THERMO ELECTRON CORP, DEF 14A, 1998-05-01

THERMO ELECTRON CORP
DEF 14A, 1998-05-01
MEASURING & CONTROLLING DEVICES, NEC

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

THERMO ELECTRON CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

THERMO ELECTRON CORPORATION
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):

[X] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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

________________________________________________________________________

(2) Aggregate number of securities to which transaction applies:

________________________________________________________________________

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

________________________________________________________________________

(4) Proposed maximum aggregate value of transaction:

________________________________________________________________________

(5) Total fee paid:

________________________________________________________________________

[_] Fee paid previously with preliminary materials.

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

(1) Amount Previously Paid:

________________________________________________________________________

(2) Form, Schedule or Registration Statement No.:

________________________________________________________________________

(3) Filing Party:

________________________________________________________________________

(4) Date Filed:

________________________________________________________________________

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THERMO ELECTRON CORPORATION

81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046

April 27, 1998
Dear Stockholder:

You are cordially invited to attend the 1998 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 January 3, 1998, 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 four directors, to approve a
proposal to increase the number of shares of common stock available for issuance
under the Corporation's employees' stock purchase 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

JOHN N. HATSOPOULOS
President and Chief Financial Officer

YOUR VOTE IS IMPORTANT.

PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD.
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THERMO ELECTRON CORPORATION

81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
April 27, 1998
To the Holders of the Common Stock of
THERMO ELECTRON CORPORATION

NOTICE OF ANNUAL MEETING

The 1998 Annual Meeting of the Stockholders of Thermo Electron Corporation
("Thermo Electron" or the "Corporation") will be held on Tuesday, June 2, 1998,
at 4:15 p.m. at The Hyatt Regency Scottsdale Resort at Gainey Ranch, 7500 East
Doubletree Ranch Road, Scottsdale, Arizona, 85258. The purpose of the meeting
is to consider and take action upon the following matters:

1. Election of four directors, comprising the class of directors to be
elected for a three-year term expiring in the year 2001.

2. A proposal recommended by the board of directors to increase by
750,000 the number of shares of common stock available for issuance
under the Corporation's employees' stock purchase plan.

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 board of directors, the
record date for the determination of the Stockholders entitled to notice of and
to vote at the meeting is April 3, 1998.

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

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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
1998 Annual Meeting of the Stockholders (the "Meeting") to be held on Tuesday,
June 2, 1998, at 4:15 p.m. at The Hyatt Regency Scottsdale Resort at Gainey
Ranch, Scottsdale, Arizona, 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 1, 1998.

VOTING PROCEDURES

The board of directors intends to present to the meeting the election of
four directors, comprising the class of directors to be elected for a three-year
term expiring in 2001, as well as one other matter: a proposal to increase the
number of shares of common stock available for issuance under the Corporation's
employees' stock purchase plan by 750,000 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 be voted only 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 employees' stock
purchase 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 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 3, 1998, consisted of
159,189,433 shares of Common Stock. Only Stockholders of record at the close of
business on April 3, 1998, are entitled to vote at the meeting. Each share is
entitled to one vote.

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-PROPOSAL 1-

ELECTION OF DIRECTORS

Four directors are to be elected at the Meeting, and Dr. Elias P.
Gyftopoulos, Mr. Frank Jungers, Dr. Frank E. Morris and Mr. Donald E. Noble are
listed below as nominees for the three-year term expiring at the Annual Meeting
of the Stockholders to be held in the year 2001. For purposes of this Meeting,
the board of directors has fixed the number of directors at twelve, divided into
three classes of four directors each. 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.

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NOMINEES FOR DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 2001
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ELIAS P. GYFTOPOULOS Dr. Gyftopoulos, 70, has been a director of the 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
Vision Corporation, Thermo Voltek Corp. and Trex Medical Corporation.
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FRANK JUNGERS Mr. Jungers, 71, 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.
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FRANK E. MORRIS Dr. Morris, 74, has been a director of the 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 and The Arbor Fund, and
is a director of Thermo Remediation Inc.
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DONALD E. NOBLE Mr. Noble, 83, has been a director of the Corporation since 1983. For more than 20
years, from 1959 to 1980, Mr. Noble served as the chief executive officer of
Rubbermaid, Incorporated, first with the title of president and then as chairman of
the board. Mr. Noble is also a director of Thermo Fibertek Inc., Thermo Power
Corporation, Thermo Sentron Inc. and Thermo TerraTech Inc.
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INCUMBENT DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 2000
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JOHN M. ALBERTINE Dr. Albertine, 53, has been a director of the Corporation since 1986. Dr.
Albertine serves as chairman of the board and chief executive officer of Albertine
Enterprises, Inc., an economic- and public-policy consulting and full-service
mergers and acquisitions firm he founded in 1990. Dr. Albertine is also a director
of American Precision Industries, Inc., Intermagnetics General Corp. and U.S. Cast
Products Inc.
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PETER O. CRISP Mr. Crisp, 65, has been a director of the Corporation since 1974. Mr. Crisp was a
general partner of Venrock Associates, a venture capital investment firm, for more
than five years until his retirement in September 1997. Mr. Crisp is also a
director of American Superconductor Corporation, Evans & Sutherland Computer
Corporation, Thermedics Inc., Thermo Power Corporation, ThermoTrex Corporation and
United States Trust Corporation.
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ROGER D. WELLINGTON Mr. Wellington, 71, has been a director of the Corporation since 1986. Mr.
Wellington serves as the president and chief executive officer of Wellington
Consultants, Inc. and of Wellington Associates Inc., international business
consulting firms he founded in 1994 and 1989, respectively. Prior to 1989, Mr.
Wellington served as chairman of the board of Augat Inc., a manufacturer of
electromechanical components 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 Photoelectron
Corporation.
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RICHARD F. SYRON Dr. Syron, 54, has been a director of the Corporation since September 1997. Since
April 1994, Dr. Syron has been the chairman and chief executive officer of the
American Stock Exchange Inc. From January 1989 through April 1994, he was the
president and chief executive officer of the Federal Reserve Bank of Boston. Prior
to that time, he held a variety of senior positions with the Federal Home Loan Bank
of Boston, the Federal Reserve Bank of Boston, the Board of Governors of the
Federal Reserve System, and the U.S. Department of Treasury. Dr. Syron is also a
director of Dreyfus Corporation and The John Hancock Corporation.
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INCUMBENT DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 1999
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JOHN N. HATSOPOULOS Mr. Hatsopoulos, 63, has been a director of the Corporation since September 1997.
He has been the president of the Corporation since January 1997 and its chief
financial officer since 1988. He was an executive vice president from 1986 to
1997. He is also senior vice president and chief financial officer of all of the
Corporation's majority-owned publicly held direct and indirect subsidiaries. Mr.
Hatsopoulos is also a director of LOIS/USA Inc., ONIX Systems Inc., Thermedics
Inc., Thermo Ecotek Corporation, Thermo Fibertek Inc., Thermo Instrument Systems
Inc., Thermo Power Corporation, Thermo TerraTech Inc. and ThermoTrex Corporation.
Mr. Hatsopoulos is the brother of Dr. George N. Hatsopoulos, a director, chairman
of the board and chief executive officer of the Corporation.
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GEORGE N. HATSOPOULOS Dr. Hatsopoulos, 71, has been a director, the chairman of the board and chief
executive officer of the Corporation since he founded the Corporation in 1956.
Until January 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, a director, the president and the chief
financial officer of the Corporation.
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ROBERT A. MCCABE Mr. McCabe, 63, has been a director of the Corporation since 1962. He has served as
president of Pilot Capital Corporation, which is engaged in private investments and
provides acquisition services, since 1987. Prior to that time Mr. McCabe was a
managing director of Lehman Brothers Inc., an investment banking firm. Mr. McCabe
is also a director of Borg-Warner Security Corporation, Church & Dwight Company,
Morrison-Knudsen Corporation and Thermo Optek Corporation.
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HUTHAM S. OLAYAN Ms. Olayan, 44, has been a director of the Corporation since 1987. She has served
since 1995 as president and a director of Olayan America Corporation, a member of
the Olayan Group, and as president and a director of Competrol Real Estate Limited,
another member of the Olayan Group, from 1986 until its merger into Olayan America
Corporation in 1997. The surviving company is engaged in private investments,
including real estate, and advisory services. In addition, from 1985 to 1994, Ms.
Olayan served as president and a director of Crescent Diversified Limited, another
member of the Olayan Group engaged in private investments. Ms. Olayan is also a
director of ONIX Systems Inc. and Trex Medical Corporation.
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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, approves
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, and the human resources committee met eight times
during fiscal 1997. 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
1997, except Mr. Jungers, who attended 73% of such meetings.

COMPENSATION OF DIRECTORS

CASH COMPENSATION

Directors who are not employees of the Corporation or of 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 and Mr. J. Hatsopoulos,
who are full-time employees of the Corporation, do not receive any cash
compensation from the Corporation for their service as directors. Directors are
also reimbursed for out-of-pocket expenses and in some instances for travel time
incurred in attending such meetings.

DEFERRED COMPENSATION PLAN FOR DIRECTORS

Under the Corporation's deferred compensation plan for directors (the
"Deferred Compensation Plan"), a director has the right to defer receipt of his
cash fees until he ceases to serve as a director, dies or retires from his
principal occupation. In the event of a change in control or proposed change in
control of the Corporation that is not approved by the board of directors,
deferred amounts become payable immediately. Either of the following is deemed
to be a change of control: (a) the acquisition, without the prior approval of
the board of directors, directly or indirectly, by any person of 50% or more of
the outstanding Common Stock; or (b) the failure of the persons serving

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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, 1998, deferred units equal to 310,134 shares of Common
Stock were accumulated under the Deferred Compensation Plan.

STOCK-BASED COMPENSATION

DIRECTORS STOCK-OPTION PLAN. The Corporation's directors stock option plan
(the "Directors Plan"), provides for two types of grants 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, both upon the initial spinout and at five-year intervals thereafter.

Under the first type of grant pursuant to the Directors Plan, outside
directors receive an annual grant of options to purchase 1,000 shares of Common
Stock at the close of business on the date of each Annual Meeting of the
Stockholders of the Corporation. Options evidencing annual grants may be
exercised at any time from and after the six-month anniversary of the grant date
of the option and prior to the expiration of the option on the third anniversary
of the grant date. Shares acquired upon exercise of the options are subject to
repurchase by the Corporation at the exercise price if the recipient ceases to
serve as a director of the Corporation or any other Thermo Electron company
prior to the first anniversary of the grant date.

