<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
THERMO ELECTRON CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In 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:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE>
[LOGO OF THERMO ELECTRON]
81 Wyman Street
P.O. Box 9046
Waltham, MA 02454-9046
April 19, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 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 1, 2000, is enclosed. I
hope you will read it carefully. Please feel free to forward any questions you
may have if you are unable to attend the meeting.
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,
/s/ Richard F. Syron
RICHARD F. SYRON
Chairman, President and Chief Executive Officer
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD.
<PAGE>
[LOGO OF THERMO ELECTRON]
81 Wyman Street
P.O. Box 9046
Waltham, MA 02454-9046
April 19, 2000
To the Holders of the Common Stock of
THERMO ELECTRON CORPORATION
NOTICE OF ANNUAL MEETING
The 2000 Annual Meeting of the Stockholders of Thermo Electron Corporation
("Thermo Electron" or the "Corporation") will be held on Wednesday, May 17,
2000, at 3:30 p.m. at the Marriott Long Wharf Hotel, 296 State Street, Boston,
Massachusetts. The purpose of the meeting is to consider and take action upon
the following matters:
1. Election of three directors, comprising the class of directors to be
elected for a three-year term expiring in the year 2003.
2. A proposal recommended by the Board of Directors to amend the
Corporation's equity incentive plan to restate the limitation on the
size of awards to any recipient in a year.
3. A stockholder proposal, if presented by its proponent 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 March 31, 2000.
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 promptly sign the enclosed proxy and return it 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
Vice President, Secretary
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the board of directors of Thermo
Electron Corporation ("Thermo Electron" or the "Corporation") for use at the
2000 Annual Meeting of the Stockholders to be held on Wednesday, May 17, 2000,
at 3:30 p.m. at the Marriott Long Wharf Hotel, 296 State Street, Boston,
Massachusetts and any adjournment thereof. The mailing address of the executive
office of the Corporation is 81 Wyman Street, P.O. Box 9046, Waltham,
Massachusetts 02454-9046. This proxy statement and the enclosed proxy were first
furnished to Stockholders of the Corporation on or about April 24, 2000.
VOTING PROCEDURES
The board of directors intends to present to the meeting the election of
three directors, comprising the class of directors to be elected for a three-
year term expiring in 2003, and a proposal to restate the limitation on the
potential size of awards to any recipient in a year under the Corporation's
equity incentive plan.
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. Votes of
Stockholders of record who are present at the meeting in person or by proxy,
abstentions, and broker non-votes (as defined below) are counted as present or
represented at the meeting for purposes of determining whether a quorum exists.
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.
Nominees for election as directors at the meeting will be elected by a
plurality of the votes of the shares present in person or represented by proxy
at the meeting. Withholding authority to vote for a nominee for director will
have no effect on the outcome of the vote. For the management proposal and the
stockholder proposal, the affirmative vote of a majority of shares of Common
Stock present or represented by proxy and entitled to vote on the matter is
necessary for approval. Because abstentions are treated as shares present or
represented and entitled to vote, abstentions with respect to the management
proposal and the stockholder proposal have the same effect as a vote against the
proposal. If you hold your shares of Common Stock through a broker, bank or
other representative, generally the broker or your representative may only vote
the Common Stock that it holds for you in accordance with your instructions.
However, if it has not timely received your instructions, the broker or your
representative may vote on certain matters for which it has discretionary voting
authority. If a broker or your representative cannot vote on a particular matter
because it does not have discretionary voting authority, this is a "broker non-
vote" on that matter. As to the election of directors, the management proposal
and the stockholder proposal, broker non-votes are not deemed to be present and
represented and are not entitled to vote, and therefore will have no effect on
the outcome of the vote.
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 March 31, 2000, consisted of
156,904,025 shares of Common Stock. Only Stockholders of record at the close of
business on March 31, 2000, are entitled to vote at the meeting. Each share is
entitled to one vote.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
For purposes of this meeting, the board of directors has fixed the number
of directors at nine, divided into three classes of three 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. Dr. Samuel W. Bodman III, Mr. Peter O. Crisp and Mr. Jim P. Manzi are
listed below as nominees for the three-year term expiring at the Annual Meeting
of the Stockholders to be held in the year 2003. Dr. Bodman and Mr. Crisp are
currently directors of the Corporation. Mr. Roger D. Wellington, a director of
the Corporation, is retiring from the board of directors at the Annual Meeting
of the Stockholders, and Mr. Manzi has been nominated to fill this board seat.
Since the 1999 Annual Meeting of the Stockholders, the following directors
have retired from the board of directors in addition to Mr. Wellington: Dr. John
M. Albertine, Dr. George N. Hatsopoulos, Mr. John N. Hatsopoulos and Mr. Donald
E. Noble. The Corporation recognizes with gratitude and appreciation the
leadership, service and dedication of each of these individuals.
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."
Nominees for Directors Whose Term of Office Will Expire in 2003
Samuel W. Bodman III Dr. Bodman, 61, has been a director of the
Corporation since May 1999. Since 1988, Mr. Bodman has served as the chairman
and chief executive officer of Cabot Corporation, a manufacturer of specialty
chemicals and materials. Dr. Bodman is also a director of Cabot Corporation,
John Hancock Financial Services, Inc., Security Capital Group Incorporated and
Westvaco Corporation.
Peter O. Crisp Mr. Crisp, 67, 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. He has been the vice chairman of Rockefeller Financial Services,
Inc. since December 1997. Mr. Crisp is also a director of American
Superconductor Corporation, Evans & Sutherland Computer Corporation, Thermedics
Inc., ThermoTrex Corporation and United States Trust Corporation.
Jim P. Manzi Mr. Manzi, 48, was the chairman, president and chief
executive officer of Lotus Development Corporation, a software manufacturer,
from 1984 until 1995. Since leaving Lotus, he has been involved in a number of
technology startup ventures, primarily related to the Internet.
Incumbent Directors Whose Term of Office Will Expire in 2001
Elias P. Gyftopoulos Dr. Gyftopoulos, 72, 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, ThermoRetec
Corporation and Trex Medical Corporation.
Frank Jungers Mr. Jungers, 73, has been a director of the Corporation
since 1978. Mr. Jungers has been a consultant on business and energy matters
since 1977. Mr. Jungers is also a director of The AES Corporation, Donaldson,
Lufkin & Jenrette, Inc., Statia Terminals Group N.V., Thermo Ecotek Corporation
and ThermoQuest Corporation.
Robert W. O'Leary Mr. O'Leary, 56, has been a director of the Corporation
since June 1998. He has been the chairman and chief executive officer of Premier
Inc., a strategic alliance of not-for-profit health care and hospital systems,
since 1995. From 1990 to 1995, Mr. O'Leary was the chairman of American Medical
International, Inc., one of the three predecessor entities of Premier Inc.
2
<PAGE>
Incumbent Directors Whose Term of Office Will Expire in 2002
Robert A. McCabe Mr. McCabe, 65, has been a director of the Corporation
since 1962. He has been the chairman of Pilot Capital Corporation, which is
engaged in private investments, since 1998 and also served as the president of
Pilot Capital Corporation from 1987 to 1998. Mr. McCabe is also a director of
Atlantic Bank & Trust Company, Burns International Services Corporation, Church
& Dwight Company and Thermo Optek Corporation.
Hutham S. Olayan Ms. Olayan, 46, 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. Ms. Olayan is also a director of Trex Medical Corporation.
Richard F. Syron Dr. Syron, 56, has been a director of the Corporation
since September 1997, its president and chief executive officer since June 1999
and chairman of the board since January 2000. From April 1994 until May 1999,
Dr. Syron was the chairman and chief executive officer of the American Stock
Exchange, Inc. Dr. Syron is also a director of Dreyfus Corporation, John Hancock
Financial Services, Inc. and Thermo Fibertek Inc.
Committees of the Board of Directors and Meetings
The board of directors has established an executive committee, an audit
committee, a human resources committee and a nominating committee. The present
members of the executive committee are Dr. Syron (Chairman), Mr. Jungers, Mr.
McCabe and Ms. Olayan. 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 directors who are not employees of the Corporation or of any
companies affiliated with Thermo Electron ("outside directors"), and its
present members are Mr. Wellington (Chairman), Mr. Crisp and Mr. McCabe. 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.
Jungers (Chairman), Dr. Bodman, Mr. Crisp and Dr. Gyftopoulos. 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
nominating committee consists solely of outside directors and its present
members are Mr. Jungers (Chairman), Dr. Bodman and Mr. O'Leary. The nominating
committee reviews the credentials of proposed nominees for directors, either to
fill vacancies or for election at the Annual Meeting, and presents
recommendations for the selection of new directors to the board of directors.
The board of directors met 17 times, the executive committee met three times,
the audit committee met twice, the human resources committee met 12 times and
the nominating committee met three times during fiscal 1999. Each director
attended at least 75% of all meetings of the board of directors and committees
on which he or she served that were held during fiscal 1999.
Compensation of Directors
Cash Compensation
Outside directors receive an annual retainer of $20,000 and a fee of $1,000
per meeting for attending regular meetings of the board of directors and $500
per meeting for participating in meetings of the committees of the board of
directors or meetings of the board of directors held by means of conference
telephone. Payment of directors' fees is made quarterly. Dr. Richard F. Syron is
a full-time employee of the Corporation and does not receive any cash
compensation from the Corporation for his service as a director. Directors are
also reimbursed for out-of-pocket expenses and in some instances for travel time
incurred in attending such meetings.
Deferred Compensation Plan for Directors
Under the Corporation's deferred compensation plan for directors (the
"Deferred Compensation Plan"), a director has the right to defer receipt of
his cash fees until he ceases to serve as a director, dies or retires from his
principal occupation. In the event of a change in control or proposed change in
control of the Corporation that is not approved by the board of directors,
deferred amounts become payable immediately. Any of the following are deemed to
be a change of control: (i) the acquisition by any person of 40% or more of the
outstanding common stock or voting securities of the Corporation; (ii) the
failure of the Corporation's board of directors to include a majority of
directors who are "continuing directors", which term is defined to include
directors who were members of the Corporation's board on
3
<PAGE>
July 1, 1999 or who subsequent to that date were nominated or elected by a
majority of directors who were "continuing directors" at the time of such
nomination or election; (iii) the consummation of a merger, consolidation,
reorganization, recapitalization or statutory share exchange involving the
Corporation or the sale or other disposition of all or substantially all of the
assets of the Corporation unless immediately after such transaction (a) all
holders of the Corporation's common stock immediately prior to such transaction
own more than 60% of the outstanding voting securities of the resulting or
acquiring corporation in substantially the same proportions as their ownership
immediately prior to such transaction and (b) no person after the transaction
owns 40% or more of the outstanding voting securities of the resulting or
acquiring corporation; or (iv) approval by stockholders of a complete
liquidation or dissolution of the Corporation. 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. As of January
1, 2000, a total of 613,360 shares of Common Stock were reserved for issuance
under the Deferred Compensation Plan and deferred units equal to approximately
338,440 shares of Common Stock were accumulated under the Deferred Compensation
Plan.
Stock-Based Compensation
Outside directors of the Corporation are eligible for the grant of stock
options under the Corporation's equity incentive plan, which is administered by
the human resources committee of the board of directors. In January 2000, each
of the outside directors was granted options to purchase 15,000 shares of Common
Stock, at an exercise price of $14.61 per share. These options may be exercised
at any time prior to the expiration of the option on the fifth anniversary of
the grant date.
In addition, the Corporation's directors stock option plan (the "Directors
Plan") provides for the automatic grant of stock options to purchase shares of
Common Stock to outside directors as additional compensation for their service
as directors. 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 are immediately exercisable at any
time from and after the grant date of the option and expire on the third
anniversary of the grant date. 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 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 January 31, 2000, options to purchase 90,625 shares of
Common Stock were outstanding under the Directors Plan, options to purchase
13,500 shares of Common Stock had lapsed, options to purchase 20,250 shares of
Common Stock had been exercised, and options to purchase 564,125 shares of
Common Stock were available for future grant.
Stock Ownership Policy for Directors
The human resources committee of the board of directors (the "Committee")
has 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 within a three-year
period. The chief executive officer of the Corporation is required to comply
with a separate stock holding policy established by the Committee, which is
described in "Committee Report on Executive Compensation--Stock Ownership
Policy."
4
<PAGE>
STOCK OWNERSHIP
The following table sets forth, as of January 31, 2000, the beneficial
ownership of the Corporation's Common Stock, by (a) each director and nominee
for director, (b) each of the Corporation's executive officers named in the
summary compensation table set forth below under the heading "Executive
Compensation" (the "named executive officers"), and (c) all directors and
current executive officers as a group, as well as their beneficial ownership of
each of the Corporation's majority-owned subsidiaries as follows: (i) Thermo
Ecotek Corporation and Thermo Trilogy Corporation, a majority-owned subsidiary
of Thermo Ecotek Corporation, (ii) Thermo Fibertek Inc. and Thermo Fibergen
Inc., a majority-owned subsidiary of Thermo Fibertek Inc., (iii) Thermo
TerraTech Inc. and The Randers Killam Group Inc. and ThermoRetec Corporation,
each a majority-owned subsidiary of Thermo TerraTech Inc., (iv) Thermedics Inc.
and Thermedics Detection Inc., Thermo Cardiosystems Inc. and Thermo Sentron
Inc., each a majority-owned subsidiary of Thermedics Inc., (v) ThermoTrex
Corporation and ThermoLase Corporation and Trex Medical Corporation, each a
majority-owned subsidiary of ThermoTrex Corporation, and (vi) Thermo Instrument
Systems Inc. and Metrika Systems Corporation, ONIX Systems Inc., Thermo
BioAnalysis Corporation, Thermo Optek Corporation, ThermoQuest Corporation and
Spectra-Physics Lasers, Inc., 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 Trilogy
Corporation, which is privately held and the common stock of Thermedics
Detection Inc., Thermo Sentron Inc. and ONIX Systems Inc. which have, subsequent
to January 31, 2000, been taken private. In addition, the following table sets
forth the beneficial ownership of Common Stock, as of January 31, 2000, 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.
<TABLE>
<CAPTION>
Thermo Thermo Thermo Thermo Thermo
Electron Ecotek Trilogy Fibertek Thermo TerraTech
Name(1) Corporation (2) Corporation (3) Corporation (4) Inc. (5) Fibergen Inc. (6) Inc. (7)
------- --------------- --------------- --------------- -------- ----------------- --------
<S> <C> <C> <C> <C> <C> <C>
FMR Corporation (24)................ 20,368,314 N/A N/A N/A N/A N/A
Franklin Mutual Advisers LLC (25)... 8,044,300 N/A N/A N/A N/A N/A
Capital Research and Management
Company (26)..................... 8,533,470 N/A N/A N/A N/A N/A
Dodge & Cox (27).................... 10,528,200 N/A N/A N/A N/A N/A
Samuel W. Bodman.................... 27,599 0 0 0 0 0
Peter O. Crisp...................... 121,767 2,941 0 8,250 1,000 0
Elias P. Gyftopoulos................ 91,399 0 0 8,250 1,000 0
George N. Hatsopoulos............... 3,909,357 25,579 0 177,429 20,000 55,471
Brian D. Holt....................... 322,941 215,600 0 0 2,000 250,000
Frank Jungers....................... 171,021 50,511 3,000 8,250 4,000 0
John T. Keiser...................... 331,636 0 0 4,923 0 0
Earl R. Lewis....................... 215,477 0 0 0 2,000 0
Jim P. Manzi........................ 0 0 0 0 0 0
Robert A. McCabe.................... 66,326 0 18,000 8,250 1,000 2,160
Hutham S. Olayan.................... 49,568 0 6,060 8,250 2,000 0
Robert W. O'Leary................... 43,830 0 0 1,500 0 0
William A. Rainville................ 361,499 4,467 0 692,424 78,000 60,000
Richard F. Syron.................... 1,074,006 0 0 0 0 0
Roger D. Wellington................. 55,795 0 8,000 17,250 12,413 1,000
All directors and current executive
officers as a group (14 persons).... 3,391,396 273,519 35,060 843,597 130,413 313,778
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
The Randers Thermo
Killam Group ThermoRetec Thermedics Thermedics Cardiosystems
Name(1) Inc. (8) Corporation (9) Inc. (10) Detection Inc. (11) Inc. (12)
------- -------- --------------- --------- ------------------- ---------
<S> <C> <C> <C> <C> <C>
FMR Corporation(24)....................... N/A N/A N/A N/A N/A
Franklin Mutual Advisers LLC.(25)......... N/A N/A N/A N/A N/A
Capital Research and Management ..........
