SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________________________________________
AMENDMENT NO. 1 ON FORM 10-K/A
TO FORM 10-K
(mark one) X Annual Report Pursuant to Section 13 or
-----
15(d) of the Securities Exchange Act of 1934
Transition Report Pursuant to Section 13 or
-----
15(d) of the Securities Exchange Act of 1934
Commission file number 1-11406
THERMO FIBERTEK INC.
(Exact name of Registrant as specified in its charter)
Delaware 52-1762325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Wyman Street
Waltham, Massachusetts 02254-9046
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------------
Common Stock, $.01 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
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,
and (2) has been subject to the filing requirements for at least
the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the Registrant's
knowledge, in definitive proxy or information statements
incorporated by reference into Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
PAGE
The aggregate market value of the voting stock held by
nonaffiliates of the Registrant as of January 24, 1997, was
approximately $100,854,000.
As of January 24, 1997, the Registrant had 61,138,880 shares of
Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for
the fiscal year ended December 28, 1996, are incorporated by
reference into Parts I and II.
Part III, Item 10. Directors and Executive Officers of
the Registrant.
Part III, Item 11. Executive Compensation.
Part III, Item 12. Security Ownership of Certain
Beneficial Owners and
Management.
Part III, Item 13. Certain Relationships and
Transactions.
The information required under these items, originally to be
incorporated by reference from the Registrant's definitive proxy
statement to be filed with the Commission pursuant to Regulation
14A, not later than 120 days after the close of the fiscal year,
is contained in the following Attachment A, which is included
herein and made a part of this Annual Report on Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Amendment No. 1 on Form 10-K/A to be signed by the
undersigned, duly authorized.
THERMO FIBERTEK INC.
By: /s/ Sandra L. Lambert
-------------------------------
Sandra L. Lambert
Secretary
PAGE
ATTACHMENT A
DIRECTORS
Set forth below are the names of the persons serving as
directors, their ages, their offices in the Corporation, if any,
their principal occupation or employment for the past five years,
the length of their tenure as directors and the names of other
public companies in which such persons hold directorships.
Information regarding their beneficial ownership of the
Corporation's Common Stock and of the common stock of its
majority-owned subsidiary, Thermo Fibergen Inc. ("Thermo
Fibergen"), and of its parent company, Thermo Electron
Corporation ("Thermo Electron"),a diversified high technology
company, is reported under the caption "Stock Ownership."
Senator Paul E. Tsongas, who served as a director of the
Corporation since 1992, passed away in January 1997.
Dr. Walter J. Dr. Bornhorst, 56, has been a director of
Bornhorst the Corporation since its inception in
1991. Since 1994, Dr. Bornhorst has been
the chairman of Z Corporation, a developer
of rapid prototyping equipment. From the
inception of the Corporation to December
1992, Dr. Bornhorst was chairman of the
board. He was senior vice president of
Thermo Electron from 1985 to 1992. Dr.
Bornhorst is also a director of Thermo
Cardiosystems Inc. Dr. Bornhorst is the
son-in-law of Dr. George N. Hatsopoulos, a
director of the Corporation.
Dr. George N. Dr. Hatsopoulos, 70, has been a director of
Hatsopoulos the Corporation since its inception. Dr.
Hatsopoulos has been the chairman of the
board and chief executive officer of Thermo
Electron since he founded the company in
1956 and was president of Thermo Electron
from 1956 to January 1997. Dr. Hatsopoulos
is also a director of Photoelectron
Corporation, Thermedics Inc., Thermo
Electron, Thermo Ecotek Corporation, Thermo
Instrument Systems Inc., Thermo Optek
Corporation, ThermoQuest Corporation and
ThermoTrex Corporation. Dr. Hatsopoulos is
the brother of Mr. John N. Hatsopoulos, a
director, the chief financial officer and a
vice president of the Corporation, and is
the father-in-law of Dr. Walter J.
Bornhorst, a director of the Corporation.
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John N. Hatsopoulos Mr. Hatsopoulos, 62, has been a director,
chief financial officer and vice president
of the Corporation since its inception. He
has been the president of Thermo Electron
since January 1997, the chief financial
officer of Thermo Electron since 1988, and
was an executive vice president of Thermo
Electron from 1986 to 1997. Mr.
Hatsopoulos is also a director of LOIS/USA
Inc., Thermedics Inc., Thermo Ecotek
Corporation, Thermo Instrument Systems
Inc., Thermo Power Corporation, Thermo
TerraTech Inc. and ThermoTrex Corporation.
Mr. Hatsopoulos is the brother of Dr.
George N. Hatsopoulos, a director of the
Corporation.
Donald E. Noble Mr. Noble, 82, has been a director of the
Corporation since January 1992 and chairman
of the board since December 1992. From 1959
to 1980, Mr. Noble served as the chief
executive officer of Rubbermaid
Incorporated, first with the title of
president and then as the chairman of the
board. Mr. Noble is also a director of
Thermo Electron, Thermo Power Corporation,
Thermo Sentron Inc. and Thermo TerraTech
Inc.
William A. Mr. Rainville, 55, has been president and
Rainville chief executive officer of the Corporation
since its inception and a director since
January 1992. From 1984 until January
1993, Mr. Rainville was the president and
chief executive officer of Thermo Web
Systems Inc., a subsidiary of the
Corporation. He has been a senior vice
president of Thermo Electron since March
1993 and was a vice president from 1986 to
1993. Mr. Rainville is also a director of
Thermo Ecotek Corporation, Thermo Fibergen
Inc., Thermo TerraTech Inc. and Thermo
Remediation Inc.
Committees of the Board of Directors and Meetings
The Board of Directors has established an Audit Committee
and a Human Resources Committee, each consisting solely of
outside directors. The present members of the Audit Committee are
Mr. Noble (Chairman) and Dr. Bornhorst. The Audit Committee
reviews the scope of the audit with the Corporation's independent
public accountants and meets with them for the purpose of
reviewing the results of the audit subsequent to its completion.
The present members of the Human Resources Committee are Mr.
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Noble (Chairman) and Dr. Bornhorst. The Human Resources
Committee reviews the performance of senior members of
management, recommends executive compensation and administers the
Corporation's stock option and other stock-based compensation
plans. The Corporation does not have a nominating committee of
the Board of Directors. The Board of Directors met six times, the
Audit Committee met once and the Human Resources Committee met
five times during fiscal 1996. Each director attended at least
75% of all meetings of the Board of Directors and committees on
which he served held during fiscal 1996.