Under the second type of grant pursuant to the Directors Plan, outside
directors automatically receive a grant of 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, both upon the initial spinout and at five-year intervals thereafter.
Outside directors receive options to purchase 1,500 shares of common stock in
majority-owned subsidiaries that are directly owned by the Corporation and 1,000
shares of common stock in 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 at 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
the 1998 Annual Meeting of the Stockholders, each outside director will be
granted options to purchase 1,000 shares of the common stock of each of (i)
Thermo Vision Corporation, a majority-owned subsidiary of Thermo Instrument
Systems Inc. that was spun out in December 1997, (ii) ONIX Systems Inc., a
majority-owned subsidiary of Thermo Instrument Systems Inc. that was spun out in
September 1997, (iii) Trex Communications Corporation, a majority-owned
subsidiary of ThermoTrex Corporation that was spun out in September 1997, and
(iv) Thermo Trilogy Corporation, a majority-owned subsidiary of Thermo Ecotek
Corporation that was spun out in December 1997. Also at the 1998 Annual Meeting
of the Stockholders, each outside director will be granted options to purchase
1,500 shares of the common stock of each of (i) Thermo Fibertek Inc., a
majority-owned subsidiary of the Corporation and (ii) Thermo Trex, a majority-
owned subsidiary of the Corporation.

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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 immediately preceding and including the
date of grant, or, if the shares are not then traded, at the last price per
share paid by third parties in an arms-length transaction prior to the option
grant. As of March 1, 1998, options to purchase 93,375 shares of Common Stock
were outstanding under the Directors Plan, no options had lapsed or been
exercised, and options to purchase 581,625 shares of Common Stock were available
for future grant.

OTHER STOCK-BASED COMPENSATION. In 1997, options to purchase 10,000 shares
of the Common Stock at an exercise price of $39.39 per share were granted to Dr.
Syron in connection with his appointment as a director. These options may be
exercised at any time from and after the six-month anniversary of the grant date
and prior to the expiration of the options on the twelfth anniversary of the
grant date. Shares acquired upon exercise of the options are subject to
restrictions on transfer and the right of the Corporation to repurchase such
shares at the exercise price if Dr. Syron ceases to serve as a director of the
Corporation or any other Thermo Electron company. The restrictions and
repurchase rights lapse or are deemed to have lapsed 10% per year, starting with
the first anniversary of the grant date, provided Dr. Syron has continuously
served as a director of the Corporation or any other Thermo Electron company
since the grant date.

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. The chief executive officer of the
Corporation is 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, 1998, 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
Information Solutions Inc., a majority-owned subsidiary of Thermo Coleman
Corporation, a majority-owned subsidiary of the Corporation, (ii) Thermo Ecotek
Corporation and Thermo Trilogy Corporation, a majority-owned subsidiary of
Thermo Ecotek Corporation, (iii) Thermo Fibertek Inc. and Thermo Fibergen Inc.,
a majority-owned subsidiary of Thermo Fibertek Inc., (iv) Thermo Power
Corporation and ThermoLyte Corporation, a majority-owned subsidiary of Thermo
Power Corporation, (v) Thermo TerraTech Inc. and The Randers Group Incorporated,
Thermo EuroTech N.V. and Thermo Remediation Inc., each a majority-owned
subsidiary of Thermo TerraTech Inc., (vi) Thermedics Inc. and Thermedics
Detection Inc., Thermo Cardiosystems Inc., Thermo Sentron Inc. and Thermo Voltek
Corp., each a majority-owned subsidiary of Thermedics Inc., (vii) ThermoTrex
Corporation and ThermoLase Corporation, Trex Medical Corporation and Trex
Communications Corporation, each a majority-owned subsidiary of ThermoTrex
Corporation, and (viii) Thermo Instrument Systems Inc. and Metrika Systems
Corporation, ONIX Systems Inc., Thermo BioAnalysis Corporation, Thermo Optek
Corporation, ThermoQuest Corporation, ThermoSpectra Corporation and Thermo
Vision 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 Thermo Information Solutions
Inc., ThermoLyte Corporation, Thermo EuroTech N.V., Thermo Trilogy Corporation,
and Trex Communications Corporation, which are privately held. In addition,

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the following table sets forth the beneficial ownership of Common Stock, as of
March 1, 1998, with respect to each person who was known by the Corporation to
own beneficially more than 5% of the outstanding shares of Common Stock.

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.

7
<PAGE>

THERMO THERMO THERMO THERMO THERMO
ELECTRON INFORMATION ECOTEK TRILOGY FIBERTEK
NAME CORPORATION SOLUTIONS CORPORATION CORPORATION INC.
(1) (2) INC. (3) (4) (5) (6)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Putnam Investments, Inc. (31) 10,700,277 N/A N/A N/A N/A
FMR Corporation (32) 9,676,730 N/A N/A N/A N/A
John M. Albertine 41,174 - 2,250 - 6,750
Peter O. Crisp 100,641 - 5,191 - 6,750
Elias P. Gyftopoulos 72,067 - 2,250 - 6,750
George N. Hatsopoulos 3,423,423 - 25,575 - 188,484
John N. Hatsopoulos 681,072 - 35,569 - 78,320
Frank Jungers 246,754 2,000 44,789 3,000 7,875
Robert A. McCabe 48,515 12,000 2,250 18,000 6,750
Frank E. Morris 25,301 - 2,250 - 6,750
Donald E. Noble 56,651 3,000 2,250 2,500 117,706
Hutham S. Olayan 25,852 - 2,250 6,060 6,750
William A. Rainville 239,893 - 4,467 - 759,086
Arvin H. Smith 519,038 - 6,000 - 90,000
Richard F. Syron 10,303 - - - -
Roger D. Wellington 36,062 - 2,250 8,000 15,750
John W. Wood Jr. 272,157 - 3,321 - 9,000
All directors and current executive
officers as a group (17 persons) 6,285,374 17,000 151,072 37,260 1,406,221

<CAPTION>
Thermo Thermo Thermo
Fibergen Power ThermoLyte TerraTech
Name Inc. Corporation Corporation Inc.
(1) (7) (8) (9) (10)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Putnam Investments, Inc. (31) N/A N/A N/A N/A
FMR Corporation (32) N/A N/A N/A N/A
John M. Albertine 1,000 3,000 - 1,500
Peter O. Crisp 1,000 36,354 - 1,500
Elias P. Gyftopoulos 1,000 6,925 - 3,040
George N. Hatsopoulos 20,000 54,282 - 55,471
John N. Hatsopoulos 20,000 59,753 - 60,357
Frank Jungers 2,500 3,000 1,500 1,500
Robert A. McCabe 1,000 11,629 - 3,660
Frank E. Morris 1,000 3,000 - 1,500
Donald E. Noble 4,500 22,721 1,000 51,436
Hutham S. Olayan 2,000 3,000 - 1,500
William A. Rainville 41,500 - - 60,000
Arvin H. Smith 10,000 7,969 - 36,997
Richard F. Syron - - - -
Roger D. Wellington 1,000 6,425 - 2,500
John W. Wood Jr. 10,000 - - -
All directors and current executive
officers as a group (17 persons) 123,500 242,012 2,500 314,493

</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
THE RANDERS THERMO THERMO THERMEDICS
GROUP EURO TECH REMEDIATION THERMEDICS DETECTION
NAME INC. B.V. CORPORATION INC. INC.
(1) (11) (12) (13) (14) (15)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Putnam Investments, Inc. (31) N/A N/A N/A N/A N/A
FMR Corporation (32) N/A N/A N/A N/A N/A
John M. Albertine - - 4,500 4,500 1,000
Peter O. Crisp - - 4,500 35,602 1,500
Elias P. Gyftopoulos - - 28,600 10,048 1,600
George N. Hatsopoulos 240,000 - 9,000 63,681 21,197
John N. Hatsopoulos 240,000 - 61,282 64,630 21,262
Frank Jungers - - 15,000 9,050 1,455
Robert A. McCabe - - 4,500 6,998 10,000
Frank E. Morris - - 27,823 4,500 1,000
Donald E. Noble - - 10,500 14,173 1,968
Hutham S. Olayan - - 4,500 4,500 1,000
William A. Rainville 120,000 - 24,000 - 10,000
Arvin H. Smith 120,000 - 2,400 91,290 10,000
Richard F. Syron - - - - -
Roger D. Wellington - - 4,500 4,500 1,000
John W. Wood Jr. 120,000 - - 188,406 47,854
All directors and current executive
officers as a group (17 persons) 900,000 - 243,436 540,382 137,936

THERMO THERMO THERMO
CARDIOSYSTEMS SENTRON VOLTEK THERMOTREX THERMOLASE
NAME INC. INC. CORP. CORPORATION CORPORATION
(1) (16) (17) (18) (19) (20)
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Putnam Investments, Inc. (31) N/A N/A N/A N/A N/A
FMR Corporation (32) N/A N/A N/A N/A N/A
John M. Albertine 9,250 1,000 1,500 4,500 2,000
Peter O. Crisp 24,750 1,500 2,250 44,620 57,443
Elias P. Gyftopoulos 15,500 1,000 5,750 4,500 61,400
George N. Hatsopoulos 11,599 17,000 - 44,889 31,125
John N. Hatsopoulos 432 41,900 7,668 23,844 42,329
Frank Jungers 13,250 1,000 9,000 11,000 3,300
Robert A. McCabe 12,250 3,000 3,300 10,000 3,145
Frank E. Morris 12,250 1,000 1,500 4,500 2,000
Donald E. Noble 12,250 17,448 1,500 4,500 6,000
Hutham S. Olayan 12,250 1,000 1,500 4,500 2,000
William A. Rainville - 7,000 - 1,797 10,000
Arvin H. Smith 30,000 7,000 - 1,967 10,000
Richard F. Syron - - - - -
Roger D. Wellington 12,250 1,000 1,500 4,500 2,000
John W. Wood Jr. 60,332 33,400 96,971 640 10,000
All directors and current executive
officers as a group (17 persons) 231,163 141,248 142,439 180,673 327,242

</TABLE>

9
<PAGE>

TREX TREX THERMO METRIKA ONIX
MEDICAL COMMUNICATIONS INSTRUMENT SYSTEMS SYSTEMS
NAME CORPORATION CORPORATION SYSTEMS INC. CORPORATION INC.
(1) (21) (22) (23) (24) (25)
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Putnam Investments, Inc. (31) N/A N/A N/A N/A N/A
FMR Corporation (32) N/A N/A N/A N/A N/A
John M. Albertine 1,000 - 2,343 9,333 -
Peter O. Crisp 13,845 - 22,115 1,000 -
Elias P. Gyftopoulos 41,000 - 58,766 1,000 -
George N. Hatsopoulos 41,188 - 179,141 30,000 -
John N. Hatsopoulos 42,929 - 84,226 25,000 -
Frank Jungers 3,850 - 52,613 3,000 -
Robert A. McCabe 7,050 12,500 65,091 6,000 7,333
Frank E. Morris 1,000 - 2,343 1,000 -
Donald E. Noble 1,000 6,250 68,357 2,500 -
Hutham S. Olayan 45,850 - 2,343 1,000 -
William A. Rainville 20,000 - - 10,000 -
Arvin H. Smith 20,000 - 539,583 10,000 4,000
Richard F. Syron - - - - -
Roger D. Wellington 1,000 - 6,093 1,000 -
John W. Wood Jr. 20,000 - 19,509 10,000 -
All directors and current executive
officers as a group (17 persons) 273,312 18,750 1,168,683 115,333 11,333

