SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Thermo Remediation Inc.
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(Name of Registrant as Specified In Its Charter)
Thermo Remediation Inc.
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THERMO REMEDIATION INC.
DAMONMILL SQUARE
9 POND LANE, SUITE 5A
CONCORD, MASSACHUSETTS 01742-2851
July 23, 1998
Dear Stockholder:
The enclosed Notice calls the 1998 Annual Meeting of the Stockholders of
Thermo Remediation Inc. I respectfully request all Stockholders to attend this
meeting, if possible.
Our Annual Report for the fiscal year ended April 4, 1998, is enclosed. I
hope you will read it carefully. Feel free to forward any questions you may
have if you are unable to be present at the meeting.
Enclosed with this letter is a proxy authorizing three officers of the
Corporation to vote your shares for you if you do not attend the meeting.
Whether or not you are able to attend the meeting, I urge you to complete your
proxy and return it to our transfer agent, BankBoston, N.A., in the enclosed
addressed, postage-paid envelope, as a quorum of the Stockholders must be
present at the meeting, either in person or by proxy.
I would appreciate your immediate attention to the mailing of this proxy.
Yours very truly,
Robert W. Dunlap
President and Chief Executive
Officer
THERMO REMEDIATION INC.
DAMONMILL SQUARE
9 POND LANE, SUITE 5A
CONCORD, MASSACHUSETTS 01742-2851
July 23, 1998
To the Holders of the Common Stock of
THERMO REMEDIATION INC.
NOTICE OF ANNUAL MEETING
The 1998 Annual Meeting of the Stockholders of Thermo Remediation Inc. (the
"Corporation") will be held on Tuesday, September 15, 1998, at 2:00 p.m. at
the offices of Thermo Electron Corporation, 81 Wyman Street, Waltham,
Massachusetts. The purpose of the meeting is to consider and take action upon
the following matters:
1. Election of seven directors.
2. A proposal to amend the Corporation's Certificate of Incorporation to
change the name of the Corporation to ThermoRetec Corporation.
3. Such other business as may properly be brought before the meeting and
any adjournment thereof.
The transfer books of the Corporation will not be closed prior to the
meeting, but, pursuant to appropriate action by the board of directors, the
record date for the determination of the Stockholders entitled to receive
notice of and to vote at the meeting is July 23, 1998.
The By-laws require that the holders of a majority of the stock issued and
outstanding and entitled to vote be present or represented by proxy at the
meeting in order to constitute a quorum for the transaction of business. It is
important that your stock be represented at the meeting regardless of the
number of shares you may hold. Whether or not you are able to be present in
person, please sign and return promptly the enclosed proxy in the accompanying
envelope, which requires no postage if mailed in the United States.
This notice, the proxy and proxy statement enclosed herewith are sent to you
by order of the board of directors.
Sandra L. Lambert
Secretary
PROXY STATEMENT
The enclosed proxy is solicited by the board of directors of Thermo
Remediation Inc. (the "Corporation") for use at the 1998 Annual Meeting of the
Stockholders (the "Meeting") to be held on Tuesday, September 15, 1998, at
2:00 p.m. at the offices of Thermo Electron Corporation, 81 Wyman Street,
Waltham, Massachusetts, and any adjournment thereof. The mailing address of
the executive office of the Corporation is Damonmill Square, 9 Pond Lane,
Suite 5A, Concord, Massachusetts 01742-2851. This proxy statement and the
enclosed proxy were first furnished to Stockholders of the Corporation on or
about July 27, 1998.
VOTING PROCEDURES
The board of directors intends to present to the Meeting the election of
seven directors, constituting the entire board of directors, as well as one
other matter: a proposal to amend the Corporation's Certificate of
Incorporation to change the name of the Corporation to ThermoRetec
Corporation.
The representation in person or by proxy of a majority of the outstanding
shares of common stock of the Corporation, $.01 par value (the "Common
Stock"), entitled to vote at the Meeting is necessary to provide a quorum for
the transaction of business at the Meeting. Shares can only be voted if the
Stockholder is present in person or is represented by returning a properly
signed proxy. Each Stockholder's vote is very important. Whether or not you
plan to attend the Meeting in person, please sign and promptly return the
enclosed proxy card, which requires no postage if mailed in the United States.
All signed and returned proxies will be counted towards establishing a quorum
for the Meeting, regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on
the proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted FOR the management nominees for directors,
FOR the management proposal, and as the individuals named as proxy holders on
the proxy deem advisable on all other matters as may properly come before the
Meeting.
In order to be elected a director, a nominee must receive the affirmative
vote of a majority of the shares of Common Stock present and entitled to vote
on the election. For the management proposal to change the name of the
Corporation, the affirmative vote of a majority of shares present in person or
represented by proxy, and entitled to vote on the matter, is necessary for
approval. Withholding authority to vote for a nominee for director or an
instruction to abstain from voting on the management proposal will be treated
as shares present and entitled to vote and, for purposes of determining the
outcome of the vote, will have the same effect as a vote against the nominee
or the proposal. With respect to the election of directors, broker "non-votes"
will not be treated as shares present and entitled to vote on a voting matter
and will have no effect on the outcome of the vote. A broker "non-vote" occurs
when a nominee holding shares for a beneficial holder does not have
discretionary voting power and does not receive voting instructions from the
beneficial owner.
A Stockholder who returns a proxy may revoke it at any time before the
Stockholder's shares are voted at the Meeting by written notice to the
Secretary of the Corporation received prior to the Meeting, by executing and
returning a later-dated proxy or by voting by ballot at the Meeting.
The outstanding stock of the Corporation entitled to vote (excluding shares
held in treasury by the Corporation) as of July 23, 1998, consisted of
[12,244,061] shares of Common Stock. Only Stockholders of record at the close
of business on July 23, 1998, are entitled to vote at the Meeting. Each share
is entitled to one vote.
1
PROPOSAL 1
ELECTION OF DIRECTORS
Seven directors are to be elected at the Meeting, each to hold office until
his successor is chosen and qualified or until his earlier resignation, death
or removal.
NOMINEES FOR DIRECTORS
Set forth below are the names of the persons nominated as directors, their
ages, their offices in the Corporation, if any, their principal occupation or
employment for the past five years, the length of their tenure as directors
and the names of other public companies in which such persons hold
directorships. Information regarding their beneficial ownership of the
Corporation's Common Stock and of the common stock of its parent companies,
Thermo TerraTech Inc. ("Thermo TerraTech") and Thermo Electron Corporation
("Thermo Electron"), is reported under the caption "Stock Ownership." All of
the nominees are currently directors of the Corporation.
JOHN P. APPLETON..... Dr. Appleton, 63, has been the chairman of the board and
a director of the Corporation since 1993. He also served
as the Corporation's chief executive officer from
September 1993 to May 1997. Dr. Appleton has been
president, chief executive officer and a director of
Thermo TerraTech since September 1993, and has served as
a vice president of Thermo Electron since 1975 in
various managerial capacities. He also serves as a
director of The Randers Group Incorporated.
ROBERT W. DUNLAP..... Dr. Dunlap, 63, has been president, chief executive
officer and a director of the Corporation since April
1998. Prior to that time, he served for more than five
years as president and chief executive officer of
Remediation Technologies, Inc., which was acquired by
the Corporation in December 1995.
ELIAS P. GYFTOPOULOS. Dr. Gyftopoulos, 71, has been a director of the
Corporation since 1994. 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
twenty years until his retirement in 1996. Dr.
Gyftopoulos is also a director of Thermo Electron,
Thermo BioAnalysis Corporation, Thermo Cardiosystems
Inc., ThermoLase Corporation, ThermoSpectra Corporation,
Thermo Vision Corporation, Thermo Voltek Corp. and Trex
Medical Corporation.
FRED HOLUBOW......... Mr. Holubow, 59, has been a director of the Corporation
since 1992. Mr. Holubow has been vice president of
Pegasus Associates, an investment management firm, for
more than five years.
THEO MELAS-KYRIAZI... Mr. Melas-Kyriazi, 39, has been a director of the
Corporation since 1992. Mr. Melas-Kyriazi has been vice
president, corporate strategy, of Thermo Electron since
March 1998 and was president and chief executive officer
of ThermoSpectra Corporation from its inception in
August 1994 through March 1998. Mr. Melas-Kyriazi was
treasurer of Thermo Electron from May 1988 to August
1994 and treasurer of Thermo Remediation from 1991 to
1994. Mr. Melas-Kyriazi is also a director of
ThermoSpectra Corporation and Thermo Voltek Corp.
FRANK E. MORRIS...... Dr. Morris, 74, has been a director of the Corporation
since 1993. Dr. Morris served as president of the
Federal Reserve Bank of Boston from 1968 until he
retired in 1988. Dr. Morris also served as the Peter
Drucker Professor of Management at Boston College from
1989 to 1994. Dr. Morris is a trustee of SEI Mutual
Funds, The Capitol Mutual Funds, FFB Lexicon Funds and
The Arbor Fund.
2
WILLIAM A. RAINVILLE. Mr. Rainville, 56, has been a director of the
Corporation since June 1993. Mr. Rainville has been
president and chief executive officer of Thermo Fibertek
Inc., a majority-owned subsidiary of Thermo Electron
that develops and manufactures equipment and products
for the paper making and paper recycling industries,
since its inception in 1991, a senior vice president of
Thermo Electron since March 1993 and a vice president of
Thermo Electron from 1986 to 1993. From 1984 until
January 1993, Mr. Rainville was the president and chief
executive officer of Thermo Electron Web Systems Inc., a
subsidiary of Thermo Fibertek Inc. Mr. Rainville is also
a director of Thermo Ecotek Corporation, Thermo Fibergen
Inc., Thermo Fibertek Inc. and Thermo TerraTech.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The board of directors has established an audit committee and a human
resources committee, each consisting solely of outside directors. The present
members of the audit committee are Mr. Holubow (Chairman) and Dr. Morris. The
audit committee reviews the scope of the audit with the Corporation's
independent public accountants and meets with them for the purpose of
reviewing the results of the audit subsequent to its completion. The present
members of the human resources committee are Dr. Morris (Chairman), Dr.
Gyftopoulos and Mr. Holubow. The human resources committee reviews the
performance of senior members of management, recommends executive compensation
and administers the Corporation's stock option and other stock-based
compensation plans. The Corporation does not have a nominating committee of
the board of directors. The board of directors met five times, the audit
committee met twice and the human resources committee met five times during
fiscal 1997. Each director attended at least 75% of all meetings of the board
of directors and Committees on which he served held during fiscal 1997, except
Mr. Rainville, who attended 40% of such meetings.
COMPENSATION OF DIRECTORS
Cash Compensation
Directors who are not employees of the Corporation, of Thermo Electron or of
any other company affiliated with Thermo Electron (also referred to as
"outside directors") receive an annual retainer of $2,000 and a fee of $1,000
per day for attending regular meetings of the board of directors and $500 per
day for participating in meetings of the board of directors held by means of
conference telephone and for participating in certain meetings of committees
of the board of directors. Payment of directors' fees is made quarterly. Dr.
Appleton, Dr. Dunlap, Mr. Melas-Kyriazi and Mr. Rainville are all employees of
Thermo Electron or its subsidiaries and do not receive any cash compensation
from the Corporation for their services as directors. Directors are also
reimbursed for out-of-pocket expenses incurred in attending such meetings.
Deferred Compensation Plan for Directors
Under the Corporation's deferred compensation plan for directors (the
"Deferred Compensation Plan"), a director has the right to defer receipt of
his cash fees until he ceases to serve as a director, dies or retires from his
principal occupation. In the event of a change in control or proposed change
in control of the Corporation that is not approved by the board of directors,
deferred amounts become payable immediately. Either of the following is deemed
to be a change of control: (a) the acquisition, without the prior approval of
the board of directors, directly or indirectly, by any person of 50% or more
of the outstanding Common Stock or the outstanding common stock of Thermo
TerraTech or 25% or more of the outstanding common stock of Thermo Electron;
or (b) the failure of the persons serving on the board of directors
immediately prior to any contested election of directors or any exchange offer
or tender offer for the Common Stock or the common stock of Thermo TerraTech
or Thermo Electron to constitute a majority of the board of directors at any
time within two years following any such event. Amounts deferred pursuant to
the Deferred Compensation Plan are valued at the end of each quarter as units
of the Corporation's Common Stock. When payable, amounts deferred may be
disbursed
3
solely in shares of Common Stock accumulated under the Deferred Compensation
Plan. A total of 37,500 shares of Common Stock have been reserved for issuance
under the Deferred Compensation Plan. As of April 4, 1998, deferred units
equal to 7,788.67 shares of Common Stock were accumulated under the Deferred
Compensation Plan.
Directors Stock Option Plan
The Corporation's directors stock option plan, which was amended in 1995
(the "Directors Plan"), provides for the grant of stock options to purchase
shares of Common Stock of the Corporation to outside directors as additional
compensation for their service as directors.
The Directors Plan originally provided for the grant of stock options upon a
director's initial appointment. Outside directors appointed before the
amendment of the plan received an option to purchase 22,500 shares of Common
Stock upon their appointment or election. The amended plan provides that the
size of the award to new directors is reduced by 4,500 shares each year until
1999, when the initial grant for new directors will be eliminated entirely.
Accordingly, directors first appointed or elected in 1997 will receive options
to purchase 9,000 shares, directors first appointed or elected in 1998 will
receive options to purchase 4,500 shares and directors first appointed or
elected in 1999 and thereafter will not receive an initial option grant.
Options granted upon a director's election or appointment may be exercised at
any time from and after the six-month anniversary of the grant date of the
option and prior to the expiration of the option on the fifth anniversary of
the grant date. Such options are subject to restrictions on resale and to the
repurchase by the Corporation of the shares subject to option at the exercise
price if the director ceases to serve as a director of the Corporation, Thermo
Electron or any subsidiary of Thermo Electron, for any reason other than
death. The restriction and repurchase rights lapse in equal installments of
4,500 shares starting with the first anniversary of the grant date, provided
the director has continuously served as a director of the Corporation or any
other Thermo Electron company prior to that date.
Commencing with the 1998 Annual Meeting of Stockholders, outside directors
will receive an annual grant of options to purchase 1,000 shares of Common
Stock pursuant to the Directors Plan at the close of business on the date of
each Annual Meeting of the Stockholders of the Corporation. Options evidencing
annual grants may be exercised at any time from and after the six-month
anniversary of the grant date of the option and prior to the expiration of the
option on the third anniversary of the grant date. Shares acquired upon
exercise of the options are subject to repurchase by the Corporation at the
exercise price if the recipient ceases to serve as a director of the
Corporation or any other Thermo Electron company prior to the first
anniversary of the grant date.
The exercise price for options granted under the Directors Plan is the
average of the closing prices of the Common Stock as reported on the American
Stock Exchange (or other principal market on which the Common Stock is then
traded) for the five trading days preceding and including the date of grant,
or, if the shares are not then traded, at the last price per share paid by
third parties in an arms-length transaction prior to the option grant. As of
June 26, 1998, options to purchase 75,000 shares of Common Stock had been
granted and were outstanding under the Directors Plan, no options had lapsed
or been exercised, and options to purchase 75,000 shares of Common Stock were
reserved and available for grant under the Directors Plan.
STOCK OWNERSHIP POLICIES FOR DIRECTORS
During fiscal 1997, the human resources committee of the board of directors
(the "Committee") established a stock holding policy for directors. The stock
holding policy requires each director to hold a minimum of 1,000 shares of
Common Stock. Directors were requested to achieve this ownership level by the
1998 Annual Meeting of Stockholders. Directors who are also executive officers
of the Corporation are required to comply with a separate stock holding policy
established by the Committee in fiscal 1997, which is described in "Committee
Report on Executive Compensation--Stock Ownership Policies."
In addition, the Committee adopted a policy requiring directors to hold
shares of the Corporation's Common Stock equal to one-half of their net option
exercises over a period of five years. The net option exercise is
4
determined by calculating the number of shares acquired upon exercise of a
stock option, after deducting the number of shares that could have been traded
to exercise the option and the number of shares that could have been
surrendered to satisfy tax withholding obligations attributable to the
exercise of the option. This policy is also applicable to executive officers
and is described in "Committee Report on Executive Compensation--Stock
Ownership Policies."
STOCK OWNERSHIP
The following table sets forth the beneficial ownership of Common Stock, as
well as the common stock of Thermo TerraTech and Thermo Electron, as of May
30, 1998, with respect to (i) each person who was known by the Corporation to
own beneficially more than 5% of the outstanding shares of Common Stock, (ii)
each director, (iii) each executive officer named in the summary compensation
table under the heading "Executive Compensation" and (iv) all directors and
current executive officers as a group.
While certain directors or executive officers of the Corporation are also
directors or executive officers of Thermo Electron or Thermo TerraTech, all
such persons disclaim beneficial ownership of the shares of Common Stock owned
by Thermo TerraTech or Thermo Electron.
THERMO THERMO
REMEDIATION THERMO ELECTRON TERRATECH
NAME(1) INC. (2) CORPORATION (3) INC. (4)
------- ----------- --------------- ---------
Thermo Electron Corporation (5).......... 9,505,353 N/A N/A
William Harris Investors, Inc. (6)....... 1,081,882 N/A N/A
John P. Appleton......................... 73,000 145,309 297,039
Robert W. Dunlap......................... 95,848 10,355 10,000
Elias P. Gyftopoulos..................... 29,600 70,707 3,040
Fred Holubow............................. 55,766 6,000 16,500
Nels R. Johnson.......................... 37,688 20,782 12,958
James Lousararian........................ 110,541 7,637 27,226
Theo Melas-Kyriazi....................... 22,500 197,420 10,618
Frank E. Morris.......................... 29,304 25,475 1,500
Norman A. Pedersen....................... 62,031 13,457 16,188
Jeffrey L. Powell........................ 121,000 41,493 82,835
William A. Rainville..................... 24,000 233,909 60,000
All directors and current executive
officers as a group (13 persons)........ 745,560 1,616,149 609,458
- --------
(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 Common Stock beneficially owned by Dr. Appleton, Dr.
Gyftopoulos, Mr. Holubow, Mr. Johnson, Mr. Lousararian, Mr. Melas-Kyriazi,
Dr. Morris, Mr. Pedersen, Mr. Powell, Mr. Rainville and all directors and
current executive officers as a group include 63,000, 28,600, 25,450,
37,250, 100,500, 22,500, 25,450, 53,000, 111,000, 22,500 and 526,750
shares, respectively, that such person or group has the right to acquire
within 60 days of May 30, 1998, through the exercise of stock options.
