-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GEFcF+qmQ2cI5dt9qckohVb8pZ6j6GUK4FW86gSR9LopuNQSA4m1KI0/WlEQsZzE t4sGxdqX+MwLCSl0pWjE3Q== 0001032210-01-500438.txt : 20010501 0001032210-01-500438.hdr.sgml : 20010501 ACCESSION NUMBER: 0001032210-01-500438 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLIR SYSTEMS INC CENTRAL INDEX KEY: 0000354908 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 930708501 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-21918 FILM NUMBER: 1617174 BUSINESS ADDRESS: STREET 1: 16505 SW 72ND AVE CITY: PORTLAND STATE: OR ZIP: 97224 BUSINESS PHONE: 5036843731 MAIL ADDRESS: STREET 1: 16505 SW 72ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97224 10-K/A 1 d10ka.txt AMENDMENT #1 TO FORM 10-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 10-K/A AMENDMENT NO. 1 (Mark one) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ending December 31, 2000. OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _____________ Commission file number: 0-21918 ---------------- FLIR SYSTEMS, INC. (Exact name of Registrant as specified in its charter) Oregon 93-0708501 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
16505 S.W. 72nd Avenue, Portland, Oregon 97224 (Address of principal executive offices) (503) 684-3731 (Registrant's telephone number, including area code) ---------------- Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Title of each class of Stock Common Stock, $0.01 par value Preferred Stock Purchase Rights ---------------- Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ((S)229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or amendment to this Form 10-K [_] As of March 31, 2001, the aggregate market value of the shares of voting stock of the Registrant held by non-affiliates was $117,550,275. As of March 31, 2001, there were 14,585,085 shares of the Registrant's common stock, $0.01, par value, outstanding. DOCUMENTS INCORPORATED BY REFERENCE: None - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- This Amendment amends and restates Items 10, 11, 12 and 13 of Part III and Item 14 of Part IV of FLIR Systems Inc.'s Annual Report on Form 10-K for the year ended December 31, 2000. The complete text of each Item as amended and restated is set forth below. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Position ---- --- -------- Earl R. Lewis........... 57 Chairman of the Board of Directors, President and Chief Executive Officer Arne Almerfors.......... 55 Executive Vice President and President Thermography Business Stephen M. Bailey....... 53 Senior Vice President, Finance and Chief Financial Officer James A. Fitzhenry...... 45 Senior Vice President, General Counsel and Secretary Daniel Manitakos........ 43 Senior Vice President, Boston Operations William A. Sundermeier.. 37 Senior Vice President, Portland Operations Andrew C. Teich......... 40 Senior Vice President, Sales John C. Hart............ 67 Director Angus L. Macdonald...... 44 Director W. Allen Reed........... 54 Director Ronald L. Turner........ 54 Director Steven E. Wynne......... 48 Director
Earl R. Lewis. Mr. Lewis has served as Chairman, President and Chief Executive Officer of the Company since November 1, 2000. He was initially elected to the Board in June 1999 in connection with the acquisition of Spectra Physics AB by Thermo Instrument Systems Inc. Mr. Lewis was formerly President and Chief Executive Officer of Thermo Instrument Systems, Inc. and Chief Operating Officer, Measurement and Detection, of Thermo Electron Corporation, the parent company of Thermo Instrument Systems. Mr. Lewis is also a director of SpectRx Inc., IGI, Harvard BioScience, Inc. and SPLI. Mr. Lewis holds a B.S. from Clarkson College of Technology and has attended postgraduate programs at the University of Buffalo, Northeastern University and Harvard University. Arne Almerfors. Mr. Almerfors joined FLIR in December 1997 in connection with FLIR's acquisition of AGEMA, and currently serves as Executive Vice President and President of the Thermography business. From 1995 to 1997, Mr. Almerfors was President and Chief Executive Officer of AGEMA Infrared Systems AB. He also served as President and Chief Executive Officer of CE Johansson AB, a manufacturer of coordinate measuring devices, from 1989 to 1995. Mr. Almerfors received his B.S., MBA, Masters in Political Science and certification for post-graduate courses in corporate finance and accounting from the University of Stockholm. Stephen M. Bailey. Mr. Bailey joined FLIR in April 2000 as Senior Vice President, Finance and Chief Financial Officer. Since 1989, Mr. Bailey has served as Vice President and Chief Financial Officer of Bauce Communications, Inc., President of Pro Golf of Portland, Inc., and Chief Financial Officer and Chief Operating Officer of Desk2Web Technologies, Inc. From 1975 to 1988, Mr. Bailey served in various senior executive positions with Amfac, Inc., including Senior Vice President and Controller of Amfac Foods, Inc., President of Amfact Supply Company and as Senior Vice President and Controller of Amfac, Inc. A CPA, Mr. Bailey also worked at Touche Ross & Company (which subsequently became Deloitte & Touche) from 1970 to 1975. Mr. Bailey received his B.S. from Oregon State University. James A. Fitzhenry. Mr. Fitzhenry joined FLIR in 1993 as Corporate Counsel and Director of Administration, and was appointed Senior Vice President for Corporate Operations, General Counsel and 1 Secretary in 1995. From 1990 to 1993, Mr. Fitzhenry served in the White House under President George W. Bush as Assistant Director of the Office of Policy Development and Associate Director of the Office of Cabinet Affairs. Previously, he served as legal counsel and legislative director to U.S. Senator Mark O. Hatfield (R-Ore.), Deputy State Treasurer for the State of Oregon and practiced law in Portland, Oregon. Mr. Fitzhenry received his B.A. from the University of Oregon and his J.D. and MBA degrees from Willamette University. Daniel Manitakos. Mr. Manitakos joined FLIR in March 1999 as Vice President, Boston Operations and was appointed to Senior Vice President and General Manager, Boston Operations in September 2000. Mr. Manitakos served as Vice President, Operations at Inframetrics, Inc. prior to its acquisition by FLIR in March 1999. Mr. Manitakos served in various engineering and operations capacities since joining Inframetrics in 1989. He received his B.S. in Mechanical Engineering from the University of Massachusetts, an M.S. in Mechanical Engineering from Northeastern University and an MBA from Suffolk University. Mr. Manitakos is also a Registered Professional Engineer in Massachusetts. William