-----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, KtJ/fSB8yaKUrz7KEZrVdSjHpP9FHj0bgBS5ETc7cJPPjjqAEGMmRc1Vs+SntVse 0wvPg4mPh6P66BXrg5NsZw== 0000721356-99-000013.txt : 19990811 0000721356-99-000013.hdr.sgml : 19990811 ACCESSION NUMBER: 0000721356-99-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 19990703 FILED AS OF DATE: 19990810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMEDICS INC CENTRAL INDEX KEY: 0000721356 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 042788806 STATE OF INCORPORATION: DE FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09567 FILM NUMBER: 99682407 BUSINESS ADDRESS: STREET 1: 470 WILDWOOD ST STREET 2: P O BOX 2697 CITY: WOBURN STATE: MA ZIP: 01888-1799 BUSINESS PHONE: 7819383786 MAIL ADDRESS: STREET 1: 81 WYMAN STREET STREET 2: P.O. BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02254 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ---------------------------------------------------- FORM 10-Q (mark one) [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarter Ended July 3, 1999 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 1-9567 THERMEDICS INC. (Exact name of Registrant as specified in its charter) Massachusetts 04-2788806 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 470 Wildwood Street, P.O. Box 2999 Woburn, Massachusetts 01888-1799 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (781) 622-1000 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 the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Class Outstanding at July 30, 1999 Common Stock, $.10 par value 41,938,120
PART I - FINANCIAL INFORMATION Item 1 - Financial Statements THERMEDICS INC. Consolidated Balance Sheet (Unaudited) Assets July 3, January 2, (In thousands) 1999 1999 - ----------------------------------------------------------------------------------- ---------- ---------- Current Assets: Cash and cash equivalents (includes $73,377 under repurchase $ 21,545 $142,108 agreements with parent company in 1998) Advance to affiliate (Note 9) 75,079 - Short-term available-for-sale investments, at quoted market value 65,750 43,310 (amortized cost of $65,780 and $43,155) Accounts receivable, less allowances of $5,012 and $4,498 64,215 63,438 Inventories: Raw materials and supplies 24,134 25,275 Work in process 16,153 15,918 Finished goods 20,496 21,590 Prepaid income taxes and expenses 15,220 14,572 -------- -------- 302,592 326,211 -------- -------- Property, Plant, and Equipment, at Cost 60,207 60,687 Less: Accumulated depreciation and amortization 39,994 38,780 -------- -------- 20,213 21,907 -------- -------- Long-term Available-for-sale Investments, at Quoted Market Value 46,704 47,259 (amortized cost of $46,798 and $47,226) -------- -------- Other Assets 11,986 12,723 -------- -------- Cost in Excess of Net Assets of Acquired Companies (Notes 6 and 8) 125,102 145,518 -------- -------- $506,597 $553,618 ======== ======== 2 THERMEDICS INC. Consolidated Balance Sheet (continued) (Unaudited) Liabilities and Shareholders' Investment July 3, January 2, (In thousands except share amounts) 1999 1999 - ----------------------------------------------------------------------------------- ----------- ---------- Current Liabilities: Note payable to parent company $ 13,000 $19,000 Notes payable and current maturity of long-term obligations 6,319 6,312 Accounts payable 19,675 20,695 Accrued payroll and employee benefits 10,967 12,830 Accrued income taxes 6,440 8,159 Accrued installation and warranty expenses 4,274 4,483 Customer deposits 3,924 3,523 Other accrued expenses 19,042 16,821 Due to parent company and affiliated companies 2,621 2,096 -------- -------- 86,262 93,919 -------- -------- Deferred Income Taxes and Other Deferred Items 449 191 -------- -------- Long-term Obligations: Subordinated convertible obligations 117,424 122,674 Other 204 128 -------- -------- 117,628 122,802 -------- -------- Minority Interest 79,586 88,730 -------- -------- Shareholders' Investment: Common stock, $.10 par value, 100,000,000 shares authorized; 4,199 4,174 41,989,053 and 41,739,308 shares issued Capital in excess of par value 109,548 106,846 Retained earnings 116,929 139,644 Treasury stock at cost, 31,232 and 47,348 shares (612) (1,026) Deferred compensation (1,969) - Accumulated other comprehensive items (Note 2) (5,423) (1,662) -------- -------- 222,672 247,976 -------- -------- $506,597 $553,618 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. 3 THERMEDICS INC. Consolidated Statement of Operations (Unaudited) Three Months Ended July 3, July 4, (In thousands except per share amounts) 1999 1998 - ----------------------------------------------------------------------------------- ----------- ---------- Revenues $ 78,164 $ 76,711 -------- -------- Costs and Operating Expenses: Cost of revenues (Note 8) 41,595 38,872 Selling, general, and administrative expenses 22,577 22,421 Research and development expenses 6,993 6,146 Restructuring and other nonrecurring costs (Notes 7 and 8) 30,488 - -------- -------- 101,653 67,439 -------- -------- Operating Income (Loss) (23,489) 9,272 Interest Income 2,637 3,281 Interest Expense (includes $241 and $77 to parent company) (1,493) (1,233) Gain on Sale of Investments, Net - 13 -------- -------- Income (Loss) Before Provision for Income Taxes, Minority Interest, and (22,345) 11,333 Extraordinary Item Provision for Income Taxes (Note 8) 2,270 4,331 Minority Interest Expense 682 1,728 -------- -------- Income (Loss) Before Extraordinary Item (25,297) 5,274 Extraordinary Item, Net of Provision of Income Taxes of $2,312 (Note 3) - 3,433 -------- -------- Net Income (Loss) $(25,297) $ 8,707 ======== ======== Earnings (Loss) per Share (Note 3): Basic $ (.61) $ .21 ======== ======== Diluted $ (.61) $ .20 ======== ======== Weighted Average Shares (Note 3): Basic 41,768 41,663 ======== ======== Diluted 41,768 43,494 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. 4 THERMEDICS INC. Consolidated Statement of Operations (Unaudited) Six Months Ended July 3, July 4, (In thousands except per share amounts) 1999 1998 - ----------------------------------------------------------------------------------- ----------- ---------- Revenues $ 155,768 $ 152,372 --------- --------- Costs and Operating Expenses: Cost of revenues (Note 8) 81,730 77,533 Selling, general, and administrative expenses 45,482 43,482 Research and development expenses 14,501 12,775 Restructuring and other nonrecurring costs (Notes 7 and 8) 31,883 - --------- --------- 173,596 133,790 --------- --------- Operating Income (Loss) (17,828) 18,582 Interest Income 5,484 6,946 Interest Expense (includes $483 and $77 to parent company) (2,946) (2,439) Gain on Sale of Investments, Net - 31 --------- --------- Income (Loss) Before Provision for Income Taxes, Minority Interest, and (15,290) 23,120 Extraordinary Item Provision for Income Taxes (Note 8) 5,527 9,100 Minority Interest Expense 1,898 3,378 --------- --------- Income (Loss) Before Extraordinary Item (22,715) 10,642 Extraordinary Item, Net of Provision of Income Taxes of $3,092 (Note 3) - 4,638 --------- --------- Net Income (Loss) $ (22,715) $ 15,280 ========= ========= Earnings (Loss) per Share (Note 3): Basic $ (.54) $ .37 ========= ========= Diluted $ (.54) $ .36 ========= ========= Weighted Average Shares (Note 3): Basic 41,732 40,760 ========= ========= Diluted 41,732 42,709 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. 5 THERMEDICS INC. Consolidated Statement of Cash Flows (Unaudited) Six Months Ended July 3, July 4, (In thousands) 1999 1998 - ----------------------------------------------------------------------------------- ----------- ---------- Operating Activities: Net income (loss) $ (22,715) $ 15,280 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Noncash restructuring costs (Note 8) 30,105 - Depreciation and amortization 5,819 5,392 Minority interest expense 1,898 3,378 Gain on repurchase of subordinated convertible debentures - (7,730) Provision for losses on accounts receivable 913 391 Other noncash expenses 1,425 453 Change in current accounts: Accounts receivable (3,348) 4,641 Inventories (81) (2,338) Prepaid income taxes and expenses (47) (597) Accounts payable (461) (1,596) Other current liabilities (3,528) (3,849) Other (367) (335) --------- --------- Net cash provided by operating activities 9,613 13,090 --------- --------- Investing Activities: Advances to affiliate, net (Note 9) (75,079) - Acquisition of Thermo Voltek common stock (Note 6) (20,482) - Acquisitions, net of cash acquired - (44,195) Purchases of available-for-sale investments (127,325) (126,950) Proceeds from sale and maturities of available-for-sale investments 105,648 99,975 Purchases of property, plant, and equipment (3,331) (3,741) Other 1,188 (503) --------- --------- Net cash used in investing activities (119,381) (75,414) --------- --------- Financing Activities: Repayment of subordinated convertible debentures (Note 6) (5,080) - Repayment of short-term obligation to Thermo Electron (6,000) - Net increase (decrease) in short-term borrowings 464 (186) Proceeds from issuance of short-term obligation to Thermo Electron - 21,000 Purchases of Company and subsidiary common stock (926) (11,737) Purchase of subordinated convertible debentures - (11,384) Net proceeds from issuance of Company and subsidiary common stock 964 251 Other 76 - --------- --------- Net cash used in financing activities $ (10,502) $ (2,056) --------- --------- 6 THERMEDICS INC. Consolidated Statement of Cash Flows (continued) (Unaudited) Six Months Ended July 3, July 4, (In thousands) 1999 1998 - ----------------------------------------------------------------------------------- ----------- ---------- Exchange Rate Effect on Cash $ (293) $ 552 --------- -------- Decrease in Cash and Cash Equivalents (120,563) (63,828) Cash and Cash Equivalents at Beginning of Period 142,108 187,012 --------- -------- Cash and Cash Equivalents at End of Period $ 21,545 $123,184 ========= ======== Noncash Activities: Fair value of assets of acquired companies $ - $ 54,294 Cash paid for acquired companies acquired - (44,195) --------- -------- Liabilities assumed of acquired companies $ - $ 10,099 ========= ======== The accompanying notes are an integral part of these consolidated financial statements. 7 Notes to Consolidated Financial Statements 1. General The interim consolidated financial statements presented have been prepared by Thermedics Inc. (the Company) without audit and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the financial position at July 3, 1999, the results of operations for the three- and six-month periods ended July 3, 1999, and July 4, 1998, and the cash flows for the six-month periods ended July 3, 1999, and July 4, 1998. Interim results are not necessarily indicative of results for a full year. The consolidated balance sheet presented as of January 2, 1999, has been derived from the consolidated financial statements that have been audited by the Company's independent public accountants. The consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in the annual financial statements and notes of the Company. The consolidated financial statements and notes included herein should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1999, filed with the Securities and Exchange Commission. 2. Comprehensive Income Comprehensive income combines net income and "other comprehensive items," which represents certain amounts that are reported as components of shareholders' investment in the accompanying balance sheet, including foreign currency translation adjustments and unrealized net of tax gains and losses from available-for-sale investments. The Company had a comprehensive loss of $26,320,000 in the second quarter of 1999 and comprehensive income of $8,902,000 in the second quarter of 1998. The Company had a comprehensive loss of $25,549,000 in the first six months of 1999 and comprehensive income of $15,326,000 in the first six months of 1998.
3. Earnings (Loss) per Share Basic and diluted earnings (loss) per share were calculated as follows: Three Months Ended Six Months Ended July 3, July 4, July 3, July 4, (In thousands except per share amounts) 1999 1998 1999 1998 - ------------------------------------------------------------- ---------- ----------- ---------- ---------- Basic Net Income (Loss) $(25,297) $ 8,707 $(22,715) $ 15,280 -------- -------- -------- -------- Weighted Average Shares 41,768 41,663 41,732 40,760 ------- -------- ------- -------- Basic Earnings (Loss) per Share $ (.61) $ .21 $ (.54) $ .37 ======= ======== ======== ======== Diluted Net Income (Loss) $(25,297) $ 8,707 $(22,715) $ 15,280 Effect of: Convertible obligations - 1 - 1 Majority-owned subsidiaries' dilutive securities (10) (24) (13) (59) ------- -------- ------- -------- Income (Loss) Available to Common Shareholders, as (25,307) 8,684 (22,728) 15,222 ------- -------- ------- -------- Adjusted Weighted Average Shares 41,768 41,663 41,732 40,760 Effect of: Convertible obligations - 1,722 - 1,827 Stock options - 109 - 122 ------- -------- ------- -------- Weighted Average Shares, as Adjusted 41,768 43,494 41,732 42,709 ------- -------- ------- -------- Diluted Earnings (Loss) per Share $ (.61) $ .20 $ (.54) $ .36 ======= ======== ======= ======== 8 3. Earnings (Loss) per Share (continued) The computation of diluted earnings (loss) per share for all periods excludes the effect of assuming the exercise of certain outstanding stock options because the effect would be antidilutive. As of July 3, 1999, there were 1,936,000 of such options outstanding, with exercise prices ranging from $4.70 to $29.08 per share. In addition, the computation of diluted earnings per share for the second quarter and first six months of 1999 excludes the effect of assuming the conversion of convertible obligations because the effect would be antidilutive. As of July 3, 1999, the calculation excluded $15,859,000 principal amount of 2.875% subordinated convertible debentures, convertible at $14.928 per share, and $31,565,000 principal amount of noninterest bearing subordinated convertible debentures, convertible at $32.68 per share. During the second quarter of 1998, the Company recorded an extraordinary gain in connection with the repurchase and exchange of subsidiary subordinated convertible debentures, which increased basic and diluted earnings per share by $.08 and $.11 in the second quarter and first six months of 1998, respectively. 4. Business Segment Information Three Months Ended Six Months Ended July 3, July 4, July 3, July 4, (In thousands) 1999 1998 1999 1998 - ------------------------------------------------------------- ---------- ----------- ---------- ---------- Revenues: Quality Assurance and Security Products $ 18,187 $ 23,957 $38,599 $ 47,664 Precision Weighing and Inspection Equipment 28,106 21,612 54,662 40,558 Heart Assist and Blood Testing Devices 20,215 16,133 39,676 32,618 Power Electronics and Test Equipment 6,574 10,725 12,791 22,165 Other 5,082 4,284 10,040 9,367 -------- -------- ------- -------- $ 78,164 $ 76,711 $155,768 $152,372 ======== ========= ======== ======== Income (Loss) Before Provision for Income Taxes, Minority Interest, and Extraordinary Item: Quality Assurance and Security Products $ 2,081 $ 3,445 $ 4,728 $ 6,515 Precision Weighing and Inspection Equipment 3,105 2,386 5,113 4,346 Heart Assist and Blood Testing Devices 2,437 1,972 4,497 4,682 Power Electronics and Test Equipment (a) (31,690) 885 (32,019) 1,707 Other 1,187 945 2,139 2,054 Corporate (b)(c) (609) (361) (2,286) (722) -------- --------- ------- -------- Total operating income (loss) (23,489) 9,272 (17,828) 18,582 Interest and other income, net 1,144 2,061 2,538 4,538 -------- --------- ------- -------- $(22,345) $ 11,333 $(15,290) $ 23,120 ======== ========= ======== ======== (a) Includes $30,223,000 of restructuring and nonrecurring costs in the second quarter and first six months of 1999. (b) Includes $265,000 and $1,660,000 of nonrecurring costs in the second quarter and first six months of 1999, respectively. (c) Primarily general and administrative expenses and nonrecurring costs. 9 5. Accrued Acquisition Expenses The Company has undertaken restructuring activities at certain acquired businesses. The Company's restructuring activities, which were accounted for in accordance with Emerging Issues Task Force Pronouncement (EITF) 95-3, primarily have included reductions in staffing levels and the abandonment of excess facilities. In connection with these restructuring activities, as part of the cost of acquisitions, the Company established reserves, primarily for severance and excess facilities. The Company finalized its restructuring plans for businesses acquired in June 1998 during the second quarter of 1999. Amounts accrued at July 3, 1999, represent ongoing lease obligations (net of sublease income) through 2008 for abandoned facilities, as well as severance, which will be paid during the third quarter of 1999. A summary of the changes in accrued acquisition expenses, included in other accrued expenses in the accompanying balance sheet, follows:
Abandonment of Excess (In thousands) Severance Facilities Other Total - ----------------------------------------------- -------------- -------------- -------------- ------------- Balance at January 2, 1999 $ 177 $ 788 $ - $ 965 Reserves established 478 1,151 62 1,691 Usage (408) (309) (22) (739) Currency translation - (21) - (21) ------ ------ ------ ------ Balance at July 3, 1999 $ 247 $1,609 $ 40 $1,896 ====== ====== ====== ====== 6. Merger with Thermo Voltek Corp. In March 1999, the Company acquired, through a merger, all of the outstanding shares of Thermo Voltek Corp., a majority-owned subsidiary of the Company, that it did not previously own, other than the shares owned by Thermo Electron Corporation. The total cost of the acquisition is expected to be $25,732,000, including related expenses and the repayment of Thermo Voltek's $5,250,000 principal amount of 3 3/4% subordinated convertible debentures, which became due and payable at the election of the holder following the merger, and Thermo Voltek's outstanding stock options. To date, the Company has repaid $5,080,000 principal amount of Thermo Voltek's debentures. The Thermo Voltek stock options were converted into stock options that are exercisable into 619,819 shares of Company common stock at a weighted average price of $6.33 per share, with an aggregate value of $703,000 as of the date of the acquisition. Subsequent to this transaction, the Company and Thermo Electron owned approximately 97% and 3%, respectively, of the outstanding common stock of Thermo Voltek. The cost of the acquisition exceeded the estimated fair value of the incremental net assets by $10,050,000. Pro forma data is not presented since the acquisition of the minority interest of Thermo Voltek was not material to the Company's results of operations. In late March and early April 1998, four putative class actions were filed in the Court of Chancery of the State of Delaware in and for New Castle County by shareholders of Thermo Voltek, which were consolidated under the caption In re Thermo Voltek Corp. Shareholders Litigation, Consolidated C.A. 16287 (the Action) in October 1998. The complaint in the Action names the Company, Thermo Voltek, Thermo Electron, and directors of Thermo Voltek as defendants and alleges, among other things, that Thermo Voltek's directors violated the fiduciary duties of loyalty, good faith, and fair dealing that they owed to all shareholders of Thermo Voltek other than the named defendants and the affiliates of the named defendants because the proposed price of $7.00 per share to be paid to Thermo Voltek's shareholders under the terms of the proposed Merger Agreement was allegedly unfair and grossly inadequate. The complaints further allege that the Company, Thermo Voltek, and Thermo Electron have violated their alleged fiduciary duty of fair dealing by proposing the merger transaction at the time. The parties are currently conducting discovery. Due to the inherent uncertainty of litigation, the outcome of this matter cannot be estimated. The Company expects, however, that any resolution will not materially affect its future results of operations or financial position. 10 7. Proposed Reorganization and Related Costs During 1998, Thermo Electron announced a proposed reorganization involving certain of Thermo Electron's subsidiaries, including the Company. Under this plan, the Company would acquire Thermo Electron's wholly owned biomedical group for shares of Company common stock. In addition, the Company's equity interests in its Thermo Sentron Inc., Thermedics Detection Inc., and Thermo Voltek subsidiaries would be transferred to Thermo Electron for shares of common stock of the Company. Thermo Electron would take Thermo Sentron and Thermedics Detection private; shareholders of these subsidiaries would receive cash in exchange for their shares of common stock. The proposed transactions are subject to a number of conditions, including the establishment of prices and exchange ratios; confirmation of anticipated tax consequences; the approval by the Board of Directors of the Company, Thermo Sentron, and Thermedics Detection (including their respective independent directors); negotiation and execution of definitive agreements; clearance by the Securities and Exchange Commission of any necessary documents in connection with the proposed transactions; approval by the Board of Directors of Thermo Electron; and receipt of fairness opinions from investment banking firms on certain financial aspects of the transactions. In connection with this transaction, the Company recorded $1,660,000 of nonrecurring costs in the first six months of 1999, as discussed in Note 8. 8. Restructuring and Related Costs During the second quarter of 1999, the Company recorded restructuring and related costs of $32,813,000, including restructuring costs of $30,105,000, nonrecurring costs of $383,000, a tax asset write-off of $1,409,000, and an inventory provision of $916,000. The tax asset write-off is included in the provision for income taxes and the inventory provision is included in cost of sales in the accompanying statement of operations. Restructuring costs of $30,105,000 related to the Company's decision to sell its power electronics and test equipment business and includes $28,542,000 to write off related cost in excess of net assets of acquired companies to reduce the carrying value of the business to the estimated proceeds from its sale. In addition, restructuring costs include a charge of $1,563,000 recorded by the Company to write off the Company's remaining net investment in a subsidiary of this business, which the Company intends to transfer to a buyer in consideration for a release from certain contractual obligations, primarily ongoing lease obligations. The tax write-off represents a deferred tax asset that will not be realized as a result of exiting this business. The inventory provision results from exiting and reengineering certain product lines. Unaudited revenues and operating losses before restructuring and related costs of the power electronics and test equipment business were $12,791,000 and $880,000, respectively, for the first six months of 1999 and $37,940,000 and $173,000, respectively, for 1998. Nonrecurring costs of $383,000 includes $265,000 related to the Company's proposed reorganization (Note 7), and $118,000 to write off a receivable as a result of an unfavorable resolution of a post-closing adjustment in connection with the sale of a business in 1998. During the first quarter of 1999, the Company recorded $1,395,000 of costs in connection with the Company's proposed reorganization (Note 7), primarily investment banking fees. 9. Cash Management Arrangement Effective June 1, 1999, the Company and Thermo Electron commenced use of a new domestic cash management arrangement. Under the new arrangement, amounts advanced to Thermo Electron by the Company for domestic cash management purposes bear interest at the 30-day Dealer Commercial Paper Rate plus 50 basis points, set at the beginning of each month. Thermo Electron is contractually required to maintain cash, cash equivalents, and/or immediately available bank lines of credit equal to at least 50% of all funds invested under this cash management arrangement by all Thermo Electron subsidiaries other than wholly owned subsidiaries. The Company has the contractual right to withdraw its funds invested in the cash management arrangement upon 30 days' prior notice. Amounts invested in this arrangement are included in "advance to affiliate" in the accompanying balance sheet. 11 10. Subsequent Event In July 1999, the Company acquired Erich Jaeger, GmbH, a medical products company based in Germany, for approximately $42 million, including the repayment of Jaeger's indebtedness. Jaeger develops and manufactures equipment for lung-function, cardio-respiratory, and sleep-disorder diagnosis and monitoring. The Company will account for the acquisition using the purchase method of accounting and its results of operations will be included in the Company's results of operations from the date of acquisition. The Company financed this acquisition with $31.0 million of short-term borrowings from a wholly owned subsidiary of Thermo Electron and a third party. The borrowings from the third party are expected to be refinanced with the wholly owned subsidiary of Thermo Electron and will be due on demand and bear interest at a variable rate. The Company also expects to refinance $7.0 million of existing debt at Jaeger with additional borrowings from the wholly owned subsidiary of Thermo Electron under similar terms. In addition, Jaeger has other borrowings of $3.5 million, which the Company expects to repay upon maturity in May 2000. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, are made throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including those detailed under the heading "Forward-looking Statements" in Exhibit 13 to the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1999, filed with the Securities and Exchange Commission. Overview The Company's businesses operate in four reportable segments: Quality Assurance and Security Products (Quality Assurance), Precision Weighing and Inspection Equipment (Inspection Equipment), Heart Assist and Blood Testing Devices (Heart Assist Devices), and Power Electronics and Test Equipment (Power Equipment). Through the Company's Thermedics Detection Inc. subsidiary, the Quality Assurance segment develops, manufactures, and markets high-speed detection and measurement instruments used in a variety of on-line industrial process applications, security applications, and laboratory analyses. The Inspection Equipment segment includes the Company's Thermo Sentron Inc. subsidiary, which develops, manufactures, and markets high-speed precision-weighing and inspection equipment for industrial production and packaging lines. In June 1998, Thermo Sentron acquired the three businesses that constituted the product-monitoring group of Graseby Limited (the product-monitoring businesses), a subsidiary of Smiths Industries plc. The Power Equipment segment manufactures electronics-test instruments and a range of products related to power amplification, conversion, and quality. The Heart Assist Devices segment, consisting of the Company's Thermo Cardiosystems Inc. subsidiary, manufactures two implantable left ventricular-assist systems (LVAS): a pneumatic, or air-driven, system and an electric version. The electric LVAS is being used in Europe as a bridge to transplant and to provide long-term cardiac support for patients not eligible for a heart transplant. In general, a profit cannot be earned from the sale of an LVAS in the United States until approval of the device for commercial sale has been received from the U.S. Food and Drug Administration (FDA). Both the air-driven and electric LVAS have received FDA approval for use as a bridge to transplant in the United States. Until FDA approval has been obtained, the Company may not earn a profit on the sale in the U.S. of products currently used in clinical studies. Thermo Cardiosystems' International Technidyne Corporation subsidiary is a leading manufacturer of near-patient, whole-blood coagulation testing equipment and related disposables and also manufactures premium-quality, single-use skin-incision devices. In July 1999, the Company acquired Erich Jaeger, GmbH, which will subsequently comprise the Company's Respiratory-care Products segment. 12 Overview (continued) The Company also develops and manufactures enteral nutrition-delivery systems and a line of medical-grade polymers used in medical disposables and in nonmedical, industrial applications, including safety glass and automotive coatings. A significant amount of the Company's revenues is derived from sales of products outside of the U.S., through export sales and sales by the Company's foreign subsidiaries. The Company expects an increase in the percentage of revenues derived from international operations. Although the Company seeks to charge its customers in the same currency as its operating costs, the Company's financial performance and competitive position can be affected by currency exchange rate fluctuations between the U.S. dollar and foreign currencies. Where appropriate, the Company uses forward contracts to reduce its exposure to currency fluctuations. Results of Operations Second Quarter 1999 Compared With Second Quarter 1998 Total revenues increased to $78.2 million in the second quarter of 1999 from $76.7 million in the second quarter of 1998. Increases in revenues in the Inspection Equipment segment of $6.5 million and the Heart Assist Devices segment of $4.1 million were partially offset by decreases in revenues in the Quality Assurance segment of $5.8 million and the Power Equipment segment of $4.2 million. Revenues from the Inspection Equipment segment increased to $28.1 million in the second quarter of 1999 from $21.6 million in the second quarter of 1998. Revenues increased $7.1 million as a result of the inclusion of a full three months of revenues from the product-monitoring businesses, which were acquired by Thermo Sentron in June 1998. This increase was offset in part by decreases in revenues of $0.2 million from existing businesses, primarily due to decreased demand in Europe, and $0.4 million due to the impact of a stronger U.S. dollar relative to currencies in foreign countries in which Thermo Sentron operates. Heart Assist Devices segment revenues increased to $20.2 million in the second quarter of 1999 from $16.1 million in the second quarter of 1998. Revenues from Thermo Cardiosystems' LVAS increased to $10.5 million in 1999 from $7.1 million in 1998, primarily due to an increase in demand for the electric LVAS as a result of FDA approval, which was granted in September 1998, and, to a lesser extent, price increases for the electric LVAS. These increases were offset in part by a decrease in revenues from the air-driven LVAS and the expiration of several government research and development contracts. Revenues from the Quality Assurance segment decreased to $18.2 million in the second quarter of 1999 from $24.0 million in the second quarter of 1998. Revenues from Thermedics Detection's industrial process instruments decreased $3.0 million, primarily due to lower revenues from ALEXUS(R) and near-infrared analyzers and related contract revenues, offset in part by an increase in EZ Flash(TM) product sales. Revenues from Thermedics Detection's laboratory products decreased $1.2 million, primarily due to lower worldwide demand for its products and, to a lesser extent, the expiration of two private label agreements. In addition, revenues from EGIS(R) explosives-detection systems and related services decreased $1.2 million, primarily due to lower shipments of security systems. Revenues from the Power Equipment segment decreased to $6.6 million in the second quarter of 1999 from $10.7 million in the second quarter of 1998, primarily due to lower sales of electrostatic discharge (ESD) test equipment to the semiconductor industry and lower demand for certain lower-margin products in Europe. The decrease in revenues was also due to the sale of the segment's Universal Voltronics division in November 1998, which contributed $1.6 million in revenues in the 1998 period. 13 Second Quarter 1999 Compared With Second Quarter 1998 (continued) The gross profit margin was 47% in the second quarter of 1999, compared with 49% in the second quarter of 1998. The gross profit margin in the Power Equipment segment decreased to 24% in 1999 from 45% in 1998, primarily due to inventory provisions of $0.9 million associated with exiting and reengineering certain product lines and, to a lesser extent, lower revenues. The gross profit margin in the Inspection Equipment segment decreased to 39% in 1999 from 40% in 1998, primarily due to the inclusion of a full three months of lower-margin revenues from the acquired product-monitoring businesses. Selling, general, and administrative expenses as a percentage of revenues were unchanged at 29% in the second quarter of 1999 and 1998. Research and development expenses increased to $7.0 million in the second quarter of 1999 from $6.1 million in the second quarter of 1998. The increase reflects increased expenses at the Heart Assist Devices segment associated with a clinical trial being conducted to evaluate the electric LVAS as an alternative to medical therapy, as well as expenses associated with the development of the HeartMate II system. In addition, research and development expenses increased at Thermo Sentron due to the inclusion of a full three months of expenses from the acquired product-monitoring businesses. The Company recorded restructuring and other nonrecurring costs of $30.5 million in the second quarter of 1999 (Note 8). The Company recorded $30.1 million of restructuring costs, including $28.5 million to write off cost in excess of net assets of acquired companies, and $1.6 million to write off its investment in a wholly owned subsidiary. The Company also recorded $0.4 million of nonrecurring costs in the second quarter of 1999, including $0.3 million incurred in connection with the Company's proposed reorganization (Note 7) and $0.1 million incurred as a result of an unfavorable resolution of a post-closing adjustment in connection with the sale of a business. Interest income decreased to $2.6 million in the second quarter of 1999 from $3.3 million in the second quarter of 1998, primarily due to lower average invested balances as a result of cash expended for the acquisition of the product-monitoring businesses, the repurchase of securities of the Company and certain of its majority-owned subsidiaries, and a decrease in interest rates. Interest expense increased to $1.5 million in the second quarter of 1999 from $1.2 million in the second quarter of 1998, primarily as a result of interest expense on borrowings from Thermo Electron Corporation used to partially finance the acquisition of the product-monitoring businesses and, to a lesser extent, the Company's issuance of $15.9 million principal amount of 2.875% subordinated convertible debentures in exchange for $21.7 million principal amount of noninterest-bearing subordinated convertible debentures in July 1998. The Company recorded income tax expense of $2.3 million in the second quarter of 1999 on a pretax loss, primarily due to the effect of certain nondeductible restructuring costs, primarily the write-off of cost in excess of net assets of acquired companies, as well as the write-off of a $1.4 million tax asset (Note 8). The effective tax rate in 1998 was 38%. This rate exceeded the statutory federal income tax rate primarily due to the impact of state income taxes and nondeductible amortization of cost in excess of net assets of acquired companies. Minority interest expense decreased to $0.7 million in the second quarter of 1999 from $1.7 million in the second quarter of 1998, primarily due to the Company's increased ownership of Thermo Voltek and lower profits at the Company's Thermedics Detection subsidiary. In the second quarter of 1998, the Company and a majority-owned subsidiary recorded a gain of $3.4 million, net of related income taxes of $2.3 million, on the repurchase and exchange of subordinated convertible debentures. 14 First Six Months 1999 Compared With First Six Months 1998 Total revenues increased to $155.8 million in the first six months of 1999 from $152.4 million in the first six months of 1998. Increases in revenues in the Inspection Equipment segment of $14.1 million and the Heart Assist Devices segment of $7.1 million were partially offset by decreases in revenues in the Power Equipment segment of $9.4 million and the Quality Assurance segment of $9.1 million. Revenues from the Inspection Equipment segment increased to $54.7 million in the first six months of 1999 from $40.6 million in the first six months of 1998. Revenues increased $15.9 million as a result of the acquisition of the product-monitoring businesses by Thermo Sentron in June 1998. This increase was offset in part by decreases of $1.2 million from existing businesses, primarily due to decreased demand in Europe, and $0.6 million due to the impact of a stronger U.S. dollar relative to currencies in foreign countries in which Thermo Sentron operates. Heart Assist Devices segment revenues increased to $39.7 million in the first six months of 1999 from $32.6 million in the first six months of 1998. Revenues from Thermo Cardiosystems' LVAS increased to $20.3 million in 1999 from $14.2 million in 1998, primarily due to the reasons discussed in the results of operations for the second quarter. Revenues from the Quality Assurance segment decreased to $38.6 million in the first six months of 1999 from $47.7 million in the first six months of 1998. Revenues from Thermedics Detection's industrial process instruments decreased $4.2 million, primarily due to lower revenues from ALEXUS and near-infrared analyzers, offset in part by an increase in EZ Flash product sales. Revenues from EGIS explosives-detection systems and related services decreased $2.7 million, primarily due to lower shipments of security systems. During the first quarter of 1998, Thermedics Detection completed shipments under a contract to provide security systems to the Federal Aviation Administration. Revenues under the contract totaled $1.1 million during the first six months of 1998. In addition, revenues from Thermedics Detection's laboratory products decreased $2.3 million, primarily due to lower worldwide demand for its products and, to a lesser extent, the expiration of two private label agreements. Revenues from the Power Equipment segment decreased to $12.8 million in the first six months of 1999 from $22.2 million in the first six months of 1998, primarily due to lower sales of ESD test equipment to the semiconductor industry and lower demand for certain lower-margin products in Europe. The decrease in revenues was also due to the segment's sale of its Universal Voltronics division in November 1998, which contributed $2.9 million in revenues in the 1998 period. The gross profit margin was 48% in the first six months of 1999, compared with 49% in the first six months of 1998. The gross profit margin at the Power Equipment segment decreased to 31% in 1999 from 45% in 1998, primarily due to inventory provisions of $0.9 million associated with exiting and reengineering certain product lines and, to a lesser extent, lower revenues. The gross profit margin in the Inspection Equipment segment decreased to 38% in 1999 from 39% in 1998, primarily due to the inclusion of lower-margin revenues from the acquired product-monitoring businesses. These decreases were offset in part by an increase in the gross profit margin at the Quality Assurance segment to 56% in 1999 from 54% in 1998, primarily due to a shift in sales mix to higher-margin products. Selling, general, and administrative expenses as a percentage of revenues were unchanged at 29% in the first six months of 1999 and 1998. Research and development expenses increased to $14.5 million in the first six months of 1999 from $12.8 million in the first six months of 1998, primarily due to the reasons discussed in the results of operations for the second quarter. 15 First Six Months 1999 Compared With First Six Months 1998 (continued) The Company recorded restructuring and other nonrecurring costs of $31.9 million in the first six months of 1999 (Note 8). The Company recorded $30.1 million of restructuring costs as discussed in the results of operations for the second quarter. The Company also recorded $1.8 million of nonrecurring costs in the first six months of 1999, primarily investment banking fees incurred in connection with the Company's proposed reorganization (Note 7). Interest income decreased to $5.5 million in the first six months of 1999 from $6.9 million in the first six months of 1998. Interest expense increased to $2.9 million in the first six months of 1999 from $2.4 million in the first six months of 1998. These changes were primarily due to the reasons discussed in the results of operations for the second quarter. The Company recorded income tax expense of $5.5 million in the first six months of 1998 on a pretax loss, primarily due to the effect of certain nondeductible restructuring costs, as well as the write-off of a $1.4 million tax asset (Note 8). The effective tax rate was 39% in the first six months of 1998. This rate exceeded the statutory federal income tax rate primarily due to the impact of state income taxes and nondeductible amortization of cost in excess of net assets of acquired companies. Minority interest expense decreased to $1.9 million in the first six months of 1999 from $3.4 million in the first six months of 1998, primarily due to the Company's increased ownership of Thermo Voltek and lower profits at certain of the Company's majority-owned subsidiaries. In the first six months of 1998, the Company and a majority-owned subsidiary recorded a gain of $4.6 million, net of related income taxes of $3.1 million, on the repurchase and exchange of subordinated convertible debentures. Liquidity and Capital Resources Consolidated working capital was $216.3 million at July 3, 1999, compared with $232.3 million at January 2, 1999. Cash, cash equivalents, and short- and long-term available-for-sale investments were $134.0 million at July 3, 1999, compared with $232.7 million at January 2, 1999. Substantially all of the $134.0 million balance at July 3, 1999, was held by the Company's majority-owned subsidiaries. In addition, at July 3, 1999, the Company had $75.1 million invested in an advance to affiliate. Of the $75.1 million balance, $61.2 million was advanced by the Company's majority-owned subsidiaries and the remainder by the Company and its wholly owned subsidiaries. Prior to the use of a new domestic cash management arrangement between the Company and Thermo Electron Corporation (Note 9), which became effective June 1, 1999, amounts invested with Thermo Electron were included in cash and cash equivalents. During the first six months of 1999, $9.6 million of cash was provided by operating activities. Cash provided by the Company's operations was offset in part by $3.5 million of cash used to fund a decrease in other current liabilities, primarily accrued payroll and other benefits, and $3.3 million of cash used to fund an increase in accounts receivable, primarily at the Heart Assist Devices segment due to higher revenues and at the Inspection Equipment segment due to delays in the pursuit of collections of accounts receivable at certain of Thermo Sentron's subsidiaries due principally to disruptions to collection activities caused by restructuring and integration of acquired businesses. Thermo Sentron has substantially completed these actions and expects to improve collections over the remainder of 1999. Excluding available-for-sale investments and advance to affiliate activity (Note 9), the Company's primary investing activity in the second quarter of 1999 was the acquisition, through a merger, of all of the outstanding shares of Thermo Voltek that the Company did not previously own, other than the shares owned by Thermo Electron, for approximately $20.5 million in cash (Note 6). The Company is currently a party to litigation in the Delaware State Chancery Court with respect to this transaction. The Company also expended $3.3 million for purchases of property, plant, and equipment during the first six months of 1999. During the remainder of 1999, the Company expects to make capital expenditures of approximately $6 million. 16 Liquidity and Capital Resources (continued) During the first six months of 1999, the Company's financing activities used cash of $10.5 million. Cash of $5.1 million was used to repay subordinated convertible debentures of Thermo Voltek. In addition, cash of $6.0 million was used to partially repay a short-term obligation to Thermo Electron. Thermo Cardiosystems expended $0.9 million to repurchase its common stock. These purchases were made pursuant to authorizations by Thermo Cardiosystems' Boards of Directors. As of July 3, 1999, $12.9 million remained under Thermo Cardiosystems' authorizations. Any such purchases are funded from working capital. The Company expects to continue to pursue its strategy of expanding its business both through the continued development, manufacture, and sale of new products, and through the possible acquisition of companies that will provide additional marketing or manufacturing capabilities and new products. In July 1999, the Company acquired all of the outstanding shares of Erich Jaeger, GmbH for approximately $42 million, including the repayment of debt (Note 10). Jaeger develops, manufactures, and markets equipment for lung-function, cardio-respiratory, and sleep-disorder diagnosis and monitoring. The Company financed this acquisition with $31.0 million of short-term borrowings from a wholly owned subsidiary of Thermo Electron and a third party. The borrowings from the third party are expected to be refinanced with the wholly owned subsidiary of Thermo Electron and will be due on demand and bear interest at a variable rate. The Company also expects to refinance $7.0 million of existing debt at Jaeger with additional borrowings from the wholly owned subsidiary of Thermo Electron under similar terms. In addition, Jaeger has other borrowings of $3.5 million, which the Company expects to repay upon maturity in May 2000. While the Company currently has no other definitive acquisition agreements, it expects that it would finance any acquisitions through internal funds or through borrowings from third parties or Thermo Electron, although it has no agreements that assure such funds will be available on acceptable terms or at all. The Company believes that its existing resources are sufficient to meet the capital requirements of its existing operations for the foreseeable future. Year 2000 The following constitutes a "Year 2000 Readiness Disclosure" under the Year 2000 Information and Readiness Disclosure Act. The Company continues to assess the potential impact of the year 2000 date recognition issue on the Company's internal business systems, products, and operations. The Company's year 2000 initiatives include (i) testing and upgrading significant information technology systems and facilities; (ii) testing and developing upgrades, if necessary, for the Company's current products and certain discontinued products; (iii) assessing the year 2000 readiness of key suppliers and vendors; and (iv) developing a contingency plan. The Company's State of Readiness The Company has implemented a compliance program to ensure that its critical information technology systems and non-information technology systems will be ready for the year 2000. The first phase of the program, testing and evaluating the Company's critical information technology systems and non-information technology systems for year 2000 compliance, has largely been completed. During phase one, the Company tested and evaluated its significant computer systems, software applications, and related equipment for year 2000 compliance. The Company also evaluated the potential year 2000 impact on its critical non-information technology systems, which efforts included testing the year 2000 readiness of its manufacturing, utility, and telecommunications systems at its critical facilities. The Company is currently in phase two of its program, during which any material noncompliant systems or non-information technology systems that were identified during phase one are prioritized and remediated. Based on its evaluation, the Company does not believe that any material upgrades to its critical non-information technology systems are required. The Company is currently upgrading or replacing such noncompliant information technology systems, and this process was approximately 90% complete as of July 3, 1999. In many cases, such upgrades or replacements are being made in the ordinary course of business, without accelerating previously scheduled upgrades or replacements. The Company expects that all of its material information technology systems and critical non-information technology systems will be year 2000 compliant by the end of 1999. 17 Year 2000 (continued) The Company has also implemented a compliance program to test and evaluate the year 2000 readiness of the material products that it currently manufactures and sells or for which the Company continues to provide technical support. The Company believes that all of such material products are year 2000 compliant. However, as many of the Company's products are complex, interact with or incorporate third-party products, and operate on computer systems that are not under the Company's control, there can be no assurance that the Company has identified all of the year 2000 problems with its current products. The Company believes that certain of its older products, which it no longer manufactures or sells, may not be year 2000 compliant. The Company is continuing to test and evaluate such products. The Company is focusing its efforts on products that are under warranty or early in their expected life and/or are subject to FDA considerations due to safety risks. The Company is offering upgrades and/or identifying potential solutions where reasonably practicable. The Company is in the process of identifying and assessing the year 2000 readiness of key suppliers and vendors that are believed to be significant to the Company's business operations. As part of this effort, the Company has developed and is distributing questionnaires relating to year 2000 compliance to its significant suppliers and vendors. To date, no significant supplier or vendor has indicated that it believes its business operations will be materially disrupted by the year 2000 issue. The Company has started to follow-up with and monitor the year 2000 compliance progress of significant suppliers and vendors that indicate that they are not year 2000 compliant or that do not respond to the Company's questionnaires. The Company has not completed its assessment of third-party risk, but expects to be substantially completed by the end of October 1999. Year 2000 Compliance Status ---------------------------------------------------------------------- Material Information Technology Systems and Facilities Approximately 90% completed Material Current Products Substantially completed Evaluation of Third-party Risk Approximately 70% completed Contingency Plan The Company is developing a contingency plan that will allow its primary business operations to continue despite disruptions due to year 2000 problems. This plan may include identifying and securing other suppliers, increasing inventories, and modifying production facilities and schedules. As the Company continues to evaluate the year 2000 readiness of its business systems and facilities, products, and significant suppliers and vendors, it will modify and adjust its contingency plan as may be required. The Company expects to complete its contingency plan in October 1999. Estimated Costs to Address the Company's Year 2000 Issues The Company had incurred expenses to third parties (external costs) related to year 2000 issues of approximately $1.0 million as of July 3, 1999, and the total external costs of year 2000 remediation are expected to be approximately $1.5 million. Year 2000 costs are funded from working capital. All internal costs and related external costs other than capital additions related to year 2000 remediation have been and will continue to be expensed as incurred. The Company does not track the internal costs incurred for its year 2000 compliance project. Such costs are principally the related payroll costs for its information systems group. 