PERSONAL SERVICES AGREEMENT
This Personal Services Agreement (this "AGREEMENT"), effective as of
March 18, 1998, is by and between Dynamic Materials Corporation, a Delaware
corporation (the "COMPANY"), and Xxx Xxxxxxx ("EMPLOYEE"). Unless the context of
this Agreement specifically indicates otherwise, capitalized terms used herein
shall have the meanings given them in the Asset Purchase Agreement (the
"PURCHASE AGREEMENT") by and among Employee, Spin Forge, LLC, a California
limited liability company ("SELLER") and the Company.
WHEREAS, the Company wishes to employ Employee, and Employee desires to
accept such employment, on the terms and conditions set forth herein:
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained herein, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Employee as Vice President
and General Manager of the Spin Forge/Aerospace Division of the Company
reporting to the President and CEO of the Company, and Employee hereby accepts
such employment and agrees to perform such duties and responsibilities as are
assigned to him from time-to-time by the President and CEO and the Board of
Directors of the Company.
2. FULL-TIME BEST EFFORTS. Employee shall devote his full and exclusive
professional time and attention to the performance of his obligations under this
Agreement, and will at all times faithfully, industriously and to the best of
his ability, experience and talent, perform all of his obligations hereunder.
3. TERM OF AGREEMENT. This Agreement shall be effective on the date
hereof and shall continue for two (2) years (the "TERM") unless sooner
terminated pursuant to Section 5 below.
4. COMPENSATION; REIMBURSEMENT.
(a) BASE SALARY. During the term of this Agreement, the
Company shall pay Employee a monthly salary of $11,250 (such monthly salary, as
may be increased from time-to-time, is referred to herein as the "BASE SALARY")
payable in such installments as is the policy of the Company with respect to
other similarly situated employees. Employee will be eligible for a merit salary
review at year-end 1998 and annually thereafter, consistent with the Company's
policy for executive officers.
(b) PERFORMANCE BONUS. Based upon performance and achievement
of mutually agreed upon goals, Employee will be eligible to receive a bonus of
up to 50% of Employee's Base Salary. Such bonus will be within the sole
discretion of the Board of Directors of the Company and will be based upon
Employee's performance and achievement of mutually agreed upon goals.
During 1998, the amount of the performance bonus for which Employee is otherwise
eligible under this paragraph will be prorated on a monthly basis and reduced to
reflect the actual number of months that Employee is employed with the Company.
(c) STOCK GRANT. Upon employment, Employee will receive 7,500
shares of the Company's Common Stock which will vest in four equal annual
installments upon each of the first four anniversaries of Employee's employment
date pursuant to the Company's standard Stock Agreement and subject to the
resale restrictions applicable to restricted securities under state and federal
securities laws.
(d) STOCK OPTIONS. On the Employee's employment date, which
date is anticipated to be the Closing Date of the transactions contemplated by
the Purchase Agreement, Employee will be granted an option to purchase 35,000
shares of the Common Stock of the Company pursuant to the 1997 Equity Incentive
Plan of the Company (the "OPTION PLAN") pursuant to the Company's standard
Option Agreement. The exercise price per share will equal the closing stock
price as reported by the Nasdaq National Market on the date of grant. The stock
option will vest in four equal annual installments upon each of the first four
anniversaries of Employee's employment date subject to the standard terms and
conditions for options granted to similarly situated employees. Such options are
intended to qualify as incentive stock options to the maximum extent allowed by
Section 422 of the Internal Revenue Code.
(e) BENEFITS. Employee shall be entitled to receive all
benefits materially comparable to those generally available from time-to-time to
other executives of the Company, including: (i) term life insurance coverage in
the amount of $270,000, which is in addition to the standard term life insurance
coverage provided in the Company's standard benefits plan; (ii) participation in
the executive long-term disability plan, subject to any waiting periods or
exclusions required by the insurance provider; (iii) four weeks of vacation per
year until such time as Employee's length of service entitles Employee to
additional vacation; (iv) participation in the Company's standard benefit
programs including health and dental insurance, term life insurance, accidental
death and dismemberment insurance, short and long term disability, paid holidays
and certain other standard benefits provided by the Company; and (v)
participation in the Company's 401(k) retirement plan with a matching
contribution made by the Company equal to 50% of Employee's contribution to the
plan.
