<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THERMO REMEDIATION INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
THERMO REMEDIATION INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
THERMO REMEDIATION INC.
Damonmill Square
9 Pond Lane, Suite 5A
Concord, Massachusetts 01742-2851
July 23, 1998
Dear Stockholder:
The enclosed Notice calls the 1998 Annual Meeting of the Stockholders of
Thermo Remediation Inc. I respectfully request all Stockholders to attend this
meeting, if possible.
Our Annual Report for the fiscal year ended April 4, 1998, is enclosed. I
hope you will read it carefully. Feel free to forward any questions you may
have if you are unable to be present at the meeting.
Enclosed with this letter is a proxy authorizing three officers of the
Corporation to vote your shares for you if you do not attend the meeting.
Whether or not you are able to attend the meeting, I urge you to complete your
proxy and return it to our transfer agent, BankBoston, N.A., in the enclosed
addressed, postage-paid envelope, as a quorum of the Stockholders must be
present at the meeting, either in person or by proxy.
I would appreciate your immediate attention to the mailing of this proxy.
Yours very truly,
ROBERT W. DUNLAP
President and Chief Executive Officer
<PAGE>
THERMO REMEDIATION INC.
Damonmill Square
9 Pond Lane, Suite 5A
Concord, Massachusetts 01742-2851
July 23, 1998
To the Holders of the Common Stock of
THERMO REMEDIATION INC.
NOTICE OF ANNUAL MEETING
The 1998 Annual Meeting of the Stockholders of Thermo Remediation Inc. (the
"Corporation") will be held on Tuesday, September 15, 1998, at 2:00 p.m. at the
offices of Thermo Electron Corporation, 81 Wyman Street, Waltham, Massachusetts.
The purpose of the meeting is to consider and take action upon the following
matters:
1. Election of seven directors.
2. A proposal to amend the Corporation's Certificate of Incorporation to
change the name of the Corporation to ThermoRetec Corporation.
3. Such other business as may properly be brought before the meeting and
any adjournment thereof.
The transfer books of the Corporation will not be closed prior to the
meeting, but, pursuant to appropriate action by the board of directors, the
record date for the determination of the Stockholders entitled to receive notice
of and to vote at the meeting is July 23, 1998.
The By-laws require that the holders of a majority of the stock issued and
outstanding and entitled to vote be present or represented by proxy at the
meeting in order to constitute a quorum for the transaction of business. It is
important that your stock be represented at the meeting regardless of the number
of shares you may hold. Whether or not you are able to be present in person,
please sign and return promptly the enclosed proxy in the accompanying envelope,
which requires no postage if mailed in the United States.
This notice, the proxy and proxy statement enclosed herewith are sent to
you by order of the board of directors.
SANDRA L. LAMBERT
Secretary
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the board of directors of Thermo
Remediation Inc. (the "Corporation") for use at the 1998 Annual Meeting of the
Stockholders (the "Meeting") to be held on Tuesday, September 15, 1998, at 2:00
p.m. at the offices of Thermo Electron Corporation, 81 Wyman Street, Waltham,
Massachusetts, and any adjournment thereof. The mailing address of the
executive office of the Corporation is Damonmill Square, 9 Pond Lane, Suite 5A,
Concord, Massachusetts 01742-2851. This proxy statement and the enclosed proxy
were first furnished to Stockholders of the Corporation on or about July 27,
1998.
VOTING PROCEDURES
The board of directors intends to present to the Meeting the election of
seven directors, constituting the entire board of directors, as well as one
other matter: a proposal to amend the Corporation's Certificate of
Incorporation to change the name of the Corporation to ThermoRetec Corporation.
The representation in person or by proxy of a majority of the outstanding
shares of common stock of the Corporation, $.01 par value (the "Common Stock"),
entitled to vote at the Meeting is necessary to provide a quorum for the
transaction of business at the Meeting. Shares can only be voted if the
Stockholder is present in person or is represented by returning a properly
signed proxy. Each Stockholder's vote is very important. Whether or not you plan
to attend the Meeting in person, please sign and promptly return the enclosed
proxy card, which requires no postage if mailed in the United States. All signed
and returned proxies will be counted towards establishing a quorum for the
Meeting, regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on the
proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted FOR the management nominees for directors,
FOR the management proposal, and as the individuals named as proxy holders on
the proxy deem advisable on all other matters as may properly come before the
Meeting.
In order to be elected a director, a nominee must receive the affirmative
vote of a plurality of the shares of Common Stock present and entitled to vote
on the election. For the management proposal to amend the Corporation's
Certificate of Incorporation to change the name of the Corporation, the
affirmative vote of a majority of the shares outstanding and entitled to vote on
the matter is necessary for approval. Withholding authority to vote for a
nominee for director or an instruction to abstain from voting on the management
proposal will be treated as shares present and entitled to vote and, for
purposes of determining the outcome of the vote, will have the same effect as a
vote against the nominee or the proposal. With respect to the election of
directors, broker "non-votes" will not be treated as shares present and entitled
to vote on a voting matter and will have no effect on the outcome of the vote.
A broker "non-vote" occurs when a nominee holding shares for a beneficial holder
does not have discretionary voting power and does not receive voting
instructions from the beneficial owner.
A Stockholder who returns a proxy may revoke it at any time before the
Stockholder's shares are voted at the Meeting by written notice to the Secretary
of the Corporation received prior to the Meeting, by executing and returning a
later-dated proxy or by voting by ballot at the Meeting.
The outstanding stock of the Corporation entitled to vote (excluding shares
held in treasury by the Corporation) as of July 23, 1998, consisted of
13,546,644 shares of Common Stock. Only Stockholders of record at the close of
business on July 23, 1998, are entitled to vote at the Meeting. Each share is
entitled to one vote.
1
<PAGE>
--PROPOSAL 1--
ELECTION OF DIRECTORS
Seven directors are to be elected at the Meeting, each to hold office until
his successor is chosen and qualified or until his earlier resignation, death or
removal.
Nominees for Directors
Set forth below are the names of the persons nominated as directors, their
ages, their offices in the Corporation, if any, their principal occupation or
employment for the past five years, the length of their tenure as directors and
the names of other public companies in which such persons hold directorships.
Information regarding their beneficial ownership of the Corporation's Common
Stock and of the common stock of its parent companies, Thermo TerraTech Inc.
("Thermo TerraTech"), a provider of industrial- and infrastructure-support
services including environmental-liability management, infrastructure
engineering, laboratory testing and metallurgical services, and Thermo Electron
Corporation ("Thermo Electron"), a provider of diversified products and services
for biomedical, instrument and environmental markets, is reported under the
caption "Stock Ownership." All of the nominees are currently directors of the
Corporation.
- --------------------------------------------------------------------------------
John P. Appleton Dr. Appleton, 63, has been the chairman of the
board and a director of the Corporation since
1993. He also served as the Corporation's chief
executive officer from September 1993 to May 1997.
Dr. Appleton has been president and chief
executive officer of Thermo TerraTech since
September 1993, and has served as a vice president
of Thermo Electron since 1975 in various
managerial capacities. He also serves as a
director of The Randers Group Incorporated and
Thermo TerraTech.
- --------------------------------------------------------------------------------
Robert W. Dunlap Dr. Dunlap, 61, has been president, chief
executive officer and a director of the
Corporation since April 1998. Prior to that time,
he served as a vice president of the Corporation
from May 1996 through April 1998 and as president
and chief executive officer of Remediation
Technologies, Inc., which was acquired by the
Corporation in December 1995, from 1985 through
April 1998.
- --------------------------------------------------------------------------------
Elias P. Gyftopoulos Dr. Gyftopoulos, 71, has been a director of the
Corporation since 1994. Dr. Gyftopoulos is
Professor Emeritus of the Massachusetts Institute
of Technology, where he was the Ford Professor of
Mechanical Engineering and of Nuclear Engineering
for more than twenty years until his retirement in
1996. Dr. Gyftopoulos is also a director of
Thermo Electron, Thermo BioAnalysis Corporation,
Thermo Cardiosystems Inc., ThermoLase Corporation,
ThermoSpectra Corporation, Thermo Vision
Corporation, Thermo Voltek Corp. and Trex Medical
Corporation.
- --------------------------------------------------------------------------------
Fred Holubow Mr. Holubow, 59, has been a director of the
Corporation since 1992. Mr. Holubow has been vice
president of Pegasus Associates, an investment
management firm, for more than five years.
- --------------------------------------------------------------------------------
Theo Melas-Kyriazi Mr. Melas-Kyriazi, 39, has been a director of the
Corporation since 1992. Mr. Melas-Kyriazi has
been vice president, corporate strategy, of Thermo
Electron since March 1998 and was president and
chief executive officer of ThermoSpectra
Corporation, a majority-owned subsidiary of Thermo
Electron that manufactures imaging, inspection,
measurement and temperature-control
instrumentation, from its inception in August 1994
through March 1998. Mr. Melas-Kyriazi was
treasurer of Thermo Electron from May 1988 to
August 1994 and treasurer of Thermo Remediation
from 1991 to 1994. Mr. Melas-Kyriazi is also a
director of ThermoSpectra Corporation and Thermo
Voltek Corp.
- --------------------------------------------------------------------------------
Frank E. Morris Dr. Morris, 74, has been a director of the
Corporation since 1993. Dr. Morris served as
president of the Federal Reserve Bank of Boston
from 1968 until he retired in 1988. Dr. Morris
also served as the Peter Drucker Professor of
Management at Boston College from 1989 to 1994.
Dr. Morris is a trustee of SEI Mutual Funds, The
Capitol Mutual Funds, FFB Lexicon Funds and The
Arbor Fund.
