SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------------------
FORM 10-K
(mark one)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 30, 1995
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-10114
THERMO CARDIOSYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-3027040
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
470 Wildwood Street, P.O. Box 2697
Woburn, Massachusetts 01888-2697
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
---------------------------- -----------------------------------------
Common Stock, $.10 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
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, and (2) has been subject to the
filing requirements for at least the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference into Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of January 26, 1996, was approximately $822,005,000.
As of January 26, 1996, the Registrant had 24,165,363 shares of Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the year
ended December 30, 1995, are incorporated by reference into Parts I and II.
Portions of the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held on May 20, 1996, are incorporated by
reference into Part III.
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PART I
Item 1. Business
(a) General Development of Business.
Thermo Cardiosystems Inc. (the Company or the Registrant) is a leader
in the research, development, and manufacture of implantable left
ventricular-assist systems (LVAS). These systems are designed to perform
substantially all or part of the pumping function of the left ventricle of
the natural heart for patients suffering from cardiovascular disease.
Unlike total artificial heart systems, which require removal of the natural
heart, the LVAS allows the natural heart to remain in place, preserving the
heart's biological control mechanisms and reducing blood-contacting
surfaces that have led to strokes in patients using other cardiac devices.
The Company has developed two systems for patients requiring long-term
cardiac support: an implantable pneumatic (IP) LVAS that is powered by an
external electrically driven air-pump, and an electric LVAS that is driven
by an implanted electric motor and powered by a lightweight battery pack
worn by the patient. In October 1994, the Company announced that the U.S.
Food and Drug Administration (FDA) had granted approval for the commercial
sale of the air-driven LVAS for use as a bridge-to-transplant. With this
approval, the air-driven system became available for sale to cardiac
centers throughout the United States. The Company received the European
Conformity Mark (CE Mark) for commercial sale of the air-driven LVAS in all
European Community countries in April 1994, and, in August 1995, received
the same approval for the electric system. The electric version of the LVAS
is currently being used in the U.S. in clinical trials for patients
awaiting heart transplants, and, late in 1995, the FDA approved the
protocol for conducting clinical trials of the electric LVAS as an
alternative to heart transplant. The electric LVAS is being used in Europe
as both a bridge-to-transplant and as an alternative to heart transplant.
The Company was incorporated in 1988 as a wholly owned subsidiary of
Thermedics Inc. (Thermedics), and is the successor in interest to the
assets and business of that company relating to the research and
development of implantable heart-assist systems. This business was
conducted by Thermedics from its formation in 1983, and prior to that time
as a division of Thermo Electron Corporation (Thermo Electron) beginning in
1966. As of December 30, 1995, Thermedics owned 12,525,110 shares of the
Company's common stock, representing 52% of such stock outstanding. A
publicly traded subsidiary of Thermo Electron, Thermedics develops,
manufactures, and markets process detection and security instruments,
electronic test instruments, and biomedical products. As of December 30,
1995, Thermo Electron owned 659,967 shares of the Company's common stock,
representing 3% of such stock outstanding. In January 1996, Thermedics
acquired 529,965 shares of the Company's common stock from Thermo Electron.
In consideration for such shares, and 315,199 shares of the common stock of
Thermo Voltek Corp., another subsidiary of Thermedics, Thermedics issued
1,688,161 shares of its common stock to Thermo Electron. The shares of
common stock were exchanged their respective at fair market values on the
date of the transaction. Thermedics is a 51%-owned subsidiary of Thermo
Electron. Thermo Electron is a world leader in environmental monitoring and
analysis instruments and a manufacturer of biomedical products including
mammography systems, paper-recycling and papermaking equipment,
alternative-energy systems, industrial process equipment, and other
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specialized products. Thermo Electron also provides environmental and
metallurgical services and conducts advanced technology research and
development.
Thermedics intends for the foreseeable future to maintain at least 50%
ownership of the Company. This may require the purchase by Thermedics of
additional shares of common stock of the Company from time to time as the
number of outstanding shares issued by the Company increases. These or any
other purchases by Thermedics may be made either in the open market or
directly from the Company or Thermo Electron. See Notes 3 and 6 to
Financial Statements in the Company's 1995 Annual Report to Shareholders
for a description of outstanding stock options and convertible obligations
issued by the Company.
(b) Financial Information About Industry Segments.
The Company conducts business in one industry segment: the research,
development, and manufacture of implantable heart-assist systems.
(c) Description of Business.
(i) Principal Products and Services
Left Ventricular-Assist Systems
The Company has developed two versions of its LVAS -- an implantable
pneumatic, or air-driven system that can be controlled by either a bedside
or portable console and an electric system that features an internal
electric motor powered by an external battery pack worn by the patient.
Both of the Company's systems employ the Company's HeartMate(R) blood pump,
and are designed for long-term use.
The Company's blood pump incorporates proprietary technological
advances in biological compatibility that distinguish it from competitive
devices, including proprietary textured linings that significantly reduce
the likelihood of blood clots that can lead to strokes. The Company
believes that the smooth-surface linings used in other cardiac devices have
led to increased incidences of blood clots. The Company's systems are
designed to enhance patients' quality of life by allowing them to become
ambulatory and resume functioning in society.
The Company's LVAS devices are at various stages of regulatory
approval (see "The Company's LVAS Devices").
Product Background
The Company began its research and development work in cardiac-support
systems in 1966. Since that time, the Company and its predecessors have
received more than $37 million in funding from the U.S. government,
principally from the National Heart, Lung, and Blood Institute of the
National Institutes of Health (NIH), to support its research. This funding
ended in 1992 as the Company moved from development to clinical trials.
Federal regulations require that the Company obtain an investigational
device exemption (IDE) from the U.S. Food and Drug Administration (FDA) to
conduct testing in humans. Once sufficient testing has been completed to
demonstrate the safety and effectiveness of the LVAS, the Company submits a
premarket approval (PMA) application to the FDA. PMA supplements must be
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submitted for each type and application of the Company's LVAS before being
sold commercially (see "Government Regulation").
The Company's LVAS Devices
The human heart contains two main pumping chambers: the left and right
ventricles. The right ventricle pumps blood into the lungs where it is
oxygenated. The blood then flows into the left ventricle where it is pumped
throughout the body. The Company's LVAS devices support all or part of the
pumping function of the left ventricle.
An LVAS provides many advantages over total artificial hearts. Unlike
a total artificial heart system, an LVAS allows the natural heart to be
left in place and assists the heart when it is unable to provide sufficient
cardiac function to maintain life. This approach provides the advantage of
leaving in place certain biological control mechanisms, such as blood flow
regulation and the production of certain peptides that regulate blood
volume. Retention of the natural heart also provides the important
psychological advantage of not removing the organ. In addition, an LVAS has
fewer blood-contacting surfaces and valves than artificial hearts, and
therefore is less likely to cause blood damage that can lead to blood clots
and strokes.
Each version of the Company's LVAS incorporates a number of
proprietary technological advances in biological compatibility that
distinguish it from other cardiac-assist devices. For example, the
Company's systems employ proprietary textured linings that significantly
reduce the likelihood of blood clots that can lead to strokes. As blood
enters the pump chamber, blood elements are trapped by its textured
surface, forming a coagulum, or lining. This coagulum is securely anchored
to the textured surface and forms a "living" lining similar to that found
in arteries and veins. This blood-contacting surface is derived from the
patient's own blood and is therefore blood-compatible. Data from the
Company's clinical studies indicate that use of either of the Company's
LVAS devices can result in a significant reduction in the need for
anticoagulants and a reduction in the risk of blood clots, due to the
Company's use of unique textured blood-contacting surfaces. Because of the
risk of blood clots, patients who receive smooth-surface devices must take
daily doses of anticoagulants, the level of which must be constantly
monitored. In contrast, patients on the Company's LVAS receive only minimal
anticoagulation treatment.
The HeartMate blood pump is used in each version of the Company's
LVAS. This pump is implanted just below the diaphragm in a position that
minimizes interference with normal circulation and other bodily functions.
An inlet tube is inserted into the apex of the left ventricle to drain
blood into the pump chamber. Blood is then forced out of the pump through
an animal tissue valve and back into the aorta. The HeartMate blood pump
works with the biological control mechanism of the natural heart to
increase pumping capability when required for activities such as climbing
stairs.
IP LVAS. The Company announced in October 1994, that the air-driven
system had been approved for commercial sale by the FDA. This approval
allows the Company to sell the IP LVAS to any of the nearly 900 cardiac
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surgery centers in the United States. In April 1994, the Company received
the CE Mark for commercial sale of the air-driven LVAS in all European
Community countries. This system is intended as a bridge-to-transplant for
patients awaiting heart transplantation. In the IP LVAS, the HeartMate
blood pump is coupled to an external console connected to the body by a
tube. The Company has also developed the HeartPak (TM), a lightweight
portable console that can be carried over the shoulder. The portable
console received the CE Mark for commercial sale in European Community
countries in February 1995. In July 1995, the FDA approved the beginning of
Phase I clinical trials of the HeartPak portable pneumatic driver. Phase I
of the study will evaluate the safety of the system in the hospital; Phase
II will evaluate the system in the home environment.
To date, more than 500 patients have been supported by the IP LVAS
prior to transplantation, including one patient who was supported for 390
days. There are currently approximately 60 cardiac surgery centers in the
United States that offer patients the Company's IP LVAS. These include
leading transplant centers, such as the Texas Heart Institute at Saint
Luke's Episcopal Hospital, The Cleveland Clinic Foundation,
Columbia-Presbyterian Medical Center, and Sharp Memorial Hospital of San
Diego. In addition, the Company is working with nearly 30 sites in such
countries as the United Kingdom, Germany, Sweden, Japan, the Netherlands,
France, Italy, and Belgium.
Electric LVAS. The Company has also developed an electric LVAS that
uses the HeartMate blood pump driven by an internal electric motor mounted
in the blood pump housing. The system is connected to its external battery
pack by wires that exit the body. Since the power source and control
elements are worn on a battery belt, the system allows the patient complete
mobility.
In early 1991, the Company received an IDE from the FDA allowing the
Company to begin clinical studies of the electric LVAS. This IDE is being
restructured as a two-phase study to evaluate the electric system for
safety in the hospital and home environment. The efficacy of the HeartMate
blood-contacting components, common to both the air-driven and electric
devices, has already been established, thereby reducing the complexity
level for testing of the Company's electric LVAS. To date, 18 clinical
sites have been approved by the FDA and more than 70 implants have been
performed, including one implant that supported a patient for 416 days
prior to transplant. In October 1991, the FDA granted approval for patients
at the Texas Heart Institute supported by the electric LVAS to take
day-trips away from the hospital, marking the first time that patients with
a cardiac-assist device could leave a controlled medical environment. In
April 1993, this approval was extended by the FDA to allow patients to be
discharged from the hospital with their physician's approval. Discharge
from the hospital improves the quality of life for patients with an LVAS
and reduces the substantial costs associated with extended hospital stays.
The electric LVAS may not be sold commercially in the U.S. until it has
received approval from the FDA. In December 1995, the FDA approved the
protocol for conducting clinical trials of the electric LVAS as an
alternative to heart transplant. The trial is expected to compare the
results of approved patients using the device to a similar number using
drug therapy. In August 1995, the electric LVAS was awarded the CE Mark,
allowing commercial sale of this system in all European Community
countries. The electric system is used as a bridge-to-transplant in the
U.S. and Europe, and is also implanted as an alternative to heart
transplant in Europe.
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Development Program
The Company believes that commercial use of the air-driven system --
and development of the electric system currently under clinical study --
will provide a substantial technical basis for clinical testing of
subsequent LVAS devices. For example, the Company plans to develop smaller
air-driven systems for smaller patients who do not require the same blood
flow provided by current systems. The principal engineering task in
developing a small system is the miniaturization of the pump in a manner
that preserves biocompatibility.
Transplant Centers Development and Training
Transplant centers provide a nationwide heart transplant capability
far in excess of the number of donor hearts available and represent the
principal target for use of the Company's LVAS systems. The cardiac
surgeons affiliated with these transplant centers are opinion leaders who
strongly influence the cardiac care that patients receive and, therefore,
will have an important impact on the market for the Company's systems. The
Company has developed working relationships with a number of leading
cardiac surgery centers, and has received significant support among opinion
leaders in cardiac surgery and cardiology.
The Company estimates that new customer transplant centers can be
developed, and physicians can be trained, in approximately three months.
For each initial sale -- known as an implementation program -- the Company
receives a one-time fee from the transplant center for training expenses,
as well as for pumps, consoles, and related equipment used by the center.
Subsequent implants consist of sales to an existing customer other than the
initial sale of the implementation program.
Government Regulation
The Company's LVAS is classified as a Class III medical device under
the Federal Food, Drug and Cosmetic Act. The first stage of obtaining
formal FDA market approval for a Class III device is submission of an
application for an IDE. The IDE permits clinical evaluations of significant
risk devices on human subjects under controlled experimental conditions by
designated qualified medical institutions. To obtain an IDE, approval of
the investigational plan for the applicable system is required from the
institutional review board within each participating medical institution as
well as from the FDA.
The second stage of formal FDA market approval is the PMA application,
which is submitted after sufficient data have been compiled under the IDE.
The FDA will grant market approval if it finds that the safety and
effectiveness of the product have been sufficiently demonstrated, and that
the product complies with all applicable performance and manufacturing
standards. No assurance can be given that any of the products under
development by the Company currently or in the future, including the
electric LVAS, will be approved by the FDA for commercial sale.
The Company is also subject to the FDA's Good Manufacturing Practice
(GMP) regulations. These regulations require that the Company manufacture
its systems and maintain its records in a prescribed manner. The FDA
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inspects the Company's facilities for compliance with GMP. If the Company
is found not to be in compliance, the FDA has broad powers to issue
recalls, enjoin future violations, and assess civil and criminal penalties
against the Company, its officers, and employees. In addition to GMP, the
Company must adhere to quality standards applicable to European Community
member countries and other countries where the Company sells its systems.
To market and sell each of the Company's systems in European Community
countries, the Company must obtain a CE Mark, which indicates that a
product conforms to mandatory safety requirements. To sell its systems in
other countries, the Company must comply with medical device regulations in
each of such countries.
Third Party Reimbursement
The HeartMate IP LVAS is the only implantable, bridge-to-transplant
ventricular-assist system approved for commercial sale by the FDA.
In November 1995, the U.S. Health Care Finance Administration (HCFA)
issued a decision that extends Medicare coverage to the Company's HeartMate
IP LVAS. Part of the U.S. Department of Health and Human Services, HCFA is
responsible for establishing coverage and reimbursement policies for
Medicare and recommending guidelines for Medicaid. Many third party payers
review HCFA recommendations to establish their own reimbursement policies.
Several major nongovernment insurers, including Blue Cross/Blue Shield of
Connecticut, Aetna Life & Casualty Company, and the health maintenance
organization (HMO) U.S. Healthcare, have already agreed to offer converage
for the IP LVAS. Additional insurers are reviewing the clinical results
with the device, and additional coverage decisions will be forthcoming.
Additionally, the ICD-9-CM coding committee has established a detailed
resource code to be used when an implantable assist device such as the
HeartMate IP LVAS is employed. This will facilitate collection of data on
medical costs as well as resource information that may be used in
establishing a Diagnosis Related Group (DRG) specific to ventricular-assist
systems. HCFA and most states require that DRGs be used in determining the
amount of reimbursement for particular procedures.
Sales of the Company's systems will depend to a large degree upon the
availability of reimbursement for the implantation of the devices. Even
though reimbursement has been established by HCFA and by certain
nongovernment insurers, the amount of available reimbursement may change,
and reimbursement may be denied by an insurer under certain circumstances,
including if it is determined that a procedure was not the most
cost-effective treatment method, was experimental, or was used for an
unapproved indication. No assurance can be given that additional
third-party reimbursement for the HeartMate IP LVAS will be granted within
a reasonable period of time, or at all, and the Company cannot predict what
effect the future policies of government entities and insurers will have on
the sale of the Company's devices. The unavailability of third party
reimbursement for procedures involving the Company's systems would have a
material adverse effect on the Company's business.
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(i) Manufacturing
During 1994 and 1995, in anticipation of FDA approval of the IP LVAS,
the Company more than doubled its manufacturing space and hired and trained
new manufacturing personnel. As a result, the Company believes that its
manufacturing capability is sufficient to meet anticipated demand for at
least two years.
(ii) New Products
The Company's business consists primarily of research and development
of new products to perform substantially all or part of the pumping
function of the left ventricle of the natural heart for patients suffering
from cardiovascular disease.
(iii) Raw Materials
The Company relies on a number of custom-designed components and
materials supplied by other companies to manufacture its LVAS, most of
which are available from a large number of suppliers. These suppliers, in
turn, rely on one or two basic raw materials. In 1992, two major
manufacturers, E. & M. DuPont de Nemours & Co. (DuPont) and Dow Corning
(Dow), decided to phase out or eliminate their supply of raw materials for
implantable medical devices. These withdrawals affected the availability of
several components and materials the Company uses in its products.
The Company has developed and received FDA approval for the use of one
alternative material, and is in the process of qualifying certain other
alternative materials or developing alternative sources for the materials
no longer supplied by Dow and Dupont. While the Company believes that it
has adequate supplies of materials to meet demand for the LVAS for the
foreseeable future, no assurance can be given that the Company will not
experience shortages of certain materials in the future that could delay
shipments of the LVAS.
The Company currently expects to spend approximately $2,000,000 on
research, development, and the equipment necessary to test and obtain FDA
approval for new alternative materials, approximately $1,390,000 of which
has been spent to date. However, the cost to the Company to evaluate and
test alternative materials and the time necessary to obtain FDA approval
for these materials are inherently difficult to determine because both time
and cost are dependent on at least two factors: the similarity of the
alternative material to the original material, and the amount of
third-party testing that may have already been completed on alternative
materials.
The Company does not expect that the introduction of alternative
materials will adversely affect clinical trials of the electric LVAS. There
can be no assurance, however, that the substitution of these materials will
not cause delays in the Company's LVAS development program.
(iv) Patents, Licenses and Trademarks
The Company's policy is to protect its intellectual property rights
relating to its work on cardiac-support systems including, if appropriate,
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applying for patents in the U.S. and foreign countries. Thermedics has
granted the Company a royalty-free license to use the Dermaport(R) access
device and Tecoflex(R) biomaterial in its LVAS. Although some of these
patent rights may provide the Company with a competitive advantage, the
Company primarily relies on its know-how and trade secrets developed over
28 years of research, development, and fabrication of cardiac-assist
devices. In April 1995, the Company received correspondence from a third
party alleging that the textured surface of the LVAS housing infringed
certain patent rights of such third party. The Company had previously
received similar correspondence from this third party but had not received
any communication for more than three years. In the April 1995
communication, the third party offered the Company a license, which the
Company has elected not to accept. Although the Company has not received
any communication since April 1995 and believes that it has adequate
defenses to the claims of the third party, due to the inherent uncertainty
of litigation, no assurance can be made that the Company would be
successful were any litigation to be commenced. The Company seeks to
protect its proprietary information, but there can be no assurance that
others will neither develop independently the same or similar information
nor obtain access to information that the Company believes is proprietary.
Moreover, there can be no assurance that others will not claim that the
Company's activities infringe their intellectual property rights.
(v) Seasonal Influences
There are no significant seasonal influences on the Company's sales of
products and services.
(vi) Working Capital Requirements
There are no special inventory requirements or credit terms extended
to customers that would have a material adverse effect on the Company's
working capital.
(vii) Dependency on a Single Customer
No customer accounted for 10% or more of the Company's total revenues
in 1995. Revenues from AMETEC (a licensed distributor of the Company's LVAS
products in Germany) accounted for 10% of the Company's total revenues in
1994. Revenues from The Cleveland Clinic Foundation, AMETEC, and
Columbia-Presbyterian Medical Center accounted for 14%, 11%, and 10%,
respectively, of the Company's total revenues in 1993.
(viii) Backlog
The Company's backlog of firm orders was approximately $1,400,000 and
$953,000 as of December 30, 1995 and December 31, 1994, respectively. The
Company believes that substantially all of the backlog at December 30, 1995
will be shipped or completed during the next 12 months.
(ix) Government Contracts
Not applicable.
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(x) Competition
The Company is aware of one other company that has submitted a PMA
application with the FDA for an implantable LVAS. The Company is unaware
whether this PMA application has been accepted for filing by the FDA. Also,
the Company is aware of one other company that has received approval by the
FDA Advisory Panel on Circulatory System Devices and subsequent commercial
approval for its cardiac-assist device. This is an external device,
positioned on the outside of the patient's chest, and is intended for
short-term use in the hospital environment. In addition, the Company is
aware that a total artificial heart is currently undergoing clinical
trials. The requirement of obtaining FDA approval for commercial sale of an
LVAS in the U.S. is a significant barrier to entry into the U.S. market for
these devices. There can be no assurance, however, that FDA regulations
will not change in the future, reducing the time and testing required for
others to obtain FDA approval for commercial sale. In addition, other
research groups and companies, some of which have significantly greater
resources than those of the Company, are developing cardiac systems using
alternative technologies or concepts, one or more of which might prove
functionally equivalent to or more suitable than the Company's systems.
Among products that have been approved for commercial sale, the Company
competes primarily on the basis of performance, service capability, and
price. Competition in the market for medical devices is also significantly
affected by the reimbursement policies of government and private insurers.
Any product for which reimbursement is not available from such third-party
payors will be at a significant competitive disadvantage. In November 1995,
the HCFA issued a decision that extends Medicare coverage to the IP LVAS.
Several major health insurers including Aetna and U.S. Health Care have
agreed to offer coverage for the IP LVAS, while many others are reimbursing
on a case-by-case basis.
(xi) Research and Development
During 1995, 1994, and 1993, the Company expended approximately
$3,324,000, $3,437,000, and $2,976,000, respectively, on internally
sponsored research and development programs. Approximately 28 professional
employees were engaged full-time in research and development activities at
December 30, 1995.
(xii) Environmental Protection Regulations
The Company believes that compliance by the Company with federal,
state, and local environmental regulations will not have a material adverse
effect on its capital expenditures, earnings, or competitive position.
(xiii) Number of Employees
As of December 30, 1995, the Company had a total of 122 employees.
None of the Company's employees is represented by a labor union, and the
Company considers its relations with its employees to be good.
(d) Financial Information about Exports by Domestic Operations.
Financial information about exports by domestic operations is
summarized in Note 8 to Financial Statements in the Registrant's 1995
Annual Report to Shareholders and is incorporated herein by reference.
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(e) Executive Officers of the Registrant.
Present Title
Name Age (Year First Became Executive Officer
------------------------------ --- ------------------------------------
Victor L. Poirier 54 President and Chief Executive
Officer (1988)
John N. Hatsopoulos 61 Vice President and Chief Financial
Officer (1988)
Dr. Kurt S. Dasse 46 Senior Vice President (1988)
Betty A. Silverstein Russell 46 Senior Vice President (1989)
Timothy J. Krauskopf 34 Vice President, Regulatory
Affairs (1995)
Paul F. Kelleher 53 Chief Accounting Officer (1988)
Each executive officer serves until his or her successor is chosen or
appointed by the Board of Directors and qualified or until earlier
resignation, death, or removal. All executive officers, except Mr.
Krauskopf, have held comparable positions for at least five years with the
Company, Thermedics, or Thermo Electron. Mr. Poirier and Dr. Dasse devote
substantially all of their time to the affairs of the Company, but devote a
portion of their time to the affairs of Thermedics. Messrs. Hatsopoulos and
Kelleher are full-time employees of Thermo Electron, but devote such time
to the affairs of the Company as the Company's needs reasonably require.
Mr. Krauskopf was previously Director of Regulatory Affairs from 1993 to
1995, and prior to that, was Senior Regulatory Affairs Coordinator at USCI
division of C.R. Bard, Inc. from 1992 to 1993, and worked in clinical
affairs at Carbomedics, Inc. from 1989 to 1992.
Item 2. Properties
The Company currently subleases approximately 31,536 square feet of
space in Thermedics' corporate headquarters in Woburn, Massachusetts. This
sublease expires in February 1999. Under the terms of the sublease, the
Company pays approximately the same rent paid per square foot by Thermedics
under its prime lease. The Company believes that these facilities are in
good condition and are suitable for its present operations.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
Information concerning the market and market price for the
Registrant's common stock, $.10 par value, and dividend policy is included
under the sections entitled "Common Stock Market Information" and "Dividend
Policy" in the Registrant's 1995 Annual Report to Shareholders and is
incorporated herein by reference.
Item 6. Selected Financial Data
The information required under this item is included under the
sections entitled "Selected Financial Information" and "Dividend Policy" in
the Registrant's 1995 Annual Report to Shareholders and is incorporated
herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required under this item is included under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Registrant's 1995 Annual Report to Shareholders and is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The Registrant's Financial Statements as of December 30, 1995, are
included in the Registrant's 1995 Annual Report to Shareholders and are
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
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PART III
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors required under this item is
incorporated herein by reference from the material contained under the
caption "Election of Directors" in the Registrant's definitive proxy
statement to be filed with the Securities and Exchange Commission pursuant
to Regulation 14A, not later than 120 days after the close of the fiscal
year. The information concerning delinquent filers pursuant to Item 405 of
Regulation S-K is incorporated herein by reference from the material
contained under the heading "Disclosure of Certain Late Filings" under the
caption "Stock Ownership" in the Registrant's definitive proxy statement to
be filed with the Securities and Exchange Commission pursuant to Regulation
14A, not later than 120 days after the close of the fiscal year.
Item 11. Executive Compensation
The information required under this item is incorporated by reference
from the material contained under the caption "Executive Compensation" in
the Registrant's definitive proxy statement to be filed with the Securities
and Exchange Commission pursuant to Regulation 14A, not later than 120 days
after the close of the fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required under this item is incorporated herein by
reference from the material contained under the caption "Stock Ownership"
in the Registrant's definitive proxy statement to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A, not later
than 120 days after the close of the fiscal year.
Item 13. Certain Relationships and Related Transactions
The information required under this item is incorporated herein by
reference from the material contained under the caption "Relationship with
Affiliates" in the Registrant's definitive proxy statement to be filed with
the Securities and Exchange Commission pursuant to Regulation 14A, not
later than 120 days after the close of the fiscal year.
13PAGE
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a,d) Financial Statements and Schedules.
(1) The financial statements set forth in the list below are filed
as part of this Report.
(2) The financial statement schedule set forth in the list below
is filed as part of this Report.
(3) Exhibits filed herewith or incorporated herein by reference
are set forth in Item 14(c) below.
List of Financial Statements and Schedules Referenced in this
Item 14.
Information incorporated by reference from Exhibit 13 filed
herewith:
Statement of Income
Balance Sheet
Statement of Cash Flows
Statement of Shareholders' Investment
Notes to Financial Statements
Report of Independent Public Accountants
Certain Financial Statement Schedules filed herewith:
Schedule II: Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or
not required, or because the required information is shown either
in the financial statements or in the notes thereto.
(b) Reports on Form 8-K.
During the Company's fiscal quarter ended December 30, 1995, the
Company was not required to file, and did not file, any Current
Report on Form 8-K.
(c) Exhibits.
See Exhibit Index on the page immediately preceding exhibits.
14PAGE
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed by the undersigned, thereunto duly authorized.
Date: March 8, 1996 THERMO CARDIOSYSTEMS INC.
By: Victor L. Poirier
---------------------
Victor L. Poirier
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated, as of March 8, 1996.
Signature Title
--------- -----
By: Victor L. Poirier President, Chief Executive Officer and
Victor L. Poirier Director
By:John N. Hatsopoulos Vice President and Chief Financial
John N. Hatsopoulos Officer
By: Paul F. Kelleher Chief Accounting Officer
Paul F. Kelleher
By: Walter J. Bornhorst Director
Walter J. Bornhorst
By: Richard W.K. Chapman Director
Richard W.K. Chapman
By: Elias P. Gyftopoulos Director
Elias P. Gyftopoulos
By: Robert C. Howard Director
Robert C. Howard
By: Leonard Laster Director
Leonard Laster
By: John W. Wood Jr. Chairman of the Board and Director
John W. Wood Jr.
By: Nicholas T. Zervas Director
Nicholas T. Zervas
15PAGE
<PAGE>
Report of Independent Public Accountants
----------------------------------------
To the Shareholders and Board of Directors of Thermo Cardiosystems Inc.:
We have audited, in accordance with generally accepted auditing
standards, the financial statements included in Thermo Cardiosystems Inc.'s
Annual Report to Shareholders incorporated by reference in this Form 10-K,
and have issued our report thereon dated February 7, 1996. Our audits were
made for the purpose of forming an opinion on those statements taken as a
whole. The schedule listed in Item 14 on page 14 is the responsibility of
the Company's management and is presented for purposes of complying with
the Securities and Exchange Commission's rules and is not part of the basic
financial statements. The schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in
our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial
statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
February 7, 1996
16PAGE
<PAGE>
SCHEDULE II
THERMO CARDIOSYSTEMS INC.
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Balance at Charged to Balance
Beginning Costs and Accounts Accounts at End
Description of Year Expenses Recovered Written-off of Year
- -------------------- ---------- ---------- --------- ----------- -------
Year Ended
December 30, 1995
Allowance for
Doubtful Accounts $ 225 $ 120 $ - $ (36) $ 309
Year Ended
December 31, 1994
Allowance for
Doubtful Accounts $ 80 $ 170 $ - $ (25) $ 225
Year Ended
January 1, 1994
Allowance for
Doubtful Accounts $ 105 $ 20 $ 108 $(153) $ 80
17PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
3.1 Articles of Organization, as filed on August 18, 1988
and as amended on October 26, 1988, January 6, 1989,
and May 23, 1990 (filed as Exhibit 3(a) to the
Registrant's Registration Statement on Form S-1 [Reg.
No. 33-34737] and incorporated herein by reference) and
as amended on October 25, 1993 (filed as Exhibit 3(c)
to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended October 2, 1993 [File No. 1-10114]
and incorporated herein by reference).
3.2 By-Laws of the Registrant (filed as Exhibit 3(b) to the
Registrant's Registration Statement on Form S-1 [Reg.
No. 33-25144] and incorporated herein by reference).
4.1 Form of Guarantee Agreement between the Registrant and
Thermo Electron Corporation (filed as Exhibit 4(b) to
the Registrant's Registration Statement on Form S-1
[Reg. No. 33-25144] and incorporated herein by
reference).
4.2 Form of Amendment Number 1 to Guarantee Agreement
between the Registrant and Thermo Electron (filed as
Exhibit 4(e) to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-34737] and incorporated herein
by reference).
4.3 Fiscal Agency Agreement dated January 5, 1993 among
Thermo Electron Corporation, the Registrant and
Chemical Bank (filed as Exhibit 4.11 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-10114] and
incorporated herein by reference).
4.4 Guarantee Reimbursement Agreement dated February 7,
1994 among the Registrant, Thermo Voltek Corp.,
Thermedics Inc. and Thermo Electron Corporation (filed
as Exhibit 4.4 to Thermedics' Annual Report on Form
10-K for the fiscal year ended January 1, 1994 [File
No. 1-9567] and incorporated herein by reference).
10.1 Amended and Restated Corporate Services Agreement dated
January 3, 1993 between Thermo Electron Corporation and
the Registrant (filed as Exhibit 10(b) to the
Registrant's Annual Report on Form 10-K for the year
ended January 2, 1993 [File No. 1-10114] and
incorporated herein by reference).
10.2 Sublease dated August 19, 1988 between the Registrant
and Thermedics Inc., as amended by Amendment No. 1
dated January 1, 1990 (filed as Exhibit 10(c) to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 30, 1989 [File No. 1-10114] and
incorporated herein by reference).
18PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.3 Form of Indemnification Agreement between the
Registrant and its officers and directors (filed as
Exhibit 10(d) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-25144] and
incorporated herein by reference).
10.4 Thermo Electron Corporate Charter, as amended and
restated effective January 3, 1993 (filed as Exhibit
10(e) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993 [File No.
1-10114] and incorporated herein by reference).
10.5 Intellectual Property Cross-License Agreement between
Thermedics Inc. and the Registrant dated August 19,
1988 (filed as Exhibit 10(i) to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-25144]
and incorporated herein by reference).
10.6 Agreement dated May 26, 1993 between The Polymer
Technology Group Incorporated and the Registrant (filed
as Exhibit 10(cc) to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended July 3, 1993 [File
No. 1-10114] and incorporated herein by reference).
10.7 Master Repurchase Agreement dated January 1, 1994
between the Registrant and Thermo Electron Corporation
(filed as Exhibit 10.7 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended January
1, 1994 [File No. 1-10114] and incorporated herein by
reference).
10.8-10.17 Reserved.
10.18 Equity Incentive Plan of the Registrant (filed as
Attachment A to the Proxy Statement dated May 5, 1994
of the Registrant [File No. 1-10114] and incorporated
herein by reference).
10.19 Deferred Compensation Plan for Directors of the
Registrant (filed as Exhibit 10(h) to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-25144]
and incorporated herein by reference).
10.20 Directors Stock Option Plan of the Registrant (filed as
Exhibit 10.20 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File
No. 1-10114] and incorporated herein by reference).
19PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.21 Incentive Stock Option Plan of the Registrant (filed as
Exhibit 10(f) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-25144] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and
the Registrant's Nonqualified Stock Option Plan is
1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected
in January 1990, 5-for-4 stock split effected in May
1990 and 2-for-1 stock split effected in November
1993).
10.22 Nonqualified Stock Option Plan of the Registrant (filed
as Exhibit 10(g) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-25144] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and
the Registrant's Incentive Stock Option Plan is
1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected
in January 1990, 5-for-4 stock split effected in May
1990 and 2-for-1 stock split effected in November
1993).
In addition to the stock-based compensation plans of
the Registrant, the executive officers of the
Registrant may be granted awards under stock-based
compensation plans of the Registrant's parent
corporations, Thermedics Inc. and Thermo Electron
Corporation, and their subsidiaries, for services
rendered to the Registrant or to such affiliated
corporations. Such plans are listed under Exhibits
10.23 - 10.90.
10.23 Thermo Electron Corporation Incentive Stock Option Plan
(filed as Exhibit 4(d) to Thermo Electron's
Registration Statement on Form S-8 [Reg. No. 33-8993]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Electron Nonqualified Stock Option Plan is
9,035,156 shares, after adjustment to reflect share
increases approved in 1984 and 1986, share decrease
approved in 1989, and 3-for-2 stock splits effected in
October 1986, October 1993 and May 1995).
20PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.24 Thermo Electron Corporation Nonqualified Stock Option
Plan (filed as Exhibit 4(e) to Thermo Electron's
Registration Statement on Form S-8 [Reg. No. 33-8993]
and incorporated herein by reference). (Plan amended in
1984 to extend expiration date to December 14, 1994;
maximum number of shares issuable in the aggregate
under this plan and the Thermo Electron Incentive Stock
Option Plan is 9,035,156 shares, after adjustment to
reflect share increases approved in 1984 and 1986,
share decrease approved in 1989, and 3-for-2 stock
splits effected in October 1986, October 1993 and May
1995).
10.25 Thermo Electron Corporation Equity Incentive Plan
(filed as Exhibit 10.1 to Thermo Electron's Quarterly
report on Form 10-Q for the quarter ended July 2, 1994
[File No. 1-8002] and incorporated herein by
reference). (Plan amended in 1989 to restrict exercise
price for SEC reporting persons to not less than 50% of
fair market value or par value; maximum number of
shares issuable is 7,050,000 shares, after adjustment
to reflect 3-for-2 stock splits effected in October
1993 and May 1995 and share increase approved in 1994).
10.26 Thermo Electron Corporation - Thermedics Inc.
Nonqualified Stock Option Plan (filed as Exhibit 4 to a
Registration Statement on Form S-8 of Thermedics Inc.
[Reg. No. 2-93747] and incorporated herein by
reference). (Maximum number of shares issuable is
450,000 shares, after adjustment to reflect share
increase approved in 1988, 5-for-4 stock split effected
in January 1985, 4-for-3 stock split effected in
September 1985, and 3-for-2 stock splits effected in
October 1986 and November 1993).
10.27 Thermo Electron Corporation - Thermo Instrument Systems
Inc. (formerly Thermo Environmental Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 4(c)
to a Registration Statement on Form S-8 of Thermo
Instrument Systems Inc. [Reg. No. 33-8034] and
incorporated herein by reference). (Maximum number of
shares issuable is 421,875 shares, after adjustment to
reflect 3-for-2 stock splits effected in July 1993 and
April 1995 and 5-for-4 stock split effected in December
1995).
21PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.28 Thermo Electron Corporation - Thermo Instrument Systems
Inc. Nonqualified Stock Option Plan (filed as Exhibit
10.12 to Thermo Electron's Annual Report on Form 10-K
for the fiscal year ended January 3, 1987 [File No.
1-8002] and incorporated herein by reference). (Maximum
number of shares issuable is 600,285 shares, after
adjustment to reflect share increase approved in 1988,
3-for-2 stock splits effected in January 1988, July
1993 and April 1995 and 5-for-4 stock split effected in
December 1995).
10.29 Thermo Electron Corporation - Thermo TerraTech Inc.
(formerly Thermo Process Systems Inc.) Nonqualified
Stock Option Plan (filed as Exhibit 10.13 to Thermo
Electron's Annual Report on Form 10-K for the fiscal
year ended January 3, 1987 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 108,000 shares, after adjustment to
reflect 6-for-5 stock splits effected in July 1988 and
March 1989 and 3-for-2 stock split effected in
September 1989).
10.30 Thermo Electron Corporation - Thermo Power Corporation
(formerly Tecogen Inc.) Nonqualified Stock Option Plan
(filed as Exhibit 10.14 to Thermo Electron's Annual
Report on Form 10-K for the fiscal year ended January
3, 1987 [File No. 1-8002] and incorporated herein by
reference). (Amended in September 1995 to extend the
plan expiration date to December 31, 2005).
10.31 Thermo Electron Corporation - Thermo Cardiosystems Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.11
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 130,500 shares, after adjustment
to reflect share increases approved in 1990 and 1992,
3-for-2 stock split effected in January 1990, 5-for-4
stock split effected in May 1990 and 2-for-1 stock
split effected in November 1993).
10.32 Thermo Electron Corporation - Thermo Ecotek Corporation
(formerly Thermo Energy Systems Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 10.12
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference).
22PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.33 Thermo Electron Corporation - ThermoTrex Corporation
(formerly Thermo Electron Technologies Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 10.13
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 180,000 shares, after adjustment
to reflect 3-for-2 stock split effected in October
1993).
10.34 Thermo Electron Corporation - Thermo Fibertek Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.14
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended December 28, 1991 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 600,000 shares, after adjustment
to reflect 2-for-1 stock split effected in September
1992 and 3-for-2 stock split effected in September
1995).
10.35 Thermo Electron Corporation - Thermo Voltek Corp.
(formerly Universal Voltronics Corp.) Nonqualified
Stock Option Plan (filed as Exhibit 10.17 to Thermo
Electron's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 57,500 shares, after adjustment to
reflect 3-for-2 stock split effected in November 1993
and share increase approved in September 1995).
10.36 Thermo Electron Corporation - Thermo BioAnalysis
Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.31 to Thermo Power's Annual Report on Form
10-K for the fiscal year ended September 30, 1995 [File
No. 1-10573] and incorporated herein by reference).
10.37 Thermo Electron Corporation - ThermoLyte Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.32
to Thermo Power's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995 [File No. 1-10573]
and incorporated herein by reference).
10.38 Thermo Electron Corporation - Thermo Remediation Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.33
to Thermo Power's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995 [File No. 1-10573]
and incorporated herein by reference).
23PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.39 Thermo Electron Corporation - ThermoSpectra Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.34
to Thermo Power's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995 [File No. 1-10573]
and incorporated herein by reference).
10.40 Thermo Electron Corporation - ThermoLase Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.35
to Thermo Power's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995 [File No. 1-10573]
and incorporated herein by reference).
10.41 Thermo Electron Corporation - ThermoQuest Corporation
Nonqualified Stock Option Plan.
10.42 Thermo Electron Corporation - Thermo Optek Corporation
Nonqualified Stock Option Plan.
10.43 Thermo Electron Corporation - Thermo Sentron Inc.
Nonqualified Stock Option Plan.
10.44 Thermo Electron Corporation - Trex Medical Corporation
Nonqualified Stock Option Plan.
10.45 Thermo Ecotek Corporation (formerly Thermo Energy
Systems Corporation) Incentive Stock Option Plan (filed
as Exhibit 10.18 to Thermo Electron's Annual Report on
Form 10-K for the fiscal year ended January 2, 1993
[File No. 1-8002] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Ecotek
Nonqualified Stock Option Plan is 900,000 shares, after
adjustment to reflect share increase approved in
December 1993).
10.46 Thermo Ecotek Corporation (formerly Thermo Energy
Systems Corporation) Nonqualified Stock Option Plan
(filed as Exhibit 10.19 to Thermo Electron's Annual
Report on Form 10-K for the fiscal year ended January
2, 1993 [File No. 1-8002] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Ecotek
Incentive Stock Option Plan is 900,000 shares, after
giving effect to share increase approved in December
1993).
10.47 Thermo Ecotek Systems Corporation (formerly Thermo
Energy Systems Corporation) Equity Incentive Plan
(filed as Exhibit 10.46 to Thermo TerraTech Inc.'s
(formerly Thermo Process Systems Inc.) Annual Report on
Form 10-K for the fiscal year ended April 2, 1994 [File
No. 1-9549] and incorporated herein by reference).
24PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.48 Thermedics Inc. Incentive Stock Option Plan (filed as
Exhibit 10(d) to Thermedics' Registration Statement on
Form S-1 [Reg. No. 33-84380] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermedics
Nonqualified Stock Option Plan is 1,931,923 shares,
after adjustment to reflect share increases approved in
1986 and 1992, 5-for-4 stock split effected in January
1985, 4-for-3 stock split effected in September 1985
and 3-for-2 stock splits effected in October 1986 and
November 1993).
10.49 Thermedics Inc. Nonqualified Stock Option Plan (filed
as Exhibit 10(e) to Thermedics' Registration Statement
on Form S-1 [Reg. No. 33-84380] and incorporated herein
by reference). (Maximum number of shares issuable in
the aggregate under this plan and the Thermedics
Incentive Stock Option Plan is 1,931,923 shares, after
adjustment to reflect share increases approved in 1986
and 1992, 5-for-4 stock split effected in January 1985,
4-for-3 stock split effected in September 1985 and
3-for-2 stock splits effected in October 1986 and
November 1993).
10.50 Thermedics Inc. Equity Incentive Plan (filed as
Appendix A to the Proxy Statement dated May 10, 1993 of
Thermedics [File No. 1-9567] and incorporated herein by
reference). (Maximum number of shares issuable is
1,500,000, after adjustment to reflect 3-for-2 stock
split effected in November 1993).
10.51 Thermedics Inc. - Thermo Sentron Inc. Nonqualified
Stock Option Plan.
10.52 Thermedics Inc. - Thermedics Detection Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.20
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference).
10.53 Thermedics Detection Inc. Equity Incentive Plan (filed
as Exhibit 10.69 to Thermedics' Annual Report on Form
10-K for the year ended December 31, 1994 [File No.
1-9567] and incorporated herein by reference).
10.54 Thermo Voltek Corp. (formerly Universal Voltronics
Corp.) 1985 Stock Option Plan (filed as Exhibit 10.14
to Thermo Voltek's Annual Report on Form 10-K for the
fiscal year ended June 30, 1985 [File No. 0-8245] and
incorporated herein by reference). (Maximum number of
shares issuable is 200,000 shares, after adjustment to
reflect 1-for-3 reverse stock split effected in
November 1992 and 3-for-2 stock split effected in
November 1993).
25PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.55 Thermo Voltek Corp. (formerly Universal Voltronics
Corp.) 1990 Stock Option Plan (filed as Exhibit 10.2 to
Thermo Voltek's Annual Report on Form 10-K for the
fiscal year ended June 30, 1990 [File No. 1-10574] and
incorporated herein by reference). (Maximum number of
shares issuable is 400,000 shares, after adjustment to
reflect share increases in 1993 and 1994, 1-for-3
reverse stock split effected in November 1992 and
3-for-2 stock split effected in November 1993).
10.56 Thermo Voltek Corp. Equity Incentive Plan (filed as
Exhibit 10.45 to Thermo Voltek's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File
No. 1-10574] and incorporated herein by reference).
10.57 Thermo Sentron Inc. Equity Incentive Plan.
10.58 Thermo Instrument Systems Inc. Incentive Stock Option
Plan (filed as Exhibit 10(c) to Thermo Instrument's
Registration Statement on Form S-1 [Reg. No. 33-6762]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Instrument Nonqualified Stock Option Plan is
2,812,500 shares, after adjustment to reflect share
increase approved in 1990, 3-for-2 stock splits
effected in January 1988, July 1993 and April 1995 and
5-for-4 stock split effected in December 1995).
10.59 Thermo Instrument Systems Inc. Nonqualified Stock
Option Plan (filed as Exhibit 10(d) to Thermo
Instrument's Registration Statement on Form S-1 [Reg.
No. 33-6762] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate
under this plan and the Thermo Instrument Incentive
Stock Option Plan is 2,812,500 shares, after adjustment
to reflect share increase approved in 1990, 3-for-2
stock splits effected in January 1988, July 1993 and
April 1995 and 5-for-4 stock split effected in December
1995).
10.60 Thermo Instrument Systems Inc. Equity Incentive Plan
(filed as Appendix A to the Proxy Statement dated April
27, 1993 of Thermo Instrument [File No. 1-9786] and
incorporated herein by reference). (Maximum number of
shares issuable is 4,031,250 shares, after adjustment
to reflect share increase approved in December 1993,
3-for-2 stock splits effected in July 1993 and April
1995 and 5-for-4 stock split effected in December
1995).
26PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.61 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(d) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Instrument (formerly Thermo Environmental)
Nonqualified Stock Option Plan is 1,160,156 shares,
after adjustment to reflect share increase approved in
1987, 3-for-2 stock splits effected in July 1993 and
April 1995 and 5-for-4 stock split effected in December
1995).
10.62 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Nonqualified Stock Option
Plan (filed as Exhibit 10(e) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Instrument (formerly Thermo Environmental)
Incentive Stock Option Plan is 1,160,156 shares, after
adjustment to reflect share increase approved in 1987,
3-for-2 stock splits effected in July 1993 and April
1995 and 5-for-4 stock split effected in December
1995).
10.63 Thermo Instrument Systems Inc. - ThermoSpectra
Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.45 to Thermo Power's Annual Report on Form
10-K for the fiscal year ended October 1, 1994 [File
No. 1-10573] and incorporated herein by reference).
10.64 Thermo Instrument Systems Inc. - Thermo BioAnalysis
Corporation Nonqualified Stock Option Plan.
10.65 Thermo Instrument Systems Inc. - ThermoQuest
Corporation Nonqualified Stock Option Plan.
10.66 ThermoSpectra Corporation Equity Incentive Plan (filed
as Exhibit 10.59 to Thermo Power's Annual Report on
Form 10-K for the fiscal year ended October 1, 1994
[File No. 1-10573] and incorporated herein by
reference).
10.67 Thermo BioAnalysis Corporation Equity Incentive Plan.
10.68 Thermo Optek Corporation Equity Incentive Plan.
10.69 ThermoQuest Corporation Equity Incentive Plan.
27PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.70 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(h) to ThermoTrex's Registration
Statement on Form S-1 [Reg. No. 33-40972] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and
the ThermoTrex Nonqualified Stock Option Plan is
1,945,000 shares, after adjustment to reflect share
increases approved in 1992 and 1993 and 3-for-2 stock
split effected in October 1993).
10.71 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Nonqualified Stock Option
Plan (filed as Exhibit 10(i) to ThermoTrex's
Registration Statement on Form S-1 [Reg. No. 33-40972]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the ThermoTrex Incentive Stock Option Plan is 1,945,000
shares, adjustment to reflect share increases approved
in 1992 and 1993 and 3-for-2 stock split effected in
October 1993).
10.72 ThermoTrex Corporation - ThermoLase Corporation
(formerly ThermoLase Inc.) Nonqualified Stock Option
Plan (filed as Exhibit 10.53 to Thermedics' Annual
Report on Form 10-K for the fiscal year ended January
1, 1994 [File No. 1-9567] and incorporated herein by
reference).
10.73 ThermoTrex Corporation - Trex Medical Corporation
Nonqualified Stock Option Plan.
10.74 ThermoLase Corporation (formerly ThermoLase Inc.)
Incentive Stock Option Plan (filed as Exhibit 10.55 to
Thermedics' Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and
the ThermoLase Nonqualified Stock Option Plan is
2,800,000 shares, after adjustment to reflect share
increase approved in 1993 and 2-for-1 stock splits
effected in March 1994 and June 1995).
10.75 ThermoLase Corporation (formerly ThermoLase Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10.54
to Thermedics' Annual Report on Form 10-K for the
fiscal year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and
the ThermoLase Incentive Stock Option Plan is 2,800,000
shares, after adjustment to reflect share increase
approved in 1993 and 2-for-1 stock splits effected in
March 1994 and June 1995).
28PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
10.76 ThermoLase Corporation Equity Incentive Plan (filed as
Exhibit 10.81 to Thermo TerraTech's (formerly Thermo
Process') Annual Report on Form 10-K for the fiscal
year ended April 1, 1995 [File No. 1-9549] and
incorporated herein by reference).
10.77 Trex Medical Corportion Equity Incentive Plan.
10.78 Thermo Fibertek Inc. Incentive Stock Option Plan (filed
as Exhibit 10(k) to Thermo Fibertek's Registration
Statement on Form S-1 [Reg. No. 33-51172] and
incorporated herein by reference).
10.79 Thermo Fibertek Inc. Nonqualified Stock Option Plan
(filed as Exhibit 10(l) to Thermo Fibertek's
Registration Statement on Form S-1 [Reg. No. 33-51172]
and incorporated herein by reference).
10.80 Thermo Fibertek Inc. Equity Incentive Plan (filed as
Attachment A to the Proxy Statement dated May 3, 1994
of Thermo Fibertek [File No. 1-11406] and incorporated
herein by reference).
10.81 Thermo Power Corporation (formerly Tecogen Inc.)
Incentive Stock Option Plan, as amended (filed as
Exhibit 10(h) to Thermo Power's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 3, 1993
[File No. 1-10573] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Power
Nonqualified Stock Option plan is 950,000 shares, after
adjustment to reflect share increases approved in 1990,
1992 and 1993).
10.82 Thermo Power Corporation (formerly Tecogen Inc.)
Nonqualified Stock Option Plan, as amended (filed as
Exhibit 10(i) to Thermo Power's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 3, 1993
[File No. 1-10573] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Power
Incentive Stock Option Plan is 950,000 shares, after
adjustment to reflect share increases approved in 1990,
1992 and 1993).
10.83 Thermo Power Corporation Equity Incentive Plan (filed
as Exhibit 10.60 to Thermedics' Annual Report on Form
10-K for the fiscal year ended January 1, 1994 [File
No. 1-9567] and incorporated herein by reference).
10.84 Thermo Power Corporation - ThermoLyte Corporation
Nonqualified Stock Option Plan.
29PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.85 ThermoLyte Corporation Equity Incentive Plan (filed as
Exhibit 10.71 to Thermo Power's Annual Report on Form
10-K for the fiscal year ended September 30, 1995 [File
No. 1-10573] and incorporated herein by reference).
10.86 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) Incentive Stock Option Plan (filed as Exhibit
10(h) to Thermo TerraTech's Registration Statement on
Form S-1 [Reg. No. 33-6763] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo TerraTech
Nonqualified Stock Option Plan is 1,850,000 shares,
after adjustment to reflect share increases approved in
1987, 1989 and 1992, 6-for-5 stock splits effected in
July 1988 and March 1989 and 3-for-2 stock split
effected in September 1989).
10.87 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) Nonqualified Stock Option Plan (filed as Exhibit
10(i) to Thermo TerraTech's Registration Statement on
Form S-1 [Reg. No. 33-6763] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo TerraTech
Incentive Stock Option Plan is 1,850,000 shares, after
adjustment to reflect share increases approved in 1987,
1989 and 1992, 6-for-5 stock splits effected in July
1988 and March 1989 and 3-for-2 stock split effected in
September 1989).
10.88 Thermo Terra Tech Inc. (formerly Thermo Process Systems
Inc.) Equity Incentive Plan (filed as Exhibit 10.63 to
Thermedics' Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference). (Maximum number of
shares issuable is 1,750,000 shares, after adjustment
to reflect share increase approved in 1994).
10.89 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) - Thermo Remediation Nonqualified Stock Option
Plan (filed as Exhibit 10(l) to Thermo TerraTech's
Quarterly Report on Form 10-Q for the fiscal quarter
ended January 1, 1994 [File No. 1-9549] and
incorporated herein by reference).
10.90 Thermo Remediation Inc. Equity Incentive Plan (filed as
Exhibit 10.7 to Thermo Remediation's Registration
Statement on Form S-1 [Reg. No. 33-70544] and
incorporated herein by reference).
30PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
-------------------------------------------------------------------------
11 Statement re: Computation of Earnings per Share.
13 Annual Report to Shareholders for the year ended
December 30, 1995 (only those portions incorporated
herein by reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
EXHIBIT 10.41
THERMO ELECTRON CORPORATION
THERMOQUEST NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of ThermoQuest Corporation ("Subsidiary"), a
subsidiary of Thermo Electron Corporation (the "Company"), by
persons selected by the Board of Directors (or a committee
thereof) in its sole discretion, including directors, executive
officers, key employees and consultants of the Company and its
subsidiaries, and to provide additional incentive for them to
promote the success of the business of the Company and
Subsidiary. The Plan is intended to be a nonstatutory stock
option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 375,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
PAGE
<PAGE>
advisable and not inconsistent with the Plan). In making such
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
PAGE
<PAGE>
that such Tendered Shares shall have been acquired by the
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
PAGE
<PAGE>
the option, be entitled to receive shares of stock or other
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
PAGE
<PAGE>
Common Stock as will be sufficient to satisfy the requirements of
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
PAGE
<PAGE>
with the Plan. The Board of Directors shall have the right to
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2006 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.42
THERMO ELECTRON CORPORATION
THERMO OPTEK NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of Thermo Optek Corporation ("Subsidiary"), a
subsidiary of Thermo Electron Corporation (the "Company"), by
persons selected by the Board of Directors (or a committee
thereof) in its sole discretion, including directors, executive
officers, key employees and consultants of the Company and its
subsidiaries, and to provide additional incentive for them to
promote the success of the business of the Company and
Subsidiary. The Plan is intended to be a nonstatutory stock
option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 250,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
PAGE
<PAGE>
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
PAGE
<PAGE>
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
PAGE
<PAGE>
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
PAGE
<PAGE>
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
PAGE
<PAGE>
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2006 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.43
THERMO ELECTRON CORPORATION
THERMO SENTRON NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of Thermo Sentron Inc. ("Subsidiary"), a
subsidiary of Thermo Electron Corporation (the "Company"), by
persons selected by the Board of Directors (or a committee
thereof) in its sole discretion, including directors, executive
officers, key employees and consultants of the Company and its
subsidiaries, and to provide additional incentive for them to
promote the success of the business of the Company and
Subsidiary. The Plan is intended to be a nonstatutory stock
option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 150,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
PAGE
<PAGE>
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
PAGE
<PAGE>
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
PAGE
<PAGE>
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
PAGE
<PAGE>
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
PAGE
<PAGE>
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2006 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.44
THERMO ELECTRON CORPORATION
TREX MEDICAL NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of Trex Medical Corporation ("Subsidiary"), a
subsidiary of Thermo Electron Corporation (the "Company"), by
persons selected by the Board of Directors (or a committee
thereof) in its sole discretion, including directors, executive
officers, key employees and consultants of the Company and its
subsidiaries, and to provide additional incentive for them to
promote the success of the business of the Company and
Subsidiary. The Plan is intended to be a nonstatutory stock
option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 250,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
PAGE
<PAGE>
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
PAGE
<PAGE>
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
PAGE
<PAGE>
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
PAGE
<PAGE>
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
PAGE
<PAGE>
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2006 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.51
THERMEDICS INC.
THERMO SENTRON NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of Thermo Sentron Inc. ("Subsidiary"), a
subsidiary of Thermedics Inc. (the "Company"), by persons
selected by the Board of Directors (or a committee thereof) in
its sole discretion, including directors, executive officers, key
employees and consultants of the Company and its subsidiaries,
and to provide additional incentive for them to promote the
success of the business of the Company and Subsidiary. The Plan
is intended to be a nonstatutory stock option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 100,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
determinations, the Committee may take into account the nature of
PAGE
<PAGE>
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
Optionee more than six months prior to the date of exercise,
PAGE
<PAGE>
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
securities in its place equivalent in kind and value to those
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shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
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this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
PAGE
<PAGE>
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2005 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.57
THERMO SENTRON INC.
EQUITY INCENTIVE PLAN
1. Purpose
-------
The purpose of this Equity Incentive Plan (the "Plan") is to
secure for Thermo Sentron Inc. (the "Company") and its
Stockholders the benefits arising from capital stock ownership by
employees, officers 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 the common stock, $.01 par value per share,
of the Company (the "Common Stock"), reserved and available for
distribution under the Plan shall be 700,000 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, officers 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.
PAGE
<PAGE>
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
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4
shorter period) and that have a fair market value (determined in
accordance with procedures prescribed by the Board) equal to the
exercise price, (ii) by delivery of a promissory note of the
option holder to the Company, payable on such terms as are
specified by the Board, (iii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by
any combination of the permissible forms of payment.
6.1.5 Buyout Provision. The Board may at any time offer
to buy out for a payment in cash, shares of Common Stock,
deferred stock or restricted stock, an option previously granted,
based on such terms and conditions as the Board shall establish
and communicate to the option holder at the time that such offer
is made.
6.1.6 Special Rules for Incentive Stock Options. Each
provision of the Plan and each option agreement evidencing an
incentive stock option shall be construed so that each incentive
stock option shall be an incentive stock option as defined in
Section 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
PAGE
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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, Thermedics Inc.
("Thermedics"), or the beneficial owner of 25% or more of the
outstanding common stock of Thermo Electron Corporation ("Thermo
Electron"), without the prior approval of the Prior Directors of
the applicable issuer, (ii) the failure of the Prior Directors to
constitute a majority of the Board of Directors of the Company,
Thermedics 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, Thermedics 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, Thermedics' 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, Thermedics 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, Thermedics 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, Thermedics' or Thermo Electron's Common Stock,
not approved by the Prior Directors, by any Person other
than the Company, Thermedics, Thermo Electron or a
majority-owned subsidiary of Thermo Electron.
PAGE
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9
10. General Provisions
------------------
10.1 Documentation of Awards
-----------------------
Awards will be evidenced by written instruments, which may
differ among Participants, prescribed by the Board from time to
time. Such instruments may be in the form of agreements to be
executed by both the Participant and the Company or certificates,
letters or similar instruments which need not be executed by the
participant but acceptance of which will evidence agreement to
the terms thereof. Such instruments shall conform to the
requirements of the Plan and may contain such other provisions
(including provisions relating to events of merger,
consolidation, dissolution and liquidations, change of control
and restrictions affecting either the agreement or the Common
Stock issued thereunder), as the Board deems advisable.
10.2 Rights as a Stockholder
-----------------------
Except as specifically provided by the Plan or the
instrument evidencing the Award, the receipt of an Award will not
give a Participant rights as a Stockholder with respect to any
shares covered by an Award until the date of issue of a stock
certificate to the participant for such shares.
10.3 Conditions on Delivery of Stock
-------------------------------
The Company will not be obligated to deliver any shares of
Common Stock pursuant to the Plan or to remove any restriction
from shares previously delivered under the Plan (a) until all
conditions of the Award have been satisfied or removed, (b)
until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with,
(c) if the outstanding Common Stock is at the time listed on any
stock exchange, until the shares have been listed or authorized
to be listed on such exchange upon official notice of issuance,
and (d) until all other legal matters in connection with the
issuance and delivery of such shares have been approved by the
Company's counsel. If the sale of Common Stock has not been
registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of the Award,
such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such act and may
require that the certificates evidencing such Common Stock bear
an appropriate legend restricting transfer.
If an Award is exercised by the participant's legal
representative, the Company will be under no obligation to
deliver Common Stock pursuant to such exercise until the Company
is satisfied as to the authority of such representative.
10.4 Tax Withholding
---------------
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10
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 otherwise specifically provided by the Board in
the case of participants who are not reporting persons under
Section 16 of the Exchange Act, 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 the
laws of descent and distribution, except pursuant to the terms of
a qualified domestic relations order as defined in the Code, 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).
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.
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11
10.7 Employment Rights
-----------------
Neither the adoption of the Plan nor the grant of Awards
will confer upon any person any right to continued employment
with the Company or any subsidiary or interfere in any way with
the right of the Company or subsidiary to terminate any
employment relationship at any time or to increase or decrease
the compensation of such person. Except as specifically provided
by the Board in any particular case, the loss of existing or
potential profit in Awards granted under the Plan will not
constitute an element of damages in the event of termination of
an employment relationship even if the termination is in
violation of an obligation of the Company to the employee.
Whether an authorized leave of absence, or absence in
military or government service, shall constitute termination of
employment shall be determined by the Board at the time. For
purposes of this Plan, transfer of employment between the Company
and its subsidiaries shall not be deemed termination of
employment.
10.8 Other Employee Benefits
-----------------------
The value of an Award granted to a Participant who is an
employee, and the amount of any compensation deemed to be
received by an employee as a result of any exercise or purchase
of Common Stock pursuant to an Award or sale of shares received
under the Plan, will not constitute "earnings" or "compensation"
with respect to which any other employee benefits of such
employee are determined, including without limitation benefits
under any pension, stock ownership, stock purchase, life
insurance, medical, health, disability or salary continuation
plan.
10.9 Legal Holidays
--------------
If any day on or before which action under the Plan must be
taken falls on a Saturday, Sunday or legal holiday, such action
may be taken on the next succeeding day not a Saturday, Sunday or
legal holiday.
10.10 Foreign Nationals
-----------------
Without amending the Plan, Awards may be granted to persons
who are foreign nationals or employed outside the United States
or both, on such terms and conditions different from those
specified in the Plan, as may, in the judgment of the Board, be
necessary or desirable to further the purpose of the Plan.
PAGE
<PAGE>
12
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 10.64
THERMO INSTRUMENT SYSTEMS INC.
THERMO BIOANALYSIS NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.001 par value (the
"Common Stock"), of Thermo BioAnalysis Corporation
("Subsidiary"), a subsidiary of Thermo Instrument Systems Inc.
(the "Company"), by persons selected by the Board of Directors
(or a committee thereof) in its sole discretion, including
directors, executive officers, key employees and consultants of
the Company and its subsidiaries, and to provide additional
incentive for them to promote the success of the business of the
Company and Subsidiary. The Plan is intended to be a
nonstatutory stock option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 100,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
PAGE
<PAGE>
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
PAGE
<PAGE>
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
PAGE
<PAGE>
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
PAGE
<PAGE>
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
PAGE
<PAGE>
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2005 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.65
THERMO INSTRUMENT SYSTEMS INC.
THERMOQUEST NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of ThermoQuest Corporation ("Subsidiary"), a
subsidiary of Thermo Instrument Systems Inc. (the "Company"), by
persons selected by the Board of Directors (or a committee
thereof) in its sole discretion, including directors, executive
officers, key employees and consultants of the Company and its
subsidiaries, and to provide additional incentive for them to
promote the success of the business of the Company and
Subsidiary. The Plan is intended to be a nonstatutory stock
option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 750,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
PAGE
<PAGE>
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
PAGE
<PAGE>
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
PAGE
<PAGE>
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
PAGE
<PAGE>
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
PAGE
<PAGE>
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2005 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.67
THERMO BIOANALYSIS CORPORATION
EQUITY INCENTIVE PLAN
1. Purpose
-------
The purpose of this Equity Incentive Plan (the "Plan") is to
secure for Thermo BioAnalysis Corporation (the "Company") and its
Stockholders the benefits arising from capital stock ownership by
employees, officers 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
--------------
PAGE
<PAGE>
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 the common stock, $.01 par value per share,
of the Company (the "Common Stock"), reserved and available for
distribution under the Plan shall be 600,000 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, officers 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
PAGE
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3
applicable under federal tax laws or regulations or the federal
securities laws relating to the type of Award granted.
Without limiting the foregoing, Awards may take the
following forms and shall be subject to the following rules and
conditions:
6.1 Options
-------
An option is an Award that entitles the holder on exercise
thereof to purchase Common Stock at a specified exercise price.
Options granted under the Plan may be either incentive stock
options ("incentive stock options") that meet the requirements of
Section 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
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4
delivery of shares of Common Stock that have been outstanding for
at least six months (unless the Board expressly approves a
shorter period) and that have a fair market value (determined in
accordance with procedures prescribed by the Board) equal to the
exercise price, (ii) by delivery of a promissory note of the
option holder to the Company, payable on such terms as are
specified by the Board, (iii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by
any combination of the permissible forms of payment.
6.1.5 Buyout Provision. The Board may at any time offer
to buy out for a payment in cash, shares of Common Stock,
deferred stock or restricted stock, an option previously granted,
based on such terms and conditions as the Board shall establish
and communicate to the option holder at the time that such offer
is made.
6.1.6 Special Rules for Incentive Stock Options. Each
provision of the Plan and each option agreement evidencing an
incentive stock option shall be construed so that each incentive
stock option shall be an incentive stock option as defined in
Section 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
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5
of mergers, consolidations, dissolutions and liquidations) as the
Board shall deem advisable.
6.2.2 Restrictions. Until the restrictions specified in
a restricted stock agreement shall lapse, restricted stock may
not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of, and upon certain conditions specified
in the restricted stock agreement, must be resold to the Company
for the price, if any, specified in such agreement. The
restrictions shall lapse at such time or times, and on such
conditions, as the Board may specify. The Board may at any time
accelerate the time at which the restrictions on all or any part
of the shares shall lapse.
6.2.3 Rights as a Stockholder. A Participant who
acquires shares of restricted stock will have all of the rights
of a Stockholder with respect to such shares including the right
to receive dividends and to vote such shares. Unless the Board
otherwise determines, certificates evidencing shares of
restricted stock will remain in the possession of the Company
until such shares are free of all restrictions under the Plan.
6.2.4 Purchase Price . The purchase price of shares of
restricted stock shall be determined by the Board, in its sole
discretion, but such price may not be less than the par value of
such shares.
6.2.5 Other Awards Settled With Restricted Stock . The
Board may provide that any or all the Common Stock delivered
pursuant to an Award will be restricted stock.
6.2.6 Unrestricted Stock. The Board may, in its sole
discretion, sell to any Participant shares of Common Stock free
of restrictions under the Plan for a price determined by the
Board, but which may not be less than the par value per share of
the Common Stock.
6.3 Deferred Stock
--------------
6.3.1 Deferred Stock Award . A deferred stock Award
entitles the recipient to receive shares of deferred stock which
is Common Stock to be delivered in the future. Delivery of the
Common Stock will take place at such time or times, and on such
conditions, as the Board may specify. The Board may at any time
accelerate the time at which delivery of all or any part of the
Common Stock will take place.
6.3.2 Other Awards Settled with Deferred Stock. The
Board may, at the time any Award described in this Section 6 is
granted, provide that, at the time Common Stock would otherwise
be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the right to future delivery of
deferred stock.
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<PAGE>
6
6.4 Performance Awards
------------------
6.4.1 Performance Awards . A performance Award entitles
the recipient to receive, without payment, an Amount, in cash or
Common Stock or a combination thereof (such form to be determined
by the Board), following the attainment of performance goals.
Performance goals may be related to personal performance,
corporate performance, departmental performance or any other
category of performance deemed by the Board to be important to
the success of the Company. The Board will determine the
performance goals, the period or periods during which performance
is to be measured and all other terms and conditions applicable
to the Award.
6.4.2 Other Awards Subject to Performance Conditions.
The Board may, at the time any Award described in this Section 6
is granted, impose the condition (in addition to any conditions
specified or authorized in this Section 6 of the Plan) that
performance goals be met prior to the Participant's realization
of any payment or benefit under the Award.
7. Purchase Price and Payment
--------------------------
Except as otherwise provided in the Plan, the purchase price
of Common Stock to be acquired pursuant to an Award shall be the
price determined by the Board, provided that such price shall not
be less than the par value of the Common Stock. Except as
otherwise provided in the Plan, the Board may determine the
method of payment of the exercise price or purchase price of an
Award granted under the Plan and the form of payment. The Board
may determine that all or any part of the purchase price of
Common Stock pursuant to an Award has been satisfied by past
services rendered by the Participant. The Board may agree at any
time, upon request of the Participant, to defer the date on which
any payment under an Award will be made.
8. Loans and Supplemental Grants
-----------------------------
The Company may make a loan to a Participant, either on or
after the grant to the Participant of any Award, in connection
with the purchase of Common Stock under the Award or with the
payment of any obligation incurred or recognized as a result of
the Award. The Board will have full authority to decide whether
the loan is to be secured or unsecured or with or without
recourse against the borrower, the terms on which the loan is to
be repaid and the conditions, if any, under which it may be
forgiven.
In connection with any Award, the Board may at the time such
Award is made or at a later date, provide for and make a cash
payment to the participant not to exceed an amount equal to (a)
the amount of any federal, state and local income tax or ordinary
income for which the Participant will be liable with respect to
the Award, plus (b) an additional amount on a grossed-up basis
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<PAGE>
7
necessary to make him or her whole after tax, discharging all the
participant's income tax liabilities arising from all payments
under the Plan.
9. Change in Control
-----------------
9.1 Impact of Event
---------------
In the event of a "Change in Control" as defined in Section
9.2, the following provisions shall apply, unless the agreement
evidencing the Award otherwise provides:
(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.
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8
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 Instrument
Systems Inc. ("Thermo Instrument"), 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 Instrument 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 Instrument or Thermo Electron. As
used in the preceding sentence, the following capitalized terms
shall have the respective meanings set forth below:
(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 Instrument'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 Instrument 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 Instrument 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 Instrument's or Thermo Electron's Common
Stock, not approved by the Prior Directors, by any Person
other than the Company, Thermo Instrument, 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
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9
time. Such instruments may be in the form of agreements to be
executed by both the Participant and the Company or certificates,
letters or similar instruments which need not be executed by the
participant but acceptance of which will evidence agreement to
the terms thereof. Such instruments shall conform to the
requirements of the Plan and may contain such other provisions
(including provisions relating to events of merger,
consolidation, dissolution and liquidations, change of control
and restrictions affecting either the agreement or the Common
Stock issued thereunder), as the Board deems advisable.
