SCHEDULE 14A INFORMATION
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
THERMO VOLTEK CORP.
-------------------
(Name of Registrant as Specified in 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
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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: ___________________________________________
Notes:
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THERMO VOLTEK CORP.
470 Wildwood Street
Woburn, Massachusetts 01888
May 8, 1997
Dear Stockholder:
The enclosed Notice calls the 1997 Annual Meeting of the
Stockholders of Thermo Voltek Corp. I respectfully request all
Stockholders attend this meeting, if possible.
Our Annual Report for the year ended December 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,
JOHN W. WOOD JR.
Chairman and Chief Executive Officer
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THERMO VOLTEK CORP.
470 Wildwood Street
Woburn, Massachusetts 01888
May 8, 1997
To the Holders of the Common Stock of
THERMO VOLTEK CORP.
NOTICE OF ANNUAL MEETING
The 1997 Annual Meeting of the Stockholders of Thermo Voltek
Corp. (the "Corporation") will be held on Monday, June 2, 1997,
at 1:30 p.m. at The Hyatt Regency Hotel, Hilton Head, South
Carolina. The purpose of the meeting is to consider and take
action upon the following matters:
1. Election of six directors.
2. A proposal recommended by the Board of Directors to amend
the Corporation's equity incentive plan to increase the shares
available for issuance under the plan by 300,000 shares.
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
April 7, 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
shares 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
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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
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PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of
Thermo Voltek Corp. (the "Corporation") for use at the 1997
Annual Meeting of the Stockholders (the "Meeting") to be held on
Monday, June 2, 1997, at 1:30 p.m. at The Hyatt Regency Hotel,
Hilton Head, South Carolina, and any adjournment thereof. The
mailing address of the executive office of the Corporation is 470
Wildwood Street, Woburn, Massachusetts 01888. This proxy
statement and the enclosed proxy were first furnished to
Stockholders of the Corporation on or about May 12, 1997.
VOTING PROCEDURES
The Board of Directors intends to present to the Meeting the
election of six directors, constituting the entire Board of
Directors and one other matter: a proposal to increase the
number of shares available for issuance under the Corporation's
equity incentive plan by 300,000 shares.
The representation in person or by proxy of a majority of
the outstanding shares of common stock of the Corporation, $.05
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 toward 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, the affirmative vote of a majority of the
shares of Common Stock present and entitled to vote on the
proposal is necessary for approval. Withholding authority to
vote for a nominee for director or the management 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 the proposal.
Broker "non-votes" will not be treated as shares present and
entitled to vote on a voting matter and will have no effect on
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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
April 7, 1997 consisted of 9,910,927 shares of Common Stock. Only
Stockholders of record at the close of business on April 7, 1997
are entitled to vote at the Meeting. Each share is entitled to
one vote.
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--PROPOSAL 1--
ELECTION OF DIRECTORS
Six directors are to be elected at the Meeting, each to hold
office until his or her successor is chosen and qualified or
until his or her 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 corporations 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
company, Thermedics Inc. ("Thermedics"), a manufacturer of
product quality assurance systems, detection equipment and
biomedical products, and Thermedics' parent company, Thermo
Electron Corporation ("Thermo Electron"), a diversified high
technology company, is reported under the caption "Stock
Ownership." All of the nominees are currently directors of the
Corporation.
Elias P. Dr. Gyftopoulos, 69, has been a director of
Gyftopoulos the Corporation since 1994. He is Professor
Emeritus at The Massachusetts Institute of
Technology, where he was the Ford Professor of
Mechanical Engineering and of Nuclear
Engineering for more than 20 years until his
retirement in 1996. Dr. Gyftopoulos is also a
director of Thermo Electron, Thermo
BioAnalysis Corporation, Thermo Cardiosystems
Inc., ThermoLase Corporation, Thermo
Remediation Inc., ThermoSpectra Corporation
and Trex Medical Corporation.
William W. Hoover Mr. Hoover, 65, has been a director of the
Corporation since 1986. Mr. Hoover is a
retired U.S. Air Force Major General and
former assistant secretary of the U. S.
Department of Energy. Since 1993, Mr. Hoover
has been president of Hoover Associates, a
consulting firm. Prior to 1993, Mr. Hoover
was executive vice president of Air Transport
Association of America, a position he held for
more than five years.
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Sandra L. Lambert Ms. Lambert, 42, has been a director of the
Corporation since 1990. Ms. Lambert has been
secretary of the Corporation since January
1991 and secretary and senior counsel of
Thermo Electron since July 1990. For more
than five years prior to that time, she was
associate general counsel of Thermo Electron.
Ms. Lambert also serves as clerk of
Thermedics.
Theo Mr. Melas-Kyriazi, 37, has been a director of
Melas-Kyriazi the Corporation since 1990. Mr. Melas-Kyriazi
was treasurer of the Corporation from January
1991 to September 1994 and was treasurer of
Thermo Electron from May 1988 to August 1994.
Since August 1994, he has served as president
and chief executive officer of ThermoSpectra
Corporation. Mr. Melas-Kyriazi is also a
director of Thermo Remediation Inc. and
ThermoSpectra Corporation.
Peter Richman Mr. Richman, 69, has been a director of the
Corporation since 1993. Mr. Richman was a
consultant to Thermedics and its subsidiaries,
including the Corporation, on corporate
development and acquisition strategies from
March 1993 to March 1995. For more than five
years prior to that time, he was president and
chief executive officer of KeyTek Instrument
Corp. Mr. Richman is also a director of
Thermo Sentron Inc.
John W. Wood Jr. Mr. Wood, 53, has been a director of the
Corporation and chairman of the board since
1990. Mr. Wood has been the chief executive
officer of the Corporation since 1992, and was
also the president of the Corporation from
1992 to February 1997. Mr. Wood has been a
senior vice president of Thermo Electron since
December 1995, and, prior to that promotion,
was a vice president of Thermo Electron since
September 1994. Mr. Wood has been president
and chief executive officer of Thermedics
since 1984. Mr. Wood is also a director of
Thermedics, Thermedics Detection Inc., Thermo
Cardiosystems Inc. and Thermo Sentron Inc.
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
Mr. Richman (Chairman) and Mr. Hoover. The Audit Committee
reviews the scope of the audit with the Corporation's independent
public accountants and meets with them for the purpose of
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reviewing the results of the audit subsequent to its completion.
The present members of the Human Resources Committee are Mr.
Hoover (Chairman) and Dr. Gyftopoulos. The Human Resources
Committee reviews the performance of senior members of
management, recommends executive compensation and administers the
Corporation's stock option and other 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 twice and the Human Resources Committee
met five 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.
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
directors' fees is made quarterly. Ms. Lambert, Mr.
Melas-Kyriazi and Mr. Wood are employees of Thermo Electron or
its subsidiaries 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
such meetings.
Deferred Compensation Plan
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 Thermedics 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 Thermedics 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 the Corporation's
Common Stock. When payable, amounts deferred may be disbursed
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solely in shares of Common Stock accumulated under the Deferred
Compensation Plan. A total of 56,250 shares of Common Stock have
been reserved for issuance under the Deferred Compensation Plan.
