EX-10.23
CHANGE OF CONTROL AGREEMENT
EXHIBIT 10.23
May 8, 2001
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c/o FLIR Systems, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxxx, XX 00000
Re: Change of Control Agreement
Dear ______:
FLIR Systems, Inc., an Oregon corporation (the "Company"), considers the
establishment and maintenance of a sound and vital management to be essential to
protecting and enhancing the best interests of the Company and its shareholders.
To this end, the Company recognizes that, as is the case with many publicly held
corporations, the possibility of a Change of Control may exist and that such
possibility, and the uncertainty and questions that it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareholders. Accordingly, the Board of
Directors of the Company (the "`Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management to their assigned duties
without distraction in circumstances arising from the possibility of a Change of
Control of the Company.
To induce you to remain in the employ of the Company, this letter agreement
(Agreement) sets forth the severance benefits which the Company will provide to
you in the event your employment with the Company is terminated following a
Change of Control, as defined herein, under the circumstances described below.
1. Right to Terminate. The Company or you may terminate your employment at
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any time, subject to the Company's obligations to provide benefits under the
specified terms set forth in this Agreement.
2. Term of Agreement. The term of this Agreement is January 1, 2001, until
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December 31, 2003; provided, however, that this Agreement shall continue in
effect for a period of ninety (90) days beyond the stated term if a Change of
Control, as defined in Section 3 below, occurs during such term.
3. Change of Control. For the purpose of this Agreement, Change of Control
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means a merger or consolidation to which Company is a party if the individuals
and entities who were stockholders of Company immediately prior to the effective
date of such merger or consolidation have beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of less than fifty percent
(50%) of the total combined voting power for election of directors of the
surviving corporation immediately following the effective date of such merger or
consolidation.
4. Termination Following Change of Control. If a Change of Control occurs
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during the term of this Agreement and your employment terminates within sixty
(60) days before or ninety (90) days after the Change of Control, you will be
entitled to the benefits provided in Section 5 below unless such termination is
(a) due to your death or Disability, or (b) for Cause. For the purpose of this
Section 4, "Disability" means your inability to perform the duties of your
position under this Agreement for a continuous period of five (5) months, with
or without reasonable accommodation, because of a physical or mental impairment,
as determined by the Board. For the purpose of this Section 4, "Cause" means you
committed any one or more of the following: (i) theft, embezzlement, fraud,
misappropriation of funds, other acts of dishonesty or
the violation of any law or ethical rule relating to your employment by the
Company; (ii) a felony or any act involving moral turpitude for which you were
convicted or entered a plea of nolo contendere; (iii) a breach of any material
provision of this Agreement or any confidentiality agreement between you and the
Company, and if such violation or breach is susceptible of cure, the failure to
effect such cure within 30 days after written notice of such breach is given to
you; or (iv) a breach of your fiduciary duty to the Company.
5. Change of Control Benefits. In the event you become eligible for
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benefits under Section 4, all of your unvested stock options will immediately
vest and become exercisable and you will fully vest in the Company's
Supplemental Retirement Plan or any similar pension plan then in existence. In
addition, you will receive the following benefits, conditioned upon your signing
a release of claims in a form satisfactory to Company:
(a) a lump sum payment in an amount equal to two (2) times your
average annualized compensation, as defined by Section 280G of the Internal
Revenue Code, received by you from the Company and includible in your gross
income for federal income tax purposes for the two (2) most recent taxable years
ending before the date upon which the Change of Control occurred, payable upon
the earlier of 30 days or the expiration of any applicable revocation period
under the release; and
(b) until the earlier of 24 months and such time as you obtain
comparable benefits through employment or otherwise, (i) the Company will pay
the COBRA premiums for continuation of group health and dental insurance
coverage for you (and anyone entitled to claim under or through you), and (ii)
the Company will reimburse you for uninsured medical expenses incurred by you,
to the extent and under the same terms and conditions as such reimbursement was
available to you immediately prior to your termination.
6. Successors and Assigns. This Agreement shall be binding upon and inure
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to the benefit of the Company, each subsidiary and their respective successors
and assigns, and shall be binding upon you, your administrators, executors,
legatees, and heirs. In that this Agreement is a personal service contract, you
may not assign it.
7. Notices. All notices, requests and demands given to or made pursuant to
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this Agreement shall, except as otherwise specified herein, be in writing and be
delivered or mailed to any such party at its address as set forth in this
Agreement. Either party may change its address, by notice to the other party
given in the manner set forth in this Section. Any notice, if mailed properly
addressed, postage prepaid, registered or certified mail, shall be deemed
dispatched on the registered date or that stamped on the certified mail receipt,
and shall be deemed received within the third business day thereafter or when it
is actually received, whichever is sooner.
8. Captions. The various headings or captions in this Agreement are for
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convenience only and shall not affect the meaning or interpretation of this
Agreement.
9. Mediation. In the case of any dispute arising under this Agreement which
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cannot be settled by reasonable discussion, the parties agree that, prior to
commencing any proceeding as contemplated by Sections 10 and 11, they will first
engage the services of a professional mediator agreed upon by the parties and
attempt in good faith to resolve the dispute through confidential nonbinding
mediation. Each party shall bear one-half (1/2) of the mediator's fees and
expenses and shall pay all of its own attorneys' fees and expenses related to
the mediation.
10. Governing Law and Jurisdiction. The validity, construction and
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performance of this Agreement shall be governed by the laws of the State of
Oregon, which shall be the exclusive jurisdiction for any action to interpret or
enforce this Agreement.
11. Attorney Fees. In the event of any suit, action or arbitration to
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interpret or enforce this Agreement, the prevailing party shall be entitled to
recover its attorney fees, costs and out-of-pocket expenses at trial and on
appeal.
12. Construction. Wherever possible, each provision of this Agreement shall
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be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
12. Waivers. No failure on the part of either party to exercise, and no
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delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by any related document or by law.
13. Modification. This Agreement may not be modified or amended except by
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written instrument signed by the parties hereto.
14. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties and supersedes all prior or contemporaneous oral or written
understandings, agreements, statements, representations or promises with respect
to its subject matter. This Agreement was the subject of negotiation between the
parties and, therefore, the parties agree that the rule of construction
requiring that the agreement be construed against the drafter shall not apply to
the interpretation of this Agreement.
EXECUTIVE COMPANY
___________________ ________________________
By: ________________________
Title: ____________________
