-----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, P77dfNjxZJs2WPCG1UEG+nZR7T7dof8SxQnV4OFs/NvmRnHHvPaaw/i1VZak9nJ8 XChKEr+hnbOoqAaZKv1ikQ== 0000097745-05-000033.txt : 20050302 0000097745-05-000033.hdr.sgml : 20050302 20050302163022 ACCESSION NUMBER: 0000097745-05-000033 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050225 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050302 DATE AS OF CHANGE: 20050302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMO ELECTRON CORP CENTRAL INDEX KEY: 0000097745 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 042209186 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08002 FILM NUMBER: 05654673 BUSINESS ADDRESS: STREET 1: 81 WYMAN ST STREET 2: PO BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02451 BUSINESS PHONE: 7816221000 MAIL ADDRESS: STREET 1: 81 WYMAN ST STREET 2: PO BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02451 8-K 1 tmo8kexeccomp022505.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) February 25, 2005 -------------------------------------------- THERMO ELECTRON CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 1-8002 04-2209186 (State or other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 81 Wyman Street, P.O. Box 9046 02454-9046 Waltham, Massachusetts (Zip Code) (Address of Principal Executive Offices) (781) 622-1000 (Registrant's Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement On February 25, 2005, the Board of Directors (the "Board") of Thermo Electron Corporation (the "Company") and the Compensation Committee of the Board (the "Compensation Committee") took the following actions relating to executive and director compensation: 2004 Executive Compensation Matters Annual Cash Incentive Plans - Approval of Payout of Cash Bonuses for 2004. The Compensation Committee approved the payout of cash bonuses for 2004 to the Company's executive officers under the Company's 2003 Annual Incentive Award Plan (the "162(m) Plan"), which was approved by the stockholders of the Company at its 2003 Annual Meeting of Stockholders. The Compensation Committee exercised its discretion to lower the amount of the cash bonuses payable under the 162(m) Plan based on its determinations as to the level of achievement of the applicable supplemental performance metrics for 2004 under the Company's annual cash incentive program, which operates in connection with the 162(m) Plan. The amount of cash bonuses approved by the Compensation Committee to be paid to the Company's "named executive officers" (as defined by Item 402(a)(3) of Regulation S-K) are set forth in the table below. 2005 Executive Compensation Matters Annual Cash Incentive Plans - Establishment of Criteria for 2005 Bonus. The Compensation Committee established the performance goal under the 162(m) Plan for 2005 as earnings before interest, taxes and amortization, excluding the impact of charges for restructuring, discontinued operations, extraordinary items, other unusual or non-recurring items and cumulative effects of accounting changes ("Adjusted EBITA"); and determined the percentage of Adjusted EBITA that each of the Company's executive officers is entitled to receive as a cash bonus for 2005 under the 162(m) Plan, subject to the Compensation Committee's right to lower, but not raise, the actual cash bonus to be paid to such executive officer for the year. The Compensation Committee's determination as to whether to lower the actual cash bonus to be paid to executive officers is generally based on the results of its determinations under the Company's annual cash incentive program for that year (which is described in the next paragraph). The Compensation Committee also established a target cash bonus amount for each of the Company's executive officers as well as supplemental performance metrics for such officers and the Company as a whole under the Company's annual cash incentive program for 2005. The target amount for each of the Company's executive officers, which is a percentage of base salary (ranging from 40% to 95%), was determined by the Compensation Committee based on the salary level and position of such officer within the Company. The supplemental performance metrics are based on (a) (70%) financial measures for the Company, comprised of growth in (i) revenue (adjusted for the impact of acquisitions and divestitures and for foreign currency changes) (35%) and (ii) earnings (adjusted for restructuring charges and certain other items of income or expense) before interest, taxes and amortization as a percentage of revenue (35%) and (b) (30%) qualitative measures of the Company's executive officers' contributions to the achievement of certain business objectives of the Company. For each of the financial measures, the Company's actual performance will be measured relative to the Company's internal operating plan for 2005. For < 2 > both the financial and the qualitative measures, a range of performance for each such measure corresponds with a multiplier of 0 to 2. After giving effect to the weighting of the supplemental performance metrics, a composite final multiplier will be applied to the target cash bonus amounts for all of the Company's officers, including its executive officers. The sum of these amounts will be added together to form a bonus pool for all of the Company's officers, including its executive officers, and will allocated by the Compensation Committee among such officers. Base Salary - Approval of Increases for 2005. Effective April 1, 2005, the Compensation Committee increased the annual base salary of the Company's executive officers (other than the Company's chief executive officer and general counsel whose annual base salaries remain the same). The annual base salary approved by the Compensation Committee for the Company's named executive officers is set forth in the table below. Stock Options and Restricted Stock - Approval of Grants for 2005. The Compensation Committee granted stock options to the Company's executive officers under the Company's equity incentive plans. The stock option grants for the executive officers, other than the chief executive officer, are evidenced by the Company's standard form of Stock Option Agreement to its officers, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. The stock option grant to the chief executive officer, Marijn E. Dekkers, is evidenced by the Company's standard form of Stock Option Agreement for Mr. Dekkers, a copy of which is attached hereto as Exhibit 99.2 and incorporated herein by reference. The options all (a) vest in equal annual installments over the three-year period commencing on the date of grant (i.e., the first 1/3 of a stock option grant would vest on the first anniversary of the date of grant) so long as the executive officer is employed by the Company on each such date, (b) have an exercise price equal to the average of the opening and closing prices of the Company's common stock on the New York Stock Exchange on the date of grant, and (c) have a term of 7 years from such date. In addition, the Compensation Committee awarded 100,000 shares of restricted common stock of the Company to Mr. Dekkers that vest in annual equal installments over the three-year period commencing on November 21, 2005 (i.e., the first 1/3 of the restricted shares would vest on November 21, 2006) assuming continuous employment with the Company on each such date. The award is evidenced by the Company's standard form of Restricted Stock Agreement for Mr. Dekkers, a copy of which is attached hereto as Exhibit 99.3 and incorporated herein by reference. The stock option grants approved by the Compensation Committee for the Company's named executive officers are set forth in the table below. CEO Employment Agreement -Amendment. The Compensation Committee approved, and the Company and Mr. Dekkers entered into, a letter agreement dated as of February 25, 2005 that (a) amended the second sentence of Section 6(c) of Mr. Dekkers' Amended and Restated Employment Agreement dated as of November 21, 2002, as amended (the "Employment Agreement"), to provide that the exercise price of the stock options to be granted to Mr. Dekkers in 2005, 2006 and 2007 shall be the average of the opening and closing prices of the Company's common stock on the New York Stock Exchange on the date of each grant and (b) provided that the stock option to purchase 260,000 shares of the Company's common stock granted to Mr. Dekkers on February 25, 2005 pursuant to Section 6(c) of the Employment Agreement shall have a term of 7 years from the date of grant rather than a term of 10 years as provided in the last sentence of Section 6(c) of the Employment Agreement. < 3 >
- ----------------------------------------------------------------------------------------------------- 2005 Securities 2005 Underlying 2004 Salary Option Name Cash Bonus (1) (effective April 1, 2005) Grant - ----------------------------------------------------------------------------------------------------- Marijn E. Dekkers $1,107,000 $1,000,000 438,000 (2) President and Chief Executive Officer - ----------------------------------------------------------------------------------------------------- Guy Broadbent $ 191,580 $ 350,000 125,000 Vice President; President Bioscience Technologies Division - ----------------------------------------------------------------------------------------------------- Marc N. Casper $ 359,550 $ 600,000 265,000 Senior Vice President - ----------------------------------------------------------------------------------------------------- Seth H. Hoogasian $ 223,245 $ 363,000 125,000 Vice President, General Counsel and Secretary - ----------------------------------------------------------------------------------------------------- Peter M. Wilver $ 196,890 $ 363,825 125,000 Vice President, Chief Financial Officer - ----------------------------------------------------------------------------------------------------- (1) The Compensation Committee has reserved the right to re-examine the qualitative portion of the 2004 cash bonuses in the event that the Company's annual report on Form 10-K for the year ended December 31, 2004 includes an assessment by the Company's registered public accounting firm other than that the Company maintained, in all material respects, effective internal control over financial reporting as of the year end. (2) The amount reported for the number of shares of the Company's common stock underlying Mr. Dekkers' stock option grant for 2005 include the option to purchase 260,000 shares of the Company's common stock that Mr. Dekkers was entitled to receive pursuant to the terms of his Employment Agreement (as defined above).
2005 Director Compensation Matters Annual Cash Retainer - Approval of Increase. Effective February 25, 2005, the Board increased the annual retainer that is provided to the chairman of the Audit Committee to $20,000. Restricted Stock - Approval of Award. The Compensation Committee awarded 2,500 shares of restricted common stock of the Company to the Chairman of the Board, Jim P. Manzi, that vest in equal installments over the three-year period commencing on the date of grant (i.e., the first 1/3 of the restricted shares would vest on the first anniversary of the date of grant) assuming continued service as Chairman of the Board on each such date. The award is evidenced by the Company's standard form of Restricted Stock Agreement for Mr. Manzi, a copy of which is attached hereto as Exhibit 99.4 and incorporated herein by reference. < 4 > Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.1 Form of Thermo Electron Corporation Stock Option Agreement for use in connection with the grant of stock options under the Registrant's equity incentive plans to officers and directors of the Registrant. 99.2 Form of Thermo Electron Corporation Stock Option Agreement for use in connection with the grant of stock options under the Registrant's equity incentive plans to Mr. Dekkers. 99.3 Form of Thermo Electron Corporation Restricted Stock Agreement for use in connection with the grant of restricted stock under the Registrant's equity incentive plans to Mr. Dekkers. 99.4 Form of Thermo Electron Corporation Restricted Stock Agreement for use in connection with the grant of restricted stock under the Registrant's equity incentive plans to Mr. Manzi. < 5 > SIGNATURE 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 hereunto duly authorized, on this 2nd day of March 2005. THERMO ELECTRON CORPORATION /s/ Seth H. Hoogasian By: ----------------------------- Name: Seth H. Hoogasian Title: Vice President < 6 > EX-99.1 2 tmo8kex99-1execcomp022505.txt Exhibit 99.1 Grant ID # XX-xxxx [A/7; as of 02/25/05; D&O] THERMO ELECTRON CORPORATION [NAME OF EQUITY INCENTIVE PLAN] STOCK OPTION AGREEMENT XXXX Optionee xxxx $xxxx Number of Shares of Exercise Price Common Stock Subject Per Share to the Option ("Option Shares") Vesting Schedule # of Shares Vesting Date(s) [PERCENTAGE] [DATE] XXXX XXXX Grant Date Expiration Date Thermo Electron Corporation (the "Company") confirms the grant to you of an option (the "Option") to acquire the number of shares of common stock (the "Common Stock") specified above, of the Company, subject to the provisions of the [Name of Equity Incentive Plan] (the "Plan") and the terms, conditions and restrictions contained in this agreement (the "Agreement"). You acknowledge receipt of the Plan and the Agreement for your records. THERMO ELECTRON CORPORATION By: ----------------------- 1. Grant of Option. This Agreement contains the terms and conditions of a grant of a nonqualified stock option to purchase the shares of the common stock of the Company (the "Option Shares") made to you, the Optionee named on the first page of this Agreement, pursuant to the Plan. Attached is a copy of the Plan, which is incorporated in this Agreement by reference and made a part hereof. This Option is intended to be a non-statutory stock option under the Internal Revenue Code of 1986, as amended. 2. Exercisability and Vesting of Option. The Option may be exercised only to the extent the Option shall have vested in accordance with this Agreement. The Option shall vest and become exercisable in accordance with the terms of this Section 2. (a) General Rule. Except as otherwise provided in this Section 2, the Option shall vest and be exercisable in accordance with the vesting schedule set forth on the first page of this Agreement, provided that on each vesting date you are then, and have been since the date of grant ("Grant Date"), continuously employed by the Company or an "Affiliated Employer". For purposes of this Agreement, an "Affiliated Employer" shall mean a subsidiary of the Company of which the Company owns more than 50% of the outstanding common stock. (b) Death or Disability, Retirement or Change in Control. Notwithstanding anything contained in this Agreement to the contrary, the Option shall vest and become exercisable as to 100% of the Option Shares upon the occurrence, prior to the date on which you cease to be an employee of the Company or an Affiliated Employer (your "Employment Termination Date"), of (i) your death or disability (as defined in Section 3(c) below); (ii) your retirement (as defined in Section 3(d) below); or (iii) a Change in Control (as defined in the Plan). (c) Effect of Other Termination of Employment. Notwithstanding anything contained in this Agreement to the contrary, the portion of the Option that has not previously vested prior to your Employment Termination Date shall cease to vest, be immediately forfeited to the Company and cancelled if the Employment Termination Date occurs for any other reason than the reasons specified in Section 2(b) (i), (ii) or (iii) above. 3. Termination of Option. The date on which the Option shall terminate in whole or in part as provided in this Section 3 is hereinafter referred to as the "Option Termination Date". This Option shall terminate on the date that is the earliest of: (a) the Expiration Date of the Option set forth on the first page of this Agreement; or (b) three months after your Employment Termination Date if the Employment Termination Date occurs for any reason other than the reasons specified in Sections 3(c), 3(d), 3(e) or 3(f); or < 2 > (c) one year after your Employment Termination Date if the Employment Termination Date occurs by reason of your death or disability. For purposes of this Agreement, "disability" shall mean that you are receiving disability benefits under the Company's Long Term Disability Coverage, as then in effect, on the Employment Termination Date; or (d) eighteen months after your Employment Termination Date if the Employment Termination Date occurs by reason of your retirement, subject to Section 3(f) below, provided that the retirement date occurs at least one year after the date of grant. For purposes of this Agreement, (i) if you are a non-employee director of the Company, then "retirement" shall mean the date on which you cease to serve as a director of the Company, and (ii) if you are an employee of the Company or an Affiliated Employer, then "retirement" shall mean the termination of your employment with the Company or an Affiliated Employer either (A) after age 55 and the completion of 10 years of continuous service to the Company or an Affiliated Employer comprising at least 20 hours per week, or (B) after age 60 and the completion of 5 years of continuous service to the Company or an Affiliated Employer comprising at least 20 hours per week; or (e) the date of the dissolution or liquidation of the Company; or (f) your Employment Termination Date if the Employment Termination Date occurs due to the termination of your employment by the Company or an Affiliated Employer for "cause" (as defined below). For the purposes of this Agreement, "cause" shall mean (i) the commitment of a felony or any crime involving moral turpitude by you that is materially injurious to the Company or (ii) in carrying out your duties, you intentionally engage in conduct that constitutes gross neglect or gross misconduct that is materially injurious to the Company. You shall be considered to have been discharged for cause if the Company determines, within 30 days after your resignation, that discharge for cause was warranted. 4. No Assignment of Rights. Except for assignments or transfers by will or applicable laws of descent and distribution, your rights and interests under this Agreement and the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise, including without limitation by way of execution, levy, garnishment, attachment, pledge or bankruptcy, and no such rights or interests shall be subject to any of your obligations or liabilities. Notwithstanding the foregoing, the Company consents to the transfer of this Option by you to an immediate member of your family, a family trust or family partnership, provided that the Company shall not be required to recognize any such transfer or assignment until such time as the Company, the transferee and you execute a written assignment of the Option in the form specified by the Company and upon the terms satisfactory to the Company. 