<PAGE>
Filed pursuant to Rule 424(b)(5)
Registration No. 333-34909
No. 333-34909-01
PROSPECTUS SUPPLEMENT
(To Prospectus dated September 11, 1997)
$110,000,000
THERMOTREX CORPORATION
3 1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2007
GUARANTEED ON A SUBORDINATED BASIS BY THERMO ELECTRON CORPORATION
-----------------
The Debentures will be convertible into shares of Common Stock, $.01 par
value ("Common Stock"), of ThermoTrex Corporation (the "Company") at any time
(except that Bearer Debentures will not be convertible until the Exchange
Date, as defined herein) and prior to redemption or maturity, at a conversion
price of $27 per share, subject to adjustment in certain events. On October
28, 1997, the last reported sale price of the Common Stock on the American
Stock Exchange was $23 1/4 per share. See "Price Range of Common Stock and
Dividend Policy."
Interest on the Debentures is payable semi-annually on May 1 and November 1,
commencing May 1, 1998. The Debentures are not redeemable by the Company
before November 1, 2000 except in the event of certain changes in United
States taxation. Subject to the foregoing limitation, the Debentures will be
redeemable by the Company upon payment of the principal amount of, premium, if
any, and interest on the Debentures. Each holder of Debentures will have the
right to cause the Company to redeem the Debentures in the event the Common
Stock is no longer publicly traded, as further described herein.
The Debentures are general, unsecured obligations of the Company and are
subordinated in right of payment to all existing and future Senior
Indebtedness (as defined in the accompanying Prospectus) of the Company. As of
June 28, 1997, the Company had no Senior Indebtedness. The Debentures will be
guaranteed (the "Guarantees") on a subordinated basis by Thermo Electron
Corporation ("Thermo Electron" or the "Guarantor"). The Guarantees will be
subordinated to all existing and future Senior Guarantor Indebtedness (as
defined in the accompanying Prospectus). As of June 28, 1997, the aggregate
amount of outstanding Senior Guarantor Indebtedness was approximately
$304,951,000, stated on a pro forma basis to reflect the conversion of the
Guarantor's $175,186,000 principal amount of 5% Senior Convertible Debentures
due 2001. The Subordinated Indenture executed in connection with the issuance
of the Debentures will not restrict the Company or the Guarantor from
incurring additional senior indebtedness or any other indebtedness.
As of October 28, 1997, the Company was a 53%-owned subsidiary of Thermo
Electron. Thermo Electron intends to purchase $10,000,000 principal amount of
the Debentures from the Underwriters.
The Debentures have been approved for listing on the American Stock Exchange
under the symbol TKN.A.
-----------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 4 OF THE PROSPECTUS.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions(2)(3) Company(1)(3)(4)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture.......... 100% 2% 98%
- ------------------------------------------------------------------------------------------
Total(5)............... $110,000,000 $2,000,000 $108,000,000
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from November 3, 1997.
(2) The Company and Thermo Electron have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities
Act of 1933, as amended. See "Underwriting."
(3) The Company will not pay any underwriting discounts or commissions with
respect to $10,000,000 principal amount of Debentures which will be sold
to Thermo Electron.
(4) Before deducting expenses payable by the Company estimated at $400,000.
(5) The Company has granted the Underwriters a 30-day option to purchase up to
$16,500,000 additional principal amount of Debentures on the same terms
and conditions as set forth above, solely to cover over-allotments, if
any. If such option is exercised in full, the total Price to Public,
Underwriting Discounts and Commissions and Proceeds to Company, before
deducting expenses, will be $126,500,000, $2,330,000 and $124,170,000,
respectively. See "Underwriting."
-----------------
The Debentures offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. It is expected that delivery of the
Debentures will be made as set forth herein on or about November 3, 1997.
-----------------
LEHMAN BROTHERS GOLDMAN, SACHS & CO.
October 28, 1997
<PAGE>
TO THE EXTENT APPLICABLE, THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT
SUPERSEDES THE INFORMATION IN THE ATTACHED PROSPECTUS (THE "PROSPECTUS").
THE DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND THE
OFFERING OF THE DEBENTURES IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW.
PERSONS INTO WHOSE POSSESSION THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
COME ARE REQUIRED BY THE UNDERWRITERS AND THE COMPANY TO INFORM THEMSELVES
ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE, AND MAY NOT BE USED FOR OR IN CONNECTION WITH,
AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION. NO ACTION HAS BEEN TAKEN BY THE COMPANY, THERMO
ELECTRON OR THE UNDERWRITERS THAT WOULD PERMIT AN OFFERING OF THE DEBENTURES
OR THE CIRCULATION OR DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS
REQUIRED.
DEBENTURES IN BEARER FORM ARE SUBJECT TO U.S. TAX LAW REQUIREMENTS AND,
SUBJECT TO CERTAIN EXCEPTIONS, MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN
THE UNITED STATES OR TO UNITED STATES PERSONS, AS DEFINED IN THE PROSPECTUS.
SEE "DESCRIPTION OF DEBT SECURITIES OF THE COMPANY AND THE GUARANTEES" IN THE
PROSPECTUS.
FOR UNITED KINGDOM PURCHASERS: THE DEBENTURES MAY NOT BE OFFERED OR SOLD IN
THE UNITED KINGDOM OTHER THAN TO PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE
THEM IN ACQUIRING, HOLDING, MANAGING OR DISPOSING OF INVESTMENTS, WHETHER AS
PRINCIPAL OR AGENT (EXCEPT IN CIRCUMSTANCES THAT DO NOT CONSTITUTE AN OFFER TO
THE PUBLIC WITHIN THE MEANING OF THE PUBLIC OFFERS OF SECURITIES REGULATIONS
1995 OR THE FINANCIAL SERVICES ACT 1986), AND THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS MAY ONLY BE ISSUED OR PASSED ON TO ANY PERSON IN THE UNITED
KINGDOM IF THAT PERSON IS OF A KIND DESCRIBED IN ARTICLE 11(3) OF THE
FINANCIAL SERVICES ACT 1986 (INVESTMENT ADVERTISEMENTS) (EXEMPTIONS) ORDER
1996, AS AMENDED BY ARTICLE 4 OF THE FINANCIAL SERVICES ACT 1986 (INVESTMENT
ADVERTISEMENTS) (EXEMPTIONS) ORDER 1997, OR IS A PERSON TO WHOM THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS MAY OTHERWISE LAWFULLY BE PASSED ON.
IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, UNLESS OTHERWISE SPECIFIED
OR THE CONTEXT OTHERWISE REQUIRES, REFERENCES TO "DOLLARS," "U.S. DOLLARS" AND
"$" ARE TO UNITED STATES DOLLARS.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES OR
THE COMMON STOCK. SUCH TRANSACTIONS MAY INCLUDE THE PURCHASE OF DEBENTURES OR
COMMON STOCK FOLLOWING THE PRICING OF THE OFFERING TO COVER A SYNDICATE SHORT
POSITION IN THE DEBENTURES OR THE COMMON STOCK OR FOR THE PURPOSE OF
MAINTAINING THE PRICE OF THE DEBENTURES OR THE COMMON STOCK. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING."
S-2
<PAGE>
THE OFFERING
Securities Offered......... $110,000,000 principal amount of 3 1/4%
Convertible Subordinated Debentures due 2007. The
Company has granted the Underwriters an option
for 30 days to purchase up to $16,500,000
additional principal amount of Debentures, solely
to cover over-allotments.
Interest................... Interest on the Debentures is payable on the
principal amount thereof at the rate stated on
the cover page hereof, semi-annually in arrears
on each May 1 and November 1, commencing May 1,
1998.
Conversion Rights.......... The Debentures are convertible at any time
(except that Bearer Debentures will not be
convertible until the Exchange Date, as defined
below) and prior to redemption or maturity into
shares of Common Stock at a conversion price of
$27 per share, subject to adjustment in certain
events as described in the Prospectus.
The Company may elect, in its sole discretion,
within two business days following a conversion
date, to (i) pay cash equal to the Market Price
(as defined in the Prospectus) in respect of all
or a portion of the shares of Common Stock
otherwise issuable upon such conversion and/or
(ii) deliver fully paid and non-assessable shares
of the common stock, $1.00 par value per share,
of Thermo Electron ("Guarantor Common Stock") in
respect of all or a portion of the shares of
Common Stock otherwise issuable upon such
conversion.
Redemption................. The Debentures are not redeemable by the Company
before November 1, 2000 except in the event of
certain changes in United States taxation.
Subject to the foregoing limitation, the
Debentures will be redeemable by the Company upon
payment of the principal amount of, premium, if
any, and interest on the Debentures.
Repayment Right............ Each holder of Debentures will have the right to
cause the Company to redeem the Debentures in the
event the Common Stock is no longer publicly
traded.
Subordination.............. The Debentures are subordinated in right of
payment to all Senior Indebtedness, as defined.
Guarantees................. The Debentures are guaranteed by Thermo Electron.
The Guarantees are subordinated in right of
payment to all Senior Guarantor Indebtedness, as
defined.
Trading Market............. The Debentures have been approved for listing on
the American Stock Exchange under the symbol
TKN.A. The Common Stock is traded on the American
Stock Exchange under the symbol TKN.
S-3
<PAGE>
Form of Debentures......... The Debentures will be issued in both registered
form ("Registered Debentures") and in bearer form
("Bearer Debentures"). Subject to certain
exceptions, Bearer Debentures may not be offered,
sold or delivered within the United States or to
United States persons, as defined in the
Prospectus. Payments on Bearer Debentures will be
made without deduction for United States
withholding taxes, to the extent described herein
and in the Prospectus.
Global Registered
Debenture.................. Registered Debentures will be represented solely
by a global Debenture registered in the name of
Cede & Co., as the nominee of The Depository
Trust Company ("DTC").
Temporary Global Bearer
Debenture.................. Bearer Debentures initially will be represented
by a temporary global Debenture to be deposited
with Bankers Trust Company in London, as common
depository, for subscribers' respective accounts
at Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear
Clearance System ("Euroclear"), or Cedel Bank,
S.A. ("Cedel") on or about November 3, 1997 (the
"Closing Date"). The temporary global Bearer
Debenture will be exchangeable for definitive
Bearer Debentures, each with related interest
Coupons attached, commencing on the date 40 days
after the later of the Closing Date or the date
of the closing on the sale of Debentures acquired
pursuant to the exercise of the over-allotment
option granted by the Company to the Underwriters
(the "Exchange Date"), upon certification that
the beneficial owners of such Bearer Debentures
are not United States persons or other persons
who have purchased such Bearer Debentures for
resale to United States persons. The temporary
global Bearer Debenture will also be exchangeable
for Registered Debentures at any time without
certification of non-U.S. status provided that
such exchange is permitted by the rules and
procedures then in effect of Cedel, Euroclear and
DTC and provided, further, that so long as
Registered Debentures are represented solely by a
global Debenture, such exchange may be effected
only for an interest in such global Debenture, by
and through a DTC Participant (as such term is
defined in the Prospectus).
Use of Proceeds............ The Company intends to use the net proceeds from
the sale of the Debentures for general corporate
purposes, which may include possible acquisitions
of businesses, repayment of outstanding
indebtedness, capital expenditures, working
capital requirements, research and development,
and repurchase of its Common Stock and other
securities and the securities of any of its
subsidiaries through open-market purchases or
otherwise.
S-4
<PAGE>
RECENT DEVELOPMENTS
On July 10, 1997, Thermo Fibertek Inc. ("Thermo Fibertek"), an 89%-owned
subsidiary of Thermo Electron, sold $153 million principal amount of 4 1/2%
Convertible Subordinated Debentures due 2004 (the "Fibertek Debentures"). The
Fibertek Debentures are convertible into shares of Thermo Fibertek common
stock at a price of $12.10 per share and have been guaranteed on a
subordinated basis by Thermo Electron.
On July 18, 1997, the Company acquired all of the outstanding capital stock
of Computer Communications Specialists, Inc. ("CCS") for approximately $10.0
million in cash and repaid approximately $1.0 million of pre-acquisition
liabilities immediately after closing. CCS develops and markets call
automation software and hardware that enable callers to access a wide variety
of information through their touch-tone phones and computers. To finance this
acquisition, the Company borrowed $11.0 million from Thermo Electron pursuant
to a promissory note due October 5, 1998, and bearing interest at the 90-day
Commercial Paper Composite Rate plus 25 basis points, set at the beginning of
each quarter. On July 21, 1997, the Company transferred all of the capital
stock of CCS to its Trex Communications Corporation ("TrexCom") subsidiary in
consideration for 1,000,000 shares of common stock of TrexCom.
On August 12, 1997, ThermoLase Corporation ("ThermoLase"), a 67%-owned
subsidiary of the Company, sold $115 million principal amount of 4 3/8%
Convertible Subordinated Debentures due 2004 (the "ThermoLase Debentures").
The ThermoLase Debentures are convertible into shares of ThermoLase common
stock at a price of $17.385 per share and have been guaranteed on a
subordinated basis by Thermo Electron.
On September 15, 1997, Thermo Electron called for redemption all of its
outstanding 5% Senior Convertible Debentures due 2001 (the "5% Debentures").
The redemption price of the 5% Debentures was 102% of the principal amount
thereof. The entire outstanding principal amount of the 5% Debentures ($175
million) has been converted into shares of the common stock of Thermo Electron
at a conversion price of $21.00 per share.
On September 26, 1997, TrexCom completed a private placement of 1,133,000
shares of its common stock at $10 per share. The aggregate net proceeds of the
private placement were approximately $10.6 million, which TrexCom will use for
research and development and other general corporate purposes, including
possible acquisitions. Following the private placement, the Company owned
approximately 78% of TrexCom's outstanding common stock.
S-5
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Debentures will amount to
approximately $107,600,000 ($123,770,000 if the Underwriters' over-allotment
option is exercised in full). The Company intends to use these net proceeds
for general corporate purposes, which may include possible acquisitions of
businesses, repayment of outstanding indebtedness, capital expenditures,
working capital requirements, research and development, and repurchase of its
Common Stock and other securities and the securities of any of its
subsidiaries through open-market purchases or otherwise. The precise amount
and timing of the application of such proceeds will depend upon the funding
requirements of the Company and the availability and cost of other funds. The
Company is in various stages of negotiations with respect to several
acquisitions; however, it currently has no commitment or agreement for any
material acquisition. Pending these uses, the Company expects to invest the
net proceeds primarily in investment grade interest or dividend bearing
instruments, either directly by the Company or pursuant to a repurchase
agreement with Thermo Electron. The Company's cash equivalents may be invested
from time to time pursuant to a repurchase agreement with Thermo Electron.
Under this agreement, the Company in effect lends excess cash to Thermo
Electron, which Thermo Electron collateralizes with investments principally
consisting of corporate notes, United States government agency securities,
money market funds, commercial paper, and other marketable securities, in the
amount of at least 103% of such obligation. The Company's funds subject to the
repurchase agreement currently earn a return equal to a rate based on the 90-
day Commercial Paper Composite Rate plus 25 basis points, set at the beginning
of each quarter.
S-6
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The following table sets forth the high and low sales prices, for the
periods indicated, of the Company's Common Stock on the AMEX (symbol: TKN).
<TABLE>
<CAPTION>
FISCAL 1996 HIGH LOW
----------- ---- ---
<S> <C> <C>
First Quarter............................................. $50 5/8 $31 1/2
Second Quarter............................................ 50 7/8 41 3/8
Third Quarter............................................. 59 1/8 42 3/4
Fourth Quarter............................................ 51 3/8 32 5/8
<CAPTION>
FISCAL 1997
-----------
<S> <C> <C>
First Quarter............................................. $42 7/8 $26 1/2
Second Quarter............................................ 31 3/8 20 7/8
Third Quarter............................................. 29 1/2 17 1/2
Fourth Quarter............................................ 27 7/16 21 1/2
<CAPTION>
FISCAL 1998
-----------
<S> <C> <C>
First Quarter (through October 28, 1997).................. $28 1/8 $22 1/4
</TABLE>
As of October 28, 1997, the Company had 627 holders of record of its Common
Stock. This does not include holdings in street or nominee names. The closing
price on the AMEX for the Company's Common Stock on October 28, 1997 was $23
1/4.
The Company has never paid cash dividends on its securities and does not
expect to pay cash dividends in the foreseeable future because its policy has
been to use earnings to finance expansion and growth. Payment of dividends
will rest within the discretion of the Company's Board of Directors and will
depend upon, among other factors, the Company's earnings, capital requirements
and financial condition.
S-7
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of June
28, 1997, stated on a pro forma basis to reflect the issuance by ThermoLase of
$115,000,000 principal amount of 4 3/8% Convertible Subordinated Debentures
and as adjusted to give effect to the sale of the Debentures offered hereby,
assuming no exercise of the Underwriters' over-allotment option. There has
been no material change in the capitalization of the Company since June 28,
1997, except as reflected in the pro forma column below.
<TABLE>
<CAPTION>
JUNE 28, 1997
-----------------------
AS
PRO FORMA ADJUSTED
----------- ----------
(IN THOUSANDS,
EXCEPT SHARE AMOUNTS)
<S> <C> <C>
Long-term Obligations:
Convertible subordinated debentures.................. $ 115,000 $ 225,000
----------- ----------
Common Stock of Subsidiary Subject to Redemption...... 40,500 40,500
----------- ----------
Minority Interest..................................... 39,302 39,302
----------- ----------
Shareholders' Investment:
Common stock, $.01 par value, 50,000,000 shares
authorized;
19,230,589 shares issued(1)......................... 192 192
Capital in excess of par value....................... 84,835 84,835
Retained earnings.................................... 92,392 92,392
Treasury stock at cost, 7,013 shares................. (200) (200)
Net unrealized loss on available-for-sale
investments......................................... (22) (22)
----------- ----------
177,197 177,197
----------- ----------
Total Capitalization (Long-term Obligations, Common
Stock of Subsidiary Subject to Redemption, Minority
Interest and Shareholders' Investment)............... $ 371,999 $ 481,999
=========== ==========
</TABLE>
- --------
(1) Does not include shares reserved for possible issuance under employees'
and directors' stock plans and shares reserved for issuance upon possible
conversion of the Debentures offered hereby.
S-8
<PAGE>
SELECTED FINANCIAL INFORMATION
The selected financial information presented below as of and for the nine
months ended September 30, 1995 and the fiscal year ended September 28, 1996,
and for the fiscal year ended December 31, 1994, has been derived from the
Company's Consolidated Financial Statements, which have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report
incorporated by reference into the Prospectus. This information should be read
in conjunction with the Consolidated Financial Statements and related notes
incorporated by reference into the Prospectus. The selected financial
information as of and for the fiscal years ended January 2, 1993 and January
1, 1994, and as of December 31, 1994, has been derived from the Company's
Consolidated Financial Statements, which have been audited by Arthur Andersen
LLP, but have not been included or incorporated by reference into the
Prospectus. The selected financial information for the fiscal year ended
September 30, 1995 and as of and for the nine-month periods ended June 29,
1996 and June 28, 1997 have not been audited but, in the opinion of the
Company, includes all adjustments (consisting only of normal, recurring
adjustments) necessary to present fairly such information in accordance with
generally accepted accounting principles applied on a consistent basis. The
results of operations for the nine-month period ended June 28, 1997 are not
necessarily indicative of results for the entire year.
