Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement and
its Exhibits (this “Agreement”), entered into the 23rd day of
April, 2008, effective as of January 1, 2008, is by and between Dynamic
Materials Corporation, a Delaware corporation (the “Company”), and
Richard A. Santa, a resident of the State of Colorado (“Executive”)
(together, the “parties”).
Recitals
A. Executive has
significant experience in the management of companies and is willing to serve
the Company on the terms and subject to the conditions hereinafter set forth.
B. The Company
desires to secure the continued services of Executive subject to the terms and
conditions hereinafter set forth.
C. This agreement
replaces, in its entirety, that certain Employment Agreement between the Company
and Executive dated March 3, 2005.
Agreement
In consideration of the
foregoing and the mutual covenants and promises contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Employment. The Company hereby
employs Executive as Senior Vice President and Chief Financial Officer of the
Company reporting to the Chief Executive Officer of the Company, and Executive
hereby accepts such employment and agrees to perform such duties and
responsibilities as are assigned to him from time-to-time by the Chief
Executive Officer of the Company.
2. Full-time Best Efforts. Executive 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 this obligations
hereunder. Executive shall not, without
the express written consent of the Company, directly or indirectly, engage,
alone or with others, in any other enterprises or business concerns, nor render
professional services to, own, control, manage, consult with, be employed by,
or otherwise have an interest in, any such enterprises or concerns, during the
term of his continued employment with the Company. Without limiting the generality of any other
provision herein, transactions in securities of publicly traded companies and
other passive investment activities shall not be considered prohibited by the
foregoing sentence, except as such transactions and activities may violate the
Company’s conflict of interest policy, if any, in place from time to time.
3. Term of Agreement. This agreement shall be effective on January 1,
2008 (the “Effective Date”) and shall continue until December 31,
2008 (the “Term”), unless otherwise terminated by either party pursuant
to Section 5 below.
4. Compensation Reimbursement.
(a) Salary.
During the term of this Agreement, the Company shall pay Executive an
annual salary (“Salary”) of $275,000 payable in accordance with the
Company’s standard payroll practices for similarly situated employees.
The compensation committee of the Company’s board of directors (the “Compensation
Committee”) will review Executive’s Salary at least annually and may
increase (but not reduce) Executive’s Salary in its sole discretion. All compensation paid to Executive hereunder
is subject to all deductions required by law.
(b) Bonus.
Executive shall be eligible to receive a non-discretionary annual bonus equal
to 1.0% of the Company’s 2008 net income.
Executive shall also be eligible to receive a discretionary annual bonus
in an amount up to 20% of Executive’s Salary.
The discretionary bonus will be determined based on performance goals
and rules established by the Compensation Committee. The bonus and discretionary bonus, if any,
will be payable before March 15, 2009.
Executive is not guaranteed any bonus payment.
(c) Stock Incentives. Executive shall be eligible to receive restricted
shares of the common stock of the Company under the Company’s 2006 Stock
Incentive Plan (the “Incentive Plan”) subject to the terms and
conditions of such plan and as granted by the Compensation Committee. If
the Company terminates Executive’s employment for any reason other than Cause
pursuant to Section 5(b), all restricted stock held by Executive shall
immediately vest, subject to the terms and conditions of the Incentive Plan.
(d) Benefits.
Executive shall receive the following Company benefits:
(i) term life
insurance coverage in the amount of $415,000 which is in addition to the
standard term life insurance provided in the Company’s standard benefit plan;
(ii) participation in
the Company’s executive long-term disability plan, subject to any waiting
periods or exclusions required by the insurance provider;
(iii) five weeks of
vacation per year until such time as Executive’s length of service entitles
Executive 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;
(v) participation in
the Company’s 401(k) retirement plan; and
(vi) reimbursement of up
to $5,000 of professional service fees for a financial planning and/or tax consultant
to advise Executive.
(e) Expense Reimbursement. The Company shall reimburse Executive for all
travel expenses and other disbursements incurred by Executive for or on behalf
of the Company in the performance of his duties hereunder, subject to and in
accordance with the Company’s expense reimbursement policies and procedures, as
in effect from time-to-time.
