SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------------------------------
FORM 10-K
(mark one)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended April 1, 1995
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-9549
THERMO PROCESS SYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Delaware 04-2925807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12068 Market Street
Livonia, Michigan 48150
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, $.10 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to the
filing requirements for at least the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference into Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of May 26, 1995, was approximately $37,269,000.
As of May 26, 1995, the Registrant had 17,351,555 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Fiscal 1995 Annual Report to Shareholders for
the year ended April 1, 1995, are incorporated by reference into Parts I
and II.
Portions of the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held on September 19, 1995, are incorporated
by reference into Part III.
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PART I
Item 1. Business
(a) General Development of Business.
Thermo Process Systems Inc. (the Company or the Registrant) provides a
range of specialized environmental services. The Company provides
environmental science and consulting services, laboratory-based testing,
and nuclear health and safety services. These services were provided
through the Company's Thermo Terra Tech joint venture prior to April 2,
1995. Through the Company's majority-owned, publicly held Thermo
Remediation Inc. (Thermo Remediation) subsidiary, the Company operates a
network of soil-remediation centers that use thermal processing to remove
and destroy petroleum contamination. Through its Thermo Fluids subsidiary,
Thermo Remediation also collects and recycles used motor oil and provides
services such as wastewater processing. As of April 1, 1995, the Company
owned 66% of Thermo Remediation's common stock and holds a $2,650,000
principal amount 3.875% subordinated convertible note due 2000 issued by
Thermo Remediation, convertible into shares of Thermo Remediation common
stock at a conversion price of $9.83 per share. The Company also provides
equipment and services for the automated heat treating of metal parts.
On February 6, 1995, the Company acquired all of the issued and
outstanding capital stock of Engineering, Technology and Knowledge
Corporation (ETKC). ETKC's sole subsidiary, Elson T. Killam Associates,
Inc. (Killam Associates), is a leading provider of comprehensive
environmental consulting and professional engineering services in selected
areas of the United States.
The Company's majority-owned Beheersmaatschappij J. Amerika N.V. (J.
Amerika) subsidiary is a provider in the Netherlands of underground tank
and other environmental services. On March 29, 1995, J. Amerika acquired
the outstanding shares of Refining and Trading Holland B.V., which conducts
business under the name North Refinery. North Refinery, located in
Delfzijl, Holland, specializes in processing "off-spec" and contaminated
petroleum fluids into usable products such as gas oil, diesel oil, and fuel
oil. As a result of combining the businesses of J. Amerika and North
Refinery, J. Amerika N.V. intends to change its name to Thermo EuroTech
N.V. (Thermo EuroTech). As of April 1, 1995, the Company owned 62% of the
outstanding common stock of J. Amerika.
Effective April 2, 1995, the Company agreed to dissolve the Thermo
Terra Tech joint venture and to purchase the businesses formerly operated
by the joint venture from Thermo Instrument Systems Inc. (Thermo
Instrument) for $34.3 million in cash. To finance this transaction, the
Company issued to Thermo Electron a $35.0 million promissory note that
bears interest at the Commercial Paper Composite Rate plus 25 basis points
and is due May 13, 1997.
On May 10, 1995, the Company acquired substantially all of the assets
of Lancaster Laboratories, Inc. and its affiliate Clewmark Holdings
(collectively Lancaster Laboratories) for $16.8 million in cash, plus the
assumption of $5.4 million in bank indebtedness existing as of the close of
acquisition. The purchase price is subject to a post-closing adjustment.
Lancaster Laboratories, based in Lancaster, Pennsylvania, is a provider of
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high-quality analytical services to the environmental, food, and
pharmaceutical industries.
The Company was incorporated on May 30, 1986, as an indirect, wholly
owned subsidiary of Thermo Electron Corporation (Thermo Electron). Prior to
its incorporation, the Company's operations were conducted by two wholly
owned subsidiaries of Thermo Electron. As of April 1, 1995, Thermo Electron
owned 13,933,591 shares of the common stock of the Company, representing
80% of such stock then outstanding. Thermo Electron is a world leader in
environmental monitoring and analysis instruments and a manufacturer of
biomedical products including heart-assist systems and mammography systems,
papermaking and recycling equipment, alternative-energy systems, and other
specialized products. Thermo Electron also conducts advanced technology
research and development.
Thermo Electron intends, for the foreseeable future, to maintain at
least 50% ownership of the Company. During fiscal 19951, Thermo Electron
purchased 794,430 shares of the Company's common stock in the open market
at a total price of $6,466,000.
(b) Financial Information About Industry Segments.
The Company conducts business in the environmental services industry
segment. The Company provides environmental science and engineering
services, laboratory-based testing, and nuclear health and safety services.
The Company also provides environmental services for the remediation and
testing of petroleum-contaminated soils and groundwater and for
waste-fluids recycling, as well as specialized metallurgical-processing
services. In addition, the Company designs, manufactures, and installs
advanced custom-engineered thermal-processing systems used in manufacturing
to impart desirable metallurgical properties, such as added tensile
strength and wear resistance, into treated parts.
(c) Description of Business.
(i) Principal Products and Services
Environmental Analysis and Field Services
The Company provides two broad types of environmental analysis and
field services: environmental and radiochemical analysis, and environmental
science and consulting services.
Environmental and Radiochemical Analysis Services. Through a network
of facilities in the United States, the Company provides comprehensive
laboratory-based environmental testing, analysis, and related services
to detect and measure hazardous wastes and radioactive materials. Each
of the laboratories in the Company's network has developed
specializations, and samples obtained by one laboratory can be shipped
to the specialists in the network for analysis, enabling the network
to provide a full complement of analytical and testing services.
Analytical laboratory services consist of a comprehensive range of
analytical tests to detect and measure organic contaminants, inorganic
contaminants, and radioactive materials in samples of soil, water,
air, industrial wastes, and biological materials. In addition, the
1 References to fiscal 1995, 1994, and 1993 herein are for the fiscal
years ended April 1, 1995, April 2, 1994, and April 3, 1993,
respectively.
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Company's analytical laboratories have the capability to analyze
"mixed wastes," which are hazardous wastes that also are radioactive.
The handling of mixed wastes requires special testing procedures and
facilities, including a license from the Nuclear Regulatory Commission
or its designees to accept shipments of such materials. The Company
also has established detailed procedures and strict operating
standards to ensure consistent performance and to allow it to
participate in the Environmental Protection Agency's (EPA) Contract
Laboratory Program (CLP). The EPA, through the CLP, solicits bids on a
competitive basis from commercial laboratories to perform testing and
analysis.
The Company is a provider of radiation and nuclear health physics
services, including site surveys for radioactive materials, on-site
samples and analysis in support of decontamination programs, and
dosimetry services to measure personnel exposure. As part of its
on-site services, Company personnel usually perform a preliminary
survey using portable radiation-detection equipment. As a result of
this survey, samples are taken at critical locations and are then
analyzed radiometrically and radiochemically in a mobile laboratory
facility at the site or at one of the Company's laboratories. This
data is then used to plan cleanup operations. A substantial part of
the Company's health physics services has been performed under the
U.S. Department of Energy's (DOE) Formerly Utilized Sites Remedial
Action Program and Surplus Facilities Management Program. The Company
also supplies reusable thermoluminescent dosimeter badges. These
badges, worn by personnel working in areas where radioactive material
may be present, are periodically returned to the Company for
processing to determine the level of radiation exposure.
Environmental Science and Engineering Services. Environmental science
services include the preparation of environmental impact studies,
which are used to predict the environmental effects of a given
activity. The Company provides these services through several offices
located along the eastern seaboard of the United States. Typically,
the Company's customers require an environmental study to meet the
standards of a monitoring program or to obtain construction or
operating permits. For example, the Company studies the impact of
thermal pollution from nuclear power plants and the effects of
hydroelectric power plant construction on fish populations. The
Company also monitors soil around landfills for toxic contaminants,
underground storage tanks, and ambient air conditions for siting and
permit applications.
In addition, the Company provides a wide range of environmental
consulting services to private- and public-sector clients. These
services include the design and inspection of water supply and
wastewater treatment facilities; investigations of different methods
to clean up hazardous waste sites; assistance in obtaining government
permits; transportation-related and similar types of infrastructure
engineering, survey, and land-use planning; and support services which
include mechanical, electrical, and structural engineering.
On February 6, 1995, the Company acquired all of the issued and
outstanding capital stock of ETKC from Nord Est S.A. The purchase
price for ETKC's stock was (a) $12.5 million in cash and (b) a zero
coupon note, payable in February and May 1998, with a face value of
$28 million and a present value of $22.3 million as of the acquisition
closing date. The Company also exchanged certain outstanding options
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to purchase Killam Associates' stock for $1.9 million in cash and
options to purchase the Company's common stock, which options were
valued at $6.9 million. To help finance this acquisition, the Company
issued to Thermo Electron a $38 million promissory note, due 1997.
ETKC's sole subsidiary, Killam Associates, is a leading provider of
comprehensive environmental consulting and professional engineering
services in selected areas of the United States. Killam Associates is
one of the most highly respected sources of expertise in areas related
to the design, planning, and construction supervision of municipal and
privately owned environmental facilities, including water treatment
plants, waste treatment plants, and hazardous wastewater facilities.
Killam Associates specializes in full-service contract operations to
plant owners in the public and private sectors. These services
facilitate regulatory compliance, optimize day-to-day plant
operations, reduce costs, provide competent, experienced personnel,
and promote good community relations.
The market for the Company's environmental analysis and field services
results primarily from customers who need to comply with federal, state,
and local regulations that relate to environmental protection, the
management and treatment of hazardous wastes, and the need to upgrade and
expand infrastructure in response to economic development. These customers
typically rely on independent laboratories and environmental science and
engineering consultants, such as the Company's, for ongoing analysis and
monitoring of such wastes and direction for compliance with various
environmental regulations.
A substantial portion of the Company's analytical laboratory and
environmental science services sales are made to existing customers on a
repeat basis. Environmental science services are often performed as
multiyear studies. In addition to federal, state, and local governments,
customers include public utilities, consulting and construction engineers,
waste management companies, oil refineries, mining companies, chemical
manufacturers, architectural and engineering firms, and a variety of
service companies involved with real estate transactions. The Company
participates in industrial trade shows and technical conferences concerning
pollution control, water quality, environmental management, specific
cleanup efforts (e.g. Superfund), and industrial hygiene.
During fiscal 1995, 1994, and 1993, the Company derived revenues of
$70.9 million, $54.8 million, and $55.0 million, respectively, from
environmental analysis and field services.
Environmental Remediation Services
The Company, through its majority-owned, publicly held Thermo
Remediation subsidiary, operates a network of soil-remediation centers
serving customers in more than a dozen states. Thermo Remediation's Thermo
Fluids subsidiary collects and recycles used motor oil and provides
services such as wastewater processing. In October 1994, Thermo Remediation
acquired a soil-remediation facility in South Tacoma, Washington (renamed
TPST Woodworth) from Woodworth & Company, Inc. for $4.7 million in cash. In
December 1994, Thermo Remediation acquired a soil-remediation facility in
Baltimore County, Maryland (renamed TPST Maryland) from the principals of
Bryn Awel Corporation for $6.8 million in cash.
At the Company's soil-remediation centers, soil is thermally treated
to remove and destroy petroleum contamination caused by leaking underground
storage tanks (USTs), aboveground storage tanks, spills, and other sources.
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The Company's soil-remediation centers are environmentally secure
facilities for receiving, storing, and processing petroleum-contaminated
soils. Each site consists principally of a soil-storage area and a
soil-remediation unit (SRU). The Company maintains standards for acceptance
of petroleum-contaminated soil. Information required by the Company prior
to the acceptance of soil includes identification of the generator, the
origin and nature of the contamination, and a complete site history. The
Company requires a preacceptance analysis by environmental analytical
testing laboratories to identify contaminants and their concentrations. In
addition, the customer must certify that the soil is not "hazardous" as
defined by EPA, state, or local regulations. The Company generates an
individual manifest for each truckload of soil that meets the Company's
acceptance criteria.
The Company screens all soil prior to treatment to remove large
nonprocessable materials such as glass, metal, rubber, paper, and stones.
Screened soil is then loaded into the SRU's primary combustion chamber, a
rotary kiln that heats the soil to temperatures ranging from approximately
400 to 1,000 degrees Fahrenheit to volatilize petroleum contaminants from
the soil. The volatilized petroleum gases pass from the rotary kiln into a
secondary combustion chamber, where they are heated to temperatures ranging
from 1,400 to 1,800 degrees Fahrenheit and are completely oxidized to form
carbon dioxide and water vapor. After discharge from the SRU, clean soil is
stored in piles and labeled and sampled for analysis by certified
environmental laboratories. After receiving certification that the soil
meets local cleanup standards, the soil is trucked off-site for a variety
of uses, such as construction fill.
The market for remediation of petroleum-contaminated soils, as with
many other waste markets, was created by environmental regulations and
economic concerns. The Company's customers include the major oil companies,
public utilities, large industrial companies, the federal government
including the military, and certain municipal governments and agencies.
The Company and Thermo Electron entered into a development agreement
under which Thermo Electron agreed to fund up to $4.0 million of the direct
and indirect costs of the Company's development of soil-remediation
centers. In exchange for this funding, the Company granted Thermo Electron
a royalty equal to approximately 3% of net revenues from soil-remediation
services performed at the centers developed under the agreement. The
royalty payments may cease if the amounts paid by the Company yield a
certain internal rate of return to Thermo Electron on the funds advanced to
the Company under the agreement. The Company recorded contract revenues of
$776,000 and $1,793,000 under the agreement for development costs expended
in fiscal 1994 and 1993, respectively. As of October 2, 1993, funding under
the agreement was complete. Two sites, Southern California and West Palm
Beach, Florida, were developed under the agreement and the Company paid
royalties of $432,000 in fiscal 1995, $351,000 in fiscal 1994, and $149,000
in fiscal 1993 to Thermo Electron.
The Company, through its Thermo Fluids subsidiary, collects, tests,
processes, and recycles used motor oil and other industrial oils. In
addition, the Company collects and recycles oily water and oil filters.
Thermo Fluids has collection facilities located in Phoenix and Tucson,
Arizona. From these sites, Thermo Fluids operates a fleet of oil and water
collection trucks to pick up waste oils and oily water. Outlying areas in
Arizona are serviced from one of these two locations.
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The Company through its J. Amerika subsidiary provides environmental
and underground tank services. J. Amerika, which is a provider in the
Netherlands of services for remediating petroleum-contaminated groundwater,
is seeking to expand its business to include the remediation of
petroleum-contaminated soil, although to date the Company's efforts to
secure the necessary operating permits have been unsuccessful.
On March 29, 1995, J. Amerika acquired the outstanding shares of
Refining and Trading Holland B.V., which conducts business under the name
North Refinery, from Stalt Holding B.V. The purchase price for North
Refinery's stock was 9.6 million Dutch guilders (approximately $6.2
million) and 228,570 shares of J. Amerika's capital stock, valued at 1.3
million Dutch guilders (approximately $0.9 million). North Refinery, a
petroleum-fluids recycling operation, is located on 15 acres in Delfzijl,
Holland and specializes in processing "off-spec" mixtures of oil that
contain water, ash, and sediment into commercially tradable end products
used in blending. The off-spec oil is filtered and centrifuged at elevated
temperatures in preparation for distillation. Using a completely automated
distillation system, the refinery has the capacity to process 120,000
metric tons per year. Processing capacity depends on the pre-treatment
requirements of the off-spec oil or chemical waste (feedstock) and as such
depends on the quality of the feedstock most of which the refinery receives
from Russian oil refineries. During the refining process, samples are
continuously tested to monitor the quality of the process flow. After
distillation, the resulting end product consists mainly of two commercially
tradable products that are sold to blenders who incorporate them into
commercial products. North Refinery also holds a chemical-waste permit for
the processing of a special classification of oil-contaminated liquids.
With the recent grant of this chemical-waste permit, North Refinery has
started processing chemical waste stream products. The end product is light
gas oil or heavy gas oil, which is used for fuel blending. Light gas oil is
used in blending to make diesel fuels. Heavy gas oil is used in blending to
make marine fuels or used as a feed material to catalytic cracker
operations. The market for blending gas oils is very large and oils such as
North Refinery's end products represent a very small percentage of the
total market.
During fiscal 1995, 1994, and 1993, the Company derived revenues,
excluding related party development revenues discussed above, of $36.2
million, $28.8 million, and $19.1 million, respectively, from its
environmental remediation services.
Metallurgical Services
The Company provides a comprehensive range of metallurgical
thermal-processing services at its facilities in Minnesota and California.
Metallurgical-processing services performed include hardening, annealing,
stress relieving, normalizing, and tempering, and are performed over a
range of temperatures and in controlled metallurgical atmospheres, as well
as thermal treatment using induction hardening methods. Much of the work
performed is specialized, requiring the treatment of complex parts without
altering dimensions or other specifications or, in some cases, requiring
the correction of dimensional differences. In many cases, the Company works
with customers to develop specifications and methods for metallurgical
processing of their products.
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During fiscal 1995, 1994, and 1993, the Company derived revenues of
$12.3 million, $10.8 million, and $12.2 million, respectively, from its
metallurgical services.
Process Systems
The Company's thermal-processing furnaces include a wide variety of
systems such as continuous, controlled-atmosphere furnace systems and batch
furnace systems. The Company's customers use these systems in high-volume
manufacturing operations such as those employed in the automotive and
heavy-equipment industries. The Company's proprietary multi-chamber
carburizing systems allow users to regulate temperature and carbon
atmosphere requirements with high precision and repeatability, resulting in
a more efficient process and higher quality, more uniform parts.
The Company's products also include integral-quench batch furnaces
with automated materials-handling systems and process monitoring and
control systems that incorporate proprietary software, sensors,
programmable logic controllers, and other instruments to monitor operating
parameters and to control furnace functions. In addition, the Company
supplies vacuum furnaces, including conventional two- and six-bar single
chamber systems. Heat processing in a vacuum eliminates the detrimental
effects of contaminating gases, such as oxygen, which can cause corrosion
and surface defects in processed parts. Vacuum processing and related
technologies have applications in many industries, but especially in the
manufacture of automotive components, aerospace and electronics components,
and medical implants.
During fiscal 1995, 1994, and 1993, the Company derived revenues of
$14.4 million, $15.0 million, and $16.9 million, respectively, from its
process systems.
(ii) New Products
The Company has made no commitments to new products that would require
the investment of a material amount of the Company's assets.
(iii) Raw Materials
The feedstock used by North Refinery has historically been obtained
from Russian oil refineries through traders located in Moscow. In fiscal
1994, prior to its acquisition by the Company, North Refinery experienced
an interruption of the Russian oil supply which adversely affected its
business. North Refinery is concentrating on moving its dependence upon
Russian oil to other sources of chemical waste and non-Russian oil.
The principal materials used by the Company in its manufacturing
operations are fabricated steel, alloy castings, and ceramic and insulating
refractory materials. To date, the Company has not experienced any
difficulty in obtaining any of the materials or components used in its
operations and does not foresee any such difficulty in the future. The
Company has multiple sources for all of its significant raw material needs.
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(iv) Patents, Licenses, and Trademarks
The Company currently owns a number of U.S. patents. Although the
Company believes that patent protection provides it with competitive
advantages with respect to certain portions of its business and will
continue to seek patent protection when appropriate, the Company also
believes that its business depends primarily upon trade secrets and the
technical and marketing expertise of its personnel.
The Company has acquired specialized furnace technology to braze, or
fuse, aluminum through an exclusive cross-license arrangement with a
British firm, Camlaw Ltd. (Camlaw). Under the agreement, the Company will
pay Camlaw a royalty of between 5% and 10% of net sales of aluminum-brazing
furnaces. Camlaw, in turn, has agreed to a similar royalty arrangement on
any sales of furnaces in the U.K. employing the Company's
continuous-atmosphere pusher technology.
(v) Seasonal Influences
While the Company conducts significant operations year-round, several
of its soil-remediation centers, particularly in Oregon, Virginia,
Washington, and Maryland, experience seasonal fluctuations in their
remediation activity due to a reduction in soil excavations during winter
months. In Europe, North Refinery may also experience a decline in the
feedstock delivered to its facilities during winter months, due to frozen
waterways. Certain environmental testing services, such as field sampling,
may decline in winter months. Such seasonal influences may have a material
effect on the Company's revenues.
(vi) Working Capital Requirements
In general, there are no special inventory requirements or credit
terms extended to customers that would have a material adverse effect on
the Company's working capital.
(vii) Dependency on a Single Customer
The Company derived 6%, 16%, and 17% of its total revenues in fiscal
1995, 1994, and 1993, respectively, from contracts or subcontracts with the
federal government.
(viii) Backlog
The backlog of firm orders for the Company's environmental analysis
and field services was $66,228,000 and $32,225,000 as of April 1, 1995 and
April 2, 1994, respectively. Environmental remediation and metallurgical
services are provided on a current basis pursuant to purchase orders.
Accordingly, there is no backlog for these services. The backlog of firm
orders for the Company's process systems products was $4,361,000 and
$3,536,000 as of April 1, 1995 and April 2, 1994, respectively. The process
systems backlog includes the uncompleted portion of equipment contracts
that are accounted for using the percentage-of-completion method. Of the
fiscal 1995 backlog amount, substantially all orders are expected to be
filled within the current fiscal year.
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(ix) Government Contracts
Approximately 6% of the Company's revenues in fiscal 1995 was derived
from contracts or subcontracts with the federal government that are subject
to renegotiation of profits or termination. The Company does not have any
knowledge of threatened or pending renegotiation or termination of any
material contract or subcontract.
(x) Competition
Environmental Analysis and Field Services
Hundreds of independent analytical testing laboratories and consulting
firms compete for environmental services business nationwide. Many of these
firms use equipment and processes similar to those of the Company.
Competition is based not only on price, but also on reputation for
accuracy, quality, and the ability to respond rapidly to customer
requirements. In addition, many industrial companies have their own
in-house analytical testing capabilities. The Company believes that its
competitive strength lies in certain niche markets within which the Company
is recognized for its expertise.
The Company's newly acquired Killam Associates subsidiary is engaged
in highly competitive markets in all of its service areas. In its
geographic service area, competition consists of small one- to three-person
firms offering limited scope of services, as well as much larger firms that
may be regional, national, or international in the scope of services they
offer. The principal competitive factors for the Company are: reputation;
experience; breadth and quality of services offered; and technical,
managerial, and business proficiency.
Environmental Remediation Services
The Company believes that there are two other companies that operate
fixed-site thermal-treatment facilities for soil remediation in multiple
states. However, several large waste management companies are analyzing
this market and may compete with the Company in the future. As a
consequence of the Company's strategy and customer base, the Company's
current competition is primarily from other fixed-site thermal-treatment
facilities and from landfills. However, the market for
petroleum-contaminated soil-processing services is highly fragmented and
the Company also competes with operators of mobile thermal-treatment
facilities, bioremediation and vapor-extraction technologies and, in
certain states, with asphalt plants and brick kilns that use the
contaminated soil in their production processes. The Company competes
primarily based on its ability to offer its customers superior protection
from environmental liabilities. Many of the Company's largest customers,
such as the major oil companies, are extremely sensitive to environmental
liability and therefore conduct thorough environmental audits of
soil-treatment facilities before qualifying them as approved facilities.
