<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Thermo Electron Corporation
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Thermo Electron Corporation
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF THERMO ELECTRON APPEARS HERE]
81 Wyman Street
P.O. Box 9046
Waltham, MA 02554-9046
April 26, 1995
Dear Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
of Thermo Electron Corporation. Your Board of Directors and management look
forward to greeting personally those stockholders able to attend.
Our Annual Report for the year ended December 31, 1994, is enclosed. I hope
you will read it carefully. Please feel free to forward any questions you may
have if you are unable to attend the meeting.
At the Meeting, in addition to electing a class of four directors, your Board
of Directors is asking Stockholders to approve amendments to the Corporation's
Directors Stock Option Plan to change the formula for the award of stock
options to purchase common stock of the Corporation's majority-owned
subsidiaries to its outside Directors. This proposal is described more fully in
the accompanying proxy statement which you are urged to read thoroughly.
For the reasons set forth in the proxy statement, your Board of Directors
recommends a vote "FOR" the proposal.
It is important that your shares are represented and voted at the Meeting
whether or not you plan to attend. Accordingly, you are requested to sign, date
and mail the enclosed proxy in the envelope provided, at your earliest
convenience.
Yours very truly,
[Paste up sig]
George N. Hatsopoulos
Chairman and President
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD.
<PAGE>
[LOGO OF THERMO ELECTRON APPEARS HERE]
81 Wyman Street
P.O. Box 9046
Waltham, MA 02554-9046
April 26, 1995
To the Holders of the Common Stock of
THERMO ELECTRON CORPORATION
NOTICE OF ANNUAL MEETING
The 1995 Annual Meeting of the Stockholders of Thermo Electron Corporation
("Thermo Electron" or the "Corporation") will be held on Tuesday, May 23, 1995,
at 5:00 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 four Directors, comprising the class of directors to be
elected for a three-year term expiring in 1998.
2. A proposal recommended by the Board of Directors to amend the
Corporation's Directors Stock Option Plan to change the formula for
the award to outside Directors of stock options to purchase common
stock of the Corporation's majority-owned subsidiaries.
3. Such other business as may properly be brought before the Meeting and
any adjournment thereof.
The transfer books of the Corporation will not be closed prior to the
Meeting, but, pursuant to appropriate action by the Board of Directors, the
record date for the determination of the Stockholders entitled to notice of and
to vote at the Meeting is April 6, 1995.
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. Enclosed is a Proxy authorizing three officers
of the Corporation to vote your shares as you instruct. Whether or not you are
able to be present in person, please sign the enclosed Proxy and return it
promptly to our transfer agent, Bank of Boston, in the accompanying envelope,
which requires no postage if mailed in the United States.
This Notice, the Proxy and Proxy Statement enclosed herewith are sent to you
by order of the Board of Directors.
Sandra L. Lambert
Secretary
<PAGE>
PROXY STATEMENT
The enclosed Proxy is solicited by the Board of Directors of Thermo Electron
Corporation ("Thermo Electron" or the "Corporation") for use at the 1995 Annual
Meeting of the Stockholders (the "Meeting") to be held on Tuesday, May 23,
1995, at 5:00 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 28, 1995.
VOTING PROCEDURES
The Board of Directors intends to present to the Meeting the election of four
Directors, comprising the class of Directors to be elected for a three-year
term expiring in 1998, as well as one other matter: a proposal to amend the
Directors Stock Option Plan to change the formula for the award to outside
Directors of stock options to purchase common stock of the Corporation's
majority-owned subsidiaries.
The representation in person or by proxy of a majority of the outstanding
shares of common stock of the Corporation, $1.00 par value ("Common Stock"),
entitled to vote at the Meeting is necessary to provide a quorum for the
transaction of business at the Meeting. Shares can only be voted if the
Stockholder is present in person or is represented by returning a properly
signed proxy. Each Stockholder's vote is very important. Whether or not you
plan to attend the Meeting in person, please sign and promptly return the
enclosed proxy card, which requires no postage if mailed in the United States.
All signed and returned proxies will be counted towards establishing a quorum
for the Meeting, regardless of how the shares are voted. An abstention or
withholding authority to vote will be counted as present for determining
whether the quorum requirement is satisfied.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on the
proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted for the management nominees for Directors,
for the management proposal, and as the individuals named as proxy holders on
the proxy deem advisable on all other matters as may properly come before the
Meeting.
A plurality of the votes of the shares present and entitled to vote is
required to approve the election of Directors. For the proposal to amend the
Corporation's Directors Stock Option Plan, the affirmative vote of a majority
of shares present in person or represented by proxy, and entitled to vote on
the matter, is necessary for approval. Withholding authority to vote for a
nominee for Director or an instruction to abstain from voting on a proposal
will be treated as shares present and entitled to vote and, for purposes of
determining the outcome of the vote, will have the same effect as a vote
against the nominee or a proposal. Broker "non-votes" will not be treated as
shares present and entitled to vote on a voting matter and will have no effect
on the outcome of the vote. A broker "non-vote" occurs when a nominee holding
shares for a beneficial holder does not have discretionary voting power and
does not receive voting instructions from the beneficial owner.
A Stockholder who returns a proxy may revoke it at any time before the
Stockholder's shares are voted at the Meeting by written notice to the
Secretary of the Corporation received prior to the Meeting, by executing and
returning a later-dated proxy or by voting by ballot at the Meeting.
The outstanding stock of the Corporation entitled to vote (excluding shares
held in treasury by the Corporation) as of April 6, 1995, consisted of
54,682,395 shares of Common Stock. Only Stockholders of record at the close of
business on April 6, 1995, are entitled to vote at the Meeting. Each share is
entitled to one vote.
<PAGE>
--PROPOSAL 1--
ELECTION OF DIRECTORS
Four Directors are to be elected at the Meeting, and Dr. Elias P.
Gyftopoulos, Mr. Frank Jungers, Dr. Frank E. Morris and Mr. Donald E. Noble are
listed below as nominees for the three-year term expiring at the 1998 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 and the names of other public
companies in which such persons hold directorships. Information regarding their
beneficial ownership of the Corporation's Common Stock and of the common stock
of certain subsidiaries of the Corporation is reported under the caption "Stock
Ownership." All of the nominees are currently Directors of the Corporation.
- --------------------------------------------------------------------------------
NOMINEES FOR DIRECTOR WHOSE TERM OF OFFICE WILL EXPIRE IN 1998
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
Elias P. Gyftopoulos Dr. Gyftopoulos, 67, has been a Director of the
Corporation since 1976. Dr. Gyftopoulos has been the
Ford Professor of Mechanical Engineering and of
Nuclear Engineering at the Massachusetts Institute of
Technology for more than five years. Dr. Gyftopoulos
is also a director of Thermo Cardiosystems Inc.,
ThermoLase Corporation, Thermo Instrument Systems
Inc., Thermo Remediation Inc. and Thermo Voltek Corp.
- --------------------------------------------------------------------------------
Frank Jungers Mr. Jungers, 68, 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, Pacific
Rehabilitation and Sports Medicine, Inc., Star
Technologies Inc, Thermo Ecotek Corporation and Thermo
Instrument Systems Inc.
- --------------------------------------------------------------------------------
Frank E. Morris Dr. Morris, 71, has been a Director of the Corporation
since 1989. Dr. Morris served as the Peter Drucker
Professor of Management at Boston College from 1989 to
1994. Dr. Morris also 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, 80, has been a Director of the Corporation
since 1983. For more than 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.
</TABLE>
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
INCUMBENT DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 1997
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
John M. Albertine Dr. Albertine, 50, 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. He also
serves as Chairman of The Jian Group Holdings, a
full-service mergers and acquisitions firm. 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
March 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, 62, has been a Director of the Corporation
since 1974. Mr. Crisp has been a General Partner of
Venrock Associates, a venture capital investment
firm, for more than five years. Mr. Crisp is also a
Director of 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, 68, has been a Director of the
Corporation since 1986. Mr. Wellington serves as the
President and Chief Executive Officer of Wellington
Consultants, Inc. and of Wellington Associates,
international business consulting firms he founded in
1994 and 1989, respectively. Prior to 1989, Mr.
Wellington served as Chairman of the Board of Augat
Inc., a manufacturer of electromechanical components,
for more than five years. 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.
- --------------------------------------------------------------------------------
INCUMBENT DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 1996
- --------------------------------------------------------------------------------
George N. Hatsopoulos Dr. Hatsopoulos, 68, 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 Ecotek Corporation, Thermo
Fibertek Inc., Thermo Instrument Systems Inc., Thermo
Power Corporation, Thermo Process Systems Inc. and
ThermoTrex Corporation. Dr. Hatsopoulos is the
brother of John N. Hatsopoulos, an Executive Vice
President and the Chief Financial Officer of the
Corporation.
</TABLE>
- --------------------------------------------------------------------------------
3
<PAGE>
<TABLE>
<C> <S>
Robert A. McCabe Mr. McCabe, 60, 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 Lehman Brothers
Inc., an investment banking firm. Mr. McCabe is also a
director of Borg-Warner Security Corporation, Church &
Dwight Company, Morrison-Knudsen 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
Olayan America Corporation since 1995 and Competrol Real
Estate Limited since 1986, members of the Olayan Group
engaged in advisory services and private real estate
investments, respectively. Ms. Olayan also served as
President and a director of Crescent Diversified Limited,
another member of the Olayan Group engaged in private
investments, from 1985 until 1994.
</TABLE>
- --------------------------------------------------------------------------------
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
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
outside 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
outside 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 plans. The Corporation does not have a nominating
committee of the Board of Directors. The Board of Directors met 14 times, the
Audit Committee met twice and the Human Resources Committee met eight times
during fiscal 1994. Each Director attended at least 75% of all meetings of the
Board of Directors and Committees on which he or she served held during his or
her tenure.
COMPENSATION OF DIRECTORS
Effective January 1, 1995, Directors who are not employees of the Corporation
or any companies affiliated with Thermo Electron receive an annual retainer of
$20,000 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 Board of
Directors, and $500 per day for participating in meetings of the Board of
Directors or such committees held by means of conference telephone. Prior to
January 1, 1995, the annual retainer paid to outside Directors was $10,000.
Directors are also reimbursed for out-of-pocket expenses and in some instances
for travel time incurred in attending such meetings. 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 service as Director other than his salary.
Under the Corporation's Deferred Compensation Plan for Directors (the
"Deferred Compensation Plan"), a Director has the right to defer receipt of his
cash fees until he ceases to serve as a Director, dies or retires from his
principal occupation. In the event of a change in control or proposed change in
control of the Corporation that is not approved by the Board of Directors,
deferred amounts become payable immediately. Either of the following is deemed
to be a change of control: (a) the occurrence, without the prior approval of
the Board of Directors, of the acquisition, directly or indirectly, by any
person of 50% or more of the
4
<PAGE>
outstanding Common Stock; or (b) the failure of the persons serving on the
Board of Directors immediately prior to any contested election of directors or
any exchange offer or tender offer for the Common Stock to constitute a
majority of the Board of Directors at any time within two years following any
such event. Amounts deferred pursuant to the Deferred Compensation Plan are
valued 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 has
been reserved for issuance under the Deferred Compensation Plan. As of January
28, 1995, deferred units equal to 129,610.96 shares of Common Stock were
accumulated under the Deferred Compensation Plan.
