TREX MEDICAL CORP, DEF 14A, 1997-02-18

TREX MEDICAL CORP
DEF 14A, 1997-02-18
X-RAY APPARATUS & TUBES & RELATED IRRADIATION APPARATUS

Previous: DUKE REALTY LIMITED PARTNERSHIP, SC 13G, 1997-02-18

Next: ATLANTIC INTERNATIONAL ENTERTAINMENT LTD, 8-K/A, 1997-02-18

<PAGE>

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

TREX MEDICAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No Fee Required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies: ________

(2) Aggregate number of securities to which transaction applies: ___________

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): _____________

(4) Proposed maximum aggregate value of transaction: _______________________

(5) Total fee paid:

[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: ________________________________________________

(2) Form, Schedule or Registration Statement No.: __________________________

(3) Filing Party: __________________________________________________________

(4) Date Filed: ____________________________________________________________

<PAGE>

36 APPLE RIDGE ROAD, DANBURY, CONNECTICUT 06810

February 14, 1997

Dear Stockholder:

The enclosed Notice calls the 1997 Annual Meeting of the Stockholders of
Trex Medical Corporation. I respectfully request all Stockholders attend this
Meeting, if possible.

Our Annual Report for the fiscal year ended September 28, 1996, is
enclosed. I hope you will read it carefully. Feel free to forward any questions
you may have if you are unable to be present at the Meeting.

Enclosed with this letter is a Proxy authorizing three officers of the
Corporation to vote your shares for you if you do not attend the Meeting.
Whether or not you are able to attend the Meeting, I urge you to complete your
Proxy and return it to our transfer agent, American Stock Transfer and Trust
Company, in the enclosed addressed, postage-paid envelope, as a quorum of the
Stockholders must be present at the Meeting, either in person or by Proxy.

I would appreciate your immediate attention to the mailing of this Proxy.

Yours very truly,

HAL KIRSHNER
President and Chief Executive Officer
<PAGE>

36 APPLE RIDGE ROAD, DANBURY, CONNECTICUT 06810

February 14, 1997

To the Holders of the Common Stock of
TREX MEDICAL CORPORATION

NOTICE OF ANNUAL MEETING

The 1997 Annual Meeting of the Stockholders of Trex Medical Corporation
(the "Corporation") will be held on Wednesday, March 12, 1997 at 10:30 a.m. at
the Westin Hotel, 70 Third Avenue, Waltham, Massachusetts 02154. The purpose of
the Meeting is to consider and take action upon the following matters:

1. Election of ten Directors.

2. A proposal recommended by the Board of Directors to adopt an
employees' stock purchase plan and to reserve 100,000 shares of the
Corporation's Common Stock for issuance thereunder.

3. Such other business as may properly be brought before the Meeting and
any adjournment thereof.

The transfer books of the Corporation will not be closed prior to the
Meeting, but, pursuant to appropriate action by the Board of Directors, the
record date for the determination of the Stockholders entitled to notice of and
vote at the Meeting is January 30, 1997.

The By-laws require that the holders of a majority of the stock issued and
outstanding and entitled to vote be present or represented by Proxy at the
Meeting in order to constitute a quorum for the transaction of business. It is
important that your stock be represented at the Meeting regardless of the number
of shares you may hold. Whether or not you are able to be present in person,
please sign and return promptly the enclosed Proxy in the accompanying envelope,
which requires no postage if mailed in the United States.

This Notice, the Proxy and Proxy Statement enclosed herewith are sent to
you by order of the Board of Directors.

SANDRA L. LAMBERT

Secretary
<PAGE>

PROXY STATEMENT

The enclosed Proxy is solicited by the Board of Directors of Trex Medical
Corporation (the "Corporation") for use at the 1997 Annual Meeting of the
Stockholders (the "Meeting") to be held on Wednesday, March 12, 1997 at 10:30
a.m. at the Westin Hotel, 70 Third Avenue, Waltham, Massachusetts 02154, and any
adjournment thereof. The mailing address of the executive office of the
Corporation is 36 Apple Ridge Road, Danbury, Connecticut 06810. This Proxy
Statement and the enclosed Proxy were first furnished to Stockholders of the
Corporation on or about February 18, 1997.

VOTING PROCEDURES

The Board of Directors intends to present to the Meeting the election of
ten Directors, constituting the entire Board of Directors as well as one other
matter: a proposal to adopt an employees' stock purchase plan and to reserve
100,000 shares of the Corporation's Common Stock for issuance thereunder.

The representation in person or by proxy of a majority of the outstanding
shares of common stock of the Corporation, $.01 par value ("Common Stock"),
entitled to vote at the Meeting is necessary to provide a quorum for the
transaction of business at the Meeting. Shares can only be voted if the
Stockholder is present in person or is represented by returning a properly
signed proxy. Each Stockholder's vote is very important. Whether or not you
plan to attend the Meeting in person, please sign and promptly return the
enclosed proxy card, which requires no postage if mailed in the United States.
All signed and returned proxies will be counted towards establishing a quorum
for the Meeting, regardless of how the shares are voted.

Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on the
proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted for the management nominees for Directors,
for the management proposal, and as the individuals named as proxy holders on
the proxy deem advisable on all other matters as may properly come before the
Meeting.

In order to be elected a Director, a nominee must receive the affirmative
vote of a majority of the shares of Common Stock present and entitled to vote on
the election. For the management proposal to adopt an employees' stock purchase
plan, the affirmative vote of a majority of shares present in person or
represented by proxy, and entitled to vote on the matter, is necessary for
approval. Withholding authority to vote for a nominee for Director or an
instruction to abstain from voting on a proposal will be treated as shares
present and entitled to vote and, for purposes of determining the outcome of the
vote, will have the same effect as a vote against the nominee or a proposal.
With respect to the election of Directors and the adoption of the employees'
stock purchase plan, broker "non-votes" will not be treated as shares present
and entitled to vote on a voting matter and will have no effect on the outcome
of the vote. A broker "non-vote" occurs when a nominee holding shares for a
beneficial holder does not have discretionary voting power and does not receive
voting instructions from the beneficial owner.

A Stockholder who returns a proxy may revoke it at any time before the
Stockholder's shares are voted at the Meeting by written notice to the Secretary
of the Corporation received prior to the Meeting, by executing and returning a
later-dated proxy or by voting by ballot at the Meeting.

The outstanding stock of the Corporation entitled to vote (excluding shares
held in treasury by the Corporation) as of January 30, 1997, consisted of
28,892,630 shares of Common Stock. Only Stockholders of record at the close of
business on January 30, 1997, are entitled to vote at the Meeting. Each share
is entitled to one vote.

1
<PAGE>

--PROPOSAL 1--

ELECTION OF DIRECTORS

Ten Directors are to be elected at the Meeting, each to hold office until
his successor is chosen and qualified or until his earlier resignation, death or
removal.

NOMINEES FOR DIRECTORS

Set forth below are the names of the persons nominated as Directors, their
ages, their offices in the Corporation, if any, their principal occupation or
employment for the past five years, the length of their tenure as Directors and
the names of other public companies in which such persons hold directorships.
Information regarding their beneficial ownership of the Corporation's Common
Stock and of the common stock of its parent corporation, Thermo Electron, is
reported under the caption "Stock Ownership." All of the nominees are currently
Directors of the Corporation.

- --------------------------------------------------------------------------------
ELIAS P. GYFTOPOULOS Dr. Gyftopoulos, 69, has been a Director of the
Corporation since November 1995. Dr. Gyftopoulos is
Professor Emeritus of the Massachusetts Institute of
Technology, where he was the Ford Professor of
Mechanical Engineering and of Nuclear Engineering for
more than 20 years. Dr. Gyftopoulos is also a director
of Thermo BioAnalysis Corporation, Thermo Cardiosystems
Inc., Thermo Electron, ThermoLase Corporation, Thermo
Remediation Inc., ThermoSpectra Corporation and Thermo
Voltek Corp.
- --------------------------------------------------------------------------------
ROBERT C. HOWARD Mr. Howard, 66, has been a Director of the Corporation
since its inception in October 1995. Mr. Howard also
served as the Corporation's Chairman of the Board from
1988 to February 1996. Mr. Howard served as an
Executive Vice President of Thermo Electron from 1986
until his retirement in January 1997. He is also a
Director of Thermedics Inc., Thermo Cardiosystems Inc.,
ThermoLase Corporation, Thermo Power Corporation and
ThermoTrex Corporation.
- --------------------------------------------------------------------------------
HAL KIRSHNER Mr. Kirshner, 55, has been Chief Executive Officer,
President and a Director of the Corporation since its
inception in October 1995. Mr. Kirshner has been
President of the LORAD division of the Corporation
since February 1991.
- --------------------------------------------------------------------------------
EARL R. LEWIS Mr. Lewis, 53, has been a Director of the Corporation
since its inception in October 1995. Mr. Lewis has been
a Vice President of Thermo Electron since September
1996 and Executive Vice President and Chief Operating
Officer of Thermo Instrument Systems Inc., a majority
owned subsidiary of Thermo Electron that develops,
manufactures and markets analytical instruments, since
December 1995 and served as a Vice President of that
company from 1990 to 1995. He has also served as Chief
Executive Officer, President and a Director of Thermo
Optek Corporation, a majority owned subsidiary of
Thermo Instrument Systems Inc., since August 1995, and
President of Thermo Jarrell Ash Corporation, a
subsidiary of Thermo Optek Corporation, for more than
five years. Mr. Lewis is also a Director of
ThermoSpectra Corporation.
- --------------------------------------------------------------------------------
JAMES W. MAY JR. Dr. May, 53, has been a Director of the Corporation
since February 1996. He has been Professor of Surgery
at Harvard Medical School since 1994 and was Associate
Clinical Professor of Surgery for more than five years
prior to that time.
- --------------------------------------------------------------------------------

2
<PAGE>

- --------------------------------------------------------------------------------
HUTHAM S. OLAYAN Ms. Olayan, 42, has been a Director of the Corporation
since February 1996. She has served as President and a
director of Olayan America Corporation since 1995 and
Competrol Real Estate Limited since 1986, which are
members of the Olayan Group engaged in advisory
services and private real estate investments,
respectively. In addition, Ms. Olayan served as
President and a director of Crescent Diversified
Limited, another member of the Olayan Group engaged in
private investments, from 1985 until 1994. Ms. Olayan
is also a Director of Thermo Electron.
- --------------------------------------------------------------------------------
ANTHONY J. PELLEGRINO Mr. Pellegrino, 56, has been a Director of the
Corporation since its inception in October 1995. Mr.
Pellegrino has been a Senior Vice President of
ThermoTrex Corporation since July 1995 and was chairman
of LORAD Corporation, a manufacturer of mammography
equipment that was acquired by ThermoTrex in November
1992, for more than five years prior to that time. Mr.
Pellegrino is also a director of ThermoLase Corporation
and ThermoQuest Corporation.
- --------------------------------------------------------------------------------
FIROOZ RUFEH Mr. Rufeh, 59, has been a Director of the Corporation
since its inception in October 1995. Mr. Rufeh served
as the Chief Executive Officer of ThermoTrex from 1988
to February 1996, and as the President of ThermoTrex
from 1988 to February 1997. Mr. Rufeh also served as a
Vice President of Thermo Electron from 1986 until
February 1997. Beginning February 15, 1997, Mr. Rufeh
will be a consultant to Thermo Electron. Mr. Rufeh is
also a director of ThermoLase Corporation and
ThermoTrex Corporation.
- --------------------------------------------------------------------------------
KENNETH Y. TANG Dr. Tang, 49, has been a Director of the Corporation
since June 1995. Dr. Tang has been Senior Vice
President of ThermoTrex Corporation for more than five
years. He is also a director of ThermoLase Corporation.
- --------------------------------------------------------------------------------
GARY S. WEINSTEIN Mr. Weinstein, 39, has been a Director of the
Corporation and its Chairman of the Board since
February 1996. He has also served as Chief Executive
Officer of ThermoTrex and as a Vice President of Thermo
Electron since February 1996. Mr. Weinstein was a
Managing Director of Lehman Brothers Inc. from 1992
until February 1996, serving from March 1995 until
leaving the firm as Managing Director, head of Global
Syndicate and Equity Capital Markets. Mr. Weinstein
joined Lehman Brothers in 1988 and served in various
positions, including head of Equities in Europe, head
of Equity New Issues in North and South America and
head of Global Convertible Securities. Mr. Weinstein is
also a director of ThermoLase Corporation and
ThermoTrex Corporation.
- --------------------------------------------------------------------------------

COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS

The Board of Directors has established an Audit Committee and a Human
Resources Committee, each consisting solely of outside Directors. The present
members of the Audit Committee are Ms. Olayan (Chairman), Dr. Gyftopoulos and
Dr. May. The Audit Committee reviews the scope of the audit with the
Corporation's independent public accountants and meets with them for the purpose
of reviewing the results of the audit subsequent to its completion. The present
members of the Human Resources Committee are Dr. Gyftopoulos (Chairman), Dr.
May and Ms. Olayan. The Human Resources Committee reviews the performance of
senior members of management, recommends executive compensation and administers
the Corporation's stock-based compensation plans. The Corporation does not have
a nominating committee of the Board of Directors. The Board of Directors met
five times, the Audit Committee met once and the Human Resources Committee met
four times during fiscal 1996. Each Director attended at least 75% of all
meetings of the Board of Directors and Committees on which he or she served held
during fiscal 1996, except Dr. May who attended 60% of such meetings.

3
<PAGE>

COMPENSATION OF DIRECTORS

CASH COMPENSATION

Directors who are not employees of the Corporation, of Thermo Electron or
of any other companies affiliated with Thermo Electron (also referred to as
"outside Directors") receive an annual retainer of $2,000 and a fee of $1,000
per day for attending regular meetings of the Board of Directors and $500 per
day for participating in meetings of the Board of Directors held by means of
conference telephone and for participating in certain meetings of committees of
the Board of Directors. Payment of outside Directors' fees is made quarterly.
Mr. Lewis, Mr. Pellegrino, Dr. Tang and Mr. Weinstein are all employees of
Thermo Electron and do not receive any cash compensation from the Corporation
for their services as Directors. Directors are also reimbursed for out-of-
pocket expenses incurred in attending meetings.

DEFERRED COMPENSATION PLAN FOR DIRECTORS

Under the Deferred Compensation Plan for Directors (the "Deferred
Compensation Plan"), a Director has the right to defer receipt of his cash fees
until he ceases to serve as a Director, dies or retires from his principal
occupation. In the event of a change in control or proposed change in control of
the Corporation that is not approved by the Board of Directors, deferred amounts
become payable immediately. Either of the following is deemed to be a change of
control: (a) the occurrence, without the prior approval of the Board of
Directors, of the acquisition, directly or indirectly, by any person of 50% or
more of the outstanding Common Stock or the outstanding common stock of
ThermoTrex or 25% or more of the outstanding common stock of Thermo Electron; or
(b) the failure of the persons serving on the Board of Directors immediately
prior to any contested election of directors or any exchange offer or tender
offer for the Common Stock or the common stock of ThermoTrex or Thermo Electron
to constitute a majority of the Board of Directors at any time within two years
following any such event. Amounts deferred pursuant to the Deferred
Compensation Plan are valued at the end of each quarter as units of Common
Stock. When payable, amounts deferred may be disbursed solely in shares of
Common Stock accumulated under the Deferred Compensation Plan. A total of
25,000 shares of Common Stock have been reserved for issuance under the Deferred
Compensation Plan. As of December 28, 1996, deferred units equal to 198.73
shares of Common Stock were accumulated under the Deferred Compensation Plan.

DIRECTORS STOCK OPTION PLAN

The Corporation has adopted a directors stock option plan (the "Directors
Plan"), providing for the grant of stock options to purchase shares of Common
Stock to outside Directors as additional compensation for their service as
Directors. The plan provides for the grant of stock options upon a Director's
initial appointment and, beginning in 2000, awards to purchase 1,000 shares
annually to Directors.

Under the Plan, each eligible Director and each new outside Director
initially joining the Board of Directors in 1996 was granted an option to
purchase 40,000 shares of Common Stock upon the later of the adoption of the
plan or the Director's appointment or election. The size of the award to new
Directors appointed to the Board of Directors after 1996 is reduced by 10,000
shares in each subsequent year. Directors initially joining the Board of
Directors after 1999 would not receive an option grant upon their appointment or
election to the Board of Directors, but would be eligible to participate in the
annual option awards described below. Options evidencing initial grants to
Directors are presently exercisable, however, the shares acquired upon exercise
are subject to restrictions on transfer and the right of the Corporation to
repurchase such shares at the exercise price in the event the Director ceases to
serve as a Director of the Corporation or another Thermo Electron company. In
such event, the restrictions and repurchase rights shall lapse or be deemed to
have lapsed in annual installments of 10,000 shares per year, starting with the
first anniversary of the date of grant, provided the Director has continuously
served as a Director of the Corporation, Thermo Electron or any subsidiary of
Thermo Electron since the grant date. These options expire on the fifth
anniversary of the grant date, unless the Director dies, ceases to be an
eligible Director or otherwise ceases to serve as a Director of the Corporation,
Thermo Electron or any subsidiary of Thermo Electron prior to that date.

Commencing in 2000, eligible Directors will also receive an annual grant of
options to purchase 1,000 shares of Common Stock, provided the Common Stock is
then publicly traded. The annual grant would be made at

4
<PAGE>

the close of business on the date of each annual meeting of shareholders of the
Corporation to each outside Director then holding office, commencing with the
annual meeting to be held in 2000. Options evidencing annual grants may be
exercised at any time from and after the six-month anniversary of the date of
grant and prior to the expiration of the option on the third anniversary of the
date of grant. Shares acquired upon exercise of the options would be subject to
repurchase by the Corporation at the exercise price if the recipient ceased to
serve as a Director of the Corporation or any other Thermo Electron company
prior to the first anniversary of the date of grant for any reason other than
death.

The exercise price for options granted under the Plan is determined by the
average of the closing prices reported by the American Stock Exchange (or such
other principal exchange on which the Common Stock is then traded) for the five
trading day immediately preceding and including the date the option is granted
or, if the shares underlying the option were not so traded, at the last price
paid per share by independent investors in an arms' length transaction with the
Corporation prior to the date of grant.

Grants of stock options to outside Directors have consisted of 40,000
shares granted in November 1995 at an exercise price of $10.25 per share and
80,000 shares granted in February 1996 at an exercise price of $10.75 per share.
An aggregate of 200,000 shares of Common Stock has been reserved for issuance
under the Directors Plan.

STOCK OWNERSHIP POLICIES FOR DIRECTORS

During fiscal 1996, the Human Resources Committee of the Board of Directors
(the "Committee") established a stock holding policy for Directors. The stock
holding policy requires each Director to hold a minimum of 1,000 shares of
Common Stock. Directors are requested to achieve this ownership level by the
1998 Annual Meeting of Stockholders. Directors who are also executive officers
of the Corporation are required to comply with a separate stock holding policy
established by the Committee in fiscal 1996, which is described in the Committee
Report on Executive Compensation - Stock Ownership Policies.

In addition, the Committee adopted a policy requiring Directors to hold a
certain number of shares of the Corporation's Common mon Stock acquired upon the
exercise of stock options. Under this policy, Directors are required to hold
shares of Common Stock equal to one-half of their net option exercises over a
period of five years. The net option exercise is determined by calculating the
number of shares acquired upon exercise of a stock option, after deducting the
number of shares that could have been traded to exercise the option and the
number of shares that could have been surrendered to satisfy tax withholding
obligations attributable to the exercise of the option. This policy is also
applicable to executive officers and is described in the Committee Report on
Executive Compensation - Stock Ownership Policies.

STOCK OWNERSHIP

The following table sets forth the beneficial ownership of Common Stock, as
well as the common stock of Thermo Electron and ThermoTrex Corporation
("ThermoTrex") as of December 28, 1996, with respect to (i) each person who was
known by the Corporation to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each Director and nominee for Director, (iii) each
executive officer named in the summary compensation table under the heading
"Executive Compensation" and (iv) all Directors and executive officers as a
group.

While certain Directors and executive officers of the Corporation are also
Directors and executive officers of ThermoTrex or its subsidiaries other than
the Corporation, all such persons disclaim beneficial ownership of the shares of
Common Stock owned by ThermoTrex.

5
<PAGE>

<TABLE>
<CAPTION>
TREX MEDICAL THERMOTREX THERMO ELECTRON
NAME (1) CORPORATION (2) CORPORATION (3) CORPORATION (4)
-------- --------------- --------------- ---------------
<S> <C> <C> <C>
ThermoTrex Corporation (5)................. 22,883,798 N/A N/A
Elias P. Gyftopoulos....................... 40,000 4,500 71,700
Robert C. Howard........................... 43,174 35,554 194,493
Hal Kirshner............................... 285,000 93,321 117,824
Earl R. Lewis.............................. 40,500 420 131,914
James W. May Jr............................ 40,000 0 0
Hutham S. Olayan........................... 45,198 4,500 23,995
Anthony J. Pellegrino...................... 147,513 807,021 115,875
Firooz Rufeh............................... 93,600 100,541 133,286
Kenneth Y. Tang............................ 48,706 79,516 26,033
Gary S. Weinstein.......................... 315,000 110,000 160,412
All Directors and current executive
officers as a group (14 persons).......... 1,202,890 1,291,011 1,682,349
</TABLE>

(1) Except as reflected in the footnotes to this table, shares of Common Stock
of the Corporation and of the common stock of Thermo Electron and
ThermoTrex beneficially owned consist of shares owned by the indicated
person, and all share ownership includes sole voting and investment power.