Shares beneficially owned by Mr. Holubow, Dr. Morris and all directors and
current executive officers as a group include 3,934, 3,854 and 7,788 full
shares, respectively, that had been allocated through May 30, 1998, to
their respective accounts maintained under the Corporation's Deferred
Compensation Plan for Directors. Shares of Common Stock beneficially owned
by Dr. Dunlap and all directors and current executive officers as a group
include warrants to purchase 23,962 shares. No director or current
executive officer beneficially owned more than 1% of the Common Stock
outstanding as of May 30, 1998; all directors and current executive
officers as a group beneficially owned 5.7% of the Common Stock
outstanding as of such date.
5
(3) Shares of the common stock of Thermo Electron beneficially owned by Dr.
Appleton, Dr. Dunlap, Dr. Gyftopoulos, Mr. Johnson, Mr. Lousararian, Mr.
Melas-Kyriazi, Dr. Morris, Mr. Pedersen, Mr. Powell, Mr. Rainville and all
directors and current executive officers as a group include 113,532,
10,000, 8,125, 15,195, 4,275, 161,935, 8,125, 6,250, 34,712, 169,487 and
1,279,308 shares, respectively, that such person or group has the right to
acquire within 60 days of May 30, 1998, through the exercise of stock
options. Shares beneficially owned by Dr. Appleton, Mr. Melas-Kyriazi, Mr.
Pedersen and all directors and current executive officers as a group
include 1,615, 1,071, 517 and 6,665 full shares allocated through May 30,
1998, to their respective accounts maintained pursuant to Thermo
Electron's employee stock ownership plan, of which the trustees, who have
investment power over its assets, were as of May 30, 1998, executive
officers of Thermo Electron ("ESOP"). Shares beneficially owned by Dr.
Morris and all directors and current executive officers as a group each
include 11,685 shares allocated through May 30, 1998, to Dr. Morris's
account maintained pursuant to Thermo Electron's deferred compensation
plan for directors. Shares beneficially owned by Dr. Morris include 3,415
shares owned by his spouse. No director or current executive officer
beneficially owned more than 1% of the common stock of Thermo Electron
outstanding as of May 30, 1998; all directors and current executive
officers as a group beneficially owned approximately 1.0% of the Thermo
Electron common stock outstanding as of such date.
(4) Shares of the common stock of Thermo TerraTech beneficially owned by Dr.
Appleton, Dr. Dunlap, Dr. Gyftopoulos, Mr. Johnson, Mr. Lousararian, Mr.
Melas-Kyriazi, Dr. Morris, Mr. Pedersen, Mr. Powell, Mr. Rainville and all
directors and current executive officers as a group include 275,000,
10,000, 1,500, 12,000, 27,000, 10,000, 1,500, 16,000, 63,000, 60,000 and
521,000 shares, respectively, that such person or group has the right to
acquire within 60 days of May 30, 1998, through the exercise of stock
options. Shares beneficially owned by Mr. Holubow and all directors and
current executive officers as a group include 16,500 and 31,226 shares,
respectively, that such person or group has the right to acquire within 60
days of May 30, 1998, through the exercise of stock purchase warrants
acquired in connection with private placements of the securities of Thermo
TerraTech and one or more of the Corporation's subsidiaries on terms
identical to terms granted to unaffiliated investors. Shares beneficially
owned by Dr. Appleton, Mr. Melas-Kyriazi, Mr. Pedersen and all directors
and current executive officers as a group include 305, 299, 188 and 1,410
full shares, respectively, allocated through May 30, 1998, to accounts
maintained pursuant to the ESOP. Except for Dr. Appleton, who beneficially
owned approximately 1.5% of the common stock of Thermo TerraTech
outstanding as of May 30, 1998, no director or current executive officer
beneficially owned more than 1% of such common stock outstanding as of May
30, 1998; all directors and current executive officers as a group
beneficially owned 3.1% of the Common Stock outstanding as of such date.
(5) Includes 167,410 shares of Common Stock that Thermo Electron has the right
to acquire within 60 days of May 30, 1998, through the conversion of
certain convertible notes of the Corporation held by Thermo Electron. Also
includes 269,492 shares of Common Stock that Thermo Electron, through its
majority owned subsidiary Thermo TerraTech, has the right to acquire
within 60 days of May 30, 1998, through the conversion of certain
convertible notes of the Corporation held by Thermo TerraTech. As of May
30, 1998, Thermo Electron Corporation beneficially owned approximately
71.1% of the outstanding Common Stock, primarily through its majority-
owned subsidiary Thermo TerraTech Inc. Thermo Electron's address is 81
Wyman Street, Waltham, Massachusetts. As of May 30, 1998, Thermo Electron
had the power to elect all of the members of the Corporation's board of
directors.
(6) Based on information provided in the Schedule 13G of William Harris
Investors, Inc. ("Harris") as of December 31, 1997, these shares of Common
Stock have been acquired by Harris on behalf of unidentified discretionary
clients of Harris. Harris is an investment adviser registered under
Section 203 of the Investment Adviser Act of 1940, as amended. Its address
is 2 North LaSalle Street, Suite 300, Chicago, Illinois 60602.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and beneficial owners of more
than 10% of the Common Stock, such as Thermo TerraTech and Thermo
6
Electron, to file with the Securities and Exchange Commission initial reports
of ownership and periodic reports of changes in ownership of the Corporation's
securities. Based upon a review of such filings, all Section 16(a) filing
requirements applicable to such persons were complied with during fiscal 1997,
except in the following instances. [LATE FILINGS]
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation for services to the Corporation
in all capacities awarded to, earned by or paid to the Corporation's chief
executive officers during fiscal 1998 and its four other most highly
compensated executive officers for the last three fiscal years.
The Corporation is required to appoint certain executive officers and full-
time employees of Thermo Electron as executive officers of the Corporation, in
accordance with the Thermo Electron Corporate Charter. The compensation for
these executive officers is determined and paid entirely by Thermo Electron.
The time and effort devoted by these individuals to the Corporation's affairs
is provided to the Corporation under the Corporate Services Agreement between
the Corporation and Thermo Electron. Accordingly, the compensation for these
individuals is not reported in the following table.
7
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------
LONG TERM
COMPENSATION
----------------------
ANNUAL COMPENSATION SECURITIES UNDERLYING
NAME AND FISCAL -------------------- OPTIONS (NO. OF SHARES ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AND COMPANY) (2) COMPENSATION (3)
------------------ ------ ---------- --------- ---------------------- ----------------
John P. Appleton (4).... 1998 $ 39,000 $ 0(1) -- --
Former Chief 1997 $ 36,750 $ 20,000 -- $ 6,919
Executive Officer 1996 $ 33,750 $ 20,000 -- $ 6,919
Jeffrey L. Powell (5)... 1998 $ 145,000 $ 0(1) 700(TMO) $59,372(7)
President & Chief 2,000(MKA)
Executive Officer 2,000(ONX)
120,000(RGI)
2,000(TDX)
1,000(TISI)
2,000(TRIL)
1,500(VIZ)
2,000(TRCC)
1997 $ 122,000 $ 40,000 600(TMO) $ 7,023
2,000(TFG)
6,000(TOC)
1996 $ 116,000 $ 60,000 300(TMO) $ 6,646
2,000(TBA)
5,000(TLZ)
2,000(TLT)
6,000(TMQ)
2,000(TSR)
4,000(TXM)
Robert W. Dunlap (6).... 1998 $ 165,000 $ 0(1) 120,000(RGI) $ 9,055
Vice President 1997 $ 165,000 $ 35,000 10,000(TTT) $ 5,088
10,000(TMO)
Nels R. Johnson (8)..... 1998 $ 101,000 $ 26,000 7,000(THN) $ 9,344
Vice President 800(TMO)
12,000(RGI)
1997 $ 97,300 $ 28,000 8,000(THN) $ 5,275
900(TMO)
1996 $ 93,600 $ 25,000 20,000(THN) $ 4,730
James Lousararian....... 1998 $ 110,000 $ 0(1) 20,000(THN) $ 5,576
Vice President 48,000(RGI)
1997 $ 106,000 $ 25,000 10,000(THN) $ 6,567
1996 $ 102,000 $ 33,000 -- $ 6,636
Norman A. Pedersen (9).. 1998 $ 98,000 $ 19,000 20,000(THN) $ 9,346
Vice President,
Business 800(TMO)
Development 30,000(RGI)
- --------
(1) Dr. Appleton, Dr. Dunlap, Mr. Powell and Mr. Lousararian have elected to
forego their bonuses for fiscal 1998.
(2) In addition to grants of options to purchase shares of Common Stock of the
Corporation (designated in the table as THN), the named executive officers
of the Corporation have been granted options to purchase common stock of
Thermo Electron and certain of its other subsidiaries as part of Thermo
Electron's stock option program. Options have been granted during the last
three fiscal years to the named executive officers in the following Thermo
Electron companies: Thermo Electron (designated in the table as TMO),
Thermo TerraTech Inc. (designated in the table as TTT), Metrika Systems
Corporation (designated in the table as
8
MKA), ONIX Systems Inc. (designated in the table as ONX), The Randers Group
Incorporated (designated in the table as RGI), Thermedics Detection Inc.
(designated in the table as TDX), Thermo BioAnalysis Corporation
(designated in the table as TBA), Thermo Fibergen Inc. (designated in the
table as TFG), Thermo Information Solutions Inc. (designated in the Table
as TISI), ThermoLase Corporation (designated in the table as TLZ),
ThermoLyte Corporation (designated in the table as TLT), Thermo Optek
Corporation (designated in the table as TOC), ThermoQuest Corporation
(designated in the table as TMQ), Thermo Sentron Inc. (designated in the
table as TSR), Thermo Trilogy Corporation (designated in the table as
TRIL), Thermo Vision Corporation (designated in the table as VIZ), Trex
Communications Corporation (designated in the table as TRCC), and Trex
Medical Corporation (designated in the table as TXM).
(3) Represents the amount of matching contributions made by the individual's
employer on behalf of named executive officers participating in the Thermo
Electron 401(k) plan or, in the case of Dr. Dunlap, the RETEC Employee's
Savings and Profit Sharing Plan.
(4) Dr. Appleton served as the Corporation's chief executive officer from 1993
until May 14, 1997. Dr. Appleton is also a vice president of Thermo
Electron and president and chief executive officer of Thermo TerraTech. A
portion of Dr. Appleton's annual cash compensation (salary and bonus) has
been allocated to and paid by each of the Corporation, Thermo Electron and
Thermo TerraTech over each of the past three fiscal years as compensation
for the services provided to these companies based on the time he devoted
to his responsibilities to these companies. The annual cash compensation
reported in the table for Dr. Appleton represents the amount paid from all
sources, including the Corporation, solely for Dr. Appleton's services as
the chief executive officer of the Corporation. For fiscal 1998, 1997 and
1996, approximately 20%, 20%, and 20%, respectively, of Dr. Appleton's
annual cash compensation was paid by the Corporation for his services as
its chief executive officer. Bonuses paid to Dr. Appleton for 1996 and
1997 reflect compensation decisions based on calendar year performance, in
accordance with Thermo Electron's compensation practices for its officers.
Dr. Appleton has served as an officer of Thermo Electron since 1975 and
has been granted options to purchase shares of the common stock of Thermo
Electron and certain of its subsidiaries other than the Corporation from
time to time by Thermo Electron or such other subsidiaries. These options
are not reported here as they were granted as compensation for service to
Thermo Electron companies in capacities other than in his capacity as the
chief executive officer of the Corporation.
(5) Mr. Powell served as president and chief executive officer of the
Corporation from May 14, 1997 through April 30, 1998, when he was named
senior vice president of the Corporation. He served as president and chief
operating officer of the Corporation prior to his promotion to chief
executive officer.
(6) Dr. Dunlap was appointed president and chief executive officer of the
Corporation on April 30, 1998. He served as vice president of the
Corporation from May 8, 1996 through April 30, 1998.
(7) In addition to a $9,372 matching contribution referred to in footnote (2),
this amount includes the reimbursement by the Corporation of $50,000 in
expenses associated with Mr. Powell's relocation to Concord,
Massachusetts.
(8) Mr. Johnson was appointed an executive officer of the Corporation on June
30, 1995.
(9) Mr. Pedersen was appointed an executive officer of the Corporation on May
14, 1997.
STOCK OPTIONS GRANTED DURING FISCAL 1998
The following table sets forth information concerning individual grants of
stock options made during fiscal 1998 to the Corporation's then chief
executive officers and the other named executive officers. It has not been the
Corporation's policy in the past to grant stock appreciation rights, and no
such rights were granted during fiscal 1998.
Dr. Appleton has served as a vice president of Thermo Electron since 1975
and from time to time has been granted options to purchase common stock of
Thermo Electron and certain of its subsidiaries other than the
9
Corporation. These options are not reported in this table as they were granted
as compensation for service to other Thermo Electron companies in capacities
other than in his capacity as the chief executive officer of the Corporation.
During fiscal 1998, no options to purchase Common Stock were granted to Dr.
Appleton.
OPTION GRANTS IN FISCAL 1998
- -------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES PERCENT OF ANNUAL RATES OF STOCK
UNDERLYING TOTAL OPTIONS PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM (2)
GRANTED EMPLOYEES IN PRICE PER EXPIRATION ---------------------
NAME (1) FISCAL YEAR SHARE DATE 5% 10%
---- ---------- ------------- --------- ---------- -- ----------
Robert W. Dunlap........ 120,000(RGI) 1.36%(3) $ 0.65 12/12/04 $ 31,200 $ 74,400
Jeffrey L. Powell....... 700(TMO) 0.04%(3) $34.20 6/3/00 $ 3,773 $ 7,924
2,000(MKA) 0.47%(3) $14.23 1/21/05 $ 11,580 $ 27,000
2,000(ONX) 0.30%(3) $14.25 1/21/05 $ 11,600 $ 27,040
120,000(RGI) 1.36%(3) $ 0.65 12/12/04 $ 31,200 $ 74,400
2,000(TDX) 0.32%(3) $ 9.56 1/21/05 $ 7,780 $ 18,140
1,000(TISI) 0.27%(3) $10.00 1/21/05 $ 4,070 $ 9,490
2,000(TRIL) 0.99%(3) $ 8.25 1/21/05 $ 6,720 $ 15,660
1,500(VIZ) 0.35%(3) $ 7.25 1/21/05 $ 4,425 $ 10,320
2,000(TRCC) 0.37%(3) $ 4.00 1/21/05 $ 3,260 $ 7,580
Nels R. Johnson......... 7,000(THN) 1.72% $ 6.51 3/18/03 $ 12,600 $ 27,790
800(TMO) 0.04%(3) $34.20 6/3/00 $ 4,312 $ 9,056
12,000(RGI) 0.14%(3) $ 0.65 12/12/04 $ 3,120 $ 7,440
James Lousararian....... 20,000(THN) 4.93% $ 6.51 3/18/03 $ 36,000 $ 79,400
48,000(RGI) 0.54%(3) $ 0.65 12/12/04 $ 12,480 $ 29,760
Norman A. Pedersen...... 20,000(THN) 4.93% $ 6.51 3/18/03 $ 36,000 $ 79,400
800(TMO) 0.04%(3) $34.20 6/3/00 $ 4,312 $ 9,056
30,000(RGI) 0.34%(3) $ 0.65 12/12/04 $ 7,800 $ 18,600
- --------
(1) In addition to the grant of options to purchase Common Stock of the
Corporation (designated in the table as THN), options have been granted
during fiscal 1998 to the named executive officers as part of Thermo
Electron's stock option program to purchase the common stock of Thermo
Electron (designated in the table as TMO), Metrika Systems Corporation
(designated in the table as MKA), ONIX Systems Inc. (designated in the
table as ONX), The Randers Group Incorporated (designated in the table as
RGI), Thermedics Detection Inc. (designated in the table as TDX), Thermo
Information Solutions Inc. (designated in the table as TISI), Thermo
TerraTech Inc. (designated in the table as TTT), Thermo Trilogy
Corporation (designated in the table as TRIL), Thermo Vision Corporation
(designated in the table as VIZ) and Trex Communications Corporation
(designated in the table as TRCC). All of the options granted during the
fiscal year are immediately exercisable at the date of grant, except
options to purchase the common stock of Thermo Information Solutions Inc.,
Thermo Trilogy Corporation and Trex Communications Corporation, which are
not exercisable until the earlier of (i) 90 days after the effective date
of the registration of the company's common stock under Section 12 of the
Securities and Exchange Act of 1934 and (ii) six years from the date of
grant. In all cases, the shares acquired upon exercise are subject to
repurchase by the granting corporation at the exercise price if the
optionee ceases to be employed by such corporation or any other Thermo
Electron company. The granting corporation may exercise its repurchase
rights within six months after the termination of the optionee's
employment. For publicly traded companies, the repurchase rights generally
lapse ratably over a five- to ten-year period, depending on the option
term, which may vary from seven to twelve years, provided that the
optionee continues to be employed by the Corporation or another Thermo
Electron company. For companies whose shares are not publicly traded, the
repurchase rights lapse in their entirety on the sixth anniversary of the
date of grant. Certain options have three-year terms and the repurchase
rights lapse in their entirety on the second anniversary of the grant
date. The granting corporation may permit the holders of options to
exercise options and to satisfy tax withholding obligations by
surrendering shares equal in fair market value to the exercise price or
withholding obligation.
10
(2) The amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5%
and 10% compounded annually from the date the respective options were
granted to their expiration date. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other expenses
associated with the exercise. Actual gains, if any, on stock option
exercises will depend on the future performance of the common stock of the
applicable corporation, the optionee's continued employment through the
option period and the date on which the options are exercised.
(3) These options were granted under stock option plans maintained by Thermo
Electron or its subsidiaries other than the Corporation as part of Thermo
Electron's compensation program and accordingly are reported as a
percentage of total options granted to employees of Thermo Electron and
its subsidiaries.
STOCK OPTIONS EXERCISED DURING FISCAL 1998 AND FISCAL YEAR-END OPTION VALUES
The following table reports certain information regarding stock option
exercises during fiscal 1998 and outstanding stock options held at the end of
fiscal 1998 by the Corporation's then chief executive officers and the other
named executive officers. No stock appreciation rights were exercised or were
outstanding during fiscal 1998.
11
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND FISCAL 1998 YEAR-END OPTION VALUES
- ---------------------------------------------------------------------------------------------------------
NUMBER OF
UNEXERCISED
SHARES OPTIONS AT FISCAL VALUE OF
ACQUIRED VALUE YEAR-END UNEXERCISED
ON REALIZED (EXERCISABLE/ IN-THE-MONEY
NAME COMPANY EXERCISE (1) UNEXERCISABLE) (2) OPTIONS
---- ---------------------------- -------- -------- ------------------ --------------
John P. Appleton (3).... Thermo Remediation -- -- 63,000/-- $ 0/--
Robert W. Dunlap........ Thermo Electron -- -- 10,000/-- $ 50,750/--
Randers Group Inc. -- -- 120,000/-- $ 12,000/--
Thermo TerraTech -- -- 10,000/-- $ 0/--
Jeffrey L. Powell....... Thermo Remediation -- -- 111,000/-- $ 0/--
Thermo Electron -- -- 35,012/-- (4) $761,729/--
Metrika Systems -- -- 2,000/-- $ 2,666/--
Onix Systems -- -- 2,000/-- $ 0/--
Randers Group Inc. -- -- 120,000/-- $ 12,000/--
Thermedics Detection -- -- 2,000/-- $ 3,880/--
Thermo BioAnalysis -- -- 2,000/-- $ 23,250/--
Thermo Fibergen -- -- 2,000/-- $ 0/--
Thermo Fibertek -- -- 4,500/-- $ 40,784/--
Thermo Information Solutions -- -- -- /1,000 -- /$0(6)
ThermoLase -- -- 5,000/-- $ 0/--
ThermoLyte -- -- -- /2,000 -- /$0(6)
Thermo Optek -- -- 6,000/-- $ 39,180/--
ThermoQuest -- -- 6,000/-- $ 39,378/--
Thermo Sentron -- -- 2,000/-- $ 0/--
Thermo TerraTech -- -- 63,000/-- (5) $ 12,195/--
Thermo Trilogy -- -- -- /2,000 -- /$0(6)
Thermo Vision -- -- 1,500/-- $ 188/--
Trex Communications -- -- -- /2,000 -- /$0(6)
Trex Medical -- -- 4,000/-- $ 28,252/--
Nels R. Johnson......... Thermo Remediation -- -- 37,250/-- $ 0/--
Thermo Electron 1,687 $50,888 15,195/-- $360,773/--
Randers Group Inc. -- -- 12,000/-- $ 1,200/--
James Lousararian....... Thermo Remediation -- -- 100,500/-- $ 0/--
Thermo Electron -- -- 4,275/-- $109,039/--
Randers Group Inc. -- -- 48,000/-- $ 4,800/--
Thermo Fibertek -- -- 4,500/-- $ 40,784/--
Thermo TerraTech -- -- 27,000/-- (5) $ 7,317/--
Norman A. Pedersen (7).. Thermo Remediation -- -- 53,000/-- $ 0/--
Thermo Electron -- -- 6,250/-- $ 30,915/--
Randers Group Inc. -- -- 30,000/-- $ 3,000/--
Thermo TerraTech -- -- 16,000/-- $ 0/--
12
- --------
(1) Amounts shown in this column do not necessarily represent actual value
realized from the sale of the shares acquired upon exercise of the option
because in many cases the shares are not sold on exercise but continue to
be held by the executive officer exercising the option. The amounts shown
represent the difference between the option exercise price and the market
price on the date of exercise, which is the amount that would have been
realized if the shares had been sold immediately upon exercise.
(2) All of the options reported outstanding at the end of the fiscal year are
immediately exercisable as of fiscal year-end, except options to purchase
the common stock of ThermoLyte Corporation, which are not exercisable
until the earlier of (i) 90 days after the effective date of the
registration of that company's common stock under Section 12 of the
Securities Exchange Act of 1934 and (ii) nine years from the grant date,
and options to purchase the common stock of Thermo Information Solutions
Inc., Thermo Trilogy Corporation and Trex Communications Corporation,
which are not exercisable until the earlier of (i) 90 days after the
effective date of the registration of that company's common stock under
Section 12 of the Securities Exchange Act of 1934 and (ii) six years from
the grant date. In all cases, the shares acquired upon exercise are
subject to repurchase by the granting corporation at the exercise price if
the optionee ceases to be employed by such corporation or any other Thermo
Electron company. The granting corporation may exercise its repurchase
rights within six months after the termination of the optionee's
employment. For publicly traded companies, the repurchase rights generally
lapse ratably over a five- to ten-year period, depending on the option
term, which may vary from seven to twelve years, provided that the
optionee continues to be employed by the Corporation or another Thermo
Electron company. For companies whose shares are not publicly traded, the
repurchase rights lapse in their entirety on the ninth anniversary (in the
case of ThermoLyte Corporation) and sixth anniversary (in the case of
Thermo Information Solutions Inc., Thermo Trilogy Corporation and Thermo
Trex Corporation) of the grant date. Certain options have three-year terms
and the repurchase rights lapse in their entirety on the second
anniversary of the grant date. The granting corporation may permit the
holder of options to exercise options and to satisfy tax withholding
obligations by surrendering shares equal in fair market value to the
exercise price or withholding obligation.
(3) Dr. Appleton has served as a vice president of Thermo Electron since 1975
and has been granted options to purchase shares of the common stock of
Thermo Electron and certain of its subsidiaries other than the Corporation
from time to time by Thermo Electron or such other subsidiaries. These
options are not reported here as they were granted as compensation for
service to Thermo Electron companies in capacities other than in his
capacity as the chief executive officer of the Corporation.
(4) Options to purchase 22,500 shares of the common stock of Thermo Electron
granted to Mr. Powell are subject to the same terms as described in
footnote (1), except that the repurchase rights of the granting
corporation generally do not lapse until the tenth anniversary of the
grant date. In the event of the employee's death or involuntary
termination prior to the tenth anniversary of the grant date, the
repurchase rights of the granting corporation shall be deemed to lapse
ratably over a five-year period commencing with the fifth anniversary of
the grant date.
(5) Options to purchase 15,000 and 9,000 shares of the common stock of Thermo
TerraTech held by Mr. Powell and Mr. Lousararian, respectively, are
subject to the same terms described in footnote (1), except that in the
event of the optionee's voluntary resignation or discharge for cause prior
to February 8, 1998, all of the shares acquired upon exercise of these
options are subject to repurchase by Thermo TerraTech at the exercise
price. In addition, all shares acquired upon the exercise of these options
are subject to restrictions on resale until February 8, 1998.
(6) No public market existed for the shares underlying these options as of
April 4, 1998. Accordingly, no value in excess of exercise price has been
attributed to these options.
(7) Mr. Pedersen was employed by Thermo Electron prior to joining the
Corporation and has been granted options to purchase shares of the common
stock of Thermo Electron and certain of its subsidiaries other than the
Corporation from time to time by Thermo Electron or such other
subsidiaries. These options are not reported here as they were granted as
compensation for service to Thermo Electron companies in capacities other
than in his capacity as a vice president of the Corporation.
13
SEVERANCE AGREEMENTS
Thermo Electron has entered into severance agreements with several key
employees, including Dr. Appleton. These agreements provide severance benefits
if there is a change in control of Thermo Electron that is not approved by the
board of directors of Thermo Electron and the employee's employment with
Thermo Electron or one of its majority-owned subsidiaries is terminated, for
whatever reason, within one year thereafter. For purposes of the severance
agreements, a change in control exists upon (i) the acquisition of 50% or more
of the outstanding common stock of Thermo Electron by any person without the
prior approval of the board of directors of Thermo Electron, (ii) the failure
of the board of directors of Thermo Electron, within two years after any
contested election of directors or tender or exchange offer not approved by
the board of directors, to be constituted of a majority of directors holding
office prior to such event or (iii) any other event that the board of
directors of Thermo Electron determines constitutes an effective change of
control of Thermo Electron. The benefit under these agreements is stated as an
initial percentage which was established by the board of directors of Thermo
Electron and is generally based upon the employee's age and length of service
with Thermo Electron at the time of severance. Benefits are to be paid over a
five-year period. The benefit to be paid in the first year is determined by
applying this percentage to the employee's highest annual total remuneration
in any 12-month period during the preceding three years. This benefit is
reduced by 10% in each of the succeeding four years in which benefits are
paid. The initial percentage to be so applied to Dr. Appleton is 40.1%.
Assuming that severance benefits would have been payable under such agreements
as of April 4, 1998, Dr. Appleton would have received approximately $119,906
in the first year thereof from Thermo Electron.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
All decisions on compensation for the Corporation's executive officers are
made by the human resources committee of the board of directors (the
"Committee"). In reviewing and establishing total cash compensation and stock-
based compensation for executives, the Committee follows guidelines
established by the human resources committee of the board of directors of its
parent corporation, Thermo Electron. The executive compensation program
presently consists of annual base salary ("salary"), short-term incentives in
the form of annual cash bonuses, and long-term incentives in the form of stock
options.
The Committee believes that the compensation of executive officers should
reflect the scope of their responsibilities, the success of the Corporation,
and the contributions of each executive to that success. In addition, the
Committee believes that base salaries should approximate the mid-point of
competitive salaries derived from market surveys and that short-term and long-
term incentive compensation should reflect the performance of the Corporation
and the contributions of each executive.
External competitiveness is an important element of the Committee's
compensation policy. The competitiveness of the Corporation's total
compensation for its executives is assessed by comparing it to market data
provided by compensation consultants and by participating in annual executive
compensation surveys, primarily "Project 777," an executive compensation
survey prepared by Management Compensation Services, a division of Hewitt
Associates. The majority of firms represented in the Project 777 survey are
included in the Standard & Poor's 500 Index, but do not necessarily correspond
to the companies included in the Corporation's peer group.
