THERMO ELECTRON CORP, PRE 14A, 1994-04-01

THERMO ELECTRON CORP
PRE 14A, 1994-04-01
MEASURING & CONTROLLING DEVICES, NEC

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934

FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /

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

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

Thermo Electron Corporation
(Name of Registrant as Specified In Its Charter)

Carl F. Barnes, Esq.
(Name of Person(s) Filing Proxy Statement)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11:

4) Proposed maximum aggregate value of transaction:

Set forth the amount on which the filing fee is calculated and state how it
was determined.

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

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

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<PAGE> 2

[LOGO]

April , 1994

Dear Stockholder:

The enclosed Notice calls the 1994 Annual Meeting of the Stockholders of
Thermo Electron Corporation. I respectfully request that all Stockholders attend
this Meeting, if possible.

Our Annual Report for the year ended January 1, 1994 is enclosed herewith.
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.

In addition, 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, Bank of Boston, 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 appreciate your immediate attention to the mailing of this proxy.

Yours very truly,

GEORGE N. HATSOPOULOS
Chairman and President

YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD.
<PAGE> 3

[LOGO]

April , 1994

To the Holders of the Common Stock of
THERMO ELECTRON CORPORATION

NOTICE OF ANNUAL MEETING

The 1994 Annual Meeting of the Stockholders (the "Meeting") of Thermo
Electron Corporation ("Thermo Electron" or the "Corporation") will be held on
Tuesday, May 24, 1994, at 5:30 p.m. at the Hyatt Regency Hotel, Hilton Head,
South Carolina. The purposes of the Meeting are to consider and take action upon
the following matters:

1. Election of three directors, comprising the class of directors to
be elected for a three-year term expiring in 1997.

2. A proposal recommended by the Board of Directors to amend the
Corporation's Restated Certificate of Incorporation to increase
the Corporation's authorized voting common stock, $1.00 par value
per share, from 100,000,000 to 175,000,000 shares.

3. A proposal recommended by the Board of Directors to amend the
Corporation's Equity Incentive Plan in order to increase by
2,000,000 shares the number of shares of common stock available
for issuance under the plan and to limit the potential size of
awards to any recipient in a year in compliance with Section
162(m) of the Internal Revenue Code.

4. 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 March 28, 1994.

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> 4

PROXY STATEMENT

The enclosed Proxy is solicited by the Board of Directors of Thermo
Electron Corporation ("Thermo Electron" or the "Corporation") for use at the
1994 Annual Meeting of the Stockholders (the "Meeting") to be held on Tuesday,
May 24, 1994, at 5:30 p.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, P. O. Box 9046, Waltham,
Massachusetts 02254-9046. This Proxy Statement and the enclosed Proxy were first
furnished to Stockholders of the Corporation on or about April , 1994.

VOTING PROCEDURES

The Board of Directors intends to present to the Meeting the election of
three Directors comprising the class of Directors to be elected for a three-year
term expiring in 1997, as well as two other matters: a proposal to increase the
Corporation's authorized common stock, par value $1.00 per share ("Common
Stock"), to 175,000,000 shares from 100,000,000 shares and a proposal
recommended by the Board of Directors to amend the Corporation's Equity
Incentive Plan to increase by 2,000,000 shares the number of shares of Common
Stock available for issuance under the plan and to limit the potential size of
awards to a recipient in a year in compliance with Section 162(m) of the
Internal Revenue Code.

The representation in person or by proxy of a majority of the outstanding
shares 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 toward 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 choices by marking the appropriate boxes 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 Director, for
the management proposals, and as the individuals named as proxy holders on the
proxy deem advisable on all other matters as may properly come before the
Meeting. With respect to the election of Directors, you may (i) vote for the
election of some or all three of the nominees, (ii) withhold authority to vote
for all nominees or (iii) vote for the election of other nominees by so
indicating on the appropriate space on the proxy card. With respect to the
management proposals to be presented at the Meeting, you may (i) vote "FOR" the
matter, (ii) vote "AGAINST" the matter or (iii) "ABSTAIN" from voting on the
matter. An abstention or withholding authority to vote will be counted as
present for determining whether the quorum requirement is satisfied.

A plurality of the votes of the shares present and entitled to vote is
required to approve the election of Directors. The affirmative vote of
two-thirds of the Corporation's outstanding Common Stock is required to increase
the authorized Common Stock of the Corporation, as such proposal requires an
amendment to the Corporation's Restated Certificate of Incorporation. A majority
of the votes of the shares present and entitled to vote is required to approve
the proposal to increase the number of shares available for issuance under the
Corporation's Equity Incentive Plan. Abstentions will be treated as shares
present and entitled to vote on the management proposals, and for purposes of
determining the outcome of the vote have the same effect as a vote against the
proposals. 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. Broker "non-votes" on the
proposal to increase the authorized Common Stock will have the effect of a vote
against the proposal, but will have no effect on the outcome of the election of
Directors or the outcome of the vote to adopt the proposal to increase the
number of shares available for issuance under the Corporation's Equity Incentive
Plan.

A Stockholder who returns a proxy may revoke the proxy 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.
<PAGE> 5

The outstanding stock of the Corporation entitled to vote (excluding shares
held in treasury by the Corporation) as of March 28, 1994, consisted of
shares of Common Stock. Only Stockholders of record at the close of
business on March 28, 1994, are entitled to vote at the Meeting. Each share is
entitled to one vote.

-- PROPOSAL 1 --

ELECTION OF DIRECTORS

Three Directors are to be elected at the Meeting, and Dr. John M.
Albertine, Mr. Peter O. Crisp and Mr. Roger D. Wellington are listed below as
nominees for the three-year term expiring at the 1997 Annual Meeting of the
Stockholders.

For purposes of this Meeting, the Board of Directors has fixed the number
of Directors at ten, divided into three classes as nearly equal in number as
possible. Each class is elected for a three-year term at successive Annual
Meetings of the Stockholders. In all cases, Directors hold office until their
successors have been elected and qualified, or until their earlier resignation,
death or removal.

NOMINEES AND INCUMBENT DIRECTORS

Set forth below are the names of the persons nominated as Directors and
Directors whose terms do not expire this year, 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, the names of other publicly
traded corporations in which such persons hold directorships and certain other
information. Information regarding the Directors' beneficial ownership of Common
Stock of the Corporation and of the common stock of certain subsidiaries of the
Corporation is reported under the caption "Stock Ownership." All of the nominees
are currently Directors of the Corporation.
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NOMINEES FOR DIRECTOR WHOSE TERM OF OFFICE WILL EXPIRE IN 1997

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

John M. Albertine Dr. Albertine, 49, has been a Director of the
Corporation since 1986. Dr. Albertine serves as
Chairman of the Board and Chief Executive Officer
of Albertine Enterprises, Inc., an economic and
public policy consulting firm he founded in 1990.
Dr. Albertine is also a director of American
Precision Industries, Inc. and Bolt, Beranek &
Newman, Inc. Dr. Albertine served as Vice
Chairman of Farley, Inc., principally a textile
and apparel manufacturer, from 1986 until 1990,
Vice Chairman of Fruit of the Loom, Inc. from
1987 to 1990, and Vice Chairman of Valley
Fashions Corp. (formerly West Point Acquisition
Corp.) and its subsidiary, West Point-Pepperell
Inc., from 1989 to 1990. In July 1991, an
involuntary petition was filed against Farley,
Inc. under Chapter 7 of the federal bankruptcy
laws. In September 1991, Farley, Inc. converted
the Chapter 7 proceeding into a Chapter 11
reorganization and a plan of reorganization was
confirmed in December 1992. In 1992, Valley
Fashions Corp. filed a petition under Chapter 11
to effect a "pre-packaged" bankruptcy
reorganization. In September 1992, Valley
Fashions' plan of reorganization was confirmed by
the bankruptcy court.
- --------------------------------------------------------------------------------

Peter O. Crisp Mr. Crisp, 61, has been a Director of the
Corporation since 1974. Mr. Crisp has been a
General Partner of Venrock Associates, a venture
capital firm, for more than five years. Mr. Crisp
is also a director of

2
<PAGE> 6

American Superconductor Corporation, Apple
Computer, Inc., Evans & Sutherland Computer
Corporation, Long Island Lighting Company,
Thermedics Inc., Thermo Power Corporation,
ThermoTrex Corporation and United States Trust
Corporation.
- --------------------------------------------------------------------------------

Roger D. Wellington Mr. Wellington, 67, has been a Director of the
Corporation since 1986. Mr. Wellington served as
Chairman of the Board of Augat Inc., a
manufacturer of electromechanical components, for
more than five years until becoming a consultant
in February 1989. Prior to February 1988, he also
held the positions of President and Chief
Executive Officer of Augat Inc. Mr. Wellington is
also a director of Bolt, Beranek & Newman, Inc.
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INCUMBENT DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 1996

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

George N. Hatsopoulos Dr. Hatsopoulos, 67, is the Chairman of the
Board, President and Chief Executive Officer of
the Corporation. He has served as a Director
since he founded the Corporation in 1956. Dr.
Hatsopoulos is also a director of Bolt, Beranek &
Newman, Inc., Thermedics Inc., Thermo Fibertek
Inc., Thermo Instrument Systems Inc., Thermo
Power Corporation, Thermo Process Systems Inc.
and ThermoTrex Corporation. Dr. Hatsopoulos is
the brother of Mr. John N. Hatsopoulos, an
Executive Vice President and the Chief Financial
Officer of the Corporation.
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Robert A. McCabe Mr. McCabe, 59, has been a Director of the
Corporation since 1962. He has served as
President of Pilot Capital Corporation, which is
engaged in private investments and provides
acquisition services, since 1987. Prior to that
time, Mr. McCabe was a Managing Director of
Shearson Lehman Brothers Inc., an investment
banking firm. Mr. McCabe is also a director of
Borg-Warner Security Corporation, Church & Dwight
Company, Morrison-Knudsen Corporation, Neutrogena
Corporation and Thermo Instrument Systems Inc.
- --------------------------------------------------------------------------------

Hutham S. Olayan Ms. Olayan, 40, has been a Director of the
Corporation since 1987. She has served as
President and a director of Crescent Diversified
Limited, a member of the Olayan Group of
Companies engaged in private investments, since
1985. Ms. Olayan has also served as President and
a director of Competrol Real Estate Limited,
another member of the Olayan Group, since 1986.
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INCUMBENT DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 1995

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

Elias P. Gyftopoulos Dr. Gyftopoulos, 66, has been a Director of the
Corporation since 1976. Dr. Gyftopoulos has been
the Ford Professor of Mechanical and Nuclear
Engineering at the Massachusetts Institute of
Technology for more than five years. Dr.
Gyftopoulos is also a director of Thermo
Instrument Systems Inc.
- --------------------------------------------------------------------------------

3
<PAGE> 7

Frank Jungers Mr. Jungers, 67, has been a Director of the
Corporation since 1978. Mr. Jungers has been a
consultant on business and energy matters since
1977. Mr. Jungers was Vice Chairman of Riedel
Environmental Technologies, Inc. from July 1989
to October 1991 and was President of that company
from January 1989 until July 1989. Mr. Jungers
was employed by the Arabian American Oil Company
from 1974 through 1977 as Chairman and Chief
Executive Officer. Mr. Jungers is also a director
of The AES Corporation, Dual Drilling Company,
Georgia-Pacific Corporation, Star Technologies
Inc. and Thermo Instrument Systems Inc.
- --------------------------------------------------------------------------------

Frank E. Morris Dr. Morris, 70, has been a Director of the
Corporation since 1989. Dr. Morris is currently
the Peter Drucker Professor of Management at
Boston College. Dr. Morris served as President of
the Federal Reserve Bank of Boston from 1968
until he retired in 1988. Dr. Morris is a trustee
of SEI Liquid Asset Trust, SEI Cash + Plus Trust,
SEI Tax Exempt Trust, SEI Index Funds, SEI
International Trust, SEI Institutional Managed
Trust, The Capitol Mutual Funds, FFB Lexicon
Funds and The Arbor Fund.
- --------------------------------------------------------------------------------

Donald E. Noble Mr. Noble, 79, has been a Director of the
Corporation since 1983. For 20 years, from 1959
to 1980, Mr. Noble served as the chief executive
officer of Rubbermaid, Incorporated, first with
the title of President and then as Chairman of
the Board. Mr. Noble is also a director of Thermo
Fibertek Inc., Thermo Power Corporation and
Thermo Process Systems Inc.
- --------------------------------------------------------------------------------

COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors has established an Executive Committee, an Audit
Committee and a Human Resources Committee. The present members of the Executive
Committee are Dr. Hatsopoulos (Chairman), Mr. Crisp, Mr. Jungers and Mr. Noble.
The Executive Committee is empowered to act when it is impractical to call a
meeting of the entire Board of Directors and with certain exceptions has the
powers of the Board of Directors. The Audit Committee consists solely of
non-management Directors, and its present members are Mr. McCabe (Chairman), Mr.
Crisp, Mr. Jungers, Mr. Noble and Ms. Olayan. 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 Human Resources Committee consists solely of
non-management Directors, and its present members are Mr. Wellington (Chairman),
Dr. Gyftopoulos, Mr. Jungers and Mr. Noble. The Human Resources Committee
reviews corporate organization, reviews the performance of senior members of
management, recommends executive compensation and administers the Corporation's
stock option and other stock-based plans. The Board of Directors has no
nominating committee. The Board of Directors met ten times, the Executive
Committee met five times, the Audit Committee met twice and the Human Resources
Committee met seven times during fiscal 1993. Each Director attended at least
75% of all meetings of the Board and applicable committees held during his or
her tenure.