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These approvals constitute an important barrier to entry into this segment
of the soil-remediation market. Although the Company typically prices its
services at a premium over landfills and other treatment technologies,
competitive conditions limit the prices charged by the Company in each
local market. Pricing is therefore a major competitive factor for the
Company.
Thermo Fluids operates the largest fleet of collection vehicles in
Arizona. Thermo Fluids competes with numerous smaller and several larger
collection companies in its current market.
North Refinery faces competition for Russian oil from some small
companies, major oil companies, Russian refineries, and a company with a
similar distillation technology in Italy. It is the Company's strategy to
reduce dependence on the Russian oil business by making the transition to
process other sources of oil and chemical waste. The market for blending
gas oils is very large and oils such as North Refinery's end products
represent a very small percentage of the total market.
Metallurgical Services
The market for metallurgical services is typically regional and very
competitive. Both regions in which the Company has facilities contain
numerous competitors. In addition, in-house heat-treating facilities
provide a major source of competition. The Company competes in this segment
on the basis of services provided, turnaround time, and price.
Process Systems
The market for thermal-processing systems is subject to intense
competition worldwide. The Company is aware of at least eight companies
that market a number of products comparable to the Company's, but
competition for particular projects is typically limited to fewer
companies. The Company competes on the basis of several factors, including
technical performance, product quality and reliability, timely delivery,
and often price. Certain products sold by the Company's competitors are
less expensive than comparable products sold by the Company.
(xi) Environmental Protection Regulations
The Company believes that compliance by the Company with federal,
state, and local environmental protection regulations will not have a
material adverse effect on its capital expenditures, earnings, or
competitive position.
(xii) Number of Employees
At April 1, 1995, the Company employed 1,609 persons.
(d) Financial Information About Exports by Domestic Operations and About
Foreign Operations.
The Company's exports by domestic operations and foreign operations
are currently insignificant.
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(e) Executive Officers of the Registrant.
Present Title
Name Age (Year First Became Executive Officer)
---------------------- --- --------------------------------------------
Dr. John P. Appleton 60 President and Chief Executive Officer (1993)
John N. Hatsopoulos 60 Vice President and Chief Financial Officer
(1988)
Jeffrey L. Powell 36 Vice President (1994)
Bruce J. Taunt 44 Vice President, Finance and Administration
(1994)
Paul F. Kelleher 52 Chief Accounting Officer (1986)
Each executive officer serves until his successor is chosen or
appointed by the Board of Directors and qualified or until earlier
resignation, death, or removal. All executive officers except Dr. Appleton,
Mr. Powell, and Mr. Taunt have held comparable positions for at least five
years, either with the Company or with its parent company, Thermo Electron.
Dr. Appleton has served as a Vice President of Thermo Electron since 1975
in various managerial capacities. Mr. Powell has been President and Chief
Operating Officer of Thermo Remediation since December 1991. From March
1989 until January 1991, Mr. Powell was Vice President, Sales and
Marketing, of Thermo Remediation and from January 1991 through December
1991 was President of Thermo Remediation. Mr. Taunt has been Vice President
of Finance and Administration since 1992. Prior to joining the Company, Mr.
Taunt was Vice President and Controller of the Cross Company, a subsidiary
of Cross and Trecker. Messrs. Hatsopoulos and Kelleher are full-time
employees of Thermo Electron, but devote such time to the affairs of the
Company as the Company's needs reasonably require.
Item 2. Properties
The location and general character of the Company's principal
properties as of April 1, 1995, are as follows:
The Company owns approximately 369,000 square feet of office,
engineering, laboratory, production, and manufacturing space, principally
in the Netherlands, Minnesota, New Jersey, California, and New Mexico, and
leases approximately 810,000 square feet of office, engineering,
laboratory, production, and manufacturing space under leases expiring from
fiscal 1995 to 2008, principally in California, Michigan, Massachusetts,
New Hampshire, New Jersey, New Mexico, New York, and Vermont. The Company
also owns approximately 10 acres in Adelanto, California, approximately
four acres in West Palm Beach, Florida, approximately four acres in
Portland, Oregon, approximately 20 acres in Columbia, South Carolina, and
approximately 63 acres in Baltimore County, Maryland, from which it
provides soil-remediation services. The Company occupies approximately one
acre in Greenville, South Carolina, pursuant to a lease that expires in
1997, from which it provides soil-remediation services. The Company
operates its SRU on approximately two and one-half acres in Chester,
Virginia, pursuant to an agreement that expires in 1998, but which can be
terminated by the Company at an earlier date. The Company occupies
approximately five acres from which it provides soil-remediation services
in Tacoma, Washington, pursuant to a lease that expires in 2004. Thermo
Fluids occupies an aggregate of approximately eight acres on two sites in
Arizona, consisting of office space, fluids-recycling and maintenance
facilities, and sites for fluids storage tanks. North Refinery occupies
12PAGE
<PAGE>
approximately 15 acres in Delfzijl, Holland, consisting of office space,
distillation facilities, and oil storage tanks, pursuant to a lease that
expires in 2059.
The Company believes that these facilities are in good condition and
are adequate for its present operations and that other suitable space is
readily available if any of such leases are not extended.
Item 3. Legal Proceedings
The Company has been notified that the EPA has determined that a
release or a substantial threat of a release of a hazardous substance, as
defined in the Comprehensive Environmental Response Compensation and
Liability Act of 1980 (CERCLA) occurred at several sites to which chemical
or other wastes generated by the manufacturing operations of the Company
were sent. These notifications allege that the Company may be a potentially
responsible party with respect to the remedial actions needed to control or
clean up any such releases. Under CERCLA, responsible parties can include
current and previous owners of the site, generators of hazardous substances
disposed of at the site, and transporters of hazardous substances to the
site. Each responsible party can be jointly and severally liable, without
regard to fault or negligence, for all costs associated with the
remediation of the site. In each instance the Company believes that it is
only one of several companies which received such notification and who may
likewise be held liable for any such remedial costs.
The Company evaluates its potential liability as a responsible party
for this environmental matter on an ongoing basis based upon factors such
as the estimated remediation costs, the nature and duration of the
Company's involvement with the site, the financial strength of other
potentially responsible parties, and the availability of indemnification
from previous owners of acquired businesses. Estimated liabilities are
accrued in accordance with Statement of Financial Accounting Standards No.
5, "Accounting for Contingencies." To date, the Company has not incurred
any significant liability with respect to this site and the Company
anticipates that future liabilities related to any site with which the
Company is currently involved will not have a materially adverse effect on
the Company's business, results of operations or financial condition.
In January 1995, the Company, Thermo Remediation, and several third
parties filed a lawsuit in federal district court in Delaware against
Recycling Sciences International, Inc. (RSI) requesting a declaratory
judgment that six U.S. patents owned by RSI are invalid and not infringed
by Thermo Remediation's soil-remediation services and equipment, and asking
the court to enjoin RSI from asserting any of these patents against the
Company or Thermo Remediation. The suit follows continued allegations by
RSI that Thermo Remediation's activities in treating petroleum-contaminated
soil infringe a number of these patents and an offer of a non-exclusive
patent license in return for payments which Thermo Remediation believes
substantially exceed any value of a license. RSI filed an answer to the
complaint in April 1995, and is attempting to change the forum of this
litigation to the federal district court in Illinois. Although the Company
agreed, in connection with the formation of Thermo Remediation, to
indemnify and hold Thermo Remediation harmless against damages or other
costs associated with any claims of infringement of intellectual property
by the technology transferred by the Company to Thermo Remediation,
including claims which may be made by RSI, there can be no assurance that
RSI may not seek and obtain an injunction against the use of Thermo
13PAGE
<PAGE>
Remediation's technology to remediate petroleum-contaminated soil. The
Company continues to believe that RSI's accusations are unfounded and that
Thermo Remediation's activities do not infringe any valid claims of the
patents.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder
Matters
Information concerning the market and market price for the
Registrant's Common Stock, $.10 par value, and dividend policy is included
under the sections labeled "Common Stock Market Information" and "Dividend
Policy" in the Registrant's Fiscal 1995 Annual Report to Shareholders and
is incorporated herein by reference.
Item 6. Selected Financial Data
The information required under this item is included under the
sections "Selected Financial Information" and "Dividend Policy" in the
Registrant's Fiscal 1995 Annual Report to Shareholders and is incorporated
herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required under this item is included under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Registrant's Fiscal 1995 Annual Report to Shareholders
and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The Registrant's Consolidated Financial Statements as of April 1,
1995, are included in the Registrant's Fiscal 1995 Annual Report to
Shareholders and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
Not applicable.
14PAGE
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The information concerning Directors required under this item is
incorporated herein by reference from the material contained under the
caption "Election of Directors" in the Registrant's definitive proxy
statement to be filed with the Securities and Exchange Commission pursuant
to Regulation 14A, not later than 120 days after the close of the fiscal
year. The information concerning delinquent filers pursuant to Item 405 of
Regulation S-K is incorporated herein by reference from the material
contained under the heading "Disclosure of Certain Late Filings" under the
caption "Stock Ownership" in the Registrant's definitive proxy statement to
be filed with the Securities and Exchange Commission pursuant to Regulation
14A, not later than 120 days after the close of the fiscal year.
Item 11. Executive Compensation
The information required under this item is incorporated herein by
reference from the material contained under the caption "Executive
Compensation" in the Registrant's definitive proxy statement to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A, not
later than 120 days after the close of the fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required under this item is incorporated herein by
reference from the material contained under the caption "Stock Ownership"
in the Registrant's definitive proxy statement to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A, not later
than 120 days after the close of the fiscal year.
Item 13. Certain Relationships and Related Transactions
The information required under this item is incorporated herein by
reference from the material contained under the caption "Relationship with
Affiliates" in the Registrant's definitive proxy statement to be filed with
the Securities and Exchange Commission pursuant to Regulation 14A, not
later than 120 days after the close of the fiscal year.
15PAGE
<PAGE>
PART IV
Item 14.Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a,d) Financial Statements and Schedules.
(1) The consolidated financial statements set forth in the list
below are filed as part of this Report.
(2) The consolidated financial statement schedule set forth in the
list below is filed as part of this Report.
(3) Exhibits filed herewith or incorporated herein by reference
are set forth in Item 14(c) below.
List of Financial Statements and Schedules Referenced in this
Item 14.
Information incorporated by reference from Exhibit 13 filed
herewith:
Consolidated Statement of Income
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Shareholders' Investment
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
Certain Financial Statement Schedules filed herewith:
Schedule II: Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or
not required, or because the required information is shown either
in the financial statements or the notes thereto.
(b) Reports on Form 8-K.
On February 21, 1995, the Company filed a Current Report on Form
8-K pertaining to its February 6, 1995, acquisition of
Engineering, Technology and Knowledge Corporation, which conducts
business as Killam Associates, Inc. On April 21, 1995, the Company
filed an amendment on Form 8-K/A, the purpose of which was to file
the financial information required by Form 8-K concerning this
acquisition.
On April 3, 1995, the Company filed a Current Report on Form 8-K
pertaining to its March 29, 1995, acquisition of Refining and
Trading Holland B.V., which conducts business as North Refinery.
The required historical financial statements of North Refinery and
pro forma combined condensed financial statements will be filed by
June 12, 1995, as part of an amendment to the Form 8-K.
16PAGE
<PAGE>
(b) Reports on Form 8-K (continued)
On May 24, 1995, the Company filed a Current Report on Form 8-K
pertaining to the dissolution of the Thermo Terra Tech joint
venture on May 9, 1995, and the subsequent purchase of the
businesses distributed to Thermo Instrument Systems Inc. as a
result of the dissolution.
On May 25, 1995, the Company filed a Current Report on Form 8-K
pertaining to its May 10, 1995, acquisition of Lancaster
Laboratories, Inc. and its affiliate Clewmark Holdings
(collectively Lancaster Laboratories). The required historical
financial statements of Lancaster Laboratories and pro forma
combined condensed financial statements will be filed by July 24,
1995, as part of an amendment to the Form 8-K.
(c) Exhibits.
See Exhibit Index on the page immediately preceding exhibits.
17PAGE
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed by the undersigned, thereunto duly authorized.
Date: June 8, 1995 THERMO PROCESS SYSTEMS INC.
By: John P. Appleton
------------------------
John P. Appleton
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated, as of June 8, 1995.
Signature Title
--------- -----
By: John P. Appleton President, Chief Executive Officer,
--------------------------
John P. Appleton and Director
By: John N. Hatsopoulos Vice President, Chief Financial Officer,
--------------------------
John N. Hatsopoulos and Director
By: Paul F. Kelleher Chief Accounting Officer
--------------------------
Paul F. Kelleher
By: William A. Rainville Chairman of the Board and Director
--------------------------
William A. Rainville
By: George N. Hatsopoulos Director
--------------------------
George N. Hatsopoulos
By: Donald E. Noble Director
--------------------------
Donald E. Noble
By: Warren M. Rohsenow Director
--------------------------
Warren M. Rohsenow
By: Polyvios C. Vintiadis Director
--------------------------
Polyvios C. Vintiadis
18PAGE
<PAGE>
Report of Independent Public Accountants
----------------------------------------
To the Shareholders and Board of Directors of
Thermo Process Systems Inc.:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements included in Thermo Process
Systems Inc.'s Annual Report to Shareholders incorporated by reference in
this Form 10-K, and have issued our report thereon dated May 9, 1995
(except with respect to the matter discussed in Note 14 as to which the
date is June 2, 1995). Our audits were made for the purpose of forming an
opinion on those statements taken as a whole. The schedule listed in Item
14 on page 16 is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures
applied in the audits of the basic consolidated financial statements and,
in our opinion, fairly states in all material respects the consolidated
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
May 9, 1995
19PAGE
<PAGE>
SCHEDULE II
THERMO PROCESS SYSTEMS INC.
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Additions Deductions
------------------------------ ----------
Balance Charged
Allowance at to Costs Accounts Balance
for Doubtful Beginning and Accounts Written- at End
Accounts of Year Expenses Other(a) Recovered off of Year
-------------- --------- -------- ------- --------- -------- -------
Year Ended:
April 1, 1995 $ 3,260 $ 162 $ 629 $ 88 $ (579) $ 3,560
April 2, 1994 $ 3,073 $ 424 $ 65 $ 79 $ (381) $ 3,260
April 3, 1993 $ 3,768 $ 164 $ - $ 148 $(1,007) $ 3,073
(a) Allowances of businesses acquired during the year as described in Note
3 to Consolidated Financial Statements in the Registrant's 1995 Annual
Report to Shareholders.
20PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
3.1 Restated Certificate of Incorporation, as amended (filed as
Exhibit 3(a) to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended October 1, 1988 [File No.
1-9549] and incorporated herein by reference).
3.2 Bylaws of the Registrant (filed as Exhibit 3(b) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended April 2, 1988 [File No. 1-9549] and incorporated
herein by reference).
4.1 Fiscal Agency Agreement dated August 4, 1989, among the
Registrant, Thermo Electron Corporation, and Chemical Bank,
as fiscal agent (filed as Exhibit B to the Registrant's
Current Report on Form 8-K relating to the events occurring
on August 4, 1989 [File No. 1-9549] and incorporated herein
by reference).
The Registrant hereby agrees, pursuant to Item
601(b)(4)(iii)(A) of Regulation S-K, to furnish to the
Commission upon request, a copy of each other instrument
with respect to other long-term debt of the Company or its
subsidiaries.
10.1 Thermo Electron Corporate Charter as amended and restated
effective January 3, 1993 (filed as Exhibit 10(a) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended April 3, 1993 [File No. 1-9549] and incorporated
herein by reference).
10.2 Amended and Restated Corporate Services Agreement dated
January 3, 1993, between Thermo Electron Corporation and
the Registrant (filed as Exhibit 10(b) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended April
3, 1993 [File No. 1-9549] and incorporated herein by
reference).
10.3 Agreement of Lease dated December 31, 1985, between
Claridge Properties Ltd. and Thermo Electron Corporation
(filed as Exhibit 10(c) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-6763] and incorporated
herein by reference).
10.4 Assignment of Lease dated December 31, 1985, between Thermo
Electron Corporation and TMO, Inc. (filed as Exhibit 10(d)
to the Registrant's Registration Statement on Form S-1
[Reg. No. 33-6763] and incorporated herein by reference).
10.5 Sublease dated March 30, 1986, between TMO, Inc. and
Holcroft/Loftus, Inc. (filed as Exhibit 10(e) to the
Registrant's Registration Statement on Form S-1 [Reg. No.
33-6763] and incorporated herein by reference).
10.6 Lease Amending Agreement dated January 1, 1995, between
Claridge Properties Ltd., Thermo Electron Corporation and
TMO, Inc.
21PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.7 License Agreement, dated December 30, 1989, between Degussa
Aktiengasellschaft and Holcroft/Loftus, Inc. (filed as
Exhibit 10(f) to the Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1990 [File No.
1-9549] and incorporated herein by reference).
10.8 License Agreement dated June 26, 1992, by and between
Holcroft Inc. and Camlaw Ltd. (filed as Exhibit 10(g) to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended April 3, 1993 [File No. 1-9549] and incorporated
herein by reference).
10.9 Exclusive License and Marketing Agreement dated March 22,
1990, among TPS Technologies Inc., Holcroft Inc., and
Thermo Soil Recyclers Inc. (filed as Exhibit 10(q) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 30, 1990 [File No. 1-9549] and incorporated
herein by reference).
10.10 Form of Indemnification Agreement with Directors and
Officers (filed as Exhibit 10(k) to the Registrant's Annual
Report on Form 10-K for the fiscal year ended March 30,
1991 [File No. 1-9549] and incorporated herein by
reference).
10.11 Development Agreement dated September 15, 1991, between
Thermo Electron Corporation and the Registrant (filed as
Exhibit 10(l) to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended September 28, 1991 [File
No. 1-9549] and incorporated herein by reference).
10.12 Amended and Restated Development Agreement dated January 2,
1992, between Thermo Electron Corporation and the
Registrant (filed as Exhibit 10(m) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended March
28, 1992 [File No. 1-9549] and incorporated herein by
reference).
10.13 Asset Transfer Agreement dated as of October 1, 1993 among
the Registrant, TPS Technologies Inc. and Thermo
Remediation Inc. (filed as Exhibit 2.3 to Thermo
Remediation's Registration Statement on Form S-1 [Reg. No.
33-70544] and incorporated herein by reference).
10.14 Exclusive License Agreement dated as of October 1, 1993
among the Registrant, TPS Technologies Inc. and Thermo
Remediation Inc. (filed as Exhibit 2.4 to Thermo
Remediation's Registration Statement on Form S-1 [Reg. No.
33-70544] and incorporated herein by reference).
10.15 Non-Competition and Non-Disclosure Agreement dated as of
October 1, 1993 among the Registrant, TPS Technologies Inc.
and Thermo Remediation Inc. (filed as Exhibit 2.5 to Thermo
Remediation's Registration Statement on Form S-1 [Reg. No.
33-70544] and incorporated herein by reference).
22PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.16 Tax Allocation Agreement dated as of June 1, 1992 between
the Registrant and Thermo Remediation Inc. (filed as
Exhibit 10.3 to Thermo Remediation's Registration
Statement on Form S-1 [Reg. No. 33-70544] and incorporated
herein by reference).
10.17 Agreement of Partnership dated May 16, 1994 among Terra
Tech Labs Inc. (a wholly owned subsidiary of the
Registrant) and Eberline Analytical Corporation, Skinner &
Sherman, Inc., TMA/NORCAL Inc., Normandeau Associates Inc.,
Bettigole Andrews & Clark Inc., Fellows, Read & Associates
Inc. and Thermo Consulting Engineers Inc. (each a wholly
owned subsidiary of Thermo Instrument Systems Inc.) (filed
as Exhibit 1 to the Registrant's Current Report on Form 8-K
relating to the events occurring on May 16, 1994 [File No.
1-9549] and incorporated herein by reference).
10.18 Promissory Note dated May 16, 1994 issued by the Registrant
to Thermo Electron Corporation (filed as Exhibit 2 to the
Registrant's Current Report on Form 8-K relating to the
events occurring on May 16, 1994 [File No. 1-9549] and
incorporated herein by reference).
10.19 Agreement of Dissolution of Partnership dated May 9, 1995
among Thermo Terra Tech (the Partnership), Terra Tech Labs,
Inc. (a wholly owned subsidiary of the Registrant) and
Eberline Analytical Corporation, Skinner & Sherman, Inc.,
TMA/NORCAL Inc., Normandeau Associates Inc., Bettigole
Andrews & Clark Inc., Fellows, Read & Associates Inc. and
Thermo Consulting Engineers Inc. (each a wholly owned
subsidiary of Thermo Instrument Systems Inc.) (filed as
Exhibit 2.1 to the Registrant's Current Report on Form 8-K
relating to the events occurring on May 9, 1995 [File No.
1-9549] and incorporated herein by reference).
10.20 Stock Purchase Agreement dated May 9, 1995 between the
Registrant and Thermo Instrument Systems Inc. (filed as
Exhibit 2.2 to the Registrant's Current Report on Form 8-K
relating to the events occurring on May 9, 1995 [File No.
1-9549] and incorporated herein by reference).
10.21 Note dated May 17, 1995 from the Registrant to Thermo
Electron Corporation (filed as Exhibit 2.3 to the
Registrant's Current Report on Form 8-K relating to the
events occurring on May 9, 1995 [File No. 1-9549] and
incorporated herein by reference).
10.22 Stock Purchase and Note Issuance Agreement dated as of
November 22, 1993, between the Registrant and Thermo
Remediation Inc. (filed as Exhibit 10.11 to Thermo
Remediation's Registration Statement on Form S-1 [Reg. No.
33-70544] and incorporated herein by reference).
23PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.23 $2,650,000 principal amount Subordinated Convertible Note
dated as of November 22, 1993, made by Thermo Remediation
Inc., issued to the Registrant (filed as Exhibit 10.12 to
Thermo Remediation's Registration Statement on Form S-1
[Reg. No. 33-70544] and incorporated herein by reference).
10.24 Asset Purchase Agreement dated as of November 19, 1993 by
and among All Western Oil, Inc. and certain affiliates
thereof and Thermo Fluids Inc. (filed as Exhibit 10.13 to
Thermo Remediation's Registration Statement on Form S-1
[Reg. No. 33-70544] and incorporated herein by reference).
10.25 First Addendum to Asset Purchase Agreement dated as of
August 7, 1994 among All Western Oil, Inc. et al. and
Thermo Fluids Inc. (filed as Exhibit 10.1 to Thermo
Remediation's Quarterly Report on Form 10-Q for the fiscal
quarter ended October 1, 1994 [File No. 1-12636] and
incorporated herein by reference).
10.26 Promissory Note in the principal amount of $700,000, dated
August 7, 1994 (filed as Exhibit 10.2 to Thermo
Remediation's Quarterly Report on Form 10-Q for the fiscal
quarter ended October 1, 1994 [File No. 1-12636] and
incorporated herein by reference).