In 1993, the Corporation adopted a directors stock option plan (the
"Directors Plan"). The Directors Plan provides for the annual grant of stock
options to purchase shares of Common Stock (and for grants over a ten-year
period of stock options to purchase shares of the common stock of publicly
traded, majority-owned subsidiaries of the Corporation) to outside Directors as
additional compensation for their service as Directors. In December 1994, the
Board of Directors approved amendments to the Directors Plan that are subject
to Stockholder approval at this Meeting. The amendments are described under
Proposal 2 to this Proxy Statement. Prior to the amendment of the Plan,
eligible Directors were granted options to purchase 1,000 shares of Common
Stock on an annual basis and, from time to time, options to purchase shares of
certain of the Corporation's publicly traded, majority-owned subsidiaries. In
1994, options were granted to purchase 4,500, 3,000 and 4,500 shares,
respectively, of the common stock of Thermedics Inc., Thermo Power Corporation
and Thermo Remediation Inc. (giving effect to three-for-two splits of the
shares of Thermedics Inc. and Thermo Remediation Inc.) to each eligible
Director. The amendments to the plan would reduce the size of the option award
to 1,500 shares for subsidiaries that are majority-owned directly by Thermo
Electron and to 1,000 shares for subsidiaries that are majority-owned
indirectly by Thermo Electron through one or more of its other majority-owned
subsidiaries. In addition, the definition of "spinout subsidiary" in which
options could be granted to outside Directors would be expanded to include
privately held, majority-owned subsidiaries that have sold a portion of their
shares primarily to third parties in a private placement or other arms-length
transaction.
The exercise price for options to purchase Common Stock that have been
granted to date under the Directors Plan 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 publicly traded 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. Outstanding options are exercisable six months after the date of grant
and, if granted prior to 1995, expire seven years from the date of grant.
Shares of Common Stock and shares of the common stock of the Corporation's
subsidiaries acquired upon such exercise are subject to restrictions on
transfer and the right of the Corporation to repurchase such shares at the
exercise price in the event the Director ceases to serve as a Director of the
Corporation or its public subsidiaries. These restrictions and repurchase
rights lapse with respect to shares of the Common Stock on the first
anniversary of the grant date and lapse with respect to shares of the
subsidiaries' common stock at the rate of 20% per year, starting with the first
anniversary of the grant date. An aggregate of 200,000 shares of Common Stock
(without giving effect to a three-for-two split of the Common Stock to be
effected on May 24, 1995), and 100,000 shares of the common stock of each
majority-owned subsidiary of the Corporation, has been reserved for issuance
under the Directors Plan.
5
<PAGE>
STOCK OWNERSHIP
The following table sets forth, as of January 28, 1995, the beneficial
ownership of the Corporation's Common Stock, as well as the beneficial
ownership of the common stock of: (i) Thermedics Inc., Thermo Ecotek
Corporation, 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; (ii)
Thermo Cardiosystems Inc. and Thermo Voltek Corp., publicly traded, majority-
owned subsidiaries of Thermedics Inc.; (iii) Thermo Remediation Inc., a
publicly traded, majority-owned subsidiary of Thermo Process Systems Inc.;
(iv) ThermoLase Corporation, a publicly traded, majority-owned subsidiary of
ThermoTrex Corporation; and (v) ThermoSpectra Corporation, a privately held,
majority-owned subsidiary of Thermo Instrument Systems Inc., by (x) each
Director, (y) each of the Corporation's executive officers named in the
summary compensation table set forth below under the heading "Executive
Compensation," and (z) all Directors and executive officers as a group.
<TABLE>
<CAPTION>
THERMO THERMO THERMO
THERMO THERMO THERMO INSTRUMENT THERMO PROCESS CARDIO- THERMO THERMO
ELECTRON THERMEDICS ECOTEK FIBERTEK SYSTEMS POWER SYSTEMS THERMOTREX SYSTEMS VOLTEK REMEDIATION
NAME(1) CORP.(2) INC.(3) CORP.(4) INC.(5) INC.(6) CORP.(7) INC.(8) CORP.(9) INC.(10) CORP.(11) INC.(12)
------- --------- ---------- -------- -------- ---------- -------- ------- ---------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FMR Corp. (15).. 4,760,057 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
John M.
Albertine....... 14,985 4,500 0 3,000 0 3,000 0 4,500 7,500 0 4,500
Peter O. Crisp
(16)............ 41,496 42,424 0 3,000 12,655 30,106 2,160 27,415 15,000 0 4,500
Elias P.
Gyftopoulos..... 29,920 10,048 0 3,000 35,268 6,425 1,540 4,500 7,500 0 4,500
George N.
Hatsopoulos..... 1,563,847 63,291 36,000 118,000 114,639 54,282 55,326 48,746 7,833 0 7,500
John N.
Hatsopoulos..... 282,651 77,402 36,000 111,245 95,129 45,953 62,212 40,982 6,916 17,749 55,182
Robert C.
Howard.......... 91,598 11,459 46,000 35,200 12,495 74,661 9,847 43,066 22,500 0 2,400
Frank Jungers... 107,557 9,050 24,000 3,500 38,496 3,000 0 11,000 7,500 0 15,450
Robert A.
McCabe.......... 19,451 6,998 0 3,000 30,098 16,209 2,160 13,000 7,500 0 4,500
Frank E. Morris. 7,941 4,500 0 3,000 0 3,000 0 4,500 7,500 0 24,263
Donald E. Noble. 21,622 14,173 0 49,223 42,252 16,002 43,682 4,500 7,500 0 9,000
Hutham S.
Olayan(17)...... 8,145 4,500 0 3,000 0 3,000 0 4,500 7,500 0 4,500
William A.
Rainville....... 137,944 0 4,000 224,413 0 0 60,000 2,700 0 0 24,000
Arvin H. Smith.. 273,653 91,036 4,000 40,000 345,321 7,969 36,903 2,700 20,000 0 2,400
Roger D.
Wellington...... 12,616 4,500 0 7,000 3,000 6,425 1,000 4,500 7,500 0 4,500
All Directors
and executive
officers as a
group (16
persons)........ 2,856,337 387,537 163,000 656,800 773,387 300,986 308,689 236,309 147,249 17,749 200,426
<CAPTION>
THERMOLASE THERMOSPECTRA
NAME(1) CORP.(13) CORP.(14)
------- ---------- -------------
<S> <C> <C>
FMR Corp. (15).. N/A N/A
John M.
Albertine....... 0 0
Peter O. Crisp
(16)............ 16,977 0
Elias P.
Gyftopoulos..... 30,000 0
George N.
Hatsopoulos..... 37,244 20,000
John N.
Hatsopoulos..... 37,217 20,000
Robert C.
Howard.......... 60,092 10,000
Frank Jungers... 650 0
Robert A.
McCabe.......... 20,000 0
Frank E. Morris. 0 0
Donald E. Noble. 1,000 0
Hutham S.
Olayan(17)...... 0 0
William A.
Rainville....... 0 10,000
Arvin H. Smith.. 0 20,000
Roger D.
Wellington...... 0 0
All Directors
and executive
officers as a
group (16
persons)........ 239,330 84,500
</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 or her spouse and by that person and his or her 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) The number of shares of Common Stock reported in the table does not
reflect a three-for-two split of such stock to be effected on May 24,
1995 to shareholders of record on April 26, 1995. Shares of the Common
Stock of the Corporation beneficially owned by Dr. 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 2,500, 2,500, 2,500, 738,544, 230,100, 32,190, 2,500,
2,500, 2,500, 2,500, 2,500, 98,550, 169,900, 2,500 and 1,371,909 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of January 28, 1995, 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 924, 753, 1,245, 657 and 5,087 full shares,
respectively, allocated to their respective accounts maintained pursuant
to the Corporation's employee stock ownership plan (the "ESOP"). Shares
beneficially owned by Dr. 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 12,485, 19,154, 35,745, 15,433,
3,923, 17,604, 5,645, 8,991 and 118,980 shares, respectively, allocated
to accounts maintained pursuant to the Corporation's Deferred
Compensation Plan for Directors. Except for Dr. G. Hatsopoulos, who
beneficially owned 3.0% of the Common Stock outstanding as of January 28,
1995, 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 5.6% of the Common Stock
outstanding as of January 28, 1995.
(Footnotes continued on following page)
6
<PAGE>
(3) Shares of the common stock of Thermedics Inc. beneficially owned by Dr.
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 4,500, 6,250, 4,500, 50,000, 50,000, 10,000,
4,500, 4,500, 4,500, 4,500, 4,500, 82,500, 4,500, and 259,750 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of January 28, 1995, 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 1,337, 1,348, 1,459, 1,191 and 7,801 full
shares, respectively, allocated to their respective accounts maintained
pursuant to the Corporation's ESOP. Shares beneficially owned by Mr.
Crisp and all Directors and executive officers as a group include 5,879
shares allocated to Mr. Crisp'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 common stock of
Thermedics Inc. outstanding as of January 28, 1995; all Directors and
executive officers as a group beneficially owned 1.16% of the Thermedics
Inc. common stock outstanding as of such date.
(4) Shares of the common stock of Thermo Ecotek Corporation beneficially
owned by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Howard, Mr. Jungers,
Mr. Rainville, Mr. Smith and all Directors and executive officers as a
group include 36,000, 36,000, 46,000, 24,000, 4,000, 4,000, and 163,000
shares, respectively, that such person or members of the group have the
right to acquire within 60 days of January 28, 1995, through the exercise
of stock options. No Director or executive officer beneficially owned
more than 1% of the common stock of Thermo Ecotek Corporation outstanding
as of January 28, 1995; all Directors and executive officers as a group
beneficially owned 1.24% of the Thermo Ecotek Corporation common stock
outstanding as of such date.
(5) Shares of the common stock of Thermo Fibertek Inc. beneficially owned by
Dr. 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, 35,200, 3,000, 3,000, 3,000, 42,000, 3,000, 220,000, 40,000,
3,000, and 614,200 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of January 28, 1995,
through the exercise of stock options. Shares beneficially owned by Mr.
Noble and all Directors and executive officers as a group include 1,585
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 28, 1995; all Directors and
executive officers as a group beneficially owned 2.43% of the Thermo
Fibertek Inc. common stock outstanding as of such date.
(6) The shares of the common stock of Thermo Instrument Systems Inc. shown in
the table reflect a three-for-two split of such stock effected on April
14, 1995. 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 9,225, 75,000,
75,000, 8,550, 7,050, 3,375, 187,500 and 381,450 shares, respectively,
that such person or members of the group have the right to acquire within
60 days of January 28, 1995, 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 410, 410, 387, 411 and 2,397 full shares, respectively, allocated
to accounts maintained pursuant to the Corporation's ESOP. Shares
beneficially owned by Mr. Jungers, Mr. McCabe and all Directors and
executive officers as a group include 8,999, 5,701 and 14,700 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
Instrument Systems Inc. common stock outstanding as of January 28, 1995;
all Directors and executive officers as a group beneficially owned 1.08%
of the Thermo Instrument Systems Inc. common stock outstanding as of such
date.
(7) Shares of the common stock of Thermo Power Corporation beneficially owned
by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Howard, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble,
Ms. Olayan, Mr. Wellington and all Directors and executive officers as a
group include 3,000, 4,200, 3,000, 40,000, 40,000, 50,000, 3,000, 3,000,
3,000, 4,400, 3,000, 3,000 and 168,600 shares, respectively, that such
person or members of the group have the right to acquire within 60 days
of January 28, 1995, through the exercise of stock options. Shares
beneficially owned by Mr. Crisp, Mr. Noble and all Directors and
executive officers as a group include 7,813, 4,177 and 11,990 shares,
respectively, allocated to their respective 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 28, 1995;
all Directors and executive officers as a group beneficially owned 2.43%
of the Thermo Power Corporation common stock outstanding as of such date.
(8) 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, 4,600, 60,000, 35,000 and 186,600 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of January 28, 1995, 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 167, 170, 167, 171, and 1,014 full shares,
respectively, allocated to their respective accounts maintained pursuant
to the Corporation's ESOP. Shares beneficially owned by Mr. Noble and all
Directors and executive officers as a group include 16,042 shares
allocated to Mr. Noble's account maintained pursuant to that
corporation's Deferred Compensation Plan for Directors. Shares
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 28, 1995, 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 beneficially owned by Mr. Howard and by all Directors
and executive officers as a group include 9,680 shares that Mr. Howard
has the right to acquire within 60 days of January 28, 1995 upon
conversion of Thermo Process Systems Inc.'s 6 1/2% convertible debentures
due 1997. No Director or executive officer beneficially owned more than
1% of the Thermo Process Systems Inc. common stock outstanding as of
January 28, 1995; all Directors and executive officers as a group
beneficially owned 1.80% of the Thermo Process Systems Inc. common stock
as of such date.
