<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 14, 2000
REGISTRATION NO. 333-35982
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THERMO ELECTRON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3569 04-2209186
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
81 WYMAN STREET
WALTHAM, MASSACHUSETTS 02454-9046
(781) 622-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
SANDRA L. LAMBERT, SECRETARY
THERMO ELECTRON CORPORATION
81 WYMAN STREET
WALTHAM, MASSACHUSETTS 02454-9046
(781) 622-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
SETH H. HOOGASIAN, ESQ. DAVID E. REDLICK, ESQ.
GENERAL COUNSEL HALE AND DORR LLP
THERMO ELECTRON CORPORATION 60 STATE STREET
81 WYMAN STREET BOSTON, MASSACHUSETTS 02109
WALTHAM, MASSACHUSETTS 02454-9046 (617) 526-6000
(781) 622-1000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
promptly as practicable after this Registration Statement becomes effective and
the other conditions to the exchange offer are met or waived.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE RELATED REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
Subject to Completion, dated June 14, 2000
THERMO ELECTRON CORPORATION
OFFER TO EXCHANGE
0.45 SHARES OF COMMON STOCK
OF
THERMO ELECTRON CORPORATION
FOR
EACH OUTSTANDING SHARE OF COMMON STOCK
OF
THERMEDICS INC.
------------------------
MERGER
OF
THERMEDICS INC.
INTO
THERMO ELECTRON CORPORATION
------------------------
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON FRIDAY, JUNE 23, 2000, UNLESS THE OFFER IS EXTENDED.
We are offering to exchange 0.45 shares of common stock of Thermo Electron
Corporation for each outstanding share of common stock of Thermedics Inc. that
stockholders of Thermedics validly tender, and do not properly withdraw, before
the exchange offer expires. You may withdraw shares of Thermedics common stock
that you tender pursuant to this exchange offer at any time prior to the
expiration of the exchange offer.
If we complete the exchange offer, we intend to cause Thermedics to merge
into Thermo Electron. In the merger, we will issue 0.45 shares of our common
stock for each outstanding share of Thermedics common stock, subject to any
applicable appraisal rights. This prospectus also relates to the shares of our
common stock that we would issue in the merger.
You should read this prospectus carefully. It sets forth the terms and
conditions of the exchange offer and the merger. It also describes our and
Thermedics' businesses and finances. We have prepared this prospectus so that
you will have the information necessary to make a decision about the exchange
offer and whether to pursue your appraisal rights in connection with the merger.
OUR OBLIGATION TO EXCHANGE OUR COMMON STOCK FOR THERMEDICS COMMON STOCK IS
SUBJECT TO THE IMPORTANT CONDITIONS LISTED BELOW UNDER "THE EXCHANGE
OFFER -- CONDITIONS OF THE EXCHANGE OFFER." THESE INCLUDE THE CONDITION THAT
STOCKHOLDERS OF THERMEDICS VALIDLY TENDER, AND DO NOT WITHDRAW, A SUFFICIENT
NUMBER OF SHARES OF THERMEDICS COMMON STOCK WHICH, TOGETHER WITH SHARES OF
THERMEDICS COMMON STOCK OWNED BY US, CONSTITUTE AT LEAST 90% OF THE OUTSTANDING
SHARES OF THERMEDICS COMMON STOCK UPON THE EXPIRATION OF THE EXCHANGE OFFER. AS
OF MAY 31, 2000, WE OWNED 31,759,424 SHARES OF THERMEDICS COMMON STOCK,
REPRESENTING APPROXIMATELY 75.5% OF THE OUTSTANDING SHARES OF THERMEDICS COMMON
STOCK ON THAT DATE.
Our common stock trades on the New York Stock Exchange under the symbol
"TMO." On June 13, 2000, the last reported sale price for our common stock was
$18.6875. Thermedics common stock trades on the American Stock Exchange under
the symbol "TMD." On June 13, 2000, the last reported sale price for Thermedics
common stock was $8.25.
An investment in our common stock involves a high degree of risk. You should
carefully review the "Risk Factors" beginning on page 12 for a discussion of
important factors that you should consider in connection with our offer, the
merger and an investment in our common stock.
------------------------
We incorporate by reference into this prospectus important business and
financial information about Thermedics and about us. This information is not
included in, or delivered with, this prospectus.
We will provide you with a copy of any and all of the information that we
incorporate by reference in this prospectus, without charge, upon written or
oral request. If we do not specifically incorporate by reference in this
prospectus exhibits to the documents that we incorporate in this prospectus,
then we will not provide copies of those exhibits. TO OBTAIN TIMELY DELIVERY,
YOU MUST REQUEST THE INFORMATION NO LATER THAN JUNE 16, 2000.
You should direct any requests for documents relating to Thermedics or to us
to: Sandra L. Lambert, Corporate Secretary, Thermo Electron Corporation, 81
Wyman Street, Waltham, Massachusetts 02454 (telephone: 781-622-1000; facsimile:
781-768-6620).
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIME.
------------------------
The date of this prospectus is , 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY..................................................... 1
RISK FACTORS................................................ 12
FORWARD-LOOKING STATEMENTS.................................. 17
INFORMATION ABOUT THERMO ELECTRON AND THERMEDICS............ 18
BACKGROUND TO THE EXCHANGE OFFER AND THE MERGER............. 19
THE EXCHANGE OFFER.......................................... 29
MARKET PRICES AND DIVIDENDS................................. 44
THE MERGER; APPRAISAL RIGHTS................................ 45
FEDERAL INCOME TAX CONSEQUENCES............................. 47
COMPARISON OF THE RIGHTS OF HOLDERS OF OUR COMMON STOCK AND
THE RIGHTS OF HOLDERS OF THERMEDICS COMMON STOCK.......... 48
TRANSACTIONS WITH RELATED PARTIES........................... 59
LEGAL MATTERS............................................... 60
EXPERTS..................................................... 60
WHERE YOU CAN FIND MORE INFORMATION......................... 61
THERMO ELECTRON CORPORATION PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS (UNAUDITED).......................... F-1
ANNEX A..................................................... A-1
ANNEX B..................................................... B-1
</TABLE>
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT THERMO ELECTRON AND THERMEDICS THAT IS NOT INCLUDED OR DELIVERED WITH THE
PROSPECTUS. YOU MAY OBTAIN THIS INFORMATION WITHOUT CHARGE TO YOU UPON WRITTEN
OR ORAL REQUEST. YOU MUST ADDRESS YOUR REQUEST TO SANDRA L. LAMBERT, CORPORATE
SECRETARY, THERMO ELECTRON CORPORATION, 81 WYMAN STREET, WALTHAM, MASSACHUSETTS
02454-9046, TELEPHONE (781) 622-1000. TO OBTAIN TIMELY DELIVERY, YOU MUST
REQUEST THE INFORMATION NO LATER THAN JUNE 16, 2000.
<PAGE> 4
SUMMARY
Before you make any decision with respect to the exchange offer or the
merger, you should read the following summary together with the more detailed
information included elsewhere, or that we incorporate by reference, in this
prospectus.
- THE COMPANIES
- Thermo Electron Corporation (page 18). Thermo Electron Corporation, a
Delaware corporation, develops, manufactures and sells measurement and
detection instruments that our customers use to collect, monitor and
analyze data. As discussed below, we are in the process of spinning off
our business that serves the healthcare industry with a range of medical
products for diagnosis and monitoring and our paper recycling and
papermaking equipment business. We are also in the process of selling
various non-core businesses. We plan to take Thermo Ecotek Corporation,
our electric power generation business, private. Although we no longer
consider it a core business under our new strategy, we expect to retain
Thermo Ecotek after we take it private while we continue to evaluate how
to best exit that business and create maximum value for our stockholders.
Our common stock is listed on the New York Stock Exchange under the symbol
"TMO." Our principal executive offices are located at 81 Wyman Street,
P.O. Box 9046, Waltham, Massachusetts 02454-9046, and our telephone number
is (781) 622-1000.
- Thermedics Inc. (page 18). Thermedics Inc., a Massachusetts corporation,
develops, manufactures and markets diverse product lines, including
biomedical products, security instruments and equipment that assures the
quality of a wide variety of consumer products and bulk materials.
Thermedics is seeking a buyer for its Thermo Cardiosystems Inc.
subsidiary, which manufactures implantable heart assist devices.
Thermedics' common stock is listed on the American Stock Exchange under
the symbol "TMD." Thermedics' principal executive offices are located at
470 Wildwood Street, P.O. Box 2999, Woburn, Massachusetts 01888-1799 and
its telephone number is (781) 622-1000.
- Affiliation of Thermedics and Thermo Electron (pages 24 and 25). We own
a majority of Thermedics' common stock. Several officers and directors of
Thermedics are also officers or directors of Thermo Electron. See
"Background To The Exchange Offer And The Merger."
- The Thermo Electron reorganization (page 19). On January 31, 2000, we
announced that our board of directors had authorized our management to
proceed with a major reorganization of our operations. As part of this
reorganization, we plan to:
- acquire the public minority interest in most of our subsidiaries that
have minority investors;
- spin off our business that serves the healthcare industry with a range
of medical products for diagnosis and monitoring and our paper
recycling and papermaking equipment business; and
- divest a variety of non-core businesses.
The primary goal of the reorganization is to allow us to focus on our core
business and each of our spun-off subsidiaries to focus on its core
business. The purpose of the exchange offer and merger described in this
prospectus is to allow us to acquire the minority public interest in
Thermedics as part of our overall reorganization. The exchange offer and
merger also would provide the public stockholders of Thermedics with a
continuing equity interest in the restructured company.
- The Thermedics reorganization. On January 31, 2000, Thermedics announced
its intention to acquire, through cash tender offers and mergers, the
minority public interests in two of its public subsidiaries. Thermedics
completed these acquisitions in April 2000. Thermedics spent
approximately $40.0 million to acquire the public minority interests in
these subsidiaries. We loaned Thermedics $12.0 million to finance a
portion of these acquisitions and related expenses. Thermedics has
entered into letters of intent for the sale of its remaining Thermo
Voltek
1
<PAGE> 5
businesses and is seeking a buyer for Thermo Cardiosystems, its only
remaining subsidiary with publicly-held minority interests.
- PRINCIPAL TERMS OF THE EXCHANGE OFFER
- Exchange offer for all outstanding Thermedics shares (page 29). We are
offering to acquire all of the outstanding shares of common stock of
Thermedics that we do not currently own in exchange for shares of our
common stock.
- Exchange ratio (page 29). We are offering to exchange 0.45 shares of our
common stock for each share of Thermedics common stock that Thermedics
stockholders validly tender in the exchange offer. We sometimes refer to
this ratio of 0.45 to 1 as the "exchange ratio." The following table
shows the last reported sale price of Thermedics common stock on the
American Stock Exchange and our common stock on the New York Stock
Exchange on March 7, 2000, the last trading date before we announced the
exchange ratio, and on June 13, 2000, the last trading date before the
date of this prospectus.
<TABLE>
<CAPTION>
DATE THERMEDICS THERMO ELECTRON
---- ---------- ---------------
<S> <C> <C>
March 7, 2000............................................... $9.0625 $ 24.00
June 13, 2000............................................... $ 8.25 $18.6875
</TABLE>
The exchange ratio represents a valuation of the Thermedics common stock
at a premium of 19.2% over its last reported sale price on March 7, 2000,
based on the last reported sale price of our common stock on that date.
For more information regarding the trading ranges of our common stock and
Thermedics common stock, see "-- Comparative Per Share Market
Information."
- Cash in lieu of fractional shares (page 29). We will not issue
fractional shares of our common stock in the exchange offer or the
merger. Instead, we will pay an amount in cash equal to $19.50 per whole
share of our common stock for fractional shares.
- Expiration of the exchange offer (page 29). The exchange offer will
expire at 12:00 midnight on Friday, June 23, 2000. We can elect at any
time to extend the exchange offer. If we extend the exchange offer, we
will issue a press release announcing the extension. See "The Exchange
Offer -- Terms Of The Exchange Offer; Expiration Of The Exchange Offer."
- Procedures for accepting the exchange offer and tendering shares (page
32). To exchange your shares of Thermedics common stock for shares of
our common stock in the exchange offer, you must follow the procedures
described below under "The Exchange Offer -- Procedures For Accepting The
Exchange Offer And Tendering Shares" and in the accompanying letter of
transmittal before the exchange offer expires. If you are the record
owner of your shares and you tender your shares in the exchange offer,
you will not have to pay brokerage fees or incur similar expenses. If you
own your shares through a broker or other nominee and your broker tenders
the shares on your behalf, your broker may charge you a fee for doing so.
You should consult your broker or nominee to determine whether any
charges will apply.
- Issuance of Thermo Electron shares for tendered shares (page 31). If we
satisfy or waive all of the conditions of the exchange offer and we
accept for exchange shares of Thermedics common stock that you tendered,
we will issue you shares of our common stock in exchange for your shares
of Thermedics common stock promptly after the exchange offer expires. See
"The Exchange Offer -- Acceptance For Exchange And Exchange Of Shares."
- Withdrawal rights (pages 29 and 36). You may withdraw shares of
Thermedics common stock that you have tendered at any time on or before
June 23, 2000, or, if we extend the exchange offer, before the exchange
offer expires. Unless accepted for exchange on or before June 29, 2000,
you may also withdraw shares that you have tendered and which we have not
accepted for exchange at any time after June 29, 2000. For your
withdrawal to be effective, EquiServe, the depositary for the exchange
offer, must receive your notice of withdrawal at one of the addresses on
the back cover of
2
<PAGE> 6
this prospectus before the exchange offer expires. For more information
on your withdrawal rights, see "The Exchange Offer -- Withdrawal Rights."
- Conditions of the exchange offer (page 37). Our obligation to complete
the exchange offer is subject to a number of conditions. In particular,
Thermedics stockholders must tender, and not withdraw, enough shares of
Thermedics common stock so that at the time the exchange offer expires we
own at least 90% of Thermedics' outstanding shares of common stock. As of
May 31, 2000:
<TABLE>
<S> <C>
Our ownership of Thermedics common stock as a percentage
of outstanding shares was:............................. 75.5%
Based on that percentage, the number of shares of
Thermedics common stock that Thermedics stockholders
must tender for us to meet the 90% condition is:....... 6,085,582
Our ownership of Thermedics common stock as a percentage
of the shares of Thermedics common stock then
outstanding, assuming that optionholders had exercised
all outstanding Thermedics options issued by Thermedics
or us and debenture holders did not convert any of the
two issues of Thermedics' outstanding $47.4 million
total principal amount of convertible debentures into
Thermedics common stock at their conversion prices of
$32.68 and $14.928 per share, would have been:......... 72.6%
Based on that percentage, the number of shares of
Thermedics common stock that Thermedics stockholders
must tender for us to meet the 90% condition is:....... 7,570,651
</TABLE>
As of June 13, 2000, Thermedics stockholders had tendered and not
withdrawn 7,984,738 shares of Thermedics common stock pursuant to this
exchange offer. These shares may be withdrawn at any time before the
exchange offer expires.
In addition, our obligation to complete the exchange offer is subject to
the condition that the SEC declare effective the registration statement of
which this prospectus is a part. You can tender your shares of Thermedics
common stock before the registration statement is effective but we cannot
accept these shares for exchange before the registration statement is
effective or before the exchange offer expires. If the SEC has not
declared the registration statement effective by the expiration date, we
will extend or withdraw the exchange offer. For more information regarding
the conditions to our obligation to complete the exchange offer, see "The
Exchange Offer -- Conditions Of The Exchange Offer." We are not aware of
any other material filing, approval or other action by any federal or
state governmental or administrative authority that we must obtain in
connection with our acquisition of shares of Thermedics common stock as
contemplated by this prospectus.
- THE MERGER
- Subsequent merger (pages 25 and 45). We plan to take Thermedics private
by acquiring all of the outstanding shares of Thermedics common stock
that we do not currently own. The exchange offer is the first step in
this plan. If we complete the exchange offer, we will own at least 90% of
Thermedics' outstanding shares of common stock. We would then cause
Thermedics to merge with and into Thermo Electron in a so-called
"short-form" merger. A short-form merger would not require approval of
Thermedics' board of directors or the stockholders of Thermedics other
than Thermo Electron.
- No public stockholder action for merger; appraisal rights (page 45). We
do not intend to enter into a merger agreement with Thermedics or to seek
the approval of the directors of Thermedics for the merger. Even if you
do not tender your shares of Thermedics common stock in the exchange
offer, you would not be entitled to vote your shares with respect to the
merger. If you do
3
<PAGE> 7
not tender your shares and we complete the merger, you would have a right
to demand a judicial appraisal of the fair value of your shares of
Thermedics common stock. You could lose your right to an appraisal,
however, if you fail to follow the statutory procedure. See "The Merger;
Appraisal Rights."
- Merger consideration (page 45). In the merger, we would issue 0.45
shares of our common stock for each share of Thermedics common stock that
we do not already own. This is the same consideration for each share of
Thermedics common stock that we are offering in this exchange offer. See
"Background To The Exchange Offer And The Merger -- The Merger."
- SHARE OWNERSHIP INFORMATION
- Thermedics shares outstanding. As of May 31, 2000, Thermedics had
outstanding:
- 42,050,006 shares of common stock;
- options to purchase 1,643,387 shares of common stock;
- approximately $31.6 million principal amount of non-interest bearing
convertible subordinated debentures due June 1, 2003 convertible into
a total of 965,881 shares of common stock; and
- approximately $15.9 million principal amount of 2 7/8% convertible
subordinated debentures due June 1, 2003 convertible into a total of
1,061,830 shares of common stock.
- Ownership of Thermedics common stock by Thermo Electron and officers and
directors of Thermo Electron and Thermedics. On May 31, 2000, we owned
31,759,424 shares of Thermedics common stock, or approximately 75.5% of
the outstanding shares of Thermedics common stock. Assuming that
optionholders exercised all outstanding options to purchase Thermedics
common stock and debenture holders did not convert any of Thermedics'
outstanding non-interest bearing convertible subordinated debentures into
Thermedics common stock at the current conversion price of $32.68 per
share or 2 7/8% convertible subordinated debentures into Thermedics
common stock at the current conversion price of $14.928 per share, we
would have owned approximately 72.6% of the outstanding shares of
Thermedics common stock on that date. On January 31, 2000, our directors
and executive officers owned less than 1% of the outstanding shares of
our common stock and less than 1% of the outstanding shares of Thermedics
common stock. On January 31, 2000, the directors and executive officers
of Thermedics who are not also our directors or executive officers owned
less than 1% of the outstanding shares of Thermedics common stock and
less than 1% of the outstanding shares of our common stock. On that date,
our executive officers and directors also owned options to purchase
2,660,715 shares of our common stock and 199,650 shares of Thermedics
common stock.
- Ownership of Thermo Electron after the exchange offer and the merger. If
we acquire all of the outstanding shares of Thermedics common stock
pursuant to the exchange offer and the merger, former stockholders of
Thermedics would acquire through the exchange offer and the merger
approximately 3% of the then outstanding shares of our common stock,
based upon the number of shares of Thermedics common stock and of our
common stock outstanding on May 31, 2000 and the assumption that no
Thermedics optionholders exercise their options and that no Thermedics
debenture holders convert their debentures. In our reorganization, we are
also offering shares of our common stock in connection with acquiring the
minority interests in five of our other public subsidiaries. We would
issue approximately 17.7 million additional shares of our common stock in
these other transactions, assuming that optionholders do not exercise any
options to purchase shares of common stock of the subject companies and
debenture holders do not convert any convertible debt securities of the
subject companies.
4
<PAGE> 8
- RISK FACTORS (PAGE 12)
Before you make any decision about the exchange offer or the merger, you
should read carefully this prospectus and the documents that we incorporate by
reference in this prospectus. You should also carefully consider the risks of
the exchange offer and the merger, our reorganization and our business that we
identify in this prospectus and in the documents that we incorporate by
reference in this prospectus. These risks include the following:
- we may not complete our reorganization as proposed, including the two
proposed spin-offs, the acquisition of the minority interests in most of
our subsidiaries and the dispositions of our non-core businesses;
- we may not realize the anticipated benefits of our reorganization;
- the fixed exchange ratio in this exchange offer and the merger may work
to your disadvantage if Thermedics common stock increases in value or our
common stock decreases in value;
- the trading price for our common stock has been and may continue to be
volatile; and
- our business is subject to a number of risks, including intense
competition, rapid technological changes, significant governmental
regulation and difficulties of international operations.
You should carefully review "Risk Factors" beginning on page 12 for a more
complete discussion of these and other risk factors relating to the exchange
offer, the merger, our reorganization and our business.
- FEDERAL INCOME TAX CONSEQUENCES (PAGE 47)
For federal income tax purposes, your receipt of shares of our common stock
pursuant to the exchange offer or the merger would be tax-free. However, you
would recognize taxable income upon the receipt of cash in lieu of fractional
shares of our common stock in the exchange offer or the merger.
For a more detailed discussion of the tax consequences of the exchange
offer and the merger, you should carefully review "Federal Income Tax
Consequences." We urge you to consult with your own tax advisor.
- CONSEQUENCES OF THE EXCHANGE OFFER AND THE MERGER (PAGE 25)
Completion of the exchange offer and the merger would have the following
consequences:
- The shares of Thermedics would no longer be listed on the American Stock
Exchange; and
- Thermedics would no longer be subject to the requirements of the
Securities Exchange Act of 1934, including requirements to file annual
and other periodic reports.
If you do not tender your shares of Thermedics common stock and we complete
the exchange offer, your shares will remain outstanding until the merger of
Thermedics and Thermo Electron. After the merger, each of your shares will
convert, subject to appraisal rights, into the right to receive 0.45 shares of
our common stock.
- EFFECT OF THE MERGER ON THERMEDICS STOCK OPTIONS AND DEBENTURES (PAGES 27 AND
28)
- Stock options. In connection with the exchange offer and the merger, we
will assume Thermedics' stock option plans and any outstanding options to
purchase shares of Thermedics common stock under those plans. After we
have assumed these options, they will be exercisable for shares of our
common stock. The number of shares of our common stock underlying each
assumed option will equal the number of shares of Thermedics common stock
underlying the option before the merger multiplied by the exchange ratio.
The exercise price for each assumed option will be calculated by dividing
the exercise price of the Thermedics stock option before the merger by
the exchange ratio, rounded up to the nearest whole cent.
5
<PAGE> 9
- Debentures. In connection with the merger, we will assume Thermedics'
non-interest bearing convertible subordinated debentures due June 1, 2003
and its 2 7/8% convertible subordinated debentures due June 1, 2003.
After we assume these debentures, they will be convertible into shares of
our common stock, instead of shares of Thermedics common stock. As of May
31, 2000, approximately $31.6 million principal amount of Thermedics'
non-interest bearing debentures was outstanding and approximately $15.9
million principal amount of Thermedics' 2 7/8% debentures was
outstanding. As of that date, the non-interest bearing debentures were
convertible into a total of 965,881 shares of Thermedics common stock at
a conversion price of $32.68 per share and the 2 7/8% debentures were
convertible into a total of 1,061,830 shares of Thermedics common stock
at a conversion price of $14.928 per share. After the merger, the
non-interest bearing debentures would be convertible into a total of
434,647 shares of our common stock at a conversion price of $72.62 per
share and the 2 7/8% debentures would be convertible into a total of
477,824 shares of our common stock at a conversion price of $33.17 per
share. Holders of these debentures will not have the right to require
Thermedics to redeem their debentures as a result of the merger.
- POTENTIAL CONFLICTS OF INTEREST (PAGE 23)
In setting the exchange ratio, our financial interest was adverse to the
financial interest of the public stockholders of Thermedics. We set the exchange
ratio on our own and without any negotiations with Thermedics.
- APPRAISAL RIGHTS (PAGE 45)
If you tender your shares of Thermedics common stock in the exchange offer,
you will not be entitled to exercise appraisal rights under the Massachusetts
Business Corporation Law. If you do not tender your shares in the exchange
offer, upon the merger of Thermedics into Thermo Electron, you will have a right
to object and demand payment of the judicially appraised fair value of your
Thermedics shares under the Massachusetts Business Corporation Law. This value
may be more or less than the market value of the 0.45 shares of our common stock
issuable for each share of Thermedics common stock in the exchange offer and the
merger. See "The Merger; Appraisal Rights."
- COMPARISON OF STOCKHOLDERS' RIGHTS (PAGE 48)
If you tender your shares of Thermedics common stock in the exchange offer
or do not exercise appraisal rights in the merger, you will become a stockholder
of Thermo Electron. Your rights as a stockholder of Thermo Electron will be
governed by Delaware corporate law and by our certificate of incorporation and
bylaws. Unlike Thermedics, we have a classified board of directors and we have
adopted a stockholders rights plan. The classified board, the rights plan and
other provisions of our certificate of incorporation and bylaws may make it more
difficult for a third party to acquire us, even if an acquisition is favored by
many of our stockholders. See "Comparison Of The Rights Of Holders Of Our Common
Stock And The Rights Of Holders Of Thermedics Common Stock."
- SUMMARY HISTORICAL AND UNAUDITED PRO FORMA COMBINED SELECTED FINANCIAL
INFORMATION
We will exchange shares of our common stock for shares of Thermedics common
stock that we accept in the exchange offer or we acquire in the merger. You
should consider our financial condition before you decide to become one of our
stockholders through the exchange offer or the merger. In considering our
financial condition, you should review the documents that we incorporate by
reference in this prospectus because they contain detailed business, financial
and other information about us and about Thermedics.
6
<PAGE> 10
SELECTED FINANCIAL INFORMATION -- THERMO ELECTRON
We have derived the selected financial information presented below as of
and for the fiscal years ended January 1, 2000, and January 2, 1999, and for the
fiscal year ended January 3, 1998, from our consolidated financial statements,
which Arthur Andersen LLP, independent public accountants, audited, as indicated
in their report. We incorporate these financial statements by reference into
this prospectus from our Annual Report on Form 10-K for the fiscal year ended
January 1, 2000. We have derived the selected financial information presented
below as of January 3, 1998, and as of and for the fiscal years ended December
28, 1996 and December 30, 1995, from our consolidated financial statements,
which Arthur Andersen LLP audited, but which we have not included or
incorporated by reference in this prospectus. You should read this information
in conjunction with our consolidated financial statements and the related notes
that we incorporate by reference into this prospectus. The selected financial
information as of and for the three months ended April 1, 2000, and April 3,
1999, has not been audited but, in our opinion, includes all adjustments,
consisting only of normal recurring adjustments, necessary to present fairly
such information in accordance with generally accepted accounting principles
applied on a consistent basis. The results of operations for the three months
ended April 1, 2000, are not necessarily indicative of results for the entire
year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------- FISCAL YEAR(1)
APRIL 1, APRIL 3, --------------------------------------------------------------
2000 1999 1999(2) 1998(3) 1997 1996(4) 1995
---------- -------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................ $ 589,929 $555,750 $2,471,193 $2,055,805 $1,979,602 $1,573,005 $1,059,064
Income (Loss) from Continuing Operations
Before Extraordinary Items............ 15,291 18,069 (14,580) 114,676 174,665 164,172 76,167
Net Income (Loss)....................... 15,823 28,299 (174,573) 181,901 239,328 190,816 139,582
Earnings (Loss) per Share from
Continuing Operations Before
Extraordinary Items:
Basic................................. .10 .11 (.09) .71 1.15 1.16 .60
Diluted............................... .09 .11 (.11) .67 1.05 1.03 .55
Earnings (Loss) per Share:
Basic................................. .10 .18 (1.10) 1.12 1.57 1.35 1.10
Diluted............................... .09 .17 (1.13) 1.08 1.41 1.17 .95
BALANCE SHEET DATA (AT END OF PERIOD):
Working Capital......................... $1,629,388 $1,450,858 $2,163,010 $2,001,963 $2,218,617 $1,317,146
Total Assets............................ 5,177,187 5,181,842 5,421,060 4,961,046 4,546,942 3,247,952
Long Term Obligations................... 1,570,323 1,565,974 1,808,582 1,518,687 1,531,668 1,079,761
Minority Interest....................... 364,900 364,278 399,512 464,191 364,163 200,868
Common Stock of Subsidiaries Subject to
Redemption............................ 7,692 7,692 40,500 40,500 2,613 --
Shareholders' Investment................ 2,014,251 2,014,486 2,254,802 2,007,862 1,755,576 1,311,311
OTHER DATA (UNAUDITED):
Book Value per Share.................... $ 12.84 $ 12.87 $ 14.23 $ 12.62 $ 11.71 $ 9.82
Cash Dividends Declared per Share....... -- -- -- -- -- --
Ratio of Earnings to Fixed Charges(5)... 2.38x 1.32x 3.35x
</TABLE>
---------------
(1) Our 1999, 1998, 1997, 1996 and 1995 fiscal years ended January 1, 2000,
January 2, 1999, January 3, 1998, December 28, 1996 and December 30, 1995,
respectively.
