mis_8k1130ex108.htm


    Exhibit
      10.8

    

 

    Magnetech
      DeWees Employment Agreement

    


    This
      Employment Agreement (the “Agreement”) is made and entered into this 30th day of
      November, 2007, by and between Magnetech Industrial Services, Inc., an Indiana
      corporation (“Magnetech” or “Company”) and Bernard L. DeWees (“DeWees” or
“Employee”).

     

    


    Recitals:

     

    A.           Since
      March 1, 2002, 3-D Service, Ltd. (“3-D”) has been engaged in the business of
      selling, repairing, remanufacturing and maintaining industrial electrical and
      mechanical equipment from its locations at 800 Nave Road SE in Massillon, Ohio,
      and at 870 Crescentville Road in Cincinnati, Ohio (“the Business”).

     

    B.           DeWees
      has been the President of 3-D since its inception.  Through BDeWees,
      Inc., an Ohio corporation which he wholly owns, DeWees has also owned fifty
      percent (50%) of 3-D since its inception.

     

    C.           DeWees
      is intimately familiar with the Business, including its operations, employees,
      suppliers and customers.

     

    D.           Pursuant
      to the 3-D Membership Interest Purchase Agreement (the “Membership Interest
      Purchase Agreement”), executed November 30, 2007, Magnetech has purchased all of
      the Membership Interest Units of 3-D.

     

    E.           Magnetech
      now desires to employ DeWees under the terms and conditions set forth in this
      Agreement, and Employee desires to be so employed.

     

    F.           3-D
      has entered into a new lease for the facilities in Massillon, Ohio in accordance
      with Article 6.01(d) of the Membership Interest Purchase Agreement
      (“Lease”).

     

    G.           Magnetech
      has delivered its Promissory Note to BDeWees, Inc. in the amount of
      $2,000,000.00 in accordance with Section 3.04 of the Membership Interest
      Purchase Agreement (“Note”)

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual covenants
      and agreements contained herein, the parties agree as follows:

    


    1.           Employment.  Company
      hereby agrees to employ Employee, and Employee hereby agrees to accept
      employment with Company, as President.  Employee shall perform all
      reasonable duties related to his position and such other duties as may be
      reasonably requested by Company, in accordance with Company policies and
      procedures as are now, or may hereafter be, in effect.  Employee will
      act diligently, in good faith and in the best interests of Company and in a
      manner designed to enhance the business reputation and success of
      Company.  Except with the prior written consent of Company, Employee
      will not engage in any other employment or activity that conflicts with or
      impairs the performance of his obligations as a full-time employee of
      Company.

     

    
      
        
        

      

      
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        2.           Term.  Subject
      to earlier termination pursuant to the provisions of this Agreement, this
      Agreement shall commence as of the date set forth above and shall continue
      in
      effect for three  (3) years (the “Initial
      Term”).  Thereafter, this Agreement shall be automatically renewed for
      additional one (1) year periods, unless or until terminated pursuant to Section
      6 hereof.  Employment after the Initial Term shall be “at will,”
subject to the provisions contained herein.

    


    3.           Compensation.

    


    (a)           Base
      Salary.  As compensation for services performed hereunder,
      Company shall pay Employee an annual salary of One Hundred and Fifty Thousand
      Dollars ($150,000) (“Base Salary”) through December 31, 2008, payable in
      accordance with the normal payroll practices of Company (currently, office
      staff
      payroll is paid every two (2) weeks).  If eighty percent (80%) of the
      incentive goals set for Employee are met in 2008, then the Base Salary for
      2009
      will be increased to One Hundred and Sixty-Five Thousand
      Dollars  ($165,000).  If 80% of the incentive goals are
      achieved in 2009, then the Base Salary will be increased again by ten percent
      (10%) for 2010. Employee will only be paid for those periods of time that
      Employee is employed by and rendering services to Company.