(9) Shares of the common stock of ThermoTrex Corporation beneficially owned
by Dr. 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, 26,200, 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 183,270 shares, respectively, that such person or members of the
group have the right to acquire within 60 days of January 28, 1995,
through the exercise of stock options. Shares beneficially owned by Mr.
Crisp and all Directors and executive officers as a group include 1,215
shares allocated to Mr. Crisp'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 ThermoTrex
Corporation common stock outstanding as of January 28, 1995; all
Directors and executive officers as a group beneficially owned 1.25% of
the ThermoTrex Corporation common stock outstanding as of such date.
(10) Shares of the common stock of Thermo Cardiosystems Inc. beneficially
owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Mr. J. Hatsopoulos,
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, 5,389, 7,500, 7,500, 7,500, 7,500, 7,500,
20,000, 7,500, and 115,389 shares,
7
<PAGE>
respectively, that such person or members of the group have the right to
acquire within 60 days of January 28, 1995, through the exercise of stock
options. The Directors and executive officers of Thermo Electron did not
individually or as a group beneficially own more than 1% of the Thermo
Cardiosystems Inc. common stock outstanding as of January 28, 1995.
(11) 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 28, 1995, through the exercise of stock
options. The Directors and executive officers of Thermo Electron did not
individually or as a group beneficially own more than 1% of the Thermo
Voltek Corp. common stock outstanding as of January 28, 1995.
(12) The shares of the common stock of Thermo Remediation Inc. shown in the
table reflect a three-for-two split of such stock effected on March 31,
1995. Shares of the common stock of Thermo Remediation Inc. beneficially
owned by Dr. 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, 4,500, 4,500,
7,500, 22,500, 2,400, 4,500, 4,500, 23,400, 4,500, 4,500, 22,500, 2,400,
4,500 and 134,100 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of January 28, 1995,
through the exercise of stock options. Shares beneficially owned by Dr.
Morris and all Directors and executive officers as a group include 863
shares allocated to Dr. Morris' 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
Remediation Inc. common stock outstanding as of January 28, 1995; all
Directors and executive officers as a group beneficially owned 3.0% of
the Thermo Remediation Inc. common stock outstanding as of such date.
(13) The shares of common stock of ThermoLase Corporation shown in the table
reflect a two-for-one split of such stock effected in March 1994. Shares
of the common stock of ThermoLase Corporation beneficially owned by Mr.
Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr.
Howard and all Directors and executive officers as a group include
11,254, 30,000, 36,000, 36,000, 36,000 and 185,254 shares, respectively,
that such person or members of the group have the right to acquire within
60 days of January 28, 1995, through the exercise of stock options. No
Director or executive officer beneficially owned more than 1% of the
common stock of ThermoLase Corporation outstanding as of January 28,
1995; all Directors and executive officers as a group beneficially owned
1.28% of the ThermoLase Corporation common stock outstanding as of such
date.
(14) Shares of the common stock of ThermoSpectra Corporation 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 20,000, 20,000, 10,000, 10,000, 20,000, and 87,500 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of January 28, 1995, through the exercise of stock
options. Each of Dr. G. Hatsopoulos, Mr. J. Hatsopoulos and Mr. Smith
beneficially owned 1.3% of the common stock of ThermoSpectra Corporation
outstanding as of January 28, 1995; all Directors and executive officers
as a group beneficially owned 5.61% of the ThermaSpectra Corporation
common stock outstanding as of such date.
(15) Information regarding the number of shares of Common Stock beneficially
owned by FMR Corp. is based on the most recent Schedule 13G received by
the Corporation, which reported such ownership as of December 31, 1994.
The address of FMR Corp. is 82 Devonshire Street, Boston, Massachusetts
02109-3614.
(16) Shares beneficially owned by Mr. Crisp do not include 287,233 shares of
common stock of ThermoTrex Corporation or 373,193 shares of common stock
of ThermoLase Corporation owned by Venrock Associates. 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 17,169 shares of common stock of ThermoLase Corporation held by a
trust of which Mr. Crisp is trustee. Mr. Crisp disclaims beneficial
ownership of the shares owned by such trust.
(17) Shares beneficially owned by Ms. Olayan do not include 1,800,000 shares
of Common Stock of the Corporation, 25,000 shares of common stock of
Thermo Ecotek Corporation or 230,000 shares of common stock of ThermoLase
Corporation owned by Crescent Holding GmbH, a member of the Olayan Group.
Crescent Holding GmbH is indirectly controlled by Suliman S. Olayan, Ms.
Olayan's father. Ms. Olayan disclaims beneficial ownership of the shares
owned by Crescent Holding GmbH.
DISCLOSURE OF CERTAIN LATE FILINGS
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and executive officers, and beneficial owners of more
than 10% of the Common Stock, to file with the Securities and Exchange
Commission initial reports of ownership and periodic reports of changes in
ownership of the Corporation's securities. Based upon a review of such
filings, all Section 16(a) filing requirements applicable to such persons were
complied with during 1994, except in the following instances. Each of Dr.
George N. Hatsopoulos, the Corporation's chairman and chief executive officer,
Mr. John N. Hatsopoulos, an executive vice president and chief financial
officer, and Mr. Peter G. Pantazelos, an executive vice president, failed to
report gifts of shares on a timely basis. Dr. Hatsopoulos reported a September
1993 gift of shares in September 1994, Mr. J. Hatsopoulos reported December
1993 gifts of shares to family trusts in February 1995 and Mr. Pantazelos
reported a December 1993 gift of shares in March 1994.
8
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation for services to the Corporation
in all capacities awarded to, earned by or paid to the Corporation's chief
executive officer and its four other most highly compensated executive officers
for the last three fiscal years.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
----------------- ----------------------
SECURITIES UNDERLYING
AWARDS OF OPTIONS
NAME AND PRINCIPAL FISCAL (NO. OF SHARES AND ALL OTHER
POSITION YEAR SALARY BONUS COMPANY)(1)(2) COMPENSATION(3)
------------------ ------ -------- -------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George N. Hatsopoulos.. 1994 $450,000 $500,000 20,000 (TSC) $ 6,750
President and Chief 1993 $417,000 $450,000 430,000 (TMO) $10,118
Executive Officer 50,000 (TMD)
10,000 (TCK)
20,000 (TFT)
75,000 (THI)
40,000 (THP)
40,000 (TPI)
7,500 (THN)
36,000 (TLZ)
30,000 (TKN)
1992 $403,000 $363,000 90,000 (TMO) $ 6,546
88,000 (TFT)
- --------------------------------------------------------------------------------------
John N. Hatsopoulos.... 1994 $280,000 $450,000 64,400 (TMO) $ 6,750
Executive Vice 20,000 (TSC)
President 1993 $256,000 $375,000 88,600 (TMO) $10,118
and Chief Financial 50,000 (TMD)
Officer 10,000 (TCK)
20,000 (TFT)
75,000 (THI)
40,000 (THP)
40,000 (TPI)
22,500 (THN)
36,000 (TLZ)
30,000 (TKN)
1992 $248,000 $237,600 48,900 (TMO) $ 9,414
22,500 (TMD)
88,000 (TFT)
- --------------------------------------------------------------------------------------
Arvin H. Smith......... 1994 $255,000 $280,500 6,000 (TMO) $ 6,750
Executive Vice 20,000 (TSC)
President 1993 $240,000 $304,000 30,850 (TMO) $10,023
30,000 (TMD)
187,500 (THI)
2,400 (THN)
1992 $223,000 $203,800 54,000 (TMO) $ 8,891
52,500 (TMD)
20,000 (TCA)
40,000 (TFT)
35,000 (TPI)
- --------------------------------------------------------------------------------------
</TABLE>
(Table continued on following page)
9
<PAGE>
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------------ ----------------------
SECURITIES UNDERLYING
AWARDS OF OPTIONS
NAME AND PRINCIPAL FISCAL (NO. OF SHARES AND ALL OTHER
POSITION YEAR SALARY BONUS COMPANY)(1)(2) COMPENSATION(3)
------------------ ------ --------- -------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Howard....... 1994 $ 244,000 $160,000 3,900 (TMO) $ 6,750
Executive Vice 10,000 (TSC)
President 1993 $ 237,000 $145,000 3,600 (TMO) $10,422
10,000 (TMD)
10,000 (TCK)
40,000 (THP)
2,400 (THN)
36,000 (TLZ)
30,000 (TKN)
1992 $ 237,000 $131,600 4,950 (TMO) $ 9,414
10,000 (TCK)
40,000 (TFT)
10,000 (THP)
- ---------------------------------------------------------------------------------------
William A. Rainville... 1994 $ 182,000 $173,000 43,000 (TMO) $16,269
Senior Vice President 10,000 (TSC)
1993 $ 170,800 $105,000 23,000 (TMO) $14,717
40,000 (TFT)
60,000 (TPI)
22,500 (THN)
1992 $ 165,000 $148,500 3,600 (TMO) $13,528
180,000 (TFT)
</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: Thermedics Inc. (designated in the table
as TMD), Thermo Cardiosystems Inc. (designated in the table as TCA), Thermo
Ecotek Corporation (designated in the table as TCK), Thermo Fibertek Inc.
(designated in the table as TFT), Thermo Instrument Systems Inc.
(designated in the table as THI), ThermoLase Corporation (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), ThermoSpectra
Corporation (designated in the table as TSC) and ThermoTrex Corporation
(designated in the table as TKN). The shares subject to option have been
adjusted as applicable to reflect three-for-two stock splits effected in
April 1995 and in March 1995 with respect to the common stock of Thermo
Instrument Systems Inc. (designated in the table as THI) and Thermo
Remediation Inc. (designated in the table as THN), and a two-for-one stock
split effected in March 1994 with respect to the common stock of ThermoLase
Corporation, but do not reflect a three-for-two split of the Common Stock
to be effected on May 24, 1995 to shareholders of record on April 26, 1995.
(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 December 31, 1994, the amount and value of each
executive officer's restricted stock holdings were as follows: Dr. G.
Hatsopoulos -- 9,000 shares valued at $403,875; Mr. J. Hatsopoulos -- 900
shares valued at $40,388; Mr. Smith -- 4,500 shares valued at $201,938; Mr.
Howard -- 1,800 shares valued at $80,775; and Mr. Rainville -- 1,800 shares
valued at $80,775.
(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 Electron Web Systems Inc., a subsidiary of
the Corporation.
10
<PAGE>
STOCK OPTIONS GRANTED DURING FISCAL 1994
The following table sets forth information concerning individual grants of
stock options made during fiscal 1994 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 1994.
OPTION GRANTS IN FISCAL 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO PRICE FOR OPTION TERM
OPTIONS EMPLOYEES PER EXPIRATION ---------------------
NAME GRANTED(1) IN FISCAL YEAR SHARE DATE 5% 10%
- ------------------------ ------------ -------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
George N. Hatsopoulos... 20,000 (TSC) 3.1% $10.00 10/26/06 $ 159,171 $ 427,686
John N. Hatsopoulos..... 4,400 (TMO) 0.6% $40.25 7/19/01 $ 72,097 $ 168,018
60,000 (TMO)(2) 8.3% $45.10 11/28/06 $2,153,587 $5,786,587
20,000 (TSC) 3.1% $10.00 10/26/06 $ 159,171 $ 427,686
Arvin H. Smith.......... 6,000 (TMO) 0.8% $40.25 7/19/01 $ 98,315 $ 229,115
20,000 (TSC) 3.1% $10.00 10/26/06 $ 159,171 $ 427,686
Robert C. Howard........ 3,900 (TMO) 0.5% $40.25 7/19/01 $ 63,905 $ 148,925
10,000 (TSC) 1.5% $10.00 10/26/06 $ 79,586 $ 213,843
William A. Rainville.... 3,000 (TMO) 0.4% $40.25 7/19/01 $ 49,157 $ 114,558
40,000 (TMO)(2) 5.6% $45.10 11/28/06 $1,435,725 $3,857,725
10,000 (TSC) 1.5% $10.00 10/26/06 $ 79,586 $ 213,843
</TABLE>
- --------
(1) The shares of the Common Stock of the Corporation shown in the table do not
reflect a three-for-two split of such stock to be effected on May 24, 1995
to shareholders of record on April 26, 1995. 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 ThermoSpectra Corporation (designated
in the table as TSC), as part of the Corporation's stock option program.