(2) Shares of the Common Stock beneficially owned by each Director and
executive officer and by all Directors and executive officers as a group
exclude 22,883,798 shares beneficially owned by ThermoTrex, as to which
shares each Director and executive officer and all members of such group
disclaim beneficial ownership. Shares of the Common Stock beneficially
owned by Dr. Gyftopoulos, Mr. Howard, Mr. Kirshner, Mr. Lewis, Dr. May, Ms.
Olayan, Mr. Pellegrino, Mr. Rufeh, Dr. Tang, Mr. Weinstein and all
Directors and executive officers as a group include 40,000, 40,000,
150,000, 40,000, 40,000, 40,000, 40,000, 40,000, 40,000, 300,000 and
851,000 shares, respectively, that such person or group has the right to
acquire within 60 days of December 28, 1996 through the exercise of stock
options. Shares beneficially owned by Ms. Olayan and all Directors and
executive officers as a group include 198 full shares, respectively, that
had been allocated through December 28, 1996, to Ms. Olayan's account
maintained under the Corporation's Deferred Compensation Plan for
Directors. Shares beneficially owned by Mr. Pellegrino include 1,041 held
in a trust of which Mr. Pellegrino's spouse is the trustee for the benefit
of Mr. Pellegrino's minor child. Shares beneficially owned by Mr. Rufeh
include 53,600 shares held by the Rufeh Family Trust of which Mr. Rufeh is
the trustee. Shares beneficially owned by Ms. Olayan do not include
228,500 shares owned by Crescent International Holdings Ltd. or 15,000
shares owned by Crescent Growth Fund Ltd., each a member of the Olayan
Group. Crescent International Holdings Ltd. and Crescent Growth Fund Ltd.
are indirectly controlled by Suliman S. Olayan, Ms. Olayan's father. Ms.
Olayan disclaims beneficial ownership of the shares owned by Crescent
International Holdings Ltd. and Crescent Growth Fund Ltd. As of December
28, 1996, no Director or executive officer beneficially owned more than
1.0% of the Common Stock outstanding as of December 28, 1996, other than
Mr. Weinstein, who beneficially owned approximately 1.07% of the Common
Stock; all Directors and executive officers as a group beneficially owned
4.04% of the Common Stock outstanding as of such date.

(3) Shares of the common stock of ThermoTrex beneficially owned by Dr.
Gyftopoulos, Mr. Howard, Mr. Kirshner, Ms. Olayan, Mr. Pellegrino, Mr.
Rufeh, Dr. Tang, Mr. Weinstein and all Directors and executive officers
as a group include 4,500, 31,320, 73,000, 4,500, 134,500, 66,000, 63,318,
100,000 and 527,538 shares, respectively, that such person or group has the
right to acquire within 60 days of December 28, 1996 through the exercise
of stock options. Shares beneficially owned by Mr. Pellegrino include
10,408 shares held in a trust of which Mr. Pellegrino's spouse is the
trustee for the benefit of Mr. Pellegrino's minor child. Shares
beneficially owned by Dr. Tang include 2,025 shares held by Dr. Tang's

6
<PAGE>

daughter. As of December 28, 1996, no Director or executive officer
beneficially owned more than 1.0% of the Common Stock outstanding as of
December 28, 1996, other than Mr. Pellegrino, who beneficially owned
approximately 4.1% of the Common Stock; all Directors and executive
officers as a group beneficially owned 6.5% of the Common Stock outstanding
as of such date.

(4) The shares of common stock of Thermo Electron shown in the table reflect a
three-for-two split of such stock distributed in June 1996 in the form of a
50% stock dividend. Shares of the common stock of Thermo Electron
beneficially owned by Dr. Gyftopoulos, Mr. Howard, Mr. Kirshner, Mr. Lewis,
Ms. Olayan, Mr. Pellegrino, Mr. Rufeh, Dr. Tang, Mr. Weinstein and all
Directors and executive officers as a group include 9,375, 47,361, 116,025,
126,937, 9,375, 115,875, 90,560, 23,850, 160,075 and 1,231,192 shares,
respectively, that such person or group has the right to acquire within 60
days of December 28, 1996 through the exercise of stock options. Shares
beneficially owned by Mr. Howard and all Directors and executive officers
as a group include 3,040 and 6,298 full shares, respectively, allocated to
their respective accounts maintained pursuant to Thermo Electron's employee
stock ownership plan, of which the trustees, who have investment power over
its assets, were, as of December 28, 1996, executive officers of Thermo
Electron. Shares beneficially owned by Ms. Olayan and all Directors and
executive officers as a group include 14,620 full shares, allocated through
December 28, 1996 to Ms. Olayan's account maintained pursuant to Thermo
Electron's deferred compensation plan for directors. Shares beneficially
owned by Ms. Olayan do not include 4,400,000 shares owned by Crescent
Holding GmbH, a member of the Olayan Group. Crescent Holding GmbH is
indirectly controlled by Suliman S. Olayan, Ms. Olayan's father. Ms.
Olayan disclaims beneficial ownership of the shares owned by Crescent
Holding GmbH. As of December 28, 1996, no Director or executive officer
beneficially owned more than 1% of the outstanding Thermo Electron common
stock; all directors and executive officers as a group beneficially owned
approximately 1.1% of the Thermo Electron common stock outstanding as of
December 28, 1996.

(5) ThermoTrex beneficially owned 79.2% of the Common Stock outstanding as of
December 28, 1996. ThermoTrex's address is 10455 Pacific Center Court, San
Diego, California 92121. As of December 28, 1996, ThermoTrex had the
power to elect all of the members of the Corporation's Board of Directors.
ThermoTrex is a majority owned subsidiary of Thermo Electron and,
therefore, Thermo Electron may be deemed a beneficial owner of the shares
of Common Stock owned by ThermoTrex. Thermo Electron disclaims beneficial
ownership of these shares.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and executive officers, and beneficial owners of more
than 10% of the Common Stock, such as Thermo Electron, to file with the
Securities and Exchange commission initial reports of ownership and periodic
reports of changes in ownership of the Corporation's securities. Based upon a
review of such filings, all Section 16(a) filing requirements applicable to such
persons were complied with during fiscal 1996, except in the following
instances. The following Directors of the Corporation each had one late Form 4,
reporting one transaction each: Mr. Hal Kirshner, Mr. Earl R. Lewis, Ms. Hutham
S. Olayan, Mr. Firooz Rufeh, Dr. Kenneth Y. Tang and Mr. Gary S. Weinstein. In
addition, ThermoTrex Corporation and Thermo Electron Corporation, the parent
companies of the Corporation, each had two late Forms 4, reporting two
transactions.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table summarizes compensation for services to the Corporation
in all capacities awarded to, earned by or paid to the Corporation's chief
executive officer (the "named executive officers") for the last full fiscal
year from October 1, 1995 to September 28, 1996 ("fiscal 1996"), for the nine-
month period from January 1, 1995 to September 30, 1995 ("fiscal 1995"),
reflecting a change in the Corporation's fiscal year-end to the 52 or 53 week
period ending on the Saturday closest to September 30, and for the preceding
full fiscal year from January 2, 1994 to December 31, 1994 ("fiscal 1994"). No
other executive officer of the Corporation met the definition of "highly

7
<PAGE>

compensated" within the meaning of the Securities and Exchange Commission's
executive compensation disclosure rules during these periods.

The Corporation is required to appoint certain executive officers and full-
time employees of Thermo Electron as executive officers of the Corporation, in
accordance with the Thermo Electron Corporate Charter. The compensation for
these executive officers is determined and paid entirely by Thermo Electron.
The time and effort devoted by these individuals to the Corporation's affairs is
provided to the Corporation under the Corporate Services Agreement between the
Corporation and Thermo Electron. Accordingly, the compensation for these
individuals is not reported in the following table.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------

LONG TERM
COMPENSATION
------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION OPTIONS (NO. OF
FISCAL ------------------- SHARES AND ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPANY) (3) COMPENSATION (4)
- --------------------------- ---- ----- ----- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Hal Kirshner (5)........... 1996 $192,500 $200,000 (2) 150,000 (TXM) $9,958 (5)
Chief Executive Officer 150 (TMO)
and President 2,000 (TBA)
2,000 (TFG)
2,000 (TLT)
6,000 (TOC)
6,000 (TMQ)
2,000 (TSR)
1995 $150,000 (1) $200,000 -- $7,005
1994 $200,000 $180,000 22,500 (TMO) $6,750
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Annual compensation for executive officers is reviewed and determined on a
calendar year basis, even though the Corporation's fiscal year ends in
September. The Corporation changed its fiscal year-end to September from
December in 1995, and as a consequence, the salary data for fiscal 1995
reflects salary paid during the nine-month period from January 1, 1995 to
September 30, 1995. Salary data for subsequent fiscal years represents
salary paid during the Corporation's full fiscal year.

(2) The bonus amount presented for fiscal 1995 represents the bonus paid for
performance during calendar 1995. Bonuses have not yet been determined for
calendar 1996; therefore, the bonus amounts shown for fiscal 1996 are
estimates.

(3) In addition to receiving options to purchase Common Stock (designated in
the table as TXM), Mr. Kirshner was granted options to purchase shares of
the common stock of Thermo Electron and certain of its other subsidiaries
as part of Thermo Electron's stock option program. Options have been
granted during the period covered by the table to Mr. Kirshner in the
following Thermo Electron companies: Thermo Electron (designated in the
table as TMO), Thermo BioAnalysis Corporation (designated in the table as
TBA), Thermo Fibergen Inc. (designated in the table as TFG), ThermoLyte
Corporation (designated in the table as TLT), Thermo Optek Corporation
(designated in the table as TOC), ThermoQuest Corporation (designated in
the table as TMQ) and Thermo Sentron Inc. (designated in the table as TSR).
Information with respect to options to purchase the common stock of Thermo
Electron reflect a three-for-two split distributed in June 1996 in the form
of a 50% stock dividend.

8
<PAGE>

(4) Represents the amount of matching contributions made by the individual's
employer on behalf of executive officers participating in the Thermo
Electron 401(k) plan.

(5) In addition to the matching contribution referred to in footnote (4), such
amount includes $4,614, representing the market value of 115 shares of
Thermo Electron common stock received by Mr. Kirshner in May 1996 at Thermo
Electron's Annual Management Conference in recognition of his managerial
achievements.

STOCK OPTIONS GRANTED DURING FISCAL 1996

The following table sets forth information concerning individual grants of
stock options by the Corporation and other Thermo Electron companies made during
fiscal 1996 to the named executive officers. It has not been the Corporation's
policy in the past to grant stock appreciation rights, and no such rights were
granted during fiscal 1996.

