Exhibit 10.7
June 14, 2006
Xxx Xxxxxxx
Re: SPECIAL TRANSITION AGREEMENT
Dear Xxx Xxxxxxx:
This Special Transition Agreement (the "SPECIAL TRANSITION AGREEMENT") is
being entered into in connection with and as a condition to the Agreement and
Plan of Merger by and among INTERMAGNETICS GENERAL CORPORATION, ("IGC"), Philips
Holding USA, Inc., and Jumbo Acquisition Corp., dated [14], 2006 (the "MERGER
AGREEMENT"). This Special Transition Agreement shall become effective on the
date the merger becomes effective under the Merger Agreement (the "EFFECTIVE
DATE") and (b) end at the close of business on the earlier of (1) the end of the
Compensation Period set forth in your Employment Agreement with Philips
Electronics North America Corporation, a Delaware corporation (the "COMPANY")
dated June [14], 2006 (the "EMPLOYMENT AGREEMENT"), or (2) the effective date of
early termination of your employment. Once effective, this Special Transition
Agreement amends the Restricted Stock Unit Award Agreement dated April 13, 2005
between you and IGC (the "RSU AGREEMENT").
However, if the Merger Agreement or your employment with IGC terminates for
any reason before the merger occurs, all of the provisions of this Special
Transition Agreement will terminate and there will be no liability of any kind
under this Special Transition Agreement. You agree to remain employed by IGC
until the consummation of the merger contemplated in the Merger Agreement.
References in this Special Transition Agreement to "YOUR EMPLOYMENT" are to your
employment under the Employment Agreement.
1. Amendment of the RSU Agreement.
In consideration of entering into and receiving the additional payments and
benefits provided in the Employment Agreement, including, but not limited to the
Cash Performance Bonus (to which you would not otherwise be entitled without
entering into this Special Transition Agreement), and as an inducement to
Philips to enter into the Merger Agreement, effective immediately prior to the
Effective Time as defined in the Merger Agreement,
the RSU Agreement shall be, and hereby is amended to provide for termination of
21,819 restricted stock units that when multiplied by the Per Share Merger
Consideration (as defined in the Merger Agreement), shall equal $600,022.50 (the
"TRANSITION AMOUNT").
2. Payout of Transition Amount.
At the end of the Compensation Period, or if your employment is terminated
by the Company without Cause, by you for Good Reason or as a result of your
death or physical or mental disability (as defined in the Employment Agreement),
before the end of the Compensation Period stated in the Employment Agreement,
then, subject to your execution and delivery of the Company's then standard
severance agreement applicable to similarly situated executives which will
contain reasonable and customary provisions, including, without limitation,
general releases, and non-competition, non-solicitation, non-disparagement,
confidentiality and conflict of interest provisions substantially similar to
those set forth in the WORKING TOGETHER BOOK and EMPLOYEE ETHICS and
INTELLECTUAL PROPERTY AGREEMENT attached hereto (modified to reflect the terms
of the Employment Agreement), the Company will provide you with the Transition
Amount. This Transition Amount shall be payable in a cash lump sum within 30
days of the end of the Compensation Period or, if earlier and if applicable,
your termination date.
The Transition Amount shall not be paid if the Company terminates your
employment for Cause or you cease to be an employee of the Company as a result
of your voluntary resignation for any reason other than Good Reason or your
death or physical or mental disability, occurring prior to the end of the
Compensation Period.
3. Definitions.
For purposes of this Special Transition Agreement only:
1. "CAUSE" shall mean that the Executive:
a. willfully engages in fraud, illegal conduct or gross misconduct
which causes material financial or reputational harm to the
Company;
b. is convicted of a felony or pleads guilty or NOLO CONTENDERE to a
felony; or
c. materially misappropriates the Company's funds or property.
For purposes of this provision, no act or omission on the part of the
Executive shall be considered "WILLFUL" unless it is done or omitted
in bad faith or without reasonable belief that the act or omission was
in the best interests of the Company. Any act or omission based upon a
resolution duly adopted by the Board or advice of counsel for the
Company shall be conclusively presumed to have been done or omitted in
good faith and in the best interests of the Company.
2. "GOOD REASON" shall mean, without Executive's express written consent,
the occurrence of any of the following events:
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a. a reduction of Executive's rate of Salary or target Cash
Performance Bonus (as each such term is defined or such
opportunity is set forth in the Employment Agreement);
b. any requirement by the Company that Executive's office be
relocated more than 25 miles outside of the New York's Tri-City
Capital District;
c. any assignment by the Company to material duties that are not
substantially related to the MRI business or related products or
services of the Company that are materially different from the
duties specified in the Employment Agreement; or
d. any material breach of the Employment Agreement by the Company.
Notwithstanding the foregoing, a Good Reason event shall not be deemed
to have occurred if the Company cures such action, failure or breach
within thirty (30) days after receipt of written notice thereof given
by Executive. Executive's right to terminate employment for Good
Reason shall not be affected by Executive's incapacities due to mental
or physical illness and Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any
event or condition constituting Good Reason; provided, however, that
Executive must provide notice of termination of employment for Good
Reason within thirty (30) days following Executive's knowledge of an
event constituting Good Reason, or such event shall not constitute
Good Reason under this Special Transition Agreement. Executive
expressly acknowledges and agrees that this definition of "Good
Reason" shall not apply to, and shall have no effect on any benefits
provided in, the Employment Agreement.
4. Incorporation by Reference
Sections 7 and 9 (except for the last sentence of Section 9) of the
Employment Agreement shall apply to this Special Transition Agreement as if
fully set forth herein, to the extent applicable.
5. Acknowledgement.
YOU ACKNOWLEDGE THAT YOU HAVE HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL
CONCERNING THIS AGREEMENT, THAT YOU HAVE READ AND UNDERSTAND THIS AGREEMENT,
THAT YOU ARE FULLY AWARE OF THIS SPECIAL TRANSITION AGREEMENT'S LEGAL EFFECT,
AND THAT YOU HAVE ENTERED INTO THIS SPECIAL TRANSITION AGREEMENT FREELY BASED ON
YOUR OWN JUDGMENT AND NOT ON ANY REPRESENTATION OR PROMISES OTHER THAN THOSE
CONTAINED IN THIS SPECIAL TRANSITION AGREEMENT.
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[Philips Electronics North
America Corporation]
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Attorney-in-Fact
Accepted and Agreed
as of the date hereof
/s/ Xxx Xxxxxxx
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Xxx Xxxxxxx
(Signature Page to Xxx Xxxxxxx Special Transition Agreement)