<CAPTION>
THERMO THERMO THERMO THERMO- THERMO
BIOANALYSIS OPTEK QUEST SPECTRA VISION
NAME CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION
(1) (26) (27) (28) (29) (30)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Putnam Investments, Inc. (31) N/A N/A N/A N/A N/A
FMR Corporation (32) N/A N/A N/A N/A N/A
John M. Albertine 1,000 1,000 1,000 1,000 -
Peter O. Crisp 1,000 1,000 1,000 1,000 -
Elias P. Gyftopoulos 15,000 1,000 1,000 21,000 -
George N. Hatsopoulos 27,300 113,100 92,600 24,750 23,800
John N. Hatsopoulos 37,200 132,800 99,500 24,400 28,600
Frank Jungers 5,500 11,000 47,146 5,500 1,400
Robert A. McCabe 3,000 70,903 1,000 1,500 -
Frank E. Morris 1,000 1,000 1,000 1,000 -
Donald E. Noble 5,000 1,000 2,300 4,000 -
Hutham S. Olayan 1,000 1,000 1,000 1,000 -
William A. Rainville 6,000 15,000 15,000 10,000 7,500
Arvin H. Smith 39,000 98,000 90,000 20,000 16,120
Richard F. Syron - - - - -
Roger D. Wellington 1,000 1,000 1,000 1,000 -
John W. Wood Jr. 6,000 15,000 15,000 5,000 7,500
All directors and current executive
officers as a group (17 persons) 157,000 477,303 380,546 130,650 93,020

</TABLE>

10
<PAGE>

(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) 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, Dr. Syron, Mr. Wellington, Mr. Wood and all
directors and current executive officers as a group include 10,375, 10,375,
10,375, 1,649,500, 615,435, 10,375, 10,375, 10,375, 10,375, 10,375,
178,674, 228,411, 10,000, 10,375, 230,458 and 3,223,140 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of March 1, 1998, 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 2,266, 2,036, 1,717 and 10,095 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, Dr.
Syron, Mr. Wellington and all directors and current executive officers as a
group include 30,799, 45,625, 80,427, 34,725, 11,511, 42,861, 15,477, 303,
23,157 and 284,885 full 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 which his
spouse is a trustee, 39,937 shares held by a family trust of which his
spouse is the trustee, 4,000 shares held by a second family trust of which
Dr. Elias P. Gyftopoulos is a trustee and 153 shares allocated to his
spouse's account maintained pursuant to the ESOP. Shares beneficially
owned by Dr. G. Hatsopoulos also include 50,000 shares that a family trust,
of which Dr. G. Hatsopoulos' spouse is the trustee, has the right to
acquire within 60 days of March 1, 1998, through the exercise of stock
options. Shares beneficially owned by Mr. Jungers include 4,500 shares
held by Mr. Jungers' spouse. Shares beneficially owned by Dr. Morris
include 3,415 shares held by Dr. Morris's spouse. Shares beneficially
owned by Ms. Olayan do not include 4,865,300 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 2.1% of
the Common Stock outstanding as of March 1, 1998, 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 3.9% of the Common Stock outstanding as of March 1,
1998.

(3) Shares of the common stock of Thermo Information Solutions Inc.
beneficially owned by Mr. McCabe include 12,000 shares held by a trust of
which he and members of his family are trustees. The directors and
executive officers did not individually or as a group beneficially own more
than 1% of the Thermo Information Solutions Inc. common stock outstanding
as of March 1, 1998.

(4) Shares of the common stock of Thermo Ecotek Corporation beneficially owned
by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Jungers, Mr. McCabe, Dr. Morris, Mr. Noble, Ms. Olayan,
Mr. Wellington and all directors and current executive officers as a group
include 2,250, 2,250, 2,250, 15,000, 13,257, 39,500, 2,250, 2,250, 2,250,
2,250, 2,250 and 93,257 shares, respectively, that such person or members
of the group have the right to acquire within 60 days of March 1, 1998,
through the exercise of stock options. Shares beneficially owned by Mr.
Jungers include 500 shares held by Mr. Jungers' spouse. The directors and
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, 1998.

(5) Shares of the common stock of Thermo Trilogy Corporation beneficially owned
by Mr. McCabe include 18,000 shares held by a trust of which he and members
of his family are trustees. Shares beneficially owned by Ms. Olayan do not
include 60,000 shares owned by Crescent International Holdings Ltd., a
member of the Olayan Group which is indirectly controlled by Suliman S.
Olayan, Ms. Olayan's father.

11
<PAGE>

Ms. Olayan disclaims beneficial ownership of the shares owned by Crescent
International Holdings Ltd. The directors and executive officers did not
individually or as a group beneficially own more than 1% of the Thermo
Trilogy Corporation common stock outstanding as of March 1, 1998.

(6) 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,
57,600, 6,750, 6,750, 6,750, 97,850, 6,750, 735,000, 90,000, 6,750, 9,000
and 1,284,610 shares, respectively, that such person or members of the
group have the right to acquire within 60 days of March 1, 1998, through
the exercise of stock options. Shares beneficially owned by Mr. Noble and
all directors and current executive officers as a group include 7,171
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.
Except for Mr. Rainville, who beneficially owned 1.2% of the common stock
of Thermo Fibertek Inc. outstanding as of March 1, 1998, no director or
executive officer beneficially owned more than 1% of the Thermo Fibertek
Inc. common stock outstanding as of March 1, 1998; all directors and
current executive officers as a group beneficially owned 2.3% of the Thermo
Fibertek Inc. common stock outstanding as of such date.

(7) Shares of the common stock of Thermo Fibergen 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, 1,000, 1,000, 20,000,
20,000, 1,000, 1,000, 1,000, 1,500, 1,000, 40,000, 10,000, 1,000, 10,000
and 116,500 shares, respectively, that such person or members of the group
have the right to acquire within 60 days of March 1, 1998, through the
exercise of stock options. No director or executive officer beneficially
owned more than 1% of the Thermo Fibergen Inc. common stock outstanding as
of March 1, 1998; all directors and current executive officers as a group
beneficially owned less than 1% of the Thermo Fibergen Inc. common stock
outstanding as of such date. In addition, Mr. Jungers, Mr. Noble, Mr.
Rainville and all directors and current executive officers as a group
beneficially owned 1,500, 3,000, 1,500 and 6,000 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 times in the future at a price of $12.75 per share.

(8) 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, 7,600, 3,000, 40,000, 40,000, 3,000, 3,000, 3,000, 8,200,
3,000, 3,000 and 125,800 shares, respectively, that such person or members
of the group have the right to acquire within 60 days of March 1, 1998,
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 10,661, 7,096 and 17,757 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. No
director or executive officer beneficially owned more than 1% of the Thermo
Power Corporation common stock outstanding as of March 1, 1998; all
directors and current executive officers as a group beneficially owned 2.0%
of the Thermo Power Corporation common stock outstanding as of such date.

(9) Shares of the common stock of ThermoLyte Corporation beneficially owned by
Ms. Olayan do not include 25,000 shares owned by Crescent International
Holdings Ltd., a member of the Olayan Group which is indirectly controlled
by Suliman S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims beneficial
ownership of the shares owned by Crescent International Holdings Ltd. 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 less than 1%
of the ThermoLyte Corporation common stock outstanding as of March 1, 1998.

12
<PAGE>

(10) 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, 9,200, 1,500, 60,000, 35,000, 1,500 and 203,200
shares, respectively, that such person or members of the group have the
right to acquire within 60 days of March 1, 1998, 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 309, 315, 265 and 1,518 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 19,196 shares
allocated to 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, 1998, 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. No director or executive officer
beneficially owned more than 1% of the Thermo TerraTech Inc. common stock
outstanding as of March 1, 1998; all directors and current executive
officers as a group beneficially owned 1.5% of the Thermo TerraTech Inc.
common stock as of such date.

(11) Shares of the common stock of The Randers Group Incorporated beneficially
owned by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Rainville, Mr. Smith,
Mr. Wood and all directors and current executive officers as group include
240,000, 240,000, 120,000, 120,000, 120,000 and 900,000 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of March 1, 1998, through the exercise of stock
options. Except for Dr. G. Hatsopoulos and Mr. J. Hatsopoulos, each of
whom beneficially owned 1.7% of The Randers Group Incorporated common stock
outstanding as of March 1, 1998, no director or executive officer
beneficially owned more than 1% of The Randers Group Incorporated common
stock outstanding as of March 1, 1998; all directors and current executive
officers as a group beneficially own 6.3% of The Randers Group Incorporated
common stock outstanding as of March 1, 1998.

(12) The directors and executive officers did not beneficially own any of the
Thermo EuroTech N.V. common stock as of March 1, 1998.

(13) 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, 1998, through the exercise of
stock options. Shares beneficially owned by Dr. Morris and all directors
and current executive officers as a group include 3,373 shares allocated to
Dr. Morris's account maintained pursuant to Thermo Remediation Inc.'s
deferred compensation plan for directors. No director or executive officer
beneficially owned more than 1% of the Thermo Remediation Inc. common stock
outstanding as of March 1, 1998; all directors and current executive
officers as a group beneficially owned 1.9% of the Thermo Remediation Inc.
common stock outstanding as of such date.

(14) 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, 10,050, 4,500, 50,000, 50,000, 4,500,
4,500, 4,500, 4,500, 4,500, 82,500, 4,500, 130,700 and 378,250 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of March 1, 1998, 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 1,635, 1,737, 1,445 and 8,063 full shares, respectively,
allocated to their respective accounts maintained pursuant to the
Corporation's ESOP. Shares beneficially owned by Mr. Crisp and all
directors

13
<PAGE>

and current executive officers as a group include 7,447 shares allocated to
Mr. Crisp's account maintained pursuant to Thermedics 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 1,550 shares held by Mr.
Jungers' spouse. Shares beneficially owned by Mr. Wood include 2,600 shares
held in custodial accounts for the benefit of two minor children. No
director or executive officer beneficially owned more than 1% of the common
stock of Thermedics Inc. outstanding as of March 1, 1998; all directors and
current executive officers as a group beneficially owned 1.5% of the
Thermedics Inc. common stock outstanding as of such date.

