Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the 11th day of July, 2000 by and
between Thermo Electron Corporation, a Delaware corporation (together with its
successors and assigns permitted under this Agreement, the "Company"), and Xx.
Xxxxxx Xxxxxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive and to enter into an
agreement embodying the terms of such employment (the "Agreement") and the
Executive desires to enter into the Agreement and to accept such employment,
subject to the terms and provisions of the Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a
"Party" and together the "Parties") agree as follows:
1. Definitions.
(a) "Affiliate" of a person or other entity shall mean a person or
other entity that directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified.
(b) "Base Salary" shall mean the salary provided for in Section 4
below or any increased salary granted to the Executive pursuant to Section 4.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean:
(i) the Executive commits a felony or any crime involving
moral turpitude; or
(ii) in carrying out his duties, the Executive engages in
conduct that constitutes gross neglect or gross misconduct or any material
violation of this Agreement or any material violation of applicable Company rule
or policy, the violation of which amounts to gross neglect or gross misconduct.
(e) "Change in Control" means an event or occurrence set forth in
any one or more of subsections (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 l3d-3 promulgated under the
Exchange Act) 40% or more of either (1) 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 (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) below;
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 the date of the execution of this Agreement 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 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 (B)
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
(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
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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.
(f) "Disability" shall mean the Executive's inability, due to
physical or mental incapacity, to substantially perform his duties and
responsibilities under this Agreement as determined by a medical doctor selected
by the Company and the Executive. If the Parties cannot agree on a medical
doctor, each Party shall select a medical doctor and the two doctors shall
select a third who shall be the approved medical doctor for this purpose.
(g) "Effective Date" shall mean July 11, 2000.
(h) "Exercise Period" shall mean the seven year period in which
options granted under Section 6(b) and (c) remain exercisable.
(i) "Good Reason" shall mean termination by the Executive of his
employment, after written notice to the Company within 30 days following the
occurrence of any of the following events without his consent:
(i) a reduction in the Executive's then current Base
Salary; or
(ii) the failure of the Board to appoint Executive as the
Chief Executive Officer of the Company ("CEO") in accordance with Section 3(b)
of this Agreement; or
(iii) the removal by the Board of Executive from any position
described in Section 3;
(iv) a material diminution in the Executive's duties or
responsibilities;
(v) a change in the reporting structure so that the Executive
reports to someone other than the then current chief executive officer (if not
Executive) of the Company or the Board;
(vi) the failure of the Company to obtain the assumption in
writing of its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company within 15 days after a merger,
consolidation, sale or similar transaction; and
(vii) the material breach of this Agreement by the Company.
Following written notice from the Executive, as described above, the
Company shall have 15 days in which to cure. If the Company fails to cure, the
Executive's termination shall become effective on the 16th day following the
written notice.
(j) "Stock" shall mean the common stock of the Company.
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(k) "Termination Date" shall mean in the case of either a voluntary
or involuntary termination, the last day upon which Executive works. In the
event of the Executive's death, the Termination Date is the date of death. In
the case of a Disability, the Termination Date is the date upon which the
Executive receives written notice from the Board that it has deemed him to have
a Disability, but in no event before the Executive is determined to be disabled
(as the term is defined in Section 1(f)).
2. Term of Employment. The Term of Employment ("Term" or "Term of
Employment") shall begin on the Effective Date, and shall extend until the third
anniversary of the Effective Date. Notwithstanding the foregoing, the Term of
Employment may be earlier terminated by either Party in accordance with the
provisions of Section 10.
3. Position, Duties and Responsibilities.
(a) Commencing on the Effective Date, Executive shall be employed as
the Chief Operating Officer of the Company ("COO").
(b) Conditioned upon his continued employment and the satisfaction
of the Board with Executive's performance and development, the Board shall
appoint Executive as the Chief Executive Officer ("CEO") of the Company on a
date that is no later than 30 months after the Effective Date, such appointment
to be effective no later than six (6) months following the date of the Board's
action. If he is employed by the Company as of such date, but the Board has not
voted to appoint Executive to be CEO on or before the date that is 30 months
from the Effective Date, Executive may terminate this Agreement and be entitled
to the same benefits due to him as a result of a voluntary termination with Good
Reason, as described in Section 10(d) of this Agreement. Upon his appointment as
CEO, in addition to his duties as COO, Executive shall assume responsibility for
the operational responsibilities of the outgoing chief executive officer, except
that for a period of twelve (12) months following such appointment the Company's
financial and legal functions shall continue to report directly to the outgoing
chief executive officer in his capacity as Chairman of the Board (the
"Chairman"), thereafter the Chairman shall transfer such direct line reporting
responsibility for these functions to the Executive.
(c) The Executive, in carrying out his duties under this Agreement,
shall report to the then current chief executive officer of the Company and the
Board, until such time as he is appointed CEO. Thereafter, Executive shall
report directly to the Board.
(d) In the event of a termination of employment of the Executive for
any reason, the Executive shall immediately resign as a member of the Board of
the Company and each of its subsidiaries.
(e) The parties understand and agree that if the Executive is
appointed CEO, the Executive and the Company will negotiate and enter into a new
Agreement, and the terms of this Agreement with respect to compensation, stock
options and benefits will no longer be controlling; provided that, without
limiting in any way the foregoing provision, the parties agree that the
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negotiations contemplated herein shall specifically include negotiation over the
last clause of the last sentence of Section 3(b) above, including the scope and
duration of the provision contained therein.
