<Page>
August 20, 2001
- --------------------------------------------------------------------------------
THERMO
ELECTRON CORPORATION
DISCUSSION ON [SPECTRA LOGO] SPECTRA-PHYSICS
[JPMORGAN LOGO]
<Page>
This presentation was prepared exclusively for the benefit and internal use
of Thermo Electron Corporation in order to indicate, on a preliminary basis,
the feasibility of a possible transaction or transactions and does not carry
any right of publication or disclosure to any other party. This presentation
is incomplete without reference to, and should be viewed solely in
conjunction with, the oral briefing provided by JPMorgan. Neither this
presentation nor any of its contents may be used for any other purpose
without the prior written consent of JPMorgan.
The information in this presentation is based upon management forecasts and
reflects prevailing conditions and our views as of this date, all of which
are accordingly subject to change. In preparing this presentation, we have
relied upon and assumed, without independent verification, the accuracy and
completeness of all information available from public sources or which was
provided to us by or on behalf of Thermo Electron Corporation or which was
otherwise reviewed by us. In addition, our analyses are not and do not
purport to be appraisals of the assets, stock, or business of Thermo Electron
Corporation.
JPMorgan is a marketing name for investment banking businesses of JPMorgan
Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan
arranging, financial advisory and other investment banking activities are
performed by JPMorgan Securities Inc., the JPMorgan division of Chase
Securities Inc. and their securities affiliates, and lending, derivatives and
other commercial banking activities are performed by Morgan Guaranty Trust
Company of New York, The Chase Manhattan Bank and their banking affiliates.
JPMorgan deal team members may be employees of any of the foregoing entities.
<Page>
AGENDA
===============================================================================
- -------------------------------------------------------------------------------
o OVERVIEW
- -------------------------------------------------------------------------------
o Equity market overview
o Valuation analysis
o Minority spin-in analysis
o Shareholder considerations
1
<Page>
TIMELINE
===============================================================================
<Table>
<Caption>
KEY DATES KEY EVENTS
------------------ -------------------------------------------------------------------------------------------
1997 Oct-1997 o Laser and Optics Group of Spectra-Physics AB prepared for IPO
Dec-1997 o Public offering of Laser and Optics Group (renamed
Spectra-Physics Lasers, Inc.) completed with 2.4MM shares at
$10 per share
Jan-1998 o Over-allotment of 360,000 shares sold
o Spectra-Physics AB indirectly owns 80% of SPLI stock
Feb-1999 o Thermo Instrument Systems acquired Spectra-Physics AB and indirect
ownership of 79% interest in SPLI
Jan-2000 o Thermo Instrument Systems spun-in by Thermo Electron Corporation
Today o Thermo Electron owns 13.3MM shares (79.8%) of SPLI through Spectra-Physics
AB, a wholly-owned subsidiary of Thermo Electron
2002 Feb-2002 o Delaware 203 restriction expires
------------------ -------------------------------------------------------------------------------------------
</Table>
2
<Page>
SPIN-IN PUBLIC MINORITY: PROS AND CONS
===============================================================================
Pros
o Increase investment in optical segment
- 100% ownership and complete control of SPLI