As of March 1, 1997, deferred units equal to 3,576.39 shares of
Common Stock were accumulated under the Deferred Compensation
Plan.
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Directors Stock Option Plan
The Corporation's directors stock option plan (the
"Directors Plan") provides for the grant of stock options to
purchase shares of Common Stock of the Corporation to outside
directors as additional compensation for their service as
directors. Under the Directors Plan, outside directors are
automatically granted options to purchase 1,000 shares of the
Common Stock annually at the close of business on the date of
each Annual Meeting of the Stockholders of the Corporation.
Options evidencing annual grants may be exercised at any time
from and after the six-month anniversary of the grant date of the
option and prior to the expiration of the option on the third
anniversary of the grant date. Shares acquired upon exercise of
the options are subject to repurchase by the Corporation at the
exercise price if the recipient ceases to serve as a director of
the Corporation or any other Thermo Electron company prior to the
first anniversary of the grant date.
The exercise price for options granted under the Directors
Plan is the average of the closing prices of the Common Stock as
reported on the American Stock Exchange (or other principal
market on which the Common Stock is then traded) for the five
trading days preceding and including the date of grant, or, if
the shares are not then traded, at the last price per share paid
by third parties in an arms-length transaction prior to the
option grant. As of March 1, 1997, options to purchase 17,550
shares of Common Stock were outstanding under the Directors Plan,
no options had lapsed or been exercised, and options to purchase
38,700 shares of Common Stock were available for future grant
under the Directors Plan.
Stock Ownership Policies for Directors
During 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
1996, which is described in "Committee Report on Executive
Compensation - Stock Ownership Policies."
In addition, the Committee adopted a policy requiring
directors to hold shares of the Corporation's 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
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executive officers and is described in "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 Thermedics, the
Corporation's parent company, and of Thermo Electron, Thermedics'
parent company, as of March 1, 1997, 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, (iii) each executive officer named in the summary
compensation table under the heading "Executive Compensation" and
(iv) all directors and current executive officers as a group.
While certain directors and executive officers of the
Corporation are also directors and executive officers of
Thermedics or Thermo Electron, all such persons disclaim
beneficial ownership of the shares of Common Stock owned by
Thermedics or Thermo Electron.
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<TABLE>
Thermo Thermo
Voltek Thermedics Electron
Name Corp. (2) Inc. (3) Corporation
(4)
<S> <C> <C> <C>
Thermedics Inc. (5) 7,548,186 N/A N/A
Dominick R. Congiusti 26,092 14,143 11,413
Elias P. Gyftopoulos 3,750 4,500 71,070
William W. Hoover 23,394 0 0
Sandra L. Lambert 1,912 9,987 78,292
Theo Melas-Kyriazi 7,498 21,128 159,073
Michael D. Norton 94,776 19,350 26,120
Peter Richman 53,226 8,000 3,300
John W. Wood Jr. 93,071 175,347 263,199
All directors and current 352,249 338,298 1,284,339
executive
officers as a group (11
persons)
</TABLE>
(1) Except as reflected in the footnotes to this table, shares
beneficially owned consist of shares owned by the indicated
person or by that person for the benefit of minor children and
all share ownership includes sole voting and investment power.
(2) Shares of the Common Stock shown in the table reflect a
three-for-two split of such stock distributed in August 1996 in
the form of a 50% stock dividend. Shares beneficially owned by
Mr. Congiusti, Dr. Gyftopoulos, Mr. Hoover, Mr. Melas-Kyriazi,
Mr. Norton, Mr. Richman, Mr. Wood and all directors and
executive officers as a group include 24,698, 3,750, 18,296,
7,498, 82,950, 40,650, 78,450 and 298,790 shares, respectively,
that such person or group has the right to acquire within 60 days
of March 1, 1997, through the exercise of stock options. Shares
beneficially owned by Mr. Richman and all directors and executive
officers as a group include 3,576 shares allocated through March
1, 1997, to his account maintained under the Corporation's
deferred compensation plan for directors. No director or
executive officer beneficially owned more than 1% of the Common
Stock outstanding as of March 1, 1997; all directors and
executive officers as a group beneficially owned 3.5% of the
Common Stock outstanding as of such date.
(3) Shares of the Common Stock shown in the table reflect a
three-for-two split of such stock distributed in August 1996 in
the form of a 50% stock dividend. Shares of the common stock of
Thermedics beneficially owned by Mr. Congiusti, Dr. Gyftopoulos,
Ms. Lambert, Mr. Melas-Kyriazi, Mr. Norton, Mr. Richman, Mr. Wood
and all directors and executive officers as a group include
12,100, 4,500, 8,000, 20,000, 19,350, 4,500, 125,500 and 262,950
shares, respectively, that such person or member of the group has
the right to acquire within 60 days of March 1, 1997, through the
exercise of stock options. Shares beneficially owned by Ms.
Lambert, Mr. Melas-Kyriazi, and all directors and executive
officers as a group include 843, 984 and 4,588 full shares,
respectively, allocated through March 1, 1997, 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 are executive officers of Thermo
Electron (the "ESOP"). Shares of the common stock of Thermo
Voltek Corp. beneficially owned by Mr. Wood include 2,600 shares
held in trust for the benefit of two children. The directors and
executive officers did not individually or as a group
beneficially own more than 1.0% of Thermedics common stock
outstanding as of March 1, 1997.
(4) The shares of the 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
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common stock of Thermo Electron beneficially owned by Mr.
Congiusti, Dr. Gyftopoulos, Ms. Lambert, Mr. Melas-Kyriazi, Mr.
Norton, Mr. Wood and all directors and executive officers as a
group include 9,900, 9,375, 73,346, 116,772, 25,837, 227,658 and
990,147 shares, respectively, that such person or member of the
group has the right to acquire within 60 days of March 1, 1997,
through the exercise of stock options. Shares beneficially owned
by Ms. Lambert, Mr. Melas-Kyriazi and all directors and executive
officers as a group include 849, 969 and 5,076 full shares,
respectively, allocated through March 1, 1997, to their
respective accounts maintained pursuant to Thermo Electron's
ESOP. The directors and executive officers did not individually
or as a group beneficially own more than 1% of the Thermo
Electron common stock outstanding as of March 1, 1997.