4. Base Salary. The Executive shall be paid an annualized Base Salary,
payable in accordance with the regular payroll practices of the Company, of
$500,000, which will be increased every twelve to eighteen months in the
discretion of the Board.
5. Annual Cash Incentive Award. During the Term of Employment, the
Executive shall participate in the annual cash incentive program of the Company,
based on achievement of Board established performance objectives, which
objectives will be communicated to Executive. If the Board determines that such
performance objectives have been met, Executive's target annual cash incentive
award will be 60% of Base Salary. It is specifically acknowledged and agreed
that any cash incentive award for 2000 shall be awarded without respect to
Executive's July employment commencement date, and shall be awarded on an
annualized salary basis.
6. Restricted Stock and Stock Option Awards.
(a) Restricted Stock Awards. On the Effective Date, the Company
shall grant the Executive an award of 60,000 shares of Stock (the "Restricted
Stock") subject to a transfer restriction which will lapse while Executive
remains employed by the Company annually ratably over the three (3) year period
beginning with the first anniversary of the Effective Date. The Restricted Stock
will be granted in accordance with the terms and conditions of the Company's
Employees Equity Incentive Plan (the "Plan"). The Company and the Executive will
execute a restricted stock agreement substantially in accordance with the terms
set forth in Exhibit A to this Agreement, as soon as reasonably practicable
following the Effective Date.
(b) Initial Stock Option Award. On the Effective Date, the Company
shall grant to Executive a stock option to purchase nine-hundred thousand
(900,000) shares of Stock (the "Initial Stock Option"). The exercise price of
the Initial Stock Option shall be the average of the closing prices of the Stock
on the New York Stock Exchange for the six business days preceding the Effective
Date. The Initial Stock Option will be granted in accordance with the terms and
conditions of the Plan. The Company and the Executive will execute a stock
option agreement substantially in accordance with the terms set forth in Exhibit
B to this Agreement, as soon as reasonably practicable following the Effective
Date. The shares of Stock issuable upon exercise of the Initial Stock Option
will be subject to a repurchase right in the Company which will lapse while
Executive remains employed by the Company ratably on the first three anniversary
dates of the grant date. The options shall be exercisable for a period of seven
(7) years from the grant date. The Company shall use its best efforts to adjust
the Initial Stock Option to reflect the distribution to shareholders of shares
of Thermo Fibertek Inc. and Thermo Biomedical, Inc., in accordance with the
Emerging Issues Task Force, Issue 90-9: Changes to Fixed Employee Stock Option
Plans as a Result of a Restructuring, Example 3, Situation 1, as the same may be
in force and effect on the date of such distributions.
(c) Subsequent Stock Option Awards. Conditioned upon his continued
employment and the Executive achieving financial and strategic performance
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objectives established by the Board, the then current chief executive officer of
the Company (if not Executive) and the Executive, the Company shall grant to
Executive stock options to purchase two-hundred thousand (200,000) shares of
Stock on each of the first, second and third anniversaries of the Effective Date
(the "Subsequent Stock Options"). The exercise price of the Subsequent Stock
Options shall be the average of the closing prices of the Stock on the New York
Stock Exchange for the five business days preceding and including the date of
each grant. The Subsequent Stock Options will be granted in accordance with the
terms and conditions of the Plan. Each grant will be evidenced by the Company's
then standard employee stock option agreement, which shall be executed by the
Executive and the Company. Each Subsequent Stock Option shall vest while the
Executive remains employed by the Company ratably on the first three anniversary
dates of each grant date, and shall be exercisable for a period of seven (7)
years from each grant date.
(d) Change in Control. If a Change in Control occurs during the
Term, then, effective upon the Change in Control, (a) each outstanding option to
purchase shares of Stock of the Company held by the Executive, whether or not
issued under this Employment Agreement, 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 held by the Executive, whether or
not issued under this Agreement, shall be deemed to be fully vested.
7. Employee Benefit Programs. During the Term of Employment, the Executive
shall be entitled to participate in all employee pension and welfare benefit
plans and programs made available to the Company's senior level executives or to
its employees generally, as such plans or programs may be in effect from time to
time, including, without limitation, pension, profit sharing, savings and other
retirement plans or programs, medical, dental, hospitalization, short-term and
long-term disability and life insurance plans, accidental death and
dismemberment protection, travel accident insurance, and any other pension or
retirement plans or programs and any other employee welfare benefit plans or
programs that may be sponsored by the Company from time to time, including any
plans that supplement the above-listed types of plans or programs, whether
funded or unfunded. In no way limiting the foregoing, during the Term the
Company will maintain, at its cost, term life insurance on the life of the
Executive for the benefit of his beneficiaries with a face amount equal to three
million dollars ($3,000,000.). The Executive shall be entitled to four weeks
paid vacation per year of employment.
8. Perquisites. During the Term of Employment, the Executive shall be
entitled to participate in all of the Company's executive perquisites in
accordance with the terms and conditions of such arrangements as are in effect
from time to time for the Company's senior-level executives, including without
limitation, the Company's automobile reimbursement arrangement.
9. Reimbursement of Business and Other Expenses.
(a) The Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement including, without
limitation, reasonable legal fees incurred in the negotiation and preparation of
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this Agreement, and the Company shall promptly reimburse him for such expenses,
subject to documentation in accordance with the Company's policy.
(b) In connection with establishing a new principal residence in the
Boston area, the Company agrees to pay Executive $300,000 which may be used, in
his discretion, to cover his relocation expenses or for such other purpose as he
deems appropriate. Executive shall be solely responsible for the tax treatment
of such payment, including, without limitation, paying any applicable tax and
retaining such documentation as may be necessary to support any claimed
deduction based on moving expense reimbursements.