5. Exercise of Option; Delivery and Deposit of Certificate(s). You (or in the case of your death, your legal representative) may exercise the Option (to the extent the Option has vested) in whole or in part in accordance with the instructions described in "The Guide for employees of Thermo Electron Corporation Stock Option Plans," as may be amended from time to time (the "Guide"). < 3 > 6. Rights With Respect to Option Shares. Prior to the date the Option is exercised, you shall not be deemed for any purpose to be a stockholder of the Company with respect to any of the Option Shares. Upon issuance to you of the Option Shares, you shall have ownership of such Option Shares, including the right to vote and receive dividends, subject, however, to the other restrictions and limitations imposed thereon pursuant to the Plan and this Agreement and which may be now or hereafter imposed by the Certificate of Incorporation or the By-Laws of the Company. 7. Adjustments in the Event of Certain Transactions. The provisions of the Plan covering the treatment of Options in the event of (a) stock dividends, stock splits, or combination of shares, or other distribution with respect to holders of Common Stock other than normal cash dividends occurring after the date of this Agreement and (b) recapitalizations, mergers or consolidations 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, (any of the foregoing, a "covered transaction") occurring while the Option is outstanding, are hereby made applicable hereunder and are incorporated herein by reference. 8. Reservation of Shares. The Company shall at all times during the term of this Agreement reserve and keep available such number of shares of the Common Stock as will be sufficient to satisfy the requirements of this Agreement and shall pay all fees and expenses necessarily incurred by the Company in connection with this Agreement and the issuance of Option Shares. 9. Taxes. No later than the date on which part or all of the value of any Option Shares received under the Plan first becomes includible in your gross income for income tax purposes, you shall satisfy your obligations to pay any federal, state or local taxes required to be withheld with respect to such income in accordance with the provisions of the Guide. 10. Determination of Rights. Any dispute or disagreement that may arise under or as a result of or pursuant to the Plan or this Agreement shall be determined by the Board, in its sole discretion, and any decision made by the Board (as defined by the Plan) in good faith shall be conclusive on all parties. The interpretation and construction by the Board of any provision of, and the determination of any question arising under, this Agreement, the Plan, or any rule or regulation adopted pursuant to the Plan, shall be final and conclusive. 11. Limitation of Employment Rights. The award of this Option does not entitle you to any benefit other than that granted under the Plan; any benefits granted under the Plan are not part of your ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation. < 4 > 12. Communications. Any communication or notice required or permitted to be given under this Agreement shall be in writing, and mailed by registered or certified mail or delivered in hand, if to the Company to its Stock Option Manager c/o Thermo Electron Corporation, 81 Wyman Street, Post Office Box 9046, Waltham, Massachusetts 02454-9046, and if to you, to the address you shall last have furnished to the Company. TMO STOCK OPTION AGREEMENT (D&O VERSION) < 5 > EX-99.2 3 tmo8kex99-2execcomp022505.txt Exhibit 99.2 THERMO ELECTRON CORPORATION [NAME OF EQUITY INCENTIVE PLAN] STOCK OPTION AGREEMENT Marijn E. Dekkers Optionee xxxx $xxxx Number of Shares of Exercise Price Common Stock Subject Per Share to the Option ("Option Shares") Vesting Schedule # of Shares Vesting Date(s) [PERCENTAGE] [DATE] XXXX XXXX Grant Date Expiration Date Thermo Electron Corporation (the "Company") confirms the grant to you of an option (the "Option") to acquire the number of shares of common stock (the "Common Stock") specified above, of the Company, subject to the provisions of the [Name of Equity Incentive Plan] (the "Plan") and the terms, conditions and restrictions contained in this agreement (the "Agreement"). You acknowledge receipt of the Plan and the Agreement for your records. THERMO ELECTRON CORPORATION By: ----------------------- 1. Grant of Option. This Agreement contains the terms and conditions of a grant of a nonqualified stock option to purchase the shares of the common stock of the Company (the "Option Shares") made to the Optionee, pursuant to the Plan. Attached is a copy of the Plan, which is incorporated in this Agreement by reference and made a part hereof. This Option is intended to be a non-statutory stock option under the Internal Revenue Code of 1986, as amended. For purposes of this Agreement, the defined terms used herein and not otherwise defined shall have the meaning set forth in that certain Amended and Restated Employment Agreement, dated as of November 21, 2002, by and between the Optionee and the Company, as the same may be amended from time to time (the "Employment Agreement"). 