A. Sundermeier. Mr. Sundermeier joined FLIR in 1994 as Product Marketing Manager and was appointed Director of Product Marketing in 1995. In 1999, Mr. Sundermeier was appointed Senior Vice President for Product Strategy. In September 2000, Mr. Sundermeier was appointed Senior Vice President and General Manager, Portland Operations. Prior to joining FLIR, Mr. Sundermeier was a founder of Quality Check Software, Inc. (QCS) in 1993. From 1985 to 1993, Mr. Sundermeier served as Product Line Manager at Cadre Technologies, Inc. Mr. Sundermeier also served as Software/Hardware Engineer at Tektronix, Inc. from 1980 to 1985. Mr. Sundermeier received his B.S. in Computer Science from Oregon State University. Andrew C. Teich. Mr. Teich joined FLIR in March 1999 as Senior Vice President of Marketing. From 1996, Mr. Teich served as Vice President of Sales and Marketing at Inframetrics, Inc. prior to its acquisition by FLIR in March 1999. From 1984 to 1996, Mr. Teich served in the capacities of Sales Engineer, Western Regional Sales Manager, International Sales Manager and Vice President of Sales at Inframetrics. He holds an A.S. degree in Industrial Design from the University of Bridgeport and received his B.S. in Marketing from Arizona State University. John C. Hart. Mr. Hart has served as a Director of the Company since February 1987 and as Chairman of the Board of Directors from 1987 to April 1993. From 1982 until his retirement in 1993, Mr. Hart served as Vice President of Finance, Treasurer, Chief Financial Officer and a member of the Board of Directors of Louisiana-Pacific Corporation. Mr. Hart also served as interim President and Chief Executive Officer of the Company from May through November 2000. Angus L. Macdonald. Mr. Macdonald was elected to the Board of Directors in April 2001 for a term to expire at the Company's 2001 Annual Meeting of Shareholders, at which time his election to the Board for a 1-year term will be voted upon. Mr. Macdonald is currently President of Life Sciences Consultants, Inc., an advisory firm to growth companies regarding capital formation, corporate development and strategy. From 1996 to 2000, he was Senior Vice President of Lehman Brothers, Inc. Prior to joining Lehman Brothers, Mr. Macdonald was senior analyst at Fahnestock, Inc., President of Macdonald & Associates, principal of DWQ, Ltd, President of AGR Corporation, Director of Business Development for Bethesda Research Laboratories, Inc. and a management consultant with Robert S. First, Inc. He holds a B.A. from the University of Pennsylvania and an MBA from Cranfield University, UK. W. Allen Reed. Mr. Reed has served as a Director of the Company since April 1992 and his current term on the Board of Directors expires in 2001. Mr. Reed is President and Chief Executive Officer of General Motors Investment Management Corporation. From 1991 to 1994, Mr. Reed was Vice President and Treasurer of GM Hughes Electronics Corporation and Hughes Aircraft Company ("Hughes"). From 1984 to 1991, Mr. Reed was President of the Hughes Investment Management Company, a wholly owned subsidiary of Hughes. Prior to joining Hughes, Mr. Reed was Vice President and Portfolio Manager for Allen & Associates Investment Management Company. Mr. Reed serves on the Boards of Directors of iShares, Inc., Temple-Inland 2 Industries, General Motors Acceptance Corporation and GMAC Insurance Holdings. Mr. Reed also serves as Chairman of the Investment Advisory Committee for the Howard Hughes Medical Institute. Ronald L. Turner. Mr. Turner was elected to the Board of Directors in 1993. Mr. Turner was appointed Chairman, President and Chief Executive Officer of Ceridian Corporation in May 2000. He served as President and Chief Executive Officer since January 2000, President and Chief Operating Officer since 1998 and Executive Vice President, Operations since 1997. From 1993 to 1997, Mr. Turner served as President and Chief Executive Officer of Computing Devices International, an aerospace company, which was a division of Ceridian Corporation. From 1987 to 1993, Mr. Turner was President and Chief Executive Officer of GEC-Marconi Electronic Systems Corporation, a defense electronics company. Prior to 1987, Mr. Turner worked for Martin Marietta Corporation for 14 years in a variety of executive positions. Mr. Turner serves on the Board of Directors of Ceridian Corporation, BTG, Inc. and the Government Electronics and Information Technology Association. He is also Vice Chairman of the Electronics Industries Alliance, serves on its Executive Committee and Board of Governors and is a member of the Business Roundtable. He is also a past President and a member of the Board of Governors of the Massachusetts Institute of Technology Society of Sloan Fellows. Steven E. Wynne. Mr. Wynne was elected to the Board of Directors in November 1999. Mr. Wynne is currently a private investor and corporate advisor. Mr. Wynne was formerly Chairman and Chief Executive Officer of eteamz.com, an on- line community serving amateur athletics from June 2000 until its sale to Active.com in September 2000. From March 1995 to March 2000, Mr. Wynne has served as President and Chief Executive Officer of adidas America, Inc. Prior to that time, he was a partner in the law firm of Ater Wynne LLP. Mr. Wynne received an undergraduate degree and a J.D. from Willamette University. Mr. Wynne also serves on the Board of Directors of Planar Systems, Inc. Section 16 Reports Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934 Act") requires the Company's directors and officers, and persons who own more than 10% of a registered class of the Company's equity securities, to file initial reports of ownership and reports of changes in ownership with the SEC. Such persons also are required to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its review of the copies of such reports received by it with respect to fiscal 2000, or written representations from certain reporting persons, the Company believes that all filing requirements applicable to its directors, officers and persons who own more than 10% of a registered class of the Company's equity securities have been complied with for fiscal 2000, except for one Form 4 report for Mr. Sundermeier which was filed late. 3 ITEM 11. EXECUTIVE COMPENSATION The following table provides information concerning the compensation of the Company's Chief Executive Officer and each of the four other most highly compensated executive officers of the Company (the "named executive officers") for the fiscal years ending December 31, 2000, 1999 and 1998 or such periods as the named executive officer was an officer of the Company.
