Exhibit 10.1
XXXXXX - INTERMAGNETICS
1998 EMPLOYMENT AND CONSULTING AGREEMENT
EMPLOYMENT AND CONSULTING AGREEMENT (the "Agreement") dated
as of April 20, 1998 between Intermagnetics General Corporation, a New York
corporation (the "Company"), and Xxxx X. Xxxxxx ("Employee").
WHEREAS, Employee served as the President and Chief Executive
Officer of the Company under an Employment and Consulting Agreement dated
September 22, 1992 between the Company and Employee (the "1992 Agreement");
WHEREAS, the 1992 Agreement was subsequently superseded by a
new Employment and Consulting Agreement, dated December 15, 1994, between the
Company and the Employee (the "1994 Agreement") which, among other things,
extended the service term of the employment provisions of the 1992 Agreement for
an additional two years;
WHEREAS. the parties reached an understanding during the
summer of 1996 to extend the service term of the employment provisions of the
1994 Agreement for an additional year, which understanding, although not reduced
to writing, was nonetheless documented in the minutes of the Compensation
Committee and the minutes of the Board of Directors of the Company for July and
August of 1996, and which understanding has been fully performed by both parties
(the "1996 Understanding");
WHEREAS, the parties now wish to extend the service term of
the employment provisions of the 1996 Understanding and make certain other
changes in the employment and consulting relationship between the Company and
the Employee on such terms and conditions as will secure the benefit of
Employees services to the Company; and
WHEREAS, Employee and the Company desire that the 1992
Agreement, the 1994 Agreement and the 1996 Understanding all be superseded by
this Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
1. Employment. The Company hereby employs or retains Employee, and Employee
hereby accepts such employment or consulting assignment and agrees to perform
his duties and responsibilities hereunder, in accordance with the terms and
conditions hereinafter set forth.
1.1. Term.
(a) Employment Term. Employee shall be employed as a full-time employee
of the Company for the term (the "Employment Term") running two fiscal
years beginning retroactive to June 1, 1997 and ending on May 31, 1999.
(b) Consulting Term. For the five fiscal years immediately following
the Employment Term (the "Consulting Term"), Employee shall serve as a
consultant to the Company as set forth in Section 1.7 hereof.
(c) Agreement Term. The term of this Agreement (the "Agreement Term")
shall commence retroactively as of June 1, 1997 and shall continue for
the Employment Term plus the Consulting Term, unless terminated prior
thereto in accordance with Section 8 or 9 hereof.
1.2. Duties and Responsibilities.
(a) During the Employment Term, Employee shall serve as Chief
Executive Officer of the Company and shall perform all duties
and accept all responsibilities incidental to such position or
as may be assigned to him by the Company's board of directors,
and he shall cooperate fully with the board of directors and
other executive officers of the Company. During the Employment
Term, Employee shall also be available to perform similar
duties on behalf of subsidiaries or divisions of the Company.
During the Employment Term, employee shall at all times comply
with policies and procedures adopted by the Company for
employees of the Company and its subsidiaries, including
without limitation the procedures and policies adopted by the
Company regarding conflicts of interest.
(b) During the Consulting Term, Employee shall provide consulting
services to the Company, and as such be involved in the
Company's external activities, policies and interests,
including joint ventures, investments, acquisitions, etc.
During the Consulting Term, Employee shall provide such
consulting services to the Company as an independent
contractor and not as an employee of the Company. Employee
shall at all times during the Consulting Term act as an
independent contractor and during such period nothing
hereunder shall create or imply a relationship of
employer-employee between the Company and Employee. During the
Consulting Term, Employee shall also be available to perform
similar duties on behalf of subsidiaries or divisions of the
Company. During the Consulting Term, Employee shall at all
times comply with policies and procedures adopted by the
Company for consultants to the Company, including without
limitation the procedures and policies adopted by the Company
regarding conflicts of interest.
