. In all policies of D&O Insurance maintained
by the Company, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits as are
provided to the most favorably insured of the Company’s
directors, if Indemnitee is a director, or of the Company’s
officers, if Indemnitee is an officer (and not a director) by such
policy. Upon request, the Company will provide to Indemnitee copies
of all D&O Insurance applications, binders, policies,
declarations, endorsements and other related
materials.
15. No
Duplication of Payments.
The Company shall not be liable under
this Agreement to make any payment to Indemnitee in respect of any
Losses to the extent Indemnitee has otherwise received payment
under any insurance policy, the Constituent Documents, Other Indemnity Provisions
or otherwise of the amounts otherwise indemnifiable by the Company
hereunder.
16. Subrogation.
In the event of payment to Indemnitee under this Agreement, the
Company shall be subrogated to the extent of such payment to all of
the rights of recovery of Indemnitee. Indemnitee shall execute all
papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to
enforce such rights.
17. Amendments.
No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the Parties hereto.
No waiver of any of the provisions of this Agreement shall be
binding unless in the form of a 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.
Except as specifically provided herein, no failure to exercise or
any delay in exercising any right or remedy hereunder shall
constitute a waiver thereof.
18. Binding
Effect. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the
Parties hereto and their respective successors (including any
direct or indirect successor by purchase, merger, consolidation or
otherwise to all or substantially all of the business and/or assets
of the Company), assigns, spouses, heirs and personal and legal
representatives. The Company shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all or a substantial part of the
business and/or assets of the Company, by written
agreement in form and substances
satisfactory to Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession
had taken place.
19. Severability.
Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company’s inability, pursuant to court
order, to perform its obligations under this Agreement shall not
constitute a breach of this Agreement. The provisions of this
Agreement shall be severable as provided in this
Section
19.
If this Agreement or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Company
shall nevertheless indemnify Indemnitee to the full extent
permitted by any applicable portion of this Agreement that shall
not have been invalidated, and the balance of this Agreement not so
invalidated shall be enforceable in accordance with its
terms.
20. Notices.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
delivered by hand, against receipt, or mailed, by postage prepaid,
certified or registered mail:
if
to Indemnitee, to the address set forth on the signature page
hereto.
if to the Company, addressed to the
Chairperson of the Board of Directors,
with a copy to the Corporate
Secretary at the principal executive offices of the
Company:
DYNATRONICS
CORPORATION
7030
Park Centre Blvd.
Cottonwood
Heights, Utah 84121
Notice of change of address shall be effective
only when given in accordance with this Section. All notices
complying with this Section shall be deemed to have been received
on the date of hand delivery or on the third (3rd)
business day after mailing.
21. Governing
Law and Forum. This Agreement
shall be governed by and construed and enforced in accordance with
the laws of the State of Utah applicable to contracts made and to
be performed in such state without giving effect to its principles
of conflicts of laws. The Company and Indemnitee hereby irrevocably
and unconditionally: (a) agree that any action or
Proceeding arising out of or in
connection with this Agreement shall be brought only in the Utah
Court and not in any other state or federal court in the United
States, (b) consent to submit to the exclusive jurisdiction of the
Utah Court for purposes of any action or Proceeding arising out of or in connection with
this Agreement, and (c) waive, and agree not to plead or make, any
claim that the Utah Court lacks venue or that any such action
or Proceeding brought in the
Utah Court has been brought in an improper or inconvenient
forum.
22. Headings.
The headings of the sections and paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute
part of this Agreement or to affect the construction or
interpretation thereof.
23. Counterparts.
This Agreement may be executed in one (1) or more counterparts,
each of which shall for all purposes be deemed to be an original,
but all of which together shall constitute one and the same
Agreement.
[SIGNATURE PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
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DYNATRONICS CORPORATION
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By: _____________________
Name:___________________
Title:_____________________
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INDEMNITEE
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Brian Baker
Address for Notice:
_____________________
_____________________
_____________________
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