- Retain high-growth business within Thermo portfolio
o Eliminate costs of public minority
o Opportunity to combine Thermo's optical businesses with SPLI
o Further clarifying of TMO story
Cons
o Significant employee retention issues
- Difficult to retain scarce optical engineering talent without
focused currency
o Lack of separate public currency to grow the business through
acquisition
o Tender offer may not be successful
o Could be slightly dilutive to Thermo's earnings in the absence of
synergies
3
<Page>
SUMMARY OF ILLUSTRATIVE TRANSACTION
===============================================================================
PRICES DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
Acquirer Thermo Electron Corporation
Target Spectra-Physics
Consideration Cash
Minority stake purchased 20.2% basic
26.3% fully diluted
<Table>
<Caption>
ILLUSTRATIVE PURCHASE PRICES
PURCHASE PRICE (PER SHARE) $15.00 $17.50 $20.00
- -------------------------------------------- ------------------ ------------------ --------------
Implied transaction value(1) $287 $333 $378
Implied equity value(1) 259 305 350
Equity value of minority stake(2) 59 71 84
- -------------------------------------------- ------------------ ------------------ --------------
</Table>
(1) Based on 16.7MM common shares, 1.5 MM options with an average strike
price of $9.19; net debt of $28MM as of 6/30/01
(2) Fully diluted value net of option proceeds, based on 13.3MM TMO shares
4
<Page>
AGENDA
===============================================================================
o Overview
o EQUITY MARKET OVERVIEW
o Valuation analysis
o Minority spin-in analysis
o Shareholder considerations
5
<Page>
PUBLIC MARKET OVERVIEW
===============================================================================
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
Public market overview
Stock price(1) $17.63
52-week high $72.25
52-week low $13.25
Shares outstanding 16.7
Options 1.5
Average strike price $9.19
Fully diluted shares 17.4
Market capitalization $307
Net debt(2) 28
-----------
Firm value $335
</Table>
<Table>
<Caption>
Transaction multiples
2001E(3) 2002E(3)
- ---------------------------------------------------------------------------------------------------------------------
Revenues $223 $245
EBITDA 15 25
EBIT 1 8
FV/revenues 1.5x 1.4x
FV/EBITDA 22.8 13.2
FV/EBIT NM 39.9
P/E NM 50.8
</Table>
(1) As of close 8/13/01
(2) As of 6/30/01
(3) Stand-alone case based on TMO management projections
Note: Totals may not sum due to rounding
6
<Page>
ANALYSIS AT VARIOUS PRICES
===============================================================================
PRICES DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS EXCEPT PER SHARE PRICES
<Table>
<Caption>
Current(1) Range of prices
Price per share $17.63 $15.00 $17.50 $20.00
Equity value $307 $259 $305 $350
Firm value 335 287 333 378
---------- ---------- ---------- ----------
Minority stake value $72 $59 $71 $84
IMPLIED MULTIPLES
FV/2001 sales 1.5x 1.3x 1.5x 1.7x
FV/2002 sales 1.4 1.2 1.4 1.5
FV/2001 EBITDA 22.8x 19.5x 22.6x 25.7x
FV/2002 EBITDA 13.2 11.3 13.1 14.9
FV/2001 EBIT NM NM NM NM
FV/2002 EBIT 39.9 34.2 39.6 45.0
P/E 2001 NM NM NM NM
P/E 2002 50.8 43.3 50.5 57.7
</Table>
<Table>
<Caption>
Key financials Net debt(2) Shares outstanding
2001E(3) 2002E(3)
---------------------
Total debt $37 Shares outstanding 16.7
Sales $223 $245 Cash 9 Options 1.5
EBITDA 15 25 ----------- Average strike $9.19
EBIT 1 8 Net debt $28 Fully diluted shares 17.4
Cash net income 1 6
Cash EPS $0.08 $0.35
</Table>
(1) Price as of 8/13/01
(2) Net Debt as of 6/30/01
(3) Stand-alone case based on TMO management projections
