THERMO CARDIOSYSTEMS INC, DEF 14A, 1996-05-01

THERMO CARDIOSYSTEMS INC
DEF 14A, 1996-05-01
SURGICAL & MEDICAL INSTRUMENTS & APPARATUS

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<PAGE>

SCHEDULE 14A INFORMATION

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

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]
____________

Check the appropriate box:

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

[_] Definitive Additional Materials

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

Thermo Cardiosystems Inc.
-------------------------
(Name of Registrant as Specified in Charter)

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

Payment of Filing Fee (Check the appropriate box):

[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).

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

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

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

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

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[X] Fee paid previously with preliminary materials.

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

(1) Amount Previously Paid:

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

(3) Filing Party:

(4) Date Filed:

________________
<PAGE>

[LETTERHEAD APPEARS HERE]

470 Wildwood Street
P.O. Box 2697
Woburn, Massachusetts 01888-2697

April 19, 1996

Dear Stockholder:

The enclosed Notice calls the 1996 Annual Meeting of the Stockholders
of Thermo Cardiosystems Inc. I respectfully request all Stockholders attend this
Meting, if possible.

Our Annual Report for the year ended December 30, 1995 is enclosed. I
hope you will read it carefully. Feel free to forward any questions you may have
if you are unable to be present at the Meeting.

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

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

Yours very truly,

/s/ VICTOR L. POIRIER

Victor L. Poirier
President and Chief Executive Officer
<PAGE>

[LETTERHEAD APPEARS HERE]

470 Wildwood Street
P.O. Box 2697
Woburn, Massachusetts 01888-2697

April 19, 1996

To the Holders of the Common Stock of
THERMO CARDIOSYSTEMS INC.

NOTICE OF ANNUAL MEETING

The 1996 Annual Meeting of the Stockholders of Thermo Cardiosystems
Inc. (the "Corporation") will be held on Monday, May 20, 1996, at 11:00 a.m. at
the Turnberry Isle Resort & Club, 19999 West Country Club Drive, Aventura,
Florida. The purposes of the Meeting are to consider and take action upon the
following matters:

1. Election of eight Directors.

2. A proposal recommended by the Board of Directors to amend the
Corporation's Articles of Organization to increase the
Corporation's authorized common stock, $.10 par value per share,
from 50 million shares to 100 million shares.

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

The transfer books of the Corporation will not be closed prior to the
Meeting, but, pursuant to appropriate action by the Board of Directors, the
record date for the determination of the Stockholders entitled to notice of and
vote at the Meeting is April 1, 1996.

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

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

Sandra L. Lambert
Clerk
<PAGE>

PROXY STATEMENT

The enclosed Proxy is solicited by the Board of Directors of Thermo
Cardiosystems Inc. (the "Corporation") for use at the 1996 Annual Meeting of the
Stockholders (the "Meeting") to be held on Monday, May 20, 1996, at 11:00 a.m.
at the Turnberry Isle Resort & Club, 19999 West Country Club Drive, Aventura,
Florida, and any adjournment thereof. The mailing address of the executive
office of the Corporation is 470 Wildwood Street, P.O. Box 2697, Woburn,
Massachusetts 01888-2697. This Proxy Statement and the enclosed Proxy were first
furnished to Stockholders of the Corporation on or about April 30, 1996.

VOTING PROCEDURES

The Board of Directors intends to present to the Meeting the election of
eight Directors, constituting the entire Board of Directors, as well as one
other matter: a proposal to amend the Corporation's Articles of Organization to
increase the Corporation's authorized common stock, $.10 par value ("Common
Stock"), from 50 million shares to 100 million shares.

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

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

In order to be elected a Director, a nominee must receive the
affirmative vote of a majority of the shares of Common Stock present and
entitled to vote on the election. For the proposal to increase the authorized
Common Stock, the affirmative vote of a majority of the Corporation's
outstanding Common Stock entitled to vote on the matter is necessary for
approval. Withholding authority to vote for a nominee for Director or an
instruction to abstain from voting on a proposal will be treated as shares
present and entitled to vote and, for purposes of determining the outcome of the
vote, will have the same effect as a vote against the nominee or a proposal.
With respect to the election of directors, broker "non-votes" will not be
treated as shares present and entitled to vote on a voting matter and will have
no effect on the outcome of the vote. Broker "non-votes" on the proposal to
increase the authorized Common Stock will have the effect of a vote against the
proposal. A broker "non-vote" occurs when a nominee holding shares for a
beneficial holder does not have discretionary voting power and does not receive
voting instructions from the beneficial owner.

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

The outstanding stock of the Corporation entitled to vote (excluding
shares held in treasury by the Corporation) as of April 1, 1996 consisted of
24,202,285 shares of Common Stock. Only Stockholders of record at the close of
business on April 1, 1996 are entitled to vote at the Meeting. Each share is
entitled to one vote.
<PAGE>

- PROPOSAL 1 -

ELECTION OF DIRECTORS

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

NOMINEES FOR DIRECTORS

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

<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
WALTER J. BORNHORST Dr. Bornhorst, 55, has been a Director of the
Corporation since 1988. Since 1994, Dr. Bornhorst
has been the chairman of Z Corporation, a
developer of rapid prototyping equipment. From
1985 to 1992, Dr. Bornhorst was senior vice
president of Thermo Electron. He is also a
director of Thermo Fibertek Inc.
- --------------------------------------------------------------------------------
RICHARD W. K. CHAPMAN Dr. Chapman, 51, has been a Director of the
Corporation since 1995. He has been chairman of
the board of directors of Thermo BioAnalysis
Corporation since its inception in February 1995,
president and chief executive officer of
ThermoQuest Corporation, a subsidiary of Thermo
Instrument Systems Inc., since its inception in
1995, and president of Finnigan Corporation, a
subsidiary of ThermoQuest Corporation from 1992 to
1995. In addition, he has been a vice president of
Thermo Instrument Systems Inc. since 1994. Dr.
Chapman is a director of ThermoQuest Corporation.
- --------------------------------------------------------------------------------
ELIAS P. GYFTOPOULOS Dr. Gyftopoulos, 68, has been a Director of the
Corporation since September 1994. He has been the
Ford Professor of Mechanical Engineering and of
Nuclear Engineering at the Massachusetts Institute
of Technology for more than five years. Dr.
Gyftopoulos is also a director of Thermo Electron,
Thermo Instrument Systems Inc., Thermo Remediation
Inc., Thermo Voltek Corp., ThermoLase Corporation
and ThermoSpectra Corporation.
- --------------------------------------------------------------------------------
ROBERT C. HOWARD Mr. Howard, 65, has been a Director of the
Corporation since 1988. Mr. Howard has been an
executive vice president of Thermo Electron since
1986. He is also a director of Thermedics, Thermo
Instruments Systems Inc., Thermo Power
Corporation, ThermoLase Corporation and ThermoTrex
Corporation.
- --------------------------------------------------------------------------------
</TABLE>

2
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
LEONARD LASTER Dr. Laster, 67, has been a Director of the
Corporation since 1988. Dr. Laster has been the
Distinguished University Professor of Medicine and
Health Policy and Chancellor Emeritus of the
University of Massachusetts Medical Center since
1990. From 1987 to 1990, Dr. Laster was Chancellor
of, and a Professor at, the University of
Massachusetts Medical Center. Since 1992, Dr.
Laster has also been a consultant to the
Biomedical Research Foundation of Northwest
Louisiana. From 1978 to 1987 he was president of
Oregon Health Sciences University.
- --------------------------------------------------------------------------------
VICTOR L. POIRIER Mr. Poirier, 54, has been a Director of the
Corporation since 1991. Mr. Poirier has been
President of the Corporation since 1990 and Chief
Executive Officer of the Corporation since 1991.
Mr. Poirier was Executive Vice President and Chief
Operating Officer of the Corporation from August
1988 until 1990. Mr. Poirier has been a senior
vice president of Thermedics since 1985.
- --------------------------------------------------------------------------------
JOHN W. WOOD JR. Mr. Wood, 52, has been a Director of the
Corporation since 1988. Mr. Wood has been a senior
vice president of Thermo Electron since November
1995 and, before his promotion, was a vice
president of Thermo Electron since September 1994.
Mr. Wood has also been President and Chief
Executive Officer of Thermedics since 1984. Mr.
Wood is also a director of Thermedics, Thermo
Sentron Inc. and Thermo Voltek Corp.
- --------------------------------------------------------------------------------
NICHOLAS T. ZERVAS Dr. Zervas, 67, has been a Director of the
Corporation since 1989. Dr. Zervas has been chief
of Neurological Service, Massachusetts General
Hospital, since 1977. Dr. Zervas is also a
director of Thermedics, ThermoLase Corporation and
ThermoTrex Corporation.
- --------------------------------------------------------------------------------
</TABLE>

COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS

The Board of Directors has established an Audit Committee and a Human
Resources Committee, each consisting solely of outside Directors. The present
members of the Audit Committee are Dr. Laster (Chairman) and Dr. Zervas. The
Audit Committee reviews the scope of the audit with the Corporation's
independent public accountants and meets with them for the purpose of reviewing
the results of the audit subsequent to its completion. The present members of
the Human Resources Committee are Dr. Zervas (Chairman), Dr. Gyftopoulos and Dr.
Laster. The Human Resources Committee reviews the performance of senior members
of management, recommends executive compensation and administers the
Corporation's stock option and other stock-based compensation plans. The
Corporation does not have a nominating committee of the Board of Directors. The
Board of Directors met four times, the Audit Committee met twice and the Human
Resources Committee met three times during fiscal 1995. Each Director attended
at least 75% of all meetings of the Board of Directors and Committees on which
he served held during fiscal 1995.

COMPENSATION OF DIRECTORS

CASH COMPENSATION

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

3
<PAGE>

DEFERRED COMPENSATION PLAN

Under the Deferred Compensation Plan for Directors (the "Deferred
Compensation Plan"), a Director has the right to defer receipt of his cash fees
until he ceases to serve as a Director, dies or retires from his principal
occupation. In the event of a change in control or proposed change in control of
the Corporation that is not approved by the Board of Directors, deferred amounts
become payable immediately. Either of the following is deemed to be a change of
control: (a) the occurrence, without the prior approval of the Board of
Directors, of the acquisition, directly or indirectly, by any person of 50% or
more of the outstanding Common Stock or the outstanding common stock of
Thermedics or Thermo Electron; or (b) the failure of the persons serving on the
Board of Directors immediately prior to any contested election of directors or
any exchange offer or tender offer for the Common Stock or the common stock of
Thermedics or Thermo Electron to constitute a majority of the Board of Directors
at any time within two years following any such event. Amounts deferred pursuant
to the Deferred Compensation Plan are valued at the end of each quarter as units
of the Corporation's Common Stock. When payable, amounts deferred may be
disbursed solely in shares of Common Stock accumulated under the Deferred
Compensation Plan. A total of 50,000 shares of Common Stock have been reserved
for issuance under the Deferred Compensation Plan. As of January 1, 1996,
deferred units equal to 5,560.61 shares of Common Stock were accumulated under
the Deferred Compensation Plan.

DIRECTORS STOCK OPTION PLAN

In 1991, the Corporation adopted a directors stock option plan (the
"Directors Plan"), which was amended in 1995. The Directors Plan provides for
the grant of stock options to purchase shares of Common Stock of the Corporation
to outside Directors as additional compensation for their service as Directors.
Under the Directors Plan, outside Directors are automatically granted options to
purchase 1,000 shares of the Common Stock annually at the close of business on
the date of each Annual Meeting of the Stockholders of the Corporation. Options
evidencing annual grants may be exercised at any time from and after the six-
month anniversary of the grant date of the option and prior to the expiration of
the option on the third anniversary of the grant date. Shares acquired upon
exercise of the options are subject to repurchase by the Corporation at the
exercise price if the recipient ceases to serve as a Director of the Corporation
or any other Thermo Electron company prior to the first anniversary of the grant
date.

The exercise price for options granted under the Directors Plan is the
average of the closing prices of the Common Stock as reported on the American
Stock Exchange (or other principal market on which the Common Stock is then
traded) for the five trading days preceding and including the date of grant, or,
if the shares are not then traded, at the last price per share paid by third
parties in an arms-length transaction prior to the option grant. Options to
purchase 50,000 shares of Common Stock were reserved for issuance under the
Directors Plan as of January 1, 1996.

STOCK OWNERSHIP

The following table sets forth the beneficial ownership of Common
Stock, as well as the common stock of Thermedics, the Corporation's parent
company, and of Thermo Electron, Thermedics' parent company, as of January 1,
1996, with respect to (i) each person who was known by the Corporation to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) each
Director, (iii) each executive officer named in the summary compensation table
under the heading "Executive Compensation" and (iv) all Directors and current
executive officers as a group.

4
<PAGE>

<TABLE>
<CAPTION>
THERMO THERMO
CARDIOSYSTEMS THERMEDICS ELECTRON
NAME (1) INC. (2) INC. (3) CORPORATION (4)
-------- ------------- ---------- ---------------
<S> <C> <C> <C>
Thermedics Inc. (5).................... 12,525,110 N/A N/A
Walter J. Bornhorst.................... 12,600 0 9,603
Richard W. K. Chapman.................. 0 0 54,321
Kurt A. Dasse.......................... 35,455 12,064 10,589
Elias P. Gyftopoulos................... 9,000 4,500 46,380
Robert C. Howard....................... 12,500 11,587 134,593
Leonard Laster......................... 25,555 0 0
Victor L. Poirier...................... 105,779 89,337 33,227
Betty A. Silverstein Russell........... 86,174 13,455 9,650
John W. Wood Jr........................ 44,699 188,488 154,674
Nicholas T. Zervas..................... 30,505 24,843 0
All Directors and current executive....
officers as a group (13 persons).. 406,155 440,764 1,047,611
</TABLE>

(1) Except as reflected in the footnotes to this table, shares beneficially
owned consist of shares owned by the indicated person or by that person
for the benefit of minor children and all share ownership includes sole
voting and investment power.

(2) Shares of the Common Stock beneficially owned by Dr. Bornhorst, Dr.
Dasse, Dr. Gyftopoulos, Dr. Laster, Mr. Poirier, Ms. Silverstein
Russell, Mr. Wood, Dr. Zervas and all Directors and executive officers
as a group include 12,500, 28,300, 9,000, 23,900, 77,900, 78,150,
39,483, 7,800 and 319,033 shares, respectively, that such person or
group has the right to acquire within 60 days of January 1, 1996 through
the exercise of stock options. Shares beneficially owned by Dr. Laster,
Dr. Zervas and all Directors and executive officers as a group include
1,155, 4,405 and 5,560 full shares, respectively, that had been
allocated through January 1, 1996 to their respective accounts
maintained under the Corporation's Deferred Compensation Plan for
Directors. No Director or executive officer beneficially owned more than
1% of the Common Stock outstanding as of January 1, 1996; all Directors
and executive officers as a group beneficially owned 1.7% of the Common
Stock outstanding as of such date.

(3) Shares of the common stock of Thermedics beneficially owned by Dr.
Dasse, Dr. Gyftopoulos, Mr. Howard, Mr. Poirier, Ms. Silverstein
Russell, Mr. Wood, Dr. Zervas and all Directors and executive officers
as a group include 12,000, 4,500, 10,000, 45,000, 12,000, 120,100, 7,650
and 280,250 shares, respectively, that such person or group had the
right to acquire within 60 days after January 1, 1996 through the
exercise of stock options. Shares of the common stock of Thermedics
beneficially owned by Dr. Dasse, Mr. Howard, Mr. Poirier, Mr. Wood and
all Directors and executive officers as a group include 64, 1,587, 278,
1,218 and 5,655 shares, respectively, allocated through January 1, 1996
to their respective accounts maintained pursuant to Thermo Electron's
employee stock ownership plan, of which the trustees, who have
investment power over its assets, were as of January 1, 1996 executive
officers of Thermo Electron (the "ESOP"). Shares beneficially owned by
Dr. Zervas and all Directors and executive officers as a group include
6,693 shares allocated through January 1, 1996 to Dr. Zervas' account
maintained pursuant to that corporation's deferred compensation plan for
directors. No Director or executive officer beneficially owned more that
1% of the common stock of Thermedics outstanding as of January 1, 1996;
all Directors and executive officers as a group beneficially owned 1.3%
of such common stock outstanding as of such date.

(4) The shares of the common stock of Thermo Electron shown in the table
reflect a three-for-two split of such stock effected in May 1995 in the
form of a 50% stock dividend. Shares of the common stock of Thermo
Electron beneficially owned by Dr. Chapman, Dr. Dasse, Dr. Gyftopoulos,
Mr. Howard, Mr. Poirier, Ms. Silverstein Russell, Mr. Wood and all
Directors and executive officers as a group include 53,423, 8,125,
5,250, 40,185, 29,700, 8,125, 133,998 and 641,811 shares, respectively,
that such person or group has the right to acquire within 60 days of
January 1, 1996 through the exercise of stock options.

5
<PAGE>

Shares of the common stock of Thermo Electron beneficially owned by Dr.
Dasse, Mr. Howard, Mr. Poirier, Mr. Wood and all Directors and executive
officers as a group include 48, 1,963, 337, 1,052 and 5,444 full shares,
respectively, allocated through January 1, 1996 to their respective
accounts maintained pursuant to Thermo Electron's ESOP. No Director or
executive officer beneficially owned more than 1% of the common stock of
Thermo Electron outstanding as of January 1, 1996; all Directors and
executive officers as a group beneficially owned 1.1% of the Thermo
Electron common stock outstanding as of such date.

(5) As of January 1, 1996, Thermedics beneficially owned 52% of the
outstanding Common Stock. Thermedics' address is 470 Wildwood Street,
P.O. Box 2999, Woburn, Massachusetts 01888-2999.

DISCLOSURE OF CERTAIN LATE FILINGS

Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and executive officers, and beneficial owners of more
than 10% of the Common Stock, such as Thermedics and Thermo Electron, to file
with the Securities and Exchange Commission initial reports of ownership and
periodic reports of changes in ownership of the Corporation's securities. Based
upon a review of such filings, all Section 16(a) filing requirements applicable
to such persons were complied with during 1995, except in the following
instances. Dr. Walter J. Bornhorst, a Director of the Corporation, reported the
receipt in September 1993 of a gift of 100 shares on an amendment to his Form 5
for 1995, filed in April 1995. An obligation to sell 3,000 shares beneficially
owned by Thermo Electron pursuant to its directors stock option plan, which
should have been reported on its Form 4 for July 1994, was not reported until
April 1996.

EXECUTIVE COMPENSATION

NOTE: All share amounts reported below have, in all cases, been adjusted as
applicable to reflect a three-for-two stock split effected in May 1995 with
respect to the common stock of Thermo Electron in the form of a 50% stock
dividend, but do not reflect the three-for-two stock split with respect to the
Common Stock to be paid on May 15, 1996 to all holders of record of the Common
Stock on May 1, 1996.

SUMMARY COMPENSATION TABLE

The following table summarizes compensation for services to the
Corporation in all capacities awarded to, earned by or paid to the Corporation's
chief executive officer and its two other most highly compensated executive
officers for the last three fiscal years. No other executive officer of the
Corporation met the definition of "highly compensated" within the meaning of the
Securities and Exchange Commission's executive compensation disclosure rules.

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

6
<PAGE>

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------ ------------
SECURITIES UNDERLYING
NAME AND FISCAL OPTIONS (NO. OF SHARES ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AND COMPANY)(1) COMPENSATION(2)
------------------ ------ ------ ----- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Victor L. Poirier 1995 $141,000 $113,000 3,700 (TCA) $6,750
President and Chief Executive 10,500 (TMO)
Officer 5,000 (TLZ)
1994 $135,000 $66,000 15,450 (TMO) $6,322
500 (THS)
1993 $115,500 $55,000 50,000 (TCA) $6,745
15,000 (TMD)
1,500 (TMO)
- --------------------------------------------------------------------------------------------------------------
Kurt A. Dasse 1995 $103,000 $51,500 2,300 (TCA) $5,198
Senior Vice President 7,000 (TMO)
1994 $97,000 $25,000 -- $4,459
1993 $94,000 $21,000 20,000 (TCA) $5,268
7,500 (TMD)
- --------------------------------------------------------------------------------------------------------------
Betty A. Silverstein Russell 1995 $103,000 $51,500 2,400 (TCA) $5,197
Senior Vice President 7,000 (TMO)
1994 $97,000 $24,000 -- $4,473
1993 $94,000 $24,000 25,000 (TCA) $5,436
7,500 (TMD)
- --------------------------------------------------------------------------------------------------------------
</TABLE>

(1) In addition to grants of options to purchase Common Stock of the
Corporation (designated in the table as TCA), executive officers of the
Corporation have been granted options to purchase common stock of Thermo
Electron and certain of its other subsidiaries as part of Thermo
Electron's stock option program. Options have been granted during the
last three fiscal years in the following Thermo Electron companies:
Thermedics (designated in the table as TMD), Thermo Electron (designated
in the table as TMO), ThermoLase Corporation (designated in the table as
TLZ) and ThermoSpectra Corporation (designated in the table as THS).

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

STOCK OPTIONS GRANTED DURING FISCAL 1995

The following table sets forth information concerning individual grants
of stock options made during fiscal 1995 to the Corporation's chief executive
officer and the other named executive officers. It has not been the
Corporation's policy in the past to grant stock appreciation rights, and no such
rights were granted during fiscal 1995.

7
<PAGE>

<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1995
- ----------------------------------------------------------------------------------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF
NUMBER OF SECURITIES GRANTED TO EXERCISE STOCK PRICE
UNDERLYING OPTIONS EMPLOYEES IN PRICE PER EXPIRATION APPRECIATION FOR
NAME GRANTED (1) FISCAL YEAR SHARE DATE OPTION TERM
---- ----------- ----------- ----- ---- -----------
5% 10%
--- ---
<S> <C> <C> <C> <C> <C> <C>
Victor L. Poirier 3,700 (TCA) 5.2% $26.10 3/20/02 $39,331 $91,612
500 (TMO) 0.06% (2) $37.27 5/23/98 $2,935 $6,170
10,000 (TMO) 1.2% (2) $45.40 9/22/07 $361,300 $970,800
5,000 (TLZ) 0.5% (2) $22.75 11/28/07 $90,550 $243,250
- -------------------------------------------------------------------------------------------------------------------------------
Kurt A. Dasse 2,300 (TCA) 3.2% $26.10 3/20/02 $24,449 $56,948
7,000 (TMO) 0.8% (2) $45.40 9/22/07 $252,910 $679,560
- -------------------------------------------------------------------------------------------------------------------------------
Betty A. Silverstein 2,400 (TCA) 3.4% $26.10 3/20/02 $25,512 $59,424
Russell 7,000 (TMO) 0.8% (2) $45.40 9/22/07 $252,910 $679,560
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) All of the options granted during the fiscal year are immediately
exercisable at the date of grant. However, the shares acquired upon
exercise are subject to repurchase by the granting corporation at the
exercise price if the optionee ceases to be employed by such corporation
or any other Thermo Electron company. The granting corporation may
exercise its repurchase rights within six months after the termination
of the optionee's employment. For publicly traded companies, the
repurchase rights lapse ratably over a five- to ten-year period,
depending on the option term, which may vary from seven to twelve years,
provided that the optionee continues to be employed by the Corporation
or another Thermo Electron company. An option to purchase 500 shares of
Thermo Electron common stock granted to Mr. Poirier as a part of Thermo
Electron's stock option program has a three-year term, and the
repurchase rights lapse in their entirety on the second anniversary of
the grant date. The granting corporation may permit the holders of
options to exercise options and to satisfy tax withholding obligations
by surrendering shares equal in fair market value to the exercise price
or withholding obligation.