(5) Shares beneficially owned by Thermedics include 2,463,353
shares that Thermedics had the right to acquire within 60 days of
March 1, 1997, through the conversion of certain convertible
notes of the Corporation held by Thermedics. As of March 1,
1997, Thermedics beneficially owned 63.9% of the outstanding
Common Stock. Thermedics' address is 470 Wildwood Street,
Woburn, Massachusetts 01888-1799. As of March 1, 1997,
Thermedics' had the power to elect all of the members of the
Corporation's Board of Directors. Thermedics is a majority-owned
subsidiary of Thermo Electron and therefore, Thermo Electron may
be deemed a beneficial owner of the shares of Common Stock
beneficially owned by Thermo Instrument. 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
Thermedics and its parent company, 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 1996, except in the following
instances. Thermedics filed five Forms 4 late, reporting a
total of 18 transactions, consisting of 16 open market purchases
of shares of Common Stock, an additional acquisition of shares of
Common Stock through a merger with another entity, and the
conversion of a derivative security held by Thermedics into
shares of Common Stock. Thermo Electron filed eight Forms 4
late, reporting a total of 40 transactions, including the 18
transactions described above for Thermedics, an additional 19
open market purchases of shares of Common Stock and three grants
to employees of options to purchase shares of Common Stock as
part of its stock option plan.
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EXECUTIVE COMPENSATION
NOTE: All share amounts reported below have, in all cases, been
adjusted as applicable to reflect three-for-two stock splits with
respect to the Common Stock of the Corporation and common stock
of Thermo Electron, distributed in August 1996 and June 1996,
respectively, each in the form of a 50% stock dividend.
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 and its two other
most highly compensated executive officers for the last three
fiscal years. No other executive officer of the Corporation met
the definition of "highly compensated" within the meaning of the
Securities and Exchange Commission's executive compensation
disclosure rules.
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.
<TABLE>
Summary Compensation Table
Long Term
Compensation
Securities
Underlying
Annual Options (No. of
Name and Fiscal Compensation Shares All Other
Principal Position Year Salary Bonus and Company) (1) Compensation
(2)
<S> <C> <C> <C> <C> <C>
John W. Wood Jr. 1996 $19,500 $17,200 2,100(TVL) $6,750
(3)
Chief Executive 1995 $18,000 $16,000 1,350(TVL) $6,750
Officer
1994 $24,750 $1,905 -- $6,639
Michael D. Norton 1996 $119,000 $60,000 2,550(TVL) $6,346(4)
Vice President 150(TMO)
1995 $114,000 $49,000 1,650(TVL) $6,387
10,500(TMO)
1994 $110,000 $20,250 11,250(TMO) $4,436
800(THS)
Dominick R. 1996 $98,009 $10,000 900(TVL) $5,353
Congiusti (4)
Vice President 150(TMO)
1995 $95,014 $21,000 300(TVL) $5,621
7,500(TMO)
1994 $90,000 $30,000 7,500(TVL) $3,914
2,250(TMO)
</TABLE>
(1) In addition to grants of options to purchase shares of
Common Stock of the Corporation (designated in the table as TVL),
the named executive officers of the Corporation have been granted
options to purchase 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 last three
fiscal years in the following Thermo Electron companies:
Thermedics (designated in the table as TMD, Thermo Electron
(designated in the table as TMO) and ThermoSpectra Corporation
(designated in the table as THS).
(2) 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.
(3) Mr. Wood is a senior vice president of Thermo Electron and
the president and chief executive officer of Thermedics, and has
served as the Corporation's president and chief executive officer
of the Corporation for the last three fiscal years. A portion of
Mr. Wood's annual cash compensation (salary and bonus) has been
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allocated to and paid by each of Thermo Electron and Thermedics
in each of the last three fiscal years as compensation for the
services provided to these companies based on the time he devoted
to his responsibilities as a senior vice president of Thermo
Electron or as president and chief executive officer of
Thermedics. The annual cash compensation (salary and bonus)
reported in the table for Mr. Wood represents the amount paid
from all sources, including the Corporation, solely for Mr.
Wood's services as chief executive officer of the Corporation.
For 1996, 1995 and 1994, 10%, 10% and 15%, respectively, of Mr.
Wood's annual cash compensation (salary and bonus) was allocated
to the Corporation for his service as the Corporation's chief
executive officer. In addition, Mr. Wood has been granted
options to purchase common stock of Thermo Electron and certain
of its subsidiaries other than the Corporation from time to time
by Thermo Electron or such other subsidiaries. These options are
not reported here as they were granted as compensation for
service to Thermo Electron companies in capacities other than in
his capacity as chief executive officer of the Corporation.
(4) In addition to the matching contribution referred to in
footnote (2), such amount includes $1,002 of compensation
attributable to an interest-free loan provided to Mr. Norton
pursuant to the Corporation's Stock Holding Assistance Plan. See
"Relationship with Affiliates - Stock Holding Assistance Plan."
(4) Mr. Congiusti was named an executive officer of the
Corporation in December 1994. Compensation is reported for Mr.
Congiusti for the entire 1994 fiscal year.
Stock Options Granted During Fiscal 1996
The following table sets forth information concerning
individual grants of stock options made during fiscal 1996 to the
Corporation's chief executive officer and the other 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.
<TABLE>
Option Grants in Fiscal 1996
Percent Potential
of Realizable
Total Value at
Number of Options Assumed Annual
Securities Granted Rates of Stock
Underlying to Price
Options Employees Exercise Expira- Appreciation
Granted in Fiscal Price tion for Option
Name (1) Year(2) PerShare Date Term
5% 10%
<C> <C> <C> <C> <C> <C> <C>
John W. 2,100 (TVL) 1.8% $12.78 03/07/99 $4,221 $8,883
Wood,
Jr.(4)
Michael D. 2,550 (TVL) 2.1% $12.78 03/07/99 $5,126 $10,787
Norton
150 (TMO) 0.01%(3) $42.79 05/22/99 $1,011 $2,124
Dominick R. 900 (TVL) 0.8% $12.78 03/07/99 $1,809 $3,807
Congiusti
150 (TMO) 0.01%(3) $42.79 05/22/99 $1,011 $2,124
</TABLE>
(1) In addition to grants of options to purchase Common Stock of
the Corporation (designated in the table as TVL), the named
executive officers of the Corporation have been granted options
to purchase common stock of Thermo Electron (designated in the
table as TMO) as part of Thermo Electron's stock option program.
All of the options granted during the fiscal year are immediately
exercisable at the date of grant. In all cases, the shares
acquired upon exercise are subject to repurchase by the granting
companies at the exercise price if the optionee ceases to be
employed by such corporation or any other Thermo Electron
company. The granting corporation may exercise its repurchase
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rights within six months after the termination of the optionee's
employment. For 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
granting corporation or another Thermo Electron company. The
granting corporations may permit the holders of 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.
(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 under stock option plans
maintained by Thermo Electron or a subsidiary and accordingly are
reported as a percentage of total options granted to employees of
Thermo Electron and its subsidiaries.
(4) Mr. Wood has also served as an officer of Thermo Electron
since 1994 and the chief executive officer of Thermedics since
1984 and has been granted options to purchase common stock of
Thermo Electron and certain of its subsidiaries other than the
Corporation. These options are not reported in this table as
they were granted as compensation for service to other Thermo
Electron companies in capacities other than his capacity as the
chief executive officer of the Corporation.
Stock Options Exercised During Fiscal 1996
The following table reports certain information regarding
stock option exercises during fiscal 1996 and outstanding stock
options held at the end of fiscal 1996 by the Corporation's chief
executive officer and the executive officers named in the Summary
Compensation Table. No stock appreciation rights were exercised
or were outstanding during fiscal 1996.
