PERSONALLY ON THE MERGER AGREEMENT AT THE SPECIAL MEETING.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" ADOPTION OF THE MERGER AGREEMENT. IN CONSIDERING THE RECOMMENDATION OF THE BOARD OF DIRECTORS WITH RESPECT TO THE MERGER, STOCKHOLDERS OTHER THAN THERMO ELECTRON AND THE DIRECTORS AND OFFICERS OF THERMO TERRATECH AND THERMO ELECTRON (THE "'PUBLIC STOCKHOLDERS") SHOULD BE AWARE THAT CERTAIN OFFICERS AND DIRECTORS OF THERMO TERRATECH HAVE CERTAIN INTERESTS THAT ARE IN ADDITION TO, OR DIFFERENT FROM, THE INTERESTS OF THE PUBLIC STOCKHOLDERS. SEE "THE MERGER--CONFLICTS OF INTEREST."

IF A PROPERLY EXECUTED PROXY CARD IS SUBMITTED AND NO INSTRUCTIONS ARE GIVEN, THE SHARES OF TERRATECH COMMON STOCK REPRESENTED BY THAT PROXY WILL BE VOTED "FOR" ADOPTION OF THE MERGER AGREEMENT.

PLEASE DO NOT SEND YOUR STOCK CERTIFICATES TO THERMO TERRATECH AT THIS TIME.

QUESTIONS AND ANSWERS ABOUT THE MERGER

1. WHEN AND WHERE IS THE THERMO TERRATECH SPECIAL MEETING?

The Special Meeting will take place on , 2000, at 10:00 a.m., local time, at the offices of Thermo Electron Corporation, 81 Wyman Street, Waltham, Massachusetts 02454.

2. WHAT PROPOSALS ARE THERMO TERRATECH STOCKHOLDERS VOTING ON?

Thermo TerraTech stockholders are being asked to adopt the Merger Agreement. The Merger Agreement provides that a wholly owned subsidiary of Thermo Electron will merge with and into Thermo TerraTech and, as a result, Thermo Electron will own all of the outstanding Common Stock of Thermo TerraTech.

3. WHAT WILL THERMO TERRATECH STOCKHOLDERS RECEIVE IN THE MERGER?

In the Merger, Thermo TerraTech stockholders will receive 0.4 share of Thermo Common Stock for each share of TerraTech Common Stock owned by them (as adjusted the "Exchange Ratio"). The Exchange Ratio may be adjusted, as follows:

- If the average of the closing prices as reported in the consolidated transaction reporting system of shares of the Thermo Common Stock for each of the 20 consecutive trading days ending on the fifth trading day prior to the effective date of the Merger (the "Pre-Closing Average Price") multiplied by the Exchange Ratio is less than $7.25, then the Exchange Ratio shall be adjusted to be equal to $7.25 divided by the Pre-Closing Average Price, provided that Thermo Electron may terminate the Merger Agreement if it would be required to issue more than 1,800,000 shares of Thermo Common Stock as a result of this adjustment.

- If the Pre-Closing Average Price multiplied by the Exchange Ratio is greater than $9.25, the Exchange Ratio will be adjusted to be equal to $9.25 divided by the Pre-Closing Average Price.

In other words:

(i) If during the 20 trading days ending on the fifth trading day prior to the effective date of the Merger, the average closing price of Thermo Common Stock is less than $18.125, Thermo TerraTech stockholders would receive Thermo Common Stock worth the equivalent of $7.25 per share of TerraTech Common Stock (however, Thermo Electron may elect to terminate the Merger Agreement if it would be required to issue more than 1,800,000 shares of Thermo Common Stock in the transaction).

(ii) If the average closing price of Thermo Common Stock is between $18.125 and $23.125, each share of Common Stock would be exchanged for 0.4 shares of Thermo Common Stock.

(iii) If the average closing price of Thermo Common Stock is greater than $23.125, Thermo TerraTech shareholders would receive Thermo Common Stock worth the equivalent of $9.25 per share of Common Stock.

On April 30, 1999, the last day before the public announcement of Thermo Electron's proposal to take Thermo TerraTech private (no price having been determined as of that date, and, accordingly, no exchange ratio or financial terms announced as of that date) on which the TerraTech Common Stock traded, the closing price of TerraTech Common Stock reported in the consolidated transaction reporting system was $4.1875; on May 4, 1999, the last trading day before the public announcement of Thermo Electron's proposal to take Thermo TerraTech private, the closing price of Thermo Common Stock reported in the consolidated transaction reporting system was $16.25; on October 19, 1999 (the last trading day before the announcement of the financial terms of the proposed Merger), the closing prices of TerraTech Common Stock and Thermo Common Stock reported in the consolidated transaction reporting

system were $5.375 and $13.0625, respectively; and on , 1999 (the most recent practicable date prior to the printing of this Proxy Statement-Prospectus), the closing prices of TerraTech Common Stock and Thermo Common Stock reported in the consolidated transaction reporting system were $ and $ , respectively.

4. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER?

The Merger is intended to qualify as a reorganization under the Internal Revenue Code. Accordingly, no gain or loss will generally be recognized by Thermo TerraTech, Thermo Electron or the Merger Sub as a result of the Merger. Additionally, no gain or loss will generally be recognized by Thermo TerraTech stockholders to the extent they receive shares of Thermo Common Stock in the Merger. In general, however, Thermo TerraTech stockholders will recognize taxable gain to the extent they receive cash in lieu of fractional shares in the Merger. Thermo TerraTech stockholders should consult their tax advisors for a full understanding of the tax consequences of the Merger.

5. WHY IS THERMO TERRATECH'S BOARD OF DIRECTORS RECOMMENDING ADOPTION OF THE TRANSACTION?

Thermo TerraTech's Board of Directors believes, based on the recommendation of its Special Committee, that the proposed transaction is fair to and in the best interests of, Thermo TerraTech and its stockholders other than Thermo Electron and the directors and officers of Thermo TerraTech and Thermo Electron (the "Public Stockholders").

6. ARE THERE RISKS I SHOULD CONSIDER IN DECIDING WHETHER TO VOTE FOR THE MERGER?

Yes. In evaluating the Merger, you should carefully consider the factors discussed in the section entitled "Risk Factors" on page .

7. AM I ENTITLED TO DISSENTERS' OR APPRAISAL RIGHTS?

Under Delaware law, holders of TerraTech Common Stock are not entitled to dissenters' or appraisal rights in the Merger.

8. WHAT STOCKHOLDER VOTE IS REQUIRED TO ADOPT THE MERGER AGREEMENT?

Under Delaware law and the charter documents of Thermo TerraTech, a majority of the outstanding shares of TerraTech Common Stock entitled to vote must vote to adopt the Merger Agreement. Thermo Electron owns approximately 87% of the outstanding TerraTech Common Stock and has agreed to vote in favor of adoption of the Merger Agreement. Accordingly, the stockholder vote adopting the Merger Agreement is assured.

9. WHAT HAPPENS IF I DO NOT INSTRUCT A BROKER HOLDING MY SHARES AS TO HOW TO VOTE THEM OR I ABSTAIN FROM VOTING?

If your shares are held by a broker as nominee, your broker will not be able to vote your shares without instructions from you. If your broker is unable to vote your shares or if you abstain, it will have the effect of voting against adoption of the Merger Agreement under Delaware law; however, as indicated above, Thermo Electron owns sufficient shares to satisfy the Delaware law voting requirement.

10. WHO IS ENTITLED TO VOTE?

Holders of record of TerraTech Common Stock at the close of business on , 1999, the record date for the Special Meeting, are entitled to vote at the Special Meeting.

11. WHEN IS THE MERGER EXPECTED TO BE COMPLETED?

We are working to complete all aspects of the Merger as quickly as possible. If adopted by the stockholders, we currently expect the Merger to be completed by , 2000.

12. WHAT DO I NEED TO DO NOW?

After you have carefully read this Proxy Statement-Prospectus, please complete, sign and mail your Proxy Card in the enclosed return envelope as soon as possible. That way, your shares can be represented at the Special Meeting. If your shares are held by a broker as nominee, you should receive a Proxy Card from your broker.

Thermo TerraTech stockholders must return their Proxy Cards before the Special Meeting or attend the Special Meeting in order for their votes to be counted at the Special Meeting.

13. CAN I CHANGE MY VOTE AFTER I HAVE MAILED IN MY SIGNED PROXY CARD?

You may change your vote at any time before the vote takes place at the Special Meeting. To do so, you can attend the Special Meeting and vote in person, complete and send a new Proxy Card with a later date or send a written notice stating you would like to revoke your proxy. The notice should be sent to: Thermo TerraTech Inc., c/o Thermo Electron Corporation, 81 Wyman Street, Waltham, MA 02454-9046, Attention: Corporate Secretary.

14. SHOULD I SEND IN MY THERMO TERRATECH STOCK CERTIFICATES NOW?

No. You should continue to hold your certificates for TerraTech Common Stock. If the Merger is completed, you will receive a package containing instructions on how to exchange your shares of TerraTech Common Stock for Thermo Common Stock.

15. WILL THERMO TERRATECH'S 4 5/8% CONVERTIBLE SUBORDINATED DEBENTURES BE EXCHANGED IN THE MERGER?

No. However, following the Merger, holders of the debentures will have the right to convert their debentures into Thermo Common Stock, rather than into TerraTech Common Stock. Holders of the debentures will not have the right to cause Thermo TerraTech to redeem the debentures in connection with the Merger. See "THE MERGER--Effect of the Merger on Thermo TerraTech Stock Options, Warrants and Debentures."

16. WHAT WILL HAPPEN TO THE THERMO TERRATECH STOCK OPTIONS AND WARRANTS?

Options and warrants to purchase TerraTech Common Stock outstanding on the effective date of the Merger, whether or not the options are then exercisable, will be assumed by Thermo Electron and converted into options or warrants, as the case may be, to purchase shares of Thermo Common Stock.

17. WHO SHOULD I CALL IF I HAVE ANY ADDITIONAL QUESTIONS?

You should call Thermo TerraTech Investor Relations at (781) 622-1111.

18. WHAT OTHER MATTERS WILL BE VOTED ON AT THE SPECIAL MEETING?

We do not expect to ask you to vote on any other matters at the Special Meeting. If you are voting by proxy, however, we ask that you give the proxies listed in the Proxy Card the power to act in their discretion upon any other matters that may come before the Special Meeting.

THE MERGER SUB

The Merger Sub is a newly-formed Delaware corporation organized at the direction of Thermo Electron for the sole purpose of effecting the Merger and has not conducted any prior business.

The principal executive offices of the Merger Sub are located at 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02454-9046, and its telephone number is (781) 622-1000.

THE MERGER

The Merger Agreement provides that, subject to satisfaction of certain conditions, the Merger Sub will be merged with and into Thermo TerraTech, and that following the Merger, the separate existence of the Merger Sub will cease and Thermo TerraTech will continue as the Surviving Corporation. At the effective time of the Merger, which shall be the date and time of filing of the Certificate of Merger with the Secretary of State of the State of Delaware (the "Effective Time") (and the date on which the Effective Time occurs being the "Effective Date"), and subject to the terms and conditions set forth in the Merger Agreement, each share of issued and outstanding TerraTech Common Stock (other than shares held by Thermo TerraTech in treasury and shares held by Thermo Electron) will, by virtue of the Merger, be canceled and converted into the right to receive the Exchange Ratio, subject to adjustment as described

below. As a result of the Merger, the TerraTech Common Stock will no longer be publicly traded and will be 100% owned by Thermo Electron. See "THE MERGER."

The Exchange Ratio may be adjusted, as follows:

- If the average of the closing prices as reported in the consolidated transaction reporting system of shares of the Thermo Common Stock for each of the 20 consecutive trading days ending on the fifth trading day prior to the Effective Time (the "Pre-Closing Average Price") multiplied by the Exchange Ratio is less than $7.25 (the "Floor Price"), then the Exchange Ratio shall be adjusted to be equal to $7.25 divided by the Pre-Closing Average Price, provided that Thermo Electron may terminate the Merger Agreement if it would be required to issue more than 1,800,000 shares of Thermo Common Stock as a result of this adjustment.

- If the Pre-Closing Average Price multiplied by the Exchange Ratio is greater than $9.25, the Exchange Ratio will be adjusted to be equal to $9.25 divided by the Pre-Closing Average Price.

The Floor Price ($7.25 per share) represents a premium of (i) approximately 73% over the closing price of the TerraTech Common Stock reported in the consolidated transaction reporting system on April 30, 1999, the last day on which trading in the TerraTech Common Stock occurred prior to Thermo Electron's first public announcement of a proposal to take Thermo TerraTech private (no price having been determined and, accordingly, no exchange ratio or financial terms announced as of that date) and (ii) approximately 35% over the closing price of the TerraTech Common Stock reported in the consolidated transaction reporting system on October 19, 1999, the last trading day immediately prior to the public announcement of the financial terms of Thermo Electron's proposal.

EFFECTIVE TIME OF THE MERGER AND PAYMENT FOR SHARES

The Effective Time is currently expected to occur as soon as practicable after the Special Meeting, subject to adoption of the Merger Agreement at the Special Meeting and satisfaction or waiver of the terms and conditions of the Merger Agreement. See "--Conditions to the Merger, Termination and Expenses" and "THE MERGER--Conditions." Detailed instructions with regard to the surrender of stock certificates, together with a letter of transmittal, will be forwarded to stockholders by Thermo TerraTech's transfer agent, American Stock Transfer and Trust Company (the "Exchange Agent"), promptly following the Effective Time. Stockholders should not submit their stock certificates to the Exchange Agent until they have received such materials. The Exchange Agent will send certificates for Thermo Common Stock to Thermo TerraTech stockholders as promptly as practicable following receipt by the Exchange Agent of their stock certificates and other required documents. See "THE MERGER--Conversion of Securities." Stockholders should not send any stock certificates to Thermo Electron, Thermo TerraTech or the Exchange Agent at this time.

EFFECT OF THE MERGER ON THERMO TERRATECH STOCK OPTIONS, WARRANTS AND DEBENTURES

At the Effective Time, each outstanding option to purchase shares of TerraTech Common Stock (each, a "Thermo TerraTech Stock Option") under the TerraTech Stock Option Plans (as defined below), whether or not exercisable, will be assumed by Thermo Electron. Each Thermo TerraTech Stock Option so assumed by Thermo Electron will continue to have, and be subject to, the same terms and conditions set forth in the applicable Thermo TerraTech Stock Option Plan immediately prior to the Effective Time, except that (i) each Thermo TerraTech Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Thermo Common Stock equal to the product of the number of shares of TerraTech Common Stock that were issuable upon exercise of such Thermo TerraTech Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio and
(ii) the per share exercise price for the shares of Thermo Common Stock issuable upon exercise of such assumed Thermo TerraTech Stock Option will be equal to the quotient determined by dividing the exercise price per share of TerraTech Common Stock at which such Thermo TerraTech Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.

In addition, at the Effective Time, all warrants to purchase TerraTech Common Stock then outstanding shall be converted at the Effective Time into warrants to purchase Thermo Common Stock. The number of whole shares of Thermo Common Stock for which each warrant will be exercisable (or will become exercisable in accordance with its terms) and the per share exercise price for the shares of Thermo Common Stock issuable upon exercise of such Thermo TerraTech warrant will be determined in accordance with the terms of such warrants.

The consummation of the Merger will also make Thermo TerraTech's 4 5/8% convertible subordinated debentures due May 1, 2003 (the "4 5/8% Debentures") convertible into shares of Thermo Common Stock, rather than into the TerraTech Common Stock into which the debentures are now convertible. Such 4 5/8% Debentures are currently convertible into TerraTech Common Stock at a price of $15.90 per share. An aggregate of $111,850,000 principal amount of the 4 5/8% Debentures was outstanding as of October 2, 1999. Holders of the 4 5/8% Debentures will not have the right to cause Thermo TerraTech to redeem the debentures as a result of the Merger. Assuming an Exchange Ratio of .55, following the Merger the 4 5/8% Debentures will be convertible into Thermo Common Stock at a conversion price of $28.91 per share.

See "THE MERGER--Effect of the Merger on Thermo TerraTech Stock Options, Warrants and Debentures."

THE SPECIAL COMMITTEE'S AND THE BOARD'S RECOMMENDATION

In May 1999, the Board appointed a committee (the "Special Committee") of one director, Mr. Polyvios Vintiadis (who is not an officer or employee of Thermo TerraTech, the Merger Sub or Thermo Electron and who is not a director of Thermo Electron or the Merger Sub), to act on behalf of, and in the interests of, the Public Stockholders in his review of and evaluation of the proposed Merger. See "SPECIAL FACTORS--The Special Committee's and the Board's Recommendation." Mr. Vintiadis does not own any shares of TerraTech Common Stock outright; however, he does hold options to acquire 6,300 shares of TerraTech Common Stock, with exercise prices ranging from $4.16 to $10.03, which will be assumed by Thermo Electron and converted into options to acquire shares of Thermo Common Stock on the same terms as all the other holders of Thermo TerraTech Stock Options. See "THE MERGER--Effect of the Merger on Thermo TerraTech Stock Options, Warrants and Debentures." Further, deferred units equal to 10,716 shares of TerraTech Common Stock have accumulated under the Company's deferred compensation plan for outside directors for the benefit of Mr. Vintiadis, which units will be converted into the right to receive 5,893.8 shares of Thermo Common Stock (assuming an Exchange Ratio of .55 shares of Thermo Common Stock, as would have been the case had the Pre-Closing Average Price been $13.1875, which was the closing price of the Thermo Common Stock on October 25, 1999). See "THE MERGER--Deferred Compensation Plan for Directors."

At the conclusion of its review and evaluation of the proposed Merger, on October 19, 1999, the Special Committee recommended to Thermo TerraTech's Board that the Merger Agreement be approved and that it be recommended to the stockholders of Thermo TerraTech for adoption. In connection with its recommendation, the Special Committee considered the opinion of Adams, Harkness & Hill, Inc. ("Adams, Harkness & Hill"), that the consideration of 0.4 shares of Thermo Common Stock for each share of TerraTech Common Stock under the Merger Agreement (subject to adjustment as provided therein) was fair, from a financial point of view, as of the date of its opinion, to the Public Stockholders. See "THE MERGER--Opinion of Adams, Harkness & Hill." As part of its deliberations, the Special Committee determined that the Merger is substantively and procedurally fair to the Public Stockholders.

Following the recommendation of the Special Committee, the Board of Directors approved the Merger Agreement, declared its advisability and recommended that the stockholders of Thermo TerraTech adopt the Merger Agreement. In connection with its recommendation, the Board also adopted the findings and recommendation of the Special Committee with regard to both the substantive and procedural fairness of the Merger. In reaching their respective decisions to recommend adoption of the Merger Agreement, the Special Committee and the Board also considered the factors set forth elsewhere in this Proxy Statement. See "THE MERGER--The Special Committee's and the Board's Recommendation."

In considering the recommendations of the Board of Directors with respect to the Merger, the Public Stockholders should be aware that certain officers and directors of Thermo TerraTech have certain interests that are in addition to, or different from, the interests of the Public Stockholders. See "THE MERGER--Conflicts of Interest."

The Special Committee and the Board recommend that the Thermo TerraTech stockholders vote "FOR" adoption of the Merger Agreement.

OPINION OF ADAMS, HARKNESS & HILL

Adams, Harkness & Hill provided its opinion to the Special Committee on October 19, 1999, that, as of the date of such opinion, the consideration to be received in the Merger was fair, from a financial point of view, to the Public Stockholders of the Company. The full text of the written opinion of Adams, Harkness & Hill dated October 19, 1999, which sets forth assumptions made, matters considered and limitations on the review undertaken in connection with the opinion, is attached hereto as Appendix B and is incorporated herein by reference. The opinion of Adams, Harkness & Hill referred to herein does not constitute a recommendation as to how any stockholder should vote with respect to the Merger. Holders of shares of TerraTech Common Stock are urged to, and should, read the opinion in its entirety. See "THE MERGER--Opinion of Adams, Harkness & Hill."

The Special Committee retained Adams, Harkness & Hill to assist it in its evaluation of the proposed Merger. Pursuant to the terms of Adams, Harkness & Hill's engagement letter with the Special Committee, the Company paid Adams, Harkness & Hill a retainer fee of $50,000 and a fee of $87,500 upon the delivery of its written fairness opinion dated October 19, 1999 (which fee was payable regardless of the conclusions expressed therein). In addition, the Company has agreed to pay Adams, Harkness & Hill an additional $50,000 if the Special Committee requests an additional fairness opinion in connection with a new or materially revised transaction. The Company has also agreed to reimburse Adams, Harkness & Hill for all reasonable fees and disbursements of its counsel and all of its reasonable travel and other out-of-pocket expenses arising in connection with its engagement, and to indemnify Adams, Harkness & Hill and its affiliates to the full extent permitted by law against liabilities relating to or arising out of its engagement, except for liabilities found to have resulted from the bad faith, willful misconduct or gross negligence of Adams, Harkness & Hill.

The Merger Agreement provides that it is a condition to the obligations of Thermo TerraTech to effect the Merger that Adams, Harkness & Hill shall reaffirm orally its written opinion as of the date of mailing of this Proxy Statement-Prospectus and at the Effective Time.

PURPOSE AND REASONS OF THERMO ELECTRON FOR THE MERGER

The purpose of Thermo Electron for engaging in the transactions contemplated by the Merger Agreement is for Thermo Electron to acquire all of the outstanding shares of TerraTech Common Stock. In determining to acquire such shares of TerraTech Common Stock at this time, Thermo Electron considered the following factors: (i) recent public capital market trends affecting micro-cap companies;
(ii) the latest market trends in the markets in which the Company competes, primarily the environmental-liability and resource-management services industry;
(iii) the debt owed by the Company, including the debt owed to Thermo Electron;
(iv) the reduction in the amount of public information available to competitors about Thermo TerraTech's business that would result from the termination of the Company's obligations as a reporting company to the Securities and Exchange Commission (the "Commission"), (v) the elimination of additional burdens on management associated with public reporting and other tasks resulting from the Company's public company status, including, for example, the dedication of time and resources of management and of the Board to stockholder and analyst inquiries, and investor and public relations; (vi) the decrease in costs, particularly those associated with being a public company (for example, as a privately-held entity, the Company would no longer be required to file quarterly, annual or other periodic

reports with the Commission or publish and distribute to its stockholders annual reports and proxy statements), that Thermo Electron anticipates could result in savings of approximately $450,000 per year, including the approximate cost of associated legal and accounting fees; and (vii) the greater flexibility that the Company's management would have to focus on long-term business goals, as opposed to quarterly earnings, as a non-reporting company.

Thermo Electron also considered the advantages and disadvantages of certain alternatives to taking Thermo TerraTech private, including leaving Thermo TerraTech as a public majority-owned subsidiary. Thermo Electron considered the number of Thermo TerraTech shares held by the Public Stockholders, recent trends in the price of the TerraTech Common Stock and the relative lack of liquidity for the TerraTech Common Stock. Thermo Electron also reviewed the net overall cost of the transaction and its benefits. Thermo Electron also explored the impact on its own common stock of the issuance of shares proposed to be used for this transaction. In addition, Thermo Electron considered that, by acquiring the minority stockholder interest in Thermo TerraTech, it would advance the goal of its proposed corporate reorganization, announced in August 1998, to reduce the number of Thermo Electron's majority-owned, public subsidiaries. After consideration of these various factors, Thermo Electron decided to make a proposal to Thermo TerraTech to acquire for stock, through a merger, all of the outstanding shares of TerraTech Common Stock that it did not already own. See "THE MERGER--Purpose and Reasons of Thermo Electron for the Merger."

As of , Thermo Electron beneficially owned approximately 87% of the outstanding TerraTech Common Stock.

PURPOSE AND REASONS OF THERMO TERRATECH FOR THE MERGER

The purpose of Thermo TerraTech for engaging in the transactions contemplated by the Merger Agreement is to become part of a larger operating entity and thereby potentially realize improved operating and financial results and a stronger competitive position. Thermo TerraTech considered the following factors in determining to engage in the Merger at this time: (i) the benefits to be gained from becoming part of a larger operating entity, (ii) recent public capital market trends affecting micro-cap companies; (iii) the latest market trends in the markets in which the Company competes, primarily the environmental-liability and resource-management services industry; (iv) the debt owed by the Company, including the debt owed to Thermo Electron; (v) the reduction in the amount of public information available to competitors about Thermo TerraTech's business that would result from the termination of the Company's obligations as a reporting company to the Commission, (vi) the elimination of additional burdens on management associated with public reporting and other tasks resulting from the Company's public company status, including, for example, the dedication of time and resources of management and of the Board to stockholder and analyst inquiries, and investor and public relations;
(vii) the decrease in costs, particularly those associated with being a public company (for example, as a privately-held entity, the Company would no longer be required to file quarterly, annual or other periodic reports with the Commission or publish and distribute to its stockholders annual reports and proxy statements), that Thermo Electron anticipates could result in savings of approximately $450,000 per year, including the approximate cost of associated legal and accounting fees; and (viii) the greater flexibility that the Company's management would have to focus on long-term business goals, as opposed to quarterly earnings, as a non-reporting company. See "THE MERGER--Purpose and Reasons of Thermo TerraTech for the Merger."

POSITION OF THERMO ELECTRON AS TO FAIRNESS OF THE MERGER

Thermo Electron considered the findings and recommendation of the Special Committee and the Board of Thermo TerraTech with respect to the fairness of the Merger to the Public Stockholders (see "THE MERGER--The Special Committee's and the Board's Recommendation"). As of the date of the

Merger Agreement, Thermo Electron adopted the findings and recommendation of the Special Committee and the Board with respect to the fairness of the Merger. Based solely on the findings and recommendation of the Special Committee and its own internal review of the terms of the Merger, Thermo Electron believes that the Merger is both procedurally and substantively fair to the Public Stockholders and that the Exchange Ratio is fair to the Public Stockholders from a financial point of view. Thermo Electron did not attach specific weights to any factors in reaching its belief as to fairness. Thermo Electron is not making any recommendation as to how the Public Stockholders should vote on the Merger Agreement. See "THE MERGER--Position of Thermo Electron as to Fairness of the Merger."

The Public Stockholders should be aware that certain officers and directors of Thermo Electron are also officers and directors of the Company and have certain interests that are in addition to, or different from, the interests of the Public Stockholders. See "THE MERGER--Conflicts of Interest." Thermo Electron considered these potential conflicts of interest and based in part thereon, Thermo Electron's proposed offer was conditioned on, among other things, the approval of the Merger by the Special Committee and the receipt by the Special Committee of a fairness opinion from an investment banking firm.

CERTAIN EFFECTS OF THE MERGER

As a result of the Merger, Thermo Electron will beneficially own the entire equity interest in Thermo TerraTech. Thermo Electron will have complete control over the conduct of Thermo TerraTech's business and will have a 100% interest in the net book value and net earnings of Thermo TerraTech and any future increases in the value of Thermo TerraTech. Thermo Electron's ownership of Thermo TerraTech prior to the transaction contemplated herein was approximately 87%. Upon completion of this transaction, Thermo Electron's interest in the Company's net book value of $48.9 million on July 3, 1999 and net loss of $1.4 million and $45.1 million for the year ended April 3, 1999 and the three months ended July 3, 1999, respectively, would increase from approximately 87% of such amounts to 100% of such amounts. The Public Stockholders will no longer have any interest in, and will not be stockholders of, Thermo TerraTech and therefore will not participate in Thermo TerraTech's future earnings and potential growth and will no longer bear the risk of any decreases in the value of the Company. Instead, the stockholders of the

Company other than Thermo Electron will have the right to receive the Exchange Ratio for each share held.

In addition, the TerraTech Common Stock will no longer be traded on the American Stock Exchange (the "AMEX") and price quotations with respect to sales of shares in the public market will no longer be available. The registration of the TerraTech Common Stock under the Securities Exchange Act of 1934, as amended (the "Exchange Act") will be terminated, and this termination will eliminate the Company's obligation to file periodic financial and other information with the Commission and will make most other provisions of the Exchange Act inapplicable. See "THE MERGER--Certain Effects of the Merger."

