Exhibit 10.39
THERMO PROCESS SYSTEMS INC.
DIRECTORS STOCK OPTION PLAN
(As amended and restated effective as of January 1, 1995)
1. Purpose
The purpose of this Directors Stock Option Plan (the "Plan") of Thermo
Process Systems Inc. (the "Company") is to encourage ownership in the
Company by non-management 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
two 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.
4. Stock Subject to the Plan
The maximum number of shares which may be issued under the Plan shall
be seventy-five thousand (75,000) shares of the Company's $.10 par value
Common Stock (the "Common Stock") and twenty-five thousand (25,000) shares
of the common stock of each Spinout Subsidiary (as defined in Section 5(B))
as of the date of the Annual Meeting of Stockholders on which options to
purchase such common stock are first granted to eligible Directors as
provided in Section 5(B), each 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 shall be granted an option to purchase 1,000 shares of the
Common Stock of the Company at the close of business on the date of such
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Annual meeting. Options granted under this Subsection A shall be
exercisable as to 100% of the shares subject to the option as set forth in
Section 5(C)(1), but shares acquired upon exercise are subject to
repurchase by the Company at the exercise price if an Optionee ceases to
serve as a director of the Company, Thermo Electron Corporation or any
subsidiary of Thermo Electron Corporation, prior to the first anniversary
of the grant date, for any reason other than death or disability.
B. Subsidiary Stock Option Grants.
Each Director of the Company who meets the requirements of Section 3
and this Section 5(B), from time to time in accordance with this Section
5(B), shall be granted an option to purchase shares of the common stock of
each majority-owned subsidiary of the Company, the common stock of which
shall have become publicly traded or a portion of which shall have been
sold primarily to third parties in a private placement or other arms-length
transaction (such transaction being referred to herein as a "Spinout
Transaction", and such subsidiary being referred to herein as a "Spinout
Subsidiary"), upon the following terms and conditions.
Each eligible Director who is not a Director of the Spinout Subsidiary
shall be granted an option to purchase 1,500 shares of common stock of the
Spinout Subsidiary as of the close of business on the date of the Company's
Annual Meeting of Stockholders that first occurs after the Spinout
Transaction, and also as of the close of business on the date of every
fifth Annual Meeting of Stockholders of the Company that occurs thereafter
during the duration of this Plan. For purposes of this Section 5(B),
options to purchase common stock of Thermo Remediation Inc., a majority
owned subsidiary of the Corporation, shall first be granted as of the close
of business on the date of the Company's 1995 Annual Meeting of
Stockholders.
Options granted under this Section 5(B) shall vest and be exercisable
as to 100% of the shares of common stock subject to the option on the
fourth anniversary of the grant date of the option, unless, prior to such
anniversary, the underlying common stock shall have been registered under
Section 12 of the Securities and Exchange Act of 1934, as amended (referred
to herein as "Section 12 Registration"). From and after 90 days after the
effective date of Section 12 Registration, options granted hereunder shall
be immediately exercisable as to 100% of the shares subject to the option,
subject to the right of the Company to repurchase the shares at the
exercise price in the event the Optionee ceases to serve as a director of
the Company, or any subsidiary of the Company or Thermo Election during the
option term. The right of the Company to so repurchase the shares shall
lapse as to one-fourth of the shares granted on each of the first, second,
third and fourth anniversaries of the grant date of the option, provided
the Optionee has remained continuously a director of the Company, Thermo
Electron or any subsidiary of Thermo Electron since the grant date. In all
other respects, the option shall be subject to the general terms and
conditions applicable to all option grants as set forth below in Section
5(C), including the determination of the exercise price of such option.
No Director, who is otherwise eligible under Section 3, shall be
eligible under this Section 5(B) to receive grants of stock options in
Spinout Subsidiaries, if such Director also serves as a director of such
Spinout Subsidiary.
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In the event any subsidiary shall become a "Spinout Subsidiary" as
defined herein, then there shall be immediately reserved for transfer
hereunder, on the date options to purchase common stock of the Spinout
Subsidiary are first granted to eligible Directors and without further
action required by the Board of Directors or Stockholders of the Company,
twenty-five thousand (25,000) shares of the common stock of such Spinout
Subsidiary.