    


      (b)           Bonus.   As
      long as employed with the Company, Employee will participate in an incentive
      program that will allow for an annual incentive bonus (based on a calendar
      year
      or part of calendar year for partial years of employment) of up to 35% of Base
      Salary (the “Bonus”), with payments to be made quarterly within sixty (60) days
      of the end of each quarter, based on performance goals or criteria to be
      determined by Company and discussed with Employee.  A total of 40% of
      the Bonus will be tied to quarterly goals (divided between the four annual
      quarters) and the remainder tied to annual goals which will be reviewed within
      90 days of the end of the fiscal year.

    


    (c)           Automobile
      Allowance.  Company will provide Employee with an automobile
      allowance of eight hundred dollars ($800) per month through December 31, 2008,
      and thereafter nine hundred dollars ($900) per month through the term of this
      Employment Agreement.  Company will also provide Employee with a
      company fuel card.

    


    (c)       Equity.  Prior
      to the execution of this Agreement, the Compensation Committee of MISCOR Group,
      Ltd. will have granted to Employee, effective upon execution of this
      Agreement:

    


    i.           an
      option to purchase One Hundred Thousand (100,000) shares of MISCOR stock, priced
      at the market price for MISCOR stock as of the day prior to the execution of
      this Agreement, subject to the terms of the 2005 MISCOR Stock Option Plan,
      which
      option shall be granted as a qualified Incentive Stock Option (“ISO”) within the
      meaning of §422 of the Internal Revenue Code of 1986, as amended;
      and

     

    
 

    
      
        
        

      

      
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        ii.           a
      30-day option to purchase Fifty Thousand (50,000) Shares of restricted stock
      at
      the price of $.001 per share subject to the terms of the 2005 MISCOR Restricted
      Stock Purchase Plan.

    


    (b)           Withholding.  Company
      shall deduct and withhold all necessary social security and withholding taxes
      and any other similar sums required by law (“Withholding Taxes”) from Employee’s
      Base Salary and Bonus, if any.

    


    4.           Business
      Expenses and Fringe Benefits.

    


    (a)           Business
      Expenses.  Company shall reimburse Employee for reasonable and
      necessary expenses incurred on behalf of Company by Employee in connection
      with
      the performance of his duties hereunder in accordance with the reimbursement
      policies adopted by Company.

    


    (b)           GeneralFringe
      Benefits.  Employee shall be entitled to those fringe benefits as
      set forth in Exhibit A attached hereto.  Company reserves the right to
      change or cancel any of its fringe benefit programs, including but not limited
      to those listed below, at any time in its sole discretion.

    


    5.           Restrictive
      Covenants.

    


    (a)           Confidentiality. DeWees
      agrees that he will
      not, as long as he is employed by Company and for the Prohibited Period (as
      defined below), without the express written consent of Company, unless there
      has
      been a default by the Company under the Lease or the Note that has not been
      cured in the period of time allowed for cure in the Lease and he has terminated
      his employment with Company, directly or indirectly retain, use, divulge or
      disclose or communicate, or cause or permit any other person or entity to
      retain, use, divulge, disclose or communicate, to any person, firm, corporation
      or entity, in any manner whatsoever, the following information regarding 3-D
      (collectively “3-D Business Information”) except as required by a judge-signed
      court order or as such information is already generally known to the
      public:

     

    
      	
               

            	
              (1)

            	
              Product
                and service pricing;

            


    

    
      	
               

            	
              (2)

            	
              Customer
                identities and specific customer needs or business
                terms;

            


    

    
      	
               

            	
              (3)

            	
              Vendor
                identity and vendor pricing;

            


    

    
      	
               

            	
              (4)

            	
              Contact
                information for customer and vendor representatives;
                and/or

            


    

    
      	
               

            	
              (5)

            	
              Any
                plans by 3-D to expand or improve the Business that were the subject
                of
                discussion, drafting, or correspondence within one (1) year prior
                to the
                Closing Date.