<TABLE>
Aggregated Option Exercises In Fiscal 1996 And
Fiscal 1996 Year-End Option Values
Number of
Unexercised
Shares Options at
Acqui- Fiscal Year- Value of
red on End (Exercis- Unexercised
Exer- Value able/Unexer- In-the-Money
Name Company cise Realizedcisable)(1) Options
<S> <C> <C> <C> <C> <C> <C> <C>
John W. Thermo 8,623 $61,645 78,450 /-- $319,074 /--
Wood, Jr. Voltek
(2)
Michael D. Thermo -- -- 82,950 /-- $507,020 /--
Norton Voltek
Thermo 1,006 $22,243 26,519 /--(3) $367,090 /--
Electron
Therme- 3,905 $72,878 22,345 /-- $105,988 /--
dics
Thermo -- -- 800 /-- $1,500 /--
Spectra
Dominick R. Thermo 2,000 $21,700 24,698 /-- $135,650 /--
Congiusti Voltek
Thermo -- -- 9,900 /-- $95,926 /--
Electron
Therme 2,400 $54,120 12,100 /-- $35,323 /--
-dics
</TABLE>
(1) All of the options reported outstanding at the end of the
fiscal year are immediately exercisable as of the end of the
fiscal year. The shares acquired upon exercise of the options
16
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<PAGE>
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 any other Thermo Electron
company. The granting corporation may exercise its repurchase
rights within six months after the termination of the optionee's
employment. 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.
(2) Mr. Wood also holds other unexercised options to purchase
common stock of Thermo Electron and its subsidiaries other than
the Corporation. These options are not reported here as they
were granted as compensation for service to other Thermo Electron
companies in capacities other than his capacity as chief
executive officer of the Corporation.
(3) Options to purchase 11,250 shares of the common stock of
Thermo Electron granted to Mr. Norton are subject to the same
terms as 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.
Pension Plan
The Corporation maintains a non-contributory defined benefit
plan for full-time employees of its Universal Voltronics
division, including officers and other salaried employees meeting
certain age and service requirements. Mr. Congiusti is the only
executive officer of the Corporation who participates in the
plan. The plan provides for payments in the event of normal,
early or deferred retirement, or total and permanent disability
or death. The plan also provides for the payment of benefits to
an employee's surviving spouse or designated beneficiary.
Covered compensation under this plan consists of salaries and
bonuses. Effective as of December 31, 1993, no additional
benefits have been accrued on behalf of any plan participant.
The following table sets forth the estimated annual benefits
payable under the plan upon retirement to employees of Universal
Voltronics in specified compensation and years-of-service
classifications. The estimated benefits at certain compensation
levels reflect the statutory limits on compensation that can be
recognized for plan purposes. Such limit is currently $150,000
per year.
17
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<PAGE>
<TABLE>
Years of Service
AnnualCompensation 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$ 75,000 $15,187 $20,250 $25,312 $25,312 $25,312
$100,000 $20,250 $27,000 $33,750 $33,750 $33,750
$125,000 $25,313 $33,750 $42,188 $42,188 $42,188
$150,000 $30,375 $40,500 $50,625 $50,625 $50,625
</TABLE>
Each eligible employee receives a monthly retirement
benefit, beginning at normal retirement age (65), based on a
percentage (1.35%) of the average monthly compensation of such
employee as of December 31, 1993, multiplied by years of service
(up to a maximum of 25 years) as of December 31, 1993, less
benefits paid upon cancellation of the Corporation's predecessor
pension plan. Benefits are reduced for retirement before normal
retirement age. Average monthly compensation is generally
defined as average monthly compensation over the five years of
highest compensation in the ten-year period preceding retirement.
The benefits shown in the above table are subject to reduction
for Social Security benefits. The plan benefits shown are
payable during the employee's lifetime unless the employee elects
another form of benefit that provides death benefit protection.
For Mr. Congiusti, the only executive officer who participates in
the plan, the compensation recognized for plan purposes is
$87,593, and the credited years of service for Mr. Congiusti was
three years as of December 31, 1993.
Severance Agreements
In 1988, Thermo Electron entered into severance agreements
with several of its key employees, including key employees of the
Corporation and other majority-owned subsidiaries. These
agreements provide severance benefits if there is a change of
control of Thermo Electron that is not approved by the board of
directors of Thermo Electron and the employee's employment with
Thermo Electron or the majority-owned subsidiary is terminated,
for whatever reason, within one year thereafter. For purposes of
the agreement a change of control exists upon (i) the acquisition
of 50% or more of the outstanding common stock of Thermo Electron
by any person without the prior approval of the board of
directors of Thermo Electron, (ii) the failure of the board of
directors of Thermo Electron, within two years after any
contested election of directors or tender or exchange offer not
approved by the board of directors, to be constituted of a
majority of directors holding office prior to such event or (iii)
any other event that the board of directors of Thermo Electron
determines constitutes an effective change of control of Thermo
Electron. Each of the recipients of these agreements would
receive a lump-sum benefit at the time of a qualifying severance
equal to the highest total cash compensation paid to the employee
by Thermo Electron or the majority-owned subsidiary in any
12-month period during the three years preceding the severance
event. A qualifying severance exists if (i) the employment of the
executive officer is terminated for any reason within one year
after a change in control of Thermo Electron or (ii) a group of
directors of Thermo Electron consisting of directors of Thermo
Electron on the date of the severance agreement or, if an
election contest or tender or exchange offer for Thermo
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<PAGE>
Electron's common stock has occurred, the directors of Thermo
Electron immediately prior to such election contest or tender or
exchange offer, and any future directors who are nominated or
elected by such directors, determines that any other termination
of the executive officer's employment should be treated as a
qualifying severance. The benefits to be provided are limited so
that the payments would not constitute so-called "excess
parachute payments" under applicable provisions of the Internal
Revenue Code of 1986. Assuming that severance benefits would have
been payable under these agreements as of March 1, 1997, Mr. Wood
would have received approximately $367,000.
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 company, 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 500
Index, but do not necessarily correspond to the companies
included in the Corporation's peer group index, the Dow Jones
Total Return Index for the Electrical Components and Equipment
Industry Group.
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
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<PAGE>
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 process for determining each of these elements for the
Corporation's executive 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. The salary increases in 1996 for the chief
executive officer and the other named executive officers
generally reflect this practice of gradual increases and
moderation.
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 as 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 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
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<PAGE>
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 vary among
the executives, depending on their roles and responsibilities
within the organization.
The bonuses for named executive officers approved by the
Committee with respect to 1996 performance in each instance
exceeded the median potential bonus.
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 the
parent corporation, Thermo Electron, and the other majority-owned
subsidiaries of 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 purchase shares of Common Stock to all employees over a
five-year period below 12% of the 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.
