THERMO ELECTRON CORPORATION
81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
April 30, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting
of the Stockholders of Thermo Electron Corporation. Your Board of
Directors and management look forward to greeting personally
those Stockholders able to attend. Our Annual Report for the
year ended December 28, 1996, is enclosed. We hope you will read
it carefully. Please feel free to forward any questions you may
have if you are unable to attend the meeting.
At the meeting, you will be asked to elect three directors,
approve a proposal to increase the number of shares of common
stock available for issuance under the Corporation's equity
incentive plan, and to vote on a stockholder proposal if it is
presented at the meeting. These proposals are more fully
discussed in the accompanying proxy statement, which you are
urged to read carefully. Your Board of Directors recommends a
vote FOR proposals 1 and 2, and AGAINST proposal 3, if presented.
Enclosed with this letter is a proxy authorizing three
officers of the Corporation to vote your shares for you if you do
not attend the meeting. It is important that your shares are
represented and voted at the meeting whether or not you plan to
attend. Accordingly, you are requested to sign, date and mail the
enclosed proxy in the envelope provided at your earliest
convenience.
On behalf of the Board of Directors, thank you for your
cooperation and continued support.
Yours very truly,
GEORGE N. HATSOPOULOS
Chairman and Chief
Executive Officer
PAGE
<PAGE>
JOHN N. HATSOPOULOS
President and Chief
Financial Officer
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR
PROXY CARD.
THERMO ELECTRON CORPORATION
81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
April 30, 1997
To the Holders of the Common Stock of
THERMO ELECTRON CORPORATION
NOTICE OF ANNUAL MEETING
The 1997 Annual Meeting of the Stockholders of Thermo
Electron Corporation ("Thermo Electron" or the "Corporation")
will be held on Tuesday, June 3, 1997, at 4:00 p.m. at The Hyatt
Regency Hotel, Hilton Head, South Carolina. The purpose of the
meeting is to consider and take action upon the following
matters:
1. Election of three directors, comprising the class of
directors to be elected for a three-year term expiring in the
year 2000.
2. A proposal recommended by the Board of Directors to increase
the number of shares of the common stock available for issuance
under the Corporation's equity incentive plan by five million
shares.
3. A stockholder proposal, if presented by its proponents at
the meeting.
4. Such other business as may properly be brought before the
meeting and any adjournment thereof.
The transfer books of the Corporation will not be closed
prior to the meeting, but, pursuant to appropriate action by the
PAGE
<PAGE>
Board of Directors, the record date for the determination of the
Stockholders entitled to notice of and to vote at the meeting is
April 7, 1997.
The By-laws require that the holders of a majority of the
stock issued and outstanding and entitled to vote be present or
represented by proxy at the meeting in order to constitute a
quorum for the transaction of business. It is important that your
stock be represented at the meeting regardless of the number of
shares you may hold. Enclosed is a proxy authorizing three
officers of the Corporation to vote your shares as you instruct.
Whether or not you are able to be present in person, please sign
the enclosed proxy and return it promptly to our transfer agent
in the accompanying envelope, which requires no postage if mailed
in the United States.
This Notice, the proxy and proxy statement enclosed herewith
are sent to you by order of the Board of Directors.
SANDRA L. LAMBERT
Secretary
PAGE
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of
Thermo Electron Corporation ("Thermo Electron" or the
"Corporation") for use at the 1997 Annual Meeting of the
Stockholders (the "Meeting") to be held on Tuesday, June 3, 1997,
at 4:00 p.m. at The Hyatt Regency Hotel, Hilton Head, South
Carolina, and any adjournment thereof. The mailing address of the
executive office of the Corporation is 81 Wyman Street, P.O. Box
9046, Waltham, Massachusetts 02254-9046. This proxy statement and
the enclosed proxy were first furnished to Stockholders of the
Corporation on or about May 5, 1997.
VOTING PROCEDURES
The Board of Directors intends to present to the Meeting the
election of three directors, comprising the class of directors to
be elected for a three-year term expiring in 2000, as well as one
other matter: a proposal to increase the number of shares of
common stock available for issuance under the Corporation's
equity incentive plan by five million shares.
The representation in person or by proxy of a majority of
the outstanding shares of common stock, $1.00 par value, of the
Corporation ("Common Stock") entitled to vote at the Meeting is
necessary to provide a quorum for the transaction of business at
the Meeting. Shares can only be voted if the Stockholder is
present in person or is represented by returning a properly
signed proxy. Each Stockholder's vote is very important. Whether
or not you plan to attend the Meeting in person, please sign and
promptly return the enclosed proxy card, which requires no
postage if mailed in the United States. All signed and returned
proxies will be counted towards establishing a quorum for the
Meeting, regardless of how the shares are voted. An abstention or
withholding authority to vote will be counted as present for
determining whether the quorum requirement is satisfied.
Shares represented by proxy will be voted in accordance with
your instructions. You may specify your choice by marking the
appropriate box on the proxy card. If your proxy card is signed
and returned without specifying choices, your shares will be
voted FOR the management nominees for directors, FOR the
management proposal, AGAINST the stockholder proposal, and as the
individuals named as proxy holders on the proxy deem advisable on
all other matters as may properly come before the Meeting.
A plurality of the votes of the shares present and entitled
to vote is required to approve the election of directors. For the
proposal to increase the number of shares available for issuance
under the Corporation's equity incentive plan and the stockholder
proposal, the affirmative vote of a majority of the Corporation's
outstanding Common Stock present or represented by proxy and
entitled to vote on the matter is necessary for approval.
Withholding authority to vote for a nominee for director or an
PAGE
<PAGE>
instruction to abstain from voting on a proposal will be treated
as shares present and entitled to vote and, for purposes of
determining the outcome of the vote, will have the same effect as
a vote against the nominee or the proposal. With respect to the
election of directors, the management proposal and the
stockholder proposal, broker "non-votes" will not be treated as
shares present and entitled to vote on a voting matter and will
have no effect on the outcome of the vote. A broker "non-vote"
occurs when a nominee holding shares for a beneficial holder does
not have discretionary voting power and does not receive voting
instructions from the beneficial owner.
A Stockholder who returns a proxy may revoke it at any time
before the Stockholder's shares are voted at the Meeting by
written notice to the Secretary of the Corporation received prior
to the Meeting, by executing and returning a later dated proxy or
by voting by ballot at the Meeting.
The outstanding stock of the Corporation entitled to vote
(excluding shares held in treasury by the Corporation) as of
April 7, 1997 consisted of 150,141,017 shares of Common Stock.
Only Stockholders of record at the close of business on April 7,
1997 are entitled to vote at the Meeting. Each share is entitled
to one vote.
PAGE
<PAGE>
-PROPOSAL 1-
ELECTION OF DIRECTORS
Three directors are to be elected at the Meeting, and Dr.
John M. Albertine, Mr. Peter O. Crisp and Mr. Roger D. Wellington
are listed below as nominees for the three-year term expiring at
the Annual Meeting of the Stockholders to be held in the year
2000. For purposes of this Meeting, the Board of Directors has
fixed the number of directors at ten, divided into three classes
as nearly equal in number as possible. Each class is elected for
a three-year term at successive Annual Meetings of the
Stockholders. In all cases, directors hold office until their
successors have been elected and qualified, or until their
earlier resignation, death or removal.
Nominees and Incumbent Directors
Set forth below are the names of the persons nominated as
directors and directors whose terms do not expire this year,
their ages, their offices in the Corporation, if any, their
principal occupations or employment for the past five years, the
length of their tenure as directors and the names of other public
companies in which such persons hold directorships. Information
regarding their beneficial ownership of the Corporation's Common
Stock and of the common stock of certain subsidiaries of the
Corporation is reported under the caption "Stock Ownership." All
of the nominees are currently directors of the Corporation.
Nominees for Directors Whose Term of Office Will Expire in 2000
John M. Dr. Albertine, 52, has been a director of the
Albertine Corporation since 1986. Dr. Albertine serves as
chairman of the board and chief executive
officer of Albertine Enterprises, Inc., an
economic and public policy consulting firm he
founded in 1990. He also serves as chairman of
The Jian Group Holdings, LLC, a full-service
mergers and acquisitions firm. Dr. Albertine is
also a director of American Precision
Industries, Inc., BBN Corporation and
Intermagnetics General Corp.
Peter O. Crisp Mr. Crisp, 64, has been a director of the
Corporation since 1974. Mr. Crisp has been a
general partner of Venrock Associates, a venture
capital investment firm, for more than five
years. Mr. Crisp is also a director of American
Superconductor Corporation, Evans & Sutherland
Computer Corporation, Long Island Lighting
Company, Thermedics Inc., Thermo Power
Corporation, ThermoTrex Corporation and United
States Trust Corporation.
PAGE
<PAGE>
Roger D. Mr. Wellington, 70, has been a director of the
Wellington Corporation since 1986. Mr. Wellington serves
as the president and chief executive officer of
Wellington Consultants, Inc. and of Wellington
Associates Inc., international business
consulting firms he founded in 1994 and 1989,
respectively. Prior to 1989, Mr. Wellington
served as chairman of the board of Augat Inc., a
manufacturer of electromechanical components and
systems, for more than five years. Prior to
1988, Mr. Wellington also served as the chief
executive officer and president of Augat Inc.
for more than ten years. Mr. Wellington is also
a director of BBN Corporation and Photoelectron
Corporation.
Incumbent Directors Whose Term of Office Will Expire in 1999
George N. Dr. Hatsopoulos, 70, has been a director, the
Hatsopoulos chairman of the board and chief executive
officer of the Corporation since he founded the
Corporation in 1956. Until March 1997, he was
also the president of the Corporation. Dr.
Hatsopoulos is also a director of Photoelectron
Corporation, Thermedics Inc., Thermo Ecotek
Corporation, Thermo Fibertek Inc., Thermo
Instrument Systems Inc., Thermo Optek
Corporation, ThermoQuest Corporation and
ThermoTrex Corporation. Dr. Hatsopoulos is the
brother of Mr. John N. Hatsopoulos, the
president and the chief financial officer of the
Corporation.
Robert A. Mr. McCabe, 62, has been a director of the
McCabe Corporation since 1962. He has served as
president of Pilot Capital Corporation, which is
engaged in private investments and provides
acquisition services, since 1987. Prior to that
time Mr. McCabe was a managing director of
Lehman Brothers Inc., an investment banking
firm. Mr. McCabe is also a director of
Borg-Warner Security Corporation, Church &
Dwight Company, Morrison-Knudsen Corporation and
Thermo Optek Corporation.
PAGE
<PAGE>
Hutham S. Ms. Olayan, 43, has been a director of the
Olayan Corporation since 1987. She has served as
president and a director of Olayan America
Corporation since 1995 and Competrol Real Estate
Limited since 1986, members of the Olayan Group
engaged in advisory services and private real
estate investments, respectively. Ms. Olayan
also served as president and a director of
Crescent Diversified Limited, a member of the
Olayan Group engaged in private investments,
from 1985 until 1994. Ms. Olayan is also a
director of Trex Medical Corporation.
Incumbent Directors Whose Term of Office Will Expire in 1998
Elias P. Dr. Gyftopoulos, 69, has been a director of the
Gyftopoulos Corporation since 1976. Dr. Gyftopoulos is
Professor Emeritus of the Massachusetts
Institute of Technology, where he was the Ford
Professor of Mechanical Engineering and of
Nuclear Engineering for more than 20 years until
his retirement in 1996. Dr. Gyftopoulos is also
a director of Thermo BioAnalysis Corporation,
Thermo Cardiosystems Inc., ThermoLase
Corporation, Thermo Remediation Inc.,
ThermoSpectra Corporation, Thermo Voltek Corp.
and Trex Medical Corporation.
Frank Jungers Mr. Jungers, 70, has been a director of the
Corporation since 1978. Mr. Jungers has been a
consultant on business and energy matters since
1977. Mr. Jungers was employed by the Arabian
American Oil Company from 1974 through 1977 as
chairman and chief executive officer. Mr.
Jungers is also a director of The AES
Corporation, Donaldson, Lufkin & Jenrette,
Georgia-Pacific Corporation, Thermo Ecotek
Corporation and ThermoQuest Corporation.
Frank E. Dr. Morris, 73, has been a director of the
Morris Corporation since 1989. Dr. Morris served as
president of the Federal Reserve Bank of Boston
from 1968 until he retired in 1988. Dr. Morris
also served as the Peter Drucker Professor of
Management at Boston College from 1989 to 1994.
Dr. Morris is a trustee of SEI Mutual Funds, The
Capitol Mutual Funds, FFB Lexicon Funds, The
Arbor Fund and Thermo Remediation Inc.
PAGE
<PAGE>
Donald E. Mr. Noble, 82, has been a director of the
Noble Corporation since 1983. For more than 20 years,
from 1959 to 1980, Mr. Noble served as the chief
executive officer of Rubbermaid, Incorporated,
first with the title of president and then as
chairman of the board. Mr. Noble is also a
director of Thermo Fibertek Inc., Thermo Power
Corporation, Thermo Sentron Inc. and Thermo
TerraTech Inc.
Committees of the Board of Directors and Meetings
The Board of Directors has established an Executive
Committee, an Audit Committee and a Human Resources Committee.
The present members of the Executive Committee are Dr.
Hatsopoulos (Chairman), Mr. Crisp, Mr. Jungers and Mr. Noble. The
Executive Committee is empowered to act when it is impractical to
call a meeting of the entire Board of Directors and, with certain
exceptions, has the powers of the Board of Directors. The Audit
Committee consists solely of outside directors, and its present
members are Mr. Jungers (Chairman), Dr. Albertine, Mr. McCabe and
Dr. Morris. The Audit Committee reviews the scope of the audit
with the Corporation's independent public accountants and meets
with them for the purpose of reviewing the results of the audit
subsequent to its completion. The Human Resources Committee
consists solely of outside directors and its present members are
Mr. Noble (Chairman), Dr. Gyftopoulos, Mr. Jungers, Ms. Olayan
and Mr. Wellington. The Human Resources Committee reviews
corporate organization, reviews the performance of senior members
of management, recommends executive compensation and administers
the Corporation's stock option and other stock-based compensation
plans. The Corporation does not have a nominating committee of
the Board of Directors. The Board of Directors met sixteen times,
the Audit Committee met twice, the Executive Committee met once
and the Human Resources Committee met eleven times during fiscal
1996. Each director attended at least 75% of all meetings of the
Board of Directors and committees on which he or she served held
during fiscal 1996.
Compensation of Directors
Cash Compensation
Directors who are not employees of the Corporation or any
companies affiliated with Thermo Electron ("outside directors")
receive an annual retainer of $20,000 and a fee of $1,000 per day
for attending regular meetings of the Board of Directors or its
committees and for each day of consulting for the Board of
Directors, and $500 per day for participating in meetings of the
Board of Directors or such committees held by means of conference
telephone. Payment of directors' fees is made quarterly. Dr. G.
Hatsopoulos, who is a full-time employee of the Corporation, does
not receive any cash compensation from the Corporation for his
service as a director. Directors are also reimbursed for
PAGE
<PAGE>
out-of-pocket expenses and in some instances for travel time
incurred in attending such meetings.
Deferred Compensation Plan for Directors
Under the Corporation's Deferred Compensation Plan for
directors (the "Deferred Compensation Plan"), a director has the
right to defer receipt of his cash fees until he ceases to serve
as a director, dies or retires from his principal occupation. In
the event of a change in control or proposed change in control of
the Corporation that is not approved by the Board of Directors,
deferred amounts become payable immediately. Either of the
following is deemed to be a change of control: (a) the
occurrence, without the prior approval of the Board of Directors,
of the acquisition, directly or indirectly, by any person of 50%
or more of the outstanding Common Stock; or (b) the failure of
the persons serving on the Board of Directors immediately prior
to any contested election of directors or any exchange offer or
tender offer for the Common Stock to constitute a majority of the
Board of Directors at any time within two years following any
such event. Amounts deferred pursuant to the Deferred
Compensation Plan are valued at the end of each quarter as units
of Common Stock. When payable, amounts deferred may be disbursed
solely in shares of Common Stock accumulated under the Deferred
Compensation Plan. A total of 408,907 shares of Common Stock has
been reserved for issuance under the Deferred Compensation Plan.
As of March 1, 1997, deferred units equal to 304,383.44 shares of
Common Stock were accumulated under the Deferred Compensation
Plan.
Directors Stock Option Plan
The Corporation's directors stock option plan (the
"Directors Plan"), provides for the grant of stock options to
purchase shares of common stock of the Corporation and certain of
its majority-owned subsidiaries to outside directors as
additional compensation for their service as directors. Under
the Directors Plan, outside directors are automatically granted
options to purchase 1,000 shares of Common Stock annually. In
addition, the Directors Plan provides for the automatic grant of
options to purchase up to 1,500 shares of the common stock of
certain of the Corporation's publicly traded, majority-owned
subsidiaries and of each majority-owned subsidiary of the
Corporation that is subsequently "spun out" to outside investors.
Pursuant to the Directors Plan, outside directors receive an
annual grant of options to purchase 1,000 shares of Common Stock
at the close of business on the date of each Annual Meeting of
the Stockholders of the Corporation. Options evidencing annual
grants may be exercised at any time from and after the six-month
anniversary of the grant date of the option and prior to the
expiration of the option on the third anniversary of the grant
date. Shares acquired upon exercise of the options are subject
to repurchase by the Corporation at the exercise price if the
recipient ceases to serve as a director of the Corporation or any
PAGE
<PAGE>
other Thermo Electron company prior to the first anniversary of
the grant date.
In addition, under the Directors Plan, outside directors are
automatically granted options to purchase shares of common stock
of certain of the Corporation's publicly traded, majority-owned
subsidiaries as described in the Directors Plan and of each
majority-owned subsidiary of the Corporation that is subsequently
"spun out" to outside investors. Outside directors receive
options to purchase 1,500 shares of common stock for
majority-owned subsidiaries that are directly owned by the
Corporation and 1,000 shares of common stock for majority-owned
subsidiaries that are indirectly owned by the Corporation through
one or more of its other majority-owned subsidiaries. The grant
of options with respect to the common stock of subsidiaries that
are spun out occurs on the close of business on the date of the
first Annual Meeting of the Stockholders next following the
subsidiary's spinout, which is the first to occur of either an
initial public offering of the subsidiary's common stock or a
sale of such stock to third parties in an arms-length
transaction. The options granted vest and become exercisable on
the fourth anniversary of the date of grant, unless prior to such
date the subsidiary's common stock is registered under Section 12
of the Securities Exchange Act of 1934, as amended (''Section 12
Registration"). In the event that the effective date of Section
12 Registration occurs before the fourth anniversary of the grant
date, the option will become immediately exercisable and the
shares acquired upon exercise will be subject to restrictions on
transfer and the right of the Corporation to repurchase such
shares at the exercise price in the event the director ceases to
serve as a director of the Corporation or any other Thermo
Electron company. In the event of Section 12 Registration, the
restrictions and repurchase rights shall lapse or be deemed to
lapse at the rate of 25% per year, starting with the first
anniversary of the grant date. These options expire after five
years. At this Annual Meeting of the Stockholders, each outside
director will be granted options to purchase 1,500 shares of
common stock of Thermo Cardiosystems Inc. and 1,000 shares of the
common stock of each of (i) Thermo Optek Corporation, a
subsidiary of Thermo Instrument Systems Inc. that was spun out in
June 1996, (ii) Thermo Fibergen Inc., a subsidiary of Thermo
Fibertek Inc. that was spun out in September 1996, (iii) Metrika
Systems Corporation, a subsidiary of Thermo Instrument Systems
Inc. that was spun out in December 1996, (iv) Thermedics
Detection Inc., a subsidiary of Thermedics Inc. that was spun out
in November 1996 and (v) Thermo Information Solutions Inc., a
subsidiary of the Corporation that was spun in March 1997.
The exercise price for options granted under the Directors
Plan is the average of the closing prices of the common stock as
reported on the New York or American Stock Exchange (or other
principal market on which the common stock is then traded) for
the five trading days preceding and including the date of grant,
or, if the shares are not then traded, at the last price per
PAGE
<PAGE>
share paid by third parties in an arms-length transaction prior
to the option grant. As of March 1, 1997, options to purchase
84,375 shares of Common Stock had been granted and were
outstanding under the Directors Plan, no options had lapsed or
been exercised, and options to purchase 590,625 shares of Common
Stock were available for future grant under the Directors Plan.
Stock Ownership Policies for Directors
During 1996, the Human Resources Committee of the Board of
Directors (the "Committee") established a stock holding policy
for directors. The stock holding policy requires each director
to hold a minimum of 1,000 shares of Common Stock. Directors are
requested to achieve this ownership level by the 1998 Annual
Meeting of Stockholders. Directors who are also executive
officers of the Corporation are required to comply with a
separate stock holding policy established by the Committee in
1996, which is described in "Committee Report on Executive
Compensation - Stock Ownership Policies."
In addition, the Committee adopted a policy requiring
directors to hold shares of the Corporation's Common Stock equal
to one-half of their net option exercises over a period of five
years. The net option exercise is determined by calculating the
number of shares acquired upon exercise of a stock option, after
deducting the number of shares that could have been traded to
exercise the option and the number of shares that could have been
surrendered to satisfy tax withholding obligations attributable
to the exercise of the option. This policy is also applicable to
executive officers and is described in "Committee Report on
Executive Compensation - Stock Ownership Policies."
STOCK OWNERSHIP
The following table sets forth, as of March 1, 1997, the
beneficial ownership of the Corporation's Common Stock, by (a)
each director, (b) each of the Corporation's executive officers
named in the summary compensation table set forth below under the
heading "Executive Compensation," and (c) all directors and
current executive officers as a group, as well as their
beneficial ownership of each of the Corporation's majority-owned
subsidiaries as follows: (i) Thermo Ecotek Corporation, (ii)
Thermo Fibertek Inc. and Thermo Fibergen Inc., a majority-owned
subsidiary of Thermo Fibertek Inc., (iii) Thermo Power
Corporation and ThermoLyte Corporation, a majority-owned
subsidiary of Thermo Power Corporation, (iv) Thermo TerraTech
Inc. and Thermo Remediation Inc., a majority-owned subsidiary of
Thermo TerraTech Inc., (v) Thermedics Inc. and Thermedics
Detection Inc., Thermo Cardiosystems Inc., Thermo Sentron Inc.
and Thermo Voltek Corp., each a majority-owned subsidiary of
Thermedics Inc., (vi) ThermoTrex Corporation and ThermoLase
Corporation and Trex Medical Corporation, each a majority-owned
subsidiary of ThermoTrex Corporation, and (viii) Thermo
Instrument Systems Inc. and Thermo BioAnalysis Corporation,
PAGE
<PAGE>
Thermo Optek Corporation, ThermoQuest Corporation, ThermoSpectra
Corporation and Metrika Systems Corporation, each a
majority-owned subsidiary of Thermo Instrument Systems Inc. The
common stock of each of the majority-owned subsidiaries is
publicly traded except for the common stock of ThermoLyte
Corporation and Metrika Systems Corporation, which are privately
held.
While certain directors and executive officers of the
Corporation are also directors or executive officers of
majority-owned subsidiaries of the Corporation, all such persons
disclaim beneficial ownership of the shares of common stock of
other Thermo Electron companies owned by the Corporation or such
majority-owned subsidiaries.
<TABLE>
<CAPTION>
Thermo Thermo Thermo Thermo Thermo Thermo Thermo Thermo
Electron Ecotek Fibertek Fibergen Power Lyte Tech Remediation
Name Corp Corp Inc. Inc. Corp Corp Inc. Inc.
(2) (3) (4) (5) (6) (7) (8) (9)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John M. Albertine 39,357 2,250 6,750 0 3,000 1,000 1,500 4,500
Peter O. Crisp 98,904 5,191 6,750 474,600 34,161 101,500 3,660 4,500
Elias P. 71,070 2,250 6,750 0 3,000 15,000 1,500 27,600
Gyftopoulos
George N. 3,512,279 25,575 191,910 20,000 54,282 15,000 55,420 7,500
Hatsopoulos
John N. 526,768 35,569 119,155 20,000 45,953 15,000 62,306 42,182
Hatsopoulos
Frank Jungers 245,754 41,850 7,875 1,500 3,000 2,500 1,500 15,450
Robert A. McCabe 47,515 2,250 6,750 0 11,209 1,000 3,660 4,500
Frank E. Morris 23,498 2,250 6,750 0 3,000 1,000 1,500 26,751
Donald E. Noble 54,701 2,250 114,250 4,000 20,472 2,500 49,327 10,500
Hutham S. Olayan 23,995 2,250 6,750 1,000 3,000 1,000 1,500 4,500
William A. 252,294 6,000 517,894 41,500 0 6,000 6,000 24,000
Rainville
Arvin H. Smith 513,038 6,000 90,000 10,000 7,969 6,000 36,997 2,400
Roger D. 34,180 2,250 15,750 0 6,425 1,000 2,500 4,500
Wellington
John W. Wood, Jr. 263,199 3,321 9,000 10,000 0 6,000 0 0
All directors and
current executive
officers as a 6,197,962 157,647 1,200,834 589,600 219,425 179,500 314,800 212,764
group (16 persons)
</TABLE>
<TABLE>
<CAPTION>
Thermo
Thermedics Cardio- Thermo Thermo Thermo Thermo Trex
Thermedics Detection systems Sentron Voltek Trex Lase Medical
Name Inc. Inc. Inc. Inc. Corp Corp Corp Corp
(10) (11) (12) (13) (14) (15) (16) (17)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John M. Albertine 4,500 1,000 11,250 1,000 11,250 4,500 2,000 1,000
Peter O. Crisp 46,186 1,500 24,750 2,500 2,250 43,165 2,000 1,000
Elias P. 4,500 1,000 14,500 1,000 3,750 4,500 61,400 40,000
Gyftopoulos
George N. 63,546 0 11,599 17,000 0 48,746 31,125 41,188
Hatsopoulos
John N. 65,618 0 432 30,000 11,623 23,844 63,503 40,983
Hatsopoulos
Frank Jungers 9,000 5,550 11,250 1,000 6,000 11,000 3,300 3,850
Robert A. McCabe 7,915 10,000 11,250 3,000 3,300 10,000 4,100 2,050
Frank E. Morris 4,500 1,000 11,250 1,000 1,500 4,500 2,000 1,000
Donald E. Noble 14,173 1,000 11,250 16,785 1,500 4,500 6,000 1,000
Hutham S. Olayan 4,500 1,000 11,250 1,000 1,500 4,500 2,000 45,199
William A. 0 0 0 7,000 0 2,700 10,000 20,000
Rainville
Arvin H. Smith 91,290 0 30,000 7,000 0 2,700 10,000 20,000
Roger D. 4,500 1,000 11,250 1,000 1,500 4,500 2,000 1,000
Wellington
John W. Wood, Jr. 175,347 27,854 40,332 33,000 93,071 900 10,000 20,000
All directors and
current executive
officers as a 533,809 50,904 205,163 129,285 127,494 187,985 349,371 265,715
group (16 persons)
</TABLE>
<TABLE>
<CAPTION>
Thermo
Thermo Bio- Thermo Thermo- Thermo- Metrika
Instrument Analysis Optek Quest Spectra Systems
Name Systems Corp Corp Corp Corp Corp
Inc.
(18) (19) (20) (21) (22) (23)
<S> <C> <C> <C> <C> <C> <C>
John M. Albertine 1,875 1,000 0 1,000 1,000 20,000
Peter O. Crisp 17,693 1,000 0 1,000 161,000 0
Elias P. 47,018 15,000 0 1,000 20,000 0
Gyftopoulos
George N. 143,314 25,000 110,000 90,000 20,000 0
Hatsopoulos
John N. 81,204 25,000 120,000 92,100 20,000 0
Hatsopoulos
Frank Jungers 52,568 5,500 10,000 45,565 5,500 0
Robert A. McCabe 53,504 3,000 54,734 1,000 8,318 10,000
Frank E. Morris 1,875 1,000 0 1,000 1,000 0
Donald E. Noble 54,688 4,000 0 2,300 4,000 3,000
Hutham S. Olayan 1,875 1,000 0 1,000 1,000 0
William A. 0 6,000 15,000 15,000 10,000 0
Rainville
Arvin H. Smith 431,667 39,000 98,000 90,000 20,000 0
Roger D. 4,875 1,000 0 1,000 1,000 0
Wellington
John W. Wood, Jr. 15,608 6,000 15,000 15,000 5,000 0
All directors and
current executive
officers as a 954,430 141,500 437,234 368,965 287,318 33,000
group (16 persons)
</TABLE>
(1) Except as reflected in the footnotes to this table, shares
of the Common Stock of the Corporation and of the common stock of
each of the Corporation's subsidiaries beneficially owned consist
of shares owned by the indicated person or by that person for the
benefit of minor children, and all share ownership includes sole
voting and investment power.
(2) The number of shares of Common Stock reported in the table
reflects a three-for-two split of such stock distributed in June
1996 in the form of a 50% stock dividend. Shares of the Common
Stock of the Corporation beneficially owned by Dr. Albertine, Mr.
Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos,
Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan, Mr.
Rainville, Mr. Smith, Mr. Wellington, Mr. Wood and all directors
and current executive officers as a group include 9,375, 9,375,
9,375, 1,499,500, 429,685, 9,375, 9,375, 9,375, 9,375, 9,375,
205,648, 222,411, 9,375, 227,658 and 2,836,601 shares,
respectively, that such person or members of the group have the
right to acquire within 60 days of March 1, 1997, through the
exercise of stock options. Shares beneficially owned by Dr. G.
Hatsopoulos, Mr. J. Hatsopoulos, Mr. Smith and all directors and
current executive officers as a group include 2,164, 1,934,
1,717, and 9,687 full shares, respectively, allocated to their
respective accounts maintained pursuant to the Corporation's
employee stock ownership plan (the "ESOP"), of which the
trustees, who have investment power over its assets, are
executive officers of the Corporation. Shares beneficially
owned by Dr. Albertine, Mr. Crisp, Mr. Jungers, Mr. McCabe, Dr.
Morris, Mr. Noble, Ms. Olayan, Mr. Wellington and all directors
and current executive officers as a group include 29,982, 44,885,
80,427, 34,725, 10,708, 41,911, 14,620, 22,275, and 279,533
shares, respectively, allocated to accounts maintained pursuant
to the Corporation's deferred compensation plan for directors.
Shares beneficially owned by Dr. G. Hatsopoulos include 89,601
shares held by his spouse, 168,750 shares held by a QTIP trust of
PAGE
<PAGE>
which his spouse is a trustee, 39,937 shares held by a family
trust of which his spouse is the trustee, and 153 shares
allocated to his spouse's account maintained pursuant to the
ESOP. Shares beneficially owned by Mr. Jungers include 4,500
shares held by Mr. Jungers' spouse. Shares beneficially owned by
Mr. Morris include 3,415 shares held by Mr. Morris' spouse.
Shares beneficially owned by Ms. Olayan do not include 4,300,000
shares owned by Crescent Holding GmbH, a member of the Olayan
Group. Crescent Holding GmbH is indirectly controlled by Suliman
S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims beneficial
ownership of the shares owned by Crescent Holding GmbH. Except
for Dr. G. Hatsopoulos, who beneficially owned 2.3% of the Common
Stock outstanding as of March 1, 1997, no director or executive
officer beneficially owned more than 1% of the Common Stock
outstanding as of such date; all directors and current executive
officers as a group beneficially owned 4.1% of the Common Stock
outstanding as of March 1, 1997.
(3) The number of shares of the common stock of Thermo Ecotek
Corporation reported in the table reflects a three-for-two split
of such stock distributed in October 1996 in the form of a 50%
stock dividend. Shares of the common stock of Thermo Ecotek
Corporation beneficially owned by Dr. Albertine, Mr. Crisp, Dr.
Gyftopoulos, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers,
Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr.
Smith, Mr. Wellington and all directors and current executive
officers as a group include 2,250, 2,250, 2,250, 15,000, 13,257,
37,500, 2,250, 2,250, 2,250, 2,250, 6,000, 6,000, 2,250 and
112,257 shares, respectively, that such person or members of the
group have the right to acquire within 60 days of March 1, 1997,
through the exercise of stock options. Shares beneficially owned
by Mr. Jungers include 300 shares held by Mr. Jungers' spouse.
The directors and current executive officers did not individually
or as a group beneficially own more than 1% of the Thermo Ecotek
Corporation common stock outstanding as of March 1, 1997.
(4) The number of shares of common stock of Thermo Fibertek Inc.
reported in the table reflects a three-for-two split of such
stock distributed in June 1996 in the form of a 50% stock
dividend. Shares of the common stock of Thermo Fibertek Inc.
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 6,750, 6,750, 6,750, 157,910, 97,200,
6,750, 6,750, 6,750, 95,850, 6,750, 495,000, 90,000, 6,750, 9,000
and 1,082,210 shares, respectively, that such person or members
of the group have the right to acquire within 60 days of March 1,
1997, through the exercise of stock options. Shares beneficially
owned by Mr. Noble and all directors and current executive
officers as a group include 5,715 shares allocated to Mr. Noble's
account maintained pursuant to Thermo Fibertek Inc.'s deferred
compensation plan for directors. Shares beneficially owned by Mr.
Jungers include 1,125 shares held by his spouse. No director or
PAGE
<PAGE>
executive officer beneficially owned more than 1% of the Thermo
Fibertek Inc. common stock outstanding as of March 1, 1997; all
directors and current executive officers as a group beneficially
owned 1.9% of the Thermo Fibertek Inc. common stock outstanding
as of such date.
(5) Shares of the common stock of Thermo Fibergen Inc.
beneficially owned by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr.
Rainville, Mr. Smith, Mr. Wood and all directors and current
executive officers as a group include 20,000, 20,000, 40,000,
10,000, 10,000 and 107,000 shares, respectively, that such person
or members of the group have the right to acquire within 60 days
of March 1, 1997, through the exercise of stock options. Shares
beneficially owned by Mr. Crisp include 470,600 shares held in
the aggregate by entities affiliated with Venrock Associates.
Mr. Crisp is both a general and limited partner of Venrock
Associates and therefore, may be deemed to beneficially own the
shares held by such entities. Mr. Crisp disclaims beneficial
ownership of such shares, except to the extent of his pecuniary
interest therein arising from his general and limited partnership
interests in Venrock Associates. Except for Mr. Crisp, who
beneficially owned 3.2% of the common stock of Thermo Fibergen
Inc. outstanding as of March 1, 1997, no director or executive
officer beneficially owned more than 1% of the Thermo Fibergen
Inc. common stock outstanding as of March 1, 1997; all directors
and current executive officers as a group beneficially owned 4.0%
of the Thermo Fibergen Inc. common stock outstanding as of such
date. In addition, Mr. Crisp, Mr. Jungers, Ms. Olayan, Mr.
Rainville and directors and current executive officers as a group
beneficially owned 4,000, 1,500, 1,000, 1,500 and 8,000
redemption rights, respectively, issued by Thermo Fibergen Inc.
Each of these rights, issued in a public offering in September
1996, permits the holder to sell one share of the Thermo Fibergen
common stock back to Thermo Fibergen Inc. at certain points in
the future at a price of $12.25 per share.
(6) Shares of the common stock of Thermo Power Corporation
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Wellington and all
directors and current executive officers as a group include
3,000, 6,600, 3,000, 40,000, 40,000, 3,000, 3,000, 3,000, 7,200,
3,000, 3,000 and 123,800 shares, respectively, that such person
or members of the group have the right to acquire within 60 days
of March 1, 1997, through the exercise of stock options. Shares
beneficially owned by Mr. Crisp, Mr. Noble and all directors and
current executive officers as a group include 9,468, 5,847 and
15,315 shares, respectively, allocated to their respective
accounts maintained pursuant to Thermo Power Corporation's
deferred compensation plan for directors. Shares beneficially
owned by Dr. G. Hatsopoulos include 114 shares held by Dr. G.
Hatsopoulos' spouse. Shares beneficially owned by Mr. J.
Hatsopoulos include 2,600 shares held by him as custodian for two
minor children. No director or executive officer beneficially
PAGE
<PAGE>
owned more than 1% of the Thermo Power Corporation common stock
outstanding as of March 1, 1997; all directors and current
executive officers as a group beneficially owned 1.7% of the
Thermo Power Corporation common stock outstanding as of such
date.
(7) Shares of the common stock of ThermoLyte Corporation
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 1,000, 1,500, 15,000, 15,000, 15,000,
1,000, 1,000, 1,000, 1,500, 1,000, 6,000, 6,000, 1,000, 6,000 and
77,000 shares, respectively, that such person or members of the
group have the right to acquire within 60 days of March 1, 1997,
through the exercise of stock options. Shares beneficially owned
by Mr. Crisp include 100,000 shares held in the aggregate by
entities affiliated with Venrock Associates. Mr. Crisp is both a
general and limited partner of Venrock Associates and therefore,
may be deemed to beneficially own the shares held by such
entities. Mr. Crisp disclaims beneficial ownership of such
shares, except to the extent of his pecuniary interest therein
arising from his general and limited partnership interests in
Venrock Associates. Shares beneficially owned by Ms. Olayan do
not include 25,000 shares owned by Crescent International
Holdings Limited, a member of the Olayan Group. Crescent
International Holdings Limited is indirectly controlled by
Suliman S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims
beneficial ownership of the shares owned by Crescent
International Holdings Limited. Except for Mr. Crisp, who
beneficially owned 1.2% of the common stock of ThermoLyte
Corporation outstanding as of March 1, 1997, no director or
executive officer beneficially owned more than 1% of the common
stock of ThermoLyte Corporation outstanding as of such date; all
directors and current executive officers as a group beneficially
owned 2.1% of the ThermoLyte Corporation common stock outstanding
as of March 1, 1997.
(8) Shares of the common stock of Thermo TerraTech Inc.
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington and all directors and current executive officers as a
group include 1,500, 1,500, 1,500, 40,000, 40,000, 1,500, 1,500,
1,500, 8,200, 1,500, 60,000, 35,000, 1,500 and 202,200 shares,
respectively, that such person or members of the group have the
right to acquire within 60 days of March 1, 1997, through the
exercise of stock options. Shares beneficially owned by Dr. G.
Hatsopoulos, Mr. J. Hatsopoulos, Mr. Smith and all directors and
current executive officers as a group include 258, 264, 265 and
1,314 full shares, respectively, allocated to their respective
accounts maintained pursuant to the Corporation's ESOP. Shares
beneficially owned by Mr. Noble and all directors and current
executive officers as a group include 18,087 shares allocated to
PAGE
<PAGE>
Mr. Noble's account maintained pursuant to Thermo TerraTech
Inc.'s deferred compensation plan for directors. Shares
beneficially owned by Mr. J. Hatsopoulos and all directors and
current executive officers as a group include 12,500 shares that
Mr. J. Hatsopoulos has the right to acquire within 60 days of
March 1, 1997, through the exercise of stock purchase warrants
acquired in connection with private placements of securities by
Thermo TerraTech Inc. and one or more of that corporation's
subsidiaries on terms identical to terms granted to outside
investors. Shares beneficially owned by Dr. G. Hatsopoulos
include 93 shares held by his spouse and 3 shares allocated to
his spouse's account maintained pursuant to the Corporation's
ESOP. Shares beneficially owned by Mr. J. Hatsopoulos include
2,000 shares held by him as custodian for two minor children. No
director or executive officer beneficially owned more than 1% of
the Thermo TerraTech Inc. common stock outstanding as of March 1,
1997; all directors and current executive officers as a group
beneficially owned 1.7% of the Thermo TerraTech Inc. common stock
as of such date.
(9) Shares of the common stock of Thermo Remediation Inc.
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington and all directors and current executive officers as a
group include 4,500, 4,500, 27,600, 7,500, 22,500, 4,500, 4,500,
24,450, 6,000, 4,500, 22,500, 2,400, 4,500 and 157,350 shares,
respectively, that such person or members of the group have the
right to acquire within 60 days of March 1, 1997, through the
exercise of stock options. Shares beneficially owned by Dr.
Morris and all directors and current executive officers as a
group include 2,301 shares allocated to Dr. Morris' account
maintained pursuant to Thermo Remediation Inc.'s deferred
compensation plan for directors. Shares beneficially owned by Mr.
Jungers include 450 shares held by his spouse. No director or
executive officer beneficially owned more than 1% of the Thermo
Remediation Inc. common stock outstanding as of March 1, 1997;
all directors and current executive officers as a group
beneficially owned 1.7% of the Thermo Remediation Inc. common
stock outstanding as of such date.
(10) Shares of the common stock of Thermedics Inc. beneficially
owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G.
Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe, Dr.
Morris, Mr. Noble, Ms. Olayan, Mr. Smith, Mr. Wellington, Mr.
Wood and all directors and current executive officers as a group
include 4,500, 9,050, 4,500, 50,000, 50,000, 4,500, 4,500, 4,500,
4,500, 4,500, 82,500, 4,500, 125,500 and 372,050 shares,
respectively, that such person or members of the group have the
right to acquire within 60 days of March 1, 1997, through the
exercise of stock options. Shares beneficially owned by Dr. G.
Hatsopoulos, Mr. J. Hatsopoulos, Mr. Smith and all directors and
current executive officers as a group include 1,500, 1,602,
1,445, and 7,523 full shares, respectively, allocated to their
PAGE
<PAGE>
respective accounts maintained pursuant to the Corporation's
ESOP. Shares beneficially owned by Mr. Crisp and all directors
and current executive officers as a group include 6,841 shares
allocated to Mr. Crisp's account maintained pursuant to
Thermedic's Inc.'s deferred compensation plan for directors.
Shares beneficially owned by Dr. G. Hatsopoulos include 562
shares held by his spouse and 92 shares allocated to the account
of his spouse maintained pursuant to the Corporation's ESOP.
Shares beneficially owned by Mr. Jungers include 1,500 shares
held by Mr. Jungers' spouse. Shares beneficially owned by Mr.
Wood include 2,600 shares held by him as custodian for two
children. No director or executive officer beneficially owned
more than 1% of the common stock of Thermedics Inc. outstanding
as of March 1, 1997; all directors and current executive officers
as a group beneficially owned 1.4% of the Thermedics Inc. common
stock outstanding as of such date.
(11) Shares of the common stock of Thermedics Detection Inc.
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 1,000, 1,500, 1,000, 1,000, 1,000,
1,000, 1,000, 1,000, 1,000, 23,333 and 32,833 shares,
respectively, that such person or members of the group have the
right to acquire within 60 days of March 1, 1997, through the
exercise of stock options. Shares beneficially owned by Mr.
Jungers include 1,550 shares held by his spouse. Shares
beneficially owned by Mr. McCabe include 9,000 shares held in a
trust of which he and members of his family are the trustees.
Shares beneficially owned by Ms. Olayan do not include 50,000
shares owned by Crescent International Holdings Limited, a member
of the Olayan Group. Crescent International Holdings Limited is
indirectly controlled by Mr. Suliman S. Olayan, Ms. Olayan's
father. Ms. Olayan disclaims beneficial ownership of the shares
owned by Crescent International Holdings Limited. The directors
and current executive officers did not individually or as a group
beneficially own more than 1% of the Thermedics Detection Inc.
common stock outstanding as of March 1, 1997.
(12) The number of shares of the common stock of Thermo
Cardiosystems Inc. reported in the table reflects a three-for-two
split of such stock distributed in May 1996 in the form of a 50%
stock dividend. Shares of the common stock of Thermo
Cardiosystems Inc. beneficially owned by Mr. Crisp, Dr.
Gyftopoulos, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms.
Olayan, Mr. Smith, Mr. Wellington, Mr. Wood and all directors and
current executive officers as a group include 24,750, 14,500,
11,250, 11,250, 11,250, 11,250, 11,250, 30,000, 11,250, 33,450
and 170,200 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of March 1,
1997, through the exercise of stock options. Shares beneficially
owned by Mr. Wood include 1,122 shares held by him as custodian
for two children. The directors and current executive officers
did not individually or as a group beneficially own more than 1%
PAGE
<PAGE>
of the Thermo Cardiosystems Inc. common stock outstanding as of
March 1, 1997.
(13) Shares of the common stock of Thermo Sentron Inc.
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 1,000, 2,500, 1,000, 15,000, 15,000,
1,000, 1,000, 1,000, 15,000, 1,000, 7,000, 7,000, 1,000, 30,000
and 105,500 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of March 1,
1997, through the exercise of stock options. Shares beneficially
owned by Mr. Noble and all directors and current executive
officers as a group include 485 shares allocated to Mr. Noble's
account maintained pursuant to Thermo Sentron Inc.'s deferred
compensation plan for directors. No director or executive
officer beneficially owned more than 1% of the Thermo Sentron
Inc. common stock outstanding as of March 1, 1997; all directors
and current executive officers as a group beneficially owned 1.3%
of the Thermo Sentron Inc. common stock outstanding as of such
date.
(14) The number of shares of the common stock of Thermo Voltek
Corp. reported in the table reflects a three-for-two split of
such stock distributed in August 1996 in the form of a 50% stock
dividend. Shares of the common stock of Thermo Voltek Corp.
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr.
Noble, Ms. Olayan, Mr. Wellington, Mr. Wood and all directors and
current executive officers as a group include 1,500, 2,250,
3,750, 7,498, 1,500, 1,500, 1,500, 1,500, 1,500, 1,500, 78,450
and 102,448 shares, respectively, that such persons or members of
the group have the right to acquire within 60 days of March 1,
1997, through the exercise of stock options. Shares beneficially
owned by Ms. Olayan do not include 10,000 shares owned by
Crescent Growth Fund, Ltd., a member of the Olayan Group.
Crescent Growth Fund, Ltd. is indirectly controlled by Mr.
Suliman S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims
beneficial ownership of the shares owned by Crescent Growth Fund,
Ltd. No director or executive officer beneficially owned more
than 1% of the Thermo Voltek Corp. common stock outstanding as of
March 1, 1997; all directors and current executive officers
beneficially owned 1.3% of the Thermo Voltek Corp. common stock
outstanding as of such date.
(15) Shares of the common stock of ThermoTrex Corporation
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 4,500, 27,800, 4,500, 36,600, 21,000,
4,500, 4,500, 4,500, 4,500, 4,500, 2,700, 2,700, 4,500, 900 and
139,900 shares, respectively, that such person or members of the
PAGE
<PAGE>
group have the right to acquire within 60 days of March 1, 1997,
through the exercise of stock options. Shares beneficially owned
by Mr. Crisp and all directors and current executive officers as
a group include 1,921 shares allocated to Mr. Crisp's account
maintained pursuant to ThermoTrex Corporation's deferred
compensation plan for directors. Shares beneficially owned by Dr.
G. Hatsopoulos include 160 shares held by his spouse. The
directors and current executive officers did not individually or
as a group beneficially own more than 1% of the ThermoTrex
Corporation common stock outstanding as of March 1, 1997.
(16) Shares of the common stock of ThermoLase Corporation
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 2,000, 22,508, 61,400, 28,800,
53,800, 2,000, 2,000, 2,000, 2,000, 2,000, 10,000, 10,000, 2,000,
10,000 and 287,508 shares, respectively, that such person or
members of the group have the right to acquire within 60 days of
March 1, 1997, through the exercise of stock options. Shares
beneficially owned by Dr. G. Hatsopoulos include 32 shares held
by his spouse. The directors and current executive officers did
not individually or as a group beneficially own more than 1% of
the ThermoLase Corporation common stock outstanding as of March
1, 1997.
(17) Shares of the common stock of Trex Medical Corporation
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 1,000, 2,500, 40,000, 40,000, 40,000,
1,000, 1,000, 1,000, 1,000, 40,000, 20,000, 20,000, 1,000, 20,000
and 238,500 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of March 1,
1997, through the exercise of stock options. Shares beneficially
owned by Ms. Olayan and all directors and current executive
officers as a group include 199 shares allocated to Ms. Olayan's
account maintained pursuant to Trex Medical Corporation's
deferred compensation plan for directors. Shares beneficially
owned by Dr. G. Hatsopoulos include 16 shares held by his spouse.
Shares beneficially owned by Ms. Olayan do not include 15,000 and
227,000 shares owned by Crescent Growth Fund, Ltd. and Crescent
International Holdings Limited, respectively. Crescent Growth
Fund, Ltd. and Crescent International Holdings Limited are
indirectly controlled by Mr. Suliman S. Olayan, Ms. Olayan's
father. Ms. Olayan disclaims beneficial ownership of these
shares. The directors and current executive officers did not
individually or as a group beneficially own more than 1% of the
Trex Medical Corporation common stock outstanding as of March 1,
1997.
(18) Shares of the common stock of Thermo Instrument Systems Inc.
PAGE
<PAGE>
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Smith, Mr. Wellington and
all directors and current executive officers as a group include
1,875, 1,875, 14,465, 93,750, 65,625, 13,809, 10,995, 1,875,
6,093, 1,875, 234,375, 1,875 and 468,174 shares, respectively,
that such person or members of the group have the right to
acquire within 60 days of March 1, 1997, through the exercise of
stock options. Shares beneficially owned by Dr. G. Hatsopoulos,
Mr. J. Hatsopoulos, Mr. Smith and all directors and current
executive officers as a group include 479, 529, 530 and 2,544
full shares, respectively, allocated to accounts maintained
pursuant to the Corporation's ESOP. Shares beneficially owned by
Mr. Jungers, Mr. McCabe and all directors and current executive
officers as a group include 12,200, 7,126 and 19,326 shares,
respectively, allocated to accounts maintained pursuant to Thermo
Instrument Systems Inc.'s deferred compensation plan for
directors. Shares beneficially owned by Dr. G. Hatsopoulos
include 21,368 shares held by his spouse and 50 shares allocated
to his spouse's account maintained pursuant to the Corporation's
ESOP. Shares beneficially owned by Mr. Jungers include 543
shares held by his spouse. Shares beneficially owned by Mr.
Wood include 15,608 shares held by him as custodian for two
children. The directors and current executive officers did not
individually or as a group beneficially own more than 1% of the
Thermo Instrument Systems Inc. common stock outstanding as of
March 1, 1997.
(19) Shares of common stock of Thermo BioAnalysis Corporation
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 1,000, 1,000, 15,000, 15,000, 15,000,
1,500, 1,500, 1,000, 1,000, 1,000, 6,000, 20,000, 1,000, 6,000
and 91,000 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of March 1,
1997, through the exercise of stock options. No director or
executive officer beneficially owned more than 1% of the Thermo
BioAnalysis Corporation common stock outstanding as of March 1,
1997; all directors and current executive officers as a group
beneficially owned 1.4% of the Thermo BioAnalysis Corporation
common stock outstanding as of such date.
(20) Shares of the common stock of Thermo Optek Corporation
beneficially owned by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr.
McCabe, Mr. Rainville, Mr. Smith, Mr. Wood and all directors and
current executive officers as a group include 90,000, 90,000
45,000, 15,000, 90,000, 15,000 and 357,000 shares, respectively,
that such person or members of the group have the right to
acquire within 60 days of March 1, 1997, through the exercise of
stock options. Shares beneficially owned by Mr. McCabe include
6,734 shares issuable upon conversion of $100,000 in principal
amount of the 5% convertible subordinated debenture due 2000
PAGE
<PAGE>
issued by Thermo Optek Corporation. Shares beneficially owned
by Ms. Olayan do not include 20,000 shares owned by Crescent
Growth Fund, Ltd., which is indirectly controlled by Mr. Suliman
S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims beneficial
ownership of the shares owned by Crescent Growth Fund, Ltd. The
directors and current executive officers did not individually or
as a group beneficially own more than 1% of the Thermo Optek
Corporation common stock outstanding as of March 1, 1997.
(21) Shares of the common stock of ThermoQuest Corporation
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 1,000, 1,000, 1,000, 90,000, 90,000,
45,000, 1,000, 1,000, 1,000, 1,000, 15,000, 90,000, 1,000, 15,000
and 365,000 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of March 1,
1997, through the exercise of stock options. Shares beneficially
owned by Mr. Jungers and all directors and current executive
officers as a group include 565 full shares allocated to Mr.
Jungers' account maintained pursuant to ThermoQuest Corporation's
deferred compensation plan for directors. The directors and
current executive officers did not individually or as a group
beneficially own more than 1% of the ThermoQuest Corporation
common stock outstanding as of March 1, 1997.
(22) Shares of the common stock of ThermoSpectra Corporation
beneficially owned by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos,
Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Jungers, Mr. McCabe,
Dr. Morris, Mr. Noble, Ms. Olayan, Mr. Rainville, Mr. Smith, Mr.
Wellington, Mr. Wood and all directors and current executive
officers as a group include 1,000, 1,000, 20,000, 20,000, 20,000,
1,500, 1,500, 1,000, 1,000, 1,000, 10,000, 20,000, 1,000, 3,000
and 109,500 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of March 1,
1997, through the exercise of stock options. Shares beneficially
owned by Mr. Crisp include 160,000 shares held in the aggregate
by entities affiliated with Venrock Associates. Mr. Crisp is
both a general and limited partner of Venrock Associates and
therefore, may be deemed to beneficially own the shares held by
such entities. Mr. Crisp disclaims beneficial ownership of such
shares, except to the extent of his pecuniary interest therein
arising from his general and limited partnership interests in
Venrock Associates. Except for Mr. Crisp, who beneficially owned
1.3% of the common stock of ThermoSpectra Corporation outstanding
as of March 1, 1997, no director or executive officer
beneficially owned more than 1% of the common stock of
ThermoSpectra Corporation outstanding as of March 1, 1997; all
directors and current executive officers as a group beneficially
owned 2.3% of the ThermoSpectra Corporation common stock
outstanding as of such date.
(23) Shares of the common stock of Metrika Systems Corporation
PAGE
<PAGE>
beneficially owned by Dr. Albertine include 6,667 shares held by
Albertine Enterprises, Inc. by it as custodian for two of Dr.
Albertine's partners. Dr. Albertine is the chairman of the board
and chief executive officer of Albertine Enterprises, Inc. and
disclaims beneficial ownership of the shares held by it. Shares
beneficially owned by Mr. McCabe include 10,000 shares held in a
trust of which he and members of his family are the trustees.
The directors and current executive officers did not individually
or as a group beneficially own more than 1% of the Metrika
Systems Corporation common stock outstanding as of March 1, 1997.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's directors and executive officers, and
beneficial owners of more than 10% of the Common Stock, to file
with the Securities and Exchange Commission initial reports of
ownership and periodic reports of changes in ownership of the
Corporation's securities. Based upon a review of such filings,
all Section 16(a) filing requirements applicable to such persons
were complied with during 1996, except in the following
instances. A Form 4 for the month of January 1996 filed on
behalf of Mr. John N. Hatsopoulos, then the chief financial
officer and an executive vice president of the Corporation, was
amended in March 1996 to include three transactions consisting of
the exercise of employee stock options. Mr. Robert C. Howard, an
executive vice president of the Corporation in 1996, filed one
Form 4 late reporting one transaction.
EXECUTIVE COMPENSATION
NOTE: All share amounts reported below have, in all cases, been
adjusted as applicable to reflect three-for-two stock splits
distributed in June 1996, May 1996, October 1996, June 1996 and
August 1996 with respect to the Common Stock and the common stock
of Thermo Cardiosystems Inc., Thermo Ecotek Inc., Thermo Fibertek
Inc. and Thermo Voltek Corp., respectively, each in the form of a
50% stock dividend.
Summary Compensation Table
The following table summarizes compensation for services to
the Corporation in all capacities awarded to, earned by or paid
to the Corporation's chief executive officer and its four other
most highly compensated executive officers for the last three
fiscal years.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensation
Securities
Underlying
Annual Options (No. of
Name and Fiscal Compensation Shares All Other
Principal Position Year Salary Bonus and Company) (1) Compen-
(2) sation
(3)
<S> <C> <C> <C> <C> <C> <C>
George N. 1996 $520,000 $575,000 100,000 (TMO) $6,750
Hatsopoulos
President and 15,000 (TBA)
Chief Executive
Officer (4)
20,000 (TFG)
15,000 (TLT)
90,000 (TOC)
90,000 (TMQ)
15,000 (TSR)
40,000 (TXM)
1995 $485,000 $550,000 -- $6,750
1994 $450,000 $500,000 20,000 (THS) $6,750
John N. Hatsopoulos 1996 $325,000 $550,000 107,200 (TMO) $6,750
Executive Vice 15,000 (TBA)
President 20,000 (TFG)
and Chief
Financial Officer 15,000 (TLT)
(4)
90,000 (TOC)
90,000 (TMQ)
15,000 (TSR)
40,000 (TXM)
1995 $300,000 $500,000 7,800 (TMO) $6,750
25,000 (TLZ)
1994 $280,000 $450,000 144,900 (TMO) $6,750
20,000 (THS)
Arvin H. Smith 1996 $270,000 $260,000 9,000 (TMO) $6,750
Executive Vice 20,000 (TBA)
President
10,000 (TFG)
90,000 (TOC)
90,000 (TMQ)
7,000 (TSR)
20,000 (TXM)
1995 $262,000 $256,200 9,000 (TMO) $6,750
10,000 (TLZ)
6,000 (TLT)
1994 $255,000 $280,500 13,500 (TMO) $6,750
20,000 (THS)
William R. 1996 $205,000 $191,000 6,450 (TMO) $17,558(5)
Rainville
Senior Vice 40,000 (TFG)
President
15,000 (TOC)
15,000 (TMQ)
7,000 (TSR)
20,000 (TXM)
1995 $195,000 $220,000 6,150 (TMO) $15,870
6,000 (TBA)
10,000 (TLZ)
6,000 (TLT)
1994 $182,000 $173,000 96,750 (TMO) $16,269
10,000 (THS)
John W. Wood Jr. 1996 $195,000 $172,000 40,500 (TMO) $6,750
(6)
Senior Vice 5,400 (TMD)
President
5,000 (TBA)
10,000 (TFG)
5,000 (TLT)
15,000 (TOC)
15,000 (TMQ)
30,000 (TSR)
2,100 (TVL)
20,000 (TXM)
1995 $180,000 $160,000 40,350 (TMO) $6,750
4,900 (TMD)
1,000 (TBA)
3,450 (TCA)
1,350 (TVL)
10,000 (TLZ)
1,000 (TLT)
</TABLE>
(1) In addition to grants of options to purchase Common Stock of
the Corporation (designated in the table as TMO), the named
executive officers have been granted options to purchase common
stock of subsidiaries of the Corporation, either as compensation
for their services to the Corporation or to its subsidiaries.
PAGE
<PAGE>
Options were granted during the last three fiscal years to the
chief executive officer and the other named executive officers in
their capacities as executive officers of the Corporation or
directors or executive officers of the following subsidiaries of
the Corporation: Thermedics Inc. (designated in the table as
TMD), Thermo BioAnalysis Corporation (designated in the table as
TBA), Thermo Cardiosystems Inc. (designated in the table as TCA),
Thermo Fibergen Inc. (designated in the table as TFG), ThermoLase
Corporation (designated in the table as TLZ), ThermoLyte
Corporation (designated in the table as TLT), Thermo Optek
Corporation (designated in the table as TOC), ThermoQuest
Corporation (designated in the table as TMQ), Thermo Sentron Inc.
(designated in the table as TSR), ThermoSpectra Corporation
(designated in the table as THS), Thermo Voltek Corp. (designated
in the table as TVL) and Trex Medical Corporation (designated in
the table as TXM).
(2) No awards of restricted stock of the Corporation were made
to the chief executive officer or other named executive officers
during the last three fiscal years. As of December 28, 1996, the
amount and value of each executive officer's restricted stock
holdings were as follows: Dr. G. Hatsopoulos - 20,250 shares
valued at $764,438; Mr. Smith - 10,125 shares valued at $382,219.
(3) For all executive officers except Mr. Rainville, this amount
represents matching contributions made on behalf of the executive
officer by the Corporation pursuant to the Corporation's 401(k)
plan. As to Mr. Rainville, this amount represents employer
contributions to his account under the profit sharing plan of
Thermo Web Systems Inc., a subsidiary of Thermo Fibertek Inc.
(4) Mr. John N. Hatsopoulos was appointed the president of the
Corporation effective as of January 1, 1997, in addition to his
pre-existing position as the Corporation's chief financial
officer. For the three years prior to that date, he also served
as an executive vice president of the Corporation. Prior to
1997, Dr. George N. Hatsopoulos held the position of president of
the Corporation. Dr. George N. Hatsopoulos continues to serve as
the chairman of the board and as chief executive officer of the
Corporation, positions he has held for more than three years.
(5) In addition to the matching contribution referred to in
footnote (3), such amount includes $1,313, which represents the
amount of compensation attributable to an interest-free loan
provided to Mr. Rainville pursuant to the stock holding
assistance plan of Thermo Fibertek Inc., a subsidiary of the
Corporation. See "Relationship with Affiliates - Stock Holding
Assistance Plans."
(6) Mr. Wood did not meet the definition of "highly compensated"
within the meaning of the Securities and Exchange Commission's
executive compensation disclosure rules in fiscal 1994.
Stock Options Granted During Fiscal 1996
PAGE
<PAGE>
The following table sets forth information concerning
individual grants of stock options made during fiscal 1996 to the
Corporation's chief executive officer and the other named
executive officers. It has not been the Corporation's policy in
the past to grant stock appreciation rights, and no such rights
were granted during fiscal 1996.
<TABLE>
<CAPTION>
Option Grants in Fiscal 1996
Potential Realizable
Percent Value at Assumed
of
Total Annual Rates of
Options Stock
Number of Granted Exercise Price Appreciation
Securities to for
Underlying Employees Price Expira- Option Term (2)
Options in Per tion
Name Granted (1) Fiscal Share Date
Year 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Dr. George N. 50,000(TMO) 3.3% $39.95 09/27/08 $1,589,500 $4,271,500
Hatsopoulos
50,000(TMO) 3.3% $36.25 12/27/08 $1,442,500 $3,876,000
15,000(TBA) 1.8% $10.00 01/31/08 $119,400 $320,700
20,000(TFG) 3.5% $10.00 08/14/08 $159,200 $427,600
15,000(TLT) 4.2% $10.00 02/09/08 $119,400 $320,700
90,000(TOC) 2.9% $12.00 04/11/08 $859,500 $2,309,400
90,000(TMQ) 3.2% $13.00 01/10/08 $931,500 $2,502,000
15,000(TSR) 2.9% $14.00 03/01/08 $167,100 $449,100
40,000(TXM) 1.9% $11.00 03/26/08 $350,000 $940,800
John N. 7,200(TMO) 0.5% $42.79 05/22/99 $48,528 $101,952
Hatsopoulos
50,000(TMO) 3.3% $39.95 09/27/08 $1,589,500 $4,271,500
50,000(TMO) 3.3% $36.25 12/27/08 $1,442,500 $3,876,000
1
PAGE
<PAGE>
15,000(TBA) 1.8% $10.00 01/31/08 $119,400 $320,700
20,000(TFG) 3.5% $10.00 08/14/08 $159,200 $427,600
15,000(TLT) 4.2% $10.00 02/09/08 $119,400 $320,700
90,000(TOC) 2.9% $12.00 04/11/08 $859,500 $2,309,400
90,000(TMQ) 3.2% $13.00 01/10/08 $931,500 $2,502,000
15,000(TSR) 2.9% $14.00 03/01/08 $167,100 $449,100
40,000(TXM) 1.9% $11.00 03/26/08 $350,000 $940,800
Arvin H. Smith 9,000(TMO) 0.6% $42.79 05/22/99 $60,660 $127,440
20,000(TBA) 2.4% $10.00 01/31/08 $159,200 $427,600
10,000(TFG) 1.8% $10.00 09/12/08 $79,600 $213,800
90,000(TOC) 2.9% $12.00 04/11/08 $859,500 $2,309,400
90,000(TMQ) 3.2% $13.00 01/10/08 $931,500 $2,502,000
7,000(TSR) 1.4% $14.00 03/11/08 $77,980 $209,580
20,000(TXM) 1.0% $11.00 03/11/08 $175,000 $470,400
William A. 6,450(TMO) 0.4% $42.79 05/22/99 $43,473 $91,332
Rainville
20,000(TFG) 3.5% $10.00 08/14/08 $159,200 $427,600
20,000(TFG) 3.5% $10.00 08/14/08 $159,200 $427,600
15,000(TOC) 0.5% $12.00 04/09/08 $143,250 $384,900
15,000(TMQ) 0.5% $13.00 03/11/08 $155,250 $417,000
7,000(TSR) 1.4% $14.00 03/11/08 $77,980 $209,580
20,000(TXM) 1.0% $11.00 03/11/08 $175,000 $470,400
John W. Wood 37,500(TMO) 2.4% $40.63 04/03/08 $1,212,750 $3,258,000
Jr.
3,000(TMO) 0.2% $42.79 05/22/99 $20,220 $42,480
5,400(TMD) 1.6% $28.13 02/09/99 $23,922 $50,274
5,000(TBA) 0.6% $10.00 03/11/08 $39,800 $106,900
10,000(TFG) 1.8% $10.00 09/12/08 $79,600 $213,800
5,000(TLT) 1.4% $10.00 03/11/08 $39,800 $106,900
2
PAGE
<PAGE>
15,000(TOC) 0.5% $12.00 04/09/08 $143,250 $384,900
15,000(TMQ) 0.5% $13.00 03/11/08 $115,250 $417,000
30,000(TSR) 5.8% $14.00 03/01/08 $334,200 $898,200
2,100(TVL) 1.5% $12.78 03/07/99 $4,221 $8,883
20,000(TXM) 1.0% $11.00 03/11/08 $175,000 $470,400
</TABLE>
(1) In addition to grants of options to purchase Common Stock of
the Corporation (designated in the table as TMO), the named
executive officers have been granted options to purchase common
stock of Thermedics Inc. (designated in the table as TMD), Thermo
BioAnalysis Corporation (designated in the table as TBA), Thermo
Fibergen Inc.. (designated in the table as TFG), ThermoLyte
Corporation (designated in the table as TLT), Thermo Optek
Corporation (designated in the table as TOC), ThermoQuest
Corporation (designated in the table as TMQ), Thermo Sentron Inc.
(designated in the table as TSR), Thermo Voltek Corp. (designated
in the table as TVL) and Trex Medical Corporation (designated in
the table as TXM), as part of the Corporation's stock option
program. All of the options reported are immediately exercisable
as of the end of the fiscal year, except options to purchase the
common stock of ThermoLyte Corporation, which are not exercisable
until the earlier of (i) 90 days after the effective date of the
registration of that company's common stock under Section 12 of
the Securities Exchange Act of 1934 (the "Exchange Act") and (ii)
nine years after the grant date. In all cases, the shares
acquired upon exercise are subject to repurchase by the granting
corporation at the exercise price if the optionee ceases to be
employed by the granting corporation or another Thermo Electron
company. The granting corporation may exercise its repurchase
rights within six months after the termination of the optionee's
employment. For publicly traded companies, the repurchase rights
lapse ratably over a five- to ten-year period, depending on the
option term, which may vary from seven to twelve years, provided
that the optionee continues to be employed by the granting
corporation or another Thermo Electron company. For companies
whose shares are not publicly traded, the repurchase rights
generally lapse in their entirety on the ninth anniversary of the
grant date. Certain options granted as a part of Thermo
Electron's stock option program have three-year terms, and the
repurchase rights lapse in their entirety on the second
anniversary of the grant date. The granting corporation may
permit the holders of such options to exercise options and to
satisfy tax withholding obligations by surrendering shares equal
in fair market value to the exercise price or withholding
obligation.
(2) The amounts shown on this table represent hypothetical gains
that could be achieved for the respective options if exercised at
the end of the option term. These gains are based on assumed
PAGE
<PAGE>
rates of stock appreciation of 5% and 10% compounded annually
from the date the respective options were granted to their
expiration date. The gains shown are net of the option exercise
price, but do not include deductions for taxes or other expenses
associated with the exercise. Actual gains, if any, on stock
option exercises will depend on the future performance of the
common stock of the granting corporation, the optionee's
continued employment through the option period and the date on
which the options are exercised.
Stock Options Exercised During Fiscal 1996 and Fiscal Year-End
Option Values
The following table reports certain information regarding
stock option exercises during fiscal 1996 and outstanding stock
options held at the end of fiscal 1996 by the Corporation's chief
executive officer and the other named executive officers. No
stock appreciation rights were exercised or were outstanding
during fiscal 1996.
<TABLE>
<CAPTION>
Aggregated Option Exercises In Fiscal 1996 And
Fiscal 1996 Year-End Option Values
Number of
Unexercised
Shares Options at Fiscal Value of
Acquired Year-End Unexercised
on Value (Exercisable/ In-the-Money
Name Company Exercise Realized Unexercisable) Options
(1) (2)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dr. George N. (TMO) 243,000 $7,914,4301,499,500 /0 $30,114,958/--
Hatsopoulos
(TMD) -- -- 50,000 /0 $117,250/--
(TBA) -- -- 15,000 /0 $46,875/--
(TCK) 39,000 $480,987 15,000 /0 $153,750/--
(TFG) -- -- 20,000 /0 $15,000/--
(TFT) 18,000 $257,994 157,910 /0 $805,710/--
(THI) -- -- 93,750 /0 $1,518,281/--
(TLZ) 14,400 $446,400 28,800 /0 $399,600/--
(TLT) -- -- 0 /15,000 --/$0 (5)
(TOC) -- -- 90,000 /0 $0/--
(THP) -- -- 40,000 /0 $0/--
(TMQ) -- -- 90,000 /0 $0/--
(THN) -- -- 7,500 /0 $13,650/--
(TSR) -- -- 15,000 /0 $0/--
1
PAGE
<PAGE>
(THS) -- -- 20,000 /0 $37,500/--
(TTT) -- -- 40,000 /0 $18,800/--
(TKN) -- -- 36,600 /0 $554,805/--
(TXM) -- -- 40,000 /0 $65,000/--
John N. (TMO) 124,335 $2,887,545 429,685 /0 (3) $6,252,399/--
Hatsopoulos
(TMD) -- -- 50,000 /0 $117,250/--
(TBA) -- -- 15,000 /0 $46,875/--
(TCK) 40,743 $452,561 13,257 /0 $135,885/--
(TFG) -- -- 20,000 /0 $15,000/--
(TFT) 91,800 $1,119,150 97,200 /0 $469,800/--
(THI) 18,750 $243,031 75,000 /0 $1,214,625/--
(TLZ) 14,400 $342,000 53,800 /0 $399,600/--
(TLT) -- -- 0 /15,000 --/$0 (5)
(TOC) -- -- 90,000 /0 $0/--
(THP) -- -- 40,000 /0 $0/--
(TMQ) -- -- 90,000 /0 $0/--
(THN) -- -- 22,500 /0 $40,950/--
(TSR) -- -- 15,000 /0 $0/--
(THS) -- -- 20,000 /0 $37,500/--
(TTT) -- -- 40,000 /0 $18,800/--
(TKN) 3,000 $92,775 21,000 /0 $276,675/--
(TVL) -- -- 7,498 /0 $57,772/--
(TXM) -- -- 40,000 /0 $65,000/--
Arvin H. Smith (TMO) 60,750 $1,931,728 222,411 /0 $4,885,161/--
(TMD) -- -- 82,500 /0 $785,663/--
(TBA) -- -- 20,000 /0 $62,500/--
(TCA) -- -- 30,000 /0 $657,600/--
2
PAGE
<PAGE>
(TCK) -- -- 6,000 /0 $70,500/--
(TFG) -- -- 10,000 /0 $7,500/--
(TFT) -- -- 90,000 /0 $540,000/--
(THI) -- -- 234,375 /0 $3,795,703/--
(TLZ) -- -- 10,000 /0 $0/--
(TLT) -- -- 0 /6,000 --/$0 (5)
(TOC) -- -- 90,000 /0 $0/--
(TMQ) -- -- 90,000 /0 $0/--
(THN) -- -- 2,400 /0 $4,368/--
(TSR) -- -- 7,000 /0 $0/--
(THS) -- -- 20,000 /0 $37,500/--
(TTT) -- -- 35,000 /0 $56,000/--
(TKN) -- -- 2,700 /0 $65,273/--
(TXM) -- -- 20,000 /0 $32,500/--
William A (TMO) 5,062 $161,594 205,648 /0 (3) $4,091,585/--
Rainville
(TBA) -- -- 6,000 /0 $18,750/--
(TCK) -- -- 6,000 /0 $70,500/--
(TFG) -- -- 40,000 /0 (4) $30,000/--
(TFT) -- -- 495,000 /0 $2,686,500/--
(TLZ) -- -- 10,000 /0 $0/--
(TLT) -- -- 0 /6,000 --/$0 (5)
(TOC) -- -- 15,000 /0 $0/--
(TMQ) -- -- 15,000 /0 $0/--
(THN) -- -- 22,500 /0 $40,950/--
(TSR) -- -- 7,000 /0 $0/--
(THS) -- -- 10,000 /0 $18,750/--
(TTT) -- -- 60,000 /0 $17,700/--
3
PAGE
<PAGE>
(TKN) -- -- 2,700 /0 $65,273/--
(TXM) -- -- 20,000 /0 $32,500/--
John W. Wood (TMO) 13,836 $363,383 227,658 /0 (3) $3,088,021/--
Jr.
(TMD) -- -- 125,500 /0 $580,037/--
(TDX) -- -- 0 /23,333 --/$0 (5)
(TBA) -- -- 6,000 /0 $18,750/--
(TCA) 25,775 $1,314,963 33,450 /0 $766,358/--
(TCK) 4,500 $51,188 -- /-- --/--
(TFG) -- -- 10,000 /0 $7,500/--
(TFT) -- -- 9,000 /0 $54,000/--
(TLZ) -- -- 10,000 /0 $0/--
(TLT) -- -- 0 /6,000 --/$0 (5)
(TOC) -- -- 15,000 /0 $0/--
(TMQ) -- -- 15,000 /0 $0/--
(TSR) -- -- 30,000 /0 $0/--
(THS) -- -- 3,000 /0 $5,625/--
(TKN) -- -- 900 /0 $21,758/--
(TVL) 8,623 $61,645 78,450 /0 $319,074/--
(TXM) -- -- 20,000 /0 $32,500/--
4
</TABLE>
(1) Options to purchase shares of the following subsidiaries of
the Corporation have been granted to the chief executive officer
and the other named executive officers: Thermedics Inc.
(designated in the table as TMD), Thermedics Detection Inc.
(designated in the table as TDX), Thermo BioAnalysis Corporation
(designated in the table as TBA), Thermo Cardiosystems Inc.
(designated in the table as TCA), Thermo Ecotek Corporation
(designated in the table as TCK), Thermo Fibergen Inc.
(designated in the table as TFG), Thermo Fibertek Inc.
(designated in the table as TFT), Thermo Instrument Systems Inc.
(designated in the table as THI), ThermoLase Corporation
(designated in the table as TLZ), ThermoLyte Corporation
(designated in the table as TLT), Thermo Optek Corporation
(designated in the table as TOC), Thermo Power Corporation
(designated in the table as THP), ThermoQuest Corporation
(designated in the table as TMQ), Thermo Remediation Inc.
(designated in the table as THN), Thermo Sentron Inc. (designated
in the table as TSR), ThermoSpectra Corporation (designated in
the table as THS), Thermo TerraTech Inc. (designated in the table
as TTT), ThermoTrex Corporation (designated in the table as TKN),
Thermo Voltek Corporation (designated in the table as TVL) and
Trex Medical Corporation (designated in the table as TXM).
(2) All of the options reported outstanding at the end of the
fiscal year were immediately exercisable as of fiscal year-end,
except options to purchase the common stock of ThermoLyte
Corporation and Thermedics Detection Inc., which are not
exercisable until the earlier of (i) 90 days after the effective
date of the registration of the company's common stock under
Section 12 of the Exchange Act and (ii) nine years after the
PAGE
<PAGE>
grant date. In all cases, the shares acquired upon exercise of
the options are subject to repurchase by the granting corporation
at the exercise price if the optionee ceases to be employed by
such corporation or another Thermo Electron company. The granting
corporation may exercise its repurchase rights within six months
after the termination of the optionee's employment. For publicly
traded companies, the repurchase rights generally lapse ratably
over a five- to ten-year period, depending on the option term,
which may vary from seven to twelve years, provided that the
optionee continues to be employed by the granting corporation or
another Thermo Electron company. For companies whose shares are
not publicly traded, the repurchase rights lapse in their
entirety on the ninth anniversary of the grant date. Certain
options granted as a part of Thermo Electron's stock option
program have three-year terms, and the repurchase rights lapse in
their entirety on the second anniversary of the grant date.
(3) Options to purchase 135,000, 90,000 and 90,000 shares of the
Common Stock granted to Messrs. J. Hatsopoulos, Rainville and
Wood, respectively, are subject to the same terms as described in
footnote (2), except that the repurchase rights of the granting
corporation generally do not lapse until the tenth anniversary of
the grant date. In the event of the employee's death or
involuntary termination prior to the tenth anniversary of the
grant date, the repurchase rights of the granting corporation
shall be deemed to have lapsed ratably over a five-year period
commencing with the fifth anniversary of the grant date.
(4) Options to purchase 20,000 shares of the common stock of
Thermo Fibergen Inc. granted to Mr. Rainville are subject to the
same terms as described in footnote (2), except that the
repurchase rights are deemed to lapse 20% per year commencing on
the sixth anniversary of the grant date.
(5) No public market for the shares underlying these options
existed at fiscal year-end. Accordingly, no value in excess of
exercise price has been attributed to these options.
Defined Benefit Retirement Plan
Thermo Web Systems Inc., a wholly owned subsidiary of Thermo
Fibertek Inc., maintains a defined benefit retirement plan (the
"Retirement Plan") for eligible U.S. employees. Mr. Rainville is
the chief executive officer of Thermo Fibertek Inc. and the only
executive officer of the Corporation who participates in the
Retirement Plan. The following table sets forth the estimated
annual benefits payable under the Retirement Plan upon retirement
to employees of the subsidiary in specified compensation and
years-of-service classifications. The estimated benefits at
certain compensation levels reflect the statutory limits on
compensation that can be recognized for plan purposes. This limit
is currently $150,000 per year.
<TABLE>
<CAPTION>
Years of Service
Annual 15 20 25 30 35
Compensation
<S> <C> <C> <C> <C> <C>
$100,000 $25,250 $35,000 $43,750 $48,125 $48,125
$125,000 $32,813 $43,750 $54,688 $60,156 $60,156
$150,000 $39,375 $52,500 $65,625 $72,188 $72,188
</TABLE>
PAGE
<PAGE>
Each eligible employee receives a monthly retirement
benefit, beginning at normal retirement age (65), based on a
percentage (1.75%) of the average monthly compensation of such
employee before retirement, multiplied by his years of service
(up to a maximum of 30 years). Full credit is given for the first
25 years of service, and half credit is given for years over 25
and less than 30. Benefits are reduced for retirement before
normal retirement age. Average monthly compensation is generally
defined as average monthly base salary over the five years of
highest compensation in the ten-year period preceding retirement.
For 1995, the annual compensation of Mr. Rainville recognized for
plan purposes was $150,000. The estimated credited years of
service recognized under the Retirement Plan for Mr. Rainville is
30, assuming retirement at age 65. No benefits under the
Retirement Plan vest for an employee until after five years of
participation, at which time they become fully vested. The
benefits shown in the above table are subject to reduction for
Social Security benefits. The plan benefits shown are payable
during the employee's lifetime unless the employee elects another
form of benefit that provides death benefit protection.
Severance Agreements
The executive officers and certain key employees of the
Corporation have entered into contracts with the Corporation that
provide severance benefits if there is a change of control of the
Corporation that is not approved by the Board of Directors and
their employment is terminated, for whatever reason, within one
year thereafter. For purposes of these agreements a change of
control exists upon (i) the acquisition of 50% or more of the
outstanding Common Stock by any person without the prior approval
of the Board of Directors, (ii) the failure of the Board of
Directors, within two years after any contested election of
directors or tender or exchange offer not approved by the Board
of Directors, to be constituted of a majority of directors
holding office prior to such event or (iii) any other event that
the Board of Directors determines constitutes an effective change
of control of Thermo Electron.
In 1983, the Corporation entered into severance agreements
with all of the named executive officers, except Mr. Rainville
and Mr. Wood. For these severance agreements, the benefit is
stated as an initial percentage which was established by the
Board of Directors and was generally based upon the employee's
age and length of service with the Corporation. Benefits are to
be paid over a five-year period. The benefit to be paid in the
first year is determined by applying this percentage to the
employee's highest annual total cash remuneration in any 12-month
period during the preceding three years. This benefit is reduced
10% in each of the succeeding four years in which benefits are
paid. The initial percentage to be so applied to Dr. G.
Hatsopoulos, Mr. J. Hatsopoulos and Mr. Smith is 98.1%, 76.1% and
59.1%, respectively. Assuming that severance benefits would have
PAGE
<PAGE>
been payable under such agreements as of March 1, 1997, the
payments thereunder for the first year thereof to Dr. G.
Hatsopoulos, Mr. J. Hatsopoulos and Mr. Smith would have been
approximately $1,074,000, $665,000 and $313,000, respectively.
Payments under these agreements are not subject to the so-called
"excess parachute payment" provisions under applicable provisions
of the Internal Revenue Code of 1986, as amended.
During 1988, Mr. Rainville and Mr. Wood each entered into a
severance agreement with the Corporation pursuant to which he
will receive a lump sum benefit at the time of a qualifying
severance equal to the highest total cash compensation paid to
him in any twelve-month period during the three years preceding
the severance event. A qualifying severance exists if (i) the
officer's employment is terminated for any reason within one year
after a change in control of the Corporation or (ii) a group of
directors of the Corporation consisting of directors of the
Corporation on the date of the severance agreement or, if an
election contest or tender or exchange offer for the
Corporation's Common Stock has occurred, the directors of the
Corporation immediately prior to such election contest or tender
or exchange offer, and any future directors who are nominated or
elected by such directors, determines that any other termination
of the officer's employment should be treated as a qualifying
severance. The benefits under this agreement are limited in such
a manner that the payments will not constitute "excess parachute
payments" under applicable provisions of the Internal Revenue
Code of 1986, as amended. Assuming that severance benefits would
have been payable as of March 1, 1997, the payment under such
agreement to Mr. Rainville and Mr. Wood would have been
approximately $415,000 and $367,000, respectively.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Compensation
All decisions on compensation for the Corporation's
executive officers are made by the Human Resources Committee of
the Board of Directors (the "Committee"). The executive
compensation program presently consists of annual base salary
("salary"), short-term incentives in the form of annual cash
bonuses, and long-term incentives in the form of stock options.
The Committee believes that the compensation of executive
officers should reflect the scope of their responsibilities, the
success of the Corporation, and the contributions of each
executive to that success. In addition, the Committee believes
that base salaries should approximate the mid-point of
competitive salaries derived from market surveys and that
short-term and long-term incentive compensation should reflect
the performance of the Corporation and the contributions of each
executive. The process for determining each of these elements for
the named executive officers is outlined below. For its review of
the compensation of other officers of the Corporation, the
PAGE
<PAGE>
Committee follows a substantially similar process.
Establishing Competitiveness
External competitiveness is an important element of the
Committee's compensation policy. The competitiveness of the
Corporation's compensation for its executives is assessed by
comparing it to market data provided by a compensation consultant
and by annual executive compensation surveys, primarily "Project
777," an executive compensation survey prepared by Management
Compensation Services, a division of Hewitt Associates. The
majority of firms represented in the Project 777 survey are
included in the Standard & Poor's 500 Index but do not
necessarily correspond to the companies included in the
Corporation's peer group.
Principles of internal equity are also central to the
Committee's compensation policies. Compensation considered for
the Corporation's officers, whether cash or stock-based
incentives, is also evaluated by comparing it to compensation of
other executives within the Thermo Electron organization with
comparable levels of responsibility for comparably sized business
units.
Base Salary
Base salaries are intended to approximate the mid-point of
competitive salaries for similar organizations of comparable size
and complexity as the Corporation. Executive salaries are
adjusted gradually over time and only as necessary to meet this
objective. Increases in base salary may be moderated by other
considerations, such as geographic or regional market data,
industry trends or internal fairness within the Corporation. It
is the Committee's intention that over time the base salaries for
the chief executive officer and the other named executive
officers will approximate the mid-point of competitive data. The
salary increases in calendar 1996 for the named executive
officers generally reflect this practice of gradual increases and
moderation.
Cash Bonus
The Committee establishes a median potential bonus for each
executive (other than the chief executive officer) by using the
market data on total cash compensation from the same executive
compensation surveys as used to determine salaries. Specifically,
the median potential bonus plus the salary of an executive
officer is approximately equal to the mid-point of competitive
total cash compensation for a similar position and level of
responsibility in businesses having comparable sales and
complexity to the Corporation. The actual bonus awarded to an
executive officer may range from zero to three times the median
potential bonus. The value within the range (the bonus
multiplier) is determined at the end of each year by the
Committee in its discretion. The Committee exercises its
PAGE
<PAGE>
discretion by evaluating each executive's performance using a
methodology applied throughout the Corporation. The methodology
incorporates measures of operating returns designed to measure
profitability and contributions to shareholder value, and are
measures of corporate and divisional performance that are
evaluated by using graphs developed by the Corporation. These
graphs are intended to reward performance that is perceived as
above average and to penalize performance that is perceived as
below average. The measures of operating returns used in the
Committee's determinations in calendar 1996 measured return on
net assets, growth in income and return on sales, and the
Committee's determinations also included a subjective evaluation
of the contributions of each executive that are not captured by
operating measures but are considered important to the creation
of long-term value for the Stockholders. These measures of
achievements are not financial targets that are met, not met or
exceeded. The relative weighting of these operating measures and
subjective evaluation varies depending on the executive's role
and responsibilities within the organization.
The bonuses for named executive officers approved by the
Committee with respect to calendar 1996 performance in each
instance exceeded the median potential bonus.
Stock Option Program
The primary goal of the Corporation is to excel in the
creation of long-term value for the Stockholders. The principal
incentive tool used to achieve this goal is the periodic award to
key employees of options to purchase shares of common stock of
the Corporation and its majority-owned subsidiaries.
The Committee and management believe that awards of stock
options to purchase shares of both the Corporation and other
companies within the Thermo Electron group of companies
accomplish many objectives. The grant of options to key employees
encourages equity ownership in the Corporation, closely aligns
management's interests to the interests of all the Stockholders,
and results in management's compensation being closely linked to
stock performance. In addition, because the options vest over
periods of varying durations and are subject to forfeiture if the
employee leaves the Corporation prematurely, stock options are an
incentive for key employees to remain with the Corporation
long-term. The Committee believes that stock option awards in the
Corporation and its majority-owned subsidiaries are also an
important tool in providing incentives for performance within the
entire organization.
In determining awards, the Committee considers the average
annual value of all options to purchase shares of the Corporation
and other companies within the Thermo Electron organization that
vest in the next five years. (Values are established using a
modified Black-Scholes option pricing model.) As a guideline, the
Committee strives to maintain the aggregate amount of net awards
PAGE
<PAGE>
to purchase shares of Common Stock to all employees over a
five-year period below 12% of the Corporation's outstanding
Common Stock, although other factors such as unusual transactions
and acquisitions and standards for awards of comparably situated
companies may affect the number of awards granted.
Awards are not made annually in conjunction with the annual
review of cash compensation, but are made periodically. The
Committee considers total compensation of executives, actual and
anticipated contributions of each executive (which includes a
subjective assessment by the Committee of the value of the
executive's future potential within the organization), as well as
the value of previously awarded options as described above, in
determining option awards.
Stock Ownership and Retention Policies
The Corporation's compensation program is also designed to
encourage executives to own shares of the Corporation's Common
Stock. The Committee believes that encouraging executives to
retain stock acquired through its stock option program provides
additional incentive for executive officers to follow strategies
designed to maximize long-term value to Stockholders.
There are several elements to the Corporation's stock
retention program. For example, the Committee annually awards
stock options based upon an executive's ownership of the
Corporation's Common Stock over the prior year. These option
awards are independent of the award of stock options as an
incentive for management performance. In addition, the Committee
has approved several forms of stock option awards that contain
different vesting provisions and restrictions upon resale, which
are intended to encourage executives to follow an exercise and
hold strategy.
During 1996, the Committee also established a stock holding
policy for executive officers of the Corporation. The stock
holding policy specifies an appropriate level of ownership of the
Corporation's Common Stock as a multiple of the officer's
compensation. For the chief executive officer, the multiple is
one times his base salary and reference bonus for the calendar
year. For all other officers, the multiple is one times the
officer's base salary. The Committee deemed it appropriate to
permit officers to achieve these ownership levels over a
three-year period.
In order to assist officers in complying with the policy,
the Committee also adopted a stock holding assistance plan under
which the Corporation is authorized to make interest-free loans
to officers to enable them to purchase shares of the Common Stock
in the open market. The loans are required to be repaid upon the
earlier of demand or the fifth anniversary of the date of the
loan, unless otherwise authorized by the Committee. No such
loans are currently outstanding under this plan.
The Committee also confirmed its policy requiring executive
PAGE
<PAGE>
officers of the Corporation to hold shares of the Common Stock
acquired upon the exercise of stock options granted by the
Corporation. Under this policy, executive officers are required
to hold one-half of their net option exercises over a period of
five years. The net option exercise is determined by calculating
the number of shares acquired upon exercise of a stock option,
after deducting the number of shares that could have been traded
to exercise the option and the number of shares that could have
been surrendered to satisfy tax withholding obligations
attributable to the exercise of the options.
Similar stock holding policies and stock holding assistance
plans have been adopted by each of the Corporation's publicly
traded, majority-owned subsidiaries. Certain executive officers
of the Corporation who are chief executive officers of these
subsidiaries are required to comply with these stock holding
policies in lieu of the Corporation's stock holding policy. See
"Relationship with Affiliates - Stock Holding Assistance Plans."
1996 CEO Compensation
The Committee determines the total cash compensation for Dr.
George N. Hatsopoulos, the Corporation's chief executive officer
and founder, using a methodology intended to link performance
based on the 10-year total return to stockholders to compensation
for chief executive officers of companies of comparable size and
performance as the Corporation. The determinations of the
Committee as to cash compensation for the chief executive officer
are subject to review by the entire Board of Directors. In 1996,
the Board of Directors concurred in the decisions of the
Committee.
In determining the appropriate level of total cash
compensation for the chief executive officer, the Committee uses
a matrix developed by a compensation consultant that compares the
compensation of chief executive officers of competitive firms
within the Corporation's peer group to the size of the
organization as determined by level of revenues, and its
performance based on total return to stockholders over a 10-year
period. In so doing, the Committee establishes a "performance
adjusted competitive norm" for total cash compensation that
predicts what a comparably sized firm with performance
approximate to that of the Corporation would pay its chief
executive officer.
The Committee has determined that it will not pay total cash
compensation to the Corporation's chief executive officer in
excess of the performance adjusted competitive norm predicted by
the methodology described above. To determine total cash
compensation for the chief executive officer within these
parameters, the Committee first determines the base salary to be
paid the chief executive officer using the same principles as
used in setting base salaries for the named executive officers
and officers of the Corporation (described above under the
PAGE
<PAGE>
heading "Base Salary"). The increase in base salary for the chief
executive officer approved in 1996 by the Committee reflected its
policy of gradual adjustment to reflect average competitive
salaries. The Committee then subtracts the base salary approved
for the chief executive officer from the applicable maximum total
cash compensation derived by the methodology described above to
arrive at a maximum potential annual cash bonus.
Within the maximum, the Committee uses its discretion to
establish the total cash compensation of the chief executive
officer, taking into account the total cash compensation of other
executives in the Corporation and the Corporation's 10-year total
return to Stockholders. The Committee believes that the
Corporation's performance is reflected in its 10-year return, as
highlighted in the 10-year Performance Graph appearing on page 26
of this proxy statement, which compares the Corporation's stock
performance over this period to the stock performance of the
Standard & Poor's 500 Index and its peer performance group. For
the 10-year period ending December 28, 1996, the Corporation
achieved a ten-year compounded rate of return to Stockholders of
21 percent per year, well in excess of the 11 percent per year
return achieved by the Standard & Poor's 500 Index. Considering
Dr. Hatsopoulos' leadership and dedication in enhancing
Stockholder value over the last ten years, as demonstrated in the
returns reported, the Committee awarded Dr. Hatsopoulos the cash
bonus reported in the Summary Compensation Table.
For the past ten years, it has been the Committee's policy
to award to Dr. Hatsopoulos options to purchase shares of the
Corporation's Common Stock from time to time in amounts such that
his ownership of the Corporation approaches five percent of the
outstanding Common Stock. Such awards are usually made at times
the Corporation achieves a ten-year rate of return to
stockholders in excess of the returns achieved by the Standard &
Poor's 500 Index and its peer performance group. In September
1996, the Committee approved a program to grant to Dr.
Hatsopoulos options to purchase a total of 500,000 shares of the
Common Stock in installments of 50,000 shares each as of the end
of each of the next ten fiscal quarters, commencing with the
fiscal quarter ended in September 1996. The exercise price for
each installment award will be equal to the fair market value of
the Common Stock as of the end of each such quarter, which will
be the date of the grant. The last such award was made in 1993.
An identical award was made to Mr. John N. Hatsopoulos, who was
named president of the Corporation at the September meeting,
effective as of January 1, 1997. These awards were based on the
ten-year compounded rate of return to Stockholders of 24 percent
per year for the period 1985-1995, which exceeded the compounded
rate of return of 15 percent per year for the Standard & Poor's
500 Index. The shares available for grant under the
Corporation's Equity Incentive Plan will not be sufficient to
satisfy the awards approved for Dr. Hatsopoulos and Mr.
Hatsopoulos, and the Board of Directors also has approved an
increase of five million shares under this plan. See "Proposal 2
PAGE
<PAGE>
- Proposal to Increase the Shares Available for Issuance Under
the Corporation's Equity Incentive Plan."
In addition to awards of options to purchase the
Corporation's Common Stock, Dr. Hatsopoulos may be granted
options to purchase the common stock of majority-owned
subsidiaries of the Corporation as part of the Corporation's
stock option program from time to time due to his position as a
director of these subsidiaries or as chief executive officer of
the Corporation. The stock option awards to Dr. Hatsopoulos with
respect to the shares of the following companies were awarded
under this program, using the methodology described above for all
executive officers under "Stock Option Program": Thermo
BioAnalysis Corporation, Thermo Fibergen Inc., ThermoLyte
Corporation, Thermo Optek Corporation, ThermoQuest Corporation,
Thermo Sentron Inc. and Trex Medical Corporation.
Policy on Deductibility of Compensation
The Committee has also considered the application of Section
162(m) of the Internal Revenue Code to the Corporation's
compensation practices. Section 162(m) limits the tax deduction
available to public companies for annual compensation that is
paid to senior executives in excess of $1 million, unless the
compensation qualified as "performance based" or is otherwise
exempt from Section 162(m).
The compensation of the chief executive officer exceeded $1
million in 1996; none of the other named executive officers
received compensation in excess of $1 million in 1996. The
Committee does not believe that the amount by which the chief
executive officer's compensation exceeded $1 million was
significant. The Committee does not currently expect the
compensation of any of the named executive officers other than
the chief executive officer to exceed the $1 million threshold in
1997. Furthermore, it is believed that the Corporation's stock
incentive plans qualify as "performance based." Therefore, it
does not appear that the Section 162(m) limitation will have a
significant impact on the Corporation in the near-term. The
Committee believes that the Corporation's incentive compensation
program, as presently structured, continues to serve the best
interests of the Corporation and its Stockholders. The Committee
will continue to monitor the effect of Section 162(m) on the
Corporation.
Mr. Donald E. Noble (Chairman)
Dr. Elias P. Gyftopoulos
Mr. Frank Jungers
Ms. Hutham S. Olayan
Mr. Roger D. Wellington
COMPARATIVE PERFORMANCE GRAPHS
Five-Year Performance Graph: 1991-1996
PAGE
<PAGE>
The Securities and Exchange Commission requires that the
Corporation include in this proxy statement a line-graph
presentation comparing cumulative, five-year shareholder returns
for the Corporation's Common Stock with a broad-based market
index and either a nationally recognized industry standard or an
index of peer companies selected by the Corporation. The
Corporation has compared its performance with the Standard &
Poor's 500 Index (the "S&P 500 Index") and a peer group of
companies that comprise the following Dow Jones industry groups:
diversified technology, electrical components and equipment, and
industrial and commercial pollution control and waste management.
The Corporation, which was added to the Dow Jones diversified
technology industry group in 1996, has been excluded from the
peer group constructed from these industry groups. The companies
included in these industry groups and the Corporation's peer
group are as follows: diversified technology - Corning Inc.,
Minnesota Mining and Manufacturing Co., The Perkin-Elmer Corp.,
Raytheon Co., Rockwell International Corp., TRW Inc., Tektronix,
Inc., Texas Instruments Incorporated, United Technologies Corp.
and Varian Associates, Inc.; electrical components and equipment
- AMP Inc., Emerson Electric Co., General Signal Corp., Grainger
(W.W.), Inc., Honeywell Inc., Hubbell Inc. (Class B), Molex Inc.,
Solectron Corporation, Thomas & Betts Corp. Westinghouse Electric
Corp. and York International Corp.; and industrial and
commercial pollution control and waste management -
Browning-Ferris Industries, Inc., Donaldson Inc., Ogden Corp.,
USA Waste Services Inc., Wheelabrator Technologies Inc. and WMX
Technologies Inc.
Comparison of 1991-1996 Cumulative Total Return Among Thermo
Electron Corporation (TMO),
the Standard & Poor's 500 Index (S&P 500) and the Corporation's
Peer Group
GRAPH APPEARS HERE
12/31/91 12/31/9212/31/93 12/31/94 12/30/95 12/27/96
TMO 100 101 135 145 252 300
S&P 500 100 108 118 120 165 203
Peer 100 105 110 114 148 183
Group
The total return for the Corporation's Common Stock (TMO),
the S&P 500 Index (S&P 500) and the Corporation's Peer Group
(Peer Group) assumes the reinvestment of dividends, although
dividends have not been declared on the Corporation's Common
Stock. The Corporation's Common Stock is traded on the New York
Stock Exchange under the ticker symbol "TMO".
Ten-Year Performance Graph: 1986-1996
The Corporation has also elected to compare its cumulative
PAGE
<PAGE>
shareholder return to the S&P 500 Index and the Corporation's
Peer Group during the last ten years. The Corporation's Human
Resources Committee uses this information as a measure of
performance in determining total cash compensation for the
Corporation's Chief Executive Officer.
Comparison of 1986-1996 Cumulative Total Return Among Thermo
Electron Corporation (TMO), the S&P 500 Index (S&P 500) and the
Corporation's Peer Group
GRAPH APPEARS HERE
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
TMO 100 80 119 180 170 274 278 371 397 690 822
S&P 100 105 123 162 157 204 220 242 245 337 415
500
Peer 100 106 136 173 171 208 219 232 240 313 383
Group
RELATIONSHIP WITH AFFILIATES
Thermo Electron has adopted a strategy of selling a minority
interest in subsidiary companies to outside investors as an
important tool in its future development. As part of this
strategy, Thermo Electron and certain of its subsidiaries have
created several private and publicly-held subsidiaries. From
time to time, Thermo Electron and its subsidiaries will create
other majority-owned subsidiaries as part of its spinout
strategy. Such majority-owned Thermo Electron subsidiaries are
hereinafter referred to as the "Thermo Subsidiaries.")
Thermo Electron and each of the Thermo Subsidiaries
recognize that the benefits and support that derive from their
affiliation are essential elements of their individual
performance. Accordingly, Thermo Electron and each of the Thermo
Subsidiaries have adopted the Thermo Electron Corporate Charter
(the "Charter") to define the relationships and delineate the
nature of such cooperation among themselves. The purpose of the
Charter is to ensure that (1) all of the companies and their
stockholders are treated consistently and fairly, (2) the scope
and nature of the cooperation among the companies, and each
company's responsibilities, are adequately defined, (3) each
company has access to the combined resources and financial,
managerial and technological strengths of the others, and (4)
Thermo Electron and the Thermo Subsidiaries, in the aggregate,
are able to obtain the most favorable terms from outside parties.
To achieve these ends, the Charter identifies the general
principles to be followed by the companies, addresses the role
and responsibilities of the management of each company, provides
for the sharing of group resources by the companies and provides
for centralized administrative, banking and credit services to be
PAGE
<PAGE>
performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by
members, coordinating the access of Thermo Electron and the
Thermo Subsidiaries (the "Thermo Group") to external financing
sources, ensuring compliance with external financial covenants
and internal financial policies, assisting in the formulation of
long-range planning and providing other banking and credit
services. Pursuant to the Charter, Thermo Electron may also
provide guarantees of debt or other obligations of the Thermo
Subsidiaries or may obtain external financing at the parent level
for the benefit of the Thermo Subsidiaries. In certain instances,
the Thermo Subsidiaries may provide credit support to, or on
behalf of, the consolidated entity or may obtain financing
directly from external financing sources. Under the Charter,
Thermo Electron is responsible for determining that the Thermo
Group remains in compliance with all covenants imposed by
external financing sources, including covenants related to
borrowings of Thermo Electron or other members of the Thermo
Group, and for apportioning such constraints within the Thermo
Group. In addition, Thermo Electron establishes certain internal
policies and procedures applicable to members of the Thermo
Group. The cost of the services provided by Thermo Electron to
the Thermo Subsidiaries is covered under existing corporate
services agreements between Thermo Electron and each of the
Thermo Subsidiaries.
The Charter presently provides that it shall continue in
effect so long as Thermo Electron and at least one Thermo
Subsidiary participate. The Charter may be amended at any time by
agreement of the participants. Any Thermo Subsidiary can withdraw
from participation in the Charter upon 30 days' prior notice. In
addition, Thermo Electron may terminate a subsidiary's
participation in the Charter in the event the subsidiary ceases
to be controlled by Thermo Electron or ceases to comply with the
Charter or the policies and procedures applicable to the Thermo
Group. A withdrawal from the Charter automatically terminates
the corporate services agreement and tax allocation agreement (if
any) in effect between the withdrawing company and Thermo
Electron. The withdrawal from participation does not terminate
outstanding commitments to third parties made by the withdrawing
company, or by Thermo Electron or other members of the Thermo
Group, prior to the withdrawal. However, a withdrawing company is
required to continue to comply with all policies and procedures
applicable to the Thermo Group and to provide certain
administrative functions mandated by Thermo Electron so long as
the withdrawing company is controlled by or affiliated with
Thermo Electron.
In general, under the corporate services agreements between
Thermo Electron and each of the Thermo Subsidiaries, Thermo
Electron's corporate staff provides each of the Thermo
Subsidiaries with certain administrative services, including
certain legal advice and services, risk management, employee
benefit administration, tax advice and preparation of tax
PAGE
<PAGE>
returns, centralized cash management and financial and other
services. For the fiscal year ended December 28, 1996, the
Corporation assessed each Thermo Subsidiary an annual fee equal
to 1.0% of such subsidiary's revenues for these services. The
fee is reviewed annually and may be changed by mutual agreement
of any Thermo Subsidiary and Thermo Electron. For items such as
employee benefit plans, insurance coverage and other identifiable
costs, Thermo Electron charges each of the Thermo Subsidiaries
based on charges attributable to the respective subsidiary. Each
corporate services agreement automatically renews for successive
one-year terms, unless canceled by the subsidiary upon 30 days'
prior notice. In addition, each corporate services agreement
terminates automatically in the event the subsidiary ceases to be
a member of the Thermo Group or ceases to be a participant in the
Charter. In the event of a termination of a corporate services
agreement, the subsidiary will be required to pay a termination
fee equal to the fee that was paid by such subsidiary for
services under the corporate services agreement for the
nine-month period prior to termination. Following termination,
Thermo Electron may provide certain administrative services on an
as-requested basis by the subsidiary or as required in order to
meet such subsidiary's obligations under Thermo Electron's
policies and procedures. Thermo Electron will charge a subsidiary
a fee equal to the market rate for comparable services if such
services are provided to such subsidiary following termination.
Pursuant to an international distribution agreement,
Thermedics Detection Inc. ("Thermedics Detection"), a subsidiary
of Thermedics Inc., which is, in turn, a subsidiary of the
Corporation, has appointed Arabian Business Machines Co. ("ABM")
as its exclusive distributor of drug-and-explosives detection
products in certain Middle East countries. ABM is a member of
the Olayan Group, and Hutham S. Olayan, a director of the
Corporation, is the president and a director of Olayan America
Corporation and Competrol Real Estate Limited, two other members
of the Olayan Group, which is indirectly controlled by Suliman S.
Olayan, Ms. Olayan's father. During 1996, ABM purchased $652,000
of products from Thermedics Detection pursuant to this
distribution agreement.
In March 1996, Thermedics Detection completed private
placements of an aggregate of 300,000 shares primarily to
outside investors of minority investments in its common stock.
Crescent International Holdings Limited purchased 50,000 shares
of the common stock of Thermedics Detection in such private
placements at a purchase price of $10.00 per share, the same
price paid by unaffiliated buyers. Crescent International
Holdings Limited is a wholly owned subsidiary of Crescent Holding
GmbH. Crescent Holding GmbH is indirectly controlled by Suliman
S. Olayan, the father of Hutham S. Olayan, a director of the
Corporation.
In January 1996, Crescent International Holdings Limited
purchased from Trex Medical Corporation ("Trex Medical"), a
PAGE
<PAGE>
subsidiary of ThermoTrex Corporation, which is, in turn, a
majority-owned subsidiary of the Corporation, an aggregate of
100,000 shares of the common stock of Trex Medical in a private
placement for an aggregate purchase price of $1,075,000.
Crescent International Holdings Limited is indirectly controlled
by Suliman S. Olayan, the father of Ms. Hutham S. Olayan, a
director of the Corporation. Ms. Olayan disclaims beneficial
ownership of the shares owned by Crescent International Holdings
Limited.
In December 1996, Metrika Systems Corporation ("Metrika
Systems"), subsidiary of the Corporation, completed a private
placement of 1,935,667 shares primarily to outside investors of
minority investments in its common stock. Dr. John M. Albertine,
a director of the Corporation, and Albertine Enterprises, Inc.,
of which Dr. Albertine is chairman of the board and chief
executive officer, purchased 13,333 and 6,667 shares,
respectively, of the common stock of Metrika Systems at a price
of $7.50 per share, the same price paid by unaffiliated buyers.
In April 1997, Thermo Information Solutions Inc. ("TIS"), a
subsidiary of Coleman Research Corporation which in turn is a
wholly-owned subsidiary of the Corporation, completed private
placements of an aggregate of 1,212,260 shares primarily to
outside investors of minority investments in its common stock.
Pilot Trading Trust purchased 12,000 shares of common stock of
TIS in such private placements at a purchase price of $9.00 per
share, the same price paid by unaffiliated buyers. Pilot Trading
Trust is controlled by Robert A. McCabe, a director of the
Corporation, and members of his family. In connection with TIS'
private placement of its shares of common stock, TIS and the
Corporation entered into a placement agreement with KSH
Investment Group, Inc. ("KSH") to act as placement agent on
behalf of TIS. KSH received a placement agent fee of
approximately $655,000, representing 6% of the gross proceeds
from the sale of shares of TIS common stock in the private
placement. KSH is a privately-held investment banking firm of
which John C. Hatsopoulos is a shareholder and managing director.
John C. Hatsopoulos is the son of John N. Hatsopoulos, the
Corporation's president and chief financial officer. It is
expected that John C. Hatsopoulos will receive a portion of this
placement agent fee, however, his portion will not be determined
until the end of calendar 1997.
Stock Holding Assistance Plans
In 1996, the Corporation adopted a stock holding policy
which requires its executive officers to acquire and hold a
minimum number of shares of Common Stock. In order to assist the
executive officers in complying with the policy, the Corporation
also adopted a stock holding assistance plan under which it may
make interest-free loans to certain key employees, including its
executive officers, to purchase Common Stock in the open market.
No such loans are outstanding under this plan.
PAGE
<PAGE>
Each of the Corporation's publicly traded, majority-owned
subsidiaries have adopted similar stock holding policies and
stock holding assistance plans, which are applicable to their
executive officers. Certain executive officers of the
Corporation are the chief executive officers of these
subsidiaries and are required to comply with the subsidiary's
stock holding policies. Mr. Arvin H. Smith, an executive vice
president of the Corporation, is also the chief executive officer
of Thermo Instrument Systems Inc. Mr. William A. Rainville, a
senior vice president of the Corporation, is also the chief
executive officer of Thermo Fibertek Inc. Mr. John W. Wood,
Jr., a senior vice president of the Corporation, is also the
chief executive officer of Thermedics Inc. In 1996, Mr.
Rainville received a loan in the principal amount of $118,104
under the Thermo Fibertek Inc. stock holding assistance plan to
purchase 10,000 shares of the common stock of Thermo Fibertek
Inc. Mr. Rainville's loan is payable on the earlier of demand or
the fifth anniversary of the date of the loan, unless otherwise
authorized by the human resources committee of the board of
directors of Thermo Fibertek Inc. None of the other named
executive officers have loans currently outstanding under any
subsidiary stock holding assistance plan.
- PROPOSAL 2-
PROPOSAL TO INCREASE THE SHARES AVAILABLE FOR ISSUANCE UNDER THE
CORPORATION'S EQUITY INCENTIVE PLAN
The Board of Directors has an approved amendment to the
Corporation's equity incentive plan (the "Equity Incentive Plan")
that would increase the number of shares of Common Stock
available for issuance under the Equity Incentive Plan by five
million shares. The increase in shares is being recommended to
the Stockholders for their approval at the Meeting.
The Equity Incentive Plan was first approved by the
Stockholders in 1989. As of March 1, 1997, options to purchase
8,093,439 shares of Common Stock were outstanding under the
Equity Incentive Plan, options to purchase 2,030,689 shares of
Common Stock had been exercised and options to purchase 410,807
shares had lapsed or been canceled. As of March 1, 1997, options
to purchase 450,872 shares were available for future grant under
the Equity Incentive Plan.
The Board of Directors believes that the shares currently
available under the Equity Incentive Plan are not sufficient to
fund the Corporation's stock-based incentive program. It has
been the Committee's objective to award net options to purchase
up to 12% of the outstanding Common Stock over a five-year
period. The options outstanding and the shares remaining
available for future grant under the Equity Incentive Plan
represent less than 5.7% of the outstanding Common Stock as of
April 7, 1997. After giving effect to the increase, the options
PAGE
<PAGE>
outstanding and shares available for future grant would represent
approximately 9% of the outstanding Common Stock. The Board of
Directors believes that it is in the Corporation's best interest
to be able to continue to grant stock-based incentives to its key
employees, executive officers and directors.
In addition, in September 1996, the Human Resources
Committee of the Board of Directors (the "Committee"), approved a
program to grant options to purchase 500,000 shares to each of
the Corporation's chairman and chief executive officer, Dr.
George N. Hatsopoulos, and its president and chief financial
officer, Mr. John N. Hatsopoulos. These options are to be
granted in installments of 50,000 shares at the end of each of
the next 10 fiscal quarters beginning with the quarter ended
September 28, 1996. To date, three installments have been
granted. If the amendment to the Equity Incentive Plan is not
approved by the Stockholders, there will not be sufficient shares
to fund the option program approved by the Committee and the
option grants approved for Dr. G. Hatsopoulos and Mr. J.
Hatsopoulos will be rescinded to the extent sufficient shares are
not available to satisfy the grants.
Summary of the Equity Incentive Plan
The following summary of the terms of the Equity Incentive
Plan is qualified in its entirety by reference to the plan.
Administration; Eligible Participants
The Equity Incentive Plan is administered by the Board of
Directors of the Corporation (the "Board"). The Board has full
power to select, from among the persons eligible for awards, the
individuals to whom awards will be granted, to make any
combination of awards to any participant, and to determine the
specific terms of each award, including terms and conditions
relating to events of merger, consolidation, dissolution and
liquidation, change of control, acceleration of vesting or lapse
of restrictions, vesting, forfeiture, other restrictions,
dividends and interest on deferred amounts. The Board also has
the power to waive compliance by participants with the terms and
conditions of awards, to cancel awards with the consent of
participants and to accelerate the vesting or lapse of any
restrictions of any award. The Board does not have the authority
under the Equity Incentive Plan to reprice outstanding option
awards or to grant stock appreciation rights. The Board may
delegate any or all of its responsibilities under the Equity
Incentive Plan to a committee appointed by the Board consisting
of two or more "non-employee" directors within the meaning of
Rule 16b-3 (or any successor rule) under the Securities Exchange
Act of 1934, as amended (the Exchange Act").
Employees and directors of, and consultants to, the
Corporation and its subsidiaries, or other persons who are
expected to make significant contributions to the growth and
success of the Corporation and its subsidiaries, selected by the
PAGE
<PAGE>
Board, are eligible to participate in the Equity Incentive Plan.
Approximately 560 persons presently participate in the existing
plan of the Corporation.
Shares Subject to the Incentive Plan; Use of Proceeds
The number of shares of the Common Stock currently reserved
for future issuance under the Equity Incentive Plan is 8,544,311
shares, subject to adjustment for stock splits and similar
events. Awards and shares that are forfeited, reacquired by the
Corporation, satisfied by a cash payment by the Corporation or
otherwise satisfied without the issuance of Common Stock are not
counted against the maximum number of reserved shares under the
plan.
The proceeds received by the Corporation from transactions
under the Equity Incentive Plan will be used for the general
purposes of the Corporation. Shares issued under the Equity
Incentive Plan may be authorized but unissued shares, or shares
reacquired by the Corporation and held in its treasury.
Types of Awards; Limitations on Awards
The Equity Incentive Plan permits the Board to grant a
variety of stock and stock-based awards in such form or in such
combinations as may be approved by the Board. Without limiting
the foregoing, the types of awards may include stock options,
restricted and unrestricted shares, rights to receive cash or
shares on a deferred basis or based on performance, cash payments
sufficient to offset the federal, state and local ordinary income
taxes of participants resulting from transactions under the
Equity Incentive Plan, and loans to participants in connection
with awards. The Board may not, however, grant in excess of 1%
of the outstanding shares of Common Stock (calculated as of the
beginning of a calendar year) to any recipient under any award or
combination of awards granted during a calendar year.
Stock Options
Awards under the Equity Incentive Plan may be in the form of
stock options, which entitle the recipient, on exercise, to
purchase shares of Common Stock at a specified exercise price.
Stock options granted under the plan may be either stock options
that qualify as incentive stock options ("incentive stock
options") under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Internal Revenue Code"), or stock options that
are not intended to meet such requirements ("non-statutory
options"). The exercise price of each option is determined by
the Board, but may not be less than 85% of the fair market value
per share of Common Stock on the date of grant.
The term of each option will be fixed by the Board. The
Board will also determine at what time each option may be
exercised. Options may be made exercisable in installments, and
PAGE
<PAGE>
the exercisability of options may be accelerated by the Board.
The Board may, in its discretion, provide that upon exercise of
any option, instead of receiving shares free from restrictions
under the Equity Incentive Plan, the option holder will receive
shares of restricted stock or deferred stock awards.
The exercise price of options granted under the Equity
Incentive Plan must be paid in full by check or other instrument
acceptable to the Board or, if the Board so determines, by
delivery of shares of Common Stock held by the option holder for
at least six months (unless the Board expressly approves a
shorter period) and that have a fair market value on the exercise
date equal to the exercise price of the option, by delivery of a
promissory note from the option holder to the Corporation payable
on terms acceptable to the Board, by delivery of an unconditional
and irrevocable undertaking by a broker to deliver sufficient
funds to the Corporation to pay the exercise price, or some
combination of these methods.
Incentive stock options must meet certain additional
requirements in order to qualify as incentive stock options under
the Internal Revenue Code. Incentive stock options may be
granted only to employees of the Corporation and its
subsidiaries. The exercise price of an incentive stock option
may not be less than 100% of the fair market value of the shares
on the date of grant. An incentive stock option may not be
granted under the Equity Incentive Plan after the tenth
anniversary of the date the Board adopted the Equity Incentive
Plan and the latest date on which an incentive stock option may
be exercised is ten years from the date of its grant. In
addition, the Internal Revenue Code limits the value of shares
subject to incentive stock options that may become exercisable
annually by any option holder in a given year, and requires a
shorter exercise period and a higher minimum exercise price in
the case of Stockholders owning more than ten percent (10%) of
the Corporation's Common Stock.
Restricted Stock and Unrestricted Stock
The Board may also award shares of Common Stock subject to
such conditions and restrictions as it may determine ("restricted
stock"). The purchase price of shares of restricted stock shall
be determined by the Board, but may not be less than the par
value of those shares. In addition, the Board may not grant in
excess of 10% of the shares reserved under the Equity Incentive
Plan in the form of restricted stock.
Generally, if a participant who holds shares of restricted
stock fails to satisfy such restrictions or other conditions as
may be determined by the Board (such as continuing employment for
a given period) prior to the lapse or waiver of the restrictions,
the Corporation will have the right to require the forfeiture or
repurchase of the shares in exchange for an amount, if any,
determined by the Board as specifically set forth in the
PAGE
<PAGE>
instrument evidencing the award. The Board may at any time waive
such restrictions or accelerate the date or dates on which the
restrictions will lapse. Prior to the lapse of restrictions on
shares of restricted stock, the recipient will have all the
rights of a Stockholder with respect to the shares, including
voting and dividend rights, subject only to the conditions and
restrictions generally applicable to restricted stock or
specifically set forth in the instrument evidencing the award.
The Board may also grant shares that are free from any
restrictions under the Equity Incentive Plan ("unrestricted
stock"). Unrestricted stock may be issued in recognition of
services or in such other circumstances that the Board deems to
be in the best interests of the Corporation.
Deferred Stock
The Board may also make deferred stock awards under the
Equity Incentive Plan which entitle the recipient to receive
shares of Common Stock in the future. Delivery of Common Stock
will take place on such date or dates and on such conditions as
the Board specifies. The Board may at any time accelerate the
date on which delivery of all or any part of the Common Stock
will take place or otherwise waive any restrictions on the award.
Performance Awards
The Board may also grant performance awards entitling the
recipient to receive shares of Common Stock or cash in such
combinations as it may determine following the achievement of
specified performance goals. Payment of the performance award
may be conditioned on achievement of individual or Corporation
performance goals over a fixed or determinable period or on such
other conditions as the Board shall determine.
Loans and Supplemental Grants
The Board may authorize a loan from the Corporation to a
participant either on or after the grant of an award to the
participant. Loans, including extensions, may be for any term
specified by the Board, may be either secured or unsecured, and
may be with or without recourse against the participant in the
event of default. Each loan shall be subject to such terms and
conditions and shall bear such rate of interest, if any, as the
Board shall determine. In connection with any award, the Board
may, at the time such award is made or at a later date, provide
for and make a cash payment to the participant in an amount equal
to (a) the amount of any federal, state and local income tax on
ordinary income for which the participant will be liable with
respect to the award, plus (b) an additional amount on a
grossed-up basis necessary to make him or her whole after payment
of the amount described in (a).
Payment of Purchase Price
PAGE
<PAGE>
Except as otherwise provided in the Equity Incentive Plan,
the purchase price of Common Stock or other rights acquired or
granted pursuant to such plan shall be determined by the Board,
provided that the purchase price of Common Stock shall not be
less than its par value. The Board may determine the method of
payment for Common Stock acquired pursuant to the Equity
Incentive Plan and may determine that all or any part of the
purchase price has been satisfied by past service rendered by the
recipient of an award. The Board may, upon the request of a
participant, defer the date on which payment under any award will
be made.
Change in Control Provisions
Unless otherwise provided in the agreement evidencing an
award, if there is a "Change in Control" of the Corporation as
defined in the Equity Incentive Plan, any stock options that are
not then exercisable and fully vested will become fully
exercisable and vested; the restrictions applicable to restricted
stock awards will lapse and shares issued pursuant to such awards
will be free of restrictions and fully vested; and deferral and
other limitations and conditions that related solely to the
passage of time or continued employment or other affiliation will
be waived and removed but other conditions will continue to apply
unless otherwise provided in the instrument evidencing the awards
or by agreement between the participant and the Corporation.
Generally, a "Change of Control" occurs if (1) any person becomes
the beneficial owner of 25% or more of the outstanding Common
Stock of the Corporation without the prior approval of the Board,
(2) during any two-year period the individuals who constituted
the Board at the beginning of such period no longer represent a
majority of such board or (3) the Board determines that any other
event constitutes an effective change in control of the
Corporation.
Nature of Rights as Stockholder Under the Equity Incentive Plan
Except as specifically provided by the Equity Incentive
Plan, the receipt of an award will not give a participant rights
as a Stockholder. The participant will obtain such rights,
subject to any limitations imposed by the plan or the instrument
evidencing the award, upon actual receipt of Common Stock.
Adjustments for Stock Dividends, etc.
The Board will make appropriate adjustments to the maximum
number of shares of Common Stock that may be delivered under the
Equity Incentive Plan, and under outstanding awards, to reflect
stock dividends, stock splits and similar events. The Board may
also make appropriate adjustments to avoid distortions in the
operation of the Equity Incentive Plan.
Amendment and Termination
PAGE
<PAGE>
The Equity Incentive Plan shall remain in full force and
effect until terminated by the Board. The Board may at any time
or times amend or review the Equity Incentive Plan or any
outstanding award for any purpose which may at the time be
permitted by law, or may at any time terminate the plan as to any
further grants of awards. No amendment of the Equity Incentive
Plan or any outstanding award may adversely affect the rights of
a participant as to any previously granted award without his or
her consent. Stockholder approval of amendments shall be
required only as is necessary to satisfy the then-applicable
requirements of Rule 16b-3 (or any successor rule), of stock
exchanges or of any federal tax law or regulation relating to
incentive stock options.
Stock Withholding
In the case of an award under which Common Stock may be
delivered, the Board may permit the participant or other
appropriate person to elect to have the Corporation hold back
from the shares to be delivered, or to deliver to the
Corporation, shares of Common Stock having a value sufficient to
satisfy any federal, state and local withholding tax
requirements.
Federal Income Tax Consequences
The following is a summary of the principal current federal
income tax consequences of transactions under the Equity
Incentive Plan. It does not describe all federal tax
consequences under the Equity Incentive Plan, nor does it
describe state, local or foreign tax consequences.
Incentive Stock Options
No taxable income is realized by the optionee upon the grant
or exercise of an incentive stock option. However, the exercise
of an incentive stock option may result in alternative minimum
tax liability for the optionee. If no disposition of shares
issued to an optionee pursuant to the exercise of an incentive
stock option is made by the optionee within the later of two
years from the date of grant or one year after the transfer of
such shares to the optionee, then upon the later sale of such
shares, for federal income tax purposes, any amount realized in
excess of the exercise price will be taxed to the optionee as a
long-term capital gain and any loss sustained will be a long-term
capital loss, and no deduction will be allowed to the
Corporation.
If the shares of Common Stock acquired upon the exercise of
an incentive stock option are disposed of prior to the expiration
of the two- and one-year holding periods described above,
generally the optionee will realize ordinary income in the year
of disposition in an amount equal to the excess (if any) of the
fair market value of the shares at exercise (or, if less, the
PAGE
<PAGE>
amount realized on an arms-length sale of such shares) over the
exercise price thereof, and the Corporation will be entitled to
deduct such amount. Any further gain realized will be taxed as
short- or long-term capital gain and will not result in any
deduction by the Corporation. Special rules will apply where all
or a portion of the exercise price of the incentive stock option
is paid by tendering shares of Common Stock.
If any incentive stock option is exercised at a time when it
no longer qualifies for the tax treatment described above, the
option is treated as a non-statutory stock option. Generally, an
incentive stock option will not be eligible for the tax treatment
described above if it is exercised more than three months
following termination of employment (one year following
termination of employment by reason of permanent and total
disability), except in certain cases where the incentive stock
option is exercised after the death of an optionee.
Non-statutory Options
With respect to non-statutory stock options granted under
the Equity Incentive Plan, no income is realized by the optionee
at the time the option is granted. Generally, at exercise,
ordinary income is realized by the optionee in an amount equal to
the difference between the option price and the fair market value
of the shares on the date of exercise, and the Corporation
receives a tax deduction for the same amount, and at disposition,
appreciation or depreciation after the date of exercise is
treated as either short- or long-term capital gain or loss
depending on how long the shares have been held.
Restricted Stock
A recipient of restricted stock (stock subject to
forfeiture provisions) generally will be subject to tax at
ordinary income rates on the fair market value of the stock at
the time the stock is either transferable or is no longer subject
to forfeiture, less any amount paid for such stock. A
restriction only as to the time stock can be resold is not a
substantial risk of forfeiture, and therefore is not considered
restricted stock under this provision of the Equity Incentive
Plan. However, a recipient who so elects under Section 83(b) of
the Internal Revenue Code ("Section 83(b)") within 30 days of the
date of issuance of the restricted stock will realize ordinary
income on the date of issuance equal to the fair market value of
the shares of restricted stock at that time (measured as if the
shares were unrestricted and could be sold immediately), minus
any amount paid for such stock. If the shares subject to such
election are forfeited, the recipient will not be entitled to any
deduction, refund or ordinary loss for tax purposes with respect
to the forfeited shares. Upon sale of the shares after the
forfeiture period has expired, the appreciation or depreciation
after the shares become transferable or free from risk of
forfeiture (or, if a Section 83(b) election was made, since the
PAGE
<PAGE>
shares were issued) will be treated as long- or short-term
capital gain or loss. The holding period to determine whether
the recipient has long- or short-term capital gain or loss begins
when the forfeiture period expires (or upon the earlier issuance
of the shares, if the recipient elected immediate recognition of
income under Section 83(b)). If restricted stock is received in
connection with another award under the Equity Incentive Plan
(for example, upon exercise of an option), the income and the
deduction, if any, associated with such award may be deferred in
accordance with the rules described above for restricted stock.
Deferred Stock
The recipient of a deferred stock award will generally be
subject to tax at ordinary income rates on the fair market value
of the stock on the date that the stock is distributed to the
participant. The capital gain or loss holding period for such
stock will also commence on such date. The Corporation generally
will be entitled to a deduction equal to the amount that is
taxable as ordinary income to the employee. If a right to
deferred stock is received under another award (for example, upon
exercise of an option), the income and deduction, if any,
associated with such award may be deferred in accordance with the
rules described above for deferred stock.
Performance Awards
The recipient of a performance award will generally be
subject to tax at ordinary income rates on any cash received and
the fair market value of any Common Stock issued under the award,
and the Corporation will generally be entitled to a deduction
equal to the amount of ordinary income realized by the recipient.
Any cash received under a performance award will be included in
income at the time of receipt. The fair market value of any
Common Stock received will also generally be included in income
(and a corresponding deduction will generally be available to the
Corporation) at the time of receipt. The capital gain or loss
holding period for any Common Stock distributed under a
performance award will begin when the recipient recognizes
ordinary income in respect of that distribution.
Loans and Supplemental Grants
Generally speaking, bona fide loans made under the Equity
Incentive Plan will not result in taxable income to the recipient
or in a deduction to the Corporation. However, any such loan
made at a rate of interest lower than certain rates specified
under the Internal Revenue Code may result in an amount
(measured, in general, by reference to the difference between the
actual rate and the specified rate) being included in the
borrower's income and deductible by the Corporation. Forgiveness
of all or a portion of a loan will also result in income to the
borrower and a deduction for the Corporation. If outright cash
grants are given in order to facilitate the payment of
PAGE
<PAGE>
award-related taxes, the grants will be includable as ordinary
income by the recipient at the time of receipt and will in
general be deductible by the Corporation.
New Plan Benefits
The following table sets forth, to the extent determinable,
the number of shares of the Common Stock of the Corporation that
have been authorized to be granted under the Equity Incentive
Plan to the chief executive officer, the other named executive
officers, all current executive officers as a group, all current
directors who are not executive officers as a group and all
employees, including all current officers who are not executive
officers as a group. Aside from the options authorized to be
granted to the chief executive officer and the president of the
Corporation in future installments, no other option grants are
conditioned upon Stockholder approval of the increase in the
number of shares available under the Equity Incentive Plan.
Equity
Incen-
tive
Plan
Number of
Name and Position DollarShare of
Value Common
($) Stock
George N. Hatsopoulos, chief executive
Office N/A 350,000(1)
John N. Hatsopoulos, president N/A 350,000(1)
Arvin H. Smith, executive vice president N/A N/A
William A. Rainville, senior vice N/A N/A
president
John W. Wood Jr., senior vice president N/A N/A
Executive Group N/A N/A
Non-Executive Director Group N/A N/A
Non-Executive Officer Employee Group N/A N/A
(1) To be granted in equal installments of 50,000 shares at
the end of each of the next seven fiscal quarters, commencing
with the fiscal quarter ending June 1997.
Recommendation
The Board of Directors believes that the amendment to the
Equity Incentive Plan will provide the Corporation with the
ability to continue to provide incentive compensation for
employees and others who are expect to make significant
contributions to the future growth and success of the
Corporation, to reward such individuals for such contributions
PAGE
<PAGE>
and to encourage such individuals to take into account the
long-term interests of the Corporation and its Stockholders
through ownership of the Corporation's Common Stock.
Accordingly, the Board of Directors believes that the proposal is
in the best interests of the Corporation and its Stockholders and
recommends that the Stockholders vote FOR the approval of the
amendment to the Equity Incentive Plan. If not otherwise
specified, Proxies will be vote FOR approval of the amendment of
the Equity Incentive Plan.
- PROPOSAL 3 -
STOCKHOLDER PROPOSAL
Certain stockholders have submitted the proposal set forth
below. The Corporation will furnish, orally or in writing as
requested, the names, addresses and claimed share ownership
positions of the proponents of the stockholder proposal promptly
upon written or oral request directed to the Secretary of the
Corporation. The Board of Directors has carefully considered the
stockholder proposal and concluded that its adoption would not be
in the best interests of the Corporation or its Stockholders.
For the reasons stated after the proposal and its supporting
statement, the Board of Directors recommended a vote against the
proposal.
Stockholders have submitted the following proposal, which
will be voted upon at the Annual Meeting of Stockholders if
presented by its proponents.
WHEREAS WE BELIEVE:
Responsible implementation of a sound, credible environmental
policy increases long-term shareholder value by raising
efficiency, decreasing clean-up costs, reducing litigation, and
enhancing public image and product attractiveness;
Adherence to public standards for environmental performance gives
a company greater public credibility than standards created by
industry alone. For maximum credibility and usefulness, such
standards should specifically meet the concerns of investors and
other stakeholders;
Companies are increasingly being expected by investors to do
meaningful, regular, comprehensive and impartial environmental
reports. Standardized environmental reports enable investors to
compare performance over time. They also attract investment from
investors seeking companies which are environmentally responsible
and which minimize risk of environmental liability.
WHEREAS:
The Coalition for Environmentally Responsible Economies (CERES) -
PAGE
<PAGE>
which includes shareholders of this company; public interest
representatives, and environmental experts - consulted with
corporations to produce the CERES Principles as comprehensive
public standards for both environmental performance and
reporting. Fifty-four companies, including Sun [Sunoco], General
Motors, H.B. Fuller, Polaroid, and Bethlehem Steel, have endorsed
these principles to demonstrate their commitment to public
environmental accountability. Fortune-500 endorsers say that
benefits of working with CERES are public credibility;
'value-added' for the company's environmental initiatives;
In endorsing the CERES Principles, a 7. Environmental
company commits to work toward: restoration
1. Protection of 4. Energy 8. Informing the
the biosphere conservation public
2. Sustainable 5. Risk reduction 9. Management
natural resource use commitment
3. Waste reduction 6. Safe products & 10. Audits and
and disposal services reports
[Full text of the CERES Principles and accompanying CERES Report
Form obtainable from CERES, 711 Atlantic Avenue, Boston MA
02110, tel: 617/451-0927].
CERES is distinguished from other initiatives for corporate
environmental responsibility, in being (1) a successful model of
shareholder relations; (2) a leader in public accountability
through standardized environmental reporting; and (3) a catalyst
for significant and measurable environmental improvement within
firms.
Shareholders request the Corporation to endorse the CERES
Principles as a part of its commitment to be publicly accountable
for its environmental impact.
SUPPORTING STATEMENT
Many investors support this resolution. Those sponsoring similar
resolutions at various companies have portfolios totaling $75
billion. The number of public pension funds and foundations
supporting this resolution increase every year. The objectives
are: standards for environmental performance and disclosure;
methods for measuring progress toward these goals; and a format
for public reporting of progress. We believe this is comparable
to the European Community regulation for voluntary participation
in verified and publicly-reported eco-management and auditing,
and fully compatible with ISO 14000 certification.
Your vote FOR this resolution will encourage scrutiny of our
Company's environmental policies and reports and adherence to
standards upheld by management and stakeholders alike.
PAGE
<PAGE>
STATEMENT IN OPPOSITION TO THE STOCKHOLDER PROPOSAL
Thermo Electron is proud of its commitment to the
environment through its business practices and its products and
services. Many of its businesses provide environmentally
responsible products or offer services to aid other companies in
meeting their environmental commitments and responsibilities.
The Corporation believes that its environmental policy and
business practices are already consistent with the basic tenets
of the CERES Principles.
The Corporation's environmental policy has evolved over
several years. It was designed and is intended to reflect and
recognize the diverse businesses in which the Corporation engages
and the specific and varied environmental issues and
responsibilities which affect the Corporation's businesses. The
policy states the Corporation's objectives with respect to
environmental issues, sets forth the Corporation's environmental
expectations of its employees and explains the environmental
responsibilities of each business unit and its managers. The
Board of Directors believes that this environmental policy, as
adapted to the structure and specific circumstances of the
Corporation, is better suited to the Corporation and more
adaptable to changing responsibilities and concerns, than the
statement recommended by the stockholder proponents.
The Corporation is already subject to extensive
environmental regulation and disclosure requirements in the
jurisdictions in which it conducts its businesses. The
Corporation is concerned that the proliferation of independent
practices for environmental disclosure, such as that represented
by the CERES Principles in the United States, ISO 14001 for
European operations, and others, present confusing and
conflicting disclosures that are not applied to all companies.
In particular, the Corporation believes that adoption of the
CERES Principles would not further the Corporation's
environmental objectives but merely create an additional
administrative function that would burden the Corporation with
additional expenses and divert resources better employed to
creating better environmental products and services.
Management and the Board of Directors recommend a vote
AGAINST the stockholder proposal. Proxies solicited by the Board
of Directors will be voted AGAINST the proposal unless
Stockholders otherwise specify to the contrary on their proxy.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as
independent public accountants for fiscal 1997. Representatives
of that firm are expected to be present at the Meeting, will have
the opportunity to make a statement if they desire to do so and
will be available to respond to questions. Arthur Andersen LLP
has acted as independent public accountants for the Corporation
PAGE
<PAGE>
since 1960.
OTHER ACTION
Management is not aware at this time of any other matters
that will be presented for action at the Meeting. Should any such
matters be presented, the proxies grant power to the proxy
holders to vote shares represented by the proxies in the
discretion of such proxy holders.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the
1998 Annual Meeting of the Stockholders of the Corporation must
be received by the Corporation for inclusion in the proxy
statement and form of proxy relating to that meeting no later
than January 5, 1998.
SOLICITATION STATEMENT
The cost of this solicitation of proxies will be borne by
the Corporation. Solicitation will be made primarily by mail, but
regular employees of the Corporation may solicit proxies
personally, by telephone, facsimile transmission or telegram.
Brokers, nominees, custodians and fiduciaries are requested to
forward solicitation materials to obtain voting instructions from
beneficial owners of stock registered in their names, and the
Corporation will reimburse such parties for their reasonable
charges and expenses in connection therewith. In addition, the
Corporation has retained D.F. King & Co., Inc. to assist in the
solicitation of proxies at a cost not to exceed $9,000, plus
out-of-pocket expenses.
Waltham, Massachusetts
April 30, 1997
PAGE
<PAGE>
FORM OF PROXY
THERMO ELECTRON CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 3, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints George N. Hatsopoulos, John
N. Hatsopoulos and Jonathan W. Painter, and each of them, proxies
of the undersigned, each with power to appoint his substitute,
and hereby authorizes them to represent and vote, as designated
below, all the shares of common stock of Thermo Electron
Corporation held of record by the undersigned on April 7, 1997,
at the Annual Meeting of the Stockholders to be held at The Hyatt
Regency Hotel, Hilton Head, South Carolina, on Tuesday, June 3,
1997, at 4:00 p.m., and at any postponement or adjournment
thereof, as set forth on the reverse side hereof, and in their
discretion upon any other business that may properly come before
the meeting.
The Proxy will be voted as specified, or if no choice is
specified, FOR the election of the nominees names, FOR Proposal 2
and AGAINST Proposal 3, if presented a the meeting, and as said
proxies deem advisable on such other matters as may properly come
before the meeting.
(IMPORTANT - TO BE SIGNED AND DATED ON THE REVERSE SIDE.)
Please mark your
[ x ] votes as in this
example.
The Board of Directors recommends a bote For Propsals 1 and 2.
1. ELECTION OF DIRECTORS OF THE COMPANY (see reverse).
Nominees: John M. Albertine, Peter O. Crisp and Roger D.
Wellington.
FOR ALL NOMINEES [ ]
WITHHELD FROM ALL NOMINEES [ ]
______________________________________
FOR, except vote withheld for the following nominee(s):
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PAGE
<PAGE>
2. Approve an amendment to the Corporation's equity incentive
plan to increase the shares
available for grant by five million shares.
The Board of Directors recommends a vote AGAINST Proposal 3.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approve a stockholder proposal to request
the Corporation to endorse the CERES Principles.
(This proxy should be dated, signed by the shareholder(s) exactly
as his or her name appears hereon, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity
should so indicate. If shares are held by joint tenants or as
community property, both should sign.)
SIGNATURE(S) DATE
--------------------- -----------------