- --------------------------------------------------------------------------------
2
<PAGE>
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William A. Rainville Mr. Rainville, 56, has been a director of the
Corporation since June 1993. Mr. Rainville has
been president and chief executive officer of
Thermo Fibertek Inc., a majority-owned subsidiary
of Thermo Electron that develops and manufactures
equipment and products for the paper making and
paper recycling industries, since its inception in
1991, a senior vice president of Thermo Electron
since March 1993 and a vice president of Thermo
Electron from 1986 to 1993. From 1984 until
January 1993, Mr. Rainville was the president and
chief executive officer of Thermo Electron Web
Systems Inc., a subsidiary of Thermo Fibertek Inc.
Mr. Rainville is also a director of Thermo Ecotek
Corporation, Thermo Fibergen Inc., Thermo Fibertek
Inc. and Thermo TerraTech.
- --------------------------------------------------------------------------------
Committees of the Board of Directors and Meetings
The board of directors has established an audit committee and a human
resources committee, each consisting solely of outside directors. The present
members of the audit committee are Mr. Holubow (Chairman) and Dr. Morris. The
audit committee reviews the scope of the audit with the Corporation's
independent public accountants and meets with them for the purpose of reviewing
the results of the audit subsequent to its completion. The present members of
the human resources committee are Dr. Morris (Chairman), Dr. Gyftopoulos and Mr.
Holubow. The human resources committee reviews the performance of senior members
of management, recommends executive compensation and administers the
Corporation's stock option and other stock-based compensation plans. The
Corporation does not have a nominating committee of the board of directors. The
board of directors met five times, the audit committee met twice and the human
resources committee met five times during fiscal 1997. Each director attended
at least 75% of all meetings of the board of directors and committees on which
he served held during fiscal 1997, except Mr. Rainville, who attended 40% of
such meetings. Mr. Rainville is also the chief executive officer of Thermo
Fibertek Inc., another majority-owned subsidiary of Thermo Electron, and is
required to travel extensively in his position. Mr. Rainville missed two
meetings due to travel on company business and one meeting due to illness.
Compensation of Directors
Cash Compensation
Directors who are not employees of the Corporation, of Thermo Electron or
of any other company affiliated with Thermo Electron (also referred to as
"outside directors") receive an annual retainer of $2,000 and a fee of $1,000
per day for attending regular meetings of the board of directors and $500 per
day for participating in meetings of the board of directors held by means of
conference telephone and for participating in certain meetings of committees of
the board of directors. Payment of directors' fees is made quarterly. Dr.
Appleton, Dr. Dunlap, Mr. Melas-Kyriazi and Mr. Rainville are all employees of
Thermo Electron or its subsidiaries and do not receive any cash compensation
from the Corporation for their services as directors. Directors are also
reimbursed for out-of-pocket expenses incurred in attending such meetings.
Deferred Compensation Plan for Directors
Under the Corporation's deferred compensation plan for directors (the
"Deferred Compensation Plan"), a director has the right to defer receipt of his
cash fees until he ceases to serve as a director, dies or retires from his
principal occupation. In the event of a change in control or proposed change in
control of the Corporation that is not approved by the board of directors,
deferred amounts become payable immediately. Either of the following is deemed
to be a change of control: (a) the acquisition, without the prior approval of
the board of directors, directly or indirectly, by any person of 50% or more of
the outstanding Common Stock or the outstanding common stock of Thermo TerraTech
or 25% or more of the outstanding common stock of Thermo Electron; or (b) the
failure of the persons serving on the board of directors immediately prior to
any contested election of directors or any exchange offer or tender offer for
the Common Stock or the common stock of Thermo TerraTech or Thermo Electron to
constitute a majority of the board of directors at any time within two years
following any such event. Amounts deferred pursuant to the Deferred
Compensation Plan are valued at the end of each quarter as units of the
Corporation's Common Stock. When payable, amounts deferred may be disbursed
solely in shares of Common
3
<PAGE>
Stock accumulated under the Deferred Compensation Plan. A total of 37,500 shares
of Common Stock have been reserved for issuance under the Deferred Compensation
Plan. As of April 4, 1998, deferred units equal to 7,788.67 shares of Common
Stock were accumulated under the Deferred Compensation Plan.
Directors Stock Option Plan
The Corporation's directors stock option plan, which was amended in 1995
(the "Directors Plan"), provides for the grant of stock options to purchase
shares of Common Stock of the Corporation to outside directors as additional
compensation for their service as directors.
The Directors Plan originally provided for the grant of stock options upon
a director's initial appointment. Outside directors appointed before the
amendment of the plan received an option to purchase 22,500 shares of Common
Stock upon their appointment or election. The amended plan provides that the
size of the award to new directors is reduced by 4,500 shares each year until
1999, when the initial grant for new directors will be eliminated entirely.
Accordingly, directors first appointed or elected in 1997 will receive options
to purchase 9,000 shares, directors first appointed or elected in 1998 will
receive options to purchase 4,500 shares and directors first appointed or
elected in 1999 and thereafter will not receive an initial option grant. Options
granted upon a director's election or appointment may be exercised at any time
from and after the six-month anniversary of the grant date of the option and
prior to the expiration of the option on the fifth anniversary of the grant
date. Such options are subject to restrictions on resale and to the repurchase
by the Corporation of the shares subject to option at the exercise price if the
director ceases to serve as a director of the Corporation, Thermo Electron or
any subsidiary of Thermo Electron, for any reason other than death. The
restriction and repurchase rights lapse in equal installments of 4,500 shares
starting with the first anniversary of the grant date, provided the director has
continuously served as a director of the Corporation or any other Thermo
Electron company prior to that date.
Commencing with the 1998 Annual Meeting of Stockholders, outside directors
receive an annual grant of options to purchase 1,000 shares of Common Stock
pursuant to the Directors Plan at the close of business on the date of each
Annual Meeting of the Stockholders of the Corporation. Options evidencing
annual grants may be exercised at any time from and after the six-month
anniversary of the grant date of the option and prior to the expiration of the
option on the third anniversary of the grant date. Shares acquired upon
exercise of the options are subject to repurchase by the Corporation at the
exercise price if the recipient ceases to serve as a director of the Corporation
or any other Thermo Electron company prior to the first anniversary of the grant
date.
The exercise price for options granted under the Directors Plan is the
average of the closing prices of the Common Stock as reported on the American
Stock Exchange (or other principal market on which the Common Stock is then
traded) for the five trading days immediately preceding and including the date
of grant, or, if the shares are not then traded, at the last price per share
paid by third parties in an arms-length transaction prior to the option grant.
As of June 29, 1998, options to purchase 75,000 shares of Common Stock had been
granted and were outstanding under the Directors Plan, no options had lapsed or
been exercised, and options to purchase 75,000 shares of Common Stock were
reserved and available for grant under the Directors Plan.
Stock Ownership Policies for Directors
During fiscal 1997, the human resources committee of the board of directors
(the "Committee") established a stock holding policy for directors. The stock
holding policy requires each director to hold a minimum of 1,000 shares of
Common Stock. Directors were requested to achieve this ownership level by the
1998 Annual Meeting of Stockholders. Directors who are also executive officers
of the Corporation are required to comply with a separate stock holding policy
established by the Committee in fiscal 1997, which is described in "Committee
Report on Executive Compensation - Stock Ownership Policies."
In addition, the Committee adopted a policy requiring directors to hold
shares of the Corporation's Common Stock equal to one-half of their net option
exercises over a period of five years. The net option exercise is determined by
calculating the number of shares acquired upon exercise of a stock option, after
deducting the number of shares that could have been traded to exercise the
option and the number of shares that could have been surrendered to satisfy tax
withholding obligations attributable to the exercise of the option. This policy
is also
4
<PAGE>
applicable to executive officers and is described in "Committee Report on
Executive Compensation - Stock Ownership Policies."
STOCK OWNERSHIP
The following table sets forth the beneficial ownership of Common Stock, as
well as the common stock of Thermo TerraTech and Thermo Electron, as of May 30,
1998, with respect to (i) each person who was known by the Corporation to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) each
director, (iii) each executive officer named in the summary compensation table
under the heading "Executive Compensation" and (iv) all directors and current
executive officers as a group.
While certain directors or executive officers of the Corporation are also
directors or executive officers of Thermo Electron or Thermo TerraTech, all such
persons disclaim beneficial ownership of the shares of Common Stock owned by
Thermo TerraTech or Thermo Electron.
<TABLE>
<CAPTION>
Thermo Thermo Electron Thermo TerraTech
Name (1) Remediation Inc. (2) Corporation (3) Inc. (4)
- -------- -------------------- --------------- --------
No. of Shares % of Class No. of Shares % of Class No. of Shares % of Class
------------- ---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Thermo Electron Corporation (5) 9,505,353 71.1 N/A N/A
William Harris Investors, Inc. (6) 1,081,882 8.4 N/A N/A
John P. Appleton 73,000 * 145,309 * 297,039 1.5
Robert W. Dunlap 95,848 * 10,355 * 10,000 *
Elias P. Gyftopoulos 29,600 * 70,707 * 3,040 *
Fred Holubow 55,766 * 6,000 * 16,500 *
Nels R. Johnson 37,688 * 20,782 * 12,958 *
James Lousararian 110,541 * 7,637 * 27,226 *
Theo Melas-Kyriazi 22,500 * 197,420 * 10,618 *
Frank E. Morris 29,304 * 25,475 * 1,500 *
Norman A. Pedersen 62,031 * 13,457 * 16,188 *
Jeffrey L. Powell 121,000 * 41,493 * 82,835 *
William A. Rainville 24,000 * 233,909 * 60,000 *
All directors and current executive
officers as a group (13 persons) 745,560 5.7 1,616,145 * 609,458 3.1
</TABLE>
*Reflects ownership of less than 1.0% of the Common Stock outstanding as of May
30, 1998.