In 1996, the Committee granted options to purchase Common
Stock of the Corporation to the chief executive officer and the
other named executive officers based on their holdings of such
stock and vested rights to acquire such stock throughout the
year, which the Committee considers each year. The option awards
made to the named executive officers in 1996 with respect to the
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<PAGE>
common stock of Thermo Electron was determined by the human
resources committee of the board of directors of the granting
company under a similar program.
Other discretionary 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 with
the organization), as well as the value of previously awarded
options as described above, in determining discretionary option
awards. The Committee made no such discretionary awards to the
named executive officers in 1996.
Stock Ownership Policies
During 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
one times his base salary and reference bonus for the calendar
year. For all other 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 upon the
earlier of demand or the fifth anniversary of the date of the
loan, unless otherwise authorized by the Committee. In 1996,
Mr. Michael D. Norton, a vice president of the Corporation,
received a loan in the amount of $65,166.00. See "Relationship
with Affiliates - Stock Holding Assistance 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 surrendered to satisfy tax withholding
obligations attributable to the exercise of the options.
Policy on Deductibility of Compensation
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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" or is otherwise exempt from
Section 162(m). The annual compensation paid to individual
executives does not approach the $1 million threshold, and it is
believed that 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
The salary and bonus of Mr. Wood is established using the
same criteria as for the salaries and bonuses for the
Corporation's other executive officers. However, the cash
compensation for Mr. Wood is reviewed and established by the
human resources committee of the board of directors of Thermo
Electron, due to Mr. Wood's position and responsibilities as a
senior vice president of that company. The Corporation's
Committee reviews the total annual cash compensation of Mr. Wood
determined by the Thermo Electron committee and agrees to an
allocation of such annual cash compensation to the Corporation,
taking into account Mr. Wood's relative responsibilities at the
Corporation and other Thermo Electron companies. The Committee
agreed to an allocation of approximately 10% of Mr. Wood's 1996
cash compensation to the Corporation.
In 1996, the Committee also approved stock option awards to
Mr. Wood with respect to the Corporation's Common Stock. The
Committee annually considers an award of stock options to
executive officers of the Corporation, which are generally based
upon the number of shares of Common Stock and unexercised, vested
stock options held by the executive during the year, as an
incentive for executives to buy and hold Common Stock. The award
of stock options to purchase share of Common Stock to Mr. Wood in
1996 was made under this program.
Mr. William W. Hoover (Chairman)
Dr. Elias P. Gyftopoulos
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
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Corporation has compared its performance with the American Stock
Exchange Market Value Index and the Dow Jones Total Return Index
for the Electrical Components and Equipment Industry Group.
Comparison of 1991-1996 Total Return Among Thermo Voltek
Corporation,
the American Stock Exchange Market Value Index and the
Dow Jones Total Return Index for the Electrical Components and
Equipment Industry Group
GRAPH APPEARS HERE
12/31/9112/31/92 12/31/9312/30/94 12/29/95 12/27/96
TVL 100 82 171 155 290 304
AMEX 100 101 121 110 139 147
DJECEI 100 101 110 115 150 185
The total return for the Corporation's Common Stock (TVL),
the American Stock Exchange Market Value Index (AMEX) and the Dow
Jones Total Return Index for the Electrical Components and
Equipment Industry Group (DJECEI) 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 "TVL."
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 subsidiaries.
Thermedics has created Thermedics Detection Inc., Thermo
Cardiosystems Inc. and Thermo Sentron Inc. as publicly held
subsidiaries, and has acquired the majority interest in the
Corporation, which until 1990 was an unaffiliated public company.
From time to time, Thermo Electron and its subsidiaries will
create other majority-owned subsidiaries as part of its spinout
strategy. (The Corporation and such other majority-owned Thermo
Electron subsidiaries are hereinafter referred to as the "Thermo
Subsidiaries.")
Thermo Electron and each of the Thermo Subsidiaries
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 have adopted the Thermo Electron Corporate Charter
(the "Charter") to define the relationships and delineate the
24
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<PAGE>
nature of such cooperation among themselves. The purpose of the
Charter is to ensure that (1) all of the companies and their
stockholders 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 or other 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 determining 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, can withdraw from participation in the Charter
upon 30 days' prior 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
and tax allocation agreement (if any) in effect between the
withdrawing company and Thermo Electron. The withdrawal from
25
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<PAGE>
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, the Corporation and Thermo
Electron 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, employee benefit
administration, tax advice and preparation of tax returns,
centralized cash management and financial and other services to
the Corporation. The Corporation was assessed an annual fee equal
to 1.0% of the Corporation's revenues for these services for
calendar 1996. The fee is reviewed annually and may be changed
by mutual agreement of the Corporation and Thermo Electron.
During fiscal 1996, Thermo Electron assessed the Corporation
$485,000 in fees under the Services Agreement. Management
believes that the charges under the Services Agreement are
reasonable and that the terms of the Services Agreement are fair
to the Corporation. For items such as employee benefit plans,
insurance coverage and other identifiable costs, Thermo Electron
charges the Corporation based on charges 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.
As of December 28, 1996, $16,623,000 of the Corporation's
cash equivalents were invested in 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, government and agency securities, money market
funds, certificates of deposit 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 and have a
26
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<PAGE>
maturity of three months or less. 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.
Thermedics holds two subordinated convertible notes of the
Corporation. One is in the principal amount of $6.0 million,
bears interest at a rate of 6/%, is due 2002 and is convertible
into Common Stock at a conversion price of $4.27 per share (the
"6/% Note"). The other note is in the principal amount of $4
million, bears interest at a rate of 5%, is due 2003 and is
convertible into Common Stock at a conversion price of $3.78 per
share (the "5% Note").
Thermo Electron and Thermedics owned of record approximately
0.5% and 51%, respectively, of the Corporation's outstanding
Common Stock on December 28, 1996. In January 1996, Thermedics
acquired 315,199 shares of the Corporation's Common Stock, or
approximately 6.5% of the Corporation's outstanding Common Stock,
from Thermo Electron. Thermedics intends for the foreseeable
future to maintain at least 50% ownership of the Corporation.
This may require the purchase by Thermedics of additional shares
of the Corporation's Common Stock from time to time as the number
of outstanding shares issued by the Corporation increases. These
purchases may be made either on the open market or directly from
the Corporation, at prevailing market prices, or pursuant to
conversion of the 6/% Note or the 5% Note.
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 purchase Common Stock in the open market.
In 1996, Mr. Michael D. Norton, a vice president of the
Corporation, received a loan in the amount of $65,166.00 under
this plan to purchase 5,000 shares of Common Stock. The loan is
required to be repaid upon the earlier of demand or the fifth
anniversary of the date of the loan, unless otherwise authorized
by the Committee.
- PROPOSAL 2-
PROPOSAL TO INCREASE THE SHARES AVAILABLE FOR ISSUANCE UNDER THE
CORPORATION'S EQUITY INCENTIVE PLAN
The Board of Directors has an approved amendment to the
Corporation's equity incentive plan (the "Equity Incentive Plan")
that would increase the number of shares of Common Stock
available for issuance under the Equity Incentive Plan by 300,000
shares. The increase in shares is being recommended to the
Stockholders for their approval at the Meeting.