CONDITIONS TO THE MERGER, TERMINATION AND EXPENSES

Each party's obligation to effect the Merger is subject to the satisfaction of the following conditions:

- the Merger Agreement shall have been adopted by the affirmative vote of the holders of a majority of the outstanding shares of TerraTech Common Stock entitled to vote thereon in accordance with the provisions of
Section 251 of the General Corporation Law of the State of Delaware (the "DGCL");

- no court, administrative agency or commission or other governmental or regulatory body or authority or instrumentality shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order that is in effect and that has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger;

- the registration statement of which this Proxy Statement-Prospectus forms a part and a resale registration statement relating to the sale of shares of Thermo Common Stock issuable upon exercise of the TerraTech warrants assumed by Thermo Electron (the "Warrant Registration Statement") shall be effective and no order suspending the effectiveness of such registration statements shall have been issued, and no proceedings for that purpose shall have been initiated or threatened by the Commission;

- the Thermo Common Stock issuable pursuant to the Merger Agreement and all shares of Thermo Common Stock subject to issuance pursuant to the TerraTech Stock Option Plans, the 4 5/8% Debentures and the warrants issued by TerraTech, each as assumed by Thermo Electron under the Merger Agreement, shall have been authorized for listing on the New York Stock Exchange;

- Thermo TerraTech and Thermo Electron shall have received a tax opinion regarding certain tax matters relating to the transactions contemplated under the Merger Agreement; and

- no stock acquisition date or other event that would result in the occurrence of a distribution date shall have occurred with respect to the rights to purchase a unit consisting of one ten-thousandth of a share of Thermo Electron's Series B Junior Participating Preferred Stock, as defined in the Rights Agreement dated as of January 19, 1996, as amended, by and between Thermo Electron and BankBoston, N.A.

The obligations of Thermo TerraTech to effect the Merger are subject to the satisfaction of each of the following conditions at or prior to the Effective Time, unless waived in writing by Thermo TerraTech (upon the written consent of the Special Committee):

- the representations and warranties of the Merger Sub and Thermo Electron in the Merger Agreement shall be true and correct in all material respects on and as of the Effective Time, except as permitted by the Merger Agreement;

- the Merger Sub and Thermo Electron shall have performed or complied in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by them on or prior to the Effective Time;

- Thermo TerraTech shall have received a certificate of the President, Chief Executive Officer or Vice President of Thermo Electron certifying to the effect of above two clauses;

- at the time of mailing of this Proxy Statement-Prospectus to the stockholders of Thermo TerraTech and at the Effective Time, Adams, Harkness & Hill shall have reaffirmed orally its fairness opinion and shall not have withdrawn such opinion; and

- any and all necessary state securities approvals for the issuance of Thermo Common Stock pursuant to the Merger Agreement shall have been obtained.

The obligations of the Merger Sub and Thermo Electron to effect the Merger are subject to the satisfaction of each of the following conditions at or prior to the Effective Time, unless waived in writing by Thermo Electron:

- the representations and warranties of Thermo TerraTech in the Merger Agreement shall be true and correct in all material respects on and as if made at the Effective Time, except as otherwise permitted by the Merger Agreement;

- Thermo TerraTech shall have performed or complied in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by it on or prior to the Effective Time;

- Thermo Electron shall have received a certificate of the President, Chief Executive Officer or Vice President of Thermo TerraTech certifying to the effect of the above two clauses; and

- the Special Committee shall not have withdrawn its recommendation to the Board of Directors that the Merger Agreement, including the Exchange Ratio, is fair to, and in the best interests of, the Public Stockholders.

Certain conditions that have not been satisfied by one party may be waived by the other party; however, prior approval of the Special Committee is required for Thermo TerraTech to waive or amend any provision of the Merger Agreement. See "THE MERGER--Conditions." Although stockholder adoption of the Merger Agreement is assured, there can be no assurance that the Merger will be consummated.

At any time prior to the Effective Time, whether before or after adoption of the Merger Agreement by the stockholders of Thermo TerraTech, the Merger Agreement may be terminated by the mutual written consent of the board of directors of the Merger Sub and the Board of Directors of Thermo TerraTech (upon approval of the Special Committee). In addition, either the Merger Sub or Thermo TerraTech (upon approval of the Special Committee), in accordance with the provisions of the Merger Agreement, may terminate the Merger Agreement prior to the Effective Time, whether before or after adoption of the Merger Agreement by the stockholders of Thermo TerraTech, if (i) the Merger has not been consummated by March 31, 2000 (in which case the right of Thermo TerraTech to terminate shall be exercised as directed by the Special Committee), subject to certain exceptions, (ii) a court of competent jurisdiction or governmental, regulatory or administrative agency or commission issues an order, decree or ruling or takes any other action enjoining, restraining or otherwise prohibiting the Merger and such order, decree or ruling is final and nonappealable or (iii) the approval of the stockholders of Thermo TerraTech necessary to consummate the Merger has not been obtained, subject to certain exceptions. Thermo Electron has agreed to vote, or cause to be voted, all of the Common Stock owned by it and any of its subsidiaries in favor of the Merger. See "THE MERGER--Termination, Amendment and Waiver."

In addition, the Merger Sub may terminate the Merger Agreement prior to the Effective Time, whether before or after adoption of the Merger Agreement by the stockholders of Thermo TerraTech, if (i) Thermo TerraTech breaches any representation, warranty, covenant or agreement in any material respect and fails to cure such breach within 10 business days after written notice of such breach from the Merger Sub or (ii) Thermo Electron would be required to issue more than 1,800,000 shares of Thermo

Common Stock as a result of an adjustment to the Exchange Ratio. See "THE MERGER--Conversion of Securities." Thermo TerraTech may terminate the Merger Agreement prior to the Effective Time, whether before or after adoption of the Merger Agreement by the stockholders of Thermo TerraTech, if (i) the Special Committee determines after consultation with outside legal counsel that failure to do so would be inconsistent with the Board's or the Special Committee's fiduciary duties under applicable law (which determination would result in the withdrawal or modification of the Special Committee's recommendation and, at the Special Committee's election, the termination of the Merger Agreement) or
(ii) Thermo Electron breaches any representation, warranty, covenant or agreement in any material respect and fails to cure such breach within 10 business days after written notice of such breach from Thermo TerraTech. There is no termination fee payable by either party in the event that the Merger Agreement is terminated. See "THE MERGER--Termination, Amendment and Waiver."

Each of the parties has agreed to pay its own costs and expenses in connection with the Merger Agreement, whether or not the Merger is consummated. See "THE MERGER--Expenses."

THE VALUE OF THE THERMO COMMON STOCK YOU RECEIVE IN THE MERGER MAY VARY. Upon completion of the Merger, each share of TerraTech Common Stock will be exchanged for shares of Thermo Common Stock. There will be no adjustment to the Exchange Ratio in the event of any fluctuation in the market price of TerraTech Common Stock. As described in "THE MERGER--Conversion of Securities," the Exchange Ratio may be adjusted based on changes in the price per share of the Thermo Common Stock. Specifically, the actual dollar value of Thermo Common Stock to be received by you upon completion of the Merger will depend on the market value of Thermo Common Stock during the 20 trading days ending on the fifth business day prior to the completion of the Merger. As of , 1999, the last trading date for which information was available before the printing of this Proxy Statement-Prospectus, the closing price of Thermo Common Stock was $ per share. The share prices of both TerraTech Common Stock and Thermo Common Stock are subject to general price fluctuations in the market for publicly traded equity securities and have experienced significant volatility. No prediction can be made as to the market prices of either TerraTech Common Stock or Thermo Common Stock at any time before the completion of the Merger or as to the market price of Thermo Common Stock after the completion of the Merger.

ACQUIRED BUSINESSES MAY BE UNPROFITABLE AND DIFFICULT TO INTEGRATE. One of Thermo Electron's principal growth strategies is to supplement its internal growth with the acquisition of businesses and technologies that complement or augment Thermo Electron's existing product lines. Certain businesses recently acquired by Thermo Electron have to date not been highly profitable. In addition, businesses that Thermo Electron may seek to acquire in the future may also be marginally profitable or unprofitable. In order for any acquired businesses to be as profitable as Thermo Electron would like, Thermo Electron must successfully integrate the acquired operations and improve market penetration. Thermo Electron may not succeed at this effort. Promising acquisitions are difficult to identify and complete for a number of reasons, including competition among prospective buyers, the need for regulatory approvals, including antitrust approvals, and the high valuations of businesses resulting from historically high stock prices in many countries. Thermo Electron may have to pay substantial premiums over the fair value of the net assets of the companies it acquires. Thermo Electron may not be able to complete pending or future acquisitions, and it may not be able to successfully integrate any acquired businesses into its existing business or make the acquired businesses profitable.

In order to finance any acquisitions, Thermo Electron may have to raise additional funds, either through public or private financings. Any equity or debt financing, if available at all, may be on unfavorable terms and may dilute Thermo Electron's shareholders.

THERMO ELECTRON HAS SIGNIFICANT COMPETITION IN THE SALE OF ITS PRODUCTS AND SERVICES. Thermo Electron has significant competition in the sale of its products and services. Thermo Electron competes against many large multinational corporations. Some competitors may adapt more quickly to new technologies and changes in customer requirements, or may devote more resources to promoting and selling their products than Thermo Electron. Competition may increase if new companies enter the market or if existing competitors expand their product lines or intensify efforts within existing product lines. Thermo Electron's current products, products under development, and ability to develop new technologies may not be sufficient to enable it to compete effectively.

INTERNATIONAL OPERATIONS INVOLVE MANY RISKS. International revenues account for a substantial portion of Thermo Electron's revenues, and Thermo Electron intends to continue to expand its presence in international markets. International revenues are subject to a number of risks, including the following:

- changes in exchange rates may affect product demand and adversely affect the profitability in U.S. dollars of products and services provided by Thermo Electron in foreign markets, where payment for Thermo Electron's products and services is made in the local currency;

- Thermo Electron may find it hard to enforce agreements and collect receivables using a foreign country's legal system;

- foreign customers may have longer payment cycles;

- foreign countries may impose additional withholding taxes or otherwise tax Thermo Electron's foreign income, impose tariffs, or adopt other restrictions on foreign trade;

- U.S. export licenses may be difficult to obtain; and

- intellectual property rights may be harder to enforce.

All of these factors may have a material adverse impact on Thermo Electron's business and results of operations. Some of Thermo Electron's revenues come from exports to Asia. Certain countries in Asia are in a severe economic crisis, involving sharply reduced economic activity and liquidity, highly volatile foreign-currency-exchange and interest rates, and unstable stock markets. Thermo Electron's export sales to Asia may continue to be adversely affected by the unstable economic conditions there, which may continue to adversely affect Thermo Electron's results of operations, financial condition, or business.

THERMO ELECTRON MUST ADAPT TO RAPID AND SIGNIFICANT TECHNOLOGICAL CHANGE AND RESPOND TO INTRODUCTIONS OF NEW PRODUCTS. The markets for Thermo Electron's products undergo rapid and significant technological change, evolving industry standards and frequent new product introductions and enhancements. Many of Thermo Electron's products and products under development are technologically innovative and require significant planning, design, development, and testing at the technological, product, and manufacturing-process levels. These activities require significant capital commitments and investment by Thermo Electron. In addition, products that are competitive in Thermo Electron's markets are characterized by rapid and significant technological change due to industry standards that may change on short notice and by the introduction of new products and technologies that render existing products and technologies uncompetitive or obsolete. The products currently being developed by Thermo Electron, or those to be developed in the future, may not be technologically feasible or accepted by the marketplace, and Thermo Electron's products or proprietary technologies could become uncompetitive or obsolete.

CHANGES IN GOVERNMENTAL REGULATIONS MAY ADVERSELY AFFECT DEMAND FOR THERMO ELECTRON'S PRODUCTS. Thermo Electron competes in several markets in which its customers must comply with federal, state, local, and foreign regulations, such as environmental, health and safety, and food and drug regulations. Thermo

Electron develops, configures, and markets its products to meet customer needs created by those regulations. These regulations may be changed in response to new scientific evidence or political or economic considerations. Any significant change in regulations could adversely affect demand for Thermo Electron's products in these markets.

SOME OF THERMO ELECTRON'S PRODUCTS MUST BE APPROVED BY GOVERNMENT AGENCIES; THERMO ELECTRON MAY NOT OBTAIN THE NECESSARY APPROVALS. Some of Thermo Electron's products must receive pre-marketing clearance or approval by the U.S. Food and Drug Administration (the "FDA") and similar agencies in foreign countries. The use or sale of certain of Thermo Electron's products under development may require approvals by other government agencies. The process of obtaining clearance and approval from the FDA and other government agencies is time-consuming and expensive. Furthermore, the necessary clearances or approvals for Thermo Electron's products, services, and products and services under development may not be obtained on a timely basis, if at all.

FDA regulations also require continuing compliance with specific standards in conjunction with the maintenance and marketing of products and services that have been approved or cleared. Failure to comply with applicable regulatory requirements can result in, among other things, civil and criminal penalties, suspension of approvals, recalls, or seizures of products, injunctions, and criminal prosecutions.

DEMAND FOR SOME THERMO ELECTRON PRODUCTS DEPENDS ON CAPITAL SPENDING POLICIES OF ITS CUSTOMERS AND ON GOVERNMENT FUNDING POLICIES. Thermo Electron's customers include manufacturers of semiconductors and products incorporating semiconductors, pharmaceutical and chemical companies, laboratories, universities, healthcare providers, paper manufacturers, consumer product companies, government agencies, and public and private research institutions. The capital spending of these entities can have a significant effect on the demand for Thermo Electron's products. Such spending is based on many factors, including the resources available to make purchases, the spending priorities among various types of equipment, public policy, and the effects of different economic cycles, including fluctuating demand in the semiconductor industry. Any decrease in capital spending by any of the customer groups that account for a significant portion of Thermo Electron's sales could have a material adverse effect on Thermo Electron's business and results of operations.

THERMO ELECTRON DEPENDS ON ITS PATENTS AND PROPRIETARY RIGHTS. Obtaining patent and trade secret protection for important new technologies, products, and processes is crucial to Thermo Electron, because developing new products and bringing them to the marketplace is time-consuming and expensive. Thermo Electron depends on being able to develop patentable products and obtain and enforce patent protection for its products in the U.S. and overseas. Thermo Electron owns many United States and foreign patents, and intends to file additional applications for patents as appropriate to cover its products. Patents may not be issued from any pending or future patent applications owned by or licensed to Thermo Electron. In addition, the claims allowed under any issued patents may not be broad enough to protect Thermo Electron's technology. Proceedings initiated by Thermo Electron to protect its proprietary rights could be very expensive to Thermo Electron. In addition, any issued patents owned by or licensed to Thermo Electron may be challenged, invalidated, or circumvented, and the rights granted thereunder may not provide competitive advantages to Thermo Electron. Third parties may claim that Thermo Electron is infringing their intellectual property rights. Defending those claims would be expensive, divert management's attention and could have a material adverse effect on Thermo Electron's business, financial condition, and results of operations. Furthermore, those claims could result in substantial damages awards and/or injunctive or other equitable relief, which could effectively block Thermo Electron's ability to make, use or sell its products and services in the United States or abroad. If a claim relating to intellectual property is made against Thermo Electron, Thermo Electron may seek licenses to such intellectual property. However, such licenses may not be obtained on commercially reasonable terms, if at all. The failure to obtain the necessary licenses or other rights could preclude the sale, manufacture, or distribution of Thermo Electron's products and, therefore, could have a material adverse effect on Thermo Electron's business, financial condition, and results of operations.

Thermo Electron relies on trade secrets and proprietary know-how, which it seeks to protect, in part, by confidentiality agreements with its collaborators, employees, and consultants. These agreements may be breached, Thermo Electron may not have adequate remedies for any breach, and Thermo Electron's trade secrets may otherwise become known or be independently developed by competitors.

THE YEAR 2000 COMPUTER ISSUE MAY DISRUPT THERMO ELECTRON'S OR ITS CUSTOMERS' BUSINESSES. Thermo Electron is attempting to minimize any negative consequences arising from the year 2000 issue. However, year 2000 problems may still have a material adverse impact on Thermo Electron's business, operations, or financial condition. Thermo Electron expects that upgrades to its internal business systems will be completed soon, but it may encounter unexpected costs or delays. Despite its efforts to ensure that its material current products are year 2000 compliant, Thermo Electron may see an increase in warranty and other claims, especially those related to Company products that incorporate, or operate using, third-party software or hardware. In addition, certain of Thermo Electron's older products, which it no longer manufactures or sells, may not be year 2000 compliant, which may expose Thermo Electron to claims. If any of Thermo Electron's significant suppliers or vendors experience business disruptions due to year 2000 issues, there may also be a material adverse effect on Thermo Electron. There is expected to be a significant amount of litigation relating to the year 2000 issue, and Thermo Electron could incur material costs in defending or bringing lawsuits. In addition, if any year 2000 issues are identified, Thermo Electron may not be able to retain qualified personnel to remedy such issues. Any unexpected costs or delays arising from the year 2000 issue could have a significant adverse impact on Thermo Electron's business, operations, and financial condition in amounts that Thermo Electron cannot reasonably estimate at this time.

THE MERGER

BACKGROUND OF THE MERGER

In August 1998, Thermo TerraTech and Thermo Electron's senior management initially considered the possibility of an acquisition by Thermo TerraTech of the minority stockholder interests in Thermo TerraTech's two public subsidiaries, Randers/Killam and ThermoRetec, in connection with the proposed corporate reorganization of Thermo Electron and certain of its subsidiaries. Each of the acquisitions of Randers/Killam and ThermoRetec would be accomplished by means of a stock-for-stock merger. The goals of Thermo Electron's proposed corporate reorganization include (i) reducing the complexity of Thermo Electron's corporate structure, (ii) consolidating and strategically realigning certain businesses to enhance their competitive market positions and improve management coordination, and (iii) increasing liquidity in the public markets by providing larger market floats for Thermo Electron's publicly traded subsidiaries. If Thermo Electron's reorganization plan is completed as currently proposed, the number of Thermo Electron's majority-owned subsidiaries will be reduced from 22 to 12.

In the context of the review of Thermo Electron's entire corporate structure which was taking place at the time, in April, 1999, Thermo Electron's management began to examine several factors, including the financial performance and profitability of Thermo TerraTech, uncertainty regarding Thermo TerraTech's future growth prospects, and the potential benefits to Thermo TerraTech's business if it were to become part of a larger business unit. Thermo Electron also considered the following factors: (i) recent public capital market trends affecting micro-cap companies; (ii) the latest trends in the markets in which the Company competes; (iii) the debt owed by the Company to, primarily, Thermo Electron; (iv) the reduction in the amount of public information available to competitors about Thermo TerraTech's business that would result from the termination of the Company's obligations under the Commission's reporting requirements; (v) the elimination of additional burdens on management associated with public reporting and other tasks resulting from the Company's public company status, including, for example, the dedication of time and resources of management and of the Board to stockholder and analyst inquiries, and investor and public relations; (vi) the decrease in costs, particularly those associated with being a public company (for example, as a privately-held entity, the Company would no longer be required to file quarterly, annual or other periodic reports with the Commission or publish and distribute to its stockholders annual reports and proxy statements), that Thermo Electron anticipates could result in savings of approximately $450,000 per year, including fees for an audit by an independent accounting firm and legal fees; and (vii) the greater flexibility that the Company's management would have to focus on long-term business goals, as opposed to quarterly earnings, as a non-reporting company.

Thermo Electron also considered the relatively low volume of trading in the TerraTech Common Stock and considered that the Merger would result in the Public Stockholders' receiving a somewhat more liquid, more readily tradeable security (the Thermo Common Stock). Management of Thermo Electron also considered that acquiring the minority stockholder interest in Thermo TerraTech would advance the goal of Thermo Electron's proposed corporate reorganization to reduce the number of majority-owned, public subsidiaries of Thermo Electron. Management of Thermo Electron also considered recent trends in the price of the TerraTech Common Stock, although Thermo TerraTech's current stock price was not a significant factor in the timing of Thermo Electron's decision to propose acquiring the minority stockholder interest in Thermo TerraTech. In April 1999, management of Thermo Electron decided to propose to the Board of Directors of Thermo Electron that it include TerraTech in the corporate reorganization and make an offer to acquire all of the shares of TerraTech Common Stock that Thermo Electron did not already own, for shares of Thermo Common Stock.

On May 5, 1999, the Board of Directors of Thermo Electron held a special meeting at which Thermo Electron's management presented the proposal for Thermo Electron to acquire all of the shares of common stock held by the Public Stockholders, as a part of the ongoing corporate reorganization of Thermo Electron and certain of its subsidiaries. At that meeting, the Thermo Electron Board of Directors

discussed several factors presented by management regarding this proposal, including the factors described in the preceding two paragraphs.

The Thermo Electron Board of Directors also considered the advantages and disadvantages of certain alternatives to acquiring the minority stockholder interest in Thermo TerraTech, including (i) selling its equity interest in the Company and (ii) leaving Thermo TerraTech as a majority-owned, public subsidiary. The first alternative, of selling Thermo Electron's equity interest in the Company, was briefly considered by Thermo Electron management, but it was not an alternative that was pursued at length, given that Thermo Electron did not want to sell its equity interest in the Company, but rather intended to retain the Company as a part of the larger Thermo Electron operating unit. The advantages to leaving Thermo TerraTech as a majority-owned, public subsidiary of Thermo Electron which were considered by the Thermo Electron Board of Directors included (i) avoidance of the need to issue additional shares of Thermo Common Stock at a time when the price of such shares was relatively low and
(ii) maintaining the potential access Thermo TerraTech has to capital in the public markets as a public company. The disadvantages to leaving Thermo TerraTech as majority-owned, public subsidiary which were considered by Thermo Electron included (i) the burden on Thermo TerraTech of its debt owed, primarily, to Thermo Electron, (ii) the costs associated with being a public company, including those relating to reporting obligations and public and investor relations functions and (iii) the public information available to competitors about Thermo TerraTech's business as a result of its filing obligations with the Commission. Thermo Electron ultimately concluded that the advantages of leaving Thermo TerraTech as a majority-owned, public subsidiary were outweighed by the disadvantages of doing so, and accordingly that alternative was also rejected. The Thermo Electron board of directors also discussed the fact that acquiring the minority stockholder interest in Thermo TerraTech would advance the goal of Thermo Electron's proposed corporate reorganization to reduce the number of Thermo Electron's majority-owned, public subsidiaries. After consideration of these various factors, Thermo Electron's board of directors authorized further revisions to its corporate reorganization plan, including taking Thermo TerraTech private through its acquisition for shares of Thermo Common Stock of all of the shares of Thermo TerraTech that Thermo Electron did not already own.

On May 5, 1999, Thermo Electron issued a press release announcing that Thermo TerraTech would be included in the larger reorganization of Thermo Electron and its subsidiaries. The Board of Directors of Thermo TerraTech met on May 6, 1999 and determined that, because Thermo Electron controlled approximately 87% of the outstanding common stock of Thermo TerraTech, it was desirable to appoint a special committee to act on behalf of and in the interests of the Public Stockholders for the purpose of evaluating the merits of and negotiating the proposed transaction, as well as making a recommendation to the full Board of Directors of Thermo TerraTech on whether or not to approve such transaction. The Board appointed Mr. Polyvios Vintiadis to act as the sole member of the Special Committee. The Board authorized the Special Committee to retain a legal advisor, an investment bank to provide a fairness opinion and any other professional advisors that the Special Committee deemed necessary or appropriate to assist it in carrying out its duties. Further, the Board granted the Special Committee and its advisors access to all of the officers and management of Thermo TerraTech, Thermo Electron and its direct and indirect subsidiaries, their respective books, records, projections and financial statements deemed necessary by the Special Committee and its advisors for their review. The Thermo TerraTech Board of Directors, in appointing Mr. Vintiadis to the Special Committee, noted that Mr. Vintiadis' position as a director of Thermo Instrument Systems, Inc., a majority-owned subsidiary of Thermo Electron, and Randers/Killam, a majority-owned subsidiary of Thermo TerraTech, did not prevent him from fulfilling his duties as an independent member of the Special Committee. As discussed below, Mr. Vintiadis elected to resign from the Board of Directors of Randers/Killam effective July 26, 1999.

In May 1999, the Special Committee considered several law firms to act as its legal advisor. The Special Committee elected to retain Choate, Hall & Stewart ("Choate Hall") as its legal advisor. In making its determination, the Special Committee considered Choate Hall's reputation and experience,

including its mergers and acquisition experience. The Special Committee considered that Choate Hall had already been selected to represent the special committee of the board of directors of Randers/Killam in connection with Thermo Electron's proposed acquisition of the minority interest of Randers/Killam. The Special Committee believed it to be an advantage to the Special Committee that Choate Hall was already familiar with the companies involved in the transaction and that it had already commenced its due diligence review. The Special Committee also determined that the interests of the special committees of Thermo TerraTech and Randers/Killam, respectively, were adverse to Thermo Electron and not adverse to each other in the proposed two transactions.

In May 1999, the Special Committee met with Choate Hall and discussed the scope of the duties of the Special Committee, the scope of the Special Committee's authority and the requirement that the Special Committee be independent. The member of the Special Committee affirmed his independence, his understanding of his obligations and his intent to get the best result for the Public Stockholders. The Special Committee also determined that it would not recommend a transaction unless it believed that the proposed transaction was at a fair price and was the best transaction available for the Public Stockholders. The Special Committee discussed a proposed schedule for hiring an investment banker and for conducting due diligence in connection with the proposed transaction, including discussions with management of Thermo TerraTech, Randers/Killam, ThermoRetec and Thermo Electron about the business, financial condition and prospects of Thermo TerraTech and Thermo Electron. The sole member of the Special Committee had substantial experience in working with investment bankers. Over the next few weeks, the Special Committee then requested proposals from and conducted telephonic interviews with two investment banking firms, including Adams, Harkness & Hill.

On May 24, 1999, Thermo TerraTech announced its plan to sell certain operating units of its majority-owned subsidiary, Randers/Killam, including its Randers division, BAC Killam and E3-Killam. In addition, it was announced that Thermo TerraTech's majority-owned subsidiary, Thermo EuroTech N.V., would sell its used-oil processing operations and that ThermoRetec would sell certain soil-recycling facilities. As of the date of mailing this Proxy Statement to stockholders, Thermo TerraTech has not entered into a definitive agreement to sell any of these operating units. Pursuant to the terms of the Merger Agreement, Thermo Electron is obligated to notify the Special Committee of any such offers it receives which set forth a proposed purchase price of greater than $3 million or in which the total value of the assets being sold is greater than $3 million.

After due deliberation, the Special Committee decided in late May 1999 to retain Adams, Harkness & Hill. The Special Committee selected Adams, Harkness & Hill because of its reputation and experience generally, and in particular its experience in providing fairness opinions in public transactions. The Special Committee considered that Adams, Harkness & Hill had not previously acted as a financial advisor to or provided investment banking services for Thermo Electron or any of its subsidiaries. The Special Committee also considered that Adams, Harkness & Hill was located in Boston and could therefore meet more easily with the Special Committee and conduct its diligence of Thermo Electron. In making its decision to engage Adams, Harkness & Hill, the Special Committee noted and considered that Adams, Harkness & Hill already represented the special committee of the board of directors of Randers/Killam and had been contacted about representing the special committee of the board of directors of ThermoRetec in connection with the proposed acquisition by Thermo Electron of the minority interests of each of Thermo TerraTech, Randers/Killam and ThermoRetec. The Special Committee determined that, in each case, the interests of the special committees of Thermo TerraTech, Randers/Killam and ThermoRetec, respectively, were adverse to Thermo Electron and not adverse to each other in the proposed transactions. The Special Committee decided that, given the corporate structure of Thermo Electron, Thermo TerraTech (a first tier subsidiary of Thermo Electron), and Randers/Killam and ThermoRetec (each majority-owned subsidiaries of Thermo TerraTech), Adams, Harkness & Hill's engagement in the parallel mergers and more detailed knowledge of Thermo Electron and its subsidiaries would

be an advantage to the Special Committee. Adams, Harkness & Hill agreed to assist the Special Committee in, among other things:

- conducting due diligence on Randers/Killam, ThermoRetec and Thermo Electron, including without limitation, visiting the facilities of and interviewing the management of Thermo TerraTech, Randers/Killam, ThermoRetec and Thermo Electron;

- reviewing Thermo TerraTech and Thermo Electron's historical, current and projected operating results and financial position, within the context of the business condition in the industry segments in which Thermo TerraTech and Thermo Electron compete and reviewing similar information for the peer group of companies deemed to be comparable to Thermo TerraTech and Thermo Electron;

- evaluating the historical stock price trading records of Thermo TerraTech, Thermo Electron and the peer group;

- identifying business combinations deemed to be comparable and assessing the terms of these precedent business combinations;

- preparing an analysis of Thermo TerraTech to determine valuation parameters for Thermo TerraTech;

- assisting in evaluating and negotiating the terms and conditions of any proposed offer from Thermo Electron; and

- providing a written opinion, and any oral opinions, if requested, as to the fairness, from a financial point of view, of the consideration to be received by the Public Stockholders in connection with any proposed offer from Thermo Electron.