<TABLE>
<CAPTION>
NINE
MONTHS
FISCAL YEAR ENDED ENDED(4) FISCAL YEAR ENDED NINE MONTHS ENDED
---------------------------- --------- -------------------- -----------------
JAN. 2, JAN. 1, DEC. 31, SEPT. 30, SEPT. 30, SEPT. 28, JUNE 29, JUNE 28,
1993(1) 1994(2) 1994(3) 1995(5) 1995(6) 1996(6) 1996 1997(7)
-------- -------- -------- --------- --------- --------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Revenues................ $ 19,843 $ 54,329 $ 91,052 $ 86,531 $111,610 $182,029 $128,566 $205,835
-------- -------- -------- -------- -------- -------- -------- --------
Costs and Operating
Expenses:
Cost of revenues....... 14,601 32,440 52,839 51,229 65,559 112,245 77,222 133,068
Selling, general and
administrative
expenses.............. 4,127 13,584 23,707 21,145 27,318 41,283 30,896 50,459
Research and
development expenses.. 2,697 8,499 14,172 13,430 17,964 24,986 15,913 23,544
Costs associated with
divisional
restructuring......... -- -- 650 968 968 -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
21,425 54,523 91,368 86,772 111,809 178,514 124,031 207,071
-------- -------- -------- -------- -------- -------- -------- --------
Operating Income (Loss). (1,582) (194) (316) (241) (199) 3,515 4,535 (1,236)
Interest and Other
Income, Net............ 2,209 1,684 3,249 3,411 4,373 5,628 4,041 2,903
Gain on Issuance of
Stock by Subsidiaries.. -- -- 8,609 34,721 34,721 39,149 13,504 1,997
-------- -------- -------- -------- -------- -------- -------- --------
Income Before Provision
for Income Taxes
and Minority Interest.. 627 1,490 11,542 37,891 38,895 48,292 22,080 3,664
Provision for Income
Taxes.................. 347 995 1,940 2,115 2,802 5,341 4,366 1,603
Minority Interest
(Income) Expense....... -- -- -- (565) (565) 376 368 (1,175)
-------- -------- -------- -------- -------- -------- -------- --------
Net Income.............. $ 280 $ 495 $ 9,602 $ 36,341 $ 36,658 $ 42,575 $ 17,346 $ 3,236
======== ======== ======== ======== ======== ======== ======== ========
Earnings per Share...... $ .02 $ .03 $ .50 $ 1.92 $ 1.94 $ 2.16 $ .88 $ .17
======== ======== ======== ======== ======== ======== ======== ========
Weighted Average Shares. 13,393 15,553 19,076 18,938 18,913 19,669 19,682 19,202
======== ======== ======== ======== ======== ======== ======== ========
BALANCE SHEET DATA (AT
END OF PERIOD):
Working Capital......... $ 18,213 $ 45,103 $ 82,798 $103,297 $127,863 $ 96,777 $ 97,566
Total Assets............ 67,904 117,335 154,984 230,781 320,222 265,904 319,535
Common Stock of
Subsidiary Subject to
Redemption............. -- 14,511 -- -- -- -- 40,500
Shareholders'
Investment............. 48,735 77,594 123,271 162,388 205,079 177,508 177,197
</TABLE>
- -------
(1) Reflects the net proceeds of the Company's 1992 private placement and the
November 1992 acquisition of Lorad Corporation.
(2) Reflects the net proceeds of ThermoLase's 1993 private placement, the
Company's 1993 private placements, and the December 1993 acquisition of
CBI Laboratories, Inc.
(3) Reflects the net proceeds of the Company's 1994 public offering and
ThermoLase's 1994 initial public offering, which resulted in a nontaxable
gain of $8,609,000.
(4) In September 1995, the Company changed its fiscal year end from the
Saturday nearest December 31 to the Saturday nearest September 30.
Accordingly, the Company's 39-week transition period ended September 30,
1995 is presented.
(5) Reflects ThermoLase's 1995 private placements and public offering, which
resulted in nontaxable gains of $34,721,000, and the September 1995
acquisition of Bennett X-Ray Corporation.
(6) Reflects the May 1996 and September 1996 acquisitions of XRE Corporation
and Continental X-Ray Corporation, respectively, and Trex Medical
Corporation's ("Trex Medical") private placements, initial public
offering, and rights offering, which resulted in nontaxable gains of
$39,149,000.
(7) Reflects Trex Medical's December 1996 private placement, which resulted in
a nontaxable gain of $1,997,000 and the reclassification of $40,500,000 to
"Common stock of subsidiary subject to redemption" from "Shareholders'
investment" due to ThermoLase's 1997 share exchange transaction, whereby
2,261,706 shares of ThermoLase common stock and $522,000 in cash were
received by ThermoLase in exchange for issuing 2,000,000 units of
redeemable stock.
S-9
<PAGE>
CAPITALIZATION OF THERMO ELECTRON
The following table sets forth the capitalization of Thermo Electron as of
June 28, 1997, stated on a pro forma basis to reflect: (i) the issuance by
Thermo Fibertek of $153,000,000 principal amount of 4 1/2% Convertible
Subordinated Debentures, (ii) the issuance by ThermoLase of $115,000,000
principal amount of 4 3/8% Convertible Subordinated Debentures, and (iii) the
conversion of $175,186,000 principal amount of Thermo Electron's 5% Senior
Convertible Debentures and as adjusted to give effect to the sale of the
Debentures offered hereby, assuming no exercise of the Underwriters' over-
allotment option and excluding the $10,000,000 principal amount of Debentures
to be purchased by Thermo Electron. There has been no material change in the
capitalization of Thermo Electron since June 28, 1997, except as reflected in
the pro forma column below.
<TABLE>
<CAPTION>
JUNE 28, 1997
------------------------
AS
PRO FORMA ADJUSTED
----------- -----------
(IN THOUSANDS,
EXCEPT SHARE AMOUNTS)
<S> <C> <C>
Short-term Obligations:
Notes payable........... $ 94,815 $ 94,815
Current maturities of
long-term obligations.. 75,517 75,517
----------- -----------
$ 170,332 $ 170,332
=========== ===========
Long-term Obligations(1):
Senior convertible obli-
gations(2)............. $ 190,784 $ 190,784
Convertible subordinated
obligations(3)......... 1,380,798 1,480,798
Nonrecourse tax-exempt
obligations............ 59,500 59,500
Other................... 63,031 63,031
----------- -----------
1,694,113 1,794,113
----------- -----------
Minority Interest........ 670,709 670,709
----------- -----------
Common Stock of
Subsidiaries Subject to
Redemption
($119,066 redemption
value).................. 115,114 115,114
----------- -----------
Shareholders' Investment:
Preferred stock, $100
par value, 50,000
shares authorized; none
issued.................
Common stock, $1 par
value, 350,000,000
shares authorized;
158,577,383 shares is-
sued(4)................ 158,577 158,577
Capital in excess of par
value.................. 874,463 874,463
Retained earnings....... 903,528 903,528
Treasury stock at cost,
15,991 shares.......... (550) (550)
Cumulative translation
adjustment............. (28,863) (28,863)
Deferred compensation... (39) (39)
Net unrealized gain on
available-for-sale in-
vestments.............. 9,960 9,960
----------- -----------
1,917,076 1,917,076
----------- -----------
Total Capitalization
(Long-term Obligations,
Minority Interest,
Common Stock of
Subsidiaries Subject to
Redemption and
Shareholders' Investment). $4,397,012 $ 4,497,012
=========== ===========
</TABLE>
- --------
(1) See Note 5 of Notes to Consolidated Financial Statements of Thermo
Electron incorporated by reference into the Prospectus.
(2) Senior convertible obligations include $172,500,000 principal amount of 4
1/2% Senior Convertible Debentures due 2003 and $18,284,000 principal
amount of 3 3/4% Senior Convertible Debentures due 2000 issued by Thermo
Instrument Systems Inc. that are guaranteed on a senior basis by Thermo
Electron.
(3) Convertible subordinated obligations include $585,000,000 principal amount
of 4 1/4% Convertible Subordinated Debentures due 2003 issued by Thermo
Electron. Convertible subordinated obligations also include $153,000,000
principal amount of 4 1/2% Convertible Subordinated Debentures due 2004
issued by
S-10
<PAGE>
Thermo Fibertek; $115,000,000 principal amount of 4 3/8% Convertible
Subordinated Debentures due 2004 issued by ThermoLase; $34,950,000 principal
amount of 4 7/8% Convertible Subordinated Debentures due 2000 issued by
Thermo Remediation Inc.; $15,048,000 principal amount of Non-Interest
Bearing Convertible Subordinated Debentures due 2001 and $50,000,000
principal amount of 4 7/8% Convertible Subordinated Debentures due 2004
issued by Thermo Ecotek Corporation; $65,000,000 principal amount of Non-
Interest Bearing Convertible Subordinated Debentures due 2003 issued by
Thermedics Inc.; $111,850,000 principal amount of 4 5/8% Convertible
Subordinated Debentures due 2003 issued by Thermo TerraTech Inc.; $8,450,000
principal amount of 3 3/4% Convertible Subordinated Debentures due 2000
issued by Thermo Voltek Corp.; $86,250,000 principal amount of 5%
Convertible Subordinated Debentures due 2000 issued by ThermoQuest
Corporation; $86,250,000 principal amount of 5% Convertible Subordinated
Debentures due 2000 issued by Thermo Optek Corporation; and $70,000,000
principal amount of 4 3/4% Convertible Subordinated Debentures due 2004
issued by Thermo Cardiosystems Inc.; all of which are guaranteed on a
subordinated basis by the Guarantor.
(4) Does not include shares reserved for possible issuance under employees'
and directors' stock plans and shares reserved for issuance upon possible
conversion of the 4 1/4% Convertible Subordinated Debentures due 2003.
Also does not include shares reserved for issuance for the possible
exchange of certain subsidiaries' convertible obligations into common
stock of Thermo Electron and shares reserved for issuance under the
Shareholder Rights Plan for Thermo Electron.
S-11
<PAGE>
SELECTED FINANCIAL INFORMATION OF THERMO ELECTRON
The selected financial information presented below as of and for the fiscal
years ended December 30, 1995 and December 28, 1996, and for the fiscal year
ended December 31, 1994, has been derived from Thermo Electron's Consolidated
Financial Statements, which have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report incorporated by
reference into the Prospectus. The selected financial information as of and
for the fiscal years ended January 2, 1993 and January 1, 1994, and as of
December 31, 1994, has been derived from Thermo Electron's Consolidated
Financial Statements, which have been audited by Arthur Andersen LLP, but have
not been included or incorporated by reference into the Prospectus. This
information should be read in conjunction with Thermo Electron's Consolidated
Financial Statements and related notes incorporated by reference into the
Prospectus. The selected financial information for the six-month periods ended
June 29, 1996 and June 28, 1997 has not been audited but, in the opinion of
Thermo Electron, includes all adjustments (consisting only of normal,
recurring adjustments) necessary to present fairly such information in
accordance with generally accepted accounting principles applied on a
consistent basis. The results of operations for the six-month period ended
June 28, 1997 are not necessarily indicative of results for the entire year.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
------------------------------------------------------------ ------------------------
JAN. 2, JAN. 1, DEC. 31, DEC. 30, DEC. 28, JUNE 29, JUNE 28,
1993(1) 1994(2) 1994(3) 1995 1996(4) 1996(4) 1997
---------- ---------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Revenues................ $ 999,228 $1,354,508 $ 1,729,191 $ 2,270,291 $ 2,932,558 $ 1,398,144 $ 1,638,521
---------- ---------- ----------- ----------- ----------- ----------- -----------
Costs and Operating
Expenses:
Cost of product and
service revenues...... 608,975 755,493 928,645 1,239,762 1,657,746 800,095 912,661
Expenses for research
and development and
new lines of business. 106,466 183,965 233,099 272,809 301,457 144,641 160,021
Selling, general and
administrative
expenses.............. 213,266 289,282 384,715 510,564 689,248 334,547 398,497
Restructuring and other
nonrecurring costs.... -- 6,616 650 21,938 37,641 25,980 4,951
---------- ---------- ----------- ----------- ----------- ----------- -----------
928,707 1,235,356 1,547,109 2,045,073 2,686,092 1,305,263 1,476,130
---------- ---------- ----------- ----------- ----------- ----------- -----------
Operating Income........ 70,521 119,152 182,082 225,218 246,466 92,881 162,391
Gain on Issuance of
Stock by Subsidiaries.. 30,212 39,863 25,283 80,815 126,599 72,387 48,880
Other Income (Expense),
Net.................... 1,842 (27,548) (989) (7,225) 1,486 (7,421) (726)
---------- ---------- ----------- ----------- ----------- ----------- -----------
Income Before Income
Taxes, Minority
Interest and Change in
Accounting Principle... 102,575 131,467 206,376 298,808 374,551 157,847 210,545
Provision for Income
Taxes.................. 27,750 33,513 70,703 98,711 110,845 42,650 70,423
Minority Interest
Expense................ 13,902 21,086 30,962 60,515 72,890 29,255 31,906
---------- ---------- ----------- ----------- ----------- ----------- -----------
Income Before Change in
Accounting Principle... 60,923 76,868 104,711 139,582 190,816 85,942 108,216
Change in Accounting
Principle, Net of Tax.. 1,438 -- -- -- -- -- --
---------- ---------- ----------- ----------- ----------- ----------- -----------
Net Income.............. $ 59,485 $ 76,868 $ 104,711 $ 139,582 $ 190,816 $ 85,942 $ 108,216
========== ========== =========== =========== =========== =========== ===========
Earnings per Share
Before Change in
Accounting Principle:
Primary................ $ .64 $ .74 $ .90 $ 1.10 $ 1.35 $ .63 $ .72
========== ========== =========== =========== =========== =========== ===========
Fully diluted.......... $ .60 $ .67 $ .80 $ .97 $ 1.22 $ .56 $ .67
========== ========== =========== =========== =========== =========== ===========
Earnings per Share:
Primary................ $ .62 $ .74 $ .90 $ 1.10 $ 1.35 $ .63 $ .72
========== ========== =========== =========== =========== =========== ===========
Fully diluted.......... $ .59 $ .67 $ .80 $ .97 $ 1.22 $ .56 $ .67
========== ========== =========== =========== =========== =========== ===========
Weighted Average Shares:
Primary................ 95,811 104,203 116,500 126,626 141,525 136,884 150,122
========== ========== =========== =========== =========== =========== ===========
Fully diluted.......... 111,818 130,618 151,229 159,246 175,700 175,583 175,893
========== ========== =========== =========== =========== =========== ===========
BALANCE SHEET DATA (AT
END OF PERIOD):
Working Capital......... $ 508,685 $ 833,839 $ 1,150,732 $ 1,317,146 $ 2,218,617 $ 1,952,457 $ 1,795,935
Total Assets............ 1,837,983 2,507,597 3,061,935 3,786,339 5,141,244 4,900,554 5,304,637
Long-term Obligations... 494,152 647,592 1,049,850 1,118,077 1,550,342 1,657,235 1,601,299
Common Stock of
Subsidiaries Subject to
Redemption............. 5,468 14,511 -- 17,513 76,525 17,669 115,114
Shareholders'
Investment............. 563,826 873,720 1,007,486 1,309,729 1,754,369 1,550,678 1,741,890
</TABLE>
- -------
(1) Reflects the adoption in fiscal 1992 of Statement of Financial Accounting
Standards No. 106, "Accounting for Post-retirement Benefits Other Than
Pensions."
(2) Reflects the 1993 public offering of common stock for net proceeds of $246
million.
(3) Reflects the issuance of $345 million principal amount of convertible
debentures.
(4) Reflects the issuance of $585 million principal amount of convertible
debentures.
S-12
<PAGE>
DESCRIPTION OF DEBENTURES AND THE GUARANTEES
The following information concerning the Debentures offered hereby (referred
to in the Prospectus as "Debt Securities") supplements and, to the extent
inconsistent therewith, replaces the description of the general terms and
provisions of the Debt Securities set forth in the Prospectus and should be
read in conjunction with the statements under "Description of Debt Securities
of the Company and the Guarantees" in the Prospectus. Capitalized terms
defined in the Prospectus are used herein with the same meanings unless
otherwise defined herein.
GENERAL
The Debentures are an issue of the Company's Debt Securities described in
the Prospectus. The Debentures offered hereby will be limited to $110 million
aggregate principal amount (plus the aggregate principal amount of any
Debentures issued upon exercise of the Underwriters' over-allotment option).
The Debentures will mature on November 1, 2007 and will bear interest from
November 3, 1997 at the annual rate shown on the cover page of this Prospectus
Supplement, payable semi-annually in arrears, on each May 1 and November 1,
beginning on May 1, 1998, (1) in the case of Registered Debentures (as defined
below), to the persons in whose names the Debentures are registered at the
close of business on the April 15 or October 15, as the case may be, next
preceding such May 1 or November 1, and (2) in the case of Bearer Debentures
(as defined below), to the persons surrendering the applicable Coupons
appertaining thereto. Principal, premium, if any, and interest on Registered
Debentures will be payable through the Depository, as described in the
Prospectus under "Description of Debt Securities of the Company and the
Guarantees--Global Securities." Additional Amounts shall be payable on the
Debentures as described in the Prospectus under the caption "Description of
Debt Securities of the Company and the Guarantees--Payment of Additional
Amounts to Non United States Persons."
The Debentures will be Subordinated Securities issued under the Subordinated
Indenture and will be subordinated and subject in right of payment to the
prior payment in full of Senior Indebtedness. The Debentures are guaranteed by
Thermo Electron, except that any payments under such Guarantees will be
subordinated and subject in right of payment to the prior payment in full of
all Senior Guarantor Indebtedness. At June 28, 1997, the Company had no Senior
Indebtedness and Senior Guarantor Indebtedness aggregated approximately
$304,951,000, stated on a pro forma basis to reflect the conversion of the
Guarantor's $175,186,000 principal amount of 5% Senior Convertible Debentures
due 2001. The Subordinated Indenture places no limitation on the amount of
additional Senior Indebtedness or Senior Guarantor Indebtedness or any other
indebtedness that may be incurred by the Company or Thermo Electron. See
"Description of Debt Securities of the Company and the Guarantees--
Subordination of Subordinated Securities," "--Guarantees," "--Subordination of
the Subordinated Guarantees" and "--Structural Subordination" in the
Prospectus.
The obligations represented by the Guarantees will rank pari passu with the
Guarantor's (i) obligations with respect to its 4 1/4% Convertible
Subordinated Debentures due 2003 and (ii) subordinated guarantee of the 4 5/8%
Convertible Subordinated Debentures due 2003 issued by Thermo TerraTech Inc.,
the 3 3/4% Convertible Subordinated Debentures due 2000 issued by Thermo
Voltek Corp., the 4 7/8% Convertible Subordinated Debentures due 2000 issued
by Thermo Remediation Inc., the 5% Convertible Subordinated Debentures due
2000 issued by ThermoQuest Corporation, the 5% Convertible Subordinated
Debentures due 2000 issued by Thermo Optek Corporation, the Non-Interest
Bearing Convertible Subordinated Debentures due 2001 and the 4 7/8%
Convertible Subordinated Debentures due 2004 issued by Thermo Ecotek
Corporation, the Non-Interest Bearing Convertible Subordinated Debentures due
2003 issued by Thermedics Inc., the 4 3/4% Convertible Subordinated Debentures
due 2004 issued by Thermo Cardiosystems Inc., the 4 1/2% Convertible
Subordinated Debentures due 2004 issued by Thermo Fibertek, and the 4 3/8%
Convertible Subordinated Debentures due 2004 issued by ThermoLase. See
"Capitalization of Thermo Electron."
In addition, the obligations represented by the Guarantees will rank pari
passu with the Guarantor's subordinated guarantee of the obligations to redeem
the common stock of ThermoLyte Corporation, Thermo Fibergen Inc. and
ThermoLase. The obligation of ThermoLyte Corporation to redeem its common
stock requires ThermoLyte Corporation at the option of the holders to redeem
up to an aggregate of 1,845,000
S-13
<PAGE>
shares of its common stock for $10.00 per share at the end of 1998 and 1999.
