-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GdbtZdbKazJZR1CvplD57rUtA9w//v9THjZMktTxRaJfLKhDiNDfM/zC6w2DXo1h PNTh5qFs0ofOLeaY0UVCpg== 0000813895-95-000002.txt : 19950509 0000813895-95-000002.hdr.sgml : 19950509 ACCESSION NUMBER: 0000813895-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950401 FILED AS OF DATE: 19950508 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMO POWER CORP CENTRAL INDEX KEY: 0000813895 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 042891371 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10573 FILM NUMBER: 95535084 BUSINESS ADDRESS: STREET 1: 81 WYMAN ST STREET 2: PO BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02254-9046 BUSINESS PHONE: 6176221000 MAIL ADDRESS: STREET 1: 81 WYMAN STREET CITY: WALTHAM STATE: MA ZIP: 02254 FORMER COMPANY: FORMER CONFORMED NAME: TECOGEN INC DATE OF NAME CHANGE: 19920703 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ------------------------------------------ FORM 10-Q (mark one) [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarter ended April 1, 1995. [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Commission File Number 1-10573 THERMO POWER CORPORATION (Exact name of Registrant as specified in its charter) Massachusetts 04-2891371 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 81 Wyman Street, P.O. Box 9046 Waltham, Massachusetts 02254-9046 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 622-1000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Class Outstanding at April 28, 1995 ---------------------------- ----------------------------- Common Stock, $.10 par value 12,367,056 PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION PART I - Financial Information Item 1 - Financial Statements (a) Consolidated Balance Sheet - Assets as of April 1, 1995 and October 1, 1994 (In thousands) April 1, October 1, 1995 1994 -------- ---------- Current Assets: Cash and cash equivalents $ 30,794 $ 7,474 Available-for-sale investments, at quoted market value (amortized cost of $12,457) (includes $1,397 of related party investments) (Note 2) 12,909 - Short-term investments (includes $800 of related party investments) - 20,405 Accounts receivable, less allowances of $578 and $590 13,378 13,638 Unbilled contract costs and fees 5,917 5,236 Inventories: Raw materials and supplies 11,881 11,568 Work in process and finished goods 3,773 3,294 Prepaid expenses and income taxes 3,393 3,138 -------- -------- 82,045 64,753 -------- -------- Rental Assets, at Cost 4,789 4,543 Less: Accumulated depreciation and amortization 435 348 -------- -------- 4,354 4,195 -------- -------- Property, Plant and Equipment, at Cost 14,169 13,410 Less: Accumulated depreciation and amortization 6,332 5,731 -------- -------- 7,837 7,679 -------- -------- Long-term Available-for-sale Investments, at Quoted Market Value (amortized cost of $471) (includes $248 invested in parent company common stock) (Note 2) 563 - -------- -------- Long-term Investments (includes $18 invested in parent company common stock) - 471 -------- -------- Cost in Excess of Net Assets of Acquired Companies 5,451 5,523 -------- -------- $100,250 $ 82,621 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. 2PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION (a) Consolidated Balance Sheet - Liabilities and Shareholders' Investment as of April 1, 1995 and October 1, 1994 (In thousands except share amounts) April 1, October 1, 1995 1994 -------- ---------- Current Liabilities: Accounts payable $ 9,392 $ 9,929 Accrued payroll and employee benefits 2,370 2,466 Accrued warranty costs 2,914 3,368 Customer advances 682 1,139 Billings in excess of contract costs and fees 676 562 Accrued income taxes 572 924 Other accrued expenses 2,693 2,948 Due to parent company 329 274 -------- -------- 19,628 21,610 -------- -------- Deferred Income Taxes 224 192 -------- -------- Long-term Obligations 323 344 -------- -------- Common Stock of Subsidiary Subject to Redemption ($18,450 redemption value) (Note 3) 17,288 - -------- -------- Shareholders' Investment: Common stock, $.10 par value, 30,000,000 shares authorized; 12,433,473 and 12,425,273 shares issued 1,243 1,243 Capital in excess of par value 53,328 53,211 Retained earnings 8,226 6,634 Treasury stock at cost, 69,603 and 121,140 shares (363) (613) Net unrealized gain on available-for-sale investments (Note 2) 353 - -------- -------- 62,787 60,475 -------- -------- $100,250 $ 82,621 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. 3PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION (b) Consolidated Statement of Income for the three months ended April 1, 1995 and April 2, 1994 (In thousands except per share amounts) Three Months Ended -------------------- April 1, April 2, 1995 1994 -------- -------- Revenues $24,912 $22,014 ------- ------- Costs and Operating Expenses: Cost of revenues 19,419 17,619 Selling, general and administrative expenses 3,807 3,390 Research and development expenses 716 433 ------- ------- 23,942 21,442 ------- ------- Operating Income 970 572 Interest Income 431 338 Interest Expense (6) (7) Gain on Sale of Investments (includes gain of $285 on sale of related party investments in fiscal 1994) - 282 ------- ------- Income Before Provision for Income Taxes and Minority Interest Expense 1,395 1,185 Provision for Income Taxes 555 456 Minority Interest Expense 35 - ------- ------- Net Income $ 805 $ 729 ======= ======= Earnings per Share $ .07 $ .06 ======= ======= Weighted Average Shares 12,356 12,294 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 4PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION (b) Consolidated Statement of Income for the six months ended April 1, 1995 and April 2, 1994 (In thousands except per share amounts) Six Months Ended -------------------- April 1, April 2, 1995 1994 -------- -------- Revenues $47,226 $41,789 ------- ------- Costs and Operating Expenses: Cost of revenues 36,467 33,609 Selling, general and administrative expenses 7,528 6,471 Research and development expenses 1,246 755 ------- ------- 45,241 40,835 ------- ------- Operating Income 1,985 954 Interest Income 731 706 Interest Expense (includes $37 related to note to parent company in fiscal 1994) (11) (49) Gain (Loss) on Sale of Investments (includes gain of $616 on sale of related party investments in fiscal 1994) (38) 600 ------- ------- Income Before Provision for Income Taxes and Minority Interest Expense 2,667 2,211 Provision for Income Taxes 1,040 851 Minority Interest Expense 35 - ------- ------- Net Income $ 1,592 $ 1,360 ======= ======= Earnings per Share $ .13 $ .11 ======= ======= Weighted Average Shares 12,342 12,282 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 5PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION (c) Consolidated Statement of Cash Flows for the six months ended April 1, 1995 and April 2, 1994 (In thousands) Six Months Ended -------------------- April 1, April 2, 1995 1994 -------- -------- Operating Activities: Net income $ 1,592 $ 1,360 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 810 642 Provision for losses on accounts receivable 27 29 (Gain) loss on sale of investments 38 (600) Minority interest expense 35 - Changes in current accounts: Accounts receivable 233 (1,233) Inventories and unbilled contract costs and fees (1,473) (613) Prepaid expenses and income taxes (255) (520) Accounts payable (537) 1,292 Other current liabilities (1,603) 142 ------- ------- Net cash provided by (used in) operating activities (1,133) 499 ------- ------- Investing Activities: Proceeds from sale and maturities of available-for-sale investments 7,687 - Decrease in short-term investments - 4,356 Increase in rental assets (265) - Purchases of property, plant and equipment (813) (291) Proceeds from sale of property, plant and equipment 23 - Purchases of long-term investments - (453) Other 222 - ------- ------- Net cash provided by investing activities 6,854 3,612 ------- ------- Financing Activities: Net proceeds from issuance of Company and subsidiary common stock (Note 3) 17,620 239 Repayment of long-term obligations (21) (3,036) ------- ------- Net cash provided by (used in) financing activities 17,599 (2,797) ------- ------- Increase in Cash and Cash Equivalents 23,320 1,314 Cash and Cash Equivalents at Beginning of Period 7,474 6,154 ------- ------- Cash and Cash Equivalents at End of Period $30,794 $ 7,468 ======= ======= Cash Paid For: Interest $ 11 $ 49 Income taxes $ 1,525 $ 569 The accompanying notes are an integral part of these consolidated financial statements. 6PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION (d) Notes to Consolidated Financial Statements - April 1, 1995 1. General The interim consolidated financial statements have been prepared by Thermo Power Corporation (the Company) without audit and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of (a) the results of operations for the three- and six-month periods ended April 1, 1995 and April 2, 1994, (b) the financial position at April 1, 1995, and (c) the cash flows for the six-month periods ended April 1, 1995 and April 2, 1994. Interim results are not necessarily indicative of results for a full year. The consolidated balance sheet presented as of October 1, 1994, has been derived from the consolidated financial statements that have been audited by the Company's independent public accountants. The consolidated financial statements and notes are presented as permitted by Form 10-Q, and do not contain certain information included in the annual financial statements and notes of the Company. The consolidated financial statements and notes included herein should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended October 1, 1994, filed with the Securities and Exchange Commission. 2. Available-for-sale Investments Effective October 2, 1994, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities." In accordance with SFAS No. 115, the Company's debt and marketable equity securities are considered "Available-for-sale investments" in the accompanying balance sheet and are carried at market value, with the difference between cost and market value, net of related tax effects, recorded currently as a component of shareholders' investment titled "Net unrealized gain on available-for-sale investments." "Net unrealized gain on available-for-sale investments" consists of (1) an unrealized gain, net of related tax effects, of $268,000 that was recorded as an effect of change in accounting principle adjustment and (2) an unrealized gain, net of related tax effects, of $85,000 relating to the increase in market value of available-for-sale investments for the six-month period ended April 1, 1995. The aggregate market value, cost basis, and gross unrealized gains and losses of short- and long-term available-for-sale investments by major security type, as of April 1, 1995, are as follows: Gross Gross Market Cost Unrealized Unrealized (In thousands) Value Basis Gains Losses -------------------------------------------------------------------------- Tax-exempt securities $ 6,273 $ 6,301 $ - $ 28 Government agency securities 5,083 5,183 - 100 Corporate bonds 1,385 805 580 - Other 731 639 230 138 ------- ------- ------- ------- $13,472 $12,928 $ 810 $ 266 ======= ======= ======= ======= 7PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION (d) Notes to Consolidated Financial Statements - April 1, 1995 (continued) 2. Available-for-sale Investments (continued) Short- and long-term available-for-sale investments in the accompanying balance sheet at April 1, 1995, include $4,296,000 with contractual maturities of one year or less, $8,613,000 with contractual maturities of more than one year through five years, and $563,000 with contractual maturities of more than five years. Actual maturities may differ from contractual maturities as a result of the Company's intent to sell these securities prior to maturity and as a result of put and call options that enable either the Company and/or the issuer to redeem these securities at an earlier date. The cost of available-for-sale investments that were sold was based on specific identification in determining realized losses recorded in the accompanying statement of income. Loss on sale of investments for the six-month period ended April 1, 1995, resulted from gross realized losses relating to the sale of available-for-sale investments. 3. Transaction in Stock of Subsidiary On March 6, 1995, the Company's wholly owned subsidiary, ThermoLyte Corporation (ThermoLyte), sold 1,845,000 units, each unit consisting of one share of ThermoLyte common stock, $.001 par value, and one redemption right, at $10.00 per unit, for net proceeds of approximately $17.3 million. Holders of the common stock purchased in the offering will have the option to require ThermoLyte to redeem in December 1998 and 1999 any or all of their shares at $10.00 per share. The redemption rights are guaranteed on a subordinated basis by Thermo Electron Corporation (Thermo Electron). In the event a payment is made by Thermo Electron under its guarantee, the Company has agreed to reimburse Thermo Electron. The difference between the redemption value and the original carrying amount of "Common stock subject to redemption" is accreted using the straight-line method over the period ending December 1998, which corresponds to the first redemption period. The accretion is charged to "Minority interest expense." ThermoLyte is developing a line of propane-fueled lighting products, including flashlights, area lights or lanterns, and hazard lights, as well as researching propane-fueled power supplies. Following the offering, the Company owned 78% of ThermoLyte's outstanding common stock. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Description of Business Industrial Refrigeration Systems -------------------------------- The Company's FES division supplies standard and custom-designed refrigeration systems used primarily by the food-processing, petrochemical, and pharmaceutical industries. NuTemp, Inc. (NuTemp), which was acquired in May 1994, rents and sells remanufactured and new equipment for industrial refrigeration applications in the food-processing, petrochemical, and 8PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Description of Business (continued) pharmaceutical industries, and for commercial cooling applications in institutions and commercial buildings, as well as for service contractors. Historically, the demand for NuTemp's equipment is highest in the summer period. Engines ------- The Company's Crusader Engines division (Crusader) manufactures gasoline engines for recreational boats and natural gas-fueled engines for vehicle, cooling, pumping, refrigeration, and other industrial applications. Cooling and Cogeneration Systems -------------------------------- The Company's Tecogen division designs, develops, markets, and services packaged cooling and cogeneration systems fueled principally by natural gas for sale to commercial, institutional, industrial, and multi-unit residential users. Certain large-capacity cooling systems are manufactured by FES, and the cogeneration systems are manufactured by Crusader. Through this segment, the Company also conducts research and development on advanced systems for clean-coal combustion and other high-efficiency gas-fueled devices. The Company's research and development capability and expertise in engine, instrumentation, control, and heat-recovery technologies have enabled it to obtain support from outside sponsors in industry and government, develop new products, and support existing products. The Company's revenues by industry segment for the three- and six-month periods ended April 1, 1995 and April 2, 1994, are shown in the following table. Three Months Ended Six Months Ended ------------------ ------------------ April 1, April 2, April 1, April 2, (In thousands) 1995 1994 1995 1994 -------------------------------------------------------------------------- Industrial Refrigeration Systems $15,263 $14,302 $29,441 $26,485 Engines 6,526 4,816 11,681 9,710 Cooling and Cogeneration Systems 3,843 3,443 7,223 6,464 Intersegment sales elimination (720) (547) (1,119) (870) ------- ------- ------- ------- $24,912 $22,014 $47,226 $41,789 ======= ======= ======= ======= 9PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Results of Operations Second Quarter Fiscal 1995 Compared With Second Quarter Fiscal 1994 ------------------------------------------------------------------- Total revenues increased 13% to $24,912,000 in the second quarter of fiscal 1995 from $22,014,000 in the second quarter of fiscal 1994. Industrial Refrigeration Systems segment revenues increased to $15,263,000 in 1995 from $14,302,000 in 1994 due to the inclusion of $1,864,000 in revenues from NuTemp, which was acquired in May 1994, offset in part by a decrease in revenues from