Following its engagement, Adams, Harkness & Hill continued its diligence review and analysis, including preparation of a financial model that incorporated financial projections provided by Thermo TerraTech's and Thermo Electron's management, review of the valuations of comparable public companies and the financial terms of comparable merger transactions, and preparation of discounted cash flow valuations. See "--Opinion of Adams, Harkness & Hill".

On June 8, 1999, the Special Committee met with Adams, Harkness & Hill and Choate Hall to review the status of the legal and financial due diligence and discuss the proposed schedule for the transaction, including the timing of Thermo Electron's proposed offer.

Throughout June and July, Adams, Harkness & Hill provided the Special Committee with regular, periodic telephonic updates on its progress on due diligence and preliminary valuation methods. On July 22, 1999, the Special Committee met with Adams, Harkness & Hill and Choate Hall to review the preliminary valuation of Thermo TerraTech and Thermo Electron established by Adams, Harkness & Hill and to prepare for Thermo Electron's presentation and offer. The Special Committee decided in advance that it would defer responding to any offer until it had fully considered the offer, reviewed its underlying assumptions and analyses, and assessed the merits of the offer. Adams, Harkness & Hill discussed the valuation methodologies it employed, including without limitation those discussed in "--Opinion of Adams, Harkness & Hill", in determining its preliminary valuations. Full discussion ensued on the appropriateness of certain assumptions and analyses contained in the preliminary valuation. There was also a detailed discussion of the valuation methodologies used by Adams, Harkness & Hill and any material assumptions used by Adams, Harkness & Hill to prepare its preliminary valuation. After discussion, the Special Committee authorized Adams, Harkness & Hill to engage Environmental Business International, Inc., an environmental consultant, for the limited purpose of reviewing certain assumptions about the environmental industry contained in Adams, Harkness & Hill's preliminary valuation. See "Opinion of Adams, Harkness & Hill." Choate Hall again discussed with the Special Committee the duties

and responsibilities of the independent committee of the Board of Directors in evaluating and negotiating the terms of the offer. Mr. Vintiadis resigned as a director of Randers/Killam effective on July 26, 1999.

On July 23, 1999, Thermo Electron provided the Special Committee and Choate Hall with a draft Merger Agreement containing all of the proposed terms other than the proposed exchange ratio. The Special Committee instructed Choate Hall to review the proposed Merger Agreement and negotiate the agreement along the lines discussed with the Special Committee.

On August 16, 1999, Thermo Electron provided the Special Committee with a proposal to acquire the outstanding shares of Thermo TerraTech. Under this proposal, each outstanding share of Thermo TerraTech common stock held by the Public Shareholders would be exchanged for 0.26 of a share of Thermo Electron common stock. On August 16, 1999, the date of the proposal, the closing stock prices for Thermo TerraTech and Thermo Electron were $5.25 and $16.875, respectively. While the terms of the proposal included a premium on the market value of the Thermo TerraTech common stock, a substantial premium also had been added to the Thermo Electron common stock, reflecting Thermo Electron's belief that its common stock was currently undervalued by the financial markets. The Special Committee instructed Adams, Harkness & Hill to review the terms of and assumptions underlying the proposed exchange ratio.

On August 20, 1999, the Special Committee held a telephonic meeting with Adams, Harkness & Hill and Choate Hall to review the proposed exchange ratio. After detailed discussion, the Special Committee determined that it was incumbent on Thermo Electron to propose a more acceptable alternative. The Special Committee decided that no proposed exchange ratio would be considered that had the effect of valuing Thermo TerraTech common stock at less than its current market value or that valued Thermo Electron stock at a premium to its then market value. Furthermore, the Special Committee discussed possible ways to protect the Public Stockholders from fluctuations in the price of Thermo TerraTech and Thermo Electron common stock, including a collar on the proposed valuation and a oral update of the Adams, Harkness & Hill fairness opinion as of the date of distribution of the proxy statement to Thermo TerraTech stockholders and/or immediately prior to closing the transaction to ensure that the transaction remained fair. The Special Committee discussed requiring a collar on the proposed value of the deal, including a minimum dollar value (a "floor") for each share of Thermo TerraTech common stock held by the Public Stockholders. If the market value of Thermo Electron Common Stock to be issued in the proposed transaction went below the proposed floor, the exchange ratio would be adjusted such that each outstanding share of Thermo TerraTech common stock would be worth the number of shares of Thermo Electron Common Stock equal to the fixed dollar amount. For this purpose, the Thermo Common Stock would be valued based on the average closing price of such stock during a specified period prior to the Effective Date of the Merger. Similarly, a maximum dollar value (a "ceiling") could be placed on each share of the Thermo TerraTech common stock held by the Public Stockholders if the Thermo Electron common stock exceeded a specified price. The Special Committee asked Adams, Harkness & Hill and Choate Hall to propose a transaction structure that included a two-way collar on the price of Thermo Electron common stock. The Special Committee also requested Choate Hall to continue negotiations on the Merger Agreement along the lines discussed at the meeting.

On August 24, 1999, Adams, Harkness & Hill communicated to Mr. Theo Melas-Kyriazi, the Chief Financial Officer of Thermo Electron, that the proposed exchange ratio was unacceptable and presented the proposed collar structure. On August 26, 1999, Thermo Electron responded with a new proposal that contained no premium on the trading price of Thermo Electron common stock and a proposed implied exchange ratio of 0.40 shares of Thermo Electron common stock for each outstanding share of Thermo TerraTech common stock held by the Public Stockholders. The Exchange Ratio would be subject to adjustment based on the average closing price of Thermo Electron Common Stock during a specified period prior to the effective time of the Merger, but would provide a minimum value, or floor, of $6.00 and a maximum value, or ceiling, of $8.00 for each outstanding share of Thermo TerraTech Common Stock.

On August 26, 1999, the Special Committee held a telephonic meeting with Adams, Harkness & Hill and Choate Hall to discuss Thermo Electron's revised proposal. After extensive discussion, the Special Committee determined that the overall value of Thermo TerraTech was still greater than that reflected in Thermo Electron's revised proposal. The Special Committee and Adams, Harkness & Hill believed that the prevailing trading price of Thermo TerraTech did not reflect the underlying value of the company since, among other considerations, the stock was thinly-traded. Moreover, in certain cases Thermo Electron used different assumptions in its valuation of Thermo TerraTech than those used in Adams, Harkness & Hill preliminary projections. The Special Committee instructed Adams, Harkness & Hill to request an increase in both the proposed minimum value and maximum value per share.

Several days later, Thermo Electron made a revised proposal. On August 31, 1999, the Special Committee held a telephonic meeting with Adams, Harkness & Hill and Choate Hall to discuss Thermo Electron's most recent proposal which contained an implied exchange ratio of 0.40 shares of Thermo Electron common stock for each share of outstanding Thermo TerraTech common stock held by the Public Stockholders, subject to adjustment but having a minimum value of $6.80 and a maximum value of $8.50 for each outstanding share. After discussion with Adams, Harkness & Hill, the Special Committee determined that although the maximum value or ceiling was acceptable, the proposed floor of $6.80 per share still did not reflect sufficient overall value for Thermo TerraTech. After a discussion of applicable legal requirements, the Special Committee's responsibilities and the applicability of the various pricing valuation models, the Special Committee determined that it would continue its efforts to obtain a minimum price higher than $6.80 per share. After several discussions between the Special Committee and Thermo Electron in which the Special Committee indicated that the minimum value should be increased to $7.00 per share, Thermo Electron proposed the implied exchange ratio remain at 0.40, subject to a minimum value of $7.00 and a maximum value of $8.50 for each outstanding share of Thermo TerraTech common stock. That offer was agreed upon by the Special Committee as fair from a financial point of view to the Public Stockholders on September 2, 1999. The closing prices for Thermo Electron common stock and Thermo TerraTech common stock on September 1, 1999 were $15.875 and $5.375, respectively.

Beginning in August, 1999, the Special Committee and Choate Hall also negotiated the terms and conditions of the proposed merger agreement.

On September 7, 1999, the Special Committee was informed that its majority-owned subsidiary, ThermoRetec, might shortly be awarded a material contract which could increase the value of ThermoRetec and, therefore, Thermo TerraTech. The Special Committee decided to postpone meeting with the full Board of Directors of Thermo TerraTech and making a recommendation with respect to the Merger until such time as the impact, if any, of the new contract, if awarded, on the price of the TerraTech Common Stock could be quantified and until negotiations between Thermo Electron and the ThermoTech Special Committee could be completed. These activities occurred throughout September and the beginning of October. On October 7, 1999, Thermo Electron made a new proposal, subject to approval of a final merger agreement. After discussing with Adams, Harkness & Hill and Choate Hall, the Special Committee accepted Thermo Electron's offer of an implied exchange ratio of 0.40, subject to adjustment but having a minimum value of $7.25 and a maximum value of $8.50 for each outstanding share of TerraTech Common Stock.

On October 19, 1999, Adams, Harkness & Hill met with the Special Committee and Choate Hall to give its final report on the terms of the proposed Merger and rendered its oral opinion to the Special Committee that the proposal by Thermo Electron of an implied exchange ratio of 0.40 shares of Thermo Electron common stock for each share of Thermo TerraTech common stock, subject to adjustment but having a minimum value of $7.25 and a maximum value of $8.50 for each outstanding share of Thermo TerraTech was fair, from a financial point of view, to the Public Stockholders. Adams, Harkness & Hill reviewed the various factors it considered in rendering its opinion, which are described below under "--Opinion of Adams, Harkness & Hill." The full Board of Directors of Thermo TerraTech then met to

hear the report of the Special Committee and Adams, Harkness & Hill, to review the terms of the Merger Agreement and to review the recommendations of the Special Committee. After the terms of the transaction were outlined but before Adams Harkness provided its report or the Special Committee made its recommendation, the Board meeting was adjourned. During the adjournment, representatives of Thermo Electron expressed concern to the Special Committee and its advisors over the decline in the trading price of Thermo Electron Common Stock since September. Thermo Electron's representatives also expressed concern that Thermo Electron's Board of Directors would not support a transaction which did not have a mechanism for limiting the potential dilution to Thermo Electron's stockholders from the Merger if the trading price of Thermo Electron's common stock experienced a supstantial drop. In other words, the adjustments to the exchange ratio did not, as currently proposed, have any limit. The representatives of Thermo Electron then left the room and the Special Committee met alone with its advisors. After a detailed discussion of Thermo Electron's concerns, the Special Committee invited Mr. Melas-Kyriazi, acting on behalf of Thermo Electron, to meet with the Special Committee and its advisors. Mr. Melas-Kyriazi proposed to the Special Committee that the exchange ratio should not be permitted to increase beyond a ratio of 0.65 shares of Thermo Common Stock for each share of TerraTech Common Stock held by the Public Stockholders. The Special Committee then again met privately with Choate Hall and Adams, Harkness & Hill. After discussion, the Special Committee determined that it was reasonable that Thermo Electron have the ability to put some limit on the number of shares issuable in the Merger. However, the Special Committee rejected the Thermo Electron proposal because it did not leave sufficient room for a potential decline in Thermo Electron's common stock. The Special Committee advised Thermo Electron that it believed Thermo Electron should only be in a position to proceed with the transaction if there were a substantial drop in Thermo Electron's trading price. Thermo Electron then proposed to change the terms of the Merger Agreement such that either party be allowed to terminate the agreement if the average of closing prices of Thermo Electron Common Stock for a specified period prior to the closing fell below a certain number. After discussion and several private meetings with its advisors, the Special Committee agreed that, pursuant to the terms of the Merger Agreement for adjustment of the Exchange Ratio, if Thermo Electron would otherwise be required to issue, at the effective time of the Merger Agreement, 1.8 million or more shares of Thermo Electron Common Stock to the Public Stockholders, Thermo Electron could elect to terminate the agreement. If Thermo Electron failed to terminate the Merger Agreement, no cap would be placed on the upward adjustments to the exchange ratio and therefore there would be no limit on the number of shares of Thermo Electron Common Stock issuable. In addition, the Special Committee requested and Thermo Electron agreed to delete the provision which Thermo Electron had demanded be included in the Merger Agreement pursuant to which Thermo Electron could refuse to close the Terra Tech Merger if the proposed transactions with either Randers/Killam or ThermoRetec did not close.

The meeting of the full Board then resumed, Adams Harkness & Hill made its presentation and of the Special Committee then recommended to the full Board of Directors that it accept Thermo Electron's offer and approve the Merger Agreement in the form presented at the meeting. Adams, Harkness & Hill rendered its written opinion to the Special Committee on October 19, 1999, to the effect that, as of that date, the per share consideration to be received pursuant to the proposed Merger was fair, from a financial point of view, to the Public Stockholders. The Board of Directors unanimously approved the Merger Agreement, declared its advisability and recommended that the stockholders vote in favor of the proposed Merger.

Later on October 19, 1999, the Merger Agreement was presented to the Board of Directors of Thermo Electron at a special meeting of the Board of Directors. Thermo Electron's Board of Directors unanimously approved the Merger Agreement. The Merger Agreement was then duly executed by the parties. The next day, Thermo TerraTech issued a press release announcing that, based on the recommendation of the Special Committee, its Board of Directors had approved the Merger Agreement with Thermo Electron.

THE SPECIAL COMMITTEE'S AND THE BOARD'S RECOMMENDATION

The Special Committee and the Board believe that the terms of the Merger are fair to, and in the best interests of, the Public Stockholders. In reaching this conclusion, the Special Committee has determined that the Merger is both substantively and procedurally fair, and is therefore entirely fair, to the Public Stockholders. The Board has adopted the findings and recommendation of the Special Committee with regard to both the substantive and procedural fairness of the Merger. Accordingly, the Board has unanimously approved the Merger Agreement and unanimously recommends its adoption by the stockholders.

In reaching their decisions to approve the Merger Agreement, the Special Committee and the Board considered the following factors, each of which the Special Committee and the Board deemed favorable:

--THE PREMIUM REFLECTED IN THE EXCHANGE RATIO. The Exchange Ratio, viewed in light of the course of negotiations with Thermo Electron and the historical market price of the Common Stock, was considered by the Special Committee and the Board in making their respective decisions to approve the Merger Agreement.

- COURSE OF NEGOTIATIONS. The Special Committee and the Board considered the history of negotiations with respect to the Merger Agreement, which led to an increase in Thermo Electron's initial proposal of 0.26 of a share of Thermo Common Stock per share of TerraTech Common Stock on August 16, 1999, to an exchange ratio of 0.4 of a share of Thermo Common Stock with a value range of $6.00 to $8.00 per share offered on August 26, 1999 to an exchange ratio of 0.4 of a share of Thermo Common Stock with a value range of $6.80 to $8.50 per share offered on August 31, 1999 to an exchange ratio of 0.4 of a share of Thermo Common Stock with a value range of $7.00 to $8.50 per share offered later on August 31, 1999 to an exchange ratio of 0.4 of a share of Thermo Common Stock with a value range of $7.25 to $8.50 per share offered on October 7, 1999, and finally to an exchange ratio of 0.4 of a share of Thermo Common Stock with a value range of $7.25 to $9.25 per share offered on October 19, 1999.

- THE RELATIONSHIP OF THE EXCHANGE RATIO, WITH A MINIMUM VALUE OF $7.25 AND A MAXIMUM VALUE OF $9.25, TO THE HISTORICAL MARKET PRICES FOR THE TERRATECH COMMON STOCK. The Special Committee and the Board considered the declining per share price of the TerraTech Common Stock and the possibility that the price would remain depressed. The Special Committee and the Board noted that it had been approximately two years since the Common Stock had consistently traded at or above $7.25 and that the Common Stock had ranged from a high of $12.0625 in the first quarter of 1997 to a low of $3.75 in the fourth quarter of 1998. The Special Committee and the Board concluded that the Exchange Ratio proposed by Thermo Electron would enable the Public Stockholders to obtain a higher price for their stock than would otherwise be available in the market at that time. The purchase by Thermo Electron would also eliminate the exposure of the Public Stockholders to any future or continued declines in the price of the Common Stock.

--INFORMATION CONCERNING THE FINANCIAL PERFORMANCE, CONDITION, BUSINESS
OPERATIONS AND PROSPECTS OF THERMO TERRATECH. The Special Committee and the Board considered the historical, current and potential future performance of Thermo TerraTech and determined that the premium reflected in the price per share offered by Thermo Electron was attractive in light of the current performance, declining sales and profitability, and the uncertainty of the Company's growth prospects. In addition, the Special Committee and the Board determined that the Merger would shift the risk of the future financial performance of Thermo TerraTech from the Public Stockholders, who do not have the power to control Thermo TerraTech, entirely to Thermo Electron, which does have the power to control Thermo TerraTech and has the resources to manage and bear that risk over the long term.

--TERMS OF THE MERGER AGREEMENT. The Special Committee and the Board considered the terms of the Merger Agreement, including (i) the amount and form of the consideration, (ii) the limited number of conditions to the obligations of Thermo Electron, (iii) the right of the Special Committee to terminate the Merger Agreement if the Special Committee determines after consultation with outside legal counsel that failure to do so would be inconsistent with the Board's or the Special Committee's fiduciary duties under applicable law, and
(iv) the absence of a termination fee in the event Thermo TerraTech terminates the Merger Agreement. The Special Committee and the Board believed that the foregoing made the consummation of the transaction more likely than it would if more significant conditions were placed on the completion of the transaction. Further, the Special Committee and the Board believed that the ability of the Special Committee to terminate the Merger Agreement without payment of a termination fee in the event its fiduciary duties to the Thermo TerraTech stockholders required it to do so provided the Board the freedom to protect the interests of the Public Stockholders.

--THE IMPROVED TRADING MARKET FOR THEIR INVESTMENT THAT WOULD BE REALIZED BY THE PUBLIC STOCKHOLDERS FROM THEIR RECEIPT OF THERMO COMMON STOCK. The Special Committee and the Board believed that the improved trading market and liquidity of their investment to be realized by the Public Stockholders would be beneficial to such stockholders since Thermo Electron's significant ownership of the TerraTech Common Stock (i) resulted in a relatively small public float that necessarily limited the amount of trading in the TerraTech Common Stock and
(ii) decreased the likelihood that a proposal to acquire the TerraTech Common Stock would be made by an independent entity without the consent of Thermo Electron and furthermore, Thermo Electron had stated its current intention to retain its majority holding in the Company, which foreclosed the opportunity to consider an alternative transaction with a third party purchaser of the Company or otherwise provide liquidity to the Public Stockholders.

--THE OPINION OF ADAMS, HARKNESS & HILL THAT THE CONSIDERATION OFFERED BY THERMO ELECTRON OF 0.4, SUBJECT TO ADJUSTMENT BUT HAVING A MINIMUM VALUE OF $7.25 AND A MAXIMUM VALUE OF $9.25 FOR EACH OUTSTANDING SHARE OF TERRATECH COMMON STOCK IS FAIR, FROM A FINANCIAL POINT OF VIEW, AS OF THE DATE OF ITS OPINION, TO THE PUBLIC STOCKHOLDERS. The Special Committee reviewed the independent financial analyses performed by Adams, Harkness & Hill, including analyses of relative value and discounted cash flows that assume Thermo TerraTech will continue as a going concern, and found them to be reasonable. It believed that Adams, Harkness & Hill's conclusion that the Exchange Ratio offered by Thermo Electron was fair, from a financial point of view, to the Public Stockholders was a reasonable conclusion based on the analyses performed. See "--Opinion of Adams, Harkness & Hill."

The Special Committee and the Board also considered the following factors, all of which they considered as negative factors in their deliberations concerning their respective decisions to approve the Merger Agreement:

- FOLLOWING THE MERGER, THE PUBLIC STOCKHOLDERS WILL CEASE TO PARTICIPATE DIRECTLY IN THE FUTURE EARNINGS OR GROWTH, IF ANY, OF THERMO TERRATECH OR BENEFIT FROM INCREASES, IF ANY, IN THE VALUE OF THERMO TERRATECH. The Special Committee and the Board evaluated this in light of the recent financial performance of Thermo TerraTech, the current industry outlook and the risks and uncertainties associated with Thermo TerraTech's future prospects, as described above.

- THE POSITIVE ASPECTS OF THE COMPANY, INCLUDING ITS HIGH QUALITY SERVICES, HIGHLY REGARDED MANAGEMENT TEAM, LEADING MARKET POSITION IN CERTAIN AREAS, DIVERSIFIED CUSTOMER BASE AND STRONG EXISTING SERVICES PORTFOLIO. The Special Committee and the Board believed that these aspects were potential contributors to the future success of Thermo TerraTech and weighed in favor of continuing Thermo TerraTech as a public company. However, these positive aspects were offset by the many other considerations listed above.

- POTENTIAL OR ACTUAL CONFLICTS OF INTEREST OF OFFICERS AND DIRECTORS OF THERMO TERRATECH IN CONNECTION WITH THE MERGER. See "--Conflicts of
Interest."

The Special Committee and the Board also considered evaluating the Company on a going concern basis, but accorded this method of analysis little, if any, weight, because Thermo Electron indicated to the Special Committee and the Board that it had no desire or intention to sell the Company, but rather wanted to continue to operate the Company substantially as it was being operated.

In determining that the Merger is fair to the Public Stockholders, the Special Committee and the Board considered the above factors as a whole and did not assign specific or relative weights to them. The factors described above constitute all of the material factors considered by the Special Committee and the Board. In the view of the Special Committee and the Board, each of the positive factors listed above, in the aggregate, reinforced their belief that the transaction was in the best interests of the Public Stockholders and outweighed the negative factors listed above.

The Special Committee's and the Board's belief as to the procedural fairness of the Merger was based, among other things, on their recognition that (i) the Special Committee consisted of an independent director appointed by a majority of the Board of Directors to represent solely the interests of the Public Stockholders and to provide independent consideration of the transaction;
(ii) the Special Committee retained and was advised by independent legal counsel; (iii) the Special Committee retained Adams, Harkness & Hill to assist in evaluating the proposed transaction and received advice from Adams, Harkness & Hill; and (iv) the Exchange Ratio and the other terms and conditions of the Merger Agreement resulted from active arms-length bargaining between representatives of the Special Committee and representatives of management of Thermo Electron. No other unaffiliated representative was retained to act solely on behalf of the Public Stockholders for the purposes of negotiating the terms of the Merger or the Merger Agreement.

THE SPECIAL COMMITTEE AND THE BOARD HAVE APPROVED THE MERGER AGREEMENT, BELIEVE THAT THE TERMS OF THE MERGER ARE FAIR TO THE PUBLIC STOCKHOLDERS AND THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE TO ADOPT THE MERGER AGREEMENT.

In considering the recommendation of the Special Committee and the Board with respect to the Merger Agreement, stockholders should be aware that certain members of the Special Committee and the Board have certain interests in the Merger that are different from, or in addition to, the interests of stockholders generally and that represent actual or potential conflicts of interest. The Special Committee and the Board were aware of these interests and considered them, among other matters, in approving the Merger Agreement. See "--Conflicts of Interest."

In order to aid the evaluation of the Company by the Special Committee and Adams, Harkness & Hill and Adams, Harkness & Hill's assessment of the fairness, from a financial point of view, of the consideration of payable to the Public Stockholders pursuant to the Merger Agreement, the Company furnished the Special Committee and Adams, Harkness & Hill with certain projected financial data prepared by the Company's management. See "CERTAIN PROJECTED FINANCIAL DATA."

OPINION OF ADAMS, HARKNESS & HILL

Pursuant to a letter agreement dated as of , 1999 (the "Adams, Harkness & Hill Engagement Letter"), Adams, Harkness & Hill was retained by the Special Committee to render an opinion (the

"Opinion") as to the fairness, from a financial point of view, to the Public Stockholders, of the consideration to be received by such Public Stockholders in connection with the Merger. The Special Committee selected Adams, Harkness & Hill for a number of reasons, including its qualifications, expertise and reputation in the area of valuation and financial advisory work. Adams, Harkness & Hill is a nationally recognized investment banking firm and is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, private placements and valuations for corporate and other purposes. Adams, Harkness & Hill also was engaged by the special committees of the Board of Directors of each of ThermoRetec and Randers/Killam, respectively, to render opinions as to the fairness to the holders of common stock of ThermoRetec and Randers/Killam other than Thermo Electron and its affiliates, of the consideration to be received by such holders in separate transactions involving Thermo Electron, and received customary fees therefor. At the meeting of the TerraTech Board on October 19, 1999, Adams, Harkness & Hill rendered its oral Opinion, subsequently confirmed in writing, that, as of October 19, 1999, based upon and subject to the various considerations set forth in the Opinion, the consideration pursuant to the Merger Agreement was fair from a financial point of view to the holders of shares of TerraTech Common Stock other than Thermo Electron and its affiliates. It is a condition to the obligation of Thermo TerraTech to effect the Merger that Adams, Harkness & Hill shall reaffirm orally its written Opinion as of the date of mailing of this Proxy Statement-Prospectus and at the Effective Time.

THE FULL TEXT OF THE WRITTEN OPINION OF ADAMS, HARKNESS & HILL DATED OCTOBER 19, 1999, WHICH SETS FORTH, AMONG OTHER THINGS, THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITATIONS ON THE SCOPE OF THE REVIEW UNDERTAKEN BY ADAMS, HARKNESS & HILL IN RENDERING ITS OPINION, IS ATTACHED AS APPENDIX B TO THIS PROXY STATEMENT-PROSPECTUS AND IS INCORPORATED HEREIN BY REFERENCE. THERMO TERRATECH SHAREHOLDERS ARE URGED TO, AND SHOULD, READ THE OPINION CAREFULLY AND IN ITS ENTIRETY. ADAMS, HARKNESS & HILL'S OPINION IS DIRECTED TO THE SPECIAL COMMITTEE AND ADDRESSES ONLY THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED BY THE PUBLIC STOCKHOLDERS PURSUANT TO THE MERGER AGREEMENT, FROM A FINANCIAL POINT OF VIEW AS OF OCTOBER 19, 1999, AND DOES NOT ADDRESS ANY OTHER ASPECT OF THE MERGER OR CONSTITUTE A RECOMMENDATION TO ANY HOLDER OF THERMO TERRATECH COMMON STOCK AS TO HOW TO VOTE AT THE SPECIAL MEETING. THE SUMMARY OF THE OPINION OF ADAMS, HARKNESS & HILL SET FORTH IN THIS PROXY STATEMENT-PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.

The following is a summary of the various sources of information and valuation methodologies used by Adams, Harkness & Hill in arriving at its Opinion regarding the proposed transaction with Thermo Electron. To determine the fairness of the transaction, Adams, Harkness & Hill employed analyses based on the following:

- Public company peers' financial performance and relative valuations;

- Transaction premiums paid in selected precedent acquisitions;

- Stock price performance of Thermo TerraTech, ThermoRetec, and Randers/Killam;

- Discounted cash flow analysis; and

- Break-up analysis of Thermo TerraTech.

In conducting its investigation and analysis and in arriving at its Opinion, Adams, Harkness & Hill reviewed the information and took into account the financial and economic factors it deemed relevant and

material under the circumstances. The material actions undertaken by Adams, Harkness & Hill in its analysis were as follows:

- Reviewed internal financial information concerning the business and operations of Thermo TerraTech that was furnished to Adams, Harkness & Hill by Thermo TerraTech's management for purposes of its analysis, as well as publicly available information, including but not limited to Thermo TerraTech's recent filings with the Commission;

- Reviewed the Merger Agreement in the form presented to the Special Committee;

- Compared the historical market prices and trading activity of the Common Stock with those of other publicly traded companies that Adams, Harkness & Hill deemed relevant;

- Compared the financial position and operating results of Thermo TerraTech with those of other publicly traded companies that Adams, Harkness & Hill deemed relevant;

- Compared the proposed financial terms of the Merger with the terms of other merger and acquisition transactions that Adams, Harkness & Hill deemed relevant; and

- Held discussions with members of Thermo TerraTech's senior management concerning Thermo TerraTech's historical and current financial condition and operating results, as well as its future prospects.

