Exhibit 10.4
[name]
[address]
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Re:
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Change of
Control Agreement
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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).
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 r
