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
THERMOSPECTRA CORPORATION
-------------------------
(Name of Registrant as Specified in Charter)
--------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ]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: ______________________________________________
(2) Aggregate number of securities to which transaction
applies: ______________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined): _________________________
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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
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Form or Schedule and the date of its filing.
(1) Amount Previously Paid: _______________________________
(2) Form, Schedule or Registration Statement No.: _________
(3) Filing Party: _________________________________________
(4) Date Filed: ___________________________________________
Notes:
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THERMOSPECTRA CORPORATION
81 Wyman Street
Waltham, Massachusetts 02254
April 29, 1997
Dear Stockholder:
The enclosed Notice calls the 1997 Annual Meeting of the
Stockholders of ThermoSpectra Corporation. I
respectfully request all Stockholders attend this meeting, if
possible.
Our Annual Report for the year ended December 28, 1996, is
enclosed. I hope you will read it carefully. Feel free to forward
any questions you may have if you are unable to be present at the
meeting.
Enclosed with this letter is a proxy authorizing three
officers of the Corporation to vote your shares for you if you do
not attend the meeting. Whether or not you are able to attend the
meeting, I urge you to complete your proxy and return it to our
transfer agent, American Stock Transfer and Trust Company, in the
enclosed addressed, postage-paid envelope, as a quorum of the
Stockholders must be present at the meeting, either in person or
by proxy.
I would appreciate your immediate attention to the mailing
of this proxy.
Yours very truly,
THEO MELAS-KYRIAZI
President and Chief Executive Officer
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THERMOSPECTRA CORPORATION
81 Wyman Street
Waltham, Massachusetts 02254
April 29, 1997
To the Holders of the Common Stock of
THERMOSPECTRA CORPORATION
NOTICE OF ANNUAL MEETING
The 1997 Annual Meeting of the Stockholders of ThermoSpectra
Corporation (the "Corporation") will be held on Monday, June 2,
1997, at 10:00 a.m. at The Hyatt Regency Hotel, Hilton Head,
South Carolina. The purpose of the meeting is to consider and
take action upon the following matters:
1. Election of five directors.
2. Such other business as may properly be brought before the
meeting and any adjournment thereof.
The transfer books of the Corporation will not be closed
prior to the meeting, but, pursuant to appropriate action by the
Board of Directors, the record date for the determination of the
Stockholders entitled to notice of and vote at the meeting is
April 7, 1997.
The By-laws require that the holders of a majority of the
stock issued and outstanding and entitled to vote be present or
represented by proxy at the meeting in order to constitute a
quorum for the transaction of business. It is important that your
shares be represented at the meeting regardless of the number of
shares you may hold. Whether or not you are able to be present in
person, please sign and return promptly the enclosed proxy in the
accompanying envelope, which requires no postage if mailed in the
United States.
This Notice, the proxy and proxy statement enclosed herewith
are sent to you by order of the Board of Directors.
SANDRA L. LAMBERT
Secretary
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PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of
ThermoSpectra Corporation (the "Corporation") for use at the 1997
Annual Meeting of the Stockholders (the "Meeting") to be held on
Monday, June 2, 1997, at 10:00 a.m. at The Hyatt Regency Hotel,
Hilton Head, South Carolina and any adjournment thereof. The
mailing address of the executive office of the Corporation is 81
Wyman Street, Waltham, Massachusetts 02254. This proxy statement
and the enclosed proxy were first furnished to Stockholders of
the Corporation on or about May 2, 1997.
VOTING PROCEDURES
The Board of Directors intends to present to the Meeting the
election of five directors, constituting the entire Board of
Directors.
The representation in person or by proxy of a majority of
the outstanding shares of common stock, $.01 par value, of the
Corporation ("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 and as the
individuals named as proxy holders on the proxy deem advisable on
all other matters as may properly come before the Meeting.
In order to be elected a director, a nominee must receive
the affirmative vote of a majority of the shares of Common Stock
present and entitled to vote on the election. Withholding
authority to vote for a nominee for director or an instruction to
abstain from voting on a proposal will be treated as shares
present and entitled to vote and, for purposes of determining the
outcome of the vote, will have the same effect as a vote against
the nominee or a proposal. With respect to the election of
directors, broker "non-votes" will not be treated as shares
present and entitled to vote on a voting matter and will have no
effect on the outcome of the vote. 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.
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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
April 7, 1997 consisted of 12,449,991 shares of Common Stock.
Only Stockholders of record at the close of business on April 7,
1997 are entitled to vote at the Meeting. Each share is entitled
to one vote.
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- PROPOSAL 1 -
ELECTION OF DIRECTORS
Five 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
company, Thermo Instrument Systems Inc. ("Thermo Instrument"), a
manufacturer of analytical, environmental monitoring and process
control instrumentation, and Thermo Instrument's parent company,
Thermo Electron Corporation ("Thermo Electron"), a diversified
high technology company, is reported under the caption "Stock
Ownership." All of the nominees are currently directors of the
Corporation. Mr. Michael P. Stansky, a director of the
Corporation since October 1994, is not standing for re-election.
Robert E. Mr. Finnegan, 69, has been a director of the
Finnigan Corporation since April 1997. Mr. Finnigan
served in various executive roles and was a
director of Finnigan Corporation, an analytical
instrument manufacturer, from 1967 to 1990, when
it was acquired by Thermo Instrument. Since
1990, he has served as a consultant from time to
time to Thermo Instrument on technology issues,
and as an advisor to Hambrecht & Quist's
Environmental Technology Fund, a venture capital
fund. He is a director of Strategic Diagnostics
Inc.
Elias P. Dr. Gyftopoulos, 69, has been a director of the
Gyftopoulos Corporation since its inception in August 1994.
