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
January 3, 1998.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
Commission File Number 0-18095
THE RANDERS GROUP INCORPORATED
(Exact name of Registrant as specified in its charter)
Delaware 38-2788025
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
570 Seminole Road
Norton Shores, Michigan 49444
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (616) 733-0036
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 January 30, 1998
------------------------------ -------------------------------
Common Stock, $.0001 par value 14,115,682 actual
121,554,895 pro forma
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THE RANDERS GROUP INCORPORATED
Consolidated Balance Sheet
(Unaudited)
Assets
January 3, March 29,
(In thousands) 1998 1997
------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 4,682 $ 1,737
Accounts receivable, less allowances of $551
and $706 16,443 11,613
Unbilled contract costs and fees 9,194 8,113
Prepaid income taxes 1,541 1,431
Prepaid expenses 719 478
Due from parent company 1,426 -
------- -------
34,005 23,372
------- -------
Property, Plant, and Equipment, at Cost 15,511 11,863
Less: Accumulated depreciation and amortization 3,756 2,828
------- -------
11,755 9,035
------- -------
Other Assets 881 1,373
------- -------
Cost in Excess of Net Assets of Acquired Companies
(Note 2) 45,533 41,654
------- -------
$92,174 $75,434
======= =======
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THE RANDERS GROUP INCORPORATED
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
January 3, March 29,
(In thousands except share amounts) 1998 1997
-----------------------------------------------------------------------
Current Liabilities:
Notes payable $ 224 $ 648
Accounts payable 3,795 2,023
Accrued payroll and employee benefits 2,531 3,124
Accrued income taxes 1,954 78
Other accrued expenses 1,227 1,425
Due to parent company - 36
------- -------
9,731 7,334
------- -------
Deferred Income Taxes 1,096 1,096
------- -------
Other Deferred Items 895 1,013
------- -------
Long-term Obligations 1,973 1,260
------- -------
Shareholders' Investment:
Common stock, $.0001 par value, 30,000,000 shares
authorized; 121,554,895 pro forma shares issued
and outstanding (Notes 2 and 4) 12 -
Capital in excess of par value 76,137 -
Retained earnings 2,330 -
Parent company investment - 64,731
------- -------
78,479 64,731
------- -------
$92,174 $75,434
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
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THE RANDERS GROUP INCORPORATED
Consolidated Statement of Income
(Unaudited)
Three Months Ended
-------------------------
January 3, December 28,
(In thousands except per share amounts) 1998 1996
------------------------------------------------------------------------
Revenues $ 18,269 $ 15,346
-------- --------
Costs and Operating Expenses:
Cost of revenues 13,245 11,347
Selling, general, and administrative expenses 3,370 2,474
-------- --------
16,615 13,821
-------- --------
Operating Income 1,654 1,525
Interest Income 25 26
Interest Expense (44) (49)
-------- --------
Income Before Provision for Income Taxes 1,635 1,502
Provision for Income Taxes 729 710
-------- --------
Net Income $ 906 $ 792
======== ========
Basic and Diluted Earnings per Share (Note 3) $ .01 $ .01
======== ========
Weighted Average Shares (Note 3):
Basic 121,555 107,439
======== ========
Diluted 122,241 107,439
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
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THE RANDERS GROUP INCORPORATED
Consolidated Statement of Income
(Unaudited)
Nine Months Ended
-------------------------
January 3, December 28,
(In thousands except per share amounts) 1998 1996
------------------------------------------------------------------------
Revenues $ 53,344 $ 48,961
-------- --------
Costs and Operating Expenses:
Cost of revenues 39,083 36,423
Selling, general, and administrative expenses 9,264 7,121
-------- --------
48,347 43,544
-------- --------
Operating Income 4,997 5,417
Interest Income 70 89
Interest Expense (160) (139)
-------- --------
Income Before Provision for Income Taxes 4,907 5,367
Provision for Income Taxes 2,176 2,498
-------- --------
Net Income $ 2,731 $ 2,869
======== ========
Basic and Diluted Earnings per Share (Note 3) $ .02 $ .03
======== ========
Weighted Average Shares (Note 3):
Basic 119,435 107,439
======== ========
Diluted 119,705 107,452
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
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THE RANDERS GROUP INCORPORATED
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
------------------------
January 3, December 28,
(In thousands) 1998 1996
-----------------------------------------------------------------------
Operating Activities:
Net income $ 2,731 $ 2,869
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 2,033 1,390
Provision for losses on accounts
receivable 157 50
Other noncash (income) expenses (117) 3
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable (2,877) 396
Unbilled contract costs and fees (1,114) (507)
Other current assets (159) (62)
Accounts payable 1,232 (162)
Current liabilities (1,700) (2,122)
------- -------
Net cash provided by operating activities 186 1,855
------- -------
Investing Activities:
Acquisition, net of cash acquired (Note 2) (3,258) -
Purchases of property, plant, and equipment (1,308) (700)
Proceeds from sale of property, plant, and
equipment 18 106
Other (24) -
------- -------
Net cash used in investing activities (4,572) (594)
------- -------
Financing Activities:
Transfer from parent company to fund the
acquisition of Randers (Note 2) 3,258 -
Net transfer from parent company 4,250 1,835
Repayment of note payable (177) (644)
------- -------
Net cash provided by financing activities 7,331 1,191
------- -------
Increase in Cash and Cash Equivalents 2,945 2,452
Cash and Cash Equivalents at Beginning
of Period 1,737 794
------- -------
Cash and Cash Equivalents at End of Period $ 4,682 $ 3,246
======= =======
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THE RANDERS GROUP INCORPORATED
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Nine Months Ended
-------------------------
January 3, December 28,
(In thousands) 1998 1996
------------------------------------------------------------------------
Noncash Activities:
Fair value of assets of acquired company $ 6,790 $ -
Cash paid for acquired company (4,700) -
------- --------
Liabilities assumed of acquired company $ 2,090 $ -
======= ========
The accompanying notes are an integral part of these consolidated
financial statements.
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THE RANDERS GROUP INCORPORATED
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by The Randers Group Incorporated (Randers) 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 January 3, 1998, and the results of operations for the three- and
nine-month periods ended January 3, 1998, and December 28, 1996, and cash
flows for the nine-month periods ended January 3, 1998, and December 28,
1996. The Company's results of operations for the three-month periods
ended January 3, 1998, and December 28, 1996, include 14 weeks and 13
weeks, respectively, and its results of operations for the nine-month
periods ended January 3, 1998, and December 28, 1996, include 40 weeks
and 39 weeks, respectively. Interim results are not necessarily
indicative of results for a full year.
The historical results of Randers have been restated to solely
reflect the results of The Killam Group, Inc. (The Killam Group) for
periods prior to May 12, 1997. The Killam Group has been deemed the
"accounting acquiror" in a transaction described in Note 2.
The consolidated balance sheet presented as of March 29, 1997, has
been derived from the consolidated financial statements that have been
audited by The Killam Group'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 Killam Group. The consolidated
financial statements and notes included herein should be read in
conjunction with the financial statements and notes included in Randers'
Current Report on Form 8-K/A with respect to the acquisition of The
Killam Group on September 19, 1997, filed with the Securities and
Exchange Commission on October 8, 1997.
2. Acquisition and Basis of Accounting
On May 12, 1997, Thermo TerraTech Inc. (Thermo TerraTech) purchased a
controlling interest in Randers. Thermo TerraTech purchased 7,100,000
shares of Randers common stock from certain members of Randers'
management, and 420,000 shares from Thermo Power Corporation, an
affiliate of Thermo TerraTech, at a price of $0.625 per share, for an
aggregate cost of $4.7 million. Following these transactions, Thermo
TerraTech owns approximately 53.3% of Randers' outstanding common stock.
In addition, Thermo Electron Corporation, parent company to Thermo
TerraTech, owns approximately 8.9% of Randers' outstanding common stock.
In addition, in September 1997, Thermo TerraTech entered into a
definitive agreement to transfer to Randers, The Killam Group, its wholly
owned engineering and consulting businesses, in exchange for newly issued
shares of Randers' common stock. The exact price for these businesses
will be equal to the book value of the transferred businesses as of the
closing date of the transfer. The number of new shares of Randers' common
stock to be issued to Thermo TerraTech will equal such book value divided
by $0.625. Based on the unaudited book value of The Killam Group as of
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THE RANDERS GROUP INCORPORATED
2. Acquisition and Basis of Accounting (continued)
September 27, 1997, which was $67,150,000, Randers would issue
107,439,213 shares of its common stock to Thermo TerraTech. Upon such
issuance, Thermo TerraTech and Thermo Electron would own approximately
94.6% and 1.03% of Randers' outstanding common stock, respectively. The
transfer is subject to approval of the transaction by Randers'
shareholders and continued listing of Randers' common stock on the
American Stock Exchange following the transaction. However, because
Thermo TerraTech currently owns approximately 53.3% of Randers'
outstanding common stock, approval by Randers' shareholders is assured.
For purposes of computing weighted average shares, the 107,439,213 shares
of Randers' common stock to be issued in connection with the acquisition
of The Killam Group are considered to be outstanding for all periods
presented, and the 14,115,682 shares of Randers' common stock that were
outstanding as of May 12, 1997, the date on which Thermo TerraTech
acquired a majority interest in Randers, are considered outstanding as of
that date.
This acquisition has been accounted for in accordance with Staff
Accounting Bulletin Topic 2-A2, pursuant to which The Killam Group has
been treated as the "accounting acquiror" because Thermo TerraTech owns
the larger portion of the voting rights of Randers as a result of the
above mentioned transactions. Accordingly, the historical financial
information of Randers has been restated to solely reflect the results of
The Killam Group for periods prior to May 12, 1997, the date on which
Thermo TerraTech acquired a majority interest in Randers. Results from
May 12, 1997, have been restated to reflect the combined results of The
Killam Group and Randers. The aggregate cost of the acquisition of
Randers by Thermo TerraTech exceeded the estimated fair value of the
acquired net assets by $4,533,000, which is being amortized over 40
years. Allocation of the purchase price for this acquisition was based on
estimates of the fair value of the net assets acquired and is subject to
adjustment upon finalization of the purchase price allocation. To date,
no information has been gathered that would cause management to believe
that the final purchase price allocation will be materially different
from preliminary estimates.
Based on unaudited data, the following table presents selected
financial information for The Killam Group and Randers on a pro forma
basis, assuming the companies had been combined since the beginning of
fiscal 1997.
Three
Months Ended Nine Months Ended
------------ ----------------------
(In thousands except Dec. 28, Jan. 3, Dec. 28,
per share amounts) 1996 1998 1996
----------------------------------------------------------------------
Revenues $19,055 $54,481 $58,456
Net income 940 2,729 3,237
Basic and diluted earnings
per share .01 .02 .03
The pro forma results are not necessarily indicative of future
operations or the actual results that would have occurred had the
acquisition been made at the beginning of fiscal 1997.
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THE RANDERS GROUP INCORPORATED
3. Earnings per Share
During the quarter ended January 3, 1998, the Company adopted
Statement of Financial Accounting Standards No. 128, "Earnings per
Share." As a result, all previously reported earnings per share have been
restated; however, basic and diluted earnings per share equals the
Company's previously reported earnings per share for the periods
presented. Basic earnings per share have been computed by dividing net
income by the weighted average number of shares outstanding during the
year. Diluted earnings per share have been computed assuming the exercise
of stock options, as well as their related income tax effects. Basic and
diluted earnings per share were calculated as follows:
Three Months Ended Nine Months Ended
------------------- --------------------
(In thousands except Jan. 3, Dec. 28, Jan. 3, Dec. 28,
per share amounts) 1998 1996 1998 1996
------------------------------------------------------------------------
Basic
Net income $ 906 $ 792 $ 2,731 $ 2,869
-------- -------- -------- --------
Shares issuable in connection
with the acquisition of The
Killam Group 107,439 107,439 107,439 107,439
Randers' weighted average
shares outstanding from
May 12, 1997, date of
acquisition by Thermo
TerraTech 14,116 - 11,996 -
-------- -------- -------- --------
Pro forma weighted average
shares 121,555 107,439 119,435 107,439
-------- -------- -------- --------
Basic earnings per share $ .01 $ .01 $ .02 $ .03
======== ======== ======== ========
Diluted
Net income $ 906 $ 792 $ 2,731 $ 2,869
-------- -------- -------- --------
Pro forma weighted average
shares 121,555 107,439 119,435 107,439
Effect of stock options 686 - 270 13
-------- -------- -------- --------
Pro forma weighted average
shares, as adjusted 122,241 107,439 119,705 107,452
-------- -------- -------- --------
Diluted earnings per share $ .01 $ .01 $ .02 $ .03
======== ======== ======== ========
The computation of diluted earnings per share excludes the effect of
assuming the exercise of certain outstanding stock options because the
effect would be antidilutive. As of January 3, 1998, there were 212,000
shares of such options outstanding, with an exercise price $.875 per
share.