Company (26)........................... N/A N/A N/A N/A N/A
Dodge & Cox (27).......................... N/A N/A N/A N/A N/A
Samuel W. Bodman.......................... 0 0 0 0 0
Peter O. Crisp............................ 0 0 37,076 0 2,250
Elias P. Gyftopoulos...................... 0 31,690 8,298 600 16,565
George N. Hatsopoulos..................... 48,000 9,000 63,681 21,197 11,584
Brian D. Holt............................. 4,000 0 0 2,000 0
Frank Jungers............................. 0 10,000 3,000 0 13,250
John T. Keiser............................ 4,000 0 194,693 17,000 57,473
Earl R. Lewis............................. 4,000 0 0 2,003 0
Robert A. McCabe.......................... 0 0 2,498 9,000 12,250
Jim P. Manzi.............................. 0 0 0 0 0
Hutham S. Olayan.......................... 0 0 0 0 12,250
Robert W. O'Leary......................... 0 0 0 0 0
William A. Rainville...................... 24,000 0 10,000 0 7,000
Richard F. Syron.......................... 0 0 0 0 0
Roger D. Wellington....................... 0 0 0 0 4,750
All directors and current executive
officers as a group (14 persons).......... 36,000 65,690 257,429 40,600 142,334
<CAPTION>
Thermo Sentron ThermoTrex ThermoLase
Name(1) Inc. (13) Corporation (14) Corporation (15)
------- --------- ---------------- ----------------
<S> <C> <C> <C>
FMR Corporation(24)...................... N/A N/A N/A
Franklin Mutual Advisers LLC.(25)........ N/A N/A N/A
Capital Research and Management
Company (26).......................... N/A N/A N/A
Dodge & Cox (27)......................... N/A N/A N/A
Samuel W. Bodman......................... 0 0 0
Peter O. Crisp........................... 0 5,800 22,758
Elias P. Gyftopoulos..................... 0 0 65,497
George N. Hatsopoulos.................... 17,000 55,128 29,578
Brian D. Holt............................ 2,000 1,023 0
Frank Jungers............................ 0 6,500 1,300
John T. Keiser........................... 19,500 91,023 0
Earl R. Lewis............................ 2,000 1,023 5,000
Robert A. McCabe......................... 2,000 5,500 1,976
Jim P. Manzi............................. 0 0 0
Hutham S. Olayan......................... 0 0 0
Robert W. O'Leary........................ 0 0 0
William A. Rainville..................... 7,000 6,916 10,000
Richard F. Syron......................... 0 0 0
Roger D. Wellington...................... 0 0 0
All directors and current executive
officers as a group (14 persons)......... 32,500 124,257 111,748
</TABLE>
<TABLE>
<CAPTION>
Trex Thermo Metrika ONIX Thermo
Medical Instrument Systems Systems BioAnalysis
Name(1) Corporation (16) Systems Inc.(17) Corporation (18) Inc. (19) Corporation (20)
------- ---------------- ---------------- ---------------- --------- ----------------
<S> <C> <C> <C> <C> <C>
FMR Corporation(24)...................... N/A N/A N/A N/A N/A
Franklin Mutual Advisers LLC (25)........ N/A N/A N/A N/A N/A
Capital Research and Management
Company (26).......................... N/A N/A N/A N/A N/A
Dodge & Cox (27)......................... N/A N/A N/A N/A N/A
Samuel W. Bodman......................... 0 0 0 0 0
Peter O. Crisp........................... 1,500 3,009 0 0 0
Elias P. Gyftopoulos..................... 41,956 88,842 0 0 15,254
George N. Hatsopoulos.................... 41,188 203,207 30,000 20,000 37,300
Brian D. Holt............................ 4,000 999 2,000 2,000 2,000
Frank Jungers............................ 1,650 26,412 0 40,000 2,000
John T. Keiser........................... 20,000 155,211 12,000 2,000 0
Earl R. Lewis............................ 32,000 436,499 20,000 35,333 72,500
Robert A. McCabe......................... 7,050 31,127 0 0 1,500
Jim P. Manzi............................. 0 0 0 0 0
Hutham S. Olayan......................... 48,393 3,009 0 0 0
Robert W. O'Leary........................ 0 666 0 0 0
William A. Rainville..................... 20,000 19,065 10,000 10,000 6,000
Richard F. Syron ....................... 0 0 0 0 0
Roger D. Wellington...................... 1,300 6,759 0 0 0
All directors and current executive
officers as a group (14 persons)......... 231,849 970,032 69,000 119,333 118,254
<CAPTION>
Thermo
Optek ThermoQuest Spectra-Physics
Name(1) Corporation (21) Corporation (22) Lasers Inc. (23)
------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
FMR Corporation(24)...................... N/A N/A N/A
Franklin Mutual Advisers LLC (25)........ N/A N/A N/A
Capital Research and Management
Company (26).......................... N/A N/A N/A
Dodge & Cox (27)......................... N/A N/A N/A
Samuel W. Bodman......................... 0 0 0
Peter O. Crisp........................... 0 0 0
Elias P. Gyftopoulos..................... 0 0 0
George N. Hatsopoulos.................... 113,100 92,600 0
Brian D. Holt............................ 6,000 6,000 0
Frank Jungers............................ 0 48,650 0
John T. Keiser........................... 0 0 0
Earl R. Lewis............................ 252,000 135,000 0
Robert A. McCabe......................... 70,961 0 0
Jim P. Manzi............................. 0 0 0
Hutham S. Olayan......................... 0 0 0
Robert W. O'Leary........................ 0 0 0
William A. Rainville..................... 15,000 15,000 0
Richard F. Syron ....................... 0 0 0
Roger D. Wellington...................... 0 0 0
All directors and current executive
officers as a group (14 persons)......... 383,961 229,650 0
</TABLE>
6
<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. Bodman, Mr. Crisp, Dr. Gyftopoulos, Dr. Hatsopoulos, Mr. Holt, Mr. Jungers,
Mr. Keiser, Mr. Lewis, Mr. McCabe, Ms. Olayan, Mr. O'Leary, Mr. Rainville, Dr.
Syron, Mr. Wellington and all directors and current executive officers as a
group include 26,000, 25,596, 27,442, 25,448, 284,948, 24,673, 263,230, 212,278,
27,442, 27,442, 27,000, 294,630, 1,011,000, 24,673 and 2,660,715 shares,
respectively, that such person or members of the group have the right to acquire
within 60 days of January 31, 2000, through the exercise of stock options.
Shares beneficially owned by Dr. Hatsopoulos and all directors and current
executive officers as a group include 2,266 and 1,071 shares, respectively,
allocated to their respective accounts maintained pursuant to the Corporation's
employee stock ownership plan (the "ESOP"). Shares beneficially owned by Dr.
Bodman, Mr. Crisp, Dr. Gyftopoulos, Mr. Jungers, Mr. McCabe, Ms. Olayan, Mr.
O'Leary, Dr. Syron , Mr. Wellington and all directors and current executive
officers as a group include 1,599, 49,277, 1,378, 80,427, 34,725, 19,876, 3,830,
2,506, 26,342 and 219,960 shares, respectively, allocated to accounts maintained
pursuant to the Deferred Compensation Plan. Shares beneficially owned by Dr.
Hatsopoulos include 144,437 shares held by his spouse, 311,708 shares held by a
family trust of which his spouse is the trustee and 566,262 shares held by a
family limited partnership indirectly controlled by Dr. Hatsopoulos' spouse.
Shares beneficially owned by Dr. Hatsopoulos also include 50,000 shares that a
family trust, of which Dr. Hatsopoulos' spouse is the trustee, has the right to
acquire within 60 days of January 31, 2000, through the exercise of stock
options and 2,149,500 shares that a family limited partnership indirectly
controlled by Dr. Hatsopoulos' spouse has the right to acquire within 60 days of
January 31, 2000, through the exercise of stock options. Dr. Hatsopoulos
disclaims beneficial ownership of the shares owned by the family limited
partnership except to the extent of his pecuniary interest therein. Shares
beneficially owned by Ms. Olayan do not include 6,150,000 shares owned by
Crescent Holding GmbH, a member of the Olayan Group. Crescent Holding GmbH is
indirectly controlled by Suliman S. Olayan, Ms. Olayan's father. Ms. Olayan
disclaims beneficial ownership of the shares owned by Crescent Holding GmbH.
Except for Dr. Hatsopoulos, who beneficially owned 2.46% of the Common Stock
outstanding as of January 31, 2000, no director or named 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 2.16%
of the Common Stock outstanding as of January 31, 2000.
(3) Shares of the common stock of Thermo Ecotek Corporation beneficially
owned by Dr. Hatsopoulos, Mr. Holt, Mr. Jungers, and all directors and current
executive officers as a group include 15,000, 210,000, 6,000 and 216,000 shares,
respectively, that such person or members of the group have the right to acquire
within 60 days of January 31, 2000, through the exercise of stock options.
Shares beneficially owned by Mr. Jungers and all directors and current executive
officers as a group include 3,961 shares allocated to Mr. Jungers' account
maintained pursuant to Thermo Ecotek's deferred compensation plan for directors.
The directors and the named executive officers did not individually, and the
directors and current executive officers as a group did not, beneficially own
more than 1% of the Thermo Ecotek Corporation common stock outstanding as of
January 31, 2000.
(4) 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. Ms. Olayan disclaims beneficial ownership of the shares
owned by Crescent International Holdings Ltd. The directors and the named
executive officers did not individually, and the directors and current executive
officers as a group did not, beneficially own more than 1% of the Thermo Trilogy
Corporation common stock outstanding as of January 31, 2000.
(5) Shares of the common stock of Thermo Fibertek Inc. beneficially owned
by Mr. Crisp, Dr. Gyftopoulos, Dr. Hatsopoulos, Mr. Jungers, Mr. McCabe, Ms.
Olayan, Mr. O'Leary, Mr. Rainville, Mr. Wellington and all directors and current
executive officers as a group include 8,250, 8,250, 139,910, 8,250, 8,250,
8,250, 1,500, 550,000, 8,250 and 687,250 shares, respectively, that such person
or members of the group have the right to acquire within 60 days of January 31,
2000, through the exercise of stock options. Except for Mr. Rainville, who
7
<PAGE>
beneficially owned 1.12% of the common stock of Thermo Fibertek Inc. outstanding
as of January 31, 2000, no director or named executive officer beneficially
owned more than 1% of the Thermo Fibertek Inc. common stock outstanding as of
January 31, 2000; all directors and current executive officers as a group
beneficially owned 1.37% of the Thermo Fibertek Inc. common stock outstanding as
of January 31, 2000.
(6) Shares of the common stock of Thermo Fibergen Inc. beneficially owned
by Mr. Crisp, Dr. Gyftopoulos, Dr. Hatsopoulos, Mr. Holt, Mr. Jungers, Mr.
Lewis, Mr. McCabe, Ms. Olayan, Mr. Rainville, Mr. Wellington and all directors
and current executive officers as a group include 1,000, 1,000, 20,000, 2,000,
1,000, 2,000, 1,000, 1,000, 75,000, 11,000 and 129,000 shares, respectively,
that such person or members of the group have the right to acquire within 60
days of January 31, 2000, through the exercise of stock options. Shares
beneficially owned by Mr. Wellington and all directors and current executive
officers as a group include 1,413 shares allocated to Mr. Wellington's account
maintained pursuant to Thermo Fibergen's deferred compensation plan for
directors. The directors and the named executive officers did not individually,
and the directors and current executive officers as a group did not,
beneficially own more than 1% of the Thermo Fibergen Inc. common stock
outstanding as of January 31, 2000. In addition, Mr. Jungers, Mr. Rainville and
all directors and current executive officers as a group beneficially owned
1,500, 1,500 and 3,000 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 Inc. common
stock back to Thermo Fibergen Inc. at certain times in the future at a price of
$12.75 per share.
(7) Shares of the common stock of Thermo TerraTech Inc. beneficially owned
by Dr. Hatsopoulos, Mr. Holt, Mr. Rainville and all directors and current
executive officers as a group include 40,000, 250,000, 60,000 and 310,000
shares, respectively, that such person or members of the group have the right to
acquire within 60 days of January 31, 2000, through the exercise of stock
options. Shares beneficially owned by Dr. Hatsopoulos and all directors and
current executive officers as a group include 309 and 299 shares, respectively,
allocated to their respective accounts maintained pursuant to the Corporation's
ESOP. Shares beneficially owned by Dr. Hatsopoulos include 96 shares held by his
spouse. The directors and the named executive officers did not individually, and
the directors and current executive officers as a group did not, beneficially
own more than 1% of the Thermo TerraTech Inc. common stock outstanding as of
January 31, 2000.
(8) Shares of the common stock of The Randers Killam Group Inc.
beneficially owned by Dr. Hatsopoulos, Mr. Holt, Mr. Keiser, Mr. Lewis, Mr.
Rainville and all directors and current executive officers as group include
48,000, 4,000, 4,000, 4,000, 24,000 and 36,000 shares, respectively, that such
person or members of the group have the right to acquire within 60 days of
January 31, 2000, through the exercise of stock options. The directors and the
named executive officers did not individually, and the directors and current
executive officers as a group did not, beneficially own more than 1% of The
Randers Killam Group Inc. common stock outstanding as of January 31, 2000.
(9) Shares of the common stock of ThermoRetec Corporation beneficially
owned by Dr. Gyftopuolos, Dr. Hatsopoulos, Mr. Rainville and all directors and
current executive officers as a group include 29,600, 7,500, 22,500 and 52,100
shares, respectively, that such person or members of the group have the right to
acquire within 60 days of January 31, 2000, through the exercise of stock
options. Shares beneficially owned by Dr. Gyftopoulos and all directors and
current executive officers as a group include 1,090 shares allocated to Dr.
Gyftopoulos' account maintained pursuant to ThermoRetec Corporation's deferred
compensation plan for directors. The directors and the named executive officers
did not individually, and the directors and current executive officers as a
group did not, beneficially own more than 1% of the ThermoRetec Corporation
common stock outstanding as of January 31, 2000.
(10) Shares of the common stock of Thermedics Inc. beneficially owned by
Mr. Crisp, Dr. Gyftopoulos, Mr. Keiser and all directors and current executive
officers as a group include 9,000, 2,750, 187,900 and 199,650 shares,
respectively, that such person or members of the group have the right to acquire
within 60 days of January 31, 2000, through the exercise of stock options.
Shares beneficially owned by Dr. Hatsopoulos and all directors and current
executive officers as a group include 1,635 and 1,119 shares, respectively,
allocated to their respective accounts maintained pursuant to the Corporation's
ESOP. Shares beneficially owned by Mr. Crisp and all directors and current
executive officers as a group include 9,971 shares allocated to Mr. Crisp's
account maintained pursuant to Thermedics Inc.'s deferred compensation plan for
directors. Shares beneficially owned by Dr. Hatsopoulos include 654 shares held
by his spouse and 50,000 shares that a family limited partnership indirectly
controlled by Dr. Hatsopoulos' spouse has the right to acquire within 60 days of
January 31, 2000, through the
8
<PAGE>
exercise of stock options. Dr. Hatsopoulos disclaims beneficial ownership of the
shares owned by the family limited partnership except to the extent of his
pecuniary interest therein. The directors and the named executive officers did
not individually, and the directors and current executive officers as a group
did not, beneficially own more than 1% of the Thermedics Inc. common stock
outstanding as of January 31, 2000.
(11) Shares of the common stock of Thermedics Detection Inc. beneficially
owned by Dr. Hatsopoulos, Mr. Holt, Mr. Keiser, Mr. Lewis, Mr. Rainville and all
directors and current executive officers as a group include 20,000, 2,000,
17,000, 2,000, 10,000 and 31,000 shares, respectively, that such person or
members of the group have the right to acquire within 60 days of January 31,
2000, through the exercise of stock options. Shares beneficially owned by Dr.
Hatsopoulos include 57 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. The directors and the named executive officers did not
individually, and the directors and current executive officers as a group did
not, beneficially own more than 1% of the Thermedics Detection Inc. common stock
outstanding as of January 31, 2000.
(12) Shares of the common stock of Thermo Cardiosystems Inc. beneficially
owned by Mr. Crisp, Dr. Gyftopoulos, Mr. Jungers, Mr. Keiser, Mr. McCabe, Ms.
Olayan, Mr. Wellington and all directors and current executive officers as a
group include 2,250, 3,750, 1,000, 50,200, 1,000, 1,000, 1,000 and 80,200
shares, respectively, that such person or members of the group have the right to
acquire within 60 days of January 31, 2000, through the exercise of stock
options. Shares beneficially owned by Dr. Gyftopoulos and all directors and
current executive officers as a group include 565 shares allocated to Dr.
Gyftopoulos' account maintained pursuant to Thermo Cardiosystems Inc.'s deferred
compensation plan for directors. The directors and the named executive officers
did not individually, and the directors and current executive officers as a
group did not, beneficially own more than 1% of the Thermo Cardiosystems Inc.
common stock outstanding as of January 31, 2000.
(13) Shares of the common stock of Thermo Sentron Inc. beneficially owned
by Dr. Hatsopoulos, Mr. Holt, Mr. Keiser, Mr. Lewis, Mr. Rainville and all
directors and current executive officers as a group include 15,000, 2,000,
19,500, 2,000, 7,000 and 30,500 shares, respectively, that such person or
members of the group have the right to acquire within 60 days of January 31,
2000, through the exercise of stock options. The directors and the named
executive officers did not individually, and the directors and current executive
officers as a group did not, beneficially own more than 1% of the Thermo Sentron
Inc. common stock outstanding as of January 31, 2000.