He 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 20 years prior
to his retirement in 1996. Dr. Gyftopoulos is
also a director of Thermo Electron, Thermo
BioAnalysis Corporation, Thermo Cardiosystems
Inc., ThermoLase Corporation, Thermo Remediation
Inc., Thermo Voltek Corp. and Trex Medical
Corporation.
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Earl R. Lewis Mr. Lewis, 53, has been a director of the
Corporation since its inception in August 1994.
He has also been chairman of the board since June
1995 and was vice chairman of the board from
August 1994 to June 1995. Mr. Lewis has been
president and chief operating officer of Thermo
Instrument since March 1997 and January 1996,
respectively, was executive vice president of
Thermo Instrument from January 1996 to March
1997, was a senior vice president of Thermo
Instrument from January 1994 to January 1996, and
was a vice president of Thermo Instrument from
March 1992 to January 1994. He has also been the
chief executive officer of Thermo Optek
Corporation, a majority owned subsidiary of
Thermo Instrument, since its inception in August
1995, and was president of Thermo Optek
Corporation from August 1995 to March 1997. Mr.
Lewis is also a director of Thermo BioAnalysis
Corporation, Thermo Optek Corporation,
ThermoQuest Corporation and Trex Medical
Corporation.
Theo Mr. Melas-Kyriazi, 37, has been president, chief
Melas-Kyriazi executive officer and a director of the
Corporation since its inception in August 1994.
Mr. Melas-Kyriazi was treasurer of Thermo
Instrument and Thermo Electron from 1988 to
August 1994. Mr. Melas-Kyriazi is also a
director of Thermo Remediation Inc. and Thermo
Voltek Corp.
Arvin H. Mr. Smith, 67, has been a director of the
Smith Corporation since its inception in August 1994
and was chairman of the board from August 1994 to
June 1995. Mr. Smith has been the chairman and
chief executive officer of Thermo Instrument
since March 1997 and 1986, respectively, and was
also president of Thermo Instrument from 1986
until March 1997. Mr. Smith has been an
executive vice president of Thermo Electron since
1991 and was a senior vice president of Thermo
Electron from 1986 to 1991. Mr. Smith is also a
director of Thermo BioAnalysis Corporation,
Thermo Instrument, Thermo Optek Corporation,
Thermo Power Corporation and ThermoQuest
Corporation.
Committees of the Board of Directors and Meetings
The Board of Directors has established an Audit Committee
and a Human Resources Committee, each consisting solely of
outside directors. The present members of the Audit Committee are
Dr. Gyftopoulos and Mr. Stansky (Chairman). The Audit Committee
reviews the scope of the audit with the Corporation's independent
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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.
Gyftopoulos (Chairman) and Mr. Stansky. 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 seven times,
the Audit Committee met twice and the Human Resources Committee
met five times during fiscal 1996. Each director attended at
least 75% of all meetings of the Board of Directors and
committees on which he served held during fiscal 1996.
Compensation of Directors
Cash Compensation
Directors who are not employees of the Corporation, of
Thermo Electron or of any other companies affiliated with Thermo
Electron (also referred to as "outside directors") receive an
annual retainer of $2,000 and a fee of $1,000 per day for
attending regular meetings of the Board of Directors and $500 per
day for participating in meetings of the Board of Directors held
by means of conference telephone and for participating in certain
meetings of committees of the Board of Directors. Payment of
directors' fees is made quarterly. Messrs. Smith, Lewis and
Melas-Kyriazi are all employees of Thermo Electron companies 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
Under the Deferred Compensation Plan for Directors (the
"Deferred Compensation Plan"), a director has the right to defer
receipt of his cash fees until he ceases to serve as a director,
dies or retires from his principal occupation. In the event of a
change in control or proposed change in control of the
Corporation that is not approved by the Board of Directors,
deferred amounts become payable immediately. Either of the
following is deemed to be a change of control: (a) the
occurrence, without the prior approval of the Board of Directors,
of the acquisition, directly or indirectly, by any person of 50%
or more of the outstanding Common Stock or the outstanding common
stock of Thermo Instrument 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
Instrument 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
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of the Corporation's Common Stock. When payable, amounts deferred
may be disbursed solely in shares of Common Stock accumulated
under the Deferred Compensation Plan. A total of 25,000 shares of
Common Stock have been reserved for issuance under the Deferred
Compensation Plan. As of March 1, 1997, no deferred units equal
to shares of Common Stock were accumulated under the Deferred
Compensation Plan.
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Directors Stock Option Plan
The Corporation's directors stock option plan (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 provides for the grant of stock
options upon a director's initial appointment and, beginning in
1999, awards options to purchase 1,000 shares annually to outside
directors. A total of 100,000 shares of Common Stock have been
reserved for issuance under the Directors Plan.
Under the Directors Plan, each new outside director who
joined the Board of Directors during 1995 was granted an option
to purchase 20,000 shares of Common Stock. The size of awards to
new directors appointed to the Board of Directors after 1995 is
reduced by 5,000 shares in each subsequent year. Outside
directors who join the Board of Directors after 1998 would not
receive an option grant upon their appointment or election to the
Board of Directors, but would be eligible to participate in the
annual option awards described below. Options evidencing initial
grants to directors are exercisable six months after the date of
grant. The shares acquired upon exercise are subject to
restrictions on transfer and the right of the Corporation to
repurchase such shares at the exercise price in the event the
director ceases to serve as a director of the Corporation or any
other Thermo Electron company. The restrictions and repurchase
rights lapse or are deemed to have lapsed in equal annual
installments of 5,000 shares per year, 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 since the grant date. These options
expire on the fifth anniversary of the grant date, unless the
director dies or otherwise ceases to serve as a director of the
Corporation or any other Thermo Electron company prior to that
date.