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THE RANDERS GROUP INCORPORATED
4. Subsequent Event
In January 1998, the Company's Board of Directors voted to effect a
1-for-5 reverse stock split. The proposal is subject to approval by the
shareholders of record as of April 1, 1998. A special shareholders'
meeting is expected to be called for April 30, 1998. Common shares
outstanding as of January 3, 1998, on a pro forma basis, reflecting the
reverse stock split, would have been 24,310,979 shares. The following
table presents other selected financial data on a pro forma basis to
reflect the reverse stock split.
Three Months Ended Nine Months Ended
------------------ -------------------
(In thousands except Jan. 3, Dec. 28, Jan. 3, Dec. 28,
per share amounts) 1998 1996 1998 1996
------------------------------------------------------------------------
Basic and diluted earnings
per share $ .04 $ .04 $ .11 $ .13
Weighted average shares:
Basic 24,311 21,488 23,887 21,488
Diluted 24,448 21,488 23,941 21,490
Financial results for prior periods will be restated subsequent to
effecting the reverse stock split.
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 (as defined
below) to differ materially from those indicated by such forward-looking
statements, including those detailed in Item 5 of the Quarterly Report on
Form 10-Q.
Overview
In May 1997, Thermo TerraTech Inc. (Thermo TerraTech) purchased a
controlling interest in The Randers Group Incorporated (Randers; Note 2),
a provider of design, engineering, project management, and construction
services for industrial clients in the manufacturing, pharmaceutical, and
chemical-processing industries. Subsequently, Thermo TerraTech entered
into a definitive agreement to transfer The Killam Group Inc. (The Killam
Group) to Randers in exchange for additional shares of Randers' common
stock. As a result of these transactions (more fully described in
Note 2), The Killam Group is deemed to be the "accounting acquiror", and
historical results for Randers have been restated to solely reflect the
operating results of The Killam Group for periods prior to May 12, 1997,
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THE RANDERS GROUP INCORPORATED
Overview (continued)
and to reflect the combined results of The Killam Group and Randers
(collectively, the Company) from May 12, 1997, the date on which Thermo
TerraTech became the majority owner of Randers. The Company's wholly
owned Killam Associates, Inc. (Killam Associates) subsidiary provides
environmental consulting and engineering services and specializes in
wastewater treatment and water resources management. The Company's wholly
owned Bettigole Andrews Clark & Killam Inc. (BACKillam) subsidiary
provides both private- and public-sector clients with a range of
consulting services that address transportation planning and design. In
November 1996, the Company acquired Carlan Consulting Group, Inc.
(Carlan), a provider of transportation and environmental consulting and
professional engineering and architectural services.
Results of Operations
Third Quarter Fiscal 1998 Compared With Third Quarter Fiscal 1997
Revenues increased to $18.3 million in the third quarter of fiscal
1998 from $15.3 million in the third quarter of fiscal 1997, primarily
due to the inclusion of $3.8 million of revenues from Carlan and Randers
(Note 2), acquired in November 1996 and May 1997, respectively, offset in
part by a decrease in revenues primarily due to the completion of a major
contract in fiscal 1997 at BACKillam.
The gross profit margin increased to 28% in the third quarter of
fiscal 1998 from 26% in the third quarter of fiscal 1997, primarily due
to a change in sales mix to higher-margin contracts at Killam Associates,
and the inclusion of higher-margin revenues from Randers, acquired in May
1997.
Selling, general, and administrative expenses as a percentage of
revenues increased to 18% in the third quarter of fiscal 1998 from 16% in
the third quarter of fiscal 1997, primarily due to the inclusion of
higher expenses as a percentage of revenues at Randers.
Interest expense remained relatively constant at $44,000 and $49,000
in the third quarter of fiscal 1998 and 1997, respectively.
The effective tax rates were 45% and 47% in the third quarter of
fiscal 1998 and 1997, respectively. The effective tax rates exceeded the
statutory federal income tax rate primarily due to the nondeductible
amortization of cost in excess of net assets of acquired companies and
the impact of state income taxes. The effective tax rate decreased in
fiscal 1998, primarily due to a lower statutory state tax rate at
Randers.
First Nine Months Fiscal 1998 Compared With First Nine Months Fiscal 1997
Revenues increased to $53.3 million in the first nine months of
fiscal 1998 from $49.0 million in the first nine months of fiscal 1997,
primarily due to the inclusion of $11.1 million of revenues from Carlan
and Randers (Note 2), acquired in November 1996 and May 1997,
12PAGE
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THE RANDERS GROUP INCORPORATED
First Nine Months Fiscal 1998 Compared With First Nine Months Fiscal 1997
(continued)
respectively, offset in part by a decrease in revenues due to the
completion of two major contracts in fiscal 1997 at Killam Associates and
BACKillam.
The gross profit margin increased to 27% in the first nine months of
fiscal 1998 from 26% in the first nine months of fiscal 1997, primarily
due to a change in sales mix to higher-margin contracts at Killam
Associates and the inclusion of higher-margin revenues from Randers.
These increases were offset in part by the inclusion of lower-margin
revenues from Carlan.
Selling, general, and administrative expenses as a percentage of
revenues increased to 17% in the first nine months of fiscal 1998 from
15% in the first nine months of 1997, primarily due to a decrease in
revenues at Killam Associates and BACKillam and, to a lesser extent,
increased marketing costs at Killam Associates and the inclusion of
higher expenses as a percentage of revenues at Randers.
Interest expense increased to $160,000 in the first nine months of
fiscal 1998 from $139,000 in the first nine months of 1997, primarily due
to the inclusion of interest expense associated with debt at Randers in
fiscal 1998, offset in part by lower average outstanding debt at the
Company's other businesses during fiscal 1998.
The effective tax rates were 44% and 47% in the first nine months of
fiscal 1998 and 1997, respectively. The effective tax rates exceeded the
statutory federal income tax rate and decreased between periods primarily
due to the reasons discussed in the results of operations for the third
quarter.
Liquidity and Capital Resources
Consolidated working capital was $24.3 million at January 3, 1998,
compared with $16.0 million at March 29, 1997. Included in working
capital were cash and cash equivalents of $4.7 million at January 3,
1998, compared with $1.7 million at March 29, 1997. During the first nine
months of fiscal 1998, $0.2 million of cash was provided by operating
activities. The Company funded increases of $2.9 million and $1.1 million
in accounts receivable and unbilled contract costs and fees,
respectively. The increase in accounts receivable is primarily related to
the timing of cash collections at Killam Associates and an increase of
approximately $1.3 million at BACKillam, which has subsequently been
collected. The increase in unbilled contract costs and fees is primarily
due to the timing of billings at Killam Associates.
The Company's investing activities in the first nine months of fiscal
1998 primarily consisted of an acquisition and capital additions. In May
1997, Thermo TerraTech purchased a controlling interest in Randers for
$4.7 million (Note 2). The Company also expended $1.3 million for
purchases of property, plant, and equipment in the first nine months of
13PAGE
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THE RANDERS GROUP INCORPORATED
Liquidity and Capital Resources (continued)
fiscal 1998. The Company expects to expend approximately $0.4 million on
purchases of property, plant, and equipment during the remainder of
fiscal 1998.
In the first nine months of fiscal 1998, the Company's financing
activities provided cash of $7.3 million, primarily due to transfers from
parent company.
The Company has no material commitments for the acquisition of
businesses or for capital expenditures. Such expenditures will largely be
affected by the number and size of the complementary businesses that can
be acquired or developed during the year. Thermo Electron and Thermo
TerraTech have expressed their willingness to lend funds to the Company
for major capital expenditures and potential acquisitions that may occur
in the foreseeable future, although no agreements exist assuring the
availability of such funds on acceptable terms, or at all.
PART II - OTHER INFORMATION
Item 5 - Other Information
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company wishes to caution
readers that the following important factors, among others, in some cases
have affected, and in the future could affect, the Company's actual
results and could cause its actual results in fiscal 1998 and beyond to
differ materially from those expressed in any forward-looking statements
made by, or on behalf of, the Company.
Dependence on Sales to Government Entities. A significant portion of
the Company's revenues is derived from municipalities, state governments,
and government utility authorities. Any decreases in purchases by these
entities, including, without limitation, decreases resulting from shifts
in priorities or overall budgeting limitations, could have a material
adverse effect on the Company's business, financial condition, and
results of operations. In addition, most of the Company's contracts
require the Company to perform specific services for a fixed fee.
Contracts with governmental entities often permit the purchaser to cancel
the agreement at any time. A significant overrun in the Company's
expenses or cancellation of a significant contract could also result in a
material adverse effect on the Company's business, financial condition,
and results of operations. The Company's contracts with governmental
entities are also subject to other risks, including contract suspensions;
protests by disappointed bidders of contract awards, which can result in
the re-opening of the bidding process; and changes in government policies
or regulations.
Competition. The markets for many of the Company's services are
regional and are characterized by intense competition from numerous local
competitors. Some of the Company's competitors have greater technical and
financial resources than those of the Company. As a result, they may be
14PAGE
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THE RANDERS GROUP INCORPORATED
Item 5 - Other Information (continued)
able to adapt more quickly to changes in customer requirements and new or
emerging technologies, or to devote greater resources to the promotion
and sale of their services than the Company. Competition could increase
if new companies enter the market or its existing competitors expand
their service lines. There can be no assurance that the Company's current
technology, technology under development, or ability to develop new
technologies will be sufficient to enable it to compete effectively with
its competitors.
Dependence on Environmental Regulation. Federal, state, and local
environmental laws govern most of the markets in which the Company
conducts business, as well as many of the Company's operations. The
markets for many of the Company's services, including water supply design
and inspection services, wastewater treatment facility design and
inspection services, solid and hazardous waste management services,
environmental testing services, natural resource management, and air
pollution testing and management services, were directly or indirectly
created by, and are dependent on, the existence and enforcement of those
laws. There can be no assurance that these laws and regulations will not
change in the future, requiring new technologies or stricter standards
with which the Company must comply. In addition, there can be no
assurance that these laws and regulations will not be made more lenient
in the future, thereby reducing the size of the markets addressed by the
Company. Any such change in such federal, state, and local environmental
laws and regulations may have a material adverse effect on the Company's
business.
Potential Environmental and Regulatory Liability. The Company's
operations are subject to comprehensive laws and regulations related to
the protection of the environment. Among other things, these laws and
regulations impose requirements to control air, soil, and water
pollution, and regulate health, safety, zoning, land use, and the
handling and transportation of hazardous and nonhazardous materials. Such
laws and regulations also impose liability for remediation and cleanup of
environmental contamination, both on-site and off-site, resulting from
past and present operations. These requirements may also be imposed as
conditions of operating permits or licenses that are subject to renewal,
modification, or revocation. Existing laws and regulations, and new laws
and regulations, may require the Company to modify, supplement, replace,
or curtail its operating methods, facilities, or equipment at costs which
may be substantial without any corresponding increase in revenue. The
Company's water, wastewater, and hazardous waste-treatment management
services operations may expose the Company to liabilities to clients and
third parties. In addition, the Company is also potentially subject to
monetary fines, penalties, remediation, cleanup or stop orders,
injunctions, or orders to cease or suspend certain of its practices. The
outcome of any proceedings and associated costs and expenses could have a
material adverse impact on the Company's business. In addition, the
Company is subject to numerous laws and regulations related to the
protection of human health and safety. Such laws and regulations may pose
liability on the Company for exposure of its employees to radiation or
other hazardous contamination.
15PAGE
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THE RANDERS GROUP INCORPORATED
Item 5 - Other Information (continued)
The Company endeavors to operate its business to minimize its
exposure to environmental and other regulatory liabilities. Although no
claims giving rise to such liabilities have been asserted by the
Company's customers or employees to date, there can be no assurance that
such claims cannot or will not be asserted against the Company.
Potential Professional Liability. The Company's business exposes it
to potential liability for the negligent performance of its services and,
as such, the Company may face substantial liability to clients and third
parties for damages resulting from faulty designs or other professional
services. The Company currently maintains professional errors and
omissions insurance, but there can be no assurance that this insurance
will provide sufficient coverage in the event of a claim, that the
Company will be able to maintain such coverage on acceptable terms, if at
all, or that a professional liability claim would not result in a
material adverse effect on the Company's business, financial condition,
and results of operations.
Seasonal Influences. A majority of the Company's businesses
experience seasonal fluctuations. Site investigation work and certain
environmental testing services may decline in winter months as a result
of severe weather conditions.