(2) Reflects a $182.4 million pretax charge for restructuring and related costs.
(3) Reflects a $32.5 million pretax charge for restructuring and related costs,
the issuance of $150.0 million principal amount of our notes and our public
offering of common stock for net proceeds of $290.1 million.
(4) Reflects the issuance of $585.0 million principal amount of our convertible
debentures.
(5) For purposes of computing the ratios of earnings to fixed charges,
"earnings" represent income from continuing operations before taxes,
minority interest and extraordinary items, plus fixed charges. "Fixed
charges" consist of interest on indebtedness and amortization of debt
expense and one-third of rental expense, which we treat as the interest
component of rental expense.
7
<PAGE> 11
SELECTED FINANCIAL INFORMATION -- THERMEDICS
We have derived the selected financial information presented below as of
and for the fiscal years ended January 1, 2000, and January 2, 1999, and for the
fiscal year ended January 3, 1998, from Thermedics' consolidated financial
statements, which Arthur Andersen LLP, independent public accountants, audited,
as indicated in their report. We incorporate these financial statements by
reference into this prospectus from Thermedics' Annual Report on Form 10-K for
the fiscal year ended January 1, 2000. We have derived the selected financial
information presented below as of January 3, 1998, and as of and for the fiscal
years ended December 28, 1996 and December 30, 1995, from Thermedics'
consolidated financial statements, which Arthur Andersen LLP audited, but which
we have not included or incorporated by reference in this prospectus. You should
read this information in conjunction with Thermedics' consolidated financial
statements and the related notes that we incorporate by reference into this
prospectus. The selected financial information as of and for the three months
ended April 1, 2000, and April 3, 1999, has not been audited but, in the opinion
of Thermedics, includes all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly such information in accordance with
generally accepted accounting principles applied on a consistent basis. The
results of operations for the three months ended April 1, 2000, are not
necessarily indicative of results for the entire year.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
------------------- FISCAL YEAR(1)
APRIL 1, APRIL 3, ----------------------------------------------------
2000 1999 1999(2) 1998(3) 1997(4) 1996(5) 1995
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues......................................... $ 60,729 $51,960 $223,503 $208,644 $200,184 $179,608 $118,835
Income from Continuing Operations Before
Extraordinary Item............................. 2,691 1,692 10,578 14,939 36,861 21,808 6,644
Net Income (Loss)................................ 2,691 2,582 (13,221) 23,610 41,492 29,138 17,174
Earnings per Share from Continuing Operations
Before Extraordinary Item:
Basic.......................................... .06 .04 .25 .36 1.00 .60 .20
Diluted........................................ .06 .04 .25 .35 .95 .57 .20
Earnings (Loss) per Share:
Basic.......................................... .06 .06 (.32) .57 1.13 .80 .51
Diluted........................................ .06 .06 (.31) .55 1.07 .75 .49
BALANCE SHEET DATA (AT END OF PERIOD):
Working Capital.................................. $142,103 $153,419 $183,832 $213,866 $184,051 $ 71,833
Total Assets..................................... 432,652 441,809 408,483 380,179 349,086 267,445
Long Term Obligations............................ 47,578 47,599 47,552 65,021 65,014 8,319
Minority Interest................................ 33,232 44,273 42,007 38,632 25,325 --
Shareholders' Investment......................... 235,507 223,402 248,127 227,851 211,643 171,799
OTHER DATA (UNAUDITED):
Book Value per Share............................. $ 5.60 $ 5.33 $ 5.95 $ 6.21 $ 5.77 $ 5.06
Cash Dividends Declared per Share................ -- -- -- -- -- --
Ratio of Earnings to Fixed Charges(6)............ 5.58x 6.09x 9.55x
</TABLE>
---------------
(1) Thermedics' 1999, 1998, 1997, 1996 and 1995 fiscal years ended January 1,
2000, January 2, 1999, January 3, 1998, December 28, 1996 and December 30,
1995, respectively.
(2) Reflects a $2.7 million pretax charge for restructuring and related costs
consisting of $0.8 million of unusual costs and $1.9 million of inventory
provisions. Also reflects Thermedics' July 1999 acquisition of Eric Jaeger,
GmbH.
(3) Reflects a $4.6 million extraordinary gain, net of taxes, and Thermedics'
June 1998 acquisition of its product-monitoring business.
(4) Reflects a $17.1 million nontaxable gain from the issuance of stock by a
subsidiary.
(5) Reflects $23.7 million of nontaxable gains from the issuance of stock by
subsidiaries, a $12.7 million pretax charge for restructuring and unusual
costs, Thermedics' January 1996 acquisition of Moisture Systems Corporation
and certain affiliated companies and Rutter & Co. B.V. and Thermedics' May
1996 issuance of $65.0 million principal amount of non-interest bearing
subordinated convertible debentures.
(6) For purposes of computing the ratios of earnings to fixed charges,
"earnings" represent income from continuing operations before taxes,
minority interest and extraordinary items, plus fixed charges. "Fixed
charges" consist of interest on indebtedness and amortization of debt
expense and one-third of rental expense, which we treat as the interest
component of rental expense.
8
<PAGE> 12
UNAUDITED PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
AND COMPARATIVE PER SHARE DATA
The following table presents unaudited pro forma combined selected
financial information for us and for Thermedics, historical selected financial
information for us and for Thermedics, and unaudited pro forma combined per
share data for us and for Thermedics. We derived the historical financial
information from our financial statements and those of Thermedics, which we
incorporate by reference into this prospectus. We derived the pro forma
information from the pro forma consolidated condensed financial information
included elsewhere in this prospectus. The unaudited pro forma consolidated
condensed statement of operations data sets forth our results of operations for
the three months ended April 1, 2000, and the fiscal year ended January 1, 2000,
assuming that we had successfully completed the exchange offer and the merger as
of the beginning of fiscal 1999. The unaudited pro forma consolidated condensed
balance sheet data sets forth our financial position as of April 1, 2000,
assuming that we had successfully completed the exchange offer and the merger on
April 1, 2000.
This data is not necessarily indicative of the results of the future
operations of the combined entity or the actual results that would have occurred
had we completed the exchange offer and the merger prior to the periods
indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED FISCAL YEAR ENDED
APRIL 1, 2000 JANUARY 1, 2000
------------------ -----------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
PRO FORMA COMBINED:
STATEMENT OF OPERATIONS DATA:
Revenues................................................ $ 598,929 $2,471,193
Income (Loss) from Continuing Operations Before
Extraordinary Items.................................. 14,976 (15,841)
BALANCE SHEET DATA (AT END OF PERIOD):
Working Capital......................................... $1,638,422
Total Assets............................................ 5,236,670
Long-term Obligations................................... 1,570,323
Minority Interest....................................... 316,323
Common Stock of Subsidiaries Subject to Redemption...... 7,692
Shareholders' Investment................................ 2,122,311
PER SHARE DATA:
THERMO ELECTRON (HISTORICAL):
Book Value per Common Share............................. $ 12.84
Cash Dividends Declared per Share....................... -- --
Earnings (Loss) per Share from Continuing Operations
Before Extraordinary Items:
Basic................................................ $ .10 $ (.09)
Diluted.............................................. $ .09 $ (.11)
Ratio of Earnings to Fixed Charges(2)................... 2.38x 1.32x
PRO FORMA:
COMBINED PER SHARE OF THERMO ELECTRON STOCK:
Book Value per Common Share............................. $ 13.14
Cash Dividends Declared per Share....................... -- --
Earnings (Loss) per Share from Continuing Operations
Before Extraordinary Items:
Basic................................................ $ .09 $ (.10)
Diluted.............................................. $ .09 $ (.12)
Ratio of Earnings to Fixed Charges(2)................... 2.37x 1.31x
</TABLE>
9
<PAGE> 13
<TABLE>
<CAPTION>
THREE MONTHS ENDED FISCAL YEAR ENDED
APRIL 1, 2000 JANUARY 1, 2000
------------------ -----------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
COMBINED PER THERMO ELECTRON SHARE EQUIVALENT(1):
Book Value per Common Share............................. $ 5.91
Cash Dividends Declared per Share....................... -- --
Earnings (Loss) per Share from Continuing Operations
Before Extraordinary Items:
Basic................................................ $ .04 $ (.04)
Diluted.............................................. $ .04 $ (.05)
Ratio of Earnings to Fixed Charges(2)................... 1.07x .59x
THERMEDICS (HISTORICAL):
Book Value per Common Share............................. $ 5.60
Cash Dividends Declared per Share....................... -- --
Earnings per Share from Continuing Operations Before
Extraordinary Item:
Basic................................................ $ .06 $ .25
Diluted.............................................. $ .06 $ .25
Ratio of Earnings to Fixed Charges(2)................... 5.58x 6.09x
</TABLE>
---------------
(1) Pro forma combined per Thermo Electron share equivalent data has been
calculated based on the pro forma combined data for Thermo Electron common
stock, multiplied by an exchange ratio of 0.45. See "The Exchange
Offer -- Terms Of The Exchange Offer; Expiration Of The Exchange Offer --
Exchange Ratio" for a description of the exchange ratio. The exchange ratio
is the 0.45 shares of our common stock which you would have received for
each share of Thermedics common stock in the exchange offer or the merger.
(2) For purposes of computing the ratios of earnings to fixed charges,
"earnings" represent income from continuing operations before taxes,
minority interest and extraordinary items, plus fixed charges. "Fixed
charges" consist of interest on indebtedness and amortization of debt
expense and one-third of rental expense, which we treat as the interest
component of rental expense.
10
<PAGE> 14
- COMPARATIVE PER SHARE MARKET INFORMATION (PAGE 44)
Our common stock is traded on the New York Stock Exchange under the symbol
"TMO." Thermedics' common stock is traded on the American Stock Exchange under
the symbol "TMD."
The following table presents the closing prices per share of Thermedics
common stock and the closing prices per share of our common stock on:
- March 7, 2000, the last trading day before our public announcement of the
terms, including the exchange ratio, of the exchange offer and the
merger; and
- June 13, 2000, the last trading date before the date of this prospectus.
The table also presents, in the line entitled "Equivalent Per Share Price,"
the price per share of Thermedics common stock based upon the exchange ratio of
0.45 shares of our common stock for each share of Thermedics common stock.
<TABLE>
<CAPTION>
MARCH 7, 2000 JUNE 13, 2000
------------- -------------
<S> <C> <C>
Thermedics................................................ $9.0625 $ 8.25
Thermo Electron........................................... $ 24.00 $18.6875
Equivalent Per Share Price................................ $ 10.80 $ 8.41
</TABLE>
You should obtain current stock price quotations for our common stock and
the Thermedics common stock.
- FOR MORE INFORMATION (PAGE 61)
You can obtain more information about Thermedics and about us from our
respective public filings with the SEC. See "Where You Can Find More
Information."
If you have any questions about the exchange offer, you should call the
information agent, D.F. King & Co., Inc. If you are a banker or broker, call
collect at (212) 269-5550. All others should call toll-free at (800) 290-6433.
11
<PAGE> 15
RISK FACTORS
The exchange offer, the merger and an investment in our common stock
involve a high degree of risk. If any of the following events occurs, our
business, financial condition and results of operations would likely suffer,
possibly materially.
RISK RELATED TO THE EXCHANGE OFFER AND THE MERGER
BECAUSE WE WILL NOT ADJUST THE EXCHANGE RATIO TO REFLECT CHANGES IN OUR OR
THERMEDICS' STOCK PRICE, THE FIXED EXCHANGE RATIO USED IN THE EXCHANGE OFFER MAY
PROVE UNFAVORABLE TO YOU.
We have fixed the exchange ratio at 0.45 shares of our common stock for
each share of Thermedics common stock. We will not adjust the exchange ratio to
reflect fluctuations in the market value of shares of our common stock or
Thermedics common stock. We will use the same exchange ratio in the exchange
offer and the merger. If you tender your shares of Thermedics common stock and
we complete the exchange offer or if you do not tender your shares of Thermedics
common stock and do not properly exercise your appraisal rights in connection
with the merger, you will be locked into the exchange ratio and you will not be
able to capture gains from possible increases in the value of Thermedics common
stock. You may incur losses from possible decreases in the value of our common
stock.
RISKS RELATED TO OUR REORGANIZATION
BECAUSE OUR REORGANIZATION IS VERY COMPLEX AND WILL REQUIRE GOVERNMENTAL AND
THIRD PARTY CONSENTS AND APPROVALS, WE MAY NOT BE ABLE TO SUCCESSFULLY COMPLETE
THIS REORGANIZATION OR TO DO SO ON THE TIME SCHEDULE WE CONTEMPLATE.
Our reorganization consists of:
- the acquisition of the public minority interest in most of our
subsidiaries that have minority investors;
- the spin off of two of our businesses; and
- the sale of a variety of non-core businesses.
To accomplish these objectives, we will need to obtain a variety of governmental
and third party consents and approvals. In particular, in addition to the
Internal Revenue Service ruling that we discuss below, we will need to obtain:
- approval of the spin-offs and some of the other transactions by our board
of directors;
- when we are making a tender or exchange offer, the tender by minority
stockholders of enough shares to allow us to own at least 90% of the
target subsidiary's outstanding shares; and
- the receipt of any necessary third party contractual consents.
We also must make various filings with the SEC relating to the reorganization
that must comply with the SEC's rules.
If we do not receive these consents and approvals and make the required
filings with the SEC in compliance with its rules, we may not be able to effect
all aspects of our reorganization. If we are not able to effect all aspects of
the reorganization, we may not achieve all of the anticipated benefits of our
reorganization. Until we have completed the entire reorganization, we will
continue to own and operate a diverse group of businesses, some of which may
continue to have minority stockholders.
Our reorganization is time-consuming and expensive, and consumes management
resources. The failure of our management to complete the proposed reorganization
in a timely manner could negatively affect the public market's confidence in our
management, which in turn may adversely affect the market price of our common
stock.
12
<PAGE> 16
WE DO NOT EXPECT TO PROCEED WITH OUR TWO PLANNED SPIN-OFFS UNTIL WE RECEIVE A
FAVORABLE RULING FROM THE INTERNAL REVENUE SERVICE, WHICH THE INTERNAL REVENUE
SERVICE MAY NOT ISSUE OR WHICH MAY TAKE A SUBSTANTIAL PERIOD OF TIME FOR US TO
OBTAIN.
We do not expect to spin-off our business that serves the healthcare
industry with a range of medical products for diagnosis and monitoring or our
paper recycling and papermaking equipment business unless we obtain a favorable
ruling from the Internal Revenue Service. The Internal Revenue Service may not
grant the necessary ruling or may seek to impose conditions to the granting of
the ruling that are not acceptable to us. We do not expect the Internal Revenue
Service to issue a tax ruling before the end of 2000, and additional delays are
possible.
AS PART OF OUR REORGANIZATION, WE ARE SEEKING TO DIVEST A SIGNIFICANT NUMBER OF
BUSINESSES; WE MAY NOT SUCCEED IN SELLING ALL OF THESE BUSINESSES IN A TIMELY
MANNER OR AT PRICES WE CONSIDER ACCEPTABLE.
We plan to sell a significant number of businesses as part of our
reorganization. This process will entail a number of risks:
- We may not find buyers for all of these businesses.
- The timing of these dispositions is uncertain.
- We cannot be certain that the terms, including price, for the sale of
these businesses will be acceptable to us.
- Each of these sales will be subject to various conditions, including
conditions in the agreements governing the transaction and the receipt of
necessary governmental approvals.
EVEN IF WE SUCCEED IN COMPLETING OUR REORGANIZATION, WE WILL FACE A NUMBER OF
CHALLENGES IN INTEGRATING OUR INSTRUMENT BUSINESS.
Currently we operate our instrument business directly and through a number
of majority-owned subsidiaries, including Thermo Instrument Systems Inc. and
Thermedics. We have conducted these operations largely as autonomous,
unaffiliated businesses. As part of our reorganization, we plan to manage these
operations in a more coordinated manner. The following factors may make it
difficult for us to successfully integrate and consolidate our instrument
operations:
- Our success in integrating these businesses will depend on our ability to
coordinate geographically separate organizations and integrate personnel
with different business backgrounds and corporate cultures.
- Our ability to combine these businesses will require coordination of
administrative, sales and marketing, distribution and accounting and
finance functions and expansion of information and management systems.
- The integration process could disrupt our instrument business.
- Retaining key employees of these businesses may be difficult.
OUR REORGANIZATION CONTEMPLATES THE ISSUANCE OF A SIGNIFICANT NUMBER OF
ADDITIONAL SHARES OF OUR COMMON STOCK, WHICH MAY DEPRESS THE MARKET PRICE OF OUR
SHARES.
We expect to issue a substantial number of shares of our common stock or
securities exercisable for shares of our common stock in connection with the
exchange offer, the merger and our reorganization. At May 31, 2000, 155,547,567
shares of our common stock were outstanding. The number of shares of our
13
<PAGE> 17
common stock outstanding may increase by as many as 55.2 million shares because,
as part of our reorganization:
- We plan to exchange shares of our common stock for the common stock held
by minority stockholders in a number of our public subsidiaries,
including Thermedics. We expect to issue a total of approximately 22.3
million shares of our common stock in these transactions.
- We plan to assume employee stock options in these transactions, including
the merger with Thermedics, that would be exercisable for approximately
15.3 million shares of our common stock. In addition, we may be required
to issue additional stock options to retain our key employees.
- The debentures issued by some of our subsidiaries, including Thermedics,
will become convertible into shares of our common stock. Based on the
total principal amounts outstanding of these debentures and the
conversion prices at May 31, 2000, these debentures would be convertible
into approximately 17.6 million shares of our common stock.
The increase in the number of outstanding shares of our common stock, as
well as the potential future issuance of shares of our common stock upon
conversion of debentures or exercise of employee stock options, may depress the
market price of our common stock.
WE ARE UNABLE TO PREDICT THE LIQUIDITY OR PROSPECTIVE PERFORMANCE OF THE COMMON
STOCK OF THE COMPANIES THAT WE INTEND TO SPIN OFF.
We are unable to predict the liquidity or market performance of the shares
of the businesses we plan to spin off. Although Thermo Fibertek Inc., the
company that conducts our paper recycling and papermaking equipment business,
has publicly traded shares, the historic prices of these shares may not be
representative of the trading price of Thermo Fibertek's common stock after the
number of shares held by its stockholders other than us increases as a result of
the spin-off. We currently conduct our business that serves the healthcare
industry with a range of medical products for diagnosis and monitoring both
directly and through subsidiaries. There is currently no public trading market
for the shares of the company that will conduct this business following the
proposed spin-off. The businesses that we are spinning off may not have the
financial resources and management skills necessary to succeed as independent
entities.
AS A RESULT OF THE SPIN-OFF OF THERMO FIBERTEK AND ITS SUBSIDIARIES, WE WILL
REMAIN AS THE GUARANTOR OF INDEBTEDNESS AND STOCK REDEMPTION RIGHTS OF THESE
COMPANIES EVEN THOUGH WE WILL NO LONGER CONTROL THEIR BUSINESS OR OPERATIONS.
We have guaranteed the payment of principal and interest on $153 million
principal amount of debentures issued by Thermo Fibertek. These debentures
mature in July 2004. We have also guaranteed the financial obligations of Thermo
Fibergen Inc., a subsidiary of Thermo Fibertek, under stock redemption rights
granted by Thermo Fibergen. We are contingently liable for $60.1 million under
these stock redemption rights, some of which terminate in September 2000 and the
remainder of which terminate in September 2001. We will remain liable as a
guarantor for these obligations following the spin-offs, although we will no
longer control the business or operations of Thermo Fibertek or of its
subsidiaries.
RISKS RELATED TO OUR BUSINESS AND FINANCIAL CONDITION
OUR STOCK PRICE MAY BE VOLATILE, WHICH COULD CAUSE YOU TO LOSE PART OR ALL OF
YOUR INVESTMENT.
The market price for our common stock can be very volatile. As of June 13,
2000, the 52-week range of the market price of our common stock was $12.75 to
$26.875 per share. The market price for our common stock may be affected by a
number of factors, including:
- the risks described in this prospectus;
- our financial results; and
- general market conditions.
14
<PAGE> 18
In addition, the stock market has experienced extreme price and volume
fluctuations. This volatility has significantly affected the market prices of
securities for reasons frequently unrelated to or disproportionate to the
operating performance of the specific companies. These broad market fluctuations
may adversely affect the market price of our common stock.
WE HAVE ACQUIRED SEVERAL COMPANIES AND BUSINESSES; AS A RESULT WE HAVE RECORDED
SIGNIFICANT GOODWILL ON OUR BALANCE SHEET, WHICH WE MUST CONTINUALLY EVALUATE
FOR POTENTIAL IMPAIRMENT.
We have acquired significant intangible assets, including approximately
$1.2 billion of cost in excess of net assets of acquired companies, or goodwill,
that we have recorded on our balance sheet as of January 1, 2000. We amortize
this goodwill principally over 40 year periods. We assess the future useful life
of the goodwill we have on our books whenever events or changes in circumstances
indicate that the current useful life has diminished. These events or
circumstances generally include operating losses or a significant decline in
earnings associated with the acquired business or asset. Goodwill amortization
from our continuing operations was $35 million in fiscal 1999. In addition, in
fiscal 1999 we wrote off $29 million of goodwill attributable to our continuing
operations that we determined was impaired in connection with the planned sale
of our power electronics and test equipment business.
We expect to record additional goodwill in 2000 as a result of our
acquisition of the minority interests in most of our publicly-traded
subsidiaries. Our ability to realize the value of this asset will depend on
future cash flows of the businesses in which we acquire these interests. These
cash flows in turn depend in part on how well we can integrate these businesses.
IT MAY BE DIFFICULT FOR US TO EXPAND BECAUSE SOME OF THE MARKETS FOR OUR
PRODUCTS ARE NOT GROWING.
Some of the markets in which we compete have been flat or declining over
the past several years. To address this issue, we are pursuing a number of
strategies to improve our internal growth, including:
- finding new markets for our products;
- developing new applications for our technologies;
- combining sales and marketing operations in appropriate markets to
compete more effectively;
- actively funding research and development; and
- strengthening our presence in selected geographic markets.
These strategies may not result in growth of our business, and we may not be
able to successfully implement these strategies.
WE HAVE SIGNIFICANT INTERNATIONAL OPERATIONS, WHICH ENTAIL THE RISK THAT
EXCHANGE RATE FLUCTUATIONS MAY NEGATIVELY AFFECT DEMAND FOR OUR PRODUCTS AND OUR
PROFITABILITY.
We are a global company with substantial operations outside of the United
States. We intend to continue to expand our international operations. In 1999,
our international revenues from continuing operations, including export revenues
from the United States, accounted for approximately 63% of our total revenues.
Our international revenues are subject to the risk that changes in exchange
rates may adversely affect demand for our products and the profitability in U.S.
dollars of products and services we provide in foreign markets, where payment
for our products and services is made in the local currency. For example, in the
first quarter of fiscal 2000, the unfavorable effects of currency translation
decreased revenues of Thermo Electron's continuing operations by $15.6 million.
WE MUST DEVELOP NEW PRODUCTS, ADAPT TO RAPID AND SIGNIFICANT TECHNOLOGICAL
CHANGE AND RESPOND TO INTRODUCTIONS OF NEW PRODUCTS TO REMAIN COMPETITIVE.
Our growth strategy includes significant investment in product development.
We intend to increase our investment in research and development. We sell our
products in several industries that are
15
<PAGE> 19
characterized by rapid and significant technological changes, frequent new
product and service introductions and enhancements and evolving industry
standards. Without the timely introduction of new products, services and
enhancements, our products and services will likely become technologically
obsolete over time, in which case our revenue and operating results would
suffer.
Our customers use many of our products to develop, test and manufacture
their new products. As a result, we must anticipate industry trends and develop
products in advance of the commercialization of our customers' products. If we
fail to adequately predict our customers' needs and future activities, we may
invest heavily in research and development of products and services that do not
lead to significant revenue.
Many of our products and products under development are technologically
innovative and require significant planning, design, development and testing at
the technological, product and manufacturing-process levels. These activities
require us to make significant investments.
Products in our markets undergo rapid and significant technological change
because of quickly changing industry standards and the introduction of new
products and technologies that make existing products and technologies
uncompetitive or obsolete. Our competition may adapt more quickly to new
technologies and changes in our customers' requirements than we can. The
products we are currently developing, or those we will develop in the future,
may not be technologically feasible or accepted by the marketplace, and our
products or technologies could become uncompetitive or obsolete.
CHANGES IN GOVERNMENTAL REGULATIONS MAY REDUCE DEMAND FOR OUR PRODUCTS OR
INCREASE OUR EXPENSES.
We compete in many markets in which we or our customers must comply with
federal, state, local and foreign regulations, such as environmental, health and
safety and food and drug regulations. We develop, configure and market our
products to meet customer needs created by these regulations. Any significant
change in these regulations could reduce demand for our products. For example,
many of our instruments are marketed to the pharmaceutical industry for use in
discovering and developing drugs. Changes in the Food and Drug Administration's
regulation of the drug discovery and development process could have an adverse
effect on the demand for these products.
DEMAND FOR SOME OF OUR PRODUCTS DEPENDS ON CAPITAL SPENDING POLICIES OF OUR
CUSTOMERS AND ON GOVERNMENT FUNDING POLICIES.
Our customers include manufacturers of semiconductors and products
incorporating semiconductors, pharmaceutical and chemical companies,
laboratories, universities, healthcare providers, government agencies and public
and private research institutions. Many factors, including public policy
spending provisions, available resources and economic cycles have a significant
effect on the capital spending policies of these entities. These policies in
turn can have a significant effect on the demand for our products. For example,
a reduction in discretionary capital spending by petrochemical, oil and gas, and
mining companies, due to difficult market conditions, has adversely affected our
businesses operating in the process control industry. Similarly, softness in the
semiconductor industry has resulted in lower revenues at some of our businesses.
Also, our Thermedics Detection Inc. subsidiary has experienced lower demand for
its detection instruments as a result of a shift in the process of recycling
plastic containers in Europe, from sanitizing and reusing recyclables, to
melting and re-forming plastic containers.
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<PAGE> 20
FORWARD-LOOKING STATEMENTS
This prospectus and the information that we incorporate by reference into
this prospectus include statements that are subject to risks and uncertainties
and are based on the beliefs and assumptions of our and Thermedics' management,
based on information currently available to each company's management. When we
use words such as "believes," "expects," "anticipates," "intends," "plans,"
"estimates," "should," "likely" or similar expressions, we are making
forward-looking statements. Forward-looking statements include the information
concerning possible or assumed future results of our and Thermedics' operations
set forth:
- under "Summary," "Risk Factors," "Information About Thermo Electron And
Thermedics," "Background To The Exchange Offer And The Merger,"
"Transactions With Related Parties" and "Thermo Electron Corporation Pro
Forma Consolidated Condensed Financial Statements (Unaudited)" in this
prospectus;
- under "Business" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our and Thermedics' Annual
Reports on Form 10-K that we incorporate by reference into this
prospectus; and
- under "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our and Thermedics' Quarterly Reports on Form
10-Q that we incorporate by reference into this prospectus.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. The future results and stockholder values
of Thermo Electron and Thermedics may differ materially from those expressed in
the forward-looking statements. Many of the important factors that will
determine these results and values are beyond our ability to control or predict.
