Exhibit 10.54
November 29, 2001
Xx. Xxxx X. Xxxxxx
000 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Marc:
I am pleased to offer you a position as Vice President of Thermo Electron
Corporation and President of the Life Sciences Sector of Thermo Electron
Corporation, effective November 26, 2001, and subject to the terms of the letter
agreement among SPX Corporation ("SPX"), Xxxxxx Laboratory Products, L.P.
("Xxxxxx"), Thermo Electron Corporation ("Thermo Electron"), and you dated
November 27, 2001 (the "SPX Letter"). This offer is expressly conditioned on
obtaining approval at the next meeting of the Thermo Electron Board of
Directors, scheduled to meet on November 29, 2001.
The salary for the position will be at a rate of $300,000 per year, subject
to annual review beginning in 2003 as described below. In addition, you will be
eligible for an annual incentive award in accordance with Thermo Electron's
policies for annual incentives to professional employees. To be eligible for an
annual incentive award, you must be actively employed at the end of the
incentive period. Your annual reference bonus for purposes of the annual
incentive award will be $150,000 (beginning in 2003), with a multiplier of zero
to two based on a combination of subjective and objective factors. You will be
eligible for review of your compensation package beginning in 2003 at the time
Thermo Electron reviews all officers, which is usually in the first quarter.
In addition, you will receive a $200,000 one-time bonus payable in January
2002 with respect to your performance in 2002. Should you voluntarily leave
Thermo Electron before January 1, 2003 without good reason (as defined below),
you will be responsible for repaying a pro-rated portion of the sign-on bonus to
Thermo Electron.
You will receive, upon commencement of employment, a non-statutory option
for 275,000 shares, which shares shall vest on a cumulative basis at the rate of
one-third per annum on each anniversary date of your employment. Your options
will be evidenced by a Stock Option Agreement in the form of Exhibit A attached
hereto. Additional stock option grants would be at the discretion of the Thermo
Electron Board of Directors.
Xx. Xxxx X. Xxxxxx
November 29, 2001
Page 2
You will be entitled to four weeks vacation each year, accrued in
accordance with Thermo Electron's vacation policy, together with such other
benefits as are generally made available to professional employees and officers
of Thermo Electron, including Thermo Electron's car lease/allowance program and
its Executive Medical Supplemental Program.
Under Thermo Electron's car lease/allowance program, you may either (i)
have the company lease a company car for you, or (ii) receive a quarterly
allowance of $3,124. If you decide to have the company lease a vehicle, you can
select the make, model and options as long as the vehicle is appropriate for
business use. If the acquisition cost of the car exceeds $26,000, the balance
will be deducted from your payroll checks. The sales tax and insurance are paid
separately by the company and are not calculated in the $26,000 limit.
Under Thermo Electron's Executive Medical Supplemental Program you will be
paid $1,250 quarterly, which you can use to reduce any medical deductible or
co-insurance costs that you incur. These funds are for your discretionary use,
are not restricted to medical payments, and are taxable income.
You will also be entitled to receive expense reimbursement for legal fees
incurred in the negotiation and preparation of this agreement up to the amount
of $5,000.
If your employment is terminated by Thermo Electron without cause or by you
with good reason, you will be entitled to receive a lump sum severance payment
of eighteen months salary in lieu of any other severance benefit, except that if
your termination entitles you to greater benefits under any change in control
arrangement, you will be entitled to benefits under the change in control
arrangement, but not both. Upon commencement of your employment, Thermo Electron
will execute and deliver to you an Executive Retention Agreement in the form of
Exhibit B attached hereto.
For the purpose of this letter "cause" shall mean: (i) conviction of a
felony or any crime involving moral turpitude, or (ii) conduct that constitutes
gross neglect or gross misconduct, insubordination, or a willful and deliberate
violation of a company rule or regulation that results in material injury to
Thermo Electron, and "good reason" shall mean: (i) a material diminution in your
duties or responsibilities, (ii) a downgrade in title, (iii) a reduction in your
salary, (iv) a change in the reporting structure so that you report to someone
other than the Chief Operating Officer, or (v) a change by the company in the
location at which you perform your principal duties for the company to a new
location that is outside a radius of 50 miles of the company's headquarters in
Waltham, Massachusetts.
Xx. Xxxx X. Xxxxxx
November 29, 2001
Page 3
You will be entitled to indemnification if by reason of your status as an
officer of Thermo Electron you are made or threatened to be made a party to a
legal action, on the terms and conditions set forth in the form of
Indemnification Agreement attached hereto as Exhibit C. Thermo Electron will
also indemnify you for any liability, loss, cost or expense (including
reasonable attorneys fees) that you suffer or incur with respect to actions
brought against you by SPX or Xxxxxx for violation of the SPX Letter or the
Agreements (referenced in the SPX Letter) that relate to the performance of your
duties on behalf of Thermo Electron, including the exercise of any remedies
under the SPX Letter or the Agreements, provided that Thermo Electron will
control the selection of legal counsel to represent you as well as the defense
of such actions and all decisions relating to any proposed settlement thereof.
In accordance with Thermo Electron's standard employment practices, you
will be required to sign an agreement covering Thermo Electron's Company
Information and Inventions Policy and Drug Testing Policy, as well as an
acknowledgment of Thermo Electron's policies related to Business Conduct and
Drugs and Alcohol in the Workplace, copies of which are attached hereto as
Exhibits D, E, F and G. You will be required to take a drug-screening test for
illegal drugs and controlled substances.
Since Thermo Electron's standard policy does not provide for agreements
guaranteeing employment for any specific period of time, this offer is not
intended to be construed as an employment contract (except as specifically
provided herein) and your employment will therefore be "at will." The terms of
employment contained in this letter, including "at will" status, may not be
altered except by written agreement signed by an officer of Thermo Electron.
Please indicate your acceptance of our offer by signing a copy of this
letter and returning it to me. We are looking forward to your joining us.
Sincerely,
THERMO ELECTRON CORPORATION
/s/ Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx
President and COO
Xx. Xxxx X. Xxxxxx
November 29, 2001
Page 4
Attachments:
Exhibit A: Form of Stock Option Agreement
Exhibit B: Form of Executive Retention Agreement
Exhibit C: Form of Indemnification Agreement
Exhibit D: Information and Inventions Policy
Exhibit E: Drug Testing Policy
Exhibit F: Business Conduct Policy
Exhibit G: Drugs and Alcohol in the Workplace
AGREED:
/s/ Xxxx X. Xxxxxx
---------------------------
Xxxx X. Xxxxxx
Date: November 29, 2001
-----------------------------------------------
Exhibit A
Grant ID # 21-0199
[A/7;POST-7/1/00;D&O]
THERMO ELECTRON CORPORATION
EMPLOYEES EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
Xxxx X. Xxxxxx
Optionee
275,000 $22.18
Number of Shares of Exercise Price
Common Stock Subject Per Share
to the Option ("Option Shares")
Vesting Schedule
# of Shares Vesting Date(s)
one-third of Option Shares 11/30/02
one-third of Option Shares 11/30/03
one-third of Option Shares 11/30/04
November 30, 2001 November 30, 2008
Grant Date Expiration Date
Thermo Electron Corporation (the "Company") confirms the grant to you of an
option (the "Option") to acquire the number of shares of common stock (the
"Common Stock") specified above, of the Company, subject to the provisions of
the Employees Equity Incentive Plan (the "Plan") and the terms, conditions and
restrictions contained in this agreement (the "Agreement"). You acknowledge
receipt of the Plan and the Agreement for your records.
THERMO ELECTRON CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Chairman and Chief Executive
Officer
1
THERMO ELECTRON CORPORATION
EMPLOYEES EQUITY INCENTIVE PLAN
Stock Option Agreement
1. Grant of Option. This Stock Option Agreement (the "Agreement") contains
the terms and conditions of a grant of a nonqualified stock option to purchase
the shares of the common stock of the Company (the "Option Shares") made to you,
the Optionee named on the first page of this Agreement, pursuant to the Plan.
Attached is a copy of the Plan which is incorporated in this Agreement by
reference and made a part hereof. This Option is intended to be a non-statutory
stock option under the Internal Revenue Code of 1986, as amended.
2. Exercisability and Vesting of Option. The Option may be exercised only
to the extent the Option Shares shall have vested in accordance with this
Agreement. The Option Shares will vest and become exercisable in accordance with
the schedule set forth on the first page of this Agreement, provided that on
each vesting date you are then, and have been since the Grant Date, continuously
employed by the Company or an "Affiliated Employer". Notwithstanding the
foregoing, you shall become fully vested in the Option Shares prior to the
vesting date set forth on the first page of this Agreement in the event of a
Change in Control, as that event is defined in the Plan, that occurs prior to
the date on which you cease to be an employee of the Company or an Affiliated
Employer. The date on which you cease to be an employee of the Company or an
Affiliated Employer is defined as your "Employment Termination Date". For
purposes of this Agreement, an "Affiliated Employer" shall mean a subsidiary of
the Company of which the Company owns more than 50% of the outstanding common
stock. Upon your Employment Termination Date, all Option Shares that have not
previously vested prior to that date, shall be immediately forfeited to the
Company and cancelled.
