Exhibit 10.1
As amended effective 6/3/97
[21]
THERMO ELECTRON CORPORATION
EQUITY INCENTIVE PLAN
1. Purpose
The purpose of this Equity Incentive Plan (the "Plan") is to secure for
Thermo Electron Corporation (the "Company") and its Stockholders the benefits
arising from capital stock ownership by employees and Directors of, and
consultants to, the Company and its subsidiaries or other persons who are
expected to make significant contributions to the future growth and success of
the Company and its subsidiaries. The Plan is intended to accomplish these goals
by enabling the Company to offer such persons equity-based interests,
equity-based incentives or performance-based stock incentives in the Company, or
any combination thereof ("Awards").
2. Administration
The Plan will be administered by the Board of Directors of the Company (the
"Board"). The Board shall have full power to interpret and administer the Plan,
to prescribe, amend and rescind rules and regulations relating to the Plan and
Awards, and full authority to select the persons to whom Awards will be granted
("Participants"), determine the type and amount of Awards to be granted to
Participants (including any combination of Awards), determine the terms and
conditions of Awards granted under the Plan (including terms and conditions
relating to events of merger, consolidation, dissolution and liquidation, change
of control, vesting, forfeiture, restrictions, dividends and interest, if any,
on deferred amounts), waive compliance by a participant with any obligation to
be performed by him or her under an Award, waive any term or condition of an
Award, cancel an existing Award in whole or in part with the consent of a
Participant, grant replacement Awards, accelerate the vesting or lapse of any
restrictions of any Award and adopt the form of instruments evidencing Awards
under the Plan and change such forms from time to time. Any interpretation by
the Board of the terms and provisions of the Plan or any Award thereunder and
the administration thereof, and all action taken by the Board, shall be final,
binding and conclusive on all parties and any person claiming under or through
any party. No Director shall be liable for any action or determination made in
good faith. The Board may, to the full extent permitted by law, delegate any or
all of its responsibilities under the Plan to a committee (the "Committee")
appointed by the Board and consisting of three or more members of the Board,
each of whom shall be deemed a "disinterested person" within the meaning of Rule
16b-3 (or any successor rule) of the Securities Exchange Act of 1934 (the
"Exchange Act"). As to Awards granted to Participants who are not reporting
persons subject to Section 16 of the Exchange Act, the Board may delegate any or
all of its responsibilities to the Company's Operating Committee or to other
appropriate officers of the Company.
3. Effective Date
The Plan shall be effective as of April 6, 1989, subject to the approval of
the Plan by a majority of the votes cast by the holders of the Company's Common
Stock at the next annual meeting of Stockholders. Grants of Awards under the
Plan made prior to such approval shall be effective when made (unless otherwise
specified by the Board at the time of grant), but shall be conditioned on and
subject to such approval of the Plan.
4. Shares Subject to the Plan
Subject to adjustment as provided in Section 10.6, the total number of
shares of Common Stock reserved and available for distribution under the Plan
shall be 13,544,311 shares. Such shares may consist, in whole or in part, of
authorized and unissued shares or treasury shares.
If any Award of shares of Common Stock requiring exercise by the Participant
for delivery of such shares terminates without having been exercised in full, is
forfeited or is otherwise terminated without a payment being made to the
Participant in the form of Common Stock, or if any shares of Common Stock
subject to restrictions are repurchased by the Company pursuant to the terms of
any Award or are otherwise reacquired by the Company to satisfy obligations
arising by virtue of any Award, such shares shall be available for distribution
in connection with future Awards under the Plan.
5. Eligibility
Employees and Directors of, and consultants to, the Company and its
subsidiaries, or other persons who are expected to make significant
contributions to the future growth and success of the Company and its
subsidiaries shall be eligible to receive Awards under the Plan. The Board, or
other appropriate committee or person to the extent permitted pursuant to the
last two sentences of Section 2, shall from time to time select from among such
eligible persons those who will receive Awards under the Plan.
6. Types of Awards
The Board may offer Awards under the Plan in any form of equity-based
interest, equity-based incentive or performance-based stock incentive in Common
Stock of the Company or any combination thereof. The type, terms and conditions
and restrictions of an Award shall be determined by the Board at the time such
Award is made to a Participant; provided, however, that the maximum number of
shares permitted to be granted under any Award or combination of Awards to any
Participant during any one calendar year may not exceed 1% of the shares of
Common Stock outstanding at the beginning of such calendar year.