Risks Associates with Acquisition Strategy. The Company's strategy
includes the acquisition of businesses that complement or augment the
Company's existing services. Promising acquisitions are difficult to
identify and complete for a number of reasons, including competition
among prospective buyers and the need for regulatory approvals. Any
acquisitions completed by the Company may be made at substantial premiums
over the fair value of the net assets of the acquired companies. There
can be no assurance that the Company will be able to complete future
acquisitions or that the Company will be able to successfully integrate
any acquired businesses. In order to finance such acquisitions, it may be
necessary for the Company to raise additional funds through public or
private financings. Any equity or debt financing, if available at all,
may be on terms that are not favorable to the Company and, in the case of
equity financing, may result in dilution to the Company's shareholders.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
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THE RANDERS GROUP INCORPORATED
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 5th day of
February 1998.
THE RANDERS GROUP INCORPORATED
Paul F. Kelleher
-------------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
-------------------------------
John N. Hatsopoulos
Chief Financial Officer and
Senior Vice President
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THE RANDERS GROUP INCORPORATED
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.1 Thermo Electron Corporate Charter as amended and restated
effective January 3, 1993 (filed as Exhibit 10.1 to Thermo
Electron Corporation's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference).
10.2 Corporate Services Agreement between Thermo Electron
Corporation and the Company dated as of November 19, 1997.
10.3 Tax Allocation Agreement between Thermo TerraTech Inc. and
the Company dated as of November 19, 1997.
10.4 Master Guarantee Reimbursement and Loan Agreement between
Thermo Electron Corporation and the Company dated as of
November 19, 1997.
10.5 Master Guarantee Reimbursement and Loan Agreement between
Thermo TerraTech Inc. and the Company dated as of November
19, 1997.
10.6 Master Repurchase Agreement between Thermo Electron
Corporation and the Company dated as of November 19, 1997.
10.7 Equity Incentive Plan.
10.8 Deferred Compensation Plan for Directors.
10.9 Indemnification Agreement for Directors and Officers.
27 Financial Data Schedule.
EXHIBIT 10.2
CORPORATE SERVICES AGREEMENT
THIS is an AGREEMENT dated as of the 19th day of November,
1997 between Thermo Electron Corporation, a Delaware corporation
("Thermo"), and The Randers Group Incorporated ("Subsidiary"), a
Delaware corporation.
Preliminary Statement
Subsidiary desires to obtain administrative and other
services from Thermo and Thermo is willing to furnish or make
such services available to Subsidiary.
By this Agreement, Thermo and Subsidiary desire to set forth
the basis for Thermo's providing services of the type referred to
herein.
Agreements
IT IS MUTUALLY agreed by the parties hereto as follows:
1. Services
1.1 Beginning on the date of this Agreement, Thermo,
through its corporate staff, will provide or otherwise make
available to Subsidiary certain general corporate services,
including but not limited to accounting, tax, corporate
communications, legal, financial and other administrative staff
functions, and arrange for administration of insurance and
employee benefit programs. The services will include the
following:
(a) Accounting and securities compliance related services.
Maintenance of corporate records, assistance, if and when
necessary, in preparation of Securities and Exchange Commission
filings, including without limitation registration statements,
Forms 10-K, 10-Q and 8-K, assistance in the preparation of
Proxies and Proxy Statements and the solicitation of Proxies, and
assistance in the preparation of the Annual and Quarterly Reports
to Stockholders, maintenance of internal audit support services
and review of compliance with financial and accounting
procedures.
(b) Tax related services. Preparation of Federal tax
returns, preparation of state and local tax returns (including
income tax returns), tax research and planning and assistance on
tax audits (Federal, state and local).
(c) Insurance and employee benefit related services.
Arranging for liability, property and casualty, and other normal
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business insurance coverage. Support for product, worker safety
and environmental programs (Subsidiary acknowledges that
principal responsibility for compliance rests with the
Subsidiary). Administration of Subsidiary's employee
participation in employee benefit plans sponsored by Thermo and
insurance programs such as the following: 401(k) plan, group
medical insurance, group life insurance, employee stock purchase
plan and various stock options plans. Filing of all required
reports under ERISA for employee benefit plans sponsored by
Thermo.
(d) Corporate record keeping services. Maintenance of
corporate records, including without limitation, maintenance of
minutes of meetings of the Boards of Directors and Stockholders,
supervision of transfer agent and registration functions,
coordination of stock repurchase programs, and tracking of stock
issuances and reserved shares.
(e) Services in addition to those enumerated in subsections
1.1(a) through 1.1(d) above including, but not limited to,
routine legal and other administrative activities, Corporate
information and treasury and other financial services as
reasonably requested by Subsidiary.
1.2 For performing general services of the types described
above in Paragraph 1.1, Thermo will initially charge Subsidiary
an annual fixed fee equal to 1.0% of the gross revenues of
Subsidiary for the fiscal year in which such services are
performed (such amount to be prorated on a daily basis for any
partial year), which fee is intended to compensate Thermo for
Subsidiary's pro rata share of the aggregate costs actually
incurred by Thermo in connection with the provision of such
services to all recipients thereof. The fee set forth in the
preceding sentence may be adjusted from time to time by mutual
agreement of Thermo and Subsidiary.
1.3 In addition to the foregoing services, certain specific
services are made available to Subsidiary by Thermo on an
as-requested basis. These may include, but are not limited to,
services specifically requested by Subsidiary or services which,
in Thermo's judgment, are not routine administrative services or
create unusual burdens or demands on Thermo's resources, such as
litigation support, acquisition and offering support services
(including legal services), corporate development, tax audit
support or public or investor relations services other than
routine shareholder communications. Thermo will charge
Subsidiary the costs actually incurred (including overhead and
general administrative expenses) for such services that are
requested by Subsidiary and supplied by Thermo.
1.4 The charges for services pursuant to Subsections 1.2
and 1.3 above will be determined and payable no less frequently
than on a quarterly basis. The charges will be due when billed
and shall be paid no later than 30 days from the date of billing.
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1.5 When services of the type described above in this
Section 1 are provided by outside providers to Subsidiary or, in
connection with the provision of such services out-of-pocket
costs are incurred such as travel, the cost thereof will be paid
by Subsidiary. To the extent that Subsidiary is billed by the
provider directly, Subsidiary shall pay the bill directly. If
Thermo is billed for such services, Thermo may pay the bill and
charge Subsidiary the amount of the bill or forward the bill to
Subsidiary for payment by Subsidiary.
2. Subsidiary's Directors and Officers. Nothing contained
herein will be construed to relieve the directors or officers of
Subsidiary from the performance of their respective duties or to
limit the exercise of their powers in accordance with the charter
or By-Laws of Subsidiary or in accordance with any applicable
statute or regulation.
3. Liabilities. In furnishing Subsidiary with management
advice and other services as herein provided, neither Thermo nor
any of its officers, directors or agents shall be liable to
Subsidiary or its creditors or shareholders for errors of
judgment or for anything except willful malfeasance, bad faith or
gross negligence in the performance of their duties or reckless
disregard of their obligations and duties under the terms of this
Agreement. The provisions of this Agreement are for the sole
benefit of Thermo and Subsidiary and will not, except to the
extent otherwise expressly stated herein, inure to the benefit of
any third party.
4. Term.
(a) Term. The initial term of this Agreement shall begin
on the date of this Agreement and continue through the end of the
current fiscal year. This Agreement shall automatically renew at
the end of the initial term for successive one-year terms until
terminated in accordance with Subsection (b) below.
(b) Termination. This Agreement may be terminated by
Subsidiary at any time on thirty days prior notice to Thermo. In
addition, this Agreement shall automatically terminate without
any further action by either party on the date the Subsidiary
ceases to be a member of the Thermo Group or a participant in the
Thermo Electron Corporate Charter.
(c) Termination Fee. In the event of a termination of this
Agreement, Subsidiary shall pay to Thermo its pro rata fee
pursuant to Section 1.2 for the year in which the termination
takes effect plus a termination fee equal to the fee payable
under Section 1.2 for the most recent nine consecutive months.
(d) Post-Termination Services. Following a termination of
this Agreement, corporate administrative services of the kind
provided under the Agreement may continue to be provided to
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Subsidiary on an as-requested basis by the Subsidiary or as
required in the event it is not practicable for the Subsidiary to
provide such services or it is otherwise unable to identify
another source to provide such services (as would be the case of
administration of employee benefit plans and insurance programs
sponsored by Thermo and in which Subsidiary's employees
participate) or as otherwise required by Thermo acting in its
capacity as majority stockholder of Subsidiary. In the event
such services are provided by Thermo to Subsidiary, Subsidiary
shall be charged by Thermo a fee equal to the market rate for
comparable services charged by third-party vendors. Such fee
will be charged monthly and payable by Subsidiary within thirty
days. The obligations of Subsidiary set forth in this Section
4(d) shall survive the termination of this Agreement.
5. Status. Thermo shall be deemed to be an independent
contractor and, except as expressly provided or authorized in
this Agreement, shall have no authority to act for or represent
Subsidiary.
6. Other Activities of Thermo. Subsidiary recognizes that
Thermo now renders and may continue to render management and
other services to other companies that may or may not have
policies and conduct activities similar to those of Subsidiary.
Thermo shall be free to render such advice and other services,
and Subsidiary hereby consents thereto. Thermo shall not be
required to devote full time and attention to the performance of
its duties under this Agreement, but shall devote only so much of
its time and attention as it deems reasonable or necessary to
perform the services required hereunder.
7. Notices. All notices, billings, requests, demands,
approvals, consents, and other communications which are required
or may be given under this Agreement shall be in writing and will
be deemed to have been duly given if delivered personally or sent
by registered or certified mail, return receipt requested,
postage prepaid to the parties at their respective addresses set
forth below:
If to Subsidiary: If to Thermo:
The Randers Group Thermo Electron
Incorporated Corporation
570 Seminole Road 81 Wyman Street
Muskegon, Michigan 49444 Waltham, Massachusetts
02254
Attention: President Attention: Chief
Executive Officer
8. No Assignment. This Agreement shall not be assignable
except with the prior written consent of the other party to this
Agreement.
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9. Applicable Law. This Agreement shall be governed by
and construed under the laws of the Commonwealth of Massachusetts
applicable to contracts made and to be performed therein.
10. Paragraph Titles. The paragraph titles used in this
Agreement are for convenience of reference only and will not be
considered in the interpretation or construction of any of the
provisions thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as a sealed instrument by their duly authorized
officers as of the date first above written.
THERMO ELECTRON CORPORATION THE RANDERS GROUP
INCORPORATED
By: /s/ Melissa F. Riordan By: /s/ Emil C. Herkert
Title: Treasurer Title: President and Chief
Executive Officer
EXHIBIT 10.3
TAX ALLOCATION AGREEMENT
THIS AGREEMENT is made as of the 19th day of November, 1997
between Thermo TerraTech Inc., a Delaware corporation ("TTT"),
and The Randers Group Incorporated, a Delaware corporation
("Randers" - The term "Randers" shall refer to Randers and those
of its subsidiaries that are at least 80% owned by The Randers
Group Incorporated).
Preliminary Statement
TTT is the parent of an affiliated group of corporations
(including Randers) within the meaning of Section 1504(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
TTT owns or may in the future own more than 80% of the
issued and outstanding shares of voting common stock of Randers,
the only class of stock that Randers is authorized to issue.
Randers is required to file consolidated federal income tax
returns with TTT.
TTT is the common parent of an affiliated group of
corporations and Randers recognizes that any one of them that
sustains a net operating loss or otherwise generates beneficial
tax attributes for a taxable period may be deprived of such
benefits when offset in that or other periods against income or
tax liabilities of the others.
By this Agreement, the parties desire to set forth the
understanding they have reached with respect to the filing of the
consolidated United States federal income tax returns. Foreign
tax returns are not subject to this Agreement.
Agreements
IT IS MUTUALLY agreed by the parties hereto as follows:
1. Definitions and Construction.
1.1. The Term "TTT Group" means the group of
corporations of which TTT is common parent and with which TTT
files an affiliated consolidated federal income tax return,
excluding Randers and subsidiaries of Randers that may exist now
or in the future. For purposes of this Agreement, the TTT Group
shall be treated as a single corporate entity. The TTT Group and
Randers and its subsidiaries, respectively, are sometimes herein
referred to collectively as the "Two Companies" or the
"Companies." This Agreement anticipates that TTT will set aside
and retain certain sums calculated as provided herein. All
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reference to TTT paying sums to itself pursuant to this Agreement
shall be satisfied by TTT setting aside sums in respect of the
obligations established under this Agreement.