7
<Page>
RELATIVE SHARE PRICE PERFORMANCE
===============================================================================
INDEXED TO SPLI SHARE PRICE
[Line Chart]
<Table>
<Caption>
Optical Industrial
% return SPLI peers(1) laser peers(2) NASDAQ
- -------------------- ------------ ----------- ------------- ----------
LTM (75%) (77%) (75%) (48%)
Last 3 months (3%) (50%) (38%) (8%)
Last 6 months (35%) (72%) (56%) (21%)
- -------------------- ------------ ----------- --------------- ------------
</Table>
(1) Optical peers include: Avanex, Bookham, Corning, Finisar, JDS Uniphase,
Luminent, New Focus, OCP and Oplink
(2) Industrial laser fees include: Coherent, GSI Lumonics and Newport
8
<Page>
RECENT SHARE PRICE PERFORMANCE
===============================================================================
APRIL 2001 - PRESENT
[CHART]
Source:IDD
9
<Page>
COMPARABLE SHARE PERFORMANCE
===============================================================================
Relative returns(1)
1 month 3 month 6 month 1 year 2 year Since IPO
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SPLI (25%) (3%) (35%) (75%) 119% 44%
- ------------------------------------------------------------------------------------------------------------------------------------
EMERGING OPTICAL COMPONENTS
Alliance Fiber Optic Products (41%) (65%) (75%) NM NM (76%)
Avanex Corp. 4% (54%) (80%) (94%) NM (96%)
Bookham Technology PLC 9% (51%) (81%) (96%) NM (95%)
Luminent Inc. (19%) (44%) (71%) NM NM (78%)
New Focus Inc. (22%) (66%) (87%) (96%) NM (90%)
Oplink Communications Inc. (39%) (65%) (84%) NM NM (94%)
Optical Communication Prods. (30%) (45%) (51%) NM NM (63%)
Stratos Lightwave Inc. (37%) (42%) (48%) (84%) NM (84%)
MEDIAN (26%) (53%) (78%) (95%) NM (87%)
ESTABLISHED OPTICAL COMPONENTS
Alcatel Optronics (5%) (66%) (82%) NM NM (88%)
Corning Inc. 15% (29%) (61%) (82%) (26%) NM
Finisar Corp. (27%) (53%) (56%) (63%) NM (66%)
JDS Uniphase (19%) (59%) (78%) (93%) (59%) NM
MEDIAN (12%) (56%) (70%) (82%) (42%) (77%)
INDUSTRIAL LASER
Coherent Inc. 0% (8%) (20%) (47%) 89% NM
GSI Lumonics Inc. 0% (13%) (25%) (63%) 91% 57%
Newport Corp. (9%) (50%) (67%) (81%) 363% NM
MEDIAN 0% (13%) (25%) (63%) 91% 57%
- ------------------------------------------------------------------------------------------------------------------------------------
MEDIAN (19%) (51%) (71%) (83%) 89% (84%)
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) As of close 6/10/01
10
<Page>
PREMIA ANALYSIS AT VARIOUS ILLUSTRATIVE PRICES
===============================================================================
PRICES DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
<Table>
<Caption>
Illustrative purchase prices
-----------------------------------------------------------------------------------------------------------
SPLI prices $15.00 $17.50 $20.00
-----------------------------------------------------------------------------------------------------------
1-day prior(1) $18.00 (17%) (3%) 11%
1-week prior $18.46 (19%) (5%) 8%
1-month prior $24.09 (38%) (27%) (17%)
3-months prior $20.90 (28%) (16%) (4%)
-----------------
</Table>
(1) Source: IDD
Note: As of close 8/13/01
11
<Page>
HISTORICAL SHARES TRADED ANALYSIS
===============================================================================
SHARES TRADED PERFORMANCE
ONE-YEAR
<Table>
Avg. daily vol. 20.8Ths
Total shares traded 5.3MM
% of total(1) 16%
% of float(2) 78%
</Table>
[CHART]
<Table>
Price range $5-21 $21-37 $37-53 $53-69 $69-85 $85-101
Volume in
range (MM) 1.4 1.7 0.9 0.8 0.3 0.0
Cumulative
shares traded 27.5% 59.7% 77.7% 93.9% 100.0% 100.0%
</Table>
Three-year
