Document:

EX-10.20

 

EXHIBIT
10.20

THERMO FISHER SCIENTIFIC INC.

PERFORMANCE RESTRICTED STOCK AGREEMENT

Granted Under

2005 Stock Incentive Plan

1. Award of Restricted Shares. 

     This agreement sets forth the terms and conditions of an award by Thermo Fisher
Scientific Inc., a Delaware corporation (the “Company”), on                     , 200[ ] (the “Award
Date”) to
                                         (the “Participant”) of ___ shares (the “Restricted Shares”) of
common stock, $1.00 par value, of the Company (“Common Stock”) pursuant to the terms, conditions
and restrictions set forth in this Agreement and in the Company’s 2005 Stock Incentive Plan (the
“Plan”). Capitalized terms used in this Agreement and not otherwise defined shall have the same
meaning as in the Plan.

2. Vesting Schedule. 

     The restrictions set forth in this Agreement shall lapse and the Restricted Shares shall
vest in accordance with Schedule A attached hereto and incorporated herein;
provided, that on each date referenced in Schedule A, the Participant is, and has
been at all times since the Award Date, an employee, officer or director of, or consultant or
advisor to, the Company or any other entity the employees, officers, directors, consultants, or
advisors of which are eligible to receive restricted stock awards under the Plan (an “Eligible
Participant”). The foregoing notwithstanding, if a Participant ceases to be an Eligible
Participant (i) after the First Revenue Vesting Date but before the Second Revenue Vesting Date
and/or (ii) after the First EPS Vesting Date but before the Second EPS Vesting Date, in either case
as of result of (x) the termination of an Eligible Participant’s employment due to death or
“disability” (as defined below), (y) the termination of an Eligible Participant’s employment by the
Company without “Cause” (as defined in the Plan) or (z) the termination by the Eligible Participant
of his or her employment for “Good Reason” (as defined in the Plan) after a Change in Control
Event, then the Restricted Shares that would have otherwise vested on the Second Revenue Vesting
Date or the Second EPS Vesting Date, as the case may be, shall vest on the date the Participant
ceases to be an Eligible Participant. For the purposes of this Agreement, a Participant shall be
deemed to be
“disabled” at such time as the Participant is receiving disability benefits under the
Company’s Long Term Disability Coverage, as then in effect.

3. Forfeiture.

     Except as provided in Section 2 above, in the event that the Participant ceases to be an
Eligible Participant for any reason, the Restricted Shares that have not previously vested shall be
immediately forfeited to the Company. For the avoidance of doubt and notwithstanding the
provisions of Section 9(b)(5) of the Plan, if a Participant’s employment with the Company
terminates for any reason (and regardless of whether a Change in Control Event has occurred)

 

 

prior
to the First Revenue Vesting Date or the First EPS Vesting Date, all Restricted Shares shall be
forfeited at the time of employment termination.

4. Restrictions on Transfer.

     The Restricted Shares may not be sold, assigned, transferred, pledged, or otherwise
encumbered or disposed of except by will or laws of descent and distribution unless and until such
Restricted Shares shall have vested as provided in this Agreement and in the Plan. Notwithstanding
the foregoing, the Company consents to the gratuitous transfer of the Restricted Shares that have
not vested to or for the benefit of any immediate family member, family trust or family partnership
established solely for the benefit of the Participant and/or an immediate family member;
provided that with respect to such proposed transferee the Company would be eligible to use
a Form S-8 for the registration of the sale of Common Stock constituting the Restricted Shares
under the Securities Act of 1933, as amended; and provided further that such
Restricted Shares shall remain subject to the terms and conditions of this Agreement (including
without limitation forfeiture and restrictions on transfer) and the Company shall not be required
to recognize any such transfer until such time as the Participant and the permitted transferee
shall, as a condition to such transfer, deliver to the Company a written instrument in form and
substance satisfactory to the Company confirming that such transferee shall be bound by all of the
terms and conditions of this Agreement.

5. Escrow.

     (a) Appointment. The Participant irrevocably authorizes the Company to deposit
with the Secretary of the Company (in such capacity, the “Escrow Agent”) any certificates
evidencing Restricted Shares, to be held by the Escrow Agent hereunder, and any additions and
substitutions to said Restricted Shares. For purposes of this Section 5, “Restricted Shares” shall
be deemed to include any additional or substitute property. The Participant does hereby
irrevocably constitute and appoint the Escrow Agent as his or her attorney-in-fact and agent for
the term of this escrow to execute with respect to such Restricted Shares all documents necessary
or appropriate to make such Restricted Shares negotiable and to complete any transaction
herein contemplated. Subject to the terms of this Agreement, the Participant shall exercise all
rights and privileges of a stockholder of the Company while the Restricted Shares are held by the
Escrow Agent. The Participant shall, upon request of the Escrow Agent, deliver to the Escrow Agent
a stock assignment duly endorsed in blank, in the form provided by the Company, and hereby
instructs the Company to deliver to the Escrow Agent, on behalf of the Participant, the
certificate(s) evidencing the Restricted Shares.