(14) Shares of the common stock of ThermoTrex Corporation beneficially
owned by Mr. Crisp, Dr. Hatsopoulos, Mr. Holt, Mr. Keiser, Mr. Lewis, Mr.
Rainville and all directors and current executive officers as a group include
5,800, 40,239, 1,023, 91,023, 1,023, 5,119 and 103,988 shares, respectively,
that such person or members of the group have the right to acquire within 60
days of January 31, 2000, through the exercise of stock options. Shares
beneficially owned by Mr. Crisp and all directors and current executive officers
as a group include 5,280 shares allocated to Mr. Crisp's account maintained
pursuant to ThermoTrex Corporation's deferred compensation plan for directors.
Shares beneficially owned by Dr. Hatsopoulos include 160 shares held by his
spouse. The directors and the named executive officers did not individually, and
the directors and current executive officers as a group did not, beneficially
own more than 1% of the ThermoTrex Corporation common stock outstanding as of
January 31, 2000.
(15) Shares of the common stock of ThermoLase Corporation beneficially
owned by Mr. Crisp, Dr. Gyftopoulos, Mr. Holt, Mr. Lewis, Mr. Rainville and all
directors and current executive officers as a group include 22,758, 62,400,
5,000, 5,000, 10,000 and 105,158 shares, respectively, that such person or
member of the group have the right to acquire within 60 days of January 31,
2000, through the exercise of stock options. Shares beneficially owned by Dr.
Gyftopoulos and all directors and current executive officers as a group include
2,097 shares allocated to Dr. Gyftopoulos' account maintained pursuant to
ThermoLase Corporation's deferred compensation plan for directors. Shares
beneficially owned by Dr. Hatsopoulos include 32 shares held by his spouse. In
addition, Mr. McCabe and all directors and current executive officers as a group
beneficially owned 831 redemption rights issued by ThermoLase Corporation. Each
of these rights permits the holder to sell one share of the ThermoLase common
stock back to ThermoLase Corporation at certain times in the future at a price
of $20.25 per share. The directors and the named executive officers did not
individually, and the directors and current executive officers as a group did
not, beneficially own more than 1% of the ThermoLase Corporation common stock
outstanding as of January 31, 2000.
9
<PAGE>
(16) Shares of the common stock of Trex Medical Corporation beneficially
owned by Mr. Crisp, Dr. Gyftopoulos, Dr. Hatsopoulos, Mr. Holt, Mr. Jungers, Mr.
Keiser, Mr. Lewis, Mr. McCabe, Ms. Olayan, Mr. Rainville, Mr. Wellington and all
directors and current executive officers as a group include 1,500, 40,000,
40,000, 4,000, 1,000, 20,000, 32,000, 1,000, 40,000, 20,000, 1,000 and 214,500
shares, respectively, that such person or members of the group have the right to
acquire within 60 days of January 31, 2000, through the exercise of stock
options. Shares beneficially owned by Dr. Gyftopoulos, Ms. Olayan and all
directors and current executive officers as a group include 956, 3,393 and 4,369
shares allocated to accounts maintained pursuant to Trex Medical Corporation's
deferred compensation plan for directors. Shares beneficially owned by Dr.
Hatsopoulos include 16 shares held by his spouse and 40,000 shares that a family
limited partnership indirectly controlled by Dr. Hatsopoulos' spouse has the
right to acquire within 60 days of January 31, 2000 through the exercise of
stock options. Dr. Hatsopoulos disclaims beneficial ownership of the shares
owned by the family limited partnership except to the extent of his pecuniary
interest therein. Shares beneficially owned by Ms. Olayan do not include 350,000
shares owned by Olayan America Corporation, 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 Olayan America
Corporation. The directors and the named executive officers did not
individually, and the directors and current executive officers as a group did
not, beneficially own more than 1% of the Trex Medical Corporation common stock
outstanding as of January 31, 2000.
(17) Shares of the common stock of Thermo Instrument Systems Inc.
beneficially owned by Mr. Crisp, Dr. Gyftopoulos, Dr. Hatsopoulos, Mr. Holt, Mr.
Jungers, Mr. Keiser, Mr. Lewis, Mr. McCabe, Ms. Olayan, Mr. O'Leary, Mr.
Rainville, Mr. Wellington and all directors and current executive officers as a
group include 3,009, 40,586, 24,066, 999, 11,443, 71,311, 409,081, 7,925, 3,009,
666, 19,065, 3,009 and 733,790 shares, respectively, that such person or members
of the group have the right to acquire within 60 days of January 31, 2000,
through the exercise of stock options. Shares beneficially owned by Dr.
Hatsopoulos and all directors and current executive officers as a group include
598 and 468 shares, respectively, allocated to accounts maintained pursuant to
the Corporation's ESOP. Shares beneficially owned by Mr. Jungers, Mr. McCabe and
all directors and current executive officers as a group include 13,563, 8,908
and 22,471 shares allocated to accounts maintained pursuant to Thermo Instrument
Systems Inc.'s deferred compensation plan for directors. Shares beneficially
owned by Dr. Hatsopoulos include 26,773 shares held by his spouse and 117,187
shares that a family limited partnership indirectly controlled by Dr.
Hatsopoulos' spouse has the right to acquire within 60 days of January 31, 2000
through the exercise of stock options. Dr. Hatsopoulos disclaims beneficial
ownership of the shares owned by the family limited partnership except to the
extent of his pecuniary interest therein. Shares beneficially owned by Mr. Lewis
include 2,987 shares held by his spouse. The directors and the named executive
officers did not individually, and the directors and current executive officers
as a group did not, beneficially own more than 1% of the Thermo Instrument
Systems Inc. common stock outstanding as of January 31, 2000.
(18) Shares of the common stock of Metrika Systems Corporation beneficially
owned by Dr. Hatsopoulos, Mr. Holt, Mr. Keiser, Mr. Lewis, Mr. Rainville and all
directors and current executive officers as group include 30,000, 2,000, 12,000,
20,000, 10,000 and 69,000 shares, respectively, that such person or members of
the group have the right to acquire within 60 days of January 31, 2000, through
the exercise of stock options. The directors and the named executive officers
did not individually, and the directors and current executive officers as a
group did not, beneficially own more than 1% of the Metrika Systems Corporation
common stock outstanding as of January 31, 2000.
(19) Shares of the common stock of ONIX Systems Inc. beneficially owned by
Dr. Hatsopoulos, Mr. Holt, Mr. Jungers, Mr. Keiser, Mr. Lewis, Mr. Rainville and
all directors and current executive officers as a group include 20,000, 2,000,
30,000, 2,000, 33,333, 10,000 and 107,333 shares, respectively, that such person
or members of the group have the right to acquire within 60 days of January 31,
2000, through the exercise of stock options. 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.
The directors and named executive officers did not individually, and the
directors and current executive officers as a group did not, beneficially own
more than 1% of the ONIX Systems Inc. common stock outstanding as of January 31,
2000.
10
<PAGE>
(20) Shares of the common stock of Thermo BioAnalysis Corporation
beneficially owned by Dr. Hatsopoulos, Mr. Holt, Mr. Lewis, Mr. Rainville and
all directors and current executive officers as a group include 2,300, 2,000,
50,000, 500, 6,000 and 77,000 shares, respectively, that such person or members
of the group have the right to acquire within 60 days of January 31, 2000,
through the exercise of stock options. Shares beneficially owned by Dr.
Gyftopoulos and all directors and current executive officers as a group include
254 shares allocated to Dr. Gyftopoulos' account maintained pursuant to Thermo
BioAnalysis Corporation's deferred compensation plan for directors. Shares
beneficially owned by Dr. Hatsopoulos include 15,000 shares that a family
limited partnership indirectly controlled by Dr. Hatsopoulos' spouse has the
right to acquire within 60 days of January 31, 2000 through the exercise of
stock options. Dr. Hatsopoulos disclaims beneficial ownership of the shares
owned by the family limited partnership except to the extent of his pecuniary
interest therein. Shares beneficially owned by Mr. Lewis include 1,000 shares
held by his spouse. The directors and the named executive officers did not
individually, and the directors and current executive officers as a group did
not, beneficially own more than 1% of the Thermo BioAnalysis Corporation common
stock outstanding as of January 31, 2000.
(21) Shares of the common stock of Thermo Optek Corporation beneficially
owned by Dr. Hatsopoulos, Mr. Holt, Mr. Lewis, Mr. McCabe, Mr. Rainville and all
directors and current executive officers as a group include 3,100, 6,000,
225,000, 45,000, 15,000 and 331,000 shares, respectively, that such person or
members of the group have the right to acquire within 60 days of January 31,
2000, through the exercise of stock options. Shares beneficially owned by Mr.
Lewis include 2,500 shares held by his spouse. Shares beneficially owned by Dr.
Hatsopoulos include 90,000 shares that a family limited partnership indirectly
controlled by Dr. Hatsopoulos' spouse has the right to acquire within 60 days of
January 31, 2000, through the exercise of stock options. Dr. Hatsopoulos
disclaims beneficial ownership of the shares owned by the family limited
partnership except to the extent of his pecuniary interest therein. Shares
beneficially owned by Mr. McCabe include 5,000 shares held by a trust of which
he and members of his family are trustees, 7,171 shares issuable upon conversion
of $100,000 in principal amount of the 5% convertible subordinated debentures
due 2000 issued by Thermo Optek Corporation and 790 shares allocated to Mr.
McCabe's account maintained pursuant to Thermo Optek Corporation's deferred
compensation plan for directors. The directors and the named executive officers
did not individually, and the directors and current executive officers as a
group did not, beneficially own more than 1% of the Thermo Optek Corporation
common stock outstanding as of January 31, 2000.
(22) Shares of the common stock of ThermoQuest Corporation beneficially
owned by Dr. Hatsopoulos, Mr. Holt, Mr. Jungers, Mr. Lewis, Mr. Rainville and
all directors and current executive officers as a group include 2,600, 6,000,
45,000, 125,000, 15,000 and 216,000 shares, respectively, that such person or
members of the group have the right to acquire within 60 days of January 31,
2000, through the exercise of stock options. Shares beneficially owned by Dr.
Hatsopoulos include 90,000 shares that a family limited partnership indirectly
controlled by Dr. Hatsopoulos' spouse has the right to acquire within 60 days of
January 31, 2000 through the exercise of stock options. Dr. Hatsopoulos
disclaims beneficial ownership of the shares owned by the family limited
partnership except to the extent of his pecuniary interest therein. Shares
beneficially owned by Mr. Jungers and all directors and current executive
officers as a group include 2,650 shares allocated to Mr. Jungers' account
maintained pursuant to ThermoQuest Corporation's deferred compensation plan for
directors. The directors and the named executive officers did not individually,
and the directors and current executive officers as a group did not,
beneficially own more than 1% of the ThermoQuest Corporation common stock
outstanding as of January 31, 2000.
(23) The directors, named executive officers and current executive officers
did not individually or as a group beneficially own any of the Spectra-Physics
Lasers, Inc. common stock outstanding as of January 31, 2000.
(24) 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, 1999. The address of FMR Corp. is 82 Devonshire Street, Boston,
Massachusetts 02109. As of December 31, 1999, FMR Corp. beneficially owned
approximately 12.872% of the outstanding Common Stock.
(25) Information regarding the number of shares of Common Stock
beneficially owned by Franklin Mutual Advisers, LLC is based on the most recent
Schedule 13G of Franklin Mutual Advisers, LLC received by the Corporation, which
reported such ownership as of December 31, 1999. The address of Franklin Mutual
Advisers, LLC is 51 John F. Kennedy Parkway, Short Hills, NJ 07078. As of
December 31, 1999, Franklin Mutual Advisers, LLC beneficially owned
approximately 5.1% of the outstanding Common Stock. The shares of Common Stock
11
<PAGE>
reported on the Schedule 13G of Franklin Mutual Advisers, LLC are beneficially
owned by one or more open-end investment companies or other managed accounts on
behalf of advisory clients of Franklin Mutual Advisers, LLC. Franklin Mutual
Advisers, LLC disclaims beneficial ownership in the shares of Common Stock
covered by its Schedule 13G.
(26) Information regarding the number of shares of Common Stock
beneficially owned by Capital Research and Management Company is based on the
most recent Schedule 13G of Capital Research and Management Company received by
the Corporation, which reported such ownership as of December 31, 1999. The
address of Capital Research and Management Company is 333 South Hope Street, Los
Angeles, CA 90071. Shares reported as beneficially owned by Capital Research and
Management Company include 608,470 shares issuable upon conversion of
$23,000,000 principal amount of the Corporation's 4 1/4% convertible
subordinated debentures due 2003. As of December 31, 1999, Capital Research and
Management Company beneficially owned approximately 5.4% of the outstanding
Common Stock.
(27) Information regarding the number of shares of Common Stock
beneficially owned by Dodge & Cox Incorporated is based on the most recent
Schedule 13G of Dodge & Cox Incorporated received by the Corporation, which
reported such ownership as of December 31, 1999. The address of Dodge & Cox
Incorporated is One Sansome Street, 35/th/ Floor, San Francisco, CA 94104. As of
December 31, 1999, Dodge & Cox beneficially owned approximately 6.7% of the
outstanding Common Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") 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 1999 except in the following instance. Mr.
Keiser, an executive officer of the Corporation, filed one Form 4 late reporting
one late transaction, relating to the exercise of options to purchase Common
Stock.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes compensation for services to the Corporation
received during the last three fiscal years by the Corporation's chief executive
officer, four other most highly compensated executive officers who were employed
by the Corporation as of the end of fiscal 1999, and the Corporation's retired
chief executive officer. These executive officers are collectively referred to
herein as the "named executive officers."
12
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
- ----------------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
----------------------
Restricted Securities
Name and Fiscal Annual Compensation
------------------- Stock Underlying All Other
Principal Position Year Salary Bonus Award Options (1) Compensation (2)
- ------------------ ------ ------ ----- ------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard F. Syron 1999 $ 514,667(3) $ 370,000 (3) 199,500 (TMO) (4) 1,000,000 (TMO) $309,402 (5)
Chief Executive Officer
and President
- ----------------------------------------------------------------------------------------------------------------------------------
Earl R. Lewis 1999 $ 320,000 $ 255,000 20,026 (TMO) (4) 150,000 (THI) $ 14,868 (6)
Chief Operating Officer, 80,102 (THI) (7)
Measurement and 1998 $ 280,000 $ 200,000 -- 129,928 (TMO) $ 15,939 (6)
Detection 33,333 (ONX)
4,000 (RGI)
2,000 (TDX)
2,000 (TRIL)
1,023 (TKN)
1997 $ 220,000 $ 250,000 -- 20,000 (MKA) $ 16,710 (6)
79,166 (THI)
75,000 (TMQ)
- ----------------------------------------------------------------------------------------------------------------------------------
William A. Rainville 1999 $ 270,000 $ 170,000 28,370 (TMO) (4) 4,300 (TMO) $ 25,422 (8)
Chief Operating Officer, 71,498 (TFT) (9) 35,000 (TFG)
Recycling and Resource 40,000 (TFT)
Recovery 1998 $ 260,000 $ 140,000 -- 127,293 (TMO) $ 28,922 (8)
10,000 (MKA)
10,000 (ONX)
24,000 (RGI)
10,000 (TDX)
4,999 (THI)
5,119 (TKN)
1997 $ 220,000 $ 200,000 -- 3,400 (TMO) $ 28,340 (8)
240,000 (TFT)
- ----------------------------------------------------------------------------------------------------------------------------------
John T. Keiser 1999 $ 300,000 $ 140,000 68,421 (TMO) (4) 3,200 (TMO) $ 7,200
Chief Operating Officer, 28,689 (TMD) (10) 110,700 (TMD)
Biomedical 700 (TCA)
90,000 (TKN)
1998 $ 240,000 $ 160,000 -- 152,912 (TMO) $ 7,200
2,000 (MKA)
2,000 (ONX)
4,000 (RGI)
60,700 (TMD)
17,000 (TDX)
25,000 (TCA)
12,000 (TSR)
2,000 (TRIL)
999 (THI)
1,023 (TKN)
1997 $ 155,000 $ 160,000 -- 53,100 (TMO) $ 7,125
10,000 (MKA)
20,000 (TCA)
800 (TMD)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
- ----------------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
----------------------
Restricted Securities
Name and Fiscal Annual Compensation
------------------- Stock Underlying All Other
Principal Position Year Salary Bonus Award Options (1) Compensation (2)
- ------------------ ------ ------ ----- ------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Brian D. Holt 1999 $280,000 $170,000 38,382 (TMO) (4) 300 (TMO) $7,200
Chief Operating Officer, 58,800 (TCK) (11) 250,000 (TTT)
Energy and Environment 1998 $225,000 $120,000 -- 120,798 (TMO) $6,429
2,000 (MKA)
2,000 (ONX)
4,000 (RGI)
2,000 (TDX)
1,023 (TKN)
999 (THI)
1997 $205,000 $230,000 -- 100 (TMO) $6,107
60,000 (TCK)
- ------------------------------------------------------------------------------------------------------------------------------
George N. Hatsopoulos 1999 $700,000 $470,000 250,850 (TMO) (4) 300,000 (TMO) $7,200
Retired Chief Executive 1998 $585,000 $300,000 -- 206,986 (TMO) $7,200
Officer (12) 20,000 (MKA)
20,000 (ONX)
48,000 (RGI)
2,300 (TBA)
3,100 (TOC)
2,600 (TMQ)
16,680 (THI)
20,000 (TRIL)
10,239 (TKN)
1997 $560,000 $630,000 -- 200,000 (TMO) $7,125
10,000 (MKA)
20,000 (TDX)
- ------------------------------------------------------------------------------------------------------------------------------
</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
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),
ONIX Systems Inc. (designated in the table as ONX), The Randers Killam Group
Inc. (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 Ecotek Corporation (designated in
the table as TCK), Thermo Fibergen Inc. (designated in the table as TFG), Thermo
Fibertek Inc. (designated in the table as TFT), Thermo Instrument Systems Inc.