(c) Employee represents and covenants to the Company that he is
not subject, or a party, to any employment agreement,
non-competition covenant, non-disclosure agreement or any
similar agreement, covenant, understanding or restriction
which would prohibit Employee from executing this Agreement
and performing his duties and responsibilities hereunder
during both the Employment Term and the Consulting Term, or
which would in any manner, directly or indirectly, limit or
affect the duties and responsibilities which may now or in the
future be assigned to Employee by the Company or the scope of
assistance to which he may now or in the future provide to
subsidiaries or divisions of the Company, including without
limitation any duties and responsibilities relating to the
development, production and/or sale of (i) superconductive
wire and materials, (ii) permanent and superconductive magnet
systems, or RF coils, used in MRI diagnostic imaging systems,
(iii) NMR spectroscopy systems, (iv) devices for separation of
materials by magnetic means, (v) cryogenic equipment and
refrigeration systems, (vi) permanent magnet applications as
part of the U.S. strategic defense initiative program, or
(vii) CFC replacement products.
1.3. Extent of Service.
(a) During the Employment Term, Employee agrees to use his best
efforts to carry out his duties and responsibilities under
Section 1.2(a} hereof and to devote his full time, attention
and energy thereto, provided, however, that Employee shall not
be required to transfer to a location other than the
metropolitan Albany, New York area without his prior consent.
Employee further agrees not to work either on a part time or
independent contracting basis for any other business or
enterprise during the Employment Term without the prior
consent of the board of directors of the Company.
(b) During the Consulting Term, Employee agrees to devote
approximately twenty (20) hours a week (inclusive of pro rata
vacation, holiday and sick leave) of his time, attention and
energy thereto; provided, however, that (i) Employee-shall
have complete discretion to select the specific dates required
for the performance of consulting activities hereunder, and
(ii) Employee shall not be required to perform such consulting
services outside the metropolitan Albany, New York area
without his prior consent.
(c) Except as provided in Section 5 hereof, neither subsection (a)
nor (b) hereof shall be construed as preventing Employee from
making investments in other businesses or enterprises, or from
serving as a director of any other business or enterprise,
provided that Employee agrees not to become engaged in any
other business activity which may interfere with his ability
to discharge his duties and responsibilities to the Company as
an employee or consultant.
1.4. Base Compensation During Employment Term. For all the services
rendered by Employee during the Employment Term, the Company shall pay
Employee an annual salary at the rate of $335,000 for each full year of
the Employment Term, plus unused vacation at the end of each year and
such additional amounts, if any, as may be approved by the Company's
board of directors, less withholding required by law or agreed to by
Employee, payable in installments at such times as the Company
customarily pays its other senior officers (but in any event no less
often than monthly). The Compensation Committee of the board of
directors of the Company shall annually review Employee's salary to
determine if an increase is appropriate. During the Employment Term,
Employee shall also be (i) entitled to participate in such vacation
pay, life insurance, pension benefits and other fringe benefit plans as
may exist from time to time for the senior officers of the Company
(subject to payment of such portion of the costs thereof as the Company
requires from its senior officers); (ii) provided with one social club
membership as chosen by Employee; (iii) provided with a term life
insurance policy payable to Employee's designated beneficiary or
beneficiaries in the face amount of $500,000 less any amount currently
provided under the Company's group life insurance coverage; and (iv)
entitled to be reimbursed for the reasonable expenses incurred by him
in obtaining advice and services related to financial and retirement
planning. Notwithstanding the foregoing, during the Employment Term,
the Company shall purchase a disability insurance policy for Employee
with minimum coverage equal to 60% of his base salary adjusted annually
for inflation, payable for the periods set forth on Schedule 1 hereto,
with a waiting period not to exceed 26 weeks, subject to reductions for
Social Security disability and worker's compensation payments, if any,
received by Employee. The disability policy shall define "disability"
to be Employee's inability to perform all of his material duties on a
full-time basis, and shall provide for partial disability coverage in
the event the Employee is unable to perform those duties on a full-time
basis and his income is reduced because of such disability.
1.5. Incentive Compensation. In addition to the compensation set forth
above, during the Employment Term Employee shall be entitled to
participate in such incentive compensation or bonus plans, if any, as
may be adopted by the board of directors of the Company from time to
time (without any obligation to the board of directors of the Company
to do so). Notwithstanding the foregoing, Employee shall receive in
respect of each of the two fiscal years during the Employment Term a
minimum cash bonus equal to not less than 1% of the Company's income
before taxes for such fiscal year. The bonus shall be paid to Employee
as soon as possible after the audited financial statements for such
fiscal year are available, but in no event later than 90 days after the
end of the fiscal year.
