Thermedics Inc.
470 Wildwood Street
Post Office Box 2999
Woburn, MA 01888-1799
April 19, 1996
Dear Stockholder:
The enclosed Notice calls the 1996 Annual Meeting of the
Stockholders of Thermedics Inc. I respectfully request all Stockholders
attend this Meeting, if possible.
Our Annual Report for the year ended December 30, 1995 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, The First
National Bank of Boston, 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.
President and Chief
Executive Officer
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Thermedics Inc.
470 Wildwood Street
Post Office Box 2999
Woburn, Massachusetts 01888-1799
April 19, 1996
To the Holders of the Common Stock of
Thermedics Inc.
NOTICE OF ANNUAL MEETING
The 1996 Annual Meeting of the Stockholders of Thermedics Inc.
(the "Corporation") will be held on Monday, May 20, 1996, at 1:15 p.m.
at the Turnberry Isle Resort & Club, 19999 West Country Club Drive,
Aventura, Florida. The purposes of the Meeting are to consider and take
action upon the following matters:
1. Election of eight Directors.
2. A proposal recommended by the Board of Directors to amend the
Corporation's Articles of Organization to increase the Corporation's
authorized common stock, $.10 par value per share, from 50 million
shares to 100 million shares.
3. A proposal recommended by the Board of Directors to extend
the term of the Employees' Stock Purchase Plan to December 31, 2004.
4. 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 1, 1996.
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 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
Clerk
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PROXY STATEMENT
The enclosed Proxy is solicited by the Board of Directors of
Thermedics Inc. (the "Corporation") for use at the 1996 Annual Meeting
of the Stockholders (the "Meeting") to be held on Monday, May 20, 1996,
at 1:15 p.m., at the Turnberry Isle Resort & Club, 19999 West Country
Club Drive, Aventura, Florida, and any adjournment thereof. The mailing
address of the executive office of the Corporation is 470 Wildwood
Street, P.O. Box 2999, Woburn, Massachusetts 01888-1799. This Proxy
Statement and the enclosed Proxy were first furnished to Stockholders
of the Corporation on or about April 24, 1996.
VOTING PROCEDURES
The Board of Directors intends to present to the Meeting the
election of eight Directors, constituting the entire Board of
Directors, as well as two other matters: a proposal to amend the
Corporation's Articles of Organization to increase the Corporation's
authorized common stock, $.10 par value ("Common Stock"), from 50
million shares to 100 million shares and a proposal to extend the term
of the Corporation's Employees' Stock Purchase Plan to December 31,
2004.
The representation in person or by proxy of a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is
necessary to provide a quorum for the transaction of business at the
Meeting. Shares can only be voted if the Stockholder is present in
person or is represented by returning a properly signed Proxy. Each
Stockholder's vote is very important. Whether or not you plan to attend
the Meeting in person, please sign and promptly return the enclosed
proxy card, which requires no postage if mailed in the United States.
All signed and returned Proxies will be counted towards establishing a
quorum for the Meeting, regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate
box on the proxy card. If your proxy card is signed and returned
without specifying choices, your shares will be voted for the
management nominees for Directors, for the management proposals, 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 proposal to increase the
authorized Common Stock, the affirmative vote of a majority of the
Corporation's outstanding Common Stock entitled to vote on the matter
is necessary for approval. For the proposal to extend the term of the
Employees' Stock Purchase Plan, the affirmative vote of a majority of
shares present in person or by proxy, and entitled to vote on the
matter, is necessary for approval. Withholding authority to vote for a
nominee for Director or an instruction to abstain from voting on a
proposal will be treated as shares present and entitled to vote and,
for purposes of determining the outcome of the vote, will have the same
2
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effect as a vote against the nominee or a proposal. With respect to the
election of Directors and the extension of the Employees' Stock
Purchase Plan, broker "non-votes" will not be treated as shares present
and entitled to vote on a voting matter and will have no effect on the
outcome of the vote. Broker "non-votes" on the proposal to increase the
authorized Common Stock will have the effect of a vote against the
proposal. 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 Clerk 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 1,
1996 consisted of 36,469,938 shares of Common Stock. Only Stockholders
of record at the close of business on April 1, 1996 are entitled to
vote at the Meeting. Each share is entitled to one vote.
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- PROPOSAL 1 -
ELECTION OF DIRECTORS
Eight Directors are to be elected at the Meeting, each to hold
office until his successor is chosen and qualified or until his earlier
resignation, death or removal.
Nominees For Directors
Set forth below are the names of the persons nominated as
Directors, their ages, their offices in the Corporation, if any, their
principal occupation or employment for the past five years, the length
of their tenure as Directors and the names of other public companies in
which such persons hold directorships. Information regarding their
beneficial ownership of the common stock of the Corporation, its
majority-owned subsidiaries, Thermo Cardiosystems Inc., Thermedics
Detection Inc., Thermo Sentron Inc. and Thermo Voltek Corp., and of its
parent corporation, Thermo Electron Corporation ("Thermo Electron"), is
reported under the caption "Stock Ownership." All of the nominees are
currently Directors of the Corporation.
Peter O. Crisp Mr. Crisp, 63, has been a Director of the
Corporation since 1983. Mr. Crisp has been
a General Partner of Venrock Associates, a
venture capital investment firm, for more
than five years. Mr. Crisp is also a
Director of American Superconductor
Corporation, Apple Computer, Inc., Evans &
Sutherland Computer Corporation, Long
Island Lighting Company, Thermo Electron,
Thermo Power Corporation, ThermoTrex
Corporation, and United States Trust
Corporation.
Paul F. Ferrari Mr. Ferrari, 65, has been a Director of
the Corporation since 1991. Since 1991, he
has been a consultant to various
companies, including Thermo Electron and
its subsidiaries. Mr. Ferrari was a Vice
President of Thermo Electron from 1988
until his retirement at the end of 1990,
its Secretary from 1981 to 1990, and its
Treasurer from 1967 to 1988. He served as
the Corporation's Clerk from 1983 to 1990
and its Treasurer from 1983 to 1988. Mr.
Ferrari is also a director of General
Scanning Inc., Signal Technology
Corporation and ThermoTrex Corporation.
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George N. Dr. Hatsopoulos, 69, has been a Director
Hatsopoulos of the Corporation since 1983. Dr.
Hatsopoulos has been the Chairman of the
Board, President and Chief Executive
Officer of Thermo Electron since 1956. Dr.
Hatsopoulos is also a director of Bolt,
Beranek & Newman, Inc., Thermo Ecotek
Corporation, Thermo Electron, Thermo
Fibertek Inc., Thermo Instrument Systems
Inc., ThermoQuest Corporation and
ThermoTrex Corporation. Dr. Hatsopoulos is
the brother of Mr. John N. Hatsopoulos, a
Director and the Chairman of the Board,
Vice President and Chief Financial Officer
of the Corporation.
John N. Hatsopoulos Mr. Hatsopoulos, 62, was appointed
Chairman of the Board of Directors in
March 1995, and has served as the
Corporation's Chief Financial Officer
since 1988 and its Vice President since
1986. He has been the Chief Financial
Officer of Thermo Electron since 1988 and
an Executive Vice President of Thermo
Electron since 1986. Mr. Hatsopoulos is
also a Director of Lehman Brothers Funds,
Inc., Thermo Ecotek Corporation, Thermo
Fibertek Inc., Thermo Instrument Systems
Inc., Thermo Power Corporation,
ThermoQuest Corporation, Thermo Sentron
Inc., Thermo TerraTech Inc. and ThermoTrex
Corporation. Mr. Hatsopoulos is the
brother of Dr. George N. Hatsopoulos, a
Director of the Corporation.
Robert C. Howard Mr. Howard, 65, has been a Director of the
Corporation since 1983. Mr. Howard has
been an Executive Vice President of Thermo
Electron since 1986. He is also a
director of Thermo Cardiosystems Inc.,
Thermo Instruments Systems Inc., Thermo
Power Corporation, ThermoLase Corporation
and ThermoTrex Corporation.
Arvin H. Smith Mr. Smith, 66, has been a Director of the
Corporation since 1992. Mr. Smith has been
President and Chief Executive Officer of
Thermo Instrument Systems Inc. since 1986,
Executive Vice President of Thermo
Electron since November 1991 and was
Senior Vice President of Thermo Electron
from 1986 to 1991. Mr. Smith is also a
director of Thermo Instrument Systems
Inc., ThermoQuest Corporation and
ThermoSpectra Corporation.
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John W. Wood Jr. Mr. Wood, 52, has been a Director of the
Corporation since 1984. 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 from September 1994 to December
1995. Mr. Wood has been President and
Chief Executive Officer of the Corporation
since 1984. Mr. Wood is also a director of
Thermo Cardiosystems Inc., Thermo Sentron
Inc. and Thermo Voltek Corp.
Nicholas T. Zervas Dr. Zervas, 67, has been a Director of the
Corporation since 1987. Dr. Zervas has
been Chief of Neurosurgical Service,
Massachusetts General Hospital, since
1977. Dr. Zervas is also a director of
Thermo Cardiosystems Inc., ThermoLase
Corporation and ThermoTrex Corporation.
Committees of the Board of Directors and Meetings
The Board of Directors has established an Audit Committee and a
Human Resources Committee, each consisting solely of outside Directors.
The present members of the Audit Committee are Mr. Ferrari (Chairman),
Mr. Crisp and Dr. Zervas. The Audit Committee reviews the scope of the
audit with the Corporation's independent public accountants and meets
with them for the purpose of reviewing the results of the audit
subsequent to its completion. The present members of the Human
Resources Committee are Mr. Crisp (Chairman), Mr. Ferrari and Dr.
Zervas. 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 twice during fiscal 1995. Each Director attended at least 75% of
all meetings of the Board of Directors and Committees on which he
served held during fiscal 1995.
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
$4,000 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. Dr. G.
Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr. Smith and Mr. Wood
are all employees of Thermo Electron or its subsidiaries and do not
6
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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
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 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 solely in shares of
Common Stock accumulated under the Deferred Compensation Plan. A total
of 30,000 shares of Common Stock have been reserved for issuance under
the Deferred Compensation Plan. As of January 1, 1996, deferred units
equal to 16,536.57 shares of Common Stock were accumulated under the
Deferred Compensation Plan.
Directors Stock Option Plan
In 1991, the Corporation adopted a directors stock option plan
(the "Directors Plan"), which was amended in 1995. The Directors Plan
provides for the grant of stock options to purchase shares of common
stock of the Corporation and its majority-owned subsidiaries 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. In
addition, the Directors Plan provides for the automatic grant every
five years of options to purchase 1,500 shares of the common stock of a
majority-owned subsidiary of the Corporation that is "spun out" to
outside investors.
Pursuant to the Directors Plan, outside Directors receive an
annual grant of options to purchase 1,000 shares of Common Stock 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
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anniversary of the grant date.
In addition, under the Directors Plan, outside Directors are
automatically granted every five years options to purchase 1,500 shares
of common stock of each majority-owned subsidiary of the Corporation
that is "spun out" to outside investors. The grant occurs on the close
of business on the date of the first Annual Meeting of the Stockholders
next following the subsidiary's spinout, which is the first to occur of
either an initial public offering of the subsidiary's common stock or a
sale of such stock to third parties in an arms-length transaction, and
also as of the close of business on the date of every fifth Annual
Meeting of the Stockholders of the Corporation that occurs thereafter
during the duration of the Plan. The options granted vest and become
exercisable on the fourth anniversary of the date of grant, unless
prior to such date the subsidiary's common stock is registered under
Section 12 of the Securities Exchange Act of 1934, as amended
(''Section 12 Registration"). In the event that the effective date of
Section 12 Registration occurs before the fourth anniversary of the
grant date, the option will become immediately exercisable and the
shares acquired upon exercise will be subject to restrictions on
transfer and the right of the Corporation to repurchase such shares at
the exercise price in the event the Director ceases to serve as a
Director of the Corporation or any other Thermo Electron company. In
the event of Section 12 Registration, the restrictions and repurchase
rights shall lapse or be deemed to lapse at the rate of 25% per year,
starting with the first anniversary of the grant date. These options
expire after five years. Under this provision of the Directors Plan,
each outside Director was granted options to purchase 1,500 shares of
common stock of each of Thermo Cardiosystems Inc. and Thermo Voltek
Corp. at exercise prices of $36.03 and $12.60 per share, respectively,
on May 22, 1995, the date of last year's Annual Meeting of the
Stockholders. In addition, under the Directors Plan, each outside
Director will be granted options to purchase 1,500 shares of common
stock of Thermo Sentron Inc. on the date of this year's Annual Meeting
of the Stockholders.
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. An aggregate of 37,500 shares
of Common Stock has been reserved for issuance under the Directors
Plan.
Compensation Committee Interlocks and Insider Participation in
Compensation Decisions
Mr. Ferrari serves as a member of the Human Resources Committee of
the Board of Directors. Mr. Ferrari served as the Clerk of the
Corporation from 1983 to 1990 and as its Treasurer from 1983 to 1988.
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STOCK OWNERSHIP
The following table sets forth the beneficial ownership of Common
Stock, as well as the common stock of Thermo Electron, the
Corporation's parent corporation, and of Thermo Cardiosystems Inc.
("Thermo Cardiosystems") and Thermo Voltek Corp. ("Thermo Voltek"),
each a publicly traded majority-owned subsidiary of the Corporation, as
of January 1, 1996, with respect to (i) each person who was known by
the Corporation to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each Director, (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. No Director or executive officer beneficially
owned any shares of Thermedics Detection Inc. ("Thermedics Detection")
or Thermo Sentron Inc. ("Thermo Sentron"), each a majority-owned
subsidiary of the Corporation, as of January 1, 1996.
<TABLE>
<CAPTION>
Thermo Thermo Thermo
Thermedics Electron Cardio- Voltek
Name Inc. (2) Corporation systems Corp.
(3) Inc. (4) (5)
<S> <C> <C> <C> <C>
ThermoElectron 17,315,326 N/A N/A N/A
Corporation (6)
Peter O. Crisp 44,653 64,434 16,500 1,500
Paul F. Ferrari 14,457 20,820 16,500 3,999
David H. Fine 110,754 48,682 2,783 0
George N. Hatsopoulos 65,369 2,329,278 7,733 0
John N. Hatsopoulos 76,392 478,355 1,288 7,749
Robert C. Howard 11,587 134,593 12,500 0
John T. Keiser 20,542 80,117 10,500 0
Victor L. Poirier 89,337 33,227 105,779 0
Louis S. Slaughter (7) 28,710 13,570 0 0
Arvin H. Smith 91,164 363,578 20,000 0
John W. Wood Jr. 188,488 154,674 44,699 60,648
Nicholas T. Zervas 24,843 0 30,505 1,500
All Directors and 784,444 3,836,523 279,123 75,396
current executive
officers as a group
(12 persons)
</TABLE>
(1) Except as reflected in the footnotes to this table, shares of
Common Stock of the Corporation and of the common stock of Thermo
Electron, Thermo Cardiosystems and Thermo Voltek 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 beneficially owned by Mr. Crisp, Mr.
