EXHIBIT 10.8
THERMEDICS DETECTION INC.
DEFERRED COMPENSATION PLAN FOR DIRECTORS
Section 1. PARTICIPATION. Any director of Thermedics Detection Inc. (the
"Company") may elect to have such percentage as he or she may specify of the
fees otherwise payable to him or her deferred and paid to him or her as provided
in this Plan. A director who is also an officer of the Company or its parent
corporation, Thermo Electron Corporation, shall not be eligible to participate
in this Plan. Each election shall be made by notice in writing delivered to the
Clerk of the Company, in such form as the Clerk shall designate, and each
election shall be applicable only with respect to fees earned subsequent to the
date of the election for the period designated in the form. The term
"participant" as used herein refers to any director who shall have made an
election. No participant may defer the receipt of any fees to be earned after
the later to occur of either (a) the date on which the participant shall retire
from or otherwise cease to engage in his or her principal occupation or
employment or (b) the date on which he or she shall cease to be a director of
the Company, or such earlier date as the Board of Directors of the Company, with
the participant's consent, may designate (the "deferral termination date"). In
the event that the participant's deferral termination date is the date on which
he or she ceases to engage in his or her principal occupation or employment, the
participant or a personal representative shall advise the Company of that date
by written notice delivered to the Clerk of the Company.
Section 2. ESTABLISHMENT OF DEFERRED COMPENSATION ACCOUNTS. There shall be
established for each participant an account to be designated as that
participant's deferred compensation account.
Section 3. ALLOCATIONS TO DEFERRED COMPENSATION ACCOUNTS. There shall be
allocated to each participant's deferred compensation account, as of the end of
each quarter, an amount equal to his or her fees for that quarter which that
participant shall have elected to have deferred pursuant to Section 1.
Section 4. STOCK UNITS AND STOCK UNIT ACCOUNTS. All amounts allocated to
a participant's deferred compensation account pursuant to Section 3 and Section
5 shall be converted, at the end of each quarter, into stock units by dividing
the accumulated balance in the deferred compensation account as of the end of
that quarter by the average last sale price per share of the Company's common
stock as reported on in The Wall Street Journal, for the five business days up
to and including the last business day of that quarter. The number of stock
units, so determined, rounded to the nearest one-hundredth of a share, shall be
credited to a separate stock unit account to be established for the participant,
and the aggregate value thereof as of the last business day of that quarter
shall be charged to the participant's deferred compensation account. No amounts
credited to the participant's deferred compensation account pursuant to Section
5 subsequent to the close of the fiscal year in which occurs the participant's
deferral termination date shall be converted into stock units. Any such amount
shall be distributed in cash
as provided in Section 8. A maximum number of 25,000 shares of the Company's
common stock may be represented by stock units credited under this Plan, subject
to proportionate adjustment in the event of any stock dividend, stock split or
other capital change affecting the Company's common stock.
Section 5. CASH DIVIDEND CREDITS. Additional credits shall be made to a
participant's deferred compensation account, until all distributions shall have
been made from the participant's stock unit account, in amounts equal to the
cash dividends (or the fair market value of dividends paid in property other
than dividends payable in common stock of the Company) which the participant
would have received from time to time had he or she been the owner on the record
dates for the payment of such dividends of the number of shares of the Company's
common stock equal to the number of units in his or her stock unit account on
those dates.
Section 6. STOCK DIVIDEND CREDITS. Additional credits shall be made to a
participant's stock unit account, until all distributions shall have been made
from the participant's stock unit account, of a number of units equal to the
number of shares of the Company's common stock, rounded to the nearest one-
hundredth share, which the participant would have received from time to time as
stock dividends had he or she been the owner on the record dates for the
payments of such stock dividends of the number of units of the Company's common
stock equal to the number of units credited to his or her stock unit account on
those dates.
Section 7. RECAPITALIZATION. If, as a result of a recapitalization of the
Company (including a stock split), the Company's outstanding shares of common
stock shall be changed into a greater or smaller number of shares, the number of
units then credited to a participant's stock unit account shall be appropriately
adjusted on the same basis.
Section 8. DISTRIBUTION OF STOCK AND CASH AFTER PARTICIPANT'S DEFERRAL
TERMINATION DATE. When a participant's deferral termination date shall occur,
the Company shall become obligated to make the distributions prescribed in the
following paragraphs (a) and (b).