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The Equity Incentive Plan was first approved by the
Stockholders in 1994. As of March 1, 1997 and before giving
effect to the proposed increase, options to purchase 254,450
shares of Common Stock were outstanding under the Equity
Incentive Plan, options to purchase 21,300 shares of Common Stock
had been exercised and options to purchase 39,100 shares had
lapsed or been cancelled. As of March 1, 1997, options to
purchase 23,250 shares were available for future grant under the
Equity Incentive Plan.
The Board of Directors believed that the shares available
for future grant under the Equity Incentive Plan were not
sufficient to fund the Corporation's stock-based incentive
program and increased the number of shares reserved for future
grant by 300,000 shares in March 1997, subject to Stockholder
approval. It has been the Committee's objective to award net
options to purchase up to 12% of the outstanding Common Stock
over a five-year period. The options outstanding and the shares
remaining available for future grant under the Equity Incentive
Plan represent approximately 2.8 % of the outstanding Common
Stock as of April 7, 1997. After giving effect to the increase,
the options outstanding and shares available for future grant
would represent approximately 5.8 % of the outstanding Common
Stock. The Board of Directors believes that it is in the
Corporation's best interest to be able to continue to grant
stock-based incentives to its key employees, executive officers
and directors.
Summary of the Equity Incentive Plan
The following summary of the terms of the Equity Incentive
Plan is qualified in its entirety by reference to the plan.
Administration; Eligible Participants
The Equity Incentive Plan is administered by the Board of
Directors of the Corporation (the "Board"). The Board has full
power to select, from among the persons eligible for awards, the
individuals to whom awards will be granted, to make any
combination of awards to any participant, and to determine the
specific terms of each award, including terms and conditions
relating to events of merger, consolidation, dissolution and
liquidation, change of control, acceleration of vesting or lapse
of restrictions, vesting, forfeiture, other restrictions,
dividends and interest on deferred amounts. The Board also has
the power to waive compliance by participants with the terms and
conditions of awards, to cancel awards with the consent of
participants and to accelerate the vesting or lapse of any
restrictions of any award. The Board does not have the authority
under the Equity Incentive Plan to reprice outstanding option
awards or to grant stock appreciation rights. The Board may
delegate any or all of its responsibilities under the Equity
Incentive Plan to a committee appointed by the Board consisting
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of two or more "non-employee" directors within the meaning of
Rule 16b-3 (or any successor rule) under the Securities Exchange
Act of 1934, as amended (the Exchange Act").
Employees and directors of, and consultants to, the
Corporation and its subsidiaries, or other persons who are
expected to make significant contributions to the growth and
success of the Corporation and its subsidiaries, selected by the
Board, are eligible to participate in the Equity Incentive Plan.
Approximately 300 persons are eligible to participate in the
existing plan of the Corporation.
Shares Subject to the Incentive Plan; Use of Proceeds
The number of shares of the Common Stock currently reserved
for future issuance under the Equity Incentive Plan, before
giving effect to the proposed increase, is currently 277,700
shares, and if the increase is approved, the number of shares
reserved for future issuance under the plan would increase to
577,700 shares. The number of shares reserved under the Equity
Incentive Plan is subject to adjustment for stock splits and
similar events. Awards and shares that are forfeited, reacquired
by the Corporation, satisfied by a cash payment by the
Corporation or otherwise satisfied without the issuance of Common
Stock are not counted against the maximum number of reserved
shares under the plan.
The proceeds received by the Corporation from transactions
under the Equity Incentive Plan will be used for the general
purposes of the Corporation. Shares issued under the Equity
Incentive Plan may be authorized but unissued shares, or shares
reacquired by the Corporation and held in its treasury.
Types of Awards; Limitations on Awards
The Equity Incentive Plan permits the Board to grant a
variety of stock and stock-based awards in such form or in such
combinations as may be approved by the Board. Without limiting
the foregoing, the types of awards may include stock options,
restricted and unrestricted shares, rights to receive cash or
shares on a deferred basis or based on performance, cash payments
sufficient to offset the federal, state and local ordinary income
taxes of participants resulting from transactions under the
Equity Incentive Plan, and loans to participants in connection
with awards. The Board may not, however, grant in excess of 1%
of the outstanding shares of Common Stock (calculated as of the
beginning of a calendar year) to any recipient under any award or
combination of awards granted during a calendar year.
Stock Options
Awards under the Equity Incentive Plan may be in the form of
stock options, which entitle the recipient, on exercise, to
purchase shares of Common Stock at a specified exercise price.
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Stock options granted under the plan may be either stock options
that qualify as incentive stock options ("incentive stock
options") under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Internal Revenue Code"), or stock options that
are not intended to meet such requirements ("non-statutory
options"). The exercise price of each option is determined by
the Board, but may not be less than 85% of the fair market value
per share of Common Stock on the date of grant.
The term of each option will be fixed by the Board. The
Board will also determine at what time each option may be
exercised. Options may be made exercisable in installments, and
the exercisability of options may be accelerated by the Board.
The Board may, in its discretion, provide that upon exercise of
any option, instead of receiving shares free from restrictions
under the Equity Incentive Plan, the option holder will receive
shares of restricted stock or deferred stock awards.
The exercise price of options granted under the Equity
Incentive Plan must be paid in full by check or other instrument
acceptable to the Board or, if the Board so determines, by
delivery of shares of Common Stock held by the option holder for
at least six months (unless the Board expressly approves a
shorter period) and that have a fair market value on the exercise
date equal to the exercise price of the option, by delivery of a
promissory note from the option holder to the Corporation payable
on terms acceptable to the Board, by delivery of an unconditional
and irrevocable undertaking by a broker to deliver sufficient
funds to the Corporation to pay the exercise price, or some
combination of these methods.
Incentive stock options must meet certain additional
requirements in order to qualify as incentive stock options under
the Internal Revenue Code. Incentive stock options may be
granted only to employees of the Corporation and its
subsidiaries. The exercise price of an incentive stock option
may not be less than 100% of the fair market value of the shares
on the date of grant. An incentive stock option may not be
granted under the Equity Incentive Plan after the tenth
anniversary of the date the Board adopted the Equity Incentive
Plan and the latest date on which an incentive stock option may
be exercised is ten years from the date of its grant. In
addition, the Internal Revenue Code limits the value of shares
subject to incentive stock options that may become exercisable
annually by any option holder in a given year, and requires a
shorter exercise period and a higher minimum exercise price in
the case of Stockholders owning more than ten percent (10%) of
the Corporation's Common Stock.
Restricted Stock and Unrestricted Stock
The Board may also award shares of Common Stock subject to
such conditions and restrictions as it may determine ("restricted
stock"). The purchase price of shares of restricted stock shall
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be determined by the Board, but may not be less than the par
value of those shares. In addition, the Board may not grant in
excess of 10% of the shares reserved under the Equity Incentive
Plan in the form of restricted stock.