C. General Terms and Conditions Applicable to All Grants.
1. Except as otherwise provided in Section 5(B), options shall be
exercisable at any time from and after the six-month anniversary
of the grant date and prior to the date which is the earliest of:
(a) three years after the grant date for options granted under
Section 5(A) and five years after the grant date for options
granted under Section 5(B), (b) three months after the later of
the date (i) the Optionee either ceases to meet the requirements
of Section 3 or (ii) otherwise ceases to serve as a director of
the Company, Thermo Electron or any subsidiary of Thermo Electron
(six months in the event the Optionee ceases to meet the
requirements of this Subsection by reason of his 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; provided, however, that such
exercise price per share shall not be lower than the par value
per share or less than 50% of the fair market value of the Common
Stock until such time as the Company elects to be subject to Rule
16b-3 as amended by SEC Rel. No. 33-28869.
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 its terms by written
notice of intent to exercise the option, specifying the number of shares of
stock with respect to which the option is then being exercised. The notice
shall be accompanied by payment in the form of cash or shares of the
Company's Common Stock (the "Tendered Shares") with a then current market
value equal to the exercise price of the shares to be purchased; provided,
however, that such Tendered Shares shall have been acquired by the Director
more than six months prior to the date of exercise (unless such requirement
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is waived in writing by the Company). Against such payment the Company
shall deliver or cause to be delivered to the Director a certificate for
the number of shares then being purchased, registered in the name of the
Director 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.
B. Tax Withholding
The Board of Directors or Committee will have the right to require
that the person exercising an option under the Plan remit to the Company an
amount sufficient to satisfy applicable federal, state and local tax
withholding requirements, or make other arrangements satisfactory to the
Company with regard to such requirements, if any, prior to the delivery of
any Common Stock. If and to the extent that such withholding is required,
the Board of Directors or Committee may permit the person exercising an
option under the Plan to elect at such time and in such manner as the Board
of Directors or Committee may provide 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.
7. Transferability
Options shall not be transferable, otherwise than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations
order as defined in the Internal Revenue Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder ("Qualified
Domestic Relations Order"). Options may be exercised during the life of the
Optionee only by the Optionee or a transferee pursuant to a Qualified
Domestic Relations Order.
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. Changes in Common Stock
If the outstanding shares of Common Stock are increased, decreased or
exchanged for a different number or kind of shares or other securities, or
if additional shares or new or different shares or other securities are
distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all
of the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to such shares of Common Stock, or other
securities, an appropriate proportionate adjustment may be made in the
maximum number or kind of shares reserved for issuance under the Plan. No
fractional shares will be issued under the Plan on account of any such
adjustments.
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10. Limitation of Rights in Option Stock
The Optionees shall have no rights as stockholders in respect of
shares as to which their 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 shares 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 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(B), the
following provisions shall apply, unless the agreement evidencing the Award
otherwise provides:
(a) Any stock options awarded under the Plan that were not
previously exercisable and vested shall become fully exercisable
and vested.
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(b) Shares purchased upon the exercise of options 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 options shall be free of restrictions.
B. Definition of "Change in Control"
"Change in Control" means any one of the following events: (i) when,
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 50% or more of the outstanding Common Stock of
the Company, or the beneficial owner of 25% or more of the outstanding
common stock of Thermo Electron Corporation ("Thermo Electron"), without
the prior approval of the Prior Directors of the Company or Thermo
Electron, as the case may be, (ii) the failure of the Prior Directors to
constitute a majority of the Board of the Company or of the Board of
Directors of Thermo Electron, as the case may be, 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 Company or Thermo Electron. 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 or Thermo Electron's Board of Directors, as the case
may be, immediately prior to any Electoral Event (or, if there
has been no Electoral Event, those persons sitting on the
applicable Board of Directors on the date of this Agreement) and
any future director of the Company or Thermo Electron 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 or
Thermo Electron, as the case may be; and
(c) "Electoral Event" shall mean any contested election of
Directors, or any tender or exchange offer for the Company's or
Thermo Electron's Common Stock, not approved by the Prior
Directors, by any Person other than the Company, Thermo Electron
or a subsidiary 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.
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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.
15. Effective Date of the Plan
The Plan shall become effective on the date 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.