1.6. Stock Options. In consideration for Employee's continued
employment under this Agreement, the Company on June 1, 1999 will grant
to Employee, if he elects to begin the Consulting Term and if the
Company at such date continues to be a publicly held company whose
shares of Common Stock are registered under the Securities Exchange Act
of 1934 (the "1934 Act"), a non-qualified option to purchase 75,000
shares (subject to adjustment for future stock dividends or splits) of
Common Stock of the Company, with the option vesting at a rate of
33.33% on each of June 1, 2000, June 1, 2001 and June 1, 2002. The
grant will be made pursuant to the 1990 Stock Option Plan of the
Company, or any successor plan qualified under the rules and
regulations pursuant to Section 16 of the 1934 Act, and adopted by the
Company's shareholders as required by Rule 16b-3 of the 1934 Act, and a
stock option agreement for non-qualified options in the form used
generally by the Company. The exercise price of the option will be
equal to the fair market value of the Company's common stock on the
date of grant, and the term of the stock option is five years.
1.7. Consulting Term. For all services rendered by Employee as a
consultant to the Company during the Consulting Term, the Company shall
pay Employee compensation at the annual rate of 50% of his annual
salary at the end of the Employment Term for each full year of the
Consulting Term, provided however that for any week during the
Consulting Term in which Employee works more than twenty (20) hours,
the Company shall pay Employee additional compensation of 125% of the
Employee's then daily rate for each eight (8) hours, or portion
thereof, beyond such twenty (20) hours that the Employee worked that
week. For the purposes of the foregoing, hours worked shall include
time spent traveling on behalf of the Company. The Company shall also
pay Employee an incentive bonus in respect of each of the five fiscal
years during the Consulting Term equal to not less than 1/2% of the
Company's income before taxes for such fiscal year. The bonus shall be
paid to Employee as soon as possible after the audited financial
statements for such fiscal year are available, but in no event later
than 90 days after the end of the fiscal year, plus such additional
amounts, if any, as may be approved by the Company's board of
directors, payable in installments at such time as the Company
customarily pays its senior offices. During the Consulting Term,
Employee shall also be entitled to suitable office space at the
Company, including access to telephones, computers and copiers, and
appropriate executive support. During the Consulting Term, Employee
shall also be entitled to life, disability and health insurance
benefits provided generally to senior officers of the Company, and any
other privileges and perquisites granted to the Company's President,
Chief Operating Officer or Chief Executive Officer, during such periods
of time (subject to payment of such portion of the costs thereof as the
Company requires from its senior officers). During the Consulting Term,
Employee shall be solely responsible for the payment of all federal,
state and local taxes or contributions imposed or required under
unemployment insurance, social security and income tax laws that
pertain to the compensation paid to Employee for his performance of
consulting services.
2. Expenses. Employee shall be reimbursed for the reasonable business expenses
incurred by him in connection with his performance of services hereunder during
the Agreement Term upon presentation of an itemized account in accordance with
Company policies.
3. Developments. All developments (including inventions, whether patentable or
otherwise, trade secrets, discoveries, improvements, ideas and writings) which
either directly or indirectly relate to or may be useful in the business of the
Company or any of its affiliates (the "Developments") which Employee, either by
himself or in conjunction with any other person or persons, has conceived, made,
developed, acquired or acquired knowledge of while an employee of the Company or
which Employee, either by himself or in conjunction with any other person or
persons, shall conceive, make, develop, acquire or acquire knowledge of during
the Agreement Term, shall become and remain the sole and exclusive property of
the Company. Employee hereby assigns, transfers and conveys, and agrees to so
assign, transfer and convey, all of his right, title and interest in and to any
and all such Developments and to disclose fully as soon as practicable, in
writing, all such Developments to the board of directors of the Company. At any
time and from time to time, upon the request and at the expense of the Company,
Employee will execute and deliver any and all instruments, documents and papers,
give evidence and do any and all other acts which, in the opinion of counsel for
the Company, are or may be necessary or desirable to document such transfer or
to enable the Company to file and prosecute applications for and to acquire,
maintain and enforce any and all patents, trademark registrations or copyrights
under United States or foreign law with respect to any such Developments or to
obtain any extension, validation, re-issue, continuance or renewal of any such
patent, trademark or copyright. The Company will be responsible for the
preparation of any such instruments, documents and papers and for the
prosecution of any such proceedings and will reimburse Employee for all
reasonable expenses incurred by him in compliance with the provisions of this
Section.