1.2. The paragraph titles used herein are for
convenience of reference only and will not be considered in the
interpretation or construction of any of the provisions hereof.
Words may be construed in the singular or the plural as the
context requires.
2. Tax Returns.
2.1. Federal Tax Returns. TTT as the common parent
will prepare and file or cause to be prepared and filed federal
and state income tax returns on a consolidated basis, for the TTT
Group and Randers and its subsidiaries for all fiscal periods as
to which a consolidated return is appropriate in accordance with
the terms of this Agreement.
2.2. State Tax Returns. TTT as the common parent will
prepare and file or cause to be filed state income tax returns on
a combined, consolidated, unitary, or other method that TTT
believes will result in a lower overall tax liability to the Two
Companies. Randers will reimburse TTT for its portion of the
tax. Such reimbursement will be the tax Randers would have paid
on a separate return basis, but only if it was required to file a
return in that state.
3. Time of Payment of Federal Obligations to TTT. The
obligations of the Companies for Federal income tax payments will
be determined and paid as follows:
(a) Not later than the 15th day after the end of the
fourth, sixth, ninth and twelfth months of each consolidated
taxable year of TTT, TTT will make a reasonable determination
(consistent with the provisions of Section 6655 of the Code) of
the separate federal income tax liability that each Company would
be required to pay as estimated payments on a separate return
basis for that period. Each Company shall pay to TTT the amount
of such liability within ten days.
(b) After the end of TTT's fourth accounting quarter
and before the 15th day of the third month thereafter, each
Company will promptly pay to TTT the entire amounts estimated to
be due and payable under such Company's federal income tax return
as if filed on a separate return basis, less all amounts
previously paid with respect to that year pursuant to
subparagraph (a) of this Paragraph 3.
(c) If upon the filing of the consolidated income tax
return, a revised calculation is made in the manner set forth in
subparagraph (b) of this Paragraph 3, and it is determined that
either Company has paid to TTT with respect to the consolidated
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taxable year an amount greater than that required by Paragraph
3(b), then that excess will be promptly paid by TTT to that
Company.
4. Tax Obligations of TTT. TTT will pay the consolidated
tax liabilities of the Companies arising from filing a
consolidated federal income tax return.
5. Payment of Funds by TTT. After the end of TTT's fourth
quarter and before the 15th day of the third month thereafter, if
in any year Randers incurs a loss, TTT shall pay to Randers a sum
equal to the amount of benefit realized by TTT that is
attributable to the loss incurred by Randers.
6. Changes in Prior Year's Tax Liabilities. In the event
that the consolidated tax liability or the separate tax liability
referred to in Paragraphs 3 and 4 hereof for any year for which a
consolidated tax return for the two Companies was filed is or
would be increased or decreased by reason of filing an amended
return or returns (including carry-back claims), or by reason of
the examination of the returns by the Internal Revenue Service,
the amounts due TTT for payment of taxes under Paragraph 3
hereof, and the amount to be paid to TTT for allocation to
Randers under Paragraph 4 hereof for each such year will be
recomputed by TTT to reflect the adjustments to taxable income
and tax credits for the taxable year and interest or penalties,
if any. In accordance with those recomputations, additional sums
will be paid by the Companies to TTT or paid by TTT to the
Companies regardless of whether a member has become a Departing
Member (as defined in Paragraph 8 hereof) subsequent to the
taxable year of recomputation.
7. New Members. The Companies agree that if, subsequent
to the execution of this Agreement, TTT becomes the parent, as
that term is used in Section 1504 of the Code, of one or more
subsidiary corporations, in addition to Randers, then each newly
acquired subsidiary corporation may become a separate party to
this Agreement by consenting in writing to be bound by its
provisions, effective immediately upon its delivery to TTT, but
the income, deductions and tax credits of the newly acquired
subsidiary corporations will first be included in the
consolidated federal income tax return as required by the Code.
8. Departing Members.
8.1. The term "Departing Member," as used herein, will
mean a Company that is no longer permitted under the Code to be
included in the consolidated federal income tax return.
8.2. In applying this Agreement to a Departing Member
for the final taxable year in which its income, deductions, and
tax credits are required to be included in the consolidated
federal income tax return: (i) the amount required to be paid by
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a Departing Member under the provisions of Paragraph 3 hereof and
(ii) the amount that the Departing Member is entitled to receive
under the provisions of Paragraph 4 hereof, will be determined by
taking into account the income, deductions and tax credits of the
Departing Member only for the fractional part of such year as the
Departing Member was a member of the consolidated group and
included in the consolidated federal income tax return.
8.3. After the filing of the consolidated federal
income tax return for the last taxable year that the Departing
Member was included therein, the Departing Member will be
informed of the amount of consolidated carry-overs as of the end
of the taxable year or period which are attributable to the
Departing Member, as provided by Treasury Regulations Section
1.1502-79 or otherwise, including the agreement of the parties.
9. Determination of Sums Due from and Payable to Members.
TTT will determine the sums due from and payable to the Companies
under the provisions of this Agreement (including the
determination for purposes of Paragraph 6 hereof). The Companies
agree to provide TTT with such information as may reasonably be
necessary to make these determinations. Issues arising in the
course of the determinations that are not expressly provided for
in this Agreement will be resolved in an equitable manner.
10. Tax Controversies. If a consolidated federal income
tax return for any taxable year during which this Agreement is in
effect is examined by the Internal Revenue Service, the
examination, as well as any other matters relating to that tax
return, including any tax litigation, will be handled solely by
TTT. Randers will cooperate with TTT and to this end will
execute protests, petitions, and any other documents as TTT
determines to be necessary or appropriate. The cost and expense
of TTT's handling of a tax controversy, including legal and
accounting fees, will be allocated to and paid by the Company to
whom the tax controversy relates. If the tax controversy relates
to both Companies, the cost and expense will be allocated between
the Companies in the proportion that each Company's potential
additional tax liability bears to the total potential additional
tax liability of both Companies (determined in accordance with
Paragraph 6 hereto and assuming that the tax controversy is
resolved in favor of the Internal Revenue Service) for the
taxable year on issue. If the tax controversy encompasses more
than one taxable year, TTT will first allocate the cost and
expense to each taxable year in the proportion that the potential
additional tax liability for each taxable year bears to the total
potential additional tax liability for the taxable years in
issue.
11. Effective Date. This Agreement shall be effective
beginning as of the date of this Agreement, and will continue on
a year-to-year basis thereafter with respect to Randers for so
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long as Randers is permitted to file a consolidated federal
income tax return with TTT.
12. State Taxes. The two Companies will jointly file any
state tax return on a combined, consolidated, unitary, or other
method that TTT determines results in a lower overall tax
liability to the Two Companies. In the event that said state tax
returns shall be filed, the provisions of sections 1 through 11
hereof shall apply, mutatis mutandis (the necessary changes being
made) to the allocation, preparation, filing and payment related
to such state taxes and tax returns.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the date first above written.
THERMO TERRATECH INC. THE RANDERS GROUP
INCORPORATED
By: /s/ Melissa F. Riordan By: /s/ Emil C. Herkert
Title: Treasurer Title: President and
Chief Executive
Officer
EXHIBIT 10.4
MASTER GUARANTEE REIMBURSEMENT AND LOAN AGREEMENT
This AGREEMENT is entered into as of the 19th day of
November, 1997, by and among Thermo Electron Corporation (the
"Parent") and those of its subsidiaries that join in this
Agreement by executing the signature page hereto (the "Majority
Owned Subsidiaries").
WITNESSETH:
WHEREAS, the Majority Owned Subsidiaries and their
wholly-owned subsidiaries wish to enter into various financial
transactions, such as convertible or nonconvertible debt, loans,
and 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 the Parent ("Credit Support Obligations");
WHEREAS, the Majority Owned Subsidiaries and the Parent
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 the Parent (a "Parent Guarantee") or
without obtaining Credit Support Obligations from other Majority
Owned Subsidiaries;
WHEREAS, the Majority Owned Subsidiaries and their
wholly-owned subsidiaries may borrow funds from the Parent, and
the Parent may loan funds or provide credit to the Majority Owned
Subsidiaries and their wholly-owned subsidiaries, on a short-term
and unsecured basis;
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, the Parent 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, the Parent is willing to consider continuing to
issue Parent Guarantees and providing credit, and the Majority
Owned Subsidiaries are willing to consider continuing to provide
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Credit Support Obligations and to borrow funds, 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. If the Parent provides a Parent Guarantee of an Underlying
Obligation, and the beneficiary(ies) of the Parent Guarantee
enforce the Parent Guarantee, or the Parent 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 the
Parent from any liability, cost, expense or damage
(including reasonable attorneys' fees) suffered by the
Parent 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 the Parent (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 the Parent from any remaining liability, cost,
expense or damage (including reasonable attorneys' fees)
suffered by the Parent 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 the Parent, 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 the Parent 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.
2. For purposes of this Agreement, the term "guarantee" shall
include not only a formal guarantee of an obligation, but
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also any other arrangement where the Parent 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 the Parent, 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 the Parent 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.
3. Promptly after the Parent receives notice that a beneficiary
of a Parent Guarantee is seeking to enforce such Parent
Guarantee, the Parent 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, the Parent will not perform under the
relevant Parent Guarantee unless and until, in the Parent's
reasonable judgment, the Parent 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
the Parent 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 the
Parent. The Parent shall have the right, at its own
expense, to contest the claim of such beneficiary. If the
Parent or the subsidiary of the Parent 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 the Parent or the
subsidiary of the Parent 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
the Parent's obligation to promptly indemnify the Majority
Owned Subsidiary or its wholly-owned subsidiary, as
applicable, hereunder.
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4. Upon the request of a Majority Owned Subsidiary, the Parent
may make loans and advances to the Majority Owned Subsidiary
or its wholly-owned subsidiaries on a short-term, revolving
credit basis, from time to time in such amounts as mutually
determined by the Parent and the Majority Owned Subsidiary.
The aggregate principal amount of such loans and advances
shall be reflected on the books and records of the Majority
Owned Subsidiary (or wholly-owned subsidiary, as applicable)
and the Parent. All such loans and advances shall be on an
unsecured basis unless specifically provided otherwise in
loan documents executed at that time. The Majority Owned
Subsidiary or its wholly-owned subsidiaries, as applicable,
shall pay interest on the aggregate unpaid principal amount
of such loans from time to time outstanding at a rate
("Interest Rate") equal to the rate of the Commercial Paper
Composite Rate for 90-day maturities as reported by Merrill
Lynch Capital Markets, as an average of the last five
business days of such Majority Owned Subsidiary's latest
fiscal quarter then ended, plus twenty-five (25) basis
points. The Interest Rate shall be adjusted on the first
business day of each fiscal quarter of such Majority Owned
Subsidiary pursuant to the Interest Rate formula contained
in the preceding sentence and shall be in effect for the
entirety of such fiscal quarter. Interest shall be computed
on a 360-day basis. The aggregate principal amount
outstanding and accrued interest thereon shall be payable on
demand. The principal and accrued interest may be paid by
the Majority Owned Subsidiaries or their wholly-owned
subsidiaries, as applicable, 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. Principal and interest shall be payable in
lawful money of the United States of America, in immediately
available funds, at the principal office of the Parent or at
such other place as the Parent may designate from time to
time in writing to the Majority Owned Subsidiary. The
unpaid principal amount of any such borrowings, and accrued
interest thereon, shall become immediately due and payable,
without demand, upon the failure of the Majority Owned
Subsidiary or its wholly-owned subsidiary, as applicable, to
pay its debts as they become due, the insolvency of the
Majority Owned Subsidiary or its wholly-owned subsidiary, as
applicable, the filing by or against the Majority Owned
Subsidiary or its wholly-owned subsidiary, as applicable, 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 Majority Owned
Subsidiary or its wholly-owned subsidiary, as applicable, 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 property of the Majority Owned Subsidiary
or its wholly-owned subsidiary, as applicable. In case any
payments of principal and interest shall not be paid when
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due, the Majority Owned Subsidiary or its wholly-owned
subsidiary, as applicable, further promises to pay all cost
of collection, including reasonable attorneys' fees.
5. If the Parent 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 the Parent thereunder. Such
guaranty shall be enforced only after the Parent, in its
reasonable judgment, determines that the Second Tier
Majority Owned Subsidiary is unable to fully perform its
obligations under the Credit Extension. If the Parent
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 the Parent 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 the Parent hereunder. Such
guaranty by the First Tier Majority Owned Subsidiary shall
be enforced only after the Parent, in its reasonable
judgment, determines that the Second Tier Majority Owned
Subsidiary is unable to fully perform its guaranty
obligation hereunder.