10. Termination of Employment.
(a) Termination Due to Death. In the event that the Executive's
employment is terminated due to his death, his estate or his beneficiaries, as
the case may be, shall be entitled to the following benefits:
(i) the sum of (1) the Executive's base salary through the
Termination Date; (2) a bonus payment determined as follows: 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 Termination Date, and the denominator of which is 365
(the "Severance Bonus"); and (3) the amount of any cash compensation previously
deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay through the Termination Date, in each case
to the extent not previously paid (the sum of the amounts described in clauses
(1), (2), and (3) shall be hereinafter referred to as the "Accrued
Obligations"); and
(ii) the Initial and Subsequent Stock Options (to the extent
previously granted), including previously exercised Initial and Subsequent Stock
Options, shall become fully vested and no longer subject to a right of
repurchase by the Company; all outstanding Initial and Subsequent Stock Options
shall remain exercisable until two years from the Termination Date (but in no
event beyond the end of each such option's Exercise Period); and
(iii) the transfer restrictions on the Restricted Stock
granted pursuant to Section 6 shall lapse.
(b) Termination Due to Disability. In the event that the Executive's
employment is terminated by either party due to his Disability, he shall be
entitled to the following benefits:
(i) disability benefits in accordance with the long-term
disability ("LTD") program then in effect for senior executives of the Company;
(ii) Base salary through the end of the LTD elimination
period;
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(iii) The greater of a Severance Bonus (as described in
Section 10(a)(i)) or six month's Base Salary, and the amount of any cash
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay through the
Termination Date, in each case to the extent not previously paid;
(iv) the Initial and Subsequent Stock Options (to the extent
previously granted), including previously exercised Initial and Subsequent Stock
Options, shall become fully vested and no longer subject to a right of
repurchase by the Company; all outstanding Initial and Subsequent Stock Options
shall remain exercisable until two years from the Termination Date (but in no
event beyond the end of each such option's Exercise Period); and
(v) the transfer restrictions on the Restricted Stock granted
pursuant to Section 6 shall lapse.
(vi) the Executive shall be entitled to continued
participation at Company expense in all medical and dental insurance coverage in
which he was participating on the date of his termination until the earlier of
(x) 18 months following the date of termination and (y) the date, or dates, he
receives equivalent coverage and benefits under the plans and programs of a
subsequent employer.
In no event shall a termination of the Executive's employment for
Disability occur until the Party terminating his employment gives written notice
to the other Party in accordance with Section 24 below, and until Executive is
determined to be disabled as defined in Section 1(f).
(c) Termination by the Company for Cause. In the event the Company
terminates the Executive's employment for Cause:
(i) he shall be entitled to a payment of base salary and
accrued vacation pay through the Termination Date;
(ii) no further lapsing of the Company's repurchase right, and
no further vesting, shall occur and Executive shall have 90 days to exercise all
vested and outstanding Initial and Subsequent Stock Options; and
(iii) all Restricted Stock granted under Section 6 as to which
transfer restrictions have not lapsed shall be forfeited.
(d) Termination without Cause or for Good Reason. In the event the
Executive's employment is terminated by the Company without Cause or by the
Executive with Good Reason (but not in any event as a result of Disability,
death, or as the result of a termination with Cause or without Good Reason), the
Executive shall be entitled to the following:
(i) the Company shall pay to the Executive in equal monthly
installments, for a thirty-six month period, beginning 30 days after the
Termination Date the aggregate of the following amounts:
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(A) the sum of the Accrued Obligations; and
(B) an amount equal to 4.8 times the Executive's
then current base salary.
(ii) for three years after the Termination Date, or such
longer period as may be provided by the term of the appropriate plan, program,
practice or policy, the Company shall continue to provide medical and dental
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 medical and dental benefit
plans in effect on the Termination Date and in which Executive participated as
of such date or, if more favorable to the Executive and his 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 medical and
dental benefits from such employer on terms at least as favorable to the
Executive and his 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 his 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
(v) transfer restrictions shall lapse on all Restricted Stock
and the Initial and Subsequent Stock Options (to the extent previously granted),
including previously exercised Initial and Subsequent Stock Options, shall be
fully vested and no longer subject to a right of repurchase by the Company; all
outstanding Initial and Subsequent Stock Options shall remain exercisable until
two years from the Termination Date (but in no event beyond the end of each such
option's Exercise Period); and
(vi) the restrictions on the Restricted Stock granted pursuant
to Section 6 shall lapse.
(e) Voluntary Termination. A termination of employment by the
Executive on his own initiative, other than a termination due to death or
Disability or Good Reason, shall have the same consequences as provided in
Section 10(c) for a termination for Cause. A voluntary termination under this
Section 10(e) shall be effective upon 30 days prior written notice to the
Company.
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(f) Taxes.
(i) 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) (A) which of the payments or benefits due to
the Executive following such Change in Ownership or Control constitute
Contingent Compensation Payments, (B) 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 (C) 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 (1) that he agrees with the Company's determination pursuant to
the preceding sentence or (2) that he disagrees with such determination, in
which case he 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 he
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 he 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 by
arbitration in accordance with Section 13 below. 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 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.
(ii) For purposes of this Section 10(f), the following terms
shall have the following respective meanings:
(A) "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.
(B) "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
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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.
(C) "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.