<Table>
Avg. daily vol. 41.4Ths
Total shares traded 31.4MM
% of total(1) 94%
% of float(2) 467%
</Table>
[CHART]
<Table>
Price range $5-21 $21-37 $37-53 $53-69 $69-85 $85-101
Volume in
range (MM) 8.7 5.4 8.6 2.7 3.0 3.1
Cumulative
shares traded 27.6% 44.7% 71.9% 80.6% 90.2% 100.0%
</Table>
(1) Based on 16.7 million common shares outstanding
(2) Based on 16.7 million common shares outstanding less 13.3 million Thermo
Electron shares held
Note: As of 8/10/01
Source: Financial Database Services
12
<Page>
VOLUME TRADING ANALYSIS
===============================================================================
LIQUIDITY HAS DECREASED AS SHARE PRICE HAS TRENDED TO CURRENT TRADING LEVEL
DAILY AVERAGE TRADING VOLUME ('000)
<Table>
High $12.00 $10.88 $12.88 $28.00 $94.88 $72.88 $100.00 $57.00 $41.25 $24.30 $25.00
Low $7.00 $6.69 $7.63 $8.31 $31.38 $36.00 $46.69 $19.81 $15.00 $13.25 $17.63
</Table>
[CHART]
Source: Bloomberg
13
<Page>
AGENDA
==============================================================================
o Overview
o Equity market overview
o VALUATION ANALYSIS
o Minority spin-in analysis
o Shareholder considerations
14
<Page>
SUMMARY VALUATION
================================================================================
PRICES DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
SUMMARY VALUATION
$ per share
Current price
8/13/01
$17.63
Discounted cash flow [CHART]
- - Stand-alone case
- - Spin-in case
Trading multiples
52-week range
15
<Page>
SUMMARY FINANCIALS - STAND-ALONE CASE
================================================================================
$ MILLIONS
<Table>
<Caption>
SUMMARY FINANCIALS 2001E 2002E 2003E 2004E 2005E 2006E
REVENUE
Base $207 $228 $251 $276 $303 $333
% GROWTH 10% 10% 10% 10% 10%
Telecom 16 18 19 21 23 26
% GROWTH 10% 10% 10% 10% 10%
Consolidated $223 $245 $270 $297 $327 $359
% GROWTH 10% 10% 10% 10% 10%
EBIT
Consolidated $1 $8 $16 $23 $29 $35
% MARGIN 0% 4% 6% 8% 9% 10%
EBITDA
Consolidated $15 $25 $33 $41 $48 $55
% MARGIN 7% 10% 12% 14% 15% 15%
</Table>
Note: Based on TMO management projections
16
<Page>
DISCOUNTED CASH FLOW VALUATION SUMMARY -
STAND-ALONE CASE
================================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
CAGR/
DISCOUNTED CASH FLOW VALUATION 2002E 2003E 2004E 2005E 2006E AVERAGE
Sales $245 $270 $297 $327 $359 10%
% GROWTH 10% 10% 10% 10% 10% 10%
EBITDA 25 33 41 48 55 21%
% MARGIN 10% 12% 14% 15% 15% 13%
EBIT 8 16 23 29 35 43%
% MARGIN 3% 6% 8% 9% 10% 7%
EBIAT 4 9 13 16 20 47%
+ Depreciation and amortization 17 18 18 19 20
- - Increase in NWI 9 10 11 12 13
- - Capital expenditures 12 14 15 17 18
------------------------------------------------------------------------
FCF $1 $3 $6 $8 $10
</Table>
FIRM VALUE
<Table>
<Caption>
DISCOUNT EBITDA MULTIPLE
RATE
7.5x 8.0x 8.5x
-------------------------------
10.0% $275 $292 $309
11.0% 263 280 296
12.0% 252 268 283
</Table>
EQUITY VALUE(1)
<Table>
<Caption>
DISCOUNT EBITDA MULTIPLE
RATE
7.5x 8.0x 8.5x
-------------------------------
10.0% $14.35 $15.29 $16.23
11.0% 13.70 14.59 15.49
12.0% 13.08 13.94 14.79
</Table>
(1) Assumes net debt of $28 million as of 6/30/01; 16.7MM common shares,
1.5MM options with an average strike price of $9.19
Note: Based on TMO management projections; valuation as of January 1, 2002
17
<Page>
SENSITIVITY ANALYSIS - STAND-ALONE CASE
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
FIRM VALUE ($ MILLIONS)
<Table>
<Caption>
SALES GROWTH AVERAGE EBITDA MARGIN FOR THE PERIOD 2002 - 2006
- ------------------- ----------------- -------------------------------------------------------------------------------------
