[PASTE UP LOGO]
470 Wildwood Street
Post Office Box 2999
Woburn, MA 01888-2999
April ___, 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 31, 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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[PASTE UP LOGO]
470 Wildwood Street
Post Office Box 2999
Woburn, Massachusetts 01888-2999
April ___, 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
1:30 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.
PAGE
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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 1:30 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 01888-2999. This Proxy Statement and the enclosed
Proxy were first furnished to Stockholders of the Corporation on
or about April ___, 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 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 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 note of a majority of shares present in person or by
proxy, and entitled to vote on the matter, is necessary for
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approval. Withholding authority to vote for a nominee for
Director or an instruction to abstain from voting on a proposal
will be treated as shares present and entitled to vote and, for
purposes of determining the outcome of the vote, will have the
same effect as a vote against the nominee or a proposal. With
respect to the election of Directors and the 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 ______________ 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.
- 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.
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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. He has been a
consultant to Thermo Electron since
January 1991. 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.
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, Thermo
TerraTech Inc. 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.
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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.,
ThermoLase Corporation, Thermo Instruments
Systems Inc., Thermo Power 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.
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 September 1994 and 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.
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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
Directors who are not employees of the Corporation, of
Thermo Electron or 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. Smith, Mr. Wood and Mr. Howard are all 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.
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
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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.
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 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 1934,
as amended (''Section 12 Registration"). In the event that the
effective date of Section 12 Registration occurs before the
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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
$_____ and $______ 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.
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
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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
Electron Cardiosystems Voltek
Name Corporation (3) Inc. (4) Corp. (5)
<S> <C> <C> <C>
Thermo Electron Corporation (6) N/A N/A N
Peter O. Crisp 64,434 16,500 2,5
Paul F. Ferrari 20,820 16,500 3,9
David H. Fine 48,682 2,783
George N. Hatsopoulos 2,328,408 7,733
John N. Hatsopoulos 479,225 1,288 7,7
Robert C. Howard 134,593 12,500
John T. Keiser 80,117 10,500
Victor L. Poirier 33,227 105,779
Louis S. Slaughter (7) 11,034 0
Arvin H. Smith 363,578 20,000
John W. Wood Jr. 154,674 44,699 60,6
Nicholas T. Zervas 0 30,505 1,5
All Directors and current 3,721,487 279,123 76,3
executive officers as a group (13
</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,
_______, 82,500, 120,100, 7,650 and 500,600 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 ("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. Shares beneficially owned by Mr. Wood
include 1,300 shares each held in two trusts of which Mr.
Wood's spouse is the 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 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 24 1995. 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
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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 of which Dr. G.
Hatsopoulos' spouse is a 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 435 shares each held by family trusts for the
benefit of two of Mr. J. Hatsopoulos' children and 112,500
shares held by 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's 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.
Smith, Mr. Wood and all Directors and executive officers as
a group include 2,500, 3,999, 4,999, 1,500, 56,649, and
69,647 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) Shares of the Common Stock beneficially owned by Thermo
Electron include ________ shares Thermo Electron or its
subsidiaries have the right to acquire within 60 days of
January 1, 1996 pursuant to the conversion of the
Corporation's 6/% subordinated convertible debentures due
1998. Thermo Electron beneficially owned 51.90% 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 four other
most highly compensated executive officers for the last three
fiscal years.
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The Corporation is required to appoint certain executive
officers and full-time employees of Thermo Electron as executive
officers of the Corporation, in accordance with the Thermo
Electron Corporate Charter. The compensation for these executive
officers is determined and paid entirely by Thermo Electron. The
time and effort devoted by these individuals to the Corporation's
affairs is provided to the Corporation under the Corporate
Services Agreement between the Corporation and Thermo Electron.
Accordingly, the compensation for these individuals is not
reported in the following table.