Compensation of Directors
Cash Compensation
Directors who are not employees of the Corporation, of
Thermo Electron or of any other companies affiliated with Thermo
Electron (also referred to as "outside directors") receive an
annual retainer of $5,000 and a fee of $1,000 per day for
attending regular meetings of the Board of Directors and $500 per
day for participating in meetings of the Board of Directors held
by means of conference telephone and for participating in certain
meetings of committees of the Board of Directors. Beginning in
January 1997, the non-employee chairman of the board receives an
additional meeting fee for his service equal to $1,000 per day
for attending regular meetings of the Board of Directors and $500
per day for participating in meetings of the Board of Directors
held by means of conference telephone. Payment of directors'
fees is made quarterly. Dr. G. Hatsopoulos, Mr. J. Hatsopoulos
and Mr. Rainville are all employees of Thermo Electron or its
subsidiaries and do not receive any cash compensation from the
Corporation for their services as directors. Directors are also
reimbursed for out-of-pocket expenses incurred in attending such
meetings.
Deferred Compensation Plan
Under the Deferred Compensation Plan for directors (the
"Deferred Compensation Plan"), a director has the right to defer
receipt of his cash fees until he ceases to serve as a director,
dies or retires from his principal occupation. In the event of a
change in control or proposed change in control of the
Corporation that is not approved by the Board of Directors,
deferred amounts become payable immediately. Either of the
following is deemed to be a change of control: (a) the
occurrence, without the prior approval of the Board of Directors,
of the acquisition, directly or indirectly, by any person of 50%
or more of the outstanding Common Stock or 25% or more of the
outstanding common stock of Thermo Electron; or (b) the failure
of the persons serving on the Board of Directors immediately
prior to any contested election of directors or any exchange
offer or tender offer for the Common Stock on the common stock of
Thermo Electron to constitute a majority of the Board of
Directors at any time within two years following any such event.
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Amounts deferred pursuant to the Deferred Compensation Plan are
valued at the end of each quarter as units of the Corporation's
Common Stock. When payable, amounts deferred may be disbursed
solely in shares of Common Stock accumulated under the Deferred
Compensation Plan. A total of 100,000 shares of Common Stock are
currently reserved for issuance under the Deferred Compensation
Plan. As of March 1, 1997, deferred units equal to 10,119.76
shares of Common Stock were accumulated under the Deferred
Compensation Plan.
Directors Stock Option Plan
The Corporation's directors stock option plan (the
"Directors Plan"), provides for the grant of stock options to
purchase shares of common stock of the Corporation and its
majority-owned subsidiaries to outside directors as additional
compensation for their service as directors. Commencing in
1997, outside directors are automatically granted options to
purchase 1,000 shares of Common Stock annually. In addition, the
Directors Plan provides for the automatic grant every five years
of options to purchase 1,500 shares of the common stock of a
majority-owned subsidiary of the Corporation that is "spun out"
to outside investors.
Prior to 1996, the Directors Plan provided for the grant of
stock options upon a director's initial appointment. Outside
directors appointed before the amendment of the plan received an
option to purchase 40,000 shares of Common Stock upon their
initial appointment or election. Options granted prior to 1996
are immediately exercisable, and are subject to restrictions upon
transfer and the right of the Corporation to repurchase such
shares at the exercise price in the event the director ceases to
serve as a director of the Corporation or any other Thermo
Electron company. Such repurchase rights lapse ratably over a
five-year period, commencing with the first anniversary of the
grant date. These options expire on the seventh anniversary of
the grant date, unless the director dies or otherwise ceases to
serve as a director of the Corporation or any other Thermo
Electron company prior to that date.
Outside directors first appointed or elected during 1996
were automatically granted options to purchase 8,000 shares of
Common Stock upon their election or appointment under this
provision of the Directors Plan. These options are exercisable
six months after the date of grant, and are subject to
restrictions upon transfer and the right of the Corporation to
repurchase such shares at the exercise price in the event the
director ceases to serve as a director of the Corporation or any
other Thermo Electron company. Such repurchase rights lapse in
their entirety on the first anniversary of the grant date. These
options expire on the fifth anniversary of the grant date, unless
the director dies or otherwise ceases to serve as a director of
the Corporation or any other Thermo Electron company prior to
that date. The grant of options upon a director's appointment
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was discontinued after December 31, 1996, pursuant to the terms
of the plan, as amended.
Commencing with the Annual Meeting of Stockholders to be
held in 1997, outside directors will receive an annual grant of
options to purchase 1,000 shares of Common Stock pursuant to the
Directors Plan at the close of business on the date of each
Annual Meeting of the Stockholders of the Corporation. Options
evidencing annual grants may be exercised at any time from and
after the six-month anniversary of the grant date of the option
and prior to the expiration of the option on the third
anniversary of the grant date. Shares acquired upon exercise of
the options are subject to repurchase by the Corporation at the
exercise price if the recipient ceases to serve as a director of
the Corporation or any other Thermo Electron company prior to the
first anniversary of the grant date.
In addition, under the Directors Plan, outside directors are
automatically granted every five years options to purchase 1,500
shares of common stock of each majority-owned subsidiary of the
Corporation that is "spun out" to outside investors. The grant
occurs on the close of business on the date of the first Annual
Meeting of the Stockholders next following the subsidiary's
spinout, which is the first to occur of either an initial public
offering of the subsidiary's common stock or a sale of such stock
to third parties in an arms-length transaction, and also as of
the close of business on the date of every fifth Annual Meeting
of the Stockholders of the Corporation that occurs thereafter
during the duration of the Plan. The options granted vest and
become exercisable on the fourth anniversary of the date of
grant, unless prior to such date the subsidiary's common stock is
registered under Section 12 of the Securities Exchange Act of
1934, as amended (''Section 12 Registration"). In the event that
the effective date of Section 12 Registration occurs before the
fourth anniversary of the grant date, the option will become
immediately exercisable and the shares acquired upon exercise
will be subject to restrictions on transfer and the right of the
Corporation to repurchase such shares at the exercise price in
the event the director ceases to serve as a director of the
Corporation or any other Thermo Electron company. In the event
of Section 12 Registration, the restrictions and repurchase
rights shall lapse or be deemed to lapse at the rate of 25% per
year, starting with the first anniversary of the grant date.