OPTION GRANTS IN FISCAL 1996

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------

POTENTIAL REALIZABLE VALUE AT
PERCENT OF ASSUMED ANNUAL RATES OF
TOTAL OPTIONS STOCK PRICE APPRECIATION FOR
NUMBER OF SECURITIES GRANTED TO EXERCISE OPTION TERM
UNDERLYING OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -----------
NAME GRANTED (1) FISCAL YEAR SHARE DATE 5% 10%
---- ------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Hal Kirshner...... 150,000 (TXM) 16.9% $11.00 3/26/08 $1,312,500 $3,528,000
150 (TMO) 0.1% (3) $42.79 5/22/99 $ 1,011 $ 2,124
2,000 (TBA) 0.2% (3) $10.00 3/11/08 $ 15,920 $ 42,760
2,000 (TFG) 0.4% (3) $10.00 9/12/08 $ 15,920 $ 42,760
2,000 (TLT) 0.6% (3) $10.00 3/11/08 $ 15,920 $ 42,760
6,000 (TOC) 0.2% (3) $12.00 4/9/08 $ 57,300 $ 153,960
6,000 (TMQ) 0.2% (3) $13.00 3/11/08 $ 62,100 $ 166,800
2,000 (TSR) 0.4% (3) $14.00 3/11/08 $ 22,280 $ 59,880
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) All of the options granted during the fiscal year are immediately
exercisable, except options to purchase shares of ThermoLyte Corporation
(designated in the table as TLT), which are not exercisable until the
earlier of (i) 90 days after the effective date of the registration of that
company's common stock under Section 12 of the Securities Exchange Act of
1934 (the "Exchange Act") and (ii) nine years after the grant date. In all
cases, the shares acquired upon exercise are subject to repurchase by the
granting corporation at the exercise price if the optionee ceases to be
employed by the Corporation or another Thermo Electron company. As to the
options to purchase shares of the Corporation granted to Mr. Kirshner, the
repurchase rights are deemed to lapse 20% per year commencing on the sixth
anniversary of the grant date. For other publicly traded companies, the
repurchase rights generally lapse ratably over a five-to ten-year period,
depending on the option term, which may vary from seven to twelve years,
provided that the optionee continues to be employed by the Corporation or
another Thermo Electron Company. For companies that are not publicly
traded, the repurchase rights lapse in their entirety on the ninth
anniversary of the grant date. Certain options granted as part of Thermo
Electron's stock option program have three year terms, and the repurchase
rights lapse in their entirety on the second anniversary of the grant date.
The granting corporation may exercise its repurchase rights within six
months after the termination of the optionee's employment. The granting
corporation may permit the holders of such options to exercise options and
to satisfy tax withholding obligations by surrendering shares equal in fair
market value to the exercise price or withholding obligation.

9
<PAGE>

(2) The amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5%
and 10%, compounded annually from the date the respective options were
granted to their expiration date. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other expenses
associated with the exercise. Actual gains, if any, on stock option
exercises will depend on the future performance of the common stock of the
granting corporation, the optionee's continued employment through the
option period and the date on which the options are exercised.

(3) These options were granted as a part of Thermo Electron's stock option
program, and accordingly are reported as a percentage of total options
granted to employees of Thermo Electron and its public subsidiaries.

STOCK OPTIONS EXERCISED DURING FISCAL 1996 AND FISCAL YEAR-END VALUES

The following table reports certain information regarding stock option
exercises during fiscal 1996 and outstanding stock options of the Thermo
Electron companies held at the end of fiscal 1996 by the named executive
officers. No stock appreciation rights were exercised or were outstanding
during fiscal 1996.

AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND FISCAL 1996 YEAR-END OPTION
VALUES

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
NO. OF UNEXERCISED
OPTIONS AT FISCAL VALUE OF
SHARES YEAR-END UNEXERCISED
ACQUIRED ON VALUE (EXERCISABLE/ IN-THE-MONEY
NAME COMPANY EXERCISE REALIZED UNEXERCISABLE) (1) OPTIONS
---- ------- -------- -------- ------------------ -------
<S> <C> <C> <C> <C> <C>
Hal Kirshner........ Trex Medical -- -- 150,000 /0 $1,387,500 /--
ThermoTrex 76,500 $2,079,270 73,000 /0 $1,809,155 /--
ThermoLase -- -- 36,400 /0 $ 787,150 /--
Thermo Electron -- -- 116,025 /0 (2) $2,953,132 /--
Thermo BioAnalysis -- -- 2,000 /0 $ 7,750 /--
Thermo Fibergen -- -- 2000 /0 $ 5,250 /--
ThermoLyte -- -- 0 /2,000 -- /$0 (3)
Thermo Optek -- -- 6,000 /0 $ 18,000 /--
ThermoQuest -- -- 6,000 /0 $ 3,000 /--
Thermo Sentron -- -- 2,000 /0 $ 0 /--
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The shares of common stock of Thermo Electron shown in the table have been
adjusted to reflect a three-for-two stock split distributed in June 1996 in
the form of a 50% stock dividend. All of the options reported outstanding
at the end of the fiscal year are immediately exercisable as of fiscal
year-end, except options to purchase shares of ThermoLyte, which are not
exercisable until the earlier of (i) 90 days after the effective date of
the registration of that Company's common stock under Section 12 of the
Exchange Act and (ii) nine years after the grant date. In all cases, the
shares acquired upon exercise of the options reported in the table are
subject to repurchase by the granting corporation at the exercise price if
the optionee ceases to be employed by such corporation or another Thermo
Electron company. The granting corporation may exercise its repurchase
rights within six months after the termination of the optionee's
employment. As to the options to purchase shares of the Corporation
granted to Mr. Kirshner, the repurchase rights are deemed to lapse 20% per
year commencing on the sixth anniversary of the grant date. For other
publicly traded companies, the repurchase rights generally lapse ratably
over a five- to ten-year period, depending on the option term, which may
vary from seven to twelve years, provided that the optionee continues to be
employed by the Corporation or another Thermo Electron company. For

10
<PAGE>

companies that are not publicly traded, the repurchase rights lapse in
their entirety on the ninth anniversary of the grant date. Certain options
granted as part of Thermo Electron's stock option program have three year
terms, and the repurchase rights lapse in their entirety on the second
anniversary of the grant date.

(2) Options to purchase 22,500 shares of the common stock of Thermo Electron
granted to Mr. Kirshner are subject to the same terms described in footnote
(1), except that the repurchase rights of the granting corporation
generally do not lapse until the tenth anniversary of the grant date. In
the event of the employee's death or involuntary termination prior to the
tenth anniversary of the grant date, the repurchase rights of the granting
corporation shall be deemed to have lapsed ratably over a five-year period
commencing with the fifth anniversary of the grant date.

(3) No public market existed for the shares as of December 28, 1996.
Accordingly, no value in excess of the exercise price has been attributed
to these options.

EMPLOYMENT AGREEMENTS

In connection with the acquisition of the LORAD Corporation ("LORAD") in
November 1992, the Corporation entered into an employment agreement with Mr.
Hal Kirshner. Mr. Kirshner's agreement called for Mr. Kirshner to serve as
President and Chief Operating Officer of LORAD until December 31, 1995, at a
base salary of $200,000 per year plus bonus. This agreement expired on December
31, 1995.

COMMITTEE REPORT ON EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

All decisions on compensation for the Corporation's executive officers are
made by the Human Resources Committee of the Board of Directors (the
"Committee"). In reviewing and establishing total cash compensation and stock-
based compensation for executives, the Committee follows guidelines established
by the Human Resources Committee of the Board of Directors of its parent
corporation, Thermo Electron. The executive compensation program presently
consists of annual base salary ("salary"), short-term incentives in the form of
annual cash bonuses, and long-term incentives in the form of stock options.

The Committee believes that the compensation of executive officers should
reflect the scope of their responsibilities, the success of the Corporation, and
the contributions of each executive to that success. In addition, the Committee
believes that base salaries should approximate the mid-point of competitive
salaries derived from market surveys and that short-term and long-term incentive
compensation should reflect the performance of the Corporation and the
contributions of each executive.

External competitiveness is an important element of the Committee's
compensation policy. The competitiveness of the Corporation's compensation for
its executives is assessed by comparing it to market data provided by its
compensation consultant and by participating in annual executive compensation
surveys, primarily "Project 777", an executive compensation survey prepared by
Management Compensation Services, a division of Hewitt Associates. The majority
of firms represented in the Project 777 survey are included in the Standard &
Poor's Index, but do not necessarily correspond to the companies included in the
Corporation's peer group index, the Standard and Poor's Index for Medical
Products and Supplies.

Principles of internal equity are also central to the Committee's
compensation policies. Compensation considered for the Corporation's officers,
whether cash or stock-based incentives, is also evaluated by comparing it to
compensation of other executives within the Thermo Electron organization with
comparable levels of responsibility for comparably sized business units.

The Committee has changed its fiscal year to end on the Saturday nearest
September 30. Because the compensation practices of the Corporation are guided
by the policies of its parent corporation, Thermo Electron, the Committee plans
to continue to conduct cash compensation reviews on a calendar-year basis in
order to coincide

11
<PAGE>

with the compensation reviews conducted by the human resources committee of the
board of directors of Thermo Electron. Thermo Electron operates on a fiscal year
that ends on the Saturday nearest December 31.

The process for determining each of these elements for the Corporation's
officers is outlined below.

BASE SALARY

Base salaries are intended to approximate the mid-point of competitive
salaries for similar organizations of comparable size and complexity to the
Corporation. Executive salaries are adjusted gradually over time and only as
necessary to meet this objective. Increases in base salary may be moderated by
other considerations, such as geographic or regional market data, industry
trends or internal fairness within the Corporation and Thermo Electron. It is
the Committee's intention that over time the base salaries for the chief
executive officer and the other named executive officers will approach the mid-
point of competitive data.

CASH BONUS

The Committee establishes a median potential bonus for each executive by
using the market data on total cash compensation from the same executive
compensation surveys as used to determine salaries. Specifically, the median
potential bonus plus the salary of an executive officer is approximately equal
to the mid-point of competitive total cash compensation for a similar position
and level of responsibility in businesses having comparable sales and complexity
to the Corporation. The actual bonus awarded to an executive officer may range
from zero to three times the median potential bonus. The value within the range
(the bonus multiplier) is determined at the end of each year by the Committee in
its discretion. The Committee exercises its discretion by evaluating each
executive's performance using a methodology developed by its parent corporation,
Thermo Electron, and applied throughout the Thermo Electron organization. The
methodology incorporates measures of operating returns, designed to measure
profitability and contributions to shareholder value, and are measures of
corporate and divisional performance that are evaluated using graphs developed
by Thermo Electron intended to reward performance that is perceived as above
average and to penalize performance that is perceived below average. The
measures of operating returns used in the Committee's determinations in calendar
1996 measured return on net assets, growth in income, and return on sales, and
the Committee's determinations also included a subjective evaluation of the
contributions of each executive that are not captured by operating measures but
are considered important to the creation of long-term value for the
Stockholders. These measures of achievements are not financial targets that are
met, not met or exceeded. The relative weighting of the operating measures and
subjective evaluation varies depending on the executive's role and
responsibilities within the organization.

Stock Option Program

The primary goal of the Corporation is to excel in the creation of long-
term value for the Stockholders. The principal incentive tool used to achieve
this goal is the periodic award to key employees of options to purchase common
stock of the Corporation and other Thermo Electron companies.