All of the options reported are immediately exercisable at the date of
grant, except options to purchase the common stock of ThermoSpectra
Corporation, which generally are not exercisable until that company's stock
is publicly traded. However, the shares acquired upon exercise are subject
to repurchase by the granting corporation at the exercise price if the
optionee ceases to be employed by the granting corporation or another
Thermo Electron company. The granting corporation may exercise its
repurchase rights within six months after the termination of the optionee's
employment. For publicly traded companies, the repurchase rights lapse
ratably over a five- to ten-year period, depending on the option term,
which may vary from seven to twelve years, provided that the optionee
continues to be employed by the granting corporation or another Thermo
Electron company. For companies whose shares are not publicly traded, the
repurchase rights lapse in their entirety on the ninth anniversary of the
grant date. The granting corporation may permit the holders of such options
to exercise options and to satisfy tax withholding obligations by
surrendering shares equal in fair market value to the exercise price or
withholding obligation.
(2) Options to purchase 60,000 and 40,000 shares of the Common Stock granted to
Mr. J. Hatsopoulos and Mr. Rainville, respectively, are subject to the same
terms as described in footnote (1), except that the repurchase rights of
the granting corporation generally do not lapse until the tenth anniversary
of the grant date. In the event of the employee's death or involuntary
termination prior to the tenth anniversary of the grant date, the
repurchase rights of the granting corporation shall be deemed to have
lapsed ratably over a five-year period commencing with the fifth
anniversary of the grant date.
11
<PAGE>
STOCK OPTIONS EXERCISED DURING FISCAL 1994
The following table reports certain information regarding stock option
exercises during fiscal 1994 and outstanding stock options held at the end of
fiscal 1994 by the Corporation's chief executive officer and the other named
executive officers. No stock appreciation rights were exercised or were
outstanding during fiscal 1994.
AGGREGATED OPTION EXERCISES IN FISCAL 1994 AND FISCAL 1994 YEAR-END OPTION
VALUES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF UNEXERCISED
OPTIONS AT FISCAL YEAR- VALUE OF UNEXERCISED
SHARES END(2)(3) IN-THE-MONEY OPTIONS ($)
ACQUIRED VALUE -------------------------- ---------------------------
NAME COMPANY(1) ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ---------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
George N. Hatsopoulos... TMO -- -- 733,744 0 7,796,343 0
TMD -- -- 50,000 0 0 0
TCA 22,500 $487,013 0 0 0 0
TCK -- -- 36,000 0 0(4) 0
TFT -- -- 108,000 0 843,900 0
THI -- -- 75,000 0 24,000 0
THP -- -- 40,000 0 11,000 0
TPI -- -- 40,000 0 0 0
THN -- -- 7,500 0 30,525 0
TLZ -- -- 36,000 0 153,000 0
TSC -- -- 0 20,000 0 0(4)
TKN -- -- 36,600 0 59,730 0
- ---------------------------------------------------------------------------------------------------------------
John N. Hatsopoulos..... TMO -- -- 230,100(5) 0 1,872,102 0
TMD -- -- 50,000 0 0 0
TCA 17,111 $349,923 5,389 0 76,901 0
TCK -- -- 36,000 0 0(4) 0
TFT -- -- 108,000 0 843,900 0
THI -- -- 75,000 0 24,000 0
THP -- -- 40,000 0 11,000 0
TPI -- -- 40,000 0 0 0
THN -- -- 22,500 0 91,575 0
TVL -- -- 4,999 0 18,721 0
TLZ -- -- 36,000 0 153,000 0
TSC -- -- 0 20,000 0 0(4)
TKN 30,000 0 0 0
- ---------------------------------------------------------------------------------------------------------------
Arvin H. Smith.......... TMO -- -- 169,900 0 3,300,372 0
TMD -- -- 82,500 0 406,875 0
TCA -- -- 20,000 0 115,000 0
TCK -- -- 4,000 0 0(4) 0
TFT -- -- 40,000 0 365,000 0
THI -- -- 187,500 0 60,000 0
TPI -- -- 35,000 0 0 0
THN -- -- 2,400 0 9,768 0
TSC -- -- 0 20,000 0 0(4)
TKN -- -- 2,700 0 24,435 0
</TABLE>
(Table continued on following page)
12
<PAGE>
<TABLE>
<CAPTION>
NO. OF UNEXERCISED
OPTIONS AT FISCAL YEAR- VALUE OF UNEXERCISED
SHARES END(1)(2) IN-THE-MONEY OPTIONS ($)
ACQUIRED VALUE -------------------------- ---------------------------
NAME COMPANY ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert C. Howard........ TMO 2,400 $ 56,232 32,190 0 619,046 0
TMD -- -- 10,000 0 0 0
TCA 22,500 $374,513 0 0 0 0
TCK -- -- 46,000 0 0(4) 0
TFT 4,800 $ 43,200 35,200 0 321,200 0
THP -- -- 50,000 0 28,950 0
THN -- -- 2,400 0 9,768 0
TLZ -- -- 36,000 0 153,000 0
TSC -- -- 0 10,000 0 0(4)
TKN -- -- 36,600 0 59,730 0
- ------------------------------------------------------------------------------------------------------------
William A. Rainville.... TMO 150 $ 3,346 98,550(5) 0 910,662 0
TCK -- -- 4,000 0 0(4) 0
TFT -- -- 220,000 0 1,724,300 0
TPI -- -- 60,000 0 0 0
THN -- -- 22,500 0 91,575 0
TSC -- -- 0 10,000 0 0(4)
TKN -- -- 2,700 0 24,435 0
</TABLE>
- --------
(1) Options to purchase shares of the following subsidiaries of the Corporation
have been granted to the chief executive officer and the other named
executive officers: Thermedics Inc. (designated in the table as TMD),
Thermo Cardiosystems Inc. (designated in the table as TCA), Thermo Ecotek
Corporation (designated in the table as TCK), Thermo Fibertek Inc.
(designated in the table as TFT), Thermo Instrument Systems Inc.
(designated in the table as THI), 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), ThermoLase
Corporation (designated in the table as TLZ), ThermoSpectra Corporation
(designated in the table as TSC), Thermo Voltek Corporation (designated in
the table as TVL) and ThermoTrex Corporation (designated in the table as
TKN).
(2) All of the options reported outstanding at the end of the fiscal year were
immediately exercisable as of fiscal year-end, except for ThermoSpectra
Corporation awards, which generally are not exercisable until that
company's stock is publicly traded. However, the shares acquired upon
exercise of the options are subject to repurchase by the granting
corporation at the exercise price if the optionee ceases to be employed by
such corporation or another Thermo Electron company. The granting
corporation may exercise its repurchase rights within six months after the
termination of the optionee's employment. For publicly traded companies,
the repurchase rights generally lapse ratably over a five- to ten-year
period, depending on the option term, which may vary from seven to twelve
years, provided that the optionee continues to be employed by the granting
corporation or another Thermo Electron company. For companies whose shares
are not publicly traded, the repurchase rights lapse in their entirety on
the ninth anniversary of the grant date.
(3) The shares reported in the table have been adjusted as applicable to
reflect three-for-two stock splits effected in April 1995 and March 1995
with respect to the common stock of Thermo Instrument Systems Inc. and
Thermo Remediation Inc., respectively, and to reflect a two-for-one stock
split effected in March 1994 with respect to the common stock of Thermolase
Corporation, but do not reflect a three-for-two split of the Common Stock
to be effected on May 24, 1995 to shareholders of record on April 26, 1995.
(4) No public market for the shares underlying these options existed at fiscal
year-end. Accordingly, no value in excess of exercise price has been
attributed to these options.
(5) Options to purchase 60,000 and 40,000 shares of the Common Stock granted to
Mr. J. Hatsopoulos and Mr. Rainville, respectively, are subject to the same
terms as described in footnote (1), except that the repurchase rights of
the granting corporation generally do not lapse until the tenth anniversary
of the grant date. In the event of the employee's death or involuntary
termination prior to the tenth anniversary of the grant date, the
repurchase rights of the granting corporation shall be deemed to have
lapsed ratably over a five-year period commencing with the fifth
anniversary of the grant date.
13
<PAGE>
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 $150,000 per year.
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$100,000................................ $26,250 $35,000 $43,750 $48,125 $48,125
$125,000................................ $32,813 $43,750 $54,688 $60,156 $60,156
$150,000................................ $39,375 $52,500 $65,625 $72,188 $72,188
</TABLE>
Each eligible employee receives a monthly 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). Full credit is given for the
first 25 years of service, and half credit is given for years over 25 and less
than 30. 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 1994, the compensation of Mr. Rainville recognized
for plan purposes was $150,000. 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 benefits shown in the above table are subject to reduction
for Social Security benefits. 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 that is not approved by the
Board of Directors and their employment is terminated, for whatever reason,
within one year thereafter. For purposes of these agreements a change of
control exists upon (i) the acquisition of 50% or more of the outstanding
Common Stock by any person without the prior approval of the Board of
Directors, (ii) the failure of the Board of Directors, within two years after
any contested election of directors or tender or exchange offer not approved by
the Board of Directors, to be constituted of a majority of directors holding
office prior to such event or (iii) any other event that the Board of Directors
determines constitutes an effective change of control of Thermo Electron.
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 January 28, 1995,
the payments thereunder for the first year thereof to Dr. G. Hatsopoulos, Mr.
J. Hatsopoulos, Mr. Smith and Mr. Howard would have been approximately
$932,000, $555,500, $320,000 and $300,000, respectively. Payments under these
agreements are not subject to the so-called "excess parachute payment"
provisions under applicable provisions of the Internal Revenue Code of 1986, as
amended.
14
<PAGE>
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 if (i) 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 "excess parachute payments." Assuming that severance
benefits would have been payable as of January 28, 1995, the payment under such
agreement would have been approximately $350,000.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
All decisions on compensation for the Corporation's executive officers are
made by the Human Resources Committee of the Board of Directors (the
"Committee"). The executive compensation program presently consists of annual
base salary ("salary"), short-term incentives in the form of annual cash
bonuses, and long-term incentives in the form of stock options.
The Committee believes that the compensation of executive officers should
reflect the scope of their responsibilities, the success of the Corporation,
and the contributions of each executive to that success. In addition, the
Committee believes that base salaries should approximate the mid-point of
competitive salaries derived from market surveys and that short-term and long-
term incentive compensation should reflect the performance of the Corporation
and the contributions of each executive. The process for determining each of
these elements for the named executive officers is outlined below. For its
review of the compensation of other officers of the Corporation, the Committee
follows a substantially similar process.
ESTABLISHING COMPETITIVENESS
External competitiveness is an important element of the Committee's
compensation policy. The competitiveness of the Corporation's compensation for
its executives is assessed by comparing it to market data provided by a
compensation consultant and by annual executive compensation surveys, primarily
"Project 777", an executive compensation survey prepared by Management
Compensation Services, a division of Hewitt Associates. The majority of firms
represented in the Project 777 survey are included in the Standard & Poor's 500
Index but do not necessarily correspond to the companies included in the
Corporation's peer group.
Principles of internal equity are also central to the Committee's
compensation policies. Compensation considered for the Corporation's officers,
whether cash or stock-based incentives, is also evaluated by comparing it to
compensation of other executives within the Thermo Electron organization with
comparable levels of responsibility for comparably sized business units.
BASE SALARY
Base salaries are intended to approximate the mid-point of competitive
salaries for similar organizations of comparable size and complexity as the
Corporation. Executive salaries are adjusted gradually over time and only as
necessary to meet this objective. Increases in base salary may be moderated by
other considerations, such as geographic or regional market data, industry
trends or internal fairness within the Corporation. It is the Committee's
intention that over time the base salaries for the Chief Executive Officer
15
<PAGE>
and the other named executive officers will approximate the mid-point of
competitive data. The salary increases in calendar 1994 for the named executive
officers generally reflect this practice of gradual increases and moderation.