18 Year 2000 (continued) Reasonably Likely Worst Case Scenario The Company is not currently able to determine the most reasonably likely worst case scenario to result from the year 2000 issue. One possible worst case scenario would be that certain of the Company's material suppliers or vendors experience business disruptions due to the year 2000 issue and are unable to provide materials and services to the Company on time. The Company's operations could be delayed or temporarily shut down, and it could be unable to meet its obligations to customers in a timely fashion. The Company's business, operations, and financial condition could be adversely affected in amounts that cannot be reasonably estimated at this time. Risks of the Company's Year 2000 Issues While the Company is attempting to minimize any negative consequences arising from the year 2000 issue, there can be no assurance that year 2000 problems will not have a material adverse impact on the Company's business, operations, or financial condition. While the Company expects that upgrades to its internal business systems will be completed in a timely fashion, there can be no assurance that the Company will not encounter unexpected costs or delays. Despite its efforts to ensure that its material current products are year 2000 compliant, the Company may see an increase in warranty and other claims, especially those related to Company products that incorporate, or operate using, third-party software or hardware. In addition, certain of the Company's older products, which it no longer manufactures or sells, may not be year 2000 compliant, which may expose the Company to claims. If any of the Company's material suppliers or vendors experience business disruptions due to year 2000 issues, the Company might also be materially adversely affected. There is expected to be a significant amount of litigation relating to the year 2000 issue and there can be no assurance that the Company will not incur material costs in defending or bringing lawsuits. In addition, if any year 2000 issues are identified, there can be no assurance that the Company will be able to retain qualified personnel to remedy such issues. Any unexpected costs or delays arising from the year 2000 issue could have a significant adverse impact on the Company's business, operations, and financial condition, in amounts that cannot be reasonably estimated at this time. Item 3 - Quantitative and Qualitative Disclosure About Market Risk The Company's exposure to market risk from changes in foreign currency exchange rates, interest rates, and equity prices has not changed materially from its exposure at year-end 1998. PART II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders On May 27, 1999, at the Annual Meeting of Shareholders, the shareholders elected eight incumbent directors to a one-year term expiring in 2000. The Directors elected at the meeting were: Mr. T. Anthony Brooks, Mr. Peter O. Crisp, Mr. Paul F. Ferrari, Dr. George N. Hatsopoulos, Mr. John N. Hatsopoulos, Mr. John T. Keiser, Mr. John W. Wood, Jr. and Dr. Nicholas T. Zervas. Mr. Brooks received 35,591,253 shares voted in favor of his election and 327,472 shares voted against. Mr. Crisp received 35,592,011 shares voted in favor of his election and 326,714 shares voted against. Mr. Ferrari received 35,592,132 shares voted in favor of his election and 326,593 shares voted against. Dr. Hatsopoulos received 35,587,243 shares voted in favor of his election and 331,482 shares voted against. Mr. Hatsopoulos received 35,583,374 shares voted in favor of his election and 335,351 shares voted against. Mr. Keiser received 35,589,421 shares voted in favor of his election and 329,304 voted against. Mr. Wood received 35,594,458 shares voted in favor of his election and 324,267 shares voted against. Dr. Zervas received 35,592,516 shares voted in favor of his election and 326,209 shares voted against. No abstentions or broker nonvotes were recorded on the election of directors. 19 Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits See Exhibit Index on the page immediately preceding exhibits. (b) Reports on Form 8-K On May 25, 1999, the Company filed a Current Report on Form 8-K, dated May 24, 1999, with respect to restructuring and other charges of the Company. 20 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized as of the 10th day of August 1999. THERMEDICS INC. /s/ Paul F. Kelleher Paul F. Kelleher Chief Accounting Officer /s/ Theo Melas-Kyriazi Theo Melas-Kyriazi Chief Financial Officer 21 EXHIBIT INDEX Exhibit Number Description of Exhibit 10.1 Master Cash Management, Guarantee Reimbursement, and Loan Agreement dated as of June 1, 1999, between the Registrant and Thermo Electron Corporation. 10.2 Master Cash Management, Guarantee Reimbursement, and Loan Agreement dated as of June 1, 1999, between Thermo Cardiosystems Inc. and Thermo Electron Corporation (filed as Exhibit 10.1 to Thermo Cardiosystems Inc.'s Quarterly Report on Form 10-Q for the quarter ended July 3, 1999 [File No. 1-10114] and incorporated herein by reference). 10.3 Master Cash Management, Guarantee Reimbursement, and Loan Agreement dated as of June 1, 1999, between Thermedics Detection Inc. and Thermo Electron Corporation (filed as Exhibit 10.1 to Thermedics Detection Inc.'s Quarterly Report on Form 10-Q for the quarter ended July 3, 1999 [File No. 1-12745] and incorporated herein by reference). 10.4 Master Cash Management, Guarantee Reimbursement, and Loan Agreement dated as of June 1, 1999, between Thermo Sentron Inc. and Thermo Electron Corporation (filed as Exhibit 10.1 to Thermo Sentron Inc.'s Quarterly Report on Form 10-Q for the quarter ended July 3, 1999 [File No. 1-14254] and incorporated herein by reference). 10.5 Amended and Restated $13,000,000 Promissory Note dated as of June 30, 1999, issued by Thermo Sentron Inc. to Thermo Electron Corporation (filed as Exhibit 10.2 to Thermo Sentron Inc.'s Quarterly Report on Form 10-Q for the quarter ended July 3, 1999 [File No. 1-14254] and incorporated herein by reference). 10.6 Amended and Restated Nonqualified Stock Option Plan of the Registrant. 10.7 Amended and Restated Equity Incentive Plan of the Registrant. 10.8 Amended and Restated Directors Stock Option Plan of the Registrant. 10.9 Amended and Restated Deferred Compensation Plan for Directors of the Registrant. 10.10 Amended and Restated Thermedics Inc. - Thermo Cardiosystems Inc. Nonqualified Stock Option Plan. 10.11 Amended and Restated Thermedics Inc. - Thermedics Detection Inc. Nonqualified Stock Option Plan. 10.12 Amended and Restated Thermedics Inc. - Thermo Sentron Inc. Nonqualified Stock Option Plan. 10.13 Amended and Restated Thermedics Inc. - Thermo Voltek Corp. Nonqualified Stock Option Plan. 10.14 Amended and Restated By-Laws of the Registrant. 27 Financial Data Schedule.
EX-10.1 2 MASTER CASH MANAGEMENT, GUARANTEE REIMBURSEMENT AND LOAN AGREEMENT This AGREEMENT is entered into as of the 1st day of June, 1999 by and between Thermo Electron Corporation, a Delaware corporation ("Thermo Electron") and Thermedics Inc., a Massachusetts corporation (the "Subsidiary"). WITNESSETH: WHEREAS, Thermo Electron and the Subsidiary are party to a Master Repurchase Agreement, as amended and restated, which contains terms governing a cash management arrangement between them and a Master Guarantee Reimbursement and Loan Agreement, as amended and restated, which contains terms relating to intercompany credit support and a short term borrowing facility; WHEREAS, Thermo Electron and the Subsidiary desire to establish a new cash management arrangement and short term borrowing facility between them in lieu of the arrangements set forth in the Master Repurchase Agreement and the Master Guarantee Reimbursement and Loan Agreement and also to consolidate the terms relating to intercompany credit support in one agreement; WHEREAS, the Subsidiary and other majority owned subsidiaries of Thermo Electron that join in this Agreement (collectively, the "Majority-Owned Subsidiaries") and their wholly-owned subsidiaries wish to enter into various financial transactions, such as convertible or nonconvertible debt, loans, equity offerings, and other contractual arrangements with third parties (the "Underlying Obligations") and may provide credit support to, on behalf of or for the benefit of, other subsidiaries of Thermo Electron ("Credit Support Obligations"); WHEREAS, the Majority Owned Subsidiaries and Thermo Electron acknowledge that the Majority Owned Subsidiaries and their wholly-owned subsidiaries may be unable to enter into many kinds of Underlying Obligations without a guarantee of their performance thereunder from Thermo Electron (a "Parent Guarantee") or without obtaining Credit Support Obligations from other Majority Owned Subsidiaries; WHEREAS, certain Majority Owned Subsidiaries ("Second Tier Majority Owned Subsidiaries") may themselves be majority owned subsidiaries of other Majority Owned Subsidiaries ("First Tier Majority Owned Subsidiaries"); WHEREAS, for various reasons, Parent Guarantees of a Second Tier Majority Owned Subsidiary's Underlying Obligations may be demanded and given without the respective First Tier Majority Owned Subsidiary also issuing a guarantee of such Underlying Obligation; WHEREAS, Thermo Electron may itself make a loan or provide other credit to a Second Tier Majority Owned Subsidiary or its wholly-owned subsidiaries under circumstances where the applicable First Tier Majority Owned Subsidiary does not provide such credit; and WHEREAS, Thermo Electron is willing to consider continuing to issue Parent Guarantees and providing credit, and the Majority Owned Subsidiaries are willing to consider continuing to provide Credit Support Obligations, on the terms and conditions set forth below; NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties agree as follows: 1. Cash Management Arrangement. The Subsidiary directly, or through its wholly-owned U.S. subsidiaries, may, from time to time, lend its excess cash to Thermo Electron (a "Transaction"), on an unsecured basis, bearing interest at a rate equal to the 30-day Dealer Commercial Paper Rate as reported in the Wall Street Journal (the "DCP Rate") plus 50 basis points, which rate shall be adjusted on the second business day of each fiscal month of the Subsidiary and shall be in effect for the entirety of such fiscal month. The Subsidiary shall institute a Transaction by depositing its excess cash in the Subsidiary's concentration account at BankBoston Corporation ("BankBoston") or other bank designated by Thermo Electron. At the end of each business day, the cash balance deposited in the Subsidiary's concentration account shall be transferred to Thermo Electron's intercompany account at BankBoston or other bank designated by Thermo Electron. Thermo Electron shall indicate on its books the balance of the Subsidiary's cash held by Thermo Electron under this arrangement. After each fiscal month end, Thermo Electron shall provide the Subsidiary a report indicating the Subsidiary's aggregate cash balance ("Excess Cash") held by Thermo Electron hereunder. The Subsidiary shall have the right to withdraw all or part of its Excess Cash upon 30 days' prior notice to Thermo Electron. Within 30 days of receipt of such withdrawal notice, Thermo Electron shall transfer the portion of the Excess Cash requested for withdrawal to an account designated by the Subsidiary. Thermo Electron shall maintain, at all times, cash, cash equivalents and/or immediately available bank lines of credit equal to at least 50% of the cash balances of the Subsidiary and of all other participating subsidiaries of Thermo Electron, other than wholly-owned subsidiaries of Thermo Electron, held by Thermo Electron under this arrangement. Interest shall be payable on the Excess Cash by Thermo Electron to the Subsidiary each fiscal month in arrears. In addition, the Subsidiary's non-U.S. subsidiaries may, from time to time, lend or advance their excess cash to Thermo Electron, on an unsecured basis, bearing interest at rates set by Thermo Electron at the beginning of each month, based to the extent practicable on comparable interest rates generally available in the local jurisdiction of such participating non-U.S. subsidiary. Further, Thermo Electron and such non-U.S. subsidiaries participating in the cash management arrangement with Thermo Electron shall establish mutually agreeable procedures governing such cash management arrangement. 2. Loans and Advances. Upon request from the Subsidiary, Thermo Electron may make loans and advances to the Subsidiary on a short-term, revolving credit basis, from time to time, in such amounts as mutually determined by Thermo Electron and the Subsidiary. The aggregate principal amount of such loans and advances shall be reflected on the books and records of the Subsidiary and Thermo Electron. All such loans and advances shall be on an unsecured basis unless specifically provided otherwise in separate loan documents executed at that time. The Subsidiary shall pay interest on the aggregate unpaid principal amount of such loans from time to time outstanding at a rate equal to the DCP Rate plus one hundred fifty (150) basis points, which rate shall be adjusted on the second business day of each fiscal month of the Subsidiary and shall be in effect for the entirety of such fiscal month. If, however, one or more of the Subsidiary's majority-owned U.S. subsidiaries (i.e., not wholly-owned) is also participating in the cash management arrangement with Thermo Electron, then the rate payable on the Subsidiary's outstanding principal balance shall be calculated as follows: If the aggregate amount of the Subsidiary's majority-owned U.S. subsidiaries' cash balances under the cash management arrangement ("Majority-Owned Excess Cash") equals or exceeds the Subsidiary's outstanding principal balance, then the Subsidiary shall pay interest on the aggregate unpaid principal amount of such loans at a rate per annum equal to the DCP Rate plus fifty (50) basis points. If the aggregate amount of the Majority-Owned Excess Cash is less than the Subsidiary's outstanding principal balance, then (A) the Subsidiary shall pay interest at a rate per annum equal to the DCP Rate plus fifty (50) basis points on that portion of the unpaid principal amount equal to the Majority-Owned Excess Cash, and (B) the Subsidiary shall pay interest at a rate per annum equal to the DCP Rate plus one hundred fifty (150) basis points on that portion of the unpaid principal amount equal to (i) the Subsidiary's outstanding principal balance, minus (ii) the Majority-Owned Excess Cash. The interest rates set forth in the prior two sentences shall be adjusted on the second business day of each fiscal month of the Subsidiary and shall be in effect for the entirety of such fiscal month. Interest shall be computed on a 360-day basis. Interest is payable each fiscal month in arrears. The aggregate principal amount outstanding shall be payable within 30 days of demand by Thermo Electron. Overdue principal and interest shall bear interest at a rate per annum equal to the rate of interest published from time to time in the Wall Street Journal as the "prime rate" plus one percent (1%). The principal and accrued interest may be paid by the Subsidiary at any time or from time to time, in whole or in part, without premium or penalty. All payments shall be applied first to accrued interest and then to principal. At the end of each business day, Thermo Electron shall apply the balance of the Subsidiary's Excess Cash held by Thermo Electron under the cash management arrangement toward the payment of any loans or advances to the Subsidiary. Principal and interest shall be payable in lawful money of the United States of America, in immediately available funds, at the principal office of Thermo Electron or at such other place as Thermo Electron may designate from time to time in writing to the Subsidiary. The unpaid principal amount of any such borrowings, and accrued interest thereon, shall become immediately due and payable, without demand, upon occurrence of any of the following events: (a) the failure of the Subsidiary to pay any amount due hereunder within fifteen (15) days of the date when due; (b) the failure of the Subsidiary to pay its debts as they become due, the filing by or against the Subsidiary of any petition under the U.S. Bankruptcy Code (or the filing of any similar petition under the insolvency law of any jurisdiction), or the making by the Subsidiary of an assignment or trust mortgage for the benefit of creditors or the appointment of a receiver, custodian or similar agent with respect to, or the taking by any such person of possession of, any material property of the Subsidiary; (c) the sale by the Subsidiary of all or substantially all of its assets; (d) the merger or consolidation of the Subsidiary with or into any other corporation in a transaction in which the Subsidiary is not the surviving entity; (e) the issuance of any writ of attachment, by trustee process or otherwise, or any restraining order or injunction against or affecting the person or property of the Subsidiary that is not removed, repealed or dismissed within thirty (30) days of issuance and as a result has a material adverse effect on the business, operations, assets or condition, financial or otherwise, of the Subsidiary or its ability to discharge any of its liabilities or obligations to Thermo Electron; and (f) the suspension of the transaction of the usual business of the Subsidiary. 3. Guarantee Arrangements. (a) If Thermo Electron provides a Parent Guarantee of an Underlying Obligation, and the beneficiary(ies) of the Parent Guarantee enforce the Parent Guarantee, or Thermo Electron performs under the Parent Guarantee for any other reason, then the Majority Owned Subsidiary that is obligated, either directly or indirectly through a wholly-owned subsidiary, under such Underlying Obligation shall indemnify and save harmless Thermo Electron from any liability, cost, expense or damage (including reasonable attorneys' fees) suffered by Thermo Electron as a result of the Parent Guarantee. If the Underlying Obligation is issued by a Second Tier Majority Owned Subsidiary or a wholly-owned subsidiary thereof, and such Second Tier Majority Owned Subsidiary is unable to fully indemnify Thermo Electron (because of the poor financial condition of such Second Tier Majority Owned Subsidiary, or for any other reason), then the First Tier Majority Owned Subsidiary that owns the majority of the stock of such Second Tier Majority Owned Subsidiary shall indemnify and save harmless Thermo Electron from any remaining liability, cost, expense or damage (including reasonable attorneys' fees) suffered by Thermo Electron as a result of the Parent Guarantee. If a Majority Owned Subsidiary or a wholly-owned subsidiary thereof provides a Credit Support Obligation for any subsidiary of Thermo Electron, other than a subsidiary of such Majority Owned Subsidiary, and the beneficiary(ies) of the Credit Support Obligation enforce the Credit Support Obligation, or the Majority Owned Subsidiary or its wholly-owned subsidiary performs under the Credit Support Obligation for any other reason, then Thermo Electron shall indemnify and save harmless the Majority Owned Subsidiary or its wholly-owned subsidiary, as applicable, from any liability, cost, expense or damage (including reasonable attorneys' fees) suffered by the Majority Owned Subsidiary or its wholly-owned subsidiary, as applicable, as a result of the Credit Support Obligation. Without limiting the foregoing, Credit Support Obligations include the deposit of funds by a Majority Owned Subsidiary or a wholly-owned subsidiary thereof in a credit arrangement with a banking facility whereby such funds are available to the banking facility as collateral for overdraft obligations of other Majority Owned Subsidiaries or their subsidiaries also participating in the credit arrangement with such banking facility. Nothwithstanding the foregoing, in order to obtain the benefits of the indemnification obligations of the First Tier Majority Owned Subsidiary set forth above in this Section 3(a), Thermo Electron must have notified the First Tier Majority Owned Subsidiary prior to guaranteeing the obligations of the Second Tier Majority Owned Subsidiary. If after five (5) business days, Thermo Electron has not received from the First Tier Majority Owned Subsidiary a notice of objection stating that the First Tier Majority Owned Subsidiary objects to Thermo Electron guaranteeing the obligations of the Second Tier Majority Owned Subsidiary, then Thermo Electron may proceed to issue its guarantee of the Underlying Obligation and such guarantee shall be subject to the benefits of the indemnification obligations of the First Tier Majority Owned Subsidiary set forth above in this Section 3(a). If Thermo Electron does receive such notice of objection, then Thermo Electron's guarantee shall not be subject to the indemnification obligations of the First Tier Majority Owned Subsidiary set forth above in this Section 3(a). (b) For purposes of this Agreement, the term "guarantee" shall include not only a formal guarantee of an obligation, but also any other arrangement where Thermo Electron is liable for the obligations of a Majority Owned Subsidiary or its wholly-owned subsidiaries. Such other arrangements include (a) representations, warranties and/or covenants or other obligations joined in by Thermo Electron, whether on a joint or joint and several basis, for the benefit of the Majority Owned Subsidiary or its wholly-owned subsidiaries and (b) responsibility of Thermo Electron by operation of law for the acts and omissions of the Majority Owned Subsidiary or its wholly-owned subsidiaries, including controlling person liability under securities and other laws. (c) Promptly after Thermo Electron receives notice that a beneficiary of a Parent Guarantee is seeking to enforce such Parent Guarantee, Thermo Electron shall notify the Majority Owned Subsidiary(s) obligated, either directly or indirectly through a wholly-owned subsidiary, under the relevant Underlying Obligation. Such Majority Owned Subsidiary(s) or wholly-owned subsidiary thereof, as applicable, shall have the right, at its own expense, to contest the claim of such beneficiary. If a Majority Owned Subsidiary or wholly-owned subsidiary thereof, as applicable, is contesting the claim of such beneficiary, Thermo Electron will not perform under the relevant Parent Guarantee unless and until, in Thermo Electron's reasonable judgment, Thermo Electron is obligated under the terms of such Parent Guarantee to perform. Subject to the foregoing, any dispute between a Majority Owned Subsidiary or wholly-owned subsidiary thereof, as applicable, and a beneficiary of a Parent Guarantee shall not affect such Majority Owned Subsidiary's obligation to promptly indemnify Thermo Electron hereunder. Promptly after a Majority Owned Subsidiary or wholly-owned subsidiary thereof, as applicable, receives notice that a beneficiary of a Credit Support Obligation is seeking to enforce such Credit Support Obligation, the Majority Owned Subsidiary shall notify Thermo Electron. Thermo Electron shall have the right, at its own expense, to contest the claim of such beneficiary. If Thermo Electron or the subsidiary of Thermo Electron on whose behalf the Credit Support Obligation is given is contesting the claim of such beneficiary, the Majority Owned Subsidiary or wholly-owned subsidiary thereof, as applicable, will not perform under the relevant Credit Support Obligation unless and until, in the Majority Owned Subsidiary's reasonable judgment, the Majority Owned Subsidiary or wholly-owned subsidiary thereof, as applicable, is obligated under the terms of such Credit Support Obligation to perform. Subject to the foregoing, any dispute between Thermo Electron or the subsidiary of Thermo Electron on whose behalf the Credit Support Obligation was given, on the one hand, and a beneficiary of a Credit Support Obligation, on the other, shall not affect Thermo Electron's obligation to promptly indemnify the Majority Owned Subsidiary or its wholly-owned subsidiary, as applicable, hereunder. (d) If Thermo Electron makes a loan or provides other credit ("Credit Extension") to a Second Tier Majority Owned Subsidiary, the First Tier Majority Owned Subsidiary that owns the majority of the stock of such Second Tier Majority Owned Subsidiary hereby guarantees the Second Tier Majority Owned Subsidiary's obligations to Thermo Electron thereunder. Such guaranty shall be enforced only after Thermo Electron, in its reasonable judgment, determines that the Second Tier Majority Owned Subsidiary is unable to fully perform its obligations under the Credit Extension. If Thermo Electron provides Credit Extension to a wholly-owned subsidiary of a Second Tier Majority Owned Subsidiary, the Second Tier Majority Owned Subsidiary hereby guarantees it wholly-owned subsidiary's obligations to Thermo Electron thereunder and the First Tier Majority Owned Subsidiary that owns the majority of the stock of such Second Tier Majority Owned Subsidiary hereby guarantees the Second Tier Majority Owned Subsidiary's obligations to Thermo Electron hereunder. Such guaranty by the First Tier Majority Owned Subsidiary shall be enforced only after Thermo Electron, in its reasonable judgment, determines that the Second Tier Majority Owned Subsidiary is unable to fully perform its guaranty obligation hereunder. Notwithstanding the foregoing, in order for a Credit Extension to be deemed guaranteed by the First Tier Majority Owned Subsidiary as set forth above in this Section 3(d), Thermo Electron must have notified the First Tier Majority Owned Subsidiary prior to providing the Credit Extension to the Second Tier Majority Owned Subsidiary. If after five (5) business days, Thermo Electron has not received from the First Tier Majority Owned Subsidiary a notice of objection stating that the First Tier Majority Owned Subsidiary objects to Thermo Electron providing a Credit Extension to the Second Tier Majority Owned Subsidiary, then Thermo Electron may proceed to issue the Credit Extension to the Second Tier Majority Owned Subsidiary and the First Tier Majority Owned Subsidiary shall be deemed to have guaranteed such Credit Extension as set forth above in this Section 3(d). If Thermo Electron does receive such notice of objection, then Thermo Electron's Credit Extension shall not be deemed guaranteed by the First Tier Majority Owned Subsidiary as set forth in this Section 3(d). (e) All payments required to be made under this Section 3 by a Majority Owned Subsidiary or its wholly-owned subsidiaries, as applicable, shall be made within two days after receipt of notice from Thermo Electron. All payments required to be made under this Section 3 by Thermo Electron shall be made within two days after receipt of notice from the Majority Owned Subsidiary. 4. Waivers. No delay or omission on the part of either party in exercising any right hereunder shall operate as a waiver of such right or of any other right of the party, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion. The Subsidiary hereby waives demand, notice of prepayment, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of the Subsidiary's obligations hereunder. The Subsidiary hereby assents to any indulgence and any extension of time for payment of any indebtedness hereunder granted or permitted by the party. 