4. Confidential Information. Employee recognizes and acknowledges that by reason
of his employment by the Company, he has had, and, by reason of his continued
employment by and consulting to the Company, he will continue to have, access to
confidential information of the Company and its affiliates, including, without
limitation, information and knowledge pertaining to products, inventions,
innovations, designs, ideas, plans,
trade secrets, proprietary information, manufacturing, packaging, advertising,
distribution and sales methods and systems, sales and profit figures, customer
and client lists, and relationships between the Company and its affiliates and
dealers, distributors, wholesalers, customers, clients, suppliers and others who
have had or will have business dealings with the Company and its affiliates
("Confidential Information"). Employee acknowledges that such Confidential
Information is a valuable and unique asset and covenants that he will not,
either during or after the Agreement Term, disclose any such Confidential
Information to any person for any reason whatsoever (except as his duties during
the Agreement Term may require) without the prior written authorization of the
Company's board of directors, unless such information is in the public domain
through no fault of Employee or except as may be required by law.
5. Non-Competition.
5.1 Limitation. During such time as Employee is employed by the Company
as an employee or consultant and until the later of (x) June 1, 2001 or
(y) one year after termination of Employee's employment or consulting
relationship with the Company (whether such termination is during or
after the Agreement Term), Employee will not, unless acting pursuant
hereto or with the prior written consent of the board of directors of
the Company, directly or indirectly, own, manage, operate, join,
control, finance or participate in the ownership, management,
operation, control or financing of, or be connected as a director,
officer, employee, partner, principal, agent, representative,
consultant or otherwise with or use or permit his name to be used in
connection with, any business or enterprise engaged in the development,
production, sale, rental or repair of (i) superconductive wire and
materials, (ii) permanent and superconductive magnet systems, or RF
coils, used in MRI diagnostic imaging systems, (iii) NMR spectroscopy
systems, (iv) devices for separation of materials by magnetic means,
(v) cryogenic equipment and refrigeration systems, (vi) permanent
magnet applications as part of the U.S. strategic defense initiative
program, or (vii) CFC replacement products. It is recognized by
Employee that the business of the Company and the other subsidiaries or
divisions of the Company which provide similar products or services and
Employee's connection therewith is or will be international in scope,
and that geographical limitations on this non-competition covenant (and
the non-solicitation covenant set forth in Section 6 hereof) are
therefore not appropriate.
5.2 Exception. The foregoing restriction shall not be construed to
prohibit the ownership by Employee of not more than five percent (5%)
of any class of securities of any corporation which is engaged in any
of the foregoing businesses having a class of securities registered
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"),
provided that such ownership represents a passive investment and that
neither Employee nor any group of persons including Employee in any
way, either directly or indirectly, manages or exercises control of any
such corporation, guarantees any of its financial obligations,
otherwise takes any part in its business (other than exercising his
rights as a shareholder), or seeks to do any of the foregoing.
6. No Solicitation. Employee agrees that until the later of (x) June 1, 2001 or
(y) one year after termination of Employee's employment or consulting
relationship with the Company (whether such termination is during or after the
Agreement Term) he will not call on or solicit, either directly or indirectly,
any person, firm, corporation or other entity who or which at the time of such
termination was, or within two years prior to the termination of Employee's
employment or consulting relationship with the Company had been, a customer of
the Company or any of its affiliates with respect to the activities prohibited
by Section 5 hereof.
