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): September 11, 2015 (September 4, 2015)
DGSE COMPANIES, INC.
(Exact name of Registrant as specified in
its charter)
Nevada |
1-11048 |
88-0097334 |
(State or other jurisdiction of |
(Commission |
(I.R.S. Employer |
incorporation or organization) |
File Number) |
Identification No.) |
15850 Dallas Parkway, Suite 140
Dallas, Texas 75248
(Address of principal executive offices)
(Zip Code)
Registrant’s Telephone Number, including
area code: (972) 587-4049
Not Applicable
(Former name or former address, if changed
since last report)
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
(see General Instruction A.2.):
| ¨ | 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)) |
| Item 3.01 | Notice of Delisting or Failure to Satisfy a Continued
Listing Rule or Standard; Transfer of Listing. |
On September 11, 2015,
DGSE Companies, Inc. (“DGSE”) submitted a notice to the NYSE MKT LLC (the “MKT”) stating that DGSE is not
in compliance with the MKT’s continued listing standards as set forth in the NYSE MKT Company Guide (the “Company Guide”).
Specifically, Section 802(h) of the Company Guide provides that 50% of the members on the board of directors of each listed company
that is a smaller reporting company must be independent directors as defined in Section 803A of the Company Guide. Due to the resignation
of David S. Rector from the Board of Directors of DGSE (the “Board”), as described in more detail in Item 5.02 below,
who had served as the only current independent director of the Board, DGSE currently fails to comply with the board independence
composition requirement due to the additional vacancy. DGSE intends to regain compliance with the requirement as soon as possible.
DGSE also notified
the MKT that it is currently out of compliance with Section 803B(2)(c) of the Company Guide, regarding having an audit committee
of at least two members, each of whom satisfies the independence standards. Due to the resignation by David S. Rector from the
Board, as described in more detail in Item 5.02 below, who had served as the only current member of DGSE’s audit committee,
DGSE is currently out of compliance with Section 803B(2)(c) of the Company Guide until such time as the Board of Directors elects
at least two new independent directors who are appointed to the audit committee. DGSE intends to regain compliance with the requirement
as soon as possible.
| Item 5.02. | Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(a) On September
4, 2015, the Board elected Matthew M. Peakes as a member of the Board effective immediately and to the positions of Chairman of
the Board, President and Chief Executive Officer of DGSE effective as of September 16, 2015. Mr. Peakes will replace James D. Clem,
who previously announced his resignation as Chairman of the Board, President and Chief Executive Officer effective September 15,
2015. Mr. Peakes, age 37, is currently the Director of Business Development for Elemetal, LLC, the largest shareholder of DGSE,
where he has been employed since 2012. Prior to that, Mr. Peakes was a Vice President with J.P. Morgan where he managed relationships
with high net worth investors, and helped to develop investment strategies across a wide range of platforms.
Pursuant to the offer
letter dated September 4, 2015 by and between DGSE and Mr. Peakes (the “Offer Letter”), Mr. Peakes will receive an
annual gross starting salary of $315,000, with a performance bonus of up to 25% of his annual gross salary. In connection with
his employment, Mr. Peakes will be entitled to participate in any equity compensation grants for senior management, commensurate
or exceeding what other members of senior management of DGSE receive. Mr. Peakes is also entitled to participate in any and all
benefit plans of DGSE in which he is eligible. The Board has authorized the Chief Financial Officer of DGSE to negotiate, execute
and deliver an employment agreement on behalf of DGSE reflecting the terms outlined in the Offer Letter.
The above description
of the Offer Letter is a summary and is qualified in its entirety by the Offer Letter itself, which is filed as Exhibit 10.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
Other than the Offer
Letter, there is no arrangement or understanding pursuant to which Mr. Peakes was selected as a director and officer of DGSE and
there are no family relationships between Mr. Peake and the other directors or executive officers of the Company. Since the beginning
of DGSE’s last fiscal year, Mr. Peakes has not had any transactions or currently proposed transactions in which Mr. Peakes
was or is to be a participant in amounts greater than $120,000 and in which any related person had or will have a direct or indirect
material interest. Related party transactions between DGSE and Elemetal, LLC are described in “Certain Relationships and
Related Transactions” of our Proxy Statement filed with the SEC on April 30, 2015.
(b) David S. Rector
has tendered notice of his resignation, effective as of September 4, 2015, as a member of the Board and Chairman of the Compensation
Committee to the Board and the other committees of the Board on which he served.
DGSE is currently engaged
in a search to fill the three vacant independent director seats.
A press release issued
by DGSE describing the items set forth in (a) and (b) is attached hereto as Exhibit 99.1.
(c) On September
4, 2015, DGSE entered into a Consulting, Separation and Release of Claims Agreement (the “Consulting Agreement”) with
James D. Clem, who is serving as the President, Chief Executive Officer and Chairman of the Board of Directors of DGSE until September
15, 2015 (the “Separation Date”). Effective upon the Separation Date, Mr. Clem’s prior employment agreement with
DGSE will terminate and the Consulting Agreement will be effective. Pursuant to the Consulting Agreement, Mr. Clem will receive
certain benefits, including reimbursement of premiums paid to continue coverage under DGSE’s group health plan pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) during his consulting term. In exchange for the
consideration provided in the Consulting Agreement, Mr. Clem will release DGSE Group (as defined in the Consulting Agreement) from
certain Claims (as defined in the Consulting Agreement). Additionally, from the day after the Separation Date until March 31, 2016,
unless earlier terminated, Mr. Clem will provide advisory and consulting services for DGSE or an affiliate as may be requested
from time to time by DGSE in return for consulting payments of $25,000 per month.
The above description
of the Consulting Agreement is a summary and is qualified in its entirety by the Consulting Agreement itself, which is filed as
Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change
in Fiscal Year. |
As a result of the
resignation of David S. Rector effective on September 4, 2015 and the resignation of James D. Clem effective on September 15, 2015,
as of such date there will be two acting directors and three vacancies on the Board and the remaining two directors would not constitute
a quorum under DGSE’s existing bylaws. On September 4, 2015, the Board approved and adopted an amendment to the bylaws providing
that fifty percent of the number of directors shall constitute a quorum of the Board for the transaction of business (the “Amendment”).
The Amendment will allow the Board to act in an orderly fashion until additional directors are elected to the Board. The Board
expects to amend the bylaws to reinstate the prior quorum provision once the vacancies on the Board are filled.