5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts made and performed therein without giving effect to any choice of law provision or rule that would cause the application of laws of any jurisdiction other than the Commonwealth of Massachusetts. 6. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. 7. Non-assignability. The rights and obligations of the parties under this Agreement shall not be assigned by either party without the prior written consent of the other party. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. 8. Other Agreements. The parties agree that, effective as of the date hereof, each of the Master Repurchase Agreement, as amended and restated, between the Subsidiary and Thermo Electron and the Master Guarantee Reimbursement and Loan Agreement, as amended and restated, between the Subsidiary and Thermo Electron, is hereby terminated and is of no further force and effect. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date first above written. THERMO ELECTRON CORPORATION By: _____________________________ /s/ Theo Melas-Kyriazi Title: Vice President & Chief Financial Officer THERMEDICS INC. By: _____________________________ /s/ John T. Keiser Title: President and Chief Executive Officer EX-10.6 3 THERMEDICS INC. NONQUALIFIED STOCK OPTION PLAN As amended and restated effective as of June 24, 1999 1. Purpose This Nonqualified Stock Option Plan (the "Plan") is intended to encourage ownership of Common Stock (the "Common Stock"), of Thermedics Inc. ("Company"), by persons selected by the Board of Directors (or a committee thereof) in its sole discretion, including directors, executive officers, key employees and consultants of the Company and its subsidiaries, and to provide additional incentive for them to promote the success of the business of the Company. The Plan is intended to be a nonstatutory stock option plan. 2. Effective Date of the Plan The Plan shall become effective when adopted by the Board of Directors of the Company. 3. Stock Subject to Plan Subject to adjustment as provided in Section 11, the total number of shares of Common Stock reserved and available for issuance under the Plan and the Company's Incentive Stock Option Plan in the aggregate shall be 147,349 shares as of the date of this amendment and restatement. Shares to be issued upon the exercise of options granted under the Plan may be either authorized but unissued shares or shares held by the Company in its treasury. If any option expires or terminates for any reason without having been exercised in full, the unpurchased shares subject thereto shall be deducted from the number of shares reserved and available for issuance under the Plan. 4. Administration The Plan will be administered by the Board of Directors of the Company (the "Board"). Subject to the provisions of the Plan, the Board shall have complete authority, in its discretion, to make the following determinations with respect to each option to be granted by the Company: (a) the person to receive the option (the "Optionee"); (b) the time of granting the option; (c) the number of shares subject thereto; (d) the option price; (e) the option period; (f) the terms and conditions of options 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); (g) waive compliance by an optionee with any obligation to be performed by him or her under an option; (h) waive any term or condition of an option; (i) cancel an existing option in whole or in part with the consent of an Optionee; (j) grant replacement options; (k) accelerate the vesting or lapse of any restrictions of any option; and (l) adopt the form of instruments evidencing options under the Plan and change such forms from time to time. In making such determinations, the Board may take into account the nature of the services rendered by the Optionees, their present and potential contributions to the success of the Company and/or one or more of its subsidiaries, and such other factors as the Board in its discretion shall deem relevant. Subject to the provisions of the Plan, the Board shall also have complete authority to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to it, to determine the terms and provisions of the respective option agreements (which need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan. 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"). 5. Eligibility An option may be granted to any person selected by the Board in its sole discretion. 6. Time of Granting Options The granting of an option shall take place at the time specified by the Board. Only if expressly so provided by the Board shall the granting of an option be regarded as taking place at the time when a written option agreement shall have been duly executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. The agreement shall provide, among other things, that it does not confer upon an Optionee any right to continue in the employ of the Company and/or one or more of its subsidiaries or to continue as a director or consultant of the Company, and that it does not interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Optionee at any time if the Optionee is an employee, to remove the Optionee as a director of the Company if the Optionee is a director, or to terminate the services of the Optionee if the Optionee is a consultant. 7. Option Period An option may become exercisable immediately or in such installments, cumulative or noncumulative, as the Board may determine. 8. Exercise of Option An option may be exercised in accordance with its terms by written notice of intent to exercise the option, specifying the number of shares of stock with respect to which the option is then being exercised. The notice shall be accompanied by payment in the form of cash or shares of Common Stock (the "Tendered Shares") with a then current market value equal to the option price of the shares to be purchased; provided, however, that such Tendered Shares shall have been acquired by the Optionee more than six months prior to the date of exercise, unless such requirement is waived in writing by the Company. Against such payment the Company shall deliver or cause to be delivered to the Optionee a certificate for the number of shares then being purchased, registered in the name of the Optionee or other person exercising the option. If any law or applicable regulation of the Securities and Exchange Commission or other body having jurisdiction in the premises shall require the Company or the Optionee to take any action in connection with shares being purchased upon exercise of the option, exercise of the option and delivery of the certificate or certificates for such shares shall be postponed until completion of the necessary action, which shall be taken at the Company's expense. 9. Transferability Except as may be authorized by the Board, in its sole discretion, no Option may be transferred other than by will or the laws of descent and distribution, and during a Optionee's lifetime an option 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). The Board may, in its discretion, determine the extent to which options granted to an Optionee shall be transferable, and such provisions permitting or acknowledging transfer shall be set forth in the written agreement evidencing the option executed and delivered by or on behalf of the Company and the Optionee. 10. Vesting, Restrictions and Termination of Options The Board, in its sole discretion, may determine the manner in which options shall vest, the rights of the Company to repurchase the shares issued upon the exercise of any option and the manner in which such rights shall lapse, and the terms upon which any option granted shall terminate. The Board shall have the right to accelerate the date of exercise of any installment or to accelerate the lapse of the Company's repurchase rights. All of such terms shall be specified in a written option agreement executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. 11. Adjustments in the Event of Certain Transactions (a) In the event of a stock dividend, stock split or combination of shares, or other distribution with respect to holders of Common Stock 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 3 above, and (ii) appropriate adjustments to the number and kind of shares of stock or securities subject to Options then outstanding or subsequently granted, any exercise prices relating to Options and any other provisions of Awards affected by such change. (b) In the event of any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company or any similar transaction, as determined by the Board, the Board in its discretion may make appropriate adjustments to outstanding Options to avoid distortion in the operation of the Plan. 12. Change in Control 12.1 Impact of Event In the event of a "Change in Control" as defined in Section 12.2, the following provisions shall apply, unless the agreement evidencing the Option otherwise provides (by specific explicit reference to Section 12.2 below). If a Change in Control occurs while any Options are outstanding, then, effective upon the Change in Control, (i) each outstanding stock option granted under the Plan that was not previously exercisable and vested shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company, (ii) each outstanding Option subject to restrictions and to the extent not fully vested, shall be deemed to be fully vested, free of restrictions and no longer subject to a right of repurchase by the Company, and (iii) 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 Option or in any other agreement between the Optionee and the Company or unless otherwise agreed by the Board. 12.2 Definition of "Change in Control" "Change in Control" means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of Thermo Electron Corporation ("Thermo Electron") if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of Thermo Electron (the "Outstanding TMO Common Stock") or (ii) the combined voting power of the then-outstanding securities of Thermo Electron entitled to vote generally in the election of directors (the "Outstanding TMO Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by Thermo Electron, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Thermo Electron or any corporation controlled by Thermo Electron, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Thermo Electron (the "Thermo Board") (or, if applicable, the Board of Directors of a successor corporation to Thermo Electron), where the term "Continuing Director" means at any date a member of the Thermo Board (i) who was a member of the Thermo Board as of July 1, 1999 or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Thermo Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Thermo Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Thermo Electron or a sale or other disposition of all or substantially all of the assets of Thermo Electron in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Thermo Electron or substantially all of Thermo Electron's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by Thermo Electron or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of Thermo Electron of a complete liquidation or dissolution of Thermo Electron. 13. Limitation of Rights in Option Stock The Optionees shall have no rights as stockholders in respect of shares as to which their options shall not have been exercised, certificates issued and delivered and payment as herein provided made in full, and shall have no rights with respect to such shares not expressly conferred by this Plan. 14. Stock Reserved The Company shall at all times during the term of the options reserve and keep available such number of shares of the Common Stock as will be sufficient to satisfy the requirements of this Plan and shall pay all other fees and expenses necessarily incurred by the Company in connection therewith. 15. Securities Laws Restrictions Each Optionee exercising an option, at the request of the Company, will be required to give a representation in form satisfactory to counsel for the Company that he will not transfer, sell or otherwise dispose of the shares received upon exercise of the option at any time purchased by him, upon exercise of any portion of the option, in a manner which would violate the Securities Act of 1933, as amended, and the regulations of the Securities and Exchange Commission thereunder and the Company may, if required or at its discretion, make a notation on any certificates issued upon exercise of options to the effect that such certificate may not be transferred except after receipt by the Company of an opinion of counsel satisfactory to it to the effect that such transfer will not violate such Act and such regulations. 16. Tax Withholding The Company shall have the right to deduct from payments of any kind otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of options under the Plan (the "withholding requirements"). The Board will have the right to require that the Optionee 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 pursuant to exercise of an option. If and to the extent that such withholding is required, the Board may permit the Optionee 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 requirements. 17. 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 17, the Board may at any time or times amend the Plan or any outstanding Option 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 Options. No amendment of the Plan or any agreement evidencing Options under the Plan may adversely affect the rights of any participant under any Option previously granted without such participant's consent. EX-10.7 4 THERMEDICS INC. EQUITY INCENTIVE PLAN As amended and restated effective as of June 24, 1999 1. Purpose The purpose of this Equity Incentive Plan (the "Plan") is to secure for Thermedics Inc. (the "Company") and its Stockholders the benefits arising from capital stock ownership by employees 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"). 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 Common Stock reserved and available for distribution under the Plan shall be 1,500,000 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 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 750,000 shares of Common Stock. 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 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 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 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) 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 (by specific explicit reference to Section 9.2 below). If a Change in Control occurs while any Awards are outstanding, then, effective upon the Change in Control, (i) each outstanding stock option or other stock-based Award awarded under the Plan that was not previously exercisable and vested shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company, (ii) each outstanding restricted stock award or other stock-based Award subject to restrictions and to the extent not fully vested, shall be deemed to be fully vested, free of restrictions and no longer subject to a right of repurchase by the Company, and (iii) 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 Award 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 an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of Thermo Electron Corporation ("Thermo Electron") if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of Thermo Electron (the "Outstanding TMO Common Stock") or (ii) the combined voting power of the then-outstanding securities of Thermo Electron entitled to vote generally in the election of directors (the "Outstanding TMO Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by Thermo Electron, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Thermo Electron or any corporation controlled by Thermo Electron, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Thermo Electron (the "Thermo Board") (or, if applicable, the Board of Directors of a successor corporation to Thermo Electron), where the term "Continuing Director" means at any date a member of the Thermo Board (i) who was a member of the Thermo Board as of July 1, 1999 or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Thermo Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Thermo Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Thermo Electron or a sale or other disposition of all or substantially all of the assets of Thermo Electron in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Thermo Electron or substantially all of Thermo Electron's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by Thermo Electron or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of Thermo Electron of a complete liquidation or dissolution 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. 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. 10.5 Transferability of Awards Except as may be authorized by the Board, in its sole discretion, 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 will or the laws of descent and distribution, 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). The Board may, in its discretion, determine the extent to which Awards granted to a Participant shall be transferable, and such provisions permitting or acknowledging transfer shall be set forth in the written agreement evidencing the Award executed and delivered by or on behalf of the Company and the Participant. 10.6 Adjustments in the Event of Certain Transactions (a) In the event of a stock dividend, stock split or combination of shares, or other distribution with respect to holders of Common Stock 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) In the event of any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company or any similar transaction, as determined by the Board, the Board in its discretion may make appropriate adjustments to outstanding Awards to avoid distortion in the operation of the Plan. 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 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 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. EX-10.8 5 THERMEDICS INC. DIRECTORS STOCK OPTION PLAN As amended and restated effective as of May 25, 1999 1. Purpose The purpose of this Directors Stock Option Plan (the "Plan") of Thermedics Inc. (the "Company") is to encourage ownership in the Company by outside directors of the Company whose services are considered essential to the Company's growth and progress and to provide them with a further incentive to become directors and to continue as directors of the Company. The Plan is intended to be a nonstatutory stock option plan. 2. Administration The Board of Directors, or a Committee (the "Committee") consisting of one or more directors of the Company appointed by the Board of Directors, shall supervise and administer the Plan. Grants of stock options under the Plan and the amount and nature of the options to be granted shall be automatic in accordance with Section 5. However, all questions of interpretation of the Plan or of any stock options granted under it shall be determined by the Board of Directors or the Committee and such determination shall be final and binding upon all persons having an interest in the Plan. 3. Participation in the Plan Directors of the Company who are not employees of the Company or any subsidiary or parent of the Company shall be eligible to participate in the Plan. Directors who receive grants of stock options in accordance with this Plan are sometimes referred to herein as "Optionees." 4. Stock Subject to the Plan The maximum number of shares that may be issued under the Plan shall be 37,500 shares of the Company's Common Stock (the "Common Stock"), subject to adjustment as provided in Section 9. Shares to be issued upon the exercise of options granted under the Plan may be either authorized but unissued shares or shares held by the Company in its treasury. If any option expires or terminates for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for options thereafter to be granted. 5. Terms and Conditions A. Annual Stock Option Grants Each Director of the Company who meets the requirements of Section 3 and who is holding office immediately following the Annual Meeting of Stockholders commencing with the Annual Meeting of Stockholders held in calendar year 1995, shall be granted an option to purchase 1,000 shares of Common Stock at the close of business on the date of such Annual Meeting. B. General Terms and Conditions Applicable to All Grants. 1. Options shall be immediately exercisable at any time from and after the grant date and prior to the date which is the earliest of: (a) three years after the grant date for options granted under Section 5(A), (b) two years after the Optionee ceases to serve as a director of the Company, Thermo Electron or any subsidiary of Thermo Electron (one year in the event the Optionee ceases to meet the requirements of this Subsection by reason of his or her death), or (c) the date of dissolution or liquidation of the Company. 2. The exercise price at which Options are granted hereunder shall be the average of the closing prices reported by the national securities exchange on which the Common Stock is principally traded for the five trading days immediately preceding and including the date the option is granted or, if such security is not traded on an exchange, the average last reported sale price for the five-day period on the NASDAQ National Market List, or the average of the closing bid prices for the five-day period last quoted by an established quotation service for over-the-counter securities, or if none of the above shall apply, the last price paid for shares of the Common Stock by independent investors in a private placement. 3. All options shall be evidenced by a written agreement substantially in such form as shall be approved by the Board of Directors or Committee, containing terms and conditions consistent with the provisions of this Plan. 6. Exercise of Options A. Exercise/Consideration An option may be exercised in accordance with its terms by written notice of intent to exercise the option, specifying the number of shares of stock with respect to which the option is then being exercised. The notice shall be accompanied by payment in the form of cash or shares of Common Stock of the Company (the shares so tendered referred to herein as "Tendered Shares") with a then current market value equal to the exercise price of the shares to be purchased; provided, however, that such Tendered Shares shall have been acquired by the Optionee more than six months prior to the date of exercise (unless such requirement is waived in writing by the Company). Against such payment the Company shall deliver or cause to be delivered to the Optionee a certificate for the number of shares then being purchased, registered in the name of the Optionee or other person exercising the option. If any law or applicable regulation of the Securities and Exchange Commission or other body having jurisdiction in the premises shall require the Company or the Director to take any action in connection with shares being purchased upon exercise of the option, exercise of the option and delivery of the certificate or certificates for such shares shall be postponed until completion of the necessary action, which shall be taken at the Company's expense. B. Tax Withholding The Company shall have the right to deduct from payments of any kind otherwise due to the Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of options under the Plan. Subject to the prior approval of the Company, which may be withheld by the Company in its sole discretion, the Optionee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company to withhold shares of Common Stock otherwise issuable pursuant to the exercise of an option or (ii) by delivering to the Company shares of Common Stock already owned by the Optionee. The shares so delivered or withheld shall have a fair market value equal to such withholding obligation. The fair market value of the shares used to satisfy such withholding obligation shall be determined by the Company as of the date that the amount of tax to be withheld is to be determined. Notwithstanding the foregoing, no election to use shares for the payment of withholding taxes shall be effective unless made in compliance with any applicable requirements of Rule 16b-3. 7. Transferability Except as may be authorized by the Board, in its sole discretion, no Option may be transferred other than by will or the laws of descent and distribution, and during an Optionee's lifetime an Option 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). The Board may, in its discretion, determine the extent to which Options granted to an Optionee shall be transferable, and such provisions permitting or acknowledging transfer shall be set forth in the written agreement evidencing the Option executed and delivered by or on behalf of the Company and the Optionee. 8. Limitation of Rights to Continue as a Director Neither the Plan, nor the quantity of shares subject to options granted under the Plan, nor any other action taken pursuant to the Plan, shall constitute or be evidence of any agreement or understanding, express or implied, that the Company will retain a Director for any period of time, or at any particular rate of compensation. 9. Adjustments in the Event of Certain Transactions (a) In the event of a stock dividend, stock split or combination of shares, or other distribution with respect to holders of Common Stock 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 Options then outstanding or subsequently granted, any exercise prices relating to Options and any other provisions of Options affected by such change. (b) In the event of any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company or any similar transaction, as determined by the Board, the Board in its discretion may make appropriate adjustments to outstanding Options to avoid distortion in the operation of the Plan. 10. Limitation of Rights in Option Stock The Optionees shall have no rights as stockholders in respect of shares as to which their options shall not have been exercised, certificates issued and delivered and payment as herein provided made in full, and shall have no rights with respect to such shares not expressly conferred by this Plan or the written agreement evidencing options granted hereunder. 11. Stock Reserved The Company shall at all times during the term of the options reserve and keep available such number of shares of the Common Stock as will be sufficient to permit the exercise in full of all options granted under this Plan and shall pay all other fees and expenses necessarily incurred by the Company in connection therewith. 