You should not put undue reliance on any forward-looking statements. For a
discussion of important factors that may cause actual results to differ
materially from those suggested by the forward-looking statements, you should
read carefully the section of this prospectus captioned "Risk Factors" that
starts on page 12.
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<PAGE> 21
INFORMATION ABOUT THERMO ELECTRON AND THERMEDICS
THERMO ELECTRON
Thermo Electron Corporation, a Delaware corporation, develops, manufactures
and sells measurement and detection instruments that our customers use to
collect, monitor and analyze data. We are in the process of spinning off our
business that serves the healthcare industry with a range of medical products
for diagnosis and monitoring, and our paper recycling and papermaking equipment
business. We are also in the process of selling various non-core businesses. We
plan to take Thermo Ecotek, our electric power generation business, private.
Although we no longer consider it a core business under our new strategy, we
expect to retain Thermo Ecotek after it is taken private while we continue to
evaluate how to best exit that business and create maximum value for our
stockholders. See "Background To The Exchange Offer And The Merger -- Our
Reorganization; Purpose And Reasons For The Exchange Offer And The Merger -- Our
Reorganization."
Our common stock is listed on the New York Stock Exchange under the symbol
"TMO." Our principal executive offices are located at 81 Wyman Street, P.O. Box
9046, Waltham, Massachusetts 02454-9046, and our telephone number is (781)
622-1000.
The name, business address, principal occupation, five-year employment
history and citizenship of each of our directors and executive officers is
included in Annex A to this prospectus. None of our executive officers or
directors purchased or sold any shares of Thermedics common stock during the 60-
day period ended on June 13, 2000.
During the past five years, we have not been convicted in a criminal
proceeding, excluding traffic violations or similar misdemeanors, or been a
party to any judicial or administrative proceeding, except for any matters that
were dismissed without sanction or settlement, that resulted in a judgment,
decree or final order enjoining us from future violations of, or prohibiting
activities subject to, federal or state securities laws, or a finding of any
violation of federal or state securities laws.
We are subject to the disclosure requirements of the Exchange Act and are
required to file reports, proxy statements and other information with the SEC
relating to our business, financial condition and other matters. You can inspect
and copy, at prescribed rates, these reports, proxy statements and other
information at the offices of the SEC and the New York Stock Exchange. See
"Where You Can Find More Information."
THERMEDICS
Thermedics Inc., a Massachusetts corporation, develops, manufactures and
markets diverse product lines, including biomedical products, security
instruments and equipment that assures the quality of a wide variety of consumer
products and bulk materials. Thermedics is seeking a buyer for its Thermo
Cardiosystems subsidiary, which manufactures implantable heart assist devices.
Thermedics common stock is listed on the American Stock Exchange under the
symbol "TMD." Thermedics' principal executive offices are located at 470
Wildwood Street, P.O. Box 2999, Woburn, Massachusetts 01888-1799, and its
telephone number is (781) 622-1000.
The name, business address, principal occupation, five-year employment
history and citizenship of each of Thermedics' directors and executive officers
is included in Annex A to this prospectus. None of Thermedics' executive
officers or directors purchased or sold any shares of Thermedics common stock
during the 60-day period ended on June 13, 2000.
Thermedics is subject to the disclosure requirements of the Exchange Act
and is required to file reports, proxy statements and other information with the
SEC relating to its business, financial condition and other matters. You can
inspect and copy, at prescribed rates, these reports, proxy statements and other
information at the offices of the SEC and the American Stock Exchange. See
"Where You Can Find More Information."
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<PAGE> 22
BACKGROUND TO THE EXCHANGE OFFER AND THE MERGER
OUR REORGANIZATION; PURPOSE AND REASONS FOR THE EXCHANGE OFFER AND THE MERGER
Our Reorganization. On January 31, 2000, we announced that our board of
directors had authorized our management to proceed with a major reorganization
of our operations. The reorganization reflects a significant change in strategic
direction for us, both in terms of our business focus and operating structure.
- Until we adopted the reorganization plan, we had historically been
engaged in a diversified group of businesses. If we complete all aspects
of the reorganization, we will focus primarily on our instruments
business. Thermedics' Thermo Sentron Inc. and Thermedics Detection Inc.
businesses would remain a part of our core instruments business. We
expect to spin off some of the remaining Thermedics businesses as part of
our business that serves the healthcare industry with a range of medical
products for diagnosis and monitoring and to sell the balance of those
businesses. Thermedics has signed letters of intent to sell its remaining
Thermo Voltek Corp. businesses and is seeking a buyer for its Thermo
Cardiosystems subsidiary, which manufactures implantable heart assist
devices.
- We have historically pursued a strategy of publicly offering minority
interests in some of our subsidiaries. These subsidiaries, in turn,
pursued the same strategy. Our management has reevaluated the benefits
and detriments of this corporate structure and concluded that we would
benefit if we reorganized our instrument businesses under a single parent
company without minority interests. To acquire the minority interests in
our subsidiaries, this new strategy includes exchanging shares of our
common stock for publicly held shares of the common stock of a number of
our subsidiaries, and tender offers and mergers by Thermedics and Thermo
Instrument involving publicly held shares of common stock of their
subsidiaries.
As part of our reorganization, we intend to spin-off or dispose of all of
our businesses other than our instrument business and our electric power
generation business. We do not expect to complete the spin-offs until the end of
2000 or early 2001. If you receive shares of our common stock in the exchange
offer or the merger and hold them at the time we complete the spin-offs, you
will receive shares of common stock of the companies that conduct our business
that serves the healthcare industry with a range of medical products for
diagnosis and monitoring and our paper recycling and papermaking equipment
business. See "Risk Factors -- Risks Related to Our Reorganization -- We are
unable to predict the liquidity or prospective performance of the common stock
of the companies that we intend to spin off." In addition, we will continue to
hold non-core assets until we sell them, which may not occur until after we
complete the proposed spin-offs. During the fiscal year ended January 1, 2000,
revenue from these non-core businesses and the businesses we are spinning off
was approximately $1.83 billion and net loss from the non-core businesses and
the businesses we are spinning off was approximately $111.5 million.
We plan to take Thermo Ecotek, our electric power generation business,
private. Although we no longer consider it a core business under our new
strategy, we expect to retain Thermo Ecotek after we take it private while we
continue to evaluate how to best exit that business and create maximum value for
our stockholders.
As of June 13, 2000, the status of the reorganization was as follows:
- We had acquired for cash the publicly held minority equity interests in
13 of our subsidiaries;
- We had filed registration statements with the SEC relating to the
acquisitions of the publicly held minority equity interests in four of
our subsidiaries for shares of our common stock in mergers;
- We had filed registration statements with the SEC relating to the
acquisitions of the publicly held minority equity interests in two of our
subsidiaries, Thermo Instrument and Thermedics, for shares of our common
stock in exchange offers;
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<PAGE> 23
- We were seeking buyers for two of our publicly traded subsidiaries;
- We had filed a ruling request with the IRS relating to the two proposed
spin-offs; and
- We were evaluating our options for our subsidiary, Spectra-Physics
Lasers, Inc.
We currently expect that we will complete the acquisitions of minority interests
in our subsidiaries in the third quarter of 2000 and the spin-offs at the end of
2000 or early in 2001.
In addition, as of June 13, 2000, we had sold businesses with total 1999
revenues of approximately $246.4 million under our reorganization plan. We
received total gross proceeds, including both cash and non-cash consideration,
of approximately $235.7 million from these sales.
If we complete our reorganization as described above, we will not have any
public subsidiaries, unless we decide to keep Spectra-Physics Lasers as a public
subsidiary.
We have acquired the minority public interest in some of our subsidiaries
for cash, while in other cases we are issuing our common stock in exchange
offers or mergers. The primary factor in our decision whether to offer the
minority stockholders cash or our common stock was the outstanding principal
amount, if any, and due date, of that subsidiary's convertible debentures. In a
stock-for-stock merger or exchange offer, these debentures become convertible
into our common stock. If we take the subsidiary private in a cash transaction,
we must repay these debentures immediately. For example, if we had offered cash
in exchange for each outstanding share of Thermedics common stock in this
exchange offer, we would have been required to repay an aggregate of $47.4
million in principal amount of Thermedics' debentures.
Our August 1998 Proposal. In August 1998, we determined that we would
benefit from a corporate restructuring that would simplify our corporate
structure, consolidate and strategically realign some of our businesses and
increase the liquidity in the public stock of some of our publicly-traded
subsidiaries. We subsequently refined and expanded this proposal and, on January
31, 2000, announced our proposed reorganization described above under "-- Our
Reorganization; Purpose And Reasons For The Exchange Offer And The Merger -- Our
Reorganization."
As part of the August 1998 announcement, we proposed transferring our
wholly-owned biomedical group of companies to Thermedics in exchange for the
stock held by Thermedics in its instruments subsidiaries, Thermo Sentron,
Thermedics Detection and Thermo Voltek, along with additional shares of
Thermedics common stock. We also proposed that, as part of this process, we or
Thermedics would take Thermo Sentron and Thermedics Detection private.
In September 1998, the board of directors of Thermedics formed a special
committee consisting of Messrs. T. Anthony Brooks and Nicholas T. Zervas,
directors of Thermedics who are not employees of ours or any of our affiliates.
The special committee was authorized to negotiate the terms of the transaction
outlined in our August 1998 announcement and to retain its own legal and
financial advisors. Subsequently, the special committee engaged legal and
financial advisors in connection with the proposed transaction.
In 1999, we had several discussions with the special committee of the
Thermedics board of directors regarding terms for the proposed transaction.
However, in January 2000, we determined not to proceed with the proposed
transaction with Thermedics as described above, but instead decided to proceed
with the exchange offer and the merger described in this prospectus.
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<PAGE> 24
Purpose of the Exchange Offer and the Merger. The purpose of this exchange
offer and the merger is to acquire the minority public interest in Thermedics as
part of our overall reorganization. We are seeking through the reorganization
to:
- eliminate the complexity of our corporate structure; and
- focus on and integrate our instruments business.
We anticipate that our stockholders may realize the following benefits from
the exchange offer and the merger:
- By conducting our operations in a more coordinated manner with our
instruments subsidiaries, we would achieve greater marketing, operating
and administrative efficiency.
- We would eliminate additional burdens on management associated with
public reporting and other tasks resulting from Thermedics' public
company status. For example, Thermedics' management would no longer need
to dedicate time and resources to stockholder and analyst inquiries and
investor and public relations.
- We would lower costs, particularly those associated with being a public
company. For example, as a privately-held entity, Thermedics would no
longer be required to file quarterly, annual or other periodic reports
with the SEC or publish and distribute to its stockholders annual reports
and proxy statements. We anticipate that eliminating these costs,
including fees for an audit by an independent accounting firm and legal
fees, will result in savings of approximately $450,000 per year.
PROJECTED FINANCIAL DATA
Thermedics does not, as a matter of course, make public forecasts or
projections as to future sales, earnings or other income statement data, cash
flows or balance sheet and financial position information. However, in
connection with the exchange offer and the merger, we had access to Thermedics'
projections for the fourth quarter of fiscal 1999 and for fiscal 1999 and 2000.
These projections were prepared by management of Thermedics in the course of its
regular business planning.
We have included a summary of these Thermedics projections below. These
projections do not reflect any of the effects of the exchange offer or the
merger or other changes that may in the future be appropriate concerning
Thermedics and its assets, business, operations, properties, policies, corporate
structure, capitalization and management in light of the circumstances then
existing. Further, these projections include results from Thermedics' Thermo
Cardiosystems subsidiary and Thermo Voltek business. We treat Thermo
Cardiosystems and Thermo Voltek as discontinued operations in Thermedics'
financial statements that we incorporate by reference in this prospectus because
of Thermedics' plan to sell those businesses. We and Thermedics believe that the
assumptions were reasonable at the time Thermedics prepared the projections,
given the information known by our and Thermedics' management.
Thermedics did not prepare its projections for the fourth quarter of fiscal
1999 and for fiscal 1999 and 2000 with a view toward public disclosure or
compliance with published guidelines of the SEC or the American Institute of
Certified Public Accountants regarding forward-looking information or generally
accepted accounting principles. Neither Thermedics' independent auditors, nor
any other independent accountants, have compiled, examined or performed any
procedures with respect to the prospective financial information contained in
these projections nor have they expressed any opinion or given any form of
assurance on this information or its achievability. They assume no
responsibility for, and disclaim any association with, this prospective
financial information.
In preparing its projections for the fourth quarter of fiscal 1999 and for
fiscal 1999 and 2000, Thermedics necessarily made numerous assumptions, many of
which are beyond our or Thermedics'
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<PAGE> 25
control and may prove not to have been, or may no longer be, accurate. Except as
otherwise indicated, this information does not reflect revised prospects for
Thermedics' business, changes in general business and economic conditions or any
other transaction or event that has occurred or that may occur and that
Thermedics did not anticipate at the time it prepared this information,
including the proposed sale of Thermo Cardiosystems. Accordingly, this
information is not necessarily indicative of current values or future
performance, which may be significantly more favorable or less favorable than as
set forth below. You should not regard our inclusion of these projections as a
representation that they will be achieved.
THE THERMEDICS PROJECTIONS FOR THE FOURTH QUARTER OF FISCAL 1999 AND FOR
FISCAL 1999 AND 2000 ARE NOT GUARANTEES OF PERFORMANCE. THEY INVOLVE RISKS,
UNCERTAINTIES AND ASSUMPTIONS. THE FUTURE FINANCIAL RESULTS AND STOCKHOLDER
VALUE OF THERMEDICS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED IN THESE
PROJECTIONS. MANY OF THE FACTORS THAT WILL DETERMINE THESE RESULTS AND VALUES
ARE BEYOND THERMEDICS' ABILITY TO CONTROL OR PREDICT. YOU SHOULD NOT PLACE UNDUE
RELIANCE ON THESE PROJECTIONS. THESE PROJECTIONS MAY NOT BE REALIZED, AND
THERMEDICS' FUTURE FINANCIAL RESULTS MAY VARY MATERIALLY FROM THESE PROJECTIONS.
NEITHER THERMEDICS NOR WE INTEND TO UPDATE OR REVISE THESE PROJECTIONS.
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THERMEDICS PROJECTIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOURTH FISCAL FISCAL
QUARTER YEAR YEAR
FISCAL 1999 1999 2000
----------- -------- --------
<S> <C> <C> <C>
SELECTED STATEMENT OF OPERATIONS DATA:
Revenues................................................... $ 88,901 $327,529 $377,276
-------- -------- --------
Costs and Operating Expenses
Cost of Revenues......................................... 45,372 172,469 190,556
Operating Expenses....................................... 36,442 130,145 148,408
Restructuring Costs, Net................................. 400 32,438 --
-------- -------- --------
82,214 335,052 338,964
-------- -------- --------
Operating Income (Loss).................................... 6,687 (7,523) 38,312
Interest Income............................................ 2,663 10,911 10,575
Interest Expense........................................... (1,928) (6,596) (6,883)
-------- -------- --------
Income (Loss) Before Provision for Income Taxes and
Minority
Interest................................................. 7,422 (3,208) 42,004
Provision for Income Taxes................................. 2,789 8,762 16,810
Minority Interest Expense.................................. 1,365 4,863 5,911
-------- -------- --------
Net Income (Loss).......................................... $ 3,268 $(16,833) $ 19,283
======== ======== ========
SELECTED BALANCE SHEET DATA:
Accounts Receivable, Net................................... $ 72,941 $ 72,941 $ 76,335
Inventories................................................ 65,836 65,836 66,835
Prepaid Income Taxes and Other Current Assets.............. 16,071 16,071 15,852
-------- -------- --------
Total Current Assets Excluding Cash and Investments........ 154,848 154,848 159,022
Property, Plant and Equipment:
Balance, Beginning of Period............................. 22,623 21,907 23,076
Additions................................................ 2,781 7,865 9,444
Depreciation Expense..................................... (2,126) (7,931) (9,175)
Sales.................................................... (202) 1,235 --
-------- -------- --------
Balance, End of Period................................... 23,076 23,076 23,345
Cost in Excess of Net Assets of Acquired Companies......... 154,132 154,132 149,934
</TABLE>
CONFLICTS OF INTEREST
Thermo Electron. In setting the exchange ratio, our financial interest was
adverse to the financial interest of the public stockholders of Thermedics. We
set the exchange ratio on our own and without any negotiations with Thermedics.
Our Directors. The members of our board of directors own, or hold options
to purchase, shares of our common stock and/or shares of common stock of
Thermedics. These positions and equity interests presented these directors with
actual or potential conflicts of interest in determining the exchange ratio and
the other terms of the exchange offer and the merger.
Officers and Directors of Thermedics. We set the exchange ratio on our own
and without negotiation with Thermedics. The board of directors of Thermedics
has formed a special committee to evaluate the exchange offer and to make a
recommendation to Thermedics' stockholders as to whether to accept or reject the
exchange offer. Messrs. T. Anthony Brooks and Nicholas T. Zervas, directors of
Thermedics who are not employees of Thermo Electron or of our affiliates, are
the members of this special committee.
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The special committee of the board of directors of Thermedics has
recommended that Thermedics stockholders accept the exchange offer and tender
their shares of Thermedics common stock. This recommendation is set forth in
Thermedics' Schedule 14D-9, dated May 12, 2000 and filed with the SEC. YOU
SHOULD CAREFULLY REVIEW THERMEDICS' SCHEDULE 14D-9 BEFORE DETERMINING WHETHER TO
TENDER YOUR SHARES IN THE EXCHANGE OFFER OR TO PURSUE YOUR APPRAISAL RIGHTS IN
CONNECTION WITH THE MERGER.
In considering any position that Thermedics has taken or may take in the
future with respect to the exchange offer and the merger, you should be aware
that the officers and several directors of Thermedics have interests in
connection with the exchange offer and the merger that present them with actual
or potential conflicts of interest, as summarized below.
Several members of the board of directors and executive officers of
Thermedics are directors or officers of ours and of our other affiliates, as set
forth below:
- Mr. John T. Keiser, the chief executive officer, president and a director
of Thermedics, is our chief operating officer, biomedical, and a director
of our affiliates Metrika Systems Corporation, Thermo Cardiosystems Inc.,
ThermoLase Corporation, ThermoTrex Corporation and Trex Medical
Corporation;
- Mr. Theo Melas-Kyriazi, the chief financial officer of Thermedics, is
also our chief financial officer; and
- Mr. Peter O. Crisp is one of our directors and one of Thermedics'
directors.
Consequently, these directors and officers receive or have received compensation
not only from Thermedics but also from us and/or our other affiliates.
Officers and directors of Thermedics who own shares of Thermedics common
stock will receive shares of our common stock in the exchange offer or the
merger at the same exchange ratio and on the same terms as the Thermedics public
stockholders. As of January 31, 2000, the members of the board of directors and
executive officers of Thermedics owned a total of 178,766 shares of Thermedics
common stock. These individuals would receive in exchange for their shares of
Thermedics common stock a total of 80,441 shares of our common stock, assuming
that they tender all of their shares of Thermedics common stock in the exchange
offer.
In addition, as of January 31, 2000, the members of the board of directors
and executive officers of Thermedics held options to acquire a total of 406,000
shares of Thermedics common stock, with exercise prices ranging from $7.14 to
$17.11. We would assume these options and convert them into options to acquire
shares of our common stock on the same terms as we assume and convert all of the
other outstanding Thermedics options in connection with the exchange offer and
the merger. See "-- Effects Of The Exchange Offer And The Merger -- Treatment of
Thermedics Options."
As of January 1, 2000, Mr. Brooks, Mr. Crisp and Dr. Zervas, directors of
Thermedics, had accumulated deferred units representing shares of Thermedics
common stock under Thermedics' deferred compensation plan for directors. These
units would be converted into shares of our common stock in the merger. See
"-- Effects Of The Exchange Offer And The Merger -- Treatment of Thermedics
Deferred Compensation Plan for Directors." The following table sets forth the
number of shares of Thermedics common stock each director's units represent and
the number of shares of our common stock into which those units would be
converted in the merger:
<TABLE>
<CAPTION>
SHARES OF OUR
SHARES OF THERMEDICS COMMON
COMMON STOCK STOCK
-------------------- -------------
<S> <C> <C>
Mr. Brooks.................................................. 1,367 615
Mr. Crisp................................................... 9,971 4,486
Dr. Zervas.................................................. 10,364 4,663
</TABLE>
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Indemnification Agreements. We have entered into separate indemnification
agreements with each of Thermedics' executive officers and directors, including
the members of the special committee. These agreements require us to indemnify
and advance expenses to the indemnified director or officer if he or she, by
reason of his or her status as a director or officer of Thermedics, or service
as a director, officer or fiduciary of another enterprise at our request, is
made or threatened to be made a party to any threatened, pending or completed
action, suit or other proceeding, whether civil, criminal, administrative or
investigative. We are only required to provide these benefits if the director or
officer seeking indemnification acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to our best interests, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. We are required to provide indemnification to
the maximum extent permitted by Delaware law in the case of any threatened,
pending or completed action, suit or proceeding by or in our right.
We entered into these indemnification agreements with Thermedics' officers
and directors so that the indemnified officers and directors would have
supplemental protection in the event that indemnification directly from
Thermedics was not available, either because of legal restrictions or because
Thermedics did not have the funds to cover the obligation.
THE MERGER
If we successfully complete the exchange offer, we plan to cause Thermedics
to merge into us in a so-called "short-form" merger. This merger would occur as
promptly as practicable after completion of the exchange offer. Under the
Massachusetts Business Corporation Law and the Delaware General Corporation Law,
if we own at least 90% of the outstanding shares of Thermedics common stock, we
would have the power to approve, adopt and complete the merger without a vote of
Thermedics' stockholders or board of directors. Our stockholders would own all
of the outstanding shares of the surviving corporation after the merger.
On the effective date of the merger, each outstanding share of Thermedics
common stock, other than shares of Thermedics common stock held by us or
Thermedics and shares of Thermedics common stock held by stockholders, if any,
who are entitled to and perfect their appraisal rights under Section 82(e) and
Sections 86 through 98 of the Massachusetts Business Corporation Law, would be
cancelled and converted into the right to receive 0.45 shares of our common
stock.
EFFECTS OF THE EXCHANGE OFFER AND THE MERGER
General. Upon completion of the exchange offer and the merger, we would
have complete control over the conduct of Thermedics' business and would have a
100% interest in the net book value and net earnings of Thermedics. In addition,
we would receive the benefit of complete control over any future increases in
the value of Thermedics and would bear the complete risk of any losses incurred
in the operation of Thermedics and any decrease in the value of Thermedics. Our
ownership of Thermedics, before the transactions contemplated by the exchange
offer and the merger, totaled approximately 75.5%.
Possible Effect of the Exchange Offer on the Market for Thermedics Common
Stock. After the completion of the exchange offer and before the effective date
of the merger, our exchange of shares of our common stock for shares of
Thermedics common stock pursuant to the exchange offer would reduce the number
of shares of Thermedics common stock that might otherwise trade publicly and may
reduce the number of holders of shares of Thermedics common stock. These
exchanges could adversely affect the liquidity and market value of the remaining
shares of Thermedics common stock held by the public.
American Stock Exchange Listing. If we complete the exchange offer and the
merger, the shares of Thermedics common stock would not meet the requirements
for continued listing on the American Stock Exchange and would be delisted.
Assuming that the merger occurs shortly after the completion of the exchange
offer, we do not expect the American Stock Exchange to delist the shares of
Thermedics common stock until after the effective date of the merger. However,
as discussed below, it is possible that the American Stock Exchange could take
this action.
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<PAGE> 29
The shares of Thermedics common stock may not meet the quantitative
requirements for continued listing on the American Stock Exchange following the
closing of the exchange offer and prior to the effective date of the merger.
Whether the shares of Thermedics common stock meets those requirements will
depend upon:
- the aggregate market value and the number of shares of Thermedics common
stock that we do not exchange for shares of our common stock pursuant to
the exchange offer; and
- the number of Thermedics public stockholders who are not affiliated with
us.
To be listed on the American Stock Exchange, an issuer must have at least
200,000 publicly held shares, held by at least 300 stockholders, with a market
value of at least $1,000,000 and have stockholders' equity of at least
$2,000,000 or $4,000,000, depending on profitability levels during the issuer's
four most recent fiscal years.
If the shares of Thermedics common stock no longer meet the requirements
for listing on the American Stock Exchange, it is possible that the shares would
continue to trade in the over-the-counter market before the effective date of
the merger and that price or other quotations might still be available from
other sources. The extent of the public market for the shares of Thermedics
common stock and the availability of such quotations would, however, depend upon
such factors as:
- the number of holders and/or the aggregate market value of such shares of
Thermedics common stock remaining at the time;
- the interest in maintaining a market in those shares of Thermedics common
stock on the part of securities firms; and
- the possible termination of registration of shares of Thermedics common
stock under the Exchange Act, as described below.
We cannot predict whether a reduction in the number of shares of Thermedics
common stock that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for or marketability of the shares of
Thermedics common stock or whether it would cause future market prices to be
greater or less than the price paid in the exchange offer and the merger.
Exchange Act Registration. The shares of Thermedics common stock are
currently registered under the Exchange Act. If we complete the exchange offer
and the merger, Thermedics' reporting obligations under the Exchange Act would
terminate.
Before the effective date of the merger, the exchange of shares of
Thermedics common stock for shares of our common stock pursuant to the exchange
offer may result in the shares of Thermedics common stock becoming eligible for
deregistration under the Exchange Act. Thermedics may apply to the SEC for
termination of the registration of its common stock if the common stock is not
listed on a national securities exchange and there are fewer than 300 record
holders of the shares of Thermedics common stock. See "-- American Stock
Exchange Listing."
If Thermedics terminates the registration of its common stock under the
Exchange Act:
- Thermedics would no longer be required to provide its stockholders with
annual, quarterly and other reports under the Exchange Act;
- Thermedics would no longer be required to comply with other provisions of
the Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b), the requirement of furnishing a proxy statement in
connection with stockholders' meetings pursuant to Section 14(a) and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions;
- "affiliates" of Thermedics and persons holding "restricted securities" of
Thermedics may be deprived of the ability to dispose of their securities
pursuant to Rule 144 under the Securities Act; and
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- the shares of Thermedics common stock would no longer be "margin
securities" or eligible for listing on the American Stock Exchange.
We presently intend to cause Thermedics to terminate the registration of
the shares of Thermedics common stock under the Exchange Act as soon after the
completion of the exchange offer or the merger as the requirements for
termination of registration are met.
Margin Regulations. The shares of Thermedics common stock are currently
"margin securities" under the rules of the Board of Governors of the Federal
Reserve System. As a result, brokers are allowed to extend credit, known as
purpose loans, on the collateral of shares of Thermedics common stock for the
purpose of buying, carrying or trading in securities. If we complete the
exchange offer and the merger, shares of Thermedics common stock would no longer
be "margin securities." Following the exchange of shares of Thermedics common
stock pursuant to the exchange offer and before the effective date of the
merger, depending upon factors such as the number of record holders of the
shares of Thermedics common stock and the number and market value of publicly
held shares of Thermedics common stock, the shares of Thermedics common stock
might no longer constitute "margin securities" for purposes of the Federal
Reserve Board's margin regulations and you could not then use your shares of
Thermedics common stock as collateral for purpose loans made by brokers. In
addition, if Thermedics terminated the registration of shares of its common
stock under the Exchange Act, the shares of its common stock would no longer
constitute "margin securities."
Treatment of Thermedics Options. Thermedics has issued options to acquire
shares of its common stock pursuant to Thermedics' Equity Incentive Plan,
Directors Stock Option Plan and Employees Equity Incentive Plan. In connection
with the exchange offer and the merger, we would assume Thermedics' plans and
each outstanding option under these plans. Each option that we assume would
continue to have, and be subject to, substantially the same terms and conditions
applicable to the option immediately before the effective date of the merger,
except that:
- each option would be exercisable, or would become exercisable in
accordance with its terms, for that number of whole shares of our common
stock equal to the product of the number of shares of Thermedics common
stock that were issuable upon exercise of the option immediately before
the effective date of the merger multiplied by the exchange ratio,
rounded down to the nearest whole number of shares of our common stock;
and
- the per share exercise price for the shares of our common stock issuable
upon exercise of such assumed option would be equal to the quotient
determined by dividing the exercise price per share at which the option
was exercisable immediately before the effective date of the merger by
the exchange ratio, rounded up to the nearest whole cent.
