Form 8-K for Thermo Electron Corporation on 05/18/06


    


    Exhibit
      10.1

    


    THERMO
      ELECTRON CORPORATION

    


    DIRECTORS
      STOCK OPTION PLAN

    


    As
      amended and restated effective as of May 18, 2006

    


    
      	
              1.

            	
              Purpose

            


    

    


    The
      purpose of this Directors Stock Option Plan (the "Plan") of Thermo Electron
      Corporation (the "Company") is to encourage ownership in the Company by outside
      directors of the Company whose services are considered essential to the
      Company's growth and progress and to provide them with a further incentive
      to
      become directors and to continue as directors of the Company. The Plan is
      intended to be a nonstatutory stock option plan.

    


    
      	
              2.

            	
              Administration

            


    

    


    The
      Board of Directors (the “Board”), or a Committee (the "Committee") consisting of
      one or more directors of the Company appointed by the Board, shall supervise
      and
      administer the Plan. Grants of stock options under the Plan and the amount
      and
      nature of the options to be granted shall be automatic in accordance with
      Section 5. However, all questions of interpretation of the Plan or of any stock
      options granted under it shall be determined by the Board or the Committee
      and
      such determination shall be final and binding upon all persons having an
      interest in the Plan.

    


    
      	
              3.

            	
              Participation
                in the Plan

            


    

    


    Directors
      of the Company who are not employees of the Company or any subsidiary or parent
      of the Company shall be eligible to participate in the Plan. Directors who
      receive grants of stock options in accordance with this Plan are sometimes
      referred to herein as "Optionees." 

    


    
      	
              4.

            	
              Stock
                Subject to the Plan

            


    

    


    The
      maximum number of shares that may be issued under the Plan shall be 773,330
      shares of the Company's Common
      Stock (the "Common Stock"), subject to adjustment as provided in Section 9.
      Shares to be issued upon the exercise of options granted under the Plan may
      be
      either authorized but unissued shares or shares held by the Company in its
      treasury. If any option expires or terminates for any reason without having
      been
      exercised in full, the unpurchased shares subject thereto shall again be
      available for options thereafter to be granted. 

    


    
      	
              5.

            	
              Terms
                and Conditions

            


    

    


    
      	 	
              A.

            	
              Annual
                Stock Option
                Grants

            


    

    


    Each
      Director of the Company who meets the requirements of Section 3 and who is
      holding office immediately following the Annual Meeting of Stockholders
      commencing with the Annual Meeting of Stockholders held in calendar
      year 1993, shall
      be granted an option to purchase
      shares of Common Stock at the close of business on the date of such Annual
      Meeting, except that the grant of options for 2003 shall be made as of the
      close
      of business on May 15, 2003. Prior to 2003, the annual option granted to each
      eligible Director shall be exercisable to purchase 1,000 shares of Common Stock.
      Commencing with the annual grant in 2003, each eligible Director shall be
      granted an option to purchase 7,500 shares of Common Stock. In 2006, each
      eligible Director shall be granted an option to purchase 10,500 shares of Common
      Stock.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              B.

            	
              General
                Terms and Conditions Applicable to Grants During 2005 and
                Thereafter.

            


    

    


    1.    Options
      granted during 2005 and thereafter shall be exercisable to the extent they
      are
      vested. Each option shall vest in equal annual installments on the first, second
      and third anniversaries of the grant date, provided that on each vesting date,
      the Optionee is a Director of the Company. Vested options may be exercised
      prior
      to the date which is the earliest of:

     

    
      (a)
        seven years after the grant date, (b) three years after the Optionee ceases
        to
        serve as a Director of the Company (one year in the event the Optionee ceases
        to
        meet the requirements of this Subsection by reason of his or her death),
        or (c)
        the date of dissolution or liquidation of the Company.