(designated in the table as THI), Thermo Optek Corporation (designated in the
table as TOC), ThermoQuest Corporation (designated in the table as TMQ), Thermo
Sentron Inc. (designated in the table as TSR), ThermoTrex Corporation
(designated in the table as TKN), Thermo TerraTech Inc. (designated in the table
as TTT) and Thermo Trilogy Corporation (designated in the table as TRIL).
Certain options reported in the proxy statement for prior years have been
assumed by parent companies in connection with mergers effected as part of the
Corporation's reorganization and have been restated in the table as options in
the parent companies.
(2) For all the named executive officers except for Dr. Syron and Mr.
Rainville, this amount includes 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 includes employer contributions to his account
under the profit sharing plan of Thermo Web Systems Inc., a subsidiary of Thermo
Fibertek Inc., as well as a cash payment of $3,491, $5,342 and $5,189 in fiscal
1999, 1998 and 1997, respectively, in connection with that subsidiary's profit
sharing program.
14
<PAGE>
(3) Dr. Syron was appointed president and chief executive officer of the
Corporation on June 1, 1999. The salary and bonus reported for fiscal 1999
represents the amount paid for the portion of the year during which Dr. Syron
performed services for the Corporation.
(4) In fiscal 1999, Dr. Syron, Mr. Lewis, Mr. Rainville, Mr. Keiser, Mr. Holt
and Dr. Hatsopoulos were awarded 10,500, 1,200, 1,700, 4,100, 2,300 and 17,300
shares, respectively, of restricted Common Stock of the Corporation with a value
of $199,500, $20,026, $28,370, $68,421, $38,382 and $250,850, respectively, on
the grant date. The restricted stock awards vest 100% on the third anniversary
of the grant date. Any cash dividends paid on restricted shares are entitled to
be retained by the recipient without regard to vesting. Any non-cash dividends
paid on restricted shares are entitled to be retained by the recipient subject
to the same vesting restrictions as the underlying shares. At the end of fiscal
1999, Dr. Syron, Mr. Lewis, Mr. Rainville, Mr. Keiser, Mr. Holt and Dr.
Hatsopoulos held 10,500, 1,200, 1,700, 4,100, 2,300 and 17,300 restricted
shares, respectively, with an aggregate value of $157,000, $18,000, $25,500,
$61,500, $34,500 and $259,500, respectively.
(5) This amount represents the reimbursement by the Corporation of $309,402 in
expenses associated with Dr. Syron's relocation to Waltham, Massachusetts. See
"Executive Compensation - Employment Agreement with Dr. Richard F. Syron."
(6) In addition to the matching contribution referred to in footnote (2), such
amounts include $7,668, $8,739 and $9,585, which represent the amount of
compensation attributable in fiscal 1999, 1998 and 1997, respectively, to an
interest-free loan provided to Mr. Lewis pursuant to the stock holding
assistance plan of Thermo Optek Corporation, a subsidiary of Thermo Instrument
Systems Inc. See "Relationship with Affiliates--Stock Holding Assistance
Plans."
(7) In fiscal 1999, Mr. Lewis was awarded 4,800 shares of restricted common
stock of Thermo Instrument Systems Inc. with a value of $80,102 on the grant
date. The restricted stock award vests 100% on the third anniversary of the
grant date. Any cash dividends paid on restricted shares are entitled to be
retained by the recipient without regard to vesting. Any non-cash dividends paid
on restricted shares are entitled to be retained by the recipient subject to the
same vesting restrictions as the underlying shares. At the end of fiscal 1999,
Mr. Lewis held 4,800 restricted shares with an aggregate value of $53,400.
(8) In addition to the matching contribution referred to in footnote (2), such
amounts include $4,667, $5,319 and $5,471, which represent the amount of
compensation attributable in fiscal 1999, 1998 and 1997, 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."
(9) In fiscal 1999, Mr. Rainville was awarded 9,300 shares of restricted common
stock of Thermo Fibertek Inc. with a value of $71,498 on the grant date. The
restricted stock award vests 100% on the third anniversary of the grant date.
Any cash dividends paid on restricted shares are entitled to be retained by the
recipient without regard to vesting. Any non-cash dividends paid on restricted
shares are entitled to be retained by the recipient subject to the same vesting
restrictions as the underlying shares. At the end of fiscal 1999, Mr. Rainville
held 9,300 restricted shares with an aggregate value of $66,263.
(10) In fiscal 1999, Mr. Keiser was awarded 3,000 shares of restricted common
stock of Thermedics Inc. with a value of $28,689 on the grant date. The
restricted stock award vests 100% on the third anniversary of the grant date.
Any cash dividends paid on restricted shares are entitled to be retained by the
recipient without regard to vesting. Any non-cash dividends paid on restricted
shares are entitled to be retained by the recipient subject to the same vesting
restrictions as the underlying shares. At the end of fiscal 1999, Mr. Keiser
held 3,000 restricted shares with an aggregate value of $16,314.
(11) In fiscal 1999, Mr. Holt was awarded 5,600 shares of restricted common
stock of Thermo Ecotek Corporation with a value of $58,800 on the grant date.
The restricted stock award vests 100% on the third anniversary of the grant
date. Any cash dividends paid on restricted shares are entitled to be retained
by the recipient without regard to vesting. Any non-cash dividends paid on
restricted shares are entitled to be retained by the recipient subject to the
same vesting restrictions as the underlying shares. At the end of fiscal 1999,
Mr. Holt held 5,600 restricted shares with an aggregate value of $29,753.
(12) Dr. Hatsopoulos retired as the president and chief executive officer of the
Corporation effective June 1, 1999.
15
<PAGE>
Stock Options Granted During Fiscal 1999
The following table sets forth information concerning individual grants of
stock options made during fiscal 1999 to the Corporation's 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 1999.
<TABLE>
<CAPTION>
Option Grants in Fiscal 1999
- ------------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Percent of Value at Assumed
Number of Securities Total Options Annual Rates of Stock
Underlying Options Granted to Exercise Price Price Appreciation for
Granted and Employees in Per Expiration Option Term (2)
---------------
Name Company (1) Fiscal Year Share Date 5% 10%
---- ----------- ----------- ------- -------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Richard F. Syron 1,000,000 (TMO) 33.1% $19.10 06/01/06 $7,775,600 $18,120,500
- -------------------------------------------------------------------------------------------------------------------------------
Earl R. Lewis 150,000 (THI) 11.3% $14.76 01/06/06 $ 901,320 $ 2,100,465
- -------------------------------------------------------------------------------------------------------------------------------
William A. Rainville 4,300 (TMO) 0.1% $14.81 09/22/04 $ 17,590 $ 38,879
35,000 (TFG) 45.2% $ 8.93 03/16/06 $ 127,240 $ 296,520
40,000 (TFT) 22.3% $ 7.54 01/28/06 $ 122,780 $ 286,132
- -------------------------------------------------------------------------------------------------------------------------------
John T. Keiser 3,200 (TMO) 0.1% $14.81 09/22/04 $ 13,090 $ 28,933
700 (TCA) 0.4% $ 9.39 03/04/02 $ 1,040 $ 2,176
700 (TMD) 0.2% $ 7.14 03/30/02 $ 790 $ 1,654
110,000 (TMD) 37.8% $ 9.64 01/27/06 $ 431,680 $ 1,006,016
90,000 (TKN) 30.1% $ 6.36 02/18/06 $ 233,030 $ 543,042
- -------------------------------------------------------------------------------------------------------------------------------
Brian D. Holt 300 (TMO) 0.01% $14.81 09/22/04 $ 1,230 $ 2,713
250,000 (TTT) 41.9% $ 5.03 02/24/06 $ 511,920 $ 1,193,000
- -------------------------------------------------------------------------------------------------------------------------------
George N. Hatsopoulos 300,000 (TMO) 9.9% $16.64 05/07/06 $2,032,260 $ 4,736,010
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All of the options reported are immediately exercisable as of the end of
the fiscal year. Generally, the shares acquired upon exercise are subject to
repurchase by the granting company at the exercise price if the optionee ceases
to be employed by the granting company or another Thermo Electron company. The
granting company may exercise its repurchase rights within six months after the
termination of the optionee's employment. The repurchase rights lapse ratably
over a one- to five-year period, depending on the option term, which may vary
from three to seven years, provided that the optionee continues to be employed
by the granting company or another Thermo Electron company. The granting company
may permit the 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. Please see footnote (1) under the
Summary Compensation Table for the company abbreviations used in this table.
(2) The amounts shown in 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 company, the optionee's
continued employment through the option period and the date on which the options
are exercised.
Stock Options Exercised During Fiscal 1999 and Fiscal Year-End Option Values
The following table reports certain information regarding stock option
exercises during fiscal 1999 and outstanding stock options held at the end of
fiscal 1999 by the Corporation's named executive officers. No stock appreciation
rights were exercised or were outstanding during fiscal 1999.
16
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises In Fiscal 1999 and Fiscal 1999 Year-End Option Values
---------------------------------------------------------------------------------
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Shares Year-End Year-End
Acquired on Value (Exercisable/ (Exercisable/
Name Company (1) Exercise Realized (1) Unexercisable) (2) Unexercisable)
---- ----------- -------- ------------ ------------------ --------------
<S> <C> <C> <C> <C> <C>
Richard F. Syron (TMO) -- -- 1,011,000 /0 (3) $ 0 /--
- -------------------------------------------------------------------------------------------------------------------------
Earl R. Lewis (TMO) -- -- 212,278 /0 $ 52,783 /--
(MKA) -- -- 20,000 /0 $ 0 /--
(ONX) -- -- 33,333 /0 $ 0 /--
(RGI) -- -- 4,000 /0 $ 1,000 /--
(TDX) -- -- 2,000 /0 $ 0 /--
(TBA) -- -- 50,000 /0 $ 333,750 /--
(TFG) -- -- 2,000 /0 $ 4,376 /--
(THI) -- -- 409,081 /0 (4) $ 282,375 /--
(TLZ) -- -- 5,000 /0 $ 0 /--
(TLT) -- -- -- /2,000 -- /$0 (5)
(TOC) -- -- 225,000 /0 (6) $ 203,625 /--
(TMQ) -- -- 125,000 /0 $ 0 /--
(TSR) -- -- 2,000 /0 $ 1,000 /--
(TKN) 1,023 /0 $ 56 /--
(TRIL) -- -- -- /2,000 -- /$0 (5)
(TXM) -- -- 32,000 /0 $ 0 /--
- -------------------------------------------------------------------------------------------------------------------------
William A. Rainville (TMO) -- -- 294,630 /0 (7) $ 76,377 /--
(MKA) -- -- 10,000 /0 $ 0 /--
(ONX) -- -- 10,000 /0 $ 0 /--
(RGI) -- -- 24,000 /0 $ 6,000 /--
(TDX) -- -- 10,000 /0 $ 0 /--
(TBA) -- -- 6,000 /0 $ 50,250 /--
(TFG) -- -- 75,000 /0 (8) $ 201,550 /--
(TFT) 155,000 $707,265 550,000 /0 $ 830,250 /--
(THI) -- -- 19,065 /0 $ 57,700 /--
(TLZ) -- -- 10,000 /0 $ 0 /--
(TLT) -- -- -- /6,000 -- /$0 (5)
(TOC) -- -- 15,000 /0 $ 13,575 /--
(TMQ) -- -- 15,000 /0 $ 0 /--
(THN) -- -- 22,500 /0 $ 0 /--
(TSR) -- -- 7,000 /0 $ 3,500 /--
(TTT) -- -- 60,000 /0 $ 0 /--
(TKN) -- -- 5,119 /0 $ 282 /--
(TXM) -- -- 20,000 /0 $ 0 /--
- -------------------------------------------------------------------------------------------------------------------------
John T. Keiser (TMO) 8,436 $ 42,538 267,448 /0 $ 76,182 /--
(MKA) -- -- 12,000 /0 $ 0 /--
(ONX) -- -- 2,000 /0 $ 0 /--
(RGI) -- -- 4,000 /0 $ 1,000 /--
(TMD) -- -- 187,900 /0 $ 0 /--
(TDX) -- -- 17,000 /0 $ 0 /--
(TCA) -- -- 50,200 /0 $ 0 /--
(TFT) 6,750 $ 32,063 0 /0 $ 0 /--
(THI) -- -- 71,311 /0 $ 245 /--
(TSR) -- -- 19,500 /0 $ 32,790 /--
(THS) 1,500 $ 9,000 0 /0 $ 0 /--
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises In Fiscal 1999 and Fiscal 1999 Year-End Option Values
---------------------------------------------------------------------------------
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Shares Year-End Year-End
Acquired on Value (Exercisable/ (Exercisable/
Name Company (1) Exercise Realized (1) Unexercisable) (2) Unexercisable)
---- ----------- -------- ------------ ------------------ --------------
<S> <C> <C> <C> <C> <C>
John T. Keiser (TKN) -- -- 91,023 /-- 136,406 /--
cont'd (TRIL) -- -- -- /2,000 -- /$0 (5)
(TXM) -- -- 20,000 /0 $ 0 /--
- ------------------------------------------------------------------------------------------------------------
Brian D. Holt (TMO) -- -- 284,948 /0 (7) $ 532 /--
(MKA) -- -- 2,000 /0 $ 0 /--
(ONX) -- -- 2,000 /0 $ 0 /--
(RGI) -- -- 4,000 /0 $ 1,000 /--
(TDX) -- -- 2,000 /0 $ 0 /--
(TBA) -- -- 2,000 /0 $ 16,750 /--
(TCK) -- -- 210,000 /0 $ 0 /--
(TFG) -- -- 2,000 /0 $ 4,376 /--
(THI) -- -- 999 /0 $ 245 /--
(TLZ) -- -- 5,000 /0 $ 0 /--
(TLT) -- -- -- /2,000 -- /$0 (5)
(TOC) -- -- 6,000 /0 $ 5,430 /--
(TMQ) -- -- 6,000 /0 $ 0 /--
(TSR) -- -- 2,000 /0 $ 1,000 /--
(TKN) -- -- 1,023 /0 $ 56 /--
(TRIL) -- -- -- /40,000 -- /$0 (5)
(TTT) -- -- 250,000 /0 $ 430,000 /--
(TXM) -- -- 4,000 /0 $ 0 /--
- ------------------------------------------------------------------------------------------------------------
George N. (TMO) -- -- 2,224,943 /0 $1,339,818 /--
Hatsopoulos (MKA) -- -- 30,000 /0 $ 0 /--
(ONX) -- -- 20,000 /0 $ 0 /--
(RGI) -- -- 48,000 /0 $ 12,000 /--
(TMD) -- -- 50,000 /0 $ 0 /--
(TDX) -- -- 20,000 /0 $ 0 /--
(TBA) -- -- 17,300 /0 $ 125,625 /--
(TCK) -- -- 15,000 /0 $ 0 /--
(TFG) -- -- 20,000 /0 $ 43,760 /--
(TFT) 18,000 $ 85,500 139,910 /0 $ 435,379 /--
(THI) -- -- 141,252 /0 $ 58,925 /--
(TLZ) 28,800 $ 9,014 0 /0 $ 0 /--
(TLT) -- -- 0 /15,000 -- /$0 (5)
(TOC) -- -- 93,100 /0 $ 81,450 /--
(THP) 20,000 $ 58,000 0 /0 $ 0 --
(TMQ) -- -- 92,600 /0 $ 0 /--
(THN) -- -- 7,500 /0 $ 0 /--
(TSR) -- -- 15,000 /0 $ 7,500 /--
(THS) 14,750 $ 91,825 0 /0 $ 0 /--
(TTT) -- -- 40,000 /0 $ 0 /--
(TKN) -- -- 40,239 /0 $ 563 /--
(TRIL) -- -- 0 /20,000 -- /$0 (5)
(TXM) -- -- 40,000 /0 $ 0 /--
- ------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
(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. Please see footnote (1) under
the Summary Compensation Table for the company abbreviations used in this table
as well as the following company abbreviations: ThermoLase Corporation
(designated in the table as TLZ), ThermoLyte Corporation (designated in the
table as TLT), Thermo Power Corporation (designated in the table as THP),
ThermoRetec Corporation (designated in the table as THN), ThermoSpectra
Corporation (designated in the table as THS) and Trex Medical Corporation
(designated in the table as TXM).
