<Page>
November 6, 2001
- --------------------------------------------------------------------------------
THERMO
ELECTRON CORPORATION
Discussion on [SPECTRA LOGO] Spectra-Physics
<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>
RECENT EVENTS
===============================================================================
<Table>
- -------------------
8/21/01 Thermo Electron announces that it plans to take its
Spectra-Physics subsidiary private at a cash price of
$20/share. It expects to initiate a cash offer by the end
of September
- -------------------
- -------------------
9/11/01 World Trade Center and Pentagon terrorist attacks
- -------------------
- -------------------
9/26/01 Thermo Electron announces that it is delaying the
commencement of its cash tender offer for shares of its
subsidiary Spectra-Physics in order to analyze the impact on
Spectra-Physics due to the worsening economic conditions
associated with the recent terrorist attacks
- -------------------
- -------------------
10/31/01 JPMorgan internal Fairness Committee meeting
- -------------------
- -------------------
11/06/01 Thermo Electron Executive Committee of the Board of
Directors meeting
- -------------------
</Table>
1
<Page>
SUMMARY OF ILLUSTRATIVE TRANSACTION
===============================================================================
PRICES DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
Acquirer Thermo Electron Corporation
Target Spectra-Physics
Consideration Cash
Minority stake purchased 20.2% basic
26.8% fully diluted
</Table>
<Table>
<Caption>
ILLUSTRATIVE PURCHASE PRICES
PURCHASE PRICE (PER SHARE) $14.00 $16.00 $18.00
- -----------------------------------------------------------------------------------------------------------------------
Implied transaction value(1) $274 $310 $346
Implied equity value(1) 241 278 314
Equity value of minority stake(2) 54 64 74
</Table>
(1) Based on 16.7MM common shares, 1.5 MM options with an average strike price
of $9.19; net debt of $32MM as of 9/30/01
(2) Fully diluted value net of option proceeds, based on 13.3MM TMO shares
Note: SPLI stand-alone case estimates based on TMO management projections
2
<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 $17.11 $14.00 $16.00 $18.00
Equity value $298 $241 $278 $314
Firm value 330 274 310 346
---------- ---------- ---------- ----------
Minority stake value $70 $54 $64 $74
IMPLIED MULTIPLES
FV/2001 sales 1.5x 1.3x 1.4x 1.6x
FV/2002 sales 1.5 1.3 1.4 1.6
FV/2001 EBITDA 30.9x 25.6x 29.0x 32.4x
FV/2002 EBITDA 15.9 13.2 15.0 16.7
FV/2001 EBIT NM NM NM NM
FV/2002 EBIT 67.1 55.6 63.0 70.4
P/E 2001 NM NM NM NM
P/E 2002 108.2 88.5 101.1 113.8
</Table>
<Table>
<Caption>
Key financials Net debt(2) Shares outstanding
2001E(3) 2002E(3) Total debt $40 Shares outstanding 16.7
--------------------- Cash 7 Options 1.5
Sales $214 $214 ---------- Average strike $9.19
EBITDA 11 21 Net debt $32 Fully diluted shares 17.4
EBIT (2) 5
Cash net income (1) 3
Cash EPS ($0.08) $0.16
</Table>
(1) Price as of 10/29/01
(2) Net debt as of 9/30/01
(3) Stand-alone case based on TMO management projections
3
<Page>
RELATIVE SHARE PRICE PERFORMANCE
===============================================================================
INDEXED TO SPLI SHARE PRICE
<Table>
<Caption>
Optical Industrial
% return SPLI peers(1) laser peers2 NASDAQ
- -------------------- ------------ ----------- --------------- ------------
LTM (50%) (84%) (71%) (47%)
Last 3 months (12%) (44%) (20%) (16%)
Last 6 months (8%) (64%) (45%) (20%)
