Exhibit 10.4

[name]

[address]

 

  Re: Change of Control Agreement

Dear [name]:

FLIR Systems, Inc., an Oregon corporation with its Corporate offices located at
27700 SW Parkway Avenue, Wilsonville, Oregon 97070 (the “Company”), considers
the establishment and maintenance of a sound and vital management team to be
essential to protecting and enhancing the best interests of the Company and its
shareholders. To this end, the Company recognizes that, as is the case with many
publicly held corporations, the possibility of a Change of Control may exist and
that such possibility, and the uncertainty and questions that it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareholders. Accordingly, the Board of
Directors of the Company, acting through its Compensation Committee (the
“Committee”) has determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of members of the Company’s
management to their assigned duties without distraction in circumstances arising
from the possibility of a Change of Control of the Company.

To induce you to remain in the employ of the Company, this letter agreement
(“Agreement”) sets forth the severance benefits which the Company will provide
to you in the event your employment with the Company is terminated in connection
with a Change of Control, as defined herein, under the circumstances described
below.

1. Term of Agreement. The term of this Agreement is April 30, 2009, until
December 31, 2011; provided, however, that (i) the term of the Agreement shall
be extended automatically by additional, consecutive 12-month periods unless the
Company notifies you in writing of its decision to terminate the Agreement at
least one hundred eighty (180) days prior to the date on which the Agreement is
scheduled to expire and (ii) if a Change of Control, as defined in Section 2
below, occurs during the term of this Agreement, then notwithstanding any notice
of termination pursuant to clause (i), the Agreement shall continue in effect
for a period of one hundred eighty (180) days after the date of such Change of
Control. Notwithstanding anything to the contrary set forth herein, this
Agreement shall immediately terminate upon the termination of your employment
with the Company under circumstances other than as described in Section 3
hereof.

2. Change of Control. For the purpose of this Agreement, “Change of Control”
shall mean the occurrence of a “change in the ownership,” a “change in the
effective control” or a “change in the ownership of a substantial portion of the
assets” of the Company, as determined in accordance with this Section 2. In
determining whether an event shall be considered a “change in the ownership,” a
“change in the effective control” or a “change in the ownership of a substantial
portion of the assets” of the Company, the following provisions shall apply:

(a) A “change in the ownership” of the Company shall occur on the date on which
any one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total voting power
of the stock of the Company, as determined in accordance with Treasury
Regulation §1.409A-3(i)(5)(v).

(b) A “change in the effective control” of the Company shall occur on the date
on which a majority of the members of the Company’s Board of Directors is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Company’s Board of Directors
before the date of the appointment or election, as determined in accordance with
Treasury Regulation §1.409A-3(i)(5)(vi).

(c) A “change in the ownership of a substantial portion of the assets” of the
Company shall occur on the date on which any one person, or more than one person
acting as a group, acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such person or persons) assets
from the Company that have a total gross fair market value equal to or more than
50% of the total gross fair market value of all of the assets of the Company
immediately before such acquisition or acquisitions, as determined in accordance
with Treasury Regulation §1.409A-3(i)(5)(vii). A transfer of assets shall not be
treated as a “change in the ownership of a substantial portion of the assets”
when such transfer is made to an entity that is controlled by the shareholders
of the Company, as determined in accordance with Treasury Regulation
§1.409A-3(i)(5)(vii)(B).

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3. Termination Following Change of Control. If a Change of Control occurs during
the term of this Agreement and either (i) your employment is terminated by the
Company for a reason other than Cause within sixty (60) days before the Change
of Control or one hundred eighty (180) days after the Change of Control or
(ii) you terminate your employment due to Good Reason by delivery of a notice to
the Company within one hundred eighty (180) days after the Change of Control
setting forth the conditions that constitute Good Reason, then you will be
entitled to the benefits provided in Section 4 below; provided that you shall
not be entitled to such benefits if such termination is due to your death or
Disability. For the purpose of this Section 3:

(a) Cause” means you committed any one or more of the following: (i) theft,
embezzlement, fraud, misappropriation of funds, other acts of dishonesty or the
violation of any law or ethical rule relating to your employment by the Company;
(ii) a felony or any act involving moral turpitude for which you were convicted
or entered a plea of nolo contendere; (iii) a breach of any material provision
of this Agreement or any confidentiality agreement between you and the Company,
and if such violation or breach is susceptible of cure, the failure to effect
such cure within 30 calendar days after written notice of such breach is given
to you; or (iv) a breach of your fiduciary duty to the Company.

(b) “Disability” means your inability to perform the duties of your position
under this Agreement for a continuous period of five (5) months, with or without
reasonable accommodation, because of a physical or mental impairment, as
determined by the Committee.

(c) “Good Reason” shall mean, without your express written consent, the
occurrence of any of the following conditions:

(i) a material reduction in your base compensation;

(ii) a material diminution in your authority, duties, or responsibilities; or

(iii) a relocation of your primary employment duties by more than 50 miles;

provided, however, that the occurrence of any such condition shall not
constitute Good Reason unless you provide notice to the Company of the existence
of such condition not later than the earlier to occur of (A) 90 days after the
initial existence of such condition and (B) 180 days after the date of the
Change of Control, and the Company shall have failed to remedy such condition
within 30 days after receipt of such notice.

