-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TE9S5lKBrn5CQmPr25wBUfPX7rbfs0rvFilIODHXxcajcLA2nP0EqRu1c39nWYeV Bb0UeyXBaIc+VL6qmMVuJQ== 0000950135-00-001322.txt : 20000313 0000950135-00-001322.hdr.sgml : 20000313 ACCESSION NUMBER: 0000950135-00-001322 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 20000310 GROUP MEMBERS: CORPAK INC. GROUP MEMBERS: DETECTION ACQUISITION, INC. GROUP MEMBERS: THERMEDICS INC GROUP MEMBERS: THERMO ELECTRON CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: THERMEDICS DETECTION INC CENTRAL INDEX KEY: 0001012555 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 043106698 STATE OF INCORPORATION: MA FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-51365 FILM NUMBER: 565254 BUSINESS ADDRESS: STREET 1: 220 MILL RD CITY: CHELMSFORD STATE: MA ZIP: 01824 BUSINESS PHONE: 5082512000 MAIL ADDRESS: STREET 1: 220 MILL ROAD CITY: CHELMSFORD STATE: MA ZIP: 01824-4178 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: THERMEDICS DETECTION INC CENTRAL INDEX KEY: 0001012555 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 043106698 STATE OF INCORPORATION: MA FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-51365 FILM NUMBER: 565255 BUSINESS ADDRESS: STREET 1: 220 MILL RD CITY: CHELMSFORD STATE: MA ZIP: 01824 BUSINESS PHONE: 5082512000 MAIL ADDRESS: STREET 1: 220 MILL ROAD CITY: CHELMSFORD STATE: MA ZIP: 01824-4178 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: THERMEDICS INC CENTRAL INDEX KEY: 0000721356 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 042788806 STATE OF INCORPORATION: MA FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 470 WILDWOOD ST STREET 2: P O BOX 2697 CITY: WOBURN STATE: MA ZIP: 01888-1799 BUSINESS PHONE: 7819383786 MAIL ADDRESS: STREET 1: 81 WYMAN STREET STREET 2: P.O. BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02254 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: THERMEDICS INC CENTRAL INDEX KEY: 0000721356 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 042788806 STATE OF INCORPORATION: MA FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 470 WILDWOOD ST STREET 2: P O BOX 2697 CITY: WOBURN STATE: MA ZIP: 01888-1799 BUSINESS PHONE: 7819383786 MAIL ADDRESS: STREET 1: 81 WYMAN STREET STREET 2: P.O. BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02254 SC TO-T 1 THERMEDICS DETECTION INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- SCHEDULE TO (Rule 14d-100) TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 ----------------------- THERMEDICS DETECTION INC. (Name of Subject Company) DETECTION ACQUISITION, INC. (Offeror) CORPAK INC. (Offeror) THERMEDICS INC. (Offeror) THERMO ELECTRON CORPORATION (Offeror) COMMON STOCK, PAR VALUE $0.10 PER SHARE (Title of Class of Securities) CUSIP 88355E 10 5 (CUSIP Number of Class of Securities) Seth H. Hoogasian, Esq. General Counsel Thermo Electron Corporation 81 Wyman Street Waltham, Massachusetts 02454-9046 (781) 622-1000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons) with a copy to: David E. Redlick, Esq. Hale and Dorr LLP 60 State Street Boston, Massachusetts 02109 (617) 526-6000 ----------------------- 2 CALCULATION OF FILING FEE Transaction Valuation(1): $26,472,976 Amount of Filing Fee(2): $5,294.60 - --------------------
(1) For purposes of calculating fee only. This amount is based upon (a) the maximum number of Shares to be purchased pursuant to the Offer and (b) the price offered per Share. (2) The amount of the filing fee, calculated in accordance with Regulation 240.0-11 under the Securities Exchange Act of 1934, as amended, equals 1/50 of one percent of the Transaction Valuation. [ ] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Not applicable Form or Registration No.: Not applicable Filing Party: Not applicable Date Filed: Not applicable
[ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [X] third-party tender offer subject to Rule 14d-1. [ ] issuer tender offer subject to Rule 13e-4. [X] going-private transaction subject to Rule 13e-3. [X] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: [ ] SCHEDULE 13D INFORMATION ----------------------------------------------------------------------- 1. NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Thermo Electron Corporation IRS No. 04-2209186 ----------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] ----------------------------------------------------------------------- 3. SEC USE ONLY ----------------------------------------------------------------------- 4. SOURCE OF FUNDS* WC ----------------------------------------------------------------------- 3 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] ----------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION State of Delaware ----------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES BENEFICIALLY 17,180,198 OWNED BY ----------------------------------------------------- EACH REPORTING 8. SHARED VOTING POWER PERSON WITH 0 ----------------------------------------------------------------------- 9. SOLE DISPOSITIVE POWER 17,180,198 ----------------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 ----------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,180,198 ----------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] ----------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 88.9% ----------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON* CO ----------------------------------------------------------------------- 4 This Tender Offer Statement on Schedule TO (the "Statement")relates to the offer by Detection Acquisition, Inc., a Delaware corporation (the "Purchaser") and an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts corporation ("Thermedics"), to purchase all outstanding shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation (the "Company"), at a purchase price of $8.00 per Share net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 10, 2000 (the "Offer to Purchase"), a copy of which is attached hereto as Exhibit 12(a)(1), and in the related Letter of Transmittal (which, together with the Offer to Purchase, constitute the "Offer"), a copy of which is attached hereto as Exhibit 12(a)(2). The information in the Offer to Purchase under the captions "Summary", "Introduction", "Special Factors", "The Tender Offer", "Certain Federal Income Tax Consequences", "Price Range Of The Shares; Dividends", "Certain Information Concerning The Company", "Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron", "Source And Amount Of Funds", "The Merger; Appraisal Rights", "Miscellaneous" and "Fees And Expenses" and Schedules I, II and III to the Offer to Purchase are incorporated herein by reference as set forth below. ITEM 1. SUMMARY TERM SHEET. See the section of the Offer to Purchase captioned "Summary". ITEM 2. SUBJECT COMPANY INFORMATION. (a) See the section of the Offer to Purchase captioned "Certain Information Concerning The Company". (b) See the section of the Offer to Purchase captioned "Introduction". (c) See the section of the Offer to Purchase captioned "Price Range Of The Shares; Dividends". ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. (a) See the section of the Offer to Purchase captioned "Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron" and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron"). (b) See the section of the Offer to Purchase captioned "Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron" and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron"). -1- 5 (c) See the section of the Offer to Purchase captioned "Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron" and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron"). ITEM 4. TERMS OF THE TRANSACTION. (a) See the sections of the Offer to Purchase captioned "Summary", "Introduction", "Special Factors - The Merger", "Special Factors - Other Possible Purchases Of Shares", "The Tender Offer - Terms Of The Offer; Expiration Date", "The Tender Offer - Acceptance For Payment And Payment For Shares", "The Tender Offer - Procedures For Accepting The Offer And Tendering Shares", "The Tender Offer - Withdrawal Rights" and "Certain Federal Income Tax Consequences". ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. (a) See the sections of the Offer to Purchase captioned "Special Factors - Conflicts Of Interest - Executive Officers and Directors of the Company" and "Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron - Certain Transactions" and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron"). (b) See the sections of the Offer to Purchase captioned "Special Factors - Background To The Offer And The Merger", "Special Factors - Conduct Of The Company's Business After The Offer And The Merger" and "Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron - Certain Transactions" and Schedule II to the Offer to Purchase ("Information Concerning Transactions In The Common Stock Of The Company"). ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS. (a) and (c)(1)-(7) See the sections of the Offer to Purchase captioned "Introduction", "Special Factors - Background To The Offer And The Merger", "Special Factors - Reasons For The Offer And The Merger", "Special Factors - The Merger", "Special Factors - Other Possible Purchases Of Shares", "Special Factors - Certain Effects Of The Offer And The Merger", "Special Factors - Conduct Of The Company's Business After The Offer And The Merger", "Special Factors - Conduct Of The Company's Business If The Offer Is Not Completed" and "The Merger; Appraisal Rights". ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a), (b) and (d) See the section of the Offer to Purchase captioned "Source And Amount Of Funds". -2- 6 ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) See the section of the Offer to Purchase captioned "Introduction" and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron"). (b) See Schedule II to the Offer to Purchase ("Information Concerning Transactions In The Common Stock Of The Company"). ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED. (a) See the sections of the Offer to Purchase captioned "Introduction" and "Fees And Expenses". ITEM 10. FINANCIAL STATEMENTS. (a) The financial statements of the Purchaser, Corpak Inc., a Massachusetts corporation ("Corpak") and a wholly-owned subsidiary of Thermedics, Thermedics and Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"), are not material to the Offer. (b) The pro forma financial statements of the Purchaser, Corpak, Thermedics and Thermo Electron are not material to the Offer. ITEM 11. ADDITIONAL INFORMATION. (a)(1) None. (a)(2) See the sections of the Offer to Purchase captioned "Introduction", "The Tender Offer - Acceptance For Payment And Payment For Shares" and "The Tender Offer - Certain Legal Matters; Regulatory Approvals". (a)(3) See the section of the Offer to Purchase captioned "Certain Legal Matters; Regulatory Approvals." (a)(4) See the section of the Offer to Purchase captioned "Special Factors - Certain Effects Of The Offer And The Merger". (a)(5) None. (b) The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated herein by reference. ITEM 12. EXHIBITS. (a)(1) Offer to Purchase dated March 10, 2000. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. -3- 7 (a)(4) Letter from the Dealer Managers to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(6) Summary Advertisement as published on March 10, 2000. (a)(7) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(8) Press Release issued by Thermedics on January 31, 2000 (incorporated herein by reference to Exhibit 99 to the Current Report on Form 8-K of Thermedics filed with the Commission on February 1, 2000). (a)(9) Press Release issued by Thermo Electron on January 31, 2000 (incorporated herein by reference to Exhibit 99 to the Current Report on Form 8-K of Thermo Electron filed with the Commission on February 1, 2000). (a)(10) Press Release issued by Thermedics on March 10, 2000. (a)(11) Press Release issued by Thermo Electron on March 6, 2000. (b) Loan Agreement dated as of March 1, 2000 between Thermo Electron and Thermedics. (d) None. (g) Slide Presentation of Thermo Electron to Financial Analysts. (h) None. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. Item 2. Subject Company Information. (d) See the section of the Offer to Purchase captioned "Price Range Of The Shares; Dividends". (e) See the section of the Offer to Purchase captioned "Certain Information Concerning The Company". (f) See Schedule II to the Offer to Purchase ("Information Concerning Transactions In The Common Stock Of The Company"). Item 4. Terms of the Transaction. (c) None. (d) See the section of the Offer to Purchase captioned "The Merger; Appraisal Rights". (e) See the section of the Offer to Purchase captioned "Certain Information Concerning The Company". (f) Not applicable. -4- 8 Item 5. Past Contacts, Transactions, Negotiations and Agreements. (c) See the sections of the Offer to Purchase captioned "Introduction" and "Special Factors - Background To The Offer And The Merger". (e) See the sections of the Offer to Purchase captioned "Special Factors - The Merger" and "Source And Amount Of Funds". Item 6. Purposes of the Transaction and Plans or Proposals (b) See the section of the Offer to Purchase captioned "Special Factors - The Merger". (c)(8) See the section of the Offer to Purchase captioned "Special Factors - Certain Effects Of The Offer And The Merger". Item 7. Purposes, Alternatives, Reasons and Effects. (a), (b) and (c) See the sections of the Offer to Purchase captioned "Introduction", "Special Factors - Background To The Offer And The Merger", "Special Factors - Reasons For The Offer And The Merger" and "Special Factors - Position Of Thermedics And Thermo Electron As To Fairness Of The Offer And The Merger". (d) See the sections of the Offer to Purchase captioned "Special Factors - Certain Effects Of The Offer And The Merger", "Special Factors - Conduct Of The Company's Business After The Offer And The Merger", "Special Factors - Conduct Of The Company's Business If The Offer Is Not Completed", "Certain Federal Income Tax Consequences" and "The Merger; Appraisal Rights". Item 8. Fairness of the Transaction. (a), (b), (c), (d), (e) and (f) See the sections of the Offer to Purchase captioned "Special Factors - Background To The Offer And The Merger", "Special Factors - Position Of Thermedics And Thermo Electron As To Fairness Of The Offer And The Merger", "Special Factors - Summary Of The Advisors' Analysis And Opinion", "Special Factors - Certain Projected Financial Data", "Special Factors - Other Possible Purchases Of Shares" and "Special Factors - The Merger." Item 9. Reports, Opinions, Appraisals and Negotiations. (a), (b) and (c) See the sections of the Offer to Purchase captioned "Special Factors - Summary Of The Advisors' Analysis And Opinion" and "Special Factors - Certain Projected Financial Data". Item 10. Source and Amount of Funds or Other Consideration. (c) See the section of the Offer to Purchase captioned "Fees And Expenses". -5- 9 Item 12. The Solicitation or Recommendation. (d) See the section of the Offer to Purchase captioned "Special Factors - Conflicts Of Interest". (e) Except for the positions of the members of the Special Committee of the Board of Directors of the Company and the Boards of Directors of Thermo Electron and Thermedics as set forth in the sections of the Offer to Purchase captioned "Special Factors - Background To The Offer And The Merger" and "Special Factors - Position Of Thermedics And Thermo Electron As To Fairness Of The Offer And The Merger", the filing persons are not aware of any officer, director or affiliate of the Company or any person listed on Schedule I to the Offer to Purchase who has made a recommendation either in support of or against the Offer. Item 13. Financial Statements. (a)(1) The audited consolidated financial statements of the Company as of and for the fiscal years ended January 2, 1999 and January 3, 1998 are incorporated herein by reference to the Consolidated Financial Statements of the Company included as Exhibit 13 to the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1999 filed with the Securities and Exchange Commission (the "Commission") on March 16, 1999. (2) The unaudited consolidated financial statements of the Company for the three and nine month fiscal periods ended October 2, 1999 are incorporated herein by reference to Item 1 ("Financial Statements") of Part I of the Company's Quarterly Report on Form 10-Q for the quarter ended October 2, 1999 filed with the Commission on November 5, 1999. (3) See the section of the Offer to Purchase captioned "Certain Information Concerning the Company - Selected Consolidated Financial Information". (b) Pro-forma financial statements of the Company are not material to the Offer. Item 14. Persons/Assets Retained, Employed, Compensated or Used. (b) None. Item 16. Exhibits. (c) Opinion of J.P. Morgan Securities Inc. and The Beacon Group Capital Services, LLC dated January 29, 2000. (f) Statement of Appraisal Rights. See the section of the Offer to Purchase captioned "The Merger; Appraisal Rights". -6- 10 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. DETECTION ACQUISITION, INC. By: /s/ John T. Keiser _____________________________ Name: John T. Keiser Title: President CORPAK INC. By: /s/ Sandra L. Lambert _____________________________ Name: Sandra L. Lambert Title: Clerk THERMEDICS INC. By: /s/ John T. Keiser _____________________________ Name: John T. Keiser Title: President and Chief Executive Officer THERMO ELECTRON CORPORATION By: /s/ Theo Melas-Kyriazi _____________________________ Name: Theo Melas-Kyriazi Title: Vice President and Chief Financial Officer Date: March 10, 2000 -7- 11
EXHIBIT INDEX EXHIBIT DESCRIPTION 12(a)(1) Offer to Purchase dated March 10, 2000 12(a)(2) Letter of Transmittal 12(a)(3) Notice of Guaranteed Delivery 12(a)(4) Letter from the Dealer Managers to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees 12(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees 12(a)(6) Summary Advertisement as published on March 10, 2000 12(a)(7) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 12(a)(8) Press Release issued by Thermedics on January 31, 2000 (incorporated herein by reference to Exhibit 99 to the Current Report on Form 8-K of Thermedics filed with the Commission on February 1, 2000) 12(a)(9) Press Release issued by Thermo Electron on January 31, 2000 (incorporated herein by reference to Exhibit 99 to the Current Report on Form 8-K by Thermo Electron filed with the Commission on February 1, 2000) 12(a)(10) Press Release issued by Thermedics on March 10, 2000 12(a)(11) Press Release issued by Thermo Electron on March 6, 2000 12(b) Loan Agreement dated March 1, 2000 between Thermo Electron and Thermedics 12(c) Opinion of J.P. Morgan Securities Inc. and The Beacon Group Capital Services, LLC dated January 29, 2000 12(d) Not applicable 12(e) Not applicable 12(f) Summary of Appraisal Rights (Included in Exhibit 12(a)(1) in the section captioned "The Merger; Appraisal Rights") 12(g) Slide Presentation of Thermo Electron to Financial Analysts 12(h) Not applicable
EX-99.12(A)(1) 2 OFFER TO PURCHASE DATED MARCH 10, 2000 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. AT $8.00 NET PER SHARE BY DETECTION ACQUISITION, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THERMEDICS INC. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. (THE "COMPANY") WHICH, TOGETHER WITH SHARES OWNED BY THERMO ELECTRON CORPORATION AND ITS SUBSIDIARIES, INCLUDING THERMEDICS INC., CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE OUTSTANDING SHARES OF THE COMPANY ON THE EXPIRATION DATE. AS OF JANUARY 28, 2000, THERMO ELECTRON CORPORATION AND ITS SUBSIDIARIES OWNED AN AGGREGATE OF 17,180,198 SHARES OF THE COMPANY'S OUTSTANDING COMMON STOCK, WHICH CONSTITUTED 88.9% OF THE OUTSTANDING SHARES OF COMMON STOCK ON SUCH DATE. THE OFFER IS ALSO SUBJECT TO OTHER IMPORTANT TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. ------------------------ NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THIS OFFER, PASSED UPON THE FAIRNESS OR MERITS OF THIS OFFER OR DETERMINED WHETHER THIS OFFER TO PURCHASE IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIME. ------------------------ The Dealer Managers for the Offer are: J.P. MORGAN SECURITIES INC. AND THE BEACON GROUP CAPITAL SERVICES, LLC March 10, 2000 2 - -------------------------------------------------------------------------------- SUMMARY Before you make any decision with respect to the tender offer, you should read the following summary together with the more detailed information included elsewhere in this Offer to Purchase. This summary and the remainder of this Offer to Purchase include information regarding the tender offer, the proposed subsequent short-form merger, Thermedics Detection Inc. and the position of Thermedics Inc. and Thermo Electron Corporation regarding the fairness of the terms of the tender offer and the merger. - - PRINCIPAL TERMS OF THE TENDER OFFER AND THE MERGER. - Tender Offer For All Outstanding Shares (pages 7 and 32). Detection Acquisition, Inc., an indirect wholly-owned subsidiary of Thermedics Inc., is offering to purchase in a tender offer all of the outstanding shares of common stock of Thermedics Detection Inc. that Thermo Electron Corporation and its subsidiaries, including Thermedics, do not currently own. - Affiliation of Thermedics Detection, Detection Acquisition, Corpak, Thermedics and Thermo Electron (page 7). Thermedics Detection is a majority-owned subsidiary of Corpak Inc., which in turn is a wholly-owned subsidiary of Thermedics. Detection Acquisition is a wholly-owned subsidiary of Corpak. Thermedics is a majority-owned subsidiary of Thermo Electron. Certain officers and directors of Thermedics and Thermo Electron are also officers or directors of Thermedics Detection. See "Certain Information Concerning The Company" and "Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron." - Tender Offer Price (pages 7 and 43). The consideration being offered in the tender offer is $8.00 per share in cash. This price is equal to a premium of approximately 11.3% over the last reported sale price of Thermedics Detection common stock on the American Stock Exchange on the last trading date prior to the initial announcement, on August 12, 1998, of our intention to take Thermedics Detection private for cash or stock, and a premium of approximately 4.9% over the last reported sale price of Thermedics Detection common stock on the last trading date prior to the announcement, on December 10, 1998, of our intention to take Thermedics Detection private for cash. The last reported sale price of Thermedics Detection common stock on the American Stock Exchange on January 28, 2000, the day prior to the date that the tender offer was announced, was $7.9375 per share. The last reported sale price of Thermedics Detection common stock on the American Stock Exchange on March 8, 2000 was $7.75 per share. For more information regarding the trading range of Thermedics Detection common stock, see "Price Range Of The Shares; Dividends." - Conditions to the Tender Offer (page 37). The tender offer is subject to a number of conditions, including the condition that enough shares of Thermedics Detection common stock are tendered and not withdrawn so that on the expiration date of the tender offer Thermo Electron and its subsidiaries, including Thermedics, will together own at least 90% of Thermedics Detection's outstanding shares. Assuming that no outstanding Thermedics Detection stock options are exercised, this 90% tender condition will be met if at least 204,818 shares of Thermedics Detection common stock are validly tendered and not withdrawn prior to the expiration date of the tender offer. See "The Tender Offer--Certain Conditions Of The Offer." - Thermedics Detection Shares Outstanding; Ownership by Thermo Electron and its Subsidiaries (page 7). As of January 28, 2000, Thermedics Detection had 19,316,684 shares of common stock outstanding. In addition, options to purchase 1,009,413 shares of Thermedics Detection common stock were outstanding at such date. Thermo Electron and its subsidiaries owned in the aggregate 17,180,198 shares of Thermedics Detection common stock, or approximately 88.9% of the outstanding shares of Thermedics Detection common stock, on January 28, 2000. - Expiration of the Tender Offer (page 32). The tender offer will expire at 12:00 midnight on April 6, 2000. We can elect at any time to extend the tender offer. If we extend the tender offer, - -------------------------------------------------------------------------------- 2 3 - -------------------------------------------------------------------------------- we will issue a press release announcing the extension. See "The Tender Offer--Terms Of The Offer; Expiration Date." - Procedures for Accepting the Tender Offer and Tendering Shares (page 34). In order for your shares of Thermedics Detection common stock to be purchased in the tender offer, you must follow the procedures described in "The Tender Offer--Procedures For Accepting The Offer And Tendering Shares" and in the accompanying Letter of Transmittal prior to the expiration of the tender offer. - Payment for Tendered Shares (page 33). If all of the conditions of the tender offer are satisfied or waived and your shares of Thermedics Detection common stock are accepted for payment, we will pay you for your shares promptly after the expiration of the tender offer. See "The Tender Offer--Acceptance For Payment And Payment For Shares." - Withdrawal Rights (page 37). You may withdraw shares that you have tendered at any time on or prior to April 6, 2000, or, if the tender offer is extended, prior to the expiration of the tender offer. Unless accepted for payment on or prior to May 8, 2000, you may also withdraw shares you have tendered at any time after that date. In order for a withdrawal to be effective, American Stock Transfer & Trust Company, the depositary for the tender offer, must receive your notice of withdrawal prior to the expiration of the tender offer at one of the addresses on the back cover of this Offer to Purchase. For more information on your withdrawal rights, see "The Tender Offer--Withdrawal Rights." - Subsequent Merger (pages 27 and 52). The tender offer is the first step in Thermedics' plan to take Thermedics Detection private. If the tender offer is completed, Thermo Electron and its subsidiaries, including Thermedics, will together own at least 90% of Thermedics Detection's outstanding shares. Promptly following the closing of the tender offer, Corpak and Thermo Electron plan to contribute their shares of Thermedics Detection common stock to Detection Acquisition in exchange for common stock of Detection Acquisition. Corpak and Thermo Electron would then cause Thermedics Detection to merge with and into Detection Acquisition in a so-called "short-form" merger. In the Merger, Detection Acquisition would be the surviving corporation and would change its name to "Thermedics Detection Inc." After the merger, the surviving corporation would be owned exclusively by Thermedics, through its ownership of Corpak, and Thermo Electron. Detection Acquisition does not intend to enter into a merger agreement with Thermedics Detection or to seek the approval of the board of directors of Thermedics Detection for such merger. Stockholders of Thermedics Detection who do not tender their shares of Thermedics Detection common stock in the tender offer will not be entitled to vote their shares with respect to this merger, but will have a statutory right to demand a judicial appraisal of the fair value of their shares of Thermedics Detection common stock. See "The Merger; Appraisal Rights." The consideration in the merger would be the same $8.00 per share in cash as is payable in the tender offer. See "Special Factors--The Merger." - Other Possible Purchases of Thermedics Detection Common Stock (page 27). If, after the tender offer is completed but prior to consummation of the merger, the aggregate ownership by Thermo Electron and its subsidiaries of the outstanding shares of Thermedics Detection common stock should fall below 90% due to the exercise of outstanding options or for any other reason, Detection Acquisition intends to acquire additional shares of Thermedics Detection common stock on the open market or in privately negotiated transactions to the extent required for the aggregate ownership of Thermedics Detection common stock by Thermo Electron and its subsidiaries to equal or exceed 90%. These purchases would be made at market prices or privately negotiated prices at the time of purchase, which may be higher or lower than the price of $8.00 per share in the tender offer and the merger. See "Special Factors--Other Possible Purchases of Shares." - Source of Funds (page 51). The total amount of funds required for Detection Acquisition to purchase all of the outstanding shares of Thermedics Detection common stock pursuant to the tender offer and merger, assuming no outstanding options are exercised, and to pay related expenses - -------------------------------------------------------------------------------- 3 4 - -------------------------------------------------------------------------------- is estimated to be approximately $18.5 million. Detection Acquisition will obtain the funds to purchase the Thermedics Detection common stock in the tender offer and the merger from Thermedics as a loan or a capital contribution. Thermedics intends to use a combination of its own working capital and borrowings from Thermo Electron to fund this loan or capital contribution. Thermo Electron has committed to provide any required loan financing to Thermedics. Because the tender offer and the merger are for cash and Thermedics and Thermo Electron have access to sufficient cash to fund the tender offer and the merger, we do not believe that the financial condition of Thermedics, Thermo Electron, Corpak or Detection Acquisition is relevant to your decision whether to tender your shares in the tender offer. See "Source And Amount Of Funds." - - THERMEDICS' AND THERMO ELECTRON'S POSITION ON THE FAIRNESS OF THE OFFER AND THE MERGER (PAGE 15). - Determinations of Boards of Directors of Thermedics and Thermo Electron. The boards of directors of Thermedics and Thermo Electron determined that the terms of the tender offer and the merger are fair to the stockholders of Thermedics Detection. In considering the fairness of the tender offer and the merger from a financial point of view to Thermedics Detection's stockholders, the boards of directors of Thermedics and Thermo Electron reviewed and relied in part upon an analysis of the ranges of potential values of the shares of Thermedics Detection common stock that resulted from the application of several accepted valuation methodologies. This analysis, including the selection of valuation methodologies, was prepared by J.P. Morgan Securities Inc. and The Beacon Group Capital Services, LLC. J.P. Morgan and The Beacon Group are the financial advisors to Thermedics and Thermo Electron in connection with the tender offer and the merger and the reorganization of Thermo Electron and its subsidiaries described below. For a discussion of the factors that the boards of directors of Thermedics and Thermo Electron considered in making their determinations as to the fairness of the tender offer and the merger and a summary of the financial analysis prepared by J.P. Morgan and The Beacon Group, see "Special Factors--Position Of Thermedics And Thermo Electron As To Fairness Of The Offer And The Merger" and "Special Factors--Summary Of The Advisors' Analysis and Opinion." - Negotiations with Special Committee of Thermedics Detection Board of Directors. The boards of directors of Thermo Electron and Thermedics determined to proceed with the tender offer and short-form merger after negotiations with a special committee of the board of directors of Thermedics Detection with respect to a long-form going private merger did not result in an offer price that the special committee was prepared to recommend to Thermedics Detection's stockholders as a fair price for their shares. A long-form merger requires approval of both the board of directors and stockholders of a company, while a short-form merger may be approved by a stockholder owning 90% or more of a company's outstanding voting securities acting alone. This special committee has informed Thermedics that it has advised the board of directors of Thermedics Detection to recommend that the stockholders of Thermedics Detection reject the tender offer. On February 29, 2000, both members of the special committee resigned from the board of directors of Thermedics Detection. See "Special Factors--Background To The Offer And The Merger--Going Private Merger Discussions." - Potential Conflicts of Interest. Thermedics is the majority stockholder of Thermedics Detection. Thermo Electron is the majority stockholder of Thermedics. Some of the officers and directors of Thermedics and Thermo Electron are also officers or directors of Thermedics Detection and own shares of common stock of, or hold options to purchase shares of common stock of, Thermo Electron, Thermedics and/or Thermedics Detection. As a result, there are various potential or actual conflicts of interest in connection with the tender offer and the merger. See "Special Factors--Conflicts Of Interest." - -------------------------------------------------------------------------------- 4 5 - -------------------------------------------------------------------------------- - - CONSEQUENCES OF THE OFFER AND THE MERGER (PAGE 28). Completion of the tender offer and the merger would have the following consequences: - Thermedics and Thermo Electron would have complete control over Thermedics Detection's business. - Thermedics and Thermo Electron would own 100% of the equity interest in Thermedics Detection's business and would solely have the benefit or detriment of any change in Thermedics Detection's value. - The shares of Thermedics Detection would no longer be listed on the American Stock Exchange. - Thermedics Detection would no longer be subject to the requirements of the Securities Exchange Act of 1934, including requirements to file annual and other periodic reports or to provide the type of going-private disclosure contained in this offer to purchase. If you do not tender your shares of Thermedics Detection common stock and the tender offer is completed, your shares will remain outstanding until the subsequent merger of Detection Acquisition and Thermedics Detection. After the merger, each of your shares will, subject to statutory appraisal rights, be converted into the right to receive $8.00 in cash, without interest. - - APPRAISAL RIGHTS (PAGE 52). If you tender your shares of Thermedics Detection common stock in the tender offer, you will not be entitled to exercise statutory appraisal rights under Massachusetts law. If you do not tender your shares in the tender offer, upon the subsequent merger of Detection Acquisition and Thermedics Detection, you will have a statutory right to dissent and demand payment of the judicially appraised fair value of your Thermedics Detection shares plus a fair rate of interest, if any, from the date of the vote of the board of directors of Detection Acquisition approving the merger. This value may be more or less than the $8.00 per share cash consideration in the tender offer and the merger. See "The Merger; Appraisal Rights." - - PURPOSE OF THE TENDER OFFER (PAGE 13). On January 31, 2000, Thermo Electron announced that its board of directors had authorized its management to proceed with a major reorganization of the operations of Thermo Electron and its subsidiaries. As part of this reorganization, Thermo Electron plans to acquire the public minority interests in most of its subsidiaries that have minority investors, spin off its separation technologies and fiber-based products business and its medical products business and divest a variety of non-core businesses. The primary goal of the reorganization is for Thermo Electron and each of its spun-off subsidiaries to focus on its core business. The purpose of this tender offer and the proposed subsequent merger is to acquire the minority public interest in Thermedics Detection as part of Thermo Electron's overall reorganization and to provide Thermedics Detection's stockholders with $8.00 in cash for each of their shares of Thermedics Detection common stock. Following the tender offer and the merger, Thermo Electron plans to retain Thermedics Detection as part of Thermo Electron's core instrument business. - - FOR MORE INFORMATION (PAGES 44 AND 47). More information regarding Thermedics Detection, Thermedics and Thermo Electron is available from their public filings with the Securities and Exchange Commission. See "Certain Information Concerning the Company" and "Certain Information Concerning the Purchaser, Corpak, Thermedics and Thermo Electron." If you have any questions about the tender offer, please call the information agent, D.F. King & Co., Inc. If you are a banker or broker, call collect at (212) 269-5550. All others should call toll-free at (800) 290-6433. - -------------------------------------------------------------------------------- 5 6 TABLE OF CONTENTS
PAGE SUMMARY..................................................... 2 INTRODUCTION................................................ 7 SPECIAL FACTORS............................................. 9 THE TENDER OFFER............................................ 32 CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................... 42 PRICE RANGE OF THE SHARES; DIVIDENDS........................ 43 CERTAIN INFORMATION CONCERNING THE COMPANY.................. 44 CERTAIN INFORMATION CONCERNING THE PURCHASER, CORPAK, THERMEDICS AND THERMO ELECTRON............................ 47 SOURCE AND AMOUNT OF FUNDS.................................. 51 THE MERGER; APPRAISAL RIGHTS................................ 52 FEES AND EXPENSES........................................... 55 MISCELLANEOUS............................................... 56
SCHEDULE I MEMBERS OF THE BOARDS OF DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER, CORPAK, THERMEDICS AND THERMO ELECTRON SCHEDULE II INFORMATION CONCERNING TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY SCHEDULE III SECTIONS 86-98 OF THE MASSACHUSETTS BUSINESS CORPORATION LAW