Outside directors will also receive an annual grant of
options to purchase 1,000 shares of Common Stock, commencing with
the Annual Meeting of the Stockholders to be held in 1999. The
annual grant will be made at the close of business on the date of
each Annual Meeting of the Stockholders of the Corporation to
each outside director then holding office. 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 would
be subject to repurchase by the Corporation at the exercise price
if the recipient ceased 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
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reported on the American Stock Exchange (or other principal
market on which the common stock is then traded) for the five
trading days preceding and including the date of grant, or, if
the shares are not then traded, at the last price per share paid
by third parties in an arms-length transaction prior to the
option grant. As of March 1, 1997, options to purchase 60,000
shares of Common Stock were available for future grant under the
Directors Plan.
Stock Ownership Policies for Directors
During 1996, 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 are
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
1996, 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 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 Instrument,
the Corporation's parent company, and of Thermo Electron, Thermo
Instrument's parent company, as of March 1, 1997, 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 and executive officers of the
Corporation are also directors and executive officers of Thermo
Electron or its subsidiaries other than the Corporation, all such
persons disclaim beneficial ownership of the shares of Common
Stock owned by Thermo Electron.
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<TABLE>
<CAPTION>
Thermo Thermo
ThermoSpectra Instrument Electron
Name (1) Corporation Systems Inc. Corporation
(2) (3) (4)
<S> <C> <C> <C>
Thermo Instrument 8,998,936 N/A N/A
Systems Inc. (5)
Christopher J. Barron 25,000 15,038 148
Robert E. Finnigan 0 0 0
Elias P. Gyftopoulos 20,000 47,018 71,070
Earl R. Lewis 55,000 128,233 124,184
Ronald W. Lindell 30,100 0 0
Theo Melas-Kyriazi 68,100 30,679 159,073
Arvin H. Smith 20,000 431,667 513,038
Michael P. Stansky 20,000 0 0
All directors and
current executive
officers as a group 263,200 752,531 1,539,279
(10 persons)
</TABLE>
(1) Except as reflected in the footnotes to this table, shares
beneficially owned consist of shares owned by the indicated
person or by that person for the benefit of minor children and
all share ownership includes sole voting and investment power.
(2) Shares of the Common Stock beneficially owned by Mr. Barron,
Dr. Gyftopoulos, Mr. Lewis, Mr. Lindell, Mr. Melas-Kyriazi, Mr.
Smith, Mr. Stansky and all directors and executive officers as a
group include 25,000, 20,000, 50,000, 30,000, 55,000 20,000,
20,000 and 245,000 shares, respectively, that such person or
group has the right to acquire within 60 days of March 1, 1997,
through the exercise of stock options. No director or executive
officer beneficially owned more than 1% of the Common Stock
outstanding as of March 1, 1997; all directors and executive
officers as a group beneficially owned 2.1% of the Common Stock
outstanding as of such date.
(3) Shares of the common stock of Thermo Instrument beneficially
owned by Mr. Barron, Dr. Gyftopoulos, Mr. Lewis, Mr.
Melas-Kyriazi, Mr. Smith and all directors and executive officers
as a group include 14,671, 14,465, 112,500, 29,062, 234,375 and
485,698 shares, respectively, that such person or group had the
right to acquire within 60 days after March 1, 1997, through the
exercise of stock options. Shares of the common stock of Thermo
Instrument beneficially owned by Mr. Melas-Kyriazi, Mr. Smith and
all directors and executive officers as a group include 374, 530
and 1,829 shares, respectively, allocated through March 1, 1997,
to their respective accounts maintained pursuant to Thermo
Electron's employee stock ownership plan (the "ESOP"), of which
the trustees, who have investment power over its assets, are
executive officers of Thermo Electron. Shares beneficially owned
by Mr. Lewis include 2,390 shares held by Mr. Lewis' spouse. The
directors and executive officers of the Corporation did not
individually or as a group beneficially own more than 1% of the
common stock of Thermo Instrument outstanding as of March 1,
1997.
(4) The shares of the common stock of Thermo Electron shown in
the table reflect a three-for-two split of such stock distributed
in June 1996 in the form of a 50% stock dividend. Shares of the
common stock of Thermo Electron beneficially owned by Dr.
Gyftopoulos, Mr. Lewis, Mr. Melas-Kyriazi, Mr. Smith and all
directors and executive officers as a group include 9,375,
121,536, 116,772, 222,411 and 997,353 shares, respectively, that
such person or group has the right to acquire within 60 days of
March 1, 1997, through the exercise of stock options. Shares of
the common stock of Thermo Electron beneficially owned by Mr.
Melas-Kyriazi, Mr. Smith and all directors and executive officers
as a group include 969, 1,717 and 5,944 full shares,
respectively, allocated to accounts maintained pursuant to the
ESOP. No director or executive officer beneficially owned more
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than 1% of the common stock of Thermo Electron outstanding as of
March 1, 1997; all directors and executive officers as a group
beneficially owned approximately 1.02% of the Thermo Electron
common stock outstanding as of such date.
(5) As of March 1, 1997, Thermo Instrument beneficially owned
approximately 72% of the outstanding Common Stock. Thermo
Instrument's address is 1275 Hammerwood Avenue, Sunnyvale,
California 94089. As of March 1, 1997, Thermo Instrument had the
power to elect all of the members of the Corporation's Board of
Directors. Thermo Instrument is a majority owned subsidiary of
Thermo Electron and therefore, Thermo Electron may be deemed a
beneficial owner of the shares of Common Stock beneficially owned
by Thermo Instrument. Thermo Electron disclaims beneficial
ownership of these shares.