These options expire after five years. Under this provision of
the Directors Plan, each eligible outside director will receive
an option to purchase 1,500 shares of the common stock of the
Corporation's majority-owned subsidiary, Thermo Fibergen Inc., at
the close of business on the date of the 1997 Annual Meeting of
Stockholders.
The exercise price for options granted under the Directors
Plan is the average of the closing prices of the common stock as
reported on the American Stock Exchange (or other principal
market on which the common stock is then traded) for the five
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trading days preceding and including the date of grant, or, if
the shares are not then traded, at the last price per share paid
by third parties in an arms-length transaction prior to the
option grant. As of March 1, 1997, an aggregate of 675,000
shares of Common Stock had been reserved for issuance under the
Directors Plan, options to purchase 189,525 shares of Common
Stock were outstanding, options to purchase 96,000 shares had
been exercised, no options had lapsed and 389,475 shares of
-
Common Stock were available for grant under the Directors Plan.
Stock Ownership Policies for Directors
During 1996, the Human Resources Committee of the Board of
Directors (the "Committee") established a stock holding policy
for directors. The stock holding policy requires each director
to hold a minimum of 1,000 shares of Common Stock. Directors are
requested to achieve this ownership level by the 1998 Annual
Meeting of Stockholders. Directors who are also executive
officers of the Corporation are required to comply with a
separate stock holding policy established by the Committee in
1996.
In addition, the Committee adopted a policy requiring
directors to hold shares of the Corporation's Common Stock equal
to one-half of their net option exercises over a period of five
years. The net option exercise is determined by calculating the
number of shares acquired upon exercise of a stock option, after
deducting the number of shares that could have been traded to
exercise the option and the number of shares that could have been
surrendered to satisfy tax withholding obligations attributable
to the exercise of the option. This policy is also applicable to
executive officers.
STOCK OWNERSHIP
The following table sets forth the beneficial ownership of
Common Stock, as well as the common stock of Thermo Electron and
the Corporation's majority-owned subsidiary, Thermo Fibergen Inc.
("Thermo Fibergen"), as of March 1, 1997, with respect to (i)
each person who was known by the Corporation to own beneficially
more than 5% of the outstanding shares of Common Stock, (ii) each
director, (iii) each executive officer named in the summary
compensation table under the heading "Executive Compensation" and
(iv) all directors and executive officers as a group.
While certain directors and executive officers of the
Corporation are also directors and executive officers of Thermo
Electron or its subsidiaries other than the Corporation, all such
persons disclaim beneficial ownership of the shares of Common
Stock owned by Thermo Electron.
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Name Thermo Fibertek (2) Thermo Electron (3)Thermo Fibergen (4)
Thermo Electron Corporation 53,524,307 N/A N/A
(5)
Jan-Eric Bergstedt (6) 67,980 20,691 20,250
Walter J. Bornhorst 168,825 9,415 0
George N. Hatsopoulos 191,910 3,512,279 20,000
John N. Hatsopoulos 119,155 526,768 20,000
Edwin D. Healy 205,806 56,624 10,000
Bruno Lamort de Gail 202,500 550 10,000
Donald E. Noble 114,250 54,701 3,000
William A. Rainville (6) 517,894 252,294 41,500
Edward J. Sindoni 221,695 46,026 10,000
All directors and current
executive officers as a 2,108,566 4,658,839 149,750
group (11 people)
(1) Except as reflected in the footnotes to this table,
shares of Common Stock of the Corporation and of the common stock
of Thermo Electron and Thermo Fibergen 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) The shares of Common Stock shown in the table reflect a
three-for-two split of such stock effected in June 1996 in the
form of a 50% stock dividend. Shares beneficially owned by Mr.
Bergstedt, Dr. Bornhorst, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos,
Mr. Healy, Mr. Lamort de Gail, Mr. Noble, Mr. Rainville, Mr.
Sindoni and all directors and executive officers as a group
include 64,500, 168,825, 157,910, 97,200, 202,500, 202,500,
95,850, 495,000, 202,500 and 1,977,035 shares, respectively, that
such person or group has the right to acquire within 60 days of
March 1, 1997, through the exercise of stock options. Shares
beneficially owned by Mr. Noble and all directors and executive
officers as a group include 5,715 shares that had been allocated
through March 1, 1997, to Mr. Noble's account maintained under
the Corporation's Deferred Compensation Plan for directors. No
director or executive officer beneficially owned more than 1% of
the Common Stock outstanding as of March 1, 1997; all directors
and executive officers as a group beneficially owned 3.3% of the
Common Stock outstanding as of such date.
(3) The shares of common stock of Thermo Electron shown in the
table reflect a three-for-two split of such stock distributed in
June 1996 in the form of a 50% stock dividend. Shares of the
common stock of Thermo Electron beneficially owned by Mr.
Bergstedt, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos, Mr. Healy, Mr.
Noble, Mr. Rainville, Mr. Sindoni and all directors and executive
officers as a group include 19,650, 1,499,500, 429,685, 46,725,
9,375, 205,648, 28,350 and 2,374,261 shares, respectively, that
such person or members of the group has the right to acquire
within 60 days of March 1, 1997, through the exercise of stock
options. Shares beneficially owned by Dr. G. Hatsopoulos, Mr. J.
Hatsopoulos and all directors and executive officers as a group
include 2,164, 1,934 and 5422 full shares, respectively,
allocated through March 1, 1997 to accounts maintained pursuant
to Thermo Electron's employee stock ownership plan, of which the
trustees, who have investment power over its assets are executive
officers of Thermo Electron (the "ESOP"). Shares beneficially
owned by Mr. Noble and all directors and executive officers as a
group each include 41,911 shares allocated through March 1, 1997,
to Mr. Noble's account maintained pursuant to Thermo Electron's
deferred compensation plan for directors. Shares beneficially
owned by Dr. G. Hatsopoulos include 89,601 shares held by his'
spouse, 168,750 shares held by a QTIP trust of which his spouse
is the trustee, 39,937 shares held by a family trust of which his
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spouse is the trustee, and 153 shares allocated to the account of
his spouse maintained pursuant to the ESOP. Shares beneficially
owned by Mr. Lamort de Gail include 550 shares held by his
daughter. Except for Dr. G. Hatsopoulos, who beneficially owned
2.3% of the Thermo Electron common stock outstanding as of March
1, 1997, no director or executive officer beneficially owned more
than 1% of such common stock outstanding as of such date; all
directors and executive officers as a group beneficially owned
approximately 3% of the Thermo Electron common stock outstanding
as of March 1, 1997.