2
5. Termination.
(a) The Company may
terminate Executive’s employment at any time for Cause (as hereinafter
defined), effective immediately upon written notice to Executive. Such notice
shall specify that a termination is being made for Cause and shall state the
basis therefor. Any termination under this subparagraph shall serve to relieve
Executive of all his duties and authority on behalf of the Company as of the
date such notice states the termination is to take effect. All obligations of the Company to Executive
hereunder shall terminate as of the effective date of any such termination,
except for obligations accrued prior to such effective date. For purposes of this Agreement, termination
for “Cause” shall include any of the following that detrimentally affect the
Company:
(i) a willful and
substantial breach by Executive of the terms of this Agreement or any written
agreement between Executive and the Company that has a materially adverse effect
on the business and affairs of the Company;
(ii) the failure by
Executive 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 identities the manner in which he believes that Executive has not
substantially performed his duties;
(iii) the commission by
Executive of a willful act or failure to act of misconduct which is injurious
to the Company, including, but not limited to, material violations of any
Company policy (such as the Company’s code of ethics);
(iv) 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; or
(v) an act of failure
to act constituting fraud or dishonesty that compromises Executive’s ability to
act effectively as a high-level executive of the Company.
(b) The Company may
terminate Executive’s employment for any reason other than Cause at any time
upon the payment to Executive of (i) an amount equal to one year’s Salary,
which amount shall be payable in twelve monthly payments (the “Termination
Payments”), plus (ii) a bonus for such period, based on the average bonus
(if any) paid to Executive for the two years preceding the termination;
provided, that Executive shall execute a release, prepared by the Company, releasing
the Company from all claims as a condition of receiving the Salary and bonus (if
any) pursuant to this Agreement. Such
amounts received under this provision shall be reduced to the extent that
Executive accepts other employment prior to the receipt of the final
Termination Payment. Any termination
under this subparagraph shall serve to relieve Executive of all his duties and
authority on behalf of the Company as of the date such notice states the
termination is to take effect. All
obligations of the Company to Executive under this Agreement shall terminate as
of the effective date of any such termination, except for obligations accrued
prior to such effective date.
3
(c) Upon the termination of
Executive’s employment hereunder, neither Executive nor Executive’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 earned Salary computed on a pro rata basis to the date of termination;
(ii) any unpaid bonus owing
under Section 4(b) or 5(b); and
(iii) reimbursement for any
expenses for which Executive shall not have theretofore been reimbursed as
provided in Section 4(e).
(d) Notwithstanding any
other provision of this Section 5, Executive shall have the right to
terminate his employment at any time upon sixty days’ written notice to the
Company (or upon such shorter notice as the Company may agree in writing in
connection with such termination). Any such termination by Executive shall be
deemed effective upon receipt by the Company of such notice. Any termination under this subparagraph shall
be effective as of the date stated in the notice and shall serve to relieve
both parties from all their duties and obligations to one another hereunder
after such date, except for obligations accrued prior to such effective date.
(e) If Executive dies
during the term of his employment hereunder, this Agreement shall automatically
terminate as of the date of his death and the parties shall be relieved from
their respective duties and obligations to one another as of the effective date
of any such termination. Executive’s
estate or designated beneficiaries shall receive any accrued but unpaid portion
of Executive’s Salary and the bonus, if any, he would have received in respect
of the portion of the fiscal year prior to his termination, payable at the same
time as bonuses are paid to other executives and any other amounts owing to Executive
under Section 5(c). If Executive is
unable to fully and satisfactorily perform any of the essential functions of his
position by reason of disability, with or without reasonable accommodation as
may be required under law, for a period of at least ninety consecutive calendar
days, this Agreement and Executive’s employment hereunder may be terminated at
the election of the Company, effective upon sixty days’ written notice given at
any time after such consecutive ninety day period of continuous disability
elapses, provided Executive continues to be suffering from such disability at
the time notice of such termination is given by the Company. In the event of termination under the
previous sentence, the parties shall be relieved from their respective duties
and obligations to one another from and after the date such termination takes
effect. Executive shall receive any
accrued but unpaid portion of Executive’s Salary and the bonus, if any, he
would have received in respect of the portion of the fiscal year prior to his
termination, payable at the same time as bonuses are paid to other executives
and any other amounts owing to Executive under Section 5(c). Should Executive’s disability, if any, be of
an intermittent nature, the disability shall nonetheless be considered to be
continuing during any period of time that the disability abates for seven or
less consecutive calendar days, but any such intermittent periods during which
the disability has abated for seven or less consecutive calendar days shall not
be counted for purposes of determining the consecutive ninety day period of “continuous”
disability following which the Company may elect to give notice of termination.