Adams, Harkness & Hill also reviewed relevant industry market research studies, company research reports and key economic and market indicators, including interest rates, and general stock market performance. Other than as set forth above, Adams, Harkness & Hill did not review any additional information in preparing its opinion that, independently, was material to its analysis. As a part of its engagement, Adams, Harkness & Hill was not requested to, and did not, solicit any third party indications of interest in acquiring Thermo TerraTech. The Special Committee did not place any limitation upon Adams, Harkness & Hill with respect to the procedures followed or factors considered by Adams, Harkness & Hill in rendering its Opinion.

In rendering its Opinion, Adams, Harkness & Hill assumed and relied upon the accuracy and completeness of all of the financial and other information that was publicly available or provided to Adams, Harkness & Hill by, or on behalf of, Thermo TerraTech, and did not independently verify that information. Adams, Harkness & Hill assumed, with the Special Committee's consent, that:

- All material assets and liabilities (contingent or otherwise, known or unknown) of Thermo TerraTech are as set forth in its financial statements;

- Obtaining all regulatory and other approvals and third party consents required for consummation of the proposed Merger would not have a material effect on the anticipated benefits of the Merger; and

- The Merger would be consummated in accordance with the terms set forth in the Merger Agreement, without any amendment thereto and without waiver by Thermo TerraTech or Thermo Electron of any of the conditions to their respective obligations thereunder.

Adams, Harkness & Hill assumed that the projections examined by it were reasonably prepared based upon the best available estimates and good faith judgments of the Company's senior management as to the future performance of TerraTech. In conducting its review, Adams, Harkness & Hill did not obtain an independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of TerraTech. After consultation with the Special Committee and with its consent, however, Adams, Harkness & Hill engaged Environmental Business International, Inc., a leading independent strategic consulting firm serving the environmental services industry, to support its assessments of environmental industry conditions. Adams, Harkness & Hill's Opinion did not predict or take into account any possible economic,

monetary or other changes which may occur, or information which may come available, after the date of its written Opinion.

PUBLIC COMPANY PEER ANALYSIS--TERRATECH

Thermo TerraTech provides industrial outsourcing services and manufacturing support encompassing a broad range of specializations. Thermo TerraTech operates in four segments: environmental-liability management, engineering and design, laboratory testing, and metal treating. The Environmental-liability Management segment includes ThermoRetec, a majority-owned, publicly held subsidiary of Thermo TerraTech. ThermoRetec is a national provider of environmental-liability and resource-management services. Through a nationwide network of offices, ThermoRetec offers these and related consulting services in four areas:
consulting and engineering, nuclear remediation, soil remediation, and fluids recycling. Thermo TerraTech's majority-owned, privately-held Thermo EuroTech N.V. subsidiary, located in the Netherlands, specializes in converting "off-spec" and contaminated petroleum fluids into useable oil products. Thermo EuroTech also provides in-plant waste management and recycling services through its Ireland-based Green Sunrise Holdings Ltd. subsidiary.

The Engineering and Design segment includes Randers/Killam, another majority-owned, publicly-held subsidiary of Thermo TerraTech. Randers/Killam provides comprehensive engineering and outsourcing services in four areas: water and wastewater treatment, process engineering and construction, highway and bridge engineering, and infrastructure engineering. This segment also includes Thermo TerraTech's wholly owned Normandeau Associates Inc. subsidiary, which provides consulting services that address natural resource management issues. Thermo TerraTech's wholly owned Thermo Analytical Inc. subsidiary, which represents the Laboratory Testing segment, operates analytical laboratories that provide environmental- and pharmaceutical-testing services, primarily to commercial clients throughout the United States. The Metal Treating segment performs metallurgical processing services using thermal-treatment equipment at locations in California, Minnesota, and Wisconsin.

Accordingly, Adams, Harkness & Hill established three groups of publicly traded companies to address the four business areas in which Thermo TerraTech operates, either directly, through wholly-owned subsidiaries, or indirectly, through financial reporting consolidation of majority-owned subsidiaries ThermoRetec and Randers/Killam. The three groups consist of:

- Environmental Services Companies

- Diversified Civil Engineering/Construction/Environmental/Consulting Companies

1) Baker (Michael) Corp.;

2) Jacobs Engineering Group, Inc.; and

3) URS Corp.

- Environmental Services and Consulting Companies

1) EA Engineering Science & Technology;

2) Ecology and Environment;

3) GZA GeoEnvironmental Technologies;

4) Harding Lawson Associates Group; and

5) Tetra Tech Inc.

- Environmental Engineering and Remediation Services

1) IT Group Inc.;

2) National Environmental Services Co.;

3) Sevenson Environmental Services Inc.;

4) TRC Companies Inc.;

5) Versar, Inc.; and

6) Weston (Roy F.)

- Metal Treatment Companies

1) Bodycote International;

2) Gibraltar Steel Corp.; and

3) Lindberg Corp.

- Commercial Laboratories

1) Applied Analytical Ind.;

2) BioReliance Corp.;

3) Covance Inc.;

4) Parexel International Corp.; and

5) Quintiles Transnational Corp.

Adams, Harkness & Hill compared certain financial measures and metrics of Thermo TerraTech with those of the Peer Group Companies. Such information included: Market Capitalization ("MC"); Enterprise Value ("EV"); Price/Projected Calendar 1999 & 2000 Earnings Ratios ("Forward 1999 & 2000 P/ Es"); Enterprise Value/last twelve months' ("LTM") Revenue; LTM Operating Margin; Market Capitalization/Book Value; and Year/Year Quarterly Revenue Growth.

Enterprise Value/LTM Revenue ("EV/LTM Revenue") and Price/Earnings ("P/E") multiples imply the range of value public markets place on companies in a particular market segment. Adams, Harkness & Hill employed an EV valuation in this analysis because this methodology implies value based on a company's operations, regardless of how the company finances those operations. To determine EV, MC is calculated as the product of a company's common stock price per share (Adams, Harkness & Hill used the closing price on October 8, 1999, for all public company comparable analyses) multiplied by the number of diluted shares outstanding. The MC is then adjusted for a company's debt and cash positions by adding the debt balance and subtracting the cash balance to arrive at an EV. Unlike EV-based valuation methodologies, P/E-based valuation methodologies imply a value based on net after-tax earnings inclusive of the earnings impact of how the company finances its operations. The following equation illustrates the manner in which EV has been calculated:

((market value of equity) + (debt))-(cash, cash equivalents and short-term investments)

In order of descending EV/LTM Revenue, the Peer Group Companies (for which sufficient data was available) ranked as follows:

- Environmental Services Companies

1) Tetra Tech Inc.;

2) National Environmental Services Co.;

3) URS Corp.;

4) IT Group Inc.;

5) TRC Companies Inc.;

6) Versar, Inc.;

7) Sevenson Environmental Services Inc.;

8) Jacobs Engineering Group, Inc.;

9) Ecology and Environment;

10) Weston (Roy F.);

11) GZA GeoEnvironmental Technologies;

12) Baker (Michael) Corp.;

13) EA Engineering Science & Technology; and

14) Harding Lawson Associates Group

- Metal Treatment Companies

1) Bodycote International;

2) Gibraltar Steel Corp.; and

3) Lindberg Corp.

- Commercial Laboratories

1) Applied Analytical Ind.;

2) Quintiles Transnational Corp.;

3) Covance Inc.;

4) BioReliance Corp.; and

5) Parexel International Corp.

In order of descending Price/Projected Calendar 1999 Earnings (where earnings per share estimates were available), the Peer Group Companies ranked as follows:

- Environmental Services Companies

1) Tetra Tech Inc.;

2) EA Engineering Science & Technology;

3) Jacobs Engineering Group, Inc.;

4) TRC Companies Inc.;

5) Harding Lawson Associates Group;

6) URS Corp.; and

7) IT Group Inc.

- Metal Treatment Companies

1) Gibraltar Steel Corp.; and

2) Lindberg Corp.

- Commercial Laboratories

1) Quintiles Transnational Corp.;

2) Parexel International Corp.; and

3) Covance Inc.

In order of descending Price/Projected Calendar 2000 Earnings (where earnings per share estimates were available), the Peer Group Companies ranked as follows:

- Environmental Services Companies

1) Tetra Tech Inc.;

2) Jacobs Engineering Group, Inc.;

3) URS Corp.;

4) IT Group Inc.; and

5) EA Engineering Science & Technology

- Metal Treatment Companies

1) Gibraltar Steel Corp.; and

2) Lindberg Corp.

- Commercial Laboratories

1) BioReliance Corp.;

2) Applied Analytical Ind.;

3) Quintiles Transnational Corp.;

4) Covance Inc.; and

5) Parexel International Corp.

The low, high and average financial ratios for the Peer Group Companies are listed in the table below:

MULTIPLE                                                     LOW        HIGH     AVERAGE
--------                                                   --------   --------   --------
Enterprise Value/LTM Revenue.............................    0.1         1.2        0.6
Calendar Year 1999 Price/Earnings........................    8.5        21.2       14.1
Calendar Year 2000 Price/Earnings........................    4.2        17.6        9.5

MULTIPLE                                                     LOW        HIGH     AVERAGE
--------                                                   --------   --------   --------
Enterprise Value/LTM Revenue.............................    0.8         2.7       1.4
Calendar Year 1999 Price/Earnings........................    6.0        12.1       9.1
Calendar Year 2000 Price/Earnings........................    5.9        10.5       8.2

MULTIPLE                                                    LOW        HIGH     AVERAGE
--------                                                  --------   --------   --------
Enterprise Value/LTM Revenue............................     0.4        2.5        1.2
Calendar Year 1999 Price/Earnings.......................    10.7       13.9       11.9
Calendar Year 2000 Price/Earnings.......................     8.8       11.5       10.0

To arrive at TerraTech's P/E multiples for Calendar Year 1999 and Calendar Year 2000, Adams, Harkness & Hill used TerraTech's internal management projections, as external research analysts' projections have not been published.

Adams, Harkness & Hill compared these ranges of multiples to the multiple implied by the proposed consideration of approximately:

- Enterprise Value/LTM Revenue:.............................     0.9
- Calendar Year 1999 Price/Earnings:........................    24.3
- Calendar Year 2000 Price/Earnings:........................    12.0

TRANSACTION PREMIUMS PAID ANALYSIS

Premiums paid in precedent public company change of control transactions typically imply the range of consideration acquirers are willing to pay above a seller's stock price prior to the announcement of the relevant transaction. In this analysis, the value of consideration paid in transactions involving stock is computed using the buyer's stock price immediately prior to announcement, while the seller's stock price is measured one trading day, one week, and one month prior to the announcement of the transaction. Adams, Harkness & Hill reviewed 44 precedent transactions involving selected environmental services companies from January 1, 1998 to October 19, 1999, of which seven transactions involved the acquisition of the equity shares of publicly-traded companies for which share price data was available. In addition, Adams, Harkness & Hill reviewed 20 comparable precedent transactions involving selected metal treatment companies and 21 precedent transactions involving selected commercial laboratories. Although

Adams, Harkness & Hill is aware of the consolidation activity in the competitive metal treatment and commercial laboratory industries, and as such is aware of the appropriate metrics and multiples used to establish a range of value for companies in the respective industries, such data for publicly-traded companies was not sufficiently available.

In order of descending premium paid based on the seller's stock price one trading day prior to announcement, the selected environmental transactions used were as follows:

1) Carmeuse Lime's acquisition of Dravo Corp.;

2) IT Group Inc.'s acquisition of Fluor Daniel GTI;

3) URS Corp.'s acquisition of Dames & Morre Group;

4) IT Group Inc.'s acquisition of OHM Corp.;

5) IT Group Inc.'s acquisition of Emcon;

6) USA Waste Services' acquisition of Trans American Waste Industries; and

7) Special purposes acquisition vehicle of Weiss, Peck & Greer's acquisition of ATC Group Services.

Based upon Adams, Harkness & Hill's analysis of premia paid in selected precedent environmental services industry transactions, the low, high and average premia (discounts) paid to sellers' share prices (using the buyer's share price on the day prior to the announcement date of the transaction to calculate consideration in stock transactions) for the month, week, and day prior are listed below:

                                                             LOW        HIGH     AVERAGE
                                                           --------   --------   --------
Premium Paid--1 Month prior..............................      3%        74%        42%
Premium Paid--1 Week prior...............................     (8%)       84%        33%
Premium Paid--1 Day prior................................      0%        87%        31%

Adams, Harkness & Hill compared these ranges of implied premia to the implied premium offered by the difference between $7.25 (assuming that no less than the Floor Price would be paid) and the closing price of the ThermoTerraTech Common Stock on the dates noted below:

Prior to announcement of the Merger Agreement (10/20/99):

- Premium Paid--1 Month prior:..............................     30%
- Premium Paid--1 Week prior:...............................     38%
- Premium Paid--1 Day prior:................................     35%

Adams, Harkness & Hill also compared these ranges of precedent premia to the implied premium offered by the difference between $7.25 (assuming no less than the Floor Price would be paid) and the closing price of the Thermo TerraTech Common Stock on the dates noted below:

Prior to original TMO reorganization announcement (8/12/98):

- Premium Paid--1 Month prior:..............................     49%
- Premium Paid--1 Week prior:...............................     53%
- Premium Paid--1 Day prior:................................     49%

Prior to TMO restructuring announcement (5/24/99):

- Premium Paid--1 Month prior:..............................     61%
- Premium Paid--1 Week prior:...............................     66%
- Premium Paid--1 Day prior:................................     41%

STOCK PRICE PERFORMANCE ANALYSIS

Adams, Harkness & Hill examined the following for Thermo TerraTech and Thermo Electron:

1) 200-Day stock price performance;

2) Stock price performance since IPO;

3) Stock price performance from January 1, 1998 to present compared to the NASDAQ Composite, S&P 500 and Russell 2000 stock indices;

4) Stock price performance from January 1, 1998 to present compared to an index of each companies' respective public company comparables.

In addition, in assessing the value of the Thermo Common Stock, Adams, Harkness & Hill examined selected research reports on Thermo Electron, produced between February 25, 1999 and June 1, 1999, by a number of institutional research analysts.

DISCOUNTED CASH FLOW ANALYSIS

Adams, Harkness & Hill performed a discounted cash flow analysis to estimate the present value of the stand-alone unlevered (i.e. before interest expense) after-tax cash flows of Thermo TerraTech. To perform the discounted cash flow analysis, Adams, Harkness & Hill used the following data sources and assumptions:

- Management projections for the year ended December 31, 1999 through the year ended December 31, 2003 for the following Thermo TerraTech subsidiaries or divisions:

ThermoRetec;

Randers/Killam;

Lancaster Labs;

Metal Treating;

Normandeau; and

EuroTech.

- Unlevered after-tax cash flows were calculated as the after-tax (40% effective rate) operating earnings of the above listed businesses adjusted for the addition of non-cash expenses and the deduction of uses of cash not reflected in the income statement.

- Weighted average costs of capital that ranged from 9.0% to 16.5% for the Environmental Services Companies (e.g. ThermoRetec, Randers/Killam, Normandeau and EuroTech) and Metal Treatment Companies and from 11.0% to 18.5% for the Commercial Laboratories.

- Terminal values based on the above listed businesses' Earnings Before Interest and Taxes ("EBIT") for the year ended December 31, 2003, times EBIT multiples that ranged from 7.0x to 12.0x for the Environmental Services and Metal Treatment Companies (excluding Eurotech, whose EBIT multiple ranged from 5.0x to 10.0x) and from 10.0x to 15.0x for Commercial Laboratories.

Adams, Harkness & Hill calculated the weighted average cost of capital for each of the Peer Group Companies, using a risk free rate of 6.0% and a market risk premium of 7.4%, and arrived at the following ranges:

- Environmental Services Companies: 7.1% to 11.1%, with an average of 9.3%

- Metal Treatment Companies: 9.0% to 10.7%, with an average of 9.9%

- Commercial Laboratories: 9.2% to 14.1%, with an average of 11.9%

In order to calculate an appropriate range of terminal values, Adams, Harkness & Hill also calculated an EV/EBIT multiple for each of the Peer Group Companies and arrived at the following ranges:

- Environmental Services Companies: 1.5x to 25.9x, with an average of 10.6x

- Metal Treatment Companies: 5.5x to 12.0x, with an average of 8.9x

- Commercial Laboratories: 3.1x to 12.7x with an average of 7.1x

For each of the above listed TerraTech businesses, Adams, Harkness & Hill combined the calculated present value of cash flows for the year ended December 31, 1999 through December 31, 2003 with the business' respective EBIT terminal value to arrive at a range of EVs based on the above assumptions.

The EVs of ThermoRetec, Randers/Killam and EuroTech were then multiplied by TerraTech's percent ownership of each entity and combined with the EVs for the remaining businesses to arrive at a range of total EVs for TerraTech. These EVs were adjusted by adding TerraTech's cash balance and subtracting its debt balance to arrive at implied MCs (i.e. equity values). Adams, Harkness & Hill divided the computed equity values by TerraTech's shares outstanding and arrived at a range of implied per share values of $5.90 to $17.21, with a median implied value of $10.88.

BREAK-UP ANALYSIS OF TERRATECH

Adams, Harkness & Hill performed a break-up analysis of Thermo TerraTech. A break-up analysis is an assessment of the cumulative value of individual operations and/or assets if valued on a stand-alone basis, assuming the arm's length sale of each operation to a third party.

Adams, Harkness & Hill derived an implied value for each of TerraTech's businesses based on the high, low and median EV/LTM Revenue multiples from the businesses' respective public company peers analyses.

                                                             HIGH       LOW       MEDIAN
                                                           --------   --------   --------
- ThermoRetec............................................  1.3          0.2        0.5

- Randers/Killam.........................................  1.3          0.2        0.5

- Lancaster Labs.........................................  2.5          0.4        1.0

- Metal Treating.........................................  2.7          0.8        0.8

- Normandeau.............................................  1.3          0.2        0.5

- EuroTech...............................................  1.3          0.2        0.5

To arrive at a range of overall implied value for Thermo TerraTech, Adams, Harkness & Hill undertook the following:

- Multiplied the respective businesses' LTM revenues by the above multiples to arrive at high, low and median implied valuations for each business.

- The high, low and median valuations of ThermoRetec, Randers/Killam and EuroTech were then multiplied by Thermo TerraTech's percent ownership of each entity and combined with the high, low and median valuations for the remaining businesses to arrive at high, low and median EVs for TerraTech.

- The high, low and median EVs were adjusted by adding Thermo TerraTech's cash balance and subtracting its debt balance to arrive at implied equity values.

- Adams, Harkness & Hill divided the computed equity values by Thermo TerraTech's shares outstanding and arrived at implied per share values of:
high--$16.02 and median--$1.21 (the low value was less than $0.00).

SUMMARY OF VALUATION ANALYSES

The foregoing summary does not purport to be a complete description of the analyses performed by Adams, Harkness & Hill. The preparation of a fairness opinion is a complex process and is not susceptible

to partial analysis or summary description. Adams, Harkness & Hill believes that its analyses must be considered as a whole, and that selecting portions of such analysis without considering all analyses and factors would create an incomplete view of the processes underlying its Opinion. Adams, Harkness & Hill did not attempt to assign specific weights to particular analyses. However, there were no specific factors reviewed by Adams, Harkness & Hill that did not support its Opinion. Any estimates contained in Adams, Harkness & Hill's analyses are not necessarily indicative of actual values, which may be significantly more or less favorable than as set forth therein. Estimates of values of companies do not purport to be appraisals or necessarily to reflect the prices at which companies may actually be sold. Because such estimates are inherently subject to uncertainty, Adams, Harkness & Hill does not assume responsibility for their accuracy.

Taken together, the information and analyses employed by Adams, Harkness & Hill lead to Adams, Harkness & Hill's overall Opinion that the consideration to be received in the merger is fair, from a financial point of view, to the Minority Stockholders.

PURPOSE AND REASONS OF THERMO ELECTRON FOR THE MERGER

The purpose of Thermo Electron for engaging in the transactions contemplated by the Merger Agreement is for Thermo Electron to acquire all of the outstanding shares of TerraTech Common Stock. In determining to acquire such shares of TerraTech Common Stock at this time, Thermo Electron considered the following factors: (i) recent public capital market trends affecting micro-cap companies;
(ii) the latest market trends in the markets in which the Company competes, primarily the environmental-liability management market; (iii) the debt owed by the Company, including the debt owed to Thermo Electron; (iv) the reduction in the amount of public information available to competitors about Thermo TerraTech's business that would result from the termination of the Company's obligations as a reporting company to the Commission; (v) the elimination of additional burdens on management associated with public reporting and other tasks resulting from the Company's public company status, including, for example, the dedication of time and resources of management and of the Board to stockholder and analyst inquiries, and investor and public relations, (vi) the decrease in costs, particularly those associated with being a public company (for example, as a privately-held entity, the Company would no longer be required to file quarterly, annual or other periodic reports with the Commission or publish and distribute to its stockholders annual reports and proxy statements), that Thermo Electron anticipates could result in savings of approximately $450,000 per year, including the approximate cost of associated legal and accounting fees; and (vii) the greater flexibility that the Company's management would have to focus on long-term business goals, as opposed to quarterly earnings, as a non-reporting company.

In addition, the Thermo Electron board of directors considered the advantages and disadvantages of certain alternatives to acquiring the Public Stockholder interest in Thermo TerraTech, including (i) selling its equity interest in the Company and (ii) leaving Thermo TerraTech as a majority-owned, public subsidiary. The first alternative, that of selling its equity interest in the Company, was briefly considered by Thermo Electron management, but it was not an alternative that was pursued as reasonable, given that Thermo Electron did not want to sell its equity interest in the Company. The advantages to leaving Thermo TerraTech as a majority-owned, public subsidiary that Thermo Electron considered included (i) the avoidance of dilution to the Thermo Electron stockholders by the issuance of more of its shares of common stock as consideration for shares of TerraTech Common Stock and (ii) maintaining the potential access Thermo TerraTech has to capital in the public markets as a public company. The disadvantages to leaving Thermo TerraTech as a majority-owned, public subsidiary that Thermo Electron considered included
(i) the costs associated with being a public company and (ii) the public information available to competitors about Thermo TerraTech's business as result of its filing obligations with the Commission. Thermo Electron also considered the number of Thermo TerraTech shares held by the Public Stockholders, recent trends in the price of the TerraTech Common Stock and the relative lack of liquidity for the TerraTech Common Stock. Thermo Electron also reviewed the net overall cost of the transaction and its benefits, including the transaction's contribution to Thermo Electron's earnings. Thermo Electron also

explored the impact on its own common stock of the issuance of shares proposed to be used for this transaction. In addition, Thermo Electron considered that, by acquiring the minority stockholder interest in Thermo TerraTech, it would advance the goal of its proposed corporate reorganization, announced in August 1998, to reduce the number of Thermo Electron's majority-owned, public subsidiaries. After consideration of these various factors, Thermo Electron decided to make a proposal to Thermo TerraTech to acquire for stock, through a merger, all of the outstanding shares of TerraTech Common Stock that it did not already own. After extensive negotiations with the Special Committee, Thermo Electron proposed an exchange ratio of 0.4 share of Thermo Common Stock for every share of TerraTech Common Stock (which ratio is subject to adjustment). The Floor Price ($7.25 per share) represents a premium of (i) approximately 73% over the closing price of the TerraTech Common Stock reported in the consolidated transaction reporting system on April 30, 1999, the last day on which trading in the TerraTech Common Stock occurred prior to Thermo Electron's first public announcement of a proposal to take Thermo TerraTech private (no price having been determined and, accordingly, no exchange ratio or financial terms announced as of that date) and (ii) approximately 35% over the closing price of the TerraTech Common Stock reported in the consolidated transaction reporting system on October 19, 1999, the trading day immediately prior to the public announcement of the financial terms of Thermo Electron's proposal.

As of , Thermo Electron beneficially owned approximately 87% of the outstanding TerraTech Common Stock.

PURPOSE AND REASONS OF THERMO TERRATECH FOR THE MERGER

The purpose of Thermo TerraTech for engaging in the transactions contemplated by the Merger Agreement is to become part of a larger operating entity and thereby potentially realize improved operating and financial results and a stronger competitive position. Thermo TerraTech considered the following factors in determining to engage in the Merger at this time: (i) the benefits to be gained from becoming part of a larger operating entity, (ii) recent public capital market trends affecting micro-cap companies; (iii) the latest market trends in the markets in which the Company competes, primarily the environmental-liability and resource-management services industry; (iv) the debt owed by the Company, including the debt owed to Thermo Electron; (v) the reduction in the amount of public information available to competitors about Thermo TerraTech's business that would result from the termination of the Company's obligations as a reporting company to the Commission, (vi) the elimination of additional burdens on management associated with public reporting and other tasks resulting from the Company's public company status, including, for example, the dedication of time and resources of management and of the Board to stockholder and analyst inquiries, and investor and public relations;
(vii) the decrease in costs, particularly those associated with being a public company (for example, as a privately-held entity, the Company would no longer be required to file quarterly, annual or other periodic reports with the Commission or publish and distribute to its stockholders annual reports and proxy statements), that Thermo Electron anticipates could result in savings of approximately $450,000 per year, including the approximate cost of associated legal and accounting fees; and (viii) the greater flexibility that the Company's management would have to focus on long-term business goals, as opposed to quarterly earnings, as a non-reporting company.

POSITION OF THERMO ELECTRON AS TO FAIRNESS OF THE MERGER

Thermo Electron considered the findings and recommendation of the Special Committee and the Board with respect to the fairness of the Merger to the Public Stockholders (see "--The Special Committee's and the Board's Recommendation"). As of the date of the Merger Agreement, Thermo Electron adopted the findings and recommendation of the Special Committee and the Board with respect to the fairness of the Merger. Based solely on the findings and recommendation of the Special Committee and its own internal review of the terms of the Merger, Thermo Electron believes that the Merger is both procedurally and substantively fair to the Public Stockholders and that the Exchange Ratio is fair to the Public Stockholders from a financial point of view. Thermo Electron did not attach specific weights to any

factors in reaching its belief as to fairness. Thermo Electron is not making any recommendation as to how the Public Stockholders should vote on the Merger Agreement.

Certain officers and directors of Thermo Electron are also officers and directors of Thermo TerraTech and have certain interests that are in addition to, or different from, the interests of the Public Stockholders. See "--Conflicts of Interest." Thermo Electron considered these potential conflicts of interest and based in part thereon, Thermo Electron's proposed offer was conditioned on, among other things, the approval of the Merger by the Special Committee and the receipt by the Special Committee of a fairness opinion from an investment banking firm.

CONFLICTS OF INTEREST

In considering the recommendation of the Board with respect to the Merger, the Public Stockholders should be aware that certain officers and directors of Thermo TerraTech have interests in connection with the Merger that present them with actual or potential conflicts of interest, as summarized below. In making their respective decisions to recommend the Merger, the Special Committee and the Board were aware of these interests and considered them among the other matters described above under "--The Special Committee's and the Board's Recommendation."

Following consummation of the Merger, the current officers and directors of Thermo TerraTech will continue as the initial officers and directors of the Surviving Corporation; however, Thermo Electron intends to appoint a board of directors comprised solely of members of the Surviving Corporation's and Thermo Electron's management after the Merger. Officers and directors who own TerraTech Common Stock will receive shares of Thermo Common Stock on the same terms as all the other stockholders.

SPECIAL COMMITTEE

As compensation for serving on the Special Committee, which formally met with one or more of its advisors on 16 occasions, either in person or telephonically, from May 1999 through the date of this Proxy Statement-Prospectus, the Board has authorized that the member of the Special Committee receive a special retainer fee of $20,000 and additional fees of $1,000 for each meeting attended in person and $500 for each meeting attended telephonically.