The above description
of the Amendment is a summary and is qualified in its entirety by the Amendment itself, which is filed as Exhibit 3.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
|
3.1 |
|
Amendment to Bylaws dated September 4, 2015 |
|
10.1 |
|
Offer Letter by and between DGSE and Matthew M. Peakes dated September 4, 2015 |
|
10.2 |
|
Consulting, Separation and Release of Claims Agreement by and between DGSE and James D. Clem dated September 4, 2015 |
|
99.1 |
|
Press Release dated September 11, 2015 |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
By: |
/s/ C. BRETT BURFORD |
|
|
C. Brett Burford |
|
|
Chief Financial Officer and Secretary |
Date: September
11, 2015
EXHIBIT INDEX
|
Exhibit |
|
|
|
Number |
|
Description |
|
|
|
|
|
3.1 |
|
Amendment to Bylaws dated September 4, 2015 |
|
10.1 |
|
Offer Letter by and between DGSE and Matthew M. Peakes dated September 4, 2015 |
|
10.2 |
|
Consulting, Separation and Release of Claims Agreement by and between DGSE and James D. Clem dated September 4, 2015 |
|
99.1 |
|
Press Release dated September 11, 2015 |
EXHIBIT 3.1
AMENDMENT TO BYLAWS
OF
DGSE COMPANIES, INC.
(f/k/a/ CANYON STATE CORPORATION)
Effective as of the
date set forth below, the Bylaws of DGSE Companies, Inc., a Nevada corporation formerly known as Canyon State Corporation (the
“Corporation”), are amended in the following respect:
1. Section 9 of
Article III of the Corporation’s Bylaws is hereby amended and restated to read in its entirety as follows:
“Section 9. Quorum.
Fifty percent (50%) of the authorized number of directors
shall constitute a quorum of the board for the transaction of business. Every act or decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is present is the act of the board of directors, subject to the provisions
of the General Corporation Law. A meeting at which a quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, provided that any action taken is approved by at least a majority of the required quorum for such
meeting.”
[Signature Page Follows]
The undersigned Secretary
of the Corporation hereby certifies that the foregoing amendment to the Corporation’s Bylaws were duly adopted by the Board
of Directors of the Corporation on September 4, 2015, effective as of such date.
|
DGSE COMPANIES, INC. |
|
|
|
|
By: |
/s/ C. BRETT BURFORD |
|
|
|
|
|
C. Brett Burford, Secretary |
Exhibit
10.1
September 4, 2015
Matt:
On behalf of the
Board of Directors of DGSE Companies, Inc. (the “Board”), I am pleased to offer you the positions of Chief Executive
Officer, President and Chairman of the Board at DGSE Companies, Inc. This position will report directly to the Board of Directors.
The Board would
like to extend to you the following compensation and benefits, beginning on your starting date:
| · | Salary:
Annual gross starting salary of $315,000, paid in biweekly installments by your choice
of check or direct deposit |
| · | Performance
Bonus: Up to twenty-five percent (25%) of your annual gross salary based on achievement
of goals, annually agreed upon by the Board. |
| · | Equity:
Participation in any equity compensation grants for senior management, commensurate
or exceeding what other members of senior management receive |
| · | Benefits:
You will be entitled to participate in all DGSE benefit plans for which you are eligible.
While the plans offered may change from time to time during your employment we currently
offer the following: |
Vacation:
20 days per year
401(k):
Available the 90 days following employment date
Health
Insurance: Blue Cross Blue Shield
Dental
Insurance: Met Life
Life
and Disability Insurance: MetLife
Short
and Long Term Disability
Sick
leave
Additional statements
of understanding:
| · | This
offer is pending approval by the Board, which is expected to occur on September 4, 2015 |
| · | Your
starting date will be September 16th, 2015. |
| · | Eligibility
for DGSE Medical and Dental benefits begins the first month after 60 days of employment,
which in this case will be December 2015. DGSE will reimburse you for any expense that
you incur in the interim should you elect to continue coverage under your current employer’s
group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”). |
| · | It
is expected that the Board will empower me to negotiate an employment agreement with
you, which will be consistent with the offer letter, but more fully cover all compensation,
benefits, responsibilities and obligations of your role. Once agreed upon, any employment
agreement will need to be approved by the Board, as it is constituted at that time. To
the extent that the Board does not have a Compensation Committee at the time the agreement
is approved, any such agreement will need to be ratified by the Compensation Committee,
once such committee is reconstituted |
Accepting this offer of employment,
you certify your understanding that your employment will be on an at-will basis, and that neither you, the Board, any shareholders,
nor any third party has entered into any other contract regarding the terms or duration of your employment. As an at-will employee,
either you or DGSE will be free to terminate your employment with the company at any time, with or without cause or advance notice.
We look forward to your arrival at DGSE and are confident that you will play a critical role in our company’s future.
If you have any questions, please
feel free to contact me at XXX-XXX-XXXX.
Sincerely,
/s/ BRETT BURFORD
Brett Burford
Chief Financial
Officer, Director
Accept Job Offer
By signing and dating
this letter below, I, Matthew Peakes, accept this job offer of Chief Executive Officer, President and Chairman of the Board, by
DGSE Companies, Inc.
Signature: |
/s/ MATTHEW PEAKES |
|
Date: |
September 4,
2015 |
Decline Job Offer
By signing and dating
this letter below, I, Matthew Peakes, decline this job offer of Chief Executive Officer, President and Chairman of the Board,
by DGSE Companies, Inc.
Exhibit 10.2
CONSULTING, SEPARATION AND RELEASE OF
CLAIMS AGREEMENT
This Consulting, Separation
and Release of Claims Agreement (“Agreement”) is entered into by and between DGSE Companies, Inc., a Nevada
corporation (“DGSE”), on behalf of itself, its subsidiaries and other corporate affiliates and each of their
respective employees, officers, directors, owners, shareholders and agents (collectively referred to herein as, the “DGSE
Group”), and James D. Clem (“Clem”) (DGSE and Clem are collectively referred to herein as the “Parties”)
as of September 4, 2015 (the “Execution Date”).