(15) Shares of the common stock of Thermedics Detection 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, 1,500, 1,000, 20,000,
20,000, 1,000, 1,000, 1,000, 1,000, 1,000, 10,000, 10,000, 1,000, 43,333
and 119,833 shares, respectively, that such person or members of the group
have the right to acquire within 60 days of March 1, 1998, through the
exercise of stock options. Shares beneficially owned by Dr. G. Hatsopoulos
include 57 shares held by his spouse. Shares beneficially owned by Mr.
Jungers include 155 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 trustees. No director or executive officer beneficially
owned more than 1% of the Thermedics Detection Inc. common stock
outstanding as of March 1, 1998; the directors and current executive
officers as a group beneficially owned 1.03% of the Thermedics Detection
Inc. common stock outstanding as of March 1, 1998.

(16) Shares of the common stock of Thermo Cardiosystems Inc. beneficially owned
by Dr. Albertine, Mr. Crisp, Dr. Gyftopoulos, Mr. Jungers, Mr. McCabe, Dr.
Morris, Mr. Noble, Ms. Olayan, Mr. Smith, Mr. Wellington, Mr. Wood and all
directors and current executive officers as a group include 1,000, 24,750,
15,500, 12,250, 12,250, 12,250, 12,250, 12,250, 30,000, 12,250, 53,450 and
198,200 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of March 1, 1998, through the exercise
of stock options. Shares beneficially owned by Mr. Wood include 1,122
shares held in custodial accounts for the benefit of two minor children.
The directors and executive officers did not individually or as a group
beneficially own more than 1% of the Thermo Cardiosystems Inc. common stock
outstanding as of March 1, 1998.

(17) 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, 1,500, 1,000, 15,000,
15,000, 1,000, 1,000, 1,000, 15,000, 1,000, 7,000, 7,000, 1,000, 30,400 and
104,900 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of March 1, 1998, through the exercise
of stock options. Shares beneficially owned by Mr. Noble and all directors
and current executive officers as a group include 1,148 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, 1998; all directors and current executive
officers as a group beneficially owned 1.4% of the Thermo Sentron Inc.
common stock outstanding as of such date.

(18) Shares of the common stock of Thermo Voltek Corp. 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 1,500, 2,250, 4,750, 1,500,
1,500, 1,500, 1,500, 1,500, 1,500, 82,350 and 98,050 shares, respectively,
that such persons or members of the group have the right to acquire within
60 days of March 1, 1998, through the exercise of stock options. Except for
Mr. Wood, who beneficially owned 1.1% of the Thermo Voltek Corp. common
stock outstanding as of March 1, 1998, no director or executive officer
beneficially owned more than 1% of the Thermo Voltek Corp. common stock
outstanding as of March 1, 1998; all directors and current executive
officers beneficially owned 1.6% of the Thermo Voltek Corp. common stock
outstanding as of such date.

14
<PAGE>

(19) 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. Wellington and all directors and current executive officers as a group
include 4,500, 28,800, 4,500, 30,000, 21,000, 4,500, 4,500, 4,500, 4,500,
4,500, 4,500 and 120,800 shares, respectively, that such person or members
of the group have the right to acquire within 60 days of March 1, 1998,
through the exercise of stock options. Shares beneficially owned by Mr.
Crisp and all directors and current executive officers as a group include
2,376 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. Shares beneficially owned by Ms. Olayan do not include 10,000
shares owned by Crescent Growth Fund Ltd., a member of the Olayan Group
which is indirectly controlled by 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 ThermoTrex
Corporation common stock outstanding as of March 1, 1998.

(20) 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, 39,400, 2,000, 2,000, 2,000, 2,000, 2,000, 10,000, 10,000, 2,000,
10,000 and 273,108 shares, respectively, that such person or members of the
group have the right to acquire within 60 days of March 1, 1998, through
the exercise of stock options. Shares beneficially owned by Dr. G.
Hatsopoulos include 32 shares held by his spouse. Shares beneficially owned
by Ms. Olayan do not include 10,000 shares owned by Crescent Growth Fund
Ltd., a member of the Olayan Group which is indirectly controlled by
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 ThermoLase Corporation common stock
outstanding as of March 1, 1998.

(21) 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, 1,500, 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 237,500 shares, respectively, that such person or members of the group
have the right to acquire within 60 days of March 1, 1998, through the
exercise of stock options. Shares beneficially owned by Ms. Olayan and all
directors and current executive officers as a group include 850 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 327,000
shares owned by Crescent International Holdings Ltd., a member of the
Olayan Group which is indirectly controlled by Suliman S. Olayan, Ms.
Olayan's father. Ms. Olayan disclaims beneficial ownership of the shares
owned by Crescent International Holdings Ltd. 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, 1998.

(22) Shares of the common stock of Trex Communications Corporation beneficially
owned by Mr. McCabe include 12,500 shares held by a trust of which he and
members of his family are trustees. Shares beneficially owned by Ms. Olayan
do not include 50,000 shares owned by Crescent International Holdings Ltd.,
a member of the Olayan Group which is indirectly controlled by Suliman S.
Olayan, Ms. Olayan's father. Ms. Olayan disclaims beneficial ownership of
the shares owned by Crescent International Holdings Ltd. The directors and
current executive officers did not individually or as a group beneficially
own more than 1% of the Trex Communications Corporation common stock
outstanding as of March 1, 1998.

(23) The number of shares of the common stock of Thermo Instrument Systems Inc.
reported in the table reflects a five-for-four stock split distributed in
October 1997 in the form of a 25% stock dividend. Shares of the common
stock of Thermo Instrument Systems Inc. beneficially owned by Dr.
Albertine, Mr. Crisp, Dr. Gyftopoulos, Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos, Mr. Jungers, Mr. McCabe, Dr. Morris,

15
<PAGE>

Mr. Noble, Ms. Olayan, Mr. Smith, Mr. Wellington and all directors and
current executive officers as a group include 2,343, 2,343, 18,075,
117,187, 70,312, 17,257, 13,737, 2,343, 7,614, 2,343, 292,968, 2,343 and
573,473 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of March 1, 1998, 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 598, 661, 663 and 3,027 full shares, respectively,
allocated to accounts maintained pursuant to the Corporation's ESOP. Shares
beneficially owned by Dr. G. Hatsopoulos include 26,710 shares held by his
spouse and 63 shares allocated to his spouse's account 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 Mr. Jungers
include 636 shares held by his spouse. Shares beneficially owned by Mr.
Wood include 19,509 shares held in custodial accounts for the benefit of
two minor 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, 1998.

(24) Shares of the common stock of Metrika Systems Corporation have been
adjusted to reflect a one-for-two reverse stock split effected in May 1997.
Shares of the common stock of Metrika Systems 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 group include 1,000, 1,000, 1,000, 30,000,
10,000, 1,000, 1,000, 1,000, 1,000, 1,000, 10,000, 10,000, 1,000, 10,000
and 83,500 shares, respectively, that such person or members of the group
have the right to acquire within 60 days of March 1, 1998, through the
exercise of stock options. Shares beneficially owned by Mr. McCabe include
5,000 shares held in a trust of which he and members of his family are
trustees. No director or executive officer beneficially owned more than 1%
of the common stock of Metrika Systems Corporation outstanding as of March
1, 1998; all directors and current executive officers as a group
beneficially owned 1.4% of the Metrika Systems Corporation common stock
outstanding as of March 1, 1998.

(25) Shares of the common stock of ONIX Systems Inc. beneficially owned by Mr.
McCabe include 7,333 shares held by a trust of which he and members of his
family are trustees. Shares of ONIX Systems Inc. beneficially owned by Ms.
Olayan do not include 16,666 shares owned by Crescent International
Holdings Ltd., a member of the Olayan Group which is indirectly controlled
by Suliman S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims beneficial
ownership of the shares owned by Crescent International Holdings Ltd.
Shares beneficially owned by Mr. Smith include 4,000 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 ONIX Systems Inc. common
stock outstanding as of March 1, 1998.

(26) 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, 17,300,
17,200, 1,500, 1,500, 1,000, 1,000, 1,000, 6,000, 20,000, 1,000, 6,000 and
95,500 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of March 1, 1998, 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, 1998; 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.

(27) Shares of the common stock of Thermo Optek 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, 93,100,
92,800, 1,000, 45,000, 1,000, 1,000, 1,000, 15,000, 90,000, 1,000, 15,000
and 370,900 shares, respectively, that such person or members of the group
have the right to acquire within 60 days of March 1, 1998, through the
exercise of stock options. Shares beneficially owned by Mr. McCabe include
5,000 shares held by a trust of which he and members

16
<PAGE>

of his family are trustees, 7,171 shares issuable upon conversion of
$100,000 in principal amount of the 5% convertible subordinated debenture
due 2000 issued by Thermo Optek Corporation and 732 full shares allocated
to Mr. McCabe's account maintained pursuant to Thermo Optek Corporation's
deferred compensation plan for directors. Shares beneficially owned by Ms.
Olayan do not include 20,000 shares owned by Crescent Growth Fund Ltd., a
member of the Olayan Group 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, 1998.

(28) 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, 92,600,
92,400, 45,000, 1,000, 1,000, 1,000, 1,000, 15,000, 90,000, 1,000, 15,000
and 370,000 shares, respectively, that such person or members of the group
have the right to acquire within 60 days of March 1, 1998, through the
exercise of stock options. Shares beneficially owned by Mr. Jungers and
all directors and current executive officers as a group include 1,146 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, 1998.

(29) 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, 24,750,
24,400, 1,500, 1,500, 1,000, 1,000, 1,000, 10,000, 20,000, 1,000, 3,000 and
118,650 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of March 1, 1998, through the exercise
of stock options. The directors and current executive officers did not
individually or as a group beneficially own more than 1% of the common
stock of ThermoSpectra Corporation outstanding as of March 1, 1998.

(30) Shares of the common stock of Thermo Vision Corporation beneficially owned
by Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Rainville, Mr. Smith, Mr.
Wood and all directors and current executive officers as group include
15,000, 15,000, 7,500, 15,000, 7,500 and 63,500 shares, respectively, that
such person or members of the group have the right to acquire within 60
days of March 1, 1998, through the exercise of stock options. Shares of
the common stock of Thermo Vision Corporation beneficially owned by Mr. J.
Hatsopoulos include 3,000 shares held by his spouse. No director or
executive officer beneficially owned more than 1% of the common stock of
Thermo Vision Corporation outstanding as of March 1, 1998; all directors
and current executive officers as a group beneficially owned 1.2% of the
Thermo Vision Corporation common stock outstanding as of March 1, 1998.

(31) Information regarding the number of shares of Common Stock beneficially
owned by Putnam Investments, Inc. is based on the most recent Schedule 13G
of Putnam Investments, Inc. received by the Corporation, which reported
such ownership as of December 31, 1997. The address of Putnam Investments,
Inc. is One Post Office Square, Boston, Massachusetts 02109. As of
December 31, 1997, Putnam Investments Inc. beneficially owned approximately
7% of the outstanding Common Stock.