10.27 Security Agreement dated as of August 7, 1994 among All
Western Oil, Inc. et al. and Thermo Fluids Inc. (filed as
Exhibit 10.3 to Thermo Remediation's Quarterly Report on
Form 10-Q for the fiscal quarter ended October 1, 1994
[File No. 1-12636] and incorporated herein by reference).
10.28 Stock Purchase and Sale Agreement made and entered into on
February 6, 1995, to be effective as of January 29, 1995,
by and between Nord Est S.A., the Registrant, and Emil C.
Herkert, Kenneth L. Zippler, Franklin O. Williamson, Jr.,
Fletcher N. Platt, Jr., Eugene J. Destefano, Meint Olthof
and Stanley P. Kaltnecker, Jr. (filed as Exhibit 1 to the
Registrant's Current Report on Form 8-K relating to the
events occurring on February 6, 1995 [File No. 1-9549] and
incorporated herein by reference).
10.29 $28,000,000 Secured Promissory Note dated as of January 29,
1995 issued by the Registrant to Nord Est S.A. (filed as
Exhibit 2 to the Registrant's Current Report on Form 8-K
relating to the events occurring on February 6, 1995 [File
No. 1-9549] and incorporated herein by reference).
10.30 $38,000,000 Promissory Note dated as of February 21, 1995
issued by the Registrant to Thermo Electron Corporation
(filed as Exhibit 3 to the Registrant's Current Report on
Form 8-K relating to the events occurring on February 6,
1995 [File No. 1-9549] and incorporated herein by
reference).
24PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.31 Purchase and Sale Agreement dated as of December 20, 1994
by and among TPS Technologies Inc., TPST Soil Recyclers of
Maryland Inc., Rafich Corporation, Harry Ratrie, John C.
Cyphers and J. Thomas Hood (filed as Exhibit 1 to Thermo
Remediation's Current Report on Form 8-K for the events
occurring on December 21, 1994 [File No. 1-12636] and
incorporated herein by reference).
10.32 Stock Purchase Agreement entered into on March 29, 1995, by
and among Stalt Holding, B.V., Beheersmaatschappij
J. Amerika N.V., A.J. Van Es, J.B. Van Es and D.A. Slager,
and the Registrant (filed as Exhibit 1 to the Registrant's
Current Report on Form 8-K relating to the events occurring
on March 29, 1995 [File No. 1-9549] and incorporated herein
by reference).
10.33 Master Repurchase Agreement dated January 1, 1994 between
the Registrant and Thermo Electron Corporation (filed as
Exhibit 10.21 to the Registrant's Annual Report on Form
10-K for the fiscal year ended April 2, 1994 [File No.
1-9549] and incorporated herein by reference).
10.34 Master Reimbursement Agreement dated January 1, 1994
between the Registrant, Thermo Electron Corporation, and
Thermo Remediation Inc. (filed as Exhibit 10.22 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended April 2, 1994 [File No. 1-9549] and incorporated
herein by reference).
10.35 Incentive Stock Option Plan of the Registrant (filed as
Exhibit 10(h) to the Registrant's Registration Statement on
Form S-1 [Reg. No. 33-6763] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Registrant's Nonqualified
Stock Option Plan is 1,850,000 shares, after adjustment to
reflect share increases approved in 1987, 1989 and 1992,
6-for-5 stock splits effected in July 1988 and March 1989,
and 3-for-2 stock split effected in September 1989).
10.36 Nonqualified Stock Option Plan of the Registrant (filed as
Exhibit 10(i) to the Registrant's Registration Statement on
Form S-1 [Reg. No. 33-6763] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Registrant's Incentive
Stock Option Plan is 1,850,000 shares, after adjustment to
reflect share increases approved in 1987, 1989 and 1992,
6-for-5 stock splits effected in July 1988 and March 1989,
and 3-for-2 stock split effected in September 1989).
10.37 Deferred Compensation Plan for Directors of the Registrant
(filed as Exhibit 10(k) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-6763] and incorporated
herein by reference).
25PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.38 Equity Incentive Plan (filed as Exhibit 10.63 to Thermedics
Inc.'s Annual Report on Form 10-K for the fiscal year ended
January 1, 1994 [File No. 1-9567] and incorporated herein
by reference) (Maximum number of shares issuable is
1,750,000 shares, after adjustment to reflect share
increase approved in 1994).
10.39 Directors Stock Option Plan, as amended and restated
effective January 1, 1995.
10.40 Severance Agreement with Thomas P. Plunkett dated August
31, 1993 (filed as Exhibit 10(aa) to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended
October 2, 1993 [File No. 1-9549] and incorporated herein
by reference).
10.41 Reserved
In addition to the stock-based compensation plans of the
Registrant, the executive officers of the Registrant may be
granted awards under stock-based compensation plans of the
Registrant's parent, Thermo Electron Corporation, and its
subsidiaries, for services rendered to the Registrant or to
such affiliated corporations. Such plans are listed under
Exhibits 10.42 - 10.89.
10.42 Thermo Process Systems Inc. - Thermo Remediation Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10(l) to
the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended January 1, 1994 [File No. 1-9549] and
incorporated herein by reference).
10.43 Thermo Electron Corporation Incentive Stock Option Plan
(filed as Exhibit 4(d) to Thermo Electron's Registration
Statement on Form S-8 [Reg. No. 33-8993] and incorporated
herein by reference). (Maximum number of shares issuable in
the aggregate under this plan and the Thermo Electron
Nonqualified Stock Option Plan is 9,035,156 shares, after
adjustment to reflect share increases approved in 1984 and
1986, and share decrease approved in 1989, and 3-for-2
stock splits effected in October 1986, October 1993 and May
1995).
10.44 Thermo Electron Corporation Nonqualified Stock Option Plan
(filed as Exhibit 4(e) to Thermo Electron's Registration
Statement on Form S-8 [Reg. No. 33-8993] and incorporated
herein by reference). (Plan amended in 1984 to extend
expiration date to December 14, 1994; maximum number of
shares issuable in the aggregate under this plan and the
Thermo Electron Incentive Stock Option Plan is 9,035,156
shares, after adjustment to reflect share increases
approved in 1984 and 1986, and share decrease approved in
1989, and 3-for-2 stock splits effected in October 1986,
October 1993 and May 1995).
26PAGE
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EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.45 Thermo Electron Corporation Equity Incentive Plan (filed as
Exhibit 10.1 to Thermo Electron's Quarterly Report on Form
10-Q for the quarter ended July 2, 1994 [File No. 1-8002]
and incorporated herein by reference). (Plan amended in
1989 to restrict exercise price for SEC reporting persons
to not less than 50% of fair market value or par value;
maximum number of shares issuable is 7,050,000 shares,
after adjustment to reflect 3-for-2 stock splits effected
in October 1993 and May 1995 and share increase approved in
1994).
10.46 Thermo Electron Corporation - Thermedics Inc. Nonqualified
Stock Option Plan (filed as Exhibit 4 to a Registration
Statement on Form S-8 of Thermedics [Reg. No. 2-93747] and
incorporated herein by reference). (Maximum number of
shares issuable is 450,000 shares, after adjustment to
reflect share increase approved in 1988, 5-for-4 stock
split effected in January 1985, 4-for-3 stock split
effected in September 1985, and 3-for-2 stock splits
effected in October 1986 and November 1993).
10.47 Thermo Electron Corporation - Thermo Instrument Systems
Inc. (formerly Thermo Environmental Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 4(c) to a
Registration Statement on Form S-8 of Thermo Instrument
[Reg. No. 33-8034] and incorporated herein by reference).
(Maximum number of shares issuable is 337,500 shares, after
adjustment to reflect 3-for-2 stock splits effected in July
1993 and April 1995).
10.48 Thermo Electron Corporation - Thermo Instrument Systems
Inc. Nonqualified Stock Option Plan (filed as Exhibit 10.12
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended January 3, 1987 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 480,228 shares, after adjustment to
reflect share increase approved in 1988 and 3-for-2 stock
splits effected in January 1988, July 1993 and April 1995).
10.49 Thermo Electron Corporation - Thermo Process Systems Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.13 to
Thermo Electron's Annual Report on Form 10-K for the fiscal
year ended January 3, 1987 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 108,000 shares, after adjustment to
reflect 6-for-5 stock splits effected in July 1988 and
March 1989, and 3-for-2 stock split effected in September
1989).
10.50 Thermo Electron Corporation - Thermo Power Corporation
(formerly Tecogen Inc.) Nonqualified Stock Option Plan
(filed as Exhibit 10.14 to Thermo Electron's Annual Report
on Form 10-K for the fiscal year ended January 3, 1987
[File No. 1-8002] and incorporated herein by reference).
27PAGE
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EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.51 Thermo Electron Corporation - Thermo Cardiosystems Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.11 to
Thermo Electron's Annual Report on Form 10-K for the fiscal
year ended December 29, 1990 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 130,500 shares, after adjustment to
reflect share increases approved in 1990 and 1992, 3-for-2
stock split effected in January 1990, 5-for-4 stock split
effected in May 1990 and 2-for-1 stock split effected in
November 1993).
10.52 Thermo Electron Corporation - Thermo Ecotek Corporation
(formerly Thermo Energy Systems Corporation) Nonqualified
Stock Option Plan (filed as Exhibit 10.12 to Thermo
Electron's Annual Report on Form 10-K for the fiscal year
ended December 29, 1990 [File No. 1-8002] and incorporated
herein by reference).
10.53 Thermo Electron Corporation - ThermoTrex Corporation
(formerly Thermo Electron Technologies Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 10.13 to
Thermo Electron's Annual Report on Form 10-K for the fiscal
year ended December 29, 1990 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 180,000 shares, after adjustment to
reflect 3-for-2 stock split effected in October 1993).
10.54 Thermo Electron Corporation - Thermo Fibertek Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.14 to
Thermo Electron's Annual Report on Form 10-K for the fiscal
year ended December 28, 1991 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 400,000 shares, after adjustment to
reflect 2-for-1 stock split effected in September 1992).
10.55 Thermo Electron Corporation - Thermo Voltek Corp. (formerly
Universal Voltronics Corp.) Nonqualified Stock Option Plan
(filed as Exhibit 10.17 to Thermo Electron's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993
[File No. 1-8002] and incorporated herein by reference).
(Maximum number of shares issuable is 7,500 shares, after
adjustment to reflect 3-for-2 stock split effected in
November 1993).
10.56 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Incentive Stock Option Plan (filed as Exhibit
10.18 to Thermo Electron's Annual Report on Form 10-K for
the fiscal year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Ecotek Nonqualified Stock Option Plan is 900,000
shares, after adjustment to reflect share increase approved
in December 1993).
28PAGE
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EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.57 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Nonqualified Stock Option Plan (filed as
Exhibit 10.19 to Thermo Electron's Annual Report on Form
10-K for the fiscal year ended January 2, 1993 [File No.
1-8002] and incorporated herein by reference). (Maximum
number of shares issuable in the aggregate under this plan
and the Thermo Ecotek Incentive Stock Option Plan is
900,000 shares, after adjustment to reflect share increase
approved in December 1993).
10.58 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Equity Incentive Plan (filed as Exhibit 10.39
to Thermo Instrument's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference).
10.59 Thermedics Inc. Nonqualified Stock Option Plan (filed as
Exhibit 10(e) to Thermedics' Registration Statement on Form
S-1 [Reg. No. 33-84380] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermedics Incentive
Stock Option Plan is 1,931,923 shares, after adjustment to
reflect share increases approved in 1986 and 1992, 5-for-4
stock split effected in January 1985, 4-for-3 stock split
effected in September 1985, and 3-for-2 stock split
effected in October 1986 and November 1993).
10.60 Thermedics Inc. Incentive Stock Option Plan (filed as
Exhibit 10(d) to Thermedics' Registration Statement on Form
S-1 [Reg. No. 33-84380] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermedics Nonqualified
Stock Option Plan is 1,931,923 shares, after adjustment to
reflect share increases approved in 1986 and 1992, 5-for-4
stock split effected in January 1985, 4-for-3 stock split
effected in September 1985, and 3-for-2 stock split
effected in October 1986 and November 1993).
10.61 Thermedics Inc. Equity Incentive Plan (filed as Appendix A
to the Proxy Statement dated May 10, 1993 of Thermedics
[File No. 1-9567] and incorporated herein by reference).
(Maximum number of shares issuable is 1,500,000, after
adjustment to reflect 3-for-2 stock split effected in
November 1993).
10.62 Thermedics Inc. - Thermedics Detection Inc. Nonqualified
Stock Option Plan (filed as Exhibit 10.20 to Thermo
Electron's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993 [File No. 1-8002] and incorporated
herein by reference).
29PAGE
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EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.63 Thermo Cardiosystems Inc. Incentive Stock Option Plan
(filed as Exhibit 10(f) to Thermo Cardiosystems'
Registration Statement on Form S-1 [Reg. No. 33-25144] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Cardiosystems Nonqualified Stock Option Plan is
1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected in
January 1990, 5-for-4 stock split effected in May 1990 and
2-for-1 stock split effected in November 1993).
10.64 Thermo Cardiosystems Inc. Nonqualified Stock Option Plan
(filed as Exhibit 10(g) to Thermo Cardiosystems'
Registration Statement on Form S-1 [Reg. No. 33-25144] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Cardiosystems Incentive Stock Option Plan is
1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected in
January 1990, 5-for-4 stock split effected in May 1990 and
2-for-1 stock split effected in November 1993).
10.65 Thermo Cardiosystems Inc. Equity Incentive Plan (filed as
Exhibit 10.46 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference).
10.66 Thermo Voltek Corp. (formerly Universal Voltronics Corp.)
1985 Stock Option Plan (filed as Exhibit 10.14 to Thermo
Voltek's Annual Report on Form 10-K for the fiscal year
ended June 30, 1985 [File No. 0-8245] and incorporated
herein by reference). (Maximum number of shares issuable is
200,000 shares, after adjustment to reflect 1-for-3 reverse
stock split effected in November 1992 and 3-for-2 stock
split effected in November 1993).
10.67 Thermo Voltek Corp. (formerly Universal Voltronics Corp.)
1990 Stock Option Plan (filed as Exhibit 10.2 to Thermo
Voltek's Annual Report on Form 10-K for the fiscal year
ended June 30, 1990 [File No. 1-10574] and incorporated
herein by reference). (Maximum number of shares issuable is
400,000 shares, after adjustment to reflect share increases
in 1993 and 1994, 1-for-3 reverse stock split effected in
November 1992 and 3-for-2 stock split effected in November
1993).
10.68 Thermo Voltek Corp. Equity Incentive Plan (filed as Exhibit
10.49 to Thermo Instrument's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 [File 1-9786] and
incorporated herein by reference.
30PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.69 Thermo Instrument Systems Inc. Incentive Stock Option Plan
(filed as Exhibit 10(c) to Thermo Instrument's Registration
Statement on Form S-1 [Reg. No. 33-6762] and incorporated
herein by reference). (Maximum number of shares issuable in
the aggregate under this plan and the Thermo Instrument
Nonqualified Stock Option Plan is 2,250,000 shares, after
adjustment to reflect share increase approved in 1990 and
3-for-2 stock splits effected in January 1988, July 1993
and April 1995).
10.70 Thermo Instrument Systems Inc. Nonqualified Stock Option
Plan (filed as Exhibit 10(d) to Thermo Instrument's
Registration Statement on Form S-1 [Reg. No. 33-6762] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Instrument Incentive Stock Option Plan is 2,250,000
shares, after adjustment to reflect share increase approved
in 1990 and 3-for-2 stock splits effected in January 1988,
July 1993 and April 1995).
10.71 Thermo Instrument Systems Inc. Equity Incentive Plan (filed
as Appendix A to the Proxy Statement dated April 27, 1993
of Thermo Instrument [File No. 1-9786] and incorporated
herein by reference). (Maximum number of shares issuable is
3,225,000 shares, after adjustment to reflect share
increase approved in December 1993 and 3-for-2 stock splits
effected in July 1993 and April 1995).
10.72 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(d) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Instrument (formerly Thermo Environmental)
Nonqualified Stock Option Plan is 928,125 shares, after
adjustment to reflect share increase approved in 1987 and
3-for-2 stock splits effected in July 1993 and April 1995).
10.73 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Nonqualified Stock Option Plan
(filed as Exhibit 10(e) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Instrument (formerly Thermo Environmental) Incentive
Stock Option Plan is 920,125 shares, after adjustment to
reflect share increase approved in 1987 and 3-for-2 stock
splits effected in July 1993 and April 1995).
31
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EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.74 Thermo Instrument Systems Inc. - ThermoSpectra Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.51 to
Thermo Instrument's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference).
10.75 ThermoSpectra Corporation Equity Incentive Plan (filed as
Exhibit 10.52 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference).
10.76 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(h) to ThermoTrex's Registration
Statement on Form S-1 [Reg. No. 33-40972] and incorporated
herein by reference). (Maximum number of shares issuable in
the aggregate under this plan and the ThermoTrex
Nonqualified Stock Option Plan is 1,945,000 shares, after
adjustment to reflect share increases approved in 1992 and
1993, and 3-for-2 stock split effected in October 1993).
10.77 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Nonqualified Stock Option Plan
(filed as Exhibit 10(i) to ThermoTrex's Registration
Statement on Form S-1 [Reg. No. 33-40972] and incorporated
herein by reference). (Maximum number of shares issuable in
the aggregate under this plan and the ThermoTrex Incentive
Stock Option Plan is 1,945,000 shares, after adjustment to
reflect share increases approved in 1992 and 1993, and
3-for-2 stock split effected in October 1993).
10.78 ThermoTrex Corporation - ThermoLase Corporation (formerly
ThermoLase Inc.) Nonqualified Stock Option Plan (filed as
Exhibit 10.53 to Thermedics' Annual Report on Form 10-K for
the fiscal year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference).
10.79 ThermoLase Corporation (formerly ThermoLase Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10.54 to
Thermedics' Annual Report on Form 10-K for the fiscal year
ended January 1, 1994 [File No. 1-9567] and incorporated
herein by reference). (Maximum number of shares issuable in
the aggregate under this plan and the ThermoLase Incentive
Stock Option Plan is 2,800,000 shares, after adjustment to
reflect increase approved in 1993 and 2-for-1 stock splits
effected in March 1994 and June 1995).
32PAGE
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EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.80 ThermoLase Corporation (formerly ThermoLase Inc.) Incentive
Stock Option Plan (filed as Exhibit 10.55 to Thermedics'
Annual Report on Form 10-K for the fiscal year ended
January 1, 1994 [File No. 1-9567] and incorporated herein
by reference). (Maximum number of shares issuable in the
aggregate under this plan and the ThermoLase Nonqualified
Stock Option Plan is 2,800,000 shares, after adjustment to
reflect share increase approved in 1993 and 2-for-1 stock
splits effected in March 1994 and June 1995).
10.81 ThermoLase Corporation Equity Incentive Plan.
10.82 Thermo Fibertek Inc. Incentive Stock Option Plan (filed as
Exhibit 10(k) to Thermo Fibertek's Registration Statement
on Form S-1 [Reg. No. 33-51172] and incorporated herein by
reference).
10.83 Thermo Fibertek Inc. Nonqualified Stock Option Plan (filed
as Exhibit 10(l) to Thermo Fibertek's Registration
Statement on Form S-1 [Reg. No. 33-51172] and incorporated
herein by reference).
10.84 Thermo Fibertek Inc. Equity Incentive Plan (filed as
Exhibit 10.60 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference).
10.85 Thermo Power Corporation (formerly Tecogen Inc.) Incentive
Stock Option Plan (filed as Exhibit 10(h) to Thermo Power's
Registration Statement on Form S-1 [Reg. No. 33-14017] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Power Nonqualified Stock Option Plan is 950,000
shares, after adjustment to reflect share increases
approved in 1990, 1992 and 1993).
10.86 Thermo Power Corporation (formerly Tecogen Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10(i) to
Thermo Power's Registration Statement on Form S-1 [Reg. No.
33-14017] and incorporated herein by reference). (Maximum
number of shares issuable in the aggregate under this plan
and the Thermo Power Incentive Stock Option Plan is 950,000
shares, after adjustment to reflect share increases
approved in 1990, 1992 and 1993).
10.87 Thermo Power Corporation Equity Incentive Plan (filed as
Exhibit 10.63 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference).
10.88 Thermo Remediation Inc. Equity Incentive Plan (filed as
Exhibit 10.7 to Thermo Remediation's Registration Statement
on Form S-1 [Reg. No. 33-70544] and incorporated herein by
reference).
33PAGE
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EXHIBIT INDEX
Exhibit
Number Reference Page
--------------------------------------------------------------------------
10.89 Thermedics Detection Inc. Equity Incentive Plan (filed as
Exhibit 10.69 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference).
13 Annual Report to Shareholders for the fiscal year ended
April 1, 1995 (only those portions incorporated herein by
reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
EXHIBIT 10.6
LEASE AMENDING AGREEMENT entered into as of the first day of January 1995
BETWEEN: CLARIDGE PROPERTIES LTD., a body politic and corporate
duly incorporated as such, having its head office in
the district of Montreal, province of Quebec,
(hereinafter called the "Lessor")
AND: THERMO ELECTRON CORPORATION, a body politic and
corporate duly incorporated, having an office at 81
Wyman Street, Waltham, Massachusetts 02254,
(hereinafter called the "Lessee")
AND: TMO, INC., a body politic and corporate duly
incorporated, having an office at 81 Wyman Street,
Waltham, Massachusetts 02254,
(hereinafter called "Assignee")
WHEREAS by a lease made as of the 31st day of December 1985 by and
between the Lessor and the Lessee (the "Lease"), the Lessor leased to the
Lessee for a term of ten (10) years commencing on the 31st day of December
1985 land located in Livonia, Michigan, as more fully described in Exhibit
I to the Lease;
WHEREAS, by that certain Assignment of Lease dated as of December 31,
1985 (the "Assignment"), the Lessee assigned to the Assignee all of the
Lessee's right, title and interest in and to the Lease pursuant to the
provisions of section 14 of the Lease, which Assignment expressly provides
that the Lessee shall continue to be liable to the Lessor under the Lease,
as a principal and not as a guarantor or surety, to the same extent as
though no assignment had been made; and
WHEREAS the Lessor and the Lessee and the Assignee have agreed to
extend the term of the Lease so that it ends on December 31, 2004 (unless
sooner terminated as provided under the Lease), and to amend the Lease, the
whole in accordance with the terms and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. The preamble hereto forms a part hereof as if herein recited at
length.
