Exhibit 10.7
THERMO ELECTRON CORPORATION
DIRECTORS STOCK OPTION PLAN
As amended and restated effective as of February 7, 2002
1. Purpose
The purpose of this Directors Stock Option Plan (the "Plan") of Thermo
Electron Corporation (the "Company") is to encourage ownership in the Company by
outside directors of the Company whose services are considered essential to the
Company's growth and progress and to provide them with a further incentive to
become directors and to continue as directors of the Company. The Plan is
intended to be a nonstatutory stock option plan.
2. Administration
The Board of Directors, or a Committee (the "Committee") consisting of one
or more directors of the Company appointed by the Board of Directors, shall
supervise and administer the Plan. Grants of stock options under the Plan and
the amount and nature of the options to be granted shall be automatic in
accordance with Section 5. However, all questions of interpretation of the Plan
or of any stock options granted under it shall be determined by the Board of
Directors or the Committee and such determination shall be final and binding
upon all persons having an interest in the Plan.
3. Participation in the Plan
Directors of the Company who are not employees of the Company or any
subsidiary or parent of the Company shall be eligible to participate in the
Plan. Directors who receive grants of stock options in accordance with this Plan
are sometimes referred to herein as "Optionees."
4. Stock Subject to the Plan
The maximum number of shares that may be issued under the Plan shall be
675,000 shares of the Company's Common Stock (the "Common Stock"), subject to
adjustment as provided in Section 9. Shares to be issued upon the exercise of
options granted under the Plan may be either authorized but unissued shares or
shares held by the Company in its treasury. If any option expires or terminates
for any reason without having been exercised in full, the unpurchased shares
subject thereto shall again be available for options thereafter to be granted.
5. Terms and Conditions
A. Annual Stock Option Grants
Each Director of the Company who meets the requirements of Section 3 and
who is holding office immediately following the Annual Meeting of Stockholders
commencing with the Annual Meeting of Stockholders held in calendar year 1993,
shall be granted an option to purchase 1,000 shares of Common Stock at the close
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of business on the date of such Annual Meeting.
B. General Terms and Conditions Applicable to All Grants.
1. Options shall be immediately exercisable at any time from and
after the grant date and prior to the date which is the earliest
of:
(a) seven years after the grant date, (b) three years after the
Optionee ceases to serve as a director of the Company, or any
subsidiary of the Company (one year in the event the Optionee
ceases to meet the requirements of this Subsection by reason of
his or her death), or (c) the date of dissolution or liquidation
of the Company.
2. The exercise price at which Options are granted hereunder shall
be the average of the closing prices reported by the national
securities exchange on which the Common Stock is principally
traded for the five trading days immediately preceding and
including the date the option is granted or, if such security is
not traded on an exchange, the average last reported sale price
for the five-day period on the NASDAQ National Market List, or
the average of the closing bid prices for the five-day period
last quoted by an established quotation service for
over-the-counter securities, or if none of the above shall apply,
the last price paid for shares of the Common Stock by independent
investors in a private placement.
3. All options shall be evidenced by a written agreement
substantially in such form as shall be approved by the Board of
Directors or Committee, containing terms and conditions
consistent with the provisions of this Plan.
6. Exercise of Options
A. Exercise/Consideration
An option may be exercised in accordance with the instructions described in
"The Guide for Employees of Thermo Electron Stock Option Plans" and any
supplement thereto as they may be amended from time to time (the "Guide"). Upon
exercise of the option in accordance with the aforementioned instructions, the
Company shall deliver or cause to be delivered to the Optionee the number of
shares then being purchased, registered in the name of the Optionee or other
person exercising the option. If any law or applicable regulation of the
Securities and Exchange Commission or other body having jurisdiction in the
premises shall require the Company or the Director to take any action in
connection with shares being purchased upon exercise of the option, exercise of
the option and delivery of the certificate or certificates for such shares shall
be postponed until completion of the necessary action, which shall be taken at
the Company's expense.
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B. Tax Withholding
No later than the date on which part or all of the value of any shares
received upon the exercise of an option first becomes includible in your gross
income for income tax purposes, you shall satisfy your obligations to pay any
federal, state or local taxes required to be withheld with respect to such
income in accordance with the provisions of the Guide. Notwithstanding the
foregoing, no election to use shares for the payment of withholding taxes shall
be effective unless made in compliance with any applicable requirements of Rule
16b-3.
7. Transferability
Except as may be authorized by the Board, in its sole discretion, no Option
may be transferred other than by will or the laws of descent and distribution,
and during an Optionee's lifetime an Option may be exercised only by him or her
(or in the event of incapacity, the person or persons properly appointed to act
on his or her behalf). The Board may, in its discretion, determine the extent to
which Options granted to an Optionee shall be transferable, and such provisions
permitting or acknowledging transfer shall be set forth in the written agreement
evidencing the Option executed and delivered by or on behalf of the Company and
the Optionee.
8. Limitation of Rights to Continue as a Director
Neither the Plan, nor the quantity of shares subject to options granted
under the Plan, nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a Director for any period of time, or at any
particular rate of compensation.
9. Adjustments in the Event of Certain Transactions
(a) In the event of a stock dividend, stock split or combination of shares,
or other distribution with respect to holders of Common Stock other than normal
cash dividends, the Board will make (i) appropriate adjustments to the maximum
number of shares that may be delivered under the Plan under Section 4 above, and
(ii) appropriate adjustments to the number and kind of shares of stock or
securities subject to Options then outstanding or subsequently granted, any
exercise prices relating to Options and any other provisions of Options affected
by such change.