(g) Outplacement Services. In the event the Executive's employment
terminates in accordance with Section 10(d), the Company shall provide
outplacement services through one or more outside firms of the Executive's
choosing up to an aggregate of $50,000, 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.
(h) Nature of Payments. Any amounts due under this Section 10 are in
the nature of severance payments considered to be reasonable by the Company and
are not in the nature of a penalty.
(i) No Mitigation; No Offset. The Executive shall not be required to
mitigate the amount of any payment or benefit provided in this Section 10 by
seeking other employment otherwise. Further, except as provided in Sections
10(b) (vi) and 10 (d) (ii), the amount of any payment or benefits provided for
in this Section 10 shall not be reduced by any compensation earned by the
Executive as a result of employment by another employer or be offset by any
amount claimed to be owed by the Executive to the Company.
11. Confidentiality & Assignment of Inventions.
(a) The Executive shall execute and deliver to the Company on the
Effective Date the Company's standard employee confidentiality and assignment of
inventions agreement, substantially in the form set forth in Exhibit C, attached
and incorporated herein.
(b) Upon the termination of the Executive's employment, the
Executive (or in the event of his death, the Executive's personal
representative) shall promptly surrender to the Company the original and all
copies of any materials containing confidential information of the Company which
are then in the Executive's possession or control, provided, however, the
Executive shall not be required to surrender his rolodexes, personal diaries and
other items of a personal nature.
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12 . Noncompetition; Nonsolicitation.
(a) The Executive acknowledges (i) that in the course of his
employment with the Company he will become familiar with trade secrets and
customer lists of, and other confidential information concerning, the Company
and its Affiliates, customers, and clients and (ii) that his services will be of
special, unique and extraordinary value to the Company.
(b) The Executive agrees that during the Term of Employment and for
a period of one year following his termination of employment (the
"Noncompetition Period") he shall not in any manner, directly or indirectly,
through any person, firm, corporation or enterprise, alone or as a member of a
partnership or as an officer, director, stockholder, investor or employee of or
advisor or consultant to any person, firm, corporation or enterprise or
otherwise, engage or be engaged, or assist any other person, firm, corporation
or enterprise in engaging or being engaged (collectively, ("Restricted
Activity")), in any Competitive Activity. A Competitive Activity shall mean a
business that (i) is being conducted by the Company or any Affiliate at the time
in question and (ii) was being conducted, or was under active consideration to
be conducted, by the Company or any Affiliate, at the date of the termination of
the Executive's employment, provided that Competitive Activity shall not include
a business of the Company contributing less than 1% of the Company's revenues
for the year in question and provided further that an activity shall not be
deemed to be a Competitive Activity if the activity contributes less than 1% of
the revenues for the year in question of the business by which the Executive is
employed or with which he is otherwise associated; and provided further that it
is agreed and understood that the prohibitions provided for in this Section
12(b) shall not restrict Executive from engaging in Restricted Activity for any
subsidiary, division or affiliate or unit of a company (collectively a "Related
Entity") if that Related Entity is not engaged in Competitive Activity,
irrespective of whether some other Related Entity of that company engages in
what would otherwise be considered to be Competitive Activity (as long as
Executive does not engage in Restricted Activity for such other Related Entity).
(c) The Executive further agrees that during the Noncompetition
Period he shall not (i) in any manner, directly or indirectly, hire or cause to
be hired any employee of or advisor or consultant to the Company or any of its
Affiliates any purpose or in any capacity whatsoever, or (ii) in connection with
any business to which Section 12(b) applies, call on, service, solicit or
otherwise do business with any customer of the Company or any of its Affiliates;
provided, however, that the restriction contained in clause (i) of this Section
12(c) shall not apply to, or interfere with, the proper performance by the
Executive of his duties and responsibilities under Section 3 of this Agreement.
(d) Nothing in this Section 12 shall prohibit the Executive from
being a passive owner of not more than one percent of the outstanding common
stock, capital stock and equity of any firm, corporation or enterprise so long
as the Executive has no active participation in the management of business of
such firm, corporation or enterprise.
(e) If the restrictions stated herein are found by a court to be
unreasonable, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
12
the stated period, scope or area and that the court shall revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law.
13. Resolution of Disputes. Any disputes arising under or in connection
with this Agreement shall be resolved by binding arbitration, to be held in
Boston, Massachusetts, in accordance with the rules and procedures of the
American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Costs of
the mediation, arbitration or litigation including, without limitation,
reasonable attorneys' fees of both parties, shall be borne by the Company.
14. Remedies. Each of the parties to this Agreement shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement. Nothing in this paragraph is
intended to prevent the parties from raising any and all defenses with respect
to the necessity for, and scope of, such injunctive or equitable relief.
15 . Liability Insurance. The Company agrees to obtain, continue and
maintain a directors' and officers' liability insurance policy covering the
Executive to the extent the Company provides such coverage for its other senior
executives. The parties have entered into an indemnification agreement on July
11, 2000 (attached and incorporated herein as Exhibit D).
16. Assignability; Binding Nature. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors, heirs
(in the case of the Executive). and assigns. Rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company
pursuant to a merger or consolidation in which the Company is not the continuing
entity, or the sale or liquidation of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it shall take whatever action it reasonably can in order to
cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law.
17. Representations.
(a) The Company represents and warrants that it is fully authorized
and empowered to enter into this Agreement and that the performance of its
obligations under this Agreement will not violate any agreement between it and
any other person, firm or organization. The Executive represents that he knows
13
of no agreement between him and any other person, firm or organization that
would be violated by the performance of his obligations under this Agreement.