2. The Lease is hereby amended as follows:
a) The last paragraph of section 1 of the Lease is amended by
replacing the word "ten" in the second line thereof with the word
"nineteen";
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b) Section 3 of the Lease is amended to provide that the annual
fixed rental for the tenth year of the term shall be $584,500 and
for subsequent years the amounts set forth in the table below:
11th 12 months $584,500
12th 12 months 584,500
13th 12 months 584,500
14th 12 months 584,500
15th 12 months 709,750
16th 12 months 709,750
17th 12 months 709,750
18th 12 months 709,750
19th 12 months 709,750
c) Section 14.01(c) of the Lease is hereby deleted in its entirety
and the following is substituted therefor:
"(c) If and when, and so long as, fifty percent (50%)
or more of the leasable area of the building forming
part of the Demised Premises shall be occupied by one
or more persons or parties other than Lessee (or any
Subsidiary, as said term is hereinafter defined, which
is not paying rental and other consideration to Lessee
for use of the Demised Premises in an aggregate amount
which, when divided by the number of square feet
occupied by such Subsidiary, exceeds the total Fixed
Rent and Additional Rent, calculated on a per square
foot basis, then payable under this Lease), Lessee
shall pay to Lessor as Additional Rent on a monthly
basis the amount, if any, by which the aggregate of the
rentals and all other sums paid by such assignee(s),
subtenant(s) or purchaser(s) to Lessee, for use of the
Demised Premises, whether directly or indirectly (after
subtracting therefrom all reasonable costs incurred by
Lessee in connection with such assignment, subletting
or other transfer, including without limitation
brokerage commissions, attorney's fees and tenant
improvement costs), when divided by the number of
square feet of said building occupied by such
assignee(s), subtenant(s) or purchaser(s), exceed the
total Fixed Rent and Additional Rent, calculated on a
per square foot basis, then payable under this Lease;
and"
d) The following language is hereby added to the end of Section
14.01:
"The term 'Subsidiary' for purposes of this Section
14.01 shall mean any corporation with respect to which
Thermo Electron Corporation (or any Subsidiary thereof)
owns a majority of the common stock or has the power to
vote or direct the voting of sufficient securities to
elect a majority of the directors at all times."
e) Section 20 of the Lease is amended by replacing the address 630
Dorchester Boulevard West, Montreal, Quebec H3B 1X5 with the
address 1170 Peel Street, Suite 800, Montreal, Quebec H3B 4P2;
and
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f) Section 20 of the Lease is further amended by deleting clause (b)
thereof in its entirety and substituting therefor the following:
"(b) if to Lessee, addressed to Lessee at 81 Wyman
Street, Waltham, Massachusetts 02254, with a copy of
Thermo Electron Corporation, 81 Wyman Street, Waltham,
Massachusetts 02254, Attention: General Counsel."
3. The parties confirm that in all other respects the terms, covenants
and conditions of the Lease remain unchanged and in full force and
effect, except as modified by this agreement.
4. This agreement shall be binding upon and ensure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF the parties hereto have duly executed this
agreement as of the day and year first above written.
Witnesses: CLARIDGE PROPERTIES LTD.
Per: Peter Coughlin
---------------------------- ----------------------------
Peter Coughlin, President
---------------------------- Per: ----------------------------
Witnesses: THERMO ELECTRON CORPORATION
Per: Jonathan W. Painter
---------------------------- ----------------------------
Jonathan W. Painter,Treasurer
---------------------------- Per: ----------------------------
Witnesses: TMO, INC.
Per: Jonathan W. Painter
---------------------------- ----------------------------
Jonathan W. Painter,Treasurer
Exhibit 10.39
THERMO PROCESS SYSTEMS INC.
DIRECTORS STOCK OPTION PLAN
(As amended and restated effective as of January 1, 1995)
1. Purpose
The purpose of this Directors Stock Option Plan (the "Plan") of Thermo
Process Systems Inc. (the "Company") is to encourage ownership in the
Company by non-management Directors of the Company whose services are
considered essential to the Company's growth and progress and to provide
them with a further incentive to become Directors and to continue as
Directors of the Company. The Plan is intended to be a nonstatutory stock
option plan.
2. Administration
The Board of Directors, or a Committee (the "Committee") consisting of
two or more Directors of the Company appointed by the Board of Directors,
shall supervise and administer the Plan. Grants of stock options under the
Plan and the amount and nature of the options to be granted shall be
automatic in accordance with Section 5. However, all questions of
interpretation of the Plan or of any stock options granted under it shall
be determined by the Board of Directors or the Committee and such
determination shall be final and binding upon all persons having an
interest in the Plan.
3. Participation in the Plan
Directors of the Company who are not employees of the Company or any
subsidiary or parent of the Company shall be eligible to participate in the
Plan.
4. Stock Subject to the Plan
The maximum number of shares which may be issued under the Plan shall
be seventy-five thousand (75,000) shares of the Company's $.10 par value
Common Stock (the "Common Stock") and twenty-five thousand (25,000) shares
of the common stock of each Spinout Subsidiary (as defined in Section 5(B))
as of the date of the Annual Meeting of Stockholders on which options to
purchase such common stock are first granted to eligible Directors as
provided in Section 5(B), each subject to adjustment as provided in Section
9. Shares to be issued upon the exercise of options granted under the Plan
may be either authorized but unissued shares or shares held by the Company
in its treasury. If any option expires or terminates for any reason without
having been exercised in full, the unpurchased shares subject thereto shall
again be available for options thereafter to be granted.
5. Terms and Conditions
A. Annual Stock Option Grants.
Each Director of the Company who meets the requirements of Section 3
and who is holding office immediately following the Annual Meeting of
Stockholders shall be granted an option to purchase 1,000 shares of the
Common Stock of the Company at the close of business on the date of such
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Annual meeting. Options granted under this Subsection A shall be
exercisable as to 100% of the shares subject to the option as set forth in
Section 5(C)(1), but shares acquired upon exercise are subject to
repurchase by the Company at the exercise price if an Optionee ceases to
serve as a director of the Company, Thermo Electron Corporation or any
subsidiary of Thermo Electron Corporation, prior to the first anniversary
of the grant date, for any reason other than death or disability.
B. Subsidiary Stock Option Grants.
Each Director of the Company who meets the requirements of Section 3
and this Section 5(B), from time to time in accordance with this Section
5(B), shall be granted an option to purchase shares of the common stock of
each majority-owned subsidiary of the Company, the common stock of which
shall have become publicly traded or a portion of which shall have been
sold primarily to third parties in a private placement or other arms-length
transaction (such transaction being referred to herein as a "Spinout
Transaction", and such subsidiary being referred to herein as a "Spinout
Subsidiary"), upon the following terms and conditions.
Each eligible Director who is not a Director of the Spinout Subsidiary
shall be granted an option to purchase 1,500 shares of common stock of the
Spinout Subsidiary as of the close of business on the date of the Company's
Annual Meeting of Stockholders that first occurs after the Spinout
Transaction, and also as of the close of business on the date of every
fifth Annual Meeting of Stockholders of the Company that occurs thereafter
during the duration of this Plan. For purposes of this Section 5(B),
options to purchase common stock of Thermo Remediation Inc., a majority
owned subsidiary of the Corporation, shall first be granted as of the close
of business on the date of the Company's 1995 Annual Meeting of
Stockholders.
Options granted under this Section 5(B) shall vest and be exercisable
as to 100% of the shares of common stock subject to the option on the
fourth anniversary of the grant date of the option, unless, prior to such
anniversary, the underlying common stock shall have been registered under
Section 12 of the Securities and Exchange Act of 1934, as amended (referred
to herein as "Section 12 Registration"). From and after 90 days after the
effective date of Section 12 Registration, options granted hereunder shall
be immediately exercisable as to 100% of the shares subject to the option,
subject to the right of the Company to repurchase the shares at the
exercise price in the event the Optionee ceases to serve as a director of
the Company, or any subsidiary of the Company or Thermo Election during the
option term. The right of the Company to so repurchase the shares shall
lapse as to one-fourth of the shares granted on each of the first, second,
third and fourth anniversaries of the grant date of the option, provided
the Optionee has remained continuously a director of the Company, Thermo
Electron or any subsidiary of Thermo Electron since the grant date. In all
other respects, the option shall be subject to the general terms and
conditions applicable to all option grants as set forth below in Section
5(C), including the determination of the exercise price of such option.
No Director, who is otherwise eligible under Section 3, shall be
eligible under this Section 5(B) to receive grants of stock options in
Spinout Subsidiaries, if such Director also serves as a director of such
Spinout Subsidiary.
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In the event any subsidiary shall become a "Spinout Subsidiary" as
defined herein, then there shall be immediately reserved for transfer
hereunder, on the date options to purchase common stock of the Spinout
Subsidiary are first granted to eligible Directors and without further
action required by the Board of Directors or Stockholders of the Company,
twenty-five thousand (25,000) shares of the common stock of such Spinout
Subsidiary.
C. General Terms and Conditions Applicable to All Grants.
1. Except as otherwise provided in Section 5(B), options shall be
exercisable at any time from and after the six-month anniversary
of the grant date and prior to the date which is the earliest of:
(a) three years after the grant date for options granted under
Section 5(A) and five years after the grant date for options
granted under Section 5(B), (b) three months after the later of
the date (i) the Optionee either ceases to meet the requirements
of Section 3 or (ii) otherwise ceases to serve as a director of
the Company, Thermo Electron or any subsidiary of Thermo Electron
(six months in the event the Optionee ceases to meet the
requirements of this Subsection by reason of his death), or (c)
the date of dissolution or liquidation of the Company.
2. The exercise price at which Options are granted hereunder shall
be the average of the closing prices reported by the national
securities exchange on which the common stock is principally
traded for the five trading days immediately preceding and
including the date the option is granted or, if such security is
not traded on an exchange, the average last reported sale price
for the five-day period on the NASDAQ National Market List, or
the average of the closing bid prices for the five-day period
last quoted by an established quotation service for
over-the-counter securities, or if none of the above shall apply,
the last price paid for shares of the Common Stock by independent
investors in a private placement; provided, however, that such
exercise price per share shall not be lower than the par value
per share or less than 50% of the fair market value of the Common
Stock until such time as the Company elects to be subject to Rule
16b-3 as amended by SEC Rel. No. 33-28869.
3. All options shall be evidenced by a written agreement
substantially in such form as shall be approved by the Board of
Directors or Committee, containing terms and conditions
consistent with the provisions of this Plan.
6. Exercise of Options
A. Exercise/Consideration
An option may be exercised in accordance with its terms by written
notice of intent to exercise the option, specifying the number of shares of
stock with respect to which the option is then being exercised. The notice
shall be accompanied by payment in the form of cash or shares of the
Company's Common Stock (the "Tendered Shares") with a then current market
value equal to the exercise price of the shares to be purchased; provided,
however, that such Tendered Shares shall have been acquired by the Director
more than six months prior to the date of exercise (unless such requirement
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is waived in writing by the Company). Against such payment the Company
shall deliver or cause to be delivered to the Director a certificate for
the number of shares then being purchased, registered in the name of the
Director or other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other body having
jurisdiction in the premises shall require the Company or the Director to
take any action in connection with shares being purchased upon exercise of
the option, exercise of the option and delivery of the certificate or
certificates for such shares shall be postponed until completion of the
necessary action, which shall be taken at the Company's expense.
B. Tax Withholding
The Board of Directors or Committee will have the right to require
that the person exercising an option under the Plan remit to the Company an
amount sufficient to satisfy applicable federal, state and local tax
withholding requirements, or make other arrangements satisfactory to the
Company with regard to such requirements, if any, prior to the delivery of
any Common Stock. If and to the extent that such withholding is required,
the Board of Directors or Committee may permit the person exercising an
option under the Plan to elect at such time and in such manner as the Board
of Directors or Committee may provide to have the Company hold back from
the shares to be delivered, or to deliver to the Company, Common Stock
having a value calculated to satisfy the withholding requirement.
7. Transferability
Options shall not be transferable, otherwise than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations
order as defined in the Internal Revenue Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder ("Qualified
Domestic Relations Order"). Options may be exercised during the life of the
Optionee only by the Optionee or a transferee pursuant to a Qualified
Domestic Relations Order.
8. Limitation of Rights to Continue as a Director
Neither the Plan, nor the quantity of shares subject to options
granted under the Plan, nor any other action taken pursuant to the Plan,
shall constitute or be evidence of any agreement or understanding, express
or implied, that the Company will retain a Director for any period of time,
or at any particular rate of compensation.
9. Changes in Common Stock
If the outstanding shares of Common Stock are increased, decreased or
exchanged for a different number or kind of shares or other securities, or
if additional shares or new or different shares or other securities are
distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all
of the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to such shares of Common Stock, or other
securities, an appropriate proportionate adjustment may be made in the
maximum number or kind of shares reserved for issuance under the Plan. No
fractional shares will be issued under the Plan on account of any such
adjustments.
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10. Limitation of Rights in Option Stock
The Optionees shall have no rights as stockholders in respect of
shares as to which their options shall not have been exercised,
certificates issued and delivered and payment as herein provided made in
full, and shall have no rights with respect to such shares not expressly
conferred by this Plan or the written agreement evidencing options granted
hereunder.
11. Stock Reserved
The Company shall at all times during the term of the options reserve
and keep available such number of shares of the Common Stock as will be
sufficient to permit the exercise in full of all options granted under this
Plan and shall pay all other fees and expenses necessarily incurred by the
Company in connection therewith.
12. Securities Laws Restrictions
A. Investment Representations.
The Company may require any person to whom an option is granted, as a
condition of exercising such option, to give written assurances in
substance and form satisfactory to the Company to the effect that such
person is acquiring the shares subject to the option for his or her own
account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company
deems necessary or appropriate in order to comply with federal and
applicable state securities laws.
B. Compliance with Securities Laws.
Each option shall be subject to the requirement that if, at any time,
counsel to the Company shall determine that the listing, registration or
qualification of the shares subject to such option upon any securities
exchange or under any state or federal law, or the consent or approval of
any governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
thereunder, such option may not be exercised, in whole or in part, unless
such listing, registration, qualification, consent or approval, or
satisfaction of such condition shall have been effected or obtained on
conditions acceptable to the Board of Directors. Nothing herein shall be
deemed to require the Company to apply for or to obtain such listing,
registration or qualification, or to satisfy such condition.
13. Change in Control
A. Impact of Event
In the event of a "Change in Control" as defined in Section 13(B), the
following provisions shall apply, unless the agreement evidencing the Award
otherwise provides:
(a) Any stock options awarded under the Plan that were not
previously exercisable and vested shall become fully exercisable
and vested.
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(b) Shares purchased upon the exercise of options subject to
restrictions and to the extent not fully vested, shall become
fully vested and all such restrictions shall lapse so that shares
issued pursuant to such options shall be free of restrictions.
B. Definition of "Change in Control"
"Change in Control" means any one of the following events: (i) when,
any Person is or becomes the beneficial owner (as defined in Section 13(d)
of the Exchange Act and the Rules and Regulations thereunder), together
with all Affiliates and Associates (as such terms are used in Rule 12b-2 of
the General Rules and Regulations of the Exchange Act) of such Person,
directly or indirectly, of 50% or more of the outstanding Common Stock of
the Company, or the beneficial owner of 25% or more of the outstanding
common stock of Thermo Electron Corporation ("Thermo Electron"), without
the prior approval of the Prior Directors of the Company or Thermo
Electron, as the case may be, (ii) the failure of the Prior Directors to
constitute a majority of the Board of the Company or of the Board of
Directors of Thermo Electron, as the case may be, at any time within two
years following any Electoral Event, or (iii) any other event that the
Prior Directors shall determine constitutes an effective change in the
control of the Company or Thermo Electron. As used in the preceding
sentence, the following capitalized terms shall have the respective
meanings set forth below:
(a) "Person" shall include any natural person, any entity, any
"affiliate" of any such natural person or entity as such term is
defined in Rule 405 under the Securities Act of 1933 and any
"group" (within the meaning of such term in Rule 13d-5 under the
Exchange Act);
(b) "Prior Directors" shall mean the persons sitting on the
Company's or Thermo Electron's Board of Directors, as the case
may be, immediately prior to any Electoral Event (or, if there
has been no Electoral Event, those persons sitting on the
applicable Board of Directors on the date of this Agreement) and
any future director of the Company or Thermo Electron who has
been nominated or elected by a majority of the Prior Directors
who are then members of the Board of Directors of the Company or
Thermo Electron, as the case may be; and
(c) "Electoral Event" shall mean any contested election of
Directors, or any tender or exchange offer for the Company's or
Thermo Electron's Common Stock, not approved by the Prior
Directors, by any Person other than the Company, Thermo Electron
or a subsidiary of Thermo Electron.
14. Amendment of the Plan
The provisions of Sections 3 and 5 of the Plan shall not be amended
more than once every six months, other than to comport with changes in the
Code, the Employee Retirement Income Security Act of 1974, or the rules
thereunder. Subject to the foregoing, the Board of Directors may at any
time, and from time to time, modify or amend the Plan in any respect,
except that if at any time the approval of the Stockholders of the Company
is required as to such modification or amendment under Rule 16b-3, the
Board of Directors may not effect such modification or amendment without
such approval.
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The termination or any modification or amendment of the Plan shall
not, without the consent of an Optionee, affect his or her rights under an
option previously granted to him or her. With the consent of the Optionees
affected, the Board of Directors may amend outstanding option agreements in
a manner not inconsistent with the Plan. The Board of Directors shall have
the right to amend or modify the terms and provisions of the Plan and of
any outstanding option to the extent necessary to ensure the qualification
of the Plan under Rule 16b-3.
15. Effective Date of the Plan
The Plan shall become effective on the date the Plan is approved by
the stockholders of the Company.
16. Notice
Any written notice to the Company required by any of the provisions of
the Plan shall be addressed to the Secretary of the Company and shall
become effective when it is received.
17. Governing Law
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware.
Exhibit 10.81
THERMOLASE CORPORATION
EQUITY INCENTIVE PLAN
1. Purpose
The purpose of this Equity Incentive Plan (the "Plan") is to secure
for ThermoLase Corporation (the "Company") and its Stockholders the
benefits arising from capital stock ownership by employees, officers and
Directors of, and consultants to, the Company and its subsidiaries or other
persons who are expected to make significant contributions to the future
growth and success of the Company and its subsidiaries. The Plan is
intended to accomplish these goals by enabling the Company to offer such
persons equity-based interests, equity-based incentives or
performance-based stock incentives in the Company, or any combination
thereof ("Awards").
2. Administration
The Plan will be administered by the Board of Directors of the Company
(the "Board"). The Board shall have full power to interpret and administer
the Plan, to prescribe, amend and rescind rules and regulations relating to
the Plan and Awards, and full authority to select the persons to whom
Awards will be granted ("Participants"), determine the type and amount of
Awards to be granted to Participants (including any combination of Awards),
determine the terms and conditions of Awards granted under the Plan
(including terms and conditions relating to events of merger,
consolidation, dissolution and liquidation, change of control, vesting,
forfeiture, restrictions, dividends and interest, if any, on deferred
amounts), waive compliance by a participant with any obligation to be
performed by him or her under an Award, waive any term or condition of an
Award, cancel an existing Award in whole or in part with the consent of a
Participant, grant replacement Awards, accelerate the vesting or lapse of
any restrictions of any Award and adopt the form of instruments evidencing
Awards under the Plan and change such forms from time to time. Any
interpretation by the Board of the terms and provisions of the Plan or any
Award thereunder and the administration thereof, and all action taken by
the Board, shall be final, binding and conclusive on all parties and any
person claiming under or through any party. No Director shall be liable for
any action or determination made in good faith. The Board may, to the full
extent permitted by law, delegate any or all of its responsibilities under
the Plan to a committee (the "Committee") appointed by the Board and
consisting of two or more members of the Board, each of whom shall be
deemed a "disinterested person" within the meaning of Rule 16b-3 (or any
successor rule) of the Securities Exchange Act of 1934 (the "Exchange
Act").
3. Effective Date
The Plan shall be effective as of the date first approved by the Board
of Directors, subject to the approval of the Plan by the Corporation's
Stockholders. Grants of Awards under the Plan made prior to such approval
shall be effective when made (unless otherwise specified by the Board at
the time of grant), but shall be conditioned on and subject to such
approval of the Plan.
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4. Shares Subject to the Plan
Subject to adjustment as provided in Section 10.6, the total number of
shares of the common stock, $.01 par value per share, of the Company (the
"Common Stock"), reserved and available for distribution under the Plan
shall be 500,000 shares. Such shares may consist, in whole or in part, of
authorized and unissued shares or treasury shares.
If any Award of shares of Common Stock requiring exercise by the
Participant for delivery of such shares terminates without having been
exercised in full, is forfeited or is otherwise terminated without a
payment being made to the Participant in the form of Common Stock, or if
any shares of Common Stock subject to restrictions are repurchased by the
Company pursuant to the terms of any Award or are otherwise reacquired by
the Company to satisfy obligations arising by virtue of any Award, such
shares shall be available for distribution in connection with future Awards
under the Plan.
5. Eligibility
Employees, officers and Directors of, and consultants to, the Company
and its subsidiaries, or other persons who are expected to make significant
contributions to the future growth and success of the Company and its
subsidiaries shall be eligible to receive Awards under the Plan. The Board,
or other appropriate committee or person to the extent permitted pursuant
to the last sentence of Section 2, shall from time to time select from
among such eligible persons those who will receive Awards under the Plan.
6. Types of Awards
The Board may offer Awards under the Plan in any form of equity-based
interest, equity-based incentive or performance-based stock incentive in
Common Stock of the Company or any combination thereof. The type, terms and
conditions and restrictions of an Award shall be determined by the Board at
the time such Award is made to a Participant; provided however that the
maximum number of shares permitted to be granted under any Award or
combination of Awards to any Participant during any one calendar year may
not exceed 5% of the shares of Common Stock outstanding at the beginning of
such calendar year.
An Award shall be made at the time specified by the Board and shall be
subject to such conditions or restrictions as may be imposed by the Board
and shall conform to the general rules applicable under the Plan as well as
any special rules then applicable under federal tax laws or regulations or
the federal securities laws relating to the type of Award granted.
Without limiting the foregoing, Awards may take the following forms
and shall be subject to the following rules and conditions:
6.1 Options
An option is an Award that entitles the holder on exercise thereof to
purchase Common Stock at a specified exercise price. Options granted under
the Plan may be either incentive stock options ("incentive stock options")
that meet the requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or options that are not intended to meet the
requirements of Section 422 ("non-statutory options").
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6.1.1 Option Price. The price at which Common Stock may be purchased
upon exercise of an option shall be determined by the Board, provided
however, the exercise price shall not be less than the par value per share
of Common Stock.
6.1.2 Option Grants. The granting of an option shall take place at
the time specified by the Board. Options shall be evidenced by option
agreements. Such agreements shall conform to the requirements of the Plan,
and may contain such other provisions (including but not limited to vesting
and forfeiture provisions, acceleration, change of control, protection in
the event of merger, consolidations, dissolutions and liquidations) as the
Board shall deem advisable. Option agreements shall expressly state whether
an option grant is intended to qualify as an incentive stock option or
non-statutory option.
6.1.3 Option Period. An option will become exercisable at such time or
times (which may be immediately or in such installments as the Board shall
determine) and on such terms and conditions as the Board shall specify.
The option agreements shall specify the terms and conditions applicable in
the event of an option holder's termination of employment during the
option's term.
Any exercise of an option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any
additional documents required by the Board and (2) payment in full in
accordance with Section 6.1.4 for the number of shares for which the option
is exercised.