IMPORTANT Any stockholder of the Company desiring to tender all or any portion of such stockholder's Shares (as defined herein) should either (1) complete and sign the accompanying Letter of Transmittal (or a facsimile thereof) in accordance with the Instructions in the Letter of Transmittal, have such stockholder's signature thereon guaranteed if required by the Instructions to the Letter of Transmittal, mail or deliver the Letter of Transmittal (or a manually signed facsimile) or, in the case of a book-entry transfer effected pursuant to the procedures set forth in "The Tender Offer--Procedures For Accepting The Offer And Tendering Shares," an Agent's Message (as defined herein), and any other required documents to the Depositary (as defined herein), and either deliver the certificates representing such Shares to the Depositary along with the Letter of Transmittal (or a manually signed facsimile) or deliver such Shares pursuant to the procedures for book-entry transfer set forth in "The Tender Offer--Procedures For Accepting The Offer And Tendering Shares" or (2) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such stockholder. Any stockholder having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such stockholder desires to tender such Shares. A stockholder who desires to tender Shares and whose certificates representing such Shares are not immediately available, or who cannot comply in a timely manner with the procedures for book-entry transfer, may tender such Shares by following the procedures for guaranteed delivery set forth in "The Tender Offer--Procedures For Accepting The Offer And Tendering Shares." Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or other tender offer materials may be directed to the Information Agent or the Dealer Managers, at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer. 6 7 TO THE HOLDERS OF COMMON STOCK OF THERMEDICS DETECTION INC.: INTRODUCTION Detection Acquisition, Inc. (the "Purchaser"), a Delaware corporation and an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts corporation ("Thermedics"), hereby offers to purchase all outstanding shares of common stock, par value $.10 per share (the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation (the "Company"), at a purchase price of $8.00 per Share (the "Offer Price"), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer"). The Purchaser is a wholly-owned subsidiary of Corpak Inc., a Massachusetts corporation ("Corpak"). Corpak is a wholly-owned subsidiary of Thermedics. Thermedics is a majority-owned subsidiary of Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"). THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES OWNED BY THERMO ELECTRON AND ITS SUBSIDIARIES, INCLUDING THERMEDICS, CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE OUTSTANDING SHARES ON THE EXPIRATION DATE OF THE OFFER (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO OTHER IMPORTANT TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE "THE TENDER OFFER--CERTAIN CONDITIONS OF THE OFFER." As of January 28, 2000, there were 19,316,684 Shares outstanding and 1,009,413 Shares reserved for issuance pursuant to options (the "Options") outstanding as of such date under the Company's option plans. As of such date, Corpak owned 16,150,248 Shares, or approximately 83.6% of the outstanding Shares (79.5% assuming all outstanding Options are exercised). Of the Shares owned by Corpak, 97,923 Shares have been reserved for issuance under stock options granted by Thermedics under its stock option plans. As of January 28, 2000, Thermo Electron owned 1,029,950 Shares, or approximately 5.3% of the outstanding Shares (5.1% assuming all outstanding Options are exercised). Of the Shares owned by Thermo Electron, 65,300 Shares have been reserved for issuance under stock options granted under Thermo Electron's stock option plans. Based upon the number of outstanding Shares as of January 28, 2000 and assuming no Options are exercised, 204,818 Shares must be tendered in the Offer in order to satisfy the Minimum Condition. Assuming all outstanding Options are exercised, 1,113,290 Shares must be tendered in the Offer in order to satisfy the Minimum Condition. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase by the Purchaser of Shares pursuant to the Offer. The Purchaser will pay all fees and expenses of J.P. Morgan Securities Inc. ("J.P. Morgan") and The Beacon Group Capital Services, LLC ("The Beacon Group"), which are acting as the Dealer Managers (the "Dealer Managers"), American Stock Transfer & Trust Company, which is acting as the Depositary (the "Depositary"), and D.F. King & Co. Inc., which is acting as the Information Agent (the "Information Agent"), in connection with the Offer. See "Fees And Expenses." This Offer to Purchase and the documents incorporated by reference in this Offer to Purchase include certain forward-looking statements. These statements appear throughout this Offer to Purchase and include statements regarding the intent, belief or current expectations of Thermedics and Thermo Electron and their Boards of Directors, including statements concerning Thermedics' and Thermo Electron's strategies following completion of the Offer and their plans with respect to the acquisition of all of the equity interests in the Company. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors. 7 8 THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. If the Offer is completed, Thermo Electron, Corpak and the Purchaser together will own at least 90% of the Shares. Promptly following the closing of the Offer, Corpak and Thermo Electron plan to contribute their Shares to the Purchaser in exchange for common stock of the Purchaser. Thermo Electron and Corpak would then cause the Company to merge with and into the Purchaser in a so-called "short-form" merger between the Company and the Purchaser (the "Merger"). After the Merger, the Purchaser would be the surviving corporation, would change its name to "Thermedics Detection Inc." and would be owned exclusively by Thermedics, through its ownership of Corpak, and Thermo Electron. Stockholders of the Company who do not tender their Shares in the Offer would not be entitled to vote on the Merger. The consideration per Share in the Merger would be the same as the Offer Price. If, after the Offer is completed but prior to consummation of the Merger, the aggregate ownership by Thermo Electron and its subsidiaries of the outstanding Shares should fall below 90% due to the exercise of outstanding Options or for any other reason, the Purchaser intends to acquire additional Shares on the open market or in privately negotiated transactions to the extent required for such ownership to equal or exceed 90%. Any such purchases would be made at market prices or privately negotiated prices at the time of purchase, which may be higher or lower than the Offer Price. For a discussion of other actions Thermedics and Thermo Electron may take if the Offer is not completed, see "Special Factors--Conduct Of The Company's Business If The Offer Is Not Completed." The Purchaser, Corpak, Thermedics and Thermo Electron have filed with the Securities and Exchange Commission (the "Commission") a Tender Offer Statement on Schedule TO (including the information required by Schedule 13E-3) (the "Schedule TO") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), relating to the Offer, the Merger and other potential purchases of Shares. 8 9 SPECIAL FACTORS BACKGROUND TO THE OFFER AND THE MERGER THE THERMO ELECTRON REORGANIZATION. On January 31, 2000, Thermo Electron announced that its Board of Directors had authorized its management to proceed with a major reorganization of the operations of Thermo Electron and its subsidiaries. As part of this reorganization, Thermo Electron plans to acquire the public minority interest in most of its subsidiaries that have minority investors, spin off its separation technologies and fiber-based products business and its medical products business and divest a variety of non-core businesses. The primary goal of the reorganization is for Thermo Electron and each of its spun-off subsidiaries to focus on their respective core businesses. The purpose of the Offer and the Merger is to acquire the minority public interest in the Company as part of Thermo Electron's overall reorganization and to provide the public stockholders of the Company with $8.00 per Share in cash. Following the Offer and the Merger, Thermo Electron plans to retain the Company as part of Thermo Electron's core instrument business. THE COMPANY. The Company operates in two segments: Detection Instruments and Laboratory Products. The Company's Detection Instruments segment develops, manufactures and markets high-speed detection and measurements systems used for quality assurance and security applications. The Company's Laboratory Products segment develops, manufactures and markets products used to determine the quality of a wide variety of items, including food, water and pharmaceuticals and to measure the moisture content of raw, in-process and finished products. In addition, the Laboratory Products segment manufactures specific ion-measurement systems that are used to monitor water quality in the power, semiconductor, petrochemical, paper, pharmaceutical and drinking water industries. The Company operated as a division of Thermedics until its incorporation as a Massachusetts corporation in December 1990. The Company completed its initial public offering in March 1997. In the initial public offering, the Company sold 2,671,292 Shares to the public at a price of $11.50 per Share (for net proceeds of $28.1 million). GOING PRIVATE MERGER DISCUSSIONS. In August 1998, Thermo Electron determined that it would benefit from a corporate restructuring that would simplify its corporate structure, consolidate and strategically realign certain businesses and increase the liquidity in the public stock of certain of its publicly traded subsidiaries. Thermo Electron subsequently refined and expanded this proposal and on January 31, 2000 announced the proposed reorganization described above under "--The Thermo Electron Reorganization." As part of the initial restructuring plan, Thermo Electron proposed on August 12, 1998 that Thermedics' majority ownership of the Company be transferred to Thermo Electron in exchange for a portion of the shares of Thermedics common stock held by Thermo Electron. Thermo Electron proposed to then transfer its equity interest in the Company to Thermo Instrument Systems Inc. ("Thermo Instrument"), another majority-owned subsidiary of Thermo Electron. Thermo Instrument would then take the Company private for either cash or shares of Thermo Instrument common stock. On December 10, 1998, Thermo Electron issued a press release announcing revisions to its August 12, 1998 proposal. This revised proposal contemplated that Thermo Electron would take the Company private as a wholly-owned subsidiary of Thermo Electron. To this end, Thermedics proposed to transfer its Shares to Thermo Electron as part of an exchange for Thermo Electron's wholly-owned biomedical group, with Thermo Electron offering the stockholders of the Company other than Thermo Electron and its subsidiaries (the "Public Stockholders") cash in exchange for their Shares. In May 1999, the Board of Directors of the Company formed a special committee (the "Special Committee") to negotiate the terms of the proposed going private transaction with Thermedics and Thermo Electron. The Special Committee initially consisted solely of Matthew Weisman. Subsequently, Matthew Haggerty was added to the Board of Directors of the Company and appointed to the Special Committee. Neither of these individuals was otherwise affiliated with Thermo Electron, Thermedics or any of their subsidiaries other than the Company. In June 1999, the Special Committee retained Swidler Berlin Shereff Friedman, LLP as its legal counsel. 9 10 On July 21, 1999, Mr. Jonathan Wilk, Deputy General Counsel of Thermo Electron, provided a memorandum to the Special Committee which summarized the proposed structure of the acquisition of the outstanding Shares of the Company by Thermo Electron and Thermedics. In August 1999, the Special Committee engaged Banc of America Securities, LLC ("Banc of America") as its financial advisor in connection with the proposed transaction. On August 30, 1999, Mr. Theo Melas-Kyriazi, the Chief Financial Officer of Thermo Electron, Thermedics and the Company, provided the Special Committee with a written proposal by Thermo Electron (the "August 30 Offer") to acquire all of the outstanding Shares through a merger at a price of $9.50 per Share in cash. The August 30 Offer was subject to the approval by the Boards of Directors of Thermo Electron and Thermedics. Mr. Melas-Kyriazi indicated that the price of $9.50 per Share was based upon the following considerations: - The price of $9.50 represented a 25% premium over the price of the Shares on December 9, 1998, the day before Thermo Electron announced the proposed cash going private transaction regarding the Company. - The price was higher than the range of values per Share calculated by Thermo Electron using a discounted cash flow analysis. Thermo Electron calculated the cash flows that the Company was expected to generate during fiscal 1999 through 2003 based on the financial projections for fiscal 1999 and 2000 prepared by the Company as part of its normal operations (the "1999-2000 Projections") and projections prepared by Thermo Electron, with the assistance of management of the Company, for fiscal 2001 through 2003 (the "2001-2003 Projections"). Thermo Electron also calculated a range of terminal asset values of the Company at the end of the five-year period ending in fiscal 2003 by applying a multiple of ten times earnings before interest and taxes ("EBIT"), a multiple of nine times earnings before interest, taxes, amortization and depreciation ("EBITDA") and a multiple of 15 times net earnings. The cash flows and ranges of terminal asset values were then discounted to present values using discount rates of 15% and 17.5%. The present value of the cash flows and the range of terminal asset values were then adjusted for the Company's estimated 1999 fiscal year-end excess cash, option exercise proceeds and total debt. This discounted cash flow analysis prepared by Thermo Electron indicated a range of values of between $7.04 and $7.49 per Share based on an EBIT discounted cash flow analysis, $7.44 and $7.92 per Share based on an EBITDA discounted cash flow analysis and $7.02 and $7.46 per Share based on a net earnings discounted cash flow analysis, resulting in an average discounted cash flow range of values of between $7.17 and $7.62 per Share. See "--Certain Projected Financial Data." - The price was higher than $5.84, which was the median of the range of values per Share from $4.20 to $10.15 calculated by Thermo Electron using an analysis of multiples of EBIT, EBITDA, book value, net earnings and revenues of the following publicly-traded companies that Thermo Electron considered comparable to the Company: Mettler-Toledo International, Inc., Barringer Technologies, Inc., Invision Technologies, Inc., Vivid Technologies, Inc., American Science and Engineering Inc. and Fairey Group, plc. During September and October 1999, Banc of America conducted a financial due diligence review of the Company and the proposed transaction on behalf of the Special Committee. During a telephone conversation on September 30, 1999, Mr. R.C. Smith of Banc of America informed Mr. Melas-Kyriazi of Mr. Smith's opinion that discounted cash flow and comparable companies value analyses of the Company were not appropriate due to disagreements between Thermo Electron and the Company's management regarding the role that acquisitions would play in the growth strategy for the Company. Mr. Smith informed Mr. Melas-Kyriazi that the Special Committee expected a greater premium over the pre-announcement market price of the Shares. On November 9, 1999, Mr. Melas-Kyriazi met with the Special Committee. The Special Committee informed Mr. Melas-Kyriazi that the August 30 Offer was not acceptable. The Special Committee reiterated the concerns and views previously expressed by Mr. Smith. 10 11 On November 18, 1999, Mr. Melas-Kyriazi met with the Special Committee and representatives of Banc of America. The Special Committee again informed Mr. Melas-Kyriazi that the August 30 Offer was not acceptable and that Thermo Electron and Thermedics should pay a "customary" premium of at least 25% over the then current market price. The Special Committee requested that Thermo Electron and Thermedics increase their offer accordingly. During a telephone conversation in December 1999, Mr. Melas-Kyriazi reiterated the August 30 Offer to Mr. Haggerty, but Mr. Haggerty indicated that the August 30 Offer remained unacceptable. In December 1999, Thermo Electron retained J.P. Morgan and The Beacon Group as its financial advisors for the purpose of advising Thermo Electron in connection with its strategic alternatives, including advising Thermo Electron in connection with the acquisition of the minority public interest in the Company. On January 12, 2000, Mr. Melas-Kyriazi stated to Mr. Haggerty that the parties needed to agree on a method of proceeding to a resolution of the terms of the transaction. On a number of occasions on or about January 14, 2000, J.P. Morgan and The Beacon Group discussed with the management of Thermo Electron the preliminary results of their analysis of the ranges of potential values of the Shares that resulted from the application of several accepted valuation methodologies. J.P. Morgan and The Beacon Group subsequently presented the results of their analysis to the Thermo Electron Board of Directors on January 18, 2000 and January 28, 2000 and to the Thermedics Board of Directors on January 25, 2000 and January 29, 2000. J.P. Morgan's and The Beacon Group's analysis indicated an estimated range of equity values for the Shares of approximately $6.75 to $8.00 per Share based on an analysis of the trading value of comparable companies, between $7.00 and $8.50 per Share based on an analysis of comparable buy-out transactions and between $7.00 and $8.25 per Share based on an analysis of discounted cash flows. See "--Summary Of The Advisors' Analysis and Opinion." On January 21, 2000, Mr. Melas-Kyriazi submitted a revised offer of $8.00 per Share orally to counsel for the Special Committee, subject to approval of the Boards of Directors of Thermo Electron and Thermedics. On the same day, Mr. Wilk sent a letter to counsel for the Special Committee that confirmed the terms of the oral offer made by Mr. Melas-Kyriazi revising Thermedics' and Thermo Electron's existing offer to $8.00 per Share and indicating Thermedics' and Thermo Electron's willingness to condition a merger upon the approval of a majority of the Shares held by the Public Stockholders (the "January 21 Offer"). Mr. Wilk's letter stated that the offer would expire at noon on January 25, 2000. On January 24, 2000, counsel for the Special Committee telephoned Mr. Wilk and informed him that the Special Committee would not be in a position to respond to the January 21 Offer by January 25, 2000. On January 26, 2000, Mr. Weisman sent a letter to Dr. Richard F. Syron, the Chairman and Chief Executive Officer of Thermo Electron, stating that the "Special Committee [was] unprepared to recommend this down offer to minority shareholders." The Special Committee expressed frustration with the pace of the negotiations and asserted that Thermo Electron had been unresponsive to the Special Committee's concerns. The Special Committee also asserted that representatives of Thermo Electron had failed to consider certain qualitative factors in valuing the Shares held by the Public Stockholders. The Special Committee requested a meeting with Dr. Syron to discuss such qualitative factors. Because the Special Committee did not accept the January 21 Offer, Thermedics and Thermo Electron determined not to proceed with negotiation of a long-form merger with the Special Committee but instead to initiate the Offer and the Merger. On January 29, 2000, the Special Committee sent a report to the Board of Directors of the Company. The report reviewed the history of the formation of the Special Committee, its meetings with legal and financial advisors, the August 30 Offer and the January 21 Offer. The report further provided in part: "In November 1999 the Special Committee met alone with Theo Melas-Kyriazi, Chief Financial Officer of Thermo Electron, to discuss the Thermo Electron offer, and then again with Mr. Melas-Kyriazi, this time with its financial advisor. The Special Committee informed Mr. Melas-Kyriazi that, based upon the financial analysis performed by its financial advisor, the $9.50 offer price was 11 12 inadequate and requested that Thermo Electron increase its offer. The Special Committee believed then and now that Thermo Electron considered only certain quantitative factors in its analysis of the proposed offer price for the minority stockholders and did not consider qualitative factors. Thermo Electron did not respond to the Special Committee's request until last Friday, January 21, 2000, approximately two months after the meeting with Mr. Melas-Kyriazi, and then with a decreased offer of $8.00 per share. The lower offer was accompanied by a deadline to respond to that offer by midday Tuesday, January 25, 2000. In a letter sent by Matthew Weisman on behalf of the Special Committee on January 26, 2000 to Richard Syron, Chairman and Chief Executive of Thermo Electron, Mr. Weisman indicated that the Special Committee was unprepared to recommend this decreased offer to the minority stockholders and also requested a meeting with Mr. Syron to discuss the qualitative factors that it believes have not been properly considered in the valuation of [Thermedics Detection] by Thermo Electron." Also on January 29, 2000, the Company's Board of Directors held a meeting by telephone conference call at which representatives of Thermedics and Thermo Electron described their intention to initiate the Offer and the Merger. On January 31, 2000, Thermedics and Thermo Electron issued a press release announcing the Offer and the Merger. On February 16, 2000, the Special Committee distributed a memorandum to the Board of Directors of the Company designated as the final report of the Special Committee. The memorandum provided in part: "As we stated in the January 29th Report, it is our continuing position that we are unprepared to recommend to the minority stockholders the $8.00 offer price. We believe that there are several factors that were not considered by Thermo Electron/Thermedics in their valuation analysis of the minority stockholders' interests. As we indicated in the January 29th Report, despite repeated attempts on the part of the Special Committee after our November 1999 meetings with Theo Melas-Kyriazi, Chief Financial Officer of Thermo Electron, Thermo Electron was unwilling to engage in any negotiation with respect to its original offer and, on January 21, 2000, reduced its offer to $8.00. Further, on January 26, 2000 we sent a letter to Richard Syron, Chairman and Chief Executive Officer of Thermo Electron, expressing our frustration with Thermo Electron's responsiveness and requesting a meeting with him to discuss the situation. We believe that the factors set forth below have undermined the market value of [Thermedics Detection] common stock and thereby prevented the minority stockholders from obtaining an adequate value for their shares. We believe that these factors have not been properly considered by Thermo Electron/Thermedics. 1. From the time of raising approximately $20 million in its initial public offering on a business plan premised, in part, on acquisition growth, none of the funds raised in that offering have been employed for that purpose. 2. The management of Thermo Electron blocked moving forward on acquisition opportunities available to [Thermedics Detection], despite the recommendations of [Thermedics Detection] management and without advising the independent directors of [Thermedics Detection] to participate in a Board review.... 3. Without advising the independent directors of [Thermedics Detection], management of Thermo Electron limited capital expenditures recommended by management of [Thermedics Detection], which research and development likely would have enhanced the value of [Thermedics Detection]. 4. With the uncertainty surrounding the proposed buy-out and the resulting loss of focus of management, the performance of [Thermedics Detection] has deteriorated and contributed to a dramatic drop in the price of [Thermedics Detection's] stock. 12 13 5. The inordinate length of time since the announcement of the buyout of [Thermedics Detection] by Thermo Electron (August 1998) has added uncertainty to [Thermedics Detection's] situation and provided an extended period during which [Thermedics Detection's] share price could, and did, decline. a) The inordinate length of time it took Thermo Electron to appoint a special committee (the functioning special committee, as it is constituted today, was not appointed until mid-July 1999). b) The lack of responsiveness by Thermo Electron to the request for information as part of the due diligence process undertaken by the advisers to the Special Committee. c) The lack of responsiveness to the Special Committee's November 1999 request for a revised and an increased offer for the minority stockholders' shares.... Based on the foregoing, it is the recommendation of the Special Committee that the Board of Directors of [Thermedics Detection] advise the minority stockholders of [Thermedics Detection] to reject the Thermedics tender offer." At a meeting of the Company's Board of Directors held on February 18, 2000, the Special Committee presented its report to the members of the Company's Board of Directors. On February 29, 2000, the members of the Special Committee resigned as directors of the Company. At a meeting on March 8, 2000, the Company's Board of Directors determined that the Company would not make a recommendation as to whether the Public Stockholders should tender their Shares pursuant to the terms of the Offer. On March 10, 2000, the Purchaser commenced the Offer. REASONS FOR THE OFFER AND THE MERGER ACTIONS OF THERMEDICS' BOARD OF DIRECTORS. On January 25, 2000 and January 29, 2000, the Board of Directors of Thermedics held meetings at which the proposed plan to acquire the minority stockholder interest in the Company through the Offer and the Merger was presented and discussed. Messrs. George N. Hatsopoulos, John N. Hatsopoulos, John T. Keiser and John W. Wood, Jr., members of Thermedics' Board of Directors, initially took part in each of these meetings, but recused themselves from discussions of the terms of the Offer and the Merger and from voting to approve the Offer. These directors recused themselves because they were also officers or directors of the Company or hold Shares or options to purchase Shares. No director of Thermedics present for the vote approving the Offer objected to or abstained from such vote. Dr. Richard F. Syron, a member of the Board of Directors of Thermedics at the time of the vote, resigned as a director of Thermedics effective March 7, 2000. BENEFITS AND DETRIMENTS TO THE COMPANY OF THE OFFER AND THE MERGER. In determining whether to make the Offer and thereafter effect the Merger, the Thermedics Board of Directors considered several factors, including the financial performance and profitability of the Company and the potential benefits to the Company's business if the Company were to become part of a larger business unit. Thermedics' Board of Directors also considered the following factors: - the prospect of achieving greater marketing, operating and administrative efficiency as a result of the Company's operations being conducted in a more coordinated manner with Thermo Electron's other instruments subsidiaries; - the reduction in the amount of public information available to competitors about the Company's businesses that would result from the termination of the Company's obligations under the reporting requirements of the Commission; - the elimination of additional burdens on management associated with public reporting and other tasks resulting from the Company's public company status, including, for example, the dedication of time by and resources of the Company's management and Board of Directors to stockholder and analyst inquiries and investor and public relations; 13 14 - the decrease in costs, particularly those associated with being a public company (for example, as a privately-held entity, the Company would no longer be required to file quarterly, annual or other periodic reports with the Commission or publish and distribute to its stockholders annual reports and proxy statements), that Thermo Electron and Thermedics anticipate could result in savings of approximately $450,000 per year, including fees for an audit by an independent accounting firm and legal fees; - the greater flexibility that the Company's management would have to focus on long-term business goals, as opposed to quarterly earnings, as a non-reporting company, particularly in light of the potential volatility in the Company's quarterly earnings; and - recent public capital market trends affecting small-cap companies, including perceived lack of interest by institutional investors in companies with a limited public float. The Board of Directors of Thermedics also considered the advantages and disadvantages of certain alternatives to acquiring the minority stockholder interest in the Company, including: - a sale of its equity interest in the Company; and - leaving the Company as a majority-owned, public subsidiary. The first alternative, selling Thermedics' equity interests in the Company, was briefly considered. It was not an alternative that was pursued at length, given that Thermo Electron did not want to sell, and did not want Thermedics to sell, its equity interest in the Company, but rather intended to retain the Company as a part of Thermo Electron's core instrument businesses. In the view of the Board of Directors of Thermedics, the principal advantage of leaving the Company as a majority-owned, public subsidiary of Thermedics was the ability of Thermedics to invest the cash that would be required to buy the minority stockholder interest in the Company for other purposes. The disadvantages of leaving the Company as a majority-owned, public subsidiary which were considered by the Board of Directors of Thermedics included the inability to achieve many of the benefits of taking the Company private discussed above. The Board of Directors of Thermedics concluded that the advantages of leaving the Company as a majority-owned, public subsidiary of Thermedics were significantly outweighed by the disadvantages of doing so, and accordingly that alternative was rejected. CONSIDERATION OF LIQUIDITY AND SHARE PRICE; TIMING. The Board of Directors of Thermedics also considered the relatively low volume of trading in the Shares and considered that the Offer and the Merger would result in immediate, enhanced liquidity for the Public Stockholders. The Board of Directors of Thermedics considered trends in the price of the Shares in the past twelve months and during the period between the Company's initial public offering and the announcement of Thermedics' intention to take the Company private. Thermedics and Thermo Electron have determined to make the Offer and effect the Merger at this time as part of the larger reorganization of Thermo Electron and its subsidiaries. The Company's stock price was not a significant factor in the timing of Thermedics' and Thermo Electron's decision to acquire the minority stockholder interest in the Company. ALTERNATIVE STRUCTURE CONSIDERED. The Board of Directors of Thermedics also considered whether to structure the transaction as a tender offer followed by a short-form merger or as a long-form merger. In determining to structure the transaction as a tender offer followed by a short-form merger, the Board of Directors considered the following: - The discussions with the Special Committee with respect to a long-form merger were progressing at a pace that the Thermedics Board of Directors did not consider acceptable. See "--Background To The Offer And The Merger--Going Private Merger Discussions." - Unless at least 90% of the outstanding Shares are owned by the Purchaser, it could not effect a short-form merger. Unlike a long-form merger, the approval of the Company's Board of Directors is not required to complete a short-form merger. Consequently, once the Special Committee determined not 14 15 to recommend the long-form merger contemplated by the January 21 Offer, the Offer and the Merger potentially enabled Thermedics and Thermo Electron to acquire all of the Shares without the approval of the Board of Directors of the Company or the Special Committee. - A tender offer followed by a short-form merger would permit Thermedics and Thermo Electron to acquire the minority interest in the Company on an expeditious basis and provide the Public Stockholders with a prompt opportunity to receive the Offer Price of $8.00 per Share. - In the Offer, each Public Stockholder would individually determine whether to accept the Offer Price of $8.00 per Share. - Public Stockholders who do not tender their Shares in the Offer could preserve their appraisal rights in the Merger under state law. After discussing the advantages and disadvantages of acquiring the minority stockholder interest in the Company, including the alternative method of acquiring such interests through a long-form merger, the Thermedics Board of Directors authorized taking the Company private through a tender offer for all of the Shares of the Company that Thermo Electron and its subsidiaries, including Thermedics, did not already own, at a price per Share of $8.00 in cash, to be followed by a short-form merger at the same price. ACTIONS OF THERMO ELECTRON'S BOARD OF DIRECTORS. On January 18, 2000 and January 28, 2000, the Board of Directors of Thermo Electron held special meetings at which Thermo Electron's management presented the proposal for Thermedics to acquire all of the Shares that Thermo Electron and its subsidiaries did not already own as a part of the proposed corporate reorganization of Thermo Electron and certain of its subsidiaries. Messrs. George N. Hatsopoulos, John N. Hatsopoulos, Elias P. Gyftopoulos and Robert A. McCabe, members of Thermo Electron's Board of Directors, initially took part in each of these meetings but recused themselves from discussions of the terms of the Offer and the Merger and from taking action with respect to the Offer. These directors recused themselves because they hold Shares or Options to purchase Shares. The Board of Directors of Thermo Electron considered all of the factors relating to the Offer and the Merger referred to above that were considered by Thermedics' Board of Directors. The Board of Directors of Thermo Electron also discussed the fact that the acquisition by Thermedics of the minority stockholder interest in the Company would advance the goal of Thermo Electron's proposed corporate reorganization. After consideration of these factors, the Board of Directors of Thermo Electron resolved that it would not object if Thermedics determined to take the Company private through Thermedics' acquisition for cash through the Offer and the Merger of all of the Shares held by the Public Stockholders at a purchase price of $8.00 per Share. No director of Thermo Electron present to vote on the resolution not to object if Thermedics determined to effect the Offer and the Merger objected to or abstained from such vote. POSITION OF THERMEDICS AND THERMO ELECTRON AS TO FAIRNESS OF THE OFFER AND THE MERGER Because Corpak and Thermo Electron together currently own a majority of the Shares, Thermo Electron, Thermedics, Corpak and the Purchaser are deemed "affiliates" of the Company under Rule 12b-2 of the Exchange Act. Accordingly, in compliance with Rule 13e-3 under the Exchange Act, the Boards of Directors of Thermedics and Thermo Electron have considered the fairness of the Offer and the Merger to the Public Stockholders. DETERMINATIONS OF THE BOARDS OF DIRECTORS OF THERMEDICS AND THERMO ELECTRON. In authorizing the Offer and the Merger, the Board of Directors of each of Thermedics and Thermo Electron determined that the Offer and the Merger are fair to the Public Stockholders. In reaching their determinations that the terms of the Offer and the Merger are fair to the Public Stockholders, the Boards of Directors of Thermedics and Thermo Electron considered the factors set forth under this section captioned "Position of Thermedics And Thermo Electron As To Fairness Of The Offer And The Merger," which constitute all of the material factors considered by the Boards of Directors of Thermedics and Thermo Electron in making their determinations. 15 16 The Boards of Directors of Thermedics and Thermo Electron determined that each of the following factors supported their belief that the Offer and the Merger are fair to the Public Stockholders: - Financial analysis. In considering the fairness of the Offer and the Merger from a financial point of view to the Company's stockholders, including the Public Stockholders, the Boards of Directors of Thermedics and Thermo Electron reviewed and relied in part upon an analysis of the ranges of potential values of the Shares that result from the application of several accepted valuation methodologies. This financial analysis, including the selection of valuation methodologies, was prepared by J.P. Morgan and The Beacon Group (the "Advisors") to assist the Boards of Directors of Thermedics and Thermo Electron with their evaluation of the Offer and the Merger. Thermo Electron retained J.P. Morgan and The Beacon Group as its financial advisors for the purpose of advising Thermo Electron in connection with its strategic alternatives, including advising Thermo Electron and Thermedics in connection with the acquisition of the minority interest in the Company. The financial analyses undertaken by the Advisors included an analysis based upon public trading multiples, comparable buy-out transactions and discounted cash flows. The analysis of trading multiples of companies engaged in businesses which the Advisors judged to be analogous to the Company's business indicated an estimated range of equity values for the Shares of approximately $6.75 to $8.00 per Share. The analysis of other buyout transactions indicated an estimated range of equity values for the Shares of between $7.00 and $8.50 per Share. The analysis based upon discounted cash flows indicated an estimated range of equity values for the Shares of between $7.00 and $8.25 per Share. See "--Summary of The Advisors' Analysis and Opinion." - Information concerning the financial performance, condition, business operations and prospects of the Company. The Boards of Directors of Thermedics and Thermo Electron believed the Offer Price to be attractive in light of the Company's current financial performance, profitability and growth prospects. In addition, the Offer and the Merger would shift the risk of the future financial performance of the Company from the Public Stockholders, who do not have the power to control decisions made as to the Company's business, entirely to Thermedics and Thermo Electron, who do have the power to control the Company's business and who have the resources to manage and bear the risks inherent in the business over the long term. See "--Certain Projected Financial Data." - The premium reflected in the Offer Price of $8.00 per Share. The Boards of Directors of Thermedics and Thermo Electron considered the current and historical trading prices of the Shares. The market price of the Shares had declined from $11.875 on March 20, 1997, the date of the Company's initial public offering, to $7.1875 on August 11, 1998, the trading date immediately prior to Thermo Electron's announcement of its intention to take the Company private for cash or stock, and to $7.625 on December 9, 1998, the trading date immediately prior to Thermo Electron's announcement of its intention to take the Company private for cash. The Offer Price represented a premium of 11.3% over the closing price on August 11, 1998. The purchase by Thermedics would eliminate the exposure of the Public Stockholders to any future or continued declines in the price of the Shares. The Boards of Directors of Thermedics and Thermo Electron believed that the market price of the Shares after the August 12, 1998 announcement reflected the financial markets' anticipation of the consideration that would be paid to the Public Stockholders in a going private transaction. See "--Certain Effects Of The Offer And The Merger." - Terms of the Offer. The Boards of Directors of Thermedics and Thermo Electron considered the terms of the Offer and the Merger, including (1) the amount and form of the consideration, (2) the limited number of conditions to the obligations of the Purchaser, including the absence of a financing condition, (3) the tender offer structure, which would provide an expeditious means for the Public Stockholders to receive the Offer Price and (4) the Minimum Condition. - The market price and relative lack of liquidity for the Shares and the liquidity that would be realized by the Public Stockholders from the all-cash Offer. The Boards of Directors of Thermedics and Thermo Electron believed that the liquidity that would result from the Offer and the Merger would be beneficial to the Public Stockholders because Thermedics' and Thermo Electron's combined signifi 16 17 cant ownership of Shares (1) results in a relatively small public float that necessarily limits the amount of trading in the Shares and (2) decreases the likelihood that a proposal to acquire the Shares would be made by an independent entity without the consent of Thermedics and Thermo Electron. - Thermo Electron's and Thermedics' determination to retain their majority ownership of the Company and not to seek a third party buyer for the Company. Thermedics and Thermo Electron stated their current intention to retain their majority holdings in the Company, which foreclosed the opportunity to consider an alternative transaction with a third party purchaser of the Company or otherwise provide liquidity to the Public Stockholders. Accordingly, it is unlikely that finding a third party buyer for the Company was a realistic option for the Public Stockholders. Neither Thermedics nor Thermo Electron solicited or received an offer for the Company from a third party in the prior two years. PROCEDURAL FAIRNESS. The Boards of Directors of Thermedics and Thermo Electron also determined that the Offer and the Merger are procedurally fair to the Public Stockholders. In making such determination, the Boards of Directors considered the following factors: - Each Public Stockholder can individually determine whether to tender Shares in the Offer. - The Offer provides the opportunity for the Public Stockholders to sell their Shares without incurring brokerage and other costs typically associated with market sales. - In determining the Offer Price, the Boards of Directors of Thermedics and Thermo Electron relied in part upon an analysis prepared by the Advisors of the ranges of potential values of the Shares that resulted from the application of several accepted valuation methodologies. See "--Summary Of The Advisors' Analysis and Opinion." - Public Stockholders who believe that the terms of the Offer and the Merger are not fair can pursue appraisal rights in the Merger under state law. CERTAIN NEGATIVE CONSIDERATIONS. The Boards of Directors of Thermedics and Thermo Electron also considered the following factors, each of which they considered to be negative, in their deliberations concerning the fairness of the terms of the Offer and the Merger: - Termination of participation in future growth of the Company. Following the successful completion of the Offer and the Merger, the Public Stockholders would cease to participate in the future earnings or growth, if any, of the Company or benefit from increases, if any, in the value of their holdings in the Company. - Conflicts of Interest. The financial interests of Thermo Electron and Thermedics are adverse as to the Offer Price to the financial interests of the Public Stockholders. In addition, officers and directors of the Company have actual or potential conflicts of interest in connection with the Offer and the Merger. See "--Conflicts Of Interest." - No Public Stockholder Approval. The Offer and the Merger do not provide the Public Stockholders with an opportunity to vote on the proposed transaction. - Inability to Reach Agreement with Special Committee. The Boards of Directors of Thermedics and Thermo Electron considered the negotiations that had taken place with the Special Committee concerning a possible long-form merger, the proposals the Special Committee had made for the terms of such a merger and the fact that the Special Committee had objected to the negotiations process and determined not to recommend such a merger at the Offer Price. See "--Background To The Offer And The Merger--Going Private Merger Discussions." - No Unaffiliated Representative or Independent Director Approval. The majority of the members of the Board of Directors of the Company who are not employees of the Company have not retained an unaffiliated representative to act solely on behalf of the Public Stockholders for purposes of negotiating the terms of the Offer and the Merger or preparing a report concerning the fairness of the Offer and the Merger. In addition, such majority of the independent members of the Company's Board of Directors 17 18 have not approved the Offer or the Merger. The Special Committee prepared a report recommending that the Company's Board of Directors recommend that the Public Stockholders reject the Offer. OTHER FACTORS. The Boards of Directors of Thermedics and Thermo Electron did not consider the net book value of the Company as a relevant factor in assessing the Company's value and, accordingly, did not evaluate the fairness of the Offer Price in relation to the Company's net book value. The Company's net book value at January 1, 2000 was approximately $121.7 million, which would have yielded a per Share valuation for the Company of $6.30. The Boards of Directors relied in part upon valuation methodologies selected by the Advisors for the purpose of their financial analysis, and the Boards of Directors of Thermedics and Thermo Electron noted that the Advisors did not employ net book value in their financial analysis. Moreover, the Boards of Directors of Thermedics and Thermo Electron do not believe that an analysis based upon net book value is appropriate for an instrument business. The Boards of Directors of Thermedics and Thermo Electron believe that net book value is a valuation methodology more typically used in the banking, utilities, real estate and financial services industries. The Boards of Directors of Thermedics and Thermo Electron also did not consider "shopping" the Company to prospective purchasers. Shopping the Company would not only entail substantial time delays and allocation of management's time and energy, but would also disrupt and discourage the Company's employees and create uncertainty among the Company's customers and suppliers. Furthermore, Thermedics and Thermo Electron do not intend to sell the Company, but rather intend to continue to operate the Company as part of Thermo Electron's core instrument businesses. The Boards of Directors of Thermedics and Thermo Electron did not consider the Offer Price as compared to any implied liquidation value because it was not contemplated that the Company be liquidated, whether or not the Offer and the Merger were completed. See "--Conduct Of The Company's Business After The Offer And The Merger." RECENT PURCHASES OF SHARES BY THERMO ELECTRON AND THERMEDICS. See Schedule II to this Offer to Purchase for information on purchases of Shares by Thermo Electron, Thermedics and the Company during the past two years. These Share acquisitions include purchases at prices exceeding the Offer Price. CONCLUSIONS OF THE BOARDS OF DIRECTORS. The Thermedics and Thermo Electron Boards of Directors concluded that, given the performance of the Shares between the Company's initial public offering and the announcement of Thermedics' intention to take the Company private, the uncertainties surrounding the Company's future growth prospects and the limited trading market for the Shares, the Offer and Merger would result in a fair treatment of the Public Stockholders. In determining that the Offer and the Merger are fair to the Public Stockholders, the Boards of Directors of Thermedics and Thermo Electron considered the above factors as a whole and did not assign specific or relative weights to them, other than that the Offer Price of $8.00 per Share in cash was considered the most important factor. In making the determination as to fairness, Thermedics and Thermo Electron also had access to the 1999-2000 Projections and to financial projections for the fourth quarter of fiscal 1999 and for fiscal 1999 and 2000 prepared by the Company (the "2000 Projections"). See "--Certain Projected Financial Data." SUMMARY OF THE ADVISORS' ANALYSIS AND OPINION Thermo Electron retained J.P. Morgan and The Beacon Group as its exclusive financial advisors for the purpose of advising Thermo Electron in connection with its strategic alternatives, including advising Thermo Electron and Thermedics in connection with the acquisition of the minority interest in the Company. On a number of occasions on or about January 14, 2000, the Advisors discussed with the management of Thermo Electron the preliminary results of their analysis of the ranges of potential values of the Shares that resulted from the application of several accepted valuation methodologies. The Advisors subsequently presented an analysis to the Thermo Electron Board of Directors on January 18, 2000 and January 28, 2000 and to the Thermedics Board of Directors on January 25, 2000 and January 29, 2000. This financial analysis, including the selection of valuation methodologies, was prepared by the Advisors to assist the Boards of Directors of Thermedics and Thermo Electron with their evaluation of the Offer and the Merger. At the January 28, 2000 and January 29, 2000 meetings of the Boards of Thermo Electron and Thermedics, respectively, the Advisors also orally delivered their opinion (the "Opinion"), subsequently confirmed in a written opinion