custom-engineered refrigeration packages at the Company's FES division due to a decrease in demand. Engines segment revenues increased 36% to $6,526,000 in 1995 from $4,816,000 in 1994. The 1995 results include a $2,250,000 increase in revenues from Crusader's inboard marine engine-related products due to increased demand. The 1994 results include $481,000 in revenues from sterndrive marine engine-related products. The Company's sterndrive customer exited that market in fiscal 1994. Cooling and Cogeneration Systems segment revenues increased to $3,843,000 in 1995 from $3,443,000 in 1994 due primarily to the inclusion of a $312,000 fee received from one of the Company's packaged cogeneration systems distributors to satisfy the financial obligations under a minimum purchase contract and an increase of $303,000 in revenues from sponsored research and development contracts. These increases were offset in part by a decrease in revenues from packaged cogeneration systems and, to a lesser extent, gas-fueled cooling systems. The gross profit margin increased to 22% in the second quarter of fiscal 1995 from 20% in the second quarter of fiscal 1994. The gross profit margin for the Industrial Refrigeration Systems segment was 22% in 1995, compared with 18% in 1994. The increase is due primarily to the inclusion of higher-margin NuTemp revenues and, to a lesser extent, an increase in margins at FES due to higher-margin sales and lower warranty expenses in 1995, compared with 1994. The gross profit margin for the Engines segment decreased to 13% in 1995 from 14% in 1994 due to a shift in the sales mix of marine engine-related products. The gross profit margin for the Cooling and Cogeneration Systems segment increased to 33% in 1995 from 32% in 1994 due to the fee received from one of the Company's packaged cogeneration systems distributors as discussed above. Selling, general and administrative expenses as a percentage of revenues were 15% in the second quarters of both fiscal 1995 and 1994. Research and development expenses increased to $716,000 in 1995 from $433,000 in 1994, due primarily to development costs associated with gas-fueled lighting products and, to a lesser extent, natural gas-engine products. Interest income increased to $431,000 in the second quarter of fiscal 1995 from $338,000 in the second quarter of fiscal 1994, reflecting higher prevailing interest rates in 1995 and, to a lesser extent, interest income earned on the proceeds from ThermoLyte Corporation's March 1995 private placement (see Note 3 to Consolidated Financial Statements). The increase was offset in part by lower average invested amounts as a result of the cash expended for the acquisition of NuTemp in May 1994. 10PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) First Six Months Fiscal 1995 Compared With First Six Months Fiscal 1994 ----------------------------------------------------------------------- Total revenues increased 13% to $47,226,000 in the first six months of fiscal 1995 from $41,789,000 in the first six months of fiscal 1994. Industrial Refrigeration Systems segment revenues increased 11% to $29,441,000 in 1995 from $26,485,000 in 1994 due to the inclusion of $4,450,000 in revenues from NuTemp, offset in part by a decrease in revenues from custom-engineered refrigeration packages at the Company's FES division due to a decrease in demand. Engines segment revenues increased 20% to $11,681,000 in 1995 from $9,710,000 in 1994. The 1995 results include a $3,624,000 increase in revenues from Crusader's inboard marine engine-related products due to increased demand. The 1994 results include $1,490,000 in revenues from sterndrive marine engine-related products. Cooling and Cogeneration Systems segment revenues increased to $7,223,000 in 1995 from $6,464,000 in 1994 due primarily to the inclusion of a $1,187,000 fee received from one of the Company's packaged cogeneration systems distributors in lieu of that distributor making minimum purchases required by contract. This increase was offset in part by a decrease in revenues from packaged cogeneration systems and, to a lesser extent, gas-fueled cooling systems. The gross profit margin increased to 23% in the first six months of fiscal 1995 from 20% in the first six months of fiscal 1994. The gross profit margin for the Industrial Refrigeration Systems segment increased to 24% in 1995 from 19% in 1994 due primarily to the reasons discussed in the results of operations for the second quarter. The gross profit margin for the Engines segment remained relatively unchanged at 12% in 1995, compared with 13% in 1994. The gross profit margin for the Cooling and Cogeneration Systems segment increased to 33% in 1995 from 30% in 1994, due primarily to the fee received from one of the Company's packaged cogeneration systems distributors as discussed above. Selling, general and administrative expenses as a percentage of revenues remained relatively unchanged at 16% in the first six months of fiscal 1995, compared with 15% in the first six months of fiscal 1994. Research and development expenses increased to $1,246,000 in 1995 from $755,000 in 1994, due primarily to development costs associated with gas-fueled lighting products and, to a lesser extent, natural gas-engine products. Interest income increased to $731,000 in the first six months of fiscal 1995 from $706,000 in the first six months of fiscal 1994 due to the reasons discussed in the results of operations for the second quarter. Interest expense decreased to $11,000 in 1995 from $49,000 in 1994 due to the repayment of a $3,000,000 principal amount 6.2% subordinated convertible note to Thermo Electron Corporation (Thermo Electron) in the first quarter of fiscal 1994. 11PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Financial Condition Liquidity and Capital Resources ------------------------------- Working capital was $62,417,000 at April 1, 1995, compared with $43,143,000 at October 1, 1994. Included in working capital were cash, cash equivalents, and short-term investments of $43,703,000 at April 1, 1995 and $27,879,000 at October 1, 1994. During the first six months of fiscal 1995, $1,133,000 of cash was used in operating activities. In March 1995, the Company's ThermoLyte Corporation subsidiary completed a private placement for net proceeds of approximately $17.3 million (see Note 3 to Consolidated Financial Statements). As of April 1, 1995, the Company's short-term available-for-sale investments included subordinated convertible debentures issued by Thermedics Inc. (Thermedics) that were purchased on the open market for $651,000 and have a market value of $1,397,000. Thermedics is a majority-owned subsidiary of Thermo Electron. As of April 1, 1995, the Company owned 7,313 shares of Thermo Electron common stock (adjusted to reflect a three-for-two stock split) that were purchased for $18,000 and have a market value of $248,000. The Company currently expects to make capital expenditures of approximately $1,500,000 during the remainder of fiscal 1995, primarily for machinery and equipment. The Company believes its existing resources are sufficient to meet the capital requirements of its existing operations for the foreseeable future. PART II - Other Information Item 4 - Submission of Matters to a Vote of Security Holders On March 14, 1995, at the Annual Meeting of Shareholders, the shareholders elected seven incumbent directors to a one-year term expiring in 1996. The directors reelected at the meeting were: Marshall J. Armstrong, Peter O. Crisp, George N. Hatsopoulos, John N. Hatsopoulos, Robert C. Howard, Donald E. Noble, and Paul E. Tsongas. Messrs. Armstrong, G. Hatsopoulos, J. Hatsopoulos, and Howard each received 9,921,553 shares voted in favor of his election and 6,174 shares voted against. Mr. Crisp received 9,920,853 shares voted in favor of his election and 6,874 shares voted against; Mr. Noble received 9,915,128 shares voted in favor of his election and 12,599 shares voted against; and Mr. Tsongas received 9,922,253 shares voted in favor of his election and 5,474 shares voted against. No broker nonvotes were recorded on the election of directors. The shareholders also approved a proposal to amend the directors stock option plan to change the formula for the award of stock options to purchase common stock of the Company to its outside Directors and also to provide for the automatic grant of stock options to purchase common stock of majority-owned subsidiaries of the Company to its outside directors as follows: 9,866,829 shares voted in favor, 48,288 shares voted against, and 12,610 shares abstained. No broker nonvotes were recorded on this proposal. Item 6 - Exhibits See Exhibit Index on the page immediately preceding exhibits. 12PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized as of the 5th day of May 1995. THERMO POWER CORPORATION Paul F. Kelleher --------------------------- Paul F. Kelleher Chief Accounting Officer John N. Hatsopoulos --------------------------- John N. Hatsopoulos Chief Financial Officer 13PAGE FORM 10-Q April 1, 1995 THERMO POWER CORPORATION EXHIBIT INDEX Exhibit Number Description of Exhibit Page ------- ---------------------------------------------------- ---- 10.1 Directors Stock Option Plan of the Registrant, as amended. 27 Financial Data Schedule. EX-10.1 2 Exhibit 10.1 THERMO POWER CORPORATION DIRECTORS STOCK OPTION PLAN As amended and restated effective as of January 1, 1995 1. Purpose The purpose of this Directors Stock Option Plan (the "Plan") of Thermo Power Corporation (the "Company") is to encourage ownership in the Company by outside directors of the Company whose services are considered essential to the Company's growth and progress and to provide them with a further incentive to become directors and to continue as directors of the Company. The Plan is intended to be a nonstatutory stock option plan. 2. Administration The Board of Directors, or a Committee (the "Committee") consisting of two or more directors of the Company appointed by the Board of Directors, shall supervise and administer the Plan. Grants of stock options under the Plan and the amount and nature of the options to be granted shall be automatic in accordance with Section 5. However, all questions of interpretation of the Plan or of any stock options granted under it shall be determined by the Board of Directors or the Committee and such determination shall be final and binding upon all persons having an interest in the Plan. 3. Participation in the Plan Directors of the Company who are not employees of the Company or any subsidiary or parent of the Company shall be eligible to participate in the Plan. Directors who receive grants of stock options in accordance with this Plan are sometimes referred to herein as "Optionees." 