Ferrari, Dr. Fine, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard,
Mr. Keiser, Mr. Poirier, Mr. Slaughter, Mr. Smith, Mr. Wood, Dr. Zervas
and all Directors and current executive officers as a group include
8,050, 8,000, 84,600, 50,000, 50,000, 10,000, 15,700, 45,000, 23,720,
82,500, 120,100, 7,650 and 524,320 shares, respectively, that such
person or group has the right to acquire within 60 days of January 1,
1996 through the exercise of stock options. Shares beneficially owned
by Dr. Fine, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr.
Keiser, Mr. Poirier, Mr. Slaughter, Mr. Smith, Mr. Wood and all
Directors and executive officers as a group include 917, 1,465, 1,476,
1,587, 1,049, 278, 652, 1,319, 1,218 and 10,993 full shares,
respectively, allocated through January 1, 1996 to their respective
accounts maintained pursuant to Thermo Electron's employee stock
ownership plan, of which the trustees, who have investment power over
its assets, were as of January 1, 1996 executive officers of Thermo
Electron (the "ESOP"). Shares beneficially owned by Mr. Crisp, Dr.
Zervas and all Directors and executive officers as a group include
6,308, 6,693 and 13,001 full shares, respectively, that had been
allocated through January 1, 1996 to their respective accounts
maintained under the Corporation's Deferred Compensation Plan for
Directors. Shares beneficially owned by Dr. G. Hatsopoulos include 562
shares held by Dr. G. Hatsopoulos' spouse and 1,950 shares held by a
trust of which Dr. G. Hatsopoulos is a trustee. No Director or
executive officer beneficially owned more than 1% of the Common Stock
outstanding as of January 1, 1996; all Directors and executive officers
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as a group beneficially owned 2.2% of the Common Stock outstanding as
of such date.
(3) The shares of common stock of Thermo Electron shown in the table
reflect a three-for-two split of such stock effected in May 1995 in the
form of a 50% stock dividend. Shares of the common stock of Thermo
Electron beneficially owned by Mr. Crisp, Dr. Fine, Dr. G. Hatsopoulos,
Mr. J. Hatsopoulos, Mr. Howard, Mr. Keiser, Mr. Poirier, Mr. Slaughter,
Mr. Smith, Mr. Wood and all Directors and executive officers as a group
include 5,250, 37,150, 1,102,200, 297,880, 40,185, 60,698, 29,700,
10,575, 182,775, 133,998 and 1,965,536 shares, respectively, that such
person or group has the right to acquire within 60 days of January 1,
1996 through the exercise of stock options. Shares beneficially owned
by Dr. Fine, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr.
Keiser, Mr. Poirier, Mr. Slaughter, Mr. Smith, Mr. Wood and all
Directors and executive officers as a group include 757, 1,481, 1,225,
1,963, 819, 337, 459, 1,081, 1,052 and 9,993 full shares, respectively,
allocated to their respective accounts maintained pursuant to the ESOP.
Shares beneficially owned by Mr. Crisp and all Directors and executive
officers as a group include 29,421 full shares allocated through
January 1, 1996 to Mr. Crisp's account maintained pursuant to Thermo
Electron's deferred compensation plan for directors. Shares
beneficially owned by Mr. Ferrari include an aggregate of 17,160 shares
held in trusts of which Mr. Ferrari is a trustee. Shares beneficially
owned by Dr. G. Hatsopoulos include 59,734 shares held by Dr.
Hatsopoulos' spouse, 112,500 shares held by a QTIP trust (the
"Hatsopoulos QTIP Trust") of which Dr. G. Hatsopoulos' spouse is a
trustee, 870 shares held by a trust of which Dr. G. Hatsopoulos is the
trustee and 26,625 shares held by a family trust of which Dr. G.
Hatsopoulos' spouse is the trustee. Shares beneficially owned by Mr.
J. Hatsopoulos include 112,500 shares held by the Hatsopoulos QTIP
Trust of which Mr. J. Hatsopoulos is a trustee. Except for Dr.
Hatsopoulos, who beneficially owned 2.6% of the Thermo Electron common
stock outstanding as of January 1, 1996, no Director or executive
officer beneficially owned more than 1% of such common stock
outstanding as of such date; all Directors and executive officers as a
group beneficially owned approximately 4.1% of the Thermo Electron
common stock outstanding as of January 1, 1996.
(4) Shares of the common stock of Thermo Cardiosystems beneficially
owned by Mr. Crisp, Mr. Ferrari, Dr. Fine, Mr. Keiser, Mr. Poirier, Mr.
Smith, Mr. Wood, Dr. Zervas and all Directors and executive officers as
a group include 16,500, 16,500, 2,650, 10,500, 77,900, 20,000, 39,483,
7,800 and 201,333 shares, respectively, that such person or group has
the right to acquire within 60 days of January 1, 1996 through the
exercise of stock options. Shares beneficially owned by Dr. Zervas and
all Directors and executive officers as a group include 4,405 shares
allocated through January 1, 1996 to Dr. Zervas' account maintained
pursuant to Thermo Cardiosystems' deferred compensation plan for
directors. No Director or executive officer beneficially owned more
than 1% of the Thermo Cardiosystems common stock outstanding as of
January 1, 1996; all Directors and executive officers as a group
beneficially owned approximately 1.1% of such common stock outstanding
on such date.
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(5) Shares of the common stock of Thermo Voltek beneficially owned by
Mr. Crisp, Mr. Ferrari, Mr. J. Hatsopoulos, Mr. Wood, Dr. Zervas and
all Directors and executive officers as a group include 1,500, 3,999,
4,999, 56,649, 1,500 and 68,647 shares, respectively, that such person
or group has the right to acquire within 60 days of January 1, 1996
through the exercise of stock options. The Directors and executive
officers of the Corporation did not individually or as a group
beneficially own more than 1% of the Thermo Voltek common stock
outstanding as of January 1, 1996.
(6) Thermo Electron beneficially owned 51.0% of the Common Stock
outstanding as of January 1, 1996. Thermo Electron's address is 81
Wyman Street, Waltham, Massachusetts 02254-9046.
(7) Mr. Slaughter resigned as an executive officer of the Corporation
on December 22, 1995.
Disclosure of Certain Late Filings
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and executive officers, and beneficial owners
of more than 10% of the Common Stock, such as Thermo Electron, to file
with the Securities and Exchange Commission initial reports of
ownership and periodic reports of changes in ownership of the
Corporation's securities. Based upon a review of such filings, all
Section 16(a) filing requirements applicable to such persons were
complied with during 1995, except in the following instance. Mr. Paul
F. Kelleher, an executive officer of the Corporation, failed to report
the sale of 4,400 shares of Common Stock in May 1995 until January
1996.
EXECUTIVE COMPENSATION
NOTE: All Thermo Electron share amounts reported below have, in all
cases, been adjusted as applicable to reflect a three-for-two stock
split effected in the form of a 50% stock dividend in May 1995 with
respect to the common stock of Thermo Electron.