6.1.4 Payment of Exercise Price. Stock purchased on exercise of an
option shall be paid for as follows: (1) in cash or by check (subject to
such guidelines as the Company may establish for this purpose), bank draft
or money order payable to the order of the Company or (2) if so permitted
by the instrument evidencing the option (or in the case of a non-statutory
option, by the Board at or after grant of the option), (i) through the
delivery of shares of Common Stock that have been outstanding for at least
six months (unless the Board expressly approves a shorter period) and that
have a fair market value (determined in accordance with procedures
prescribed by the Board) equal to the exercise price, (ii) by delivery of a
promissory note of the option holder to the Company, payable on such terms
as are specified by the Board, (iii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (iv) by any combination of
the permissible forms of payment.
6.1.5 Buyout Provision. The Board may at any time offer to buy out
for a payment in cash, shares of Common Stock, deferred stock or restricted
stock, an option previously granted, based on such terms and conditions as
the Board shall establish and communicate to the option holder at the time
that such offer is made.
6.1.6 Special Rules for Incentive Stock Options. Each provision of
the Plan and each option agreement evidencing an incentive stock option
shall be construed so that each incentive stock option shall be an
incentive stock option as defined in Section 422A of the Code or any
statutory provision that may replace such Section, and any provisions
thereof that cannot be so construed shall be disregarded. Instruments
evidencing incentive stock options must contain such provisions as are
required under applicable provisions of the Code. Incentive stock options
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may be granted only to employees of the Company and its subsidiaries. The
exercise price of an incentive stock option shall not be less than 100%
(110% in the case of an incentive stock option granted to a more than ten
percent Stockholder of the Company) of the fair market value of the Common
Stock on the date of grant, as determined by the Board. An incentive stock
option may not be granted after the tenth anniversary of the date on which
the Plan was adopted by the Board and the latest date on which an incentive
stock option may be exercised shall be the tenth anniversary (fifth
anniversary, in the case of any incentive stock option granted to a more
than ten percent Stockholder of the Company) of the date of grant, as
determined by the Board.
6.2 Restricted and Unrestricted Stock
An Award of restricted stock entitles the recipient thereof to acquire
shares of Common Stock upon payment of the purchase price subject to
restrictions specified in the instrument evidencing the Award.
6.2.1 Restricted Stock Awards. Awards of restricted stock shall be
evidenced by restricted stock agreements. Such agreements shall conform to
the requirements of the Plan, and may contain such other provisions
(including restriction and forfeiture provisions, change of control,
protection in the event of mergers, consolidations, dissolutions and
liquidations) as the Board shall deem advisable.
6.2.2 Restrictions. Until the restrictions specified in a restricted
stock agreement shall lapse, restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of, and upon
certain conditions specified in the restricted stock agreement, must be
resold to the Company for the price, if any, specified in such agreement.
The restrictions shall lapse at such time or times, and on such conditions,
as the Board may specify. The Board may at any time accelerate the time at
which the restrictions on all or any part of the shares shall lapse.
6.2.3 Rights as a Stockholder. A Participant who acquires shares of
restricted stock will have all of the rights of a Stockholder with respect
to such shares including the right to receive dividends and to vote such
shares. Unless the Board otherwise determines, certificates evidencing
shares of restricted stock will remain in the possession of the Company
until such shares are free of all restrictions under the Plan.
6.2.4 Purchase Price. The purchase price of shares of restricted
stock shall be determined by the Board, in its sole discretion, but such
price may not be less than the par value of such shares.
6.2.5 Other Awards Settled With Restricted Stock. The Board may
provide that any or all the Common Stock delivered pursuant to an Award
will be restricted stock.
6.2.6 Unrestricted Stock. The Board may, in its sole discretion, sell
to any Participant shares of Common Stock free of restrictions under the
Plan for a price determined by the Board, but which may not be less than
the par value per share of the Common Stock.
6.3 Deferred Stock
6.3.1 Deferred Stock Award. A deferred stock Award entitles the
recipient to receive shares of deferred stock which is Common Stock to be
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delivered in the future. Delivery of the Common Stock will take place at
such time or times, and on such conditions, as the Board may specify. The
Board may at any time accelerate the time at which delivery of all or any
part of the Common Stock will take place.
6.3.2 Other Awards Settled with Deferred Stock. The Board may, at the
time any Award described in this Section 6 is granted, provide that, at the
time Common Stock would otherwise be delivered pursuant to the Award, the
Participant will instead receive an instrument evidencing the right to
future delivery of deferred stock.
6.4 Performance Awards
6.4.1 Performance Awards. A performance Award entitles the recipient
to receive, without payment, an Amount, in cash or Common Stock or a
combination thereof (such form to be determined by the Board), following
the attainment of performance goals. Performance goals may be related to
personal performance, corporate performance, departmental performance or
any other category of performance deemed by the Board to be important to
the success of the Company. The Board will determine the performance goals,
the period or periods during which performance is to be measured and all
other terms and conditions applicable to the Award.
6.4.2 Other Awards Subject to Performance Conditions. The Board may,
at the time any Award described in this Section 6 is granted, impose the
condition (in addition to any conditions specified or authorized in this
Section 6 of the Plan) that performance goals be met prior to the
Participant's realization of any payment or benefit under the Award.
7. Purchase Price and Payment
Except as otherwise provided in the Plan, the purchase price of Common
Stock to be acquired pursuant to an Award shall be the price determined by
the Board, provided that such price shall not be less than the par value of
the Common Stock. Except as otherwise provided in the Plan, the Board may
determine the method of payment of the exercise price or purchase price of
an Award granted under the Plan and the form of payment. The Board may
determine that all or any part of the purchase price of Common Stock
pursuant to an Award has been satisfied by past services rendered by the
Participant. The Board may agree at any time, upon request of the
Participant, to defer the date on which any payment under an Award will be
made.
8. Loans and Supplemental Grants
The Company may make a loan to a Participant, either on or after the
grant to the Participant of any Award, in connection with the purchase of
Common Stock under the Award or with the payment of any obligation incurred
or recognized as a result of the Award. The Board will have full authority
to decide whether the loan is to be secured or unsecured or with or without
recourse against the borrower, the terms on which the loan is to be repaid
and the conditions, if any, under which it may be forgiven.
In connection with any Award, the Board may at the time such Award is
made or at a later date, provide for and make a cash payment to the
participant not to exceed an amount equal to (a) the amount of any federal,
state and local income tax or ordinary income for which the Participant
will be liable with respect to the Award, plus (b) an additional amount on
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a grossed-up basis necessary to make him or her whole after tax,
discharging all the participant's income tax liabilities arising from all
payments under the Plan.
9. Change in Control
9.1 Impact of Event
In the event of a "Change in Control" as defined in Section 9.2, the
following provisions shall apply, unless the agreement evidencing the Award
otherwise provides:
(a) Any stock options or other stock-based Awards awarded under the
Plan that were not previously exercisable and vested shall become
fully exercisable and vested.
(b) Awards of restricted stock and other stock-based Awards subject to
restrictions and to the extent not fully vested, shall become fully
vested and all such restrictions shall lapse so that shares issued
pursuant to such Awards shall be free of restrictions.
(c) Deferral limitations and conditions that relate solely to the
passage of time, continued employment or affiliation, will be waived
and removed as to deferred stock Awards and performance Awards.
Performance of other conditions (other than conditions relating solely
to the passage of time, continued employment or affiliation) will
continue to apply unless otherwise provided in the agreement
evidencing the Awards or in any other agreement between the
Participant and the Company or unless otherwise agreed by the Board.
9.2 Definition of "Change in Control"
"Change in Control" means any one of the following events: (i) when,
any Person is or becomes the beneficial owner (as defined in Section 13(d)
of the Exchange Act and the Rules and Regulations thereunder), together
with all Affiliates and Associates (as such terms are used in Rule 12b-2 of
the General Rules and Regulations of the Exchange Act) of such Person,
directly or indirectly, of 50% or more of the outstanding Common Stock of
the Company or its parent corporation, ThermoTrex Corporation
("ThermoTrex"), or the beneficial owner of 25% or more of the outstanding
common stock of Thermo Electron Corporation ("Thermo Electron"), without
the prior approval of the Prior Directors of the applicable issuer, (ii)
the failure of the Prior Directors to constitute a majority of the Board of
Directors of the Company, ThermoTrex or Thermo Electron, as the case may
be, at any time within two years following any Electoral Event, or (iii)
any other event that the Prior Directors shall determine constitutes an
effective change in the control of the Company, ThermoTrex or Thermo
Electron. As used in the preceding sentence, the following capitalized
terms shall have the respective meanings set forth below:
(a) "Person" shall include any natural person, any entity, any
"affiliate" of any such natural person or entity as such term is
defined in Rule 405 under the Securities Act of 1933 and any "group"
(within the meaning of such term in Rule 13d-5 under the Exchange
Act);
(b) "Prior Directors" shall mean the persons sitting on the Company's,
ThermoTrex' or Thermo Electron's Board of Directors, as the case may
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be, immediately prior to any Electoral Event (or, if there has been no
Electoral Event, those persons sitting on the applicable Board of
Directors on the date of this Agreement) and any future director of
the Company, ThermoTrex or Thermo Electron who has been nominated or
elected by a majority of the Prior Directors who are then members of
the Board of Directors of the Company, ThermoTrex or Thermo Electron,
as the case may be; and
(c) "Electoral Event" shall mean any contested election of Directors,
or any tender or exchange offer for the Company's, ThermoTrex' or
Thermo Electron's Common Stock, not approved by the Prior Directors,
by any Person other than the Company, ThermoTrex, Thermo Electron or a
majority-owned subsidiary of Thermo Electron.
10. General Provisions
10.1 Documentation of Awards
Awards will be evidenced by written instruments, which may differ
among Participants, prescribed by the Board from time to time. Such
instruments may be in the form of agreements to be executed by both the
Participant and the Company or certificates, letters or similar instruments
which need not be executed by the participant but acceptance of which will
evidence agreement to the terms thereof. Such instruments shall conform to
the requirements of the Plan and may contain such other provisions
(including provisions relating to events of merger, consolidation,
dissolution and liquidations, change of control and restrictions affecting
either the agreement or the Common Stock issued thereunder), as the Board
deems advisable.
10.2 Rights as a Stockholder
Except as specifically provided by the Plan or the instrument
evidencing the Award, the receipt of an Award will not give a Participant
rights as a Stockholder with respect to any shares covered by an Award
until the date of issue of a stock certificate to the participant for such
shares.
10.3 Conditions on Delivery of Stock
The Company will not be obligated to deliver any shares of Common
Stock pursuant to the Plan or to remove any restriction from shares
previously delivered under the Plan (a) until all conditions of the Award
have been satisfied or removed, (b) until, in the opinion of the Company's
counsel, all applicable federal and state laws and regulations have been
complied with, (c) if the outstanding Common Stock is at the time listed on
any stock exchange, until the shares have been listed or authorized to be
listed on such exchange upon official notice of issuance, and (d) until all
other legal matters in connection with the issuance and delivery of such
shares have been approved by the Company's counsel. If the sale of Common
Stock has not been registered under the Securities Act of 1933, as amended,
the Company may require, as a condition to exercise of the Award, such
representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such act and may require that the
certificates evidencing such Common Stock bear an appropriate legend
restricting transfer.
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If an Award is exercised by the participant's legal representative,
the Company will be under no obligation to deliver Common Stock pursuant to
such exercise until the Company is satisfied as to the authority of such
representative.
10.4 Tax Withholding
The Company will withhold from any cash payment made pursuant to an
Award an amount sufficient to satisfy all federal, state and local
withholding tax requirements (the "withholding requirements").
In the case of an Award pursuant to which Common Stock may be
delivered, the Board will have the right to require that the participant or
other appropriate person remit to the Company an amount sufficient to
satisfy the withholding requirements, or make other arrangements
satisfactory to the Board with regard to such requirements, prior to the
delivery of any Common Stock. If and to the extent that such withholding is
required, the Board may permit the participant or such other person to
elect at such time and in such manner as the Board provides to have the
Company hold back from the shares to be delivered, or to deliver to the
Company, Common Stock having a value calculated to satisfy the withholding
requirement.
10.5 Nontransferability of Awards
Except as otherwise specifically provided by the Board in the case of
participants who are not reporting persons under Section 16 of the Exchange
Act, no Award (other than an Award in the form of an outright transfer of
cash or Common Stock not subject to any restrictions) may be transferred
other than by the laws of descent and distribution, except pursuant to the
terms of a qualified domestic relations order as defined in the Code, and
during a Participant's lifetime an Award requiring exercise may be
exercised only by him or her (or in the event of incapacity, the person or
persons properly appointed to act on his or her behalf).
10.6 Adjustments in the Event of Certain Transactions
(a) In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization,
or other distribution with respect to common Stockholders other than normal
cash dividends, the Board will make (i) appropriate adjustments to the
maximum number of shares that may be delivered under the Plan under Section
4 above, and (ii) appropriate adjustments to the number and kind of shares
of stock or securities subject to Awards then outstanding or subsequently
granted, any exercise prices relating to Awards and any other provisions of
Awards affected by such change.
(b) The Board may also make appropriate adjustments to take into
account material changes in law or in accounting practices or principles,
mergers, consolidations, acquisitions, dispositions, repurchases or similar
corporate transactions, or any other event, if it is determined by the
Board that adjustments are appropriate to avoid distortion in the operation
of the Plan, but no such adjustments other than those required by law may
adversely affect the rights of any Participant (without the Participant's
consent) under any Award previously granted.
8PAGE
<PAGE>
10.7 Employment Rights
Neither the adoption of the Plan nor the grant of Awards will confer
upon any person any right to continued employment with the Company or any
subsidiary or interfere in any way with the right of the Company or
subsidiary to terminate any employment relationship at any time or to
increase or decrease the compensation of such person. Except as
specifically provided by the Board in any particular case, the loss of
existing or potential profit in Awards granted under the Plan will not
constitute an element of damages in the event of termination of an
employment relationship even if the termination is in violation of an
obligation of the Company to the employee.
Whether an authorized leave of absence, or absence in military or
government service, shall constitute termination of employment shall be
determined by the Board at the time. For purposes of this Plan, transfer of
employment between the Company and its subsidiaries shall not be deemed
termination of employment.
10.8 Other Employee Benefits
The value of an Award granted to a Participant who is an employee, and
the amount of any compensation deemed to be received by an employee as a
result of any exercise or purchase of Common Stock pursuant to an Award or
sale of shares received under the Plan, will not constitute "earnings" or
"compensation" with respect to which any other employee benefits of such
employee are determined, including without limitation benefits under any
pension, stock ownership, stock purchase, life insurance, medical, health,
disability or salary continuation plan.
10.9 Legal Holidays
If any day on or before which action under the Plan must be taken
falls on a Saturday, Sunday or legal holiday, such action may be taken on
the next succeeding day not a Saturday, Sunday or legal holiday.
10.10 Foreign Nationals
Without amending the Plan, Awards may be granted to persons who are
foreign nationals or employed outside the United States or both, on such
terms and conditions different from those specified in the Plan, as may, in
the judgment of the Board, be necessary or desirable to further the purpose
of the Plan.
11. Termination and Amendment
The Plan shall remain in full force and effect until terminated by the
Board. Subject to the last sentence of this Section 11, the Board may at
any time or times amend the Plan or any outstanding Award for any purpose
that may at the time be permitted by law, or may at any time terminate the
Plan as to any further grants of Awards. No amendment, unless approved by
the Stockholders, shall be effective if it would cause the Plan to fail to
satisfy the requirements of the federal tax law or regulation relating to
incentive stock options or the requirements of Rule 16b-3 (or any successor
rule) of the Exchange Act. No amendment of the Plan or any agreement
evidencing Awards under the Plan may adversely affect the rights of any
participant under any Award previously granted without such participant's
consent.
EXHIBIT 13
THERMO PROCESS SYSTEMS INC.
Consolidated Financial Statements as of April 1, 1995
PAGE
<PAGE>
Thermo Process Systems Inc.
Consolidated Statement of Income
Year Ended
------------------------------
(In thousands except April 1, April 2, April 3,
per share amounts) 1995 1994 1993
--------------------------------------------------------------------------
Revenues (Note 9):
Service revenues $119,422 $ 94,326 $ 86,279
Product revenues 14,381 15,029 16,877
Contract revenues from related party - 776 1,793
-------- -------- --------
133,803 110,131 104,949
-------- -------- --------
Costs and Operating Expenses:
Cost of service revenues 86,570 70,230 66,871
Cost of product revenues 11,982 13,136 14,771
Cost of contract revenues from related
party (Note 9) - 776 1,793
Selling, general and administrative
expenses (Note 9) 26,257 21,195 16,966
Product and new business development
expenses 883 447 29
Costs associated with divisional
restructuring - 2,661 -
-------- -------- --------
125,692 108,445 100,430
-------- -------- --------
Operating Income 8,111 1,686 4,519
Gain on Issuance of Stock by Subsidiaries
(Note 11) 1,343 4,488 2,348
Interest Income 3,322 1,955 2,101
Interest Expense (includes $1,071 for
notes to parent company in fiscal 1995) (2,855) (1,387) (1,316)
Gain on Sale of Investments (includes
$1,089 on sale of related party
debentures in fiscal 1995) 1,092 645 -
-------- -------- --------
Income Before Income Taxes, Minority
Interest and Cumulative Effect of Change
in Accounting Principle 11,013 7,387 7,652
Income Tax (Provision) Benefit (Note 6) (2,630) 40 (968)
Minority Interest Expense, Net (4,268) (4,018) (3,520)
-------- -------- --------
Income Before Cumulative Effect of Change
in Accounting Principle 4,115 3,409 3,164
Cumulative Effect of Change in Accounting
Principle (Note 1) - 500 -
-------- -------- --------
Net Income $ 4,115 $ 3,909 $ 3,164
======== ======== ========
Earnings per Share Before Cumulative Effect
of Change in Accounting Principle $ 0.24 $ 0.20 $ 0.19
======== ======== ========
Earnings per Share $ 0.24 $ 0.23 $ 0.19
======== ======== ========
Weighted Average Shares 17,143 16,863 16,738
======== ======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
2PAGE
<PAGE>
Thermo Process Systems Inc.
Consolidated Balance Sheet
(In thousands) April 1, 1995 April 2, 1994
--------------------------------------------------------------------------
Assets
Current Assets:
Cash and cash equivalents $ 35,808 $ 15,976
Short-term available-for-sale investments,
at quoted market value (amortized cost of
$5,179 and $22,483) (Note 2) 5,155 23,123
Accounts receivable, less allowances of
$3,560 and $3,260 27,949 18,513
Unbilled contract costs and fees 16,481 9,394
Inventories 2,732 2,393
Prepaid expenses 3,788 2,091
Prepaid and refundable income taxes (Note 6) 8,228 2,081
-------- --------
100,141 73,571
-------- --------
Property, Plant and Equipment, at Cost, Net 59,737 32,450
-------- --------
Long-term Available-for-sale Investments, at
Quoted Market Value (amortized cost of
$10,687 and $11,543) (Note 2) 10,564 11,438
-------- --------
Long-term Held-to-maturity Investments, at
Amortized Cost (quoted market value of
$22,810) (Note 2) 22,569 -
-------- --------
Other Assets 12,146 5,265
-------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 3) 66,516 32,710
-------- --------
$271,673 $155,434
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3PAGE
<PAGE>
Thermo Process Systems Inc.
Consolidated Balance Sheet (continued)
(In thousands except share amounts) April 1, 1995 April 2, 1994
--------------------------------------------------------------------------
Liabilities and Shareholders' Investment
Current Liabilities:
Accounts payable $ 9,612 $ 6,152
Notes payable and current maturities of
long-term obligations (includes $4,000
in fiscal 1995 due to parent company)
(Notes 3 and 8) 4,652 975
Billings in excess of revenues earned 835 1,997
Accrued payroll and employee benefits 6,845 5,010
Accrued and current deferred income taxes 1,773 263
Other accrued expenses (Note 3) 8,612 4,997
Due to parent company 3,116 2,565
-------- --------
35,445 21,959
-------- --------
Deferred Income Taxes (Note 6) 4,116 2,167
-------- --------
Other Deferred Items 1,057 -
-------- --------
Long-term Obligations (Note 8):
6 1/2% Subordinated convertible debentures 18,547 18,547
Other (includes $53,000 in fiscal 1995 due
to parent company) (Note 3) 78,304 185
-------- --------
96,851 18,732
-------- --------
Minority Interest 56,603 50,017
-------- --------
Commitments and Contingencies (Note 7)
Shareholders' Investment (Notes 4 and 10):
Common stock, $.10 par value, 30,000,000
shares authorized; 17,414,322 and 17,254,026
shares issued 1,741 1,725
Capital in excess of par value 53,559 46,456
Retained earnings 21,727 17,612
Treasury stock at cost, 71,072 and 267,371
shares (864) (2,911)
Cumulative translation adjustment 1,526 (669)
Net unrealized gain (loss) on available-for-
sale investments (Note 2) (88) 346
-------- --------
77,601 62,559
-------- --------
$271,673 $155,434
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
4PAGE
<PAGE>
Thermo Process Systems Inc.
Consolidated Statement of Cash Flows
Year Ended
------------------------------
April 1, April 2, April 3,
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------
Operating Activities:
Net income $ 4,115 $ 3,909 $ 3,164
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,615 5,653 4,802
Minority interest expense, net 4,268 4,018 3,520
Provision for losses on accounts
receivable 162 424 164
Other noncash expenses 1,634 1,075 527
Increase in deferred income taxes - 713 105
Gain on issuance of stock by
subsidiaries (Note 11) (1,343) (4,488) (2,348)
Gain on sale of investments (1,092) (645) -
Costs associated with divisional
restructuring - 2,661 -
Cumulative effect of change in accounting
principle (Note 1) - (500) -
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable (1,547) (362) 4,660
Inventories and unbilled contract
costs and fees (1,752) (895) 1,108
Other current assets 267 (493) (808)
Current liabilities (3,942) 498 1,123
-------- -------- --------
Net cash provided by operating
activities 7,385 11,568 16,017
-------- -------- --------
Investing Activities:
Acquisitions, net of cash acquired
(Note 3) (38,188) (4,150) (6,440)
Proceeds from sale and maturities of
available-for-sale investments 19,252 59,401 -
Purchases of available-for-sale
investments - (74,650) -
Purchases of held-to-maturity investments (22,300) - -
Increase in short-term investments - - (13,394)
Purchases of property, plant and equipment (7,030) (7,491) (6,658)
Other (380) (197) 331
-------- -------- --------
Net cash used in investing
activities $(48,646) $(27,087) $(26,161)
-------- -------- --------
5PAGE
<PAGE>
Thermo Process Systems Inc.