2. Exercisability and Vesting of Option. The Option may be exercised only to the extent the Option shall have vested in accordance with this Agreement. The Option shall vest and become exercisable in accordance with the terms of this Section 2. (a) General Rule. Except as otherwise provided in this Section 2, the Option shall vest and be exercisable in accordance with the vesting schedule set forth on the first page of this Agreement, provided that on each vesting date the Optionee is then, and has been since the Grant Date, continuously employed by the Company or its Affiliates. (b) Exceptions. Notwithstanding subsection (a) above, the Option shall fully vest and become exercisable as to 100% of the Option Shares in the following circumstances: (i) Immediately prior to the consummation of a Change in Control, all Option Shares that have not previously vested shall immediately vest; provided that the Optionee was then employed by the Company or its Affiliates. (ii) In the event of the Optionee's death or Disability, all Option Shares that have not previously vested shall immediately vest; provided that the Optionee was employed by the Company or its Affiliates immediately prior to the date of death or Disability. (iii) In the event the Optionee's employment is terminated by the Company without Cause (as the term "Cause" is defined in paragraph (c) below) or in the event the Optionee terminates employment for Good Reason (it being understood in this context, a termination of employment by the Company without Cause or by the Optionee with Good Reason does not include a termination due to the Optionee's death or Disability or termination with Cause or without Good Reason), all Option Shares that have not previously vested shall immediately vest. (c) Forfeiture. In the event (i) the Company terminates the Optionee's employment for Cause, notwithstanding anything to the contrary set forth in the Employment Agreement all Option Shares underlying this Option that have not previously vested on such date and all unexcercised Option Shares underlying this Option on such date shall be immediately forfeited to the Company or (ii) the Optionee terminates employment on his own initiative (it being understood that in this context, a termination of employment on the Optionee's own initiative does not include termination < 2 > due to his death, Disability or with Good Reason), all Option Shares underlying this Option that have not previously vested on such date shall be immediately forfeited to the Company. For the purposes of this Agreement and notwithstanding anything to the contrary set forth in the Employment Agreement, "cause" shall mean (i) the commitment of a felony or any crime involving moral turpitude by the Opionee, that is materially injurious to the Company or (ii) in carrying out the Optionee's duties, the Optionee intentionally engages in conduct that constitutes gross neglect or gross misconduct that is materially injurious to the Company. The Optionee shall be considered to have been discharged for cause if the Company determined, within 30 days after the Opionee's resignation, that discharge for cause was warranted. 3. Termination of Option. This Option shall terminate on the date that is the earliest of: (a) the Expiration Date of the Option set forth on the first page of this Agreement, (b) three (3) years after the Termination Date if the Optionee is terminated due to death or Disability, or the Optionee is terminated by the Company without Cause, or the Optionee's employment terminates upon the expiration of the Term, or the Optionee terminates employment for Good Reason, (c) notwithstanding anything to the contrary set forth in the Employment Agreement, the Termination Date in the event the Company terminates the Optionee's employment for Cause, or (d) 90 days after the Termination Date in the event the Optionee terminates employment on his own initiative (it being understood that in this context, a termination of employment on the Optionee's own initiative does not include termination due to his death, Disability or with Good Reason). 4. No Assignment of Rights. Except for assignments or transfers by will or applicable laws of descent and distribution, the Optionee's rights and interests under this Agreement and the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise, including without limitation by way of execution, levy, garnishment, attachment, pledge or bankruptcy, and no such rights or interests shall be subject to any of the Optionee's obligations or liabilities. Notwithstanding the foregoing, the Company consents to the transfer of this Option by the Optionee to an immediate member of his family, a family trust or family partnership, provided that the Company shall not be required to recognize any such transfer or assignment until such time as the Company, the transferee and the Optionee execute a written assignment of the Option in the form specified by the Company and upon the terms satisfactory to the Company. 5. Exercise of Option; Delivery and Deposit of Certificate(s). The Optionee (or in the case of his death, his legal representative) may exercise the Option (to the extent the Option has vested) in whole or in part in accordance with the instructions described in "The Guide for employees of Thermo Electron Corporation Stock Option Plans," as may be amended from time to time (the "Guide"). 6. Rights With Respect to Option Shares. Prior to the date the Option is exercised, the Optionee shall not be deemed for any purpose to be a stockholder of the Company with respect to any of the Option Shares. Upon issuance to the Optionee of the Option Shares, the Optionee shall have ownership of such Option Shares, including the right to vote and receive dividends, subject, however, to the other restrictions and limitations imposed thereon pursuant to < 3 > the Plan and this Agreement and which may be now or hereafter imposed by the Certificate of Incorporation or the By-Laws of the Company. 7. Adjustments in the Event of Certain Transactions. The provisions of the Plan covering the treatment of Options in the event of (a) stock dividends, stock splits, or combination of shares, or other distribution with respect to holders of Common Stock other than normal cash dividends occurring after the date of this Agreement and (b) recapitalizations, mergers or consolidations 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, (any of the foregoing, a "covered transaction" as defined in the Plan) occurring while the Option is outstanding, are hereby made applicable hereunder and are incorporated herein by reference. 8. Reservation of Shares. The Company shall at all times during the term of this Agreement reserve and keep available such number of shares of the Common Stock as will be sufficient to satisfy the requirements of this Agreement and shall pay all fees and expenses necessarily incurred by the Company in connection with this Agreement and the issuance of Option Shares. 