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 Instrument, 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 1996, except
in the following instances. Thermo Instrument filed six Forms 4
late, reporting a total of 14 transactions, consisting of 11
exercises of options granted to employees to purchase shares of
the Common Stock and the lapse and cancellation of three such
options without exercise. Thermo Electron filed six Forms 4
late, reporting a total of 31 transactions, including the 14
transactions described above for Thermo Instrument, an additional
15 open market purchases and an additional two exercises of
employee stock options.
EXECUTIVE COMPENSATION
NOTE: All share amounts reported below, in all cases, have been
adjusted as applicable to reflect a three-for-two stock split
with respect to the common stock of Thermo Electron distributed
in June 1996 in the form of a 50% stock dividend.
Summary Compensation Table
The following table summarizes compensation for services to
the Corporation in all capacities awarded to, earned by or paid
to the Corporation's chief executive officer and its two other
most highly compensated executive officers (the "named executive
officers") for the last three fiscal years. No other executive
officer of the Corporation met the definition of "highly
compensated" within the meaning of the Securities and Exchange
Commission's executive compensation disclosure rules.
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The Corporation is required to appoint certain executive
officers and full-time employees of Thermo Electron as executive
officers of the Corporation, in accordance with the Thermo
Electron Corporate Charter. The compensation for these executive
officers is determined and paid entirely by Thermo Electron. The
time and effort devoted by these individuals to the Corporation's
affairs is provided to the Corporation under the Corporate
Services Agreement between the Corporation and Thermo Electron.
Accordingly, the compensation for these individuals is not
reported in the following table.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensation
Securities
Underlying
Annual Options
Name and Fiscal Compensation (No. of Shares All Other
Principal Year Salary Bonus Other and Company) Compensation
Position (1) (2)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Theo 1996 $147,000 $85,000 -- 3,900(TMO) $8,281(4)
Melas-Kyriazi
President and 4,000(TBA)
Chief Executive 2,000(TFG)
Officer (3)
2,000(TLT)
15,000(TOC)
10,000(TMQ)
2,000(TSR)
4,000(TXM)
1995 $142,000 $81,400 -- 3,750(TMO) $6,750
1994 $142,000 -- -- 55,000(THS) $6,750
27,000(TMO)
Christopher J. 1996 $116,883 $25,100 6,000(TOC) --
Barron
Vice President 4,000(TMQ) --
1995 $114,975 $23,000 -- -- --
1994 $112,500 $20,000 -- 25,000(THS) --
Ronald W. Lindell 1996 $108,000 $28,400 $17,105(5) 6,000(TOC) --
Vice President 4,000(TMQ) --
1995 $103,000 $30,000 $42,927(5) -- --
1994 $ 96,000 $30,000 -- 30,000(THS) --
</TABLE>
(1) Options granted by the Corporation are designated in the
table as "THS." In addition, the named executive officers also
have been granted options to purchase common stock of the
following Thermo Electron companies from time to time as part of
Thermo Electron's stock option program: Thermo Electron
(designated in the table as TMO), Thermo BioAnalysis Corporation
(designated in the table as TBA),Thermo Fibergen Inc. (designated
in the table as TFG), 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) and
Trex Medical Corporation (designated in the table as TXM).
(2) 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.
(3) Mr. Melas-Kyriazi was appointed president and chief
executive officer of the Corporation on August 10, 1994. Prior
to that date, he served as treasurer of Thermo Electron and its
subsidiaries. Reported in the table under "Salary" is the total
salary paid in 1994 to Mr. Melas-Kyriazi for his service as both
president and chief executive officer of the Corporation and as
treasurer of Thermo Electron. In 1994, the portion of Mr.
Melas-Kyriazi's salary paid by the Corporation was $35,500. None
of the bonus paid to Mr. Melas-Kyriazi with respect to 1994
performance was attributable to his service as president and
chief executive officer of the Corporation. In addition, Mr.
Melas-Kyriazi 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
and certain of its subsidiaries. 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 president and chief executive officer of the
Corporation.
(4) In addition to the matching contribution referred to in
footnote (2), such amount includes $1,531 of compensation
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attributable to an interest-free loan provided to Mr.
Melas-Kyriazi pursuant to the Corporation's stock holding
assistance plan. See "Relationship with Affiliates - Stock
Holding Assistance Plan."
(5) The amount shown for Mr. Lindell represents relocation
expenses for which Mr. Lindell was reimbursed by the Corporation.
Stock Options Granted During Fiscal 1996
The following table sets forth information concerning
individual grants of stock options made during fiscal 1996 to the
Corporation's chief executive officer and the other named
executive officers. It has not been the Corporation's policy in
the past to grant stock appreciation rights, and no such rights
were granted during fiscal 1996.
