Exhibit 10.2
CONFIDENTIAL
EMPLOYMENT AGREEMENT
This Agreement effective the 19th day of October 2001 (the "Effective
Date"), is by and between Intermagnetics General Corporation, a corporation
having a principal place of business at 450 Old Niskayuna Road, Latham, New York
12110 ("Intermagnetics", or the "Company") and Philip J. Pellegrino, an
individual residing at 58 Heron Drive, Marlboro, New Jersey 07746 ("Executive").
WHEREAS, the Company and Executive entered into an Offer of Employment
Letter dated September 28, 2001 (the "Letter"); and
WHEREAS, the parties now wish to enter into a formal agreement that
supersedes the Letter;
NOW, THEREFORE, in consideration of the matters recited, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged by the
parties, the Company and the Executive agree as follows:
1. Employment. Intermagnetics shall employ Executive as Sector President -
Energy Technology and President of IGC-SuperPower, LLC ("SuperPower").
Executive shall commence his employment on October 19, 2001 and report
directly to Intermagnetics' President and Chief Executive Officer.
Executive shall perform the duties generally associated with the job
description set forth on Schedule "A" of this Agreement.
Notwithstanding the foregoing, Intermagnetics, through its Chief
Executive Officer, retains the discretion to vary the title and duties
of Executive from time to time; provided that Executives' title and
duties shall not be less than at a senior executive level during the
term of this Agreement, and provided further that any change shall not
constitute a "diminution of authority" as defined in Section 2(g)(ii)
of Intermagnetics' Enhanced Benefit Plan attached as Schedule "B" to
this Agreement.
2. Compensation.
A. Base Salary. Executive's annual salary will be $200,000, with
the opportunity for increase on an annual basis.
Intermagnetics currently reviews salaries for senior
executives in July of each calendar year, but reserves the
right to modify this review date.
B. Management Incentive Bonus Program. Executive will participate
in Intermagnetics' Management Incentive Bonus Program (the
"Program") with a target bonus equal to 35% of Executive's
Base Salary beginning in Intermagnetics' fiscal year 2002
(prorated for FY '02). Executive's qualitative goals under the
Program will be determined within the first three months of
his employment. Executive's target bonus after fiscal year
2002 will be reviewed annually based on the terms of the then
current Program.
CONFIDENTIAL
C. Restricted Stock Grant. Executive will receive a restricted
stock grant of 1,000 shares of Intermagnetics' Common Stock
under the terms of the Company's 2000 Stock Option and Stock
Award Plan. The grant shall vest in two equal installments:
500 shares on October 18, 2003 and 500 shares on October 18,
2004, subject to the terms of the Plan.
D. Stock Options. Executive will receive a non-qualified stock
option grant of 25,000 shares of Intermagnetics' Common Stock
under the terms of the Company's 2000 Stock Option and Stock
Award Plan. The exercise price will be the market closing
price on October 19, 2001. This option will be exercisable in
installments of 20% of the total at completion of each year,
over 5 years following the grant. Executive will have a total
of ten years to exercise all options.
E. SuperPower Equity. Executive will be eligible to receive 5% of
the equity in SuperPower. The Company will develop a plan for
providing this equity ("Equity Plan") not later than April 12,
2002, with a vesting period not to extend past five (5) years.
The vesting schedule will be consistent for all of the
Company's executives eligible to participate in the plan.
3. Benefits.
A. Enhanced Benefit Plan. Executive will be a participant in
Intermagnetics' Enhanced Benefit Plan. The current fixed
annual contribution to the Company's Deferred Compensation
Plan on behalf of each participant is $8,000. Except as
expressly modified by this Agreement, the terms (including the
definitions) of the Plan shall apply to Executive, including
the dispute resolution and non-compete/non-solicitation
provisions of that Plan.
B. Relocation Expenses. If Executive purchases a home in the
Capital District within 24 months of the Effective Date of
this Agreement, he will be eligible for full reimbursement
(plus tax gross up) of incurred moving expenses and customary
real estate costs related to the purchase of a new home and
the sale (if any) of an existing home. In addition to one-time
closing costs, Intermagnetics will reimburse for the cost of
up to two (2) points or the equivalent amount paid to reduce
Executive's mortgage interest rate to the rate he pays on the
mortgage for his existing home.
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CONFIDENTIAL
C. Monthly Living Expenses. The Company will provide Executive
with $2,000 per month for living expenses during the initial
three (3) year term of this Agreement, provided that such
payments shall cease if Executive exercises his rights as
provided in 4(B) above.
D. Medical, Dental, 401(k), etc. Executive shall be entitled to
receive group medical insurance and other employee benefits,
including, but not limited to, life insurance, disability
insurance and 401(k) participation, subject to the same terms
afforded other senior executive employees of Intermagnetics.
Executive acknowledges that these employee benefit plans may
be amended, enlarged, diminished or eliminated on a
non-discriminatory basis by Intermagnetics from time to time
at its discretion.