Summary Compensation Table
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Long Term
Compensation (1) Compensation
Securities Underlyin
Nameand Principal Position Options (No. of Shar
and Company)
Fiscal Year (2)
Salary Bonus
<S> <C> <C> <C> <C> <C>
John W. Wood Jr. (3) 1995 $180,000 $160,000 4,900(TMD)
President and 2,300(TCA)
900(TVL)
Chief Executive Officer 1994 $165,000 $127,000 5,400(TMD)
1,950(TMO)
1993 $156,500 $110,000 79,800(TMD)
19,162(TMO)
50,750(TVL)
John T. Keiser (4) 1995 $137,000 $91,000 700(TMD)
Senior Vice President 7,300(TMO)
1994 $130,000 $54,000 15,000(TMD)
3,000(TCA)
13,950(TMO)
PAGE
<PAGE>
1,500(THS)
Victor L. Poirier 1995 $141,000 $113,000 3,700(TCA)
Senior Vice President 10,500(TMO)
5,000(TLZ)
1994 $135,000 $66,000 15450(TMO)
500(THS)
1993 $115,500 $55,000 15,000(TMD)
50,000(TCA)
1,500 (TMO)
David H. Fine 1995 $124,000 $23,500 2,500(TMD)
Vice President 1,000(TMO)
1994 $114,500 $67,500 4,100(TMD)
31,200(TMO)
1,000(THS)
1993 $110,750 $67,000 70,500(TMD)
1,350(TMO)
Louis S. Slaughter (5) 1995 $155,000 -- --
Former Vice President 1994 $150,000 $82,000 1,600(TMD)
10,500(TMO)
PAGE
<PAGE>
1,000(THS)
1993 $145,000 $80,000 75,300(TMD)
5,625(TMO)
</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) 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.
(4) Mr. Keiser was appointed a senior vice president of the
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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., 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.
(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.
Option Grants in Fiscal 1995
<TABLE>
OPTION GRANTS in FISCAL 1995
<CAPTION>
Percent of Po
Total Options Re
Number of Granted to As
Securities Employees in Exercise Ra
Underlying OptionsFiscal Year Price Per ExpirationPr
Name Granted (1) Share Date fo
<S> <C> <C> <C> <C><C> <C> <C
John W. Wood Jr. (3) 4,900(TMD) 27.4% $15.52 3/14/02
2,300(TCA) 2.9% (2) $26.10 3/20/02
900 (TVL) 0.8% (2) $11.00 3/20/02
John T. Keiser 700 (TMD) 3.9% $15.52 3/14/02
2,300(TMO) 0.3% (2) $37.27 5/23/98
5,000(TMO) 0.6% (2) $48.90 11/28/02
PAGE
<PAGE>
Victor L. Poirier 3,700(TCA) 4.6% $26.10 3/20/02
500 (TMO) 0.1% (2) $37.27 5/23/98
10,000(TMO) 1.2% (2) $45.40 9/22/07 $
5,000(TLZ) 0.5% (2) $22.75 11/28/07
David H. Fine 2,500(TMD) 14.0% $15.52 3/14/02
1,000(TMO) 0.1% (2) $37.27 5/23/98
</TABLE>
(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
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<PAGE>
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 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.
Aggregated Option Exercises in Fiscal 1995 and Fiscal 1995
Year-end Option Values
<TABLE>
Aggregated Option Exercises In Fiscal 1995 And Fiscal 1995 Year-End Option Val
<CAPTION>
No. of Unexercise
Shares Options at Fisca
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
ThermedicsDetection -- -- 0/35,000
Thermo Cardiosystems 26,817 $646,425 39,483 0
Thermo Ecotek -- -- 47,098 0
Thermo Electron -- -- 6,000 0
Thermo Fibertek -- -- 900 0
ThermoTrex -- -- 56,649 0
Thermo Voltek -- --
John T. Keiser (3) Thermedics -- -- 15,700 /0
Thermo Cardiosystems -- -- 10,500 /0
Thermo Electron 3,375 $66,390 21,250 /-
ThermoSpectra -- -- 1,500 /0
PAGE
<PAGE>
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
PAGE
<PAGE>
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
</TABLE>
(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
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<PAGE>
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. 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
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<PAGE>
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 (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.
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The Committee believes that the compensation of executive
officers should reflect the scope of their responsibilities, the
success of the Corporation, and the contributions of each
executive to that success. In addition, the Committee believes
that base salaries should approximate the mid-point of
competitive salaries derived from market surveys and that
short-term and long-term incentive compensation should reflect
the performance of the Corporation and the contributions of each
executive.
External competitiveness is an important element of the
Committee's compensation policy. The competitiveness of the
Corporation's compensation for its executives is assessed by
comparing it to market data provided by its compensation
consultant and by participating in annual executive compensation
surveys, primarily "Project 777", an executive compensation
survey prepared by Management Compensation Services, a division
of Hewitt Associates. The majority of firms represented in the
Project 777 survey are included in the Standard & Poor's Index,
but do not necessarily correspond to the companies included in
the Corporation's peer group index, the 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
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<PAGE>
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 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.