(b) Executive hereby represent and warrants that he is not bound by
the terms of any agreement with any previous employer or other party to refrain
from competing, directly or indirectly, with the business of such previous
employer or any other party. Executive further represents and warrants that
Executive's performance of all the terms of this Agreement and as an employee of
the Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by Executive in confidence
or in trust prior to Executive's employment with the Company. Executive will not
disclose to the Company or induce the Company to use any confidential or
proprietary information or material belonging to any previous employer or
others. Executive will not hereafter grant anyone any rights inconsistent with
the terms of this Agreement.
18. Entire Agreement. This Agreement contains the entire understanding and
agreement between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Parties with respect thereto.
This is an integrated document.
19. Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company. No waiver by either Party of any breach by
the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the Executive or an authorized
officer of the Company, as the case may be.
20. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law so as to achieve the purposes of this Agreement.
21. Survivorship. Except as otherwise expressly set forth in this
Agreement, the respective rights and obligations of the Parties hereunder shall
survive any termination of the Executive's employment. This Agreement itself (as
distinguished from the Executive's employment) may not be terminated by either
Party without the written consent of the other Party.
22. References. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
23. Governing Law/Jurisdiction. This Agreement shall be governed in
accordance with the laws of Massachusetts without reference to principles of
conflict of laws.
14
24. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when (a) delivered
personally, (b) sent by certified or registered mail, postage prepaid, return
receipt requested or (c) delivered by overnight courier (provided that a written
acknowledgment of receipt is obtained by the overnight courier) to the Party
concerned at the address indicated below or to such changed address as such
Party may subsequently give such notice of:
If to the Company: Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Vice President and
General Counsel
Copy: Chairman, Human Resources
Committee of the Board of
Directors
if to the Executive: Xxxxxx Xxxxxxx
c/o Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
25. Headings. The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
26. Counterparts. This Agreement may be executed in two or more
counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
THERMO ELECTRON CORPORATION
By: /s/ Xxxx Xxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxx
Vice-President and General Counsel
/s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx
15
EXHIBIT A
---------
Grant ID # 197-
3 yr 1/3/ Employees Equity Plan
THERMO ELECTRON CORPORATION
2000 EMPLOYEES EQUITY INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
MARIJN X. XXXXXXX
Name of Recipient
60,000
Number of Restricted Shares of
Common Stock Awarded
Vesting Schedule for Restricted Shares Awarded:
# of Shares Vesting Date
----------- ------------
20,000 July 11, 2001
20,000 July 11, 2002
20,000 July 11, 2003
JULY 11, 2000
Award Date
Thermo Electron Corporation (the "Company") has selected you to receive
the restricted stock award identified above, subject to the provisions of the
Plan and the terms, conditions and restrictions contained in this agreement (the
"Agreement"). Please confirm your acceptance of this Award, your agreement to
the terms of the Plan and this Agreement, your receipt of a copy of the Plan,
and your receipt of a memorandum regarding the tax treatment of awards of
restricted stock, by signing both copies of this Agreement. You should keep one
copy for your records and return the other copy promptly to the Stock Option
Manager of the Company, c/o Thermo Electron Corporation, 00 Xxxxx Xxxxxx, Xxxx
Xxxxxx Xxx 0000, Xxxxxxx, Xxxxxxxxxxxxx 00000-0000.
THERMO ELECTRON CORPORATION
By: /s/ Xxxx Pol
-------------------------------------
Xxxx Pol
Senior Vice President, Human
Resources
Accepted and Agreed:
/s/ Marijn X. Xxxxxxx
---------------------------
Recipient
THERMO ELECTRON CORPORATION
2000 EMPLOYEES EQUITY INCENTIVE PLAN
Restricted Stock Agreement
1. Preamble. This Restricted Stock Agreement contains the terms and conditions
of an award of shares of restricted stock of the Company (the "Restricted
Shares") made to the Recipient identified on the first page of this
Agreement pursuant to the Plan. The Restricted Shares shall be issued from
treasury shares held by the Company.
2. Restrictions on Transfer. The Restricted Shares shall not be sold,
transferred, pledged, assigned or otherwise encumbered or disposed of
except as provided below and in the Plan, until and unless the Restricted
Shares shall have vested as provided in Paragraph 3 below.
3. Vesting. The term "vest" as used in this Agreement means the lapsing of the
restrictions that are described in this Agreement with respect to the
Restricted Shares. The Restricted Shares shall vest in accordance with the
schedule set forth on the first page of this Agreement, provided in each
case that the Recipient is then, and since the Award Date has continuously
been, employed by the Company or its subsidiaries. Notwithstanding the
foregoing, the Recipient shall become fully vested in the Restricted Shares
prior to the vesting dates set forth on the first page of this Agreement in
the following circumstances:
(a) In the event of a Change of Control, as defined in in Section 1(e) of
the Employment Agreement dated as of July 11, 2000 by and between the
Recipient and the Company (the "Employment Agreement"), as in effect
on the date of this Agreement, all Restricted Shares that have not
previously been forfeited shall immediately vest, provided that the
Recipient is then employed by the Company or its subsidiaries. The
references to the Employment Agreement in this Agreement shall not
govern or be applicable to any other stock option agreement between
the Recipient and the Company, unless specifically so stated in such
other agreement.
(b) In the event of the Recipient's death or disability, all Restricted
Shares that have not previously been forfeited shall immediately vest,
provided that the Recipient was employed by the Company or its
subsidiaries immediately prior to the date of death or disability.