6. All payments required to be made by a Majority Owned
Subsidiary or its wholly-owned subsidiaries, as applicable,
shall be made within two days after receipt of notice from
the Parent. All payments required to be made by the Parent
shall be made within two days after receipt of notice from
the Majority Owned Subsidiary.
7. 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.
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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/ Melissa F. Riordan
Title: Treasurer
THE RANDERS GROUP INCORPORATED
By: /s/ Emil C. Herkert
Title: President and Chief
Executive Officer
EXHIBIT 10.5
MASTER GUARANTEE REIMBURSEMENT AND LOAN AGREEMENT
This AGREEMENT is entered into as of the 19th day of
November, 1997, by and among Thermo TerraTech Inc. (the "Parent")
and those of its subsidiaries that join in this Agreement by
executing the signature page hereto (the "Majority Owned
Subsidiaries").
WITNESSETH:
WHEREAS, the Majority Owned Subsidiaries and their
wholly-owned subsidiaries wish to enter into various financial
transactions, such as convertible or nonconvertible debt, loans,
and 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 the Parent ("Credit Support Obligations");
WHEREAS, the Majority Owned Subsidiaries and the Parent
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 the Parent (a "Parent Guarantee") or
without obtaining Credit Support Obligations from other Majority
Owned Subsidiaries;
WHEREAS, the Majority Owned Subsidiaries and their
wholly-owned subsidiaries may borrow funds from the Parent, and
the Parent may loan funds or provide credit to the Majority Owned
Subsidiaries and their wholly-owned subsidiaries, on a short-term
and unsecured basis; and
WHEREAS, the Parent 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 and to borrow funds, 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. If the Parent provides a Parent Guarantee of an Underlying
Obligation, and the beneficiary(ies) of the Parent Guarantee
enforce the Parent Guarantee, or the Parent 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 the
Parent from any liability, cost, expense or damage
(including reasonable attorneys' fees) suffered by the
Parent as a result of the Parent Guarantee. If a Majority
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Owned Subsidiary or a wholly-owned subsidiary thereof
provides a Credit Support Obligation for any subsidiary of
the Parent, 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 the Parent 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.
2. For purposes of this Agreement, the term "guarantee" shall
include not only a formal guarantee of an obligation, but
also any other arrangement where the Parent 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 the Parent, 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 the Parent 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.
3. Promptly after the Parent receives notice that a beneficiary
of a Parent Guarantee is seeking to enforce such Parent
Guarantee, the Parent 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, the Parent will not perform under the
relevant Parent Guarantee unless and until, in the Parent's
reasonable judgment, the Parent 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
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the Parent 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 the
Parent. The Parent shall have the right, at its own
expense, to contest the claim of such beneficiary. If the
Parent or the subsidiary of the Parent 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 the Parent or the
subsidiary of the Parent 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
the Parent's obligation to promptly indemnify the Majority
Owned Subsidiary or its wholly-owned subsidiary, as
applicable, hereunder.
4. Upon the request of a Majority Owned Subsidiary, the Parent
may make loans and advances to the Majority Owned Subsidiary
or its wholly-owned subsidiaries on a short-term, revolving
credit basis, from time to time in such amounts as mutually
determined by the Parent and the Majority Owned Subsidiary.
The aggregate principal amount of such loans and advances
shall be reflected on the books and records of the Majority
Owned Subsidiary (or wholly-owned subsidiary, as applicable)
and the Parent. All such loans and advances shall be on an
unsecured basis unless specifically provided otherwise in
loan documents executed at that time. The Majority Owned
Subsidiary or its wholly-owned subsidiaries, as applicable,
shall pay interest on the aggregate unpaid principal amount
of such loans from time to time outstanding at a rate
("Interest Rate") equal to the rate of the Commercial Paper
Composite Rate for 90-day maturities as reported by Merrill
Lynch Capital Markets, as an average of the last five
business days of such Majority Owned Subsidiary's latest
fiscal quarter then ended, plus twenty-five (25) basis
points. The Interest Rate shall be adjusted on the first
business day of each fiscal quarter of such Majority Owned
Subsidiary pursuant to the Interest Rate formula contained
in the preceding sentence and shall be in effect for the
entirety of such fiscal quarter. Interest shall be computed
on a 360-day basis. The aggregate principal amount
outstanding and accrued interest thereon shall be payable on
demand. The principal and accrued interest may be paid by
the Majority Owned Subsidiaries or their wholly-owned
subsidiaries, as applicable, at any time or from time to
time, in whole or in part, without premium or penalty. All
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payments shall be applied first to accrued interest and then
to principal. Principal and interest shall be payable in
lawful money of the United States of America, in immediately
available funds, at the principal office of the Parent or at
such other place as the Parent may designate from time to
time in writing to the Majority Owned Subsidiary. The
unpaid principal amount of any such borrowings, and accrued
interest thereon, shall become immediately due and payable,
without demand, upon the failure of the Majority Owned
Subsidiary or its wholly-owned subsidiary, as applicable, to
pay its debts as they become due, the insolvency of the
Majority Owned Subsidiary or its wholly-owned subsidiary, as
applicable, the filing by or against the Majority Owned
Subsidiary or its wholly-owned subsidiary, as applicable, 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 Majority Owned
Subsidiary or its wholly-owned subsidiary, as applicable, 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 property of the Majority Owned Subsidiary
or its wholly-owned subsidiary, as applicable. In case any
payments of principal and interest shall not be paid when
due, the Majority Owned Subsidiary or its wholly-owned
subsidiary, as applicable, further promises to pay all cost
of collection, including reasonable attorneys' fees.
5. All payments required to be made by a Majority Owned
Subsidiary or its wholly-owned subsidiaries, as applicable,
shall be made within two days after receipt of notice from
the Parent. All payments required to be made by the Parent
shall be made within two days after receipt of notice from
the Majority Owned Subsidiary.
6. 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.
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 TERRATECH INC.
By: /s/ John P. Appleton
Title: President and Chief
Executive Officer
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THE RANDERS GROUP INCORPORATED
By: /s/ Emil C. Herkert
Title: President and Chief
Executive Officer
EXHIBIT 10.6
MASTER REPURCHASE AGREEMENT
AGREEMENT dated as of the 19th day of November, 1997 between
Thermo Electron Corporation, a Delaware corporation ("Seller"),
and The Randers Group Incorporated, a Delaware corporation (the
"Buyer").
1. Applicability
From time to time Buyer and Seller may enter into
transactions in which Seller agrees to transfer to Buyer certain
securities and/or financial instruments ("Securities") against
the transfer of funds by Buyer, with a simultaneous agreement by
Buyer to transfer to Seller such Securities on demand, against
the transfer of funds by Seller. Each such transaction shall be
referred to herein as a "Transaction" and shall be governed by
this Agreement, unless otherwise agreed in writing.
2. Definitions
(a) "Act of Insolvency", with respect to either party (i)
the commencement by such party as debtor of any case or
proceeding under any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar law, or such party seeking
the appointment of a receiver, trustee, custodian or similar
official for such party or any substantial part of its property;
or (ii) the commencement of any such case or proceeding against
such party, or another seeking such an appointment, which (A) is
consented to or not timely contested by such party, (B) results
in the entry of an order for relief, such an appointment or the
entry of an order having a similar effect, or (C) is not
dismissed within 15 days; or (iii) the making by a party of a
general assignment for the benefit of creditors; or (iv) the
admission in writing by a party of such party's inability to pay
such party's debts as they become due;
(b) "Additional Purchased Securities", Securities provided
by Seller to Buyer pursuant to Paragraph 4(a) hereof;
(c) "Income", with respect to any Security at any time, any
principal thereof then payable and all interest, dividends or
other distributions thereon;
(d) "Market Value", with respect to any Securities as of
any date, the price for such Securities on such date obtained
from a generally recognized source agreed to by the parties or
the most recent closing bid quotation from such a source, plus
accrued Income to the extent not included therein (other than any
Income transferred to Seller pursuant to Paragraph 6 hereof) as
of such date (unless contrary to market practice for such
Securities);
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(e) "Other Buyers", third parties that have entered into an
agreement with Seller that is substantially similar to this
Agreement;
(f) "Pricing Rate", a rate equal to the Commercial Paper
Composite rate for 90-day maturities provided by Merrill Lynch,
Pierce, Fenner & Smith Incorporated (or, if such rate is not
available, a substantially equivalent rate agreed to by Buyer and
Seller) plus 25 basis points, which rate shall be adjusted on
the first business day of each fiscal quarter and shall be in
effect for the entirety such fiscal quarter;
(g) "Purchase Price", the price at which Purchased
Securities are transferred by Seller to Buyer;
(h) "Purchased Securities", the Securities transferred by
Seller to Buyer in a Transaction hereunder, and any Securities
substituted therefor in accordance with Paragraph 9 hereof. The
term "Purchased Securities" with respect to any Transaction at
any time also shall include Additional Purchase Securities
transferred pursuant to Paragraph 4(a) and shall exclude
Securities returned pursuant to Paragraph 4(b);
(i) "Repurchase Collateral Account", a book account
maintained by Seller containing, among other Securities, the
Purchased Securities; and
(j) "Repurchase Price", for any Purchased Security, an
amount equal to the Purchase Price paid by Buyer to Seller for
such Purchased Security.
3. Transactions
(a) A Transaction may be initiated by Buyer upon the
transfer of the Purchase Price to Seller's account. Upon such
transfer, Seller shall transfer to Buyer Purchased Securities
having a Market Value equal to 103% of the Purchase Price.
(b) Purchased Securities shall be held in custody for Buyer
by Seller in the Repurchase Collateral Account. Seller shall
indicate on its books for such account Buyer's ownership of the
Purchased Securities. Upon reasonable request from Buyer, Seller
shall provide Buyer with a complete list of Purchased Securities
owned by Buyer.
(c) Upon demand by Buyer or Seller, Seller shall repurchase
from Buyer, and Buyer shall sell to Seller, for the Repurchase
Price all or any part of the Purchased Securities then owned by
Buyer.
4. Margin Maintenance
(a) If at any time the aggregate Market Value of all
Purchased Securities then owned by Buyer is less than 103% of the
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aggregate Repurchase Price for such Purchased Securities, then
Seller shall transfer to Buyer additional Securities ("Additional
Purchased Securities"), so that the aggregate Market Value of
such Purchased Securities, including any such Additional
Purchased Securities, will thereupon equal or exceed 103% of
such aggregate Repurchase Price.
(b) If at any time the aggregate Market Value of all
Purchased Securities then owned by Buyer exceeds 103% of the
aggregate Repurchase Price for such Purchased Securities, then
Seller may transfer Purchased Securities to Seller, so that the
aggregate Market Value of such Purchased Securities will
thereupon not exceed 103% of such aggregate Repurchase Price.
5. Interest Payments
If during any fiscal month Buyer owned Purchased Securities,
then on the first day of the next following fiscal month Seller
shall pay to Buyer an amount equal to the sum of the aggregate
Repurchase Prices of the Purchased Securities owned by Buyer at
the close of each day during the preceding fiscal month divided
by the number of days in such month and the product multiplied by
the Pricing Rate times the number of days in such month divided
by 360.
6. Income Payments and Voting Rights
Where a particular Transaction's term extends over an Income
payment date on the Purchased Securities subject to that
Transaction, Buyer shall, on the date such Income is payable,
transfer to Seller an amount equal to such Income payment or
payments with respect to any Purchased Securities subject to such
Transaction. Seller shall retain all voting rights with respect
to Purchased Securities sold to Buyer under this Agreement.
7. Security Interest
Although the parties intend that all Transactions hereunder
be sales and purchases and not loans, in the event any such
Transactions are deemed to be loans, Seller shall be deemed to
have pledged to Buyer as security for the performance by Seller
of its obligations under each such Transaction and this
Agreement, and shall be deemed to have granted to Buyer a
security interest in, all of the Purchased Securities with
respect to all Transactions hereunder and all proceeds thereof.
8. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds
hereunder shall be in immediately available funds. As used
herein with respect to Securities, "transfer" is intended to have
the same meaning as when used in Section 8-313 of the
Massachusetts Uniform Commercial Code or, where applicable, in
any federal regulation governing transfers of the Securities.
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9. Substitution
Buyer hereby grants Seller the authority to manage, in
Seller's sole discretion, the Purchased Securities held in
custody for Buyer by Seller in the Repurchase Collateral Account.
Buyer expressly agrees that Seller may (i) substitute other
Securities for any Purchased Securities and (ii) commingle
Purchased Securities with other Securities held in the Repurchase
Collateral Account. Substitutions shall be made by transfer to
Buyer of such other Securities and transfer to Seller of the
Purchased Securities for which substitution is being made. After
substitution, the substituted Securities shall be deemed to be
Purchased Securities. Securities which are substituted for
Purchased Securities shall have a Market Value at the time of
substitution equal to or greater than the Market Value of the
Purchase Securities for which such Securities were substituted.