Principles of internal equity are also central to the Committee's
compensation policies. Total compensation considered for the Corporation's
officers, whether cash or stock-based incentives, is also evaluated by
comparing it to compensation of other executives within the Thermo Electron
organization with comparable levels of responsibility for comparably sized
business units.
The process for determining each of these elements for the Corporation's
executive officers is outlined below. For its review of the compensation of
other officers of the Corporation, the Committee follows a substantially
similar process.
14
Base Salary
Base salaries are set to approximate the mid-point of competitive salaries
for similar organizations of comparable size and complexity to the
Corporation. Executive salaries are adjusted gradually over time and only as
necessary to meet this objective. Increases in base salary may be moderated by
other considerations, such as geographic or regional market data, industry
trends or internal fairness within the Corporation and Thermo Electron. It is
the Committee's intention that over time the base salaries for the chief
executive officer and the other named executive officers will approach the
mid-point of competitive data. The salary increases in fiscal 1998 for the
chief executive officer and the other named executive officers generally
reflect this practice of gradual increases and moderation.
Cash Bonus
The Committee establishes a median potential bonus for each executive by
using the market data on total cash compensation from the same executive
compensation surveys as used to determine salaries for executives.
Specifically, the median potential bonus plus the salary of an executive
officer is approximately equal to the mid-point of competitive total cash
compensation for a similar position and level of responsibility in businesses
having comparable sales and complexity to the Corporation. The actual bonus
awarded to an executive officer may range from zero to three times the median
potential bonus. The value within the range (the bonus multiplier) is
determined at the end of each year by the Committee in its discretion. The
Committee exercises its discretion by evaluating each executive's performance
using a methodology developed by its parent corporation, Thermo Electron, and
applied throughout the Thermo Electron organization. The methodology
incorporates measures of operating returns which are designed to measure
profitability and contributions to shareholder value, and earnings growth, and
are measures of corporate and divisional performance that are evaluated using
graphs developed by Thermo Electron intended to reward performance that is
perceived as above average and to penalize performance that is perceived as
below average. The measures of operating returns used in the Committee's
determinations in fiscal 1998 measured return on net assets, growth in income,
and return on sales, and the Committee's determinations also included a
subjective evaluation of the contributions of each executive that are not
captured by operating measures but are considered important to the creation of
long-term value for the Stockholders. These measures of achievements are not
financial targets that are met, not met or exceeded. The relative weighting of
the operating measures and subjective evaluation varies among the executives,
depending on their roles and responsibilities within the organization.
The bonuses for named executive officers approved by the Committee with
respect to fiscal 1998 performance in each instance were below the median
potential bonus, except for one executive officer whose bonus exceeded the
median potential bonus, due to the measures of operating returns used in the
Committee's determinations as described above. However, certain of the named
executive officers elected to forego their bonuses for fiscal 1998 in light of
the stock price performance of the Corporation.
Stock Option Program
The primary goal of the Corporation and its parent companies is to excel in
the creation of long-term value for the Stockholders. The principal incentive
tool used to achieve this goal is the periodic award to key employees of
options to purchase common stock of the Corporation and other Thermo Electron
companies.
The Committee and management believe that awards of stock options to
purchase the shares of both the Corporation and other companies within the
Thermo Electron group of companies accomplish many objectives. The grant of
options to key employees encourages equity ownership in the Corporation, and
closely aligns management's interests to the interests of all the
Stockholders. The emphasis on stock options also results in management's
compensation being closely linked to stock performance. In addition, because
they are subject to
15
vesting periods of varying duration and to forfeiture if the employee leaves
the Corporation prematurely, stock options are an incentive for key employees
to remain with the Corporation long-term. The Committee believes stock option
awards in its parent companies, Thermo TerraTech and Thermo Electron, and the
other majority-owned subsidiaries of Thermo Electron, are important tools in
providing incentives for performance within the entire organization.
In determining awards, the Committee considers for each officer the annual
value of all options to purchase shares of the Corporation and other companies
within the Thermo Electron organization that vest in the next year and
compares the individual's total compensation using this value to competitive
data. The Committee uses a modified Black-Scholes option pricing model to
determine the value of an option award. In addition, the Committee considers
the aggregate amount of net awards to purchase shares of Common Stock granted
to all employees over the last five years to monitor the number of aggregate
awards to all employees. In reviewing the aggregate number of awards, the
Committee considers such factors as the size of the company, its stage of
development and its growth strategy, as well as the aggregate awards and
option practices of comparably situated companies.
The Committee periodically awards stock options based on its assessment of
the total compensation of each executive, the actual and anticipated
contributions of each executive (which includes a subjective assessment by the
Committee of the value of the executive's future potential within the
organization), as well as the value of previously awarded options as described
above. Such discretionary option awards were made to certain of the named
executive officers in fiscal 1998. Certain options awarded in fiscal 1998 to
the named executive officers with respect to the common stock of the
Corporation's parent company, Thermo Electron, were made pursuant to a program
that awards options to certain eligible employees annually based on the number
of shares of Thermo Electron common stock held by the employee, as an
incentive to buy and hold shares of Thermo Electron common stock.
STOCK OWNERSHIP AND RETENTION POLICIES
The Corporation's compensation program is also designed to encourage
executives to own shares of the Corporation's Common Stock. The Committee
believes that encouraging executives to retain stock acquired through its
stock option program provides additional incentive for executive officers to
follow strategies designed to maximize long-term value to Stockholders.
There are several elements to the Corporation's stock retention program. For
example, the Committee annually awards stock options based upon an executive's
ownership of the Corporation's Common Stock and unexercised, vested rights to
acquire such stock during the prior year. These options awards are independent
of the award of stock options as an incentive for management performance. In
1997, the Committee granted options to purchase Common Stock to the named
executive officers under this program. These options have three-year terms and
vest 100% on the second anniversary of the date of grant. Certain awards to
the named executive officers in 1997 to purchase shares of the common stock of
Thermo Electron and Thermedics were made by those companies under similar
programs that award options to certain eligible employees annually based on
the number of shares of the common stock of Thermo Electron or Thermedics held
by such employees as an incentive to buy and hold such company's shares.
The Committee established a stock holding policy for executive officers of
the Corporation in fiscal 1997 that required executive officers to own a
multiple of their compensation in shares of the Corporation's Common Stock.
For the chief executive officer, the multiple was one times his base salary
and reference bonus for the calendar year. For all other officers, the
multiple was one times the officer's base salary. The Committee deemed it
appropriate to permit officers to achieve these ownership levels over a three-
year period. The policy was amended in 1998 to apply only to the chief
executive officer.
In order to assist officers in complying with the policy, the Committee also
adopted in fiscal 1997 a stock holding assistance plan under which the
Corporation was authorized to make interest-free loans to officers to
16
enable them to purchase shares of the Common Stock in the open market. The
loans are required to be repaid upon the earlier of demand or the fifth
anniversary of the grant date, unless otherwise authorized by the Committee.
During fiscal 1998, Mr. Powell, a vice president of the Corporation, received
loans in the principal amount of $59,940.50 under this plan, the entire amount
of which was outstanding as of June 29, 1998. In fiscal 1998, Mr. Pedersen, a
vice president of the Corporation, received loans in the principal amount of
$45,828.50 under this plan, the entire amount of which was outstanding as of
June 29, 1998. In fiscal 1998, Mr. Lousararian, a vice president of the
Corporation, received loans in the principal amount of $47,572.50 under the
plan, the entire amount of which was outstanding as of June 29, 1998. In
fiscal 1998, Dr. Appleton, formerly the Corporation's chief executive officer,
received loans in the principal amount of $61,867.50, the entire amount of
which was outstanding as of June 29, 1998. This plan was also amended in 1998
to apply only to the chief executive officer. See "Relationship with
Affiliates--Stock Holding Assistance Plan."
The Committee also has adopted a policy requiring its executive officers to
hold shares of the Corporation's Common Stock acquired upon the exercise of
stock options granted by the Corporation. Under this policy, executive
officers are required to hold one-half of their net option exercises over a
period of five years. The net option exercise is determined by calculating the
number of shares acquired upon exercise of a stock option, after deducting the
number of shares that could have been traded to exercise the option and the
number of shares that could have been surrendered to satisfy tax withholding
obligations attributable to the exercise of the options.
POLICY ON DEDUCTIBILITY OF COMPENSATION
The Committee has also considered the application of Section 162(m) of the
Internal Revenue Code to the Corporation's compensation practices. Section
162(m) limits the tax deduction available to public companies for annual
compensation paid to senior executives in excess of $1 million, unless the
compensation qualifies as "performance based" or is otherwise exempt from
Section 162(m). The annual cash compensation paid to individual executives
does not approach the $1 million threshold, and it is believed that the stock
incentive plans of the Corporation qualify as "performance based." Therefore,
the Committee does not believe any further action is necessary in order to
comply with Section 162(m). From time to time, the Committee will reexamine
the Corporation's compensation practices and the effect of Section 162(m).