5-YR AVG. CAGR 10% 11% 12% 13% 14% 15% 16%
- ------------------- ----------------- --------- -------- ------------------ ---------- -------------- ------ --------------
$273 8% $190 $211 $233 $254 $275 $297 $318
----------
300 10% 208 232 256 280 304 328 351
----------
328 12% 228 254 281 308 335 361 388
</Table>
EQUITY VALUE ($ PER SHARE)
<Table>
<Caption>
SALES GROWTH AVERAGE EBITDA MARGIN FOR THE PERIOD 2002-2006
- ------------------- ----------------- -------------------------------------------------------------------------------------------
5-YR. AVG. CAGR 10% 11% 12% 13% 14% 15% 16%
- ------------------- ----------------- -------- -------- ----------------- ----------- ------------- -------------- --------------
$273 8% $9.67 $10.84 $12.01 $13.18 $14.36 $15.53 $16.70
-----------
300 10% 10.65 11.97 13.28 14.59 15.91 17.22 18.54
-----------
328 12% 11.73 13.20 14.67 16.14 17.61 19.08 20.55
</Table>
Note: Based on TMO management projections; discount rate of 11% and terminal
EBITDA multiple of 8.0x, net debt of $28 million as of 6/30/01; 16.7MM
common shares, 1.5MM options with an average strike price of $9.19
18
<Page>
SUMMARY FINANCIALS - SPIN-IN CASE
================================================================================
$ MILLIONS
<Table>
<Caption>
SUMMARY FINANCIALS 2001E 2002E 2003E 2004E 2005E 2006E
Revenue
Base $207 $228 $251 $276 $303 $333
% GROWTH 10% 10% 10% 10% 10%
Telecom 16 18 19 21 23 26
% GROWTH 10% 10% 10% 10% 10%
Consolidated $223 $245 $270 $297 $327 $359
% GROWTH 10% 10% 10% 10% 10%
EBIT
Consolidated $1 $15 $23 $31 $37 $44
% MARGIN 0% 7% 9% 11% 12% 13%
EBITDA
Consolidated $15 $32 $41 $49 $56 $64
% MARGIN 7% 13% 15% 16% 17% 18%
</Table>
Note: Based on TMO management projections
19
<Page>
DISCOUNTED CASH FLOW VALUATION SUMMARY -
SPIN-IN CASE
================================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
CAGR/
Discounted cash flow valuation 2002E 2003E 2004E 2005E 2006E average
Sales $245 $270 $297 $327 $359 10%
% GROWTH 10% 10% 10% 10% 10% 10%
EBITDA 32 41 49 56 64 18%
% MARGIN 13% 15% 16% 17% 18% 16%
EBIT 15 23 31 37 44 30%
% MARGIN 6% 9% 10% 11% 12% 10%
EBIAT 8 13 18 21 26 32%
+ Depreciation and amortization 17 18 18 19 20
- - Increase in NWI 2 1 10 11 12
- - Capital expenditures 12 14 15 17 18
--------------------------------------------------------------------
FCF $11 $17 $11 $13 $16
</Table>
<Table>
<Caption>
- ----------------------------------------------
Firm value
- ----------------------------------------------
Discount EBITDA multiple
rate
7.5x 8.0x 8.5x
-------------------------------
10.0% $351 $371 $391
11.0% 337 356 375
12.0% 323 341 359
</Table>
<Table>
<Caption>
- ----------------------------------------------
Equity value(1)
- ----------------------------------------------
Discount EBITDA multiple
rate
7.5x 8.0x 8.5x
-------------------------------
10.0% $18.52 $19.61 $20.70
11.0% 17.74 18.78 19.82
12.0% 16.99 17.99 18.98
</Table>
(1) Assumes net debt of $28 million as of 6/30/01; 16.7MM common shares, 1.5MM
options with an average strike price of $9.19
Note: Based on TMO management projections; valuation as of January 1, 2002
20
<Page>
IMPLIED VALUE TO THERMO ELECTRON
================================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
Stand-alone case Spin-in case
Illustrative share price of SPLI(1) $14.59 Illustrative equity value of total SPLI(1) $342
Thermo Electron shares owned 13.3 Minority stake purchase cost(2) ($84)
Value of stake $195 Value of stake $258
Value delta
$64
</Table>
(1) Based on TMO management projections; discount rate of 11% and terminal