7. Equitable Relief.
7.1 Right to Equitable Relief. Employee acknowledges that the
restrictions contained in Sections 4, 5 and 6 hereof are reasonable and
necessary to protect the legitimate interests of the Company and its
affiliates, that the Company would not have entered into this Agreement
in the absence of such restrictions, and that any violation of any
provision of those Sections will result in irreparable injury to the
Company for which there would be no adequate remedy at law. Employee
also acknowledges
that the Company shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual damages, as
well as an equitable accounting of all earnings, profits and other
benefits arising from any such violation, which rights shall be
cumulative and in addition to any other rights or remedies to which the
Company may be entitled. Employee agrees that in the event of any such
violation, an action may be commenced by the Company for any such
preliminary and permanent injunctive relief and other equitable relief
in any court of competent jurisdiction within the State of New York or
in a court of competent jurisdiction in any other state. Employee
hereby waives any objections on the grounds of improper jurisdiction or
venue to the commencement of an action in the State of New York and
agrees that effective service of process may be made upon him by mail
under the notice provisions contained in Section 16 hereof. In the
event that any of the provisions of Sections 4, 5 or 6 hereof should
ever be adjudicated to exceed the time, geographic, product or other
'imitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum
time, geographic, product or other 'imitations permitted by applicable
law.
(b) Dissemination of Restrictions. Employee agrees that until the
expiration of the covenants contained in Sections 3, 4, 5 and 6 of this
Agreement, he will provide, and that the Company may similarly provide,
a copy of the covenants contained in such Sections to any business or
enterprise (i) which he may directly or indirectly own, manage,
operate, finance, join, control or participate in the ownership,
management, operation, financing or control of, or (ii) with which he
may be connected with as a director, officer, employee, partner,
principal, agent, representative, consultant or otherwise, or in
connection with which he may use or permit his name to be used.
8. Termination. This Agreement shall terminate prior to the expiration of the
Agreement Term upon the occurrence of any one of the following events:
8.1. Disability. In the event that Employee is unable fully to perform
his duties and responsibilities hereunder to the full extent required
by the board of directors of the Company by reason of illness, injury
or incapacity for 26 consecutive weeks, during which time he shall
continue to be compensated as provided in Section 1.4 or 1.7 hereof, as
applicable (less any payments due Employee under disability benefit
programs, including Social Security disability, worker's compensation
and disability retirement benefits), this Agreement may be terminated
by the Company, and the Company shall have no further liability or
obligation to Employee for compensation hereunder; provided, however,
that Employee will be entitled to receive, in addition to amounts due
him in such circumstances under any pension or benefit plans of the
Company (including, without limitation, the Company's Retirement Plan,
Supplemental Retirement Plan, Supplemental Income Plan and Savings
Plan), (i) during the Employment Term, the payments prescribed under
any disability benefit plan which may be in effect for employees of the
Company and in which he participated (subject, however, to the minimum
disability benefit provisions set forth in Section 1.4 hereof), and a
pro rata portion of the incentive compensation, if any, referred to in
Section 1.5 hereof in respect of the period prior to the date on which
Employee first became disabled, and (ii) during the Consulting Term, an
equivalent level of benefits as provided by Section 1.7 hereof.
Employee agrees, in the event of any dispute under this Section 8.1, to
submit to a physical examination by a licensed physician selected by
the board of directors of the Company.
8.2. Death. In the event that Employee dies during the Agreement Term,
the Company shall pay to his executors, legal representatives or
administrators an amount equal to the installment of his salary or
compensation referred to in Section 1.4 or 1.7 hereof, as applicable,
for the month in which he dies plus a further amount equal to three
months' salary or compensation referred to in Section 1.4 or 1.7
hereof, as applicable, and thereafter the Company shall have no further
liability or obligation hereunder to his executors, legal
representatives, administrators, heirs or assigns or any other person
claiming under or through him; provided, however, that Employee's
estate or designated beneficiaries shall be entitled to receive, in
addition to amounts due him in such circumstances under any pension or
benefit plans of the Company (including, without limitation, the
Company's
Retirement Plan, Supplemental Retirement Plan, Supplemental Income Plan
and Savings Plan), (i) during the Employment Term, the payments
prescribed for such recipients under any death benefit plan which may
be in effect for employees of the Company and in which Employee
participated (subject, however, to the minimum life insurance
provisions set forth in Section 1.4 hereof), and a pro rata portion of
the incentive compensation, if any, referred to in Section 1.5 hereof
in respect of the year during which Employee died, and (ii) during the
Consulting Term, an equivalent level of benefits as provided by Section
1.7 hereof.
