Document:

Exhibit 10.3
                           THERMO ELECTRON CORPORATION

                          EXECUTIVE SEVERANCE AGREEMENT

THIS  AGREEMENT  by  and  between  THERMO  ELECTRON   CORPORATION,   a  Delaware
corporation (the "Company"), and Theo Melas-Kyriazi (the "Executive") is made as
of January 27, 2000 (the "Effective Date").

     WHEREAS,  the Company recognizes that the uncertainty  regarding the future
employment   prospects  for  key  personnel  may  result  in  the  departure  or
distraction   of  key  personnel  to  the  detriment  of  the  Company  and  its
stockholders;

     WHEREAS, the Board of Directors of the Company (the "Board") has determined
that appropriate  steps should be taken to reinforce and encourage the continued
employment  and  dedication of the Company's key personnel  without  distraction
from such uncertainty and related events and circumstances; and

     NOW, THEREFORE,  as an inducement for and in consideration of the Executive
remaining in its employ, the Company agrees that the Executive shall receive the
severance  benefits  set forth in this  Agreement  in the event the  Executive's
employment  with the Company is  terminated  under the  circumstances  described
below.

     1. Key Definitions.

         As used herein, the following terms shall have the following respective
meanings:

               1.1 "Change in Control" means an event or occurrence set forth in
any one or more of  subsections  (a)  through (d) below  (including  an event or
occurrence  that  constitutes a Change in Control under one of such  subsections
but is specifically exempted from another such subsection):

                    (a)  the  acquisition  by an  individual,  entity  or  group
(within the meaning of Section  13(d)(3) or 14(d)(2) of the Securities  Exchange
Act of 1934,  as  amended  (the  "Exchange  Act")) (a  "Person")  of  beneficial
ownership of any capital stock of the Company if, after such  acquisition,  such
Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange  Act) 40% or more of either (i) the  then-outstanding  shares of common
stock of the  Company  (the  "Outstanding  Company  Common  Stock")  or (ii) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding  Company Voting
Securities");  provided,  however, that for purposes of this subsection (a), the
following  acquisitions  shall  not  constitute  a Change  in  Control:  (i) any
acquisition by the Company,  (ii) any  acquisition by any employee  benefit plan
(or related  trust)  sponsored or maintained  by the Company or any  corporation
controlled by the Company, or (iii) any acquisition by any corporation  pursuant
to a transaction  which  complies with clauses (i) and (ii) of subsection (c) of
this Section 1.1; or

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                    (b) such time as the Continuing Directors (as defined below)
do not  constitute  a majority  of the Board (or,  if  applicable,  the Board of
Directors of a successor corporation to the Company), where the term "Continuing
Director"  means at any date a member  of the  Board (i) who was a member of the
Board on the date of the  execution of this  Agreement or (ii) who was nominated
or elected  subsequent  to such date by at least a majority of the directors who
were  Continuing  Directors at the time of such  nomination or election or whose
election to the Board was  recommended or endorsed by at least a majority of the
directors  who  were  Continuing  Directors  at the time of such  nomination  or
election;  provided, however, that there shall be excluded from this clause (ii)
any  individual  whose initial  assumption of office  occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened  solicitation of proxies or consents, by
or on behalf of a person other than the Board; or

                    (c)   the   consummation   of   a   merger,   consolidation,
reorganization,  recapitalization  or statutory  share  exchange  involving  the
Company or a sale or other disposition of all or substantially all of the assets
of the Company in one or a series of  transactions  (a "Business  Combination"),
unless,  immediately following such Business Combination,  each of the following
two conditions is satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding  Company Common Stock
and Outstanding  Company Voting  Securities  immediately  prior to such Business
Combination  beneficially  own,  directly  or  indirectly,  more than 60% of the
then-outstanding  shares of common  stock and the  combined  voting power of the
then-outstanding  securities  entitled  to vote  generally  in the  election  of
directors,  respectively,  of the  resulting  or acquiring  corporation  in such
Business  Combination (which shall include,  without  limitation,  a corporation
which as a result of such transaction  owns the Company or substantially  all of
the Company's assets either directly or through one or more subsidiaries)  (such
resulting  or  acquiring  corporation  is referred  to herein as the  "Acquiring
Corporation")  in  substantially   the  same  proportions  as  their  ownership,
immediately  prior to such  Business  Combination,  of the  Outstanding  Company
Common Stock and Outstanding Company Voting Securities,  respectively;  and (ii)
no Person (excluding the Acquiring  Corporation or any employee benefit plan (or
related  trust)  maintained  or  sponsored  by the  Company or by the  Acquiring
Corporation) beneficially owns, directly or indirectly,  40% or more of the then
outstanding  shares  of common  stock of the  Acquiring  Corporation,  or of the
combined  voting power of the  then-outstanding  securities of such  corporation
entitled to vote generally in the election of directors; or