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 three other most highly
compensated executive officers for the last three fiscal years, plus
one former executive officer who met the definition of "highly
compensated" within the meaning of the Securities and Exchange
Commission's executive 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.
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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
<CAPTION>
Annual Long Term
Compensation Compensation
Securities All Other
Nameand Principal Underlying Compen-
Position Fiscal Options (No. sation
Year of Shares and (3)
Salary Bonus Company)
<S> <C> <C> <C> <C> <C> <C>
John W. Wood Jr. (3) 1995 $180,000 $160,000 4,900 (TMD) $6,750
President and 2,300 (TCA)
Chief Executive 900 (TVL)
1994 $165,000 $127,000 5,400 (TMD) $6,639
1,950 (TMO)
1993 $156,500 $110,00079,800 (TMD) $10,118
19,162 (TMO)
50,750 (TVL)
John T. Keiser (4) 1995 $137,000 $91,000 700 (TMD) $7,764
Senior Vice President 7,300 (TMO)
1994 $130,000 $54,00015,000 (TMD) $6,750
3,000 (TCA)
13,950 (TMO)
1,500 (THS)
Victor L. Poirier 1995 $141,000 $113,000 3,700 (TCA) $6,750
Senior Vice President 10,500 (TMO)
5,000 (TLZ)
1994 $135,000 $66,00015,450 (TMO) $6,322
500 (THS)
1993 $115,500 $55,00015,000 (TMD) $6,745
50,000 (TCA)
1,500 (TMO)
David H. Fine 1995 $124,000 $23,500 2,500 (TMD) $6,750
Vice President 1,000 (TMO)
1994 $114,500 $67,500 4,100 (TMD) $4,463
31,200 (TMO)
1,000 (THS)
1993 $110,750 $67,00070,500 (TMD) $8,253(6)
1,350 (TMO)
Louis S. Slaughter (5) 1995 $155,000 -- -- $6,750
Former Vice President 1994 $150,000 $82,000 1,600 (TMD) $6,750
10,500 (TMO)
1,000 (THS)
1993 $145,000 $80,00075,300 (TMD) $13,113(6)
5,625 (TMO)
Summary Compensation Table
(1) In addition to grants of options to purchase Common Stock of the
Corporation (designated in the table as TMD), 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 to the chief executive officer and the other
named executive officers in the following Thermo Electron companies:
Thermo Cardiosystems (designated in the table as TCA), Thermo Electron
(designated in the table as TMO), Thermo Voltek Corp. (designated in
the table as TVL), ThermoLase Corporation (designated in the table as
TLZ) 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 Thermo Voltek, as well as the
president and chief executive officer of the Corporation. Reported in
the table under "Annual Compensation" and "All Other Compensation" are
the total amounts paid to Mr. Wood for his service in all capacities to
Thermo Electron companies. The Human Resources Committee of the Board
of Directors of the Corporation reviewed total Annual Compensation to
be paid to Mr. Wood from all sources within the Thermo Electron
organization and approves the allocation of a percentage of Annual
Compensation (salary and bonus) for the time he devotes to the affairs
of the Corporation. For 1995 and 1994, 50% and 65%, respectively, of
Mr. Wood's Annual Compensation was allocated to the Corporation. Prior
to 1994, all of Mr. Wood's Annual Compensation was paid by the
Corporation. Mr. Wood was appointed a vice president of Thermo
Electron on September 2, 1994, and currently serves as a senior vice
president, and from time to time after that date has been, and in the
future may be, granted options to purchase common stock of Thermo
Electron and its subsidiaries other than the Corporation. These options
are not reported in the table as they are granted as compensation for
service to other Thermo Electron companies in capacities other than in
his capacity as chief executive officer of the Corporation.
(4) Mr. Keiser was appointed a senior vice president of the
Corporation on July 28, 1994 and since July 1, 1994 has served as the
president of Thermo Biomedical Inc., a subsidiary of Thermo Electron.
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<PAGE>
Prior to July 1, 1994 he served as a vice president of Thermo
Instrument Systems Inc., another majority-owned subsidiary of Thermo
Electron. Reported in the table under "Annual Compensation" and "All
Other Compensation" are the total amounts paid in 1995 and 1994 to Mr.
Keiser for his service in all capacities to Thermo Electron companies.
The Human Resources Committee of the Board of Directors of the
Corporation reviewed total Annual Compensation paid to Mr. Keiser in
1995 and 1994 from all sources within the Thermo Electron organization
and approved the allocation of a percentage of Annual Compensation
(salary and bonus) for the time he devotes to the affairs of the
Corporation. For 1995 and 1994, 10% and 5%, respectively, of Mr.
Keiser's Annual Compensation was allocated to the Corporation. Mr.
Keiser holds options to purchase common stock of Thermo Electron and
its subsidiaries other than the Corporation granted prior to July 1,
1994. These options are not reported in the table as they were granted
as compensation for service to other than as senior vice president of
the Corporation.
(5) Mr. Slaughter resigned as an executive officer of the Corporation
on December 22, 1995.
(6) In addition to the matching contributions referred to in footnote
(2), this amount includes $2,763 and $2,763, representing the market
value of 112 shares of Thermo Electron common stock received by each of
Mr. Slaughter and Dr. Fine, respectively, in recognition of managerial
achievements, voted by managers of Thermo Electron at annual management
conferences.
Stock Options Granted During Fiscal 1995
The following table sets forth information concerning individual
grants of stock options made during fiscal 1995 to the Corporation's
chief executive officer and the other named executive officers. No
options were granted to Mr. Slaughter in fiscal 1995. It has not been
the Corporation's policy in the past to grant stock appreciation
rights, and no such rights were granted during fiscal 1995.
</TABLE>
<TABLE>
OPTION GRANTS In FISCAL 1995
<CAPTION>
Percent of Potential
Total Realizable Valu
Number of Options at Assumed
Securities Granted toExercise Annual Rates of
Underlying Employees Price Expiration Stock Price
Name Options in Per Date Appreciation fo
Granted (1) Fiscal Share
5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
John W. Wood Jr.(3) 4,900 (TMD) 27.4% $15.52 3/14/02 $30,968 $72,128
2,300 (TCA) 2.9%(2) $26.10 3/20/02 $24,449 $56,948
900 (TVL) 0.8%(2) $11.00 3/20/02 $4,032 $9,396
John T. Keiser 700 (TMD) 3.9% $15.52 3/14/02 $4,424 $10,304
2,300 (TMO) 0.3%(2) $37.27 5/23/98 $13,501 $28,382
5,000 (TMO) 0.6%(2) $48.90 11/28/02 $99,550 $231,950
PAGE
<PAGE>
Victor L. Poirier 3,700 (TCA) 4.6% $26.10 3/20/02 $39,331 $91,612
500 (TMO) 0.1%(2) $37.27 5/23/98 $2,935 $6,170
10,000 (TMO) 1.2%(2) $45.40 9/22/07 $361,30 $970,800
5,000 (TLZ) 0.5%(2) $22.75 11/28/07 $90,550 $243,250
David H. Fine 2,500 (TMD) 14.0% $15.52 3/14/02 $15,800 $36,800
1,000 (TMO) 0.1%(2) $37.27 5/23/98 $5,870 $12,340
</TABLE>
Option Grants in Fiscal 1995
(1) All of the options granted during the fiscal year are immediately
exercisable at the date of grant. However, the shares acquired upon
exercise are subject to repurchase by the granting corporation at the
exercise price if the optionee ceases to be employed by the granting
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 granting corporation
or another Thermo Electron company. Certain options granted as a part
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<PAGE>
of Thermo Electron's stock option program have three-year terms, and
the repurchase rights lapse in their entirety on the second anniversary
of the grant date. The granting corporation may 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) These options were granted under stock option plans maintained by
Thermo Electron or its subsidiaries other than the Corporation and
accordingly are reported as a percentage of total options granted to
employees of Thermo Electron and its subsidiaries.