COMPENSATION OF DIRECTORS

Directors who are not employees of the Corporation receive an annual
retainer of $10,000 and a fee of $1,000 per day for attending regular meetings
of the Board of Directors or its committees and for each day of consulting for
the Corporation (including travel time), and $500 per day for participating in
meetings of the Board of Directors or such committees held by means of
conference telephone. Payment of Directors' fees is made quarterly. Dr. G.
Hatsopoulos, who is a full-time employee of the Corporation, does not receive
any cash compensation from the Corporation for his services as a Director other
than his salary. In addition to their retainers and meeting attendance fees, Dr.
Gyftopoulos, Mr. Jungers and Mr. Noble received $34,000, $2,500 and $1,500,
respectively, for consulting on behalf of the Corporation during fiscal 1993.

4
<PAGE> 8

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. Amounts so deferred are valued on the date of
deferral as units of Common Stock. When payable, amounts deferred may be
disbursed solely in shares of Common Stock accumulated under the Deferred
Compensation Plan. A total of 301,875 shares of Common Stock is currently
reserved for issuance under the Deferred Compensation Plan. As of January 29,
1994, deferred units equal to 125,908.29 shares of Common Stock were accumulated
under the Deferred Compensation Plan for current Directors.

In 1993, the Corporation adopted a directors stock option plan (the
"Directors Stock Plan"). The Directors Stock Plan provides for the annual grant
of stock options to purchase shares of Common Stock (and for grants over a
five-year period of stock options to purchase shares of the common stock of
publicly traded, majority-owned subsidiaries of the Corporation beneficially
owned by the Corporation) to non-management Directors as additional compensation
for their attendance at or participation in meetings of the Board of Directors
and its committees. Each year at the close of business on the day of the Annual
Meeting of the Stockholders, options to purchase 1,500 shares of Common Stock
and options to purchase shares of the common stock of the applicable subsidiary
or subsidiaries (as determined by the schedule in the following sentence) are
granted to each eligible Director holding office at the conclusion of the
meeting. In 1993, options were granted to purchase 3,000 and 4,500 shares of the
common stock of Thermo Fibertek Inc. and ThermoTrex Corporation, respectively;
options to purchase the specified number of shares will be granted each year the
Directors Stock Plan is in effect on the following schedule -- years 1994 and
1999: 4,500 shares -- Thermedics Inc., 3,000 shares -- Thermo Power Corporation
and 3,000 shares -- Thermo Remediation Inc.; years 1995 and 2000: 4,500 shares
- -- Thermo Instrument Systems Inc. and 4,500 shares -- Thermo Voltek Corp.; years
1996 and 2001: 3,000 shares -- Thermo Process Systems Inc.; years 1997 and 2002:
6,000 shares -- Thermo Cardiosystems Inc.; and year 1998: 3,000 shares -- Thermo
Fibertek Inc. and 4,500 shares -- ThermoTrex Corporation. All share calculations
have been adjusted to reflect stock splits effected following the adoption of
the Directors Stock Plan. In addition, if any other majority-owned subsidiary of
the Corporation becomes a public company during the operation of the Directors
Plan, it will be added to the schedule for the meeting next following its
initial public offering.

The exercise price for options to purchase Common Stock is determined by
the average of the closing prices of the Common Stock as reported on the New
York Stock Exchange, and the exercise price for options to purchase the common
stock of the Corporation's subsidiaries is determined by the average of the
closing prices of such common stock as reported on the American Stock Exchange,
in each case for the five trading days preceding and including the date of
grant. Options are exercisable six months after the date of grant and expire
seven years from the date of grant. In addition, shares of the common stock of
the Corporation's subsidiaries acquired upon such exercise will be 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 its public subsidiaries. These restrictions and
repurchase rights lapse at the rate of 20% per year, starting with the first
anniversary of the grant date.

An aggregate of 350,000 shares of Common Stock has been reserved for
issuance under the Directors Stock Plan. In addition, the following shares of
the common stock of each publicly traded subsidiary beneficially owned by the
Corporation have been reserved for issuance under the Directors Stock Plan (as
adjusted to reflect stock splits): 100,000 shares -- Thermo Fibertek Inc.,
Thermo Power Corporation, Thermo Process Systems Inc. and Thermo Remediation
Inc.; 150,000 shares -- Thermedics Inc., Thermo Instrument Systems Inc.,
ThermoTrex Corporation and Thermo Voltek Corporation; and 200,000 shares --
Thermo Cardiosystems Inc. As of January 29, 1994, options to purchase 13,500
shares of Common Stock, 24,000 shares of the common stock of Thermo Fibertek
Inc. and 36,000 (after adjustment to reflect a three-for-two stock split
effected in October 1993) shares of the common stock of ThermoTrex Corporation,
had been granted under the Directors Stock Plan at exercise prices of $39.23,
$9.98 and $10.00 per share, respectively. As of such date, no shares had been
issued pursuant to the exercise of options and no options to purchase shares had
lapsed.

5
<PAGE> 9

STOCK OWNERSHIP

The following table sets forth, as of January 29, 1994, the beneficial
ownership of the Corporation's Common Stock, as well as the beneficial ownership
of the common stock of Thermedics Inc., Thermo Fibertek Inc., Thermo Instrument
Systems Inc., Thermo Power Corporation, Thermo Process Systems Inc., and
ThermoTrex Corporation, all publicly traded, majority-owned subsidiaries of the
Corporation, of Thermo Cardiosystems Inc. and Thermo Voltek Corp., publicly
traded, majority-owned subsidiaries of Thermedics Inc., Thermo Remediation Inc.,
a publicly traded, majority-owned subsidiary of Thermo Process Systems Inc., by
(i) each Director, (ii) each of the Corporation's executive officers named in
the summary compensation table under the heading "Executive Compensation," and
(iii) all Directors and executive officers as a group.
<TABLE>
<CAPTION>
THERMO THERMO
THERMO THERMO INSTRUMENT THERMO PROCESS
ELECTRON THERMEDICS FIBERTEK SYSTEMS POWER SYSTEMS
NAME (1) CORPORATION(2) INC.(3) INC.(4) INC.(5) CORPORATION(6) INC.(7)
- -------------------------------- --------------- ---------- --------- ---------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
John M. Albertine............... 13,486 0 3,000 0 0 0
Peter O. Crisp (12)(13)......... 39,998 40,089 3,000 8,437 28,161 2,160
Elias P. Gyftopoulos............ 28,920 5,584 3,000 21,412 3,425 1,540
George N. Hatsopoulos........... 1,702,469 63,120 118,000 76,420 54,282 55,267
John N. Hatsopoulos............. 234,884 78,292 111,245 63,413 45,953 62,153
Robert C. Howard (12)........... 90,101 11,288 40,000 16,324 74,661 29,148
Frank Jungers................... 104,557 3,450 3,000 27,173 0 0
Robert A. McCabe (12)........... 18,451 7,498 3,000 27,777 16,634 2,160
Frank E. Morris................. 6,430 0 3,000 0 0 0
Donald E. Noble................. 19,923 9,673 47,465 28,168 11,795 41,297
Hutham S. Olayan (14)........... 6,611 0 3,000 0 0 0
William A. Rainville............ 95,293 0 222,628 0 0 60,000
Arvin H. Smith.................. 270,003 90,864 40,000 230,208 7,969 36,843
Roger D. Wellington............. 11,012 0 7,000 2,500 3,425 1,000
All Directors and executive
officers as a group (16
persons)(12).................. 2,870,380 353,138 657,557 529,182 272,108 325,308

THERMO THERMO THERMO
THERMOTREX CARDIOSYSTEMS VOLTEK REMEDIATION
NAME (1) CORPORATION(8) INC.(9) CORP.(10) INC.(11)
- -------------------------------- ----------- ------------- ------ -----------
<S> <C><C> <C> <C> <C>
John M. Albertine............... 4,500 7,500 0 0
Peter O. Crisp (12)(13)......... 25,256 15,000 0 0
Elias P. Gyftopoulos............ 4,500 7,500 0 0
George N. Hatsopoulos........... 49,302 24,374 0 5,000
John N. Hatsopoulos............. 42,159 23,100 17,749 33,788
Robert C. Howard (12)........... 48,802 22,500 0 1,600
Frank Jungers................... 11,000 7,500 0 2,000
Robert A. McCabe (12)........... 13,000 7,500 0 0
Frank E. Morris................. 4,500 7,500 0 0
Donald E. Noble................. 4,500 7,500 0 1,500
Hutham S. Olayan (14)........... 4,500 7,500 0 0
William A. Rainville............ 0 0 0 16,000
Arvin H. Smith.................. 2,700 20,000 0 1,600
Roger D. Wellington............. 4,500 7,500 0 0
All Directors and executive
officers as a group (16
persons)(12).................. 528,852 179,974 17,749 83,642
</TABLE>

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

(1) Shares of the Common Stock of the Corporation and of the common stock of
each of the Corporation's subsidiaries beneficially owned include shares
owned by the indicated person, by that person's spouse, by that person and
his spouse and by that person and his spouse (or either of them) for the
benefit of minor children. Except as reflected in the footnotes to this
table, all share ownership involves sole voting and investment power.

(2) Shares beneficially owned by Mr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr.
G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr. Wellington
and all Directors and executive officers as a group include 1,500, 1,500,
1,500, 738,544, 165,700, 28,290, 1,500, 1,500, 1,500, 1,500, 1,500, 55,700,
163,900, 1,500 and 1,226,959 shares, respectively, that such person or
members of the group have the right to acquire within 60 days of January
29, 1994, through the exercise of stock options. Shares beneficially owned
by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr. Smith and all
Directors and executive officers as a group include 840, 670, 1,161, 573
and 4,586 full shares, respectively, allocated to accounts maintained
pursuant to the Corporation's employee stock ownership plan (the "ESOP").
Shares beneficially owned by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr.
Howard, Mr. Smith and all Directors and executive officers as a group
include 4,404, 2,772, 3,011, 2,434 and 17,279 full shares, respectively,
allocated to accounts maintained pursuant to the Corporation's 401(k) plan.
Shares beneficially owned by Mr. Albertine, Mr. Crisp, Mr. Jungers, Mr.
McCabe, Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Wellington and all Directors
and executive officers as a group include 11,986, 18,656, 35,745, 15,433,
3,412, 16,905, 5,111, 8,387 and 115,635 shares, respectively, allocated to
accounts maintained pursuant to the Corporation's Deferred Compensation
Plan for Directors. Except for Dr. G. Hatsopoulos, who beneficially owned
3.5% of the Common Stock outstanding as of January 29, 1994, no Director or
executive officer beneficially owned more than 1% of the Common Stock
outstanding as of such date; all Directors and executive officers as a
group beneficially owned % of the Common Stock outstanding as of
January 29, 1994.
(Footnotes continued on following page)

6
<PAGE> 10

(3) Shares of the common stock of Thermedics Inc. beneficially owned by Mr.
Crisp, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr. Smith and
all Directors and executive officers as a group include 4,500, 50,000,
50,000, 10,000, 82,500 and 222,000 shares, respectively, that such person
or members of the group have the right to acquire within 60 days of January
29, 1994, through the exercise of stock options. Shares of the common stock
of Thermedics Inc. beneficially owned by Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Howard, Mr. Smith and all Directors and executive officers
as a group include 1,166, 1,176, 1,288, 1,019 and 6,773 full shares,
respectively, allocated to accounts maintained pursuant to the
Corporation's ESOP. Shares of the common stock of Thermedics Inc.
beneficially owned by Mr. Crisp and all Directors and executive officers as
a group include 5,294 shares allocated to Mr. Crisp's account maintained
pursuant to that corporation's Deferred Compensation Plan for Directors.
The Directors and executive officers of the Corporation did not
individually or as a group beneficially own more than 1% of the Thermedics
Inc. common stock outstanding as of January 29, 1994.