Long-Term Compensation ----------------------------- Long-term Annual Compensation Restricted Stock Incentive Name and Principal --------------------- Stock Options Plan All Position Year Salary Bonus Awards(1) Granted Payouts(2) Other(3) ------------------ ---- -------- ------- ---------- ------- ---------- -------- Earl R. Lewis (4)....... 2000 $ 50,000 $ -- $139,262 256,000 $ -- $ -- Chairman of the Board of Directors, President and Chief Executive Officer John C. Hart (5)........ 2000 110,000 -- -- 6,000 -- -- Director, Former President and Chief Executive Officer J. Kenneth Stringer III (6).................... 2000 174,906 -- -- 1,000 -- 138,797 Former President, 1999 276,000 -- -- 30,000 82,192 5,000 Former Chief Executive 1998 225,726 180,000 -- 25,000 240,049 5,000 Officer, Former Director Andrew C. Teich(7)...... 2000 213,642 22,000 -- 31,000 -- 9,005 Sr. Vice President, 1999 182,144 -- -- -- -- 8,000 Sales William A. Sundermeier.. 2000 194,850 22,000 -- 31,000 -- 5,250 Sr. Vice President, 1999 149,092 -- -- 15,000 -- 5,000 Portland Operations 1998 113,012 -- -- 5,000 -- 4,551 Arne Almerfors.......... 2000 148,622 26,748 -- 36,000 -- 40,334 Executive Vice 1999 144,305 -- -- 12,000 -- 45,122 President and President 1998 132,813 70,513 -- -- -- 44,744 Thermography James A. Fitzhenry...... 2000 182,089 22,000 -- 25,000 5,250 Sr. Vice President, 1999 170,689 -- -- 12,000 54,794 5,000 General Counsel and 1998 159,579 55,000 -- 12,000 80,016 5,000 Secretary Robert P. Daltry........ 2000 266,156 -- -- 1,000 -- 110,984 Former Chairman of the 1999 256,406 -- -- 30,000 -- 5,000 Board of Directors 1998 271,202 230,000 -- 30,000 320,065 5,000
- -------- (1) This amount represents the value of shares of restricted stock awarded to Mr. Lewis based on the market price of the Company's common stock on the date of award, including 8,332 shares of restricted stock awarded to Mr. Lewis as compensation for consulting services for the period August 15, 2000 through October 31, 2000, and 13,333 shares of restricted stock awarded to Mr. Lewis in lieu of a cash bonus for 2000. All such shares of restricted stock vest upon the earlier to occur of the date (i) that the Company's total debt is less than $60 million, or (ii) Mr. Lewis ceases to be an employee of the Company. (2) The amounts set forth under Long-term Incentive Plan Payouts represent the dollar value of shares of restricted stock that were earned in 1998 and 1999 based upon achievement of specified performance goals. The value of these shares was calculated based upon the closing price of the Common Stock on October 7, 1998 and October 21, 1999, respectively. (3) The amounts set forth under All Other Compensation represent matching amounts contributed on behalf of the named executive officers to retirement plans. All Other Compensation for Messrs. Stringer and Daltry in 2000 includes amounts paid for accumulated vacation of $133,655 and $108,172, respectively, and amounts contributed to retirement plans of $5,142 and $2,812, respectively. (4) Mr. Lewis has served as Chief Executive Officer since November 2000. 4 (5) Mr. Hart served as Chief Executive Officer from May 2000 until November 2000. (6) Mr. Stringer served as Chief Executive Officer from January 2000 until May 2000. Mr. Stringer's employment with the Company terminated on August 2, 2000. (7) Mr. Teich joined the Company in March 1999. Stock Options The following table sets forth information concerning options granted to the named executive officers during the year ended December 31, 2000 under the Company's stock options plans:
Potential Realizable Percent of Value at Assumed Number of Total Annual Rates of Stock Securities Options Price Appreciation Underlying Granted to Exercise for Option Term(1) Options Employees Price Expiration --------------------- Name Granted In 2000 Per Share Date 5% 10% ---- ---------- ---------- --------- ---------- ---------- ---------- Earl R. Lewis........... 6,000(2) 0.4% $6.75 8/15/10 $ 25,470 $ 64,547 250,000(3) 18.3% $7.50 11/1/10 1,179,177 2,988,267 John C. Hart............ 6,000(2) 0.4% $6.75 8/15/10 25,470 64,547 J. Kenneth Stringer III.................... 1,000(4) 0.1% $7.50 4/17/10(5) -- -- Andrew C. Teich......... 1,000(4) 0.1% $7.50 4/17/10 4,717 11,953 30,000(6) 2.2% $6.16 9/21/10 116,150 294,347 William A. Sundermeier.. 1,000(4) 0.1% $7.50 4/17/10 4,717 11,953 30,000(6) 2.2% $6.16 9/21/10 116,150 294,347 Arne Almerfors.......... 36,000(6) 2.6% $6.16 9/21/10 139,380 353,216 James A Fitzhenry....... 1,000(4) 0.1% $7.50 4/17/10 4,717 11,953 24,000(6) 1.8% $6.16 9/21/10 92,920 235,478 Robert P. Daltry........ 1,000(4) 0.1% $7.50 4/17/10 4,717 11,953
- -------- (1) The amounts shown are hypothetical gains based on the indicated assumed rates of appreciation of the Common Stock compounded annually for a ten- year period. Actual gains, if any, on stock option exercises are dependent on the future performance of the Common Stock and overall stock market conditions. There can be no assurance that the Common Stock will appreciate at any particular rate or at all in future years. (2) These options became fully exercisable on the date of grant. (3) These options become exercisable beginning on the first anniversary of the date of grant, with one-half of the options becoming exercisable at that time and the other one-half becoming exercisable on the second anniversary of the date of the grant. (4) These options became fully exercisable on January 1, 2001. (5) Mr. Stringer's options expired in November 2000. (6) These options become exercisable beginning on January 1, 2001 with one- third of the options becoming exercisable at that time and an additional one-third of the options becoming exercisable on the first and second anniversaries of the date of grant, respectively. 5 Options Exercised in Last Fiscal Year and Fiscal Year End Option Values The following table sets forth, for each of the named executive officers, the shares acquired during 2000 and the related value realized, and the number and value of unexercised options as of December 31, 2000.