FISCAL 1998 CEO COMPENSATION
Dr. John P. Appleton served as the Corporation's chief executive officer for
less than two months of fiscal 1998, although he continues to serve as
chairman of the board. On May 14, 1997, Mr. Jeffrey L. Powell was promoted to
the position of chief executive officer from chief operating officer. Cash
compensation for Dr. Appleton is reviewed by both the Committee and the human
resources committees of the boards of directors of Thermo TerraTech and Thermo
Electron, due to his responsibilities at the Corporation, as chief executive
officer of Thermo TerraTech and as a vice president of Thermo Electron. Each
committee evaluates Dr. Appleton's performance and proposed compensation using
a process similar to that used for the other executive officers of the
Corporation. At the Thermo Electron and Thermo TerraTech levels, Dr. Appleton
is evaluated on his performance related to the Corporation as well as other
operating units of Thermo Electron and Thermo TerraTech for which he is
responsible, weighted in accordance with the amount of time and effort devoted
to each operation. The Corporation's Committee then reviews the analysis and
determinations of the Thermo TerraTech and Thermo Electron committees, makes
an independent assessment of Dr. Appleton's performance as it relates to the
Corporation using criteria similar to those used for the other executive
officers of the Corporation, and then agrees to an appropriate allocation of
Dr. Appleton's compensation to be paid by the Corporation.
In May 1998, the Committee conducted its review of Dr. Appleton's proposed
bonus for fiscal 1998 performance. Dr. Appleton's bonus for fiscal 1998
performance approved by the Committee was below the median potential bonus,
due to the measures of operating returns used in the Committee's
determinations, as described under the caption "Cash Bonus." Dr. Appleton
elected to forego his bonus in light of the
17
Corporation's operating and stock price performance in fiscal 1998. In
December 1997, the Committee agreed to an allocation of 20% of Dr. Appleton's
salary for calendar 1997 to the Corporation, based on his responsibilities at
the Corporation as chief executive officer and chairman.
The salary and bonus of Mr. Powell, during his tenure as the president and
chief executive officer of the Corporation, were established using the same
criteria as for the salaries and bonuses of the Corporation's other named
executive officers. His bonus for fiscal 1998 performance approved by the
Committee was below the median potential bonus, due to the measures of
operating returns used in the Committee's determinations, as described under
the caption "Cash Bonus." Mr. Powell elected to forego his bonus in light of
the Corporation's operating and stock price performance in fiscal 1998.
Awards to the chief executive officer of options to purchase shares of
Common Stock are reviewed and determined periodically by the Committee using
criteria similar to those used for other executive officers of the
Corporation, as described above under the caption "Stock Option Programs." No
award of options to purchase shares of the Common Stock was made by the
Committee to either Dr. Appleton or Mr. Powell in fiscal 1998.
In addition to stock option awards by the Committee, Mr. Powell was awarded
options to purchase shares of the Common Stock of majority-owned subsidiaries
of Thermo Electron or Thermo TerraTech from time to time due to his position
as a chief executive officer of a majority-owned subsidiary of Thermo Electron
or Thermo TerraTech. The awards to Mr. Powell in fiscal 1998 of options to
purchase the common stock of Metrika Systems Corporation, ONIX Systems Inc.,
Thermedics Detection Inc., Thermo Information Solutions Inc., Thermo Trilogy
Corporation, Thermo Vision Corporation, and Trex Communications Corporation
were made under this stock option program. The award of options to purchase
the common stock of Randers were made to Mr. Powell in his capacity as vice
president of Thermo TerraTech, the Corporation's parent.
Mr. Powell also received an award of options to purchase 700 shares of the
common stock of Thermo Electron in fiscal 1998 made by the human resources
committee of Thermo Electron under a program which awards options to certain
eligible employees annually based on the number of shares of the common stock
of Thermo Electron held by the employee, as an incentive to buy and hold
Thermo Electron's common stock.
Dr. Frank E. Morris (Chairman)
Dr. Elias P. Gyftopoulos
Mr. Fred Holubow
18
COMPARATIVE PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Corporation include
in this proxy statement a line-graph presentation comparing cumulative, five-
year shareholder returns for the Corporation's Common Stock with a broad-based
market index and either a nationally recognized industry standard or an index
of peer companies selected by the Corporation. The Corporation's Common Stock
has been publicly traded only since December 9, 1993 and, as a result, the
following graph commences as of such date. The Corporation has compared its
performance with the American Stock Exchange Market Value Index and a peer
group of companies consisting of Ecology & Environmental Inc., Fluor Daniel
GTI, Inc. (formerly Groundwater Technology Inc.), Safety Kleen Corp., TRC Cos.
Inc. and Roy F. Weston Inc.
COMPARISON OF TOTAL RETURN AMONG THERMO REMEDIATION INC.,
THE AMERICAN STOCK EXCHANGE MARKET VALUE INDEX AND THE
CORPORATION'S PEER GROUP FROM DECEMBER 9, 1993 TO APRIL 3, 1998
[GRAPH APPEARS HERE]
12/9/93 3/31/94 3/31/95 3/29/96 3/27/97 4/3/98
- --------------------------------------------------------------------------------
THN 100 108 158 173 89 82
- --------------------------------------------------------------------------------
AMEX 100 95 99 122 124 160
- --------------------------------------------------------------------------------
PEER GROUP 100 90 105 89 93 172
- --------------------------------------------------------------------------------
The total return for the Corporation's Common Stock (THN), the American
Stock Exchange Market Value Index (AMEX) and the Corporation's peer group
(PEER GROUP) assumes the reinvestment of dividends. Cash dividends of $.10 per
share of Common Stock were paid on September 15, 1995, and March 20, 1996,
respectively, to shareholders of record on August 30, 1995, and March 1, 1996,
respectively. Cash dividends of $.10 per share of Common Stock were paid on
September 5, 1996, and March 24, 1997, respectively, to shareholders of record
on August 22, 1996, and March 3, 1997, respectively. Cash dividends of $.10
per share of Common Stock were paid on September 10, 1997, and March 23, 1998,
respectively, to shareholders of record on August 15, 1997, and March 2, 1998,
respectively. No assurance can be given, however, that the Corporation will
continue to pay dividends in the future. The American Stock Exchange Market
Value Index tracks the aggregate performance of equity securities of companies
listed on the American Stock Exchange ("AMEX"). The Corporation's Common Stock
is traded on the AMEX under the ticker symbol "THN."
19
RELATIONSHIP WITH AFFILIATES
Thermo Electron has adopted a strategy of selling a minority interest in
subsidiary companies to outside investors as an important tool in its future
development. As part of this strategy, Thermo TerraTech has created the
Corporation as a publicly held subsidiary, and Thermo Electron and certain of
its subsidiaries have created several other privately and publicly held
subsidiaries. From time to time, Thermo Electron and its subsidiaries will
create other majority-owned subsidiaries as part of its spinout strategy. (The
Corporation and the other majority-owned Thermo Electron subsidiaries are
hereinafter referred to as the "Thermo Subsidiaries.")
Thermo Electron and each of the Thermo Subsidiaries recognize that the
benefits and support that derive from their mutual affiliation are essential
elements of their individual performance. Accordingly, Thermo Electron and
each of the Thermo Subsidiaries have adopted the Thermo Electron Corporate
Charter (the "Charter") to define the relationships and delineate the nature
of such cooperation among themselves. The purpose of the Charter is to ensure
that (1) all of the companies and their stockholders are treated consistently
and fairly, (2) the scope and nature of the cooperation among the companies,
and each company's responsibilities, are adequately defined, (3) each company
has access to the combined resources and financial, managerial and
technological strengths of the others, and (4) Thermo Electron and the Thermo
Subsidiaries, in the aggregate, are able to obtain the most favorable terms
from outside parties.
To achieve these ends, the Charter identifies the general principles to be
followed by the companies, addresses the role and responsibilities of the
management of each company, provides for the sharing of group resources by the
companies and provides for centralized administrative, banking and credit
services to be performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by members,
coordinating the access of Thermo Electron and the Thermo Subsidiaries (the
"Thermo Group") to external financing sources, ensuring compliance with
external financial covenants and internal financial policies, assisting in the
formulation of long-range planning and providing other banking and credit
services. Pursuant to the Charter, Thermo Electron may also provide guarantees
of debt or other obligations of the Thermo Subsidiaries or may obtain external
financing at the parent level for the benefit of the Thermo Subsidiaries. In
certain instances, the Thermo Subsidiaries may provide credit support to, or
on behalf of, the consolidated entity or may obtain financing directly from
external financing sources. Under the Charter, Thermo Electron is responsible
for determining that the Thermo Group remains in compliance with all covenants
imposed by external financing sources, including covenants related to
borrowings of Thermo Electron or other members of the Thermo Group, and for
apportioning such constraints within the Thermo Group. In addition, Thermo
Electron establishes certain internal policies and procedures applicable to
members of the Thermo Group. The cost of the services provided by Thermo
Electron to the Thermo Subsidiaries is covered under existing corporate
services agreements between Thermo Electron and each of the Thermo
Subsidiaries.
The Charter presently provides that it shall continue in effect so long as
Thermo Electron and at least one Thermo Subsidiary participate. The Charter
may be amended at any time by agreement of the participants. Any Thermo
Subsidiary, including the Corporation, can withdraw from participation in the
Charter upon 30 days' prior notice. In addition, Thermo Electron may terminate
a subsidiary's participation in the Charter in the event the subsidiary ceases
to be controlled by Thermo Electron or ceases to comply with the Charter or
the policies and procedures applicable to the Thermo Group. A withdrawal from
the Charter automatically terminates the corporate services agreement and tax
allocation agreement (if any) in effect between the withdrawing company and
Thermo Electron. The withdrawal from participation does not terminate
outstanding commitments to third parties made by the withdrawing company, or
by Thermo Electron or other members of the Thermo Group, prior to the
withdrawal. In addition, a withdrawing company is required to continue to
comply with all policies and procedures applicable to the Thermo Group and to
provide certain administrative functions mandated by Thermo Electron so long
as the withdrawing company is controlled by or affiliated with Thermo
Electron.