(4) Shares of the common stock of Thermo Fibertek Inc. beneficially owned by
Mr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Howard, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble,
Ms. Olayan, Mr. Rainville, Mr. Smith, Mr. Wellington and all Directors and
executive officers as a group include 3,000, 3,000, 3,000, 108,000,
108,000, 40,000, 3,000, 3,000, 3,000, 40,800, 3,000, 220,000, 40,000, 3,000
and 617,800 shares, respectively, that such person or members of the group
have the right to acquire within 60 days of January 29, 1994, through the
exercise of stock options. Shares of the common stock of Thermo Fibertek
Inc. beneficially owned by Mr. Noble and all Directors and executive
officers as a group include 1,027 shares allocated to Mr. Noble's account
maintained pursuant to that corporation's Deferred Compensation Plan for
Directors. No Director or executive officer beneficially owned more than 1%
of the Thermo Fibertek Inc. common stock outstanding as of January 29,
1994; all Directors and executive officers as a group beneficially owned
% of the Thermo Fibertek Inc. common stock outstanding as of such date.

(5) Shares of the common stock of Thermo Instrument Systems Inc. beneficially
owned by Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr.
Jungers, Mr. McCabe, Mr. Noble, Mr. Smith and all Directors and executive
officers as a group include 4,050, 50,000, 50,000, 3,600, 3,000, 2,250,
125,000 and 248,400 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of January 29, 1994,
through the exercise of stock options. Shares of the common stock of Thermo
Instrument Systems Inc. beneficially owned by Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Howard, Mr. Smith and all Directors and executive officers
as a group include 266, 267, 252, 268 and 1,559 full shares, respectively,
allocated to accounts maintained pursuant to the Corporation's ESOP. Shares
of the common stock of Thermo Instrument Systems Inc. beneficially owned by
Mr. Jungers, Mr. McCabe and all Directors and executive officers as a group
include 5,608, 3,800 and 9,408 shares, respectively, allocated to accounts
maintained pursuant to that corporation's Deferred Compensation Plan for
Directors. The Directors and executive officers of the Corporation did not
individually or as a group beneficially own more than 1% of the Thermo
Instrument Systems Inc. common stock outstanding as of January 29, 1994.

(6) Shares of the common stock of Thermo Power Corporation beneficially owned
by Mr. Crisp, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr. Noble
and all Directors and executive officers as a group include 2,900, 40,000,
40,000, 50,000, 3,000 and 144,900 shares, respectively, that such person or
members of the group have the right to acquire within 60 days of January
29, 1994, through the exercise of stock options. Shares of the common stock
of Thermo Power Corporation beneficially owned by Mr. Crisp, Mr. Noble and
all Directors and executive officers as a group include 7,168, 3,370 and
10,538 shares, respectively, allocated to accounts maintained pursuant to
that corporation's Deferred Compensation Plan for Directors. No Director or
executive officer beneficially owned more than 1% of the Thermo Power
Corporation common stock outstanding as of January 29, 1994; all Directors
and executive officers as a group beneficially owned % of the Thermo
Power Corporation common stock outstanding as of such date.

(7) Shares of the common stock of Thermo Process Systems Inc. beneficially
owned by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Noble, Mr. Rainville,
Mr. Smith and all Directors and executive officers as a group include
40,000, 40,000, 3,300, 60,000, 35,000 and 185,300 shares, respectively,
that such person or members of the group have the right to acquire within
60 days of January 29, 1994, through the exercise of stock options. Shares
of the common stock of Thermo Process Systems Inc. beneficially owned by
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr. Smith and all
Directors and executive officers as a group include 108, 111, 107, 111 and
657 full shares, respectively, allocated to accounts maintained pursuant to
the Corporation's ESOP. Shares of the common stock of Thermo Process
Systems Inc. beneficially owned by Mr. Noble and all Directors and
executive officers as a group include 14,957 shares allocated to Mr.
Noble's account maintained pursuant to that corporation's Deferred
Compensation Plan for Directors. Shares of the common stock of Thermo
Process Systems Inc. beneficially owned by Mr. J. Hatsopoulos and all
Directors and executive officers as a group include 12,500 shares that Mr.
J. Hatsopoulos has the right to acquire within 60 days of January 29, 1994,
through the exercise of stock purchase warrants acquired in connection with
private placements of securities by Thermo Process Systems Inc. and one or
more of that corporation's subsidiaries on terms identical to terms granted
to outside investors. Shares of the common stock of Thermo Process Systems
Inc. beneficially owned by Mr. Howard and by all Directors and executive
officers as a group include 29,041 shares that Mr. Howard has the right to
acquire within 60 days of January 29, 1994 upon conversion of Thermo
Process Systems Inc.'s 6 1/2% convertible debentures due 1997. The
Directors and executive officers of the Corporation did not individually or
as a group beneficially own more than 1% of the Thermo Process Systems Inc.
common stock outstanding as of January 29, 1994.

(8) Shares of the common stock of ThermoTrex Corporation beneficially owned by
Mr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Howard, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble,
Ms. Olayan, Mr. Rainville, Mr. Smith, Mr. Wellington and all Directors and
executive officers as a group include 4,500, 24,600, 4,500, 36,870, 30,000,
36,600, 4,500, 4,500, 4,500, 4,500, 4,500, 2,700, 2,700, 4,500 and 181,670
shares, respectively, that such person or members of the group have the
right to acquire within 60 days of January 29, 1994, through the exercise
of stock options. Shares of the common stock of ThermoTrex Corporation
beneficially owned by Mr. Crisp and all Directors and executive officers as
a group include 656 shares allocated to Mr. Crisp's account maintained
pursuant to that corporation's Deferred Compensation Plan for Directors.
The Directors and executive officers of the Corporation did not
individually or as a group beneficially own more than 1% of the ThermoTrex
Corporation common stock outstanding as of January 29, 1994.

7
<PAGE> 11

(9) Shares of the common stock of Thermo Cardiosystems Inc. beneficially owned
by Mr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Howard, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble,
Ms. Olayan, Mr. Smith, Mr. Wellington and all Directors and executive
officers as a group include 7,500, 15,000, 7,500, 22,500, 22,500, 22,500,
7,500, 7,500, 7,500, 7,500, 7,500, 20,000, 7,500 and 177,500 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of January 29, 1994, through the exercise of stock
options. The Directors and executive officers of the Corporation did not
individually or as a group beneficially own more than 1% of the Thermo
Cardiosystems Inc. common stock outstanding as of January 29, 1994.

(10) Shares of the common stock of Thermo Voltek Corp. beneficially owned by Mr.
J. Hatsopoulos and all Directors and executive officers as a group include
4,999 shares that Mr. J. Hatsopoulos has the right to acquire within 60
days of January 29, 1994, through the exercise of stock options. The
Directors and executive officers of the Corporation did not individually or
as a group beneficially own more than 1% of the Thermo Voltek Corp. common
stock outstanding as of January 29, 1994.

(11) Shares of the common stock of Thermo Remediation Inc. beneficially owned by
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr. Rainville, Mr.
Smith and all Directors and executive officers as a group include 5,000,
15,000, 1,600, 15,000, 1,600 and 49,800 shares, respectively, that such
person or members of the group have the right to acquire within 60 days of
January 29, 1994, through the exercise of stock options. The Directors and
executive officers of the Corporation did not individually or as a group
beneficially own more than 1% of the Thermo Remediation Inc. common stock
outstanding as of January 29, 1994.

(12) Mr. Crisp, Mr. Howard, Mr. McCabe and all Directors and executive officers
as a group own 2,500, 10,000, 10,000 and shares, respectively, of the
common stock of ThermoLase Inc., a subsidiary of ThermoTrex Corporation.

(13) Shares beneficially owned by Mr. Crisp do not include shares of
common stock of Thermedics Inc., 287,233 shares of common stock of
ThermoTrex Corporation owned by Venrock Associates or 150,000 shares of
common stock of ThermoLase Inc. Mr. Crisp is both a general and limited
partner of Venrock Associates and, therefore, may be deemed to share voting
and investment power with respect to shares owned by that entity. Mr. Crisp
disclaims beneficial ownership of the shares owned by Venrock Associates.
Shares owned by Mr. Crisp do not include 7,500 shares of common stock of
ThermoLase Inc. held by a trust of which Mr. Crisp is trustee. Mr. Crisp
disclaims beneficial ownership of the shares owned by such trust.

(14) Shares beneficially owned by Ms. Olayan do not include 1,800,000 shares of
Common Stock of the Corporation or 100,000 shares of common stock of
ThermoLase Inc. owned by Crescent Diversified Limited. Ms. Olayan is the
president and a director of Crescent Diversified Limited, which is
indirectly controlled by Suliman S. Olayan, Ms. Olayan's father. Ms. Olayan
disclaims beneficial ownership of the shares owned by Crescent Diversified
Limited.

DISCLOSURE OF CERTAIN LATE FILINGS

A review of the Corporation's records revealed that during 1993, Mr.
Rainville reported late a transfer in December 1993 of shares to the Corporation
to satisfy a tax withholding obligation.

8
<PAGE> 12

EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

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 four other most highly compensated executive officers
for the fiscal years ended January 1, 1994, January 2, 1993, and December 28,
1991.

<TABLE>

SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------

<CAPTION>
LONG TERM
COMPENSATION
--------------
ANNUAL COMPENSATION AWARDS OF
---------------------------- OPTIONS (NO. ALL
NAME AND FISCAL OF SHARES AND OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPANY)(1)(2) COMPENSATION(3)
- ------------------------------ ----- -------- -------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
George N. Hatsopoulos......... 1993 $417,000 $450,000 430,000(TMO) $10,118
President and Chief 50,000(TMD)
Executive Officer 10,000(TES)
20,000(TFT)
50,000(THI)
40,000(THP)
40,000(TPI)
5,000(THN)
36,000(TLZ)
30,000(TKN)
1992 $403,000 $363,000 90,000(TMO) $ 6,546
88,000(TFT)
1991 $390,000 $350,000 120,000(TMO) $ 6,356
21,600(TKN)
- ------------------------------------------------------------------------------------------------
John N. Hatsopoulos........... 1993 $256,000 $375,000 88,600(TMO) $10,118
Executive Vice President & 50,000(TMD)
Chief Financial Officer 10,000(TES)
20,000(TFT)
50,000(THI)
40,000(THP)
40,000(TPI)
15,000(THN)
36,000(TLZ)
30,000(TKN)
1992 $248,000 $237,600 48,900(TMO) $ 9,414
22,500(TMD)
88,000(TFT)
1991 $240,000 $222,000 5,700(TMO) $ 9,414
21,600(TKN)
- ------------------------------------------------------------------------------------------------
Arvin H. Smith................ 1993 $240,000 $304,000 30,850(TMO) $10,023
Executive Vice President 30,000(TMD)
125,000(THI)
1,600(THN)
1992 $223,000 $203,800 54,000(TMO) $ 8,891
52,500(TMD)
20,000(TCA)
40,000(TFT)
35,000(TPI)
1991 $210,000 $188,000 4,500(TMO) $ 8,891
2,700(TKN)
</TABLE>

<PAGE> 13

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------
ANNUAL COMPENSATION AWARDS OF
----------------------------- OPTIONS (NO. ALL
NAME AND FISCAL OF SHARES AND OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPANY)(1)(2) COMPENSATION(3)
- ------------------------------ ------ -------- -------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
ROBERT C. HOWARD.............. 1993 $237,000 $145,000 3,600(TMO) $10,422
Executive President 10,000(TMD)
10,000(TES)
40,000(THP)
1,600(THN)
36,000(TLZ)
30,000(TKN)
1992 $237,000 $131,600 4,950(TMO) $ 9,414
10,000(TES)
40,000(TFT)
10,000(THP)
1991 $230,000 $126,000 4,350(TMO) $ 9,414
21,600(TKN)
- ------------------------------------------------------------------------------------------------
William A. Rainville.......... 1993 $170,800 $105,000 23,000(TMO) $14,717
Senior Vice President 40,000(TFT)
60,000(TPI)
15,000(THN)
1992 $165,000 $148,500 3,600(TMO) $13,528
180,000(TFT)
1991 $150,000 $113,000 2,400(TMO) $12,337
2,700(TKN)
</TABLE>

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

(1) In addition to grants of options to purchase Common Stock of the Corporation
(designated in the table as TMO), executive officers of the Corporation have
been granted options to purchase common stock of subsidiaries of the
Corporation, either as compensation for their services to the Corporation or
to its subsidiaries. Options were granted during the last three fiscal years
to the chief executive officer and the other named executive officers in
their capacities as executive officers of the Corporation or Directors or
executive officers of the following subsidiaries of the Corporation: Thermo
Fibertek Inc. (designated in the table as TFT), ThermoTrex Corporation
(designated in the table as TKN), Thermo Energy Systems Corporation
(designated in the table as TES), Thermedics Inc. (designated in the table
as TMD), Thermo Voltek Corp. (designated in the table as TVL), ThermoLase
Inc. (designated in the table as TLZ), Thermo Power Corporation (designated
in the table as THP), Thermo Cardiosystems Inc. (designated in the table as
TCA) and Thermo Process Systems Inc. (designated in the table as TPI). The
number of shares subject to option have been adjusted as applicable to
reflect the following stock splits: three-for-two stock splits effected in
October 1993 with respect to the common stock of Thermo Electron (designated
in the table as TMO) and ThermoTrex Corporation (designated in the table as
TKN); a three-for-two stock split effected in November 1993 with respect to
the common stock of Thermedics Inc. (designated in the table as TMD); a
two-for-one stock split effected in November 1993 with respect to the common
stock of Thermo Cardiosystems Inc. (designated in the table as TCA); a
three-for-two stock split effected in July 1993 with respect to the common
stock of Thermo Instrument Systems Inc. (designated in the table as THI);
and a two-for-one stock split effected in March 1994 with respect to the
common stock of ThermoLase Inc. (designated in the table as TLZ).