12. Securities Laws Restrictions A. Investment Representations. The Company may require any person to whom an option is granted, as a condition of exercising such option, to give written assurances in substance and form satisfactory to the Company to the effect that such person is acquiring the Common Stock subject to the option for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws. B. Compliance with Securities Laws. Each option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the shares subject to such option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of shares thereunder, such option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, or satisfaction of such condition shall have been effected or obtained on conditions acceptable to the Board of Directors. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification, or to satisfy such condition. 13. Change in Control A. Impact of Event In the event of a "Change in Control" as defined in Section 13(A), the following provisions shall apply, unless the agreement evidencing the Award otherwise provides (by specific explicit reference to Section 13(B) below). If a Change in Control occurs while any Options are outstanding, then, effective upon the Change in Control, each outstanding Option under the Plan that was not previously exercisable and vested shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company. B. Definition of "Change in Control" "Change in Control" means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of Thermo Electron Corporation ("Thermo Electron") if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of Thermo Electron (the "Outstanding TMO Common Stock") or (ii) the combined voting power of the then-outstanding securities of Thermo Electron entitled to vote generally in the election of directors (the "Outstanding TMO Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by Thermo Electron, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Thermo Electron or any corporation controlled by Thermo Electron, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Thermo Electron (the "Thermo Board") (or, if applicable, the Board of Directors of a successor corporation to Thermo Electron), where the term "Continuing Director" means at any date a member of the Thermo Board (i) who was a member of the Thermo Board as of July 1, 1999 or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Thermo Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Thermo Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Thermo Electron or a sale or other disposition of all or substantially all of the assets of Thermo Electron in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Thermo Electron or substantially all of Thermo Electron's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by Thermo Electron or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of Thermo Electron of a complete liquidation or dissolution of Thermo Electron. 14. Amendment of the Plan The provisions of Sections 3 and 5 of the Plan shall not be amended more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, or the rules thereunder. Subject to the foregoing, the Board of Directors may at any time, and from time to time, modify or amend the Plan in any respect, except that if at any time the approval of the Stockholders of the Company is required as to such modification or amendment under Rule 16b-3, the Board of Directors may not effect such modification or amendment without such approval. The termination or any modification or amendment of the Plan shall not, without the consent of an Optionee, affect his or her rights under an option previously granted to him or her. With the consent of the Optionees affected, the Board of Directors may amend outstanding option agreements in a manner not inconsistent with the Plan. The Board of Directors shall have the right to amend or modify the terms and provisions of the Plan and of any outstanding option to the extent necessary to ensure the qualification of the Plan under Rule 16b-3. 15. Effective Date of the Plan The Plan shall become effective when adopted by the Board of Directors, but no option granted under the Plan shall become exercisable until six months after the Plan is approved by the Stockholders of the Company. 16. Notice Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the Clerk of the Company and shall become effective when it is received. 17. Governing Law The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the Commonwealth of Massachusetts. EX-10.9 6 THERMEDICS INC. DEFERRED COMPENSATION PLAN FOR DIRECTORS As amended and restated as of June 24, 1999 Section 1. Participation. Any director of Thermedics 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 employee of the Company or any subsidiary or parent of the Company, 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 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 30,000 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. Adjustments in the Event of Certain Transactions. In the event of a stock dividend, stock split or combination of shares, or other distribution with respect to holders of Common Stock other than normal cash dividends, the number of units then credited to a partipant's stock unit account shall be appropriately adjusted on the same basis. In the event of any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company or any similar transaction, as determined by the Board, the Board in its discretion may terminate the Plan pursuant to Section 11. 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 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. (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 Clerk 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. 10. Change in Control 10.1 Impact of Event In the event of a "Change in Control" as defined in Section 10.2, the Plan shall terminate and full distribution shall be made from all participants' deferred compensation accounts and stock unit accounts effective upon the Change of Control. 10.2 Definition of "Change in Control" "Change in Control" means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of Thermo Electron Corporation ("Thermo Electron") if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of Thermo Electron (the "Outstanding TMO Common Stock") or (ii) the combined voting power of the then-outstanding securities of Thermo Electron entitled to vote generally in the election of directors (the "Outstanding TMO Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by Thermo Electron, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Thermo Electron or any corporation controlled by Thermo Electron, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Thermo Electron (the "Thermo Board") (or, if applicable, the Board of Directors of a successor corporation to Thermo Electron), where the term "Continuing Director" means at any date a member of the Thermo Board (i) who was a member of the Thermo Board as of July 1, 1999 or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Thermo Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Thermo Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Thermo Electron or a sale or other disposition of all or substantially all of the assets of Thermo Electron in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Thermo Electron or substantially all of Thermo Electron's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by Thermo Electron or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of Thermo Electron of a complete liquidation or dissolution of Thermo Electron. Section 11. Amendment and Termination of the Plan. The Board of Directors of the Company may amend or terminate the Plan at any time and from time to time, provided, however, that no amendment adversely 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. Upon termination of the Plan, the Company shall be obligated to distribute to the participant either of the following as the Board of Directors of the Company, in its sole discretion, may determine: (i) the number of shares of the common stock of the Company which shall equal the total number of units accumulated in the participant's stock unit account as of the effective date of termination of the Plan or (ii) a sum in cash equal to the balance credited to the participant's deferred compensation account as of the effective date of termination of the Plan. EX-10.10 7 THERMEDICS INC. THERMO CARDIOSYSTEMS INC. NONQUALIFIED STOCK OPTION PLAN As amended and restated effective as of June 24, 1999 1. Purpose This Nonqualified Stock Option Plan (the "Plan") is intended to encourage ownership of Common Stock (the "Common Stock"), of Thermo Cardiosystems Inc. ("Subsidiary"), a subsidiary of Thermedics Inc. (the "Company"), by persons selected by the Board of Directors (or a committee thereof) in its sole discretion, including directors, executive officers, key employees and consultants of the Company and its subsidiaries, and to provide additional incentive for them to promote the success of the business of the Company and Subsidiary. The Plan is intended to be a nonstatutory stock option plan. 2. Effective Date of the Plan The Plan shall become effective when adopted by the Board of Directors of the Company. 3. Stock Subject to Plan Subject to adjustment as provided in Section 11, the total number of shares of Common Stock reserved and available for issuance under the Plan and the Company's Incentive Stock Option Plan in the aggregate shall be 140,625 shares. Shares to be issued upon the exercise of options granted under the Plan shall be shares of Subsidiary beneficially owned by the Company. If any option expires or terminates for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for options thereafter to be granted. 4. Administration The Plan will be administered by the Board of Directors of the Company (the "Board"). Subject to the provisions of the Plan, the Board shall have complete authority, in its discretion, to make the following determinations with respect to each option to be granted by the Company: (a) the person to receive the option (the "Optionee"); (b) the time of granting the option; (c) the number of shares subject thereto; (d) the option price; (e) the option period; and (f) the terms and conditions of options 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); (g) waive compliance by an optionee with any obligation to be performed by him or her under an option; (h) waive any term or condition of an option; (i) cancel an existing option in whole or in part with the consent of an Optionee; (j) grant replacement options; (k) accelerate the vesting or lapse of any restrictions of any option; and (l) adopt the form of instruments evidencing options under the Plan and change such forms from time to time.. In making such determinations, the Board may take into account the nature of the services rendered by the Optionees, their present and potential contributions to the success of the Company and/or one or more of its subsidiaries, and such other factors as the Board in its discretion shall deem relevant. Subject to the provisions of the Plan, the Board shall also have complete authority to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to it, to determine the terms and provisions of the respective option agreements (which need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan. 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"). 5. Eligibility An option may be granted to any person selected by the Board in its sole discretion. 6. Time of Granting Options The granting of an option shall take place at the time specified by the Board. Only if expressly so provided by the Board shall the granting of an option be regarded as taking place at the time when a written option agreement shall have been duly executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. The agreement shall provide, among other things, that it does not confer upon an Optionee any right to continue in the employ of the Company and/or one or more of its subsidiaries or to continue as a director or consultant of the Company, and that it does not interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Optionee at any time if the Optionee is an employee, to remove the Optionee as a director of the Company if the Optionee is a director, or to terminate the services of the Optionee if the Optionee is a consultant. 7. Option Period An option may become exercisable immediately or in such installments, cumulative or noncumulative, as the Board may determine. 8. Exercise of Option An option may be exercised in accordance with its terms by written notice of intent to exercise the option, specifying the number of shares of stock with respect to which the option is then being exercised. The notice shall be accompanied by payment in the form of cash or shares of Subsidiary Common Stock (the "Tendered Shares") with a then current market value equal to the option price of the shares to be purchased; provided, however, that such Tendered Shares shall have been acquired by the Optionee more than six months prior to the date of exercise, unless such requirement is waived in writing by the Company. Against such payment the Company shall deliver or cause to be delivered to the Optionee a certificate for the number of shares then being purchased, registered in the name of the Optionee or other person exercising the option. If any law or applicable regulation of the Securities and Exchange Commission or other body having jurisdiction in the premises shall require the Company, Subsidiary or the Optionee to take any action in connection with shares being purchased upon exercise of the option, exercise of the option and delivery of the certificate or certificates for such shares shall be postponed until completion of the necessary action, which shall be taken at the Company's expense. 9. Transferability Except as may be authorized by the Board, in its sole discretion, no Option may be transferred other than by will or the laws of descent and distribution, and during a Optionee's lifetime an option 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). The Board may, in its discretion, determine the extent to which options granted to an Optionee shall be transferable, and such provisions permitting or acknowledging transfer shall be set forth in the written agreement evidencing the option executed and delivered by or on behalf of the Company and the Optionee. 10. Vesting, Restrictions and Termination of Options The Board, in its sole discretion, may determine the manner in which options shall vest, the rights of the Company to repurchase the shares issued upon the exercise of any option and the manner in which such rights shall lapse, and the terms upon which any option granted shall terminate. The Board shall have the right to accelerate the date of exercise of any installment or to accelerate the lapse of the Company's repurchase rights. All of such terms shall be specified in a written option agreement executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. 11. Adjustments in the Event of Certain Transactions (a) In the event of a stock dividend, stock split or combination of shares, or other distribution with respect to holders of Common Stock 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 3 above, and (ii) appropriate adjustments to the number and kind of shares of stock or securities subject to Options then outstanding or subsequently granted, any exercise prices relating to Options and any other provisions of Awards affected by such change. (b) In the event of any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company, any transaction which results in Thermo Electron Corporation ceasing to be the beneficial owner of a majority of the then-outstanding shares of Common Stock, or any similar transaction, as determined by the Board, the Board in its discretion may make appropriate adjustments to outstanding Options to avoid distortion in the operation of the Plan. 12. Change in Control 12.1 Impact of Event In the event of a "Change in Control" as defined in Section 12.2, the following provisions shall apply, unless the agreement evidencing the Option otherwise provides (by specific explicit reference to Section 12.2 below). If a Change in Control occurs while any Options are outstanding, then, effective upon the Change in Control, (i) each outstanding stock option granted under the Plan that was not previously exercisable and vested shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company, (ii) each outstanding Option subject to restrictions and to the extent not fully vested, shall be deemed to be fully vested, free of restrictions and no longer subject to a right of repurchase by the Company, and (iii) 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 Option or in any other agreement between the Optioneet and the Company or unless otherwise agreed by the Board. 12.2 Definition of "Change in Control" "Change in Control" means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of Thermo Electron Corporation ("Thermo Electron") if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of Thermo Electron (the "Outstanding TMO Common Stock") or (ii) the combined voting power of the then-outstanding securities of Thermo Electron entitled to vote generally in the election of directors (the "Outstanding TMO Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by Thermo Electron, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Thermo Electron or any corporation controlled by Thermo Electron, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Thermo Electron (the "Thermo Board") (or, if applicable, the Board of Directors of a successor corporation to Thermo Electron), where the term "Continuing Director" means at any date a member of the Thermo Board (i) who was a member of the Thermo Board as of July 1, 1999 or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Thermo Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Thermo Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Thermo Electron or a sale or other disposition of all or substantially all of the assets of Thermo Electron in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Thermo Electron or substantially all of Thermo Electron's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by Thermo Electron or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of Thermo Electron of a complete liquidation or dissolution of Thermo Electron. 13. Limitation of Rights in Option Stock The Optionees shall have no rights as stockholders in respect of shares as to which their options shall not have been exercised, certificates issued and delivered and payment as herein provided made in full, and shall have no rights with respect to such shares not expressly conferred by this Plan. 14. Stock Reserved The Company shall at all times during the term of the options reserve and keep available such number of shares of the Common Stock as will be sufficient to satisfy the requirements of this Plan and shall pay all other fees and expenses necessarily incurred by the Company in connection therewith. 15. Securities Laws Restrictions Each Optionee exercising an option, at the request of the Company, will be required to give a representation in form satisfactory to counsel for the Company that he will not transfer, sell or otherwise dispose of the shares received upon exercise of the option at any time purchased by him, upon exercise of any portion of the option, in a manner which would violate the Securities Act of 1933, as amended, and the regulations of the Securities and Exchange Commission thereunder and the Company may, if required or at its discretion, make a notation on any certificates issued upon exercise of options to the effect that such certificate may not be transferred except after receipt by the Company of an opinion of counsel satisfactory to it to the effect that such transfer will not violate such Act and such regulations. 16. Tax Withholding The Company shall have the right to deduct from payments of any kind otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of options under the Plan (the "withholding requirements"). The Board will have the right to require that the Optionee 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 pursuant to exercise of an option. If and to the extent that such withholding is required, the Board may permit the Optionee 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 requirements. 17. 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 17, the Board may at any time or times amend the Plan or any outstanding Option 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 Options. No amendment of the Plan or any agreement evidencing Options under the Plan may adversely affect the rights of any participant under any Option previously granted without such participant's consent. EX-10.11 8 THERMEDICS INC. THERMEDICS DETECTION INC. NONQUALIFIED STOCK OPTION PLAN As amended and restated effective as of June 24, 1999 1. Purpose This Nonqualified Stock Option Plan (the "Plan") is intended to encourage ownership of Common Stock (the "Common Stock"), of Thermedics Detection Inc. ("Subsidiary"), a subsidiary of Thermedics Inc. (the "Company"), by persons selected by the Board of Directors (or a committee thereof) in its sole discretion, including directors, executive officers, key employees and consultants of the Company and its subsidiaries, and to provide additional incentive for them to promote the success of the business of the Company and Subsidiary. The Plan is intended to be a nonstatutory stock option plan. 2. Effective Date of the Plan The Plan shall become effective when adopted by the Board of Directors of the Company. 3. Stock Subject to Plan Subject to adjustment as provided in Section 11, the total number of shares of Common Stock reserved and available for issuance under the Plan and the Company's Incentive Stock Option Plan in the aggregate shall be 333,333 shares. Shares to be issued upon the exercise of options granted under the Plan shall be shares of Subsidiary beneficially owned by the Company. If any option expires or terminates for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for options thereafter to be granted. 4. Administration The Plan will be administered by the Board of Directors of the Company (the "Board"). Subject to the provisions of the Plan, the Board shall have complete authority, in its discretion, to make the following determinations with respect to each option to be granted by the Company: (a) the person to receive the option (the "Optionee"); (b) the time of granting the option; (c) the number of shares subject thereto; (d) the option price; (e) the option period; and (f) the terms and conditions of options 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); (g) waive compliance by an optionee with any obligation to be performed by him or her under an option; (h) waive any term or condition of an option; (i) cancel an existing option in whole or in part with the consent of an Optionee; (j) grant replacement options; (k) accelerate the vesting or lapse of any restrictions of any option; and (l) adopt the form of instruments evidencing options under the Plan and change such forms from time to time.. In making such determinations, the Board may take into account the nature of the services rendered by the Optionees, their present and potential contributions to the success of the Company and/or one or more of its subsidiaries, and such other factors as the Board in its discretion shall deem relevant. Subject to the provisions of the Plan, the Board shall also have complete authority to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to it, to determine the terms and provisions of the respective option agreements (which need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan. 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"). 5. Eligibility An option may be granted to any person selected by the Board in its sole discretion. 6. Time of Granting Options The granting of an option shall take place at the time specified by the Board. Only if expressly so provided by the Board shall the granting of an option be regarded as taking place at the time when a written option agreement shall have been duly executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. The agreement shall provide, among other things, that it does not confer upon an Optionee any right to continue in the employ of the Company and/or one or more of its subsidiaries or to continue as a director or consultant of the Company, and that it does not interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Optionee at any time if the Optionee is an employee, to remove the Optionee as a director of the Company if the Optionee is a director, or to terminate the services of the Optionee if the Optionee is a consultant. 7. Option Period An option may become exercisable immediately or in such installments, cumulative or noncumulative, as the Board may determine. 8. Exercise of Option An option may be exercised in accordance with its terms by written notice of intent to exercise the option, specifying the number of shares of stock with respect to which the option is then being exercised. The notice shall be accompanied by payment in the form of cash or shares of Subsidiary Common Stock (the "Tendered Shares") with a then current market value equal to the option price of the shares to be purchased; provided, however, that such Tendered Shares shall have been acquired by the Optionee more than six months prior to the date of exercise, unless such requirement is waived in writing by the Company. Against such payment the Company shall deliver or cause to be delivered to the Optionee a certificate for the number of shares then being purchased, registered in the name of the Optionee or other person exercising the option. If any law or applicable regulation of the Securities and Exchange Commission or other body having jurisdiction in the premises shall require the Company, Subsidiary or the Optionee to take any action in connection with shares being purchased upon exercise of the option, exercise of the option and delivery of the certificate or certificates for such shares shall be postponed until completion of the necessary action, which shall be taken at the Company's expense. 9. Transferability Except as may be authorized by the Board, in its sole discretion, no Option may be transferred other than by will or the laws of descent and distribution, and during a Optionee's lifetime an option 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). The Board may, in its discretion, determine the extent to which options granted to an Optionee shall be transferable, and such provisions permitting or acknowledging transfer shall be set forth in the written agreement evidencing the option executed and delivered by or on behalf of the Company and the Optionee. 