10.2 Rights as a Stockholder
-----------------------
Except as specifically provided by the Plan or the
instrument evidencing the Award, the receipt of an Award will not
give a Participant rights as a Stockholder with respect to any
shares covered by an Award until the date of issue of a stock
certificate to the participant for such shares.
10.3 Conditions on Delivery of Stock
-------------------------------
The Company will not be obligated to deliver any shares of
Common Stock pursuant to the Plan or to remove any restriction
from shares previously delivered under the Plan (a) until all
conditions of the Award have been satisfied or removed, (b)
until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with,
(c) if the outstanding Common Stock is at the time listed on any
stock exchange, until the shares have been listed or authorized
to be listed on such exchange upon official notice of issuance,
and (d) until all other legal matters in connection with the
issuance and delivery of such shares have been approved by the
Company's counsel. If the sale of Common Stock has not been
registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of the Award,
such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such act and may
require that the certificates evidencing such Common Stock bear
an appropriate legend restricting transfer.
If an Award is exercised by the participant's legal
representative, the Company will be under no obligation to
deliver Common Stock pursuant to such exercise until the Company
is satisfied as to the authority of such representative.
10.4 Tax Withholding
---------------
The Company will withhold from any cash payment made
pursuant to an Award an amount sufficient to satisfy all federal,
state and local withholding tax requirements (the "withholding
requirements").
In the case of an Award pursuant to which Common Stock may
be delivered, the Board will have the right to require that the
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10
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 otherwise specifically provided by the Board in
the case of participants who are not reporting persons under
Section 16 of the Exchange Act, 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 the
laws of descent and distribution, except pursuant to the terms of
a qualified domestic relations order as defined in the Code, 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).
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
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11
employment relationship at any time or to increase or decrease
the compensation of such person. Except as specifically provided
by the Board in any particular case, the loss of existing or
potential profit in Awards granted under the Plan will not
constitute an element of damages in the event of termination of
an employment relationship even if the termination is in
violation of an obligation of the Company to the employee.
Whether an authorized leave of absence, or absence in
military or government service, shall constitute termination of
employment shall be determined by the Board at the time. For
purposes of this Plan, transfer of employment between the Company
and its subsidiaries shall not be deemed termination of
employment.
10.8 Other Employee Benefits
-----------------------
The value of an Award granted to a Participant who is an
employee, and the amount of any compensation deemed to be
received by an employee as a result of any exercise or purchase
of Common Stock pursuant to an Award or sale of shares received
under the Plan, will not constitute "earnings" or "compensation"
with respect to which any other employee benefits of such
employee are determined, including without limitation benefits
under any pension, stock ownership, stock purchase, life
insurance, medical, health, disability or salary continuation
plan.
10.9 Legal Holidays
--------------
If any day on or before which action under the Plan must be
taken falls on a Saturday, Sunday or legal holiday, such action
may be taken on the next succeeding day not a Saturday, Sunday or
legal holiday.
10.10 Foreign Nationals
-----------------
Without amending the Plan, Awards may be granted to persons
who are foreign nationals or employed outside the United States
or both, on such terms and conditions different from those
specified in the Plan, as may, in the judgment of the Board, be
necessary or desirable to further the purpose of the Plan.
11. Termination and Amendment
-------------------------
The Plan shall remain in full force and effect until
terminated by the Board. Subject to the last sentence of this
Section 11, the Board may at any time or times amend the Plan or
any outstanding Award for any purpose that may at the time be
permitted by law, or may at any time terminate the Plan as to any
further grants of Awards. No amendment, 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
PAGE
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12
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 10.68
THERMO OPTEK CORPORATION
EQUITY INCENTIVE PLAN
1. Purpose
-------
The purpose of this Equity Incentive Plan (the "Plan") is to
secure for Thermo Optek Corporation (the "Company") and its
Stockholders the benefits arising from capital stock ownership by
employees, officers 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 the common stock, $.01 par value per share,
of the Company (the "Common Stock"), reserved and available for
distribution under the Plan shall be 1,800,000 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, officers 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
PAGE
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3
applicable under federal tax laws or regulations or the federal
securities laws relating to the type of Award granted.
Without limiting the foregoing, Awards may take the
following forms and shall be subject to the following rules and
conditions:
6.1 Options
-------
An option is an Award that entitles the holder on exercise
thereof to purchase Common Stock at a specified exercise price.
Options granted under the Plan may be either incentive stock
options ("incentive stock options") that meet the requirements of
Section 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
PAGE
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4
delivery of shares of Common Stock that have been outstanding for
at least six months (unless the Board expressly approves a
shorter period) and that have a fair market value (determined in
accordance with procedures prescribed by the Board) equal to the
exercise price, (ii) by delivery of a promissory note of the
option holder to the Company, payable on such terms as are
specified by the Board, (iii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by
any combination of the permissible forms of payment.
6.1.5 Buyout Provision. The Board may at any time offer
to buy out for a payment in cash, shares of Common Stock,
deferred stock or restricted stock, an option previously granted,
based on such terms and conditions as the Board shall establish
and communicate to the option holder at the time that such offer
is made.
6.1.6 Special Rules for Incentive Stock Options. Each
provision of the Plan and each option agreement evidencing an
incentive stock option shall be construed so that each incentive
stock option shall be an incentive stock option as defined in
Section 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
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5
of mergers, consolidations, dissolutions and liquidations) as the
Board shall deem advisable.
6.2.2 Restrictions. Until the restrictions specified in
a restricted stock agreement shall lapse, restricted stock may
not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of, and upon certain conditions specified
in the restricted stock agreement, must be resold to the Company
for the price, if any, specified in such agreement. The
restrictions shall lapse at such time or times, and on such
conditions, as the Board may specify. The Board may at any time
accelerate the time at which the restrictions on all or any part
of the shares shall lapse.
6.2.3 Rights as a Stockholder. A Participant who
acquires shares of restricted stock will have all of the rights
of a Stockholder with respect to such shares including the right
to receive dividends and to vote such shares. Unless the Board
otherwise determines, certificates evidencing shares of
restricted stock will remain in the possession of the Company
until such shares are free of all restrictions under the Plan.
6.2.4 Purchase Price . The purchase price of shares of
restricted stock shall be determined by the Board, in its sole
discretion, but such price may not be less than the par value of
such shares.
6.2.5 Other Awards Settled With Restricted Stock . The
Board may provide that any or all the Common Stock delivered
pursuant to an Award will be restricted stock.
6.2.6 Unrestricted Stock. The Board may, in its sole
discretion, sell to any Participant shares of Common Stock free
of restrictions under the Plan for a price determined by the
Board, but which may not be less than the par value per share of
the Common Stock.
6.3 Deferred Stock
--------------
6.3.1 Deferred Stock Award . A deferred stock Award
entitles the recipient to receive shares of deferred stock which
is Common Stock to be delivered in the future. Delivery of the
Common Stock will take place at such time or times, and on such
conditions, as the Board may specify. The Board may at any time
accelerate the time at which delivery of all or any part of the
Common Stock will take place.
6.3.2 Other Awards Settled with Deferred Stock. The
Board may, at the time any Award described in this Section 6 is
granted, provide that, at the time Common Stock would otherwise
be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the right to future delivery of
deferred stock.
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6
6.4 Performance Awards
------------------
6.4.1 Performance Awards . A performance Award entitles
the recipient to receive, without payment, an Amount, in cash or
Common Stock or a combination thereof (such form to be determined
by the Board), following the attainment of performance goals.
Performance goals may be related to personal performance,
corporate performance, departmental performance or any other
category of performance deemed by the Board to be important to
the success of the Company. The Board will determine the
performance goals, the period or periods during which performance
is to be measured and all other terms and conditions applicable
to the Award.
6.4.2 Other Awards Subject to Performance Conditions.
The Board may, at the time any Award described in this Section 6
is granted, impose the condition (in addition to any conditions
specified or authorized in this Section 6 of the Plan) that
performance goals be met prior to the Participant's realization
of any payment or benefit under the Award.
7. Purchase Price and Payment
--------------------------
Except as otherwise provided in the Plan, the purchase price
of Common Stock to be acquired pursuant to an Award shall be the
price determined by the Board, provided that such price shall not
be less than the par value of the Common Stock. Except as
otherwise provided in the Plan, the Board may determine the
method of payment of the exercise price or purchase price of an
Award granted under the Plan and the form of payment. The Board
may determine that all or any part of the purchase price of
Common Stock pursuant to an Award has been satisfied by past
services rendered by the Participant. The Board may agree at any
time, upon request of the Participant, to defer the date on which
any payment under an Award will be made.
8. Loans and Supplemental Grants
-----------------------------
The Company may make a loan to a Participant, either on or
after the grant to the Participant of any Award, in connection
with the purchase of Common Stock under the Award or with the
payment of any obligation incurred or recognized as a result of
the Award. The Board will have full authority to decide whether
the loan is to be secured or unsecured or with or without
recourse against the borrower, the terms on which the loan is to
be repaid and the conditions, if any, under which it may be
forgiven.
In connection with any Award, the Board may at the time such
Award is made or at a later date, provide for and make a cash
payment to the participant not to exceed an amount equal to (a)
the amount of any federal, state and local income tax or ordinary
income for which the Participant will be liable with respect to
the Award, plus (b) an additional amount on a grossed-up basis
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7
necessary to make him or her whole after tax, discharging all the
participant's income tax liabilities arising from all payments
under the Plan.
9. Change in Control
-----------------
9.1 Impact of Event
---------------
In the event of a "Change in Control" as defined in Section
9.2, the following provisions shall apply, unless the agreement
evidencing the Award otherwise provides:
(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 Instrument
Systems Inc. ("Thermo Instrument"), 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 Instrument 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 Instrument 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 Instrument'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 Instrument 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 Instrument 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 Instrument's or Thermo Electron's Common
Stock, not approved by the Prior Directors, by any Person
other than the Company, Thermo Instrument, 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
-------------------------------
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9
The Company will not be obligated to deliver any shares of
Common Stock pursuant to the Plan or to remove any restriction
from shares previously delivered under the Plan (a) until all
conditions of the Award have been satisfied or removed, (b)
until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with,
(c) if the outstanding Common Stock is at the time listed on any
stock exchange, until the shares have been listed or authorized
to be listed on such exchange upon official notice of issuance,
and (d) until all other legal matters in connection with the
issuance and delivery of such shares have been approved by the
Company's counsel. If the sale of Common Stock has not been
registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of the Award,
such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such act and may
require that the certificates evidencing such Common Stock bear
an appropriate legend restricting transfer.
If an Award is exercised by the participant's legal
representative, the Company will be under no obligation to
deliver Common Stock pursuant to such exercise until the Company
is satisfied as to the authority of such representative.
10.4 Tax Withholding
---------------
The Company will withhold from any cash payment made
pursuant to an Award an amount sufficient to satisfy all federal,
state and local withholding tax requirements (the "withholding
requirements").
In the case of an Award pursuant to which Common Stock may
be delivered, the Board will have the right to require that the
participant or other appropriate person remit to the Company an
amount sufficient to satisfy the withholding requirements, or
make other arrangements satisfactory to the Board with regard to
such requirements, prior to the delivery of any Common Stock. If
and to the extent that such withholding is required, the Board
may permit the participant or such other person to elect at such
time and in such manner as the Board provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirement.
10.5 Nontransferability of Awards
----------------------------
Except as otherwise specifically provided by the Board in
the case of participants who are not reporting persons under
Section 16 of the Exchange Act, 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 the
laws of descent and distribution, except pursuant to the terms of
a qualified domestic relations order as defined in the Code, and
during a Participant's lifetime an Award requiring exercise may
PAGE
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10
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).
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 10.69
THERMOQUEST CORPORATION
EQUITY INCENTIVE PLAN
1. Purpose
-------
The purpose of this Equity Incentive Plan (the "Plan") is to
secure for ThermoQuest Corporation (the "Company") and its
Stockholders the benefits arising from capital stock ownership by
employees, officers 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 the common stock, $.01 par value per share,
of the Company (the "Common Stock"), reserved and available for
distribution under the Plan shall be 1,800,000 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, officers 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
PAGE
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3
applicable under federal tax laws or regulations or the federal
securities laws relating to the type of Award granted.
Without limiting the foregoing, Awards may take the
following forms and shall be subject to the following rules and
conditions:
6.1 Options
-------
An option is an Award that entitles the holder on exercise
thereof to purchase Common Stock at a specified exercise price.
Options granted under the Plan may be either incentive stock
options ("incentive stock options") that meet the requirements of
Section 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
PAGE
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4
delivery of shares of Common Stock that have been outstanding for
at least six months (unless the Board expressly approves a
shorter period) and that have a fair market value (determined in
accordance with procedures prescribed by the Board) equal to the
exercise price, (ii) by delivery of a promissory note of the
option holder to the Company, payable on such terms as are
specified by the Board, (iii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by
any combination of the permissible forms of payment.
6.1.5 Buyout Provision. The Board may at any time offer
to buy out for a payment in cash, shares of Common Stock,
deferred stock or restricted stock, an option previously granted,
based on such terms and conditions as the Board shall establish
and communicate to the option holder at the time that such offer
is made.
6.1.6 Special Rules for Incentive Stock Options. Each
provision of the Plan and each option agreement evidencing an
incentive stock option shall be construed so that each incentive
stock option shall be an incentive stock option as defined in
Section 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
PAGE
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5
of mergers, consolidations, dissolutions and liquidations) as the
Board shall deem advisable.
6.2.2 Restrictions. Until the restrictions specified in
a restricted stock agreement shall lapse, restricted stock may
not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of, and upon certain conditions specified
in the restricted stock agreement, must be resold to the Company
for the price, if any, specified in such agreement. The
restrictions shall lapse at such time or times, and on such
conditions, as the Board may specify. The Board may at any time
accelerate the time at which the restrictions on all or any part
of the shares shall lapse.
6.2.3 Rights as a Stockholder. A Participant who
acquires shares of restricted stock will have all of the rights
of a Stockholder with respect to such shares including the right
to receive dividends and to vote such shares. Unless the Board
otherwise determines, certificates evidencing shares of
restricted stock will remain in the possession of the Company
until such shares are free of all restrictions under the Plan.
6.2.4 Purchase Price . The purchase price of shares of
restricted stock shall be determined by the Board, in its sole
discretion, but such price may not be less than the par value of
such shares.
6.2.5 Other Awards Settled With Restricted Stock . The
Board may provide that any or all the Common Stock delivered
pursuant to an Award will be restricted stock.
6.2.6 Unrestricted Stock. The Board may, in its sole
discretion, sell to any Participant shares of Common Stock free
of restrictions under the Plan for a price determined by the
Board, but which may not be less than the par value per share of
the Common Stock.
6.3 Deferred Stock
--------------
6.3.1 Deferred Stock Award . A deferred stock Award
entitles the recipient to receive shares of deferred stock which
is Common Stock to be delivered in the future. Delivery of the
Common Stock will take place at such time or times, and on such
conditions, as the Board may specify. The Board may at any time
accelerate the time at which delivery of all or any part of the
Common Stock will take place.
6.3.2 Other Awards Settled with Deferred Stock. The
Board may, at the time any Award described in this Section 6 is
granted, provide that, at the time Common Stock would otherwise
be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the right to future delivery of
deferred stock.
PAGE
<PAGE>
6
6.4 Performance Awards
------------------
6.4.1 Performance Awards . A performance Award entitles
the recipient to receive, without payment, an Amount, in cash or
Common Stock or a combination thereof (such form to be determined
by the Board), following the attainment of performance goals.
Performance goals may be related to personal performance,
corporate performance, departmental performance or any other
category of performance deemed by the Board to be important to
the success of the Company. The Board will determine the
performance goals, the period or periods during which performance
is to be measured and all other terms and conditions applicable
to the Award.
6.4.2 Other Awards Subject to Performance Conditions.
The Board may, at the time any Award described in this Section 6
is granted, impose the condition (in addition to any conditions
specified or authorized in this Section 6 of the Plan) that
performance goals be met prior to the Participant's realization
of any payment or benefit under the Award.
7. Purchase Price and Payment
--------------------------
Except as otherwise provided in the Plan, the purchase price
of Common Stock to be acquired pursuant to an Award shall be the
price determined by the Board, provided that such price shall not
be less than the par value of the Common Stock. Except as
otherwise provided in the Plan, the Board may determine the
method of payment of the exercise price or purchase price of an
Award granted under the Plan and the form of payment. The Board
may determine that all or any part of the purchase price of
Common Stock pursuant to an Award has been satisfied by past
services rendered by the Participant. The Board may agree at any
time, upon request of the Participant, to defer the date on which
any payment under an Award will be made.
8. Loans and Supplemental Grants
-----------------------------
The Company may make a loan to a Participant, either on or
after the grant to the Participant of any Award, in connection
with the purchase of Common Stock under the Award or with the
payment of any obligation incurred or recognized as a result of
the Award. The Board will have full authority to decide whether
the loan is to be secured or unsecured or with or without
recourse against the borrower, the terms on which the loan is to
be repaid and the conditions, if any, under which it may be
forgiven.
In connection with any Award, the Board may at the time such
Award is made or at a later date, provide for and make a cash
payment to the participant not to exceed an amount equal to (a)
the amount of any federal, state and local income tax or ordinary
income for which the Participant will be liable with respect to
the Award, plus (b) an additional amount on a grossed-up basis
PAGE
<PAGE>
7
necessary to make him or her whole after tax, discharging all the
participant's income tax liabilities arising from all payments
under the Plan.