(32) Information regarding the number of shares of Common Stock beneficially
owned by FMR Corp. is based on the most recent Schedule 13G of FMR Corp.
received by the Corporation, which reported such ownership as of December
31, 1997. The address of FMR Corp. is 82 Devonshire Street, Boston,
Massachusetts 02109. As of December 31, 1997, FMR Corp. beneficially owned
approximately 6.38% of the outstanding Common Stock.

17
<PAGE>

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 1997.

EXECUTIVE COMPENSATION

NOTE: The share amounts reported below have, in all cases, been adjusted as
applicable to reflect a five-for-four stock split with respect to the common
stock of Thermo Instrument Systems Inc. distributed in October 1997 in the form
of a 25% 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.

18
<PAGE>

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

LONG TERM
COMPENSATION
SECURITIES UNDERLYING
NAME AND FISCAL ANNUAL COMPENSATION OPTIONS (NO. OF SHARES ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OTHER AND COMPANY) (1)(2) COMPENSATION (3)
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
George N. Hatsopoulos 1997 $560,000 $630,000 -- 200,000 (TMO) $7,125
Chief Executive Officer 10,000 (MKA)
20,000 (TDX)
1996 $520,000 $575,000 -- 100,000 (TMO) $6,750
15,000 (TBA)
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
- ------------------------------------------------------------------------------------------------------------------------------------

John N. Hatsopoulos 1997 $400,000 $600,000 -- 206,000 (TMO) $7,125
President 10,000 (MKA)
and Chief Financial Officer 240,000 (RGI)
20,000 (TDX)
10,000 (TISI)
15,000 (VIZ)
20,000 (TRCC)
1996 $325,000 $550,000 -- 107,200 (TMO) $6,750
15,000 (TBA)
20,000 (TFG)
15,000 (TLT)
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)
- ------------------------------------------------------------------------------------------------------------------------------------

Arvin H. Smith
Executive Vice President 1997 $285,000 $300,000 $57,947 (4) 6,000 (TMO) $7,125
10,000 (MKA)
15,000 (VIZ)
1996 $270,000 $260,000 $55,089 (4) 9,000 (TMO) $6,750
20,000 (TBA)
10,000 (TFG)
90,000 (TOC)
90,000 (TMQ)
7,000 (TSR)
20,000 (TXM)
1995 $262,000 $230,000 -- 9,000 (TMO) $6,750
10,000 (TLZ)
6,000 (TLT)
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

19
<PAGE>

SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM
COMPENSATION
ANNUAL COMPENSATION SECURITIES UNDERLYING
NAME AND FISCAL ------------------- OPTIONS (NO. OF SHARES ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OTHER AND COMPANY) (1)(2) COMPENSATION (3)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William R. Rainville 1997 $220,000 $200,000 -- 3,400 (TMO) $23,151 (5)
Senior Vice President 240,000 (TFT)
1996 $205,000 $191,000 -- 6,450 (TMO) $17,558 (5)
40,000 (TFG)
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)
- --------------------------------------------------------------------------------------------------------------------------
John W. Wood Jr. 1997 $220,000 $162,000 -- 2,800 (TMO) $7,125
Senior Vice President 5,200 (TMD)
20,000 (TDX)
20,000 (TCA)
400 (TSR)
2,100 (TVL)
1996 $195,000 $172,000 -- 40,500 (TMO) $6,750
5,400 (TMD)
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, as compensation for their services either to the Corporation
or to its subsidiaries. Options were granted during the last three fiscal
years to the chief executive officer and the other named executive officers
in their capacities as executive officers of the Corporation or directors
or executive officers of the following subsidiaries of the Corporation:
Metrika Systems Corporation (designated in the table as MKA), The Randers
Group Incorporated (designated in the table as RGI), 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
Fibergen Inc. (designated in the table as TFG), Thermo Fibertek Corporation
(designated in the table as TFT), Thermo Information Solutions Inc.
(designated in the table as TISI), 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

20
<PAGE>

(designated in the table as TMQ), Thermo Sentron Inc. (designated in the
table as TSR), Thermo Vision Corporation (designated in the table as VIZ),
Thermo Voltek Corp. (designated in the table as TVL), Trex Communications
Corporation (designated in the table as TRCC) 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 January 3, 1998, the amount and value of each executive
officer's restricted stock holdings were as follows: Dr. G. Hatsopoulos
20,250 shares valued at $874,577; Mr. Smith 10,125 shares valued at
$437,279.

(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) This amount includes a special bonus in 1997 and 1996 of $40,447 and
$37,589, respectively, paid pursuant to the Corporation's stock retention
program, which rewards certain executives who do not sell shares of the
Corporation's common stock for three years or more.

(5) In addition to the matching contribution referred to in footnote (3), such
amounts include $5,471 and $1,313, which represent the amounts of
compensation attributable in fiscal 1997 and 1996, respectively, 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."

STOCK OPTIONS GRANTED DURING FISCAL 1997

The following table sets forth information concerning individual grants of
stock options made during fiscal 1997 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 1997.

21
<PAGE>

<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1997
- ------------------------------------------------------------------------------------------------------------------------------------

POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF STOCK
TOTAL OPTIONS PRICE APPRECIATION FOR
NUMBER OF SECURITIES GRANTED TO EXERCISE OPTION TERM (2)
UNDERLYING OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ----------------------
NAME GRANTED (1) FISCAL YEAR SHARE DATE 5% 10%
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Dr. George N. Hatsopoulos 50,000 (TMO) 3.60% $33.50 3/28/09 $1,333,000 $3,582,000
50,000 (TMO) 3.60% $34.90 6/27/09 $1,389,000 $3,731,500
50,000 (TMO) 3.60% $39.23 9/26/09 $1,561,000 $4,194,500
50,000 (TMO) 3.60% $43.46 1/2/10 $1,729,500 $4,647,000
10,000 (MKA) 3.50% $15.00 5/23/09 $119,400 $320,800
20,000 (TDX) 3.70% $11.99 5/23/09 $190,800 $512,800
- ------------------------------------------------------------------------------------------------------------------------------------

John N. Hatsopoulos 50,000 (TMO) 3.60% $33.50 3/28/09 $1,333,000 $3,582,000
6,000 (TMO) 0.40% $34.20 6/3/00 $32,340 $67,920
50,000 (TMO) 3.60% $34.90 6/27/09 $1,389,000 $3,731,500
50,000 (TMO) 3.60% $39.23 9/26/09 $1,561,000 $4,194,500
50,000 (TMO) 3.60% $43.46 1/2/10 $1,729,500 $4,647,000
10,000 (MKA) 3.50% $15.00 5/23/09 $119,400 $320,800
240,000 (RGI) 3.10% $0.65 2/12/04 $62,400 $148,800
20,000 (TDX) 3.70% $11.99 5/23/09 $190,800 $512,800
10,000 (TISI) 3.20% $9.00 6/10/09 $71,600 $192,500
15,000 (VIZ) 5.20% $7.50 2/5/04 $45,750 $106,800
20,000 (TRCC) 5.00% $4.00 0/1/09 $63,600 $171,000
- ------------------------------------------------------------------------------------------------------------------------------------

Arvin H. Smith 6,000 (TMO) 0.40% $34.20 6/3/00 $32,340 $67,920
10,000 (MKA) 3.50% $15.00 5/23/09 $119,400 $320,800
15,000 (VIZ) 5.20% $7.50 2/5/04 $45,750 $106,800
- ------------------------------------------------------------------------------------------------------------------------------------

William A. Rainville 3,400 (TMO) 0.20% $34.20 6/3/00 $18,326 $38,488
140,000 (TFT) 16.10% $11.28 3/19/09 $1,257,200 $3,376,800
100,000 (TFT) 11.50% $11.45 9/23/09 $911,000 $2,449,000
- ------------------------------------------------------------------------------------------------------------------------------------

John W. Wood Jr. 2,800 (TMO) 0.20% $34.20 6/3/00 $15,092 $31,696
5,200 (TMD) 1.60% $19.03 3/20/00 $15,600 $32,760
20,000 (TDX) 3.70% $11.99 5/23/09 $190,800 $512,800
20,000 (TCA) 2.40% $27.60 6/17/09 $439,400 $1,180,400
400 (TSR) 0.20% $9.80 3/19/00 $616 $1,296
2,100 (TVL) 0.90% $10.28 3/13/00 $3,402 $7,140
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) All of the options reported are immediately exercisable as of the end of
the fiscal year, except options to purchase shares of the common stock of
Thermo Information Solutions Inc., ThermoLyte Corporation and Trex
Communications 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 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

22
<PAGE>

holders of 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 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 1997 AND FISCAL YEAR-END OPTION VALUES

The following table reports certain information regarding stock option
exercises during fiscal 1997 and outstanding stock options held at the end of
fiscal 1997 by the Corporation's chief executive officer and the other named
executive officers. No stock appreciation rights were exercised or were
outstanding during fiscal 1997.

23
<PAGE>

AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND FISCAL 1997 YEAR-END OPTION VALUES
- ------------------------------------------------------------------------------------------------------------------------------------

NUMBER OF
SHARES OPTIONS AT FISCAL VALUE OF

ACQUIRED VALUE YEAR-END UNEXERCISED

ON REALIZED (EXERCISABLE/ IN-THE-MONEY

NAME COMPANY EXERCISE (1) UNEXERCISABLE) (2) OPTIONS

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

<S> <C> <C> <C> <C> <C>
Dr. George N. Hatsopoulos Thermo Electron -- -- 1,699,500 /0 $39,255,936 /--
Metrika Systems -- -- 10,000 /0 $3,750 /--
Thermedics -- -- 50,000 /0 $26,650 /--
Thermedics Detection -- -- 20,000 /0 $0 /--
Thermo BioAnalysis -- -- 15,000 /0 $142,500 /--
Thermo Ecotek -- -- 15,000 /0 $189,375 /--
Thermo Fibergen -- -- 20,000 /0 $0 /--
Thermo Fibertek -- -- 157,910 /0 $1,309,127 /--
Thermo Instrument Systems -- -- 117,187 /0 $2,421,083 /--
ThermoLase -- -- 28,800 /0 $268,214 /--
ThermoLyte -- -- 0 /15,000 -- /$0 (3)
Thermo Optek -- -- 90,000 /0 $430,200 /--
Thermo Power -- -- 40,000 /0 $0 /--
ThermoQuest -- -- 90,000 /0 $450,000 /--
Thermo Remediation -- -- 7,500 /0 $0 /--
Thermo Sentron -- -- 15,000 /0 $0 /--
ThermoSpectra -- -- 20,000 /0 $1,260 /--
Thermo TerraTech -- -- 40,000 /0 $0 /--
ThermoTrex -- -- 36,600 /0 $348,930 /--
Trex Medical -- -- 40,000 /0 $125,000 /--
- ------------------------------------------------------------------------------------------------------------------------------------