Generally, if a participant who holds shares of restricted
stock fails to satisfy such restrictions or other conditions as
may be determined by the Board (such as continuing employment for
a given period) prior to the lapse or waiver of the restrictions,
the Corporation will have the right to require the forfeiture or
repurchase of the shares in exchange for an amount, if any,
determined by the Board as specifically set forth in the
instrument evidencing the award. The Board may at any time waive
such restrictions or accelerate the date or dates on which the
restrictions will lapse. Prior to the lapse of restrictions on
shares of restricted stock, the recipient will have all the
rights of a Stockholder with respect to the shares, including
voting and dividend rights, subject only to the conditions and
restrictions generally applicable to restricted stock or
specifically set forth in the instrument evidencing the award.
The Board may also grant shares that are free from any
restrictions under the Equity Incentive Plan ("unrestricted
stock"). Unrestricted stock may be issued in recognition of
services or in such other circumstances that the Board deems to
be in the best interests of the Corporation.
Deferred Stock
The Board may also make deferred stock awards under the
Equity Incentive Plan which entitle the recipient to receive
shares of Common Stock in the future. Delivery of Common Stock
will take place on such date or dates and on such conditions as
the Board specifies. The Board may at any time accelerate the
date on which delivery of all or any part of the Common Stock
will take place or otherwise waive any restrictions on the award.
Performance Awards
The Board may also grant performance awards entitling the
recipient to receive shares of Common Stock or cash in such
combinations as it may determine following the achievement of
specified performance goals. Payment of the performance award
may be conditioned on achievement of individual or Corporation
performance goals over a fixed or determinable period or on such
other conditions as the Board shall determine.
Loans and Supplemental Grants
The Board may authorize a loan from the Corporation to a
participant either on or after the grant of an award to the
participant. Loans, including extensions, may be for any term
specified by the Board, may be either secured or unsecured, and
may be with or without recourse against the participant in the
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event of default. Each loan shall be subject to such terms and
conditions and shall bear such rate of interest, if any, as the
Board shall determine. In connection with any award, the Board
may, at the time such award is made or at a later date, provide
for and make a cash payment to the participant in an amount equal
to (a) the amount of any federal, state and local income tax on
ordinary income for which the participant will be liable with
respect to the award, plus (b) an additional amount on a
grossed-up basis necessary to make him or her whole after payment
of the amount described in (a).
Payment of Purchase Price
Except as otherwise provided in the Equity Incentive Plan,
the purchase price of Common Stock or other rights acquired or
granted pursuant to such plan shall be determined by the Board,
provided that the purchase price of Common Stock shall not be
less than its par value. The Board may determine the method of
payment for Common Stock acquired pursuant to the Equity
Incentive Plan and may determine that all or any part of the
purchase price has been satisfied by past service rendered by the
recipient of an award. The Board may, upon the request of a
participant, defer the date on which payment under any award will
be made.
Change in Control Provisions
Unless otherwise provided in the agreement evidencing an
award, if there is a "Change in Control" of the Corporation as
defined in the Equity Incentive Plan, any stock options that are
not then exercisable and fully vested will become fully
exercisable and vested; the restrictions applicable to restricted
stock awards will lapse and shares issued pursuant to such awards
will be free of restrictions and fully vested; and deferral and
other limitations and conditions that related solely to the
passage of time or continued employment or other affiliation will
be waived and removed but other conditions will continue to apply
unless otherwise provided in the instrument evidencing the awards
or by agreement between the participant and the Corporation.
Generally, a "Change of Control" occurs if (1) any person other
than Thermo Electron becomes the beneficial owner of 50% or more
of the outstanding Common Stock of the Corporation, or any person
becomes the benefial owner of 25% or more of the outstanding
Common Stock of Thermedics or Thermo Electron, without the prior
approval of the Board, or the board of directors of Thermedics or
Thermo Electron, as the case may be, (2) during any two-year
period the individuals who constituted the Board or the board of
directors of Thermedics or Thermo Electron at the beginning of
such period no longer represent a majority of such board or (3)
the Board or the board of directors of Thermedics or Thermo
Electron determines that any other event constitutes an
effective change in control of the Corporation.
Nature of Rights as Stockholder Under the Equity Incentive Plan
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Except as specifically provided by the Equity Incentive
Plan, the receipt of an award will not give a participant rights
as a Stockholder. The participant will obtain such rights,
subject to any limitations imposed by the plan or the instrument
evidencing the award, upon actual receipt of Common Stock.
Adjustments for Stock Dividends, etc.
The Board will make appropriate adjustments to the maximum
number of shares of Common Stock that may be delivered under the
Equity Incentive Plan, and under outstanding awards, to reflect
stock dividends, stock splits and similar events. The Board may
also make appropriate adjustments to avoid distortions in the
operation of the Equity Incentive Plan.
Amendment and Termination
The Equity Incentive Plan shall remain in full force and
effect until terminated by the Board. The Board may at any time
or times amend or review the Equity Incentive Plan or any
outstanding award for any purpose which may at the time be
permitted by law, or may at any time terminate the plan as to any
further grants of awards. No amendment of the Equity Incentive
Plan or any outstanding award may adversely affect the rights of
a participant as to any previously granted award without his or
her consent. Stockholder approval of amendments shall be
required only as is necessary to satisfy the then-applicable
requirements of Rule 16b-3 (or any successor rule), of stock
exchanges or of any federal tax law or regulation relating to
incentive stock options.
Stock Withholding
In the case of an award under which Common Stock may be d
delivered, the Board may permit the participant or other
appropriate person to elect to have the Corporation hold back
from the shares to be delivered, or to deliver to the
Corporation, shares of Common Stock having a value sufficient to
satisfy any federal, state and local withholding tax
requirements.
Federal Income Tax Consequences
The following is a summary of the principal current federal
income tax consequences of transactions under the Equity
Incentive Plan. It does not describe all federal tax
consequences under the Equity Incentive Plan, nor does it
describe state, local or foreign tax consequences.
Incentive Stock Options
No taxable income is realized by the optionee upon the grant
or exercise of an incentive stock option. However, the exercise
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of an incentive stock option may result in alternative minimum
tax liability for the optionee. If no disposition of shares
issued to an optionee pursuant to the exercise of an incentive
stock option is made by the optionee within the later of two
years from the date of grant or one year after the transfer of
such shares to the optionee, then upon the later sale of such
shares, for federal income tax purposes, any amount realized in
excess of the exercise price will be taxed to the optionee as a
long-term capital gain and any loss sustained will be a long-term
capital loss, and no deduction will be allowed to the
Corporation.
If the shares of Common Stock acquired upon the exercise of
an incentive stock option are disposed of prior to the expiration
of the two- and one-year holding periods described above,
generally the optionee will realize ordinary income in the year
of disposition in an amount equal to the excess (if any) of the
fair market value of the shares at exercise (or, if less, the
amount realized on an arms-length sale of such shares) over the
exercise price thereof, and the Corporation will be entitled to
deduct such amount. Any further gain realized will be taxed as
short- or long-term capital gain and will not result in any
deduction by the Corporation. Special rules will apply where all
or a portion of the exercise price of the incentive stock option
is paid by tendering shares of Common Stock.