(2) No awards of restricted stock of the Corporation were made to the chief
executive officer or other named executive officers during the last three
fiscal years. As of January 2, 1994, the amount and value of each executive
officer's restricted stock holdings were as follows: Dr. G. Hatsopoulos --
9,000 shares valued at $369,000; Mr. J. Hatsopoulos -- 1,800 shares valued
at $73,800; Mr. Smith -- 4,500 shares valued at $184,500; Mr. Howard --
1,800 shares valued at $73,800; and Mr. Rainville -- 2,700 shares valued at
$110,700.

(3) For all executive officers except Mr. Rainville, this amount represents
matching contributions made on behalf of the executive officer by the
Corporation pursuant to the Corporation's 401(k) plan. As to Mr. Rainville,
this amount represents employer contributions to his account under the
profit sharing plan of Thermo Fibertek Inc., a majority-owned subsidiary of
the Corporation.

10
<PAGE> 14

STOCK OPTIONS GRANTED DURING FISCAL 1993

The following table sets forth information concerning individual grants of
stock options made during fiscal 1993 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 1993.

<TABLE>

OPTION GRANTS IN FISCAL 1993
- --------------------------------------------------------------------------------

<CAPTION>
NUMBER OF SHARES PERCENT POTENTIAL REALIZABLE
UNDERLYING OF VALUE AT ASSUMED
OPTIONS GRANTED TOTAL ANNUAL RATES OF
TO PURCHASE OPTIONS STOCK PRICE
COMMON STOCK OF GRANTED EXERCISE APPRECIATION FOR
THERMO ELECTRON TO PRICE OPTION TERM
AND ITS EMPLOYEES PER EXPIRATION ----------------------
NAME SUBSIDIARIES(1)(2) IN 1993 SHARE(2) DATE 5% ($) 10% ($)
- ------------------------- ----------------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
George N. Hatsopoulos.... 45,000 (TMO)(3) 4.0% $ 37.07 4/3/03 $1,049,091 $ 2,658,601
45,000 (TMO)(3) 4.0% $ 39.40 7/3/03 $1,115,030 $ 2,825,705
45,000 (TMO)(3) 4.0% $ 42.32 10/2/03 $1,197,667 $ 3,035,123
295,000 (TMO) 26.0% $ 41.38 12/14/05 $9,715,098 $26,104,009
50,000 (TMD) 4.8% $ 16.28 12/9/05 $ 647,827 $ 1,740,681
10,000 (TES) 2.8% $ 8.25 12/15/03 N/A N/A
20,000 (TFT) 4.1% $ 13.83 12/1/03 $ 173,952 $ 440,829
50,000 (THI) 4.3% $ 31.28 12/16/05 $1,244,719 $ 3,344,502
40,000 (THP) 5.2% $ 9.10 12/9/03 $ 228,918 $ 580,122
40,000 (TPI) 6.9% $ 9.28 12/3/03 $ 233,446 $ 591,597
5,000 (THN) 1.2% $ 10.39 11/16/00 $ 21,149 $ 49,286
36,000 (TLZ) 3.0% $ 3.50 1/13/00 N/A N/A
30,000 (TKN) 4.5% $ 15.45 12/21/03 $ 291,493 $ 738,700
John N. Hatsopoulos...... 15,000 (TMO) 1.3% $ 37.07 4/3/00 $ 226,368 $ 527,534
3,600 (TMO) 0.3% $ 35.40 3/9/98 $ 35,209 $ 77,803
70,000 (TMO) 6.2% $ 41.38 12/14/05 $2,305,277 $ 6,194,172
50,000 (TMD) 4.8% $ 16.28 12/9/05 $ 647,827 $ 1,740,681
10,000 (TES) 2.8% $ 8.25 12/15/03 N/A N/A
20,000 (TFT) 4.1% $ 13.83 12/1/03 $ 173,952 $ 440,829
50,000 (THI) 4.3% $ 31.28 12/16/05 $1,244,719 $ 3,344,502
40,000 (THP) 5.2% $ 9.10 12/9/03 $ 228,918 $ 580,122
40,000 (TPI) 6.9% $ 9.28 12/3/03 $ 233,446 $ 591,597
15,000 (THN) 3.5% $ 10.39 10/18/00 $ 63,447 $ 147,858
36,000 (TLZ) 3.0% $ 3.50 1/13/00 N/A N/A
30,000 (TKN) 4.5% $ 15.45 12/21/03 $ 291,493 $ 738,700
Arvin H. Smith........... 15,000 (TMO) 1.3% $ 37.07 4/3/00 $ 226,368 $ 527,534
5,850 (TMO) 0.5% $ 35.40 3/9/98 $ 57,215 $ 126,431
10,000 (TMO) 0.9% $ 41.38 12/14/05 $ 329,325 $ 884,882
30,000 (TMD) 2.9% $ 16.28 12/9/05 $ 388,696 $ 1,044,408
125,000 (THI) 10.6% $ 31.28 12/16/05 $3,111,798 $ 8,361,255
1,600 (THN) 0.4% $ 10.39 11/16/00 $ 6,768 $ 15,771
</TABLE>

11
<PAGE> 15

<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT POTENTIAL REALIZABLE
UNDERLYING OF VALUE AT ASSUMED
OPTIONS GRANTED TOTAL ANNUAL RATES OF
TO PURCHASE OPTIONS STOCK PRICE
COMMON STOCK OF GRANTED EXERCISE APPRECIATION FOR
THERMO ELECTRON TO PRICE OPTION TERM
AND ITS EMPLOYEES PER EXPIRATION ----------------------
NAME SUBSIDIARIES(1)(2) IN 1993 SHARE(2) DATE 5% ($) 10% ($)
- ------------------------- ----------------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert C. Howard......... 3,600 (TMO) 0.3% $ 35.40 3/9/98 $ 35,209 $ 77,803
10,000 (TMD) 1.0% $ 16.28 12/9/05 $ 129,565 $ 348,136
10,000 (TES) 2.8% $ 8.25 12/15/03 N/A N/A
40,000 (THP) 5.2% $ 9.10 12/9/03 $ 228,918 $ 580,122
1,600 (THN) 0.4% $ 10.39 11/16/00 $ 6,768 $ 15,771
36,000 (TLZ) 3.0% $ 3.50 1/13/00 N/A N/A
30,000 (TKN) 4.5% $ 15.45 12/21/03 $ 291,493 $ 738,700
William A. Rainville..... 3,000 (TMO) 0.3% $ 35.40 3/9/98 $ 29,341 $ 64,836
20,000 (TMO) 1.8% $ 41.38 12/14/05 $ 658,651 $1,769,763
40,000 (TFT) 8.2% $ 13.83 12/1/03 $ 347,905 $ 881,658
35,000 (TPI) 6.0% $ 9.58 3/24/00 $ 136,501 $ 318,105
25,000 (TPI) 4.3% $ 9.28 12/3/03 $ 145,904 $ 369,748
15,000 (THN) 3.5% $ 10.39 10/18/00 $ 63,447 $ 147,858
</TABLE>

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

(1) In addition to grants of options to purchase Common Stock of the Corporation
(designated in the table as TMO), executive officers of the Corporation have
been granted options to purchase common stock of subsidiaries of the
Corporation, either as compensation for their services to the Corporation or
to its subsidiaries. Options were granted during fiscal 1993 to the chief
executive officer and the other named executive officers in their capacities
as executive officers of the Corporation or directors or executive officers
of the following subsidiaries of the Corporation: Thermo Fibertek Inc.
(designated in the table as TFT), Thermedics Inc. (designated in the table
as TMD), Thermo Cardiosystems Inc. (designated in the table as TCA), Thermo
Energy Systems Corporation (designated in the table as TES), Thermo
Instrument Systems Inc. (designated in the table as THI), ThermoLase Inc.
(designated in the table as TLZ), Thermo Power Corporation (designated in
the table as THP), Thermo Process Systems Inc. (designated in the table as
TPI), Thermo Remediation Inc. (designated in the table as THN), and
ThermoTrex Corporation (designated in the table as TKN). All of the options
reported outstanding at the end of the fiscal year are immediately
exercisable at the date of grant, except for Thermo Energy Systems
Corporation awards, which are not exercisable until 90 days after that
company's stock becomes publicly traded, and ThermoLase Inc. awards, which
are not exercisable until 180 days after that company's stock becomes
publicly traded. However, the shares acquired upon exercise are subject to
repurchase by the Corporation at the exercise price upon certain events,
which repurchase rights lapse over time, provided the optionee has remained
continuously employed by the Corporation. The Corporation may permit the
holders of all 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.

(2) The number of shares subject to option and the exercise prices have been
adjusted as applicable to reflect the following stock splits: three-for-two
stock splits effected in October 1993 with respect to the common stock of
Thermo Electron (designated in the table as TMO) and ThermoTrex Corporation
(designated in the table as TKN); a three-for-two stock split effected in
November 1993 with respect to the common stock of Thermedics Inc.
(designated in the table as TMD); a two-for-one stock split effected in
November 1993 with respect to the common stock of Thermo Cardiosystems Inc.
(designated in the table as TCA); a three-for-two stock split effected in
July 1993 with respect to the common stock of Thermo Instrument Systems Inc.
(designated in the table as THI); and a two-for-one stock split effected in
March 1994 with respect to the common stock of ThermoLase Inc. (designated
in the table as TLZ).

(3) In addition to the terms described in footnote 1, above, shares acquired
upon exercise of these options are restricted from resale until retirement
by the executive.

12
<PAGE> 16

STOCK OPTIONS EXERCISED DURING FISCAL 1993 AND FISCAL YEAR-END VALUES

The following table reports certain information regarding stock option
exercises during fiscal 1993 and outstanding stock options held at the end of
fiscal 1993 by the Corporation's chief executive officer and the other named
executive officers. No stock appreciation rights were exercised or were
outstanding during fiscal 1993.