9. Change in Control
-----------------
9.1 Impact of Event
---------------
In the event of a "Change in Control" as defined in Section
9.2, the following provisions shall apply, unless the agreement
evidencing the Award otherwise provides:
(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 Instrument
Systems Inc. ("Thermo Instrument"), 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 Instrument 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 Instrument or Thermo Electron. As
used in the preceding sentence, the following capitalized terms
shall have the respective meanings set forth below:
PAGE
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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 Instrument'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 Instrument 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 Instrument 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 Instrument's or Thermo Electron's Common
Stock, not approved by the Prior Directors, by any Person
other than the Company, Thermo Instrument, 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
-------------------------------
PAGE
<PAGE>
9
The Company will not be obligated to deliver any shares of
Common Stock pursuant to the Plan or to remove any restriction
from shares previously delivered under the Plan (a) until all
conditions of the Award have been satisfied or removed, (b)
until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with,
(c) if the outstanding Common Stock is at the time listed on any
stock exchange, until the shares have been listed or authorized
to be listed on such exchange upon official notice of issuance,
and (d) until all other legal matters in connection with the
issuance and delivery of such shares have been approved by the
Company's counsel. If the sale of Common Stock has not been
registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of the Award,
such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such act and may
require that the certificates evidencing such Common Stock bear
an appropriate legend restricting transfer.
If an Award is exercised by the participant's legal
representative, the Company will be under no obligation to
deliver Common Stock pursuant to such exercise until the Company
is satisfied as to the authority of such representative.
10.4 Tax Withholding
---------------
The Company will withhold from any cash payment made
pursuant to an Award an amount sufficient to satisfy all federal,
state and local withholding tax requirements (the "withholding
requirements").
In the case of an Award pursuant to which Common Stock may
be delivered, the Board will have the right to require that the
participant or other appropriate person remit to the Company an
amount sufficient to satisfy the withholding requirements, or
make other arrangements satisfactory to the Board with regard to
such requirements, prior to the delivery of any Common Stock. If
and to the extent that such withholding is required, the Board
may permit the participant or such other person to elect at such
time and in such manner as the Board provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirement.
10.5 Nontransferability of Awards
----------------------------
Except as otherwise specifically provided by the Board in
the case of participants who are not reporting persons under
Section 16 of the Exchange Act, 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 the
laws of descent and distribution, except pursuant to the terms of
a qualified domestic relations order as defined in the Code, and
during a Participant's lifetime an Award requiring exercise may
PAGE
<PAGE>
10
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).
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
PAGE
<PAGE>
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 10.73
THERMOTREX CORPORATION
TREX MEDICAL NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of Trex Medical Corporaton ("Subsidiary"), a
subsidiary of ThermoTrex Corporation (the "Company"), by persons
selected by the Board of Directors (or a committee thereof) in
its sole discretion, including directors, executive officers, key
employees and consultants of the Company and its subsidiaries,
and to provide additional incentive for them to promote the
success of the business of the Company and Subsidiary. The Plan
is intended to be a nonstatutory stock option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 400,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
PAGE
<PAGE>
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
PAGE
<PAGE>
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
PAGE
<PAGE>
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
PAGE
<PAGE>
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
PAGE
<PAGE>
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2006 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.73
THERMOTREX CORPORATION
TREX MEDICAL NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of Trex Medical Corporaton ("Subsidiary"), a
subsidiary of ThermoTrex Corporation (the "Company"), by persons
selected by the Board of Directors (or a committee thereof) in
its sole discretion, including directors, executive officers, key
employees and consultants of the Company and its subsidiaries,
and to provide additional incentive for them to promote the
success of the business of the Company and Subsidiary. The Plan
is intended to be a nonstatutory stock option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 400,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
PAGE
<PAGE>
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
PAGE
<PAGE>
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
PAGE
<PAGE>
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
PAGE
<PAGE>
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
PAGE
<PAGE>
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2006 and no options shall be granted
hereunder thereafter.
EXHIBIT 10.84
THERMO POWER CORPORATION
THERMOLYTE NONQUALIFIED STOCK OPTION PLAN
1. Purpose
-------
This Nonqualified Stock Option Plan (the "Plan") is intended
to encourage ownership of Common Stock, $0.01 par value (the
"Common Stock"), of ThermoLyte Corporation ("Subsidiary"), a
subsidiary of Thermo Power Corporation (the "Company"), by
persons selected by the Board of Directors (or a committee
thereof) in its sole discretion, including directors, executive
officers, key employees and consultants of the Company and its
subsidiaries, and to provide additional incentive for them to
promote the success of the business of the Company and
Subsidiary. The Plan is intended to be a nonstatutory stock
option plan.
2. Effective Date of the Plan
--------------------------
The Plan shall become effective when adopted by the Board of
Directors of the Company.
3. Stock Subject to Plan
---------------------
At no time shall the number of shares of the Common Stock
then outstanding which are attributable to the exercise of
options granted under the Plan plus the number of shares then
issuable upon the exercise of outstanding options granted under
the Plan exceed 100,000 shares, subject however, to the
provisions of paragraph 11 of the Plan. Shares to be issued upon
the exercise of options granted under the Plan shall be shares of
Subsidiary beneficially owned by the Company. If any option
expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
4. Administration
--------------
The Plan shall be administered by a committee (the
"Committee") composed of the members of the Board of Directors of
the Company, no member of which shall act upon any matter
exclusively affecting any option granted or to be granted to
himself or herself under the Plan. Subject to the provisions of
the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to
each option to be granted by the Company: (a) the person to
receive the option (the "Optionee"); (b) the time of granting the
option; (c) the number of shares subject thereto; (d) the option
price; (e) the option period; and (f) the terms of the option and
form of option agreement (which need not be identical, but which
shall conform to the applicable terms and conditions of the Plan
PAGE
<PAGE>
and contain such other provisions as the Board of Directors deems
advisable and not inconsistent with the Plan). In making such
determinations, the Committee may take into account the nature of
the services rendered by the Optionees, their present and
potential contributions to the success of the Company and/or one
or more of its subsidiaries, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this paragraph 4
shall be conclusive.
5. Eligibility
-----------
An option may be granted to any person selected by the
Committee in its sole discretion.
6. Time of Granting Options
------------------------
The granting of an option shall take place at the time
specified by the Committee. Only if expressly so provided by the
Committee shall the granting of an option be regarded as taking
place at the time when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company and
the Optionee to whom such option shall be granted. The agreement
shall provide, among other things, that it does not confer upon
an Optionee any right to continue in the employ of the Company
and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any
time if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
7. Option Period
-------------
An option may become exercisable immediately or in such
installments, cumulative or noncumulative, as the Committee may
determine.
8. Exercise of Option
------------------
An option may be exercised in accordance with its terms by
written notice of intent to exercise the option, specifying the
number of shares of stock with respect to which the option is
then being exercised. The notice shall be accompanied by payment
in the form of cash or shares of Subsidiary Common Stock (the
"Tendered Shares") with a then current market value equal to the
PAGE
<PAGE>
option price of the shares to be purchased; provided, however,
that such Tendered Shares shall have been acquired by the
Optionee more than six months prior to the date of exercise,
unless such requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the
Company, Subsidiary or the Optionee to take any action in
connection with shares being purchased upon exercise of the
option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion
of the necessary action, which shall be taken at the Company's
expense.
9. Transferability
---------------
Options shall not be transferable, otherwise than by will or
the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the
Internal Revenue Code. Options may be exercised during the life
of the Optionee only by the Optionee.
10. Vesting, Restrictions and Termination of Options
------------------------------------------------
The Committee, in its sole discretion, may determine the
manner in which options shall vest, the rights of the Company to
repurchase the shares issued upon the exercise of any option and
the manner in which such rights shall lapse, and the terms upon
which any option granted shall terminate. The Board of Directors
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company's
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf
of the Company and the Optionee to whom such option shall be
granted.
11. Adjustment of Number of Shares
------------------------------
Each stock option agreement shall provide that in the event
of any stock dividend payable in the Common Stock or any split-up
or contraction in the number of shares of the Common Stock
occurring after the date of the agreement and prior to the
exercise in full of the option, the number of shares for which
the option may thereafter be exercised shall be proportionately
adjusted and the price to be paid for each share subject to the
option shall be proportionately adjusted. Each such agreement
shall also provide that in case of any reclassification or change
of outstanding shares of the Common Stock or in case of any
consolidation or merger of Subsidiary with or into another
company or in case of any sale or conveyance to another company
or entity of the property of Subsidiary as a whole or
PAGE
<PAGE>
substantially as a whole, the Optionee shall, upon exercise of
the option, be entitled to receive shares of stock or other
securities in its place equivalent in kind and value to those
shares which he would have received if he had exercised the
option in full immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance and had
continued to hold the shares subject to the option (together with
all other shares, stock and securities thereafter issued in
respect thereof) to the time of the exercise of the option;
provided, that if any recapitalization is to be effected through
an increase in the par value of the Common Stock without an
increase in the number of authorized shares and such new par
value will exceed the option price under such agreement, the
Company shall notify the Optionee of such proposed
recapitalization, and the Optionee shall then have the right,
exercisable at any time prior to such recapitalization becoming
effective, to purchase all of the shares subject to the option
which he has not theretofore purchased (anything in such
agreement to the contrary notwithstanding), but if the Optionee
fails to exercise such right before such recapitalization becomes
effective, the option price under such agreement shall be
appropriately adjusted. Each such agreement shall further
provide that upon dissolution or liquidation of Subsidiary, the
option shall terminate, but the Optionee (if at the time an
employee or director of the Company and/or any one or more of its
subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the option to the full
extent not theretofore exercised; that no adjustment provided for
above shall apply to any share with respect to which the option
has been exercised prior to the effective date of such
adjustment; and that no fraction of a share or fractional shares
shall be purchasable or deliverable under such agreement, but in
the event any adjustment thereunder of the number of shares
covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the
nearest smaller whole number of shares. In the event of changes
in the outstanding Common Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding
shares of the Common Stock of the nature contemplated by this
paragraph 11, the number of shares of Common Stock available for
the purpose of the Plan as stated in paragraph 3 hereof shall be
correspondingly adjusted by the Committee.
12. Limitation of Rights in Option Stock
------------------------------------
The Optionees shall have no rights as stockholders in
respect of shares as to which their options shall not have been
exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with
respect to such shares not expressly conferred by this Plan.
13. Stock Reserved
--------------
PAGE
<PAGE>
The Company shall at all times during the term of the
options reserve and keep available such number of shares of the
Common Stock as will be sufficient to satisfy the requirements of
this Plan and shall pay all other fees and expenses necessarily
incurred by the Company in connection therewith.
14. Securities Laws Restrictions
----------------------------
Each Optionee exercising an option, at the request of the
Company, will be required to give a representation in form
satisfactory to counsel for the Company that he will not
transfer, sell or otherwise dispose of the shares received upon
exercise of the option at any time purchased by him, upon
exercise of any portion of the option, in a manner which would
violate the Securities Act of 1933, as amended, and the
regulations of the Securities and Exchange Commission thereunder
and the Company may, if required or at its discretion, make a
notation on any certificates issued upon exercise of options to
the effect that such certificate may not be transferred except
after receipt by the Company of an opinion of counsel
satisfactory to it to the effect that such transfer will not
violate such Act and such regulations.
15. Tax Withholding
---------------
The Company shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of options under the Plan (the
"withholding requirements"). The Committee will have the right
to require that the Optionee or other appropriate person remit to
the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery
of any Common Stock pursuant to exercise of an option. If and to
the extent that such withholding is required, the Committee may
permit the Optionee or such other person to elect at such time
and in such manner as the Committee provides to have the Company
hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the
withholding requirements.
16. Termination and Amendment of Plan
---------------------------------
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at
any time the approval of the Stockholders of the Company is
required as to such modification or amendment under Rule 16b-3,
the Board of Directors may not effect such modification or
amendment without such approval.
The termination or any modification or amendment of the Plan
shall not, without the consent of an Optionee, affect his or her
rights under an option previously granted to him or her. With
PAGE
<PAGE>
the consent of the Optionees affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to
amend or modify the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
Notwithstanding any other provisions hereof, the Plan shall
terminate on December 31, 2006 and no options shall be granted
hereunder thereafter.
Exhibit 11
THERMO CARDIOSYSTEMS INC.
Computation of Earnings per Share
1995 1994 1993
----------- ------------ ----------
Computation of Primary Earnings
per Share:
Net Income (a) $ 6,925,000 $ 1,899,000 $ 404,000
----------- ----------- -----------
Shares:
Weighted average shares
outstanding 23,335,020 22,782,657 22,176,324
Add: Shares issuable from
assumed conversion of
subordinated convertible
debentures 1,171,373 1,517,939 -
Shares issuable from
assumed exercise of
options (as determined
by the application of the
treasury stock method) 342,555 319,573 -
----------- ----------- -----------
Weighted average shares
outstanding, as adjusted (b) 24,848,948 24,620,169 22,176,324
----------- ----------- -----------
Primary Earnings per
Share (a) / (b) $ .28 $ .08 $ .02
=========== =========== ===========
Exhibit 13
THERMO CARDIOSYSTEMS INC.
Financial Statements as of December 30, 1995
PAGE
<PAGE>
Thermo Cardiosystems Inc.
Statement of Income
(In thousands except per share amounts) 1995 1994 1993
-------------------------------------------------------------------------
Revenues (Note 8) $20,593 $10,409 $ 3,524
------- ------- -------
Costs and Operating Expenses:
Cost of revenues 8,810 5,127 2,006
Selling, general and administrative
expenses (Note 7) 4,146 2,789 1,716
Expenses for research and development 3,324 3,437 2,976
------- ------- -------
16,280 11,353 6,698
------- ------- -------
Operating Income (Loss) 4,313 (944) (3,174)
Interest Income 5,117 4,147 3,508
Interest Expense (Note 6) (274) (375) (94)
Gain on Sale of Investments (Note 2) 421 97 234
------- ------- -------
Income Before Provision for Income Taxes 9,577 2,925 474
Provision for Income Taxes (Note 5) 2,652 1,026 70
------- ------- -------
Net Income $ 6,925 $ 1,899 $ 404
======= ======= =======
Earnings per Share $ .28 $ .08 $ .02
======= ======= =======
Weighted Average Shares 24,849 24,620 22,176
======= ======= =======
The accompanying notes are an integral part of these financial statements.
2PAGE
<PAGE>
Thermo Cardiosystems Inc.
Balance Sheet
(In thousands) 1995 1994
-------------------------------------------------------------------------
Assets
Current Assets:
Cash and cash equivalents $ 4,398 $ 9,378
Short-term available-for-sale investments,
at quoted market value (amortized cost of
$45,392 and $29,978) (Note 2) 46,123 29,585
Accounts receivable, less allowances of
$309 and $225 5,013 4,256
Inventories 6,149 3,959
Prepaid and refundable income taxes 1,905 -
-------- --------
63,588 47,178
-------- --------
Machinery, Equipment and Leasehold
Improvements, at Cost 2,819 1,841
Less: Accumulated depreciation and amortization 1,435 899
-------- --------
1,384 942
-------- --------
Long-term Available-for-sale Investments,
at Quoted Market Value (amortized cost of
$39,795 and $46,863) (Note 2) 39,953 45,426
-------- --------
Long-term Prepaid Income Taxes (Note 5) 783 379
-------- --------
Other Assets 478 939
-------- --------
$106,186 $ 94,864
======== ========
3PAGE
<PAGE>
Thermo Cardiosystems Inc.
Balance Sheet (continued)
(In thousands except share amounts) 1995 1994
-------------------------------------------------------------------------
Liabilities and Shareholders' Investment
Current Liabilities:
Accounts payable $ 1,670 $ 800
Accrued payroll and employee benefits 864 507
Accrued income taxes - 613
Deferred revenue - 258
Other accrued expenses 374 323
Due to parent company and Thermo Electron
Corporation 297 556
-------- --------
3,205 3,057
-------- --------
Subordinated Convertible Obligations (Note 6) 11,642 33,450
-------- --------
Commitments and Contingency (Notes 7 and 10)
Shareholders' Investment (Notes 3 and 9):
Common stock, $.10 par value, 50,000,000
shares authorized; 24,126,947 and 22,878,202
shares issued 2,413 2,288
Capital in excess of par value 82,344 57,081
Retained earnings 8,191 1,266
Treasury stock at cost, 18,097 and 46,204 shares (2,186) (1,089)
Net unrealized gain (loss) on available-
for-sale investments (Note 2) 577 (1,189)
-------- --------
91,339 58,357
-------- --------
$106,186 $ 94,864
======== ========
The accompanying notes are an integral part of these financial statements.
4PAGE
<PAGE>
Thermo Cardiosystems Inc.
Statement of Cash Flows
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------
Operating Activities:
Net income $ 6,925 $ 1,899 $ 404
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 925 620 186
Provision for losses on accounts
receivable 120 170 20
Gain on sale of investments (421) (97) (234)
Changes in current accounts:
Accounts receivable (877) (3,169) 13
Inventories (2,142) (1,007) (1,683)
Prepaid and refundable income taxes (2,217) 21 (14)
Accounts payable 870 524 51
Other current liabilities 68 377 163
-------- -------- --------
Net cash provided by (used in)
operating activities 3,251 (662) (1,094)
-------- -------- --------
Investing Activities:
Proceeds from sale and maturities of
available-for-sale investments 84,782 32,121 -
Purchases of available-for-sale
investments (92,707) (54,988) -
Increase in short-term investments - - (10,524)
Purchases of long-term investments - - (9,960)
Proceeds from sale of long-term
investments - - 10,982
Purchases of machinery, equipment and
leasehold improvements (1,063) (446) (374)
Increase in other assets (190) (100) (213)
--------- -------- --------
Net cash used in investing
activities $ (9,178) $(23,413) $(10,089)
--------- -------- --------
5PAGE
<PAGE>
Thermo Cardiosystems Inc.
Statement of Cash Flows (continued)
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------
Financing Activities:
Net proceeds from issuance of Company
common stock $ 947 $ 593 $ 150
Net proceeds from issuance of
subordinated convertible debentures
(Note 6) - 31,968 -
-------- -------- --------
Net cash provided by financing
activities 947 32,561 150
-------- -------- --------
Increase (Decrease) in Cash and Cash
Equivalents (4,980) 8,486 (11,033)
Cash and Cash Equivalents at Beginning
of Year 9,378 892 11,925
-------- -------- --------
Cash and Cash Equivalents at End of Year $ 4,398 $ 9,378 $ 892
======== ======== ========
Cash Paid For:
Interest $ 29 $ 36 $ 94
Income taxes $ 3,191 $ 130 $ 84
Noncash Activities:
Conversions of subordinated obligations
(Note 6) $ 21,808 $ 150 $ 1,920
The accompanying notes are an integral part of these financial statements.