"Disability" shall have the same meaning for the purposes of this
Agreement as set forth in Section 1(f) of the Employment Agreement.
(c) In the event the Recipient's employment is terminated by the Company
without Cause, or by the Recipient with Good Reason, all Restricted
Shares that have not previously been forfeited shall immediately vest.
"Cause" shall have the same meaning for the purposes of this Agreement
as set forth in Section 1(d) of the Employment Agreement. "Good
Reason" shall have the same meaning for the purposes of this Agreement
as set forth in Section 1(i) of the Employment Agreement.
2
4. Forfeiture. In the event the Company terminates the Recipient's employment
for Cause (as defined in Section 1(d) of the Employment Agreement), or in
the event of a termination by the Recipient on his own initiative, other
than a termination due to death, Disability or Good Reason, the Restricted
Shares, less any Restricted Shares that have previously vested, shall be
immediately forfeited to the Company. "Disability" and "Good Reason" shall
have the same meanings for purposes of this Agreement as set forth in
Sections 1(f) and 1(i), respectively, of the Employment Agreement.
5. Dividends and Voting Rights. The Recipient shall be entitled to any and all
dividends or other distributions paid with respect to the Restricted Shares
which have not been forfeited or otherwise disposed of and shall be
entitled to vote any such Restricted Shares; provided however, that any
property (other than cash) distributed with respect to Restricted Shares,
including without limitation a distribution of shares of the Company's
stock by reason of a stock dividend, stock split or otherwise, or a
distribution of other securities based on the ownership of Restricted
Shares, shall be subject to the restrictions of this Restricted Stock
Agreement in the same manner and for so long as the Restricted Shares
remain subject to such restrictions, and shall be promptly forfeited to the
Company if and when the Restricted Shares are so forfeited.
6. Certificates. (a) Legended Certificates. The Recipient is executing and
delivering to the Company blank stock powers to be used in the event of
forfeiture. Any certificates representing unvested Restricted Shares shall
be held by the Company, and any such certificate (and, to the extent
determined by the Company, any other evidence of ownership of unvested
Restricted Shares) shall contain the following legend:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED
HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF
THE ISSUER'S EMPLOYEES EQUITY INCENTIVE PLAN AND A RESTRICTED STOCK
AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE ISSUER. COPIES
OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF THE ISSUER.
(b) Book Entry. If unvested Restricted Shares are held in book entry form,
the Recipient agrees that the Company may give stop transfer
instructions to the depository to ensure compliance with the
provisions of this Agreement. The Recipient hereby (i) acknowledges
that the Restricted Shares may be held in book entry form on the books
of the Company's depository (or another institution specified by the
Company), and irrevocably authorizes the Company to take such actions
as may be necessary or appropriate to effectuate a transfer of the
record ownership of any such shares that are unvested and forfeited
hereunder, (ii) agrees to deliver to the Company, as a precondition to
the issuance of any certificate or certificates with respect to
unvested Restricted Shares, one or more stock powers, endorsed in
blank, with respect to such shares, and (iii) agrees to sign such
other powers and take such other actions as the Company may reasonably
request to accomplish the transfer or forfeiture of any unvested
Restricted Shares that are forfeited hereunder.
3
7. Unrestricted Shares. As soon as practicable following the vesting of any
Restricted Shares the Company shall cause a certificate or certificates
covering such shares, without the legend contained in Paragraph 6(a), to be
issued and delivered to the Recipient, subject to the payment by the
Recipient by cash or other means acceptable to the Company of any federal,
state, local and other applicable taxes required to be withheld in
connection with such vesting. The Recipient understands that once a
certificate has been delivered to the Recipient in respect of Restricted
Shares which have vested, the Recipient will be free to sell the shares of
common stock evidenced by such certificate, subject to applicable
requirements of federal and state securities laws.
8. Tax Withholding. The Recipient expressly acknowledges that the award or
vesting of the Restricted Shares will give rise to "wages" subject to
withholding. The Recipient expressly acknowledges and agrees that the
Recipient's rights hereunder are subject to the Recipient's paying to the
Company in cash (or by such other means as may be acceptable to the Company
in its discretion, including, if the Committee so determines, by the
delivery of previously acquired shares of common stock of the Company or by
having the Company hold back from the shares to be delivered, shares of the
Company's common stock having a value calculated to satisfy the withholding
requirement) all federal, state, local and any other applicable taxes
required to be withheld in connection with such award or vesting. If the
withholding obligation is not satisfied by the Recipient promptly, the
Company may, without further consent from the Recipient, have the right to
deduct such taxes from any payment of any kind otherwise due to the
Recipient, including but not limited to, the hold back from the shares to
be delivered pursuant to Section 7 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 award or vesting.
9. Administration. The Board of Directors of the Company, or the Human
Resources Committee of the Board of Directors or other committee designated
in the Plan, shall have the authority to manage and control the operation
and administration of this Agreement. Any interpretation of the Agreement
by the Committee and any decision made by it with respect to the Agreement
is final and binding.
10. Plan Definitions. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the
Plan, a copy of which has already been provided to the Recipient.
11. Amendment. This Agreement may be amended only by written agreement between
the Recipient and the Company, without the consent of any other person.