The obligation of Thermo Fibergen Inc. to redeem its common stock requires
Thermo Fibergen Inc. at the option of the holders to redeem up to an aggregate
of 4,715,000 shares of its common stock for $12.75 per share during September
2000 and 2001. The obligation of ThermoLase to redeem its common stock
requires ThermoLase at the option of the holders to redeem up to an aggregate
of 2,000,000 shares of its common stock for $20.25 per share during the 20
business days ending April 30, 2001.
Senior Guarantor Indebtedness shall include, without limitation, the
indebtedness represented by Thermo Electron's guarantee of the 4 1/2% Senior
Convertible Debentures due 2003 and the 3 3/4% Senior Convertible Debentures
due 2000 issued by Thermo Instrument Systems Inc.
The obligations represented by the Guarantees will be effectively
subordinated to all indebtedness and other liabilities, including current
liabilities and commitments under leases, if any, of Thermo Electron's
subsidiaries. Thermo Electron's consolidated subsidiaries had indebtedness and
other liabilities (other than indebtedness of such subsidiaries that is
guaranteed by Thermo Electron on a senior basis and included in Senior
Guarantor Indebtedness) included on Thermo Electron's consolidated balance
sheet of approximately $1,760,000,000 as of June 28, 1997, stated on a pro
forma basis to reflect the subsequent issuances of convertible subordinated
debentures by Thermo Fibertek and ThermoLase. The redemption rights referred
to above are not included in such amount.
The Debentures will be issued both in registered form, without interest
Coupons ("Registered Debentures"), and in bearer form, with interest Coupons
attached ("Bearer Debentures"). Registered Debentures will be represented
solely by a global Debenture registered in the name of Cede & Co., as the
nominee of DTC, and the transfer of Registered Debentures will be registrable
only through the Depository, as described in the Prospectus under "Description
of Debt Securities of the Company and the Guarantees--Global Securities."
Bearer Debentures initially will be represented by a temporary global Bearer
Debenture, without interest coupons attached, to be deposited with Bankers
Trust Company in London, as common depository, for subscribers' respective
accounts at Morgan Guaranty Trust Company of New York, Brussels Office, as
operator of the Euroclear Clearance System, or Cedel Bank, S.A. (the "Common
Depository") on or about the Closing Date. The temporary global Bearer
Debenture will be exchangeable for definitive Bearer Debentures, each with
related interest Coupons attached, commencing on the Exchange Date upon
certification that the beneficial owners of such Bearer Debentures are not
United States persons or other persons who have purchased such Bearer
Debentures for resale to United States persons. The temporary global Bearer
Debenture will also be exchangeable for Registered Debentures at any time
without certification of non-U.S. status provided that such exchange is
permitted by the rules and procedures then in effect of Cedel, Euroclear and
DTC and provided, further, that so long as Registered Debentures are
represented solely by a global Debenture, such exchange may be effected only
for an interest in such global Debenture, by and through a DTC Participant (as
such term is defined in the Prospectus). See "Description of Debt Securities
of the Company and the Guarantees--Registration, Transfer, Payment and Paying
Agents," "--Global Securities" and "--Limitations on Issuance of Bearer
Securities" in the Prospectus. Restrictions on the offer, sale and delivery of
Bearer Debentures are described in the Prospectus under the caption
"Description of Debt Securities of the Company and the Guarantees--Limitations
on Issuance of Bearer Securities." Registered Debentures may not be exchanged
for Bearer Debentures.
Bearer Debentures and Registered Debentures issued in global form shall be
dated the date of original issuance of the Debentures. All other Debentures
shall be dated the date of their authentication.
Registered Debentures shall be issued in denominations of $1,000 and any
integral multiple thereof and Bearer Debentures shall be issued in
denominations of $1,000 and $10,000, except that the global Registered
Debenture held by the Depository and the temporary global Bearer Debenture
held by the Common Depository may be in any denomination approved by the
officer(s) executing such Debentures.
The Debentures have been approved for listing on the American Stock
Exchange.
The place of payment, place of registration of transfer and exchange and the
place of transfer, exchange or conversion for the Registered Debentures and
the Guarantees endorsed thereon, shall be the Borough of Manhattan, The City
of New York, and the Corporate Trust Office of the Trustee shall be the
Company's and the Guarantor's Office or Agency in the Borough of Manhattan,
The City of New York for such purpose. The
S-14
<PAGE>
places of payment and conversion for the Bearer Debentures and the Guarantees
endorsed thereon, shall be London, England and Luxembourg and the offices of
the Trustee in London and Luxembourg shall be the Offices or Agencies for such
purpose and the offices of the Trustee in London and Luxembourg shall be the
Company's and the Guarantor's Paying Agents in London and Luxembourg,
respectively. The Trustee initially shall be the Security Registrar, one of
the Authenticating Agents, the Paying Agent and the Conversion Agent. The
Trustee presently has its Corporate Trust Office at Four Albany Street, 4th
Floor, New York, NY 10006, its Office in London at 1 Appold Street, Broadgate,
London, EC2A 2HE, England, and its Office in Luxembourg at 14 Boulevard, F. D.
Roosevelt, L-2450 Luxembourg. The Company and the Guarantor may subsequently
appoint an Office or Agency in addition to or other than the Borough of
Manhattan, The City of New York with respect to the Registered Debentures and
London, England and Luxembourg with respect to the Bearer Debentures.
CONVERSION RIGHTS
The Debentures will be convertible into Common Stock at any time (except
that temporary global Debentures in bearer form will not be convertible until
receipt of definitive Debentures) and prior to maturity, unless previously
redeemed or repaid, at a Conversion Price of $27 per share, subject to
adjustment in certain events (unless a Debenture shall have been called for
redemption or delivered for repayment, in which case such right terminates at
the close of business on the fifth business day preceding the redemption date
or the second business day preceding the repayment date, as the case may be,
unless the Company defaults in making the payment due upon redemption or
repayment, as the case may be). The conversion price is subject to adjustment
in certain events which are described in the Prospectus under the caption
"Description of Debt Securities of the Company and the Guarantees --Conversion
Rights."
The Company may elect, in its sole discretion, within two business days
following a conversion date, to (i) pay cash equal to the Market Price (as
defined in the Prospectus) in respect of all or a portion of the shares of
Common Stock otherwise issuable upon such conversion (the "Cash Settlement
Option") and/or (ii) deliver fully paid and non-assessable shares of Guarantor
Common Stock in respect of all or a portion of the shares of Common Stock
otherwise issuable upon such conversion (the "Stock Settlement Option").
In the event the Company exercises the Cash Settlement Option, the
provisions of the Subordinated Indenture providing for such Cash Settlement
Option described under "Description of Debt Securities of the Company and the
Guarantees --Conversion Rights" in the Prospectus will apply to the
Debentures.
In the event the Company exercises the Stock Settlement Option, the number
of shares of Guarantor Common Stock to be so delivered shall be equal to the
quotient obtained by dividing (a) the product of (i) the number of shares of
Common Stock (as to which the Stock Settlement Option is being exercised) into
which the Debenture is being converted multiplied by (ii) the Market Price (as
defined below) of a share of Common Stock by (b) the Market Price of a share
of Guarantor Common Stock. For purposes of the Stock Settlement Option,
"Market Price" shall mean either (a) if the conversion date is (i) a date
prior to the date on which the Company gives notice of redemption of all (but
not less than all) of the Debentures in accordance with the provisions of
Section 1104 of the Subordinated Indenture (the "Redemption Notice Date") or
(ii) a date on or after the Redemption Notice Date and the Company has not
specified in its redemption notice that the Company will exercise the Stock
Settlement Option with respect to all or a portion of the shares of Common
Stock deliverable upon conversion of the Debentures, the Closing Price Per
Share of the Common Stock or Guarantor Common Stock, as the case may be, on
such conversion date, or if the date is not a Trading Day (as defined in the
Prospectus), on the last Trading Day preceding such date, or (b) if the
conversion date occurs on or after the Redemption Notice Date and the Company
has specified in its redemption notice that the Company will exercise the
Stock Settlement Option with respect to all or a portion of the shares of
Common Stock deliverable upon conversion of the Debentures, the Weighted
Average Price (as defined in the Prospectus) of the Common Stock or the
Guarantor Common Stock, as the case may be, over all of the Trading Days
falling within the twenty-day period commencing on the Redemption Notice Date.
"Closing Price Per Share" means, with respect to Common Stock or Guarantor
Common Stock, as the case may be, for any day, the reported last sales price
regular way per share or, in case no such reported sale takes place on such
day, the average of the reported closing bid and reported closing asked prices
regular way, or, if more than one in either case, the average of the average
reported closing bid and average reported closing asked prices, as reported on
the principal national or regional United States
S-15
<PAGE>
securities exchange on which such Common Stock or Guarantor Common Stock, as
the case may be, is listed or admitted to trading or, if such Common Stock or
Guarantor Common Stock, as the case may be, is not listed or admitted to
trading on a United States national or regional securities exchange, as
reported by the National Association of Securities Dealers Automated Quotation
System or by the National Quotation Bureau Incorporated. In the absence of
such quotations, the Closing Price Per Share shall be reasonably determined on
the basis of such quotations or other data as the Company or the Guarantor, as
the case may be, considers appropriate.
OPTIONAL REDEMPTION
The provisions of the Subordinated Indenture providing for the redemption of
the Debentures described under "Description of Debt Securities of the Company
and the Guarantees--Redemption" in the Prospectus will apply to the
Debentures.
The Debentures may be redeemed, at the option of the Company, in whole or in
part at any time on or after November 1, 2000, upon notice as described in the
Prospectus, at 100% of their principal amount, together with accrued interest
to the date fixed for redemption; provided, however, that the Debentures may
also be so redeemed at any time in the event of certain changes in United
States taxation. See "United States Taxation" below and see "Description of
Debt Securities of the Company and the Guarantees--Redemption--Redemption for
Taxation Reasons" and "--Payment of Additional Amounts to Non United States
Persons" in the Prospectus.
Holders of Bearer Debentures are responsible for making arrangements to
prevent loss of the right to convert the Debentures in the event of
redemption, for example, by reading the newspapers in which the notice of
redemption may be published. See "--Conversion Rights" above and "Description
of Debt Securities of the Company and the Guarantees--Redemption" and "--
Notices" in the Prospectus.
REPAYMENT
If at any time prior to maturity, there occurs a Repayment Event with
respect to the Company, each holder of Debentures will have the right, at such
holder's option, to require the Company to repay such holder's Debentures, in
integral multiples of $1,000, for a cash amount equal to 100% of the principal
amount of such Debentures plus accrued interest (and any Additional Amounts)
to the date of repayment.
The provisions of the Subordinated Indenture providing for the repayment by
the Company of the Debentures described under "Description of Debt Securities
of the Company and the Guarantees--Redemption--Repayment at Option of Holder"
in the Prospectus will apply to the Debentures.
UNITED STATES TAXATION FOR NON-U.S. PERSONS
In the opinion of Bingham Dana LLP, special tax counsel to the Company,
under present United States Federal income and estate tax law, and subject to
the discussion below concerning backup withholding:
(a) Payments outside of the United States of principal of, premium, if
any, and interest on the Debentures by the Company to any holder who is not
a United States person will not be subject to United States withholding
tax, if (1) the holder does not actually or constructively own 10 percent
or more of the total combined voting power of all classes of stock of the
Company entitled to vote, (2) the holder is not a controlled foreign
corporation as to the United States that is related to the Company through
stock ownership, (3) the holder is not a bank extending credit pursuant to
a loan agreement entered into in the ordinary course of business, and (4)
if the Debenture is a Registered Debenture, either the beneficial owner of
the Debenture or a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") holding the
Debenture on behalf of such owner files a statement with the Company or its
agent to the effect that the beneficial owner is not a United States
person. Under United States Treasury regulations, this requirement will be
fulfilled if the beneficial owner certifies, under penalties of perjury,
that he is not a United States person and provides his name and address,
and any financial institution holding the Debenture on behalf of
S-16
<PAGE>
the beneficial owner certifies, under penalties of perjury, that such
statement has been received, and furnishes the Company or its agent with a
copy thereof. Recently finalized Treasury regulations (the "Withholding
Regulations") will change the methods for satisfying this certification
requirement. The Withholding Regulations also will require, in the case of
Debentures held by a foreign partnership, that (a) this certification
generally be provided by the partners rather than by the foreign
partnership and (b) the partnership provide certain information, including
a United States employer identification number. A look-through rule would
apply in the case of tiered partnerships. The Withholding Regulations will
become effective for payments made after December 31, 1998.
(b) Gain realized by a holder who is not a United States person on the
sale, exchange, redemption or other disposition of a Debenture (including
without limitation any gain recognized as a result of the Company's
election to pay cash or to deliver Guarantor Common Stock in lieu of
issuing shares upon conversion of a Debenture into Common Stock) will not
be subject to United States withholding tax and will not be subject to
United States Federal income tax if such holder does not have a connection
with or status with respect to the United States, as described in clauses
(a) and (f) under "Payment of Additional Amounts to Non United States
Persons" in the Prospectus, including, without limitation, in the case of a
nonresident alien individual, if the income from the sale of such Debenture
is not attributable to an office or other fixed place of business within
the United States.
(c) A Debenture or Coupon held by an individual who at the time of death
is not a citizen or resident of the United States will not be subject to
United States Federal estate tax as a result of such individual's death, if
the individual does not actually or constructively own 10 percent or more
of the total combined voting power of all classes of stock of the Company
entitled to vote and if at the time of his death payments with respect to
such Debenture or Coupon would not have been effectively connected with the
conduct by such individual of a trade or business within the United States.
(d) Except in connection with the payment of interest paid as a result of
conversion (and, as discussed in clause (b) above, in connection with the
recognition of gain by reason of the Company's election to pay the holder
the market price in cash or Guarantor Common Stock for all or a portion of
the shares issuable upon conversion of a Debenture in lieu of issuing such
shares), generally no United States Federal income tax will be imposed upon
holders in connection with the conversion of a Debenture into shares of
Common Stock.
(e) Dividends paid on shares of Common Stock and Guarantor Common Stock
held by a holder who is not a United States person will generally be
subject to United States withholding tax at a rate of 30 percent, or such
lower rate as may be provided by an applicable tax treaty, but will not be
subject to any additional information reporting or backup withholding as
discussed below. Under the Withholding Regulations, a holder who is not a
United States person who wishes to claim the benefit of an applicable tax
treaty rate would be required to satisfy applicable certification
requirements. In the case of Common Stock and Guarantor Common Stock held
by a foreign partnership, the Withholding Regulations will require that (a)
this certification generally be provided by the partners rather than by the
foreign partnership and (b) the partnership provide certain information,
including a United States employer identification number. A look-through
rule would apply in the case of tiered partnerships. The Withholding
Regulations will become effective for payments made after December 31,
1998.
(f) Shares of Common Stock and Guarantor Common Stock held by an
individual at the time of his death (or previously transferred subject to
certain rights or powers or transferred by gift within three years of
death) will be subject to United States Federal estate tax unless otherwise
provided by an applicable treaty.
Under current United States Federal income tax law, payments of principal,
premium, if any, and interest made within the United States by the Company or
its paying agents are subject to information reporting and possible "backup"
withholding at a rate of 31 percent. Information reporting and backup
withholding do not apply to payments of interest, principal, and premium, if
any, made outside the United States by the Company or a paying agent on a
Bearer Debenture or Coupon, or to payments made on a Registered Debenture if
the certifications described in (a)(4) are received, unless, in either case,
the Company or any of its paying agents has
S-17
<PAGE>
actual knowledge that the payee is a United States person. In addition, if
interest, principal or premium payments are collected by an office outside the
United States of a custodian, nominee or the agent acting on behalf of a
beneficial owner of a Bearer Debenture, such custodian, nominee or other agent
will not be required to apply backup withholding to payments made to such
owner. However, if such custodian, nominee or other agent is a United States
person, a controlled foreign corporation for United States tax purposes, or a
foreign person 50 percent or more of whose gross income is from a United
States trade or business, information reporting would be required with respect
to payments made to the owner unless such custodian, nominee or other agent
has documentary evidence in its files of the owner's foreign status and has no
actual knowledge to the contrary, or unless the owner otherwise established an
exemption. In addition, the above criteria relating to backup withholding also
apply to any original issue discount relating to the Debentures. The Internal
Revenue Service has indicated that it is studying the possible application of
backup withholding in the case of foreign offices of such custodians, nominees
and agents. Payment of principal, premium, if any, and interest to or through
the United States office of such a custodian, nominee or agent is subject to
information reporting and backup withholding unless the owner certifies its
non-United States status or otherwise establishes an exemption from
information reporting and backup withholding.
Under current United States Federal income tax law, payments of the proceeds
of the sale (including a redemption) of a Debenture or Coupon to or through a
foreign office of a broker will not be subject to backup withholding. However,
if such broker is a United States person, a controlled foreign corporation for
United States tax purposes, or a foreign person 50 percent or more of whose
gross income is from a United States trade or business, information reporting
will apply to such payments unless such broker has documentary evidence in the
files of the owner's foreign status and has no actual knowledge to the
contrary or unless the owner otherwise establishes an exemption. In addition,
the Internal Revenue Service has indicated that it is studying the possible
application of backup withholding in the case of foreign offices of such
brokers. Payment of the proceeds of a sale (including a redemption) of a
Debenture or Coupon to or through the United States office of a broker is
subject to information reporting and backup withholding unless the holder
certifies as to its non-United States status or otherwise establishes an
exemption from information reporting and backup withholding.
The discussion of taxation in the United States assumes that the Company is
at no time a United States real property holding corporation (within the
meaning of Section 897(c) of the Internal Revenue Code). Under present law,
the Company would not be a United States real property holding corporation so
long as (a) the fair market value of its United States real property interests
is less than (b) 50 percent of the sum of the fair market value of its United
States real property interests, interests in real property located outside the
United States, and its other assets which are used or held for use in a trade
or business.
As used in this section, "United States person" means a citizen or resident
of the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States, an estate the income of
which is subject to United States Federal income taxation regardless of its
source, any trust if a court within the United States is able to exercise
primary supervision of the administration thereof and one or more United
States persons has the authority to control all substantial decisions thereof
and any other person included within the definition of United States person
under the Internal Revenue Code and the regulations thereunder; provided,
however, that, except in the discussion of backup withholding above, the term
"United States person" shall not include a branch or agency of a U.S. bank or
insurance company that is operating outside the United States for valid
business reasons as a locally regulated branch or agency engaged in the
banking or insurance business and not solely for the purpose of investing in
securities not registered under the Securities Act of 1933, as amended (the
"Securities Act").
Under recently enacted legislation, no deduction would be allowed for any
interest paid or accrued on a convertible debt instrument such as the
Debentures if the instrument is issued after June 8, 1997 (subject to certain
transition rules) and there is a substantial certainty that the holder will
exercise the conversion option. A congressional committee report explanation
of the legislation provides some clarification of this provision, noting that
"it is not expected that the provision will affect debt with a conversion
feature where the conversion price is significantly higher than the market
price of the stock on the issue date of the debt." This provision creates
uncertainty as to the deductibility of interest on instruments such as the
Debentures; however, the Company believes that the provision will not apply to
the Debentures.
S-18
<PAGE>
UNDERWRITING
Lehman Brothers Inc. and Goldman, Sachs & Co. (collectively, the
"Underwriters") have severally agreed, subject to the terms and conditions of
the Underwriting Agreement and related Terms Agreement (collectively, the
"Underwriting Agreement"), to purchase from the Company, and the Company has
agreed to sell to each Underwriter, the following principal amount of
Debentures at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus Supplement:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF THE DEBENTURES
------------ -----------------
<S> <C>
Lehman Brothers Inc..................................... $ 55,000,000
Goldman, Sachs & Co..................................... 55,000,000
------------
Total................................................. $110,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
to purchase the Debentures are subject to the approval of certain legal
matters by counsel and to certain other conditions, and that if any of the
Debentures are purchased by the Underwriters pursuant to the Underwriting
Agreement, all Debentures agreed to be purchased by the Underwriters pursuant
to the Underwriting Agreement must be so purchased.
