<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(l) of
the Securities Exchange Act of 1934)
ThermoLase Corporation
----------------------
(Name of Issuer)
ThermoLase Corporation
----------------------
(Name Of Person(s) Filing Statement)
Common Stock, $.01 par value
----------------------------
(Title of Class of Securities)
883624108
-------------------------------------
(CUSIP Number of Class of Securities)
--------------------------
Sandra L. Lambert, Secretary
ThermoLase Corporation
c/o Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02254-9046
Telephone: (617) 622-1000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
Seth H. Hoogasian, Esq. - copies to - David E. Redlick, Esq.
Vice President and General Counsel Hale and Dorr LLP
ThermoLase Corporation 60 State Street
c/o Thermo Electron Corporation Boston, MA 02109
81 Wyman Street Telephone: (617) 526-6000
Waltham, MA 02254-9046
Telephone: (617) 622-1000
March 6, 1997
-----------------------------------
(Date Tender Offer First Published,
Sent or Given to Security Holders)
<TABLE>
CALCULATION OF FILING FEE
<CAPTION>
Transaction Value (1) Amount of Filing Fee (2)
<S> <C>
$37,458,107 $7,492
<FN>
(1) Calculated pursuant to Rule 0-11(b)(2) under the Securities Exchange Act of
1934, as amended (the "Exchange Act") based upon the market value of the
securities to be received by the acquiring person as established in
accordance with Rule 0-11(a)(4) under the Exchange Act. Calculated using
the average of the high and low prices of the Common Stock of ThermoLase
Corporation on the American Stock Exchange on March 3, 1997, plus $3.00.
(2) The filing fee has been offset as provided by Rule 0-11(a)(2) under the
Exchange Act.
Amount previously paid: $11,402 Filing Parties: ThermoLase Corporation
Thermo Electron Corporation
Form or registration nos.: Form S-4 (333-19633) Date filed: January 13, 1997
Form S-4 (333-19633-01)
</TABLE>
<PAGE> 2
Item 1. Security and Issuer.
(a) The issuer of the securities is ThermoLase Corporation, a
Delaware corporation (the "Company"). The address of the Company's principal
executive office is 10455 Pacific Center Court, San Diego, California
92121-4339.
(b) Upon the terms and subject to the conditions set forth in the
Offer to Exchange dated March 6, 1997 attached hereto as Exhibit (a)(1) (the
"Offer to Exchange") and the Letter of Transmittal attached hereto as Exhibit
(a)(2) (the "Letter of Transmittal"), the Company is offering to exchange one
unit (a "Unit") consisting of one share of Common Stock, $.01 par value per
share (the "Common Stock"), and one redemption right (each, a "Redemption
Right") for each share of Common Stock outstanding (each, a "Share") plus an
additional payment (the "Additional Payment") of $3.00, payable either (i) in
cash (the "Additional Cash Payment") or (ii) by delivery of additional Shares
having a value equal to the aggregate Additional Payment (the "Offer"). No more
than 2,000,000 Units will be issued by the Company. Each Redemption Right will
entitle the holder thereof to sell the related share of Common Stock to the
Company for $20.25 during the first 20 business days after the fourth
anniversary of the Expiration Date (as defined in the Offer to Exchange). The
Redemption Right will not detach or trade separately from the related share of
Common Stock (but instead will trade together with the related share of Common
Stock as a Unit) and will expire and become worthless if the closing price of
the Common Stock is at least $26.00 for 20 of any 30 consecutive trading days
after the Expiration Date. In the event of the expiration of the Redemption
Right, each Unit
-2-
<PAGE> 3
will automatically become and will trade as, one share of Common Stock. The
Company's obligations under the Redemption Rights will be guaranteed on a
subordinated basis by Thermo Electron Corporation ("Thermo Electron"), the
Company's ultimate parent corporation. The Offer is subject to certain
conditions, including there being validly tendered and not withdrawn prior to
the expiration of the Offer such number of Shares and related Additional Cash
Payments, if applicable, as would result in the issuance of at least 500,000
Units, and the listing of the Units on the American Stock Exchange, subject to
official notice of issuance. The Sections of the Offer to Exchange captioned
"THE OFFER TO EXCHANGE -- Terms of the Offer to Exchange," "--Interests of
Certain Persons in Offer" and "MARKET PRICE INFORMATION" are incorporated herein
by reference.
(c) The Section of the Offer to Exchange captioned "MARKET PRICE
INFORMATION" is incorporated herein by reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
- ------ -------------------------------------------------
(a) The Sections of the Offer to Exchange captioned "THE OFFER TO
EXCHANGE -- Terms of the Offer to Exchange" and "DESCRIPTION OF SECURITIES" are
incorporated herein by reference.
(b) Not applicable.
-3-
<PAGE> 4
Item 3. Purpose of the Tender Offer and Plans or Proposals
of The Issuer or Affiliate.
--------------------------------------------------
The Section of in the Offer to Exchange captioned "THE OFFER TO
EXCHANGE --Terms of the Offer to Exchange" and "--Purpose of the Offer" are
incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
------------------------------------
The Section of the Offer to Exchange captioned "TRANSACTIONS IN
SECURITIES" is incorporated herein by reference.
Item 5. Contracts, Arrangements, Understandings or Relationships
with Respect to the Issuer's Securities.
--------------------------------------------------------
The description of the Guarantee Agreement dated as of March 5, 1997
between the Company and Thermo Electron contained in the Section of the Offer to
Exchange titled "DESCRIPTION OF SECURITIES -- The Guarantees" is incorporated
herein by reference. Other than the Guarantee Agreement, there are no contracts,
arrangements, understandings or relationships relating, directly or indirectly,
to the Offer made by the Company pursuant to the Offer to Exchange required to
be disclosed under Item 5 of Schedule 13E-4.
Item 6. Persons Retained, Employed or to Be Compensated.
-----------------------------------------------
The Sections of the Offer to Exchange captioned "THE OFFER TO EXCHANGE
- -- Payment of Fees and Expenses; Transfer Taxes" and "--Exchange Agent;
Information Agent" are incorporated herein by reference.
-4-
<PAGE> 5
Item 7. Financial Information.
---------------------
(a)(1) See the Consolidated Balance Sheet as of September 28, 1996 and
September 30, 1995, the Consolidated Statement of Operations for the fiscal
years ended September 28, 1996, September 30, 1995 (unaudited) and December 31,
1994, and the nine months ended September 30, 1995, the Consolidated Statement
of Cash Flows for the fiscal years ended September 28, 1996, September 30, 1995
(unaudited) and December 31, 1994, and the nine months ended September 30, 1995,
the Consolidated Statement of Stockholders' Investment and Common Stock Subject
to Redemption for the fiscal year ended September 28, 1996, the nine months
ended September 30, 1995 and the fiscal year ended December 31, 1994 and the
Notes to Consolidated Financial Statements, which were filed with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), in Exhibit 13 to the Company's
Annual Report on Form 10-K, as amended, for the fiscal year ended September 28,
1996 and incorporated herein by reference.
(a)(2) See the Consolidated Balance Sheet as of December 28, 1996
(unaudited), the Consolidated Statement of Operations for the three months ended
December 28, 1996 (unaudited) and December 30, 1995 (unaudited), the
Consolidated Statement of Cash Flows for the three months ended December 28,
1996 (unaudited) and December 30, 1995 (unaudited) and the Notes to the
Consolidated Financial Statements, which were filed with the Commission pursuant
to the Exchange Act in
-5-
<PAGE> 6
the Company's Quarterly Report on Form 10-Q, as amended, for the quarter ended
December 28, 1996 and incorporated herein by reference.
(a)(3) Not applicable.
(a)(4) At September 28, 1996, the end of the Company's most recent
fiscal year, the book value per share of the Company's Common Stock was $1.94.
For the book value per share at December 28, 1996, see the Tables in the Offer
to Exchange captioned "Pro Forma Condensed Balance Sheet - Share Only Exchange"
and "Pro Forma Condensed Balance Sheet - Share and Cash Exchange," which are
incorporated herein by reference.
(b) The Tables in the Offer to Exchange captioned "Pro Forma
Condensed Balance Sheet - Share Only Exchange" and "Pro Forma Condensed Balance
Sheet - Share and Cash Exchange" are incorporated herein by reference.
Item 8. Additional Information.
----------------------
(a) Not applicable.
(b) The Offer is conditioned upon, among other things, the listing
of the Units on the American Stock Exchange.
(c) Not applicable.
(d) Not applicable.
(e) The Offer to Exchange is incorporated herein by reference.
Item 9. Material to be Filed as Exhibits.
--------------------------------
(a)(1) Offer to Exchange.
-6-
<PAGE> 7
(a)(2) Letter of Transmittal of the Company for use in connection with
the Offer to Exchange.
(a)(3) Notice of Guaranteed Delivery to be used to accept the Offer to
Exchange if Shares or, if applicable, Additional Cash Payments
are not immediately available.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Nominees for use in connection with the Offer to Exchange.
(a)(5) Letter to Clients of Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees for whose account the foregoing hold
shares of Common Stock in their names.
(a)(6) Press Release, dated December 19, 1996.
(b)(1) None.
(c) Guarantee Agreement dated as of March 5, 1997 between
ThermoLase Corporation and Thermo Electron Corporation.
(d) Tax Opinion of Hale and Dorr LLP (included as Exhibit 8.1 to
the Company's Registration Statement on Form S-4 (File No.
333-19633) and incorporated herein by reference.
(e) Offer to Exchange (See Item (a)(1)).
(f) None.
-7-
<PAGE> 8
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: March 5, 1997 By: /s/ John C. Hansen
-------------------------------------
John C. Hansen,
President and Chief Executive Officer
-8-
<PAGE> 9
Index to Exhibits
-----------------
Exhibit No. Description
----------- -----------
(a)(1) Offer to Exchange.
(a)(2) Letter of Transmittal of the Company for use in
connection with the Offer to Exchange.
(a)(3) Notice of Guaranteed Delivery to be used to accept the
Offer to Exchange if Shares or, if applicable,
Additional Cash Payments are not immediately available.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees for use in connection with the
Offer to Exchange.
(a)(5) Letter to Clients of Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees for whose account
the foregoing hold shares of Common Stock in their
names.
(a)(6) Press Release, dated December 19, 1996.
(c) Guarantee Agreement dated as of March 5, 1997 between
ThermoLase Corporation and Thermo Electron Corporation.
(d) Tax Opinion of Hale and Dorr LLP (included as Exhibit
8.1 to the Company's Registration Statement on Form S-4
(File No. 333-19633) and incorporated herein by
reference.
(e) Offer to Exchange (See Item (a)(1)).
-9-
<PAGE> 1
THERMOLASE CORPORATION
OFFER TO EXCHANGE
ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT
FOR EACH
ONE OUTSTANDING SHARE OF COMMON STOCK PLUS
$3.00 (PAYABLE IN CASH
OR
SHARES OF COMMON STOCK)
NO MORE THAN 2,000,000 UNITS WILL BE ISSUED
------------------------
REDEMPTION PAYMENTS GUARANTEED ON A SUBORDINATED BASIS BY THERMO ELECTRON
CORPORATION
------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON APRIL 2, 1997, UNLESS THE OFFER IS EXTENDED.
------------------------
ThermoLase Corporation, a Delaware corporation ("ThermoLase", or the
"Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Offer to Exchange and the accompanying letter of transmittal (the
"Letter of Transmittal", and together with this Offer to Exchange, the "Offer"),
to exchange one unit (a "Unit") consisting of one share of common stock, $.01
par value per share, of the Company (the "Common Stock") and one redemption
right (each, a "Redemption Right"), for each share of Common Stock (each, a
"Share") plus an additional payment of $3.00 (the "Additional Payment"), validly
tendered and accepted for exchange in the Offer. The Additional Payment may be
made either (i) in cash (such cash payment being hereinafter referred to as the
"Additional Cash Payment", and an exchange in which an Additional Cash Payment
is made being hereinafter referred to as a "Share and Cash Exchange"), or (ii)
by delivery to the Company of additional Shares having a value equal to the
aggregate required Additional Payment (the Shares being tendered in satisfaction
of the Additional Payment being hereinafter referred to as the "Additional Share
Payment", and an exchange in which an Additional Share Payment is made being
hereinafter referred to as a "Share Only Exchange"). Shares tendered in
satisfaction of the Additional Share Payment will be valued at $20.25;
accordingly, for each Share tendered for exchange in a Share Only Exchange, the
tendering shareholder will receive .871 Units. No fractional Units will be
issued, and the number of Units issued will be rounded down to the nearest whole
number.
(Cover continued on next page)
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY SHAREHOLDERS OF THERMOLASE IN EVALUATING THE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS OFFER TO EXCHANGE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (1) complete and sign the enclosed Letter of Transmittal in
accordance with the instructions in the Letter of Transmittal, have such
shareholder's signature thereon guaranteed if required by Instruction 1 of the
Letter of Transmittal, mail or deliver the Letter of Transmittal (or a facsimile
thereof), any Additional Cash Payment (in the manner set forth herein) and any
other required documents to the Exchange Agent (as defined herein), and either
deliver the certificates representing the tendered Shares or tender such Shares
pursuant to the procedure for book-entry transfer set forth in this Offer to
Exchange, or (2) request such shareholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such shareholder.
Shareholders having Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to tender
such Shares.
If a shareholder desires to tender Shares and any required Additional Cash
Payment pursuant to the Offer but time will not permit the required deliveries
to be made to the Exchange Agent prior to the Expiration Date, or the procedure
for a book-entry transfer cannot be completed on a timely basis, a tender may be
effected in accordance with the guaranteed delivery procedures set forth herein.
Questions and requests for assistance or for additional copies of this Offer
to Exchange, the Letter of Transmittal and all other exchange offer materials
may be directed to National Westminster Bank Plc -- New York Branch (the
"Information Agent") at its address and telephone number set forth on the back
cover of this Offer to Exchange. Additional copies of this Offer to Exchange,
the Letter of Transmittal and all other tender offer materials may also be
obtained from brokers, dealers, commercial banks or trust companies.
------------------------
The Information Agent for the Offer is:
NATIONAL WESTMINSTER BANK PLC -- NEW YORK BRANCH
The date of this Offer to Exchange is March 6, 1997.
<PAGE> 2
(continued from previous page)
Shareholders may make either a Share and Cash Exchange or a Share Only
Exchange, but not a combination thereof.
No more than 2,000,000 Units will be issued. Shares not accepted for
exchange, because of prorations or otherwise, will be returned. The Offer is
subject to certain conditions, including there being validly tendered and not
withdrawn prior to the expiration of the Offer such number of Shares and related
Additional Cash Payments, if applicable, as would result in the issuance of at
least 500,000 Units (the "Minimum Condition"), and the listing of the Units on
the American Stock Exchange ("AMEX"), subject to official notice of issuance. If
all tendering shareholders make a Share Only Exchange, a maximum of 2,296,212
Shares will be tendered. The Offer will expire at 12:00 midnight, New York City
time, on April 2, 1997, unless extended (as so extended, the "Expiration Date").
The Expiration Date will not be extended beyond April 30, 1997.
The Board of Directors is not making any recommendations to its shareholders
as to whether they should exchange or refrain from exchanging any or all of
their shares of Common Stock. Each shareholder must make his or her own decision
as to whether to exchange any shares of Common Stock owned. HOLDERS OF COMMON
STOCK ARE URGED TO CONSULT THEIR FINANCIAL AND TAX ADVISORS IN MAKING A DECISION
ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.
Each Redemption Right will entitle the holder thereof to sell the related
share of Common Stock to the Company for $20.25 during the first 20 business
days after the fourth anniversary of the Expiration Date (as defined herein).
The Redemption Right will not detach or trade separately from the related share
of Common Stock (but instead will trade together with the related share of
Common Stock as a Unit) and will expire and become worthless if the closing
price of the Company's Common Stock is at least $26.00 for 20 of any 30
consecutive trading days after the Expiration Date. In the event of the
expiration of the Redemption Right, each Unit will automatically become, and
will trade as, one share of Common Stock. The Company's obligations under the
Redemption Rights will be guaranteed on a subordinated basis by Thermo Electron
Corporation, the Company's ultimate parent corporation ("Thermo Electron"). For
a description of the other terms of the Offer, see "The Offer to Exchange."
Prior to this Offer, there has been no public market for the Units. The
Company has applied for the listing of the Units on AMEX under the symbol "TLZ
U."
<PAGE> 3
AVAILABLE INFORMATION
ThermoLase and Thermo Electron are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith file reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). The
reports, proxy statements and other information filed by ThermoLase and Thermo
Electron with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at 7
World Trade Center, 13th floor, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material also can be
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, Washington, D.C. 20549. In addition, ThermoLase and Thermo
Electron are each required to file electronic versions of such material with the
Commission through the Commission's Electronic Data Gathering, Analysis and
Retrieval (EDGAR) system. The Commission maintains a World Wide Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. ThermoLase's Common Stock is listed on AMEX. Reports, proxy
statements and other information concerning ThermoLase can also be inspected at
the offices of AMEX, 86 Trinity Place, New York, New York 10006. Thermo
Electron's Common Stock is listed on the New York Stock Exchange. Reports, proxy
statements and other information concerning Thermo Electron can also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
ADDITIONAL INFORMATION
ThermoLase and Thermo Electron have each filed with the Commission a
Registration Statement on Form S-4 (the "Registration Statements") under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
Units to be issued by ThermoLase pursuant to the Offer and the guarantees (the
"Guarantees") by Thermo Electron of ThermoLase's obligations under the
Redemption Rights. In addition, ThermoLase has filed an Issuer Tender Offer
Statement on Schedule 13E-4 with respect to the Offer (the "Schedule 13E-4").
This Offer to Exchange does not contain all the information set forth in the
Registration Statements or the Schedule 13E-4. For further information with
respect to ThermoLase, Thermo Electron, the Units, the Guarantees and the Offer,
reference is hereby made to the Registration Statements and the Schedule 13E-4
(including the exhibits and schedules thereto). Statements contained in this
Offer to Exchange or in any document incorporated by reference in this Offer to
Exchange as to the contents of any contract or other document referred to herein
or therein are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document (if any) filed as an exhibit to
the applicable Registration Statement or the Schedule 13E-4 or such other
document, each such statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of ThermoLase filed with the Commission are
incorporated by reference in this Offer to Exchange:
1. Annual Report on Form 10-K, as amended on Forms 10-K/A for the
fiscal year ended September 28, 1996;
2. Quarterly Report on Form 10-Q, as amended on Form 10-Q/A for the
quarter ended December 28, 1996; and
3. The description of ThermoLase's capital stock contained in
ThermoLase's Registration Statements on Form 8-A.
The following documents of Thermo Electron filed with the Commission are
incorporated by reference in this Offer to Exchange:
1. Annual Report on Form 10-K, as amended on Form 10-K/A for the
fiscal year ended December 30, 1995;
i
<PAGE> 4
2. Quarterly Reports on Form 10-Q for the quarters ended March 30,
1996, June 29, 1996 (as amended on Form 10-Q/A) and September 28, 1996;
3. Current Reports on Form 8-K dated January 3, 1996, January 19,
1996, April 16, 1996, October 24, 1996 and January 21, 1997; and
4. The description of Thermo Electron's capital stock contained in
Thermo Electron's Registration Statements on Form 8-A.
All documents and reports subsequently filed by ThermoLase or Thermo
Electron pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Offer to Exchange and prior to the Expiration Date (as defined
herein) shall be deemed to be incorporated by reference in this Offer to
Exchange and to be part hereof from the date of filing of such documents or
reports. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Offer to Exchange to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Offer to Exchange.
This Offer to Exchange incorporates documents by reference which are not
presented herein or delivered herewith. Such documents (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference)
are available to any person, including any beneficial owner, to whom this Offer
to Exchange is delivered, on written or oral request, without charge, directed
to Thermo Electron Corporation, 81 Wyman Street, P.O. Box 9046, Waltham,
Massachusetts 02254-9046 (telephone number (617) 622-1000), Attention: Investor
Relations. In order to ensure timely delivery of any of such documents, any
request should be made not later than five business days prior to the Expiration
Date.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS OFFER TO EXCHANGE IN
CONNECTION WITH THE OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THERMOLASE, THERMO ELECTRON OR ANY OTHER PERSON. THIS OFFER TO
EXCHANGE DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO
BUY, ANY SECURITIES IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS NOT
LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS OFFER TO EXCHANGE NOR ANY DISTRIBUTION OF SECURITIES MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THERMOLASE OR THERMO ELECTRON SINCE THE DATE
HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
"SoftLight" and "Spa Thira" are trademarks or service marks of ThermoLase.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this Offer to Exchange and in the documents
incorporated herein constitute "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act. For
this purpose, any statements contained herein or incorporated herein that are
not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words "believes," "anticipates,"
"plans," "expects" and similar expressions are intended to identify
forward-looking statements. There are a number of important factors that could
cause the results of the Company and Thermo Electron to differ materially from
those indicated by such forward-looking statements, including among others, the
following: uncertainties in market demand and acceptance and intellectual
property rights, changes in and compliance with government regulation; the
impact of competitive products and pricing; risks associated with management of
growth; the Company's limited operating history; and technology and product
development, as well as commercialization; the failure of an active trading
market to develop for the Units; and the volatility generally in the stock and
other financial markets. In addition, these factors include those set forth in
"Risk Factors" herein and the discussion of the important risk factors and other
uncertainties identified under the caption "Forward looking Statements"
incorporated by reference into the Company's Annual Report on Form 10-K, as
amended, for the fiscal year ended September 28, 1996 and the important factors
identified under the caption "Other Information" in Thermo Electron's Quarterly
Report on Form 10-Q for the quarter ended September 28, 1996, which are
incorporated by reference herein.
ii
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION................................................................... (i)
ADDITIONAL INFORMATION.................................................................. (i)
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................................... (i)
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION...................................... (ii)
SUMMARY................................................................................. 1
SELECTED FINANCIAL INFORMATION -- THERMOLASE CORPORATION................................ 6
SELECTED FINANCIAL INFORMATION -- THERMO ELECTRON CORPORATION........................... 8
RISK FACTORS............................................................................ 10
THE OFFER TO EXCHANGE................................................................... 11
MARKET PRICE INFORMATION................................................................ 24
DESCRIPTION OF SECURITIES............................................................... 28
TRANSACTIONS IN SECURITIES.............................................................. 31
LEGAL MATTERS........................................................................... 31
EXPERTS................................................................................. 31
</TABLE>
iii
<PAGE> 6
SUMMARY
The following is a summary of certain information contained elsewhere in
this Offer to Exchange. Reference is made to, and this summary is qualified in
its entirety by, the more detailed information contained, or incorporated by
reference, in this Offer to Exchange. Unless otherwise defined herein,
capitalized terms used in this summary have the respective meanings ascribed to
them elsewhere in this Offer to Exchange. Shareholders are urged to read this
Offer to Exchange hereto in its entirety.
THERMOLASE CORPORATION..... ThermoLase has developed a proprietary system for
the removal of unwanted hair (the "SoftLight
system"). In April 1995, the Company received
clearance from the U.S. Food and Drug
Administration to commercially market services
using this system. The Company is marketing the
SoftLight system in the United States through its
"Spa Thira" salons and through licensing agreements
with doctors and others. The Company is marketing
the SoftLight system in foreign countries by
engaging in joint ventures and other licensing
arrangements with companies or individuals that are
experienced in those locations. ThermoLase also
manufactures and markets skin-care and body
products through its CBI Laboratories, Inc.
subsidiary, which also manufactures the lotion used
in the SoftLight system.
As of December 28, 1996, an aggregate of 40,583,874
shares of the Company's Common Stock were
outstanding, of which, 25,960,996 shares
(approximately 64% of the outstanding shares) were
beneficially owned by ThermoTrex Corporation
("ThermoTrex"). ThermoTrex is a publicly traded,
majority-owned subsidiary of Thermo Electron.
ThermoLase's principal executive offices are
located at 10455 Pacific Center Court, San Diego,
California 92121-4339. Its telephone number is
(619) 646-5700.
THERMO ELECTRON
CORPORATION................ Thermo Electron develops, manufactures and markets
environmental monitoring and analysis instruments,
biomedical products including heart-assist systems,
mammography systems and respiratory care products,
paper-recycling and papermaking equipment,
alternative-energy systems, industrial process
equipment, and other specialized products. Thermo
Electron also provides environmental and
metallurgical services and conducts advanced
technology research and development. Thermo
Electron performs its business through its
divisions and wholly-owned subsidiaries, as well as
majority-owned subsidiaries that are partially
owned by the public or by private investors.
Thermo Electron's principal executive offices are
located at 81 Wyman Street, P.O. Box 9046, Waltham,
Massachusetts. Its telephone number is (617)
622-1000.
RISK FACTORS............... Shareholders should consider certain risk factors
in evaluating whether to exchange their Shares and
Additional Payments for Units. See "Risk Factors."
THE OFFER TO EXCHANGE
SECURITIES OFFERED......... Units consisting of one share of Common Stock and
one Redemption Right. The Redemption Right entitles
the holder thereof to sell the related share of
Common Stock to the Company for $20.25 during the
first 20 business days after the fourth anniversary
of the Expiration Date. The Redemption Right will
not detach or trade separately from the
<PAGE> 7
related share of Common Stock (but instead will
trade together with the related share of Common
Stock as a Unit) and will expire and become
worthless if the closing price of the Common Stock
is at least $26.00 for 20 of any 30 consecutive
trading days following the Expiration Date. In the
event of the expiration of the Redemption Right,
each Unit will automatically become, and will trade
as, one share of Common Stock. The Company's
obligations under the Redemption Rights will be
guaranteed on a subordinated basis by Thermo
Electron. See "The Offer to Exchange -- Terms of
the Offer to Exchange" and "Description of
Securities."
THE OFFER.................. One Unit is being offered in exchange for each
Share, plus the Additional Payment of $3.00,
validly tendered and accepted for exchange. The
Additional Payment may be made either (i) in the
form of an Additional Cash Payment; or (ii) by
delivery of an Additional Share Payment, in either
case equal in aggregate value to $3.00 times the
number of Shares tendered for exchange. Shares
tendered in satisfaction of the Additional Share
Payment will be valued at $20.25 per share;
accordingly, for each Share tendered for exchange
in a Share Only Exchange, the tendering shareholder
will receive .871 Units. No fractional Units will
be issued, and the number of Units issued will be
rounded down to the nearest whole number.
Shareholders may make either a Share and Cash
Exchange or a Share Only Exchange, but not a
combination thereof.
No more than 2,000,000 Units will be issued. If the
number of Shares and, if applicable, Additional
Cash Payments validly tendered pursuant to the
Offer and not withdrawn prior to the Expiration
Date would result in the issuance of more than
2,000,000 Units, acceptances will be cut back pro
rata (with adjustments to avoid issuance of
fractional Units), based on the total number of
Units that would have been issued to such tendering
shareholders had no such cutback been made.
ThermoTrex, the Company's principal shareholder,
has notified the Company that it does not intend to
tender any of its Shares pursuant to the Offer. See
"The Offer to Exchange -- Terms of the Offer to
Exchange."
PURPOSE OF THE OFFER....... The Company does not believe that the market price
of the Common Stock accurately reflects its
intrinsic value. The purpose of the Offer is to
give to shareholders who are considering selling
their Shares the opportunity to reduce the risk
associated with the continued ownership of the
Common Stock.
EXPIRATION DATE; EXTENSION;
TERMINATION.............. The Offer will expire at 12:00 midnight, New York
City time, on April 2, 1997, unless extended (as so
extended, the "Expiration Date"). The Expiration
Date will not be extended beyond April 30, 1997.
The Company expressly reserves the right (i) to
extend, amend or modify the terms of the Offer in
any manner; and (ii) if certain conditions are not
satisfied, to withdraw or terminate the Offer, and
not accept for exchange any Shares. See "The Offer
to Exchange -- Expiration Date; Extension;
Termination," and "The Offer to
Exchange -- Conditions to the Consummation of the
Offer."
WITHDRAWAL RIGHTS.......... Tenders of Shares and Additional Cash Payments, if
applicable, pursuant to the Offer may be withdrawn
at any time prior to the Expiration
2
<PAGE> 8
Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after April 30,
1997, unless theretofore accepted for exchange. See
"The Offer to Exchange -- Withdrawal Rights."
PROCEDURES FOR TENDERING... To be tendered properly, (i) certificates
representing the tendered Shares, (ii) a certified
or official bank check made payable to American
Stock Transfer & Trust Company, the Company's
exchange agent for the Offer (the "Exchange Agent")
or wire transfer in the amount of the Additional
Cash Payment, if applicable, and (iii) a properly
completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other documents
required by the Letter of Transmittal, must be
received by the Exchange Agent at the address set
forth on the back cover page of this Offer to
Exchange prior to 12:00 midnight, New York City
time, on the Expiration Date. Special arrangements
are provided for book-entry transfers of Shares.
See "The Offer to Exchange -- Procedure for
Tendering Shares."
Shareholders having Shares registered in the name
of a broker, dealer, commercial bank, trust company
or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if
they desire to tender such Shares.
If a holder desires to accept the Offer and time
will not permit the required deliveries to be made
to the Exchange Agent prior to the Expiration Date,
or the procedure for a book-entry transfer cannot
be completed on a timely basis, a tender may be
effected in accordance with guaranteed delivery
procedures. See "The Offer to
Exchange -- Guaranteed Delivery Procedure."
ACCEPTANCE OF TENDERED
SHARES AND ADDITIONAL CASH
PAYMENTS; PRORATION...... Upon the terms and subject to the conditions of the
Offer (including satisfaction of the Minimum
Condition), the Company will accept for exchange up
to the number of Shares and related Additional Cash
Payments validly tendered and not withdrawn prior
to the Expiration Date that would result in the
issuance of not more than 2,000,000 Units. Upon the
terms and subject to the conditions of the Offer,
if the number of Shares and, if applicable,
Additional Cash Payments, validly tendered and not
withdrawn prior to the Expiration Date would result
in the issuance of more than 2,000,000 Units,
acceptances will be cut back pro rata (with
adjustments to avoid the issuance of fractional
Units), based on the total number of Units that
would have been issued to such tendering
shareholders had no such cutback been made.
DELIVERY OF UNITS.......... Subject to the terms and conditions of the Offer,
the delivery of the Units to be issued pursuant to
the Offer will occur as promptly as practicable
following the Expiration Date. See "The Offer to
Exchange -- Acceptance of Tendered Shares and
Additional Cash Payments; Proration; Delivery of
Units."
If proration of Shares and Additional Cash
Payments, if applicable, is required, the Company
does not expect to be able to announce the final
proration factor or to commence the exchange for
any Shares pursuant to the Offer until
approximately five business days after the
Expiration Date, due to the difficulty in
determining the number of Shares validly tendered
(including shares tendered pursuant to the
guaranteed delivery
3
<PAGE> 9
procedure described in "The Offer to
Exchange -- Guaranteed Delivery Procedure").
Preliminary results of the proration will be
announced by press release as promptly as
practicable after the Expiration Date. Holders of
Common Stock may obtain such preliminary
information from the Information Agent and may also
be able to obtain such information from their
brokers.
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES............. Because of the unique features of the Offer and the
Units, the tax treatment of the exchange is
unclear. See "The Offer to Exchange -- Certain
Federal Income Tax Consequences." Assuming that the
Redemption Rights are treated as integral parts of
the Units, both the Share and Cash Exchange and the
Share Only Exchange should be treated as
reorganizations under Section 368(a)(1)(E) of the
Internal Revenue Code of 1986, as amended (the
"Code") and, therefore, (i) should not result in
the recognition of income by shareholders making a
Share and Cash Exchange, and (ii) should result in
the recognition of income by shareholders who make
a Share Only Exchange up to the fair market value
of the Guarantee (estimated by the Company to be
$1.00 per Unit). However, if the Internal Revenue
Service were to successfully challenge the
treatment of the exchange as a reorganization under
the Code, shareholders who make a Share Only
Exchange could be required to recognize income up
to the fair market value of the Redemption Right
(including the Guarantee). In general, shareholders
who make a Share and Cash Exchange should not be
required to recognize gain even if the Internal
Revenue Service were to successfully challenge the
Company's treatment of the exchange. However, if
the Internal Revenue Service were to treat a Unit
as debt, rather than equity, the exchange would be
taxable, whether a shareholder made a Share and
Cash Exchange or a Share Only Exchange. See "The
Offer to Exchange -- Certain Federal Income Tax
Consequences" and "Risk Factors -- Risk of
Uncertain Tax Treatment."
CONDITIONS TO THE OFFER.... The Offer is subject to certain conditions,
including there being validly tendered and not
withdrawn prior to the expiration of the Offer such
number of Shares and Additional Cash Payments, if
applicable, as would result in the issuance of at
least 500,000 Units and the listing of the Units on
AMEX. There can be no assurance that such
conditions will be met. See "The Offer to
Exchange -- Conditions to the Consummation of the
Offer."
UNTENDERED SHARES.......... Holders of Shares who do not tender their Shares in
the Offer or whose Shares are not accepted for
exchange will continue to hold such Shares, which
are listed on AMEX, and will be entitled to all the
rights, and will be subject to all of the
limitations, applicable thereto. See "The Offer to
Exchange -- Effect on Non-Tendering Shareholders."
LISTING OF THE UNITS....... The Company has applied for the listing of the
Units on the American Stock Exchange. In order to
be listed, the Company must meet certain minimum
listing requirements (the "AMEX Listing
Requirements"). Even if the Units are initially
listed, there can be no assurance that the Units
will meet the requirements for continued listing on
AMEX. See "Risk Factors -- No Assurance as to
Liquidity or Trading Market," and "The Offer to
Exchange -- Listing of the Units."
4
<PAGE> 10
PAYMENT OF FEES AND
EXPENSES; TRANSFER TAXES... Tendering shareholders will not be required to pay
brokerage fees or, except as otherwise provided in
the Instructions of the Letter of Transmittal,
transfer taxes with respect to the exchange of
Shares and the Additional Cash Payment, if
applicable, pursuant to the Offer. The Company will
pay all transfer taxes, other than certain
applicable taxes or as set forth in the Letter of
Transmittal, in connection with the Offer. See "The
Offer to Exchange -- Payment of Fees and Expenses;
Transfer Taxes."
5
<PAGE> 11
SELECTED FINANCIAL INFORMATION -- THERMOLASE CORPORATION
The selected financial information presented below as of and for the fiscal
year ended December 31, 1994, the nine months ended September 30, 1995 and the
fiscal year ended September 28, 1996 has been derived from ThermoLase's
Consolidated Financial Statements, which have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report incorporated
by reference into this Registration Statement. The selected financial
information as of and for the fiscal years ended January 2, 1993 and January 1,
1994 has been derived from ThermoLase's Consolidated Financial Statements, which
have been audited by Arthur Andersen LLP, but have not been incorporated by
reference into this Registration Statement. This information should be read in
conjunction with the Consolidated Financial Statements and related notes
incorporated by reference into this Registration Statement. The selected
financial information for the fiscal year ended September 30, 1995 and the
three-month periods ended December 30, 1995 and December 28, 1996 has not been
audited but, in the opinion of ThermoLase, includes all adjustments (consisting
only of normal, recurring adjustments) necessary to present fairly such
information in accordance with generally accepted accounting principles applied
on a consistent basis. The results of operations for the three-month period
ended December 28, 1996 are not necessarily indicative of results for the entire
year.
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
FISCAL YEAR ENDED ENDED FISCAL YEAR ENDED ENDED
------------------------------ ----------- ---------------------- --------------------
JAN. 2, JAN. 1, DEC. 31, SEPT. 30, SEPT. 30, SEPT. 28, DEC. 30, DEC. 28,
1993 1994(1) 1994(2) 1995(3)(4) 1995 1996 1995 1996
------- ------- -------- ----------- --------- --------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues..................... $ -- $ 625 $18,682 $17,544 $23,348 $27,812 $ 7,400 $ 8,610
------- ------- ------- ------- ------- ------- ------- -------
Costs and Operating Expenses:
Cost of revenues........... -- 438 10,785 11,424 14,714 20,027 5,160 6,827
Selling, general and
administrative
expenses................. 25 208 5,744 6,158 8,128 9,761 2,599 4,214
Research and development
expenses................. 315 536 2,324 3,151 3,774 3,470 525 909
------- ------- ------- ------- ------- ------- ------- -------
340 1,182 18,853 20,733 26,616 33,258 8,284 11,950
------- ------- ------- ------- ------- ------- ------- -------
Operating Loss............... (340) (557) (171) (3,189) (3,268) (5,446) (884) (3,340)
Interest and Other Income.... -- 542 437 789 930 3,597 938 616
------- ------- ------- ------- ------- ------- ------- -------
Income (Loss) Before Income
Taxes and Cumulative Effect
of Change in Accounting
Principle.................. (340) (15) 266 (2,400) (2,338) (1,849) 54 (2,724)
Income Tax (Provision)
Benefit.................... 125 (1) (260) 721 663 463 (136) 1,335
------- ------- ------- ------- ------- ------- ------- -------
Income (Loss) Before
Cumulative Effect of Change
in Accounting Principle.... (215) (16) 6 (1,679) (1,675) (1,386) (82) (1,389)
Cumulative Effect of Change
in Accounting Principle,
Net of Tax................. -- -- 9 -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Net Income (Loss)............ $ (215) $ (16) $ 15 $(1,679) $(1,675) $(1,386) $ (82) $(1,389)
======= ======= ======= ======= ======= ======= ======= =======
Earnings (Loss) per Share
Before Cumulative Effect of
Change in Accounting
Principle.................. $ (.01) $ -- $ -- $ (.04) $ (.04) $ (.03) $ -- $ (.03)
======= ======= ======= ======= ======= ======= ======= =======
Earnings (Loss) per Share.... $ (.01) $ -- $ -- $ (.04) $ (.04) $ (.03) $ -- $ (.03)
======= ======= ======= ======= ======= ======= ======= =======
Weighted Average Shares...... 26,168 31,141 35,767 38,005 37,880 40,353 40,091 40,685
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
6
<PAGE> 12
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
FISCAL YEAR ENDED ENDED FISCAL YEAR ENDED ENDED
------------------------------ ----------- ---------------------- --------------------
JAN. 2, JAN. 1, DEC. 31, SEPT. 30, SEPT. 30, SEPT. 28, DEC. 30, DEC. 28,
1993 1994(1) 1994(2) 1995(3)(4) 1995 1996 1995 1996
------- ------- -------- ----------- --------- --------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT END OF
PERIOD):
Working Capital.............. $ -- $3,610 $16,325 $ 68,691 $ 47,197 $68,019 $35,485
Total Assets................. 71 23,551 33,570 89,463 95,520 89,554 92,948
Long-term Obligations........ -- -- -- -- -- -- --
Common Stock Subject to
Redemption................. -- 14,511 -- -- -- -- 2,613
Shareholders' Investment..... 71 (189) 28,997 82,218 79,037 82,246 72,985
</TABLE>
- ---------------
(1) Reflects the net proceeds of ThermoLase's March 1993 private placement and
the December 1993 acquisition of CBI Laboratories.
(2) Reflects the net proceeds of ThermoLase's July 1994 initial public offering
and the adoption of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."
(3) In September 1995, ThermoLase changed its fiscal year end from the Saturday
nearest December 31 to the Saturday nearest September 30. Accordingly,
ThermoLase's 39-week transition period ended September 30, 1995 is
presented.
(4) Reflects the net proceeds of ThermoLase's June 1995 private placements and
August 1995 public offering of Common Stock.
7
<PAGE> 13
SELECTED FINANCIAL INFORMATION -- THERMO ELECTRON CORPORATION
The selected financial information presented below as of and for the fiscal
years ended January 1, 1994, December 31, 1994 and December 30, 1995 has been
derived from Thermo Electron's Consolidated Financial Statements, which have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report incorporated by reference into this Registration
Statement. The selected financial information as of and for the fiscal years
ended December 28, 1991 and January 2, 1993 has been derived from Thermo
Electron's Consolidated Financial Statements, which have been audited by Arthur
Andersen LLP, but have not been incorporated by reference into this Registration
Statement. This information should be read in conjunction with Thermo Electron's
Consolidated Financial Statements and related notes incorporated by reference
into this Registration Statement. The selected financial information for the
nine-month periods ended September 30, 1995 and September 28, 1996 has not been
audited but, in the opinion of Thermo Electron, includes all adjustments
(consisting only of normal, recurring adjustments) necessary to present fairly
such information in accordance with generally accepted accounting principles
applied on a consistent basis. The results of operations for the nine-month
period ended September 28, 1996 are not necessarily indicative of results for
the entire year.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
-------------------------------------------------------------- -----------------------
DEC. 28, JAN. 2, JAN. 1, DEC. 31, DEC. 30, SEPT. 30, SEPT. 28,
1991(1) 1993(2) 1994(3) 1994(4) 1995 1995 1996(5)
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues............................. $ 842,538 $ 999,228 $1,354,508 $1,729,191 $2,270,291 $1,623,333 $2,138,125
Costs and Expenses:
Cost of product and service
revenues......................... 532,904 608,975 755,493 928,645 1,239,762 881,247 1,209,280
Expenses for research and
development and new lines of
business......................... 84,595 106,466 183,965 233,099 272,809 201,855 221,675
Selling, general and administrative
expenses......................... 177,694 213,266 289,282 384,715 510,564 365,162 510,238
Restructuring and other
nonrecurring costs............... 3,709 -- 6,616 650 21,938 21,938 32,264
---------- ---------- ---------- ---------- ---------- ---------- ----------
798,902 928,707 1,235,356 1,547,109 2,045,073 1,470,202 1,973,457
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating Income..................... 43,636 70,521 119,152 182,082 225,218 153,131 164,668
Gain on Issuance of Stock by
Subsidiaries....................... 27,367 30,212 39,863 25,283 80,815 65,632 110,857
Other Income (Expense), Net.......... 10,557 1,842 (27,548) (989) (7,225) (7,772) (6,339)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income Before Income Taxes, Minority
Interest and Change in Accounting
Principle.......................... 81,560 102,575 131,467 206,376 298,808 210,991 269,186
Provision for Income Taxes........... 25,765 27,750 33,513 70,703 98,711 66,155 74,589
Minority Interest Expense............ 7,269 13,902 21,086 30,962 60,515 43,558 57,413
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income Before Change in Accounting
Principle.......................... 48,526 60,923 76,868 104,711 139,582 101,278 137,184
Change in Accounting Principle, Net
of Tax(6).......................... -- 1,438 -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Income........................... $ 48,526 $ 59,485 $ 76,868 $ 104,711 $ 139,582 $ 101,278 $ 137,184
========== ========== ========== ========== ========== ========== ==========
Earnings per Share Before Change in
Accounting Principle:
Primary............................ $ .56 $ .64 $ .74 $ .90 $ 1.10 $ .81 $ .99
========== ========== ========== ========== ========== ========== ==========
Fully diluted...................... $ .53 $ .60 $ .67 $ .80 $ .97 $ .71 $ .89
========== ========== ========== ========== ========== ========== ==========
Earnings per Share:
Primary............................ $ .56 $ .62 $ .74 $ .90 $ 1.10 $ .81 $ .99
========== ========== ========== ========== ========== ========== ==========
Fully diluted...................... $ .53 $ .59 $ .67 $ .80 $ .97 $ .71 $ .89
========== ========== ========== ========== ========== ========== ==========
Weighted Average Shares:
Primary............................ 86,333 95,811 104,203 116,500 126,626 125,058 138,853
========== ========== ========== ========== ========== ========== ==========
Fully diluted...................... 99,551 111,818 130,618 151,229 159,246 159,057 175,660
========== ========== ========== ========== ========== ========== ==========
</TABLE>
8
<PAGE> 14
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
-------------------------------------------------------------- -----------------------
DEC. 28, JAN. 2, JAN. 1, DEC. 31, DEC. 30, SEPT. 30, SEPT. 28,
1991(1) 1993(2) 1994(3) 1994(4) 1995 1995 1996(5)
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT END OF
PERIOD):
Working Capital...................... $ 468,399 $ 508,685 $ 833,839 $1,150,732 $1,317,146 $1,279,435 $2,012,247
Total Assets......................... 1,212,519 1,837,983 2,507,597 3,061,935 3,786,339 3,546,130 4,949,500
Long-term Obligations................ 255,093 494,152 647,592 1,049,850 1,118,077 1,080,152 1,408,386
Common Stock of Subsidiaries Subject
to
Redemption......................... 5,486 5,468 14,511 -- 17,513 17,435 73,533
Shareholders' Investment............. 489,538 563,826 873,720 1,007,486 1,309,729 1,226,934 1,697,480
</TABLE>
- ---------------
(1) Reflects the issuance of $164.0 million principal amount of convertible
debentures.
(2) Reflects the August 1992 acquisition of Nicolet Instrument Corporation and
the issuance of $260.0 million principal amount of convertible debentures.
(3) Reflects the 1993 public offering of common stock for net proceeds of $246.0
million.
(4) Reflects the issuance of $345.0 million principal amount of convertible
debentures.
(5) Reflects the issuance of $585.0 million principal amount of convertible
debentures.
(6) Reflects the adoption in fiscal 1992 of Statement of Financial Accounting
Standards No. 106, "Accounting for Post-retirement Benefits Other Than
Pensions."
9
<PAGE> 15
RISK FACTORS
The following risk factors, in addition to the other information contained
or incorporated by reference in this Offer to Exchange, including the important
risk factors identified under the caption "Forward looking Statements"
incorporated by reference into the Company's Annual Report on Form 10-K, as
amended, for the fiscal year ended September 28, 1996 and the important factors
identified under the caption "Other Information" in Thermo Electron's Quarterly
Report on Form 10-Q for the quarter ended September 28, 1996, should be
considered by holders of Common Stock in evaluating the Offer.
RISK OF UNCERTAIN TAX TREATMENT. Due to the unique characteristics of the
Offer and the Units, the tax treatment of the exchange and the ownership and
disposition of the Units is uncertain. The Internal Revenue Service might
challenge all or part of the Company's treatment of the exchange as a
reorganization under Section 368(a)(1)(E) of the Code. If the Internal Revenue
Service were to successfully challenge the Company's treatment of the exchange,
shareholders who make a Share Only Exchange could be required to recognize
income up to the fair market value of the Redemption Right (including the
Guarantee). Shareholders who make a Share and Cash Exchange could be treated as
having exchanged a portion of their Common Stock surrendered in the exchange for
a proportionate part of the Guarantee in a taxable transaction. In addition, the
Internal Revenue Service might conclude that a Unit is indebtedness, rather than
equity, for federal income tax purposes, in which case (i) the exchange would be
a taxable exchange of the holder's Common Stock surrendered, which could result
in the recognition of gain to a shareholder (whether the shareholder made a
Share Only Exchange or a Share and Cash Exchange), and (ii) distributions of
property by the Company with respect to a Unit would be treated as interest, and
not dividends. Shareholders are urged to consult their own tax advisors with
regard to the tax consequences of the exchange and the ownership or disposition
of the Units. See "The Offer to Exchange -- Certain Federal Income Tax
Consequences."
NO ASSURANCE AS TO LIQUIDITY OR TRADING MARKET. The Units are a new issue
of securities with no established trading market. Although the Company has
applied for the listing of the Units on AMEX, and it is a condition to the Offer
that the Units be approved for listing on AMEX, subject to official notice of
issuance, there can be no assurance that an active trading market for the Units
will develop or be sustained in the future. Even if the Units are initially
listed, there can be no assurance that the Units will meet the requirements for
continued listing on AMEX. Thus, no assurance can be given as to the liquidity
of, or trading market, if any, for the Units.
POTENTIAL TERMINATION OF REDEMPTION RIGHTS. The Redemption Rights will
expire and become worthless if, following the Expiration Date, the closing price
of the Common Stock is at least $26.00 for 20 of any 30 consecutive trading
days. In the event of the expiration of the Redemption Rights, each Unit will
automatically become, and trade as, one share of Common Stock. Accordingly,
shareholders receiving Units in the exchange will need to monitor the price of
the Common Stock (which may be different than the price of the Units) to be
aware of the status of the Redemption Rights and the value of the Units.
ABILITY OF SIGNIFICANT SHAREHOLDER TO CONTROL CORPORATE ACTIONS. The
Company's shareholders do not have the right to cumulate votes for the election
of directors. ThermoTrex, which at December 28, 1996, beneficially owned 64% of
the voting stock of the Company and which may own a greater percentage upon the
closing of the exchange (if Shares are tendered in satisfaction of the
Additional Payment), has the power to elect the entire Board of Directors of the
Company and to approve or disapprove any corporate actions submitted to a vote
of the Company's shareholders.
10
<PAGE> 16
THE OFFER TO EXCHANGE
TERMS OF THE OFFER TO EXCHANGE
ThermoLase hereby offers, upon the terms of and subject to the conditions
set forth in this Offer to Exchange and in the accompanying Letter of
Transmittal, to exchange one unit (each, a "Unit") consisting of one share of
common stock, $.01 par value per share, of the Company (the "Common Stock"),
plus one redemption right (each, a "Redemption Right") for each share of Common
Stock (each, a "Share") plus an additional payment of $3.00 (the "Additional
Payment"), validly tendered and accepted for exchange in the Offer. The
Additional Payment may be made either (i) in the form of cash (such cash payment
being hereinafter referred to as the "Additional Cash Payment," and an exchange
in which an Additional Cash Payment is made being hereinafter referred to as a
"Share and Cash Exchange"), or (ii) by delivery to the Company of additional
Shares having a value equal to the aggregate required Additional Payment (the
Shares being tendered in satisfaction of the Additional Payment being
hereinafter referred to as the "Additional Share Payment", and an exchange in
which an Additional Share Payment is made being hereinafter referred to as a
"Share Only Exchange"). Shares tendered in satisfaction of the Additional Share
Payment will be valued at $20.25 per share; accordingly, for each Share tendered
in a Share Only Exchange, the tendering shareholder will receive .871 Units. No
fractional Units will be issued, and the number of Units will be rounded down to
the nearest whole number.
Shareholders may make either a Share and Cash Exchange or a Share Only
Exchange, but not a combination thereof.
No more than 2,000,000 Units will be issued. If the number of Shares and,
if applicable, Additional Cash Payments validly tendered pursuant to the Offer
and not withdrawn prior to the Expiration Date would result in the issuance of
more than 2,000,000 Units, acceptances will be cut back pro rata (with
adjustments to avoid issuance of fractional Units) based on the total number of
Units that would have been issued to such tendering shareholders if no such
cutback had been made. See "-- Acceptance of Tendered Shares and Additional Cash
Payments; Proration; Delivery of Units."
Each Redemption Right will entitle the holder thereof to sell the related
share of Common Stock to the Company for $20.25 during the first 20 business
days after the fourth anniversary of the Expiration Date. The Redemption Right
will not detach or trade separately from the related share of Common Stock (but
instead will trade together with the related share of Common Stock as a Unit)
and will expire and become worthless if, following the Expiration Date, the
closing price of the Common Stock is at least $26.00 for 20 of any 30
consecutive trading days. In the event of the expiration of the Redemption
Right, each Unit will automatically become, and will trade as, one share of
Common Stock. The Company's obligations under the Redemption Rights will be
guaranteed on a subordinated basis by Thermo Electron, the Company's ultimate
parent corporation.
The Offer commences on the date hereof and expires at 12:00 midnight, New
York City time, on April 2 , 1997, unless extended, upon the terms and subject
to the conditions set forth herein (as so extended, the "Expiration Date"). See
"-- Expiration Date; Extensions; Termination." The Company's obligation to
consummate the Offer is subject to certain conditions, including there being
validly tendered and not withdrawn prior to the expiration of the Offer such
number of Shares and, if applicable, the Additional Cash Payments, as would
result in the issuance of at least 500,000 Units (the "Minimum Condition"), and
the listing of the Units on AMEX, subject to official notice of issuance. See
"-- Conditions to the Consummation of the Offer." Shares tendered pursuant to
the Offer which are accepted for exchange will be reclassified as treasury
stock.
AN EXCHANGING SHAREHOLDER WHO MAKES A SHARE AND CASH EXCHANGE WILL, IF SUCH
TENDER IS ACCEPTED, RECEIVE ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND
ONE REDEMPTION RIGHT FOR EVERY SHARE AND ADDITIONAL CASH PAYMENT TENDERED. AN
EXCHANGING SHAREHOLDER WHO MAKES A SHARE ONLY EXCHANGE WILL, IF SUCH TENDER IS
ACCEPTED, RECEIVE .871 UNITS FOR EVERY SHARE TENDERED (ROUNDED DOWN TO THE
NEAREST WHOLE NUMBER
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<PAGE> 17
OF UNITS). THE REDEMPTION RIGHT WILL NOT DETACH OR TRADE SEPARATELY FROM THE
COMMON STOCK RECEIVED IN THE EXCHANGE, BUT INSTEAD WILL TRADE TOGETHER WITH THE
RELATED SHARE OF COMMON STOCK AS A UNIT.
PURPOSE OF THE OFFER
The Company does not believe that the market price of the Common Stock
accurately reflects its intrinsic value. The purpose of the Offer is to give
shareholders who are considering selling their shares the opportunity to reduce
the risk associated with the continued ownership of the Common Stock.
EXPIRATION DATE; EXTENSION; TERMINATION
The Offer will expire at 12:00 midnight, New York City time, on the
Expiration Date. Any extension of the Offer will be followed as soon as
practicable by public announcement thereof, but in no event later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date, and any amendment of the Offer will be followed as
soon as practicable by public announcement thereof. Without limiting the manner
by which the Company may choose to make such public announcement, the Company
shall not, unless otherwise required by law, have any obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service. The Expiration Date will not be
extended beyond April 30, 1997.
Subject to the applicable rules and regulations of the Commission, the
Company reserves the right, in its sole discretion, to waive, modify or amend
the Offer at any time and from time to time. If the Company decides to waive,
modify or amend a material provision of the Offer, it may do so at any time,
provided that it gives notice thereof in the manner specified in the preceding
paragraph and extends the Offer to the extent required by the Exchange Act. With
respect to an increase or decrease in the percentage of the class of securities
being solicited for exchange or a change in the consideration offered, Rule
13e-4(f)(1) under the Exchange Act generally requires that a tender offer remain
open for at least ten business days from the date the notice of such change is
first published, sent or given to securityholders. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a Federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time. The minimum period during which the Offer must remain open following
other material changes in the terms of the Offer will depend on the facts and
circumstances, including the relative materiality of the change in the terms of
information concerning the Offer. Any amendment to the Offer will apply to all
Shares and Additional Cash Payments tendered pursuant thereto, regardless of
when or in what order such Shares and Additional Cash Payments are tendered.
PROCEDURE FOR TENDERING SHARES
To be tendered properly, (i) certificates representing the tendered Shares;
(ii) a certified or official bank check made payable to the Exchange Agent or
wire transfer in the amount of the Additional Cash Payment, if applicable; and
(iii) a properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by the Letter of Transmittal, must be
received by the Exchange Agent at the address set forth on the back cover page
of this Offer to Exchange prior to 12:00 midnight, New York City time, on the
Expiration Date. In lieu of the delivery of certificates for Shares, a holder
may tender Shares pursuant to the procedure for book-entry tender set forth
below (and a confirmation of such book-entry tender must be received by the
Exchange Agent on or before the Expiration Date). The beneficial holders of
Shares that are held by or registered in the name of a broker, dealer,
commercial bank, trust company or other nominee or custodian are urged to
contact such entity promptly if they wish to accept the Offer. LETTERS OF
TRANSMITTAL, TENDERED SHARES AND ADDITIONAL CASH PAYMENTS, IF APPLICABLE, MUST
BE DELIVERED AS DESCRIBED ABOVE AND SHOULD NOT BE SENT TO THE COMPANY.
If a holder desires to accept the Offer and time will not permit the
required deliveries to be made to the Exchange Agent prior to the Expiration
Date, or the procedure for a book-entry transfer cannot be completed on a timely
basis, a tender may be effected in accordance with the guaranteed delivery
procedures, See "-- Guaranteed Delivery Procedure."
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<PAGE> 18
THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL, CERTIFICATES
REPRESENTING TENDERED SHARES, ADDITIONAL CASH PAYMENTS, IF APPLICABLE, AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF EACH TENDERING SHAREHOLDER. IF SUCH
DELIVERY IS BY MAIL, IT IS SUGGESTED THAT SHAREHOLDERS USE PROPERLY INSURED,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE
SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE
EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
Within two business days after the date hereof, the Exchange Agent will
establish accounts with respect to the Common Stock at each of The Depository
Trust Company and the Philadelphia Depository Trust Company (each, a "Book-Entry
Transfer Facility" and collectively, the "Book-Entry Transfer Facilities") for
purposes of the Offer. Any financial institution that is a participant in a
Book-Entry Transfer Facility's system may make book-entry delivery of Shares
tendered pursuant to the terms of the Offer by causing such Book-Entry Transfer
Facility to transfer the same into the Exchange Agent's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedure for such transfer and to confirm such transfer to the
Exchange Agent in writing. Although delivery of Shares may be effected though
book-entry transfer, either (i) a properly completed Letter of Transmittal (or
facsimile thereof) executed by the holder of record, together with the proper
signature guarantees, and a certified or official bank check made payable to the
Exchange Agent or wire transfer in the amount of the Additional Cash Payment, if
applicable, together with all other documents required, or (ii) a Notice of
Guaranteed Delivery, must be transmitted to and received by the Exchange Agent
at its address set forth on the back cover page of this Offer to Exchange on or
before the Expiration Date.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURE DOES NOT CONSTITUTE DELIVERY
TO THE EXCHANGE AGENT.
Except as otherwise provided below, each signature on the Letter of
Transmittal, certificates representing Shares or instruments of transfer must be
guaranteed by a firm or other entity that is an "Eligible Institution." An
Eligible Institution means a firm or other entity identified in Rule 17Ad-15
under the Exchange Act, including (as such terms are defined therein): (i) a
bank; (ii) a broker, dealer, municipal securities dealer, municipal securities
broker, government securities dealer or government securities broker; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings institution that is a
participant in a Securities Transfer Association recognized program. A
verification by a notary public alone is not acceptable. Signatures on a Letter
of Transmittal need not be guaranteed (i) if the Letter of Transmittal is signed
by the registered holder of the Shares being tendered and the holder has not
completed the box titled "Special Exchange Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal; or (ii) if such Shares are tendered
for the account of an Eligible Institution. See Instruction 1 of the Letter of
Transmittal.
If any of the certificates for Shares being tendered are registered in the
name of a person other than the signer of the Letter of Transmittal, or if Units
are to be issued to a person other than the registered owner of the Shares being
tendered, or if the Letter of Transmittal specifies that Shares that are not
accepted for exchange pursuant to the Offer are to be returned to a person other
than the registered owner, then the certificates for such Shares must be
endorsed or accompanied by an appropriate instrument of transfer, signed exactly
as the name(s) of the registered owner(s) appears on the certificate(s), with
the signature(s) on the certificate(s) or instrument(s) of transfer guaranteed
by an Eligible Institution. See Instructions 1 and 5 of the Letter of
Transmittal.
If less than the full number of Shares evidenced by a submitted certificate
are to be tendered, the tendering shareholder should indicate on the Letter of
Transmittal the number of Shares being tendered. If no indication is given, all
Shares represented by such certificate will be deemed to have been tendered. In
the event that a shareholder desires to make a Share and Cash Exchange but such
shareholder's Additional Cash Payment, as designated in the Letter of
Transmittal, is insufficient with respect to the number of Shares
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<PAGE> 19
designated in the Letter of Transmittal or would result in the tendering of a
fractional share, the number of Shares deemed tendered shall be the maximum
number which may be tendered based on the Additional Cash Payment actually
received. Any Shares tendered in a Share and Cash Exchange for which no
Additional Cash Payment is made will be returned to such tendering shareholder.
All questions as to the validity, form, eligibility (including the time of
receipt) and acceptance of tendered Shares and Additional Cash Payments, if
applicable, pursuant to any of the foregoing procedures will be determined by
the Company, in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any or all tenders of
any particular Shares and Additional Cash Payments determined by it not to be in
appropriate form or the acceptance of or exchange for which may, in the opinion
of the Company, be unlawful. The Company also reserves the absolute right to
waive any irregularities or defects in the tender as to any particular Shares or
Additional Cash Payments, whether or not similar irregularities or defects are
waived in the case of any other Shares or Additional Cash Payments. The
Company's interpretation of the terms and conditions of this Offer (including
the Letter of Transmittal and Instructions thereto) shall be final and binding.
Any irregularities or defects in connection with any tender, unless waived, must
be cured within such time as the Company shall determine, which time may be
extended beyond the Expiration Date. Neither the Company, the Exchange Agent,
the Information Agent nor any of their respective affiliates shall be under any
duty to give notification of any irregularities or defects in such tenders or
incur any liability for failure to give such notification. Tendered Shares and
Additional Cash Payments received by the Exchange Agent that are not properly
tendered and as to which the irregularities or defects have not been cured or
waived will be returned (without interest thereon or deduction therefrom) by the
Exchange Agent to the tendering shareholder as soon as practicable following the
Expiration Date, unless otherwise provided in the Letter of Transmittal.
GUARANTEED DELIVERY PROCEDURE
If a shareholder desires to tender his Shares and Additional Cash Payments,
if applicable, pursuant to the Offer but is unable to deliver (i) all necessary
stock certificates, or to comply with the procedures for book-entry tender of
such Shares, (ii) the Additional Cash Payment, if applicable, and (iii) the
Letter of Transmittal and all other required documents, to the Exchange Agent on
or before the Expiration Date, such tender may nevertheless be effected,
provided that all of the following conditions are satisfied:
(i) such tender is made by or through a member firm of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc. or by or through a commercial bank or trust
company having an office or correspondent in the United States.
(ii) prior to the Expiration Date, a properly completed and duly
executed Notice of Guaranteed Delivery, including a guarantee by a member
firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company having an office or correspondent in the United States (by
telegram, telex, facsimile transmission, mail or hand delivery) setting
forth the name and address of the shareholder and the number of Shares and
Additional Cash Payment, if applicable, being tendered, stating that the
tender is being made thereby and guaranteeing that within three trading
days after the date of the Notice of Guaranteed Delivery, the Shares, the
Additional Cash Payment, if applicable, and the Letter of Transmittal (or
facsimile thereof), together with all other required documents, will be
deposited by the Eligible Institution with the Exchange Agent; and
(iii) the certificates for all Shares being tendered in proper form
for transfer (or a written confirmation of book-entry transfer into the
Exchange Agent's account at a Book-Entry Transfer Facility as described
above), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and a certified or official bank check made payable to
the Exchange Agent or wire transfer in the amount of the Additional Cash
Payment, if applicable, together with all other required documents, are
received by the Exchange Agent within three American Stock Exchange trading
days after the date of the Notice of Guaranteed Delivery.
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<PAGE> 20
WITHDRAWAL RIGHTS
Any Shares and, if applicable, Additional Cash Payments tendered pursuant
to the Offer may be withdrawn by the tendering shareholder subject to the
procedures described below, at any time prior to the Expiration Date.
Thereafter, any such tenders are irrevocable, except that they may be withdrawn
after April 30, 1997, unless theretofore accepted for exchange as provided in
this Offer to Exchange. If the Company extends the period of time during which
the Offer is open, is delayed in its acceptance of the Shares and, if
applicable, Additional Cash Payments or is unable to accept the Shares and, if
applicable, Additional Cash Payments for any reason, then, without prejudice to
the Company's rights under the Offer, the Exchange Agent may, on behalf of the
Company, retain all Shares and Additional Cash Payments and such Shares and
Additional Cash Payments may not be withdrawn, except to the extent tendering
shareholders are entitled to and duly exercise withdrawal rights as provided
herein. Any such delay will be accompanied by an extension of the Offer to the
extent required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must (i) be timely received by the Exchange
Agent at its address on the back cover of this Offer to Exchange before the
Exchange Agent receives notice of acceptance for exchange by the Company of the
Shares and, if applicable, the Additional Cash Payments, (ii) set forth the name
of the tendering shareholder, (iii) if the certificates for the Shares have been
deposited with or otherwise identified to the Exchange Agent, contain the
description of the Shares to be withdrawn and indicate the certificate numbers
shown on the certificates evidencing such Shares (except in the case of
book-entry transfers), (iv) identify the aggregate amount of any Additional Cash
Payment deposited with the Exchange Agent and identify the check or wire
transfer number thereof, and (v) be executed by the shareholder in the same
manner as the original Common Stock certificate(s) for tendered shares or be
accompanied by evidence satisfactory to the Company that the person withdrawing
the tender has succeeded to the beneficial ownership of such tendered Shares. In
the case of Shares tendered by book-entry transfer, a notice of withdrawal must
specify, in lieu of certificate numbers, the name and number of the account at
one of the Book-Entry Transfer Facilities to be credited with the withdrawn
Shares.
The notice of withdrawal must be guaranteed by an Eligible Institution,
unless the Shares subject to the withdrawal have been tendered (i) by a
registered holder who has not completed the box entitled "Special Exchange
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal;
or (ii) for the account of an Eligible Institution. All questions as to the form
and validity (including the time of receipt) of notices of withdrawal will be
determined by the Company, in its sole discretion, whose determination shall be
final and binding. Neither the Company, the Exchange Agent, the Information
Agent nor any of their respective affiliates shall be under any duty to give any
notification of any irregularities or defects in any notice of withdrawal or
incur any liability for failure to give any such notification. Shares and, if
applicable, Additional Cash Payments withdrawn in the manner specified above
will not be considered to have been duly tendered, and any such Shares and
Additional Cash Payments will be returned by the Exchange Agent as soon as
practicable after such withdrawal. However, withdrawn Shares and Additional Cash
Payments may be re-tendered at any time prior to the Expiration Date, upon the
terms and subject to the conditions of the Offer.
No interest shall be paid on any amount returned to a shareholder whether
on account of the extension or termination of the Offer, the withdrawal of
Shares and Additional Cash Payments by the tendering shareholder, or otherwise.