9. Taxes. No later than the date on which part or all of the value of any Option Shares received under the Plan first becomes includible in the Optionee's gross income for income tax purposes, the Optionee shall satisfy his obligations to pay any federal, state or local taxes required to be withheld with respect to such income in accordance with the provisions of the Guide. 10. Determination of Rights. Any dispute or disagreement that may arise under or as a result of or pursuant to the Plan or this Agreement shall be determined by the Board, in its sole discretion, and any decision made by the Board (as defined by the Plan) in good faith shall be conclusive on all parties. The interpretation and construction by the Board of any provision of, and the determination of any question arising under, this Agreement, the Plan, or any rule or regulation adopted pursuant to the Plan, shall be final and conclusive. Notwithstanding the foregoing, any dispute relating to the vesting provisions in Section 2(b) of this Agreement shall be determined in accordance with Section 14 of the Employment Agreement. 11. Limitation of Employment Rights. The award of this Option does not entitle the Optionee to any benefit other than that granted under the Plan; any benefits granted under the Plan are not part of the Optionee's ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation. 12. Communications. Any communication or notice required or permitted to be given under this Agreement shall be in writing, and mailed by registered or certified mail or delivered in hand, if to the Company to its Stock Option Manager c/o Thermo Electron Corporation, 81 Wyman Street, Post Office Box 9046, Waltham, Massachusetts 02454-9046, and if to the Optionee, to the address last furnished by the Optionee to the Company. < 4 > EX-99.3 4 tmo8kex99-3execcomp022505.txt Exhibit 99.3 THERMO ELECTRON CORPORATION [NAME OF EQUITY INCENTIVE PLAN] RESTRICTED STOCK AGREEMENT Marijn E. Dekkers Name of Recipient XXXX Number of Restricted Shares of Common Stock Awarded Vesting Schedule for Restricted Shares Awarded: [# of Shares] [Vesting Date] XXXX Grant Date Thermo Electron Corporation (the "Company") has selected you to receive the restricted stock award identified above, subject to the provisions of the [Name of Equity Incentive Plan] (the "Plan") and the terms, conditions and restrictions contained in this agreement (the "Agreement"). Please confirm your acceptance of this Award, your agreement to other terms of the Plan and this Agreement, your receipt of a copy of the Plan, and your receipt of a memorandum regarding the tax treatment of awards of restricted stock, by signing both copies of this Agreement. You should keep one copy for your records and return the other copy promptly to the Stock Option Manager of the Company, c/o Thermo Electron Corporation, 81 Wyman Street, Post Office Box 9046, Waltham, Massachusetts 02454-9046. THERMO ELECTRON CORPORATION By: ----------------------- Accepted and Agreed: - ---------------------------- Marijn E. Dekkers 1. Preamble. This Agreement contains the terms and conditions of an award of shares of restricted stock of the Company (the "Restricted Shares") made to the Recipient identified on the first page of this Agreement pursuant to the Plan. Any consideration due to the Company on the issuance of the Restricted Shares has been deemed to be satisfied by past services rendered by the Recipient to the Company. For purposes of this Agreement, the defined terms used herein and not otherwise defined shall have the meaning set forth in that certain Amended and Restated Employment Agreement dated as of November 21, 2002 by and between the Recipient and the Company, as the same may be amended from time to time (the "Employment Agreement"). 2. Restrictions on Transfer. The Restricted Shares shall not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of, until and unless the Restricted Shares shall have vested as provided in Section 3 of this Agreement. 3. Vesting. The term "vest" as used in this Agreement means the lapsing of the restrictions that are described in this Agreement with respect to the Restricted Shares. The Restricted Shares shall vest in accordance with the schedule set forth on the first page of this Agreement, provided in each case that the Recipient is then, and since the Grant Date has continuously been, employed by the Company or its Affiliates. Notwithstanding the foregoing, the Recipient shall become vested in the Restricted Shares prior to the vesting dates set forth on the first page of this Agreement in the following circumstances: (a) Immediately prior to the consummation of a Change in Control, all Restricted Shares that have not previously been forfeited shall immediately vest; provided that the Recipient is then employed by the Company or its Affiliates. (b) In the event of the Recipient's death or Disability, all Restricted Shares that have not previously been forfeited shall immediately vest; provided that the Recipient was employed by the Company or its Affiliates immediately prior to the date of death or Disability. (c) In the event Recipient's employment is terminated by the Company without Cause or in the event the Recipient terminates employment for Good Reason (it being understood that in this context, a termination of employment by the Company without Cause or by the Recipient with Good Reason does not include a termination due to the Recipient's death or Disability or a termination with Cause or without Good Reason), all Restricted Shares that have not previously been forfeited shall immediately vest. 4. Forfeiture. In the event the Company terminates the Recipient's employment for Cause or the Recipient terminates his employment on his own initiative (it being understood that in this context, a termination of employment on the Recipient's own initiative does not include a termination due to his death or Disability or with Good Reason), all Restricted Shares that have not previously been forfeited on such date shall be immediately forfeited to the Company. 