3. Termination of Option. The date on which the Option shall terminate in
whole or in part as provided in this Section 3 is hereinafter referred to as the
"Option Termination Date." This Option shall terminate on the date which is the
earliest of:
(a) the Expiration Date of the Option set forth on page 1 of this
Agreement; or
(b) three months after your Employment Termination Date if the Employment
Termination Date occurs for any reason other than the reasons specified in
Sections 3(c), 3(d) or 3(e).; or
(c) one year after your Employment Termination Date if the Employment
Termination Date occurs by reason of your death or disability. For purposes of
this Agreement, "disability" shall mean that you are receiving disability
benefits under the Company's Long Term Disability Coverage, as then in effect,
on the Employment Termination Date; or
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(d) two years after your Employment Termination Date if the Employment
Termination Date occurs by reason of your retirement. For purposes of this
Agreement, (i) if you are a non-employee director of the Company, then
"retirement" shall mean the date on which you cease to serve as a director of
the Company, and (ii) if you are an employee of the Company or an Affiliated
Employer, then "retirement" shall mean the termination of your employment with
the Company or an Affiliated Employer after age 55 and the completion of 10
years of continuous service to the Company or an Affiliated Employer comprising
at least 20 hours per week; or
(e) the date of the dissolution or liquidation of the Company.
4. No Assignment of Rights. Except for assignments or transfers by will or
the applicable laws of descent and distribution, your rights and interests under
this Agreement and the Plan may not be assigned or transferred in whole or in
part either directly or by operation of law or otherwise, including without
limitation by way of execution, levy, garnishment, attachment, pledge or
bankruptcy, and no such rights or interests shall be subject to any of your
obligations or liabilities.
5. Exercise of Option; Delivery and Deposit of Certificate(s). You (or in
the case of your death, your legal representative) may exercise the Option (to
the extent the Option Shares have vested) in whole or in part by giving written
notice to the Company on the form provided by the Company (the "Exercise
Notice") prior to the Option Termination Date, accompanied by full payment for
the Option Shares being purchased (a) in cash or by certified or bank cashier's
check payable to the order of the Company, in an amount equal to the number of
Option Shares being purchased multiplied by the Exercise Price (the "Aggregate
Exercise Price"), (b) in unrestricted shares of the Company's Common Stock (the
"Tendered Shares") with a market value equal to the Aggregate Exercise Price or
(c) any combination of cash, certified or bank cashier's check or Tendered
Shares having a total value equal to the Aggregate Exercise Price (such cash,
check or Tendered Shares with such value being referred to as the "Exercise
Consideration"). However, Tendered Shares that were acquired directly from the
Company may be surrendered as all or part of the Exercise Consideration only if
you shall have acquired such Tendered Shares more than six months prior to the
date of exercise. Receipt by the Company of the Exercise Notice and the Exercise
Consideration shall constitute the exercise of the Option or a part thereof. As
soon as reasonably practicable thereafter, the Company shall deliver or cause to
be delivered to you a certificate or certificates representing the number of
Option Shares purchased, registered in your name.
6. Rights With Respect to Option Shares. Prior to the date the Option is
exercised, you shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the Option Shares. Upon initial issuance to you
of a certificate or certificates representing Option Shares, you shall have
ownership of such Option Shares, including the right to vote and receive
dividends, subject, however, to the other restrictions and limitations imposed
3
thereon pursuant to the Plan and this Agreement and which may be now or
hereafter imposed by the Certificate of Incorporation or the By-Laws of the
Company.
7. Dilution and Other Adjustments. In the event of a stock dividend, stock
split or combination of shares, or other distribution with respect to holders of
Common Stock other than normal cash dividends, occurring after the date of this
Agreement and prior to the exercise in full of the Option, the committee
appointed by the Company's Board of Directors to administer the Plan (the
"Committee") shall make appropriate adjustments to the number of shares for
which the Option may be exercised and the Exercise Price for the Option. In the
event of any recapitalization, merger or consolidation involving the Company,
any transaction in which the Company becomes a subsidiary of another entity, any
sale or other disposition of all or a substantial portion of the assets of the
Company or any similar transaction, as determined by the Committee, (any of the
foregoing, a "covered transaction") occuring while the option is outstanding,
the Committee in its discretion may (i) accelerate the exercisability of the
Option, or (ii) adjust the terms of the Option (whether or not in a manner that
complies with the requirements of Section 424(a) of the Internal Revenue Code of
1986, as amended (the "Code")), or (iii) if there is a survivor or acquiror
entity, provide for the assumption of the Option by such survivor or acquiror or
an affiliate thereof or for the grant of one or more replacement options by such
survivor or acquiror or an affiliate thereof, in each case on such terms (which
may, but need not, comply with the requirements of Section 424(a) of the Code)
as the Committee may determine, or (iv) terminate the Option (provided, that if
the Committee terminates the Option, it shall, in connection therewith, either
(A) accelerate the exercisability of the Option prior to such termination, or
(B) provide for a payment to the holder of the Option of cash or other property
or a combination of cash or other property in an amount reasonably determined by
the Committee to approximate the value of the Option assuming an exercise
immediately prior to the transaction, or (C) if there is a survivor or acquiror
entity, provide for the grant of one or more replacement options pursuant to
clasue (iii) above), or (v) provide for none of, or any combination of, the
foregoing. No fraction of a share or fractional shares shall be purchasable or
deliverable under this Agreement.
8. Reservation of Shares. The Company shall at all times during the term of
this Agreement reserve and keep available such number of shares of the Common
Stock as will be sufficient to satisfy the requirements of this Agreement and
shall pay all fees and expenses necessarily incurred by the Company in
connection with this Agreement and the issuance of Option Shares.
9. Taxes. If the Company, in its sole discretion, determines that the
Company or any subsidiary of the Company or any other person has incurred or
will incur any liability to withhold any federal, state or local income or other
taxes by reason of the grant of the Option, the issuance of Option Shares to you
upon the exercise thereof or the lapse of any restrictions upon the Option
Shares, you will, promptly upon demand therefor by the Company or any such
subsidiary of the Company, pay to the Company or such subsidiary any amount
requested by it for the purpose of satisfying such liability. If the amount so
requested is not paid promptly, the Company may refuse to permit the issuance to
you of Option Shares and may, without further consent by you, have the right to
deduct such taxes from any payment of any kind otherwise due to you, the
Optionee, including but not limited to, the hold back from the shares to be
4
delivered pursuant to Section 5 of this Agreement of that number of shares
calculated to satisfy all federal, state, local or other applicable taxes
required to be withheld in connection with such exercise.
You may satisfy the minimum statutory withholding tax requirement (the
"Obligation") arising from exercise of all or a part of the Option by making an
election (an "Election") to have the Company withhold from the number of shares
to be issued upon exercise of the Option, or to otherwise tender to the Company,
that number of shares of Common Stock having a value equal to the amount of the
Obligation. The value of the shares to be withheld or tendered shall be based
upon the closing price of the Common Stock on the New York Stock Exchange on the
date that the amount of the Obligation shall be determined (the "Tax Date").
Each Election must be made at the time the Option is exercised or the Tax Date,
whichever is later. The Committee may disapprove of any Election or may suspend
or terminate the right to make Elections. An Election is irrevocable.
10. Determination of Rights. Any dispute or disagreement that may arise
under or as a result of or pursuant to the Plan or this Agreement shall be
determined by the committee appointed by the Company's Board of Directors to
administer the Plan (the "Committee"), in its sole discretion, and any decision
made by the Committee in good faith shall be conclusive on all parties. The
interpretation and construction by the Committee of any provision of, and the
determination of any question arising under, this Agreement, the Plan, or any
rule or regulation adopted pursuant to the Plan, shall be final and conclusive.
11. Limitation of Employment Rights. The Option confers upon you no right
to continue in the employ of the Company or an Affiliated Employer or interferes
in any way with the right of the Company or an Affiliated Employer to terminate
your employment at any time.
12. Communications. Any communication or notice required or permitted to be
given under this Agreement shall be in writing, and mailed by registered or
certified mail or delivered in hand, if to the Company to its Stock Option
Manager c/o Thermo Electron Corporation, 00 Xxxxx Xxxxxx, Xxxx Xxxxxx Xxx 0000,
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000, and if to you, to the address you shall last
have furnished to the Company, or such other address, in each case, as the
addressee shall have last provided in writing to the communicating party.