EBITDA multiple of 8.0x; net debt of $28 million as of 6/30/01; 16.7MM
common shares, 1.5MM options with an average strike price of $9.19
(2) Based on SPLI share price of $20.00
Note: Totals may not sum due to rounding
21
<Page>
INDUSTRY LASER TRADING COMPARABLES
================================================================================
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
Firm vlue
-----------------------------------------
Revenue EBITDA P/E
----------------------------------------- ---------------------
% 52-wek Market Firm
COMPANY Price(1) high value value 2001E 2002E 2001E 2002E 2001E 2002E
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Spectra-Physics $17.63 24% $307 $335 1.5x 1.4x 22.8x 13.2x NM 50.8x
- ----------------------------------------------------------------------------------------------------------------------------------
Coherent Inc.(2) $35.85 44% $1,046 $871 1.8x 1.6x 13.2x 11.9x 29.6x 28.7x
GSI Lumonics $8.42 29% 344 248 0.9 0.9 9.1x 14.2x 27.2 NM
Newport Corp $21.80 11% 841 584 1.7 1.6 9.2 8.4 20.2 19.5
- ------------------------------------------------------------------------------------------------------------------------------------
MEDIAN 1.7x 1.6x 9.2x 11.9x 27.2x 28.7x
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) As of close 8/13/01
(2) Pro forma for public equity holdings and disposal of Medical segment
Notes: SPLI stand-alone projections based on TMO management projections; all
others based on company filings, equity research and IBES estimates
22
<Page>
TRADING MULTIPLE ANALYSIS
===============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
2001E 2002E
SPLI revenue $223 $245
Selected multiple range 1.25x 1.75x 1.0x 1.5x
Equity value per share(1) $14.54 $20.67 $12.70 $19.45
SPLI EBITDA -- Stand-alone $15 $25
Selected multiple range 9.0x 11.0x 8.0x 10.0x
Equity value per share(1) $6.25 $8.01 $10.39 $13.18
SPLI EBITDA -- Spin-in $32
Selected multiple range 8.0x 10.0x
Equity value per share $13.47 $17.03
SPLI EPS -- Stand-alone $0.35
Selected multiple range NM 20.0x 26.0x
Equity value per share $7.00 $9.02
SPLI EPS -- Spin-in $0.59
Selected multiple range 20.0x 26.0x
Equity value per share $11.80 $15.29
</Table>
(1) Assumes net debt of $28 million; 16.7MM common shares, 1.5MM options with
an average strike price of $9.19
23
<Page>
IMPLIED VALUATION - COHERENT
===============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
Stand-alone case Spin-in case
2001E 2002E 2002E
SPLI revenue $223 $245 $245
Coherent FV/revenue 1.8x 1.6x 1.6x
Implied firm value $412 $393 $393
Implied equity value $398 $379 $379
-------------------------- -------------------------------- -------------------------------
EQUITY VALUE PER SHARE $21.88 $20.84 $20.84
-------------------------- -------------------------------- -------------------------------
SPLI EBITDA $15 $25 $32
Coherent FV/EBITDA 13.2x 11.9x 11.9x
Implied firm value $193 $302 $385
Implied equity value $179 $288 $371
-------------------------- -------------------------------- -------------------------------
EQUITY VALUE PER SHARE $9.86 $15.81 $20.38
-------------------------- -------------------------------- -------------------------------
SPLI EPS $0.35 $0.59
Coherent P/E 28.7x 28.7x
-------------------------- -------------------------------- -------------------------------
EQUITY VALUE PER SHARE NM $9.95 $16.86
-------------------------- -------------------------------- -------------------------------
</Table>
Note: Based on $28MM of net debt, 16.7MM common shares and 1.5MM options with
an average strike price of $9.19; numbers may not total due to rounding
24