            


    

     

    DeWees
      further acknowledges and agrees that he will be employed with Company in a
      position of trust and confidence and that, to provide high quality products
      and
      services to Company’s customers, which will benefit both Company and Employee
      economically, Employee will necessarily need to know and manage valuable
      information regarding

     

    
      
        
        

      

      
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    Magnetech’s
      business including but not limited to methods, techniques, equipment, marketing
      and sales information, the sources, costs and pricing of Magnetech’s products
      and services, business and marketing strategies and plans, the identity and
      needs of Magnetech’s customers and potential customers, financial data,
      personnel data, and all the other know-how and “trade secrets” pertaining in any
      respect to the Magnetech’s business, customers, or suppliers (collectively
“Magnetech Business Information”).  DeWees agrees that, as long as he
      is employed by the Company and during the Prohibited Period, he shall not,
      either directly or indirectly, use, divulge, disclose or communicate, or cause
      or permit any other person or entity to use, divulge, disclose or communicate,
      to any person, firm, corporation or entity, in any manner whatsoever, any
      Magnetech Business Information, except with the prior written consent of
      Company.

    


    (b)           Covenants
      Against Competition and Solicitation.  To reduce the cost to
      Company of monitoring and enforcing the compliance of Employee with the
      confidentiality obligations contained in Section 5(a) of this Agreement, and
      to
      protect the goodwill developed by Company during Employee’s employment with
      Company, Employee agrees that he will not, unless there has been a default
      by
      the Company under the Lease or the Note which default has not been cured during
      the applicable cure period in the Lease, so long as he is employed by Company
      and for the Prohibited Period (as defined below), without the express written
      consent of Company:

    


    (i)           Directly
      or indirectly, as a proprietor, officer, employee, partner, stockholder,
      consultant, agent, owner or otherwise, work for, render assistance or services
      to or otherwise participate in any business that competes with or engages in
      business substantially similar to the business conducted by Company anywhere
      within the Prohibited Territory (as defined below);

    


    (ii)           Directly
      or indirectly, induce, hire or solicit or seek to induce, hire or solicit any
      person who was engaged with Company as an employee, agent, independent
      contractor or otherwise (at any time within one year before the date on which
      Employee’s employment with Company ends) to end his or her engagement or
      employment with Company; or

    


    (iii)           Either
      for himself or for any other person, firm, corporation or entity, solicit,
      divert or accept, or attempt to solicit, divert or accept any persons or
      entities which were customers or suppliers of Company (at any time within one
      year before the date on which Employee’s employment with Company
      ends).

    


    For
      purposes of this Agreement, the “Prohibited Territory” means anywhere within a
      one thousand (1000) mile radius of each of Company’s locations that fall within
      the scope of his management authority, unless that geographic restriction is
      deemed to be of unreasonably broad scope, and therefore unenforceable, by a
      court of competent jurisdiction, in which case the next sentence shall define
      the Prohibited Territory.  The Prohibited Territory means anywhere
      within a five-hundred (500)

     

    
      
        
        

      

      
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mile
      radius of each of Company’s locations that fall within the scope of his
      management authority, unless that geographic restriction is deemed to be of
unreasonably broad scope, and therefore
      unenforceable, by a court
      of competent jurisdiction, in which case the next sentence shall define the
      Prohibited Territory.  The Prohibited Territory means anywhere within
      a two-hundred-fifty (250) mile radius of each of Company’s locations that fall
      within the scope of his management authority, unless that geographic restriction
      is deemed to be of unreasonably broad scope, and therefore unenforceable, by
      a
      court of competent jurisdiction, in which case the next sentence shall define
      the Prohibited Territory.  The Prohibited Territory means anywhere
      within a one-hundred (100) mile radius of each of Company’s locations that fall
      within the scope of his management authority.