(1) Except as reflected in the footnotes to this table, shares beneficially
owned consist of shares owned by the indicated person or by that person for
the benefit of minor children and all share ownership includes sole voting
and investment power.
(2) Shares of Common Stock beneficially owned by Dr. Appleton, Dr. Gyftopoulos,
Mr. Holubow, Mr. Johnson, Mr. Lousararian, Mr. Melas-Kyriazi, Dr. Morris,
Mr. Pedersen, Mr. Powell, Mr. Rainville and all directors and current
executive officers as a group include 63,000, 28,600, 25,450, 37,250,
100,500, 22,500, 25,450, 53,000, 111,000, 22,500 and 526,750 shares,
respectively, that such person or group has the right to acquire within 60
days of May 30, 1998, through the exercise of stock options. Shares
beneficially owned by Mr. Holubow, Dr. Morris and all directors and current
executive officers as a group include 3,934, 3,854 and 7,788 full shares,
respectively, that had been allocated through May 30, 1998, to their
respective accounts maintained under the Corporation's Deferred
Compensation Plan for Directors. Shares of Common Stock beneficially owned
by Dr. Dunlap and all directors and current executive officers as a group
include warrants to purchase 23,962 shares.
(3) Shares of the common stock of Thermo Electron beneficially owned by Dr.
Appleton, Dr. Dunlap, Dr. Gyftopoulos, Mr. Johnson, Mr. Lousararian, Mr.
Melas-Kyriazi, Dr. Morris, Mr. Pedersen, Mr. Powell, Mr. Rainville and all
directors and current executive officers as a group include 113,532,
10,000, 8,125, 15,195, 4,275, 161,935, 8,125, 6,250, 34,712, 169,487 and
1,279,304 shares, respectively, that such person or group has the right to
acquire within 60 days of May 30, 1998, through the exercise of stock
options. Shares beneficially owned by Dr. Appleton, Mr. Melas-Kyriazi, Mr.
Pedersen and all directors and current executive officers as a group
include 1,615, 1,071, 517 and 6,665 full shares allocated through May 30,
1998, to their respective accounts maintained pursuant to Thermo Electron's
employee stock ownership plan, of which the trustees, who have investment
power over its assets, were as of May 30, 1998, executive officers of
Thermo Electron ("ESOP"). Shares beneficially owned by Dr. Morris and all
directors and current executive officers as a group each include 11,685
shares allocated through May 30, 1998, to Dr. Morris's account maintained
pursuant to Thermo Electron's deferred compensation plan for directors.
Shares beneficially owned by Dr. Morris include 3,415 shares owned by his
spouse.
(4) Shares of the common stock of Thermo TerraTech beneficially owned by Dr.
Appleton, Dr. Dunlap, Dr. Gyftopoulos, Mr. Johnson, Mr. Lousararian, Mr.
Melas-Kyriazi, Dr. Morris, Mr. Pedersen, Mr. Powell, Mr. Rainville and all
directors and current executive officers as a group include 275,000,
10,000, 1,500, 12,000, 27,000, 10,000, 1,500, 16,000, 63,000, 60,000 and
521,000 shares, respectively, that such person or group has the right to
acquire within 60 days of May 30, 1998, through the exercise of stock
options. Shares beneficially owned by Mr. Holubow and all directors and
current executive officers as a group include 16,500 and 29,000 shares,
respectively, that such person or group has the right to acquire within 60
days of
5
<PAGE>
May 30, 1998, through the exercise of stock purchase warrants acquired in
connection with private placements of the securities of Thermo TerraTech on
terms identical to terms granted to unaffiliated investors. Shares
beneficially owned by Dr. Appleton, Mr. Melas-Kyriazi, Mr. Pedersen and all
directors and current executive officers as a group include 305, 299, 188
and 1,410 full shares, respectively, allocated through May 30, 1998, to
accounts maintained pursuant to the ESOP.
(5) Includes 167,410 shares of Common Stock that Thermo Electron has the right
to acquire within 60 days of May 30, 1998, through the conversion of
certain convertible notes of the Corporation held by Thermo Electron. Also
includes 269,492 shares of Common Stock that Thermo Electron, through its
majority owned subsidiary Thermo TerraTech, has the right to acquire within
60 days of May 30, 1998, through the conversion of certain convertible
notes of the Corporation held by Thermo TerraTech. As of May 30, 1998,
Thermo Electron Corporation beneficially owned approximately 71.1% of the
outstanding Common Stock, of which approximately 69.6% is owned through its
majority-owned subsidiary Thermo TerraTech Inc. Thermo Electron's address
is 81 Wyman Street, Waltham, Massachusetts. As of May 30, 1998, Thermo
Electron had the power to elect all of the members of the Corporation's
board of directors.
(6) Based on information provided in the Schedule 13G of William Harris
Investors, Inc. ("Harris") as of December 31, 1997, these shares of Common
Stock have been acquired by Harris on behalf of unidentified discretionary
clients of Harris. Harris has shared voting power and sole dispositive
power with respect to these shares of Common Stock. Harris is an investment
adviser registered under Section 203 of the Investment Adviser Act of 1940,
as amended. Its address is 2 North LaSalle Street, Suite 300, Chicago,
Illinois 60602.
6
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and beneficial owners of more
than 10% of the Common Stock, such as Thermo Electron and Thermo TerraTech, to
file with the Securities and Exchange Commission initial reports of ownership
and periodic reports of changes in ownership of the Corporation's securities.
Based upon a review of such filings, all Section 16(a) filing requirements
applicable to such persons were complied with during fiscal 1997, except in the
following instances. Dr. Robert W. Dunlap, a director and executive officer of
the Corporation, filed an amended Form 3 late. Mr. Norman A. Pedersen, an
executive officer of the Corporation, filed an amended Form 3 late and an
amended Form 5 late, reporting acquisitions of Common Stock shares associated
with the Corporation's dividend reinvestment plan. Mr. James Lousararian, an
executive officer of the Corporation, reported one transaction late, consisting
of the exempt grant of stock options. Thermo Electron filed four Forms 4 late,
reporting a total of seven transactions, including one open market purchase of
shares of Common Stock and six transactions associated with the grant, exercise
and lapse of options to purchase Common Stock granted to employees under its
stock option program.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes compensation for services to the Corporation
in all capacities awarded to, earned by or paid to the Corporation's chief
executive officers during fiscal 1998 and its four other most highly compensated
executive officers for the last three fiscal years.
The Corporation is required to appoint certain executive officers and full-
time employees of Thermo Electron as executive officers of the Corporation, in
accordance with the Thermo Electron Corporate Charter. The compensation for
these executive officers is determined and paid entirely by Thermo Electron. The
time and effort devoted by these individuals to the Corporation's affairs is
provided to the Corporation under the Corporate Services Agreement between the
Corporation and Thermo Electron. Accordingly, the compensation for these
individuals is not reported in the following table.
<TABLE>
<CAPTION>
Summary Compensation Table
- --------------------------------------------------------------------------------------------------------------
Long Term
Compensation
------------
Annual Compensation Securities Underlying All Other
Name and Fiscal ------------------- Options (No. of Shares Compensation
Principal Position Year Salary Bonus and Company) (2) (3)
------------------ ---- ------ ----- ---------------- ---
<S> <C> <C> <C> <C> <C>
John P. Appleton (4) 1998 $39,000 $0 (1) -- -- $3,500
Former Chief 1997 $36,750 $20,000 -- -- $6,919
Executive Officer 1996 $33,750 $20,000 -- -- $6,919
- --------------------------------------------------------------------------------------------------------------
Jeffrey L. Powell (5) 1998 $145,000 $0 (1) 700 (TMO) $59,372 (6)
President & Chief 2,000 (MKA)
Executive Officer 2,000 (ONX)
120,000 (RGI)
2,000 (TDX)
1,000 (TISI)
2,000 (TRIL)
1,500 (VIZ)
2,000 (TRCC)
1997 $122,000 $40,000 600 (TMO) $7,023
2,000 (TFG)
6,000 (TOC)
1996 $116,000 $60,000 300 (TMO) $6,646
2,000 (TBA)
5,000 (TLZ)
2,000 (TLT)
6,000 (TMQ)
2,000 (TSR)
4,000 (TXM)
- --------------------------------------------------------------------------------------------------------------
Robert W. Dunlap (7) 1998 $165,000 $0 (1) 120,000 (RGI) $9,500
Vice President 1997 $165,000 $35,000 10,000 (TTT) $5,088
10,000 (TMO)
James Lousararian 1998 $110,000 $0 (1) 20,000 (THN) $5,576
Vice President 48,000 (RGI)
1997 $106,000 $25,000 10,000 (THN) $6,567
1996 $102,000 $33,000 -- $6,636
- --------------------------------------------------------------------------------------------------------------
Nels R. Johnson (8) 1998 $101,000 $26,000 7,000 (THN) $9,344
Vice President 800 (TMO)
12,000 (RGI)
1997 $97,300 $28,000 8,000 (THN) $5,275
900 (TMO)
1996 $93,600 $25,000 20,000 (THN) $4,730
- --------------------------------------------------------------------------------------------------------------
Norman A. Pedersen (9) 1998 $98,000 $19,000 20,000 (THN) $9,346
Vice President, Business 800 (TMO)
Development 30,000 (RGI)
- --------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
(1) Dr. Appleton, Dr. Dunlap, Mr. Powell and Mr. Lousararian have elected to
forego their bonuses for fiscal 1998 in light of the Corporation's
operating and stock price performance in fiscal 1998.