John N. Hatsopoulos Thermo Electron 20,250 $512,259 615,435 /0 (4) $9,004,739 /--
Metrika Systems -- -- 10,000 /0 $3,750 /--
The Randers Group -- -- 240,000 /0 $0 /--
Thermedics -- -- 50,000 /0 $26,650 /--
Thermedics Detection -- -- 20,000 /0 $0 /--
Thermo BioAnalysis -- -- 15,000 /0 $142,500 /--
Thermo Ecotek -- -- 13,257 /0 $167,370 /--
Thermo Fibertek 39,600 $329,195 57,600 /0 $415,829 /--
Thermo Information
Solutions -- -- 0 /10,000 -- /$0 (3)
Thermo Instrument Systems 11,718 $182,332 82,031 /0 $1,694,760 /--
ThermoLase 14,400 $192,600 39,400 /0 $134,107 /--
ThermoLyte -- -- 0 /15,000 -- /$0 (3)
Thermo Optek -- -- 90,000 /0 $430,200 /--
Thermo Power -- -- 40,000 /0 $0 /--
ThermoQuest -- -- 90,000 /0 $450,000 /--
Thermo Remediation -- -- 22,500 /0 $0 /--
Thermo Sentron -- -- 15,000 /0 $0 /--
ThermoSpectra -- -- 20,000 /0 $1,260 /--
Thermo TerraTech -- -- 40,000 /0 $0 /--
ThermoTrex -- -- 21,000 /0 $158,550 /--
Thermo Vision -- -- 15,000 /0 $8,445 /--
Thermo Voltek 7,498 $59,647 0 /0 -- /--
Trex Communications -- -- 0 /20,000 -- /$0 (3)
Trex Medical -- -- 40,000 /0 $125,000 /--
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

24
<PAGE>

Aggregated Option Exercises in Fiscal 1997 and Fiscal 1997 Year-End Option Values

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

Number of
Shares Options at Fiscal Value of

Acquired Value Year-End Unexercised

on Realized (Exercisable/ In-the-Money

Name Company Exercise (1) Unexercisable) (2) Options

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

<S> <C> <C> <C> <C> <C>
Arvin H. Smith Thermo Electron -- -- 228,411 /0 $6,103,197 /--
Metrika Systems -- -- 10,000 /0 $3,750 /--
Thermedics -- -- 82,500 /0 $636,173 /--
Thermo BioAnalysis -- -- 20,000 /0 $190,000 /--
Thermo Cardiosystems -- -- 30,000 /0 $586,350 /--
Thermo Ecotek 6,000 $62,250 0 /0 -- /--
Thermo Fibergen -- -- 10,000 /0 $0 /--
Thermo Fibertek -- -- 90,000 /0 $826,920 /--
Thermo Instrument Systems -- -- 292,968 /0 $6,052,719 /--
ThermoLase -- -- 10,000 /0 $0 /--
ThermoLyte -- -- 0 /6,000 -- /$0 (3)
Thermo Optek -- -- 90,000 /0 $430,200 /--
ThermoQuest -- -- 90,000 /0 $450,000 /--
Thermo Remediation -- -- 2,400 /0 $0 /--
Thermo Sentron -- -- 7,000 /0 $0 /--
ThermoSpectra -- -- 20,000 /0 $1,260 /--
Thermo TerraTech -- -- 35,000 /0 $7,875 /--
ThermoTrex -- -- 2,700 /0 $50,085 /--
Thermo Vision -- -- 15,000 /0 $8,445 /--
Trex Medical -- -- 20,000 /0 $62,500 /--
- ------------------------------------------------------------------------------------------------------------------------------------

William A. Rainville Thermo Electron 23,624 $644,794 185,424 /0 (4) $4,389,661 /--
Thermo BioAnalysis -- -- 6,000 /0 $57,000 /--
Thermo Ecotek 6,000 $62,250 0 /0 -- /--
Thermo Fibergen -- -- 40,000 /0 (5) $0 /--
Thermo Fibertek -- -- 35,000 /0 $4,465,480 /--
ThermoLase -- -- 10,000 /0 $0 /--
ThermoLyte -- -- 0 /6,000 -- /$0 (3)
Thermo Optek -- -- 15,000 /0 $71,700 /--
ThermoQuest -- -- 15,000 /0 $75,000 /--
Thermo Remediation -- -- 22,500 /0 $0 /--
Thermo Sentron -- -- 7,000 /0 $0 /--
ThermoSpectra -- -- 10,000 /0 $630 /--
Thermo TerraTech -- -- 60,000 /0 $0 /--
ThermoTrex -- -- 2,700 /0 $50,085 /--
Trex Medical -- -- 20,000 /0 $62,500 /--
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

25
<PAGE>

Aggregated Option Exercises in Fiscal 1997 and Fiscal 1997 Year-End Option Values

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

Number of
Shares Options at Fiscal Value of
Acquired Value Year-End Unexercised
on Realized (Exercisable/ In-the-Money
Name Company Exercise (1) Unexercisable) (2) Options
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
John W. Wood Jr. Thermo Electron -- -- 230,458 /0 (4) $4,228,068 /--
Thermedics -- -- 130,700 /0 $362,415 /--
Thermedics Detection -- -- 43,333 /0 $167,718 /--
Thermo BioAnalysis -- -- 6,000 /0 $57,000 /--
Thermo Cardiosystems -- -- 53,450 /0 $686,914 /--
Thermo Fibergen -- -- 10,000 /0 $0 /--
Thermo Fibertek -- -- 9,000 /0 $82,692 /--
ThermoLase -- -- 10,000 /0 $0 /--
ThermoLyte -- -- 0 /6,000 -- /$0 (3)
Thermo Optek -- -- 15,000 /0 $71,700 /--
Thermo Quest -- -- 15,000 /0 $75,000 /--
Thermo Sentron -- -- 30,400 /0 $0 /--
ThermoSpectra -- -- 3,000 /0 $189 /--
ThermoTrex 900 $17,652 0 /0 -- /--
Thermo Voltek -- -- 80,550 /0 $0 /--
Trex Medical -- -- 20,000 /0 $62,500 /--
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Amounts shown in this column do not necessarily represent actual value
realized from the sale of the shares acquired upon exercise of the option
because in many cases the shares are not sold on exercise but continue to
be held by the executive officer exercising the option. The amounts shown
represent the difference between the option exercise price and the market
price on the date of exercise, which is the amount that would have been
realized if the shares had been sold immediately upon exercise.

(2) All of the options reported outstanding at the end of the fiscal year were
immediately exercisable as of fiscal year-end, except options to purchase
the common stock of Thermo Information Solutions Inc., ThermoLyte
Corporation and Trex Communications Corporation, 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 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 have
three-year terms and the repurchase rights lapse in their entirety on the
second anniversary of the grant date.

(3) 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.

(4) 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.

26
<PAGE>

(5) 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.

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
$160,000 per year.

<TABLE>
<CAPTION>
Years of Service
-------------------------------------------------------
Annual Compensation 15 20 25 30 35
- ----------------------------------------------------------------------------------------
<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
$160,000 $42,000 $56,000 $70,000 $84,000 $84,000

</TABLE>

Each eligible employee receives a monthly retirement benefit, beginning at
normal retirement age (65), based on a percentage (1.75%) of the average monthly
compensation of such employee before retirement, multiplied by his years of
service (up to a maximum of 30 years). Full credit is given for the first 25
years of service, and half credit is given for years over 25 and less than 30.
Benefits are reduced for retirement before normal retirement age. Average
monthly compensation is generally defined as average monthly base salary over
the five years of highest compensation in the ten-year period preceding
retirement. For 1997, the annual compensation of Mr. Rainville recognized for
plan purposes was $160,000. 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 been payable under such agreements as of March 1, 1998, the payments
thereunder for the first year thereof to Dr. G. Hatsopoulos, Mr. J. Hatsopoulos
and Mr. Smith would have been approximately $1,167,390, $761,000, and $345,735,
respectively.

27
<PAGE>

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, 1998,
the payment under such agreement to Mr. Rainville and Mr. Wood would have been
approximately $420,000 and $382,000, 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 (collectively
referred to as "total compensation").

The Committee believes that the total 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.

ESTABLISHING COMPETITIVENESS

External competitiveness is an important element of the Committee's
compensation policy. The competitiveness of the Corporation's total compensation
for its executives is assessed by comparing it to market data provided by
compensation consultants and by participating in 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. Total compensation considered for the Corporation's
officers, whether cash or stock-based incentives, is also evaluated by comparing
it to total compensation of other executives within the Thermo Electron
organization with comparable levels of responsibility for comparably sized
business units. The process for determining each of these elements for the named
executive officers is outlined below. For its review of the compensation of
other officers of the Corporation, the Committee follows a substantially similar
process.

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

28
<PAGE>

approximate the mid-point of competitive data. The salary increases in calendar
1997 for the chief executive officer and other 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 discretion by evaluating each executive's performance
using a methodology applied throughout the Corporation. The methodology
incorporates measures of operating returns which are 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 fiscal 1997 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 fiscal 1997 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 for each officer the annual
value of all options to purchase shares of the Corporation and other companies
within the Thermo Electron organization that vest in the next year and compares
the individual's total compensation using this value to competitive data. The
Committee uses a modified Black-Scholes option pricing model to determine the
value of an option award. In addition, the Committee considers the aggregate
amount of net awards to purchase shares of Common Stock granted to all employees
over the last five years to monitor the number of aggregate awards to all
employees. In reviewing the aggregate number of awards, the Committee considers
such factors as the size of the company, its stage of development, and its
growth strategy, as well as the aggregate awards and option practices of
comparably situated companies.

The Committee periodically awards stock options based on its assessment of
the total compensation of each executive, the 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.

29
<PAGE>

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.

The Committee also established a stock holding policy for executive
officers of the Corporation in 1996 that required executive officers to own a
multiple of their compensation in shares of the Corporation's Common Stock. For
the chief executive officer, the multiple was one times his base salary and
reference bonus for the calendar year. For all other officers, the multiple was
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. The
policy was amended in 1998 to apply only to the chief executive officer.

In order to assist officers in complying with the policy, the Committee
also adopted in 1996 a stock holding assistance plan under which the Corporation
was 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. This plan was amended
in 1998 to apply only to the chief executive officer. No such loans are
currently outstanding under this plan.

The Committee also has confirmed its policy requiring executive 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. See "Relationship with Affiliates - Stock Holding Assistance
Plans."