AGGREGATED OPTION EXERCISES IN FISCAL 1993 AND FISCAL YEAR END OPTION VALUES
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SHARES UNEXERCISED
SHARES UNDERLYING IN-THE-MONEY
ACQUIRED ON VALUE UNEXERCISED OPTIONS AT
NAME COMPANY EXERCISE(#)(1) REALIZED OPTIONS(#)(1)(2) YEAR-END($)
- ------------------ -------------------------- ---------------- ----------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
George N.
Hatsopoulos..... Thermo Electron 4,000 $ 135,420 733,744 $5,701,229
Thermedics -- -- 50,000 --
Thermo Cardiosystems -- -- 22,500 $ 366,075
Thermo Energy Systems -- -- 36,000(3) --
Thermo Fibertek -- -- 108,000 $ 843,900
Thermo Instrument Systems -- -- 50,000 $ 179,750
Thermo Power -- -- 40,000 $ 6,000
Thermo Process Systems -- -- 40,000 --
Thermo Remediation -- -- 5,000 $ 11,175
ThermoLase -- -- 36,000(3) --
ThermoTrex -- -- 36,600 $ 72,105
John N.
Hatsopoulos..... Thermo Electron 50,849 $1,040,499 165,701 $1,375,388
Thermedics 45,000 $ 235,238 50,000 --
Thermo Cardiosystems -- -- 22,500 $ 366,075
Thermo Energy Systems -- -- 36,000(3) --
Thermo Fibertek -- -- 108,000 $ 843,900
Thermo Instrument Systems -- -- 50,000 $ 179,750
Thermo Power -- -- 40,000 $ 6,000
Thermo Process Systems -- -- 40,000 --
Thermo Remediation -- -- 15,000 $ 33,525
Thermo Voltek -- -- 4,999 $ 23,095
ThermoLase -- -- 36,000(3) --
ThermoTrex -- -- 30,000 --
Arvin H. Smith.... Thermo Electron -- -- 163,900 $2,801,407
Thermedics -- -- 82,500 $ 531,563
Thermo Cardiosystems -- -- 20,000 $ 155,000
Thermo Energy Systems -- -- 4,000(3) --
Thermo Fibertek -- -- 40,000 $ 365,000
Thermo Instrument Systems -- -- 125,000 $ 449,375
Thermo Process Systems -- -- 35,000 --
Thermo Remediation -- -- 1,600 $ 3,576
ThermoTrex -- -- 2,700 $ 29,498
Robert C. Howard.. Thermo Electron -- -- 30,690 $ 578,305
Thermedics -- -- 10,000 --
Thermo Cardiosystems -- -- 22,500 $ 366,075
Thermo Energy Systems -- -- 46,000(3) --
Thermo Fibertek -- -- 40,000 $ 365,000
Thermo Power -- -- 50,000 $ 22,700
Thermo Process Systems 1,296 $ 7,199 -- --
Thermo Remediation -- -- 1,600 $ 3,576
ThermoLase -- -- 36,000(3) --
ThermoTrex -- -- 36,600 $ 72,105
</TABLE>

13
<PAGE> 17

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

(1) The number of shares have been adjusted as applicable to reflect the
following stock splits: three-for-two stock splits effected in October 1993
with respect to common stock of Thermo Electron and ThermoTrex Corporation;
three-for-two stock splits effected in November 1993 with respect to common
stock of Thermedics Inc. and Thermo Voltek Corp.; a three-for-two stock
split effected in July 1993 with respect to common stock of Thermo
Instrument Systems Inc.; and two-for-one stock splits effected in November
1993 and March 1994 with respect to common stock of Thermo CardioSystems
Inc. and ThermoLase Inc., respectively.

(2) All of the options reported outstanding at the end of the fiscal year are
immediately exercisable on the date of grant, except as noted in footnote
(3). However, the shares acquired upon exercise are subject to repurchase by
the Corporation at the exercise price upon certain events, which repurchase
rights lapse over time, provided that the optionee has remained continuously
employed by the Corporation.

(3) All of these options were unexercisable at the end of the fiscal year.

</TABLE>

DEFINED BENEFIT RETIREMENT PLAN

Thermo Electron Web Systems Inc., a wholly owned subsidiary of Thermo
Fibertek Inc., maintains a defined benefit retirement plan (the "Retirement
Plan") for eligible U.S. employees. Mr. Rainville is the chief executive officer
of Thermo Fibertek Inc. and the only executive officer of the Corporation who
participates in the Retirement Plan. The following table sets forth the
estimated annual benefits payable under the Retirement Plan upon retirement to
employees of the subsidiary in specified compensation and years-of-service
classifications. The estimated benefits at certain compensation levels reflect
the statutory limits on compensation that can be recognized for plan purposes.
This limit is currently $ per year.

<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------
COMPENSATION 15 20 25 30
-------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
$100,000 ...................................... $26,250 $35,000 $43,750 $ 48,125
125,000 ...................................... 32,813 43,750 54,688 60,156
150,000 ...................................... 39,375 52,500 65,625 72,188
175,000 ...................................... 45,938 61,250 76,563 84,219
200,000 ...................................... 52,500 70,000 87,500 96,250
225,000 ...................................... 59,063 78,750 98,438 108,281
</TABLE>

Each eligible employee receives a retirement benefit, beginning at normal
retirement age (65), based on a percentage (1.75%) of the average monthly
compensation of such employee before retirement, multiplied by his years of
service (up to a maximum of 30 years). Benefits are reduced for retirement
before normal retirement age. Average monthly compensation is generally defined
as average monthly base salary over the five years of highest compensation in
the ten-year period preceding retirement. For 1993, the compensation of Mr.
Rainville recognized for plan purposes was $ . The estimated credited
years of service recognized under the Retirement Plan for Mr. Rainville is 35,
assuming retirement at age 65. No benefits under the Retirement Plan vest for an
employee until after five years of participation, at which time they become
fully vested. The plan benefits shown are payable during the employee's lifetime
unless the employee elects another form of benefit that provides death benefit
protection.

SEVERANCE AGREEMENTS

The executive officers and certain key employees of the Corporation have
entered into contracts with the Corporation that provide severance benefits if
there is a change of control of the Corporation (as defined in the contract)
that is not approved by the Board of Directors and their employment is
terminated, for whatever reason, within one year thereafter.

14
<PAGE> 18

In 1983, the Corporation entered into severance agreements with all of the
named executive officers, except Mr. Rainville. For these severance agreements,
the benefit is stated as an initial percentage which was established by the
Board of Directors and was generally based upon the employee's age and length of
service with the Corporation. 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 10% in each of
the succeeding four years in which benefits are paid. The initial percentage to
be so applied to Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Smith and Mr.
Howard is 98.1%, 76.1%, 59.1%, and 74.3%, respectively.

Assuming that severance benefits would have been payable under such
agreements as of April 2, 1994, the payments thereunder for the first year
thereof to Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Smith and Mr. Howard
would have been approximately $850,000, $480,000, $320,000 and $284,000,
respectively.

During 1988, Mr. Rainville entered into a severance agreement with the
Corporation pursuant to which he will receive a lump sum benefit at the time of
a qualifying severance equal to the highest total cash compensation paid to him
in any twelve-month period during the three years preceding the severance event.
A qualifying severance exists (i) if Mr. Rainville's employment is terminated
for any reason within one year after a change in control of the Corporation or
(ii) a group of directors of the Corporation consisting of directors of the
Corporation on the date of the severance agreement or, if an election contest or
tender or exchange offer for the Corporation's Common Stock has occurred, the
directors of the Corporation immediately prior to such election contest or
tender or exchange offer, and any future directors who are nominated or elected
by such directors, determines that any other termination of Mr. Rainville's
employment should be treated as a qualifying severance. The benefits under this
agreement are limited in such a manner that the payments will not constitute a
so-called "excess parachute payment" under applicable provisions of the Internal
Revenue Code of 1986, as amended. Assuming that severance benefits would have
been payable as of April 2, 1994, the payment under such agreement would have
been approximately $313,000.

COMMITTEE REPORT ON EXECUTIVE COMPENSATION

All decisions on the compensation of the Corporation's executive officers
are made by the Human Resources Committee of the Board of Directors (the
"Committee"). Decisions on the cash compensation for the Chief Executive Officer
of the Corporation are reviewed by the full Board of Directors. Grants or awards
of stock options to executive officers are made solely by the Committee in
compliance with the requirements of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934.

EXECUTIVE COMPENSATION

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. The executive compensation
program is principally comprised of base 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 base salaries should be approximately equal
to the appropriate competitive norm and that short and long term incentive
compensation should reflect the performance of the Corporation and the
contributions of each executive. The process for determining each of these
elements for the Chief Executive Officer, and for the four other executive
officers (collectively, the "Senior Executive Group") who in 1993 were the
Corporation's most highly paid executives, is outlined below. For its review of
the compensation of other executive officers of the Corporation, the Committee
follows a substantially similar process.

ESTABLISHING COMPETITIVENESS

External competitiveness is an important element of ensuring that the
Corporation can continue to attract and retain highly qualified executives. The
competitiveness of the Corporation's compensation for the Chief Executive
Officer and for the Senior Executive Group is assessed with respect to
diversified industry data provided by national compensation consulting firms
through annual executive compensation surveys, and with respect to the
compensation of comparable executive officers as reported in the proxy
statements of the companies included in the Corporation's Performance Peer
Group. Comparing compensation to diversified

15
<PAGE> 19

industry surveys provides a broad-based competitive perspective, while comparing
compensation to the Corporation's Performance Peer Group helps ensure a close
relationship between executive pay and corporate performance as measured by
stockholder return.

Competitive base salaries are adjusted to reflect the size of the
Corporation. Competitive total cash compensation (the sum of base salaries and
annual cash bonuses) and competitive total compensation (the sum of base
salaries, annual cash bonuses, and the value of long term incentives) are
adjusted to reflect both the size of the Corporation and the performance of the
Corporation as measured by stockholder return over a ten year period. These
performance adjusted competitive norms for total cash compensation and total
compensation reflect what a comparably sized firm with performance equal to the
Corporation's would pay its Chief Executive Officer and its Senior Executive
Group. The performance adjusted competitive norms are developed specifically
with respect to the firms in the Corporation's Performance Peer Group.

The objectives with respect to each element of the executive compensation
package are outlined below.

BASE SALARY

Base salaries are intended to reflect the competitive norm for similar
positions in organizations of comparable sales and complexity to the
Corporation. Executive officer salaries are adjusted gradually over time and
only as necessary to meet this objective. Increases in base salary may be
further moderated by other considerations, such as the average increases awarded
to other employees of the Corporation. It is the Committee's intention, however,
that over time the base salaries for the Chief Executive Officer and for the
Senior Executive Group will approximate the competitive norm.

ANNUAL CASH BONUSES

Total cash compensation should reflect competitive norms and the
contributions of the CEO and each member of the Senior Executive Group to the
success of the Corporation. The Committee has determined that it will not pay
total cash compensation in excess of the performance adjusted competitive norms
for the CEO and for the Senior Executive Group as a whole. Therefore, the
maximum annual cash bonuses that the CEO and the Senior Executive Group as a
whole could earn are equal to the difference between their respective
performance adjusted competitive norms for total cash compensation and their
base salaries. Within this maximum, the Committee determines the actual award to
each executive on the basis of their contributions to the Corporation's success.
The Committee is under no obligation to award the maximum annual cash bonuses.

STOCK OPTIONS

The Committee believes that stock option awards to purchase shares of the
Corporation and its majority-owned subsidiaries accomplish many objectives. The
grant of options to key employees encourages equity ownership in all businesses
of the Corporation and closely aligns management interests to the interests of
all stockholders. The emphasis on stock options also results in management
compensation being closely linked to stock performance. Finally, 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 over the long-term.

The Committee generally reviews stock option awards annually. For the Chief
Executive Officer, the Committee has established a policy of determining stock
option awards with respect to the performance of the Corporation and certain
ownership objectives. In determining awards to the Senior Executive Group, the
Committee considers the average annual value of all options to purchase shares
of the Corporation and its majority-owned subsidiaries that vest over the
following five years. (Values are established in accordance with the
Black-Scholes option pricing model.) This annual value is then added to the cash
compensation for the year to determine the total compensation of the Senior
Executive Group. Similar to its stance with respect to total cash compensation,
the Committee has determined that it will not grant stock options that result in
total compensation opportunities in excess of the performance adjusted
competitive norm for the Senior Executive Group. This policy establishes the
maximum option awards. Within this maximum, the Committee determines the
specific award to each member of the Senior Executive Group on the basis of
their actual and anticipated contributions to the Corporation's success. The
Committee is under no obligation to grant the maximum option awards.

16
<PAGE> 20

The relative distribution of Corporate and majority-owned subsidiary
options awarded to an executive depends on the degree of the executive's
involvement in the management of the Corporation as compared to the management
of the majority-owned subsidiaries. For example, executive officers responsible
for the performance of a majority-owned subsidiary and executive officers
supervising the operation of that subsidiary through membership in its board of
directors are awarded a greater number of options than executive officers who
have peripheral involvement or responsibility for managing the subsidiary.

As a guideline, the Committee intends to maintain the aggregate number of
awards to all employees over a five year period below 10% of the Corporation's
outstanding common stock. Comparable guidelines apply to awards of options to
purchase stock of majority-owned subsidiaries (subject to differences in the
size of the subsidiary, the percentage of stock held by the public, its stage of
development, and the standards for awards for comparably situated companies).