(2) All of the options reported outstanding at the end of the fiscal year were
immediately exercisable as of fiscal year-end, except options to purchase the
common stock of ThermoLyte Corporation and Thermo Trilogy 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
or (ii) nine years after the grant date. Generally, the shares acquired upon
exercise of the options are subject to repurchase by the granting company at the
exercise price if the optionee ceases to be employed by, or ceases to serve as a
director of, such company or another Thermo Electron company. The granting
company may exercise its repurchase rights within six months after the
termination of the optionee's employment or the cessation of directorship, as
the case may be. For publicly traded companies, the repurchase rights generally
lapse ratably over a one- to ten-year period, depending on the option term,
which may vary from three to twelve years, provided that the optionee continues
to be employed by or serve as a director of the granting company 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. The granting company
may permit the 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.
(3) Options to purchase 1,000,000 shares of the common stock of Thermo Electron
Corporation granted to Dr. Syron are subject to the same terms as described in
footnote (2), except that the repurchase rights lapse ratably over a three-year
period commencing with the first anniversary of the grant date.
(4) Options to purchase 62,500 shares of the common stock of Thermo Instrument
Systems Inc. granted to Mr. Lewis are subject to the same terms as described in
footnote (2), except that the repurchase rights of the granting company
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 company
shall be deemed to have lapsed ratably over a five-year period commencing with
the fifth anniversary of the grant date.
(5) No public market for the shares underlying these options existed at fiscal
year-end. Accordingly, no value in excess of the exercise price has been
attributed to these options.
(6) Options to purchase 100,000 shares of the common stock of Thermo Optek
Corporation granted to Mr. Lewis are subject to the same terms as described in
footnote (2), except that the repurchase rights lapse 20% per year commencing on
the sixth anniversary of the grant date.
(7) Options to purchase 90,000 and 67,500 shares of the Common Stock granted to
Messrs. Rainville and Holt, respectively, are subject to the same terms as
described in footnote (2), except that the repurchase rights of the granting
company 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 company
shall be deemed to have lapsed ratably over a five-year period commencing with
the fifth anniversary of the grant date.
(8) 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 lapse 20% per year commencing on
the sixth anniversary of the grant date.
19
<PAGE>
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>
Annual Compensation Years of Service
------------------- -----------------------------------------------------------------------
15 20 25 30 35
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$100,000 $26,250 $35,000 $43,750 $48,125 $48,125
$125,000 $32,813 $43,750 $54,688 $60,156 $60,156
$150,000 $39,375 $52,500 $65,625 $72,188 $72,188
$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 1999, 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.
Executive Retention Agreements
Thermo Electron has entered into agreements with certain executive officers
and key employees of the Corporation that provide severance benefits if there is
a change in control of Thermo Electron and their employment is terminated by the
Corporation without cause or by the individual for good reason, as those terms
are defined therein, within 18 months thereafter. For purposes of these
agreements, a change in control exists upon (i) the acquisition by any person of
40% or more of the outstanding Common Stock or voting securities of Thermo
Electron; (ii) the failure of the Thermo Electron board of directors to include
a majority of directors who are "continuing directors," which term is defined
to include directors who were members of Thermo Electron's board on the date of
the agreement or who subsequent to the date of the agreement were nominated or
elected by a majority of directors who were "continuing directors" at the time
of such nomination or election; (iii) the consummation of a merger,
consolidation, reorganization, recapitalization or statutory share exchange
involving Thermo Electron or the sale or other disposition of all or
substantially all of the assets of Thermo Electron unless immediately after such
transaction (a) all holders of Thermo Electron Common Stock immediately prior to
such transaction own more than 60% of the outstanding voting securities of the
resulting or acquiring corporation in substantially the same proportions as
their ownership immediately prior to such transaction and (b) no person after
the transaction owns 40% or more of the outstanding voting securities of the
resulting or acquiring corporation; or (iv) approval by stockholders of a
complete liquidation or dissolution of Thermo Electron.
In 1998 and 1999, Thermo Electron authorized an executive retention
agreement with each of Dr. Richard F. Syron, Mr. Earl R. Lewis, Mr. William A.
Rainville, Mr. John T. Keiser and Mr. Brian D. Holt. These agreements provide
that in the event the individual's employment is terminated under circumstances
described above, the individual would be entitled to a lump sum payment equal to
the sum of (a) in the case of Dr. Syron, three times, and in the case of Messrs.
Lewis, Rainville, Keiser and Holt, two times, the individual's highest annual
base salary in any 12 month period during the prior five-year period, plus (b)
in the case of Dr. Syron, three times, and in the case of Messrs. Lewis,
Rainville, Keiser and Holt, two times, the individual's highest annual bonus in
any 12 month period during the prior five-year period. In addition, the
individual would be provided benefits for a period of, in the case of Dr. Syron,
three years, and in the case of Messrs. Lewis, Rainville, Keiser and Holt, two
years, after such
20
<PAGE>
termination substantially equivalent to the benefits package the individual
would have been otherwise entitled to receive if the individual was not
terminated. Further, all repurchase rights of the Corporation and its
subsidiaries shall lapse in their entirety with respect to all options to
purchase Common Stock, and all shares of restricted Common Stock, and all
options to purchase the common stock, and all shares of restricted common stock,
of Thermo Electron's subsidiaries that the individual holds as of the date of
the change in control. Finally, the individual would be entitled to a cash
payment equal to, in the case of Dr. Syron, $25,000, and in the case of Messrs.
Lewis, Rainville, Keiser and Holt, $20,000, to be used toward outplacement
services. These executive retention agreements supersede and replace any prior
severance arrangements which these individuals may have had with Thermo
Electron.
Assuming that the severance benefits would have been payable as of January
1, 2000, the lump sum salary and bonus payment under such agreement to Dr.
Syron, Mr. Lewis, Mr. Rainville, Mr. Keiser and Mr. Holt would have been
approximately $2,400,000, $1,140,000, $960,000, $920,000 and $1,040,000,
respectively. In the event that payments under these agreements are deemed to be
so-called "excess parachute payments" under the applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), the
individuals would be entitled to receive a gross-up payment equal to the amount
of any excise tax payable by such individual with respect to such payment plus
the amount of all other additional taxes imposed on such individual.
In January 2000, in connection with the adoption of the Corporation's
reorganization plan, the Human Resources Committee of the Board of Directors of
the Corporation approved a retention arrangement for Mr. Holt, entitling him to
a payment of two times his base salary if his employment is terminated with the
Corporation for any reason other than for cause or he terminates his employment
voluntarily. Mr. Holt, however, would not be entitled to severance payments
under this arrangement if he were also entitled to severance payments under his
executive retention agreement described above. In addition, in April 2000, Mr.
Holt entered into a transaction bonus agreement with the Corporation providing
that he will be entitled to receive a transaction bonus equal to 0.11% of the
aggregate proceeds up to $410,000,000 from the sale of the energy and
environment business units for which Mr. Holt is responsible, excluding Thermo
Ecotek Corporation. If the aggregate sale prices exceed $410,000,000, Mr. Holt
would be entitled to receive an additional bonus equal to 0.5% of the amount in
excess of $410,000,000.
Employment Agreement with Dr. Richard F. Syron
Dr. Richard F. Syron, president and chief executive officer of the
Corporation, has an employment agreement with the Corporation that provides for
an annual base salary of $800,000 and for an annual incentive bonus in an amount
to be determined by the Corporation's board of directors, provided that Dr.
Syron will be entitled to a guaranteed minimum bonus in calendar 1999, 2000 and
2001 of $145,833, $250,000 and $104,167, respectively. Also, on each of June 1,
1999, June 1, 2000 and June 1, 2001, Dr. Syron will be granted an award of
shares of Common Stock ("Restricted Stock") having a market value at the time
of grant of $200,000 based on the average closing price of the Common Stock as
reported on the New York Stock Exchange ("NYSE") for the five business days
preceding and including the corresponding grant date. Vesting of these shares of
Restricted Stock will occur on the third anniversary of each corresponding grant
date. If Dr. Syron's employment is terminated without cause or as a result of a
constructive termination, as those terms are defined in the agreement, he will
be entitled to continue to receive salary payments based on his then current
annual base salary for a period (the "Salary Continuation Period") of the
greater of 12 months or the remaining term of his employment agreement. Dr.
Syron will also be entitled to a pro rata annual bonus payment for the year in
which the termination occurs and, if applicable, for the Salary Continuation
Period. Further, he will also be entitled to retain his Restricted Stock and his
stock options granted in fiscal 1999, all transfer restrictions relating thereto
will lapse in their entirety, and such stock options will continue to be
exercisable until the later of June 1, 2002 or two years from the employment
termination date (but in no event beyond the option expiration date of June 1,
2006). Dr. Syron's employment agreement has a three-year term, with automatic
one-year extensions thereafter, unless either party elects not to extend the
agreement by providing 12 months' prior written notice.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Philosophy
Decisions on compensation for the Corporation's executive officers are made
by the human resources committee of the board of directors (the "Committee").
The Committee has developed compensation policies that are designed to reward
and motivate executives in achieving long-term value for Stockholders and other
business
21
<PAGE>
objectives, to attract and retain dedicated, talented individuals to accomplish
the Corporation's objectives, to recognize individual contributions as well as
the performance of the Corporation and its subsidiaries, and to encourage stock
ownership by executives through stock-based compensation and stock retention
programs in order to link executive and Stockholder interests.
The Committee evaluates the competitiveness of its compensation practices
through the use of market surveys and competitive analyses prepared by its
outside compensation consultants. Internal fairness of compensation within the
organization is also an important element of the Committee's compensation
philosophy. Compensation of executives is also evaluated by comparing it to the
compensation of other executives within the Thermo Electron organization who
have responsibility to manage businesses of comparable size and complexity.
The compensation program of the Corporation consists of annual cash
compensation and long-term incentive compensation. Annual cash compensation is
composed of base salary and performance-based incentive compensation ("bonus"),
which is reviewed and determined annually. Long-term incentive compensation is
in the form of stock-based compensation such as stock options and restricted
stock awards. The process for determining the components of executive
compensation for the named executive officers is described below. For its review
of the compensation of other officers of the Corporation, the Committee follows
a substantially similar process.
Components of Executive Compensation
Annual Cash Compensation
Annual cash compensation consists of base salary and performance-based
incentive compensation ("bonus"). The cash bonus paid to an executive varies
from year to year based on the performance of the Corporation and the executive.
The Committee assesses the competitiveness of total annual cash
compensation by establishing for each executive position at the beginning of
each fiscal year a base salary and reference bonus that together are intended to
approximate the mid-point of competitive total annual cash compensation for
similar positions at organizations that are of comparable size and complexity as
the Corporation. At the beginning of fiscal 1999, the Committee recognized that
the named executive officers had assumed more significant responsibilities
within the organization as a whole in September 1998, and adjusted base salaries
and reference bonuses to reflect their increased responsibilities.
Base Salary. Generally, executive salaries are adjusted to reflect
competitive salary levels or other considerations, such as geographic or
regional market data, industry trends or internal fairness within the
Corporation. The Committee may also adjust individual salaries to reflect the
assumption of increased responsibilities. The salary increases effected in 1999
reflected the assumption of increased responsibilities of the named executive
officers.
Performance-based Incentive Compensation ("Bonus"). The amount of
incentive compensation actually earned by an executive from year to year varies
with the performance of the Corporation and the executive. The Committee
evaluates performance (1) by using financial measures of profitability and
contribution to Stockholder value and (2) by subjectively evaluating the
executive's contribution to the achievement of the Corporation's long-term
objectives. In fiscal 1999, the financial measures used by the Committee were
return on net assets, return on sales and earnings improvement over a three-year
period for the Corporation and certain subsidiaries for which the named
executive officers are responsible. The financial measures are not financial
targets that are met, not met or exceeded, but assess the financial performance
relative to the financial performance of comparable companies and are designed
to penalize below-average performance and reward above-average performance. The
relative weighting of the financial measures and subjective evaluation varies
depending on the executive's role and responsibilities within the organization.
The bonus awarded to each named executive officer (other than the chief
executive officer, which is discussed below under the caption "1999 CEO
Compensation") for fiscal 1999 reflected the financial performance of the
businesses of the Corporation for which they were responsible, as well as the
Corporation as a whole.
Long-Term Incentive Compensation
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 stock-based
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<PAGE>
compensation in shares of Common Stock of the Corporation and the common stock
of its majority-owned subsidiaries.
The Committee and management believe that awards of stock-based
compensation 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 employee's rights in the stock-based compensation vest
over periods of varying durations and are subject to forfeiture if the employee
leaves the Corporation prematurely, stock-based compensation is an incentive for
key employees to remain with the Corporation long-term. The Committee believes
that stock-based compensation 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 executive officer
the annual value of stock-based compensation in the Corporation and other
companies within the Thermo Electron organization that vest in the next year and
compares this value to competitive data. Awards are reviewed annually in
conjunction with the annual review of cash compensation and additional awards
are made periodically as deemed appropriate by the Committee. The Committee uses
a modified Black-Scholes option pricing model to determine the value of an
award. In determining the appropriate number of outstanding awards, the
Committee considers such factors as the total compensation of the executive, the
actual and anticipated contributions of the executive (which includes a
subjective assessment by the Committee of the executive's future potential
within the organization), size of the company for which the executive is
responsible, its stage of development, and its growth strategy, as well as the
aggregate awards and compensation practices of comparable companies. In
addition, the Committee considers the aggregate amount of outstanding awards of
stock-based compensation granted to all employees to monitor the number of
outstanding awards under the Corporation's stock-based compensation program.
The options awarded in fiscal 1999 to the named executive officers (other
than Dr. Syron and Dr. Hatsopoulos) to purchase shares of Common Stock were made
pursuant to a program that awarded options to certain eligible employees
annually based on the number of shares of the Common Stock held by such
employees as an incentive to buy and hold the Corporation's shares. These
option awards were independent of the award of stock options as an incentive for
management performance. This program has been discontinued for future periods.
Stock Ownership Policy
The Committee has established a stock holding policy for the chief
executive officer of the Corporation that requires him to own a multiple of his
compensation in shares of the Corporation's Common Stock. The multiple is one
times his annual base salary and reference incentive compensation for the fiscal
year in which he achieves compliance. The chief executive officer has three
years from the date of his appointment to achieve this ownership level.
In order to assist the chief executive officer in complying with the
policy, the Committee also adopted a stock holding assistance plan under which
the Corporation is authorized to make interest-free loans to the chief executive
officer to enable him to purchase shares of Common Stock in the open market. Any
loans are required to be repaid upon the earlier of demand or the tenth
anniversary of the date of the loan, unless otherwise determined by the
Committee. No loans were outstanding for the chief executive officer under this
program in 1999. See "Relationship with Affiliates - Stock Holding Assistance
Plan."
The Corporation's publicly traded, majority-owned subsidiaries have adopted
similar stock holding policies for their chief executive officers, along with
stock holding assistance plans. The stock holding assistance plans are intended
to assist chief executive officers in complying with the stock holding policies,
and provide for interest-free loans to enable those officers to purchase shares
of common stock in the open market. Certain of the named executive officers of
the Corporation are also the chief executive officers of those subsidiaries and
are required to comply with the subsidiary's stock holding policies. See
"Relationship with Affiliates--Stock Holding Assistance Plan." 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 $94,483 was outstanding as of
January 1, 2000. In 1996, Mr. Lewis received a loan in the principal amount of
$194,029 under the Thermo Optek Corporation stock holding assistance plan to
purchase 15,000 shares of the common stock of Thermo Optek Corporation of which
$155,223 was outstanding as of January 1, 2000.
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<PAGE>
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 named executive officers in excess of $1,000,000,
unless the compensation qualified as "performance-based" or is otherwise
exempt from Section 162(m).
The Committee considers the potential effect of Section 162(m) in designing
its compensation program, but reserves the right to use its independent judgment
to approve nondeductible compensation, while taking into account the financial
effects such action may have on the Corporation. The Corporation has modified
certain of its stock-based compensation plans in which its named executive
officers participate in order to qualify for the deduction. However, the
Committee has not adopted modifications to its cash compensation program or
certain subsidiary stock-based compensation plans that would avail the
Corporation of the deduction. Although the cash compensation reported for fiscal
1999 for the former chief executive officer of the Corporation exceeded
$1,000,000 and the cash compensation of the chief executive officer in future
periods may exceed $1,000,000, the Committee does not believe that the
modifications necessary to preserve the deductibility of cash compensation in
excess of that amount are warranted at this time. The Committee will continue to
monitor the potential effect of Section 162(m) on the Corporation.
1999 CEO Compensation
The Committee determines the compensation for the Corporation's chief
executive officer. The determinations of the Committee as to the compensation of
the chief executive officer are subject to review by the entire board of
directors. The board of directors concurred in the decisions of the Committee
with respect to 1999 compensation.