6. Types of Awards (continued)
An Award shall be made at the time specified by the Board and shall be
subject to such conditions or restrictions as may be imposed by the Board and
shall conform to the general rules applicable under the Plan as well as any
special rules then applicable under federal tax laws or regulations or the
federal securities laws relating to the type of Award granted.
Without limiting the foregoing, Awards may take the following forms and
shall be subject to the following rules and conditions:
6.1 Options
An option is an Award that entitles the holder on exercise thereof to
purchase Common Stock at a specified exercise price. Options granted under the
Plan may be either incentive stock options ("incentive stock options") that meet
the requirements of Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"), or options that are not intended to meet the requirements
of Section 422A ("non-statutory options").
6.1.1 Option Price. The price at which Common Stock may be purchased upon
exercise of an option shall be determined by the Board, provided however, the
exercise price shall not be less than 50% of the fair market value of such stock
on the date of grant or, alternatively, the par value per share of Common Stock,
provided further, in the case of reporting persons subject to Section 16 of the
Exchange Act, the exercise price may not be less than 50% of the fair market
value of the stock on the date of grant unless a lower price is permissible
under Rule 16b-3.
6.1.2 Option Grants. The granting of an option shall take place at the time
specified by the Board. Options shall be evidenced by option agreements. Such
agreements shall conform to the requirements of the Plan, and may contain such
other provisions (including but not limited to vesting and forfeiture
provisions, acceleration, change of control, protection in the event of merger,
consolidations, dissolutions and liquidations) as the Board shall deem
advisable. Option agreements shall expressly state whether an option grant is
intended to qualify as an incentive stock option or non-statutory option.
6.1.3 Option Period. An option will become exercisable at such time or times
(which may be immediately or in such installments as the Board shall determine)
and on such terms and conditions as the Board shall specify. The option
agreements shall specify the terms and conditions applicable in the event of an
option holder's termination of employment during the option's term.
Any exercise of an option must be in writing, signed by the proper person
and delivered or mailed to the Company, accompanied by (1) any additional
documents required by the Board and (2) payment in full in accordance with
Section 6.1.4 for the number of shares for which the option is exercised.
6.1.4 Payment of Exercise Price. Stock purchased on exercise of an option
shall be paid for as follows: (1) in cash or by check (subject to such
guidelines as the Company may establish for this purpose), bank draft or money
order payable to the order of the Company or (2) if so permitted by the
instrument evidencing the option (or in the case of a non-statutory option, by
the Board at or after grant of the option), (i) through the delivery of shares
of Common Stock that have been outstanding for at least six months (unless the
Board expressly approves a shorter period) and that have a fair market value
(determined in accordance with procedures prescribed by the Board) equal to the
exercise price, (ii) by delivery of a promissory note of the option holder to
the Company, payable on such terms as are specified by the Board, (iii) by
delivery of an unconditional and irrevocable undertaking by a broker to deliver
promptly to the Company sufficient funds to pay the exercise price, or (iv) by
any combination of the permissible forms of payment.
6.1.5 Buyout Provision. The Board may at any time offer to buy out for a
payment in cash, shares of Common Stock, deferred stock or restricted stock, or
an option previously granted, based on such terms and conditions as the Board
shall establish and communicate to the option holder at the time that such offer
is made.
6.1.6 Special Rules for Incentive Stock Options. Each provision of the Plan
and each option agreement evidencing an incentive stock option shall be
construed so that each incentive stock option shall be an incentive stock option
as defined in Section 422A of the Code or any statutory provision that may
replace such Section, and any provisions thereof that cannot be so construed
shall be disregarded. Instruments evidencing incentive stock options must
contain such provisions as are required under applicable provisions of the Code.
Incentive stock options may be granted only to employees of the Company and its
subsidiaries. The exercise price of an incentive stock option shall not be less
than 100% (110% in the case of an incentive stock option granted to a more than
ten percent Stockholder of the Company) of the fair market value of the Common
Stock on the date of grant, as determined by the Board. An incentive stock
option may not be granted after the tenth anniversary of the date on which the
Plan was adopted by the Board and the latest date on which an incentive stock
option may be exercised shall be the tenth anniversary (fifth anniversary, in
the case of any incentive stock option granted to a more than ten percent
Stockholder of the Company) of the date of grant, as determined by the Board.
6.2 Restricted and Unrestricted Stock
An Award of restricted stock entitles the recipient thereof to acquire
shares of Common Stock upon payment of the purchase price subject to
restrictions specified in the instrument evidencing the Award.