Recitals
WHEREAS, Clem
previously served as DGSE’s President, Chief Executive Officer and as a member of and Chairman of the Board of Directors
of DGSE; and
WHEREAS, Clem,
as an executive employee, and DGSE, as employer, entered into an Employment Agreement, dated to be effective January 1, 2012, as
amended by that First Amendment to Employment Agreement, dated to be effective as of September 1, 2012 (collectively referred to
as the “Employment Agreement”), which, as of the date of this Agreement, remains in full force and effect between
the Parties; and
WHEREAS, the
Employment Agreement (inclusive of the Employment Agreement, dated to be effective January 1, 2012, and that First Amendment to
Employment Agreement, dated to be effective as of September 1, 2012) is attached hereto as Exhibit B and is incorporated
herein as if set out in full for all purposes; and
WHEREAS, Clem
has tendered his resignation as DGSE’s President and Chief Executive Officer and as a member of and Chairman of the Board
of Directors of DGSE other than for “Good Reason,” as that term is defined in Section 7.3 of the Employment
Agreement, and DGSE has accepted such resignation; and
WHEREAS, Clem’s
last day of employment with DGSE is September 15, 2015 (the “Separation Date”) at which time the Employment
Agreement shall terminate except as expressly provided in this Agreement; and
WHEREAS, after
the Separation Date, Clem will not represent himself as being an employee, officer, attorney, agent or representative of DGSE for
any purpose; however, Clem may represent himself to be a consultant of the Board of Directors of DGSE during the term of his consulting
arrangement described herein; and
WHEREAS, the
Separation Date will be the employment termination date for Clem for all purposes, meaning Clem will no longer be entitled to any
further compensation, monies or other benefits from DGSE, including coverage under any benefits plans or programs sponsored by
DGSE, except as otherwise provided herein.
Agreement
NOW, THEREFORE,
in consideration of the Recitals and the mutual promises, covenants and agreements set forth herein, the Parties covenant and agree
as follows:
1. Return
of Property. By no later than the expiration of the Term (as defined in Paragraph 6) or, if earlier, upon request by
DGSE, Clem must return all DGSE property, including identification cards or badges, access codes or devices, keys, telephones,
mobile phones, hand-held electronic devices, computers, credit cards, electronically stored documents or files, physical files,
existing and prospective customer information, Confidential Information (as defined in Paragraph 5(a) of this Agreement,
which incorporates Section 1.5 of the Employment Agreement), inventory and any other company property in Clem’s possession.
The Parties agree that Clem’s obligations in Section 6.3 (Return of Confidential Information) of the Employment Agreement
is eliminated but fully replaced by Paragraph 1 and Paragraph 5 of this Agreement.
2. Clem
Representations. In exchange for the consideration described in Paragraph 3 and the other promises and undertakings
of DGSE set out in this Agreement, which Clem acknowledges to be good and valuable consideration for his obligations hereunder,
but subject to the terms and provisions of this Agreement including the last sentence of Paragraph 4(a) hereof, Clem hereby
represents that he intends to irrevocably and unconditionally fully and forever release and discharge any and all claims he may
have, have ever had or may in the future have, against DGSE arising out of, or in any way related to his hire, benefits, employment
or separation from employment with DGSE as further explained and in accordance with Paragraph 4. Clem specifically represents,
warrants and confirms that, other than claims related to DGSE’s fulfillment of its obligations under this Agreement as well
as claims specifically reserved by Clem hereunder, (a) he has no claims, complaints or actions of any kind filed against DGSE Group
with any court of law, or local, state or federal government or agency; and (b) he has not engaged in, and is not aware of, any
unlawful conduct in relation to the business of DGSE. However, this general representation excludes, and Clem does not waive, release
or discharge (1) any obligation of DGSE with respect to assignment of the Employment Agreement as set forth in Section 8.2 of the
Employment Agreement (which Section 8.2 is incorporated herein by reference), (2) any right of Clem to be indemnified pursuant
to DGSE’s bylaws or articles of incorporation as they exist as of the Effective Date of this Agreement or as DGSE’s
bylaws or articles of incorporation may be amended, provided any such amendment does not reduce or diminish the indemnification
rights applicable to Clem, (3) any obligation by DGSE to provide indemnification set forth in Section 10 the Employment Agreement
(which Section 10 is incorporated herein by reference), or (4) any rights under this Agreement.
3. Separation
Benefit. In consideration for Clem’s execution, non-revocation of, and compliance with this Agreement, including the
waiver and release of claims in Paragraph 4, DGSE agrees and covenants (i) to reimburse Clem for legal fees and
expenses incurred by him in connection with his attorney’s review of this Agreement, including for review of the Employment
Agreement and consultation and proposed revisions for this Agreement, (up to a maximum of $3,500) upon documentation consistent
with DGSE’s reimbursement policy as such policy existed as of the Effective Date of this Agreement or as amended, provided
any such amendment shall not reduce or diminish the reimbursement rights applicable to Clem; and (ii) that if Clem timely
elects to continue coverage under DGSE’s group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”), DGSE will reimburse to Clem the premium amounts paid for continued coverage under the health
plan in excess of the active employee rate until the earlier of (i) the date that Clem becomes eligible for coverage under
another group health plan or otherwise is not eligible for continued coverage and (ii) the expiration of the Term. DGSE agrees
to and will pay the COBRA reimbursement amounts to Clem on a monthly basis, with such payments to be made by direct deposit to
an account designated by Clem or by check mailed to Clem at his last address on file with DGSE. The first such reimbursement payment
shall be made in the first month in which Clem has paid such premiums that is after the Effective Date (as defined in Paragraph
4(b)(iv)), and in no event shall any reimbursements be paid following 60 days after the expiration of the Term. Additionally,
DGSE shall (i) continue to provide Clem with indemnification and rights thereto as set forth in Section 10 of the Employment
Agreement (which Section 10 is incorporated herein by reference), DGSE agrees not to take any action that would or is intended
to impair any Directors and Officers Liability Insurance coverage DGSE had in place for the benefit of DGSE’s executive level
employees, including Clem, during his period of employment for DGSE, and DGSE agrees that, to the extent necessary to ensure Clem’s
indemnification rights are fully protected, Clem shall be considered (for purposes of indemnification only, and not for general
agency purposes) through the Separation Date to have been an “agent” of DGSE as the term “agent” is defined
or used in DGSE’s bylaws in regard to DGSE’s power to indemnify Clem hereunder, (ii) continue to be bound by any obligation
of DGSE with respect to assignment of the Employment Agreement set forth in Section 8.2 of the Employment Agreement (which Section
8.2 is incorporated herein by reference), and (iii) timely reimburse all DGSE charges incurred on DGSE AmEx accounts in Clem’s
name in accordance with DGSE’s reimbursement policy as such policy existed as of the Effective Date of this Agreement or
as amended, provided any such amendment shall not reduce or diminish the reimbursement rights applicable to Clem, and following
the end of the Term, DGSE shall cancel and remove Clem from such accounts. Clem understands, acknowledges and agrees that these
benefits (and the other promises and undertakings of DGSE set out in this Agreement) exceed what he is otherwise entitled to receive
upon separation from employment under the circumstances described herein, and that these benefits are in exchange for executing
this Agreement. Clem further acknowledges no entitlement to any additional payment or consideration not specifically referenced
in this Agreement. DGSE understands and agrees that the existence or application of any Directors and Officers Liability Insurance
coverage shall not be a condition for DGSE’s obligation to indemnify Clem as provided in this Agreement.