5. Dividends and Voting Rights. The Recipient shall be entitled to any and all dividends or other distributions paid with respect to the Restricted Shares which have not been forfeited or otherwise disposed of and shall be entitled to vote any such Restricted Shares; provided however, that any property (other than cash) distributed with respect to Restricted Shares, including without limitation a distribution of shares of the Company's stock by reason of a stock dividend, stock split or otherwise, or a distribution of other securities based on the ownership of < 2 > Restricted Shares, shall be subject to the restrictions of this Restricted Stock Agreement in the same manner and for so long as the Restricted Shares remain subject to such restrictions, and shall be promptly forfeited to the Company if and when the Restricted Shares are so forfeited. 6. Certificates. (a) Legended Certificates. The Recipient is executing and delivering to the Company blank stock powers to be used in the event of forfeiture. Any certificates representing unvested Restricted Shares shall be held by the Company, and any such certificate (and, to the extent determined by the Company, any other evidence of ownership of unvested Restricted Shares) shall contain the following legend: THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF AN EQUITY INCENTIVE PLAN OF THERMO ELECTRON CORPORATION AND A RESTRICTED STOCK AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THERMO ELECTRON CORPROATION. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF THERMO ELECTRON CORPORATION. (b) Book Entry. If unvested Restricted Shares are held in book entry form, the Recipient agrees that the Company may give stop transfer instructions to the depository to ensure compliance with the provisions of this Agreement. The Recipient hereby (i) acknowledges that the Restricted Shares may be held in book entry form on the books of the Company's depository (or another institution specified by the Company), and irrevocably authorizes the Company to take such actions as may be necessary or appropriate to effectuate a transfer of the record ownership of any such shares that are unvested and forfeited hereunder, (ii) agrees to deliver to the Company, as a precondition to the issuance of any certificate or certificates with respect to unvested Restricted Shares, one or more stock powers, endorsed in blank, with respect to such shares, and (iii) agrees to sign such other powers and take such other actions as the Company may reasonably request to accomplish the transfer or forfeiture of any unvested Restricted Shares that are forfeited hereunder. 7. Unrestricted Shares. As soon as practicable following the vesting of any Restricted Shares the Company shall cause a certificate or certificates covering such shares, without the legend contained in Section 6(a), to be issued and delivered to the Recipient, subject to the payment by the Recipient by cash or other means acceptable to the Company of any federal, state, local and other applicable taxes required to be withheld in connection with such vesting. The Recipient understands that once a certificate has been delivered to the Recipient in respect of Restricted Shares which have vested, the Recipient will be free to sell the shares of common stock evidenced by such certificate, subject to applicable requirements of federal and state securities laws. 8. Tax Withholding. The Recipient expressly acknowledges that the award or vesting of the Restricted Shares will give rise to "wages" subject to withholding. The Recipient expressly acknowledges and agrees that the Recipient's rights hereunder are subject to the Recipient's < 3 > paying to the Company in cash (or by such other means as may be acceptable to the Company in its discretion, including by the delivery of previously acquired shares of common stock of the Company or by having the Company hold back from the shares to be delivered, shares of the Company's common stock having a value calculated to satisfy the withholding requirement) all federal, state, local and any other applicable taxes required to be withheld in connection with such award or vesting. If the withholding obligation is not satisfied by the Recipient promptly, the Company may, without further consent from the Recipient, have the right to deduct such taxes from any payment of any kind otherwise due to the Recipient, including but not limited to, the hold back from the shares to be delivered pursuant to Section 7 of this Agreement of that number of shares calculated to satisfy all federal, state, local or other applicable taxes required to be withheld in connection with such award or vesting. 9. Administration. The Board of Directors of the Company, or the Compensation Committee or other committee designated in the Plan, shall have the authority to manage and control the operation and administration of this Agreement. Any interpretation of the Agreement by any of the entities specified in the preceding sentence and any decision made by any of them with respect to the Agreement is final and binding. Notwithstanding the foregoing, any dispute relating to the vesting provisions in Section 3 of this Agreement shall be determined in accordance with Section 14 of the Employment Agreement. 10. Plan Definitions. Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan, a copy of which has already been provided to the Recipient. 11. Amendment. This Agreement may be amended only by written agreement between the Recipient and the Company, without the consent of any other person. < 4 > EX-99.4 5 tmo8kex99-4execcomp022505.txt Exhibit 99.4 THERMO ELECTRON CORPORATION [NAME OF EQUITY INCENTIVE PLAN] RESTRICTED STOCK AGREEMENT JIM P. MANZI Name of Recipient XXXX Number of Restricted Shares of Common Stock Awarded Vesting Schedule for Restricted Shares Awarded: [# of Shares Vesting] [Vesting Date] XXXX Award Date Thermo Electron Corporation (the "Company") has selected you to receive the restricted stock award identified above, subject to the provisions of the [Name of Equity Incentive Plan] (the "Plan") and the terms, conditions and restrictions contained in this agreement (the "Agreement"). Please confirm your acceptance of this Award, and your agreement to the terms of the Plan and this Agreement, by signing both copies of this Agreement. You should keep one copy for your records and return the other copy promptly to the Stock Option Manager of the Company, c/o Thermo Electron Corporation, 81 Wyman Street, Post Office Box 9046, Waltham, Massachusetts 02454-9046. THERMO ELECTRON CORPORATION By: ----------------------- Accepted and Agreed: - ----------------------- Jim P. Manzi THERMO ELECTRON CORPORATION [NAME OF EQUITY INCENTIVE PLAN] Restricted Stock Agreement 1. Preamble. This Restricted Stock Agreement contains the terms and conditions of an award of shares of restricted stock of the Company (the "Restricted Shares") made to the Recipient identified on the first page of this Agreement pursuant to the Plan. 2. Restrictions on Transfer. The Restricted Shares shall not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of except as provided below and in the Plan, until and unless the Restricted Shares shall have vested as provided in Paragraph 3 below. 