Exhibit 10.2
September 15, 1998
Mr. John N. Hatsopoulos
3 Woodcock Lane
Lincoln, MA 01773
Dear John:
This letter confirms our arrangement regarding your retirement as chief
financial officer of Thermo Electron Corporation (the "Company") and as an
officer of any of its subsidiaries or affiliates, and also your subsequent
appointment as a consultant to the Company.
The following is our agreement related to your retirement from the
Company:
1. Termination of Employment: Your employment with the Company will
terminate as of December 31, 1998 (the "Employment Termination Date"). You will
be paid your regular salary through the Employment Termination Date.
2. 1998 Bonus: You will be entitled to receive a bonus for the 1998
calendar year in an amount to be determined on the same basis as other similarly
situated Company executives, which bonus shall be payable at such time as such
bonuses are normally paid.
3. Accrued Vacation/Expenses: You will be paid for any accrued but unused
vacation time you had earned through the Employment Termination Date. You will
not continue to earn vacation or other paid time off after the Employment
Termination Date. Reconciliation of your outstanding expense account as of the
Employment Termination Date shall be made with the approval of the chairman of
the audit committee of the Board of Directors of the Company. Any amount
outstanding on your account as of such date shall be deducted from the amount
payable for your accrued vacation time.
4. Full Payment: You agree that all payments provided to you under
paragraphs 1, 2 and 3 of this Agreement are in complete satisfaction of any and
all compensation due to you from the Company through the Employment Termination
Date.
5. Position: The Company shall nominate you for election to its Board of
Directors at its 1999 Annual Meeting of Stockholders and its 2002 Annual Meeting
of Stockholders. Assuming you are elected director by the Company's shareholders
and subject to the Board of Directors fiduciary duties, the Company shall use
its best efforts to cause you to remain Vice Chairman of the Board of Directors
of the Company, a non-executive position with the Company, during the term of
this Agreement. You will not be entitled to receive any cash compensation for
your service as a director of the Company or any subsidiary thereof.
6. Employee Benefit Programs: Your participation in all employee benefit
programs of the Company shall cease as of the Employment Termination Date in
accordance with the terms of those programs. The Company will use its best
efforts to obtain for you during the term of this Agreement health and dental
care insurance for you and your dependents with substantially the same coverage
as currently in effect, at the Company's sole cost and expense. You will also
have the option, at your sole expense, of converting your basic life insurance
coverage to an individual plan through Prudential. If interested, please let us
know within 15 days following the Employment Termination Date and conversion
information will be furnished to you. A conversion option is not available for
long term disability coverage.
7. Money Match Plus Plan: Your active participation in the Money Match
Plus Plan shall end on the Employment Termination Date. Information will be
provided to you regarding various election options available to you regarding
your account.
8. Stock Options: So long as you remain a director of one or more Thermo
Electron companies, you shall be entitled to retain your stock options in the
Company and any of its subsidiaries, subject to the terms and conditions of such
options.
9. Taxes: All payments by the Company under this Agreement will be reduced
by all taxes and other amounts that the Company is required to withhold under
applicable law and all other deductions authorized by you.
10. Consulting Services: You agree to provide, and make yourself available
to provide, consulting services to the Company on a half-time basis, at such
time or times as is mutually agreeable by the parties. The term of this
consulting arrangement shall commence on the day immediately following the
Employment Termination Date and terminate on the fifth anniversary of the
Employment Termination Date. The Company shall provide you with an office, which
will be equipped with one fully-operational quotron machine for your use. The
Company will also provide you with the support services of one full-time
secretary. You agree to use your best efforts, business judgment and skill in
rendering consulting services hereunder. This Agreement shall not prohibit you
from serving on the board of directors of LOIS/USA Inc. and Premier, Inc. or
from engaging in any other business activities during the consulting period
provided that such other business activities (i) shall be subject to the prior
approval of the Company, which approval shall not be unreasonably withheld, and
provided such approval or disapproval shall be communicated to you in writing
within 10 business days of such request for approval (it being understood that
the failure by the Company to so communicate its disapproval in writing within
such 10-day period shall be deemed an approval of such request), and (ii) do not
prevent you from performing your obligations under this consulting arrangement.