(4) Shares of the common stock of Thermo Fibergen beneficiary
owned by Mr. Bergstedt, Dr. G. Hatsopoulos, Mr. J. Hatsopoulos,
Mr. Healy, Mr. Lamort de Gail, Mr. Rainville, Mr. Sindoni and all
directors and executive officers as a group include 19,500,
20,000, 20,000, 10,000, 10,000, 40,000, 10,000 and 144,500
shares, respectively, that such person or members of the group
has the right to acquire within 60 days of March 1, 1997, through
the exercise of stock options. Shares beneficially owned by Mr.
Bergstedt include 750 shares owned by his spouse. No director or
executive officer beneficially owned more than 1% of such common
stock outstanding as of March 1, 1997; all directors and
executive officers as a group beneficially owned less than 1% of
the Thermo Fibergen common stock outstanding as of such date.
(5) Includes 1,888,122 shares Thermo Electron has the right to
acquire within 60 days of March 1, 1997 through the conversion of
a convertible note of the Corporation issued to Thermo Electron
on February 22, 1994. Thermo Electron beneficially owned 84% of
the Common Stock outstanding as of March 1, 1997. Thermo
Electron's address is 81 Wyman Street, Waltham, Massachusetts
02254-9046.
(6) As of March 1, 1997, Mr. Bergstedt and Mr. Rainville
beneficially owned 750 and 1,500 redemption rights,
respectively, issued by Thermo Fibergen. The redemption rights
beneficially owned by Mr. Bergstedt are held by his spouse. Each
of these rights, issued in a public offering in September 1996,
permits the holder to sell one share of Thermo Fibergen common
stock back to Thermo Fibergen at certain periods in the future at
a price of $12.25 per share.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's directors and executive officers, and
beneficial owners of more than 10% of the Common Stock, such as
Thermo Electron, to file with the Securities and Exchange
Commission initial reports of ownership and periodic reports of
changes in ownership of the Corporation's securities. Based upon
a review of such filings, all Section 16(a) filing requirements
applicable to such persons were complied with during 1996, except
in the following instances. Thermo Electron filed eight Forms 4
late, reporting a total of 76 transactions, consisting of 65 open
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market purchases, seven transactions associated with the exercise
of options to purchase the Common Stock granted to employees
under Thermo Electron's stock option program and the expiration
without exercise of two such options.
EXECUTIVE COMPENSATION
NOTE: All share amounts reported below have, in all cases, been
adjusted as applicable to reflect a three-for-two stock splits
distributed in June 1996 with respect to the Common Stock and the
common stock of Thermo Electron, each in the form of a 50% stock
dividend.
Summary Compensation Table
The following table summarizes compensation for services to
the Corporation in all capacities awarded to, earned by or paid
to the Corporation's chief executive officer and its four other
most highly compensated executive officer (the "named executive
officers") for the last three fiscal years.
The Corporation is required to appoint certain executive
officers and full-time employees of Thermo Electron as executive
officers of the Corporation, in accordance with the Thermo
Electron Corporate Charter. The compensation for these executive
officers is determined and paid entirely by Thermo Electron. The
time and effort devoted by these individuals to the Corporation's
affairs is provided to the Corporation under the Corporate
Services Agreement between the Corporation and Thermo Electron.
Accordingly, the compensation for these individuals is not
reported in the following table.
Summary Compensation Table
Long Term
Compensation
Securities
Underlying
Options (No.
Name and Fiscal Annual Compensation of Shares All Other
Principal Year Salary Bonus and Compensation
Position Company(1) (2)
William A. 1996 $102,500 $95,500 40,000(TFG) $17,558(4)
Rainville (3)
President and 1995 $97,500 $110,000 -- $15,870
Chief
Executive 1994 $91,000 $86,500 -- $16,269
Officer
Bruno Lamort de 1996 999,938Fr. 290,000 Fr. 10,000(TFG) 241,112Fr.
Gail (5)
Vice President 1995 925,060Fr. 309,000 Fr. -- 252,564Fr.
1994 875,751Fr. 257,000 Fr. -- 196,859Fr.
Edwin D. Healy 1996 $184,000 $44,000 900(TMO) $9,136
(6)
Vice President 10,000(TFG)
1995 $176,000 $88,300 600(TMO) $5,851
1994 $168,000 $75,500 45,225(TMO) $9,240
Jan-Eric O. 1996 $145,000 $76,500 15,000(TFT) $5,344
Bergstedt (7)
Vice President 7,650(TMO)
19,500(TFG)
1995 $136,000 $75,600 22,500(TFT) $6,750
7,500(TMO)
Edward J. Sindoni 1996 $151,500 $68,700 2,250(TMO) $15,997
(6)
Vice President 10,000(TFG)
1995 $145,500 $79,500 2,250(TMO) $15,122
1994 $140,000 $48,000 24,750(TMO) $14,416
(1) Options to purchase Common Stock of the Corporation awarded
to executive officers are followed by the designation "TFT." In
addition, the named executive officers of the Corporation have
been granted options to purchase common stock of Thermo Electron
companies from time to time as part of Thermo Electron's stock
option program. Options have been granted to the named executive
officers during the last three fiscal years in the following
Thermo Electron companies: Thermo Electron (designated in the
table as TMO) and Thermo Fibergen Inc. (designated in the table
as TFG).
(2) Represents, for Mr. Rainville and Mr. Sindoni, amounts
contributed to their respective accounts under the Corporation's
profit-sharing plan. Represents, for Mr. Healy, amounts
contributed to his account under the profit-sharing plan
maintained by Fiberprep Inc., a subsidiary of the Corporation.