(2) These options were granted under stock option plans maintained by Thermo
Electron or its subsidiaries other than the Corporation and accordingly
are reported as a percentage of total options granted to employees of
those companies.

STOCK OPTIONS EXERCISED DURING FISCAL 1995

The following table reports certain information regarding stock option
exercises during fiscal 1995 and outstanding stock options held at the end of
fiscal 1995 by the Corporation's chief executive officer and the other named
executive officers. No stock appreciation rights were exercised or were
outstanding during fiscal 1995.

8
<PAGE>

<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1995 AND FISCAL 1995 YEAR-END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------------------

NO. OF UNEXERCISED
SHARES OPTIONS AT FISCAL VALUE OF
ACQUIRED YEAR-END UNEXERCISED
ON VALUE (EXERCISABLE/ IN-THE-MONEY
NAME COMPANY EXERCISE REALIZED UNEXERCISABLE) (1) OPTIONS
---- ------- -------- -------- ------------------ -------
<S> <C> <C> <C> <C> <C>
Victor L. Poirier Thermo Cardiosystems 36,759 $1,870,849 77,900/0 $4,848,209/--
Thermedics -- -- 45,000/0 $883,950/--
Thermedics Detection -- -- 0/5,000 --/-- (3)
Thermo Ecotek -- -- 2,500/0 $26,875/--
Thermo Electron -- -- 29,700/0 (2) $524,935/--
Thermo Fibertek -- -- 3,000/0 $54,000/--
ThermoLase -- -- 5,000/0 $15,625/--
ThermoSpectra -- -- 500/0 $2,813/--
ThermoTrex 1,440 $46,872 360/0 $16,398/--
- ----------------------------------------------------------------------------------------------------------------------------------
Kurt A. Dasse Thermo Cardiosystems 51,700 $2,555,272 28,300/0 $1,744,745/--
Thermedics -- -- 12,000/0 $243,975/--
Thermo Electron -- -- 8,125/0 $83,539/--
ThermoTrex -- -- 900/0 $40,995/--
- ----------------------------------------------------------------------------------------------------------------------------------
Betty A. Thermo Cardiosystems 10,700 $252,306 78,150/0 $5,280,964/--
Silverstein Russell Thermedics -- -- 12,000/0 $243,975/--
Thermo Electron -- -- 8,125/0 $83,539/--
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) All of the options reported outstanding at the end of the fiscal year
were immediately exercisable, except for Thermedics Detection, which
generally are not exercisable until such company's stock is publicly
traded. The shares acquired upon exercise of the options reported in the
table are subject to repurchase by the granting corporation at the
exercise price if the optionee ceases to be employed by such corporation
or any other Thermo Electron company. The granting corporation may
exercise its repurchase rights within six months after the termination
of the optionee's employment. For companies whose shares are not
publicly traded, the repurchase rights lapse in their entirety on the
ninth anniversary of the grant date. For publicly traded companies, the
repurchase rights generally lapse ratably over a five- to ten-year
period, depending on the option term, which may vary from seven to
twelve years, provided that the optionee continues to be employed by the
Corporation or another Thermo Electron company. Certain options granted
as a part of Thermo Electron's stock option program have three-year
terms, and the repurchase rights lapse in their entirety on the second
anniversary of the grant date.

(2) Options to purchase 15,000 shares of the common stock of Thermo Electron
granted to Mr. Poirier are subject to the same terms as described in
footnote (1), except that the repurchase rights of the granting
corporation generally do not lapse until the tenth anniversary of the
grant date. In the event of the employee's death or involuntary
termination prior to the tenth anniversary of the grant date, the
repurchase rights of the granting corporation shall be deemed to have
lapsed ratably over a five-year period, commencing with the fifth
anniversary of the grant date.

(3) No public market existed for the shares underlying these options as of
December 31, 1995. Accordingly, no value in excess of exercise price has
been attributed to these options.

SEVERANCE AGREEMENTS

In 1988, Thermo Electron entered into severance agreements with several
of its key employees, including key employees of the Corporation and other
majority-owned subsidiaries. These agreements provide severance benefits if
there is a change of control of Thermo Electron that is not approved by the
Board of Directors of Thermo Electron and the employee's employment with Thermo
Electron or the majority-owned subsidiary is

9
<PAGE>

terminated, for whatever reason, within one year thereafter. For purposes of the
agreement a change of control exists upon (i) the acquisition of 50% or more of
the outstanding common stock of Thermo Electron by any person without the prior
approval of the board of directors of Thermo Electron, (ii) the failure of the
board of directors of Thermo Electron, within two years after any contested
election of directors or tender or exchange offer not approved by the board of
directors, to be constituted of a majority of directors holding office prior to
such event or (iii) any other event that the board of directors of Thermo
Electron determines constitutes an effective change of control of Thermo
Electron. Each of the recipients of these agreements would receive a lump-sum
benefit at the time of a qualifying severance equal to the highest total cash
compensation paid to the employee by Thermo Electron or the majority-owned
subsidiary in any 12-month period during the three years preceding the severance
event. A qualifying severance exists (i) if the employment of the executive
officer is terminated for any reason within one year after a change in control
of Thermo Electron or (ii) a group of directors of Thermo Electron consisting of
directors of Thermo Electron on the date of the severance agreement or, if an
election contest or tender or exchange offer for Thermo Electron's common stock
has occurred, the directors of Thermo Electron immediately prior to such
election contest or tender or exchange offer, and any future directors who are
nominated or elected by such directors, determines that any other termination of
the executive officer's employment should be treated as a qualifying severance.
The benefits to be provided are limited so that the payments would not
constitute so-called "excess parachute payments" under applicable provisions of
the Internal Revenue Code of 1986. Assuming that severance benefits would have
been payable under these agreements as of January 1, 1996, Mr. Wood would have
received approximately $340,000.