The Committee and management believe that awards of stock options to
purchase the shares of both the Corporation and other companies within the
Thermo Electron group of companies accomplish many objectives. The grant of
options to key employees encourages equity ownership in the Corporation, and
closely aligns management's interests to the interests of all the Stockholders.
The emphasis on stock options also results in management's compensation being
closely linked to stock performance. In addition, because they are subject to
vesting periods of varying durations and to forfeiture if the employee leaves
the Corporation prematurely, stock options are an incentive for key employees to
remain with the Corporation long-term. The Committee believes stock option
awards in its parent companies, ThermoTrex and Thermo Electron, and the other
majority-owned subsidiaries of ThermoTrex and Thermo Electron, are an important
tool in providing incentives for performance within the entire organization.

In determining awards, the Committee considers the average annual value of
all options to purchase shares of the Corporation and other companies within the
Thermo Electron organization that vest in the next five years. (Values are
established using a modified Black-Scholes option pricing model.) As a
guideline, the Committee strives to maintain the aggregate amount of net awards
to all employees over a five-year period below 12% of the

12
<PAGE>

Corporation's outstanding common stock, although other factors such as unusual
transactions and acquisitions and standards for awards of comparably situated
companies may affect the number of awards granted.

Awards are not made annually in conjunction with the annual review of cash
compensation, but are made periodically. The Committee considers total
compensation of executives, actual and anticipated contributions of each
executive (which includes a subjective assessment by the Committee of the value
of the executive's future potential within the organization), as well as the
value of previously awarded options as described above, in determining option
awards.

STOCK OWNERSHIP POLICIES

During fiscal 1996, the Committee established a stock holding policy for
executive officers of the Corporation. The stock holding policy specifies an
appropriate level of ownership of the Corporation's Common Stock as a multiple
of the officer's compensation. For the chief executive officer, the multiple is
1.5 times his base salary and reference bonus for the calendar year. For all
other executive officers, the multiple is one times the officer's base salary.
The Committee deemed it appropriate to permit officers to achieve these
ownership levels over a three-year period.

In order to assist officers in complying with the policy, the Committee
also adopted a stock holding assistance plan under which the Corporation is
authorized to make interest-free loans to officers to enable them to purchase
shares of the Common Stock in the open market. The loans are required to be
repaid ratably to the Corporation over a five-year period. No such loans are
currently outstanding under the plan.

The Committee also adopted a policy requiring its executive officers to
hold a certain number of shares of the Corporation's Common Stock acquired upon
the exercise of stock options granted by the Corporation. Under this policy,
executive officers are required to hold one-half of their net option exercises
for a period of five years. The net option exercise is determined by
calculating the number of shares acquired upon exercise of a stock option, after
deducting the number of shares that could have been traded to exercise the
option and the number of shares that could have been surrender to satisfy tax
withholding obligations attributable to the exercise of the option.

POLICY ON DEDUCTIBILITY OF COMPENSATION

The Committee has also considered the application of Section 162(m) of the
Internal Revenue Code to the Corporation's compensation practices. Section
162(m) limits the tax deduction available to public companies for annual
compensation paid to senior executives in excess of $1 million unless the
compensation qualifies as "performance based." The annual cash compensation
paid to individual executives does not approach the $1 million threshold, and it
is believed that the stock incentive plans of the Corporation qualify as
"performance based." Therefore, the Committee does not believe any further
action is necessary in order to comply with Section 162(m). From time to time,
the Committee will reexamine the Corporation's compensation practices and the
effect of Section 162(m).

1996 CEO COMPENSATION

Prior to December 31, 1995, the cash compensation of Mr. Kirshner was
determined under an employment agreement entered into with Mr. Kirshner in
connection with the acquisition of LORAD Corporation in November 1992 by the
Corporation's parent company, ThermoTrex. Mr. Kirshner's agreement provided for
the payment of a minimum annual base salary of $200,000 and an annual bonus,
determined in a manner consistent with the past practices of LORAD prior to its
acquisition and not to exceed $200,000, the bonus level in effect at the time of
the acquisition.

Since the expiration of Mr. Kirshner's employment agreement in December
1995, the Committee has reviewed and determined Mr. Kirshner's compensation
using criteria similar to that used for other officers of the Corporation. In
1996, the Committee established Mr. Kirshner's salary for calendar 1996 and
determined Mr. Kirshner's bonus for calendar 1996 performance using the
methodology previously described. In establishing Mr. Kirshner's bonus, the
Committee considered, among other factors, Mr. Kirshner's achievements in taking
the Corporation public, completing several strategic acquisitions and
integrating the Corporation's product lines.

13
<PAGE>

The Committee awarded to Mr. Kirshner options to purchase 150,000 shares of
the Common Stock in fiscal 1996. This award was determined in a manner
consistent with awards to other officers, as described above. In addition to
stock option awards by the Committee, Mr. Kirshner may receive awards to
purchase shares of the common stock of Thermo Electron or its other majority
owned subsidiaries from time to time as part of Thermo Electron's stock option
program due to his position as a chief executive officer of a majority owned
subsidiary of Thermo Electron. The stock option awards to Mr. Kirshner in
fiscal 1996 with respect to shares of the following companies were awarded under
this program: Thermo BioAnalysis Corporation, Thermo Fibergen Inc., ThermoLyte
Corporation, Thermo Optek Corporation, ThermoQuest Corporation and Thermo
Sentron Inc. The award to purchase shares of the common stock of Thermo
Electron granted to Mr. Kirshner in fiscal 1996 was made by the Thermo Electron
human resources committee under a program which awards options to certain
eligible employees annually based on the number of shares of the common stock of
Thermo Electron held by the employee, as an incentive to buy and hold Thermo
Electron shares.

Dr. Elias P. Gyftopoulos (Chairman)
Dr. James W. May Jr.
Ms. Hutham S. Olayan

COMPARATIVE PERFORMANCE GRAPH

The Securities and Exchange Commission requires that the Corporation
include in this Proxy Statement a line-graph presentation comparing cumulative,
five-year shareholder returns for the Corporation's Common Stock with a broad-
based market index and either a nationally recognized industry standard or an
index of peer companies selected by the Corporation. The Corporation's Common
Stock has been publicly traded only since June 26, 1996 and, as a result, the
following graph commences as of such date. The Corporation has compared its
performance with the American Stock Exchange Market Value Index and the Dow
Jones Total Return Index for the Medical Supplies Group.

COMPARISON OF TOTAL RETURN AMONG TREX MEDICAL CORPORATION,
THE AMERICAN STOCK EXCHANGE MARKET VALUE INDEX AND THE
DOW JONES TOTAL RETURN INDEX FOR THE MEDICAL SUPPLIES GROUP
FROM JUNE 26, 1996 TO SEPTEMBER 27, 1996

- --------------------------------------------------------------------------------

14
<PAGE>

The total return for the Corporation's Common Stock (TXM), the American
Stock Exchange Market Value Index (AMEX) and the Dow Jones Total Return Index
for the Medical Supplies Group (DJ MED) assumes the reinvestment of dividends,
although dividends have not been declared on the Corporation's Common Stock.
The American Stock Exchange Market Value Index tracks the aggregate performance
of equity securities of companies listed on the American Stock Exchange. The
Corporation's Common Stock is traded on the American Stock Exchange under the
ticker symbol "TXM."

RELATIONSHIP WITH AFFILIATES

Thermo Electron has adopted a strategy of selling a minority interest in
subsidiary companies to outside investors as an important tool in its future
development. As part of this strategy, Thermo Electron and certain of its
subsidiaries have created several privately and publicly held majority-owned
subsidiaries, including the Corporation which was created by ThermoTrex. From
time to time , Thermo Electron and its subsidiaries will create other majority-
owned subsidiaries as part of its spinout strategy. (The Corporation and the
other Thermo Electron subsidiaries are referred to hereinafter as the "Thermo
Subsidiaries.")

Thermo Electron and the Thermo Subsidiaries, including the Corporation,
recognize that the benefits and support that derive from their affiliation are
essential elements of their individual performance. Accordingly, Thermo Electron
and each of the Thermo Subsidiaries, including the Corporation, have adopted the
Thermo Electron Corporate Charter (the "Charter") to define the relationships
and delineate the nature of such cooperation among themselves. The purpose of
the Charter is to ensure that (1) all of the companies and their shareholders
are treated consistently and fairly, (2) the scope and nature of the cooperation
among the companies, and each company's responsibilities, are adequately
defined, (3) each company has access to the combined resources and financial,
managerial and technological strengths of the others, and (4) Thermo Electron
and the Thermo Subsidiaries, in the aggregate, are able to obtain the most
favorable terms from outside parties.

To achieve these ends, the Charter identifies the general principles to be
followed by the companies, addresses the role and responsibilities of the
management of each company, provides for the sharing of group resources by the
companies and provides for centralized administrative, banking and credit
services to be performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by members, coordinating
the access of Thermo Electron and the Thermo Subsidiaries (the "Thermo Group")
to external financing sources, ensuring compliance with external financial
covenants and internal financial policies, assisting in the formulation of long-
range planning and providing other banking and credit services. Pursuant to the
Charter, Thermo Electron may also provide guarantees of debt obligations of the
Thermo Subsidiaries or may obtain external financing at the parent level for the
benefit of the Thermo Subsidiaries. In certain instances, the Thermo
Subsidiaries may provide credit support to, or on behalf of, the consolidated
entity or may obtain financing directly from external financing sources. Under
the Charter, Thermo Electron is responsible for ensuring that the Thermo Group
remains in compliance with all covenants imposed by external financing sources,
including covenants related to borrowings of Thermo Electron or other members of
the Thermo Group, and for apportioning such constraints within the Thermo Group.
In addition, Thermo Electron establishes certain internal policies and
procedures applicable to members of the Thermo Group. The cost of the services
provided by Thermo Electron to the Thermo Subsidiaries is covered under existing
corporate services agreements between Thermo Electron and each of the Thermo
Subsidiaries.

The Charter presently provides that it shall continue in effect so long as
Thermo Electron and at least one Thermo Subsidiary participate. The Charter may
be amended at any time by agreement of the participants. Any Thermo Subsidiary,
including the Corporation, may withdraw from participation in the Charter upon
30 days' prior

15
<PAGE>

notice. In addition, Thermo Electron may terminate a subsidiary's participation
in the Charter in the event the subsidiary ceases to be controlled by Thermo
Electron or ceases to comply with the Charter or the policies and procedures
applicable to the Thermo Group. A withdrawal from the Charter automatically
terminates the corporate services agreement in effect between the withdrawing
company and Thermo Electron. The withdrawal from participation does not
terminate outstanding commitments to third parties made by the withdrawing
company, or by Thermo Electron or other members of the Thermo Group, prior to
the withdrawal. However, a withdrawing company is required to continue to comply
with all policies and procedures applicable to the Thermo Group and to provide
certain administrative functions mandated by Thermo Electron so long as the
withdrawing company is controlled by or affiliated with Thermo Electron.