Treatment of Thermedics Employees' Stock Purchase Plan. In connection with
the exchange offer and the merger, we would assume each outstanding option to
purchase shares of Thermedics common stock under Thermedics' Employees' Stock
Purchase Plan. Each stock option under the plan that we assume would continue to
have, and be subject to, the same terms and conditions as set forth in the plan
immediately before the effective date of the merger, except that:
- the assumed stock option would be exercisable, or would become
exercisable in accordance with its terms, for that number of whole shares
of our common stock equal to the product of the number of shares of
Thermedics common stock that were issuable upon exercise of the assumed
stock option immediately before the effective date of the merger
multiplied by the exchange ratio, rounded down to the nearest whole
number of shares of our common stock;
- the purchase price per share of our common stock would be the lower of:
-- 85% of the per share market value of the shares of Thermedics common
stock on the grant date of the assumed stock option divided by the
exchange ratio, with the resulting price rounded up to the nearest
whole cent; and
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-- 85% of the per share market value of our common stock as of the
exercise date of the assumed stock option; and
- the $25,000 limit under Section 9.2(i) of the plan would be applied by
taking into account our assumption of the stock options in accordance
with Section 423(b)(8) of the Internal Revenue Code of 1986 and
regulations under that section.
Treatment of Thermedics Deferred Compensation Plan for Directors. In
connection with the exchange offer and the merger, we would assume Thermedics'
deferred compensation plan for directors and the units for Thermedics common
stock outstanding under the plan would be converted into shares of our common
stock at the exchange ratio. Based on the units accumulated on January 1, 2000:
- Mr. Brooks would receive 615 shares of our common stock;
- Mr. Crisp would receive 4,486 shares of our common stock; and
- Dr. Zervas would receive 4,663 shares of our common stock.
Treatment of Thermedics Debentures. From and after the effective date of
the merger, we would assume Thermedics' non-interest bearing convertible
subordinated debentures due June 1, 2003 and its 2 7/8% convertible subordinated
debentures due June 1, 2003. After we assume these debentures, they would be
convertible into shares of our common stock, instead of Thermedics common stock.
As of May 31, 2000, approximately $31.6 million principal amount of Thermedics'
non-interest bearing debentures was outstanding and approximately $15.9 million
principal amount of Thermedics' 2 7/8% debentures was outstanding. As of that
date, the non-interest bearing debentures were convertible into a total of
965,881 shares of Thermedics common stock at a conversion price of $32.68 per
share and the 2 7/8% debentures were convertible into a total of 1,061,830
shares of Thermedics common stock at a conversion price of $14.928 per share.
After the merger, the non-interest bearing debentures would be convertible into
a total of 434,647 shares of our common stock at a conversion price of $72.62
per share and the 2 7/8% convertible subordinated debentures would be
convertible into a total of 477,824 shares of our common stock at a conversion
price of $33.17 per share. Holders of these debentures would not have the right
to require Thermedics to redeem their debentures as a result of the merger.
Accounting Treatment. The exchange offer and the merger would be accounted
for as the acquisition of a minority interest by us using the purchase method of
accounting.
Tax Consequences. For federal income tax purposes, your receipt of shares
of our common stock pursuant to the exchange offer or the merger would be
tax-free. However, you would be taxed upon your receipt of cash in lieu of
fractional shares of our common stock in the exchange offer or the merger. See
"Federal Income Tax Consequences."
CONDUCT OF THERMEDICS' BUSINESS AFTER THE EXCHANGE OFFER AND THE MERGER
Following our reorganization, we plan to retain Thermedics' Thermo Sentron
and Thermedics Detection businesses as part of our core measurement and
detection instruments business. We expect to spin off some of the remaining
Thermedics businesses as part of our business that serves the healthcare
industry with a range of medical products for diagnosis and monitoring and to
sell the balance of those businesses. Thermedics has signed letters of intent to
sell its remaining Thermo Voltek businesses for a total of approximately $10.6
million and is seeking a buyer for its Thermo Cardiosystems subsidiary, which
manufactures implantable heart assist devices.
CONDUCT OF THERMEDICS' BUSINESS IF THE EXCHANGE OFFER IS NOT COMPLETED
If we do not complete the exchange offer because, on the date the exchange
offer expires, we do not own at least 90% of Thermedics' outstanding shares or
because another condition to the exchange offer is
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not satisfied or waived, we expect that Thermedics' current management will
continue to operate Thermedics' business substantially as presently operated. In
that event, we may consider:
- engaging in open market or privately negotiated purchases of shares of
Thermedics common stock to increase our ownership of shares of Thermedics
common stock to at least 90% of the outstanding shares of Thermedics
common stock; or
- proposing that we and Thermedics enter into a long-form merger agreement,
which would require the approval of Thermedics' board of directors, and
vote all of our shares of Thermedics common stock in favor of such
merger.
If we were to pursue either of these alternatives, it may take considerably
longer for you to receive any consideration for your shares of Thermedics common
stock, other than through sales in the open market, than if you had tendered
your shares in the exchange offer. Any such transaction may result in proceeds
per share to you that are more or less than the value of the shares of our
common stock that we propose to issue in exchange for shares of Thermedics
common stock in the exchange offer and the merger.
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; EXPIRATION OF THE EXCHANGE OFFER
Offer For All Outstanding Shares. We are offering to acquire all the
shares of Thermedics common stock, par value $.10 per share, outstanding on the
expiration date that we do not currently own.
Exchange Ratio. We are offering to exchange 0.45 shares of our common
stock for each outstanding share of common stock of Thermedics that Thermedics
stockholders validly tender and do not properly withdraw.
Fractional Shares. We will not issue fractional shares of our common stock
in the exchange offer or the merger. Instead, we will pay an amount in cash
equal to $19.50 for each whole share of our common stock in lieu of any
fractional share that we would otherwise issue to you.
Withdrawal Rights. You may withdraw shares that you have tendered at any
time on or before June 23, 2000. If we extend the exchange offer, all shares of
Thermedics common stock that you have previously tendered and not properly
withdrawn would remain subject to the exchange offer, although you would have
the right to withdraw your shares of Thermedics common stock. Unless we accept
your shares for exchange on or before June 29, 2000, you may also withdraw
shares that you have tendered and which we have not accepted for exchange at any
time after that date. See "-- Withdrawal Rights."
Expiration Date. This exchange offer will expire at 12:00 midnight, New
York City time, on Friday, June 23, 2000, unless we, in our sole discretion,
extend the period during which the exchange offer is open.
Extension of Expiration Date. If allowed by the rules of the SEC, we may
extend the period during which the exchange offer is open. We may exercise this
right in our sole discretion at any time and for any reason, including the
failure to satisfy any of the conditions specified below under "-- Conditions Of
The Exchange Offer." We can extend the period during which the exchange offer is
open by providing oral or written notice to EquiServe, the depositary for the
exchange offer. If we extend the period during which the exchange offer is open,
we will make an announcement no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration of the exchange
offer. Any extension would delay our acceptance for exchange and the actual
exchange of any shares of Thermedics common stock that you tender.
Termination, Amendment and Waiver. If allowed by the rules of the SEC, we
may also, in our sole discretion, at any time before the exchange offer expires:
- terminate the exchange offer and not accept for exchange, or exchange,
any shares of Thermedics common stock if any of the conditions described
in "-- Conditions Of The Exchange Offer" has
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not been satisfied or upon the occurrence and during the continuance of
any of the events specified in "-- Conditions Of The Exchange Offer;" or
- waive any condition or amend the exchange offer in any respect,
in each case by giving oral or written notice of termination, waiver or
amendment to the depositary and by making a public announcement thereof. If we
terminate or withdraw the exchange offer, we will promptly return any shares of
Thermedics common stock that you have tendered. We may not delay acceptance for
exchange, or the exchange, of any shares of Thermedics common stock upon the
occurrence of any of the conditions specified in "-- Conditions Of The Exchange
Offer" without extending the period during which the exchange offer is open.
If the number of shares of Thermedics common stock tendered is insufficient
to satisfy the minimum tender condition or any other condition specified in
"-- Conditions Of The Exchange Offer" is not fulfilled by the expiration of the
exchange offer, we may:
- decline to exchange shares of our common stock for any of the shares of
Thermedics common stock tendered, return to you all shares of Thermedics
common stock that you tendered and terminate the exchange offer;
- extend the exchange offer and retain all tendered shares of Thermedics
common stock until the expiration of the exchange offer, as extended,
subject to the terms and conditions of the exchange offer, including your
rights to withdraw your shares of Thermedics common stock; or
- waive or amend the condition and, subject to complying with the rules of
the SEC, accept for exchange and exchange shares of our common stock for
all shares of Thermedics common stock validly tendered.
We will publicly announce any extension, termination or amendment of the
exchange offer as promptly as practicable. Without limiting the manner in which
we may choose to make any public announcement, except as provided by applicable
law, including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which
require that material changes be promptly disseminated to holders of shares of
Thermedics common stock, we will have no obligation to publish, advertise or
otherwise communicate any public announcement other than by issuing a release to
the Dow Jones News Service.
Material Change to Exchange Offer. If we make a material change in the
terms of the exchange offer or the information concerning the exchange offer, or
waive a material condition of the exchange offer, we will disseminate additional
exchange offer materials, including by public announcement as described above,
and extend the exchange offer to the extent required by Rules 14d-4(d), 14d-6(d)
and 14e-1 under the Exchange Act. The minimum period during which we will keep
the exchange offer open following material changes in the terms of the exchange
offer or information concerning the exchange offer, other than a change in
price, a change in percentage of securities sought or a change in any dealer's
soliciting fee, will depend upon the facts and circumstances, including the
relative materiality of the changes.
With respect to a change in price or, subject to limitations, a change in
the percentage of securities sought or a change in any dealer's soliciting fee,
we will keep the exchange offer open for a minimum ten business day period from
the date of the change to allow for adequate dissemination to stockholders.
Accordingly, if, before the exchange offer expires, we:
- decrease the number of shares of Thermedics common stock sought in the
exchange offer,
- increase the consideration offered in the exchange offer, or
- add a dealer's soliciting fee,
and if the exchange offer is scheduled to expire at any time earlier than the
period ending on the tenth business day from the date that we first publish,
send or give to stockholders notice of such increase, decrease or addition, we
will extend the exchange offer at least until the ten business day period
expires. For purposes of the exchange offer, a "business day" means any day
other than a Saturday, Sunday or
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federal holiday and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
Mailing of the Prospectus. Thermedics has provided us with its stockholder
list and security position listings for the purpose of disseminating materials
relating to the exchange offer to holders of shares of Thermedics common stock.
We mailed a preliminary form of this prospectus and a related letter of
transmittal and other relevant materials to record holders of shares of
Thermedics common stock on May 1, 2000. We also furnished those materials to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appeared on Thermedics' stockholder list
or who were listed as participants in a clearing agency's security position
listing for subsequent transmittal to beneficial owners of shares of Thermedics
common stock.
Subsequent Offering Period. Although we do not currently intend to, we may
elect to provide a subsequent offering period. Any subsequent offering period
would last between three and 20 business days after our acceptance of Thermedics
shares in the exchange offer. We will comply with the requirements under
Exchange Act Rule 14d-11 if we elect to provide a subsequent offering period.
You will not have the right to withdraw any Thermedics shares that you tender
during any subsequent offering period.
ACCEPTANCE FOR EXCHANGE AND EXCHANGE OF SHARES
Timing of Exchange of Shares. Upon the terms and subject to the conditions
of this exchange offer, including, if we extend or amend the exchange offer, the
terms and conditions of any such extension or amendment, we will accept for
exchange, and will exchange for shares of our common stock, all shares of
Thermedics common stock validly tendered before the exchange offer expires and
not properly withdrawn, including shares of Thermedics common stock validly
tendered and not withdrawn during any extension of the exchange offer, if we
extend the exchange offer, subject to the terms and conditions of the extension,
promptly after the expiration of the exchange offer. In addition, subject to
complying with Rule 14e-1 under the Exchange Act, we may, in our sole
discretion, delay the acceptance for exchange or exchange of shares of
Thermedics common stock to comply, in whole or in part, with any law.
In all cases, we will exchange shares of our common stock for shares of
Thermedics common stock tendered and accepted for exchange pursuant to the
exchange offer only after timely receipt by the depositary of:
- certificates evidencing shares of Thermedics common stock or timely
confirmation, known as a book-entry confirmation, of a book-entry
transfer of shares of Thermedics common stock into the depositary's
account at The Depository Trust Company pursuant to the procedures set
forth below under "-- Procedures For Accepting The Exchange Offer And
Tendering Shares;"
- a properly completed and duly executed letter of transmittal, or a
facsimile of that document, with any required signature guarantees, or an
agent's message in connection with a book-entry transfer; and
- any other documents required by the letter of transmittal.
Accordingly, we may issue shares of our common stock to tendering stockholders
at different times if delivery of their shares of Thermedics common stock and
other required documents occurs at different times.
Agent's Message. The term "agent's message" means a message transmitted by
The Depository Trust Company to, and received by, the depositary and forming a
part of a book-entry confirmation, which states that The Depository Trust
Company has received an express acknowledgment from the participant in The
Depository Trust Company tendering the shares of Thermedics common stock which
are the subject of the book-entry confirmation, that the participant has
received and agrees to be bound by the terms of the letter of transmittal and
that we may enforce the agreement against such participant.
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Acceptance of Shares. For purposes of the exchange offer, we will have
accepted for exchange, and thereby exchanged, shares of our common stock for
shares of Thermedics common stock validly tendered and not properly withdrawn
if, as and when we give oral or written notice to the depositary of our
acceptance for exchange of such shares of Thermedics common stock pursuant to
the exchange offer. Upon the terms and subject to the conditions of the exchange
offer, we will issue shares of our common stock in exchange for shares of
Thermedics common stock that we accept for exchange by depositing the total
number of shares of our common stock issuable in exchange for shares of
Thermedics common stock with the depositary.
The depositary will act as agent for tendering stockholders for the purpose
of receiving shares of our common stock and transmitting these shares to
stockholders whose shares of Thermedics common stock we have accepted for
exchange. UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE MARKET VALUE OF
SHARES OF OUR COMMON STOCK OR ON THE AMOUNT OF ANY CASH PAYABLE TO A TENDERING
STOCKHOLDER IN LIEU OF FRACTIONAL SHARES OF OUR COMMON STOCK, REGARDLESS OF ANY
EXTENSION OF THE EXCHANGE OFFER OR DELAY IN MAKING SUCH EXCHANGE. When we
deposit shares of our common stock with the depositary for the purpose of
issuing these shares to validly tendering stockholders, our obligation to make
such exchange will be satisfied and from then on tendering stockholders must
look solely to the depositary for the shares of our common stock owed to them by
reason of the acceptance for exchange of shares of Thermedics common stock
pursuant to the exchange offer.
Shares Not Accepted For Exchange. If for any reason we do not accept any
shares of Thermedics common stock that you tender pursuant to the terms and
conditions of the exchange offer, or if you submit share certificates
representing more shares of Thermedics common stock than you are tendering, we
will return share certificates representing shares of Thermedics common stock
that we do not accept for exchange or that you do not tender, without expense,
to you. In the case of shares of Thermedics common stock that you tender by
book-entry transfer, we will credit your account at The Depository Trust Company
for any shares that we do not accept for exchange as promptly as practicable
following expiration or termination of the exchange offer.
Other Terms. If we increase the exchange ratio or otherwise increase the
consideration in the exchange offer before the exchange offer expires, we will
apply the higher rate or increased consideration to all shares of Thermedics
common stock that you tender in the exchange offer, whether or not you tendered
or we exchanged such shares of Thermedics common stock before we increased the
exchange ratio or other consideration.
We may transfer or assign to one or more of our affiliates our right to
exchange shares of our common stock for shares of Thermedics common stock
tendered pursuant to the exchange offer. We may exercise this right in whole or
in part from time to time. If we exercise this right, we will still be required
to comply with our obligations under the exchange offer. Your right to receive
shares of our common stock in exchange for your shares of Thermedics common
stock that you validly tender and that we accept for exchange pursuant to the
exchange offer will not be prejudiced by any such transfer or assignment by us.
PROCEDURES FOR ACCEPTING THE EXCHANGE OFFER AND TENDERING SHARES
General. Except as set forth below, for you to validly tender your shares
of Thermedics common stock pursuant to the exchange offer, the depositary must
receive either:
- your letter of transmittal, or a facsimile of your letter of transmittal,
properly completed and duly executed, together with any required
signature guarantees, or
- an agent's message in connection with a book-entry delivery of shares of
Thermedics common stock,
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together with any other documents required by the letter of transmittal. The
depositary must receive these documents at one of its addresses set forth on the
back cover of this prospectus before the exchange offer expires. In addition,
either
- the depositary must receive share certificates evidencing your tendered
shares of Thermedics common stock at one of the addresses set forth on
the back cover of this prospectus or you must tender your shares of
Thermedics common stock pursuant to the procedures for book-entry
transfer set forth below, and the depositary must receive a book-entry
confirmation, in each case before the exchange offer expires; or
- you must comply with the guaranteed delivery procedures set forth below.
We will not accept alternative, conditional or contingent tenders. We will
not accept for exchange fractional shares of Thermedics common stock. By
execution of the letter of transmittal included with this prospectus, or a
facsimile of the letter of transmittal, you will waive any right to receive any
notice of the acceptance for exchange of your shares of Thermedics common stock.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE DEPOSITORY TRUST
COMPANY, IS AT YOUR SOLE OPTION AND RISK. EXCEPT AS OTHERWISE PROVIDED UNDER
THIS HEADING "PROCEDURES FOR ACCEPTING THE EXCHANGE OFFER AND TENDERING SHARES,"
WE WILL TREAT YOUR SHARE CERTIFICATES, LETTER OF TRANSMITTAL AND OTHER REQUIRED
DOCUMENTS AS DELIVERED ONLY WHEN THEY ARE ACTUALLY RECEIVED BY THE DEPOSITARY.
IF YOU USE THE MAIL FOR DELIVERY, WE RECOMMEND THAT YOU USE REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. Within two business days after the commencement date
of the exchange offer, the depositary requested that The Depository Trust
Company establish an account with respect to the shares of Thermedics common
stock for purposes of the exchange offer, and the Depository Trust Company did
so. Any financial institution that is a participant in the system of The
Depository Trust Company may make book-entry delivery of your shares of
Thermedics common stock by causing The Depository Trust Company to transfer your
shares into the depositary's account at The Depository Trust Company in
accordance with The Depository Trust Company's procedures for such transfer.
Although you may deliver your shares of Thermedics common stock through
book-entry transfer into the depositary's account at The Depository Trust
Company, the depositary must receive:
- your letter of transmittal, or a facsimile of your letter of transmittal,
properly completed and duly executed, together with any required
signature guarantees, or an agent's message, and
- any other documents required by the letter of transmittal,
at one of its addresses set forth on the back cover of this prospectus before
the exchange offer expires for you to validly tender your shares of Thermedics
common stock pursuant to the exchange offer, or you must comply with the
guaranteed delivery procedures described below.
DELIVERY OF DOCUMENTS TO THE DEPOSITORY TRUST COMPANY IN ACCORDANCE WITH
THE DEPOSITORY TRUST COMPANY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Signature Guarantees. Except as described below, a firm that is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of:
- the Securities Transfer Agents Medallion Program,
- the Stock Exchanges' Medallion Program, or
- the New York Stock Exchange, Inc. Medallion Signature Program
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must guarantee signature on your letter of transmittal. Each firm that is a
member of these medallion programs is referred to in this prospectus as an
"eligible institution." We will not require a signature guarantee on your letter
of transmittal if:
- you are the registered holder of shares of Thermedics common stock and do
not complete either the box entitled "Special Delivery Instructions" or
the box entitled "Special Issuance Instructions" on your letter of
transmittal; or
- you tender shares of Thermedics common stock for the account of an
eligible institution.
For more information regarding these procedures, you should review Instruction 1
of the letter of transmittal.
If your share certificates are registered in the name of a person other
than the person who signs the letter of transmittal, or if you direct us to make
payment or to return your share certificates for exchanged shares of Thermedics
common stock to a person other than the registered holders, then the tendered
share certificates must be endorsed or accompanied by appropriate stock powers
signed exactly as the names of the registered holders appear on the share
certificates, with the signatures on the share certificates or stock powers
guaranteed by an eligible institution as provided above and in the letter of
transmittal. See Instructions 1 and 5 of the letter of transmittal.
Guaranteed Delivery. If you wish to tender shares of Thermedics common
stock pursuant to the exchange offer and your share certificates are not
immediately available or you cannot deliver all of the required documents to the
depositary before the exchange offer expires or you cannot comply with the
procedures for book-entry transfer on a timely basis, you may still tender your
shares of Thermedics common stock, so long as all of the following conditions
are satisfied:
- you make your tender by or through an eligible institution;
- the depositary receives a properly completed and duly executed notice of
guaranteed delivery, substantially in the form provided with this
prospectus, as provided below before the exchange offer expires; and
- the depositary receives within three American Stock Exchange trading days
after the date of execution of the notice of guaranteed delivery the
share certificates, or a book-entry confirmation, for your tendered
shares of Thermedics common stock, in proper form for transfer, in each
case together with a properly completed and duly executed letter of
transmittal, or a facsimile of a properly completed and duly executed
letter of transmittal, with any required signature guarantees or, in the
case of a book-entry transfer, an agent's message and any other documents
required by the letter of transmittal.
You may deliver the notice of guaranteed delivery by hand or transmit it by
telegram, facsimile transmission or mail to the depositary. You must include a
guarantee by an eligible institution in the form set forth in the notice of
guaranteed delivery.
Timing for Exchange. In all cases, we will exchange shares of Thermedics
common stock that you have tendered and we have accepted for exchange pursuant
to the exchange offer only after timely receipt by the depositary of:
- share certificates for Thermedics shares, or book-entry confirmation of
the transfer of the shares of Thermedics common stock into the
depositary's account at The Depository Trust Company;
- a properly completed and duly executed letter of transmittal, or a
facsimile of a properly completed and duly executed letter of
transmittal, together with any required signature guarantees or, in the
case of a book-entry transfer, an agent's message; and
- any other documents required by the letter of transmittal.
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Accordingly, tendering stockholders of Thermedics may receive shares of our
common stock at different times depending upon when share certificates or
book-entry confirmations for their shares of Thermedics common stock are
received by the depositary.
Backup Federal Income Tax Withholding. Under U.S. federal income tax laws,
the depositary may be required to withhold 31% of the amount of any cash
payments made to you in lieu of fractional shares of our common stock. To
prevent backup federal income tax withholding with respect to any reportable
cash payments made to you in the exchange offer, you must provide the depositary
with your correct taxpayer identification number and certify that you are not
subject to backup federal income tax withholding by completing the Substitute
Form W-9 included in the letter of transmittal. See Instruction 9 of the letter
of transmittal.
Appointment as Proxy. By executing the letter of transmittal, you
irrevocably appoint our designees as your attorneys-in-fact and proxies in the
manner set forth in the letter of transmittal, each with full power of
substitution with respect to any shares of Thermedics common stock you tendered,
and with respect to any and all other shares of Thermedics common stock or other
securities issued or issuable in respect of such shares of Thermedics common
stock on or after May 1, 2000. This appointment will not be effective until we
accept your tendered shares of Thermedics common stock for exchange and deposit
shares of our common stock as the exchange consideration with the depositary.
All such proxies will be irrevocable and coupled with an interest in your
tendered shares of Thermedics common stock. When this appointment becomes
effective, all other powers of attorney and proxies that you have given will be
revoked, and you may not give any subsequent powers of attorney or proxies or
execute any subsequent written consents and, if given or executed, we will treat
them as ineffective.
Upon our deposit of shares of our common stock as the exchange
consideration with the depositary, our designees will, with respect to your
shares of Thermedics common stock and other securities for which the appointment
is effective, be empowered to exercise all of your voting and other rights as
they in their sole discretion consider proper. We may exercise these rights at
any time Thermedics stockholders vote. We reserve the right to require that, for
us to treat your shares of Thermedics common stock as validly tendered, we be
able to exercise full voting and other rights of a record and beneficial holder
immediately upon our acceptance for exchange of your shares of Thermedics common
stock.
Determination of Validity. We will determine all questions as to the
validity, form, eligibility, including the time of receipt, and acceptance for
exchange of any tendered shares of Thermedics common stock pursuant to any of
the procedures described above. We will make these determinations in our sole
discretion, and our determinations will be final and binding. We reserve the
absolute right to reject any and all tenders of shares of Thermedics common
stock that we determine are not in proper form or for which the acceptance of,
or exchange for, may, in the opinion of our counsel, be unlawful.
We also reserve the absolute right to waive any of the conditions of the
exchange offer or any defect or irregularities in the tender of any shares of
Thermedics common stock, whether or not we waived similar defects or
irregularities in the case of any other shares of Thermedics common stock. We
will not treat your tender of shares of Thermedics common stock as validly made
until all defects and irregularities have been cured or waived. Neither we nor
any of our affiliates or assigns, the information agent, the depositary or any
other person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. Our interpretations of the terms and conditions of the exchange
offer, including the letter of transmittal and the instructions to the letter of
transmittal, will be final and binding.
OUR ACCEPTANCE FOR EXCHANGE OF YOUR SHARES OF THERMEDICS COMMON STOCK
TENDERED PURSUANT TO THE PROCEDURES DESCRIBED ABOVE WILL BE A BINDING AGREEMENT
BETWEEN US AND YOU UPON THE TERMS AND CONDITIONS OF THIS EXCHANGE OFFER.
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<PAGE> 39
WITHDRAWAL RIGHTS
General. Your tender of shares of Thermedics common stock pursuant to the
exchange offer is irrevocable except as otherwise provided in this section. You
may withdraw shares of Thermedics common stock that you tender in the exchange
offer at any time before the exchange offer expires and, unless we have
previously accepted these shares for exchange as provided in this prospectus, at
any time after June 29, 2000. If we elect to provide a subsequent offering
period under Exchange Act Rule 14d-11, you will not have the right to withdraw
shares of Thermedics common stock that you tender in the subsequent offering
period.
Extensions. If we:
- extend the exchange offer,
- are delayed in, or delay, our acceptance for exchange or the actual
exchange of shares of our common stock for shares of Thermedics common
stock, or
- are unable for any reason to accept for exchange or exchange shares of
Thermedics common stock,
then, without prejudice to our other rights under the exchange offer, the
depositary, on our behalf, may nevertheless retain your tendered shares of
Thermedics common stock and you may not exercise withdrawal rights except to the
extent described in this section. We will extend the exchange offer to the
extent required by law in the event of any extension or delay.
Effectiveness of Withdrawal. For your withdrawal to be effective, the
depositary must receive from you a written, telegraphic or facsimile
transmission notice of withdrawal at one of its addresses set forth on the back
cover of this prospectus. Your notice of withdrawal must include:
- your name;
- the number of shares of Thermedics common stock that you wish to
withdraw; and
- the name of the registered holder of the shares of Thermedics common
stock that you wish to withdraw, if different from that of the person who
tendered the shares of Thermedics common stock.
If you have delivered or otherwise identified your share certificates to the
depositary, then, before the physical release of the share certificates, you
must also submit the serial numbers shown on the share certificates to the
depositary and you must have the signatures on the notice of withdrawal
guaranteed by an eligible institution, unless the shares of Thermedics common
stock have been tendered for the account of an eligible institution. If you
tendered shares of Thermedics common stock pursuant to the procedures for
book-entry transfer, as set forth above under "-- Procedures For Accepting The
Exchange Offer And Tendering Shares," any notice of withdrawal must specify the
name and number of the account at The Depository Trust Company to be credited
with the withdrawn shares of Thermedics common stock and must otherwise comply
with the procedures of The Depository Trust Company.