E. Reimbursement for Legal/Financial Review. Intermagnetics will
reimburse Executive, upon presentation of an invoice, up to
$5,000 for professional financial advice in connection with
the Equity Plan or legal review of the Letter and this
Agreement.
F. Paid Personal Leave. In addition to Intermagnetics' standard
ten paid holidays, Executive will be entitled to four (4)
weeks of paid personal leave per calendar year, which will be
pro-rated for calendar year 2001 based on the Effective Date
of this Agreement.
4. Executive Stock Purchase Plan. Executive will be expected to meet the
guidelines for stock ownership set forth in the Company's Executive
Stock Purchase Plan (i.e., not less than one times base salary) within
his first six months of employment. A copy of the Executive Stock
Purchase Plan has been provided to Executive and a stock acquisition
loan will be made available to Executive pursuant to the terms of that
Plan.
5. Term. The initial term of this Agreement shall be three (3) years
beginning on October 19, 2001 and ending on October 18, 2004. Unless
either party provides written notice of termination to the other six
months prior to the end of the initial term, this Agreement shall
extend for an additional two year term and shall be extended
automatically for additional one year terms thereafter, unless either
party provides twelve months written notice to the other of its intent
to terminate at the end of the then applicable term.
6. Termination.
A. For Cause. Intermagnetics may terminate this Agreement for
"Cause" as defined in the Enhanced Benefit Plan.
B. Disability. Intermagnetics may terminate Executive's
employment if Executive is unable, as a result of physical or
mental disability, to perform his duties as provided in this
Agreement for a period in excess of twenty (20) weeks,
consecutively or non-consecutively, in any twelve (12) month
period. Termination under this provision shall be executed by
written notice from Intermagnetics to Executive and shall be
effective thirty (30) days following the written notice. For
purposes of determining whether Executive has a "physical or
mental disability" under this paragraph 7(B) he shall be
evaluated by a physician retained by Intermagnetics at
Intermagnetics' expense. Such physician must be Board
Certified in the specialty for which Executive is being
evaluated. Executive shall make all relevant medical records
available to the physician retained by Intermagnetics and
shall otherwise cooperate in such evaluation.
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CONFIDENTIAL
C. Death. This Agreement shall terminate in the event of
Executive's death, effective on the date of his death.
D. By Executive. Executive may terminate this Agreement at any
time upon thirty days prior written notice, or sooner, as
mutually agreed to by the parties to this Agreement.
E. Severance Benefits. Except as specifically modified
hereinbelow as to the number of months of Base Salary to be
included in Severance Payments, and the provisions for
accelerated vesting, all other provisions included in
paragraph 5. of the Enhanced Benefit Plan will be applicable
to Executive. In the event of an Extraordinary Termination, as
defined in the Enhanced Benefit Plan, other than in connection
with a "Control Transaction" (as that term is defined in the
Enhanced Benefit Plan), Intermagnetics will provide Executive
with twelve (12) months of his then current Base Salary in a
Severance Payment, and will cover the expense associated with
paying for benefits under COBRA during the salary continuation
period. In addition, the stock rights provided under
paragraphs 2(C) and 2(D) above would become fully vested and
exercisable. In the event of an Extraordinary Termination in
connection with a "Control Transaction" (as that term is
defined in the Enhanced Benefit Plan) involving SuperPower,
Executive will receive a Severance Payment equal to two years
of his then current Base Salary, plus two times his previous
year's incentive bonus. Stock rights will be the same as
provided hereinabove, but, in addition, will provide that
Executive's equity in SuperPower would become fully vested.
7. Confidentiality. The terms of the confidentiality and
proprietary information agreement executed by Executive shall
remain in full force and effect and shall not be altered or
amended by this Agreement.
8. Miscellaneous.
A. Governing Law. This Agreement is made under, and shall be
interpreted, construed, and enforced in accordance with the
laws of the State of New York, without regard to the conflicts
of law provisions thereof.
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CONFIDENTIAL
B. Disputes. All disputes arising out of this Agreement or
Executive's employment shall be subject to the dispute
resolution provisions of the Enhanced Benefit Plan.
C. Severability. If any provision or provisions of this
Agreement, or any schedule hereto, are held to be invalid or
unenforceable, such invalidity or unenforceability shall not
affect or impair the validity or enforceability of the
remaining provisions of this Agreement, which shall remain in
full force and effect.
D. Successors and Assigns. This Agreement shall benefit and bind the
parties and the successors and assigns of Intermagnetics.
E. Entire Agreement. This Agreement contains the entire agreement of the
parties relating to its subject matter, and supersedes all prior
agreements, negotiations and representations not specifically set forth
in this Agreement or the schedules hereto.
IN WITNESS HEREOF, the parties have caused this Employment Agreement to
be executed as of the date first written above
INTERMAGNETICS GENERAL CORPORATION
By: /s/ Glenn H. Epstein /s/ Philip J. Pellegrino
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Glenn H. Epstein Philip J. Pellegrino
President and Sector President-Energy Technology
Chief Executive Officer President-IGC SuperPower, LLC
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