CASH BONUS
The Committee establishes a median potential bonus for each executive by
using the market data on total cash compensation from the same executive
compensation surveys as used to determine salaries. Specifically, the median
potential bonus plus the salary of an executive officer is approximately equal
to the mid-point of competitive total cash compensation for a similar position
and level of responsibility in businesses having comparable sales and
complexity to the Corporation. The actual bonus awarded to an executive officer
may range from minus one to three times the median potential bonus. The value
within the range (the bonus multiplier) is determined at the end of each year
by the Committee in its discretion. The Committee exercises its discretion by
evaluating each executive's performance using a methodology applied throughout
the Corporation. The methodology incorporates measures of operating returns
designed to measure profitability, contributions to shareholder value, and
earnings growth, and includes an evaluation of the contributions of each
executive that are not captured by operating measures but are considered
important to the creation of long-term value for the Stockholders. These
measures of achievements are not financial targets that are met, not met or
exceeded, but are measures of corporate and divisional performance that are
evaluated by using graphs developed by the Corporation. These graphs are
designed to reward performance that is perceived as above average and to
penalize performance that is perceived as below average. The relative weighting
of these achievements varies depending on the executive's role and
responsibilities within the organization.
The bonuses for named executive officers approved by the Committee with
respect to calendar 1994 performance in each instance exceeded the median
potential bonus.
STOCK OPTION PROGRAM
The primary goal of the Corporation is to excel in the creation of long-term
value for the Stockholders. The principal incentive tool used to achieve this
goal is the periodic award to key employees of options to purchase shares of
common stock of the Corporation and its majority-owned subsidiaries.
The Committee and management believe that awards of stock options to purchase
shares of both the Corporation and other companies within the Thermo Electron
group of companies accomplish many objectives. The grant of options to key
employees encourages equity ownership in the Corporation, closely aligns
management's interests to the interests of all the Stockholders, and results in
management's compensation being closely linked to stock performance. In
addition, because the options vest over periods of varying durations and are
subject to forfeiture if the employee leaves the Corporation prematurely, stock
options are an incentive for key employees to remain with the Corporation long-
term. The Committee believes that stock option awards in the Corporation and
its majority-owned subsidiaries are also an important tool in providing
incentives for performance within the entire organization.
In determining awards, the Committee considers the average annual value of
all options to purchase shares of the Corporation and other companies within
the Thermo Electron organization that vest in the next five years. (Values are
established using a modified Black-Scholes option pricing model.) As a
guideline, the Committee strives to maintain the aggregate amount of awards to
all employees over a five-year period below 10% of the Corporation's
outstanding Common Stock, although other factors such as unusual transactions
and acquisitions and standards for awards of comparably situated companies may
affect the number of awards granted.
Awards are not made annually in conjunction with the annual review of cash
compensation, but are made periodically. In determining option awards, the
Committee considers total compensation of executives, actual and anticipated
contributions of each executive, as well as the value of previously awarded
options as described above.
16
<PAGE>
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.
1994 CEO COMPENSATION
The Committee determines the total cash compensation for Dr. George N.
Hatsopoulos, the Corporation's Chief Executive Officer and founder, using a
methodology intended to link performance based on the 10-year total return to
stockholders to compensation for Chief Executive Officers of companies of
comparable size and performance as the Corporation. The determinations of the
Committee as to cash compensation for the Chief Executive Officer are subject
to review by the entire Board of Directors. In 1994, the Board of Directors
concurred in the decisions of the Committee.
In determining the appropriate level of total cash compensation for the Chief
Executive Officer, the Committee uses a matrix developed by a compensation
consultant that compares the compensation of chief executive officers of
competitive firms within the Corporation's peer group to the size of the
organization as determined by level of revenues, and its performance based on
total return to stockholders over a 10-year period. In so doing, the Committee
establishes a "performance adjusted competitive norm" for total cash
compensation that predicts what a comparably sized firm with performance
approximate to that of the Corporation would pay its chief executive officer.
The Committee has determined that it will not pay total cash compensation to
the Corporation's Chief Executive Officer in excess of the performance adjusted
competitive norm predicted by the methodology described above. To determine
total cash compensation for the Chief Executive Officer within these
parameters, the Committee first determines the base salary to be paid the Chief
Executive Officer using the same principles as used in setting base salaries
for the named executive officers and officers of the Corporation (described
above under the heading "Base Salary"). The increase in base salary for the
Chief Executive Officer approved in 1994 by the Committee reflected its policy
of gradual adjustment to reflect average competitive salaries. The Committee
then subtracts the base salary approved for the Chief Executive Officer from
the applicable maximum total cash compensation derived by the methodology
described above to arrive at a maximum potential annual cash bonus.
Within the maximum, the Committee uses its discretion to establish the total
cash compensation of the Chief Executive Officer, taking into account the total
cash compensation of other executives in the Corporation and the Corporation's
10-year total return to Stockholders. The Committee believes that the
Corporation's performance is reflected in its 10-year return, as highlighted in
the 10-year Performance Graph appearing on page 20 of this Proxy Statement,
which compares the Corporation's stock performance over this period to the
stock performance of the Standard & Poor's 500 and its peer performance group.
For the 10-year period ending December 31, 1994, the Corporation achieved a
ten-year compounded rate of return to Stockholders of 22.4 percent per year,
well in excess of the 15.6 percent per year return achieved by the Standard &
Poor's 500 Index. Considering Dr. Hatsopoulos' leadership and dedication in
enhancing
17
<PAGE>
Stockholder value over the last ten years, as demonstrated in the returns
reported, the Committee awarded Dr. Hatsopoulos the cash bonus reported in the
Summary Compensation Table.
The Committee did not award Dr. Hatsopoulos any stock options to purchase
Common Stock of the Corporation in 1994. In determining option awards for the
Chief Executive Officer, the Committee employs an analysis similar to that
described for other officers under the heading "Stock Option Program". In
addition, it is the Committee's policy to award Dr. Hatsopoulos options to
purchase shares of Common Stock from time to time in amounts such that his
ownership of the Corporation approaches five percent of the outstanding Common
Stock. Such awards are made at times the Corporation achieves a ten-year return
to Stockholders well in excess of the returns achieved by the Standard & Poor's
500 Index. Such an award was made by the Committee in 1993, and although the
Corporation has continued to outperform the Standard & Poor's 500 Index over
the ten-year period, the Committee did not deem another award necessary in
1994.
In 1994, Dr. Hatsopoulos was awarded options to purchase common stock of a
newly formed majority-owned subsidiary of the Corporation, ThermoSpectra
Corporation. Awards of stock options are made from time to time by the human
resources committees of majority-owned subsidiaries using guidelines and a
methodology developed by the Committee. The methodology is described above
under the heading "Stock Option Program".
POLICY ON DEDUCTIBILITY OF COMPENSATION
The Committee has also considered the application of Section 162(m) of the
Internal Revenue Code to the Corporation's compensation practices. Section
162(m) limits the tax deduction available to public companies for annual
compensation paid to senior executives in excess of $1 million unless the
compensation qualified as "performance based".
Neither the Chief Executive Officer nor any of the other named executive
officers received cash compensation in excess of $1 million in 1994. With the
possible exception of the Chief Executive Officer, the Committee does not
currently expect the cash compensation of any officer to exceed the $1 million
threshold in 1995. Furthermore, it is believed that the Corporation's stock
incentive plans qualify as "performance based". Therefore, it does not appear
that the Section 162(m) limitation will have a significant impact on the
Corporation in the near-term. The Committee believes that the Corporation's
incentive compensation program, as presently structured, continues to serve the
best interests of the Corporation and its Stockholders and does not currently
intend to qualify the incentive compensation program as a performance-based
plan. However, the Committee will continue to monitor the effect of Section
162(m) on the Corporation.
Mr. Roger D. Wellington (Chairman)
Dr. Elias P. Gyftopoulos
Mr. Frank Jungers
Mr. Donald E. Noble
18
<PAGE>
COMPARATIVE PERFORMANCE GRAPHS
FIVE-YEAR PERFORMANCE GRAPH: 1989-1994
The Securities and Exchange Commission requires that the Corporation include
in this Proxy Statement a line-graph presentation comparing cumulative, five-
year shareholder returns for the Corporation's Common Stock with a broad-based
market index and either a nationally recognized industry standard or an index
of peer companies selected by the Corporation. The Corporation has compared its
performance with the 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 and Manufacturing Co., Perkin-Elmer Corp., Raytheon Co.,
Rockwell International Corp., TRW Inc., Textronix, 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.
COMPARISON OF 1989-1994 CUMULATIVE TOTAL RETURN AMONG THERMO ELECTRON
CORPORATION (TMO),
THE STANDARD & POOR'S 500 INDEX (S&P 500)
AND THE CORPORATION'S PEER GROUP
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TMO 100 94 152 154 206 220
- ------------------------------------------------------------------------------
S&P 500 100 97 126 136 150 152
- ------------------------------------------------------------------------------
Peer Group 100 96 116 121 126 130
</TABLE>
19
<PAGE>
The total return for the Corporation's Common Stock (TMO), the S&P 500 Index
(S&P 500) and the Corporation's Peer Group (Peer Group) assumes the
reinvestment of dividends, although dividends have not been declared on the
Corporation's Common Stock. The Corporation's Common Stock is traded on the New
York Stock Exchange under the ticker symbol "TMO".
TEN-YEAR PERFORMANCE GRAPH: 1984-1994
The Corporation has also elected to compare its cumulative shareholder return
to the S&P 500 Index and the Corporation's Peer Group during the last ten
years. The Corporation's Human Resources Committee uses this information as a
measure of performance in determining total cash compensation for the
Corporation's Chief Executive Officer.
COMPARISON OF 1984-1994 CUMULATIVE TOTAL RETURN AMONG THERMO ELECTRON
CORPORATION (TMO),
THE S&P 500 INDEX (S&P 500) AND THE CORPORATION'S PEER GROUP
- --------------------------------------------------------------------------------
[CHART GOES HERE]
<TABLE>
<CAPTION>
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TMO 100 151 191 153 228 345 325 525 531 710 759
- --------------------------------------------------------------------
S&P 500 100 132 156 165 192 253 245 319 344 378 383
- --------------------------------------------------------------------
Peer Group 100 129 153 167 174 227 223 269 280 293 303
</TABLE>
20
<PAGE>
RELATIONSHIP WITH AFFILIATES
Thermo Electron has adopted a strategy of selling a minority interest in
subsidiary companies to outside investors as an important tool in its future
development. As part of this strategy, Thermo Electron has created Thermedics
Inc., Thermo Ecotek Corporation, Thermo Fibertek Inc., Thermo Instrument
Systems Inc., Thermo Power Corporation, Thermo Process Systems Inc. and
ThermoTrex Corporation, all of which are publicly traded, majority subsidiaries
of the Corporation; Thermedics Inc. has created Thermo Cardiosystems Inc. as a
publicly traded, majority-owned subsidiary and has acquired the majority
interest in a previously unaffiliated public company, Thermo Voltek Corp.;
Thermo Process Systems Inc. has created Thermo Remediation Inc. as a publicly
traded, majority-owned subsidiary; and ThermoTrex Corporation has created
ThermoLase Corporation as a publicly traded, majority-owned subsidiary. From
time to time, Thermo Electron and its subsidiaries will create other majority-
owned subsidiaries as part of its spinout strategy. (The Corporation and the
other Thermo Electron subsidiaries are hereinafter referred to as the "Thermo
Subsidiaries".)
Thermo Electron and each of the Thermo Subsidiaries recognize that the
benefits and support that derive from their affiliation are essential elements
of their individual performance. Accordingly, Thermo Electron and each of the
Thermo Subsidiaries have adopted the Thermo Electron Corporate Charter (the
"Charter") to define the relationships and delineate the nature of such
cooperation among themselves. The purpose of the Charter is to ensure that (1)
all of the companies and their stockholders are treated consistently and
fairly, (2) the scope and nature of the cooperation among the companies, and
each company's responsibilities, are adequately defined, (3) each company has
access to the combined resources and financial, managerial and technological
strengths of the others, and (4) Thermo Electron and the Thermo Subsidiaries,
in the aggregate, are able to obtain the most favorable terms from outside
parties.