Consolidated Statement of Cash Flows (continued)
Year Ended
------------------------------
April 1, April 2, April 3,
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------
Financing Activities:
Issuance of note receivable (Note 3) $ (700) $ - $ -
Issuance of notes to parent company 57,000 - -
Proceeds from issuance of Company and
subsidiaries' common stock and warrants
(Note 11) 3,903 15,999 4,518
Purchases of Company and subsidiary common
stock (135) - (1,871)
Dividends paid by subsidiaries to minority
shareholders (685) (519) (420)
Environmental Services Businesses transfer
of cash to Thermo Instrument (Note 3) - (2,703) (4,361)
Other 11 (103) (54)
-------- -------- --------
Net cash provided by (used in)
financing activities 59,394 12,674 (2,188)
-------- -------- --------
Exchange Rate Effect on Cash 1,699 (344) 47
-------- -------- --------
Increase (Decrease) in Cash and Cash
Equivalents 19,832 (3,189) (12,285)
Cash and Cash Equivalents at Beginning of
Year 15,976 19,165 31,450
-------- -------- --------
Cash and Cash Equivalents at End of Year $ 35,808 $ 15,976 $ 19,165
======== ======== ========
See Note 13 for supplemental cash flow information.
The accompanying notes are an integral part of these consolidated financial
statements.
6PAGE
<PAGE>
Thermo Process Systems Inc.
Consolidated Statement of Shareholders' Investment
Common
Stock, Capital in
$.10 Par Excess of Retained
(In thousands) Value Par Value Earnings
--------------------------------------------------------------------------
Balance March 28, 1992 $ 1,684 $43,382 $10,539
Net income - - 3,164
Issuance of warrants (Note 11) - 572 -
Purchases of Company common stock - - -
Issuance of stock under employees'
and directors' stock plans 24 1,104 -
Conversions of 6 1/2% subordinated
convertible debentures 1 133 -
Cumulative translation adjustment - - -
------- ------- -------
Balance April 3, 1993 1,709 45,191 13,703
Net income - - 3,909
Issuance of stock under employees'
and directors' stock plans 16 469 -
Effect of majority-owned subsidiary's
equity transactions - 796 -
Effect of change in accounting
principle (Note 2) - - -
Cumulative translation adjustment - - -
------- ------- -------
Balance April 2, 1994 1,725 46,456 17,612
Net income - - 4,115
Issuance of stock under employees'
and directors' stock plans 16 582 -
Tax benefit related to employees'
and directors' stock plans - 1,249 -
Issuance of stock for acquired
business (Note 3) - (1,326) -
Issuance of Company stock options
for acquired business (Note 3) - 6,923 -
Effect of majority-owned subsidiary's
equity transactions - (325) -
Change in net unrealized loss
on available-for-sale investments
(Note 2) - - -
Cumulative translation adjustment - - -
------- ------- -------
Balance April 1, 1995 $ 1,741 $53,559 $21,727
======= ======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
7PAGE
<PAGE>
Thermo Process Systems Inc.
Consolidated Statement of Shareholders' Investment (continued)
Net
Unrealized
Gain (Loss)
Cumulative on Available-
Treasury Translation for-sale
(In thousands) Stock Adjustment Investments
--------------------------------------------------------------------------
Balance March 28, 1992 $ (661) $ (124) $ -
Net income - - -
Issuance of warrants (Note 11) - - -
Purchases of Company common stock (1,841) - -
Issuance of stock under employees'
and directors' stock plans (454) - -
Conversions of 6 1/2% subordinated
convertible debentures - - -
Cumulative translation adjustment - 96 -
------- ------- -------
Balance April 3, 1993 (2,956) (28) -
Net income - - -
Issuance of stock under employees'
and directors' stock plans 45 - -
Effect of majority-owned subsidiary's
equity transactions - - -
Effect of change in accounting
principle (Note 2) - - 346
Cumulative translation adjustment - (641) -
------- ------- -------
Balance April 2, 1994 (2,911) (669) 346
Net income - - -
Issuance of stock under employees'
and directors' stock plans (119) - -
Tax benefit related to employees'
and directors' stock plans - - -
Issuance of stock for acquired
business (Note 3) 2,166 - -
Issuance of Company stock options
for acquired business (Note 3) - - -
Effect of majority-owned subsidiary's
equity transactions - - -
Change in net unrealized loss
on available-for-sale investments
(Note 2) - - (434)
Cumulative translation adjustment - 2,195 -
------- ------- -------
Balance April 1, 1995 $ (864) $ 1,526 $ (88)
======= ======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
8PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Relationship with Thermo Electron Corporation
Thermo Process Systems Inc. (the Company) was incorporated on May 30, 1986,
as an indirect, wholly owned subsidiary of Thermo Electron Corporation
(Thermo Electron). As of April 1, 1995, Thermo Electron owned 13,933,591
shares of the Company's common stock, representing 80% of such stock
outstanding.
Principles of Consolidation
The accompanying financial statements include the accounts of the Company
and its majority- and wholly owned subsidiaries. All material intercompany
accounts and transactions have been eliminated. Majority-owned subsidiaries
include Thermo Remediation Inc. (Thermo Remediation), a publicly held
subsidiary; J. Amerika N.V. (J. Amerika), a privately held subsidiary; and
Thermo Terra Tech, a 51%-owned joint venture that was formed in May 1994
with Thermo Instrument Systems Inc. (Thermo Instrument), another public
subsidiary of Thermo Electron (Notes 3 and 14). Majority-owned subsidiaries
that were included in the Company's Thermo Remediation subsidiary effective
October 1, 1993 were TPST Soil Recyclers of South Carolina Inc. (TPST South
Carolina), TPST Soil Recyclers of Virginia Inc. (TPST Virginia), TPST Soil
Recyclers of Southern California Inc. (TPST Southern California), and TPST
Soil Recyclers of Florida Inc. (TPST Florida).
Fiscal Year
The Company has adopted a fiscal year ending the Saturday nearest March 31.
References to fiscal 1995, 1994, and 1993 are for the fiscal years ended
April 1, 1995, April 2, 1994, and April 3, 1993, respectively. Fiscal years
1995 and 1994 each included 52 weeks; 1993 included 53 weeks.
Revenue Recognition
For the majority of its operations, the Company recognizes revenues upon
completion of services it renders. Revenues from soil-remediation services
are recognized as soil is processed. With respect to soil-remediation
services, the Company bills customers upon receipt of the contaminated soil
at its remediation centers. Amounts billed in excess of revenues recognized
are classified as "Billings in excess of revenues earned" in the
accompanying balance sheet.
Revenues and profits on substantially all contracts are recognized
using the percentage-of-completion method. Revenues recorded under the
percentage-of-completion method were $47,446,000 in fiscal 1995,
$46,072,000 in fiscal 1994, and $48,578,000 in fiscal 1993. The percentage
of completion is determined by relating either the actual costs or actual
labor incurred to date to management's estimate of total costs or total
labor, respectively, to be incurred on each contract. If a loss is
indicated on any contract in process, a provision is made currently for the
entire loss. The Company's contracts generally provide for billing of
customers upon the attainment of certain milestones specified in each
contract. Revenues earned on contracts in process in excess of billings are
classified as "Unbilled contract costs and fees" in the accompanying
balance sheet. There are no significant amounts included in the
accompanying balance sheet that are not expected to be recovered from
existing contracts at current contract values, or that are not expected to
be collected within one year, including amounts billed but not paid under
retainage provisions.
9PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies (continued)
Gain on Issuance of Stock by Subsidiaries
At the time a subsidiary sells its stock to unrelated parties at a price in
excess of its book value, the Company's net investment in that subsidiary
increases. If at that time the subsidiary is an operating entity and not
engaged principally in research and development, the Company records the
increase as a gain. See Note 11 for a description of gains recorded.
If gains have been recognized on issuances of a subsidiary's stock and
shares of the subsidiary are subsequently repurchased either by the
subsidiary, the Company, or Thermo Electron, gain recognition does not
occur on issuances subsequent to the date of a repurchase until such time
as shares have been issued in an amount equivalent to the number of
repurchased shares.
Income Taxes
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes," as of the beginning of fiscal 1994.
Under SFAS No. 109, deferred income taxes are recognized based on the
expected future tax consequences of differences between the financial
statement basis and the tax basis of assets and liabilities calculated
using enacted tax rates in effect for the year in which the differences are
expected to be reflected in the tax return. Prior to fiscal 1994, the
Company recorded income taxes on timing differences between financial
statement and tax treatment of income and expenses under Accounting
Principles Board Opinion No. 11. Upon adoption of SFAS No. 109, the Company
recorded a cumulative benefit of $500,000, which is included in the
accompanying statement of income.
Earnings per Share
Earnings per share have been computed based on the weighted average number
of shares outstanding during the year. Because the effect of the exercise
of common stock equivalents was immaterial, they have been excluded from
the earnings per share calculation. Fully diluted earnings per share have
not been presented because the effect of the conversion of the Company's
subordinated convertible debentures would be antidilutive.
Cash and Cash Equivalents
As of April 1, 1995, $30,802,000 of the Company's cash equivalents were
invested in a repurchase agreement with Thermo Electron. Under this
agreement, the Company 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 Company's funds subject to
the repurchase agreement are readily convertible into cash by the Company
and have an original 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. As of April 1, 1995,
the Company's cash equivalents were also invested in a money market fund.
Cash equivalents are carried at cost, which approximates market value.
10PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies (continued)
Available-for-sale and Held-to-maturity Investments
Pursuant to SFAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," debt and marketable equity securities that the Company
considers available-for-sale are accounted for at market value. Debt
securities that the Company intends to hold to maturity are accounted for
at amortized cost. See Note 2 for a description of these investments.
Inventories
Inventories are stated at the lower of cost (on an average-cost basis) or
market value and include materials and labor. The components of inventories
are as follows:
(In thousands) 1995 1994
--------------------------------------------------------------------------
Raw materials and supplies $ 2,705 $ 1,908
Work in process and finished goods 27 485
------- -------
$ 2,732 $ 2,393
======= =======
Property, Plant and Equipment
The costs of additions and improvements are capitalized, while maintenance
and repairs are charged to expense as incurred. The Company provides for
depreciation and amortization using the straight-line method over the
estimated useful lives of the property as follows: buildings and
improvements - 5 to 40 years; machinery and equipment - 3 to 10 years; and
leasehold improvements - the shorter of the term of the lease or the life
of the asset. Soil-remediation units, which accounted for 21% and 19% of
the Company's total machinery and equipment at fiscal year-end 1995 and
1994, respectively, are depreciated based on an hourly rate that is
computed by estimating total hours of operation for each unit. Property,
plant and equipment consist of the following:
(In thousands) 1995 1994
--------------------------------------------------------------------------
Land and buildings $23,333 $11,715
Machinery, equipment and leasehold improvements 69,462 50,511
------- -------
92,795 62,226
Less: Accumulated depreciation and amortization 33,058 29,776
------- -------
$59,737 $32,450
======= =======
Other Assets
"Other assets" in the accompanying balance sheet includes the cost of
acquired technology and other specifically identifiable intangible assets
that are being amortized using the straight-line method over their
estimated useful lives, which range from 5 to 12 years. These assets were
$9,994,000 and $4,212,000, net of accumulated amortization of $3,217,000
and $2,037,000, at fiscal year-end 1995 and 1994, respectively.
11PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies (continued)
Cost in Excess of Net Assets of Acquired Companies
The excess of cost over the fair value of net assets of acquired businesses
is amortized using the straight-line method over 40 years. Accumulated
amortization was $4,721,000 and $3,744,000 at fiscal year-end 1995 and
1994, respectively. The Company assesses the future useful life of this
asset whenever events or changes in circumstances indicate the current
useful life has diminished. The Company considers the future undiscounted
cash flows of the acquired businesses in assessing the recoverability of
this asset.
Foreign Currency
All assets and liabilities of the Company's foreign subsidiaries are
translated at year-end exchange rates, and revenues and expenses are
translated at average exchange rates for the year in accordance with SFAS
No. 52, "Foreign Currency Translation." Resulting translation adjustments
are reflected as a separate component of shareholders' investment titled
"Cumulative translation adjustment." Foreign currency transaction gains and
losses are included in the accompanying statement of income and are not
material for the three years presented.
2. Available-for-sale and Held-to-maturity Investments
Effective April 2, 1994, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." In accordance with SFAS
No. 115, the Company's debt and marketable equity securities that are
classified as "Available-for-sale investments" in the accompanying balance
sheet are carried at market value, with the difference between cost and
market value, net of related tax effects, recorded currently as a component
of shareholders' investment titled "Net unrealized gain (loss) on
available-for-sale investments." "Effect of change in accounting principle"
in the accompanying statement of shareholders' investment represents the
unrealized gain, net of related tax effects, pertaining to short-term
available-for-sale investments held by the Company on April 2, 1994.
In order to meet the Company's obligation to the former owner of Elson
T. Killam Associates, Inc., which the Company acquired in February 1995,
the Company purchased securities with a maturity date equal to the date the
Company's zero coupon promissory note is due (see Note 3). These securities
are classified as "Held-to-maturity investments" in the accompanying
balance sheet and are carried at amortized cost.
12PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
2. Available-for-sale and Held-to-maturity Investments (continued)
The aggregate market value, cost basis, and gross unrealized gains and
losses of short- and long-term available-for-sale investments by major
security type, as of April 1, 1995 and April 2, 1994, are as follows:
1995 Gross Gross
Unrealized Unrealized
(In thousands) Market Value Cost Basis Gains Losses
--------------------------------------------------------------------------
Tax-exempt securities $11,545 $11,594 $ - $ 49
Corporate bonds 1,980 2,000 - 20
Money market preferred stock 2,087 2,165 - 78
Other 107 107 - -
------- ------- ------- -------
$15,719 $15,866 $ - $ 147
======= ======= ======= =======
1994 Gross Gross
Unrealized Unrealized
(In thousands) Market Value Cost Basis Gains Losses
--------------------------------------------------------------------------
Tax-exempt securities $11,500 $11,761 $ - $ 261
Corporate bonds 16,763 16,024 815 76
Money market preferred stock 3,055 2,990 97 32
Asset-backed securities 2,999 3,007 - 8
Other 244 244 - -
------- ------- ------- -------
$34,561 $34,026 $ 912 $ 377
======= ======= ======= =======
Short- and long-term available-for-sale investments in the
accompanying fiscal 1995 balance sheet include $6,679,000 with contractual
maturities of one year or less and $9,040,000 with contractual maturities
of more than one year through five years. Actual maturities may differ from
contractual maturities as a result of the Company's intent to sell these
securities prior to maturity and as a result of put and call options that
enable the Company and/or the issuer to redeem these securities at an
earlier date.
The cost of available-for-sale investments that were sold was based on
specific identification in determining realized gains recorded in the
accompanying statement of income. Gain on sale of investments in fiscal
1995 and 1994 resulted from gross realized gains relating to the sale of
available-for-sale investments.
"Long-term held-to-maturity investments" in the accompanying fiscal
1995 balance sheet represent investments in U.S. treasury bonds that mature
in February and May 1998. It is the Company's intent and ability to hold
these securities to maturity.
3. Joint Venture and Acquisitions
Joint Venture
In May 1994, the Company entered into an agreement establishing Thermo
Terra Tech, an environmental services joint venture, with Thermo Instrument
that became effective April 4, 1994. The Company contributed to the joint
venture Terra Tech Labs, Inc. (later renamed Thermo Analytical Inc.) and
13PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
3. Joint Venture and Acquisitions (continued)
approximately $31 million in cash and short-term investments, $15 million
of which was borrowed from Thermo Electron pursuant to a promissory note
(Note 8). Thermo Instrument contributed its environmental services
businesses (Environmental Services Businesses of Thermo Instrument or
Environmental Services Businesses) that consist of a national network of
analytical laboratories, and businesses that provide nuclear-radiation
safety and environmental science and consulting services. As of April 1,
1995, the Company owned 51% of Thermo Terra Tech. Accordingly, the joint
venture's operating results are consolidated with the Company's operating
results. Under the terms of the joint venture agreement, 66.67% of income
earned by the joint venture from April 4, 1994 to April 1, 1995 was
allocated to Thermo Instrument.
Because the Company and the Environmental Services Businesses were
deemed for accounting purposes to be under control of their common majority
owner, Thermo Electron, the transaction was accounted for at historical
cost in a manner similar to a pooling of interests. Accordingly, in fiscal
1994 all historical financial information presented was restated to include
the accounts and operations of the Environmental Services Businesses. In
fiscal 1994 and 1993, amounts earned by the Environmental Services
Businesses of Thermo Instrument were allocated to Thermo Instrument through
minority interest expense in the accompanying financial statements.
In May 1995, the Company agreed to dissolve the Thermo Terra Tech
joint venture and to purchase the businesses formerly operated by the joint
venture (Note 14).
Acquisitions
On March 29, 1995, the Company's J. Amerika subsidiary acquired all of the
outstanding capital stock of Refining and Trading Holland B.V., which
conducts business under the name North Refinery, from Stalt Holding B.V.
North Refinery, located in Delfzijl, Holland. North Refinery specializes in
processing "off-spec" and contaminated petroleum fluids into usable
products such as gas oil, diesel oil, and fuel oil. The purchase price for
North Refinery's stock was 9,568,000 Dutch guilders (approximately
$6,180,000) and 228,570 shares of J. Amerika's capital stock, valued at
1,327,000 Dutch guilders (approximately $857,000). J. Amerika has also
agreed to pay, after the fifth anniversary date of the closing, an amount
equal to 20% of the amount by which the cumulative pretax profits of North
Refinery's business over the five-year period ending on such anniversary
exceeds 5,000,000 Dutch guilders.
In February 1995, the Company acquired all of the outstanding capital
stock of Engineering, Technology and Knowledge Corporation (ETKC) from Nord
Est S.A., a French industrial company (Nord Est). ETKC's sole subsidiary,
Elson T. Killam Associates, Inc. (Killam Associates), is a leading provider
of comprehensive environmental consulting and professional engineering
services in selected areas of the U.S. The purchase price for ETKC's stock
was $12,566,000 in cash and a zero coupon promissory note with a face value
of $28,000,000 and a present value of $22,300,000 as of the acquisition
closing date, payable in February and May 1998. The purchase price is
subject to a post-closing adjustment based on Killam Associates' net
tangible book value as of January 29, 1995. The Company has also agreed to
pay, after the third anniversary date of the closing, an amount equal to
30% of the amount by which Killam Associates' cumulative net income for the
three-year period ending on such anniversary exceeds $13 million. In a
14PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
3. Joint Venture and Acquisitions (continued)
related transaction, certain members of Killam Associates' senior
management (the Killam Management) exchanged outstanding options to
purchase shares of Killam Associates' capital stock for options to purchase
an aggregate of 847,678 shares of the Company's common stock, which options
were valued at $6,923,000. Additional options to purchase shares of Killam
Associates' capital stock were canceled in exchange for cash payments to
the Killam Management in the aggregate amount of $1,922,000. The Company
borrowed the cash portion of the purchase price, including cash used to
purchase U.S. treasury bonds to collateralize the promissory note delivered
to Nord Est, from Thermo Electron through the issuance of a $38 million
promissory note (Note 8).
In October 1994, the Company's Thermo Remediation subsidiary acquired
a soil-remediation facility in South Tacoma, Washington (renamed TPST
Woodworth) from Woodworth & Company, Inc. The purchase price for TPST
Woodworth was $4,701,000 in cash. In connection with the financing of
acquisitions, Thermo Remediation issued to Thermo Electron a $4,000,000
promissory note (Note 8). During fiscal 1995, the Company's Thermo
Remediation subsidiary and Thermo Terra Tech joint venture made other
acquisitions for an aggregate of $14.2 million in cash.
In January 1994, the Company acquired Terra Tech Labs, Inc. (Terra
Tech), a privately held company specializing in fast-response testing of
petroleum-contaminated soils and groundwater in the southwestern U.S. The
acquisition was made for $1,500,000 in cash and up to an additional
$1,200,000 payable over a two-year period if the business achieves certain
performance goals. Terra Tech has facilities in Santa Ana, California, and
Phoenix, Arizona, as well as four mobile units, which provide services
primarily to the petroleum industry and consulting engineers.
In November 1993, the Company acquired a fluids recovery company based
in Mesa, Arizona (renamed Thermo Fluids) for $2,650,000 in cash and
immediately transferred it to Thermo Remediation in exchange for a
$2,650,000 principal amount 3.875% subordinated convertible note due 2000.
In addition, due to Thermo Fluids having met certain performance criteria,
on February 1, 1995, the Company issued to the former owner of Thermo
Fluids 178,060 restricted shares of its common stock valued at $840,000.
Thermo Remediation in turn issued to the Company 127,369 restricted shares
of its common stock valued at $840,000. In August 1994, Thermo Remediation
loaned $700,000, included in "Other assets" in the accompanying fiscal 1995
balance sheet, to the former owner of Thermo Fluids in connection with the
termination of employment with Thermo Fluids and the settlement of the
parties' respective obligations to one another. This obligation is
represented by a promissory note bearing interest at a rate equal to the
rate of interest on one-year U.S. treasury notes, adjusted on an annual
basis, and is secured by a pledge of the Company's common stock issued to
the former owner. The note is receivable in three equal installments
commencing in March 1997.
These acquisitions have been accounted for using the purchase method
of accounting, and their results of operations have been included in the
accompanying financial statements from their respective dates of
acquisition. The aggregate cost of these acquisitions exceeded the
estimated fair value of the acquired net assets by $36,838,000, which is
15PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
3. Joint Venture and Acquisitions (continued)
being amortized over 40 years. Allocation of the purchase price for these
acquisitions was based on estimates of the fair value of the net assets
acquired and, for acquisitions completed in fiscal 1995, is subject to
adjustment.
Based on unaudited data, the following table presents selected
financial information for the Company, North Refinery, Killam Associates,
and TPST Woodworth on a pro forma basis, assuming the companies had been
combined since the beginning of fiscal 1994. The effect on the Company's
financial statements of the acquisitions not included in the pro forma data
was not significant.
(In thousands) 1995 1994
--------------------------------------------------------------------------
Revenues $178,993 $158,933
Income before cumulative effect of change in
accounting principle 4,068 3,299
Earnings per share before cumulative effect of
change in accounting principle .24 .20
The pro forma results are not necessarily indicative of future
operations or the actual results that would have occurred had the
acquisitions been made at the beginning of fiscal 1994.
"Other accrued expenses" in the accompanying fiscal 1995 balance sheet
includes $1,848,000 for estimated severance, relocation, and other reserves
associated with acquisitions.
4. Stock-based Compensation Plans
The Company has stock-based compensation plans for its key employees,
directors, and others. Two of these plans, adopted in 1986, permit the
grant of nonqualified and incentive stock options. A third plan, adopted in
fiscal 1994, permits the grant of a variety of stock and stock-based awards
as determined by the human resources committee of the Company's Board of
Directors (the Board Committee), including restricted stock, stock options,
stock bonus shares, or performance-based shares. To date, only nonqualified
stock options have been awarded under these plans. The option recipients
and the terms of options granted under these plans are determined by the
Board Committee. Generally, options granted to date are exercisable
immediately, but are subject to certain transfer restrictions and the right
of the Company to repurchase shares issued upon exercise of the options at
the exercise price, upon certain events. The restrictions and repurchase
rights generally lapse ratably over periods ranging from three to ten years
after the first anniversary of the grant date, depending on the term of the
option, which may range from five to twelve years. Nonqualified stock
options may be granted at any price determined by the Board Committee,
although incentive stock options must be granted at not less than fair
market value of the Company's stock on the date of grant. Generally, all
options have been granted at fair market value. The Company also has a
directors' stock option plan, adopted in September 1991, that provides for
the grant of stock options to nonemployee directors pursuant to a formula
approved by the Company's shareholders. Options awarded under this plan are
exercisable six months after the date of grant and expire three to seven
years after the date of grant. In addition to the Company's stock-based
compensation plans, certain officers and key employees may also participate
16PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
4. Stock-based Compensation Plans (continued)
in the stock-based compensation plans of Thermo Electron or its
majority-owned subsidiaries.