       

    

    2.    The
      exercise price at which options are granted hereunder during 2005 and thereafter
      shall be the average of the opening and closing prices on the national
      securities exchange on which the Common Stock is principally traded on the
      date
      the option is granted or, if such security is not traded on an exchange, the
      average of the opening and last reported sale price on the NASDAQ National
      Market List on the date the option is granted, or the average of the opening
      and
      closing bid prices last quoted by an established quotation service for
      over-the-counter securities on the date the option is granted, or if none of
      the
      above shall apply, the last price paid for shares of the Common Stock by
      independent investors in a private placement. 

    

       

    

    
      	 	
              C.

            	
              General
                Terms and Conditions Applicable to Grants After
                2002.

            


    

    


    1.    Options
      granted after 2002 shall be exercisable to the extent they are vested. Each
      option shall vest in equal annual installments on the first, second and third
      anniversaries of the grant date, provided that on each vesting date, the
      Optionee is a Director of the Company. Vested options may be exercised prior
      to
      the date which is the earliest of:

     

    
      (a)
        seven years after the grant date, (b) three years after the Optionee ceases
        to
        serve as a Director of the Company (one year in the event the Optionee ceases
        to
        meet the requirements of this Subsection by reason of his or her death),
        or (c)
        the date of dissolution or liquidation of the Company.

       


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

    

    2.    The
      exercise price at which options are granted hereunder after 2002 shall be the
      average of the closing prices reported by the national securities exchange
      on
      which the Common Stock is principally traded for the five trading days
      immediately preceding and including the date the option is granted or, if such
      security is not traded on an exchange, the average last reported sale price
      for
      the five-day period on the NASDAQ National Market List, or the average of the
      closing bid prices for the five-day period last quoted by an established
      quotation service for over-the-counter securities, or if none of the above
      shall
      apply, the last price paid for shares of the Common Stock by independent
      investors in a private placement.

    


    
      	 	
              D.

            	
              General
                Terms and Conditions Applicable to Grants in
                2002.

            


    

    


    1.    Options
      granted in 2002 shall be immediately exercisable at any time from and after
      the
      grant date and prior to the date which is the earliest of:

    
      


      (a) 
        seven years after the grant date, (b) three years after the Optionee ceases
        to
        serve as a Director of the Company, (one year in the event the Optionee ceases
        to meet the requirements of this Subsection by reason of his or her death),
        or
        (c) the date of dissolution or liquidation of the Company.

       

    

    2.    The
      exercise price at which options are granted hereunder in 2002 shall be the
      average of the closing prices reported by the national securities exchange
      on
      which the Common Stock is principally traded for the five trading days
      immediately preceding and including the date the option is granted or, if such
      security is not traded on an exchange, the average last reported sale price
      for
      the five-day period on the NASDAQ National Market List, or the average of the
      closing bid prices for the five-day period last quoted by an established
      quotation service for over-the-counter securities, or if none of the above
      shall
      apply, the last price paid for shares of the Common Stock by independent
      investors in a private placement.

     

    
      	 	
              E.

            	
              General
                Terms and Conditions Applicable to Grants Prior to
                2002.

            


    

    


    1.    Options
      granted prior to 2002 shall be immediately exercisable at any time from and
      after the grant date and prior to the date which is the earliest
      of:

     

    
      (a)
        three years after the grant date, (b) two years after the Optionee ceases
        to
        serve as a Director of the Company (one year in the event the Optionee ceases
        to
        meet the requirements of this Subsection by reason of his or her death),
        or (c)
        the date of dissolution or liquidation of the Company.

       

    

    2.    The
      exercise price at which options are granted hereunder prior to 2002 shall be
      the
      average of the closing prices reported by the national securities exchange
      on
      which the Common Stock is principally traded for the five trading days
      immediately preceding and including the date the option is granted or, if such
      security is not traded on an exchange, the average last reported sale price
      for
      the five-day period on the NASDAQ National Market List, or the average of the
      closing bid prices for the five-day period last quoted by an established
      quotation service for over-the-counter securities, or if none of the above
      shall
      apply, the last price paid for shares of the Common Stock by independent
      investors in a private placement.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    
      	
              6.

            	
              Exercise
                of Options

            


    

    


    
      	 	
              A.