10. Representations
Each of Buyer and Seller represents and warrants to the
other that (i) it is duly authorized to execute and deliver this
Agreement, to enter into the Transactions contemplated hereunder
and to perform its obligations hereunder and has taken all
necessary action to authorize such execution, delivery and
performance, (ii) the person signing this Agreement on its behalf
is duly authorized to do so on its behalf, (iii) it has obtained
all authorizations of any governmental body required in
connection with this Agreement and the Transactions hereunder and
such authorizations are in full force and effect and (iv) the
execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance,
charter, by-law or rule applicable to it or any agreement by
which it is bound or by which any of its assets are affected. On
the date for any Transaction Buyer and Seller shall each be
deemed to repeat all the foregoing representations made by it.
11. Events of Default
In the event that (i) Seller fails to repurchase or Buyer
fails to transfer Purchased Securities upon demand for repurchase
from either Buyer or Seller, (ii) Seller or Buyer fails, after
one business day's notice, to comply with Paragraph 4 hereof,
(iii) Buyer fails to make payment to Seller pursuant to
Paragraph 6 hereof, (iv) Seller fails to comply with Paragraph 5
hereof, (v) an Act of Insolvency occurs with respect to Seller
or Buyer, (vi) any representation made by Seller or Buyer shall
have been incorrect or untrue in any material respect when made
or repeated or deemed to have been made or repeated, or (vii)
Seller or Buyer shall admit to the other its inability to, or its
intention not to, perform any of its obligations hereunder (each
an "Event of Default"):
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(a) At the option of the nondefaulting party, exercised by
written notice to the defaulting party (which option shall be
deemed to have been exercised, even if no notice is given,
immediately upon the occurrence of any Act of Insolvency), Seller
shall become obligated to repurchase, and Buyer shall become
obligated to sell, all Purchased Securities then owned by Buyer
for the Repurchase Price of such Purchased Securities.
(b) If Seller is the defaulting party and Buyer exercises
or is deemed to have exercised the option referred to in
subparagraph (a) of this Paragraph, (i) the Seller's obligations
hereunder to repurchase all Purchased Securities in such
Transactions shall thereupon become immediately due and payable,
(ii) all Income paid after such exercise or deemed exercise shall
be retained by Buyer and applied to the aggregate unpaid
Repurchase Prices owed by Seller, and (iii) Seller shall
immediately deliver to Buyer any Purchased Securities subject to
such Transactions then in Seller's possession.
(c) In all Transactions in which Buyer is the defaulting
party, upon tender by Seller of payment of the aggregate
Repurchase Prices for all such Transactions, Buyer's right, title
and interest in all Purchased Securities subject to such
Transactions shall be deemed transferred to Seller, and Buyer
shall deliver all such Purchased Securities to Seller.
(d) After one business day's notice to the defaulting party
(which notice need not be given if an Act of Insolvency shall
have occurred, and which may be the notice given under
subparagraph (a) of this Paragraph or the notice referred to in
clause (ii) of the first sentence of this Paragraph), the
nondefaulting party may:
(i) as to Transactions in which Seller is the
defaulting party, (A) immediately sell, in a recognized market at
such price or prices as Buyer may reasonably deem satisfactory,
any or all Purchased Securities subject to such Transactions and
apply the proceeds thereof to the aggregate unpaid Repurchase
Prices and any other amounts owing by Seller hereunder or (B) in
its sole discretion elect, in lieu of selling all or a portion of
such Purchased Securities, to give Seller credit for such
Purchased Securities in an amount equal to the price therefor on
such date, obtained from a generally recognized source or the
most recent closing bid quotation from such a source, against the
aggregate unpaid Repurchase Prices and any other amounts owing by
Seller hereunder; and
(ii) as to Transactions in which Buyer is the
defaulting party, (A) purchase securities ("Replacement
Securities") of the same class and amount as any Purchased
Securities that are not delivered by Buyer to Seller as required
hereunder or (B) in its sole discretion elect, in lieu of
purchasing Replacement Securities, to be deemed to have purchased
Replacement Securities at the price therefor on such date,
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obtained from a generally recognized source or the most recent
closing bid quotation from such a source.
(e) As to Transactions in which Buyer is the defaulting
party , Buyer shall be liable to Seller (i) with respect to
Purchased Securities (other than Additional Purchased
Securities), for any excess of the price paid (or deemed paid) by
Seller for Replacement Securities therefor over the Repurchase
Price for such Purchased Securities and (ii) with respect to
Additional Purchased Securities, for the price paid (or deemed
paid) by Seller for the Replacement Securities therefor.
(f) The defaulting party shall be liable to the
nondefaulting party for the amount of all reasonable legal or
other expenses incurred by the nondefaulting party in connection
with or as a consequence of an Event of Default.
(g) The nondefaulting party shall have, in addition to its
rights hereunder, any rights otherwise available to it under any
other agreement or applicable law.
12. Single Agreement
Buyer and Seller acknowledge that, and have entered hereinto
and will enter into each Transaction hereunder in consideration
of and in reliance upon the fact that, all Transactions hereunder
constitute a single business and contractual relationship and
have been made in consideration of each other. Accordingly, each
of Buyer and Seller agrees (i) to perform all of its obligations
in respect of each Transaction hereunder, and that a default in
the performance of any such obligations shall constitute a
default by it in respect of all Transactions hereunder, (ii) that
each of them shall be entitled to set off claims and apply
property held by them in respect of any Transaction against
obligations owing to them in respect of any other Transactions
hereunder and (iii) that payments, deliveries and other transfers
made by either of them in respect of any Transaction shall be
deemed to have been made in consideration of payments, deliveries
and other transfers in respect of any other Transactions
hereunder, and the obligations to make any such payments,
deliveries and other transfers may be applied against each other
and netted.
13. Entire Agreement; Severability
This Agreement shall supersede any existing agreements
between the parties containing general terms and conditions for
repurchase transactions. Each provision and agreement 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.
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14. Non-assignability; Termination
The rights and obligations of the parties under this
Agreement and under any Transactions shall not be assigned by
either party without the prior written consent of the other
party. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit
of the parties and their respective successors and assigns. This
Agreement may be canceled by either party upon giving written
notice to the other, except that this Agreement shall,
notwithstanding such notice, remain applicable to any
Transactions then outstanding.
15. Governing Law
This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts without giving effect to the
conflict of law principles thereof.
16. No Waivers, Etc.
No express or implied waiver of any Event of Default by
either party shall constitute a waiver of any other Event of
Default and no exercise of any remedy hereunder by any party
shall constitute a wavier of its right to exercise any other
remedy hereunder. No modification or waiver of any provision of
this Agreement and no consent by any party to a departure
herefrom shall be effective unless and until such shall be in
writing and duly executed by both of the parties hereto.
19. Intent
(a) The parties recognize that each Transaction is a
"repurchase agreement" as that term is defined in Section 101 of
Title 11 of the United States Code, as amended (except insofar as
the type of Securities subject to such Transaction or the term of
such Transaction would render such definition inapplicable), and
a "securities contract" as that term is defined in Section 741 of
Title 11 of the United States Code, as amended.
(b) It is understood that either party's right to liquidate
Securities delivered to it in connection with Transactions
hereunder or to exercise any other remedies pursuant to Paragraph
11 hereof, is a contractual right to liquidate such Transaction
as described in Sections 555 and 559 of Title 11 of the United
States Code, as amended.
7PAGE
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
THERMO ELECTRON CORPORATION THE RANDERS GROUP INCORPORATED
By: /s/ Melissa F. Riordan By: /s/ Emil C. Herkert
Melissa F. Riordan Emil C. Herkert
Title: Treasurer Title: President and Chief
Executive Officer
Exhibit 10.7
THE RANDERS GROUP INCORPORATED
EQUITY INCENTIVE PLAN
1. Purpose
The purpose of this Equity Incentive Plan (the "Plan") is to
secure for The Randers Group Incorporated (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
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2
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 10,000,000 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.
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.
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3
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 422A of the Internal Revenue Code of 1986, as amended
(the "Code"), or options that are not intended to meet the
requirements of Section 422A ("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
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4
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 422A 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.
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5
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
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6
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
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7
participant's income tax liabilities arising from all payments
under the Plan.
9. Change in Control
9.1 Impact of Event
In the event of a "Change in Control" as defined in Section
9.2, the following provisions shall apply, unless the agreement
evidencing the Award otherwise provides:
(a) Any stock options or other stock-based Awards awarded
under the Plan that were not previously exercisable and
vested shall become fully exercisable and vested.
(b) Awards of restricted stock and other stock-based Awards
subject to restrictions and to the extent not fully vested,
shall become fully vested and all such restrictions shall
lapse so that shares issued pursuant to such Awards shall be
free of restrictions.
(c) Deferral limitations and conditions that relate solely
to the passage of time, continued employment or affiliation,
will be waived and removed as to deferred stock Awards and
performance Awards. Performance of other conditions (other
than conditions relating solely to the passage of time,
continued employment or affiliation) will continue to apply
unless otherwise provided in the agreement evidencing the
Awards or in any other agreement between the Participant and
the Company or unless otherwise agreed by the Board.
9.2 Definition of "Change in Control"
"Change in Control" means any one of the following events:
(i) when, any Person is or becomes the beneficial owner (as
defined in Section 13(d) of the Exchange Act and the Rules and
Regulations thereunder), together with all Affiliates and
Associates (as such terms are used in Rule 12b-2 of the General
Rules and Regulations of the Exchange Act) of such Person,
directly or indirectly, of 50% or more of the outstanding Common
Stock of the Company or its parent corporation, Thermo TerraTech
Inc. ("Thermo TerraTech"), or the beneficial owner of 25% or more
of the outstanding common stock of Thermo Electron Corporation
("Thermo Electron"), without the prior approval of the Prior
Directors of the applicable issuer, (ii) the failure of the Prior
Directors to constitute a majority of the Board of Directors of
the Company, Thermo TerraTech or Thermo Electron, as the case may
be, at any time within two years following any Electoral Event,
or (iii) any other event that the Prior Directors shall determine
constitutes an effective change in the control of the Company,
Thermo TerraTech or Thermo Electron. As used in the preceding
sentence, the following capitalized terms shall have the
respective meanings set forth below:
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8
(a) "Person" shall include any natural person, any entity,
any "affiliate" of any such natural person or entity as such
term is defined in Rule 405 under the Securities Act of 1933
and any "group" (within the meaning of such term in Rule
13d-5 under the Exchange Act);
(b) "Prior Directors" shall mean the persons sitting on the
Company's, Thermo TerraTech's or Thermo Electron's Board of
Directors, as the case may be, immediately prior to any
Electoral Event (or, if there has been no Electoral Event,
those persons sitting on the applicable Board of Directors
on the date of this Agreement) and any future director of
the Company, Thermo TerraTech or Thermo Electron who has
been nominated or elected by a majority of the Prior
Directors who are then members of the Board of Directors of
the Company, Thermo TerraTech or Thermo Electron, as the
case may be; and
(c) "Electoral Event" shall mean any contested election of
Directors, or any tender or exchange offer for the
Company's, Thermo TerraTech's or Thermo Electron's Common
Stock, not approved by the Prior Directors, by any Person
other than the Company, Thermo TerraTech, Thermo Electron or
a majority-owned subsidiary of Thermo Electron.
10. General Provisions
10.1 Documentation of Awards
Awards will be evidenced by written instruments, which may
differ among Participants, prescribed by the Board from time to
time. Such instruments may be in the form of agreements to be
executed by both the Participant and the Company or certificates,
letters or similar instruments which need not be executed by the
participant but acceptance of which will evidence agreement to
the terms thereof. Such instruments shall conform to the
requirements of the Plan and may contain such other provisions
(including provisions relating to events of merger,
consolidation, dissolution and liquidations, change of control
and restrictions affecting either the agreement or the Common
Stock issued thereunder), as the Board deems advisable.
10.2 Rights as a Stockholder
Except as specifically provided by the Plan or the
instrument evidencing the Award, the receipt of an Award will not
give a Participant rights as a Stockholder with respect to any
shares covered by an Award until the date of issue of a stock
certificate to the participant for such shares.
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
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9
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 Nontransferability 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
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10
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, recapitalization or other change in the
Company's capitalization, or other distribution with respect to
common Stockholders other than normal cash dividends, the Board
will make (i) appropriate adjustments to the maximum number of
shares that may be delivered under the Plan under Section 4
above, and (ii) appropriate adjustments to the number and kind of
shares of stock or securities subject to Awards then outstanding
or subsequently granted, any exercise prices relating to Awards
and any other provisions of Awards affected by such change.