     (b) Withdrawal. The Participant shall have the right to withdraw from escrow any
Restricted Shares that have vested (as provided in this Agreement).

     (c) Duties of Escrow Agent. The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by him to be genuine and
to have been signed or presented by the proper party or parties. The Escrow Agent shall not be
personally liable for any act he may do or omit to do hereunder as Escrow Agent or as
attorney-in-fact of the Participant while acting in good faith and in the exercise of his good

 

 

judgment. The Escrow Agent is hereby expressly authorized to disregard any and all warnings given
by any of the parties or by any other person or entity, excepting only orders or process of courts
of law, and is hereby expressly authorized to comply with and obey orders, judgments or decrees of
any court. If the Escrow Agent is uncertain of any actions to be taken or instructions to be
followed, he may refuse to act in the absence of an order, judgment or decrees of a court. In case
the Escrow Agent obeys or complies with any such order, judgment or decree of any court, he shall
not be liable to any of the parties or to any other person or entity, by reason of such compliance,
notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled,
set aside, vacated or found to have been entered without jurisdiction. The Escrow Agent shall not
be liable in any respect on account of the identity, authority or rights of the parties executing
or delivering or purporting to execute or deliver this Agreement or any documents or papers
deposited or called for hereunder. It is understood and agreed that if the Escrow Agent believes a
dispute has arisen with respect to the delivery and/or ownership or right of possession of the
securities held by him hereunder, the Escrow Agent is authorized and directed to retain in his
possession without liability to anyone all or any part of said securities until such dispute shall
have been settled either by mutual written agreement of the parties concerned or by a final order,
decree or judgment of a court of competent jurisdiction after the time for appeal has expired and
no appeal has been perfected, but he shall be under no duty whatsoever to institute or defend any
such proceedings. The Escrow Agent’s rights and responsibilities as Escrow Agent shall terminate
if he ceases to be Secretary of the Company, in which case the successor as Secretary of the
Company shall become Escrow Agent hereunder.

6. Restrictive Legends.

     (a) Legended Certificates. All certificates representing unvested Restricted
Shares shall have affixed thereto legends in substantially the following form, in addition to any
other legends that may be required under federal or state securities laws:

“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS (INCLUDING FORFEITURE
AND RESTRICTION ON TRANSFER) OF THE ISSUER’S STOCK INCENTIVE PLAN AND A RESTRICTED
STOCK AGREEMENT BETWEEN THE ISSUER AND THE REGISTERED OWNER OF THESE SHARES (OR HIS
OR HER PREDECESSOR IN INTEREST). COPIES OF SUCH PLAN AND AGREEMENT ARE AVAILABLE
FOR INSPECTION WITHOUT CHARGE AT THE OFFICE OF THE SECRETARY OF THE ISSUER.”

     (b) Book Entry. If unvested Restricted Shares are held in book entry form, the
Participant agrees that the Company may give stop transfer instructions to the depository to ensure
compliance with the provisions of this Agreement. The Participant hereby (i) acknowledges that the
unvested Restricted Shares may be held in book entry form on the books of the Company’s depository
(or another institution specified by the Company), and irrevocably authorizes the Company to take
such actions as may be necessary or appropriate to effectuate a transfer of the record ownership of
any such shares that are unvested and forfeited hereunder, (ii) agrees to deliver to the Company,
as a precondition to the issuance of any certificate or certificates with respect to unvested
Restricted Shares, one or more stock powers, endorsed in blank, with respect to such shares, and
(iii) agrees to sign such other powers and take such other

 

 

actions as the Company may reasonably
request to accomplish the transfer or forfeiture of any unvested Restricted Shares that are
forfeited hereunder.

7. Unrestricted Shares.

     As soon as practicable following the vesting of any Restricted Shares the Company shall cause
a certificate or certificates covering such shares, without the legend contained in Section 6(a) of
this Agreement, to be issued and delivered to the Participant, subject to the payment by the
Participant by cash or other means acceptable to the Company of any federal, state, local and other
applicable taxes required to be withheld in connection with such vesting. The Participant
understands that once a certificate has been delivered to the Participant in respect of Restricted
Shares which have vested, the Participant will be free to sell the shares of Common Stock evidenced
by such certificate, subject to applicable requirements of federal and state securities laws.

8. Provisions of the Plan.

     This Agreement is subject to the provisions of the Plan, including without limitation,
the provisions of Section 10(i) thereof pertaining to Section 162(m) of the Code.

9. Dividends and Voting Rights.

     The Participant shall be entitled to any and all dividends or other distributions paid with
respect to the Restricted Shares which have not been forfeited or otherwise disposed of and shall
be entitled to vote any such Restricted Shares; provided, however, that any
property (other than cash) distributed with respect to the Restricted Shares, including without
limitation a distribution of shares of the Company’s stock by reason of a stock dividend, stock
split or otherwise, or a distribution of other securities based on the ownership of Restricted
Shares, shall be subject to the restrictions of this Restricted Stock Agreement in the same manner
and for so long as the
Restricted Shares remain subject to such restrictions, and shall be forfeited to the Company
if and when the Restricted Shares are so forfeited.