6PAGE
<PAGE>
Thermo Cardiosystems Inc.
Statement of Shareholders' Investment
Common Common
Stock Stock, Capital in
Subject to $.10 Par Excess of
(In thousands) Redemption Value Par Value
------------------------------------------------------------------------
Balance January 2, 1993 $ 5,468 $ 982 $50,093
Net income - - -
Conversions of subordinated
convertible note - 27 1,891
Issuance of stock under employees'
and directors' stock plans - 1 155
Effect of two-for-one stock split - 1,010 (1,010)
Expiration of redemption rights (5,468) 242 5,226
------- ------- -------
Balance January 1, 1994 - 2,262 56,355
Net income - - -
Conversions of subordinated
convertible notes (Note 6) - 2 148
Issuance of stock under employees'
and directors' stock plans - 24 578
Effect of change in accounting
principle (Note 2) - - -
Change in net unrealized gain (loss)
on available-for-sale investments
(Note 2) - - -
------- ------- -------
Balance December 31, 1994 - 2,288 57,081
Net income - - -
Conversions of subordinated
convertible obligations (Note 6) - 103 21,406
Issuance of stock under employees'
and directors' stock plans - 22 522
Tax benefit related to employees'
and directors' stock plans - - 3,335
Change in net unrealized gain (loss)
on available-for-sale investments
(Note 2) - - -
------- ------- -------
Balance December 30, 1995 $ - $ 2,413 $82,344
======= ======= =======
7PAGE
<PAGE>
Thermo Cardiosystems Inc.
Statement of Shareholders' Investment (continued)
Net
Unrealized
Gain (Loss)
on Available-
Retained Treasury for-sale
(In thousands) Earnings Stock Investments
-----------------------------------------------------------------------
Balance January 2, 1993 $(1,037) $ - $ -
Net income 404 - -
Conversions of subordinated
convertible note - - -
Issuance of stock under employees'
and directors' stock plans - (6) -
Effect of two-for-one stock split - - -
Expiration of redemption rights - - -
------- ------- -------
Balance January 1, 1994 (633) (6) -
Net income 1,899 - -
Conversions of subordinated
convertible notes (Note 6) - - -
Issuance of stock under employees'
and directors' stock plans - (1,083) -
Effect of change in accounting
principle (Note 2) - - 1,038
Change in net unrealized gain (loss)
on available-for-sale investments
(Note 2) - - (2,227)
------- ------- -------
Balance December 31, 1994 1,266 (1,089) (1,189)
Net income 6,925 - -
Conversions of subordinated
convertible obligations (Note 6) - - -
Issuance of stock under employees'
and directors' stock plans - (1,097) -
Tax benefit related to employees'
and directors' stock plans - - -
Change in net unrealized gain (loss)
on available-for-sale investments
(Note 2) - - 1,766
------- ------- -------
Balance December 30, 1995 $ 8,191 $(2,186) $ 577
======= ======= =======
The accompanying notes are an integral part of these financial statements.
8PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Thermo Cardiosystems Inc. (the Company) is a leader in the research,
development, and manufacture of implantable left ventricular-assist systems
(LVAS). Its HeartMate(R) devices are designed to perform substantially all
or part of the pumping function of the left ventricle of the natural heart
for patients suffering from cardiovascular disease.
Relationship with Thermedics Inc. and Thermo Electron Corporation
The Company was incorporated in 1988 as a wholly owned subsidiary of
Thermedics Inc. (Thermedics). Prior to that time, the business was
conducted as a division of Thermedics.
As of December 30, 1995, Thermedics owned 12,525,110 shares of the
Company's common stock, representing 52% of such stock outstanding.
Thermedics is a 51%-owned subsidiary of Thermo Electron Corporation (Thermo
Electron). As of December 30, 1995, Thermo Electron owned 659,967 shares of
the Company's common stock, representing 3% of such stock outstanding.
Fiscal Year
The Company has adopted a fiscal year ending the Saturday nearest
December 31. References to 1995, 1994, and 1993 are for the fiscal years
ended December 30, 1995, December 31, 1994, and January 1, 1994,
respectively.
Cash and Cash Equivalents
As of December 30, 1995, $4,379,000 of the Company's cash equivalents were
invested in a repurchase agreement with Thermo Electron. Under this
agreement, the Company in effect lends excess cash to Thermo Electron,
which Thermo Electron collateralizes with investments principally
consisting of U.S. government agency securities, corporate notes,
commercial paper, money market funds, and other marketable securities, in
the amount of at least 103% of such obligation. The Company's funds subject
to the repurchase agreement are readily convertible into cash by the
Company and have an original maturity of three months or less. The
repurchase agreement earns a rate based on the Commercial Paper Composite
Rate plus 25 basis points, set at the beginning of each quarter. Cash
equivalents are carried at cost, which approximates market value.
Available-for-sale Investments
Pursuant to Statement of Financial Accounting Standards (SFAS) No. 115,
"Accounting for Certain Investments in Debt and Equity Securities,"
effective January 2, 1994, the Company's debt and marketable equity
securities are accounted for at market value (Note 2). Prior to 1994, these
investments were carried at the lower of cost or market value.
9PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
(continued)
Inventories
Inventories are stated at the lower of cost (on a first-in, first-out
basis) or market value and include materials, labor, and manufacturing
overhead. The components of inventories are as follows:
(In thousands) 1995 1994
-----------------------------------------------------------------------
Raw materials $2,645 $3,123
Work in process 3,141 836
Finished goods 363 -
------ ------
$6,149 $3,959
====== ======
Machinery, Equipment and Leasehold Improvements
The costs of additions and improvements are capitalized, while maintenance
and repairs are charged to expense as incurred. The Company provides for
depreciation and amortization using the straight-line method over the
estimated useful lives of the property, as follows: machinery and equipment
-- five to eight years, and leasehold improvements -- the shorter of the
term of the lease or the life of the asset.
Common Stock Subject to Redemption
Common stock subject to redemption in the accompanying statement of
shareholders' investment represents amounts associated with redemption
rights outstanding that were issued in connection with the Company's 1989
initial public offering. These redemption rights expired at the end of
1993, and as a result, the Company transferred $5,468,000 of common stock
subject to redemption to common stock and capital in excess of par value.
Revenue Recognition
The Company recognizes revenues upon shipment of its products. The Company
provides a reserve for its estimate of warranty costs at the time of
shipment. The Company had deferred revenue of $258,000 in the accompanying
1994 balance sheet relating to orders for implementation programs not fully
completed in 1994.
Income Taxes
In accordance with SFAS No. 109, "Accounting for Income Taxes," the Company
recognizes deferred income taxes based on the expected future tax
consequences of differences between the financial statement basis and the
tax basis of assets and liabilities calculated using enacted tax rates in
effect for the year in which the differences are expected to be reflected
in the tax return.
Earnings per Share
Earnings per share have been computed based upon the weighted average
number of shares outstanding during the year. Weighted average shares in
1995 and 1994 include the effect of common stock equivalents, which
represent the assumed conversion of the Company's noninterest-bearing
subordinated convertible debentures and the assumed exercise of stock
options that were computed using the treasury stock method. In 1993, the
effect of the assumed conversion of the Company's subordinated notes was
antidilutive and the effect of the assumed exercise of stock options was
immaterial.
10PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
(continued)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
2. Available-for-sale Investments
Effective January 2, 1994, the Company adopted SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities." In accordance with
SFAS No. 115, the Company's debt and marketable equity securities are
considered available-for-sale investments in the accompanying balance sheet
and are carried at market value, with the difference between cost and
market value, net of related tax effects, recorded currently as a component
of shareholders' investment titled "Net unrealized gain (loss) on
available-for-sale investments." Effect of change in accounting principle
in the accompanying 1994 statement of shareholders' investment represents
the unrealized gain, net of related tax effects, pertaining to available-
for-sale investments held by the Company on January 2, 1994.
The aggregate market value, cost basis, and gross unrealized gains and
losses of short- and long-term available-for-sale investments by major
security type, as of December 30, 1995 and December 31, 1994, are as
follows:
1995 Gross Gross
Unrealized Unrealized
(In thousands) Market Value Cost Basis Gains Losses
--------------------------------------------------------------------------
Government agency securities $83,906 $83,035 $ 948 $ (77)
Corporate bonds 1,028 1,010 18 -
Other 1,142 1,142 - -
------- ------- ------- -------
$86,076 $85,187 $ 966 $ (77)
======= ======= ======= =======
1994 Gross Gross
Unrealized Unrealized
(In thousands) Market Value Cost Basis Gains Losses
--------------------------------------------------------------------------
Government agency securities $73,312 $75,077 $ 2 $(1,767)
Corporate bonds 951 1,016 - (65)
Other 748 748 - -
------- ------- ------- -------
$75,011 $76,841 $ 2 $(1,832)
======= ======= ======= =======
11PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
2. Available-for-sale Investments (continued)
Short- and long-term available-for-sale investments in the
accompanying 1995 balance sheet include $39,912,000 with contractual
maturities of one year or less, $38,895,000 with contractual maturities of
more than one year through five years, and $7,269,000 with contractual
maturities of more than five years. Actual maturities may differ from
contractual maturities as a result of the Company's intent to sell these
securities prior to maturity and as a result of put and call options that
enable either the Company and/or the issuer to redeem these securities at
an earlier date.
The cost of available-for-sale investments that were sold was based on
specific identification in determining realized gains recorded in the
accompanying statement of income. Gain on sale of investments resulted from
gross realized gains of $439,000 and gross realized losses of $18,000 in
1995, and gross realized gains of $97,000 in 1994, relating to the sale of
available-for-sale investments.
3. Stock-based Compensation Plans
The Company has stock-based compensation plans for its key employees,
directors, and others. Two of these plans, adopted in 1988, permit the
grant of nonqualified and incentive stock options. A third plan, adopted in
1994, permits the grant of a variety of stock and stock-based awards as
determined by the human resources committee of the Company's Board of
Directors (the Board Committee), including restricted stock, stock options,
stock bonus shares, or performance-based shares. To date, only nonqualified
stock options have been awarded under this plan. The option recipients and
the terms of options granted under these plans are determined by the Board
Committee. Generally, options granted to date are exercisable immediately,
but are subject to certain transfer restrictions and the right of the
Company to repurchase shares issued upon exercise of the options at the
exercise price, upon certain events. The restrictions and repurchase rights
generally lapse ratably over periods ranging from five to ten years after
the first anniversary of the grant date, depending on the term of the
option, which may range from seven to twelve years. Nonqualified options
may be granted at any price determined by the Board Committee, although
incentive stock options must be granted at not less than the fair market
value of the Company's stock on the date of grant. To date, all options
have been granted at fair market value. The Company also has a directors'
stock option plan, adopted in 1991, that provides for the grant of stock
options to outside directors pursuant to a formula approved by the
Company's shareholders. Options awarded under this plan are exercisable six
months after the date of grant and expire three or seven years after the
date of grant. In addition to the Company's stock-based compensation plans,
certain officers and key employees may also participate in the stock-based
compensation plans of Thermo Electron or its majority-owned subsidiaries.
12PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
3. Stock-based Compensation Plans (continued)
No accounting recognition is given to options granted at fair market
value until they are exercised. Upon exercise, net proceeds, including tax
benefits realized, are credited to equity. A summary of the Company's stock
option information is as follows:
1995 1994 1993
----------------- ----------------- -----------------
Range of Range of Range of
(In thousands Number Option Number Option Number Option
except per of Prices of Prices of Prices
share amounts) Shares per Share Shares per Share Shares per Share
--------------------------------------------------------------------------
Options outstanding, $ 1.73- $ 1.73- $ 1.73-
beginning of year 972 $21.28 1,154 $18.18 888 $ 9.84
26.10- 15.95- 8.64-
Granted 81 58.18 96 21.28 361 18.18
1.73- 1.73- 6.77-
Exercised (286) 18.18 (257) 8.90 (14) 8.07
Lapsed or 16.13- 1.73- 6.26-
cancelled (9) 18.18 (21) 8.18 (81) 8.90
----- ----- -----
Options outstanding, $ 1.73- $ 1.73- $ 1.73-
end of year 758 $58.18 972 $21.28 1,154 $18.18
===== ===== =====
$ 1.73- $ 1.73- $ 1.73-
Options exercisable 758 $58.18 970 $21.28 1,151 $18.18
===== ===== =====
Options available
for grant 416 488 63
===== ===== =====
4. Employee Benefit Plans
Employee Stock Purchase Plan
Substantially all of the Company's full-time employees are eligible to
participate in the Company's employee stock purchase plan. Prior to the
November 1995 plan year, shares of the Company's and Thermo Electron's
common stock could be purchased at the end of a 12-month plan year at 85%
of the fair market value at the beginning of the plan year, and the shares
purchased were subject to a one-year resale restriction. Effective November
1, 1995, the applicable shares of common stock may be purchased at 95% of
the fair market value at the beginning of the plan year, and the shares
purchased are subject to a six-month resale restriction. Shares are
purchased through payroll deductions of up to 10% of each participating
employee's gross wages. During 1995, 1994, and 1993, the Company issued
5,254 shares, 4,930 shares, and 8,226 shares, respectively, of its common
stock under this plan.
13PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
4. Employee Benefit Plans (continued)
401(k) Savings Plan
Substantially all of the Company's full-time employees are eligible to
participate in Thermo Electron's 401(k) savings plan. Contributions to the
plan are made by both the employee and the Company. Company contributions
are based upon the level of employee contributions. For this plan, the
Company contributed and charged to expense $135,000, $91,000, and $61,000
in 1995, 1994, and 1993, respectively.
5. Income Taxes
The components of the provision for income taxes are as follows:
(In thousands) 1995 1994 1993
-------------------------------------------------------------------------
Currently payable:
Federal $4,024 $1,057 $ 21
State 65 50 49
------ ------ ------
4,089 1,107 70
------ ------ ------
Prepaid:
Federal (1,437) (81) -
------ ------ ------
$2,652 $1,026 $ 70
====== ====== ======
The provision for income taxes that is currently payable does not
reflect $3,335,000 of tax benefits allocated to capital in excess of par
value in 1995.
The provision for income taxes in the accompanying statement of income
differs from the provision calculated by applying the statutory federal
income tax rate of 34% to income before provision for income taxes due to
the following:
(In thousands) 1995 1994 1993
-------------------------------------------------------------------------
Provision for income taxes at statutory rate $3,256 $ 994 $ 161
Increases (decreases) resulting from:
State income taxes, net of federal tax 43 32 32
Utilization of tax loss and credit
carryforwards - - (134)
Reversal of valuation allowance (725) - -
Other 78 - 11
------ ------ ------
$2,652 $1,026 $ 70
====== ====== ======
14PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
5. Income Taxes (continued)
Short- and long-term prepaid income taxes in the accompanying balance
sheet consist of the following:
(In thousands) 1995 1994
-----------------------------------------------------------------------
Prepaid income taxes:
State tax loss and credit carryforwards $ 868 $ 661
Available-for-sale investments 20 641
Inventory basis difference 200 166
Accrued compensation 220 144
Allowance for doubtful accounts 123 90
Reserves and accruals 83 16
Other, net (29) 6
------ ------
1,485 1,724
Less: Valuation allowance - 1,345
------ ------
$1,485 $ 379
====== ======
The valuation allowance primarily related to the uncertainty of the
realizability of future federal and state tax benefits. The valuation
allowance was eliminated as a result of reduced uncertainty surrounding the
realizability of such future tax benefits. A portion of the reduction in
the valuation allowance was related to stock options and was recorded as an
increase to capital in excess of par value.
6. Subordinated Convertible Obligations
In January 1994, the Company issued and sold at par $33,000,000 principal
amount of noninterest-bearing subordinated convertible debentures due 1997.
The debentures are convertible into shares of the Company's common stock at
a conversion price of $21.74 per share. During 1995, $21,358,000 of the
noninterest-bearing subordinated convertible debentures were converted into
982,415 shares of the Company's common stock.
In February 1992, the Company issued and sold $600,000 principal
amount of 5 1/2% subordinated convertible notes due 2002. The notes were
convertible into shares of the Company's common stock at a conversion price
of $9.88 per share. During 1995 and 1994, $450,000 and $150,000,
respectively, of the 5 1/2% subordinated convertible notes were converted
into 45,569 shares and 15,189 shares, respectively, of the Company's common
stock.
The Company's convertible obligations are guaranteed on a subordinated
basis by Thermo Electron. Thermedics has agreed to reimburse Thermo
Electron in the event Thermo Electron is required to make a payment under
the guarantee.
See Note 11 for the fair value of the Company's long-term obligations.
15PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
7. Related Party Transactions
Corporate Services Agreement
The Company and Thermo Electron have a corporate services agreement under
which Thermo Electron's corporate staff provides certain administrative
services, including certain legal advice and services, risk management,
certain employee benefit administration, tax advice and preparation of tax
returns, centralized cash management, and certain financial and other
services, for which the Company paid Thermo Electron annually an amount
equal to 1.20% of the Company's revenues in fiscal 1995 and 1.25% of the
Company's revenues in fiscal 1994 and 1993. Beginning in fiscal 1996, the
Company will pay an annual fee equal to 1.0% of the Company's revenues. The
annual fee is reviewed and adjusted annually by mutual agreement of the
parties. The corporate services agreement is renewed annually but can be
terminated upon 30 days' prior notice by the Company or upon the Company's
withdrawal from the Thermo Electron Corporate Charter (the Thermo Electron
Corporate Charter defines the relationship among Thermo Electron and its
majority-owned subsidiaries). In addition, the Company uses data processing
services of a majority-owned subsidiary of Thermo Electron, and accounting,
personnel, and administrative services of Thermedics. For these services,
as well as the administrative services provided by Thermo Electron, the
Company was charged $478,000, $368,000, and $313,000 in 1995, 1994, and
1993, respectively. Management believes that the service fees charged by
Thermo Electron, its majority-owned subsidiary, and Thermedics are
reasonable and that such fees are representative of the expenses the
Company would have incurred on a stand-alone basis. For additional items
such as employee benefit plans, insurance coverage, and other identifiable
costs, Thermo Electron charges the Company based upon costs attributable to
the Company.