ACCEPTANCE OF SHARES AND ADDITIONAL CASH PAYMENTS; PRORATION; DELIVERY OF UNITS
Upon the terms and subject to the conditions of this Offer, no more than
2,000,000 Units will be issued. For purposes of this Offer, the Company will be
deemed to have accepted for exchange properly tendered Shares and the related
Additional Cash Payments, if applicable, when, as and if the Company has given
oral or written notice thereof to the Exchange Agent. If the number of Shares,
and, if applicable, Additional Cash Payments validly tendered and not withdrawn
prior to the Expiration Date would result in the issuance of more than 2,000,000
Units, acceptances will be cut back pro rata (with adjustments to avoid issuance
of fractional Units) based on the total number of Units that would have been
issued to such tendering
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<PAGE> 21
shareholders had no such cutback been made. All tendering shareholders will be
deemed to have waived any right to receive notice of the acceptance of their
Shares and, if applicable, the related Additional Cash Payments.
The Exchange Agent will act as agent for the tendering shareholders for the
purposes of receiving from the Company the Units and transmitting the Units to
tendering shareholders. Tendered Shares not accepted for exchange by the
Company, if any, together with any Additional Cash Payments related thereto,
will be returned to the tendering shareholders (or, in the case of Shares
tendered by a Book-Entry Transfer Facility, will be credited to an account
maintained with such Book-Entry Transfer Facility) without expense as promptly
as practicable following the Expiration Date.
Delivery of the Units in exchange for Shares and Additional Cash Payments,
if applicable, that have been properly tendered and not withdrawn on or prior to
the Expiration Date and that have been accepted for exchange by the Company will
be made as promptly as practicable after the Expiration Date. All deliveries
will be made through the Exchange Agent. Upon the deposit of the Units by the
Company with the Exchange Agent for the purpose of making the exchange to
validly tendering shareholders, the Company's obligation to make such exchange
shall be satisfied, and such tendering shareholders must thereafter look solely
to the Exchange Agent for delivery of the Units.
If proration of tendered Shares is required, the Company does not expect to
be able to announce the final proration factor or to commence the exchange for
any Shares and Additional Cash Payments, if applicable, pursuant to the Offer
until approximately five business days after the Expiration Date, due to the
difficulty in determining the number of Shares validly tendered (including
shares tendered by the guaranteed delivery procedures described above).
Preliminary results of the proration will be announced by press release as
promptly as practicable after the Expiration Date. Holders of Common Stock may
obtain such preliminary information from the Information Agent and may also be
able to obtain such information from their brokers.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following addresses the material federal income tax consequences of the
Exchange (as defined below) and the ownership and disposition of Units. This
discussion expresses the opinion of Hale and Dorr LLP, counsel to the Company,
regarding the material federal income tax consequences to the Company's
shareholders attributable to the exchange of Shares and, if applicable,
Additional Cash Payments for Units in the Exchange (as defined below), and the
ownership and disposition of Units acquired in the Exchange.
Because of the unique features of the Offer to Exchange and the Units, it
is not possible to provide a definitive discussion of the federal income tax
consequences of a Share and Cash Exchange or a Share Only Exchange (each
sometimes referred to as the "Exchange"), or of the ownership and disposition of
Units. The following discussion is based upon the interpretation by Hale and
Dorr LLP of the Code, applicable Treasury Regulations, judicial authority and
administrative rulings and practice, all as of the date hereof. The Internal
Revenue Service (the "IRS") is not bound by such discussion and is not precluded
from adopting a contrary position. In addition, there can be no assurance that
future legislative, judicial or administrative changes or interpretations will
not adversely affect the accuracy of the statements and conclusions set forth
herein. Any such changes or interpretations could be applied retroactively and
could affect the tax consequences of the Exchange or of the ownership or
disposition of Units. In addition, the Company has not sought a ruling from the
IRS with respect to these matters.
Shareholders should be aware that this section does not deal with all
federal income tax considerations that may be relevant to a particular
shareholder in light of their particular circumstances, such as shareholders who
are dealers in securities, who are foreign persons or who acquired their Shares
through stock option or stock purchase programs or in other compensatory
transactions. Moreover, no foreign, state or local tax consequences are
addressed herein. ACCORDINGLY, SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE EXCHANGE, INCLUDING THE
APPLICABLE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES TO THEM.
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<PAGE> 22
The discussion below assumes that the Units will be treated as equity
rather than as debt for federal income tax purposes. See "Treatment of Units as
Equity," below.
Treatment of The Exchange
The federal tax treatment of the Exchange will depend in significant part
upon whether a Redemption Right is treated as one of the attributes of a Unit
(and thus as an integral part of a Unit) or whether it will be treated as a
separate property right. Although there is a limited amount of analogous legal
authority, there is no authority addressing the issue on facts substantially
similar to those presented by the Units. Accordingly, Hale and Dorr LLP is
unable to render an opinion as to the more likely treatment of the Exchange for
federal income tax purposes. Nevertheless, based on the analogous authority,
Hale and Dorr LLP believes that a shareholder who reports the tax consequences
of the Exchange on the assumption that the Redemption Right is an integral part
of a Unit would have a realistic possibility of having such position upheld if
challenged by the IRS. If the Redemption Right is treated as an integral part of
the Unit, the Exchange would be treated as a reorganization under Section
368(a)(1)(E) of the Code (a "Reorganization") and:
(a) No gain or loss should be recognized by holders of Common Stock
upon the receipt of a Unit in exchange for a Share and the Additional
Payment in the Exchange, except that a holder will recognize income to the
extent of the excess, if any, of the fair market value of the Guarantee
over any portion of any Additional Cash Payment. The IRS, however, could
assert that a shareholder who made an Additional Cash Payment should not be
allowed to treat the Guarantee as having been purchased entirely with the
Additional Cash Payment but should be treated as having exchanged a portion
of the Common Stock surrendered in the Exchange for a proportionate part of
the Guarantee in a taxable transaction. Because of the lack of authority
addressing this issue, Hale and Dorr LLP is unable to render an opinion as
to the more likely outcome if raised by the IRS. Nevertheless, Hale and
Dorr LLP believes that a shareholder who takes the position that the
Guarantee was purchased entirely with the Additional Cash Payment would
have a realistic possibility of having such position upheld if challenged
by the IRS.
(b) The tax basis of the Unit received by a shareholder in the
Exchange will be the same as the tax basis of the Common Stock surrendered
in exchange for the Unit, plus any Additional Cash Payment and the amount
of gain recognized, if any, by such shareholder, less the fair market value
of the Guarantee.
(c) The holding period of the Unit received by each shareholder in the
Exchange will include the period for which the Common Stock surrendered in
the Exchange was considered to be held, provided that the Common Stock so
surrendered was held as a capital asset at the time of the Exchange.
The Company estimates that the Guarantee has a fair market value of $1.00
per Unit; however, the Company's estimate is not binding on the IRS.
If the IRS were to successfully challenge the above-described treatment of
the Exchange on the grounds that a Redemption Right should be treated as a
property right that is separate from a Unit, shareholders who participate in the
Exchange and make the Additional Payment with Shares may be required to
recognize income up to the fair market value of the Redemption Rights (including
the related Guarantee) received by that shareholder. Such income would be a
capital gain if the provisions of Section 302 of the Code applied to the
exchange by such shareholder of Common Stock, and otherwise it will be treated
as a distribution of property to which Section 301 of the Code applies. See
"Consequences of the Redemption of a Unit" below. Except as noted in paragraph
(a) above, shareholders who make an Additional Cash Payment should not recognize
income, even if the IRS were to successfully challenge the Company's treatment
of the Exchange as a Reorganization.
Treatment of Units as Equity
Hale and Dorr LLP believes that it is more likely than not that the Units
will be treated as equity for federal income tax purposes, and the Company will
so treat the Units.
The determination of whether the Units will be treated as equity for
federal income tax purposes is a question of fact, and no one factor is
conclusive. Although no definitive set of relevant factors exists,
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<PAGE> 23
Section 385 of the Code lists five factors that "may" be taken into account in
regulations, yet to be issued, that are to set forth the rules for determining
whether an interest in a corporation is to be treated as equity or debt for
federal income tax purposes. These factors are (1) whether there is a written
unconditional promise to pay on demand or on a specified date a sum certain in
money in return for an adequate consideration in money or money's worth, and to
pay a fixed rate of interest, (2) whether there is a subordination to or
preference over any indebtedness of the corporation, (3) the ratio of debt to
equity of the corporation, (4) whether there is convertibility into the stock of
the corporation, and (5) the relationship between holdings of stock in the
corporation and the holdings of the interest in question. The IRS has indicated
that the intent of the parties in creating the instrument is a factor that may
be taken into account as well.
Hale and Dorr LLP believes that an analysis of the foregoing factors
indicates that it is likely, although not certain, that a Unit will be treated
as equity for federal income tax purposes. The Company is obliged to redeem a
Unit for a fixed amount of money upon exercise of the Redemption Right at
essentially a predetermined date, raising the possibility that a Unit could be
treated as convertible debt. However, no provisions for interest payments or
guaranteed dividends of any sort are made. In addition, the Redemption Right
will expire if the closing price of the Common Stock is at least $26.00 for 20
of any 30 consecutive trading days. The Company is also prohibited from
redeeming a Unit to the extent that such redemption is made at a time when the
Company's capital is impaired or when such redemption would cause any impairment
of the Company's capital or if such redemption is otherwise prohibited by law.
Furthermore, a Unit will be subordinated to all indebtedness of the Company; the
stock portion of the Unit is voting stock; there are no "conversion" rights
other than a possible "deemed" conversion at the time of expiration of the
Redemption Right; and, finally, the parties intend to create an equity interest
notwithstanding the contrary treatment for financial accounting purposes.
Section 385 of the Code provides that the issuer's characterization of an
interest in a corporation as debt or equity will be binding on the issuer and
all holders, but will not be binding on the IRS. Accordingly, because the
Company intends to treat the Units as equity for federal income tax purposes,
holders will not be able to treat the Units as debt for such purposes. If the
Units were to be treated as debt by the IRS or a court, the federal income tax
consequences would include: (i) the Exchange would be a taxable exchange of the
holder's Common Stock surrendered, which could result in the recognition of gain
to a shareholder and (ii) distributions of property by the Company with respect
to a Unit would be treated as interest, and not dividends, and so would not be
eligible for the dividends received deduction. Similarly, redemptions by the
Company of the Common Stock would not be subject to the rules of Section 302 of
the Code, as discussed below, but would instead be treated as payments of
principal and interest.
Sale of Units
In general, gain or loss will be recognized upon a sale of a Unit or, in
the event of the expiration of the Redemption Right, upon the sale of the
remaining share of Common Stock. The amount of such gain or loss will be the
difference between the amount received in exchange for the Unit or share of
Common Stock and the holder's adjusted basis in the Unit or share of Common
Stock. The holder's tax basis in a share of Common Stock after the associated
Redemption Right has lapsed should equal the basis of the holder's Unit
immediately before the lapse of the Redemption Right, assuming, as described
above under "Treatment of The Exchange," that the Redemption Right is treated as
an integral part of the Unit.
Any gain or loss recognized upon the sale or exchange of a Unit or share of
Common Stock will generally be treated as capital gain or loss if the Unit or
Common Stock sold was held as a capital asset. Such gain or loss will be long
term capital gain or loss if the Unit or Common Stock was held for more than one
year, and will be short term capital gain or loss if it has been held for one
year or less. To the extent applicable, the straddle rules, summarized below,
will likely suspend the running of the holder's holding period for this purpose
until the expiration of the Redemption Right.
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<PAGE> 24
Short Sale and Straddle Rules
Under certain circumstances the holding period of a share of Common Stock
may be suspended. It is possible that the Redemption Right will be characterized
for federal income tax purposes as an option to sell Common Stock. In that case,
it is possible that the short sale rules of Section 1233 of the Code would
apply, resulting in, among other possible results, suspension of the holding
period of a number of other shares of Common Stock equal to the number subject
to the Redemption Right until the expiration of the Redemption Right. However,
Section 1233(c) of the Code and Treas. Reg. sec. 1.1233-1(c)(3) provide that, if
the Common Stock is identified by appropriate entries in the holder's records
within fifteen days after the date of its acquisition as subject to such option,
the rules of Section 1233(b), including the holding period suspension rules,
will not apply. If the Redemption Right is properly characterized as an option
and a holder identifies that the Common Stock is subject to the Redemption Right
in its records within 15 days of the Unit's acquisition, Section 1233(c) of the
Code should apply.
It is likely that the Unit will be considered to be a tax straddle subject
to the rules of Section 1092 of the Code. The tax straddle rules apply only if
both (a) the Common Stock is considered to be actively traded and (b) the
Redemption Right is considered to be either (i) an "option" with respect to the
Common Stock or substantially identical stock or securities or (ii) a position
with respect to substantially similar or related property (other than stock).
Assuming that a Unit is considered to be a tax straddle, Temporary Treasury
Regulations provide that the holding period of a share of Common Stock that is
part of that straddle generally will not begin earlier than the expiration of
the Redemption Right with respect to that share, unless the holder has held the
Common Stock exchanged for such Unit for more than one year prior to the
acquisition of the Unit. In addition, under Section 263(g) of the Code, interest
and carrying charges relating to a tax straddle are not deductible and must be
capitalized and added to basis.
Consequences of the Redemption of a Unit
The amount of cash received by a holder of a Unit upon the redemption of
the Unit by the Company upon exercise of the Redemption Right will be treated
either (i) as a distribution by the Company in exchange for the Unit, in which
case the holder will recognize gain or loss measured by the difference between
the amount realized and the holder's tax basis for the Unit surrendered or (ii)
as a distribution of property to which Section 301 of the Code applies (that is,
as a dividend, to the extent of the Company's earnings and profits; see
"Dividends; Dividends Received Deduction," below). For this purpose, the
determination of whether the distribution will be treated as an exchange for
stock or as a Code Section 301 distribution will be made in accordance with the
provisions of Section 302 of the Code, as explained below.
Under Section 302 of the Code, a holder will not be treated as having
received a Code Section 301 distribution upon the redemption of a Unit upon
exercise of the Redemption Right if (1) the redemption results in the complete
termination of the holder's interest in the Company, (2) the holder's percentage
ownership of the outstanding Common Stock of the Company (and voting stock if
any voting stock other than Common Stock is outstanding) immediately after such
redemption is less than 80% of such holder's percentage ownership of the total
of such outstanding stock immediately before the redemption or (3) the
distribution from the Company upon such redemption is not "essentially
equivalent to a dividend" based on the individual holder's particular facts and
circumstances. For purposes of making these determinations, the holder's
percentage ownership will in general be calculated by taking into account all
shares owned by him, including those deemed to be owned by him pursuant to
Section 318 of the Code. Section 318 of the Code provides that in applying the
above rules, a holder is considered to own shares directly or indirectly owned
by certain members of his family or certain related entities and to own shares
with respect to which he holds options.
For a redemption to qualify as "not essentially equivalent to a dividend,"
it must result in a "meaningful reduction" in the holder's percentage interest
in the Company. The IRS has indicated in published rulings that any reduction in
the percentage interest of a small shareholder in a publicly held corporation
who exercises no control over corporate affairs may constitute such a
"meaningful reduction," absent special circumstances. In applying these rules,
other transactions that are part of an overall plan may be taken into account to
determine
19
<PAGE> 25
the decrease, if any, of a shareholder's percentage interest. In view of the
terms of the Units it is likely that the exercise of the Redemption Right by
other holders of Units will have to be taken into account in determining whether
a particular holder's percentage interest is reduced. In a case in which a
holder would have an increase in his percentage interest after the exercise of
the Redemption Right (for example, if such holder redeemed a lesser percentage
of his shares as compared to other shareholders), the holder could avoid
dividend treatment by selling Units rather than redeeming them; however, there
can be no assurance that there will be an active market for the Units or that if
such a market exists the proceeds received will not be substantially less than
those that would be received by redemption.
In the event that, upon the tender of a Unit pursuant to the Redemption
Right, Thermo Electron is required to acquire the associated Common Stock
pursuant to the terms of the Guarantee, it is probable that the holder will be
deemed to have disposed of the Unit or Common Stock through a sale or exchange,
the consequences of which are discussed in "Sale of Units" above, rather than as
a redemption by the Company (absent circumstances in which the selling holder is
deemed to be in control of the Company and Thermo Electron).
If a redemption is not treated as a Code Section 301 distribution, any gain
or loss recognized will be capital gain or loss if the redeemed Unit is held as
a capital asset. Such gain or loss will be long term or short term depending on
the holding period of such Common Stock. See "Sale of Units" above.
Dividends; Dividends Received Deduction
The Company has never paid any cash dividends on its Common Stock and
anticipates that no dividends will be paid on its Common Stock or the Units in
the foreseeable future. A distribution of property by the Company to its
shareholders will be treated as a dividend only to the extent of its accumulated
earnings and profits or its earnings and profits in the taxable year in which
such distributions occur. Any distribution of property by the Company that is
not a dividend would be treated first as a return of basis to the shareholder
and then as gain from the sale or exchange of property.
To the extent that the Company does have earnings and profits and does make
dividend distributions with respect to Units or shares of Common Stock,
corporate holders would generally be eligible for the dividends received
deduction. This deduction generally equals 70% of the amount received as
dividends, although corporations owning 20% or more of the stock of the Company
are eligible for an 80% deduction. Corporate holders would be eligible for the
dividends received deduction only if, among other things, the Units or shares of
Common Stock are held for more than 45 days. Under Section 246(c) of the Code,
the holding period of stock will be suspended for any periods for which the
holder has, among other things, (i) an option to sell such stock or (ii) a
diminished risk of loss by holding one or more other positions with respect to
substantially similar or related property. It is likely that the Redemption
Right would be considered an option or other position triggering the suspension
of the holding period under Section 246(c) of the Code.
For corporate holders of Units or Common Stock, Section 246A of the Code
reduces the dividends received deduction in the case of "debt-financed portfolio
stock." Debt-financed portfolio stock is defined as portfolio stock, such as the
Units or Common Stock, acquired or carried by the corporate holder with
indebtedness that is "directly attributable" to the investment in such stock.
The reduction is generally a fraction, the numerator of which is the amount of
the holder's indebtedness attributable to such stock and the denominator of
which is the holder's adjusted tax basis in the stock.
In addition, any dividends received by corporate holders would be subject
to the provisions of Section 1059 of the Code relating to "extraordinary
dividends" if the Units or Common Stock with respect to which the dividend is
paid has not been held for more than two years and the amount of the dividend is
considered extraordinary. For this purpose, the holding period of the stock will
be considered suspended under rules similar to those applicable to the
determination of the availability of the dividends received deduction. In
general, a dividend paid with respect to common stock is treated as an
extraordinary dividend if it equals or exceeds ten percent of the shareholder's
adjusted basis in the stock. Dividends that have ex-dividend dates within 85
consecutive days are aggregated for this purpose. An aggregation period of one
year applies if the aggregated dividends exceed 20 percent of the shareholder's
basis. In addition, any redemption of stock of a
20
<PAGE> 26
corporation that is not pro rata as to all shareholders and which is treated as
a dividend distribution under Section 301 of the Code will be treated as an
extraordinary dividend subject to Section 1059 of the Code, without regard to
the period of time the shareholder has held the stock, except as provided in
regulations yet to be proposed or promulgated. If a dividend is subject to the
rules of Section 1059, the tax basis of the holder's Units or Common Stock (or
remaining Units or Common Stock in the case of a redemption) will be reduced by
the amount of the dividend received deduction (the "non-taxed portion" of the
dividend). If the non-taxed portion exceeds the holder's tax basis in such Units
or Common Stock, such excess will be treated as gain from the sale of Units or
Common Stock upon disposition of such Units or Common Stock.
UNTENDERED SHARES
Holders of Shares who do not tender their Shares in the Offer or whose
Shares are not accepted for exchange will continue to hold such Shares, which
are listed on AMEX, and will be entitled to all the rights, and will be subject
to all of the limitations, applicable thereto.
CONDITIONS TO THE CONSUMMATION OF THE OFFER
The obligation of the Company to consummate the Offer will be subject to
the satisfaction or waiver, at or prior to the acceptance of the tendered Shares
and, if applicable, the Additional Cash Payments for exchange, of the following
conditions:
(i) There being validly tendered and not withdrawn prior to the
expiration of the Offer such number of Shares and the related Additional
Cash Payments, if applicable, as would result in the issuance of at least
500,000 Units; and
(ii) the listing of the Units on the American Stock Exchange, subject
to official notice of issuance.
In addition, notwithstanding any other provision of the Offer, the Company
reserves the right to withdraw, terminate or amend the Offer before the
acceptance of the tendered Shares and Additional Cash Payments for exchange if:
(i) any legal action or proceeding is instituted or threatened to be
instituted in any court or by or before any governmental agency (A)
directly or indirectly with respect to the Offer, (B) which, in the sole
judgment of the Company may materially adversely affect the business,
operations or financial condition of the Company;
(ii) there shall have occurred any material adverse development in any
existing legal action or proceeding involving the Company;
(iii) there shall have occurred (A) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange
or AMEX, (B) a declaration of a banking moratorium by United States
authorities or any governmental agency in the United States, (C) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, or (D) a
material adverse change in general economic, political or financial
conditions, if the effect thereof on the financial markets of the United
States shall be such that in the sole judgment of the Company it shall be
impracticable to consummate the Offer;
(iv) there shall have occurred any change, or development involving a
prospective change, in or affecting the business or financial affairs of
the Company which, in the sole judgment of the Company, would materially
impair the contemplated benefits of the Offer to the Company or its
shareholders;
(v) any statute, rule or regulation shall have been proposed or
enacted, or any action shall have been taken by any governmental authority,
which, in the sole judgment of the Company, would or might prohibit,
restrict or delay consummation of the Offer as presently proposed or
materially impair the contemplated benefits of the Offer to the Company or
its shareholders; or
(vi) there exists, in the sole judgment of the Company, any other
actual or threatened legal impediment to the acquisition of the Shares and
Additional Cash Payments or the issuance of the Units
21
<PAGE> 27
as presently proposed. In any such event, the Company shall not be
obligated to accept Shares and Additional Cash Payments tendered pursuant
to the Offer. If the Offer should be withdrawn pursuant to the foregoing,
the Shares and Additional Cash Payments previously tendered will be
returned without expense to the tendering shareholders as promptly as
practicable.
