<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission
Only (as Permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Thermo Electron Corporation
---------------------------
(Name of Registrant as Specified in Charter)
__________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $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:
[X] 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:
<PAGE>
[LOGO OF THERMO ELECTRON]
81 Wyman Street
P.O. Box 9046
Waltham, MA 02554-9046
April 19, 1996
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of the
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 30, 1995 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 three directors, your
Board of Directors is asking Stockholders to approve an amendment to the
Corporation's Amended and Restated Certificate of Incorporation to increase the
Corporation's authorized common stock from 175 million shares to 350 million
shares. On March 12, 1996, the Board of Directors declared a three-for-two
stock split that is contingent upon approval of the increase in the authorized
shares. Under the Corporation's By-Laws, the amendment to the Amended and
Restated Certificate of Incorporation requires the affirmative vote of two-
thirds of the issued and outstanding shares of common stock. 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 to our transfer agent, The First National Bank of
Boston, in the envelope provided, at your earliest convenience.
Yours very truly,
George N. Hatsopoulos
Chairman and President
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD.
<PAGE>
[LOGO OF THERMO ELECTRON]
81 Wyman Street
P.O. Box 9046
Waltham, MA 02554-9046
April 19, 1996
To the Holders of the Common Stock of
THERMO ELECTRON CORPORATION
NOTICE OF ANNUAL MEETING
The 1996 Annual Meeting of the Stockholders of Thermo Electron Corporation
("Thermo Electron" or the "Corporation") will be held on Tuesday, May 21, 1996,
at 5:00 p.m. at the Turnberry Isle Resort & Club, 19999 West Country Club Drive,
Aventura, Florida. The purposes of the Meeting are to consider and take action
upon the following matters:
1. Election of three Directors, comprising the class of directors to be
elected for a three-year term expiring in 1999.
2. A proposal recommended by the Board of Directors to amend the
Corporation's Amended and Restated Certificate of Incorporation to
increase the Corporation's authorized common stock, $1.00 par value
per share, from 175 million shares to 350 million shares.
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 1, 1996.
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 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
1996 Annual Meeting of the Stockholders (the "Meeting") to be held on Tuesday,
May 21, 1996, at 5:00 p.m. at the Turnberry Isle Resort & Club, 19999 West
Country Club Drive, Aventura, Florida, 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
24, 1996.
VOTING PROCEDURES
The Board of Directors intends to present to the Meeting the election of
three Directors, comprising the class of Directors to be elected for a three-
year term expiring in 1999, as well as one other matter: a proposal to amend the
Corporation's Amended and Restated Certificate of Incorporation to increase the
Corporation's authorized common stock, $1.00 par value ("Common Stock"), from
175 million shares to 350 million shares.
The representation in person or by proxy of a majority of the outstanding
shares of 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 increase the
authorized Common Stock, the affirmative vote of two thirds of the Corporation's
outstanding Common Stock 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.
With respect to the election of Directors, broker "non-votes" will not be
treated as shares present and entitled to vote on a voting matter and will have
no effect on the outcome of the vote. Broker "non-votes" on the proposal to
increase the authorized Common Stock will have the effect of a vote against the
proposal. 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 1, 1996 consisted of 91,365,515
shares of Common Stock. Only Stockholders of record at the close of business on
April 1, 1996 are entitled to vote at the Meeting. Each share is entitled to one
vote.
<PAGE>
- PROPOSAL 1 -
ELECTION OF DIRECTORS
Three Directors are to be elected at the Meeting, and Dr. George N.
Hatsopoulos, Mr. Robert A. McCabe and Ms. Hutham S. Olayan are listed below as
nominees for the three-year term expiring at the 1999 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.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Nominees for Directors Whose Term of Office will Expire in 1999
- --------------------------------------------------------------------------------
<S> <C>
George N. Hatsopoulos Dr. Hatsopoulos, 69, 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., ThermoQuest Corporation and ThermoTrex
Corporation. Dr. Hatsopoulos is the brother of Mr.
John N. Hatsopoulos, an Executive Vice President
and the Chief Financial Officer of the Corporation.
- --------------------------------------------------------------------------------
Robert A. McCabe Mr. McCabe, 61, 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, 42, 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, a member of the Olayan Group
engaged in private investments, from 1985 until
1994.
- --------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Incumbent Directors Whose Term of Office Will Expire in 1998
- --------------------------------------------------------------------------------
<S> <C>
Elias P. Gyftopoulos Dr. Gyftopoulos, 68, 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., Thermo Instrument Systems
Inc., Thermo Remediation Inc., Thermo Voltek
Corp., ThermoLase Corporation and ThermoSpectra
Corporation.
- --------------------------------------------------------------------------------
Frank Jungers Mr. Jungers, 69, 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 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,
Donaldson, Lufkin & Jenrette, Dual Drilling
Company, Georgia-Pacific Corporation, Pacific
Rehabilitation and Sports Medicine, Inc., Star
Technologies Inc., Thermo Ecotek Corporation,
Thermo Instrument Systems Inc. and ThermoQuest
Corporation.
- --------------------------------------------------------------------------------
Frank E. Morris Dr. Morris, 72, 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. Dr. Morris is also a director
of Thermo Remediation Inc.
- --------------------------------------------------------------------------------
Donald E. Noble Mr. Noble, 81, 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, Thermo Sentron Inc. and Thermo
TerraTech Inc.
<CAPTION>
- --------------------------------------------------------------------------------
Incumbent Directors Whose Term of Office Will Expire in 1997
- --------------------------------------------------------------------------------
<S> <C>
John M. Albertine Dr. Albertine, 51, 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, LLC, 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 992, 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.
- --------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Peter O. Crisp Mr. Crisp, 63, 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, 69, 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 Inc., 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 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.
- --------------------------------------------------------------------------------
</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. Jungers (Chairman), Dr. Albertine,
Mr. McCabe and Dr. Morris. The Audit Committee reviews the scope of the audit
with the Corporation's independent public accountants and meets with them for
the purpose of reviewing the results of the audit subsequent to its completion.
The Human Resources Committee consists solely of outside Directors and its
present members are Mr. Noble (Chairman), Dr. Gyftopoulos, Mr. Jungers, Ms.
Olayan and Mr. Wellington. The Human Resources Committee reviews corporate
organization, reviews the performance of senior members of management,
recommends executive compensation and administers the Corporation's stock option
and other stock-based compensation 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 five
times during fiscal 1995. Each Director attended at least 75% of all meetings of
the Board of Directors and Committees on which he or she served held during
fiscal 1995, except for Mr. Crisp who attended 74% of such meetings.
Compensation of Directors
Cash Compensation. Directors who are not employees of the Corporation or
any companies affiliated with Thermo Electron ("outside directors") 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. 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 a Director.
Directors are also reimbursed for out-of-pocket expenses and in some instances
for travel time incurred in attending such meetings.
Deferred Compensation Plan for Directors. Under the Corporation's
Deferred Compensation Plan for Directors (the "Deferred Compensation Plan"), a
Director has the right to defer receipt of his cash fees until he ceases to
serve as a Director, dies or retires from his principal occupation. In the event
of a change in control or proposed change in control of the Corporation that is
not approved by the Board of Directors, deferred amounts become payable
immediately. Either of the following is deemed to be a change of control: (a)
the occurrence, without the prior approval of the Board of Directors, of the
acquisition, directly or indirectly, by any person of 50%
4
<PAGE>
or more of the 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 at the end of each quarter 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 408,907 shares of
Common Stock has been reserved for issuance under the Deferred Compensation
Plan. As of January 1, 1996, deferred units equal to 53,618.64 shares of Common
Stock were accumulated under the Deferred Compensation Plan.