10. Vesting, Restrictions and Termination of Options The Board, in its sole discretion, may determine the manner in which options shall vest, the rights of the Company to repurchase the shares issued upon the exercise of any option and the manner in which such rights shall lapse, and the terms upon which any option granted shall terminate. The Board shall have the right to accelerate the date of exercise of any installment or to accelerate the lapse of the Company's repurchase rights. All of such terms shall be specified in a written option agreement executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. 11. Adjustments in the Event of Certain Transactions (a) In the event of a stock dividend, stock split or combination of shares, or other distribution with respect to holders of Common Stock 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 3 above, and (ii) appropriate adjustments to the number and kind of shares of stock or securities subject to Options then outstanding or subsequently granted, any exercise prices relating to Options and any other provisions of Awards affected by such change. (b) In the event of any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company, any transaction which results in Thermo Electron Corporation ceasing to be the beneficial owner of a majority of the then-outstanding shares of Common Stock, or any similar transaction, as determined by the Board, the Board in its discretion may make appropriate adjustments to outstanding Options to avoid distortion in the operation of the Plan. 12. Change in Control 12.1 Impact of Event In the event of a "Change in Control" as defined in Section 12.2, the following provisions shall apply, unless the agreement evidencing the Option otherwise provides (by specific explicit reference to Section 12.2 below). If a Change in Control occurs while any Options are outstanding, then, effective upon the Change in Control, (i) each outstanding stock option granted under the Plan that was not previously exercisable and vested shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company, (ii) each outstanding Option subject to restrictions and to the extent not fully vested, shall be deemed to be fully vested, free of restrictions and no longer subject to a right of repurchase by the Company, and (iii) 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 Option or in any other agreement between the Optioneet and the Company or unless otherwise agreed by the Board. 12.2 Definition of "Change in Control" "Change in Control" means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of Thermo Electron Corporation ("Thermo Electron") if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of Thermo Electron (the "Outstanding TMO Common Stock") or (ii) the combined voting power of the then-outstanding securities of Thermo Electron entitled to vote generally in the election of directors (the "Outstanding TMO Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by Thermo Electron, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Thermo Electron or any corporation controlled by Thermo Electron, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Thermo Electron (the "Thermo Board") (or, if applicable, the Board of Directors of a successor corporation to Thermo Electron), where the term "Continuing Director" means at any date a member of the Thermo Board (i) who was a member of the Thermo Board as of July 1, 1999 or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Thermo Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Thermo Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Thermo Electron or a sale or other disposition of all or substantially all of the assets of Thermo Electron in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Thermo Electron or substantially all of Thermo Electron's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by Thermo Electron or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of Thermo Electron of a complete liquidation or dissolution of Thermo Electron. 13. Limitation of Rights in Option Stock The Optionees shall have no rights as stockholders in respect of shares as to which their options shall not have been exercised, certificates issued and delivered and payment as herein provided made in full, and shall have no rights with respect to such shares not expressly conferred by this Plan. 14. Stock Reserved The Company shall at all times during the term of the options reserve and keep available such number of shares of the Common Stock as will be sufficient to satisfy the requirements of this Plan and shall pay all other fees and expenses necessarily incurred by the Company in connection therewith. 15. Securities Laws Restrictions Each Optionee exercising an option, at the request of the Company, will be required to give a representation in form satisfactory to counsel for the Company that he will not transfer, sell or otherwise dispose of the shares received upon exercise of the option at any time purchased by him, upon exercise of any portion of the option, in a manner which would violate the Securities Act of 1933, as amended, and the regulations of the Securities and Exchange Commission thereunder and the Company may, if required or at its discretion, make a notation on any certificates issued upon exercise of options to the effect that such certificate may not be transferred except after receipt by the Company of an opinion of counsel satisfactory to it to the effect that such transfer will not violate such Act and such regulations. 16. Tax Withholding The Company shall have the right to deduct from payments of any kind otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of options under the Plan (the "withholding requirements"). The Board will have the right to require that the Optionee 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 pursuant to exercise of an option. If and to the extent that such withholding is required, the Board may permit the Optionee 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 requirements. 17. 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 17, the Board may at any time or times amend the Plan or any outstanding Option 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 Options. No amendment of the Plan or any agreement evidencing Options under the Plan may adversely affect the rights of any participant under any Option previously granted without such participant's consent. EX-10.12 9 THERMEDICS INC. THERMO SENTRON INC. NONQUALIFIED STOCK OPTION PLAN As amended and restated effective as of June 24, 1999 1. Purpose This Nonqualified Stock Option Plan (the "Plan") is intended to encourage ownership of Common Stock (the "Common Stock"), of Thermo Sentron Inc. ("Subsidiary"), a subsidiary of Thermedics Inc. (the "Company"), by persons selected by the Board of Directors (or a committee thereof) in its sole discretion, including directors, executive officers, key employees and consultants of the Company and its subsidiaries, and to provide additional incentive for them to promote the success of the business of the Company and Subsidiary. The Plan is intended to be a nonstatutory stock option plan. 2. Effective Date of the Plan The Plan shall become effective when adopted by the Board of Directors of the Company. 3. Stock Subject to Plan Subject to adjustment as provided in Section 11, the total number of shares of Common Stock reserved and available for issuance under the Plan and the Company's Incentive Stock Option Plan in the aggregate shall be 100,000 shares. Shares to be issued upon the exercise of options granted under the Plan shall be shares of Subsidiary beneficially owned by the Company. If any option expires or terminates for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for options thereafter to be granted. 4. Administration The Plan will be administered by the Board of Directors of the Company (the "Board"). Subject to the provisions of the Plan, the Board shall have complete authority, in its discretion, to make the following determinations with respect to each option to be granted by the Company: (a) the person to receive the option (the "Optionee"); (b) the time of granting the option; (c) the number of shares subject thereto; (d) the option price; (e) the option period; and (f) the terms and conditions of options 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); (g) waive compliance by an optionee with any obligation to be performed by him or her under an option; (h) waive any term or condition of an option; (i) cancel an existing option in whole or in part with the consent of an Optionee; (j) grant replacement options; (k) accelerate the vesting or lapse of any restrictions of any option; and (l) adopt the form of instruments evidencing options under the Plan and change such forms from time to time.. In making such determinations, the Board may take into account the nature of the services rendered by the Optionees, their present and potential contributions to the success of the Company and/or one or more of its subsidiaries, and such other factors as the Board in its discretion shall deem relevant. Subject to the provisions of the Plan, the Board shall also have complete authority to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to it, to determine the terms and provisions of the respective option agreements (which need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan. 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"). 5. Eligibility An option may be granted to any person selected by the Board in its sole discretion. 6. Time of Granting Options The granting of an option shall take place at the time specified by the Board. Only if expressly so provided by the Board shall the granting of an option be regarded as taking place at the time when a written option agreement shall have been duly executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. The agreement shall provide, among other things, that it does not confer upon an Optionee any right to continue in the employ of the Company and/or one or more of its subsidiaries or to continue as a director or consultant of the Company, and that it does not interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Optionee at any time if the Optionee is an employee, to remove the Optionee as a director of the Company if the Optionee is a director, or to terminate the services of the Optionee if the Optionee is a consultant. 7. Option Period An option may become exercisable immediately or in such installments, cumulative or noncumulative, as the Board may determine. 8. Exercise of Option An option may be exercised in accordance with its terms by written notice of intent to exercise the option, specifying the number of shares of stock with respect to which the option is then being exercised. The notice shall be accompanied by payment in the form of cash or shares of Subsidiary Common Stock (the "Tendered Shares") with a then current market value equal to the option price of the shares to be purchased; provided, however, that such Tendered Shares shall have been acquired by the Optionee more than six months prior to the date of exercise, unless such requirement is waived in writing by the Company. Against such payment the Company shall deliver or cause to be delivered to the Optionee a certificate for the number of shares then being purchased, registered in the name of the Optionee or other person exercising the option. If any law or applicable regulation of the Securities and Exchange Commission or other body having jurisdiction in the premises shall require the Company, Subsidiary or the Optionee to take any action in connection with shares being purchased upon exercise of the option, exercise of the option and delivery of the certificate or certificates for such shares shall be postponed until completion of the necessary action, which shall be taken at the Company's expense. 9. Transferability Except as may be authorized by the Board, in its sole discretion, no Option may be transferred other than by will or the laws of descent and distribution, and during a Optionee's lifetime an option 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). The Board may, in its discretion, determine the extent to which options granted to an Optionee shall be transferable, and such provisions permitting or acknowledging transfer shall be set forth in the written agreement evidencing the option executed and delivered by or on behalf of the Company and the Optionee. 10. Vesting, Restrictions and Termination of Options The Board, in its sole discretion, may determine the manner in which options shall vest, the rights of the Company to repurchase the shares issued upon the exercise of any option and the manner in which such rights shall lapse, and the terms upon which any option granted shall terminate. The Board shall have the right to accelerate the date of exercise of any installment or to accelerate the lapse of the Company's repurchase rights. All of such terms shall be specified in a written option agreement executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. 11. Adjustments in the Event of Certain Transactions (a) In the event of a stock dividend, stock split or combination of shares, or other distribution with respect to holders of Common Stock 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 3 above, and (ii) appropriate adjustments to the number and kind of shares of stock or securities subject to Options then outstanding or subsequently granted, any exercise prices relating to Options and any other provisions of Awards affected by such change. (b) In the event of any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company, any transaction which results in Thermo Electron Corporation ceasing to be the beneficial owner of a majority of the then-outstanding shares of Common Stock, or any similar transaction, as determined by the Board, the Board in its discretion may make appropriate adjustments to outstanding Options to avoid distortion in the operation of the Plan. 12. Change in Control 12.1 Impact of Event In the event of a "Change in Control" as defined in Section 12.2, the following provisions shall apply, unless the agreement evidencing the Option otherwise provides (by specific explicit reference to Section 12.2 below). If a Change in Control occurs while any Options are outstanding, then, effective upon the Change in Control, (i) each outstanding stock option granted under the Plan that was not previously exercisable and vested shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company, (ii) each outstanding Option subject to restrictions and to the extent not fully vested, shall be deemed to be fully vested, free of restrictions and no longer subject to a right of repurchase by the Company, and (iii) 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 Option or in any other agreement between the Optioneet and the Company or unless otherwise agreed by the Board. 12.2 Definition of "Change in Control" "Change in Control" means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of Thermo Electron Corporation ("Thermo Electron") if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of Thermo Electron (the "Outstanding TMO Common Stock") or (ii) the combined voting power of the then-outstanding securities of Thermo Electron entitled to vote generally in the election of directors (the "Outstanding TMO Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by Thermo Electron, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Thermo Electron or any corporation controlled by Thermo Electron, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Thermo Electron (the "Thermo Board") (or, if applicable, the Board of Directors of a successor corporation to Thermo Electron), where the term "Continuing Director" means at any date a member of the Thermo Board (i) who was a member of the Thermo Board as of July 1, 1999 or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Thermo Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Thermo Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Thermo Electron or a sale or other disposition of all or substantially all of the assets of Thermo Electron in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Thermo Electron or substantially all of Thermo Electron's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by Thermo Electron or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of Thermo Electron of a complete liquidation or dissolution of Thermo Electron. 13. Limitation of Rights in Option Stock The Optionees shall have no rights as stockholders in respect of shares as to which their options shall not have been exercised, certificates issued and delivered and payment as herein provided made in full, and shall have no rights with respect to such shares not expressly conferred by this Plan. 14. Stock Reserved The Company shall at all times during the term of the options reserve and keep available such number of shares of the Common Stock as will be sufficient to satisfy the requirements of this Plan and shall pay all other fees and expenses necessarily incurred by the Company in connection therewith. 15. Securities Laws Restrictions Each Optionee exercising an option, at the request of the Company, will be required to give a representation in form satisfactory to counsel for the Company that he will not transfer, sell or otherwise dispose of the shares received upon exercise of the option at any time purchased by him, upon exercise of any portion of the option, in a manner which would violate the Securities Act of 1933, as amended, and the regulations of the Securities and Exchange Commission thereunder and the Company may, if required or at its discretion, make a notation on any certificates issued upon exercise of options to the effect that such certificate may not be transferred except after receipt by the Company of an opinion of counsel satisfactory to it to the effect that such transfer will not violate such Act and such regulations. 16. Tax Withholding The Company shall have the right to deduct from payments of any kind otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of options under the Plan (the "withholding requirements"). The Board will have the right to require that the Optionee 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 pursuant to exercise of an option. If and to the extent that such withholding is required, the Board may permit the Optionee 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 requirements. 17. 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 17, the Board may at any time or times amend the Plan or any outstanding Option 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 Options. No amendment of the Plan or any agreement evidencing Options under the Plan may adversely affect the rights of any participant under any Option previously granted without such participant's consent. EX-10.13 10 THERMEDICS INC. FORMER THERMO VOLTEK CORP. NONQUALIFIED STOCK OPTION PLAN As amended and restated effective as of June 24, 1999 1. Purpose This Nonqualified Stock Option Plan (the "Plan") was originally intended to encourage ownership of common stock of Thermo Voltek Corp. ("Subsidiary"), a subsidiary of Thermedics Inc. (the "Company"), by persons selected by the Board of Directors (or a committee thereof) in its sole discretion, including directors, executive officers, key employees and consultants of the Company and its subsidiaries, and to provide additional incentive for them to promote the success of the business of the Company and Subsidiary. The options outstanding under the Plan on the effective time of the merger of the Subsidiary with and into a wholly owned subsidiary of the Company (the "Merger") were assumed by the Company and converted pursuant to the Agreement and Plan of Merger into options to purchase shares of Common Stock of the Company ("Common Stock"). The Plan is intended to be a nonstatutory stock option plan. 2. Effective Date of the Plan The Plan shall become effective when adopted by the Board of Directors of the Company. 3. Stock Subject to Plan Subject to adjustment as provided in Section 11, the total number of shares of Common Stock reserved and available for issuance under the Plan shall be 5,000 shares as of the effective time of the Merger. Shares to be issued upon the exercise of options granted under the Plan may be either authorized but unissued shares or shares held by the Company in its treasury. If any option expires or terminates for any reason without having been exercised in full, the unpurchased shares subject thereto shall be deducted from the number of shares reserved and available for issuance under the Plan. 4. Administration The Plan will be administered by the Board of Directors of the Company (the "Board"). Subject to the provisions of the Plan, the Board shall have complete authority, in its discretion, to make the following determinations with respect to each option to be granted by the Company: (a) the person to receive the option (the "Optionee"); (b) the time of granting the option; (c) the number of shares subject thereto; (d) the option price; (e) the option period; and (f) the terms and conditions of options 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); (g) waive compliance by an optionee with any obligation to be performed by him or her under an option; (h) waive any term or condition of an option; (i) cancel an existing option in whole or in part with the consent of an Optionee; (j) grant replacement options; (k) accelerate the vesting or lapse of any restrictions of any option; and (l) adopt the form of instruments evidencing options under the Plan and change such forms from time to time.. In making such determinations, the Board may take into account the nature of the services rendered by the Optionees, their present and potential contributions to the success of the Company and/or one or more of its subsidiaries, and such other factors as the Board in its discretion shall deem relevant. Subject to the provisions of the Plan, the Board shall also have complete authority to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to it, to determine the terms and provisions of the respective option agreements (which need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan. 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"). 5. Eligibility An option may be granted to any person selected by the Board in its sole discretion. 6. Time of Granting Options The granting of an option shall take place at the time specified by the Board. Only if expressly so provided by the Board shall the granting of an option be regarded as taking place at the time when a written option agreement shall have been duly executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. The agreement shall provide, among other things, that it does not confer upon an Optionee any right to continue in the employ of the Company and/or one or more of its subsidiaries or to continue as a director or consultant of the Company, and that it does not interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Optionee at any time if the Optionee is an employee, to remove the Optionee as a director of the Company if the Optionee is a director, or to terminate the services of the Optionee if the Optionee is a consultant. 7. Option Period An option may become exercisable immediately or in such installments, cumulative or noncumulative, as the Board may determine. 8. Exercise of Option An option may be exercised in accordance with its terms by written notice of intent to exercise the option, specifying the number of shares of stock with respect to which the option is then being exercised. The notice shall be accompanied by payment in the form of cash or shares of Subsidiary Common Stock (the "Tendered Shares") with a then current market value equal to the option price of the shares to be purchased; provided, however, that such Tendered Shares shall have been acquired by the Optionee more than six months prior to the date of exercise, unless such requirement is waived in writing by the Company. Against such payment the Company shall deliver or cause to be delivered to the Optionee a certificate for the number of shares then being purchased, registered in the name of the Optionee or other person exercising the option. If any law or applicable regulation of the Securities and Exchange Commission or other body having jurisdiction in the premises shall require the Company, Subsidiary or the Optionee to take any action in connection with shares being purchased upon exercise of the option, exercise of the option and delivery of the certificate or certificates for such shares shall be postponed until completion of the necessary action, which shall be taken at the Company's expense. 9. Transferability Except as may be authorized by the Board, in its sole discretion, no Option may be transferred other than by will or the laws of descent and distribution, and during a Optionee's lifetime an option 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). The Board may, in its discretion, determine the extent to which options granted to an Optionee shall be transferable, and such provisions permitting or acknowledging transfer shall be set forth in the written agreement evidencing the option executed and delivered by or on behalf of the Company and the Optionee. 10. Vesting, Restrictions and Termination of Options The Board, in its sole discretion, may determine the manner in which options shall vest, the rights of the Company to repurchase the shares issued upon the exercise of any option and the manner in which such rights shall lapse, and the terms upon which any option granted shall terminate. The Board shall have the right to accelerate the date of exercise of any installment or to accelerate the lapse of the Company's repurchase rights. All of such terms shall be specified in a written option agreement executed and delivered by or on behalf of the Company and the Optionee to whom such option shall be granted. 