The foregoing conditions are for the sole benefit of the Company and may be
waived by the Company in whole or in part.
LISTING OF THE UNITS
The Company has applied for listing of the Units on AMEX. In order to be
listed, the Company must meet the AMEX Listing Requirements. Even if the Units
are initially listed, there can be no assurance that the Units will meet the
requirements for continued listing on AMEX. Failure to continue to be listed may
adversely affect the market value and liquidity of the Units. See "Risk
Factors -- No Assurance as to Liquidity or Trading Market".
POSITION OF THE BOARD OF DIRECTORS
The Board of Directors is not making any recommendations to its
shareholders as to whether they should exchange or refrain from exchanging any
or all of their Shares. Each shareholder must make his or her own decision as to
whether to exchange any Shares.
PAYMENT OF FEES AND EXPENSES; TRANSFER TAXES
The Company will pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
copies of this Offer to Exchange and related documents to the beneficial owners
of the Common Stock, and in handling or forwarding tenders for their customers.
However, the Company will not make any other payments to brokers, dealers or
others soliciting tenders of Common Stock and Additional Cash Payments. The
Company will pay all legal, accounting, printing, listing, filing and other
similar fees and expenses in connection with the Offer.
The Company will pay all transfer taxes, if any, applicable to the transfer
and sale of Shares to it pursuant to the Offer. If, however, Units are to be
delivered to, or are to be registered or issued in the name of, any person other
than the registered holder of the Shares tendered, or if tendered certificates
are registered in the name of any person other than the person signing the
Letter of Transmittal, or if a transfer tax is imposed for any reason other than
the transfer and sale of Shares to the Company pursuant to the Offer, the amount
of any such transfer tax (whether imposed on the registered holder or any other
person) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted herewith, the
amount of such transfer taxes will be billed directly to such tendering holder.
MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES
Any shareholder whose Common Stock certificates have been mutilated, lost,
stolen or destroyed should contact the Exchange Agent at its address set forth
on the back cover page of this Offer to Exchange for further information.
EXCHANGE AGENT; INFORMATION AGENT
American Stock Transfer & Trust Company has been appointed as Exchange
Agent for the Offer. American Stock Transfer & Trust Company is also the
transfer agent for the Common Stock and the Units. National Westminster Bank
Plc -- New York Branch has been appointed as Information Agent for the Offer.
The Company will pay all fees and expenses of the Exchange Agent and the
Information Agent incurred in connection with the Offer.
22
<PAGE> 28
ACCOUNTING TREATMENT
No gain or loss for accounting purposes will be recognized by the Company
upon the consummation of the Offer. The Units will be treated for accounting
purposes as Common Stock subject to redemption until the expiration of the
Redemption Rights.
INTERESTS OF CERTAIN PERSONS IN OFFER
The Offer is open to the officers, directors and affiliates of the Company.
As of December 28, 1996, the Company's officers and directors beneficially owned
2,795,315 shares of Common Stock, which represented approximately 6.9% of the
outstanding shares. In addition, as of December 28, 1996, ThermoTrex
beneficially owned 25,960,996 shares of Common Stock, which represented
approximately 64% of the outstanding shares. ThermoTrex has advised the Company
that it does not intend to tender any shares of Common Stock for exchange
pursuant to the Offer. The Company has been advised that none of its officers or
directors intend to tender shares of Common Stock for exchange pursuant to the
Offer.
23
<PAGE> 29
MARKET PRICE INFORMATION
ThermoLase's Common Stock is listed on AMEX under the symbol "TLZ." Thermo
Electron's Common Stock is listed on the New York Stock Exchange under the
symbol "TMO."
The table below sets forth, for the fiscal quarters indicated, the reported
high and low sale prices of ThermoLase's Common Stock and Thermo Electron's
Common Stock on AMEX and the New York Stock Exchange, respectively. The Thermo
Electron Common Stock price information is presented for ThermoLase's fiscal
period (fiscal year ending on the Saturday nearest September 30) rather than for
Thermo Electron's fiscal period (fiscal year ending on the Saturday nearest
December 31).(1)
<TABLE>
<CAPTION>
THERMO
THERMOLASE ELECTRON
COMMON COMMON
STOCK(2) STOCK(3)
--------------- ------------
HIGH LOW HIGH LOW
---- --- ---- ---
<S> <C> <C> <C> <C>
FISCAL 1995
- ------------
Quarter ended December 31, 1994............................. 5 3 9/16 21 5/18 18 1/9
Quarter ended April 1, 1995................................. 6 15/16 3 5/8 22 5/6 19 1/2
Quarter ended July 1, 1995.................................. 22 3/8 5 15/16 27 1/3 21 7/9
Quarter ended September 30, 1995............................ 25 1/2 19 1/2 31 1/12 26 2/5
FISCAL 1996
- ------------
Quarter ended December 30, 1995............................. 27 5/8 17 1/4 34 2/3 28 1/4
Quarter ended March 30, 1996................................ 31 20 7/8 42 1/12 30 5/12
Quarter ended June 29, 1996................................. 36 1/2 24 1/4 44 3/8 38 5/6
Quarter ended September 28, 1996............................ 30 3/4 19 7/8 41 7/8 31 3/4
FISCAL 1997
- ------------
Quarter ended December 28, 1996............................. 24 7/8 15 1/8 38 1/4 29 3/4
Quarter ending March 29, 1997 (through February 28, 1997)... 17 5/8 12 3/8 41 1/4 33 3/8
</TABLE>
- ---------------
(1) In September 1995, the Company changed its fiscal year end from the Saturday
nearest December 31 to the Saturday nearest September 30. All periods
referenced in the above table assume that such new fiscal year end had been
in effect for all periods presented.
(2) Prices of the ThermoLase Common Stock have been restated to reflect a
two-for-one stock split, effected in the form of a 100% stock dividend,
which was distributed in June 1995.
(3) Prices of the Thermo Electron Common Stock have been restated to reflect a
three-for-two stock split, effected in the form of a 50% stock dividend,
which was distributed in June 1996.
On February 28, 1997, the most recent practicable date prior to the date of
this Offer to Exchange, the last reported sale price of ThermoLase's Common
Stock on AMEX was $13.125 per share and the last reported sale price of Thermo
Electron's Common Stock on the New York Stock Exchange was $34.125 per share.
24
<PAGE> 30
THERMOLASE CORPORATION
PRO FORMA CONDENSED BALANCE SHEET
(UNAUDITED)
The Company has offered to exchange one Unit, consisting of one share of
Common Stock and one Redemption Right, for one Share plus an Additional Payment
of $3.00. Tendering shareholders may elect to make a Share Only Exchange or a
Share and Cash Exchange. Tendering shareholders selecting a Share Only Exchange
will receive .871 Units for each Share tendered. Tendering shareholders
selecting a Share and Cash Exchange will receive one Unit for each Share and
$3.00 cash payment tendered.
Each Redemption Right will entitle its holder to sell the related share of
Common Stock to the Company for $20.25 during the first 20 business days after
the fourth anniversary of the Expiration Date. No more than 2,000,000 Units will
be issued.
Pro forma information is not presented for Thermo Electron because this
transaction is not material to Thermo Electron's financial position or results
of operations.
Pro forma balance sheets for the Company follow that assume: a) a Share
Only Exchange; and b) a Share and Cash Exchange. Pro forma statement of
operations information is not presented as a result of the immaterial effect the
proposed transaction will have on the Company's results of operation.
25
<PAGE> 31
THERMOLASE CORPORATION
PRO FORMA CONDENSED BALANCE SHEET -- SHARE ONLY EXCHANGE
DECEMBER 28, 1996
(UNAUDITED)
The following unaudited pro forma condensed balance sheet sets forth the
financial position of the Company as of December 28, 1996, to reflect the
receipt by the Company of 2,296,212 Shares in a Share Only Exchange, resulting
in the issuance of 2,000,000 Units, each consisting of one share of Common Stock
and one Redemption Right (such Shares reflecting the ratio of .871 Units
exchanged for every Share tendered). The exchange results in the
reclassification of $40,500,000 from "Common stock" and "Capital in excess of
par value" to "Common stock subject to redemption," based on the issuance of
2,000,000 Redemption Rights, each carrying a maximum liability to the Company of
$20.25 per share. A Share Only Exchange also results in the reclassification of
$3,888,000 from "Capital in excess of par value" to "Treasury Stock," based on
the satisfaction of the $3.00 per share Additional Payment with 296,212 Shares
each recorded at fair value on the date of the exchange, assumed for purposes of
this calculation to be $13 1/8, the closing price of the Company's Common Stock
on February 28, 1997.
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and available-for-sale investments.................. $ 39,403 $ -- $39,403
Accounts receivable, net................................. 4,305 -- 4,305
Inventories.............................................. 4,486 -- 4,486
Other current assets..................................... 3,850 -- 3,850
-------- --------- -------
52,044 -- 52,044
-------- --------- -------
Property and Equipment, at Cost, Net....................... 27,906 -- 27,906
-------- --------- -------
Other Assets............................................... 4,725 -- 4,725
-------- --------- -------
Cost in Excess of Net Assets of Acquired Company........... 8,273 -- 8,273
-------- --------- -------
$ 92,948 $ -- $92,948
======== ========= =======
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable......................................... $ 3,201 $ -- $ 3,201
Accrued expenses......................................... 4,762 -- 4,762
Deferred revenue......................................... 1,776 -- 1,776
Due to parent company and affiliated companies........... 6,847 -- 6,847
-------- --------- -------
16,586 -- 16,586
-------- --------- -------
Deferred Lease Liability................................... 764 -- 764
-------- --------- -------
Common Stock Subject to Redemption......................... 2,613 40,500 43,113
-------- --------- -------
Shareholders' Investment:
Common stock, 40,807,932 shares issued, 38,807,932
shares, pro forma..................................... 408 (20) 388
Capital in excess of par value........................... 82,240 (36,592) 45,648
Accumulated deficit...................................... (4,905) -- (4,905)
Treasury stock at cost, 224,058 shares, 520,270 shares,
pro forma............................................. (4,736) (3,888) (8,624)
Net unrealized loss on available-for-sale investments.... (22) -- (22)
-------- --------- -------
72,985 (40,500) 32,485
-------- --------- -------
$ 92,948 $ -- $92,948
======== ========= =======
Book Value per Share....................................... $ 1.80 $ (.99) $ .81
======== ========= =======
</TABLE>
26
<PAGE> 32
THERMOLASE CORPORATION
PRO FORMA CONDENSED BALANCE SHEET -- SHARE AND CASH EXCHANGE
DECEMBER 28, 1996
(UNAUDITED)
The following unaudited pro forma condensed balance sheet sets forth the
financial position of the Company as of December 28, 1996, to reflect the
receipt by the Company of 2,000,000 Shares and $6,000,000 in cash in a Share and
Cash Exchange, resulting in the issuance of 2,000,000 Units, each consisting of
one share of Common Stock and one Redemption Right. The exchange results in the
reclassification of $40,500,000 from "Common stock" and "Capital in excess of
par value" to "Common stock subject to redemption," based on the issuance of
2,000,000 Redemption Rights, each carrying a maximum liability to the Company of
$20.25 per share. Cash received in a Share and Cash Exchange is recorded as an
increase to "Capital in excess of par value."
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and available-for-sale investments.................. $ 39,403 $ 6,000 $45,403
Accounts receivable, net................................. 4,305 -- 4,305
Inventories.............................................. 4,486 -- 4,486
Other current assets..................................... 3,850 -- 3,850
-------- --------- -------
52,044 6,000 58,044
-------- --------- -------
Property and Equipment, at Cost, Net....................... 27,906 -- 27,906
-------- --------- -------
Other Assets............................................... 4,725 -- 4,725
-------- --------- -------
Cost in Excess of Net Assets of Acquired Company........... 8,273 -- 8,273
-------- --------- -------
$ 92,948 $ 6,000 $98,948
======== ========= =======
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable......................................... $ 3,201 $ -- $ 3,201
Accrued expenses......................................... 4,762 -- 4,762
Deferred revenue......................................... 1,776 -- 1,776
Due to parent company and affiliated companies........... 6,847 -- 6,847
-------- --------- -------
16,586 -- 16,586
-------- --------- -------
Deferred Lease Liability................................... 764 -- 764
-------- --------- -------
Common Stock Subject to Redemption......................... 2,613 40,500 43,113
-------- --------- -------
Shareholders' Investment:
Common stock, 40,807,932 shares issued, 38,807,932
shares,
pro forma............................................. 408 (20) 388
Capital in excess of par value........................... 82,240 (34,480) 47,760
Accumulated deficit...................................... (4,905) -- (4,905)
Treasury stock at cost, 224,058 shares................... (4,736) -- (4,736)
Net unrealized loss on available-for-sale investments.... (22) -- (22)
-------- --------- -------
72,985 (34,500) 38,485
-------- --------- -------
$ 92,948 $ 6,000 $98,948
======== ========= =======
Book Value per Share....................................... $ 1.80 $ (.85) $ .95
======== ========= =======
</TABLE>
27
<PAGE> 33
DESCRIPTION OF SECURITIES
The following is a summary description of the principal terms applicable to
the Units, including the Redemption Rights and the Guarantees.
UNITS
Each Unit being offered by the Company consists of one share of Common
Stock and one Redemption Right. The Redemption Rights will not detach or trade
separately from the related shares of Common Stock (but instead will trade
together with the related share of Common Stock as a Unit). The Company has
applied for the listing of the Units on AMEX under the symbol "TLZ U."
The holder of a Unit may require the Company to redeem the related share of
Common Stock for $20.25 (the "Redemption Price") during the first 20 days after
the fourth anniversary of the Expiration Date (the "Redemption Period"). Notice
of commencement of the Redemption Period will be published in The Wall Street
Journal and will be mailed to holders of record of the Units, not less than 30
nor more than 45 days prior to the commencement of the Redemption Period. To be
redeemed, certificates for Units must be received at the office of the Company
duly executed indicating the number of shares being tendered for redemption
during the Redemption Period. After the end of the Redemption Period, the
Company will mail to each shareholder a check in consideration for the shares
that were redeemed. Shareholders who elect to redeem their shares will be
entitled to revoke their election by delivering a written notice of such
revocation to the Company prior to the end of the Redemption Period.
The Company's obligation to make such redemptions would be deferred to the
extent that such redemptions are made at a time when the Company's capital is
impaired or when such redemptions would cause any impairment of the Company's
capital or if such redemptions are otherwise prohibited by law. These provisions
do not affect the guarantee by Thermo Electron of the Company's redemption
obligations.
Both the consideration payable by the Company upon redemption of the shares
of Common Stock and the number of shares of Common Stock which are subject to
redemption are subject to adjustment upon the occurrence of certain events,
including (i) the issuance of Common Stock as a dividend or the distribution of
a security or right convertible into or exchangeable for shares of Common Stock
to all of the holders of Common Stock, (ii) a subdivision or combination of the
Company's outstanding Common Stock and (iii) the issuance by reclassification or
reorganization of the outstanding shares of Common Stock.
The Redemption Rights will expire and become worthless in the event that
the closing price of the Common Stock as reported on the principal trading
market for the Common Stock is at least $26.00, as adjusted as provided above,
for 20 of any 30 consecutive trading days after the Expiration Date. In the
event of the expiration of the Redemption Rights, each Unit will automatically
become, and will trade as, one share of Common Stock.
In the event of the occurrence prior to the expiration of the Redemption
Rights of a merger or consolidation of the Company with or into another entity
(other than a merger in which the Company is the surviving entity) or the sale
of all or substantially all of the assets of the Company, the holders of Units
shall have the right either (i) to receive the consideration per share as is
payable in such transaction to the holders of Common Stock on account of their
ownership thereof; or (ii) to elect to receive the Redemption Price in cash at
the end of the Redemption Period. Any shareholder electing the provisions of
clause (ii) shall, from and after the date of the transaction to which such
election relates, have the status of a creditor of the Company and all of such
shareholder's rights shall cease with respect to the Units. If, through or as a
result of any 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 similar transaction, (i) the
outstanding shares of Common Stock are increased, decreased or exchanged for a
different number or kind of shares or other securities of the Company, or (ii)
additional shares or new or different shares or other securities of the Company
or other non-cash assets are distributed with respect to such shares of Common
Stock or other securities, an appropriate and proportionate adjustment may be
made in the Redemption
28
<PAGE> 34
Rights to preserve as nearly as possible, as determined by the Company, the
economic benefits of the Redemption Rights for the holders of Units.
The Company reserves the right to amend the terms of the Redemption Rights.
However, the Redemption Rights may not be amended in a way that will dilute or
impair the Redemption Rights without the consent of the holders of a majority of
the then outstanding Units other than Thermo Electron and its subsidiaries.
THE GUARANTEES
The Company and Thermo Electron have entered into a Guarantee Agreement,
pursuant to which Thermo Electron has agreed to guarantee, on a subordinated
basis, the due and punctual performance by the Company of its redemption
obligations described above. Thermo Electron will be obligated to honor the
Guarantees upon the failure of the Company to perform its redemption
obligations, including any failure due to the impairment or potential impairment
of the Company's capital. The Company and Thermo Electron reserve the right to
amend the terms of the Guarantee Agreement. However, the Guarantee Agreement may
not be amended in a way that will dilute or impair the Redemption Rights
described above without the consent of the holders of majority of the then
outstanding Units other than Thermo Electron and its subsidiaries.
Subordination of Guarantees
The obligations represented by the Guarantees will be subordinated in right
of payment to the prior payment in full of all Senior Indebtedness of Thermo
Electron, whether outstanding at the date of execution of the Guarantee
Agreement or thereafter incurred or created. There are no limitations, in the
Guarantee Agreement or otherwise, on Thermo Electron's ability to incur or
create additional Senior Indebtedness in the future. Senior Indebtedness of
Thermo Electron is defined for this purpose as the principal of, premium, if
any, and interest and other amounts due on or with respect to the following,
whether outstanding at the date of execution of the Guarantee Agreement or
thereafter incurred or created: (a) indebtedness of Thermo Electron for money
borrowed by Thermo Electron (including, without limitation, purchase money
obligations), whether or not evidenced by debentures, bonds, notes or other
corporate debt securities or similar instruments issued by Thermo Electron
(including the principal of, premium, if any, and interest on Thermo Electron's
5% Senior Convertible Debentures due 2001); (b) obligations to reimburse any
bank or other person in respect of amounts paid under letters of credit; (c)
leases of real property, equipment or other assets, which leases are capitalized
in Thermo Electron's financial statements in accordance with generally accepted
accounting principles; (d) commitment, standby and other fees due and payable to
financial institutions with respect to credit facilities available to Thermo
Electron; (e) obligations of Thermo Electron under interest rate or currency
swaps, floors, caps or other similar arrangements intended to hedge interest
rates or currency exposure; (f) indebtedness secured by any mortgage, pledge,
lien or other encumbrance on property which is owned or held by Thermo Electron
subject to such mortgage, pledge, lien or encumbrance, whether or not the
indebtedness secured thereby shall have been assumed by Thermo Electron; (g)
obligations of Thermo Electron constituting guarantees of indebtedness of or
joint obligations with another or others which would be included in the
preceding clauses (a), (b), (c), (d), (e) or (f) (including Thermo Electron's
guarantee of the principal of, premium, if any, and interest on the 3 3/4%
Senior Convertible Debentures due 2000 of Thermo Instrument Systems Inc. and the
4 1/2% Senior Convertible Debentures due 2003 of Thermo Instrument Systems
Inc.); and (h) modifications, renewals, extensions or refundings of any of the
indebtedness, leases, fees or obligations referred to in the preceding clauses
(a), (b), (c), (d), (e), (f) or (g) or debentures, notes or other evidences of
indebtedness issued in exchange therefor, provided that Senior Indebtedness
shall not include any particular indebtedness, lease, fee or obligation,
modification, renewal, extension or refunding or exchanged securities if, under
the express provisions of the instrument creating or evidencing the same, or
pursuant to which the same is outstanding, such indebtedness, lease, fee or
obligation or such modification, renewal, extension or refunding thereof or
exchanged securities are stated to be not superior in right of payment to the
Guarantees. Most of Thermo Electron's assets are owned by its subsidiaries.
Thermo Electron's rights as a shareholder and the rights of its creditors,
including holders of the Units, to participate in
29
<PAGE> 35
the assets of any subsidiary upon the latter's liquidation or recapitalization
will be subject to the prior claims of the subsidiary's creditors. At September
28, 1996, the aggregate amount of Senior Indebtedness and indebtedness of
subsidiaries not constituting Senior Indebtedness (but to which the Guarantees
are effectively subordinated) was approximately $503,076,000.
The obligations represented by the Guarantees will rank pari passu with
Thermo Electron's obligations with respect to its outstanding 4 1/4% Convertible
Subordinated Debentures due 2003. In addition, the obligations represented by
the Guarantees will rank pari passu with Thermo Electron's subordinated
guarantees of the principal, premium, if any, and interest on the Non-Interest
Bearing Convertible Subordinated Debentures due 2003 issued by Thermedics Inc.,
the Non-Interest Bearing Convertible Subordinated Debentures due 2001 issued by
Thermo Ecotek Corporation, the 6 1/2% Convertible Subordinated Debentures due
1997 and the 4 5/8% Convertible Subordinated Debentures due 2003 issued by
Thermo Terra Tech Inc., the Non-Interest Bearing Convertible Subordinated
Debentures due 1997 issued by Thermo Cardiosystems Inc., the 3 3/4% Convertible
Subordinated Debentures due 2000 issued by Thermo Voltek Corp., the 4 7/8%
Convertible Subordinated Debentures due 2000 issued by Thermo Remediation Inc.,
the 5% Convertible Subordinated Debentures due 2000 issued by ThermoQuest
Corporation and the 5% Convertible Subordinated Debentures due 2000 issued by
Thermo Optek Corporation. In addition, the obligations represented by the
Guarantees will rank pari passu with Thermo Electron's subordinated guarantees
of the obligations to redeem the common stock of ThermoLyte Corporation and
Thermo Fibergen Inc. The obligation of ThermoLyte Corporation to redeem its
common stock requires ThermoLyte Corporation at the option of the holders to
redeem up to an aggregate of approximately 1,845,000 shares of its common stock
for $10.00 per share at the end of 1998 and 1999. The obligation of Thermo
Fibergen Inc. to redeem its common stock requires Thermo Fibergen at the option
of the holders to redeem up to an aggregate of approximately 4,715,000 shares of
its common stock for $12.75 per share during the months of September 2000 and
September 2001. As of September 28, 1996, the aggregate outstanding principal
amount of the above obligations was approximately $1,102,439,000.