4. Stock Subject to the Plan The maximum number of shares that may be issued under the Plan shall be twenty-five thousand (25,000) shares of the Company's $.10 par value Common Stock (the "Common Stock"), and twenty-five thousand (25,000) shares of the common stock of each Spinout Subsidiary (as defined in Section 5(B)) as of the date of the Annual Meeting of Stockholders on which options to purchase such common stock are first granted to eligible Directors as provided in Section 5(B), each subject to adjustment as provided in Section 9. Shares to be issued upon the exercise of options granted under the Plan may be either authorized but unissued shares or shares held by the Company in its treasury. If any option expires or terminates for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for options thereafter to be granted. A-1PAGE 5. Terms and Conditions A. Annual Stock Option Grants Each Director of the Company who meets the requirements of Section 3 and who is holding office immediately following the Annual Meeting of Stockholders, commencing with the Annual Meeting of Stockholders held in calendar year 1995, shall be granted an option to purchase 1,000 shares of Company common stock at the close of business on the date of such Annual Meeting. Options granted under this Subsection B shall be exercisable as to 100% of the shares subject to the option as set forth in Section 5(C)(1), but shares acquired upon exercise are subject to repurchase by the Company at the exercise price in the event that the Optionee ceases to serve as a director of the Company, Thermo Electron Corporation ("Thermo Electron") or any subsidiary of Thermo Electron, prior to the first anniversary of the grant date, for any reason other than death. B. Subsidiary Stock Option Grants. Each Director of the Company who meets the requirements of Section 3 and this Section 5(B), from time to time in accordance with this Section 5(B), shall be granted an option to purchase shares of the common stock of each majority-owned subsidiary of the Company, the common stock of which shall have become publicly traded or a portion of which shall have been sold primarily to third parties in a private placement or other arms-length transaction (such transaction being referred to herein as a "Spinout Transaction", and such subsidiary being referred to herein as a "Spinout Subsidiary"), upon the following terms and conditions. Each eligible Director who is not a Director of the Spinout Subsidiary shall be granted an option to purchase 1,500 shares of common stock of the Spinout Subsidiary as of the close of business on the date of the Company's Annual Meeting of Stockholders that first occurs after the Spinout Transaction, and also as of the close of business on the date of every fifth Annual Meeting of Stockholders of the Company that occurs thereafter during the duration of this Plan. Options granted under this Section 5(B) shall vest and be exercisable as to 100% of the shares of common stock subject to the option on the fourth anniversary of the grant date of the option, unless, prior to such anniversary, the underlying common stock shall have been registered under Section 12 of the Securities and Exchange Act of 1934, as amended (referred to herein as "Section 12 Registration"). From and after 90 days after the effective date of Section 12 Registration, options granted hereunder shall be immediately exercisable as to 100% of the shares subject to the option, subject to the right of the Company to repurchase the shares at the exercise price in the event the Optionee ceases to serve as a director of the Company, or any subsidiary of the Company or Thermo Election during the option term. The right of the Company to so repurchase the shares shall lapse as to one-fourth of the shares granted on each of the first, second, third and fourth anniversaries of the grant date of the option, provided the Optionee has remained continuously a director of the Company, Thermo Electron or any subsidiary of Thermo Electron since the grant date. In all other respects, the option shall be subject to the general terms and conditions applicable to all option grants as set forth below in Section 5(C), including the determination of the exercise price of such option. A-2PAGE No Director, who is otherwise eligible under Section 3, shall be eligible under this Section 5(B) to receive grants of stock options in Spinout Subsidiaries, if such Director also serves as a director of such Spinout Subsidiary. In the event any subsidiary shall become a "Spinout Subsidiary" as defined herein, then there shall be immediately reserved for transfer hereunder, on the date options to purchase common stock of the Spinout Subsidiary are first granted to eligible Directors and without further action required by the Board of Directors or Stockholders of the Company, twenty-five thousand (25,000) shares of the common stock of such Spinout Subsidiary. C. General Terms and Conditions Applicable to All Grants. 1. Except as otherwise provided in Section 5(B), options shall be exercisable at any time from and after the six-month anniversary of the grant date and prior to the date which is the earliest of: (a) three years after the grant date for options granted under Section 5(A) and five years after the grant date for options granted under Section 5(B), (b) three months after the later of the date (i) the Optionee either ceases to meet the requirements of Section 3 or (ii) otherwise ceases to serve as a director of the Company, Thermo Electron or any subsidiary of Thermo Electron (six months in the event the Optionee ceases to meet the requirements of this Subsection by reason of his death), or (c) the date of dissolution or liquidation of the Company. 