(3) Mr. Wood was appointed a vice president of Thermo Electron on
September 2, 1994, and currently serves as a senior vice president, and
from time to time after that date has been, and in the future may be,
granted options to purchase common stock of Thermo Electron and its
subsidiaries other than the Corporation. These options are not reported
in the table as they are granted as compensation for service to other
Thermo Electron companies in capacities other than in his capacity as
chief executive officer of the Corporation.
Stock Options Exercised During Fiscal 1995
The following table reports certain information regarding stock
option exercises during fiscal 1995 and outstanding stock options held
at the end of fiscal 1995 by the Corporation's chief executive officer
and the other named executive officers. No stock appreciation rights
were exercised or were outstanding during fiscal 1995.
<TABLE>
Aggregated Option Exercises In Fiscal 1995 And Fiscal 1995 Year-End Option Value
<CAPTION>
No. of Unexercised
Shares Options at Fiscal
Acquired Value Year-end
Name Company on Realized (Exercisable/
Exercise Unexercisable) (1)
<S> <C> <C> <C> <C> <C>
John W. Wood Jr.(2) Thermedics -- -- 120,100/0
Thermedics Detection -- -- 0 /35,000
Thermo Cardiosystems 26,817 $646,425 39,483/0
Thermo Ecotek -- -- 3,000 /0
Thermo Electron 4,950 $90,712 47,098/0
Thermo Fibertek -- -- 6,000 /0
ThermoTrex 3,600 $120,780 900 /0
Thermo Voltek -- -- 56,649/0
John T. Keiser (3) Thermedics -- -- 15,700/0
Thermo Cardiosystems -- -- 3,000 /0
Thermo Electron -- -- 7,300 /0
ThermoSpectra -- -- 1,500 /0
Victor L. Poirier Thermedics -- -- 45,000/0
Thermedics Detection -- -- 0/5,000
Thermo Cardiosystems 36,759$1,870,849 77,900/0
Thermo Ecotek -- -- 2,500 /0
Thermo Electron -- -- 29,700/0 (4)
Thermo Fibertek -- -- 3,000 /0
ThermoLase -- -- 5,000 /0
ThermoSpectra -- 500 /0
ThermoTrex 1,440 $46,872 360 /0
David H. Fine Thermedics -- -- 84,600/0
Thermedics Detection -- -- 0 /62,500
Thermo Cardiosystems 2,600 $62,452 2,650 /0
Thermo Ecotek -- -- 1,000 /0
Thermo Electron 10,755 $202,296 37,150/0(4)
Thermo Fibertek -- -- 3,000 /0
ThermoSpectra -- -- 1,000 /0
ThermoTrex 1,440 $41,472 360 /0
Louis S. Slaughter Thermedics -- -- 23,720/0
Thermo Ecotek -- -- 1,000 /0
Thermo Electron -- -- 10,575/0
Thermo Fibertek -- -- 3,600 /0
ThermoSpectra -- -- 200 /0
Thermo TerraTech -- -- 15,000/0
ThermoTrex -- -- 540 /0
<PAGE>
Value of
Unexercised
In-the-Money
Options
<C>
$1,645,924/--
--/-- (5)
$2,824,905/--
$32,250/--
$1,430,17/--
$108,000/--
$40,995/--
$345,830/--
$222,436/--
$173,850/--
$49,379/--
$8,438/--
$883,950/--
--/-- (5)
$4,848,209/--
$26,875/--
$524,935/--
$54,000/--
$15,625/--
$2,813/--
$16,398/--
$1,367,802/--
--/-- (5)
$200,129/--
$10,750/--
$884,475/--
$54,000/--
$5,625/--
$16,398/--
$424,252/--
$10,750/--
$368,871/--
$64,800/--
$1,125/--
--/--
$24,597/--
</TABLE>
Aggregated Option Exercises in Fiscal 1995 and
Fiscal 1995 Year-end Option Values
(1) All of the options reported outstanding at the end of the fiscal
year were immediately exercisable on the date of grant, except options
to purchase the common stock of Thermedics Detection, which are not
exercisable until that company's stock is publicly traded. The shares
acquired upon exercise of the options reported in the table are subject
to repurchase by the granting corporation at the exercise price if the
optionee ceases to be employed by such corporation or any other Thermo
Electron company. The granting corporation may exercise its repurchase
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 Corporation or
another Thermo Electron company. Certain options granted as a part of
Thermo Electron's stock option program have three-year terms, and the
repurchase rights lapse in their entirety on the second anniversary of
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<PAGE>
the grant date. For companies whose shares are not publicly traded,
the repurchase rights lapse in their entirety on the ninth anniversary
of the grant date.
(2) Mr. Wood was appointed a vice president of Thermo Electron on
September 2, 1994, currently serves as a senior vice president, and
holds options to purchase common stock of Thermo Electron and its
subsidiaries other than the Corporation granted after that date. These
options are not reported in the table as they were granted as
compensation for service to other Thermo Electron companies other than
in his capacity as chief executive officer of the Corporation.
(3) Mr. Keiser was appointed a senior vice president of the
Corporation on July 28, 1994 and since July 1, 1994 has served as the
president of Thermo Biomedical Inc., a subsidiary of Thermo Electron.
Prior to July 1, 1994, he served as a vice president of Thermo
Instrument Systems Inc. and holds options to purchase common stock of
Thermo Electron and its subsidiaries other than the Corporation granted
prior to that date. These options are not reported in the table as they
were granted as compensation for service to other than as senior vice
president of the Corporation.
(4) Options to purchase 15,000 and 30,000 shares of the common stock
of Thermo Electron granted to Mr. Poirier and Mr. Fine, respectively,
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.
(5) No public market existed for the shares underlying these options
as of December 31, 1995. Accordingly, no value in excess of the
exercise price has been attributed to these options.
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
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<PAGE>
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 (i) if 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 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 January 1, 1996, Mr. Wood would have
received approximately $340,000.
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 corporation, Thermo Electron. The
executive compensation program presently consists of annual base salary
("salary"), short-term incentives in the form of annual cash bonuses,
and long-term incentives in the form of stock options.
The Committee believes that the compensation of executive officers
should reflect the scope of their responsibilities, the success of the
Corporation, and the contributions of each executive to that success.
In addition, the Committee believes that base salaries should
approximate the mid-point of competitive salaries derived from market
surveys and that short-term and long-term incentive compensation should
reflect the performance of the Corporation and the contributions of
each executive.
External competitiveness is an important element of the
Committee's compensation policy. The competitiveness of the
Corporation's compensation for its executives is assessed by comparing
it to market data provided by its compensation consultant and by
participating in annual executive compensation surveys, primarily
"Project 777", an executive compensation survey prepared by Management
Compensation Services, a division of Hewitt Associates. The majority of
firms represented in the Project 777 survey are included in the
Standard & Poor's Index, but do not necessarily correspond to the
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<PAGE>
companies included in the Corporation's peer group index, the Dow Jones
Diversified Technology Industry Group Index.