It is expressly agreed that you are acting as an independent contractor in
performing your services hereunder and not as an employee or agent of the
Company and as such will not be treated as an employee for any reason
whatsoever, including but not limited to federal or state tax purposes. In the
event of your death, disability or other incapacity resulting in your inability
to perform your consulting duties hereunder, all compensation due and owing
under this Section 10 shall continue to be payable to you or your estate. The
Company may terminate your consulting arrangement for Cause and, in such event,
the Company shall have no further obligation to you under this consulting
arrangement. "Cause" shall mean your (a) conviction of a felony, or a
misdemeanor involving material fraud or material dishonesty, (b) material fraud
or material dishonesty in the course of consulting hereunder, (c) gross
misconduct that is injurious to the Company or its subsidiaries and affiliates,
or (d) gross neglect of your duties and responsibilities under the terms of this
consulting arrangement.
11. Consultant Compensation: In consideration for your agreement to
provide consulting services, the Company shall pay you an amount equal to
$500,000 per year for the term of this Agreement, payable monthly in arrears,
provided you continue to comply with the terms of this Agreement. The Company
shall reimburse you for all reasonable out-of-pocket costs and expenses incurred
by you in connection with your provision of consulting services to the Company
hereunder, subject to the prior approval of the Company.
12. Company Property: You will return to the Company any and all
documents, materials and information related to the Company, or its
subsidiaries, affiliates or businesses, and all other property of the Company,
including, without limitation, files and personal computers in your possession
or control, on or before the Employment Termination Date. You may, however,
retain your Company credit cards. Further, the Company agrees to transfer to you
title to your Company leased vehicle for $100 and the difference between the
current market value of such vehicle and such purchase price will be deemed to
be additional wages and as such will be reported as wages on your W-2 statement.
13. Restriction on Purchase or Sale of Common Stock: You understand that
you will continue to be a "Reporting Person" for purposes of Section 16 of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder, and you will remain subject to insider trading regulations under the
federal securities laws, for as long as you remain a director of the Company
and/or any of its subsidiaries and for a period of six months following the
termination of all such positions and that you are requested to preclear
transactions in the Company and its subsidiaries' securities with the Company's
Stock Transaction Coordinator, Ms. Pauline I. Northern. You are also urged to
contact the Corporate Secretary of the Company, Ms. Sandra L. Lambert, should
you have any questions regarding compliance with the insider trading regulations
under the federal securities laws.
14. Resignation: In connection with your retirement, you hereby resign
effective as of the day immediately following the Employment Termination Date
all of your positions as an officer of the Company and all of its subsidiaries
and affiliates.
15. Company Information and Invention Agreement: You agree to execute and
comply with the terms of the Thermo Electron Company Information and Invention
Agreement, a copy of which is attached hereto. Such agreement supersedes any
prior agreement covering the same subject matter which you may have signed with
the Company.
16. Non-Disparagement: You agree that you will continue to support and
promote the interests of the Company and its subsidiaries and affiliates and
that you will not disparage the Company or its subsidiaries or affiliates, or
any of the people or organizations connected with them, or do or say anything
that could disrupt the good morale of the employees of the Company or otherwise
harm the interests or reputation of the Company and its subsidiaries and
affiliates and any of the organizations or people connected with them. The
Company agrees that it will cause the officers of the Company and its
subsidiaries not to disparage you or otherwise do or say anything that harms
your reputation and that the Company shall be solely responsible for any breach
of the provisions contained in this Section 16 by any such officers. Should any
party violate the requirements of this provision, any non-breaching party shall
be relieved of the requirements of this provision to the extent necessary to
respond to statements made by the breaching party. Nothing in this provision
shall prevent the parties from (i) complying with compulsory legal process or
otherwise making disclosures in connection with litigation or administrative
proceedings, (ii) making such disclosures as are necessary to obtain legal
advice, (iii) making disclosures as are required by federal, state or local
regulatory authorities, and (iv) making disclosures which by law are required or
cannot be prohibited.
17. Cooperation: You agree to reasonably cooperate with the Company with
respect to all matters arising during or related to your past employment and
your consulting services provided hereunder, including but not limited to
cooperation in connection with any governmental investigation, litigation or
regulatory or other proceeding which may have arisen or which may arise
following the signing of this Agreement.
18. Waiver of Trial by Jury: Each of the parties hereby expressly,
knowingly and voluntarily waives all benefit and advantage of any right to a
trial by jury, and each agrees that he or it will not at any time insist upon,
or plead or in any manner whatsoever claim or take the benefit or advantage of,
a trial by jury in any action arising in connection with this Agreement.