2. The exercise price at which Options are granted hereunder shall be the average of the closing prices reported by the national securities exchange on which the common stock is principally traded for the five trading days immediately preceding and including the date the option is granted or, if such security is not traded on an exchange, the average last reported sale price for the five-day period on the NASDAQ National Market List, or the average of the closing bid prices for the five-day period last quoted by an established quotation service for over-the-counter securities, or if none of the above shall apply, the last price paid for shares of the Common Stock by independent investors in a private placement; provided, however, that such exercise price per share shall not be lower than the par value per share or less than 50% of the fair market value of the Common Stock until such time as the Company elects to be subject to Rule 16b-3 as amended by SEC Rel. No. 33-28869. 3. All options shall be evidenced by a written agreement substantially in such form as shall be approved by the Board of Directors or Committee, containing terms and conditions consistent with the provisions of this Plan. 6. Exercise of Options A. Exercise/Consideration An option may be exercised in accordance with its terms by written notice of intent to exercise the option, specifying the number of shares of stock with respect to which the option is then being exercised. The notice A-3PAGE shall be accompanied by payment in the form of cash or shares of common stock of the Company (as to options to purchase Company Common Stock) or the Spinout Subsidiary (as to options to purchase common stock of the Spinout Subsidiary, but only if the common stock is then publicly traded) (the shares so tendered referred to herein as "Tendered Shares") with a then current market value equal to the exercise price of the shares to be purchased; provided, however, that such Tendered Shares shall have been acquired by the Optionee more than six months prior to the date of exercise (unless such requirement is waived in writing by the Company). Against such payment the Company shall deliver or cause to be delivered to the Optionee a certificate for the number of shares then being purchased, registered in the name of the Optionee or other person exercising the option. If any law or applicable regulation of the Securities and Exchange Commission or other body having jurisdiction in the premises shall require the Company or the Director to take any action in connection with shares being purchased upon exercise of the option, exercise of the option and delivery of the certificate or certificates for such shares shall be postponed until completion of the necessary action, which shall be taken at the Company's expense. B. Tax Withholding The Company shall have the right to deduct from payments of any kind otherwise due to the Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of options under the Plan. Subject to the prior approval of the Company, which may be withheld by the Company in its sole discretion, the Optionee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company to withhold shares of Common Stock otherwise issuable pursuant to the exercise of an option or (ii) by delivering to the Company shares of Common Stock already owned by the Optionee. The shares so delivered or withheld shall have a fair market value equal to such withholding obligation. The fair market value of the shares used to satisfy such withholding obligation shall be determined by the Company as of the date that the amount of tax to be withheld is to be determined. Notwithstanding the foregoing, no election to use shares for the payment of withholding taxes shall be effective unless made in compliance with any applicable requirements of Rule 16b-3. 7. Transferability Options shall not be transferable, otherwise than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Internal Revenue Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder (a "Qualified Domestic Relations Order"). Options may be exercised during the life of the Optionee only by the Optionee or a transferee pursuant to a Qualified Domestic Relations Order. 8. Limitation of Rights to Continue as a Director Neither the Plan, nor the quantity of shares subject to options granted under the Plan, nor any other action taken pursuant to the Plan, shall constitute or be evidence of any agreement or understanding, express or implied, that the Company will retain a Director for any period of time, or at any particular rate of compensation. A-4PAGE 9. Changes in Common Stock If the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Common Stock or other securities, through merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of Common Stock, or other securities, an appropriate proportionate adjustment may be made in the maximum number or kind of shares reserved for issuance under the Plan. No fractional shares will be issued under the Plan on account of any such adjustments. 10. Limitation of Rights in Option Stock The Optionees shall have no rights as stockholders in respect of shares as to which their options shall not have been exercised, certificates issued and delivered and payment as herein provided made in full, and shall have no rights with respect to such shares not expressly conferred by this Plan or the written agreement evidencing options granted hereunder. 11. Stock Reserved The Company shall at all times during the term of the options reserve and keep available such number of shares of the Common Stock as will be sufficient to permit the exercise in full of all options granted under this Plan and shall pay all other fees and expenses necessarily incurred by the Company in connection therewith. 