Mr. Vintiadis, the sole member of the Special Committee, holds options to acquire 6,300 shares of TerraTech Common Stock. The options have exercise prices ranging from $4.16 to $10.03. Under the terms of the Merger Agreement, the options held by Mr. Vintiadis will be treated on the same terms as all the other holders of Thermo TerraTech Stock Options and therefore will be assumed by Thermo Electron and converted into options to acquire shares of Thermo Common Stock. See "--Effect of the Merger on Thermo TerraTech Stock Options, Warrants and Debentures." Mr. Vintiadis owns no shares of Thermo TerraTech Common Stock, and accordingly will receive no shares of Thermo Common Stock upon consummation of the Merger. Deferred units equal to 10,716 shares of TerraTech Common Stock have accumulated under Thermo TerraTech's deferred compensation plan for directors for the benefit of Mr. Vintiadis, which units will be converted into the right to receive 5,893.8 shares of Thermo Electron Common Stock (assuming an Exchange Ratio of .55). See "--Deferred Compensation Plan for Directors." The options and deferred units were issued to Mr. Vintiadis pursuant to benefit plans approved by the Company's stockholders.

Mr. Vintiadis is also a member of the Board of Directors of Thermo Instrument Systems Inc., a majority-owned subsidiary of Thermo Electron ("Thermo Instrument"). As compensation for serving on the Thermo Instrument board, Mr. Vintiadis receives an annual retainer of $8,000 and a fee of $1,000 per meeting for attending regular meetings of the board of directors and $500 per meeting 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. In addition, Mr. Vintiadis has been awarded options to purchase 8,636 shares of common stock of Thermo Instrument. Until his resignation on July 26, 1999, Mr. Vintiadis was also a director of Randers/Killam. In addition, Mr. Vintiadis owns shares of Thermo

Common Stock, as set forth in more detail under "Security Ownership of Certain Beneficial Owners and Management--Management."

THE THERMO TERRATECH DIRECTORS AND EXECUTIVE OFFICERS

The members of the Thermo TerraTech Board of Directors, other than the member of the Special Committee, and executive officers of Thermo TerraTech own in the aggregate 177,645 shares of TerraTech Common Stock and will receive an aggregate of 97,705 shares of Thermo Electron Common Stock upon consummation of the Merger (assuming an Exchange Ratio of .55). In addition, such Board members and executive officers hold options to acquire an aggregate of 673,000 shares of Thermo TerraTech Common Stock, with exercise prices ranging from $4.16 to $10.03, which will be assumed by Thermo Electron and converted into options to acquire shares of Thermo Electron Common Stock on the same terms as all the other holders of Thermo TerraTech Stock Options. See "--Effect of the Merger on Thermo TerraTech Stock Options, Warrants and Debentures." Deferred units equal to 33,731 shares of Thermo TerraTech Common Stock have accumulated under Thermo TerraTech's deferred compensation plan for directors, which units will be converted into the right to receive 18,552 shares of Thermo Common Stock (assuming an Exchange Ratio of .55). See "--Deferred Compensation Plan for Directors." One member of the Thermo TerraTech Board of Directors owns a warrant to purchase an aggregate of 12,500 shares of TerraTech Common Stock, which will be converted into a warrant to purchase Thermo Common Stock on the same terms as all the other holders of warrants to purchase TerraTech Common Stock. See "--Effect of the Merger on Thermo TerraTech Stock Options, Warrants and Debentures." Such Board members and executive officers also beneficially owned an aggregate of 2,312,349 shares of common stock of Thermo Electron as of October 2, 1999.

Further, certain members of the Board and certain executive officers hold directorship or officer positions with Thermo Electron. Mr. Melas-Kyriazi, the chief financial officer of Thermo TerraTech, is also a vice president and the chief financial officer of Thermo Electron. Mr. Kelleher, the chief accounting officer of Thermo TerraTech, is also senior vice president, finance and administration, and the chief accounting officer of Thermo Electron. Mr. Hatsopoulos, a director of Thermo TerraTech, is also a director and vice chairman of the board of Thermo Electron. Mr. Holt, a director of Thermo TerraTech, is also the chief operating officer, energy and environment, of Thermo Electron. Mr. Rainville, a director of Thermo TerraTech, is also the chief operating officer, recycling and resource recovery, of Thermo Electron.

INDEMNIFICATION AND INSURANCE

The Merger Agreement provides that the Surviving Corporation shall, and Thermo Electron will cause the Surviving Corporation to, fulfill and honor in all respects the indemnification obligations of Thermo TerraTech, pursuant to Thermo TerraTech's Certificate of Incorporation and Bylaws, as in effect on the date of the Merger Agreement. The Surviving Corporation's Certificate of Incorporation and Bylaws will contain the provisions with respect to indemnification and elimination of liability for monetary damages currently set forth in Thermo TerraTech's Certificate of Incorporation and Bylaws and such provisions will not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would adversely affect the rights of those individuals who, as of the date of the Merger Agreement and at any time from the date of the Merger Agreement until the Effective Time, were directors and executive officers of Thermo TerraTech, unless such modification is required by law. See "--Indemnification and Insurance."

In addition, Thermo Electron will cause the Surviving Corporation, either directly or through participation in Thermo Electron's umbrella policy, to maintain in effect, for a period of six (6) years after the Effective Time, a directors' and officers' liability insurance policy covering the Thermo TerraTech executive officers and directors who, on the date of the Merger Agreement, were then covered by Thermo Electron's liability insurance policy, with coverage no less favorable in amount and scope than such director's and officer's existing coverage. However, in no event will the Surviving Corporation be required

to pay premiums for such insurance in excess of 175% of the current annual premiums, as adjusted for inflation each year, allocable to and paid by Thermo TerraTech. See "--Indemnification and Insurance."

The Merger Agreement also provides that Thermo TerraTech will, regardless of whether the Merger becomes effective, indemnify Mr. Vintiadis against any costs and expenses paid in connection with any claim or action arising out of or pertaining to any action or omission in Mr. Vintiadis' capacity as a director or fiduciary of Thermo TerraTech (including as a member of the Special Committee or in connection with the transactions contemplated by the Merger Agreement) that occurs on, before or after the Effective Time, until the expiration of the statute of limitations relating to such action or omission. Thermo TerraTech shall pay Mr. Vintiadis' expenses in advance of the final disposition of the action upon receipt of an undertaking by Mr. Vintiadis to repay those expenses if it is later decided that he is not entitled to such payment. If the Merger becomes effective, Thermo Electron will be jointly and severally responsible for the indemnification and expenses advancement obligations as described above. If the Merger does not become effective, Thermo Electron shall only be responsible for indemnifying or advancing expenses for matters that arise out of or pertain to the work of the Special Committee, the Merger Agreement or the transactions contemplated by the Merger Agreement. See "--Indemnification and Insurance."

In addition, Thermo Electron has entered into separate indemnification agreements with each of the members of the Board of Directors, including the member of the Special Committee, providing for indemnification of and advancement of expenses to such directors directly by Thermo Electron in the event that a director, by reason of his or her status as a director or officer of Thermo TerraTech (or service as a director, officer or fiduciary of another enterprise at the request of Thermo Electron), is made or threatened to be made a party to any threatened, pending, or completed action, suit or other proceeding, whether civil, criminal, administrative or investigative, if the director acted in good faith and in a manner the director reasonably believed to be in or not opposed to the best interests of Thermo Electron, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In the case of any threatened, pending or completed action, suit or proceeding by or in the right of Thermo Electron, indemnification shall be made to the maximum extent permitted under Delaware law. See "THE MERGER--Indemnification and Insurance."

CERTAIN EFFECTS OF THE MERGER

As a result of the Merger, Thermo Electron will beneficially own the entire equity interest in Thermo TerraTech. Thermo Electron will have complete control over the conduct of Thermo TerraTech's business and will have a 100% interest in the net book value and net earnings of Thermo TerraTech and any future increases in the value of Thermo TerraTech. Thermo Electron's ownership of Thermo TerraTech prior to the transaction contemplated herein was approximately 87%. Upon completion of this transaction, Thermo Electron's interest in the Company's net book value of $48.9 million on July 3, 1999 and net loss of $1.4 million and $45.1 million for the fiscal year ended April 3, 1999 and the three months ended July 3, 1999, respectively, would increase from approximately 87% of such amounts to 100% of such amounts. The Public Stockholders will no longer have any interest in, and will not be stockholders of, Thermo TerraTech and therefore will not directly participate in Thermo TerraTech's future earnings and potential growth and will no longer bear the risk of any decreases in the value of the Company. Instead, the stockholders of the Company other than Thermo Electron will have the right to receive 0.4 share of Thermo Common Stock for each share held, subject to adjustment.

In addition, upon consummation of the Merger, the TerraTech Common Stock will no longer be traded on the AMEX, price quotations with respect to sales of shares in the public market will no longer be available and the registration of the TerraTech Common Stock under the Exchange Act will be terminated. The termination of registration of the TerraTech Common Stock under the Exchange Act will eliminate the Company's obligation to file periodic financial and other information with the Commission and will make most of the provisions of the Exchange Act, such as the short-swing profit recovery

provisions of Section 16(b) and the requirement of furnishing a proxy or information statement in connection with stockholders' meetings, no longer applicable.

As a condition to the consummation of the Merger, Thermo Electron and Thermo TerraTech will receive an opinion from Hale and Dorr LLP regarding certain tax matters relating to the Merger, including that the Merger will be treated for federal income tax purposes as a tax-free reorganization under Section 368(a) of the Internal Revenue Code if the Merger is consummated in accordance with the terms of the Merger Agreement. Provided that the Merger does qualify as a reorganization, no gain or loss will generally be recognized for federal income tax purposes by Thermo TerraTech stockholders upon their receipt of shares of Thermo Common Stock in exchange for their shares of TerraTech Common Stock, except to the extent of cash received in lieu of fractional shares. Such opinion is subject to certain limitations and qualifications and is based upon certain factual assumptions and representations. Furthermore, such opinion is not binding on the Internal Revenue Service. IN VIEW OF THE COMPLEXITIES OF FEDERAL INCOME AND OTHER TAX LAWS, EACH THERMO TERRATECH STOCKHOLDER SHOULD CONSULT WITH SUCH STOCKHOLDER'S TAX ADVISOR REGARDING, AMONG OTHER THINGS, THE FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAX CONSEQUENCES OF THE MERGER APPLICABLE TO SUCH STOCKHOLDER'S SPECIFIC CIRCUMSTANCES.

The Merger will not have any United States federal tax consequences for Thermo Electron stockholders. See "FEDERAL INCOME TAX CONSEQUENCES."

CONDUCT OF THERMO TERRATECH'S BUSINESS AFTER THE MERGER

Thermo Electron is continuing to evaluate Thermo TerraTech's business, assets, practices, operations, properties, corporate structure, capitalization, management and personnel and discuss what changes, if any, will be desirable. Subject to the foregoing and the balance of this section, for the foreseeable future, Thermo Electron expects that the day-to-day business and operations of Thermo TerraTech will be conducted substantially as they are currently being conducted by Thermo TerraTech. On May 24, 1999, Thermo TerraTech announced its decision to sell various businesses at its Thermo EuroTech N.V., ThermoRetec and Randers/Killam subsidiaries and to record pretax restructuring and other charges totaling approximately $65 million in connection with the sales of such businesses. The Company has had preliminary discussions with potential buyers for these facilities, but except as described in the next paragraph, the Company has not received any firm offers for these units. Thermo Electron intends to carry out Thermo TerraTech's intention with respect to these matters to the extent that they are not completed prior to the consummation of the Merger. Thermo Electron does not currently intend to cause the disposition of any other material assets of Thermo TerraTech, but it may, in the future, reconsider its position as it continues to evaluate the Company. Additionally, Thermo Electron does not currently contemplate any material change in the composition of Thermo TerraTech's current management except that Thermo Electron intends to appoint a board of directors comprised of the Surviving Corporation's management after the Merger.

Randers/Killam is currently negotiating with one of its directors, Mr. Thomas R. Eurich, who is also a Vice President of Randers/Killam, the sale of its Randers division to a corporation to be formed by Mr. Eurich and other members of the Randers division management. The terms of this proposed transaction have been considered and will be considered by Adams, Harkness & Hill in providing its oral opinion prior to the date of mailing of this Proxy Statement and the Effective Time, that the Merger is fair, from a financial point of view, to the Public Stockholders. See "CERTAIN TRANSACTIONS."

CONDUCT OF THE BUSINESS OF THERMO TERRATECH IF THE MERGER IS NOT CONSUMMATED

If the Merger is not consummated, the Board of Directors expects that the Company's current management will continue to operate the Company's business substantially as currently operated, except with respect to the businesses that may be sold. See "--Conduct of Thermo TerraTech's Business After the Merger." No other alternatives are currently being considered.

CONVERSION OF SECURITIES

At the Effective Time, subject to the terms, conditions and procedures set forth in the Merger Agreement, each share of Thermo TerraTech Common Stock issued and outstanding immediately prior to the Effective Time (other than shares held in treasury by Thermo TerraTech and shares held by Thermo Electron) will, by virtue of the Merger, be converted into the right to receive 0.4 share of Thermo Electron Common Stock, subject to adjustment as set forth below. Except for the right to receive shares of Thermo Electron Common Stock, from and after the Effective Time, all shares of Thermo TerraTech Common Stock, by virtue of the Merger and without any action on the part of the holders, will no longer be outstanding and will be canceled and retired and will cease to exist. Each holder of a stock certificate formerly representing any shares of Thermo TerraTech Common Stock will after the Effective Time cease to have any rights with respect to such shares other than the right to receive shares of Thermo Electron Common Stock for their shares of Thermo TerraTech Common Stock upon surrender of the stock certificate.

In the Merger, Thermo TerraTech stockholders will receive 0.4 share of Thermo Electron Common Stock for each share of Thermo TerraTech Common Stock owned by them (the "Exchange Ratio") (rounded down to the nearest whole share), without interest, plus a check issued for any fractional share of Thermo Electron Common Stock. The Exchange Ratio may be adjusted, as follows:

- If the average of the closing prices as reported in the consolidated transaction reporting system of shares of the Thermo Electron Common Stock for each of the 20 consecutive trading days ending on the fifth trading day prior to the Effective Time (the "Pre-Closing Average Price") multiplied by the Exchange Ratio is less than $7.25, then the Exchange Ratio shall be adjusted to be equal to $7.25 divided by the Pre-Closing Average Price, provided that Thermo Electron may terminate the Merger Agreement if it would be required to issue more than 1,800,000 shares of Thermo Common Stock as a result of this adjustment.

- If the Pre-Closing Average Price multiplied by the Exchange Ratio is greater than $9.25, the Exchange Ratio will be adjusted to be equal to $9.25 divided by the Pre-Closing Average Price.

No interest will be paid or accrued on the consideration payable upon the surrender of any stock certificate. Payment of the Exchange Ratio to be made to a person other than the registered holder of the stock certificate surrendered is conditioned upon the stock certificate so surrendered being properly endorsed and otherwise in proper form for transfer, as determined by the Exchange Agent. Further, the person requesting such payment will be required to pay any transfer or other taxes required by reason of the payment to a person other than the registered holder of the stock certificate surrendered or establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable. Six months following the Effective Time, Thermo Electron may require the Exchange Agent to deliver to it any shares of Thermo Electron Common Stock and any cash in lieu of fractional shares (including any interest received with respect thereto) made available to the Exchange Agent which have not been disbursed to holders of stock certificates formerly representing shares outstanding prior to the Effective Time. Neither the Exchange Agent nor any party to the Merger Agreement will be liable to any holder of stock certificates formerly representing shares for any amount paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

At the Effective Time, subject to the terms, conditions and procedures set forth in the Merger Agreement, each share of common stock of the Merger Sub issued and outstanding immediately prior to the Effective Time held by Thermo Electron will, by virtue of the Merger, be converted at the Effective Time into one share of common stock of the Surviving Corporation. All shares held in treasury by Thermo TerraTech immediately prior to the Effective Time will, at the Effective Time, cease to be outstanding, be canceled and retired without payment of any consideration therefor and cease to exist.

EFFECT OF THE MERGER ON THERMO TERRATECH STOCK OPTIONS, WARRANTS AND DEBENTURES

Thermo TerraTech has, from time to time, issued options to acquire TerraTech Common Stock pursuant to its Incentive and Nonqualified Stock Option Plans, its Equity Incentive Plan, and its Directors Stock Option Plan, each as amended (the "TerraTech Stock Option Plans"). At the Effective Time, each outstanding Thermo TerraTech Stock Option under the TerraTech Stock Option Plans, whether or not exercisable, will be assumed by Thermo Electron. Each Thermo TerraTech Stock Option so assumed by Thermo Electron will continue to have, and be subject to, the same terms and conditions set forth in the applicable Thermo TerraTech Stock Option Plan immediately prior to the Effective Time, except that (i) each Thermo TerraTech Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Thermo Common Stock equal to the product of the number of shares of TerraTech Common Stock that were issuable upon exercise of such Thermo TerraTech Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio and
(ii) the per share exercise price for the shares of Thermo Common Stock issuable upon exercise of such assumed Thermo TerraTech Stock Option will be equal to the quotient determined by dividing the exercise price per share of TerraTech Common Stock at which such Thermo TerraTech Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.

In addition, at the Effective Time, all warrants to purchase TerraTech Common Stock then outstanding shall be converted at the Effective Time into warrants to purchase Thermo Common Stock. The number of whole shares of Thermo Common Stock for which each warrant will be exercisable (or will become exercisable in accordance with its terms) and the per share exercise price for the shares of Thermo Common Stock issuable upon exercise of such Thermo TerraTech warrant will be determined in accordance with the terms of such warrants.

Following the consummation of the Merger, Thermo TerraTech's 4 5/8% Debentures will be convertible into shares of Thermo Common Stock, rather than into the TerraTech Common Stock into which the debentures are now convertible. Such 4 5/8% Debentures are currently convertible into TerraTech Common Stock at a price of $15.90 per share. An aggregate of $111,850,000 principal amount of the 4 5/8% Debentures was outstanding as of October 2, 1999. Holders of the 4 5/8% Debentures will not have the right to cause Thermo TerraTech to redeem the debentures as a result of the Merger. Assuming an Exchange Ratio of .55, following the Merger the 4 5/8% Debentures will be convertible into Thermo Common Stock at a conversion price of $28.91 per share.

DEFERRED COMPENSATION PLAN FOR DIRECTORS

At the Effective Time, subject to obtaining the consents of the affected participants, the Thermo TerraTech deferred compensation plan for directors (the "Deferred Compensation Plan") will terminate, and Thermo TerraTech will distribute to each participant Thermo Common Stock or cash in an amount equal to the balance of stock units credited as of the Effective Time multiplied by the Exchange Ratio.

TRANSFER OF SHARES

Shares of TerraTech Common Stock will not be transferred on the stock transfer books at or after the Effective Time. If certificates representing such shares are presented to Thermo TerraTech after the Effective Time, together with an executed letter of transmittal, such shares will be canceled and exchanged for shares of Thermo Common Stock and cash in lieu of fractional shares.

CONDITIONS

Each party's obligation to effect the Merger is subject to the satisfaction of each of the following conditions at or prior to the Effective Time:

(i) the Merger Agreement shall have been adopted by the affirmative vote of the holders of a majority of the outstanding shares of TerraTech Common Stock entitled to vote thereon in accordance with the provisions of
Section 251 of the DGCL;

(ii) no governmental entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order that is in effect and that has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger;

(iii) the registration statement of which this Proxy Statement-Prospectus forms a part and the Warrant Registration Statement shall be effective and no order suspending the effectiveness of the registration statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the Commission;

(iv) the Thermo Common Stock issuable under the Merger Agreement and the shares of Thermo Common Stock subject to issuance pursuant to the TerraTech Stock Option Plans, the 4 5/8% Debentures and the warrants issued by TerraTech, each as assumed by Thermo Electron under the Merger Agreement, shall have been authorized for issuance on the New York Stock Exchange;

(v) Thermo TerraTech and Thermo Electron shall have received a tax opinion regarding certain tax matters relating to the transactions contemplated under the Merger Agreement, including that the Merger will be treated for federal income tax purposes as a tax-free reorganization within the meaning of Section 368(a) of the Code; and

(vi) no stock acquisition date or other event that would result in the occurrence of a distribution date shall have occurred with respect to the rights to purchase a unit consisting of one ten-thousandth of a share of Thermo Electron's Series B Junior Participating Preferred Stock, as defined in the Rights Agreement dated as of January 19, 1996, as amended, by and between Thermo Electron and BankBoston, N.A.

The obligations of Thermo TerraTech to effect the Merger are subject to the satisfaction of each of the following conditions at or prior to the Effective Time, unless waived in writing by Thermo TerraTech (upon the written consent of the Special Committee):

(i) the representations and warranties of the Merger Sub and Thermo Electron in the Merger Agreement shall be true and correct in all material respects on and as of the Effective Time, except as otherwise permitted by the Merger Agreement;

(ii) the Merger Sub and Thermo Electron shall have performed or complied in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by them at or prior to the Effective Time;

(iii) Thermo TerraTech shall have received a certificate of the President, Chief Executive Officer or Vice President of Thermo Electron certifying to the effect of above clauses (i) and (ii);

(iv) at the time of mailing of this Proxy Statement-Prospectus to the stockholders of Thermo TerraTech and at the Effective Time, Adams, Harkness & Hill shall have reaffirmed orally its fairness opinion and shall not have withdrawn such opinion; and

(v) any and all necessary state securities approvals for the issuance of Thermo Common Stock pursuant to the Merger Agreement shall have been obtained.

The obligations of the Merger Sub and Thermo Electron to effect the Merger are subject to the satisfaction of each of the following conditions at or prior to the Effective Time, unless waived in writing by Thermo Electron:

(i) the representations and warranties of Thermo TerraTech in the Merger Agreement shall be true and correct in all material respects on and as if made at the Effective Time, except as otherwise permitted by the Merger Agreement;

(ii) Thermo TerraTech shall have performed or complied in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by it on or prior to the Effective Time;

(iii) Thermo Electron shall have received a certificate of the President, Chief Executive Officer or Vice President of Thermo TerraTech certifying to the effect of above clauses (i) and (ii); and

(iv) the Special Committee shall not have withdrawn its recommendation to the Board of Directors that the Merger Agreement, including the Exchange Ratio, is fair to, and in the best interests of, the stockholders of Thermo TerraTech (other than Thermo Electron).

REPRESENTATIONS AND WARRANTIES

Thermo TerraTech has made representations and warranties in the Merger Agreement regarding, among other things, its organization and good standing, authority to enter into the Merger Agreement and consummate the transactions contemplated thereby, its capitalization, the accuracy of information supplied by Thermo TerraTech for inclusion in the Registration Statement of which this Proxy Statement-Prospectus forms a part, requisite governmental and other consents and approvals, and its receipt of a fairness opinion from Adams, Harkness & Hill.

Thermo Electron and the Merger Sub have made representations and warranties in the Merger Agreement regarding, among other things, their organization and good standing, authority to enter into the Merger Agreement and consummate the transactions contemplated thereby, Thermo Electron's capitalization, the accuracy of information supplied by Thermo Electron for inclusion in forms and reports required to be filed with the Commission and supplied to Adams, Harkness & Hill, the accuracy of the representations contained in the tax representation letters to be given in connection with the rendering of the tax opinion, and requisite governmental and other consents and approvals.

Except for the representation as to the accuracy of the tax representation letters, the representations and warranties of the parties in the Merger Agreement will expire upon consummation of the Merger. After such expiration, none of the parties to the Merger Agreement or their respective officers, directors or principals will have any liability for any such representations or warranties.

COVENANTS

In the Merger Agreement, Thermo TerraTech has agreed that during the period from the date of the Merger Agreement and continuing until the earlier of termination of the Merger Agreement or the Effective Time, Thermo TerraTech will carry on its business in the usual, regular and ordinary course, substantially consistent with past practice, will pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings.

In the Merger Agreement, Thermo Electron has agreed that during the period from the date of the Merger Agreement and continuing until the earlier of the termination of the Merger Agreement or the

Effective Time, Thermo Electron will, except for such actions which are contemplated by the Merger Agreement or certain other actions, carry on its business materially in the usual, regular and ordinary course, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, Thermo Electron agreed that it will not, and will not permit any of its material subsidiaries to, take any action which would make any of the representations and warranties of Thermo Electron contained in the Merger Agreement untrue or cause Thermo Electron not to be in compliance with any covenant in the Merger Agreement.

Thermo Electron has also agreed to give prompt notice to Thermo TerraTech of any written offers or indications of interest that it receives from a prospective purchaser of any material properties or assets of Thermo TerraTech or its subsidiaries, which set forth a proposed purchase price greater than $3 million, or in which the book value of the assets being sold is greater than $3 million, other than sales of assets in the ordinary course of business. In addition, Thermo Electron has agreed that, until the Effective Time of the Merger, neither Thermo Electron nor Merger Sub will take, or permit any of Thermo Electron's direct or indirect subsidiaries to take, any action that would cause the Merger not to be a tax-free reorganization under Section 368(a) of the Code.

INDEMNIFICATION AND INSURANCE

The Surviving Corporation shall, and Thermo Electron will cause the Surviving Corporation to, fulfill and honor in all respects the indemnification obligations of Thermo TerraTech, pursuant to Thermo TerraTech's Certificate of Incorporation and Bylaws, each as in effect on the date of the Merger Agreement. The Merger Agreement provides that the Surviving Corporation's Certificate of Incorporation and Bylaws will contain the provisions with respect to indemnification and elimination of liability for monetary damages currently set forth in Thermo TerraTech's Certificate of Incorporation and Bylaws, and such provisions will not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would adversely affect the rights of those individuals who, as of the date of the Merger Agreement and at any time from the date of the Merger Agreement until the Effective Time, were directors or officers of Thermo TerraTech, unless such modification is required by law.

In addition, Thermo Electron will cause the Surviving Corporation, either directly or through participation in Thermo Electron's umbrella policy, to maintain in effect, for a period of six years after the Effective Time, a directors' and officers' liability insurance policy covering the Thermo TerraTech directors and officers who, on the date of the Merger Agreement, were then covered by Thermo Electron's liability insurance policy, with coverage no less favorable in amount and scope than such directors' and officers' existing coverage. However, in no event will the Surviving Corporation be required to pay premiums for such insurance in excess of 175% of the current annual premiums, as adjusted for inflation each year, allocable to and paid by Thermo TerraTech.

The Merger Agreement also provides that Thermo TerraTech will, regardless of whether the Merger becomes effective, indemnify Mr. Vintiadis against any costs and expenses paid in connection with any claim or action arising out of or pertaining to any action or omission in Mr. Vintiadis' capacity as a director or fiduciary of Thermo TerraTech (including as a member of the Special Committee or in connection with the transactions contemplated by the Merger Agreement) that occurs on, before or after the Effective Time, until the expiration of the statute of limitations relating to such action or omission. Thermo TerraTech shall pay Mr. Vintiadis' expenses in advance of the final disposition of the action upon receipt of an undertaking by Mr. Vintiadis to repay those expenses if it is later decided that he is not entitled to such payment. If the Merger becomes effective, Thermo Electron will be jointly and severally responsible for the indemnification and expenses advancement obligations as described above. If the Merger does not become effective, Thermo Electron shall only be responsible for indemnifying or advancing expenses for

matters that arise out of or pertain to the work of the Special Committee, the Merger Agreement or the transactions contemplated by the Merger Agreement.

In addition, Thermo Electron has entered into separate indemnification agreements with each of the members of the Board of Directors, including the member of the Special Committee, providing for indemnification of and advancement of expenses to such directors directly by Thermo Electron in the event that a director, by reason of his or her status as a director or officer of Thermo TerraTech (or service as a director, officer or fiduciary of another enterprise at the request of Thermo Electron), is made or threatened to be made a party to any threatened, pending, or completed action, suit or other proceeding, whether civil, criminal, administrative or investigative, if the director acted in good faith and in a manner the director reasonably believed to be in or not opposed to the best interests of Thermo Electron, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In the case of any threatened, pending or completed action, suit or proceeding by or in the right of Thermo Electron, indemnification shall be made to the maximum extent permitted under Delaware law.

TERMINATION, AMENDMENT AND WAIVER

At any time prior to the Effective Time, whether before or after adoption of the Merger Agreement by the stockholders of Thermo TerraTech, the Merger Agreement may be terminated by the mutual written consent of the board of directors of the Merger Sub and the Board of Directors of Thermo TerraTech (upon approval of the Special Committee).