Directors Stock Option Plan. In 1993, the Corporation adopted a directors
stock option plan (the "Directors Plan"), which was amended in 1995. The
Directors Plan provides for the grant of stock options to purchase shares of
common stock of the Corporation and certain of its majority-owned subsidiaries
to outside Directors as additional compensation for their service as Directors.
Under the Directors Plan, outside Directors are automatically granted options to
purchase 1,000 shares of Common Stock annually. In addition, the Directors Plan
provides for the automatic grant of options to purchase up to 1,500 shares of
the common stock of certain of the Corporation's publicly traded, majority-owned
subsidiaries and of each majority-owned subsidiary of the Corporation that is
subsequently "spun out" to outside investors. Pursuant to the Directors Plan,
outside Directors receive an annual grant of options to purchase 1,000 shares of
Common Stock at the close of business on the date of each Annual Meeting of the
Stockholders of the Corporation. Options evidencing annual grants may be
exercised at any time from and after the six-month anniversary of the grant date
of the option and prior to the expiration of the option on the third anniversary
of the grant date. Shares acquired upon exercise of the options are subject to
repurchase by the Corporation at the exercise price if the recipient ceases to
serve as a Director of the Corporation or any other Thermo Electron company
prior to the first anniversary of the grant date.
In addition, under the Directors Plan, outside Directors are automatically
granted options to purchase shares of common stock of certain of the
Corporation's publicly traded, majority-owned subsidiaries as described in the
Directors Plan and of each majority-owned subsidiary of the Corporation that is
subsequently "spun out" to outside investors. Outside Directors receive options
to purchase 1,500 shares of common stock for majority-owned subsidiaries that
are directly owned by the Corporation and 1,000 shares of common stock for
majority-owned subsidiaries that are indirectly owned by the Corporation through
one or more of its other majority-owned subsidiaries. The grant of options with
respect to the common stock of subsidiaries that are spun out occurs on the
close of business on the date of the first Annual Meeting of the Stockholders
next following the subsidiary's spinout, which is the first to occur of either
an initial public offering of the subsidiary's common stock or a sale of such
stock to third parties in an arms-length transaction. The options granted vest
and become exercisable on the fourth anniversary of the date of grant, unless
prior to such date the subsidiary's common stock is registered under Section 12
of the Securities Exchange Act of 1934, as amended ("Section 12 Registration").
In the event that the effective date of Section 12 Registration occurs before
the fourth anniversary of the grant date, 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 other Thermo Electron company. In the event
of Section 12 Registration, the restrictions and repurchase rights shall lapse
or be deemed to lapse at the rate of 25% per year, starting with the first
anniversary of the grant date. These options expire after five years. At this
Annual Meeting of the Stockholders, each outside Director will be granted
options to purchase 1,500 shares of common stock of Thermo TerraTech Inc. and
1,000 shares of common stock of each of (i) Trex Medical Corporation, a
subsidiary of ThermoTrex Corporation that was spun out in November 1995, (ii)
ThermoQuest Corporation, a subsidiary of Thermo Instrument Systems Inc. that was
spun out in March 1996 and (iii) Thermo Sentron Inc., a subsidiary of Thermedics
Inc. that was spun out in March 1996.
The exercise price for options granted under the Directors Plan is the
average of the closing prices of the common stock as reported on the New York or
American Stock Exchange (or other principal market on which the common stock is
then traded) for the five trading days preceding and including the date of
grant, or, if the shares are not then traded, at the last price per share paid
by third parties in an arms-length transaction prior to the option grant. An
aggregate of 450,000 shares of Common Stock has been reserved for issuance under
the Directors Plan.
5
<PAGE>
STOCK OWNERSHIP
The following table sets forth, as of January 1, 1996, 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 TerraTech 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 TerraTech Inc.; (iv) ThermoLase
Corporation, a publicly traded, majority-owned subsidiary of ThermoTrex
Corporation and Trex Medical Corporation, a privately held, majority-owned
subsidiary of ThermoTrex Corporation; (v) ThermoLyte Corporation, a privately
held, majority-owned subsidiary of Thermo Power Corporation; and (vi)
ThermoSpectra Corporation, a publicly traded, majority-owned subsidiary of
Thermo Instrument Systems Inc. and Thermo BioAnalysis 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. As of
January 1, 1996, no Director or executive officer beneficially owned any
shares of any of the following companies: ThermoQuest Corporation, a publicly
traded, majority-owned subsidiary of Thermo Instrument Systems Inc.; Thermo
Optek Corporation, a privately held, majority-owned subsidiary of Thermo
Instrument Systems Inc.; and Thermo Sentron Inc., a publicly traded, majority-
owned subsidiary of Thermedics Inc.
<TABLE>
<CAPTION>
PUBLICLY-HELD SUBSIDIARIES
------------------------------------------------------------------------------------------------------------
THERMO THERMO THERMO THERMO
ELECTRON THERMEDICS ECOTEK THERMO INSTRUMENT THERMO TERRATECH THERMOTREX
NAME (1) CORP. (2) INC. (3) CORPORATION (4) FIBERTEK INC. (5) SYSTEMS INC. (6) POWER CORP. (7) INC. (8) CORP. (9)
-------- --------- ---------- --------------- ----------------- ---------------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John M.
Albertine....... 24,710 4,500 1,500 4,500 1,875 3,000 0 4,500
Peter O. Crisp.. 64,434 44,653 3,461 4,500 17,693 32,151 2,160 41,897
Elias P.
Gyftopoulos..... 46,380 4,500 1,500 4,500 47,018 3,000 0 4,500
George N.
Hatsopoulos..... 2,329,278 65,369 36,024 153,529 143,300 63,482 57,473 48,746
John N.
Hatsopoulos..... 478,355 76,392 38,040 145,873 118,913 40,753 60,259 33,194
Frank Jungers... 162,836 9,050 26,900 5,250 52,374 3,000 0 11,000
Robert A.
McCabe.......... 30,677 6,998 1,500 4,500 39,804 11,209 2,160 10,000
Frank E. Morris. 14,128 4,500 1,500 4,500 1,875 3,000 0 4,500
Donald E. Noble. 34,832 14,173 1,500 75,599 54,688 18,485 46,405 4,500
Hutham S.
Olayan.......... 14,420 4,500 1,500 4,500 1,875 3,000 0 4,500
William A.
Rainville....... 201,047 0 4,000 337,809 0 0 60,000 2,700
Arvin H. Smith.. 363,578 91,164 4,000 60,000 431,653 7,969 36,950 2,700
Roger D.
Wellington...... 21,210 4,500 1,500 10,500 5,625 6,425 1,000 4,500
John W. Wood
Jr ............. 154,674 188,488 3,000 6,000 416 0 206 900
All Directors
and current
executive
officers as a
group
(17 persons).... 4,440,240 568,354 186,186 935,307 987,790 290,709 302,163 231,891
<CAPTION>
PRIVATELY-HELD SECURITIES
------------------------------------------------------------- --------------------------------------------------
THERMO THERMO THERMO THERMO
CARDIOSYSTEMS VOLTEK REMEDIATION THEMOSPECTRA THERMOLASE BIOANALYSIS THERMOLIFE TREX MEDICAL
NAME (1) INC. (10) CORP. (11) INC. (12) CORP. (14) CORP. (13) CORPORATION (15) CORPORATION (16) CORPORATION (17)
-------- ------------- ---------- ----------- ------------ ---------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John M.
Albertine....... 7,500 1,000 4,500 1,000 2,000 0 0 0
Peter O. Crisp.. 16,500 2,500 4,500 1,000 57,443 0 0 10,000
Elias P.
Gyftopoulos..... 9,000 1,500 27,600 20,000 61,400 0 0 0
George N.
Hatsopoulos..... 7,733 0 7,500 20,000 46,720 0 0 0
John N.