                    (d)  approval  by  the  stockholders  of  the  Company  of a
complete liquidation or dissolution of the Company.

               1.2 "Cause" means the Executive's  willful  engagement in illegal
conduct or gross misconduct  which is materially and  demonstrably  injurious to
the  Company.  For purposes of this Section 1.2, no act or failure to act by the
Executive  shall be  considered  "willful"  unless it is done,  or omitted to be

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done, in bad faith and without  reasonable belief that the Executive's action or
omission was in the best interests of the Company.

     2. Term of Agreement. This Agreement, and all rights and obligations of the
parties  hereunder,  shall take effect upon the Effective  Date and shall expire
upon the first to occur of (a) the  expiration of the Term (as defined below) or
(b) the  fulfillment by the Company of all of its  obligations  under Sections 4
and 5.2 if the Executive's  employment with the Company  terminates prior to the
expiration  of the Term.  "Term"  shall  mean the  period  commencing  as of the
Effective Date and continuing in effect through December 31, 2002.

     3.  Not an  Employment  Contract.  The  Executive  acknowledges  that  this
Agreement  does not constitute a contract of employment or impose on the Company
any  obligation to retain the  Executive as an employee and that this  Agreement
does not prevent the Executive from terminating employment at any time.

     4. Benefits to Executive.

               4.1 Compensation.

               (a) Termination Without Cause. If the Executive's employment with
the  Company is  terminated  by the  Company  (other  than for  Cause)  then the
Executive shall be entitled to the following benefits:

                    (i) the Company  shall pay to the Executive in a lump sum in
cash within 30 days after the date of termination the aggregate of the following
amounts:

                         (1) the sum of (A) two  times  the  Executive's  annual
base salary as in effect  immediately prior to the date of termination,  and (B)
the  amount  of any  cash  compensation  previously  deferred  by the  Executive
(together  with any  accrued  interest  or  earnings  thereon)  and any  accrued
vacation pay, in each case to the extent not previously paid; and

                    (ii) for two years  after the date of  termination,  or such
longer period as may be provided by the terms of the appropriate plan,  program,
practice  or policy,  the  Company  shall  continue  to provide  benefits to the
Executive  and the  Executive's  family at least equal to those which would have
been provided to them if the Executive's employment had not been terminated,  in
accordance  with  the  applicable  benefit  plans  in  effect  on  the  date  of
termination or, if more favorable to the Executive and the  Executive's  family,
in effect generally at any time thereafter with respect to other peer executives
of the Company and its  affiliated  companies;  provided,  however,  that if the
Executive becomes  reemployed with another employer and is eligible to receive a
particular type of benefits (e.g., health insurance benefits) from such employer
on terms at least as favorable to the  Executive and the  Executive's  family as

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those  being  provided  by the  Company,  then the  Company  shall no  longer be
required  to  provide  those  particular  benefits  to  the  Executive  and  the
Executive's family;

                    (iii) to the extent not  previously  paid or  provided,  the
Company  shall  timely  pay or  provide to the  Executive  any other  amounts or
benefits  required to be paid or provided or which the  Executive is eligible to
receive  following the  Executive's  termination  of employment  under any plan,
program,  policy,  practice,  contract  or  agreement  of the  Company  and  its
affiliated  companies  (such other  amounts and  benefits  shall be  hereinafter
referred to as the "Other Benefits"); and

                    (iv) for purposes of  determining  eligibility  (but not the
time of commencement of benefits) of the Executive for retiree benefits to which
the Executive is entitled,  the  Executive  shall be considered to have remained
employed by the Company until two years after the date of termination.