            	
              Exercise/Consideration

            


    

    


    An
      option may be exercised in accordance with the instructions described in “The
      Guide for Employees of Thermo Electron Stock Option Plans” and any supplement
      thereto as they may be amended from time to time (the “Guide”). Upon exercise of
      the option in accordance with the aforementioned instructions, the Company
      shall
      deliver or cause to be delivered to the Optionee the number of shares then
      being
      purchased, registered in the name of the Optionee or other person exercising
      the
      option. If any law or applicable regulation of the Securities and Exchange
      Commission or other body having jurisdiction in the premises shall require
      the
      Company or the Director to take any action in connection with shares being
      purchased upon exercise of the option, exercise of the option and delivery
      of
      the certificate or certificates for such shares shall be postponed until
      completion of the necessary action, which shall be taken at the Company's
      expense.

    


    
      	 	
              B.

            	
              Tax
                Withholding

            


    

    


    No
      later than the date on which part or all of the value of any shares received
      upon the exercise of an option first becomes includible in an Optionee’s gross
      income for income tax purposes, the Optionee shall satisfy his or her
      obligations to pay any federal, state or local taxes required to be withheld
      with respect to such income in accordance with the provisions of the Guide.
      Notwithstanding the foregoing, no election to use shares for the payment of
      withholding taxes shall be effective unless made in compliance with any
      applicable requirements of Rule 16b-3.

    


    
      	
              7.

            	
              Transferability

            


    

    


    Except
      as may be authorized by the Board or the Committee, in its sole discretion,
      no
      option may be transferred other than by will or the laws of descent and
      distribution, and during an Optionee’s lifetime an option may be exercised only
      by him or her (or in the event of incapacity, the person or persons properly
      appointed to act on his or her behalf). The Board or the Committee may, in
      its
      discretion, determine the extent to which options granted to an Optionee shall
      be transferable.

    


    
      	
              8.

            	
              Limitation
                of Rights to Continue as a
                Director

            


    

    


    Neither
      the Plan, nor the quantity of shares subject to options granted under the Plan,
      nor any other action taken pursuant to the Plan, shall constitute or be evidence
      of any agreement or understanding, express or implied, that the Company will
      retain a Director for any period of time, or at any particular rate of
      compensation.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    
      	
              9.

            	
              Adjustments
                in the Event of Certain
                Transactions

            


    

    


    (a) 
      In
      the event of a stock dividend, stock split or combination of shares, or other
      distribution with respect to holders of Common Stock other than normal cash
      dividends, the Board or the Committee will make (i) appropriate adjustments
      to
      the maximum number of shares that may be delivered under the Plan under Section
      4 above, and (ii) appropriate adjustments to the number and kind of shares
      of
      stock or securities subject to options then outstanding or subsequently granted,
      any exercise prices relating to options and any other provisions of options
      affected by such change.

    


    (b) 
      In
      the event of any recapitalization, merger or consolidation involving the
      Company, any transaction in which the Company becomes a subsidiary of another
      entity, any sale or other disposition of all or a substantial portion of the
      assets of the Company or any similar transaction, as determined by the Board,
      the Board in its discretion may make appropriate adjustments to outstanding
      options, including, without limitation: (i) accelerate the exercisability of
      the
      option, or (ii) adjust the terms of the option (whether or not in a manner
      that
      complies with the requirements of Section 424(a) of the Internal Revenue Code
      of
      1986, as amended (the “Code”)), or (iii) if there is a survivor or acquiror
      entity, provide for the assumption of the option by such survivor or acquiror
      or
      an affiliate thereof or for the grant of one or more replacement options by
      such
      survivor or acquiror or an affiliate thereof, in each case on such terms (which
      may, but need not, comply with the requirements of Section 424(a) of the Code)
      as the Board may determine, or (iv) terminate the option (provided, that if
      the
      Board terminates the option, it shall, in connection therewith, either (A)
      accelerate the exercisability of the option prior to such termination, or (B)
      provide for a payment to the holder of the option of cash or other property
      or a
      combination of cash or other property in an amount reasonably determined by
      the
      Board to approximate the value of the option assuming an exercise immediately
      prior to the transaction, or (C) if there is a survivor or acquiror entity,
      provide for the grant of one or more replacement options pursuant to clause
      (iii) above), or (v) provide for none of, or any combination of, the foregoing.
      