4. Clem
Release.
(a) Clem
Release. In exchange for the consideration provided in this Agreement but subject to the terms and provisions of this Agreement,
Clem, on behalf of himself and his heirs, executors, representatives, agents, insurers, administrators, successors and assigns
(Clem and such other parties are hereinafter collectively referred to as the “Clem Releasors”), irrevocably
and unconditionally fully and forever waive, release and discharge DGSE Group from any and all claims, demands, actions, causes
of actions, obligations, judgments, rights, fees, damages, obligations, liabilities and expenses (inclusive of attorneys’
fees) of any kind whatsoever, whether known or unknown (collectively “Claims”), including, without limitation,
any Claims under any federal, state, local or foreign law, that Clem Releasors may have, have ever had or may in the future have
arising out of, or in any way related to (i) Clem’s hire, benefits, employment, termination or separation from employment
with DGSE, and (ii) any actual or alleged act, omission, transaction, practice, conduct, occurrence or other matter that existed
or arose on or before the date of Clem’s execution of this Agreement, including, but not limited to, (A) any Claims under
Title VII of the Civil Rights Act, as amended, the Americans with Disabilities Act, as amended, the Equal Pay Act, as amended,
the Employee Retirement Income Security Act, as amended (with respect to unvested benefits), the Civil Rights Act of 1991, as amended,
Section 1981 of U.S.C. Title 42, the Sarbanes-Oxley Act of 2002, as amended, the Worker Adjustment and Retraining Notification
Act, as amended, the Age Discrimination in Employment Act, as amended, and/or any other federal, state or local law (statutory,
regulatory or otherwise), and (B) any tort and/or contract Claims, including, but not limited to, any Claims of wrongful discharge,
defamation, emotional distress, tortious interference with contract, invasion of privacy, nonphysical injury, personal injury or
sickness or any other harm. However, this general release excludes, and Clem does not waive, release or discharge, any (1) right
to file an administrative charge or complaint with the Equal Employment Opportunity Commission or other administrative agency,
(2) Claims that cannot be waived at law, such as any workers’ compensation or unemployment compensation claim, (3) right
of Clem to be indemnified pursuant to DGSE’s bylaws or articles of incorporation, (4) obligation of DGSE with respect to
assignment of the Employment Agreement set forth in Section 8.2 of the Employment Agreement (which Section 8.2 is incorporated
herein by reference), (5) obligation by DGSE to provide indemnification set forth in Section 10 the Employment Agreement (which
Section 10 is incorporated herein by reference), or (4) any rights under this Agreement.
(b) Specific
Release of ADEA Claims. In further consideration of the payments and benefits provided to Clem by this Agreement, Clem, on
behalf of himself and Clem Releasors, hereby unconditionally releases and forever discharges DGSE Group from any and all Claims
that Clem Releasors may have as of the date Clem signs this Agreement arising under the Age Discrimination in Employment Act (“ADEA”),
as amended. By signing this Agreement, Clem hereby acknowledges and confirms that:
(i) Clem
is hereby advised by DGSE to consult with an attorney of his choice before signing this Agreement to have the attorney explain
the terms and effect of signing this Agreement, including Clem’s release of claims under the ADEA;
(ii) Clem
has been given sufficient time, and up to 21 days, at his option, to consider the terms of the Agreement and consult with an attorney
of his choice;
(iii) Clem
is executing this Agreement in exchange for consideration in addition to that which Clem is already entitled;
(iv) this
Agreement will become effective and enforceable on the eighth day after Clem signs and returns it to DGSE (“Effective
Date”) unless before that time Clem revokes his acceptance of this Agreement by so notifying DGSE in writing, but if
he does so this Agreement will not become effective and enforceable and Clem will have to repay any of the consideration hereunder
that already was paid to him;
(v) Clem
understands that the release contained in this paragraph does not apply to rights and claims under the Age Discrimination in Employment
Act that may arise after the date on which Clem signs this Agreement; and
(vi) Clem
knowingly and voluntarily accepts the terms of this Agreement.
(c) Employment
Agreement. Notwithstanding the foregoing, Clem does not release DGSE or any member of the DGSE Group with respect to any ongoing
or future obligations relating to assignment of the Employment Agreement and/or Clem’s rights to receive and DGSE’s
obligations to provide indemnification as set forth in and pursuant to Sections 8.2 and 10 of the Employment Agreement and this
Agreement.
(d) DGSE
Release. In exchange for the consideration provided in this Agreement but subject to the terms and provisions of this Agreement,
DGSE, on behalf of itself and DGSE Group (DGSE and DGSE Group are hereinafter collectively referred to as the “DGSE Releasors”),
irrevocably and unconditionally fully and forever waive, release and discharge Clem Releasors from any and all Claims of any kind
whatsoever, whether known or unknown, including, without limitation, any Claims under any federal, state, local or foreign law,
that DGSE Releasors may have, have ever had or may in the future have arising out of, or in any way related to all acts taken by
Clem that (i) were taken in compliance with his duty of care to DGSE, his duty of loyalty to DGSE and his duty of good faith to
DGSE, and (ii) were protected by the business judgment rule. However, for the avoidance of doubt, the release of claims in this
Paragraph 4(d) excludes, and DGSE does not waive, release or discharge, (A) any rights and claims that may arise after the
date on which DGSE signs this Agreement, (B) any rights under this Agreement, or (C) any claims arising from Clem’s gross
negligence, fraud or illegal acts. As of the Effective Date, DGSE affirms that it has no knowledge of any act by Clem that (i)
was taken not in compliance with his duty of care to DGSE, his duty of loyalty to DGSE or his duty of good faith to DGSE, or (ii)
were not protected by the business judgment rule; and DGSE has no knowledge of any claims arising from or alleged to arise from
any alleged gross negligence, fraud or illegal act of Clem.
5. Post-termination
Obligations.