5
Exhibit B
EXECUTIVE RETENTION AGREEMENT
THIS AGREEMENT by and between THERMO ELECTRON CORPORATION, a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxx (the "Executive") is made as of
November 26, 2001 (the "Effective Date").
WHEREAS, the Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions
which it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its
stockholders; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that appropriate steps should be taken to reinforce and encourage the continued
employment and dedication of the Company's key personnel without distraction
from the possibility of a change in control of the Company and related events
and circumstances.
NOW, THEREFORE, as an inducement for and in consideration of the Executive
remaining in its employ, the Company agrees that the Executive shall receive the
severance benefits set forth in this Agreement in the event the Executive's
employment with the Company is terminated under the circumstances described
below subsequent to a Change in Control (as defined in Section 1.1).
1. Key Definitions.
As used herein, the following terms shall have the following respective
meanings:
1.1 "Change in Control" means an event or occurrence set forth in any
one or more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change in Control under one of such subsections
but is specifically exempted from another such subsection):
(a) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 40% or more of either (i) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition by the Company, (ii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
1
controlled by the Company, or (iii) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i) and (ii) of subsection (c) of
this Section 1.1; or
(b) such time as the Continuing Directors (as defined below) do
not constitute a majority of the Board (or, if applicable, the Board of
Directors of a successor corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (i) who was a member of the
Board on the date of the execution of this Agreement or (ii) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board; or
(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company in
one or a series of transactions (a "Business Combination"), unless, immediately
following such Business Combination, each of the following two conditions is
satisfied: (i) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of the
Company's assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (ii)
no Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 40% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors; or
(d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
1.2 "Change in Control Date" means the first date during the Term (as
defined in Section 2) on which a Change in Control occurs. Anything in this
2
Agreement to the contrary notwithstanding, if (a) a Change in Control occurs,
(b) the Executive's employment with the Company is terminated prior to the date
on which the Change in Control occurs, and (c) it is reasonably demonstrated by
the Executive that such termination of employment (i) was at the request of a
third party who has taken steps reasonably calculated to effect a Change in
Control or (ii) otherwise arose in connection with or in anticipation of a
Change in Control, then for all purposes of this Agreement the "Change in
Control Date" shall mean the date immediately prior to the date of such
termination of employment.
1.3 "Cause" means the Executive's willful engagement in illegal
conduct or gross misconduct after the Change in Control Date which is materially
and demonstrably injurious to the Company. For purposes of this Section 1.3, no
act or failure to act by the Executive shall be considered "willful" unless it
is done, or omitted to be done, in bad faith and without reasonable belief that
the Executive's action or omission was in the best interests of the Company.
1.4 "Good Reason" means the occurrence, without the Executive's
written consent, of any of the events or circumstances set forth in clauses (a)
through (g) below. Notwithstanding the occurrence of any such event or
circumstance, such occurrence shall not be deemed to constitute Good Reason if,
prior to the Date of Termination specified in the Notice of Termination (each as
defined in Section 3.2(a)) given by the Executive in respect thereof, such event
or circumstance has been fully corrected and the Executive has been reasonably
compensated for any losses or damages resulting therefrom (provided that such
right of correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Executive).
(a) the assignment to the Executive of duties inconsistent in any
material respect with the Executive's position (including status, offices,
titles and reporting requirements), authority or responsibilities in effect
immediately prior to the earliest to occur of (i) the Change in Control Date,
(ii) the date of the execution by the Company of the initial written agreement
or instrument providing for the Change in Control or (iii) the date of the
adoption by the Board of Directors of a resolution providing for the Change in
Control (with the earliest to occur of such dates referred to herein as the
"Measurement Date") or a material diminution in such position, authority or
responsibilities;
(b) a reduction in the Executive's annual base salary as in
effect on the Measurement Date or as the same was or may be increased thereafter
from time to time;
(c) the failure by the Company to (i) continue in effect any
material compensation or benefit plan or program (including without limitation
any life insurance, medical, health and accident or disability plan and any
vacation or automobile program or policy) (a "Benefit Plan") in which the
Executive participates or which is applicable to the Executive immediately prior
to the Measurement Date, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan or
program, (ii) continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable than
3
the basis existing immediately prior to the Measurement Date (iii) award cash
bonuses to the Executive in amounts and in a manner substantially consistent
with past practice in light of the Company's financial performance or (iv)
continue to provide any material fringe benefit enjoyed by Executive immediately
prior to the Measurement Date;
(d) a change by the Company in the location at which the
Executive performs his or her principal duties for the Company to a new location
that is both (i) outside a radius of 50 miles from the Executive's principal
residence immediately prior to the Measurement Date and (ii) more than 30 miles
from the location at which the Executive performed his or her principal duties
for the Company immediately prior to the Measurement Date; or a requirement by
the Company that the Executive travel on Company business to a substantially
greater extent than required immediately prior to the Measurement Date;
(e) the failure of the Company to obtain the agreement from any
successor to the Company to assume and agree to perform this Agreement, as
required by Section 6.1;
(f) a purported termination of the Executive's employment which
is not effected pursuant to a Notice of Termination satisfying the requirements
of Section 3.2(a); or
(g) any failure of the Company to pay or provide to the Executive
any portion of the Executive's compensation or benefits due under any Benefit
Plan within seven days of the date such compensation or benefits are due, or any
material breach by the Company of this Agreement or any employment agreement
with the Executive.
The Executive's right to terminate his or her employment for Good Reason
shall not be affected by the Executive's incapacity due to physical or mental
illness.
1.5 "Disability" means the Executive's absence from the full-time
performance of the Executive's duties with the Company for 180 consecutive
calendar days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive's legal
representative.
2. Term of Agreement. This Agreement, and all rights and obligations of the
parties hereunder, shall take effect upon the Effective Date and shall expire
upon the first to occur of (a) the expiration of the Term (as defined below) if
a Change in Control has not occurred during the Term, (b) the date 18 months
after the Change in Control Date, if the Executive is still employed by the
Company as of such later date, or (c) the fulfillment by the Company of all of
its obligations under Sections 4 and 5.2 if the Executive's employment with the
4
Company terminates within 18 months following the Change in Control Date. "Term"
shall mean the period commencing as of the Effective Date and continuing in
effect through December 31, 2003; provided, however, that commencing on January
1, 2003 and each January 1, thereafter, the Term shall be automatically extended
for one additional year unless, not later than 90 days prior to the scheduled
expiration of the Term (or any extension thereof), the Company shall have given
the Executive written notice that the Term will not be extended.
3. Employment Status; Termination Following Change in Control.
3.1 Not an Employment Contract. The Executive acknowledges that this
Agreement does not constitute a contract of employment or impose on the Company
any obligation to retain the Executive as an employee and that this Agreement
does not prevent the Executive from terminating employment at any time. If the
Executive's employment with the Company terminates for any reason and
subsequently a Change in Control shall occur, the Executive shall not be
entitled to any benefits hereunder except as otherwise provided pursuant to
Section 1.2.
3.2 Termination of Employment.
(a) If the Change in Control Date occurs during the Term, any
termination of the Executive's employment by the Company or by the Executive
within 18 months following the Change in Control Date (other than due to the
death of the Executive) shall be communicated by a written notice to the other
party hereto (the "Notice of Termination"), given in accordance with Section 7.
Any Notice of Termination shall: (i) indicate the specific termination provision
(if any) of this Agreement relied upon by the party giving such notice, (ii) to
the extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) specify the Date of
Termination (as defined below). The effective date of an employment termination
(the "Date of Termination") shall be the close of business on the date specified
in the Notice of Termination (which date may not be less than 15 days or more
than 120 days after the date of delivery of such Notice of Termination), in the
case of a termination other than one due to the Executive's death, or the date
of the Executive's death, as the case may be. In the event the Company fails to
satisfy the requirements of Section 3.2(a) regarding a Notice of Termination,
the purported termination of the Executive's employment pursuant to such Notice
of Termination shall not be effective for purposes of this Agreement.
(b) The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting any such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
5
(c) Any Notice of Termination for Cause given by the Company must
be given within 90 days of the occurrence of the event(s) or circumstance(s)
which constitute(s) Cause. Prior to any Notice of Termination for Cause being
given (and prior to any termination for Cause being effective), the Executive
shall be entitled to a hearing before the Board of Directors of the Company at
which the Executive's may, at the Executive's election, be represented by
counsel and at which the Executive shall have a reasonable opportunity to be
heard. Such hearing shall be held on not less than 15 days prior written notice
to the Executive stating the Board of Directors' intention to terminate the
Executive for Cause and stating in detail the particular event(s) or
circumstance(s) which the Board of Directors believes constitutes Cause for
termination.