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
18
PAGE
<PAGE>
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 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 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
maed as part of Thermo Electron's overall stock option program
and are 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". The annual cash compensation
paid to individual executives does not approach the $1 million
threshold, and it is believed that the stock incentive plans of
the Corporation qualify as "performance based". Therefore, the
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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 ten-year
return to Stockholders of the Corporation. The Corporation
achieved a compound annual return to Stockholders of ___% per
year over the last ten years. The Committee considered Mr. Wood's
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
20
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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
12/31/90 12/31/91 12/31/9212/31/93 12/31/94 12/31/95
TMD 100 94 119 230 194 422
AMEX 100 128 130 155 141
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
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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 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 the other 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
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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
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
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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 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
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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.
During 1995, the Corporation paid $285,000 to Trex Medical
Corporation, a subsidiary of Thermo Electron's ThermoTrex
Corporation subsidiary, for x-ray sources used in certain of the
Corporation's products. During 1995, the Corporation paid Thermo
Electron's Tecomet division $1,153,850 for metal fabrication
services rendered in connection with the manufacture of the heart
assist devices sold by the Corporation's Thermo Cardiosystems
subsidiary. 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.
-- 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
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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 new or additional
issuance of the Corporation's securities.
Thermo Electron, which owned approximately ____% 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.
________________________________________________________________
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--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
are subject to Stockholder approval. 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.
Summary 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 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
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year.
Terms of Options
The exercise price is fixed on the grant date 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 reserved for issuance under
the Stock Purchase Plan is _________ shares of the Corporation's
Common Stock and ___________ 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 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.
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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 _____% of
the outstanding voting stock of the Corporation on April 1, 1996
has indicated its intention to vote for the proposal.
The affirmative vote of a majority of the Common Stock
present and entitled to vote on this proposal is required to
approve the 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.
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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 ___, 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 ___, 1996
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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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only (as
Permitted by Rule
14a-6(e)(2))
[ ] 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):
[X] $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:
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<PAGE>
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
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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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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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As Amended and Restated
Effective November 1, 1995
THERMEDICS INC.
EMPLOYEES' STOCK PURCHASE PLAN
1. Definitions. As used in this Employees' Stock
Purchase Plan of Thermedics Inc., the following terms shall have
the meanings respectively assigned to them below:
(a) Base Compensation means annual or annualized base
compensation, exclusive of overtime, bonuses, contributions to
employee benefit plans, or other fringe benefits, sales
commissions, moving expense reimbursements or other special
payments.
(b) Beneficiary means the person designated as beneficiary
on the Participant's Enrollment Agreement or, if no such
beneficiary is named, the person to whom the Option is
transferred by will or under the applicable laws of descent and
distribution.
(c) Board means the Board of Directors of the Company.
(d) Code means the Internal Revenue Code of 1986, as
amended.
(e) Company means Thermedics Inc., a Massachusetts
corporation.
(f) Company Stock means the common stock, $.10 par value,
of the Company.
(g) Eligible Employee means a person who is eligible under
the provisions of Section 7 to receive an Option as of a
particular Grant Date.
(h) Enrollment Agreement means an agreement whereby a
Participant authorizes the Company to withhold payroll deductions
from his or her Gross Compensation.
(i) Exercise Date means a date not more than one year after
a Grant Date, as determined by the Board, on which Options must
be exercised by Eligible Employees.
(j) Grant Date means a date specified by the Board on which
Options are to be granted to Eligible Employees.
(k) Gross Compensation means Base Compensation plus sales
commissions, overtime pay and cash bonuses.
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2
(1) Market Value means, as of a particular date, the last
sale price of the Company Stock if such stock is reported on the
American Stock Exchange, or if not so reported, the average of
bid and asked prices of the Company Stock last quoted by NASDAQ
in the over-the-counter market on such date, or the closing price
of the Thermo Electron Stock reported by the New York Stock
Exchange, as the case may be.
(m) Option means an option to purchase shares of Stock
granted under the Plan.
(n) Option Shares means shares of Stock purchasable under
an Option, which shares may not be transferred by the Participant
until at least six months after the Exercise Date.
(o) Participant means an Eligible Employee to whom an
Option is granted and who authorizes the Company to withhold
payroll deductions by completing an Enrollment Agreement.
(p) Plan means this Employees' Stock Purchase Plan of the
Company, as amended from time to time.
(q) Related Corporation means any corporation which is a
parent corporation of the Company, as defined in Section 425(e)
of the Code, and any corporation controlled by that parent
corporation or the Company.