STOCK RETENTION PROGRAM

The Corporation's compensation program is also designed to encourage
executives to retain stock. The Committee believes that encouraging executives
to retain stock acquired through its stock option program provides additional
incentive for executive officers to follow strategies designed to maximize
long-term value to stockholders.

There are several elements to the Corporation's stock retention program.
For example, the Committee annually awards stock options based upon an
executive's ownership of the Corporation's common stock over the prior year.
These option awards are independent of the award of stock options as an
incentive for management performance. In addition, the Committee has approved
several forms of stock option awards that contain different vesting provisions
and restrictions upon resale, which are intended to encourage executives to
follow an exercise and hold strategy. The Committee has also approved guidelines
that restrict the sale by an executive officer of a portion of the shares
acquired through stock option exercises over a five-year period.

1993 COMPENSATION

In 1993, the Corporation achieved a ten-year compounded rate of return to
stockholders of 21 percent per year, well in excess of the 15 percent return
achieved by the S&P 500 and the 11 percent return achieved by the Corporation's
Performance Peer Group. This return places the Corporation above the 95th
percentile for the Performance Peer Group. Each executive's contribution with
respect to this high level of performance was considered in determining 1993
compensation.

BASE SALARY

For the last three years, the base salaries of the Chief Executive Officer
and the Senior Executive Group have been lower than the competitive norm. The
Committee believes this lag results from a combination of the relatively rapid
growth in the Corporation's revenues, and its practice of increasing salaries
gradually and in moderation. 1993 salary increases for the Chief Executive
Officer and for the Senior Executive Group reflect this practice of gradual
increases and moderation.

ANNUAL CASH BONUSES

After determining the performance adjusted competitive norm for total cash
compensation for the Chief Executive Officer, assessing Dr. Hatsopoulos'
contributions to the Corporation's performance, and reviewing the bonuses
approved for other executives, the Committee determined that a bonus of $450,000
was appropriate. Similarly, after determining the performance adjusted
competitive norm for total cash compensation for the Senior Executive Group as a
whole, the Committee considered the contributions of each member of the Senior
Executive Group and determined bonuses accordingly. The resulting levels of
total cash compensation are substantially less than the respective performance
adjusted competitive norms for the Chief Executive Officer and the Senior
Executive Group.

STOCK OPTIONS

Dr. Hatsopoulos' leadership in conceiving, developing, and implementing the
Corporation's spin-out strategy was considered by the Committee to be a
principal element of the Corporation's outstanding performance and achievements.
For the past ten years, it has been the Committee's policy to, from time to

17
<PAGE> 21

time, award to Dr. Hatsopoulos options to purchase shares of the Corporation's
common stock, subject to vesting and restricted from sale until his retirement,
in amounts such that his ownership of the Corporation approaches five percent of
the outstanding common stock. Such awards are made only at times the Corporation
achieves a ten-year rate of return to stockholders well in excess of the returns
achieved by the S&P 500. In 1993, the Committee awarded Dr. Hatsopoulos options
to purchase a total of 430,000 shares of the Corporation's Common Stock with
exercise prices equal to the fair market value on the date of the grant. This
option award includes a grant of an option to purchase 295,000 shares of the
Corporation's Common Stock in December 1993 that will vest over a ten-year
period.

For the members of the Senior Executive Group, the Committee reviewed the
performance adjusted competitive norm for total compensation, considered the
actual and anticipated contributions of each individual, and determined option
awards accordingly. Total compensation for the Senior Executive Group is
substantially below the performance adjusted competitive norm.

In August 1992, the Committee adopted a program to award Dr. Hatsopoulos a
certain number of options to purchase shares of the Corporation's common stock
in quarterly installments over a four-year period, contingent on his continued
employment by the Corporation on the date of each grant and subject to
restrictions on transfer and repurchase by the Corporation at the exercise price
upon certain events. After careful consideration, the Committee has discontinued
this program.

Finally, the Committee is in the process of reviewing the recently
established IRS Code Section 162(m). Over the course of the coming year, the
Committee will consider the implications of this statute and will determine an
appropriate response.

Mr. Roger D. Wellington (Chairman) Dr. Elias P.
Gyftopoulos
Mr. Frank Jungers Mr. Donald E. Noble

18
<PAGE> 22

COMPARATIVE PERFORMANCE GRAPH

FIVE-YEAR PERFORMANCE GRAPH: 1988-1993

The SEC requires that the Corporation include in this Proxy Statement a
line-graph presentation comparing cumulative, five-year shareholder returns for
the Corporation's Common Stock with a broad-based market index and either a
nationally recognized industry standard or an index of peer companies selected
by the Corporation. The Corporation has compared its performance with the
Standard & Poor's 500 Index (the "S&P 500 Index") and a peer group of companies
that comprise the following Dow Jones industry groups: diversified technology,
electrical components and equipment, and industrial and commercial -- pollution
control and waste management. The companies included in these industry groups
and the Corporation's peer group are as follows -- diversified technology:
Corning Inc., EG&G, Inc., Litton Industries, Inc., Minnesota Mining &
Manufacturing Co., Perkin-Elmer Corp., Raytheon Co., Rockwell International
Corp., TRW Inc., Tektronix, Inc., Texas Instruments Incorporated, United
Technologies Corp. and Varian Associates, Inc.; electrical components and
equipment: AMP Inc., Emerson Electric Co., Grainger (W.W.), Inc., Honeywell
Inc., Hubbell Inc., Tecumseh Products Co., Thomas & Betts Corp. and Westinghouse
Electric Corp.; and industrial and commercial -- pollution control and waste
management: Browning-Ferris Industries, Inc., Chambers Development Co., Inc.
"A", Ogden Corp., Rollins Environmental Services, Inc. and Waste Management,
Inc.

[C/R/COPY]

<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) TMO S&P 500 Peer Group
<S> <C> <C> <C>
1988 100 100 100
1989 151 132 125
1990 143 128 122
1991 230 166 147
1992 233 179 155
1993 312 197 171
</TABLE>

The total return for the Corporation's Common Stock (TMO), the S&P 500 Index,
and the Corporation's Peer Group assumes the reinvestment of dividends, although
cash dividends have not been declared on the Corporation's Common Stock.

19
<PAGE> 23

TEN-YEAR PERFORMANCE GRAPH: 1983-1993

The Corporation has also elected to compare its cumulative shareholder
return since implementing its spin-out strategy in mid-1983 to the S&P 500 Index
and the Corporation's Peer Group during the last 10 years. The Corporation's
Human Resources Committee uses this information as a measure of performance in
reviewing executive compensation.

[C/R GRAPH]

<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) TMO S&P 500 Peer Group
<S> <C> <C> <C>
1983 100 100 100
1984 91 106 99
1985 137 140 125
1986 174 166 147
1987 139 175 158
1988 207 204 162
1989 313 268 205
1990 295 260 204
1991 477 339 243
1992 483 365 258
1993 646 402 286
</TABLE>

RELATIONSHIP WITH AFFILIATES

Thermo Electron has adopted a strategy of selling a minority interest
is subsidiary companies to outside investors as an important tool in its
future development. As part of this strategy, Thermo Electron has created
Thermedics Inc., Thermo Fibertek Inc., Thermo Instrument Systems Inc., Thermo
Power Corporation, Thermo Process Systems Inc. and ThermoTrex Corporation, all
of which are publicly traded, majority-owned subsidiaries of Thermo Electron.
Thermedics Inc. has created Thermo Cardiosystems Inc. as a publicly traded,
majority-owned subsidiary and has acquired the majority interest in a
previously unaffiliated company, Thermo Voltek Corp. Thermo Process Systems
Inc. has created Thermo Remediation Inc. as a publicly traded, majority-owned
subsidiary. In addition, Thermo Electron has created Thermo Energy Systems
Corporation, a privately held, majority-owned subsidiary, and other privately
held, majority-owned subsidiar-

20
<PAGE> 24

ies. ThermoTrex Corporation has created ThermoLase Inc., and Thermo Process
Systems Inc. has acquired Beheersmaatschappij J. Amerika N.V., each of which is
a privately held, majority-owned subsidiary of its respective parent. (The
subsidiaries referred to in this paragraph 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 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 roles 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 (together, the "Thermo
Group") to external financing sources, ensuring compliance with external
financial covenants and internal financial policies, assisting in the
formulation of long-range financial planning and providing other banking and
credit services. Pursuant to the Charter, Thermo Electron may also provide
guarantees of debt or other obligations of the Thermo Subsidiaries or may obtain
external financing at the parent level for the benefit of the Thermo
Subsidiaries. In certain instances, the Thermo Subsidiaries may provide credit
support to, or on behalf of, the consolidated entity or may obtain financing
directly from external financing sources. Under the Charter, Thermo Electron is
responsible for determining that the Thermo Group remains in compliance with all
covenants imposed by external financing sources, including covenants related to
borrowings of other members of the Thermo Group, and for apportioning such
constraints within the Thermo Group. In addition, Thermo Electron is also
responsible for ensuring that members comply with internal policies and
procedures. 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. A Thermo Subsidiary can
withdraw from participation in the Charter upon 30 days' prior notice. In
addition, Thermo Electron may terminate a subsidiary's participation in the
Charter in the event the subsidiary ceases to be controlled by Thermo Electron
or ceases to comply with the Charter or the policies and procedures applicable
to the Thermo Group. A withdrawal from the Charter automatically terminates the
corporate services agreement and tax allocation agreement (if any) in effect
between the withdrawing company and Thermo Electron. The withdrawal from
participation does not terminate outstanding commitments to third parties made
by the withdrawing company, or by Thermo Electron or other members of the Thermo
Group, prior to the withdrawal. However, a withdrawing company is required to
continue to comply with all policies and procedures applicable to the Thermo
Group and to provide certain administrative functions mandated by Thermo
Electron so long as the withdrawing company is controlled by or affiliated with
Thermo Electron.

In general, under the corporate services agreements between Thermo Electron
and each of the Thermo Subsidiaries, Thermo Electron's corporate staff provides
each of the Thermo Subsidiaries 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. Prior to January 1993, Thermo
Electron assessed each Thermo Subsidiary an annual fee equal to 1% of such
subsidiary's revenues for these services. Effective January 3, 1993, the fee was
increased to 1.25% of each Thermo Subsidiary's revenues. The fee assessed from
any Thermo Subsidiary may be changed by mutual agreement of Thermo Electron and
such subsidiary. For items such as employee benefit plans, insurance

21
<PAGE> 25

coverage and other identifiable costs, Thermo Electron charges each of the
Thermo Subsidiaries amounts based on charges directly attributable to the
respective subsidiary. Each corporate services agreement automatically renews
for successive one-year terms, unless canceled by the respective Thermo
Subsidiary upon 30 days' prior notice. In addition, each corporate services
agreement terminates automatically in the event that the respective Thermo
Subsidiary ceases to be a member of the Thermo Group or ceases to participate in
the Charter. In the event of a termination of a corporate services agreement,
the respective Thermo Subsidiary will be required to pay a termination fee equal
to the fee that was paid by such subsidiary for services under such corporate
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 respective Thermo Subsidiary or as required in order
to meet such subsidiary's obligations under Thermo Electron's policies and
procedures. Thermo Electron will charge a Thermo Subsidiary a fee equal to the
market rate for comparable services if such services are provided to such a
subsidiary following termination.

-- PROPOSAL 2 --

INCREASE OF AUTHORIZED COMMON STOCK

The Board of Directors has determined that it is advisable to increase the
Corporation's authorized Common Stock from 100,000,000 shares to 175,000,000
shares, and has voted to recommend that the Stockholders adopt an amendment to
the Corporation's Restated Certificate of Incorporation effecting the proposed
increase.

At last year's Annual Meeting, the Stockholders approved the first increase
in the authorized shares of Common Stock since 1986, increasing the authorized
shares from 50 million to 100 million. In October 1993, the Corporation effected
a three-for-two stock split, using a substantial portion of the newly authorized
shares in payment of the split and to increase shares reserved for issuance for
existing convertible securities and stock-based compensation plans. As of
January 2, 1994, 49,950,580 shares of Common Stock were outstanding and an
additional 26,732,077 shares were reserved for issuance upon the conversion of
existing securities and the exercise of options granted under the Corporation's
various stock option, stock purchase and other benefit plans. Accordingly, a
total of 25,317,343 shares of Common Stock are available for future issuance.