Revocation of Withdrawal. You may not revoke a withdrawal. We will treat
any shares of Thermedics common stock properly withdrawn as not validly tendered
for purposes of the exchange offer. However, you may re-tender withdrawn shares
of Thermedics common stock at any time before the exchange offer expires by
again following one of the procedures described above under "-- Procedures For
Accepting The Exchange Offer And Tendering Shares."
Validity of Withdrawals. We will determine all questions as to the form
and validity, including the time of receipt, of any notice of withdrawal in our
sole discretion, and our determination will be final and binding. Neither we nor
any of our affiliates or assigns, the information agent, the depositary or any
other person will be under any duty to notify you of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
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<PAGE> 40
CONDITIONS OF THE EXCHANGE OFFER
We have the right to extend or amend the exchange offer in our sole
discretion at any time before the exchange offer expires. In addition, we:
- are not required to accept for exchange or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act, relating to our obligation to return tendered shares of
Thermedics common stock promptly after termination or withdrawal of the
exchange offer, exchange shares of our common stock for any tendered
shares of Thermedics common stock; and
- may delay the acceptance for exchange of or, subject to the restriction
referred to above, the exchange of, any tendered shares of Thermedics
common stock.
Minimum Number of Shares. We may amend or terminate the exchange offer if
we would not own at least 90% of the outstanding shares of Thermedics common
stock immediately following the closing of the exchange offer. As of May 31,
2000, we owned approximately 75.5% of the outstanding shares of Thermedics
common stock. Assuming that optionholders exercised all outstanding Thermedics
stock options and debenture holders did not convert any of Thermedics'
convertible subordinated debentures into Thermedics common stock, we would have
owned approximately 72.6% of the outstanding shares of Thermedics common stock
at that date. As of June 13, 2000, Thermedics stockholders had tendered and not
withdrawn 7,984,738 shares, or 18.9% of the outstanding shares, of Thermedics
common stock pursuant to this exchange offer. These shares may be withdrawn at
any time before the exchange offer expires.
Other Conditions. In addition, we may amend or terminate the exchange
offer at any time on or after May 1, 2000 and before the time of acceptance of
the shares of Thermedics common stock for exchange in the exchange offer if any
of the following events shall occur:
- any change occurs in the business, properties, assets, liabilities,
capitalization, stockholders' equity, financial condition, cash flows,
operations, licenses, franchises or results of operations of Thermedics
or its subsidiaries which has a material adverse effect on Thermedics and
its subsidiaries taken as a whole;
- any "governmental entity," including a government or governmental
authority or agency, whether domestic, foreign or supranational,
institutes or threatens any action, proceeding, application, claim or
counterclaim, seeks or obtains any judgment, order or injunction, or
takes any other action, which:
-- challenges the acquisition by us or any of our affiliates of any
shares of Thermedics common stock pursuant to the exchange offer or
the merger, restrains, prohibits or materially delays the making or
consummation of the exchange offer or the merger, prohibits the
performance of any of the contracts or other arrangements entered into
by us or any of our affiliates in connection with the acquisition of
the shares of Thermedics common stock or Thermedics, seeks to obtain
any material amount of damages, or otherwise directly or indirectly
adversely affects the exchange offer or the merger;
-- seeks to prohibit or limit materially the ownership or operation by
us, any of our affiliates or Thermedics of all or any material portion
of our business or assets or the businesses or assets of our
affiliates or of Thermedics and its subsidiaries, or to compel us, any
of our affiliates or Thermedics to dispose of or to hold separate all
or any material portion of our, any of our affiliates' or Thermedics'
or its subsidiaries' businesses or assets as a result of the
transactions contemplated by the exchange offer or the merger;
-- seeks to impose any material limitation on the ability of us, any of
our affiliates or Thermedics to conduct Thermedics' or its
subsidiaries' businesses or to own Thermedics' or its subsidiaries'
assets;
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<PAGE> 41
-- seeks to impose or confirm any material limitation on the ability of
us or any of our affiliates to acquire or hold, or to exercise full
rights of ownership of, any shares of Thermedics common stock,
including the right to vote such shares of Thermedics common stock on
all matters properly presented to the stockholders of Thermedics;
-- seeks to require us or any of our affiliates to divest all or any of
our shares of Thermedics common stock; or
-- otherwise has resulted in or has a reasonable likelihood of resulting
in a material adverse effect on our, any of our affiliates' or
Thermedics' business, financial condition, results of operation or
prospects;
- any statute, rule or regulation is enacted, promulgated, entered,
enforced or treated as applicable to the exchange offer or the merger, or
any other action is taken by any governmental entity or court, that
results in, directly or indirectly, any of the consequences referred to
in the first four sub-bullets of the preceding bullet;
- any preliminary or permanent judgment, order, decree, ruling or
injunction is entered or issued, or any other action is taken by any
governmental entity or court, whether on its own initiative or the
initiative of any other person, which:
-- restrains, prohibits or materially delays the making or completing of
the exchange offer or the merger, prohibits the performance of any of
the contracts or other arrangements entered into by us or any of our
affiliates in connection with the acquisition of the shares of
Thermedics common stock or Thermedics or otherwise directly or
indirectly materially adversely affects the exchange offer or the
merger;
-- prohibits or limits materially the ownership or operation by us, any
of our affiliates or Thermedics of all or any material portion of our
business or assets or the businesses or assets of our affiliates or of
Thermedics and its subsidiaries, or compels us, any of our affiliates
or Thermedics to dispose of or to hold separate all or any material
portion of our, any of our affiliates' or Thermedics' or its
subsidiaries' businesses or assets as a result of the transactions
contemplated by the exchange offer or the merger;
-- imposes any material limitation on the ability of us or any of our
affiliates to conduct Thermedics' or its subsidiaries' businesses or
to own Thermedics' or its subsidiaries' assets;
-- imposes or confirms any material limitation on the ability of us or
any of our affiliates to acquire or hold, or to exercise full rights
of ownership of, any shares of Thermedics common stock, including the
right to vote such shares of Thermedics common stock on all matters
properly presented to the stockholders of Thermedics;
-- requires us or any of our affiliates to divest of all or any of our
shares of Thermedics common stock; or
-- otherwise has resulted in or has a reasonable likelihood of resulting
in a material adverse effect on our, any of our affiliates' or
Thermedics' business, financial condition, results of operation or
prospects;
- any action, proceeding, application, claim or counterclaim is instituted
or pending before any governmental entity or court, or any judgment,
order or injunction is sought or any other action is taken by any person
or entity, other than a governmental entity, which:
-- challenges the acquisition by us or any of our affiliates of any
shares of Thermedics common stock pursuant to the exchange offer or
the merger, restrains, prohibits or materially delays the making or
consummation of the exchange offer or the merger, prohibits the
performance of any of the contracts or other arrangements entered into
by us or any of our affiliates in connection with the acquisition of
the shares of Thermedics common stock, seeks to obtain any material
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<PAGE> 42
amount of damages, or otherwise directly or indirectly adversely
affects the exchange offer or the merger;
-- seeks to prohibit or limit materially the ownership or operation by
us, any of our affiliates or Thermedics of all or any material portion
of our business or assets or the businesses or assets of our
affiliates or of Thermedics and its subsidiaries, or to compel us, any
of our affiliates or Thermedics to dispose of or to hold separate all
or any material portion of our, any of our affiliates' or Thermedics'
or its subsidiaries' businesses or assets as a result of the
transactions contemplated by the exchange offer or the merger;
-- seeks to impose any material limitation on the ability of us, any of
our affiliates or Thermedics to conduct Thermedics' or its
subsidiaries' businesses or to own Thermedics' and its subsidiaries'
assets;
-- seeks to impose or confirm any material limitation on the ability of
us or any of our affiliates to acquire or hold, or to exercise full
rights of ownership of, any shares of Thermedics common stock,
including the right to vote such shares of Thermedics common stock on
all matters properly presented to the stockholders of Thermedics;
-- seeks to require us or any of our affiliates to divest of all or any
of our shares of Thermedics common stock; or
-- otherwise has resulted in or, in our reasonable discretion, has a
reasonable likelihood of resulting in a material adverse effect on
our, any of our affiliates' or Thermedics' business, financial
condition, results of operation or prospects;
and which in the case of the first five sub-bullets of this bullet is
successful or we determine, in our reasonable discretion, has a reasonable
likelihood of being successful;
- the registration statement of which this prospectus is a part does not
become effective under the Securities Act of 1933 or is the subject of
any stop order or proceedings seeking a stop order;
- the shares of our common stock issuable to Thermedics stockholders in the
exchange offer and the merger and the shares issuable upon the exercise
of options to purchase shares of our common stock or the conversion of
debentures convertible into our common stock are not approved for listing
on the New York Stock Exchange, subject to official notice of issuance;
- any general suspension of trading in, or limitation on prices for,
securities occurs on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market, other than any temporary
suspension pursuant to a circuit breaker procedure then in effect and
lasting for not more than three trading hours;
- any declaration of a banking moratorium by federal or New York
authorities or general suspension of payments in respect of lenders that
regularly participate in the U.S. market in loans occurs;
- any material limitation by any federal, state or local government or any
court, administrative or regulatory agency or commission or other
governmental authority or agency in the United States occurs that
materially affects the extension of credit generally by lenders that
regularly participate in the U.S. market in loans;
- any commencement of a war involving the United States or any commencement
of armed hostilities or other national or international circumstance
involving the United States occurs that has a material adverse effect on
bank syndication or financial markets in the United States; or
- in the case of any occurrence described in the previous four bullets that
existed on or at the time of the commencement of the exchange offer, a
material acceleration or worsening of that occurrence; which in our
reasonable judgment, in any case and regardless of the circumstances
giving rise to the condition, makes it inadvisable to proceed with the
exchange offer or with acceptance of shares of
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<PAGE> 43
Thermedics common stock for exchange or exchanges of shares of our common
stock for shares of Thermedics common stock.
Conditions Solely for Our Benefit. The foregoing conditions are for our
sole benefit and we may assert them regardless of any circumstances giving rise
to any condition. We may waive these conditions in whole or in part, at any time
and from time to time before the exchange offer expires, in our reasonable
discretion. Our failure, or the failure of any of our affiliates, at any time to
exercise any of the foregoing rights will not constitute a waiver of any right.
We will treat each right as an ongoing right which may be asserted at any time
and from time to time before the exchange offer expires.
LEGAL MATTERS; REGULATORY APPROVALS
General. Except as described below, we are not aware of any license or
regulatory permit that appears to be material to the business of Thermedics and
its subsidiaries and may be adversely affected by our acquisition of shares of
Thermedics common stock in the exchange offer or the merger.
Except as described in this section, we are not aware of any other material
filing, approval or other action by any federal or state governmental or
administrative authority that we must obtain in connection with our acquisition
of shares of Thermedics common stock as contemplated in this prospectus. Should
any other similar approval or action be required, we currently contemplate
seeking that approval or action. We cannot assure you that we could obtain any
other approval or action, if needed, without substantial conditions or costs or
that adverse consequences would not result to our or Thermedics' business if we
do not obtain any other required approvals or actions. Our obligation under the
exchange offer to accept for exchange and exchange shares of Thermedics common
stock is subject to a number of conditions, including conditions relating to the
legal matters discussed in this section. See "-- Conditions Of The Exchange
Offer."
Antitrust. We believe that the exchange offer and the merger are exempt
from the reporting requirements contained in the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. Nevertheless, we cannot assure that a challenge to the
exchange offer and the merger on antitrust grounds will not be made or, if such
challenge is made, what the result will be.
Foreign Approvals. Thermedics conducts business in a number of foreign
countries and jurisdictions. In connection with our acquisition of shares of
Thermedics common stock pursuant to the exchange offer or the merger, we and/or
Thermedics may be required to file information with, or obtain the approval or
consent of, governmental authorities in those foreign countries and
jurisdictions. The governments in those countries and jurisdictions might
attempt to impose additional conditions on Thermedics' operations conducted in
such countries and jurisdictions as a result of our acquisition of the shares of
Thermedics common stock pursuant to the exchange offer or the merger of
Thermedics into Thermo Electron.
If foreign approvals or consents are required, we intend to make the
appropriate filings and applications. We do not know if or when we will obtain
any required foreign approvals or consents for which we file or apply. In
addition, we may be unable to cause Thermedics or its subsidiaries to satisfy or
comply with foreign laws. Noncompliance may have adverse consequences for
Thermedics or its subsidiaries after the exchange of shares of our common stock
for shares of Thermedics common stock pursuant to the exchange offer or the
merger.
State Anti-Takeover Statutes. Chapters 110C, 110D and 110F of the General
Laws of the Commonwealth of Massachusetts prohibit, restrict or impose
procedural and disclosure requirements with respect to the acquisition of more
than 5% of the outstanding shares of a Massachusetts corporation, such as
Thermedics, and with respect to take-over bids and business combinations
involving a Massachusetts corporation. Thermedics, through a provision in its
bylaws, has elected to "opt out" of the prohibitions and restrictions of Chapter
110D. We believe that neither the exchange offer nor the merger is adversely
affected by these statutes.
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A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme
Court of the United States invalidated on constitutional grounds the Illinois
Business Takeover Statute, which, as a matter of state securities law, made
takeovers of corporations meeting the statute's requirements more difficult.
However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
held that the State of Indiana may, as a matter of corporate law, and, in
particular, with respect to those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without the prior approval of the remaining
stockholders. The state law before the Supreme Court was by its terms applicable
only to corporations that had a substantial number of stockholders in that state
and were incorporated there.
Thermedics, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
anti-takeover laws. We do not know whether any of these laws will, by their
terms, apply to the exchange offer or the merger, and we have not necessarily
complied with any such laws. Should any person seek to apply any state
anti-takeover law to the exchange offer or the merger, we will take such action
as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state anti-takeover laws is applicable to the
exchange offer or the merger, and an appropriate court does not determine that
it is inapplicable or invalid as applied to the exchange offer or the merger, we
may be required to file information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, we may be unable to accept
for exchange any shares of Thermedics common stock tendered pursuant to the
exchange offer, or be delayed in continuing or consummating the exchange offer.
In any such case, we may not be obligated to accept for exchange any shares of
Thermedics common stock tendered. See "-- Conditions Of The Exchange Offer."
DIVIDENDS AND DISTRIBUTIONS
If, on or after May 1, 2000, Thermedics should declare or pay any dividend
or other distribution, including without limitation the issuance of additional
shares of Thermedics common stock pursuant to any stock dividend or stock split
or the issuance of rights for the purchase of any securities, with respect to
the shares of Thermedics common stock, and the dividend or distribution is
payable or distributable to stockholders of record on a date occurring before
the transfer to our name or the name of our nominees or transferees on
Thermedics' stock transfer records of the shares of Thermedics common stock
acquired pursuant to the exchange offer, then, without prejudice to our rights
described in "-- Conditions Of The Exchange Offer":
- in the event of a cash dividend or distribution, the exchange ratio per
share will be reduced by multiplying the exchange ratio by a fraction the
numerator of which is $8.9375, the closing market price of the Thermedics
common stock on March 7, 2000, minus the amount of the cash dividend or
distribution and the denominator is $8.9375; and
- in the event of a non-cash dividend or distribution, you will be required
to deliver promptly and transfer to the depositary for our account any
non-cash dividend or distribution, including additional shares of
Thermedics common stock, together with appropriate documentation of
transfer. Pending your remittance or appropriate assurance of your
remittance, we will be entitled to all rights and privileges as owner of
any such non-cash dividend, distribution or right, and may withhold all
of the shares of our common stock issuable to you in the exchange offer
or reduce the exchange ratio by multiplying the exchange ratio by a
fraction, the numerator of which is $8.9375, the closing price of the
Thermedics common stock on March 7, 2000, minus the value of such
non-cash dividend, distribution or right, as determined by us in our sole
discretion, and the denominator of which is $8.9375.
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If, on or after May 1, 2000, Thermedics should split the shares of its
common stock or combine or otherwise change the shares of its common stock or
its capitalization, then, without prejudice to our rights described in
"-- Conditions Of The Exchange Offer," we may make appropriate adjustments to
reflect such split, combination or change in the exchange ratio and other terms
of the exchange offer, including without limitation the number or type of
securities we are offering in exchange for Thermedics common stock.
FEES AND EXPENSES
J.P. Morgan Securities Inc. and The Beacon Group Capital Services, LLC are
acting as our financial advisors in connection with the exchange offer and the
merger involving Thermedics described in this prospectus.
In October 1999, we engaged The Beacon Group as our financial advisor in
connection with our proposed acquisition of the outstanding shares held by
public stockholders in our subsidiaries that had public stockholders. We paid
The Beacon Group $500,000 in fees for services that The Beacon Group rendered
pursuant to that engagement in connection with our acquisition of the
outstanding publicly-held shares of common stock of ThermoTrex Corporation and
ThermoLase Corporation.
Pursuant to our letter agreement with J.P. Morgan and The Beacon Group,
dated January 17, 2000, we agreed to pay each of J.P. Morgan and The Beacon
Group a fee of $500,000 for its services in connection with the exchange offer
and the merger involving Thermedics described in this prospectus. In addition,
we will reimburse J.P. Morgan and The Beacon Group for expenses incurred in
connection with these transactions. The letter agreement also relates to our
overall reorganization and provides for separate fees for services with respect
to other elements of our reorganization. These other fees include a minimum
retainer for each of J.P. Morgan and The Beacon Group of $1.25 million. The
engagement letter provides for substantial additional compensation if we
complete some or all of the other elements of our reorganization. We have agreed
to indemnify J.P. Morgan and The Beacon Group and their affiliates against
liabilities relating to their engagement by us, including liabilities under the
federal securities laws.
We have retained D.F. King & Co. to act as the information agent and
EquiServe to act as the depositary in connection with the exchange offer. The
information agent may contact holders of shares of Thermedics common stock by
mail, telephone, telex, telecopy, telegraph and personal interview and may
request brokers, dealers, commercial banks, trust companies and other nominees
to forward the exchange offer material to beneficial owners. Each of the
information agent and the depositary will receive reasonable and customary
compensation for its services, will be reimbursed for reasonable out-of-pocket
expenses and will be indemnified against liabilities and expenses in connection
with the exchange offer, including liabilities under U.S. federal securities
laws.
We will not pay any fees or commissions to any broker or dealer or any
other person for soliciting tenders of shares of Thermedics common stock in the
exchange offer, other than to the information agent. We will, upon request,
reimburse brokers, dealers, commercial banks and trust companies for customary
mailing and handling expenses incurred by them in forwarding materials to their
customers.
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The following is an estimate of the fees and expenses that we expect to
incur in connection with the exchange offer and the merger:
<TABLE>
<CAPTION>
<S> <C>
Financial Advisors.......................................... $1,000,000
Legal....................................................... 250,000
Printing.................................................... 100,000
Listing Fee................................................. 25,650
Filing...................................................... 25,629
Depositary.................................................. 10,000
Information Agent, including mailing........................ 15,000
Miscellaneous............................................... 23,721
----------
$1,450,000
==========
</TABLE>
We will pay these fees and expenses, including any cash paid for fractional
shares, out of cash that we currently hold. Thermedics will not pay any of the
fees and expenses to be incurred by us in connection with the exchange offer.
STOCK EXCHANGE LISTING
Our common stock is listed on the New York Stock Exchange. We will make an
application as necessary to list on the New York Stock Exchange the common stock
that we will issue pursuant to the exchange offer and the merger. We will not
accept for exchange, or exchange for shares of our common stock, any shares of
common stock of Thermedics or complete the merger unless the following shares of
our common stock are approved for listing on the New York Stock Exchange,
subject to official notice of issuance:
- the shares issuable to Thermedics stockholders in the exchange offer and
the merger;
- the shares issuable upon the exercise of options to purchase shares of
Thermedics common stock that we assume in connection with the exchange
offer and the merger; and
- the shares issuable upon the conversion of the Thermedics convertible
debentures that we assume in connection with the exchange offer and the
merger.
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MARKET PRICES AND DIVIDENDS
PRICE RANGE OF SHARES OF OUR COMMON STOCK AND OF THERMEDICS COMMON STOCK
Our common stock is listed on the New York Stock Exchange under the symbol
"TMO." Thermedics' common stock is listed on the American Stock Exchange under
the symbol "TMD." The following table sets forth the high and low sales prices
per share of our common stock and of Thermedics common stock, as reported in
publicly available sources for each of the periods indicated.
<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
---------------- --------------
HIGH LOW HIGH LOW
----- ----- ---- ----
<S> <C> <C> <C> <C>
Fiscal Year Ended January 2, 1999:
First Quarter....................................... 43 5/16 36 5/8 17 7/8 14 5/8
Second Quarter...................................... 41 15/16 30 3/4 17 15/16 12 5/16
Third Quarter....................................... 35 3/16 14 3/16 13 9/16 7 1/4
Fourth Quarter...................................... 20 1/16 13 9/16 11 1/4 6 5/8
Fiscal Year Ended January 1, 2000:
First Quarter....................................... 18 3/16 13 3/8 11 3/8 6 1/2
Second Quarter...................................... 20 1/4 12 1/2 9 5/16 6 1/8
Third Quarter....................................... 19 11/16 13 1/8 9 5/8 5 5/8
Fourth Quarter...................................... 16 1/8 12 3/4 7 4 3/4
Fiscal Year Ending December 30, 2000:
First Quarter....................................... 26 7/8 14 11 1/4 5 3/16
Second Quarter, through June 13, 2000............... 21 7/16 17 3/4 8 3/4 7 3/8
</TABLE>
As of June 13, 2000, there were 8,076 holders of record and in excess of
36,400 beneficial owners of the shares of our common stock. As of June 13, 2000,
there were 1,986 holders of record and in excess of 6,000 beneficial owners of
shares of Thermedics common stock.
On January 28, 2000, the last full trading day prior to the public
announcement of our intention to commence the exchange offer, the closing sale
price per share of Thermedics common stock, as reported on the American Stock
Exchange, was $6.125. On March 7, 2000, the day prior to our announcement of the
exchange ratio, the closing sale price per share of Thermedics common stock, as
reported on the American Stock Exchange, was $9.0625.
YOU SHOULD OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES OF OUR COMMON
STOCK AND THERMEDICS COMMON STOCK.
DIVIDENDS
Neither we nor Thermedics has ever declared or paid any cash dividends in
respect of our or their common stock.
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<PAGE> 48
THE MERGER; APPRAISAL RIGHTS
THE MERGER
If we complete the exchange offer, we will cause Thermedics to merge with
and into Thermo Electron in accordance with the Massachusetts Business
Corporation Law, Chapter 156B of the Massachusetts General Laws, and the
Delaware General Corporation Law. Upon the effective date of this merger, each
share of Thermedics common stock issued and outstanding immediately prior to the
effective date of the merger, other than shares owned by us and shares held by
Thermedics' public stockholders, if any, who are entitled to and who properly
exercise their dissenters' rights under the Massachusetts Business Corporation
Law, as described below under "-- Appraisal Rights," will be cancelled and
converted into a right to receive 0.45 shares of our common stock for each share
of Thermedics common stock. Thermedics stockholders will also be entitled to
receive cash in lieu of the issuance of fractional shares of our common stock in
an amount equal to $19.50 for each whole share of our common stock. As a result
of the merger, Thermedics will cease to exist as a separate legal entity, and we
will own all of Thermedics' assets.
Under the Massachusetts Business Corporation Law and the Delaware General
Corporation Law, if we hold at least 90% of the outstanding shares of Thermedics
common stock, we may effect the merger without a vote of Thermedics' board of
directors or Thermedics' other stockholders. We intend to take all necessary and
appropriate action to cause the merger to become effective as promptly as
practicable after we complete the exchange offer, and without a meeting of the
Thermedics' stockholders.
APPRAISAL RIGHTS
Under the Massachusetts Business Corporation Law, stockholders of
Thermedics who tender their shares of Thermedics common stock in the exchange
offer may not exercise appraisal rights. If we complete the merger, then
stockholders of Thermedics who do not tender their shares of Thermedics common
stock to us pursuant to the exchange offer would have the right to demand an
appraisal of the fair value of their shares of Thermedics common stock in
accordance with the provisions of Section 82(e) and Sections 86 through 98 of
the Massachusetts Business Corporation Law. These sections set forth the rights
and obligations of stockholders of Thermedics demanding an appraisal and the
procedures to be followed.
The Appraisal Statute. Under Massachusetts law, if you follow the
procedures of Section 82(e) and Sections 86 through 98, you will be entitled to
have a court appraise the fair value of your shares and to have us pay the fair
value of your shares together with interest. The following is a summary of
Section 82(e) and Sections 86 through 98 of the Massachusetts Business
Corporation Law. We qualify this summary in its entirety by reference to the
full text of Section 82(e) and Sections 86 through 98. Annex B sets forth the
full text of these sections of the Massachusetts Business Corporation Law. If
you fail to follow these procedures, you will lose your appraisal rights.
Consequently, you should carefully review Annex B and consult your legal advisor
if you would like to exercise your appraisal rights.
You should execute any demand for appraisal in your name, as it appears on
your stock certificates. If you own shares in a fiduciary capacity, such as in a
capacity as a trustee, guardian or custodian, you should execute the demand in
that capacity. If more than one person owns the shares, as in a joint tenancy or
tenancy in common, all of the joint owners should execute the demand. An
authorized agent, including one or more joint owners, may execute the demand for
appraisal for a holder of record; however, the agent must identify the record
owner or owners and expressly disclose the fact that, in executing the demand,
the agent is acting for such owner or owners.
A record holder such as a broker who holds shares of Thermedics common
stock as a nominee for beneficial owners, some of whom desire to demand
appraisal, is required to exercise appraisal rights on behalf of those
beneficial owners. In this case, the written demand for appraisal should set
forth the number of shares covered by it. Unless a demand for appraisal
specifies a number of shares, we will treat the demand as applying to all of the
shares held in the name of the record holder. If you beneficially own
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<PAGE> 49
shares through a nominee, you may also notify us of such beneficial ownership
and your intention to exercise appraisal rights before we mail the notice
discussed below.
Required Notice and Demand. Within ten days following the consummation of
the merger, we would notify the Thermedics stockholders of record of:
- the effective date of the merger;
- the terms and conditions of the merger; and
- the availability of appraisal rights under Section 82(e) and Sections 86
through 98.
If you are entitled to appraisal rights, you would have the right, within 20
days after the date of mailing of the required notice, to demand in writing from
us an appraisal of your shares of Thermedics common stock. Any demand that
reasonably informs us of your identity and your intent to demand an appraisal of
the fair value of your shares would be sufficient. Failure to make such a timely
demand would foreclose your right to appraisal.
You can withdraw your demand for appraisal only with our approval. If you
withdraw your demand for appraisal, you would be entitled to receive 0.45 shares
of our common stock for each share of Thermedics common stock plus cash in lieu
of the issuance of fractional shares of our common stock in an amount equal to
$19.50 per whole share, without interest.
If, following the merger, you perfect a demand for payment of your shares
of Thermedics common stock as provided above, and if we reach agreement with you
on the fair value of the shares, we will pay you the fair value of the shares
within 30 days after the expiration of the 20-day period during which the demand
for appraisal may be made.
The Court's Determination. If within that 30-day period we cannot reach
agreement with you on the fair value of your shares of Thermedics common stock,
either of us may elect to have the fair value of the shares of all dissenting
stockholders determined through judicial proceedings in the Massachusetts
Superior Court for Middlesex County within four months after the 30-day period
has expired. We are not under any obligation, and have no present intention, to
elect to have the fair value of the shares of all dissenting stockholders
determined through judicial proceedings.
Although Massachusetts courts have broad discretion in determining the fair
value of stock of dissenting stockholders, Massachusetts courts have generally
used a weighted average of the market, earnings and asset values for the stock.
The Massachusetts Supreme Judicial Court has recently held that this method is
an appropriate, but not mandated, approach to determining the fair value of
stock of dissenting stockholders. The trial judge may determine the appropriate
valuation method to apply. The Massachusetts Business Corporation Law requires
us to pay a fair rate of interest on any award determined by the Court from the
date our board of directors votes to approve the merger.
If:
- you do not file a suit to determine the value of your shares of
Thermedics common stock within four months of the expiration of the
30-day period during which we and any dissenting stockholders would try
to reach agreement on the value of the dissenters' shares,
- any suit you file to determine the value of your shares of Thermedics
common stock is dismissed, or
- you withdraw your demand in writing with our written approval,
then you would only have the right to receive the consideration of 0.45 shares
of our common stock for each share of Thermedics common stock we offered in the
merger.