(a) Confidential
Information. Clem acknowledges and agrees that during the course of employment by DGSE, he has had access to and learned about
Confidential Information (as defined by Section 1.5 of the Employment Agreement, which definition is incorporated herein by this
reference), including confidential, secret and proprietary documents, materials and other information, in tangible and intangible
form, of and relating to DGSE Group and its businesses and existing and prospective customers, suppliers, investors and other associated
third parties (herein referred to as “Confidential Information”) and will continue to have access to and knowledge
of Confidential Information pursuant to his performance of the Services (as defined in Paragraph 6). Clem further understands
and acknowledges that this Confidential Information and DGSE’s ability to reserve it for the exclusive knowledge and use
of DGSE Group is of great competitive importance and commercial value to DGSE, and that improper use or disclosure of the Confidential
Information by Clem would irreparably harm DGSE’s competitive position in the marketplace and dilute its goodwill, and might
cause DGSE to incur financial costs, loss of business advantage, liability under confidentiality agreements with third parties,
civil damages and criminal penalties.
Clem understands and
agrees that Confidential Information developed by him in the course of his employment by DGSE and pursuant to his performance of
the Services shall be subject to the terms and conditions of this Agreement as if DGSE furnished the same Confidential Information
to Clem in the first instance.
Without limiting the
generality of the foregoing, Clem understands and agrees that he may not engage in the trading or “tipping” with respect
to securities of DGSE on the basis of any Confidential Material or other material nonpublic information in his possession until
such time as the Confidential Material or other nonpublic information has been publicly disclosed by DGSE.
(b) Disclosure
and Use Restrictions. Clem agrees and covenants: (i) to treat all Confidential Information as strictly confidential; (ii) not
to directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed,
published, communicated or made available, in whole or part, to any entity or person whatsoever (including other employees of DGSE
Group) not having a need to know and authority to know and use the Confidential Information in connection with the business of
DGSE Group and, in any event, not to anyone outside of the direct employ of DGSE Group except as required in the performance of
any of Clem’s remaining authorized employment or consulting duties to DGSE or with the prior consent of an authorized officer
acting on behalf of DGSE Group in each instance (and then, such disclosure shall be made only within the limits and to the extent
of such duties or consent); and (iii) not to access or use any Confidential Information, and not to copy any documents, records,
files, media or other resources containing any Confidential Information, or remove any such documents, records, files, media or
other resources from the premises or control of DGSE Group, except as required in the performance of any of Clem’s remaining
authorized employment duties or consulting duties to DGSE or with the prior consent of an authorized officer acting on behalf of
DGSE Group in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or
consent). Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable
law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided
that the disclosure does not exceed the extent of disclosure required by such law, regulation or order. Clem shall promptly provide
written notice of any such order to an authorized officer of DGSE Group.
(c) Duration
of Confidentiality Obligations. Clem understands and acknowledges that his obligations under this Agreement with regard to
any particular Confidential Information shall commence immediately and shall continue during and after his employment by DGSE and
the Term until such time as such Confidential Information has become public knowledge other than as a result of Clem’s breach
of this Agreement or breach by those acting in concert with Clem or on Clem’s behalf.
(d) Non-Competition
and Non-Solicitation. In consideration of DGSE’s promises and undertakings set out in this Agreement, and in light of
Clem’s acknowledgement and agreements in Paragraph 5(a) and (b) and his continuing access to Confidential Information
pursuant to his performance of the Services, the Parties mutually agree that Clem’s post-employment obligations under Section
9 of the Employment Agreement are hereby deleted and replaced with the following:
(i) For
a period (the “Restricted Period”) commencing on the Execution Date and continuing until the earlier of one
(1) year after the end of the Term or any default by DGSE hereunder Clem shall not, directly or indirectly, (i) engage in or assist
others in engaging in activities that could reasonably be considered to be directly competitive with DGSE Group (the “Restricted
Business”) in the states in which DGSE Group operates retail locations (the “Territory”); (ii) except
as provided in the last sentence of this subparagraph, have an interest in any entity that engages directly or indirectly in the
Restricted Business in the Territory in any capacity, including as a partner, shareholder, member, employee, principal, agent,
trustee or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed
prior to or after the date of this Agreement) between DGSE Group and existing or prospective customers or suppliers of DGSE Group,
it being acknowledged and agreed that by virtue of his employment with DGSE, Clem has had business contact with and/or access to
customer information concerning all existing and prospective customers of DGSE Group, and business contact with and/or access to
Confidential Information concerning all suppliers of DGSE Group. Notwithstanding the foregoing, Clem is expressly permitted to
(i) own, directly or indirectly, solely as an investment, securities of any entity traded on any national securities exchange if
Clem is not a controlling person of, or a member of a group which controls, such entity and does not, directly or indirectly, own
5% or more of any class of securities of such entity; and (ii) serve as an officer, director, trustee, or otherwise participate
in educational, welfare, social, charitable, religious, and civic organizations.
(ii) During
the Restricted Period, Clem shall not disrupt or interfere with the business of DGSE Group by directly or indirectly soliciting,
hiring, recruiting, attempting to hire or recruit or raiding persons who are or were employed by or otherwise providing services
to DGSE Group as of the expiration of the Term or as of the Separation Date or otherwise inducing the termination of employment
or relationship of any such employee or service provider with DGSE Group, it being acknowledge and agreed that by virtue of his
employment with DGSE, Clem has had business contact with and/or access to Confidential Information concerning all such employees
and service providers of DGSE Group.
(e) Acknowledgements.
Clem acknowledges and agrees that the restrictions in Paragraph 5(d) are ancillary to an otherwise enforceable agreement,
including without limitation the Employment Agreement and the Parties’ promises and undertakings set out in this Agreement;
that his promises and undertakings set out, and the matters recited, in Paragraph 5(a) and (b) and Paragraph 6 and Clem’s
position and responsibilities during his employment give rise to DGSE’s interest in restricting his post-employment activities;
that the restrictions are reasonable and necessary, to Clem’s knowledge are valid and enforceable under applicable law, and
do not impose a greater restraint than necessary to protect DGSE’s goodwill, Confidential Information, and other legitimate
business interests; that he will immediately notify DGSE in writing should he believe or be advised that the restrictions are not,
or likely are not, valid or enforceable under the law of any state that he contends or is advised is applicable; that he will not
challenge the enforceability of such restrictions; that absent the promises and representations made by him in this paragraph,
DGSE would not provide him with new and additional Confidential Information, would not authorize him to engage in activities that
will create new and additional Confidential Information, and would not enter or have entered into this Agreement; and his obligations
under this paragraph are in addition to any applicable statutory or common-law obligations.
(f) Remedies;
Reformation.
(i) Clem
acknowledges and agrees that DGSE would not have an adequate remedy at law and would be irreparably harmed in the event that any
of the provisions of this Paragraph 5 were not performed in accordance with their specific terms or were otherwise breached.