In addition, either the Merger Sub or Thermo TerraTech (upon approval of the Special Committee), in accordance with the provisions of the Merger Agreement, may terminate the Merger Agreement prior to the Effective Time, whether before or after adoption of the Merger Agreement by the stockholders of Thermo TerraTech, if (i) the Merger has not been consummated by March 31, 2000 (in which case the right of Thermo TerraTech to terminate shall be exercised as directed by the Special Committee), unless such party's action or inaction constitutes a breach of the Merger Agreement and has been a principal cause of or resulted in the failure of the Merger to be consummated, (ii) a court of competent jurisdiction or governmental, regulatory or administrative agency or commission issues an order, decree or ruling or takes any other action enjoining, restraining or otherwise prohibiting the Merger and such order, decree, ruling or action is final and nonappealable or (iii) the approval of the stockholders of Thermo TerraTech necessary to consummate the Merger has not been obtained, unless such party's action or inaction constitutes a breach of the Merger Agreement and has been the principal cause of or resulted in the failure to obtain the requisite stockholder approval to consummate the Merger. Thermo Electron has agreed to vote, or cause to be voted, all of the Common Stock owned by it and any of its subsidiaries in favor of the Merger.

In addition, the Merger Sub may terminate the Merger Agreement prior to the Effective Time, whether before or after adoption of the Merger Agreement by the stockholders of Thermo TerraTech, if Thermo TerraTech breaches any representation, warranty, covenant or agreement in any material respect and fails to cure such breach within 10 business days after written notice of such breach from the Merger Sub.

Thermo TerraTech may terminate the Merger Agreement prior to the Effective Time, whether before or after adoption of the Merger Agreement by the stockholders of Thermo TerraTech, if (i) the Special Committee determines after consultation with outside legal counsel that failure to do so would be inconsistent with the Board's or the Special Committee's fiduciary duties under applicable law (which determination would result in the withdrawal or modification of the Special Committee's recommendation and, at the Special Committee's election, the termination of the Merger Agreement) or (ii) Thermo Electron or Merger Sub breaches any representation, warranty, covenant or agreement in any material respect and fails to cure such breach within 10 business days after written notice of such breach from Thermo TerraTech.

Subject to the provisions of applicable law, the Merger Agreement may be amended by the parties thereto at any time by written agreement of the parties; provided, however, that Thermo TerraTech may not amend the Merger Agreement without the approval of the Special Committee.

There is no termination fee payable by either party in the event that the Merger Agreement is terminated.

COST OR FEE                                                   ESTIMATED AMOUNT
-----------                                                   ----------------
Financial advisory fees.....................................      $137,500
Listing fees................................................        14,750
Legal fees..................................................       100,000
Accounting fees.............................................        15,000
Special Committee fees......................................        40,000
Printing and mailing fees...................................       100,000
Commission filing fees......................................         3,316
Other regulatory filing fees................................         5,000
Miscellaneous...............................................        34,434
                                                                  --------
                                                                  $450,000
                                                                  ========

See "--Opinion of Adams, Harkness & Hill" for a description of the fees to be paid to Adams, Harkness & Hill in connection with its engagement. For a description of certain fees payable to the member of the Special Committee, see "--Conflicts of Interest."

ACCOUNTING TREATMENT

The Merger will be accounted for as the acquisition of a minority interest by Thermo Electron, using the purchase method of accounting.

REGULATORY APPROVALS

No federal or state regulatory approvals are required to be obtained that have not already been obtained, nor any regulatory requirements complied with, in connection with the consummation of the Merger by any party to the Merger Agreement, except for (i) the requirements of the Delaware General Corporation Law in connection with stockholder approvals and consummation of the Merger and
(ii) the requirements of the federal securities laws.

RESTRICTIONS ON SALES OF SHARES BY AFFILIATES OF THERMO TERRATECH AND THERMO ELECTRON

The shares of Thermo Common Stock to be issued in connection with the Merger will be registered under the Securities Act of 1933, as amended, and will be freely transferable under the Securities Act, except for shares of Thermo Common Stock issued to any person who is deemed to be an "affiliate" of either of Thermo TerraTech or Thermo Electron at the time of the special meeting. Persons who may be deemed to be affiliates include individuals or entities that control, are controlled by, or are under the common control of either Thermo TerraTech or Thermo Electron and may include some of the officers and directors of Thermo Electron or Thermo TerraTech, as well as the principal stockholders of each

company. Affiliates may not sell their shares of Thermo Common Stock acquired in connection with the Merger except pursuant to:

- an effective registration statement under the Securities Act covering the resale of those shares;

- an exemption under paragraph (d) of Rule 145 under the Securities Act; or

- any other applicable exemption under the Securities Act.

Thermo Electron's registration statement on Form S-4, of which this Proxy Statement-Prospectus forms a part, does not cover the resale of shares of Thermo Common Stock to be received by affiliates in the Merger.

LISTING ON THE NEW YORK STOCK EXCHANGE OF THERMO COMMON STOCK TO BE ISSUED IN THE MERGER

Thermo Electron will use its best efforts to cause the shares of its common stock to be issued in connection with the Merger to be approved for listing on the New York Stock Exchange, subject to official notice of issuance, before the completion of the Merger.

DISSENTERS' AND APPRAISAL RIGHTS

Under Delaware law, shareholders of Thermo TerraTech are not entitled to exercise dissenters' or appraisal rights as a result of the Merger or to demand payment for shares of TerraTech Common Stock.

COMPARATIVE PER SHARE MARKET PRICE DATA

The Thermo Common Stock is traded on the New York Stock Exchange under the symbol "TMO." The TerraTech Common Stock is traded on the American Stock Exchange under the symbol "TTT."

The following table sets forth the closing prices per share of the TerraTech Common Stock as reported in the consolidated transaction reporting system and the closing prices per share of Thermo Common Stock as reported in the consolidated transaction reporting system on (1) May 4, 1999, the last trading day before the public announcement of Thermo Electron's proposal (with no price having been determined) to take Thermo TerraTech private (in the case of the TerraTech Common Stock, closing price information is given as of April 30, 1999, which was the last day on which the TerraTech Common Stock traded prior to the May 5 announcement) and (2) October 19, 1999, the last trading day before the public announcement that Thermo Electron and Thermo TerraTech had entered into the Merger Agreement.

                                                              APRIL 30, 1999/
STOCK/DATE                                                      MAY 4, 1999     OCTOBER 19, 1999
----------                                                    ---------------   ----------------
Thermo TerraTech............................................      $4.1875           $ 5.375
Thermo Electron.............................................     16.25               13.0625
Equivalent Per Share Price..................................      7.25                7.25

THE SPECIAL MEETING

PROXY SOLICITATION

This Proxy Statement-Prospectus is being delivered to you in connection with the solicitation by the Board of proxies to be voted at the Special Meeting to be held on , 2000 at 10:00 a.m., local time, at the offices of Thermo Electron Corporation, 81 Wyman Street, Waltham, Massachusetts 02454. Thermo TerraTech will pay all expenses incurred in connection with solicitation of the Proxy Statement-Prospectus. Officers, directors and regular employees of Thermo TerraTech, who will receive no additional compensation for their services, may solicit proxies by telephone or personal call. Thermo TerraTech has requested brokers and nominees who hold stock in their names to furnish the Proxy Statement-Prospectus to their customers. Thermo TerraTech will reimburse such brokers and nominees for their related out-of-pocket expenses. This Proxy Statement-Prospectus and the accompanying Proxy Card are first being mailed on or about , 1999.

RECORD DATE AND QUORUM REQUIREMENT

The close of business on , 1999 is the Record Date for the determination of stockholders entitled to notice of, and to vote at, the Special Meeting. Each holder of record of TerraTech Common Stock at the close of business on the Record Date is entitled to one vote for each share then held on each matter voted on by stockholders. At the close of business on the Record Date, there were shares of TerraTech Common Stock issued and outstanding held by holders of record and by approximately persons or entities holding in nominee name.

The holders of a majority of the outstanding shares entitled to vote at the Special Meeting must be present in person or represented by proxy to constitute a quorum for the transaction of business. Abstentions are counted for purposes of determining whether a quorum exists for the transaction of business. If you hold your shares of TerraTech Common Stock through a broker, bank or other nominee, generally the nominee may only vote the TerraTech Common Stock that it holds for you in accordance with your instructions. However, if it has not timely received your instructions, the nominee may vote on certain matters for which it has discretionary voting authority. Brokers generally will not have discretionary voting authority with respect to the proposal to adopt the Merger Agreement. If a nominee cannot vote on a particular matter because it does not have discretionary voting authority, this is a "broker non-vote" on that matter. Broker non-votes are also counted as shares present or represented at the Special Meeting for purposes of determining whether a quorum exists.

VOTING PROCEDURES

Under Delaware law, holders of a majority of the outstanding shares of TerraTech Common Stock entitled to vote at the Special Meeting must vote to adopt the Merger Agreement. The Merger Agreement is attached to this Proxy Statement-Prospectus as Appendix A. For the purposes of the vote required under Delaware law, a failure to vote, a vote to abstain and a broker non-vote will each have the same legal effect as a vote cast against adoption of the Merger Agreement. Thermo Electron, which owns approximately 87% of the outstanding TerraTech Common Stock, owns enough shares of TerraTech Common Stock to vote to adopt the Merger Agreement under Delaware law without the vote of the Public Stockholders and has agreed to vote its shares in favor of the Merger Agreement. In addition, the Company's directors and executive officers have expressed their intention to vote to adopt the Merger Agreement.

If a properly executed Proxy Card is submitted and no instructions are given, the shares of TerraTech Common Stock represented by that Proxy Card will be voted "FOR" adoption of the proposed Merger Agreement.

The Board is not aware of any other matters to be voted on at the Special Meeting. If any other matters properly come before the Special Meeting, including a motion to adjourn the Special Meeting for

the purpose of soliciting additional proxies, the persons named on the accompanying Proxy Card will vote the shares represented by all properly executed proxies on such matters in their discretion, except that shares represented by proxies that have been voted "AGAINST" adoption of the Merger Agreement will not be used to vote "FOR" adjournment of the Special Meeting for the purpose of allowing additional time for soliciting additional votes "FOR" the Merger Agreement.

VOTING AND REVOCATION OF PROXIES

A stockholder giving a proxy has the power to revoke it at any time before it is exercised by (i) filing with the Secretary of Thermo TerraTech an instrument revoking it, (ii) submitting a duly executed proxy bearing a later date or (iii) voting in person at the Special Meeting. Subject to such revocation, all shares represented by each properly executed proxy received by the Secretary of Thermo TerraTech will be voted in accordance with the instructions indicated thereon, and if no instructions are indicated, will be voted to adopt the Merger Agreement. The shares represented by the accompanying Proxy Card and entitled to vote will be voted if the Proxy Card is properly signed and received by the Secretary of Thermo TerraTech prior to the Special Meeting.

EFFECTIVE TIME

The Merger will be effective as soon as practicable following stockholder adoption of the Merger Agreement at the Special Meeting and satisfaction or waiver of the terms and conditions set forth in the Merger Agreement, and upon the filing of a Certificate of Merger with the Secretary of State of the State of Delaware. See "THE MERGER--Conditions."

THE MERGER

1.1. THE MERGER. At the Effective Time (as defined in Section 1.2) and subject to and upon the terms and conditions of this Agreement and the applicable provisions of the DGCL, Merger Sub shall be merged with and into TerraTech, the separate corporate existence of Merger Sub shall cease and TerraTech shall continue as the surviving corporation. TerraTech as the surviving corporation after the Merger is hereinafter sometimes referred to as the "Surviving Corporation."

1.2. EFFECTIVE TIME; CLOSING. Subject to the provisions of this Agreement, the Surviving Corporation shall cause the Merger to be consummated by filing a Certificate of Merger (the "Certificate of Merger") with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL (the time of such filing, or such later time as may be agreed in writing by the parties and specified in the Certificate of Merger, being the "Effective Time" and the date on which the Effective Time occurs being the "Effective Date") as soon as practicable on the Closing Date (as herein defined). Unless the context otherwise requires, the term "Agreement" as used herein refers collectively to this Agreement and the Certificate of Merger. The closing of the Merger (the "Closing") shall take place at the executive offices of Thermo Electron at a time and date to be specified by the parties, which shall be no later than the second business day after the satisfaction or waiver of the conditions set forth in Article VI, or at such other time, date and location as the parties hereto agree in writing (the "Closing Date"). At the Closing, (i) TerraTech shall deliver to Thermo Electron the various certificates and instruments required under Article VI, (ii) Thermo Electron and Merger Sub shall deliver to TerraTech the various certificates and instruments required under Article VI and
(iii) TerraTech shall execute and file the Certificate of Merger with the Secretary of State of the State of Delaware, in accordance with the applicable provisions of the DGCL.

1.3. EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of TerraTech and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of TerraTech and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

1.4. CERTIFICATE OF INCORPORATION; BYLAWS.

(a) Subject to the requirements of Section 5.11 hereof, at the Effective Time, the Certificate of Incorporation of Merger Sub, as in effect immediately prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended as provided by law and such Certificate of Incorporation.

(b) Subject to the requirements of Section 5.11 hereof, the Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving Corporation until thereafter amended.

1.5. DIRECTORS AND OFFICERS. The directors of TerraTech immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, to serve until their respective successors are duly elected or appointed and qualified. The officers of TerraTech immediately prior to the Effective Time shall be the officers of the Surviving Corporation, to serve until their successors are duly elected or appointed or qualified.

1.6. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub, TerraTech or the holders of any of the following securities:

(a) EXCHANGE OF TERRATECH COMMON STOCK. Subject to the balance of this
Section 1.6, each share of TerraTech Common Stock issued and outstanding immediately prior to the Effective Time will be automatically converted into the right to receive 0.4 share (subject to adjustment pursuant to Section 1.6(g)

hereof, the "Exchange Ratio") of the common stock, $1.00 par value, of Thermo Electron (the "Thermo Common Stock"). As of the Effective Time, all such shares of TerraTech Common Stock shall no longer be outstanding and shall be automatically canceled and retired and shall cease to exist, and each holder of a certificate representing any such shares of TerraTech Common Stock shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration (as defined in Section 1.7(b)) upon surrender of the certificate representing such share of TerraTech Common Stock in the manner provided in
Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit (and bond, if required) in the manner provided in
Section 1.9).

(b) STOCK OPTIONS AND EMPLOYEE STOCK PURCHASE PLAN. All options to purchase TerraTech Common Stock outstanding immediately prior to the Effective Time under stock option plans maintained by TerraTech (including those plans adopted when TerraTech was known as Thermo Process Systems Inc.), consisting of the Thermo Process Systems Inc. Incentive Stock Option Plan, the Thermo Process Systems Inc. Nonqualified Stock Option Plan, the Thermo Process Systems Inc. Equity Incentive Plan and the Thermo Process Systems Inc. Directors Stock Option Plan, each as amended (together, the "TerraTech Stock Option Plans"), shall be converted into options to purchase Thermo Common Stock in accordance with
Section 5.8 hereof. All options to purchase shares of TerraTech Common Stock under the Amended and Restated Thermo TerraTech Employees' Stock Purchase Plan (the "TerraTech ESPP") shall be converted into options to purchase Thermo Common Stock in accordance with Section 5.8 hereof.

(c) WARRANTS. All warrants to purchase TerraTech Common Stock outstanding immediately prior to the Effective Time shall be converted at the Effective Time into warrants to purchase Thermo Common Stock. The number of whole shares of Thermo Common Stock for which each warrant will be exercisable (or will become exercisable in accordance with its terms) and the per share exercise price for the shares of Thermo Common Stock issuable upon exercise of such TerraTech warrant will be determined in accordance with the terms of such warrants.

(d) CONVERTIBLE DEBENTURES. All TerraTech convertible debentures (the "Convertible Debentures") issued pursuant to the Fiscal Agency Agreement dated as of May 2, 1996 by and among TerraTech, Thermo Electron and Chase Manhattan Bank (formerly Chemical Bank) as Fiscal Agent (the "Fiscal Agency Agreement"), outstanding at the Effective Time shall remain the Convertible Debentures of TerraTech, provided however, that in lieu of TerraTech Common Stock being issuable upon conversion of such Convertible Debentures, after the Effective Time, Thermo Common Stock shall be issuable upon conversion of such Convertible Debentures in accordance with the terms of the Fiscal Agency Agreement. At the Effective Time, the price at which the TerraTech Convertible Debentures then outstanding will be convertible into Thermo Common Stock shall be adjusted in accordance with the terms of the Fiscal Agency Agreement.

(e) CAPITAL STOCK OF MERGER SUB. Each share of common stock, par value $.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and non-assessable share of common stock, par value $.01 per share, of the Surviving Corporation.

(f) TREASURY STOCK; STOCK HELD BY THERMO ELECTRON. Notwithstanding any other provision of this Agreement, each share of TerraTech Common Stock issued and outstanding and owned by Thermo Electron or any wholly owned subsidiary of Thermo Electron, together with all treasury shares held by TerraTech immediately prior to the Effective Time shall cease to be outstanding, and shall automatically be cancelled and retired without payment of any consideration therefor, cash or otherwise, and cease to exist.

(g) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be adjusted to reflect fully the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into, or exercisable or exchangeable for, TerraTech Common Stock or Thermo Common Stock, as the case may be), recapitalization or other like change without receipt of consideration with respect to

either the TerraTech Common Stock or the Thermo Common Stock occurring on or after the date hereof and prior to the Effective Time. The Exchange Ratio shall also be subject to adjustment as follows:

(i) In the event the average of the closing prices per share of Thermo Common Stock as reported in the consolidated transaction reporting system for each of the 20 consecutive trading days ending on the fifth trading day prior to the Effective Time (the "Pre-Closing Average Price") multiplied by the Exchange Ratio is less than $7.25, then the Exchange Ratio shall be adjusted to be equal to $7.25 divided by the Pre-Closing Average Price, subject to the provisions of Section 7.1(h).

(ii) In the event the Pre-Closing Average Price multiplied by the Exchange Ratio is greater than $9.25, then the Exchange Ratio shall be adjusted to be equal to $9.25 divided by the Pre-Closing Average Price.

1.7. SURRENDER OF CERTIFICATES.

(a) EXCHANGE AGENT. Prior to the Effective Time, Thermo Electron shall authorize Boston EquiServe to act as the exchange agent (the "Exchange Agent") in the Merger. Immediately following the Effective Time, Thermo Electron shall deposit with the Exchange Agent, for the benefit of the holders of shares of TerraTech Common Stock, for exchange in accordance with the provisions of this Article I, certificates representing the shares of Thermo Common Stock issuable pursuant to this Agreement in exchange for outstanding shares of TerraTech Common Stock. The Thermo Common Stock into which TerraTech Common Stock shall be converted pursuant to the Merger shall be deemed to have been issued at the Effective Time.

(b) EXCHANGE PROCEDURES. As soon as practicable after, and in no event more than three business days after, the Effective Time, Thermo Electron shall cause the Exchange Agent to mail to each holder of record (as of the Effective Time) of a certificate (a "Certificate" or the "Certificates") representing TerraTech Common Stock (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall otherwise be in such form and have such other provisions as Thermo Electron may reasonably specify and as are reasonably acceptable to TerraTech, with the approval of the Special Committee) and (ii) instructions for effecting the exchange of the Certificates for certificates representing shares of Thermo Common Stock, as provided herein. Upon surrender of a Certificate for cancellation to the Exchange Agent, together with such letter of transmittal duly completed and validly executed in accordance with the instructions thereto, the holder of such Certificate shall be entitled to receive in exchange therefor (x) a certificate representing shares of Thermo Common Stock equal to the Exchange Ratio multiplied by the number of shares of TerraTech Common Stock represented by such Certificate (rounded down to the nearest whole share), (y) any dividends or other distributions to which such holder is entitled pursuant to Section 1.10 and (z) a check issued pursuant to Section 1.11 hereof for any fractional share of Thermo Common Stock (the consideration specified in clauses (x), (y) and
(z) being collectively referred to herein as the "Merger Consideration"), and the Certificate so surrendered shall forthwith be cancelled. In the event of a transfer of ownership of shares of TerraTech Common Stock which is not registered in the transfer records of TerraTech as of the Effective Time, the Merger Consideration may be paid in accordance with this Article I to a transferee if the Certificate evidencing such shares is presented to the Exchange Agent, accompanied by all documents required by law to evidence and effect such transfer pursuant to this Section. Until so surrendered, each outstanding Certificate will be deemed from and after the Effective Time, for all corporate purposes, to evidence only the right to receive shares of Thermo Common Stock equal to the Exchange Ratio for each share of TerraTech Common Stock represented on such Certificate, and the other Merger Consideration.

(c) TRANSFERS OF OWNERSHIP. If payment of the Exchange Ratio is to be made to any person other than the person in whose name the Certificate surrendered in exchange therefor is registered, it will be a condition of such payment that the Certificate so surrendered will be properly endorsed and otherwise in proper form for transfer and that the person requesting such payment will have paid to Thermo Electron

or any agent designated by it any transfer or other taxes required by reason of payment to a person other than the registered holder of the Certificate surrendered, or established to the satisfaction of Thermo Electron or any agent designated by it that such tax has been paid or is not payable.

(d) NO LIABILITY. Notwithstanding anything to the contrary in this
Section 1.7, neither the Exchange Agent, Thermo Electron, the Surviving Corporation nor any party hereto shall be liable to a holder of shares of TerraTech Common Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

(e) RESPONSIBILITY; TERM. During the term of its engagement, the Exchange Agent shall be responsible for delivering certificates representing Thermo Common Stock and the other Merger Consideration to the holders of properly endorsed Certificates that are returned to the Exchange Agent. Promptly following the date that is six months after the Effective Date, the Exchange Agent shall, upon request by Thermo Electron, deliver to Thermo Electron all cash, Certificates, certificates representing shares of Thermo Common Stock and other documents in its possession relating to the transactions described in this Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each holder of a Certificate formerly representing shares of TerraTech Common Stock may surrender such Certificate to Thermo Electron and (subject to applicable abandoned property, escheat and similar laws) receive in exchange therefor the Merger Consideration represented by such Certificate, without any interest thereon.

1.8. NO FURTHER OWNERSHIP RIGHTS IN TERRATECH COMMON STOCK. The Thermo Common Stock and cash, if any, delivered to the holders of TerraTech Common Stock upon the surrender of shares of TerraTech Common Stock in accordance with the terms hereof shall be deemed to have been delivered in full satisfaction of all rights pertaining to such shares of TerraTech Common Stock.

1.9. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall deliver the certificates representing Thermo Common Stock and the other Merger Consideration in respect of such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof; provided, however, that, as a condition precedent to the payment thereof, the owner of such lost, stolen or destroyed Certificates shall deliver a bond in such sum as Thermo Electron or the Exchange Agent may reasonably direct as indemnity against any claim that may be made against Thermo Electron or the Exchange Agent with respect to the Certificates alleged to have been lost, stolen or destroyed, unless Thermo Electron waives such requirement in writing.

1.10. DIVIDENDS. No dividends or other distributions that are payable to the holders of record of Thermo Common Stock as of a date on or after the Effective Time shall be paid to the holders of TerraTech Common Stock entitled by reason of the Merger to receive Thermo Common Stock until such holders surrender their Certificates in accordance with Section 1.7(b) or provide an affidavit and indemnity in accordance with Section 1.9. Upon such surrender, the Exchange Agent or Thermo Electron (in the event that the Exchange Agent's term has expired), shall pay or deliver to the persons in whose name the certificates representing such Thermo Common Stock are issued any dividends or other distributions that are payable to the holders of record of Thermo Common Stock as of a date on or after the Effective Time and which were paid or delivered between the Effective Time and the time of such surrender; provided that no such person shall be entitled to receive any interest on such dividends or other distributions.

1.11. FRACTIONAL SHARES. No certificates or scrip representing fractional shares of Thermo Common Stock shall be issued to holders of TerraTech Common Stock upon the surrender for exchange of Certificates, and such holders of TerraTech Common Stock shall not be entitled to any voting rights, rights to receive any dividends or distributions or other rights as a stockholder of Thermo Electron with respect to any fractional shares of Thermo Common Stock that would otherwise be issued to such holders of TerraTech Common Stock. In lieu of any fractional shares of Thermo Common Stock that would otherwise be issued, each holder of TerraTech Common Stock that would have been entitled to receive a fractional share of Thermo Common Stock shall, upon proper surrender of such person's Certificates, receive a cash payment (rounded to the nearest cent) equal to the closing price per share of Thermo Common Stock as

reported in the consolidated transaction reporting system on the trading day immediately preceding the Closing Date, multiplied by the fraction of a share that such holder of TerraTech Common Stock would otherwise be entitled to receive.

1.12. CLOSING OF TRANSFER BOOKS. At the Effective Time, the stock transfer books of TerraTech shall be closed and no transfer of TerraTech Common Stock shall thereafter be made. If, after the Effective Time, Certificates are presented to Thermo Electron, they shall be canceled and exchanged for the Merger Consideration in accordance with Article I.

1.13. TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of TerraTech and Merger Sub, the officers and directors of the Surviving Corporation are fully authorized in the name of TerraTech and Merger Sub or otherwise to take, and will take, all such lawful and necessary action, so long as such action is consistent with this Agreement.

1.14 TAX TREATMENT. The Merger is intended to constitute a tax-free reorganization under Section 368(a) of the Code. The parties hereby adopt this Agreement as a "plan of reorganization" within the meaning of Section 368(a) of the Code and the regulations thereunder.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TERRATECH

TerraTech represents and warrants to Thermo Electron and Merger Sub as follows:

2.1. ORGANIZATION OF TERRATECH. TerraTech and each of its subsidiaries is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, has the corporate or similar power to own, lease and operate its property and to carry on its business as now being conducted and as proposed by TerraTech to be conducted, and is duly qualified to do business and in good standing as a foreign corporation or other legal entity in each jurisdiction in which the failure to be so qualified would have a Material Adverse Effect on TerraTech. In this Agreement, the term "Material Adverse Effect" used in reference to TerraTech means any event, change or effect, that is or is reasonably likely to be, individually or in the aggregate with other events, changes or effects, materially adverse to the financial condition, assets, liabilities, results of operations or business of TerraTech and its subsidiaries, taken as a whole.

2.2. TERRATECH CAPITAL STRUCTURE. The authorized capital stock of TerraTech consists of 75,000,000 shares of Common Stock, par value $.10 per share, of which there were 19,072,133 shares issued and outstanding as of October 2, 1999, and 511,640 shares in treasury as of October 2, 1999. All outstanding shares of TerraTech Common Stock are duly authorized, validly issued, fully paid and non-assessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of TerraTech or any agreement or document to which TerraTech is a party or by which it is bound. As of October 2, 1999, an aggregate of 2,038,550 shares of TerraTech Common Stock, net of exercises, were reserved for issuance to employees, consultants and non-employee directors pursuant to the TerraTech Stock Option Plans, under which options were outstanding for an aggregate of 1,628,725 shares as of such date. As of October 2, 1999, an aggregate of 700,500 shares of TerraTech Common Stock were reserved for issuance upon the exercise of warrants and an aggregate of 7,034,592 shares of TerraTech Common Stock were reserved for issuance upon the conversion of the Convertible Debentures. All shares of TerraTech Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and non-assessable.

2.3. AUTHORITY.

(a) TerraTech has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of TerraTech, subject only to the adoption of this Agreement by TerraTech's stockholders and the filing and recording of the Certificate of Merger pursuant to the DGCL. Under the DGCL, TerraTech's stockholders may adopt this Agreement by vote of the holders of a majority of the outstanding shares of TerraTech Common Stock. This Agreement has been duly executed and delivered by TerraTech, and assuming the due authorization, execution and delivery by Thermo Electron and Merger Sub, constitutes the valid and binding obligation of TerraTech, enforceable in accordance with its terms. The execution and delivery of this Agreement by TerraTech do not, and the performance of this Agreement by TerraTech will not, (i) conflict with or violate the Certificate of Incorporation or Bylaws of TerraTech or (ii) subject to obtaining the adoption by TerraTech's stockholders of this Agreement as contemplated in Section 5.2 and compliance with the requirements set forth in
Section 2.3(b) below, conflict with or violate any law, rule, regulation, order, judgment or decree applicable to TerraTech or any of its material subsidiaries or by which its or their respective properties is bound, except, with respect to clause (ii), for any such conflicts, violations, defaults or other occurrences that would not have a Material Adverse Effect on TerraTech or the Surviving Corporation.