(d) Any Notice of Termination for Good Reason given by the
Executive must be given within 90 days of the occurrence of the event(s) or
circumstance(s) which constitute(s) Good Reason.
4. Benefits to Executive.
4.1 Stock Acceleration. If the Change in Control Date occurs
during the Term, then, effective upon the Change in Control Date, (a) each
outstanding option to purchase shares of Common Stock of the Company held by the
Executive shall become immediately exercisable in full and will no longer be
subject to a right of repurchase by the Company and (b) each outstanding
restricted stock award shall be deemed to be fully vested and will no longer be
subject to a right of repurchase by the Company.
4.2 Compensation. If the Change in Control Date occurs during the
Term and the Executive's employment with the Company terminates within 18 months
following the Change in Control Date, the Executive shall be entitled to the
following benefits:
(a) Termination Without Cause or for Good Reason. If the
Executive's employment with the Company is terminated by the Company (other than
for Cause, Disability or Death) or by the Executive for Good Reason within 18
months following the Change in Control Date, then the Executive shall be
entitled to the following benefits:
(i) the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the following
amounts:
(1) the sum of (A) the Executive's base salary through
the Date of Termination, (B) the product of (x) the annual bonus paid or payable
(including any bonus or portion thereof which has been earned but deferred) for
the most recently completed fiscal year and (y) a fraction, the numerator of
which is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (C) the amount of any
compensation previously deferred by the Executive (together with any accrued
6
interest or earnings thereon) and any accrued vacation pay, in each case to the
extent not previously paid (the sum of the amounts described in clauses (A),
(B), and (C) shall be hereinafter referred to as the "Accrued Obligations"); and
(2) the amount equal to the sum of (x) the Executive's
highest annual base salary in any twelve-month period (on a rolling basis)
during the five-year period prior to the Change in Control Date and (y) the
Executive's highest annual bonus in any twelve-month period (on a rolling basis)
during the five-year period prior to the Change in Control Date.
(ii) for one year after the Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue to provide benefits to the
Executive and the Executive's family at least equal to those which would have
been provided to them if the Executive's employment had not been terminated, in
accordance with the applicable Benefit Plans in effect on the Measurement Date
or, if more favorable to the Executive and the Executive's family, in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies; provided, however, that if the Executive
becomes reemployed with another employer and is eligible to receive a particular
type of benefits (e.g., health insurance benefits) from such employer on terms
at least as favorable to the Executive and the Executive's family as those being
provided by the Company, then the Company shall no longer be required to provide
those particular benefits to the Executive and the Executive's family;
(iii) to the extent not previously paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is eligible to
receive following the Executive's termination of employment under any plan,
program, policy, practice, contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits"); and
(iv) for purposes of determining eligibility (but not the
time of commencement of benefits) of the Executive for retiree benefits to which
the Executive is entitled, the Executive shall be considered to have remained
employed by the Company until one year after the Date of Termination.
(b) Resignation without Good Reason; Termination for Death or
Disability. If the Executive voluntarily terminates his or her employment with
the Company within 18 months following the Change in Control Date, excluding a
termination for Good Reason, or if the Executive's employment with the Company
is terminated by reason of the Executive's death or Disability within 18 months
following the Change in Control Date, then the Company shall (i) pay the
Executive (or the Executive's estate, if applicable), in a lump sum in cash
within 30 days after the Date of Termination, the Accrued Obligations and (ii)
timely pay or provide to the Executive the Other Benefits.
7
(c) Termination for Cause. If the Company terminates the
Executive's employment with the Company for Cause within 18 months following the
Change in Control Date, then the Company shall (i) pay the Executive, in a lump
sum in cash within 30 days after the Date of Termination, the sum of (A) the
Executive's annual base salary through the Date of Termination and (B) the
amount of any compensation previously deferred by the Executive, in each case to
the extent not previously paid, and (ii) timely pay or provide to the Executive
the Other Benefits.
4.3 Taxes.
(a) In the event that the Company undergoes a "Change in
Ownership or Control" (as defined below), and thereafter, the Executive becomes
eligible to receive "Contingent Compensation Payments" (as defined below) the
Company shall, as soon as administratively feasible after the Executive becomes
so eligible determine and notify the Executive (with reasonable detail regarding
the basis for its determinations) (i) which of the payments or benefits due to
the Executive following such Change in Ownership or Control constitute
Contingent Compensation Payments, (ii) the amount, if any, of the excise tax
(the "Excise Tax") payable pursuant to Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), by the Executive with respect to such
Contingent Compensation Payment and (iii) the amount of the "Gross-Up Payment"
(as defined below) due to the Executive with respect to such Contingent
Compensation Payment. Within 30 days after delivery of such notice to the
Executive, the Executive shall deliver a response to the Company (the "Executive
Response") stating either (A) that the Executive agrees with the Company's
determination pursuant to the preceding sentence or (B) that the Executive
disagrees with such determination, in which case the Executive shall indicate
which payment and/or benefits should be characterized as a Contingent
Compensation Payment, the amount of the Excise Tax with respect to such
Contingent Compensation Payment and the amount of the Gross-Up Payment due to
the Executive with respect to such Contingent Compensation Payment. If the
Executive states in the Executive Response that the Executive agrees with the
Company's determination, the Company shall make the Gross-Up Payment to the
Executive within three business days following delivery to the Company of the
Executive Response. If the Executive states in the Executive Response that the
Executive disagrees with the Company's determination, then, for a period of 15
days following delivery of the Executive Response, the Executive and the Company
shall use good faith efforts to resolve such dispute. If such dispute is not
resolved within such 15-day period, such dispute shall be settled exclusively by
arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The Company shall, within
three business days following delivery to the Company of the Executive Response,
make to the Executive those Gross-Up Payments as to which there is no dispute
between the Company and the Executive regarding whether they should be made. The
balance of the Gross-Up Payments shall be made within three business days
following the resolution of such dispute. The amount of any payments to be made
to the Executive following the resolution of such dispute shall be increased by
8
the amount of the accrued interest thereon computed at the prime rate announced
from time to time by The Wall Street Journal compounded monthly from the date
that such payments originally were due. In the event that the Executive fails to
deliver an Executive Response on or before the required date, the Company's
initial determination shall be final.
(b) For purposes of this Section 4.3, the following terms shall
have the following respective meanings:
(i) "Change in Ownership or Control" shall mean a change in
the ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in accordance with
Section 280G(b)(2) of the Code.
(ii) "Contingent Compensation Payment" shall mean any
payment (or benefit) in the nature of compensation that is made or supplied to a
"disqualified individual" (as defined in Section 280G(c) of the Code) and that
is contingent (within the meaning of Section 280G(b)(2)(A)(i) of the Code) on a
Change in Ownership or Control of the Company.
(iii) "Gross-Up Payment" shall mean an amount equal to the
sum of (i) the amount of the Excise Tax payable with respect to a Contingent
Compensation Payment and (ii) the amount necessary to pay all additional taxes
imposed on (or economically borne by) the Executive (including the Excise Taxes,
state and federal income taxes and all applicable withholding taxes)
attributable to the receipt of such Gross-Up Payment. For purposes of the
preceding sentence, all taxes attributable to the receipt of the Gross-Up
Payment shall be computed assuming the application of the maximum tax rates
provided by law.
4.4 Outplacement Services. In the event the Executive is terminated by
the Company (other than for Cause, Disability or Death), or the Executive
terminates employment for Good Reason, within 18 months following the Change in
Control Date, the Company shall provide outplacement services through one or
more outside firms of the Executive's choosing up to an aggregate of $15,000,
with such services to extend until the earlier of (i) 12 months following the
termination of Executive's employment or (ii) the date the Executive secures
full time employment.
4.5 Mitigation. The Executive shall not be required to mitigate the
amount of any payment or benefits provided for in this Section 4 by seeking
other employment or otherwise. Further, except as provided in Section
4.2(a)(ii), the amount of any payment or benefits provided for in this Section 4
shall not be reduced by any compensation earned by the Executive as a result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company or otherwise.
9
5. Disputes.
5.1 Settlement of Disputes; Arbitration. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board of Directors of the Company and shall be in writing. Any denial by the
Board of Directors of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The
Board of Directors shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim. Any further dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
5.2 Expenses. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal, accounting and other fees and expenses which
the Executive may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by the Company, the Executive or others
regarding the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive regarding the amount of any payment or benefits
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.
6. Successors.
6.1 Successor to Company. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company expressly to
assume and agree to perform this Agreement 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 an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a breach of this Agreement and shall
constitute Good Reason if the Executive elects to terminate employment, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean the Company as defined above and any
successor to its business or assets as aforesaid which assumes and agrees to
perform this Agreement, by operation of law or otherwise.