Hatsopoulos..... 1,288 7,749 40,182 20,000 81,902 0 0 0
Frank Jungers... 7,500 4,000 15,450 5,500 3,300 4,000 1,500 2,000
Robert A.
McCabe.......... 7,500 1,000 4,500 1,500 4,100 0 0 5,000
Frank E. Morris. 7,500 1,000 25,938 1,000 2,000 0 0 0
Donald E. Noble. 7,500 1,000 10,500 1,000 6,000 2,000 1,000 0
Hutham S.
Olayan.......... 7,500 1,000 4,500 1,000 2,000 0 0 0
William A.
Rainville....... 0 0 24,000 10,000 10,000 0 0 0
Arvin H. Smith.. 20,000 0 2,400 20,000 10,000 9,000 0 0
Roger D.
Wellington...... 7,500 1,000 4,500 1,000 2,000 0 0 0
John W. Wood
Jr ............. 43,951 60,648 0 5,000 10,000 0 0 0
All Directors
and current
executive
officers as a
group
(17 persons).... 173,808 82,397 211,686 127,500 464,346 17,500 5,000 19,500
</TABLE>
- ---------
(1) Except as reflected in the footnotes to this table, shares of the Common
Stock of the Corporation and of the common stock of each of the
Corporation's subsidiaries beneficially owned consist of shares owned by
the indicated person or by that person for the benefit of minor children,
and all share ownership includes sole voting and investment power.
(2) The number of shares of Common Stock reported in the table reflects a
three-for-two split of such stock effected in May 1995 in the form of a
50% stock dividend, but does not reflect a three-for-two split of such
stock to be effected on June 5, 1996 to shareholders of record on May 22,
1996 (assuming approval by the Stockholders of the increase in the
Corporation's authorized shares as described in Proposal 2). Shares of the
Common Stock of the Corporation beneficially owned by Dr. Albertine, Mr.
Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr.
Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr.
Smith, Mr. Wellington, Mr. Wood and all Directors and current executive
officers as a group include 5,250, 5,250, 5,250, 1,102,200, 297,880,
5,250, 5,250, 5,250, 5,250, 5,250, 136,175, 182,775, 5,250, 133,998 and
2,055,088 shares, respectively, that such person or group have the right
to acquire within 60 days of January 1, 1996 through the exercise of stock
options. Shares beneficially owned by Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Smith, Mr. Wood and all Directors and current executive
officers as a group include 1,481, 1,225, 1,081, 1,052 and 9,256 full
shares, respectively, allocated to their respective accounts maintained
pursuant to the Corporation's employee stock ownership plan, of which the
trustees, who have investment power over its assets, were as of January 1,
1996 executive officers of the Corporation (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
current executive officers as a group include 19,460, 29,421, 53,618,
23,150, 6,601, 27,305, 9,170, 14,273 and 182,998 shares, respectively,
allocated to accounts maintained pursuant to
(Footnotes continued on following page)
6
<PAGE>
the Corporation's Deferred Compensation Plan for Directors. Shares
beneficially owned by Dr. G. Hatsopoulos include 59,734 shares held by Dr.
Hatsopoulos' spouse, 112,500 shares held by a QTIP trust (the "Hatsopoulos
QTIP Trust") of which Dr. G. Hatsopoulos' spouse is a trustee, 870 shares
held in a trust of which Dr. G. Hatsopoulos is the trustee and 26,625
shares held by a family trust of which Dr. G. Hatsopoulos' spouse is the
trustee. Shares beneficially owned by Mr. J. Hatsopoulos include 112,500
shares held by the Hatsopoulos QTIP Trust of which Mr. J. Hatsopoulos is a
trustee. Shares beneficially owned by Mr. Jungers include 3,000 shares held
by Mr. Jungers' spouse. Shares beneficially owned by Mr. Morris include
2,277 shares held by Mr. Morris' spouse. Shares beneficially owned by Ms.
Olayan do not include 3,266,400 shares 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. Except for Dr. G.
Hatsopoulos, who beneficially owned 2.6% of the Common Stock outstanding as
of January 1, 1996, no Director or executive officer beneficially owned
more than 1% of the Common Stock outstanding as of such date; all Directors
and current executive officers as a group beneficially owned 4.8% of the
Common Stock outstanding as of January 1, 1996.
(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. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan,
Mr. Smith, Mr. Wellington, Mr. Wood and all Directors and current executive
officers as a group include 4,500, 8,050, 4,500, 50,000, 50,000, 4,500,
4,500, 4,500, 4,500, 4,500, 82,500, 4,500, 120,100 and 375,650 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of January 1, 1996, through the exercise of stock
options. Shares beneficially owned by Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Smith, Mr. Wood and all Directors and current executive
officers as a group include 1,465, 1,476, 1,319, 1,218 and 9,787 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 current executive officers as a group include 6,308
shares allocated to Mr. Crisp's account maintained pursuant to that
corporation's deferred compensation plan for directors. Shares beneficially
owned by Dr. G. Hatsopoulos include 562 shares held by Dr. G. Hatsopoulos'
spouse. Shares beneficially owned by Mr. Jungers include 1,550 shares held
by Mr. Jungers' spouse. No Director or executive officer beneficially
owned more than 1% of the common stock of Thermedics Inc. outstanding as of
January 1, 1996; all Directors and current executive officers as a group
beneficially owned 1.7% 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. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan,
Mr. Rainville, Mr. Smith, Mr. Wellington, Mr. Wood and all Directors and
current executive officers as a group include 1,500, 1,500, 1,500, 36,000,
36,000, 24,000, 1,500, 1,500, 1,500, 1,500, 4,000, 4,000, 1,500, 3,000 and
178,000 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of January 1, 1996, through the
exercise of stock options. Shares beneficially owned by Dr. G. Hatsopoulos
include 24 shares held in trusts of which Dr. G. Hatsopoulos is a trustee.
Shares beneficially owned by Mr. Jungers include 200 shares held by Mr.
Jungers' spouse. No Director or executive officer beneficially owned more
than 1% of the common stock of Thermo Ecotek Corporation outstanding as of
January 1, 1996; all Directors and current executive officers as a group
beneficially owned 1.2% of the Thermo Ecotek Corporation common stock
outstanding as of such date.
(5) The number of shares of common stock of Thermo Fibertek Inc. reported in
the table reflects a three-for-two split of such stock effected in
September 1995 in the form of a 50% stock dividend. 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.
Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr.
Smith, Mr. Wellington, Mr. Wood and all Directors and current executive
officers as a group include 4,500, 4,500, 4,500, 117,273, 126,000, 4,500,
4,500, 4,500 63,900, 4,500, 330,000, 60,000, 4,500, 6,000 and 847,473
shares, respectively, that such person or members of the group have the
right to acquire within 60 days of January 1, 1996, through the exercise of
stock options. Shares beneficially owned by Mr. Noble and all Directors and
current executive officers as a group include 3,242 shares allocated to Mr.
Noble's account maintained pursuant to that corporation's deferred
compensation plan for directors. Shares beneficially owned by Mr. Jungers
include 750 shares held by Mr. Jungers' spouse. No Director or executive
officer beneficially owned more than 1% of the Thermo Fibertek Inc. common
stock outstanding as of January 1, 1996; all Directors and current
executive officers as a group beneficially owned 2.3% of the Thermo
Fibertek Inc. common stock outstanding as of such date.
(6) The number of shares of common stock of Thermo Instrument Systems Inc.
reported in the table reflects a five-for-four split of such stock effected
in December 1995 in the form of a 25% stock dividend. Shares of the common
stock of Thermo Instrument Systems Inc. beneficially owned by Dr.
Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan,
Mr. Smith, Mr. Wellington and all Directors and current executive officers
as a group include 1,875, 1,875, 14,465, 93,750, 93,750, 13,809, 10,995,
1,875, 6,093, 1,875, 234,375, 1,875 and 496,299 shares, respectively, that
such person or members of the group have the right to acquire within 60
days of January 1, 1996, through the exercise of stock options. Shares
beneficially owned by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Smith,
Mr. Wood and all Directors and current executive officers as a group
include 515, 515, 516, 416 and 3,428 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 current
executive officers as a group include 12,006, 7,126 and 19,132 shares,
respectively, allocated to accounts maintained pursuant to that
corporation's deferred compensation plan for directors. Shares beneficially
owned by Dr. G. Hatsopoulos include 21,368 shares held by Dr. Hatsopoulos'
spouse. Shares beneficially owned by Mr. Jungers include 543 shares held
by Mr. Jungers' spouse. No Director or executive officer beneficially
owned more than 1% of the Thermo Instrument Systems Inc. common stock
outstanding as of January 1, 1996; all Directors and current executive
officers as a group beneficially owned 1.1% 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. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan,
Mr. Wellington and all Directors and current executive officers as a group
include 3,000, 5,600, 3,000, 40,000, 40,000, 3,000, 3,000, 3,000, 6,200,
3,000, 3,000 and 161,800 shares, respectively, that such person or members
of the group have the right to acquire within 60 days of January 1, 1996,
through the exercise of stock options. Shares beneficially owned by Mr.
Crisp, Mr. Noble and all Directors and current executive officers as a
group include 8,458, 4,860 and 13, 318 shares, respectively, allocated to
their respective accounts maintained pursuant to that corporation's
deferred compensation plan for directors. Shares beneficially owned by Dr.
G. Hatsopoulos include 114 shares held by Dr. G. Hatsopoulos' spouse and
2,000 shares each held by two trusts of which Dr. G. Hatsopoulos' spouse is
the trustee. No Director or executive officer beneficially owned more than
1% of the Thermo Power Corporation common stock outstanding as of January
1, 1996; all Directors and current executive officers as a group
beneficially owned 2.3% of the Thermo Power Corporation common stock
outstanding as of such date.
7
<PAGE>
(8) Shares of the common stock of Thermo TerraTech Inc. beneficially owned by
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Noble, Mr. Rainville, Mr. Smith
and all Directors and current executive officers as a group include 40,000,
40,000, 6,200, 60,000, 35,000 and 188,200 shares, respectively, that such
person or members of the group have the right to acquire within 60 days of
January 1, 1996, through the exercise of stock options. Shares beneficially
owned by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Smith, Mr. Wood and
all Directors and current executive officers as a group include 214, 217,
218, 206 and 1,502 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 current executive officers as a
group include 17,165 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
current executive officers as a group include 12,500 shares that Mr. J.
Hatsopoulos has the right to acquire within 60 days of January 1, 1996,
through the exercise of stock purchase warrants acquired in connection with
private placements of securities by Thermo TerraTech Inc. and one or more
of that corporation's subsidiaries on terms identical to terms granted to
outside investors. Shares beneficially owned by Dr. G. Hatsopoulos include
93 shares held by Dr. G. Hatsopoulos' spouse and 2,000 shares held in a
trust of which Dr. G. Hatsopoulos is a trustee. No Director or executive
officer beneficially owned more than 1% of the Thermo TerraTech Inc. common
stock outstanding as of January 1, 1996; all Directors and current
executive officers as a group beneficially owned 1.7% of the Thermo
TerraTech 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. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan,
Mr. Rainville, Mr. Smith, Mr. Wellington, Mr. Wood and all Directors and
current executive officers as a group include 4,500, 26,800, 4,500, 36,870,
24,000, 4,500, 4,500, 4,500, 4,500, 4,500, 2,700, 2,700, 4,500, 900 and
173,490 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of January 1, 1996, through the
exercise of stock options. Shares beneficially owned by Mr. Crisp and all
Directors and current executive officers as a group include 1,653 shares
allocated to Mr. Crisp's account maintained pursuant to that corporation's
deferred compensation plan for directors. Shares beneficially owned by Dr.
G. Hatsopoulos include 160 shares held by Dr. G. Hatsopoulos' spouse. No
Director or executive officer beneficially owned more than 1% of the
ThermoTrex Corporation common stock outstanding as of January 1, 1996; all
Directors and current executive officers as a group beneficially owned 1.2%
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. Jungers, Mr. McCabe, Dr.
Morris, Mr. Noble, Ms. Olayan, Mr. Smith, Mr. Wellington, Mr. Wood and all
Directors and current executive officers as a group include 7,500, 16,500,
9,000, 7,500, 7,500, 7,500, 7,500, 7,500, 20,000, 7,500, 39,483, and
147,483 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of January 1, 1996, 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 1,
1996.
(11) Shares of the common stock of Thermo Voltek Corp. beneficially owned by Dr.
Albertine, Mr. Crisp, Dr. Gyftopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr.
McCabe, Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Wellington, Mr. Wood and all
Directors and current executive officers as a group include 1,000, 2,500,
1,500, 4,999, 1,000, 1,000, 1,000, 1,000, 1,000, 1,000, 56,649 and 72,648
shares, respectively, that such persons or members of the group have the
right to acquire within 60 days of January 1, 1996, 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 1, 1996.
(12) 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. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan,
Mr. Rainville, Mr. Smith, Mr. Wellington and all Directors and current
executive officers as a group include 4,500, 4,500, 27,600, 7,500, 22,500,
4,500, 4,500, 24,450, 6,000, 4,500, 22,500, 2,400, 4,500 and 159,750
shares, respectively, that such person or members of the group have the
right to acquire within 60 days of January 1, 1996, through the exercise of
stock options. Shares beneficially owned by Dr. Morris and all Directors
and current executive officers as a group include 1,488 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 1, 1996; all Directors and current executive
officers as a group beneficially owned 1.7% of the Thermo Remediation Inc.
common stock outstanding as of such date.
(13) The number of shares of common stock of ThermoLase Corporation reported in
the table reflects a two-for-one split of such stock effected in May 1995
in the form of a 100% stock dividend. Shares of the common stock of
ThermoLase Corporation beneficially owned by Dr. Albertine, Mr. Crisp, Dr.
Gyftopoulos, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr.
McCabe, Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all Directors and current executive officers as a
group include 2,000, 22,508, 61,400, 43,200, 68,200, 2,000, 2,000, 2,000,
2,000, 2,000, 10,000, 10,000, 2,000, 10,000 and 359,508 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of January 1, 1996, through the exercise of stock
options. Shares beneficially owned by Mr. Crisp do not include 11,446
shares held by Mr. Crisp's spouse, as to which shares Mr. Crisp disclaims
beneficial ownership. Shares beneficially owned by Dr. G. Hatsopoulos
include 32 shares held by Dr. G. Hatsopoulos' spouse. No Director or
executive officer beneficially owned more than 1% of the ThermoLase
Corporation common stock outstanding as of January 1, 1996; all Directors
and current executive officers as a group beneficially owned 1.1% of the
ThermoLase Corporation common stock outstanding as of such date.
(14) Shares of the common stock of ThermoSpectra Corporation beneficially owned
by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan,
Mr. Rainville, Mr. Smith, Mr. Wellington, Mr. Wood and all Directors and
current executive officers as a group include 1,000, 1,000, 20,000, 20,000,
20,000, 1,500, 1,500, 1,000, 1,000, 1,000, 10,000, 20,000, 1,000, 3,000 and
119,500 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of January 1, 1996, through the
exercise of stock options. Shares beneficially owned by Mr. Crisp do not
include 160,000 shares owned in the aggregate by entities affiliated with
Venrock Associates, of which Mr. Crisp is both a general and limited
partner and for which Mr. Crisp disclaims beneficial ownership. No
director or executive officer beneficially owned more than 1% of the common
stock of ThermoSpectra Corporation outstanding as of January 1, 1996; all
Directors and current executive officers as a group beneficially owned 1.0%
of the ThermoSpectra Corporation common stock outstanding as of such date.