8.3. Voluntary Termination. In the event that subsequent to June 1,
2000 Employee voluntarily terminates the Consulting Term at any time
upon 30 days prior written notice to the Company.
8.4. Cause. Nothing in this Agreement shall be construed to prevent its
termination by the Company at any time for "cause." For purposes of
this Agreement, "cause" shall mean the willful and intentional failure
of Employee to perform or observe any of the material terms or
provisions of this Agreement, dishonesty, conviction of a crime
involving moral turpitude, habitual insobriety, substance abuse or
misappropriation of funds. The Company's liability, if any, for
payments to Employee by virtue of any wrongful termination of
Employee's employment or consulting relationship pursuant to this
Agreement shall be reduced by and to the extent of any earnings
received by or accrued for the benefit of Employee during any unexpired
part of the Agreement Term.
9. Extraordinary Termination. In the event of an Extraordinary Termination
during the Agreement Term, as defined in Section 9.1(b), the following
provisions shall apply.
9.1. Definitions. The following terms shall have the meanings
indicated for purposes of this Section 9:
(a) "Control Transaction" means a change in control of the Company
of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act, as in effect on the date of this
Agreement, in a Form 8-K filed under the Exchange Act or in
any other filing by the Company with the Securities and
Exchange Commission; provided that, without limitation, such a
Control Transaction shall be deemed to have occurred if:
(1) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes a "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or
more of the voting power of the then outstanding securities of
the Company;
(2) during any period of two consecutive calendar years there
is a change of 25% or more in the composition of the board of
directors of the Company in office at the beginning of the
period except for changes approved by at least two-thirds of
the directors then in office who were directors at the
beginning of the period.
(b) "Extraordinary Termination" means (i) termination by the
Company of the employment of Employee with the Company, or
termination of the retention of Employee as a consultant, or
in either case for any reason other than as set forth in
Section 8 hereof, within three years after a Control
Transaction, or (ii) resignation of Employee upon the
occurrence of any of the following events within three years
after a Control Transaction:
(A) an assignment to Employee of any duties inconsistent with,
or a significant change in the nature or scope of Employee's
authority or duties from, those held by Employee immediately
prior to the Control Transaction;
(B) a reduction in Employee's annual salary, consulting
payment or incentive compensation opportunities, as in effect
immediately prior to the Control Transaction or as the same
may be increased thereafter;
(C) a relocation of the site of employment of Employee (or the
site to which Employee regularly reports to work as a
consultant) more than 15 miles from his site of employment or
work at the time of the Control Transaction, or, if Employee
consents to his relocation, the failure of the Company to pay
(or promptly fully reimburse him for) all reasonable moving
expenses incurred by him relating to a change of his principal
residence in connection with such relocation and to indemnify
him against any loss realized in the sale of his principal
residence in connection with any change of residence;
(D) during the Employment Term, the failure by the Company to
provide Employee with a reasonable number of paid vacation
days at least equal to the number of paid vacation days to
which he was entitled in the last full calendar year prior to
the Control Transaction;
(E) the failure of the Company to provide Employee with
substantially the same fringe benefits that were provided to
him immediately prior to the Control Transaction, or with a
package of fringe benefits that, though one or more of such
benefits may vary from those in effect immediately prior to
the Control Transaction, is substantially at least as
beneficial to Employee in all material respects to such fringe
benefits taken as a whole; or
(F) the failure of the Company to obtain the express written
assumption of and agreement to perform this Agreement by any
successor as and to the extent required by Section 12 of this
Agreement.