19. Entire Agreement: This letter contains the entire Agreement between
you and the Company and replaces all prior and contemporaneous agreements,
communications and understandings, whether written or oral, with respect to your
retirement, your employment and its termination and all related matters,
including without limitation your Severance Benefit Agreement with the Company
dated February 28, 1983. This Agreement will be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts without regard to
choice of law provisions.
20. Severability: If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and replaced with a provision which is enforceable and comes
closest to the intent of the parties underlying the unenforceable provision.
21. Relief: In the event of breach of the provisions of this Agreement by
any party, in addition to any other rights that the other party may have under
law or in equity, each party shall have the right to specific performance and
injunctive relief, it being acknowledged and agreed that money damages will not
provide an adequate remedy. In the event litigation is brought with respect to
this Agreement, the prevailing party shall be entitled to recover from the
losing party his or its reasonable attorney's fees and expenses.
22. Successors and Assigns: No party hereto may assign any of its rights
under this Agreement without the prior written consent of the other party. This
Agreement is binding on each of the parties' permitted assigns, successors in
interest, heirs, administrators and executors.
23. Term: This Agreement shall terminate on the fifth anniversary of the
Employment Termination Date. Notwithstanding the foregoing, the Thermo Electron
Company Information and Invention Agreement, a copy of which is attached hereto,
shall have no termination date.
24. Voluntary Agreement: In signing this Agreement, you give the Company
assurance that you have signed it voluntarily and with a full understanding of
its terms and that you have had sufficient opportunity to consider this
Agreement and to consult with anyone of your choosing before signing it. If the
terms of this Agreement are acceptable to you, please sign and return it to the
undersigned. At the time you sign and return this Agreement, it will take effect
as a legally-binding agreement between you and the Company on the basis set
forth above.
THERMO ELECTRON CORPORATION
Anne Pol
-------------------------------
By: Anne Pol
Title: Senior Vice President
George N. Hatsopoulos
-------------------------------
By: George N. Hatsopoulos
Title: Chief Executive Officer
Accepted and Agreed to:
John N. Hatsopoulos
- ----------------------
John N. Hatsopoulos
Thermo Electron
COMPANY INFORMATION AND INVENTION AGREEMENT
In consideration and as a condition of my engagement as a consultant to
Thermo Electron Corporation (the "Company") and the compensation paid therefor:
1. I agree not to disclose to others or use for my own benefit during the
term of my consulting arrangement with the Company or thereafter any trade
secrets or private or confidential information pertaining to any of the
actual or anticipated business of the Company, its subsidiaries or
affiliates, or any of their respective customers, consultants, or
licensees, either previously acquired by me during the period of my
employment with the Company or acquired by me during the period of my
consulting arrangement with the Company, except to such an extent as may
be necessary in the ordinary course of performing my particular duties as
a consultant to the Company.
2. I agree not to disclose to the Company, its subsidiaries and affiliates,
or to induce the Company, its subsidiaries and affiliates, to use, any
confidential information or material belonging to persons other than the
Company, its subsidiaries or affiliates.
3. I understand that the making of inventions, improvements and discoveries
had been one of the incidents of my employment with the Company and may be
one of the incidents of my consulting arrangement, and I agree to assign
to the Company or its nominee my entire right, title and interest in any
invention, idea, device or process, whether patentable or not, (i) 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 on behalf of the Company, or
(ii) made or conceived by me solely or jointly with others during the
period of my consulting arrangement with the Company which relates in any
manner to the business of the Company or any of its subsidiaries or
affiliates.
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 the Company or its nominee 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 within the terms of this 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 upon any
termination of my consulting arrangement by me or the Company or upon
request at any other time either during or after the termination of such
consulting arrangement.
6. I further agree that the obligations and undertakings stated above in
paragraph 4b shall continue beyond the termination of my consulting
arrangement with the Company, but if I am called upon to render such
assistance after the termination of my consulting arrangement, 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 or any of its
subsidiaries or affiliates, including the Company, in which
I have right, title or interest, and which had been
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 the term of my consulting
arrangement with the Company. This Agreement shall inure to
the benefit 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.
John N. Hatsopoulos
Consultant
Jonathan C. Wilk
Witness Date
THERMO ELECTRON CORPORATION
By: George N. Hatsopoulos
Seth H. Hoogasian
Witness Date