               (b)  Termination  for  Cause.  If  the  Company   terminates  the
Executive's  employment  with the Company for Cause,  then the Company shall (i)
pay the  Executive,  in a lump  sum in cash  within  30 days  after  the date of
termination,  the sum of (A) the  Executive's  base  salary  through the date of
termination and (B) the amount of any cash compensation  previously  deferred by
the Executive,  in each case to the extent not  previously  paid and (ii) timely
pay or provide to the Executive the Other Benefits.

               4.2  Mitigation.  The Executive shall not be required to mitigate
the amount of any payment or benefits  provided for in this Section 4 by seeking
other  employment  or  otherwise.   Further,   except  as  provided  in  Section
4.1(a)(ii), the amount of any payment or benefits provided for in this Section 4
shall not be reduced by any compensation  earned by the Executive as a result of
employment by another employer,  by retirement  benefits,  by offset against any
amount claimed to be owed by the Executive to the Company or otherwise.

     5. Disputes.

               5.1  Settlement  of  Disputes;  Arbitration.  All  claims  by the
Executive for benefits under this Agreement  shall be directed to and determined
by the Board of Directors of the Company and shall be in writing.  Any denial by
the Board of  Directors of a claim for benefits  under this  Agreement  shall be
delivered to the  Executive in writing and shall set forth the specific  reasons
for the denial and the specific  provisions of this  Agreement  relied upon. The
Board of Directors shall afford a reasonable  opportunity to the Executive for a
review of the  decision  denying a claim.  Any  further  dispute or  controversy
arising under or in connection with this Agreement shall be settled  exclusively
by arbitration  in Boston,  Massachusetts,  in accordance  with the rules of the
American Arbitration  Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.

               5.2 Expenses.  The Company agrees to pay as incurred, to the full
extent permitted by law, all legal, accounting and other fees and expenses which

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the  Executive  may  reasonably  incur  as a  result  of any  claim  or  contest
(regardless  of the outcome  thereof) by the  Company,  the  Executive or others
regarding the validity or  enforceability  of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive  regarding the amount of any payment or benefits
pursuant to this  Agreement),  plus in each case interest on any delayed payment
at the  applicable  Federal rate  provided for in Section  7872(f)(2)(A)  of the
Internal Revenue Code.

     6. Successors.

               6.1 Successor to Company. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially  all of the business or assets of the Company  expressly to
assume and agree to perform  this  Agreement to the same extent that the Company
would be required to perform it if no such  succession had taken place.  As used
in this  Agreement,  "Company"  shall mean the Company as defined  above and any
successor  to its business or assets as  aforesaid  which  assumes and agrees to
perform this Agreement, by operation of law or otherwise.

               6.2 Successor to  Executive.  This  Agreement  shall inure to the
benefit  of  and  be   enforceable   by  the   Executive's   personal  or  legal
representatives,  executors,  administrators,  successors,  heirs, distributees,
devisees and legatees.  If the Executive should die while any amount would still
be payable to the Executive or the Executive's family hereunder if the Executive
had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in  accordance  with  the  terms  of this  Agreement  to the  executors,
personal representatives or administrators of the Executive's estate.

     7.  Notice.  All  notices,  instructions  and  other  communications  given
hereunder  or in  connection  herewith  shall be in  writing.  Any such  notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable
nationwide  overnight courier service, in each case addressed to the Company, at
81 Wyman Street, Waltham,  Massachusetts and to the Executive at the Executive's
principal  residence as currently reflected on the Company's records (or to such
other address as either the Company or the  Executive may have  furnished to the
other in  writing in  accordance  herewith).  Any such  notice,  instruction  or
communication shall be deemed to have been delivered five business days after it
is sent by registered  or certified  mail,  return  receipt  requested,  postage
prepaid,  or one  business  day  after  it is sent  via a  reputable  nationwide
overnight  courier  service.  Either party may give any notice,  instruction  or
other  communication  hereunder  using  any  other  means,  but no such  notice,
instruction or other  communication  shall be deemed to have been duly delivered
unless and until it actually is received by the party for whom it is intended.

