STOCK AGREEMENT
THIS STOCK AGREEMENT (this "AGREEMENT") is made this 18th day of March,
1998 by and between DYNAMIC MATERIALS CORPORATION, a Delaware corporation (the
"COMPANY"), having a principal place of business at 000 Xxxxx Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000 and XXXXXX XXXXXXX ("XXXXXXX"), an individual having a
principal place of business at 0000 Xxxx Xxxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx
00000.
RECITALS
A. The Company, Xxxxxxx, Xxxxxxx Xxxxx Xxxxxxx and Spin Forge, LLC, a
California limited liability company ("SELLER"), have entered into a certain
Asset Purchase Agreement (the "PURCHASE AGREEMENT") dated as of an even date
herewith whereby the Company is purchasing certain assets owned by Seller and
used in the conduct of Seller's metal fabrication business. Capitalized terms
not otherwise defined herein shall have the meanings ascribed to such terms in
the Purchase Agreement.
A. The Company and Xxxxxxx have entered into a certain Personal
Services Agreement (the "PERSONAL SERVICES AGREEMENT") dated as of an even date
herewith whereby the Company has employed Xxxxxxx as Vice President and General
Manager of the Spin Forge/Aerospace Division of the Company.
B. The Company has agreed to issue 7,500 shares of the Company's Common
Stock to Xxxxxxx as part of his compensation under the terms of the Personal
Services Agreement subject to certain restrictions as set forth herein (the
"STOCK").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and conditions set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties to this Agreement hereby agree as follows:
1. VESTING OF PURCHASE STOCK. A certain portion of the Stock shall be
subject to the vesting schedule set forth in Section 2 of this Agreement. In the
event Xxxxxxx shall cease to be employed by the Company (including a parent or
subsidiary of the Company) at any time prior to the fourth anniversary of
Xxxxxxx'x employment (the Closing Date being considered the first day of
Xxxxxxx'x employment for purposes of this Agreement (the "COMMENCEMENT DATE"))
for any reason, or no reason with or without cause, Xxxxxxx shall forfeit and
shall have no rights concerning, interest in or claim to the unvested portion of
the Stock as determined in accordance with the vesting schedule set forth in
Section 2 of this Agreement. Upon the date on which Xxxxxxx ceases to be so
employed (the "TERMINATION DATE"), the unvested portion of the Stock shall
revert to the Company;
provided, however, that the termination of Xxxxxxx'x employment with the Company
prior to the fourth anniversary of the Commencement Date shall not affect
Xxxxxxx'x right to receive the vested portion of the Stock.
2. VESTING SCHEDULE. Xxxxxxx'x right to receive the Stock shall vest in
accordance with the following schedule:
PORTION OF STOCK WHICH XXXXXXX
IF TERMINATION DATE IS SHALL FORFEIT PURSUANT TO SECTION
1 OF THIS AGREEMENT
----------------------------------------- ---------------------------------
After the Commencement Date and before the 100%
first anniversary of the Commencement Date
After the first anniversary of the 75%
Commencement Date and before the second
anniversary of the Commencement Date
After the second anniversary of the 50%
Commencement Date and before the third
anniversary of the Commencement Date
After the third anniversary of the 25%
Commencement Date and before the fourth
anniversary of the Commencement Date
0%
After the fourth anniversary of the
Commencement Date
3. NO EMPLOYMENT AGREEMENT. Nothing in this Agreement shall affect in
any manner whatsoever the right or power of the Company to terminate Xxxxxxx'x
employment for any reason, or for no reason, with or without cause.
4. MERGERS; ADJUSTMENTS; ETC. If, from time to time during the period
prior to the date which is four years after the Commencement Date:
(a) there is any stock dividend or liquidating dividend of
cash and/or property, stock split, or other change in the character or
amount of any of the outstanding securities of the Company; or
(b) there is any consolidation, merger or sale of all, or
substantially all, of the assets of the Company;
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then, in such event, any and all new, substituted or additional securities or
other property to which Xxxxxxx is entitled by reason of his ownership of the
Stock shall be immediately subject to this Agreement and shall be included in
the term "Stock" for all purposes of this Agreement.