To achieve these ends, the Charter identifies the general principles to be
followed by the companies, addresses the role and responsibilities of the
management of each company, provides for the sharing of group resources by the
companies and provides for centralized administrative, banking and credit
services to be performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by members,
coordinating the access of Thermo Electron and the Thermo Subsidiaries (the
"Thermo Group") to external financing sources, ensuring compliance with
external financial covenants and internal financial policies, assisting in the
formulation of long-range financial planning and providing other banking and
credit services. Pursuant to the Charter, Thermo Electron may also provide
guarantees of debt or other obligations of the Thermo Subsidiaries or may
obtain external financing at the parent level for the benefit of the Thermo
Subsidiaries. In certain instances, the Thermo Subsidiaries may provide credit
support to, or on behalf of, the consolidated entity or may obtain financing
directly from external financing sources. Under the Charter, Thermo Electron is
responsible for determining that the Thermo Group remains in compliance with
all covenants imposed by external financing sources, including covenants
related to borrowings of Thermo Electron or other members of the Thermo Group,
and for apportioning such constraints within the Thermo Group. In addition,
Thermo Electron is 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. Any Thermo Subsidiary
can withdraw from participation in the Charter upon 30 days' prior notice. A
subsidiary's participation in the Charter will terminate 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
21
<PAGE>
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 with 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. For the fiscal year ended December
31, 1994, the Corporation assessed each Thermo Subsidiary an annual fee equal
to 1.25% of such subsidiary's revenues for these services. Effective January 1,
1995, the fee has been reduced to 1.2% of a subsidiary's revenues. The fee is
reviewed annually and may be changed by mutual agreement of any Thermo
Subsidiary and Thermo Electron. For items such as employee benefit plans,
insurance coverage and other identifiable costs, Thermo Electron charges each
of the Thermo Subsidiaries based on charges attributable to the respective
subsidiary. Each corporate services agreement automatically renews for
successive one-year terms, unless canceled by the subsidiary upon 30 days'
prior notice. In addition, each corporate services agreement terminates
automatically in the event the subsidiary ceases to be a member of the Thermo
Group or ceases to be a participant in the Charter. In the event of a
termination of a corporate services agreement, the subsidiary will be required
to pay a termination fee equal to the fee that was paid by such subsidiary for
services under the 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 subsidiary or as
required in order to meet such subsidiary's obligations under Thermo Electron's
policies and procedures. Thermo Electron will charge a subsidiary a fee equal
to the market rate for comparable services if such services are provided to
such subsidiary following termination.
Pursuant to international distribution agreements, Thermedics Inc., a
subsidiary of the Corporation, has appointed Arabian Business Machine Co.
("ABN") and Olayan Financing Company ("OFC") as its exclusive distributors of
Thermedics Inc's drug- and explosives-detection products in certain Middle East
countries. ABM and OFC are affiliates of Competrol Real Estate Limited
("Competrol") and Olayan America Corporation ("OAC"). Hutham S. Olayan, a
Director of Thermo Electron, is the president and a director of both Competrol
and OAC, which are indirectly controlled by Suliman S. Olayan, Ms. Olayan's
father. During 1994, Thermedics Inc. paid an aggregate of $451,000 pursuant to
these distributor agreements.
On September 1 and October 13, 1994, ThermoSpectra Corporation ("TSC"), a
subsidiary of the Corporation, completed private placements primarily to
outside investors of minority investments in its common stock. Venrock
Associates and Crescent Holding GmbH purchased an aggregate of 160,000 and
50,000 shares, respectively, of the common stock of TSC in such private
placements at a purchase price of $10.00 per share, the same price paid by
unaffiliated buyers. Peter O. Crisp, a Director of the Corporation, is both a
general and a limited partner of Venrock Associates. Crescent Holding GmbH is
indirectly controlled by Suliman S. Olayan, the father of Hutham S. Olayan, a
Director of the Corporation. On March 7, 1995, ThermoLyte Corporation ("TLC"),
another subsidiary of the Corporation, completed a similar private placement
primarily to outside investors of minority investments in its common stock.
Venrock Associates and Crescent International Holdings Limited purchased
100,000 and 25,000 shares, respectively, of the common stock of TLC in such
private placement at a purchase price of $10.00 per share, the same price paid
by unaffiliated buyers. Crescent International Holdings Limited is a wholly
owned subsidiary of Crescent Holding GmbH.
On March 15, 1995, Thermo BioAnalysis Corporation ("TBC"), a subsidiary of
the Corporation, completed a private placement primarily to outside investors
of minority investments in its common stock. Arvin Smith, an executive vice
president of the Corporation, purchased 9,000 shares of the common stock of TBC
in such private placement at a purchase price of $10.00 per share, the same
price paid by unaffiliated buyers.
22
<PAGE>
-- PROPOSAL 2 --
PROPOSAL TO AMEND THE DIRECTORS STOCK OPTION PLAN
The Board of Directors has approved amendments to the Corporation's Directors
Stock Option Plan (the "Directors Plan") that would change the formula for
granting to its outside Directors stock options to purchase common stock of the
Corporation's majority-owned subsidiaries and amend certain other technical
provisions of the plan as described below.
In December 1994, as part of a review of director compensation, the Board of
Directors adopted amendments to the Directors Plan, subject to Stockholder
approval. The amendments would change the formula by which stock options to
purchase common stock of majority-owned subsidiaries of the Corporation are
automatically granted to outside Directors. The formula, as amended, would
reduce the size of awards to purchase common stock of majority-owned
subsidiaries from 3,000 shares to 1,500 shares for majority-owned subsidiaries
that are directly owned by the Corporation and to 1,000 shares for majority-
owned subsidiaries that are indirectly owned by the Corporation through one or
more of its other majority-owned subsidiaries. The amendments would also expand
the definition of "spinout subsidiary" to include majority-owned subsidiaries
that have sold a portion of their shares primarily to third parties in a
private placement or other arms-length transaction, as well as publicly held
majority-owned subsidiaries. The amendments would also reduce the term of
options granted under the plan to three years from seven years for annual
grants of options to purchase Common Stock and to five years from seven years
for grants of options to purchase shares of the common stock of majority-owned
subsidiaries of the Corporation and change the vesting provisions of such
options as described below under "Grant of Subsidiary Options".
The review of director compensation was conducted in conjunction with an
overall review of director compensation for Thermo Electron and its majority-
owned subsidiaries. The purpose of the review was to evaluate compensation
practices for the entire Thermo Electron family of companies, compare total
cash compensation to comparable market data and ensure consistent and
internally equitable compensation practices among the companies within the
Thermo Electron family. The Directors determined that the size of the award of
stock options in subsidiaries should be reduced, while no distinction between
majority-owned subsidiaries that have private or public investors should be
made.
The spinout of business units represents an integral part of the
Corporation's strategy, and the Corporation believes it is desirable and in the
best interests of the Corporation and its Stockholders that the outside
Directors of the Corporation have a personal equity interest in existing and
future spinout companies of the Corporation. The Board of Directors believes
that the award of stock options to key personnel and Directors in its spinout
companies created from time to time serves to motivate individuals to
contribute significantly to the Corporation's future growth and success and to
align the long-term interest of these individuals to those of all the
Stockholders of the Corporation.
SUMMARY OF THE AMENDMENTS TO THE DIRECTORS PLAN
The full text of the Directors Plan as amended and restated is set forth in
Appendix A, to which reference is made. A brief description of the amendments
to the Directors Plan follows (the "Amendments"), but is qualified in its
entirety by reference to the full text of the plan. Except as amended, the
Directors Plan will continue in full force and effect. A brief description of
the material terms of the Directors Plan that are not affected by the
Amendments are summarized under the heading "Other Terms of the Directors
Plan." The closing price of the Common Stock on April 6, 1995 (without giving
effect to the three-for-two split of the Common Stock to be effected on May 24,
1995), was $49.625 per share.
ANNUAL GRANT OF CORPORATION OPTIONS
The Directors Plan presently provides that options to purchase 1,000 shares
of Common Stock will be granted annually to each eligible Director as of the
close of business on the date of the Corporation's Annual
23
<PAGE>
Meeting of Stockholders. No change in the size of the award of stock options to
purchase Common Stock of the Corporation is proposed, although the length of
the option term will be reduced to three years from seven years for options
granted at the 1995 Annual Meeting of Stockholders and thereafter. Options may
be exercised at any time from and after the six-month anniversary of the grant
date of the option and prior to the expiration of the option. Options are
subject to restrictions on resale and to the repurchase by the Corporation of
the shares subject to option at the exercise price if the Director ceases to
serve as a director of the Corporation or any subsidiary of the Corporation,
for any reason other than death, within one year from the date of grant. The
option exercise price shall be determined by the average closing price of the
Common Stock on the New York Stock Exchange for the five trading days preceding
and including the date of the Annual Meeting of Stockholders.
GRANT OF SUBSIDIARY OPTIONS
The Amendments will change the formula by which options to purchase shares of
the common stock of majority-owned subsidiaries of the Corporation will be
granted automatically to eligible outside Directors at the close of business on
the first Annual Meeting of Stockholders following the spinout of the
subsidiary (referred to as the "Spinout Subsidiary"), and also at the close of
business on the date of every fifth Annual Meeting of Stockholders thereafter
during the continuation of the plan. The definition of a Spinout Subsidiary
would be expanded to include as a "spinout" the first to occur of either a
public offering of the subsidiary's common stock or a private placement of such
stock primarily to third parties in an arms-length transaction. At the close of
business on the date of the applicable Annual Meeting of Stockholders, options
to purchase shares of common stock of the Spinout Subsidiary will be granted to
each eligible outside Director holding office immediately following the
meeting. The number of shares to be granted subject to the option would depend
on whether the Spinout Subsidiary was a direct subsidiary of the Corporation or
an indirect subsidiary of the Corporation. Options to purchase 1,500 shares of
the Spinout Subsidiary would be granted to eligible Directors if the company
were a direct subsidiary of the Corporation, and options to purchase 1,000
shares would be granted if the subsidiary were owned indirectly by the
Corporation through one or more of its majority-owned subsidiaries. A Director
who is also a director of a Spinout Subsidiary will not be eligible to receive
options to purchase stock of that subsidiary under the Directors Plan, although
he or she will be eligible for options granted under a comparable formula plan
adopted by the subsidiary. The exercise price for options will be determined by
the average of the closing prices reported by the American Stock Exchange (or
other principal market on which such common stock is then traded) for the five
trading days immediately preceding the date on which the option is granted or,
if the shares are not then traded, at the last price paid per share by third
parties in an arms-length private placement of common stock prior to the option
grant under the Directors Plan. Options to purchase the common stock of a
Spinout Subsidiary will vest and be exercisable upon the fourth anniversary of
the grant date, unless the common stock underlying the option grant is
registered under Section 12 of the Securities Exchange Act of 1934, as amended
("Section 12 Registration") prior to such date. Section 12 Registration is
normally a prerequisite to the public trading of a security. In the event that
the effective date of Section 12 Registration occurs prior to the fourth
anniversary of the grant date, then the option will become immediately
exercisable and the shares acquired upon 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 any of its subsidiaries. In such event, the
restrictions and repurchase rights shall lapse or be deemed to have lapsed at
the rate of 25% per year, starting with the first anniversary of the grant
date, provided the Director has continuously served as a Director of the
Corporation or any of its subsidiaries since the grant date. The option will
expire on the fifth anniversary of the grant date, unless the Director dies or
otherwise ceases to serve as a Director of the Corporation or any of its
subsidiaries prior to that date.
OTHER TERMS OF THE DIRECTORS PLAN
A brief description of the other principal features of the Directors Plan
that are not affected by the Amendments follows, but it is qualified in its
entirety by reference to the full text set forth in Appendix A.