(f) COMPANY AUTOMOBILE. The Company shall provide Employee a
leased Company automobile, which shall have a leasing cost at substantially the
same level as automobiles provided to similarly situated employees, for so long
as similarly situated employees are entitled to this benefit. In addition, the
Company will pay all automobile insurance expenses for such automobile.
(g) EXPENSE REIMBURSEMENT. The Company shall reimburse
Employee for all travel expenses and other disbursements incurred by Employee
for or on behalf of the Company in
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the performance of his duties hereunder, subject to and in accordance with the
Company's expense reimbursement policies and procedures, as amended from
time-to-time.
5. TERMINATION.
(a) The Company may terminate the Agreement at any time for
Cause (as hereinafter defined) effective immediately upon written notice to
Employee. Such notice shall specify that a termination is being made for Cause
and shall state the basis therefor. For purposes of this Agreement, termination
for "Cause" shall be defined as termination because of:
(i) The willful and continued failure by
Employee to substantially perform, or the
gross negligence in the performance of, his
duties hereunder for a period of fifteen
days after the Chief Executive Officer of
the Company has made a written demand for
performance which specifically identifies
the manner in which he believes that
Employee has not substantially performed his
duties.
(ii) The commission by Employee of a willful act
of dishonesty or misconduct which is
injurious to the Company.
(iii) A conviction or a plea of guilty or nolo
contendere in connection with fraud or any
crime that constitutes a felony in the
jurisdiction involved.
(iv) The willful misconduct by Employee with
respect to the business and affairs of the
Company, including the violation of any
material Company policy.
(v) The breach of any representation, warranty
or covenant of Employee or Seller contained
in the Purchase Agreement, the Operating
Lease by and among Employee, Seller and the
Company, or the Option Agreement by and
among Employee, Seller and the Company, all
dated as of an even date herewith.
A termination pursuant to this Section 5(a) shall take effect 30 days
after the giving of the notice contemplated hereby unless Employee shall, during
such 30-day period, remedy to the satisfaction of the Company the behavior
specified in such notice; provided, however, that such termination shall take
effect immediately upon the giving of such notice if the Company shall have
determined that such behavior is not remediable (which determination shall be
stated in such notice).
(b) The Company may terminate the Employee's employment for
any reason other than Cause at any time (referred to herein as a termination
Without Cause) the Term.
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(c) INVOLUNTARY TERMINATION.
(i) If Employee is incapacitated or disabled by
accident, sickness or otherwise so as to
render Employee mentally or physically
incapable of performing the services
required to be performed by Employee under
this Agreement for a period of 90
consecutive days or longer or for a total
of 90 days within any six-month period, the
Company may, at that time or within any
reasonable time thereafter, at its option,
terminate the employment of the Employee
under this Agreement immediately upon
giving the Employee notice to that effect.
(ii) If Employee dies during the Term, the Term
shall be deemed to have terminated as of the
date of Employee's death.
(iii) Any termination of the Term under this
Section 5(c) is hereinafter referred to as
an "Involuntary Termination."
(d) Any termination of the employment of the Employee
hereunder other than (i) a termination for Cause, (ii) a termination Without
Cause or (iii) an Involuntary Termination shall be deemed to be a Voluntary
Termination. A Voluntary Termination shall be deemed to be effective immediately
upon such termination.
(e) Upon the termination of the Employee's employment
hereunder pursuant to an Involuntary Termination, a termination for Cause, a
termination Without Cause or a Voluntary Termination, neither Employee nor
Employee's beneficiary or estate shall have any further rights or claims against
the Company under this Agreement except the right to receive:
(i) the unpaid portion of the Base Salary
provided for in Section 4(a), computed on
a pro rata basis to the date of termination;
(ii) reimbursement for any expenses for which
Employee shall not have theretofore been
reimbursed as provided in Section 4; and
(iii) if Employee has been terminated pursuant to
a termination Without Cause, Employee shall
be entitled, in addition to the amounts
computed pursuant to Sections 5(a) and (b),
to continue receiving the Base Salary for a
period equal to the longer of (A) six months
from the date of termination, or (B) that
period beginning on the termination date
and ending on the second anniversary of the
date of this Agreement, provided that
Employee shall continue to comply with the
applicable provisions of this Agreement.
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6. PROPRIETARY INFORMATION AGREEMENT. Employee shall enter into the
Company's standard form of Proprietary Information Agreement attached hereto as
Exhibit A as of the date hereof.