<TABLE>
<CAPTION>
Option Grants in Fiscal 1996
Potential
Realizable
Percent of Value at Assumed
Total Annual Rates of
Options Stock
Number of Granted to Price
Securities Exercise Appreciation for
Underlying Employees Price Expira- Option Term (2)
Options in Per tion
Name Granted (1) Fiscal Year Share Date 5% 10%
<C> <C> <C> <C> <C> <C> <C> <C>
Theo 3,900 (TMO) 0.3%(3) $42.79 05/22/99 $26,286 $55,224
Melas-Kyriazi
4,000 (TBA) 0.5%(3) $10.00 03/13/08 $31,840 $85,520
2,000 (TFG) 0.4%(3) $10.00 09/12/08 $15,920 $42,760
2,000 (TLT) 0.6%(3) $10.00 03/11/08 $15,920 $42,760
15,000 (TOC) 0.5%(3) $12.00 04/11/08 $143,250 $384,900
10,000 (TMQ) 0.4%(3) $13.00 02/08/08 $103,500 $278,000
2,000 (TSR) 0.4%(3) $14.00 03/11/08 $22,280 $ 59,880
4,000 (TXM) 0.2%(3) $11.00 03/11/08 $35,000 $ 94,080
Christopher J. 6,000 (TOC) 0.2%(3) $12.00 04/11/08 $57,300 $153,960
Barron
4,000 (TMQ) 0.1%(3) $13.00 02/08/08 $41,400 $111,200
Ronald W. 6,000 (TOC) 0.2%(3) $12.00 04/11/08 $57,300 $153,960
Lindell
4,000 (TMQ) 0.1%(3) $13.00 02/08/08 $41,400 $111,200
</TABLE>
(1) The options granted during the fiscal year were 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 (the "Exchange Act") and (ii)
nine years after 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
that are not publicly traded, the repurchase rights lapse in
their entirety on the ninth anniversary of the grant date.
Certain options granted as a part of Thermo Electron's stock
option program have three-year terms, and the repurchase rights
lapse in their entirety on the second anniversary of the grant
date. The granting corporation may permit the 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.
(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
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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 companies other than the
Corporation and accordingly are reported as a percentage of total
options granted to employees of that company.
Stock Options Exercised During Fiscal 1996 and Fiscal Year-End
Option Values
The following table reports certain information regarding
stock option exercises during fiscal 1996 and outstanding stock
options held at the end of fiscal 1996 by the Corporation's chief
executive officer and the other named executive officers. No
stock appreciation rights were exercised or were outstanding
during fiscal 1996.
<TABLE>
<CAPTION>
Aggregated Option Exercises In Fiscal 1996 And
Fiscal 1996 Year-End Option Values
Number of
Unexercised
Options at
Shares Fiscal
Acquired Year-End Value of
on Value (Exercisable/ Unexercised
Name Company Exercise Realized Unexercisable) In-the-Money
(1) Options
<S> <C> <C> <C> <C> <C> <C>
Theo ThermoSpectra -- -- 55,000/0 $103,125/-
Melas-Kyriazi
(2)
Thermo -- -- 30,150/0(3) $990,938/-
Electron
Thermo -- -- 4,000/0 $12,500/-
BioAnalysis
Thermo -- -- 2,000/0 $1,500/-
Fibergen
ThermoLyte -- -- 0/2,000 --/$0(4)
Thermo Optek -- -- 15,000/0 $0/-
ThermoQuest -- -- 10,000/0 $0/-
Thermo Sentron -- -- 2,000/0 $0/-
Trex Medical -- -- 4,000/0 $6,500/-
Christopher J. ThermoSpectra -- -- 25,000/0 $46,875/-
Barron
Thermo -- -- 14,671/0 $292,241/-
Instrument
Thermo Optek -- -- 6,000/0 $0/-
ThermoQuest -- -- 4,000/0 $0/-
Ronald W. ThermoSpectra -- -- 30,000/0 $56,250/-
Lindell
Thermo Optek -- -- 6,000/0 $0/-
ThermoQuest -- -- 4,000/0 $0/-
</TABLE>
(1) All of the options reported outstanding at the end of the
fiscal year were immediately exercisable as of the 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 Exchange Act and (ii) nine years after the grant date. In
all cases, the shares acquired upon exercise of the options
reported in the table are subject to repurchase by the granting
corporation at the exercise price if the optionee ceases to be
employed by such corporation or any other Thermo Electron
company. The granting corporation may exercise its repurchase
rights within six months after the termination of the optionee's
employment. For 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
that are not publicly traded, the repurchase rights lapse in
their entirety on the ninth anniversary of the grant date.
Certain options granted as a part of Thermo Electron's stock
option program have three-year terms, and the repurchase rights
lapse in their entirety on the second anniversary of the grant
date. The granting corporation may permit the holder of such
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.
15
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<PAGE>
(2) Mr. Melas-Kyriazi also holds other unexercised options to
purchase common stock of Thermo Electron and its subsidiaries
other than the Corporation. These options are not reported here
as they were granted as compensation for service to other Thermo
Electron companies in capacities other than in his capacity as
chief executive officer of the Corporation.
(3) Options to purchase 22,500 shares of the common stock of
Thermo Electron granted to Mr. Melas-Kyriazi are subject to the
same terms as described in footnote (1), except that the
repurchase rights of the granting corporation generally do not
lapse until the tenth anniversary of the grant date. In the event
of the employee's death or involuntary termination prior to the
tenth anniversary of the grant date, the repurchase rights of the
granting corporation shall be deemed to have lapsed ratably over
a five-year period, commencing with the fifth anniversary of the
grant date.
(4) No public market existed for the shares underlying these
options as of December 28, 1996. Accordingly, no value in excess
of the exercise price has been attributed to these options.
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 Committees of the Board of Directors of its
parent corporations, Thermo Electron and Thermo Instrument. The
executive compensation program presently consists of annual base
salary ("salary"), short-term incentives in the form of annual
cash bonuses, and long-term incentives in the form of stock
options.
The Committee believes that the compensation of executive
officers should reflect the scope of their responsibilities, the
success of the Corporation, and the contributions of each
executive to that success. In addition, the Committee believes
that base salaries should approximate the mid-point of
competitive salaries derived from market surveys and that
short-term and long-term incentive compensation should reflect
the performance of the Corporation and the contributions of each
executive.
External competitiveness is an important element of the
Committee's compensation policy. The competitiveness of the
Corporation's compensation for its executives is assessed by
comparing it to market data provided by its compensation
consultant and by participating in annual executive compensation
surveys, primarily "Project 777," an executive compensation
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<PAGE>
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 index, the Dow Jones
Total Return Index for the Diversified Technology Industry Group.