Principles of internal equity are also central to the Committee's
compensation policies. Compensation considered for the Corporation's
officers, whether cash or stock-based incentives, is also evaluated by
comparing it to compensation of other executives within the Thermo
Electron organization with comparable levels of responsibility for
comparably sized business units. The process for determining each of
these elements for the Corporation's executive officers is outlined
below. For its review of the compensation of other officers of the
Corporation, the Committee follows a substantially similar process.
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 1995 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, contributions to shareholder value, and earnings growth,
and are measures of corporate and divisional performance that are
evaluated using graphs developed by Thermo Electron designed 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
1995 measured return on net assets, growth in income, and growth in
earnings per share, and the Committee's determinations also included an
evaluation of the contributions of each executive that are not captured
17
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<PAGE>
by operating measures but are considered important to the creation of
long-term value for the Stockholders. These measures of achievements
are not financial targets that are met, not met or exceeded. The
relative weighting of these achievements varies depending on the
executive's role and responsibilities within the organization.
The bonuses for named executive officers approved by the Committee
with respect to 1995 performance in each instance exceeded the median
potential bonus, except for one executive officer.
Stock Option Program
The primary goal of the Corporation is to excel in the creation of
long-term value for the Stockholders. The principal incentive tool used
to achieve this goal is the periodic award to key employees of options
to purchase common stock of the Corporation and other Thermo Electron
companies.
The Committee and management believe that awards of stock options
to purchase the shares of both the Corporation and other companies
within the Thermo Electron group of companies accomplish many
objectives. The grant of options to key employees encourages equity
ownership in the Corporation, and closely aligns management's interests
to the interests of all the Stockholders. The emphasis on stock options
also results in management's compensation being closely linked to stock
performance. In addition, because they are subject to vesting periods
of varying durations and to forfeiture if the employee leaves the
Corporation prematurely, stock options are an incentive for key
employees to remain with the Corporation long-term. The Committee
believes stock option awards in its parent 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 awards to purchase shares of Common
Stock to all employees over a five-year period below 10% 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 1995, 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. 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
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<PAGE>
of the executive's future potential within the organization), as well
as the value of previously awarded options as described above, in
determining option awards. The option awards made with respect to the
common stock of the Corporation's parent, Thermo Electron, or its
subsidiaries, are made as part of Thermo Electron's overall stock
option program and were determined by the human resources committees of
the board of directors of the applicable granting company using a
similar analysis.
Policy on Deductibility of Compensation
The Committee has also considered the application of Section
162(m) of the Internal Revenue Code to the Corporation's compensation
practices. Section 162(m) limits the tax deduction available to public
companies for annual compensation paid to senior executives in excess
of $1 million unless the compensation qualifies as "performance based"
or is otherwise exempt under Section 162(m). The annual compensation
paid to individual executives does not approach the $1 million
threshold, and it is believed that the stock incentive plans of the
Corporation qualify as "performance based." Therefore, the Committee
does not believe any further action is necessary in order to comply
with Section 162(m). From time to time, the Committee will reexamine
the Corporation's compensation practices and the effect of Section
162(m).
1995 CEO Compensation
Cash compensation for Mr. John W. Wood Jr. is reviewed by both the
Committee and the human resources committee of the board of directors
of Thermo Electron, due to his responsibilities as both the
Corporation's chief executive officer and as a senior vice president of
Thermo Electron, the Corporation's parent. Each committee evaluates Mr.
Wood's performance and proposed compensation using a process similar to
that used for the other executive officers of the Corporation. At the
Thermo Electron level, Mr. Wood is evaluated on his performance related
to the Corporation, as well as other operating units of Thermo Electron
for which he is responsible, weighted in accordance with the amount of
time and effort devoted to each operation. Approximately 50% of Mr.
Wood's bonus for 1995 performance was attributable to his
responsibilities at the Corporation. The Corporation's Committee then
reviews the analysis and determinations of the Thermo Electron
committee, makes an independent assessment of Mr. Wood's performance as
it relates to the Corporation using criteria similar to that used for
the other executive officers of the Corporation, and then agrees to an
appropriate allocation of Mr. Wood's compensation to be paid by the
Corporation.
In December 1995, the Committee conducted its review of Mr. Wood's
proposed salary for 1996 and bonus for 1995 performance. In addition to
the evaluation of Mr. Wood's performance as described above, the
Committee also considered the return to Stockholders of the Corporation
since the Corporation's initial public offering in 1983. The
Corporation achieved a compound annual return to Stockholders of 21%
per year over this period. The Committee considered Mr. Wood's
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<PAGE>
contributions and leadership in achieving this return in its
determination. The Committee concurred in the recommendation made by
the Thermo Electron committee and agreed to an allocation of 50% of Mr.
Wood's total cash compensation for 1995 to the Corporation, based on
his relative responsibilities at the Corporation and Thermo Electron.
In 1995, 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 shares of
Common Stock to Mr. Wood in 1995 was made under this program. The
awards of stock options to purchase shares of the Corporation's
subsidiaries, Thermo Cardiosystems and Thermo Voltek, to Mr. Wood in
1995 were made by the human resources committee of the board of
directors of each of those companies under a similar program as that
described above.
Mr. Peter O. Crisp (Chairman)
Mr. Paul F. Ferrari
Dr. Nicholas T. Zervas
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COMPARATIVE PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the
Corporation include in this Proxy Statement a line-graph presentation
comparing cumulative, five-year shareholder returns for the
Corporation's Common Stock with a broad-based market index and either a
nationally recognized industry standard or an index of peer companies
selected by the Corporation. The Corporation has compared its
performance with the American Stock Exchange Market Value Index and the
Dow Jones Total Return Index for the Diversified Technology Industry
Group.
Comparison of 1990-1995 Total Return Among Thermedics Inc.,
the American Stock Exchange Market Value Index
and the Dow Jones Total Return Index for the Diversified Technology
Industry Group
GRAPH APPEARS HERE
12/31/90 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95
TMD 100 94 119 230 194 422
AMEX 100 128 130 155 141 178
DJ DIV 100 119 131 153 158 215
The total return for the Corporation's Common Stock (TMD), the
American Stock Exchange Market Value Index (AMEX) and the Dow Jones
Total Return Index for the Diversified Technology Industry Group (DJ
DIV) 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 "TMD."
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
21
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and publicly held subsidiaries. The Corporation has created Thermo
Cardiosystems as a publicly held subsidiary and the Corporation has
acquired the majority interest in a previously unaffiliated public
company, Thermo Voltek 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 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 financial 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.
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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 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 1.2% of the Corporation's revenues for
these services for calendar 1995. Beginning January 1, 1996, the fee
has been reduced to 1.0% of the Corporation's revenues. The fee is
reviewed annually and may be changed by mutual agreement of the
Corporation and Thermo Electron. During fiscal 1995, Thermo Electron
assessed the Corporation $2,142,000 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 31, 1995, $25,685,000 of the Corporation's cash
equivalents were invested in a repurchase agreement with Thermo
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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, U.S. government
agency securities, money market funds, commercial paper and other
marketable securities, in the amount of at least 103% of such
obligation. The Corporation's funds subject to the repurchase agreement
are readily convertible into cash by the Corporation and have a
maturity of three months or less. The repurchase agreement earns a rate
based on the Commercial Paper Composite Rate plus 25 basis points, set
at the beginning of each quarter.