The Company has been advised that the Underwriters propose to offer the
Debentures directly to the public initially at the public offering price set
forth on the cover page of this Prospectus Supplement and to certain selected
dealers at such public offering price less a selling concession not to exceed
1.2% of the principal amount of such Debentures. The Underwriters may allow
and the selected dealers may reallow a concession not to exceed 0.5% of the
principal amount of such Debentures to other dealers. After the initial
offering of the Debentures, the public offering price, the concession to
selected dealers and the reallowance to other dealers may be changed by the
Underwriters.
The Company has granted to the Underwriters an option to purchase up to an
aggregate of $16,500,000 principal amount of Debentures at the initial public
offering price less the aggregate underwriting discounts and commissions shown
on the cover page of this Prospectus Supplement, solely to cover over-
allotments, if any. The option may be exercised at any time up to 30 days
after the date of this Prospectus Supplement. To the extent that the
Underwriters exercise such option, each of the Underwriters will be committed
(subject to certain conditions) to purchase a number of option Debentures
proportionate to such Underwriter's initial commitment.
Bearer Debentures are subject to U.S. tax law requirements and may not be
offered, sold or delivered in the United States or to United States persons,
except in certain transactions permitted by U.S. tax regulations. Terms used
in this paragraph have the meanings given to them by the Internal Revenue Code
and the regulations thereunder.
Each Underwriter has severally represented and agreed that (i) it has not
offered or sold and will not offer or sell in the United Kingdom any
Debentures except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purpose of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995
(the "Regulations"), (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 and the Regulations with respect
to anything done by it in relation to the Debentures in, from or otherwise
involving the United Kingdom and (iii) it has only issued or passed on, and
will only issue or pass on, to any person in the United Kingdom any document
received by it in connection with the issue of the Debentures, if that person
is of a kind described in Article 11 (3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996, as amended by article 4
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1997, or is a person to whom the document may otherwise lawfully be
issued or passed on.
S-19
<PAGE>
The Company and Thermo Electron have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act,
and to contribute to payments which the Underwriters may be required to make
in respect thereof.
The Company and Thermo Electron have agreed that they will not, directly or
indirectly, offer for sale, sell or otherwise dispose of (or enter into any
hedging transaction or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any
shares of Common Stock or any security convertible or exchangeable for Common
Stock within 90 days after the date of this Prospectus Supplement (other than
shares sold to Thermo Electron or its subsidiaries or shares issuable pursuant
to employee benefit plans, stock option plans or other compensation plans
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights and other than the issuance of shares of Common Stock as
consideration for the acquisition of one or more businesses provided that such
Common Stock may not be resold prior to the expiration of the 90-day period
referenced above), or sell or grant options, rights or warrants with respect
to any shares of Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof) otherwise than in accordance with
the Underwriting Agreement without the prior written consent of the
Underwriters.
The Underwriters have in the past provided, and may in the future provide,
investment banking services to the Company or Thermo Electron or certain of
their affiliates.
The Debentures will constitute new securities with no established trading
market. The Debentures have been approved for listing on the American Stock
Exchange. No assurance can be given as to the liquidity of or the trading
market for the Debentures.
Until the distribution of the Debentures is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters
and certain selling group members to bid for and purchase Debentures or shares
of Common Stock. As an exception to these rules, the Underwriters are
permitted to engage in certain transactions that stabilize the price of the
Debentures and the Common Stock. Such transactions
may consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Debentures or the Common Stock.
In addition, if the Underwriters over-allot (i.e., if they sell more
Debentures than are set forth on the cover page of this Prospectus
Supplement), and thereby create a short position in the Debentures in
connection with this offering, the Underwriters may reduce that short position
by purchasing Debentures in the open market. The Underwriters also may elect
to reduce any short position by exercising all or part of the over-allotment
option described herein.
In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of such purchases.
Neither the Company, Thermo Electron nor any of the Underwriters makes any
representation or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of the Debentures
or the Common Stock. In addition, neither the Company, Thermo Electron nor any
of the Underwriters makes any representation that the Underwriters will engage
in such transactions or that such transactions, once commenced, will not be
discontinued without notice.
Purchasers of the Debentures may be required to pay stamp taxes and other
charges in accordance with the laws and practices of the country of purchase
in addition to the offering price set forth on the cover page hereof.
S-20
<PAGE>
LEGAL MATTERS
The validity of the Debentures to which this Prospectus Supplement relates
will be passed upon for the Company and Thermo Electron by Seth H. Hoogasian,
Esq., General Counsel of the Company and the Guarantor. Mr. Hoogasian is a
full-time employee of Thermo Electron and owns or has the right to acquire
7,800 shares of Common Stock and 108,058 shares of Guarantor Common Stock. The
validity of the Debentures offered hereby will be passed upon for the
Underwriters by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts.
Certain United States tax matters are being passed upon for the Company and
the Guarantor by Bingham Dana LLP, Boston, Massachusetts.
S-21
<PAGE>
$250,000,000
THERMOTREX CORPORATION
(A SUBSIDIARY OF THERMO ELECTRON CORPORATION)
COMMON STOCK AND DEBT SECURITIES
THERMO ELECTRON CORPORATION
GUARANTEES OF THE DEBT SECURITIES OF THERMOTREX CORPORATION
ThermoTrex Corporation (the "Company") may offer and sell from time to time,
together or separately, shares of its common stock, $.01 par value per share
(the "Common Stock"), and its debt securities ("Debt Securities"), which may
be either senior debt securities ("Senior Securities") or subordinated debt
securities ("Subordinated Securities"), consisting of debentures, notes and/or
other unsecured evidences of indebtedness. As of the date of this Prospectus,
the Company is a 52%-owned subsidiary of Thermo Electron Corporation ("Thermo
Electron"). Thermo Electron will unconditionally guarantee on a senior or
subordinated basis, as the case may be, the payment of principal of, premium,
if any, and interest on the Debt Securities (the "Guarantees"). The Common
Stock and the Debt Securities in one or more series (collectively, together
with the Guarantees, the "Securities") may be offered, separately or together,
at prices and terms to be set forth in one or more supplements to this
Prospectus (each a "Prospectus Supplement") up to an aggregate initial
offering price of $250,000,000. Any Debt Securities sold hereunder will be
denominated in U.S. dollars. Specific terms of the Securities for which this
Prospectus is being delivered will be set forth in the applicable accompanying
Prospectus Supplement including, where applicable, (i) in the case of Debt
Securities, the specific designation, aggregate principal amount,
denominations, maturity, premium, rate of interest (or method of calculation
thereof) and time of payment thereof, terms for redemption at the option of
the Company or the holder, terms for any sinking fund payments, subordination
provisions, if any, terms, if any, providing for conversion of the Debt
Securities into Common Stock (or, in certain instances, cash or common stock
of Thermo Electron in lieu thereof), the form of the Debt Securities (which
may be registered or bearer, or certificated or global), the initial public
offering price and certain other terms of the offering and sale of the Debt
Securities and the terms of the Guarantees in respect of which this Prospectus
is being delivered; and (ii) in the case of Common Stock, the number of shares
and initial public offering price of the Common Stock and certain terms of the
offering and sale thereof. The Prospectus Supplement may also contain
information, as applicable, about certain U.S. federal income tax
considerations relating to, and any listing on a securities exchange of, the
Securities for which the Prospectus Supplement is being delivered. The Common
Stock is listed on the American Stock Exchange. Any Common Stock offered will
be listed, subject to notice of issuance, on such exchange.
The Securities may be sold by the Company and Thermo Electron directly or
indirectly through agents, underwriters or dealers as designated from time to
time, or through a combination of such methods. See "Plan of Distribution."
The applicable accompanying Prospectus Supplement will set forth the names of
any underwriters, dealers or agents involved in the sale of the Securities in
respect of which this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them. See "Plan of Distribution" for
possible indemnification arrangements with underwriters, dealers and agents.
This Prospectus may not be used to consummate sales of Securities unless
accompanied or, to the extent permitted by applicable law, preceded by a
Prospectus Supplement.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is September 11, 1997.
<PAGE>
AVAILABLE INFORMATION
Both the Company and Thermo Electron are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith file reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, DC 20549; and at the Commission's regional
offices at 500 West Madison Street, Chicago, Illinois 60661; and 7 World Trade
Center, New York, New York 10048. Copies of such material can be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, DC 20549, at prescribed rates. The Commission also maintains
a Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Commission, including the Company and Thermo Electron; the address of such Web
site is http://www.sec.gov. The Common Stock is listed on the American Stock
Exchange, and such material that relates to the Company may also be inspected
at the offices of the American Stock Exchange, 86 Trinity Place, New York, New
York 10006. Thermo Electron's common stock is listed on the New York Stock
Exchange, and such material that relates to Thermo Electron may also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
The Company and Thermo Electron have filed with the Commission a
Registration Statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act"), of which this Prospectus
constitutes a part. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THE COMPANY
The following documents filed with the Commission by the Company (File No.
1-10791) are hereby incorporated by reference into this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended September 28,
1996, as amended;
(b) Quarterly Report on Form 10-Q for the fiscal quarter ended December
28, 1996;
(c) Quarterly Report on Form 10-Q for the fiscal quarter ended March 29,
1997;
(d) Quarterly Report on Form 10-Q for the fiscal quarter ended June 28,
1997; and
(e) The description of the Common Stock, which is contained in the
Company's Registration Statement on Form 8-A filed under the Exchange Act,
as such description may be amended from time to time.
THERMO ELECTRON
The following documents filed with the Commission by Thermo Electron (File
No. 1-8002) are hereby incorporated by reference into this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December 28,
1996, as amended;
(b) Quarterly Report on Form 10-Q for the fiscal quarter ended March 29,
1997;
(c) Quarterly Report on Form 10-Q for the fiscal quarter ended June 28,
1997;
(d) Current Report on Form 8-K filed with the Commission on January 22,
1997 with respect to Thermo Instrument Systems Inc.'s acquisition of Life
Sciences International PLC;
2
<PAGE>
(e) The description of Thermo Electron's common stock which is contained
in Thermo Electron's Registration Statement on Form 8-A filed under the
Exchange Act, as such description may be amended from time to time; and
(f) The description of Thermo Electron's Preferred Stock Purchase Rights
which is contained in Thermo Electron's Registration Statement on Form 8-A
filed under the Exchange Act, as such description may be amended from time
to time.
----------------
All documents filed by the Company or Thermo Electron pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
shall be deemed to be incorporated by reference into this Prospectus and to be
a part hereof from the respective dates of filing of such documents. Any
statement contained herein or in a document all or any portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such earlier statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
Thermo Electron will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by reference
(other than certain exhibits to such documents). Requests for such copies
should be directed to Sandra L. Lambert, Secretary, Thermo Electron
Corporation, 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02254-9046
(telephone: (617) 622-1000).
3
<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus and the applicable
Prospectus Supplement, prospective purchasers of the Securities offered hereby
should carefully consider the risk factors set forth in the Company's most
recent Annual Report on Form 10-K.
THE COMPANY
The Company and its subsidiaries develop, manufacture and market products
such as mammography and needle-biopsy systems, general purpose X-ray systems
and personal care products, as well as laser-based hair removal services. The
Company also conducts advanced technology research in communications,
avionics, X-ray detection, signal processing, advanced-materials technology,
and lasers.
ThermoLase Corporation ("ThermoLase"), a majority-owned subsidiary of the
Company, has developed a laser-based system for the removal of unwanted hair,
which is being marketed in the United States through ThermoLase's Spa Thira
salons and through licensing agreements with physicians, and in foreign
countries through joint ventures and other licensing arrangements with
companies or individuals. In addition, ThermoLase's wholly-owned CBI
Laboratories, Inc. subsidiary manufactures and markets skin-care and other
personal-care products. On August 12, 1997, ThermoLase sold an aggregate of
$115 million principal amount of its 4 3/8% subordinated debentures due 2004.
The ThermoLase debentures are convertible into shares of ThermoLase common
stock at $17.385 per share.
Trex Medical Corporation ("Trex Medical"), a majority-owned subsidiary of
the Company, designs, manufactures and markets mammography equipment and
minimally invasive stereotactic breast-biopsy systems used for the detection
of breast cancer, as well as general radiography (X-ray) equipment. In
addition, Trex Medical manufactures specialized X-ray equipment, including
imaging systems used in the diagnosis and treatment of coronary artery disease
and other vascular conditions, and radiographic fluoroscopy systems used to
diagnose gastrointestinal disorders and other conditions.
The Company was incorporated in December 1990 as a wholly-owned subsidiary
of Thermo Electron. The Company completed an initial public offering of its
Common Stock on July 24, 1991. Thermo Electron owned 9,914,990, or
approximately 52%, of the total outstanding shares of the Company's Common
Stock as of July 31, 1997. The Company's principal executive offices are
located at 10455 Pacific Center Court, San Diego, California 92121-4339, and
its telephone number is (619) 646-5300.
THERMO ELECTRON
Thermo Electron develops, manufactures and markets environmental monitoring
and analysis instruments; biomedical products including heart-assist devices,
respiratory care equipment, and mammography systems; paper-recycling and
papermaking equipment; alternative-energy systems; industrial process
equipment; and other specialized products. Thermo Electron also provides a
range of services for the personal care, environmental, laboratory analysis,
and metals-processing industries, and conducts advanced-technology research
and development. Thermo Electron performs its business through its divisions
and wholly owned subsidiaries, as well as majority-owned subsidiaries that are
partially owned by the public or by private investors.
Thermo Electron has developed leading market positions in many lines of
business, including environmental monitoring and analysis instruments,
mammography systems, biomass power plants, and paper-recycling equipment and
papermaking accessories. Thermo Electron is currently seeking to establish
leading market positions in the fields of left ventricular-assist systems,
explosives-detection systems, thermal soil-remediation services and dedicated
natural gas engines. Thermo Electron is developing new products in its
Advanced Technologies segment, as well as other segments.
4
<PAGE>
A key element in Thermo Electron's growth has been its ability to
commercialize innovative products and services emanating from research and
development activities conducted at Thermo Electron's various subsidiaries and
divisions. Thermo Electron's strategy has been to identify business
opportunities arising from social, economic and regulatory issues and seek a
leading market share through the application of proprietary technology. As
part of this strategy, Thermo Electron continues to focus on the acquisition
of complementary businesses that can be integrated into existing core
businesses to leverage Thermo Electron's access to new markets.
Thermo Electron believes that maintaining an entrepreneurial atmosphere is
essential to continuing its growth and development. In order to preserve this
environment, Thermo Electron adopted the strategy of having certain
subsidiaries sell a minority interest to outside investors. Thermo Electron
believes that this strategy provides additional motivation and incentives for
the management of the subsidiaries through the establishment of subsidiary-
level stock option incentive programs, as well as capital to support the
subsidiaries' growth. Thermo Electron's wholly owned and majority-owned
subsidiaries are provided with centralized strategic planning, corporate
development, administrative, financial and other services that would not be
available to many independent companies of similar size.
Thermo Electron, a Delaware corporation, was founded in 1956, completed its
initial public offering in 1967, and was listed on the New York Stock Exchange
in 1980. The principal executive office of Thermo Electron is located at 81
Wyman Street, Waltham, Massachusetts 02254-9046 (telephone: 617-622-1000).
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds from the sale of the Securities will be used by the Company for
general corporate purposes, which may include repayment of outstanding
indebtedness, capital expenditures, working capital requirements, research and
development, repurchase of its Common Stock and other securities and the
securities of any of its subsidiaries through open-market purchases or
otherwise, and possible future acquisitions. The precise amount and timing of
the application of such proceeds will depend upon the funding requirements of
the Company, and the availability and cost of other funds. Pending these uses,
the Company expects to invest the net proceeds primarily in investment grade
interest or dividend bearing instruments, either directly by the Company or
pursuant to a repurchase agreement with Thermo Electron. The Company's cash
equivalents may be invested from time to time pursuant to a repurchase
agreement with Thermo Electron. Under this agreement, the Company in effect
lends excess cash to Thermo Electron, which Thermo Electron collateralizes
with investments principally consisting of corporate notes, United States
government agency securities, money market funds, commercial paper, and other
marketable securities, in the amount of at least 103% of such obligation. The
Company's funds subject to the repurchase agreement will be readily
convertible into cash by the Company. The repurchase agreement currently earns
a rate based on the 90-day Commercial Paper Composite Rate plus 25 basis
points, set at the beginning of each quarter.
5
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of the Company and its subsidiaries, and of Thermo Electron and its
subsidiaries, for the periods indicated. For purposes of computing the ratios
of earnings to fixed charges, "earnings" represent income (loss) from
continuing operations before taxes and cumulative effect of change in
accounting principle, adjusted for minority interest in losses of consolidated
subsidiaries and minority interest in consolidated subsidiaries with fixed
charges, plus fixed charges, excluding capitalized interest. "Fixed charges"
for continuing operations consist of interest on indebtedness and amortization
of debt expense, capitalized interest and one-third of rental expense, which
is deemed to be the interest component of such rental expense.
<TABLE>
<CAPTION>
SIX MONTHS NINE MONTHS
FISCAL YEAR (1) ENDED ENDED
---------------------------- JUNE 28, 1997 JUNE 28, 1997
1992 1993 1994 1995 1996 (THERMO ELECTRON) (THERMOTREX)
---- ---- ----- ------ ----- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
THERMOTREX CORPORATION:
Ratio of earnings to
fixed charges.......... 2.58 3.57 30.00 119.41 37.04 N/A 3.42
THERMO ELECTRON
CORPORATION:
Ratio of earnings to
fixed charges.......... 3.05 3.21 3.63 4.17 4.18 4.89 N/A
</TABLE>
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(1) Thermo Electron's fiscal years ended on January 2, 1993, January 1, 1994,
December 31, 1994, December 30, 1995 and December 28, 1996. The Company's
fiscal years ended on January 2, 1993, January 1, 1994, December 31, 1994,
September 30, 1995 and September 28, 1996. In September 1995, the Company
changed its fiscal year end from the Saturday nearest December 31 to the
Saturday nearest September 30.
DESCRIPTION OF DEBT SECURITIES OF THE COMPANY AND THE GUARANTEES
The following description sets forth certain general terms and provisions of
the Debt Securities of the Company to which any Prospectus Supplement may
relate. The particular terms of the Debt Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may not
apply to the Debt Securities so offered will be described in the Prospectus
Supplement relating to such Debt Securities.
The Debt Securities constitute either senior Debt Securities (the "Senior
Securities") or subordinated Debt Securities (the "Subordinated Securities").
The Debt Securities will be unconditionally guaranteed by Thermo Electron as
to payment of principal, premium, if any, and interest and Additional Amounts
(as hereinafter defined), if any, except that the Subordinated Securities will
be guaranteed on a subordinated basis. See "Guarantees" and "Subordination of
Subordinated Guarantees." The Senior Securities and related Guarantees are to
be issued under an Indenture (the "Senior Indenture"), to be entered into
among the Company, Thermo Electron, as Guarantor, and Bankers Trust Company,
as trustee (the "Trustee"), the form of which Senior Indenture is incorporated
by reference as an exhibit to the Registration Statement containing this
Prospectus. The Subordinated Securities and related Guarantees will be issued
under an Indenture (the "Subordinated Indenture"), to be entered into among
the Company, Thermo Electron, as Guarantor, and Bankers Trust Company, as
trustee (in such capacity, also the "Trustee"), the form of which Subordinated
Indenture is also filed as an exhibit to the Registration Statement containing
this Prospectus. The Senior Indenture and the Subordinated Indenture are
sometimes collectively referred to herein as the "Indentures."
The following summary of certain provisions of the Debt Securities and the
Indentures does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all the provisions of the Indentures, including
the definitions therein of certain terms. Wherever particular provisions or
defined terms of the Indentures are referred to, such provisions or defined
terms are incorporated herein by reference. Certain defined
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terms in the Indentures are capitalized herein. Article or section references
in parentheses are to the applicable Indenture. References in this section to
the "Company" are solely to ThermoTrex Corporation and not to any of its
subsidiaries, and references in this section to the Guarantor or to Thermo
Electron are solely to Thermo Electron Corporation and not to any of its
subsidiaries.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "U.S. Dollars"
or "dollars").
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provide that Debt Securities may
be issued thereunder up to an aggregate principal amount that may be
authorized from time to time by the Company. Debt Securities may be issued in
one or more series thereunder. The Senior Securities will be unsecured
obligations of the Company and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company. Unless otherwise indicated in
the applicable Prospectus Supplement, the Subordinated Securities will be
unsecured and subordinated in right of payment to all existing and future
Senior Indebtedness of the Company, in the manner and to the extent described
below under "Subordination of Subordinated Securities." The Company's and
Thermo Electron's rights as stockholders and the rights of their respective
creditors, including, in the case of Thermo Electron by virtue of the
Guarantees, holders of the Debt Securities, to participate in the assets of
any of the Company's or Thermo Electron's subsidiaries, as the case may be,
upon a subsidiary's liquidation or recapitalization will be subject to the
prior claims of such subsidiary's creditors.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for specific terms, including (where
applicable): (1) the title or designation of such Debt Securities and the
series in which such Debt Securities shall be included; (2) the aggregate
principal amount of such Debt Securities and any limit on such aggregate
principal amount and the price or prices (expressed as a percentage of the
principal amount thereof) at which such Debt Securities will be issued; (3) if
there is more than one Trustee, the identity of the Trustees and, if not the
Trustee, the identity of each Security Registrar, and the identity of each
Paying Agent, Conversion Agent or Authenticating Agent with respect to the
Debt Securities; (4) the date or dates on which the principal of and premium,
if any, on such Debt Securities will be payable, or the method or methods, if
any, by which such date or dates will be determined; (5) the rate or rates
(which may be fixed or variable) at which such Debt Securities will bear
interest, if any, or the method or methods, if any, by which such rate or
rates are to be determined, the date or dates, if any, from which such
interest will accrue or the method or methods, if any, by which such date or
dates are to be determined, the interest payment dates, if any, on which such
interest shall be payable and the record dates, if any, for the interest
payable on Debt Securities in registered form on any interest payment dates,
whether and under what circumstances Additional Amounts on such Debt
Securities will be payable, and the basis upon which interest will be
calculated if other than that of a 360-day year of twelve 30-day months; (6)
if the Debt Securities are to be issuable in global form and are to be
issuable in definitive form (whether upon original issue or upon exchange of a
temporary Debt Security) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the terms of such
certificates, documents or conditions; (7) the place or places where the
principal of, premium, if any, and any interest or any Additional Amounts with
respect to such Debt Securities shall be payable, the place or places where
such Debt Securities may be surrendered for registration of transfer and
exchange and the place or places of transfer, exchange or conversion in the
circumstances described in the Prospectus Supplement or in the Indentures, if
other than The City of New York; (8) the period or periods within which, the
price or prices at which and the other terms and conditions upon which such
Debt Securities may be redeemed at the option of the Company; (9) the
obligation, if any, of the Company to redeem, repay or purchase such Debt
Securities pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the price
or prices at which, and the terms and conditions upon which such Debt
Securities shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation; (10) whether any such Debt Securities are to be
issuable in registered form ("Registered Securities") or bearer form ("Bearer
Securities")
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or both and, if in bearer form, the terms and conditions relating thereto,
including whether interest in respect of any portion of a temporary Bearer
Security in global form payable in respect of an interest payment date
therefor prior to the Exchange Date shall be paid to any clearing organization
with respect to the portion of such temporary Bearer Security held for its
account and any further terms and conditions relating to the crediting of such
interest payments to the persons entitled thereto, and any limitations on
issuance of such Bearer Securities (including in exchange for registered Debt
Securities of the same series); (11) the authorized denominations in which
Debt Securities will be issuable, if other than denominations of $1,000 and
any integral multiple thereof (in the case of Registered Securities) or $1,000
or $10,000 (in the case of Bearer Securities); (12) the terms, if any, on
which such Debt Securities may be exchanged for or converted into other
securities of the Company, and whether on such conversion the Company or the
Guarantor may substitute cash or securities of the Company or the Guarantor in
lieu of issuing Common Stock upon such conversion; (13) whether any such Debt
Securities will be issued in temporary or permanent global form and, if so,
the identity of the depository or depositories for such global Debt Security;
(14) the index, formulas or other method, if any, with reference to which the
amount of any payment of principal of, premium, if any, or interest on or any
Additional Amounts with respect to the Debt Securities will be determined;
(15) the portion of the principal amount of such Debt Securities which will be
payable upon declaration of acceleration of the Maturity thereof, if other
than the stated principal amount thereof; (16) any addition to, or
modification or deletion of, any covenant or Event of Default with respect to
such Debt Securities; (17) the terms, if any, upon which Debt Securities may
be exchangeable for other Securities; (18) in the case of an issue of
Subordinated Securities, the subordination provisions, if different from those
described under "Subordination of Subordinated Securities" and "Guarantees"
below; (19) the applicability of any provisions described below under
"Discharge, Defeasance and Covenant Defeasance;" (20) the date(s) that the
Securities are to be dated; and (21) any other terms of such Debt Securities
not inconsistent with the provisions of the Indentures. As used in this
Prospectus and any Prospectus Supplement relating to the offering of any Debt
Securities, references to the principal of and premium, if any, and interest,
if any, on Debt Securities will be deemed to include mention of the payment of
Additional Amounts, if any, required by the terms of Debt Securities in such
context. (Section 301)
Under the Indenture, the terms of the Debt Securities of any series may
differ, and the Company, without the consent of the holders of the Debt
Securities of any series, may reopen a previous series of Debt Securities and
issue additional Debt Securities of such series. (Section 301)
Debt Securities may be issued at a discount from their stated principal
amount. United States Federal income tax considerations and other special
considerations applicable to any such Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.
Debt Securities may be issued that qualify as "Variable Rate Debt
Securities" for tax purposes. United States Federal income tax considerations
and other special considerations applicable to any such Variable Rate Debt
Securities will be described in the applicable Prospectus Supplement.
Debt Securities may also be issued that provide for the use of an index to
determine the amount of payments of principal of, premium, if any, or interest
on the series of which such Debt Securities are a part, but which do not
qualify as Variable Rate Debt Securities. Special Federal income tax,
accounting and other considerations applicable to such Indexed Securities will
be described in the applicable Prospectus Supplement.
SUBORDINATION OF SUBORDINATED SECURITIES
The Subordinated Securities will be subordinated in right of payment to the
prior payment in full of all existing and future Senior Indebtedness of the
Company. Senior Indebtedness of the Company is defined for this purpose as the
principal of, premium, if any, and interest and other amounts due on or with
respect to the following, whether outstanding at the date of execution of the
Subordinated Indenture or thereafter incurred or created: (a) indebtedness of
the Company for money borrowed by the Company (including, without limitation,
purchase money obligations and money borrowed from Thermo Electron or any of
its affiliates), whether or not evidenced by debentures, bonds, notes or other
corporate debt securities or similar instruments issued by the Company; (b)
obligations to reimburse any bank or other person in respect of amounts paid
under letters of
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credit; (c) leases of real property, equipment or other assets, which leases
are capitalized in the Company's financial statements in accordance with
generally accepted accounting principles; (d) commitment, standby and other
fees due and payable to financial institutions with respect to credit
facilities available to the Company; (e) obligations of the Company under
interest rate and currency swaps, floors, caps or other similar arrangements
intended to hedge interest rates or currency exposure; (f) obligations secured
by any mortgage, pledge, lien or other encumbrance on property which is owned
or held by the Company subject to such mortgage, pledge, lien or other
encumbrance, whether or not the obligations secured thereby shall have been
assumed by the Company; (g) obligations of the Company constituting guarantees
of indebtedness of or joint obligations with another or others which would be
included in the preceding clauses (a), (b), (c), (d), (e) or (f); and (h)
modifications, renewals, extensions or refundings of any of the indebtedness,
leases, fees or obligations referred to in the preceding clauses (a), (b),
(c), (d), (e), (f) or (g) or debentures, notes or other evidences of
indebtedness issued in exchange therefor; provided that Senior Indebtedness
shall not include any particular indebtedness, lease, fee or obligation,
modification, renewal, extension, refunding or exchanged securities if, under
the express provisions of the instrument creating or evidencing the same, or
pursuant to which the same is outstanding, such indebtedness, lease, fee or
obligation or such modification, renewal, extension or refunding thereof or
exchanged securities are stated to be not superior in right of payment to the
Subordinated Securities. (Article Seventeen of the Subordinated Indenture) The
Subordinated Securities will rank pari passu with each other. The obligations
represented by the Subordinated Securities may rank pari passu with certain
other obligations of the Company, if so indicated in the applicable Prospectus
Supplement.
Upon (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
in connection therewith, relative to the Company or its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit or creditors
or any other marshaling of assets and liabilities of the Company, all
principal of, premium, if any, and interest due upon all Senior Indebtedness
must be paid in full before the Holders of the Subordinated Securities or the
Trustee are entitled to receive or retain any assets so distributed in respect
of the Subordinated Securities. (Section 1702) Upon the maturity of any Senior
Indebtedness by lapse of time, acceleration or otherwise, such Senior
Indebtedness shall first be paid in full, or duly provided for in cash, before
any payment is made by the Company, directly or indirectly, on the
Subordinated Securities. Upon the happening of any event of default with
respect to any Senior Indebtedness, as defined therein or in the instrument
under which it is outstanding, permitting the holders to accelerate the
maturity thereof, then, unless and until such event of default shall have been
cured or waived or shall have ceased to exist, no payment shall be made by the
Company, directly or indirectly, on account of the principal of, premium, if
any or interest on the Subordinated Securities and any Coupons appertaining
thereto. (Section 1703) By reason of these provisions, in such events, Holders
of the Subordinated Securities may recover less, ratably, than other creditors
of the Company, including holders of Senior Indebtedness. Further, in the
event of any of the foregoing the Company may not, upon conversion of any
Securities, elect the Cash Settlement Option (as hereinafter defined) or the
Stock Settlement Option (as hereinafter defined).
The provisions under "Structural Subordination" below (with the substitution
of the terms "Company" and "Debt Securities" for "Thermo Electron" and
"Guarantees," respectively) will be applicable in the case of the Debt
Securities, unless the context requires otherwise.
Subject to payment in full of all Senior Indebtedness of the Company, the
rights of Holders of the Subordinated Securities will be subrogated to the
rights of holders of Senior Indebtedness to receive payments or distributions
of cash, property or securities of the Company applicable to Senior
Indebtedness. (Section 1705)
The Subordinated Indenture places no limitation on the amount of additional
Senior Indebtedness or Senior Guarantor Indebtedness, or any other
indebtedness, that may be incurred by the Company or Thermo Electron. The
Company and Thermo Electron expect from time to time to incur additional
indebtedness, including Senior Indebtedness.
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GUARANTEES
Thermo Electron will unconditionally guarantee the due and punctual payment
of principal of, premium, if any, and interest on and any Additional Amounts
with respect to interest, if any, on the Debt Securities and the due and
punctual payment of any sinking fund or analogous payments provided pursuant
to the terms of such Debt Securities, when and as the same shall become due
and payable, whether at stated maturity, by declaration of acceleration, call
for redemption, repayment at the option of the holder or otherwise, whether or
not in the case of Subordinated Securities such payment is prohibited by the
subordination provisions therein, except that payments under the Subordinated
Guarantees will be subordinated to Senior Indebtedness of Thermo Electron
("Senior Guarantor Indebtedness") to the extent described below. The
Guarantees will remain in effect until the entire principal of, premium, if
any, and interest on the Debt Securities shall have been paid in full or
otherwise discharged in accordance with the provisions of the Indentures.
(Section 1401)
SUBORDINATION OF THE SUBORDINATED GUARANTEES
The obligations represented by the Subordinated Guarantees will be
subordinated, to the extent set forth in the Subordinated Guarantees, in right
of payment to the prior payment in full of all existing and future Senior
Guarantor Indebtedness. Senior Guarantor Indebtedness is defined for this
purpose as the principal of, premium, if any, and interest and other amounts
due on or with respect to the following, whether outstanding at the date of
execution of the Subordinated Indenture or thereafter incurred or created: (a)
indebtedness of Thermo Electron for money borrowed by Thermo Electron
(including, without limitation, purchase money obligations and money borrowed
from any affiliate of Thermo Electron), whether or not evidenced by
debentures, bonds, notes or other corporate debt securities or similar
instruments issued by Thermo Electron, (b) obligations to reimburse any bank
or other person in respect of amounts paid under letters of credit; (c) leases
of real property, equipment or other assets, which leases are capitalized in
Thermo Electron's financial statements in accordance with generally accepted
accounting principles; (d) commitment, standby and other fees due and payable
to financial institutions with respect to credit facilities available to
Thermo Electron; (e) obligations of Thermo Electron under interest rate or
currency swaps, floors, caps or other similar arrangements, intended to hedge
interest rates or currency exposure; (f) obligations secured by any mortgage,
pledge, lien or encumbrance on property which is owned or held by Thermo
Electron subject to such mortgage, pledge, lien or encumbrance, whether or not
the obligations secured thereby shall have been assumed by Thermo Electron;
(g) obligations of Thermo Electron constituting guarantees of indebtedness of
or joint obligations with another or others which would be included in the
preceding clauses (a), (b), (c), (d), (e) or (f); and (h) modifications,
renewals, extensions or refundings of any of the indebtedness, leases, fees or
obligations referred to in the preceding clauses (a), (b), (c), (d), (e), (f)
or (g) or debentures, notes or other evidences of indebtedness issued in
exchange therefor; provided that Senior Guarantor Indebtedness shall not
include any particular indebtedness, lease, fee or obligation, modification,
renewal, extension or refunding or exchanged securities if, under the express
provisions of the instrument creating or evidencing the same, or pursuant to
which the same is outstanding, such indebtedness, lease, fee or obligation or
such modification, renewal, extension or refunding thereof or exchanged
securities are stated to be not superior in right of payment to the
Subordinated Guarantees. (Article Eighteen) The obligations represented by the
Subordinated Guarantees will rank pari passu with certain other obligations of
Thermo Electron, as set forth in the applicable Prospectus Supplement.
Upon (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
in connection therewith, relative to Thermo Electron or its creditors, as
such, or to its assets, or (b) any liquidation, dissolution or other winding
up of Thermo Electron, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (c) any assignment for the benefit or
creditors or any other marshaling of assets and liabilities of Thermo
Electron, all amounts due in respect of all Senior Guarantor Indebtedness must
be paid in full before the Holders of the Subordinated Guarantees or the
Trustee are entitled to receive or retain any assets so distributed in respect
of the Subordinated Guarantees. (Section 1802) Upon the maturity of any Senior
Guarantor Indebtedness by lapse of time, acceleration or otherwise, such
Senior Guarantor Indebtedness shall first be paid in full, or duly provided
for in cash, before any payment is made by Thermo Electron, directly or
indirectly, on the Debt Securities in respect of the Subordinated
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Guarantees. Upon the happening of any event of default with respect to any
Senior Guarantor Indebtedness, as defined therein or in the instrument under
which it is outstanding, permitting the holders to accelerate the maturity
thereof, then, unless and until such event of default shall have been cured or
waived or shall have ceased to exist, no payment shall be made by Thermo
Electron, directly or indirectly, on the Subordinated Securities in respect of
the Subordinated Guarantees. (Section 1802) By reason of this provision, in
the event of insolvency, holders of the Subordinated Securities and the
related Subordinated Guarantees may recover less, ratably, than other
creditors of Thermo Electron, including holders of Senior Guarantor
Indebtedness.
Subject to payment in full of all Senior Guarantor Indebtedness, the rights
of the holders of the Subordinated Securities under the related Subordinated
Guarantees will be subrogated to the rights of holders of Senior Guarantor
Indebtedness to receive payments or distributions of cash, property or
securities of Thermo Electron applicable to Senior Guarantor Indebtedness.
(Section 1805)
STRUCTURAL SUBORDINATION
The following provisions relate to the Guarantees with respect to both the
Senior Securities and the Subordinated Securities.
The obligations represented by the Guarantees are obligations exclusively of
Thermo Electron and not of its subsidiaries. Because the operations of Thermo
Electron are, in large part, conducted through subsidiaries, the cash flow and
the consequent ability to service debt of Thermo Electron, including the
obligations represented by the Guarantees, are dependent, in part, upon the
earnings of its subsidiaries and the distribution of those earnings to Thermo
Electron or upon loans or other payments of funds by those subsidiaries to
Thermo Electron. Pursuant to the Thermo Electron Corporate Charter, to which
the Company and each of the other majority-owned subsidiaries of Thermo
Electron is a party (the "Charter"), the combined financial resources of
Thermo Electron and its subsidiaries allow Thermo Electron to provide banking,
credit, and other financial services to its subsidiaries so that each member
of the Thermo Electron group of companies may benefit from the financial
strength of the entire organization. Toward that end, the Charter states that
each member of the group may be required to provide certain credit support to
the consolidated entity. Nonetheless, Thermo Electron's ability to access
assets held by its majority-owned subsidiaries through dividends, loans, or
other transactions is subject in each instance to a fiduciary duty owed to the
minority stockholders of the relevant subsidiary. The subsidiaries are
separate and distinct legal entities and, except as provided in the Charter,
have no obligation, contingent or otherwise, to pay any amounts due pursuant
to the Guarantees or to make any funds available therefor, whether by
dividends, loans or other payments. In addition, the payment of dividends and
the making of loans and advances to Thermo Electron by its subsidiaries may be
subject to statutory restrictions, and dividends paid by a subsidiary that
does not consolidate with Thermo Electron for tax purposes will be subject to
taxation.
The obligations represented by the Guarantees will be effectively
subordinated to all indebtedness and other liabilities, including current
liabilities and commitments under leases, if any, of Thermo Electron's
subsidiaries. Any right of Thermo Electron to receive assets of any of its
subsidiaries upon liquidation or reorganization of such subsidiary (and the
consequent right of the holders of the Guarantees to participate in those
assets) will be effectively subordinated to the claims of that subsidiary's
creditors, except to the extent that Thermo Electron is itself recognized as a
creditor of such subsidiary, in which case the claims of Thermo Electron would
still be subject to any security interests in the assets of such subsidiary
and subordinated to any indebtedness of such subsidiary senior to that held by
Thermo Electron. In addition, any minority stockholder of such subsidiary
would be entitled to participate in the assets of such subsidiary on the same
terms as Thermo Electron.
CONVERSION RIGHTS
Unless otherwise indicated in an applicable Prospectus Supplement, the
following provisions shall be applicable with respect to any Debt Security
that is convertible into Common Stock (a "Convertible Debt Security").
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The Holder of any Convertible Debt Security will have the right, at the
Holder's option, to convert any portion of the principal amount of a
Convertible Debt Security that is an integral multiple of $1,000 into shares
of Common Stock at any time on or after (a) in the case of all Convertible
Debt Securities other than a temporary global Bearer Security, its date of
issuance and (b) in the case of Convertible Debt Securities represented by a
temporary global Bearer Security, the receipt of definitive Convertible Debt
Securities, and prior to the close of business on the maturity date, unless
previously redeemed or repurchased, at the Conversion Price per share set
forth in an applicable Prospectus Supplement (subject to adjustment as
described below). The right to convert a Convertible Debt Security called for
redemption or delivered for repayment will terminate at the close of business
on the fifth business day prior to the redemption date for such Convertible
Debt Security or the second business day preceding the repayment date, as the
case may be, unless the Company defaults in making the payment due upon
redemption or repayment, as the case may be. (Section 1201)
The right of conversion attaching to any Convertible Debt Security may be
exercised by the Holder by delivering the Convertible Debt Security at the
specified office of a Conversion Agent (which in the case of a Convertible
Debt Security which is a Bearer Debt Security (a "Bearer Convertible Debt
Security") will only be the office of any Conversion Agent outside the United
States), accompanied by a duly signed and completed notice of conversion. The
Conversion Date will be the date on which the Convertible Debt Security and
the duly signed and completed notice of conversion are so delivered. As
promptly as practicable on or after the Conversion Date, the Company will
issue and deliver to the Trustee a certificate or certificates for the number
of full shares of Common Stock issuable upon conversion, together with payment
in lieu of any fraction of a share; such certificate will be sent by the
Trustee to the appropriate Conversion Agent for delivery to the Holder.
Accrued interest from the immediately preceding interest payment date until
the Conversion Date will be paid within five business days after the
Conversion Date. Each Bearer Convertible Debt Security delivered for
conversion must be delivered with all Coupons maturing after the Conversion
Date. Coupons maturing on or before the Conversion Date and not in default
will be payable against surrender thereof, and Coupons so maturing but in
default will continue to be payable as set forth in the Indenture,
notwithstanding the exercise of the right of conversion by the Holder of the
Convertible Debt Security to which the Coupons appertain, but Coupons maturing
after the Conversion Date will not be paid. In the case of any Convertible
Debt Security that is a Registered Debt Security which has been converted
after any Regular Record Date but on or prior to the next Interest Payment
Date (other than any such Registered Debt Security whose Maturity is prior to
such Interest Payment Date), interest the Stated Maturity of which is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest shall be paid to the Holder
of such Registered Convertible Debt Security on such Regular Record Date. No
other payment or adjustment for interest, or for any dividends in respect of
Common Stock, will be made upon conversion. Holders of Common Stock issued
upon conversion will not be entitled to receive any dividends payable to
holders of Common Stock as of any record time before the close of business on
the Conversion Date. No fractional shares will be issued upon conversion, but
in lieu thereof, an appropriate amount will be paid in cash by the Company
based on the market price of the Common Stock at the close of business on the
day of conversion. (Sections 307, 1202 and 1203)
A Holder delivering a Convertible Debt Security for conversion will not be
required to pay any stamp and similar taxes or duties in respect of the issue
or delivery of Common Stock on conversion but will be required to pay any tax
or duty which may be payable in respect of any transfer involved in the issue
or delivery of the Common Stock in a name other than that of the Holder of the
Convertible Debt Security. Certificates representing shares of Common Stock
will not be issued or delivered unless all taxes and duties, if any, payable
by the Holder have been paid. (Sections 1202 and 1208)
The Conversion Price is subject to adjustment in certain events, including:
(a) dividends (and other distributions) payable in Common Stock on shares of
capital stock of the Company, (b) the issuance to all holders of Common Stock
of rights, options or warrants entitling them to subscribe for or purchase
Common Stock at less than the then current market price (determined as
provided in the Indenture) of the Common Stock, (c) subdivisions, combinations
and reclassifications of Common Stock and (d) distributions to all holders of
Common Stock of evidences of indebtedness of the Company, shares of capital
stock, cash or assets (including
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securities, but excluding those dividends, rights, options, warrants and
distributions referred to above, dividends and distributions paid exclusively
in cash out of the consolidated retained earnings of the Company and mergers
and consolidations to which the last paragraph of this section applies). The
Company reserves the right to make such reductions in the Conversion Price in
addition to those required in the foregoing provisions as it considers to be
advisable in order that any event treated for federal income tax purposes as a
dividend of stock or stock rights will not be taxable to the recipients. No
adjustment of the Conversion Price will be required to be made until the
cumulative adjustments amount to 1.0% or more of the Conversion Price.
(Section 1204) Notices of any adjustments to the Conversion Price pursuant to
this paragraph will be given to all Holders in the manner required in the
Indenture. (Section 1205)
If so indicated in the applicable Prospectus Supplement with respect to a
series of Convertible Debt Securities, in lieu of issuing shares of Common
Stock upon conversion of such series of Convertible Debt Securities, the
Company may elect, in its sole discretion, to (i) pay cash in respect of all
or a portion of the shares of Common Stock otherwise issuable upon such
conversion (the "Cash Settlement Option") and/or (ii) deliver fully paid and
non-assessable shares of Guarantor Common Stock in respect of all or a portion
of the shares of Common Stock otherwise issuable upon such conversion (the
"Stock Settlement Option"). The amount of cash to be so delivered upon the
exercise of the Cash Settlement Option shall be equal to the number of shares
of Common Stock as to which cash is being paid in lieu of issuance of shares
of Common Stock multiplied by the Market Price of a share of Common Stock.
In the event the Stock Settlement Option is applicable, the method for
determining the number of shares of Guarantor Common Stock to be delivered
shall be described in the applicable Prospectus Supplement.
With respect to the Cash Settlement Option, "Market Price" means the
Weighted Average Price of the Common Stock on the last Trading Day preceding
the applicable Conversion Date. The "Weighted Average Price" of a share of the
Common Stock or the Guarantor Common Stock during any period means the
weighted average per share sale price for all reported sales of shares of the
Common Stock or the Guarantor Common Stock, as the case may be, on the Trading
Days included within such period (or, if the information necessary to
calculate such weighted average per share sale price is not available, the
average of the high and low sale prices or, if no sales prices are reported,
the average of the reported closing bid and reported closing asked prices or,
if more than one in either case, the average of the average reported closing
bid and average reported closing asked prices) as reported in the composite
transactions on the principal national or regional United States securities
exchange on which the Common Stock or the Guarantor Common Stock, as the case
may be, is listed or admitted to trading, or, if the Common Stock or the
Guarantor Common Stock, as the case may be, is not listed or admitted to
trading on a United States national or regional securities exchange, as
reported by the National Association of Securities Dealers Automated Quotation
System or by the National Quotation Bureau Incorporated. In the absence of
such quotations, the Company or the Guarantor shall be entitled to determine
the Weighted Average Price for the Common Stock or the Guarantor Common Stock,
respectively, on the basis of such quotations or other data as it considers
appropriate. A "Trading Day" means (i) if the Common Stock or the Guarantor
Common Stock is listed or admitted for trading on any national securities
exchange, each day on which such national securities exchange is open for
business and on which at least one trade of the Common Stock or the Guarantor
Common Stock, respectively, has occurred, (ii) if the Common Stock or the
Guarantor Common Stock is quoted on any system of automated dissemination of
quotations of securities prices (other than a national securities exchange),
each day on which trades may be effected through such system and on which at
least one trade of the Common Stock or the Guarantor Common Stock,
respectively, has occurred, or (iii) if the Common Stock or the Guarantor
Common Stock is not listed or admitted to trading on any national securities
exchange or quoted on an automated quotation system, each day on which the
Common Stock or the Guarantor Common Stock, respectively, is traded regular
way in the over-the-counter market and for which a closing bid and a closing
asked price are available for the Common Stock or the Guarantor Common Stock,
respectively.
If at any time the Company makes a distribution of property to its
stockholders which would be taxable to the stockholders as a dividend for
federal income tax purposes (e.g., distributions of evidences of indebtedness
or assets of the Company, but generally not stock dividends on Common Stock or
rights to subscribe for
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Common Stock) and, pursuant to the anti-dilution provisions of the Indenture,
the number of shares into which Convertible Debt Securities are convertible is
increased, such increase may be deemed for federal income tax purposes to be
the payment of a taxable dividend to Holders of Convertible Debt Securities.
In case of any consolidation or merger of the Company with or into another
Person or any merger of another Person into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of the Common Stock), or in case of any sale or transfer of all
or substantially all of the assets of the Company, each Convertible Debt
Security then outstanding will, without the consent of the Holder of any
Convertible Debt Security or Coupon, become convertible only into the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock into which such Convertible Debt Security was convertible
immediately prior thereto (assuming such holder of Common Stock failed to
exercise any rights of election and that such Convertible Debt Security was
then convertible). (Section 1211)
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENTS
The Indentures provide that the Company may issue Debt Securities in
registered form only, in bearer form only, or in both registered and bearer
form.
Unless otherwise indicated in the applicable Prospectus Supplement,
Registered Securities will be issued in denominations of $1,000 or any
integral multiple thereof, without interest Coupons, and definitive Bearer
Securities will be issued in denominations of $1,000 and $10,000, with
interest Coupons attached. (Section 302)
Unless otherwise indicated in the applicable Prospectus Supplement, the
principal, premium, if any, and interest on the Registered Securities will be
payable, Registered Securities may be surrendered for registration of transfer
or exchange and Registered Securities may be surrendered for conversion at an
office or agency to be maintained by the Company in the Borough of Manhattan,
The City of New York, provided that payments of interest with respect to any
Registered Security may be made at the option of the Company by check mailed
to the address of the person entitled thereto or by transfer to an account
maintained by the payee with a bank located in the United States. No service
charge shall be made for any registration of transfer or exchange of Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge and any other expenses that may be
imposed in connection therewith, except in certain circumstances. (Sections
305, 307 and 1002)
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest on Bearer Securities will be
made, and Bearer Securities may be presented for conversion, subject to any
applicable laws and regulations, at such office or agency outside the United
States as is specified in the applicable Prospectus Supplement and as the
Company may designate from time to time. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest due on Bearer Securities
on any Interest Payment Date will be made only against surrender of the Coupon
relating to such Interest Payment Date. Unless otherwise indicated in the
applicable Prospectus Supplement, no payment of principal, premium or interest
or surrender for conversion with respect to any Bearer Security will be made
at any office or agency in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank
located in the United States; provided, however, that payment with respect to
Bearer Securities may be made and any Bearer Securities may be surrendered for
conversion, if applicable, at the Corporate Trust Office of the applicable
Trustee or at any office or agency designated by the Company in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount
of such principal, premium or interest or the surrender of Bearer Securities
for conversion at all offices outside of the United States maintained for such
purpose by the Company is illegal or effectively precluded by exchange
controls or similar restrictions. (Sections 307 and 1002)
Unless otherwise indicated in the applicable Prospectus Supplement, Bearer
Securities (provided that all unmatured related Coupons and matured related
Coupons in default are attached) will be exchangeable for an
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equal aggregate principal amount of Registered Securities of the same series
in denominations of $1,000 and integral multiples thereof without Coupons, and
Registered Securities will be exchangeable for an equal aggregate principal
amount of Registered Securities of different denominations, in each case
without service charge (other than the cost of delivery) but upon payment of
any taxes and other governmental charges, except in certain circumstances.
Bearer Securities may be exchanged for Registered Securities of the same
series by surrender of such Bearer Securities to be exchanged at any
applicable Office or Agency for such series, with all unmatured Coupons and
all matured Coupons in default thereto appertaining. If and so long as
Registered Securities of a series are represented solely by a global Debt
Security (see "Global Securities" below), a Bearer Security may be exchanged
for a beneficial interest in such global Debt Security only by and through a
DTC Participant (as defined in "Global Securities" below). In case a Bearer
Security of any series is surrendered at any such Office or Agency for such
series in exchange for a Registered Security of such series and like tenor
after the close of business at such Office or Agency on (i) any Regular Record
Date and before the opening of business at such Office or Agency on the
relevant Interest Payment Date, or (ii) any Special Record Date and before the
opening of business at such Office or Agency on the related date for payment
of Defaulted Interest, such Bearer Security shall be surrendered without the
Coupon relating to such Interest Payment Date or proposed date for payment of
Defaulted Interest, as the case may be, and interest or Defaulted Interest, as
the case may be, shall not be payable on such Interest Payment Date or
proposed date for payment or Defaulted Interest, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer
Security, but shall be payable only to the Holder of such Coupon when due in
accordance with the provisions of the Indentures. Unless otherwise indicated
in the applicable Prospectus Supplement, Registered Securities will not be
exchangeable for Bearer Securities. Registered Securities shall be registered
as provided in the Indenture. (Section 305)
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company shall not be required (i) to issue, register the transfer of or
exchange any Debt Securities during a period beginning at the opening of
business 15 days before the day of the selection for redemption of such Debt
Securities and ending at the close of business on the day of such selection,
or (ii) to register the transfer of or exchange any Registered Security so
selected for redemption in whole or in part, except, in the case of any Debt
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except, to
the extent provided with respect to such Bearer Security, that such Bearer
Security may be exchanged for a Registered Security of like tenor and the same
series, provided that such Registered Security shall be immediately
surrendered for redemption with written instruction for payment consistent
with the provisions of the Indenture or (iv) to issue, register the transfer
of or exchange any Debt Security which, in accordance with its terms, has been
surrendered for repayment at the option of the holder of such Debt Security,
except the portion, if any, of such Security not to be so repaid. (Section
305)
GLOBAL SECURITIES
The Debt Securities may be issued in whole or in part in the form of one or
more global securities, each of which will be deposited with, or on behalf of,
a depository (a "Depository"). Global Debt Securities may be issued in either
registered or bearer form and in either temporary or permanent form. The
Company anticipates that Bearer Securities will be represented initially by a
temporary global Debt Security in bearer form, without interest Coupons or
conversion rights, which will be deposited on the applicable closing date on
behalf of subscribers for the Bearer Securities represented thereby with a
common depository in London for their respective accounts at Morgan Guaranty
Trust Company of New York, Brussels Office, as operator of the Euroclear
Clearance System ("Euroclear"), or Cedel Bank, S.A. ("Cedel"). Upon deposit of
the temporary global Debt Security, Euroclear or Cedel, as the case may be,
will credit each subscriber with a principal amount of Bearer Securities equal
to the principal amount thereof for which it has subscribed and paid. The
temporary global Debt Security will be exchangeable for definitive Bearer
Securities in denominations of $1,000 and $10,000 or other authorized
denominations, each with related interest Coupons attached, or Registered
Securities in denominations of $1,000 or an integral multiple thereof, if
permitted by the rules and procedures then in effect of Cedel, Euroclear and
The Depository Trust Company ("DTC"), commencing on the exchange date
specified in the applicable Prospectus Supplement (the "Exchange Date"), if
permitted. Exchange for definitive Bearer
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Securities will be made only upon certification that the beneficial owners of
such Bearer Securities are not United States persons (as defined below) or
other persons who have purchased such Bearer Securities for resale to United
States persons. No Bearer Debt Security so delivered in exchange will be
mailed or otherwise delivered to any location in the United States. The
temporary global Debt Security will be exchangeable for Registered Securities
in denominations of $1,000 or an integral multiple thereof at any time without
certification of non-U.S. status; provided that such exchange is permitted by
the rules and procedures then in effect of Cedel and Euroclear, and provided,
further, that if and so long as Registered Securities of a series are
represented solely by a global Debt Security, such exchange may be effected
only by and through a DTC Participant (as defined below). A beneficial owner
must exchange its share of the global Debt Security in bearer form for
definitive Debt Securities, in either registered or bearer form, before
payments can be collected or conversion rights exercised. (Section 304) Any
additional or differing terms of the depository arrangements will be described
in the Prospectus Supplement relating to a particular series of Debt
Securities issued in the form of temporary global Debt Securities.
In addition, the Company anticipates that any global Debt Security in
registered form will be deposited with, or on behalf of DTC, and that such
global Debt Security will be permanent and will be registered in the name of
Cede & Co., DTC's nominee. The Company further anticipates that the following
provisions will apply to the Depository arrangements with respect to any such
global Debt Security in registered form. Any additional or differing terms of
the Depository arrangements will be described in the Prospectus Supplement
relating to a particular series of Debt Securities issued in the form of
global Debt Securities.
So long as DTC or its nominee is the registered owner of a global Debt
Security, DTC or its nominee, as the case may be, will be considered the sole
Holder of the Debt Securities represented by such global Debt Security for all
purposes under the applicable Indenture. Except as described below, owners of
beneficial interests in a global Debt Security will not be entitled to have
Debt Securities represented by such global Debt Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the owners or Holders
thereof under the applicable Indenture. The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form; accordingly, such laws may limit the transferability of
beneficial interests in a global Debt Security.
Unless otherwise specified in the applicable Prospectus Supplement, each
global Debt Security in registered form will be exchangeable for definitive
Registered Securities of the same series only if (i) DTC notifies the Company
that it is unwilling or unable to continue as Depository or DTC ceases to be a
clearing agency registered under the Exchange Act (if so required by
applicable law or regulation) and, in either case, a successor Depository is
not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such ineligibility, (ii) the Company in its sole
discretion determines that the global Debt Securities shall be exchangeable
for definitive Registered Securities and delivers a Company Order to the
Trustee to such effect or (iii) there shall have occurred and be continuing an
Event of Default under the Indenture with respect to the Debt Securities of
any series. Upon any such exchange, owners of a beneficial interest in the
global Debt Security or Securities in registered form will be entitled to
physical delivery of individual Debt Securities in definitive form of like
tenor, terms and rank, equal in principal amount to such beneficial interest,
and to have such Debt Securities in definitive form registered in the names of
the beneficial owners, which names shall be provided by DTC's relevant
participants (as identified by DTC) to the Trustee. Unless otherwise described
in the applicable Prospectus Supplement, Debt Securities so issued in
definitive form will be issued in denominations of $1,000 or any integral
multiple thereof, and will be issued in registered form only, without Coupons.
(Section 305)
The following is based on information furnished to the Company:
DTC will act as securities Depository for the global Debt Securities in
registered form. These Debt Securities will be issued as fully Registered
Securities registered in the name of Cede & Co. (DTC's partnership nominee).
One fully registered Debt Security certificate will be issued and deposited
with DTC with respect to each series of Debt Securities, each in the aggregate
principal amount of such series (except that if the aggregate
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principal amount of a series of Debt Securities exceeds $200 million (or such
other amount as shall be permitted by DTC from time to time) one certificate
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such series).
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the DTC system is also available to
others, such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable
to DTC and its Participants are on file with the Commission.
Purchases of Debt Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Debt Securities on
DTC's records. The ownership interest of each actual purchaser of each Debt
Security ("Beneficial Owner") is in turn recorded on the Direct and Indirect
Participants' records. A Beneficial Owner will not receive written
confirmation from DTC of its purchase, but is expected to receive a written
confirmation providing details of the transaction, as well as periodic
statements of its holdings, from the Direct or Indirect Participant through
which such Beneficial Owner entered into the transaction. Transfers of
ownership interests in Debt Securities are accomplished by entries made on the
books of Direct and Indirect Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Debt Securities, except in the event that use of the
book-entry system for the Debt Securities is discontinued.
To facilitate subsequent transfers, the Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of the Debt Securities with DTC and their registration
in the name of Cede & Co. will effect no change in beneficial ownership. DTC
has no knowledge of the actual Beneficial Owners of the Debt Securities; DTC
records reflect only the identity of the Direct Participants to whose accounts
such Debt Securities are credited, which may or may not be the Beneficial
Owners. The Participants remain responsible for keeping account of their
holdings on behalf of their customers.
Delivery of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants
and Indirect Participants to Beneficial Owners are governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Debt
Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus Proxy")
to the issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts the Debt Securities are credited on the record date
(identified on a list attached to the Omnibus Proxy).
Principal payments, premium payments, if any, and interest payments, if any,
on the registered Debt Securities in global form will be made to Cede & Co.
DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt
of funds and corresponding detail information from the issuer, on the payment
date in accordance with their respective holdings as shown on DTC's records.
Payments by Direct and Indirect Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name", and are the
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responsibility of such Direct and Indirect Participants and not of DTC, the
Trustee, the Company or Thermo Electron, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal (premium, if any) and interest, if any, to Cede & Co. is the
responsibility of the Company or the Trustee, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
If applicable, redemption notices shall be sent to DTC. If less than all of
the Debt Securities of a series represented by global Debt Securities in
registered form are being redeemed, DTC's practice is to determine by lot the
amount of the interest of each Direct Participant in such issue to be
redeemed.
To the extent that any Debt Securities provide for repayment or repurchase
at the option of the Holders thereof, a Beneficial Owner shall give notice of
any option to elect to have its interest in the global Debt Security repaid by
the Company, through its Participant, to the Trustee, and shall effect
delivery of such interest in a global Debt Security by causing the Direct
Participant to transfer the Participant's interest in the global Debt Security
or Securities representing such interest, on DTC's records, to such Trustee.
The requirement for physical delivery of Debt Securities in connection with a
demand for repayment will be deemed satisfied when the ownership rights in the
global Debt Security or Securities representing such Debt Securities are
transferred by Direct Participants on DTC's records and followed by a book-
entry credit of the tendered Debt Securities to the Trustee's account.
DTC may discontinue providing its services as Depository with respect to the
Debt Securities at any time by giving reasonable notice to the Company or the
Trustee. Under such circumstances, in the event that a successor Depository is
not appointed, Debt Security certificates are required to be printed and
delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor Depository). In that event, Debt
Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and Thermo Electron believe to
be reliable, but the Company and Thermo Electron take no responsibility for
the accuracy thereof.
None of the Company, Thermo Electron, the Trustee or any applicable paying
agent will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial interests in a global
Debt Security, or for maintaining, supervising or reviewing any records
relating to such beneficial interest.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States tax laws and regulations, Bearer Securities
may not be offered or sold prior to the Exchange Date specified in the
applicable Prospectus Supplement, or at any time if part of a distributor's
unsold allotment, to a person who is within the United States or to a United
States person other than (i) certain financial institutions located outside
the United States that agree in writing to comply with the requirements of
Section 165(j)(3)(A), (B), or (C) of the United States Internal Revenue Code
of 1986, as amended (the "Code") and the regulations thereunder, (ii) the
United States offices of exempt distributors, or (iii) United States offices
of international organizations or foreign central banks. United States tax
laws and regulations also require that Bearer Securities not be mailed or
otherwise delivered to any location in the United States. Any underwriters,
agents and dealers participating in the offering of Debt Securities must
covenant that they will not offer or sell during the applicable restricted
period (as defined in the Code and the regulations thereunder) any Bearer
Securities within the United States or to United States persons (other than
the persons described above) or deliver in connection with the sale of Bearer
Securities during the restricted period any Bearer Securities within the
United States, and that they have in effect procedures reasonably designed to
ensure that their employees and agents who are directly engaged in selling the
Bearer Securities are aware of the restrictions described above. No definitive
Bearer Security will be delivered in connection with its original
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issuance nor will interest be paid on any Bearer Security until receipt of
written certification of non-U.S. status described above under "--Global
Securities."
As used herein, "United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States, any estate, the income of
which is subject to United States federal income taxation regardless of its
source, and any trust if a court within the United States is able to exercise
primary supervision of the administration thereof and one or more United
States persons has the authority to control all substantial decisions thereof,
or any other person included within the definition of United States person
under the Code and the regulations thereunder; and "United States" means the
United States of America (including the states thereof and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction. Purchasers of Bearer Securities will be subject to certification
procedures and may be affected by certain limitations under United States tax
laws. (Section 101)
Unless otherwise indicated in the applicable Prospectus Supplement, the
temporary global Bearer Security and the definitive Bearer Securities and
interest Coupons will bear the following legend: "Any United States person who
holds this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j) and
1287(a) of the United States Internal Revenue Code." The sections referred to
in such legend provide that any United States person holding a Bearer Security
or interest Coupon, with certain limited exceptions, will not be entitled to
deduct any loss incurred with respect to such Bearer Security or interest
Coupon and will not be entitled to any capital gain treatment with respect to
any sale, redemption or other disposition of such Bearer Security or interest
Coupon but will be taxed thereon at ordinary income rates instead.
REDEMPTION
Redemption at the Option of the Company
The applicable Prospectus Supplement will specify whether or not the Debt
Securities will be redeemable at the option of the Company and the terms upon
which such Debt Securities may be so redeemed.
Notice of intention to redeem redeemable Debt Securities will be given in
accordance with "Notices" below. In the case of redemption of all Debt
Securities of a series, notice will be given by the Trustee not more than 60
nor less than 20 days prior to the Redemption Date. Notices of redemption will
specify, among other things, (i) the Redemption Date; (ii) the Redemption
Price, and accrued interest, if any; (iii) in the case of a partial
redemption, the identification and aggregate principal amount of Debt
Securities to be redeemed and the aggregate principal amount of the Debt
Securities which will be outstanding after such partial redemption; (iv) that,
on the Redemption Date, the Redemption Price shall become due and payable upon
each such Debt Security or portion thereof to be redeemed, and, if applicable,
that interest thereon shall cease to accrue on and after said date; (v) if
applicable, the Conversion Price, the date on which the right to convert the
Debt Securities to be redeemed will terminate and the places where such Debt
Securities, together with all unmatured Coupons and any matured Coupons in
default appertaining thereto, may be surrendered for conversion; (vi) the
place or places where such Securities, together (in the case of Bearer
Securities) with all Coupons appertaining thereto, if any, maturing after the
Redemption Date, are to be surrendered for payment of the Redemption Price and
any accrued interest and Additional Amounts pertaining thereto; (vii) that the
redemption is for a sinking fund, if such is the case; (viii) that, unless
otherwise specified in such notice, Bearer Securities of any series, if any,
surrendered for redemption must be accompanied by all Coupons maturing
subsequent to the Redemption Date or the amount of any such missing Coupon or
Coupons will be deducted from the Redemption Price, unless security or
indemnity satisfactory to the Company, the Trustee and any Paying Agent is
furnished; and (ix) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on the Redemption Date, the last date, as determined by the
Company, on which such exchanges may be made. All redemption notices are
irrevocable, except in the case of certain redemptions for taxation reasons
specified in the next succeeding subsection. (Section 1104)
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Redemption for Taxation Reasons
If the Company has or will become obligated to pay Additional Amounts (as
described below under "Payment of Additional Amounts to Non United States
Persons") as a result of any change in, or amendment to, the laws (including
any regulations or rulings promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting
taxation, or any change in, or amendment to, the application or official
interpretation of such laws, regulations or rulings (any such change or
amendment being herein referred to as a "Tax Law Change"), and such
obligations cannot be avoided by the Company taking reasonable measures
available to it, the Debt Securities held by Persons who are not United States
persons and to whom such Additional Amounts have or will become payable (the
"Tax Affected Debt Securities") may be redeemed, at the option of the Company,
in whole but not in part. Such redemption of Tax Affected Debt Securities
shall be upon not less than 20 nor more than 60 days' prior notice as provided
under "Notices" below, at a redemption price equal to 100% of the principal
amount of the Tax Affected Debt Securities, plus accrued interest to the
redemption date and any Additional Amounts then payable; provided, however,
that (1) no such notice of redemption shall be given earlier than 90 days
prior to the earliest date on which the Company would be obligated to pay any
such Additional Amounts were a payment in respect of the Tax Affected Debt
Securities then due and (2) at the time such notice of redemption is given,
the obligation to pay such Additional Amounts remains in effect. Prior to the
publication of any notice of redemption pursuant to this paragraph, the
Company shall deliver to the Trustee (a) a certificate stating that the
Company is entitled to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of the Company so to
redeem have occurred and (b) an opinion of counsel selected by the Company to
the effect that the Company has or will become obligated to pay such
Additional Amounts as a result of a Tax Law Change. The Company's right to
redeem the Tax Affected Debt Securities shall continue as long as the Company
is obligated to pay such Additional Amounts, notwithstanding that the Company
shall have theretofore made payments of Additional Amounts. (Section 1102)
In addition, if the Company determines, based upon a written opinion of
counsel selected by the Company, that, as a result of a Tax Law Change, any
payment made outside the United States by the Company or any of its Paying
Agents of the full amount of principal, premium, if any, or interest due with
respect to any Bearer Debt Security or Coupon appertaining thereto would be
subject to any certification, identification or other information reporting
requirement of any kind, the effect of which is the disclosure to the Company,
any Paying Agent or any governmental authority of the nationality, residence
or identity of a beneficial owner of such Bearer Debt Security or Coupon who
is not a United States person as defined below under "Payment of Additional
Amounts to Non United States Persons" (other than such a requirement (a) which
would not be applicable to a payment made by the Company or any one of its
Paying Agents (i) directly to the beneficial owner or (ii) to any custodian,
nominee or other agent of the beneficial owner, (b) which can be satisfied by
the custodian, nominee or other agent certifying that the beneficial owner is
not a United States person, provided that in each case referred to in clauses
(a) (ii) and (b) payment by such custodian, nominee or other agent to such
beneficial owner is not otherwise subject to any such requirement, or (c)
which would not be applicable but for the fact that a Bearer Debt Security
constitutes a "United States real property interest," as defined in Section
897(c)(1) of the Code, with respect to the beneficial owner of such Bearer
Debt Security), the Company at its election will either (x) redeem the Bearer
Securities, as a whole but not in part, at a redemption price equal to 100% of
the principal amount thereof, plus accrued interest to the redemption date, or
(y) if and so long as the conditions of the third paragraph under "Payment of
Additional Amounts to Non United States Persons" are satisfied, pay the
Additional Amounts specified in such paragraph. The Company will make such
determination and election and notify the Trustee thereof in writing as soon
as practicable, and the Trustee will promptly give notice of such
determination (the "Determination Notice"), in each case stating the effective
date of such certification, identification or information reporting
requirement, whether the Company will redeem the Bearer Securities or will pay
the Additional Amounts specified in the third paragraph under "Payment of
Additional Amounts" and (if applicable) the last date by which the redemption
of the Bearer Securities shall take place. If the Company elects to redeem the
Bearer Securities, such redemption shall take place on a date not later than
one year after publication of the Determination Notice, as the Company elects
by notice in writing to the Trustee at least 75
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days before that date, unless shorter notice is acceptable to the Trustee.
Notwithstanding the foregoing, the Company shall not be required to so redeem
the Bearer Securities if the Company, based upon a written opinion of counsel
selected by the Company, subsequently determines, not less than 30 days prior
to the Redemption Date, that subsequent payments would not be subject to any
such requirement, in which case the Company will notify the Trustee in writing
of its determination not to so redeem the Bearer Securities, and the Trustee
will promptly give notice to the Holders of the Bearer Securities of that
determination and any earlier redemption notice will thereupon be revoked and
of no further effect. If the Company elects as provided in clause (y) above to
pay Additional Amounts, the Company may, as long as the Company is obligated
to pay such Additional Amounts, redeem all the Bearer Securities, at any time,
as a whole but not in part, at a redemption price equal to 100% of the
principal amount thereof plus accrued interest to the redemption date and any
Additional Amounts then payable. (Section 1102)
Repayment at Option of Holder
Unless otherwise specified in an applicable Prospectus Supplement, each
holder of a Convertible Debt Security shall have the right to cause the
Company to repay such Convertible Debt Security (or portions thereof in
integral multiples of $1,000) for a cash amount equal to 100% of the principal
amount thereof plus accrued interest to the redemption date and any Additional
Amounts then payable, if a Repayment Event (as defined below) occurs or has
occurred. The "Repayment Date" for this purpose shall be the ninetieth (90th)
day after the later of the Exchange Date or the date a Repayment Event has
occurred. (Section 1502) Notice with respect to the occurrence of a Repayment
Event will be given to all Holders of Convertible Debt Securities with
repayment rights in accordance with "Notices" below and not later than 30 days
after the later of the Exchange Date or the date of such Repayment Event.
Notices of repayment will specify, among other things, (i) the Repayment Date;
(ii) the date by which the repurchase right must be exercised; (iii) the price
at which the Convertible Debt Securities are to be repaid, including accrued
interest and Additional Amounts, if any; (iv) if applicable, the Conversion
Price then in effect, the date on which the right to convert the Securities to
be repaid will terminate and the place or places where such Securities,
together (in the case of Bearer Securities) with all unmatured Coupons and any
matured Coupons in default appertaining thereto, may be surrendered for
conversion; and (v) a description of the repayment right procedures that a
Holder must follow and the place or places where such Securities, together (in
the case of Bearer Securities) with all Coupons appertaining thereto, if any,
maturing after the Repayment Date, are to be surrendered for payment (or the
amount of any such missing Coupon or Coupons will be deducted from any amount
due to such Holder) and any accrued interest and Additional Amounts, if any,
pertaining thereto. (Section 1503)
To be repaid, a Convertible Debt Security must be received by the Trustee
with a duly executed written notice, substantially in the form provided on the
reverse side of such Convertible Debt Security, at the place of payment not
earlier than 60 days nor later than 30 days prior to the Repayment Date. Each
Bearer Convertible Debt Security delivered for repayment must be delivered
with all unmatured Coupons. Once notice is given by the Holder to the Paying
Agent, it is irrevocable. However, holders of Convertible Debt Securities will
retain the right to require such Convertible Debt Securities to be converted
into Common Stock until two business days prior to the Repayment Date.
(Sections 1201 and 1504)
A "Repayment Event" shall have occurred if the Common Stock (or other equity
securities into which the Debt Securities are then convertible) is neither
listed for trading on a United States national securities exchange, the Nasdaq
National Market nor approved for trading on an established automated over-the-
counter trading market in the United States. (Section 1502)
Certain of the Company's and/or the Guarantor's existing and future
agreements relating to their indebtedness could prohibit the repayment by the
Company of the Convertible Debt Securities pursuant to the exercise by a
Convertible Debt Security holder of the foregoing option, depending on the
financial circumstances of the Company and/or the Guarantor at the time any
such repayment may occur, because such repayment could cause a breach of
certain financial ratio and/or other covenants contained in such agreements.
Such a breach may
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constitute an event of default under such indebtedness and thereby restrict
the Company's ability to repay the Convertible Debt Securities. See
"Subordination of Debt Securities" and "Subordination of Guarantees" above.
COVENANTS OF THE COMPANY
The Indenture does not contain any financial covenants or similar
restrictions respecting the Company or Thermo Electron, and in the absence of
such provisions, holders of the Debt Securities will have no protection (other
than their rights upon an event of default, as described under "Events of
Default" below) from adverse changes in the Company's or Thermo Electron's
financial condition. The Indenture also does not contain provisions which may
afford the holders of any of the Debt Securities protection in the event of a
highly leveraged transaction or similar transaction involving the Company or
Thermo Electron. Any such provisions, if applicable to any Debt Securities,
will be described in the Prospectus Supplement or Prospectus Supplements
relating thereto.
PAYMENT OF ADDITIONAL AMOUNTS TO NON UNITED STATES PERSONS
Unless otherwise specified in an applicable Prospectus Supplement, the
Company will pay to the holder of any Debt Security or any related Coupon who
is not a United States person (as defined below) such additional amounts
("Additional Amounts") as may be necessary in order that every net payment of
the principal of, premium, if any, and interest on such Debt Security, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States or any political subdivision or taxing authority thereof or therein,
will not be less than the amount provided for in such Debt Security or in such
Coupon to be then due and payable; provided, however, that the foregoing
obligations to pay Additional Amounts shall not apply to any one or more of
the following:
(a) any tax, assessment or other governmental charge which would not have
been so imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, stockholder of or possessor of a power over such
Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and the United States or any political subdivision or taxing
authority thereof or therein, including, without limitation, such Holder
(or such fiduciary, settlor, beneficiary, member, stockholder or possessor)
being or having been a citizen or resident of the United States or treated
as a resident thereof, or being or having been engaged in trade or business
or present therein, or having had a permanent establishment therein, (ii)
such Holder's present or former status as a personal holding company, a
foreign personal holding company with respect to the United States, a
controlled foreign corporation, a passive foreign investment company, or a
foreign private foundation or foreign tax exempt entity for United States
tax purposes, or a corporation which accumulates earnings to avoid United
States Federal income tax, or (iii) such Holder's status as a bank
extending credit pursuant to a loan agreement entered into in the ordinary
course of business;
(b) any tax, assessment or other governmental charge which would not have
been so imposed but for the presentation by the Holder of such Debt
Security or any related Coupon for payment on a date more than 15 days
after the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal property or
similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with any certification,
identification or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the Holder or
beneficial owner of such Debt Security or any related Coupon, if compliance
is required by statute or by regulation or ruling of the United States
Treasury Department as a precondition to exemption from such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is payable
otherwise than by deduction or withholding from payments of principal of,
premium, if any, or interest on such Debt Security;
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(f) any tax, assessment or other governmental charge imposed as a result
of a Person's past or present actual or constructive ownership, including
by virtue of the right to convert Debt Securities, of 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote;
(g) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of the principal of, premium,
if any, or interest on such Debt Security, if such payment can be made
without such withholding by any other Paying Agent in Western Europe;
(h) any tax, assessment or other governmental charge imposed on a Holder
that is a partnership or a fiduciary, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the payment
of Additional Amounts had the beneficial owner, member, beneficiary or
settlor directly received its beneficial or distributive stock of payments
on such Debt Security;
(i) any tax, assessment or other governmental charge which would not have
been imposed but for the fact that such Debt Security constitutes a "United
States real property interest," as defined in Section 897(c)(1) of the
Internal Revenue Code, and the regulations thereunder, with respect to the
beneficial owner of such Debt Security; or
(j) any combination of items (a), (b), (c), (d), (e), (f), (g), (h) and
(i). (Section 1004)
As used herein, "United States" means the United States of America
(including the states and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction and a "United States
person" is a person that is, for United States federal income tax purposes,
(a) a citizen or a resident of the United States, (b) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, (c) an estate the
income of which is subject to United States federal income taxation regardless
of source, (d) any trust if a court within the United States is able to
exercise primary supervision of the administration thereof and one or more
United States persons has the authority to control all substantial decisions
thereof, or (e) any other person included within the definition of United
States person under the Code and the regulations thereunder. (Sections 101 and
1004)
Notwithstanding the foregoing, if and so long as a certification,
identification or other information reporting requirement referred to in the
second paragraph under "Redemption for Taxation Reasons" above would be fully
satisfied by payment of a backup withholding tax or similar charge, the
Company may elect, by so stating in the Determination Notice, to have the
provisions of this paragraph apply in lieu of redeeming the Bearer Debt
Security pursuant to such second paragraph. In such event, the Company will
pay as Additional Amounts such amounts as may be necessary so that every net
payment made, following the effective date of such requirements, outside the
United States by the Company or any Paying Agent of principal of, and premium,
if any, due in respect of any Bearer Debt Security, or interest represented by
any Coupon, the beneficial owner of which is not a United States person (but
without any requirement that the nationality, residence or identity of such
beneficial owner be disclosed to the Company, any Paying Agent or any
governmental authority), after deduction or withholding for or on account of
such backup withholding tax or similar charge, other than a backup withholding
tax or similar charge which is (a) the result of a certification,
identification or information reporting requirement described in the first
parenthetical clause of such second paragraph, (b) imposed as a result of the
fact that the Company or any Paying Agent has actual knowledge that the
beneficial owner of such Bearer Debt Security or Coupon is within the category
of persons described in clause (a) of the first paragraph under this heading
or (c) imposed as a result of presentation of such Bearer Debt Security or
Coupon for payment more than 15 days after the date on which such payment
becomes due and payable or on which payment thereof is duly provided for,
whichever occurs later, will not be less than the amount provided for in such
Bearer Debt Security or Coupon to be then due and payable. (Section 1004)
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EVENTS OF DEFAULT
The following are Events of Default under the Indentures with respect to
Debt Securities of any series: (a) failure to pay any interest on, or any
Additional Amounts payable in respect of any interest on, any Debt Security of
that series when due, continued for 10 days, and in the case of the
Subordinated Securities, whether or not such payment is prohibited by the
subordination provisions of the Subordinated Indenture; (b) failure to pay
principal or any premium on any Debt Security of that series when due, upon
maturity, redemption or otherwise, and in the case of the Subordinated
Securities, whether or not such payment is prohibited by the subordination
provisions of the Subordinated Indenture; (c) default in the deposit of any
sinking fund payment or analogous payment, when due by the terms of the Debt
Securities of that series, and in the case of the Subordinated Securities,
whether or not such payment is prohibited by the subordination provisions of
the Subordinated Indenture; (d) failure to perform any other covenant or
breach of a warranty of the Company or Thermo Electron in the applicable
Indenture (other than a covenant expressly included in such Indenture solely
for the benefit of a series of Debt Securities other than that series) or any
Debt Security of such series, continued for 60 days after written notice as
provided in the applicable Indenture; (e) any acceleration of the maturity of
any indebtedness of the Company for borrowed money in an aggregate principal
amount exceeding $25,000,000, unless otherwise specified in the applicable
Prospectus Supplement, or a failure to pay such indebtedness at its stated
maturity, if such indebtedness is not discharged or such acceleration is not
rescinded or annulled within 20 days after written notice as provided in the
Indentures; (f) certain events of bankruptcy, insolvency or reorganization of
the Company or Thermo Electron; and (g) any other Event of Default provided
with respect to Debt Securities of that series. (Section 501) No Event of
Default with respect to any particular series of Debt Securities necessarily
constitutes an Event of Default with respect to any other series of Debt
Securities. The Indentures provide that the Trustee thereunder may withhold
notice to the holders of the Debt Securities of any series of the occurrence
of a default with respect to the Debt Securities of such series (except a
default in payment of principal, premium, if any, interest, Additional
Amounts, if any, or sinking fund payments, if any) if the Trustee considers it
in the interest of the Holders to do so. (Section 602) If an Event of Default
with respect to Debt Securities of any series at the time outstanding shall
occur and be continuing, either the applicable Trustee or the Holders of at
least 25% in principal amount of the Debt Securities of that series may
declare the principal amount of all Debt Securities of that series (or if any
Debt Securities of such series are Original Issue Discount Securities or
Indexed Securities, such portion of the principal amount of such Debt
Securities as may be specified by the terms thereof) to be due and payable
immediately; provided that in the case of certain events of bankruptcy,
insolvency or reorganization, such principal amount (or portion thereof),
premium, if any, interest and Additional Amounts, if any, shall automatically
become due and payable. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on such acceleration has been obtained, the
Holders of a majority in principal amount of the Debt Securities of that
series may, under certain circumstances, rescind and annul such acceleration.
(Section 502) For information as to waiver of default, see "Modifications,
Waivers and Meetings." Reference is made to the Prospectus Supplement relating
to each series of Debt Securities which are Original Issue Discount Securities
or Indexed Securities for the particular provisions relating to acceleration
of the Maturity of a portion of the principal amount of such Original Issue
Discount Securities or Indexed Securities upon the occurrence of an Event of
Default and the continuation thereof.
The Indentures provide that, subject to the duty of the respective Trustees
thereunder during default to act with the required standard of care, such
Trustee will be under no obligation to exercise any of its rights or powers
under the respective Indentures at the request or direction of any of the
Holders of the Debt Securities unless they shall have offered to such Trustee
reasonable indemnity. (Section 601) Subject to such provisions for
indemnification of the Trustees, the Holders of a majority in principal amount
of the Debt Securities of any series affected will have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the applicable Trustee, or exercising any trust or power
conferred on such Trustee, with respect to the Debt Securities of such series.
(Section 512)
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No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the applicable Indenture, or for the
appointment of a receiver or a trustee, or for any other remedy thereunder,
unless (i) such Holder has previously given to the applicable Trustee written
notice of a continuing Event of Default with respect to the Debt Securities of
that series, (ii) the Holders of at least 25% in aggregate principal amount of
the Outstanding Debt Securities of that series have made written request, and
such Holder or Holders have offered reasonable indemnity to such Trustee to
institute such proceeding as trustee, and (iii) such Trustee for 60 days after
receipt of such notice has failed to institute such proceeding, and has not
received from the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series a direction inconsistent with such
request, within 60 days after such notice, request and offer. (Section 507)
However, such limitations do not apply to a suit instituted by a Holder of a
Debt Security for the enforcement of payment of the principal of or any
premium or interest or Additional Amounts on such Debt Security on or after
the applicable due date specified in such Debt Security or the right to
convert such Debt Security. (Section 508)
Thermo Electron and the Company will each be required to furnish to the
Trustees annually a statement as to whether there is a default in the
performance or observance of certain covenants. (Section 1005)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Upon the direction of the Company, the Indenture shall cease to be of
further effect with respect to any series of Debt Securities and any Coupons
appertaining thereto issued thereunder specified by the Company (subject to
the survival of certain provisions thereof, including the obligation to pay
Additional Amounts to the extent described below) when (i) either (A) all
outstanding Debt Securities of such series and, in the case of Bearer
Securities, all Coupons appertaining thereto, have been delivered to the
Trustee for cancellation (subject to certain exceptions) or (B) all Debt
Securities of such series have become due and payable or will become due and
payable at their stated maturity within one year and such securities are not
convertible or exchangeable for other securities or are to be called for
redemption within one year and such securities are not convertible or
exchangeable for other securities, and the Company or Thermo Electron have
irrevocably deposited with the Trustee, in trust, funds in Dollars in an
amount sufficient to pay the entire indebtedness on such Debt Securities in
respect of principal (and premium, if any) and interest, if any (and, to the
extent that (x) the Debt Securities of such series provide for the payment of
Additional Amounts upon the occurrence of certain events of taxation,
assessment or governmental charge with respect to payments on such Debt
Securities and (y) the amount of any such Additional Amounts is at the time of
deposit reasonably determinable by the Company, any such Additional Amounts)
to the date of such deposit (if such Debt Securities have become due and
payable) or to the Maturity thereof, as the case may be, (ii) the Company or
Thermo Electron have paid all other sums payable under the Indenture with
respect to the Debt Securities of such series, and (iii) certain other
conditions are met. If the Debt Securities of any such series provide for the
payment of Additional Amounts, the Company will remain obligated, following
such deposit, to pay (and the Guarantee of Thermo Electron will continue to
apply to such payment of) Additional Amounts on such Debt Securities to the
extent that the amount thereof exceeds the amount deposited in respect of such
Additional Amounts as aforesaid. (Section 401)
If so provided in the applicable Prospectus Supplement, the Company may
elect with respect to any series of Debt Securities either (a) to defease and
be discharged from any and all obligations with respect to such Debt
Securities (except for, among other things, the obligation to pay Additional
Amounts, if any, upon the occurrence of certain events of taxation, assessment
or governmental charge with respect to payments on such Debt Securities to the
extent that the amount thereof exceeds the amount deposited in respect of such
Additional Amounts as provided below, and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency in respect of such Debt Securities, to hold moneys for payment in
trust, and, if applicable, to exchange or convert such Debt Securities into
other securities in accordance with their terms) ("defeasance"), or (b) to
omit to comply with its obligations with respect to certain restrictive
covenants in Section 1005 (Statement as to Compliance), Section 102
(Compliance Certificates and Opinions), and, to the extent specified pursuant
to Section 301, any other covenant applicable to such Debt Securities in the
Indenture, and any omission to comply
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with such obligations shall not constitute a default or an Event of Default
with respect to the Debt Securities of such series ("covenant defeasance"), in
either case upon the irrevocable deposit with the Trustee (or other qualifying
trustee), in trust for such purpose, of an amount, in U.S. dollars and/or
Government Obligations (as defined in the Indenture) which through the
scheduled payment of principal and interest in accordance with their terms
will provide money in an amount sufficient to pay the principal of and any
premium and any interest on (and, to the extent that (x) the Debt Securities
of such series provide for the payment of Additional Amounts and (y) the
amount of any such Additional Amounts is at the time of deposit reasonably
determinable by the Company, any such Additional Amounts with respect to) such
Debt Securities, and any mandatory sinking fund or analogous payments thereon,
on the due dates therefor, whether upon maturity, redemption or otherwise.
(Section 402)
Such defeasance or covenant defeasance shall only be effective if, among
other things, (i) it shall not result in a breach or violation of, or
constitute a default under, the Indenture or any other material agreement to
which the Company is a party or is bound, and (ii) the Company has delivered
to the Trustee an opinion of counsel (as specified in the Indenture) to the
effect that the holders of such Debt Securities and Coupons appertaining
thereto will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance or covenant defeasance, as the case
may be, and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred. It shall also be a
condition to the effectiveness of such defeasance (but not covenant
defeasance) that no Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to Debt Securities
and Coupons by appertaining thereto of such series shall have occurred and
been continuing on the date of, or during the period ending on the 91st day
after the date of, such deposit into trust. (Section 402)
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because
of the occurrence of any Event of Default other than an Event of Default with
respect to any other covenant as to which there has been covenant defeasance,
the amount of monies and/or Government Obligations deposited with the Trustee
to effect such covenant defeasance may not be sufficient to pay amounts due on
such Debt Securities and Coupons appertaining thereto at the time of any
acceleration resulting from such Event of Default. However, the Company and
Thermo Electron would remain liable to make payment of such amounts due at the
time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting or restricting such defeasance or covenant defeasance with
respect to the Debt Securities of a particular series.
MODIFICATION, WAIVERS AND MEETINGS
The Indenture contains provisions permitting the Company, Thermo Electron
and the Trustee thereunder, with the consent of the holders of a majority in
principal amount of the outstanding Debt Securities of each series and
affected by a modification or amendment, to modify or amend any of the
provisions of the Indenture or of the Debt Securities of such series or the
rights of the holders of the Debt Securities of such series under the
Indenture, provided that no such modification or amendment shall, among other
things, (i) change the Stated Maturity of the principal of, or premium, if
any, or any installment of principal or interest on or Additional Amounts with
respect to any Debt Securities or any sinking fund or analogous payment with
respect thereof or reduce the principal amount thereof or any premium thereon,
or the rate of interest thereon (or modify the calculation of such rate), or
change the obligation of the Company to pay Additional Amounts, or reduce the
amount of principal of any Debt Security that would be due and payable upon an
acceleration of the maturity thereof, or adversely affect any right of
repayment at the option of any Holder, or change the provisions of the
Indentures relating to the Place of Payment for Bearer Debt Securities being
located outside the United States, or the Currency in which the principal of,
any premium or interest on, or any Additional Amounts with respect to any Debt
Security or any sinking or analogous fund payment in respect thereof, is
payable, or impair the Holder's right to institute suit to enforce the payment
of any such Debt Securities, or (ii) reduce the aforesaid percentage in
principal amount of Debt Securities
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of any series, the consent of the Holders of which is required for any such
modification or amendment or the consent of whose holders is required for any
waiver (of compliance with certain provisions of the Indenture or certain
defaults thereunder and their consequences) or reduce the requirements for a
quorum or voting at a meeting of holders of such Debt Securities. (Section
902) The Indenture also contains provisions permitting the Company, Thermo
Electron and the Trustee, without the consent of the holders of any Debt
Securities issued thereunder, to modify or amend the Indenture in order to,
among other things, (a) add to the Events of Default or the covenants of the
Company or Thermo Electron for the benefit of the holders of all or any series
of Debt Securities; (b) to add or change any provisions of the Indenture to
facilitate the issuance of Bearer Securities; (c) to establish the form or
terms of Debt Securities of any series and any related Coupons; (d) to cure
any ambiguity or correct or supplement any provision therein which may be
defective or inconsistent with other provisions therein, or to make any other
provisions with respect to matters or questions arising under the Indenture
which shall not adversely affect the interests of the Holders of any series of
Debt Securities in any material respect; or (e) to amend or supplement any
provision contained in the Indenture, provided that such amendment or
supplement does not apply to any Outstanding Debt Securities issued prior to
the date of such amendment or supplement and entitled to the benefits of such
provision. (Section 901)
The Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series may, on behalf of all Holders of Debt Securities
of that series, waive any past default under the Indenture with respect to
Debt Securities of that series and its consequences, except a default in the
payment of the principal of, or premium, if any, or interest on or any
Additional Amounts with respect to, any Debt Securities or any Coupons
appertaining thereto of such series or in respect of a covenant or provision
which cannot be modified or amended without the consent of the Holder of each
outstanding Debt Security of such series affected. (Section 513)
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of each series. (Section 1601) A meeting may be called at any
time by the Trustee, and also, upon request, by the Company or the Holders of
at least 10% in principal amount of the Outstanding Debt Securities of such
series, in any such case upon notice given in accordance with the provisions
of the Indenture. (Section 1602) Except for any consent which must be given by
the Holder of each outstanding Debt Security affected thereby, as described
above, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum (as described below) is present may be adopted by
the affirmative vote of the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series; provided, however, that any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which may be made, given or taken by
the Holders of a specified percentage, which is less or more than a majority,
in principal amount of the Outstanding Debt Securities of a series may be
adopted at a meeting or adjourned meeting duly reconvened at which a quorum is
present by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Debt Securities of that series. Any
resolution passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with the Indenture will be
binding on all Holders of Debt Securities of that series and the related
Coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing a majority in
principal amount of the Outstanding Debt Securities of a series, subject to
certain exceptions. (Section 1604)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each of the Company and Thermo Electron, without the consent of any Holders
of Debt Securities, may consolidate or merge with or into, or transfer or
lease its properties or assets substantially as an entirety to, any Person,
and any other Person may consolidate or merge with and into, or transfer or
lease properties or assets substantially as an entirety to, the Company or
Thermo Electron provided that (i) the Person (if other than the Company or
Thermo Electron) formed by any such consolidation or into which the Company or
Thermo Electron is merged or which acquires or leases the properties or assets
of the Company or Thermo Electron substantially as an entirety is a
corporation, partnership or trust organized and validly existing under the
laws of any United States jurisdiction or, subject to certain additional
requirements, a corporation, limited liability company, partnership or trust
organized under the laws of a jurisdiction other than the United States, that
assumes the
27
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Company's or Thermo Electron's obligations on the Debt Securities or the
Guarantees, as the case may be, and under the Indentures, (ii) immediately
after giving effect to such transaction no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing, and (iii) certain other
conditions are met. Upon compliance with these provisions by a successor
corporation, the Company or Thermo Electron, as the case may be, would be
relieved from its obligations under the Securities and the Guarantees, as the
case may be, and under the Indenture. (Article Eight)
NOTICES
Notice to Holders of Registered Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register. Notice
to Holders of Bearer Securities, if any, will be given by publication in a
leading daily newspaper in the English language of general circulation in New
York City and, if such Debt Securities are then listed on any stock exchange
outside the United States, in a daily newspaper of general circulation in the
city that such stock exchange requires. (Section 106)
TITLE
The Company, Thermo Electron, the Trustee and any agent of the Company,
Thermo Electron or the Trustee may treat the Person in whose name a Debt
Security is registered as the absolute owner thereof (whether or not such Debt
Security may be overdue) for the purpose of making payment and for all other
purposes. Title to Bearer Securities passes on delivery. (Section 308)
GOVERNING LAW
The Indentures, the Debt Securities and the Guarantees will be governed by,
and construed in accordance with, the laws of the Commonwealth of
Massachusetts applicable to agreements made or instruments entered into and,
in each case, performed in said state, except that the rights, protections,
obligations, indemnities and immunities of the Trustee under the Indentures
shall be governed by, and construed in accordance with, the laws of the State
of New York, without regard to the conflicts of laws principles of either
state. (Section 113)
CONCERNING THE TRUSTEE
The Indentures contain certain limitations on the right of the Trustee,
should it become a creditor of the Company or Thermo Electron, to obtain
payment of claims in certain cases, or to realize for its own account on
certain property received in respect of any such claim as security or
otherwise. (Section 611) The Trustee will be permitted to engage in certain
other transactions; however, if it acquires any conflicting interest and there
is a default under the Debt Securities, it must eliminate such conflict or
resign. (Section 613)
The Trustee serves as a depositary of funds of, and performs other services
for, Thermo Electron and its subsidiaries, and is trustee and fiscal agent
under several other indentures and fiscal agency agreements pursuant to which
debentures of Thermo Electron and various of its subsidiaries have been
issued.
28
<PAGE>
PLAN OF DISTRIBUTION
The Securities may be sold to or through underwriters or to dealers acting
as principals for their own account, and also may be sold directly to other
purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or Thermo Electron or from purchasers of
Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters may sell Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers and agents
that participate in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the
Company or Thermo Electron and any profit on the resale of Securities by them
may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Company or Thermo Electron will be described,
in the Prospectus Supplement.
Under agreements which may be entered into by the Company and, in the case
of Debt Securities, Thermo Electron, underwriters and agents who participate
in the distribution of Securities may be entitled to indemnification by the
Company and Thermo Electron against certain liabilities, including liabilities
under the Securities Act.
Any Securities issued hereunder (other than Common Stock) will be new issues
of securities with no established trading market. The Company and Thermo
Electron may not apply for the listing of any Securities (other than the
Common Stock) on any national securities exchange or on Nasdaq. No assurance
can be given as to the liquidity of the trading market for any such
Securities.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with, and perform services for, the
Company or Thermo Electron in the ordinary course of business.
VALIDITY OF SECURITIES
The validity of the Securities to which this Prospectus relates will be
passed upon for the Company and, in the case of Debt Securities, Thermo
Electron by Seth H. Hoogasian, Esq., General Counsel of the Company and Thermo
Electron. Mr. Hoogasian is a full-time employee of Thermo Electron. The
validity of the Securities offered hereby will be passed upon for any relevant
Underwriters by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts.
EXPERTS
The financial statements of the Company and Thermo Electron incorporated by
reference in this Prospectus and the financial statement schedules
incorporated by reference in the Registration Statement of which this
Prospectus forms a part have been audited by Arthur Andersen LLP, independent
public accountants, to the extent and for the periods as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.
29
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, ANY SUCH IN-
FORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THERMO ELECTRON OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT
OR THE ACCOMPANYING PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SO-
LICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLE-
MENT OR THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN AND THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Prospectus Supplement
The Offering............................................................... S-3
Recent Developments........................................................ S-5
Use of Proceeds............................................................ S-6
Price Range of Common Stock and Dividend Policy............................ S-7
Capitalization............................................................. S-8
Selected Financial Information............................................. S-9
Capitalization of Thermo Electron.......................................... S-10
Selected Financial Information of Thermo Electron.......................... S-12
Description of Debentures and the Guarantees............................... S-13
United States Taxation for Non-U.S. Persons................................ S-16
Underwriting............................................................... S-19
Legal Matters.............................................................. S-21
Prospectus
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Risk Factors............................................................... 4
The Company................................................................ 4
Thermo Electron............................................................ 4
Use of Proceeds............................................................ 5
Ratios of Earnings to Fixed Charges........................................ 6
Description of Debt Securities of the Company and the Guarantees........... 6
Plan of Distribution....................................................... 29
Validity of Securities..................................................... 29
Experts.................................................................... 29
</TABLE>
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$110,000,000
THERMOTREX CORPORATION
3 1/4% CONVERTIBLE SUBORDINATED
DEBENTURES DUE 2007
GUARANTEED ON A SUBORDINATED BASIS
BY THERMO ELECTRON CORPORATION
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PROSPECTUS SUPPLEMENT
October 28, 1997
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LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
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