Danaher 2011 Annual Report Download - page 111

Table of Contents
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None.
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The Company’s management, with the participation of the Company’s President and Chief Executive Officer, and Executive Vice President and Chief
Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such
evaluation, the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, have concluded that, as of the
end of such period, the Company’s disclosure controls and procedures were effective.
Management’s annual report on our internal control over financial reporting and the independent registered public accounting firm’s audit report on the
effectiveness of our internal control over financial reporting are included in our financial statements for the year ended December 31, 2011 included in Item 8
of this Annual Report on Form 10-K, under the headings “Report of Management on Danaher Corporation’s Internal Control Over Financial Reporting” and
“Report of Independent Registered Public Accounting Firm”, respectively, and are incorporated herein by reference.
There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the Company’s most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially
affect, the Company’s internal control over financial reporting.
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Aircraft Purchase
In 2011, Danaher’s management determined that the travel requirements of the Company’s officers and other senior management require an additional
Company aircraft. Also in 2011, Mr. Steven M. Rales (Danaher’s Chairman of the Board and a co-founder of Danaher) determined to replace his Dassault
Falcon 900B aircraft (the “Aircraft”) with a new aircraft, and as a result determined to sell the Aircraft. Danaher determined that it would be beneficial for
Danaher to acquire the Aircraft from Mr. Rales if the parties could agree on mutually acceptable, arms’-length terms, because the Aircraft and Danaher’s
existing aircraft have been under the common management of Danaher’s FJ900, Inc. subsidiary and therefore Danaher is familiar with the Aircraft and its
maintenance and operational history and has a flight crew qualified to fly the Aircraft. To provide the basis for an arms’-length purchase price, the parties
jointly commissioned two independent appraisals of the Aircraft. After averaging the two appraisal values (which had a difference of less than one percent) the
parties agreed to reduce such average value by an amount equal to the estimated broker fee and engine maintenance insurance cost that Mr. Rales would likely
incur if he were to sell the Aircraft to another party, yielding a purchase price of $13.5 million. In accordance with Danaher’s Related Person Transactions
Policy, Danaher’s Nominating and Governance Committee reviewed the process by which the proposed purchase terms, including the proposed purchase
price, were developed; reviewed the proposed purchase terms, including the proposed purchase price; considered the advantages to Danaher of acquiring the
Aircraft as compared to another, comparable used aircraft; and approved Danaher’s purchase of the Aircraft upon the proposed terms. Subsequent to the
approval of the Nominating and Governance Committee, on February 23, 2012, Danaher entered into an agreement with Mr. Rales and Joust Group L.L.C. (an
entity owned by Mr. Rales) (the agreement is included as Exhibit 10.28 to this Annual Report on Form 10-K and is incorporated herein by reference), whereby
Danaher acquired from Mr. Rales and Joust Group L.L.C. all of the outstanding interests in Joust Capital LLC, of which the only asset is the Aircraft, for a
purchase price of $13.5 million.
Execution of 10b5-1 Plan
H. Lawrence Culp, Jr., Danaher’s President and Chief Executive Officer, and limited liability companies of which Mr. Culp and entities controlled by him are
the sole members (the “LLCs”) and which hold certain of Mr. Culp’s outstanding stock options, entered into a pre-arranged stock trading plan on
February 17, 2012 in accordance with Rule 10b5-1 under the Securities and Exchange Act of 1934 and Danaher’s policy with respect to the adoption of 10b5-
1 plans. The plans are intended to allow Mr. Culp and the LLCs to spread stock trades relating to expiring options and vesting restricted stock units (“RSUs”)
over an extended period of time on pre-arranged dates.
Under the plan, Mr. Culp and the LLCs may sell in the open market at prevailing prices on specified dates (subject to minimum price thresholds set forth in
the plan) up to (1) 1,159,452 shares to be acquired upon exercise of stock options that were granted to Mr. Culp in 2003 and are scheduled to expire in March
2013, and (2) the shares he will receive (net of shares withheld for taxes) in connection with the vesting of 676,000 RSUs that are scheduled to vest in 2012.
Any sales will be made during the period from April 2012 until the plans terminate in February 2013. The transactions under the plans will be disclosed
publicly through Form 144 and Form 4 filings with the Securities and Exchange Commission.
Certain other officers and directors of Danaher may from time to time enter into trading plans established in accordance with Rule 10b5-1. Except to the extent
required by law, Danaher does not undertake to report Rule 10b5-1 plans that may be adopted by any officers or directors in the future or to report any
modifications or terminations of any publicly announced trading plan.
Amendment to By-Laws
On February 23, 2012, the Board of Directors amended Danaher’s Amended and Restated By-Laws to eliminate the exclusive forum provision in Article X of
the Amended and Restated By-Laws, which had provided that unless otherwise consented to by Danaher, the Court of Chancery of the State of Delaware
would be the sole and exclusive forum for derivative claims brought on behalf of Danaher, breach of fiduciary duty claims against Danaher’s directors,
officers or other employees, other claims arising pursuant to any provision of Delaware’s General Corporation Law (DGCL) and any claim governed by the
internal affairs doctrine. The foregoing summary is qualified in its entirety by reference to Danaher’s Amended and Restated By-Laws, a copy of which is
included as Exhibit 3.2 to this Annual Report on Form 10-K and is incorporated herein by reference.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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