Thermo Electron owned approximately 51% of the Corporation's
outstanding Common Stock on January 1, 1996. Thermo Electron intends
for the foreseeable future to maintain at least 50% ownership of the
Corporation. This may require the purchase by Thermo Electron 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 in the open market or
directly from the Corporation.
The Corporation allocates a portion of the salary and bonus of two
executive officers of the Corporation to Thermo Electron for the time
such officers devote to Thermo Electron in connection with certain
management responsibilities relating to Thermo Electron's other
biomedical businesses. In 1995, the portion allocated to Thermo
Electron was $402,000.
On January 22, 1996, the Corporation issued 1,688,161 shares of
its common stock to Thermo Electron in exchange for 315,199 shares of
the common stock of the Corporation's Thermo Voltek subsidiary and
529,965 shares of the common stock of the Corporation's Thermo
Cardiosystems Corporation subsidiary. The shares of common stock of
the Corporation, Thermo Voltek and Thermo Cardiosystems were valued
based upon the average closing sale price for each company's shares on
the American Stock Exchange for the five days prior to the completion
of the transaction.
X-ray sources used in certain of the Corporation's products are
manufactured for the Corporation by Trex Medical Corporation, a
subsidiary of Thermo Electron's ThermoTrex Corporation subsidiary.
During 1995, the Corporation paid $285,000 to Trex Medical Corporation
for these x-ray sources. Thermo Electron's Tecomet division provides
metal fabrication services in connection with the manufacture of the
heart assist devices sold by the Corporation's Thermo Cardiosystems
subsidiary. During 1995, the Corporation paid Tecomet $1,153,850 for
these services. Pursuant to a subcontract entered into in October
1993, the Corporation's Thermedics Detection subsidiary performs
research and development services for Coleman Research Corporation
("Coleman"), which is the prime contractor under a contract with the
U.S. Department of Energy. Coleman is a wholly-owned subsidiary of
Thermo Electron and was acquired by Thermo Electron in March 1995.
Coleman paid Thermedics Detection $829,000 for services rendered in
1995.
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In March 1996, Thermedics Detection Inc. ("Trex Medical"), a
subsidiary of the Corporation, completed a private placement of 300,000
shares primarily to outside investors of minority investments in its
common stock. David H. Fine, a vice president, of the Corporation,
purchased 10,000 shares of the common stock of Trex Medical in such
private placement at a purchase price of $10.00 per share, the same
price paid by unaffiliated buyers.
-- PROPOSAL 2--
PROPOSAL TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has determined that it is advisable to
increase the Corporation's authorized Common Stock from 50 million
shares to 100 million shares, and has voted to recommend that the
Stockholders adopt an amendment to the Corporation's Articles of
Organization effecting the proposed increase.
As of January 1, 1996, approximately 34 million shares of Common
Stock were issued and outstanding (excluding treasury shares) and
approximately an additional three million shares were reserved for
issuance upon the conversion of existing securities and exercise of
options granted under the Corporation's various stock-based plans.
Accordingly, a total of approximately 13 million shares of Common Stock
are available for future issuance.
The Board of Directors believes it continues to be in the best
interest of the Corporation to have sufficient additional authorized
but unissued shares of Common Stock available in order to provide
flexibility for corporate action in the future. Management believes
that the availability of additional authorized shares for issuance from
time to time in the Board of Directors' discretion in connection with
possible acquisitions of other companies, future financings, investment
opportunities, stock splits or dividends or for other corporate
purposes is desirable in order to avoid repeated separate amendments to
the Corporation's Articles of Organization and the delay and expense
incurred in holding special meetings of the Stockholders to approve
such amendments. There are at present no specific understandings,
arrangements or agreements with respect to any future acquisitions that
would require the Corporation to issue any new shares of its Common
Stock. The Board of Directors believes that the currently available
unissued shares do not provide sufficient flexibility for corporate
action in the future.
No further authorization by vote of the Stockholders will be
solicited for the issuance of the additional shares of Common Stock
proposed to be authorized, except as might be required by law,
regulatory authorities or rules of the American Stock Exchange or any
stock exchange on which the Corporation's shares may then be listed.
The issuance of additional shares of Common Stock could have the effect
of diluting existing stockholder earnings per share, book value per
share and voting power. The Stockholders of the Corporation do not
have any preemptive right to purchase or subscribe for any part of any
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new or additional issuance of the Corporation's securities.
Thermo Electron, which owned approximately 52% of the outstanding
voting stock of the Corporation on April 1, 1996, has sufficient votes
to approve the amendment and has indicated its intention to vote for
the approval of the amendment.
______________________________________________________________________
The affirmative vote of a majority of the Common Stock outstanding
and entitled to vote at the Meeting is required to approve the
amendment to the Corporation's Articles of Organization to effect the
proposed increase in the Corporation's authorized shares. The Board of
Directors considers this amendment to be advisable and in the best
interests of the Corporation and its Stockholders and recommends that
you vote FOR approval of the amendment. If not otherwise specified,
Proxies will be vote FOR approval of this amendment.
______________________________________________________________________
--PROPOSAL 3--
PROPOSAL TO EXTEND THE TERM OF THE EMPLOYEES' STOCK PURCHASE PLAN
The Board of Directors has recommended that the Stockholders
approve an amendment to the Corporation's Employees' Stock Purchase
Plan (the "Stock Purchase Plan") that would extend the term of the plan
for an additional ten years. The material features of the Stock
Purchase Plan are described below. Prior to the commencement of the
new plan year on November 1, 1995, the Board of Directors amended the
Stock Purchase Plan to extend the term of the Stock Purchase Plan for
an additional ten years, subject to Stockholder approval at this
Meeting. Consequently, grants under the Stock Purchase Plan for the
current plan year will be rescinded if Stockholder approval of the
extension is not obtained. The Board of Directors believes that the
Stock Purchase Plan is an important incentive in attracting and
retaining key personnel, and motivating individuals to contribute
significantly to the Corporation's future growth and success, and in
aligning the long-term interest of these individuals with those of the
Corporation's Stockholders. For these reasons, the Board of Directors
has acted to continue the plan and is recommending the extension to the
Stockholders for approval. The following is a summary of the terms of
the Stock Purchase Plan.
Participation; Administration
All full-time employees and part-time employees working at least
20 hours per week and who have been employed for at least six months by
the Corporation are eligible to participate in the Stock Purchase Plan,
unless they own more that 5% of the Common Stock of the Corporation.
For purposes of determining the term of employment, employees are
credited with years of continued employment with Thermo Electron or its
other subsidiaries immediately prior to joining the Corporation.
Options to purchase shares of common stock of the Corporation or Thermo
Electron may be granted from time to time at the discretion of the
Board of Directors, which also determines the date upon which such
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options are exercisable. The number of employees potentially eligible
to participate in Stock Purchase Plan is approximately 1,372 persons.
Contributions
A participating employee may purchase stock only through payroll
deductions, which may not exceed 10% of the employee's gross salary or
wages during the year. Employees are allowed to decrease, but not
increase, the percentage of wages contributed once during the Stock
Purchase Plan year. An employee may suspend his or her contributions,
but then is not permitted to contribute again for the remainder of the
Stock Purchase Plan year.