    


    The
      term
“Prohibited Period” shall be defined as a period of two (2) years from and after
      the date of termination of Employee’s employment with Company for any reason,
      unless that term is deemed to be unreasonable, and therefore unenforceable,
      by a
      court of competent jurisdiction, in which case the next sentence shall define
      the Prohibited Period.  The Prohibited Period means a period of one
      (1) year from and after the date of termination of Employee’s employment with
      Company for any reason.

    


    (c)           Reasonableness
      of Covenants.  The parties acknowledge and agree that the
      Prohibited Territory and the term of the restrictive covenants contained are
      reasonable and necessary for the proper protection of
      Company.  Employee further acknowledges that, in the event of the
      termination of his employment with Company, his skills and experience will
      permit him to find employment and will not prevent him from earning a
      livelihood.  In the event, however, a court determines that any of the
      terms, provisions, or covenants contained in this Section 5 are unreasonable,
      a
      court may limit the application of any such term, provision or covenant, or
      modify any such term, provision or covenant and proceed to enforce this Section
      5 as so limited or modified.

    


    (d)           Remedies
      for Breach.   Employee acknowledges and agrees that any
      violation of the foregoing restrictive covenants would cause Company irreparable
      damage and that if Employee violates or threatens to violate such restrictions,
      Company shall be entitled to injunctive relief against him, without the
      necessity of proof of actual damage, in addition to any other remedies available
      under this Agreement, at law, or in equity, including compensatory damages
      incurred by Company as a result of such violation and including costs, expenses
      and reasonable attorneys’ fees in enforcing any of its rights under
      this  Section 5.

    


    6.           Termination.

    


    (a)           This
      Agreement, and the employment of Employee pursuant to this Agreement, shall
      terminate upon the earliest of the following dates:  (i) date of
      termination mutually agreed to between Employee and Company, (ii) date of death
      of Employee, (iii) date of “Total and Permanent Incapacity” of Employee (as
      hereinafter defined), (iv) date

     

    
      
        
        

      

      
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selected
      by Company after receiving Employee’s written resignation (such date shall not
      be more than sixty (60) days after receiving such written notice), (v) date
      specified in a written notice by Company of termination for “Just Cause” (as
      hereinafter defined), or (vi) date specified in a written notice of termination
      by Company or Employee for a reason other than for Just Cause, which notice
      must
      be provided to the other party at least thirty (30) days prior to the effective
      date of termination.

    


    (b)           For
      purposes of this Agreement, the term “Total and Permanent Incapacity” shall mean
      such physical or mental condition of Employee as is expected to be of long
      continued or indefinite duration and that renders Employee incapable of
      performing any substantial portion of the services contemplated hereby (as
      confirmed by competent medical evidence).  In connection therewith,
      Employee hereby agrees to submit to any medical examination or examinations
      as
      may be recommended by Company for the purposes of determining the existence
      or
      absence of a Total and Permanent Incapacity.

    


    (c)           For
      purposes of this Agreement, the term “Just Cause” shall mean (i) Employee’s
      gross misconduct, gross neglect of professional duties or commission of a felony
      the nature of which is likely to adversely affect Company if Employee continued
      to be employed by Company, or (ii) Employee’s material breach of or material
      failure to perform his duties in accordance with the terms and conditions of
      this Agreement, which failure or breach continues for thirty (30) or more days
      after written notice by Company of such breach.

    


    7.           Rights
      and Obligations on Termination of Employment.  Upon
      termination of this Agreement for any reason, and notwithstanding any provision
      of this Agreement to the contrary, all payment obligations of Company to
      Employee under this Agreement will cease except for accrued but unpaid salary
      amounts under Section 3 hereof.

    


    8.           Notices.  Except
      as to instructions, notices, requests, consents, approvals or other
      communications normally given in the ordinary course of business, all notices,
      requests, demands and other communications under this Agreement shall be in
      writing and shall be deemed to have been duly given on the date delivered,
      if
      delivered in person, or on the date mailed, if mailed first-class, postage
      prepaid, certified mail, return receipt requested, at the address set forth
      below (or such other address as may be given by like notice):

    


    If
      to
      Company:                      Magnetech
      Industrial Services, Inc.