4
EXHIBIT B
Grant ID # 197-
[A/5]
THERMO ELECTRON CORPORATION
2000 EMPLOYEES EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
MARIJN X. XXXXXXX
Optionee
900,000 $22.67
Number of Shares of Exercise Price
Common Stock Subject Per Share
to the Option
JULY 11, 2000 JULY 11, 2007
Grant Date Expiration Date
Thermo Electron Corporation (the "Company") has granted you the option
(the "Option") to acquire the number of shares of common stock (the "Common
Stock"), of the Company specified above, subject to the provisions of the Plan
and the terms, conditions and restrictions contained in this agreement (the
"Agreement"). Please confirm your acceptance of this Option, your agreement to
the terms of the Plan and this Agreement and your receipt of a copy of the Plan,
by signing both copies of this Agreement. You should keep one copy for your
records and return the other copy promptly to the Stock Option Manager of the
Company, c/o Thermo Electron Corporation, 00 Xxxxx Xxxxxx, Xxxx Xxxxxx Xxx 0000,
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000.
THERMO ELECTRON CORPORATION
By: /s/ Xxxx Pol
--------------------------------------
Xxxx Pol
Senior Vice President, Human Resources
Accepted and Agreed:
/s/ Marijn X. Xxxxxxx
---------------------------------
Optionee
Home Address: -------------------
---------------------------------
1
THERMO ELECTRON CORPORATION
2000 EMPLOYEES EQUITY INCENTIVE PLAN
Stock Option Agreement
Preamble. 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 the Optionee
identified 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 and
not a "qualified", "incentive", or "employee stock purchase plan" stock option
as those terms may be defined in Sections 422 and 423, respectively, of the
Internal Revenue Code of 1986, as amended.
1. Termination of Option. The date on which the Option shall terminate in
whole or in part as provided in this Section 1 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;
(b) two years after the date on which you cease to be an employee of the
Company or or a subsidiary of the Company (the "Employment Termination Date") if
your employment terminates for any reason other than the reason specified in
Section 1(c);
(c) 90 days after your Employment Termination Date (as defined in Section
1(b) of this Agreement) if your employment terminates by reason of your
termination for Cause by the Company or you terminate your employment on your
own initiative, other than a termination due to your death, Disability or Good
Reason. "Cause", "Disability" and "Good Reason" shall have the same meanings for
the purposes of this Agreement as set forth in Sections 1(d), 1(f) and 1(i),
respectively, of the Employment Agreement dated as of July 11, 2000 by and
between you and the Company (the "Employment Agreement"), as in effect on the
date of this Agreement,(the references to the Employment Agreement in this
Agreement shall not govern or be applicable to any other stock option agreement
between the Recipient and the Company, unless specifically so stated in such
other agreement); or
(d) the date of the dissolution or liquidation of the Company.
2. Transfer Restrictions and Company Repurchase Option.
(a) Option Shares may not, without the prior written consent of the
Company, be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or by the applicable laws of descent and
distribution (the "Transfer Restrictions") unless and until the Transfer
Restrictions with respect to such Option Shares shall have lapsed as provided
herein. The Transfer Restrictions shall lapse in their entirety: (i) with
respect to one-third of the number of Option Shares specified on the first page
of this Agreement at the close of business on each of the first, second and
2
third anniversaries of the Grant Date that occur prior to your Employment
Termination Date and (ii) with respect to all of the Option Shares specified on
the first page of this Agreement in the event of your death, your disability (as
defined in Section 1(f) of the Employment Agreement), your termination of
employment by the Company without Cause (as defined in Section 1(d) of the
Employment Agreement) or by you with Good Reason (as defined in Section 1(i) of
the Employment Agreement), or a Change of Control (as defined in Section 1(e) of
the Employment Agreement). From and after your Employment Termination Date, no
further lapsing of the Transfer Restrictions shall occur and you shall forfeit
any rights to and interests in the Option Shares as to which the Transfer
Restrictions shall not have lapsed.The Company shall have the right, exercisable
in accordance with Section 2(b) hereof, to repurchase all or any portion of the
Option Shares purchased by you upon exercise of the Option with respect to which
the Transfer Restrictions shall not have lapsed, at a price per share equal to
the Exercise Price specified on the first page of this Agreement (the "Exercise
Price"). The right of the Company to repurchase Option Shares at the Exercise
Price as provided in this Section 2(a) is hereinafter referred to as the
"Company Repurchase Option".
(b) The Company may exercise the Company Repurchase Option by
mailing to you at your last address listed in the records of the Company, or by
delivering to you, a notice that it has exercised the Company Repurchase Option
and the number of Option Shares with respect to which it has exercised the
Company Repurchase Option, within six (6) months after the date that the Company
shall first have been entitled to exercise the Company Repurchase Option (the
"Repurchase Option Period"). Such notice shall be accompanied by a check payable
to you in the amount of the Exercise Price times the number of Option Shares
with respect to which the Company has exercised the Company Repurchase Option.
Upon exercise by the Company of the Company Repurchase Option as provided
herein, the certificate or certificates representing the Option Shares, and
representing shares of Common Stock or other shares (or other property) received
in any Non-Cash Distribution (as defined herein) in respect of such Option
Shares, which have been repurchased shall forthwith be released from the escrow
arrangement provided for in Section 4 hereof and transferred of record to the
Company. The Company Repurchase Option shall lapse and be of no further force or
effect if it shall not have been exercised prior to the expiration of the
Repurchase Option Period.
3. No Assignment of Rights. Except for assignments or transfers by will
or the applicable laws of descent and distribution or with the prior written
consent of the Company, 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.