In the event of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
connection herewith, relative to Thermo Electron or to its creditors as such, or
to its property, or in the event of any proceedings for voluntary liquidation,
dissolution or other winding up, of Thermo Electron, or in the event of any
assignment for the benefit of creditors of Thermo Electron or any marshaling of
assets of Thermo Electron, the holders of all Senior Indebtedness of Thermo
Electron will be entitled to receive payment in full of the principal of and
premium, if any, and interest, including interest accruing after the
commencement of any such proceeding, on all Senior Indebtedness of Thermo
Electron, before holders of the Units offered hereby will be entitled to receive
any payment in respect of the Guarantees. Upon the maturity of any Senior
Indebtedness of Thermo Electron by lapse of time, acceleration or otherwise,
such Senior Indebtedness of Thermo Electron shall first be paid in full (to the
same extent as provided in the preceding sentence) or provided for before any
payment is made by Thermo Electron, directly or indirectly, with respect to the
Redemption Rights. Upon the occurrence of any event of default with respect to
any Senior Indebtedness of Thermo Electron, as defined therein or in the
instrument under which it is outstanding, permitting the holders to accelerate
the maturity thereof, then, unless and until such event of default shall have
been cured or waived or shall have ceased to exist, no payment shall be made by
Thermo Electron, directly or indirectly, with respect to the Redemption Rights.
By reason of such subordination, in the event of insolvency, creditors of Thermo
Electron that are not holders of Senior Indebtedness of Thermo Electron may
recover less, ratably, than holders of Senior Indebtedness of Thermo Electron
and may recover more, ratably, than the holders of the Guarantees.
TRANSFER AGENT
The transfer agent for the Common Stock and the Units is American Stock
Transfer & Trust Company.
30
<PAGE> 36
TRANSACTIONS IN SECURITIES
During the 40 business days immediately preceding the date of this Offer to
Exchange, no transactions in the Company's Common Stock were known by the
Company to have been effected by any of the Company, any executive officer and
director of the Company, Thermo Electron, ThermoTrex, any executive officer and
director of Thermo Electron or ThermoTrex, or any associate or subsidiary of any
such person, including any executive officer or director of any such subsidiary.
LEGAL MATTERS
The validity of the Units and the Guarantees to be issued in connection
with the Offer will be passed upon for ThermoLase and Thermo Electron,
respectively, by Seth H. Hoogasian, Esq., General Counsel of the Company,
ThermoTrex and Thermo Electron. Mr. Hoogasian is a full time employee of Thermo
Electron and owns or has the right to acquire 12,800 shares of Common Stock,
7,800 shares of common stock of ThermoTrex and 107,558 shares of common stock of
Thermo Electron.
EXPERTS
The financial statements of the Company and Thermo Electron included or
incorporated by reference in this Offer to Exchange have been audited by Arthur
Andersen LLP, independent public accountants, to the extent and for the periods
as indicated in their reports with respect thereto, and are included or
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports. Reference is made to
said report with respect to Thermo Electron's financial statements which
includes an explanatory fourth paragraph with respect to the change in method of
accounting for investments in debt and marketable equity securities in 1994 as
discussed in Note 2 to the financial statements.
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal, certificates for Shares, certified or official bank checks for
Additional Cash Payments, if applicable, and any other required documents should
be sent to the Exchange Agent as set forth below. Wire transfers constituting
Additional Cash Payments should be sent pursuant to the instructions in the
Letter of Transmittal.
31
<PAGE> 37
The Exchange Agent:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<CAPTION>
By Mail: By Facsimile: By Hand:
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
American Stock Transfer & (718) 234-5001 American Stock Transfer &
Trust Company Trust Company
40 Wall Street Telephone (confirmation 40 Wall Street
New York, New York 10005 only): (212) 936-5100 New York, New York 10005
</TABLE>
If you have any additional questions, or need additional copies of this
Offer to Exchange, the Letter of Transmittal or any other Offer materials,
please contact the Information Agent at its telephone number and address listed
below.
The Information Agent:
NATIONAL WESTMINSTER BANK PLC -- NEW YORK BRANCH
175 Water Street
20th Floor
New York, New York 10038
(212) 602-5609
Attn: Austin Chen
<PAGE> 1
LETTER OF TRANSMITTAL
THERMOLASE CORPORATION
OFFER TO EXCHANGE
ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT
FOR EACH
ONE OUTSTANDING SHARE OF COMMON STOCK PLUS
$3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK)
NO MORE THAN 2,000,000 UNITS WILL BE ISSUED
------------------
REDEMPTION PAYMENTS GUARANTEED ON A SUBORDINATED BASIS
BY THERMO ELECTRON CORPORATION
------------------
- --------------------------------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD
WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON APRIL 2, 1997, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Exchange Agent for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Hand or Overnight
By Mail: By Facsimile Transmission: Courier:
American Stock Transfer & (718) 234-5001 American Stock Transfer &
Trust Company Trust Company
40 Wall Street Telephone (confirmation only) 40 Wall Street
New York, NY 10005 (212) 936-5100 New York, NY 10005
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL OR THE OTHER REQUIRED MATERIALS TO AN
ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A
FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID
DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE
PROVIDED THEREFOR.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE> 2
This Letter of Transmittal is to be completed by holders of shares of
Common Stock, $.01 par value per share (the "Common Stock"), of ThermoLase
Corporation, a Delaware corporation (the "Company"), desiring to tender their
shares of Common Stock (each, a "Share") pursuant to the Offer to Exchange dated
March 6, 1997 (the "Offer to Exchange"). Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Offer to Exchange.
After this Letter of Transmittal has been completed and signed (and the
stockholder's signature hereon is guaranteed if required by Instruction 1), this
Letter of Transmittal (or a facsimile thereof), the Additional Cash Payment, if
applicable, and any other required documents, should be mailed or delivered to
the Exchange Agent, along with the certificates for the tendered Shares ("Share
Certificates"). If any Shares are to be tendered pursuant to the procedure for
book-entry transfer described in the Offer to Exchange, then delivery of such
Shares should be made into the account of American Stock Transfer & Trust
Company, as Exchange Agent (the "Exchange Agent"), at The Depository Trust
Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (each, a
"Book-Entry Transfer Facility" and, collectively, the "Book-Entry Transfer
Facilities"). Shareholders who tender Shares by book-entry transfer are referred
to herein as "Book-Entry Shareholders." DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Pursuant to the Offer to Exchange, tendering shareholders must deliver an
additional payment of $3.00 (the "Additional Payment") for each Share tendered
for exchange. Shareholders may make the Additional Payment by delivery of (i)
cash via a certified or official bank check made payable to the Exchange Agent
or via wire transfer to the Exchange Agent (such cash payment being hereinafter
referred to as the "Additional Cash Payment," and an exchange in which an
Additional Cash Payment is made being hereinafter referred to as a "Share and
Cash Exchange"), or (ii) additional Shares having a value equal to the aggregate
required Additional Payment (the Shares being tendered in satisfaction of the
Additional Payment being hereinafter referred to as the "Additional Share
Payment," and an exchange in which an Additional Share Payment is made being
hereinafter referred to as a "Share Only Exchange"). Shares tendered in
satisfaction of the Additional Share Payment will be valued at $20.25 per share;
accordingly, for each Share tendered for exchange in a Share Only Exchange, the
tendering shareholder will receive .871 Units. No fractional Units will be
issued, and the number of Units issued will be rounded down to the nearest whole
number.
SHAREHOLDERS MAY EITHER MAKE A SHARE AND CASH EXCHANGE OR A SHARE ONLY
EXCHANGE, BUT NOT A COMBINATION THEREOF.
Shareholders whose (i) Share Certificates, (ii) Additional Cash Payments,
if applicable, and (iii) Letter of Transmittal and all other required documents
are not immediately available or cannot be delivered to the Exchange Agent prior
to the Expiration Date (including, with respect to the Shares, pursuant to the
procedures for delivery by book-entry transfer) may tender their Shares,
Additional Cash Payments, if applicable, Letter of Transmittal and other
required documents according to the guaranteed delivery procedures set forth in
the Offer to Exchange. See Instruction 2.
2
<PAGE> 3
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S))
<C> <S>
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
=================================================================================================================================
I. DESCRIPTION OF SHARES AND ADDITIONAL PAYMENTS TENDERED
- ---------------------------------------------------------------------------------------------------------------------------------
SHARES CERTIFICATE(S) AND SHARE(S) TENDERED
(ATTACH ADDITIONAL SIGNED LIST, IF NECESSARY).
SEE INSTRUCTION 3.
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(A) (B) (C) (D) (E)
TOTAL NUMBER
OF SHARES
REPRESENTED
BY SHARE
CERTIFICATE(S) OR AMOUNT OF
SHARE DELIVERED BY NUMBER OF ADDITIONAL CASH
CERTIFICATE BOOK-ENTRY SHARES PAYMENT NUMBER OF UNITS
NUMBER(S)* TRANSFER TENDERED+ TENDERED++ REQUESTED+++
------------------------------------------------------------------------------------------------------------------------------
$
------------------------------------------------------------------------------------------------------------------------------
$
------------------------------------------------------------------------------------------------------------------------------
$
------------------------------------------------------------------------------------------------------------------------------
$
------------------------------------------------------------------------------------------------------------------------------
Total $
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Shareholders.
+ If less than the full number of Shares evidenced by a submitted
certificate are to be tendered, the tendering shareholder should indicate
the number of Shares being tendered. If no indication is given, all Shares
represented by such certificate will be deemed to have been tendered.
++ Additional Cash Payment to be made only in a Share and Cash Exchange. In
the event that a shareholder desires to make a Share and Cash Exchange but
such stockholder's Additional Cash Payment is insufficient with respect to
the number of Shares designated or would result in the tendering of a
fractional share, the number of Shares deemed tendered shall be the
maximum number which may be tendered based on the Additional Cash Payment
actually received. In the event that no Additional Cash Payment is
designated in column (D), the tendering shareholder will be deemed to have
made a Share Only Exchange.
+++ Equals one Unit for every Share plus $3.00 cash tendered in a Share and
Cash Exchange or .871 Units for every Share tendered in a Share Only
Exchange, rounded down to the nearest whole number of Units. The actual
issuance of Units is subject to the terms and conditions set forth in the
Offer to Exchange.
Shareholders may either make a Share and Cash Exchange or a Share Only
Exchange, but not a combination thereof.
================================================================================
3
<PAGE> 4
- --------------------------------------------------------------------------------
II. ADDITIONAL CASH PAYMENT
- --------------------------------------------------------------------------------
Additional Cash Payment Tendered: (TOTAL OF AMOUNT SET FORTH IN COLUMN (D) IN
TABLE I) $___________
Payment made via (check appropriate box):
[ ] Certified or official bank check made payable to the Exchange
Agent (check must be enclosed); or
[ ] Wire transfer to the Exchange Agent pursuant to the following
wire instructions:
Chase Manhattan Bank
55 Water Street
New York, NY 10041
Account No.: 323212069
ABA No.: 021000021
For the benefit of ThermoLase Corporation
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution:_______________________________________________
Check box of applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
<TABLE>
<S> <C>
Account Number: _____________________ Transaction Code Number:______________________
</TABLE>
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING
(PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):
Name(s) of Registered Holder(s):_____________________________________________
Window Ticket Number (if any):_______________________________________________
Date of Execution of Notice of Guaranteed Delivery:__________________________
Name of Institution that Guaranteed Delivery:________________________________
If delivered by Book-Entry Transfer, check box of applicable Book-Entry
Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
<TABLE>
<S> <C>
Account Number: _____________________ Transaction Code Number:______________________
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
4
<PAGE> 5
LADIES AND GENTLEMEN:
The undersigned hereby tenders to ThermoLase Corporation, a Delaware
corporation (the "Company"), the above-described Shares and, if applicable,
Additional Cash Payments pursuant to and on the terms and conditions set forth
in the Company's Offer to Exchange dated March 6, 1997 and in this Letter of
Transmittal (which, together with any amendments or supplements thereto or
hereto, collectively constitute the "Offer"), receipt of each of which is hereby
acknowledged.
Subject to, and effective upon, acceptance for exchange of the Shares and,
if applicable, Additional Cash Payments tendered herewith in accordance with the
terms and subject to the conditions of the Offer, including, if the Offer is
extended or amended, the terms and conditions of any such extension or
amendment, the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Company all right, title and interest in and to all of the Shares
and Additional Cash Payments that are being tendered hereby and irrevocably
appoints the Exchange Agent the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Shares and, if applicable, Additional Cash
Payments with full power of substitution (such power of attorney being deemed to
be an irrevocable power coupled with an interest) to (a) deliver Share
Certificates for such Shares, or transfer ownership of such Shares on the
account books maintained by a Book-Entry Transfer Facility, together in either
case with appropriate evidences of transfer and authenticity, to, or upon the
order of, the Company, upon receipt by the Exchange Agent, as the undersigned's
agent, of the Units to be exchanged for such Shares and, if applicable,
Additional Cash Payments; (b) present such Shares for transfer on the books of
the Company and (c) deliver the Additional Cash Payment, if applicable, to the
Company, all in accordance with the terms and subject to the conditions of the
Offer.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and, if
applicable, the Additional Cash Payment tendered hereby and (b) when such Shares
and Additional Cash Payment are accepted for exchange by the Company, the
Company will acquire good, marketable and unencumbered title to such Shares and
Additional Cash Payment, free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver any additional documents
deemed by the Exchange Agent or the Company to be necessary or desirable to
complete the sale, assignment and transfer of the Shares and, if applicable,
Additional Cash Payment tendered hereby.
No authority herein conferred or agreed to be conferred shall be affected
by, and all authority herein conferred or agreed to be conferred shall survive,
the death or incapacity of the undersigned and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
Except as otherwise provided in the Offer to Exchange, tenders of Shares
and, if applicable, Additional Cash Payments made pursuant to the Offer are
irrevocable. Shares and Additional Cash Payments tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment by the Company pursuant to the Offer, may also
be withdrawn at any time after April 30, 1997.
The undersigned understands that tenders of Shares and, if applicable,
Additional Cash Payments pursuant to any of the procedures described in the
Offer to Exchange and in the Instructions hereto will constitute the
undersigned's acceptance of the terms and conditions of the Offer. The Company's
acceptance of such Shares and, if applicable, Additional Cash Payments for
exchange will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions set forth in the Offer.
The undersigned understands that, under certain circumstances set forth in
the Offer to Exchange, the Company may terminate or amend the Offer and may not
be required to accept for exchange any of the tendered Shares or Additional Cash
Payments.
5
<PAGE> 6
Unless otherwise indicated herein under "Special Exchange Instructions,"
the undersigned hereby instructs the Exchange Agent to issue the Units in
exchange for all tendered Shares and, if applicable, Additional Cash Payments
accepted for exchange and issue or return any Share Certificate(s) for Shares
not tendered and any Shares and, if applicable, Additional Cash Payments not
exchanged in the name(s) of the registered holder(s) appearing under
"Description of Shares and Additional Payments Tendered." In addition, unless
otherwise indicated herein under "Special Delivery Instructions," the
undersigned hereby instructs the Exchange Agent to mail the Units issued in
exchange for all tendered Shares and, if applicable, Additional Cash Payments
accepted for exchange and return any Share Certificate(s) for Shares not
tendered and any Shares and, if applicable, Additional Cash Payments not
exchanged (and accompanying other documents, as appropriate) to the address of
the registered holder(s) appearing under "Description of Shares and Additional
Payments Tendered."
In the event that both the "Special Delivery Instructions" and the "Special
Exchange Instructions" boxes are completed, the undersigned hereby instructs the
Exchange Agent to issue the Units issued in exchange for all tendered Shares
and, if applicable, Additional Cash Payments accepted for exchange and return
any Share Certificate(s) for Shares not tendered and any Shares and, if
applicable, Additional Cash Payments not exchanged in the name(s) of, and
deliver such Units and return such Share Certificate(s) and any Additional Cash
Payment to, the person(s) so indicated, as applicable. Unless otherwise
indicated herein under "Special Exchange Instructions," the undersigned hereby
instructs the Exchange Agent to credit any Shares tendered herewith by
book-entry transfer that are not exchanged by crediting the account at the
Book-Entry Transfer Facility designated above. The undersigned recognizes that
the Company has no obligation pursuant to the "Special Exchange Instructions" to
transfer any Shares or Additional Cash Payments from the name(s) of the
registered holder(s) thereof if the Company does not accept for exchange any of
the tendered Shares and, if applicable, Additional Cash Payments tendered
hereby.
6
<PAGE> 7
- -------------------------------------------------------------------------------
SPECIAL EXCHANGE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6, AND 7)
To be completed ONLY if Share Certificate(s) evidencing Shares not
tendered or Shares not exchanged or the Units to be issued in exchange for
tendered Shares and, if applicable, Additional Cash Payments accepted for
exchange are to be issued in the name of someone other than the registered
holder(s) shown above or if Shares tendered by book-entry transfer which
are not exchanged are to be returned by credit to any account maintained
at a Book-Entry Transfer Facility other than the account indicated above.
Issue: [ ] Certificates for Shares not tendered for exchange or Shares
not exchanged to:
[ ] Units to:
Name:___________________________________________________________________
(PLEASE PRINT)
Address:________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
Credit Shares tendered by book-entry transfer that are not exchanged to
(Check one):
Name of Tendering Institution:
[ ] DTC [ ] PDTC (check one)
Account No.:___________________________________________________________
Transaction Code No.:__________________________________________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificate(s) evidencing Shares not
tendered or Shares not exchanged or the Unites to be issued in exchange
for tendered Shares and, if applicable, Additional Cash Payments accepted
for exchange are to be sent to someone other than the registered holder(s)
shown above or to the registered holder(s) shown above at an address other
than that shown above.
Mail: [ ] Certificates for Shares not tendered for exchange or Shares not
exchanged to:
[ ] Units to:
Name:___________________________________________________________________
(PLEASE PRINT)
Address:________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
- -------------------------------------------------------------------------------
7
<PAGE> 8
- -------------------------------------------------------------------------------
IMPORTANT
SIGN HERE
X______________________________________________________________________________
X______________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated:______________________ , 1997
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information.
See Instruction 5.)
Name(s):________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title):__________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number:_________________________________________________
Tax Identification or Social Security No.:______________________________________
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:___________________________________________________________
Name:___________________________________________________________________________
(PLEASE PRINT)
Title:__________________________________________________________________________
Name of Firm:___________________________________________________________________
(PLEASE PRINT)
Address:________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ( )_______________________________________
Dated:_____________________ , 1997
- -------------------------------------------------------------------------------
8
<PAGE> 9
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears on
a security position listing as the owner of Share(s) tendered herewith, unless
such holder(s) has (have) completed either the box entitled "Special Exchange
Instructions" or the box entitled "Special Delivery Instructions," or (b) if
such Share(s) is (are) tendered for the account of a firm which is identified in
Rule 17Ad-15 under the Exchange Act including (as such terms are defined
therein): (i) a bank; (ii) a broker, dealer, municipal securities dealer,
municipal securities broker, government securities dealer or government
securities broker; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) savings institution
that is a participant in a Securities Transfer Association recognized program
(each of the foregoing being referred to as an "Eligible Institution"). In all
other cases, all signatures on this Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal, Certificates and Additional Cash
Payments. This Letter of Transmittal is to be completed by holders of shares of
Common Stock of the Company desiring to tender their Shares pursuant to the
Offer to Exchange regardless of whether (i) Share Certificates are to be
forwarded herewith or (ii) delivery of Shares is to be made by book-entry
transfer pursuant to the procedures set forth in the Offer to Exchange.
In order for Shares and, if applicable, Additional Cash Payments to be
validly tendered pursuant to the Offer, (i) this Letter of Transmittal (or a
facsimile hereof), properly completed and duly executed, together with any
required signature guarantees, Share Certificates evidencing all tendered
Shares, the Additional Cash Payment, if applicable, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth on the front cover hereof prior to the Expiration Date
(provided that in lieu of delivery of such Share Certificates, the Shares may be
tendered by book-entry transfer, provided that a timely confirmation of such
book-entry transfer (a "Book-Entry Confirmation") is received by the Exchange
Agent at such address prior to the Expiration Date) or (ii) the guaranteed
delivery procedures described in the following paragraph must be complied with.
Shareholders whose Share Certificates (or book-entry transfer), Additional
Cash Payments, if applicable, and all other required documents are not
immediately available or who cannot deliver their Share Certificates, Additional
Cash Payments, if applicable, Letter of Transmittal and all other required
documents to the Exchange Agent prior to the Expiration Date may tender their
Shares, Additional Cash Payments, if applicable, Letter of Transmittal and all
other required documents by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in
the Offer to Exchange. Pursuant to such procedure: (i) such tender must be made
by or through a member firm of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc., or by or through
a commercial bank or trust company having an office or correspondent in the
United States; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery must be received by the Exchange Agent prior to the Expiration Date;
and (iii) the Share Certificates (or a book-entry confirmation) evidencing all
tendered Shares in proper form for transfer, and if applicable, the Additional
Cash Payment, in each case together with this Letter of Transmittal (or a
facsimile hereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent within three American Stock
Exchange trading days after the date of the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES,
ADDITIONAL CASH PAYMENTS, IF APPLICABLE, AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY OF SHARES THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE
SOLE OPTION AND RISK OF THE TENDERING SHAREHOLDER AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
9
<PAGE> 10
No alternative, conditional or contingent tenders will be accepted. All
tendering shareholders, by execution of this Letter of Transmittal (or a
facsimile hereof), waive any right to receive any notice of the acceptance of
their tendered Shares and, if applicable, Additional Cash Payments for exchange.