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 cash compensation of each of the chief executive officer and the
president exceeded $1 million in 1997; none of the other named executive
officers received compensation in excess of $1 million in 1997. The Committee
does not believe that the amount by which the chief executive officer's
compensation or the president's compensation exceeded $1 million was
significant. The Committee does not currently expect the cash compensation of
any of the named executive officers other than the chief executive officer and
the president to exceed the $1 million threshold in 1998. Furthermore, although
the Corporation generally claims a tax deduction when an executive exercises a
stock option, 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

30
<PAGE>

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.

1997 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 to 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 1997, 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 used in setting base salaries for
the named executive officers and officers of the Corporation (described above
under the heading "Base Salary"). The increase in base salary for the chief
executive officer approved in 1997 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 35 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 January 3, 1998, the Corporation achieved a ten-
year compounded rate of return to Stockholders of 25.9 percent per year, well in
excess of the 14.4 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. Prior to 1996, the last such award was made in 1993. This
award was 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.

31
<PAGE>

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 in fiscal 1997 with respect to the shares of
Metrika Systems Corporation and Thermedics Detection Inc. were awarded under
this program, using the methodology described above for all executive officers
under "Stock Option Program."

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

32
<PAGE>

COMPARATIVE PERFORMANCE GRAPHS

FIVE-YEAR PERFORMANCE GRAPH: 1992-1997

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 is
changing peer groups for purposes of this year's proxy statement. Due in part
to the addition of the Corporation in 1996 to the companies comprising the Dow
Jones diversified technology industry index, and in part to the changing mix of
the Corporation's businesses, management has concluded that the Dow Jones
diversified technology industry index, excluding the Corporation, is the most
appropriate peer group to which to compare the Corporation's shareholder
returns. The Corporation has compared its performance with the Standard & Poor's
500 Index (the "S&P 500 Index") and both the newly selected peer group ("Current
Peer Group") and the discontinued peer group ("Discontinued Peer Group"). The
Current Peer Group is composed of the companies that comprise the Dow Jones
diversified technology industry group, excluding the Corporation: Corning Inc.,
Eaton Corp., Minnesota Mining and Manufacturing Co., The Perkin-Elmer Corp.,
Rockwell International Corp., TRW Inc., Tektronix, Inc., Texas Instruments
Incorporated, United Technologies Corp. and Varian Associates, Inc. The
Discontinued Peer Group is composed of the companies that comprise the following
Dow Jones industry groups: diversified technology, electrical components and
equipment, and industrial and commercial pollution control and waste management.
The companies included in these industry groups and the Corporation's peer group
are as follows: diversified technology -Corning Inc., Eaton Corp., Minnesota
Mining and Manufacturing Co., The Perkin-Elmer Corp., Rockwell International
Corp., TRW Inc., Tektronix, Inc., Texas Instruments Incorporated, United
Technologies Corp. and Varian Associates, Inc.; electrical components and
equipment - AMP Inc., Avenet Inc., Emerson Electric Co., General Signal Corp.,
Grainger (W.W.), Inc., Honeywell Inc., Hubbell Inc. (Class B), Molex Inc.,
Solectron Corporation, Thomas & Betts 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.,
Waste Management Inc. and Wheelabrator Technologies Inc. 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.

33
<PAGE>

COMPARISON OF 1992-1997 CUMULATIVE TOTAL RETURN
AMONG THERMO ELECTRON CORPORATION (TMO),
THE STANDARD & POOR'S 500 INDEX (S&P 500), THE CORPORATION'S
DISCONTINUED PEER GROUP AND ITS CURRENT PEER GROUP

[GRAPH APPEARS HERE]

- -------------------------------------------------------------------------------------------------------------------
12/31/92 12/31/93 12/31/94 21/31/95 12/31/96 12/31/97
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TMO 100 134 143 248 269 309
- -------------------------------------------------------------------------------------------------------------------
S&P 500 100 110 112 153 193 253
- -------------------------------------------------------------------------------------------------------------------
DISCONTINUED PEER GROUP 100 105 109 140 178 197
- -------------------------------------------------------------------------------------------------------------------
CURRENT PEER GROUP 100 116 120 159 214 237
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

The total return for the Corporation's Common Stock (TMO), the S&P 500
Index (S&P 500) and the Corporation's Peer Group (Peer Group) assumes the
reinvestment of dividends, although dividends have not been declared on the
Corporation's Common Stock. The Corporation's Common Stock is traded on the New
York Stock Exchange under the ticker symbol "TMO".

TEN-YEAR PERFORMANCE GRAPH: 1987-1997

The Corporation has also elected to compare its cumulative shareholder
return to the S&P 500 Index and the Corporation's Current Peer Group and the
Discontinued Peer Group for the last ten years, as of the final trading day of
each fiscal year. 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.

34
<PAGE>

COMPARISON OF 1987-1997 CUMULATIVE TOTAL RETURN
AMONG THERMO ELECTRON CORPORATION (TMO), THE S&P 500 INDEX (S&P 500),
THE CORPORATION'S DISCONTINUED PEER GROUP AND ITS CURRENT PEER GROUP

[GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
12/87 12/88 12/89 12/90 12/91 12/92 12/93 12/94 12/95 12/96 12/97
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TMO 100 149 225 211 337 346 462 494 858 934 1069
- ------------------------------------------------------------------------------------------------------------------
S&P 500 100 117 154 149 194 209 230 233 321 403 528
- ------------------------------------------------------------------------------------------------------------------
Discontined Peer Group 100 104 134 134 165 182 191 198 254 323 359
- ------------------------------------------------------------------------------------------------------------------
Current Peer Group 100 105 128 136 156 178 205 212 282 381 422
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

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 performed

35
<PAGE>

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. In addition, a withdrawing company is required
to continue to comply with all policies and procedures applicable to the Thermo
Group and to provide certain administrative functions mandated by Thermo
Electron so long as the withdrawing company is controlled by or affiliated with
Thermo Electron.

In general, under the corporate services agreements between Thermo Electron
and each of the Thermo Subsidiaries, Thermo Electron's corporate staff provides
each of the Thermo Subsidiaries with certain administrative services, including
certain legal advice and services, risk management, employee benefit
administration, tax advice and preparation of tax returns, centralized cash
management and financial and other services. For the fiscal year ended January
3, 1998, the Corporation assessed each Thermo Subsidiary an annual fee equal to
1.0% of such subsidiary's revenues for these services The annual fee has been
reduced to 0.8% of the total revenues of each Thermo Subsidiary for fiscal 1998.
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 distributorship agreement, Thermedics
Detection Inc. ("Thermedics Detection"), a subsidiary of Thermedics Inc. that
is, in turn, a subsidiary of the Corporation, has appointed Arabian Business
Machines Co. ("ABM") as its exclusive distributor of security instruments in
certain Middle Eastern 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, another member of the Olayan Group, which is
indirectly controlled by Suliman S. Olayan, Ms. Olayan's father. During 1997,
ABM purchased $480,000 of products from Thermedics Detection pursuant to this
distributorship agreement.

36
<PAGE>

In April 1997, Thermo Information Solutions Inc. ("TIS"), a wholly owned
subsidiary of Thermo Coleman Corporation which in turn is a majority-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 the 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's 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. John C.
Hatsopoulos received a portion of this placement agent fee equal to $42,068.

In October 1997, ONIX Systems Inc. ("ONIX") completed private placements of
1,639,670 shares primarily to outside investors of minority investments in its
common stock. Crescent International Holdings Ltd. purchased 16,666 shares, and
Pilot Trading Trust purchased 7,333 shares of the common stock of ONIX in such
private placements at a purchase price of $14.25 per share, the same price paid
by unaffiliated buyers. Crescent International Holdings Ltd. 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. Ms. Olayan disclaims beneficial ownership of the shares owned
by Crescent International Holding Limited. Pilot Trading Trust is controlled by
Robert A. McCabe, a director of the Corporation, and members of his family.

In September 1997, Trex Communications Corporation ("TRCC"), a subsidiary
of Thermo Trex Corporation which in turn is a majority-owned subsidiary of the
Corporation, completed private placements of an aggregate of 1,083,000 shares
primarily to outside investors of minority investments in its common stock.
Crescent International Holdings Ltd. purchased 50,000 shares of common stock of
TRCC in such private placements at a purchase price of $10.00 per share, the
same price paid by unaffiliated buyers. Crescent International Holdings Ltd. is
indirectly controlled by Suliman S. Olayan, the father of Hutham S. Olayan, a
director of the Corporation. Ms. Olayan disclaims beneficial ownership of the
shares owned by Crescent International Holdings Ltd. In connection with TRCC's
private placement of its shares of common stock, TRCC and the Corporation
entered into a placement agreement with Oppenheimer & Co. Inc. and KSH
Investment Group, Inc. ("KSH") to act as placement agents on behalf of TRCC.
KSH received a placement agent fee of approximately $370,860, representing 6% of
the gross proceeds from the sale of shares of TRCC common stock in the private
placement to investors introduced to TRCC by KSH. 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. John C. Hatsopoulos
received a portion of this placement agent fee equal to $13,347.

In December 1997 and March 1998, Thermo Trilogy Corporation ("TRIL") Inc.,
a subsidiary of Thermo Ecotek Corporation which in turn is a majority-owned
subsidiary of the Corporation, completed private placements of an aggregate of
1,942,821 shares primarily to outsider investors of minority investments in its
common stock. Roger D. Wellington, a director of the Corporation, Crescent
International Holdings Ltd. and Pilot Trading Trust purchased 8,000, 60,000 and
18,000 shares of common stock of TRIL in such private placements, respectively,
at a purchase price of $8.25 per share, the same price paid by unaffiliated
buyers. Crescent International Holdings Ltd. is indirectly controlled by
Suliman S. Olayan, the father of Hutham S. Olayan, a director of the
Corporation. Ms. Olayan disclaims beneficial ownership of the shares owned by
Crescent International Holdings Ltd. Pilot Trading Trust is controlled by
Robert A. McCabe, a director of the Corporation, and members of his family. In
connection with TRIL's private placement of its shares of common stock in March
1998, TRIL and the Corporation entered into a placement agreement with KSH to
act as placement agent on behalf of TRIL. KSH received a placement agent fee of
approximately $387,050, representing 6% of the gross proceeds from the sale of
shares of TRIL common stock in the March 1998 private placement to investors
introduced to TRIL by KSH. 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. John C. Hatsopoulos received a portion of this
placement agent fee equal to $16,750.

37
<PAGE>

STOCK HOLDING ASSISTANCE PLANS

In 1996, the Corporation adopted a stock holding policy that 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 enable such employees to purchase the Common Stock in the open
market. This policy and plan were amended in 1998 to apply only to the chief
executive officer of the Corporation in the future. No such loans are currently
outstanding under this plan.