4. Change of Control Benefits.

(a) In the event you become eligible for benefits under Section 3, you will
receive (i) any benefits to which you are entitled pursuant to and in accordance
with the terms of any plan of the Company then in effect and any existing
contract between you and the Company, and (ii) the following benefits,
conditioned upon your signing a release of claims in a form reasonably
satisfactory to the Company not later than twenty-one (21) calendar days after
the date of your termination:

(i) your unvested equity awards will immediately vest and become exercisable;

(ii) a lump sum payment in an amount equal to your Cash Compensation received by
you from the Company for the two (2) most recent taxable years ending before the
date upon which the Change of Control occurred, payable upon the latest of
(i) thirty (30) calendar days from the date your employment terminates,
(ii) thirty (30) calendar days from the date of the Change of Control or
(iii) the expiration of any applicable revocation period under the release, but
in no event later than March 15th of the year following the year in which the
termination occurs. As used in this paragraph, Cash Compensation means your base
salary and your annual incentive plan payment, in each case including any
amounts deferred in the Company’s 401(k) plan and deferred compensation plan;
and

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(iii) until the earlier of (a) eighteen (18) months, (b) such time as you obtain
comparable benefits through employment or otherwise, or (c) age sixty-five (65),
the Company will pay the COBRA premiums for continuation of group health
insurance coverage for you and any of your eligible dependents that were covered
under the Company’s health plans on your date of termination.

(b) Notwithstanding any other provision of this Agreement, if any payment or
benefit you would receive pursuant to a Change of Control of the Company or
otherwise (each a “Payment” and collectively the “Payments”) could constitute a
“parachute payment” within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”), then the Company shall reduce the
Payments so that the maximum amount of the Payments shall be One Dollar ($1.00)
less than the amount that would cause the Payments to be subject to the excise
tax imposed by Section 4999 of the Code.

(c) If a reduction in Payments is necessary under Section 4(b), reduction shall
occur in the following order unless you elect in writing a different order
(provided, however, that such election shall be subject to Company approval if
made on or after the date on which the event that triggers the Payment occurs):
reduction of cash payments; cancellation of accelerated vesting of equity
awards; and then reduction of COBRA premiums. A nationally recognized,
independent accounting firm selected by the Company shall perform the
calculations required by this Agreement. The Company shall bear all reasonable
expenses with respect to the determinations by such accounting firm required to
be made hereunder. The accounting firm engaged to make the determinations
hereunder shall provide its calculations, together with supporting
documentation, to the Company and you promptly after the date on which your
right to a Payment is triggered (if requested at that time by you or the
Company) or such other time as requested by you or the Company, including a
reasonable time prior to the Payment trigger date. Any good faith determinations
of the accounting firm made hereunder shall be final, binding and conclusive
upon you and the Company.

5. Right to Terminate. Nothing in this Agreement modifies the “at will” nature
of your employment with Company. Both you and the Company retain the right to
terminate the employment relationship at any time.

6. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Company, each subsidiary and their respective successors and
assigns, and shall be binding upon you, your administrators, executors,
legatees, and heirs. In that this Agreement is a personal service contract, you
may not assign it.

7. Notices. All notices, requests and demands given to or made pursuant to this
Agreement shall, except as otherwise specified herein, be in writing and be
delivered or mailed to any such party at its address as set forth in this
Agreement (if to Company, to the attention of the General Counsel). Either party
may change its address, by notice to the other party given in the manner set
forth in this Section. Any notice, if mailed properly addressed, postage
prepaid, registered or certified mail, shall be deemed dispatched on the
registered date or that stamped on the certified mail receipt, and shall be
deemed received within the third (3rd) business day thereafter or when it is
actually received, whichever is sooner.

8. Captions. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.

9. Mediation & Arbitration.

(a) In the case of any dispute arising under this Agreement which cannot be
settled by reasonable discussion (a “Dispute”), the parties agree that, prior to
commencing any proceeding to enforce any rights under this Agreement, they will
first engage the services of a professional mediator agreed upon by the parties
and attempt in good faith to resolve the dispute through confidential nonbinding
mediation. Each party shall bear one-half ( 1/2) of the mediator’s fees and
expenses and shall pay all of its own attorneys’ fees and expenses related to
the mediation.

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(b) If any Dispute cannot be resolved pursuant to Section 9(a), such Dispute
shall be settled by arbitration in Portland, Oregon or such other location to
which the parties may agree administered by the American Arbitration
Association, with any such dispute or controversy arising under this Agreement
being so administered in accordance with its Commercial Rules then in effect,
and judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator shall have the authority to award
any remedy or relief that a court of competent jurisdiction could order or
grant, including, without limitation, the issuance of an injunction. Except as
necessary in court proceedings to enforce this arbitration provision or an award
rendered hereunder, or to obtain interim relief, neither a party nor an
arbitrator may disclose the existence, content or results of any arbitration
hereunder without the prior written consent of the Company and you. You and the
Company acknowledge that this Agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision included in
this Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision.

10. Governing Law and Jurisdiction. The validity, construction and performance
of this Agreement shall be governed by the laws of the State of Oregon, without
regard to its choice of laws provisions.

11. Attorney Fees. In the event of any suit, action or arbitration to interpret
or enforce this Agreement, the prevailing party shall be entitled to recover its
attorney fees, costs and out-of-pocket expenses at trial and on appeal.

12. Construction. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

12. Waivers. No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or
remedy granted hereby or by any related document or by law.

13. Modification. This Agreement may not be modified or amended except by
written instrument signed by the parties hereto.

14. Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes all prior or contemporaneous oral or written
understandings, agreements, statements, representations or promises with respect
to its subject matter. This Agreement was the subject of negotiation between the
parties and, therefore, the parties agree that the rule of construction
requiring that the agreement be construed against the drafter shall not apply to
the interpretation of this Agreement.

If you accept the terms and conditions set forth herein, please so indicate by
signing below and returning this Agreement to the Company’s Vice President –
Human Resources.

Signed this 6th day of May, 2009.

 

FLIR Systems, Inc. By:   /s/ Earl R. Lewis   Earl R. Lewis   Chairman, President
and Chief Executive Officer

ACCEPTED AND AGREED:

 

   [employee name]