(2) In addition to grants of options to purchase shares of Common Stock of the
Corporation (designated in the table as THN), the named executive officers
of the Corporation have been granted options to purchase common stock of
Thermo Electron and certain of its other subsidiaries as part of Thermo
Electron's stock option program. Options have been granted during the last
three fiscal years to the named executive officers in the following Thermo
Electron companies: Thermo Electron (designated in the table as TMO),
Thermo TerraTech Inc. (designated in the table as TTT), Metrika Systems
Corporation (designated in the table as MKA), ONIX Systems Inc. (designated
in the table as ONX), The Randers Group Incorporated (designated in the
table as RGI), Thermedics Detection Inc. (designated in the table as TDX),
Thermo BioAnalysis Corporation (designated in the table as TBA), Thermo
Fibergen Inc. (designated in the table as TFG), Thermo Information
Solutions Inc. (designated in the Table as TISI), ThermoLase Corporation
(designated in the table as TLZ), ThermoLyte Corporation (designated in the
table as TLT), Thermo Optek Corporation (designated in the table as TOC),
ThermoQuest Corporation (designated in the table as TMQ), Thermo Sentron
Inc. (designated in the table as TSR), Thermo Trilogy Corporation
(designated in the table as TRIL), Thermo Vision Corporation (designated in
the table as VIZ), Trex Communications Corporation (designated in the table
as TRCC) and Trex Medical Corporation (designated in the table as TXM).
(3) Represents the amount of matching contributions made by the individual's
employer on behalf of named executive officers participating in the Thermo
Electron 401(k) plan or, in the case of Dr. Dunlap, the RETEC Employees'
Savings and Profit Sharing Plan.
(4) Dr. Appleton served as the Corporation's chief executive officer from 1993
until May 14, 1997. Dr. Appleton is also a vice president of Thermo
Electron and president and chief executive officer of Thermo TerraTech. A
portion of Dr. Appleton's annual cash compensation (salary and bonus) has
been allocated to and paid by each of the Corporation, Thermo Electron and
Thermo TerraTech over each of the past three fiscal years as compensation
for the services provided to these companies based on the time he devoted
to his responsibilities to these companies. The annual cash compensation
reported in the table for Dr. Appleton represents the amount paid from all
sources, including the Corporation, solely for Dr. Appleton's services as
the chief executive officer of the Corporation. For fiscal 1998, 1997 and
1996, approximately 20%, 20%, and 20%, respectively, of Dr. Appleton's
annual cash compensation was paid by all sources including the Corporation
for his services as its chief executive officer. Bonuses paid to Dr.
Appleton for 1996 and 1997 reflect compensation decisions based on calendar
year performance, in accordance with Thermo Electron's compensation
practices for its officers. Bonuses granted to Dr. Appleton for periods
after 1998 will reflect compensation decisions based on fiscal year
performance. Dr. Appleton has served as an officer of Thermo Electron
since 1975 and has been granted options to purchase shares of the common
stock of Thermo Electron and certain of its subsidiaries other than the
Corporation from time to time by Thermo Electron or such other
subsidiaries. These options are not reported here as they were granted as
compensation for service to Thermo Electron companies in capacities other
than in his capacity as the chief executive officer of the Corporation.
(5) Mr. Powell served as president and chief executive officer of the
Corporation from May 14, 1997, through April 30, 1998, when he was named
senior vice president of the Corporation. He served as president and chief
operating officer of the Corporation prior to his promotion to chief
executive officer.
(6) In addition to a $9,372 matching contribution referred to in footnote (3),
this amount includes the reimbursement by the Corporation of $50,000 in
expenses associated with Mr. Powell's relocation to Concord, Massachusetts.
(7) Dr. Dunlap was appointed president and chief executive officer of the
Corporation on April 30, 1998. He served as vice president of the
Corporation from May 8, 1996, through April 30, 1998.
(8) Mr. Johnson was appointed an executive officer of the Corporation on
June 30, 1995.
8
<PAGE>
(9) Mr. Pedersen was appointed an executive officer of the Corporation on May
14, 1997.
Stock Options Granted During Fiscal 1998
The following table sets forth information concerning individual grants of
stock options made during fiscal 1998 to the Corporation's then chief executive
officers and the other named executive officers. It has not been the
Corporation's policy in the past to grant stock appreciation rights, and no such
rights were granted during fiscal 1998.
Dr. Appleton has served as a vice president of Thermo Electron since 1975
and from time to time has been granted options to purchase common stock of
Thermo Electron and certain of its subsidiaries other than the Corporation.
These options are not reported in this table as they were granted as
compensation for service to other Thermo Electron companies in capacities other
than in his capacity as the chief executive officer of the Corporation. During
fiscal 1998, no options to purchase Common Stock were granted to Dr. Appleton.
<TABLE>
<CAPTION>
Option Grants in Fiscal 1998
- ----------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Percent of Annual Rates of Stock
Total Options Price Appreciation for
Number of Securities Granted to Exercise Option Term (2)
Underlying Options Employees in Price Per Expiration ---------------
Name Granted (1) Fiscal Year Share Date 5% 10%
---- ----------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Jeffrey L. Powell 700 (TMO) 0.04%(3) $34.20 6/3/00 $3,773 $7,924
2,000 (MKA) 0.47%(3) $14.23 1/21/05 $11,580 $27,000
2,000 (ONX) 0.30%(3) $14.25 1/21/05 $11,600 $27,040
120,000 (RGI) 1.36%(3) $0.65 12/12/04 $31,200 $74,400
2,000 (TDX) 0.32%(3) $9.56 1/21/05 $7,780 $18,140
1,000 (TISI) 0.27%(3) $10.00 1/21/05 $4,070 $9,490
2,000 (TRIL) 0.99%(3) $8.25 1/21/05 $6,720 $15,660
1,500 (VIZ) 0.35%(3) $7.25 1/21/05 $4,425 $10,320
2,000 (TRCC) 0.37%(3) $4.00 1/21/05 $3,260 $7,580
- ----------------------------------------------------------------------------------------------------------------------
Robert W. Dunlap 120,000 (RGI) 1.36%(3) $0.65 12/12/04 $31,200 $74,400
- ----------------------------------------------------------------------------------------------------------------------
James Lousararian 20,000 (THN) 4.93% $6.51 3/18/03 $36,000 $79,400
48,000 (RGI) 0.54%(3) $0.65 12/12/04 $12,480 $29,760
- ----------------------------------------------------------------------------------------------------------------------
Nels R. Johnson 7,000 (THN) 1.72% $6.51 3/18/03 $12,600 $27,790
800 (TMO) 0.04%(3) $34.20 6/3/00 $4,312 $9,056
12,000 (RGI) 0.14%(3) $0.65 12/12/04 $3,120 $7,440
- ----------------------------------------------------------------------------------------------------------------------
Norman A. Pedersen 20,000 (THN) 4.93% $6.51 3/18/03 $36,000 $79,400
800 (TMO) 0.04%(3) $34.20 6/3/00 $4,312 $9,056
30,000 (RGI) 0.34%(3) $0.65 12/12/04 $7,800 $18,600
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition to the grant of options to purchase Common Stock of the
Corporation (designated in the table as THN), options have been granted
during fiscal 1998 to the named executive officers as part of Thermo
Electron's stock option program to purchase the common stock of Thermo
Electron (designated in the table as TMO), Metrika Systems Corporation
(designated in the table as MKA), ONIX Systems Inc. (designated in the
table as ONX), The Randers Group Incorporated (designated in the table as
RGI), Thermedics Detection Inc. (designated in the table as TDX), Thermo
Information Solutions Inc. (designated in the table as TISI), Thermo
TerraTech Inc. (designated in the table as TTT), Thermo Trilogy Corporation
(designated in the table as TRIL), Thermo Vision Corporation (designated in
the table as VIZ) and Trex Communications Corporation (designated in the
table as TRCC). All of the options granted during the fiscal year are
immediately exercisable at the date of grant, except options to purchase
the common stock of Thermo Information Solutions Inc., Thermo Trilogy
Corporation and Trex Communications Corporation, which are not exercisable
until the earlier of (i) 90 days after the effective date of the
registration of the company's common stock under Section 12 of the
Securities and Exchange Act of 1934 and (ii) six years from the date of
grant. In all cases, the shares acquired upon exercise are subject to
repurchase by the granting corporation at the exercise price if the
optionee ceases to be employed by such corporation or any other Thermo
Electron company. The granting corporation may exercise its repurchase
rights within six months after the termination of the optionee's
employment. For publicly traded companies, the repurchase rights generally
lapse ratably over a five- to ten-year period, depending on the option
term, which may vary from seven to twelve years, provided that the optionee
continues to be employed by the Corporation or another Thermo Electron
company. For companies whose shares are not publicly traded, the repurchase
rights lapse in their entirety on the sixth anniversary of the date of
grant. Certain options have three-year terms and the repurchase rights
lapse in their entirety on the second anniversary of the grant date. The
granting corporation may permit the holders of options to exercise options
and to satisfy tax withholding obligations by surrendering shares equal in
fair market value to the exercise price or withholding obligation.
(2) The amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5%
and 10% compounded annually from the date the respective options were
granted to their expiration date. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other expenses
associated with the exercise. Actual gains, if any, on stock option
exercises will depend on the future performance of the common stock of the
applicable corporation, the optionee's continued employment through the
option period and the date on which the options are exercised.
(3) These options were granted under stock option plans maintained by Thermo
Electron or its subsidiaries other than the Corporation as part of Thermo
Electron's compensation program and accordingly are reported as a
percentage of total options granted to employees of Thermo Electron and its
subsidiaries.