<PAGE>

     8. Miscellaneous.

               8.1  Severability.  The  invalidity  or  unenforceability  of any
provision of this Agreement shall not affect the validity or  enforceability  of
any other  provision  of this  Agreement,  which shall  remain in full force and
effect.

               8.2 Injunctive  Relief.  The Company and the Executive agree that
any breach of this  Agreement  by the  Company is likely to cause the  Executive
substantial  and  irrevocable  damage  and  therefore,  in the event of any such
breach, in addition to such other remedies which may be available, the Executive
shall have the right to specific performance and injunctive relief.

               8.3 Governing Law. The validity, interpretation, construction and
performance  of this  Agreement  shall be governed by the  internal  laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles.

               8.4 Waivers. No waiver by the Executive at any time of any breach
of, or compliance  with,  any provision of this Agreement to be performed by the
Company  shall  be  deemed  a  waiver  of that  or any  other  provision  at any
subsequent time.

               8.5 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but both of which together shall
constitute one and the same instrument.

               8.6 Tax Withholding. Any payments provided for hereunder shall be
paid net of any applicable  tax  withholding  required  under federal,  state or
local law.

               8.7  Entire  Agreement.  This  Agreement  sets  forth the  entire
agreement  of the  parties  hereto in respect of the  subject  matter  contained
herein and supersedes all prior agreements,  promises, covenants,  arrangements,
communications,  representations or warranties,  whether oral or written, by any
officer,  employee  or  representative  of any party  hereto in  respect  of the
subject matter contained  herein,  and any prior agreement of the parties hereto
in respect of the  subject  matter  contained  herein is hereby  terminated  and
cancelled,  except  as  provided  in  the  next  sentence.  Notwithstanding  the
foregoing  sentence,  if the Executive is party to an agreement with the Company
providing  for the  payment of benefits in the event  employment  is  terminated
after a Change in Control (a "Change  in  Control  Agreement"),  such  Change in
Control  Agreement  shall not be terminated  or cancelled by this  Agreement and
such  Change  in  Control  Agreement  shall  survive  and  remain  in  effect in
accordance  with its own terms.  In the event the  Executive  actually  receives
benefits under the Change in Control Agreement,  the Executive shall not also be
entitled to receive benefits under this Agreement.

               8.8 Amendments. This Agreement may be amended or modified only by
a written instrument executed by both the Company and the Executive.
<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first set forth above.

                                THERMO ELECTRON CORPORATION

                                By:     /s/ Anne Pol
                                        ------------------------------------
                                        Anne Pol
                                        Senior Vice President, Human Resources

                                EXECUTIVE:

                                        /s/ Theo Melas-Kyriazi
                                        -----------------------------------
                                        Theo Melas-KyriaziExhibit 10.7

                           THERMO ELECTRON CORPORATION

                           DIRECTORS STOCK OPTION PLAN

            As amended and restated effective as of February 7, 2002

1. Purpose

     The purpose of this  Directors  Stock  Option  Plan (the  "Plan") of Thermo
Electron 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 one
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
675,000 shares of the Company's  Common Stock (the "Common  Stock"),  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.

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 1993,
shall be granted an option to purchase 1,000 shares of Common Stock at the close

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of business on the date of such Annual Meeting.

     B. General Terms and Conditions Applicable to All Grants.

          1.   Options  shall be  immediately  exercisable  at any time from and
               after the grant date and prior to the date which is the  earliest
               of:

               (a) seven years  after the grant date,  (b) three years after the
               Optionee  ceases to serve as a director  of the  Company,  or any
               subsidiary  of the  Company  (one year in the event the  Optionee
               ceases to meet the  requirements  of this Subsection by reason of
               his or her 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.

          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 the instructions described in
"The  Guide for  Employees  of  Thermo  Electron  Stock  Option  Plans"  and any
supplement thereto as they may be amended from time to time (the "Guide").  Upon
exercise of the option in accordance with the aforementioned  instructions,  the
Company  shall  deliver or cause to be  delivered  to the Optionee 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.