Options Exercised Number of Securities Value of Unexercised in Last Fiscal Underlying Unexercised In-the-Money Options Year(1) Options at December 31, 2000 At December 31, 2000(2) ------------------ -------------------------------- ------------------------- Number of Value Shares Realized Exercisable Unexercisable Exercisable Unexercisable --------- -------- -------------- --------------- ----------- ------------- Earl R. Lewis........... -- $ -- 6,000 250,000 $ -- $-- John C. Hart............ -- -- 42,000 -- -- -- J. Kenneth Stringer III.................... 15,850 4,359 -- -- -- -- Andrew C. Teich......... 22,050 308,568 16,000 30,000 -- -- William A. Sundermeier.. -- -- 25,335 31,665 -- -- Arne Almerfors.......... -- -- 31,000 32,000 -- -- James A. Fitzhenry...... -- -- 31,666 28,000 -- -- Robert P. Daltry........ -- -- 180,000 30,000 16,900 --
- -------- (1) The value realized is based on the difference between the market price at the time of exercise of the options and the applicable exercise price. (2) The value of unexercised in-the-money options is based on the difference between $5.56, which was the closing price of the Common Stock on December 31, 2000, and the applicable exercise price. Employment, Change of Control and Separation Agreements John C. Hart. The Company entered into an agreement with Mr. Hart effective as of June 20, 2000 pursuant to which Mr. Hart agreed to serve as interim President and Chief Executive Officer. The agreement provided for the payment to Mr. Hart of $20,000 per month during his tenure as President and Chief Executive Officer, which extended from May 17, 2000 through October 31, 2000. Pursuant to this agreement, Mr. Hart also received an option to purchase 6,000 shares of the Company's common stock in lieu of the annual stock option grant he would have received as a non-employee director. Earl R. Lewis. The Company entered into an Employment Agreement (the "Agreement") with Mr. Lewis effective November 1, 2000 pursuant to which Mr. Lewis is employed by the Company as President and Chief Executive Officer. The Agreement is for a term ending January 1, 2003, and provides for a minimum annual base salary of $300,000 and annual bonus eligibility of up to 100 percent of base salary. Pursuant to the Agreement, Mr. Lewis was granted options to purchase 250,000 shares of the Company's common stock. If Mr. Lewis terminates the Agreement or the Company terminates the Agreement for "Cause" (as defined in the Agreement), Mr. Lewis would be paid through the date of termination. If the Company terminates the Agreement without Cause, the Company would be required to continue to pay Mr. Lewis an amount equal to his base salary in effect at the time of termination for a period equal to the greater of 18 months or the remaining term of the Agreement plus certain bonus payments. In the event that the Agreement terminates as a result of the death of Mr. Lewis, the Company would be required to pay an amount equal to one year's base salary to Mr. Lewis' estate or designated beneficiary. The Agreement also provides that Mr. Lewis will be entitled to all benefits made available to other executive officers and provides for the payment of certain housing, relocation, automobile and travel expenses incurred by Mr. Lewis. Robert P. Daltry. The Company entered into a Separation Agreement and Release (the "Separation Agreement") with Robert P. Daltry in connection with the termination of his employment effective July 31, 2000. Pursuant to the Separation Agreement, Mr. Daltry has agreed to make himself available to provide consultation to the Company as needed no less than 25 hours per week during the two-year period following 6 the date of the Separation Agreement (the "Severance Period"). As part of the Separation Agreement, the Company agreed to pay Mr. Daltry a severance payment in the amount of $700,906 payable in installments over the Severance Period. After the expiration of the Severance Period, the Company has agreed to pay Mr. Daltry an annual fee of $125,000 per year until the earlier of March 3, 2024 or Mr. Daltry's death, and Mr. Daltry has agreed to make himself available to provide consultation to the Company during such period. The Separation Agreement also provides that the Company will pay the out-of-pocket costs of obtaining medical, disability and life insurance coverage at the same level as Mr. Daltry was receiving at the time his employment was terminated for the rest of his life. The Separation Agreement also provides that Mr. Daltry's stock options will continue to vest during the Severance Period, that the Company will pay Mr. Daltry's moving expenses from Maryland to Oregon and that the Company will continue to pay during the Severance Period certain automobile expenses and membership fees incurred by Mr. Daltry. The Separation Agreement also includes certain nonsolicitation and noncompetition provisions that preclude Mr. Daltry from engaging or participating in any business activity in competition with the Company until the earlier of March 3, 2024 or Mr. Daltry's death. The Separation Agreement also includes a release of all claims that Mr. Daltry may have against the Company, including claims under the Employment Agreement described below. Other Executive Officers. The Company has entered into employment agreements (the "Employment Agreements") with certain of its executive officers, including Arne Almerfors and James A. Fitzhenry. Messrs Daltry and Stringer were also parties to an Employment Agreement. Each of the Employment Agreements is for a term ending December 31, 2001, provided that if a Change of Control (as defined) occurs before December 31, 2001, the Employment Agreements will continue in effect until two years after the Change in Control. If the executive officer resigns voluntarily or is properly terminated for Cause (as defined) all pay and benefits under the Employment Agreement will cease as of the effective date of the termination or resignation. In the event of the death of an executive officer, the designated beneficiary of the executive officer would receive a lump sum payment equal to twelve months base salary at the then current rate. With respect to Messrs. Daltry and Stringer, in the event that the employment of such executive officer is terminated by the Company without cause, such executive officer would be entitled to receive a lump sum payment in an amount equal to two year's base salary plus bonuses earned through the date of termination. For a period of two years following the Change of Control, each executive officer would have the right to terminate his employment for Good Reason (as defined), and to receive upon such termination a lump sum payment in an amount equal to two times (three times in the case of Messrs. Daltry and Stringer) their average annualized compensation during the five year period preceding the Change of Control. In addition, the executive officers would be entitled to the continuation of health and insurance benefits for certain periods. For purposes of the Employment Agreements, a "Change of Control" includes (i) any merger or consolidation transaction that results in the shareholders of the Company immediately before such transaction owning less than 50 percent of the total combined voting power of the surviving corporation in the transaction, (ii) the acquisition by any person of 20 percent or more of the Company's total combined voting power, (iii) the liquidation of the Company of the sale of substantially all of its assets, and (iv) a change in the composition of the Board of Directors during any 24 month period such that the directors in office at the beginning of the period and/or their successors who were elected by or on the recommendation of the directors in office at the beginning of the period do not constitute at least a 70 percent majority of the Board. In connection with the Company's acquisition of AGEMA Infrared Systems AB, the Employment Agreements were amended to provide that the consummation of that transaction would not constitute a Change of Control for purposes of the Employment Agreements. This amendment to the Employment Agreements will terminate and become null and void upon the acquisition by Spectra-Physics AB and/or its affiliates of any shares of Common Stock if at the time of such acquisition Spectra and its affiliates would beneficially own more than 45 percent of the issued and outstanding shares of Common Stock. In connection with the acquisition by an affiliate of Thermo Electron Corporation of substantially all of the outstanding capital stock of Spectra, the Employment Agreements were amended to provide that the consummation of that transaction would not constitute a Change of Control for purposes of the Employment Agreements. This amendment to the Employment Agreements will terminate and become null and void if (i) Thermo Electron Corporation acquires any shares of Common Stock in excess of those shares held by Spectra, or (ii) asserts any right to representation on the Board of Directors. For purposes of the Employment 7 Agreements, "Cause" means the failure to satisfactorily perform the duties assigned to the executive officer within a certain period after notice of such failure is given and commission of certain illegal or wrongful acts. Director Compensation The members of the Company's Board of Directors were not compensated for their service on the Board in 2000, but were reimbursed for out-of-pocket and travel expenses incurred in attending Board meetings. Under the Company's 1993 Stock Option Plan for Nonemployee Directors, as amended, an option to purchase 6,000 shares of Common Stock is automatically granted to each nonemployee director each year on the day of the Annual Meeting. Effective January 1, 2001, the Board approved a compensation plan for Directors that, in addition to the granting of stock options described above, provides for payment of a $3,000 quarterly retainer for all nonemployee directors, a $1,000 quarterly retainer for nonemployee Directors who serve as Chairman of the Audit and Compensation Committees of the Board, an attendance fee of $1,000 for personal attendance ($500 for participation by phone) at each regularly scheduled meeting of the full Board and an attendance fee of $500 for personal attendance ($200 for participation by phone) of each meeting of the Audit or Compensation Committees. Compensation Committee Interlocks and Insider Participation The members of the Compensation Committee during the fiscal year ended December 31, 2000, were Messrs. Hart and Turner. Mr. Hart served as President and Chief Executive Officer of the Company from May 2000 until November 2000. 8 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information known to the Company with respect to the beneficial ownership of the Company's Common Stock as of March 31, 2001 by: (i) each person known by the Company to beneficially own more than 5% of the outstanding shares of Common Stock, (ii) each of the Company's directors, (iii) each of the Company's named executive officers, and (iv) all directors and executive officers as a group. Except as otherwise indicated, the Company believes that each of the following shareholders has sole voting and investment power with respect to the shares beneficially owned by such shareholder.