9
<PAGE>
Stock Options Exercised During Fiscal 1998 and Fiscal Year-End Option Values
The following table reports certain information regarding stock option
exercises during fiscal 1998 and outstanding stock options held at the end of
fiscal 1998 by the Corporation's then chief executive officers and the other
named executive officers. No stock appreciation rights were exercised or were
outstanding during fiscal 1998.
<TABLE>
<CAPTION>
Aggregated Option Exercises In Fiscal 1998 And Fiscal 1998 Year-End Option Values
- ---------------------------------------------------------------------------------------------------------------------------
Number of
Unexercised
Shares Options at Fiscal Value of
Acquired Value Year-End Unexercised
on Realized (Exercisable/ In-the-Money
Name Company Exercise (1) Unexercisable) (2) Options
---- ------- -------- --- ------------------ -------
<S> <C> <C> <C> <C> <C>
John P. Appleton (3) Thermo Remediation -- -- 63,000 /-- $0 /--
- ---------------------------------------------------------------------------------------------------------------------------
Jeffrey L. Powell Thermo Remediation -- -- 111,000 /-- $0 /--
Thermo Electron -- -- 35,012 /-- (4) $761,729 /--
Metrika Systems -- -- 2,000 /-- $2,666 /--
Onix Systems -- -- 2,000 /-- $0 /--
Randers Group Inc. -- -- 120,000 /-- $12,000 /--
Thermedics Detection -- -- 2,000 /-- $3,880 /--
Thermo BioAnalysis -- -- 2,000 /-- $23,250 /--
Thermo Fibergen -- -- 2,000 /-- $0 /--
Thermo Fibertek -- -- 4,500 /-- $40,784 /--
Thermo Information Soulutions -- -- -- /1,000 -- /$0 (5)
ThermoLase -- -- 5,000 /-- $0 /--
ThermoLyte -- -- -- /2,000 -- /$0 (5)
Thermo Optek -- -- 6,000 /-- $39,180 /--
ThermoQuest -- -- 6,000 /-- $39,378 /--
Thermo Sentron -- -- 2,000 /-- $0 /--
Thermo TerraTech -- -- 63,000 /-- $12,195 /--
Thermo Trilogy -- -- -- /2,000 -- /$0 (5)
Thermo Vision -- -- 1,500 /-- $188 /--
Trex Communications -- -- -- /2,000 -- /$0 (5)
Trex Medical -- -- 4,000 /-- $28,252 /--
- ---------------------------------------------------------------------------------------------------------------------------
Robert W. Dunlap Thermo Electron -- -- 10,000 /-- $50,750 /--
Randers Group Inc. -- -- 120,000 /-- $12,000 /--
Thermo TerraTech -- -- 10,000 /-- $0 /--
- ---------------------------------------------------------------------------------------------------------------------------
James Lousararian Thermo Remediation -- -- 100,500 /-- $0 /--
Thermo Electron -- -- 4,275 /-- $109,039 /--
Randers Group Inc. -- -- 48,000 /-- $4,800 /--
Thermo Fibertek -- -- 4,500 /-- $40,784 /--
Thermo TerraTech -- -- 27,000 /-- $7,317 /--
- ---------------------------------------------------------------------------------------------------------------------------
Nels R. Johnson Thermo Remediation -- -- 37,250 /-- $0 /--
Thermo Electron 1,687 $50,888 15,195 /-- $360,773 /--
Randers Group Inc. -- -- 12,000 /-- $1,200 /--
- ---------------------------------------------------------------------------------------------------------------------------
Norman A. Pedersen (6) Thermo Remediation -- -- 53,000 /-- $0 /--
Thermo Electron -- -- 6,250 /-- $30,915 /--
Randers Group Inc. -- -- 30,000 /-- $3,000 /--
Thermo TerraTech -- -- 16,000 /-- $0 /--
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
(1) Amounts shown in this column do not necessarily represent actual value
realized from the sale of the shares acquired upon exercise of the option
because in many cases the shares are not sold on exercise but continue to
be held by the executive officer exercising the option. The amounts shown
represent the difference between the option exercise price and the market
price on the date of exercise, which is the amount that would have been
realized if the shares had been sold immediately upon exercise.
(2) All of the options reported outstanding at the end of the fiscal year are
immediately exercisable as of fiscal year-end, except options to purchase
the common stock of ThermoLyte Corporation, which are not exercisable until
the earlier of (i) 90 days after the effective date of the registration of
that company's common stock under Section 12 of the Securities Exchange Act
of 1934 and (ii) nine years from the grant date, and options to purchase
the common stock of Thermo Information Solutions Inc., Thermo Trilogy
Corporation and Trex Communications Corporation, which are not exercisable
until the earlier of (i) 90 days after the effective date of the
registration of that company's common stock under Section 12 of the
Securities Exchange Act of 1934 and (ii) six years from the grant date. In
all cases, the shares acquired upon exercise are subject to repurchase by
the granting corporation at the exercise price if the optionee ceases to be
employed by such corporation or any other Thermo Electron company. The
granting corporation may exercise its repurchase rights within six months
after the termination of the optionee's employment. For publicly traded
companies, the repurchase rights generally lapse ratably over a five- to
ten-year period, depending on the option term, which may vary from seven to
twelve years, provided that the optionee continues to be employed by the
Corporation or another Thermo Electron company. For companies whose shares
are not publicly traded, the repurchase rights lapse in their entirety on
the ninth anniversary (in the case of ThermoLyte Corporation) and sixth
anniversary (in the case of Thermo Information Solutions Inc., Thermo
Trilogy Corporation and Thermo Trex Corporation) of the grant date.
Certain options have three-year terms and the repurchase rights lapse in
their entirety on the second anniversary of the grant date. The granting
corporation may permit the holder of options to exercise options and to
satisfy tax withholding obligations by surrendering shares equal in fair
market value to the exercise price or withholding obligation.
(3) Dr. Appleton has served as a vice president of Thermo Electron since 1975
and has been granted options to purchase shares of the common stock of
Thermo Electron and certain of its subsidiaries other than the Corporation
from time to time by Thermo Electron or such other subsidiaries. These
options are not reported here as they were granted as compensation for
service to Thermo Electron companies in capacities other than in his
capacity as the chief executive officer of the Corporation.
(4) Options to purchase 22,500 shares of the common stock of Thermo Electron
granted to Mr. Powell are subject to the same terms as described in
footnote (1), except that the repurchase rights of the granting corporation
generally do not lapse until the tenth anniversary of the grant date. In
the event of the employee's death or involuntary termination prior to the
tenth anniversary of the grant date, the repurchase rights of the granting
corporation shall be deemed to lapse ratably over a five-year period
commencing with the fifth anniversary of the grant date.
(5) No public market existed for the shares underlying these options as of
April 4, 1998. Accordingly, no value in excess of exercise price has been
attributed to these options.
(6) Mr. Pedersen was employed by Thermo Electron prior to joining the
Corporation and has been granted options to purchase shares of the common
stock of Thermo Electron and certain of its subsidiaries other than the
Corporation from time to time by Thermo Electron or such other
subsidiaries. These options are not reported here as they were granted as
compensation for service to Thermo Electron companies in capacities other
than in his capacity as a vice president of the Corporation.
Severance Agreements
Thermo Electron has entered into severance agreements with several key
employees, including Dr. Appleton. These agreements provide severance benefits
if there is a change in control of Thermo Electron that is not approved by the
board of directors of Thermo Electron and the employee's employment with Thermo
Electron or
11
<PAGE>
one of its majority-owned subsidiaries is terminated, for whatever reason,
within one year thereafter. For purposes of the severance agreements, a change
in control exists upon (i) the acquisition of 50% or more of the outstanding
common stock of Thermo Electron by any person without the prior approval of the
board of directors of Thermo Electron, (ii) the failure of the board of
directors of Thermo Electron, within two years after any contested election of
directors or tender or exchange offer not approved by the board of directors, to
be constituted of a majority of directors holding office prior to such event or
(iii) any other event that the board of directors of Thermo Electron determines
constitutes an effective change of control of Thermo Electron. The benefit under
these agreements is stated as an initial percentage which was established by the
board of directors of Thermo Electron and is generally based upon the employee's
age and length of service with Thermo Electron at the time of severance.
Benefits are to be paid over a five-year period. The benefit to be paid in the
first year is determined by applying this percentage to the employee's highest
annual total remuneration in any 12-month period during the preceding three
years. This benefit is reduced by 10% in each of the succeeding four years in
which benefits are paid. The initial percentage to be so applied to Dr. Appleton
is 40.1%. Assuming that severance benefits would have been payable under such
agreements as of April 4, 1998, Dr. Appleton would have received approximately
$119,906 in the first year thereof from Thermo Electron.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Compensation
All decisions on compensation for the Corporation's executive officers are
made by the human resources committee of the board of directors (the
"Committee"). In reviewing and establishing total cash compensation and stock-
based compensation for executives, the Committee follows guidelines established
by the human resources committee of the board of directors of its parent
company, Thermo Electron. The executive compensation program presently consists
of annual base salary ("salary"), short-term incentives in the form of annual
cash bonuses, and long-term incentives in the form of stock options.
The Committee believes that the compensation of executive officers should
reflect the scope of their responsibilities, the success of the Corporation, and
the contributions of each executive to that success. In addition, the Committee
believes that base salaries should approximate the mid-point of competitive
salaries derived from market surveys and that short-term and long-term incentive
compensation should reflect the performance of the Corporation and the
contributions of each executive.