- -------------------- ------------ ----------- --------------- ------------
</Table>
[LINE GRAPH]
(1) Optical peers include: Avanex, Bookham, Corning, Finisar, JDS Uniphase,
Luminent, New Focus, OCPI and Oplink
(2) Industrial laser pees include: Coherent, GSI Lumonics and Newport
4
<Page>
RECENT SHARE PRICE PERFORMANCE
===============================================================================
AUGUST 2001 - PRESENT
- -------------------------------
CUMULATIVE VOL. (THS)
- -------------------------------
<Table>
<Caption>
DATE SHARES % FLOAT
- -------------------------------
8/21 2,424 72%
9/11 1,124 33%
9/26 550 16%
- -------------------------------
</Table>
[BAR GRAPH]
Source: IDD
5
<Page>
PREMIA ANALYSIS AT VARIOUS ILLUSTRATIVE PRICES
===============================================================================
PRICES DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
<Table>
<Caption>
Illustrative purchase prices
-------------------------------------------------------------------------------------------
SPLI prices $14.00 $16.00 $18.00
---------------------------------------------------------------------------------
1-day prior to offer $13.69 2% 17% 31%
Current $17.11 (18%) (6%) 5%
1-week prior $17.34 (19%) (8%) 4%
9/10/01 $20.70 (32%) (23%) (13%)
------------------------------
</Table>
Note: As of close 10/29/01
Source: IDD
6
<Page>
HISTORICAL SHARES TRADED ANALYSIS
===============================================================================
SHARES TRADED PERFORMANCE
<Table>
<Caption>
-------------------------------- --------------------------------
SINCE 8/20/01 Avg. daily vol. 53.1Ths ONE-YEAR Avg. daily vol. 24.2Ths
Total shares traded 2.4MM Total shares traded 6.0MM
% of total(1) 15% % of total(1) 36%
% of float(2) 72% % of float(2) 178%
-------------------------------- --------------------------------
</Table>
[BAR GRAPHS]
Price range
Volume in range (MM)
Cumulative shares traded
(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 10/29/01
Source: Financial Database Services
7
<Page>
SUMMARY VALUATION
===============================================================================
PRICES DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
<Table>
<Caption>
SUMMARY VALUATION ----------------- ----------------
$ PER SHARE REVISED VALUATION AUGUST VALUATION
----------------- ----------------
Price Price
10/29/01 8/13/01
$17.11 $17.63
----------------- ----------------
</Table>
[CHART]
8
<Page>
SPLI 2001 FORECAST REVISIONS
===============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
STAND-ALONE CASE; $ MILLIONS
<Table>
<Caption>
3 + 9 forecast 6 + 6 forecast 9 + 3 forecast
2001 OP (April 2001) (July 2001) (October 2001) Actual Actual
(November 2000) Cumulative Cumulative Cumulative Cumulative Cumulative
Projection %(DELTA) %(DELTA) %(DELTA) Actual $(DELTA) %(DELTA)
--------------- -------------- -------------- --------------- --------- ----------- ----------
Bookings
Q1 $52 - - - $58 $7 13%
Q2 64 (6%) - - 55 (9) (14%)
Q3 70 0% (23%) - 48 (21) (31%)
Q4 74 14% (6%) (24%) - - -
-----------------------------------------------------------------------------------------------------------------
2001 $260 5% (9%) (16%) - - -
Revenues
Q1 $55 - - - $55 ($1) (1%)
Q2 64 (14%) - - 55 (10) (15%)
Q3 70 (10%) (24%) - 49 (20) (29%)
Q4 74 (3%) (10%) (24%) - - -
-----------------------------------------------------------------------------------------------------------------
2001 $263 (7%) (13%) (18%) - - -
EBITA
Q1 $0 - - - $1 $1 350%
Q2 3 (104%) - - 1 (2) (75%)
Q3 6 (20%) (127%) - (3) (9) (162%)
Q4 8 2% (30%) (101%) - - -
-----------------------------------------------------------------------------------------------------------------
2001 $17 (18%) (65%) (111%) - - -
</Table>
Note: All changes are cumulative from November 2001 operating plan
projections; SPLI stand-alone case estimates based on TMO management
projections
9
<Page>
SPLI ASSUMPTIONS - REVISED STAND-ALONE CASE
===============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS
<Table>
<Caption>
Current forecast 2001E 2002E 2003E 2004E 2005E 2006E
--------------- --------------- ---------------- --------------- --------------- ---------------
Revenues
Base $206 $206 $231 $258 $289 $324
% growth 14% 0% 12% 12% 12% 12%
Telecom 8 8 16 22 31 44
% growth 48% 0% 100% 40% 40% 40%
--------------- --------------- ---------------- --------------- --------------- ---------------
Total $214 $214 $247 $281 $321 $368
% growth 14.9% 0.0% 15.3% 13.8% 14.2% 14.7%
EBIT
Consolidated ($2) $5 $13 $22 $28 $33
% margin (0.9%) 2.3% 5.4% 8.0% 8.6% 9.0%
EBITA
Consolidated ($1) $6 $14 $23 $28 $34
% margin (0.6%) 2.6% 5.7% 8.2% 8.8% 9.2%
EBITDA
Consolidated $11 $21 $30 $40 $46 $52
% margin 5.0% 9.7% 12.1% 14.1% 14.2% 14.1%
</Table>
Note: SPLI estimates based on TMO management projections
10
<Page>
SPLI ASSUMPTIONS - AUGUST STAND-ALONE CASE
===============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS
<Table>
<Caption>
August forecast 2001E 2002E 2003E 2004E 2005E 2006E
-------------- --------------- ---------------- --------------- --------------- ---------------
Revenues
Base $207 $228 $251 $276 $303 $333
% growth 14% 10% 10% 10% 10% 10%
Telecom 16 18 19 21 23 26
% growth 196% 10% 10% 10% 10% 10%
-------------- --------------- ---------------- --------------- --------------- ---------------
Total $223 $245 $270 $297 $327 $359
% growth 19.8% 10.0% 10.0% 10.0% 10.0% 10.0%
EBIT
Consolidated $1 $8 $16 $23 $29 $35
% margin 0.3% 3.4% 5.8% 7.6% 8.7% 9.7%
EBITA
Consolidated $3 $10 $18 $25 $30 $37
% margin 1.1% 4.2% 6.5% 8.3% 9.3% 10.3%
EBITDA
Consolidated $15 $25 $33 $41 $48 $55
% margin 6.6% 10.4% 12.4% 13.8% 14.6% 15.3%
</Table>
Note: SPLI estimates based on TMO management projections
11
<Page>
STAND-ALONE CASE COMPARISON
===============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS
<Table>
<Caption>
2001E 2002E 2003E 2004E 2005E 2006E
--------------- --------------- ---------------- --------------- --------------- ---------------
Revenues
Base - current $206 $206 $231 $258 $289 $324
Base - August 207 228 251 276 303 333
--------------- --------------- ---------------- --------------- --------------- ---------------
Delta ($1) ($22) ($20) ($18) ($14) ($9)
Telecom - current $8 $8 $16 $22 $31 $44
Telecom - August 16 18 19 21 23 26
--------------- --------------- ---------------- --------------- --------------- ---------------
Delta ($8) ($10) ($3) $1 $8 $18
EBIT
Consolidated - current ($2) $5 $13 $22 $28 $33
Consolidated - August 1 8 16 23 29 35
--------------- --------------- ---------------- --------------- --------------- ---------------
Delta ($3) ($3) ($3) ($1) ($1) ($2)
EBITA
Consolidated - current ($1) $6 $14 $23 $28 $34
Consolidated - August 3 10 18 25 30 37
--------------- --------------- ---------------- --------------- --------------- ---------------
Delta ($4) ($4) ($4) ($2) ($2) ($3)
EBITDA
Consolidated - current $11 $21 $30 $40 $46 $52
Consolidated - August 15 25 33 41 48 55
--------------- --------------- ---------------- --------------- --------------- ---------------