Shares of Common Stock Percent Beneficially Common Stock Name and Address of Beneficial Owner Owned(1) Outstanding ------------------------------------ ------------ ------------ Thermo Electron Corporation(2)...................... 4,162,000 28.5% 81 Wyman Street Waltham, MA 02454 Franklin Resources, Inc.(3)......................... 1,144,100 7.8% 777 Mariners Island Blvd. San Mateo, CA 94404 Advent International Corporation(4)................. 848,324 5.8% 75 State Street Boston, MA 02109 Earl R. Lewis....................................... 48,332 * John C. Hart........................................ 47,000 * Angus L. Macdonald.................................. -- -- W. Allen Reed....................................... 47,000 * Ronald L. Turner.................................... 45,000 * Steven E. Wynne..................................... 6,000 * J. Kenneth Stringer III............................. 68,355 * Andrew C. Teich..................................... 76,220 * William A. Sundermeier.............................. 34,907 * Arne Almerfors...................................... 44,120 * James A. Fitzhenry.................................. 56,175 * Robert P. Daltry.................................... 310,800 2.1% Directors and Executive Officers as a group (14 persons)(5)........................................ 858,005 5.9%
- -------- * Less than one percent (1%). (1) Applicable percentage of ownership is based on 14,585,085 shares of FLIR Common Stock outstanding as of March 31, 2001. Beneficial ownership is determined in accordance with rules of the SEC, and includes voting power and investment power with respect to shares. Shares issuable upon the exercise of outstanding stock options that are currently exercisable or become exercisable within 60 days from March 31, 2001 are considered outstanding for the purpose of calculating the percentage of Common Stock owned by such person, but not for the purpose of calculating the percentage of Common Stock owned by any other person. The number of shares that are issuable upon the exercise of options that are currently exercisable or exercisable within 60 days of March 31, 2001 is as follows: Mr. Lewis-- 6,000; Mr. Hart--42,000; Mr. Reed--45,000; Mr. Turner--45,000; Mr. Wynne-- 6,000; Mr. Teich--21,000; Mr. Sundermeier--32,001; Mr. Almerfors--35,000; Mr. Fitzhenry--39,666; Mr. Daltry--166,000; and all directors and executive officers as a group--472,501. (2) This information as to beneficial ownership is based on a Schedule 13D filed by Thermo Electron Corporation with the Securities and Exchange Commission on August 16, 1999. The Schedule 13D states 9 that (i) Thermo Electron Corporation is the beneficial owner of 4,162,000 shares of Common Stock as to which it has sole voting and dispositive power, and (ii) the 4,162,000 shares of Common Stock as to which beneficial ownership is reported are held by Spectra-Physics AB, which is a majority- owned subsidiary of Thermo Instrument Systems, Inc., a majority-owned publicly traded subsidiary of Thermo Electron Corporation. (3) This information as to beneficial ownership is based on a Schedule 13G/A filed by Franklin Resources, Inc. with the Securities and Exchange Commission on January 31, 2001. The Schedule 13G states that Franklin Resources and its affiliates are the beneficial owners of 1,144,100 shares of Common Stock as to which certain affiliates of Franklin Resources have sole voting and dispositive power. (4) This information as to beneficial ownership is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2001 by Global Private Equity II Limited Partnership, Advent Direct Investment Program Limited Partnership, Advent Israel Limited Partnership, Advent Israel (Bermuda) Limited Partnership, EnviroTech Investment Fund I Limited Partnership (together the "Advent Partnerships"), Advent International Corporation ("AIC") and Advent International Limited Partnership ("AILP"). The Schedule 13G/A states that AIC is the General Partner of AILP which in turn is the General Partner of each of the Advent Partnerships and, as such, that AIC has sole voting and sole dispositive power with respect to the 848,324 shares of Common Stock as to which beneficial ownership is reported. (5) Does not include the 4,162,000 shares of Common Stock held by Spectra/Thermo Electron, as to which all directors and executive officers disclaim beneficial ownership. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES (a)(1) Financial Statements The financial statements are included in Item 8 of the Annual Report on Form 10-K filed on April 2, 2001. (a)(2) Financial Statement Schedules The following schedule was filed as part of the Annual Report on Form 10-K filed on April 2, 2001: Schedule II--Valuation and Qualifying Accounts Report of Independent Accountants on Financial Statement Schedule No other schedules are included because the required information is inapplicable, not required or are presented in the financial statements or the related notes thereto. 10 (a)(3) Exhibits
Number Description ------ ----------- 2.1 Merger Agreement dated as of March 19, 1999 by and among FLIR Systems, Inc., Inframetrics, Inc., Irabu Acquisition Corporation and the shareholders of Inframetrics, Inc. (incorporated by reference to Current Report on Form 8-K filed on April 14, 1999). 3.1 Second Restated Articles of Incorporation of the FLIR Systems, Inc. (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1 (File No. 33-62582)). 3.2 First Amendment to Second Restated Articles of Incorporation of FLIR Systems, Inc. (incorporated by reference to Exhibit 1.1 to Registration Statement on Form 8-A filed on June 11, 1999). 3.3 First Restated Bylaws of the FLIR Systems, Inc. (incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-1 (File No. 33-62582)). 4.1 Rights Agreement dated as of June 2, 1999 (incorporated by reference to Exhibit 1.1 to the Registration Statement on Form 8-A filed on June 11, 1999). 10.1 Form of Indemnity Agreement between the FLIR Systems, Inc. and each member of its Board of Directors (incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1 (File No. 33- 62582)).(1) 10.2 1984 Incentive Stock Option Plan and Amendments (incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-1 (File No. 33-62582)).(1) 10.3 1992 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to Registration Statement on Form S-1 (File No. 33-62582)).(1) 10.4 1993 Stock Option Plan for Non-employee Directors (incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-1 (File No. 33-62582)).(1) 10.5 Lease Dated February 11, 1985, as amended, by and among the FLIR Systems, Inc. and Pacific Realty Association, L.P. (incorporated by reference to Exhibit 10.6 to Registration Statement on Form S-1 (File No. 33-62582)). 10.6 Combination Agreement, Dated October 6, 1997, Among FLIR Systems, Inc., Spectra-Physics AB, Spectra-Physics Holding S.A., Spectra- Physics Holdings GmbH, Spectra-Physics Holdings PLC, and Pharos Holdings, Inc. (incorporated by reference to Exhibit 2.0 to Current Report on Form 8-K filed on October 24, 1997). 10.7 Form of Executive Employment Agreement dated as of May 5, 1997 (James A. Fitzhenry) (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on October 24, 1997).(1) 10.8 Form of Agreement amending Executive Employment Agreement dated as of December 1, 1997 for James A. Fitzhenry (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on December 15, 1997).(1) 10.9 Form of Agreement amending Executive Employment Agreement dated as of January 20, 1999 amending Executive Employment Agreement of James A. Fitzhenry and Arne Almerfors (incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q filed on August 16, 1999).(1) 10.10 Registration Rights Agreement dated as of December 1, 1997 by and among FLIR Systems, Inc., Spectra-Physics AB, Spectra-Physics Holdings PLC and Pharos Holdings (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on December 15, 1997). 10.11 Contract for the Supply of Uncooled Imaging Modules, dated January 15, 1997 (incorporated by reference to Exhibit 10.1 to Form 10-Q/A filed May 28, 1998).(2)