Accordingly, Clem agrees that DGSE shall be entitled to equitable relief, including preliminary and permanent injunctions and specific
performance, in the event Clem breaches or threatens to breach any of the provisions of this Paragraph 5, without the necessity
of posting any bond or proving special damages or irreparable injury. Such remedies shall not be deemed to be the exclusive remedies
for a breach or threatened breach of this Paragraph 5, but shall be in addition to all other remedies available to DGSE
at law or equity.
(ii) The
Parties agree that if any of the provisions of this Paragraph 5 are ever deemed by a court to be unenforceable as written
under applicable law, such provisions shall be, and are, automatically reformed to the maximum limitations permitted by applicable
law, provided, however, Clem shall have no liability for any acts committed before such reformation that would have been a violation
of Paragraph 5 if such acts would not be a violation of Paragraph 5 as reformed.
(iii) Clem
agrees that the existence of a claim or cause of action against DGSE, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by DGSE of Clem’s obligations under this Paragraph 5.
6. Advisory
and Consulting Services.
(a) Beginning
on the day after the Separation Date and ending on March 31, 2016, unless earlier terminated as provided below (the “Term”),
Clem agrees to provide such advisory and consulting services for DGSE or an affiliate as may be requested from time to time by
DGSE during normal business hours, including but not limited to the services set forth on Exhibit A or as required by Paragraph
7 below, (the “Services”), provided that the Parties agree that the expected level of Services shall not
exceed an average of 120 hours per month. Clem may refer to himself as Consultant to the Board of Directors. Beginning on or after
December 31 2015, either Party may elect to terminate the obligations under this Paragraph 6 upon two weeks’ written
notice to the other Party, in which case the Term shall expire upon the date set forth for termination in such notice. Clem’s
compensation for the Services during the Term shall be $25,000 per month (pro rated for any partial months during the Term), and
DGSE agrees to and shall pay such compensation on the last day of each month in which this Paragraph 6 is in effect. DGSE
also agrees to and shall reimburse Clem for any reasonable and documented expenses (consistent with DGSE’s policies for reimbursement
of expenses as such policy existed as of the Effective Date of this Agreement or as amended, provided any such amendment shall
not reduce or diminish the reimbursement rights applicable to Clem), including those expenses incurred by Clem in connection with
trade shows or client visit Services outside the Dallas-Fort Worth metroplex, if such Services are requested by DGSE. Travel expenses
within the Dallas-Fort Worth metroplex shall not be reimbursed absent separate written agreement between DGSE and Clem. If DGSE
requests that Services be performed at DGSE’s headquarters or stores, DGSE shall make office space available for Clem to
perform the Services. DGSE shall indemnify and hold Clem harmless to the fullest extent permitted by law against any and all actions,
claims, demands, proceedings, damages, losses or suits, including costs and expenses of defense (including but not limited to attorneys’
fees) resulting from Clem’s good faith performance of the Services, and DGSE shall use reasonable commercial efforts to insure
and otherwise cover Clem during the Term under DGSE’s Directors and Officers Liability Insurance policy with coverage amounts
at least as great as coverage provided to DGSE’s directors, Chief Executive Officer and Chief Financial Officer as of the
Effective Date of this Agreement. DGSE agrees to identify and include Clem in and under DGSE’s Directors and Officers Liability
Insurance policy. DGSE understands and agrees, however, that the existence or application of any Directors and Officers Liability
Insurance coverage for any claim that is subject to indemnification hereunder shall not be a condition for DGSE’s obligation
to indemnify Clem for his independent contractor Services as provided in this Agreement. Clem shall have no liability whatsoever
to DGSE for decisions made by DGSE management or directors in reliance on advice provided in good faith by Clem in connection with
the Services, and DGSE hereby expressly disclaims any and all reliance on such advice provided by Clem.
(b) The
Parties acknowledge and agree that (i) all the services that Clem may provide to or that concern DGSE after the Separation Date
and during the Term shall be deemed to be Services pursuant to this Agreement; (ii) Clem’s relationship to DGSE and its affiliates
in respect of the Services shall be that of an independent contractor; (iii) Clem will not be covered by any workers’ compensation
or other insurance provided by DGSE or any affiliate to its or their employees while providing the Services; (iv) Clem is not eligible
for any employee benefits provided by DGSE or any affiliate to its or their employees (other than the right to convert or continue
such coverage under the terms of the plans and applicable law) while providing the Services; (v) Clem shall not in any way represent
himself to be an agent of DGSE or any affiliates and shall not have any power to bind DGSE or any affiliates or make decisions
on behalf of DGSE while providing the Services; (vi) Clem is solely responsible for complying with obligations imposed upon Clem
as an independent contractor by all applicable federal, state, or local laws, rules, and regulations relating to the performance
of the Services and payment of the fee described in Paragraph 6(a), including but not limited to those relating to the reporting
of, and paying when due, all income and other taxes of Clem, including estimated taxes, and the filing of all returns and reports
required by Clem under applicable law; (vii) DGSE is solely responsible for complying with obligations imposed upon DGSE by all
applicable federal, state, or local laws, rules, and regulations relating to the hiring of Clem for the performance of the Services,
including but not limited to those relating to the reporting of, and paying when due, all income and other taxes of DGSE, including
estimated taxes, and the filing of all returns and reports required by DGSE under applicable law; and (viii) nothing in this Agreement
creates or shall be deemed to create an employer-employee relationship, partnership, joint venture, agency relationship, or other
legal relationship between Clem and DGSE or any affiliates.
7. Cooperation.
The Parties agree that certain matters in which Clem has been involved during his employment may necessitate Clem’s cooperation
with DGSE in the future. Accordingly, for a period of six months following the Separation Date, to the extent reasonably requested
by DGSE, Clem shall reasonably cooperate with DGSE in connection with matters arising out of Clem’s service to DGSE; provided
that, DGSE shall make reasonable efforts to minimize disruption of Clem’s other activities, and Clem shall have no obligation
to (a) incur any cost in connection with providing such cooperation, or (b) interfere with his employment duties with Clem’s
employer. Such cooperation efforts by Clem shall be without compensation, except as provided for in Paragraph 6.