As provided in the Charter, Thermo Electron and the Corporation have
entered into a Corporate Services Agreement (the "Services Agreement") under
which Thermo Electron's corporate staff provides certain administrative
services, including certain legal advice and services, risk management, certain
employee benefit administration, tax advice and preparation of tax returns,
centralized cash management and certain financial and other services to the
Corporation. In calendar 1994 and calendar 1995, Thermo Electron assessed the
Corporation an annual fee for these services equal to 1.25% and 1.20%,
respectively, of the Corporation's total revenues. Effective January 1, 1996,
the fee was reduced to 1.0% of the Corporation's total revenues. The fee may be
changed by mutual agreement of the Corporation and Thermo Electron. During
fiscal 1996, Thermo Electron assessed the Corporation $1,567,000 in fees under
the Services Agreement. Management believes that the charges under the Services
Agreement are representative of the expenses the Corporation would have incurred
on a stand-alone basis and that the terms of the Services Agreement are
reasonable. For additional items such as employee benefit plans, insurance
coverage and other identifiable costs, Thermo Electron charges the Corporation
based upon costs attributable to the Corporation. The Services Agreement
automatically renews for successive one-year terms, unless canceled by the
Corporation upon 30 days' prior notice. In addition, the Services Agreement
terminates automatically in the event the Corporation ceases to be a member of
the Thermo Group or ceases to be a participant in the Charter. In the event of a
termination of the Services Agreement, the Corporation will be required to pay a
termination fee equal to the fee that was paid by the Corporation for services
under the Services Agreement for the nine-month period prior to termination.
Following termination, Thermo Electron may provide certain administrative
services on an as-requested basis by the Corporation or as required in order to
meet the Corporation's obligations under Thermo Electron's policies and
procedures. Thermo Electron will charge the Corporation a fee equal to the
market rate for comparable services if such services are provided to the
Corporation following termination.

From time to time, the Corporation may transact business with other
companies in the Thermo Group. In fiscal 1996, such transactions included the
following.

In October 1995, ThermoTrex granted to the Corporation an exclusive, paid-
up, royalty-free license for the use of certain technology relating to digital
imaging detectors in the fields of mammography and general radiography. Under
the license agreement, if the Corporation funds approximately $6 million of
ThermoTrex's research and development of the digital imaging technology in the
fields of radiographic/fluoroscopy, mobile C-arm fluoroscopy and
cardiology/angiography over the next three years, then ThermoTrex will be
obligated to grant the Corporation a fully-paid, exclusive, worldwide, perpetual
license to use and sell the digital imaging technology in these additional
fields. The license agreement provides that ThermoTrex will manufacture products
based on the digital imaging technology for the Corporation in the applicable
fields. ThermoTrex will sell the products to the Corporation at ThermoTrex's
cost until the Corporation has received an amount of Net Profit (as defined
below) from the resale of such products equal to amounts paid by the Corporation
for research and development as set forth above less any additional research and
development costs incurred by ThermoTrex with the prior written approval of the
Corporation, and thereafter at ThermoTrex's cost plus one-half of Net Profit.
For purposes of the preceding sentence, "Net Profit" means the difference
between the prices the Corporation receives upon resale of such products and the
aggregate costs of the Corporation and ThermoTrex relating to such sales. As of
September 28, 1996, the Corporation had paid approximately $1,800,000 to
ThermoTrex under this arrangement.

The Corporation has an arrangement with the Tecomet division of Thermo
Electron for the manufacture of the Corporation's proprietary HTC grid. Under
this arrangement Tecomet manufactures the grid for the Corporation pursuant to
written purchase orders. The Corporation owns the intellectual property rights
to the grid. During fiscal

16
<PAGE>

1996, the Corporation purchased 331 grids for an aggregate purchase price of
$397,000 under this arrangement. In addition, the Corporation paid Tecomet
$250,000 during fiscal 1996 for research and development provided by Tecomet in
connection with this project.

Under an arrangement with ThermoLase Corporation, a majority-owned
subsidiary of ThermoTrex, the Corporation manufactures the laser used in
ThermoLase Corporation's hair-removal process. The Corporation manufactures
these lasers for ThermoLase pursuant to written purchase orders. During fiscal
1996, the Corporation sold 143 laser systems to ThermoLase at various prices for
an aggregate of $8,549,000 under this arrangement. As of September 28, 1996,
the Corporation had committed to deliver 132 additional lasers to ThermoLase
under this arrangement for an aggregate of approximately $6,400,000.

Under an arrangement with Thermedics Detection Inc., a subsidiary of
Thermedics Inc., a majority-owned subsidiary of Thermo Electron, the Corporation
manufactures an X- ray source that is used as a component to a fill-measuring
device produced by Thermedics Detection. The Corporation manufactures these X-
ray sources for Thermedics Detection pursuant to written purchase orders. During
fiscal 1996, Thermedics Detection purchased 100 units from the Corporation for
an aggregate purchase price of $361,000 under this arrangement.

On October 2, 1995, in exchange for all of the outstanding shares of
capital stock of Bennett X-Ray Corporation, the Corporation issued to ThermoTrex
a $42,000,000 principal amount 4.2% subordinated convertible note due 2000 (the
"Convertible Note"), convertible into shares of the Corporation's Common Stock
at a conversion price of $11.79 per share. In fiscal 1996, ThermoTrex converted
$34,000,000 principal amount of the Convertible Note into 2,883,798 shares of
Common Stock.

In November 1995, Mr. Pellegrino and Mr. Rufeh, Directors of the
Corporation, and Mr. Kirshner, Director and executive officer of the
Corporation, purchased from the Corporation 20,000, 19,600 and 100,000, shares
of Common Stock of the Corporation respectively, for an aggregate purchase price
of $205,000, $200,900 and $1,025,000, respectively. In addition, in November
1995 and January 1996, Crescent International Holdings Ltd. purchased from the
Corporation an aggregate of 200,000 shares of the Common Stock of the
Corporation for an aggregate purchase price of $2,100,000. Crescent
International Holdings Ltd. is indirectly controlled by Suliman S. Olayan, the
father of Hutham S. Olayan, a Director of the Corporation. Ms. Olayan disclaims
beneficial ownership of the shares owned by Crescent International Holdings Ltd.
All of such purchases were made in private placements of 1,862,000 shares of the
Corporation's Common Stock in November 1995 and 100,000 shares of the
Corporation's Common Stock in January 1996 at per share prices of $10.25 and
$10.75, respectively.

As of September 28, 1996, $32,696,000 of the Corporation's cash equivalents
were invested pursuant to a repurchase agreement with Thermo Electron. Under
this agreement, the Corporation in effect lends excess cash to Thermo Electron,
which Thermo Electron collateralizes with investments principally consisting of
corporate notes, United States government agency securities, money market funds,
commercial paper and other marketable securities, in the amount of at least 103%
of such obligation. The Corporation's funds subject to the repurchase agreement
are readily convertible into cash by the Corporation. The repurchase agreement
earns a rate based on the 90-day Commercial Paper Composite Rate plus 25 basis
points, set at the beginning of each quarter.

STOCK HOLDING ASSISTANCE PLAN

In 1996, the Corporation adopted a stock holding policy which requires its
executive officers to acquire and hold a minimum number of shares of Common
Stock. In order to assist the executive officers in complying with the policy,
the Corporation also adopted a Stock Holding Assistance Plan under which it may
make interest-free loans to certain key employees, including its executive
officers, to enable such employees to purchase the Common Stock in the open
market. No such loans are currently outstanding under the plan.

17
<PAGE>

-- PROPOSAL 2 --

PROPOSAL TO ADOPT AN EMPLOYEES' STOCK PURCHASE PLAN

The Board of Directors has approved an employees' stock purchase plan (the
"Stock Purchase Plan") and reserved 100,000 shares of the Corporation's Common
Stock for issuance thereunder, subject to Stockholder approval. The Board of
Directors is recommending that the Stockholders approve the Stock Purchase Plan
and the reservation of shares at this Meeting. The purpose of the Stock
Purchase Plan is to grant options to purchase shares of Common Stock of the
Corporation to eligible employees of the Corporation. The Board of Directors
believes that the Stock Purchase Plan is an important incentive in attracting
and retaining key personnel, and motivating individuals to contribute
significantly to the Corporation's future growth and success, and in aligning
the long-term interest of these individuals with those of the Corporation's
Stockholders. Accordingly, the Board of Directors acted to adopt the Stock
Purchase Plan subject to Stockholder approval.

SUMMARY OF THE STOCK PURCHASE PLAN

The full text of the Stock Purchase Plan is set forth in Attachment A to
this Proxy Statement. A description of the principal features of the Stock
Purchase Plan follow, but it is qualified in its entirety by reference to the
full text.

PARTICIPATION; ADMINISTRATION

All full-time employees and part-time employees working at least 20 hours
per week and who have been employed for at least six months by the Corporation
are eligible to participate in the Stock Purchase Plan, unless they own more
that 5% of the Common Stock of the Corporation. For purposes of determining the
term of employment, employees are credited with years of continuous employment
with Thermo Electron or its other subsidiaries immediately prior to joining the
Corporation. Options to purchase shares of Common Stock of the Corporation may
be granted from time to time at the discretion of the Board of Directors, which
also determines the date upon which such options are exercisable. The number of
employees potentially eligible to participate in the Stock Purchase Plan is
approximately 676 persons.

CONTRIBUTIONS

A participating employee may purchase stock only through payroll
deductions. Eligible employees are also permitted to participate in the Thermo
Electron employees' stock purchase plan, which has substantially the same terms
as the Stock Purchase Plan. The aggregate amount which may be contributed under
the Thermo Electron ESPP and the Corporation's Stock Purchase Plan may not
exceed 10% of the employee's gross salary or wages during the year. The Board
of Directors may fix the aggregate amount that may be contributed to the Stock
Purchase Plan each year in its discretion within such limitation. Employees are
allowed to decrease, but not increase, the percentage of wages contributed once
during the Stock Purchase Plan year. An employee may suspend his or her
contributions, but then is not permitted to contribute again for the remainder
of the Stock Purchase Plan year.

TERMS OF OPTIONS

The exercise price is fixed on the grant date and is 95% of the fair market
value for the Common Stock on such date. On the exercise date, participants may
elect to use their accumulated payroll deductions to purchase shares at the
exercise price. Participants must agree not to resell the shares so purchased
for a period of six months following the exercise date. The options are
nontransferable, and except in the case of death of the employee, may not be
exercised if the employee is not still employed by the Corporation at the
exercise date. If an employee dies, his or her beneficiary may withdraw the
accumulated payroll deduction or use such deductions to purchase shares on the
exercise date. A participant may elect to discontinue participation at any time
prior to the exercise date and to have his or her accumulated payroll deduction
refunded together with interest on such amount as fixed by the Board of
Directors from time to time.

18
<PAGE>

SHARES SUBJECT TO THE STOCK PURCHASE PLAN

The number of shares that are reserved for issuance under the Stock
Purchase Plan will be 100,000 shares of the Corporation's Common Stock, subject
to adjustment for stock splits and similar events. The proceeds received by the
Corporation from exercise under the Stock Purchase Plan will be used for the
general purposes of the Corporation. Shares issued under the Stock Purchase
Plan may be authorized but unissued or shares reacquired by the Corporation and
held in its treasury.