12. Securities Laws Restrictions A. Investment Representations. The Company may require any person to whom an option is granted, as a condition of exercising such option, to give written assurances in substance and form satisfactory to the Company to the effect that such person is acquiring the Common Stock subject to the option for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws. B. Compliance with Securities Laws. Each option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the shares subject to such option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of shares thereunder, such option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, or satisfaction of such condition shall have been effected or obtained on conditions acceptable to the Board of Directors. Nothing herein shall be A-5PAGE deemed to require the Company to apply for or to obtain such listing, registration or qualification, or to satisfy such condition. 13. Change in Control 13.1 Impact of Event In the event of a "Change in Control" as defined in Section 13.2, the following provisions shall apply, unless the agreement evidencing the Award otherwise provides: (a) Any stock options awarded under the Plan that were not previously exercisable and vested shall become fully exercisable and vested. (b) Shares purchased upon the exercise of options subject to restrictions and to the extent not fully vested, shall become fully vested and all such restrictions shall lapse so that shares issued pursuant to such options shall be free of restrictions. 13.2 Definition of "Change in Control" "Change in Control" means any one of the following events: (i) when, any Person is or becomes the beneficial owner (as defined in Section 13(d) of the Exchange Act and the Rules and Regulations thereunder), together with all Affiliates and Associates (as such terms are used in Rule 12b-2 of the General Rules and Regulations of the Exchange Act) of such Person, directly or indirectly, of 50% or more of the outstanding Common Stock of the Company, or the beneficial owner of 25% or more of the outstanding common stock of Thermo Electron Corporation ("Thermo Electron"), without the prior approval of the Prior Directors of the Company or Thermo Electron, as the case may be, (ii) the failure of the Prior Directors to constitute a majority of the Board of the Company or of the Board of Directors of Thermo Electron, as the case may be, at any time within two years following any Electoral Event, or (iii) any other event that the Prior Directors shall determine constitutes an effective change in the control of the Company or Thermo Electron. As used in the preceding sentence, the following capitalized terms shall have the respective meanings set forth below: (a) "Person" shall include any natural person, any entity, any "affiliate" of any such natural person or entity as such term is defined in Rule 405 under the Securities Act of 1933 and any "group" (within the meaning of such term in Rule 13d-5 under the Exchange Act); (b) "Prior Directors" shall mean the persons sitting on the Company's or Thermo Electron's Board of Directors, as the case may be, immediately prior to any Electoral Event (or, if there has been no Electoral Event, those persons sitting on the applicable Board of Directors on the date of this Agreement) and any future director of the Company or Thermo Electron who has been nominated or elected by a majority of the Prior Directors who are then members of the Board of Directors of the Company or Thermo Electron, as the case may be; and (c) "Electoral Event" shall mean any contested election of Directors, or any tender or exchange offer for the Company's or Thermo Electron's Common Stock, not approved by the Prior Directors, by any Person other than the Company, Thermo Electron or a subsidiary of Thermo Electron. A-6PAGE 14. Amendment of the Plan The provisions of Sections 3 and 5 of the Plan shall not be amended more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, or the rules thereunder. Subject to the foregoing, the Board of Directors may at any time, and from time to time, modify or amend the Plan in any respect, except that if at any time the approval of the Stockholders of the Company is required as to such modification or amendment under Rule 16b-3, the Board of Directors may not effect such modification or amendment without such approval. The termination or any modification or amendment of the Plan shall not, without the consent of an Optionee, affect his or her rights under an option previously granted to him or her. With the consent of the Optionees affected, the Board of Directors may amend outstanding option agreements in a manner not inconsistent with the Plan. The Board of Directors shall have the right to amend or modify the terms and provisions of the Plan and of any outstanding option to the extent necessary to ensure the qualification of the Plan under Rule 16b-3. 15. Effective Date of the Plan The Plan shall become effective when adopted by the Board of Directors, but no option granted under the Plan shall become exercisable until six months after the Plan is approved by the Stockholders of the Company. 16. Notice Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the Secretary of the Company and shall become effective when it is received. 17. Governing Law The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the Commonwealth of Massachusetts. EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO POWER CORPORATION'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED APRIL 1, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 6-MOS SEP-30-1995 APR-01-1995 30,794 12,909 13,378 578 15,654 82,045 4,789 435 100,250 19,628 323 1,243 0 0 61,544 100,250 47,226 47,226 36,467 36,467 1,246 27 11 2,667 1,040 1,592 0 0 0 1,592 .13 0
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