6.2 Successor to Executive. This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amount would still be payable to
the Executive or the Executive's family hereunder if the Executive had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
10
7. Notice. All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable
nationwide overnight courier service, in each case addressed to the Company, at
00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx and to the Executive at the Executive's
principal residence as currently reflected on the Company's records (or to such
other address as either the Company or the Executive may have furnished to the
other in writing in accordance herewith). Any such notice, instruction or
communication shall be deemed to have been delivered five business days after it
is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service. Either party may give any notice, instruction or
other communication hereunder using any other means, but no such notice,
instruction or other communication shall be deemed to have been duly delivered
unless and until it actually is received by the party for whom it is intended.
8. Miscellaneous.
8.1 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
8.2 Injunctive Relief. The Company and the Executive agree that any
breach of this Agreement by the Company is likely to cause the Executive
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Executive
shall have the right to specific performance and injunctive relief.
8.3 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles.
8.4 Waivers. No waiver by the Executive at any time of any breach of,
or compliance with, any provision of this Agreement to be performed by the
Company shall be deemed a waiver of that or any other provision at any
subsequent time.
8.5 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but both of which together shall
constitute one and the same instrument.
8.6 Tax Withholding. Any payments provided for hereunder shall be paid
net of any applicable tax withholding required under federal, state or local
law.
8.7 Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
11
officer, employee or representative of any party hereto in respect of the
subject matter contained herein; and any prior agreement of the parties hereto
in respect of the subject matter contained herein is hereby terminated and
cancelled.
8.8 Amendments. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
THERMO ELECTRON CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President, General Counsel and
Secretary
EXECUTIVE
/s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
11
Exhibit C
THERMO ELECTRON CORPORATION
INDEMNIFICATION AGREEMENT
This Agreement, made and entered into as of the 26th day of November 2001,
("Agreement"), by and between Thermo Electron Corporation, a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxx ("Indemnitee"):
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to, and activities on behalf of, the corporation;
WHEREAS, uncertainties relating to the continued availability of adequate
directors and officers liability insurance ("D&O Insurance") and uncertainties
relating to indemnification have increased the difficulty of attracting and
retaining such persons;
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the difficulty in attracting and retaining such persons is detrimental to
the best interests of the Company's stockholders and that the Company should act
to assure such persons that there will be increased certainty of such protection
in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company to
obligate itself contractually to indemnify such persons so that they will serve
or continue to serve the Company free from undue concern that they will not be
so indemnified;
WHEREAS, Indemnitee is willing to serve, continue to serve and/or take on
additional service for or on behalf of the Company on the condition that he or
she be so indemnified and that such indemnification be so guaranteed;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services by Indemnitee. Indemnitee agrees to serve or continue to serve
as a director or officer of the Company. This Agreement shall not impose any
obligation on Indemnitee or the Company to continue Indemnitee's position with
the Company beyond any period otherwise applicable.
2. Indemnity. The Company shall indemnify, and shall advance Expenses (as
hereinafter defined) to, Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.
3. General. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by reason of his or her Corporate Status (as
hereinafter defined), Indemnitee is, or is threatened to be made, a party to any
threatened, pending, or completed action, suit, arbitration, alternative dispute
resolution proceeding, investigation, administrative hearing or other proceeding
whether civil, criminal, administrative or investigative (other than an action,
suit or proceeding covered by Section 4 hereof). Pursuant to this Section 3,
Indemnitee shall be indemnified against Expenses, judgments, penalties, fines
and/or amounts paid in settlement incurred by Indemnitee or on his or her behalf
in connection with such action, suit, arbitration, alternative dispute
resolution proceeding, investigation, administrative hearing or other proceeding
whether civil, criminal, administrative or investigative or any claim, issue or
matter therein and whether or not Indemnitee is made a party thereto, if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
4. Proceedings by or in the Right of the Company. In the case of any
threatened, pending or completed action, suit or proceeding by or in the right
of the Company, indemnification shall be made to the maximum extent permitted
under Delaware law.
5. Indemnification for Expenses of a Party who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his or her Corporate Status, a party to and is
successful, on the merits or otherwise, in any action, suit, arbitration,
alternative dispute resolution proceeding, investigation, administrative hearing
or other proceeding whether civil, criminal, administrative or investigative,
Indemnitee shall be indemnified against all Expenses incurred by Indemnitee or
on his or her behalf in connection therewith. If Indemnitee is not wholly
successful but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such action, suit, arbitration,
alternative dispute resolution proceeding, investigation, administrative hearing
or other proceeding whether civil, criminal, administrative or investigative,
the Company shall indemnify Indemnitee against all Expenses incurred by
Indemnitee or on his or her behalf in connection with each successfully resolved
claim, issue or matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter by dismissal, or withdrawal with or
without prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.
6. Advance of Expenses. The Company shall advance all Expenses incurred by
or on behalf of Indemnitee in connection with any action, suit, arbitration,
alternative dispute resolution proceeding, investigation, administrative hearing
or other proceeding involving his or her Corporate Status whether civil,
criminal, administrative or investigative within twenty (20) days after the
receipt by the Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or after final
disposition of such action, suit, arbitration, alternative dispute resolution
proceeding, investigation, administrative hearing or other proceeding whether
civil, criminal, administrative or investigative. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to
2
repay any Expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified against such Expenses, which undertaking shall
be accepted by or on behalf of the Company without reference to the financial
ability of Indemnitee to make repayment.
7. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee shall submit
to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 7(a) hereof, a determination, if required (but only to the extent
required) by applicable law as a precondition to payment, with respect to
Indemnitee's entitlement thereto shall be made in the specific case: (i) if a
Change in Control (as hereinafter defined) shall have occurred, by Independent
Counsel (as hereinafter defined) in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee (unless Indemnitee shall request that
such determination be made by the Board or the stockholders, in which case the
determination shall be made in the manner provided below in clauses (ii) or
(iii)); (ii) if a Change of Control shall not have occurred, (A) by the Board by
a majority vote of Disinterested Directors (as hereinafter defined), even if
less than a quorum, or (B) by a committee of Disinterested Directors designated
by a majority vote of Disinterested Directors, even if less than a quorum, or
(C) if the Disinterested Directors so direct, by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to Indemnitee
or (D) by the stockholders of the Company; or (iii) as provided in Section 8(b)
of this Agreement; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorney's fees and disbursements) incurred by
Indemnitee in so cooperating shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(c) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 7(b) of this Agreement, the
Independent Counsel shall be selected as provided in this Section 7(c). If a
Change of Control shall not have occurred, the Independent Counsel shall be
3
selected by the Board, and the Company shall give written notice to Indemnitee
advising him or her of the identity of the Independent Counsel so selected. If a
Change of Control shall have occurred, the Independent Counsel shall be selected
by Indemnitee (unless Indemnitee shall request that such selection be made by
the Board, in which event the preceding sentence shall apply), and Indemnitee
shall give written notice to the Company advising it of the identity of the
Independent Counsel so selected. In either event, Indemnitee or the Company, as
the case may be, may, within seven (7) days after such written notice of
selection shall have been given, deliver to the Company or to Indemnitee, as the
case may be, a written objection to such selection. Such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in Section 14 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. If such written objection is made, the Independent
Counsel so selected may not serve as Independent Counsel unless and until a
court has determined that such objection is without merit. If, within twenty
(20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 7(c), either the Company or Indemnitee may petition the Court
of Chancery of the State of Delaware or other court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
an objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Section 7(b) hereof. The Company shall pay reasonable
fees and expenses of Independent Counsel incurred in connection with its acting
in such capacity pursuant to Section 7(b) hereof. The Company shall pay any and
all reasonable fees and expenses incident to the procedures of this Section
7(c), regardless of the manner in which such Independent Counsel was selected or
appointed. Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section 9(a) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).
8. Presumptions and Effect of Certain Proceedings.
(a) If a Change of Control shall have occurred, in making a determination
with respect to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 7(a) of this Agreement, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 7
of this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made such determination within sixty (60) days after receipt by
the Company of the request therefor, the requisite determination of entitlement
4
to indemnification shall be deemed to have been made and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional thirty (30) days, if the person, persons or
entity making the determination with respect to entitlement to indemnification
in good faith requires such additional time for the obtaining or evaluating of
documentation and/or information relating thereto; and provided, further, that
the foregoing provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 7(b) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination the Board has resolved to submit such determination to the
stockholders for their consideration at an annual meeting thereof to be held
within one hundred twenty (120) days after such receipt and such determination
is made thereat, or (B) a special meeting of stockholders is called within
fifteen (15) days after such receipt for the purpose of making such
determination, such meeting is held for such purpose within one hundred five
(105) days after having been so called and such determination is made thereat,
or (ii) if the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 7(b) of this Agreement.