(b) 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
Board, the Board in its discretion may make appropriate adjustments to
outstanding Awards, including, without limitation: (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
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of Section 424(a) of the Code) as the Board may determine, or (iv) terminate the
Option (provided, that if the Board 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 Board 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.
(c) No fraction of a share or fractional shares shall be purchasable or
deliverable pursuant to this Section 9.
10. Limitation of Rights in Option Stock
The Optionee shall have no rights as a stockholder in respect of shares as
to which his or her options shall not have been exercised, certificates issued
and delivered and payment as herein provided made in full, and shall have no
rights with respect to such shares not expressly conferred by this Plan or the
written agreement evidencing options granted hereunder.
11. Stock Reserved
The Company shall at all times during the term of the options reserve and
keep available such number of shares of the Common Stock as will be sufficient
to permit the exercise in full of all options granted under this Plan and shall
pay all other fees and expenses necessarily incurred by the Company in
connection therewith.
12. Securities Laws Restrictions
A. Investment Representations.
The Company may require any person to whom an option is granted, as a
condition of exercising such option, to give written assurances in substance and
form satisfactory to the Company to the effect that such person is acquiring the
Common Stock subject to the option for his or her own account for investment and
not with any present intention of selling or otherwise distributing the same,
and to such other effects as the Company deems necessary or appropriate in order
to comply with federal and applicable state securities laws.
B. Compliance with Securities Laws.
Each option shall be subject to the requirement that if, at any time,
counsel to the Company shall determine that the listing, registration or
qualification of the shares subject to such option upon any securities exchange
or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
thereunder, such option may not be exercised, in whole or in part, unless such
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listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require the Company to
apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.
13. Change in Control
A. Impact of Event
In the event of a "Change in Control" as defined in Section 13(A), the
following provisions shall apply, unless the agreement evidencing the Award
otherwise provides (by specific explicit reference to Section 13(B) below). If a
Change in Control occurs while any Options are outstanding, then, effective upon
the Change in Control, each outstanding Option under the Plan that was not
previously exercisable and vested shall become immediately exercisable in full
and will no longer be subject to a right of repurchase by the Company.
B. Definition of "Change in Control"
"Change in Control" means an event or occurrence set forth in any one or
more of subsections (a) through (d) below (including an event or occurrence that
constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):
(a) the acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial
ownership of any capital stock of Thermo Electron Corporation ("Thermo
Electron") if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either
(i) the then-outstanding shares of common stock of Thermo Electron (the
"Outstanding TMO Common Stock") or (ii) the combined voting power of the
then-outstanding securities of Thermo Electron entitled to vote generally in the
election of directors (the "Outstanding TMO Voting Securities"); provided,
however, that for purposes of this subsection (a), the following acquisitions
shall not constitute a Change in Control: (i) any acquisition by Thermo
Electron, (ii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Thermo Electron or any corporation controlled by
Thermo Electron, or (iii) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i) and (ii) of subsection (c) of this
definition; or
(b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board of Directors of Thermo Electron (the "Thermo
Board") (or, if applicable, the Board of Directors of a successor corporation to
Thermo Electron), where the term "Continuing Director" means at any date a
member of the Thermo Board (i) who was a member of the Thermo Board as of July
1, 1999 or (ii) who was nominated or elected subsequent to such date by at least
a majority of the directors who were Continuing Directors at the time of such
nomination or election or whose election to the Thermo 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
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be excluded from this clause (ii) any individual whose initial assumption of
office occurred as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf of a person other than the
Thermo Board; or
(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving Thermo Electron or a sale
or other disposition of all or substantially all of the assets of Thermo
Electron in one or a series of transactions (a "Business Combination"), unless,
immediately following such Business Combination, each of the following two
conditions is satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding TMO Common Stock and
Outstanding TMO 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 Thermo Electron or substantially all of Thermo
Electron'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 TMO Common
Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person
(excluding the Acquiring Corporation or any employee benefit plan (or related
trust) maintained or sponsored by Thermo Electron or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 40% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors; or
(d) approval by the stockholders of Thermo Electron of a complete
liquidation or dissolution of Thermo Electron.
14. Amendment of the Plan
The provisions of Sections 3 and 5 of the Plan shall not be amended more
than once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, or the rules thereunder.
Subject to the foregoing, the Board of Directors may at any time, and from time
to time, modify or amend the Plan in any respect, except that if at any time the
approval of the Stockholders of the Company is required as to such modification
or amendment under Rule 16b-3, the Board of Directors may not effect such
modification or amendment without such approval.
The termination or any modification or amendment of the Plan shall not,
without the consent of an Optionee, affect his or her rights under an option
previously granted to him or her. With the consent of the Optionees affected,
the Board of Directors may amend outstanding option agreements in a manner not
inconsistent with the Plan. The Board of Directors shall have the right to amend
or modify the terms and provisions of the Plan and of any outstanding option to
the extent necessary to ensure the qualification of the Plan under Rule 16b-3.
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15. Effective Date of the Plan
The Plan shall become effective when adopted by the Board of Directors, but
no option granted under the Plan shall become exercisable until six months after
the Plan is approved by the Stockholders of the Company.
16. Notice
Any written notice to the Company required by any of the provisions of the
Plan shall be addressed to the Secretary of the Company and shall become
effective when it is received.
17. Governing Law
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware.
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