Under Massachusetts statutory law, your right to receive payment for your
shares in the manner provided by Section 82(e) and Sections 86 through 98 of the
Massachusetts Business Corporation Law is your exclusive remedy if you object to
the merger, except if you object to the merger on the grounds that completing
the merger will be or is illegal or fraudulent. In addition, the Massachusetts
Supreme Judicial Court has held that dissenting stockholders are not limited to
the statutory remedy of judicial appraisal in cases involving breaches of
fiduciary duty.
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<PAGE> 50
If you are considering seeking appraisal, you should bear in mind that the
fair value of your shares determined under Section 82(e) and Sections 86 through
98 of the Massachusetts Business Corporation Law could be more, the same or less
than the consideration you would have received in the merger.
Consequences of a Demand for Appraisal. After the effective date of the
merger, you would not be entitled to vote your shares for any purpose and would
not be entitled to receive payment of dividends or other distributions in
respect of your shares of Thermedics common stock.
For federal income tax purposes, stockholders who receive cash for their
shares of Thermedics common stock upon exercise of dissenters' rights will
realize taxable gain or loss. See "Federal Income Tax Consequences."
THE FOREGOING SUMMARY IS NOT A COMPLETE STATEMENT OF THE PROCEDURES THAT
YOU MUST FOLLOW TO EXERCISE YOUR DISSENTING APPRAISAL RIGHTS. THE FULL TEXT OF
THE MASSACHUSETTS APPRAISAL STATUTE IS ATTACHED TO THIS PROSPECTUS AS ANNEX B.
YOU SHOULD READ ANNEX B IN ITS ENTIRETY BECAUSE FAILING TO COMPLY WITH THE
PROCEDURES SET FORTH IN THE MASSACHUSETTS APPRAISAL STATUTE WILL RESULT IN THE
LOSS OF YOUR APPRAISAL RIGHTS.
FEDERAL INCOME TAX CONSEQUENCES
This section summarizes the important federal income tax consequences of
the exchange offer and the merger to you. This summary is based on the current
Internal Revenue Code, Treasury regulations and administrative rulings and court
decisions, all of which can change. If there are any changes to the Internal
Revenue Code, those regulations or those rulings and decisions, the tax
consequences to you might change. Any changes could be retroactive.
You should know that this summary does not deal with all federal income tax
considerations that may be relevant to you because of your particular
circumstances. Some examples of circumstances that would involve different
federal income tax consequences are if you:
- were a dealer in securities;
- were an insurance company or financial institution;
- were a foreign person or entity;
- do not hold your Thermedics common stock as a capital asset; or
- acquired your shares in connection with stock option or stock purchase
plans or in other compensatory transactions.
In addition, the following discussion does not address the tax consequences
of the exchange offer and the merger under foreign, state or local tax laws. WE
RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX
CONSEQUENCES TO YOU OF THE EXCHANGE OFFER AND THE MERGER, INCLUDING THE
APPLICATION OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
In connection with the exchange offer and merger, Hale and Dorr LLP, our
legal counsel, has rendered a tax opinion to Thermedics that the exchange offer
and the merger of Thermedics into us should be treated as one integrated
transaction that will qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code. We and Thermedics gave Hale and
Dorr information about the exchange offer and the merger. Hale and Dorr based
their tax opinion on that information. In addition, Hale and Dorr assumed some
facts in giving their tax opinion, and their opinion contains various
qualifications and limitations. We have filed Hale and Dorr's tax opinion as an
exhibit to the registration statement of which this prospectus is a part.
Subject to the assumptions, limitations and qualifications in the tax opinion,
Hale and Dorr is of the opinion that the exchange offer and the merger should
result in the following federal income tax consequences:
- You will not recognize any gain or loss solely upon the exchange of your
shares of Thermedics common stock for our common stock pursuant to the
exchange offer or the merger, except for any cash you receive in lieu of
fractional shares of our common stock.
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<PAGE> 51
- Your aggregate tax basis in our common stock that you receive pursuant to
the exchange offer or the merger will be the same as your aggregate tax
basis in the Thermedics common stock that you tendered, reduced by the
amount of any tax basis attributable to any fractional shares that you do
not actually receive.
- Your holding period for our common stock that you receive pursuant to the
exchange offer or the merger will include the period for which you held
the Thermedics common stock that you exchange for our common stock, if
you held the Thermedics common stock as a capital asset at the time of
the exchange.
- Cash payments that you receive in lieu of a fractional share will be
treated as if that fractional share of our common stock had been issued
pursuant to the exchange offer or the merger and then redeemed by us. You
generally will recognize gain or loss upon any cash you so receive
measured by the difference, if any, between the amount of cash you
receive and your basis in that fractional share.
- Neither we nor Thermedics will recognize gain or loss directly as a
result of the exchange offer or the merger.
We will not, and Thermedics will not, request a ruling from the Internal
Revenue Service in connection with the exchange offer or the merger. You should
be aware that Hale and Dorr's tax opinion will not bind the Internal Revenue
Service. Hale and Dorr relied upon many factual representations by us in
rendering its tax opinion and, in particular, upon our representation that if
the exchange offer is successful, we will cause the merger of Thermedics with
and into us to occur.
Hale and Dorr's tax opinion does not address or consider the tax effect on
you of our proposed spin-offs of our business that serves the healthcare
industry with a range of medical products for diagnosis and monitoring and our
paper recycling and papermaking equipment business. In that regard, we have
requested a ruling from the Internal Revenue Service regarding the tax
consequences of the spin-offs. We expect to proceed with the spin-offs only if
we receive a ruling that the spin-offs will qualify under Section 355 of the
Internal Revenue Code. Accordingly, if the spin-offs occur, we anticipate that
the ruling we receive from the Internal Revenue Service will address the tax
consequences of the spin-offs to our stockholders, including those stockholders
who received their shares pursuant to the exchange offer or the merger. Any
ruling that we receive from the Internal Revenue Service may provide that the
spin-offs could be taxable to some or all of our stockholders, including the
prior stockholders of Thermedics who received our common stock pursuant to the
exchange offer or the merger.
A successful challenge by the Internal Revenue Service to the
reorganization status of the exchange offer and the merger would result in your
recognizing taxable gain or loss on each share of Thermedics common stock that
you exchange in the exchange offer or receive in the merger. The amount of gain
or loss would be equal to the difference between your basis in that share and
the fair market value, as of the effective time of the exchange, of our common
stock that you received in exchange for that share. In such event, a
stockholder's aggregate basis in our common stock so received would equal its
fair market value as of the effective time of the exchange, and the
stockholder's holding period for such stock would begin the day after the
exchange.
COMPARISON OF THE RIGHTS OF HOLDERS OF OUR COMMON STOCK AND
THE RIGHTS OF HOLDERS OF THERMEDICS COMMON STOCK
Upon completion of the exchange offer and the merger, stockholders of
Thermedics will become stockholders of Thermo Electron, rather than stockholders
of Thermedics. Thermo Electron's charter and bylaws will govern your rights as a
stockholder of Thermo Electron. Our charter and bylaws differ in some important
respects from Thermedics' charter and bylaws. In addition, Thermedics is
incorporated under the laws of the Commonwealth of Massachusetts, and the rights
of Thermedics stockholders are currently governed by Chapter 156B of the
Massachusetts General Laws, which is referred to in this prospectus as the
Massachusetts Business Corporation Law. We are incorporated under the laws of
the State of
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Delaware. As Thermo Electron stockholders, the Delaware General Corporation Law
will govern the rights of former Thermedics stockholders.
The following is a comparison of:
- the current rights of Thermedics stockholders under Thermedics' charter
and bylaws and the Massachusetts Business Corporation Law, and
- the rights Thermedics stockholders would have as Thermo Electron
stockholders under Thermo Electron's charter and bylaws and the Delaware
General Corporation Law after the completion of the offer and the merger.
The comparison summarizes the material differences but does not list all
differences between the rights of Thermo Electron stockholders and Thermedics
stockholders.
<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
--------------------------------------- ---------------------------------------
<S> <C> <C>
BOARD OF DIRECTORS
Classified Board Divided into three classes, as nearly Consists of single class serving a
equal in number as possible, with each one-year term.
class serving a staggered three-year
term.
Removal of Directors Directors may be removed for cause Directors may be removed, with or
only, at any special or annual meeting, without cause, by the holders of a
by the affirmative vote of a majority majority of the shares then entitled to
of shares present in person or by proxy vote at an election of directors.
at such meeting entitled to vote for Directors may also be removed with
the election of such director. cause by a majority of the directors
then in office. A director may only be
removed with cause after reasonable
notice and an opportunity to be heard.
Filling of Board Vacancies on the board of directors may Same.
Vacancies be filled by the vote of a majority of
the directors then in office.
Size of Board The number of directors shall be fixed The number of directors shall be fixed
by resolution of the board, but may not by resolution of the board or a vote of
be less than 3. The current number of the holders of Thermedics common stock
directors is 9. but may not be less than 3 nor more
than 8. The current number of directors
is 6.
ANNUAL MEETING OF Held on date fixed by the board. Same.
STOCKHOLDERS
</TABLE>
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<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
--------------------------------------- ---------------------------------------
<S> <C> <C>
CALLING A SPECIAL Special meetings may be called by the Special meetings may be called by the
MEETING OF STOCKHOLDERS board of directors, the chairman of the board of directors, the chairman of the
board of directors or the chief board of directors or the president and
executive officer. shall be called by the clerk or another
officer upon written application of
stockholders holding at least 10% of
the Thermedics common stock entitled to
vote at a special meeting.
QUORUM REQUIREMENTS The presence in person or by proxy of The presence in person or by proxy of
the holders of a majority of the votes the holders of a majority of the shares
represented by the shares entitled to entitled to vote at the meeting
vote at the meeting constitute a quorum constitute a quorum for that meeting.
for that meeting, except as otherwise
provided by the Delaware General
Corporation Law.
VOTING RIGHTS Each holder of our common stock is Each holder of Thermedics common stock
entitled to one vote per share and may is entitled to one vote per share and
not cumulate votes for the election of may not cumulate votes for the election
directors. Each holder of our Series B of directors.
junior participating stock is entitled
to 10,000 votes per share and may not
cumulate votes for the election of
directors.
STOCKHOLDER ACTION BY In general, if a quorum is present at a In general, if a quorum is present at a
VOTE AT A MEETING meeting of stockholders, the meeting of stockholders, the
affirmative vote of a majority of the affirmative vote of a majority of the
votes represented by the shares present shares present and entitled to vote at
and entitled to vote at the meeting is the meeting is required to take action.
required to take action, except that Most mergers and consolidations would
the election of directors is by vote of require the approval of a majority of
a plurality of the votes represented by the shares of Thermedics common stock
the shares present and entitled to vote outstanding and entitled to vote.
at the meeting. Most mergers, Sales, leases or exchanges of all or
consolidations and sales, leases or substantially all of Thermedics' assets
exchanges of all or substantially all would require the approval of
of our assets would require the two-thirds of the shares of Thermedics
approval of our board of directors and common stock outstanding and entitled
of a majority of the votes represented to vote. The voting requirements
by all outstanding shares of our common necessary to approve amendments to
stock entitled to vote. The voting Thermedics' charter and bylaws are set
requirements necessary to approve forth below under "Amendments to
amendments to the charter and bylaws Organizational Documents."
are set forth below under "Amendments
to Organizational Documents."
</TABLE>
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<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
--------------------------------------- ---------------------------------------
<S> <C> <C>
STOCKHOLDER ACTION BY May take action by written consent of May take action by written consent of
WRITTEN CONSENT stockholders having no less than the all stockholders entitled to vote on
minimum number of votes that would be the action if a meeting were held.
necessary to take such action at a
meeting at which all shares entitled to
vote on the matter were present and
voted.
ADVANCE NOTICE FOR A stockholder must deliver notice of No advance notice provisions.
STOCKHOLDER NOMINATIONS stockholder nominations or proposals to
AND OTHER BUSINESS be made at an annual stockholders
meeting to the secretary not less than
60 days nor more than 75 days before
the first anniversary of the date on
which proxy materials for the preceding
year's annual stockholders meeting were
first mailed. However, if the date of
the annual meeting is moved ahead more
than 30 days before or delayed by more
than 30 days after the anniversary of
the preceding year's annual stockholder
meeting, a stockholder must deliver
notice not later than the close of
business on the later of:
- the 90th day prior to such annual
meeting; or
- the 10th day following the day on
which public announcement of the date
of such meeting is made.
AMENDMENTS TO
ORGANIZATIONAL DOCUMENTS
Certificate of The approval of both our board of The approval of the holders of a
Incorporation or directors and the holders of a majority majority of the outstanding Thermedics
Articles of Organization of the votes represented by our shares entitled to vote for the
outstanding shares entitled to vote for amendment is required for an amendment
the amendment is required for an to Thermedics' articles of
amendment to our certificate of organization.
incorporation. Any amendment to our
certificate of incorporation which
would materially alter or change the
powers, preferences or special rights
of our Series B junior participating
preferred stock so as to affect them
adversely also requires the approval of
at least two-thirds of the outstanding
shares of Series B junior participating
preferred stock entitled to vote.
</TABLE>
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<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
--------------------------------------- ---------------------------------------
<S> <C> <C>
Bylaws The board of directors may amend and The board of directors may amend and
repeal bylaws. The holders of a repeal bylaws, except for amendments
majority of the votes represented by relating to meetings of stockholders,
the shares of capital stock issued and the removal of directors, the
outstanding and entitled to vote, requirements for amendments to bylaws
voting together as a single class, may and other matters reserved to the
also amend or repeal any bylaw or may stockholders by the Massachusetts
adopt a new bylaw, except that the Business Corporation Law or Thermedics'
affirmative vote of the holders of at charter. The holders of a majority of
least two-thirds of the votes the shares of capital stock issued and
represented by the shares of our outstanding and entitled to vote,
capital stock issued and outstanding voting together as a single class, may
and entitled to vote is required to also amend or repeal any bylaw or may
amend or repeal, or adopt new bylaws adopt a new bylaw.
inconsistent with, those which relate
to directors or amending the bylaws.
INSPECTION RIGHTS Delaware law entitles any stockholder Under Massachusetts law, a
of record of a corporation, in person corporation's stockholders are entitled
or by agent, upon written demand under to inspect and copy its charter,
oath stating the inspection's purpose, bylaws, records of stockholders
to inspect during usual business hours, meetings, and stock and transfer
for any proper purpose, the records. These documents must be kept
corporation's stock ledger, a list of either at the corporation's principal
its stockholders and its other books office, the transfer agent's office or
and records, and to make copies or at the office of the corporation's
extracts therefrom. A proper purpose clerk or resident agent. If access to
means a purpose reasonably related to these documents is refused, the
the person's interest as a stockholder. corporation will be liable to the
requesting stockholder for any actual
damages which result from the refusal.
However, the corporation is not
obligated to produce the documents if
the inspection is being sought to
secure a list of stockholders or other
information to be sold or used for a
purpose unrelated to the requesting
person's interest as a stockholder.
CAPITALIZATION
Authorized Common Stock 350 million shares. 100 million shares.
</TABLE>
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<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
--------------------------------------- ---------------------------------------
<S> <C> <C>
Authorized Preferred 50,000 shares of preferred stock; None.
Stock 40,000 shares of the preferred stock
designated as Series B junior
participating preferred stock, used in
the stockholder rights plan described
below. The board of directors may fix
the rights and preferences of any class
or series of the remaining 10,000
shares of preferred stock. The rights
of the holders of our common stock will
be subject to, and may be adversely
affected by, the rights of holders of
any preferred stock that may be issued
in the future.
RIGHTS PLAN We have a rights agreement dated as of None.
January 19, 1996, which is described
below. The rights agreement is
triggered by, among other things, the
acquisition by a third party of 15% or
more of our total outstanding common
stock without the approval of our board
of directors. The board of directors
may redeem rights at any time until ten
days after a triggering acquisition.
</TABLE>
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<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
--------------------------------------- ---------------------------------------
<S> <C> <C>
EXCULPATION AND Our certificate of incorporation Thermedics' bylaws provide
INDEMNIFICATION OF provides indemnification to persons indemnification to persons that are or
DIRECTORS, OFFICERS AND that are or were directors or officers were directors, officers, employees or
EMPLOYEES of ours, or are or were serving at our agents of Thermedics, or are or were
request as directors or officers of serving at the request of Thermedics as
another corporation, partnership, joint directors, officers, employees or
venture, trust or other enterprise, to agents of another corporation,
the fullest extent permitted by partnership, joint venture, business
Delaware law. trust or other enterprise, to the
fullest extent permitted by
In the case of any action or suit by us Massachusetts law.
to procure a judgment in our favor, we
will indemnify those directors and In the case of any action or suit by
officers only for expenses, including Thermedics to procure a judgment in its
attorneys' fees, relating to any claim, favor, Thermedics will indemnify those
issue or matter as to which the directors, officers, employees and
director or officer has been judged to agents only for liabilities, expenses,
be liable to us, if and only to the including attorneys' fees, relating to
extent that the court determines that, any claim, issue or matter as to which
despite the adjudication of liability the director or officer has been judged
but in view of all of the circumstances to be liable to Thermedics, if and only
of the case, the director or officer is to the extent that the court determines
entitled to indemnity for such expenses that, despite the adjudication of
which the court finds proper. liability but in view of all of the
circumstances of the case, the director
Our certificate of incorporation also or officer is entitled to indemnity for
provides that, to the extent permitted such expenses which the court finds
by Delaware law, no director would be proper.
personally liable to Thermo Electron or
its stockholders for monetary damages Thermedics' articles of organization
for any breach of fiduciary duty as a also provide that no director shall be
director. personally liable to Thermedics or its
stockholders for monetary damages for
any breach of fiduciary duty as a
director except in the case of:
- a breach of a director's duty of
loyalty;
- acts or omissions not in good faith
or which involve intentional
misconduct or a knowing violation of
law;
- unauthorized distributions or loans
of corporate assets under
Massachusetts law; or
- any transaction in which the director
derived an improper personal benefit.
</TABLE>
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<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
--------------------------------------- ---------------------------------------
<S> <C> <C>
DISSENTER'S RIGHTS Under Delaware law, dissenting Under Massachusetts law, dissenting
stockholders who follow prescribed stockholders who follow prescribed
statutory procedures would be entitled statutory procedures would be entitled
to have us pay them the fair value of to have Thermedics pay them the fair
their shares of our capital stock in value of their shares of Thermedics
connection with a merger or capital stock when the stockholders
consolidation, except where: approve:
- we would be the surviving corporation
and no vote of our stockholders is - the sale, lease or exchange of all or
required to approve the merger; or substantially all of Thermedics'
- the consideration that our property or assets;
stockholders would receive in the - an amendment to Thermedics' articles
merger or consolidation consists of organization which adversely
solely of: affects the rights of the dissenting
-- shares of stock of the surviving stockholders; or
corporation; - a merger or consolidation with
-- shares of stock of another another corporation unless
corporation which are listed on a Thermedics is the surviving
national securities exchange or corporation and a vote of the
designated as a national market stockholders of Thermedics was not
system security on an interdealer required to approve such merger or
quotation system by the National consolidation.
Association of Securities Dealers,
Inc. or are held of record by more
than 2,000 stockholders;
-- cash in lieu of fractional shares;
or
-- any combination of the foregoing.
</TABLE>
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<TABLE>
<CAPTION>
THERMO ELECTRON THERMEDICS
--------------------------------------- ---------------------------------------
<S> <C> <C>
INTERESTED DIRECTOR Delaware law provides that no Thermedics' bylaws provide that, absent
TRANSACTIONS transaction between a corporation and a fraud, no contract or other transaction
director or officer or any entity in between Thermedics and any other person
which any of them have an interest is or entity will be affected or
void or voidable solely for this reason invalidated, and no director or officer
or solely because the director or shall be liable to Thermedics or its
officer is present at or participates creditors or stockholders, due to the
in the meeting of the board or fact that a director or officer of
committee which authorized the contract Thermedics is directly or indirectly
or transaction. A transaction is also pecuniarily or otherwise interested in
not void or voidable solely because a or connected to, or is a party to, the
director's votes are counted for such contract or transaction, as long as the
purpose if: director's or officer's interest in or
connection to the transaction or
- after full disclosure the transaction contract is disclosed to or known by
is approved by the disinterested the Thermedics board at the time it
directors or by the stockholders; or approves the transaction or contract.
- the transaction is fair to the Any such transaction or contract must
corporation at the time it is be:
approved. - approved by a majority of directors
of Thermedics who are not interested
in or connected to the contract or
transaction; or
- approved or ratified by a majority of
the shares of Thermedics capital
stock entitled to vote on such matter
at a meeting of stockholders.
</TABLE>
THERMO ELECTRON STOCKHOLDER RIGHTS PLAN
Under Delaware law, every corporation may create and issue rights entitling
the holders of the rights to purchase from the corporation shares of its capital
stock of any class or classes, subject to any provisions of its certificate of
incorporation. The price and terms of the shares must be stated in the company's
certificate of incorporation or in a resolution adopted by the board of
directors for the creation or issuance of such rights.
We entered into a rights agreement dated as of January 19, 1996 with
BankBoston, N.A. as rights agent. On January 19, 1996, our board declared a
dividend distribution of one right for each outstanding share of our common
stock to our stockholders. Each right entitles the registered holder to purchase
from us a unit consisting of one ten-thousandth of a share of Series B junior
participating preferred stock at a purchase price of $250 in cash per unit,
subject to adjustment.
The following description is a summary of all the material terms of our
stockholder rights plan. It does not restate these terms in their entirety. We
urge you to read our stockholder rights plan because it, and not this
description, defines the terms and provisions of our plan. We have filed a copy
of the rights agreement that established our rights plan as an exhibit to our
Registration Statement on Form 8-A, which we filed with the SEC on January 26,
1996 and which we incorporate by reference into the registration statement which
includes this prospectus. You may obtain a copy of the rights agreement at no
charge by writing to us at the address listed below under the caption "Where You
Can Find More Information."
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<PAGE> 60
Distribution of rights. Initially, the rights are attached to our
outstanding common stock certificates and we are not distributing separate
rights certificates. Rights will be attached to the shares of our common stock
that we issue in the exchange offer and in the merger. The rights will separate
from our common stock, and a distribution date for purposes of the rights plan
will occur, upon the earlier of the following events:
- 10 days after a public announcement that a person or group of affiliated
or associated persons has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of our
common stock; and
- 10 business days following the start of a tender offer or exchange offer
that would result in a person or group beneficially owning 15% or more of
the outstanding shares of our common stock.
Until the distribution date:
- the rights are evidenced by our common stock certificates and will be
transferred only with our common stock certificates;
- new common stock certificates of ours will incorporate the rights
agreement by reference; and
- the surrender for transfer of any certificates of our common stock will
also transfer the rights associated with our common stock represented by
the certificate.
The rights are not exercisable until the distribution date and will expire
at the close of business on January 29, 2006, unless we redeem or exchange them
earlier as described below.
Flip in event. If a person becomes the beneficial owner of 15% or more of
the shares of our common stock, each holder of a right will then have the right
to receive, upon exercise, a number of shares of our common stock, or, in some
circumstances, cash, property or other securities of ours, which equals the
exercise price of the right divided by one-half of the current market price of
our common stock on the date the acquisition occurs. However, following the
acquisition:
- rights are not exercisable until the rights are no longer redeemable by
us as set forth below; and
- all rights that are, or were, under circumstances specified in the rights
agreement, beneficially owned by any acquiring person will be null and
void.
The event set forth in this paragraph is referred to as a "section 11(a)(ii)
event." A section 11(a)(ii) event does not occur in the case of an offer for all
of our outstanding shares of common stock that our board of directors determines
is fair to our stockholders and in their best interests.
For example, at an exercise price of $250 per right, each right not owned
by an acquiring person, or by some related parties, following a section
11(a)(ii) event would entitle the holder to purchase for $250 the number of
shares of our common stock, or other consideration, as noted above, as equals
$250 divided by one-half of the current market price of our common stock.
Assuming that our common stock had a per share value of $50 at that time, the
holder of each valid right would be entitled to purchase ten shares of our
common stock for $250.
Flip over event. If at any time after a person has become the beneficial
owner of 15% or more of the shares of our common stock:
- we are acquired in a merger or other business combination transaction in
which we are not the surviving corporation, or our common stock is
changed or exchanged, or
- 50% or more of our assets or earning power is sold or transferred,
each holder of a right, except rights which previously have been voided as set
forth above, shall then have the right to receive, upon exercise, that number of
shares of common stock of the acquiring company which equals the exercise price
of the right divided by one-half of the current market price of that company's
common stock at the date of the occurrence of the event. This exercise right
does not arise if
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<PAGE> 61
the merger or other transaction follows an offer for all of our outstanding
shares of common stock that our board of directors determines is fair to our
stockholders and in their best interests.
For example, at an exercise price of $250 per right, each right following
an event described in the preceding paragraph would entitle the holder to
purchase for $250 the number of shares of common stock of the acquiring company
as equals $250 divided by one-half of the current market price of that company's
common stock. Assuming that the common stock had a per share value of $100 at
that time, the holder of each valid right would be entitled to purchase five
shares of common stock of the acquiring company for $250.
Exchange of rights. At any time after a section 11(a)(ii) event, our board
of directors may exchange the rights, other than rights owned by the acquiring
person that have become void, in whole or in part, at an exchange ratio of one
share of our common stock, or one ten-thousandth of a share of preferred stock,
or of a share of a class or series of our preferred stock having equivalent
rights, preferences and privileges, per right.
Series B junior participating preferred stock. Preferred stock purchasable
upon exercise of the rights will not be redeemable. Each share of preferred
stock will be entitled to a minimum preferential quarterly dividend payment of
$100 per share and will be entitled to an aggregate dividend of 10,000 times the
dividend declared per share of our common stock. In the event of liquidation,
the holders of the preferred stock will be entitled to a minimum preferential
liquidating payment of $100 per share and will be entitled to an aggregate
payment of 10,000 times the payment made per share of our common stock. Each
share of preferred stock will have 10,000 votes, voting together with our common
stock. Finally, in the event of any merger, consolidation or other transaction
in which our common stock is changed or exchanged, each share of preferred stock
will be entitled to receive 10,000 times the amount received per share of our
common stock.
These rights are protected by customary antidilution provisions and, in
light of our stock dividend in 1996, currently provide for the following:
- an aggregate dividend per share of preferred stock of 15,000 times the
dividend declared per share of our common stock;
- an aggregate payment per share of preferred stock, in the event of
liquidation, of 15,000 times the payment made per share of our common
stock; and
- 15,000 votes per share of preferred stock, voting together with our
common stock.
Because of the nature of the preferred stock's dividend, liquidation and
voting rights, the value of one ten-thousandth of a share of preferred stock
purchasable upon exercise of each right should approximate the value of one
share of our common stock.
Redemption of rights. At any time until ten days following the date a
person becomes the beneficial owner of 15% or more of the shares of our common
stock, we may redeem the rights in whole, but not in part, at a price of $.01
per right, payable in cash or stock. Immediately upon an action of our board of
directors ordering redemption of the rights, the rights will terminate and the
only right of the holders of rights will be to receive the $.01 redemption
price.
Status of rights holder and tax effects. Until a right is exercised, the
holder of the right, as such, will have no rights as a stockholder of ours,
including the right to vote or to receive dividends. Stockholders may, depending
upon the circumstances, recognize taxable income in the event that the rights
become exercisable for our common stock, or other consideration, or for common
stock of the acquiring company as described above.
Effects of the rights. The rights are intended to have anti-takeover
effects. The rights will cause substantial dilution to a person or group that
attempts to acquire us without conditioning the offer on a substantial number of
rights being acquired. The rights, however, should not affect any prospective
offeror willing to make an offer at a fair price and otherwise in the best
interests of us and our stockholders, as
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<PAGE> 62
determined by a majority of our board of directors. The rights should not
interfere with any merger or other business combination approved by our board of
directors because the board of directors may, at its option, at any time prior
to the close of business on the earlier of:
- the tenth day following the date a person becomes the beneficial owner of
15% or more of the shares of our common stock; or
- January 29, 2006,
and in other specified circumstances, redeem all of the then outstanding rights
at the redemption price.