11
Number Description ------ ----------- 10.12 Contract for the Supply of Uncooled Imaging Modules, dated March 4, 1998 (incorporated by reference to Exhibit 10.1 to Form 10-Q/A filed May 28, 1998).(2) 10.13 Inframetrics, Inc. Shareholders Agreement dated as of March 19, 1999 by and among FLIR, Inframetrics and the shareholders of Inframetrics (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 14, 1999). 10.14 Amendment to Inframetrics, Inc. Shareholders Agreement dated as of October 27, 1999 by and among FLIR, Inframetrics, and the former shareholders of Inframetrics (incorporated by reference to Exhibits to Registration Statement on Form S-1 (File No. 333-90717)). 10.15 FLIR Systems, Inc. 1999 Employee Stock Purchase Plan (incorporated by reference to Exhibit A to the Company's Proxy Statement dated April 30, 1999).(1) 10.16 Contract for the Supply of Uncooled Imaging Modules, dated August 8, 1999 (incorporated by reference to Exhibit 10.1 to Form 10-Q/A filed December 2, 1999).(2) 10.17 Form of Credit Agreement among FLIR Systems, Inc. and Bank of America N.A. and certain other financial institutions dated as of December 16, 1999 (incorporated by reference to Exhibits to Registration Statement on Form S-1 (File No. 333-90717)). 10.18 Form of Pledge Agreement dated as of December 16, 1999 by FLIR Systems, Inc. in favor of Bank of America N.A. as Agent (incorporated by reference to Exhibits to Registration Statement on Form S-1 (File No. 333-90717)). 10.19 Form of Security Agreement dated as of December 16, 1999 between FLIR Systems, Inc. and Bank of America N.A. as Agent (incorporated by reference to Exhibits to Registration Statement on Form S-1 (File No. 333-90717)). 10.20 Amendment to Credit Agreement among FLIR Systems, Inc. and Bank of America N.A. and certain other financial institutions dated as of January 23, 2001.(3) 10.21 Amendment to Security Agreement dated as of January 23, 2001 between FLIR Systems, Inc. and Bank of America N.A. as Agent.(3) 10.22 Executive Employment Agreement dated as of November 1, 2000 between FLIR Systems, Inc. and Earl R. Lewis.(1)(3) 10.23 Separation Agreement and Release by and between FLIR Systems, Inc. and Robert P. Daltry. 21.0 Subsidiaries of FLIR Systems, Inc.(3) 23.0 Consent of Arthur Andersen LLP. 23.1 Consent of PricewaterhouseCoopers LLP. 23.2 Consent of Ernst & Young, LLP.
- -------- (1) This exhibit constitutes a management contract or compensatory plan or arrangement. (2) Portions of this Exhibit have been omitted pursuant to a request for confidential treatment under 17 C.F.R. (s) 240.24b 2. (3) Filed with and incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2000, filed on April 2, 2001. (b) During the quarter ended December 31, 2000, the Company filed the following reports on Form 8-K: 1. The Company filed a current report on Form 8-K, dated November 16, 2000, reporting under Item 5 and 7 its financial results for the quarter ended September 30, 2000. 12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized on the 30th day of April 2001. FLIR SYSTEMS, INC. (Registrant) /s/ Stephen M. Bailey By: _________________________________ Stephen M. Bailey Sr. Vice President, Finance and Chief Financial Officer (Principal Accounting and Financial Officer and Duly Authorized Officer) 13 EX-10.23 2 dex1023.txt SEPARATION AGREEMENT AND RELEASE EXHIBIT 10.23 SEPARATION AGREEMENT AND RELEASE The parties to this Separation and Release Agreement (Agreement) are FLIR Systems, Inc. (Company), and Robert Daltry (Executive). RECITALS A. Executive has elected to resign from his employment. B. Executive elects to receive severance pay and related benefits under this Agreement under the terms and conditions set forth below. Therefore, in consideration of the mutual promises set forth below, the parties agree as follows: 1 Employment Termination. At a mutually agreeable time on or before July 31, 2000, Executive will announce his retirement from Company, at which time his employment will terminate. Executive will simultaneously resign as Chairman of the Board and as a member of the Board of Directors. 2 Payment. Executive will receive all accrued wages owing through the last date of employment, including accrued vacation pay in the amount of One Hundred Eight Thousand Dollars ($108,000). Upon receipt of his vacation pay, Executive shall immediately pay Company Fifty Four Thousand Dollars ($54,000) in payment of his outstanding loan from Company. As consideration for this Agreement, Executive shall receive the following: a. Severance in the amount of Seven Hundred Thousand Nine Hundred Six Dollars ($700,906), payable in equal installments no less than twice monthly over two years (the Severance Period). Company will withhold taxes on this amount in accordance with all applicable local, state and federal laws. For the duration of the Severance Period, Executive shall make himself available to provide consultation to Company as needed no more than 25 hours per week on average, on such issues as may from time to time be assigned him by Company's Chief Executive Officer or his designee. All reasonable expenses incurred by Executive in fulfillment of his consulting duties shall be pre-approved and paid by the Company. Executive shall at all times comply with Company's policies and procedures to the extent they are not inconsistent with this Agreement, in which case the provisions of this Agreement prevail. b. Continued use of Executive's cellular phone, credit card, telephone calling card and laptop computer, payment of monthly car expenses for one automobile and access to Company e-mail, throughout the Severance Period. Upon expiration of the Severance Period, Executive shall return all Company property in his possession to Company in good condition; provided, however, that Executive may keep the laptop computer and cellular phone. c. Continued vesting of Executive's existing stock options through the Severance Period. d. Payment of Executive's membership dues and assessments at the Oswego Lake Country Club throughout the Severance Period. e. Payment of Executive's expenses incurred in moving his household goods and belongings from Maryland to Portland, Oregon. f. Company shall provide Executive with an office at Company until such time as Executive's move from Maryland to Portland is complete, but in no event beyond September 1, 2000. g. For the remainder of Executive's life, Company shall pay for Executive's (and anyone entitled to a claim under or through Executive) out-of- pocket cost of obtaining medical, disability and life insurance coverage at the same level Executive was receiving on his last day of work as a full time employee of Company. If Executive is or becomes eligible for continuation of group health coverage under COBRA, Company may elect to pay the premiums for continuation of Executive's group health insurance under COBRA in lieu of reimbursing Executive for privately obtained health insurance under this Section 2(g). Moreover, in the event Executive becomes eligible for Medicare coverage, Company shall reimburse Executive for medical coverage only to the extent necessary to insure that such coverage, when combined with applicable Medicare coverage, is at the same level as that provided to Executive on his last day of work as a full time employee of Company. h. At the expiration of the Severance Period, Company shall pay to Executive a non-cancellable annual fee of $125,000 per year until the earlier of Executive's death or March 3, 2024. In exchange for such payment obligation, Executive shall make himself available, at employee's discretion, to provide consultation to Company as needed on such issues as may from time to time be requested of him by the Company's Chief Executive Officer or his designee. 