dated 18 19 January 29, 2000, that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in their Opinion, the consideration of $8.00 net per Share in cash to be paid pursuant to the Offer and the Merger was fair from a financial point of view to Thermedics and Thermo Electron. THE ADVISORS' FINANCIAL ANALYSIS AND RELATED OPINION WAS PROVIDED TO THE BOARDS OF DIRECTORS OF THERMEDICS AND THERMO ELECTRON. THE OPINION IS DIRECTED ONLY TO THE FAIRNESS OF THE CONSIDERATION FROM A FINANCIAL POINT OF VIEW TO THERMEDICS AND THERMO ELECTRON (AND NOT TO THE PUBLIC STOCKHOLDERS) AND DOES NOT CONSTITUTE A RECOMMENDATION AS TO WHETHER OR NOT THE PUBLIC STOCKHOLDERS SHOULD TENDER THEIR SHARES IN THE OFFER. In conducting their financial analysis and rendering their Opinion, the Advisors reviewed, among other things: - the audited financial statements of the Company, Thermedics and Thermo Electron for the fiscal year ended January 2, 1999; - the unaudited financial statements of the Company, Thermedics and Thermo Electron for the period ended October 2, 1999; - current and historical market prices of the Shares; - certain publicly available information concerning the business of the Company and of certain other companies engaged in businesses deemed by the Advisors to be comparable to those of the Company; - the reported market prices for securities of certain other companies deemed by the Advisors to be comparable to the Company; - publicly available terms of certain transactions involving companies deemed by the Advisors to be comparable to the Company and the consideration paid for such companies; - the terms of other business combinations deemed relevant by the Advisors; - the 2000 Projections; and - certain agreements with respect to outstanding indebtedness or obligations of the Company, Thermedics and Thermo Electron. The Advisors also held discussions with certain members of the management of Thermedics and Thermo Electron with respect to certain aspects of the Offer and the Merger. In addition, the Advisors held discussions with certain members of management of Thermedics and Thermo Electron with respect to the past and current business operations of the Company, the financial condition and future prospects and operations of the Company and certain other matters believed necessary or appropriate to the Advisors' inquiry. In addition, the Advisors reviewed such other financial studies and analyses and considered such other information as the Advisors deemed appropriate for the purposes of their financial analysis and Opinion. The 2000 Projections were the only non-public information prepared by the Company which were reviewed by the Advisors, and the Advisors did not hold any discussions with management of the Company. No limitation was placed upon the scope of the Advisors' investigation or valuation methodologies by Thermedics or Thermo Electron. The Advisors relied upon and assumed, without independent verification, the accuracy and completeness of all information that was publicly available or that was furnished to, or discussed with, the Advisors by Thermedics, Thermo Electron and the Company or otherwise reviewed by the Advisors, and the Advisors have not assumed any responsibility or liability therefor. The Advisors also assumed that there have been no material changes in the Company's condition, results of operations, business or prospects since the date of the most recent financial statements made available to the Advisors. The Advisors have not conducted, and did not assume any responsibility for conducting, any valuation, appraisal or physical inspection of any of the Company's assets or liabilities (contingent or otherwise), nor have any valuations or appraisals been provided to the Advisors. In relying on the financial analyses, projections and estimates provided to, or discussed with, the Advisors, the Advisors have assumed that they have been reasonably prepared based on assumptions 19 20 reflecting the best currently available estimates and judgments by management as to the expected future financial performance of the Company. The 2000 Projections used by the Advisors were prepared by management of the Company. None of the Company, Thermedics or Thermo Electron publicly discloses internal management projections of the type used by the Advisors in connection with the Advisors' analysis of the Offer and the Merger, and such projections were not prepared with a view toward public disclosure. The 2000 Projections and the additional projections prepared by the Advisors were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of the management of the Company, Thermo Electron and Thermedics, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections. See "--Certain Projected Financial Data." The Advisors' financial analysis and Opinion are necessarily based on economic, market and other conditions as in effect on, and the information made available to the Advisors as of, the date of their Opinion. Subsequent developments may affect the financial analysis and the conclusions in the Opinion, and the Advisors do not have any obligation to update, revise or reaffirm their financial analysis or Opinion. In accordance with customary investment banking practice, the Advisors employed generally accepted valuation methods in conducting their financial analysis and reaching their Opinion. In undertaking their analysis, the Advisors primarily relied on three valuation methodologies: comparable public trading multiples, comparable transaction analysis and discounted cash flow analysis. However, with respect to one of the Company's businesses, TMD Detection Consolidated ("Consolidated"), the Advisors considered these methods inappropriate due to its recent poor financial performance. The Advisors therefore excluded the financial results of Consolidated for the purposes of applying such valuation methodologies to the projected financial results of the Company. The effect of such exclusion was to reduce the estimated revenues of the Company for 1999 and 2000 by approximately 23% and to significantly increase the Company's estimated net income for 1999 and 2000 by eliminating Consolidated's operating loss. A value was estimated for Consolidated, which represented less than 10% of the Company's estimated value, and then reincorporated into the financial analysis to derive the equity value range per Share for each valuation methodology. The following is a summary of the material financial analyses undertaken by the Advisors with respect to the Company and presented to the Boards of Directors of Thermo Electron and Thermedics: Public Trading Multiples. Using publicly available information, the Advisors compared selected financial data of the Company with similar data for selected publicly traded companies engaged in businesses which the Advisors judged to be analogous to the Company's business. The companies selected by the Advisors were Mettler-Toledo International, Inc., Ametek Inc., O.I. Corporation and CEM Corporation (the share price of CEM Corporation used in the analysis was as of a date prior to the announcement of its acquisition). These companies were selected, among other reasons, because they compete in similar industries with fairly similar competitive dynamics and growth potential. For each comparable company, publicly available financial performance through the most recent last twelve months was measured. In addition, the Advisors derived estimates of sales, EBITDA, EBIT and net income for the year ended December 31, 2000 for each comparable company from the Institutional Brokers Estimates System. The Advisors applied a range of multiples derived from such analysis to the Company's estimated (based upon the 2000 Projections) sales, EBITDA, EBIT and net income for fiscal 1999 and 2000, and arrived at an estimated range of equity values for the Shares of approximately $6.75 to $8.00 per Share. Selected Transaction Analysis. Using publicly available information, the Advisors examined five selected transactions in which companies engaged in businesses which the Advisors judged to be analogous to the Company's were acquired within the last three years. Specifically, the Advisors reviewed the following transactions (indicated as target/acquiror): CEM Corporation/Investor Group, Hach Co./Danaher Corp., PerkinElmer-Instrument Division/EG&G Inc., Drexelbrook Engineering Co./Ametek Inc. and BIE Technologies Inc./Shareholders. The Advisors applied a range of multiples derived from such analysis to the Company's estimated (based upon the 2000 Projections) sales, 20 21 EBITDA, EBIT and net income for fiscal 1999, and arrived at an estimated range of equity values for the Shares of between $7.00 and $8.50 per Share. No company or transaction used in the comparable public trading multiple analysis or the selected transaction analysis is identical to the Company or the Offer and the Merger. Accordingly, an analysis of the results of the foregoing necessarily involves complex considerations and judgments concerning differences in financial and operating characteristics of the Company and other factors that could affect the public trading value of the companies to which they are being compared. In evaluating the comparable companies, the Advisors made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the Company. Discounted Cash Flow Analysis. The Advisors conducted a discounted cash flow analysis for the purpose of determining the fully diluted equity value per Share. The Advisors calculated the unlevered free cash flows that the Company is expected to generate during fiscal years 2000 through 2004 based upon financial projections prepared by the Advisors after discussions with the management of Thermedics and Thermo Electron. The Advisors also calculated a range of terminal asset values of the Company at the end of the 5-year period ending 2004 by applying a perpetual growth rate ranging from 0.5% to 1.5% to the unlevered free cash flow of the Company during the final year of the 5-year period. The unlevered free cash flows and the range of terminal asset values were then discounted to present values using a range of discount rates from 9.5% to 10.5%, which were chosen by the Advisors based upon an analysis of the Company's weighted average cost of capital. The present value of the unlevered free cash flows and the range of terminal asset values were then adjusted for the Company's estimated 1999 fiscal year-end excess cash, option exercise proceeds and total debt. Based on this analysis, the Advisors calculated an estimated range of equity values of between $7.00 and $8.25 per Share. Historical Common Stock Performance. The Advisors conducted a historical analysis of the closing price of the Shares over the 52-week period prior to the date of their Opinion and also reviewed the closing price of the Shares as of the date two weeks prior to the date of their Opinion. During the 52-week period, based on trading prices on the American Stock Exchange, the Company's Shares achieved a high trading price of $10.875 on May 24, 1999 and a low trading price of $6.75 on December 31, 1999. On January 11, 2000, the closing price of the Shares was $7.3125 and on January 25, 2000 the closing price of the Shares was $7.9375. The summary set forth above does not purport to be, and is not, a complete description of the financial analyses or data undertaken or presented by the Advisors. The summary of the Advisors' Opinion set forth in this Offer to Purchase is qualified in its entirety by reference to the full text of the written Opinion. The full text of the Advisors' written Opinion, which sets forth among other things the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by J.P. Morgan and The Beacon Group in conducting their financial analysis and in rendering their Opinion, is attached as Exhibit 12(c) to the Schedule TO. The written Opinion should be read carefully and in its entirety. A copy of the Advisors' written Opinion will be made available for inspection and copying at the principal office of Thermo Electron during its regular business hours upon request from any record holder of the Shares or a representative of such person designated as such in writing or may be obtained from the Schedule TO filed with the Commission. Requests to have the Opinion made available should be directed to the Corporate Secretary of Thermo Electron at the address set forth under "Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron." The preparation of the financial analysis and the related fairness Opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. In arriving at their Opinion, the Advisors considered the results of all of their analyses as a whole and did not attribute any particular weight to any analysis or factor considered by them. The Advisors believe that the summary set forth above and their analyses must be considered as a whole and that selecting portions thereof, without considering all of their analyses, could create an incomplete view of the processes underlying their analyses and Opinion. In addition, the Advisors may have given various analyses and factors more or less weight than other analyses and factors, 21 22 and may have deemed various assumptions more or less probable than other assumptions so that the ranges of valuation resulting from any particular financial analysis described should not be taken as the Advisors' view of the actual value of the Company. The Advisors based their analyses on assumptions that they deemed reasonable, including assumptions concerning general business and economic conditions and industry-specific factors. The other principal assumptions upon which the Advisors based their analyses are set forth above under the description of each such analysis. The Advisors' analyses are not necessarily indicative of actual values or actual future results that might be achieved, which values may be higher or lower than those indicated. Moreover, the Advisors' analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be bought or sold. As described above, the Advisors' financial analysis and Opinion was only one of many factors considered by the Boards of Directors of Thermedics and Thermo Electron in their determination that the terms of the Offer and the Merger are fair to the Public Stockholders and should not be viewed as determinative of the views of the Boards of Directors of Thermedics and Thermo Electron with respect to the value of the Company. J.P. Morgan and The Beacon Group advised the Boards of Directors of Thermo Electron and Thermedics in connection with the Offer and the Merger in part because the Advisors had been retained to advise Thermo Electron in connection with the overall reorganization of Thermo Electron and its subsidiaries. The Boards of Directors of Thermo Electron and Thermedics also considered J.P. Morgan's and The Beacon Group's experience and expertise. J.P. Morgan is an international corporate and investment bank, and The Beacon Group is a nationally recognized private investment banking firm. As part of their investment banking businesses, J.P. Morgan and The Beacon Group are regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. J.P. Morgan has advised Thermo Electron and Thermedics that, in the ordinary course of its business, it or its affiliates may actively trade the debt and/or equity securities of the Company, Thermedics, Thermo Electron and their affiliates for their own account and for the accounts of customers and, accordingly, may at any time hold a long or short term position in such securities. In October 1999, Thermo Electron engaged The Beacon Group as its financial advisor in connection with Thermo Electron's proposed acquisition of the outstanding shares held by public stockholders in certain subsidiaries. Thermo Electron paid The Beacon Group $500,000 in fees for services rendered pursuant to that engagement in connection with the acquisition of the outstanding publicly-held shares of common stock of ThermoTrex Corporation and ThermoLase Corporation. As noted above, J.P. Morgan and The Beacon Group have acted as financial advisors to Thermo Electron for the purpose of advising Thermo Electron in connection with its strategic alternatives, including the proposed reorganization of Thermo Electron and its subsidiaries. As part of the proposed reorganization, it is contemplated that Thermo Electron will acquire the publicly-held minority interest in Thermedics and that J.P. Morgan and The Beacon Group will act as financial advisors to Thermo Electron in connection with such acquisition. Pursuant to a letter agreement among Thermo Electron and J.P. Morgan and The Beacon Group dated January 17, 2000, Thermo Electron has agreed to pay each of J.P. Morgan and The Beacon Group a fee of $500,000 for its services in connection with the Offer and the Merger. In addition, J.P. Morgan and The Beacon Group will be reimbursed for expenses incurred in connection with these transactions. The letter agreement also relates to the overall proposed reorganization of Thermo Electron and provides for separate fees for services with respect to other elements of Thermo Electron's reorganization. These other fees include a minimum retainer for each of J.P. Morgan and The Beacon Group of $1.25 million, and the engagement letter provides for substantial additional compensation if some or all of the other elements of Thermo Electron's reorganization are completed. Thermo Electron has agreed to indemnify J.P. Morgan and The Beacon Group and their affiliates against certain liabilities, including liabilities under the federal securities laws, in connection with their engagement. 22 23 CERTAIN PROJECTED FINANCIAL DATA The Company does not, as a matter of course, make public forecasts or projections as to future sales, earnings or other income statement data, cash flows or balance sheet and financial position information. However, Thermedics and Thermo Electron had access to the 1999-2000 Projections and the 2000 Projections, made the 1999-2000 Projections available to the Special Committee and made the 2000 Projections available to the Advisors. The 1999-2000 Projections and the 2000 Projections were prepared by the Company's management in the regular course of its financial planning. The 2001-2003 Projections were prepared by Thermo Electron, with the assistance of the Company's management, for the sole purpose of preparing the discounted cash flow analysis included in the August 30 Offer. The 1999-2000 Projections, the 2000 Projections and the 2001-2003 Projections are collectively referred to herein as the "Projections". The following summaries of the 1999-2000 Projections and the 2000 Projections are included in this Offer to Purchase solely because the 1999-2000 Projections were made available to Thermedics, Thermo Electron and the Special Committee, and the 2000 Projections were made available to Thermedics, Thermo Electron and the Advisors. The 2001-2003 Projections are included in this Offer to Purchase because they were provided to the Special Committee. The Projections do not reflect any of the effects of the Offer, the Merger or other changes that may in the future be deemed appropriate concerning the Company and its assets, business, operations, properties, policies, corporate structure, capitalization and management in light of the circumstances then existing. Thermedics and Thermo Electron believe that the assumptions upon which the Projections are based were reasonable at the time the Projections were prepared, given the information known by management of the Company or Thermo Electron at such time. The Projections were not prepared with a view toward public disclosure or compliance with published guidelines of the Commission or the American Institute of Certified Public Accountants regarding forward-looking information or generally accepted accounting principles. Neither the Company's independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the prospective financial information contained in the Projections nor have they expressed any opinion or given any form of assurance on such information or its achievability, and they assume no responsibility for, and disclaim any association with, such prospective financial information. Furthermore, the Projections necessarily make numerous assumptions, many of which are beyond the control of Thermedics and Thermo Electron and may prove not to have been, or may no longer be, accurate. Additionally, this information, except as otherwise indicated, does not reflect revised prospects for the Company's businesses, changes in general business and economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time such information was prepared. Accordingly, such information is not necessarily indicative of current values or future performance, which may be significantly more favorable or less favorable than as set forth below, and should not be regarded as a representation that they will be achieved. THE PROJECTIONS ARE NOT GUARANTEES OF PERFORMANCE. THEY INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS. THE FUTURE FINANCIAL RESULTS AND STOCKHOLDER VALUE OF THE COMPANY MAY MATERIALLY DIFFER FROM THOSE EXPRESSED IN THE PROJECTIONS. MANY OF THE FACTORS THAT WILL DETERMINE THESE RESULTS AND VALUES ARE BEYOND THE COMPANY'S ABILITY TO CONTROL OR PREDICT. STOCKHOLDERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE PROJECTIONS. THERE CAN BE NO ASSURANCE THAT THE PROJECTIONS WILL BE REALIZED OR THAT THE COMPANY'S FUTURE FINANCIAL RESULTS WILL NOT MATERIALLY VARY FROM THE PROJECTIONS. THE COMPANY DOES NOT INTEND TO UPDATE OR REVISE THE PROJECTIONS. 23 24 The following are the 1999-2000 Projections: 1999-2000 PROJECTIONS (IN THOUSANDS)
PROJECTED Q3 PROJECTED Q4 PROJECTED PROJECTED 1999 1999 1999 2000 SELECTED INCOME STATEMENT DATA: Revenues.............................................. $17,768 $17,769 $74,136 $74,508 ------- ------- ------- ------- Costs and Operating Expenses: Cost of revenues.................................... 8,065 8,065 32,951 33,082 Operating expenses.................................. 7,463 7,431 31,926 30,699 ------- ------- ------- ------- 15,528 15,496 64,877 63,781 ------- ------- ------- ------- Operating Income...................................... 2,240 2,273 9,259 10,727 Interest Income....................................... 300 300 1,280 1,200 Other Expense, Net.................................... -- -- (18) -- ------- ------- ------- ------- Income Before Provision for Income Taxes.............. 2,540 2,573 10,521 11,927 Provision for Income Taxes............................ 991 1,004 4,104 4,651 ------- ------- ------- ------- Net Income............................................ $ 1,549 $ 1,569 $ 6,417 $ 7,276 ======= ======= ======= ======= SELECTED BALANCE SHEET DATA: Accounts Receivable, Net.............................. $15,400 $15,300 $15,725 $14,600 Inventories........................................... 16,350 16,100 16,476 15,200 Prepaid Income Taxes and Other Current Assets......... 5,533 5,564 5,633 5,564 ------- ------- ------- ------- Total Current Assets Excluding Cash and Investments... 37,283 36,964 37,834 35,364 Property, Plant, and Equipment: Balance, beginning of period........................ 4,834 4,784 4,939 4,734 Additions........................................... 425 425 1,782 1,650 Depreciation expense................................ (475) (475) (1,821) (1,925) Sales............................................... -- -- (165) -- ------- ------- ------- ------- Balance, end of period.............................. 4,784 4,734 4,735 4,459 Cost in Excess of Net Assets of Acquired Companies.... 52,984 52,611 53,474 51,119
24 25 The following are the 2000 Projections: 2000 PROJECTIONS (IN THOUSANDS)
PROJECTED Q4 PROJECTED PROJECTED 1999 1999 2000 SELECTED INCOME STATEMENT DATA: Revenues................................................ $17,100 $73,257 $75,050 ------- ------- ------- Costs and Operating Expenses: Cost of revenues...................................... 7,817 35,254 34,018 Selling, general, and administrative expenses......... 5,885 24,795 24,252 Research and development expenses..................... 2,079 8,434 7,700 ------- ------- ------- 15,781 68,483 65,970 ------- ------- ------- Operating Income........................................ 1,319 4,774 9,080 Interest Income......................................... 400 1,490 1,600 Other Expense, Net...................................... (5) (27) (20) ------- ------- ------- Income Before Provision for Income Taxes................ 1,714 6,237 10,660 Provision for Income Taxes.............................. 97 1,292 4,162 ------- ------- ------- Net Income.............................................. $ 1,617 $ 4,945 $ 6,498 ======= ======= ======= SELECTED BALANCE SHEET DATA: Accounts Receivable, Net................................ $14,600 $14,600 $14,100 Inventories............................................. 13,300 13,300 13,200 Prepaid Income Taxes and Other Current Assets........... 6,164 6,164 4,914 ------- ------- ------- Total Current Assets Excluding Cash and Investments..... 34,064 34,064 32,214 Property, Plant and Equipment: Balance, beginning of period.......................... 4,563 4,939 4,708 Additions............................................. 597 1,719 1,650 Depreciation expense.................................. (451) (1,772) (1,920) Sales................................................. (1) (177) -- ------- ------- ------- Balance, end of period................................ 4,708 4,709 4,438 Cost in Excess of Net Assets of Acquired Companies...... 52,747 52,747 51,283
25 26 The following are the 2001-2003 Projections: 2001-2003 PROJECTIONS (IN THOUSANDS)
FISCAL YEAR --------------------------------- 2001 2002 2003 Revenues.................................................... $77,200 $80,500 $83,800 Growth Rate............................................... 3.6% 4.3% 4.1% Gross Profit................................................ $43,232 $45,241 $47,179 Gross Profit Margin....................................... 56.0% 56.2% 56.3% EBIT (without goodwill amortization)........................ $13,985 $15,167 $16,059 EBIT Margin............................................... 18.1% 18.8% 19.2% EBIAT--Earnings Before Interest After Taxes................. $ 8,391 $ 9,100 $ 9,635 NOA--Net Operating Assets................................... $27,627 $28,606 $29,613 NOA/Sales................................................. 35.8% 35.5% 35.3% Increase (Decrease) NOA..................................... $ 107 $ 978 $ 1,007 Operating Cash Flows........................................ $ 8,284 $ 8,122 $ 8,628
CONFLICTS OF INTEREST THERMO ELECTRON AND THERMEDICS. The financial interests of Thermo Electron and Thermedics are adverse as to the Offer Price to the financial interests of the Public Stockholders. DIRECTORS OF THERMO ELECTRON AND THERMEDICS. The members of the Boards of Directors of Thermo Electron and Thermedics own common stock of, or hold options to purchase the common stock of, Thermo Electron, Thermedics and/or the Company. In addition, certain members of the Boards of Directors of Thermo Electron and Thermedics are also officers of the Company. These positions and equity interests present these directors with actual or potential conflicts of interest in determining the fairness of the Offer and the Merger to the Public Stockholders. See Schedule I to this Offer to Purchase for a listing of the positions that the members of the Boards of Directors of Thermo Electron and Thermedics hold with Thermo Electron, Thermedics and the Company and their ownership of the common stock of Thermo Electron, Thermedics and the Company. To the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron, all of the directors and executive officers of Thermo Electron and Thermedics who own Shares have advised Thermedics that they intend to tender their Shares in the Offer. EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY. In considering any position that the Board of Directors of the Company may take with respect to the Offer, the Public Stockholders should be aware that the executive officers and certain directors of the Company have interests in connection with the Offer and the Merger that present them with actual or potential conflicts of interest, as summarized below. Following consummation of the Offer and the Merger, Thermedics anticipates that the board of directors of the Purchaser, as the corporation surviving the Merger (the "Surviving Corporation"), will be comprised solely of members of the Company's and Thermedics' management. Officers and directors of the Company who own Shares will receive the Offer Price in the Offer or the Merger on the same terms as the Public Stockholders. As of January 28, 2000, the members of the Board of Directors and executive officers of the Company owned in the aggregate 18,103 Shares and will receive a payment for their Shares in the aggregate amount of $144,824, assuming that they tender all of their Shares in the Offer or their Shares are acquired in the Merger. To the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron, all of the directors and executive officers of the Company who own Shares have advised Thermedics that they intend to tender their Shares in the Offer. 26 27 In addition, as of January 28, 2000, such Board members and executive officers of the Company held Options to acquire an aggregate of 252,800 Shares, with exercise prices ranging from $7.56 to $11.99 per Share. Unvested Options held by such persons will be assumed by Thermo Electron in the Merger and converted into options to acquire shares of Thermo Electron's common stock on the same terms as are applicable to all the other holders of Options. In the case of vested Options held by such persons, the holders will be given the opportunity to elect in the Merger either to convert the Options into options for Thermo Electron common stock or to receive cash for their Options at the Offer Price less the applicable exercise price. See "--Certain Effects Of The Offer And The Merger--Assumption of Options by Thermo Electron." Certain members of the Board of Directors of the Company and certain executive officers of the Company are directors or officers of Thermo Electron and/or Thermedics. All of such directors and executive officers of the Company hold equity interests in Thermo Electron and Thermedics. Mr. Melas-Kyriazi, the chief financial officer of the Company, is also the chief financial officer of Thermo Electron and Thermedics. Mr. John T. Keiser, a director of the Company, is chief operating officer, biomedical of Thermo Electron and is president and chief executive officer of Thermedics. Mr. Earl R. Lewis, a director of the Company, is chief operating officer, measurement and detection, of Thermo Electron. Mr. Paul F. Kelleher, the chief accounting officer of the Company, is also the chief accounting officer of Thermo Electron and Thermedics. Consequently, certain of these directors and officers receive or have received compensation not only from the Company but also from Thermo Electron, Thermedics and/or their affiliates. INDEMNIFICATION AGREEMENTS. Thermo Electron has entered into separate indemnification agreements with each of the Company's executive officers and directors providing for indemnification of and advancement of expenses to such persons directly by Thermo Electron in the event that such person, by reason of his or her status as a director or officer of the Company (or service as a director, officer or fiduciary of another enterprise at the request of Thermo Electron), is made or threatened to be made a party to any threatened, pending, or completed action, suit or other proceeding, whether civil, criminal, administrative or investigative, if the indemnitee acted in good faith and in a manner the indemnitee reasonably believed to be in or not opposed to the best interests of Thermo Electron, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In the case of any threatened, pending or completed action, suit or proceeding by or in the right of Thermo Electron, indemnification shall be made to the maximum extent permitted under Delaware law. OTHER POSSIBLE PURCHASES OF SHARES If the Offer is successfully completed, Thermo Electron and its subsidiaries will collectively own at least 90% of the outstanding Shares. If, after the Offer is completed but prior to the effective date of the Merger (the "Effective Date of the Merger"), as a result of the exercise of Options or for any other reason, Thermo Electron and its subsidiaries collectively own less than 90% of the outstanding Shares, the Purchaser intends to acquire additional Shares in the open market or in privately negotiated transactions to the extent required for Thermo Electron and its subsidiaries' collective ownership of Shares to equal or exceed 90%. If the Offer is not completed, the Purchaser may make open market or privately negotiated purchases of Shares to the extent necessary in order for Thermo Electron and its subsidiaries collectively to own at least 90% of the outstanding Shares. Such open market or privately negotiated purchases would be made at market prices or privately negotiated prices at the time of purchase, which may be higher or lower than the Offer Price. THE MERGER If the Offer is successfully completed, Corpak and Thermo Electron plan to contribute the Shares they own to the Purchaser in exchange for capital stock of the Purchaser and to cause the Company to merge into the Purchaser in a short-form merger. The short-form merger would occur as soon as possible after completion of the Offer. In the Merger, the Purchaser would be the surviving corporation and would change its name to "Thermedics Detection Inc." The surviving corporation would be owned exclusively by Thermo Electron and Corpak. Under Massachusetts law, if the Purchaser owns at least 90% of the outstanding Shares, the Purchaser would have the power to approve, adopt and consummate the Merger without a vote of the Company's stockholders (other than the Purchaser) or Board of Directors. 27 28 On the Effective Date of the Merger, each outstanding Share (other than Shares held by stockholders, if any, who are entitled to and perfect their appraisal rights under Massachusetts law) would be cancelled and converted into the right to receive the Offer Price in cash, without interest. After the Merger, Thermedics and Thermo Electron will, directly or indirectly, own 100% of the equity interest in the Surviving Corporation. CERTAIN EFFECTS OF THE OFFER AND THE MERGER GENERAL. Upon completion of the Offer and the Merger, Thermedics and Thermo Electron would have complete control over the conduct of the Company's business and together would have a 100% interest in the net book value and net earnings of the Company. In addition, Thermedics and Thermo Electron would receive the benefit of complete control over any future increases in the value of the Company and would bear the complete risk of any losses incurred in the operation of the Company and any decrease in the value of the Company. Thermo Electron's and its subsidiaries' aggregate ownership of the Company prior to the transactions contemplated by the Offer and the Merger was approximately 88.9%. Upon completion of the Offer and the Merger, Thermo Electron's and its subsidiaries' aggregate interest in the Company's net book value of approximately $121.7 million on January 1, 2000 and net earnings of $5.1 million for the year ended January 1, 2000 would increase from approximately 88.9% of such amounts to 100% of such amounts. BENEFITS AND DETRIMENTS TO THE PUBLIC STOCKHOLDERS. Upon completion of the Offer and the Merger, the Public Stockholders would no longer have any interest in, and would not be stockholders of, the Company and therefore would not participate in the Company's future earnings and potential growth and would no longer bear the risk of any decreases in the value of the Company. In addition, the Public Stockholders would not share in any distribution of proceeds after any sales of businesses of the Company, whether contemplated at the time of the Offer or thereafter. See "--Conduct Of The Company's Business After The Offer And The Merger." All of the Public Stockholders' other incidents of stock ownership, such as the rights to vote on certain corporate decisions, to elect directors, to receive distributions upon the liquidation of the Company and to receive appraisal rights upon certain mergers or consolidations of the Company (unless such appraisal rights are perfected in connection with the Merger), as well as the benefit of potential increases in the value of their holdings in the Company based on any improvements in the Company's future performance, would be extinguished upon acceptance of Shares tendered in the Offer or, if not tendered, upon completion of the Merger. Upon completion of the Offer and the Merger, the Public Stockholders would also not bear the risks of potential decreases in the value of their holdings in the Company based on any downturns in the Company's future performance. Instead, the Public Stockholders would have immediate liquidity in the form of the Offer Price in place of an ongoing equity interest in the Company in the form of the Shares. In summary, if the Offer and the Merger are completed, the Public Stockholders would have no ongoing rights as stockholders of the Company (other than statutory appraisal rights in the case of Public Stockholders who are entitled to and perfect such rights under Massachusetts law). POSSIBLE EFFECT OF THE OFFER AND OPEN MARKET PURCHASES ON THE MARKET FOR SHARES. Following the completion of the Offer and prior to the Effective Date of the Merger, the purchase of Shares by the Purchaser pursuant to the Offer or any subsequent open market or privately negotiated purchases would reduce the number of Shares that might otherwise trade publicly and may reduce the number of holders of Shares. This could adversely affect the liquidity and market value of the remaining Shares held by the public. AMERICAN STOCK EXCHANGE LISTING. If the Offer and Merger are consummated, the Shares would not meet the requirements for continued listing on the American Stock Exchange and would be delisted. Assuming that the Merger occurs shortly after the completion of the Offer, Thermo Electron and Thermedics do not expect the American Stock Exchange to delist the Shares until after the Effective Date of the Merger. Following the closing of the Offer and prior to the Effective Date of the Merger, depending upon the aggregate market value and the number of Shares not purchased pursuant to the Offer or any subsequent open market or privately negotiated purchases, as well as the number of Public Stockholders who are not affiliated with Thermedics or Thermo Electron, the Shares may no longer meet the quantitative requirements for continued listing on the American Stock Exchange. The listing requirements of the American Stock Exchange 28 29 require that an issuer have at least 200,000 publicly held shares, held by at least 300 stockholders, with a market value of at least $1,000,000 and have stockholders' equity of at least $2,000,000 or $4,000,000 (depending on profitability levels during the issuer's four most recent fiscal years). In the event that the Shares no longer meet the requirements for listing on the American Stock Exchange, it is possible that the Shares would continue to trade in the over-the-counter market prior to the Effective Date of the Merger and that price or other quotations might still be available from other sources. The extent of the public market for the Shares and the availability of such quotations would, however, depend upon such factors as the number of holders and/or the aggregate market value of such Shares remaining at such time, the interest in maintaining a market in such Shares on the part of securities firms, the possible termination of registration of such Shares under the Exchange Act, as described below, and other factors. The Purchaser cannot predict whether a reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of the Shares or whether it would cause future market prices to be greater or less than the price paid in the Offer and the Merger. EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act. If the Offer and the Merger are completed, however, the Company's reporting obligations under the Exchange Act would terminate. Prior to the Effective Date of the Merger, the purchase of Shares pursuant to the Offer or open market or privately negotiated purchases following consummation of the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act. Registration of the Shares may be terminated upon application by the Company to the Commission if the Shares are not listed on a national securities exchange (see "--American Stock Exchange Listing") and there are fewer than 300 record holders of the Shares. Thermedics presently intends to seek to cause the Company to terminate the registration of the Shares under the Exchange Act as soon after the consummation of the Offer or the Merger as the requirements for termination of registration are met. The termination of the registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to holders of the Shares and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement in connection with stockholders' meetings pursuant to Section 14(a) and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions, no longer applicable to the Shares. Furthermore, "affiliates" of the Company and persons holding "restricted securities" of the Company may be deprived of the ability to dispose of the securities pursuant to Rule 144 under the Securities Act. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities" or eligible for listing on the American Stock Exchange. MARGIN REGULATIONS. The Shares are currently "margin securities" under the rules of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such Shares for the purpose of buying, carrying or trading in securities ("purpose loans"). If the Offer and the Merger are completed, the Shares would no longer be "margin securities." Following the purchase of Shares pursuant to the Offer or any subsequent open market or privately negotiated purchases and prior to the Effective Date of the Merger, depending upon factors such as the number of record holders of the Shares and the number and market value of publicly held Shares, the Shares might no longer constitute "margin securities" for purposes of the Federal Reserve Board's margin regulations and therefore no longer be used as collateral for purpose loans made by brokers. In addition, if registration of the Shares under the Exchange Act were terminated, the Shares would no longer constitute "margin securities." TREATMENT OF THERMEDICS DETECTION OPTIONS. The Company has, from time to time, issued Options to acquire Shares pursuant to the Company's Equity Incentive Plan and Employees Equity Incentive Plan (together, the "Plans"). On the Effective Date of the Merger, each outstanding unvested Option under the Company's Plans will be assumed by Thermo Electron and converted into options to acquire shares of Thermo Electron common stock as provided below. In the case of vested Options, the holders will be given the opportunity to elect in the Merger either to convert the Options into vested options for Thermo Electron common stock or to receive cash from Thermedics in an amount equal to the number of Shares that have 29 30 vested under such Option multiplied by the difference between the Offer Price and the exercise price per Share of such Option. Each Option assumed by Thermo Electron will continue to have, and be subject to, the same terms and conditions, including the vesting of shares issuable upon the exercise thereof, as were applicable to the Option immediately prior to the Effective Date of the Merger, except that: - each Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Thermo Electron common stock equal to the product of the number of Shares that were issuable upon exercise of such Option immediately prior to the Effective Date of the Merger multiplied by the Exchange Ratio (as defined below), rounded down to the nearest whole number of shares of Thermo Electron common stock, and - the per share exercise price for the shares of Thermo Electron common stock issuable upon exercise of such assumed Option will be equal to the quotient determined by dividing the exercise price per Share at which such Option was exercisable immediately prior to the Effective Date of the Merger by the Exchange Ratio, rounded up to the nearest whole cent. The "Exchange Ratio" is a fraction, the numerator of which is the Offer Price and the denominator of which is the closing price of the Thermo Electron common stock on the day immediately preceding the Effective Date of the Merger as reported on the consolidated transactions tape. ACCOUNTING TREATMENT. The Offer and the Merger would be accounted for as the acquisition of a minority interest by Thermedics, using the purchase method of accounting. TAX CONSEQUENCES. For federal income tax purposes, the receipt of the cash consideration by holders of the Shares pursuant to the Offer or the Merger will be a taxable sale of the holder's Shares. See "Certain Federal Income Tax Consequences." CONDUCT OF THE COMPANY'S BUSINESS AFTER THE OFFER AND THE MERGER Following Thermo Electron's reorganization, Thermo Electron plans to retain the Surviving Corporation as part of Thermo Electron's core measurement and detection instruments businesses. In connection with the reorganization of Thermo Electron and its subsidiaries, Thermo Electron intends to evaluate ways in which its instruments businesses, including the Company's business, can be more efficiently integrated and operated. Thermedics and Thermo Electron do not currently have any commitment or agreement for the sales of any of the Company's businesses. Additionally, Thermo Electron and Thermedics do not currently contemplate any material change in the composition of the Company's current management, except that Thermedics intends to appoint a Board of Directors of the Surviving Corporation comprised solely of members of the Company's and Thermedics' management after the Merger. In connection with its reorganization, Thermo Electron currently intends to acquire all of the outstanding common stock of Thermedics that it does not currently own. If such transaction is completed, the Surviving Corporation will become an indirect wholly-owned subsidiary of Thermo Electron. Except as otherwise described in this Offer to Purchase, the Purchaser, Corpak, Thermedics and Thermo Electron do not have, as of the date of this Offer to Purchase, any specific plans or proposals for: - any extraordinary corporate transaction involving the Company after the completion of the Offer and the Merger; - any sale or transfer of a material amount of assets currently held by the Company after the completion of the Offer and the Merger; - any change in the Board of Directors or management of the Company; - any material change in the Company's dividend rate or policy; or - any other material change in the Company's corporate structure or business. 