Terms of Options
The exercise price is fixed on the grant date at the start of the
plan year and is 95% of the fair market value for such stock on such
date. On the exercise date, participants may elect to use their
accumulated payroll deductions to purchase shares at the exercise
price. Participants must agree not to resell the shares so purchased
for a period of six months following the exercise date. The options
are nontransferable, and except in the case of death of the employee,
may not be exercised if the employee is not still employed by the
Corporation at the exercise date. If an employee dies, his or her
beneficiary may withdraw the accumulated payroll deduction or use such
deductions to purchase shares on the exercise date. A participant may
elect to discontinue participation at any time prior to the exercise
date and to have his or her accumulated payroll deduction refunded
together with interest on such amount as fixed by the Board of
Directors from time to time.
Shares Subject to the Stock Purchase Plan
The number of shares that are currently reserved for issuance
under the Stock Purchase Plan is 69,994 shares of the Corporation's
Common Stock and 37,133 shares of Thermo Electron common stock, subject
to adjustment for stock splits and similar events. The proceeds
received by the Corporation from exercise under the Stock Purchase Plan
will be used for the general purposes of the Corporation. Shares
issued under the Stock Purchase Plan may be authorized but unissued or
shares reacquired by the Corporation and held in its treasury.
Amendment and Termination
The Stock Purchase Plan shall remain in full force and effect
until suspended or discontinued by the Board of Directors. The Board
of Directors may at any time or times amend or review the Stock
Purchase Plan for any purpose which may at any time be permitted by
law, or may at any time terminate the Stock Purchase Plan, provided
that no amendment that is not approved by the Stockholders shall be
effective if it would cause the Stock Purchase Plan to fail to satisfy
the requirements of Rule 16b-3 (or any successor rule) of the
Securities Exchange Act of 1934, as amended. No amendment of the Stock
Purchase Plan may adversely affect the rights of any recipient of any
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option previously purchased without such recipient's consent.
Term of the Stock Purchase Plan
The Stock Purchase Plan will expire on December 31, 2004, provided
that the extension of the term of the Stock Purchase Plan is approved
by the Stockholders at this Meeting.
Federal Income Tax Aspects
Federal income tax is not imposed upon an employee in the year an
option is granted or the year the shares are purchased pursuant to the
exercise of the option granted under the Stock Purchase Plan. Federal
income tax generally is imposed upon an employee when he or she sells
or otherwise dispose of the shares acquired pursuant to the Stock
Purchase Plan. When an employee sells or disposes of the shares, if
such sale or disposition occurs more than two years from the grant date
and more than one year from the exercise date, then Federal income tax
assessed at ordinary rates will be imposed upon the amount by which the
fair market value of the shares on the date of grant or disposition,
whichever is less, exceeds the amount paid for the shares. In
addition, the difference between the amount received by the employee at
the time of sale and employee's tax basis in the shares, which is equal
to the amount paid on exercise of the option plus the amount recognized
as ordinary income, will be recognized as a capital gain or loss. The
Corporation will not be allowed a deduction under these circumstances
for Federal income tax purposes. If the employee sells or disposes of
the shares sooner than two years from the grant date or one year from
the exercise date, then the employee's entire gain (the difference
between the fair market value at disposition and the amount paid for
the shares) will be taxed as ordinary income, and the Corporation would
be entitled to a deduction equal to that amount.
The closing price per share on the American Stock Exchange of the
Common Stock on April 1, 1996 was $28.
Recommendation
The Board of Directors believes that the extension of the term of
the Stock Purchase Plan is important for the Corporation to attract and
retain key employees and to be able to continue to offer them the
opportunity to participate in the ownership and growth of the
Corporation through an employees stock purchase plan. In addition,
the Board of Directors believes the Stock Purchase Plan is in the best
interest of the Corporation and its Stockholders and recommends that
the Stockholder vote FOR the approval of the extension of the term of
the Stock Purchase Plan. Thermo Electron, which owned of record
approximately 52% of the outstanding voting stock of the Corporation on
April 1, 1996 has indicated its intention to vote for the proposal.
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______________________________________________________________________
The affirmative vote of a majority of the Common Stock present and
entitled to vote on this proposal is required to approve the extension
of the term of the Stock Purchase Plan. The Board of Directors
believes that the extension of the Stock Purchase Plan is in the best
interest of the Corporation and its Stockholders and recommends that
you vote FOR the extension of the Stock Purchase Plan. If not
otherwise specified, Proxies will be voted FOR approval of this
proposal.
______________________________________________________________________
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as
independent public accountants for fiscal 1996. Arthur Andersen LLP has
acted as independent public accountants for the Corporation since 1983.
Representatives of that firm are expected to be present at the Meeting,
will have the opportunity to make a statement if they desire to do so
and will be available to respond to questions. The Board of Directors
has established an Audit Committee, presently consisting of three
outside Directors, the purpose of which is to review the scope and
results of the audit.
OTHER ACTION
Management is not aware at this time of any other matters that
will be presented for action at the Meeting. Should any such matters be
presented, the Proxies grant power to the proxy holders to vote shares
represented by the Proxies in the discretion of such proxy holders.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the 1997
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 December 25, 1996.
SOLICITATION STATEMENT
The cost of this solicitation of Proxies will be borne by the
Corporation. Solicitation will be made primarily by mail, but regular
employees of the Corporation may solicit Proxies personally, by
telephone or telegram. Brokers, nominees, custodians and fiduciaries
are requested to forward solicitation materials to obtain voting
instructions from beneficial owners of stock registered in their names,
and the Corporation will reimburse such parties for their reasonable
charges and expenses in connection therewith.
Woburn, Massachusetts
April 19, 1996
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FORM OF PROXY
THERMEDICS INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 20, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints John N. Hatsopoulos, John W.
Wood, Jr. and Jonathan W. Painter, or any one of them acting 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 Thermedics Inc., a Massachusetts corporation (the
"Company"), to be held on Monday, May 20, 1996, at 1:30 p.m., 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 1, 1996, with all of the powers the undersigned would possess if
personally present at such meeting:
Copies of the Notice of Meeting and of the Proxy Statement have
been received by the undersigned.
(Continued and to be signed on reverse side.)
Please mark your SEE REVERSE SIDE
[ x ] votes as in this
example.
The shares represented by this Proxy will be voted "FOR" the proposals
set forth below if no instruction to the contrary is indicated or if
no instruction is given.
1. Election of Directors
Nominees: Peter O. Crisp, Paul F. Ferrari, George N. Hatsopoulos, Jo
Hatsopoulos, Robert C. Howard, Arvin H. Smith, John W. Wood Jr. and
Nicholas T. Zervas
FOR ALL WITHHELD FROM
NOMINEES ALL NOMINEES
[ ] [ ]
[ ] For all nominees except as noted
above
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<PAGE>
FOR AGAINST ABSTAIN
2. Approve amendment to the Articles of
Organization to increase the [ ] [ ] [ ]
authorized common stock from 50
million to 100 million shares.
FOR AGAINST ABSTAIN
3. Approve proposal to extend the term of
the Company's Employees' Stock [ ] [ ] [ ]
Purchase Plan by ten years to
December 31, 2004
4. In their discrection on such other matters as may properly come
before the meeting.
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE AT LEFT
(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.)
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<PAGE>
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 S240.14a-11(c) or S240.14a-12
Thermedics Inc.
----------------
(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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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:
[X ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