COMMITTEE REPORT ON EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

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

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

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

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

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

10
<PAGE>

BASE SALARY

Base salaries are intended to approximate the mid-point of competitive
salaries for similar organizations of comparable size and complexity to the
Corporation. Executive salaries are adjusted gradually over time and only as
necessary to meet this objective. Increases in base salary may be moderated by
other considerations, such as geographic or regional market data, industry
trends or internal fairness within the Corporation and Thermo Electron. It is
the Committee's intention that over time the base salaries for the chief
executive officer and the other named executive officers will approach the mid-
point of competitive data. The salary increases in 1995 for the chief executive
officer and the other named executive officers generally reflect this practice
of gradual increases and moderation.

CASH BONUS

The Committee establishes a median potential bonus for each executive by
using the market data on total cash compensation from the same executive
compensation surveys as used to determine salaries. Specifically, the median
potential bonus plus the salary of an executive officer is approximately equal
to the mid-point of competitive total cash compensation for a similar position
and level of responsibility in businesses having comparable sales and complexity
to the Corporation. The actual bonus awarded to an executive officer may range
from zero to three times the median potential bonus. The value within the range
(the bonus multiplier) is determined at the end of each year by the Committee in
its discretion. The Committee exercises its discretion by evaluating each
executive's performance using a methodology developed by its parent corporation,
Thermo Electron, and applied throughout the Thermo Electron organization. The
methodology incorporates measures of operating returns, designed to measure
profitability, contributions to shareholder value, and earnings growth, and are
measures of corporate and divisional performance that are evaluated using graphs
developed by Thermo Electron designed to reward performance that is perceived as
above average and to penalize performance that is perceived as below average.
The measures of operating returns used in the Committee's determinations in
calendar 1995 measured return on net assets and growth in income, and the
Committee's determinations also included an evaluation of the contributions of
each executive that are not captured by operating measures but are considered
important to the creation of long-term value for the Stockholders. These
measures of achievements are not financial targets that are met, not met or
exceeded. The relative weighting of these achievements varies depending on the
executive's role and responsibilities within the organization.

The bonuses for named executive officers approved by the Committee with
respect to 1995 performance in each instance exceeded the median potential
bonus.

STOCK OPTION PROGRAM

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

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

In determining awards, the Committee considers the average annual value
of all options to purchase shares of the Corporation and other companies within
the Thermo Electron organization that vest in the next five years. (Values are
established using a modified Black-Scholes option pricing model.) As a
guideline, the

11
<PAGE>

Committee strives to maintain the aggregate amount of awards to purchase shares
of Common Stock to all employees over a five-year period below 10% of the
Corporation's outstanding Common Stock, although other factors such as unusual
transactions and acquisitions and standards for awards of comparably situated
companies may affect the number of awards granted.

In 1995, the Committee granted options to purchase Common Stock of the
Corporation to the chief executive officer and the other named executive
officers based on their holdings of such stock and vested rights to acquire such
stock throughout the year, which the Committee considers each year. Other
discretionary awards are not made annually in conjunction with the annual review
of cash compensation, but are made periodically. In determining awards from time
to time, the Committee considers total compensation of executives, actual and
anticipated contributions of each executive (which includes a subjective
assessment by the Committee of the value of the executive's future potential
within the organization), as well as the value of previously awarded options as
described above. The option awards made with respect to the common stock of the
Corporation's parent, Thermo Electron, or its subsidiaries, are made as part of
Thermo Electron's overall stock option program and are determined by the human
resources committee of the board of directors of the applicable granting company
using a similar analysis.

POLICY ON DEDUCTIBILITY OF COMPENSATION

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

1995 CEO COMPENSATION

The salary and bonus of Mr. Poirier are established using the same
criteria as for the salaries and bonuses for the Corporation's other named
executive officers. The Committee determined Mr. Poirier's compensation as
reported, and among other factors, considered his role during the Corporation's
transition to commercial sales and profitability following approval by the U.S.
Food and Drug Administration for commercial sale of the Corporation's heart-
assist device in late 1994. The Committee believes, nonetheless, that while the
total cash compensation for Mr. Poirier in 1995 tends to be below the
competitive norm for a similarly sized company in the medical-device industry,
his total compensation exceeds the competitive norm since a significant portion
of his total compensation has been awarded as long-term incentive compensation
in the form of stock options.

In 1995, the Committee also approved stock option awards to Mr. Poirier
with respect to the Corporation's Common Stock. The Committee annually
considers an award of stock options to executive officers of the Corporation,
which are generally based upon the number of shares of Common Stock and
unexercised, vested stock options held by the executive during the year, as an
incentive for executives to buy and hold Common Stock. The award of stock
options to purchase shares of Common Stock to Mr. Poirier in 1995 was made under
this program. The awards of stock options to purchase shares of the
Corporation's parent, Thermo Electron, or its subsidiaries, to Mr. Poirier in
1995 were made as part of Thermo Electron's overall stock option program and
were determined by the human resources committee of the board of directors of
the applicable granting company using an analysis similar to that used for all
executives as described under "Stock Option Program."

Dr. Nicholas T. Zervas (Chairman)
Dr. Elias P. Gyftopoulos
Dr. Leonard Laster

12
<PAGE>

COMPARATIVE PERFORMANCE GRAPH

The Securities and Exchange Commission requires that the Corporation
include in this Proxy Statement a line-graph presentation comparing cumulative,
five-year shareholder returns for the Corporation's Common Stock with a broad-
based market index and either a nationally recognized industry standard or an
index of peer companies selected by the Corporation. The Corporation has
compared its performance with the American Stock Exchange Market Value Index and
a peer group of companies consisting of Abiomed Inc., Datascope Corp., Boston
Scientific Corp., Thoratec Labs Corp., Baxter International, Inc., Medtronic,
Inc. and St. Jude Medical, Inc.