30 31 CONDUCT OF THE COMPANY'S BUSINESS IF THE OFFER IS NOT COMPLETED If the Offer is not completed because the Minimum Condition or another condition is not satisfied or waived, Thermo Electron and Thermedics expect that the Company's current management will continue to operate the Company's business substantially as presently operated. See "--Conduct Of The Company's Business After The Offer And The Merger." However, Thermedics and Thermo Electron anticipate that if the Offer is not completed, Thermedics and Thermo Electron will re-evaluate the role of the Company within the overall reorganization strategy being pursued by Thermo Electron. In particular, Thermedics and Thermo Electron may consider: - engaging in open market or privately negotiated purchases of Shares to increase Thermo Electron's and its subsidiaries' aggregate ownership of Shares to at least 90% of the outstanding Shares and then effecting a short-form merger; - proposing that the Purchaser and the Company enter into a long-form merger agreement, which would require the approval of the Company's Board of Directors, and voting all of their Shares in favor of such merger; - keeping outstanding the public minority interest in the Company, in which case the Public Stockholders would receive no cash for their Shares and would bear the risk that the trading price per Share could decrease to a price that is less than the Offer Price; or - selling their interests in the Company or pursuing a sale of the entire Company to a third party. If Thermedics and Thermo Electron were to pursue any of these alternatives, it may take considerably longer for the Public Stockholders to receive any consideration for their Shares (other than through sales in the open market) than if they had tendered their Shares in the Offer. Any such transaction may result in proceeds per Share to the Public Stockholders that are more or less than the Offer Price. 31 32 THE TENDER OFFER TERMS OF THE OFFER; EXPIRATION DATE Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered prior to the Expiration Date (as defined below) and not properly withdrawn as provided in "--Withdrawal Rights." The term "Expiration Date" means 12:00 midnight, New York City time, on Thursday, April 6, 2000, unless and until the Purchaser, in its sole discretion, shall have extended the period during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. Subject to the applicable rules and regulations of the Commission, the Purchaser expressly reserves the right, in its sole discretion, at any time and from time to time, to extend the period during which the Offer is open for any reason, including the failure to satisfy any of the conditions specified in "--Certain Conditions Of The Offer," and thereby delay acceptance for payment of, and payment for, any Shares, by giving oral or written notice of such extension to the Depositary. There can be no assurance that the Purchaser will exercise its right to extend the Offer. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the rights of a tendering stockholder to withdraw such stockholder's Shares. See "--Withdrawal Rights." Subject to the applicable rules and regulations of the Commission, the Purchaser also expressly reserves the right, in its sole discretion, at any time and from time to time, to (1) terminate the Offer and not accept for payment (or pay for) any Shares if any of the conditions referred to in "--Certain Conditions Of The Offer" has not been satisfied or upon the occurrence and during the continuance of any of the events specified in "--Certain Conditions Of The Offer," and (2) waive any condition or amend the Offer in any respect, in each case by giving oral or written notice of termination, waiver or amendment to the Depositary and by making a public announcement thereof. The Purchaser acknowledges (a) that Rule 14e-1(c) under the Exchange Act requires the Purchaser to pay the consideration offered or return the Shares tendered promptly after the termination or withdrawal of the Offer and (b) that the Purchaser may not delay acceptance for payment of, or payment for, any Shares upon the occurrence of any of the conditions specified in "--Certain Conditions Of The Offer" without extending the period during which the Offer is open. If the Minimum Condition or any other condition specified in "--Certain Conditions Of The Offer" is not fulfilled by the Expiration Date, the Purchaser reserves the right (but shall not be obligated) to (1) decline to purchase any of the Shares tendered, return all tendered Shares to tendering stockholders and terminate the Offer, (2) extend the Offer and retain all tendered Shares until the expiration of the Offer, as extended, subject to the terms and conditions of the Offer (including any rights of stockholders to withdraw their Shares), or (3) waive or reduce the condition and, subject to complying with applicable rules and regulations of the Commission, accept for payment and purchase all Shares validly tendered. Any extension, termination or amendment will be followed as promptly as practicable by a public announcement thereof, such announcement, in the case of an extension, to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which the Purchaser may choose to make any public announcement, except as provided by applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to holders of Shares), the Purchaser will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to the Dow Jones News Service. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or waives a material condition of the Offer, the Purchaser will disseminate additional tender offer materials (including by public announcement as set forth above) and extend the Offer to the extent required by Rules 14d-4(d), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price, a change in percentage of securities sought or a change in any dealer's 32 33 soliciting fee, will depend upon the facts and circumstances, including the relative materiality of the changes. With respect to a change in price or, subject to certain limitations, a change in the percentage of securities sought or a change in any dealer's soliciting fee, a minimum ten business day period from the date of such change is generally required to allow for adequate dissemination of such change to stockholders. Accordingly, if, prior to the Expiration Date, the Purchaser decreases the number of Shares being sought, increases the consideration offered pursuant to the Offer or adds a dealer's soliciting fee, and if the Offer is scheduled to expire at any time earlier than the period ending on the tenth business day from the date that notice of such increase, decrease or addition is first published, sent or given to stockholders, the Offer will be extended at least until the expiration of such ten business day period. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. The Company has provided the Purchaser with the Company's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal and, if required, other relevant material will be mailed to record holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the Company's stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will purchase by accepting for payment, and will pay for, all Shares validly tendered prior to the Expiration Date and not properly withdrawn (including Shares validly tendered and not withdrawn during any extension of the Offer, if the Offer is extended, subject to the terms and conditions of such extension), promptly after the Expiration Date. In addition, subject to complying with Rule 14e-1 under the Exchange Act, the Purchaser expressly reserves the right, in its sole discretion, to delay the acceptance for payment of, or payment for, Shares in order to comply, in whole or in part, with any applicable law. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of: - certificates evidencing Shares ("Share Certificates") or timely confirmation of a book-entry transfer of such Shares ("Book-Entry Confirmation") into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in "--Procedures For Accepting The Offer And Tendering Shares"; - the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined below) in connection with a book-entry transfer; and - any other documents required by the Letter of Transmittal. Accordingly, payment may be made to tendering stockholders at different times if delivery of the Shares and other required documents occurs at different times. The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn if, as and when the Purchaser gives oral or 33 34 written notice to the Depositary of the Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares so accepted for payment pursuant to the Offer will be made by deposit of the aggregate purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting such payment to stockholders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR DELAY IN MAKING SUCH PAYMENT. Upon the deposit of funds with the Depositary for the purpose of making payment to validly tendering stockholders, the Purchaser's obligation to make such payment shall be satisfied and such tendering stockholders must thereafter look solely to the Depositary for payment of the amounts owed to them by reason of the acceptance for payment of Shares pursuant to the Offer. If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if Share Certificates are submitted for more Shares than are tendered, Share Certificates representing Shares not purchased or not tendered will be returned, without expense, to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedures for book-entry transfer set forth in "--Procedures For Accepting The Offer And Tendering Shares," such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), as soon as practicable following expiration or termination of the Offer. If, prior to the Expiration Date, the Purchaser increases the consideration to be paid per Share, the Purchaser will pay such increased consideration for all Shares purchased pursuant to the Offer, whether or not such Shares have been tendered or purchased prior to such increase in consideration. The Purchaser reserves the right to transfer or assign, in whole or in part from time to time, to one or more of its affiliates, the right to purchase the Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer, nor will any such transfer or assignment in any way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES GENERAL. Except as set forth below, in order for Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message in connection with a book-entry delivery of Shares, and any other documents required by the Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, and either (l) Share Certificates evidencing tendered Shares must be received by the Depositary at such address or such Shares must be tendered pursuant to the procedures for book-entry transfer set forth below (and a Book-Entry Confirmation must be received by the Depositary), in each case prior to the Expiration Date, or (2) the guaranteed delivery procedures set forth below must be complied with. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering stockholders, by execution of the Letter of Transmittal (or a facsimile thereof), waive any right to receive any notice of the acceptance of their Shares for payment. THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE SOLE OPTION AND RISK OF EACH TENDERING STOCKHOLDER AND, EXCEPT AS OTHERWISE PROVIDED UNDER THIS HEADING "--PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES," THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS MADE BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. 34 35 BOOK-ENTRY TRANSFER. The Depositary will make a request to establish accounts with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures for such transfer. Although delivery of Shares may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message, and any other documents required by the Letter of Transmittal, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date in order for such Shares to be validly tendered pursuant to the Offer, or the tendering stockholder must comply with the guaranteed delivery procedures described below. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be guaranteed by a firm that is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program, the Stock Exchanges' Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program (an "Eligible Institution"), unless Shares tendered thereby are tendered (1) by a registered holder of Shares who has not completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal or (2) for the account of an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If the Share Certificates are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made, or Share Certificates for unpurchased Shares are to be returned, to a person other than the registered holder(s), then the tendered Share Certificates must be endorsed or accompanied by appropriate stock powers signed exactly as the name(s) of the registered holder(s) appear(s) on the Share Certificates with the signature(s) on such Share Certificates or stock powers guaranteed by an Eligible Institution as provided above and in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal. GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's Share Certificates are not immediately available or time will not permit all of the required documents to reach the Depositary prior to the Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, such Shares may nevertheless be tendered, provided that all of the following conditions are satisfied: - such tender is made by or through an Eligible Institution; - a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser with the Letter of Transmittal, is received by the Depositary, in accordance with the procedure set forth as provided below, prior to the Expiration Date; and - the Share Certificates (or a Book-Entry Confirmation) for all tendered Shares, in proper form for transfer, in each case together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message, and any other documents required by the Letter of Transmittal, are received by the Depositary within three American Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. Notwithstanding any other provision of this Offer, payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of Share Certificates therefor (or 35 36 Book-Entry Confirmation of the transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), together with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message, and any other documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering stockholders at the same time and will depend upon when Share Certificates or Book-Entry Confirmations of such Shares are received by the Depositary. BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the U.S. federal income tax laws, the Depositary may, under certain circumstances, be required to withhold 31% of the amount of any payments made to certain stockholders pursuant to the Offer. To prevent such backup federal income tax withholding with respect to payments made to certain stockholders of the purchase price of Shares purchased pursuant to the Offer, each such stockholder must provide the Depositary with such stockholder's correct taxpayer identification number and certify that such stockholder is not subject to backup federal income tax withholding by completing the Substitute Form W-9 included in the Letter of Transmittal. See Instruction 9 of the Letter of Transmittal. APPOINTMENT AS PROXY. By executing the Letter of Transmittal, a tendering stockholder irrevocably appoints designees of the Purchaser as such stockholder's attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution with respect to any Shares tendered thereby (and with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after January 31, 2000). All such powers of attorney and proxies shall be considered irrevocable and coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts the tendered Shares for payment and deposits the purchase price therefor with the Depositary. Upon such deposit, all prior powers of attorney and proxies given by such stockholder at any time with respect to such Shares (and other Shares and securities issued or issuable in respect of the tendered Shares on or after January 31, 2000) will, without further action, be revoked, and no subsequent powers of attorney or proxies may be given nor any subsequent written consents be executed by such stockholder (and, if given or executed, will not be deemed effective). Upon such deposit by the Purchaser, the designees of the Purchaser will, with respect to such Shares and other securities, be empowered to exercise all voting and other rights of such stockholder as they in their sole discretion may deem proper at any annual or special meeting of the Company's stockholders, or any adjournment or postponement thereof, or by written consent in lieu of any such meeting or otherwise. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's payment for such Shares, the Purchaser must be able to exercise full voting and other rights of a record and beneficial holder, including, without limitation, voting at any meeting of stockholders or by written consent in lieu of any such meeting. DETERMINATION OF VALIDITY. All questions as to the validity, form, eligibility (including the time of receipt) and acceptance for payment of any tendered Shares pursuant to any of the procedures described above will be determined by the Purchaser, in its sole discretion, which determination will be final and binding on all parties. The Purchaser reserves the absolute right to reject any and all tenders of any particular Shares determined by it not to be in appropriate form or for which the acceptance of or payment for may, in the opinion of its counsel, be unlawful. The Purchaser also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularities in the tender of any particular Shares, whether or not similar defects or irregularities are waived in the case of any other Shares. The Purchaser's interpretations of the terms and conditions of the Offer (including the Letter of Transmittal and Instructions thereto) will be final and binding. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. None of the Purchaser, any of its affiliates or assigns, the Dealer Managers, the Information Agent, the Depositary or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. THE PURCHASER'S ACCEPTANCE FOR PAYMENT OF SHARES TENDERED PURSUANT TO THE OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN THE TENDERING STOCKHOLDER AND THE PURCHASER UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER. 36 37 WITHDRAWAL RIGHTS Except as otherwise provided in this Section, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless previously accepted for payment as provided herein, may also be withdrawn at any time after May 8, 2000. If the Purchaser extends the Offer, is delayed in, or delays, its acceptance for payment or payment for Shares or is unable to accept for payment or pay for Shares for any reason, then, without prejudice to the Purchaser's other rights under the Offer, tendered Shares may nevertheless be retained by the Depositary, on behalf of the Purchaser, and may not be withdrawn except to the extent tendering stockholders are entitled to and duly exercise withdrawal rights as described in this Section. Any such extension or delay will be accompanied by an extension of the Offer to the extent required by law. In order for a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from that of the person who tendered such Shares. If Share Certificates to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the tendering stockholder must also submit the serial numbers shown on such Share Certificates to the Depositary, and the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer, as set forth in "--Procedures For Accepting The Offer And Tendering Shares," any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the procedures of the Book-Entry Transfer Facility. Withdrawals may not be revoked and any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered at any time prior to the Expiration Date by following the procedures described in "--Procedures For Accepting The Offer And Tendering Shares." All questions as to the form and validity (including the time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, which determination will be final and binding on all parties. None of the Purchaser, its affiliates or assigns, the Dealer Managers, the Information Agent, the Depositary or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. CERTAIN CONDITIONS OF THE OFFER Notwithstanding any other provisions of the Offer, and in addition to (and not in limitation of) the Purchaser's rights to extend and amend the Offer at any time in its sole discretion, the Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the Commission, including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and may delay the acceptance for payment of or, subject to the restriction referred to above, the payment for, any tendered Shares, and may amend or terminate the Offer if (1) the Minimum Condition has not been satisfied or (2) at any time on or after March 10, 2000 and before the time of acceptance of the Shares for payment pursuant to the Offer, any of the following events shall occur: (a) any change shall have occurred in the business, properties, assets, liabilities, capitalization, stockholders' equity, financial condition, cash flows, operations, licenses, franchises or results of operations of the Company or its subsidiaries which has a material adverse effect on the Company and its subsidiaries taken as a whole; or 37 38 (b) any government or governmental authority or agency, whether domestic, foreign or supranational (a "Governmental Entity"), shall have instituted or threatened any action, proceeding, application, claim or counterclaim, sought or obtained any judgment, order or injunction, or taken any other action, which (i) challenges the acquisition by Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) of any Shares pursuant to the Offer or the Merger, restrains, prohibits or materially delays the making or consummation of the Offer or the Merger, prohibits the performance of any of the contracts or other arrangements entered into by Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) in connection with the acquisition of the Shares or the Company, seeks to obtain any material amount of damages, or otherwise directly or indirectly adversely affects the Offer or the Merger, (ii) seeks to prohibit or limit materially the ownership or operation by the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) of all or any material portion of the business or assets of the Company or of Thermo Electron and its affiliates, or to compel the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to dispose of or to hold separate all or any material portion of the business or assets of Thermo Electron or any of its affiliates or of the Company or any of its subsidiaries as a result of the transactions contemplated by the Offer or the Merger, (iii) seeks to impose any material limitation on the ability of the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to conduct the Company's or any subsidiary's business or own such assets, (iv) seeks to impose or confirm any material limitation on the ability of Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to acquire or hold, or to exercise full rights of ownership of, any Shares, including the right to vote such Shares on all matters properly presented to the stockholders of the Company, (v) seeks to require divestiture by Thermo Electron, Thermedics, Corpak or the Purchaser or any of their affiliates of all or any of the Shares or (vi) otherwise has resulted in or has a reasonable likelihood of resulting in, a material adverse effect on the business, financial condition, results of operation or prospects of the Company, Thermo Electron, Corpak or Thermedics (a "Material Adverse Effect"); or (c) there shall have been entered or issued any preliminary or permanent judgment, order, decree, ruling or injunction or any other action taken by any Governmental Entity or court, whether on its own initiative or the initiative of any other person, which (i) restrains, prohibits or materially delays the making or consummation of the Offer or the Merger, prohibits the performance of any of the contracts or other arrangements entered into by Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) in connection with the acquisition of the Shares or the Company or otherwise directly or indirectly materially adversely affects the Offer or the Merger, (ii) prohibits or limits materially the ownership or operation by the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) of all or any material portion of the business or assets of the Company and its subsidiaries taken as a whole or of Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron), or compels the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to dispose of or to hold separate all or any material portion of the business or assets of Thermo Electron or any of its affiliates or of the Company or any of its subsidiaries as a result of the transactions contemplated by the Offer or the Merger, (iii) imposes any material limitation on the ability of the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to conduct the Company's or any subsidiary's business or own such assets, (iv) imposes or confirms any material limitation on the ability of Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to acquire or hold, or to exercise full rights of ownership of, any Shares, including the right to vote such Shares on all matters properly presented to the stockholders of the Company, (v) requires divestiture by Thermo Electron, Thermedics, Corpak or the Purchaser or any of their affiliates of all or any of the Shares or (vi) otherwise has resulted in, or has a reasonable likelihood of resulting in, a Material Adverse Effect; or (d) there shall have been instituted or be pending before any Governmental Entity or court any action, proceeding, application, claim or counterclaim or any judgment, order or injunction sought or any other action taken by any person or entity (other than a Governmental Entity) which (i) challenges the 38 39 acquisition by Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) of any Shares pursuant to the Offer or the Merger, restrains, prohibits or materially delays the making or consummation of the Offer or the Merger, prohibits the performance of any of the contracts or other arrangements entered into by Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) in connection with the acquisition of the Shares or the Company, seeks to obtain any material amount of damages, or otherwise directly or indirectly adversely affects the Offer or the Merger, (ii) seeks to prohibit or limit materially the ownership or operation by the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) of all or any material portion of the business or assets of the Company or of Thermo Electron and its affiliates, or to compel the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to dispose of or to hold separate all or any material portion of the business or assets of Thermo Electron or any of its affiliates or of the Company or any of its subsidiaries as a result of the transactions contemplated by the Offer or the Merger, (iii) seeks to impose any material limitation on the ability of the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to conduct the Company's or any subsidiary's business or own such assets, (iv) seeks to impose or confirm any material limitation on the ability of Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) to acquire or hold, or to exercise full rights of ownership of, any Shares, including the right to vote such Shares on all matters properly presented to the stockholders of the Company, (v) seeks to require divestiture by Thermo Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo Electron) of all or any of the Shares or (vi) otherwise has resulted in or, in the Purchaser's reasonable discretion, has a reasonable likelihood of resulting in a Material Adverse Effect; and which in the case of clause (i), (ii), (iii), (iv) or (v) is successful or the Purchaser determines, in its reasonable discretion, has a reasonable likelihood of being successful; or (e) there shall be any statute, rule or regulation enacted, promulgated, entered, enforced or deemed applicable to the Offer or the Merger, or any other action shall have been taken by any Governmental Entity or court that results in, directly or indirectly, any of the consequences referred to in clauses (i) through (vi) of paragraph (b) above; or (f) there shall have occurred any general suspension of trading in, or limitation on prices for, securities on the New York Stock Exchange, American Stock Exchange or in the over-the-counter market (other than any temporary suspension pursuant to a circuit breaker procedure then in effect and lasting for not more than three trading hours), any declaration of a banking moratorium by federal or New York authorities or general suspension of payments in respect of lenders that regularly participate in the U.S. market in loans, any material limitation by any federal, state or local government or any court, administrative or regulatory agency or commission or other governmental authority or agency in the United States that materially affects the extension of credit generally by lenders that regularly participate in the United States market in loans, any commencement of a war involving the United States or any commencement of armed hostilities or other national or international circumstance involving the United States that has a material adverse effect on bank syndication or financial markets in the United States or, in the case of any of the foregoing occurrences existing on or at the time of the commencement of the Offer, a material acceleration or worsening thereof; which in the reasonable judgment of the Purchaser, in any such case, and regardless of the circumstances giving rise to such condition, makes it inadvisable to proceed with the Offer, the Merger and/or with such acceptance for payment or payments. The foregoing conditions are for the sole benefit of the Purchaser and its affiliates and may be asserted by the Purchaser regardless of any circumstances giving rise to any condition and may be waived by the Purchaser, in whole or in part, at any time and from time to time in the reasonable discretion of the Purchaser. The failure by the Purchaser (or any affiliate of the Purchaser) at any time to exercise any of the foregoing rights will not be deemed a waiver of any right, and each right will be deemed an ongoing right which may be asserted at any time and from time to time. 39 40 CERTAIN LEGAL MATTERS; REGULATORY APPROVALS GENERAL. Except as described below, none of Thermo Electron, Thermedics, Corpak or the Purchaser is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries that might be adversely affected by the Purchaser's acquisition of Shares as contemplated herein. Except as described in this section, none of Thermo Electron, Thermedics, Corpak or the Purchaser is aware of any other material filing, approval or other action by any federal or state governmental or administrative authority that would be required for the acquisition of Shares by the Purchaser as contemplated herein. Should any such other approval or action be required, it is currently contemplated that such approval or other action would be sought. There is, however, no present intention to delay the purchase of Shares tendered pursuant to the Offer or the Merger pending the outcome of any such other approval or action. There can be no assurance that any such other approval or action, if needed, would be obtained without substantial conditions or that adverse consequences might not result to the Purchaser's, Corpak's, Thermedics', Thermo Electron's or the Company's business in the event that such other approvals were not obtained or such other actions were not taken. The Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions, including conditions relating to the legal matters discussed in this section. See "--Certain Conditions Of The Offer." ANTITRUST. The Purchaser believes that the Offer and the Merger are exempt from the reporting requirements contained in the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Nevertheless, there can be no assurance that a challenge to the Offer and the Merger on antitrust grounds will not be made, or, if such challenge is made, what the result will be. FOREIGN APPROVALS. The Company conducts business in a number of foreign countries and jurisdictions. In connection with the acquisition of the Shares pursuant to the Offer or the Merger, the laws of certain of those foreign countries and jurisdictions may require the filing of information with, or the obtaining of the approval or consent of, governmental authorities in such countries and jurisdictions. The governments in such countries and jurisdictions might attempt to impose additional conditions on the Company's operations conducted in such countries and jurisdictions as a result of the acquisition of the Shares pursuant to the Offer or the Merger. If such approvals or consents are found to be required, the Purchaser intends to make the appropriate filings and applications. In the event such a filing or application is made for the requisite foreign approvals or consents, there can be no assurance that such approvals or consents will be granted and, if such approvals or consents are received, there can be no assurance as to the date of such approvals or consents. In addition, there can be no assurance that the Purchaser will be able to cause the Company or its subsidiaries to satisfy or comply with such laws or that compliance or noncompliance will not have adverse consequences for the Company or any subsidiary after purchase of the Shares pursuant to the Offer or the Merger. STATE ANTI-TAKEOVER STATUTES. Several Massachusetts statutes prohibit, restrict or impose certain procedural and disclosure requirements with respect to the acquisition of more than 10% of the outstanding shares of a Massachusetts corporation and with respect to take-over bids and business combinations involving a Massachusetts corporation. These are Chapters 110C, 110D and 110F of the General Laws of the Commonwealth of Massachusetts. Based on Thermo Electron's and its subsidiaries' equity holdings in the Company, the Purchaser believes that neither the Offer nor the Merger is prohibited by these statutes. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law, and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in that state and were incorporated there. 40 41 The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. None of Thermo Electron, Thermedics, Corpak or the Purchaser knows whether any of these laws will, by their terms, apply to the Offer or the Merger, and the Purchaser has not necessarily complied with any such laws. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer or be delayed in continuing or consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See "--Certain Conditions Of The Offer." DIVIDENDS AND DISTRIBUTIONS If, on or after January 31, 2000, the Company should declare or pay any dividend or other distribution (including, without limitation, the issuance of additional Shares pursuant to a stock dividend or stock split or the issuance of rights for the purchase of any securities) with respect to the Shares that is payable or distributable to stockholders of record on a date occurring prior to the transfer to the name of the Purchaser or its nominees or transferees on the Company's stock transfer records of the Shares purchased pursuant to the Offer, then, without prejudice to the Purchaser's rights described in "--Certain Conditions Of The Offer," (1) the purchase price per Share payable by the Purchaser pursuant to the Offer will be reduced in the amount of any such cash dividend or distribution, and (2) the whole of any non-cash dividend or distribution (including, without limitation, additional Shares or rights as aforesaid) will be required to be remitted promptly and transferred by each tendering stockholder to the Depositary for the account of the Purchaser accompanied by appropriate documentation of transfer. Pending such remittance or appropriate assurance thereof, the Purchaser will be entitled to all rights and privileges as owner of any such non-cash dividend, distribution or right, and may withhold the entire purchase price or deduct from the purchase price the amount of value of such non-cash dividend, distribution or right, as determined by the Purchaser in its sole discretion. If, on or after January 31, 2000, the Company should split the Shares or combine or otherwise change the Shares or its capitalization, then, without prejudice to the Purchaser's rights described under the heading "--Certain Conditions Of The Offer," appropriate adjustments to reflect such split, combination or change may be made by the Purchaser in the purchase price and other terms of the Offer, including, without limitation, the number or type of securities offered to be purchased. 41 42 CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a general summary of the material U.S. federal income tax consequences of the Offer and the Merger to the beneficial owners of Shares. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), applicable treasury regulations thereunder, judicial decisions and current administrative rulings as in effect on the date of this Offer to Purchase. The discussion does not address all aspects of U.S. federal income taxation that may be relevant to particular taxpayers in light of their personal circumstances or to taxpayers subject to special treatment under the Code (for example, life insurance companies, foreign corporations, foreign partnerships, foreign estates or trusts, or individuals who are not citizens or residents of the United States and beneficial owners whose Shares were acquired pursuant to the exercise of warrants, employee stock options or otherwise as compensation) and does not address any aspect of state, local, foreign or other taxation. The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for federal income tax purposes under the Code, and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for federal income tax purposes, a beneficial owner of Shares that tenders Shares pursuant to the Offer or surrenders Shares pursuant to the Merger will recognize gain or loss equal to the difference between the amount of cash received by the beneficial owner and the aggregate tax basis in the Shares sold pursuant to the Offer or canceled and converted to cash pursuant to the Merger. Gain or loss will be calculated separately for each block of Shares purchased pursuant to the Offer or canceled and converted to cash pursuant to the Merger. Gain or loss on the disposition of Shares generally will be capital gain or loss, assuming that the Shares are held as capital assets, and that a beneficial owner of Shares does not, directly or under the attribution rules of Sections 304 and 318 of the Code, own Shares or stock of the Surviving Corporation following the Offer and the Merger. Capital gains of individuals, estates and trusts generally are subject to a maximum federal income tax rate of (i) 20% if, at the time the tendered Shares are accepted for payment (in the case of the Offer) or the Effective Time of the Merger (in the case of the Merger), the beneficial owner held the Shares for more than one year or (ii) 39.6% if, at the time the tendered Shares are accepted for payment (in the case of the Offer) or the Effective Time of the Merger (in the case of the Merger), the beneficial owner held the Shares for not more than one year. Capital gains of corporations generally are taxed at the federal income tax rates applicable to corporate ordinary income. In addition, the ability of both corporate and non-corporate beneficial owners to use capital losses to offset ordinary income is limited. In general, cash received by Public Stockholders who exercise statutory appraisal rights ("Dissenting Stockholders") in respect of such appraisal rights will result in the recognition of gain or loss to the Dissenting Stockholders. Any such Dissenting Stockholder should consult with its tax advisor for a full understanding of the tax consequences of the receipt of cash in respect of appraisal rights pursuant to the Merger. A beneficial owner may be subject to backup federal income tax withholding at a rate of 31% with respect to the amount of cash received pursuant to the Offer or the Merger unless the owner provides its tax identification number ("TIN") and certifies that such number is correct or properly certifies that it is awaiting a TIN, or unless an exemption applies. A beneficial owner that does not furnish its TIN may be subject to a penalty imposed by the Internal Revenue Service. See "The Tender Offer--Procedures For Accepting The Offer And Tendering Shares--Backup Federal Income Tax Withholding." If backup withholding applies to a beneficial owner, the Depositary is required to withhold 31% from payments to such owner. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the Internal Revenue Service. If backup withholding results in an overpayment of tax, a refund can be obtained by the beneficial owner upon filing an income tax return. EACH BENEFICIAL OWNER OF SHARES IS URGED TO CONSULT SUCH BENEFICIAL OWNER'S TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH BENEFICIAL OWNER OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS. 42 43 PRICE RANGE OF THE SHARES; DIVIDENDS PRICE RANGE OF SHARES. The Shares are listed on the American Stock Exchange under the symbol "TDX". The following table sets forth the high and low sales prices per Share on the American Stock Exchange, as reported in publicly available sources for each of the periods indicated.