(b) No consent, approval, order or authorization of, or registration, declaration or filing with any court, administrative agency or commission or other governmental or regulatory body or authority or instrumentality ("Governmental Entity") is required by or with respect to TerraTech in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for (i) the filing of the Certificate of Merger with the Secretary of State of Delaware, (ii) the filing by TerraTech and Thermo Electron of the Proxy Statement and the Registration Statement (as defined in Section 5.1), respectively, with the U.S. Securities and Exchange Commission ("SEC") in accordance with the Securities Act of 1933, as amended (the "Securities Act") and the Securities Exchange Act of 1934, as amended (the "Exchange Act") and (iii) such other consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable federal and state securities laws.

2.4. BOARD APPROVAL. The Board of Directors of TerraTech, upon recommendation of the Special Committee that this Agreement, including the Exchange Ratio, is fair to, and in the best interests of, the stockholders of TerraTech (other than Thermo Electron), has, as of the date of this Agreement, unanimously (i) adopted a resolution approving this Agreement and declaring its advisability, (ii) determined that the Merger is fair to, and in the best interests of, TerraTech and its stockholders, and (iii) determined to recommend that the stockholders of TerraTech approve this Agreement.

2.5. FAIRNESS OPINION. The Special Committee has received an opinion from AH&H dated October 19, 1999 that, as of such date, the consideration to be received by TerraTech's stockholders in the Merger is fair, from a financial point of view, to TerraTech's stockholders other than Thermo Electron.

2.6 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The information supplied by TerraTech for inclusion in the Registration Statement (including any information incorporated by reference in the Registration Statement from other filings made by TerraTech with the SEC) shall not, at the time the Registration Statement becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements included therein not misleading. Other than with respect to the information supplied by Thermo Electron and/or Merger Sub, the Proxy Statement shall not, on the date the Proxy Statement is first mailed to stockholders, at the time of the TerraTech Stockholders' Meeting (as defined in
Section 5.1(b)) or at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading. The Proxy Statement will comply (other than with respect to

information relating to Thermo Electron and/or Merger Sub) as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND MERGER SUB

Thermo Electron and Merger Sub, jointly and severally, represent and warrant to TerraTech as follows:

3.1. ORGANIZATION. Thermo Electron is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, each has the corporate power to own, lease and operate its property and to carry on its business as now being conducted and as proposed to be conducted, and is duly qualified to do business and in good standing as a foreign corporation in each jurisdiction in which the failure to be so qualified would have a Material Adverse Effect on Thermo Electron. In this Agreement, the term "Material Adverse Effect" used in reference to Thermo Electron means any event, change or effect, that is or is reasonably likely to be, individually or in the aggregate with other events, changes or effects, materially adverse to the financial condition, assets, liabilities, results of operations or business of Thermo Electron and its subsidiaries, taken as a whole.

3.2. AUTHORITY.

(a) Each of Thermo Electron and Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Thermo Electron and Merger Sub, subject only to the filing and recording of the Certificate of Merger pursuant to the DGCL. This Agreement has been duly executed and delivered by each of Thermo Electron and Merger Sub and, assuming the due authorization, execution and delivery of this Agreement by TerraTech, this Agreement constitutes the valid and binding obligation of each of Thermo Electron and Merger Sub, enforceable in accordance with its terms. The execution and delivery of this Agreement by each of Thermo Electron and Merger Sub do not, and the performance of this Agreement by each of Thermo Electron and Merger Sub will not,
(i) conflict with or violate the Certificate of Incorporation or Bylaws of Thermo Electron or the Certificate of Incorporation or Bylaws of Merger Sub or of any material subsidiary, direct or indirect, of Thermo Electron (each, a "Material Thermo Subsidiary"), (ii) subject to compliance with the requirements set forth in Section 3.2(b) below, conflict with or violate any law, rule, regulation, order, judgment or decree applicable to Thermo Electron or any Material Thermo Subsidiaries (including Merger Sub, but excluding TerraTech and its wholly owned subsidiaries) or by which its or any of their respective properties is bound or affected, or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or impair Thermo Electron's rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of Thermo Electron or any Material Thermo Subsidiaries (including Merger Sub, but excluding TerraTech and its wholly owned subsidiaries) pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Thermo Electron or any Material Thermo Subsidiaries (including Merger Sub, but excluding TerraTech and its wholly owned subsidiaries) is a party or by which Thermo Electron or any Material Thermo Subsidiaries (including Merger Sub, but excluding TerraTech and its wholly owned subsidiaries) or its or any of their respective properties are bound or affected, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, defaults or other occurrences that would not have a Material Adverse Effect on Thermo Electron.

(b) All shares of Thermo Common Stock issuable in accordance with this Agreement, and shares of Thermo Common Stock which will be subject to issuance pursuant to the TerraTech Stock Option Plans, the TerraTech ESPP, the Convertible Debentures and the warrants issued by TerraTech, each as assumed by Thermo Electron pursuant to this Agreement will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Thermo Electron or any other agreement or document to which Thermo Electron is a party or by which it is bound.

(c) No consent, approval, order or authorization of, or registration, declaration or filing with any Governmental Entity is required by or with respect to Thermo Electron or Merger Sub in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for (i) the filing of the Certificate of Merger with the Secretary of State of Delaware, (ii) the filing of the Proxy Statement and the Registration Statement (as defined in Section 5.1) with the SEC in accordance with the Securities Act and the Exchange Act, and (iii) such other consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable federal and state securities laws.

3.3. CAPITALIZATION.

(a) The authorized capital stock of Thermo Electron consists of 350,000,000 shares of Thermo Common Stock, par value $1.00 per share, of which there were 158,236,781 shares issued and outstanding as of October 2, 1999, and 9,011,451 shares in treasury as of October 2, 1999, and 50,000 shares of preferred stock, $100 par value per share, of which 40,000 shares have been designated Series B Junior Participating Preferred Stock, none of which are issued and outstanding. All of the outstanding shares of Thermo Common Stock are duly authorized, validly issued, fully paid and non-assessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Thermo Electron or any agreement or document to which Thermo Electron is a party or by which it is bound. As of October 2, 1999, an aggregate of 15,653,373 shares of Thermo Common Stock, net of exercises, were reserved for issuance to employees, consultants and non-employee directors pursuant to stock option plans maintained by Thermo Electron, under which options are outstanding for an aggregate of 11,912,116 shares. As of October 2, 1999, an aggregate of 15,476,191 shares of Thermo Common Stock were reserved for issuance upon the conversion of convertible debentures issued by Thermo Electron. All shares of Thermo Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and non-assessable. There are no bonds, debentures, notes or other indebtedness of Thermo Electron issued and outstanding which have rights to vote in the election of directors of Thermo Electron. Except as set forth in the Thermo Reports (as defined in Section 3.4) filed prior to the date of this Agreement, there are no other material outstanding options, warrants, equity securities, subscriptions, calls, rights, commitments or agreements of any character to which Thermo Electron or any of its subsidiaries is a party or by which it is bound, obligating Thermo Electron to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity securities of Thermo Electron or obligating Thermo Electron to grant or enter into any such option, warrant, equity security, call, right, commitment or agreement.

(b) Since July 3, 1999, there have been no material issuances of options, warrants, equity securities, subscriptions, calls, rights, commitments or agreements of any character to which Thermo Electron or any of its subsidiaries is a party or by which it is bound, obligating Thermo Electron to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity securities of Thermo Electron or obligating Thermo Electron to grant or enter into any such option, warrant, equity security, call, right, commitment or agreement.

(c) As of the date of this Agreement, no Stock Acquisition Date or other event that would result in the occurrence of a Distribution Date has occurred (as such terms are defined in the Rights Agreement

dated January 19, 1996, as amended, by and between Thermo Electron and BankBoston, N.A. (the "Rights Agreement")), with respect to the rights to purchase a unit consisting of one ten-thousandth of a share of Thermo Electron's Series B Junior Participating Preferred Stock pursuant to the Rights Agreement.

3.4 REPORTS AND FINANCIAL STATEMENTS. Thermo Electron has filed all material forms, reports and documents required to be filed by it with the SEC since January 1, 1997. Thermo Electron has made available to TerraTech complete and accurate copies, as amended or supplemented, of (a) its Annual Report on Form 10-K for the fiscal year ended January 2, 1999 as filed with the SEC, and
(b) all other reports filed by Thermo Electron with the SEC under Sections 13 or 14 of the Exchange Act since January 2, 1999 (such reports are collectively referred to herein as the "Thermo Reports"). No event has occurred since July 3, 1999 which will be required to be reported by Thermo Electron on a report required to be filed under Sections 13 or 14 of the Exchange Act. Without limitation of the foregoing, since July 3, 1999, there has been no change in the business, financial condition or results of operations of Thermo Electron that has resulted or is reasonably likely to result in a Material Adverse Effect on Thermo Electron. As of their respective dates, the Thermo Reports (i) complied in all material respects with the requirements of the Exchange Act and the applicable rules of the SEC thereunder and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements of Thermo Electron included in the Thermo Reports (in each case including the notes thereto)
(i) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (ii) have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto, and in the case of quarterly financial statements, as permitted by Form 10-Q under the Exchange Act), (iii) fairly present, in all material respects, the consolidated financial condition, results of operation and cash flows of Thermo Electron as of the respective dates thereof and for the periods referred to therein, and (iv) are consistent with the books and records of Thermo Electron. There are no liabilities of Thermo Electron which are not disclosed in the Thermo Reports which would be reasonably likely to have a Material Adverse Effect on Thermo Electron.

3.5 MERGER SUB. Since the date of its incorporation, Merger Sub has not engaged in any activities other than in connection with or as contemplated by this Agreement.

3.6 TAX TREATMENT. As of the Effective Time, all representations contained in the Representation Letters delivered to Hale and Dorr LLP pursuant to
Section 6.1(d) shall be true, correct and complete in all material respects. Stockholders of TerraTech are each third party beneficiaries of this
Section 3.6 and may seek relief for breach hereof in their own names.

3.7 INFORMATION PROVIDED TO INVESTMENT BANKERS. To the knowledge of Thermo Electron, the information provided by Thermo Electron and TerraTech to AH&H in connection with the Merger does not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. For purposes of the foregoing sentence, any projections or forward-looking statements shall not be deemed to be statements of material facts; however, the projections were prepared in good faith and based on assumptions that were reasonable at the time such projections were prepared, given the information known by management at such time. Furthermore, it is recognized that such projections and forward-looking statements do not constitute any warranty as to the future performance of Thermo Electron or TerraTech and that actual results may vary from projected results.

3.8 LITIGATION. Except as discussed in the Thermo Reports, there are no suits, actions, arbitrations, demands, claims or proceedings pending, or to the knowledge of Thermo Electron, threatened against Thermo Electron or any subsidiary of Thermo Electron which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on Thermo Electron.

3.9 COMPLIANCE WITH AGREEMENTS. The treatment provided for herein with respect to outstanding Convertible Debentures, options (both under the TerraTech Stock Option Plans and the TerraTech ESPP) and warrants of TerraTech is in compliance with the applicable agreements and instruments governing such securities. No consent or approval of the holders of such instruments is required in connection with the transactions contemplated by this Agreement.

3.10 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. Other than with respect to the information supplied by TerraTech, the Registration Statement shall not, at the time the Registration Statement becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements included therein not misleading. The information supplied by Thermo Electron for inclusion in the Proxy Statement (including any information incorporated by reference in the Proxy Statement from other filings made by Thermo Electron with the SEC) shall not, on the date the Proxy Statement is first mailed to stockholders, at the time of the TerraTech Stockholders' Meeting or at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading. The Proxy Statement will comply (with respect to information relating to Thermo Electron) as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder.

ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME

4.1. CONDUCT OF BUSINESS BY TERRATECH. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, TerraTech shall, except for such actions which are contemplated by this Agreement or reasonably appropriate in connection with the transactions contemplated by this Agreement, and except as consented to by Thermo Electron, carry on its business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings.

4.2 CONDUCT OF BUSINESS BY THERMO ELECTRON. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Thermo Electron
(i) shall, except for such actions which are contemplated by this Agreement or reasonably appropriate in connection with the transactions contemplated by this Agreement, or which are undertaken in connection with the Merger or with the reorganization of Thermo Electron and its subsidiaries as publicly announced or as disclosed to AH&H prior to the date of this Agreement, carry on its business materially in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings; and
(ii) shall not, and shall not permit any Material Thermo Subsidiary to, take any action which would make any of the representations and warranties of Thermo Electron contained herein untrue or cause Thermo Electron not to be in compliance with any covenant set forth herein.

ARTICLE V
ADDITIONAL AGREEMENTS

5.1. REGISTRATION STATEMENT; OTHER FILINGS. (a) As promptly as practicable after the execution of this Agreement, TerraTech and Thermo Electron will jointly prepare and file with the SEC a preliminary proxy statement (with appropriate requests for confidential treatment) relating to the Merger and this Agreement (such proxy statement, as amended or supplemented, the "Proxy Statement"), and Thermo Electron will prepare and file with the SEC a registration statement on Form S-4 (the "Registration Statement"), in which the Proxy Statement shall be included as a prospectus. Thermo Electron will use reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act as soon as practicable after such filing, and will take all actions required under applicable federal or state securities laws in connection with the issuance of Thermo Common Stock in the Merger. Each party will notify the other promptly upon the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff or any other government officials for amendments or supplements to the Proxy Statement, the Registration Statement or any other filing or for additional information and will supply the other party with copies of all correspondence between such party or any of its representatives, on the one hand, and the SEC, or its staff or any other government officials, on the other hand, with respect to the Registration Statement, the Proxy Statement or the Merger. Whenever any event occurs that is required to be set forth in an amendment or supplement to the Registration Statement or the Proxy Statement, the relevant party will promptly inform the other party of such occurrence and cooperate in filing with the SEC or its staff or any other government officials, and/or mailing to stockholders of TerraTech, such amendment or supplement.

(b) The information supplied by TerraTech for inclusion in the Registration Statement (including any information incorporated by reference in the Registration Statement from other filings made by TerraTech with the SEC) will not, at the time the Registration Statement (including any amendments or supplements thereto) is declared effective by the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The information supplied by TerraTech for inclusion in the Proxy Statement to be sent to the stockholders of TerraTech in connection with the meeting of TerraTech's stockholders to consider the adoption of this Agreement and approval of the Merger (the "TerraTech Stockholders' Meeting") (including any information incorporated by reference in the Proxy Statement from other filings made by TerraTech with the SEC) will not, on the date the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to TerraTech stockholders, at the time of the TerraTech Stockholders' Meeting and at the Effective Time, contain any statement which, at such time and in light of the circumstances under which it shall be made, is false or misleading with respect to any material fact, or shall omit to state any material fact necessary in order to make the statements made therein not false or misleading in light of the circumstances under which they were made, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the TerraTech Stockholders' Meeting which has become false or misleading.

(c) The information supplied by Thermo Electron and Merger Sub for inclusion in the Registration Statement (including any information incorporated by reference in the Registration Statement from other filings made by Thermo Electron with the SEC) will not, at the time the Registration Statement (including any amendments or supplements thereto) is declared effective by the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The information supplied by Thermo Electron and Merger Sub for inclusion in the Proxy Statement to be sent to the stockholders of TerraTech in connection with the TerraTech Stockholders' Meeting (including any information incorporated by reference in the Proxy Statement from other filings made by Thermo Electron with the SEC) will not, on the date the Proxy Statement (or any amendment thereof or

supplement thereto) is first mailed to TerraTech stockholders, at the time of the TerraTech Stockholders' Meeting and at the Effective Time, contain any statement which, at such time and in light of the circumstances under which it shall be made, is false or misleading with respect to any material fact, or shall omit to state any material fact necessary in order to make the statements made therein not false or misleading in light of the circumstances under which they were made, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the TerraTech Stockholders' Meeting which has become false or misleading.

(d) The Proxy Statement will include the recommendation of the Special Committee in favor of approval of this Agreement (except that the Special Committee may withdraw, modify or refrain from making such recommendation to the extent that the Special Committee determines after consultation with outside legal counsel that failure to do so would be inconsistent with the Special Committee's fiduciary duties under applicable law).

(e) The Proxy Statement will include the recommendation of the Board of Directors of TerraTech in favor of approval of this Agreement (except that the Board of Directors of TerraTech may withdraw, modify or refrain from making such recommendation to the extent that the Board determines after consultation with outside legal counsel that failure to do so would be inconsistent with the Board's fiduciary duties under applicable law).

(f) To the extent that the Special Committee or the Board withdraws, modifies or refrains from making their respective recommendations pursuant to Sections 5.1(d) or (e) hereof, the Proxy Statement will reflect such action.

5.2. MEETING OF TERRATECH STOCKHOLDERS. Promptly after the date hereof, TerraTech will take all action necessary in accordance with the DGCL and its Certificate of Incorporation and Bylaws to convene the TerraTech Stockholders' Meeting to be held as promptly as practicable for the purpose of voting upon this Agreement. Unless the Special Committee determines after consultation with outside legal counsel that to do so would be inconsistent with the Board's or the Special Committee's fiduciary duties under applicable law, TerraTech will use its reasonable best efforts to solicit from its stockholders proxies in favor of the approval of this Agreement and the Merger, and will take all other action necessary or advisable to secure the vote or consent of its stockholders required by the DGCL to obtain such approvals. Thermo Electron shall vote, or cause to be voted, all of the TerraTech Common Stock then owned by it and any of its subsidiaries in favor of the approval of this Agreement and the Merger.

5.3. ACCESS TO INFORMATION. Subject to applicable legal restrictions, each of the parties hereto will afford the other (including, in the case of TerraTech, the Special Committee) and each of their respective accountants, counsel and other representatives reasonable access during normal business hours to the properties, books, records and personnel of each of them during the period prior to the Effective Time to obtain all information concerning the their respective businesses, including the status of their respective product development efforts, properties, results of operations and personnel, as each of them may reasonably request. Each of the parties hereto agrees that it will, and will cause its representatives and agents to, keep all such information confidential and will not, and will cause its representatives or agents not to, use any information obtained pursuant to this Section 5.3 for any purpose unrelated to the consummation of the transactions contemplated by this Agreement. Notwithstanding the foregoing, none of the parties hereto shall be required to keep confidential any information (i) which is or becomes generally available to the public, other than by wrongful disclosure by the disclosing party in violation of this Agreement or (ii) which becomes available to the disclosing party on a nonconfidential basis from a source other than the nondisclosing party or any officer or director of such party.

5.4. PUBLIC DISCLOSURE. Thermo Electron and TerraTech will consult with each other before issuing any press release or otherwise making any public statement with respect to the Merger or this Agreement and will not issue any such press release or make any such public statement prior to such consultation, except as may be required by law or any listing agreement with a national securities exchange. Promptly upon the

execution hereof, the parties shall jointly make a press release with respect to the transactions contemplated by this Agreement, in form reasonably satisfactory to the Special Committee, and TerraTech shall, within five days after the execution hereof, file with the SEC a Current Report on Form 8-K, which shall attach as an exhibit this Agreement.

5.5. LEGAL REQUIREMENTS. Subject to the terms of this Agreement, each of Thermo Electron, Merger Sub and TerraTech will take all reasonable actions necessary or desirable to comply promptly with all legal requirements that may be imposed on them with respect to the consummation of the transactions contemplated by this Agreement (including furnishing all information required in connection with approvals of or filings with any Governmental Entity, and including using its reasonable best efforts to defend any litigation prompted hereby) and will promptly cooperate with and furnish information to any party hereto necessary in connection with any such requirements imposed upon any of them or their respective subsidiaries in connection with the consummation of the transactions contemplated by this Agreement.

5.6. NOTIFICATION OF CERTAIN MATTERS. Subject to the terms of this Agreement, Thermo Electron and Merger Sub will give prompt notice to TerraTech, and TerraTech will give prompt notice to Thermo Electron, of the occurrence, or failure to occur, of any event, which occurrence or failure to occur would be reasonably likely to cause (a) any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at any time from the date of this Agreement to the Effective Time, or (b) any material failure of Thermo Electron and Merger Sub or TerraTech, as the case may be, or of any officer, director, employee or agent thereof, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement. From the date of this Agreement until the Effective Time, Thermo Electron will give prompt notice to TerraTech (including, without limitation, the Special Committee) of any written offers or indications of interest it receives from a prospective purchaser of any material properties or assets of TerraTech or its subsidiaries, which set forth a proposed purchase price greater than $3 million or in which the book value of the assets being sold is greater than $3 million, other than sales of assets and services in the ordinary course of business. Notwithstanding the above, the delivery of any notice pursuant to this section will not limit or otherwise affect the remedies available hereunder to the party receiving such notice or the conditions to such party's obligation to consummate the Merger.

5.7. BEST EFFORTS AND FURTHER ASSURANCES. Subject to the respective rights and obligations of Thermo Electron and TerraTech under this Agreement, each of the parties to this Agreement will use its reasonable best efforts to effectuate the Merger and the other transactions contemplated hereby and to fulfill and cause to be fulfilled the conditions to closing under this Agreement, it being understood that such efforts shall not include any obligation to settle any litigation prompted hereby. Subject to the terms hereof, each party hereto, at the reasonable request of another party hereto, will execute and deliver such other instruments and do and perform such other acts and things as may be reasonably necessary or desirable for effecting completely the consummation of the transactions contemplated hereby.

5.8. STOCK OPTION AND EMPLOYEE STOCK PURCHASE PLANS; RESERVATION OF SHARES.

(a) At the Effective Time, each outstanding option to purchase shares of TerraTech Common Stock (each a "TerraTech Stock Option") under the TerraTech Stock Option Plans, whether or not exercisable, will be assumed by Thermo Electron. Each TerraTech Stock Option so assumed by Thermo Electron under this Agreement will continue to have, and be subject to, the same terms and conditions set forth in the applicable TerraTech Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights), except that (i) each TerraTech Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Thermo Common Stock equal to the product of the number of shares of TerraTech Common Stock that were issuable upon exercise of such TerraTech Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio and (ii) the per share exercise price for the shares of Thermo Common Stock issuable upon exercise of such assumed TerraTech Stock Option will be equal to the quotient determined by

dividing the exercise price per share of TerraTech Common Stock at which such TerraTech Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. After the Effective Time, Thermo Electron will issue to each holder of an outstanding TerraTech Stock Option a notice describing the foregoing assumption of such TerraTech Stock Option by Thermo Electron.

(b) At the Effective Time, each outstanding option to purchase shares of TerraTech Common Stock (each, a "TerraTech ESPP Stock Option") under the TerraTech ESPP will be assumed by Thermo Electron. Each TerraTech ESPP Stock Option so assumed by Thermo Electron will continue to have, and be subject to, the same terms and conditions as are set forth in the TerraTech ESPP immediately prior to the Effective Time except that (i) the assumed option shall be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Thermo Common Stock equal to the product of the number of shares of TerraTech Common Stock that would have been issuable upon exercise of such TerraTech ESPP Stock Option multiplied by the Exchange Ratio; (ii) the purchase price per share of Thermo Common Stock shall be the lower of (A) eighty-five percent (85%) of (x) the per-share Market Value of TerraTech Common Stock on the Grant Date divided by (y) the Exchange Ratio, with the resulting price rounded up to the nearest whole cent, and (B) eighty-five percent (85%) of the Market Value of Thermo Common Stock as of the Exercise Date; and (iii) the $25,000 limit under Section 9.2(i) of the TerraTech ESPP shall be applied by taking into account Thermo Electron's assumption of the TerraTech ESPP Stock Options in accordance with the Code and applicable regulations. For purposes of this subsection, "Market Value," "Grant Date," and "Exercise Date" shall have the meaning given them in the TerraTech ESPP.

(c) Thermo Electron will reserve sufficient shares of Thermo Common Stock for issuance under this Section 5.8 and pursuant to conversion of the Convertible Debentures and the exercise of warrants issued by TerraTech.

5.9. THERMO ELECTRON FORM S-8. Thermo Electron agrees to file a registration statement on Form S-8 or, if possible, an amendment to Thermo Electron's then effective registration statement on Form S-8, for the shares of Thermo Common Stock issuable with respect to the assumed TerraTech Stock Options and the assumed TerraTech ESPP Stock Options within five (5) business days of the Effective Time, and shall keep such registration statement effective for so long as any such options remain outstanding.

5.10. THERMO ELECTRON FORM S-3. Thermo Electron agrees to file, promptly after the date of this Agreement, a registration statement on Form S-3 to cover the shares of Thermo Common Stock issuable upon the exercise of the warrants issued by TerraTech (the "Warrant Share S-3"), and shall keep such Warrant Share S-3 effective until all of the shares of Thermo Common Stock covered thereby have been sold pursuant thereto or until, by reason of Rule 144(k) under the Securities Act or any other rule of similar effect, the shares of Thermo Common Stock covered thereby are no longer required to be registered for the public sale thereof by the holders of such securities or the warrants have expired by their terms.

5.11. INDEMNIFICATION; INSURANCE.

(a) The Certificate of Incorporation and Bylaws of the Surviving Corporation will contain the provisions with respect to indemnification and elimination of liability for monetary damages set forth in the Certificate of Incorporation and Bylaws of TerraTech, which provisions will not be amended, repealed or otherwise modified for a period of six (6) years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who, as of the date hereof and at any time from the date hereof to the Effective Time, were directors or officers of TerraTech, unless such modification is required by law. The Surviving Corporation shall, and Thermo Electron will cause the Surviving Corporation to, fulfill and honor in all respects the indemnification obligations of TerraTech pursuant to the provisions of the Certificate of Incorporation and the Bylaws of TerraTech as in effect on the date of this Agreement.

(b) For a period of six (6) years after the Effective Time, Thermo Electron shall cause the Surviving Corporation to, either directly or through participation in Thermo Electron's umbrella policy, maintain in effect a directors' and officers' liability insurance policy covering those TerraTech directors and officers currently covered by Thermo Electron's liability insurance policy with coverage no less favorable in amount and scope than existing coverage for such TerraTech directors and officers (which coverage may be an endorsement extending the period in which claims may be made under such existing policy); provided, however, that in no event shall the Surviving Corporation be required to expend to maintain or procure insurance coverage pursuant to this Section 5.11, directly or through participation in Thermo Electron's policy, an amount per annum in excess of 175% of the current annual premiums, as adjusted for inflation each year, allocable and payable by TerraTech (the "Maximum Premium") with respect to such insurance, or, if the cost of such insurance exceeds the Maximum Premium, the maximum amount of coverage that can be purchased or maintained for the Maximum Premium.

(c) TerraTech shall, to the fullest extent permitted under applicable law and regardless of whether the Merger becomes effective, indemnify and hold harmless Polyvios Vintiadis ("Vintiadis") against all costs and expenses (including attorneys' fees), judgments, fines, losses, claims, damages, liabilities and settlement amounts paid in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to any action or omission in Vintiadis' capacity as a director (including, without limitation, as a member of the Special Committee) or fiduciary of TerraTech (including, without limitation, in connection with the transactions contemplated by this Agreement) occurring on, before or after the Effective Time (or, if this Agreement is terminated without the Merger becoming effective, occurring on, before or after the date of such termination), until the expiration of the statute of limitations relating thereto (and shall pay any expenses in advance of the final disposition of such action or proceeding to Vintiadis to the fullest extent permitted under applicable law, upon receipt from Vintiadis of an undertaking (which need not be secured or subject to a bond or other requirement) to repay any advanced expenses if it shall ultimately be determined that Vintiadis is not entitled to be indemnified against such expenses). If the Merger becomes effective, Thermo Electron shall be jointly and severally responsible, to the fullest extent permitted by applicable law (it being understood that applicable law may permit Thermo Electron to indemnify or advance expenses to Vintiadis under circumstances in which TerraTech could not do so), for the indemnification and advancement of expenses obligations provided for in the first sentence of this
Section 5.11(c). If the Merger does not become effective, Thermo Electron shall have the same responsibilities set forth in the immediately preceding sentence, except that Thermo Electron shall have no responsibility for indemnifying or advancing expenses to Vintiadis with respect to matters that do not arise out of or pertain to the work of the Special Committee, this Agreement or the transactions contemplated hereby. In the event of any claim, action, suit, proceeding or investigation covered by this Section 5.11(c), (i) TerraTech, Thermo Electron and the Surviving Corporation, as the case may be, shall pay the reasonable fees and expenses of counsel selected by Vintiadis, promptly after statements therefor are received, and (ii) TerraTech, Thermo Electron and the Surviving Corporation shall cooperate in the defense of any such matter; provided, however, that neither TerraTech nor Thermo Electron nor the Surviving Corporation shall be liable for any settlement effected without Thermo Electron's prior written consent (such consent not to be unreasonably withheld or delayed); and provided, further, that, in the event any claim for indemnification is asserted or made within the period prior to the expiration of the applicable statute of limitations, all rights to indemnification in respect of such claim shall continue until the disposition of such claim. In connection with Thermo Electron or the Surviving Corporation making any payment or advancing any funds pursuant to this Section 5.11(c), Thermo Electron or the Surviving Corporation, as the case may be, shall be entitled to require Vintiadis to use commercially reasonable efforts, at the cost and expense of Thermo Electron and the Surviving Corporation, to cause Thermo Electron or the Surviving Corporation, as the case may be, to be subrogated to Vintiadis' rights under any insurance coverage maintained by the Surviving Corporation, Thermo Electron or any of their respective affiliates with respect to the underlying subject matter of, and to the extent of, such payment or advance.