8. Non-Disparagement.
Clem agrees and covenants not to make any statement (oral, written, or electronic), or authorize another to make any statement
(oral, written, or electronic), to the media or to a “third party” which directly or indirectly impugns the quality
or integrity of DGSE’s or any of the other DGSE Group’s business, operations, management, prospects, or personnel affairs,
or any other disparaging or derogatory remarks about DGSE or any of the other DGSE Group. “Third party” for purposes
of the preceding sentence does not include statements made to or between the Clem and his spouse, attorney, or tax or financial
advisors, if any, in a confidential manner or setting, if such persons have agreed to keep such information confidential. DGSE
agrees and covenants that no current member of DGSE’s Board of Directors shall make any statement (oral, written, or electronic),
nor shall they authorize another to make any statement (oral, written, or electronic), to the media or to a “third party”
which directly or indirectly impugns the quality or integrity of Clem’s reputation, business, operations, prospects, or personnel
affairs, or any other disparaging or derogatory remarks about Clem. “Third party” for purposes of the preceding sentence
does not include statements made to or between any member of DGSE’s Board of Directors and their respective spouses, attorneys,
or tax or financial advisors, if any, in a confidential manner or setting, if such persons have agreed to keep such information
confidential.
Nothing in this Agreement is intended to
or shall preclude Clem or any member of DGSE’s Board of Directors from (i) making statements to those with whom such person
has the right to make a legally privileged communication, (ii) giving truthful testimony or making statements under oath in response
to valid legal process or in any legal proceeding; or (ii) responding truthfully to inquiries by governmental agencies or to inquiries
by any person or entity through a subpoena or other legal process.
9. Knowing
and Voluntary Acknowledgement. The Parties each specifically agree and acknowledge that: (a) they have read this Agreement
in its entirety and understand all of its terms; (b) they have been advised to consult with an attorney prior to executing this
Agreement and they have each had sufficient time to do so if they desire; (c) Clem and DGSE knowingly, freely and voluntarily assent
to all of terms and conditions of this Agreement including, without limitation, the respective waivers, releases and covenants
contained herein; (d) Clem and DGSE execute this Agreement, including the waivers and releases, in exchange for good and valuable
consideration in addition to anything of value to which the Parties are otherwise entitled; (e) Clem and DGSE are not waiving or
releasing rights or claims that may arise after the execution of this Agreement; and (f) Clem and DGSE understand that the waivers
and releases in this Agreement are in connection with the performance and cessation of Clem’s employment with DGSE.
10. Successors
and Assigns.
(a) Assignment
by DGSE. DGSE may assign this Agreement to any subsidiary or corporate affiliate in DGSE Group or otherwise, 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 DGSE. This Agreement shall inure to the benefit of DGSE Group and permitted successors and assigns. Notwithstanding
any such assignments, DGSE, DGSE Group and the assignee shall be and shall remain bound by all of the terms, obligations, and provisions
hereof. DGSE may assign this Agreement only to an assignee that agrees to perform this Agreement in the same manner and
to the same extent that DGSE would be required to perform if no such succession or assignment had taken place. The failure of any
assignee of DGSE to expressly assume to perform this Agreement in writing, which is not remedied within ten (10) business days
after receipt of written notice from Clem notifying DGSE or DGSE’s assignee of such failure, shall constitute a material
breach of this Agreement, and without limitation to any other rights or remedies at law, Clem shall be entitled to enforce such
material breach by specific performance. Within ten (10) days of any assignment by DGSE, DGSE shall notify Clem of the assignment
as well as the identity of the assignee and the name and contact information of the assignee.
(b) No
Assignment by Clem. Clem may not assign this Agreement or any part hereof, it being understood that this Agreement is personal
to Clem. Any purported assignment by Clem shall be null and void from the initial date of purported assignment.
11. Governing
Law: Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of the State
of Texas without regard to conflicts-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 Dallas County in the State of Texas. The Parties hereby (i) irrevocably
submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such
action or proceeding in such venue and (ii) irrevocably waive the right to trial by jury and agree not to ask for a jury in
any such proceeding.
12. Entire
Agreement. Unless specifically provided herein, this Agreement, together with the provisions and Sections of the Employment
Agreement referenced herein, contain all the understandings and representations between Clem and DGSE Group pertaining to the subject
matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written
and oral, with respect to such subject matter. The Parties mutually agree that the Agreement can be specifically enforced in court
and can be cited as evidence in legal proceedings alleging breach of the Agreement.
13. Modification
and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in
writing and signed by Clem and by the Chief Executive Officer or Chief Operating Officer of DGSE. Any amendment or modification
to the Agreement, whether material or immaterial, that are made or approved by DGSE after it was originally presented to Clem do
not extend the period of time for him to consider and accept this Agreement. No waiver by either of the Parties of any breach by
the other party hereto of any condition or provision of this Agreement to be performed by the other Party hereto shall be deemed
a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure
of or delay by either of the Parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude
any other or further exercise thereof or the exercise of any other such right, power or privilege.
14. Severability.
Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any
portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder
of this Agreement, the balance of which shall continue to be binding upon the Parties with any such modification to become a part
hereof and treated as though originally set forth in this Agreement, provided, however, neither Party shall have any liability
for any acts committed before such modification that would have been a violation of this Agreement if such acts would not be a
violation of of this Agreement as modified.
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, 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; provided, however,
neither Party shall have any liability for any acts committed before such modification that would have been a violation of this
Agreement if such acts would not be a violation of of this Agreement as modified.
The Parties expressly
agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them prospectively
but not retrospectively. 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.
15. Captions.
Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of
this Agreement is to be construed by reference to the caption or heading of any section or paragraph.
16. Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Copies of this Agreement, including any facsimile copies or .pdf file copies with signatures,
shall be binding and treated as an original agreement.
17. Non-Admission.
Nothing in this Agreement shall be construed as an admission of wrongdoing or liability on the part of DGSE. Nothing in this Agreement
shall be construed as an admission of wrongdoing or liability on the part of Clem.
18. Notices.
All notices under this Agreement must be given in writing, by certified mail or internationally-recognized overnight delivery service
at the addresses indicated in this Agreement or any other address designated in writing by either party. When providing written
notice to either party, a copy must be provided to the Parties at the following addresses:
If to DGSE: |
Attn: Chief Financial Officer |
|
DGSE Companies, Inc. |
|
15850 Dallas Parkway, Suite 140 |
|
Dallas, Texas 75248 |
|
|
with copy (which shall not constitute notice) to: |
|
|
|
Attn: Michael Stockham |
|
Thompson & Knight LLP |
|
1722 Routh Street, Suite 1500 |
|
Dallas, Texas 75201 |
|
|
If to Clem: |
James D. Clem |
|
____________ |
|
____________ |
|
|
with copy (which shall not constitute notice) to: |
|
|
|
____________ |
|
____________ |
|
____________ |
19. Tolling.
Should either Party violate any of the terms of the post-termination obligations articulated herein, the obligation at issue will
run from the first date on which such Party ceases to be in violation of such obligation.