Delta ($4) ($4) ($3) ($1) ($2) ($3)
</Table>
Note: SPLI estimates based on TMO management projections
12
<Page>
SPLI DCF COMPARISON - STAND-ALONE CASE
==============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
Current forecast
------------------------------------------- --------------------------------------------
Firm value Equity value per share
------------------------------------------- --------------------------------------------
EBITDA exit multiple EBITDA exit multiple
------------------------------------------- --------------------------------------------
7.5x 8.0 x 8.5 x 7.5x 8.0 x 8.5 x
------------------------------------------- --------------------------------------------
10% $256 $272 $288 10% $13.03 $13.92 $14.80
WACC 11% 245 260 276 WACC 11% 12.43 13.28 14.12
12% 235 249 264 12% 11.86 12.67 13.48
</Table>
<Table>
<Caption>
August forecast
------------------------------------------- --------------------------------------------
Firm value Equity value per share
------------------------------------------- --------------------------------------------
EBITDA exit multiple EBITDA exit multiple
------------------------------------------- --------------------------------------------
7.5x 8.0 x 8.5 x 7.5x 8.0 x 8.5 x
------------------------------------------- --------------------------------------------
10% $275 $292 $309 10% $14.35 $15.29 $16.23
WACC 11% 263 280 296 WACC 11% 13.70 14.59 15.49
12% 252 268 283 12% 13.08 13.94 14.79
</Table>
Note: SPLI estimates based on TMO management projections
13
<Page>
SPLI ASSUMPTIONS - REVISED SPIN-IN CASE
==============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS
<Table>
<caption>
CURRENT FORECAST 2001E 2002E 2003E 2004E 2005E 2006E
REVENUES
Base $206 $206 $231 $258 $289 $324
% growth 14% 0% 12% 12% 12% 12%
Telecom 8 8 16 22 31 44
% growth 48% 0% 100% 40% 40% 40%
--------------- --------------- ---------------- --------------- --------------- ---------------
Total $214 $214 $247 $281 $321 $368
% growth 14.9% 0.0% 15.3% 13.8% 14.2% 14.7%
EBIT
Consolidated ($2) $12 $21 $30 $36 $42
% margin (0.9%) 5.6% 8.4% 10.8% 11.2% 11.4%
EBITA
Consolidated ($1) $13 $21 $31 $37 $43
% margin (0.6%) 5.9% 8.7% 11.0% 11.4% 11.6%
EBITDA
Consolidated $11 $28 $37 $48 $54 $61
% margin 5.0% 13.0% 15.1% 16.9% 16.8% 16.5%
</Table>
Note: SPLI estimates based on TMO management projections
14
<Page>
SPLI ASSUMPTIONS - AUGUST SPIN-IN CASE
==============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS
<Table>
<Caption>
AUGUST FORECAST 2001E 2002E 2003E 2004E 2005E 2006E
REVENUES
Base $207 $228 $251 $276 $303 $333
% growth 14% 10% 10% 10% 10% 10%
Telecom 16 18 19 21 23 26
% growth 196% 10% 10% 10% 10% 10%
--------------- --------------- ---------------- --------------- --------------- ---------------
Total $223 $245 $270 $297 $327 $359
% growth 19.8% 10.0% 10.0% 10.0% 10.0% 10.0%
EBIT
Consolidated $1 $15 $23 $31 $37 $44
% margin 0.3% 6.3% 8.6% 10.3% 11.3% 12.2%
EBITA
Consolidated $3 $17 $25 $32 $39 $46
% margin 1.1% 7.1% 9.3% 10.9% 11.9% 12.8%
EBITDA
Consolidated $15 $32 $41 $49 $56 $64
% margin 6.6% 13.2% 15.2% 16.5% 17.1% 17.8%
</Table>
Note: SPLI estimates based on TMO management projections
15
<Page>
SPIN-IN CASE COMPARISON
==============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS
<Table>
<Caption>
2001E 2002E 2003E 2004E 2005E 2006E
REVENUES
Base - current $206 $206 $231 $258 $289 $324
Base - August 207 228 251 276 303 333