4
For purposes of this
subparagraph (e), “disability” shall mean that Executive is unable, by
reason of physical or mental sickness or illness, injury, or incapacity, to
perform any of the essential functions of his regular employment by the Company. Executive shall be considered to be suffering
from a disability if he is determined to be disabled by any disability insurer
insuring Executive on the date the condition of disability commenced. In the event there is no disability
determination made by a relevant insurer, Executive shall be considered to be
suffering from a disability if, in the opinion of a qualified physician
selected by mutual agreement of Executive and the Company, Executive is
determined to be unable to perform any of the essential functions of his
regular employment by the Company by reason of any physical or mental sickness,
injury, or incapacity. In the event Executive
and the Company cannot agree upon the selection of a qualified physician, each
party shall appoint a qualified physician of his or its choice and the two
physicians so appointed shall mutually select a qualified physician to render
the subject opinion as to whether or not Executive is suffering from a
disability as defined above. A “qualified
physician” shall mean a person who is licensed to practice medicine and
prescribe and administer prescription drugs and/or to perform surgery in the
state of Executive’s residence at the time of the commencement of the believed
disability (or is so licensed in such other state as the parties shall
reasonably agree is a convenient place in which to examine Executive and/or
review his medical records) and who is acting within the scope of his/her
medical license and qualified by his/her licensure, certification, training or
experience to render the subject opinion.
(f) In the event of any termination of this
Agreement in connection with which Executive is entitled by law or is allowed
by the Company to continue his coverage under the Company’s health, dental, eye
and other medical insurance policies, Executive shall be responsible for paying
the cost of all insurance premiums and charges necessary to keep such coverage
in force during any period of time that such coverage is so continued following
termination.
6. Proprietary Information and Non-Competition
Agreements. Executive
shall be bound by the terms of the Company’s standard form of the Key Employee
Proprietary Information and Inventions Agreement, attached hereto as Exhibit A,
and the Non-Competition and Non-Solicitation Agreement, attached hereto as Exhibit B,
from and after the date hereof.
7. 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 thereof. 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.
5
(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, Executive understands and agrees that the Company could
not be reasonably or adequately compensated in damages in an action at law for
Executive’s breach of his obligations hereunder. Accordingly, Executive
specifically agrees that the Company 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 of 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 of the provisions
of this Agreement or to require any performance by Executive 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) Binding Effect. This Agreement shall be binding upon the
parties, their successors, executors and heirs.
(f) Assignability. This Agreement shall be freely assignable by
the Company and shall inure to the benefit of its successors and assigns.
(g) Entire Agreement. This Agreement, including the Key
Employee Proprietary Information and Inventions Agreement and the Non
Competition Agreement referred to herein, and which are incorporated herein and
made a part hereof by reference, embody the entire agreement and understanding
of the parties hereto and supersede all prior agreements or understanding
(whether written or oral) with respect to the subject matter hereof.
(h) 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 Colorado (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 consent
to the jurisdiction of such court in any such action or proceeding and waives
any objection to venue laid therein.
(i) Amendments.
This agreement may not be amended, altered or modified other than by
a written agreement between the parties hereto.
(j) 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 the parties indicated as the signatories hereto.
6
(k) Notices.
All notices, requests, demands and other communications under the
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.
If to Executive:
Richard A. Santa
[Home Address]
If to the Company:
Dynamic Materials Corporation
Attention: Chief Executive Officer
5405 Spine Road
Boulder, CO 80301
Facsimile: (303) 604-1897
(l) Interpretation. Each party has had the opportunity and
has reviewed and revised this Agreement (and has had an opportunity to consult
with counsel if desired) 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.
(m) Attorney’s 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 attorney’s fees.
[Signature Page Follows]
7
Acknowledgment
Each
party’s signature below acknowledges that the party has read this document
fully, that the party fully understands and agrees to its contents and effect,
that the party understands that it is a legally binding document, that the
party is mentally and physically competent and capable of reading,
understanding and signing this Agreement, and that the party has signed this
document voluntarily and of its own free will, and not as a result of any
pressure or coercion. Each party’s
signature below further acknowledges that the party has had the opportunity to
consult with an attorney about the meaning and effect of the terms of this
Agreement and that each party has in fact consulted with an attorney of the party’s
own choosing about this Agreement.
This Agreement is executed as of
the date first set above:
|
|
DYNAMIC MATERIALS
CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Yvon Cariou
|
|
|
|
|
|
|
Yvon Cariou
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
EXECUTIVE
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Richard A. Santa
|
|
|
|
Richard A. Santa
|
|
|
|
|
|
|
|
|
|
[Signature
Page to Santa Employment Agreement]