Principles of internal equity are also central to the
Committee's compensation policies. Compensation considered for
the Corporation's officers, whether cash or stock-based
incentives, is also evaluated by comparing it to compensation of
other executives within the Thermo Electron organization with
comparable levels of responsibility for comparably sized business
units.
The process for determining each of these elements for the
Corporation's executive officers is outlined below.
Base Salary
Base salaries are intended to approximate the mid-point of
competitive salaries for similar organizations of comparable size
and complexity to the Corporation. Executive salaries are
adjusted gradually over time and only as necessary to meet this
objective. Increases in base salary may be moderated by other
considerations, such as geographic or regional market data,
industry trends or internal fairness within the Corporation and
Thermo Electron. It is the Committee's intention that over time
the base salaries for the chief executive officer and the other
named executive officers will approach the mid-point of
competitive data. The salary increases in 1996 for the chief
executive officer and the other named executive officers
generally reflect this practice of gradual increases and
moderation.
Cash Bonus
The Committee establishes a median potential bonus for each
executive by using the market data on total cash compensation
from the same executive compensation surveys as used to determine
salaries. Specifically, the median potential bonus plus the
salary of an executive officer is approximately equal to the
mid-point of competitive total cash compensation for a similar
position and level of responsibility in businesses having
comparable sales and complexity to the Corporation. The actual
bonus awarded to an executive officer may range from zero to
three times the median potential bonus. The value within the
range (the bonus multiplier) is determined at the end of each
year by the Committee in its discretion. The Committee exercises
its discretion by evaluating each executive's performance using a
methodology developed by its parent corporation, Thermo Electron,
and applied throughout the Thermo Electron organization. The
methodology incorporates measures of operating returns, designed
to measure profitability and contributions to shareholder value,
17
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<PAGE>
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 1996 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 measurers and
subjective evaluation varies among on the executives, depending
on their roles and responsibilities within the organization.
The bonuses for named executive officers approved by the
Committee with respect to 1996 performance in each instance
exceeded the median potential bonus.
Stock Option Program
The primary goal of the Corporation is to excel in the
creation of long-term value for the Stockholders. The principal
incentive tool used to achieve this goal is the periodic award to
key employees of options to purchase common stock of the
Corporation and other Thermo Electron companies.
The Committee and management believe that awards of stock
options to purchase the shares of both the Corporation and other
companies within the Thermo Electron group of companies
accomplish many objectives. The grant of options to key employees
encourages equity ownership in the Corporation, and closely
aligns management's interests to the interests of all the
Stockholders. The emphasis on stock options also results in
management's compensation being closely linked to stock
performance. In addition, because they are subject to vesting
periods of varying durations and to forfeiture if the employee
leaves the Corporation prematurely, stock options are an
incentive for key employees to remain with the Corporation
long-term. The Committee believes stock option awards in its
parent companies, Thermo Electron and Thermo Instrument, and the
other majority-owned subsidiaries of Thermo Electron and Thermo
Instrument, are an important tool in providing incentives for
performance within the entire organization.
In determining awards, the Committee considers the average
annual value of all options to purchase shares of the Corporation
and other companies within the Thermo Electron organization that
vest in the next five years. (Values are established using a
modified Black-Scholes option pricing model.) As a guideline, the
Committee strives to maintain the aggregate amount of net awards
to purchase shares of Common Stock to all employees over a
five-year period below 12% of the Corporation's outstanding
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<PAGE>
common stock, although other factors such as unusual transactions
and acquisitions and standards for awards of comparably situated
companies may affect the number of awards granted.
Awards are not made annually in conjunction with the annual
review of cash compensation, but are made periodically. No awards
were made to the chief executive officer and the other named
executive officers by the Corporation in 1996. The Committee
considers total compensation of executives, actual and
anticipated contributions of each executive (which includes a
subjective assessment by the Committee of the value of the
executive's future potential within the organization), as well as
the value of previously awarded options, as described above, in
determining awards. The option awards made to the named
executive officers in 1996 with respect to the common stock of
the majority-owned subsidiaries of the Corporation's parent
company, Thermo Instrument, were made as part of Thermo
Electron's overall stock option program and were determined by
the human resources committee of the board of directors of the
granting company using a similar analysis.
Policy on Deductibility of Compensation
The Committee has also considered the application of Section
162(m) of the Internal Revenue Code to the Corporation's
compensation practices. Section 162(m) limits the tax deduction
available to public companies for annual compensation paid to
senior executives in excess of $1 million unless the compensation
qualifies as "performance based" or is otherwise exempt under
Section 162(m). The annual compensation paid to individual
executives does not approach the $1 million threshold, and it is
believed that stock incentive plans of the Corporation qualify as
"performance based." Therefore, the Committee does not believe
any further action is necessary in order to comply with Section
162(m). From time to time, the Committee will reexamine the
Corporation's compensation practices and the effect of Section
162(m).
Stock Ownership Policies
During 1996, the Committee established a stock holding
policy for executive officers of the Corporation. The stock
holding policy specifies an appropriate level of ownership of the
Corporation's Common Stock as a multiple of the officer's
compensation. For the chief executive officer, the multiple is
one times his base salary and reference bonus for the calendar
year. For all other officers, the multiple is 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.
In order to assist officers in complying with the policy,
the Committee also adopted a stock holding assistance plan under
which the Corporation is authorized to make interest-free loans
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PAGE
<PAGE>
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 date of the
loan, unless otherwise authorized by the Committee. During 1996,
Mr. Theo Melas-Kyriazi, the Corporation's chief executive
officer, received loans in the aggregate principal amount of
$164,830.47 under this plan. See "Relationship with Affiliates -
Stock Holding Assistance Plan."