(c) The termination of any action, suit, arbitration, alternative dispute
resolution proceeding, investigation, administrative hearing or other proceeding
whether civil, criminal, administrative or investigative or of any claim, issue
or matter therein by judgment, order, settlement or conviction, or upon a plea
of nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of Indemnitee
to indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
action or proceeding, that Indemnitee had reasonable cause to believe that his
or her conduct was unlawful.
9. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 7 of
this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) the determination of entitlement to indemnification is
to be by Independent Counsel pursuant to Section 7(b) of this Agreement and such
determination shall not have been made and delivered in a written opinion within
ninety (90) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
5 of this Agreement within ten (10) days after receipt by the Company of a
written request therefor, or (v) payment of indemnification is not made within
ten (10) days after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 8 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of Indemnitee's entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his or her option, may
seek an award in arbitration to be conducted by a single arbitrator pursuant to
the rules of the American Arbitration Association. Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration within one
hundred eighty (180) days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 9(a). The Company
shall not oppose Indemnitee's right to seek any such adjudication or award in
arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 9
5
shall be conducted in all respects as a de novo trial, or arbitration, on the
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9 the Company shall
have the burden of proving that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 7 or 8 of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(e) In the event that Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce Indemnitee's
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all expenses (of the types described in the definition
of Expenses in Section 14 of this Agreement) actually and reasonably incurred by
him or her in such judicial adjudication or arbitration, but only if Indemnitee
prevails therein. If it shall be determined in said judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be
appropriately prorated.
6
10. Security. To the extent requested by Indemnitee and approved by the
Board, the Company shall at any time and from time to time provide security to
Indemnitee for the Company's obligations hereunder through an irrevocable bank
line of credit, funded trust or other collateral. Any such security, once
provided to Indemnitee, may not be revoked or released without the prior written
consent of Indemnitee.
11. Non-Exclusivity; Duration of Agreement; Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement of Expenses as
provided by this Agreement are in addition to and shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under
applicable law, the Company's certificate of incorporation or by-laws, any other
agreement, a vote of stockholders or a resolution of directors, or otherwise.
Without limiting the foregoing, the Company shall indemnify Indemnitee to the
fullest extent permitted under Delaware law. This Agreement shall continue until
and terminate upon the later of (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director or officer of the Company or
director, officer or other fiduciary of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise which Indemnitee
served at the request of the Company; or (b) the final termination of all
pending actions, suits, arbitrations, alternative dispute resolution
proceedings, investigations, administrative hearings or other proceedings
whether civil, criminal, administrative or investigative in respect of which
Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 9 of
this Agreement relating thereto. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of
Indemnitee and his or her heirs, executors and administrators.
(b) To the extent that the Company maintains D&O Insurance, Indemnitee
shall be covered by such D&O Insurance in accordance with its terms to the
maximum extent of the coverage available for any director or officer under such
policy or policies.
(c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
12. Severability; Reformation. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each portion of any
Section of this Agreement containing any such provision held to be invalid,
7
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (b) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or unenforceable.
13. Exception to Right of Indemnification or Advancement of Expenses.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any action, suit or proceeding, or any claim therein, initiated,
brought or made by Indemnitee (i) against the Company, unless a Change in
Control shall have occurred, or (ii) against any person other than the Company,
unless approved in advance by the Board.
14. Definitions. For purposes of this Agreement:
(a) "Change in Control" means an event or occurrence set forth in any one
or more of subsection (i) through (iv) below (including an event or occurrence
that constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):
(i) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 40% or more of either (A) the then-outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock") or (B)
the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change in
Control: (A) any acquisition by the Company, (B) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or (C) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (A) and (B) of subsection (iii) of this Section 14(a); or
(ii) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board (or, if applicable, the Board of
Directors of a successor corporation to the Company), where the term
"Continuing Director" means at any date a member of the Board (A) who was a
member of the Board on September 23, 1999 or (B) who was nominated or
elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election;
provided, however, that there shall be excluded form this clause (B) any
8
individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies
or consents, by or on behalf of a person other than the Board; or
(iii) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a
sale or other disposition of all or substantially all of the assets of the
Company in one or a series of transactions (a "Business Combination"),
unless, immediately following such Business Combination, each of the
following two conditions is satisfied: (A) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of the then-outstanding shares of common stock
and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the
resulting or acquiring corporation in such Business Combination (which
shall include, without limitation, a corporation which as a result of such
transaction owns the Company or substantially all of the Company's assets
either directly or through one or more subsidiaries) (such resulting or
acquiring corporation is referred to herein as the "Acquiring Corporation")
in substantially the same proportions as their ownership, immediately prior
to such Business Combination, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, respectively; and (B) no Person
(excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 40% or more of the
then outstanding shares of common stock of the Acquiring Corporation, or of
the combined voting power of the then-outstanding securities of such
corporation entitled to vote generally in the election of directors; or
(iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company; or
(b) "Corporate Status" describes the status of a person who is or was or
has agreed to become a director of the Company, or is or was an officer or
fiduciary of the Company or a director, officer or fiduciary of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the request of the Company.
(c) "Disinterested Director" means a director of the Company who is not and
was not a party to the action, suit, arbitration, alternative dispute resolution
proceeding, investigation, administrative hearing or any other proceeding
whether civil, criminal, administrative or investigative in respect of which
indemnification is sought by Indemnitee.
9
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees and expenses of experts, including but not
limited to fees and expenses of investment bankers and/or consultants which the
Company has authorized Indemnitee to hire and attorneys for such experts, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, deliver service fees, a reasonable per diem fee to compensate
Indemnitee for his or her professional time and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend or investigating an action, suit,
arbitration, alternative dispute resolution proceeding, investigation,
administrative hearing or any other proceeding whether civil, criminal,
administrative or investigative.
(e) "Independent Counsel" means a law firm, with over 100 lawyers, that is
experienced in matters of corporation law and neither currently is, nor in the
past five years has been, retained to represent: (i) the Company (including any
subsidiary thereof) or Indemnitee in any matter material to either such party or
(ii) any other party to the action, suit, arbitration, alternative dispute
resolution proceeding, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative giving rise
to a claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee's rights under this Agreement.
15. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
16. Modification and Waiver. This Agreement may be amended from time to
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
17. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company
in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any matter which may be
subject to indemnification or advancement of Expenses covered hereunder;
provided, however, that the failure to give any such notice shall not disqualify
Indemnitee from indemnification hereunder.
18. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
10
(a) If to Indemnitee, to: The address shown beneath his or her
signature on the last page hereof
(b) If to the Company to: Thermo Electron Corporation
00 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attn: Corporate Secretary
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
19. Governing Law. The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware.
20. Entire Agreement. This agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto in respect of the subject matter contained
herein; and any prior agreement of the parties hereto in respect of the subject
matter contained herein is hereby terminated and cancelled.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
Attest: THERMO ELECTRON CORPORATION
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxxx
----------------------- ----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President, General Counsel
and Secretary
INDEMNITEE
/s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
Address: 000 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
11
Exhibit D
Thermo Electron Corporation [logo]
COMPANY INFORMATION AND INVENTION AGREEMENT
In consideration and as a condition of my employment, or if now employed,
the continuation of my employment by Thermo Electron Corporation or a subsidiary
thereof (hereinafter collectively called the "Company") and the compensation
paid therefor:
1. I agree not to disclose to others or use for my own benefit during my
employment by the Company or thereafter any trade secrets or Company
private information pertaining to any of the actual or anticipated business
of the Company or any of its customers, consultants, or licensees acquired
by me during the period of my employment, except to such an extent as may
be necessary in the ordinary course of performing my particular duties as
an employee of the Company.
2. I agree not to disclose to the Company, or to induce the Company to use,
any confidential information or material belonging to others.
3. I understand that the making of inventions, improvements, and discoveries
is one of the incidents of my employment, or that if not I may nonetheless
make inventions while employed by the Company, and I agree to assign to
Thermo Electron Corporation or its nominee my entire right, title, and
interest in any invention, idea, device, or process, whether patentable or
not, hereafter made or conceived by me solely or jointly with others during
the period of my employment by the Company in an executive, managerial,
planning, technical, research, engineering, or other capacity and which
relates in any manner to the business of the Company, or relates to its
actual or planned research or development, or is suggested or results from
any task assigned to me or work performed by me for or in behalf of the
Company, except any invention or idea which cannot be assigned by the
Company because of a prior agreement with ___none___________________
effective until __________________________ (give name and date or write
"none").