COMPARISON OF 1990-1995 TOTAL RETURN AMONG THERMO CARDIOSYSTEMS INC.,
THE AMERICAN STOCK EXCHANGE MARKET VALUE INDEX AND PEER GROUP.
--------------------------------------------------------------

[GRAPH APPEARS HERE]

The total return for the Corporation's Common Stock (TCA), the American
Stock Exchange Market Value Index (AMEX) and the Peer Group (PEER GRP) assumes
the reinvestment of dividends, although dividends have not been declared on the
Corporation's Common Stock. The American Stock Exchange Market Value Index
tracks the aggregate performance of equity securities of companies listed on the
American Stock Exchange. The Corporation's Common Stock is traded on the
American Stock Exchange under the ticker symbol "TCA."

13
<PAGE>

RELATIONSHIP WITH AFFILIATES

Thermo Electron has adopted a strategy of selling a minority interest in
subsidiary companies to outside investors as an important tool in its future
development. As part of this strategy, Thermo Electron and certain of its
subsidiaries have created several privately and publicly held subsidiaries, and
Thermedics Inc. has created the Corporation and Thermo Sentron Inc. as publicly
held, majority-owned subsidiaries, and Thermedics Detection Inc. as a majority-
owned privately held subsidiary, and has acquired the majority interest in a
previously unaffiliated public company, Thermo Voltek Corp. From time to time,
Thermo Electron and its subsidiaries will create other majority-owned
subsidiaries as part of its spinout strategy. (The Corporation and such other
majority-owned Thermo Electron subsidiaries are hereinafter referred to as the
"Thermo Subsidiaries.")

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

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

The Charter presently provides that it shall continue in effect so long
as Thermo Electron and at least one Thermo Subsidiary participate. The Charter
may be amended at any time by agreement of the participants. Any Thermo
Subsidiary, including the Corporation, can withdraw from participation in the
Charter upon 30 days' prior notice. In addition, Thermo Electron may terminate a
subsidiary's participation in the Charter in the event the subsidiary ceases to
be controlled by Thermo Electron or ceases to comply with the Charter or the
policies and procedures applicable to the Thermo Group. A withdrawal from the
Charter automatically terminates the corporate services agreement and tax
allocation agreement (if any) in effect between the withdrawing company and
Thermo Electron. The withdrawal from participation does not terminate
outstanding commitments to third parties made by the withdrawing company, or by
Thermo Electron or other members of the Thermo Group, prior to the withdrawal.
However, a withdrawing company is required to continue to comply with all
policies and procedures applicable to the Thermo Group and to provide certain
administrative functions mandated by Thermo Electron so long as the withdrawing
company is controlled by or affiliated with Thermo Electron.

As provided in the Charter, the Corporation and Thermo Electron have
entered into a Corporate Services

14
<PAGE>

Agreement (the "Services Agreement") under which Thermo Electron's corporate
staff provides certain administrative services, including certain legal advice
and services, risk management, employee benefit administration, tax advice and
preparation of tax returns, centralized cash management and financial and other
services to the Corporation. The Corporation was assessed an annual fee equal to
1.2% of the Corporation's revenues for these services for calendar 1995.
Beginning January 1, 1996, the fee has been reduced to 1.0% of the Corporation's
revenues. The fee is reviewed annually and may be changed by mutual agreement of
the Corporation and Thermo Electron. During fiscal 1995, Thermo Electron
assessed the Corporation $487,000 in fees under the Services Agreement.
Management believes that the charges under the Services Agreement are reasonable
and that the terms of the Services Agreement are fair to the Corporation. For
items such as employee benefit plans, insurance coverage and other identifiable
costs, Thermo Electron charges the Corporation based on charges attributable to
the Corporation. The Services Agreement automatically renews for successive one-
year terms, unless canceled by the Corporation upon 30 days' prior notice. In
addition, the Services Agreement terminates automatically in the event the
Corporation ceases to be a member of the Thermo Group or ceases to be a
participant in the Charter. In the event of a termination of the Services
Agreement, the Corporation will be required to pay a termination fee equal to
the fee that was paid by the Corporation for services under the Services
Agreement for the nine-month period prior to termination. Following termination,
Thermo Electron may provide certain administrative services on an as-requested
basis by the Corporation or as required in order to meet the Corporation's
obligations under Thermo Electron's policies and procedures. Thermo Electron
will charge the Corporation a fee equal to the market rate for comparable
services if such services are provided to the Corporation following termination.

The Corporation subleases office and research facilities from Thermedics
and pays to Thermedics a pro rata amount based on the actual square footage
occupied by the Corporation, at a rate approximately equal to Thermedics' rent
per square foot under its prime lease. This sublease expires in 1999. The
Corporation paid approximately $134,000 to Thermedics in sublease payments
during 1995. The Corporation also pays Thermedics for the Corporation's
portion of certain expenses shared with Thermedics at the subleased facilities.
In 1995, the Corporation paid Thermedics $746,400 for such expenses.

As of December 30, 1995, $4,379,000 of the Corporation's cash
equivalents were invested in a repurchase agreement with Thermo Electron. Under
this agreement, the Corporation in effect lends excess cash to Thermo Electron,
which Thermo Electron collateralizes with investments principally consisting of
corporate notes, U.S. government agency securities, money market funds,
commercial paper and other marketable securities, in the amount of at least 103%
of such obligation. The Corporation's funds subject to the repurchase agreement
are readily convertible into cash by the Corporation and have a maturity of
three months or less. The repurchase agreement earns a rate based on the
Commercial Paper Composite Rate plus 25 basis points, set at the beginning of
each quarter.

Thermedics beneficially owned approximately 55% of the Corporation's
outstanding Common Stock on January 1, 1996. Thermedics intends for the
foreseeable future to maintain at least 50% ownership of the Corporation. This
may require the purchase by Thermedics of additional shares of the Corporation's
Common Stock from time to time as the number of outstanding shares issued by the
Corporation increases. These purchases may be made either in the open market or
directly from the Corporation.