HIGH LOW Fiscal Year Ended January 2, 1999: First Quarter............................................. $11 11/16 $8 5/8 Second Quarter............................................ $11 7/16 $7 7/8 Third Quarter............................................. $9 1/2 $6 1/16 Fourth Quarter............................................ $8 3/16 $6 Fiscal Year Ended January 1, 2000: First Quarter............................................. $9 1/4 $7 3/4 Second Quarter............................................ $10 7/8 $7 7/8 Third Quarter............................................. $10 7/16 $9 Fourth Quarter............................................ $9 5/8 $6 3/4 Fiscal Year Ending December 30, 2000: First Quarter (through March 8, 2000)..................... $8 1/8 $ 7
As of January 28, 2000, there were 221 holders of record of the Shares and in excess of 2,300 beneficial owners of the Shares. On January 28, 2000, the last full trading day prior to the public announcement of the Purchaser's intention to commence the Offer, the closing sale price per Share, as reported on the American Stock Exchange, was $7.938. On March 8, 2000, the latest practicable full trading day prior to the commencement of the Offer, the closing sale price per Share, as reported on the American Stock Exchange, was $7.75. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. DIVIDENDS. The Company has never declared or paid any cash dividends in respect of the Shares. 43 44 CERTAIN INFORMATION CONCERNING THE COMPANY Stockholders are urged to review the publicly available information concerning the Company before acting on the Offer. GENERAL. The Company operates in two segments: Detection Instruments and Laboratory Products. The Company's Detection Instruments segment develops, manufactures and markets high-speed detection and measurement systems used for quality assurance and security applications. The Company's Laboratory Products segment develops, manufactures and markets products used to determine the quality of a wide variety of items, including food, water and pharmaceuticals and to measure the moisture content of raw, in-process and finished products. In addition, the Laboratory Products segment manufactures specific ion-measurement systems that are used to monitor water quality in the power, semiconductor, petrochemical, paper, pharmaceutical and drinking water industries. See "Special Factors--Background To The Offer And The Merger--The Company." The principal executive offices of the Company are located at 200 Mill Road, Chelmsford, Massachusetts 01824, and its telephone number is (781) 622-1000. The Company is subject to the disclosure requirements of the Exchange Act and in accordance therewith is required to file reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. In addition, the Company is required to file within 10 business days of the commencement of this Offer, and to distribute to the Company's Stockholders, a statement on Schedule 14D-9 regarding its recommendation to the Company's stockholders with respect to the Offer. Such reports, proxy statements, Schedule 14D-9 and other information are available for inspection at the Commission's public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549 and should also be available for inspection at the regional offices of the Commission located at 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies may be obtained at prescribed rates from the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission at http://www.sec.gov. In addition, certain material filed by the Company may also be available for inspection at the offices of the American Stock Exchange, 86 Trinity Place, New York, NY 10006-1881. None of Thermo Electron, Thermedics, Corpak or the Purchaser intends to grant unaffiliated stockholders special access to the Company's records in connection with the Offer. None of Thermo Electron, Thermedics, Corpak or the Purchaser intends to obtain counsel to or appraisal services for unaffiliated stockholders of the Company. FINANCIAL INFORMATION. Set forth below is certain selected consolidated financial information with respect to the Company and its subsidiaries excerpted or derived from the audited consolidated financial statements contained in the Company's Annual Report on Form 10-K for its fiscal year ended January 2, 1999 and the unaudited financial statements contained in the Company's Quarterly Reports on Form 10-Q for the quarters ended October 2, 1999 and October 3, 1998 (collectively, the "Company Reports"). More comprehensive financial information is included in the Company Reports and in other documents filed by the Company with the Commission (which may be inspected or obtained in the manner set forth above), and the following financial information is qualified in its entirety by reference to the Company Reports and other documents and all of the financial information (including any related notes) contained therein or incorporated therein by reference. 44 45 The selected financial information presented below as of and for the fiscal years ended January 2, 1999, January 3, 1998, December 28, 1996, December 30, 1995 and December 31, 1994 has been derived from the Company's Consolidated Financial Statements, which have been audited by Arthur Andersen LLP. The selected financial information as of and for the nine months ended October 2, 1999 and October 3, 1998 has not been audited. The results of operations for the nine months ended October 2, 1999 are not necessarily indicative of results for the entire year. SELECTED CONSOLIDATED FINANCIAL INFORMATION
NINE MONTHS ENDED ------------------- OCT. 2, OCT. 3, 1999 1998 1998 1997(A) 1996(B) 1995(C) 1994 -------- -------- -------- -------- -------- ------- ------- (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) STATEMENT OF INCOME DATA: Revenues.............................. $ 56,157 $ 71,234 $ 91,575 $104,374 $ 94,604 $32,943 $50,343 Net Income............................ 3,328 6,952 8,671 12,506 5,299 2,173 6,380 Basic and Diluted Earnings per Share............................... .17 .36 .45 .67 .33 .21 .63 Weighted Average Shares: Basic............................... 19,317 19,317 19,317 18,721 16,236 10,000 10,000 Diluted............................. 19,356 19,323 19,321 18,732 16,253 10,003 10,003 BALANCE SHEET DATA (AT END OF PERIOD): Working Capital....................... $ 62,167 $ 55,385 $ 57,621 $ 46,345 $ 32,315 $19,369 $ 6,116 Total Assets.......................... 133,021 133,610 132,506 148,265 116,058 84,595 17,793 Long-term Obligations................. 103 -- 127 -- 21,200 -- -- Shareholders' Investment.............. 120,507 116,008 117,893 107,346 75,454 69,215 9,208 OTHER DATA: Book Value per Share.................. $ 6.24 $ 6.01 $ 6.10 $ 5.56 Cash Dividends........................ -- -- -- -- -- -- -- Ratio of Earnings to Fixed Charges(d).......................... 12.10x 13.85x 13.94x 11.88x
- ------------------------------ (a) Reflects the March 1997 initial public offering of the Company's common stock for net proceeds of $28.1 million. (b) Reflects the January 1996 acquisition of Moisture Systems Corporation and Rutter & Co. B.V. and the March and November 1996 private placements of the Company's common stock for aggregate net proceeds of $7.0 million. (c) Reflects the December 1995 acquisition of Orion Research, Inc. by Thermedics. (d) For purposes of computing the ratios of earnings to fixed charges, "earnings" represent income before taxes, plus fixed charges. "Fixed charges" consist of interest on indebtedness and one-third of rental expense, which is deemed to be the interest component of such rental expense. 45 46 RECENTLY RELEASED FINANCIAL DATA. The selected financial information of the Company presented below for the three and twelve month periods ended January 1, 2000 and January 2, 1999 were publicly released by the Company on February 17, 2000. With the exception of the financial information for the twelve months ended January 2, 1999, this financial information is not audited and full financial statements reflecting such information have not yet been filed with the Commission. CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED TWELVE MONTHS ENDED ---------------------------- ---------------------------- JAN. 1, 2000 JAN. 2, 1999 JAN. 1, 2000 JAN. 2, 1999 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) Revenues.................................... $17,427 $20,341 $73,584 $91,575 ------- ------- ------- ------- Costs and Operating Expenses: Cost of revenues(a)....................... 7,788 10,004 35,225 42,251 Selling, general, and administrative expenses............................... 6,379 5,772 25,289 26,744 Research and development expenses......... 1,670 2,219 8,025 9,645 ------- ------- ------- ------- 15,837 17,995 68,539 78,640 ------- ------- ------- ------- Operating Income............................ 1,590 2,346 5,045 12,935 Interest Income............................. 460 330 1,550 1,536 Interest Expense............................ -- -- -- (303) Other Income (Expense), Net................. 7 -- (15) (1) ------- ------- ------- ------- Income Before Provision for Income Taxes.... 2,057 2,676 6,580 14,167 Provision for Income Taxes(b)............... 309 957 1,504 5,496 ------- ------- ------- ------- Net Income.................................. $ 1,748 $ 1,719 $ 5,076 $ 8,671 ======= ======= ======= ======= Basic and Diluted Earnings per Share........ $ .09 $ .09 $ .26 $ .45 ======= ======= ======= ======= Weighted Average Shares: Basic..................................... 19,317 19,317 19,317 19,317 ======= ======= ======= ======= Diluted................................... 19,350 19,317 19,355 19,321 ======= ======= ======= =======
- ------------------------------ (a) Includes inventory provisions of $1.9 million in the twelve months ended January 1, 2000. (b) Includes research and development tax credits of $0.2 million and $1.1 million in the three- and twelve-month periods ended January 1, 2000, respectively. 46 47 CERTAIN INFORMATION CONCERNING THE PURCHASER, CORPAK, THERMEDICS AND THERMO ELECTRON THE PURCHASER The Purchaser is a newly organized, wholly-owned subsidiary of Corpak formed for the purpose of making the Offer. The Purchaser is organized under the laws of the State of Delaware. The Purchaser's principal executive offices are located at 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02454-9046, and its telephone number is (781) 622-1000. The name, business address, principal occupation, employment history and citizenship of each of the executive officers and directors of the Purchaser are set forth on Schedule I hereto. During the past five years, the Purchaser has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the Purchaser from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. CORPAK Corpak, a Massachusetts corporation and a wholly-owned subsidiary of Thermedics, designs, manufactures and markets enteral feeding systems that introduce special nutritional solutions into the stomach or the small intestine through tubes entering the nose or stomach. Enteral therapy is used for patients who are unable to eat or digest food normally or who require high levels of nutritional support. Corpak's products include bags for nutritional fluids, delivery pumps, associated pump sets that hook up to the pumps and feeding tubes. In addition, Corpak markets catheters for peritoneal dialysis. Corpak's principal executive offices are located at 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02454-9046, and its telephone number is (781) 622-1000. The name, business address, principal occupation, employment history and citizenship of each of the executive officers and directors of Corpak are set forth on Schedule I hereto. During the past five years, Corpak has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining Corpak from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. THERMEDICS Thermedics, a Massachusetts corporation, develops, manufactures and markets diverse product lines, including implantable heart assist devices and other biomedical products, security instruments and equipment, that assure the quality of a wide variety of consumer products and bulk materials. Thermedics' businesses operate in the following segments: Quality Assurance and Security Products, Precision Weighing and Inspection Equipment, Heart Assist and Blood Testing Devices, Power Electronics and Test Equipment and Respiratory Care Products. Quality assurance and security products. Through the Company, Thermedics' Quality Assurance and Security Products segment develops, manufactures and markets high-speed detection and measurement instruments used in a variety of on-line industrial process and security applications, and for laboratory analysis. Precision weighing and inspection equipment. Thermedics' Precision Weighing and Inspection Equipment segment includes Thermo Sentron Inc., which develops, manufactures and markets high-speed precision-weighing and inspection equipment for industrial production and packaging lines. 47 48 Heart assist and blood testing devices. Thermedics' Heart Assist and Blood Testing Devices segment consists of the Thermo Cardiosystems Inc. subsidiary, which has developed two implantable left ventricular-assist systems (LVAS): a pneumatic, or air-driven, system and an electric version. Thermo Cardiosystems' International Technidyne Corporation subsidiary is a leading manufacturer of near-patient, whole-blood coagulation testing equipment and related disposables and also manufactures premium-quality, single-use skin-incision devices. Power electronics and test equipment. Thermedics' Power Electronics and Test Equipment segment, through the Thermo Voltek Corp. subsidiary, designs, manufactures and markets a range of products related to power amplification, conversion and quality. Respiratory Care Products. Erich Jaeger, GmbH, acquired in July 1999, develops and manufactures equipment for lung function, cardio-respiratory and sleep disorder diagnosis and monitoring. Thermedics' common stock is listed on the American Stock Exchange under the symbol "TMD". The principal executive offices of Thermedics are located at 470 Wildwood Street, P.O. Box 2999, Woburn, Massachusetts 01888-1799, and its telephone number is (781) 622-1000. Thermedics is subject to the disclosure requirements of the Exchange Act and in accordance therewith is required to file reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Such reports, proxy statements and other information are available for inspection and copying at prescribed rates at the offices of the Commission and the American Stock Exchange as set forth under "Certain Information Concerning The Company." The name, business address, principal occupation, five-year employment history and citizenship of each of the directors and executive officers of Thermedics are set forth in Schedule I hereto. During the past five years, Thermedics has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining Thermedics from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. THERMO ELECTRON Thermo Electron, a Delaware corporation, and its subsidiaries develop and manufacture a broad range of products that are sold worldwide. Thermo Electron is a world leader in monitoring, analytical and biomedical instrumentation; biomedical products including heart-assist devices, respiratory-care equipment and mammography systems; and paper recycling and papermaking equipment. Thermo Electron also develops alternative-energy systems and clean fuels, provides a range of services including industrial outsourcing and environmental-liability management and conducts research and development in advanced imaging, laser and electronic information-management technologies. Thermo Electron performs its business through wholly-owned subsidiaries and divisions, as well as majority owned subsidiaries that are partially owned by public or private investors. On January 31, 2000, Thermo Electron announced that its Board of Directors had authorized its management to proceed with a major reorganization of the operations of Thermo Electron and its subsidiaries. As part of this reorganization, Thermo Electron plans to acquire the public minority interest in most of its subsidiaries that have minority investors, spin off its separation technologies and fiber-based products business and its medical products business and divest a variety of non-core businesses. The primary goal of this reorganization is for Thermo Electron and each of its spun-off subsidiaries to focus on its respective core business. The purpose of the Offer and the Merger is to acquire the minority public interest in the Company as part of Thermo Electron's overall reorganization and to provide the Public Stockholders with $8.00 per Share in cash. Following the Offer and the Merger, Thermo Electron plans to retain the Company as part of Thermo Electron's core instrument business. 48 49 Thermo Electron's common stock is listed on the New York Stock Exchange under the symbol "TMO". The principal executive offices of Thermo Electron are located at 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02454-9046, and its telephone number is (781) 622-1000. Thermo Electron is subject to the disclosure requirements of the Exchange Act and in accordance therewith is required to file reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Such reports, proxy statements and other information are available for inspection and copying at prescribed rates at the offices of the Commission as set forth under "Certain Information Concerning The Company." In addition, certain material filed by Thermo Electron may also be available for inspection at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The name, business address, principal occupation, five-year employment history and citizenship of each of the directors and executive officers of Thermo Electron are set forth in Schedule I hereto. During the past five years, Thermo Electron has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining Thermo Electron from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. CERTAIN TRANSACTIONS Except as otherwise set forth in this Offer to Purchase, none of the Purchaser, Corpak, Thermedics or Thermo Electron or, to the best knowledge of the Purchaser, Corpak, Thermedics and Thermo Electron, any of the persons listed on Schedule I hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any Shares or other securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of any such Shares or other securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies. PRIOR CONTACTS. Except as set forth in this Offer to Purchase (particularly the section entitled "Special Factors--Background To The Offer And The Merger"), since January 1, 1998, there have been no contacts, negotiations or transactions between the Purchaser, Corpak, Thermedics, Thermo Electron, any subsidiary of the Purchaser, Corpak, Thermedics or Thermo Electron or, to the best knowledge of the Purchaser, Corpak, Thermedics and Thermo Electron, any of the persons listed on Schedule I hereto, on the one hand, and the Company or any of its officers, directors or affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors, or a sale or other transfer of a material amount of assets, other than votes cast by Thermo Electron or Thermedics for the election of directors of the Company in the normal course. PRIOR BUSINESS RELATIONSHIPS. Except as set forth in this Offer to Purchase, none of the Purchaser, Corpak, Thermedics or Thermo Electron or, to the best knowledge of the Purchaser, Corpak, Thermedics or Thermo Electron, any of the persons listed on Schedule I hereto has, since January 1, 1998, had any business relationships or transactions with the Company or any of its executive officers, directors or affiliates that would require disclosure herein under the rules and regulations of the Commission applicable to the Offer or the Merger. TRANSACTIONS BETWEEN THE COMPANY AND THERMEDICS OR THERMO ELECTRON. On May 6, 1998, the Company entered into an Agreement and Plan of Reorganization with Thermedics, Orion Research Inc. ("Orion Research"), a wholly-owned subsidiary of Thermedics, and Orion Acquisition Inc., a wholly-owned subsidiary of the Company. The agreement provided for the acquisition by the Company of Orion Research in exchange for the issuance of 5,961,225 shares of the Company's common stock to Thermedics. Based on the average of the closing prices of the Company's common stock as reported on the American Stock Exchange for the five trading days ending on April 13, 1998 (the date preceding the Company's announcement of its 49 50 intention to acquire Orion Research), the shares to be issued to Thermedics had a value of $65,800,000 prior to such announcement. FINANCIAL INFORMATION. Because the Offer Price will be paid in cash, the Purchaser, Corpak, Thermedics and Thermo Electron do not believe that financial information with respect to the Purchaser, Corpak, Thermedics, Thermo Electron and their subsidiaries would be material to a stockholder's evaluation of the Offer and the Merger. Financial information concerning Thermedics, Thermo Electron and their subsidiaries is filed by Thermedics and Thermo Electron with the Commission (which may be inspected and copies thereof obtained at the offices of the Commission as set forth in "Certain Information Concerning The Company"). 50 51 SOURCE AND AMOUNT OF FUNDS The total amount of funds required by the Purchaser to purchase all of the outstanding Shares pursuant to the Offer and the Merger, and to pay related fees and expenses, is estimated to be approximately $18.5 million. The Purchaser will obtain the funds to purchase the Shares in the Offer and the Merger from Thermedics as a loan or capital contribution. Thermedics will use a combination of its own working capital and borrowings from Thermo Electron to fund this loan or capital contribution. Thermo Electron has committed to provide any required financing to Thermedics. Any loan by Thermo Electron to Thermedics will be evidenced by an unsecured note due September 1, 2000 that will bear interest at a floating rate equal to the 30-day Dealer Commercial Paper Rate (the "DCP Rate") plus 150 basis points, adjusted at the beginning of each fiscal month of Thermedics. The interest rate of the note will be reduced to the DCP Rate plus 50 basis points to the extent of any funds invested by Thermedics' majority-owned subsidiaries in Thermo Electron's cash management arrangement. Thermedics does not have any arrangement with respect to the repayment of any such loan. 51 52 THE MERGER; APPRAISAL RIGHTS THE MERGER Following the consummation of the Offer, subject to the terms and conditions and in accordance with the Chapter 156B of the Massachusetts General Laws (the "Massachusetts Business Corporation Law"), Thermedics plans to cause the Company to merge with and into the Purchaser. Upon the Effective Date of the Merger: - each Share issued and outstanding immediately prior to the Effective Date of the Merger (other than Shares held by Public Stockholders, if any, who are entitled to and who properly exercise their dissenters' rights (See "--Appraisal Rights" below) under the Massachusetts Business Corporation Law) will be cancelled and extinguished and be converted into and become a right to receive the Offer Price per Share; and - each outstanding share of the Purchaser's capital stock issued and outstanding immediately prior to the Effective Date of the Merger will be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. In the Merger, the Purchaser would be the Surviving Corporation and would change its name to "Thermedics Detection Inc." As a result of the Merger, Corpak and Thermo Electron will own all of the outstanding equity interests in the Surviving Corporation. Under the Massachusetts Business Corporation Law, if the Purchaser holds at least 90% of the outstanding Shares, the Purchaser would have the power to effect the Merger without a vote of the Company's Board of Directors or other stockholders. The Purchaser intends to take all necessary and appropriate action to cause the Merger to become effective as soon as reasonably practicable after the consummation of the Offer and without a meeting of the Company's stockholders. APPRAISAL RIGHTS Stockholders who tender their Shares in the Offer are not entitled to appraisal rights under the Massachusetts Business Corporation Law. If the Purchaser effects the Merger, then Company stockholders who do not tender their Shares to the Purchaser pursuant to the Offer would have the right to demand an appraisal of the fair value of their Shares in accordance with the provisions of Sections 89 through 98 of the Massachusetts Business Corporation Law (the "Massachusetts Appraisal Statute"), which sets forth the rights and obligations of Company stockholders demanding an appraisal and the procedures to be followed. The following is a summary of the procedures to be followed under the Massachusetts Appraisal Statute, the full text of which is attached to this Offer to Purchase as Schedule III. The summary does not purport to be a complete statement of, and is qualified in its entirety by reference to, the Massachusetts Appraisal Statute and to any amendments to such statute after the date of this Offer to Purchase. Failure to follow the Massachusetts Appraisal Statute procedures may result in termination or waiver of appraisal rights under the Massachusetts Appraisal Statute. If the Merger is consummated, any Company stockholder who desires to exercise his appraisal rights should review carefully the Massachusetts Appraisal Statute and is urged to consult his legal advisor before electing or attempting to exercise such rights. Only a holder of record of Shares on the Effective Date of the Merger would be entitled to seek appraisal. The demand for appraisal must be executed by or for the holder of record, fully and correctly, as such holder's name appears on the holder's Share Certificates. If the Shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, the demand should be made in that capacity, and if the Shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand must be made by or for all owners of record. An authorized agent, including one or more joint owners, could execute the demand for appraisal for a holder of record; however, such agent must identify the record owner or owners and expressly disclose in such demand that the agent is acting as agent for the record owner or owners of such Shares. 52 53 A record holder such as a broker who holds Shares as a nominee for beneficial owners, some of whom desire to demand appraisal, would be required to exercise appraisal rights on behalf of such beneficial owners with respect to the Shares held for such beneficial owners. In such case, the written demand for appraisal should set forth the number of Shares covered by it. Unless a demand for appraisal specifies a number of Shares, such demand will be presumed to cover all Shares held in the name of such record owner. The Surviving Corporation would mail written notice to the stockholders of record of the Company on the Effective Date of the Merger of the approval and consummation of the Merger and the availability of appraisal rights under the Massachusetts Appraisal Statute within ten days after the Effective Date of the Merger (the "Merger Notice"). Any stockholder entitled to appraisal rights would have the right, on or before the date that is 20 days after the date of mailing of the Merger Notice, to demand in writing from the Surviving Corporation an appraisal of his Shares. Such demand will be sufficient if it reasonably informs the Surviving Corporation of the identity of the stockholder and that the stockholder intends to demand an appraisal of the fair value of his or her Shares. Failure to make such a demand on or before the date that is 20 days after the date of mailing of the Merger Notice would foreclose a stockholders' rights to appraisal. A stockholder could withdraw his demand for appraisal only with the approval of the Surviving Corporation. Upon withdrawal of a demand for appraisal, a stockholder would be entitled to receive the Offer Price. If, following the Merger, a stockholder perfects a demand for payment of his or her Shares as provided above (each, a "Dissenting Stockholder"), and if the Surviving Corporation and such Dissenting Stockholder are able to reach agreement on the fair value of the Shares, the Surviving Corporation will pay to the Dissenting Stockholder the fair value of such Shares, as the case may be, within 30 days after the expiration of the 20-day period during which the demand for appraisal may be made (the "30-Day Period"). If within the 30-Day Period the parties fail to agree as to the fair value of such Shares, either the Surviving Corporation or the Dissenting Stockholder may have the fair value of the Shares of all Dissenting Stockholders determined by judicial proceedings by filing a bill in equity in the Massachusetts Superior Court for Middlesex County within four months after the expiration of the 30-Day Period. While Massachusetts courts have broad discretion in determining fair value of stock of dissenting stockholders, Massachusetts courts have generally used a weighted average of the market, earnings and asset values for the stock. The Massachusetts Supreme Judicial Court has recently held that such method is an appropriate, but not mandated, approach to determining the fair value of stock of dissenting stockholders, and that such valuation is within the discretion of the trial judge. A fair rate of interest, if any, shall be paid by the Surviving Corporation on any award determined by the Court from the date of the vote of the Board of Directors of the Purchaser approving the Merger. If (i) no suit is filed to determine the value of the Shares within four months of the expiration of the 30-Day Period, (ii) any such suit is dismissed as to that Dissenting Stockholder or (iii) the Dissenting Stockholder withdraws his, her or its objection in writing with the written approval of the Surviving Corporation, the Dissenting Stockholder will have only the rights of a nondissenting stockholder to receive the Offer Price. Under Massachusetts statutory law, the enforcement by a Dissenting Stockholder of such Dissenting Stockholder's right to receive payment for his or her shares in the manner provided by the Massachusetts Appraisal Statute is stated to be the exclusive remedy of a stockholder objecting to the Merger, except upon the grounds that consummation of the Merger will be or is illegal or fraudulent as to such stockholder. The Massachusetts Supreme Judicial Court, however, has held that Dissenting Stockholders are not limited to the statutory remedy of judicial appraisal in cases where violations of fiduciary duty are found. Stockholders considering seeking appraisal should have in mind that the fair value of their Shares determined under the Massachusetts Appraisal Statute could be more, the same or less than the Offer Price and that investment banking opinions as to fairness from a financial point of view are not necessarily opinions as to fair value under the Massachusetts Appraisal Statute. From and after the Effective Date of the Merger, Dissenting Stockholders would not be entitled to vote their Shares for any purpose and would not be entitled to receive payment of dividends or other distributions in respect of such Shares payable to stockholders of record thereafter. 53 54 THE FOREGOING SUMMARY DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE THEIR DISSENTING APPRAISAL RIGHTS AND IS QUALIFIED IN ITS ENTIRETY BY EXPRESS REFERENCE TO THE MASSACHUSETTS APPRAISAL STATUTE, THE FULL TEXT OF WHICH IS ATTACHED HERETO AS SCHEDULE III. STOCKHOLDERS ARE URGED TO READ SCHEDULE III IN ITS ENTIRETY SINCE FAILURE TO COMPLY WITH THE PROCEDURES SET FORTH THEREIN MAY RESULT IN THE LOSS OF APPRAISAL RIGHTS. 54 55 FEES AND EXPENSES The Advisors are acting as financial advisors to Thermedics and Thermo Electron in connection with the Offer and the Merger. The Advisors are also acting as Dealer Managers in connection with the Offer. For a discussion of the fees to be paid to the Advisors in connection with Offer and the Merger, see "Special Factors--Summary Of The Advisors' Analysis and Opinion." The Purchaser has retained D.F. King & Co., Inc. to act as the Information Agent and American Stock Transfer & Trust Company to act as the Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telecopy, telegraph and personal interview and may request brokers, dealers, commercial banks, trust companies and other nominees to forward the Offer material to beneficial owners. Each of the Information Agent and the Depositary will receive reasonable and customary compensation for its services and will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection with the Offer, including certain liabilities under U.S. federal securities laws. The Purchaser will not pay any fees or commissions to any broker or dealer or any other person for soliciting tenders of Shares pursuant to the Offer (other than to the Dealer Managers and the Information Agent). Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding materials to their customers. The following is an estimate of fees and expenses to be incurred by the Purchaser in connection with the Offer: Financial Advisors.......................................... $1,000,000 Legal....................................................... 250,000 Printing.................................................... 100,000 Advertising................................................. 25,000 Filing...................................................... 5,295 Depositary.................................................. 7,500 Information Agent (including mailing)....................... 12,000 Miscellaneous............................................... 100,205 ---------- $1,500,000 ==========
The Company will not pay any of the fees and expenses to be incurred by the Purchaser in connection with the Offer. 55 56 MISCELLANEOUS The Offer is being made solely by this Offer to Purchase and the related Letter of Transmittal and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Thermo Electron, Thermedics, Corpak and the Purchaser have filed with the Commission a Schedule TO together with exhibits, pursuant to Rule 14d-3 and Rule 13e-3 promulgated by the Commission under the Exchange Act, furnishing certain additional information with respect to the Offer. Such statement and any amendments thereto, including exhibits, may be examined and copies may be obtained at the same places and in the same manner as set forth with respect to information about the Company in "Certain Information Concerning The Company" (except that such statement and amendments may not be available in the regional offices of the Commission). NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED. March 10, 2000 56 57 SCHEDULE I MEMBERS OF THE BOARDS OF DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER, CORPAK, THERMEDICS AND THERMO ELECTRON DIRECTOR AND EXECUTIVE OFFICER OF THE PURCHASER Mr. John T. Keiser is the sole director and president of the Purchaser. Biographical and other information with respect to Mr. Keiser is set forth below under "--Directors and Executive Officers of Thermedics." DIRECTORS AND EXECUTIVE OFFICERS OF CORPAK The name, business address, position with Corpak, present principal occupation or employment and five-year employment history of each of the directors and executive officers of Corpak, together with the names, principal businesses and addresses of any corporations or other organizations in which such principal occupations are conducted, are set forth below. Unless otherwise indicated, each occupation set forth refers to Corpak, each individual is a United States citizen and each individual's business address is 81 Wyman Street, Waltham, Massachusetts 02454. Unless otherwise indicated, to the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron, no director or executive officer of Corpak beneficially owns any Shares (or rights to acquire Shares). Unless otherwise indicated, to the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron, no director or executive officer of Corpak has been convicted in a criminal proceeding during the last five years (excluding traffic violations or similar misdemeanors) and no director or executive officer of Corpak was a party to any judicial or administrative proceeding during the last five years (except for any matters that were dismissed without sanction or settlement) that resulted in a judgement, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. JOHN T. KEISER Mr. Keiser, 64, has been a director and chairman of the board of Corpak since March 1998. Biographical and other information with respect to Mr. Keiser is set forth below under "--Directors and Executive Officers of Thermedics." THOMAS I. KUHN Mr. Kuhn, 45, has been a director of Corpak since May 1996 and its president and chief operating officer since August 1992. Mr. Kuhn's business address is 100 Chaddick Drive, Wheeling, IL 60090. STOCK OWNERSHIP. The following table sets forth the beneficial ownership of common stock of the Company, as well as the common stock of Thermedics and Thermo Electron, as of January 31, 2000, with respect to each director and executive officer of Corpak. No director or executive officer of Corpak beneficially owns any shares of capital stock of the Purchaser or Corpak. While certain directors and executive officers of Corpak are also directors and executive officers of Thermo Electron or its subsidiaries, all such persons disclaim beneficial ownership of the shares of common stock beneficially owned by Thermo Electron.