4. I agree, in connection with any invention, idea, device, or process covered
by paragraph 3:
a) To disclose it promptly in writing to the proper officers or attorney
of the Company.
b) To execute promptly, on request, patent applications and assignments
thereof to Thermo Electron or its nominees and to assist the Company
in any reasonable manner to enable it to secure a patent therefor in
the United States and any foreign countries, all without further
compensation except as provided herein.
5. I further agree that all papers and records of every kind relating to any
invention or improvement included with the terms of the Agreement, which
shall at any time come into my possession shall be the sole and exclusive
property of the Company and shall be surrendered to the Company or upon
request at any other time either during or after the termination of such
employment.
6. I further agree that the obligations and undertakings stated above in
paragraph 4b shall continue beyond the termination of my employment by the
Company, but if I am called upon to render such assistance after the
termination of my employment, then I shall be entitled to a fair and
reasonable per diem in addition to reimbursement of any expenses incurred
at the request of the Company.
7. I agree to identify in an attachment to this Agreement all inventions or
ideas related to the business or actual or planned research or development
of the Company in which I have right, title, or interest, and which were
conceived either wholly or in part by me prior to my employment by the
Company but neither published nor filed in the U.S. Patent and Trademark
Office.
8. I understand that this Agreement supersedes any agreement previously
executed by me relating to the disclosure, assignment and patenting of
inventions, improvements, and discoveries made during my employment by the
Company. This Agreement shall inure to the benefits of the successors and
assigns of the Company and shall be binding upon my heirs, assigns,
administrators, and representatives.
9. I understand that this Agreement does not apply to an invention which
qualifies fully under the provisions of any statute or regulation which
renders unenforceable the required assignment or transfer of certain
inventions made by an employee such as, but not limited to, Section 2870 of
the California Labor Code.
/s/ Xxxx X. Xxxxxx
-----------------------------------
Employee
/s/ Xxxxxx X. Xxxxxx November 29, 2001
----------------------- -----------------------------------
Witness Date
THERMO ELECTRON CORPORATION
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxxx
----------------------- -----------------------------------
Witness Vice President, General Counsel and
Secretary
Date: November 29, 2001
Exhibit E
Thermo Electron Corporation [logo]
Thermo Electron Corporation
Corporate Office
Pre-employment Drug Testing Policy
At Thermo Electron Corporation, we are committed to providing a productive,
safe, and drug free workplace for our employees. As a result, an employment
offer is conditional upon an applicant's passing a pre-employment examination,
which includes the collection and testing of the applicant's urine specimen for
illegal drugs or controlled substances. Failure to pass the test will result in
rejection for employment.
The major drug and drug categories tested for include: amphetamines,
barbiturates, benzodiazepines, cocaine, marijuana, methadone, methaqualone,
opiates, phencyclidine, and propoxyphene. The testing is performed by a
reputable clinical laboratory accredited by the College of American Pathologist
(CAP). Comprehensive and strict procedures have been established to safeguard
confidentiality and privacy for prospective employees. When an initial test
result is positive (failing), two additional tests, (using the original
specimen) will be performed to confirm the test results.
The Human Resources department will notify applicants regarding the status of
their pre-employment medical examination. Applicants who receive conditional
employment offers are advised against giving notice to their current employer
until medical clearance has been received. Applicants who do not pass the
drug-screening test will be informed that they cannot be considered for
employment.
--------------------------------------------------------------------------------
I have read the foregoing and hereby authorize any company designated medical
examiner to conduct a drug screening test and provide the results to the
company, and I release the company and any designated institution or person from
any liability resulting from the medical examination.
Applicant's Name: Xxxx X. Xxxxxx
------------------------------------
Signature: /s/ Xxxx X. Xxxxxx Date: 11/21/01
------------------ -------------
Witness: /s/ Xxxxxx X. Xxxxxx
------------------------
Exhibit F
--------------------------------------
[Thermo Electron
Corporation logo] Title: Business Conduct Policies &
Policy Procedures
-------------------------------------------------------------------------------
Supersedes: Date: March 26, 1999 Total Pages:
July 1, 1988 4
No.
-------------------------------------------------------------------------------
BUSINESS CONDUCT POLICY
POLICY
It is the policy of Thermo Electron Corporation ("Thermo Electron" or the
"Company") to (i) require the highest standards of business ethics and integrity
on the part of all employees and (ii) to comply with all applicable laws and
regulations in the conduct of its business. To that end, Thermo Electron has
adopted and implemented this Business Conduct Policy.
The Company's management will vigorously enforce this Policy and will take
prompt and appropriate action, which could include termination, against any
employee found to be in violation.
The manager of each Thermo Electron operating unit is responsible for
providing every employee in his or her operating unit with a copy of the
Business Conduct Policy and establishing reasonable procedures to promote
compliance with such policy.
SCOPE
This policy applies to Thermo Electron Corporation and all of its worldwide
divisions, subsidiaries and affiliated companies.
I. CONFLICTS OF INTEREST
All employees are required to avoid any relationship with other individuals
or organizations that might impair, or even appear to impair, the proper
performance of their Company-related responsibilities. Employees must avoid any
situation that might affect their independence of judgment with respect to any
business dealings between the Company and any other organization or individual.
Any employee who believes that he or she may have such a conflict, whether
actual or potential, or who is aware of any conflict involving any other Company
employee, must report all pertinent details to his or her Division or other
corporate supervisor. A conflict of interest situation can arise in many ways,
some of which are set forth below.
A. Related-Party Transactions
Related-party transactions are those in which the parties do not deal with
one another at arm's length. They include, but are not limited to, any employee
of the Company who is in a position to influence a business transaction between
the Company and: (1) an individual who is his or her spouse, child, sibling,
parent, partner, present or former close business associate; (2) a non-Company
organization for which he or she currently serves as an officer, trustee or
partner, or for which he or she has recently served in such capacity; or (3) any
individual or organization with whom he or she is negotiating, or with whom he
or she has an arrangement, concerning prospective employment.
The Company should avoid significant related-party transactions. If any
employee believes that a significant related-party transaction exists or might
occur, he or she must make full disclosure to the appropriate executive. After
such full disclosure, the existing or potential conflict will be reviewed, and a
decision will be made about whether the related-party transaction is
appropriate, and whether the Company should proceed with the transaction.
B. Outside Business Interests
Employees are expected to give their full and undivided attention to their
Company duties. They should not use Company facilities or their association with
the Company to carry on a private business or profession. Unless express
approval is obtained in advance from his or her direct supervisor, employees
shall not engage in a profit-making business, or become involved with a
nonprofit organization, outside of their employment with the Company, if such
business or organization:
o Provides goods, services or assistance to a competitor, customer
or supplier of the Company; or
o Interferes with the employee's assigned duties at the Company.
2
C. Acceptance of Costly Entertainment or Gifts
Employees are prohibited from accepting or giving costly entertainment or
gifts from or to suppliers, competitors or customers; such situations may create
either a conflict or the appearance of a conflict between the interests of the
employee and the Company. Where acceptance of such a gift is unavoidable because
of local custom, the employee must report the matter to his or her direct
supervisor so a determination can be made concerning the extent to which such a
gift can be considered the personal property of the recipient.
D. Confidential Business Information
Confidential business information is information acquired by Company
employees as a result of their position with the Company, which pertains to the
Company, and which has not been disclosed to the public. The Company has
proprietary rights to such confidential business information. Therefore,
employees are prohibited from using such confidential business information for
their financial gain, for the financial gain of any other person, or to obtain a
benefit of any kind.
All Company employees are prohibited from engaging, or assisting others in
engaging, in any transactions involving the securities of the Company, or the
securities of any other entity with whom the Company is engaged, or with whom it
will be engaged, in a business transaction, while in possession of any material
confidential information about the Company or the other entity. Such acts may
constitute violations of the law and could result in criminal prosecution of the
individual and the Company, or result in serious fines or penalties.
II. COMPLIANCE WITH LAWS
All Company employees are prohibited from engaging in any transaction or
matter on behalf of the Company which would violate any applicable law or
regulation.
III. USE OF COMPANY FUNDS
The use of Company funds for any unlawful or unethical purpose is strictly
prohibited. Employees are prohibited from making, or causing others to make, any
illegal payment to anyone within the United States, or to any officials of any
foreign government, including for the purpose of advancing, promoting or
expediting Company interests. Such prohibited payments include money, favors,
gifts, entertainment, or use of Company facilities. Similarly, all employees
also must be careful that any acts of hospitality toward public officials and
Government employees avoid compromising the integrity or the reputation of the
Company or the public official or Government employee.
IV. POLITICAL CONTRIBUTIONS
Political contributions to U.S. federal election campaigns made directly or
indirectly from Company funds are prohibited. The legality of political
3
contributions to state, local or foreign campaigns or causes must be determined
on a jurisdiction-by-jurisdiction basis and, therefore, must be approved in
advance by the Corporate Legal Department. Political contributions include any
donation, gift, or loan of Company funds, assets, or property, directly or
indirectly, to or for the benefit of any political party, committee, or
candidate, and any use of Company funds, assets, or property, directly or
indirectly to oppose or support any Government or subdivision thereof, or to
oppose or to support any candidate or office-holder. This includes: (a)
donations, gifts, or loans of funds, assets or property which are made by
employees or third persons, such as agents, or consultants, who are reimbursed
in any way by the Company; (b) the uncompensated use of Company services,
facilities, or property; and (c) loans, loan guarantees or other extensions of
credit.
V. CONSULTANTS AND REPRESENTATIVES
Consultants and representatives shall only be retained for proper
commercial purposes and in accordance with Company policy. Compensation for
consultants and representatives shall be comparable to that customarily paid in
the locale and commensurate with the nature and scope of the service.
VI. PROPER ACCOUNTING
Compliance with accepted accounting rules and internal accounting controls
is required at all times. The books and accounts, documentation supporting the
disbursement of funds, and all other Company financial records must accurately
and fairly reflect all transactions.
VII. ADMINISTRATION AND INTERPRETATION
Considering the complexity of this Business Conduct Policy, and the
determination of the Company's management and Board of Directors to comply with
both the letter and spirit of all applicable laws and regulations, it is
recognized that questions of interpretation will arise. All questions relating
to these policies are to be addressed to your direct supervisor who shall
consult with other officers, as appropriate.
VIII. COMPLIANCE LINE
Employees of all Thermo Electron companies, subsidiaries, and divisions who
observe or suspect a violation of law, regulation, or Thermo Electron Policies
and Procedures, may contact Thermo Electron's Compliance Line. Specific
information related to the Compliance Line may be found in the Compliance Line
Policy attached to this Policy as Appendix A.
4
Appendix A
THERMO ELECTRON COMPLIANCE LINE
Policy
Thermo Electron is committed to compliance with the laws that affect the
conduct of our business and to the highest standards of business ethics and
integrity. In order to help ensure compliance with the law and Company policies,
Thermo Electron has instituted a "hot-line" for employees of all Thermo Electron
companies to use to report conduct that might involve illegality or other
violations of the Thermo Electron Policies and Procedures.
Scope
This policy applies to employees of all Thermo Electron Corporation and all
of its worldwide divisions, subsidiaries, and affiliated companies.
Procedures
If an employee observes or suspects a violation of a law or regulation or
other elements of the Thermo Electron Policies and Procedures, the employee may
contact the Compliance Line. The Compliance Line may be reached by telephone
toll-free in the United States at 0-000-000-0000. For employees located outside
of the U.S., the telephone number for the Compliance Line is 000-000-0000. The
Compliance Line staff will take your calls between 9 a.m. and 5 p.m. Eastern
Time. After normal business hours, you may leave a voice mail message at the
same numbers and the Compliance Line staff will return your call. If you prefer
to contact the Compliance Line in writing, the address is:
Thermo Electron Corporation
Attn: Compliance Line
P.O. Box 9046
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
All calls will be documented by the Compliance Line staff, and then the
subject is referred to Thermo Electron's Legal Department, which determines
whether an investigation is appropriate. Callers may remain anonymous. Calls
will be treated confidentially to the extent it is legally permissible to do so.
Callers to the Compliance Line should be prepared to describe the situation
as completely as they can, including dates, names, facilities and/or departments
involved, and names of other employees who would provide additional information.
Callers should contact the Compliance Line even if they do not have all of the
facts or if they are unsure if there is a problem. The Compliance Line staff, in
conjunction with the Thermo Electron Legal Department, will look into the
information provided, attempt to verify it, and take appropriate action.
Contact the Compliance Line to report possible violations related to, among
other things:
Environmental Laws
Health and Safety Laws
Antitrust Laws
Export/Import Laws
Food and Drug Laws
Government Contracts Laws
Theft, Bribes, and Kickbacks
Fraudulent Transactions
Conflicts of Interest
Xxxxxxx Xxxxxxx and Other Securities Laws
Improper Political Contributions
Violations of the Thermo Electron Policies and Procedures,
Including the Business Conduct Policy
Because each company, subsidiary, and division already has extensive
compliance procedures for employment issues relating to age, race, color,
national origin, religion, sex, and handicap, it is not expected that the
Compliance Line will normally be used to resolve such issues. The Compliance
Line should not be contacted in lieu of an employee's local human resources
department for employment-based issues.
July 16, 1999
All Employees of Thermo Electron Corporation and Subsidiaries
Re: Thermo Electron Business Conduct Policy
Since its organization in 1956, Thermo Electron Corporation has required
the highest standards of business ethics and integrity of its employees. Our
adherence to strict ethical standards has contributed directly to the success of
our Company.
Thermo Electron has grown significantly, both through internal expansion
and through the addition of acquired companies. This growth means that large
numbers of new employees are joining us who may be unfamiliar with the conduct
expected of all Thermo Electron employees.
It is necessary, therefore, to emphasize from time to time the ethical
standards that we strive to maintain. These standards are reflected in this
Business Conduct Policy. I ask you to read the Policy carefully and to review
the rules that it sets forth, not as impediments to your job, but as necessary
components of your success as an employee and Thermo Electron's success as a
company. The simple fact is that only people and companies that do the right
thing do well in business over the long run.
Please remember that no set of rules can cover all possible situations. Nor
can we foresee future changes, in our business or in society. The Business
Conduct Policy is intended as a guide in the performance of your job. But, in
the end, we rely on you to apply these guidelines in good faith to the best of
your ability.
It is my practice to maintain an "open door" for any employee who has
concerns about Company practices that the employee is unable to resolve with his
or her supervisors. We have established a "Compliance Line" where employees with
concerns about possible improper behavior may call toll free. The Compliance
Line Policy is attached to the Business Conduct Policy as Appendix A. Despite
the existence of the Compliance Line, please feel free to communicate with your
Company President or me in writing, on an anonymous basis if you wish, to
discuss any matter pertaining to the Business Conduct Policy. Let me conclude by
reiterating that I strongly believe that high ethical standards are an absolute
necessity for success and that I appreciate in advance your help in making sure
we follow that approach.
Sincerely,
/S/
Xxxxxxx X. Xxxxx
President and Chief Executive Officer
Exhibit G
Thermo Electron Corporation [logo]
THERMO ELECTRON CORPORATION
POLICY ON DRUGS AND ALCOHOL IN THE WORKPLACE
We wish to alert employees to the dangers of drug and alcohol abuse in the
workplace. These include the potential for workplace accidents and failures that
can pose a serious threat to the health and safety of the employee and others.
Drug and alcohol abuse affects an employee's reliability, stability, and good
judgement necessary for the safe performance of work for the Company. Improper
use of alcohol, controlled substances, or illegal drugs increases the
possibility of workplace thefts and of outside pressure and coercion that can
pose a serious risk to an employee's health, safety, and financial security.
Problems of productivity, reliability, and absenteeism can reduce an employee's
work effectiveness and result in job loss.
POLICY ON DRUGS AND ALCOHOL IN THE WORK PLACE
It is the Company's policy to maintain a productive and safe workplace free from
the influence of alcohol, controlled substances, or illegal drugs. A drug and
alcohol awareness program will be conducted periodically to inform employees
about the dangers of workplace drug and alcohol abuse, the terms of the
Company's policy, the availability of counseling and rehabilitation services,
and the penalties that may be imposed on employees for drug or alcohol abuse
violations. Employees who perform work on government contracts or pursuant to
government grants are required to sign a statement that they have received a
copy of the Company's policy and that they will abide by its terms.
REHABILITATION PROGRAMS
Drug and alcohol abuse rehabilitation and assistance programs are available
through the Company's medical insurance program. Employees with drug or alcohol
abuse problems are strongly encouraged to participate in these programs.
DISCIPLINE AND DISCHARGE
In accordance with federal funding and contracting requirements, the Company
strictly prohibits the unlawful manufacture, distribution, dispensation,
possession, or use of alcohol by any employee on Company premises or vehicles
during working hours. Use of alcohol, illegal drugs, or controlled substances
that affects workplace performance or conduct is likewise prohibited.
Violation of this policy will result in appropriate discipline, up to and
including immediate discharge. Employees are cautioned that discipline under
this policy may include participation in a drug or alcohol rehabilitation or
assistance program as a condition of continued employment.
NOTICE OF CONVICTION
Any employee who is convicted of violating criminal drug statute for conduct
occurring in or near the workplace must notify the Company no later that five
days after conviction. Failure to notify the Company in a timely manner will
result in discharge.
We regret the necessity of these types of precautions, but the protection of our
employees, property, and general public certainly warrants such action.