STATE ANTI-TAKEOVER STATUTES
We are subject to Section 203 of the Delaware General Corporation Law,
which may make it more difficult for a person who would be an "interested
stockholder," as defined in Section 203, in us to effect various business
combinations with us for a three-year period after becoming an interested
stockholder. Under Delaware law, a corporation's certificate of incorporation or
bylaws may exclude a corporation from the restrictions imposed by Section 203.
Our certificate of incorporation and bylaws do not exclude us from the
restrictions imposed by Section 203.
Chapters 110C, 110D and 110F of the General Laws of the Commonwealth of
Massachusetts prohibit, restrict or impose procedural and disclosure
requirements with respect to the acquisition of more than 5% of the outstanding
shares of a Massachusetts corporation, such as Thermedics, and with respect to
take-over bids and business combinations involving a Massachusetts corporation.
Thermedics, through a provision in its bylaws, has elected to "opt out" of the
prohibitions and restrictions of Chapter 110D.
TRANSACTIONS WITH RELATED PARTIES
PRIOR CONTACTS
Except as set forth in, or incorporated by reference in, this prospectus,
since January 1, 1998, there have been no contacts, negotiations or transactions
between us, on the one hand, and Thermedics or any of its officers, directors or
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, a tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.
PRIOR BUSINESS RELATIONSHIPS
Except as set forth in, or incorporated by reference in, this prospectus,
we have not, since January 1, 1998, had any business relationships or
transactions with Thermedics or any of its executive officers, directors or
affiliates that would require disclosure in this prospectus under the SEC's
rules.
On February 5, 1998, the Thermedics board of directors voted to issue
4,880,533 shares of common stock to us in exchange for 100% of the stock of our
subsidiary TMO TCA Holdings, Inc., which beneficially owns 3,355,705 shares of
Thermo Cardiosystems' common stock. We acquired these shares of Thermo
Cardiosystems common stock as consideration for the acquisition by Thermo
Cardiosystems of International Technidyne Corporation from us in May 1997. The
value of these Thermo Cardiosystems shares was $75,000,000 at the time Thermo
Cardiosystems acquired International Technidyne. Thermo Cardiosystems' issuance
of the 3,355,705 shares of its common stock was subject to its stockholders
approving the listing of the shares for trading on the American Stock Exchange.
Its stockholders approved the listing at a special meeting on April 13, 1998.
Thermedics' issuance of the 4,880,533 shares of its common stock to us was
subject to its stockholders approving the listing of the shares for trading on
the American Stock Exchange. Its stockholders approved the listing at a special
meeting on March 31, 1999. The fair market values of the 4,880,553 shares of
Thermedics' common stock and of the 3,355,705 shares of Thermo Cardiosystems'
common stock as of February 5, 1998 were each $75,587,000.
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<PAGE> 63
In June 1998, we loaned Thermo Sentron, a subsidiary of Thermedics,
$21,000,000 pursuant to a promissory note due December 1998. That promissory
note bore interest at the 90-day Commercial Paper Composite Rate plus 25 basis
points, set at the beginning of each quarter. Thermo Sentron borrowed this money
to partially finance its acquisition of the three businesses that constituted
the product-monitoring group of Graseby Limited, a subsidiary of Smiths
Industries plc, for $44,000,000 in cash, net of cash acquired, and the
assumption of some of Graseby's liabilities. Thermo Sentron repaid the principal
amount of the loan as follows:
<TABLE>
<S> <C>
- Fourth quarter 1998 $2,000,000;
- Second quarter 1999 $6,000,000;
- Third quarter 1999 $1,000,000; and
- Fourth quarter 1999 $1,000,000.
</TABLE>
As each payment was made, we canceled the existing promissory note and Thermo
Sentron issued us a new promissory note for the balance. In March 2000, we
refinanced Thermo Sentron's remaining balance under our cash management
arrangement. The outstanding amount under this cash management arrangement bears
interest at a rate equal to the 30-day Dealers Commercial Paper Rate plus 150
basis points. We reset this rate at the beginning of each month. The rate was
8.00% as of June 1, 2000.
We have entered into a fifteen-year lease arrangement with Thermo Sentron,
effective as of January 1, 2000, with respect to Thermo Sentron's principal
executive offices in Minneapolis, Minnesota. We purchased the building in
December 1999 from Baker Hughes Corporation for $5.5 million. Thermo Sentron
pays us rent under this lease as follows:
- $50,000 per month for the first five years of the lease term;
- $55,000 per month for the second five years of the lease term; and
- $60,000 per month for the third five years of the lease term.
Our Tecomet division provides metal fabrication services to Thermo
Cardiosystems in connection with its manufacture of heart assist devices. Thermo
Cardiosystems paid Tecomet $3,651,000 in 1999 and $1,717,000 in 1998 for these
services.
LEGAL MATTERS
Seth H. Hoogasian, Esq., our General Counsel, will pass on the validity of
the shares of our common stock offered by this prospectus. Mr. Hoogasian is a
full-time employee and officer of Thermo Electron, is an officer of Thermedics
and, as of June 13, 2000, owned or had the right to acquire 396,880 shares of
our common stock and 105,200 shares of the common stock of our subsidiaries.
EXPERTS
Our financial statements and those of Thermedics that we incorporate by
reference in this prospectus and the financial statement schedules that we
incorporated by reference in the registration statement of which this prospectus
is a part have been audited by Arthur Andersen LLP, independent public
accountants, to the extent and for the periods as indicated in their reports
with respect thereto, and are incorporated by reference in reliance upon the
authority of said firm as experts in giving said reports.
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<PAGE> 64
WHERE YOU CAN FIND MORE INFORMATION
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE, INCLUDING IMPORTANT
BUSINESS AND FINANCIAL INFORMATION, WHICH ARE NOT PRESENTED IN OR DELIVERED WITH
THIS PROSPECTUS.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR IN
DOCUMENTS TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH ANY INFORMATION THAT IS DIFFERENT.
THERMEDICS
We incorporate by reference into this prospectus the following documents,
filed by Thermedics (File No. 1-9567) with the SEC:
- Thermedics' Annual Report on Form 10-K for the fiscal year ended January
1, 2000;
- Thermedics' Quarterly Report on Form 10-Q for the fiscal quarter ended
April 1, 2000; and
- Thermedics' Current Reports on Form 8-K dated February 1, 2000, March 31,
2000, April 7, 2000, April 13, 2000, April 27, 2000, May 2, 2000 and May
11, 2000.
THERMO ELECTRON
We incorporate by reference into this prospectus the following documents,
which we have filed (File No. 1-8002) with the SEC:
- Our Annual Report on Form 10-K for the fiscal year ended January 1, 2000;
- Our Quarterly Report on Form 10-Q for the fiscal quarter ended April 1,
2000;
- Our Current Reports on Form 8-K dated February 1, 2000 and May 2, 2000;
- Our Proxy Statement dated April 19, 2000, filed with the SEC on April 21,
2000;
- The description of our common stock which is contained in our
registration statement on Form 8-A and the amendment to that registration
statement, filed under the Exchange Act; and
- The description of our preferred stock purchase rights which is contained
in our registration statement on Form 8-A and the amendments to that
registration statement, filed under the Exchange Act.
All documents that we file or that Thermedics files pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act from the date of this prospectus
to the date that shares are accepted for exchange pursuant to our offer, the
date that our offer is terminated or the date that the merger is closed will
also be deemed to be incorporated in this prospectus by reference.
The information incorporated by reference in this prospectus is deemed to
be a part of this prospectus, except for any information superseded by
information in this prospectus or in any subsequently filed document that we
incorporate by reference in this prospectus.
We will provide a copy of any and all of the information that we
incorporate by reference in this prospectus to any person, without charge, upon
written or oral request. If we do not specifically incorporate by reference
exhibits to the documents that we incorporate by reference in this prospectus,
then we will not provide copies of those exhibits. TO OBTAIN TIMELY DELIVERY,
YOU MUST REQUEST THE INFORMATION NO LATER THAN JUNE 16, 2000.
You should direct requests for documents relating to Thermedics or to us
to: Sandra L. Lambert, Corporate Secretary, Thermo Electron Corporation, 81
Wyman Street, Waltham, Massachusetts 02454 (telephone: 781-622-1000; facsimile:
781-768-6620).
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We file reports, proxy statements and other information with the SEC. You
may inspect and copy our reports, proxy statements and other information at the
public reference facilities maintained by the SEC at:
<TABLE>
<S> <C> <C>
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 500 West Madison Street 13th Floor
450 Fifth Street, N.W. Suite 1400 New York, New York 10048
Washington, D.C. 20549 Chicago, Illinois 60661
</TABLE>
You can also inspect reports, proxy statements and other information
concerning Thermedics at:
The American Stock Exchange
86 Trinity Place
New York, New York 10006-1881
You can also inspect reports, proxy statements and other information
concerning us at:
The New York Stock Exchange
20 Broad Street
New York, New York 10005
You can also obtain copies of these materials by mail at prescribed rates
from the Public Reference Room at the SEC, 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the Public Reference
Room by calling the SEC toll-free at l-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy statements and other information
regarding Thermo Electron and Thermedics. The address of the SEC website is
http://www.sec.gov.
We have filed a registration statement on Form S-4 under the Securities Act
with the SEC with respect to our common stock we would issue to Thermedics
stockholders in the exchange offer and the merger. This prospectus constitutes
our prospectus filed as part of the registration statement. This prospectus does
not contain all of the information set forth in the registration statement
because we have omitted parts of the registration statement in accordance with
the SEC's rules. The registration statement and its exhibits are available for
inspection and copying as set forth above.
We have also filed with the SEC a statement on Schedule TO pursuant to Rule
14d-3 under the Exchange Act furnishing information about the exchange offer.
You may read and copy the Schedule TO and any amendments thereto at the SEC's
public reference room in Washington, D.C. referred to above.
If you have any questions about the exchange offer, you should call the
information agent, D.F. King & Co., Inc. If you are a banker or broker, call
collect at (212) 269-5550. All others should call toll-free at (800) 290-6433.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS, IN ANY
JURISDICTION OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION OF AN OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES PURSUANT TO THIS PROSPECTUS
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE INFORMATION SET FORTH OR INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE OR IN OUR AFFAIRS SINCE THE DATE OF THIS PROSPECTUS.
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THERMO ELECTRON CORPORATION
INDEX TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
Pro Forma Consolidated Condensed Financial Information of
Thermo Electron Corporation (Unaudited)................... F-2
Pro Forma Consolidated Condensed Statement of Continuing
Operations for the three months ended April 1, 2000....... F-3
Pro Forma Consolidated Condensed Statement of Continuing
Operations for the fiscal year ended January 1, 2000...... F-4
Pro Forma Consolidated Condensed Balance Sheet as of April
1, 2000................................................... F-5
Notes to Pro Forma Consolidated Condensed Financial
Statements................................................ F-6
</TABLE>
F-1
<PAGE> 67
THERMO ELECTRON CORPORATION
PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma consolidated condensed statement of
operations sets forth our results of continuing operations for the three months
ended April 1, 2000, and the fiscal year ended January 1, 2000, as if we had
completed the exchange offer and the merger at the beginning of fiscal 1999. The
following unaudited pro forma consolidated condensed balance sheet sets forth
our financial position as of April 1, 2000, as if we had completed the exchange
offer and the merger on April 1, 2000. For purposes of determining the number of
shares of our common stock that we will issue in the exchange offer and the
merger, we have used the exchange ratio of 0.45 shares of our common stock for
each share of Thermedics common stock not already owned by us. The pro forma
results of operations are not necessarily indicative of future operations or the
actual results that would have occurred if we had completed the exchange offer
and the merger at the beginning of fiscal 1999.
F-2
<PAGE> 68
THERMO ELECTRON CORPORATION
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF CONTINUING OPERATIONS
THREE MONTHS ENDED APRIL 1, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
----------- ------------ ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Revenues $598,929 $ -- $598,929
-------- ------ --------
Costs and Operating Expenses:
Cost of revenues........................................ 325,183 -- 325,183
Selling, general and administrative expenses............ 173,682 315 173,997
Research and development expenses....................... 48,446 -- 48,446
Restructuring and other unusual costs, net.............. (7,700) -- (7,700)
-------- ------ --------
539,611 315 539,926
-------- ------ --------
Operating Income.......................................... 59,318 (315) 59,003
Other Expense, Net........................................ (21,172) -- (21,172)
-------- ------ --------
Income from Continuing Operations Before Income Taxes,
Minority Interest and Extraordinary Items............... 38,146 (315) 37,831
Income Tax Provision...................................... 16,728 -- 16,728
Minority Interest Expense................................. 6,127 -- 6,127
-------- ------ --------
Income from Continuing Operations Before Extraordinary
Items................................................... $ 15,291 $ (315) $ 14,976
======== ====== ========
Earnings per Share from Continuing Operations Before
Extraordinary Items:
Basic................................................... $ .10 $ .09
======== ========
Diluted................................................. $ .09 $ .09
======== ========
Weighted Average Shares:
Basic................................................... 156,813 4,631 161,444
======== ====== ========
Diluted................................................. 157,464 4,631 162,095
======== ====== ========
</TABLE>
F-3
<PAGE> 69
THERMO ELECTRON CORPORATION
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF CONTINUING OPERATIONS
FISCAL YEAR ENDED JANUARY 1, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Revenues $2,471,193 $ -- $2,471,193
---------- ------- ----------
Costs and Operating Expenses:
Cost of revenues..................................... 1,378,494 -- 1,378,494
Selling, general and administrative expenses......... 673,004 1,261 674,265
Research and development expenses.................... 171,100 -- 171,100
Restructuring and other unusual costs, net........... 149,589 -- 149,589
---------- ------- ----------
2,372,187 1,261 2,373,448
---------- ------- ----------
Operating Income....................................... 99,006 (1,261) 97,745
Other Expense, Net..................................... (61,520) -- (61,520)
---------- ------- ----------
Income from Continuing Operations Before Income Taxes,
Minority Interest and Extraordinary Items............ 37,486 (1,261) 36,225
Income Tax Provision................................... 33,073 -- 33,073
Minority Interest Expense.............................. 18,993 -- 18,993
---------- ------- ----------
Loss from Continuing Operations Before Extraordinary
Items................................................ $ (14,580) $(1,261) $ (15,841)
========== ======= ==========
Loss per Share from Continuing Operations Before
Extraordinary Items:
Basic................................................ $ (.09) $ (.10)
========== ==========
Diluted.............................................. $ (.11) $ (.12)
========== ==========
Basic and Diluted Weighted Average Shares.............. 157,987 4,631 162,618
========== ======= ==========
</TABLE>
F-4
<PAGE> 70
THERMO ELECTRON CORPORATION
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
APRIL 1, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................ $ 533,471 $ -- $ 533,471
Short-term available-for-sale investments, at quoted
market value...................................... 426,015 -- 426,015
Accounts receivable, net............................. 534,569 -- 534,569
Other current assets................................. 690,103 -- 690,103
Net assets of discontinued operations................ 502,629 9,034 511,663
---------- -------- ----------
2,686,787 9,034 2,695,821
---------- -------- ----------
Property, Plant and Equipment, at Cost, Net............ 424,874 -- 424,874
---------- -------- ----------
Other Assets........................................... 233,486 -- 233,486
---------- -------- ----------
Cost in Excess of Net Assets of Acquired Companies..... 1,206,238 50,449 1,256,687
---------- -------- ----------
Long-term Net Assets of Discontinued Operations........ 625,802 -- 625,802
---------- -------- ----------
$5,177,187 $ 59,483 $5,236,670
========== ======== ==========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities.................................... $1,057,399 $ -- $1,057,399
---------- -------- ----------
Deferred Income Taxes and Other Deferred Items......... 162,622 -- 162,622
---------- -------- ----------
Long-term Obligations:
Subordinated convertible obligations................. 1,184,033 -- 1,184,033
Other................................................ 386,290 -- 386,290
---------- -------- ----------
1,570,323 -- 1,570,323
---------- -------- ----------
Minority Interest...................................... 364,900 (48,577) 316,323
---------- -------- ----------
Common Stock of Subsidiary Subject to Redemption....... 7,692 -- 7,692
---------- -------- ----------
Shareholders' Investment:
Common stock......................................... 167,990 4,631 172,621
Capital in excess of par value....................... 1,061,754 103,429 1,165,183
Retained earnings.................................... 1,057,791 -- 1,057,791
Treasury stock at cost............................... (193,457) -- (193,457)
Deferred compensation................................ (6,917) -- (6,917)
Accumulated other comprehensive items................ (72,910) -- (72,910)
---------- -------- ----------
2,014,251 108,060 2,122,311
---------- -------- ----------
$5,177,187 $ 59,483 $5,236,670
========== ======== ==========
</TABLE>
F-5
<PAGE> 71
THERMO ELECTRON CORPORATION
NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
<TABLE>
NOTE 1 -- PRO FORMA ADJUSTMENTS TO PRO FORMA CONSOLIDATED
CONDENSED STATEMENT OF CONTINUING OPERATIONS
(IN THOUSANDS EXCEPT IN TEXT)
THREE MONTHS ENDED YEAR ENDED
APRIL 1, 2000 JANUARY 1, 2000
------------------ ---------------
DEBIT (CREDIT)
<S> <C> <C>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Amortization of cost in excess of net assets of acquired
companies created by the acquisition of additional shares
of Thermedics............................................. $ 315 $1,261
--------- ------
WEIGHTED AVERAGE SHARES
Increase in weighted average shares outstanding due to the
assumed issuance of 4,630,582 shares of our common stock
for the acquisition of additional shares of Thermedics as
of the beginning of 1999.................................. 4,631 4,631
--------- ------
NOTE 2 -- PRO FORMA ADJUSTMENTS TO PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEET
(IN THOUSANDS EXCEPT IN TEXT)
APRIL 1, 2000
---------
DEBIT (CREDIT)
NET ASSETS OF DISCONTINUED OPERATIONS -- CURRENT
Increase in current net assets of discontinued operations as
a result of our increased ownership of Thermedics......... $ 9,034
---------
COST IN EXCESS OF NET ASSETS OF ACQUIRED COMPANIES
Increase in cost in excess of net assets of acquired
companies as a result of our increased ownership of
Thermedics................................................ 50,449
---------
MINORITY INTEREST
Decrease in minority interest as a result of our increased
ownership of Thermedics................................... 48,577
---------
COMMON STOCK
Increase in common stock due to the assumed issuance of
4,630,582 shares of our common stock for the acquisition
of additional shares of Thermedics........................ (4,631)
---------
CAPITAL IN EXCESS OF PAR VALUE
Increase in capital in excess of par value as a result of
our increased ownership of Thermedics and the conversion
of outstanding stock options of Thermedics into our stock
options................................................... (103,429)
---------
</TABLE>
F-6
<PAGE> 72
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 73
ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS OF THERMO ELECTRON
AND THERMEDICS
THERMO ELECTRON
We have set forth in the following table:
- the name, business address, position with Thermo Electron, present
principal occupation or employment and five-year employment history of
each of our directors and executive officers; and
- the names, principal businesses and addresses of any corporations or
other organizations in which those principal occupations are conducted.
Unless otherwise indicated:
- each occupation listed in the table refers to Thermo Electron;
- each individual is a United States citizen; and
- each individual's business address is 81 Wyman Street, Waltham,
Massachusetts 02454.
Unless otherwise indicated, to our knowledge, none of our directors or
executive officers:
- beneficially owns any shares of our common stock or Thermedics common
stock or rights to acquire shares of our common stock or Thermedics
common stock;
- has been convicted in a criminal proceeding during the last five years,
excluding traffic violations or similar misdemeanors; or
- was a party to any judicial or administrative proceeding during the last
five years that resulted in a judgement, decree or final order enjoining
the person from future violations of, or prohibiting activities subject
to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.
Mr. John N. Hatsopoulos retired from our board of directors effective
February 21, 2000. Dr. George N. Hatsopoulos retired from our board of directors
effective March 31, 2000. Mr. Roger D. Wellington retired from our board of
directors effective May 17, 2000.
SAMUEL W. BODMAN................... Dr. Bodman, 61, has been a director of
Thermo Electron 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 located
at 75 State Street, Boston, MA 02109. 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
Thermo Electron since 1974. Mr. Crisp was
a general partner of Venrock Associates,
a venture capital investment firm located
at 30 Rockefeller Plaza, New York, NY
10112, 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
A-1
<PAGE> 74
Inc., ThermoTrex Corporation and United
States Trust Corporation.
ELIAS P. GYFTOPOULOS............... Dr. Gyftopoulos, 72, has been a director
of Thermo Electron 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
Cardiosystems Inc., ThermoLase
Corporation and Trex Medical Corporation.
FRANK JUNGERS...................... Mr. Jungers, 73, has been a director of
Thermo Electron since 1978. Mr. Jungers
has been a consultant on business and
energy matters since 1977. His business
address is 822 N.W. Murray Boulevard,
Suite 242, Portland, OR 97229. Mr.
Jungers is also a director of The AES
Corporation, Donaldson, Lufkin &
Jenrette, Inc., Statia Terminals Group
N.V. and Thermo Ecotek 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.
ROBERT A. MCCABE................... Mr. McCabe, 65, has been a director of
Thermo Electron since 1962. He has been
the chairman of Pilot Capital Corporation
located at 444 Madison Avenue, Suite
2103, New York, NY 10022, which is
engaged in private investments, since
1998. Mr. McCabe was 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 and
Church & Dwight Company.
HUTHAM S. OLAYAN................... Ms. Olayan, 46, has been a director of
Thermo Electron 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, which is
located at 505 Park Avenue, Suite 1100,
New York, NY 10022, is engaged in private
investments, including real estate, and
advisory services. Ms. Olayan is also a
director of Trex Medical Corporation. Ms.
Olayan is a citizen of Saudi Arabia.
ROBERT W. O'LEARY.................. Mr. O'Leary, 56, has been a director of
Thermo Electron since June 1998. He has
been the chairman of Premier, Inc., a
strategic alliance of not-for-profit
health care and hospital systems located
at 12225 El Camino
A-2
<PAGE> 75
Real, San Diego, CA 92130, since 1995,
and he was the chief executive officer
from 1995 to 1999.
RICHARD F. SYRON................... Dr. Syron, 56, has been a director of
Thermo Electron 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. located at 86 Trinity
Place, New York, NY 10006-1881. Dr. Syron
is also a director of Dreyfus
Corporation, John Hancock Financial
Services, Inc., and Thermo Fibertek Inc.
BRIAN D. HOLT...................... Mr. Holt, 51, became the chief operating
officer, energy and environment, of
Thermo Electron in September 1998. Mr.
Holt has been the president and chief
executive officer of Thermo Ecotek
Corporation, a majority-owned subsidiary
of Thermo Electron located at 245 Winter
Street, Waltham, MA 02451, that is
involved in electric power generation
since February 1994. From March 1996 to
September 1998, he was a vice president
of Thermo Electron. Mr. Holt is also a
director of Thermo Ecotek Corporation and
Thermo TerraTech Inc.
JOHN T. KEISER..................... Mr. Keiser, 64, became chief operating
officer, biomedical, of Thermo Electron
in September 1998 and was a vice
president from April 1997 until his
promotion. Mr. Keiser has been the
president and chief executive officer of
Thermedics Inc., a manufacturer of
biomedical products, product
quality-assurance systems and security
devices, since March 1998 and December
1998, respectively, and served as a
senior vice president of Thermedics Inc.
from 1994 until his promotion to
president. He has also been the president
of Thermo Electron's wholly owned
biomedical group, a manufacturer of
medical equipment and instruments, since
1994. Mr. Keiser is a director of
Thermedics Inc., Thermo Cardiosystems
Inc., ThermoLase Corporation, ThermoTrex
Corporation and Trex Medical Corporation.
EARL R. LEWIS...................... Mr. Lewis, 56, became chief operating
officer, measurement and detection, of
Thermo Electron in September 1998, and
served as senior vice president of Thermo
Electron from June 1998 to September 1998
and vice president from September 1996 to
June 1998. Mr. Lewis has been president
and chief executive officer of Thermo
Instrument Systems Inc. since March 1997
and January 1998, respectively, and was
chief operating officer from January 1996
to January 1998. Prior to that time, he
was executive vice president of Thermo
Instrument Systems Inc. from January 1996
to March 1997 and senior vice president
from January 1994 to January 1996. Mr.
Lewis served as chief executive officer
of Thermo Optek Corporation, a subsidiary
of Thermedics
A-3
<PAGE> 76
and a manufacturer of analytical
instruments that measure energy and light
for purposes of materials analysis,
characterization and preparation, from
its inception in August 1995 to January
1998. Mr. Lewis is a director of FLIR
Systems Inc., SpectRx Inc. and
Spectra-Physics Lasers, Inc.
THEO MELAS-KYRIAZI................. Mr. Melas-Kyriazi, 40, has been a vice
president, of Thermo Electron since March
1998 and its chief financial officer
since January 1999. Prior to his
appointment as a vice president of Thermo
Electron, Mr. Melas-Kyriazi served as
president and chief executive officer of
ThermoSpectra Corporation, which
develops, manufactures, and markets
precision imaging, inspection,
measurement, and temperature-control
instrumentation, from its inception in
August 1994 until March 1998. Mr.
Melas-Kyriazi is a citizen of Greece.
WILLIAM A. RAINVILLE............... Mr. Rainville, 58, became chief operating
officer, recycling and resource recovery,
of Thermo Electron in September 1998. Mr.
Rainville was a senior vice president of
Thermo Electron from March 1993 to
September 1998, and a vice president of
Thermo Electron from 1986 to 1993. He has
been president and chief executive
officer of Thermo Fibertek Inc., a
majority-owned subsidiary of Thermo
Electron located at 245 Winter Street,
Waltham, MA 02451 that develops and
manufactures equipment and products for
the papermaking and paper-recycling
industries, since its inception in 1991.
Mr. Rainville is also a director of
Thermo Ecotek Corporation, Thermo
Fibergen Inc., Thermo Fibertek Inc. and
Thermo TerraTech Inc.
Stock Ownership. The following table sets forth the beneficial ownership
of common stock of Thermedics and Thermo Electron, as of January 31, 2000, with
respect to each of our directors and executive officers. Our directors and
executive officers disclaim beneficial ownership of the shares of Thermedics
common stock beneficially owned by us.
<TABLE>
<CAPTION>
THERMO
ELECTRON
NAME(1) CORPORATION(2) THERMEDICS INC.(3)
------- -------------- ------------------
<S> <C> <C>
Samuel W. Bodman............................................ 27,599 0
Peter O. Crisp.............................................. 121,767 37,076
Elias P. Gyftopoulos........................................ 91,399 8,298
Brian D. Holt............................................... 322,941 0
Frank Jungers............................................... 171,021 3,000
John T. Keiser.............................................. 331,636 194,693
Earl R. Lewis............................................... 215,477 3
Jim P. Manzi................................................ 0 0
Robert A. McCabe............................................ 66,326 2,498
Theo Melas-Kyriazi.......................................... 458,532 11,861
Hutham S. Olayan............................................ 49,568 0
Robert W. O'Leary........................................... 43,830 0
</TABLE>
A-4
<PAGE> 77
<TABLE>
<CAPTION>
THERMO
ELECTRON
NAME(1) CORPORATION(2) THERMEDICS INC.(3)
------- -------------- ------------------
<S> <C> <C>
William A. Rainville........................................ 361,499 0
Richard F. Syron............................................ 1,074,006 0
All directors and current executive officers as a group (14
persons).................................................. 3,335,601 257,429
</TABLE>
---------------
(1) Except as reflected in the footnotes to this table, shares 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 Thermo Electron beneficially owned by Dr.
Bodman, Mr. Crisp, Dr. Gyftopoulos, Mr. Holt, Mr. Jungers, Mr. Keiser, Mr.
Lewis, Mr. McCabe, Mr. Melas-Kyriazi, Ms. Olayan, Mr. O'Leary, Mr.