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     B. Tax Withholding

     No later  than the date on  which  part or all of the  value of any  shares
received upon the exercise of an option first  becomes  includible in your gross
income for income tax purposes,  you shall satisfy your  obligations  to pay any
federal,  state or local  taxes  required to be  withheld  with  respect to such
income in  accordance  with the  provisions  of the Guide.  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

     Except as may be authorized by the Board, in its sole discretion, no Option
may be transferred  other than by will or the laws of descent and  distribution,
and during an Optionee's  lifetime an Option may be exercised only by him or her
(or in the event of incapacity,  the person or persons properly appointed to act
on his or her behalf). The Board may, in its discretion, determine the extent to
which Options granted to an Optionee shall be transferable,  and such provisions
permitting or acknowledging transfer shall be set forth in the written agreement
evidencing the Option  executed and delivered by or on behalf of the Company and
the Optionee.

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.

9. Adjustments in the Event of Certain Transactions

     (a) In the event of a stock dividend, stock split or combination of shares,
or other  distribution with respect to holders of Common Stock other than normal
cash dividends,  the Board will make (i) appropriate  adjustments to the maximum
number of shares that may be delivered under the Plan under Section 4 above, and
(ii)  appropriate  adjustments  to the  number  and kind of  shares  of stock or
securities  subject to Options then  outstanding or  subsequently  granted,  any
exercise prices relating to Options and any other provisions of Options affected
by such change.

     (b) In the event of any recapitalization, merger or consolidation involving
the  Company,  any  transaction  in which the Company  becomes a  subsidiary  of
another entity, any sale or other disposition of all or a substantial portion of
the assets of the  Company or any  similar  transaction,  as  determined  by the
Board,  the  Board  in  its  discretion  may  make  appropriate  adjustments  to
outstanding  Awards,   including,   without   limitation:   (i)  accelerate  the
exercisability of the Option, or (ii) adjust the terms of the Option (whether or
not in a manner that complies  with the  requirements  of Section  424(a) of the
Internal Revenue Code of 1986, as amended (the "Code")),  or (iii) if there is a
survivor or acquiror  entity,  provide for the  assumption of the Option by such
survivor  or acquiror  or an  affiliate  thereof or for the grant of one or more
replacement  options by such  survivor or acquiror or an affiliate  thereof,  in
each case on such terms (which may, but need not,  comply with the  requirements

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<PAGE>

of Section 424(a) of the Code) as the Board may determine, or (iv) terminate the
Option  (provided,  that if the  Board  terminates  the  Option,  it  shall,  in
connection  therewith,  either (A) accelerate the  exercisability  of the Option
prior to such  termination,  or (B)  provide  for a payment to the holder of the
Option of cash or other  property or a combination  of cash or other property in
an amount  reasonably  determined by the Board to  approximate  the value of the
Option  assuming an exercise  immediately  prior to the  transaction,  or (C) if
there is a survivor  or  acquiror  entity,  provide for the grant of one or more
replacement options pursuant to clause (iii) above), or (v) provide for none of,
or any combination of, the foregoing.

     (c) No fraction of a share or  fractional  shares shall be  purchasable  or
deliverable pursuant to this Section 9.

10. Limitation of Rights in Option Stock

     The Optionee  shall have no rights as a stockholder in respect of shares as
to which his or her 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

                                       4
<PAGE>

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 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

     A. Impact of Event

     In the event of a "Change in  Control"  as defined  in Section  13(A),  the
following  provisions  shall apply,  unless the agreement  evidencing  the Award
otherwise provides (by specific explicit reference to Section 13(B) below). If a
Change in Control occurs while any Options are outstanding, then, effective upon
the  Change in  Control,  each  outstanding  Option  under the Plan that was not
previously  exercisable and vested shall become immediately  exercisable in full
and will no longer be subject to a right of repurchase by the Company.

     B. Definition of "Change in Control"

     "Change in Control"  means an event or  occurrence  set forth in any one or
more of subsections (a) through (d) below (including an event or occurrence that
constitutes  a  Change  in  Control  under  one  of  such   subsections  but  is
specifically exempted from another such subsection):

     (a) the  acquisition by an individual,  entity or group (within the meaning
of Section  13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial
ownership  of  any  capital  stock  of  Thermo  Electron   Corporation  ("Thermo
Electron") if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3  promulgated under the Exchange Act) 40% or more of either
(i) the  then-outstanding  shares  of  common  stock  of  Thermo  Electron  (the
"Outstanding  TMO  Common  Stock")  or (ii)  the  combined  voting  power of the
then-outstanding securities of Thermo Electron entitled to vote generally in the
election of  directors  (the  "Outstanding  TMO Voting  Securities");  provided,
however,  that for purposes of this subsection  (a), the following  acquisitions
shall  not  constitute  a Change  in  Control:  (i) any  acquisition  by  Thermo
Electron,  (ii) any acquisition by any employee  benefit plan (or related trust)
sponsored or  maintained  by Thermo  Electron or any  corporation  controlled by
Thermo  Electron,  or (iii) any  acquisition  by any  corporation  pursuant to a
transaction  which  complies with clauses (i) and (ii) of subsection (c) of this
definition; or

     (b)  such  time as the  Continuing  Directors  (as  defined  below)  do not
constitute a majority of the Board of Directors of Thermo  Electron (the "Thermo
Board") (or, if applicable, the Board of Directors of a successor corporation to
Thermo  Electron),  where  the term  "Continuing  Director"  means at any date a
member of the Thermo  Board (i) who was a member of the Thermo  Board as of July
1, 1999 or (ii) who was nominated or elected subsequent to such date by at least
a majority of the  directors who were  Continuing  Directors at the time of such
nomination or election or whose election to the Thermo Board was  recommended or
endorsed by at least a majority of the directors who were  Continuing  Directors
at the time of such nomination or election;  provided, however, that there shall

                                       5
<PAGE>

be excluded from this clause (ii) any  individual  whose  initial  assumption of
office  occurred as a result of an actual or  threatened  election  contest with
respect to the election or removal of  directors  or other actual or  threatened
solicitation of proxies or consents,  by or on behalf of a person other than the
Thermo Board; or

     (c)  the   consummation   of  a  merger,   consolidation,   reorganization,
recapitalization or statutory share exchange involving Thermo Electron or a sale
or  other  disposition  of all or  substantially  all of the  assets  of  Thermo
Electron in one or a series of transactions (a "Business Combination"),  unless,
immediately  following  such  Business  Combination,  each of the  following two
conditions is satisfied:  (i) all or  substantially  all of the  individuals and
entities who were the beneficial  owners of the Outstanding TMO Common Stock and
Outstanding TMO Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly,  more than 60% of the then-outstanding
shares of common  stock and the combined  voting  power of the  then-outstanding
securities   entitled  to  vote   generally  in  the   election  of   directors,
respectively,  of the  resulting  or  acquiring  corporation  in  such  Business
Combination (which shall include,  without limitation,  a corporation which as a
result of such transaction  owns Thermo Electron or substantially  all of Thermo
Electron's  assets either  directly or through one or more  subsidiaries)  (such
resulting  or  acquiring  corporation  is referred  to herein as the  "Acquiring
Corporation")  in  substantially   the  same  proportions  as  their  ownership,
immediately  prior to such Business  Combination,  of the Outstanding TMO Common
Stock and Outstanding TMO Voting  Securities,  respectively;  and (ii) no Person
(excluding the Acquiring  Corporation  or any employee  benefit plan (or related
trust)   maintained  or  sponsored  by  Thermo  Electron  or  by  the  Acquiring
Corporation) beneficially owns, directly or indirectly,  40% or more of the then
outstanding  shares  of common  stock of the  Acquiring  Corporation,  or of the
combined  voting power of the  then-outstanding  securities of such  corporation
entitled to vote generally in the election of directors; or

     (d)  approval  by  the  stockholders  of  Thermo  Electron  of  a  complete
liquidation or dissolution of Thermo Electron.

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.

                                       6
<PAGE>

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 State of Delaware.

                                       7

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