7. NON-COMPETITION AGREEMENT. Employee shall enter into the
Non-Competition Agreement attached hereto as Exhibit B as of the date hereof.
8. MISCELLANEOUS.
(a) JUDICIAL LIMITATION. In the event that any provision of
this Agreement is more restrictive than permitted by the law of the jurisdiction
in which the Company seeks enforcement thereof, the provisions of this Agreement
shall be limited only to that extent that a judicial determination finds the
same to be unreasonable or otherwise enforceable. Such invalidity or
unenforceability shall not affect any other terms herein, but such term shall be
deemed deleted, and such deletion shall not affect the validity of the other
terms hereof. In addition, if any one or more of the terms contained in this
Agreement shall for any reason be held to be excessively broad or of an overly
long duration, that term shall be construed in a manner to enable it to be
enforced to the extent compatible with applicable law. Moreover, notwithstanding
any judicial determination that any provision of this Agreement is not
specifically enforceable the parties intend that the Company shall nonetheless
be entitled to recover monetary damages as a result of any breach hereof.
(b) INJUNCTIVE RELIEF. In view of the nature of the rights in
goodwill, business reputation and prospects of the Company to be protected under
this Agreement, Employee understands and agrees that the Company could not be
reasonably or adequately compensated in damages in an action at law for
Employee's breach of his obligations hereunder. Accordingly, Employee
specifically agrees that he shall be entitled to temporary and permanent
injunctive relief to enforce the provisions of this Agreement and that such
relief may be granted without the necessity or proving actual damages. This
provision with respect to injunctive relief shall not, however, diminish the
right of the Company to claim and recover damages in addition to injunctive
relief.
(c) WAIVER. The failure of the Company to enforce at any time
any of the provisions of this Agreement or to require at any performance by
Employee of the provisions hereof shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this Agreement, or any part
hereof, or the right of the Company thereafter to enforce each and every
provision in accordance with the terms of this Agreement.
(d) SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
(e) ASSIGNABILITY. This Agreement shall be freely assignable
by the Company and shall inure to the benefit of its successors and assigns.
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(f) ENTIRE AGREEMENT. This Agreement, including the
Proprietary Information Agreement and the Non-Competition Agreement referred to
herein, which are incorporated herein and made a part hereof, embody the entire
agreement and understanding of the parties hereto and supersede all prior
agreements or understandings (whether written or oral) with respect to the
subject matter hereof.
(g) GOVERNING LAW AND VENUE. The validity of this Agreement
and any of its terms and provisions, as well as the rights and duties of the
parties hereunder, shall be governed by the laws of the State of California
(without regard to its conflicts of law doctrines) and the venue for any action
to enforce or to interpret this Agreement shall be in a court of competent
jurisdiction located in the State of Colorado and each of the parties consents
to the jurisdiction of such court in any such action or proceeding and waives
any objection to venue laid therein.
(h) AMENDMENTS. This Agreement may not be amended, altered or
modified other than by a written agreement between the parties hereto.
(i) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof shall bear the
signatures of all of the parties indicated as the signatories hereto.
(j) NOTICES. All notices, requests, demands and other
communications under this Agreement shall be given in writing and shall be
served either personally, by facsimile or delivered by first class mail,
registered or certified, return receipt requested, postage prepaid and properly
addressed to the parties as noticed herein. Notice shall be deemed received upon
the earliest of actual receipt, confirmed facsimile or three (3) days following
mailing pursuant to this section.
(k) INTERPRETATION. Each party has had the opportunity and has
reviewed and revised this Agreement and, therefore, the rule of construction
requiring that any ambiguity be resolved against the drafting party shall not be
employed in the interpretation of this Agreement. The section headings contained
in this Agreement are for convenience and reference purposes only and shall not
affect in any way the meaning and interpretation of this Agreement.
(l) ATTORNEYS' FEES AND COSTS. If either party shall commence
any action or proceeding against the other to enforce the provisions hereof, or
to recover damages as a result of the alleged breach of any provisions hereof,
the prevailing party therein shall be entitled to recover all reasonable costs
incurred in connection therewith, including reasonable attorneys' fees.
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EXECUTED as of the date first set forth above.
DYNAMIC MATERIALS CORPORATION
/s/Xxxxxxx Santa
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Xxxxxxx Santa
Vice President, Finance and
Chief Financial Officer
EMPLOYEE
/s/Xxxxxx Xxxxxxx
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Xxx Xxxxxxx
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