The Committee also 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.
1996 CEO Compensation
The salary and bonus of Mr. Melas-Kyriazi are established
using the same criteria as for the salaries and bonuses for the
Corporation's other named executive officers. In determining Mr.
Melas-Kyriazi's compensation as reported, the Committee
considered, among other factors, his performance in completing
and integrating several strategic acquisitions by the
Corporation.
Awards to Mr. Melas-Kyriazi to purchase shares of the
Corporation's Common Stock are reviewed and determined
periodically by the Committee using criteria similar to that used
for other executive officers of the Corporation. No awards to
purchase shares of the Corporation's Common Stock were made to
Mr. Melas-Kyriazi in fiscal 1996. However, Mr. Melas-Kyriazi may
receive awards to purchase shares of the common stock of Thermo
Electron or its other majority owned subsidiaries from time to
time as part of Thermo Electron's stock option program due to his
position as a chief executive officer of a majority owned
subsidiary of Thermo Electron. These awards are determined using
an analysis similar to that used by the Committee as described
above under "Stock Option Program." The stock option awards in
fiscal 1996 with respect to shares of the following companies
were awarded under this program: Thermo BioAnalysis
Corporation, Thermo Fibergen Inc., ThermoLyte Corporation, Thermo
Optek Corporation, ThermoQuest Corporation, Thermo Sentron Inc.
and Trex Medical Corporation. The award to purchase shares of
the common stock of Thermo Electron granted to Mr. Melas-Kyriazi
in fiscal 1996 was made by the Thermo Electron human resources
committee 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
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buy and hold Thermo Electron shares.
Elias P. Gyftopoulos (Chairman)
Michael P. Stansky
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
August 4, 1995 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 the Dow Jones
total return Index for the Diversified Technology Industry Group.
Comparison of Total Return Among ThermoSpectra Corporation,
the American Stock Exchange Market Value Index and the Dow Jones
Total Return Index
for the Diversified Technology Industry Group from August 4, 1995
to December 27, 1996.
GRAPH APPEARS HERE
8/4/95 12/31/95 12/27/96
THS 100 112 85
AMEX 100 105 111
DJ DTC 100 108 140
The total return for the Corporation's Common Stock (THS),
the American Stock Exchange Market Value Index (AMEX) and the Dow
Jones Total Return Index for the Diversified Technology Industry
Group (DJ DTC) assumes the reinvestment of dividends, although
dividends have not been declared on the Corporation's Common
Stock. The American Stock Exchange Market Value Index tracks the
aggregate performance of equity securities of companies listed on
the American Stock Exchange. The Corporation's Common Stock is
traded on the American Stock Exchange under the ticker symbol
"THS."
RELATIONSHIP WITH AFFILIATES
Thermo Electron has adopted a strategy of selling a minority
interest in subsidiary companies to outside investors as an
important tool in its future development. As part of this
strategy, Thermo Electron and certain of its subsidiaries have
created several privately and publicly held subsidiaries,
including the Corporation, which was created by Thermo
Instrument. From time to time, Thermo Electron and its
subsidiaries will create other majority-owned subsidiaries as
21
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<PAGE>
part of its spinout strategy. (The Corporation and such other
majority-owned Thermo Electron subsidiaries are hereinafter
referred to as the "Thermo Subsidiaries.")
Thermo Electron and each of the Thermo Subsidiaries
recognize that the benefits and support that derive from their
affiliation are essential elements of their individual
performance. Accordingly, Thermo Electron and each of the Thermo
Subsidiaries have adopted the Thermo Electron Corporate Charter
(the "Charter") to define the relationships and delineate the
nature of such cooperation among themselves. The purpose of the
Charter is to ensure that (1) all of the companies and their
stockholders are treated consistently and fairly, (2) the scope
and nature of the cooperation among the companies, and each
company's responsibilities, are adequately defined, (3) each
company has access to the combined resources and financial,
managerial and technological strengths of the others, and (4)
Thermo Electron and the Thermo Subsidiaries, in the aggregate,
are able to obtain the most favorable terms from outside parties.
To achieve these ends, the Charter identifies the general
principles to be followed by the companies, addresses the role
and responsibilities of the management of each company, provides
for the sharing of group resources by the companies and provides
for centralized administrative, banking and credit services to be
performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by
members, coordinating the access of Thermo Electron and the
Thermo Subsidiaries (the "Thermo Group") to external financing
sources, ensuring compliance with external financial covenants
and internal financial policies, assisting in the formulation of
long-range 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
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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
in effect between the withdrawing company and Thermo Electron.
The withdrawal from participation does not terminate outstanding
commitments to third parties made by the withdrawing company, or
by Thermo Electron or other members of the Thermo Group, prior to
the withdrawal. However, a withdrawing company is required to
continue to comply with all policies and procedures applicable to
the Thermo Group and to provide certain administrative functions
mandated by Thermo Electron so long as the withdrawing company is
controlled by or affiliated with Thermo Electron.
As provided in the Charter, the Corporation and Thermo
Electron have entered into a Corporate Services Agreement (the
"Services Agreement") under which Thermo Electron's corporate
staff provides certain administrative services, including certain
legal advice and services, risk management, employee benefit
administration, tax advice and preparation of tax returns,
centralized cash management and financial and other services to
the Corporation. The Corporation was assessed an annual fee equal
to 1.0% of the Corporation's revenues for these services in
calendar 1996. The fee is reviewed annually and may be changed
by mutual agreement of the Corporation and Thermo Electron.
During fiscal 1996, Thermo Electron assessed the Corporation
$1,232,000 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 additional 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.