11. Adjustments in the Event of Certain Transactions (a) In the event of a stock dividend, stock split or combination of shares, or other distribution with respect to holders of Common Stock 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 3 above, and (ii) appropriate adjustments to the number and kind of shares of stock or securities subject to Options then outstanding or subsequently granted, any exercise prices relating to Options and any other provisions of Awards affected by such change. (b) In the event of any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company, any transaction which results in Thermo Electron Corporation ceasing to be the beneficial owner of a majority of the then-outstanding shares of Common Stock, or any similar transaction, as determined by the Board, the Board in its discretion may make appropriate adjustments to outstanding Options to avoid distortion in the operation of the Plan. 12. Change in Control 12.1 Impact of Event In the event of a "Change in Control" as defined in Section 12.2, the following provisions shall apply, unless the agreement evidencing the Option otherwise provides (by specific explicit reference to Section 12.2 below). If a Change in Control occurs while any Options are outstanding, then, effective upon the Change in Control, (i) each outstanding stock option granted under the Plan that was not previously exercisable and vested shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company, (ii) each outstanding Option subject to restrictions and to the extent not fully vested, shall be deemed to be fully vested, free of restrictions and no longer subject to a right of repurchase by the Company, and (iii) 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 Option or in any other agreement between the Optioneet and the Company or unless otherwise agreed by the Board. 12.2 Definition of "Change in Control" "Change in Control" means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of Thermo Electron Corporation ("Thermo Electron") if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of Thermo Electron (the "Outstanding TMO Common Stock") or (ii) the combined voting power of the then-outstanding securities of Thermo Electron entitled to vote generally in the election of directors (the "Outstanding TMO Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by Thermo Electron, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Thermo Electron or any corporation controlled by Thermo Electron, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Thermo Electron (the "Thermo Board") (or, if applicable, the Board of Directors of a successor corporation to Thermo Electron), where the term "Continuing Director" means at any date a member of the Thermo Board (i) who was a member of the Thermo Board as of July 1, 1999 or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Thermo Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Thermo Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Thermo Electron or a sale or other disposition of all or substantially all of the assets of Thermo Electron in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Thermo Electron or substantially all of Thermo Electron's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by Thermo Electron or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of Thermo Electron of a complete liquidation or dissolution of Thermo Electron. 13. Limitation of Rights in Option Stock The Optionees shall have no rights as stockholders in respect of shares as to which their options shall not have been exercised, certificates issued and delivered and payment as herein provided made in full, and shall have no rights with respect to such shares not expressly conferred by this Plan. 14. Stock Reserved The Company shall at all times during the term of the options reserve and keep available such number of shares of the Common Stock as will be sufficient to satisfy the requirements of this Plan and shall pay all other fees and expenses necessarily incurred by the Company in connection therewith. 15. Securities Laws Restrictions Each Optionee exercising an option, at the request of the Company, will be required to give a representation in form satisfactory to counsel for the Company that he will not transfer, sell or otherwise dispose of the shares received upon exercise of the option at any time purchased by him, upon exercise of any portion of the option, in a manner which would violate the Securities Act of 1933, as amended, and the regulations of the Securities and Exchange Commission thereunder and the Company may, if required or at its discretion, make a notation on any certificates issued upon exercise of options to the effect that such certificate may not be transferred except after receipt by the Company of an opinion of counsel satisfactory to it to the effect that such transfer will not violate such Act and such regulations. 16. Tax Withholding The Company shall have the right to deduct from payments of any kind otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of options under the Plan (the "withholding requirements"). The Board will have the right to require that the Optionee 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 pursuant to exercise of an option. If and to the extent that such withholding is required, the Board may permit the Optionee 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 requirements. 17. 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 17, the Board may at any time or times amend the Plan or any outstanding Option 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 Options. No amendment of the Plan or any agreement evidencing Options under the Plan may adversely affect the rights of any participant under any Option previously granted without such participant's consent. EX-10.14 11
Amended and Restated as of June 24, 1999 THERMEDICS INC. BY-LAWS TABLE OF CONTENTS Title Page Article I - Stockholders 1 Section 1.1. Place of Meeting 1 Section 1.2. Annual Meetings 1 Section 1.3. Special Meetings 1 Section 1.4. Notice of Meetings 1 Section 1.5. Quorum 2 Section 1.6. Voting; Proxies 2 Section 1.7. Inspectors of Election 2 Section 1.8. Action Without Meeting 2 Article II - Directors 3 Section 2.1. Powers 3 Section 2.2. Number, Election and Term of Office 3 Section 2.3. Place of Meetings 3 Section 2.4. Annual Meetings 3 Section 2.5. Regular Meetings 3 Section 2.6. Special Meetings 3 Section 2.7. Notice of Meetings 3 Section 2.8. Quorum 4 Section 2.9. Voting 4 Section 2.10. Action Without Meeting 4 Section 2.11. Meetings by Telephone Conference Calls 4 Section 2.12. Resignations 4 Section 2.13. Removal 4 Section 2.14. Vacancies 4 Section 2.15. Compensation of Directors 5 Section 2.16. Committees 5 Title Page Section 2.17. Executive Committee 5 Section 2.18. Issuance of Stock 6 Article III - Officers 6 Section 3.1. Officers 6 Section 3.2. Election and Term of Office 6 Section 3.3. Chairman of the Board 6 Section 3.4. President 6 Section 3.5. Vice Presidents 7 Section 3.6. Chief Financial Officer 7 Section 3.7. Treasurer and Assistant Treasurer 7 Section 3.8. Clerk and Assistant Clerk 7 Section 3.9. Secretary and Assistant Secretary 8 Section 3.10. Resignation 8 Section 3.11. Removal 8 Section 3 12. Vacancies 8 Section 3.13. Subordinate Officers 8 Section 3.14. Compensation 8 Article IV - Stock 8 Section 4.1. Stock Certificates 8 Section 4.2. Transfer of Stock 9 Section 4.3. Fixing Date for Determination of Stockholders' Rights 9 Section 4.4. Lost, Mutilated or Destroyed Certificates 10 Article V - General Provisions 10 Section 5.1. Offices 10 Section 5.2. Seal 10 Section 5.3. Fiscal Year 10 Section 5.4. Execution of Instruments 10 Section 5.5. Corporate Records 10 Section 5.6. Voting of Securities owned by this Corporation 11 Section 5.7. Conflict of Interest 11 Section 5.8. Indemnification 12 Article VI - Amendments 14 Section 6.1. General 14 Section 6.2. Date of Annual Meeting of Stockholders 14 Article VII - Miscellaneous 15 Section 7.1 Massachusetts Control Share Acquisition Act 15
THERMEDICS INC. BY-LAWS ARTICLE I - STOCKHOLDERS Section 1.1. Place of Meeting. Meetings of stockholders shall be held at the principal office of the corporation or, to the extent permitted by the Articles of Organization, at such other place within the United States as the Board of Directors may from time to time designate. Section 1.2. Annual Meetings. The annual meetings of stockholders shall be held at such hour as may from time to time be designated by the Board of Directors, on the third Wednesday in May of each year or on such other date within six months after the end of the Corporation's fiscal year as may be fixed by the Board of Directors, for the purpose of electing a Board of Directors and transacting such other business as may properly be brought before such meeting. At the annual meeting any business may be transacted whether or not the notice of such meeting shall have contained a reference thereto, except where such a reference is required by law, the Articles of Organization or these By-Laws. If the annual meeting is not held on the date determined in accordance with this Section, a special meeting in lieu of the annual meeting may be held with all the force and effect of an annual meeting. Section 1.3. Special Meetings. Special meetings of stockholders may be called by the Chairman of the Board (if any), the President or the Board of Directors, and shall be called by the Clerk or, in case of death, absence, incapacity or refusal of the Clerk, by any other officer, upon written application of one or more stockholders who hold at least one tenth part in interest of the capital stock entitled to vote at the meeting. At any special meeting only business to which a reference shall have been contained in the notice of such meeting may be transacted. Section 1.4. Notice of Meetings. Written or printed notice of each meeting of stockholders, stating the place, date and hour and the purposes of the meeting shall be given by the Clerk or other officer calling the meeting at least ten days before the meeting to each stockholder entitled to vote at the meeting or entitled to such notice by leaving such notice with him at his residence or usual place of business or by mailing it, postage prepaid, and addressed to the stockholder at his address as it appears in the records of the corporation. A written waiver of notice executed before or after a meeting by a stockholder or his attorney thereunto authorized and filed with the records of the meeting, shall be deemed equivalent to such notice to such stockholder. Any person authorized to give notice of any such meeting may make affidavit of such notice, which, as to the facts therein stated, shall be conclusive. It shall be the duty of every stockholder to furnish to the Clerk of the corporation or to the transfer agent, if any, of the class of stock owned by him, his current post office address. Section 1.5. Quorum. At any meeting of stockholders the holders of a majority in interest of all capital stock entitled to vote at such meeting or, if two or more classes of stock are issued, outstanding and entitled to vote as separate classes, a majority in interest of each class, present in person or represented by proxy, shall constitute a quorum. The announcement of a quorum by the officer presiding at the meeting shall constitute a conclusive determination that a quorum is present. The absence of such an announcement shall have no significance. Shares of its own stock held by the corporation or held for its use and benefit shall not be counted in determining the total number of shares outstanding at any particular time. If a quorum is not present or represented, the stockholders present or represented and entitled to vote at such meeting, by a majority vote, may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice. At any adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted if the meeting had been held as originally called. The stockholders present at a duly organized meeting may continue to transact business until adjournment notwithstanding the withdrawal of one or more stockholders so as to leave less than a quorum. Section 1.6. Voting; Proxies. Except as otherwise provided by law or the Articles of Organization, at any meeting of stockholders each stockholder shall have one vote for each share of stock entitled to vote and registered in his name and a proportionate vote for a fractional share. Any stockholder may vote in person or by written proxy dated not more than six months prior to the meeting named therein and filed with the Clerk of the meeting, or of any adjournment thereof, before being voted. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by any one of them unless at or prior to exercise of the proxy the corporation receives a specific written notice to the contrary from any one of them, except as otherwise limited therein, a proxy shall entitle the person authorized thereby to vote at any adjournment of the meeting named therein but shall not be valid after final adjournment of such meeting. Voting on all matters, including the election of directors, shall be by voice vote unless voting by ballot is requested by any stockholder. Except as otherwise provided by law, the Articles of Organization, or these By-laws, at all meetings of stockholders all questions shall be determined by a vote of a majority of the shares voting, or, if two or more classes of stock are entitled to vote as separate classes, a vote of a majority of the shares voting of each class voting, present in person or represented by proxy. The corporation shall not, directly or indirectly, vote shares of its own stock. Section 1.7. Inspectors of Election. Two inspectors may be appointed by the Board of Directors before or at each meeting of stockholders, or, if no such appointment shall have been made, the presiding officer may make such appointment at the meeting. At the meeting for which they are appointed, such inspectors shall open and close the polls, receive and take charge of the proxies and ballots, and decide all questions touching on the qualifications of voters, the validity of proxies and the acceptance and rejection of votes. If any inspector previously appointed shall fail to attend or refuse or be unable to serve, the presiding officer shall appoint an inspector in his place. Section 1.8. Action Without Meeting. Any action which may be taken at any meeting of the stockholders may be taken without a meeting if all stockholders entitled to vote on the matter consent to the action in writing and the written consents are filed with the records of the meetings of stockholders. Such consents shall be treated for all purposes as a vote at a meeting. ARTICLE II - DIRECTORS Section 2.1. Powers. Except as otherwise provided by law, the Articles of Organization or these By-laws, the business of the corporation shall be managed by a Board of Directors who may exercise all the powers of the corporation. Section 2.2. Number, Election and Term of Office. The Board of Directors shall consist of not fewer than three (or not fewer than the number of stockholders, if fewer than three) nor more than eight directors. Within the limits specified, the number of directors shall be determined (a) by a vote of the stockholders at the annual meeting, or (b) by a vote of the stockholders at a special meeting called for the purpose by the Board of Directors, or (c) by vote of the Board of Directors. Except for the initial directors and except as provided in Section 2.14, the directors shall be elected at the annual meeting of the stockholders or at a special meeting. All directors shall hold office until the following annual meeting or special meeting in lieu of the annual meeting and until their successors are chosen and qualified. Section 2.3. Place of Meetings. Meetings of the Board of Directors may be held at any place within or without the Commonwealth of Massachusetts. Section 2.4. Annual Meetings. A meeting of the Board of Directors for the election of officers and the transaction of general business shall be held each year beginning in 1984, at the place of and immediately after the final adjournment of the annual meeting of stockholders or the special meeting in lieu of the annual meeting. No notice of such annual meeting need be given. Section 2.5. Regular Meetings. Regular meetings of the Board of Directors may be held, without notice, at such time and place as the Board of Directors may determine. Any director not present at the time of the determination shall be advised, in writing, of any such determination. Section 2.6. Special Meetings. Special meetings of the Board of Directors, including meetings in lieu of the annual or regular meetings, may be held upon notice at any time upon the call of the Chairman of the Board (if any) or President and shall be called by the Chairman of the Board, President or the Clerk or, in case of the death, absence, incapacity or refusal of the Clerk, by any other officer, upon written application, signed by any two directors, stating the purpose of the meeting. Section 2.7. Notice of Meetings. Wherever notice of any meetings of the Board of Directors is required by these By-laws or by vote of the Board of Directors, such notice shall state the place, date and hour of the meeting and shall be given to each director by the Chairman of the Board (if any), President, Clerk or other officer calling the meeting at least two days prior to such meeting if given in person by telephone or by telegram or at least four days prior to such meeting if given by mail. Notice shall be deemed to have been duly given, if by mail, by depositing the notice in the post office as a first class letter, postage prepaid, or, if by telegram, by completing and filing and notice on a telegraph blank and paying the requisite fee at any telegraph office, the letter or telegram being addressed to the director at his last known mailing address as it appears on the books of the corporation. No notice need be given to any director who waives such notice by a writing executed before or after the meeting and filed with the records of the meeting or by his attendance at the meeting without protesting at or before the commencement of the meeting the lack of notice to him. No notice of adjourned meetings of the Board of Directors need be given. Section 2.8. Quorum. At all meetings of the Board of Directors, a majority of the directors then in office shall constitute a quorum. If a quorum is not present, those present may adjourn the meeting from time to time until a quorum is obtained. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted if the meeting had been held as originally called. Section 2.9. Voting. At any meeting of the Board of Directors, the vote of a majority of those present shall decide any matter except as otherwise provided by law, the Articles of Organization or these By-laws. Section 2.10. Action Without Meeting. Any action which may be taken at any meeting of the Board of Directors may be taken without a meeting if all the directors consent to the action in writing and the written consents are filed with the records of the meetings of the Board of Directors. Such consents shall be treated for all purposes as a vote at a meeting. Section 2.11. Meetings by Telephone Conference Calls. Directors or members of any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting. Section 2.12. Resignations. Any director may resign by giving written notice to the Clerk. Such resignation shall take effect at the time or upon the event specified therein, or, if none is specified, upon receipt. Unless otherwise specified in the resignation, its acceptance shall not be necessary to make it effective. Section 2.13. Removal. A director may be removed from office with or without cause by vote of the holders of a majority in interest of the stock entitled to vote in the election of such director and may be removed from office with cause by vote of a majority of the directors then in office. A director may be removed for cause only after reasonable notice and opportunity to be heard before the body proposing to remove him. Section 2.14. Vacancies. In the event of a vacancy in the Board of Directors, by reason of an enlargement of the Board of Directors or otherwise, the remaining directors, by majority vote, may elect a director to fill such vacancy and may exercise the powers of the full Board of Directors until the vacancy is filled. Section 2.15. Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Section 2.16. Committees. The Board of Directors may, from time to time, by vote passed by a majority of the entire Board, constitute such standing committees (in addition to the Executive Committee) or special committees as it deems desirable and may dissolve any such committee (other than the Executive Committee) by like vote at its pleasure. The Executive Committee and each other committee of the directors duly constituted shall have such authority and powers of the Board of Directors as may be delegated to such committee by these By-laws or by the vote of the Board constituting such committee, except to the extent otherwise provided by law, the Articles of Organization or these By-laws and except that no committee shall have the power (i) to change the principal office of the corporation, (ii) to amend these By-laws, (iii) to establish and designate series of stock and fix and determine the relative rights and preferences of any series of stock, (iv) to elect officers required by law or these By-laws to be elected by the stockholders or the entire Board and to fill vacancies in any such offices, (v) to change the number of the Board of Directors and to fill vacancies in the Board of Directors, (vi) to remove officers or directors from office, (vii) to authorize the payment of any dividend or distribution to stockholders, (viii) to authorize the reacquisition for value of stock of the corporation, or (ix) to authorize a merger of the corporation. Except as may be otherwise determined by law, these By-laws or action by the Board of Directors, any such committee shall be governed in the conduct of its business by the rules governing the conduct of the business of the Board of Directors contained in these By-laws and may, by majority vote of the entire committee, make other rules for the conduct of its business. The Board of Directors shall have power at any time to fill vacancies in any such committee, and (except as otherwise provided in Section 2.17 of these By-laws) to change the membership of or to discharge any committee. Section 2.17. Executive Committee. There shall be an Executive Committee of not fewer than two nor more than five members, composed of the Chairman of the Board and such other directors as the Board of Directors may appoint from time to time by vote passed by a majority of the entire Board. The Board of Directors may also, from time to time, by similar vote, appoint one or more alternate members of the Executive Committee who may attend and act in the place of any absent or disqualified member or members of the Executive Committee at any meeting thereof. The term of office of any member or alternate member of the Executive Committee shall expire on the date specified in the resolution of appointment or any earlier date on which such member ceases to be a director. During the intervals between meetings of the Board of Directors, the Executive Committee shall have and may exercise all the powers of the Board of Directors, subject to the limitations upon the powers of any committee set forth in Section 2.16. The action taken by the Executive Committee at any meeting thereof shall be reported to the entire Board and shall be subject to modification or repeal by the Board of Directors; provided that no modification or repeal by the Board of Directors of action taken by the Executive Committee shall prejudice the rights or acts of any third person. The Executive Committee shall hold meetings at such times and places and upon such notice as it may from time to time determine. A meeting of the Executive Committee may be called at any time by the Chairman of the Board or by any other member of the Executive Committee. Any action taken by a majority of the members of the Executive Committee shall constitute the action of the committee. Section 2.18. Issuance of Stock. The Board of Directors shall have power to issue and sell or otherwise dispose of such shares of the corporation's authorized but unissued capital stock to such persons and at such time and for such consideration, cash, property, services, expenses, or otherwise, and upon such terms as it shall determine from time to time. ARTICLE III - OFFICERS Section 3.1. Officers. The officers of the corporation shall consist of a President, a Treasurer, a Clerk, and such other officers with such other titles as the Board of Directors may determine including but without limitation to a Chairman of the Board, a President, a Chief Financial Officer, a Secretary, one or more Vice Presidents, Assistant Treasurers, Assistant Clerks, and Assistant Secretaries. Any two or more offices may be held by the same person. Any officer may be required to give a bond for the faithful performance of his duties in such form and with such sureties as the Board of Directors may determine. Section 3.2. Election and Term of Office. Except for the initial officers and except as provided in Section 3.12, the President, Treasurer and Clerk shall be elected by the Board of Directors at its annual meeting or at the special meeting held in lieu of the annual meeting and shall hold office until the following annual meeting of the Board of Directors or the special meeting in lieu of said annual meeting and until their successors are chosen and qualified. Other officers may be chosen by the Board of Directors at the annual meeting or any other meeting and shall hold office for such period as the Board of Directors may prescribe. Section 3.3. Chairman of the Board. The Chairman of the Board, if one is elected, shall have general supervision over the implementation of policies adopted or approved by the Board of Directors. When incumbent, the Chairman of the Board shall preside at all meetings of the stockholders and all meetings of the Board of Directors, shall be exofficio a member of all standing committees, including the Executive Committee, of the Board of Directors, and shall exercise and perform such other powers and duties as may be required by law, the Articles of Organization or these By-laws or as may be assigned by the Board of Directors or the Executive Committee. Section 3.4. President. Subject to the direction of the Board of Directors and the Executive Committee, the President shall be the chief executive officer of the corporation and shall have the general control and management of the business and affairs of the corporation. The President need not be a director. The President shall perform such duties as may be required of him by law, the Articles of Organization and the By-laws or as may be assigned to him by the Board of Directors or the Executive Committee. During any period when there is no Chairman of the Board, the President shall perform all the duties vested in that office, and when so acting shall have all of the powers of, and be subject to all the restrictions upon, the Chairman of the Board. In the absence of the Chairman of the Board, the President shall preside at any meeting of the stockholders or the Board of Directors. Section 3.5. Vice Presidents. The Vice President, or if there be more than one, the Vice Presidents, shall