6.2.1 Restricted Stock Awards. Awards of restricted stock shall be evidenced
by restricted stock agreements. Such agreements shall conform to the
requirements of the Plan, and may contain such other provisions (including
restriction and forfeiture provisions, change of control, protection in the
event of mergers, consolidations, dissolutions and liquidations) as the Board
shall deem advisable.
6.2.2 Restrictions. Until the restrictions specified in a restricted stock
agreement shall lapse, restricted stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of, and upon certain conditions
specified in the restricted stock agreement, must be resold to the Company for
the price, if any, specified in such agreement. The restrictions shall lapse at
such time or times, and on such conditions, as the Board may specify. The Board
may at any time accelerate the time at which the restrictions on all or any part
of the shares shall lapse.
6.2.3 Rights as a Stockholder. A Participant who acquires shares of
restricted stock will have all of the rights of a Stockholder with respect to
such shares including the right to receive dividends and to vote such shares.
Unless the Board otherwise determines, certificates evidencing shares of
restricted stock will remain in the possession of the Company until such shares
are free of all restrictions under the Plan.
6.2.4 Purchase Price. The purchase price of shares of restricted stock shall
be determined by the Board, in its sole discretion, but such price may not be
less than the par value of such shares.
6.2.5 Other Awards Settled With Restricted Stock. The Board may provide that
any or all the Common Stock delivered pursuant to an Award will be restricted
stock.
6.2.6 Unrestricted Stock. The Board may, in its sole discretion, sell to any
Participant shares of Common Stock free of restrictions under the Plan for a
price determined by the Board, but which may not be less than the par value per
share of the Common Stock.
6.3 Deferred Stock
6.3.1 Deferred Stock Award. A deferred stock Award entitles the recipient to
receive shares of deferred stock which is Common Stock to be delivered in the
future. Delivery of the Common Stock will take place at such time or times, and
on such conditions, as the Board may specify. The Board may at any time
accelerate the time at which delivery of all or any part of the Common Stock
will take place.
6.3.2 Other Awards Settled with Deferred Stock. The Board may, at the time
any Award described in this Section 6 is granted, provide that, at the time
Common Stock would otherwise by delivered pursuant to the Award, the Participant
will instead receive an instrument evidencing the right to future delivery of
deferred stock.
6.4 Performance Awards
6.4.1 Performance Awards. A performance Award entitles the recipient to
receive, without payment, an amount, in cash or Common Stock or a combination
thereof (such form to be determined by the Board), following the attainment of
performance goals. Performance goals may be related to personal performance,
corporate performance, departmental performance or any other category of
performance deemed by the Board to be important to the success of the Company.
The Board will determine the performance goals, the period or periods during
which performance is to be measured and all other terms and conditions
applicable to the Award.
6.4.2 Other Awards Subject to Performance Conditions. The Board may, at the
time any Award described in this Section 6 is granted, impose the condition (in
addition to any conditions specified or authorized in this Section 6 of the
Plan) that performance goals be met prior to the Participant's realization of
any payment or benefit under the Award.
7. Purchase Price and Payment
Except as otherwise provided in the Plan, the purchase price of Common Stock
to be acquired pursuant to an Award shall be the price determined by the Board,
provided that such price shall not be less than the par value of the Common
Stock. Notwithstanding anything in the Plan to the contrary, so long as is
required for the Plan to constitute a "plan" under Rule 16b-3 of the Exchange
Act, no Common Stock may be issued to a reporting person subject to Section 16
of the Exchange Act unless (a) issued at a purchase price not in excess of the
par value of the Common Stock or (b) sold by the Company for a price not less
than 50% of the fair market value of the Common Stock on the date of grant of
the related Award. Except as otherwise provided in the Plan, the Board may
determine the method of payment of the exercise price or purchase price of an
Award granted under the Plan and the form of payment. The Board may determine
that all or any part of the purchase price of Common Stock pursuant to an Award
has been satisfied by past services rendered by the Participant. The Board may
agree at any time, upon request of the Participant, to defer the date on which
any payment under an Award will be made.
8. Loans and Supplemental Grants
The Company may make a loan to a Participant, either on or after the grant
to the Participant of any Award, in connection with the purchase of Common Stock
under the Award or with the payment of any obligation incurred or recognized as
a result of the Award. The Board will have full authority to decide whether the
loan is to be secured or unsecured or with or without recourse against the
borrower, the terms on which the loan is to be repaid and the conditions, if
any, under which it may be forgiven.