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From time to time, the Corporation may transact business
with other companies in the Thermo Group. In fiscal 1996, these
transactions included the following.
The Corporation leases certain office and manufacturing
space from Nicolet Instrument Corporation ("Nicolet"), a
wholly-owned subsidiary of Thermo Instrument. Effective January
1, 1996, the annual rent expense is $208,000. This lease is
effective until December 31, 1998, but may be terminated by the
Corporation upon 90 days' prior written notice to Nicolet.
The Corporation's Nicolet Imaging Systems division has an
arrangement with ThermoTrex Corporation ("ThermoTrex"), a
publicly traded, majority-owned subsidiary of Thermo Electron,
whereby ThermoTrex provides certain research and development
services to the Corporation, and the Corporation purchase flat
screen x-ray sensitive detectors pursuant to purchase orders. In
1996, the Corporation paid ThermoTrex $97,689 for such products
and services. Thermo Electron's Tecomet division manufactures
the Corporation's precision X-Y translation table pursuant to
purchase orders. In 1996, the Corporation paid Tecomet $169,000
for such services. In addition, the Corporation purchases and
sells products and services in the ordinary course of business
with other companies affiliated with Thermo Instrument. In 1996,
purchases from these companies totaled $820,481 and sales to
these companies totaled $240,000.
To finance the acquisition of IRT Corporation in September
1994, the Corporation borrowed $7,300,000 from Thermo Instrument
pursuant to a promissory note due September 2001. In connection
with the 1996 acquisition of Kevex Instruments and Kevex X-ray,
the Corporation borrowed $15,000,000 from Thermo Electron
pursuant to a promissory note due August 1998. In connection
with the acquisition of Park Scientific Instruments Corporation
in March 1997, the Corporation borrowed $10,000,000 from Thermo
Electron pursuant to a promissory note due March 1999. These
notes bear interest at the 90-day Commercial Paper Composite Rate
plus 25 basis points, set at the beginning of each quarter. The
interest rate for the notes outstanding in 1996 was 5.77%.
As of December 28, 1996, $11,858,000 of the Corporation's
cash equivalents were invested pursuant to a repurchase agreement
with Thermo Electron. Under this agreement, the Corporation in
effect lends excess cash to Thermo Electron, which Thermo
Electron collateralizes with investments principally consisting
of corporate notes, U.S. government agency securities, money
market funds, commercial paper and other marketable securities,
in the amount of at least 103% of such obligation. The
Corporation's funds subject to the repurchase agreement are
readily convertible into cash by the Corporation and have a
maturity of three months or less. The repurchase agreement earns
a rate based on the 90-day Commercial Paper Composite Rate plus
25 basis points, set at the beginning of each quarter.
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Stock Holding Assistance Plan
In 1996, 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 1996, Mr. Melas-Kyriazi
received loans in the aggregate principal amount of $164,830.47
under this plan to purchase 12,525 shares. The loans to Mr.
Melas-Kyriazi are repayable upon the earlier of demand or the
fifth anniversary of the date of the loan, unless otherwise
authorized by the Human Resources Committee of the Corporation's
Board of Directors.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as
independent public accountants for fiscal 1997. Arthur Andersen
LLP has acted as independent public accountants for the
Corporation since its inception in 1994. Representatives of that
firm are expected to be present at the Meeting, will have the
opportunity to make a statement if they desire to do so and will
be available to respond to questions. The Board of Directors has
established an Audit Committee, presently consisting of two
outside directors, the purpose of which is to review the scope
and results of the audit.
OTHER ACTION
Management is not aware at this time of any other matters
that will be presented for action at the Meeting. Should any such
matters be presented, the proxies grant power to the proxy
holders to vote shares represented by the proxies in the
discretion of such proxy holders.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the
1998 Annual Meeting of the Stockholders of the Corporation must
be received by the Corporation for inclusion in the proxy
statement and form of proxy relating to that meeting no later
than January 2, 1998.
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, facsimile transmission or telegram.
Brokers, nominees, custodians and fiduciaries are requested to
forward solicitation materials to obtain voting instructions from
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beneficial owners of stock registered in their names, and the
Corporation will reimburse such parties for their reasonable
charges and expenses in connection therewith.
Waltham, Massachusetts
April 29, 1997
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FORM OF PROXY
THERMOSPECTRA CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 2, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints John N. Hatsopoulos, Theo
Melas-Kyriazi and Jonathan W. Painter, 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 ThermoSpectra Corporation, a
Delaware corporation (the "Company"), to be held on Monday, June
2, 1997, at 10:00 a.m. at The Hyatt Regency Hotel, Hilton Head,
South Carolina, and at any adjournment or postponement thereof,
and to vote all shares of common stock of the Company standing in
the name of the undersigned on April 7, 1997, with all of the
powers the undersigned would possess if personally present at
such meeting:
(IMPORTANT - TO BE SIGNED AND DATED ON THE REVERSE SIDE.)
Please mark your
[ x ] votes as in this
example.
1. ELECTION OF DIRECTORS OF THE COMPANY (see reverse).
FOR [ ] WITHHELD [ ]
______________________________________
FOR all nominees listed at right, except authority to vote
withheld for the following nominees (if any)
Nominees: Robert E. Finnigan, Elias P. Gyftopoulos, Earl R.
Lewis, Theo Melas-Kyriazi and Arvin H. Smith.
2. 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.
Copies of the Notice of Meeting and of the Proxy Statement have
been received by the undersigned.
SIGNATURE(S)_______________________________________
DATE_________________
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Note:This proxy should be dated, signed by the shareholder(s)
exactly as his or her name appears hereon, and returned
promptly in the enclosed envelope. Persons signing in a
fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.
AA971210014