External competitiveness is an important element of the Committee's
compensation policy. The competitiveness of the Corporation's total
compensation for its executives is assessed by comparing it to market data
provided by compensation consultants and by participating in annual executive
compensation surveys, primarily "Project 777," an executive compensation survey
prepared by Management Compensation Services, a division of Hewitt Associates.
The majority of firms represented in the Project 777 survey are included in the
Standard & Poor's 500 Index, but do not necessarily correspond to the companies
included in the Corporation's peer group.
Principles of internal equity are also central to the Committee's
compensation policies. Total compensation considered for the Corporation's
officers, whether cash or stock-based incentives, is also evaluated by comparing
it to compensation of other executives within the Thermo Electron organization
with comparable levels of responsibility for comparably sized business units.
The process for determining each of these elements for the Corporation's
executive officers is outlined below. For its review of the compensation of
other officers of the Corporation, the Committee follows a substantially similar
process.
Base Salary
Base salaries are set to approximate the mid-point of competitive salaries
for similar organizations of comparable size and complexity to the Corporation.
Executive salaries are adjusted gradually over time and only as necessary to
meet this objective. Increases in base salary may be moderated by other
considerations, such as geographic or regional market data, industry trends or
internal fairness within the Corporation and Thermo Electron. It is the
Committee's intention that over time the base salaries for the chief executive
officer and the other named
12
<PAGE>
executive officers will approach the mid-point of competitive data. The salary
increases in fiscal 1998 for the chief executive officer and the other named
executive officers generally reflect this practice of gradual increases and
moderation.
Cash Bonus
The Committee establishes a median potential bonus for each executive by
using the market data on total cash compensation from the same executive
compensation surveys as used to determine salaries for executives. Specifically,
the median potential bonus plus the salary of an executive officer is
approximately equal to the mid-point of competitive total cash compensation for
a similar position and level of responsibility in businesses having comparable
sales and complexity to the Corporation. The actual bonus awarded to an
executive officer may range from zero to three times the median potential bonus.
The value within the range (the bonus multiplier) is determined at the end of
each year by the Committee in its discretion. The Committee exercises its
discretion by evaluating each executive's performance using a methodology
developed by its parent corporation, Thermo Electron, and applied throughout the
Thermo Electron organization. The methodology incorporates measures of
operating returns which are designed to measure profitability and contributions
to shareholder value, and earnings growth, and are measures of corporate and
divisional performance that are evaluated using graphs developed by Thermo
Electron intended to reward performance that is perceived as above average and
to penalize performance that is perceived as below average. The measures of
operating returns used in the Committee's determinations in fiscal 1998 measured
return on net assets, growth in income, and return on sales, and the Committee's
determinations also included a subjective evaluation of the contributions of
each executive that are not captured by operating measures but are considered
important to the creation of long-term value for the Stockholders. These
measures of achievements are not financial targets that are met, not met or
exceeded. The relative weighting of the operating measures and subjective
evaluation varies among the executives, depending on their roles and
responsibilities within the organization.
The bonuses for named executive officers approved by the Committee with
respect to fiscal 1998 performance in each instance were below the median
potential bonus, except for one executive officer whose bonus exceeded the
median potential bonus, due to the measures of operating returns used in the
Committee's determinations as described above. However, certain of the named
executive officers elected to forego their bonuses for fiscal 1998 in light of
the operating and stock price performance of the Corporation.
Stock Option Program
The primary goal of the Corporation and its parent companies is to excel in
the creation of long-term value for the Stockholders. The principal incentive
tool used to achieve this goal is the periodic award to key employees of options
to purchase common stock of the Corporation and other Thermo Electron companies.
The Committee and management believe that awards of stock options to
purchase the shares of both the Corporation and other companies within the
Thermo Electron group of companies accomplish many objectives. The grant of
options to key employees encourages equity ownership in the Corporation, and
closely aligns management's interests to the interests of all the Stockholders.
The emphasis on stock options also results in management's compensation being
closely linked to stock performance. In addition, because they are subject to
vesting periods of varying duration and to forfeiture if the employee leaves the
Corporation prematurely, stock options are an incentive for key employees to
remain with the Corporation long-term. The Committee believes stock option
awards in its parent companies, Thermo TerraTech and Thermo Electron, and the
other majority-owned subsidiaries of Thermo Electron are important tools in
providing incentives for performance within the entire organization.
In determining awards, the Committee considers for each officer the annual
value of all options to purchase shares of the Corporation and other companies
within the Thermo Electron organization that vest in the next year and compares
the individual's total compensation using this value to competitive data. The
Committee uses a modified Black-Scholes option pricing model to determine the
value of an option award. In addition, the Committee considers the aggregate
amount of net awards to purchase shares of Common Stock granted to all employees
over the last five years to monitor the aggregate number of awards to all
employees. In reviewing the aggregate number of awards, the Committee considers
such factors as the size of the company, its stage of development and its growth
strategy, as well as the aggregate awards and option practices of comparably
situated companies.
13
<PAGE>
The Committee periodically awards stock options based on its assessment of
the total compensation of each executive, the actual and anticipated
contributions of each executive (which includes a subjective assessment by the
Committee of the value of the executive's future potential within the
organization), as well as the value of previously awarded options as described
above. Such discretionary option awards were made to certain of the named
executive officers in fiscal 1998. Certain options awarded in fiscal 1998 to
the named executive officers with respect to the common stock of the
Corporation's parent company, Thermo Electron, were made pursuant to a program
that awards options to certain eligible employees annually based on the number
of shares of Thermo Electron common stock held by the employee, as an incentive
to buy and hold shares of Thermo Electron common stock.
Stock Ownership Policies
The Corporation's compensation program is also designed to encourage
executives to own shares of the Corporation's Common Stock. The Committee
believes that encouraging executives to retain stock acquired through its stock
option program provides an additional incentive for executive officers to follow
strategies designed to maximize long-term value to Stockholders.
The Committee established a stock holding policy for executive officers of
the Corporation in fiscal 1997 that required executive officers to own a
multiple of their compensation in shares of the Corporation's Common Stock. For
the chief executive officer, the multiple was one times his base salary and
reference bonus for the calendar year. For all other officers, the multiple was
one times the officer's base salary. The Committee deemed it appropriate to
permit officers to achieve these ownership levels over a three-year period. The
policy was amended in 1998 to apply only to the chief executive officer.
In order to assist officers in complying with the policy, the Committee
also adopted in fiscal 1997 a stock holding assistance plan under which the
Corporation was authorized to make interest-free loans to officers to enable
them to purchase shares of the Common Stock in the open market. The loans are
required to be repaid upon the earlier of demand or the fifth anniversary of the
grant date, unless otherwise authorized by the Committee. During fiscal 1998,
Mr. Powell, while president and chief executive officer of the Corporation,
received loans in the principal amount of $59,940.50 under this plan, the entire
amount of which was outstanding as of June 29, 1998. In fiscal 1998, Mr.
Pedersen, a vice president of the Corporation, received loans in the principal
amount of $45,828.50 under this plan, the entire amount of which was outstanding
as of June 29, 1998. In fiscal 1998, Mr. Lousararian, a vice president of the
Corporation, received loans in the principal amount of $47,572.50 under the
plan, the entire amount of which was outstanding as of June 29, 1998. In fiscal
1998, Dr. Appleton, formerly the Corporation's chief executive officer, received
loans in the principal amount of $61,867.50, the entire amount of which was
outstanding as of June 29, 1998. This plan was also amended in 1998 to apply
only to the chief executive officer. See "Relationship with Affiliates - Stock
Holding Assistance Plan."
The Committee also has adopted a policy requiring its executive officers to
hold shares of the Corporation's Common Stock acquired upon the exercise of
stock options granted by the Corporation. Under this policy, executive officers
are required to hold one-half of their net option exercises over a period of
five years. The net option exercise is determined by calculating the number of
shares acquired upon exercise of a stock option, after deducting the number of
shares that could have been traded to exercise the option and the number of
shares that could have been surrendered to satisfy tax withholding obligations
attributable to the exercise of the options.
Policy on Deductibility of Compensation
The Committee has also considered the application of Section 162(m) of the
Internal Revenue Code to the Corporation's compensation practices. Section
162(m) limits the tax deduction available to public companies for annual
compensation paid to senior executives in excess of $1 million, unless the
compensation qualifies as "performance based" or is otherwise exempt from
Section 162(m). The annual cash compensation paid to individual executives does
not approach the $1 million threshold, and it is believed that the stock
incentive plans of the Corporation qualify as "performance based." Therefore,
the Committee does not believe any further action is necessary in order to
comply with Section 162(m). From time to time, the Committee will reexamine the
Corporation's compensation practices and the effect of Section 162(m).
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Fiscal 1998 CEO Compensation
Dr. John P. Appleton served as the Corporation's chief executive officer
for less than two months of fiscal 1998, although he continues to serve as
chairman of the board. On May 14, 1997, Mr. Jeffrey L. Powell was promoted to
the position of chief executive officer from chief operating officer.
Cash compensation for Dr. Appleton is reviewed by both the Committee and
the human resources committees of the boards of directors of Thermo TerraTech
and Thermo Electron, due to his responsibilities at the Corporation, as chief
executive officer of Thermo TerraTech and as a vice president of Thermo
Electron. Each committee evaluates Dr. Appleton's performance and proposed
compensation using a process similar to that used for the other executive
officers of the Corporation. At the Thermo Electron and Thermo TerraTech
levels, Dr. Appleton is evaluated on his performance related to the Corporation
as well as other operating units of Thermo Electron and Thermo TerraTech for
which he is responsible, weighted in accordance with the amount of time and
effort devoted to each operation. The Corporation's Committee then reviews the
analysis and determinations of the Thermo TerraTech and Thermo Electron
committees, makes an independent assessment of Dr. Appleton's performance as it
relates to the Corporation using criteria similar to those used for the other
executive officers of the Corporation, and then agrees to an appropriate
allocation of Dr. Appleton's compensation to be paid by the Corporation.