5. RESTRICTIONS UNDER SECURITIES LAWS. Xxxxxxx acknowledges that he is
aware that the Stock to be issued to him by the Company pursuant to the Personal
Services Agreement and this Agreement has not been registered under the
Securities Act of 1933 (the "SECURITIES ACT") and that the Stock is deemed to
constitute "restricted securities" under Rule 144 promulgated under the
Securities Act. In this regard, Xxxxxxx represents and warrants to the Company
that Xxxxxxx will hold the Stock for his own account and has no present
intention of distributing or selling the Stock except as permitted under the
Securities Act. Xxxxxxx further represents and warrants that he has either (i)
preexisting personal or business relationships with the Company or any of its
officers, directors or controlling persons, or (ii) the capacity to protect his
own interests in connection with the receipt of the Stock by virtue of the
business or financial expertise of any professional advisors to him who are
unaffiliated with and who are not compensated by the Company or any of its
affiliates, directly or indirectly. Xxxxxxx acknowledges that the exemption
from registration of the Stock under the Securities Act provided under Rule 144
of the Securities Act will not be available for at least two years from the
Commencement Date unless at least one year from the Commencement Date (i) a
public trading market then exists for the Common Stock of the Company, (ii)
adequate information concerning the Company is then available to the public,
and (iii) Xxxxxxx complies with the other terms and conditions of Rule 144.
Xxxxxxx further acknowledges that any sale of Stock may be made only in
limited amounts in accordance with the terms and conditions of Rule 144.
6. RESTRICTIVE LEGENDS. All certificates representing shares of Stock
subject to the terms of this Agreement shall have endorsed thereon the following
legends:
(a) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS SET FORTH IN A STOCK AGREEMENT BETWEEN THE CORPORATION AND
THE REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THIS CORPORATION. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES SUBJECT TO
SUCH RESTRICTIONS IS VOID WITHOUT PRIOR EXPRESS WRITTEN CONSENT OF THE ISSUER OF
THESE SHARES.
(b) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993 (THE "SECURITIES ACT"). THEY
MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED UNLESS THE
SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION THEREFROM IS
AVAILABLE.
(c) Any legend required to be placed thereon by appropriate
Blue Sky officials.
7. TRANSFER RESTRICTIONS. Xxxxxxx shall not sell or transfer any shares
of the Stock that have not vested in accordance with the schedule set forth in
Section 2 of this Agreement. Without
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in any way limiting the foregoing, Xxxxxxx further agrees that he shall in no
event make any transfer or disposition of all or any portion of the Stock unless
and until:
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with said registration statement; or
(b) Xxxxxxx shall have (i) notified the Company of the
proposed transfer or disposition by providing the Company with a detailed
written statement of the circumstances surrounding the proposed transfer or
disposition, and (ii) furnished the Company with an opinion of Xxxxxxx'x counsel
to the effect that such transfer or disposition will not require registration of
such shares under the Securities Act, which opinion shall have been concurred in
by counsel for the Company, such concurrence not to be unreasonably withheld.
8. VOID TRANSFERS. The Company shall not be required (i) to transfer on
its books any shares of Stock which shall be been sold or transferred in
violation of any of the provisions set forth in this Agreement, or (ii) to treat
as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so transferred.
9. NOTICE. Except as otherwise provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be delivered in person, with receipt acknowledged, or sent by confirmed
facsimile or by United States mail as the case may be, registered or certified,
return receipt requested, postage prepaid and addressed as follows:
If to the Company: Dynamic Materials Corporation
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Santa, Chief Financial Officer
Telephone: 303/000-0000
Fax: 303/000-0000
With a copy to: Xxxxx, Xxxxxx & Xxxxxx LLP
Suite 4700
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx, Esq.
Telephone: 303/000-0000
Fax: 303/000-0000
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If to Xxxxxxx: Dynamic Materials Corporation
Spin Forge/Aerospace Division
0000 Xxxx Xxxxx Xxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
With a copy to: Wolf, Xxxxxx & Xxxxxxx, LLP
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
Or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be
deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, three (3) business days after the same
shall have been deposited in the United States mail, or when received by
confirmed facsimile.
10. ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement of the parties and supersedes any and all prior and
contemporaneous agreements, negotiations, correspondence, understandings and
communications between the parties, whether written or oral, respecting the
subject matter hereof.
11. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted, if possible, rather than
voided in order to achieve the intent of the parties to the extent possible. In
any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
12. GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado, without regard
to its choice-of or conflicts-of-laws, rules and venue for any action to enforce
or 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.
13. INUREMENT. This Agreement shall be binding upon and shall inure to
the benefit of the successors and assigns of the Company and Xxxxxxx.
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14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so delivered shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
15. HEADINGS. The section headings contained herein are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
DYNAMIC MATERIALS CORPORATION
/s/Xxxxxxx Santa
---------------------------------------
Xxxxxxx X. Santa
Vice President, Finance and
Chief Financial Officer
XXXXXX XXXXXXX
/s/Xxxxxx Xxxxxxx
----------------------------------------
Xxxxxx Xxxxxxx
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