The Corporation's chief executive officer, Dr. Richard F. Syron, was
appointed effective June 1, 1999, and he succeeded the Corporation's founder,
Dr. George N. Hatsopoulos, in this position. In connection with his appointment,
Dr. Syron entered into an employment agreement with the Corporation that set
forth his minimum cash compensation for the three-year term of the agreement,
and also provided for the award of restricted stock and employee stock options.
See "Executive Compensation - Employment Agreement with Dr. Richard F. Syron"
for a description of this agreement. The base salary and awards of restricted
stock and employee stock options made to Dr. Syron in fiscal 1999 were
determined by this agreement.
In addition, Dr. Syron was paid a bonus for fiscal 1999 that was determined
by the Committee using the same criteria as described above for all executive
officers. The Committee's subjective evaluation of Dr. Syron's performance
considered, among other things, his leadership and effectiveness in furthering
the Corporation's business and financial objectives.
Dr. Hatsopoulos served as the Corporation's chief executive officer until
June 1, 1999 and thereafter served as the chairman of the board. In negotiating
the succession of the chief executive officer, the Committee agreed to raise Dr.
Hatsopoulos' base salary rate to that of Dr. Syron for the 1999 fiscal year and
established his reference bonus as the same as Dr. Syron's reference bonus. The
bonus for Dr. Hatsopoulos for fiscal 1999 was determined by the Committee using
the same criteria as described above for all executive officers. The Committee's
subjective evaluation of Dr. Hatsopoulos' performance considered, among other
things, his role in the transition to a new chief executive officer and in
developing the Corporation's strategic plan and reorganization.
The awards of restricted stock and stock options to Dr. Hatsopoulos were
awarded in conjunction with the Committee's annual review of compensation at the
beginning of 1999 and determined using the criteria described above under the
caption "Components of Executive Compensation - Long-Term Incentive
Compensation."
Mr. Frank Jungers (Chairman)
Mr. Peter O. Crisp
Dr. Elias P. Gyftopoulos
Dr. Samuel W. Bodman III
COMPARATIVE PERFORMANCE GRAPH
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
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<PAGE>
with a broad-based market index and either a nationally recognized industry
standard or an index of peer companies selected by the Corporation. The
Corporation has compared its performance with the Standard & Poor's 500 Index
(the "S&P 500 Index") and a peer group composed of the following companies:
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 "Peer Group").
Comparison of Total Return Among Thermo Electron Corporation (TMO),
the Standard & Poor's 500 Index (S&P 500), and the Peer Group
<TABLE>
12/94 12/95 12/96 12/97 12/98 12/99
<S> <C> <C> <C> <C> <C> <C>
TMO 100 119 129 148 58 51
S&P 500 100 137 172 226 289 350
Peer Group 100 132 179 198 234 394
</TABLE>
The total return for the Corporation's Common Stock (TMO), the S&P 500
Index and the Peer Group assumes the reinvestment of dividends, although cash
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".
RELATIONSHIP WITH AFFILIATES
Pursuant to an international distributorship agreement, Thermedics
Detection Inc. ("Thermedics Detection"), a subsidiary of Thermedics Inc.,
which in turn is a majority-owned subsidiary of the Corporation, appointed
Arabian Business Machines Co. ("ABM") as its exclusive distributor of
Thermedics Detection's security instruments in certain Middle Eastern countries.
ABM is a member of The Olayan Group. Ms. Hutham S. Olayan, a director of the
Corporation, is the president and a director of Olayan America Corporation, a
member of The Olayan Group, which is indirectly controlled by Suliman S. Olayan,
Ms. Olayan's father. Revenues recorded under this agreement totaled $147,000 in
fiscal 1999.
Effective February 21, 2000, the Corporation entered into an agreement with
Mr. John N. Hatsopoulos regarding the termination of his consulting arrangement
with the Corporation. The agreement provided for a lump sum payment to Mr.
Hatsopoulos of $1,958,333 representing the balance of the compensation payable
to him under the consulting agreement, which was scheduled to end on December
31, 2003. The agreement also provides for continuing health insurance coverage
for Mr. Hatsopoulos and his dependents, the provision of certain office related
services and $100,000 per year to cover anticipated expenses, through December
31, 2003. Also, stock options previously granted to Mr. Hatsopoulos that were,
as of February 21, 2000, not "in-the-money" or "in-the-money"
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<PAGE>
but for which the Corporation's or its subsidiaries' repurchase rights had not
lapsed, will continue to be exercisable through December 31, 2003, subject to
certain resale restrictions that would lapse with the passage of time. All
options that would have vested after that date would be cancelled unless there
occurs on or before such date a change of control of the Corporation that would
have accelerated the vesting under their original terms, in which event the
options would be exercisable to the extent their vesting has been so
accelerated. Pursuant to the agreement, Mr. J. Hatsopoulos retired as a director
of the Corporation and of each of its subsidiaries, effective February 21, 2000.
Effective March 31, 2000, the Corporation entered into an agreement with
Dr. George N. Hatsopoulos pursuant to which he will be employed by the
Corporation on a half-time basis until March 31, 2002 and thereafter until March
31, 2004 he would serve as a consultant to the Corporation. During the two-year
employment period, Dr. Hatsopoulos would receive a salary of $500,000 per year.
He also will be entitled to a bonus for the period January 1, 2000 to March 31,
2000 in an amount to be determined by the Board of Directors at the end of 2000.
During the consulting period, Dr. Hatsopoulos would be paid $500,000 per year.
Under the agreement, stock options previously granted to Dr. Hatsopoulos that
(i) were, as of March 31, 2000, either not "in-the-money," or "in-the-money" but
for which the Corporation's or its subsidiaries' repurchase rights would not
have lapsed as of March 31, 2002, would continue to be exercisable through March
31, 2004, subject to certain resale restrictions that would lapse with the
passage of time and (ii) are scheduled to vest after March 31, 2004 would be
forfeited, unless there occurs on or before such date a change of control of the
Corporation that would have accelerated the vesting under their original terms,
in which event the options would be exercisable to the extent their vesting has
been so accelerated. The Corporation also agreed to waive existing resale
restrictions tied to Dr. Hatsopoulos' retirement on shares of the Corporation's
Common Stock previously acquired by Dr. Hatsopoulos pursuant to the exercise of
certain stock options. Simultaneously with entering into this agreement, Dr.
Hatsopoulos retired from the Boards of Directors of the Corporation and its
subsidiaries.
Corporate Reorganization
The Corporation has adopted a major reorganization plan under which, among
other things, it is acquiring the minority interest in most of its subsidiaries
that have minority investors. The consideration paid or to be paid to the
stockholders in each of these completed or proposed transactions is as follows:
<TABLE>
<CAPTION>
Completed Transactions
- ----------------------
Subsidiary Per Share Cash Payment
- ---------- ----------------------
<S> <C>
Thermo Voltek Corp. $ 7.00
Thermo Power Corporation $12.00
ThermoSpectra Corporation $16.00
Thermo Vision Corporation $ 7.00
Thermo Sentron Inc. $15.50
Thermedics Detection Inc. $ 8.00
ONIX Systems Inc. $ 9.00
Thermo BioAnalysis Corporation $28.00
Thermo Coleman Corporation $10.50
Thermo Information Solutions Inc. $10.00
Trex Communications Corporation $ 4.00
</TABLE>
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<PAGE>
Proposed Transactions
- ---------------------
Cash Transactions
-----------------
Subsidiary Per Share Cash Payment
---------- ----------------------
Metrika Systems Corporation $ 9.00
ThermoQuest Corporation $ 17.00
Thermo Optek Corporation $ 15.00
ThermoRetec Corporation $ 7.00
The Randers Killam Group Inc. $ 4.50
Stock Transactions
------------------
Subsidiary Exchange Ratio*
---------- ----------------------
Thermo Instrument Systems Inc. 0.85
Thermedics Inc. 0.45
Thermo Ecotek Corporation 0.431
Thermo TerraTech Inc. 0.4**
ThermoLase Corporation 0.158**
ThermoTrex Corporation 0.5503
*The Exchange Ratio represents the number of shares of Common Stock that will be
exchanged for each share of the relevant subsidiary's common stock.
**The Exchange Ratios in these transactions are subject to adjustment in certain
circumstances.
Executive Officer and Director Participation in Completed Transactions
Executive officers and directors of the Corporation who held shares of
common stock in the subsidiaries listed above under "Completed Transactions"
received the same cash consideration per share of subsidiary stock as all other
stockholders of such subsidiaries. In addition, the executive officers' and
directors' options to acquire shares of such subsidiaries' common stock, for
which the granting corporation's repurchase rights had not lapsed ("unvested
options"), were automatically assumed by either the acquiring corporation or
Thermo Electron, as applicable, and converted into options to purchase shares of
the acquiring corporation's common stock or the Common Stock on the same terms
as were applicable to all the other holders of such subsidiary's options, as
described below. In the case of options to acquire shares of such subsidiaries'
common stock, for which the granting corporation's repurchase rights had lapsed
("vested options"), the holders were given the opportunity to elect either to
convert the options into vested options to acquire shares of the acquiring
corporation's common stock or the Common Stock, as applicable, or to receive
cash at the applicable cash transaction price less the applicable exercise
price, on the same terms as were applicable to all the other holders of such
subsidiary's options.
Vested and unvested options that were assumed by the acquiring corporation
or the Corporation in these completed transactions generally were converted as
follows: The number of shares of the acquiring corporation's common stock or the
Common Stock underlying each assumed option equaled the number of shares of
subsidiary common stock underlying the option before the transaction, multiplied
by the applicable "cash exchange ratio" described below, rounded down to the
nearest whole number of shares of the acquiring corporation's common stock or
the Common Stock. The exercise price for each assumed option was calculated by
dividing the exercise price of the subsidiary stock option before the
transaction by the applicable "cash exchange ratio" described below, rounded up
to the nearest whole cent. The applicable "cash exchange ratio" for each
transaction was a fraction, the numerator of which was the cash price listed in
the chart at the beginning of this subsection (the "Chart") and the denominator
of which was the closing price of the acquiring corporation's common stock or
the Common Stock, as applicable, on the day preceding the effective date of the
transaction.
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<PAGE>
Additionally, certain directors participated in the deferred compensation
plans of the various subsidiaries. On the effective date of each of the
completed cash transactions listed above, each of the affected subsidiaries'
deferred compensation plans terminated and the participants received cash in an
amount equal to the balance of such participant's stock units credited to his or
her account under the respective deferred compensation plan, multiplied by the
cash price listed in the Chart. Any such stock units held by directors are
included in their stock ownership information described below.
In the Thermo Voltek Corp. transaction, Dr. Gyftopoulos, Mr. McCabe and Mr.
Melas-Kyriazi received a cash payment of $7.00 per share for 1,000, 1,800 and
5,581 shares of common stock of Thermo Voltek Corp. held by such individuals,
respectively. Additionally, Mr. Crisp and Dr. Gyftopoulos held options to
acquire 2,250 and 2,750 shares of Thermo Voltek Corp. common stock,
respectively, that were converted into options to acquire shares of common stock
of Thermedics Inc.
In the Thermo Power Corporation transaction, Mr. Crisp, Dr. Gyftopoulos,
Mr. Lewis, Mr. McCabe, Mr. Melas-Kyriazi and Mr. Wellington received a cash
payment of $12.00 per share for 31,165, 3,925, 2,500, 8,629, 4,988 and 3,425
shares of common stock of Thermo Power Corporation held by such individuals,
respectively. Additionally, Mr. Crisp, Dr. Gyftopoulos, Mr. Lewis, Mr. McCabe,
Mr. Melas-Kyriazi and Ms. Olayan held options to acquire 1,000, 3,000, 10,000,
3,000, 5,000 and 3,000 shares of Thermo Power Corporation common stock,
respectively, that were converted into options to acquire shares of Common
Stock, as described above. Additionally, Mr. Crisp, Mr. Jungers and Mr.
Wellington elected to receive cash payments, as described above, for their
options to purchase 4,500, 3,000 and 3,000 shares of Thermo Power Corporation
common stock, respectively, and received payments of $13,414, $11,850 and
$11,850, respectively, for such options.
In the ThermoSpectra Corporation transaction, Dr. Gyftopoulos, Mr. Lewis
and Mr. Melas-Kyriazi received a cash payment of $16.00 per share for 1,022,
5,000 and 13,600 shares of common stock of ThermoSpectra Corporation held by
such individuals, respectively. Additionally, Dr. Gyftopoulos, Mr. Jungers, Mr.
Lewis, Mr. Melas-Kyriazi and Mr. Rainville held options to acquire 15,000,
1,500, 50,000, 64,200 and 10,000 shares of ThermoSpectra Corporation common
stock, respectively, that were converted into options to acquire shares of
common stock of Thermo Instrument Systems Inc., as described above.
Additionally, Mr. Crisp, Dr. Gyftopoulos, Mr. Keiser, Mr. McCabe, Ms. Olayan and
Mr. Wellington elected to receive cash payments, as described above, for their
options to purchase 1,000, 6,000, 1,500, 1,500, 1,000 and 1,000 shares of
ThermoSpectra Corporation common stock, respectively, and received payments of
$6,000, $36,000, $9,000, $9,000, $6,000 and $6,000, respectively, for such
options.
In the Thermo Vision Corporation transaction, Dr. Gyftopoulos, Mr. Jungers,
Mr. Lewis and Mr. McCabe received a cash payment of $7.00 per share for 1,061,
1,400, 17,720 and 1,120 shares of common stock of Thermo Vision Corporation held
by such individuals, respectively. Additionally, Mr. Crisp, Dr. Gyftopoulos,
Mr. Holt, Mr. Jungers, Mr. Keiser, Mr. Lewis, Mr. McCabe, Mr. Melas-Kyriazi, Ms.
Olayan, Mr. O'Leary, Mr. Rainville and Mr. Wellington held options to acquire
1,000, 15,000, 1,500, 1,000, 1,500, 25,000, 1,000, 70,000, 1,000, 1,000, 7,500
and 1,000 shares of Thermo Vision Corporation common stock, respectively, that
were converted into options to acquire shares of common stock of Thermo
Instrument Systems Inc., as described above.
In the ONIX Systems Inc. transaction, Mr. Jungers and Mr. Lewis received a
cash payment of $9.00 per share for 10,000 and 2,333 shares of common stock of
ONIX Systems Inc. held by such individuals, respectively. Also, Crescent
International Holdings Ltd., a member of the Olayan Group that is indirectly
controlled by Suliman S. Olayan, Ms. Olayan's father, received a cash payment of
$9.00 per share for 16,666 shares of common stock of ONIX Systems Inc. Ms.
Olayan disclaims beneficial ownership of the shares owned by Crescent
International Holdings Ltd. Additionally, Mr. Holt, Mr. Jungers, Mr. Keiser,
Mr. Lewis, Mr. Melas-Kyriazi and Mr. Rainville held options to acquire 2,000,
30,000, 2,000, 33,333, 30,000 and 10,000 shares of ONIX Systems Inc. common
stock, respectively, that were converted into options to acquire shares of
Common Stock, as described above.
In the Thermedics Detection Inc. transaction, Dr. Gyftopoulos and Mr. Lewis
received a cash payment of $8.00 per share for 600 and 3 shares of common stock
of Thermedics Detection Inc. held by such individuals, respectively.
Additionally, Mr. Holt, Mr. Keiser, Mr. Lewis and Mr. Rainville held options to
acquire 2,000, 17,000, 2,000 and 10,000 shares of Thermedics Detection Inc.
common stock, respectively, that were converted into options to acquire shares
of Common Stock, as described above.
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In the Thermo Sentron Inc. transaction, Mr. McCabe received a cash payment
of $15.50 per share for 2,000 shares of common stock of Thermo Sentron Inc. held
by Mr. McCabe. Additionally, Mr. Holt, Mr. Keiser, Mr. Lewis, and Mr. Rainville
held options to acquire 2,000, 19,500, 2,000 and 7,000 shares of Thermo Sentron
Inc. common stock, respectively, that were converted into options to acquire
shares of Common Stock, as described above.
In the Thermo BioAnalysis Corporation transaction, Dr. Gyftopoulos, Mr.
Jungers, Mr. Lewis and Mr. McCabe received a cash payment of $28.00 per share
for 15,254, 2,000, 22,500 and 1,500 shares of common stock of Thermo BioAnalysis
Corporation held by such individuals, respectively. Additionally, Mr. Holt, Mr.
Lewis, Mr. Melas-Kyriazi and Mr. Rainville held options to acquire 2,000,
34,250, 19,000 and 3,600 shares of Thermo BioAnalysis common stock,
respectively, that were converted into options to acquire shares of Common
Stock, as described above. Additionally, Mr. Lewis and Mr. Rainville elected to
receive cash payments, as described above, for their options to purchase 15,750
and 2,400 shares of Thermo BioAnalysis common stock, respectively, and received
payments of $258,000 and $43,200, respectively, for such options.
Mr. Keiser and Mr. Melas-Kyriazi held options to purchase 30,000 and 2,411
shares of common stock of Thermo Coleman Corporation, respectively, that were
converted into options to acquire shares of Common Stock, as described above.
