THERMADYNE HOLDINGS CORP /DE, DEF 14A, 1998-10-06

THERMADYNE HOLDINGS CORP /DE
DEF 14A, 1998-10-06
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<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14a INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

Thermadyne Holdings Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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<PAGE> 2

THERMADYNE HOLDINGS CORPORATION
101 SOUTH HANLEY ROAD, SUITE 300
ST. LOUIS, MISSOURI 63105
---------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 4, 1998
---------------------

Notice is hereby given that the Annual Meeting of Stockholders of
Thermadyne Holdings Corporation, a Delaware corporation (the "Company"), will be
held on Wednesday, November 4, 1998, at 10:00 a.m., local time, at the offices
of Victor Equipment Company, 2800 Airport Rd., Denton, Texas 76202, for the
following purposes:

1. To elect seven directors;

2. To consider and act upon a proposal to approve the Thermadyne
Holdings Corporation Bonus Plan;

3. To consider and act upon a proposal to approve the Thermadyne
Holdings Corporation Management Incentive Plan;

4. To consider and act upon a proposal to approve the Thermadyne
Holdings Corporation 1998 Non-Employee Directors Stock Option Plan; and

5. To transact such other business as may properly come before the
meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on October 1, 1998,
as the record date for determining the stockholders entitled to notice of, and
to vote at, the meeting or any adjournment thereof. A list of such stockholders
will be maintained at the offices of Victor Equipment Company, 2800 Airport Rd.,
Denton, Texas 76202, during the ten-day period prior to the date of the meeting
and will be available for inspection by stockholders, for any purpose germane to
the meeting, during ordinary business hours.

We hope you will be represented at the meeting by signing, dating and
returning the enclosed proxy card in the accompanying envelope as promptly as
possible, whether or not you expect to be present in person. Your vote is
important and the Board of Directors appreciates the cooperation of stockholders
in directing proxies to vote at the meeting.

By Order of the Board of Directors,

STEPHANIE N. JOSEPHSON
Corporate Secretary

October 6, 1998

IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE PROMPTLY SIGNED, DATED AND
RETURNED IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE> 3

THERMADYNE HOLDINGS CORPORATION
101 SOUTH HANLEY ROAD, SUITE 300
ST. LOUIS, MISSOURI 63105
(314) 721-5573
---------------------

PROXY STATEMENT
OCTOBER 6, 1998
---------------------

GENERAL INFORMATION

This Proxy Statement is being sent by the Board of Directors of Thermadyne
Holdings Corporation, a Delaware corporation (the "Company"), to the holders of
common stock, par value $.01 per share, of the Company (the "Common Stock"), in
connection with the solicitation of proxies for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held at 10:00 a.m., local time, on
Wednesday, November 4, 1998, at the offices of Victor Equipment Company, 2800
Airport Rd., Denton, Texas 76202, and at any and all adjournments thereof.

A proxy delivered pursuant to this solicitation is revocable at the option
of the person giving the same at any time before it is exercised. A proxy may be
revoked, prior to its exercise, by executing and delivering a later dated proxy
card, by delivering written notice of the revocation of the proxy to the
Corporate Secretary of the Company prior to the Annual Meeting, or by attending
and voting at the Annual Meeting. Attendance at the Annual Meeting, in and of
itself, will not constitute a revocation of a proxy. Unless previously revoked,
the shares represented by the enclosed proxy will be voted in accordance with
the stockholder's directions if the proxy is duly executed and received by the
Company prior to the Annual Meeting. If no directions are specified, the shares
will be voted FOR the election of the seven director nominees recommended by the
Board of Directors, FOR the approval of the Thermadyne Holdings Corporation
Bonus Plan, FOR the approval of the Thermadyne Holdings Corporation Management
Incentive Plan, FOR the Thermadyne Holdings Corporation 1998 Non-Employee
Directors Stock Option Plan and in accordance with the discretion of the named
attorneys-in-fact on other matters, if any, properly brought before the Annual
Meeting.

The expense of preparing, printing and mailing this Proxy Statement and of
soliciting the proxies sought hereby will be borne by the Company. In addition
to the use of the mails, proxies may be solicited in person, or by telephone,
facsimile transmission or otherwise by officers, directors and regular employees
of the Company, none of whom will receive additional compensation for those
services. The Company also will request brokerage firms, banks, nominees,
custodians and fiduciaries to forward proxy materials to the beneficial owners
of shares of Common Stock as of the record date and will provide reimbursement
for the cost of forwarding those materials in accordance with customary
practice. Your cooperation in promptly signing, dating and returning the
enclosed proxy card will help to avoid additional expense.

As of October 1, 1998, the Company had 3,236,898 shares of Common Stock
issued and outstanding. Each share of Common Stock entitles the holder to one
vote. Only stockholders of record at the close of business on October 1, 1998,
will be entitled to notice of, and to vote at, the Annual Meeting.

This Proxy Statement and the enclosed proxy card are first being mailed to
stockholders of the Company on or about October 6, 1998.
<PAGE> 4

OUTSTANDING VOTING SECURITIES OF THE COMPANY
AND PRINCIPAL HOLDERS THEREOF

The following table sets forth, as of October 1, 1998, certain information
regarding the ownership of Common Stock (i) by each person known by the Company
to be the beneficial owner of more than five percent of the outstanding Common
Stock, (ii) by each director or director nominee of the Company, (iii) by each
executive officer named in the Summary Compensation Table (see "Executive and
Director Compensation -- Summary Compensation Table") and (iv) by all current
directors and executive officers of the Company as a group. Other than as set
forth below, no director, director nominee or executive officer of the Company
is the beneficial owner of any shares of Common Stock. The Company believes
that, unless otherwise noted, each person shown in the following table has sole
voting and sole investment power with respect to the shares indicated.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF COMMON STOCK
-----------------------
NUMBER OF PERCENT OF
NAME OF BENEFICIAL OWNER SHARES CLASS(1)
------------------------ --------- ----------
<S> <C> <C>
DLJ Merchant Banking Partners II, L.P. and related
investors(2)(3)........................................... 2,962,124 82.5%
Magten Asset Management Corp.
35 East 21st Street
New York, NY 10010(4)..................................... 267,339 8.3%
Randall E. Curran(5)........................................ 59,566 1.8%
James H. Tate(6)............................................ 19,660 *
Peter T. Grauer(7).......................................... -- *
William F. Dawson, Jr.(7)................................... -- *
John F. Fort III(8)......................................... 3,000 *
Harold A. Poling(8)......................................... 3,000 *
Lawrence M.v.D. Schloss(7).................................. -- *
Stephanie N. Josephson(9)................................... 12,430 *
Thomas C. Drury(10)......................................... 9,860 *
Robert D. Maddox(11)........................................ 10,428 *
All directors and executive officers as a group (10
persons)(7)(12)........................................... 117,944 3.6%
</TABLE>

- ---------------

* Represents less than 1 percent.

(1) Based on 3,236,898 shares of Common Stock outstanding and calculated in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

(2) Includes 353,428 shares of Common Stock issuable upon the exercise of
warrants.

(3) Consists of shares held directly by the following investors related to DLJ
Merchant Banking Partners II, L.P. ("DLJMB"): DLJ Offshore Partners II,
C.V. ("Offshore"), a Netherlands Antilles limited partnership, DLJ
Diversified Partners, L.P. ("Diversified"), a Delaware limited partnership,
DLJMB Funding II, Inc. ("Funding"), a Delaware corporation, DLJ Merchant
Banking Partners II-A, L.P. ("DLJMBPIIA"), a Delaware limited partnership,
DLJ Diversified Partners-A, L.P. ("Diversified A"), a Delaware limited
partnership, DLJ Millennium Partners, L.P. ("Millennium"), a Delaware
limited partnership, DLJ Millennium Partners-A, L.P. ("Millennium A"), a
Delaware limited partnership, DLJ EAB Partners, L.P. ("EAB"), a Delaware
limited partnership, UK Investment Plan 1997 Partners ("UK Partners"), a
Delaware partnership, DLJ First ESC L.P. ("DLJ First ESC"), a Delaware
limited partnership, and DLJ ESC II, L.P. ("DLJ ESC II"), a Delaware
limited partnership. The address of each of DLJMB, Diversified, Funding,
DLJMBPIIA, Diversified A, Millennium, Millennium A, EAB, DLJ First ESC and
DLJ ESC II is 277 Park Avenue, New York, New York 10172. The address of
Offshore is John B. Gorsiraweg 14, Willemstad, Curacao, Netherlands
Antilles. The address of UK Partners is 2121 Avenue of the Stars, Fox
Plaza, Suite 3000, Los Angeles, California 90067.

2
<PAGE> 5

(4) The following information is based on a Schedule 13D, dated July 25, 1996,
as amended on September 25, 1996, on February 12, 1998, on March 9, 1998,
and on June 10, 1998, filed with the Securities and Exchange Commission
(the "Commission") by Magten Asset Management Corp. ("Magten"), an
investment adviser registered under the Investment Advisers Act of 1940, as
amended (the "Investment Advisers Act"). Magten has (i) shared voting power
over 227,897 of the shares and no voting power over 39,442 of the shares
and (ii) shared investment power over all 267,339 shares.

(5) Includes 9,939 shares of Common Stock issuable to Mr. Curran upon the
exercise of vested stock options or stock options that will vest within 60
days.

(6) Includes 5,168 shares of Common Stock issuable to Mr. Tate upon the
exercise of vested stock options or stock options that will vest within 60
days.

(7) Messrs. Grauer, Dawson and Schloss are officers of DLJ Merchant Banking II,
Inc. ("DLJMB II Inc."), the general partner of DLJMB. Share data shown for
such individuals excludes shares shown as held by DLJMB and affiliated
funds and entities (the "DLJMB Funds"), as to which such individuals
disclaim beneficial ownership.

(8) All of the shares shown represent shares of Common Stock issuable upon the
exercise of vested stock options following stockholder approval of the 1998
Non-Employee Directors Stock Option Plan, the plan under which such options
were granted.

(9) Includes 1,060 shares of Common Stock issuable to Ms. Josephson upon the
exercise of vested stock options or stock options that will vest within 60
days.

(10) Includes 1,060 shares of Common Stock issuable to Mr. Drury upon the
exercise of vested stock options or stock options that will vest within 60
days.

(11) Includes 1,060 shares of Common Stock issuable to Mr. Maddox upon the
exercise of vested stock options or stock options that will vest within 60
days.

(12) Includes 24,287 shares of Common Stock issuable upon the exercise of vested
stock options or stock options that will vest within 60 days.

CHANGES IN CONTROL OF REGISTRANT

On May 22, 1998, the Company and DLJMB consummated (i) the merger (the
"Merger") of Mercury Acquisition Corporation, an affiliate of the DLJMB Funds,
with and into the Company and (ii) the associated recapitalization of the
Company (collectively, the "Recapitalization"). The DLJMB Funds acquired
approximately 80.6% of the outstanding Common Stock pursuant to such
transactions.

The transactions were financed by (i) approximately $355 million of
proceeds from a new senior secured loan facility (the "New Credit Facility")
entered into among Thermadyne Mfg. LLC, a subsidiary of the Company ("Thermadyne
LLC"), Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC"), as
arranger, DLJ Capital Funding, Inc., as syndication agent, ABN AMRO Bank N.V.,
Chicago Branch, as administrative agent, Societe Generale, as documentation
agent, and the other lenders party thereto, (ii) $94.6 million of proceeds from
the issuance by the Company of its 12 1/2% Senior Discount Debentures due 2008
(the "Debentures"), (iii) $205.4 million of proceeds from the issuance by
Thermadyne LLC and Thermadyne Capital Corporation, a subsidiary of Thermadyne
LLC, of 9 7/8% Senior Subordinated Notes due 2008 (the "Senior Subordinated
Notes") and (iv) approximately $140 million of proceeds from the issuance by the
Company of Common Stock, preferred stock and warrants to the DLJMB Funds.

3
<PAGE> 6

(PROPOSAL NO. 1)

PROPOSAL FOR THE ELECTION OF DIRECTORS

Action will be taken at the Annual Meeting for the election of seven
directors for terms expiring at the 1999 annual meeting of stockholders. The
persons named below, each of whom currently serves as a director of the Company,
have been nominated for election as directors. It is intended that the
attorneys-in-fact named in the proxy card will vote FOR the election of the
seven nominees listed below, unless instructions to the contrary are given
therein. These nominees have indicated that they are able and willing to serve
as directors. However, if some unexpected occurrence should require the
substitution of some other person or persons for any or all of the nominees, it
is intended that the attorneys-in-fact will vote FOR such substitute nominee(s)
as the Board of Directors may designate. All directors elected at the Annual
Meeting will hold office until their respective successors are elected and
qualified.

DIRECTOR NOMINEES

Randall E. Curran, Age 44
Chairman of the Board, President
and Chief Executive Officer

Mr. Curran has been a Director of the Company since February 1994 and was
elected Chairman of the Board and Chief Executive Officer of the Company in
February 1995, having previously served as President of the Company from August
1994 and as Executive Vice President and Chief Operating Officer of the Company
from February 1994. From 1986 to 1992, Mr. Curran was Chief Financial Officer of
the Company and/or its predecessors. Prior to 1986, Mr. Curran held various
executive positions with Cooper Industries, Inc. Mr. Curran presently serves on
the board of directors of Insilco Holding Co. and the Whitfield School.

James H. Tate, Age 51
Director, Senior Vice President and Chief Financial Officer

Mr. Tate has been a Director of the Company since October 1995. He was
elected Senior Vice President and Chief Financial Officer of the Company in
February 1995, having previously served as Vice President of the Company and
Vice President and Chief Financial Officer of the Company's subsidiaries since
April 1993. Prior to joining the Company, Mr. Tate was employed by the
accounting firm of Ernst & Young LLP for eighteen years, the last six of which
he was a partner. Mr. Tate currently serves on the board of directors of Rowe
International, Inc.

Peter T. Grauer, Age 52
Director

Mr. Grauer has been a Director of the Company since May 1998. Mr. Grauer
has been a Managing Director of DLJMB II Inc. (and its predecessor) since
September 1992. Mr. Grauer is a director of Doane Products Co., Total Renal Care
Holdings, Inc., DecisionOne Holdings Corp., Nebco Evans Holding Company,
Ameriserve Food Distribution, Inc. and Bloomberg, Inc.

William F. Dawson, Jr., Age 34
Director

Mr. Dawson has been a Director of the Company since May 1998. Mr. Dawson
has been a Principal of DLJMB II Inc. since August 1997. From December 1995 to
August 1997, he was a Senior Vice President in DLJSC's High Yield Capital
Markets Group. Prior thereto Mr. Dawson was a Vice President in the Leveraged
Finance Group within DLJSC's Investment Banking Group. Mr. Dawson serves as a
director of Von Hoffmann Corporation and Insilco Holding Co.

4
<PAGE> 7

John F. Fort III, Age 56
Director

Mr. Fort has been a Director of the Company since May 1998. Mr. Fort
retired as Chairman of the Board of Tyco International Ltd. in January of 1993.
In 1964, after receiving degrees in Aeronautical Engineering and Industrial
Management from Princeton and the MIT Sloan School, respectively, he joined the
Simplex Wire & Cable Company (now a subsidiary of Tyco). Mr. Fort held a broad
range of positions throughout his thirty years at Tyco. He currently holds
directorships at Tyco International Ltd., Dover Corporation and Roper
Industries. He is an active participant on advisory boards at MIT, Princeton
University, Full Circle Investments and the Appalachian Mountain Club.

Harold A. Poling, Age 72
Director

Mr. Poling has been a Director of the Company since May 1998. Mr. Poling
retired as Chairman of the Board and Chief Executive Officer of Ford Motor
Company on January 1, 1994, a position he held since 1990. Mr. Poling is a
director of Shell Oil Company, Flint Ink Corporation, the Kellogg Company,
Karrington Health, Inc. and Meritor Automotive, Inc. He is a member of the DLJ
Executive Advisory Board and a member of the VIAG International Board. Mr.
Poling is a director of the Monmouth (Ill.) College Senate and a member of the
Dean's Advisory Council for the Indiana University School of Business. He was
national chairman of Indiana University's Annual Fund campaigns from 1986-88.

Lawrence M.v.D. Schloss, Age 44
Director

Mr. Schloss has been a Director of the Company since May 1998. Mr. Schloss
has been the Managing Partner of DLJMB II Inc. since November 1995. Prior to
November 1995, he was the Chief Operating Officer and a Managing Director of DLJ
Merchant Banking, Inc. Mr. Schloss currently serves as Chairman of the Board of
McCulloch Corporation and as a director of Wilson Greatbatch, Inc. and
DecisionOne Holdings Corp. Mr. Schloss has previously served as a director of
GTECH Corporation, Krueger International, Inc., OSi Specialties, Inc. and MPB
Corporation.

ARRANGEMENTS RELATING TO THE ELECTION OF DIRECTORS

Pursuant to an Investors' Agreement (the "Investors' Agreement") dated May
22, 1998, entered into by and among the Company, the DLJMB Funds and the senior
executive officers of the Company (including Messrs. Curran and Tate), each
stockholder party thereto has agreed to vote shares of Common Stock owned by
such stockholder in order to ensure that the Board of Directors of the Company
will consist of Messrs. Curran and Tate, so long as they are employed by the
Company, and at least five directors designated by DLJMB.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
INDIVIDUALS NOMINATED FOR ELECTION AS DIRECTORS

GENERAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND ITS COMMITTEES

The Board of Directors of the Company met on six occasions during fiscal
1997. The Delaware General Corporation Law provides that the Board of Directors,
by resolution adopted by a majority of the entire Board, may designate one or
more committees, each of which shall consist of one or more directors. The Board
of Directors has established an Audit Committee and a Compensation Committee. In
connection with the Recapitalization and the resulting change in majority
ownership of the Company, Messrs. Grauer, Dawson, Fort, Poling and Schloss were
elected to the Board of Directors, replacing the then current outside directors.
The only current directors of the Company who were also directors during fiscal
year 1997 are Messrs. Curran and Tate, each of whom attended at least 75% of the
meetings of the Board of Directors held during the period

5
<PAGE> 8

for which he was a director and the meetings of the committee or committees on
which he served during such period.

Audit Committee. The Audit Committee is responsible for providing general
oversight with respect to the accounting principles employed in the Company's
financial reporting. The Audit Committee meets periodically with the Company's
principal financial and accounting officers and independent public accountants
to review the scope of auditing procedures and the Company's policies relating
to internal auditing and accounting procedures and controls. The Audit Committee
met three times last year. The current members of the Audit Committee are
Messrs. Dawson, Poling and Schloss. Messrs. Curran and Tate are entitled to
attend meetings of the Audit Committee in an ex officio capacity.

Compensation Committee. The Compensation Committee (i) determines the
annual salary and bonus and reviews the amount of remuneration in stock options
of the Company's senior executives, (ii) reviews the operation of the Company's
executive compensation programs, and (iii) establishes and periodically reviews
policies in the area of management benefits. None of the members of the
Compensation Committee may be officers or employees of the Company. The
Compensation Committee met three times last year. The current members of the
Compensation Committee are Messrs. Grauer, Fort and Dawson. Messrs. Curran and
Tate are entitled to attend meetings of the Compensation Committee in an ex
officio capacity.

EXECUTIVE AND DIRECTOR COMPENSATION

EXECUTIVE COMPENSATION

The following table sets forth information in respect of the compensation
of the Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company (collectively, the "Named
Executive Officers") for services in all capacities to the Company and its
subsidiaries for the fiscal years ended December 31, 1997, 1996 and 1995. Each
of the Named Executive Officers entered into a new employment agreement with the
Company in connection with the Recapitalization. See "-- Post-Recapitalization
Employment Arrangements -- Employment Contracts."

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------
ANNUAL COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION(S) YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(1)
- ------------------------------ ---- --------- -------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Randall E. Curran..................... 1997 517,847 538,400 30,600 33,807
Chairman of the Board, President 1996 498,921 385,050 91,000 8,008
and Chief Executive Officer(2) 1995 482,919 409,116 65,000 7,728
James H. Tate......................... 1997 275,093 188,614 27,000 18,039
Director, Senior Vice President 1996 241,012 169,114 36,000 7,403
and Chief Financial Officer(3) 1995 221,454 158,965 20,000 3,991
Stephanie N. Josephson................ 1997 168,719 84,625 10,000 10,210
Vice President, General Counsel 1996 129,573 70,208 6,000 6,489
and Corporate Secretary(4) 1995 100,127 44,760 25,000 3,024
Thomas C. Drury....................... 1997 132,206 66,479 10,000 7,444
Vice President -- Human 1996 107,115 53,708 6,000 5,982
Resources(5) 1995 92,557 32,669 25,000 4,160
Robert D. Maddox...................... 1997 134,254 67,417 5,000 7,749
Vice President -- Controller(6) 1996 113,658 60,055 6,000 6,272
1995 98,039 36,556 10,000 4,378
</TABLE>

6
<PAGE> 9

- ---------------

(1) All other compensation includes group life insurance premiums paid by the
Company and contributions made on behalf of the Named Executive Officers to
the Company's 401(k) retirement and profit sharing plan. The amount of
insurance premiums paid and 401(k) contributions made on behalf of the Named
Executive Officers for fiscal 1997 are as follows: Mr. Curran, $3,978 and
$29,829, respectively; Mr. Tate, $2,544 and $15,495, respectively; Ms.
Josephson, $1,138 and $9,072, respectively; Mr. Drury, $361 and $7,083,
respectively; and Mr. Maddox, $254 and $7,495, respectively.

(2) Mr. Curran was elected Chairman of the Board and Chief Executive Officer of
the Company effective as of February 23, 1995, having previously served as
President of the Company from August 1994 and as Executive Vice President
and Chief Operating Officer of the Company from February 1994.

(3) Mr. Tate was elected Senior Vice President and Chief Financial Officer of
the Company effective as of February 23, 1995, having previously served as
Vice President of the Company and as Chief Financial Officer of the
Company's subsidiaries. Mr. Tate was elected as a director of the Company on
October 26, 1995.

(4) Ms. Josephson was elected Corporate Counsel and Corporate Secretary of the
Company on March 7, 1995, and was elected Vice President and General Counsel
of the Company on April 26, 1995.

(5) Mr. Drury was elected Vice President -- Human Resources of the Company on
March 7, 1995.

(6) Mr. Maddox was elected Controller of the Company on June 1, 1992, Vice
President -- Controller of Thermadyne Industries, Inc. on April 1, 1995, and
Vice President -- Controller of the Company on April 18, 1996.

The following table sets forth certain information related to stock options
granted to the Named Executive Officers in 1997.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS GRANT DATE
UNDERLYING GRANTED TO EXERCISE OR PRESENT
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION VALUE
NAME GRANTED(#)(1) FISCAL YEAR(%) ($/SH) DATE ($)(2)
---- ------------- -------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Randall E. Curran............... 30,600 14.1 26.875 02/05/07 491,742
James H. Tate................... 27,000 12.4 26.875 02/05/07 433,890
Stephanie N. Josephson.......... 10,000 4.6 26.875 02/05/07 160,700
Thomas C. Drury................. 10,000 4.6 26.875 02/05/07 160,700
Robert D. Maddox................ 5,000 2.3 26.875 02/05/07 80,350
</TABLE>

- ---------------

(1) The options to purchase Common Stock were granted under the Company's 1993
Management Option Plan or the Company's 1996 Employee Stock Option Plan and
become exercisable in five equal annual installments commencing on the first
anniversary of the date of grant. None of these options are currently
outstanding. See "-- Fiscal Year-End Option Values."

(2) The grant date present value of each option grant was determined using a
variation of the Black-Scholes option pricing model. The estimated values
presented are based on the following assumptions made as of the time of
grant: an expected dividend yield of 0%; an expected option term of 10
years; volatility of .339 (based on historical stock price observations just
prior to each grant); and a risk-free rate of 6.72%. The actual value that
the Named Executive Officers realized from the exercise of the options was
the excess of the fair market value of the Common Stock on the date of
exercise over the exercise price. See "-- Fiscal Year-End Option Values."

7
<PAGE> 10

The following table provides information related to the number and value of
options held by the Named Executive Officers at the end of 1997. On December 31,
1997, the closing sale price of Common Stock on NASDAQ was $29.50. No Named
Executive Officer exercised any options during 1997.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END
---------------------------------- ----------------------------------
NAME EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
---- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Randall E. Curran............... 244,200 142,400 4,139,725 1,574,850
James H. Tate................... 53,700 67,800 893,975 624,275
Stephanie N. Josephson.......... 11,200 29,800 177,975 328,775
Thomas C. Drury................. 11,200 29,800 177,975 328,775
Robert D. Maddox................ 5,200 15,800 81,225 170,525
</TABLE>

As of May 22, 1998, the effective time of the Merger, all outstanding
options to acquire shares of Common Stock granted to employees and directors
(excluding shares subject to purchase under the Company's Employee Stock
Purchase Plan), whether vested or not (the "Options"), including those options
set forth on the tables above, were cancelled, and the holders of such Options
received a cash payment in an amount equal to the product of (x) the excess, if
any, of $34.50 over the exercise price of such Option multiplied by (y) the
number of shares of Common Stock subject to such Option. Cash payments of
$7,647,575, $2,125,750, $711,750, $711,750 and $356,750 were paid to Mr. Curran,
Mr. Tate, Ms. Josephson, Mr. Drury and Mr. Maddox, respectively, in connection
with the cancellation of their Options.

POST-RECAPITALIZATION EMPLOYMENT ARRANGEMENTS

Employment Contracts. On May 22, 1998, in connection with the Merger,
Messrs. Curran, Tate, Drury and Maddox and Ms. Josephson entered into employment
agreements with the Company and its subsidiaries. All five employment agreements
terminate on May 22, 2001; however, such agreements automatically renew for an
additional year on each May 22 so that a new three-year term begins upon each
extension (unless the agreements are earlier terminated as provided therein).
Messrs. Curran, Tate, Drury and Maddox and Ms. Josephson serve in their current
executive capacities with the Company as a requirement of their respective
employment agreements.

Messrs. Curran, Tate, Drury and Maddox and Ms. Josephson are entitled to
annual base salaries (subject to increase at the Board of Directors' discretion)
of $538,400, $290,175, $145,000, $145,000 and $175,000, respectively. In
addition, Messrs. Curran, Tate, Drury and Maddox and Ms. Josephson are eligible
to participate in an annual bonus plan providing for an annual bonus opportunity
of not less than 100%, 75%, 55%, 55% and 55%, respectively, of such executive's
base salary. Each executive is also entitled to such benefits as are customarily
provided to the executives of the Company and its subsidiaries. All five
executives are required to devote all their business time and attention to the
business of the Company and its subsidiaries.

Each employment agreement provides that if the executive's employment
ceases as a result of disability or death, the executive or the executive's
estate, heirs or beneficiaries, as the case may be, will continue to receive the
executive's then current salary for a period of 24 months from the date of his
or her disability or death. If the executive's employment is terminated by the
Company for Cause (as defined in the employment agreement) or voluntarily by the
executive for any reason other than death, disability or upon a constructive
termination (which includes, among other things, reduction of compensation,
title, position or duties) the executive will not be entitled to receive
compensation or unaccrued benefits after the date of termination. If the
executive's employment is terminated by the Company without Cause or is
terminated by the executive upon a constructive termination, the executive will
continue to receive his or her then current salary and other benefits provided
by the agreement during the unexpired term of the agreement.

8
<PAGE> 11

Direct Investment Program. In May 1998, in connection with the Merger,
certain members of senior management were offered the opportunity to purchase
shares of Common Stock through the Thermadyne Holdings Corporation Direct
Investment Program (the "Investment Program"). The following table set forth the
number of shares of Common Stock purchased by each Named Executive Officer
participating in the Investment Program.

DIRECT INVESTMENT PROGRAM PURCHASES

<TABLE>
<CAPTION>
NAME NUMBER OF SHARES(1)
---- -------------------
<S> <C>
Randall E. Curran.......................................... 49,274
James H. Tate.............................................. 14,492
Stephanie N. Josephson..................................... 11,370
Thomas C. Drury............................................ 8,800
Robert D. Maddox........................................... 9,368
</TABLE>

- ---------------

(1) All such shares were purchased at $34.50 per share.

In connection with the Merger, a portion of the funds required to purchase
the shares under the Investment Program were provided through loans made by the
Company. Messrs. Curran, Tate, Maddox and Drury and Ms. Josephson received
secured, non-recourse loans from the Company in the amount of $1,249,890,
$367,606, $237,630, $223,222 and $288,413, respectively. The loans bear interest
at the rate of 5.69% per annum and are due in full on May 22, 2006. Upon the
termination of the participant's employment with the Company, other than as a
result of the participant's death, any outstanding loan will become due and
payable.

Management Incentive Plan. In May 1998, in connection with the Merger,
subject to stockholder approval thereof, the Board of Directors adopted the
Management Incentive Plan, which provides for the granting of up to 500,000
shares of Common Stock to certain officers and employees of the Company. In
connection with the Merger, subject to stockholder approval of the Management
Incentive Plan, options to purchase approximately 322,966 shares of Common Stock
were granted to certain officers and employees of the Company at an exercise
price of $34.50 per option share. Pursuant to the terms of the Management
Incentive Plan, options granted to certain members of senior management provide
for both a "Time Vesting Option" and a "Cliff Vesting Option." Under the Time
Vesting Option, the option vests and is exercisable with respect to twenty
percent of the shares subject to the option on the day it was granted. Then, on
each of the first five anniversaries from that date the Time Vesting Option was
granted, an additional sixteen percent of the shares subject to the option vests
and becomes exercisable as long as the option recipient is still employed by the
Company or its subsidiaries. The Cliff Vesting Option becomes vested and
exercisable with respect to twenty percent of the shares on the thirtieth day
after the availability of the audited financial statements for each of the
fiscal years ended December 31, 1998 through December 31, 2003, provided that
the option recipient is still employed by the Company or its subsidiaries, and
further provided, that the targeted implied common equity value of the Company
was met for each such fiscal year. If the targeted implied common equity value
of the Company is not attained for any of the fiscal years ending on or before
December 31, 2002, the Cliff Vesting Option will be treated as vested and
exercisable if the target is attained for the subsequent year as long as the
option recipient is still employed by the Company or its subsidiaries. If, after
eight years from receipt of the Cliff Vesting Option, all shares subject to such
option have not vested, such shares shall become fully vested and exercisable as
long as the option recipient is still employed by the Company or its
subsidiaries.

9
<PAGE> 12

The following table sets forth the number of shares of Common Stock
issuable upon the exercise of options granted to each Named Executive Officer
under the Management Incentive Plan, following the approval of such plan by the
stockholders of the Company.

MANAGEMENT INCENTIVE PLAN OPTION GRANTS

<TABLE>
<CAPTION>
NUMBER OF
NAME OPTION SHARES
---- -------------
<S> <C>
Randall E. Curran........................................... 99,397
James H. Tate............................................... 51,686
Stephanie N. Josephson...................................... 10,603
Thomas C. Drury............................................. 10,603
Robert D. Maddox............................................ 10,603
</TABLE>

For a further description of the Management Incentive Plan, see "Proposal
No. 3 -- Proposal to Adopt the Thermadyne Holdings Corporation Management
Incentive Plan."

Other Employment Related Programs. Pursuant to the Bonus Plan, the Named
Executive Officers are eligible to receive a bonus which is based upon the
Company's achievement of its profit goals. For a more complete description of
the Bonus Plan, see "Proposal No. 2 -- Proposal to Adopt the Thermadyne Holdings
Corporation Bonus Plan."

PRE-RECAPITALIZATION EMPLOYMENT ARRANGEMENTS

Employment Contracts. On November 1, 1996, Messrs. Curran and Tate entered
into amended and restated employment agreements with the Company and its
subsidiaries. Such agreements were terminated in connection with the Merger.
Under such agreements, Messrs. Curran and Tate were entitled to annual base
salaries (subject to increase at the Board of Directors' discretion) of $538,400
and $290,175, respectively, in addition to an annual bonus opportunity of not
less than 100% and 75%, respectively, of such executive's base salary and such
benefits as are customarily provided to the executives of the Company and its
subsidiaries.

Each employment agreement provided that if the executive's employment
ceases as a result of disability or death, he or his estate, heirs or
beneficiaries, as the case may be, will continue to receive the executive's then
current salary for a period of 18 months from the date of his disability or
death. If the executive's employment is terminated by the Company for any reason
other than death, disability or for cause (as defined in the employment
agreement), or if the executive terminates his employment upon the failure of
the Company to comply with the terms of the employment agreement, the executive
will continue to receive his then current salary and any other benefits provided
by the agreement through the later to occur of the termination date of the
agreement or 18 months from the date of termination of the executive's
employment.

Other Employment Related Contracts. In July 1996, the Company entered into
Change of Control Agreements with certain officers of the Company, including the
Named Executive Officers. Such Change of Control Agreements were terminated in
connection with the Merger. The Change of Control Agreements provided for a
payment equal to the greater of (i) two times such executive's then current
annual compensation (as defined) or (ii) 2.99 times the average of such
executive's income as reported to the Internal Revenue Service for the
immediately preceding five years and the immediate vesting of all of the
executive's unvested stock options upon the termination without cause (as
defined) or constructive termination without cause (as defined) of the
executive's employment within three years of a change of control (as defined).

In August 1996, the Company entered into Employment Retention Agreements
with certain officers and other employees of the Company, including the Named
Executive Officers. With respect to the Named Executive Officers, such
Employment Retention Agreements were terminated in connection with the Merger.
These agreements contained restrictive covenants that prohibited the executive
from rendering services or advice to, or being employed by, certain specified
competitors of the Company for a period of two years after the date of such
agreements. As compensation for entering into these agreements and in accordance
with the terms thereof, the Company granted to each of the executives stock
options to acquire 1,000 shares of Common Stock.

10
<PAGE> 13

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the Compensation Committee of the Board of Directors served as
an officer or employee of the Company or any of its subsidiaries during fiscal
year 1997.

COMPENSATION OF DIRECTORS

Post-Recapitalization Compensation Arrangements. Other than Messrs. Curran,
Tate, Dawson, Schloss and Grauer, for periods following the Merger, each
director of the Company is entitled to receive a $12,000 annual retainer plus a
$1,000 fee for each regular meeting of the Board of Directors attended and a
$500 fee for each meeting of a board committee attended. Additionally, certain
non-employee directors (as described in the 1998 Non-Employee Directors Stock
Option Plan) are eligible to receive options under the 1998 Non-Employee
Directors Stock Option Plan. See "Proposal No. 4 -- Proposal to Adopt the
Thermadyne Holdings Corporation 1998 Non-Employee Directors Stock Option Plan."
Directors also are reimbursed for all reasonable travel and other expenses of
attending meetings of the Board of Directors or committees of the Board of
Directors.

Pre-Recapitalization Compensation Arrangements. Prior to the Merger, each
director of the Company, other than Messrs. Curran and Tate, received a $12,000
annual retainer plus a $1,000 fee for each regular meeting of the Board of
Directors attended and a $500 fee for each meeting of a board committee attended
(other than meetings of the Executive Committee, for which members of the
committee other than Charles F. Moran, a former director of the Company,
received a fee of $750). In addition to those fees, Mr. Moran, as the Chairman
of the Executive Committee, received aggregate compensation of $60,000 for
services he provided during the twelve-month period ending February 28, 1997.
For the period ending February 28, 1998, Mr. Moran received aggregate
compensation of $60,000 for services provided by him in his capacity as Chairman
of the Executive Committee during such period. Directors were also reimbursed
for all reasonable travel and other expenses of attending meetings of the Board
of Directors or committees of the Board of Directors.

On November 1, 1997, the Board of Directors granted options to purchase
1,000 shares of Common Stock to the following former directors of the Company:
Messrs. Fletcher L. Byrom, Henry L. Druker, Richard L. Berger and Moran.

REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors (the "Compensation
Committee") is responsible for reviewing the Company's compensation arrangements
with the Company's senior executive officers (including the Named Executive
Officers). The current members of the Compensation Committee consist of
directors elected following the consummation of the Merger. During fiscal year
1997 the Company's compensation program was administered by the Compensation
Committee as previously constituted. In addition, in connection with the Merger
certain compensation and investment arrangements were implemented based on
negotiations with DLJMB. The principal elements of the Company's 1997 executive
compensation program consisted of base salaries, the opportunity for annual cash
bonuses based on the Company's financial performance, equity-based compensation
in the form of stock options and the opportunity to participate in a stock
purchase program and other customary fringe benefits.

Philosophy

The Compensation Committee believes that all executive officers of the
Company, including the Chief Executive Officer, should be compensated on a
competitive basis with other manufacturing companies of comparable size in sales
and earnings. The Compensation Committee's primary objectives with respect to
executive compensation are expected to remain substantially the same as those of
the Compensation Committee as previously constituted: to establish a total
compensation program that provides base salaries in a competitive range, bonus
opportunities that will reward above-average performance with above-average pay,

11
<PAGE> 14

and equity-based incentives designed to enhance the profitable growth of the
Company and the value of its Common Stock and align management and stockholder
interests.

Base Salaries

For 1997, the Company's executive officers received base salaries in
accordance with recommendations of the Compensation Committee. In connection
with the Merger, the Company entered into Executive Employment Agreements with
each of the Named Executive Officers. Mr. Curran's Employment Agreement provides
for an annual base salary of $538,400, reviewable no less frequently than
annually.

Bonus Plans

In 1997, the Company continued its previously established management bonus
plans: the Executive Incentive Plan (the "Incentive Plan") and the President's
Award Plan (the "President's Award Plan"). In February 1998, the President's
Award Plan was terminated.

The Incentive Plan provides bonus opportunities based on the Company's
actual performance in consolidated EBITDA (earnings before interest, taxes,
depreciation and amortization) and cash flow from operations compared to planned
goals. Participants are eligible to receive a bonus, expressed as a percentage
of base salary, with the amount of the bonus opportunity varying with the
relative responsibilities of the participants. Under the Incentive Plan, if the
established goals are met, each participant is entitled to receive 70% of the
bonus opportunity, with the remaining 30% available to be granted at the Chief
Executive Officer's discretion. For fiscal 1997, the Company achieved its
planned financial goals. Based on that performance, Mr. Curran recommended, and
the Compensation Committee approved, the award to substantially all the plan
participants of the maximum bonuses for which they were eligible under the
Incentive Plan.

Under the President's Award Plan, if the Company, as a whole, attained its
goals under the Incentive Plan, participants were eligible to earn additional
bonuses of up to 50% of the participant's maximum potential award under the
Incentive Plan based on EBITDA and operating cash flow performance of the
particular operating unit to which the participant was assigned. The amount of
the available bonus under the President's Award Plan was based on a sliding
scale that took into account the operating group's performance above the
established Incentive Plan financial goals for such operating group;
accordingly, bonuses under the President's Award Plan were awarded only if the
performance of an employee's operating group exceeded the financial goals
established for such operating group under the Incentive Plan. The President's
Award Plan was intended to provide a direct link between incentive compensation
and those elements of the Company's financial performance over which a
participant had significant control. For 1997, no bonuses were paid under the
President's Award Plan.

Stock Option and Stock Purchase Programs

In fiscal 1997, the Company provided long-term compensation to its
executive officers solely through the grant of stock options under the Company's
1993 Management Option Plan (the "Management Option Plan") and the Company's
1996 Employee Stock Option Plan (the "Employee Stock Option Plan"). During 1997,
the Compensation Committee awarded options to acquire an aggregate of 151,000
shares of Common Stock to its senior executives (including the Named Executive
Officers) pursuant to the Management Option Plan and the Employee Stock Option
Plan. In determining the size of each stock option grant, the Compensation
Committee took into account the number of shares held by such executive, and
with respect to options for all executive officers other than the Chief
Executive Officer, recommendations by Mr. Curran.

The Company's Employee Stock Purchase Plan (the "Stock Purchase Plan"),
adopted in 1994, was intended to encourage the Company's executive officers and
all other employees to increase their personal investments in the Common Stock,
which is consistent with the Compensation Committee's goal of aligning
management and stockholder interests. The Stock Purchase Plan entitled the
Company's employees to purchase shares of Common Stock at 85% of the price at
which the Common Stock traded in the open market during certain designated
periods.

12
<PAGE> 15

In connection with the Merger, the Management Option Plan, the Employee
Stock Option Plan and the Stock Purchase Plan were terminated. All outstanding
options to acquire shares of Common Stock granted under the Management Option
Plan and the Employee Stock Option Plan, whether vested or not, were cancelled,
and the holders thereof received a cash payment in an amount equal to the
product of (x) the excess, if any, of $34.50 over the exercise price of such
cancelled option multiplied by (y) the number of shares of Common Stock subject
to such cancelled option. All rights to purchase shares of Common Stock with
previously withheld funds under the Stock Purchase Plan were terminated and
participants in the Stock Purchase Plan received a cash payment in the amount
equal to the product of the number of shares of Common Stock subject to purchase
by each participant thereunder and $34.50.

In connection with the Merger, subject to stockholder approval thereof, the
Board of Directors adopted the Management Incentive Plan. Following the Merger,
subject to stockholder approval thereof, the Board of Directors adopted the
Bonus Plan and the 1998 Non-Employee Directors Stock Option Plan. The Bonus Plan
provides bonus opportunities based on the Company's achievement of certain
profit goals. See "Proposal No. 2 -- Proposal to Adopt the Thermadyne Holdings
Corporation Bonus Plan." Under the Management Incentive Plan, options may be
granted to certain employees of the Company who have been designated by a
committee of the Board of Directors as participants in the plan. See "Proposal
No. 3 -- Proposal to Adopt the Thermadyne Holdings Corporation Management
Incentive Plan." Additionally, certain non-employee directors (as described in
the 1998 Non-Employee Directors Stock Option Plan) are eligible to receive
options under the 1998 Non-Employee Directors Stock Option Plan. See "Proposal
No. 4 -- Proposal to Adopt the Thermadyne Holdings Corporation 1998 Non-Employee
Directors Stock Option Plan."

CEO Compensation

In 1997, Mr. Curran's base salary was $538,400 pursuant to an employment
agreement which was terminated in connection with the Merger. At the effective
time of the Merger, the Company entered into a new Executive Employment
Agreement with Mr. Curran which provides for an annual base salary of $538,400
and provides for his participation in an annual bonus opportunity of not less
than 100% of his base salary. In addition, Mr. Curran was granted an option to
purchase 30,600 shares of Common Stock in fiscal 1997 and in May 1998 was
granted an option to purchase 99,397 shares of Common Stock in connection with
the Merger. In establishing the total amount of Mr. Curran's option grants
during 1997, the Compensation Committee took into consideration Mr. Curran's
performance as Chief Executive Officer and the availability of options under the
Management Option Plan and the Employee Stock Option Plan.

Tax Considerations

In formulating its compensation policies, the Compensation Committee
considers the relevant provisions, including Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), that limit the deductibility of
certain executive compensation and the consequences to the Company if the
compensation paid to the Company's executive officers is not deductible.

COMPENSATION COMMITTEE

PETER T. GRAUER
JOHN F. FORT III
WILLIAM F. DAWSON, JR.

13
<PAGE> 16

CORPORATE PERFORMANCE

The following graph shows a comparison of cumulative total returns for the
Company, the Nasdaq Stock Market Index and the Standard & Poor's Midcap 400
Manufacturing (Specialized Industries) Index (the "S&P Midcap 400 Mfg Index")
for the period from May 13, 1994 (the date of the Company's original listing
after its 1994 restructuring) to December 31, 1997. The comparison assumes $100
was invested on May 13, 1994 in each of the Common Stock, the Nasdaq Stock
Market Index, and the S&P Midcap 400 Mfg Index, and assumes compounded daily
returns with reinvestment of dividends.

COMPARISON OF TOTAL CUMULATIVE RETURN AMONG THERMADYNE
HOLDINGS CORPORATION, THE NASDAQ STOCK MARKET INDEX (U.S. COMPANIES),
AND THE S&P MIDCAP 400 MFG INDEX
MAY 13, 1994-DECEMBER 31, 1997 (ANNUAL BASIS)

<TABLE>
<CAPTION>
NASDAQ S&P MIDCAP THERMADYNE
MEASUREMENT PERIOD STOCK 400 MFG HOLDINGS
(FISCAL YEAR COVERED) MARKET INDEX INDEX CORPORATION
<S> <C> <C> <C>
5/13/94 100.00 100.00 100.00
12/30/94 105.77 111.24 91.67
12/29/95 149.60 135.05 142.16
12/31/96 183.97 171.01 223.53
12/31/97 225.71 190.48 231.37
</TABLE>

The stock price performance depicted in the above graph is not necessarily
indicative of future price performance of the Common Stock.

14
<PAGE> 17

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

DLJ Capital Funding, Inc. received customary fees and reimbursement of
expenses in connection with the arrangement and syndication of the New Credit
Facility and as a lender thereunder. DLJSC also received customary fees in
connection with the distribution of the Senior Subordinated Notes and the
Debentures, and the offer to purchase and consent solicitation for the Company's
outstanding senior notes and subordinated notes. Additionally, DLJ Bridge
Finance, Inc. received customary fees in connection with its commitment to
provide bridge financing in the event that the issuance of the Senior
Subordinated Notes and the Debentures did not occur. The aggregate fees received
by these DLJ entities for these services were approximately $20 million. In the
opinion of management, the fees and other compensation provided to DLJ Capital
Funding, Inc., DLJSC and DLJ Bridge Finance, Inc. reasonably reflect the
benefits received by the Company.

Pursuant to a letter agreement dated January 16, 1998 (the "Engagement
Letter"), DLJMB engaged DLJSC to act as DLJMB's exclusive financial advisor with
respect to the Merger and, following the Merger, to act as the Company's
exclusive financial advisor for a period of five years (the "Engagement Period")
with respect to the review and analysis of financial and structural alternatives
available to the Company. Upon the consummation of the Merger, DLJMB's
obligations under the Engagement Letter were assumed by the Company.

As compensation for the services to be provided by DLJSC under the
Engagement Letter, DLJSC received a fee of $4,000,000 upon the consummation of
the Merger and is entitled to receive an annual advisory fee of $300,000,
payable quarterly in equal installments of $75,000. DLJSC is also entitled to
reimbursement for all of its out-of-pocket expenses incurred in connection with
its engagement.

During the Engagement Period, DLJSC is also entitled to act as the
Company's exclusive financial advisor, sole placement agent, sole initial
purchaser, sole managing underwriter or sole dealer-manager, as the case may be,
with respect to any Transaction (as hereinafter defined) the Company determines
to pursue. The term "Transaction" includes the following: (i) the sale, merger,
consolidation or any other business combination, in one or a series of
transactions, involving any portion of the business, securities or assets of the
Company; (ii) the acquisition (and any related matters such as financings,
divestitures, etc.) in one or a series of transactions, of all or a portion of
the business, securities or assets of another entity or person; (iii) any
recapitalization, refinancing, repurchase or restructuring of the Company's
equity or debt securities or indebtedness or any amendments or modifications to
the Company's debt securities or indentures whether or not in connection
therewith, involving, by or on behalf of the Company, an offer to purchase or
exchange for cash, property, securities, indebtedness or other consideration, or
a solicitation of consents, waivers of authorizations with respect thereto; (iv)
any spin-off, split-off or other extraordinary dividend of cash, securities or
other assets to stockholders of the Company; or (v) any sale of securities of
the Company effected pursuant to a private sale or an underwritten public
offering.

The Company has agreed to indemnify and hold harmless DLJSC and its
affiliates, and the respective directors, officers, agents and employees of
DLJSC and its affiliates (each, an "Indemnified Person") from and against any
losses, claims, damages, judgments, assessments, costs and other liabilities and
will reimburse such Indemnified Persons for all fees and expenses (including the
reasonable fees and expenses of counsel) as they are incurred in investigating,
preparing, pursuing or defending any claim, action, proceeding or investigation
arising out of or in connection with advice or services rendered or to be
rendered by an Indemnified Person pursuant to the Engagement Letter, the
transactions contemplated by the Engagement Letter or any Indemnified Person's
action or inactions in connection with any such advice, services or
transactions, other than liabilities or expenses that are determined by a
judgment of a court of competent jurisdiction to have resulted solely from such
Indemnified Person's gross negligence or willful misconduct.

The Engagement Letter makes available the resources of DLJSC concerning a
variety of financial and operational matters. The services that have been and
will continue to be provided by DLJSC could not otherwise be obtained by the
Company without the addition of personnel or the engagement of outside

15
<PAGE> 18

professional advisors. In the opinion of management, the fees provided for under
the Engagement Letter reasonably reflect the benefits received and to be
received by the Company.

Messrs. Grauer, Dawson and Schloss, directors of the Company, are officers
of DLJMB II Inc., which is an affiliate of each of DLJMB, DLJSC, DLJ Capital
Funding, Inc. and DLJ Bridge Finance, Inc.

The Company has entered into the Investors' Agreement with the DLJMB Funds
and the senior executive officers of the Company. The Investors' Agreement,
among other things, contains provisions regarding the composition of the Board
of Directors of the Company, grants the parties thereto certain registration
rights and contains provisions requiring the senior executive officers parties
thereto to sell their shares of Common Stock in connection with certain sales of
Common Stock by the DLJMB Funds and granting the senior executive officers
parties thereto the right to include a portion of their shares of Common Stock
in certain sales of Common Stock by the DLJMB Funds.

In connection with the Merger, a portion of the funds required to purchase
the shares under the Investment Program were provided through loans made by the
Company. Messrs. Curran, Tate, Maddox and Drury and Ms. Josephson received
secured, non-recourse loans from the Company in the amount of $1,249,890,
$367,606, $237,630, $223,222 and $288,413, respectively. The loans bear interest
at the rate of 5.69% per annum and are due in full on May 22, 2006. Upon the
termination of a participant's employment with the Company, other than as a
result of the participant's death, any outstanding loan will become due and
payable.

(PROPOSAL NO. 2)

PROPOSAL TO ADOPT THE THERMADYNE
HOLDINGS CORPORATION BONUS PLAN

BACKGROUND AND PURPOSE

The Board of Directors adopted the Bonus Plan (a copy of which is attached
hereto as Exhibit A) and directed that the Bonus Plan be submitted to the
stockholders of the Company for their approval. The effective date of the Bonus
Plan is January 1, 1999, subject to stockholder approval. The Bonus Plan
provides an annual bonus opportunity to employees of the Company and its
subsidiaries dependent upon the Company's attainment of its financial
objectives.

ELIGIBILITY TO PARTICIPATE IN PLAN

Participants in the Bonus Plan are employees of the Company or its
subsidiaries who have been designated in writing in the sole discretion of the
Chairman of the Board of Directors.

PERFORMANCE-BASED BONUS

For each fiscal year or other performance period designated by the
Compensation Committee, the Compensation Committee will establish in writing,
subject to ratification by the Board of Directors, the following: (i) an "Award
Opportunity" for each participant, which is a percentage of such participant's
base salary accrued during such performance period, (ii) performance goals at
which bonuses are payable, and (iii) the percentage of the Award Opportunity for
each participant payable at each performance goal. Such Compensation Committee's
determination and Board of Directors' ratification must be made no later than
ninety days after the commencement of the applicable performance period and in
no event after twenty-five percent of such performance period has elapsed, and
thereafter the Compensation Committee may not increase the amount of
performance-based bonus payable that would otherwise be due upon the attainment
of such performance goals for such period.

The performance goals established by the Compensation Committee will be
comprised of one or more of the following measures applicable to the Company or
any of its business units: earnings before interest, taxes, depreciation and
amortization; cash flow; net sales; pre-tax income before allocation of
corporate overhead and
16
<PAGE> 19

bonus; earnings per share; earnings before interest and taxes; net income;
division, group or corporate financial goals; return on stockholders' equity;
return on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of the Common Stock or any other
publicly-traded securities of the Company; market share; gross profits; economic
value-added models; comparisons with various stock market indices; increase in
number of customers; and/or reductions in cost.

Following the end of each performance period, the Compensation Committee
will determine whether any performance goal has been attained. The amount of
bonus payable for any performance period will be the percentage of a
participant's Award Opportunity determined by reference to the performance goals
attained by the Company. No bonus will be paid to any participant who is a
"covered employee" of the Company (as defined in Section 162(m) of the Code) for
a performance period unless and until the Compensation Committee certifies in
writing that a performance goal has been attained. The maximum bonus amount that
may be paid to any single participant under the Bonus Plan for a performance
period may not exceed $2 million, as adjusted by the change in the consumer
price index since the effective date of the Bonus Plan.

NONPERFORMANCE-BASED BONUS

The Chairman of the Board of Directors may establish bonus opportunities
for participants upon such terms and conditions as the Chairman may determine in
his discretion, subject to any limitations established by the Board of
Directors. Such bonus is not intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code.

PAYMENT

Any bonus under the Bonus Plan for a performance period will be distributed
after the end of the Company's fiscal year or other performance period. Except
as otherwise provided in the Bonus Plan, only participants who are employees
actively at work and on the payroll of the Company or its subsidiaries on the
date of distribution, or who have terminated employment with the Company or its
subsidiaries as a result of retirement, death or disability before such date,
are entitled to payment of any bonus under the Bonus Plan. In the event of a
participant's retirement, death, disability or illness requiring an absence from
work at the Company or its subsidiaries of more than two months during a
performance period, a prorated bonus for the period of service actually worked
by the participant during such period is payable. Participants who have
terminated employment with the Company or its subsidiaries for any reason other
than as a result of retirement, death or disability before the date of
distribution are not entitled to payment of any bonus under the Bonus Plan for
the performance period, except as otherwise provided in a written individual
agreement between the Company or its subsidiaries and such participant or
otherwise determined by the Compensation Committee in its discretion.

ADMINISTRATION

The Bonus Plan will be administered and interpreted by the Compensation
Committee, which is comprised solely of two or more outside directors (as
defined in Section 162(m) of the Code). The Compensation Committee may delegate
its administrative duties; provided, however, that with respect to any
participant who is a "covered employee" of the Company (as defined in Section
162(m) of the Code), the Compensation Committee has sole and exclusive authority
to administer the Bonus Plan unless any delegation of duties by the Compensation
Committee would not contravene Section 162(m) of the Code.

AMENDMENT OR TERMINATION

The Company may amend or terminate the Bonus Plan at any time or from time
to time; provided, however, that no amendment shall cause any performance-based
bonus payable under the Bonus Plan not to qualify under Section 162(m) of the
Code and no amendment or termination of the Bonus Plan shall adversely impact
any bonus awarded to a participant with respect to a prior performance period.

17
<PAGE> 20

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The statements in the following paragraph are based on statutory authority
and judicial and administrative interpretations as of the date of this Proxy
Statement, which authorities and interpretations are subject to change at any
time (possibly with retroactive effect). The law is technical and complex and
the discussion below represents only a general summary.

With certain exceptions, Section 162(m) of the Code denies a deduction to
publicly-held corporations for compensation paid to certain executive officers
in excess of $1 million per executive per taxable year. One such exception
applies to certain performance-based compensation, provided that such
compensation has been approved by stockholders in a separate vote and certain
other requirements are met. In general, the Company intends for awards granted
under the Bonus Plan to qualify for the performance-based compensation exception
to Section 162(m) of the Code.

STOCKHOLDER APPROVAL

No awards shall be granted under the Bonus Plan until after such plan has
been approved by the holders of a majority of the shares of Common Stock
present, in person or by proxy, and entitled to vote thereon at a meeting of the
stockholders of the Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE THERMADYNE
HOLDINGS CORPORATION BONUS PLAN.

(PROPOSAL NO. 3)

PROPOSAL TO ADOPT THE
THERMADYNE HOLDINGS CORPORATION
MANAGEMENT INCENTIVE PLAN

BACKGROUND AND PURPOSE

In connection with the Merger, the Board of Directors adopted the
Management Incentive Plan (a copy of which is attached hereto as Exhibit B) and
directed that the Management Incentive Plan be submitted to the stockholders of
the Company for their approval. The Management Incentive Plan is intended to
promote the interests of the Company and its stockholders by (i) attracting and
retaining exceptional executive personnel and other key employees of the Company
and its subsidiaries; (ii) motivating such employees by means of
performance-related incentives to achieve longer-range performance goals; and
(iii) enabling such employees to participate in the long-term growth and
financial success of the Company.

ELIGIBILITY TO PARTICIPATE IN THE PLAN

Any employee of the Company or the Company's subsidiaries, including any
officer or employee-director of the Company or any subsidiary, is eligible to be
designated by the Compensation Committee of the Board of Directors as a
participant in the Management Incentive Plan.

ADMINISTRATION

The Management Incentive Plan will be administered by the Compensation
Committee of the Board of Directors. Subject to the terms of the plan,
applicable law and contractual restrictions affecting the Company, and in
addition to other express powers and authorizations conferred on the
Compensation Committee by the Management Incentive Plan, the Compensation
Committee shall have full power and authority to: (i) designate participants in
the Management Incentive Plan; (ii) determine the type or types of options to be
granted to a participant; (iii) determine the number of shares of Common Stock
to be covered by, or with respect to which payments, rights or other matters are
to be calculated in connection with, options; (iv) determine the terms and
conditions of any option and option agreement; (v) determine whether, to what
extent, and under what circumstances options may be settled or exercised in
cash, shares of Common Stock or

18
<PAGE> 21

other securities, other options or other property, or canceled, forfeited or
suspended and the method or methods by which options may be settled, exercised,
canceled, forfeited or suspended; (vi) determine whether, to what extent, and
under what circumstances cash, shares of Common Stock, other securities, other
options, other property and other amounts payable with respect to an option
shall be deferred either automatically or at the election of the holder thereof
or of the Compensation Committee; (vii) interpret and administer the Management
Incentive Plan and any instrument or agreement relating to, or option made
under, the Management Incentive Plan; (viii) establish, amend, suspend or waive
such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Management Incentive Plan; and (ix) make
any other determination and take any other action that the Compensation
Committee deems necessary or desirable for the administration of the Management
Incentive Plan.

Unless otherwise expressly provided in the Management Incentive Plan, all
designations, determinations, interpretations and other decisions under or with
respect to the Management Incentive Plan or any option shall be within the sole
discretion of the Compensation Committee, may be made at any time and shall be
final, conclusive and binding upon all persons, including the Company, any
subsidiary of the Company, any participant, any holder or beneficiary of any
option, any stockholder and any employee.

The Board may amend, alter, suspend, discontinue or terminate the
Management Incentive Plan or any portion thereof at any time; provided that no
such amendment, alteration, suspension, discontinuation or termination shall be
made without stockholder approval if such approval is necessary to comply with
any tax or regulatory requirement for which or with which the Board of Directors
deems it necessary or desirable to qualify or comply.

GRANT OF OPTIONS

Subject to adjustment for certain changes in the capital structure of the
Company, the aggregate number of shares of Common Stock with respect to which
options may be granted under the Management Incentive Plan shall be 500,000. If
and to the extent that any shares of Common Stock covered by an option granted
under the Management Incentive Plan or to which such option relates are
forfeited, or if such an option is settled for cash or otherwise terminates or
is canceled without the delivery of the shares of Common Stock, then the shares
of Common Stock covered by such option, or to which such option relates, or the
number of shares of Common Stock otherwise counted against the aggregate number
of shares of Common Stock with respect to which options may be granted, to the
extent of any such settlement, forfeiture, termination or cancellation, shall,
in the calendar year in which such settlement, forfeiture, termination or
cancellation occurs, again become shares of Common Stock with respect to which
options may be granted unless any dividends have been paid thereon prior to such
settlement, forfeiture, termination or cancellation. In addition, shares of
Common Stock tendered in satisfaction or partial satisfaction of the exercise
price of any option or any tax withholding obligations will again become shares
of Common Stock with respect to which options may be granted. Notwithstanding
the foregoing and subject to adjustment for certain changes in the capital
structure of the Company, no employee of the Company may receive options under
the Management Incentive Plan in any calendar year that relate to more than
250,000 shares of Common Stock.

EXERCISE PRICE AND OTHER TERMS

Subject to the provisions of the Management Incentive Plan and contractual
restrictions affecting the Company, the Compensation Committee shall have sole
and complete authority to determine the employees to whom options shall be
granted, the number of shares of Common Stock to be covered by each option, the
exercise price therefor and the conditions and limitations applicable to the
exercise of the option. Furthermore, the Compensation Committee, in its sole
discretion, shall establish the exercise price at the time each option is
granted; provided, that in no event shall the exercise price per share of Common
Stock be less than the fair market value of a share of Common Stock on the date
of grant. Each option granted pursuant to the Management Incentive Plan shall be
exercisable at such times and subject to such terms and conditions as the
Compensation Committee may, in its sole discretion, specify in the applicable
option agreement or thereafter. The Compensation Committee may impose such
conditions with respect to the exercise of options as it may deem necessary or
advisable.
19
<PAGE> 22

No shares of Common Stock shall be delivered pursuant to any exercise of an
option until payment in full of the exercise price, or adequate provision
therefor, is received by the Company. Such payment may be made (i) in cash; (ii)
in shares of Common Stock owned by the participant for at least six months;
(iii) by a combination of cash and shares of Common Stock; or (iv) in such other
manner as permitted by the Compensation Committee at the time of grant or
thereafter.

Each option agreement shall contain such terms as the Compensation
Committee may, in its sole discretion, determine concerning vesting, forfeiture,
the Company's rights of repurchase of shares of Common Stock acquired upon
exercise of an option, and/or the effects of termination or suspension of a
participant's employment upon the exercisability of any option granted
thereunder. Furthermore, the Compensation Committee, in its sole discretion, may
provide in an option agreement for the accelerated vesting of an option in the
event of a change in control.

NON-TRANSFERABILITY

Except to the extent otherwise provided in an option agreement, no option
shall be assigned, alienated, pledged, attached, sold or otherwise transferred
or encumbered by a participant in the Management Incentive Plan, except by will
or the laws of descent and distribution.

TERMINATION OF PLAN

The Board of Directors' and the Compensation Committee's authority to grant
options under the Management Incentive Plan shall terminate on the tenth
anniversary of the effective date of the Management Incentive Plan. Unless
otherwise expressly provided in the Management Incentive Plan or in an
applicable option agreement, any option granted thereunder may, and the
authority of the Board of Directors or the Compensation Committee to amend,
alter, adjust, suspend, discontinue, or terminate any such option, or to waive
any conditions or rights under any such option, shall continue after the
authority for grant of new options thereunder has been exhausted.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

See "Certain Federal Income Tax Consequences Related to Option Grants"
below for a discussion of certain tax matters regarding the Management Incentive
Plan.

STOCKHOLDER APPROVAL

The following table provides additional information related to certain
options that were granted under the Management Incentive Plan, subject to
stockholder approval of the Management Incentive Plan by the holders of a
majority of the shares of Common Stock present, in person or by proxy, and
entitled to vote thereon at a meeting of the stockholders of the Company. If the
Management Incentive Plan is approved by the stockholders of the Company, the
executive officers of the Company will be eligible to receive additional

20
<PAGE> 23

option grants in the future under the Management Incentive Plan, subject to
certain restrictions set forth in the Management Incentive Plan.

NEW PLAN BENEFITS

<TABLE>
<CAPTION>
NUMBER OF OPTION
NAME AND POSITION SHARES(1)
- ----------------- ----------------
<S> <C>
Randall E. Curran........................................... 99,397
Chairman of the Board, President and Chief Executive
Officer
James H. Tate............................................... 51,686
Senior Vice President and Chief Financial Officer
Stephanie N. Josephson...................................... 10,603
Vice President, General Counsel and Corporate Secretary
Thomas C. Drury............................................. 10,603
Vice President -- Human Resources
Robert D. Maddox............................................ 10,603
Vice President -- Controller
Executive Group............................................. 182,892
Non-Executive Director Group................................ --
Non-Executive Officer Employee Group........................ 119,274
</TABLE>

- ---------------

(1) All such options were granted at fair market value on the date of grant.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE THERMADYNE
HOLDINGS CORPORATION MANAGEMENT INCENTIVE PLAN.

21
<PAGE> 24

(PROPOSAL NO. 4)

PROPOSAL TO ADOPT THE THERMADYNE
HOLDINGS CORPORATION 1998 NON-EMPLOYEE
DIRECTORS STOCK OPTION PLAN

BACKGROUND AND PURPOSE

At a meeting of the Board of Directors held on August 4, 1998, the Board of
Directors adopted the 1998 Non-Employee Directors Stock Option Plan (a copy of
which is attached hereto as Exhibit C) and directed that the 1998 Non-Employee
Directors Stock Option Plan be submitted to the stockholders for their approval.
The 1998 Non-Employee Directors Stock Option Plan is intended to encourage
qualified persons to become and remain directors of the Company and to provide
directors of the Company with a direct stake in its success.

ELIGIBILITY TO PARTICIPATE IN THE PLAN

All directors of the Company who are not (i) employees of the Company or
any of its subsidiaries or (ii) any beneficial owner of 10% or more of the
Common Stock or an affiliate thereof are eligible to receive options under the
1998 Non-Employee Directors Stock Option Plan (each an "eligible director").

ADMINISTRATION

The 1998 Non-Employee Directors Stock Option Plan will be administered by
the Board of Directors. The Board of Directors shall have the power to construe
and interpret the 1998 Non-Employee Directors Stock Option Plan, to interpret
all questions (including factual questions) arising thereunder, and to adopt and
amend such rules for the administration of the 1998 Non-Employee Directors Stock
Option Plan as it may deem desirable. The determination of the Board of
Directors on all matters relating to the 1998 Non-Employee Directors Stock
Option Plan or any option granted thereunder shall be final.

GRANT OF OPTIONS

Subject to adjustment for certain changes in the capital structure of the
Company, the aggregate number of shares of Common Stock that have been reserved
for issuance pursuant to the 1998 Non-Employee Directors Stock Option Plan is
20,000. The shares of Common Stock delivered by the Company upon exercise of
options granted pursuant to the 1998 Non-Employee Directors Stock Option Plan
may be treasury shares, newly issued shares or both. If and to the extent an
option expires or terminates for any reason without having been exercised in
full, the shares of Common Stock reserved for issuance in connection with such
options shall become available for issuance in connection with new options
granted under the 1998 Non-Employee Directors Stock Option Plan.

Pursuant to the terms of the 1998 Non-Employee Directors Stock Option Plan,
on August 14, 1998, the two current eligible directors (Messrs. Fort and Poling)
were each granted an option to acquire 3,000 shares of Common Stock, subject to
stockholder approval of the 1998 Non-Employee Directors Stock Option Plan.
Thereafter, each new eligible director shall be granted an option to acquire
3,000 shares of Common Stock upon his or her election to the Board of Directors.
On November 1 of each year (beginning in 1999), each eligible director who is
serving on the Board of Directors at that time shall be granted an option to
acquire 500 shares of Common Stock.

EXERCISE PRICE AND OTHER TERMS

The exercise price per share established for the initial options granted on
August 4, 1998 was $34.50. Subject to adjustment for certain changes in the
capital structure of the Company, the exercise price per share for each option
hereafter granted shall be 100% of the fair market value of a share of Common
Stock on the option grant date. Each option granted pursuant to the 1998
Non-Employee Directors Stock Option Plan shall be fully exercisable at any time
on or after the date of grant. Each option shall be exercisable no later than
ten

22
<PAGE> 25

years from the date of grant, unless terminated earlier pursuant to the terms of
the 1998 Non-Employee Directors Stock Option Plan.

An option shall be exercisable by delivery during the option term to the
Company of (i) written notice of the exercise specifying the number of shares to
be purchased and (ii) full payment in cash for the shares of Common Stock being
acquired thereunder.

NON-TRANSFERABILITY

Options granted pursuant to the 1998 Non-Employee Directors Stock Option
Plan shall not be assignable or transferable other than by will or the laws of
descent and distribution and may be exercised, during the grantee's lifetime,
only by the grantee or his or her guardian or legal representative; provided,
however, a grantee may in a manner permitted by the Board of Directors (a)
designate in writing a beneficiary to exercise an option after his or her death
and (b) transfer an option to a revocable inter vivos trust of which the grantee
is both the settlor and trustee.

TERMINATION OF PLAN

The 1998 Non-Employee Directors Stock Option Plan and all rights of
eligible directors thereunder will terminate on the tenth anniversary of the
effective date of the 1998 Non-Employee Directors Stock Option Plan, or at any
time prior thereto at the discretion of the Board of Directors; provided,
however, that no such termination will affect any option then outstanding under
the 1998 Non-Employee Directors Stock Option Plan.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

See "Certain Federal Income Tax Consequences Related to Option Grants"
below for a discussion of certain tax matters regarding the 1998 Non-Employee
Directors Stock Option Plan.

STOCKHOLDER APPROVAL

No option granted under the 1998 Non-Employee Directors Stock Option Plan
shall become exercisable until after such plan has been approved by the holders
of a majority of the shares of Common Stock present, in person or by proxy, and
entitled to vote thereon at a meeting of the stockholders of the Company. If
such approval is not obtained before the first anniversary of the Effective
Date, all outstanding options under the 1998 Non-Employee Directors Stock Option
Plan shall expire and no further options shall be granted thereunder.

The following table provides additional information related to certain of
the options which were granted subject to stockholder approval of the 1998
Non-Employee Directors Stock Option Plan. If the 1998 Non-Employee Directors
Stock Option Plan is approved by the stockholders of the Company, the
non-employee directors of the Company will be eligible to receive additional
option grants in the future under such plan, subject to certain restrictions set
forth therein.

NEW PLAN BENEFITS

<TABLE>
<CAPTION>
NUMBER OF OPTION
NAME AND POSITION SHARES(1)
----------------- ----------------
<S> <C>
John F. Fort III, Director.................................. 3,000
Harold A. Poling, Director.................................. 3,000
</TABLE>

- ---------------

(1) All such options were granted at $34.50 per option share.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE THERMADYNE
HOLDINGS CORPORATION 1998 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN.

23
<PAGE> 26

CERTAIN FEDERAL INCOME TAX CONSEQUENCES RELATED TO OPTION GRANTS

The discussion below is based on federal income tax law and authorities as
of the date of the Proxy Statement, which are subject to change at any time and
possibly on a retroactive basis. The law is technical and complex and the
discussion represents only a general summary of some of the applicable
provisions of federal income tax law.

GRANT OF OPTIONS

A grantee of an option (a "Holder") will realize no taxable income at the
time an option is granted under the Management Incentive Plan or the 1998
Non-Employee Directors Stock Option Plan.

TREATMENT OF THE HOLDERS

All grants under the Management Incentive Plan and the 1998 Non-Employee
Directors Stock Option Plan will be non-qualified stock options. With regard to
non-qualified stock options, whether granted under the Management Incentive Plan
or the 1998 Non-Employee Directors Stock Option Plan, ordinary income generally
will be realized by the Holder at the time of exercise of an option, except with
respect to shares which are subject to a substantial risk of forfeiture and
which are not transferable on the date of the exercise of the option ("Nonvested
Shares"), if any. The amount of income recognized by a Holder on exercise of a
non-qualified option (other than with respect to nonvested shares) generally
will be equal to the difference between the fair market value of the shares on
the date of exercise and the exercise price. In the case of Holders who are
employees, tax withholding is required on such income. When a Holder disposes of
shares acquired upon the exercise of the option, any amount received in excess
of the fair market value of the shares on the date of exercise will be treated
as long or short-term capital gain, depending upon the holding period of the
shares, and if the amount received is less than the fair market value of the
shares on the date of exercise, the loss will be treated as long or short-term
capital loss, depending upon the holding period of the shares. The Holder's
holding period for shares will begin on the day after the date of exercise.

With respect to any shares acquired upon the exercise of non-qualified
options which are Nonvested Shares, Section 83(b) of the Code permits the Holder
to elect, not more than 30 days after the date of exercise of the option to
acquire the Nonvested Shares, to include as ordinary income the difference
between the fair market value of the Nonvested Shares and the exercise price at
the time of exercise. If no Section 83(b) election is made, then the ordinary
income inclusion occurs on the date the Nonvested Shares become vested (when
they are no longer subject to a substantial risk of forfeiture or are
transferable), and the amount of such inclusion will be the excess of the fair
market value of the shares at the time they vest over the exercise price. The
Holder's holding period in Nonvested Shares will begin on the day after the date
of exercise, if a Section 83(b) election is made; otherwise, the holding period
will begin the day after the shares vest.

If a Holder pays the exercise price by tendering other vested shares of
Common Stock then owned by such Holder, the difference between the fair market
value and adjusted basis of the tendered shares will not produce a taxable gain
or loss to the Holder; however, the Holder's tax basis for an equal number of
acquired shares will be the same as the Holder's tax basis for the tendered
shares. The remaining acquired shares will have an original tax basis equal to
the sum of the amount paid in cash, if any, plus any amount which the Holder is
required to recognize as income as a result of the exercise of the option.

Any Holder who is an officer of the Company or a beneficial owner of more
than 10% of any class of registered equity securities of the Company should
consult with his or her tax advisor as to whether the timing of income
recognition is deferred for any period following the exercise of a non-qualified
stock option (i.e. the "Deferral Period"). If there is a Deferral Period, absent
a written election pursuant to Section 83(b) of the Code filed with the Internal
Revenue Service within 30 days after the date of exercise of the option, income
recognition will be deferred until the expiration of the Deferral Period.

24
<PAGE> 27

TREATMENT OF THE COMPANY

The Company generally will be entitled to a deduction for federal income
tax purposes at the same time and in the same amount as a Holder is considered
to have realized ordinary income in connection with the exercise of a
non-qualified stock option granted under the Management Incentive Plan or the
1998 Non-Employee Directors Stock Option Plan, subject to compliance with the
requirements of Section 162 of the Code. With respect to the Named Executive
Officers, the deduction for compensation during the taxable year is limited to
$1,000,000 for each such person unless the requirements for the
"performance-based compensation" exception of Section 162(m)(4)(C) of the Code
have been satisfied.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of the Common Stock, to
file with the Commission initial reports of beneficial ownership and reports of
changes in beneficial ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than 10% beneficial owners are
required by the Commission to furnish the Company with copies of all Section
16(a) reports they file. To the Company's knowledge, based solely on a review of
the copies of such reports furnished to the Company, all Section 16(a) filing
requirements applicable to its officers and directors were complied with for the
year ended December 31, 1997.

OTHER MATTERS

The Board of Directors knows of no other matters to be brought before the
Annual Meeting. However, if any other matters are properly brought before the
Annual Meeting, it is the intention of the attorneys-in-fact named in the
accompanying proxy to vote in accordance with their judgment on such matters.

VOTING REQUIREMENTS

With regard to the Proposal for the Election of Directors, votes may be
cast for or votes may be withheld from each nominee. Directors will be elected
by plurality vote. Therefore, votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may not be specified with
respect to the election of directors and, under Delaware law, broker non-votes
(as explained below) will have no effect on the outcome of the election of
directors. In general, a broker who holds securities in street name has limited
authority to vote on matters submitted at a stockholders meeting in the absence
of specific instructions from the beneficial owner. In the absence of
instructions from the beneficial owner or authorization from the National
Association of Securities Dealers, Inc. (the "NASD") to vote on specific matters
without the necessity of obtaining instructions from the beneficial owner, a
broker will specify a "non-vote" on particular matters. For purposes of Delaware
law, a broker non-vote is counted as present for quorum purposes, but is
generally excluded entirely from determining whether a particular matter has
been approved. Typically, however, brokers are permitted by the NASD to vote for
the election of directors without instructions from the beneficial owner.

With regard to the Proposal to Adopt the Thermadyne Holdings Corporation
Bonus Plan, votes may be cast for or against the proposal, or stockholders may
abstain from voting on such matter. Approval of the proposal requires the
affirmative vote of at least a majority of the shares of Common Stock present or
represented by proxy at the meeting and entitled to vote. Therefore, abstentions
will have the effect of votes against the approval of the proposal and, under
Delaware law, broker non-votes will have no effect on the outcome.

With regard to the Proposal to Adopt the Thermadyne Holdings Corporation
Management Incentive Plan, votes may be cast for or against the proposal, or
stockholders may abstain from voting on such matter. Approval of the proposal
requires the affirmative vote of at least a majority of the shares of Common
Stock present or represented by proxy at the meeting and entitled to vote.
Therefore, abstentions will have the effect

25
<PAGE> 28

of votes against the approval of the proposal and, under Delaware law, broker
non-votes will have no effect on the outcome.

With regard to the Proposal to Adopt the Thermadyne Holdings Corporation
1998 Non-Employee Directors Stock Option Plan, votes may be cast for or against
the proposal, or stockholders may abstain from voting on such matter. Approval
of the proposal requires the affirmative vote of at least a majority of the
shares of Common Stock present or represented by proxy at the meeting and
entitled to vote. Therefore, abstentions will have the effect of votes against
the approval of the proposal and, under Delaware law, broker non-votes will have
no effect on the outcome.

If no directions are specified in any duly signed and dated proxy card
received by the Company, the shares represented by that proxy card will be
counted as present for quorum purposes and will be voted by the
attorneys-in-fact named in the proxy FOR the election of the director nominees
recommended by the Board of Directors, FOR the approval of the adoption of the
Thermadyne Holdings Corporation Bonus Plan, FOR the approval of the adoption of
the Thermadyne Holdings Corporation Management Incentive Plan, FOR the approval
of the adoption of the Thermadyne Holdings Corporation 1998 Non-Employee
Directors Stock Option Plan, and in accordance with the discretion of the named
attorneys-in-fact on other matters, if any, properly brought before the Annual
Meeting.

INDEPENDENT AUDITORS

Ernst & Young LLP served as the Company's independent auditors for the
fiscal year ended December 31, 1997, and it is expected they will be reappointed
by the Board of Directors to serve in that capacity again for the fiscal year
ending December 31, 1998. No member of Ernst & Young LLP or any of its
associates has any financial interest in the Company or its affiliates. It is
anticipated that a representative of Ernst & Young LLP will be available at the
Annual Meeting to respond to appropriate questions and will be given an
opportunity to make a statement on behalf of Ernst & Young LLP, if desired.

STOCKHOLDER PROPOSALS

Stockholder proposals to be included in the Proxy Statement relating to the
1999 Annual Meeting of Stockholders of the Company must be received by no later
than December 31, 1998, at the Company's principal executive offices, 101 South
Hanley Road, Suite 300, St. Louis, Missouri 63105, Attention: Corporate
Secretary. Stockholders of the Company who intend to nominate candidates for
election as a director or to bring business before the meeting must also comply
with the applicable procedures set forth in the Company's Bylaws. The Company
will furnish copies of such Bylaw provisions upon written request to the
Corporate Secretary of the Company at the aforementioned address.

AVAILABILITY OF FORM 10-K

The Company will provide to any stockholder, without charge, upon written
request of such stockholder, a copy of the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, as filed with the Commission. Such requests
should be addressed to the Company's principal executive offices, 101 South
Hanley Road, Suite 300, St. Louis, Missouri, 63105, Attention: Investor
Relations.

The foregoing Notice and Proxy Statement are sent by order of the Board of
Directors.

STEPHANIE N. JOSEPHSON
Corporate Secretary

October 6, 1998

26
<PAGE> 29

EXHIBIT A

THERMADYNE HOLDINGS CORPORATION

BONUS PLAN

1. PURPOSE

The Bonus Plan (the "Plan") provides an annual bonus opportunity to
employees of Thermadyne Holdings Corporation (the "Company") and its
subsidiaries dependent upon the Company's attainment of its financial
objectives.

2. ELIGIBILITY

The Chairman (the "Chairman") of the Board of Directors of the Company (the
"Board") in his or her sole discretion may designate in writing employees of the
Company or its subsidiaries as participants in the Plan. The adoption of the
Plan shall not be deemed to give any employee a right to be awarded any bonus
under the Plan.

3. PERFORMANCE-BASED BONUS

a. The Compensation Committee (the "Committee") of the Board shall
establish in writing an "Award Opportunity" for each participant in respect of
each fiscal year or other performance period designated by the Committee, which
shall be a percentage of such participant's base salary accrued during such
performance period. The Committee also shall establish in writing performance
goals in respect of each performance period, including the Profit Plan (i.e.,
the performance goal designated as a reference point for the performance
period), at which bonuses are payable and the percentage of the Award
Opportunity for each participant payable at each performance goal. The
performance goals may be expressed as a percentage of the Profit Plan. The
amount of bonus payable for any performance period shall be the percentage of
such participant's Award Opportunity determined by reference to the performance
goals attained by the Company.

b. The performance goals established by the Committee shall be comprised of
one or more of the following measures applicable to the Company or any of its
business units:

earnings before interest, taxes, depreciation and amortization; cash
flow; net sales; pre-tax income before allocation of corporate overhead
and bonus; earnings per share; earnings before interest and taxes; net
income; division, group or corporate financial goals; return on
stockholders' equity; return on assets; attainment of strategic and
operational initiatives; appreciation in and/or maintenance of the price
of the common stock of the Company or any other publicly-traded
securities of the Company; market share; gross profits; economic
value-added models; comparisons with various stock market indices;
increase in number of customers; and/or reductions in cost.

c. The Committee's determination with respect to each performance period of
the Award Opportunity for each participant, the performance goals and the
percentages of Award Opportunities payable at each performance goal shall be
subject to ratification by the members of the Board. The Committee's
determination and Board's ratification shall be made no later than ninety days
after the commencement of the applicable performance period and in no event
after twenty-five percent of such performance period has elapsed.

d. After the establishment of the Award Opportunity for each participant,
the performance goals and the percentages of Award Opportunities payable at each
performance goal in respect of any performance period, the Committee shall not
increase the amount of bonus payable under this Section 3 that would otherwise
be due upon the attainment of such performance goals for such period.

e. As soon as administratively practicable following the end of each
performance period, the Committee shall determine, based on audited financial
statements provided by the Company's accountants or any other information in the
Committee's sole discretion, whether any performance goal has been attained.

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f. Any bonus payable under this Section 3 is intended to constitute
"performance-based compensation" within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). No bonus shall be paid
to any participant who is a "covered employee" of the Company (as defined in
Section 162(m) of the Code) under this Section 3 in respect of any performance
period unless and until the Committee certifies in writing that a performance
goal has been attained.

g. Notwithstanding anything in the Plan to the contrary, the maximum bonus
amount that may be paid to any single participant under the Plan in respect of
any performance period shall not exceed $2 million, as adjusted by the change in
the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index
since the effective date of this Plan.

4. NONPERFORMANCE-BASED BONUS

The Chairman may establish one or more separate bonus opportunities for
participants upon such terms and conditions as the Chairman may determine in his
or her sole discretion, subject to limitations, if any, established by the
Board. Bonus payable pursuant to this Section 4 are not intended to qualify as
"performance-based compensation' within the meaning of Section 162(m) of the
Code.

5. PAYMENT

a. Any bonus under the Plan for a performance period shall be distributed
in lump sum payment as soon as administratively practicable after the end of the
Company's fiscal year (normally no later than March) or, if applicable, the
relevant performance period. Except as otherwise provided herein, only
participants who are employees actively at work and on the payroll of the
Company or its subsidiaries on the date of distribution, or who have terminated
employment with the Company or its subsidiaries as a result of retirement, death
or disability before such date, are entitled to payment of any bonus under the
Plan.

b. In the event of a participant's retirement, death or disability during a
performance period with respect to which the Committee certifies in writing that
a performance goal has been attained, the participant (or such participant's
estate, beneficiary or legal representative) shall be entitled to a prorated
bonus for the period of service actually worked by the participant during such
performance period. For purposes of the Plan, disability shall have the same
meaning as defined in the applicable provisions of the long-term disability plan
maintained for the benefit of employees of the Company or its subsidiaries who
are regularly employed on a salaried basis.

c. In the event of a participant's illness requiring an absence from work
at the Company or its subsidiaries of more than two months during a performance
period with respect to which the Committee certifies in writing that a
performance goal has been attained, the participant shall be entitled to a
prorated bonus for the period of service actually worked by the participant
during such performance period. A participant's illness of two months or less
during any performance period will not affect such participant's bonus.

d. Participants who have terminated employment with the Company or its
subsidiaries for any reason other than as a result of retirement, death or
disability before the date of distribution are not entitled to payment of any
bonus under the Plan for the performance period, except as otherwise provided in
a written employment, severance or other individual agreement between the
Company or its subsidiaries and such participant or otherwise determined by the
Committee in its discretion.

6. ADMINISTRATION

The Committee, which is comprised solely of two or more outside directors
(as defined in Section 162(m) of the Code) shall administer the Plan and
interpret the Plan in its sole discretion. The Committee may delegate to one or
more of its members, or to one or more agents, such administrative duties as it
may deem advisable; provided, however, that with respect to any participant who
is a "covered employee" of the Company (as defined in Section 162(m) of the
Code), the Committee shall have sole and exclusive authority to administer the
Plan unless any delegation of duties by the Committee would not be in
contravention of Section 162(m) of the Code.

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7. EFFECT ON EMPLOYMENT

Nothing contained in the Plan shall affect, or be construed as affecting,
the terms of employment of any participant except to the extent specifically
provided herein. Nothing contained in the Plan shall impose, or be construed as
imposing, an obligation on the Company or its subsidiaries to continue the
employment of any participant, and any participant to remain in the employ of
the Company or its subsidiaries. Bonuses under the Plan are a matter of separate
inducement.

8. FUNDING OF PLAN

The Plan shall be unfunded. The Company shall not be required to segregate
any assets to ensure payment of any bonus under the Plan.

9. AMENDMENT OR TERMINATION

The Company may amend or terminate the Plan at any time or from time to
time; provided, however, that no amendment shall cause any performance-based
bonus payable under the Plan not to qualify under Section 162(m) of the Code and
no amendment or termination of the Plan shall adversely impact any bonus awarded
to a participant with respect to a prior performance period.

/s/ RANDALL E. CURRAN

------------------------------------
Randall E. Curran
Chairman, President and CEO
Thermadyne Holdings Corporation

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EXHIBIT B

THERMADYNE HOLDINGS CORPORATION

MANAGEMENT INCENTIVE PLAN

SECTION 1. Purpose. The purposes of the Thermadyne Holdings Corporation
Management Incentive Plan are to promote the interests of Thermadyne Holdings
Corporation (the "COMPANY") and its stockholders by (i) attracting and retaining
exceptional executive personnel and other key employees of the Company and its
Subsidiaries, as defined below; (ii) motivating such employees by means of
performance-related incentives to achieve longer-range performance goals; and
(iii) enabling such employees to participate in the long-term growth and
financial success of the Company.

SECTION 2. Definitions. As used in the Plan, the following terms shall have
the meanings set forth below:

"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For purposes of this definition, the terms "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), when used with respect to any Person, means the possession, directly or
indirectly of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

"AWARD" means any Option.

"AWARD AGREEMENT" means any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.

"BOARD" means the Board of Directors of the Company.

"CAUSE" means (i) dishonesty by a Participant that results in substantial
personal enrichment at the expense of the Company or (ii) demonstratively
willful repeated violations of a Participant's obligations to the Company
(including under any employment agreement between the Participant and the
Company) which are intended to result in material injury to the Company.

"CHANGE OF CONTROL" means:

(a) any "person" (as such term is used in Section 3(a)(9) and 13(d)(3)
of the Exchange Act) other than (A) the DLJ Entities and/or their
respective Permitted Transferees (as defined in the Investors' Agreement)
or (B) any "group" (within the meaning of such Section 13(d)(3)) of which
the DLJ Entities constitute a majority (on the basis of ownership
interest), acquires, directly or indirectly, by virtue of the consummation
of any purchase, merger or other combination, securities of the Company
representing more than 51% of the combined voting power of the Company's
then outstanding voting securities with respect to matters submitted to a
vote of the stockholders generally; or

(b) a sale or transfer by the Company or any of its Subsidiaries of
substantially all of the consolidated assets of the Company and its
Subsidiaries to an entity which is not an Affiliate of the Company prior to
such sale or transfer.

"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

"COMMITTEE" means a committee of the Board designated by the Board to
administer the Plan and composed of not less than the minimum number of persons
from time to time required by Rule 16b-3 and Section 162(m) each of whom, to the
extent necessary to comply with Rule 16b-3 and Section 162(m) only, is a
"Non-Employee Director" and an "Outside Director" within the meaning of Rule
16b-3 and Section 162(m), respectively. Until otherwise determined by the Board,
the full Board shall be the Committee under the Plan.

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"DISABILITY" shall mean a Participant's inability to perform the duties of
his or her employment due to mental or physical incapacity for a period of six
consecutive months.

"EMPLOYEE" means an employee of the Company or any Subsidiary.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"FAIR MARKET VALUE" means with respect to the Shares, as of the
consummation of the merger of the Company and Mercury Acquisition Corporation,
$34.50 per share, and as of any other given date or dates, the average reported
closing price of a share of such class of common stock on such exchange or
market as is the principal trading market for such class of common stock for the
three trading days immediately preceding such date or dates. If such class of
common stock is not traded on an exchange or principal trading market on such
date, the fair market value of a Share shall be determined by the Committee in
good faith taking into account as appropriate recent sales of the Shares, recent
valuations of the Shares and such other factors as the Committee shall in its
discretion deem relevant or appropriate.

"INVESTORS' AGREEMENT" means the Investors' Agreement dated as of May 22,
1998 among (i) the Company, (ii) DLJ Merchant Banking Partners II, L.P., DLJ
Offshore Partners II, C.V., DLJ Merchant Banking Partners II-A, L.P., DLJ
Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium Partners-A, L.P., DLJMB Funding II, Inc., UK
Investment Plan 1997 Partners, DLJ EAB Partners, DLJ First ESC, L.P. and DLJ ESC
II, L.P. (collectively, the "DLJ ENTITIES") and (iii) certain other Persons
listed on the signature pages thereof.

"LIQUIDATION EVENT" means the sale by the DLJ Entities of 75% or more of
their investment in the Company or a sale of substantially all of the assets of
the Company.

"OPTION" means a right to purchase Shares from the Company granted under
Section 6 of the Plan.

"PARTICIPANT" means any Employee selected by the Committee to receive an
Award under the Plan (and to the extent applicable, any heirs or legal
representatives thereof).

"PERMITTED TRANSFEREE" shall have the meaning assigned to it in the
Investors' Agreement.

"PERSON" means any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.

"PLAN" means this Thermadyne Holdings Corporation Management Incentive
Plan.

"RULE 16B-3" means Rule 16b-3 as promulgated and interpreted by the SEC
under the Exchange Act, or any successor rule or regulation thereto as in effect
from time to time.

"SEC" means the Securities and Exchange Commission or any successor
thereto.

"SECTION 162(M)" means Section 162(m) of the Code, or any successor section
thereto as in effect from time to time.

"SHARES" means shares of common stock, $0.01 par value, of the Company or
such other securities as may be designated by the Committee from time to time.

"SUBSIDIARY" shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person.

"SUBSTITUTE AWARDS" means Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.

SECTION 3. Administration.

(a) Authority of Committee. The Plan shall be administered by the
Committee. Subject to the terms of the Plan, applicable law and contractual
restrictions affecting the Company, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the type
or types of Awards to be granted to a
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<PAGE> 34

Participant; (iii) determine the number of Shares to be covered by, or with
respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award
and Award Agreement; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or suspended
and the method or methods by which Awards may be settled, exercised, canceled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement relating
to, or Award made under, the Plan; (viii) establish, amend, suspend, or waive
such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and (ix) make any other determination
and take any other action that the Committee deems necessary or desirable for
the administration of the Plan.

(b) Committee Discretion Binding. Unless otherwise expressly provided in
the Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all Persons, including the Company, any Subsidiary,
any Participant, any holder or beneficiary of any Award, any shareholder and any
Employee.

SECTION 4. Shares Available for Awards.

(a) Shares Available. Subject to adjustment as provided in Section 4(b) and
4(c), the number of Shares with respect to which Awards may be granted under the
Plan shall be 500,000. If, after the effective date of the Plan, any Shares
covered by an Award granted under the Plan or to which such an Award relates are
forfeited, or if such an Award is settled for cash or otherwise terminates or is
canceled without the delivery of Shares, then the Shares covered by such Award,
or to which such Award relates, or the number of Shares otherwise counted
against the aggregate number of Shares with respect to which Awards may be
granted, to the extent of any such settlement, forfeiture, termination or
cancellation, shall, in the calendar year in which such settlement, forfeiture,
termination or cancellation occurs, again become Shares with respect to which
Awards may be granted unless any dividends have been paid thereon prior to such
settlement, forfeiture, termination or cancellation. In addition, Shares
tendered in satisfaction or partial satisfaction of the exercise price of any
Award or any tax withholding obligations will again become Shares with respect
to which Awards may be granted. Notwithstanding the foregoing and subject to
adjustment as provided in Section 4(b), no Employee of the Company may receive
Options in any calendar year that relate to more than 250,000 Shares.

(b) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, reclassification, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Shares or other securities of
the Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number of Shares of the Company (or number and kind of other securities
or property) with respect to which Awards may thereafter be granted, (ii) the
number of Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award, or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award.
Notwithstanding the foregoing, the issuance of warrants by the Company in
connection with the merger of the Company and Mercury Acquisition Corporation
shall not give rise to any such adjustment.

(c) Substitute Awards. Any Shares underlying Substitute Awards shall not be
counted against the Shares available for Awards under the Plan.

(d) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.

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<PAGE> 35

SECTION 5. Eligibility. Any Employee, including any officer or
employee-director of the Company or any Subsidiary, shall be eligible to be
designated a Participant.

SECTION 6. Stock Options.

(a) Grant. Subject to the provisions of the Plan and contractual
restrictions affecting the Company, the Committee shall have sole and complete
authority to determine the Employees to whom Options shall be granted, the
number of Shares to be covered by each Option, the exercise price therefor and
the conditions and limitations applicable to the exercise of the Option.

(b) Exercise Price. The Committee in its sole discretion shall establish
the exercise price at the time each Option is granted; provided, that in no
event shall the exercise price per Share be less than the Fair Market Value of a
Share on the date of grant.

(c) Exercise. Each Option shall be exercisable at such times and subject to
such terms and conditions as the Committee may, in its sole discretion, specify
in the applicable Award Agreement or thereafter. The Committee may impose such
conditions with respect to the exercise of Options, including without
limitation, any relating to the application of Federal or state securities laws,
as it may deem necessary or advisable.

(d) Payment. No Shares shall be delivered pursuant to any exercise of an
Option until payment in full of the exercise price, or adequate provision
therefor, is received by the Company. Such payment may be made: (i) in cash;
(ii) in Shares owned by the Participant for at least six months (the value of
such Shares shall be their Fair Market Value on the date of exercise); (iii) by
a combination of cash and Shares; or (iv) in such other manner as permitted by
the Committee at the time of grant or thereafter.

SECTION 7. Vesting; Termination of Employment. Each Award Agreement shall
contain such terms as the Committee may in its sole discretion determine
concerning vesting, forfeiture, the Company's rights of repurchase of Shares
acquired upon exercise of an Option, and/or the effects of termination or
suspension of a Participant's employment upon the exercisability of any Option
granted thereunder.

SECTION 8. Change of Control. The Committee, in its sole discretion, may
provide in an Award Agreement for the accelerated vesting of an Award in the
event of a Change of Control.

SECTION 9. Amendment and Termination.

(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without shareholder approval if such approval is necessary to
comply with any tax or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief from Section
16(b) of the Exchange Act, for which or with which the Board deems it necessary
or desirable to qualify or comply. Notwithstanding anything to the contrary
herein, the Committee may amend the Plan in such manner as may be necessary so
as to have the Plan conform with local rules and regulations in any jurisdiction
outside the United States.

(b) Amendments to Awards. Subject to the terms of the Plan and applicable
law, the Committee may waive any conditions or rights under, amend any terms of,
or alter, suspend, discontinue, cancel or terminate, any Award theretofore
granted, prospectively or retroactively; provided that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or termination
that would adversely affect the rights Participant or any holder or beneficiary
of any Award theretofore granted shall not to that extent be effective without
the consent of the affected Participant, holder or beneficiary.

(c) Cancellation. Any provision of this Plan or any Award Agreement to the
contrary notwithstanding, in the event of a Change of Control or an offer to
Participants generally relating to the acquisition of Shares, including through
purchase, merger or otherwise, the Committee may cause any Award granted
hereunder to be canceled in consideration of a cash payment or alternative Award
made to the holder of such canceled Award equal in value to the Fair Market
Value of such canceled Award.

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<PAGE> 36

SECTION 10. General Provisions.

(a) Dividend Equivalents. In the sole and complete discretion of the
Committee, an Award may provide the Participant with dividends or dividend
equivalents, payable in cash, Shares, other securities or other property on a
current or deferred basis.

(b) Nontransferability. Except to the extent otherwise provided in an Award
Agreement, no Award shall be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant, except by will or the laws
of descent and distribution.

(c) No Rights to Awards. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.

(d) Share Certificates. Certificates issued in respect of Shares shall,
unless the Committee otherwise determines, be registered in the name of the
Participant or its Permitted Transferees and shall be deposited by such
Participant or Permitted Transferee, together with a stock power endorsed in
blank, with the Company. When the Participant ceases to be bound by any transfer
restrictions set forth herein or in the Investors' Agreement, the Company shall
deliver such certificates to the Participant upon request. Such stock
certificate shall carry such appropriate legends, and such written instructions
shall be given to the Company's transfer agent, as may be deemed necessary or
advisable by counsel to the Company in order to comply with the requirements of
the Securities Act of 1933, any state securities laws or any other applicable
laws and the Investors' Agreement. Subject to the provisions of the Investors'
Agreement, all certificates for Shares or other securities of the Company or any
Subsidiary delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules, regulations and
other requirements of the Securities and Exchange Commission or any stock
exchange upon which such Shares or other securities are then listed and any
applicable laws or rules or regulations, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions.

(e) Withholding. A Participant may be required to pay to the Company or any
Subsidiary, and the Company or any Subsidiary shall have the right and is hereby
authorized to withhold from any Award, from any payment due or transfer made
under any Award or under the Plan or from any compensation or other amount owing
to a Participant the amount (in cash, Shares, other securities, other Awards or
other property) of any applicable withholding taxes in respect of an Award, its
exercise, or any payment or transfer under an Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes. The Committee may provide
for additional cash payments to holders of Awards to defray or offset any tax
arising from any such grant, lapse, vesting, or exercise of any Award.

(f) Award Agreements. Each Award hereunder shall be evidenced by an Award
Agreement which shall be delivered to the Participant and shall specify the
terms and conditions of the Award and any rules applicable thereto.

(g) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Subsidiary from adopting or continuing in
effect other compensation arrangements, which may, but need not, provide for the
grant of options, restricted stock, Shares and other types of Awards provided
for hereunder (subject to shareholder approval if such approval is required),
and such arrangements may be either generally applicable or applicable only in
specific cases.

(h) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ or service of the
Company or any Subsidiary. Further, the Company or any Subsidiary may at any
time dismiss a Participant from employment or service, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the Plan or
in any Award Agreement.

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<PAGE> 37

(i) Rights as a Stockholder. Subject to the provisions of the applicable
Award, no Participant or holder or beneficiary of any Award shall have any
rights as a stockholder with respect to any Shares to be issued under the Plan
until he or she has become the holder of such Shares.

(j) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware.

(k) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.

(l) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole discretion, it
determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant in connection therewith shall
be promptly refunded to the relevant Participant, holder or beneficiary. Without
limiting the generality of the foregoing, no Award granted hereunder shall be
construed as an offer to sell securities of the Company, and no such offer shall
be outstanding, unless and until the Committee in its sole discretion has
determined that any such offer, if made, would be in compliance with all
applicable requirements of the U.S. federal securities laws and any other laws
to which such offer, if made, would be subject.

(m) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary and a Participant or any
other Person. To the extent that any Person acquires a right to receive payments
from the Company or any Subsidiary pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Subsidiary.

(n) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash or other securities or other property shall be paid or transferred in lieu
of any fractional Shares or whether such fractional Shares or any rights thereto
shall be canceled, terminated, or otherwise eliminated.

(o) Transfer Restrictions. Shares acquired hereunder may not be sold,
assigned, transferred, pledged or otherwise disposed of, except as provided in
the Plan, the applicable Award Agreement and the Investors' Agreement.

(p) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

SECTION 11. Term of the Plan.

(a) Effective Date. The Plan shall be effective as of May 22, 1998, subject
to approval by the shareholders of the Company. Awards may be granted hereunder
prior to such shareholder approval subject in all cases, however, to such
approval.

(b) Expiration Date. The Board and the Committee's authority to grant
Awards under the Plan shall terminate on the tenth anniversary of the Plan's
effective date. Unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted hereunder may, and the authority
of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under any such
Award shall, continue after the authority for grant of new Awards hereunder has
been exhausted.
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EXHIBIT C

THERMADYNE HOLDINGS CORPORATION
1998 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

ARTICLE I

PURPOSE

The purpose of the Thermadyne Holdings Corporation 1998 Non-Employee
Directors Stock Option Plan (as set forth herein and as amended from time to
time, the "Plan") is to encourage qualified persons to become and remain
directors of Thermadyne Holdings Corporation, a Delaware corporation (the
"Company"), and to provide directors of the Company with a direct stake in its
success.

ARTICLE II

DEFINITIONS

2.1 "Article" means an Article of this Plan.

2.2 "Board" means the Board of Directors of the Company.

2.3 "Common Stock" means the common stock, par value $0.01 per share, of
the Company.

2.4 "Director" means a member of the Board.

2.5 "Effective Date" means August 4, 1998.

2.6 "Eligible Director" means a Director who is not an employee of (i) the
Company or any of its subsidiaries or (ii) any beneficial owner (as determined
in accordance with Rule 13d-3 under the Exchange Act) of ten percent or more of
the Common Stock or any affiliate (as defined in Rule 12b-2 under the Exchange
Act) of such beneficial owner, in each case as of the date of any grant of an
Option to him.

2.7 "Exchange Act" means the Securities Exchange Act of 1934.

2.8 "Fair Market Value" of a security means, as of any applicable date:

(i) if the security is listed for trading on a national securities
exchange or the NASDAQ National Market, the closing price, regular way, of
the security as reported on the consolidated transaction reporting system
applicable to such security, or if no such reported sale of the security
shall have occurred on such date, on the next preceding date on which there
was such a reported sale, or

(ii) if the security is not listed for trading on a national
securities exchange or the NASDAQ National Market, but is listed on the
NASDAQ SmallCap Market, the average of the closing bid and asked prices,
regular way, on the NASDAQ SmallCap Market or, if no such prices shall have
been so reported for such date, on the latest preceding date for which such
prices were so reported, or

(iii) if the security is not listed for trading on a national
securities exchange, the NASDAQ National Market or the NASDAQ SmallCap
Market, the fair market value of the security as determined in good faith
by the Board.

2.9 "Grantee" means the holder of an Option or any person entitled to
exercise an Option under Article VI.

2.10 "Option" means a right to purchase Common Stock granted under this
Plan.

2.11 "Term" shall have the meaning provided in Article 5.3.

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ARTICLE III

ADMINISTRATION

The Plan shall be administered by the Board. The Board shall have the power
to construe and interpret the Plan, to determine all questions (including
factual questions) arising thereunder, and to adopt and amend such rules for the
administration of the Plan as it may deem desirable. Any decision of the Board
in the administration of the Plan shall be final.

ARTICLE IV

AMOUNT OF COMMON STOCK

The aggregate number of shares of Common Stock in respect of which Options
may be exercised shall not exceed 20,000, subject to adjustment pursuant to
Article VII. Such shares of Common Stock may be either authorized but unissued
shares or previously-issued shares reacquired by the Company. If any Options
terminate or expire without being exercised in whole or in part, new Options may
be granted covering the shares not purchased under such lapsed Options.

ARTICLE V

GRANT OF OPTIONS

5.1 Initial Grants of Options. On the Effective Date, each Eligible
Director shall automatically be granted an Option for 3,000 shares of Common
Stock. Thereafter, subject to Section 8.1, each new Eligible Director shall be
granted an Option for 3,000 shares upon election to the Board.

5.2 Subsequent Grants of Options. Subject to Section 8.1, on November 1,
1999 and each November 1 thereafter, each Eligible Director shall automatically
be granted an Option for 500 shares of Common Stock.

5.3 Terms of Options. Each Option shall have a term ("Term") of ten (10)
years beginning on the date of grant, unless earlier terminated as provided
herein.

5.4 Exercise Price. The exercise price per share for each Option granted
on the Effective Date shall be $34.50, subject to subsequent adjustment pursuant
to Article VII. The exercise price per share for each Option granted subsequent
to the Effective Date shall be 100% of the Fair Market Value of a share of
Common Stock on the date of grant, subject to adjustment pursuant to Article
VII.

5.5 Option Agreements. Each Option shall be evidenced by an agreement in
such form as the Board shall prescribe from time to time and shall be consistent
with the Plan.

ARTICLE VI

EXERCISE OF OPTIONS

6.1 Vesting. Subject to Section 8.1, each outstanding Option shall be
fully exercisable at any time on or after its date of grant.

6.2 Exercise. An Option shall be exercised by delivery during the Term to
the Company of (i) written notice of the exercise specifying the number of
shares to be purchased and (ii) full payment in cash for the shares of Common
Stock being acquired thereunder.

6.3 Exercise After Termination of Directorship. If a person shall cease to
be a Director for any reason while holding an unexpired Option that has not been
fully exercised, such Option shall thereupon terminate; provided that such
person, or in the case of his death or adjudication of incompetency, his
executor, administrator, distributees, guardian or legal representative, as the
case may be, may exercise the Option (to the extent that it was exercisable
pursuant to Section 6.1 on the date the person ceased to be a Director) at

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any time prior to the earlier to occur of (i) one year after the date such
person ceased to be a Director or (ii) the expiration of the Term of such
Option.

ARTICLE VII

ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

7.1 Adjustments. If the outstanding Common Stock is changed by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split, reverse stock split, stock dividend, rights offering, combination,
spinoff, exchange of shares, or the like, an appropriate adjustment shall be
made by the Board to (i) the aggregate number of shares then-remaining available
under the Plan, (ii) the number of shares of Common Stock in respect of which
Options are subsequently to be granted, and (iii) to the extent that the
following adjustments are necessary to preserve the economic value of
unexercised Options, the number or type of shares of capital stock subject to,
and the exercise price of, outstanding Options.

7.2 No Fractional Shares. If a fraction of a share would otherwise result
from any adjustment pursuant to Section 7.1, the adjusted share amount shall be
reduced to the next lower whole number.

ARTICLE VIII

MISCELLANEOUS

8.1 Stockholder Approval. No Option shall become exercisable until after
the Plan has been approved by the holders of a majority of the shares of Common
Stock present and entitled to vote thereon at a meeting of the stockholders of
the Company. If such approval is not obtained on or before the first anniversary
of the Effective Date, all outstanding Options shall expire and no additional
Options shall be granted.

8.2 Options Non-Transferable. An option shall not be transferable by its
Grantee except by will or the laws of descent and distribution and shall be
exercisable during the Grantee's lifetime only by the Grantee or his or her
guardian or legal representative; provided, however, that a Grantee may in a
manner and to the extent permitted by the Board (a) designate in writing a
beneficiary to exercise an Option after his or her death and (b) transfer an
option to a revocable, inter vivos trust as to which the Grantee is the settlor
and trustee.

8.3 Expenses. The expenses of the Plan shall be borne by the Company. Any
taxes imposed on a Grantee upon exercise of an Option shall be paid by such
Grantee.

8.4 No Right to Re-Election. Neither the Plan nor any action taken
hereunder shall be construed as giving any Director any right to be retained or
re-elected as a Director.

8.5 Securities Registration. The Company shall not be obligated to deliver
any shares of Common Stock hereunder until such shares have been listed on each
securities exchange or national market system on which the Common Stock may then
be listed, or until there has been compliance with all applicable state or
federal securities laws; provided however, that the Company shall use all
reasonable efforts to cause any such listing and compliance.

8.6 Taxes. The Company shall not be required to issue shares of Common
Stock upon the exercise of an Option unless the Grantee shall first pay to the
Company such amount, if any, as may be requested by the Company to satisfy any
liability to withhold federal, state, local or foreign income or other taxes
relating to such exercise.

8.7 Rights as Stockholder. A Grantee shall not by reason of any Option
have any right as a stockholder of the Company with respect to the shares of
Common Stock which may be deliverable upon exercise of such Option until such
shares have been delivered to him.

8.8 Severability. If all or any part of the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not declared to
be unlawful or invalid. Any Article or part of an Article so declared to be
unlawful or invalid shall,
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if possible, be construed in a manner which gives effect to the terms of such
Article or part of an Article to the fullest extent possible while remaining
lawful and valid.

8.9 Applicable Law. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of Delaware.

ARTICLE IX

AMENDMENT

The Plan may be amended from time to time by the Board as it shall deem
advisable, including amendments necessary to qualify for any exemption or to
comply with applicable law or regulations. No amendment of the Plan shall
adversely affect the rights of any Grantee under an Option without the consent
of such Grantee.

ARTICLE X

TERMINATION

The Plan shall terminate on the tenth anniversary of the Effective Date of
the Plan, unless sooner terminated by the Board. Any termination of the Plan
shall not affect any Option then outstanding.

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DETACH HERE
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PROXY

THERMADYNE HOLDINGS CORPORATION

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THERMADYNE HOLDINGS CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 4, 1998

The undersigned, having received the notice and accompanying Proxy Statement for
said meeting, hereby appoints Randall E. Curran, James H. Tate or Stephanie N.
Josephson, and each of them, with full power of substitution, as the
undersigned's proxy and attorney-in-fact to vote at the Annual Meeting of
Stockholders of Thermadyne Holdings Corporation (the "Company") to be held on
November 4, 1998 (the "Annual Meeting"), or at any adjournment thereof, all
shares of voting stock of the Company which the undersigned may be entitled to
vote. The above proxies are hereby instructed to vote as shown on the reverse of
this card and in their discretion upon such other business as may properly come
before the Annual Meeting or at any adjournment thereof.

The Board of Directors recommends that you vote FOR the director nominees
recommended by the Board of Directors, FOR the proposal to adopt the Thermadyne
Holdings Corporation Bonus Plan, FOR the proposal to adopt the Thermadyne
Holdings Corporation Management Incentive Plan and FOR the proposal to adopt the
Thermadyne Holdings Corporation 1998 Non-Employee Directors Stock Option Plan.
IF NO SPECIFIC DIRECTIONS ARE GIVEN, ALL THE VOTES ATTRIBUTABLE TO YOUR VOTING
SHARES WILL BE VOTED FOR THE DIRECTOR NOMINEES, FOR THE PROPOSAL TO ADOPT THE
THERMADYNE HOLDINGS CORPORATION BONUS PLAN, FOR THE PROPOSAL TO ADOPT THE
THERMADYNE HOLDINGS CORPORATION MANAGEMENT INCENTIVE PLAN AND FOR THE PROPOSAL
TO ADOPT THE THERMADYNE HOLDINGS CORPORATION 1998 NON-EMPLOYEE DIRECTORS STOCK
OPTION PLAN.

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<S> <C> <C>
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SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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DETACH HERE
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE

1. Election of Directors. FOR AGAINST ABSTAIN
Nominees: Randall E. Curran, James H. Tate, 2. Proposal to adopt the [ ] [ ] [ ]
Peter T. Grauer, William F. Dawson, Jr., Thermadyne Holdings Corp-
John F. Fort III, Harold A. Poling, Lawrence M.v.D. oration Bonus Plan.
Schloss
3. Proposal to adopt the [ ] [ ] [ ]
FOR ALL NOMINEES WITHHOLD MARK HERE Thermadyne Holdings Corp-
(except as indicated [ ] [ ] AUTHORITY IF YOU PLAN [ ] oration Management Incentive
in space below) FOR ALL NOMINEES TO ATTEND Plan.
THE MEETING
4. Proposal to adopt the [ ] [ ] [ ]
[ ] _________________________________________ MARK HERE Thermadyne Holdings Corp-
(To withhold authority to vote for any FOR ADDRESS [ ] oration 1998 Non-Employee
individual nominee, print the nominee's CHANGE AND Directors Stock Option Plan.
name above) NOTE BELOW
5. In their discretion, the proxies are authorized to
vote with respect to any other business which may
properly come before the annual meeting or at any
adjournment thereof.

PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE EVEN IF YOU PLAN TO ATTEND
THE MEETING.

Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such.

Signature _______________________________ Date: __________ Signature _______________________________ Date: __________
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