Represents, for Mr. Lamort de Gail, amounts contributed for his
account under the retirement and profit-sharing plans maintained
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by E. & M. Lamort, S.A. ("Lamort"), the Corporation's French
subsidiary. Represents, for Mr. Bergstedt, the amount of
matching contributions made by his employer to his account under
the Thermo Electron 401(k).
(3) Mr. Rainville is a senior vice president of Thermo Electron,
as well as the president and chief executive officer of the
Corporation. A portion of Mr. Rainville's annual cash
compensation (salary and bonus) has been allocated to and paid by
Thermo Electron in each of the last three fiscal years as
compensation for the services provided to Thermo Electron based
on the time he devoted to his responsibilities as a senior vice
president of Thermo Electron. The annual cash compensation
(salary and bonus) reported in the table for Mr. Rainville
represents the amount paid from all sources, including the
Corporation, for Mr. Rainville's services as chief executive
officer of the Corporation. For 1996, 1995 and 1994, 50%, 50%
and 50%, respectively, of Mr. Rainville's annual cash
compensation (salary and bonus) was allocated to the Corporation
for his service as the Corporation's chief executive officer.
In addition, Mr. Rainville has been granted options to purchase
shares of the common stock of Thermo Electron and certain of its
subsidiaries other than the Corporation from time to time by
Thermo Electron or such other subsidiaries. These options are
not reported in this table as they were granted as compensation
for service to other Thermo Electron companies in capacities
other than in his capacity as the chief executive officer of the
Corporation.
(4) In addition to the matching contribution referred to in
footnote (2), such amount includes $1,313 of compensation
attributable to an interest-free loan provided to Mr. Rainville
pursuant to the Corporation's Stock Holding Assistance Plan. See
"Relationship with Affiliates - Stock Holding Assistance Plan."
(5) Mr. Lamort de Gail is a citizen of France and all
compensation received by him is paid in French francs. Translated
into U.S. dollars using the average exchange rates for 1996, 1995
and 1994, Mr. Lamort de Gail received annual salary of $196,587,
$184,364 and $157,285, respectively, annual bonuses of $57,014,
$61,584 and $46,157, respectively, and aggregate contributions
under Lamort's retirement plans of $47,403 , $50,336 and $35,356,
respectively.
(6) Mr. Healy and Mr. Sindoni were all appointed executive
officers of the Corporation on June 2, 1994. Reported in the
table under "Annual Compensation" and "All Other Compensation"
are the total amounts paid in 1994 to these individuals for
service in all capacities to the Corporation.
(7) Mr. Bergstedt was appointed an executive officer of the
Corporation in September 1995. Reported in the table under
"Annual Compensation" and "All Other Compensation" are the total
amounts paid in 1995 to Mr. Bergstedt for service in all
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capacities to the Corporation. Mr. Bergstedt was not an employee
of the Corporation prior to 1995.
Stock Options Granted During Fiscal Year 1996
The following table sets forth information concerning
individual grants of stock options made during fiscal 1996 to the
Corporation's chief executive officer and the other named
executive officers. It has not been the Corporation's policy in
the past to grant stock appreciation rights, and no such rights
were granted during fiscal 1996.
Mr. Rainville is a senior vice president of Thermo Electron
and from time to time has been granted options to purchase common
stock of Thermo Electron and certain of its subsidiaries other
than the Corporation. These options are not reported in this
table as they were granted as compensation for service to other
Thermo Electron companies in capacities other than in his
capacity as the chief executive officer of the Corporation.
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Stock Options Granted in Fiscal 1996
Potential
Percent Realizable
of Value at Assumed
Total Annual Rates of
Options Stock
Granted Price Appreciation
Number of Exercise for
Securities Price Option Term (2)
Underlying Employees Per Expira-
Options in tion
Name Granted (1) Fiscal Share Date 5% 10%
Year
William A. Rainville 20,000 (TFG) 3.5%(4) $10.00 08/14/08 $159,200 $427,600
20,000 (TFG) (3) 3.5%(4) $10.00 08/14/08 $159,200 $427,600
Bruno Lamort De Gail 10,000 (TFG) 1.8%(4) $10.00 09/11/08 $79,600 $213,800
Edwin D. Healy 900 (TMO) 0.1%(4) $42.79 05/22/99 $6,066 $12,744
10,000 (TFG) 1.8%(4) $10.00 09/11/08 $79,600 $213,800
Jan-Eric Bergstedt 15,000 (TFT) 17.6%(4) $10.75 12/10/03 $65,700 $153,000
150 (TMO) 0.1%(4) $42.79 05/22/99 $1,011 $2,124
7,500 (TMO) 0.5%(4) $37.98 03/11/08 $226,725 $609,150
7,500 (TFG) 1.3%(4) $13.50 12/10/03 $41,250 $96,075
12,000 (TFG) 2.1%(4) $10.00 09/11/08 $95,520 $256,560
Edward J. Sindoni 2,250 (TMO) 0.1%(4) $42.79 05/22/99 $15,165 $31,860
10,000 (TFG) 1.8%(4) $10.00 09/11/08 $79,600 $213,800
(1) All of the options granted during the fiscal year are
immediately exercisable. In all cases, the shares acquired upon
exercise are subject to repurchase by the granting corporation at
the exercise price if the optionee ceases to be employed by the
granting corporation or another Thermo Electron company. The
granting corporation may exercise its repurchase rights within
six months after the termination of the optionee's employment.
The repurchase rights generally lapse ratably over a five-to
ten-year period, depending on the option term, which may vary
from seven to twelve years, provided that the optionee continues
to be employed by the Corporation or another Thermo Electron
company. Certain options granted as part of Thermo Electron's
stock option program have three-year terms, and the repurchase
rights lapse in their entirety on the second anniversary of the
grant date. The granting corporation may permit the holders of
options to exercise options and to satisfy tax withholding
obligations by surrendering shares equal in fair market value to
the exercise price or withholding obligation.
(2) The amounts shown on this table represent hypothetical gains
that could be achieved for the respective options if exercised at
the end of the option term. These gains are based on assumed
rates of stock appreciation of 5% and 10% compounded annually
from the date the respective options were granted to their
expiration date. The gains shown are net of the option exercise
price, but do not include deductions for taxes or other expenses
associated with the exercise. Actual gains, if any, on stock
option exercises will depend on the future performance of the
common stock of the applicable corporation, the optionee's
continued employment through the option period and the date on
which the options are exercised.