THERMEDICS THERMO ELECTRON NAME(1) DETECTION INC.(2) THERMEDICS INC.(3) CORPORATION(4) John T. Keiser.............................. 17,000 194,693 331,636 Thomas I. Kuhn.............................. 0 38,941 5,626 All directors and current executive officers as a group (2 persons).................... 17,000 233,634 337,262
- ------------------------------ (1) Except as reflected in the footnotes to this table, shares beneficially owned consist of shares owned by the indicated person or by that person for the benefit of minor children, and all share ownership includes sole voting and investment power. (2) Shares of the common stock of the Company beneficially owned by Mr. Keiser and all directors and current executive officers as a group include 17,000 and 17,000 shares, respectively, that such person or group has the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. No director or current executive officer beneficially owned more than 1% of the Company's common I-1 58 stock outstanding as of January 31, 2000; all directors and current executive officers as a group beneficially owned less than 1% of such common stock outstanding as of such date. (3) Shares of the common stock of Thermedics beneficially owned by Mr. Keiser, Mr. Kuhn and all directors and current executive officers as a group include 187,900, 34,100 and 222,000 shares, respectively, that such person or group had the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. No director or current executive officer beneficially owned more than 1% of the Thermedics common stock outstanding as of January 31, 2000; all directors and current executive officers as a group beneficially owned less than 1% of such common stock outstanding as of such date. (4) Shares of the common stock of Thermo Electron beneficially owned by Mr. Keiser, Mr. Kuhn and all directors and current executive officers as a group include 263,230, 4,950 and 268,180 shares, respectively, that such person or group has the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. No director or current executive officer beneficially owned more than 1% of the Thermo Electron common stock outstanding as of January 31, 2000 all directors and current executive officers as a group beneficially owned less than 1% of such common stock outstanding as of such date. DIRECTORS AND EXECUTIVE OFFICERS OF THERMEDICS The name, business address, position with Thermedics, present principal occupation or employment and five-year employment history of each of the directors and executive officers of Thermedics, together with the names, principal businesses and addresses of any corporations or other organizations in which such principal occupations are conducted, are set forth below. Unless otherwise indicated, each occupation set forth refers to Thermedics, each individual is a United States citizen and each individual's business address is 81 Wyman Street, Waltham, Massachusetts 02454. Unless otherwise indicated, to the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron, no director or executive officer of Thermedics beneficially owns any Shares (or rights to acquire Shares). Unless otherwise indicated, to the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron, no director or executive officer of Thermedics has been convicted in a criminal proceeding during the last five years (excluding traffic violations or similar misdemeanors) and no director or executive officer of Thermedics was a party to any judicial or administrative proceeding during the last five years (except for any matters that were dismissed without sanction or settlement) that resulted in a judgement, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. Dr. Richard F. Syron resigned from the Board of Directors of Thermedics effective March 7, 2000. Mr. John N. Hatsopoulos resigned from the Board of Directors of Thermedics effective February 21, 2000. T. ANTHONY BROOKS Mr. Brooks, 60, has been a director of Thermedics since September 1998. Mr. Brooks was a managing director and member of the operating committee of Lehman Brothers Inc., a financial services firm located at 3 World Financial Center, New York, NY 10285 from 1991 until his retirement in 1997. While at Lehman Brothers Inc., Mr. Brooks was the head of the European equity division from 1995 to 1996. PETER O. CRISP Mr. Crisp, 67, has been a director of Thermedics since 1983. Mr. Crisp was a general partner of Venrock Associates, a venture capital investment firm located at 30 Rockefeller Plaza, New York, NY 10112, for more than five years until his retirement in September 1997. He has been the vice chairman of Rockefeller Financial Services, Inc. since December 1997. Mr. Crisp is also a director of American Superconductor Corporation, Evans & Sutherland Computer Corporation, Thermo Electron, ThermoTrex Corporation and United States Trust Corporation. PAUL F. FERRARI Mr. Ferrari, 69, has been a director of Thermedics since 1991. Mr. Ferrari was a vice president of Thermo Electron from 1988 until his retirement at the end of 1990. Mr. Ferrari is also a director of General Scanning Inc. and ThermoTrex Corporation. I-2 59 GEORGE N. HATSOPOULOS Dr. Hatsopoulos, 73, has been a director of Thermedics since 1983. He served as president, chief executive officer and chairman of the board of Thermo Electron from 1956 until January 1997, June 1999 and January 2000, respectively. Dr. Hatsopoulos is also a director of Photoelectron Corporation, Thermo Ecotek Corporation, Thermo Electron, Thermo Fibertek Inc., Thermo Instrument Systems Inc. and ThermoTrex Corporation. JOHN T. KEISER Mr. Keiser, 64, has been a director of Thermedics since April 1997. He has been the president and chief executive officer of Thermedics since March 1998 and December 1998, respectively. From 1994 until March 1998, Mr. Keiser served as a senior vice president of Thermedics. Mr. Keiser has been the chief operating officer, biomedical, of Thermo Electron since September 1998, and a vice president from April 1997 until his promotion. He has also been the president of Thermo Electron's wholly owned biomedical group, a manufacturer of medical equipment and instruments, since 1994. Mr. Keiser is a director of Metrika Systems Corporation, the Company, Thermo Cardiosystems Inc., ThermoLase Corporation, Thermo Sentron Inc., ThermoTrex Corporation and Trex Medical Corporation. JOHN W. WOOD JR. Mr. Wood, 56, has been a director of Thermedics since 1984 and chairman of the board since March 1998. Mr. Wood was president and chief executive officer of Thermedics from 1984 to March 1998. Mr. Wood has been a senior vice president of Thermo Electron since December 1995, and, prior to that promotion, was a vice president of Thermo Electron from September 1994 to December 1995. NICHOLAS T. ZERVAS Dr. Zervas, 70, has been a director of Thermedics since 1987. Dr. Zervas has been Chief of Neurosurgical Service, Massachusetts General Hospital, located at 55 Fruit Street, Boston, MA 02114, since 1977. Dr. Zervas is also a director of Thermo Cardiosystems Inc., ThermoLase Corporation and ThermoTrex Corporation. PAUL F. KELLEHER Mr. Kelleher, 57, has been the chief accounting officer of Thermedics since March 1986. Mr. Kelleher also has served as the senior vice president, finance and administration, of Thermo Electron since June 1997, and served as its vice president, finance from 1987 until 1997. Mr. Kelleher served as Thermo Electron's controller from 1982 until January 1996. Mr. Kelleher is a director of ThermoLase Corporation. THEO MELAS-KYRIAZI Mr. Melas-Kyriazi, 40, has been the chief financial officer of Thermedics since January 1999. Mr. Melas-Kyriazi also has served as a vice president of Thermo Electron since March 1998 and its chief financial officer since January 1999. Prior to his appointment as a vice president of Thermo Electron, Mr. Melas-Kyriazi served as president and chief executive officer of ThermoSpectra Corporation from its inception in August 1994 until March 1998. He is a director of ThermoRetec Corporation. Mr. Melas-Kyriazi is a citizen of Greece. VICTOR L. POIRIER Mr. Poirier, 58, has been a senior vice president of Thermedics since 1985. He has also been president and chief technical officer of Thermo Cardiosystems Inc., a majority-owned subsidiary of Thermedics located at 470 Wildwood Street, Woburn, Massachusetts 01888-2697 since 1990 and 1999, respectively, and was its chief executive officer from 1991 to November 1998. I-3 60 STOCK OWNERSHIP. The following table sets forth the beneficial ownership of common stock of the Company, as well as the common stock of Thermedics and Thermo Electron, as of January 31, 2000, with respect to each director and executive officer of Thermedics. No director or executive officer of Thermedics beneficially owns any shares of capital stock of the Purchaser or Corpak. While certain directors and executive officers of Thermedics are also directors and executive officers of Thermo Electron or its subsidiaries, all such persons disclaim beneficial ownership of the shares of common stock beneficially owned by Thermo Electron.
THERMEDICS THERMO ELECTRON NAME(1) DETECTION INC.(2) THERMEDICS INC.(3) CORPORATION(4) T. Anthony Brooks................................ 0 5,367 0 Peter O. Crisp................................... 0 37,076 121,767 Paul F. Ferrari.................................. 599 11,050 16,482 George N. Hatsopoulos............................ 21,197 63,681 3,909,357 John T. Keiser................................... 17,000 194,693 331,636 Paul F. Kelleher................................. 5,100 20,360 213,530 Theo Melas-Kyriazi............................... 0 11,861 458,532 Victor L. Poirier................................ 0 69,455 53,880 John W. Wood Jr.................................. 37,251 233,200 293,550 Nicholas T. Zervas............................... 0 22,064 0 All directors and current executive officers as a group (10 persons)............................. 81,147 668,807 5,398,734
- ------------------------------ (1) Except as reflected in the footnotes to this table, shares beneficially owned consist of shares owned by the indicated person or by that person for the benefit of minor children, and all share ownership includes sole voting and investment power. (2) Shares of the common stock of the Company beneficially owned by Dr. Hatsopoulos, Mr. Keiser, Mr. Kelleher, Mr. Wood and all directors and current executive officers as a group include 20,000, 17,000, 5,000, 20,000 and 62,000 shares, respectively, that such person or group has the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Shares beneficially owned by Dr. Hatsopoulos include 57 shares held by his spouse. No director or current executive officer beneficially owned more than 1% of the Company's common stock outstanding as of January 31, 2000; all directors and current executive officers as a group beneficially owned less than 1% of such common stock outstanding as of such date. (3) Shares of the Thermedics common stock beneficially owned by Mr. Brooks, Mr. Crisp, Mr. Ferrari, Mr. Keiser, Mr. Kelleher, Mr. Poirier, Mr. Wood, and all directors and current executive officers as a group include 1,000, 9,000, 8,950, 187,900, 10,000, 25,000, 174,150 and 416,000 shares, respectively, that such person or group had the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Shares beneficially owned by Dr. Hatsopoulos, Mr. Kelleher, Mr. Melas-Kyriazi and all directors and current executive officers as a group include 1,635, 1,294, 1,119 and 4,048 shares, respectively, allocated through January 31, 2000 to their respective accounts maintained pursuant to Thermo Electron's employee stock ownership plan (the "ESOP"), of which the trustees, who have investment power over its assets, are executive officers of Thermo Electron. Shares beneficially owned by Mr. Brooks, Mr. Crisp, Dr. Zervas and all directors and current executive officers as a group include 1,367, 9,971, 10,364 and 21,702 shares, respectively, that had been allocated through January 1, 2000 to their respective accounts maintained under the Deferred Compensation Plan. Shares beneficially owned by Dr. Hatsopoulos include 654 shares held by Dr. Hatsopoulos' spouse and 50,000 shares that a family limited partnership indirectly controlled by Dr. Hatsopoulos has the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Dr. Hatsopoulos disclaims beneficial interest in the shares owned by the family limited partnership except to the extent of his pecuniary interest therein. Shares beneficially owned by Mr. Wood include 2,600 shares held in custodial accounts for the benefit of two minor children. No director or current executive officer beneficially owned more than 1% of the I-4 61 Thermedics common stock outstanding as of January 31, 2000; all directors and current executive officers as a group beneficially owned 1.59% of the Thermedics common stock outstanding as of such date. (4) Shares of the common stock of Thermo Electron beneficially owned by Mr. Crisp, Dr. Hatsopoulos, Mr. Keiser, Mr. Kelleher, Mr. Melas-Kyriazi, Mr. Poirier, Mr. Wood and all directors and current executive officers as a group include 25,596, 25,448, 263,230, 179,359, 384,361, 46,123, 249,298 and 1,173,415 shares, respectively, that such person or group has the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Shares beneficially owned by Dr. Hatsopoulos, Mr. Kelleher, Mr. Melas-Kyriazi and all directors and current executive officers as a group include 2,266, 1,426, 1,071 and 4,763 shares, respectively, allocated to their respective accounts maintained pursuant to Thermo Electron's ESOP, of which the trustees, who have investment power over its assets, are executive officers of Thermo Electron. Shares beneficially owned by Mr. Crisp and all directors and current executive officers as a group include 49,277 shares allocated through January 1, 2000 to Mr. Crisp's account maintained pursuant to Thermo Electron's deferred compensation plan for directors. Shares beneficially owned by Dr. Hatsopoulos include 144,437 shares held by his spouse, 311,708 shares held by a family trust of which his spouse is the trustee and 566,262 shares held by a family limited partnership indirectly controlled by Dr. Hatsopoulos. Shares beneficially owned by Dr. Hatsopoulos also include 50,000 shares that a family trust, of which Dr. Hatsopoulos' spouse is the trustee, has the right to acquire within 60 days of January 31, 2000 and 2,149,500 shares that a family limited partnership indirectly controlled by Dr. Hatsopoulos has the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Dr. Hatsopoulos disclaims beneficial interest in the shares owned by the family limited partnership except to the extent of his pecuniary interest therein. Except for Dr. Hatsopoulos, who beneficially owned 2.44% of the Thermo Electron common stock outstanding as of January 31, 2000, no director or current executive officer beneficially owned more than 1% of such common stock outstanding as of such date; all directors and current executive officers as a group beneficially owned approximately 3.42% of the Thermo Electron common stock outstanding as of such date. DIRECTORS AND EXECUTIVE OFFICERS OF THERMO ELECTRON The name, business address, position with Thermo Electron, present principal occupation or employment and five-year employment history of each of the directors and executive officers of Thermo Electron, together with the names, principal businesses and addresses of any corporations or other organizations in which such principal occupations are conducted, are set forth below. Unless otherwise indicated, each occupation set forth refers to Thermo Electron, each individual is a United States citizen and each individual's business address is 81 Wyman Street, Waltham, Massachusetts 02454. Unless otherwise indicated, to the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron, no director or executive officer of Thermo Electron beneficially owns any Shares (or rights to acquire Shares). Unless otherwise indicated, to the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron, no director or executive officer of Thermo Electron has been convicted in a criminal proceeding during the last five years (excluding traffic violations or similar misdemeanors) and no director or executive officer of Thermo Electron was a party to any judicial or administrative proceeding during the last five years (except for any matters that were dismissed without sanction or settlement) that resulted in a judgement, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. Mr. John N. Hatsopoulos resigned from the Board of Directors of Thermo Electron effective February 21, 2000. SAMUEL W. BODMAN Mr. Bodman, 61, has been a director of Thermo Electron since May 1999. Since 1988, Mr. Bodman has served as the chairman and chief executive officer of Cabot Corporation, a manufacturer of specialty chemicals and materials located at 75 State Street, Boston, MA 02109. Mr. Bodman is also a director of Cabot Corporation, John Hancock Financial Services, Inc., Security Capital Group Incorporated and Westvaco Corporation. I-5 62 PETER O. CRISP Mr. Crisp, 67, has been a director of Thermo Electron since 1974. Mr. Crisp was a general partner of Venrock Associates, a venture capital investment firm located at 30 Rockefeller Plaza, New York, NY 10112, for more than five years until his retirement in September 1997. He has been the vice chairman of Rockefeller Financial Services, Inc. since December 1997. Mr. Crisp is also a director of American Superconductor Corporation, Evans & Sutherland Computer Corporation, NovaCare Inc., Thermedics, ThermoTrex Corporation and United States Trust Corporation. ELIAS P. GYFTOPOULOS Dr. Gyftopoulos, 72, has been a director of Thermo Electron since 1976. Dr. Gyftopoulos is Professor Emeritus of the Massachusetts Institute of Technology, where he was the Ford Professor of Mechanical Engineering and of Nuclear Engineering for more than 20 years until his retirement in 1996. Dr. Gyftopoulos is also a director of Thermo BioAnalysis Corporation, Thermo Cardiosystems Inc., ThermoLase Corporation, ThermoRetec Corporation and Trex Medical Corporation. GEORGE N. HATSOPOULOS Dr. Hatsopoulos, 73, has been a director of Thermo Electron since he founded Thermo Electron in 1956. He served as president, chief executive officer and chairman of the board of Thermo Electron from 1956 until January 1997, June 1999 and January 2000, respectively. Dr. Hatsopoulos is also a director of Photoelectron Corporation, Thermedics, Thermo Ecotek Corporation, Thermo Fibertek Inc., Thermo Instrument Systems Inc. and ThermoTrex Corporation. FRANK JUNGERS Mr. Jungers, 73, has been a director of Thermo Electron since 1978. Mr. Jungers has been a consultant on business and energy matters since 1977. His business address is 822 N.W. Murray Boulevard, Suite 242, Portland, OR 97229. Mr. Jungers is also a director of The AES Corporation, Donaldson, Lufkin & Jenrette, Inc., Georgia-Pacific Corporation, ONIX Systems Inc., Statia Terminals Group N.V., Thermo Ecotek Corporation and ThermoQuest Corporation. ROBERT A. MCCABE Mr. McCabe, 65, has been a director of Thermo Electron since 1962. He has been the chairman of Pilot Capital Corporation, located at 444 Madison Avenue, Suite 2103, New York, NY 10022, which is engaged in private investments, since 1998. Mr. McCabe was the president of Pilot Capital Corporation from 1987 to 1998. Mr. McCabe is also a director of Atlantic Bank & Trust Company, Burns International Services Corporation, Church & Dwight Company and Thermo Optek Corporation. HUTHAM S. OLAYAN Ms. Olayan, 46, has been a director of Thermo Electron since 1987. She has served since 1995 as president and a director of Olayan America Corporation, a member of the Olayan Group, and as president and a director of Competrol Real Estate Limited, another member of the Olayan Group, from 1986 until its merger into Olayan America Corporation in 1997. The surviving company, which is located at 505 Park Avenue, Suite 1100, New York, NY 10022, is engaged in private investments, including real estate, and advisory services. Ms. Olayan is also a director of Trex Medical Corporation. Ms. Olayan is a citizen of Saudi Arabia. ROBERT W. O'LEARY Mr. O'Leary, 56, has been a director of Thermo Electron since June 1998. He has been the president and chairman of Premier, Inc., a I-6 63 strategic alliance of not-for-profit health care and hospital systems located at 12225 El Camino Real, San Diego, CA 92130, since 1995. Mr. O'Leary is also a director of Eco Soil Systems, Inc. RICHARD F. SYRON Dr. Syron, 56, has been a director of Thermo Electron since September 1997, its president and chief executive officer since June 1999 and chairman of the board since January 2000. From April 1994 until May 1999, Dr. Syron was the chairman and chief executive officer of the American Stock Exchange Inc. located at 86 Trinity Place, New York, NY 10006-1881. Dr. Syron is also a director of Dreyfus Corporation, John Hancock Financial Services, Inc. and Thermo Fibertek. ROGER D. WELLINGTON Mr. Wellington, 73, has been a director of Thermo Electron since 1986. Mr. Wellington serves as the president and chief executive officer of Wellington Consultants, Inc. and Wellington Associates Inc., international business consulting firms he founded in 1994 and 1989, respectively, each of which is located at P.O. Box 8186, 5555 Gulf of Mexico Drive, Unit 302, Longboat Key, FL 34228. Mr. Wellington is also a director of Photoelectron Corporation and Thermo Fibergen Inc. BRIAN D. HOLT Mr. Holt, 51, became the chief operating officer, energy and environment, of Thermo Electron in September 1998. Mr. Holt has been the president and chief executive officer of Thermo Ecotek Corporation, a majority-owned subsidiary of Thermo Electron located at 245 Winter Street, Waltham, MA 02451, that is involved in clean-power resources, clean fuels, and naturally derived products for protecting crops since February 1994. From March 1996 to September 1998, he was a vice president of Thermo Electron. Mr. Holt is also a director of The Randers Killam Group Inc., Thermo Ecotek Corporation, ThermoRetec Corporation and Thermo TerraTech Inc. JOHN T. KEISER Mr. Keiser, 64, became chief operating officer, biomedical, of Thermo Electron in September 1998 and was a vice president from April 1997 until his promotion. Mr. Keiser has been the president and chief executive officer of Thermedics since March 1998 and December 1998, respectively, and served as a senior vice president of Thermedics from 1994 until his promotion to president. He has also been the president of Thermo Electron's wholly owned biomedical group, a manufacturer of medical equipment and instruments, since 1994. Mr. Keiser is a director of Metrika Systems Corporation, Thermedics Inc., the Company, Thermo Cardiosystems Inc., ThermoLase Corporation, Thermo Sentron Inc., ThermoTrex Corporation and Trex Medical Corporation. PAUL F. KELLEHER Mr. Kelleher, 57, has been the senior vice president, finance and administration, of Thermo Electron since June 1997, and served as its vice president, finance from 1987 until 1997. Mr. Kelleher served as Thermo Electron's controller from 1982 until January 1996. Mr. Kelleher is a director of ThermoLase Corporation. EARL R. LEWIS Mr. Lewis, 56, became chief operating officer, measurement and detection, of Thermo Electron in September 1998, and served as senior vice president of Thermo Electron from June 1998 to September 1998 and vice president from September 1996 to June 1998. Mr. Lewis has been president and chief executive officer of Thermo Instrument Systems Inc., a manufacturer of measurement and detection instruments, since March 1997 and January 1998, respectively, and was chief operating I-7 64 officer from January 1996 to January 1998. Prior to that time, he was executive vice president of Thermo Instrument Systems Inc. from January 1996 to March 1997 and senior vice president from January 1994 to January 1996. Mr. Lewis served as chief executive officer of Thermo Optek Corporation, a majority-owned subsidiary of Thermo Instrument Systems Inc. and a manufacturer of analytical instruments that measure energy and light for purposes of materials analysis, characterization and preparation, from its inception in August 1995 to January 1998. Mr. Lewis is a director of FLIR Systems Inc., Metrika Systems Corporation, ONIX Systems Inc., SpectRx Inc., Spectra-Physics Lasers, Inc., Thermo BioAnalysis Corporation, Thermo Instrument Systems Inc., Thermo Optek Corporation, ThermoQuest Corporation and the Company. THEO MELAS-KYRIAZI Mr. Melas-Kyriazi, 40, has been a vice president of Thermo Electron since March 1998 and its chief financial officer since January 1999. Prior to his appointment as a vice president of Thermo Electron, Mr. Melas-Kyriazi served as president and chief executive officer of ThermoSpectra Corporation from its inception in August 1994 until March 1998. He is a director of ThermoRetec Corporation. Mr. Melas-Kyriazi is a citizen of Greece. WILLIAM A. RAINVILLE Mr. Rainville, 58, became chief operating officer, recycling and resource recovery, of Thermo Electron in September 1998. Mr. Rainville was a senior vice president of Thermo Electron from March 1993 to September 1998, and a vice president of Thermo Electron from 1986 to 1993. He has been president and chief executive officer of Thermo Fibertek Inc., a majority-owned subsidiary of Thermo Electron located at 245 Winter Street, Waltham, MA 02451 that develops and manufactures equipment and products for the papermaking and paper-recycling industries, since its inception in 1991. Mr. Rainville is also a director of Thermo Ecotek Corporation, Thermo Fibergen Inc., Thermo Fibertek Inc., ThermoRetec Corporation and Thermo TerraTech Inc. I-8 65 STOCK OWNERSHIP. The following table sets forth the beneficial ownership of common stock of the Company, as well as the common stock of Thermedics and Thermo Electron, as of January 31, 2000, with respect to each director and executive officer of Thermo Electron. No director or executive officer of Thermo Electron beneficially owns any shares of capital stock of the Purchaser or Corpak. The directors and executive officers of Thermo Electron disclaim beneficial ownership of the shares of common stock beneficially owned by Thermo Electron.
THERMEDICS THERMEDICS THERMO ELECTRON NAME(1) DETECTION INC.(2) INC.(3) CORPORATION(4) Samuel W. Bodman................................. 0 0 27,599 Peter O. Crisp................................... 0 37,076 121,767 Elias P. Gyftopoulos............................. 600 8,298 91,399 George N. Hatsopoulos............................ 21,197 63,681 3,909,357 Brian D. Holt.................................... 2,000 0 322,941 Frank Jungers.................................... 0 3,000 171,021 John T. Keiser................................... 17,000 194,693 331,636 Paul F. Kelleher................................. 5,100 20,360 213,530 Earl R. Lewis.................................... 2,003 0 215,477 Robert A. McCabe................................. 9,000 2,498 66,326 Theo Melas-Kyriazi............................... 0 11,861 458,532 Hutham S. Olayan................................. 0 0 49,568 Robert W. O'Leary................................ 0 0 43,830 William A. Rainville............................. 10,000 0 361,499 Richard F. Syron................................. 0 0 1,074,006 Roger D. Wellington.............................. 0 0 55,795 All directors and current executive officers as a group (16 persons)............................. 66,900 341,467 7,514,283
- ------------------------------ (1) Except as reflected in the footnotes to this table, shares beneficially owned consist of shares owned by the indicated person or by that person for the benefit of minor children, and all share ownership includes sole voting and investment power. (2) Shares of the common stock of the Company beneficially owned by Dr. Hatsopoulos, Mr. Holt, Mr. Keiser, Kelleher, Mr. Lewis, Mr. Rainville and all directors and current executive officers as a group include 20,000, 2,000, 17,000, 5,000, 2,000, 10,000 and 56,000 shares, respectively, that such person or members of the group have the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Shares beneficially owned by Dr. Hatsopoulos include 57 shares held by his spouse. Shares beneficially owned by Mr. McCabe include 9,000 shares held in a trust of which he and members of his family are trustees. The directors and current executive officers did not individually or as a group beneficially own more than 1% of the Company's common stock outstanding as of January 31, 2000. (3) Shares of the common stock of Thermedics beneficially owned by Mr. Crisp, Dr. Gyftopoulos, Mr. Keiser, Mr. Kelleher, and all directors and current executive officers as a group include 9,000, 2,750, 187,900, 10,000 and 209,650 shares, respectively, that such person or members of the group have the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Shares beneficially owned by Dr. Hatsopoulos, Mr. Kelleher, Mr. Melas-Kyriazi and all directors and current executive officers as a group include 1,635, 1,294, 1,119 and 4,048 shares, respectively, allocated to their respective accounts maintained pursuant to Thermo Electron's ESOP, of which the trustees, who have investment power over its assets, are executive officers of Thermo Electron. Shares beneficially owned by Mr. Crisp and all directors and current executive officers as a group include 9,971 shares allocated to Mr. Crisp's account maintained pursuant to Thermedics' deferred compensation plan for directors. Shares beneficially owned by Dr. Hatsopoulos include 654 shares held by his spouse and 50,000 shares that a family limited partnership indirectly controlled by Dr. Hatsopoulos has the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Dr. Hatsopoulos disclaims beneficial interest in I-9 66 the shares owned by the family limited partnership except to the extent of his pecuniary interest therein. No director or current executive officer beneficially owned more than 1% of the Thermedics common stock outstanding as of January 31, 2000; all directors and current executive officers as a group beneficially owned less than 1% of the Thermedics common stock outstanding as of January 31, 2000. (4) Shares of the common stock of Thermo Electron beneficially owned by Mr. Bodman, Mr. Crisp, Dr. Gyftopoulos, Dr. Hatsopoulos, Mr. Holt, Mr. Jungers, Mr. Keiser, Mr. Kelleher, Mr. Lewis, Mr. McCabe, Mr. Melas-Kyriazi, Ms. Olayan, Mr. O'Leary, Mr. Rainville, Dr. Syron, Mr. Wellington and all directors and current executive officers as a group include 26,000, 25,596, 27,442, 25,448, 284,948, 24,673, 263,230, 179,359, 212,278, 27,442, 384,361, 27,442, 27,000, 294,630, 1,011,000, 24,673 and 2,865,522 shares, respectively, that such person or members of the group have the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Shares beneficially owned by Dr. Hatsopoulos, Mr. Kelleher, Mr. Melas-Kyriazi and all directors and current executive officers as a group include 2,266, 1,426, 1,071 and 4,763 shares, respectively, allocated to their respective accounts maintained pursuant to Thermo Electron's ESOP, of which the trustees, who have investment power over its assets, are executive officers of Thermo Electron. Shares beneficially owned by Mr. Bodman, Mr. Crisp, Dr. Gyftopoulos, Mr. Jungers, Mr. McCabe, Ms. Olayan, Mr. O'Leary, Dr. Syron, Mr. Wellington and all directors and current executive officers as a group include 1,599, 49,277, 1,378, 80,427, 34,725, 19,876, 3,830, 2,506, 26,342 and 219,960 shares, respectively, allocated to accounts maintained pursuant to Thermo Electron's Deferred Compensation Plan. Shares beneficially owned by Dr. Hatsopoulos include 144,437 shares held by his spouse, 311,708 shares held by a family trust of which his spouse is the trustee and 566,262 shares held by a family limited partnership indirectly controlled by Dr. Hatsopoulos. Shares beneficially owned by Dr. Hatsopoulos also include 50,000 shares that a family trust, of which Dr. Hatsopoulos' spouse is the trustee, has the right to acquire within 60 days of January 31, 2000 and 2,149,500 shares that a family limited partnership indirectly controlled by Dr. Hatsopoulos has the right to acquire within 60 days of January 31, 2000 through the exercise of stock options. Dr. Hatsopoulos disclaims beneficial interest in the shares owned by the family limited partnership except to the extent of his pecuniary interest therein. Shares beneficially owned by Ms. Olayan do not include 6,150,000 shares owned by Crescent Holding GmbH, a member of the Olayan Group. Crescent Holding GmbH is indirectly controlled by Suliman S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims beneficial ownership of the shares owned by Crescent Holding GmbH. Except for Dr. Hatsopoulos, who beneficially owned 2.44% of the Thermo Electron common stock outstanding as of January 31, 2000, no director or current executive officer beneficially owned more than 1% of the Thermo Electron common stock outstanding as of such date; all directors and current executive officers as a group beneficially owned 4.71% of the Thermo Electron common stock outstanding as of January 31, 2000. I-10 67 SCHEDULE II INFORMATION CONCERNING TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY The following table sets forth information with respect to purchases of the Company's common stock by the Company, Corpak, Thermedics, the Purchaser and Thermo Electron since January 4, 1998 (the commencement of the Company's second full fiscal year preceding the date of this Offer to Purchase).
