Exhibit 99
AGREEMENT
This Agreement is made as of the 10th day of October 1996
between Thermo Electron Corporation, a Delaware corporation (the
"Company"), and Thermo Instrument Systems Inc., a Delaware
corporation ("THI").
RECITALS
The Company currently files consolidated U.S. federal tax
returns with THI. The Company may continue to consolidate U.S.
federal tax returns with THI provided that the Company
continuously maintains ownership of at least 80% of THI's
outstanding Common Stock. If the Company owns at any time less
than 80% of THI's outstanding Common Stock, THI would be required
to file a separate U.S. federal tax return. This deconsolidation
could have a significant adverse impact on the Company.
THI has proposed to issue up to $200 million principal
amount of senior convertible debentures (the "Debentures"), to be
guaranteed by the Company. The Board of Directors believes that
the issuance of the Debentures by THI is in the best interests of
the Company and THI. However, conversion of these debentures
into THI Common Stock would increase the number of shares of THI
Common Stock outstanding, thereby diluting the Company's
ownership of THI, potentially below 80%. To allow THI to issue
the Debentures, while protecting the ability of the Company and
THI to consolidate for U.S. federal tax purposes, the Board of
Directors of the Company believes that it is in the best interest
of the Company and THI to incorporate in the Debentures an option
that permits the delivery by THI of shares of the Company's
Common Stock upon conversion of Debentures, in lieu of shares of
THI Common Stock otherwise issuable upon such conversion (the
"Settlement Option"). To facilitate THI's exercise of such
option, the Board of Directors of the Company has authorized the
issuance of up to 5,000,000 shares of the Company's Common Stock
(the "Shares").
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Notice from THI. The Company shall sell Shares to THI
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on any one or more occasions if THI determines that the purchase
of such Shares is needed to allow THI to exercise the Settlement
Option. THI may offer to purchase Shares by delivering a notice
to the Chief Financial Officer and the Secretary of the Company,
specifying the number of Shares that THI desires to purchase.
The offer to purchase Shares by THI shall be irrevocable and
shall be deemed accepted by the Company upon its receipt thereof.
The date upon which the Company receives such notice is referred
to herein as the "Notice Date."
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2. Purchase Price. The purchase price for any Shares sold
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under this Agreement shall equal the average of the closing
prices for the Company's Common Stock on the New York Stock
Exchange for the five trading days immediately preceding the
Notice Date. On the Notice Date, THI shall deliver the purchase
price for the Shares to the Company by check or other method
acceptable to the Company. The Company shall deliver to THI a
certificate representing the purchased Shares in such name or
names as THI shall request as soon as practicable following the
Notice Date.
3. Listing. No Shares may be issued or sold under this
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Agreement unless and until such Shares have been accepted for
listing on the New York Stock Exchange. The Company shall use
its best efforts to effect such listing prior to January 1, 1997.
4. Registration. The delivery of the Shares to holders of
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Debentures upon THI's exercise of the Settlement Option shall be
registered by the Company under the Securities Act of 1933 (the
"Act"). The Company shall use its best efforts to cause such
registration to become effective prior to January 1, 1997. The
Company shall indemnify and hold harmless THI and its directors,
officers and employees against all losses, claims or damages to
which they may become subject insofar as such losses, claims or
damages arise out of or are based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the
registration statement pertaining to the Shares or (ii) any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, unless such statements or omissions
relate to THI.
5. Adjustment. If, as a result of any stock dividend,
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stock split, reverse stock split or other similar transaction,
the number of outstanding shares of Company Common Stock is
increased or decreased, then an appropriate and proportionate
adjustment shall be made in the number of Shares subject to this
Agreement.
6. Term. This Agreement shall be effective until the
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sooner to occur of (i) October 15, 2003 or (ii) five business
days following the date upon which the Debentures are redeemed by
the Company.
7. Amendment. This Agreement may be amended only by the
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written agreement of the Company and THI.
THERMO ELECTRON CORPORATION THERMO INSTRUMENT SYSTEMS INC.
By: /s/ Xxxx X. Xxxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxx
