THERMO VISION CORP, DEF 14A, 1998-04-30

THERMO VISION CORP
DEF 14A, 1998-04-30
LABORATORY ANALYTICAL INSTRUMENTS

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<PAGE>

THERMO VISION CORPORATION

8 East Forge Parkway
Franklin, Massachusetts 02038
April 23, 1998
Dear Stockholder:

The enclosed Notice calls the 1998 Annual Meeting of the Stockholders of
Thermo Vision Corporation. I respectfully request that all Stockholders attend
this meeting, if possible.

Our Annual Report for the year ended January 3, 1998, is enclosed. I hope
you will read it carefully. Feel free to forward to me any questions you may
have if you are unable to be present at the meeting.

Enclosed with this letter is a proxy authorizing three officers of the
Corporation to vote your shares for you if you do not attend the meeting.
Whether or not you are able to attend the meeting, I urge you to complete your
proxy and return it to our transfer agent, American Stock Transfer & Trust
Company, in the enclosed addressed, postage-paid envelope, as a quorum of the
Stockholders must be present at the meeting, either in person or by proxy.

I would appreciate your immediate attention to the mailing of this proxy.

Yours very truly,

KRISTINE STOTZ LANGDON
President and Chief Executive Officer
<PAGE>

THERMO VISION CORPORATION

8 East Forge Parkway
Franklin, Massachusetts 02038

April 23, 1998

To the Holders of the Common Stock of
THERMO VISION CORPORATION

NOTICE OF ANNUAL MEETING

The 1998 Annual Meeting of the Stockholders of Thermo Vision Corporation
(the "Corporation") will be held on Monday, June 1, 1998, at 9:00 a.m. at The
Hyatt Regency Scottsdale Resort at Gainey Ranch, 7500 East Doubletree Ranch
Road, Scottsdale, Arizona, 85258. The purpose of the Meeting is to consider and
take action upon the following matters:

1. Election of five directors.

2. A proposal recommended by the board of directors to adopt an
employees' stock purchase plan and to reserve 50,000 shares of the
Corporation's Common Stock for issuance thereunder.

3. Such other business as may properly be brought before the Meeting and
any adjournment thereof.

The transfer books of the Corporation will not be closed prior to the
Meeting, but, pursuant to appropriate action by the board of directors, the
record date for the determination of the Stockholders entitled to receive notice
of and to vote at the Meeting is April 3, 1998.

The By-laws require that the holders of a majority of the stock issued and
outstanding and entitled to vote be present or represented by proxy at the
Meeting in order to constitute a quorum for the transaction of business. It is
important that your shares be represented at the Meeting regardless of the
number of shares you may hold. Whether or not you are able to be present in
person, please sign and return promptly the enclosed proxy in the accompanying
envelope, which requires no postage if mailed in the United States.

This Notice, the proxy and proxy statement enclosed herewith are sent to
you by order of the board of directors.

SANDRA L. LAMBERT
Secretary
<PAGE>

PROXY STATEMENT

The enclosed proxy is solicited by the board of directors of Thermo Vision
Corporation (the "Corporation") for use at the 1998 Annual Meeting of the
Stockholders (the "Meeting") to be held on Monday, June 1, 1998, at 9:00 a.m. at
The Hyatt Regency Scottsdale Resort at Gainey Ranch, Scottsdale, Arizona, and
any adjournment thereof. The mailing address of the executive office of the
Corporation is 8 East Forge Parkway, Franklin, Massachusetts 02038. This proxy
statement and the enclosed proxy were first furnished to Stockholders of the
Corporation on or about April 29, 1998.

VOTING PROCEDURES

The board of directors intends to present to the Meeting the election of
five directors, constituting the entire board of directors, as well as one other
matter: a proposal to adopt an employees' stock purchase plan and to reserve
50,000 shares of common stock of the Corporation, $.01 par value, ("Common
Stock") for issuance under the employees' stock purchase plan.

The representation in person or by proxy of a majority of the outstanding
shares of Common Stock entitled to vote at the Meeting is necessary to provide a
quorum for the transaction of business at the Meeting. Shares can only be voted
if the Stockholder is present in person or is represented by returning a
properly signed proxy. Each Stockholder's vote is very important. Whether or not
you plan to attend the Meeting in person, please sign and promptly return the
enclosed proxy card, which requires no postage if mailed in the United States.
All signed and returned proxies will be counted towards establishing a quorum
for the Meeting, regardless of how the shares are voted.

Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on the
proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted for the management nominees for directors,
for the management proposal, and as the individuals named as proxy holders on
the proxy deem advisable on all other matters as may properly come before the
Meeting.

In order to be elected a director, a nominee must receive the affirmative
vote of a majority of the shares of Common Stock present and entitled to vote on
the election. For the management proposal to adopt the employees' stock
purchase plan, the affirmative vote of a majority of shares present in person or
represented by proxy, and entitled to vote on the matter, is necessary for
approval. Withholding authority to vote for a nominee for director or an
instruction to abstain from voting on the management proposal will be treated as
shares present and entitled to vote and, for purposes of determining the outcome
of the vote, will have the same effect as a vote against the nominee or the
proposal. With respect to the election of directors and the management proposal,
broker "non-votes" will not be treated as shares present and entitled to vote on
a voting matter and will have no effect on the outcome of the vote. A broker
"non-vote" occurs when a nominee holding shares for a beneficial holder does not
have discretionary voting power and does not receive voting instructions from
the beneficial owner.

A Stockholder who returns a proxy may revoke it at any time before the
Stockholder's shares are voted at the Meeting by written notice to the Secretary
of the Corporation received prior to the Meeting, by executing and returning a
later-dated proxy or by voting by ballot at the Meeting.

The outstanding stock of the Corporation entitled to vote (excluding shares
held in treasury by the Corporation) as of April 3, 1998, consisted of 8,048,277
shares of Common Stock. Only Stockholders of record at the close of business on
April 3, 1998, are entitled to vote at the Meeting. Each share is entitled to
one vote.

1
<PAGE>

- PROPOSAL 1 -

ELECTION OF DIRECTORS

Five directors are to be elected at the Meeting, each to hold office until
his successor is chosen and qualified or until his earlier resignation, death or
removal.

NOMINEES FOR DIRECTORS

Set forth below are the names of the persons nominated as directors, their
ages, their offices in the Corporation, if any, their principal occupation or
employment for the past five years, the length of their tenure as directors and
the names of other public companies in which such persons hold directorships.
Information regarding their beneficial ownership of the Corporation's Common
Stock and of the common stock of its parent company, Thermo Instrument Systems
Inc. ("Thermo Instrument"), a manufacturer of analytical, environmental-
monitoring and process control instruments, and Thermo Instrument's parent
company, Thermo Electron Corporation ("Thermo Electron"), a provider of
diversified products and services for the biomedical, instrument and
environmental markets, is reported under the caption "Stock Ownership." All of
the nominees are currently directors of the Corporation.

<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
D. ALLAN BROMLEY Dr. Bromley, 72, has been a director of the Corporation since September
1997. Dr. Bromley has been Sterling Professor of the Sciences, Yale
University, since 1993 and has also served as Dean of Engineering at Yale
University since 1994. Prior to 1993, he served as the Henry Ford II
Professor of Physics at Yale University for over 20 years. From 1989 to
1993, he served as the Assistant to the President for Science and
Technology, and Director, Office of Science and Technology Policy of the
Executive Office of the White House.
- -----------------------------------------------------------------------------------------------------------------

ELIAS P. GYFTOPOULOS Dr. Gyftopoulos, 70, has been a director of the Corporation since April,
1998. He is Professor Emeritus of the Massachusetts Institute of
Technology, where he was the Ford Professor of Mechanical Engineering and
of Nuclear Engineering for more than 20 years prior to his retirement in
1996. Dr. Gyftopoulos is also a director of Thermo Cardiosystems Inc.,
Thermo BioAnalysis Corporation, Thermo Electron, ThermoLase Corporation,
Thermo Remediation Inc., ThermoSpectra Corporation, Thermo Voltek Corp. and
Trex Medical Corporation.
- -----------------------------------------------------------------------------------------------------------------
KRISTINE STOTZ LANGDON Ms. Langdon, 39, has been a director of the Corporation as well as its
president and chief executive officer since its inception in November 1995.
She served as president of Thermo Jarrell Ash Corporation, a subsidiary of
Thermo Optek Corporation that manufactures elemental spectrometers, from
January 1996 until October 1996 and served as a vice president of Thermo
Optek from its inception in August 1995 until the Corporation's spinout
from Thermo Optek in December 1997. Ms. Langdon was special assistant to
the presidents of Thermo Electron and Thermo Instrument from August 1991 to
April 1994 and director of business development of Thermo Jarrell Ash
Corporation from April 1994 until being named president and chief executive
officer of the Corporation. From 1987 to 1991, Ms. Langdon was employed by
McKinsey & Co., a management consulting firm, most recently as an
engagement manager.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

2
<PAGE>

<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
EARL R. LEWIS Mr. Lewis, 54, has been a director of the Corporation since its inception
in November 1995. He also served as the president and chief executive
officer of Thermo Instrument since March 1997 and January 1998,
respectively, was chief operating officer of Thermo Instrument from January
1996 to January 1998, was executive vice president of Thermo Instrument
from January 1996 to March 1997, was a senior vice president of Thermo
Instrument from January 1994 to January 1996, and was a vice president of
Thermo Instrument from March 1992 to January 1994. He has been a vice
president of Thermo Electron since September 1996. Prior to Mr. Lewis'
appointment as chief executive officer of Thermo Instrument, he was also
chief executive officer of the Corporation's then parent, Thermo Optek
Corporation, a manufacturer of analytical instruments that measure energy
and light for the purposes of materials analysis, characterization and
preparation from August 1995 until January 1998, and was president of its
predecessor, Thermo Jarrell Ash Corporation, for more than five years prior
to 1995. Mr. Lewis is also a director of Metrika Systems Corporation, ONIX
Systems Inc., Thermo BioAnalysis Corporation, Thermo Instrument, Thermo
Optek Corporation, ThermoQuest Corporation and ThermoSpectra Corporation.
- -----------------------------------------------------------------------------------------------------------------
ARVIN H. SMITH Mr. Smith, 68, has been a director of the Corporation since its inception
in November 1995. Mr. Smith has been the chairman of the board of Thermo
Instrument since March 1997, and previously served as chief executive
officer and president of Thermo Instrument from 1986 to January 1998 and
March 1997, respectively. Mr. Smith is also chairman of the board of
Thermo Power Corporation, a majority-owned subsidiary of Thermo Electron
that manufactures traffic control systems and industrial refrigeration
equipment. Mr. Smith has also been an executive vice president of Thermo
Electron since 1991 and a senior vice president of Thermo Electron from
1986 to 1991. Mr. Smith is also a director of Metrika Systems Corporation,
ONIX Systems Inc., Thermo BioAnalysis Corporation, Thermo Instrument,
Thermo Optek Corporation, Thermo Power Corporation, ThermoQuest Corporation
and ThermoSpectra Corporation.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS

The board of directors has established an audit committee and a human
resources committee, each consisting solely of outside directors. The present
members of the audit committee are Dr. Bromley (Chairman) and Dr. Gyftopoulos.
The audit committee reviews the scope of the audit with the Corporation's
independent public accountants and meets with them for the purpose of reviewing
the results of the audit subsequent to its completion. The present members of
the human resources committee are Dr. Bromley and Dr. Gyftopoulos (Chairman).
The human resources committee reviews the performance of senior members of
management, approves executive compensation and administers the Corporation's
stock option and other stock-based compensation plans. The Corporation does not
have a nominating committee of the board of directors. The board of directors
met once, the audit committee did not meet and the human resources committee met
once during fiscal 1997. Each director attended at least 75% of all meetings of
the board of directors and committees on which he served held during fiscal
1997.

COMPENSATION OF DIRECTORS

CASH COMPENSATION

Directors who are not employees of the Corporation, of Thermo Electron or
of any other companies affiliated with Thermo Electron (also referred to as
"outside directors") receive an annual retainer of $2,000 and a fee of $1,000
per day for attending regular meetings of the board of directors and $500 per
day for participating in meetings of the board of directors held by means of
conference telephone and for participating in certain meetings of committees of
the board of directors. Payment of directors' fees is made quarterly. Ms.
Langdon, Mr. Lewis and

3
<PAGE>

Mr. Smith and all employees of Thermo Electron or its subsidiaries and do not
receive any cash compensation from the Corporation for their services as
directors. Directors are also reimbursed for out-of-pocket expenses incurred in
attending such meetings.

DEFERRED COMPENSATION PLAN

Under the Deferred Compensation Plan for directors (the "Deferred
Compensation Plan"), a director has the right to defer receipt of his cash fees
until he ceases to serve as a director, dies or retires from his principal
occupation. In the event of a change in control or proposed change in control of
the Corporation that is not approved by the board of directors, deferred amounts
become payable immediately. Either of the following is deemed to be a change of
control: (a) the acquisition, without the prior approval of the board of
directors, directly or indirectly, by any person of 50% or more of the
outstanding Common Stock or the outstanding common stock of Thermo Instrument or
25% or more of the outstanding common stock of Thermo Electron; or (b) the
failure of the persons serving on the board of directors immediately prior to
any contested election of directors or any exchange offer or tender offer for
the Common Stock or the common stock of Thermo Instrument or Thermo Electron to
constitute a majority of the board of directors at any time within two years
following any such event. Amounts deferred pursuant to the Deferred Compensation
Plan are valued at the end of each quarter as units of the Corporation's Common
Stock. When payable, amounts deferred may be disbursed solely in shares of
Common Stock accumulated under the Deferred Compensation Plan. A total of 25,000
shares of Common Stock have been reserved for issuance under the Deferred
Compensation Plan. As of March 1, 1998, no deferred units had been accumulated
under the Deferred Compensation Plan.

STOCK-BASED COMPENSATION

Directors of the Corporation are also eligible for the grant of stock
options under the Corporation's equity incentive plan. The equity incentive plan
is administered by the human resources committee of the board of directors,
which determines the form and terms of stock-based awards to be granted. To
date, only nonqualified stock options have been granted under this plan. In
1997, options to purchase 15,000 shares of the Common Stock were granted to each
of the non-executive directors of the Corporation at an exercise price of $7.50
per share. These options may be exercised at any time prior to the expiration of
the option on the seventh anniversary of the grant date. Shares acquired upon
exercise of the options are subject to restrictions on transfer and right of the
Corporation to repurchase such shares at the exercise price if the director
ceases to serve as a director of the Corporation or any other Thermo Electron
company. The restrictions and repurchase rights lapse or are deemed to have
lapsed 20% per year, starting with the first anniversary of the grant date,
provided the director has continuously served as a director of the Corporation
or any other Thermo Electron company since the grant date.

STOCK OWNERSHIP POLICIES FOR DIRECTORS

During 1997, the human resources committee of the board of directors (the
"Committee") established a stock holding policy for directors. The stock
holding policy requires each director to hold a minimum of 1,000 shares of
Common Stock. Directors are requested to achieve this ownership level by the
1999 Annual Meeting of Stockholders. The chief executive officer of the
Corporation is required to comply with a separate stock holding policy
established by the Committee in 1997, which is described in "Committee Report on
Executive Compensation - Stock Ownership Policies."

In addition, the Committee adopted a policy requiring directors to hold
shares of the Corporation's Common Stock equal to one-half of their net option
exercises over a period of five years. The net option exercise is determined by
calculating the number of shares acquired upon exercise of a stock option, after
deducting the number of shares that could have been traded to exercise the
option and the number of shares that could have been surrendered to satisfy tax
withholding obligations attributable to the exercise of the option. This policy
is also applicable to executive officers and is described in "Committee Report
on Executive Compensation - Stock Ownership Policies."

STOCK OWNERSHIP

The following table sets forth the beneficial ownership of Common Stock, as
well as the common stock of Thermo Instrument, the Corporation's parent company,
and of Thermo Electron, Thermo Instrument's parent company, as of March 1, 1998,
with respect to (i) each director, (ii) each executive officer named in the
summary compensation table under the heading "Executive Compensation" and (iii)
all directors and current executive officers as a group. In addition, the
following table sets forth the beneficial ownership of Common Stock, as of March
1, 1998, with respect to each person who was known by the Corporation to own
beneficially more than 5% of the outstanding shares of Common Stock.

While certain directors and executive officers of the Corporation are also
directors and executive officers of Thermo Electron or its subsidiaries other
than the Corporation, all such persons disclaim beneficial ownership of the
shares of common stock beneficially owned by Thermo Electron.

4
<PAGE>

<TABLE>
<CAPTION>
THERMO
THERMO VISION THERMO INSTRUMENT ELECTRON
Name (1) CORPORATION (2) SYSTEMS INC. (3) CORPORATION (4)
- ----------------------------------- ------------------- ----------------------- -------------------
<S> <C> <C> <C>
Thermo Electron Corporation (5) 6,401,984 N/A N/A
D. Allan Bromley 16,000 0 0
Elias P. Gyftopoulos 0 58,766 0
Kristine Stotz Langdon 37,110 6,223 16,452
Earl R. Lewis 31,420 203,726 84,037
Allen J. Smith 15,000 0 0
Arvin H. Smith 16,120 539,583 519,038
All directors and current executive
officers as a group (8 150,850 915,888 1,504,421
persons)
- ----------------------------------------------------------------------------------------------------------
</TABLE>

(1) Except as reflected in the footnotes to this table, shares beneficially
owned consist of shares owned by the indicated person or by that person for
the benefit of minor children, and all share ownership includes sole voting
and investment power.

(2) Shares of the Common Stock beneficially owned by Dr. Bromley, Ms. Langdon,
Mr. Lewis, Mr. A. J. Smith, Mr. A. H. Smith and all directors and current
executive officers as a group include 15,000, 35,000, 25,000, 15,000,
15,000 and 122,000 shares, respectively, that such person or group has the
right to acquire within 60 days of March 1, 1998, through the exercise of
stock options. Shares of the Common Stock beneficially owned by Ms.
Langdon include a total of 2,110 shares held in custodial accounts for the
benefit of two minor children. Shares of the Common Stock beneficially
owned by Mr. Lewis include 450 shares owned by his spouse and a total of
490 shares held by his son. No director or executive officer beneficially
owned more than 1% of the Common Stock outstanding as of March 1, 1998; all
directors and executive officers as a group beneficially owned 1.9% of the
Common Stock outstanding as of such date.

(3) The shares of the common stock of Thermo Instrument shown in the table
reflect a five-for-four split of such stock distributed in October 1997 in
the form of a 25% stock dividend. Shares of the common stock of Thermo
Instrument beneficially owned by Dr. Gyftopoulos, Ms. Langdon, Mr. Lewis,
Mr. A. H. Smith and all directors and current executive officers as a group
include 18,075, 5,858, 172,085, 292,968 and 578,048 shares, respectively,
that such person or group had the right to acquire within 60 days after
March 1, 1998, through the exercise of stock options. Shares of the common
stock of Thermo Instrument beneficially owned by Mr. A. H. Smith and all
directors and current executive officers as a group include 663 and 1,819
shares, respectively, allocated through March 1, 1998, to their respective
accounts maintained pursuant to Thermo Electron's employee stock ownership
plan, of which the trustees, who have investment power over its assets, are
executive officers of Thermo Electron (the "ESOP"). Shares beneficially
owned by Ms. Langdon include 365 shares held in custodial accounts for the
benefit of two minor children. Shares beneficially owned by Mr. Lewis
include 2,987 shares held by Mr. Lewis' spouse. The directors and
executive officers of the Corporation did not individually or as a group
beneficially own more than 1% of the common stock of Thermo Instrument
outstanding as of March 1, 1998.

(4) Shares of the common stock of Thermo Electron beneficially owned by Mr.
Gyftopoulos, Ms. Langdon, Mr. Lewis, Mr. A. H. Smith and all current
directors and executive officers as a group include 10,375, 15,750, 84,037,
228,411 and 1,044,045 shares, respectively, that such person or group has
the right to acquire within 60 days of March 1, 1998, through the exercise
of stock options. Shares of the common stock of Thermo Electron
beneficially owned by Mr. A. H. Smith and all directors and executive
officers as a group include 1,717 and 5,179 full shares, respectively,
allocated to accounts maintained pursuant to the ESOP. Shares beneficially
owned by Ms. Langdon include 702 shares held by her as custodian for two
minor children. No director or executive officer beneficially owned more
than 1% of the common stock of Thermo Electron outstanding as of March 1,
1998; all directors and current executive officers as a group beneficially
owned less than 1% of the Thermo Electron common stock outstanding as of
such date.

5
<PAGE>

(5) As of March 1, 1998, Thermo Electron, primarily through its majority-owned
subsidiary Thermo Instrument, beneficially owned 79.5% of the outstanding
Common Stock. Thermo Electron's address is 81 Wyman Street, Waltham,
Massachusetts 02254-9046. As of March 1, 1998, Thermo Electron had the
power to elect all of the members of the Corporation's board of directors.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and beneficial owners of more
than 10% of the Common Stock, such as Thermo Instrument and its parent company,
Thermo Electron, to file with the Securities and Exchange Commission initial
reports of ownership and periodic reports of changes in ownership of the
Corporation's securities. Based upon a review of such filings, all Section 16(a)
filing requirements applicable to such persons were complied with during 1997,
except in the following instances. Dr. D. Allan Bromley, a director of the
Corporation, filed a Form 4 late reporting one purchase of Common Stock. Mr.
John N. Hatsopoulos, a director and officer of the Corporation, filed a Form 4
late reporting two purchases of Common Stock. Mr. Paul F. Kelleher, an officer
of the Corporation, filed a Form 4 late reporting one purchase of Common Stock.

EXECUTIVE COMPENSATION

NOTE: All share amounts reported below have, in all cases, been adjusted as
applicable to reflect a five-for-four stock split distributed in October 1997
with respect to the common stock of Thermo Instrument in the form of a 25% stock
dividend.

SUMMARY COMPENSATION TABLE

The following table summarizes compensation for services to the Corporation
in all capacities awarded to, earned by or paid to the Corporation's chief
executive officer and its other most highly compensated executive officer for
the last two fiscal years. No other executive officer of the Corporation met
the definition of "highly compensated" within the meaning of the Securities and
Exchange Commission's executive compensation disclosure rules.

The Corporation is required to appoint certain executive officers and full-
time employees of Thermo Electron as executive officers of the Corporation, in
accordance with the Thermo Electron Corporate Charter. The compensation for
these executive officers is determined and paid entirely by Thermo Electron. The
time and effort devoted by these individuals to the Corporation's affairs is
provided to the Corporation under the Corporate Services Agreement between the
Corporation and Thermo Electron. Accordingly, the compensation for these
individuals is not reported in the following table.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------------------
LONG TERM
COMPENSATION
-------------
SECURITIES
UNDERLYING
OPTIONS (NO.
NAME AND FISCAL ANNUAL COMPENSATION OF SHARES ALL OTHER
----------------------
PRINCIPAL POSITION YEAR SALARY BONUS AND COMPANY (1) COMPENSATION (2)
- ------------------- ------ ------------ -------- --------------- ----------------

<S> <C> <C> <C> <C> <C> <C>
Kristine Stotz 1997 $125,000 $57,500 35,000 (VIZ) $5,344
Langdon 1996 $100,000 $40,000 75,000 (TOC) $5,344
President and 5,000 (TMQ)
Chief Executive Officer
- ----------------------------------------------------------------------------------------
Allen J. Smith (3) 1997 $115,000 $40,000 15,000 (VIZ) $5,344
Vice President 1996 $ 98,932 $30,000 22,500 (TOC) $4,073
- ----------------------------------------------------------------------------------------
</TABLE>

(1) Options granted by the Corporation are designated in the table as "VIZ."
In addition, the named executive officers have been granted options to
purchase common stock of Thermo Electron companies from time to time as
part of Thermo Electron's stock option program. Options have been granted
to the named

6
<PAGE>

executive officers during the last two fiscal years in the following Thermo
Electron companies: Thermo Optek Corporation (designated in the table as
TOC), and ThermoQuest Corporation (designated in the table as TMQ).

(2) Represents the amount of matching contributions made by the individual's
employer on behalf of named executive officers participating in the Thermo
Electron 401(k) plan.

(3) Mr. Smith was appointed vice president of the Corporation in August 1997.
He has been chairman of Oriel Corporation, which was acquired by the
Corporation in February 1996, since October 1994. Reported in the table
under "Annual Compensation" and "All Other Compensation" is Mr. Smith's
compensation for fiscal 1996 and 1997 paid by Thermo Optek and the
Corporation subsequent to the acquisition of Oriel in February 1996.

STOCK OPTIONS GRANTED DURING FISCAL 1997

The following table sets forth information concerning individual grants of
stock options made during fiscal 1997 to the Corporation's chief executive
officer and the other named executive officer. It has not been the
Corporation's policy in the past to grant stock appreciation rights, and no such
rights were granted during fiscal 1997.

<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1997
- ----------------------------------------------------------------------------------------------------------------------------------
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL RATES
OF STOCK
PRICE
PERCENT OF APPRECIATION
NUMBER OF TOTAL FOR
SECURITIES OPTIONS OPTION TERM
UNDERLYING GRANTED TO EXERCISE (2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ----------------------------
NAME GRANTED (1) FISCAL YEAR SHARE DATE 5% 10%
- ----------------------- ------------ ----------- ---------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>

Kristine Stotz Langdon 35,000 (VIZ) 15.70% $7.50 12/5/04 $106,750 $249,200
- ----------------------------------------------------------------------------------------------------------------------------------
Allen J. Smith 15,000 (VIZ) 6.70% $7.50 12/5/04 $ 45,750 $106,800
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) All of the options granted during the fiscal year are immediately
exercisable as of the end of the fiscal year. In all cases, the shares
acquired upon exercise are subject to repurchase by the granting
corporation at the exercise price if the optionee ceases to be employed by
such corporation or another Thermo Electron company. The granting
corporation may exercise its repurchase rights within six months after the
termination of the optionee's employment. The repurchase rights generally
lapse ratably over a five- to ten-year period, depending on the option
term, which may vary from seven to twelve years, provided the optionee
continues to be employed by the Corporation or another Thermo Electron
company. The granting corporation may permit the holder of options to
exercise options and to satisfy tax withholding obligations by surrendering
shares equal in fair market value to the exercise price or withholding
obligation.

(2) The amounts shown in this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5%
and 10% compounded annually from the date the respective options were
granted to their expiration date. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other expenses
associated with the exercise. Actual gains, if any, on stock option
exercises will depend on the future performance of the common stock of the
granting corporation, the optionee's continued employment through the
option period and the date on which the options are exercised.

7
<PAGE>

STOCK OPTIONS EXERCISED DURING FISCAL 1997 AND FISCAL YEAR-END VALUES

The following table reports certain information regarding stock option
exercises during fiscal 1997 and outstanding stock options held at the end of
fiscal 1997 by the Corporation's chief executive officer and the other named
executive officers. No stock appreciation rights were exercised or were
outstanding during fiscal 1997.

<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND FISCAL 1997 YEAR-END OPTION VALUES
- -------------------------------------------------------------------------------------------------------------
NUMBER OF
UNEXERCISED
OPTIONS AT
FISCAL VALUE OF
SHARES YEAR-END UNEXERCISED
ACQUIRED ON VALUE (EXERCISABLE/ IN-THE-MONEY
NAME COMPANY EXERCISE REALIZED (1) UNEXERCISABLE) (2) OPTIONS
- -------------------------- ------------- ----------- ------------ ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kristine Stotz Langdon (3) Thermo Vision -- -- 35,000 /-- $ 19,705 /--
Thermo Optek -- -- 75,000 /-- $358,500 /--
ThermoQuest -- -- 5,000 /-- $ 25,000 /--
ThermoSpectra -- -- 400 /-- $ 25 /--
- -------------------------------------------------------------------------------------------------------------
Allen J. Smith Thermo Vision -- -- 15,000 /-- $ 8,445 /--
Thermo Optek -- -- 22,500 /-- $107,550 /--
- -------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Amounts shown in this column do not necessarily represent actual value
realized from the sale of the shares acquired upon exercise of the option
because in many cases the shares are not sold on exercise but continue to
be held by the executive officer exercising the option. The amounts shown
represent the difference between the option exercise price and the market
price on the date of exercise, which is the amount that would have been
realized if the shares had been sold immediately upon exercise.

(2) All of the options reported outstanding at the end of the fiscal year were
immediately exercisable as of the end of the fiscal year. In all cases,
the shares acquired upon exercise of the options reported in the table are
subject to repurchase by the granting corporation at the exercise price if
the optionee ceases to be employed by such corporation or another Thermo
Electron company. The granting corporation may exercise its repurchase
rights within six months after the termination of the optionee's
employment. The repurchase rights generally lapse ratably over a five- to
ten-year period, depending on the option term, which may vary from seven to
twelve years, provided that the optionee continues to be employed by the
Corporation or another Thermo Electron company. The repurchase rights
generally lapse in their entirety on the ninth anniversary of the grant
date. Certain options have three-year terms and the repurchase rights
lapse in their entirety on the second anniversary of the grant date. The
granting corporation may permit the holder of options to exercise
options and to satisfy tax withholding obligations by surrendering shares
equal in fair market value to the exercise price or withholding obligation.

(3) Ms. Langdon became president of the Corporation, then a wholly owned
subsidiary of Thermo Optek Corporation, in January 1995. Prior to that
date, she had been employed by Thermo Electron, and had been granted
options to purchase shares of common stock of Thermo Electron and its
subsidiaries other than the Corporation as compensation for her service to
Thermo Electron. These options are not reported in the table as they were
granted as compensation for service to Thermo Electron companies other than
the Corporation.

COMMITTEE REPORT ON EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

All decisions on compensation for the Corporation's executive officers are
made by the human resources committee of the board of directors (the
"Committee"). In reviewing and establishing total cash compensation and

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stock-based compensation for executives, the Committee follows guidelines
established by the human resources committees of the board of directors of its
parent companies, Thermo Electron and Thermo Instrument. The executive
compensation program presently consists of annual base salary ("salary"), short-
term incentives in the form of annual cash bonuses, and long-term incentives in
the form of stock options (collectively referred to as "total compensation").

The Committee believes that the total compensation of executive officers
should reflect the scope of their responsibilities, the success of the
Corporation, and the contributions of each executive to that success. In
addition, the Committee believes that base salaries should approximate the mid-
point of competitive salaries derived from market surveys and that short-term
and long-term incentive compensation should reflect the performance of the
Corporation and the contributions of each executive.

ESTABLISHING COMPETITIVENESS

External competitiveness is an important element of the Committee's
compensation policy. The competitiveness of the Corporation's total compensation
for its executives is assessed by comparing it to market data provided by
compensation consultants and by participating in annual executive compensation
surveys, primarily "Project 777," an executive compensation survey prepared by
Management Compensation Services, a division of Hewitt Associates. The majority
of firms represented in the Project 777 survey are included in the Standard &
Poor's 500 Index, but do not necessarily correspond to the companies included in
the Corporation's peer group index, the Dow Jones Total Return Index for the
Diversified Technology Industry Group.

Principles of internal equity are also central to the Committee's
compensation policies. Total compensation considered for the Corporation's
officers, whether cash or stock-based incentives, is also evaluated by comparing
it to total compensation of other executives within the Thermo Electron
organization with comparable levels of responsibility for comparably sized
business units.

The process for determining each of these elements for the Corporation's
executive officers is outlined below. For its review of the compensation of
other officers of the Corporation, the Committee follows a substantially similar
process.

BASE SALARY

Base salaries are intended to approximate the mid-point of competitive
salaries for similar organizations of comparable size and complexity to the
Corporation. Executive salaries are adjusted gradually over time and only as
necessary to meet this objective. Increases in base salary may be moderated by
other considerations, such as geographic or regional market data, industry
trends or internal fairness within the Corporation and Thermo Electron. It is
the Committee's intention that over time the base salaries for the chief
executive officer and the other named executive officers will approximate the
mid-point of competitive data. The salary increases in 1997 for the chief
executive officer and the other named executive officers generally reflect this
practice of gradual increases and moderation.

CASH BONUS

The Committee establishes a median potential bonus for each executive by
using the market data on total cash compensation from the same executive
compensation surveys as used to determine salaries. Specifically, the median
potential bonus plus the salary of an executive officer is approximately equal
to the mid-point of competitive total cash compensation for a similar position
and level of responsibility in businesses having comparable sales and complexity
to the Corporation. The actual bonus awarded to an executive officer may range
from zero to three times the median potential bonus. The value within the range
(the bonus multiplier) is determined at the end of each year by the Committee in
its discretion. The Committee exercises its discretion by evaluating each
executive's performance using a methodology developed by its parent company,
Thermo Electron, and applied throughout the Thermo Electron organization. The
methodology incorporates measures of operating returns which are designed to
measure profitability and contributions to shareholder value and are measures of
corporate and divisional performance that are evaluated using graphs developed
by Thermo Electron intended to reward performance that is perceived as above
average and to penalize performance that is perceived as below average. The
measures of

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<PAGE>

operating returns used in the Committee's determinations in fiscal
1997 measured return on net assets, growth in income, and return on sales, and
the Committee's determinations also included a subjective evaluation of the
contributions of each executive that are not captured by operating measures but
are considered important to the creation of long-term value for the
Stockholders. These measures of achievements are not financial targets that are
met, not met or exceeded. The relative weighting of the operating measures and
subjective evaluation varies among the executives, depending on their roles and
responsibilities within the organization.

The bonuses for named executive officers approved by the Committee with
respect to fiscal 1997 performance in each instance exceeded the median
potential bonus.

STOCK OPTION PROGRAM

The primary goal of the Corporation and its parent companies is to excel in
the creation of long-term value for the Stockholders. The principal incentive
tool used to achieve this goal is the periodic award to key employees of options
to purchase common stock of the Corporation and other Thermo Electron companies.

The Committee and management believe that awards of stock options to
purchase the shares of both the Corporation and other companies within the
Thermo Electron group of companies accomplish many objectives. The grant of
options to key employees encourages equity ownership in the Corporation, and
closely aligns management's interests to the interests of all the Stockholders.
The emphasis on stock options also results in management's compensation being
closely linked to stock performance. In addition, because they are subject to
vesting periods of varying durations and to forfeiture if the employee leaves
the Corporation prematurely, stock options are an incentive for key employees to
remain with the Corporation long-term. The Committee believes stock option
awards in its parent companies, Thermo Electron and Thermo Instrument, and the
other majority-owned subsidiaries of Thermo Electron and Thermo Instrument, are
an important tool in providing incentives for performance within the entire
organization.

In determining awards, the Committee considers for each officer the annual
value of all options to purchase shares of the Corporation and other companies
within the Thermo Electron organization that vest in the next year and compares
the individual's total compensation using this value to competitive data. The
Committee uses a modified Black-Scholes option pricing model to determine the
value of an option award. In addition, the Committee considers the aggregate
amount of net awards to purchase shares of Common Stock granted to all employees
over the last five years to monitor the number of aggregate awards to all
employees. In reviewing the aggregate number of awards, the Committee considers
such factors as the size of the company, its stage of development, and its
growth strategy, as well as the aggregate awards and option practices of
comparably situated companies.

The Committee periodically awards options based on its assessment of the
total compensation of each executive, the actual and anticipated contributions
of each executive (which includes a subjective assessment by the Committee of
the value of the executive's future potential within the organization), as well
as the value of previously awarded options, as described above. Such
discretionary awards of options to purchase the Common Stock were made by the
Committee in 1997 to the named executive officers in connection with the
Corporation's spinoff as a public company.

STOCK OWNERSHIP POLICIES

The Committee established a stock holding policy for the chief executive
officer of the Corporation in 1998 that required the chief executive officer to
own a multiple of her compensation in shares of the Corporation's Common Stock.
The multiple is one times her base salary and reference bonus for the calendar
year. The Committee deemed it appropriate to permit the chief executive officer
to achieve this ownership level over a three-year period.

In order to assist the chief executive officer in complying with the
policy, the Committee also adopted in 1998 a stock holding assistance plan under
which the Corporation is authorized to make interest-free loans to the chief
executive officer to enable her to purchase shares of the Common Stock in the
open market. The loans are required to be repaid upon the earlier of demand or
the fifth anniversary of the date of the loan, unless otherwise authorized by
the Committee. No loans were outstanding under this program in fiscal 1998.
See "Relationship with Affiliates - Stock Holding Assistance Plan."

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<PAGE>

The Committee also has adopted a policy requiring its executive officers to
hold shares of the Corporation's Common Stock acquired upon the exercise of
stock options granted by the Corporation. Under this policy, executive officers
are required to hold one-half of their net option exercises over a period of
five years. The net option exercise is determined by calculating the number of
shares acquired upon exercise of a stock option, after deducting the number of
shares that could have been traded to exercise the option and the number of
shares that could have been surrendered to satisfy tax withholding obligations
attributable to the exercise of the options.

POLICY ON DEDUCTIBILITY OF COMPENSATION

The Committee has also considered the application of Section 162(m) of the
Internal Revenue Code to the Corporation's compensation practices. Section
162(m) limits the tax deduction available to public companies for annual
compensation paid to senior executives in excess of $1 million unless the
compensation qualifies as "performance-based" or is otherwise exempt under
Section 162(m). The annual compensation paid to individual executives does not
approach the $1 million threshold, and it is believed that stock incentive plans
of the Corporation qualify as "performance-based." Therefore, the Committee does
not believe any further action is necessary in order to comply with Section
162(m). From time to time, the Committee will reexamine the Corporation's
compensation practices and the effect of Section 162(m).

1997 CEO COMPENSATION

The salary and bonus of Ms. Langdon are established using the same criteria
as for the salaries and bonuses of the Corporation's other named executive
officers. In determining Ms. Langdon's compensation as reported, the Committee
considered as part of its subjective evaluation, among other things, her
contributions in obtaining a favorable private letter ruling form the Internal
Revenue Service as to the qualification of the Corporation's spinoff from Thermo
Optek as a "tax-free" spinoff, enabling the Corporation to become a publicly
traded company, as well as the completion of several strategic acquisitions
during the fiscal year.

The Committee awarded to Ms. Langdon options to purchase 35,000 shares of
the Common Stock in fiscal 1997. This award was determined in a manner
consistent with awards to other officers, as described above under the caption
"Stock Option Program." In addition to stock option awards by the Committee,
Ms. Langdon may receive awards to purchase shares of the common stock of
majority-owned subsidiaries of Thermo Electron from time to time as part of
Thermo Electron's stock option program due to her position as a chief executive
officer of a majority-owned subsidiary of Thermo Electron. No awards of options
to purchase shares of common stock were made to Ms. Langdon under this program
in fiscal 1997.

Dr. Elias P. Gyftopoulos (Chairman)
Dr. D. Allan Bromley

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COMPARATIVE PERFORMANCE GRAPH

The Securities and Exchange Commission requires that the Corporation
include in this proxy statement a line-graph presentation comparing cumulative,
five-year shareholder returns for the Corporation's Common Stock with a broad-
based market index and either a nationally recognized industry standard or an
index of peer companies selected by the Corporation. The Corporation's Common
Stock has been publicly traded only since December 10, 1997 and, as a result,
the following graph commences as of such date. The Corporation has compared its
performance with the American Stock Exchange Market Value Index and the Dow
Jones Total Return Index for the Diversified Technology Industry Group as of the
last trading day of the Corporation's fiscal year.

COMPARISON OF TOTAL RETURN AMONG THERMO VISION CORPORATION,
THE AMERICAN STOCK EXCHANGE COMPOSITE INDEX AND THE DOW JONES TOTAL RETURN INDEX
FOR THE DIVERSIFIED TECHNOLOGY INDUSTRY GROUP FROM DECEMBER 10, 1997 TO JANUARY
2, 1998

[GRAPH APPEARS HERE]

The total return for the Corporation's Common Stock (VIZ), the American
Stock Exchange Composite Index (AMEX COMP.) and the Dow Jones Total Return Index
for the Diversified Technology Industry Group (DJ DTC) assumes the reinvestment
of dividends, although dividends have not been declared on the Corporation's
Common Stock. The American Stock Exchange Composite Index tracks the aggregate
performance of equity securities of companies listed on the American Stock
Exchange. The Corporation's Common Stock is traded on the American Stock
Exchange under the ticker symbol "VIZ."

RELATIONSHIP WITH AFFILIATES

Thermo Electron has adopted a strategy of selling a minority interest in
subsidiary companies to outside investors as an important tool in its future
development. As part of this strategy, Thermo Electron and certain of its
subsidiaries have created several privately and publicly held subsidiaries, and
Thermo Instrument has created the Corporation and other publicly held, majority-
owned subsidiaries and privately held majority-owned subsidiaries. From time to
time, Thermo Electron and its subsidiaries will create other majority-owned
subsidiaries as part of its spinout strategy. (The Corporation and such other
majority-owned Thermo Electron subsidiaries are hereinafter referred to as the
"Thermo Subsidiaries.")

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<PAGE>

Thermo Electron and each of the Thermo Subsidiaries recognize that the
benefits and support that derive from their affiliation are essential elements
of their individual performance. Accordingly, Thermo Electron and each of the
Thermo Subsidiaries, including the Corporation, have adopted the Thermo Electron
Corporate Charter (the "Charter") to define the relationships and delineate the
nature of such cooperation among themselves. The purpose of the Charter is to
ensure that (1) all of the companies and their stockholders are treated
consistently and fairly, (2) the scope and nature of the cooperation among the
companies, and each company's responsibilities, are adequately defined, (3) each
company has access to the combined resources and financial, managerial and
technological strengths of the others, and (4) Thermo Electron and the Thermo
Subsidiaries, in the aggregate, are able to obtain the most favorable terms from
outside parties.

To achieve these ends, the Charter identifies the general principles to be
followed by the companies, addresses the role and responsibilities of the
management of each company, provides for the sharing of group resources by the
companies and provides for centralized administrative, banking and credit
services to be performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by members, coordinating
the access of Thermo Electron and the Thermo Subsidiaries (the "Thermo Group")
to external financing sources, ensuring compliance with external financial
covenants and internal financial policies, assisting in the formulation of long-
range planning and providing other banking and credit services. Pursuant to the
Charter, Thermo Electron may also provide guarantees of debt or other
obligations of the Thermo Subsidiaries or may obtain external financing at the
parent level for the benefit of the Thermo Subsidiaries. In certain instances,
the Thermo Subsidiaries may provide credit support to, or on behalf of, the
consolidated entity or may obtain financing directly from external financing
sources. Under the Charter, Thermo Electron is responsible for determining that
the Thermo Group remains in compliance with all covenants imposed by external
financing sources, including covenants related to borrowings of Thermo Electron
or other members of the Thermo Group, and for apportioning such constraints
within the Thermo Group. In addition, Thermo Electron establishes certain
internal policies and procedures applicable to members of the Thermo Group. The
cost of the services provided by Thermo Electron to the Thermo Subsidiaries is
covered under existing corporate services agreements between Thermo Electron and
each of the Thermo Subsidiaries.

The Charter presently provides that it shall continue in effect so long as
Thermo Electron and at least one Thermo Subsidiary participate. The Charter may
be amended at any time by agreement of the participants. Any Thermo Subsidiary,
including the Corporation, can withdraw from participation in the Charter upon
30 days' prior notice. In addition, Thermo Electron may terminate a subsidiary's
participation in the Charter in the event the subsidiary ceases to be controlled
by Thermo Electron or ceases to comply with the Charter or the policies and
procedures applicable to the Thermo Group. A withdrawal from the Charter
automatically terminates the corporate services agreement and tax allocation
agreement (if any) in effect between the withdrawing company and Thermo
Electron. The withdrawal from participation does not terminate outstanding
commitments to third parties made by the withdrawing company, or by Thermo
Electron or other members of the Thermo Group, prior to the withdrawal. In
addition, a withdrawing company is required to continue to comply with all
policies and procedures applicable to the Thermo Group and to provide certain
administrative functions mandated by Thermo Electron so long as the withdrawing
company is controlled by or affiliated with Thermo Electron.

As provided in the Charter, the Corporation and Thermo Electron have
entered into a Corporate Services Agreement (the "Services Agreement") under
which Thermo Electron's corporate staff provides certain administrative
services, including certain legal advice and services, risk management, employee
benefit administration, tax advice and preparation of tax returns, centralized
cash management and certain financial and other services to the Corporation. The
Corporation was assessed an annual fee equal to 1.0% of the Corporation's
revenues for these services in fiscal 1996 and 1997. The annual fee has been
reduced to 0.8% of the Corporation's total revenues for fiscal 1998. The fee is
reviewed annually and may be changed by mutual agreement of the Corporation and
Thermo Electron. During fiscal 1997, Thermo Electron assessed the Corporation
$397,000 in fees under the Services Agreement. Management believes that the
charges under the Services Agreement are reasonable and that the terms of the
Services Agreement are fair to the Corporation. For items such as employee
benefit plans, insurance coverage and other identifiable costs, Thermo Electron
charges the Corporation based on charges attributable to the Corporation. The
Services Agreement automatically renews for successive one-year terms, unless
canceled by the Corporation upon 30 days' prior notice. In addition, the
Services Agreement terminates automatically in the event the Corporation ceases
to be a member of the Thermo Group or ceases to be a participant in the Charter.
In the event of a termination of the Services Agreement, the Corporation will be
required to pay a

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<PAGE>

termination fee equal to the fee that was paid by the Corporation for services
under the Services Agreement for the nine-month period prior to termination.
Following termination, Thermo Electron may provide certain administrative
services on an as-requested basis by the Corporation or as required in order to
meet the Corporation's obligations under Thermo Electron's policies and
procedures. Thermo Electron will charge the Corporation a fee equal to the
market rate for comparable services if such services are provided to the
Corporation following termination.

The Corporation has entered into a Tax Allocation Agreement with Thermo
Electron which outlines the terms under which the Corporation will be included
in Thermo Electron's consolidated Federal and state income tax returns. Under
current law, the Corporation will be included in such tax returns so long as
Thermo Electron owns at least 80% of the outstanding common stock of Thermo
Instrument and Thermo Instrument owns at least 80% of the outstanding Common
Stock of the Corporation. In years in which the Corporation has taxable income,
it will pay to Thermo Electron amounts comparable to the taxes the Corporation
would have paid if it had filed its own separate company tax returns. If Thermo
Instrument's equity ownership of the Corporation drops below 80%, as it did in
fiscal 1997, the Corporation will file its own tax returns.

In August 1997, the Corporation's Hilger subsidiary purchased the crystal-
materials business of Hilger Analytical, a wholly owned subsidiary of Thermo
Optek Corporation in consideration for the assumption by the Corporation of
$908,000 of Thermo Optek's existing obligation under a line of credit. The
weighted average interest rate for these borrowings in fiscal 1997 was 8%.

In February 1997, in connection with its acquisition of LSI, the
Corporation borrowed $3.6 million from Thermo Optek pursuant to a promissory
note. In June 1997, the Corporation borrowed an additional $347,000 from Thermo
Optek pursuant to a promissory note in order to finance the renovation of its
Franklin Massachusetts facility in connection with the LSI acquisition. In July
1997, in connection with its acquisition of Centro Vision, Inc. the Corporation
borrowed $3.8 million from Thermo Electron pursuant to a promissory note. Each
of these notes bears interest at the 90-day Commercial Paper Composite Rate plus
25 basis points, set at the beginning of each quarter and has a term of
approximately three years. The interest rate for these notes as of the end of
fiscal 1997 was 5.76%.

As of January 3, 1998, the Corporation owed Thermo Electron and its other
subsidiaries an aggregate of $177,000 for amounts due under the Corporate
Services Agreement and related administrative charges, the Tax Allocation
Agreement, for other products and services, and for miscellaneous items,
excluding loans described above, net of amounts owed to the Corporation by
Thermo Electron and its other subsidiaries for products and services and
miscellaneous items. The largest amount of net indebtedness owed by the
Corporation to Thermo Electron and its other subsidiaries since January 1, 1997
was $177,000. These amounts do not bear interest and are expected to be paid in
the normal course of business.

The Corporation and Thermo Optek are parties to a CID Contract R&D
Agreement pursuant to which Thermo Optek has contracted with the Corporation to
develop certain CID sensors and systems for use in optical spectroscopy products
manufactured and sold by Thermo Optek. Under the CID Contract R&D Agreement,
Thermo Optek owns the resulting technology. Thermo Optek has granted the
Corporation an exclusive, perpetual, fully paid license to such technology in
all fields other than optical spectroscopy. The CID Contract R&D Agreement
expired in November 1997. In fiscal 1997, Thermo Optek paid approximately
$80,000 for research and development services performed by the Corporation in
connection with CID sensors and systems.

The Corporation and Thermo Optek are also parties to a Supply Agreement
(the "CID Supply Agreement") pursuant to which the Corporation has agreed to
supply Thermo Optek with, and Thermo Optek has agreed to purchase from the
Corporation, all of Thermo Optek's requirements for CID sensors for use in
Thermo Optek's optical spectrometers. Under the CID Supply Agreement, the
Corporation is not permitted to sell CID sensors to any other manufacturer of
optical spectrometers. The CID Supply Agreement expires in 2007. In fiscal
1997, the Corporation sold approximately $900,000 of products under the CID
Supply Agreement, including those amounts sold under the CID Supply Agreement.

The Corporation has leased its office and manufacturing space in Franklin,
Massachusetts from Thermo Instrument since March 1996. The Corporation's rent
expense under this lease is determined on the basis of its

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<PAGE>

allocated share of total occupancy expenses. The Corporation made lease payments
to Thermo Instrument in fiscal 1997 of $187,000. This lease expires in 2006.

The Corporation's Hilger subsidiary leases its office and manufacturing
space in Margate, England, from Thermo Optek. Through August 1997, the
Corporation's rent expense under this lease was determined on the basis of its
allocated share of total occupancy expenses. The Corporation made lease
payments to a subsidiary of Thermo Instrument in fiscal 1997 of $51,000.
Effective in fiscal 1998, Hilger is leasing this space from Thermo Optek for an
annual rental fee of $45,000, plus its pro rata share of certain related
expenses. The Hilger lease expires in 2002.

In fiscal 1997, the Corporation sold a total of $2,013,000 products to
Thermo Electron subsidiaries and purchased a total of $443,000 of products from
such companies.

The Corporation, along with certain other Thermo Subsidiaries, participates
in a notional pool arrangement with Barclays Bank, which includes a $150 million
credit faciltiy. Only European-based Thermo Subsidiaries participate in this
arrangement. Under this arrangement the Bank notionally combines the positive
and negative cash balances held by the participants to calculate the net
interest yield/expense for the group. The benefit derived from this arrangement
is then allocated based on balances attributable to the respective participants.
Thermo Electron guarantees all of the obligations of each participant in this
arrangement. In addition, funds on deposit under this arrangement provide
credit support for overdraft obligations of other participants. As of January
3, 1998, the Corporation had a negative cash balance of approximately
$674,428, based on an exchange rate of $1.65/(Pounds)1.00 as of January 3,
1998. For 1997, the average interest rate earned on GBP deposits by
participants in this credit arrangement was approximately 6.5% and the average
annual interest rate paid on overdrafts was approximately 7.2%.

As of January 3, 1998, $9,410,000 of the Corporation's cash equivalents
were invested in a repurchase agreement with Thermo Electron, pursuant to which
the Corporation in effect lends cash to Thermo Electron, which Thermo Electron
collateralizes with investments principally consisting of corporate notes, U.S.
government agency securities, money market funds, commercial paper, and other
marketable securities, in the amount of at least 103% of such obligation. The
Corporation's funds subject to the repurchase agreement will be readily
convertible into cash by the Corporation and have an original maturity of three
months or less. The repurchase agreement earns a rate based on the 90-day
Commercial Paper Composite Rate plus 25 basis points, set at the beginning of
each quarter.

STOCK HOLDING ASSISTANCE PLAN

In 1998, the Corporation adopted a stock holding policy which requires its
chief executive officer to acquire and hold a minimum number of shares of Common
Stock. In order to assist the chief executive officer in complying with the
policy, the Corporation also adopted a stock holding assistance plan under which
it may make interest-free loans to the chief executive officer, to enable such
employee to purchase the Common Stock in the open market. The loans are
repayable upon the earlier of demand or the fifth anniversary of the date of the
loan, unless otherwise authorized by the human resources committee of the
Corporation's board of directors. No such loans are currently outstanding under
the plan.

--PROPOSAL 2--

PROPOSAL TO ADOPT AN EMPLOYEES' STOCK PURCHASE PLAN

The board of directors has approved an employees' stock purchase plan (the
"Stock Purchase Plan") and reserved 50,000 shares of the Corporation's Common
Stock for issuance thereunder, subject to Stockholder approval. The board of
directors is recommending that the Stockholders approve the Stock Purchase Plan
and the reservation of shares at this Meeting. The purpose of the Stock
Purchase Plan is to grant options to purchase shares of Common Stock of the
Corporation to eligible employees of the Corporation. The board of directors
believes that the Stock Purchase Plan is an important incentive in attracting
and retaining key personnel, and motivating individuals to contribute
significantly to the Corporation's future growth and success, and in aligning
the long-term

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<PAGE>

interest of these individuals with those of the Corporation's Stockholders.
Accordingly, the board of directors acted to adopt the Stock Purchase Plan
subject to Stockholder approval.

SUMMARY OF THE STOCK PURCHASE PLAN

The full text of the Stock Purchase Plan is set forth in Attachment A to
this proxy statement. A description of the principal features of the Stock
Purchase Plan follows, but it is qualified in its entirety by reference to the
full text.

PARTICIPATION; ADMINISTRATION

All full-time employees and part-time employees working at least 20 hours
per week and who have been employed for at least six months by the Corporation
are eligible to participate in the Stock Purchase Plan, unless they own more
than 5% of the Common Stock of the Corporation. At the present time, only
employees of U.S.-based subsidiaries of the Corporation are eligible to
participate in the plan. For purposes of determining the term of employment,
employees are credited with years of continuous employment with Thermo Electron
or its other subsidiaries immediately prior to joining the Corporation. Options
to purchase shares of Common Stock of the Corporation may be granted from time
to time at the discretion of the board of directors, which also determines the
date upon which such options are exercisable. The number of employees
potentially eligible to participate in the Stock Purchase Plan is approximately
230 persons.

CONTRIBUTIONS

A participating employee may purchase stock only through payroll
deductions. Eligible employees are also permitted to participate in the Thermo
Electron employees' stock purchase plan, which has substantially the same terms
as the Stock Purchase Plan. The aggregate amount which may be contributed under
the Thermo Electron employees' stock purchase plan and the Corporation's Stock
Purchase Plan may not exceed 10% of the employee's gross salary or wages during
the year. The board of directors may fix the aggregate amount that may be
contributed to the Stock Purchase Plan each year in its discretion within such
limitation. Employees are allowed to decrease, but not increase, the percentage
of wages contributed once during the Stock Purchase Plan year. An employee may
suspend his or her contributions, but then is not permitted to contribute again
for the remainder of the Stock Purchase Plan year.

TERMS OF OPTIONS

The exercise price is fixed on the grant date and is 95% of the fair market
value for the Common Stock on such date. On the exercise date, participants may
elect to use their accumulated payroll deductions to purchase shares at the
exercise price. Participants must agree not to resell the shares so purchased
for a period of six months following the exercise date. The options are
nontransferable, and except in the case of death of the employee, may not be
exercised if the employee is not still employed by the Corporation at the
exercise date. If an employee dies, his or her beneficiary may withdraw the
accumulated payroll deduction or use such deductions to purchase shares on the
exercise date. A participant may elect to discontinue participation at any time
prior to the exercise date and to have his or her accumulated payroll deduction
refunded together with interest on such amount as fixed by the board of
directors from time to time.

SHARES SUBJECT TO THE STOCK PURCHASE PLAN

The number of shares that are reserved for issuance under the Stock
Purchase Plan will be 50,000 shares of the Corporation's Common Stock, subject
to adjustment for stock splits and similar events. The proceeds received by the
Corporation from exercise under the Stock Purchase Plan will be used for the
general purposes of the Corporation. Shares issued under the Stock Purchase
Plan may be authorized but unissued or shares reacquired by the Corporation and
held in its treasury.

AMENDMENT AND TERMINATION

The Stock Purchase Plan shall remain in full force and effect until
suspended or discontinued by the board of directors. The board of directors may
at any time or times amend or review the Stock Purchase Plan for any purpose
which may at any time be permitted by law, or may at any time terminate the
Stock Purchase Plan, provided

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<PAGE>

that no amendment that is not approved by the Stockholders shall be effective if
it would cause the Stock Purchase Plan to fail to satisfy the requirements of
Rule 16b-3 (or any successor rule) of the Securities Exchange Act of 1934, as
amended. No amendment of the Stock Purchase Plan may adversely affect the rights
of any recipient of any option previously granted without such recipient's
consent.

EFFECTIVE DATE OF THE STOCK PURCHASE PLAN

The Stock Purchase Plan will become effective as of November 1, 1998,
provided that it is approved by the Stockholders at this Meeting.

FEDERAL INCOME TAX ASPECTS

Federal income tax is not imposed upon an employee in the year an option is
granted or the year the shares are purchased pursuant to the exercise of the
option granted under the Stock Purchase Plan. Federal income tax generally is
imposed upon an employee when he or she sells or otherwise disposes of the
shares acquired pursuant to the Stock Purchase Plan. When an employee sells or
disposes of the shares, if such sale or disposition occurs more than two years
from the grant date and more than one year from the exercise date, then Federal
income tax assessed at ordinary rates will be imposed upon the amount by which
the fair market value of the shares on the date of grant or disposition,
whichever is less, exceeds the amount paid for the shares. In addition, the
difference between the amount received by the employee at the time of sale and
the employee's tax basis in the shares, which is equal to the amount paid on
exercise of the option plus the amount recognized as ordinary income, will be
recognized as a capital gain or loss. The Corporation will not be allowed a
deduction under these circumstances for Federal income tax purposes. If the
employee sells or disposes of the shares sooner than two years from the grant
date or one year from the exercise date, then the employee's entire gain (the
difference between the fair market value at disposition and the amount paid for
the shares) will be taxed as ordinary income, and the Corporation would be
entitled to a deduction equal to that amount.

The closing price per share on the American Stock Exchange of the Common
Stock on April 22, 1997 was $7.38.

RECOMMENDATION

The board of directors believes that adoption of the Stock Purchase Plan
and the reservation of shares thereunder is important for the Corporation to
attract and retain key employees and to be able to continue to offer them the
opportunity to participate in the ownership and growth of the Corporation
through an employees' stock purchase plan. In addition, the board of directors
believes the Stock Purchase Plan is in the best interest of the Corporation and
its Stockholders and recommends that the Stockholders vote FOR the approval of
the Stock Purchase Plan and the reservation of 50,000 shares of Common Stock
thereunder. Thermo Electron, through its majority-owned subsidiary Thermo
Instrument, beneficially owned of record approximately 79.5% of the outstanding
voting stock of the Corporation on April 3, 1998, has indicated its intention to
vote for the proposal.

The affirmative vote of a majority of the Common Stock present and entitled
to vote on this proposal is required to approve the adoption of the Stock
Purchase Plan and the reservation of 50,000 shares of Common Stock thereunder.
The board of directors believes that the adoption of the Stock Purchase Plan is
in the best interest of the Corporation and its Stockholders and recommends that
you vote FOR approval of the Stock Purchase Plan and the reservation of the
shares. If not otherwise specified, proxies will be voted FOR approval of this
proposal.

APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The board of directors has appointed Arthur Andersen LLP as independent
public accountants for fiscal 1998. Arthur Andersen LLP has acted as independent
public accountants for the Corporation since its inception in 1995.
Representatives of that firm are expected to be present at the Meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to questions. The board of directors has established an
audit committee, presently consisting of two outside directors, the purpose of
which is to review the scope and results of the audit.

<PAGE>

OTHER ACTION

Management is not aware at this time of any other matters that will be
presented for action at the Meeting. Should any such matters be presented, the
proxies grant power to the proxy holders to vote shares represented by the
proxies in the discretion of such proxy holders.

STOCKHOLDER PROPOSALS

Proposals of Stockholders intended to be presented at the 1999 Annual
Meeting of the Stockholders of the Corporation must be received by the
Corporation for inclusion in the proxy statement and form of proxy relating to
that meeting no later than December 29, 1998.

SOLICITATION STATEMENT

The cost of this solicitation of proxies will be borne by the Corporation.
Solicitation will be made primarily by mail, but regular employees of the
Corporation may solicit proxies personally or by telephone, facsimile
transmission or telegram. Brokers, nominees, custodians and fiduciaries are
requested to forward solicitation materials to obtain voting instructions from
beneficial owners of stock registered in their names, and the Corporation will
reimburse such parties for their reasonable charges and expenses in connection
therewith.

Franklin, Massachusetts
April 23, 1998

18
<PAGE>

ATTACHMENT A

THERMO VISION CORPORATION

EMPLOYEES' STOCK PURCHASE PLAN

1. DEFINITIONS. As used in this Employees' Stock Purchase Plan of Thermo
-----------
Vision Corporation, the following terms shall have the meanings
respectively assigned to them below:

(a) BASE COMPENSATION means annual or annualized base compensation,
exclusive of overtime, bonuses, contributions to employee benefit
plans, or other fringe benefits, sales commissions, moving expense
reimbursements or other special payments.

(b) BENEFICIARY means the person designated as beneficiary on the
Participant's Membership Agreement or, if no such beneficiary is
named, the person to whom the Option is transferred by will or under
the applicable laws of descent and distribution.

(d) CODE means the Internal Revenue Code of 1986, as amended.

(e) COMPANY MEANS Thermo Vision Corporation, a Delaware corporation.

(f) COMPANY STOCK means the common stock, $.01 par value, of the Company.

(g) ELIGIBLE EMPLOYEE means any U.S.-based employee of the Corporation who
is eligible under the provisions of Section 7 to receive an Option as
of a particular Grant Date.

(h) ENROLLMENT AGREEMENT means an agreement whereby a Participant
authorizes the Company to withhold payroll deductions from his or her
Gross Compensation.

(i) EXERCISE DATE means a date not more than one year after a Grant Date,
as determined by the Board, on which Options must be exercised by
Eligible Employees.

(j) GRANT DATE means a date specified by the Board on which Options are to
be granted to Eligible Employees.

(k) GROSS COMPENSATION means Base Compensation plus sales commissions,
overtime pay and cash bonuses.

(l) MARKET VALUE means, as of a particular date, the last sale price of
the Company Stock if such stock is reported on the American Stock
Exchange, or if not so reported, the average of bid and asked prices
of the Company Stock last quoted by NASDAQ in the over-the-counter
market on such date, as the case may be.

(m) OPTION means an option to purchase shares of Stock granted under the
Plan.

(n) OPTION SHARES means shares of Stock purchasable under an Option, which
shares may not be transferred by the Participant until at least six
months after the Exercise Date.

1
<PAGE>

(o) PARTICIPANT means an Eligible Employee to whom an Option is granted
and who authorizes the Company to withhold payroll deductions by
completing an Enrollment Agreement.

(p) PLAN means this Employees' Stock Purchase Plan of the Company, as
amended from time to time.

(q) RELATED CORPORATION means any corporation which is a parent
corporation of the Company, as defined in Section 425(e) of the Code,
and any corporation controlled by that parent corporation or the
Company.

(r) RULE 16B-3 means Rule 16b-3 and any successor rule promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended.

(s) SECTION 423 means Section 423 of the Code.

2. PURPOSE OF THE PLAN. The Plan is intended to encourage ownership of
-------------------
Company Stock by employees of the Company and to provide additional
incentive for the employees to promote the success of the business of the
Company. It is intended that the Plan shall be an "employee stock purchase
plan" within the meaning of Section 423.

3. TERM OF THE PLAN. The Plan shall become effective on November 1, 1998. No
----------------
option shall be granted under the Plan after November 2, 2008.

4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board,
--------------------------
which annually shall determine whether to grant Options under the Plan,
shall specify which dates shall be Grant Dates and Exercise Dates, and
shall fix the respective maximum percentages of each Participant's Gross
Compensation which may be withheld for the purpose of purchasing shares of
Company Stock; provided, that, the maximum aggregate percentage of each
--------
Participant's Gross Compensation which may be withheld for the purpose of
purchasing shares of stock under this Plan and all other employees stock
purchase plans (as defined in Section 423(b) of the Code) administered by a
Related Corporation and in which Eligible Employees may participate shall
not exceed ten percent of the Participant's Gross Compensation. The Board
shall have authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the terms of
Options granted under the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan.

The Board may appoint a committee, consisting of "non-employee directors"
as defined in Rule 16b-3, to administer the Plan and may, in its sole and
absolute discretion, delegate any or all of the functions specified herein
regarding administration of the Plan to such committee.

5. TERMINATION AND AMENDMENT OF PLAN. The Board may terminate or amend the
---------------------------------
Plan at any time; provided, however, that no amendment, unless approved by
the holders of a majority of the issued and outstanding shares of Company
Stock shall be effective if it would cause the Plan to fail to satisfy the
requirements of Rule 16b-3. No termination of or amendment to the Plan may
adversely affect the rights of a Participant with respect to any Option
held by the Participant as of the date of such termination or amendment.

6. SHARES OF STOCK SUBJECT TO THE PLAN. No more than an aggregate of 50,000
-----------------------------------
shares of Company Stock may be issued or delivered pursuant to the exercise
of Options granted under the Plan, subject to adjustments made in
accordance with Section 9.8. Option Shares may be either shares of Company
Stock which are authorized but unissued or shares of Company Stock held by
the Company in its treasury. If an Option expires or terminates for any
reason without having been exercised in full, the unpurchased Option Shares
shall become available for other Options granted under the Plan. The
Company shall, at all times during which Options are outstanding, reserve
and keep available shares of Company Stock sufficient to satisfy such
Options, and shall pay all fees and expenses incurred by the Company in
connection therewith. In the event of any capital change in the outstanding
Company Stock as contemplated by Section 9.8, the number of shares of
Company Stock reserved and kept available by the Company shall be
appropriately adjusted.

2
<PAGE>

7. PERSONS ELIGIBLE TO RECEIVE OPTIONS. Each employee of the Company shall be
-----------------------------------
granted an Option on each Grant Date on which such employee meets all of
the following requirements:

(a) The employee has completed at least six months of continuous employment for
the Company or a Related Corporation. Employment shall include any leave
of absence for military service, illness or other bona fide purpose which
does not exceed the longer of 90 days or the period during which the absent
employee's reemployment rights are guaranteed by statute or contract.

(b) The employee is customarily employed by the Company for more than 20 hours
per week and for more than five months per calendar year.

(c) The employee will not, after grant of the Option, own stock possessing five
percent or more of the total combined voting power or value of all classes
of stock of the Company or of any Related Corporation. For purposes of
this paragraph (c), the rules of Section 425(d) of the Code shall apply in
determining the stock ownership of the employee, and stock which the
employee may purchase under outstanding options shall be treated as stock
owned by the employee.

(d) Upon grant of the Option, the employee's rights to purchase stock under all
employee stock purchase plans (as defined in Section 423(b) of the Code) of
the Company and its Related Corporations will not accrue at a rate which
exceeds $25,000 of fair market value of the Stock (determined as of the
Grant Date for such Option) for each calendar year in which such Option is
outstanding at any time. The accrual of rights to purchase Stock shall be
determined in accordance with Section 423(b) (8) of the Code.

8. DATES FOR GRANTING OPTIONS. Options shall be granted on each date
--------------------------
designated by the Board as a Grant Date.

9. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------

9.1. GENERAL. All Options granted on a particular Grant Date shall comply
--------
with the terms and conditions set forth in Sections 9.3 through 9.12, and
each Option shall be identical except as to the number of shares of Company
Stock purchasable under the Option, which shall be determined in accordance
with Section 9.2.

9.2. NUMBER OF SHARES. The maximum number of shares of Company Stock which a
----------------
Participant shall be permitted to purchase shall be equal to the amount of
the Participant's Gross Compensation permitted to be withheld for
purchasing Company Stock during the period running from the Grant Date to
the Exercise Date, divided by the purchase price determined in accordance
with Section 9.3. The number of shares which a Participant is permitted to
purchase may be further limited by the amount of payroll deductions
actually withheld as of the Exercise Date.

9.3. PURCHASE PRICE. The purchase price of Option Shares shall be 95 percent
--------------
of the Market Value of Company Stock as of the Grant Date. If the Grant
Date shall fall on a Saturday, Sunday or other legal holiday, the Market
Value shall be determined as of the trading day immediately preceding the
Grant Date.

9.4. RESTRICTIONS ON TRANSFER. Options may not be transferred otherwise than
------------------------
by will or under the laws of descent and distribution, or pursuant to a
qualified domestic relations order. An Option may not be exercised by
anyone other than the Participant during the lifetime of the Participant.
Option Shares may not be sold or otherwise transferred by the Participant
until at least six months after the Exercise Date. The Company shall have
the right to place a legend on all stock certificates representing Option
Shares setting forth the restriction on transferability of such shares.

9.5. EXPIRATION. Each Option shall expire at the close of business on the
-----------
Exercise Date or on such earlier date as may result from the operation of
Section 9.6.

3
<PAGE>

9.6. TERMINATION OF EMPLOYMENT OF PARTICIPANT. If a Participant ceases for
----------------------------------------
any reason, voluntary or involuntary (other than death or retirement), to
be continuously employed by the Company or a Related Corporation, his or
her Option shall immediately expire, and the Participant's accumulated
payroll deductions shall be returned by the Company with interest pursuant
to Section 9.12. For purposes of this Section 9.6, a Participant shall be
deemed to be employed throughout any leave of absence for military service,
illness or other bona fide purpose which does not exceed the longer of
ninety days or the period during which the Participant's reemployment
rights are guaranteed by statute or by contract. If the Participant does
not return to active employment prior to the termination of such period,
his or her employment shall be deemed to have ended on the 91st day of such
leave of absence.

9.7 RETIREMENT OR DEATH OF PARTICIPANT. If a Participant retires or dies,
----------------------------------
the Participant or, in the case of death, his or her Beneficiary, shall be
entitled to withdraw the Participant's accumulated payroll deductions with
interest pursuant to Section 9.12, or to purchase shares on the Exercise
Date to the extent that the Participant would have been so entitled had he
or she continued to be employed by the Company. The number of shares
purchasable shall be limited by the amount of the participant's accumulated
payroll deductions as of the date of his or her retirement or death.
Accumulated payroll deductions shall be applied by the Company toward the
purchase of shares unless the Participant or Beneficiary withdraws such
funds prior to the Exercise Date.

9.8 CAPITAL CHANGES AFFECTING THE STOCK. In the event that, between the
-----------------------------------
Grant Date and the Exercise Date of an Option, a stock dividend is paid or
becomes payable in respect of Company Stock or there occurs a split-up or
contraction in the number of shares of Company Stock, the number of shares
for which the Option may thereafter be exercised and the price to be paid
for each such share shall be proportionately adjusted. In the event that,
after the Grant Date, there occurs a reclassification or change of
outstanding shares of Company Stock or a consolidation or merger of the
Company with or into another corporation or a sale or conveyance,
substantially as a whole, of the property of the Company, the Participant
shall be entitled on the Exercise Date to receive shares of stock or other
securities equivalent in kind and value to the shares of stock he or she
would have held if he or she had exercised the Option in full immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance and had continued to hold such shares (together with all other
shares and securities thereafter issued in respect thereof) until the
Exercise Date. In the event that there is to occur a recapitalization
involving an increase in the par value of Company Stock which would result
in a par value exceeding the exercise price under an outstanding Option,
the Company shall notify the Participant of such proposed recapitalization
immediately upon its being recommended by the Board to the Company's
shareholders, after which the Participant shall have the right to exercise
his or her Option prior to such recapitalization; if the Participant fails
to exercise the Option prior to recapitalization, the exercise price under
the Option shall be appropriately adjusted. In the event that, after the
Grant Date, there occurs a dissolution or liquidation of the Company,
except pursuant to a transaction to which Section 425(a) of the Code
applies, each Option to purchase Company Stock shall terminate, but the
Participant holding such Option shall have the right to exercise his or her
Option prior to such dissolution or liquidation.

9.9. PAYROLL DEDUCTIONS. Any Eligible Employee, who wishes to authorize
------------------
payroll deductions for the purchase of Option Shares under the Plan, must
complete and return to the human resources department of the Company prior
to the Grant Date an Enrollment Agreement indicating the total percentage
(which shall be a full integer between one and the maximum determined by
the Board in accordance with Section 4 hereof) of his or her Gross
Compensation which is to be withheld each pay period. Prior to the Exercise
Date, the Participant shall be permitted only once to do each of the
following during any plan year (a) withdraw accumulated payroll deductions,
(b) discontinue payroll deductions, or (c) decrease, but not increase, the
percentages of Gross Compensation withheld. The Participant may not
recommence payroll deductions at any time prior to the Exercise Date.

9.10.EXERCISE OF OPTIONS. On the Exercise Date the Participant shall be
-------------------
deemed to have exercised his or her Option to purchase the maximum number
of Option Shares purchasable by his or her accumulated payroll deductions,
provided that:

(a) The number of Option Shares of Company Stock purchasable shall not
exceed the number of shares the Participant is entitled to purchase
pursuant to Section 9.2.

4
<PAGE>

(b) If the total number of Option Shares of Company Stock which all
Participants elect to purchase, together with any Option Shares of
Company Stock already purchased under the Plan, exceeds the total
number of shares of Company Stock which may be purchased under the
Plan pursuant to Section 6, the number of shares of Company Stock
which each Participant is permitted to purchase shall be decreased
pro rata based on the Participant's accumulated payroll deductions
--------
with respect to Company Stock in relation to all accumulated payroll
deductions currently being withheld under the Plan with respect to
Company Stock.

(c) If the number of Option Shares purchasable includes a fraction, such
number shall be adjusted to the next smaller whole number and the
purchase price shall be adjusted accordingly.

(d) Notwithstanding the foregoing, a Participant may notify the Company's
human resources department at least 30 days prior to an Exercise Date,
by completing an Enrollment/Change Agreement, that he or she elects
not to exercise his or her Option and desires to withdraw his or her
accumulated payroll deductions withheld under the Plan, as provided in
Section 9.9.

9.11.DELIVERY OF STOCK. Within a reasonable time after the Exercise Date,
-----------------
the Company shall deliver or cause to be delivered to the Participant a
certificate or certificates for the number of shares purchased by the
Participant. If any law or applicable regulation of the Securities and
Exchange Commission or other body having jurisdiction in the premises shall
require that the Company or the Participant take any action in connection
with the shares being purchased under the Option, delivery of the
certificate or certificates for such shares shall be postponed until the
necessary action shall have been completed, which action shall be taken by
the Company at its own expense, without unreasonable delay. The
Participant shall have no rights as a shareholder in respect of shares for
which he or she has not received a certificate.

9.12.RETURN OF ACCUMULATED PAYROLL DEDUCTIONS. In the event that the
----------------------------------------
Participant or the Beneficiary is entitled to the return of accumulated
payroll deductions, whether by reason of voluntary withdrawal, termination
of employment, retirement, death, or in the event that accumulated payroll
deductions exceed the price of Option Shares purchased, such amount,
together with interest thereon at the rate fixed by the Board of Directors
(which rate for a particular plan year running from Grant Date to Exercise
Date shall be fixed annually by the Board of Directors prior to the
commencement of such period), shall be returned within a reasonable time by
the Company to the Participant or the Beneficiary, as the case may be;
provided, however, that interest shall not be paid on any amount returned
-------- -------
which is less than the purchase price of one Option Share of Company Stock
for which such payroll deductions were withheld.

5
<PAGE>

FORM OF PROXY

THERMO VISION CORPORATION

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 1, 1998

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby appoints John N. Hatsopoulos, Kristine Stotz
Langdon and Melissa F. Riordan, or any one of them in the absence of the others,
as attorneys and proxies of the undersigned, with full power of substitution,
for and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of the Stockholders of Thermo Vision Corporation, a Delaware
corporation (the "Company"), to be held on Monday, June 1, 1998, at 9:00 a.m. at
The Hyatt Regency Scottsdale Resort at Gainey Ranch, Scottsdale, Arizona, and at
any adjournment or postponement thereof, and to vote all shares of common stock
of the Company standing in the name of the undersigned on April 3, 1998, with
all of the powers the undersigned would possess if personally present at such
meeting:

(IMPORTANT - TO BE SIGNED AND DATED ON THE REVERSE SIDE.)
<PAGE>

Please mark your
[X] votes as in this
example.

1. ELECTION OF DIRECTORS OF THE COMPANY (see reverse).

FOR [_] WITHHELD [_]

______________________________________
FOR all nominees listed at right, except authority to vote withheld for the
following nominees (if any)

NOMINEES: D. Allan Bromley, Elias P. Gyftopoulos, Kristine Stotz Langdon, Earl
R. Lewis and Arvin H. Smith.

<TABLE>
<S> <C>
2. Approve management proposal to adopt the
Corporation's employees' stock purchase plan and FOR AGAINST ABSTAIN
reserve 50,000 shares of the common stock for [_] [_] [_]
issuance thereunder.
</TABLE>

3. In their discretion on such other matters as may properly come before the
Meeting.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS SET FORTH
ABOVE IF NO INSTRUCTION TO THE CONTRARY IS INDICATED OR IF NO INSTRUCTION IS
GIVEN.

Copies of the Notice of Meeting and of the Proxy Statement have been received
by the undersigned.

SIGNATURE(S)_______________________________________ DATE_________________

NOTE: This proxy should be dated, signed by the shareholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are
held by joint tenants or as community property, both should sign.