AMENDMENT AND TERMINATION

The Stock Purchase Plan shall remain in full force and effect until
suspended or discontinued by the Board of Directors. The Board of Directors may
at any time or times amend or review the Stock Purchase Plan for any purpose
which may at any time be permitted by law, or may at any time terminate the
Stock Purchase Plan. No amendment of the Stock Purchase Plan may adversely
affect the rights of any recipient of any option previously purchased without
such recipient's consent.

EFFECTIVE DATE OF THE STOCK PURCHASE PLAN

The Stock Purchase Plan will become effective as of November 1, 1997,
provided that it is approved by the Stockholders at this Meeting.

FEDERAL INCOME TAX ASPECTS

Federal income tax is not imposed upon an employee in the year an option is
granted or the year the shares are purchased pursuant to the exercise of the
option granted under the Stock Purchase Plan. Federal income tax generally is
imposed upon an employee when he or she sells or otherwise disposes of the
shares acquired pursuant to the Stock Purchase Plan. When an employee sells or
disposes of the shares, if such sale or disposition occurs more than two years
from the grant date and more than one year from the exercise date, then Federal
income tax assessed at ordinary rates will be imposed upon the amount by which
the fair market value of the shares on the date of grant or disposition,
whichever is less, exceeds the amount paid for the shares. In addition, the
difference between the amount received by the employee at the time of sale and
the employee's tax basis in the shares, which is equal to the amount paid on
exercise of the option plus the amount recognized as ordinary income, will be
recognized as a capital gain or loss. The Corporation will not be allowed a
deduction under these circumstances for Federal income tax purposes. If the
employee sells or disposes of the shares sooner than two years from the grant
date or one year from the exercise date, then the employee's entire gain (the
difference between the fair market value at disposition and the amount paid for
the shares) will be taxed as ordinary income, and the Corporation would be
entitled to a deduction equal to that amount.

The closing price per share on the American Stock Exchange of the Common
Stock on February 12, 1997 was $12.875.

RECOMMENDATION

The Board of Directors believes that adoption of the Stock Purchase Plan
and the reservation of shares thereunder is important for the Corporation to
attract and retain key employees and to be able to continue to offer them the
opportunity to participate in the ownership and growth of the Corporation
through an employees' stock purchase plan. In addition, the Board of Directors
believes the Stock Purchase Plan is in the best interest of the Corporation and
its Stockholders and recommends that the Stockholders vote FOR the approval of
the Stock Purchase Plan and the reservation of 100,000 shares of Common Stock
thereunder. ThermoTrex, which beneficially owned approximately 79% of the
outstanding voting stock of the Corporation on January 30, 1997, has indicated
its intention to vote for the proposal.

- --------------------------------------------------------------------------------

The affirmative vote of a majority of the Common Stock present and entitled
to vote on this proposal is required to approve the adoption of the Stock
Purchase Plan and the reservation of 100,000 shares of Common Stock thereunder.
The Board of Directors believes that the adoption of the Stock Purchase Plan is
in the best interest of the Corporation and its Stockholders and recommends that
you vote FOR approval of the Stock Purchase

19
<PAGE>

Plan and the reservation of the shares. If not otherwise specified, Proxies will
be voted FOR approval of this proposal.

- --------------------------------------------------------------------------------

APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has appointed Arthur Andersen LLP as independent
public accountants for fiscal 1996. Arthur Andersen LLP has acted as independent
public accountants for the Corporation since 1990. Representatives of that firm
are expected to be present at the Meeting, will have the opportunity to make a
statement if they desire to do so and will be available to respond to questions.
The Board of Directors has established an Audit Committee, presently consisting
of three outside Directors, the purpose of which is to review the scope and
results of the audit.

OTHER ACTION

Management is not aware at this time of any other matters that will be
presented for action at the Meeting. Should any such matters be presented, the
Proxies grant power to the Proxy holders to vote shares represented by the
Proxies in the discretion of such Proxy holders.

STOCKHOLDER PROPOSALS

Proposals of Stockholders intended to be presented at the 1998 Annual
Meeting of the Stockholders of the Corporation must be received by the
Corporation for inclusion in the Proxy Statement and form of Proxy relating to
that meeting no later than October 20, 1997.

SOLICITATION STATEMENT

The cost of this solicitation of Proxies will be borne by the Corporation.
Solicitation will be made primarily by mail, but regular employees of the
Corporation may solicit Proxies personally, by telephone or telegram. Brokers,
nominees, custodians and fiduciaries are requested to forward solicitation
materials to obtain voting instructions from beneficial owners of stock
registered in their names, and the Corporation will reimburse such parties for
their reasonable charges and expenses in connection therewith.

Danbury, Connecticut
February 14, 1997

20
<PAGE>

ATTACHMENT A

TREX MEDICAL CORPORATION

EMPLOYEES' STOCK PURCHASE PLAN

1. DEFINITIONS. As used in this Employees' Stock Purchase Plan of Trex
-----------
Medical Corporation, the following terms shall have the meanings respectively
assigned to them below:

(A) BASE COMPENSATION means annual or annualized base compensation,
exclusive of overtime, bonuses, contributions to employee benefit plans,
or other fringe benefits, sales commissions, moving expense reimbursements
or other special payments.

(B) BENEFICIARY means the person designated as beneficiary on the
Participant's Membership Agreement or, if no such beneficiary is named, the
person to whom the Option is transferred by will or under the applicable
laws of descent and distribution.

(D) CODE means the Internal Revenue Code of 1986, as amended.

(E) COMPANY means Trex Medical Corporation, a Delaware corporation.

(F) COMPANY STOCK means the common stock, $.01 par value, of the Company.

(G) ELIGIBLE EMPLOYEE means a person who is eligible under the provisions
of Section 7 to receive an Option as of a particular Grant Date.

(H) ENROLLMENT AGREEMENT means an agreement whereby a Participant
authorizes the Company to withhold payroll deductions from his or her Gross
Compensation.

(I) EXERCISE DATE means a date not more than one year after a Grant Date,
as determined by the Board, on which Options must be exercised by Eligible
Employees.

(J) GRANT DATE means a date specified by the Board on which Options are to
be granted to Eligible Employees.

(K) GROSS COMPENSATION means Base Compensation plus sales commissions,
overtime pay and cash bonuses.

(L) MARKET VALUE means, as of a particular date, the last sale price of
the Company Stock if such stock is reported on the American Stock Exchange,
or if not so reported, the average of bid and asked prices of the Company
Stock last quoted by NASDAQ in the over-the-counter market on such date, or
the closing price of the Thermo Electron Stock reported by the New York
Stock Exchange, as the case may be.

(M) OPTION means an option to purchase shares of Stock granted under the
Plan.

(N) OPTION SHARES means shares of Stock purchasable under an Option, which
shares may not be transferred by the Participant until at least six months
after the Exercise Date.

(O) PARTICIPANT means an Eligible Employee to whom an Option is granted
and who authorizes the Company to withhold payroll deductions by completing
an Enrollment Agreement.

(P) PLAN means this Employees' Stock Purchase Plan of the Company, as
amended from time to time.

21
<PAGE>

(Q) RELATED CORPORATION means any corporation which is a parent
corporation of the Company, as defined in Section 425(e) of the Code, and
any corporation controlled by that parent corporation or the Company.

(R) RULE 16B-3 means Rule 16b-3 and any successor rule promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended.

(S) SECTION 423 means Section 423 of the Code.

2. PURPOSE OF THE PLAN. The Plan is intended to encourage ownership of
-------------------
Company Stock by employees of the Company and to provide additional incentive
for the employees to promote the success of the business of the Company. It is
intended that the Plan shall be an "employee stock purchase plan" within the
meaning of Section 423.

3. TERM OF THE PLAN. The Plan shall become effective on November 1,
----------------
1997. No option shall be granted under the Plan after November 2, 2007.

4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
--------------------------
Board, which annually shall determine whether to grant Options under the Plan,
shall specify which dates shall be Grant Dates and Exercise Dates, and shall fix
the respective maximum percentages of each Participant's Gross Compensation
which may be withheld for the purpose of purchasing shares of Company Stock;
provided, that, the maximum aggregate percentage of each Participant's Gross
- --------
Compensation which may be withheld for the purpose of purchasing shares of stock
under this Plan and all other employees stock purchase plans (as defined in
Section 423(b) of the Code) administered by a Related Corporation and in which
Eligible Employees may participate shall not exceed ten percent of the
Participant's Gross Compensation. The Board shall have authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms of Options granted under the Plan, and to make all
other determinations necessary or advisable for the administration of the Plan.

The Board may appoint a committee, consisting of "disinterested directors"
as defined in Rule 16b-3, to administer the Plan and may, in its sole and
absolute discretion, delegate any or all of the functions specified herein
regarding administration of the Plan to such committee.

5. TERMINATION AND AMENDMENT OF PLAN. The Board may terminate or amend
---------------------------------
the Plan at any time; provided, however, that no amendment, unless approved by
------------------
the holders of a majority of the issued and outstanding shares of Company Stock
shall be effective if it would cause the Plan to fail to satisfy the
requirements of Rule 16b-3. No termination of or amendment to the Plan may
adversely affect the rights of a Participant with respect to any Option held by
the Participant as of the date of such termination or amendment.

6. SHARES OF STOCK SUBJECT TO THE PLAN. No more than an aggregate of
-----------------------------------
100,000 shares of Company Stock may be issued or delivered pursuant to the
exercise of Options granted under the Plan, subject to adjustments made in
accordance with Section 9.8. Option Shares may be either shares of Company
Stock which are authorized but unissued or shares of Company Stock held by the
Company in its treasury. If an Option expires or terminates for any reason
without having been exercised in full, the unpurchased Option Shares shall
become available for other Options granted under the Plan. The Company shall,
at all times during which Options are outstanding, reserve and keep available
shares of Company Stock sufficient to satisfy such Options, and shall pay all
fees and expenses incurred by the Company in connection therewith. In the event
of any capital change in the outstanding Company Stock as contemplated by
Section 9.8, the number of shares of Company Stock reserved and kept available
by the Company shall be appropriately adjusted.

7. PERSONS ELIGIBLE TO RECEIVE OPTIONS. Each employee of the Company
-----------------------------------
shall be granted an Option on each Grant Date on which such employee meets all
of the following requirements:

22
<PAGE>

(A) The employee has completed at least six months of continuous
employment for the Company or a Related Corporation. Employment shall
include any leave of absence for military service, illness or other bona
fide purpose which does not exceed the longer of 90 days or the period
during which the absent employee's reemployment rights are guaranteed by
statute or contract.

(B) The employee is customarily employed by the Company for more than 20
hours per week and for more than five months per calendar year.

(C) The employee will not, after grant of the Option, own stock possessing
five percent or more of the total combined voting power or value of all
classes of stock of the Company or of any Related Corporation. For
purposes of this paragraph (c), the rules of Section 425(d) of the Code
shall apply in determining the stock ownership of the employee, and stock
which the employee may purchase under outstanding options shall be treated
as stock owned by the employee.