--------------- --------------- --------------- --------------- --------------- ---------------
Delta ($1) ($22) ($20) ($18) ($14) ($9)
Telecom - current $8 $8 $16 $22 $31 $44
Telecom - August 16 18 19 21 23 26
--------------- --------------- --------------- --------------- --------------- ---------------
Delta ($8) ($10) ($3) $1 $8 $18
EBIT
Consolidated - current ($2) $12 $21 $30 $36 $42
Consolidated - August 1 15 23 31 37 44
--------------- --------------- --------------- --------------- --------------- ---------------
Delta ($3) ($3) ($2) ($1) ($1) ($2)
EBITA
Consolidated - current ($1) $13 $21 $31 $37 $43
Consolidated - August 3 17 25 32 39 46
--------------- --------------- --------------- --------------- --------------- ---------------
Delta ($4) ($5) ($4) ($1) ($2) ($3)
EBITDA
Consolidated - current $11 $28 $37 $48 $54 $61
Consolidated - August 15 32 41 49 56 64
--------------- --------------- --------------- --------------- --------------- ---------------
Delta ($4) ($4) ($4) ($1) ($2) ($3)
</Table>
Note: SPLI estimates based on TMO management projections
16
<Page>
SPLI DCF COMPARISON - SPIN-IN CASE
==============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
CURRENT FORECAST
<Table>
<Caption>
------------------------------------------- --------------------------------------------
FIRM VALUE EQUITY VALUE PER SHARE
------------------------------------------- --------------------------------------------
EBITDA EXIT MULTIPLE EBITDA EXIT MULTIPLE
------------------------------------------- --------------------------------------------
7.5x 8.0x 8.5x 7.5x 8.0x 8.5x
------------------------------------------- --------------------------------------------
10% $322 $341 $359 10% $16.65 $17.68 $18.72
WACC 11% 308 326 344 WACC 11% 15.91 16.90 17.89
12% 296 313 330 12% 15.22 16.16 17.11
</Table>
AUGUST FORECAST
<Table>
<Caption>
------------------------------------------- --------------------------------------------
FIRM VALUE EQUITY VALUE PER SHARE
------------------------------------------- --------------------------------------------
EBITDA EXIT MULTIPLE EBITDA EXIT MULTIPLE
------------------------------------------- --------------------------------------------
7.5x 8.0x 8.5x 7.5x 8.0x 8.5x
------------------------------------------- --------------------------------------------
10% $351 $371 $391 10% $18.52 $19.61 $20.70
WACC 11% 337 356 375 WACC 11% 17.74 18.78 19.82
12% 323 341 359 12% 16.99 17.99 18.98
</Table>
Note: SPLI estimates based on TMO management projections
17
<Page>
INDUSTRY LASER TRADING COMPARABLES
==============================================================================
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
FIRM VALUE
----------------------------------------
REVENUE EBITDA P/E
---------------------------------------- -------------------
MARKET FIRM
COMPANY PRICE(1) % 52-WEEK HIGH VALUE VALUE 2001E 2002E 2001E 2002E 2001E 2002E
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Spectra-Physics $17.11 37% $298 $330 1.5x 1.5x 30.9x 15.9x NM 108.2x
- --------------------------------------------------------------------------------------------------------------------------------
Coherent Inc.2 $28.70 53% $847 $723 1.5x 1.7x 9.9x 12.0x 23.7x 37.3x
GSI Lumonics $7.76 47% 318 225 0.9 1.3 NM NM NM NM
Newport Corp $16.36 13% 627 376 1.2 1.4 8.7 14.9 22.1 45.4
- --------------------------------------------------------------------------------------------------------------------------------
MEDIAN 1.2x 1.4x 9.3x 13.4x 22.9x 41.4x
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) As of close 10/29/01