Each of the Corporation's publicly traded, majority-owned subsidiaries have
adopted similar stock holding policies and stock holding assistance plans, which
are applicable, beginning in 1998, only to their chief 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 chairman 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 chairman of Thermedics
Inc. and the chairman and chief executive officer of Thermo Voltek Corp. 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. of which amount $94,483.20 was
outstanding as of April 23, 1998 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. As of April 23, 1998, $94,483.20 remained outstanding under the
loan. None of the other named executive officers have loans currently
outstanding under any subsidiary stock holding assistance plan.

- PROPOSAL 2 -

PROPOSAL TO INCREASE BY 750,000 THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE
FOR ISSUANCE UNDER THE EMPLOYEES' STOCK PURCHASE PLAN

The Board of Directors has recommended that the Stockholders approve an
amendment to the Corporation's employees' stock purchase plan (the "Stock
Purchase Plan") that would increase the number of shares available for issuance
under the employees' stock purchase plan. The material features of the Stock
Purchase Plan are described below. If the plan amendment is not approved by the
Stockholders at this meeting, the Stock Purchase Plan will be discontinued upon
the exhaustion of the shares currently reserved for issuance under the plan.
The Board of Directors believes that the Stock Purchase Plan is an important
incentive in attracting and retaining key personnel, in motivating individuals
to contribute significantly to the Corporation's future growth and success, and
in aligning the long-term interest of these individuals with those of the
Corporation's Stockholders. For these reasons, the Board of Directors has acted
to increase the number of shares available for issuance under the plan and is
recommending the increase to the Stockholders for approval. The following is a
summary of the terms of the Stock Purchase Plan.

SUMMARY OF THE STOCK PURCHASE PLAN

PARTICIPATION; ADMINISTRATION

All full-time employees and part-time employees working at least 20 hours
per week and who have been employed for at least six months by the Corporation
are eligible to participate in the Stock Purchase Plan, unless they own more
than 5% of the Common Stock of the Corporation. Options to purchase shares of
the Common Stock of the Corporation may be granted from time to time at the
discretion of the Board of Directors, which also determines the date upon which
such options are exercisable. At the present time, only employees based in the
United States are eligible to participate in the Stock Purchase Plan. The
number of employees potentially eligible to participate in the Stock Purchase
Plan is approximately 22,400 persons.

38
<PAGE>

CONTRIBUTIONS

A participating employee may purchase stock only through payroll
deductions, which may not exceed 10% of the employees' gross salary or wages
during the year. Employees are allowed to decrease, but not increase the
percentage of wages contributed once during the plan year. An employee may
suspend his or her contributions, but then is not permitted to contribute again
for the remainder of the plan year.

TERMS OF OPTIONS

The exercise price is fixed on the grant date at the start of the plan year
and is 95% of the fair market value of such stock on such date. On the exercise
date, participants may elect to use their accumulated payroll deductions to
purchase shares at the exercise price. Participants must agree not to resell
the shares so purchased for a period of six months following the exercise date.
The options are nontransferable, and except in the case of death of the
employee, may not be exercised if the employee is not still employed by the
Corporation at the exercise date. If an employee dies, his or her beneficiary
may withdraw the accumulated payroll deduction or use such deductions to
purchase shares on the exercise date. A participant may elect to discontinue
participation at any time prior to the exercise date and to have his or her
accumulated payroll deduction refunded together with interest on such amount as
fixed by the Board of Directors from time to time.

SHARES SUBJECT TO THE STOCK PURCHASE PLAN

The number of shares that are currently available for issuance under the
Stock Purchase Plan is 228,569 shares of the Corporation's Common Stock, subject
to adjustment for stock splits and similar events. The proceeds received by the
Corporation from the exercise of options granted under the Stock Purchase Plan
will be used for the general purpose of the Corporation. Shares issued under
the Stock Purchase Plan may be authorized but unissued or shares reacquired by
the Corporation and held in its treasury.

AMENDMENT AND TERMINATION

The Stock Purchase Plan shall remain in full force and effect until
suspended or discontinued by the Board of Directors. The Board of Directors may
at any time or times amend or review the Stock Purchase Plan for any purpose
which may be permitted by law, or may at any time terminate the Stock Purchase
Plan, provided that no amendment that is not approved by the Stockholders shall
be effective if it would cause the Stock Purchase Plan to fail to satisfy the
requirements of Rule 16b-3 (or any successor rule) of the Securities Exchange
Act of 1934, as amended. No amendment of the Stock Purchase Plan may adversely
affect the rights of any recipient of any option previously granted without such
recipient's consent.

TERM OF THE STOCK PURCHASE PLAN

The Stock Purchase Plan will expire on November 1, 2002, provided that the
number of shares available for issuance under the Stock Purchase Plan is not
exhausted prior to that date.

FEDERAL INCOME TAX ASPECTS

Federal income tax is not imposed upon an employee in the year an option is
granted or the year the shares are purchased pursuant to the exercise of the
option granted under the Stock Purchase Plan. Federal income tax generally is
imposed upon an employee when he or she sells or otherwise disposes of the
shares acquired pursuant to the Stock Purchase Plan. When an employee sells or
disposes of the shares, if such sale or disposition occurs more than two years
from the grant date, and more than one year from the exercise date, then Federal
income tax assessed at ordinary rates will be imposed upon the amount by which
the fair market value of the shares on the date of grant or disposition,
whichever is less, exceeds the amount paid for the shares. In addition, the
difference between the amount received by the employee at the time of sale and
the employees' tax basis in the shares, which is equal to the amount paid on
exercise of the option plus the amount recognized as ordinary income, will be
recognized as a capital gain or loss. The Corporation will not be allowed a
deduction under these circumstances for Federal income tax purposes. If the
employee sells or disposes of the shares sooner than two years from the grant
date or one year from the exercise date, then the employee's entire gain (the
difference between the fair market value at disposition

39
<PAGE>

and the amount paid for the shares) will be taxed as ordinary income, and the
Corporation would be entitled to a deduction equal to that amount.

The closing price per share on the American Stock Exchange of the Common
Stock on April 22, 1998 was $40.31.

RECOMMENDATION

The Board of Directors believes that the increase in the number of shares
available for issuance under the Stock Purchase Plan is important for the
Corporation to attract and retain key employees and to be able to continue to
offer them the opportunity to participate in the ownership and growth of the
Corporation through an employees' stock purchase plan. In addition, the Board
of Directors believes the Stock Purchase Plan is in the best interest of the
Corporation and its Stockholders and recommends that the Stockholders vote FOR
the approval of the Stock Purchase 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) - 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. Scores of companies, including Bank America, Baxter
International, Bethlehem Steel, General Motors, H.B. Fuller, ITT Industries,
Pennsylvania Power and Light, Polaroid, and Sun (Sunoco), have endorsed these
principles to demonstrate their commitment to public environmental
accountability and standardized reporting. Fortune-500 endorsers say that the
benefits of working with CERES are public credibility, direct access to major
environmental and shareholder organizations, leadership in designing the rapidly
advancing standardization of environmental disclosure and measurable value-added
for the company's environmental initiatives;

40
<PAGE>

A company endorsing the CERES Principles commits to work toward:
<TABLE>
<CAPTION>

<S> <C>
1. Protection of the biosphere 6. Safe products/services
2. Sustainable natural resource use 7. Environmental restoration
3. Waste reduction and disposal 8. Informing the public
4. Energy conservation 9. Management commitment
5. Risk reduction 10. Audits and report

</TABLE>

[Materials on the CERES Principles and CERES Report Form are obtainable from
CERES, 711 Atlantic Avenue, Boston MA 02110, tel: 617-451-0927; fax 617-482-
2028].

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.

RESOLVED: 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.
Furthermore, the number of public pension funds and foundations supporting this
resolution increases 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 the
CERES Principles exceed the European Community regulation for voluntary
participation in verified and publicly reported eco-management and auditing, and
that they also exceed the requirements for ISO 14000.

Your vote FOR this resolution will encourage both scrutiny of our Company's
environmental policies and reports and adherence to goals supported by
management and shareholders alike. We believe the CERES Principles will protect
both your investment and your environment.

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 uniformly 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.

41
<PAGE>

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. A substantially identical proposal was submitted to, and rejected
by, the Stockholders at the 1997 Annual Meeting of the Stockholders, with
approximately 92.2% of the shares voting on the proposal voted against the
proposal.

APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The board of directors has appointed Arthur Andersen LLP as independent
public accountants for fiscal 1998. Representatives of that firm are expected to
be present at the Meeting, will have the opportunity to make a statement if they
desire to do so and will be available to respond to questions. Arthur Andersen
LLP has acted as independent public accountants for the Corporation since 1960.

OTHER ACTION

Management is not aware at this time of any other matters that will be
presented for action at the Meeting. Should any such matters be presented, the
proxies grant power to the proxy holders to vote shares represented by the
proxies in the discretion of such proxy holders.

STOCKHOLDER PROPOSALS

Proposals of Stockholders intended to be presented at the 1999 Annual
Meeting of the Stockholders of the Corporation must be received by the
Corporation for inclusion in the proxy statement and form of proxy relating to
that Meeting no later than December 29, 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 or 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.

Waltham, Massachusetts
April 27, 1998

42
<PAGE>

FORM OF PROXY

THERMO ELECTRON CORPORATION

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 2, 1998

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

The undersigned hereby appoints George N. Hatsopoulos, John N. Hatsopoulos
and Melissa F. Riordan, and each of them, proxies of the undersigned, each with
power to appoint his substitute, and hereby authorizes them to represent and to
vote, as designated below, all the shares of common stock of Thermo Electron
Corporation held of record by the undersigned on April 3, 1998, at the Annual
Meeting of the Stockholders to be held at The Hyatt Regency Scottsdale Resort at
Gainey Ranch, Scottsdale, Arizona, on Tuesday, June 2, 1998, at 4:15 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.)
<PAGE>

Please mark your
[x] votes as in this
example.

The Board of Directors recommends a vote For Proposals 1 and 2.

1. ELECTION OF DIRECTORS OF THE COMPANY (see reverse).

NOMINEES: Elias P. Gyftopoulos, Frank Jungers, Frank E. Morris and
Donald E. Noble.

FOR ALL NOMINEES [_]

WITHHELD FROM ALL NOMINEES [_]

FOR, except vote withheld for the following nominee(s):
------------------------

2. Approve an amendment to the Corporation's
Employees' Stock Purchase Plan to increase
the shares available for grant by 750,000 shares.

FOR AGAINST ABSTAIN

[_] [_] [_]

The Board of Directors recommends a vote AGAINST Proposal 3.

3. Approve a stockholder proposal to request
the Corporation to endorse the CERES Principles.

FOR AGAINST ABSTAIN

[_] [_] [_]

4. In their discretion on such other matters as may properly come before
the meeting.

(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.)

Copies of the Notice of Meeting and of the Proxy Statement have been received by
the undersigned.

SIGNATURE(S)_______________________________________ DATE_________________