Rainville, Dr. Syron and all directors and current executive officers as a
group include 26,000, 25,596, 27,442, 284,948, 24,673, 263,230, 212,278,
27,442, 384,361, 27,442, 27,000, 294,630, 1,011,000 and 2,636,042 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. Melas-Kyriazi and all directors
and current executive officers as a group include 1,071 shares allocated to
Mr. Melas-Kyriazi's account maintained pursuant to the Thermo Electron's
employee stock ownership plan, or ESOP. Shares beneficially owned by Dr.
Bodman, Mr. Crisp, Dr. Gyftopoulos, Mr. Jungers, Mr. McCabe, Ms. Olayan, Mr.
O'Leary, Dr. Syron 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 and
193,618 shares, respectively, allocated to accounts maintained pursuant to
Thermo Electron's deferred compensation plan for directors. 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. No director or current executive officer beneficially owned
more than 1% of the Thermo Electron common stock outstanding as of such
date; all directors and current executive officers as a group beneficially
owned 2.13% of the Thermo Electron common stock outstanding as of January
31, 2000.
(3) Shares of the common stock of Thermedics 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 Mr. Melas-Kyriazi and all directors and current
executive officers as a group include 1,119 shares allocated to Mr.
Melas-Kyriazi's account maintained pursuant to Thermo Electron'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' deferred compensation plan for
directors. No director or current executive officer beneficially owned more
than 1% of the Thermedics common stock outstanding as of January 31, 2000;
all directors and current executive officers as a group beneficially owned
less than 1% of the Thermedics common stock outstanding as of January 31,
2000.
THERMEDICS
We have set forth in the following table:
- The name, business address, position with Thermedics, present principal
occupation or employment and five-year employment history of each of the
directors and executive officers of Thermedics; and
- the names, principal businesses and addresses of any corporations or
other organizations in which those principal occupations are conducted.
Unless otherwise indicated:
- each occupation listed in the table refers to Thermedics;
A-5
<PAGE> 78
- each individual is a United States citizen; and
- each individual's business address is 470 Wildwood Street, Woburn,
Massachusetts 01888-1799.
Unless otherwise indicated, to our knowledge, no director or executive
officer of Thermedics:
- beneficially owns any shares of our common stock or of Thermedics common
stock or rights to acquire shares of our common stock or Thermedics
common stock;
- has been convicted in a criminal proceeding during the last five years,
excluding traffic violations or similar misdemeanors; or
- was a party to any judicial or administrative proceeding during the last
five years that resulted in a judgement, decree or final order enjoining
the person from future violations of, or prohibiting activities subject
to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.
George N. Hatsopoulos retired from the board of directors of Thermedics
effective March 31, 2000.
T. ANTHONY BROOKS................... Mr. Brooks, 60, has been a director of
Thermedics since September 1998. Mr.
Brooks was a managing director and
member of the operating committee of
Lehman Brothers Inc., a financial
services firm located at 3 World
Financial Center, New York, NY 10285
from 1991 until his retirement in 1997.
While at Lehman Brothers Inc., Mr.
Brooks was the head of the European
equity division from 1995 to 1996.
PETER O. CRISP...................... Mr. Crisp, 67, has been a director of
Thermedics since 1983. Mr. Crisp was a
general partner of Venrock Associates,
a venture capital investment firm
located at 30 Rockefeller Plaza, New
York, NY 10112, 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, Thermo Electron,
ThermoTrex Corporation and United
States Trust Corporation.
PAUL F. FERRARI..................... Mr. Ferrari, 69, has been a director of
Thermedics since 1991. Mr. Ferrari was
a vice president of Thermo Electron
from 1988 until his retirement at the
end of 1990. Mr. Ferrari is also a
director of General Scanning Inc. and
ThermoTrex Corporation.
JOHN T. KEISER...................... Mr. Keiser, 64, has been a director of
Thermedics since April 1997. He has
been the president and chief executive
officer of Thermedics since March 1998
and December 1998, respectively. From
1994 until March 1998, Mr. Keiser
served as a senior vice president of
Thermedics. Mr. Keiser has been the
chief operating officer, biomedical, of
Thermo Electron since September 1998,
and a vice president from April 1997
until his promotion. He has also been
the president of Thermo Electron's
wholly owned biomedical group, a
manufacturer of medical equipment and
instruments, since 1994.
A-6
<PAGE> 79
Mr. Keiser is a director of Thermo
Cardiosystems Inc., ThermoLase
Corporation, ThermoTrex Corporation and
Trex Medical Corporation.
JOHN W. WOOD JR. ................... Mr. Wood, 56, has been a director of
Thermedics since 1984 and chairman of
the board since March 1998. Mr. Wood
was president and chief executive
officer of Thermedics from 1984 to
March 1998. Mr. Wood has been a senior
vice president of Thermo Electron since
December 1995, and, prior to that
promotion, was a vice president of
Thermo Electron from September 1994 to
December 1995.
NICHOLAS T. ZERVAS.................. Dr. Zervas, 70, has been a director of
Thermedics since 1987. Dr. Zervas has
been Chief of Neurosurgical Service,
Massachusetts General Hospital, located
at 55 Fruit Street, Boston, MA 02114,
since 1977. Dr. Zervas is also a
director of Thermo Cardiosystems Inc.,
ThermoLase Corporation and ThermoTrex
Corporation.
THEO MELAS-KYRIAZI.................. Mr. Melas-Kyriazi, 40, has been the
chief financial officer of Thermedics
since January 1999. Mr. Melas-Kyriazi
also has served as a vice president of
Thermo Electron since March 1998 and
its chief financial officer since
January 1999. Prior to his appointment
as a vice president of Thermo Electron,
Mr. Melas-Kyriazi served as president
and chief executive officer of
ThermoSpectra Corporation, which
develops, manufactures and markets
precision imaging, inspection,
measurement and temperature-control
instrumentation, from its inception in
August 1994 until March 1998. Mr.
Melas-Kyriazi is a citizen of Greece.
VICTOR L. POIRIER................... Mr. Poirier, 58, has been a senior vice
president of Thermedics since 1985. He
has also been president and chief
technical officer of Thermo
Cardiosystems Inc., a majority-owned
subsidiary of Thermedics located at 470
Wildwood Street, Woburn, Massachusetts
01888-2697 since 1990 and 1999,
respectively, and was its chief
executive officer from 1991 to November
1998.
A-7
<PAGE> 80
Stock Ownership. The following table sets forth the beneficial ownership
of common stock of Thermedics and Thermo Electron, as of January 31, 2000, with
respect to each director and executive officer of Thermedics. While some
directors and executive officers of Thermedics are also directors and executive
officers of Thermo Electron or its subsidiaries, all such persons disclaim
beneficial ownership of the shares of common stock beneficially owned by us.
<TABLE>
<CAPTION>
THERMO
ELECTRON
NAME(1) THERMEDICS INC.(2) CORPORATION(3)
------- ------------------- --------------
<S> <C> <C>
T. Anthony Brooks........................................... 5,367 0
Peter O. Crisp.............................................. 37,076 121,767
Paul F. Ferrari............................................. 11,050 16,482
John T. Keiser.............................................. 194,693 331,636
Theo Melas-Kyriazi.......................................... 11,861 458,532
Victor L. Poirier........................................... 69,455 53,880
John W. Wood Jr. ........................................... 233,200 293,550
Nicholas T. Zervas.......................................... 22,064 0
All directors and current executive officers as a group (8
persons).................................................. 584,766 1,275,847
</TABLE>
---------------
(1) Except as reflected in the footnotes to this table, shares 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 Thermedics common stock beneficially owned by Mr. Brooks, Mr.
Crisp, Mr. Ferrari, Mr. Keiser, Mr. Poirier, Mr. Wood, and all directors and
current executive officers as a group include 1,000, 9,000, 8,950, 187,900,
25,000, 174,150 and 406,000 shares, respectively, that such person or group
had the right to acquire within 60 days of January 31, 2000 through the
exercise of stock options. Shares beneficially owned by Mr. Melas-Kyriazi
and all directors and current executive officers as a group include 1,119
shares allocated through January 31, 2000 to Mr. Melas-Kyriazi's account
maintained pursuant to Thermo Electron's ESOP. Shares beneficially owned by
Mr. Brooks, Mr. Crisp, Dr. Zervas and all directors and current executive
officers as a group include 1,367, 9,971, 10,364 and 21,702 shares,
respectively, that had been allocated through January 1, 2000 to their
respective accounts maintained under Thermedics' deferred compensation plan.
Shares beneficially owned by Mr. Wood include 2,600 shares held in custodial
accounts for the benefit of two minor children. No director or current
executive officer beneficially owned more than 1% of the Thermedics common
stock outstanding as of January 31, 2000; all directors and current
executive officers as a group beneficially owned approximately 4.4% of the
Thermedics common stock outstanding as of such date.
(3) Shares of the common stock of Thermo Electron beneficially owned by Mr.
Crisp, Mr. Keiser, Mr. Melas-Kyriazi, Mr. Poirier, Mr. Wood and all
directors and current executive officers as a group include 25,596, 263,230,
384,361, 46,123, 249,298 and 968,608 shares, respectively, that such person
or group has the right to acquire within 60 days of January 31, 2000 through
the exercise of stock options. Shares beneficially owned by Mr.
Melas-Kyriazi and all directors and current executive officers as a group
include 1,071 shares allocated to Mr. Melas-Kyriazi's account maintained
pursuant to Thermo Electron's ESOP. Shares beneficially owned by Mr. Crisp
and all directors and current executive officers as a group include 49,277
shares allocated through January 1, 2000 to Mr. Crisp's account maintained
pursuant to Thermo Electron's deferred compensation plan for directors. No
director or current executive officer beneficially owned more than 1% of the
Thermo Electron common stock outstanding as of January 31, 2000; all
directors and current executive officers as a group beneficially owned less
than 1% of the Thermo Electron common stock outstanding as of such date.
A-8
<PAGE> 81
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<PAGE> 82
ANNEX B
SEC. 82. MERGER OF SUBSIDIARY INTO PARENT CORPORATION
(e) If all the stock of a subsidiary Massachusetts corporation party to a
merger effected under this section is not owned by the parent corporation
immediately prior to the merger, any stockholder in such subsidiary
Massachusetts corporation (but no stockholder in a parent Massachusetts
corporation) who objects to such merger may demand payment for his stock from
the parent corporation and an appraisal thereof. Within ten days after the
effective date of the merger the parent corporation shall send written notice by
registered or certified mail to each stockholder of such subsidiary
Massachusetts corporation at his last known address as it appears in the records
of such subsidiary corporation, stating:
1. The date upon which such articles were filed and the effective date of
the merger.
2. The terms and conditions of the merger.
3. The right of any stockholder of such subsidiary Massachusetts
corporation who objects to the merger to demand in writing from the parent
corporation within twenty days after the mailing of such notice payment for his
stock and an appraisal thereof.
If any such stockholder shall demand in writing from the parent corporation
within twenty days after the mailing of such notice payment for his stock and an
appraisal thereof, such stockholder and the parent corporation shall thereafter
have the rights and duties and follow the procedures set forth in sections
eighty-nine to ninety-eight, inclusive.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sections 37, 38;
St. 1980, c. 365, sec. 3.
SEC. 86. SECTIONS APPLICABLE TO APPRAISAL; PREREQUISITES
If a corporation proposes to take a corporate action as to which any
section of this chapter provides that a stockholder who objects to such action
shall have the right to demand payment for his shares and an appraisal thereof,
sections eighty-seven to ninety-eight, inclusive, shall apply except as
otherwise specifically provided in any section of this chapter. Except as
provided in sections eighty-two and eighty-three, no stockholder shall have such
right unless (1) he files with the corporation before the taking of the vote of
the shareholders on such corporate action, written objection to the proposed
action stating that he intends to demand payment for his shares if the action is
taken and (2) his shares are not voted in favor of the proposed action.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 40; St.
1973, c. 749, sec. 1.
SEC. 87. STATEMENT OF RIGHTS OF OBJECTING STOCKHOLDERS IN NOTICE OF MEETING;
FORM
The notice of the meeting of stockholders at which the approval of such
proposed action is to be considered shall contain a statement of the rights of
objecting stockholders. The giving of such notice shall not be deemed to create
any rights in any stockholder receiving the same to demand payment for his
stock, and the directors may authorize the inclusion in any such notice of a
statement of opinion by the management as to the existence or non-existence of
the right of the stockholders to demand payment for their stock on account of
the proposed corporate action. The notice may be in such form as the directors
or officers calling the meeting deem advisable, but the following form of notice
shall be sufficient to comply with this section:
"If the action proposed is approved by the stockholders at the meeting
and effected by the corporation, any stockholder (1) who files with the
corporation before the taking of the vote on the approval of such action,
written objection to the proposed action stating that he intends to demand
payment for his shares if the action is taken and (2) whose shares are not
voted in favor of such action has or may have the right to demand in
writing from the corporation (or, in the case of a consolidation or merger,
the name of the resulting or surviving corporation shall be inserted),
within twenty days after the date of mailing to him of notice in writing
that the corporate action has become effective, payment for his shares and
an appraisal of the value thereof. Such corporation and any such
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<PAGE> 83
stockholder shall in such cases have the rights and duties and shall follow
the procedure set forth in sections 88 to 98, inclusive, of chapter 156B of
the General Laws of Massachusetts."
Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 2.
SEC. 88. NOTICE OF EFFECTIVENESS OF ACTION OBJECTED TO
The corporation taking such action, or in the case of a merger or
consolidation the surviving or resulting corporation, shall, within ten days
after the date on which such corporate action became effective, notify each
stockholder who filed a written objection meeting the requirements of section
eighty-six and whose shares were not voted in favor of the approval of such
action, that the action approved at the meeting of the corporation of which he
is a stockholder has become effective. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock. The notice shall be sent by registered or certified mail,
addressed to the stockholder at his last known address as it appears in the
records of the corporation.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 3.
SEC. 89. DEMAND FOR PAYMENT; TIME FOR PAYMENT
If within twenty days after the date of mailing of a notice under
subsection (e) of section eighty-two, subsection (f) of section eighty-three, or
section eighty-eight, any stockholder to whom the corporation was required to
give such notice shall demand in writing from the corporation taking such
action, or in the case of a consolidation or merger from the resulting or
surviving corporation, payment for his stock, the corporation upon which such
demand is made shall pay to him the fair value of his stock within thirty days
after the expiration of the period during which such demand may be made.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 4.
SEC. 90. DEMAND FOR DETERMINATION OF VALUE; BILL IN EQUITY; VENUE
If during the period of thirty days provided for in section eighty-nine the
corporation upon which such demand is made and any such objecting stockholder
fail to agree as to the value of such stock, such corporation or any such
stockholder may within four months after the expiration of such thirty-day
period demand a determination of the value of the stock of all such objecting
stockholders by a bill in equity filed in the superior court in the county where
the corporation in which such objecting stockholder held stock had or has its
principal office in the commonwealth.
Added by St. 1964, c. 723, sec. 1.
SEC. 91. PARTIES TO SUIT TO DETERMINE VALUE; SERVICE
If the bill is filed by the corporation, it shall name as parties
respondent all stockholders who have demanded payment for their shares and with
whom the corporation has not reached agreement as to the value thereof. If the
bill is filed by a stockholder, he shall bring the bill in his own behalf and in
behalf of all other stockholders who have demanded payment for their shares and
with whom the corporation has not reached agreement as to the value thereof, and
service of the bill shall be made upon the corporation by subpoena with a copy
of the bill annexed. The corporation shall file with its answer a duly verified
list of all such other stockholders, and such stockholders shall thereupon be
deemed to have been added as parties to the bill. The corporation shall give
notice in such form and returnable on such date as the court shall order to each
stockholder party to the bill by registered or certified mail, addressed to the
last known address of such stockholder as shown in the records of the
corporation, and the court may order such additional notice by publication or
otherwise as it deems advisable. Each stockholder who makes demand as provided
in section eighty-nine shall be deemed to have consented to the provisions of
this section relating to notice, and the giving of notice by the corporation to
any such stockholder in compliance with the order of the court shall be a
sufficient service of process on him. Failure to give notice to any stockholder
making demand shall not invalidate the proceedings as to other stockholders to
whom notice was properly given, and the court may at any time before the entry
of a final decree make supplementary orders of notice.
Added by St. 1964, c. 723, sec. 1.
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SEC. 92. DECREE DETERMINING VALUE AND ORDERING PAYMENT; VALUATION DATE
After hearing the court shall enter a decree determining the fair value of
the stock of those stockholders who have become entitled to the valuation of and
payment for their shares, and shall order the corporation to make payment of
such value, together with interest, if any, as hereinafter provided, to the
stockholders entitled thereto upon the transfer by them to the corporation of
the certificates representing such stock if certificated or, if uncertificated,
upon receipt of an instruction transferring such stock to the corporation. For
this purpose, the value of the shares shall be determined as of the day
preceding the date of the vote approving the proposed corporate action and shall
be exclusive of any element of value arising from the expectation or
accomplishment of the proposed corporate action.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1983, c. 522, sec. 22.
SEC. 93. REFERENCE TO SPECIAL MASTER
The court in its discretion may refer the bill or any question arising
thereunder to a special master to hear the parties, make findings and report the
same to the court, all in accordance with the usual practice in suits in equity
in the superior court.
Added by St. 1964, c. 723, sec. 1.
SEC. 94. NOTATION ON STOCK CERTIFICATES OF PENDENCY OF BILL
On motion the court may order stockholder parties to the bill to submit
their certificates of stock to the corporation for the notation thereon of the
pendency of the bill and may order the corporation to note such pendency in its
records with respect to any uncertificated shares held by such stockholder
parties, and may on motion dismiss the bill as to any stockholder who fails to
comply with such order.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1983, c. 522, sec. 23.
SEC. 95. COSTS; INTEREST
The costs of the bill, including the reasonable compensation and expenses
of any master appointed by the court, but exclusive of fees of counsel or of
experts retained by any party, shall be determined by the court and taxed upon
the parties to the bill, or any of them, in such manner as appears to be
equitable, except that all costs of giving notice to stockholders as provided in
this chapter shall be paid by the corporation. Interest shall be paid upon any
award from the date of the vote approving the proposed corporate action, and the
court may on application of any interested party determine the amount of
interest to be paid in the case of any stockholder.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 41.
SEC. 96. DIVIDENDS AND VOTING RIGHTS AFTER DEMAND FOR PAYMENT
Any stockholder who has demanded payment for his stock as provided in this
chapter shall not thereafter be entitled to notice of any meeting of
stockholders or to vote such stock for any purpose and shall not be entitled to
the payment of dividends or other distribution on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the date of the vote approving the proposed corporate action) unless:
(1) A bill shall not be filed within the time provided in section ninety;
(2) A bill, if filed, shall be dismissed as to such stockholder; or
(3) Such stockholder shall with the written approval of the corporation, or
in the case of a consolidation or merger, the resulting or surviving
corporation, deliver to it a written withdrawal of his objections to
and an acceptance of such corporate action.
Notwithstanding the provisions of clauses (1) to (3), inclusive, said
stockholder shall have only the rights of a stockholder who did not so demand
payment for his stock as provided in this chapter.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1982, c. 149.
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<PAGE> 85
The shares of the corporation paid for by the corporation pursuant to the
provisions of this chapter shall have the status of treasury stock, or in the
case of consolidation or merger the shares or the securities of the resulting or
surviving corporation into which the shares of such objecting stockholder would
have been converted had he not objected to such consolidation or merger shall
have the status of treasury stock or securities.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 42.
SEC. 98. EXCLUSIVE REMEDY; EXCEPTION
The enforcement by a stockholder of his right to receive payment for his
shares in the manner provided in this chapter shall be an exclusive remedy
except that this chapter shall not exclude the right of such stockholder to
bring or maintain an appropriate proceeding to obtain relief on the ground that
such corporate action will be or is illegal or fraudulent as to him.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 43.
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<PAGE> 87
You or your broker, dealer, commercial bank, trust company or other nominee
should deliver your letter of transmittal, certificates for Thermedics shares
and any other required documents to the depositary at one of its address set
forth below.
The Depositary for the exchange offer is:
EQUISERVE, L.P.
<TABLE>
<S> <C> <C>
By First Class Mail: By Hand: By Overnight, Certified or Express
Mail:
EquiServe, L.P. Securities Transfer & Reporting
Attn: Corporate Reorganization Services, Inc. EquiServe, L.P.
P.O. Box 8029 c/o EquiServe, L.P. Attn: Corporate Reorganization
Boston, MA 02266-8029 100 Williams Street/Galleria 150 Royall Street
New York, NY 10038 Canton, MA 02021
For Information Call: By Facsimile Transmission: For Confirmation Call:
(781) 575-3120
(781) 575-2233/2232 (781) 575-3417
(Valid for Book Entry
Accounts Only)
</TABLE>
You should direct any questions or requests for assistance or additional
copies of the prospectus, the letter of transmittal and the notice of guaranteed
delivery to the Information Agent at its telephone numbers and location listed
below. You may also contact your local broker, commercial bank, trust company or
nominee for assistance concerning the exchange offer.
The Information Agent for the exchange offer is:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, NY 10005
Bankers and Brokers Call Collect (212) 269-5550
All Others Call Toll-Free (800) 290-6433
<PAGE> 88
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law and Thermo Electron's Certificate of
Incorporation and Bylaws limit the monetary liability of directors to Thermo
Electron and to its stockholders and provide for indemnification of Thermo
Electron's officers and directors for liabilities and expenses that they may
incur in such capacities. In general, officers and directors are indemnified
with respect to actions taken in good faith in a manner reasonably believed to
be in, or not opposed to, the best interests of Thermo Electron and, with
respect to any criminal action or proceeding, actions that the indemnitee had no
reasonable cause to believe were unlawful. Thermo Electron also has
indemnification agreements with its directors and officers that provide for the
maximum indemnification allowed by law.
Thermo Electron has an insurance policy which insures its directors and
officers against those liabilities set forth in the insurance policy which might
be incurred in connection with the performance of their duties.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed herewith or incorporated herein by
reference:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
3.1 Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 1 to the
Registrant's Amendment No. 3 to Registration Statement on
Form 8-A/A filed on September 9, 1999 (SEC File No.
1-8002)).
3.2 Bylaws of the Registrant (incorporated by reference to
Exhibit 3 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended July 3, 1999 (SEC File No. 1-8002)).
4.1 Reference is made to Exhibits 3.1 and 3.2 above.
4.2 Fiscal Agency Agreement dated as of January 3, 1996, between
the Registrant and Chemical Bank pertaining to the
Registrant's 4 1/4% Subordinated Convertible Debentures due
2003 (incorporated by reference to Exhibit 4.1 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 30, 1995 (SEC File No. 1-8002)). The
Registrant agrees, pursuant to Item 601(b)(4)(iii)(A) of
Regulation S-K, to furnish to the Commission upon request, a
copy of each instrument with respect to other long-term debt
of the Registrant or its consolidated subsidiaries.
4.3 Rights Agreement, dated as of January 19, 1996, between the
Registrant and The First National Bank of Boston, as Rights
Agent, which includes as Exhibit A the Form of Certificate
of Designations, as Exhibit B the Form of Rights Certificate
and as Exhibit C the Summary of Rights to Purchase Preferred
Stock (incorporated by reference to Exhibit 1 to the
Registrant's Registration Statement on Form 8-A filed on
January 26, 1996, as amended by Amendment No. 1 to
Registration Statement on Form 8-A/A filed on May 30, 1997
(SEC File No. 1-8002)).
4.4 Amendment No. 1 to Rights Agreement, dated as of June 11,
1999, between the Registrant and BankBoston, N.A. (formerly,
The First National Bank of Boston), as Rights Agent, which
includes as Exhibit B the amended and restated Form of
Rights Certificate and as Exhibit C the amended and restated
Summary of Rights to Purchase Preferred Stock (incorporated
by reference to Exhibit 2 to the Registrant's Amendment No.
2 to Registration Statement on Form 8-A/A filed on June 21,
1999 (SEC File No. 1-8002)).
</TABLE>
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<PAGE> 89
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
4.5 Indenture dated as of October 29, 1998, by and between the
Registrant and Bankers Trust Company, as Trustee, relating
to the issuance of senior debt securities by the Registrant
(incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated October 29,
1998, filed with the SEC on October 30, 1998 (SEC File No.
1-8002)).
4.6 First Supplemental Indenture dated as of October 29, 1998,
by and between the Registrant and Bankers Trust Company, as
Trustee, relating to the issuance by the Registrant of
$150,000,000 aggregate principal amount of its 7.625% Notes
due 2008 (incorporated by reference to Exhibit 4.2 to the
Registrant's Current Report on Form 8-K dated October 29,
1998, filed with the SEC on October 30, 1998 (SEC File No.
1-8002)).
5.1* Opinion and consent of Seth H. Hoogasian, Esq. as to the
validity of the securities being issued.
8.1* Opinion and consent of Hale and Dorr LLP as to the material
United States federal income tax consequences of the
exchange offer and the merger.
10.1 Form of Indemnification Agreement between the Registrant and
the directors and officers of its majority-owned
subsidiaries (filed as Exhibit 10.1 to the Registrant's
Registration Statement on Form S-4 (Reg. No. 333-90661) and
incorporated herein by reference).
10.2 Form of Amended and Restated Indemnification Agreement
between the Registrant and its officers and directors (filed
as Exhibit 10.2 to the Registrant's Registration Statement
on Form S-4 (Reg. No. 333-90661) and incorporated herein by
reference).
12.1* Computation of Registrant's ratio of earnings to fixed
charges.
12.2* Computation of Thermedics' ratio of earnings to fixed
charges.
21.1 Subsidiaries of the Registrant (incorporated by reference to
Exhibit 21.1 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended January 1, 2000 (SEC File No.
1-8002)).
23.1 Consent of Arthur Andersen LLP, independent accountants to
the Registrant.
23.2 Consent of Arthur Andersen LLP, independent accountants to
Thermedics Inc.
23.3* Consent of Seth H. Hoogasian, Esq. (included in Exhibit 5.1
of this Registration Statement)
23.4* Consent of Hale and Dorr LLP (included in Exhibit 8.1 of
this Registration Statement).
24.1* Powers of Attorney (included in the signature pages of this
Registration Statement as originally filed).
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Broker Dealer Letter
99.4* Form of Letter to Clients
99.5* Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9
</TABLE>
---------------
* Previously filed.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof;
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<PAGE> 90
(2) that before any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form;
(3) that every prospectus (i) that is filed pursuant to paragraph (2)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(4) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means,
including information contained in documents filed after the effective date
of this registration statement through the date of responding to such
request; and
(5) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in this registration statement
when it became effective.
Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 20 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. If a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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<PAGE> 91
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Waltham, Commonwealth of
Massachusetts, on this fourteenth day of June, 2000.
THERMO ELECTRON CORPORATION
By: /s/ RICHARD F. SYRON
------------------------------------
Richard F. Syron
President, Chief
Executive Officer and
Chairman of the Board
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ RICHARD F. SYRON President, Chief Executive June 14, 2000
--------------------------------------------------- Officer and Chairman of the
Richard F. Syron Board (Principal Executive
Officer)
/s/ THEO MELAS-KYRIAZI Vice President and Chief June 14, 2000
--------------------------------------------------- Financial Officer (Principal
Theo Melas-Kyriazi Financial Officer and
Principal Accounting Officer)
* Director June 14, 2000
---------------------------------------------------
Samuel W. Bodman
* Director June 14, 2000
---------------------------------------------------
Peter O. Crisp
* Director June 14, 2000
---------------------------------------------------
Elias P. Gyftopoulos
* Director June 14, 2000
---------------------------------------------------
Frank Jungers
Director
---------------------------------------------------
Jim P. Manzi
* Director June 14, 2000
---------------------------------------------------
Robert A. McCabe
* Director June 14, 2000
---------------------------------------------------
Hutham S. Olayan
</TABLE>
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<PAGE> 92
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director June 14, 2000
---------------------------------------------------
Robert W. O'Leary
* By /s/ THEO MELAS-KYRIAZI
--------------------------------------------------
Theo Melas-Kyriazi
Attorney-in-fact
</TABLE>
II-5