No accounting recognition is given to options granted at fair market
value until they are exercised. Upon exercise, net proceeds, including tax
benefits realized, are credited to equity. A summary of the Company's stock
option information is as follows:
1995 1994 1993
---------------- ---------------- ---------------
Range Range Range
of of of
Option Option Option
Number Prices Number Prices Number Prices
(In thousands except of per of per of per
per share amounts) Shares Share Shares Share Shares Share
--------------------------------------------------------------------------
Options outstanding,
beginning of year 1,318 $ 1.43- 823 $ 1.27- 847 $ 1.27-
$16.05 $16.05 $16.05
Granted 665 7.83- 785 7.65- 224 6.00-
8.18 9.28 10.00
Exercised (197) 1.43- (238) 1.27- (229) 1.27-
3.19 3.19 8.65
Lapsed or cancelled (75) 8.10- (52) 6.00- (19) 1.55-
10.00 8.65 8.65
----- ----- ----
Options outstanding,
end of year 1,711 $ 1.79- 1,318 $ 1.43- 823 $ 1.27-
===== $16.05 ===== $16.05 ==== $16.05
Options exercisable 1,710 $ 1.79- 1,316 $ 1.43- 823 $ 1.27-
===== $16.05 ===== $16.05 ==== $16.05
Options available for
grant 874 415 397
===== ===== ====
5. Employee Benefit Plans
Employee Stock Purchase Plan
The majority of the Company's full-time U.S. employees are eligible to
participate in an employee stock purchase plan sponsored by the Company.
Under this plan, shares of the Company's and Thermo Electron's common stock
may be purchased at the end of a 12-month plan year at 85% of the fair
market value at the beginning of the plan year, and the shares purchased
are subject to a one-year resale restriction. Shares are purchased through
payroll deductions of up to 10% of each participating employee's gross
wages. During fiscal 1995, 1994, and 1993, the Company issued 21,999
shares, 28,845 shares, and 23,677 shares of its common stock, respectively,
under this plan. Employees of the Environmental Services Businesses of
Thermo Instrument participated in an employee stock purchase plan sponsored
by Thermo Instrument through the end of November 1994. Thereafter, they
became eligible to participate in the Company's employee stock purchase
plan.
17PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
5. Employee Benefit Plans (continued)
401(k) Savings Plan and Employee Stock Ownership Plan
The majority of the Company's full-time U.S. employees are eligible to
participate in Thermo Electron's 401(k) savings plan and employee stock
ownership plan. Contributions to the Thermo Electron 401(k) savings plan
are made by both the employee and the Company. Company contributions are
based upon the level of employee contributions. Certain subsidiaries of the
Company also have a defined contribution retirement plan, a
union-sponsored, collectively bargained multiemployer pension plan, and
401(k) savings plans. For these plans, the Company contributed and charged
to expense $1,654,000, $1,465,000, and $1,449,000 in fiscal 1995, 1994, and
1993, respectively.
Postemployment Benefits
The Company provides certain postemployment benefits to former or inactive
employees. In accordance with SFAS No. 112, "Employers' Accounting for
Postemployment Benefits," the Company recognizes the cost of postemployment
benefits if certain criteria are met and the amount of benefits can be
reasonably estimated.
6. Income Taxes
As discussed in Note 1, the Company adopted SFAS No. 109 in fiscal 1994.
The components of the income tax (provision) benefit are as follows:
(In thousands) 1995 1994 1993
------------------------------------------------------------------------
Currently (payable) prepaid:
Federal $(3,061) $ 139 $ 51
State (1,063) (41) (129)
Foreign (96) 45 (138)
------- ------- -------
(4,220) 143 (216)
------- ------- -------
(Deferred) prepaid, net:
Federal 1,287 (50) (642)
State 303 (53) (110)
------- ------- -------
1,590 (103) (752)
------- ------- -------
$(2,630) $ 40 $ (968)
======= ======= =======
18PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
6. Income Taxes (continued)
The income tax (provision) benefit in the accompanying statement of
income differs from the provision calculated by applying the statutory
federal income tax rate of 34% to income before income taxes, minority
interest and cumulative effect of change in accounting principle due to the
following:
(In thousands) 1995 1994 1993
------------------------------------------------------------------------
Income tax provision at statutory rate $(3,744) $(2,512) $(2,602)
Differences resulting from:
Gain on issuance of stock by subsidiaries 456 1,526 798
Minority interest in joint venture income
(Note 3) 1,061 1,205 1,030
Foreign tax rate and tax law differential (10) (114) -
State income taxes, net of federal tax (502) (62) (158)
Tax-exempt investment income 180 34 -
Nondeductible expenses (249) (47) (22)
Other, net 178 10 (14)
------- ------- -------
$(2,630) $ 40 $ (968)
======= ======= =======
Deferred income taxes and prepaid income taxes in the accompanying
balance sheet consist of the following:
(In thousands) 1995 1994
--------------------------------------------------------------
Current and long-term deferred income taxes:
Depreciation $ 2,376 $ 2,124
Other deferred items 1,740 306
------- -------
$ 4,116 $ 2,430
======= =======
Prepaid income taxes:
Accrued compensation $ 3,623 $ 292
Reserves and other accruals 3,112 815
Allowance for doubtful accounts 1,444 169
Depreciation 66 112
Intangible assets 57 55
Net operating loss carryforward 106 184
Federal tax credit carryforward 39 37
Inventory basis difference 57 263
------- -------
8,504 1,927
Less: Valuation allowance 276 276
------- -------
$ 8,228 $ 1,651
======= =======
The valuation allowance relates to the uncertainty surrounding the
realization of the tax benefits attributable to federal operating losses,
credit carryforwards, and purchase accounting reserves related to various
acquisitions. The valuation allowance will be used to reduce "Cost in
excess of net assets of acquired companies" when any portion of the related
deferred tax asset is recognized.
19PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
6. Income Taxes (continued)
A provision has not been made for U.S. or additional foreign taxes on
$2,200,000 of undistributed earnings of foreign subsidiaries that could be
subject to taxation if remitted to the U.S. because the Company plans to
keep these amounts permanently reinvested overseas. The Company believes
that any additional U.S. tax liability due upon remittance of such earnings
would be immaterial due to available U.S. foreign tax credits.
7. Commitments and Contingencies
Operating Leases
The Company leases, land, office and manufacturing facilities, and
equipment under operating leases expiring at various dates through fiscal
2009. The accompanying statement of income includes expenses from operating
leases of $2,491,000, $2,509,000, and $2,468,000 in fiscal 1995, 1994, and
1993, respectively. Future minimum payments due under noncancelable
operating leases at April 1, 1995, are $2,594,000 in fiscal 1996;
$1,659,000 in fiscal 1997; $1,120,000 in fiscal 1998; $765,000 in fiscal
1999; $403,000 in fiscal 2000; and $1,632,000 in fiscal 2001 and
thereafter. Total future minimum lease payments are $8,173,000. See Note 9
for office and manufacturing facilities leased from Thermo Electron.
In March 1991, the Company's TPST Virginia subsidiary entered into a
seven-year agreement, terminable at the Company's option with 90 days'
notice, to operate one or more of its soil-remediation units at a site
owned by a third party. Under the terms of the agreement, the Company pays
a fee based on the gross remediation revenues generated from the operations
at the site, less certain operating costs incurred by the Company. The
accompanying statement of income includes expenses relating to this
agreement of $307,000, $410,000, and $625,000 in fiscal 1995, 1994, and
1993, respectively.
In December 1994, the Company's Thermo Remediation subsidiary acquired
a soil-remediation facility in Baltimore County, Maryland from the
principals of Bryn Awel Corporation (Bryn Awel). Thermo Remediation will
pay to Bryn Awel a royalty equal to 7.5% of the revenues in excess of $2.0
million each year from soil remediated at this facility. Thermo Remediation
has an option to terminate such royalty payments (i) at anytime after the
fifth anniversary of the acquisition in exchange for a payment equal to a
multiple of the appraised value of the royalty stream or (ii) at anytime
after the tenth anniversary of the acquisition in exchange for a payment
equal to a multiple of the average of the annual royalty payments over the
prior ten years.
Litigation
In January 1995, the Company, Thermo Remediation, and several third parties
filed a lawsuit against Recycling Sciences International, Inc. (RSI)
requesting a declaratory judgment that six U.S. patents owned by RSI are
invalid and not infringed by Thermo Remediation's soil-remediation services
and equipment, and asking the court to enjoin RSI from asserting any of
these patents against the Company or Thermo Remediation. The suit follows
continued allegations by RSI that Thermo Remediation's activities in
treating petroleum-contaminated soil infringe a number of these patents.
The Company agreed, in connection with the formation of Thermo Remediation,
to indemnify and hold Thermo Remediation harmless against damages or other
costs associated with any claims of infringement of intellectual property
by the technology transferred by the Company to Thermo Remediation,
20PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
7. Commitments and Contingencies (continued)
including claims which may be made by RSI. The Company continues to believe
that RSI's accusations are unfounded and that Thermo Remediation's
activities do not infringe any valid claims of the patents.
The Company is also contingently liable with respect to lawsuits and
other matters that arose in the ordinary course of business. In the opinion
of management, these contingencies will not have a material effect upon the
financial position of the Company or its results of operations.
8. Long-term Obligations and Other Financing Arrangements
Long-term obligations of the Company are as follows:
1995 1994
------------------------------------------------------------------------
(In thousands)
6 1/2% Subordinated convertible debentures,
due 1997, convertible at $10.33 per share $18,547 $18,547
Promissory note to parent company, due
April 1996 (Note 3) (a) 15,000 -
Promissory note to parent company, due
June 1997 (Note 3) (a) 38,000 -
Zero coupon promissory note, face value $28,000,000,
due in two installments in February and
May 1998 (Note 3) 22,569 -
6.75% Mortgage loan, payable in monthly
installments of $9,167 with final payment
in 2008 1,513 -
Other 1,874 185
------- -------
97,503 18,732
Less: Current maturities of long-term obligations 652 -
------- -------
$96,851 $18,732
======= =======
(a) Bears interest at the Commercial Paper Composite Rate plus 25 basis
points.
The 6 1/2% subordinated convertible debentures are guaranteed on a
subordinated basis by Thermo Electron. During fiscal 1993, $138,000 of
these debentures were converted into common stock of the Company.
The annual requirements for long-term obligations as of April 1, 1995,
are $652,000 in fiscal 1996; $15,610,000 in fiscal 1997; $68,441,000 in
fiscal 1998; $11,395,000 in fiscal 1999; $110,000 in fiscal 2000; and
$1,295,000 thereafter. Total requirements of long-term obligations are
$97,503,000.
The Company's J. Amerika subsidiary has a line of credit, denominated
in Netherlands guilders, under which approximately $3,200,000 may be
borrowed at the Netherlands discount rate plus 125 basis points. No funds
were borrowed under this arrangement during fiscal 1995.
21PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
8. Long-term Obligations and Other Financing Arrangements (continued)
In December 1994, Thermo Remediation borrowed $4,000,000 from Thermo
Electron through issuance of a promissory note due June 29, 1995, and
bearing interest at the Commercial Paper Composite Rate plus 25 basis
points. The average interest rate on the note was 6.5% in fiscal 1995. The
promissory note is included in "Notes payable and current maturities of
long-term obligations" in the accompanying fiscal 1995 balance sheet (Note
14).
9. Related Party Transactions
Corporate Services Agreement
The Company and Thermo Electron have a corporate services agreement under
which Thermo Electron's corporate staff provides certain administrative
services, including certain legal advice and services, risk management,
certain employee benefit administration, tax advice and preparation of tax
returns, centralized cash management, and certain financial and other
services, for which the Company pays Thermo Electron annually an amount
equal to 1.20% of the Company's revenues. Prior to January 1, 1995, the
Company paid an annual fee equal to 1.25% of the Company's revenues. Prior
to January 3, 1993, the Company paid an annual fee equal to 1% of the
Company's revenues. The annual fee is reviewed and adjusted annually by
mutual agreement of the parties. For these services, the Company was
charged $1,653,000, $1,377,000, and $1,119,000 in fiscal 1995, 1994, and
1993, respectively. The corporate services agreement is renewed annually
but can be terminated upon 30 days' prior notice by the Company or upon the
Company's withdrawal from the Thermo Electron Corporate Charter (the Thermo
Electron Corporate Charter defines the relationship among Thermo Electron
and its majority-owned subsidiaries). Management believes that the service
fee charged by Thermo Electron is reasonable and that such fees are
representative of the expenses the Company would have incurred on a
stand-alone basis. For additional items such as employee benefit plans,
insurance coverage, and other identifiable costs, Thermo Electron charges
the Company based upon costs attributable to the Company.
Development Agreement
The Company and Thermo Electron entered into a development agreement under
which Thermo Electron agreed to fund up to $4.0 million of the direct and
indirect costs of the Company's development of soil-remediation centers. In
exchange for this funding, the Company granted Thermo Electron a royalty
equal to approximately 3% of net revenues from soil-remediation services
performed at the centers developed under the agreement. The royalty
payments may cease if the amounts paid by the Company yield a certain
internal rate of return to Thermo Electron on the funds advanced to the
Company under the agreement. The Company recorded contract revenues of
$776,000 and $1,793,000 under this agreement for development costs expended
in fiscal 1994 and 1993, respectively. As of October 2, 1993, funding under
this agreement was completed. Two sites have been developed under this
agreement. The Company paid royalties of $432,000 in fiscal 1995, $351,000
in fiscal 1994, and $149,000 in fiscal 1993 relating to this agreement,
which are included in "Selling, general and administrative expenses" in the
accompanying statement of income.
22PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
9. Related Party Transactions (continued)
Operating Leases
The Company leases or subleases two office and manufacturing facilities
from Thermo Electron under lease agreements expiring in fiscal 1997 and
2005. The accompanying statement of income includes expenses from the
operating lease and sublease of $537,000 in fiscal 1995 and $426,000 in
both fiscal 1994 and 1993. The future minimum payments due under the lease
and sublease as of April 1, 1995, are $751,000 in both fiscal 1996 and
1997, $585,000 in fiscal 1998 through 2000, and $3,403,000 in fiscal 2001
and thereafter. Total future minimum payments are $6,660,000.
Repurchase Agreement
The Company invests excess cash in a repurchase agreement with Thermo
Electron as discussed in Note 1.
Short- and Long-term Obligations
See Note 8 for a description of short- and long-term obligations of the
Company held by Thermo Electron.
10. Common Stock
At April 1, 1995, the Company had reserved 5,348,672 unissued shares of its
common stock for possible issuance under stock-based compensation plans,
issuance upon possible conversion of the 6 1/2% subordinated convertible
debentures, and exercise of warrants.
11. Transactions in Stock of Subsidiaries
During fiscal 1995, the Company's J. Amerika subsidiary completed private
placements in Europe of 700,331 shares of its common stock at $3.75 per
share. Net proceeds from the sales were $2,423,000, resulting in gains of
$829,000. During fiscal 1995, the Company's Thermo Remediation subsidiary
completed a private placement of 75,000 shares of its common stock at $9.67
per share. Net proceeds from the sale were $715,000, resulting in a gain of
$229,000.
During fiscal 1994, the Company's Thermo Remediation subsidiary
completed an initial public offering of 1,785,000 shares of its common
stock at $8.33 per share. Net proceeds from the sale were $13,505,000,
resulting in a gain of $3,886,000. During fiscal 1994, Thermo Remediation
also completed a private placement consisting of 300,000 units, comprising
an aggregate of 300,000 shares of Thermo Remediation common stock, valued
at $6.59 per share, and warrants to purchase 300,000 shares of Thermo
Remediation common stock, valued at $.33 per warrant. The warrants expired
in whole upon the closing of Thermo Remediation's initial public offering
at a price above the warrants' exercise price of $6.93 per share. Net
proceeds from the sale were $2,077,000, resulting in a gain on the issuance
of shares of Thermo Remediation common stock of $602,000.
During fiscal 1993, the Company's TPST Florida subsidiary completed
two private placements. The private placements consisted of 94 units,
comprising an aggregate of 94,000 shares of TPST Florida common stock,
valued at $20.00 per share, and warrants to purchase 188,000 shares of the
Company's common stock, valued at $1.50 per warrant. The warrants are
exercisable at $11.34 per share during the five-year period commencing upon
the date of effectiveness of a registration statement covering the common
23PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
11. Transactions in Stock of Subsidiaries (continued)
stock issuable upon exercise of the warrants. Net proceeds from the sales
were $2,162,000, resulting in a gain on the issuance of shares of TPST
Florida common stock of $1,050,000.
During fiscal 1993, the Company's TPST Southern California subsidiary
completed two private placements. The private placements consisted of 180
units, comprising an aggregate of 90,000 shares of TPST Southern California
common stock, valued at $21.00 and $21.50 per share, and warrants to
purchase 225,000 shares of the Company's common stock, valued at $1.20 and
$1.40 per warrant. The warrants are exercisable at $10.00 per share during
the five-year period commencing upon the date of effectiveness of a
registration statement covering the common stock issuable upon exercise of
the warrants. Net proceeds from the sales were $2,200,000, resulting in a
gain on the issuance of shares of TPST Southern California common stock of
$1,298,000.
Dividends declared by the Company's majority-owned subsidiaries were
$2,012,000, $2,127,000, and $1,586,000 in fiscal 1995, 1994, and 1993,
respectively. Dividends declared by the Company's majority-owned
subsidiaries include $1,316,000 in fiscal 1995 that was allocated to the
Company and reinvested in 113,491 shares of Thermo Remediation's common
stock pursuant to Thermo Remediation's Dividend Reinvestment Plan adopted
in fiscal 1995, and $1,608,000 in fiscal 1994 and $1,166,000 in fiscal 1993
that were paid to the Company in cash.
The Company's percentage ownership of its majority-owned subsidiaries
at year-end was as follows:
1995 1994 1993
-------------------------------------------------------------------------
J. Amerika 62% 72% 72%
Thermo Remediation 66 66 -
TPST Southern California (a) - - 85
TPST Florida (a) - - 79
TPST Virginia (a) - - 78
TPST South Carolina (a) - - 61
(a) Included in Thermo Remediation effective October 1, 1993.
12. Significant Customers
During fiscal 1995, 1994, and 1993, revenues derived from U.S. government
agencies represented 6%, 16%, and 17%, respectively, of the Company's total
revenues.
24
PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
13. Supplemental Cash Flow Information
Supplemental cash flow information is as follows:
Year Ended
------------------------------
April 1, April 2, April 3,
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------
Cash Paid (Refunded) For:
Interest $ 2,507 $ 1,938 $ 668
Income taxes, net $ 952 $ 881 $ (798)
Noncash Activities:
Fair value of assets of acquired
companies $ 86,721 $ 5,250 $ 9,713
Cash paid for acquired companies (39,559) (4,150) (7,194)
Issuance of notes payable for acquired
business (22,300) - (1,000)
Issuance of subsidiary common stock for
acquired business (857) - -
Issuance of stock options for acquired
business (6,923) - -
-------- -------- --------
Liabilities assumed of acquired
companies $ 17,082 $ 1,100 $ 1,519
======== ======== ========
Conversions of subordinated convertible
debentures (Note 8) $ - $ - $ 138
Issuance of Company common stock to
former owner of acquired business
(Note 3) $ 840 $ - $ -
See Notes 3 and 14 for discussion of the environmental services joint
venture.
14. Subsequent Events
Acquisitions
On May 9, 1995, the Company agreed to dissolve the Thermo Terra Tech joint
venture and to purchase the businesses formerly operated by the joint
venture from Thermo Instrument for $34,267,000 in cash, effective April 2,
1995. As a result of this transaction, the Company increased its ownership
in the businesses operated by the joint venture from 51% to 100%. Based on
unaudited data, if the acquisition of Thermo Instrument's share of such
businesses by the Company had occurred at the beginning of fiscal 1994,
income before cumulative effect of change in accounting principle and
earnings per share on a pro forma basis would have been $5,953,000 and
$.35, respectively, for fiscal 1995 and $6,209,000 and $.37, respectively,
for fiscal 1994. The Company borrowed the purchase price from Thermo
Electron through the issuance of a $35 million promissory note that bears
interest at the Commercial Paper Composite Rate plus 25 basis points and is
due May 13, 1997.
25PAGE
<PAGE>
Thermo Process Systems Inc.
Notes to Consolidated Financial Statements
14. Subsequent Events (continued)
On May 10, 1995, the Company acquired substantially all of the assets
of Lancaster Laboratories, Inc. and its affiliate Clewmark Holdings
(collectively Lancaster Laboratories). Lancaster Laboratories, based in
Lancaster, Pennsylvania, is a provider of high-quality analytical services
to the environmental, food, and pharmaceutical industries. Lancaster
Laboratories had gross revenues of approximately $29,000,000 for the fiscal
year ended September 30, 1994. The base purchase price for the assets was
$16,760,000 in cash, plus the assumption of approximately $5,400,000 in
bank indebtedness existing as of the closing of the acquisition. The
purchase price is subject to a post-closing adjustment. The Company has
also agreed to pay an amount, not to exceed $600,000, if Lancaster
Laboratories achieves certain performance goals through the period ending
September 30, 1995. In no event will the aggregate purchase price,
including bank indebtedness assumed by the Company, exceed $25,000,000.
Debenture Offering and Private Placement of Subsidiary Common Stock
On May 4, 1995, the Company's Thermo Remediation subsidiary issued and sold
in Europe $37,950,000 principal amount of 4 7/8% subordinated convertible
debentures due 2000. The debentures are convertible into shares of Thermo
Remediation's common stock at a conversion price of $17.92 per share and
are guaranteed on a subordinated basis by Thermo Electron. Thermo Process
has agreed to reimburse Thermo Electron in the event Thermo Electron is
required to make a payment under the guarantee. In addition, Thermo
Remediation sold 500,000 shares of its common stock at $13.25 per share in
a private placement for net proceeds of approximately $6,600,000. Following
the private placement, the Company owned 63% of the outstanding stock of
Thermo Remediation. In June 1995, Thermo Remediation repaid its $4,000,000
note payable to Thermo Electron with proceeds from the offering.