(3) These options granted to Mr. Rainville are subject to the
same terms described in footnote (1), except that the repurchase
rights of the granting corporation are deemed to lapse 20% per
year commencing on the sixth anniversary of the grant date.
(4) These options were granted under stock option plans
maintained by Thermo Electron companies and accordingly are
reported as a percentage of total options granted to employees of
Thermo Electron and its subsidiaries.
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Stock Options Exercised During Fiscal 1996
The following table reports certain information regarding
stock option exercises during fiscal 1996 and outstanding stock
options held at the end of fiscal 1996 by the Corporation's chief
executive officer and the other named executive officers. No
stock appreciation rights were exercised or were outstanding
during fiscal 1996.
Aggregated Option Exercises In Fiscal 1995 And
Fiscal 1996 Year-End Option Values
Number of
Unexercised
Options at
Shares Fiscal Value of
Acquired Year-End Unexercised
on Value (Exercisable/ In-the-Money
Name Company Exercise Realized Unexercisable)(1) Options
William A. Rainville Thermo -- -- 495,000 /0 $2,686,500/--
(2) Fibertek
Thermo -- -- 40,000 /0 (3) $30,000/--
Fibergen
Bruno Lamort de Gail Thermo -- -- 202,500 /0 (4) $1,073,250/--
Fibertek
Thermo -- -- 10,000 /0 7,500/--
Fibergen
Edwin D. Healy Thermo -- -- 202,500 /0 (4) $931,500/--
Fibertek
Thermo 9,774 $280,269 46,725 /0 (4) $808,709/--
Electron
Thermo -- -- 10,000 /0 (5) $7,500/--
Fibergen
Jan-Eric Bergstedt Thermo -- -- 64,500 /0 $76,950/--
Fibertek
Thermo -- -- 19,650 /0 $143,220/--
Electron
Thermo -- -- 19,500 /0 $9,000/--
Fibergen
Edward J. Sindoni Thermo -- -- 202,500 /0 (4) $1,073,250/--
Fibertek
Thermo 5,624 $142,395 28,350 /0 (4) $454,088/--
Electron
Thermo 1,500 $18,750 -- /-- --/--
Ecotek
Thermo -- -- 10,000 /0 (5) $7,500/--
Fibergen
ThermoTrex 900 $37,958 -- /-- --/--
(1) The shares of the common stock shown in the table have been
adjusted to reflect a three for-two stock split with respect to
the common stock of Thermo Ecotek distributed in October 1996 in
the form of a 50% stock dividend. All of the options reported
outstanding at the end of the fiscal year were immediately
exercisable as of fiscal year-end. In all cases, the shares
acquired upon exercise of the options reported in the table are
subject to repurchase by the granting corporation at the exercise
price if the optionee ceases to be employed by such corporation
or another Thermo Electron company. The granting corporation may
exercise its repurchase rights within six months after the
termination of the optionee's employment. The repurchase rights
generally lapse ratably over a five- to ten-year period,
depending on the option term, which may vary from seven to twelve
years, provided that the optionee continues to be employed by the
Corporation or another Thermo Electron company. Certain options
granted as a part of Thermo Electron's stock option program have
three-year terms, and the repurchase rights lapse in their
entirety on the second anniversary of the grant date.
(2) Mr. Rainville has served as an officer of Thermo Electron in
various capacities since 1986 and holds unexercised options to
purchase common stock of Thermo Electron and certain of its
subsidiaries other than the Corporation. These options are not
reported here as they were granted as compensation for service to
other Thermo Electron companies in capacities other than in his
capacity as the chief executive officer of the Corporation.
(3) Options to purchase 20,000 shares of the common shares of
the common stock of Thermo Fibergen granted to Mr. Rainville are
subject to the same terms described in footnote (1), except that
the repurchase rights of the granting corporation are deemed to
lapse 20% per year commencing on the sixth anniversary of the
grant date.
(4) Options to purchase 180,000, 45,000, 67,500 and 45,000
shares of the Corporation's Common Stock held by Mr. Rainville,
Mr. Lamort de Gail, Mr. Healy and Mr. Sindoni, respectively, are
subject to the same terms described in footnote (1), except that
the repurchase rights of the Corporation lapse ratably on the
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second through sixth anniversaries of the option grant date and
shares purchased upon exercise thereof are further restricted
from resale until such executive officer's retirement.
(5) Options to purchase 45,000 and 22,500 shares, respectively,
of the common stock of Thermo Electron granted to Mr. Healy and
Mr. Sindoni are subject to the same terms as described in
footnote (1), except that the repurchase rights of the granting
corporation generally do not lapse until the tenth anniversary of
the grant date. In the event of the employee's death or
involuntary termination prior to the tenth anniversary of the
grant date, the repurchase rights of the granting corporation
shall be deemed to have lapsed ratably over a five-year period
commencing with the fifth anniversary of the grant date.
Defined Benefit Retirement Plan
The Corporation's Auburn, Massachusetts subsidiary, Thermo
Web Systems Inc., maintains a defined benefit retirement plan
(the "Retirement Plan") for eligible U.S. employees. The
following table sets forth the estimated annual benefits payable
under the Retirement Plan upon retirement to employees of the
subsidiary in specified compensation and years-of-service
classifications. The estimated benefits at certain compensation
levels reflect the statutory limits on compensation that can be
recognized for plan purposes. This limit is currently $150,000
per year.
Years of Service
Annual Compensation 15 20 25 30 35
$100,000 $26,250 $35,000 $43,750 $48,125 $48,125
$125,000 $32,813 $43,750 $54,688 $60,156 $60,156
$150,000 $39,375 $52,500 $65,625 $72,188 $72,188
Each eligible employee receives a monthly retirement
benefit, beginning at normal retirement age (65), based on a
percentage (1.75%) of the average monthly compensation of such
employee before retirement, multiplied by his years of service
(up to a maximum of 30 years). Full credit is given for the
first 25 years of service, and half credit is given for years
over 25 and less than 30. Benefits are reduced for retirement
before normal retirement age. Average monthly compensation is
generally defined as average monthly base salary over the five
years of highest compensation in the ten-year period preceding
retirement. For 1996, the compensation recognized for plan
purposes for Mr. Rainville and Mr. Sindoni was [$150,000 and
$145,500] respectively. The estimated credited years of service
recognized under the Retirement Plan for Mr. Rainville and Mr.