Thermo Electron's Tecomet division provides metal fabrication services
in connection with the manufacture of the heart assist devices sold by the
Corporation. During 1995, the Corporation paid Tecomet $1,153,850 for these
services.

15
<PAGE>

-- PROPOSAL 2--

PROPOSAL TO INCREASE AUTHORIZED COMMON STOCK

The Board of Directors has determined that it is advisable to increase
the Corporation's authorized Common Stock from 50 million shares to 100 million
shares, and has voted to recommend that the Stockholders adopt an amendment to
the Corporation's Articles of Organization effecting the proposed increase.

As of January 1, 1996, approximately 24.1 million shares of Common Stock
were issued and outstanding (excluding treasury shares) and approximately an
additional 1.9 million shares were reserved for issuance upon the conversion of
existing securities and exercise of options granted under the Corporation's
various stock-based compensation plans. Accordingly, a total of approximately
24 million shares of Common Stock are available for future issuance.

The Board of Directors believes it continues to be in the best interest
of the Corporation to have sufficient additional authorized but unissued shares
of Common Stock available in order to provide flexibility for corporate action
in the future. Management believes that the availability of additional
authorized shares for issuance from time to time in the Board of Directors'
discretion in connection with possible acquisitions of other companies, future
financings, investment opportunities, stock splits or dividends or for other
corporate purposes is desirable in order to avoid repeated separate amendments
to the Corporation's Articles of Organization and the delay and expense incurred
in holding special meetings of the Stockholders to approve such amendments.
There are at present no specific understandings, arrangements or agreements with
respect to any future acquisitions that would require the Corporation to issue
any new shares of its Common Stock. The Board of Directors believes that the
currently available unissued shares do not provide sufficient flexibility for
corporate action in the future. On April 11, 1996, the Board of Directors
approved a three-for-two split of the Common Stock, to be effected in the form
of a 50% stock dividend, to be paid on May 15, 1996 to holders of record of the
Common Stock on May 1, 1996. This stock split is not subject to the approval by
the Stockholders of the proposed increase in the authorized Common Stock and
will be effected regardless of the outcome of the vote on this proposal.

No further authorization by vote of the Stockholders will be solicited
for the issuance of the additional shares of Common Stock proposed to be
authorized, except as might be required by law, regulatory authorities or rules
of the American Stock Exchange or any stock exchange on which the Corporation's
shares may then be listed. The issuance of additional shares of Common Stock
could have the effect of diluting existing stockholder earnings per share, book
value per share and voting power. The Stockholders of the Corporation do not
have any preemptive right to purchase or subscribe for any part of any new or
additional issuance of the Corporation's securities.

Thermedics, which owned approximately 54% of the outstanding voting
stock of the Corporation on April 1, 1996, has sufficient votes to approve the
amendment and has indicated its intention to vote for the approval of the
amendment.

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

The affirmative vote of a majority of the Common Stock outstanding and
entitled to vote at the Meeting is required to approve the amendment to the
Corporation's Articles of Organization to effect the proposed increase in the
Corporation's authorized shares. The Board of Directors considers this
amendment to be advisable and in the best interests of the Corporation and its
Stockholders and recommends that you vote FOR approval of the amendment. If not
otherwise specified, Proxies will be vote FOR approval of this amendment.

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

APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has appointed Arthur Andersen LLP as independent
public accountants for fiscal 1996. Arthur Andersen LLP has acted as independent
public accountants for the Corporation since its inception in

16
<PAGE>

1988. Representatives of that firm are expected to be present at the Meeting,
will have the opportunity to make a statement if they desire to do so and will
be available to respond to questions. The Board of Directors has established an
Audit Committee, presently consisting of two outside Directors, the purpose of
which is to review the scope and results of the audit.

OTHER ACTION

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

STOCKHOLDER PROPOSALS

Proposals of Stockholders intended to be presented at the 1997 Annual
Meeting of the Stockholders of the Corporation must be received by the
Corporation for inclusion in the Proxy Statement and form of Proxy relating to
that meeting no later than December 25, 1996.

SOLICITATION STATEMENT

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

Woburn, Massachusetts
April 19, 1996

17
<PAGE>

FORM OF PROXY

THERMO CARDIOSYSTEMS INC.

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 20, 1996

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Victor L. Poirier, John N. Hatsopoulos
and Jonathan W. Painter, or any one of them acting in the absence of the others,
as attorneys and proxies of the undersigned, with full power of substitution,
for and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of the Stockholders of Thermo Cardiosystems Inc., a Massachusetts
corporation (the "Company"), to be held on Monday, May 20, 1996, at 11:00 a.m.,
and at any adjournment or postponement thereof , and to vote all shares of
common stock of the Company standing in the name of the undersigned on April 1,
1996, with all of the powers the undersigned would possess if personally present
at such meeting:

(Continued and to be signed on reverse side.)

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

The shares represented by this Proxy will be voted "for" the proposals set forth
below if no instruction to the contrary is indicated or if no instruction is
given.

1. Election of Directors.

NOMINEES: Walter J. Bornhorst, Richard W.K. Chapman, Elias P. Gyftopoulos,
Robert C. Howard, Leonard Laster, Victor L. Poirier, John W. Wood Jr.,
Nicholas T. Zervas

FOR [ ] WITHHELD [ ]

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

______________________________________
FOR AGAINST ABSTAIN
2. Approve an amendment to the Articles of [ ] [ ] [ ]
Organization of the Company to increase
the authorized common stock from 50
million shares to 100 million shares.

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

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

PLEASE PROMPTLY DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED
ENVELOPE.

SIGNATURE(S) ___________________________________ DATE_________________

(NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON, EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO INDICATE WHEN SIGNING, GIVING FULL
TITLE AS SUCH. IF SIGNER IS A CORPORATION, EXECUTE IN FULL CORPORATE NAME BY
AUTHORIZED OFFICER. IF MORE PERSONS, ALL SHOULD SIGN)

AA960990048