(r) Rule 16b-3 means Rule 16b-3 and any successor rule
promulgated under Section 16 of the Securities Exchange Act of
1934, as amended.
(s) Section 423 means Section 423 of the Code.
(t) Stock means Company Stock or Thermo Electron Stock.
(u) Thermo Electron Stock means the common stock, $1.00 par
value, of Thermo Electron Corporation, the parent corporation of
the Company.
2. Purpose of the Plan. The Plan is intended to
encourage ownership of Stock by employees of the Company and to
provide additional incentive for the employees to promote the
success of the business of the Company. It is intended that the
Plan shall be an "employee stock purchase plan" within the
meaning of Section 423.
3. Term of the Plan. The Plan shall become effective on
January 1, 1985. No option shall be granted under the Plan after
December 31, 2004.
4. Administration of the Plan. The Plan shall be
administered by the Board, which annually shall determine whether
to grant Options under the Plan, shall specify which dates shall
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<PAGE>
3
be Grant Dates and Exercise Dates, and shall fix the respective
maximum percentages of each Participant's Gross Compensation
which may be withheld for the purpose of purchasing shares of
Company Stock and Shares of Thermo Electron Stock; provided,
that, the total of such percentages shall not exceed ten percent
of the participant's Gross Compensation. The Board shall have
authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the
terms of Options granted under the Plan, and to make all other
determinations necessary or advisable for the administration of
the Plan.
The Board may appoint a committee, consisting of
"disinterested directors" as defined in Rule 16b-3, to
administer the Plan and may, in its sole and absolute discretion,
delegate any or all of the functions specified herein regarding
administration of the Plan to such committee.
5. Termination and Amendment of Plan. The Board may
terminate or amend the Plan at any time; provided, however, that
no amendment, unless approved by the holders of a majority of the
issued and outstanding shares of Company Stock shall be effective
if it would cause the Plan to fail to satisfy the requirements of
Rule 16b-3. No termination of or amendment to the Plan may
adversely affect the rights of a Participant with respect to any
Option held by the Participant as of the date of such termination
or amendment.
6. Shares of Stock Subject to the Plan. No more than an
aggregate of 375,000 shares of Company Stock and an aggregate of
126,562 shares of Thermo Electron Stock may be issued or
delivered pursuant to the exercise of Options granted under the
Plan, subject to adjustments made in accordance with Section 9.8.
Option Shares may be either shares of Company Stock which are
authorized but unissued or shares of Stock held by the Company in
its treasury, or shares of Thermo Electron Stock which are owned
by the Company or which are authorized but unissued or held by
Thermo Electron in its treasury. If an Option expires or
terminates for any reason without having been exercised in full,
the unpurchased Option Shares shall become available for other
Options granted under the Plan. The Company shall, at all times
during which Options are outstanding, reserve and keep available
shares of Company Stock and Thermo Electron Stock, as the case
may be, sufficient to satisfy such Options, and shall pay all
fees and expenses incurred by the Company in connection
therewith. In the event of any capital change in the outstanding
Stock as contemplated by Section 9.8, the number of shares of
Stock reserved and kept available by the Company shall be
appropriately adjusted.
7. Persons Eligible to Receive Options. Each employee of
the Company shall be granted an Option on each Grant Date on
which such employee meets all of the following requirements.
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4
(a) The employee has completed at least six months of
continuous employment for the Company or a Related Corporation.
Employment shall include any leave of absence for military
service, illness or other bona fide purpose which does not exceed
the longer of 90 days or the period during which the absent
employee's reemployment rights are guaranteed by statute or
contract.
(b) The employee is customarily employed by the Company for
more than 20 hours per week and for more than five months per
calendar year.
(c) The employee will not, after grant of the Option, own
stock possessing five percent or more of the total combined
voting power or value of all classes of stock of the Company or
of any Related Corporation. For purposes of this paragraph (c),
the rules of Section 425(d) of the Code shall apply in
determining the stock ownership of the employee, and stock which
the employee may purchase under outstanding options shall be
treated as stock owned by the employee.
(d) Upon grant of the Option, the employee's rights to
purchase stock under all employee stock purchase plans (as
defined in Section 423(b) of the Code) of the Company and its
Related Corporations will not accrue at a rate which exceeds
$25,000 of fair market value of the stock (determined as of the
Grant Date for such Option) for each calendar year in which such
option is outstanding at any time. The accrual of rights to
purchase Stock shall be determined in accordance with Section
423(b) (8) of the Code.