8. Loans and Supplemental Grants (continued)
In connection with any Award, the Board may at the time such Award is made
or at a later date, provide for and make a cash payment to the Participant not
to exceed an amount equal to (a) the amount of any federal, state and local
income tax or ordinary income for which the Participant will be liable with
respect to the Award, plus (b) an additional amount on a grossed-up basis
necessary to make him or her whole after tax, discharging all the Participant's
income tax liabilities arising from all payments under the Plan.
9. Change in Control
9.1 Impact of Event
In the event of a "Change in Control" as defined in Section 9.2, the
following provisions shall apply, unless the agreement evidencing the Award
otherwise provides:
(a) Any stock options or other stock-based Awards awarded under the Plan that
were not previously exercisable and vested shall become fully exercisable
and vested.
(b) Awards of restricted stock and other stock-based Awards subject to
restrictions and to the extent not fully vested, shall become fully vested
and all such restrictions shall lapse so that shares issued pursuant to such
Awards shall be free of restrictions.
(c) Deferral limitations and conditions that relate solely to the passage of
time, continued employment or affiliation, will be waived and removed as to
deferred stock Awards and performance Awards. Performance of other
conditions (other than conditions relating solely to the passage of time,
continued employment or affiliation) will continue to apply unless otherwise
provided in the agreement evidencing the Awards or in any other agreement
between the Participant and the Company or unless otherwise agreed by the
Board.
9.2 Definition of "Change in Control"
"Change in Control" means any one of the following events: (i) when, without
the prior approval of the Prior Directors of the Company, any Person is or
becomes the beneficial owner (as defined in Section 13(d) of the Exchange Act
and the Rules and Regulations thereunder), together with all Affiliates and
Associates (as such terms are used in Rule 12b-2 of the General Rules and
Regulations of the Exchange Act) of such Person, directly or indirectly, of 25%
or more of the outstanding Common Stock of the Company, (ii) the failure of the
Prior Directors to constitute a majority of the Board of Directors at any time
within two years following any Electoral Event, or (iii) any other event that
the Prior Directors shall determine constitutes an effective change in the
control of the
9.2 Definition of "Change in Control" (continued)
Company. As used in the preceding sentence, the following capitalized
terms shall have the respective meanings set forth below:
(a) "Person" shall include any natural person, any entity, any "affiliate" of
any such natural person or entity as such term is defined in Rule 405 under
the Securities Act of 1933 and any "group" (within the meaning of such term
in Rule 13d-5 under the Exchange Act);
(b) "Prior Directors" shall mean the persons sitting on the Company's Board of
Directors immediately prior to any Electoral Event (or, if there has been no
Electoral Event, those persons sitting on the Company's Board of Directors
on the date of this Agreement) and any future director of the Company who
has been nominated or elected by a majority of the Prior Directors who are
then members of the Board of Directors of the Company; and
(c) "Electoral Event" shall mean any contested election of Directors, or any
tender or exchange offer for the Company's Common Stock, not approved by the
Prior Directors, by any Person other than the Company or a subsidiary of the
Company.
10. General Provisions
10.1 Documentation of Awards
Awards will be evidenced by written instruments, which may differ among
Participants, prescribed by the Board from time to time. Such instruments may be
in the form of agreements to be executed by both the Participant and the Company
or certificates, letters or similar instruments which need not be executed by
the Participant but acceptance of which will evidence agreement to the terms
thereof. Such instruments shall conform to the requirements of the Plan and may
contain such other provisions (including provisions relating to events of
merger, consolidation, dissolution and liquidations, change of control and
restrictions affecting either the agreement or the Common Stock issued
thereunder), as the Board deems advisable.
10.2 Rights as a Stockholder
Except as specifically provided by the Plan or the instrument evidencing the
Award, the receipt of an Award will not give a Participant rights as a
Stockholder with respect to any shares covered by an Award until the date of
issue of a stock certificate to the Participant for such shares.
10.3 Conditions on Delivery of Stock
The Company will not be obligated to deliver any shares of Common Stock
pursuant to the Plan or to remove any restriction from shares previously
delivered under the Plan (a) until all conditions of the Award have been
satisfied or removed, (b) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been complied with, (c)
if the outstanding Common Stock is at the time listed on any stock exchange,
until the shares have been listed or authorized to be listed on such exchange
upon official notice of issuance, and (d) until all other legal matters in
connection with the issuance and delivery of such shares have been approved by
the Company's counsel. If the sale of Common Stock has not been registered under
the Securities Act of 1933, as amended, the Company may require, as a condition
to exercise of the Award, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such act and may require
that the certificates evidencing such Common Stock bear an appropriate legend
restricting transfer.
