Exhibit 10.71
THERMOLYTE CORPORATION
EQUITY INCENTIVE PLAN
1. Purpose
The purpose of this Equity Incentive Plan (the "Plan") is to
secure for ThermoLyte Corporation (the "Company") and its
Stockholders the benefits arising from capital stock ownership by
employees, officers 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 two 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").
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3. Effective Date
The Plan shall be effective as of the date first approved by
the Board of Directors, subject to the approval of the Plan by
the Corporation's 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 the common stock, $.001 par value per share,
of the Company (the "Common Stock"), reserved and available for
distribution under the Plan shall be 500,000 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, officers 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 sentence 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 5% of the shares of Common Stock
outstanding at the beginning of such calendar year.
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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 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or options that are not intended to meet the
requirements of Section 422 ("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 the par value per share of Common Stock.
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
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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, 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 422 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
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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
be delivered pursuant to the Award, the Participant will instead
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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. 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.
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)
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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, 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 its parent corporation, Thermo Power
Corporation ("Power "), 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 applicable issuer, (ii) the failure of the Prior
Directors to constitute a majority of the Board of Directors of
the Company, Power or 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, Power or
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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, Power'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,
Power 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, Power 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, Power's or Thermo Electron's Common Stock, not
approved by the Prior Directors, by any Person other than
the Company, Power, Thermo Electron or a majority-owned
subsidiary of Thermo Electron.
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.
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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.
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10.5 Nontransferability of Awards
Except as otherwise specifically provided by the Board in
the case of participants who are not reporting persons under
Section 16 of the Exchange Act, 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, except pursuant to the terms of
a qualified domestic relations order as defined in the Code, 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).
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 with
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
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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.