    


    (c) 
      No fraction of a share or fractional shares shall be purchasable or deliverable
      pursuant to this Section 9.

    


    
      	
              10.

            	
              Limitation
                of Rights in Option
                Stock

            


    

    


    The
      Optionee shall have no rights as a stockholder in respect of shares as to which
      his or her 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.

    


    
      	
              11.

            	
              Stock
                Reserved

            


    

    


    The
      Company shall at all times during the term of the options reserve and keep
      available such number of shares of the Common Stock as will be sufficient to
      permit the exercise in full of all options granted under this Plan and shall
      pay
      all other fees and expenses necessarily incurred by the Company in connection
      therewith.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
 

    
      	
              12.

            	
              Securities
                Laws Restrictions

            


    

    


    
      	 	
              A.

            	
              Investment
                Representations.

            


    

    


    The
      Company may require any person to whom an option is granted, as a condition
      of
      exercising such option, to give written assurances in substance and form
      satisfactory to the Company to the effect that such person is acquiring the
      Common Stock subject to the option for his or her own account for investment
      and
      not with any present intention of selling or otherwise distributing the same,
      and to such other effects as the Company deems necessary or appropriate in
      order
      to comply with federal and applicable state securities laws.

    


    
      	 	
              B.

            	
              Compliance
                with Securities
                Laws.

            


    

    


    Each
      option shall be subject to the requirement that if, at any time, counsel to
      the
      Company shall determine that the listing, registration or qualification of
      the
      shares subject to such option upon any securities exchange or under any state
      or
      federal law, or the consent or approval of any governmental or regulatory body,
      or that the disclosure of non-public information or the satisfaction of any
      other condition is necessary as a condition of, or in connection with, the
      issuance or purchase of shares thereunder, such option may not be exercised,
      in
      whole or in part, unless such listing, registration, qualification, consent
      or
      approval, or satisfaction of such condition shall have been effected or obtained
      on conditions acceptable to the Board or the Committee. Nothing herein shall
      be
      deemed to require the Company to apply for or to obtain such listing,
      registration or qualification, or to satisfy such condition.

    


    
      	
              13.

            	
              Change
                in Control

            


    

    


    
      	 	
              A.

            	
              Impact
                of Event

            


    

    


    In
      the event of a “Change in Control” as defined in Section 13(B), the following
      provisions shall apply. If a Change in Control occurs while any options are
      outstanding, then, effective upon the Change in Control, each outstanding option
      under the Plan that was not previously vested shall become immediately
      exercisable in full.

    


    
      	 	
              B.

            	
              Definition
                of “Change in
                Control”

            


    

    


    “Change
      in Control”
      means an event or occurrence set forth in any one or more of subsections (a)
      through (d) below (including an event or occurrence that constitutes a Change
      in
      Control under one of such subsections but is specifically exempted from another
      such subsection):

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (a) 
      the
      acquisition by an individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership
      of any capital stock of the Company if, after such acquisition, such Person
      beneficially owns (within the meaning of Rule 13d-3 promulgated under the
      Exchange Act) 40% or more of either (i) the then-outstanding Common Stock (the
      “Outstanding TMO Common Stock”) or (ii) the combined voting power of the
      then-outstanding securities of the Company entitled to vote generally in the
      election of Directors (the “Outstanding TMO Voting Securities”); provided,
      however,
      that for purposes of this subsection (a), the following acquisitions shall
      not
      constitute a Change in Control: (i) any acquisition by the Company, (ii) any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any corporation controlled by the Company, or
      (iii)
      any acquisition by any corporation pursuant to a transaction which complies
      with
      clauses (i) and (ii) of subsection (c) of this definition; or

    