The Board of Directors believes it to be in the best interests of the
Corporation to authorize additional shares of Common Stock in order to provide
flexibility for corporate action in the future. A significant use of authorized
shares of Common Stock in the past has been in connection with stock splits
effected in the form of stock dividends, and a portion of the additional
authorized shares of Common Stock may be used for future splits under
appropriate circumstances. The Board of Directors further believes that the
availability of additional authorized shares for issuance from time to time in
the Board's discretion in connection with possible future financings, investment
opportunities, acquisitions of other companies or for other corporate purposes
is desirable in order to avoid repeated separate amendments to the Corporation's
Restated Certificate of Incorporation and the delay and expense incurred in
holding special meetings of the Stockholders to approve such amendments.

The proposed increase in the number of authorized shares of Common Stock
could be considered to be "anti-takeover" in nature if unreserved shares were
issued under circumstances intended to discourage or make more difficult an
attempt by a person or organization to gain control of the Corporation. The
Board of Directors does not, however, view the proposed increase as part of an
"anti-takeover" strategy and does not presently intend to propose at future
meetings of the Stockholders other measures that could be considered
"anti-takeover" in nature. The Corporation's management has no knowledge of any
specific effort by any identified persons or organizations to accumulate the
Corporation's shares or otherwise gain control of the Corporation.

For a number of years, the Corporation has had certain provisions in its
Restated Certificate of Incorporation and By-laws that may be regarded as
"anti-takeover," including provisions for the classified Board of Directors
described under the heading "Election of Directors," a "fair price" provision
requiring that

22
<PAGE> 26

a hostile tender offeror offer to purchase remaining shares of Common Stock at
the tender offer price, and a provision requiring that certain business
combinations between the Corporation and an "interested" Stockholder be approved
by 85% of the Common Stock held by persons unaffiliated with the "interested"
Stockholder. The Corporation has also adopted a stockholder rights plan which
provides generally that, upon the occurrence of certain events, each Stockholder
will have the right to purchase, at a discount, additional shares of the
Corporation's Common Stock or, in certain cases, shares of the common stock of a
corporation seeking to acquire the Corporation.

No further authorization by vote of the Stockholders will be solicited for
the issuance of the additional shares of Common Stock proposed to be authorized,
except as might be required by law, regulatory authorities or rules of the New
York Stock Exchange or any stock exchange on which the Corporation's shares may
then be listed. The Stockholders of the Corporation do not have any preemptive
right to purchase or subscribe for any part of any new or additional issuance of
the Corporation's securities.
- --------------------------------------------------------------------------------
The Board of Directors considers this amendment to be advisable and in the
best interests of the Corporation and its Stockholders and recommends that you
vote FOR approval of the amendment. If not otherwise specified, Proxies will be
voted FOR approval of this amendment.
- --------------------------------------------------------------------------------

-- PROPOSAL 3 --

PROPOSAL TO ADOPT AMENDMENTS TO THE CORPORATION'S
EQUITY INCENTIVE PLAN

The Board of Directors has approved two amendments to the Corporation's
Equity Incentive Plan (the "Equity Incentive Plan" or the "Plan") and is
recommending the amendments to Stockholders for their approval. The first
amendment would increase the number of shares available for issuance under the
Plan by 2,000,000 shares. If approved by the Stockholders, the number of shares
available for issuance as of January 2, 1994 under the Equity Incentive Plan
would be increased from 5,053 to 2,005,053 shares. The second amendment would
limit the size of grants in any calendar year to a recipient in compliance with
Section 162(m) of the Internal Revenue Code.

REASON FOR THE AMENDMENTS

The Stockholders originally approved the Equity Incentive Plan, and
reserved 2,700,000 shares for issuance thereunder, at the 1989 Annual Meeting of
Stockholders. As of January 2, 1994, options to purchase 2,926,376 shares of
Common Stock were outstanding under the Corporation's stock-based compensation
plans, consisting of the Equity Incentive Plan, Nonqualified Stock Option Plan
and Incentive Stock Option Plan, and 765,273 shares of Common Stock had lapsed.
Before giving effect to the proposed increase recommended for approval at this
Meeting, options to purchase 6,053 shares of Common Stock were reserved and
available for grant under such stock option plans.

The Board of Directors believes that the shares currently available for
grant under the Corporation's employee stock option plans are not sufficient for
the Corporation's stock option program. The Corporation's stock option program
is the principal incentive tool used to motivate key employees to create
long-term value for Stockholders, and such programs have been an integral
element of the Corporation's spin-out strategy. Providing key employees with an
opportunity to participate in the increase in stock value not only encourages
equity ownership by management, but also more closely aligns management
interests with the interests of all Stockholders. Accordingly, the Board of
Directors has approved, subject to Stockholder approval, the proposed increase
of 2,000,000 shares in shares available under the Equity Incentive Plan, which
represents less than 4.0% of the Corporation's currently outstanding shares of
Common Stock.

In order to maintain the exemption available to the Equity Incentive Plan
under Section 162(m) of the Internal Revenue Code, the Board of Directors has
amended the plan, subject to Stockholder approval, to impose a limitation on the
potential size of awards. No award or combination of awards in a calendar year
may

23
<PAGE> 27

exceed 1% of the outstanding shares of Common Stock (calculated as of the
beginning of the calendar year) to any recipient.

SUMMARY OF THE EQUITY INCENTIVE PLAN

The material terms of the Equity Incentive Plan are described below.

ADMINISTRATION; ELIGIBLE PARTICIPANTS

The Equity Incentive Plan is administered by the Board of Directors of the
Corporation (the "Board"). The Board has full power to select, from among the
persons eligible for awards, the individuals to whom awards will be granted, to
make any combination of awards to any participant, and to determine the specific
terms of each award, including terms and conditions relating to events of
merger, consolidation, dissolution and liquidation, change of control,
acceleration of vesting or lapse of restrictions, vesting, forfeiture,
restrictions, dividends and interest on deferred amounts. The Board also has the
power to waive compliance by participants with the terms and conditions of
awards, to cancel awards with the consent of participants, to grant replacement
awards and to accelerate the vesting or lapse of any restrictions of any award.
The Board may delegate any or all of its responsibilities under the Equity
Incentive Plan to a committee appointed by the Board consisting of three or more
"disinterested persons" within the meaning of Rule 16b-3 (or any successor rule)
under the Securities Exchange Act of 1934 (the "Exchange Act"). As to
participants who are not reporting persons subject to Section 16 of the Exchange
Act, the Board may delegate any or all of its responsibilities to the
Corporation's Operating Committee or other appropriate officers of the
Corporation.

Employees and Directors of, and consultants to, the Corporation and its
subsidiaries, or other persons who are responsible for or contribute to the
management, growth or profitability of the business of the Corporation and its
subsidiaries, selected by the Board, are eligible to participate in the Equity
Incentive Plan.

SHARES SUBJECT TO THE EQUITY INCENTIVE PLAN; USE OF PROCEEDS

The number of shares of Common Stock that are currently reserved for
issuance under the Equity Incentive Plan, before giving effect to the proposed
increase, is 5,053 shares, subject to adjustment for stock splits and similar
events. Awards and shares that are forfeited, reacquired by the Corporation,
satisfied by a cash payment by the Corporation or otherwise satisfied without
the issuance of Common Stock are not counted against the maximum number of
reserved shares under the Plan.

The proceeds received by the Corporation from transactions under the Equity
Incentive Plan will be used for the general purposes of the Corporation. Shares
issued under the Equity Incentive Plan may be authorized but unissued shares or
shares reacquired by the Corporation and held in its treasury.

TYPES OF AWARDS; LIMITATION ON AWARDS

The Equity Incentive Plan permits the Board to grant a variety of stock and
stock-based awards in such form or in such combinations as may be approved by
the Board. Without limiting the foregoing, the types of awards may include stock
options, restricted and unrestricted shares, rights to receive cash or shares on
a deferred basis or based on performance, cash payments sufficient to offset the
Federal ordinary income taxes of participants resulting from transactions under
the Equity Incentive Plan, and loans to participants in connection with awards.
In addition, if approved by the Stockholders at this meeting, the Board may not
grant in excess of 1% of the outstanding shares of Common Stock (calculated as
of the beginning of a calendar year) to any recipient under any award or
combination of awards granted during a calendar year.

STOCK OPTIONS. Awards under the Equity Incentive Plan may be in the form
of stock options, which entitle the recipient on exercise to purchase shares of
Common Stock at a specified exercise price. Stock options granted under the Plan
may be either stock options that qualify as incentive stock options ("incentive
stock options") under Section 422 of the Internal Revenue Code of 1986 (the
"Internal Revenue Code") or stock options that are not intended to meet such
requirements ("nonstatutory options"). The exercise price of each option is
determined by the Board but may not be less than the par value per share of
Common Stock.

24
<PAGE> 28

The term of each option will be fixed by the Board. The Board also will
determine at what time each option may be exercised. Options may be made
exercisable in installments, and the exercisability of options may be
accelerated by the Board. The Board may in its discretion provide that upon
exercise of an option, instead of receiving shares free from restrictions under
the Equity Incentive Plan, the option holder will receive shares of restricted
stock or deferred stock awards.

The exercise price of options granted under the Equity Incentive Plan must
be paid in full by check or other instrument acceptable to the Board or, if the
Board so determines, by delivery of shares of Common Stock held by the option
holder for at least six months (unless the Board expressly approves a shorter
period) and that have a fair market value on the exercise date equal to the
exercise price of the option, by delivery of a promissory note from the option
holder to the Corporation payable on terms acceptable to the Board, by delivery
of an unconditional and irrevocable undertaking by a broker to deliver
sufficient funds to the Corporation to pay the exercise price, or some
combination of these methods.

Incentive stock options must meet certain additional requirements in order
to qualify as incentive stock options under the Internal Revenue Code. Incentive
stock options may be granted only to employees of the Corporation and its
subsidiaries. The exercise price of an incentive stock option may not be less
than 100% of the fair market value of the shares on the date of grant. An
incentive stock option may not be granted after the tenth anniversary of the
date the Board adopted the Equity Incentive Plan and the latest date on which an
incentive stock option may be exercised is ten years from the date of grant. In
addition, the Internal Revenue Code limits the value of shares subject to
incentive stock options that may become exercisable annually by any option
holder in a given year to $100,000 and imposes a shorter exercise period and a
higher minimum exercise price in the case of Stockholders owning more than ten
percent of the Corporation's Common Stock.

RESTRICTED STOCK AND UNRESTRICTED STOCK. The Board may also award shares
of Common Stock subject to such conditions and restrictions as it may determine
("restricted stock"). The purchase price of shares of restricted stock shall be
determined by the Board, but may not be less than the par value of those shares.

Generally, if a participant who holds shares of restricted stock fails to
satisfy such restrictions or other conditions as may be determined by the Board
(such as continuing employment for a given period) prior to the lapse or waiver
of the restrictions, the Corporation will have the right to require the
forfeiture or repurchase of the shares in exchange for an amount, if any,
determined by the Board and specifically set forth in the instrument evidencing
the award. The Board may at any time waive such restrictions or accelerate the
date or dates on which the restrictions will lapse. Prior to the lapse of
restrictions on shares of restricted stock, the recipient will have all rights
of a Stockholder with respect to the shares, including voting and dividend
rights, subject only to the conditions and restrictions generally applicable to
restricted stock or specifically set forth in the instrument evidencing the
award.

The Board may also grant shares which are free from any restrictions under
the Equity Incentive Plan ("unrestricted stock"). Unrestricted stock may be
issued in recognition of past services or in such other circumstances the Board
deems to be in the best interests of the Corporation.

DEFERRED STOCK. The Board may also make deferred stock awards under the
Equity Incentive Plan which entitle the recipient to receive shares of Common
Stock in the future. Delivery of Common Stock will take place on such date or
dates and on such conditions as the Board specifies. The Board may at any time
accelerate the date on which delivery of all or any part of the Common Stock
will take place or otherwise waive any restrictions on the award.

PERFORMANCE AWARDS. The Board may also grant performance awards entitling
the recipient to receive shares of Common Stock or cash in such combinations as
it may determine following the achievement of specified performance goals.
Payment of the performance award may be conditioned on achievement of individual
or Corporation performance goals over a fixed or determinable period or on such
other conditions as the Board shall determine.

LOANS AND SUPPLEMENTAL GRANTS. The Board may authorize a loan from the
Corporation to a participant either on or after the grant of an award to the
participant. Loans, including extensions, may be for any term specified by the
Board, may be either secured or unsecured, and may be with or without recourse
against the

25
<PAGE> 29

participant in the event of a default. Each loan shall be subject to such terms
and conditions and shall bear such rate of interest, if any, as the Board shall
determine. In connection with any award, the Board may, at the time such award
is made or at a later date, provide for and make a cash payment to the
participant in an amount equal to (a) the amount of any Federal, state and local
income tax on ordinary income for which the participant will be liable with
respect to the award, plus (b) an additional amount on a grossed-up basis
necessary to make him or her whole after tax.

