8-KMaterial AgreementsExhibits & Filings

DANAHER CORP /DE/ 8-K Report, Material Agreement (Feb 20, 2007)

Filed February 20, 2007For Securities:DHR

Summary

Danaher Corporation, through its indirect wholly-owned subsidiary FJ900, Inc., has entered into new airplane management and interchange agreements with Joust Capital, LLC and Joust Capital II, LLC. These agreements, effective February 15, 2007, formalize and expand existing arrangements with these entities, which are owned by Steven M. Rales and Mitchell P. Rales, Danaher's Executive Chairman and Executive Chairman of the Executive Committee, respectively. The core of these agreements is to allow Danaher's subsidiary FJ900 to manage aircraft owned by the Joust entities, mirroring the services provided for Danaher's own aircraft. This is intended to create cost efficiencies by allowing shared use of fixed expenses, joint purchasing, and scale economies. Additionally, an interchange agreement allows for the mutual leasing of aircraft between Danaher and the Joust entities on an equal time basis, without charge, aiming for balanced usage over the contract term. The structure emphasizes limited recourse for losses to insurance proceeds and includes specific indemnification clauses.

Key Highlights

  • 1Danaher's subsidiary FJ900, Inc. entered into airplane management agreements with Joust One and Joust Two, entities owned by Danaher's executive leadership.
  • 2These agreements aim to generate cost savings through shared management and operational expenses for aircraft.
  • 3An interchange agreement allows for mutual, non-compensated leasing of aircraft between Danaher and the Joust entities on an equal-time basis.
  • 4The agreements are for a term of five years, with options for termination.
  • 5Each party is responsible for maintaining specific insurance levels, and recourse for losses is generally limited to insurance proceeds.
  • 6The arrangements are designed to create efficiencies of scale and cost savings for all parties involved.
  • 7These agreements formalize and expand existing arrangements between Danaher and the Rales-affiliated Joust entities.

Frequently Asked Questions

The primary purpose is to centralize aircraft management through Danaher's subsidiary FJ900, Inc. for aircraft owned by entities affiliated with Danaher's executive leadership. This is intended to achieve cost efficiencies by sharing fixed expenses, enabling joint purchasing, and leveraging economies of scale for aircraft operations and maintenance.

Under the management agreements, FJ900 provides services at no direct compensation. Shared expenses are prorated among Danaher and the Joust entities based on flight hours, with Joust entities pre-paying estimated costs quarterly and subsequent true-ups. The interchange agreements involve no direct charges for aircraft use, as the intent is equal usage over the contract term.

Both parties are required to maintain specific levels of comprehensive aviation liability insurance and all-risk hull insurance, naming each other as additional insureds. In case of losses, the sole recourse against the other party is generally limited to available insurance proceeds. There are also provisions for indemnification in specific circumstances related to aircraft use.

The agreements are between Danaher Corporation (through its subsidiary FJ900, Inc.) and Joust Capital, LLC ('Joust One') and Joust Capital II, LLC ('Joust Two'). Joust One and Joust Two are owned by Steven M. Rales and Mitchell P. Rales, who are Danaher's Executive Chairman and Executive Chairman of the Executive Committee, respectively. These agreements formalize and expand existing arrangements.