(2) Pro forma for public equity holdings and disposal of Medical segment; based
on most recent equity research (Robertson Stephens 10/25/01) with EPS of
$1.21 and $0.77 in 2001 and 2002 respectively vs. I/B/E/S EPS estimates of
$1.21 and $1.14 in 2001 and 2002 respectively
Notes: SPLI stand-alone estimates based on TMO management projections; all
others based on company filings, equity research and IBES estimates
18
<Page>
COMPARABLE SHARE PERFORMANCE
==============================================================================
<Table>
8/20
8/13 (1-DAY PRIOR TO OFFER/ 9/10
(BOARD BOOK DATA) BOARD MEETING) (1-DAY PRIOR TO TERRORIST ATTACKS)
------------------------------- ------------------------------------ --------------------------------------------
% CHANGE IMPLIED PRICE(1) % CHANGE IMPLIED PRICE(1) % CHANGE IMPLIED PRICE(1)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SPLI (3%) $19.41 25% $25.00 (17%) $16.53
- ------------------------------------------------------------------------------------------------------------------------------------
TMO 1% $20.13 4% $20.82 1% $20.25
DJIA (11%) 17.80 (10%) 17.96 (3%) 19.30
S&P 500 (9%) 18.10 (8%) 18.41 (1%) 19.74
NASDAQ (14%) 17.15 (10%) 18.07 0% 20.05
INDUSTRIAL LASER
Coherent Inc. (18%) $16.33 (20%) $16.04 (14%) $17.27
GSI Lumonics Inc. (8%) 18.43 (3%) 19.35 (4%) 19.28
Newport Corp. (25%) 15.01 (11%) 17.81 11% 22.12
MEDIAN (18%) $16.33 (11%) $17.81 (4%) $19.28
</Table>
(1) Based on original offer price of $20.00 per share
Note: As of close 10/29/01
19
<Page>
IMPLIED VALUATION - COHERENT
==============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS, EXCEPT PER SHARE DATA
<Table>
<Caption>
2002E STAND-ALONE CASE 2002E SPIN-IN CASE
IMPLIED STREET LATEST BROKERAGE REPORT(1) IMPLIED STREET LATEST BROKERAGE REPORT(1)
SPLI revenue $214 $214
Coherent FV/revenue 1.7x 1.7x
Implied firm value NA 371 NA 371
Implied equity value 338 338
EQUITY VALUE PER SHARE $19.44 $19.44
SPLI EBITDA $21 $21 $28 $28
Coherent FV/EBITDA 9.4x 12.0x 9.4x 12.0x
Implied firm value 194 248 260 332
Implied equity value 162 216 227 300
EQUITY VALUE PER SHARE $9.29 $12.41 $13.06 $17.23
SPLI EPS $0.16 $0.16 $0.40 $0.40
Coherent P/E 25.2x 37.3x 25.2x 37.3x
Equity value per share $3.98 $5.90 $10.06 $14.89
</Table>
(1) Based on Robertson Stephens equity research 10/25/01 with EPS of $1.21
and $0.77 in 2001 and 2002 respectively vs. I/B/E/S EPS estimates of
$1.21 and $1.14 in 2001 and 2002 respectively
Note: SPLI estimates based on TMO management projections; Based on $32MM 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
20
<Page>
ILLUSTRATIVE PRO-FORMA ANALYSIS
==============================================================================
DISPLAYED FOR ILLUSTRATIVE PURPOSES ONLY
$ MILLIONS
2002 ACCRETION/(DILUTION) TO TMO
<Table>
<Caption>
STAND-ALONE CASE
PURCHASE PRICE
SPLI
EPS $14.00 $16.00 $18.00
---------------------------------------------------------
$0.10 (0.7%) (0.8%) (1.0%)
$0.16 (0.5%) (0.7%) (0.9%)
$0.25 (0.3%) (0.5%) (0.7%)
Equity value $241 $278 $314
Minority purchase cost 54 64 74
</Table>
<Table>
<Caption>
SPIN-IN CASE
PURCHASE PRICE
$14.00 $16.00 $18.00
---------------------------------------------------------
$0.30 (0.2%) (0.4%) (0.6%)
$0.40 (0.0%) (0.2%) (0.3%)
$0.50 0.2% 0.1% (0.1%)
$241 $278 $314
54 64 74
</Table>
Note: Assumes TMO cash net income of $181MM in 2002, SPLI stand-alone and
spin-off cash EPS of $0.17 and $0.41 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
21