(D) Upon grant of the Option, the employee's rights to purchase stock under
all employee stock purchase plans (as defined in Section 423(b) of the
Code) of the Company and its Related Corporations will not accrue at a rate
which exceeds $25,000 of fair market value of the Stock (determined as of
the Grant Date for such Option) for each calendar year in which such Option
is outstanding at any time. The accrual of rights to purchase Stock shall
be determined in accordance with Section 423(b) (8) of the Code.

8. DATES FOR GRANTING OPTIONS. Options shall be granted on each date
--------------------------
designated by the Board as a Grant Date.

9. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------

9.1. GENERAL. All Options granted on a particular Grant Date shall comply
-------
with the terms and conditions set forth in Sections 9.3 through 9.12, and each
Option shall be identical except as to the number of shares of Company Stock
purchasable under the Option, which shall be determined in accordance with
Section 9.2.

9.2. NUMBER OF SHARES. The maximum number of shares of Company Stock which
----------------
a Participant shall be permitted to purchase shall be equal to the amount of the
Participant's Gross Compensation permitted to be withheld for purchasing Company
Stock during the period running from the Grant Date to the Exercise Date,
divided by the purchase price determined in accordance with Section 9.3. The
number of shares which a Participant is permitted to purchase may be further
limited by the amount of payroll deductions actually withheld as of the Exercise
Date.

9.3. PURCHASE PRICE. The purchase price of Option Shares shall be 95
--------------
percent of the Market Value of Company Stock as of the Grant Date. If the Grant
Date shall fall on a Saturday, Sunday or other legal holiday, the Market Value
shall be determined as of the trading day immediately preceding the Grant Date.

9.4. RESTRICTIONS ON TRANSFER. Options may not be transferred otherwise
------------------------
than by will or under the laws of descent and distribution, or pursuant to a
qualified domestic relations order. An Option may not be exercised by anyone
other than the Participant during the lifetime of the Participant. Option
Shares may not be sold or otherwise transferred by the Participant until at
least six months after the Exercise Date. The Company shall have the right to
place a legend on all stock certificates representing Option Shares setting
forth the restriction on transferability of such shares.

9.5. EXPIRATION. Each Option shall expire at the close of business on the
----------
Exercise Date or on such earlier date as may result from the operation of
Section 9.6.

9.6. TERMINATION OF EMPLOYMENT OF PARTICIPANT. If a Participant ceases for
----------------------------------------
any reason, voluntary or involuntary (other than death or retirement), to be
continuously employed by the Company or a Related Corporation, his or her Option
shall immediately expire, and the Participant's accumulated payroll deductions
shall be returned by the Company with interest pursuant to Section 9.12. For
purposes of this Section 9.6, a Participant

23
<PAGE>

shall be deemed to be employed throughout any leave of absence for military
service, illness or other bona fide purpose which does not exceed the longer of
ninety days or the period during which the Participant's reemployment rights are
guaranteed by statute or by contract. If the Participant does not return to
active employment prior to the termination of such period, his or her employment
shall be deemed to have ended on the 91st day of such leave of absence.

9.7 RETIREMENT OR DEATH OF PARTICIPANT. If a Participant retires or dies,
----------------------------------
the Participant or, in the case of death, his or her Beneficiary, shall be
entitled to withdraw the Participant's accumulated payroll deductions with
interest pursuant to Section 9.12, or to purchase shares on the Exercise Date to
the extent that the Participant would have been so entitled had he or she
continued to be employed by the Company. The number of shares purchasable shall
be limited by the amount of the participant's accumulated payroll deductions as
of the date of his or her retirement or death. Accumulated payroll deductions
shall be applied by the Company toward the purchase of shares unless the
Participant or Beneficiary withdraws such funds prior to the Exercise Date.

9.8 CAPITAL CHANGES AFFECTING THE STOCK. In the event that, between the
-----------------------------------
Grant Date and the Exercise Date of an Option, a stock dividend is paid or
becomes payable in respect of Company Stock or there occurs a split-up or
contraction in the number of shares of Company Stock, the number of shares for
which the Option may thereafter be exercised and the price to be paid for each
such share shall be proportionately adjusted. In the event that, after the
Grant Date, there occurs a reclassification or change of outstanding shares of
Company Stock or a consolidation or merger of the Company with or into another
corporation or a sale or conveyance, substantially as a whole, of the property
of the Company, the Participant shall be entitled on the Exercise Date to
receive shares of stock or other securities equivalent in kind and value to the
shares of stock he or she would have held if he or she had exercised the Option
in full immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance and had continued to hold such shares (together with
all other shares and securities thereafter issued in respect thereof) until the
Exercise Date. In the event that there is to occur a recapitalization involving
an increase in the par value of Company Stock which would result in a par value
exceeding the exercise price under an outstanding Option, the Company shall
notify the Participant of such proposed recapitalization immediately upon its
being recommended by the Board to the Company's shareholders, after which the
Participant shall have the right to exercise his or her Option prior to such
recapitalization; if the Participant fails to exercise the Option prior to
recapitalization, the exercise price under the Option shall be appropriately
adjusted. In the event that, after the Grant Date, there occurs a dissolution
or liquidation of the Company, except pursuant to a transaction to which Section
425(a) of the Code applies, each Option to purchase Company Stock shall
terminate, but the Participant holding such Option shall have the right to
exercise his or her Option prior to such dissolution or liquidation.

9.9. PAYROLL DEDUCTIONS. Any Eligible Employee, who wishes to authorize
------------------
payroll deductions for the purchase of Option Shares under the Plan, must
complete and return to the human resources department of the Company prior to
the Grant Date an Enrollment Agreement indicating the total percentage (which
shall be a full integer between one and the maximum determined by the Board in
accordance with Section 4 hereof) of his or her Gross Compensation which is to
be withheld each pay period. Prior to the Exercise Date, the Participant shall
be permitted only once to (a) withdraw accumulated payroll deductions, (b)
discontinue payroll deductions, or (c) decrease, but not increase, the
percentages of Gross Compensation withheld. The Participant may not recommence
payroll deductions at any time prior to the Exercise Date.

9.10. EXERCISE OF OPTIONS. On the Exercise Date the Participant shall be
-------------------
deemed to have exercised his or her Option to purchase the maximum number of
Option Shares purchasable by his or her accumulated payroll deductions, provided
that:

(A) The number of Option Shares of Company Stock purchasable shall not
exceed the number of shares the Participant is entitled to purchase
pursuant to Section 9.2.

(B) If the total number of Option Shares of Company Stock which all
Participants elect to purchase, together with any Option Shares of Company
Stock already purchased under the Plan, exceeds the total number of shares
of Company Stock which may be purchased under the Plan pursuant to Section
6, the number of shares of Company Stock which each Participant is
permitted to purchase shall be decreased pro
---

24
<PAGE>

rata based on the Participant's accumulated payroll deductions with respect
----
to Company Stock in relation to all accumulated payroll deductions
currently being withheld under the Plan with respect to Company Stock.

(C) If the number of Option Shares purchasable includes a fraction, such
number shall be adjusted to the next smaller whole number and the purchase
price shall be adjusted accordingly.

(D) Notwithstanding the foregoing, a Participant may notify the Company's
human resources department at least 30 days prior to an Exercise Date, by
completing an Enrollment/Change Agreement, that he or she elects not to
exercise his or her Option and desires to withdraw his or her accumulated
payroll deductions withheld under the Plan, as provided in Section 9.9.

9.11. DELIVERY OF STOCK. Within a reasonable time after the Exercise
-----------------
Date, the Company shall deliver or cause to be delivered to the Participant a
certificate or certificates for the number of shares purchased by the
Participant. If any law or applicable regulation of the Securities and Exchange
Commission or other body having jurisdiction in the premises shall require that
the Company or the Participant take any action in connection with the shares
being purchased under the Option, delivery of the certificate or certificates
for such shares shall be postponed until the necessary action shall have been
completed, which action shall be taken by the Company at its own expense,
without unreasonable delay. The Participant shall have no rights as a
shareholder in respect of shares for which he or she has not received a
certificate.

9.12. RETURN OF ACCUMULATED PAYROLL DEDUCTIONS. In the event that the
----------------------------------------
Participant or the Beneficiary is entitled to the return of accumulated payroll
deductions, whether by reason of voluntary withdrawal, termination of
employment, retirement, death, or in the event that accumulated payroll
deductions exceed the price of Option Shares purchased, such amount, together
with interest thereon at the rate fixed by the Board of Directors (which rate
for a particular plan year running from Grant Date to Exercise Date shall be
fixed annually by the Board of Directors prior to the commencement of such
period), shall be returned within a reasonable time by the Company to the
Participant or the Beneficiary, as the case may be; provided, however, that
-------- -------
interest shall not be paid on any amount returned which is less than the
purchase price of one Option Share of Company Stock for which such payroll
deductions were withheld.

25
<PAGE>

TREX MEDICAL CORPORATION

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MARCH 12, 1997

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby appoints John N. Hatsopoulos, Hal Kirshner and
Jonathan W. Painter, or any one of them in the absence of the others, as
attorneys and proxies of the undersigned, with full power of substitution, for
and in the name of the undersigned, to represent the undersigned at the Annual
Meeting of the Stockholders of Trex Medical Corporation, a Delaware corporation
(the "Company"), to be held on Wednesday, March 12, 1997, at 10:30 a.m., at the
Westin Hotel, 70 Third Avenue, Waltham, Massachusetts 02154 and at any
adjournment or postponement thereof, and to vote all shares of common stock of
the Company standing in the name of the undersigned on January 30, 1997, with
all of the powers the undersigned would possess if personally present at such
meeting:

(IMPORTANT - TO BE SIGNED AND DATED ON THE REVERSE SIDE.)

Please mark your
[ x ] votes as in this
example.

1. ELECTION OF DIRECTORS OF THE COMPANY (see reverse).

FOR [ ] WITHHELD [ ]

______________________________________
FOR all nominees listed at right, except authority to vote withheld for the
following nominees (if any)

NOMINEES: Elias P. Gyftopoulos, Robert C. Howard, Hal Kirshner, Earl R. Lewis,
James W. May Jr., Hutham S. Olayan, Anthony J. Pellegrino, Firooz Rufeh, Kenneth
Y. Tang and Gary S. Weinstein.

FOR AGAINST ABSTAIN

2. Approve adoption of the Corporation's [ ] [ ] [ ]
employee stock purchase plan and the reservation
of 100,000 shares of Common Stock for
issuance thereunder.

3. In their discretion on such other matters as may properly come before the
Meeting.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS SET FORTH
ABOVE IF NO INSTRUCTION TO THE CONTRARY IS INDICATED OR IF NO INSTRUCTION IS
GIVEN.

Copies of the Notice of Meeting and of the Proxy Statement have been received
by the undersigned.

SIGNATURE(S)_______________________________________ DATE_________________

NOTE: This proxy should be dated, signed by the shareholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should
sign.