3. Inadequate Space. If the space provided herein is inadequate,
information should be listed on a separate signed schedule attached hereto and
referenced in the box entitled "Description of Shares and Additional Payments
Tendered."
4. Partial Tenders. (Not Applicable to Book-Entry Shareholders.) If fewer
than all the Shares evidenced by any Share Certificate submitted to the Exchange
Agent herewith are to be tendered, fill in the number of Shares which are to be
tendered in the boxes entitled "Number of Shares Tendered." In such cases, new
Share Certificate(s) evidencing the Shares that were evidenced by the Share
Certificate(s) delivered to the Exchange Agent herewith, but which were not
tendered hereby, will be sent to the registered holder(s) shown above, unless
otherwise provided in the box entitled "Special Delivery Instructions," as soon
as practicable after the expiration or termination of the Offer. All Shares
represented by Share Certificates delivered to the Exchange Agent will be deemed
to have been tendered unless otherwise indicated. In the event that a
shareholder desires to make a Share and Cash Exchange but such shareholder's
Additional Cash Payment is insufficient with respect to the number of Shares
designated or would result in the tendering of a fractional share, the number of
Shares deemed tendered shall be the maximum number which may be tendered based
on the Additional Cash Payment actually received.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of Share
Certificates.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Company of such person's authority so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and tendered hereby, no endorsements of Share Certificates or
separate stock powers are required, unless the issuance of Units in exchange
therefor is to be made to, or certificates evidencing Shares not tendered or
Share Certificates evidencing Shares not exchanged are to be issued in the name
of, a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered must be endorsed or accompanied by
appropriate stock powers signed exactly as the name(s) of the registered
holder(s) appear(s) on such Share Certificate(s). Signatures on such Share
Certificate(s) or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Share Certificate(s) listed and tendered hereby, the
Share Certificate(s) must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear on such Share Certificate(s). Signature(s) on such Share Certificate(s)
and stock powers must be guaranteed by an Eligible Institution.
6. Transfer Taxes. Except as set forth in this Instruction 6, the Company
will pay or cause to be paid any transfer taxes with respect to the transfer and
sale of Shares to it pursuant to the Offer. If, however, Units in exchange for
Shares and, if applicable, Additional Cash Payments accepted for exchange are to
be issued to, or if Share Certificate(s) evidencing Shares not tendered or
Shares not exchanged are to be issued in the name of, any person other than the
registered holder(s), or if tendered Share Certificates are registered in the
name of any person other than the person(s) signing this Letter of Transmittal,
then the amount of any transfer taxes (whether imposed on the registered
holder(s) or such person or otherwise) payable on account of the transfer to
such other person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or an exemption therefrom, is submitted.
EXCEPT AS SET FORTH IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S) TENDERED HEREBY.
10
<PAGE> 11
7. Special Exchange and Delivery Instructions. If Units issued in exchange
for tendered Shares and, if applicable, Additional Cash Payments accepted for
exchange are to be issued in the name of, or Share Certificate(s) evidencing
Shares not tendered or Shares not exchanged are to be issued or returned to, a
person other than the registered holder or if Units or such Share Certificate(s)
are to be returned to a person other than the signer of this Letter of
Transmittal or to an address of the signer other than that shown in this Letter
of Transmittal, the appropriate boxes on this Letter of Transmittal must be
completed. Book-Entry Shareholders may request that Shares not accepted for
exchange be credited to such account maintained at a Book-Entry Transfer
Facility as such Book-Entry Stockholder may designate in the box entitled
"Special Exchange Instructions." If no such instructions are given, such Shares
will be returned by crediting the account at the Book-Entry Transfer Facility
designated above.
8. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance, as well as requests for additional copies of the
Offer to Exchange, this Letter of Transmittal and all other exchange offer
materials, may be directed to the Information Agent for the Offer at its address
and telephone number set forth below. Additional copies of the Offer to
Exchange, this Letter of Transmittal and all other exchange offer materials may
also be obtained from brokers, dealers, banks or trust companies at the
Company's expense.
The Information Agent: National Westminster Bank Plc -- New York Branch
175 Water Street, 20th Floor
New York, New York 10038
(212) 602-5609
Attention: Austin Chen
(Call Collect)
9. Lost, Destroyed or Stolen Certificates. If any Share Certificate has
been lost, destroyed or stolen, the shareholder should promptly notify the
Exchange Agent. The shareholder will then be instructed as to the steps that
must be taken in order to replace such Share Certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Share Certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF
BOOK-ENTRY TRANSFER, ANY RELATED ADDITIONAL CASH PAYMENT, IF APPLICABLE, AND ALL
OTHER REQUIRED DOCUMENTS, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY, MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE
EXPIRATION DATE.
11
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF SHARES AND, IF APPLICABLE, ADDITIONAL CASH PAYMENTS
OF
THERMOLASE CORPORATION
As set forth in the Offer to Exchange of ThermoLase Corporation, a Delaware
corporation (the "Company"), described below, this Notice of Guaranteed Delivery
or one substantially in the form hereof must be used to tender Shares and, if
applicable, Additional Cash Payments, pursuant to the Offer (as defined below)
if a shareholder is unable to deliver (i) all necessary stock certificates
evidencing all Shares in proper form for transfer (or to comply with the
procedure for book-entry transfer of such Shares), (ii) the Additional Cash
Payment, if applicable, and (iii) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees and all other required documents to the Exchange Agent prior to the
Expiration Date. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings ascribed to such terms in the Company's Offer
to Exchange dated March 6, 1997 (the "Offer to Exchange").
This instrument may be delivered by hand or transmitted by facsimile
transmission, overnight courier or mail to the Exchange Agent.
The Exchange Agent for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<CAPTION>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
<S> <C> <C>
American Stock Transfer (718) 234-5001 American Stock Transfer
& Trust Company & Trust Company
40 Wall Street 40 Wall Street
New York, NY 10005 Telephone (confirmation only): New York, NY 10005
(212) 936-5100
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box in the Letter of Transmittal.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to ThermoLase Corporation, a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer to Exchange dated March 6, 1997 (the "Offer to Exchange") and
in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"), receipt of each of
which is hereby acknowledged, the number of Shares and the amount of the
Additional Cash Payment, if applicable, indicated below pursuant to the
guaranteed delivery procedures set forth in the Offer to Exchange.
Signature(s):________________________________________________________________
Name(s) of Record Holders:___________________________________________________
_____________________________________________________________________________
Please Type or Print
Address:_____________________________________________________________________
_____________________________________________________________________________
Zip Code
Area Code and Tel.
No. (s):_____________________________________________________________________
- -------------------------------------------------------------------------------
I. Number of Shares to be tendered:_______________________________________
II. Amount of cash to be Tendered in satisfaction
of the Additional Cash Payment*:_______________________________________
III. Number of Units requested**:___________________________________________
Dated:____________________________ ,1997
- -------------------------------------------------------------------------------
* Additional Cash Payment to be made only in a Share and Cash Exchange. In the
event that a shareholder desires to make a Share and Cash Exchange but such
shareholder's Additional Cash Payment is insufficient with respect to the
number of Shares designated or would result in the tendering of a fractional
share, the number of Shares deemed tendered shall be the maximum number which
may be tendered based on the Additional Cash Payment actually received. In
the event that no Additional Cash Payment is designated, a Share Only
Exchange will be deemed to be made.
** Equals one Unit for every Share plus $3.00 cash tendered in a Share and Cash
Exchange and .871 Units for every Share tendered in a Share Only Exchange,
rounded down to the nearest whole number of Units. The actual issuance of
Units is subject to the terms and conditions set forth in the Offer to
Exchange.
Shareholders may either make a Share and Cash Exchange or a Share Only
Exchange, but not a combination thereof.
- -------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm which is a member firm of a registered
national securities exchange, or a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States, hereby guarantees to deliver
to the Exchange Agent (i) all necessary stock certificates evidencing all
Shares in proper form for transfer (or to confirm the book-entry transfer
of such Shares into the Exchange Agent's account at The Depository Trust
Company or the Philadelphia Depository Trust Company), (ii) the Additional
Cash Payment, if applicable, and (iii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any
required signature guarantees and all other required documents, all within
three American Stock Exchange trading days after the date hereof.
<TABLE>
<S> <C>
---------------------------------------------------------- ----------------------------------------------------------
Name of Firm Authorized Signature
---------------------------------------------------------- ----------------------------------------------------------
Address Name
---------------------------------------------------------- ----------------------------------------------------------
Zip Code Title
Dated: ----------------------------------------, 1997
----------------------------------------------------------
Area Code and Telephone No.
</TABLE>
NOTE: DO NOT SEND CERTIFICATES OR CASH PAYMENTS WITH THIS NOTICE OF
GUARANTEED DELIVERY. CERTIFICATES AND CASH PAYMENTS SHOULD BE SENT WITH
YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
NATIONAL WESTMINSTER BANK PLC --
NEW YORK BRANCH
175 WATER STREET, 20TH FLOOR
NEW YORK, NEW YORK 10038
THERMOLASE CORPORATION
OFFER TO EXCHANGE
ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT
FOR EACH
ONE OUTSTANDING SHARE OF COMMON STOCK PLUS
$3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK)
NO MORE THAN 2,000,000 UNITS WILL BE ISSUED
------------------
REDEMPTION PAYMENTS GUARANTEED ON A SUBORDINATED BASIS
BY THERMO ELECTRON CORPORATION
------------------
- -------------------------------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON APRIL 2, 1997, UNLESS THE OFFER IS
EXTENDED.
- -------------------------------------------------------------------------------
March 6, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by ThermoLase Corporation, a Delaware corporation
(the "Company"), to act as Information Agent in connection with the Company's
offer to exchange one unit (a "Unit") consisting of one share of Common Stock,
$0.01 par value per share, of the Company (the "Common Stock") and one
redemption right (each, a "Redemption Right") for each outstanding share of
Common Stock (each, a "Share"), plus an additional payment of $3.00 (the
"Additional Payment"), validly tendered and accepted for exchange upon the terms
and subject to the conditions set forth in the Offer to Exchange dated March 6,
1997 (the "Offer to Exchange") and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") enclosed herewith. The Additional Payment may be made either (i) in
cash (such cash payment being hereinafter referred to as the "Additional Cash
Payment," and an exchange in which an Additional Cash Payment is made being
referred to herein as a "Share and Cash Exchange") or (ii) by delivery to the
Company of additional Shares having a value equal to the aggregate required
Additional Payment (the Shares being tendered in satisfaction of the Additional
Payment being hereinafter referred to as the "Additional Share Payment," and an
exchange in which an Additional Share Payment is made being hereinafter referred
to as "Share Only Exchange"). Shares tendered in satisfaction of the Additional
Share Payment will be valued at $20.25 per share; accordingly, for each Share
tendered for exchange in a Share Only Exchange, the tendering shareholder will
receive .871 Units. No fractional Units will be issued, and the number of Units
issued will be rounded down to the nearest whole number. Shareholders may either
make a Share and Cash Exchange or a Share Only Exchange, but not a combination
thereof.
No more than 2,000,000 Units will be issued. If the number of Shares and,
if applicable, Additional Cash Payments validly tendered pursuant to the Offer
and not withdrawn prior to the Expiration Date would result in the issuance of
more than 2,000,000 Units, acceptances will be cut back pro rata (with
adjustments to avoid issuance of fractional Units) based on the total number of
Units that would have been issued to such tendering shareholders if no such
cutback had been made.
Each Redemption Right will entitle the holder thereof to sell the related
share of Common Stock to the Company for $20.25 per share during the first 20
business days after the fourth anniversary of the Expiration Date (as defined in
the Offer to Exchange). The Redemption Right will not detach or trade separately
from the related share of Common Stock (but instead will trade together with the
related share of Common Stock as a Unit) and will expire and become worthless if
the closing price of the Company's Common Stock is at least $26.00 for 20 of any
30 consecutive trading days after the Expiration Date. In the event of the
expiration of the Redemption Right, each Unit will automatically become, and
will trade as, one share of Common Stock. The Company's obligations under the
Redemption Rights will be guaranteed on a subordinated basis by Thermo Electron
Corporation, the Company's ultimate parent corporation.
THE OFFER IS SUBJECT TO CERTAIN CONDITIONS, INCLUDING THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
<PAGE> 2
SHARES AND, IF APPLICABLE, RELATED ADDITIONAL CASH PAYMENTS AS WOULD RESULT IN
THE ISSUANCE OF AT LEAST 500,000 UNITS, AND THE LISTING OF THE UNITS ON THE
AMERICAN STOCK EXCHANGE, SUBJECT TO OFFICIAL NOTICE OF ISSUANCE.
Enclosed for your information and for forwarding to your clients for whose
accounts you hold shares of Common Stock registered in your name or in the name
of your nominees are copies of the following documents:
1. The Offer to Exchange dated March 6, 1997.
2. The green Letter of Transmittal to tender Shares and, if applicable,
Additional Cash Payments (for your use and for the information of your
clients).
3. The yellow Notice of Guaranteed Delivery for tendering Shares and, if
applicable, Additional Cash Payments (to be used to accept the Offer if
(i) all necessary stock certificates evidencing Shares (collectively,
"Share Certificates") (or written confirmation of the book-entry
transfer of such Shares), (ii) a certified or official bank check made
payable to American Stock Transfer & Trust Company (the "Exchange
Agent") or a wire transfer in the amount of the Additional Cash Payment,
if applicable, and (iii) a properly completed and duly executed Letter
of Transmittal (or a facsimile thereof) and all other required documents
cannot be delivered to the Exchange Agent prior to the Expiration Date.
4. A gray printed form of letter which may be sent to your clients for
whose accounts you hold shares of Common Stock registered in your name
or in the name of your nominees, with space provided for obtaining such
clients' instructions with regard to the Offer.
5. A return envelope addressed to the Exchange Agent.
YOUR PROMPT ACTION IS REQUESTED. BECAUSE THE OFFER, WITHDRAWAL RIGHTS AND
PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 2,
1997, UNLESS THE OFFER IS EXTENDED, YOU SHOULD CONTACT YOUR CLIENTS AS PROMPTLY
AS POSSIBLE.
In all cases, delivery of Units in exchange for Shares and, if applicable,
Additional Cash Payments tendered and accepted for exchange pursuant to the
Offer will be made only after timely receipt by the Exchange Agent of (i)
certificates representing tendered Shares or timely confirmation of a book-entry
transfer of such Shares into the Exchange Agent's account at one of the
Book-Entry Transfer Facilities (as defined in the Offer to Exchange) pursuant to
the procedures set forth in the Offer to Exchange, (ii) a certified or official
bank check made payable to the Exchange Agent or wire transfer in the amount of
the Additional Cash Payment, if applicable, and (iii) a properly completed and
duly executed Letter of Transmittal (or a facsimile thereof) and any other
documents required by the Letter of Transmittal.
If a shareholder desires to tender Shares and, if applicable, the
Additional Cash Payment pursuant to the Offer and such shareholder cannot
deliver his Share Certificates (or confirmation of a book-entry transfer
thereof), Additional Cash Payment, if applicable, Letter of Transmittal and all
other required documents to reach the Exchange Agent prior to the Expiration
Date, such Shares, Additional Cash Payment, Letter of Transmittal and other
required documents may nevertheless be tendered by following the guaranteed
delivery procedures specified in the Offer to Exchange.
No fees or commissions will be paid to brokers, dealers or any other
persons for soliciting tenders of Shares and, if applicable, Additional Cash
Payments pursuant to the Offer. The Company will, however, upon request,
reimburse you for reasonable out-of-pocket expenses incurred by you in
forwarding any of the enclosed materials to your clients.
The Company will pay or cause to be paid all transfer taxes, if any,
applicable to the transfer and sale of Shares to it pursuant to the Offer,
except as otherwise provided in the Letter of Transmittal.
Questions and requests for assistance or for additional copies of the
enclosed materials may be directed to the Information Agent or the Exchange
Agent, at their respective addresses and telephone numbers set forth on the back
cover of the Offer to Exchange.
Very truly yours,
National Westminster Bank Plc --
New York Branch
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THERMO ELECTRON, THE INFORMATION
AGENT, THE EXCHANGE AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF
THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
THERMOLASE CORPORATION
OFFER TO EXCHANGE
ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT
FOR EACH
ONE OUTSTANDING SHARE OF COMMON STOCK PLUS
$3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK)
NO MORE THAN 2,000,000 UNITS WILL BE ISSUED
------------------
REDEMPTION PAYMENTS GUARANTEED ON A SUBORDINATED BASIS
BY THERMO ELECTRON CORPORATION
------------------
- -------------------------------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON APRIL 2, 1997, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration is an Offer to Exchange dated March 6, 1997
(the "Offer to Exchange") and the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the "Offer")
relating to an offer by ThermoLase Corporation, a Delaware corporation (the
"Company"), to exchange one unit (a "Unit") consisting of one share of Common
Stock, $0.01 par value per share, of the Company (the "Common Stock") and one
redemption right (each, a "Redemption Right") for each outstanding share of
Common Stock (each, a "Share"), plus an additional payment of $3.00 (the
"Additional Payment"), validly tendered and accepted for exchange in the Offer.
The Additional Payment may be made either (i) in cash (such cash payment being
hereinafter referred to as the "Additional Cash Payment," and an exchange in
which an Additional Cash Payment is made being hereinafter referred to as a
"Share and Cash Exchange"), or (ii) by delivery to the Company of additional
Shares having a value equal to the aggregate required Additional Payment (the
Shares being tendered in satisfaction of the Additional Payment being
hereinafter referred to as the "Additional Share Payment," and an exchange in
which an Additional Share Payment is made being hereinafter referred to as a
"Share Only Exchange"). Shares tendered in satisfaction of the Additional Share
Payment will be valued at $20.25 per share; accordingly, for each Share tendered
for exchange in a Share Only Exchange, the tendering shareholder will receive
.871 Units. No fractional Units will be issued, and the number of Units issued
will be rounded down to the nearest whole number. Shareholders may either make a
Share and Cash Exchange or a Share Only Exchange, but not a combination thereof.
No more than 2,000,000 Units will be issued. If the number of Shares and,
if applicable, Additional Cash Payments validly tendered pursuant to the Offer
and not withdrawn prior to the Expiration Date would result in the issuance of
more than 2,000,000 Units, acceptances will be cut back pro rata (with
adjustments to avoid issuance of fractional Units) based on the total number of
Units that would have been issued to such tendering shareholders if no such
cutback had been made.
Each Redemption Right will entitle the holder thereof to sell the related
share of Common Stock to the Company for $20.25 per share during the first 20
business days after the fourth anniversary of the Expiration Date. The
Redemption Right will not detach or trade separately from the related share of
Common Stock (but instead will trade together with the related share of Common
Stock as a Unit) and will expire and become worthless if the closing price of
the Company's Common Stock is at least $26.00 for 20 of any 30 consecutive
trading days after the Expiration Date (as defined in the Offer to Exchange). In
the event of the expiration of the Redemption Right, each Unit will
automatically become, and will trade as, one share of Common Stock. The
Company's obligations under the Redemption Rights will be guaranteed on a
subordinated basis by Thermo Electron Corporation, the Company's ultimate parent
corporation.
We are the holder of record of shares of Common Stock held by us for your
account. A TENDER OF SUCH SHARES OF COMMON STOCK CAN BE MADE ONLY BY US AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES OF COMMON STOCK HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the shares of Common Stock held by us for your account,
pursuant to the terms and subject to the conditions set forth in the Offer.
<PAGE> 2
Your attention is directed to the following:
1. The Offer is to exchange one Unit, consisting of one share of Common
Stock and one Redemption Right, for each one outstanding share of Common
Stock plus an additional payment of $3.00, payable either in cash or in
additional shares of Common Stock, but not a combination thereof.
2. The Offer, withdrawal rights and proration period will expire at 12:00
midnight, New York City time, on April 2, 1997, unless the Offer is
extended.
3. No more than 2,000,000 Units will be issued.
4. The Offer is subject to certain conditions, including there being
validly tendered and not withdrawn prior to the expiration of the Offer
such number of Shares and, if applicable, related Additional Cash
Payments as would result in the issuance of at least 500,000 Units, and
the listing of the Units on the American Stock Exchange, subject to
official notice of issuance.
5. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the exchange of Shares and, if
applicable, Additional Cash Payments pursuant to the Offer.
6. In all cases, delivery of Units in exchange for Shares and, if
applicable, Additional Cash Payments tendered and accepted for exchange
pursuant to the Offer will be made only after timely receipt by American
Stock Transfer & Trust Company (the "Exchange Agent") of (i)
certificates representing tendered Shares, or timely confirmation of a
book-entry transfer of such Shares into the Exchange Agent's account at
one of the Book Entry Transfer Facilities (as defined in the Offer to
Exchange) pursuant to the procedures set forth in the Offer to Exchange,
(ii) a certified or official bank check made payable to the Exchange
Agent or wire transfer in the amount of the Additional Cash Payment, if
applicable, and (iii) a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), and any other documents required
by the Letter of Transmittal.
The Offer is being made solely by the Offer to Exchange and the related
Letter of Transmittal and is being made to all holders of shares of Common
Stock. The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of shares of Common Stock in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the laws of such jurisdiction.