If any incentive stock option is exercised at a time when it
no longer qualifies for the tax treatment described above, the
option is treated as a non-statutory stock option. Generally, an
incentive stock option will not be eligible for the tax treatment
described above if it is exercised more than three months
following termination of employment (one year following
termination of employment by reason of permanent and total
disability), except in certain cases where the incentive stock
option is exercised after the death of an optionee.
Non-statutory Options
With respect to non-statutory stock options granted under
the Equity Incentive Plan, no income is realized by the optionee
at the time the option is granted. Generally, at exercise,
ordinary income is realized by the optionee in an amount equal to
the difference between the option price and the fair market value
of the shares on the date of exercise, and the Corporation
receives a tax deduction for the same amount, and at disposition,
appreciation or depreciation after the date of exercise is
treated as either short- or long-term capital gain or loss
depending on how long the shares have been held.
Restricted Stock
A recipient of restricted stock (stock subject to
forfeiture provisions) generally will be subject to tax at
ordinary income rates on the fair market value of the stock at
the time the stock is either transferable or is no longer subject
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to forfeiture, less any amount paid for such stock. A
restriction only as to the time stock can be resold is not a
substantial risk of forfeiture, and therefore is not considered
restricted stock under this provision of the Equity Incentive
Plan. However, a recipient who so elects under Section 83(b) of
the Internal Revenue Code ("Section 83(b)") within 30 days of the
date of issuance of the restricted stock will realize ordinary
income on the date of issuance equal to the fair market value of
the shares of restricted stock at that time (measured as if the
shares were unrestricted and could be sold immediately), minus
any amount paid for such stock. If the shares subject to such
election are forfeited, the recipient will not be entitled to any
deduction, refund or ordinary loss for tax purposes with respect
to the forfeited shares. Upon sale of the shares after the
forfeiture period has expired, the appreciation or depreciation
after the shares become transferable or free from risk of
forfeiture (or, if a Section 83(b) election was made, since the
shares were issued) will be treated as long- or short-term
capital gain or loss. The holding period to determine whether
the recipient has long- or short-term capital gain or loss begins
when the forfeiture period expires (or upon the earlier issuance
of the shares, if the recipient elected immediate recognition of
income under Section 83(b)). If restricted stock is received in
connection with another award under the Equity Incentive Plan
(for example, upon exercise of an option), the income and the
deduction, if any, associated with such award may be deferred in
accordance with the rules described above for restricted stock.
Deferred Stock
The recipient of a deferred stock award will generally be
subject to tax at ordinary income rates on the fair market value
of the stock on the date that the stock is distributed to the
participant. The capital gain or loss holding period for such
stock will also commence on such date. The Corporation generally
will be entitled to a deduction equal to the amount that is
taxable as ordinary income to the employee. If a right to
deferred stock is received under another award (for example, upon
exercise of an option), the income and deduction, if any,
associated with such award may be deferred in accordance with the
rules described above for deferred stock.
Performance Awards
The recipient of a performance award will generally be
subject to tax at ordinary income rates on any cash received and
the fair market value of any Common Stock issued under the award,
and the Corporation will generally be entitled to a deduction
equal to the amount of ordinary income realized by the recipient.
Any cash received under a performance award will be included in
income at the time of receipt. The fair market value of any
Common Stock received will also generally be included in income
(and a corresponding deduction will generally be available to the
Corporation) at the time of receipt. The capital gain or loss
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holding period for any Common Stock distributed under a
performance award will begin when the recipient recognizes
ordinary income in respect of that distribution.
Loans and Supplemental Grants
Generally speaking, bona fide loans made under the Equity
Incentive Plan will not result in taxable income to the recipient
or in a deduction to the Corporation. However, any such loan
made at a rate of interest lower than certain rates specified
under the Internal Revenue Code may result in an amount
(measured, in general, by reference to the difference between the
actual rate and the specified rate) being included in the
borrower's income and deductible by the Corporation. Forgiveness
of all or a portion of a loan will also result in income to the
borrower and a deduction for the Corporation. If outright cash
grants are given in order to facilitate the payment of
award-related taxes, the grants will be includable as ordinary
income by the recipient at the time of receipt and will in
general be deductible by the Corporation.
New Plan Benefits
The following table sets forth, to the extent determinable,
the number of shares of the Common Stock of the Corporation that
have been authorized to be granted under the Equity Incentive
Plan to the chief executive officer, the other named executive
officers, all current executive officers as a group, all current
directors who are not executive officers as a group and all
employees, including all current officers who are not executive
officers as a group. Aside from the options authorized to be
granted to the chief executive officer and the president of the
Corporation in future installments, no other option grants are
conditioned upon Stockholder approval of the increase in the
number of shares available under the Equity Incentive Plan.
Equity Incentive Plan
Number of Shares
Name and Positition Dollar Value(4) of Common Stock
John W. Wood, Jr.
Chief Executive Officer N/A N/A
Michael D. Norton
Vice President N/A N/A
Dominick R. Congiusti
Vice President N/A N/A
Executive Group $171,000 $75,000
Non-Executive Director Group N/A N/A
Non-Executive Officer
Employee Group N/A N/A
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Recommendation
The Board of Directors believes that the amendment to the
Equity Incentive Plan will provide the Corporation with the
ability to continue to provide incentive compensation for
employees and others who are expect to make significant
contributions to the future growth and success of the
Corporation, to reward such individuals for such contributions
and to encourage such individuals to take into account the
long-term interests of the Corporation and its Stockholders
through ownership of the Corporation's Common Stock.
Accordingly, the Board of Directors believes that the proposal is
in the best interests of the Corporation and its Stockholders and
recommends that the Stockholders vote FOR the approval of the
amendment to the Equity Incentive Plan. If not otherwise
specified, Proxies will be voted FOR approval of the amendment of
the Equity Incentive Plan.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as
independent public accountants for fiscal 1997. Arthur Andersen
LLP has acted as independent public accountants for the
Corporation since 1991. 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 two 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 January 12, 1998.
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, by facsimile transmission or telegram.
Brokers, nominees, custodians and fiduciaries are requested to
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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.
Woburn, Massachusetts
May 8, 1997
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FORM OF PROXY
THERMO VOLTEK CORP.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 2, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints John N. Hatsopoulos,
Jonathan W. Painter and John W. Wood Jr., 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 Thermo Voltek Corp., a Delaware
corporation (the "Company"), to be held on Monday, June 2, 1997,
at 1:30 p.m. at The Hyatt Regency Hotel, Hilton Head, South
Carolina, 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 April 7, 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, William W. Hoover, Sandra L.
Lambert, Theo Melas-Kyriazi, Peter Richman and John W. Wood Jr.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Approve management proposal to increase the
number of shares available for grant under the
Corporation's equity incentive plan by 300,000 shares.
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.
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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.
40