Sindoni is 30 and 22, respectively, assuming retirement at age
65. Mr. Healy, Mr. Lamort de Gail and Mr. Bergstedt are not
entitled to receive any benefits under the Retirement Plan. No
benefits under the Retirement Plan vest for an employee until
after five years of participation, at which time they become
fully vested. The benefits shown in the above table are subject
to reduction for Social Security benefits. The plan benefits
shown are payable during the employee's lifetime unless the
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PAGE
employee elects another form of benefit that provides death
benefit protection.
Severance Agreements
In 1988, Thermo Electron entered into severance agreements
with several of its key employees, including key employees of the
Corporation and other majority-owned subsidiaries. These
agreements provide severance benefits if there is a change of
control of Thermo Electron that is not approved by the Board of
Directors of Thermo Electron and the employee's employment with
Thermo Electron or the majority-owned subsidiary is terminated,
for whatever reason, within one year thereafter. For purposes of
the agreement a change of control exists upon (i) the acquisition
of 50% or more of the outstanding common stock of Thermo Electron
by any person without the prior approval of the board of
directors of Thermo Electron, (ii) the failure of the board of
directors of Thermo Electron, within two years after any
contested election of directors or tender or exchange offer not
approved by the board of directors, to be constituted of a
majority of directors holding office prior to such event or (iii)
any other event that the board of directors of Thermo Electron
determines constitutes an effective change of control of Thermo
Electron. Each of the recipients of these agreements would
receive a lump-sum benefit at the time of a qualifying severance
equal to the highest total cash compensation paid to the employee
by Thermo Electron or the majority-owned subsidiary in any
12-month period during the three years preceding the severance
event. A qualifying severance exists (i) if the employment of the
executive officer is terminated for any reason within one year
after a change in control of Thermo Electron or (ii) a group of
directors of Thermo Electron consisting of directors of Thermo
Electron on the date of the severance agreement or, if an
election contest or tender or exchange offer for Thermo
Electron's common stock has occurred, the directors of Thermo
Electron immediately prior to such election contest or tender or
exchange offer, and any future directors who are nominated or
elected by such directors, determines that any other termination
of the executive officer's employment should be treated as a
qualifying severance. The benefits to be provided are limited so
that the payments would not constitute so-called "excess
parachute payments" under applicable provisions of the Internal
Revenue Code of 1986. Assuming that severance benefits would have
been payable under these agreements as of December 28, 1996, Mr.
Rainville would have received approximately $415,000.
In connection with the acquisition of E. & M. Lamort, S.A.,
the Corporation entered into a noncompetition agreement with Mr.
Lamort de Gail. Pursuant to this agreement, if Mr. Lamort de
Gail's employment is terminated prior to his normal retirement
age of 65, in consideration of Mr. Lamort de Gail's agreement not
to compete with the Corporation for three years after such
termination, the Corporation has agreed to pay Mr. Lamort de Gail
an aggregate of 3,500,000 French Francs ($612.850 at the
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PAGE
applicable exchange rate on March 1, 1997), payable in 36 equal
monthly installments. Installments payable to Mr. Lamort de Gail
after his 60th birthday will be reduced by 20% in each year
thereafter and no installments will be payable to Mr. Lamort de
Gail after his 65th birthday. In the event that Mr. Lamort de
Gail voluntarily resigns from the Corporation, amounts payable
under this agreement will be reduced by one-third.
RELATIONSHIP WITH AFFILIATES
Thermo Electron has adopted a strategy of selling a minority
interest in subsidiary companies to outside investors as an
important tool in its future development. As part of this
strategy, Thermo Electron and certain of its subsidiaries have
created several privately and publicly held subsidiaries. From
time to time, Thermo Electron and its subsidiaries will create
other majority-owned subsidiaries as part of its spinout
strategy. (The Corporation and such other majority-owned Thermo
Electron subsidiaries are hereinafter referred to as the "Thermo
Subsidiaries.")
Thermo Electron and each of the Thermo Subsidiaries
recognize that the benefits and support that derive from their
affiliation are essential elements of their individual
performance. Accordingly, Thermo Electron and each of the Thermo
Subsidiaries have adopted the Thermo Electron Corporate Charter
(the "Charter") to define the relationships and delineate the
nature of such cooperation among themselves. The purpose of the
Charter is to ensure that (1) all of the companies and their
stockholders are treated consistently and fairly, (2) the scope
and nature of the cooperation among the companies, and each
company's responsibilities, are adequately defined, (3) each
company has access to the combined resources and financial,
managerial and technological strengths of the others, and (4)
Thermo Electron and the Thermo Subsidiaries, in the aggregate,
are able to obtain the most favorable terms from outside parties.
To achieve these ends, the Charter identifies the general
principles to be followed by the companies, addresses the role
and responsibilities of the management of each company, provides
for the sharing of group resources by the companies and provides
for centralized administrative, banking and credit services to be
performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by
members, coordinating the access of Thermo Electron and the
Thermo Subsidiaries (the "Thermo Group") to external financing
sources, ensuring compliance with external financial covenants
and internal financial policies, assisting in the formulation of
long-range planning and providing other banking and credit
services. Pursuant to the Charter, Thermo Electron may also
provide guarantees of debt or other obligations of the Thermo
Subsidiaries or may obtain external financing at the parent level
for the benefit of the Thermo Subsidiaries. In certain instances,
the Thermo Subsidiaries may provide credit support to, or on
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PAGE
behalf of, the consolidated entity or may obtain financing
directly from external financing sources. Under the Charter,
Thermo Electron is responsible for determining that the Thermo
Group remains in compliance with all covenants imposed by
external financing sources, including covenants related to
borrowings of Thermo Electron or other members of the Thermo
Group, and for apportioning such constraints within the Thermo
Group. In addition, Thermo Electron establishes certain internal
policies and procedures applicable to members of the Thermo
Group. The cost of the services provided by Thermo Electron to
the Thermo Subsidiaries is covered under existing corporate
services agreements between Thermo Electron and each of the
Thermo Subsidiaries.