4. Exercise of Option; Delivery and Deposit of Certificate(s). You (or in
the case of your death, your legal representative) may exercise the Option in
whole or in part by giving written notice to the Company on the form attached
hereto as Exhibit A (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 shares
of the Company's Common Stock (the "Tendered Shares") with a market value equal
3
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 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 and, if such Tendered Shares are then subject to Transfer Restrictions,
only with the prior written consent of the Company as provided in Section 2(a)
hereof. As a condition to such consent, the Company may require that a number of
Option Shares acquired by you upon your exercise of the Option equal to the
number of Tendered Shares surrendered upon such exercise shall be subject to the
Transfer Restrictions and the Company Repurchase Option to the same extent that
such Tendered Shares surrendered upon such exercise were so subject immediately
prior to such surrender. 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. If such
certificate(s) represent(s) Option Shares with respect to which the Transfer
Restrictions shall not have lapsed, such certificate(s) shall, immediately upon
your receipt thereof, be deposited by you, together with a stock power endorsed
in blank, in escrow with the Company. In addition, any certificate(s)
representing shares of Common Stock, or other property other than cash,
distributed (including pursuant to any stock split) in respect of Option Shares
purchased by you (a "Non-Cash Distribution") with respect to which the Transfer
Restrictions shall not have lapsed shall, immediately upon your receipt thereof,
be deposited by you, together with a stock power endorsed in blank (if
applicable), in escrow with the Company, and shall be subject to the Transfer
Restrictions and the Company Repurchase Option to the same extent as the Option
Shares in respect of which such Non-Cash Distribution was made. All such
deposited certificate(s) may have set forth thereon a legend or legends (in
addition to the legend referred to in Section 7 hereof) indicating that the
shares of Common Stock (or other property) represented by such certificate(s)
are subject to the Transfer Restrictions and, to the extent applicable, to the
Company Repurchase Option, as provided herein. All shares of Common Stock
delivered upon the exercise of the Option as provided herein shall be fully paid
and non-assessable.
5. 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 or shares (or other
property) received in any Non-Cash Distribution in respect of Option Shares
purchased by you, you shall have ownership of such shares (or other property),
including the right to vote and receive dividends, subject, however, in the case
of any such shares (or other property) with respect to which the Transfer
Restrictions shall not have lapsed, to the Transfer Restrictions and the Company
Repurchase Option, to the extent applicable, and to the other restrictions and
limitations imposed 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.
6. Release of Option Shares. As soon as reasonably practicable after the
Transfer Restrictions shall have lapsed with respect to any Option Shares
purchased by you upon exercise of the Option, the Company shall deliver to you,
4
or your legal representative in the case of your death, the certificate or
certificates representing such shares and any shares (or other property)
received in any Non-Cash Distribution in respect of such shares, previously
deposited in escrow with the Company pursuant to Section 4 hereof, without any
legend referring to the Transfer Restrictions or the Company Repurchase Option.
7. Securities Laws. You hereby represent and warrant that you will not
transfer, sell or otherwise dispose of any Option Shares purchased by you except
in compliance with the Securities Act of 1933, as amended (the "Act"), the rules
and regulations thereunder and all applicable state securities laws and the
rules and regulations thereunder. You hereby acknowledge and agree that any
routine sales of the Option Shares purchased by you upon exercise of the Option
made in reliance upon Rule 144 under the Act may be made only in limited amounts
in accordance with the terms and conditions of that Rule. You also acknowledge
and agree that the certificate(s) representing Option Shares delivered to you
pursuant to Section 4 hereof may have set forth thereon a legend indicating that
such shares may be transferred, sold or otherwise disposed of only after receipt
by the Company of an opinion of counsel reasonably satisfactory to it that the
transfer, sale or other disposition will not violate the Act or the regulations
thereunder or any applicable state securities laws or the regulations
thereunder.
8. Dilution and Other Adjustments. In the event of a stock dividend or
stock split 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")
occurring 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 clause (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.
5
9. 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.
10. 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 the Transfer Restrictions or the
Company Repurchase Option or any other 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 delivered pursuant to
Section 7 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 award or vesting..
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.
11. Determination of Rights. You hereby represent and warrant for
yourself, your personal representatives and beneficiaries, that as a condition
of the granting of the Option, any dispute or disagreement which 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 that any decision made by it
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.
12. 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.
6
13. 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 the Optionee, to the address set
forth on the first page of this Agreement, or such other address, in each case,
as the addressee shall last have furnished to the communicating party.
7
Exhibit C
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
__________________________ 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/ Marijn X. Xxxxxxx
------------------------------
Employee
October 13, 2000
----------------------- ------------------------------
Witness Date
THERMO ELECTRON CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx, Vice President
and General Counsel
----------------------- ------------------------------------
Witness Date October 13, 2000
EXHIBIT D
THERMO ELECTRON CORPORATION
INDEMNIFICATION AGREEMENT
This Agreement, made and entered into this 11th day of July, 2000
("Agreement"), by and between Thermo Electron Corporation, a Delaware
corporation (the "Company"), and Marijn X. Xxxxxxx ("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
2
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
3
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
selected by the Board, and the Company shall give written notice to Indemnitee
4
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
5
the Company of the request therefor, the requisite determination of entitlement
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
6
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
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.
7
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,
8
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;
9
provided, however, that there shall be excluded form this clause (B) 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
(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.
10
(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:
11
(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. Xxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
----------------------------- ------------------------------------
Xxxxxx X. Xxxxxxx Xxxx X. Xxxxxxxxx
Vice President, Secretary Vice President and General Counsel
INDEMNITEE
/s/ Xxxxxx Xxxxxxx
----------------------------------------
Marijn X. Xxxxxxx
Address:
