01—Abstract
Summary
Summary of the 10-K/A filed April 25, 1997. Cited figures are marked; the original filing is the authoritative source.
This is Amendment No. 1 on Form 10-K/A to the annual report of Thermo Electron Corporation (NYSE: TMO) for fiscal 1996, which ended December 28, 1996.
The filing is not a Thermo Fisher Scientific filing: that company was formed in 2006 through the merger of Thermo Electron and Fisher Scientific. The document contains no financial statements, revenue, earnings, or balance sheet data. Those were incorporated by reference from the Annual Report to Shareholders.
This amendment supplies only the Part III information (directors, executive compensation, security ownership, and related-party transactions) that the company originally planned to incorporate from its proxy statement. The filing shows a company with a large equity value, about $5.27 billiona held by non-affiliates as of January 24, 1997, and roughly 149.9 million common shares outstanding. Founder and Chairman George N.
Hatsopoulos is the dominant insider, owning about 2.3%b of the common stock. Directors and executive officers as a group own about 4.1%. John N.
Hatsopoulos became President effective January 1, 1997, while George Hatsopoulos remained Chairman and CEO. The company's 1996 reported compensation for George Hatsopoulos was a $520,000c salary and a $575,000 bonus. The filing highlights Thermo Electron's "spinout" model.
The parent creates majority-owned, publicly traded subsidiaries, sells minority stakes to outside investors, and charges each subsidiary a corporate services fee of 1.0%d of its revenue under a Corporate Charter. Many insiders hold stock and options across dozens of affiliated companies, and several directors sit on multiple subsidiary boards. Investors would need the Annual Report to Shareholders for operating results, and this amendment for governance and insider-alignment details.
02—Key points
Key Highlights
- Filing type: Amendment No. 1 on Form 10-K/A for fiscal 1996 (year ended December 28, 1996). It supplies Part III governance and compensation data only and contains no financial statements.
- Equity value: Aggregate market value of non-affiliate voting stock was approximately $5.27 billion as of January 24, 1997, with 149,925,557 common shares outstanding.
- Insider ownership: George N. Hatsopoulos, founder, Chairman and CEO, beneficially owns about 2.3% of common stock. All directors and executive officers as a group own about 4.1%.
- Leadership change: John N. Hatsopoulos became President effective January 1, 1997. George Hatsopoulos stayed on as Chairman and CEO.
- Executive pay: George Hatsopoulos received a $520,000 salary and $575,000 bonus in 1996. Named executives also received large option grants across the parent and many subsidiaries.
- Spinout strategy: The company operates a group of publicly traded, majority-owned subsidiaries (including Thermedics, Thermo Instrument Systems, ThermoTrex, and Thermo Fibertek). Subsidiaries pay the parent a fee of 1.0% of revenue for corporate services.
- Governance: The board met 16 times in 1996. Outside directors receive a $20,000 annual retainer plus $1,000 per meeting day. Change-of-control severance agreements exist for key executives, and a $1.0 million-scale payment is disclosed for Dr. G. Hatsopoulos.
03—Questions
Frequently Asked Questions
Does this filing include Thermo Electron's 1996 financial results?
No. This amendment contains only Part III information such as directors, executive compensation, and stock ownership. Financial results were incorporated by reference from the Annual Report to Shareholders for fiscal 1996, which is not included in this document.
How concentrated is insider ownership at Thermo Electron?
Founder George Hatsopoulos owns about 2.3% of the common stock, which is the largest individual stake. No other director or executive owns more than 1%. The group of directors and officers owns about 4.1% in total, so the company is not closely held.
How does the spinout model affect shareholders?
Thermo Electron creates majority-owned subsidiaries and sells minority stakes to outside investors. Subsidiaries pay the parent a corporate services fee of 1.0% of revenue, and directors and officers receive options in many affiliates. Investors should weigh the benefits of this capital-raising approach against the risks of related-party dealings and the allocation of options across affiliates.
What changed in the top management team?
Effective January 1, 1997, John N. Hatsopoulos was appointed President while retaining the title of Chief Financial Officer until that point. George N. Hatsopoulos remained Chairman and CEO. Arvin H. Smith, an Executive Vice President, also serves as CEO of Thermo Instrument Systems.
Are there change-of-control protections for executives?
Yes. Severance agreements provide benefits if a change of control not approved by the board occurs and the executive is terminated within one year. The filing estimates first-year payments of about $1.07 million for George Hatsopoulos, $665,000 for John Hatsopoulos, and $313,000 for Arvin Smith, as of March 1, 1997.
04—Continue