In the Thermo Information Solutions Inc. transaction, Mr. Jungers received
a cash payment of $10.00 per share for 2,000 shares of common stock of Thermo
Information Solutions Inc. held by Mr. Jungers. In addition, a trust of which
Mr. McCabe and members of his family are trustees received a cash payment of
$10.00 per share for 12,000 shares of common stock of Thermo Information
Solutions held by such trust. Additionally, Mr. Crisp, Dr. Gyftopoulos, Mr.
Holt, Mr. Jungers, Mr. Keiser, Mr. Lewis, Mr. McCabe, Mr. Melas-Kyriazi, Ms.
Olayan, Mr. Rainville and Mr. Wellington held options to acquire 1,500, 1,500,
1,000, 1,500, 1,000, 1,000, 1,500, 1,000, 1,500, 5,000 and 1,500 shares of
Thermo Information Solutions common stock, respectively, that were converted
into options to acquire shares of Common Stock, as described above.
In the Trex Communications Corporation transaction, Mr. Jungers received a
cash payment of $4.00 per share for 5,000 shares of common stock of Trex
Communications Corporation held by Mr. Jungers. In addition, a trust of which
Mr. McCabe and members of his family are trustees received a cash payment of
$4.00 per share for 12,500 shares of common stock of Trex Communications held by
such trust. Also, Crescent International Holdings Ltd., a member of the Olayan
Group that is indirectly controlled by Suliman S. Olayan, Ms. Olayan's father,
received a cash payment of $4.00 per share for 125,000 shares of common stock of
Trex Communications. Ms. Olayan disclaims beneficial ownership of the shares
owned by Crescent International Holdings Ltd. Additionally, Mr. Crisp, Dr.
Gyftopoulos, Mr. Holt, Mr. Jungers, Mr. Keiser, Mr. Lewis, Mr. Melas-Kyriazi,
Ms. Olayan, Mr. O'Leary, Mr. Rainville and Mr. Wellington held options to
acquire 1,000, 1,000, 2,000, 1,000, 2,000, 2,000, 2,000, 1,000, 1,000, 10,000
and 1,000 shares of Trex Communications common stock, respectively, that were
converted into options to acquire shares of common stock of ThermoTrex
Corporation, as described above.
Executive Officer and Director Participation in Proposed Transactions
Executive officers and directors of the Corporation who hold shares of
common stock in the subsidiaries listed above under "Proposed Transactions" will
receive the same consideration per share of subsidiary stock as all other
stockholders of such subsidiaries. See "Stock Ownership."
In addition, certain executive officers and directors of the Corporation
hold options to acquire shares of common stock of the subsidiaries listed above
(see "Stock Ownership"), which options will be treated in the same manner as
options held by other employees. In general, all unvested options held by such
persons will be assumed by the Corporation and converted into options to acquire
shares of Common Stock on the same terms as are applicable to all the other
holders of such subsidiary's options. In the case of vested options held by
such persons in subsidiaries that are the subject of proposed cash transactions,
the holders will be given the opportunity to elect either to convert the options
into vested options for Common Stock, as described below, or to receive cash at
the applicable cash transaction price less the applicable exercise price. In
the case of options held by such persons in subsidiaries that are the subject of
proposed stock transactions, the options will be converted into options for
Common Stock, as described below.
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Vested and unvested options that are being assumed by the Corporation in
the proposed cash transactions referenced above generally will be converted as
follows: The number of shares of Common Stock underlying each assumed option
will equal the number of shares of subsidiary common stock underlying the option
before the transaction, multiplied by the applicable "cash exchange ratio"
described below, rounded down to the nearest whole number of shares of Common
Stock. The exercise price for each assumed option will be calculated by
dividing the exercise price of the subsidiary stock option before the
transaction by the applicable "cash exchange ratio" set forth below, rounded up
to the nearest whole cent. The applicable "cash exchange ratio" for each
transaction is a fraction, the numerator of which is the cash price listed in
the Chart and the denominator of which is the closing price of the Common Stock
on the day preceding the effective date of the transaction.
Vested and unvested options that are being assumed by Thermo Electron in
the proposed stock transactions referenced above will generally be converted as
follows: The number of shares of Common Stock underlying each assumed option
will equal the number of shares of subsidiary common stock underlying the option
before the transaction, multiplied by the applicable exchange ratio set forth in
the Chart, rounded down to the nearest whole number of shares of Common Stock.
The exercise price for each assumed option will be calculated by dividing the
exercise price of the subsidiary stock option before the transaction by the
applicable exchange ratio set forth in the Chart, rounded up to the nearest
whole cent.
In addition to the ownership information that appears in the "Stock
Ownership" table, Mr. Melas-Kyriazi (who is not a named executive officer of the
Corporation for purposes of Securities and Exchange Commission regulations, and
whose ownership information therefore does not appear in the "Stock Ownership"
table) holds shares of, or options to purchase shares of, common stock of the
subsidiaries listed above under "Proposed Transactions" as follows. Mr. Melas-
Kyriazi owns 19,028, 11,864, 618, 5,217 and 6,472 shares in the common stock of
Thermo Instrument Systems Inc., Thermedics Inc., Thermo TerraTech Inc.,
ThermoLase Corporation, and ThermoTrex Corporation, respectively. Mr. Melas-
Kyriazi owns options to purchase 25,000, 25,000, 40,000 and 163,687 shares of
Metrika Systems Corporation, ThermoQuest Corporation, Thermo Optek Corporation
and Thermo Instrument Systems Inc., respectively.
Additionally, certain directors participate in the deferred compensation
plans of the various subsidiaries. See "Stock Ownership." On the effective
date of each of the proposed cash transactions listed above, each of the
affected subsidiaries' deferred compensation plans will terminate and the
participants will receive cash in an amount equal to the balance of such
participant's stock units credited to his or her account under the respective
deferred compensation plan, multiplied by the cash price listed in the Chart. On
the effective date of each of the proposed stock transactions listed above, each
of the affected subsidiaries' deferred compensation plans will be assumed by the
Corporation, and the stock units credited to each participant's account under
the respective deferred compensation plans will be converted into stock units
for Common Stock at the exchange ratio set forth in the Chart.
Stock Holding Assistance Plan
The Committee has established a stock holding policy for the chief
executive officer of the Corporation that requires him to own a multiple of his
compensation in shares of the Common Stock. In order to assist the chief
executive officer in complying with the policy, the Committee also adopted a
stock holding assistance plan under which the Corporation may make interest-free
loans to executive officers, to enable them to purchase Common Stock in the open
market. No loans were outstanding under this program in 1999.
The Corporation's publicly traded, majority-owned subsidiaries have adopted
similar stock holding policies for their chief executive officers, along with
stock holding assistance plans. The stock holding assistance plans are intended
to assist chief executive officers in complying with the stock holding policies,
and provide for interest-free loans to enable those officers to purchase shares
of common stock in the open market. Certain of the named 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. William A.
Rainville, a chief operating officer of the Corporation, is also the chief
executive officer of Thermo Fibertek Inc. In 1996, Mr. Rainville received a loan
in the principal amount of $118,104 under the Thermo Fibertek Inc. stock holding
assistance plan to purchase 10,000 shares of the common stock of Thermo Fibertek
Inc. of which amount $94,483 was outstanding as of January 1, 2000. In 1996, Mr.
Earl R. Lewis, a chief operating officer of the Corporation, and in 1996, the
chief executive officer of Thermo Optek Corporation, received a loan in the
principal amount of $194,029 under the Thermo Optek Corporation stock holding
assistance plan to purchase 15,000 shares of the common stock of Thermo Optek
Corporation of which
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amount $155,223 was outstanding as of January 1, 2000. Both of Mr. Rainville's
and Mr. Lewis' loans are payable on the earlier of demand or the tenth
anniversary of the date of the loan, unless otherwise determined by the human
resources committee of the board of directors of Thermo Fibertek Inc. or Thermo
Optek Corporation, respectively. None of the other named executive officers have
loans currently outstanding under any subsidiary stock holding assistance plan.
-PROPOSAL 2-
PROPOSAL TO AMEND THE CORPORATION'S EQUITY INCENTIVE PLAN TO RESTATE THE
LIMITATION ON THE SIZE OF POTENTIAL AWARDS
The Board of Directors has approved an amendment to the Corporation's
equity incentive plan (the "Equity Incentive Plan") and is recommending the
amendment to the Stockholders for their approval. The amendment would restate
the limitation on the size of awards to a recipient in any calendar year as a
fixed number of shares, 1,500,000 shares, and not as a percentage of outstanding
shares.
Reasons for the Amendment
The Equity Incentive Plan has contained a limitation on the potential size
of awards to a recipient in any calendar year since its adoption in order for
awards under the plan to qualify as "performance-based" under Section 162(m) of
the Internal Revenue Code. Section 162(m) limits the tax deduction available to
public companies for annual compensation paid to certain executive officers in
excess of $1,000,000 unless the compensation qualifies as "performance-based" or
is otherwise exempt from Section 162(m). The Board of Directors has approved an
amendment to the Equity Incentive Plan to restate the limitation on the size of
an award or any combination of awards to a recipient in a calendar year as
1,500,000 shares of Common Stock. The limitation was previously stated as 1% of
the outstanding shares of Common Stock, calculated as of the beginning of the
fiscal year. If the amendment is not approved, the current limitation on the
size of awards to a recipient in any calendar year will continue. The
Corporation believes awards under the current plan qualify as "performance
based" under Section 162(m); however, to resolve any doubt, the Corporation has
elected to set the limitation in terms of a fixed number of shares rather than
as a percentage of outstanding shares. The proposed limitation of 1,500,000
shares represents slightly less than 1% of the total outstanding shares of
Common Stock.
Summary of the Equity Incentive Plan
The following summary of the terms of the Equity Incentive Plan is
qualified in its entirety by reference to the plan.
Administration; Eligible Participants. The Equity Incentive Plan is
administered by the Board of Directors of the Corporation (the "Board"). The
Board has full power to select, from among the persons eligible for awards, the
individuals to whom awards will be granted, to make any combination of awards to
any participant, and to determine the specific terms of each award, including
terms and conditions relating to events of merger, consolidation, dissolution
and liquidation, change of control, acceleration of vesting or lapse of
restrictions, vesting, forfeiture, other restrictions, dividends and interest on
deferred amounts. The Board also has the power to waive compliance by
participants with the terms and conditions of awards, to cancel awards with the
consent of participants and to accelerate the vesting or lapse of any
restrictions of any award. The Board has delegated all of its responsibilities
under the Equity Incentive Plan to a committee appointed by the Board consisting
of "non-employee" directors within the meaning of Rule 16b-3 (or any successor
rule) under the Exchange Act who are also "outside directors" within the meaning
of Section 162(m) of the Internal Revenue Code (the "Committee").
Employees and directors of, and consultants to, the Corporation and its
subsidiaries, or other persons who are expected to make significant
contributions to the growth and success of the Corporation and its subsidiaries,
selected by the Committee, are eligible to participate in the Equity Incentive
Plan. Approximately 25,400 employees are eligible to participate in the
existing Equity Incentive Plan.
Shares Subject to the Equity Incentive Plan; Use of Proceeds. As of
January 1, 2000, the number of shares of the Common Stock available for future
grant under the Equity Incentive Plan was 1,049,677 shares. In addition, as of
January 1, 2000, the number of shares of Common Stock underlying granted and
unexercised options under the Equity Incentive Plan was 10,901,034 shares. The
number of shares reserved under the Equity Incentive Plan is subject to
adjustment for stock splits and similar events. Awards and shares that are
forfeited, reacquired by the
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Corporation, satisfied by a cash payment by the Corporation or otherwise
satisfied without the issuance of Common Stock are not counted against the
maximum number of reserved shares under the plan.
The proceeds received by the Corporation from transactions under the Equity
Incentive Plan are used for the general purposes of the Corporation. Shares
issued under the Equity Incentive Plan may be authorized but unissued shares, or
shares reacquired by the Corporation and held in its treasury.
Types of Awards; Limitations on Awards. The Equity Incentive Plan permits
the Committee to grant a variety of stock and stock-based awards in such form or
in such combinations as may be approved by the Committee. Without limiting the
foregoing, the types of awards may include stock options, restricted and
unrestricted shares, rights to receive cash or shares on a deferred basis or
based on performance, cash payments sufficient to offset the federal, state and
local ordinary income taxes of participants resulting from transactions under
the Equity Incentive Plan, and loans to participants in connection with awards.
In addition, if approved by the Stockholders at this meeting, the Committee may
not award more than 1,500,000 shares of Common Stock to a recipient in a
calendar year under any award or combination of awards. The Equity Incentive
Plan previously provided that the Committee may not grant in excess of 1% of the
outstanding shares of Common Stock (calculated as of the beginning of a calendar
year) to any recipient under any award or combination of awards granted during a
calendar year.
Stock Options. Awards under the Equity Incentive Plan may be in the form
of stock options, which entitle the recipient, on exercise, to purchase shares
of Common Stock at a specified exercise price. Stock options granted under the
plan may be either stock options that qualify as incentive stock options
("incentive stock options") under Section 422 of the Internal Revenue Code, or
stock options that are not intended to meet such requirements ("non-statutory
options"). The exercise price of each option is determined by the Committee,
but may not be less than 85% of the fair market value per share of Common Stock
on the date of grant.
The term of each option is fixed by the Committee. The Committee also
determines at what time each option may be exercised. Options may be made
exercisable in installments, and the exercisability of options may be
accelerated by the Committee. The Committee may, in its discretion, provide
that upon exercise of any option, instead of receiving shares free from
restrictions under the Equity Incentive Plan, the option holder will receive
shares of restricted stock or deferred stock awards.
The exercise price of options granted under the Equity Incentive Plan must
be paid in full by check or other instrument acceptable to the Committee or, if
the Committee so determines, by delivery of shares of Common Stock held by the
option holder for at least six months (unless the Committee expressly approves a
shorter period) and that have a fair market value on the exercise date equal to
the exercise price of the option, by delivery of a promissory note from the
option holder to the Corporation payable on terms acceptable to the Committee,
by delivery of an unconditional and irrevocable undertaking by a broker to
deliver sufficient funds to the Corporation to pay the exercise price, or some
combination of these methods.
Incentive stock options must meet certain additional requirements in order
to qualify as incentive stock options under the Internal Revenue Code.
Incentive stock options may be granted only to employees of the Corporation and
its subsidiaries. The exercise price of an incentive stock option or any option
intended to qualify as performance-based compensation under Section 162(m) of
the Internal Revenue Code may not be less than 100% of the fair market value of
the shares on the date of grant. An incentive stock option may not be granted
under the Equity Incentive Plan after the tenth anniversary of the date the
Board adopted the Equity Incentive Plan and the latest date on which an
incentive stock option may be exercisable is ten years from the date of its
grant. In addition, the Internal Revenue Code limits the value of shares
subject to incentive stock options that may become exercisable annually by any
option holder in a given year, and requires a shorter exercise period and a
higher minimum exercise price in the case of Stockholders owning more than ten
percent (10%) of the Corporation's Common Stock.
Restricted Stock and Unrestricted Stock. The Committee may also award
shares of Common Stock subject to such conditions and restrictions as it may
determine ("restricted stock"). The purchase price of shares of restricted
stock shall be determined by the Committee, but may not be less than the par
value of those shares.
Generally, if a participant who holds shares of restricted stock fails to
satisfy certain restrictions or other conditions as may be determined by the
Committee (such as continuing employment for a given period) prior to the lapse
or waiver of the restrictions, the Corporation will have the right to require
the forfeiture or repurchase of the
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shares in exchange for an amount, if any, determined by the Committee as
specifically set forth in the instrument evidencing the award. The Committee may
at any time waive such restrictions or accelerate the date or dates on which the
restrictions will lapse. Prior to the lapse of restrictions on shares of
restricted stock, the recipient will have all the rights of a Stockholder with
respect to the shares, including voting and dividend rights, subject only to the
conditions and restrictions generally applicable to restricted stock or
specifically set forth in the instrument evidencing the award.
The Committee may also grant shares that are free from any restrictions
under the Equity Incentive Plan ("unrestricted stock"). Unrestricted stock may
be issued in recognition of services or in such other circumstances that the
Committee deems to be in the best interests of the Corporation.
Deferred Stock. The Committee may also make deferred stock awards under
the Equity Incentive Plan which entitle the recipient to receive shares of
Common Stock in the future. Delivery of Common Stock will take place on such
date or dates and on such conditions as the Committee specifies. The Committee
may at any time accelerate the date on which delivery of all or any part of the
Common Stock will take place or otherwise waive any restrictions on the award.
Performance Awards. The Committee may also grant performance awards
entitling the recipient to receive shares of Common Stock or cash in such
combinations as it may determine following the achievement of specified
performance goals. Payment of the performance award may be conditioned on
achievement of individual or Corporation performance goals over a fixed or
determinable period or on such other conditions as the Committee shall
determine.
Loans and Supplemental Grants. The Committee may authorize a loan from the
Corporation to a participant either on or after the grant of an award to the
participant. Loans, including extensions, may be for any term specified by the
Committee, may be either secured or unsecured, and may be with or without
recourse against the participant in the event of default. Each loan shall be
subject to such terms and conditions and shall bear such rate of interest, if
any, as the Committee shall determine. In connection with any award, the
Committee may, at the time such award is made or at a later date, provide for
and make a cash payment to the participant in an amount equal to (a) the amount
of any federal, state and local income tax on ordinary income for which the
participant will be liable with respect to the award, plus (b) an additional
amount on a grossed-up basis necessary to make him or her whole after payment of
the amount described in (a).
Payment of Purchase Price. Except as otherwise provided in the Equity
Incentive Plan, the purchase price of Common Stock or other rights acquired or
granted pursuant to such plan shall be determined by the Committee, provided
that the purchase price of Common Stock shall not be less than its par value.
The Committee may determine the method of payment for Common Stock acquired
pursuant to the Equity Incentive Plan and may determine that all or any part of
the purchase price has been satisfied by past service rendered by the recipient
of an award. The Committee may, upon the request of a participant, defer the
date on which payment under any award will be made.
Change in Control Provisions. Unless otherwise provided in the agreement
evidencing an award, if there is a "Change in Control" of the Corporation as
defined in the Equity Incentive Plan, any stock options that are not then
exercisable and fully vested will become fully exercisable and vested; the
restrictions applicable to restricted stock awards will lapse and shares issued
pursuant to such awards will be free of restrictions and fully vested; and
deferral and other limitations and conditions that related solely to the passage
of time or continued employment or other affiliation will be waived and removed
but other conditions will continue to apply unless otherwise provided in the
instrument evidencing the awards or by agreement between the participant and the
Corporation. Generally, any of the following events shall be considered a
"Change in Control": (i) the acquisition by any person of 40% or more of the
outstanding common stock or voting securities of Thermo Electron; (ii) the
failure of the Thermo Electron board of directors to include a majority of
directors who are "continuing directors", which term is defined to include
directors who were members of Thermo Electron's board on July 1, 1999 or who
subsequent to that date were nominated or elected by a majority of directors who
were "continuing directors" at the time of such nomination or election; (iii)
the consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving Thermo Electron or the sale or other
disposition of all or substantially all of the assets of Thermo Electron unless
immediately after such transaction (a) all holders of Thermo Electron common
stock immediately prior to such transaction own more than 60% of the outstanding
voting securities of the resulting or
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acquiring corporation in substantially the same proportions as their ownership
immediately prior to such transaction and (b) no person after the transaction
owns 40% or more of the outstanding voting securities of the resulting or
acquiring corporation; or (iv) approval by stockholders of a complete
liquidation or dissolution of Thermo Electron.
Nature of Rights as Stockholder Under the Equity Incentive Plan. Except as
specifically provided by the Equity Incentive Plan, the receipt of an award will
not give a participant rights as a Stockholder. The participant will obtain
such rights, subject to any limitations imposed by the plan or the instrument
evidencing the award, upon actual receipt of Common Stock.
Adjustments for Stock Dividends, etc. The Committee will make appropriate
adjustments to the maximum number of shares of Common Stock that may be
delivered under the Equity Incentive Plan, and under outstanding awards, to
reflect stock dividends, stock splits and similar events. The Committee may
also make appropriate adjustments to avoid distortions in the operation of the
Equity Incentive Plan in the event of any recapitalization, merger or
consolidation involving the Corporation, any transaction in which the
Corporation becomes a subsidiary of another entity, any sale or other
disposition of all or a substantial portion of the assets of the Corporation or
any similar transaction, as determined by the Committee.
Amendment and Termination. The Equity Incentive Plan shall remain in full
force and effect until terminated by the Board. The Board may at any time or
times amend or review the Equity Incentive Plan or any outstanding award for any
purpose which may at the time be permitted by law, or may at any time terminate
the plan as to any further grants of awards. No amendment of the Equity
Incentive Plan or any outstanding award may adversely affect the rights of a
participant as to any previously granted award without his or her consent.
Stockholder approval of amendments shall be required only as is necessary to
satisfy the then-applicable requirements of Rule 16b-3 (or any successor rule),
of stock exchanges, of Section 162(m) of the Internal Revenue Code, or of any
federal tax law or regulation relating to stock options or awards.
Stock Withholding. In the case of an award under which Common Stock may be
delivered, the Committee may permit the participant or other appropriate person
to elect to have the Corporation hold back from the shares to be delivered, or
to deliver to the Corporation, shares of Common Stock having a value sufficient
to satisfy any federal, state and local withholding tax requirements.
Federal Income Tax Consequences
The following is a summary of the principal United States federal income
tax consequences of transactions under the Equity Incentive Plan. It does not
describe all federal tax consequences under the Equity Incentive Plan, nor does
it describe any state, local or foreign tax consequences.
Incentive Stock Options. No taxable income is recognized by the optionee
upon the grant or exercise of an incentive stock option. However, the exercise
of an incentive stock option may result in alternative minimum tax liability for
the optionee. If no disposition of shares issued to an optionee pursuant to the
exercise of an incentive stock option is made by the optionee within the later
of two years from the date of grant or one year after the transfer of such
shares to the optionee, then upon the later sale of such shares, for federal
income tax purposes, any amount realized in excess of the exercise price will be
taxed to the optionee as a long-term capital gain and any loss sustained will be
a long-term capital loss, and no deduction will be allowed to the Corporation.
If the shares of Common Stock acquired upon the exercise of an incentive
stock option are disposed of prior to the expiration of the two- and one-year
holding periods described above, generally the optionee will recognize ordinary
compensation income in the year of disposition in an amount equal to the excess
(if any) of the fair market value of the shares at exercise (or, if less, the
amount realized on an arms-length sale of such shares) over the exercise price
thereof, and the Corporation will be entitled to deduct such amount, subject to
the limitations of Section 162(m) of the Internal Revenue Code. Any further
gain recognized will be taxed as short- or long-term capital gain and will not
result in any deduction by the Corporation. Special rules will apply where all
or a portion of the exercise price of the incentive stock option is paid by
tendering shares of Common Stock.
If any incentive stock option is exercised at a time when it no longer
qualifies for the tax treatment described above, the option is treated as a non-
statutory stock option. Generally, an incentive stock option will not be
eligible for the tax treatment described above if it is exercised more than
three months following termination of employment (one year following termination
of employment by reason of permanent and total disability), except in certain
cases where the incentive stock option is exercised after the death of an
optionee.
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Non-statutory Options. With respect to non-statutory stock options granted
under the Equity Incentive Plan, no income is recognized by the optionee at the
time the option is granted. Generally, at exercise, ordinary compensation
income is recognized by the optionee in an amount equal to the difference
between the exercise price and the fair market value of the shares on the date
of exercise, and the Corporation receives a tax deduction for the same amount,
subject to the limitations of Section 162(m) of the Internal Revenue Code. At
disposition of the shares, appreciation or depreciation after the date of
exercise is treated as either short- or long-term capital gain or loss depending
on how long the shares have been held.
Restricted Stock. A recipient of restricted stock that is subject to a
risk of forfeiture generally will be subject to tax at ordinary income rates on
the fair market value of the stock at the time the stock is either transferable
or is no longer subject to forfeiture, less any amount paid for such stock.
However, a recipient who so elects under Section 83(b) of the Internal Revenue
Code ("Section 83(b)") within 30 days of the date of issuance of the restricted
stock will recognize ordinary compensation income on the date of issuance equal
to the fair market value of the shares of restricted stock at that time
(measured as if the shares were unrestricted and could be sold immediately),
minus any amount paid for such stock. The Corporation generally will be
entitled to a deduction equal to the amount that is taxable as ordinary income
to the recipient, subject to the limitations of Section 162(m) of the Internal
Revenue Code.
Upon sale of the shares after the forfeiture period has expired, the
appreciation or depreciation after the shares become transferable or free from
risk of forfeiture (or, if a Section 83(b) election was made, since the shares
were issued) will be treated as long- or short-term capital gain or loss. The
holding period to determine whether the recipient has long- or short-term
capital gain or loss begins just after the forfeiture period expires (or just
after the earlier issuance of the shares, if the recipient elected immediate
recognition of income under Section 83(b)). If restricted stock is received in
connection with another award under the Equity Incentive Plan (for example, upon
exercise of an option), the income and the deduction, if any, associated with
such award may be deferred in accordance with the rules described above for
restricted stock.
Deferred Stock. The recipient of a deferred stock award will generally be
subject to tax at ordinary income rates on the fair market value of the stock on
the date that the stock is distributed to the participant. The capital gain or
loss holding period for such stock will also commence on such date. The
Corporation generally will be entitled to a deduction equal to the amount that
is taxable as ordinary income to the employee. If a right to deferred stock is
received under another award (for example, upon exercise of an option), the
income and deduction, if any, associated with such award may be deferred in
accordance with the rules described above for deferred stock.
Performance Awards. The recipient of a performance award will generally be
subject to tax at ordinary income rates on any cash received and the fair market
value of any Common Stock issued under the award, and the Corporation will
generally be entitled to a deduction equal to the amount of ordinary income
recognized by the recipient. Any cash received under a performance award will
be included in income at the time of receipt. The fair market value of any
Common Stock received will also generally be included in income (and a
corresponding deduction will generally be available to the Corporation) at the
time of receipt. The capital gain or loss holding period for any Common Stock
distributed under a performance award will begin when the recipient recognizes
ordinary income in respect of that distribution.
Loans and Supplemental Grants. Generally speaking, bona fide loans made
under the Equity Incentive Plan will not result in taxable income to the
recipient or in a deduction to the Corporation. However, any such loan made at
a rate of interest lower than certain rates specified under the Internal Revenue
Code may result in an amount (measured, in general, by reference to the
difference between the actual rate and the specified rate) being included in the
borrower's income and deductible by the Corporation. Forgiveness of all or a
portion of a loan may also result in income to the borrower and a deduction for
the Corporation. If outright cash grants are given in order to facilitate the
payment of award-related taxes, the grants will be includable as ordinary income
by the recipient at the time of receipt and will in general be deductible by the
Corporation.
Recommendation
The Board of Directors believes that the amendment to the Equity Incentive
Plan will ensure compliance with Section 162(m) and allow the Corporation to
maintain the deductibility of compensation for future grants under the Equity
Incentive Plan. Accordingly, the Board of Directors believes that the proposal
is in the best interests of the Corporation and its Stockholders and recommends
that the Stockholders vote FOR the approval of the
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amendment to the Equity Incentive Plan. If not otherwise specified, Proxies will
be voted FOR approval of the amendment to the Equity Incentive Plan.
STOCKHOLDER PROPOSAL
-PROPOSAL 3-
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
recommends a vote AGAINST the proposal.
Stockholders have submitted the following proposal, which will be voted
upon at the meeting if presented by its proponents.
WHEREAS:
Leaders of industry in the United States now acknowledge their obligation to
pursue superior environmental performance and to disclose information about that
performance to their investors and other stakeholders.
The integrity, utility, and comparability of environmental disclosure depend on
using a common format, credible metrics, and a set of generally accepted
standards. This will enable investors to assess environmental progress within
and across industries.
The Coalition for Environmentally Responsible Economics (CERES) - a ten-year
partnership between large investors, environmental groups, and corporations -
has established what we believe is the most thorough and well-respected
environmental disclosure form in the United States. CERES has also taken the
lead internationally, convening major organizations together with the United
Nations Environment Programme in the Global Reporting Initiative, which has
produced guidelines for standardizing environmental disclosure worldwide.
Companies which endorse the CERES Principles engage with stakeholders in
transparent environmental management and agree to a single set of consistent
standard for environmental reporting. That standard is set by the endorsing
companies together with CERES.
The CERES Principles and CERES Report have been adopted by leading firms in
various industries: Arizona Public Service, Bank America, BankBoston, Baxter
International, Bethlehem Steel, Coca-Cola, General Motors, Interface, ITT
Industries, Northeast Utilities, Pennsylvania Power and Light, Polaroid, and Sun
Company.
We believe endorsing the CERES Principles commits a company to the prudent
oversight of its financial and physical resources through: 1) protection of the
biosphere; 2) sustainable use of natural resources; 3) waste reduction; 4)
energy conservation; 5) risk reduction; 6) safe products/services; 7)
environmental restoration; 8) informing the public; 9) management commitment;
10) audits and reports. (The full text of the CERES Principles and accompanying
CERES Report form are obtainable from CERES, 11 Arlington Street, Boston,
Massachusetts 02116, (617) 247-0700 / www.ceres.org).
RESOLVED:
Shareholders request that the company endorse the CERES Principles as a
reasonable and beneficial component of their corporate commitment to be publicly
accountable for environmental performance.
Supporting Statement for Stockholder Proposal
Recent studies show that the integration of environmental commitment into
business operations provides competitive advantage and improves long-term
financial performance for companies. In addition, the depth of a firm's
environmental commitment and the quality with which it manages its environmental
performance are indicators of prudent foresight exercised by management.
Given investors' needs for credible information about a firm's environmental
performance, and given the number of companies that have already endorsed the
CERES Principles and adopted its report format, it is a reasonable, widely
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accepted step for a company to endorse those Principles if it wishes to
demonstrate its seriousness about superior environmental performance.
Your vote FOR this resolution serves the best interest of our Company and its
shareholders.
Statement in Opposition to 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 operates businesses throughout the world and is already
subject to extensive environmental regulation and disclosure requirements in the
jurisdictions in which it conducts its businesses. The Corporation believes that
its environmental practices and policies already comply with the laws of these
jurisdictions. Furthermore, 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, the European Community regulations
referred to in the Supporting Statement, ISO 14000 for European operations, and
others, present confusing and conflicting disclosures that are not applied
uniformly to all companies. Finally, the Corporation believes that adoption of
the CERES Principles would not further the Corporation's environmental
objectives but merely create an additional administrative reporting obligation
that would burden the Corporation with additional expenses and divert resources
better employed to creating better environmental products and services.
Recommendation
The board of directors recommends a vote AGAINST this 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.
Substantially identical proposals were submitted to, and rejected by, the
Stockholders at the 1997, 1998 and 1999 Annual Meetings of the Stockholders,
with approximately 7.1%, 8.3% and 10.8% of the shares voting on the proposal at
the 1997, 1998 and 1999 meetings, respectively, voted in favor of the proposal.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has appointed Arthur Andersen LLP as independent
public accountants for fiscal 2000. 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 included in the proxy statement
and form of proxy relating to the 2001 Annual Meeting of the Stockholders of the
Corporation and to be presented at such meeting must be received by the
Corporation for inclusion in the proxy statement and form of proxy no later than
December 14, 2000. In addition, the Corporation's Bylaws include an advance
notice provision that requires Stockholders desiring to bring proposals before
an annual meeting (which proposals are not to be included in the Corporation's
proxy statement
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and thus are submitted outside the processes of Rule 14a-8 under the Exchange
Act) to do so in accordance with the terms of such advance notice provision. The
advance notice provision requires that, among other things, Stockholders give
timely written notice to the Secretary of the Corporation regarding their
proposals. To be timely, notices must be delivered to the Secretary at the
principal executive offices of the Corporation not less than 60, nor more than
75, days prior to the first anniversary of the date on which the Corporation
mailed its proxy materials for the preceding year's annual meeting of
Stockholders. Accordingly, a Stockholder who intends to present a proposal at
the 2001 Annual Meeting of Stockholders without inclusion of the proposal in the
Corporation's proxy materials must provide written notice of such proposal to
the Secretary no earlier than January 28, 2001 and no later than February 12,
2001. Proposals received at any other time will not be voted on at the meeting.
If a Stockholder makes a timely notification, the proxies that management
solicits for the meeting may still exercise discretionary voting authority with
respect to the Stockholder's proposal under circumstances consistent with the
proxy rules of the Securities and Exchange Commission.
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 19, 2000
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FORM OF PROXY
THERMO ELECTRON CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 17, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Richard F. Syron, Theo Melas-Kyriazi and
Seth H. Hoogasian, 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 March 31, 2000, at the Annual
Meeting of the Stockholders to be held at the Marriott Long Wharf Hotel, 296
State Street, Boston, Massachusetts, on Wednesday, May 17, 2000, at 3:30 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 for director, FOR Proposal 2 and AGAINST Proposal 3, if
presented at 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: Samuel W. Bodman, Peter O. Crisp and Jim P. Manzi.
FOR ALL NOMINEES [_]
WITHHELD FROM ALL NOMINEES [_]
FOR, except vote withheld for the following nominee(s): ________________________
FOR AGAINST ABSTAIN
2. Approve a management proposal to amend [_] [_] [_]
the Corporation's equity incentive plan
to restate the limitation on the
potential size of awards to any recipient
in a year in compliance with Section 162 (m)
of the Internal Revenue Code, as amended.
The Board of Directors recommends a vote AGAINST Proposal 3.
FOR AGAINST ABSTAIN
3. Approve a stockholder proposal to request [_] [_] [_]
the Corporation to endorse the CERES
Principles.
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_________________