If you wish to have us tender any or all of the shares of Common Stock held
by us for your account, please instruct us by completing, executing and
returning to us the instruction form contained in this letter. If you authorize
a tender of your shares of Common Stock, all such shares of Common Stock will be
tendered unless otherwise specified in such instruction form.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO EXCHANGE
ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT
FOR EACH
ONE OUTSTANDING SHARE OF COMMON STOCK PLUS
$3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK)
OF
THERMOLASE CORPORATION
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Exchange dated March 6, 1997 (the "Offer to Exchange") and the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") pursuant to an offer by ThermoLase
Corporation, a Delaware corporation, to exchange one unit (a "Unit") consisting
of one share of Common Stock, $0.01 par value per share, of the Company (the
"Common Stock") and one redemption right (each, a "Redemption Right") for each
outstanding share of Common Stock (each, a "Share"), plus an additional payment
of $3.00 (the "Additional Payment"), payable either (i) in cash (such payment
being hereinafter referred to as the "Additional Cash Payment," and an exchange
in which an Additional Cash Payment is made being hereinafter referred to as a
"Share and Cash Exchange") or (ii) in additional shares of Common Stock (the
Shares tendered in satisfaction of the Additional Payment being hereinafter
referred to as the "Additional Share Payment," and an exchange in which an
Additional Share Payment is made being hereinafter referred to as a "Share Only
Exchange") validly tendered and accepted for exchange in the Offer. Shares
tendered in satisfaction of the Additional Share Payment are valued at $20.25
per share; accordingly, for each Share tendered for exchange in a Share Only
Exchange, the tendering shareholder will receive .871 Units. Capitalized terms
used herein and not otherwise defined shall have the respective meanings
ascribed to such terms in the Offer to Exchange.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
- -------------------------------------------------------------------------------
I. Number of Shares to be Tendered*:____________________________________
II. Amount of cash enclosed herewith in satisfaction of the Additional
Cash Payment**:______________________________________________________
Payment made via (check appropriate box):
[ ] Certified or official bank check made payable to the Exchange
Agent and enclosed herewith.
[ ] Wire transfer pursuant to the instructions contained in the
Letter of Transmittal.
III. Number of Units requested***:________________________________________
Dated: ____________, 1997
- -------------------------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all of the shares of
Common Stock held by us for your account are to be tendered.
** Additional Cash Payment to be made only in a Share and Cash Exchange. In the
event that you desire to make a Share and Cash Exchange but your Additional
Cash Payment is insufficient with respect to the number of Shares designated
or would result in the tendering of a fractional share, the number of Shares
deemed tendered shall be the maximum number which may be tendered based on
the Additional Cash Payment actually received. In the event that no
Additional Cash Payment is designated, you will be deemed to have made a
Share Only Exchange.
*** Equals one Unit for every Share plus $3.00 cash tendered in a Share and Cash
Exchange and .871 Units for every Share tendered in a Share Only Exchange,
rounded down to the nearest whole number of Units. The actual issuance of
Units is subject to the terms and conditions set forth in the Offer to
Exchange.
SHAREHOLDERS MAY EITHER MAKE A SHARE AND CASH EXCHANGE OR A SHARE ONLY
EXCHANGE, BUT NOT A COMBINATION THEREOF.
<PAGE> 4
- -------------------------------------------------------------------------------
SIGN HERE
Signature(s):______________________________________________________________
Please type or print name(s):______________________________________________
Address:___________________________________________________________________
Area Code and Telephone Number:____________________________________________
Tax Identification or Social Security Number:______________________________
- -------------------------------------------------------------------------------
2
<PAGE> 1
EXHIBIT 99(A)(6)
THERMOLASE ANNOUNCES PLAN TO OFFER SHAREHOLDERS A NEW
SECURITY WITH BUILT-IN REDEMPTION FEATURE
SAN DIEGO, Calif., December 19, 1996 -- ThermoLase Corporation (ASE-TLZ)
announced today that it intends to offer its shareholders the opportunity to
exchange one share of existing ThermoLase common stock, and $3.00, for a new
ThermoLase unit consisting of one share of common stock and one redemption
right. Shareholders would have the option to deliver shares of ThermoLase stock
in lieu of cash to cover the $3.00 per-share amount. The redemption right would
entitle the holder to sell the related share of common stock to the company for
$20.25 during the first 20 business days after the fourth anniversary of the
closing of the exchange offer. The redemption right would not detach, or trade
separately, from the related share of common stock. The redemption right would
expire and become worthless if the closing price of ThermoLase common stock has
been at least $26.00 for 20 of 30 consecutive trading days.
If more than 2,000,000 shares of ThermoLase common stock are tendered in
the exchange offer, acceptances would be cut back pro rata. The company's
obligations under the redemption rights would be guaranteed on a subordinated
basis by Thermo Electron Corporation, the company's ultimate parent corporation.
The exchange offer would be subject to several conditions, including
effectiveness of a registration statement under the Securities Act of 1933,
listing of the units by the American Stock Exchange, and acceptance of the offer
by the holders of at least 500,000 ThermoLase shares. The exchange offer would
be made only by means of a prospectus included as part of such registration
statement. The company anticipates filing such registration statement in January
1997.
<PAGE> 1
GUARANTEE AGREEMENT
This Guarantee Agreement, dated _________________, 1997 (the "Agreement"),
is entered into by and between ThermoLase Corporation, a Delaware corporation
(the "Corporation" or "ThermoLase"), and Thermo Electron Corporation, a Delaware
corporation ("Thermo Electron"). Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Offer to Exchange of the Corporation
dated , 1997 (the "Offer to Exchange").
WHEREAS, pursuant to the Offer to Exchange, the Corporation has offered to
exchange one unit (each, a "Unit"), consisting of one share of Common Stock, par
value $0.01 per share, of the Corporation (the "Common Stock") and one
redemption right (a "Redemption Right") for each share of Common Stock (each, an
"Exchange Share"), plus an additional payment of $3.00, payable either in cash
or in additional shares of Common Stock. No more than 2,000,000 Exchange Shares
will be accepted for exchange. Each Redemption Right will entitle the holder
thereof to sell the related share of Common Stock to the Company for $20.25
during the first 20 business days after the fourth anniversary of the Expiration
Date (as defined in the Offer to Exchange).
WHEREAS, the issuance and sale of the Units will be materially enhanced by
the existence of a subordinated guarantee by Thermo Electron of the
Corporation's obligations under the Redemption Rights;
NOW, THEREFORE, FOR VALUE RECEIVED, the parties hereby agree as follows:
1. Thermo Electron hereby agrees to guarantee, as provided in the
Guarantee dated the date hereof and attached hereto as EXHIBIT A, on a
subordinated basis, the due and punctual payment of any amounts due from the
Corporation to holders of Units pursuant to the Corporation's obligation to
redeem shares of its outstanding Common Stock during the Redemption Period, in
case of the failure of the Corporation to make any such payment punctually when
and as the same shall become due and payable. For purposes of this Agreement,
the guarantee of the Redemption Rights referred to in the preceding sentence
shall be referred to as the "Guarantee."
<PAGE> 2
2. The text of the Guarantee shall be endorsed on the back of each Unit
Certificate and shall be executed and attested by duly authorized officers of
Thermo Electron under its corporate seal. Such signatures may be manual or
facsimile.
3. Upon the failure or prospective failure of the Corporation to meet its
redemption obligations during the Redemption Period, the Corporation shall
deliver to Thermo Electron, at the earliest practicable time, a statement of the
failure or the prospective failure of the Corporation to meet its obligations
and the correct amount to be paid in respect of such redemption. Failure of the
Corporation to deliver such statement shall not relieve Thermo Electron of its
obligations under this Agreement or the Guarantee.
4. The Corporation hereby covenants to cause notice of the commencement
of the Redemption Period to be published in the Wall Street Journal, and to be
mailed to the holders of record of the Redemption Rights, not less than 30 nor
more than 45 days prior to the commencement of the Redemption Period. The
Corporation hereby further covenants that in the event of the occurrence prior
to the expiration of the Redemption Rights of a merger or consolidation of the
Corporation with or into another entity (other than a merger in which the
Corporation is the surviving entity) or the sale of all or substantially all of
the assets of the Corporation, or in the event of the reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, the holders of Units shall have the rights
set forth in the Offer to Exchange under the heading "Description of Securities
- -- The Units."
5. This Agreement may be amended only by written amendment signed by the
parties, and no such amendment that dilutes or impairs the rights of the holders
of the Units shall be effective against such holders without the consent of the
holders of a majority of the then outstanding Units other than Thermo Electron
and its subsidiaries.
6. This Agreement is effective as of the date hereof and shall terminate
on the date that the redemption obligations of the Corporation have been
satisfied in full.
-2-
<PAGE> 3
7. This Agreement has been entered into for the benefit of the holders of
the Units from time to time and such holders are third party beneficiaries
hereof.
Executed as a sealed instrument.
THERMOLASE CORPORATION THERMO ELECTRON CORPORATION
By: _______________________________ By: _________________________________
Title: _____________________________ Title: ______________________________
-3-
<PAGE> 4
EXHIBIT A
1. FOR VALUE RECEIVED, Thermo Electron Corporation, a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the "Guarantor"), hereby unconditionally guarantees to the holder of the Rights
represented by the Certificate upon which this Guarantee is endorsed (the
"Holder") the due and punctual payment of any amounts due from ThermoLase
Corporation ("ThermoLase") to the Holder pursuant to ThermoLase's obligation to
redeem shares of its outstanding Common Stock during the Redemption Period, as
that term is defined on the face of this Certificate, in case of the failure of
ThermoLase to make any such payment punctually when and as the same shall become
due and payable.
2. The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
ThermoLase's redemption obligations and shall be applicable without regard to
the provisions of Section 160 of the Delaware General Corporation Law (with
respect to the impairment of the capital of ThermoLase) or other legal
prohibition or impediment and irrespective of the absence of any action to
enforce the same, any waiver or consent by the Holder, the recovery of any
judgment against ThermoLase or any action to enforce the same or any other
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of ThermoLase, any right to require a proceeding first against
ThermoLase, protest or notice with respect to redemption of ThermoLase's Common
Stock as provided in this Certificate relating to redemption of ThermoLase's
Common Stock and of this Guarantee.
3. (a) Prior to satisfaction in full of the aforesaid redemption
obligations and this Guarantee, the Guarantor will not merge or consolidate
with, or sell or convey all or substantially all of its assets to, any other
corporation or entity, unless (i) either (A) the Guarantor shall be the
surviving corporation in the case of a merger or (B) the surviving, resulting or
transferee corporation or entity shall expressly assume the due and punctual
performance of all of the covenants and obligations of the Guarantor under this
Guarantee and (ii) the Guarantor or such successor corporation, as the case may
be, shall not, immediately after such merger, consolidation, sale or conveyance,
be in default in the performance of any covenants or obligations of the
Guarantor under this Guarantee.
(b) Upon any merger, consolidation, sale, conveyance or assumption as
provided in Section 3(a), the successor or assuming corporation shall succeed to
and be substituted for, and may exercise every right and power of and be subject
to
A-1
<PAGE> 5
all the obligations of, the Guarantor under this Guarantee with the same effect
as if such successor or assuming corporation had been named as the guarantor
therein and herein and the Guarantor shall be released from its liability as
obligor under this Guarantee.
4. (a) The Guarantor, for itself, its successors and assigns, covenants
and agrees, and each Holder by his acceptance of the Units likewise covenants
and agrees, that all obligations of the Guarantor relating to payment of any
amounts due for the redemption of ThermoLase's Common Stock pursuant to the
terms set forth in this Certificate are hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, in right of payment to the prior
payment in full of all Senior Indebtedness of the Guarantor.
"Senior Indebtedness" shall mean the principal of, premium, if any, and
interest and other amounts due on or with respect to the following, whether
outstanding at the date hereof or thereafter incurred or created:
(i) indebtedness of the Guarantor for money borrowed by the
Guarantor (including, without limitation, purchase money obligations), whether
or not evidenced by debentures, bonds, notes or other corporate debt securities
or similar instruments issued by the Guarantor (including the principal of,
premium, if any, and interest on the Guarantor's 5% Senior Convertible
Debentures due 2001); provided, however, that Senior Indebtedness shall not
include (i) the Guarantor's obligations with respect to its outstanding 4 1/4%
Convertible Subordinated Debentures due 2003, which rank pari passu with the
obligations represented by this Guarantee in right of payment, (ii) the
Guarantor's subordinated guarantees of the principal, premium, if any, and
interest on the Non-Interest Bearing Convertible Subordinated Debentures due
2003 issued by Thermedics Inc., the Non-Interest Bearing Convertible
Subordinated Debentures due 2001 issued by Thermo Ecotek Corporation, the 6 1/2%
Convertible Subordinated Debentures due 1997 and the 4 5/8% Convertible
Subordinated Debentures due 2003 issued by Thermo TerraTech Inc., the
Non-Interest Bearing Convertible Subordinated Debentures due 1997 issued by
Thermo Cardiosystems Inc., the 3 3/4% Convertible Subordinated Debentures due
2000 issued by Thermo Voltek Corp., the 4 7/8% Convertible Subordinated
Debentures due 2000 issued by Thermo Remediation Inc., the 5% Convertible
Subordinated Debentures due 2000 issued by ThermoQuest Corporation or the 5%
Convertible Subordinated Debentures due 2000 issued by Thermo Optek Corporation,
which rank pari passu with the obligations represented by this Guarantee in
right of payment, or (iii) the Guarantor's subordinated guarantees of the
obligations to redeem the common stock of ThermoLyte Corporation and Thermo
Fibergen, Inc., which rank pari passu with the obligations represented by this
Guarantee in right of payment;
(ii) obligations to reimburse any bank or other person in
respect of amounts paid under letters of credit;
A-2
<PAGE> 6
(iii) leases of real property, equipment or other assets, which
leases are capitalized in the Guarantor's financial statements in accordance
with generally accepted accounting principles;
(iv) commitment, standby and other fees due and payable to
financial institutions with respect to credit facilities available to the
Guarantor;
(v) obligations of the Guarantor under interest rate or
currency swaps, floors, caps or other similar arrangements intended to hedge
interest rates or currency exposure;
(vi) indebtedness secured by any mortgage, pledge, lien or
other encumbrance on property which is owned or held by the Guarantor subject to
such mortgage, pledge, lien or encumbrance, whether or not the indebtedness
secured thereby shall have been assumed by the Guarantor;
(vii) obligations of the Guarantor constituting guarantees of
indebtedness of or joint obligations with another or others which would be
included in the preceding clauses (i), (ii), (iii), (iv), (v) or (vi) (including
the Guarantor's guarantee of the principal of, premium, if any, and interest on
the 3 3/4% Senior Convertible Debentures due 2000 of Thermo Instrument Systems
Inc. and the 4 1/2% Senior Convertible Debentures due 2003 of Thermo Instrument
Systems Inc.); and
(viii) modifications, renewals, extensions or refundings of any
of the indebtedness, leases, fees or obligations referred to in the preceding
clauses (i), (ii), (iii), (iv), (v), (vi) or (vii) or debentures, notes or other
evidences of indebtedness issued in exchange therefor; provided, however, that
Senior Indebtedness shall not include any particular indebtedness, lease, fee or
obligation, modification, renewal, extension or refunding or exchanged
securities if, under the express provisions of the instrument creating or
evidencing the same, or pursuant to which the same is outstanding, such
indebtedness, lease, fee or obligation or such modification, renewal, extension
or refunding thereof or exchanged securities are stated to be not superior in
right of payment to the Guarantees.
(b) (i) In the event of any insolvency or bankruptcy proceedings,
or any receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to the Guarantor or to its creditors as such, or
to its property, or in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Guarantor, or in the event of any
assignment for the benefit of creditors of the Guarantor or any marshaling of
assets of the Guarantor, then the holders of all Senior Indebtedness of the
Guarantor shall first be entitled to receive payment in full of the principal of
and premium, if any and interest, including interest thereon accruing after the
commencement of any such proceeding, on all Senior Indebtedness of the Guarantor
before the holders of any of the Units, shall be entitled
A-3
<PAGE> 7
to receive any payment on account of the obligations of the Guarantor pursuant
to Section 1, and to that end the holders of Senior Indebtedness of the
Guarantor shall be entitled to receive for application in payment thereof any
payment or distribution of any kind or character, whether in cash, property or
securities, which may be payable or deliverable in any such proceedings in
respect to obligations of the Guarantor relating to the Redemption Rights other
than securities of the Guarantor as reorganized or readjusted or securities of
the Guarantor or any other corporation provided for by a plan of reorganization
or readjustment the payment of which is subordinate, at least to the extent
provided in this Section 4 with respect to the obligations of the Guarantor
relating to the Redemption Rights, to the payment of all Senior Indebtedness of
the Guarantor, provided that the rights of the holders of Senior Indebtedness of
the Guarantor are not altered by such reorganization or readjustment. For the
purposes of this Section, no consolidation, merger, conveyance or transfer made
pursuant to the provisions of Section 3 shall be deemed to be a liquidation,
reorganization, dissolution or other winding up of the Guarantor.
(ii) If under the circumstances set forth in paragraph (b)(i)
of this Section, and notwithstanding the provisions thereof, any payment or
distribution of assets of the Guarantor of any kind, whether in cash, property,
or securities (other than securities of the Guarantor as reorganized or
readjusted or securities of the Guarantor or any other corporation provided for
by a plan of reorganization or readjustment the payment of which is
subordinated, at least to the extent provided in this Section with respect to
the obligations of the Guarantor relating to the Redemption Rights, to the
payment of all Senior Indebtedness of the Guarantor provided that the rights of
the holders of Senior Indebtedness of the Guarantor are not altered by such
reorganization or readjustment) shall be received by the holders of the Units in
respect of the obligations of the Guarantor before the principal of (and
premium, if any) and interest on all Senior Indebtedness of the Guarantor is
paid in full, such payment or distribution shall be paid over to the holders of
Senior Indebtedness of the Guarantor, ratably, for application to the payment of
the principal of (and premium, if any) and interest on all Senior Indebtedness
of the Guarantor remaining unpaid until all the principal of (and premium, if
any) and interest on all Senior Indebtedness of the Guarantor shall have been
paid in full, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness of the Guarantor.
(iii) Upon any distribution of assets of the Guarantor referred
to in this Section, the holders of the Units shall be entitled to rely upon any
final order or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
and the holders of the Units shall be entitled to rely upon a certificate of the
liquidating trustee or agent or other person making any distribution to the
holders of the Units for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Senior Indebtedness of the
Guarantor and other indebtedness of the Guarantor, the
A-4
<PAGE> 8
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section.
(c) (i) Upon the maturity of any Senior Indebtedness of the
Guarantor by lapse of time, acceleration or otherwise, all principal thereof
(and premium, if any) and interest due thereon, including interest thereon
accruing after the commencement of any proceeding of the type referred to in
paragraph (i) of Section (b) above, shall first be paid in full, or such payment
duly provided for in cash, before any payment, directly or indirectly, is made
on account of the obligations of the Guarantor relating to the Redemption
Rights.
(ii) Upon the happening of an event of default with respect to
any Senior Indebtedness of the Guarantor, as defined therein or in the
instrument under which it is outstanding, permitting the holders to accelerate
the maturity thereof, then, unless and until such event of default shall have
been cured or waived or shall have ceased to exist, no payment shall be made by
the Guarantor, directly or indirectly, on account of the obligations of the
Guarantor relating to the Redemption Rights.
(d) In case cash, securities or other property otherwise payable or
deliverable to the holders of the Units on account of the Guarantee shall have
been applied, pursuant to Section (b) or (c), to the payment of Senior
Indebtedness of the Guarantor, then, upon the payment in full of the principal
of (and premium, if any) and interest on all Senior Indebtedness of the
Guarantor, the holders of the Units shall be subrogated to any rights of any
holders of Senior Indebtedness of the Guarantor, to receive any further payments
or distributions applicable to Senior Indebtedness of the Guarantor until the
obligation of the Guarantor in respect of this Guarantee shall have been
discharged in full, and such payments or distributions received by the holders
of the Units by reason of such subrogation, of cash, securities or other
property that otherwise would be paid or distributed to the holders of Senior
Indebtedness of the Guarantor, shall, as between the Guarantor and its creditors
other than the holders of Senior Indebtedness of the Guarantor, on the one hand,
and the holders of the Units on account of this Guarantee, on the other hand, be
deemed to be a payment by the Guarantor on account of Senior Indebtedness of the
Guarantor and not on account of the Redemption Rights.
(e) No present or future holder of any Senior Indebtedness of the
Guarantor shall be prejudiced in any way in the right to enforce the
subordination of this Guarantee by any act or failure to act on the part of the
Guarantor. The provisions of this Section 4 are solely for the purpose of
defining the relative rights of the holders of Senior Indebtedness of the
Guarantor, on the one hand, and the holders of the Units on account of this
Guarantee, on the other hand, against the Guarantor and its assets, and nothing
contained in this Section 4 shall impair, as between the Guarantor and the
holder of any Units, the obligation of the Guarantor, which is
A-5
<PAGE> 9
unconditional and absolute, to perform in accordance with the terms of this
Guarantee or prevent the holder of any Units, upon default hereunder or under
the terms of the Units, from exercising all rights, powers and remedies
otherwise provided herein or therein or by applicable law, all subject to the
rights of the holders of Senior Indebtedness of the Guarantor under this Section
4 to receive cash, property or securities otherwise payable or deliverable to
the holders of the Units on account of this Guarantee.
(f) Nothing contained in this Section 4 shall prevent at any time,
except under the conditions described in Section 4(b) and (c) hereof or during
the pendency of any dissolution, winding up, liquidation or reorganization
proceedings therein referred to, the Guarantor from performing its obligations
under this Guarantee.
5. The Guarantor shall be subrogated to all rights of the holders of the
Units against ThermoLase in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Guarantee to the end that the Guarantor shall
be entitled to receive the shares of ThermoLase Common Stock as to which it
makes payments in respect of ThermoLase's redemption obligations hereunder.
6. This Guarantee shall be governed by and construed in accordance with
the laws of Commonwealth of Massachusetts.
7. The Guarantor hereby certifies and warrants that all acts, conditions
and things required to be done and performed and to have happened precedent to
the creation and issuance of this Guarantee and to constitute the same a valid
obligation of the Guarantor have been done and performed and have happened in
due compliance with all applicable laws.
8. By his acceptance hereof, each Holder acknowledges and agrees that
this Guarantee supersedes any and all prior guarantees by Guarantor to such
Holder with respect to any redemption obligations of ThermoLase as to its Common
Stock.
A-6
<PAGE> 10
9. The Holder shall at all times be a beneficiary under, and shall be
entitled to enforce, that certain Guarantee Agreement dated as of ___________,
1997 by and between the Guarantor and ThermoLase. A copy of such Guarantee
Agreement will be provided to the Holder, without charge, upon written request
to the Guarantor.
WITNESS the facsimile seal of the Guarantor and the facsimile signatures of
its duly authorized officers.
Dated: ________________, 1997
_______________________ _________________________
Secretary [Seal] President and Chief
Executive Officer
A-7