10. Withholding Taxes; Section 83(b) Election.

     (a) The Participant expressly acknowledges that the award of the Restricted Shares to the
Participant or the vesting thereof will give rise to “wages” subject to withholding. The
Participant expressly acknowledges and agrees that the Participant’s rights hereunder are subject
to the Participant ‘s paying to the Company in cash (or by the delivery of previously acquired
shares of Common Stock or by having the Company hold back from the shares to be delivered, shares
of Common Stock having a Fair Market Value calculated to satisfy the withholding requirement) all
federal, state, local and any other applicable taxes required to be withheld in connection with
such award or vesting; provided, however, except as otherwise provided by the
Board, the total tax withholding where stock is being used to satisfy such tax obligations cannot
exceed the Company’s minimum statutory withholding obligations (based on minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes, that are applicable
to such supplemental taxable income). If the withholding obligation is not satisfied by the
Participant promptly, the Participant acknowledges and agrees that the Company has the right

 

 

(without further consent from the Participant) to deduct any federal, state or local taxes of any
kind required by law to be withheld with respect to the award of the Restricted Shares to the
Participant or the vesting thereof from payments of any kind otherwise due to the Participant
(including but not limited to, the hold back from the shares to be delivered pursuant to Section 7
of this Agreement of that number of shares calculated to satisfy all such federal, state, local or
other applicable taxes required to be withheld in connection with such award or vesting).

     (b) The Participant has reviewed with the Participant’s own tax advisors the federal, state,
local and foreign tax consequences of this investment and the transactions contemplated by this
Agreement. The Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Participant understands that the
Participant (and not the Company) shall be responsible for the Participant’s own tax liability that
may arise as a result of this investment or the transactions contemplated by this Agreement. The
Participant understands that it may be beneficial in some circumstances to elect to be taxed at the
time the Restricted Shares are awarded rather than when and as the restrictions thereon lapse by
filing an election under Section 83(b) of the Code with the I.R.S. within 30 days from the date of
award.

     THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT’S SOLE RESPONSIBILITY AND NOT THE
COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PARTICIPANT REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PARTICIPANT’S BEHALF.

     11. No Right To Employment or Other Status. The grant of an award of Restricted Shares
shall not be construed as giving the Participant the right to continued employment or any other
relationship with the Company or a Subsidiary. The Company and Subsidiaries expressly reserve the
right at any time to dismiss or otherwise terminate its relationship with the Participant
free from any liability or claim under the Plan or this Agreement, except as expressly provided
herein.

     12. Conflicts With Other Agreements. In the event of any conflict or inconsistency between
the terms of this Agreement and any employment, severance or other agreement between the Company
and the Participant, the terms of this Agreement shall govern.

     13. Governing Law. This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware without regard to any applicable conflicts of laws.

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	THERMO FISHER SCIENTIFIC INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	[Name of Participant]	 	 
	 

	 	Address:EX-10.21

 

EXHIBIT 10.21

THERMO FISHER SCIENTIFIC INC.

DIRECTORS STOCK OPTION PLAN

As amended and restated effective as of November 9, 2006

1. Purpose

     The purpose of this Directors Stock Option Plan (the “Plan”) of Thermo Fisher Scientific Inc.
(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

 

 

	 
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purchase shares of Common Stock at the close of business on the date of such Annual Meeting, except
that (i) the grant of options for 2003 shall be made as of the close of business on May 15, 2003
and (ii) no options shall be awarded in connection with the 2007 Annual Meeting. 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 2008 and Thereafter.

          1. Options granted during 2008 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 2008 and thereafter shall
be the closing price 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
last reported sale price on the NASDAQ National Market List on the date the option is granted, or
the closing bid price 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 During 2005 and 2006.

          1. Options granted during 2005 and 2006 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 2006 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

 

 

	 
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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.

	     D.	 	General Terms and Conditions Applicable to Grants After 2002 but Before
2005.

          1. Options granted after 2002 but before 2005 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 after 2002 but before 2005 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 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.

 

 

	 
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     F. 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.

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 Fisher Scientific Inc. 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.

 

 

	 
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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.

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) equitable adjustments to the maximum number of shares that may be
delivered under the Plan under Section 4 above, and (ii) equitable 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 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.

 

 

	 
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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.

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)(1), the following provisions
shall apply.

 

 

	 
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          1. Options Granted before November 9, 2006. 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.

          2. Options Granted on or after November 9, 2006. In the event that an Optionee ceases
to be a Director of the Company within eighteen (18) months following a Change in Control, each
outstanding option granted under the Plan on or after November 9, 2006 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):

     (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

 

 

	 
	8

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.

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.

 

 

	 
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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.

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