EXHIBIT 10.7
CHANGE IN CONTROL
AGREEMENT
This Agreement, made and entered
into by and between PEMSTAR Inc., a Minnesota corporation (the
“Company”), with its principal offices at 3535
Technology Drive N.W., Rochester, Minnesota, and *, an officer of
the Company (the “Employee”), residing at *.
WHEREAS,
this Agreement is intended to
specify the financial arrangements that the Company will provide to
the Employee upon the Employee’s separation from employment
with the Company under any of the circumstances described herein;
and
WHEREAS,
this Agreement is entered into by
the Company in the belief that it is in the best interest of the
Company to provide stable conditions of employment for the Employee
notwithstanding the possibility, threat, or occurrence of certain
types of changes in control, thereby enhancing the Company’s
ability to attract and retain highly qualified people.
NOW, THEREFORE,
in consideration of the mutual
covenants, promises, payments, and undertakings of the parties
hereto, the parties agree as follows:
1. Effect of Agreement;
Term . The Employee shall be employed on an at-will basis,
except to the extent otherwise provided by a written employment
agreement, if any, in effect between the Employee and the Company.
This Agreement is not, and shall not be construed as, an employment
contract affecting in any way the duration of the Employee’s
employment or any terms and conditions thereof except those set
forth herein. Except as set forth herein, or as otherwise provided
by a written employment agreement, if any, in effect between the
Employee and the Company, the Employee or the Company may terminate
their employment relationship at any time, for any reason, or for
no reason.
This Agreement will commence on the
date hereof and shall continue in effect until the second
anniversary of the date hereof; and, commencing on the first
anniversary of the date hereof and on each anniversary thereafter,
the term of this Agreement shall automatically be extended for one
additional year unless, not later than 90 days prior to any such
date of automatic extension of this Agreement, the Company shall
have given notice to the Employee that the Agreement will not be so
extended; provided, however, if a Change in Control (as defined in
section 3(a) hereof) shall have occurred during the original or any
extended term of this Agreement, this Agreement shall continue in
effect for a period of 24 months following such Change in Control
(as defined in section 3(a) hereof), after which 24-month period
this Agreement shall terminate.
2. Termination of
Employment.
a) Prior to a Change in
Control . Prior to the date that is six months before a
Change in Control (as defined in section 3(a) hereof), or after
termination of this Agreement, the Employee or the Company may
terminate their employment relationship at any time, for any
reason, or for no reason.
b) After a Change in
Control.
i) From and after the date that is
six months before a Change in Control (as defined in section 3(a)
hereof) and prior to the termination of this Agreement, the Company
shall not terminate the Employee from employment with the Company
except as provided in this section 2(b), or as a result of the
Employee’s Disability (as defined in section 3(d) hereof) or
his death.
ii) From and after the date that is
six months before a Change in Control (as defined in section 3(a)
hereof) and prior to the termination of this Agreement, the Company
shall have the right to terminate the Employee from employment with
the Company for Cause (as defined in section 3(c) hereof), by
written notice to the Employee, specifying the particulars of the
conduct of the Employee forming the basis for such
termination.
iii) From and after the date that is
six months before a Change in Control (as defined in section 3(a)
hereof) and prior to the termination of this Agreement:
(a) the Company shall have the right to terminate the
Employee’s employment without Cause (as defined in
section 3(c) hereof); and (b) the Employee shall, upon
the occurrence of such termination by the Company without Cause or
upon the voluntary termination of the Employee’s employment
by the Employee during such period for Good Reason (as defined in
section 3(b) hereof), be entitled to receive the benefits
provided in section 4 hereof. The Employee shall evidence a
voluntary termination for Good Reason by written notice to the
Company given within ten (10) days after the date of the
occurrence of any event that the Employee knows or should
reasonably have known constitutes Good Reason for voluntary
termination. Such notice need only identify the Employee and set
forth in reasonable detail the facts and circumstances claimed by
the Employee to constitute Good Reason. Any notice given by the
Employee pursuant to this section 2 shall be effective ten
(10) days after the date it is given by the
Employee.
3.
Definitions.
a) A “Change in Control”
shall mean any of the following:
i) A sale of all or substantially
all of the assets of the Company.
ii) The acquisition of securities of
the Company representing more than 50% of the combined voting power
of the Company’s then outstanding securities by any person or
group of persons, except a Permitted Shareholder as hereinafter
defined, acting in concert. A “Permitted Shareholder”
means a holder, as of the date of this Agreement, of voting capital
stock of the Company.
iii) A consolidation or merger of
the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company’s
outstanding capital stock are converted into cash, securities or
other property, other than a consolidation or merger of the Company
in which Company
shareholders immediately prior to
the consolidation or merger have the same proportionate ownership
of voting capital stock of the surviving corporation immediately
after the consolidation or merger.
iv) In the event that the shares of
voting capital stock of the Company are traded on an established
securities market: a public announcement that any person has
acquired or has the right to acquire beneficial ownership of
securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding
securities, and for this purpose the terms “person” and
“beneficial ownership” shall have the meanings provided
in Section 13(d) of the Securities and Exchange Act of 1934,
as amended or related rules promulgated by the Securities and
Exchange C