9.2. Termination Payments.
(a) In the event of an Extraordinary Termination during the
Agreement Term, the Company shall, in addition to any amounts
due for periods prior to the Extraordinary Termination, pay to
Employee in cash within ten days after the Extraordinary
Termination an amount equal to the sum of:
(i) three times the greater of (A) Employee's annual salary or
annual consulting compensation at the time of the Control
Transaction, or (B) Employee's annual salary or annual
consulting compensation immediately prior to the Extraordinary
Termination; plus
(ii) if the Extraordinary Termination occurs during the
Employment Term, three times the greater of (A) the most
recent annual bonus paid to Employee prior to the
Extraordinary Termination or (B) the estimated amount of his
bonus for the year that includes the date of the Extraordinary
Termination; plus
(iii) at the option of Employee and in lieu of his exercising
any stock options that he might hold at the time, an amount
equal to the excess of the aggregate market price at the close
of business on the date of the Extraordinary Termination of
the Company's shares subject to all stock options outstanding
and unexercised, whether vested or unvested, over the
aggregate exercise price of all such stock options; plus
(iv) if the Extraordinary Termination occurs during the
Employment Term, payment in lieu of all unused vacation or
sick time.
(b) Employee may elect to defer the payment of all or part of the
amount to be paid to him under subsection (a) for up to twelve
months after the Extraordinary Termination, or to
have all or part of such amount paid to him in installments
over a period not to exceed twelve months after the
Extraordinary Termination.
(c) In addition to payment of the amounts specified in subsection
(a), for a period of twelve months following an Extraordinary
Termination during the Employment Term or the Consulting Term,
the Company will continue or cause to be continued, at no cost
to Employee, medical care and life insurance benefits
substantially comparable to those furnished to Employee by the
Company immediately prior to the Extraordinary Termination.
(d) It is the intention of the parties that the payments under
this Section 9 shall not constitute "excess parachute
payments" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended, and any regulations
promulgated by the Internal Revenue Service thereunder. In the
event that the independent accountants acting as auditors for
the Company on the date of a Control Transaction (or another
accounting firm designated by them) determine that the
payments under this Section constitute "excess parachute
payments," the amounts payable under this Section shall be
reduced to the maximum amount which may be paid without
constituting the payments "excess parachute payments." Such
determination shall take into account (i) whether the payments
under this Agreement are "parachute payments" within the
meaning of Section 280G and, if so, (ii) the amount of
payments under this Section that constitutes reasonable
compensation within the meaning of Section 280G. The fees and
expenses of the accountants performing this calculation shall
be paid in full by the Company. Nothing contained in this
Agreement shall prevent the Company after a Control
Transaction from agreeing to pay Employee compensation or
benefits in excess of those provided in this Agreement.
9.3. Interest and Expenses. If the Company shall fail or refuse to pay
any amount due under this Section 9 within the time required, the
Company shall pay to Employee, in addition to the payment of any other
sums required under this Section.
(1) interest, compounded daily, on any amount remaining unpaid
from the date payment is required under this Section until
payment to Employee, at the rate from time to time announced
by Corestates Bank as its prime rate plus 1.5%, each change in
the rate of interest hereunder to take effect on the effective
date of the change in such prime rate; and
(2) on demand, the amount necessary to reimburse Employee for all
expenses (including reasonable attorneys' fees and
disbursements) incurred by Employee in enforcing any of the
obligations of the Company under this Section.
9.4. Payment Obligations Absolute. The obligation of the Company to pay
Employee the compensation and to make the arrangements provided herein
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, any setoff, counterclaim,
recoupment, defense or other right that the Company may have against
him or anyone else. All amounts payable by the Company hereunder shall
be paid without notice or demand. The Company waives all rights which
it may now have or may hereafter have conferred upon it, by statute or
otherwise, to terminate, cancel or rescind this Section, or any other
section of this Agreement, in whole or in part. Each and every payment
made hereunder by the Company shall be final and the Company will not
seek to recover all or any part of such payment from Employee or from
whomsoever may be entitled thereto, for any reason whatsoever, except
as provided in Section 9.2(d) hereof. Employee shall not be required to
mitigate the amount of any payment provided for in this Section by
seeking other employment or otherwise.
10. Withholding of Taxes. The Company may withhold from any payments under this
Agreement all federal, state or local taxes as shall be required pursuant to any
law, regulation or ruling.