    (b) 
      such
      time as the Continuing Directors (as defined below) do not constitute a majority
      of the Board (or, if applicable, the Board of Directors of a successor
      corporation to the Company), where the term “Continuing Director” means at any
      date a member of the Board (i) who was a member of the Board as of May 14,
      2003
      or (ii) who was nominated or elected subsequent to such date by at least a
      majority of the Directors who were Continuing Directors at the time of such
      nomination or election or whose election to the Board was recommended or
      endorsed by at least a majority of the Directors who were Continuing Directors
      at the time of such nomination or election; provided,
      however,
      that there shall be excluded from this clause (ii) any individual whose initial
      assumption of office occurred as a result of an actual or threatened election
      contest with respect to the election or removal of Directors or other actual
      or
      threatened solicitation of proxies or consents, by or on behalf of a person
      other than the Board; or

    


    (c) 
      the
      consummation of a merger, consolidation, reorganization, recapitalization or
      statutory share exchange involving the Company or a sale or other disposition
      of
      all or substantially all of the assets of the Company in one or a series of
      transactions (a “Business Combination”), unless, immediately following such
      Business Combination, each of the following two conditions is satisfied: (i)
      all
      or substantially all of the individuals and entities who were the beneficial
      owners of the Outstanding TMO Common Stock and Outstanding TMO Voting Securities
      immediately prior to such Business Combination beneficially own, directly or
      indirectly, more than 60% of the then-outstanding shares of Common Stock and
      the
      combined voting power of the then-outstanding securities entitled to vote
      generally in the election of Directors, respectively, of the resulting or
      acquiring corporation in such Business Combination (which shall include, without
      limitation, a corporation which as a result of such transaction owns the Company
      or substantially all of the Company’s assets either directly or through one or
      more subsidiaries) (such resulting or acquiring corporation is referred to
      herein as the “Acquiring Corporation”) in substantially the same proportions as
      their ownership, immediately prior to such Business Combination, of the
      Outstanding TMO Common Stock and Outstanding TMO Voting Securities,
      respectively; and (ii) no Person (excluding the Acquiring Corporation or any
      employee benefit plan (or related trust) maintained or sponsored by the Company
      or by the Acquiring Corporation) beneficially owns, directly or indirectly,
      40%
      or more of the then outstanding shares of common stock of the Acquiring
      Corporation, or of the combined voting power of the then-outstanding securities
      of such corporation entitled to vote generally in the election of directors;
      or


    


    (d) 
      approval
      by the stockholders of the Company of a complete liquidation or dissolution
      of
      the Company.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              14.

            	
              Amendment
                of the Plan

            


    

    


    The
      Board may amend, suspend or terminate the Plan or any portion thereof at any
      time; provided that
      (i) no amendment that would require stockholder approval under the rules of
      the
      New York Stock Exchange (“NYSE”) may be made effective unless and until such
      amendment shall have been approved by the Company’s stockholders, and (ii) if
      the NYSE amends its corporate governance rules so that such rules no longer
      require stockholder approval of “material revisions” to equity compensation
      plans, then, from and after the effective date of such amendment to the NYSE
      rules, no amendment to the Plan (A) materially increasing the number of shares
      authorized under the Plan, (B) expanding the types of Awards that may be granted
      under the Plan, (C) materially expanding the class of participants eligible
      to
      participate in the Plan, or (D) deleting or limiting any provisions prohibiting
      repricing of options shall be effective unless stockholder approval is obtained.
      In addition, if at any time the approval of the Company’s stockholders is
      required as to any other modification or amendment under Section 422 of the
      Code or any successor provision with respect to Incentive Stock Options, the
      Board may not effect such modification or amendment without such
      approval.

     

    
      	
              15.

            	
              Effective
                Date of the Plan

            


    

    


    The
      Plan was approved by the Board on March 29, 1993 and approved by the
      Stockholders on May 25, 1993.

    


    
      	
              16.

            	
              Notice

            


    

    


    Any
      written notice to the Company required by any of the provisions of the Plan
      shall be addressed to the Secretary of the Company and shall become effective
      when it is received.

    


    
      	
              17.

            	
              Governing
                Law

            


    

    


    The
      Plan and all determinations made and actions taken pursuant hereto shall be
      governed by the laws of the State of Delaware.

     

    


    
      
        
        

      

      
        8