24
<PAGE>
ELIGIBILITY; ADMINISTRATION
Directors of the Corporation who are not employees of the Corporation or any
of its subsidiaries are eligible to participate in the Directors Plan. The
Directors Plan is administered by the Board of Directors of the Corporation
(the "Board"). All questions of interpretation of the Directors Plan or of any
options granted pursuant to the Plan are determined by the Board.
TERMS AND CONDITIONS OF OPTIONS
The exercise price for options is determined by the average of the closing
prices reported by the principal exchange on which the Common Stock is traded
(the New York Stock Exchange for the Corporation; the American Stock Exchange
for each of its public subsidiaries to date) for the five trading days
immediately preceding and including the date the option is granted, or, if the
shares underlying the option are not so traded, at the last price paid per
share by third parties in an arms-length transaction with the Corporation prior
to the option grant. The exercise price of options granted under the Directors
Plan must be paid in full by check or by the delivery of shares of Common Stock
(or shares of the common stock of the applicable subsidiary) that have a fair
market value on the exercise date equal to the exercise price of the option.
Stock options granted under the plan are non-statutory stock options. If a
Director dies or otherwise ceases to serve as a Director of the Corporation or
any of its subsidiaries, or the Corporation is liquidated, the options will
terminate. Options are evidenced by a written agreement and are subject to
transfer restrictions that lapse as to all of the shares on the first
anniversary of the grant date, as to annual grants of options to purchase
Common Stock of the Corporation, and either on the fourth anniversary or
ratably over a four-year period as to options to purchase common stock of
Spinout Subsidiaries of the Corporation, as described above under the caption
"Grant of Subsidiary Options". Option holders will be permitted to tender
shares of Common Stock (or shares of the common stock of the applicable
subsidiary) to satisfy withholding tax obligations, if any.
CHANGE IN CONTROL PROVISIONS
If there is a "Change in Control" of the Corporation, as defined in the
Directors Plan, any stock options that are not then exercisable and fully
vested will become fully exercisable and vested; and the restrictions
applicable to shares purchased upon exercise of options will lapse and such
shares will be free of restrictions and fully vested. 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 of Directors, (2) during any two-year period the individuals who
constituted the Board of Directors at the beginning of such period no longer
represent a majority of such board, or (3) the Board of Directors determines
that any other event constitutes an effective change in control of the
Corporation.
AMENDMENT AND TERMINATION
The Directors Plan remains in full force and effect until suspended or
discontinued by the Board. The Board may at any time or times amend or review
the Directors Plan, provided that no amendment that is not approved by the
Stockholders of the Corporation shall be effective if it would cause the
Directors Plan to fail to satisfy the requirements of Rule 16b-3 (or any
successor rule) of the Securities Exchange Act of 1934, as amended. No
amendment of the Directors Plan or any agreement evidencing options granted
under the Directors Plan may adversely affect the rights of any recipient of
any option previously granted without such recipient's consent.
SHARES SUBJECT TO THE DIRECTORS PLAN
The number of shares of the Common Stock that has been reserved for issuance
under the Directors Plan is 200,000 shares (without giving effect to the three-
for-two split of the Common Stock to be effected on May 24, 1995). In addition,
100,000 shares of the common stock of each Spinout Subsidiary are also reserved
for transfer upon exercise of options granted thereunder. Options and shares
that are forfeited or otherwise reacquired by the Corporation will again be
available for the grant of options under the Directors
25
<PAGE>
Plan. If the outstanding shares of Common Stock or the outstanding shares of
the common stock of any subsidiary are increased, decreased or exchanged for a
different number or kind of shares or other securities through merger,
consolidation, stock split, stock dividend, reverse stock split or other
distribution, an appropriate proportionate adjustment may be made in the
maximum number or kind of shares reserved for issuance under the Directors
Plan.
The proceeds received by the Corporation from exercises under the Directors
Plan will be used for the general purposes of the Corporation. Shares issued
under the Directors Plan may be authorized but unissued shares, or shares
reacquired by the Corporation and held in its treasury.
EFFECTIVE DATE
The amendment will be effective as of January 1, 1995, if approved by the
Stockholders of the Corporation at this meeting.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal current Federal income tax
consequences of stock options granted under the Directors Plan. It does not
describe all Federal tax consequences under the Directors Plan, nor does it
describe state, local or foreign tax consequences.
The stock options granted under the Directors Plan are non-statutory stock
options and therefore no income will be realized by the optionee at the time
the option is granted. Generally, at exercise, ordinary income will be 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. The
Corporation receives a tax deduction for the same amount, and, upon disposition
of the shares, appreciation or depreciation after the date of exercise will be
treated as either short-term or long-term capital gain depending on how long
the shares have been held.
NEW PLAN BENEFITS
Only the outside Directors of the Corporation are eligible to participate in
the Directors Plan. The following table sets forth, to the extent determinable,
the number of additional shares of the common stock of the Corporation and its
subsidiaries that will be granted under the Directors Plan to the "non-
executive Director Group" in the first year if the Amendments are approved by
the Stockholders. Named executive officers and other employee groups are not
set forth in the table as such persons and groups are not eligible to receive
options under the Directors Plan.
<TABLE>
<CAPTION>
DOLLAR NUMBER
NAME AND POSITION VALUE ($)(1) OF SHARES COMPANY
----------------- ------------ --------- -------
<S> <C> <C> <C>
Non-Executive Director
Group (9 persons)....... $60,000 6,000 Thermo BioAnalysis Corporation
$70,000 7,000 ThermoLyte Corporation
$60,000 6,000 ThermoSpectra Corporation
</TABLE>
- --------
(1) Assumes the exercise price for these options will be $10.00 per share,
which was the purchase price for the most recent private placement of the
shares underlying such options.
- --------------------------------------------------------------------------------
RECOMMENDATION
The Board of Directors believes that the Amendments to the Directors Plan
will enable the Corporation to ensure the continued services and contributions
of its outside Directors and to attract and retain other highly qualified
individuals to serve as outside Directors from time to time. Accordingly, the
Board of Directors believes that the proposal is in the best interests of the
Corporation and its Stockholders and recommends that the Stockholders vote
"FOR" the approval of the Amendments to the Directors Plan to
26
<PAGE>
change the formula for the grant of stock options to outside Directors and to
provide for the automatic grant to outside Directors of options to purchase
common stock of the Corporation's majority-owned subsidiaries. If not otherwise
specified, Proxies will be voted FOR approval of this proposal.
- --------------------------------------------------------------------------------
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as independent
public accountants for fiscal 1995. 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 LLP 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.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the 1996 Annual Meeting
of the Stockholders of the Corporation must be received by the Corporation for
inclusion in the Proxy Statement and form of Proxy relating to that meeting no
later than December 28, 1995.
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.
Waltham, Massachusetts
April 26, 1995
27
<PAGE>
APPENDIX A
THERMO ELECTRON CORPORATION
DIRECTORS STOCK OPTION PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1995)
1. PURPOSE
The purpose of this Directors Stock Option Plan (the "Plan") of Thermo
Electron Corporation (the "Company") is to encourage ownership in the Company
and its publicly-traded majority-owned subsidiaries by non-management directors
of the Company whose services are considered essential to the Company's growth
and progress and to provide them with a further incentive to become directors
and to continue as directors of the Company. The Plan is intended to be a
nonstatutory stock option plan.
2. ADMINISTRATION
The Board of Directors, or a Committee (the "Committee") consisting of two or
more directors of the Company appointed by the Board of Directors, shall
supervise and administer the Plan. Grants of stock options under the Plan and
the amount and nature of the options to be granted shall be automatic in
accordance with Section 5. Within such constraint, the Committee shall have
full power to interpret and administer the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan or any stock options granted
under it, determine the terms and conditions of stock options (including terms
and conditions relating to events of merger, consolidation, dissolution and
liquidation, change of control, vesting and forfeiture), any term or condition
of an option, cancel an existing grant in whole or in part with the consent of
an optionee, accelerate the vesting or lapse of restrictions and adopt the form
of instruments evidencing options granted under the Plan and change such forms
from time to time. All questions of interpretation of the Plan or of any stock
options granted under it shall be determined by the Board of Directors or the
Committee and such determination shall be final and binding upon all persons
having an interest in the Plan.
3. PARTICIPATION IN THE PLAN
Directors of the Company who are not employees of the Company or any
subsidiary or parent of the Company shall be eligible to participate in the
Plan. Directors who receive grants of stock options in accordance with this
Plan are sometimes referred to herein as "Optionees."
4. STOCK SUBJECT TO THE PLAN
The maximum number of shares which may be issued under the Plan shall be two
hundred thousand (200,000) shares of the Company's $1.00 par value Common Stock
(the "Company Common Stock"), and one hundred thousand (100,000) shares of each
of the Corporation's majority-owned subsidiaries, whether presently existing or
formed in the future ("Subsidiary Common Stock"; Company Common Stock and
Subsidiary Common Stock are collectively referred to herein as "Common Stock")
subject to adjustment as provided in Section 9 of the Plan. Shares of Company
Common Stock to be issued upon the exercise of options granted under the Plan
may be either authorized but unissued shares or shares held by the Company in
its treasury. Shares of Subsidiary Common Stock to be issued upon the exercise
of options granted under the Plan shall be shares beneficially owned by the
Company. If any option expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject thereto shall again be
available for options thereafter to be granted.
5. TERMS AND CONDITIONS
A. Company Stock Option Grants
Each Director of the Company who meets the requirements of Section 3 and who
is holding office immediately following the Annual Meeting of Stockholders
shall be granted an option to purchase 1,000
A-1
<PAGE>
shares of Company Common Stock at the close of business on the date of such
Annual Meeting. Options granted under this Subsection A shall be exercisable as
to 100% of the shares subject to the option as set forth in Section 5(C), but
shares acquired upon exercise are subject to repurchase by the Company at the
exercise price if the Director ceases to serve as a Director of the Company or
any of its majority-owned subsidiaries prior to the first anniversary of the
grant date, for any reason other than death.
B. Subsidiary Stock Option Grants
Each Director of the Company who meets the requirements of Section 3 and who
is holding office immediately following the Annual Meeting of Stockholders
shall be granted an option to purchase that number of shares of the Common
Stock of each majority-owned subsidiary of the Corporation, the common stock of
which shall have become publicly traded or a portion of which shall have been
sold primarily to third parties in a private placement or other arms-length
transaction (such transaction being referred to herein as a "Spinout
Transaction", and such subsidiary being referred to herein as a "Spinout
Subsidiary") set forth below in accordance with the following schedule at the
close of business on the date of the Annual Meeting occurring in the following
years:
<TABLE>
<CAPTION>
YEAR OF
ANNUAL
MEETING SUBSIDIARY IN WHICH OPTIONS GRANTED
------- -----------------------------------
<S> <C>
1993 and 1998 Thermo Fibertek Inc.
ThermoTrex Corporation
1994 and 1999 Thermedics Inc.
Thermo Power Corporation
Thermo Remediation Inc.
1995 and 2000 Thermo Instrument Systems Inc.
Thermo Voltek Corp.
ThermoLase Corporation
Thermo Ecotek Corporation
ThermoLyte Corporation
ThermoSpectra Corporation
Thermo BioAnalysis Corporation
1996 and 2001 Thermo Process Systems Inc.
1997 and 2002 Thermo Cardiosystems Inc.
</TABLE>
In the event a majority-owned subsidiary of the Corporation shall become a
"Spinout Subsidiary" following the adoption of this Plan, then the subsidiary
shall be added to the foregoing schedule and options to purchase its common
stock shall be granted at the first Annual Meeting of Stockholders of the
Company next following the date of such subsidiary's "Spinout Transaction".
The number of shares to be granted under this subsection B shall be
determined in accordance with the following formula: (a) if the Spinout
Subsidiary is a majority-owned subsidiary of Thermo Electron directly or
through a wholly-owned subsidiary, then the number of shares to be granted
subject to option shall be 1,500 shares; and (b) if the Spinout Subsidiary is a
majority-owned subsidiary of Thermo Electron indirectly through one or more
majority-owned subsidiaries, then the number of shares to be granted subject to
option shall be 1,000 shares.