The Charter presently provides that it shall continue in
effect so long as Thermo Electron and at least one Thermo
Subsidiary participate. The Charter may be amended at any time by
agreement of the participants. Any Thermo Subsidiary, including
the Corporation, can withdraw from participation in the Charter
upon 30 days' prior notice. In addition, Thermo Electron may
terminate a subsidiary's participation in the Charter in the
event the subsidiary ceases to be controlled by Thermo Electron
or ceases to comply with the Charter or the policies and
procedures applicable to the Thermo Group. A withdrawal from the
Charter automatically terminates the corporate services agreement
and tax allocation agreement (if any) in effect between the
withdrawing company and Thermo Electron. The withdrawal from
participation does not terminate outstanding commitments to third
parties made by the withdrawing company, or by Thermo Electron or
other members of the Thermo Group, prior to the withdrawal.
However, a withdrawing company is required to continue to comply
with all policies and procedures applicable to the Thermo Group
and to provide certain administrative functions mandated by
Thermo Electron so long as the withdrawing company is controlled
by or affiliated with Thermo Electron.
As provided in the Charter, the Corporation and Thermo
Electron have entered into a Corporate Services Agreement (the
"Services Agreement") under which Thermo Electron's corporate
staff provides certain administrative services, including certain
legal advice and services, risk management, employee benefit
administration, tax advice and preparation of tax returns,
centralized cash management and financial and other services to
the Corporation. The Corporation was assessed an annual fee
equal to 1.0% of the Corporation's revenues for these services in
calendar 1996. The fee is reviewed annually and may be changed by
mutual agreement of the Corporation and Thermo Electron. During
fiscal 1996, Thermo Electron assessed the Corporation $1,922,000
in fees under the Services Agreement. Management believes that
the charges under the Services Agreement are reasonable and that
the terms of the Services Agreement are fair to the Corporation.
For items such as employee benefit plans, insurance coverage and
other identifiable costs, Thermo Electron charges the Corporation
based on charges attributable to the Corporation. The Services
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PAGE
Agreement automatically renews for successive one-year terms,
unless canceled by the Corporation upon 30 days' prior notice. In
addition, the Services Agreement terminates automatically in the
event the Corporation ceases to be a member of the Thermo Group
or ceases to be a participant in the Charter. In the event of a
termination of the Services Agreement, the Corporation will be
required to pay a termination fee equal to the fee that was paid
by the Corporation for services under the Services Agreement for
the nine-month period prior to termination. Following
termination, Thermo Electron may provide certain administrative
services on an as-requested basis by the Corporation or as
required in order to meet the Corporation's obligations under
Thermo Electron's policies and procedures. Thermo Electron will
charge the Corporation a fee equal to the market rate for
comparable services if such services are provided to the
Corporation following termination.
The Corporation and Thermo Electron have a tax allocation
agreement under which the Corporation and its subsidiaries are
included in the consolidated federal and state income tax returns
filed by Thermo Electron. The agreement provides that in years
in which these entities have taxable income, the Corporation will
pay to Thermo Electron amounts comparable to the taxes it would
have paid if the Corporation had filed separate tax returns. In
years in which these entities incur a loss, Thermo Electron will
reimburse the Corporation the amount that the Corporation would
have received if it had filed separate tax returns. If Thermo
Electron's equity ownership of the Company were to drop below
80%, the Corporation would be required to file its own income tax
returns. In 1996, the Corporation paid Thermo Electron
approximately $12,625,000 under the tax allocation agreement.
As of December 28, 1996, $75,566,000 of the Corporation's
cash equivalents were invested in a repurchase agreement with
Thermo Electron. Under this agreement, the Corporation in effect
lends excess cash to Thermo Electron, which Thermo Electron
collateralizes with investments principally consisting of
corporate notes, U.S. government agency securities, money market
funds, commercial paper and other marketable securities, in the
amount of at least 103% of such obligation. The Corporation's
funds subject to the repurchase agreement are readily convertible
into cash by the Corporation and have a maturity of three months
or less. The repurchase agreement earns a rate based on the
90-day Commercial Paper Composite Rate plus 25 basis points, set
at the beginning of each quarter.
From time to time, the Corporation may transact business
with other companies in the Thermo Group. In fiscal 1996, these
transactions included the following.
The Corporation's Thermo Fiberprep subsidiary purchased
approximately $102,000 of mesh screens, used in its pulp
screening and cleaning systems, from Thermo Electron in 1996.
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PAGE
In December 1994, Thermo Electron subcontracted with the
Corporation's Fiberprep subsidiary to supply approximately
$16,000,000 in equipment and services over a two-year period for
an office wastepaper and de-inking facility. Thermo Electron is
the primary contractor on the construction of such facility. The
Corporation recorded revenues of $1,876,000 under this
subcontract in 1996.
Thermo Electron owned approximately 84% of the Corporation's
outstanding Common Stock on December 28, 1996. Thermo Electron
intends for the foreseeable future to maintain at least 80%
ownership of the Corporation. This may require the purchase by
Thermo Electron of additional shares of the Corporation's Common
Stock from time to time as the number of outstanding shares
issued by the Corporation increases. These purchases may be made
in the open market, directly from the Corporation or pursuant to
conversion of the Corporation's 3.5% Subordinated Convertible
Note due August 1, 1997 held by Thermo Electron.
As of December 28, 1996, the Corporation owed Thermo Electron
an aggregate of $17,609,000.
Stock Holding Assistance Plan
During 1996, the Human Resources Committee of the
Corporation's Board of Directors (the "Committee") established a
stock holding policy for executive officers of the Corporation.
The stock holding policy specifies an appropriate level of
ownership of the Corporation's Common Stock as a multiple of the
officer's compensation. For the chief executive officer, the
multiple is one times his base salary and reference bonus for the
calendar year. For all other officers, the multiple is one times
the officer's base salary. The Committee deemed it appropriate
to permit officers to achieve these ownership levels over a
three-year period.
In order to assist officers in complying with the policy,
the Committee also adopted a stock holding assistance plan under
which the Corporation is authorized to make interest-free loans
to officers to enable them to purchase shares of the Common Stock
in the open market. The loans are required to be repaid upon the
earlier of demand or the fifth anniversary of the date of the
loan, unless otherwise authorized by the Committee. During 1996,
Mr. Rainville received a loan in the principal amount of $118,104
under this plan to purchase 10,000 shares.