26PAGE
<PAGE>
Report of Independent Public Accountants
To the Shareholders and Board of Directors of Thermo Process Systems Inc.:
We have audited the accompanying consolidated balance sheet of Thermo
Process Systems Inc. (a Delaware corporation and an 80%-owned subsidiary of
Thermo Electron Corporation) and subsidiaries as of April 1, 1995 and April
2, 1994, and the related consolidated statements of income, shareholders'
investment and cash flows for each of the three years in the period ended
April 1, 1995. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Thermo Process Systems Inc. and subsidiaries as of April 1, 1995 and April
2, 1994, and the results of their operations and their cash flows for each
of the three years in the period ended April 1, 1995, in conformity with
generally accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements,
effective April 4, 1993, the Company changed its method of accounting for
income taxes and effective April 2, 1994, the Company changed its method of
accounting for investments in debt and marketable equity securities.
Arthur Andersen LLP
Boston, Massachusetts
May 9, 1995 (except with respect to the matters discussed
in Note 14 as to which the date is June 2, 1995)
27PAGE
<PAGE>
Thermo Process Systems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview
The Company's majority-owned public subsidiary, Thermo Remediation Inc.
(Thermo Remediation), provides soil-remediation services through a network
of regional centers. These soil-remediation centers thermally treat soil to
remove and destroy petroleum contamination caused by leaking storage tanks,
spills, and other sources. Through Thermo Remediation's November 1993
acquisition of Thermo Fluids, the Company also collects and recycles used
motor oil and provides services such as wastewater processing. In February
1995, the Company acquired Elson T. Killam Associates, Inc. (Killam
Associates), a leading provider of comprehensive environmental consulting
and professional engineering services in selected areas of the United
States. The Company's majority-owned J. Amerika N.V. (J. Amerika)
subsidiary is a provider in the Netherlands of underground tank and other
environmental services. In March 1995, J. Amerika acquired Refining and
Trading Holland B.V. (North Refinery), which specializes in processing
"off-spec" and contaminated petroleum fluids into usable products. In
recognition of its changing focus, J. Amerika intends to change its name to
Thermo EuroTech N.V. The Company's Thermo Terra Tech businesses provide
environmental science and consulting services, laboratory-based testing,
and nuclear-radiation safety services. Terra Tech Labs, Inc. (later
renamed Thermo Analytical Inc.), which was acquired in January 1994,
specializes in fast-response testing of petroleum-contaminated soils and
groundwater. In August 1994, Thermo Terra Tech acquired RMC Environmental
Services, Inc. (RMC), an environmental consulting and analytical laboratory
services firm specializing in environmental science, hydropower consulting,
and analytical laboratory services. The Company also performs metallurgical
processing services, using thermal-treatment equipment owned by the Company
and designs, manufactures, and installs advanced custom-engineered
thermal-processing systems.
Results of Operations
Fiscal 1995 Compared With Fiscal 1994
Total revenues were $133.8 million in fiscal 1995, compared with $110.1
million in fiscal 1994, an increase of 21%. Service revenues increased 27%
to $119.4 million in fiscal 1995 from $94.3 million in fiscal 1994.
Revenues from analytical and consulting services increased 29% to $70.9
million in fiscal 1995 from $54.8 million in fiscal 1994. This increase is
due to the inclusion of approximately $13.2 million in revenues from
businesses acquired in late fiscal 1994 and in fiscal 1995 and, to a lesser
extent, revenues generated from a long-term environmental restoration
contract for the U.S. Department of Energy's Hanford site. Revenues from
the Company's remediation services increased 27% to $36.5 million in fiscal
1995, due primarily to an increase in the volume of soil processed at the
Company's soil-remediation centers located in Southern California and
Florida and, to a lesser extent, additional revenues of $3.8 million from
businesses acquired in late fiscal 1994 and in fiscal 1995. Metallurgical
processing services revenues increased 15% to $12.3 million in fiscal 1995
from $10.7 million in fiscal 1994, due primarily to the Company's efforts
to increase its nongovernment business.
28PAGE
<PAGE>
Thermo Process Systems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Fiscal 1995 Compared With Fiscal 1994 (continued)
"Contract revenues from related party" in fiscal 1994 and 1993
represents funding under an agreement between the Company and Thermo
Electron Corporation (Thermo Electron) to fund up to $4.0 million of the
direct and indirect costs of the Company's development of soil-remediation
centers (see Note 9 to Consolidated Financial Statements). The Company
earned no profit from this funding. As of October 2, 1993, funding under
this agreement was completed. Any expenses incurred in connection with the
development of additional soil-remediation centers subsequent to October 2,
1993, are included in "Product and new business development expenses" in
the accompanying statement of income.
Product revenues from sales of custom-engineered thermal-processing
systems were $14.4 million in fiscal 1995, compared with $15.0 million in
fiscal 1994. Although this business remains depressed and is subject to
intense competition, backlog increased to $4.4 million at April 1, 1995,
compared with $3.5 million at April 2, 1994.
The gross profit margin increased to 26% in fiscal 1995 from 24% in
fiscal 1994. The gross profit margin on service revenues increased to 28%
in fiscal 1995 from 26% in fiscal 1994. The gross profit margin on
analytical and consulting services improved to 25% in fiscal 1995 from 23%
in fiscal 1994 due to higher gross margins at businesses acquired during
the year. The gross profit margin on remediation services remained
relatively constant at 37% in fiscal 1995, compared with 36% in fiscal
1994. The gross profit margin on metallurgical processing services
increased to 14% in fiscal 1995 from 8% in fiscal 1994 as a result of the
Company's efforts to increase nongovernment business. The gross profit
margin on product revenues increased to 17% in fiscal 1995 from 13% in
fiscal 1994 as a result of more profitable contracts in process during
fiscal 1995, compared with fiscal 1994.
Selling, general and administrative expenses as a percentage of
revenues remained relatively unchanged at 19.6% in fiscal 1995, compared
with 19.2% in fiscal 1994.
The Company recorded gains on the issuance of stock by subsidiaries of
$1.3 million in fiscal 1995 and $4.5 million in fiscal 1994. See Notes 1
and 11 to Consolidated Financial Statements for a more complete description
of these transactions.
Net interest income was $0.5 million in fiscal 1995, compared with
$0.6 million in fiscal 1994. An increase in interest expense due to
borrowings from Thermo Electron in May 1994 to fund the Company's
investment in Thermo Terra Tech and in February 1995 to fund the Company's
acquisition of Killam Associates was offset in part by higher average
investment balances.
See Note 6 to Consolidated Financial Statements for a reconciliation
of the statutory tax rate to the effective tax rate.
29PAGE
<PAGE>
Thermo Process Systems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Fiscal 1994 Compared With Fiscal 1993
Total revenues were $110.1 million in fiscal 1994, compared with $104.9
million in fiscal 1993, an increase of 5%. Service revenues increased 9% to
$94.3 million in fiscal 1994 from $86.3 million in fiscal 1993. Remediation
services contributed approximately $9.7 million of additional revenues,
while revenues from analytical and consulting services were virtually
unchanged from the prior year. The increase in revenues from remediation
services is primarily attributable to the first full year of operations at
three new soil-remediation centers and, to a lesser extent, the November
1993 acquisition of Thermo Fluids. The increase in service revenues is also
due to the January 1994 acquisition of Terra Tech Labs, Inc., which
contributed revenues of $0.8 million. Metallurgical processing services
revenues declined approximately $1.4 million as a result of continued
slowdowns in the aerospace and defense industries.
"Contract revenues from related party" in fiscal 1994 and fiscal 1993
represents funding under an agreement between the Company and Thermo
Electron to fund up to $4.0 million of the direct and indirect costs of the
Company's development of soil-remediation centers (see Note 9 to
Consolidated Financial Statements).
Product revenues from sales of custom-engineering thermal-processing
systems were $15.0 million in fiscal 1994, compared with $16.9 million in
fiscal 1993. This business remains depressed. As a result of the continued
worldwide overcapacity in the automotive and heavy-equipment industries,
recent increases in automobile sales have not generated corresponding
increases in capital spending on products such as those offered by the
Company's Holcroft division. In addition, the Company has encountered
significant competition in this business. As a result of these market
conditions, backlog declined to $3.5 million at April 2, 1994, from $6.7
million at April 3, 1993.
The gross profit margin increased to 24% in fiscal 1994 from 20% in
fiscal 1993. The gross profit margin on service revenues increased to 26%
in fiscal 1994 from 22% in fiscal 1993 due to higher gross profit margins
from remediation services and analytical and consulting services. The gross
profit margin on remediation services improved due primarily to an increase
in the volume of soil processed and operational efficiencies achieved
through the introduction of more automated and efficient remediation
equipment during fiscal 1994. Improvements from analytical and consulting
services relate to ongoing cost-containment programs. These increases were
offset in part by lower gross profit margins at the metallurgical
processing services operations as a result of a decline in revenues. The
gross profit margin on product revenues increased slightly to 13% in fiscal
1994 from 12% in fiscal 1993. Despite reduced volume at the Company's
Holcroft division, actions to reduce costs have allowed the Company to
improve its gross profit margin.
Selling, general and administrative expenses increased to $21.2
million in fiscal 1994 from $17.0 million in fiscal 1993 due to the
operation of six soil-remediation centers for the full year in fiscal 1994,
compared with four centers for the majority of fiscal 1993; the inclusion
of $506,000 of Thermo Fluids' and Terra Tech Labs, Inc.'s selling, general
and administrative expenses; as well as expanded efforts for a national
marketing program and marketing efforts at planned remediation site
locations.
30PAGE
<PAGE>
Thermo Process Systems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Fiscal 1994 Compared With Fiscal 1993 (continued)
"Costs associated with divisional restructuring" in fiscal 1994
represents a one-time noncash charge for the write-off of mobile
soil-remediation assets and other related expenses. The Company has decided
to no longer actively pursue mobile soil-remediation projects.
The Company recorded gains on the issuance of stock by subsidiaries of
$4.5 million in fiscal 1994 and $2.3 million in fiscal 1993. See Notes 1
and 11 to Consolidated Financial Statements for a more complete description
of these transactions.
Net interest income decreased to $0.6 million in fiscal 1994 from $0.8
million in fiscal 1993, primarily as a result of lower prevailing interest
rates.
The Company recorded a tax benefit of $40,000 in fiscal 1994, compared
with a tax provision of $1.0 million in fiscal 1993. See Note 6 to
Consolidated Financial Statements for a reconciliation of the statutory tax
rate to the effective tax rate.
During the first quarter of fiscal 1994, the Company adopted Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
which resulted in a cumulative tax benefit of $0.5 million.
Financial Condition
Liquidity and Capital Resources
Consolidated working capital, including cash, cash equivalents, and
short-term available-for-sale investments, increased to $64.7 million at
April 1, 1995 from $51.6 million at April 2, 1994. Cash, cash equivalents,
and short- and long-term available-for-sale investments were $51.5 million
at April 1, 1995, compared with $50.5 million at April 2, 1994. In
addition, at April 1, 1995, the Company had $22.6 million of long-term
held-to-maturity investments. Of the $51.5 million balance at April 1,
1995, $16.9 million was held by the Company's majority-owned subsidiaries,
$31.0 million was held by the Thermo Terra Tech joint venture, and the
remainder by the Company and its wholly owned subsidiaries. In May 1994,
the Company borrowed $15 million from Thermo Electron to fund the Company's
investment in Thermo Terra Tech. In February 1995, the Company borrowed $38
million from Thermo Electron to fund the Company's acquisition of Killam
Associates. In connection with the financing of acquisitions, Thermo
Remediation issued to Thermo Electron a $4 million promissory note. During
fiscal 1995, the Company expended $38.2 million, net of cash, for
acquisitions. In September 1994 and October 1994, the Company's J. Amerika
subsidiary completed private placements of its common stock for net
proceeds of $2.4 million. In May 1994, the Company's Thermo Remediation
subsidiary completed a private placement of its common stock for net
proceeds of $0.7 million.
31PAGE
<PAGE>
Thermo Process Systems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Liquidity and Capital Resources (continued)
Subsequent to the end of fiscal 1995, the Company agreed to dissolve
the Thermo Terra Tech joint venture and to purchase from Thermo Instrument
the businesses formerly operated by the joint venture for $34.3 million in
cash. To fund the purchase, the Company borrowed $35 million from Thermo
Electron through the issuance of a promissory note due May 1997. Also
subsequent to the end of fiscal 1995, the Company acquired Lancaster
Laboratories, Inc. and its affiliate Clewmark Holdings for approximately
$16.8 million in cash, plus the assumption of approximately $5.4 million in
bank indebtedness. The purchase price is subject to a post-closing
adjustment, yet in no event will the aggregate purchase price exceed $25
million.
Also subsequent to the end of fiscal 1995, the Company's Thermo
Remediation subsidiary issued and sold in Europe $38 million principal
amount of 4 7/8% subordinated debentures due 2000 and convertible into
shares of Thermo Remediation common stock. In addition, Thermo Remediation
sold 500,000 shares of its common stock in a private placement for net
proceeds of approximately $6.6 million. In June 1995, Thermo Remediation
repaid its $4 million note payable to Thermo Electron with proceeds from
the offering.
Although the Company has no material capital expenditure commitments,
such expenditures will largely be affected by the number of soil-
remediation centers that can be developed or acquired during the year, as
well as acquisitions of companies that are consistent with the Company's
strategic plan for growth. The Company believes that it has adequate
resources to meet the financial needs of its current operations for the
foreseeable future.
32PAGE
<PAGE>
Thermo Process Systems Inc.
Quarterly Information (Unaudited)
(In thousands except per share amounts)
Fiscal 1995 (a)
-------------------------------------
First Second(b) Third Fourth(c)
-------------------------------------------------------------------------
Revenues $28,864 $31,015 $34,671 $39,253
Gross profit 7,196 8,207 8,481 11,367
Net income 881 1,028 1,142 1,064
Earnings per share .05 .06 .07 .06
Fiscal 1994 (d)
--------------------------------------
First(e) Second Third(f) Fourth(g)
-------------------------------------------------------------------------
Revenues $27,667 $26,327 $27,222 $28,915
Gross profit 6,536 5,952 5,912 7,589
Income before cumulative effect
of change in accounting
principle 615 778 1,081 935
Net income 1,115 778 1,081 935
Earnings per share before
cumulative effect of change
in accounting principle .04 .05 .06 .06
Earnings per share .07 .05 .06 .06
(a) Results include nontaxable gains of $229,000, $668,000, $161,000, and
$285,000 in the first, second, third, and fourth quarters,
respectively, from the issuance of stock by subsidiaries.
(b) Results reflect the August 1994 acquisition of RMC Environmental
Services, Inc.
(c) Results reflect the February 1995 acquisition of Engineering,
Technology and Knowledge Corporation.
(d) Results include nontaxable gains of $602,000, $3,637,000, and $249,000
in the second, third, and fourth quarters, respectively, from the
issuance of stock by subsidiaries.
(e) Reflects the adoption of Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes."
(f) Results reflect the November 1993 acquisition of Thermo Fluids.
(g) Results reflect the January 1994 acquisition of Terra Tech Labs, Inc.
33PAGE
<PAGE>
Thermo Process Systems Inc.
Selected Financial Information
(In thousands except
per share amounts) 1995(a) 1994(b) 1993 1992 1991
---------------------------------------------------------------------------
Statement of Income Data:
Revenues $133,803 $110,131 $104,949 $103,019 $113,430
Income before cumulative
effect of change in
accounting principle 4,115 3,409 3,164 1,035 4,463
Net income 4,115 3,909 3,164 1,035 4,463
Earnings per share
before cumulative
effect of change in
accounting principle .24 .20 .19 .06 .27
Earnings per share .24 .23 .19 .06 .27
Balance Sheet Data:
Working capital $ 64,696 $ 51,612 $ 49,542 $ 53,481 $ 52,998
Total assets 271,673 155,434 134,114 129,230 130,473
Long-term obligations 96,851 18,732 18,743 18,918 23,239
Shareholders' investment 77,601 62,559 57,619 54,820 48,498
(a) Reflects the acquisitions of RMC Environmental Services, Inc. in August
1994 and Engineering, Technology and Knowledge Corporation in February
1995 and the issuance of $53 million of long-term promissory
notes to Thermo Electron Corporation.
(b) Reflects Thermo Remediation Inc.'s private placement and initial public
offering of common stock for net proceeds of $15.6 million and the
acquisitions of Thermo Fluids in November 1993 and Terra Tech Labs,
Inc. in January 1994. Also reflects the adoption of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes."
34PAGE
<PAGE>
Thermo Process Systems Inc.
Common Stock Market Information
The following table shows the market range for the Company's common stock
based on reported sale prices on the American Stock Exchange (symbol TPI)
for fiscal 1995 and 1994.
Fiscal 1995 Fiscal 1994
-------------- --------------
Quarter High Low High Low
--------------------------------------------------------------------------
First $ 8 7/8 $ 8 $ 9 3/8 $ 7 1/2
Second 8 3/8 8 9 3/4 7 1/2
Third 8 1/4 7 3/4 10 1/4 7 3/4
Fourth 8 7/8 7 3/4 9 1/4 7 7/8
As of May 26, 1995, the Company had 735 holders of record of its
common stock. This does not include holdings in street or nominee names.
The closing market price on the American Stock Exchange for the Company's
common stock on May 26, 1995, was $11 1/4 per share.
Common stock of Thermo Remediation Inc., the Company's majority-owned
public subsidiary, is traded on the American Stock Exchange (symbol THN).
Dividend Policy
The Company has never paid cash dividends because its policy has been to
use earnings to finance expansion and growth. Payment of dividends will
rest within the discretion of the Board of Directors and will depend upon,
among other factors, the Company's earnings, capital requirements, and
financial condition.
Shareholder Services
Shareholders of Thermo Process Systems Inc. who desire information about
the Company are invited to contact John N. Hatsopoulos, Chief Financial
Officer, Thermo Process Systems Inc., 81 Wyman Street, P.O. Box 9046,
Waltham, Massachusetts 02254-9046, by letter or by telephone at (617)
622-1111. A mailing list is maintained to enable shareholders whose stock
is held in street name, and other interested individuals, to receive
quarterly and annual reports as quickly as possible. If you would like your
name added to the list, please notify this office.
Form 10-K Report
A copy of the Annual Report on Form 10-K for the fiscal year ended April 1,
1995, as filed with the Securities and Exchange Commission, may be obtained
at no charge by writing to John N. Hatsopoulos, Chief Financial Officer,
Thermo Process Systems Inc., 81 Wyman Street, P.O. Box 9046, Waltham,
Massachusetts 02254-9046.
35PAGE
<PAGE>
Thermo Process Systems Inc.
Stock Transfer Agent
The American Stock Transfer & Trust Company is the transfer agent and
maintains shareholder activity records. The agent will respond to questions
on issuances of stock certificates, changes of ownership, lost stock
certificates, and changes of address. For these and similar matters, please
direct inquiries to:
American Stock Transfer & Trust Company
Shareholder Services Department
40 Wall Street, 46th Floor
New York, New York 10005
(718) 921-8200
Annual Meeting
The annual meeting of shareholders will be held on Tuesday, September 19,
1995.
EXHIBIT 21
THERMO PROCESS SYSTEMS INC.
SUBSIDIARIES OF THE REGISTRANT
At May 26, 1995, Thermo Process Systems Inc. owned the following companies:
State or Registrant's
Jurisdiction % of
Name Incorporation Ownership
---------------------------------------------------------------------------
Beheersmaatschappij J. Amerika N.V. Netherlands 62.2%
Amerika Tankinstallaties B.V. Netherlands 100%
High-Tech Trouble-Shooters B.V. Netherlands 100%
Jac. Amerika en Zonen B.V. Netherlands 100%
Refining & Trading Holland B.V. Netherlands 100%
Engineering Technology and Knowledge
Corporation Delaware 100%
Elson T. Killam Associates, Inc. New Jersey 100%
Duncan, Lagnese and Associates,
Incorporated Pennsylvania 100%
E3-Killam, Inc. New York 100%
Killam Associates, Inc. Ohio 100%
Killam Management and Operational
Services, Inc. New Jersey 100%
Holcroft (Canada) Limited Canada 100%
Holcroft Corporation Delaware 100%
Holcroft GmbH Germany 100%
Metallurgical, Inc. Minnesota 100%
Cal-Doran Metallurgical Services, Inc. California 100%
Skinner & Sherman, Inc. Massachusetts 100%
Skinner & Sherman Technology, Inc. Massachusetts 100%
Bettigole Andrews & Clark, Inc. New York 100%
N.H. Bettigole Co., Inc. Delaware 100%
N.H. Bettigole, P.A. New Jersey 100%
N.H. Bettigole, P.C. New York 100%
Eberline Analytical Corporation New Mexico 100%
Fellows, Read & Associates, Inc. New Jersey 100%
Normandeau Associates, Inc. New Hampshire 100%
Thermo Consulting Engineers Inc. Delaware 100%
George A. Schock & Associates, Inc. New Jersey 100%
Jennison Engineering, Inc. Vermont 100%
TMA/NORCAL Inc. California 100%
Thermo Analytical Inc. Delaware 100%
Thermo Remediation Inc. Delaware 65.88%
Thermo Fluids Inc. Delaware 100%
TPS Technologies Inc. Florida 100%
TPST Soil Recyclers of California Inc. California 100%
TPST Soil Recyclers of Maryland Inc. Maryland 100%
Todds Lane Limited Partnership Maryland 100%*
TPST Soil Recyclers of New York Inc. New York 100%
TPST Soil Recyclers of Oregon Inc. Oregon 100%
TPST Soil Recyclers of South
Carolina Inc. Delaware 100%
TPST Soil Recyclers of Virginia Inc. Delaware 100%
TPST Soil Recyclers of Washington Inc. Washington 100%
* Partnership as of April 1, 1995
EXHIBIT 23
Consent of Independent Public Accountants
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our reports dated May 9, 1995 (except with respect to the
matters discussed in Note 14 as to which the date is June 2, 1995),
included in or incorporated by reference into Thermo Process Systems Inc.'s
Annual Report on Form 10-K for the year ended April 1, 1995 and into the
Company's previously filed Registration Statements as follows:
Registration Statement No. 33-16462 on Form S-8, Registration Statement No.
33-16464 on Form S-8, Registration Statement No. 33-16465 on Form S-8,
Registration Statement No. 33-31478 on Form S-3, Registration Statement No.
33-40185 on Form S-3, and Registration Statement No. 33-52824 on Form S-8.
Arthur Andersen LLP
Boston, Massachusetts
June 6, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO
PROCESS SYSTEMS INC.'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED APRIL 1,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
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<FISCAL-YEAR-END> APR-01-1995
<PERIOD-END> APR-01-1995
<CASH> 35,808
<SECURITIES> 5,155
<RECEIVABLES> 31,509
<ALLOWANCES> 3,560
<INVENTORY> 2,732
<CURRENT-ASSETS> 100,141
<PP&E> 92,795
<DEPRECIATION> 33,058
<TOTAL-ASSETS> 271,673
<CURRENT-LIABILITIES> 35,445
<BONDS> 96,851
<COMMON> 1,741
0
0
<OTHER-SE> 75,860
<TOTAL-LIABILITY-AND-EQUITY> 271,673
<SALES> 14,381
<TOTAL-REVENUES> 133,803
<CGS> 11,982
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<INTEREST-EXPENSE> 2,855
<INCOME-PRETAX> 11,013
<INCOME-TAX> 2,630
<INCOME-CONTINUING> 4,115
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,115
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0
</TABLE>