8. Dates for Granting Options. Options shall be granted
on each date designated by the Board as a Grant Date.
9. Terms and Conditions of Options.
9.1. General. All Options granted on a particular Grant
Date shall comply with the terms and conditions set forth in
Sections 9.3 through 9.12, and each Option shall be identical
except as to the number of shares and type of Stock purchasable
under the Option, which shall be determined in accordance with
Section 9.2.
9.2. Number of Shares. The maximum number of shares of
Company Stock which a Participant shall be permitted to purchase
shall be equal to the amount of the Participant's Gross
Compensation permitted to be withheld for purchasing Company
Stock during the period running from the Grant Date to the
Exercise Date, divided by the purchase price determined in
accordance with Section 9.3. The maximum number of shares of
Thermo Electron Stock which a Participant shall be permitted to
purchase shall be equal to the amount of the Participant's Gross
Compensation permitted to be withheld for purchasing Thermo
Electron Stock during the period running from the Grant Date to
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5
the Exercise Date, divided by the purchase price determined in
accordance with Section 9.3. The number of shares which a
Participant is permitted to purchase may be further limited by
the amount of payroll deductions actually withheld as of the
Exercise Date.
9.3. Purchase Price. The purchase price of Option Shares
shall be 95 percent of the Market Value of the Stock as of the
Grant Date. If the Grant Date shall fall on a Saturday, Sunday or
other legal holiday, Market Value shall be determined as of the
trading day immediately preceding the Grant Date.
9.4. Restrictions on Transfer. Options may not be
transferred otherwise than by will or under the laws of descent
and distribution, or pursuant to a qualified domestic relations
order. An Option may not be exercised by anyone other than the
Participant during the lifetime of the Participant. Option
Shares may not be sold or otherwise transferred by the
Participant until at least six months after the Exercise Date.
The Company shall have the right to place a legend on all stock
certificates representing Option Shares setting forth the
restriction on transferability of such shares.
9.5. Expiration. Each Option shall expire at the close of
business on the Exercise Date or on such earlier date as may
result from the operation of Section 9.6.
9.6. Termination of Employment of Participant. If a
Participant cases for any reason, voluntary or involuntary (other
than death or retirement), to be continuously employed by the
Company or a Related Corporation, his or her Option shall
immediately expire, and the Participant's accumulated payroll
deductions shall be returned by the Company with interest
pursuant to Section 9.12. For purposes of this Section 9.6, a
Participant shall be deemed to be employed throughout any leave
of absence for military service, illness or other bona fide
purpose which does not exceed the longer of ninety days or the
period during which the Participant's reemployment rights are
guaranteed by statute or by contract. If the Participant does
not return to active employment prior to the termination of such
period, his or her employment shall be deemed to have ended on
the 91st day of such leave of absence.
9.7 Retirement or Death of Participant. If a Participant
retires or dies, the Participant or, in the case of death, his or
her Beneficiary, shall be entitled to withdraw the Participant's
accumulated payroll deductions with interest pursuant to Section
9.12, or to purchase shares on the Exercise Date to the extent
that the Participant would have been so entitled had he or she
continued to be employed by the Company. The number of shares
purchasable shall be limited by the amount of the Participant's
accumulated payroll deductions as of the datae of his or here
retirement or death. Accumulated payroll deductions shall be
applied by the Company toward the purchase of shares unless the
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Participant or Beneficiary withdraws such funds prior to the
Exercise Date.
9.8 Capital Changes Affecting the Stock. In the event
that, between the Grant Date and the Exercise Date of an Option,
a stock dividend is paid or becomes payable in respect of either
type of Stock or there occurs a split-up or contraction in the
number of shares of either type of Stock, the number of shares
for which the Option may thereafter be exercised and the price to
be paid for each such share shall be proportionately adjusted.
In the event that, after the Grant Date, there occurs a
reclassification or change of outstanding shares of either type
of Stock or a consolidation or merger of the Company or Thermo
Electron Corporation with or into another corporation or a sale
or conveyance, substantially as a whole, of the property of the
Company or Thermo Electron Corporation, the Participant shall be
entitled on the Exercise Date to receive shares of stock or other
securities equivalent in kind and value to the shares of stock he
or she would have held if he or she had exercised the Option in
full immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance and had continued to
hold such shares (together with all other shares and securities
thereafter issued in respect thereof) until the Exercise Date.