3. Vesting. The term "vest" as used in this Agreement means the lapsing of the restrictions that are described in this Agreement with respect to the Restricted Shares. The Restricted Shares shall vest in accordance with the schedule set forth on the first page of this Agreement, provided in each case that the Recipient is then, and since the Award Date has continuously been Chairman of the Board of the Company. Notwithstanding the foregoing, the Recipient shall become fully vested in the Restricted Shares prior to the vesting dates set forth on the first page of this Agreement in the following circumstances: (a) In the event of a Change of Control, as defined in the Plan, as the same may be amended from time to time and as in effect on the date of determination, all Restricted Shares that have not previously been forfeited shall immediately vest, provided that the Recipient is then Chairman of the Board of the Company. (b) In the event of the Recipient's death, all Restricted Shares that have not previously been forfeited shall immediately vest, provided that the Recipient was Chairman of the Board of the Company immediately prior to the date of death. 4. Forfeiture. In the event the Recipient ceases to be Chairman of the Board of the Company for any reason other than death, the Restricted Shares that have not previously vested shall be immediately forfeited to the Company. 5. Dividends and Voting Rights. The Recipient shall be entitled to any and all dividends or other distributions paid with respect to the Restricted Shares which have not been forfeited or otherwise disposed of and shall be entitled to vote any such Restricted Shares; provided however, that any property (other than cash) distributed with respect to Restricted Shares, including without limitation a distribution of shares of the Company's stock by reason of a stock dividend, stock split or otherwise, or a distribution of other securities based on the ownership of Restricted Shares, shall be subject to the restrictions of this Restricted Stock Agreement in the same manner and for so long as the Restricted Shares remain subject to such restrictions, and shall be promptly forfeited to the Company if and when the Restricted Shares are so forfeited. < 2 > 6. Certificates. (a) Legended Certificates. The Recipient is executing and delivering to the Company blank stock powers to be used in the event of forfeiture. Any certificates representing unvested Restricted Shares shall be held by the Company, and any such certificate (and, to the extent determined by the Company, any other evidence of ownership of unvested Restricted Shares) shall contain the following legend: THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF AN EQUITY INCENTIVE PLAN OF THERMO ELECTRON CORPORATION AND A RESTRICTED STOCK AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THERMO ELECTRON CORPORATION. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF THERMO ELECTRON CORPORATION. (b) Book Entry. If unvested Restricted Shares are held in book entry form, the Recipient agrees that the Company may give stop transfer instructions to the depository to ensure compliance with the provisions of this Agreement. The Recipient hereby (i) acknowledges that the Restricted Shares may be held in book entry form on the books of the Company's depository (or another institution specified by the Company), and irrevocably authorizes the Company to take such actions as may be necessary or appropriate to effectuate a transfer of the record ownership of any such shares that are unvested and forfeited hereunder, (ii) agrees to deliver to the Company, as a precondition to the issuance of any certificate or certificates with respect to unvested Restricted Shares, one or more stock powers, endorsed in blank, with respect to such shares, and (iii) agrees to sign such other powers and take such other actions as the Company may reasonably request to accomplish the transfer or forfeiture of any unvested Restricted Shares that are forfeited hereunder. 7. Unrestricted Shares. As soon as practicable following the vesting of any Restricted Shares the Company shall cause a certificate or certificates covering such shares, without the legend contained in Section 6(a), to be issued and delivered to the Recipient, subject to the payment by the Recipient by cash or other means acceptable to the Company of federal, state, local and other applicable taxes required to be withheld in connection with such vesting, if any. The Recipient understands that once a certificate has been delivered to the Recipient in respect of Restricted Shares which have vested, the Recipient will be free to sell the shares of common stock evidenced by such certificate, subject to applicable requirements of federal and state securities laws. < 3 > 8. Administration. The Board of Directors of the Company, or the Compensation Committee of the Board of Directors or other committee designated in the Plan or by the Board of Directors, shall have the authority to manage and control the operation and administration of this Agreement. Any interpretation of the Agreement by such body and any decision made by it with respect to the Agreement is final and binding. 9. Plan Definitions. Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan, a copy of which has already been provided to the Recipient. 10. Amendment. This Agreement may be amended only by written agreement between the Recipient and the Company, without the consent of any other person. < 4 > -----END PRIVACY-ENHANCED MESSAGE-----