In May 1998, the Committee conducted its review of Dr. Appleton's proposed
bonus for fiscal 1998 performance. Dr. Appleton's bonus for fiscal 1998
performance approved by the Committee was below the median potential bonus, due
to the measures of operating returns used in the Committee's determinations, as
described under the caption "Cash Bonus." Dr. Appleton elected to forego his
bonus in light of the Corporation's operating and stock price performance in
fiscal 1998. In December 1997, the Committee agreed to an allocation of 20% of
Dr. Appleton's salary for calendar 1997 to the Corporation, based on his
responsibilities at the Corporation as chief executive officer and chairman.
The salary and bonus of Mr. Powell, during his tenure as the president and
chief executive officer of the Corporation, were established using the same
criteria as for the salaries and bonuses of the Corporation's other named
executive officers. His bonus for fiscal 1998 performance approved by the
Committee was below the median potential bonus, due to the measures of operating
returns used in the Committee's determinations, as described under the caption
"Cash Bonus." Mr. Powell elected to forego his bonus in light of the
Corporation's operating and stock price performance in fiscal 1998.
Awards to the chief executive officer of options to purchase shares of
Common Stock are reviewed and determined periodically by the Committee using
criteria similar to those used for other executive officers of the Corporation,
as described above under the caption "Stock Option Programs." No award of
options to purchase shares of the Common Stock was made by the Committee to
either Dr. Appleton or Mr. Powell in fiscal 1998.
In addition to stock option awards by the Committee, Mr. Powell was awarded
options to purchase shares of the Common Stock of majority-owned subsidiaries of
Thermo Electron or Thermo TerraTech from time to time due to his position as a
chief executive officer of a majority-owned subsidiary of Thermo Electron or
Thermo TerraTech. The awards to Mr. Powell in fiscal 1998 of options to
purchase the common stock of Metrika Systems Corporation, ONIX Systems Inc.,
Thermedics Detection Inc., Thermo Information Solutions Inc., Thermo Trilogy
Corporation, Thermo Vision Corporation, and Trex Communications Corporation were
made under this stock option program. The award of options to purchase the
common stock of The Randers Group Incorporated was made to Mr. Powell in his
capacity as vice president of Thermo TerraTech, the Corporation's parent. Mr.
Powell also received an award of options to purchase 700 shares of the common
stock of Thermo Electron in fiscal 1998 made by the human resources committee of
Thermo Electron under a program that awards options to certain eligible
employees annually based on the number of shares of the common stock of Thermo
Electron held by the employee, as an incentive to buy and hold Thermo Electron's
common stock.
Dr. Frank E. Morris (Chairman)
Dr. Elias P. Gyftopoulos
Mr. Fred Holubow
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COMPARATIVE PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Corporation
include in this proxy statement a line-graph presentation comparing cumulative,
five-year shareholder returns for the Corporation's Common Stock with a broad-
based market index and either a nationally recognized industry standard or an
index of peer companies selected by the Corporation. The Corporation's Common
Stock has been publicly traded only since December 9, 1993 and, as a result, the
following graph commences as of such date. The Corporation has compared its
performance with the American Stock Exchange Market Value Index and a peer group
of companies consisting of Ecology & Environmental Inc., Fluor Daniel GTI, Inc.
(formerly Groundwater Technology Inc.), Safety Kleen Corp., TRC Cos. Inc. and
Roy F. Weston Inc.
Comparison of Total Return Among Thermo Remediation Inc.,
the American Stock Exchange Market Value Index and the
Corporation's Peer Group from December 9, 1993 to April 3, 1998
[LINE GRAPH APPEARS HERE]
12/9/93 3/31/94 3/31/95 3/29/96 3/27/97 4/3/98
THN 100 108 158 173 89 82
AMEX 100 95 99 122 124 160
PEER GROUP 100 90 105 89 93 172
The total return for the Corporation's Common Stock (THN), the American
Stock Exchange Market Value Index (AMEX) and the Corporation's peer group (PEER
GROUP) assumes the reinvestment of dividends. Cash dividends of $.10 per share
of Common Stock were paid on September 15, 1995, and March 20, 1996,
respectively, to shareholders of record on August 30, 1995, and March 1, 1996,
respectively. Cash dividends of $.10 per share of Common Stock were paid on
September 5, 1996, and March 24, 1997, respectively, to shareholders of record
on August 22, 1996, and March 3, 1997, respectively. Cash dividends of $.10 per
share of Common Stock were paid on September 10, 1997, and March 23, 1998,
respectively, to shareholders of record on August 15, 1997, and March 2, 1998,
respectively. No assurance can be given, however, that the Corporation will
continue to pay dividends in the future. The American Stock Exchange Market
Value Index tracks the aggregate performance of equity securities of companies
listed on the American Stock Exchange ("AMEX"). The Corporation's Common Stock
is traded on the AMEX under the ticker symbol "THN."
16
<PAGE>
RELATIONSHIP WITH AFFILIATES
Thermo Electron has adopted a strategy of selling a minority interest in
subsidiary companies to outside investors as an important tool in its future
development. As part of this strategy, Thermo TerraTech has created the
Corporation as a publicly held subsidiary, and Thermo Electron and certain of
its subsidiaries have created several other privately and publicly held
subsidiaries. From time to time, Thermo Electron and its subsidiaries will
create other majority-owned subsidiaries as part of its spinout strategy. (The
Corporation and the other majority-owned Thermo Electron subsidiaries are
hereinafter referred to as the "Thermo Subsidiaries.")
Thermo Electron and each of the Thermo Subsidiaries recognize that the
benefits and support that derive from their mutual affiliation are essential
elements of their individual performance. Accordingly, Thermo Electron and each
of the Thermo Subsidiaries have adopted the Thermo Electron Corporate Charter
(the "Charter") to define the relationships and delineate the nature of such
cooperation among themselves. The purpose of the Charter is to ensure that (1)
all of the companies and their stockholders are treated consistently and fairly,
(2) the scope and nature of the cooperation among the companies, and each
company's responsibilities, are adequately defined, (3) each company has access
to the combined resources and financial, managerial and technological strengths
of the others, and (4) Thermo Electron and the Thermo Subsidiaries, in the
aggregate, are able to obtain the most favorable terms from outside parties.
To achieve these ends, the Charter identifies the general principles to be
followed by the companies, addresses the role and responsibilities of the
management of each company, provides for the sharing of group resources by the
companies and provides for centralized administrative, banking and credit
services to be performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by members, coordinating
the access of Thermo Electron and the Thermo Subsidiaries (the "Thermo Group")
to external financing sources, ensuring compliance with external financial
covenants and internal financial policies, assisting in the formulation of long-
range planning and providing other banking and credit services. Pursuant to the
Charter, Thermo Electron may also provide guarantees of debt or other
obligations of the Thermo Subsidiaries or may obtain external financing at the
parent level for the benefit of the Thermo Subsidiaries. In certain instances,
the Thermo Subsidiaries may provide credit support to, or on behalf of, the
consolidated entity or may obtain financing directly from external financing
sources. Under the Charter, Thermo Electron is responsible for determining that
the Thermo Group remains in compliance with all covenants imposed by external
financing sources, including covenants related to borrowings of Thermo Electron
or other members of the Thermo Group, and for apportioning such constraints
within the Thermo Group. In addition, Thermo Electron establishes certain
internal policies and procedures applicable to members of the Thermo Group. The
cost of the services provided by Thermo Electron to the Thermo Subsidiaries is
covered under existing corporate services agreements between Thermo Electron and
each of the Thermo Subsidiaries.
The Charter presently provides that it shall continue in effect so long as
Thermo Electron and at least one Thermo Subsidiary participate. The Charter may
be amended at any time by agreement of the participants. Any Thermo Subsidiary,
including the Corporation, can withdraw from participation in the Charter upon
30 days' prior notice. In addition, Thermo Electron may terminate a subsidiary's
participation in the Charter in the event the subsidiary ceases to be controlled
by Thermo Electron or ceases to comply with the Charter or the policies and
procedures applicable to the Thermo Group. A withdrawal from the Charter
automatically terminates the corporate services agreement and tax allocation
agreement (if any) in effect between the withdrawing company and Thermo
Electron. The withdrawal from participation does not terminate outstanding
commitments to third parties made by the withdrawing company, or by Thermo
Electron or other members of the Thermo Group, prior to the withdrawal. In
addition, a withdrawing company is required to continue to comply with all
policies and procedures applicable to the Thermo Group and to provide certain
administrative functions mandated by Thermo Electron so long as the withdrawing
company is controlled by or affiliated with Thermo Electron.
As provided in the Charter, the Corporation and Thermo Electron have
entered into a Corporate Services Agreement (the "Services Agreement") under
which Thermo Electron's corporate staff provides certain administrative
services, including certain legal advice and services, risk management, certain
employee benefit administration, tax advice and preparation of tax returns,
centralized cash management and certain financial and other services to the
Corporation. The Corporation was assessed an annual fee equal to 1.0% of the
Corporation's revenues for these services for calendar 1996 and 1997. The
annual fee has been reduced to 0.8% of the
17
<PAGE>
Corporation's total revenues for calendar 1998. The fee is reviewed annually and
may be changed by mutual agreement of the Corporation and Thermo Electron.