As provided in the Charter, the Corporation and Thermo Electron have entered
into a Corporate Services Agreement (the "Services Agreement") under which
Thermo Electron's corporate staff provides certain administrative services,
including certain legal advice and services, risk management, certain employee
benefit
20
administration, tax advice and preparation of tax returns, centralized cash
management and certain financial and other services to the Corporation. The
Corporation was assessed an annual fee equal to 1.0% of the Corporation's
revenues for these services for calendar 1996 and 1997. The annual fee has
been reduced to 0.8% of the Corporation's total revenues for calendar 1998.
The fee is reviewed annually and may be changed by mutual agreement of the
Corporation and Thermo Electron. During fiscal 1998, Thermo Electron assessed
the Corporation [$1,148,000] in fees under the Services Agreement. Management
believes that the charges under the Services Agreement are reasonable and that
the terms of the Services Agreement are fair to the Corporation. For items
such as employee benefit plans, insurance coverage and other identifiable
costs, Thermo Electron charges the Corporation based on charges attributable
to the Corporation. The Services Agreement automatically renews for successive
one-year terms, unless canceled by the Corporation upon 30 days' prior notice.
In addition, the Services Agreement terminates automatically in the event the
Corporation ceases to be a member of the Thermo Group or ceases to be a
participant in the Charter. In the event of a termination of the Services
Agreement, the Corporation will be required to pay a termination fee equal to
the fee that was paid by the Corporation for services under the Services
Agreement for the nine-month period prior to termination. Following
termination, Thermo Electron may provide certain administrative services on an
as-requested basis by the Corporation or as required in order to meet the
Corporation's obligations under Thermo Electron's policies and procedures.
Thermo Electron will charge the Corporation a fee equal to the market rate for
comparable services if such services are provided to the Corporation following
termination.
As of April 4, 1998, [$19,674,000] of the Corporation's cash equivalents
were invested in a repurchase agreement with Thermo Electron. Under this
agreement, the Corporation in effect lends excess cash to Thermo Electron,
which Thermo Electron collateralizes with investments principally consisting
of corporate notes, U.S. government agency securities, money market funds,
commercial paper and other marketable securities, in the amount of at least
103% of such obligation. The Corporation's funds subject to the repurchase
agreement are readily convertible into cash by the Corporation and have a
maturity of three months or less. The repurchase agreement earns a rate based
on the 90-day Commercial Paper Composite Rate plus 25 basis points, set at the
beginning of each quarter.
As of April 4, 1998, the Corporation owed Thermo TerraTech [$2,650,000].
Thermo Electron, primarily through its majority-owned subsidiary Thermo
TerraTech, owned approximately 71.1% of the Common Stock outstanding as of May
30, 1998.
STOCK HOLDING ASSISTANCE PLAN
In fiscal 1997, the Corporation adopted a stock holding policy which
requires its executive officers to acquire and hold a minimum number of shares
of Common Stock. In order to assist the executive officers in complying with
the policy, the Corporation also adopted a stock holding assistance plan under
which it may make interest-free loans to certain key employees, including its
executive officers, to enable such employees to purchase the Common Stock in
the open market. During fiscal 1998, Mr. Powell, a vice president of the
Corporation, received loans in the principal amount of $59,940.50 under this
plan to purchase 10,000 shares, the entire amount of which was outstanding as
of June 29, 1998. In fiscal 1998, Mr. Pedersen, a vice president of the
Corporation, received loans in the principal amount of $45,828.50 under this
plan to purchase 7,401 shares, the entire amount of which was outstanding as
of June 29, 1998. In fiscal 1998, Mr. Lousararian, a vice president of the
Corporation, received loans in the principal amount of $47,572.50 under the
plan to purchase 7,700 shares, the entire amount of which was outstanding as
of June 29, 1998. In fiscal 1998, Dr. Appleton, formerly the Corporation's
chief executive officer, received loans in the principal amount of $61,867.50
under the plan to purchase 10,000 shares, the entire amount of which was
outstanding as of June 29, 1998. This plan was also amended in 1998 to apply
only to the chief executive officer. See "Relationship with Affiliates--Stock
Holding Assistance Plan." Loans will be repaid upon the earlier of demand or
the fifth anniversary of the date of the loan, unless otherwise authorized by
the human resources committee of the board of directors. This policy and plan
were amended in 1998 to apply only to the chief executive officer of the
Corporation in the future.
21
PROPOSAL 2
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO
CHANGE THE NAME OF THE CORPORATION
The board of directors has proposed an amendment to the Corporation's
Certificate of Incorporation to change the name of the Corporation to
"ThermoRetec Corporation" and has recommended that the stockholders approve
the amendment. The board of directors has recommended this change in the
Corporation's name to assist the Corporation in creating a broader market
identity and presence for the Corporation as a whole, taking advantage of the
synergies between its respective parts. Management believes that changing the
Corporation's name to ThermoRetec Corporation will result in an opportunity
for an enhanced market identity and presence for the Corporation.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
It is proposed that the name change be effected by amending Article First of
the Corporation's Certificate of Incorporation to read as follows: "The name of
the corporation is: ThermoRetec Corporation."
RECOMMENDATION
The board of directors believes that the name change to ThermoRetec
Corporation is in the best interest of the Corporation and its Stockholders
and recommends that the Stockholders vote FOR amending the Corporation's
Certificate of Incorporation. Thermo Electron, which beneficially owned
approximately 71.1% of the outstanding voting stock of the Corporation on May
30, 1998 has indicated its intention to vote for the proposal.
The affirmative vote of a majority of the Common Stock outstanding and
entitled to vote as of the record date is required to adopt the amendment of
Article First of the Corporation's Certificate of Incorporation. The board of
directors recommends that you vote FOR adoption of the proposed name change.
If not otherwise specified, proxies will be voted FOR approval of this
proposal.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has appointed Arthur Andersen LLP as independent
public accountants for fiscal 1998. Arthur Andersen LLP has acted as
independent public accountants for the Corporation since its inception in
1991. Representatives of that firm are expected to be present at the Meeting,
will have the opportunity to make a statement if they desire to do so and will
be available to respond to questions. The board of directors has established
an audit committee, presently consisting of two outside directors, the purpose
of which is to review the scope and results of the audit.
OTHER ACTION
Management is not aware at this time of any other matters that will be
presented for action at the Meeting. Should any such matters be presented, the
proxies grant power to the proxy holders to vote shares represented by the
proxies in the discretion of such proxy holders.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the 1999 Annual
Meeting of the Stockholders of the Corporation must be received by the
Corporation for inclusion in the proxy statement and form of proxy relating to
that meeting no later than March 30, 1999.
22
SOLICITATION STATEMENT
The cost of this solicitation of proxies will be borne by the Corporation.
Solicitation will be made primarily by mail, but regular employees of the
Corporation may solicit proxies personally, by telephone or by telegram.
Brokers, nominees, custodians and fiduciaries are requested to forward
solicitation materials to obtain voting instructions from beneficial owners of
stock registered in their names, and the Corporation will reimburse such
parties for their reasonable charges and expenses in connection therewith.
Concord, Massachusetts
July 23, 1998
23
1261-PS-98
FORM OF PROXY
THERMO REMEDIATION INC
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
SEPTEMBER 15, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints John P. Appleton, John N. Hatsopoulos and
Melissa F. Riordan, or any one of them in the absence of the others, as
attorneys and proxies of the undersigned, with full power of substitution, for
and in the name of the undersigned, to represent the undersigned at the Annual
Meeting of the Stockholders of Thermo Remediation Inc., a Delaware corporation
(the "Company"), to be held at the offices of Thermo Electron Corporation, 81
Wyman Street, Waltham, Massachusetts, on Tuesday, September 15, 1998, at 2:00
p.m., and at any adjournment or postponement thereof, and to vote all shares of
common stock of the Company standing in the name of the undersigned on July 23,
1998, with all of the powers the undersigned would possess if personally present
at such meeting:
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
Please mark
[ x ] votes as in this
example.
1. ELECTION OF DIRECTORS
FOR [ ] WITHHELD [ ]
______________________________________
FOR all nominees except as noted above
NOMINEES: John P. Appleton, Robert W. Dunlap, Elias P. Gyftopoulos, Fred
Holubow, Theo Melas-Kyriazi, Frank E. Morris and William A. Rainville
2. To amend the Corporation's Certificate of
Incorporation to change the name of the Corporation FOR AGAINST ABSTAIN
to ThermoRetec Corporation. [ ] [ ] [ ]
4. In their discretion on such other matters as may properly come before the
Meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS SET FORTH
ABOVE IF NO INSTRUCTION TO THE CONTRARY IS INDICATED OR IF NO INSTRUCTION IS
GIVEN.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Copies of the Notice of Meeting and of the Proxy Statement have been received
by the undersigned.
PLEASE PROMPTLY DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE_______________________________________ DATE_________________
SIGNATURE_______________________________________ DATE_________________
(NOTE: Please sign exactly as your name appears hereon. Executors,
administrators, trustees, etc. should so indicate when signing, giving full
title as such. If signer is a corporation, execute in full corporate name
by authorized officer. If shares are held by joint tenants or as community
property, both holders should sign.).