Options granted under this Section 5(B) shall vest and be exercisable as to
100% of the shares of common stock subject to the option on the fourth
anniversary of the grant date of the option, unless, prior to such anniversary,
the underlying common stock shall have been registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"; such
registrations are referred to herein as a "Section 12 Registration"). From and
after 90 days after the effective date of Section 12 Registration, options
granted hereunder shall be immediately exercisable as to 100% of the shares
subject to the option, subject to the right of the Company to repurchase the
shares at the exercise price in the event the Optionee ceases to
A-2
<PAGE>
serve as a director of the Company, or any subsidiary of the Company during the
option term. The right of the Company to so repurchase the shares shall lapse
as to one-fourth of the shares granted on each of the first, second, third and
fourth anniversaries of the grant date of the option, provided the Optionee has
remained continuously a director of the Company or any subsidiary of Thermo
Electron since the grant date. In all other respects, the option shall be
subject to the general terms and conditions applicable to all option grants as
set forth below in Section 5(C), including the determination of the exercise
price of such option.
No Director, who is otherwise eligible under Section 3, shall be eligible
under this subsection B to receive grants of stock options in subsidiaries on
which he or she is then serving as a Director.
C. General Terms and Conditions Applicable to All Grants
1. Except as otherwise provided in Section 5(B), options shall be
exercisable at any time from and after the six-month anniversary of the
grant date and prior to the date which is the earliest of:
(a) three years after the grant date for options granted under
Section 5(A) and five years after the grant date for options granted
under Section 5(B), (b) three months after the date the Optionee ceases
to be a Director of the Company or any subsidiary or parent corporation
of the Company (six months in the event the Optionee ceases to meet
these requirements by reason of his death), or (c) the date of
dissolution or liquidation of the Company.
2. The exercise price at which Options are granted hereunder shall be the
average of the closing prices reported by the national securities exchange
on which the Common Stock subject to option is principally traded for the
five trading days immediately preceding and including the date the option
is granted or, if such security is not traded on an exchange, the average
last reported sale price for the five-day period on the NASDAQ National
Market List, or the average of the closing bid prices for the five-day
period last quoted by an established quotation service for over-the-counter
securities, or if none of the above shall apply, the last price paid for
shares of the common stock by independent investors in a private placement
with the Corporation; provided, however, that such exercise price per share
shall not be lower than the par value per share or less than 50% of the
fair market value of the Common Stock until such time as the Company elects
to be subject to Rule 16b-3 as amended by SEC Rel. No. 33-28869.
3. All options shall be evidenced by a written agreement substantially in
such form as shall be approved by the Board of Directors or Committee,
containing terms and conditions consistent with the provisions of this
Plan.
6. EXERCISE OF OPTIONS
A. Exercise/Consideration
An option may be exercised in accordance with its terms by written notice of
intent to exercise the option, specifying the number of shares of Common Stock
with respect to which the option is then being exercised. The notice shall be
accompanied by payment in the form of cash or shares of the applicable Common
Stock (the "Tendered Shares") with a then current market value equal to the
exercise price of the shares to be purchased; provided, however, that such
Tendered Shares shall have been acquired by the Optionee more than six months
prior to the date of exercise (unless such requirement is waived in writing by
the Company). Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares then being
purchased, registered in the name of the Optionee or other person exercising
the option. If any law or applicable regulation of the Securities and Exchange
Commission or other body having jurisdiction in the premises shall require the
Company or the Director to take any action in connection with shares being
purchased upon exercise of the option, exercise of the option and delivery of
the certificate or certificates for such shares shall be postponed until
completion of the necessary action, which shall be taken at the Company's
expense.
A-3
<PAGE>
B. Tax Withholding
The Company shall have the right to deduct from payments of any kind
otherwise due to the Optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the Optionee may elect
to satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of the applicable Common
Stock already owned by the Optionee. The shares so delivered or withheld shall
have a fair market value equal to such withholding obligation. The fair market
value of the shares used to satisfy such withholding obligation shall be
determined by the Company as of the date that the amount of tax to be withheld
is to be determined. Notwithstanding the foregoing, no election to use shares
for the payment of withholding taxes shall be effective unless made in
compliance with any applicable requirements of Rule 16b-3.
7. TRANSFERABILITY
Options shall not be transferable, otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined in the Internal Revenue Code or Title I of the Employee Retirement
Income Security Act of 1974, or the rules thereunder (a "Qualified Domestic
Relations Order"). Options may be exercised during the life of the Optionee
only by the Optionee or a transferee pursuant to a Qualified Domestic Relations
Order.
8. LIMITATION OF RIGHTS TO CONTINUE AS A DIRECTOR
Neither the Plan, nor the quantity of shares subject to options granted under
the Plan, nor any other action taken pursuant to the Plan, shall constitute or
be evidence of any agreement or understanding, express or implied, that the
Company or any subsidiary or parent of the Company will retain a Director for
any period of time, or at any particular rate of compensation.
9. CHANGES IN COMMON STOCK
If the outstanding shares of Common Stock subject to an option are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all of
the assets of the Company or applicable subsidiary, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of Common Stock, or
other securities, an appropriate proportionate adjustment may be made (i) in
the maximum number or kind of shares reserved for issuance under the Plan and
(ii) in the number and kind of shares or securities subject to options then
outstanding or subsequently granted, and in any exercise price relating to
outstanding options. No fractional shares will be issued under the Plan on
account of any such adjustments.
10. LIMITATION OF RIGHTS IN OPTION STOCK
The Optionees shall have no rights as stockholders in respect of shares as to
which their options shall not have been exercised, certificates issued and
delivered and payment as herein provided made in full, and shall have no rights
with respect to such shares not expressly conferred by this Plan or the written
agreement evidencing options granted hereunder.
11. STOCK RESERVED
The Company shall at all times during the term of the options reserve and
keep available such number of shares of Common Stock as will be sufficient to
permit the exercise in full of all options granted under this Plan and shall
pay all other fees and expenses necessarily incurred by the Company in
connection therewith.
A-4
<PAGE>
12. SECURITIES LAWS RESTRICTIONS
A. Investment Representations
The Company may require any person to whom an option is granted, as a
condition of exercising such option, to give written assurances in substance
and form satisfactory to the Company to the effect that such person is
acquiring the Common Stock subject to the option for his or her own account for
investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Company deems necessary
or appropriate in order to comply with federal and applicable state securities
laws.
B. Compliance With Securities Laws
Each option shall be subject to the requirement that if, at any time, counsel
to the Company shall determine that the listing, registration or qualification
of the shares subject to such option upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental or
regulatory body, or that the disclosure of non-public information or the
satisfaction of any other condition is necessary as a condition of, or in
connection with, the issuance or purchase of shares thereunder, such option may
not be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall
have been effected or obtained on conditions acceptable to the Board of
Directors. Nothing herein shall be deemed to require the Company to apply for
or to obtain such listing, registration or qualification, or to satisfy such
condition.
13. CHANGE IN CONTROL
13.1 IMPACT OF EVENT
In the event of a "Change in Control" as defined in Section 13.2, the
following provisions shall apply, unless the agreement evidencing the Award
otherwise provides:
(a) Any stock options awarded under the Plan that were not previously
exercisable and vested shall become fully exercisable and vested.
(b) Shares purchased upon the exercise of options subject to restrictions
and to the extent not fully vested, shall become fully vested and all such
restrictions shall lapse so that shares issued pursuant to such options
shall be free of restrictions.
13.2 DEFINITION OF "CHANGE IN CONTROL"
"Change in Control" means any one of the following events: (i) when any
Person is or becomes the beneficial owner (as defined in Section 13(d) of the
Exchange Act and the rules and regulations thereunder), together with all
affiliates and associates (as such terms are used in Rule 12b-2 of the General
Rules and Regulations of the Exchange Act) of such Person, directly or
indirectly, of 25% or more of the outstanding Company Common Stock without the
prior approval of the Prior Directors of the Company, (ii) the failure of the
Prior Directors to constitute a majority of the Board of the Company at any
time within two years following any Electoral Event, or (iii) any other event
that the Prior Directors shall determine constitutes an effective change in the
control of the Company. As used in the preceding sentence, the following
capitalized terms shall have the respective meanings set forth below:
(a) "Person" shall include any natural person, any entity, any "affiliate"
of any such natural person or entity as such term is defined in Rule 405
under the Securities Act of 1933 and any "group" (within the meaning of
such term in Rule 13d-5 under the Exchange Act);
(b) "Prior Directors" shall mean the persons sitting on the Company's Board
of Directors immediately prior to any Electoral Event (or, if there has
been no Electoral Event, those persons sitting on the applicable Board of
Directors on the date of this Agreement) and any future director of the
Company who has been nominated or elected by a majority of the Prior
Directors who are then members of the Board of Directors of the Company;
and
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<PAGE>
(c) "Electoral Event" shall mean any contested election of Directors, or
any tender or exchange offer for the Company's Common Stock, not approved
by the Prior Directors, by any Person other than the Company or a
subsidiary of the Company.
14. AMENDMENT OF THE PLAN
The provisions of Sections 3 and 5 of the Plan shall not be amended more than
once every six months, other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act of 1974, or the rules
thereunder. Subject to the foregoing, the Board of Directors may at any time,
and from time to time, modify or amend the Plan in any respect, except that if
at any time the approval of the Stockholders of the Company is required as to
such modification or amendment under Rule 16b-3, the Board of Directors may not
effect such modification or amendment without such approval.
The termination or any modification or amendment of the Plan shall not,
without the consent of an Optionee, affect his or her rights under an option
previously granted to him or her. With the consent of the Optionees affected,
the Board of Directors may amend outstanding option agreements in a manner not
inconsistent with the Plan. The Board of Directors shall have the right to
amend or modify the terms and provisions of the Plan and of any outstanding
option to the extent necessary to ensure the qualification of the Plan under
Rule 16b-3.
15. EFFECTIVE DATE OF THE PLAN
The Plan shall become effective when adopted by the Board of Directors and
the stockholders of the Company, but no option granted under the Plan shall
become exercisable until six months after the Plan is approved by the
Stockholders of the Company.
16. NOTICE
Any written notice to the Company required by any of the provisions of the
Plan shall be addressed to the Secretary of the Company and shall become
effective when it is received.
17. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant hereto shall
be governed by the laws of the State of Delaware.
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<PAGE>
THERMO ELECTRON CORPORATION
P 81 Wyman Street . Post Office Box 9046 . Waltham, Massachusetts 02254
R
O This Proxy is Solicited on Behalf of the Board of Directors
X
Y The undersigned hereby appoints George N. Hatsopoulos, John N.
Hatsopoulos and Jonathan W. Painter, and each of them, proxies of the
undersigned, each with power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the
shares of common stock of Thermo Electron Corporation held of record by the
undersigned on April 6, 1995, at the Annual Meeting of the Stockholders to
be held at the Hyatt Regency Hotel, Hilton Head, South Carolina, on
Tuesday, May 23, 1995, at 5:00 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 Proposal 2 and as said proxies
deem advisable on such other matters as may properly come before the
meeting.
(IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE) SEE REVERSE
SIDE
<PAGE>
Please mark +
[X] votes as in +
this example. ++++++
The Board of Directors recommends a vote FOR Proposals 1 and 2.
1. Election of Directors.
Nominees: Elias P. Gyflopoulos, Frank Jungers, Frank E. Morris and Donald E.
Noble.
FOR WITHHELD
ALL [_] FROM ALL [_]
NOMINEES NOMINEES
For, except vote withheld from the following nominee(s):
[_]________________________________________
FOR AGAINST ABSTAIN
2. Approve an amendment to the Directors
Stock Option Plan to change the [_] [_] [_]
formula for the award of stock
options to the Company's outside
Directors.
MARK HERE
FOR ADDRESS [_]
CHANGE AND
NOTE AT LEFT
(This Proxy should be dated, signed by the shareholder(s) exactly
as his or her name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property both should sign.)
Signature:_____________________________________ Date: ____________________
Signature:_____________________________________ Date: ____________________