During fiscal 1998, Thermo Electron assessed the Corporation $1,220,000 in fees
under the Services Agreement. Management believes that the charges under the
Services Agreement are reasonable and that the terms of the Services Agreement
are fair to the Corporation. For items such as employee benefit plans, insurance
coverage and other identifiable costs, Thermo Electron charges the Corporation
based on charges attributable to the Corporation. The Services Agreement
automatically renews for successive one-year terms, unless canceled by the
Corporation upon 30 days' prior notice. In addition, the Services Agreement
terminates automatically in the event the Corporation ceases to be a member of
the Thermo Group or ceases to be a participant in the Charter. In the event of a
termination of the Services Agreement, the Corporation will be required to pay a
termination fee equal to the fee that was paid by the Corporation for services
under the Services Agreement for the nine-month period prior to termination.
Following termination, Thermo Electron may provide certain administrative
services on an as-requested basis by the Corporation or as required in order to
meet the Corporation's obligations under Thermo Electron's policies and
procedures. Thermo Electron will charge the Corporation a fee equal to the
market rate for comparable services if such services are provided to the
Corporation following termination.
As of April 4, 1998, $8,000,000 of the Corporation's cash equivalents were
invested in a repurchase agreement with Thermo Electron. Under this agreement,
the Corporation in effect lends excess cash to Thermo Electron, which Thermo
Electron collateralizes with investments principally consisting of corporate
notes, U.S. government agency securities, money market funds and other
marketable securities, in the amount of at least 103% of such obligation. The
Corporation's funds subject to the repurchase agreement are readily convertible
into cash by the Corporation. The repurchase agreement earns a rate based on the
90-day Commercial Paper Composite Rate plus 25 basis points, set at the
beginning of each quarter.
From time to time, the Corporation may transact business with other
companies in the Thermo Group.
In fiscal 1997, the Corporation paid Thermo Coleman Corporation, a
majority-owned subsidiary of Thermo Electron, $86,000, for a Global Positioning
System unit and related services. In fiscal 1998, the Corporation paid Thermo
Coleman Corporation $85,000 for upgrades to that unit and related services.
In fiscal 1998 the Corporation entered into a joint venture with Thermo
EuroTech N.V., a majority-owned subsidiary of Thermo TerraTech, to provide soil-
remediation services in Europe. In fiscal 1998, the Corporation derived
revenues of $1,318,000 from Thermo EuroTech N.V. in connection with this joint
venture.
At April 4, 1998, Thermo Electron and its other subsidiaries owed the
Corporation an aggregate of $667,000 for amounts due under the Corporate
Services Agreement and related administrative charges, for other products and
services, and for miscellaneous items. The largest amount of net indebtedness
owed by Thermo Electron and its other subsidiaries to the Corporation since
March 29, 1997 was $915,000. These amounts do not bear interest and are
expected to be paid in the normal course of business.
Stock Holding Assistance Plan
In fiscal 1997, the Corporation adopted a stock holding policy which
requires its executive officers to acquire and hold a minimum number of shares
of Common Stock. In order to assist the executive officers in complying with
the policy, the Corporation also adopted a stock holding assistance plan under
which it may make interest-free loans to certain key employees, including its
executive officers, to enable such employees to purchase the Common Stock in the
open market. During fiscal 1998, Mr. Powell, a vice president of the
Corporation, received loans in the principal amount of $59,940.50 under this
plan to purchase 10,000 shares, the entire amount of which was outstanding as of
June 29, 1998. In fiscal 1998, Mr. Pedersen, a vice president of the
Corporation, received loans in the principal amount of $45,828.50 under this
plan to purchase 7,401 shares, the entire amount of which was outstanding as of
June 29, 1998. In fiscal 1998, Mr. Lousararian, a vice president of the
Corporation, received loans in the principal amount of $47,572.50 under the plan
to purchase 7,700 shares, the entire amount of which was outstanding as of June
29, 1998. In fiscal 1998, Dr. Appleton, formerly the Corporation's chief
executive officer, received loans in the principal amount of $61,867.50 under
the plan to purchase 10,000 shares, the entire amount of which was outstanding
as of June 29, 1998. This plan was also amended in 1998 to apply only to the
chief executive officer. Loans will be repaid upon the earlier of demand or the
fifth anniversary of the date of the
18
<PAGE>
loan, unless otherwise authorized by the human resources committee of the board
of directors. This policy and plan were amended in 1998 to apply only to the
chief executive officer of the Corporation in the future.
-- PROPOSAL 2 --
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO
CHANGE THE NAME OF THE CORPORATION
The board of directors has proposed an amendment to the Corporation's
Certificate of Incorporation to change the name of the Corporation to
"ThermoRetec Corporation" and has recommended that the stockholders approve the
amendment. The board of directors has recommended this change in the
Corporation's name to reflect the broadening of the Corporation's business
beyond soil remediation to include a full range of integrated
environmental/liability management services including recycling reuse,
monitoring and analysis, remediation and construction, and international
services. The board of directors believes that the new name will assist the
Corporation in creating a broader market identity and presence for the
Corporation as a whole, taking advantage of the synergies between its respective
parts. Management believes that changing the Corporation's name to ThermoRetec
Corporation will result in an opportunity for an enhanced market identity and
presence for the Corporation.
Amendment to the Certificate of Incorporation
It is proposed that the name change be effected by amending Article First
of the Corporation's Certificate of Incorporation to read as follows: "The name
of the corporation is: ThermoRetec Corporation."
Recommendation
The board of directors believes that the name change to ThermoRetec
Corporation is in the best interest of the Corporation and its Stockholders and
recommends that the Stockholders vote FOR amending the Corporation's Certificate
of Incorporation. Thermo Electron, which beneficially owned approximately 71.1%
of the outstanding voting stock of the Corporation on May 30, 1998, has
indicated its intention to vote for the proposal.
The affirmative vote of a majority of the Common Stock outstanding and
entitled to vote as of the record date is required to adopt the amendment of
Article First of the Corporation's Certificate of Incorporation. The board of
directors recommends that you vote FOR adoption of the proposed name change. If
not otherwise specified, proxies will be voted FOR approval of this proposal.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has appointed Arthur Andersen LLP as independent
public accountants for fiscal 1999. Arthur Andersen LLP has acted as independent
public accountants for the Corporation since its inception in 1991.
Representatives of that firm are expected to be present at the Meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to questions. The board of directors has established an
audit committee, presently consisting of two outside directors, the purpose of
which is to review the scope and results of the audit.
OTHER ACTION
Management is not aware at this time of any other matters that will be
presented for action at the Meeting. Should any such matters be presented, the
proxies grant power to the proxy holders to vote shares represented by the
proxies in the discretion of such proxy holders.
19
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be included in the proxy statement
and form of proxy relating to the 1999 Annual Meeting of the Stockholders of the
Corporation and to be presented at such meeting must be received by the
Corporation for inclusion in the proxy statement and form of proxy no later than
March 30, 1999. Notices of Stockholder proposals submitted outside the
processes of Rule 14a-8 of the Securities Exchange Act of 1934, as amended
(relating to proposals to be presented at the meeting but not included in the
Corporation's proxy statement and form of proxy), will be considered untimely --
and thus the Corporation's proxy may confer discretionary voting authority on
the persons named in the proxy with regard to such proposals -- if received
after June 12, 1999.
SOLICITATION STATEMENT
The cost of this solicitation of proxies will be borne by the Corporation.
Solicitation will be made primarily by mail, but regular employees of the
Corporation may solicit proxies personally, by telephone or by telegram.
Brokers, nominees, custodians and fiduciaries are requested to forward
solicitation materials to obtain voting instructions from beneficial owners of
stock registered in their names, and the Corporation will reimburse such parties
for their reasonable charges and expenses in connection therewith.
Concord, Massachusetts
July 23, 1998
20
<PAGE>
FORM OF PROXY
THERMO REMEDIATION INC
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
SEPTEMBER 15, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints John P. Appleton, John N. Hatsopoulos and
Melissa F. Riordan, or any one of them in the absence of the others, as
attorneys and proxies of the undersigned, with full power of substitution, for
and in the name of the undersigned, to represent the undersigned at the Annual
Meeting of the Stockholders of Thermo Remediation Inc., a Delaware corporation
(the "Company"), to be held at the offices of Thermo Electron Corporation, 81
Wyman Street, Waltham, Massachusetts, on Tuesday, September 15, 1998, at 2:00
p.m., and at any adjournment or postponement thereof, and to vote all shares of
common stock of the Company standing in the name of the undersigned on July 23,
1998, with all of the powers the undersigned would possess if personally present
at such meeting:
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
<PAGE>
Please mark
[ x ] votes as in this
example.
1. ELECTION OF DIRECTORS
FOR [ ] WITHHELD [ ]
--------------------------------------
FOR all nominees except as noted above
Nominees: John P. Appleton, Robert W. Dunlap, Elias P. Gyftopoulos, Fred
Holubow, Theo Melas-Kyriazi, Frank E. Morris and William A. Rainville
2. To amend the Corporation's Certificate FOR AGAINST ABSTAIN
of Incorporation to change the name of [ ] [ ] [ ]
the Corporation to ThermoRetec Corporation.
4. In their discretion on such other matters as may properly come before the
Meeting.
The shares represented by this Proxy will be voted "FOR" the proposals set forth
above if no instruction to the contrary is indicated or if no instruction is
given.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Copies of the Notice of Meeting and of the Proxy Statement have been received by
the undersigned.
PLEASE PROMPTLY DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE DATE
--------------------------------------- -----------------
SIGNATURE DATE
--------------------------------------- -----------------
(Note: Please sign exactly as your name appears hereon. Executors,
administrators, trustees, etc. should so indicate when signing, giving
full title as such. If signer is a corporation, execute in full
corporate name by authorized officer. If shares are held by joint
tenants or as community property, both holders should sign.).