(d) In the event TerraTech, Thermo Electron or the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers all or substantially all of its properties or assets to any person, then, and in each such case, proper provision shall be made so that the successors and assigns of TerraTech, Thermo Electron and the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 5.11.

(e) Heirs, representatives and estates of the officers and directors of TerraTech (including, without limitation, Vintiadis) shall have the right to enforce the obligations arising under this Section 5.11.

(f) The rights of the officers and directors of TerraTech (including, without limitation, Vintiadis) under this Section 5.11 are in addition to any rights of such persons under separate indemnification agreements any such persons may have with TerraTech and/or Thermo Electron, under the Certificate of Incorporation or Bylaws of TerraTech or Thermo Electron or otherwise.

5.12. DEFERRED COMPENSATION PLAN. Subject to obtaining the consents of the affected participants, at the Effective Time, the TerraTech Deferred Compensation Plan for Directors (the "Deferred Compensation Plan") will terminate, and TerraTech will distribute to each participant the sum in cash equal to the balance of stock units credited to his or her deferred compensation account under the Deferred Compensation Plan as of the Effective Time multiplied by the Exchange Ratio.

5.13 COMPLIANCE BY MERGER SUB. Thermo Electron shall cause Merger Sub to timely perform and comply with all of its obligations under or related to this Agreement.

5.14 TAX TREATMENT. From and after the date of this Agreement until the Effective Time, neither Thermo Electron nor Merger Sub will take, or permit any of Thermo Electron's direct or indirect subsidiaries to take, any action that would cause the Merger not to be a tax-free reorganization under Section 368(a) of the Code. Notwithstanding anything in this Agreement to the contrary, this
Section 5.14 shall survive the Closing and shall apply without regard to any disclosure made on behalf of Thermo Electron or Merger Sub. Stockholders of TerraTech are each third party beneficiaries of this Section 5.14 and may seek relief for breach hereof in their own names.

5.15 NYSE LISTING. Thermo Electron shall use its best efforts to cause all shares of Thermo Common Stock issuable to stockholders of TerraTech, and all shares of Thermo Common Stock which will be subject to issuance pursuant to the TerraTech Stock Option Plans, the TerraTech ESPP, the Convertible Debentures and the warrants issued by TerraTech, each as assumed by Thermo Electron pursuant to this Agreement, to be authorized for listing on the New York Stock Exchange.

ARTICLE VI
CONDITIONS TO THE MERGER

6.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The respective obligations of each party to this Agreement to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of the following conditions:

(a) NO ORDER. No Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger.

(b) REGISTRATION STATEMENTS. The Registration Statement and the Warrant Share S-3 shall have been declared effective by the SEC and no stop order suspending the effectiveness of the Registration Statement or the Warrant Share S-3 shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC.

(c) NYSE LISTING. The Thermo Common Stock issuable to holders of TerraTech Common Stock and all shares of Thermo Common Stock which will be subject to issuance pursuant to the TerraTech Stock Option Plans, the TerraTech ESPP, the Convertible Debentures and the warrants issued by TerraTech, each as assumed by Thermo Electron pursuant to this Agreement, shall have been authorized for listing on the New York Stock Exchange.

(d) TAX OPINION. TerraTech and Thermo Electron shall have received an opinion from Hale and Dorr LLP, dated the Closing Date, in substantially the form attached to this Agreement, regarding certain tax matters relating to the transactions contemplated under this Agreement, including that the Merger will be treated for federal income tax purposes as a tax-free reorganization within the meaning of Section 368(a) of the Code, in form and substance reasonably satisfactory to TerraTech (including the Special Committee) and Thermo Electron. Such opinion shall be based upon factual representations (reasonably satisfactory to TerraTech (including the Special Committee) and Thermo Electron) from TerraTech and Thermo Electron contained in certain letters to be delivered to Hale and Dorr LLP (the "Representation Letters").

(e) STOCKHOLDER APPROVAL. This Agreement shall have been approved and adopted by the requisite vote under the DGCL by the stockholders of TerraTech.

(f) RIGHTS AGREEMENT. No Stock Acquisition Date or other event that would result in the occurrence of a Distribution Date shall have occurred (as such terms are defined in the Rights Agreement), with respect to the rights to purchase a unit consisting of one ten-thousandth of a share of Thermo Electron's Series B Junior Participating Preferred Stock pursuant to the Rights Agreement.

6.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF TERRATECH. The obligations of TerraTech to consummate and effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of each of the following conditions, any of which may be waived, in writing, exclusively by TerraTech (provided that the Special Committee shall have consented in writing to any such waiver):

(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of Thermo Electron and Merger Sub contained in this Agreement shall be true and correct in all material respects (other than those already qualified by a materiality standard, which shall be true and correct in all respects) on and as of the Effective Time, except for changes expressly contemplated by this Agreement and except for those representations and warranties that address matters only as of a particular date (which shall remain true and correct as of such particular date), with the same force and effect as if made on and as of the Effective Time; and TerraTech shall have received a certificate to such effect signed on behalf of Thermo Electron by the President, Chief Executive Officer or Vice President of Thermo Electron.

(b) AGREEMENTS AND COVENANTS. Thermo Electron and Merger Sub shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Effective Time, and TerraTech shall have received a certificate to such effect signed on behalf of Thermo Electron by the President, Chief Executive Officer or Vice President of Thermo Electron.

(c) FAIRNESS OPINION. At the time of mailing of the Proxy Statement to the stockholders of TerraTech and at the Effective Time, AHH shall have reaffirmed orally the fairness opinion previously prepared and delivered by it to the Special Committee and AHH shall not have withdrawn such opinion.

(d) STATE SECURITIES LAWS. Any and all necessary state securities approvals for the issuance of Thermo Common Stock pursuant to this Agreement shall have been obtained.

6.3. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THERMO ELECTRON AND MERGER SUB. The obligations of Thermo Electron and Merger Sub to consummate and effect the Merger shall be subject to the satisfaction

at or prior to the Effective Time of each of the following conditions, any of which may be waived, in writing, exclusively by Thermo Electron:

(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of TerraTech contained in this Agreement shall be true and correct in all material respects (other than those already qualified by a materiality standard, which shall be true and correct in all respects) on and as of the Effective Time, except for changes contemplated by this Agreement and except for those representations and warranties that address matters only as of a particular date (which shall remain true and correct as of such particular date), with the same force and effect as if made on and as of the Effective Time, except, in all such cases, where the failure to be so true and correct would not have a Material Adverse Effect on TerraTech; and Thermo Electron and Merger Sub shall have received a certificate to such effect signed on behalf of TerraTech by the President, Chief Executive Officer or Vice President of TerraTech.

(b) AGREEMENTS AND COVENANTS. TerraTech shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time, and Thermo Electron shall have received a certificate to such effect signed on behalf of TerraTech by the President, Chief Executive Officer or Vice President of TerraTech.

(c) NO WITHDRAWAL OF SPECIAL COMMITTEE RECOMMENDATION. The Special Committee shall not have withdrawn its recommendation to the Board of Directors of TerraTech as set forth in Section 2.4 hereof.

ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER

7.1. TERMINATION. This Agreement may be terminated at any time prior to the Effective Time of the Merger, whether before or after approval of this Agreement by the stockholders of TerraTech:

(a) by mutual written consent duly authorized by the Boards of Directors of Merger Sub and TerraTech (upon approval of the Special Committee);

(b) by either TerraTech (at the direction of the Special Committee) or Merger Sub if the Merger shall not have been consummated by March 31, 2000; provided, however, that the right to terminate this Agreement under this
Section 7.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Merger to occur on or before such date if such action or failure to act constitutes a breach of this Agreement;

(c) by either TerraTech (upon approval of the Special Committee) or Merger Sub if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action (an "Order"), in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, which order, decree or ruling is final and nonappealable;

(d) by either TerraTech (upon approval of the Special Committee) or Merger Sub if the required approval of the stockholders of TerraTech contemplated by this Agreement shall not have been obtained by reason of the failure to obtain the required vote upon a vote taken at a meeting of stockholders duly convened therefor or at any adjournment thereof (provided that the right to terminate this Agreement under this Section 7.1(d) shall not be available to TerraTech where the failure to obtain stockholder approval of TerraTech shall have been caused by the action or failure to act of TerraTech in breach of this Agreement and the right to terminate this Agreement under this Section 7.1(d) shall not be available to Merger Sub where the failure to obtain the requisite vote by the stockholders of TerraTech shall have been caused by the failure of Thermo Electron or any direct or indirect subsidiary of Thermo Electron (whether or not wholly-owned) to vote its shares of TerraTech Common Stock in favor of the Merger and this Agreement);

(e) by TerraTech if the Special Committee determines after consultation with outside legal counsel that failure to do so would be inconsistent with the Board's or the Special Committee's fiduciary duties under applicable law;

(f) by TerraTech (upon approval of the Special Committee), upon a breach of any representation, warranty, covenant or agreement on the part of Thermo Electron or Merger Sub set forth in this Agreement, if (i) as a result of such breach the conditions set forth in Section 6.2(a) or Section 6.2(b) would not be satisfied as of the time of such breach and (ii) such breach shall not have been cured by Thermo Electron or Merger Sub within ten (10) business days following receipt by Thermo Electron of written notice of such breach from TerraTech;

(g) by Merger Sub, upon a breach of any representation, warranty, covenant or agreement on the part of TerraTech set forth in this Agreement, if (i) as a result of such breach the conditions set forth in Section 6.3(a) or
Section 6.3(b) would not be satisfied as of the time of such breach and
(ii) such breach shall not have been cured by TerraTech within ten
(10) business days following receipt by TerraTech of written notice of such breach from Merger Sub; or

(h) by Merger Sub at the direction of Thermo Electron if, as a result of an adjustment in the Exchange Ratio pursuant to Section 1.6(g) hereof, Thermo Electron would be required to issue more than 1,800,000 shares of Thermo Common Stock (exclusive of shares issuable upon the exercise of options or warrants or the conversion of convertible debentures outstanding on the date of this Agreement; and subject to adjustment for any stock split, reverse stock split, stock dividend, recapitalization or other like change).

7.2. NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any termination of this Agreement under Section 7.1 above will be effective immediately upon the delivery of written notice by the terminating party to the other parties hereto (or, in the case of a termination pursuant to Section 7.1(f) or 7.1(g), the expiration of the ten business day period referred to therein). In the event of the termination of this Agreement as provided in Section 7.1, this Agreement shall be of no further force or effect, except that (i) the confidentiality obligations of each party hereto contained in Section 5.3, the obligations contained in Section 5.11, and the provisions of Sections 7.2, 7.3 and 8.1 shall survive any such termination and (ii) nothing herein shall relieve any party from liability for any willful and material breach of this Agreement.

7.3. FEES AND EXPENSES. All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses, whether or not the Merger is consummated.

7.4. AMENDMENT. Subject to applicable law, this Agreement may be amended by the parties hereto at any time by execution of an instrument in writing signed on behalf of each of the parties hereto; provided, however, that TerraTech may not amend this Agreement without the approval of the Special Committee.

7.5. EXTENSION; WAIVER. At any time prior to the Effective Time any party hereto may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions for the benefit of such party contained herein; provided, however, that TerraTech may not take any such actions without the approval of the Special Committee. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

ARTICLE VIII
GENERAL PROVISIONS

8.1. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of TerraTech, Thermo Electron and Merger Sub contained in this Agreement (other than those contained in Section 3.6) shall terminate at the Effective Time, and only the covenants that by their terms, or as the context requires, survive the Effective Time shall survive the Effective Time.

8.2. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice):

(a) if to Thermo Electron or Merger Sub, to:

Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: President
Telephone: (781) 622-1000
Facsimile: (781) 622-1283

with a copy (which shall not constitute notice to Thermo Electron or Merger Sub) to:

Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: General Counsel
Telephone: (781) 622-1000
Facsimile: (781) 622-1283

(b) if to TerraTech, to:

Thermo TerraTech Inc.
85 First Avenue
Waltham, MA 02451
Attention: President
Telephone: (781) 370-1640
Facsimile: (781) 370-1615

with a copy (which shall not constitute notice to TerraTech) to:

Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
Attention: William P. Gelnaw, Jr., Esq. Telephone: (617) 248-5000
Facsimile: (617) 248-4000

8.3. COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart.

8.4. ENTIRE AGREEMENT. This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, with the exception of the agreements relating to the Convertible Debentures, the TerraTech ESPP, the TerraTech Stock Option Plans, the warrants issued by TerraTech, the Deferred Compensation Plan, and any agreements relating to indemnification of members of the Board; and (b) are not intended to confer upon any other person any rights or remedies hereunder, except as set forth or otherwise contemplated herein. Notwithstanding the foregoing, Section 5.11 hereof is intended to be for the benefit of, and may be enforced by, those individuals who, as of the date hereof and at any time from the date hereof to the Effective Time, were directors or officers of TerraTech.

8.5. SEVERABILITY. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

8.6. OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

8.7. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof, except to the extent that the DGCL applies.

8.8. ASSIGNMENT. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties.

8.9 HEADINGS. The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

[The rest of this page intentionally left blank.]

IN WITNESS WHEREOF, Thermo Electron, Merger Sub and TerraTech have caused this Agreement to be signed by themselves or their duly authorized respective officers, all as of the date first written above.

THERMO ELECTRON CORPORATION

By:  /s/ THEO MELAS-KYRIAZI
     -----------------------------------------
     Name: Theo Melas-Kyriazi
     Title: VICE PRESIDENT AND CHIEF FINANCIAL
     OFFICER

TTT ACQUISITION CORPORATION

By:  /s/ THEO MELAS-KYRIAZI
     -----------------------------------------
     Name: Theo Melas-Kyriazi
     Title: PRESIDENT

THERMO TERRATECH INC.

By:  /s/ KENNETH J. APICERNO
     -----------------------------------------
     Name: Kenneth J. Apicerno
     Title: TREASURER

H&D Draft of 10/18/99

[Hale and Dorr LLP letterhead]

October [ ], 1999

Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454

Thermo TerraTech Inc.
85 First Avenue
Waltham, MA 02451

Re: Merger Pursuant to Agreement and Plan of Merger by and Among Thermo Electron Corporation, TT Acquisition Corporation, and Thermo TerraTech Inc.

Ladies and Gentlemen:

This opinion is being delivered to you in connection with the filing of a registration statement (the "Registration Statement") on Form S-4, which includes the Joint Proxy Statement and Prospectus relating to the Agreement and Plan of Merger dated as of October [ ], 1999 (the "Merger Agreement"), by and among Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"), TT Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of Thermo Electron ("Merger Sub"), and Thermo TerraTech Inc., a Delaware corporation ("TerraTech"). Pursuant to the Merger Agreement, Merger Sub will merge with and into TerraTech (the "Merger"). Except as otherwise provided, capitalized terms not defined herein have the meanings set forth in the Merger Agreement and the exhibits thereto or in the letters delivered to Hale and Dorr LLP by Thermo Electron and TerraTech containing certain representations of Thermo Electron and TerraTech relevant to this opinion (the "Representation Letters"). All section references, unless otherwise indicated, are to the United States Internal Revenue Code of 1986, as amended (the "Code").

In our capacity as counsel to Thermo Electron in the Merger, and for purposes of rendering this opinion, we have examined and relied upon the Registration Statement, the Merger Agreement and the exhibits thereto, the Representation Letters, and such other documents as we considered relevant to our analysis. In our examination of documents, we have assumed the authenticity of original documents, the accuracy of copies, the genuineness of signatures, and the legal capacity of signatories.

We have assumed that all parties to the Merger Agreement and to any other documents examined by us have acted, and will act, in accordance with the terms of such Merger Agreement and documents and that the Merger will be consummated at the Effective Time pursuant to the terms and conditions set forth in the Merger Agreement without the waiver or modification of any such terms and conditions. Furthermore, we have assumed that all representations contained in the Merger Agreement, as well as those representations contained in the Representation Letters, are, and at the Effective Time will be, true and complete in all material respects, and that any representation made in any of the documents referred to herein "to the best of the knowledge and belief" (or similar qualification) of any person or party is correct without such qualification. We have also assumed that as to all matters for which a person or entity has represented that such person or entity is not a party to, does not have, or is not aware of, any plan, intention, understanding, or agreement, there is no such plan, intention, understanding, or agreement. We have not attempted to verify independently such representations, but in the course of our representation, nothing has come to our attention that would cause us to question the accuracy thereof.

The conclusions expressed herein represent our judgment as to the proper treatment of certain aspects of the Merger under the income tax laws of the United States based upon the Code, Treasury Regulations, case law, and rulings and other pronouncements of the Internal Revenue Service (the "IRS") as in effect on the date of this opinion. No assurances can be given that such laws will not be amended or otherwise changed prior to the Effective Time, or at any other time, or that such changes will not affect the conclusions expressed herein. Nevertheless, we undertake no responsibility to advise you or your shareholders of any developments after the Effective Time in the application or interpretation of the income tax laws of the United States.

Our opinion represents our best judgment of how a court would decide if presented with the issues addressed herein and is not binding upon either the IRS or any court. Thus, no assurances can be given that a position taken in reliance on our opinion will not be challenged by the IRS or rejected by a court.

This opinion addresses only the specific United States federal income tax consequences of the Merger set forth below, and does not address any other federal, state, local, or foreign income, estate, gift, transfer, sales, use, or other tax consequences that may result from the Merger or any other transaction (including any transaction undertaken in connection with the Merger). We express no opinion regarding the tax consequences of the Merger to shareholders of TerraTech that are subject to special tax rules (including insurance companies, tax-exempt organizations, financial institutions, broker-dealers, foreign persons, stockholders who own their stock as part of a hedge, appreciated financial position, straddle or conversion transaction, stockholders who do not own their stock as a capital asset and stockholders who have acquired their stock upon the exercise of employee options or otherwise as compensation), and we express no opinion regarding the tax consequences of the Merger arising in connection with the ownership of options or warrants for TerraTech stock.

On the basis of, and subject to, the foregoing, and in reliance upon the representations and assumptions described above, we are of the following opinion:

1. The Merger will constitute a reorganization within the meaning of
Section 368(a);

2. No gain or loss will be recognized by Thermo Electron, Merger Sub, or TerraTech as a result of the Merger;

3. No gain or loss will be recognized by the shareholders of TerraTech upon the exchange of TerraTech stock solely for shares of Thermo Electron stock in the Merger;

4. Cash received by the shareholders of TerraTech in lieu of fractional shares of Thermo Electron stock will be treated as received as a distribution in redemption of such fractional shares, subject to the provisions of Section 302, as if such fractional shares had been issued in the Merger and then redeemed by Thermo Electron;

5. The tax basis of the shares of Thermo Electron stock received by the shareholders of TerraTech in the Merger will be equal to the tax basis of the shares of TerraTech stock exchanged therefor in the Merger, reduced by any basis allocable to a fractional share of Thermo Electron stock treated as sold or exchanged under Section 302; and

6. The holding period for the shares of Thermo Electron stock received by the shareholders of TerraTech will include the holding period for the shares of TerraTech stock exchanged therefor in the Merger, provided that the shares of TerraTech stock are held as capital assets at the Effective Time.

No opinion is expressed as to any federal income tax consequence of the Merger except as specifically set forth herein, and this opinion may not be relied upon except with respect to the consequences specifically discussed herein.

This opinion is intended solely for the purpose of inclusion as an exhibit to the Registration Statement. It may not be relied upon for any other purpose or by any other person or entity, other than

you and your shareholders, and may not be made available to any other person or entity without our prior written consent. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and further consent to the use of our name in the Registration Statement in connection with references to this opinion and the tax consequences of the Merger. In giving this consent, however, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended.

Very truly yours,
HALE AND DORR LLP

APPENDIX B

ADAMS, HARKNESS & HILL LETTERHEAD

October 19, 1999

Special Committee of the Board of Directors Thermo TerraTech Inc.
81 Wyman Street
Waltham, MA 02254

Dear Sirs:

The Special Committee of the Board of Directors (the "Special Committee") of Thermo TerraTech Inc. ("TTT" or the "Company") has requested our opinion (the "Opinion"), as investment bankers, as to the fairness, from a financial point of view, to the shareholders of the Company other than Thermo Electron Corporation ("Thermo Electron"), of the consideration to be received by such shareholders, in the form of shares of the common stock, par value $1.00 per share, of Thermo Electron ("Thermo Common Stock"), in connection with the proposed acquisition (the "Transaction") of the Company by Thermo Electron, pursuant to an Agreement and Plan of Merger to be dated as of October 19, 1999 (the "Merger Agreement"), by and among Thermo Electron, TT Acquisition Corporation, a wholly-owned subsidiary of Thermo Electron ("Merger Sub"), and the Company. Adams, Harkness & Hill, Inc. ("AH&H"), as part of its investment banking activities, is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes.

In the Transaction and pursuant to the Merger Agreement, subject to Company shareholder approval, each share of the Company's common stock, par value $.10 per share (the "Common Shares"), issued and outstanding immediately prior to the effective date of the Transaction, will be converted into the right to receive 0.4 of a share of Thermo Common Stock at or subsequent to the effective date of the Transaction (the "Exchange Ratio"), subject to adjustment as follows:

- If the average of the closing prices per share of the Thermo Common Stock as reported in the consolidated transaction reporting system for each of the 20 consecutive trading days ending on the fifth trading day prior to the effective time of the Merger (the "Pre-Closing Average Price") multiplied by the Exchange Ratio is less than $7.25, the Exchange Ratio will be adjusted to become equal to a fraction, the numerator of which is $7.25 and the denominator of which is the Pre-Closing Average Price; PROVIDED, HOWEVER, that if the Exchange Ratio, as so adjusted, would result in the aggregate issuance by Thermo Electron in the Transaction of greater than 1,800,000 shares of Thermo Common Stock, then Thermo Electron may elect to terminate the Merger Agreement.

- If the product of the Pre-Closing Average Price multiplied by the Exchange Ratio is greater than $9.25, the Exchange Ratio will be adjusted to become equal to a fraction, the numerator of which is $9.25 and the denominator of which is the Pre-Closing Average Price.

In developing our Opinion, we have, among other activities: (i) reviewed the Company's Annual Reports, Reports on Form 10-K and related financial information for the three fiscal years ended April 3, 1999, and the Company's Report on Form 10-Q and the related unaudited financial information for the three month period ending July 3, 1999 (the "Public Historical Financial Information");
(ii) reviewed Thermo Electron's Annual Reports, Reports on Form 10-K and related financial information for the three fiscal years ended January 2, 1999, and Thermo Electron's Reports on Form 10-Q and the related unaudited financial information for the three month periods ending April 3, 1999 and July 3, 1999;
(iii) analyzed certain internal financial statements and other internal financial and operating data and

business plans prepared by the management of the Company, including five-year financial budgets (the "Budgets"); (iv) conducted due diligence discussions with members of senior management of the Company and Thermo Electron, and discussed with members of senior management of the Company and Thermo Electron their views regarding the business and prospects of the Company and Thermo Electron and financial and operating benefits arising from the Transaction; (v) reviewed the historical market prices and trading activity for the Common Shares and compared them with that of certain publicly traded companies we deemed to be relevant and comparable to the Company; (vi) compared the results of operations of the Company with those of certain companies we deemed to be relevant and comparable to the Company; (vii) compared the financial terms of the Transaction with the financial terms of certain other mergers and acquisitions we deemed to be relevant and comparable to the Transaction; (viii) reviewed the Merger Agreement; and (ix) reviewed such other financial studies and analyses and performed such other investigations and took into account such other matters as we deemed necessary, including our assessment of general economic, monetary, market and industry conditions. In support of our assessment of environmental industry conditions, we engaged and consulted Environmental Business International, Inc. ("EBI"), a leading strategic consulting firm serving the environmental services industry. EBI reviewed the Public Historical Financial Information, the Budgets, and certain financial and industry analyses prepared by AH&H, and provided to us its professional opinion that the Budgets had been prepared on a reasonable basis, the analysis, procedures and industry assessments performed by AH&H were sufficiently comprehensive, and the major industry-related factors affecting TTT had been duly considered by AH&H.

Our Opinion as expressed herein is limited to the fairness, from a financial point of view, of the proposed consideration and does not address the Company's underlying business decision to engage in the Transaction. Our Opinion does not constitute a recommendation to any shareholder of the Company as to how such shareholder should vote on the Transaction. We are expressing no opinion as to the value of Common Shares at the time of our analysis or at any time prior to and including the effective date of the Transaction. In connection with our review and in arriving at our Opinion, we have not independently verified any information received from the Company, have relied on such information, and have assumed that all such information is complete and accurate in all material respects. With respect to any internal forecasts or budgets reviewed relating to the prospects of the Company, we have assumed that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the Company's management as to the future financial performance and cash requirements of the Company. Our Opinion is rendered on the basis of securities market conditions prevailing as of the date hereof and on the conditions and prospects, financial and otherwise, of the Company as known to us on the date hereof. We have not conducted, nor have we received copies of, any independent valuation or appraisal of any of the assets of the Company. In addition, we have assumed, with your consent, that the terms set forth in the executed Merger Agreement will not differ materially from the proposed terms provided to us in the October 19, 1999 draft Merger Agreement.

AH&H also has been engaged by Special Committees of the Boards of Directors of each of Randers Killam Group, Inc. ("RGI") and ThermoRetec Corporation ("Retec") to develop opinions as to the fairness to the holders of common stock of RGI and Retec other than Thermo Electron and TTT, respectively, of the consideration to be received by such holders in separate transactions involving Thermo Electron.

It is understood that this letter is for the information of the Special Committee and the Board of Directors of the Company and may not be used for any other purpose without our prior written consent, except that this opinion may be included in its entirety in any filing made by the Company with the Securities and Exchange Commission with respect to the transactions contemplated by the Merger Agreement.

Based upon and subject to the foregoing, it is our opinion, as of the date hereof, that the consideration to be received in the Transaction by the shareholders of the Company other than Thermo Electron is fair, from a financial point of view, to such shareholders.

Sincerely,
ADAMS, HARKNESS & HILL, INC.

By: /s/ James A. Simms
James A. Simms
Group Head, Mergers & Acquisitions

APPENDIX C

ANNUAL REPORT ON FORM 10-K OF THERMO TERRATECH
FOR THE FISCAL YEAR ENDED APRIL 3, 1999

APPENDIX C

FORM 10-K

(mark one)

[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended April 3, 1999

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 1-9549

Delaware                                                             04-2925807
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

81 Wyman Street, P.O. Box 9046                               02454-9046
Waltham, Massachusetts                                       (Zip Code)
(Address of principal executive offices)

Registrant's telephone number, including area code: (781) 622-1000

       Title of each class            Name of each exchange on which registered
----------------------------------    -----------------------------------------
    Common Stock, $.10 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. [ ]

The aggregate market value of the voting stock held by nonaffiliates of the Registrant as of April 30, 1999, was approximately $9,493,000.

As of April 30, 1999, the Registrant had 19,049,354 shares of Common Stock outstanding.