(15) The Directors and executive officers of Thermo Electron did not
individually or as a group beneficially own more than 1% of the Thermo
BioAnalysis Corporation common stock outstanding as of January 1, 1996.
8
<PAGE>
(16) Shares beneficially owned by Mr. Crisp do not include 100,000 shares owned
in the aggregate by entities affiliated with Venrock Associates, of which
Mr. Crisp is both a general and limited partner and for which Mr. Crisp
disclaims beneficial ownership. Shares beneficially owned by Ms. Olayan do
not include 25,000 shares owned by Crescent International Holdings Limited,
a member of the Olayan Group. Crescent International Holdings Limited is
indirectly controlled by Suliman S. Olayan, Ms. Olayan's father. Ms.
Olayan disclaims beneficial ownership of the shares owned by Crescent
International Holdings Limited. The Directors and executive officers of
Thermo Electron did not individually or as a group beneficially own more
than 1% of the ThermoLyte Corporation common stock outstanding as of
January 1, 1996.
(17) Shares beneficially owned by Ms. Olayan do not include 100,000 shares owned
by Crescent International Holdings Limited, a member of the Olayan Group.
Crescent International Holdings Limited is indirectly controlled by Suliman
S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims beneficial ownership
of the shares owned by Crescent International Holdings Limited. The
Directors and executive officers of Thermo Electron did not individually or
as a group beneficially own more than 1% of the Trex Medical Corporation
common stock outstanding as of January 1, 1996.
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 1995, except in the following instance. The Form 4 for March 1995
for Mr. Arvin H. Smith, an executive vice president of the Corporation, was
amended in May 1995 to include the exercise in February 1995 of a stock option
to purchase 3,000 shares of Common Stock, which was an exempt transaction but
reportable on the first Form 4 filed after the transaction.
EXECUTIVE COMPENSATION
NOTE: All share amounts reported below have, in all cases, been adjusted as
applicable to reflect three-for-two stock splits effected in May 1995 and in
September 1995 with respect to the Common Stock and the common stock of Thermo
Fibertek Inc., respectively, a two-for-one stock split effected in May 1995 with
respect to the common stock of ThermoLase Corporation and a five-for-four stock
split effected in December 1995 with respect to the common stock of Thermo
Instrument Systems Inc.
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.
9
<PAGE>
Summary Compensation Table
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
------------ ------------
Securities Underlying
Name and Fiscal Options (No. of Shares All other
Principal Position Year Salary Bonus and Company)(1)(2) Compensation(3)
- --------------------------- ------ -------- -------- ---------------------- ---------------
<S> <C> <C> <C> <C> <C>
George N. Hatsopoulos 1995 $485,000 $550,000 -- $ 6,750
President and Chief Executive 1994 $450,000 $500,000 20,000 (THS) $ 6,750
Officer 1993 $417,000 $450,000 645,000 (TMO) $10,118
50,000 (TMD)
10,000 (TCK)
30,000 (TFT)
93,750 (THI)
40,000 (THP)
7,500 (THN)
40,000 (TTT)
72,000 (TLZ)
30,000 (TKN)
- ------------------------------------------------------------------------------------------------------------------------------------
John N. Hatsopoulos 1995 $300,000 $500,000 5,200 (TMO) $ 6,750
Executive Vice President 25,000 (TLZ)
and Chief Financial Officer 96,600 (TMO) $ 6,750
1994 $280,000 $450,000 20,000 (THS)
132,900 (TMO) $10,118
50,000 (TMD)
1993 $256,000 $375,000 10,000 (TCK)
30,000 (TFT)
93,750 (THI)
40,000 (THP)
22,500 (THN)
40,000 (TTT)
72,000 (TLZ)
30,000 (TKN)
- ------------------------------------------------------------------------------------------------------------------------------
Arvin H. Smith 1995 $262,000 $256,200 6,000 (TMO) $ 6,750
Executive Vice President 10,000 (TLZ)
6,000 (TLT)
9,000 (TMO) $ 6,750
20,000 (THS)
1994 $255,000 $280,500 46,275 (TMO) $10,023
30,000 (TMD)
234,375 (THI)
1993 $240,000 $304,000 2,400 (THN)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
------------ ------------
Securities Underlying
Name and Fiscal Options (No. of Shares All other
Principal Position Year Salary Bonus and Company)(1)(2) Compensation(3)
- --------------------------- ------ -------- -------- ---------------------- ---------------
<S> <C> <C> <C> <C> <C>
William A. Rainville 1995 $195,000 $220,000 4,100 (TMO) $15,870
Senior Vice President 6,000 (TBA)
10,000 (TLZ)
6,000 (TLT)
1994 $182,000 $173,000 64,500 (TMO) $16,269
10,000 (THS)
1993 $170,800 $105,000 34,500 (TMO) $14,717
60,000 (TFT)
22,500 (THN)
60,000 (TTT)
- ------------------------------------------------------------------------------------------------------------------------------
John W. Wood Jr. (4) 1995 $180,000 $160,000 26,900 (TMO) $ 6,750
Senior Vice President 4,900 (TMD)
1,000 (TBA)
2,300 (TCA)
900 (TVL)
10,000 (TLZ)
1,000 (TLT)
- ------------------------------------------------------------------------------------------------------------------------------
</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 BioAnalysis Corporation (designated in the table as TBA),
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), ThermoLyte Corporation (designated in the table as TLT),
Thermo Power Corporation (designated in the table as THP), Thermo TerraTech
Inc. (designated in the table as TTT), Thermo Remediation Inc. (designated
in the table as THN), ThermoSpectra Corporation (designated in the table as
THS) and ThermoTrex Corporation (designated in the table as TKN).
(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, 1995, the amount and value of each
executive officer's restricted stock holdings were as follows: Dr. G.
Hatsopoulos - 13,500 shares valued at $702,000; Mr. Smith - 6,750 shares
valued at $351,000; Mr. Wood - 1,350 shares valued at $70,200; and Mr.
Rainville - 1,350 shares valued at $70,200.
(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.
(4) Mr. Wood did not meet the definition of "highly compensated" within the
meaning of the Securities and Exchange Commission's executive compensation
disclosure rules in fiscal 1993 and 1994.
11
<PAGE>
Stock Options Granted During Fiscal 1995
The following table sets forth information concerning individual grants of stock
options made during fiscal 1995 to the Corporation's chief executive officer and
the other named executive officers. During fiscal 1995, no options were granted
to the Corporation's chief executive officer, Dr. G. Hatsopoulos. It has not
been the Corporation's policy in the past to grant stock appreciation rights,
and no such rights were granted during fiscal 1995.
<TABLE>
<CAPTION>
Option Grants in Fiscal 1995
- ----------------------------------------------------------------------------------------------------------------------------------
Percent of Potential Realizable
Number of Total Value at Assumed
Securities Options Annual Rates of
Underlying Granted to Exercise Stock Price
Options Employees in Price Per Expiration Appreciation for
Name Granted (1) Fiscal Year Share Date Option Term
- --------------------------- ----------- ------------- -------- ---------- -----------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
John N. Hatsopoulos 5,200 (TMO) 0.6% $37.27 5/23/98 $ 30,524 $ 64,168
25,000 (TLZ) 2.5% $22.75 11/28/07 $452,750 $1,216,250
- ----------------------------------------------------------------------------------------------------------------------------------
Arvin H. Smith 6,000 (TMO) 0.7% $37.27 5/23/98 $ 35,220 $ 74,040
10,000 (TLZ) 1.0% $22.75 11/28/07 $181,100 $ 486,500
6,000 (TLT) 20.3% $10.00 9/22/07 $ 47,760 $ 128,280
- ----------------------------------------------------------------------------------------------------------------------------------
William A. Rainville 4,100 (TMO) 0.5% $37.27 5/23/98 $ 24,067 $ 50,594
6,000 (TBA) 7.7% $10.00 9/22/07 $ 47,760 $ 128,280
10,000 (TLZ) 1.0% $22.75 11/28/07 $181,100 $ 486,500
6,000 (TLT) 20.3% $10.00 9/22/07 $ 47,760 $ 128,280
- ----------------------------------------------------------------------------------------------------------------------------------
John W. Wood Jr. 1,900 (TMO) 0.2% $37.27 5/23/98 $ 11,153 $ 23,446
25,000 (TMO) 2.9% $48.90 11/28/07 $973,000 $2,614,250
4,900 (TMD) 17.7% $15.52 3/14/02 $ 30,968 $ 72,128
1,000 (TBA) 1.3% $10.00 9/22/05 $ 6,290 $ 15,940
2,300 (TCA) 2.9% $26.10 3/20/02 $ 24,449 $ 56,948
10,000 (TLZ) 1.0% $22.75 11/28/07 $181,100 $ 486,500
1,000 (TLT) 3.4% $10.00 9/22/05 $ 6,290 $ 15,940
900 (TVL) 0.8% $11.00 3/20/02 $ 4,032 $ 9,396
- ----------------------------------------------------------------------------------------------------------------------------------
</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
Thermedics Inc. (designated in the table as TMD), ThermoLase Corporation
(designated in the table as TLZ), ThermoLyte Corporation (designated in the
table as TLT), Thermo BioAnalysis Corporation (designated in the table as
TBA), Thermo Cardiosystems Inc. (designated in the table as TCA) and Thermo
Voltek Corp. (designated in the table as TVL), 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 ThermoLyte Corporation and Thermo BioAnalysis 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. Certain options granted as a part of Thermo Electron's
stock option program have three-year terms, and the repurchase rights lapse
in their entirety on the second anniversary of the grant date. For
companies whose
12
<PAGE>
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.
Stock Options Exercised During Fiscal 1995
The following table reports certain information regarding stock option exercises
during fiscal 1995 and outstanding stock options held at the end of fiscal 1995
by the Corporation's chief executive officer and the other named executive
officers. No stock appreciation rights were exercised or were outstanding during
fiscal 1995.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Fiscal 1995 and Fiscal 1995 Year-end Option Values
- -----------------------------------------------------------------------------------------------------------------------------------
Shares No. of Unexercised Value of
Acquired Options at Fiscal Unexercised
on Value Year-end (Exercisable/ In-the-Money
Name Company (1) Exercise Realized Unexercisable) (2) Options
---- ----------- -------- -------- ------------------ -------
<S> <C> <C> <C> <C> <C>
George N. Hatsopoulos TMO 5,616 $ 152,008 1,095,000/0 $31,834,650/--
TMD -- -- 50,000/0 $ 561,000/--
TCK -- -- 36,000/0 $ 364,500/--
TFT 44,727 $ 398,831 117,273/0 $ 1,969,315/--
THI -- -- 93,750/0 $ 967,500/--
THP -- -- 40,000/0 $ 151,000/--
THN -- -- 7,500/0 $ 47,400/--
TTT -- -- 40,000/0 $ 83,800/--
TLZ 28,800 $ 406,800 43,200/0 $ 1,042,200/--
THS -- -- 20,000/0 $ 112,500/--
TKN -- -- 36,600/0 $ 1,337,130/--
- ----------------------------------------------------------------------------------------------------------------------------------
John N. Hatsopoulos TMO 52,740 $1,029,188 297,880/0 (3) $ 7,626,906/--
TMD -- -- 50,000/0 $ 561,000/--
TCA 5,389 $ 138,201 -- --
TCK -- -- 36,000/0 $ 364,500/--
TFT 36,000 $ 297,165 126,000/0 $ 2,126,400/--
THI -- -- 93,750/0 $ 967,500/--
THP -- -- 40,000/0 $ 151,000/--
THN -- -- 22,500/0 $ 142,200/--
TTT -- -- 40,000/0 $ 83,800/--
TVL -- -- 4,999/0 $ 54,339/--
TLZ 28,800 $ 302,588 68,200/0 $ 1,120,325/--
THS -- -- 20,000/0 $ 112,500/--
TKN 6,000 $ 118,050 24,000/0 $ 829,200/--
- ----------------------------------------------------------------------------------------------------------------------------------
Arvin H. Smith TMO 78,075 $1,595,351 182,775/0 $ 5,986,561/--
TMD -- -- 82,500/0 $ 1,517,850/--
TCA -- -- 20,000/0 $ 1,340,000/--
TCK -- -- 4,000/0 $ 43,000/--
TFT -- -- 60,000/0 $ 1,080,000/--
THI -- -- 234,375/0 $ 2,418,750/--
THN -- -- 2,400/0 $ 15,168/--
TTT -- -- 35,000/0 $ 112,875/--
TLZ -- -- 10,000/0 $ 31,250/--
TLT -- -- 0/6,000 --
THS -- -- 20,000/0 $ 112,500/--
TKN -- -- 2,700/0 $ 122,985/--
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Shares No. of Unexercised Value of
Acquired Options at Fiscal Unexercised
on Value Year-end (Exercisable/ In-the-Money
Name Company (1) Exercise Realized Unexercisable) (2) Options
---- ----------- -------- -------- ------------------ -------
<S> <C> <C> <C> <C> <C>
William A. Rainville TMO 15,750 $ 297,313 136,175/0 (3) $ 3,628,301/--
TBA -- -- 0/6,000 --(4)
TCK -- -- 4,000/0 $ 43,000/--
TFT -- -- 330,000/0 $ 5,656,800/--
THN -- -- 22,500/0 $ 142,200/--
TTT -- -- 60,000/0 $ 115,200/--
TLZ -- -- 10,000/0 $ 31,250/--
TLT -- -- 0/6,000 --(4)
THS -- -- 10,000/0 $ 56,250/--
TKN -- -- 2,700/0 $ 122,985/--
- ----------------------------------------------------------------------------------------------------------------------------------
John W. Wood Jr. TMO 4,950 $ 90,712 133,998/0 (3) $ 2,851,460/--
TMD -- -- 120,100/0 $ 1,645,924/--
TDI -- -- 0/35,000 --
TBA -- -- 0/1,000 --
TCA 26,817 $ 646,425 39,483/0 $ 2,824,905/--(4)
TCK -- -- 3,000/0 $ 32,250/--(4)
TFT -- -- 6,000/0 $ 108,000/--
TVL -- -- 56,649/0 $ 345,830/--
TLZ -- -- 10,000/0 $ 31,250/--
TLT -- -- 0/1,000 --(4)
THS -- -- 3,000/0 $ 16,875/--
TKN 3,600 $ 120,780 900/0 $ 40,995/--
- ----------------------------------------------------------------------------------------------------------------------------------
</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 BioAnalysis Corporation (designated in the table as TBA), Thermo
Cardiosystems Inc. (designated in the table as TCA), Thermedics Detection
Inc. (designated in the table as TDI), 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
TerraTech Inc. (designated in the table as TTT), Thermo Remediation Inc.
(designated in the table as THN), ThermoLase Corporation (designated in the
table as TLZ), ThermoLyte Corporation (designated in the table as TLT),
ThermoSpectra Corporation (designated in the table as THN), 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 options to purchase
the common stock of Thermo BioAnalysis Corporation, ThermoLyte Corporation
and Thermedics Detection Inc., 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. Certain options granted as
a part of Thermo Electron's stock option program have three-year terms, and
the repurchase rights lapse in their entirety on the second anniversary of
the grant date. For companies whose shares are not publicly traded, the
repurchase rights lapse in their entirety on the ninth anniversary of the
grant date.
14
<PAGE>
(3) Options to purchase 90,000, 60,000 and 60,000 shares of the Common Stock
granted to Messrs. J. Hatsopoulos, Rainville and Wood, 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.
(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.
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
-------------------------------------------
Annual 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 1995, the annual 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 30, 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 and Mr. Wood. 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
15
<PAGE>
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 cash 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 and Mr.
Smith is 98.1%, 76.1% and 59.1%, respectively. Assuming that severance benefits
would have been payable under such agreements as of January 1, 1996, the
payments thereunder for the first year thereof to Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos and Mr. Smith would have been approximately $1,015,000, $609,000 and
$316,000, 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.
During 1988, Mr. Rainville and Mr. Wood each 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) the
officer'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 the officer'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" under
applicable provisions of the Internal Revenue Code of 1986, as amended.
Assuming that severance benefits would have been payable as of January 1, 1996,
the payment under such agreement to Mr. Rainville and Mr. Wood would have been
approximately $415,000 and $340,000, respectively.
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
16
<PAGE>
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 and
the other named executive officers will approximate the mid-point of competitive
data. The salary increases in calendar 1995 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 zero to three times the median potential bonus. The value within the range
(the bonus multiplier) is determined at the end of each year by the Committee in
its discretion. The Committee exercises its discretion by evaluating each
executive's performance using a methodology applied throughout the Corporation.
The methodology incorporates measures of operating returns designed to measure
profitability, contributions to shareholder value, and earnings growth, and 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 measures of operating returns used in the
Committee's determinations in calendar 1995 measured return on net assets,
growth in income and growth in earnings per share, and the Committee's
determinations also included 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. 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 1995 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.
17
<PAGE>
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
purchase shares of Common Stock 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 from
time to time the Committee considers total compensation of executives, actual
and anticipated contributions of each executive (which includes a subjective
assessment by the Committee of the value of the executive's future potential
within the organization), as well as the value of previously awarded options as
described above.
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 and reward
executive officers for holding shares over a certain period.
1995 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 1995, 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 1995 by the
18
<PAGE>
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 21 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, 1995, the Corporation achieved a ten-year
compounded rate of return to Stockholders of 24 percent per year, well in excess
of the 15 percent per year return achieved by the Standard & Poor's 500 Index.
Considering Dr. Hatsopoulos' leadership and dedication in enhancing 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 1995. 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 1995.
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 that is paid to senior executives in excess of $1 million, unless
the compensation qualified as "performance based" or is otherwise exempt from
Section 162(m).
The compensation of the chief executive officer exceeded $1 million
for the first time in 1995; none of the other named executive officers received
compensation in excess of $1 million in 1995. The Committee does not believe
that the amount by which the chief executive officer's compensation exceeded $1
million was significant (approximately $10,000). The Committee does not
currently expect the compensation of any of the named executive officers other
than the chief executive officer to exceed the $1 million threshold in 1996.
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. The Committee will continue to monitor the effect of
Section 162(m) on the Corporation.
Mr. Donald E. Noble (Chairman)
Dr. Elias P. Gyftopoulos
Mr. Frank Jungers
Ms. Hutham S. Olayan
Mr. Roger D. Wellington
19
<PAGE>
COMPARATIVE PERFORMANCE GRAPHS
Five-Year Performance Graph: 1990-1995
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., Minnesota Mining and
Manufacturing Co., The Perkin-Elmer Corp., Raytheon Co., Rockwell International
Corp., TRW Inc., Tektronix, Inc., Texas Instruments Incorporated, United
Technologies Corp. and Varian Associates, Inc.; electrical components and
equipment - AMP Inc., Emerson Electric Co., Grainger (W.W.), Inc., Honeywell
Inc., Hubbell Inc. (Class B), Solectron Corporation, Tecumseh Products Co.
(Class B), Thomas & Betts Corp. Westinghouse Electric Corp. and York
International Corp.; and industrial and commercial pollution control and waste
management - Browning-Ferris Industries, Inc., Donaldson Company, Inc., Dames &
Moore, Inc., Ogden Corp., Rollins Environmental Services, Inc. and WMX
Technologies Inc.
Comparison of 1990-1995 Cumulative Total Return Among Thermo Electron
Corporation (TMO),
the Standard & Poor's 500 Index (S&P 500) and the Corporation's Peer Group
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/30/95
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TMO 100 161 164 219 234 407
- ------------------------------------------------------------------------
S&P 500 100 130 140 155 157 215
- ------------------------------------------------------------------------
Peer Group 100 120 127 134 138 180
- ------------------------------------------------------------------------
</TABLE>
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".
20
<PAGE>
Ten-Year Performance Graph: 1985-1995
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 1985-1995 Cumulative Total Return Among Thermo Electron
Corporation (TMO),
the S&P 500 Index (S&P 500) and the Corporation's Peer Group
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TMO 100 127 102 151 228 215 348 352 471 503 875
- ------------------------------------------------------------------------------
S&P 500 100 119 125 146 192 186 242 261 287 291 390
- ------------------------------------------------------------------------------
Peer Group 100 118 139 144 189 185 222 235 247 255 332
- ------------------------------------------------------------------------------
</TABLE>
21
<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 TerraTech Inc. and ThermoTrex
Corporation, all of which are publicly traded, majority subsidiaries of the
Corporation; Thermedics Inc. has created Thermo Cardiosystems Inc. and Thermo
Sentron Inc. as publicly traded, majority-owned subsidiaries and has acquired
the majority interest in a previously unaffiliated public company, Thermo Voltek
Corp.; Thermo TerraTech Inc. has created Thermo Remediation Inc. as a publicly
traded, majority-owned subsidiary; Thermo Instrument Systems Inc. has created
ThermoQuest 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 such other majority-owned Thermo Electron subsidiaries are
hereinafter referred to as the "Thermo Subsidiaries.")
Thermo Electron and each of the Thermo Subsidiaries recognize that the
benefits and support that derive from their affiliation are essential elements
of their individual performance. Accordingly, Thermo Electron and each of the
Thermo Subsidiaries have adopted the Thermo Electron Corporate Charter (the
"Charter") to define the relationships and delineate the nature of such
cooperation among themselves. The purpose of the Charter is to ensure that (1)
all of the companies and their stockholders are treated consistently and fairly,
(2) the scope and nature of the cooperation among the companies, and each
company's responsibilities, are adequately defined, (3) each company has access
to the combined resources and financial, managerial and technological strengths
of the others, and (4) Thermo Electron and the Thermo Subsidiaries, in the
aggregate, are able to obtain the most favorable terms from outside parties.
To achieve these ends, the Charter identifies the general principles
to be followed by the companies, addresses the role and responsibilities of the
management of each company, provides for the sharing of group resources by the
companies and provides for centralized administrative, banking and credit
services to be performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by members, coordinating
the access of Thermo Electron and the Thermo Subsidiaries (the "Thermo Group")
to external financing sources, ensuring compliance with external financial
covenants and internal financial policies, assisting in the formulation of long-
range 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
establishes certain internal policies and procedures applicable to members of
the Thermo Group. The cost of the services provided by Thermo Electron to the
Thermo Subsidiaries is covered under existing corporate services agreements
between Thermo Electron and each of the Thermo Subsidiaries.
The Charter presently provides that it shall continue in effect so
long as Thermo Electron and at least one Thermo Subsidiary participate. The
Charter may be amended at any time by agreement of the participants. Any Thermo
Subsidiary, including the Corporation, can withdraw from participation in the
Charter upon 30 days' prior notice. In addition, Thermo Electron may terminate a
subsidiary's participation in the Charter in the event the subsidiary ceases to
be controlled by Thermo Electron or ceases to comply with the Charter or the
policies and procedures applicable to the Thermo Group. A withdrawal from the
Charter automatically terminates the corporate services agreement and tax
allocation agreement (if any) in effect between the withdrawing company and
Thermo Electron. The withdrawal from participation does not terminate
outstanding commitments to third parties made by the withdrawing company, or by
Thermo Electron or other members of the Thermo Group, prior to the withdrawal.
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
22
<PAGE>
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, 1995, the Corporation assessed each Thermo Subsidiary an annual fee equal to
1.2% of such subsidiary's revenues for these services. Effective January 1,
1996, the fee has been reduced to 1.0% 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 an international distribution agreement, Thermedics
Detection Inc., a subsidiary of Thermedics Inc., which is, in turn, a subsidiary
of the Corporation, has appointed Arabian Business Machines Co. ("ABM") as its
exclusive distributor of drug-and-explosives detection products in certain
Middle East countries. ABM is a member of the Olayan Group, and Hutham S.
Olayan, a Director of the Corporation, is the President and a Director of Olayan
America Corporation and Competrol Real Estate Limited, two other members of the
Olayan Group, which is controlled by Suliman S. Olayan, Ms. Olayan's father.
During 1995, Thermedics Detection Inc. paid an aggregate of $50,000 pursuant to
this distribution agreement.
In March 1995, ThermoLyte Corporation ("TLC"), a subsidiary of the
Corporation, completed a private placement of 1,845,000 shares 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. Peter O. Crisp, a Director of the Corporation, is both a
general and a limited partner of Venrock Associates. Crescent International
Holdings Limited is a wholly owned subsidiary of Crescent Holding GmbH.
Crescent Holding GmbH is indirectly controlled by Suliman S. Olayan, the father
of Hutham S. Olayan, a Director of the Corporation.
In March 1995, Thermo BioAnalysis Corporation ("Thermo BioAnalysis"),
a subsidiary of the Corporation, completed a private placement of 1,601,500
shares 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 Thermo BioAnalysis in such private placement
at a purchase price of $10.00 per share, the same price paid by unaffiliated
buyers.
In November 1995 and January 1996, Trex Medical Corporation ("Trex
Medical"), a subsidiary of the Corporation, completed private placements of an
aggregate of 1,962,000 shares primarily to outside investors of minority
investments in its common stock. Peter O. Crisp, a Director of the Corporation,
and Crescent International Holdings Limited purchased 10,000 and 200,000 shares,
respectively, of the common stock of Trex Medical in such private placements at
a purchase price of $10.25 per share, the same price paid by unaffiliated
buyers. Crescent International Holdings Limited is a wholly owned subsidiary of
Crescent Holding GmbH. Crescent Holding GmbH is indirectly controlled by
Suliman S. Olayan, the father of Hutham S. Olayan, a Director of the
Corporation.
23
<PAGE>
- PROPOSAL 2-
PROPOSAL TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has determined that it is advisable to increase
the Corporation's authorized Common Stock from 175 million shares to 350 million
shares, and has voted to recommend that the Stockholders adopt an amendment to
the Corporation's Amended and Restated Certificate of Incorporation effecting
the proposed increase.
As of January 1, 1996, approximately 87.9 million shares of Common
Stock were issued and outstanding (excluding treasury shares) and approximately
an additional 30.2 million shares were reserved for issuance upon the conversion
of existing securities and exercise of options granted under the Corporation's
various stock-based plans. Accordingly, a total of approximately 56.9 million
shares of Common Stock are available for future issuance.
The Board of Directors believes it continues to be in the best
interest of the Corporation to have sufficient additional authorized but
unissued shares of Common Stock available in order to provide flexibility for
corporate action in the future. Management believes that the availability of
additional authorized shares for issuance from time to time in the Board of
Directors' discretion in connection with possible acquisitions of other
companies, future financings, investment opportunities, stock splits or
dividends or for other corporate purposes is desirable in order to avoid
repeated separate amendments to the Corporation's Certificate of Incorporation
and the delay and expense incurred in holding special meetings of the
Stockholders to approve such amendments. There are at present no specific
understandings, arrangements or agreements with respect to any future
acquisitions that would require the Corporation to issue a material amount of
new shares of its Common Stock. The Board of Directors believes that the
currently available unissued shares do not provide sufficient flexibility for
corporate action in the future.
On March 12, 1996, the Board of Directors approved a three-for-two
split of the Common Stock, to be effected in the form of a 50% stock dividend,
subject to the approval by the Stockholders of the Corporation of the increase
in the Corporation's authorized Common Stock as described above. If effected,
the 50% stock split would be paid on June 5, 1996 to holders of record of the
Common Stock on May 22, 1996. This stock split is subject to the approval by
the Stockholders of the proposed increase in the authorized Common Stock and
will not be effected if such approval is not obtained.
No further authorization by vote of the Stockholders will be solicited
for the issuance of the additional shares of Common Stock proposed to be
authorized, except as might be required by law, regulatory authorities or rules
of the New York Stock Exchange or any other stock exchange on which the
Corporation's shares may then be listed. The issuance of additional shares of
Common Stock could have the effect of diluting existing stockholder earnings per
share, book value per share and voting power. The Stockholders of the
Corporation do not have any preemptive right to purchase or subscribe for any
part of any new or additional issuance of the Corporation's securities.
________________________________________________________________________________
The affirmative vote of two-thirds of the Common Stock outstanding and
entitled to vote at the Meeting is required to approve the amendment to the
Corporation's Amended and Restated Certificate of Incorporation to effect the
proposed increase in the Corporation's authorized shares. The Board of
Directors considers this amendment to be advisable and in the best interests of
the Corporation and its Stockholders and recommends that you vote FOR approval
of the amendment. If not otherwise specified, Proxies will be vote FOR approval
of this amendment.
______________________________________________________________________________
24
<PAGE>
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as
independent public accountants for fiscal 1996. 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 1997 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 25, 1996.
SOLICITATION STATEMENT
The cost of this solicitation of Proxies will be borne by the
Corporation. Solicitation will be made primarily by mail, but regular employees
of the Corporation may solicit Proxies personally, by telephone or telegram.
Brokers, nominees, custodians and fiduciaries are requested to forward
solicitation materials to obtain voting instructions from beneficial owners of
stock registered in their names, and the Corporation will reimburse such parties
for their reasonable charges and expenses in connection therewith. In addition,
the Corporation has retained D.F. King & Co., Inc. to assist in the solicitation
of proxies at a cost not to exceed $9,000, plus out-of-pocket expenses.
Waltham, Massachusetts
April 19, 1996
25
<PAGE>
FORM OF PROXY
THERMO ELECTRON CORPORATION
81 Wyman Street * Post Office Box 9046 * Waltham, Massachusetts 02254
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints George N. Hatsopoulos, John N. Hatsopoulos
and Jonathan W. Painter, and each of them, proxies of the undersigned, each with
full 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 1, 1996, at the
Annual Meeting of the Stockholders to be held at the Turnberry Isle Resort &
Club, Aventura, Florida, on Tuesday, May 21, 1996 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
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: George N. Hatsopoulos, Robert A. McCabe and Hutham S. Olayan
FOR WITHHELD
all nominees from all nominees
[ _ ] [ _ ]
FOR except vote withheld from the following nominees:
[ _ ]
- ----------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve an amendment to the Amended and [ _ ] [ _ ] [ _ ]
Restated Certificate of Incorporation of the
Company to increase the authorized common
stock from 175 million to 350 million shares.
MARK HERE FOR
ADDRESS CHANGE [ _ ]
AND NOTE CHANGE
AT LEFT
SIGNATURE:_______________________________________ DATE_________________
SIGNATURE:_______________________________________ DATE_________________
(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.)