In the event that there is to occur a recapitalization involving
an increase in the par value of either type of Stock which would
result in a par value exceeding the exercise price under an
outstanding Option, the Company shall notify the Participant of
such proposed recapitalization immediately upon its being
recommended by the Board to the Company's shareholders, or by the
Board of Directors of Thermo Electron Corporation to its
shareholders, after which the Participant shall have the right to
exercise his or her Option prior to such recapitalization; if the
Participant fails to exercise the Option prior to
recapitalization, the exercise price under the Option shall be
appropriately adjusted. In the event that, after the Grant Date,
there occurs a dissolution of liquidation of the Company or
Thermo Electron Corporation, except pursuant to a transaction to
which Section 425(a) of the Code applies, each Option to purchase
Stock of the company to be dissolved or liquidated shall
terminate, but the Participant holding such Option shall have the
right to exercise his or her Option prior to such dissolution or
liquidation.
9.9. Payroll Deductions. Any Eligible Employee, who wishes
to authorize payroll deductions for the purchase of Option Shares
under the Plan, must complete and return to the human resources
department of the Company prior to the Grant Date an Enrollment
Agreement indicating the total percentage (which shall be a full
integer between one and ten) of his or her Gross Compensation
which is to be withheld each pay period, and indicating the
respective percentages for Company Stock and Thermo Electron
Stock (each of which shall be a full integer between one and the
maximum determined by the Board in accordance with Section 4
hereof, which shall initially be five). Prior to the Exercise
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Date, the Participant shall be permitted only once to (a)
withdraw accumulated payroll deductions, (b) discontinue payroll
deductions, or (c) decrease, but not increase, the percentages of
Gross Compensation withheld. The Participant may not recommence
payroll deductions at any time prior to the Exercise Date.
9.10. Exercise of Options. On the Exercise Date the
Participant shall be deemed to have exercised his or her Option
to purchase the maximum number of Option Shares purchasable by
his or her accumulated payroll deductions, provided that:
(a) The number of Option Shares of either type of Stock
purchasable shall not exceed the number of shares the Participant
is entitled to purchase pursuant to Section 9.2.
(b) If the total number of Option Shares of either type of
Stock which all Participants elect to purchase, together with any
Option Shares of such type of Stock already purchased under the
Plan, exceeds the total number of shares of such type of Stock
which may be purchased under the Plan pursuant to Section 6, the
number of shares of such type of Stock which each Participant is
permitted to purchase shall be decreased pro rata based on the
Participant's accumulated payroll deductions with respect to such
type of Stock in relation to all accumulated payroll deductions
currently being withheld under the Plan with respect to such type
of Stock.
(c) If the number of Option Shares purchasable includes a
fraction, such number shall be adjusted to the next smaller whole
number and the purchase price shall be adjusted accordingly.
(d) Notwithstanding the foregoing, a Participant may notify
the Company's human resources department at least 30 days prior
to an Exercise Date, by completing an Enrollment/Change
Agreement, that he or she elects not to exercise his or her
Option and desires to withdraw his or her accumulated payroll
deductions withheld under the Plan, as provided in Section 9.9.
9.11. Delivery of Stock. Within a reasonable time after
the Exercise Date, the Company shall deliver or cause to be
delivered to the Participant a certificate or certificates for
the number of shares purchased by the Participant. If any law or
applicable regulation of the Securities and Exchange Commission
or other body having jurisdiction in the premises shall require
that the Company or the Participant take any action in connection
with the shares being purchased under the Option, delivery of the
certificate or certificates for such shares shall be postponed
until the necessary action shall have been completed, which
action shall be taken by the Company at its own expense, without
unreasonable delay. The participant shall have no rights as a
shareholder in respect of shares for which he or she has not
received a certificate.
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9.12. Return of Accumulated Payroll Deductions. In the
event that the Participant or the Beneficiary is entitled to the
return of accumulated payroll deductions, whether by reason of
voluntary withdrawal, termination of employment, retirement,
death, or in the event that accumulated payroll deductions exceed
the price of Option Shares purchased, such amount, together with
interest thereon at the rate fixed by the Board of Directors
(which rate for a particular plan year running from Grant Date to
Exercise Date shall be fixed annually by the Board of Directors
prior to the commencement of such period), shall be returned
within a reasonable time by the Company to the Participant or the
Beneficiary, as the case may be; provided, however, that
interest shall not be paid on any amount returned which is less
than the purchase price of one Option Share of the type of Stock
for which such payroll deductions were withheld.