perform such of the duties of the President on behalf of the corporation as may be respectively assigned to him or them from time to time by the Board of Directors, the Chairman of the Board or the President. The Board of Directors may designate a Vice President as the Executive Vice President, and in the absence or inability of the President to act, such Executive Vice President shall have and possess all of the powers and discharge all of the duties of the President, subject to the control of the Board of Directors and the supervision of the Chairman of the Board. Section 3.6. Chief Financial Officer. The Board of Directors shall appoint an officer to serve as the Chief Financial Officer of the Corporation. The Chief Financial Officer shall be responsible for the Corporation's public financial reporting obligations and shall have such further powers and duties as are incident to the position of Chief Financial Officer, subject to the direction of the President and the Board of Directors. Section 3.7. Treasurer and Assistant Treasurer. The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned to the Treasurer by the Board of Directors or the President. In addition, subject to the direction of the Board of Directors, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including, without limitation, the duty and power to keep and be responsible for all funds and securities of the Corporation, to deposit funds of the Corporation in depositories, to disburse such funds, to make proper accounts of such funds, and to render statements of all such transactions and of the financial condition of the Corporation. The Treasurer shall report directly to the President. He may be required by the Board of Directors to give a bond for the faithful discharge of his duties in such sum and with such surety as the Board may require. Any Assistant Treasurer shall perform such of the duties of the Treasurer and such other duties as the Board of Directors, the Chairman of the Board, the President or the Treasurer may designate. The Treasurer shall have authority, in connection with the normal business of the corporation, to sign contracts, bids, bonds, powers of attorney and other documents when required. Section 3.8. Clerk and Assistant Clerk. The Clerk shall be the principal recording officer of the corporation. He shall record all proceedings of the stockholders and discharge all duties incident to the office of Clerk. Unless a Secretary is appointed by the Board of Directors to perform such duties, the Clerk shall record all proceedings of the Board of Directors and of any committees appointed by the Board of Directors. Any Assistant Clerk shall perform such of the duties of the Clerk and such other duties as the Board of Directors, the Chairman of the Board, the President or the Clerk may designate. In the absence of the Clerk or any Assistant Clerk from any meeting of stockholders, the Board of Directors or any committee appointed by the Board of Directors, a Temporary Clerk designated by the person presiding at the meeting shall perform the duties of the Clerk. The Clerk shall be a resident of the Commonwealth of Massachusetts unless a resident agent has been appointed by the corporation pursuant to law to accept service of process. Section 3.9. Secretary and Assistant Secretary. If appointed by the Board of Directors, the Secretary shall record all proceedings of the Board of Directors and discharge all duties incident to the office of Secretary. Any Assistant Secretary shall perform such of the duties of the Secretary and such other duties as the Board of Directors, Chairman of the Board, President or Secretary may designate. The Board of Directors and any committee appointed by the Board of Directors may appoint a Secretary and one or more Assistant Secretaries to perform the functions of the Secretary and Assistant Secretary for such committee. Section 3.10. Resignation. Any officer may resign by giving written notice to the President or the Clerk. Such resignation shall take effect at the time or upon the event specified therein, or, if none is specified, upon receipt. Unless otherwise specified in the resignation, its acceptance shall not be necessary to make it effective. Section 3.11. Removal. An officer may be removed from office with cause, after reasonable notice and opportunity to be heard, or without cause, in either case, by vote of a majority of the directors then in office. Section 3.12. Vacancies. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of President, Chief Financial Officer, Treasurer and Clerk. Section 3.13. Subordinate Officers. The Board of Directors may, from time to time, authorize any officer to appoint and remove subordinate officers and to prescribe their powers and duties. The term "subordinate officers" shall in no event include the Chairman of the Board, President, Chief Financial Officer and Clerk. Section 3.14. Compensation. The Board of Directors may fix the compensation of all officers of the corporation and may authorize any officer upon whom the power of appointing subordinate officers may have been conferred to fix the compensation of such subordinate officers. ARTICLE IV - STOCK Section 4.1. Stock Certificates. Each stockholder shall be entitled to a certificate or certificates of stock of the corporation in such form as the Board of Directors may from time to time prescribe. Each certificate shall be duly numbered and entered in the books of the corporation as it is issued, shall state the holder's name and the number and the class and the designation of the series, if any, of his shares, shall be signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer and may, but need not, be sealed with the seal of the corporation. If any stock certificate is signed by a transfer agent, or by a registrar, other than a director, officer or employee of the corporation, the signatures thereon of the officers may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed on any certificate shall have ceased to be such officer before such certificate is issued, it may nevertheless be issued by the corporation and delivered with the same effect as if he were such officer at the time of its issue. Every certificate of stock which is subject to any restriction on transfer pursuant to the Articles of Organization, the By-laws or any agreement to which the corporation is a party, shall have the restrictions noted conspicuously on the certificate and shall also set forth on the face or back of the certificate either (i) the full text of the restriction, or (ii) a statement of the existence of such restriction and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. Every certificate issued at a time when the corporation is authorized to issue more than one class or series of stock shall set forth upon the face or back of the certificate either (i) the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series, if any, authorized to be issued, as set forth in the Articles of Organization or (ii) a statement of the existence of such preferences, powers, qualifications and rights, and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. Section 4.2. Transfer of Stock. Subject to any transfer restrictions then in force, the shares of stock of the corporation shall be transferable only upon its books by the holders thereof in person or by their duly authorized attorneys or legal representatives. Such transfer shall be effected by delivery of the old certificate, together with a duly executed assignment and power to transfer endorsed thereon or attached thereto and with such proof of the authenticity of the signature and such proof of authority to make the transfer as the corporation or its agents may reasonably require, to the person in charge of the stock and transfer books and ledgers or to such other person as the Board of Directors may designate, who shall thereupon cancel the old certificate and issue a new certificate. The corporation may treat the holder of record of any share or shares of stock as the owner of such stock, and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have notice thereof, express or otherwise. Section 4.3. Fixing Date for Determination of Stockholders' Rights. The Board of Directors may fix in advance a time, not exceeding sixty days preceding the date of any meeting of stockholders, or the date for the payment of any dividend or the making of any distribution to stockholders, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or the last date on which the consent or dissent of stockholders may be effectively expressed for any purpose, as the record date for determining the stockholders entitled to notice of, and to vote at, such meeting and any adjournment thereof, to receive such dividend or distribution, to receive such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to express such consent or dissent. In such case only stockholders of record on the date so fixed shall have such right, notwithstanding any transfer of stock on the books of the corporation after the record date. In any case in which the Board of Directors does not fix a record date, the record date shall be the thirtieth day next preceding the date of such meeting, the dividend payment or distribution date, the date for allotment of rights, the date for exercising of rights in respect of any such change, conversion or exchange of capital stock, or the date for expressing such consent or dissent, as the case may be. Section 4.4. Lost, Mutilated or Destroyed Certificates. No certificates for shares of stock of the corporation shall be issued in place of any certificate alleged to have been lost, mutilated or destroyed, except upon production of such evidence of the loss, mutilation or destruction and upon indemnification of the corporation and its agents to such extent and in such manner as the Board of Directors may prescribe and as required by law. ARTICLE V - GENERAL PROVISIONS Section 5.1. Offices. The principal office of the corporation shall be in Woburn, Massachusetts. The corporation may also have offices at such other place or places within or without Massachusetts as the Board of Directors may from time to time determine or the business of the corporation may require. Section 5.2. Seal. The seal of the corporation shall be in the form of a circle inscribed with the name of the corporation, the year of its incorporation and the word "Massachusetts". When authorized by the Board of Directors and to the extent not prohibited by law, a facsimile of the corporate seal may be affixed or reproduced. Section 5.3. Fiscal Year. Except as otherwise determined by the Board of Directors, the fiscal year of the corporation shall be the fifty-two or fifty-three weeks ending on the Saturday nearest December 31 in each year. Section 5.4. Execution of Instruments. Except as otherwise provided in these By-laws or as the Board of Directors may generally or in particular cases authorize the execution thereof in some other manner, all instruments, documents, deeds, leases, transfers, contracts, bonds, notes, checks, drafts and other obligations made, accepted or endorsed by the corporation shall be signed by the Chairman of the Board, President or a Vice President, or by the Treasurer or an Assistant Treasurer, or by the Clerk. Facsimile signatures may be used in the manner and to the extent authorized generally or in particular cases by the Board of Directors. Section 5.5. Corporate Records. The original, or attested copies, of the Articles of Organization, By-laws, and records of all meetings of incorporators and stockholders, and the stock and transfer records, which shall contain the names of all stockholders and the record address and the amount of stock held by each, shall be kept in the Commonwealth of Massachusetts at the principal office of the corporation, or at an office of its Clerk, its resident agent or its transfer agent. The copies and records need not all be kept in the same office. They shall be available at all reasonable times for inspection by any stockholder for any proper purpose. They shall not be available for inspection to secure a list of stockholders or other information for the purpose of selling such list or information or copies thereof or of using the same for a purpose other than in the interest of the applicant, as a stockholder, relative to the affairs of the corporation. Section 5.6. Voting of Securities Owned by this Corporation. Subject always to the specific directions of the Board of Directors, (a) any shares or other securities issued by any other corporation and owned or controlled by this corporation may be voted in person at any meeting of security holders of such other corporation by the Chairman of the Board of this corporation if he is present at such meeting, or in his absence by the President or Treasurer of this corporation if he is present at such meeting, and (b) whenever, in the judgment of the Chairman of the Board, it is desirable for this corporation to execute a proxy or written consent in respect to any shares or other securities issued by any other corporation and owned by this corporation, such proxy or consent shall be executed in the name of this corporation by the Chairman of the Board, without the necessity of any authorization by the Board of Directors, affixation of corporate seal or countersignature or attestation by another officer, provided that if the Chairman of the Board is unable to execute such proxy or consent by reason of sickness, absence from the United States or other similar cause, the President or Treasurer may execute such proxy or consent. Any person or persons designated in the manner above stated as the proxy or proxies of this corporation shall have full right, power and authority to vote the shares or other securities issued by such other corporation and owned by this corporation the same as such shares or other securities might be voted by this corporation. Section 5.7. Conflict of Interest. (a) The corporation may enter into contracts and otherwise transact business as vendor, purchaser, partner, joint venturer or otherwise with any director, officer, or stockholder of the corporation, and with any corporation, joint stock company, business trust, partnership or other entity in which any director, officer or stockholder of the corporation is or may be or become a director, officer, stockholder, joint venturer, partner, trustee or beneficiary, or in which he may otherwise be or become a party or may have an interest, pecuniary or otherwise, as freely as though such director's, officer's or stockholder's interest did not exist, even though the vote, action or presence of such director, officer or stockholder may be necessary to obligate the corporation in connection with such contract or transaction. No such contract or transaction shall, in the absence of fraud, be affected, invalidated or avoided, and no such director, officer or stockholder shall be held liable to account to the corporation or to any creditor or stockholder of the corporation for any profit or benefit realized by such person through any such contract or transaction, by reason of such adverse interest or by reason of any fiduciary relationship of such director, officer or stockholder to the corporation arising out of such office or stock ownership. (b) In the case of a director or officer, but not in the case of any stockholder as such, having any such interest in a contract or transaction, the nature of the interest of such director or officer (though not necessarily the details or the extent thereof) shall be disclosed to or known by the entire Board of Directors before acting on such contract or transaction. Ownership or beneficial interest representing less than 10% of the stock or other equity interest in another corporation, joint stock company, business trust, partnership or other entity shall be deemed not to constitute an interest adverse to this corporation and such interest in another corporation, joint stock company, business trust, partnership or other entity need not be disclosed pursuant to the preceding sentence of this Section 5.7. A general notice that a director or officer of the corporation has an interest in any other corporation, joint stock company, business trust, partnership or other entity shall be sufficient disclosure as to such director or officer with respect to any contract or transaction of this corporation with such other corporation, joint stock company, business trust, partnership or other entity. (c) Any director of this corporation who is also a director or officer of, or has interest requiring disclosure pursuant to this Section 5.7 to the Board of Directors in, any other corporation, business trust, partnership or other entity (other than any such entity controlling, controlled by or under common control with this corporation) with which this corporation proposes to contract or transact any business, or who has an interest in his or her own right, pecuniary or otherwise, in any such contract or transaction, shall not participate in any vote to authorize any such contract or transaction. Any such contract or transaction may be authorized or approved by a majority of the directors then in office and not disqualified by this Section 5.7 to vote on such matters, even though the disinterested directors do not constitute a quorum. In any event, the authorization or a ratification of a majority of the capital stock of this corporation outstanding and entitled to vote for the election of directors, adopted at a meeting duly called and held for the purpose, shall validate any such contract or transaction as against any stockholders of the corporation, whether of record or not at the time of such vote, and as against any creditor or other claimant under the corporation; and no contract or transaction shall be avoided or invalidated by reason of any provision of this Section 5.7 which would be valid but for the provisions of this Section 5.7. Section 5.8. Indemnification. (a) For purposes of this Section 5.8, the following terms shall have the meanings ascribed to them below: "Agent" means any person who is or was a director, officer, employee or other agent of this corporation, or is or was serving at the request of this corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, business trust, or other enterprise in which this corporation has an interest, as a stockholder, creditor or otherwise, and shall include, wherever appropriate, such agent's executors, administrators or personal representatives. "Liabilities and expenses" includes, without limitation thereto, amounts of judgments, fines and penalties against, and amounts paid in settlement by or on behalf of, any agent of this corporation, attorneys' fees and disbursements and any expenses of establishing a right to indemnification under this Section 5.8. "Proceeding" means any pending, completed or terminated action, suit or proceeding, whether brought in the right of this corporation or otherwise and whether of a civil, criminal, administrative or investigative nature. (b) This corporation shall, to the extent legally permissible and in accordance with the provisions of this Section 5.8, indemnify any person who was or is a party to, is threatened to be made a party to, or is otherwise involved in any proceeding by reason of the fact that such person is or was an agent of this corporation, against all liabilities and expenses actually and reasonably incurred by such person in connection with the defense or settlement of such proceeding, except with respect to any matter as to which such person shall have been adjudicated in such proceeding not to have acted in good faith in the reasonable belief that his or her action was in the best interests of the corporation, or, with respect to any criminal proceeding, had reasonable cause to believe his or her conduct was unlawful; provided, however, that in the case of any proceeding by or in the right of this corporation to procure a judgment in its favor, no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duties to the corporation, unless (and only to the extent that) the court in which such proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper. The termination of any such proceeding by judgment, order of court, settlement, conviction or upon a plea of guilty or nolo contendere, or its equivalent, shall not, of itself, create a presumption that the person involved did not act in good faith for a purpose which he or she reasonably believed to be in the best interests of the corporation, or, with respect to any criminal proceeding, that such person had reasonable cause to believe that his or her conduct was unlawful. (c) To the extent that any agent of this corporation has been successful (as hereinafter defined) in the defense of any proceeding referred to in the preceding paragraph (b) of this Section 5.8, or of any claim or issue therein, such agent shall be indemnified against expenses actually and reasonably incurred by him or her in connection therewith, but only to the extent permitted by paragraph (b). "Successful", when used with reference to the defense or disposition of any proceeding involving a particular person, or of any issue or claim therein, means that the proceeding, issue or claim has been finally terminated without a finding of liability or guilt against such person and the time for taking an appeal or other court or administrative action therein has expired or, in the case of a threatened proceeding, a reasonable period of time (which may, but need not, be shorter than the period which, under the applicable statute of limitations, would bar the threatened proceeding) has elapsed since the threat was made without the proceeding having been instituted in court or before a governmental agency and, in either case, without any payment or promise having been made to induce a settlement. (d) Indemnification under this Section 5.8 for liabilities and expenses, other than those to which the preceding paragraph (c) applies or those ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the agent is proper in the circumstances because the agent conformed to the applicable standards of conduct set forth in paragraph (b) of this Section 5.8. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum of disinterested directors (as hereinafter defined), (ii) if such a quorum is not obtainable, or even if obtainable and a quorum of disinterested directors so directs, by independent legal counsel or by one or more independent persons, in either case chosen by the Board of Directors, in a written finding delivered to the corporation, or (iii) by vote of a majority of each class of stock of the corporation then outstanding and entitled to vote on the election of directors. "Disinterested director" means, with respect to action by the Board of Directors upon any claim for indemnification of an agent of the corporation, any director other than a director who is or was involved in the same proceeding or threatened with the same claim of liability as that for which indemnification by the corporation is sought by such agent or who is involved in any other proceeding or threatened with any other claim of liability which might entitle him or her to indemnification by the corporation under this Section 5.8 or otherwise. (e) Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking in writing by or on behalf of the agent to repay such amount unless it shall be determined ultimately that the agent is entitled to be indemnified by the corporation as provided in this Section 5.8. (f) No indemnification for expenses or advances in respect of expenses incurred in defending any proceeding shall be made under this Section 5.8 in any circumstance where it appears (i) that it would be inconsistent with a provision of the Articles of Organization, these By-laws, a vote of the stockholders, or a contract in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred, which prohibits or limits indemnification, or (ii) that it would be inconsistent with any condition expressly imposed by a court in approving a settlement. (g) The right of indemnification provided by this Section 5.8 shall not be exclusive of or affect any other right to which any agent of the corporation may be entitled. (h) The Board of Directors may authorize the corporation to purchase and maintain insurance on behalf of any agent of the corporation against any liability asserted against or incurred by such agent in such capacity or arising out of his or her status as such, whether or not the corporation would have the power to indemnify the agent against such liability under the provisions of this Section 5.8. ARTICLE VI - AMENDMENTS Section 6.1. General. These By-laws may be amended, added to or repealed, in whole or in part, (a) by vote of the stockholders at a meeting, where the substance of the proposed amendment is stated in the notice of the meeting, or (b) by vote of a majority of the directors then in office, except that no amendment may be made by the Board of Directors on matters reserved to the stockholders by law or the Articles of Organization or which changes the provisions of these By-laws relating to meetings of stockholders, to the removal of directors or to the requirements for amendment of these By-laws. Notice of any amendment, addition or repeal of any By-law by the Board of Directors stating the substance of such action shall be given to all stockholders not later than the time when notice is given of the meeting of stockholders next following such action by the Board of Directors. Any By-law adopted by the Board of Directors may be amended or repealed by the stockholders. Section 6.2. Date of Annual Meeting of Stockholders. No amendment of these By-laws changing the date of the annual meeting of stockholders may be made within sixty days before the date fixed in these By-laws for such meeting. Notice of such change shall be given to all stockholders at least twenty days before the new date fixed for the meeting. ARTICLE VII - MISCELLANEOUS Section 7.1. Massachusetts Control Share Acquisition Act. Pursuant to Section 2(c) of Chapter 110D of the Massachusetts General Laws, the Corporation has elected that the provisions of said Chapter 110D shall not apply to "control share acquisitions" (as defined in said Chapter 110D) of this Corporation. EX-27 12
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMEDICS INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JULY 3, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JAN-01-2000 JUL-03-1999 21,545 65,750 69,227 5,012 60,783 302,592 60,207 39,994 506,597 86,262 117,628 0 0 4,199 218,473 506,597 155,768 155,768 81,730 81,730 46,384 913 2,946 (15,290) 5,527 (22,715) 0 0 0 (22,715) (0.54) (0.54)
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