(a) The Company shall distribute to the participant the number of shares of
the common stock of the Company which shall equal the total number of units
accumulated in his or her stock unit account as of the close of the fiscal year
in which the participant's deferral termination date occurs. Such distribution
of stock shall be made in ten annual installments, unless, at least six months
prior to his or her deferral termination date, the participant shall have
elected, by notice in writing filed with the Secretary of the Company, to have
such distribution made in five annual installments. In either such case, the
installments shall be of as nearly equal number of shares as practicable,
adjusted to reflect any changes pursuant to Sections 6 and 7 in the number of
units remaining in the participant's stock unit account. The first such
installment shall be distributed within 60 days after the close of the fiscal
year in which the participant's deferral termination date occurs. The remaining
installments shall be distributed at annual intervals thereafter. Anything
herein to the contrary notwithstanding, the Company shall have the option, if
its Board of Directors shall by resolution so determine, in lieu of making
distribution in ten or five annual installments as set forth above, with the
participant's consent, to distribute stock
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or any remaining installments thereof in a single distribution at any time
following the close of the fiscal year in which the participant's deferral
termination date occurs. Distribution of stock made hereunder may be made from
shares of common stock held in the treasury and/or from shares of authorized but
previously unissued shares of common stock. All distributions under the plan
shall be completed not later than December 31, 2025.
(b) The Company shall distribute to the participant sums in cash equal to
the balance credited to his or her deferred compensation account as of the close
of the fiscal year in which his or her deferral termination date occurs plus
such additional amounts as shall be credited thereto from time to time
thereafter pursuant to Section 5. The cash distribution shall be made on the
same dates as the annual distributions made pursuant to paragraph (a) above, and
each cash distribution shall consist of the entire balance credited to the
participant's deferred compensation account at the time of the annual
distribution.
If a participant's deferral termination date shall occur by reason of his
or her death or if he or she shall die after his or her deferral termination
date but prior to receipt of all distributions of stock and cash provided for in
this Section 8, all stock and cash remaining distributable hereunder shall be
distributed to such beneficiary as the participant shall have designated in
writing and filed with the Secretary of the Company or, in the absence of
designation, to the participant's personal representative. Such distributions
shall be made in the same manner and at the same intervals as they would have
been made to the participant had he or she continued to live.
Section 9. PARTICIPANT'S RIGHTS UNSECURED. The right of any participant
to receive distributions under Section 8 shall be an unsecured claim against the
general assets of the Company. The Company may but shall not be obligated to
acquire shares of its outstanding common stock from time to time in anticipation
of its obligation to make such distributions, but no participant shall have any
rights in or against any shares of stock so acquired by the Company. All such
stock shall constitute general assets of the Company and may be disposed of by
the Company at such time and for such purposes as it may deem appropriate.
Section 10. TERMINATION OF THE PLAN. The Plan shall terminate and full
distribution shall be made from all participants' deferred compensation accounts
and stock unit accounts upon any change of control of the Company. Either of
the following shall be deemed to be a change of control: (a) the occurrence,
without the prior approval of the Board of Directors, of the acquisition,
directly or indirectly, by any person of 50% or more of the outstanding common
stock of either the Company or its parent corporation, Thermedics Inc.
("Thermedics"), 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, Thermedics, or Thermo Electron,
as the case may be; (b) the failure of the prior directors to constitute a
majority of the Board of Directors of the Company, Thermedics or Thermo
Electron, at any time within two years following any electoral event. As used
in this sentence and the preceding sentence, person shall mean a natural person,
an entity (together with an affiliate thereof, as defined in Rule 405 under the
Securities Act of 1933) or a group, as defined in Rule 13d-5 under the
Securities Exchange Act of 1934; prior directors shall mean the persons serving
on the Board of Directors immediately prior to any electoral event; and
electoral event
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shall mean any contested election of directors or any tender or exchange offer
for common stock of the Company, Thermedics or Thermo Electron by any person
other than the Company, Thermedics, Thermo Electron or a subsidiary of any of
the foregoing companies. The Board of Directors at any time, at its discretion,
may terminate the Plan. If the Board of Directors terminates the Plan after any
person or group of persons shall have acquired or proposed to acquire control of
the Company through the Board of Directors, Thermedics or Thermo Electron, full
and prompt distribution shall be made from all participants' deferred
compensation accounts and stock unit accounts. Otherwise, distributions in
respect of credits to participants' deferred compensation accounts and stock
unit accounts as of the date of termination shall be made in the manner and at
the time prescribed in Section 8.
Section 11. AMENDMENT OF THE PLAN. The Board of Directors of the Company
may amend the Plan at any time and from time to time, provided, however, that no
amendment affecting credits already made to any participant's deferred
compensation account or stock unit account may be made without the consent of
that participant or, if that participant has died, that participant's
beneficiary.
Section 12. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective
commencing upon the date the U. S. Securities and Exchange Commission shall have
declared effective the registration of shares of the Company's Common Stock in
an underwritten public offering pursuant to the Securities Act of 1933, as
amended.
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