AVERAGE PURCHASE NUMBER OF RANGE OF PRICES PRICE PER SHARE SHARES PURCHASED PAID PER SHARE PAID DURING QUARTER/YEAR PURCHASER DURING QUARTER DURING QUARTER(1) QUARTER (1) 1st Quarter 1998......... Thermo Electron 196,100 $9.25 - 11.625 $11.0535 2nd Quarter 1998......... Thermo Electron 352,450 8.75 - 11.4375 9.6945 2nd Quarter 1998......... Thermedics 161,500 8.00 - 11.4375 9.7124 3rd Quarter 1998......... Thermo Electron 17,000 9.0625 - 9.0625 9.0625 4th Quarter 1998......... Thermo Electron 316,900 6.50 - 8.125 7.4635 1st Quarter 1999......... Thermo Electron 147,500 7.75 - 9.25 8.6366
- ------------------------------ (1) Prices per share of the Company's common stock are net of commissions paid by the respective purchasers. There were no transactions in the Company's common stock effected during the 60 days preceding the date of this Offer to Purchase by Corpak, Thermedics, the Purchaser, Thermo Electron or, to the best knowledge of the Purchaser, Corpak, Thermedics and Thermo Electron, the Company or the directors and executive officers of any of the Company, Corpak, Thermedics, the Purchaser or Thermo Electron. II-1 68 SCHEDULE III SECTIONS 86-98 OF THE MASSACHUSETTS BUSINESS CORPORATION LAW SEC. 86. SECTIONS APPLICABLE TO APPRAISAL; PREREQUISITES If a corporation proposes to take a corporate action as to which any section of this chapter provides that a stockholder who objects to such action shall have the right to demand payment for his shares and an appraisal thereof, sections eighty-seven to ninety-eight, inclusive, shall apply except as otherwise specifically provided in any section of this chapter. Except as provided in sections eighty-two and eighty-three, no stockholder shall have such right unless (1) he files with the corporation before the taking of the vote of the shareholders on such corporate action, written objection to the proposed action stating that he intends to demand payment for his shares if the action is taken and (2) his shares are not voted in favor of the proposed action. Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 40; St. 1973, c. 749, sec. 1. SEC. 87. STATEMENT OF RIGHTS OF OBJECTING STOCKHOLDERS IN NOTICE OF MEETING; FORM The notice of the meeting of stockholders at which the approval of such proposed action is to be considered shall contain a statement of the rights of objecting stockholders. The giving of such notice shall not be deemed to create any rights in any stockholder receiving the same to demand payment for his stock, and the directors may authorize the inclusion in any such notice of a statement of opinion by the management as to the existence or non-existence of the right of the stockholders to demand payment for their stock on account of the proposed corporate action. The notice may be in such form as the directors or officers calling the meeting deem advisable, but the following form of notice shall be sufficient to comply with this section: "If the action proposed is approved by the stockholders at the meeting and effected by the corporation, any stockholder (1) who files with the corporation before the taking of the vote on the approval of such action, written objection to the proposed action stating that he intends to demand payment for his shares if the action is taken and (2) whose shares are not voted in favor of such action has or may have the right to demand in writing from the corporation (or, in the case of a consolidation or merger, the name of the resulting or surviving corporation shall be inserted), within twenty days after the date of mailing to him of notice in writing that the corporate action has become effective, payment for his shares and an appraisal of the value thereof. Such corporation and any such stockholder shall in such cases have the rights and duties and shall follow the procedure set forth in sections 88 to 98, inclusive, of chapter 156B of the General Laws of Massachusetts." Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 2. SEC. 88. NOTICE OF EFFECTIVENESS OF ACTION OBJECTED TO The corporation taking such action, or in the case of a merger or consolidation the surviving or resulting corporation, shall, within ten days after the date on which such corporate action became effective, notify each stockholder who filed a written objection meeting the requirements of section eighty-six and whose shares were not voted in favor of the approval of such action, that the action approved at the meeting of the corporation of which he is a stockholder has become effective. The giving of such notice shall not be deemed to create any rights in any stockholder receiving the same to demand payment for his stock. The notice shall be sent by registered or certified mail, addressed to the stockholder at his last known address as it appears in the records of the corporation. Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 3. SEC. 89. DEMAND FOR PAYMENT; TIME FOR PAYMENT If within twenty days after the date of mailing of a notice under subsection (e) of section eighty-two, subsection (f) of section eighty-three, or section eighty-eight, any stockholder to whom the corporation was required to give such notice shall demand in writing from the corporation taking such action, or in the case of a consolidation or merger from the resulting or surviving corporation, payment for his stock, the corporation III-1 69 upon which such demand is made shall pay to him the fair value of his stock within thirty days after the expiration of the period during which such demand may be made. Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 4. SEC. 90. DEMAND FOR DETERMINATION OF VALUE; BILL IN EQUITY; VENUE If during the period of thirty days provided for in section eighty-nine the corporation upon which such demand is made and any such objecting stockholder fail to agree as to the value of such stock, such corporation or any such stockholder may within four months after the expiration of such thirty-day period demand a determination of the value of the stock of all such objecting stockholders by a bill in equity filed in the superior court in the county where the corporation in which such objecting stockholder held stock had or has its principal office in the commonwealth. Added by St. 1964, c. 723, sec. 1. SEC. 91. PARTIES TO SUIT TO DETERMINE VALUE; SERVICE If the bill is filed by the corporation, it shall name as parties respondent all stockholders who have demanded payment for their shares and with whom the corporation has not reached agreement as to the value thereof. If the bill is filed by a stockholder, he shall bring the bill in his own behalf and in behalf of all other stockholders who have demanded payment for their shares and with whom the corporation has not reached agreement as to the value thereof, and service of the bill shall be made upon the corporation by subpoena with a copy of the bill annexed. The corporation shall file with its answer a duly verified list of all such other stockholders, and such stockholders shall thereupon be deemed to have been added as parties to the bill. The corporation shall give notice in such form and returnable on such date as the court shall order to each stockholder party to the bill by registered or certified mail, addressed to the last known address of such stockholder as shown in the records of the corporation, and the court may order such additional notice by publication or otherwise as it deems advisable. Each stockholder who makes demand as provided in section eighty-nine shall be deemed to have consented to the provisions of this section relating to notice, and the giving of notice by the corporation to any such stockholder in compliance with the order of the court shall be a sufficient service of process on him. Failure to give notice to any stockholder making demand shall not invalidate the proceedings as to other stockholders to whom notice was properly given, and the court may at any time before the entry of a final decree make supplementary orders of notice. Added by St. 1964, c. 723, sec. 1. SEC. 92. DECREE DETERMINING VALUE AND ORDERING PAYMENT; VALUATION DATE After hearing the court shall enter a decree determining the fair value of the stock of those stockholders who have become entitled to the valuation of and payment for their shares, and shall order the corporation to make payment of such value, together with interest, if any, as hereinafter provided, to the stockholders entitled thereto upon the transfer by them to the corporation of the certificates representing such stock if certificated or, if uncertificated, upon receipt of an instruction transferring such stock to the corporation. For this purpose, the value of the shares shall be determined as of the day preceding the date of the vote approving the proposed corporate action and shall be exclusive of any element of value arising from the expectation or accomplishment of the proposed corporate action. Added by St. 1964, c. 723, sec. 1. Amended by St. 1983, c. 522, sec. 22. SEC. 93. REFERENCE TO SPECIAL MASTER The court in its discretion may refer the bill or any question arising thereunder to a special master to hear the parties, make findings and report the same to the court, all in accordance with the usual practice in suits in equity in the superior court. Added by St. 1964, c. 723, sec. 1. III-2 70 SEC. 94. NOTATION ON STOCK CERTIFICATES OF PENDENCY OF BILL On motion the court may order stockholder parties to the bill to submit their certificates of stock to the corporation for the notation thereon of the pendency of the bill and may order the corporation to note such pendency in its records with respect to any uncertificated shares held by such stockholder parties, and may on motion dismiss the bill as to any stockholder who fails to comply with such order. Added by St. 1964, c. 723, sec. 1. Amended by St. 1983, c. 522, sec. 23. SEC. 95. COSTS; INTEREST The costs of the bill, including the reasonable compensation and expenses of any master appointed by the court, but exclusive of fees of counsel or of experts retained by any party, shall be determined by the court and taxed upon the parties to the bill, or any of them, in such manner as appears to be equitable, except that all costs of giving notice to stockholders as provided in this chapter shall be paid by the corporation. Interest shall be paid upon any award from the date of the vote approving the proposed corporate action, and the court may on application of any interested party determine the amount of interest to be paid in the case of any stockholder. Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 41. SEC. 96. DIVIDENDS AND VOTING RIGHTS AFTER DEMAND FOR PAYMENT Any stockholder who has demanded payment for his stock as provided in this chapter shall not thereafter be entitled to notice of any meeting of stockholders or to vote such stock for any purpose and shall not be entitled to the payment of dividends or other distribution on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the date of the vote approving the proposed corporate action) unless: (1) A bill shall not be filed within the time provided in section ninety; (2) A bill, if filed, shall be dismissed as to such stockholder; or (3) Such stockholder shall with the written approval of the corporation, or in the case of a consolidation or merger, the resulting or surviving corporation, deliver to it a written withdrawal of his objections to and an acceptance of such corporate action. Notwithstanding the provisions of clauses (1) to (3), inclusive, said stockholder shall have only the rights of a stockholder who did not so demand payment for his stock as provided in this chapter. Added by St. 1964, c. 723, sec. 1. Amended by St. 1982, c. 149. SEC. 97. STATUS OF SHARES PAID FOR The shares of the corporation paid for by the corporation pursuant to the provisions of this chapter shall have the status of treasury stock, or in the case of a consolidation or merger the shares or the securities of the resulting or surviving corporation into which the shares of such objecting stockholder would have been converted had he not objected to such consolidation or merger shall have the status of treasury stock or securities. Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 42. SEC. 98. EXCLUSIVE REMEDY; EXCEPTION The enforcement by a stockholder of his right to receive payment for his shares in the manner provided in this chapter shall be an exclusive remedy except that this chapter shall not exclude the right of such stockholder to bring or maintain an appropriate proceeding to obtain relief on the ground that such corporate action will be or is illegal or fraudulent as to him. Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 43. III-3 71 Manually signed facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates evidencing Shares and any other required documents should be sent or delivered by each stockholder or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below: The Depositary for the Offer is: AMERICAN STOCK TRANSFER & TRUST COMPANY By Mail: By Hand or Overnight Courier: 40 Wall Street 40 Wall Street 46th Floor 46th Floor New York, New York 10005 New York, New York 10005 Attn: Reorganization Department Attn: Reorganization Department By Facsimile Transmission: (718) 234-5001 Confirm by Telephone: (718) 921-8200
Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or other tender offer materials may be directed to the Information Agent or the Dealer Managers at their respective addresses and telephone numbers set forth below. Stockholders may also contact their broker, dealer, bank or trust company for assistance concerning the Offer. The Information Agent for the Offer is: D.F. KING & CO., INC. 77 Water Street, 20th Floor New York, NY 10005 Bankers and Brokers Call Collect (212) 269-5550 All Others Call Toll-Free (800) 290-6433 The Dealer Managers for the Offer are: J.P. MORGAN SECURITIES INC. 60 Wall Street New York, NY 10260 (877) 869-0656 THE BEACON GROUP CAPITAL SERVICES, LLC 399 Park Avenue New York, NY 10022 (212) 339-9100 EX-99.12(A)(2) 3 LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 10, 2000 BY DETECTION ACQUISITION, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THERMEDICS INC. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- The Depositary for the Offer is: AMERICAN STOCK TRANSFER & TRUST COMPANY By Mail: By Hand or Overnight Courier: 40 Wall Street 40 Wall Street 46th Floor 46th Floor New York, NY 10005 New York, NY 10005 Attn: Reorganization Department Attn: Reorganization Department
By Facsimile Transmission: (718) 234-5001 Confirm by Telephone: (718) 921-8200 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by holders of Shares (as defined below) either if certificates evidencing Shares ("Share Certificates") are to be forwarded herewith or, unless an Agent's Message (as defined in the section of the Offer to Purchase dated March 10, 2000 (the "Offer to Purchase") captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares") is utilized, if delivery of Shares is to be made by book-entry transfer into the account of American Stock Transfer & Trust Company, as Depositary (the "Depositary"), at The Depository Trust Company ("DTC") pursuant to the procedures set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares." Stockholders who tender Shares by book-entry transfer are referred to herein as "Book-Entry Stockholders." Stockholders whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Terms Of The Offer; Expiration Date"), or who cannot complete the procedures for delivery by book-entry transfer on a timely basis, may tender their Shares according to the guaranteed delivery procedures set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares." See Instruction 2. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. 2
- ------------------------------------------------------------------------------------------------------------------------------------ DESCRIPTION OF SHARES TENDERED DESCRIPTION OF SHARES TENDERED - ------------------------------------------------------------------------------------------------------------------------------------ SHARE CERTIFICATE(S) AND SHARE(S) TENDERED NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (ATTACH ADDITIONAL SIGNED LIST, IF NECESSARY). (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S)) SEE INSTRUCTION 3. - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL NUMBER OF SHARES SHARE REPRESENTED NUMBER CERTIFICATE BY SHARE OF SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- TOTAL SHARES - ------------------------------------------------------------------------------------------------------------------------------------ * Need not be completed by Book-Entry Stockholders. ** Unless otherwise indicated, all Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered. See Instruction 4. IF ANY SHARE CERTIFICATES HAVE BEEN LOST OR DESTROYED, SEE INSTRUCTION 11. - ------------------------------------------------------------------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution: ______________________________________________ DTC Account Number: _________________________________________________________ DTC Transaction Code Number: ________________________________________________ [ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING (PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY): Name(s) of Registered Holder(s): ____________________________________________ Window Ticket Number (if any): ______________________________________________ Date of Execution of Notice of Guaranteed Delivery: _________________________ Name of Institution that Guaranteed Delivery: _______________________________ If delivered by Book-Entry Transfer: ________________________________________ DTC Account Number: _________________________________________________________ DTC Transaction Code Number: ________________________________________________ NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to Detection Acquisition, Inc. (the "Purchaser"), a Delaware corporation and an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts corporation ("Thermedics"), the above-described shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation (the "Company"), pursuant to the Purchaser's offer to purchase all of the outstanding Shares at a price of $8.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and in this Letter of Transmittal (which, together with any amendments or supplements thereto or hereto, collectively constitute the "Offer"), receipt of each of which is hereby acknowledged. The undersigned understands that the Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer, including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser 2 3 all right, title and interest in and to all of the Shares that are being tendered hereby and any and all dividends and distributions, including, without limitation, distributions of additional Shares or rights declared, paid or issued with respect to the tendered Shares on or after January 31, 2000 (collectively, "Distributions"), and irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and any Distributions with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver such Share Certificates and any Distributions, or transfer ownership of such Shares and any Distributions on the account books maintained by DTC, together in either case with appropriate evidences of transfer and authenticity, to, or upon the order of, the Purchaser, upon receipt by the Depositary, as the undersigned's agent, of the purchase price, (b) present such Shares and any Distributions for transfer on the books of the Company, and (c) receive all benefits and otherwise exercise all rights of record and beneficial ownership of such Shares and any Distributions, all in accordance with the terms and subject to the conditions of the Offer. The undersigned hereby irrevocably appoints John T. Keiser, Kenneth J. Apicerno, Sandra L. Lambert and Seth H. Hoogasian in their respective capacities as officers of the Purchaser or one of its affiliates, and any individuals who shall hereafter succeed to any such office of the Purchaser or one of its affiliates, and each of them or any other designees of the Purchaser, as attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to the full extent of the undersigned's rights with respect to the Shares tendered by the undersigned and accepted for payment and paid for by the Purchaser and any Distributions. This power of attorney and proxy shall be considered irrevocable and coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts such Shares for payment and deposits the purchase price therefor with the Depositary. Upon such deposit, all prior powers of attorney and proxies given by the undersigned at any time with respect to such Shares and any Distributions will, without further action, be revoked, and no subsequent powers of attorney or proxies may be given nor any subsequent written consents executed by the undersigned (and, if given or executed, will not be deemed effective). Upon such deposit by the Purchaser, the designees of the Purchaser will, with respect to such Shares and any Distributions, be empowered to exercise all voting and other rights of the undersigned as they in their sole discretion may deem proper at any annual or special meeting of the Company's stockholders, or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's payment for such Shares, the Purchaser must be able to exercise full voting rights and other rights of a record and beneficial owner with respect to such Shares and any Distributions, including, without limitation, voting at any meeting of stockholders or by written consent in lieu of any such meeting. The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and any Distributions and (b) when the Shares are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title to the Shares and any Distributions, free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim. The undersigned, upon request, shall execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and any Distributions. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser any Distribution in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance or appropriate assurance thereof, the Purchaser shall be, subject to applicable law, entitled to all rights and privileges as record and beneficial owner of any such Distribution and may withhold the entire purchase price of Shares tendered hereby or deduct from the purchase price the amount or value of any such Distribution, as determined by the Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all authority herein conferred or agreed to be conferred shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as otherwise provided in the Offer to Purchase, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date (as defined in the section of the Offer to Purchase captioned "The Tender Offer--Terms Of The Offer; Expiration Date") and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after May 8, 2000. See the section of the Offer to Purchase captioned "The Tender Offer -- Withdrawal Rights." The undersigned understands that tenders of Shares pursuant to any of the procedures described in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares" and in the Instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. The Purchaser's acceptance of such Shares for payment will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions set forth in the Offer. The undersigned understands that the Offer is conditioned upon, among other things set forth in the Offer to Purchase, there being validly tendered and not withdrawn prior to the expiration of the Offer that number of Shares 3 4 which, together with the Shares held by Thermo Electron Corporation and its subsidiaries, including Thermedics, constitutes at least ninety percent (90%) of the Shares outstanding on the Expiration Date. The undersigned understands that, under certain circumstances set forth in the Offer to Purchase, the Purchaser may terminate or amend the Offer or may not be required to accept for payment any of the Shares tendered herewith. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price of all Shares accepted for payment and issue or return any Share Certificate(s) for Shares not tendered or not purchased in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated herein under "Special Delivery Instructions," please mail the check for the purchase price of all Shares accepted for payment and return any Share Certificate(s) for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the address of the registered holder(s) appearing under "Description of Shares Tendered." In the event that both the "Special Delivery Instructions" and the "Special Payment Instructions" boxes are completed, please issue the check for the purchase price of all Shares accepted for payment and return any Share Certificate(s) for Shares not tendered or not purchased in the name(s) of, and deliver such check and return such Share Certificate(s) to, the person(s) so indicated. Please credit any Shares tendered herewith by book-entry transfer that are not purchased by crediting the DTC account designated above. The undersigned recognizes that the Purchaser has no obligation pursuant to the "Special Payment Instructions" to transfer any Shares from the name(s) of the registered holder(s) thereof if the Purchaser does not accept for payment any of the Shares tendered hereby. - -------------------------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Share Certificate(s) evidencing Shares not tendered or not purchased or the check for the purchase price of Shares accepted for payment are to be issued in the name of someone other than the undersigned. Issue: [ ] check [ ] certificates to: Name: _________________________________________________________________ (PLEASE PRINT) Address: ______________________________________________________________ _______________________________________________________________________ (INCLUDE ZIP CODE) __________________________________________________________________________ (TAX IDENTIFICATION OR SOCIAL SECURITY NO.) (SEE SUBSTITUTE FORM W-9 BELOW) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Share Certificate(s) evidencing Shares not tendered or not purchased or the check for the purchase price of Shares accepted for payment are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown above. Mail: [ ] check [ ] certificates to: Name: __________________________________________________________________ (PLEASE PRINT) Address: _______________________________________________________________ ________________________________________________________________________ (INCLUDE ZIP CODE) ________________________________________________________________________ - -------------------------------------------------------------------------------- 4 5 - --------------------------------------------------------------------------------
SIGN IMPORTANT SIGN HERE SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9 BELOW HERE --> X _________________________________________________________________ <-- --> X _________________________________________________________________ <--
SIGNATURE(S) OF HOLDER(S) Dated: ________________________, 2000 (Must be signed by the registered holder(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5.) Name(s): __________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ (PLEASE PRINT) Capacity (Full Title): ____________________________________________ ___________________________________________________________________ ___________________________________________________________________ Address: __________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone Number: ___________________________________ Tax Identification or Social Security No.: ________________________ Dated: ___________________________, 2000 GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: _____________________________________________ Name: _____________________________________________________________ (PLEASE PRINT) Title: ____________________________________________________________ Name of Firm: _____________________________________________________ (PLEASE PRINT) Address: __________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone Number: ___________________________________ Dated: ___________________________, 2000 - -------------------------------------------------------------------------------- 5 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) of Shares (which term, for purposes of this document, shall include any DTC participant whose name appears on a security position listing as the owner of Share(s)) tendered herewith, unless such holder(s) has (have) completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions," or (b) if such Share(s) are tendered for the account of a firm which is a commercial bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program, the Stock Exchanges' Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program (each of the foregoing being referred to as an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. 2. Delivery of Letter of Transmittal and Certificates. This Letter of Transmittal is to be completed by stockholders either if Share Certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares." In order for Shares to be validly tendered pursuant to the Offer, this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message in connection with a book-entry delivery of Shares, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front cover hereof prior to the Expiration Date and either (i) Share Certificates evidencing tendered Shares must be received by the Depositary at such address or such Shares must be tendered by book-entry transfer and a timely confirmation of such book-entry transfer (a "Book-Entry Confirmation") must be received by the Depositary, in each case prior to the Expiration Date or (ii) the guaranteed delivery procedures described in the following sentence must be complied with. Stockholders whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to reach the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares." Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, together with this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry delivery, an Agent's Message), and any other documents required by this Letter of Transmittal, must be received by the Depositary within three American Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE SOLE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted. All tendering stockholders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their Shares for payment. If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. 3. Inadequate Space. If the space provided herein is inadequate, the Share Certificate numbers, the number of Shares and any other required information should be listed on a separate signed schedule attached hereto and referenced in the box entitled "Description of Shares Tendered." 4. Partial Tenders. (Not Applicable to Book-Entry Stockholders.) If fewer than all the Shares evidenced by any Share Certificate submitted to the Depositary herewith are to be tendered, fill in the number of Shares which are to be 6 7 tendered in the box entitled "Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing the Shares that were evidenced by the Share Certificate(s) delivered to the Depositary herewith, but which were not tendered hereby, will be sent to the registered holder(s) shown above, unless otherwise provided in the box entitled "Special Delivery Instructions," as soon as practicable after the expiration or termination of the Offer. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the tendered Shares are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Share Certificates. If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of such person's authority so to act must be submitted. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), in which case, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Share Certificate(s) listed and tendered hereby, the Share Certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on such Share Certificate(s). Signature(s) on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. 6. Stock Transfer Taxes. Except as set forth in this Instruction 6, the Purchaser will pay or cause to be paid any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price of Shares accepted for payment is to be made to, or if Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued in the name of, any person other than the registered holder(s), or if tendered Share Certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, then the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such person or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or an exemption therefrom, is submitted. EXCEPT AS SET FORTH IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S) TENDERED HEREBY. 7. Special Payment and Delivery Instructions. If a check for the purchase price of Shares accepted for payment is to be issued in the name of, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued or returned to, a person other than the signer of this Letter of Transmittal or if a check or such Share Certificate(s) are to be returned to a person other than the signer of this Letter of Transmittal or to an address of the signer other than that shown in this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal must be completed. 8. Waiver of Conditions. The conditions of the Offer may be waived by the Purchaser, in whole or in part, at any time and from time to time in its sole discretion. 9. Substitute Form W-9. Under U.S. federal income tax law, a stockholder whose tendered Shares are purchased is required to provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") (e.g., social security number or employer identification number) on Substitute Form W-9 below and to certify whether such 7 8 stockholder is subject to backup withholding of federal income tax. If a tendering stockholder has been notified by the Internal Revenue Service (the "IRS") that such stockholder is subject to backup withholding, such stockholder must cross out item 2 of the Certification box (Part 2) of the Substitute Form W-9, unless such stockholder has since been notified by the IRS that such stockholder is no longer subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering stockholder to federal income tax withholding at the rate of 31% on the payment of the purchase price of all Shares purchased from the stockholder. If the Depositary is not provided with the correct TIN, the IRS may subject the stockholder or other payee to a $50 penalty. Certain stockholders are not subject to these backup withholding and reporting requirements. Exempt recipients, such as corporations, are also requested to provide their TIN and check the "Exempt" box in Part 3. Foreign individuals or entities must submit a Form W-8 or W-8BEN, signed under penalties of perjury, attesting to their foreign status. A Form W-8 or W8-BEN can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. IF BACKUP WITHHOLDING APPLIES, THE DEPOSITARY IS REQUIRED TO WITHHOLD 31% OF ANY PAYMENTS MADE TO THE STOCKHOLDER OR OTHER PAYEE. BACKUP WITHHOLDING IS NOT AN ADDITIONAL TAX. RATHER, THE TAX LIABILITY OF PERSONS SUBJECT TO BACKUP WITHHOLDING WILL BE REDUCED BY THE AMOUNT OF TAX WITHHELD. IF WITHHOLDING RESULTS IN AN OVERPAYMENT OF TAXES, A REFUND MAY BE OBTAINED FROM THE IRS. The "Awaiting TIN" box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the "Awaiting TIN" box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. If the "Awaiting TIN" box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% of all payments made unless a properly certified TIN is provided to the Depositary within 60 days. The stockholder is required to give the Depositary the TIN of the record owner of the Shares or of the last transferee appearing on the transfers attached to, or endorsed on, the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 10. Questions and Requests for Assistance or Additional Copies. Questions and requests for assistance may be directed to the Dealer Managers or the Information Agent at their respective addresses and telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal and all other tender offer materials may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies at the Purchaser's expense. 11. Lost, Destroyed or Stolen Certificates. If any Share Certificate has been lost, destroyed or stolen, the stockholder should promptly notify the Depositary. The stockholder will then be instructed as to the steps that must be taken in order to replace such Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Share Certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED, OR, IF APPROPRIATE, AN AGENT'S MESSAGE, TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE. 8 9 - ---------------------------------------------------------------------------------------------------------------------------- PAYER'S NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY - ---------------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT _______________________________ FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW: Social security number DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE or PAYER'S REQUEST FOR _______________________________ TAXPAYER IDENTIFICATION Employer identification NUMBER (TIN) number (If Awaiting TIN, write "Applied For") ----------------------------------------------------------------------------------------- PART 2 -- CERTIFICATION -- Under penalties of PART 3 -- perjury, I certify that: [ ] Awaiting TIN (1) The number shown on this form is my correct [ ] Exempt Taxpayer Identification Number (or I am waiting for a number to be issued to me); and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. ----------------------------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS -- You must cross out Item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you are subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). - ---------------------------------------------------------------------------------------------------------------------------- SIGN HERE > SIGNATURE ____________________________ DATE ______________, 2000 - ----------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. 9 10 YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE "AWAITING TIN" BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER - -------------------------------------------------------------------------------- I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (1) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number, 31% of all reportable payments made to me may be withheld until I provide a Taxpayer Identification Number with required certifications, which should be provided within 60 days. Signature: ______________________________ Dated: ___________________, 2000 - -------------------------------------------------------------------------------- 10 11 The Information Agent for the Offer is: D.F. KING & CO., INC. 77 Water Street, 20th Floor New York, NY 10005 Bankers and Brokers Call Collect (212) 269-5550 All Others Call Toll-Free (800) 290-6433 The Dealer Managers for the Offer are: J.P. MORGAN SECURITIES INC. 60 Wall Street New York, NY 10260 (877) 869-0656 THE BEACON GROUP CAPITAL SERVICES, LLC 399 Park Avenue New York, NY 10022 (212) 339-9100 EX-99.12(A)(3) 4 NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. As set forth in the section captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares" in the Offer to Purchase described below, this Notice of Guaranteed Delivery or one substantially in the form hereof must be used to tender shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation (the "Company"), pursuant to the Offer (as defined below) if certificates evidencing Shares are not immediately available or the certificates evidencing Shares and all other required documents cannot be delivered to American Stock Transfer & Trust Company (the "Depositary") prior to the Expiration Date (as defined in the Offer of Purchase), or if the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This instrument may be delivered by hand or transmitted by facsimile transmission, overnight courier or mail to the Depositary. The Depositary for the Offer is: AMERICAN STOCK TRANSFER & TRUST COMPANY By Mail: By Hand or Overnight Courier: 40 Wall Street 40 Wall Street 46th Floor 46th Floor New York, New York 10005 New York, New York 10005 Attn: Reorganization Department Attn: Reorganization Department
By Facsimile Transmission: (718) 234-5001 Confirm by Telephone: (718) 921-8200 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution (as defined in the Offer to Purchase) under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box in the Letter of Transmittal. THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED. 2 Ladies and Gentlemen: The undersigned hereby tenders to Detection Acquisition, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 10, 2000 (the "Offer to Purchase") and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares indicated below pursuant to the guaranteed delivery procedures set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares." - -------------------------------------------------------------------------------- Signature(s): ______________________________________________ Name(s) of Record Holder(s): _______________________________ ____________________________________________________________ ____________________________________________________________ Please Type or Print Number of Shares: __________________________________________ Share Certificate No(s).(if available): ____________________ ____________________________________________________________ ____________________________________________________________ Dated: _______________________________________________, 2000 Address: ___________________________________________________ ____________________________________________________________ Zip Code Area Code and Tel. No.(s): _________________________________ Check box if Shares will be tendered by book-entry transfer: [ ] DTC Account Number: ________________________________________ GUARANTEE (Not to be used for signature guarantees) The undersigned, a firm which is a commercial bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program, the Stock Exchanges' Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program, hereby guarantees to either deliver to the Depositary certificates evidencing all the Shares tendered hereby, in proper form for transfer, or to deliver such Shares pursuant to the procedure for book-entry transfer into the Depositary's account at The Depository Trust Company, in either case together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry transfer, and any other required documents, all within three American Stock Exchange trading days after the date hereof. Name of Firm: _________________________________________________________________ Address: ______________________________________________________________________ _______________________________________________________________________________ Zip Code Area Code and Tel. No.: _______________________________________________________ Authorized Signature: _________________________________________________________ Name: _________________________________________________________________________ Title: ________________________________________________________________________ Dated: __________________________________________________________________, 2000 NOTE: DO NOT SEND CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. - -------------------------------------------------------------------------------- 2 EX-99.12(A)(4) 5 LETTER FROM DEALER MANAGERS TO BROKERS 1 J.P. MORGAN SECURITIES INC. THE BEACON GROUP CAPITAL SERVICES, LLC 60 WALL STREET 399 PARK AVENUE, 17TH FLOOR NEW YORK, NY 10260 NEW YORK, NY 10022 (877) 869-0656 (212) 339-9100
OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. AT $8.00 NET PER SHARE BY DETECTION ACQUISITION, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THERMEDICS INC. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- March 10, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Detection Acquisition, Inc., a Delaware corporation (the "Purchaser") and an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts corporation ("Thermedics"), to act as Dealer Managers in connection with the Purchaser's offer to purchase all outstanding shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation (the "Company"), at a purchase price of $8.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 10, 2000 (the "Offer to Purchase") and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") enclosed herewith. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS DESCRIBED IN THE OFFER TO PURCHASE, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH SHARES OWNED BY THERMO ELECTRON CORPORATION AND ITS SUBSIDIARIES, INCLUDING THERMEDICS, CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE OUTSTANDING SHARES ON THE EXPIRATION DATE (AS DEFINED IN THE SECTION OF THE OFFER TO PURCHASE CAPTIONED "THE TENDER OFFER -- TERMS OF THE OFFER; EXPIRATION DATE"). THE OFFER IS ALSO SUBJECT TO OTHER IMPORTANT TERMS AND CONDITIONS CONTAINED IN THE OFFER TO PURCHASE. Enclosed for your information and for forwarding to your clients for whose accounts you hold Shares registered in your name or in the name of your nominees are copies of the following documents: 1. The Offer to Purchase dated March 10, 2000. 2. The Letter of Transmittal to tender Shares (for your use and for the information of your clients). 3. The Notice of Guaranteed Delivery for Shares (to be used to accept the Offer if certificates evidencing Shares ("Share Certificates") are not immediately available or if such Share Certificates and all other required documents cannot be delivered to American Stock Transfer & Trust Company (the "Depositary") prior to the Expiration Date or if the procedures for book-entry transfer cannot be completed on a timely basis). 4. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominees, with space provided for obtaining such clients' instructions with regard to the Offer. 5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 6. A return envelope addressed to the Depositary. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED. 2 In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates evidencing Shares ("Share Certificates") or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares") pursuant to the procedures set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares," (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares") in connection with a book-entry transfer, and (iii) any other documents required by the Letter of Transmittal. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's Share Certificates are not immediately available or such stockholder cannot deliver the Share Certificates and all other required documents to reach the Depositary prior to the Expiration Date, or such stockholder cannot complete the procedure for delivery by book-entry transfer on a timely basis, such Shares may nevertheless be tendered by following the guaranteed delivery procedures specified in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares." No fees or commissions will be paid to brokers, dealers or any other persons (other than to the Dealer Managers and D.F. King & Co., Inc. (the "Information Agent"), as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any transfer taxes payable on the purchase of Shares by the Purchaser pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Questions and requests for assistance or for additional copies of the enclosed materials may be directed to the Dealer Managers or the Information Agent, at their respective addresses and telephone numbers set forth on the back cover of the Offer to Purchase. Very truly yours, J.P. Morgan Securities Inc. The Beacon Group Capital Services, LLC NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THERMO ELECTRON CORPORATION OR ANY OF ITS SUBSIDIARIES (INCLUDING WITHOUT LIMITATION THERMEDICS AND THE PURCHASER), THE COMPANY, THE DEALER MANAGERS, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. EX-99.12(A)(5) 6 LETTER TO CLIENTS FOR USE BY BROKERS 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. AT $8.00 NET PER SHARE BY DETECTION ACQUISITION, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THERMEDICS INC. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- To Our Clients: Enclosed for your consideration is an Offer to Purchase dated March 10, 2000 (the "Offer to Purchase") and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") relating to an offer by Detection Acquisition, Inc., a Delaware corporation (the "Purchaser") and an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts corporation ("Thermedics"), to purchase all outstanding shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation (the "Company"), at a purchase price of $8.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. We are the holder of record of Shares held by us for your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to have us tender on your behalf any or all of the Shares held by us for your account, pursuant to the terms and subject to the conditions set forth in the Offer. Your attention is directed to the following: - The tender price is $8.00 per Share, net to the seller in cash, without interest thereon. - The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Thursday, April 6, 2000, unless the Offer is extended. - The Offer is made for all of the outstanding Shares. - The Offer is conditioned upon, among other things described in the Offer to Purchase, there being validly tendered and not withdrawn prior to the expiration of the Offer that number of Shares which, together with Shares owned by Thermo Electron Corporation and its subsidiaries, including Thermedics, constitutes at least ninety percent (90%) of the outstanding Shares on the Expiration Date (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Terms Of The Offer; Expiration Date"). The Offer is also subject to other important terms and conditions contained in the Offer to Purchase. 2 - Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. - In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by American Stock Transfer & Trust Company (the "Depositary") of (i) certificates evidencing Shares or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book Entry Transfer Facility (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares") pursuant to the procedures set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares," (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares") in connection with a book-entry transfer and (iii) any other documents required by the Letter of Transmittal. The Offer is being made solely by the Offer to Purchase and the related Letter of Transmittal and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by J.P. Morgan Securities Inc., The Beacon Group Capital Services, LLC or one or more registered brokers or dealers licensed under the laws of such jurisdiction. If you wish to have us tender any or all of the Shares held by us for your account, please instruct us by completing, executing and returning to us the instruction form contained in this letter. If you authorize a tender of your Shares, all such Shares will be tendered unless otherwise specified in such instruction form. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. 3 ------------------------ INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. The undersigned acknowledge(s) receipt of your letter enclosing the Offer to Purchase dated March 10, 2000 (the "Offer to Purchase") and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") pursuant to an offer by Detection Acquisition, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts corporation, to purchase all of the outstanding shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation. This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. - --------------------------------------------------------------------------------
------------------------------------------------ Number of Shares to be Tendered(1): ------------------------------------------------ Dated: ______________________________, 2000 SIGN HERE > x ------------------------------------------------ Signature(s): ________________________________________________ Please type or print name(s): ________________________________________________ Address: ________________________________________________ Area Code and Telephone Number: ________________________________________________ Tax Identification or Social Security No: - --------------------------------------------------------------------------------
(1) Unless otherwise indicated, it will be assumed that all of the Shares held by us for your account are to be tendered. EX-99.12(A)(6) 7 SUMMARY ADVERTISEMENT AS PUBLISHED MARCH 10, 2000 1 This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is being made solely by the Offer to Purchase dated March 10, 2000 and the related Letter of Transmittal and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by J.P. Morgan Securities Inc., The Beacon Group Capital Services, LLC or one or more registered brokers or dealers licensed under the laws of such jurisdiction. NOTICE OF OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. AT $8.00 NET PER SHARE BY DETECTION ACQUISITION, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THERMEDICS INC. Detection Acquisition, Inc., a Delaware corporation (the "Purchaser") and an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts corporation ("Thermedics"), is offering to purchase all outstanding shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation (the "Company"), at a purchase price of $8.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 10, 2000 (the "Offer to Purchase") and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). The Purchaser is a wholly-owned subsidiary of Corpak Inc. ("Corpak"), a Massachusetts corporation and a wholly-owned subsidiary of Thermedics. Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"), owns a majority of the outstanding shares of common stock of Thermedics. ------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED. ------------------------------------------------------------------------------- THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH SHARES OWNED BY THERMO ELECTRON AND ITS SUBSIDIARIES, INCLUDING THERMEDICS, CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE OUTSTANDING SHARES OF THE COMPANY ON THE EXPIRATION DATE. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER IMPORTANT TERMS AND CONDITIONS CONTAINED IN THE OFFER TO PURCHASE. 2 The Offer is the first step in Thermedics' plan to take the Company private. The purpose of the Offer is to acquire the minority interest in the Company as part of an overall reorganization of Thermo Electron. If the Offer is completed, Thermo Electron, Corpak and the Purchaser together will own at least 90% of the Shares. Promptly following the closing of the Offer, Corpak and Thermo Electron plan to contribute their Shares to the Purchaser. Thermo Electron and Corpak would then cause the Company to merge with and into the Purchaser in a so-called "short-form" merger between the Company and the Purchaser (the "Merger"). Stockholders of the Company who do not tender their Shares in the Offer will not be entitled to vote on the Merger. The consideration per Share in the Merger (other than with respect to Shares held by stockholders, if any, who are entitled to and perfect their appraisal rights under Massachusetts law) would be the same as the Offer price of $8.00. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn if, as and when the Purchaser gives oral or written notice to American Stock Transfer & Trust Company (the "Depositary") of the Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares so accepted for payment pursuant to the Offer will be made by deposit of the aggregate purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting such payment to stockholders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates evidencing Shares ("Share Certificates") or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares") pursuant to the procedures set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares," (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares") in connection with a book-entry transfer and (iii) any other documents required by the Letter of Transmittal. The term "Expiration Date" means 12:00 midnight, New York City time, on Thursday, April 6, 2000, unless and until the Purchaser, in its sole discretion, shall have extended the period during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. Subject to the applicable rules and regulations of the Securities and Exchange Commission, the Purchaser expressly reserves the right, in its sole discretion, at any time and from time to time, to extend the period during which the Offer is open for any reason, including the failure to satisfy any of the conditions specified in the section of the Offer to Purchase captioned "The Tender Offer -- Certain Conditions Of The Offer," and thereby delay acceptance for payment of, or payment for, any Shares, by giving oral or written notice of such extension to the Depositary. Any such extension will be followed as promptly as practicable by a public announcement thereof, such announcement to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the right of a tendering stockholder to withdraw such stockholder's Shares. Except as otherwise provided in the section of the Offer to Purchase captioned "The Tender Offer -- Withdrawal Rights," tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless previously accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after May 8, 2000. In order for a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from that of the person who tendered such Shares. If Share Certificates to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the tendering stockholder must also submit the serial numbers shown on such Share Certificates to the Depositary, and the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares"), unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer, as set forth in the section of the Offer to 3 Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares," any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the procedures of the Book-Entry Transfer Facility. Withdrawals may not be revoked, and any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered at any time prior to the Expiration Date by following the procedures described in the section of the Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares." All questions as to the form and validity (including the time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding. The information required to be disclosed by Rule 14d-6(d)(1) and Rule 13e-3(e)(i) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided the Purchaser with the Company's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase, the related Letter of Transmittal and, if required, other relevant material will be mailed to record holders of Shares whose names appear on the Company's stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the Company's stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. The receipt of cash for Shares pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes. THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Tendering stockholders of record who tender Shares directly will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. Stockholders who hold their Shares through a bank or a broker should check with such institution as to whether it charges any service fees. The Purchaser will pay the expenses of the Depositary, D.F. King & Co., Inc., who is acting as the information agent (the "Information Agent"), and J.P. Morgan Securities Inc. and The Beacon Group Capital Services, LLC, who are acting as dealer managers (collectively, the "Dealer Managers"), in connection with the Offer. Questions and requests for assistance or for additional copies of the Offer to Purchase, the Letter of Transmittal and all other tender offer materials may be directed to the Information Agent or the Dealer Managers as set forth below, and copies will be furnished promptly at the Purchaser's expense. No fees or commissions will be paid to brokers, dealers or any other persons (other than the Dealer Managers and the Information Agent) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: D.F. King & Co., Inc. 77 Water Street, 20th Floor New York, NY 10005 Bankers and Brokers Call Collect: (212) 269-5550 All Others Call Toll Free: (800) 290-6433 The Dealer Managers for the Offer are: J.P. Morgan Securities Inc. 60 Wall Street New York, NY 10260 (877) 869-0656 The Beacon Group Capital Services, LLC 399 Park Avenue 4 New York, NY 10022 (212) 339-9100 March 10, 2000 EX-99.12(A)(7) 8 GUIDELINES FOR CERTIFICATION OF TAXPAYER ID NUMBER 1 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the Payer. - ------------------------------------------------------------ GIVE THE FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF-- - ------------------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals (joint The actual owner of account) the account or, if combined funds, the first individual on the account(1) 3. Husband and wife (joint account) The actual owner of the account or, if joint funds, the first individual on the account(1) 4. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 5. Adult and minor (joint account) The adult or, if the minor is the only contributor, the minor(1) 6. Account in the name of guardian or The ward, minor or committee for a designated ward, incompetent minor or incompetent person person(3) 7. (a) The usual revocable savings The grantor- trust account (grantor is also trustee(1) trustee) (b) So-called trust account that The actual owner(1) is not a legal or valid trust under State law 8. Sole proprietorship account The owner(4) - ------------------------------------------------------------ - ------------------------------------------------------------ GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF-- - ------------------------------------------------------------ 9. A valid trust, estate or pension The legal entity trust (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, charitable or The organization educational organization account 12. Partnership account held in the The partnership name of the business 13. Association, club or other tax- The organization exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circle the name of the legal trust, estate or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card (for individuals), or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following (Section references are to the Internal Revenue Code): - A corporation. - A financial institution. - An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under section 403(b)(7). - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - An international organization or any agency, or instrumentality thereof. - A registered dealer in securities or commodities registered in the U.S. or possession of the U.S. - A real estate investment trust. - A common trust fund operated by a bank under section 584(a). - An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). - An entity registered at all times under the Investment Company Act of 1940. - A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. - Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - Payments described in section 6049(b)(5) to nonresident aliens. - Payments on tax-free government bonds under section 1451. - Payments made by certain foreign organizations. - Payments made to a nominee. Exempt payees described above should file the Substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A and 6050N, and the regulations under those sections. PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes and to help verify the accuracy of tax returns. Payers must be given the numbers whether or not recipients are required to file a tax return. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to include any portion of an includible payment for interest, dividends or patronage dividends in gross income, such failure is strong evidence of negligence. If negligence is shown, you will be subject to a penalty of 20% on any portion of an underpayment attributable to that failure. (3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.12(A)(10) 9 PRESS RELEASE BY THERMEDICS, INC. ON MARCH 10,2000 1 THERMEDICS COMMENCES CASH TENDER OFFER FOR THERMEDICS DETECTION WOBURN, Mass., March 10, 2000 - Thermedics Inc. (ASE-TMD), a Thermo Electron company, announced today that it has commenced its previously announced cash tender offer of $8.00 per share for all outstanding shares of its Thermedics Detection Inc. subsidiary. The offer and withdrawal rights will expire at midnight on Thursday, April 6, 2000, unless the offer is extended. The tender offer is part of a major reorganization plan under which Thermedics' parent company, Thermo Electron Corporation (NYSE-TMO), will spin in, spin off, and sell various businesses to focus solely on its core measurement and detection instruments business. The complete terms and conditions of the offer are set forth in the offer to purchase, letter of transmittal, and other related materials being filed today with the Securities and Exchange Commission (SEC). Copies of the offer and transmittal letter are being distributed to Thermedics Detection shareholders. The goal of the tender offer is to bring Thermedics' and Thermo Electron's combined equity ownership in Thermedics Detection to at least 90 percent. If Thermedics and Thermo Electron achieve this 90-percent-ownership level, Thermedics Detection would then be spun into Thermedics through a "short-form" merger at the same cash price as the tender offer. Thermedics expects to complete the spin-in of Thermedics Detection in the second quarter of 2000. The tender offer and proposed subsequent short-form merger require SEC clearance of necessary filings. The short-form merger would not require Thermedics Detection board or shareholder approval. Thermedics Inc. develops, manufactures, and markets diverse product lines, including implantable heart-assist devices and other biomedical products, security instruments, and equipment that assures the quality of a wide variety of consumer products and bulk materials. Thermedics is a public subsidiary of Thermo Electron Corporation. More information is available on the Internet at http://www.thermo.com/subsid/tmd1.html. The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth under the heading "Forward-looking Statements" in Exhibit 13 to the company's annual report on Form 10-K for the year ended January 2, 1999. These include risks and uncertainties relating to: government regulation and industry standards, competition and technological change, intellectual property rights, reimbursement by insurers for medical procedures, medical community acceptance of medical devices, availability of materials and components, product liability, international operations, and the company's spinout and acquisition strategies. EX-99.12(A)(11) 10 PRESS RELEASE BY THERMO ELECTRON CORP-MARCH 6,2000 1 Investor Contact: 781-622-1111 Media Contact: 781-622-1252 THERMO ELECTRON ANNOUNCES PROGRESS ON COMPANY REORGANIZATION WALTHAM, Mass., March 6, 2000 - One month following its announcement of an ambitious plan to simplify the company and focus solely on its core measurement and detection instruments business, Thermo Electron Corporation (NYSE-TMO) announced today that it has initiated the first steps required to take three of its subsidiaries private. On Friday, the company's Thermo Instrument Systems Inc. (ASE-THI) subsidiary filed with the Securities and Exchange Commission (SEC) the materials necessary to take its Thermo Optek Corporation and ThermoQuest Corporation businesses private through short-form mergers. The SEC must complete its review of these materials before the mergers can be finalized. Thermo Electron expects these mergers to be completed in the second quarter of 2000. In addition, the company announced that its Thermedics Inc. (ASE-TMD) subsidiary has commenced its previously announced cash tender offer of $15.50 per share for any and all outstanding shares of its Thermo Sentron Inc. business. The offer and withdrawal rights will expire at midnight on Thursday, March 30, 2000, unless the offer is extended. The goal of the tender offer is to bring Thermedics' and Thermo Electron's combined equity ownership in Thermo Sentron to at least 90 percent. If Thermedics and Thermo Electron achieve this 90-percent-ownership level, Thermo Sentron would then be spun into Thermedics through a "short-form" merger at the same cash price as the tender offer. Thermedics expects to complete the spin-in of Thermo Sentron in the second quarter of 2000. The tender offer for Thermo Sentron and proposed subsequent short-form merger require SEC clearance of necessary filings. The short-form merger would not require Thermo Sentron board or shareholder approval. Thermo Electron is pursuing an aggressive timetable to complete its reorganization plan and expects to commence tender offers for Metrika Systems, ONIX Systems, Thermo BioAnalysis, and Thermedics Detection over the next two weeks. Thermo Electron Corporation is a leading provider of analytical and monitoring instruments used in a broad range of applications, from life sciences research to telecommunications to food and beverage production. In addition, Thermo Electron serves the healthcare market through a family of medical products, and is a major producer of paper recycling systems and provides water-clarification and fiber-recovery products and services. As announced on January 31, 2000, the company has initiated a major reorganization that would transform it into one publicly traded entity focused on its core measurement and detection instruments business. The company's medical products and paper recycling businesses will be spun off as dividends to Thermo Electron shareholders. More information is available on the Internet at http://www.thermo.com. OTHER IMPORTANT INFORMATION: The tender offers described in this announcement for the outstanding shares of Thermedics Detection, Metrika Systems, ONIX Systems and Thermo BioAnalysis common stock have not yet commenced. As soon as the tender offers commence, we will file tender offer statements with the Securities and Exchange Commission. You should read the tender offer statements when they become available because they will contain important information about 2 the tender offers. You can obtain the tender offer statements and other documents that are filed with the Securities and Exchange Commission for free on the Securities and Exchange Commission's web site at http://www.sec.gov. If you write us or call us, we will send you these documents for free when they are available: * Tender Offer Statements (except for exhibits) * Offers to Purchase * Letters of Transmittal * Notices of Guaranteed Delivery You can call us at (781) 622-1111 or write to us at: Investor Relations Department Thermo Electron Corporation 81 Wyman Street, P.O. Box 9046 Waltham, MA 02454-9046 The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth under the heading "Forward-looking Statements" in Exhibit 13 to the company's annual report on Form 10-K, for the year ended January 2, 1999. These include risks and uncertainties relating to: the company's spinout and acquisition strategies, competition, international operations, technological change, possible changes in governmental regulations, capital spending and government funding policies, and dependence on intellectual property rights. # # # EX-99.12(B) 11 LOAN AGREEMENT WITH THERMO ELECTRON CORPORATION 1 March 1, 2000 Thermedics Inc. 470 Wildwood Street Woburn, MA 01888 Attn: John Keiser Dear Jack: Reference is made to Thermedics Inc.'s proposed acquisitions of the minority interest investment in each of its majority owned subsidiaries, Thermo Sentron Inc. and Thermedics Detection Inc. In connection with those transactions, Thermo Electron Corporation intends to loan Thermedics up to $20,000,000 for the acquisition of such interests in each of Thermo Sentron and Thermedics Detection. This loan will be available at an interest rate equal to the 30-day Dealer Commercial Paper Rate plus 150 basis points, set at the beginning of each month, provided such rate shall be reduced to the Dealer Commercial Paper Rate plus 50 basis points to the extent of any funds invested by Thermedics' majority owned subsidiaries in Thermo Electron's cash management arrangement. Interest will be due and payable on a monthly basis and the loan will be payable in full on September 1, 2000. If these terms are acceptable to you, please sign the letter as indicated below to evidence your acceptance of the terms. Sincerely, THERMO ELECTRON CORPORATION /s/Theo Melas-Kyriazi Theo Melas-Kyriazi Vice President and Chief Financial Officer ACCEPTED AND AGREED TO: THERMEDICS INC. John T. Keiser /s/John T. Keiser President and CEO EX-99.12(C) 12 OPINION OF J.P. MORGAN 1 January 29, 2000 Board of Directors Thermo Electron Corporation 81 Wyman Street Post Office Box 9046 Waltham, MA 02454-0946 Attention: Dr. Richard Syron Chairman and Chief Executive Officer Board of Directors Thermedics Inc. 470 Wildwood Street Woburn, MA 01888 Attention: Mr. John Keiser President and Chief Executive Officer Ladies and Gentlemen: J.P. Morgan Securities Inc. ("J.P. Morgan") and The Beacon Group Capital Services, LLC (collectively "we", "us" and "our") understand that Thermedics Inc. ("Thermedics"), a subsidiary of Thermo Electron Corporation ("Thermo Electron"), proposes to acquire all of the outstanding common stock, par value $.10 per share, (the "Shares") of Thermedics Detection Inc. (the "Company") not currently held by Thermo Electron or its subsidiaries from the holders thereof at a purchase price of $8.00 per Share, net to the seller in cash (the "Consideration"), pursuant to (i) an offer (the "Offer") by Detection Acquisition, Inc. (the "Purchaser"), an indirect wholly-owned subsidiary of Thermedics, to purchase all of the outstanding Shares and (ii) the subsequent merger (the "Merger") of the Purchaser with and into the Company. You have requested our joint opinion as to the fairness, from a financial point of view, to Thermedics and to Thermo Electron of the Consideration proposed to be paid pursuant to the Offer and the Merger. In arriving at our opinion, we have reviewed (i) certain publicly available information concerning the business of the Company and of certain other companies engaged in businesses deemed to be comparable to those of the Company; (ii) the reported market prices of the securities of certain other companies deemed by us to be comparable to the Company; (iii) publicly available terms of certain transactions involving companies deemed by us to be comparable to the Company and the consideration paid for such companies; (iv) 2 -2- current and historical market prices of the Shares; (v) the audited financial statements of Thermedics, Thermo Electron and the Company for the fiscal year ended January 2, 1999 and the unaudited financial statements of Thermedics, Thermo Electron and the Company for the period ended October 2, 1999; (vi) certain agreements with respect to outstanding indebtedness or obligations of Thermedics, Thermo Electron and the Company; (vii) the terms of other business combinations that we deemed relevant; and (viii) projections for the period from October 3, 1999 through January 1, 2000 and for fiscal 2000 prepared by the Company in November 1999 (the "2000 Projections"). In addition, we have held discussions with certain members of the managements of Thermedics and Thermo Electron with respect to certain aspects of the Offer and the Merger, the past and current business operations of the Company, the financial condition and future prospects and operations of the Company and certain other matters we believed necessary or appropriate to our inquiry. We did not hold any discussions with the management of the Company. We have reviewed such other financial studies and analyses and considered such other information as we deemed appropriate for the purposes of this opinion. However, the 2000 Projections were the only information prepared by the Company which we reviewed. In giving our opinion, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information that was publicly available or was furnished to, or discussed with, us, by Thermedics, Thermo Electron or the Company or was otherwise reviewed by us, and we have not assumed any responsibility or liability therefor. We have also assumed that there have been no material changes in the Company's financial condition, results of operations, business or prospects since the date of the most recent financial statements made available to us. We have not conducted, and we have not assumed any responsibility for conducting, any valuation, appraisal or physical inspection of any assets or liabilities (contingent or otherwise), nor have any such valuations or appraisals been provided to us. In relying on the financial analyses, projections and estimates provided to, or discussed with, us, we have assumed that they have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future financial performance of the Company. We have relied as to all legal matters relevant to rendering our opinion upon the advice of counsel. Our opinion is necessarily based on economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. It should be understood that subsequent developments may affect the conclusions in this opinion and that we do not have any obligation to update, revise or reaffirm this opinion. We have acted as financial advisors to Thermedics and Thermo Electron with respect to the proposed Offer and Merger and will receive a fee from Thermo Electron for our services. We have also acted as financial advisors to Thermo Electron for the purpose of advising Thermo Electron in connection with its strategic alternatives, including the proposed reorganization of Thermo Electron and its subsidiaries. As part of the proposed reorganization of Thermo Electron, it is contemplated that Thermo Electron will acquire the 3 -3- publicly-held minority interest in Thermedics. We will receive separate fees for services with respect to other elements of Thermo Electron's reorganization, including acting as financial advisors to Thermo Electron in connection with the acquisition of the publicly-held minority interest in Thermedics. These other fees include a minimum retainer for each of us and additional compensation if some or all of the other elements of Thermo Electron's reorganization are completed. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities of Thermedics, Thermo Electron or the Company and their affiliates for their own account or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities. On the basis of and subject to the foregoing, it is our opinion as of the date hereof that the Consideration to be paid pursuant to the Offer and the Merger is fair, from a financial point of view, to Thermedics and to Thermo Electron. This letter is provided to the Boards of Directors of Thermedics and Thermo Electron in connection with and for the purposes of their evaluation of the Offer and the Merger. This opinion does not constitute a recommendation to any stockholder of the Company as to whether such stockholder should tender its Shares in the Offer. This opinion may not be disclosed, referred to, or communicated (in whole or in part) to any third party for any purpose whatsoever except with our prior written consent in each instance. We hereby consent to the filing of this opinion as an exhibit to the Tender Offer Statement on Schedule TO to be filed by Thermedics, Thermo Electron and certain of their subsidiaries and to the provision of this opinion to persons who request it as contemplated by the Schedule TO. Very truly yours, J.P. MORGAN SECURITIES INC. /s/ J.P. Morgan Securities Inc. THE BEACON GROUP CAPITAL SERVICES, LLC /s/ The Beacon Group Capital Services, LLC EX-99.12(G) 13 SLIDE PRESENTATION OF THERMO ELECTRON TO ANALYSTS 1 [LOGO] Thermo Electron --------------------------------------------------- 2 THE NEW THERMO ELECTRON - --------------------------------------------------------------------------- > Vision > Focus > Clarity > Growth 1 [LOGO] Thermo Electron 3 SHAREHOLDER VALUE - --------------------------------------------------------------------------- Medical > Dividend Products Existing New > Stock > Thermo Electron Thermo Shareholders Thermo Fibertek > Dividend 2 [LOGO] Thermo Electron 4 OUR GOAL - --------------------------------------------------------------------------- To channel all our resources - financial, human, technological - to become the preeminent instrument company in the world. 3 [LOGO] Thermo Electron 5 WHY INSTRUMENTS? - --------------------------------------------------------------------------- > Critical mass > Strong market presence > Experienced management > Strong cash flow > Broad technology platform 4 [LOGO] Thermo Electron 6 THE PLAN - --------------------------------------------------------------------------- > Sell businesses totaling $1.2 billion in revenues > Spin off equity of Thermo Fibertek and new Medical Products company > Spin in instrument companies 5 [LOGO] Thermo Electron 7 MAJOR DIVESTITURES - --------------------------------------------------------------------------- > Thermo Cardiosystems > Trex Medical > Thermo TerraTech > Thermo Coleman > Peek 6 [LOGO] Thermo Electron 8 PLAN PROCEEDS - --------------------------------------------------------------------------- Proceeds from Divestitures $ 1.0 BILLION Cost of Spin Ins $(0.4 BILLION) ------------- Net Increase in Cash $ 0.6 BILLION Invest all proceeds in new instrument company 7 [LOGO] Thermo Electron 9 SPIN OFFS - --------------------------------------------------------------------------- > Market leadership > Experienced management > Independent market identities > Balanced product mix > Strong growth prospects 8 [LOGO] Thermo Electron 10 MEDICAL PRODUCTS - --------------------------------------------------------------------------- Thermo Biomedical Thermedics Medical 1999E Revenues: $335 million 9 [LOGO] Thermo Electron 11 MEDICAL PRODUCTS - --------------------------------------------------------------------------- [Collage of photos representing the various businesses within the new Medical Products company, including neurodiagnostic testing, respiratory care, infant, audiology products, wireless patient monitoring, and medical polymers.] 10 [LOGO] Thermo Electron 12 THERMO FIBERTEK - --------------------------------------------------------------------------- Thermo Fibertek Thermo Fibergen 1999E Revenues: $225 million 11 [LOGO] Thermo Electron 13 THERMO FIBERTEK - --------------------------------------------------------------------------- [Collage of photos representing the various businesses within the new Thermo Fibertek company, including papermaking and recycling equipment, water-management systems, waste-recovery, and fiber-based consumer products and composites.] 12 [LOGO] Thermo Electron 14 THERMO ECOTEK - --------------------------------------------------------------------------- > Non-core asset > Maximize value > Goal: spin off in 1-2 years 13 [LOGO] Thermo Electron 15 - --------------------------------------------------------------------------- Thermo Electron will be a completely focused instrument company in 2001 14 [LOGO] Thermo Electron 16 THERMO INSTRUMENT REVENUES - --------------------------------------------------------------------------- (in millions) [Bar chart (without actual revenue numbers) showing increasing revenues from the Thermo Instrument business from 1986 to 1999 estimate, indicating in 1998 actual revenues of $1.66 billion.] 15 [LOGO] Thermo Electron 17 THERMO INSTRUMENT EBITDA - --------------------------------------------------------------------------- (in thousands) [Bar chart (without actual EBITDA numbers) showing increasing EBITDA for the Thermo Instrument business from 1986 to 1999 estimate, indicating in 1998 actual EBITDA of $294 million.] 16 [LOGO] Thermo Electron 18 THERMO INSTRUMENT STOCK PRICE - --------------------------------------------------------------------------- (adjusted for splits) [Line graph generally illustrating range of Thermo Instrument stock price (without providing specific stock prices) from 1986 to present ranging from approximately $2.00 per share to approximately $36.00 per share during the time period shown.] 17 [LOGO] Thermo Electron 19 GROWTH PLAN 2000 - --------------------------------------------------------------------------- > Manage according to market served > New incentives for managers > Divest of slow-growth units > Continue strategic acquisitions > Initiate e-commerce 18 [LOGO] Thermo Electron 20 OLD ORGANIZATION - --------------------------------------------------------------------------- [Graphic of partial depiction of old organizational chart of Thermo Instrument Systems.] 19 [LOGO] Thermo Electron 21 NEW ORGANIZATION - --------------------------------------------------------------------------- 1999E Revenues: $2.3 billion Life Measurement Sciences Photonics and Control 1999E Revenues 1999E Revenues 1999E Revenues $800 million $800 million $700 million 20 [LOGO] Thermo Electron 22 LIFE SCIENCES - GOALS - --------------------------------------------------------------------------- > Internal revenue growth >10% > R&D commitment 8-10% > Technology acquisitions > Maintain 16% ROS 21 [LOGO] Thermo Electron 23 PHOTONICS - GOALS - --------------------------------------------------------------------------- > Internal revenue growth 7-8% > R&D commitment - Telecom >10% - Balance 7% > Instrument acquisitions > Maintain strong cash flow > Improve ROS to 13% 22 [LOGO] Thermo Electron 24 MEASUREMENT AND CONTROL - GOALS - --------------------------------------------------------------------------- > Internal revenue growth 4-5% > R&D commitment 4-5% > Double ROS to 10% > Focus on cash flow > Divestitures 23 [LOGO] Thermo Electron 25 NEW INCENTIVES FOR MANAGERS - --------------------------------------------------------------------------- > New bonus plan - Growth - Cash - Combination > Increase cash compensation > Continue options in parent 24 [LOGO] Thermo Electron 26 DIVEST SLOW-GROWTH UNITS - --------------------------------------------------------------------------- > Detailed review of measurement and control sector > Sale of - Gould - NIS - Pharos Marine 25 [LOGO] Thermo Electron 27 RECENT ACQUISITIONS - --------------------------------------------------------------------------- Spectra Physics AB Feb. 1999 BioStar Nov. 1998 - ----------------------------- ----------------------------- Laser-based instruments Point-of-Care Diagnostics ----------------------------- Purchase Price $351M Current Market Value SPLI $450-500M Other $350M Interactiva Oct. 1999 FLIR $ 70M ----------------------------- - ----------------------------- Biochips - e-commerce Total Value $870-920M ----------------------------- 26 [LOGO] Thermo Electron 28 EBUSINESS - WWW.INFORMATION2.NET - --------------------------------------------------------------------------- Competitive Advantages > Leverage knowledge assets > Breadth of "touch points" > Mining: metals to genomes > One-to-one marketing 27 [LOGO] Thermo Electron 29 WELL-POSITIONED VS. COMPETITORS - --------------------------------------------------------------------------- [Segmented bar chart showing how Thermo Instrument and its competitors compare in terms of the industries they serve.] Source McKinsey & Co. Thermo Instrument Life Sciences 40% Communications 9% Environmental 17% Industrial 34% Agilent Life Sciences 7% Communications 50% Environmental 5% Non Instrument 38% Waters Life Sciences 60% Environmental 40% Varian Life Sciences 35% Environmental 35% Non Instrument 30% Perkin Elmer Life Sciences 22% Environmental 13% Industrial 26% Non Instrument 39% 28 [LOGO] Thermo Electron 30 VALUATION - --------------------------------------------------------------------------- EV/EBITDA [Bar chart showing how Thermo Instrument has been valued by industry analysts in terms of EV/EBITDA compared to its competitors based on trailing 12 months EBITDA.] Source: Industry Analysts Chart reflects ratio of EV (Enterprise Value)/EBITDA as follows: THI 8.0 Agilent 24.0 Waters 19.3 Varian 20.2 Perkin Elmer 12.0 Mean 18.9 29 [LOGO] Thermo Electron 31 INSTRUMENTS PROVIDE KNOWLEDGE - --------------------------------------------------------------------------- You cannot improve and control unless you can measure and detect 30 [LOGO] Thermo Electron 32 OLD STRUCTURE - --------------------------------------------------------------------------- [Graphic showing the old corporate structure of Thermo Electron indicating Thermo Electron subsidiaries with minority investors as follows:] Thermo Electron Thermo Instrument Thermo Quest ONIX Systems Thermo Spectra Thermo Optek Thermo BioAnalysis Metrika Systems Thermo Vision Thermo Coleman Thermo Information Solutions Thermo Biomedical Thermo Ecotek Thermo Trilogy Thermedics Thermo Sentron Thermedics Detection Thermo Cardiosystems Thermo Voltek Thermo Trex Trex Medical Trex Communications ThermoLase Thermo Fibertek Thermo Fibergen Thermo Power Thermolyte Thermo Terra Tech The Randers Group Thermo EuroTech Thermo Retec 31 [LOGO] Thermo Electron 33 NEW STRUCTURE - --------------------------------------------------------------------------- The term Thermo Electron superimposed over image of man looking through a telescope, representing new Thermo corporate structure. 32 [LOGO] Thermo Electron 34 THE NEW THERMO ELECTRON - --------------------------------------------------------------------------- > Market focus > Simple structure > Tightly managed > Dedicated resources 33 [LOGO] Thermo Electron -----END PRIVACY-ENHANCED MESSAGE-----