PAYMENT OF PURCHASE PRICE

Except as otherwise provided in the Equity Incentive Plan, the purchase
price of Common Stock or other rights acquired or granted pursuant to the Plan
shall be determined by the Board, provided that the purchase price of Common
Stock shall not be less than its par value. The Board may determine the method
of payment for Common Stock acquired pursuant to the Equity Incentive Plan and
may determine that all or any part of the purchase price has been satisfied by
past services rendered by the recipient of an award. The Board may, upon the
request of a participant, defer the date on which payment under any award will
be made.

CHANGE IN CONTROL PROVISIONS

Unless otherwise provided in the agreement evidencing an award, if there is
a "Change in Control" of the Corporation as defined in the Equity Incentive
Plan, any stock options that are not then exercisable and fully vested will
become fully exercisable and vested; the restrictions applicable to restricted
stock awards will lapse and shares issued pursuant to such awards will be free
of restrictions and fully vested; and deferral limitations and conditions that
related solely to the passage of time or continued employment or other
affiliation will be waived and removed but other conditions will continue to
apply unless otherwise provided in the instrument evidencing the awards or by
agreement between the participant and the Corporation. Generally, a "Change in
Control" occurs if (1) any person becomes the beneficial owner of 25% or more of
the outstanding Common Stock of the Corporation, without the prior approval of
the Board, (2) during any two-year period the individuals who comprised the
Board at the beginning of such period no longer represent a majority of the
Board, or (3) the Board determines that any other event constitutes an effective
change in control of the Corporation.

NATURE OF RIGHTS AS STOCKHOLDERS UNDER THE EQUITY INCENTIVE PLAN

Except as specifically provided by the Equity Incentive Plan, the receipt
of an award will not give a participant rights as a Stockholder. The participant
will obtain such rights, subject to any limitations imposed by the Plan or the
instrument evidencing the award, upon actual receipt of Common Stock.

ADJUSTMENTS FOR STOCK DIVIDENDS, ETC.

The Board will make appropriate adjustments to the maximum number of shares
of Common Stock that may be delivered under the Equity Incentive Plan, and to
outstanding awards, to reflect stock dividends, stock splits, and similar
events. The Board may also make appropriate adjustments to avoid distortions in
the operation of the Equity Incentive Plan.

AMENDMENT AND TERMINATION

The Equity Incentive Plan shall remain in full force and effect until
terminated by the Board. The Board may at any time or times amend the Equity
Incentive Plan or any outstanding award for any purpose which may at the time be
permitted by law, or may at any time terminate the Plan as to any further grants
of awards. No amendment of the Equity Incentive Plan or any outstanding award
may adversely affect the rights of a participant as to any previously granted
award without his or her consent. Stockholder approval of amendments shall be
required only as is necessary to satisfy the then-applicable requirements of
Rule 16b-3 (or any successor rule) under the Exchange Act or any Federal tax law
or regulation relating to incentive stock options.

26
<PAGE> 30

STOCK WITHHOLDING

In the case of an award under which Common Stock may be delivered, the
Board may permit the participant or other appropriate person to elect to have
the Corporation hold back from the shares to be delivered, or to deliver to the
Corporation, shares of Common Stock having a value sufficient to satisfy any
Federal, state and local withholding tax requirements.

FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of the principal current Federal income tax
consequences of transactions under the Equity Incentive Plan. It does not
describe all Federal tax consequences under the Equity Incentive Plan, nor does
it describe state, local or foreign tax consequences.

INCENTIVE STOCK OPTIONS. No taxable income is realized by the optionee
upon the grant or exercise of an incentive stock option. However, the exercise
of an incentive stock option may result in alternative minimum tax liability for
the optionee. If no disposition of shares issued to an optionee pursuant to the
exercise of an incentive stock option is made by the optionee within two years
from the date of grant or within one year after the transfer of such shares to
the optionee, then upon sale of such shares, any amount realized in excess of
the exercise price will be taxed to the optionee as a long-term capital gain and
any loss sustained will be a long-term capital loss, and no deduction will be
allowed to the Corporation for Federal income tax purposes.

If the shares of Common Stock acquired upon the exercise of an incentive
stock option are disposed of prior to the expiration of the two-year and
one-year holding periods described above (a "disqualifying disposition"),
generally the optionee will realize ordinary income in the year of disposition
in an amount equal to the excess (if any) of the fair market value of the shares
at exercise (or, if less, the amount realized on an arms-length sale of such
shares) over the exercise price thereof, and the Corporation will be entitled to
deduct such amount. Any further gain realized will be taxed as short-term or
long-term capital gain and will not result in any deduction by the Corporation.
Special rules may apply where the optionee is subject to Section 16(b) of the
Exchange Act or where all or a portion of the exercise price of the incentive
stock option is paid by tendering shares of Common Stock.

If an incentive stock option is exercised at a time when it no longer
qualifies for the tax treatment described above, the option is treated as a
non-statutory stock option. Generally, an incentive stock option will not be
eligible for the tax treatment described above if it is exercised more than
three months following termination of employment (one year following termination
of employment by reason of permanent and total disability), except in certain
cases where the incentive stock option is exercised after the death of an
optionee.

NON-STATUTORY OPTIONS. With respect to non-statutory stock options granted
under the Equity Incentive Plan, no income is realized by the optionee at the
time the option is granted. Generally, at exercise, ordinary income is realized
by the optionee in an amount equal to the difference between the option price
and the fair market value of the shares on the date of exercise, and the
Corporation receives a tax deduction for the same amount, and at disposition,
appreciation or depreciation after the date of exercise is treated as either
short-term or long-term capital gain or loss depending on how long the shares
have been held. Special rules may apply where the optionee is subject to Section
16(b) of the Exchange Act.

RESTRICTED STOCK. A recipient of restricted stock generally will be
subject to tax at ordinary income rates on the fair market value of the stock at
the time the stock is either transferable or is no longer subject to forfeiture,
minus any amount paid for such stock. However, a recipient who so elects under
Section 83(b) of the Internal Revenue Code within 30 days of the date of
issuance of the restricted stock will realize ordinary income on the date of
issuance equal to the fair market value of the shares of restricted stock at
that time (measured as if the shares were unrestricted and could be sold
immediately), minus any amount paid for such stock. If the shares subject to
such election are forfeited, the recipient will not be entitled to any
deduction, refund or loss for tax purposes with respect to the forfeited shares.
Upon sale of the shares after the forfeiture period has expired, the
appreciation or depreciation since the shares became transferable or free from
risk of forfeiture (or, if a Section 83(b) election was made, since the shares
were issued) will be treated as long-term or short-term capital gain or loss.
The holding period to determine whether the recipient has long-term or
short-term capital gain or loss begins when the restriction period expires (or
upon earlier issuance of the

27
<PAGE> 31

shares, if the recipient elected immediate recognition of income under Section
83(b)). If restricted stock is received in connection with another award under
the Equity Incentive Plan (for example, upon exercise of an option), the income
and the deduction, if any, associated with such award may be deferred in
accordance with the rules described above for restricted stock.

DEFERRED STOCK. The recipient of a deferred stock award will generally be
subject to tax at ordinary income rates on the fair market value of the stock on
the date that the stock is distributed to the participant. The capital gain or
loss holding period for such stock will also commence on such date. The
Corporation generally will be entitled to a deduction equal to the amount that
is taxable as ordinary income to the employee. If a right to deferred stock is
received under another award (for example, upon exercise of an option), the
income and the deduction, if any, associated with such award may be deferred in
accordance with the rules described above for deferred stock.

PERFORMANCE AWARDS. The recipient of a performance award will generally be
subject to tax at ordinary income rates on any cash received and the fair market
value of any Common Stock issued under the award, and the Corporation will
generally be entitled to a deduction equal to the amount of ordinary income
realized by the recipient. Any cash received under a performance award will be
included in income at the time of receipt. The fair market value of any Common
Stock received will also generally be included in income (and a corresponding
deduction will generally be available to the Corporation) at the time of
receipt. The capital gain or loss holding period for any Common Stock
distributed under a performance award will begin when the recipient recognizes
ordinary income in respect of that distribution.

LOANS AND SUPPLEMENTAL GRANTS. Generally speaking, bona fide loans made
under the Equity Incentive Plan will not result in taxable income to the
recipient or in a deduction to the Corporation. However, any such loan made at a
rate of interest lower than certain rates specified under the Internal Revenue
Code may result in an amount (measured, in general, by reference to the
difference between the actual rate and the specified rate) being included in the
borrower's income and deductible by the Corporation. Forgiveness of all or a
portion of a loan will also result in income to the borrower and a deduction for
the Corporation. If outright cash grants are given in order to facilitate the
payment of award-related taxes, the grants will be includable as ordinary income
by the recipient at the time of receipt and will in general be deductible by the
Corporation.

NEW PLAN BENEFITS

As of April 2, 1994, no options have been granted under the Equity
Incentive Plan with respect to the proposed increase in shares available for
issuance.
- --------------------------------------------------------------------------------

The affirmative vote of a majority of the Common Stock present at the
Meeting and entitled to vote as of the record date is required to approve the
increase in the number of shares available for issuance under the Corporation's
Equity Incentive Plan. The Board of Directors considers this proposal to be
advisable and in the best interests of the Corporation and its Stockholders and
recommends that you vote FOR approval of the proposal. 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 & Co. as independent
public accountants for fiscal 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. Arthur Andersen &
Co. has acted as independent public accountants for the Corporation since 1960.

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.

28
<PAGE> 32

STOCKHOLDER PROPOSALS

Proposals of Stockholders intended to be presented at the 1995 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 , 1994.

SOLICITATION STATEMENT

The cost of this solicitation of Proxies will be borne by the Corporation.
Solicitation will be made primarily by mail, but regular employees of the
Corporation may solicit Proxies personally, by telephone or telegram. Brokers,
nominees, custodians and fiduciaries are requested to forward solicitation
materials to obtain voting instructions from beneficial owners of stock
registered in their names, and the Corporation will reimburse such parties for
their reasonable charges and expenses in connection therewith. In addition, the
Corporation has retained D. F. King & Co., Inc. to assist in the solicitation of
proxies at a cost not to exceed $8,000, plus out-of-pocket expenses.

Waltham, Massachusetts
April , 1994

29
<PAGE> 33

THERMO ELECTRON CORPORATION

P 81 WYMAN STREET * POST OFFICE BOX 9046 * WALTHAM, MASSACHUSETTS 02254

R THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

O
The undersigned hereby appoints George N. Hatsopoulos, John N. Hatsopoulos
X and Theo Melas-Kyriazi, and each of the them, proxies of the undersigned,
each with power to appoint his substitute, and hereby authorizes them to
Y represent and to vote, as designated below, all the shares of common stock
of Thermo Electron Corporation held of record by the undersigned on March
28, 1994 at the Annual Meeting of the Stockholders to be held at the Hyatt
Regency Hotel, Hilton Head, South Carolina, on Tuesday, May 24, 1994 at 5:30
p.m., and at any postponement or adjournment thereof, as set forth on the
reverse side hereof, and in their discretion upon any other business that may
properly come before the meeting.

The Proxy will be voted as specified, or if no choice is specified, FOR
the election of the nominees named, FOR proposals 2 and 3 and as said proxies
deem advisable on such other matters as may properly come before the meeting.

-----------
SEE REVERSE
(IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE) SIDE
-----------

/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE

<TABLE>

The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
<S> <C> <C> <C> <C>
1. Election of Directors 2. Approve an amendment
NOMINEES: John M. Albertine, to the Restated Certifi- FOR AGAINST ABSTAIN
Peter O. Crisp and cate of Incorporation to / / / / / /
Roger D. Wellington increase the Corporation's
authorized voting stock
FOR / / WITHHELD / / from 100,000,000 to
all from all 175,000,000 shares.
nominees nominees
For, except vote witheld from the following nominee(s). 3. Approve amendments to the FOR AGAINST ABSTAIN
Corporation's Equity / / / / / /
/ /_________________________________________________ Incentive Plan.

MARK HERE
FOR ADDRESS / /
CHANGE AND
NOTE CHANGE
AT LEFT

(This Proxy should be dated, signed by the shareholder(s) exactly Signature: _________________________________ Date __________
as his or her name appears hereon, and returned promptly in the Signature: _________________________________ Date __________
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.)
</TABLE>