21. Attorneys’
Fees. Should any party bring a legal action in regard to a breach or an alleged breach any of the terms of this Agreement or
the termination obligations articulated herein, and except as otherwise provided by law, the non-prevailing party will be responsible
for payment of all reasonable attorneys’ fees and costs that the prevailing party incurred in the course of enforcing the
terms of the Agreement or in defending against the allegations of breach, including for such fees and costs incurred in demonstrating
the existence or non-existence of a breach and any other contract enforcement or defense efforts of the prevailing party.
22. Tax
Withholding. Payments under this Agreement shall be subject to any lawfully required withholding taxes, and such payments shall
be reduced by the amount of any such withholding taxes to the extent Clem has not made arrangements with DGSE for the payment of
such withholding taxes prior to any such payment being made, including, by way of example with respect to a payment to Clem in
the form of equity securities, through delivery of a check by Clem made payable to DGSE in an amount equal to the applicable withholding
amount, in which event, upon clearance of such check, DGSE shall remit such amounts to the applicable governmental authorities.
23. Section
409A. This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (Section 409A)
or an exemption thereunder so that no taxes will be owed under Section 409A and shall be construed and administered in accordance
therewith. Any payments under this Agreement that may be excluded from Section 409A as a short-term deferral shall be excluded
from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement
shall be treated as a separate payment. Notwithstanding the foregoing, DGSE makes no representations that the payments and benefits
provided under this Agreement comply with Section 409A and in no event shall DGSE be liable for all or any portion of any taxes,
penalties, interest or other expenses that may be incurred by Clem on account of non-compliance with Section 409A.
24. Acknowledgment
of Full Understanding. CLEM ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT.
CLEM ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE
SIGNING THIS AGREEMENT. CLEM FURTHER ACKNOWLEDGES THAT HIS SIGNATURE BELOW IS AN AGREEMENT TO RELEASE DGSE FROM CLAIMS AS STATED
HEREIN. DGSE ACKNOWLEDGES AND AGREES THAT IT UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. DGSE ACKNOWLEDGES AND AGREES
THAT DGSE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF DGSE’S CHOICE BEFORE SIGNING THIS AGREEMENT.
DGSE FURTHER ACKNOWLEDGES THAT DGSE’S REPRESENTATIVE’S SIGNATURE BELOW IS AN AGREEMENT TO RELEASE CLEM FROM CLAIMS
STATED HEREIN.
25. Termination
of Employment Agreement. Except for those Sections of the Employment Agreement that expressly survive the termination of the
Employment Agreement, and except for the Sections of the Employment Agreement referenced herein and made a part of this Agreement,
the Parties agree that the Employment Agreement and the employer-employee relationship established thereunder is and shall be terminated
upon the Separation Date.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF,
the Parties have executed this Agreement as of the Execution Date above.
|
DGSE COMPANIES, INC. |
|
|
|
By: |
/s/ C. BRETT BURFORD |
|
Name: C. Brett Burford |
|
Title: Chief Financial Officer |
CLEM |
|
|
|
Signature: |
/s/ JAMES D. CLEM |
|
Print Name: James D. Clem |
|
Exhibit 99.1
Press
Release
FOR IMMEDIATE RELEASE |
|
DGSE Companies Announces Appointment
of New Chief Executive Officer
Dallas
– September 11, 2015 - DGSE Companies, Inc. (NYSE MKT: DGSE) (“DGSE” or “the Company”), a leading
wholesaler and retailer of jewelry,
diamonds, fine watches,
and precious metal bullion and rare coin products,
today announced that Matthew M. Peakes has been appointed to the positions of Chairman of the Board, President and Chief Executive
Officer of DGSE Companies, Inc., effective September 16, 2015. Mr. Peakes will replace James D. "Dusty" Clem, who previously
announced his resignation as Chairman of the Board, President and Chief Executive Officer, effective September 15, 2015.
Mr. Peakes will step down from his current
position as Director of Business Development for Elemetal, LLC (“Elemetal”), to assume these roles at DGSE. Mr. Peakes
brings significant business development and precious metals experience with him from his time at Elemetal, which is the Company’s
largest shareholder and one of the largest global precious metals companies. Mr. Peakes was also a Vice President with J.P. Morgan
where he managed relationships with high net worth investors, and helped to develop investment strategies across a wide range of
platforms. Mr. Peakes has a Bachelor of Business Administration and a Masters of Business Administration, both from Southern Methodist
University.
“On behalf of the Board of Directors,
I’d like to welcome Matt Peakes to DGSE. We are very excited to embark on a new stage in DGSE’s history, under Matt’s
leadership,” stated C. Brett Burford, Chief Financial Officer and Director, of DGSE. “Matt was a key member of Elemetal’s
management team, and led many of their critical projects. Matt brings a wealth of experience, energy and enthusiasm to DGSE, and
we believe he will be an ideal leader to help transform DGSE into a consistently profitable business for our shareholders.”
The Company also announced that David S.
Rector has resigned from the Board of Directors, effective September 4, 2015. Mr. Rector has left the Board due to personal
reasons, and has no disagreements or disputes with the Company or its management. The Company is currently engaged in a search
to fill three independent director seats, and expects to announce new board appointments in the coming weeks.
About DGSE Companies
DGSE Companies, Inc. wholesales and retails
jewelry, diamonds, fine watches, and precious metal bullion and rare coin products through its Charleston Gold & Diamond Exchange,
Chicago Gold & Diamond Exchange (formerly Bullion Express), and Dallas Gold & Silver Exchange operations. DGSE also owns
Fairchild International, Inc., one of the largest vintage watch wholesalers in the country. In addition to its retail facilities
in Illinois, South Carolina, and Texas, the Company operates websites which can be accessed at www.dgse.com, and www.cgdeinc.com.
Real-time price quotations and real-time order execution in precious metals are provided on another DGSE website at www.USBullionExchange.com.
Wholesale customers can access the full vintage watch inventory through the restricted site at www.FairchildWatches.com. The Company
is headquartered in Dallas, Texas and its common stock trades on the NYSE MKT exchange under the symbol "DGSE."
This press release includes statements
which may constitute "forward-looking" statements, usually containing the words "believe," "estimate,"
"project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties
that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute
to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace,
competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with
the Securities and Exchange Commission. By making these forward-looking
statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
Press
Release
FOR IMMEDIATE RELEASE |
|
Contact:
DGSE Companies, Inc.
C. Brett Burford, Chief Financial Officer
972-587-4021
investorrelations@dgse.com
###
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