(b) The Board may also make appropriate adjustments to take
into account material changes in law or in accounting practices
or principles, mergers, consolidations, acquisitions,
dispositions, repurchases or similar corporate transactions, or
any other event, if it is determined by the Board that
adjustments are appropriate to avoid distortion in the operation
of the Plan, but no such adjustments other than those required by
law may adversely affect the rights of any Participant (without
the Participant's consent) under any Award previously granted.
10.7 Employment Rights
Neither the adoption of the Plan nor the grant of Awards
will confer upon any person any right to continued employment
with the Company or any subsidiary or interfere in any way with
the right of the Company or subsidiary to terminate any
employment relationship at any time or to increase or decrease
the compensation of such person. Except as specifically provided
by the Board in any particular case, the loss of existing or
potential profit in Awards granted under the Plan will not
constitute an element of damages in the event of termination of
an employment relationship even if the termination is in
violation of an obligation of the Company to the employee.
Whether an authorized leave of absence, or absence in
military or government service, shall constitute termination of
employment shall be determined by the Board at the time. For
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
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11
under the Plan, will not constitute "earnings" or "compensation"
with respect to which any other employee benefits of such
employee are determined, including without limitation benefits
under any pension, stock ownership, stock purchase, life
insurance, medical, health, disability or salary continuation
plan.
10.9 Legal Holidays
If any day on or before which action under the Plan must be
taken falls on a Saturday, Sunday or legal holiday, such action
may be taken on the next succeeding day not a Saturday, Sunday or
legal holiday.
10.10 Foreign Nationals
Without amending the Plan, Awards may be granted to persons
who are foreign nationals or employed outside the United States
or both, on such terms and conditions different from those
specified in the Plan, as may, in the judgment of the Board, be
necessary or desirable to further the purpose of the Plan.
11. Termination and Amendment
The Plan shall remain in full force and effect until
terminated by the Board. Subject to the last sentence of this
Section 11, the Board may at any time or times amend the Plan or
any outstanding Award for any purpose that may at the time be
permitted by law, or may at any time terminate the Plan as to any
further grants of Awards. No amendment, unless approved by the
Stockholders, shall be effective if it would cause the Plan to
fail to satisfy the requirements of the federal tax law or
regulation relating to incentive stock options or the
requirements of Rule 16b-3 (or any successor rule) of the
Exchange Act. No amendment of the Plan or any agreement
evidencing Awards under the Plan may adversely affect the rights
of any participant under any Award previously granted without
such participant's consent.
EXHIBIT 10.8
FORM OF
THE RANDERS GROUP INCORPORATED
DEFERRED COMPENSATION PLAN FOR DIRECTORS
----------------------------------------
Section 1. Participation . Any director of The Randers
Group Incorporated (the "Company") may elect to have such
percentage as he or she may specify of the fees otherwise
payable to him or her deferred and paid to him or her as
provided in this Plan. A director who is also an officer of
the Company or its parent corporation, Thermo Electron
Corporation, shall not be eligible to participate in this
Plan. Each election shall be made by notice in writing
delivered to the Secretary of the Company , in such form as
the Secretary 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 Secretary 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
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average last sale price per share of the Company's common
stock as reported on in The Wall Street Journal,
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 125,000 shares of the Company's common
stock may be represented by stock units credited under this
Plan, subject to proportionate adjustment in the event of
any stock dividend, stock split or other capital change
affecting the Company's common stock.
Section 5. Cash Dividend Credits . Additional credits
shall be made to a participant's deferred compensation
account, until all distributions shall have been made from
the participant's stock unit account, in amounts equal to
the cash dividends (or the fair market value of dividends
paid in property other than dividends payable in common
stock of the Company) which the participant would have
received from time to time had he or she been the owner on
the record dates for the payment of such dividends of the
number of shares of the Company's common stock equal to the
number of units in his or her stock unit account on those
dates.
Section 6. Stock Dividend Credits. Additional credits
shall be made to a participant's stock unit account, until
all distributions shall have been made from the
participant's stock unit account, of a number of units equal
to the number of shares of the Company's common stock,
rounded to the nearest one-hundredth share, which the
participant would have received from time to time as stock
dividends had he or she been the owner on the record dates
for the payments of such stock dividends of the number of
units of the Company's common stock equal to the number of
units credited to his or her stock unit account on those
dates.
Section 7. Recapitalization . If, as a result of
recapitalization of the Company (including a stock split),
the Company's outstanding shares of common stock shall be
changed into a greater or smaller number of shares, the
number of units then credited to a participant's stock unit
account shall be appropriately adjusted on the same basis.
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3
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. All distributions under
the plan shall be completed not later than December 31,
2025.
(b) The Company shall distribute to the participant
sums in cash equal to the balance credited to his or her
deferred compensation account as of the close of the fiscal
year in which his or her deferral termination date occurs
plus such additional amounts as shall be credited thereto
from time to time thereafter pursuant to Section 5. The
cash distribution shall be made on the same dates as the
annual distributions made pursuant to paragraph (a) above,
and each cash distribution shall consist of the entire
balance credited to the participant's deferred compensation
account at the time of the annual distribution.
If a participant's deferral termination date shall
occur by reason of his or her death or if he or she shall
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4
die after his or her deferral termination date but prior to
receipt of al l distributions of stock and cash provided for
in this Section 8, all stock and cash remaining
distributable hereunder shall be distributed to such
beneficiary as the participant shall have designated in
writing and filed with the Secretary of the Company or, in
the absence of designation, to the participant's personal
representative. Such distributions shall be made in the
same manner and at the same intervals as they would have
been made to the participant had he or she continued to
live.
Section 9. Participant's Rights Unsecured. The right of
any participant to receive distributions under Section 8
shall be an unsecured claim against the general assets of
the Company. The Company may but shall not be obligated to
acquire shares of its outstanding common stock from time to
time in anticipation of its obligation to make such
distributions, but no participant shall have any rights in
or against any shares of stock so acquired by the Company.
All such stock shall constitute general assets of the
Company and may be disposed of by the Company at such time
and for such purposes as it may deem appropriate.
Section 10. Termination of the Plan. The Plan shall
terminate and full distribution shall be made from all
participants' deferred compensation accounts and stock unit
accounts upon any change of control of the Company. Either
of the following shall be deemed to be a change of control:
(a) the occurrence, without the prior approval of the Board
of Directors, of the acquisition, directly or indirectly, by
any person of 50% or more of the outstanding common stock of
either the Company or its parent corporation, Thermo
TerraTech Inc. ("Thermo TerraTech"), or the beneficial owner
of 25% or more of the outstanding common stock of Thermo
Electron Corporation ("Thermo Electron"), without the prior
approval of the prior directors of the Company, Thermo
TerraTech, or Thermo Electron, as the case may be ; (b) the
failure of the prior directors to constitute a majority of
the Board of Directors of the Company, Thermo TerraTech or
Thermo Electron, at any time within two years following any
electoral event. As used in this sentence and the preceding
sentence, person shall mean a natural person, an entity
(together with an affiliate thereof, as defined in Rule 405
under the Securities Act of 1933) or a group, as defined in
Rule 13d-5 under the Securities Exchange Act of 1934; prior
directors shall mean the persons serving on the Board of
Directors immediately prior to any electoral event; and
electoral event shall mean any contested election of
directors or any tender or exchange offer for common stock
of the Company, Thermo TerraTech or Thermo Electron by any
person other than the Company, Thermo TerraTech , Thermo
Electron or a subsidiary of any of the foregoing companies.
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5
The Board of Directors at any time, at its discretion, may
terminate the Plan. If the Board of Directors terminates
the Plan after any person or group of persons shall have
acquired or proposed to acquire control of the Company
through the Board of Directors, Thermo TerraTech or Thermo
Electron, full and prompt distribution shall be made from
all participants' deferred compensation accounts and stock
unit accounts. Otherwise, distributions in respect of
credits to participants' deferred compensation accounts and
stock unit accounts as of the date of termination shall be
made in the manner and at the time prescribed in Section 8.
Section 11. Amendment of the Plan. The Board of
Directors of the Company may amend the Plan at any time and
from time to time, provided, however, that no amendment
affecting credits already made to any participant's deferred
compensation account or stock unit account may be made
without the consent of that participant or, if that
participant has died, that participant's beneficiary.
Section 12. Effective Date of the Plan. The Plan shall
become effective commencing upon the date the U. S.
Securities and Exchange Commission shall have declared
effective the registration of shares of the Company's Common
Stock in an underwritten public offering pursuant to the
Securities Act of 1933, as amended.
Exhibit 10.9
FORM OF
THE RANDERS GROUP INCORPORATED
INDEMNIFICATION AGREEMENT
This Agreement, made and entered into this ** day of **,
1997, ("Agreement"), by and between The Randers Group
Incorporated, a Delaware corporation (the "Company"), and ***
("Indemnitee"):
WHEREAS, highly competent persons are becoming more
reluctant to serve publicly-held corporations as directors or in
other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out
of their service to, and activities on behalf of, the
corporation;
WHEREAS, uncertainties relating to the continued
availability of adequate directors and officers liability
insurance ("D&O Insurance") and the uncertainties relating to
indemnification have increased the difficulty of attracting and
retaining such persons;
WHEREAS, the Board of Directors of the Company (the "Board")
has determined that the difficulty in attracting and retaining
such persons is detrimental to the best interests of the
Company's stockholders and that the Company should act to assure
such persons that there will be increased certainty of such
protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify such
persons to the fullest extent permitted by applicable law so that
they will serve or continue to serve the Company free from undue
concern that they will not be so indemnified;
WHEREAS, Indemnitee is willing to serve, continue to serve
and/or to take on additional service for or on behalf of the
Company on the condition that he be so indemnified and that such
indemnification be so guaranteed.
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:
1. Services by Indemnitee. Indemnitee agrees to serve or
continue to serve as a Director of the Company. This agreement
shall not impose any obligation on the Indemnitee or the Company
to continue the Indemnitee's position with the Company beyond any
period otherwise applicable.
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2
2. Indemnity. The Company shall indemnify, and shall
advance Expenses (as hereinafter defined) to, Indemnitee as
provided in this Agreement and to the fullest extent permitted by
law.
3. General. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 3 if, by reason of his
Corporate Status (as hereinafter defined), he is, or is
threatened to be made, a party to any threatened, pending, or
completed action, suit, arbitration, alternative dispute
resolution mechanism, investigation, administrative hearing or
other proceeding whether civil, criminal, administrative or
investigative. Pursuant to this Section 3, Indemnitee shall be
indemnified against Expenses, judgments, penalties, fines and
amounts paid in settlement incurred by him or on his behalf in
connection with such action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative
hearing or other proceeding whether civil, criminal,
administrative or investigative or any claim, issue or matter
therein, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.
4. Proceedings by or in the Right of the Company. In the
case of any action or suit by or in the right of the Company,
indemnification shall be made only (i) for Expenses or (ii) in
respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Company if such
indemnification is permitted by Delaware law; provided, however,
that indemnification against Expenses shall nevertheless be made
by the Company in such event to the extent that the Court of
Chancery of the State of Delaware, or the court in which such
action or suit shall have been brought or is pending, shall
determine to be proper despite the adjudication of liability but
in view of all the circumstances of the case.
5. Indemnification for Expenses of a Party who is Wholly
or Partly Successful. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of
his Corporate Status, a party to and is successful, on the merits
or otherwise, in any action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative
hearing or other proceeding whether civil, criminal,
administrative or investigative, he shall be indemnified against
all Expenses incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful but is
successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such action, suit,
arbitration, alternative dispute resolution mechanism,
investigation, administrative hearing or other proceeding whether
civil, criminal, administrative or investigative, the Company
shall indemnify Indemnitee against all Expenses incurred by him
PAGE
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3
or on his behalf in connection with each successfully resolved
claim, issue or matter. For purposes of this Section and without
limitation, the termination of any claim, issue or matter by
dismissal, or withdrawal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or
matter.
6. Advance of Expenses. The Company shall advance all
Expenses incurred by or on behalf of Indemnitee in connection
with any action, suit, arbitration, alternative dispute
resolution mechanism, investigation, administrative hearing or
any other proceeding whether civil, criminal, administrative or
investigative within twenty (20) days after the receipt by the
Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such action, suit, arbitration,
alternative dispute resolution mechanism, investigation,
administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative. Such statement or
statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an
undertaking by or on behalf of Indemnitee to repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses, which
undertaking shall be accepted by or on behalf of the Company
without reference to the financial ability of Indemnitee to make
repayment.