If an Award is exercised by the Participant's legal representative, the
Company will be under no obligation to deliver Common Stock pursuant to such
exercise until the Company is satisfied as to the authority of such
representative.
10.4 Tax Withholding
The Company will withhold from any cash payment made pursuant to an Award an
amount sufficient to satisfy all federal, state and local withholding tax
requirements (the "withholding requirements").
In the case of an Award pursuant to which Common Stock may be delivered, the
Board will have the right to require that the Participant or other appropriate
person remit to the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the Board with regard
to such requirements, prior to the delivery of any Common Stock. If and to the
extent that such withholding is required, the Board may permit the Participant
or such other person to elect at such time and in such manner as the Board
provides to have the Company hold back from the shares to be delivered, or to
deliver to the Company, Common Stock having a value calculated to satisfy the
withholding requirement.
10.5 Nontransferability of Awards
Except as may be authorized by the Board, in its sole discretion, no Award
(other than an Award in the form of an outright transfer of cash or Common Stock
not subject to any restrictions) may be transferred other than by the laws of
descent and distribution, and during a Participant's lifetime an Award requiring
exercise 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 Awards granted to a
Participant may be transferable, and such provisions permitting or acknowledging
transfer shall be set forth in the written agreement evidencing the Award
executed and delivered by or on behalf of the Company and the Participant.
10.6 Adjustments in the Event of Certain Transactions
(a) In the event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capitalization, or other
distribution with respect to common Stockholders 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 Awards then outstanding or subsequently granted, any exercise prices
relating to Awards and any other provisions of Awards affected by such change.
(b) The Board may also make appropriate adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions, repurchases or similar corporate
transactions, or any other event, if it is determined by the Board that
adjustments are appropriate to avoid distortion in the operation of the Plan,
but no such adjustments other than those required by law may adversely affect
the rights of any Participant (without the Participant's consent) under any
Award previously granted.
10.7 Employment Rights
Neither the adoption of the Plan nor the grant of Awards will confer upon
any person any right to continued employment with the Company or any subsidiary
or interfere in any way the right of the Company or subsidiary to terminate any
employment relationship at any time or to increase or decrease the compensation
of such person. Except as specifically provided by the Board in any particular
case, the loss of existing or potential profit in Awards granted under the Plan
will not constitute an element of damages in the event of termination of an
employment relationship even if the termination is in violation of an obligation
of the Company to the employee.
Whether an authorized leave of absence, or absence in military or government
service, shall constitute termination of employment shall be determined by the
Board at the time. For purposes of this Plan, transfer of employment between the
Company and its subsidiaries shall not be deemed termination of employment.
10.8 Other Employee Benefits
The value of an Award granted to a Participant who is an employee, and the
amount of any compensation deemed to be received by an employee as a result of
any exercise or purchase of Common Stock pursuant to an Award or sale of shares
received under the Plan, will not constitute "earnings" or "compensation" with
respect to which any other employee benefits of such employee are determined,
including without limitation benefits under any pension, stock ownership, stock
purchase, life insurance, medical, health, disability or salary continuation
plan.
10.9 Legal Holidays
If any day on or before which action under the Plan must be taken falls on a
Saturday, Sunday or legal holiday, such action may be taken on the next
succeeding day not a Saturday, Sunday or legal holiday.
10.10 Foreign Nationals
Without amending the Plan, Awards may be granted to persons who are foreign
nationals or employed outside the United States or both, on such terms and
conditions different from those specified in the Plan, as may, in the judgment
of the Board, be necessary or desirable to further the purpose of the Plan.
11. Termination and Amendment
The Plan shall remain in full force and effect until terminated by the
Board. Subject to the last sentence of this Section 11, the Board may at any
time or times amend the Plan or any outstanding Award for any purpose that may
at the time be permitted by law, or may at any time terminate the Plan as to any
further grants of Awards. No amendment, unless approved by the Stockholders,
shall be effective if it would cause the Plan to fail to satisfy the
requirements of the federal tax law or regulation relating to incentive stock
options or the requirements of Rule 16b-3 (or any successor rule) of the
Exchange Act. No amendment of the Plan or any agreement evidencing Awards under
the Plan may adversely affect the rights of any Participant under any Award
previously granted without such Participant's consent.