3. Health Insurance. Executive's coverage under Company's health insurance plan ends on July 31, 2000. If eligible, Executive may continue full health insurance benefits for himself and his immediate family as provided under federal COBRA regulations at Company's expense, as provided in Section 2(g). 4. Employee Pension and Retirement Plans. Executive shall be entitled to Executive's rights under Company's benefit plans as such plans, by their provisions, apply upon Executive's termination. 5. General Release. In consideration of the benefits provided in this Agreement, Executive releases Company, its directors, officers, agents, employees, attorneys, insurers, subsidiaries, related corporations, successors and assigns, from any and all liability, damages or causes of action, whether known or unknown, whether in tort, contract, or under state or federal statute, except for the indemnity to which he is entitled under FLIR's Articles of Incorporation. Executive understands and acknowledges that this release includes, but is not limited to any claim for reinstatement, reemployment, attorney fees or additional compensation in any form, and any claim, including but not limited to those arising under the Rehabilitation Act of 1973, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Post Civil War Civil Rights Act (42 U.S.C. 1981-88), the Equal Pay Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Vietnam Era Veterans Readjustment Assistance Act, the Fair Labor Standards Act, the Family Medical Leave Act of 1993, the Uniformed Services Employment and Re-employment Rights Act, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Employee Retirement Income Security Act of 1975 (ERISA), Executive Order 11246, as amended, and the civil rights, employment, and labor laws of any state and any regulation under such authorities relating to Executive's employment or association with Company or the termination of that employment and association. 6. Release of Rights Under Older Workers' Benefit Protection Act. In accordance with the Age Discrimination in Employment Act and Older Workers' Benefit Protection Act (collectively, the "Act"), Executive acknowledges that (1) he has been advised in writing to consult with an attorney prior to executing this Agreement; (2) he is aware of certain rights to which he may be entitled under the Act; (3) as consideration for executing this Agreement, Executive has received additional benefits and compensation of value to which he would otherwise not be entitled, (4) the parties agree that changes to this Agreement since its presentation, whether material or immaterial, shall not re- start the 21-day consideration period, and (5) by signing this Agreement, Executive will not waive rights or claims under the Act which may arise after the execution of this Agreement. Executive acknowledges that he has been given a period of at least 21 days from July 1, 2000, to consider this offer. Executive acknowledges in the event he has not executed this Agreement by August 1, 2000, the offer shall expire. Executive further acknowledges that he has a period of seven days from the date of execution in which to revoke this Agreement by written notice to John C. Hart, President and Chief Executive Officer. In the event Executive does not exercise his right to revoke this Agreement, the Agreement shall become effective on the date immediately following the seven-day waiting period described above. 7. Return of Company Property. Except as provided in Section 2, Executive agrees that on or before the effective date of his termination, he will return to Company all property belonging to Company, including, but not limited to keys, credit cards, telephone calling card, files, records, computer access codes, computer hardware, computer programs, instruction manuals, business plans, and all other property and documents which Executive prepared or received in connection with his employment with Company. 8. Confidentiality. Executive acknowledges that in the course of his employment with Company, he obtained Confidential Information, including proprietary, financial, employment, confidential and trade secret information which is not generally known to third parties. Executive recognizes and affirms his obligations not to use or disclose such information to others, notwithstanding the termination of his employment. Executive further agrees that upon termination of his employment with Company, Executive shall enter into Company's then current standard form of confidentiality and proprietary rights agreement. Executive shall at all times during the Severance and Consulting Periods comply with Company's policies and procedures to the extent they are not inconsistent with this Agreement, in which case the provisions of this Agreement prevail. 9. Nonsolicitation. Executive agrees that during the Severance and Consulting Periods, he will not, without prior written consent of Company, (i) solicit, directly or indirectly, business similar in nature to the business of Company, its subsidiaries or affiliates (collectively, "the Company"), from any person or entity which is a Company employee, customer, client or prospect, or otherwise induce any such person or entity, as the case may be, to leave the employment of the Company or cease or reduce their business relationship with the Company; (ii) directly or indirectly hire or use the services of any Company employee, or (iii) aid others in doing anything described in subsections (i) or (ii) of this paragraph, whether as an employee, officer, director, shareholder, partner, consultant or otherwise. For purposes of clause (i) of the preceding paragraph, the term "solicit" includes without limitation (a) responding to requests for proposals and invitations for bids (b) initiating contacts with Company customers, clients, or prospects for the purpose of advising them that Executive has left the employment of the Company and is available for work which is competitive with the services offered by the Company, and (c) participating in joint ventures or teaming agreements or acting as a consultant or subcontractor or employee of others who directly solicit business prohibited by this Agreement. The terms "client" and "customer" include any then current client or customer, and the parent corporation, subsidiary corporation, affiliate corporation or partner or joint venture of a client or customer. "Prospect" means any person or entity to whom the Company has submitted a bid or proposal within the then immediately preceding six (6) months. 10. Noncompetition. Executive agrees that during the Severance and Consulting Periods, he will not, without prior written consent of Company, directly or indirectly Compete (defined below) with Company anywhere Company is doing or planning to do business, nor engage in any other activity which would conflict with the Company's business or interfere with Executive's obligations to the Company. "Compete" means directly or indirectly: (i) have any financial interest in, (ii) join, operate, control or participate in, or be connected as an officer, employee, agent, independent contractor, partner, principal or shareholder with (except as holder of not more than five percent (5%) of the outstanding stock of any class of a corporation, the stock of which is actively publicly traded) or (iii) provide services in any capacity to those participating in the ownership, management, operation or control of, and/or (iv) act as a consultant or subcontractor to, a Competitive Business (defined below). "Competitive Business" means any corporation, proprietorship, association or other entity or person then engaged in the sale, production and/or development of products or the rendering of services of a kind similar to or competitive with those then being sold, produced, developed or rendered by Company. 