7. Procedure for Determination of Entitlement to
Indemnification.
(a) To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information
as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall,
promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested
indemnification.
(b) Upon written request by Indemnitee for indemnification
pursuant to Section 7(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto
shall be made in the specific case: (i) if a Change in Control
(as hereinafter defined) shall have occurred, by Independent
Counsel (as hereinafter defined) in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee (unless
Indemnitee shall request that such determination be made by the
Board or the Stockholders, in which case the determination shall
be made in the manner provided below in clauses (ii) or (iii));
(ii) if a Change of Control shall not have occurred, (A) by the
Board by a majority vote of a quorum consisting of Disinterested
Directors (as hereinafter defined), or (B) if a quorum of the
PAGE
<PAGE>
4
Board consisting of Disinterested Directors is not obtainable or,
even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee or (C) by
the Stockholders of the Company; or (iii) as provided in Section
8(b) of this Agreement; and, if it is so determined that
Indemnitee is entitled to indemnification, payment to Indemnitee
shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity
making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such
person, persons or entity upon reasonable advance request any
documentation or information that is not privileged or otherwise
protected from disclosure and that is reasonably available to
Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements)
incurred by Indemnitee in so cooperating shall be borne by the
Company (irrespective of the determination as to Indemnitee's
entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(c) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 7(b) of this Agreement, the Independent Counsel shall be
selected as provided in this Section 7(c). If a Change of
Control shall not have occurred, the Independent Counsel shall be
selected by the Board, and the Company shall give written notice
to Indemnitee advising him of the identity of the Independent
Counsel so selected. If a Change of Control shall have occurred,
the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the
Board, in which event the preceding sentence shall apply), and
Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected. In
either event, Indemnitee or the Company, as the case may be, may,
within 7 days after such written notice of selection shall have
been given, deliver to the Company or to Indemnitee, as the case
may be, a written objection to such selection. Such objection
may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of "Independent
Counsel" as defined in Section 14 of this Agreement, and the
objection shall set forth with particularity the factual basis of
such assertion. If such written objection is made, the
Independent Counsel so selected may not serve as Independent
Counsel unless and until a court has determined that such
objection is without merit. If, within twenty (20) days after
submission by Indemnitee of a written request for indemnification
pursuant to Section 7(a) hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to,
in accordance with this Section 7(c), either the Company or
Indemnitee may petition the Court of Chancery of the State of
Delaware or other court of competent jurisdiction for resolution
of any objection which shall have been made by the Company or
Indemnitee to the other's selection of independent counsel and/or
PAGE
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5
for the appointment as independent counsel of a person selected
by the Court or by such other person as the Court shall
designate, and the person with respect to whom an objection is
favorably resolved or the person so appointed shall act as
Independent Counsel under Section 7(b) hereof. The Company shall
pay reasonable fees and expenses of Independent Counsel incurred
by such Independent Counsel in connection with acting pursuant to
Section 7(b) hereof. The Company shall pay any and all
reasonable fees and expenses incident to the procedures of this
Section 7(c), regardless of the manner in which such Independent
Counsel was selected or appointed. Upon the due commencement of
any judicial proceeding or arbitration pursuant to Section
9(a)(iii) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional
conduct then prevailing).
8. Presumptions and Effect of Certain Proceedings.
(a) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making such
determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted
a request for indemnification in accordance with Section 7(a) of
this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that
presumption.
(b) If the person, persons or entity empowered or selected
under Section 7 of this Agreement to determine whether Indemnitee
is entitled to indemnification shall not have made such
determination within sixty (60) days after receipt by the Company
of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made
and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an
omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided, however, that
such 60-day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or
entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for
the obtaining or evaluating of documentation and/or information
relating thereto; and provided, further, that the foregoing
provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by
the stockholders pursuant to Section 7(b) of this Agreement and
if (A) within fifteen (15) days after receipt by the Company of
the request for such determination the Board has resolved to
submit such determination to the stockholders for their
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6
consideration at an annual meeting thereof to be held within
seventy-five (75) days after such receipt and such determination
is made thereat, or (B) a special meeting of stockholders is
called within fifteen (15) days after such receipt for the
purpose of making such determination, such meeting is held for
such purpose within sixty (60) days after having been so called
and such determination is made thereat, or (ii) if the
determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 7(b) of this Agreement.
(c) The termination of any action, suit, arbitration,
alternative dispute resolution mechanism, investigation,
administrative hearing or other proceeding whether civil,
criminal, administrative or investigative or of any claim, issue
or matter therein by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of
itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not
act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Company or,
with respect to any criminal action or proceeding, that
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
9. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant
to Section 7 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of
Expenses is not timely made pursuant to Section 6 of this
Agreement, (iii) the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 7(b) of this Agreement and such determination shall not
have been made and delivered in a written opinion within ninety
(90) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made
pursuant to Section 5 of this Agreement within ten (10) days
after receipt by the Company of a written request therefor, or
(v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled
to indemnification or such determination is deemed to have been
made pursuant to Section 8 of this Agreement, Indemnitee shall be
entitled to an adjudication in an appropriate court of the State
of Delaware, or in any other court of competent jurisdiction, of
his entitlement to such indemnification or advancement of
Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within one hundred eighty (180) days
following the date on which Indemnitee first has the right to
commence such proceeding pursuant to this Section 9(a). The
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7
Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.
(b) In the event that a determination shall have been made
pursuant to Section 7 of this Agreement that Indemnitee is not
entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 9 shall be
conducted in all respects as a de novo trial, or arbitration, on
the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. If a Change of Control shall have
occurred, in any judicial proceeding or arbitration commenced
pursuant to this Section 9 the Company shall have the burden of
proving that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to
have been made pursuant to Section 7 or 8 of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 9, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of
a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification
under applicable law.
(d) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this
Section 9 that the procedures and presumptions of this Agreement
are not valid, binding and enforceable and shall stipulate in any
such court or before any such arbitrator that the Company is
bound by all the provisions of this Agreement.
(e) In the event that Indemnitee, pursuant to this Section
9, seeks a judicial adjudication of or an award in arbitration to
enforce his rights under, or to recover damages for breach of,
this Agreement, Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, any and
all expenses (of the types described in the definition of
Expenses in Section 14 of this Agreement) actually and reasonably
incurred by him in such judicial adjudication or arbitration, but
only if he prevails therein. If it shall be determined in said
judicial adjudication or arbitration that Indemnitee is entitled
to receive part but not all of the indemnification or advancement
of expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall
be appropriately prorated.
10. Security. To the extent requested by the Indemnitee
and approved by the Board, the Company may at any time and from
time to time provide security to the Indemnitee for the Company's
obligations hereunder through an irrevocable bank line of credit,
funded trust or other collateral. Any such security, once
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8
provided to the Indemnitee, may not be revoked or released
without the prior written consent of Indemnitee.
11. Non-Exclusivity; Duration of Agreement; Insurance;
Subrogation.
(a) The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may
at any time be entitled under applicable law, the Company's
certificate of incorporation or by-laws, any other agreement, a
vote of stockholders or a resolution of directors, or otherwise.
This Agreement shall continue until and terminate upon the later
of: (a) ten (10) years after the date that Indemnitee shall have
ceased to serve as a Director of the Company or fiduciary of any
other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which Indemnitee served at the
request of the Company; or (b) the final termination of all
pending actions, suits, arbitrations, alternative dispute
resolution mechanisms, investigations, administrative hearings or
other proceedings whether civil, criminal, administrative or
investigative in respect of which Indemnitee is granted rights of
indemnification or advancement of expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 9 of this
Agreement relating thereto. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the
benefit of Indemnitee and his heirs, executors and
administrators.
(b) To the extent that the Company maintains D&O Insurance,
Indemnitee shall be covered by such D&O Insurance in accordance
with its terms to the maximum extent of the coverage available
for any Director under such policy or policies.
(c) In the event of any payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all
papers required and take all action necessary to secure such
rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to
make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or
otherwise.
12. Severability; Reformation. If any provision or
provisions of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any
Section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid,
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<PAGE>
9
illegal or unenforceable) shall not in any way be affected or
impaired thereby; and (b) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is
not itself invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable.
13. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any other provision of this Agreement,
Indemnitee shall not be entitled to indemnification or
advancement of Expenses under this Agreement with respect to any
action, suit or proceeding, or any claim therein, initiated,
brought or made by him (i) against the Company, unless a Change
in Control shall have occurred, or (ii) against any person other
than the Company, unless approved in advance by the Board.
14. Definitions. For purposes of this Agreement:
(a) "Change in Control" means a change in control of the
Company of a nature that would be required to be reported in
response to Item 5(f) of Schedule 14A of Regulation 14A (or
in response to any similar item on any similar schedule or
form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not the Company is then subject to
such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have
occurred if (i) any "person" (as such term is used in
Section 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities without the prior
approval of at least two-thirds of the members of the Board
in office immediately prior to such person attaining such
percentage interest; (ii) the Company is a party to a
merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of
which members of the Board in office immediately prior to
such transaction or event constitute less than a majority of
the Board thereafter; or (iii) during any period of two
consecutive years, individuals who at the beginning of such
period constituted the Board (including for this purpose any
new director whose election or nomination for election by
the Company's stockholders was approved by a vote of at
least two-thirds of the directors then still in office who
were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board.
(b) "Corporate Status" describes the status of a person who
is or was or has agreed to become a director of the Company,
or is or was an officer or fiduciary of the Company or of
any other corporation, partnership, joint venture, trust,
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10
employee benefit plan or other enterprise which such person
is or was serving at the request of the Company.
(c) "Disinterested Director" means a director of the
Company who is not and was not a party to the action, suit,
arbitration, alternative dispute resolution mechanism,
investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or
investigative in respect of which indemnification is sought
by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys'
fees, retainers, court costs, transcript costs, fees of
experts, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend or investigating
an action, suit, arbitration, alternative dispute resolution
mechanism, investigation, administrative hearing or any
other proceeding whether civil, criminal, administrative or
investigative.
(e) "Independent Counsel" means a law firm, or a member of
a law firm, that is experienced in matters of corporation
law and neither currently is, nor in the past five years has
been, retained to represent: (i) the Company or Indemnitee
in any matter material to either such party or (ii) any
other party to the action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative
hearing or any other proceeding whether civil, criminal,
administrative or investigative giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing,
the term "Independent Counsel" shall not include any person
who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action
to determine Indemnitee's Rights under this Agreement.
15. Headings. The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the
construction thereof.
16. Modification and Waiver. This Agreement may be amended
from time to time to reflect changes in Delaware law or for other
reasons. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of
the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
PAGE
<PAGE>
11
17. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other
document relating to any matter which may be subject to
indemnification or advancement of Expenses covered hereunder;
provided, however, that the failure to give any such notice shall
not disqualify the indemnitee from indemnification hereunder.
18. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if (i) delivered by hand and receipted
for by the party to whom said notice or other communication shall
have been directed, or (ii) mailed by certified or registered
mail with postage prepaid, on the third business day after the
date on which it is so mailed:
PAGE
<PAGE>
12
(a) If to Indemnitee, to: The address shown beneath
his or her signature on
the last page hereof
(b) If to the Company, to: The Randers Group Incorporated
c/o Thermo Electron Corporation
81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
Attn: Corporate Secretary
or to such other address as may have been furnished to Indemnitee
by the Company or to the Company by Indemnitee, as the case may
be.
19. Governing Law. The parties agree that this Agreement
shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
Attest: THE RANDERS GROUP INCORPORATED
By: By:
Sandra L. Lambert Emil C. Herkert
Secretary Chief Executive Officer
INDEMNITEE
Address:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RANDERS
GROUP INCORPORATED'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JANUARY
3, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-04-1998
<PERIOD-END> JAN-03-1998
<CASH> 4,682
<SECURITIES> 0
<RECEIVABLES> 16,994
<ALLOWANCES> 551
<INVENTORY> 0
<CURRENT-ASSETS> 34,005
<PP&E> 15,511
<DEPRECIATION> 3,756
<TOTAL-ASSETS> 92,174
<CURRENT-LIABILITIES> 9,731
<BONDS> 1,973
0
0
<COMMON> 12
<OTHER-SE> 78,467
<TOTAL-LIABILITY-AND-EQUITY> 92,174
<SALES> 0
<TOTAL-REVENUES> 53,344
<CGS> 0
<TOTAL-COSTS> 39,083
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 157
<INTEREST-EXPENSE> 160
<INCOME-PRETAX> 4,907
<INCOME-TAX> 2,176
<INCOME-CONTINUING> 2,731
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