    1125
      South Walnut Street

    South
      Bend, Indiana 46619

    Attn:         John
      A. Martell,

    and           James
      M. Lewis

    


    If
      to
      Employee:                      Bernard
      L. DeWees

    5316
      Hawick Street, NW

    Canton,
      Ohio 44708

     

    
      
        
        

      

      
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    with
      a
      copy to:

    


    DAY
      KETTERER LTD.

    Millennium
      Centre, Ste. 300

    200
      Market Avenue North

    Canton,
      Ohio 44702

    Attn:  Daniel
      A. Minkler

    


    9.           Entire
      Agreement.  This Agreement contains all of the terms agreed
      upon by the parties with respect to the subject matter hereof and supersedes
      all
      previous agreements, arrangements, and communications between the parties
      dealing with such subject matter, whether oral or written.

    


    10.           Amendments;
      Waiver.  This Agreement may not be amended or modified except
      by written instrument executed by Company and Employee.  The failure
      of any party at any time or from time to time to require performance of the
      other party’s obligations under this Agreement shall in no manner affect the
      right to enforce any provision of this Agreement at a subsequent time, and
      the
      waiver of any rights arising out of any breach shall not be construed as a
      waiver of any rights arising out of any subsequent breach.

    


    11.           Assignment.  This
      Agreement is a contract for personal services and shall not be assignable by
      either party without the prior written consent of the other party hereto;
provided, that Company may assign this Agreement to (i) a company that
      controls, is controlled by, or is under common control with, Company (an
“Affiliate”) and, in the event of any such assignment, Company shall be released
      from all obligations under this Agreement.  Subject to the foregoing,
      this Agreement shall inure to the benefit of and be enforceable by the parties
      hereto and their respective heirs, legal representatives, successors and
      permitted assigns.

    


    12.           Counterparts.  This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which together shall constitute one and the same
      instrument.

    


    13.           Governing
      Law; Forum.  This Agreement shall be construed, interpreted
      and enforced in accordance with the laws of the State of Indiana, without giving
      effect to principles of conflicts of laws. The parties expressly agree that
      the
      Indiana state courts located in St. Joseph County, Indiana (or if there is
      exclusive federal jurisdiction, the United States District Court for the
      Northern District of Indiana) shall have exclusive jurisdiction and venue over
      any dispute arising out of this Agreement.  To the extent not
      otherwise subject to the jurisdiction of such courts, DeWees hereby agrees
      to
      waive any objection to jurisdiction and to subject itself to the jurisdiction
      of
      such courts.

    


    14.           Titles.  The
      titles to the sections and subsections of this Agreement are inserted for
      convenient reference only, and shall not constitute a part of this
      Agreement.

     

     

    
      
        
        

      

      
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        15.           Severability.  If
      any provision of this Agreement shall be held invalid or unenforceable by any
      court of competent jurisdiction or as a result of legislative or administrative
      action, such holding or action shall be strictly construed and shall not affect
      the validity or affect any other provision of this Agreement.

    


    IN
      WITNESS WHEREOF, the parties have duly executed this Employment Agreement on
      the
      date or dates indicated below, effective as of the day and year first above
      written.

    


    

      
        	
                “Company”

              	 	
                “Employee”

              
	 	 	 	 	 
	
                MAGNETECH
                  INDUSTRIAL SERVICES, INC.

              	 	
                BERNARD
                  L. DEWEES

              
	 	 	 	 	 
	 	 	 	 	 
	
                By:

              	/s/
                John A. Martell,	 	/s/
                Bernard L. DeWees
	 	
                John
                  A. Martell, President & CEO

              	 	
                Bernard
                  L. DeWees

              
	 	 	 	 	 
	
                Date:

              	November
                30, 2007	 	
                Date:

              	November
                30, 2007


      

    

     

     

    
       

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