11. Disclosure of this Agreement. Employee and Company shall keep both the fact and terms of this Agreement secret and confidential, except that Employee and Company may disclose this Agreement (1) to Employee's immediate family, (2) to Employee's or Company's lawyers, tax accountants and other advisors (including certain employees of Company) in order to seek advice about its provisions, properly account for and report its effects, (3) to obtain enforcement of any of its provisions, and (4) as required by law, provided anyone to whom Employee or Company is authorized to disclose this Agreement agrees to be bound by the terms of this paragraph. 11 Disparagement. Executive will not make any malicious, disparaging or false remarks about Company, its officers, directors or employees. Executive further agrees to refrain from making any negative statements regarding Company to any third parties or any statements which could be construed as having or causing a diminishing effect on Company's reputation, goodwill or business. The parties acknowledge that this commitment does not affect Executive's obligation to testify truthfully in any litigation, and any such testimony will not constitute a violation of this provision. 12 Consent to Injunction. Executive agrees that his violation of paragraphs 8, 9, 10 or 11 will constitute a breach of this Agreement that will cause irreparable injury to Company, and that monetary damages alone would not adequately compensate Company for the harm suffered. Executive agrees that Company shall be entitled to injunctive relief to enjoin any breach or threatened breach of paragraphs 8, 9, 10 or 11 in addition to any other available remedies. 13 Representation. Executive represents and warrants that, during his tenure as an employee, officer and/or director of Company, he has engaged in no conduct that is improper, illegal or otherwise in violation of his fiduciary duties to Company. 14 Cooperation. Executive shall make himself available to the Company's attorneys for meetings, to prepare for and provide testimony, and as reasonably necessary in any litigation, without the requirement of a subpoena. 15 No Admission of Liability. Executive agrees that nothing in this Separation Agreement and Release, its contents, and any payments made under it, will be construed as an admission of liability on the part of Company. 16 Dispute Resolution. The parties agree that any dispute (1) concerning the interpretation, construction or breach of this Agreement, (2) arising from Executive's employment or service with Company, (3) relating to any compensation or benefits Executive may claim, or (4) relating in any way to any claim by Executive for reinstatement or reemployment by Company after execution of this Agreement shall be submitted to a mediator agreed upon by the parties for nonbinding confidential mediation under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA). Each party shall bear their own costs of mediation. If the matter cannot be resolved with the aid or the mediator, it shall be submitted to AAA for final and binding confidential arbitration. Both parties agree that the procedures outlined in this paragraph are the exclusive methods of dispute resolution; provided, however, that Company shall be entitled to seek injunctive relief in any court of competent jurisdiction to prevent a breach or threatened breach of paragraphs 8, 9, 10 or 11, notwithstanding anything in this paragraph to the contrary. 17. Governing Law, Forum and Attorney Fees. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Oregon. In the event of any suit, action or arbitration to interpret or enforce this Agreement, the prevailing party shall be entitled to its attorney fees, costs, and out-of-pocket expenses, at trial and on appeal. The exclusive jurisdiction for any action to interpret or enforce this Agreement shall be Multnomah County, Oregon. 18. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties, and their respective heirs, executors, administrators, successors, assigns and other legal representatives. This Agreement may not be assigned by Executive. 20. Severability. The provisions of this Agreement are severable. If any provision of this Agreement or its application is held invalid, the invalidity shall not affect other obligations, provisions, or applications of this Agreement which can be given effect without the invalid obligations, provisions, or applications. 19. Waiver. The failure of either party to demand strict performance of any provision of this Agreement shall not constitute a waiver of any provision, term, covenant, or condition of this agreement or of the right to demand strict performance in the future. 20. Section Headings. The section headings contained herein are for reference purposes only and will not in any way affect the meaning or interpretation of this Agreement. 21. Entire Agreement. This Agreement and any prior confidentiality, assignment of inventions, and/or non-solicitation agreement Executive entered into with Company or any predecessor company acquired by or affiliated with Company, constitute the entire agreement of Company and Executive, and supersede all prior or contemporaneous oral or written understandings, statements, representations or promises with respect to their subject matter. Each of the rights, obligations and remedies provided for in these agreements shall be cumulative. This Agreement was the subject of negotiation between the parties and, therefore, the parties agree that the rule of construction requiring that the agreement be construed against the drafter shall not apply to the interpretation of this agreement. This Agreement is not effective until it is signed by all parties. ROBERT DALTRY FLIR SYSTEMS, INC. By: /s/ Robert P. Daltry By: /s/ John C. Hart ------------------------------- --------------------------------- Date: 7/31/00 Date: 7/28/00 ----------------------------- ------------------------------- EX-23.0 3 dex230.txt CONSENT OF ARTHUR ANDERSEN LLP EXHIBIT 23.0 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 10-K/A, into the Company's previously filed Registration Statements on Form S-8 (No. 33-82676, 33-82194, 33-95248, 333-65063 and 333-36206). /s/ Arthur Andersen LLP Portland, Oregon April 27, 2001 EX-23.1 4 dex231.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No's. 33-82676, 33-82194, 33-95248, 333-65063 and 333- 36206) of FLIR Systems, Inc. of our report dated April 14, 2000, except as to Note 15 which is as of March 23, 2001, relating to the financial statements and financial statement schedules which have been incorporated by reference in this Form 10-K/A. /s/ PricewaterhouseCoopers LLP Portland, Oregon April 27, 2001 EX-23.2 5 dex232.txt CONSENT OF ERNST & YOUNG LLP EXHIBIT 23.2 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 33-82676, 33-82194, 33-95248, 333-65063 and 333-36206) of FLIR Systems, Inc. of our report dated February 19, 1999, with respect to the consolidated financial statements and schedule of Inframetrics, Inc. included (not presented separately) in the Annual Report (Form 10-K) of FLIR Systems, Inc. for the year ended December 31, 2000. /s/ Ernst & Young Boston, Massachusetts April 27, 2001 -----END PRIVACY-ENHANCED MESSAGE-----