Operating Leases
The Company subleases office and research facilities from Thermedics and is
charged for actual square footage occupied at approximately the same rent
paid per square foot by Thermedics under its prime lease. This sublease
expires in February 1999. The accompanying statement of income includes
expenses from the sublease of $134,000, $140,000, and $156,000 in 1995,
1994, and 1993, respectively. Currently, the cost of the area occupied by
the Company is $134,000 per year.
Repurchase Agreement
The Company invests excess cash in a repurchase agreement with Thermo
Electron as discussed in Note 1.
8. Significant Customers, Export Sales and Concentrations of Risk
No customer accounted for 10% or more of the Company's total revenues in
1995. Revenues from AMETEC (a licensed distributor of the Company's LVAS in
Germany) accounted for 10% of the Company's total revenues in 1994.
Revenues from The Cleveland Clinic Foundation, AMETEC, and Columbia-
Presbyterian Medical Center accounted for 14%, 11%, and 10%, respectively,
of the Company's total revenues in 1993.
16PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
8. Significant Customers, Export Sales and Concentrations of Risk
(continued)
In 1995, export revenues were $2,353,000. In 1994, export revenues to
Germany, other European countries, and other countries were $1,032,000,
$1,278,000, and $817,000, respectively. In 1993, export revenues to
Germany, other European countries, and other countries were $381,000,
$599,000, and $451,000, respectively. Export revenues are denominated in
U.S. dollars.
Certain raw materials used in the manufacture of the Company's LVAS
are available from only one supplier. While the Company believes that it
has adequate supplies of materials to meet demand for the LVAS for the
foreseeable future, no assurance can be given that the Company will not
experience shortages of certain materials in the future that could delay
shipments of the LVAS.
9. Stock Purchase Warrant and Common Stock
In May 1993, in connection with an agreement to develop a material to be
used in the Company's LVAS, the Company granted to a third party the right
to purchase from the Company 40,000 shares of the Company's common stock at
a price of $8.74 per share, which was the fair market value of the
Company's common stock on the date of grant. This warrant is exercisable
immediately and expires ten years after the date of grant.
At December 30, 1995, the Company had reserved 1,925,617 unissued
shares of its common stock for possible issuance under stock-based
compensation plans, possible conversion of its outstanding subordinated
convertible debentures, and possible issuance under the stock purchase
warrant.
10. Contingency
The Company has received correspondence alleging that the textured surface
of its LVAS housing infringes the intellectual property rights of another
party. In general, an owner of intellectual property can prevent others
from using such property without a license and is entitled to damages for
unauthorized past usage. The Company has investigated the bases of the
allegation and, based on the opinion of its counsel, believes that if the
Company were sued on these bases, it would have meritorious defenses.
11. Fair Value of Financial Instruments
The Company's financial instruments consist mainly of cash and cash
equivalents, available-for-sale investments, accounts receivable, accounts
payable, due to parent company, and subordinated convertible obligations.
The carrying amounts of these financial instruments, with the exception of
available-for-sale investments and subordinated convertible obligations,
approximates fair value due to their short-term nature.
17PAGE
<PAGE>
Thermo Cardiosystems Inc.
Notes to Financial Statements
11. Fair Value of Financial Instruments (continued)
Available-for-sale investments are carried at fair value in the
accompanying balance sheet. The fair values were determined based on quoted
market prices. See Note 2 for fair value information pertaining to these
financial instruments.
The fair value of the Company's subordinated convertible obligations
was determined based on quoted market prices. The carrying amount and fair
value of the Company's subordinated convertible obligations are as follows:
1995 1994
--------------------- ---------------------
Carrying Fair Carrying Fair
(In thousands) Amount Value Amount Value
-------------------------------------------------------------------------
Subordinated convertible
obligations (1) $11,642 $41,489 $33,450 $28,500
(1) The fair value of subordinated convertible obligations at year-end
1995 exceeds the carrying amount primarily due to the market price of
the Company's common stock exceeding the conversion price of the
subordinated convertible obligations.
18PAGE
<PAGE>
Report of Independent Public Accountants
To the Shareholders and Board of Directors of Thermo Cardiosystems Inc.:
We have audited the accompanying balance sheets of Thermo Cardiosystems
Inc. (a Massachusetts corporation and 52%-owned subsidiary of Thermedics
Inc.) as of December 30, 1995 and December 31, 1994, and the related
statements of income, shareholders' investment, and cash flows for each of
the three years in the period ended December 30, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Thermo
Cardiosystems Inc. as of December 30, 1995 and December 31, 1994, and the
results of its operations and its cash flows for each of the three years in
the period ended December 30, 1995, in conformity with generally accepted
accounting principles.
As discussed in Note 2 to the financial statements, effective January
2, 1994, the Company changed its method of accounting for investments in
debt and marketable equity securities.
Arthur Andersen LLP
Boston, Massachusetts
February 7, 1996
19PAGE
<PAGE>
Thermo Cardiosystems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview
The Company is a leader in the research, development, and manufacture of
both an air-driven and an electric implantable left ventricular-assist
system (LVAS). The Company is also the only company with U.S. Food and Drug
Administration (FDA) approval to commercially market an implantable LVAS.
Each system is designed to perform substantially all or part of the pumping
function of the left ventricle of the natural heart for patients suffering
from cardiovascular disease. Unlike total artificial heart systems, which
require removal of the natural heart, an LVAS allows the natural heart to
be left in place, preserving the heart's biological control mechanisms.
In October 1994, the Company announced that the FDA granted approval
for the commercial sale in the U.S. of the air-driven LVAS for use as a
bridge-to-transplant. With this approval, the air-driven system became
available to cardiac centers throughout the United States. In April 1994,
the Company received the European Conformity Mark (CE Mark) for commercial
sale of the air-driven LVAS in all European Community countries. Until the
Company's electric LVAS receives FDA commercial approval, sales of the
electric LVAS will fluctuate depending upon the number of implants
performed in ongoing studies at approved clinical sites and the number of
implementation programs sold. The electric version of the LVAS is currently
being used in the U.S. in clinical trials for patients awaiting heart
transplants and, in late 1995, the FDA approved the protocol for conducting
clinical trials of the electric LVAS as an alternative to heart transplant.
In August 1995, the Company received the CE Mark allowing commercial sale
of the electric LVAS in European Community countries. It is being used in
Europe as both a bridge-to-transplant and as an alternative to heart
transplant.
In general, a profit cannot be earned from the sale of an LVAS until
approval of the device has been received from the FDA for commercial sale.
Until such approval is obtained, only the direct and indirect costs of the
LVAS can be recovered, which are included in the Company's revenues. With
the FDA's approval of the air-driven LVAS, the Company began earning a
profit on the sale of such systems in the fourth quarter of 1994. In
October 1994, the Company announced a price increase in the U.S. for its
air-driven LVAS that was phased in during a six-month period and that more
than doubled the average price of the air-driven LVAS.
The Company derives its revenues from two types of sales:
implementation programs and subsequent implants. Implementation programs
consist of initial sales to new clinical centers or foreign distributors,
as well as sales of a new system, such as the electric LVAS, to an existing
customer. Revenues recorded from subsequent implants consist of sales to an
existing customer other than the initial sale of the implementation
program. In general, the Company receives greater revenues from the sale of
an implementation program than from a subsequent implant.
20PAGE
<PAGE>
Thermo Cardiosystems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Results of Operations
1995 Compared With 1994
Revenues almost doubled in 1995 to $20,593,000 from $10,409,000 in 1994.
Revenues in 1995 increased approximately 47% as a result of the price
increase that was phased in during the fourth quarter of 1994 and the first
two quarters of 1995. Revenues also increased due to a 43% increase in the
number of air-driven and electric LVAS units shipped during 1995 compared
with 1994. The number of implementation programs sold in 1995 were
comparable to those sold in 1994.
The gross profit margin increased to 57% in 1995 from 51% in 1994,
primarily due to the price increase and, to a lesser extent, the increase
in sales volume and improvements in manufacturing efficiencies. The Company
will continue to be unable to earn a profit on sales of the electric LVAS
until FDA approval of that system is obtained.
The Company recorded operating income of $4,313,000 in 1995, compared
with an operating loss of $944,000 in 1994. This improvement resulted
primarily from an increased gross profit margin on higher revenues,
partially offset by increased expenses to market and distribute the
Company's LVAS.
Interest income increased to $5,117,000 in 1995 from $4,147,000 in
1994, principally due to higher prevailing interest rates in 1995 compared
with 1994. Interest expense decreased to $274,000 in 1995 from $375,000 in
1994, primarily as a result of lower amortization of deferred issuance
costs associated with the Company's noninterest-bearing subordinated
convertible debentures due to the conversion of $21,358,000 principal
amount of these debentures in 1995.
The effective tax rate decreased to 28% in 1995 from 35% in 1994,
primarily due to the reversal of the tax valuation allowance that was no
longer required (Note 5).
1994 Compared With 1993
Revenues in 1994 were $10,409,000, compared with $3,524,000 in 1993.
Revenues increased in 1994 principally due to an increase in the number of
implementation programs sold. Thirty-one implementation programs were sold
in 1994, compared with ten implementation programs sold in 1993. Eight
implementation programs, or 26% of the total programs sold in 1994, were a
result of FDA commercial approval of the air-driven LVAS. The increase in
revenues also reflects an increase in the number of subsequent implants,
primarily of the air-driven LVAS, performed at existing sites in 1994. Of
the total increase in revenues in the fourth quarter of 1994, approximately
$250,000 was a result of the price increase that became effective during
that period.
The gross profit margin increased to 51% in 1994 from 43% in 1993,
primarily due to the increase in sales volume, improvements in
manufacturing efficiencies, and the first phase of the price increase for
the air-driven system, which became effective in the fourth quarter of
1994.
21PAGE
<PAGE>
Thermo Cardiosystems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
1994 Compared With 1993 (continued)
The Company recorded an operating loss of $944,000 in 1994, compared
with a loss of $3,174,000 in 1993. The lower operating loss resulted
primarily from an increased gross profit margin on higher revenues,
partially offset by increased expenses to develop and market the Company's
LVAS. The Company recorded operating income of $384,000 in the fourth
quarter of 1994.
Interest income increased to $4,147,000 in 1994 from $3,508,000 in
1993, primarily as a result of higher average invested amounts derived from
the Company's issuance of $33,000,000 principal amount of noninterest-
bearing subordinated convertible debentures in January 1994. Interest
expense increased to $375,000 in 1994 from $94,000 in 1993. Interest
expense relating to the amortization of deferred issuance costs associated
with the debentures issued in January 1994 more than offset the decrease in
interest expense due to the conversion of $1,920,000 principal amount of a
4% subordinated convertible note in the second half of 1993.
Liquidity and Capital Resources
Working capital, including cash, cash equivalents, and short-term
available-for-sale investments, was $60,383,000 at December 30, 1995,
compared with $44,121,000 at December 31, 1994. Cash, cash equivalents, and
short- and long-term available-for-sale investments were $90,474,000 at
December 30, 1995, compared with $84,389,000 at December 31, 1994. During
1995, $3,251,000 of cash was provided by operating activities and the
Company expended $1,063,000 on purchases of machinery, equipment and
leasehold improvements.
In 1996, the Company expects to make capital expenditures of
approximately $1,500,000, principally for manufacturing and tooling
equipment and leasehold improvements for the continued development and
production of the Company's LVAS. The Company believes it has adequate
resources to meet its financial needs for the foreseeable future.
22PAGE
<PAGE>
Thermo Cardiosystems Inc.
Selected Financial Information
(In thousands except
per share amounts) 1995(a) 1994(b) 1993 1992(c) 1991
-------------------------------------------------------------------------
Statement of Income Data:
Revenues $ 20,593 $10,409 $ 3,524 $ 2,441 $ 1,975
Net income (loss) 6,925 1,899 404 18 (794)
Earnings (loss)
per share .28 .08 .02 - (.05)
Balance Sheet Data:
Working capital $ 60,383 $44,121 $16,059 $15,118 $22,253
Total assets 106,186 94,864 59,838 59,072 43,838
Long-term obligations 11,642 33,450 600 2,520 29,000
Common stock subject
to redemption - - - 5,468 5,486
Shareholders'
investment 91,339 58,357 57,978 50,038 8,563
(a) Reflects conversion of $21,358,000 principal amount of noninterest-
bearing subordinated convertible debentures.
(b) Reflects the January 1994 issuance of $33,000,000 principal amount of
noninterest-bearing subordinated convertible debentures due 1997.
(c) Reflects a public offering of the Company's common stock for net
proceeds of $14,359,000 and conversion of $26,000,000 principal amount
of 6% subordinated convertible notes.
Quarterly Information (Unaudited)
(In thousands except per share amounts)
1995 First Second Third Fourth
-----------------------------------------------------------------------
Revenues $4,392 $5,589 $5,068 $5,544
Gross profit 2,464 3,249 2,895 3,175
Net income 1,152 1,671 1,891 2,211
Earnings per share .05 .07 .08 .09
1994 First Second Third Fourth(a)
-----------------------------------------------------------------------
Revenues $2,060 $2,313 $2,524 $3,512
Gross profit 896 1,117 1,237 2,032
Net income 302 417 387 793
Earnings per share .01 .02 .02 .03
(a)Reflects the impact of the approval by the U.S. Food and Drug
Administration for the commercial sale of the air-driven LVAS.
23PAGE
<PAGE>
Thermo Cardiosystems Inc.
Common Stock Market Information
The following table shows the market range for the Company's common stock
based on reported sales prices on the American Stock Exchange (symbol TCA)
for 1995 and 1994.
1995 1994
----------------- ----------------
Quarter High Low High Low
----------------------------------------------
First $29 3/4 $15 5/8 $23 3/8 $16
Second 39 1/8 28 1/4 23 1/8 18 7/8
Third 49 3/4 36 1/4 21 3/8 17 5/8
Fourth 77 1/4 42 5/8 22 15
As of January 26, 1996, the Company had 447 holders of record of its
common stock. This does not include holdings in street or nominee names.
The closing market price on the American Stock Exchange for the Company's
common stock on January 26, 1996, was $75 1/2 per share.
Stock Transfer Agent
American Stock Transfer & Trust Company is the stock transfer agent and
maintains shareholder activity records. The agent will respond to questions
on issuances of stock certificates, changes of ownership, lost stock
certificates, and changes of address. For these and similar matters, please
direct inquiries to:
American Stock Transfer & Trust Company
Shareholder Services Department
40 Wall Street, 46th Floor
New York, New York 10005
(718) 921-8200
Shareholder Services
Shareholders of Thermo Cardiosystems Inc. who desire information about the
Company are invited to contact John N. Hatsopoulos, Chief Financial
Officer, Thermo Cardiosystems Inc., 81 Wyman Street, P.O. Box 9046,
Waltham, Massachusetts 02254-9046, (617) 622-1111. A mailing list is
maintained to enable shareholders whose stock is held in street name, and
other interested individuals, to receive quarterly reports, annual reports,
and press releases as quickly as possible. Quarterly reports and press
releases are also available through the Internet at Thermo Electron's home
page on the World Wide Web (http://www.thermo.com).
Dividend Policy
Except for a $.01 per share dividend distributed to partially offset income
tax liability relating to the Company's recapitalization in 1990, the
Company has never paid any cash dividends because its policy is to use
earnings to finance expansion and growth. The Company's Board of Directors
anticipates that for the foreseeable future no cash dividends will be paid
on the Company's common stock.
24PAGE
<PAGE>
Thermo Cardiosystems Inc.
Form 10-K Report
A copy of the Annual Report on Form 10-K for the fiscal year ended
December 30, 1995, as filed with the Securities and Exchange Commission,
may be obtained without charge by writing to John N. Hatsopoulos, Chief
Financial Officer, Thermo Cardiosystems Inc., 81 Wyman Street, P.O. Box
9046, Waltham, Massachusetts 02254-9046.
Annual Meeting
The annual meeting of shareholders will be held on Monday, May 20, 1996, at
11:00 a.m. at the Turnberry Isle Resort & Club, Aventura, Florida.
25PAGE
<PAGE>
Exhibit 21
THERMO CARDIOSYSTEMS INC.
Subsidiaries of the Registrant
At March 6, 1996 Thermo Cardiosystems Inc. owned the following company:
State or Jurisdiction Registrant's
Name of Incorporation % of Ownership
--------------------------------------------------------------------------
TCA Securities Corporation Massachusetts 100
Exhibit 23
Consent of Independent Public Accountants
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation by reference of our reports dated February 7, 1996 included
in or incorporated by reference into Thermo Cardiosystems Inc.'s Annual
Report on Form 10-K for the year ended December 30, 1995, and into the
Company's previously filed Registration Statement No. 33-45283 on Form S-8,
Registration Statement No. 33-45255 on Form S-8, Registration Statement No.
33-52822 on Form S-8, Registration Statement No. 33-75654 on Form S-3,
Registration Statement No. 33-78732 on Form S-8, Registration Statement No.
33-78730 on Form S-8, Registration Statement No. 33-78734 on Form S-8,
Registration Statement No. 33-78736 on Form S-8, Registration Statement No.
33-78728 on Form S-8 and Registration Statement No. 033-65271 on Form S-8.
Arthur Andersen LLP
Boston, Massachusetts
March 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO
CARDIOSYSTEMS INC.'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 30,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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