<Page>
ILLUSTRATIVE PRO-FORMA ANALYSIS
===============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS
2002 accretion/(dilution) to TMO
<Table>
<Caption>
Stand-alone case
SPLI Purchase price
EPS $15.00 $17.50 $20.00
---------------------------------------------------------
$0.25 (1.0%) (1.2%) (1.4%)
$0.35 (0.2%) (0.4%) (0.5%)
$0.45 0.7% 0.5% 0.4%
Equity value $259 $305 $350
Minority purchase cost 59 71 84
</Table>
<Table>
<Caption>
Spin-off case
Purchase price
$15.00 $17.50 $20.00
---------------------------------------------------------
$0.50 1.2% 1.0% 0.8%
$0.59 1.9% 1.7% 1.6%
$0.70 2.9% 2.7% 2.5%
$259 $305 $350
59 71 84
</Table>
Note: Assumes TMO cash net income of $200MM in 2002, SPLI stand-alone and
spin-off cash EPS of $0.35 and $0.59 in 2002 respectively and 17.4MM
(treasury method) shares in 2002; assumes 40% tax rate and 5% financing
rate; SPLI estimates based on TMO management projections, TMO estimates
based on JPMorgan equity research, assumes 100% cash transaction valued as
of January 1, 2002
25
<Page>
IMPACT OF LITIGATION RISK
===============================================================================
o On June 19, 2000, Rockwell filed complaint for patent infringement
o Rockwell has not sought injunctive relief since patent has already expired
o Trial date set for February 5, 2002
26
<Page>
AGENDA
===============================================================================
o Overview
o Equity market overview
o Valuation analysis
o MINORITY SPIN-IN ANALYSIS
o Shareholder considerations
27
<Page>
PREMIUMS PAID IN PRECEDENT SQUEEZE-OUT TRANSACTIONS
===============================================================================
1988 - present
Premiums paid; medians
% over stock price one week prior to announcement
[CHART]
(1) Data for 1993 not shown - only one transaction was executed at a discount
of 20%
Note: Selected transactions in sample include 150 minority squeeze-out
transactions (owner of 50% or more of a U.S. public company acquires the
remaining shares for total consideration of $50 million or more); January
1988, March 2001
Source: SDC and JPMorgan research
28
<Page>
PREMIA ANALYSIS BY SIZE AND FLOAT
===============================================================================
Premia(1) paid in minority buy-outs since 1988
[CHART]
Buy-outs by size
Premia paid (%)
Buy-outs by float
Premia paid (%)
(1) Premia based on stock price one week prior to announcement
Source: J.P. Morgan M&A Analysis Group, SDC
29
<Page>
AGENDA
===============================================================================
- - Overview
- - Equity market overview
- - Valuation analysis
- - Minority spin-in analysis
- - SHAREHOLDER CONSIDERATIONS
30
<Page>
SHAREHOLDER PROFILE
===============================================================================
Top 10 institutional investors in SPLI
<Table>
<Caption>
Institution Style Share pos % of shares out
- -------------------------------------------------- ------------------------- ------------------------- -------------------------
Taylor Richard K NM 1,100,000 6.6
Kern Capital Management LLC Growth 683,700 4.1
Merrill Lynch & Company Inc. Specialty 500,949 3.0
Dimensional Fund Advisors Inc. Index 211,300 1.3
Pilgrim Baxter & Associates Momentum 205,100 1.2
U.S. Trust Corporation Core Value 116,587 0.7
Vanguard Group, Inc. Index 81,511 0.5
Barclays Global Investors Index 76,589 0.5
John G. Ullman & Associates Inc. Core Value 46,564 0.3
Charles Schwab Investment Management Index 42,200 0.3
Total 3,064,500 18.4
</Table>
Source: Carson Group as of 3/31/01
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