11. Non-Alienation. Employee shall not have any right to pledge, hypothecate,
anticipate or in any way create a lien upon any amounts provided under this
Agreement, and no benefit payable hereunder shall be assignable in anticipation
of payment either by voluntary or involuntary acts, or by operation of law.
12. Successor Company. The Company shall require any successor or successors
(whether direct or indirect, by purchase, merger, consolidation or otherwise,
and whether in one transaction or a series of transactions) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement. As used in this
Agreement, the "Company'" shall mean the Company as hereinbefore defined and any
such successors to its business and/or assets.
13. Survival. Notwithstanding the termination of this Agreement by reason of
Employee's disability under Section 8.1, for cause under Section 8.3 or upon an
Extraordinary Termination of Employment under Section 9, his obligations under
Sections 3, 4, 5 and 6 hereof shall survive and remain in full force and effect
indefinitely, or for such shorter period therein provided, and the provisions
for equitable relief against Employee in Section 7 hereof shall likewise
continue in force.
14. Governing Law. This Agreement shall be governed by and interpreted under the
laws of the State of New York without giving effect to any conflict of laws
provisions.
15. Litigation Expenses. In the event of a lawsuit by either party to enforce
the provisions of this Agreement, the prevailing party shall be entitled to
recover reasonable costs, expenses and attorneys' fees from the other party.
16. Notices. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to:
Intermagnetics General Corporation
000 Xxx Xxxxxxxxx Xxxx
P.O. Box 461
Latham, N.Y. 12110
Attention: Board of Directors
If to Employee, to:
Xxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 0000.
or to such other names or addresses as the Company or Employee, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
17. Contents of Agreement; Amendment and Assignment.
(a) This Agreement supersedes all prior agreement (including the 1992
Agreement, the 1994 Agreement and the 1996 Understanding) and sets
forth the entire understanding among the parties
hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved
by the board of directors of the Company and executed on its behalf by
a duly authorized officer; provided, however, that (i) the provisions
of Sections 3, 4 and 7 shall be in addition to, and not in limitation
of, any other invention assignment, confidentiality or similar
agreement between the Company and Employee, and (ii) the
representations of Employee set forth in Section 1.2(b) of the
Employment Agreement dated January 12, 1988 between the Company and
Employee, Section 1.2(c) of the Employment Agreement dated February 14,
1990 between the Company and the Employee and Section 1.2(c) of the
1992 Agreement shall continue in full force and effect. Without
limitation, nothing in this Agreement shall be construed as giving
Employee any right to be retained in the employ of the Company or as a
consultant to the Company except as specifically provided herein during
the Agreement Term.
(b) Employee acknowledges that from time to time, the Company may
establish, maintain and distribute employee manuals or handbooks or
personnel policy manuals, and officers or other representatives of the
Company may make written or oral statements relating to personnel
policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or
statements of any nature by or on behalf of the Company (whether
written or oral, and whether or not contained in any employee manual or
handbook or personnel policy manual), and no acts or practices of any
nature, shall be construed to modify this Agreement or to create
express or implied obligations of any nature to Employee.
(c) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and
assigns of the parties hereto, except that the duties and
responsibilities of Employee hereunder are of a personal nature and
shall not be assignable or delegable in whole or in part by Employee.
18. Severabilitv. If any provision of this Agreement or application thereof to
anyone or under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any
other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not
invalidate or render unenforceable such provision or application in any other
jurisdiction.
19. Remedies Cumulative; No Waiver. No remedy conferred upon the Company by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given hereunder or now or hereafter existing at law or in equity. No delay or
omission by the Company in exercising any right, remedy or power hereunder or
existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by the Company from time to time
and as often as may be deemed expedient or necessary by the Company in its sole
discretion
IN WITNESS WHEREOF, the ,undersigned have executed this
Employment and Consulting Agreement as of the date first above written.
ATTEST INTERMAGNETICS GENERAL CORPORATION
-------------------- --------------------
Xxxxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
Corporate Secretary Chairman, Compensation Committee
of the Board of Directors
Witness XXXX X. XXXXXX
-------------------- --------------------
Xxxxxxxxx X. Xxxxxxx
