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                  EMPLOYMENT, RETENTION AND SEVERANCE AGREEMENT

      Agreement made this 13th day of November, 2002, by and between Robotic
Vision Systems, Inc., a Delaware corporation with a principal place of business
at 5 Shawmut Road, Canton, MA 02021 (the "Company") and Earl Rideout, an
individual residing at 5 Christina Dr. Wayland, MA 01778 (the "Employee").

      WHEREAS, the Employee is employed in a senior management or technical
capacity in the Company's Semiconductor Equipment Group ("SEG") business; and

      WHEREAS, the Company is in the process of marketing the SEG business for
sale to an acquirer; and

      WHEREAS, the Company desires the Employee to remain in the employ of the
Company and to use his/her best efforts to effect a sale of the SEG business on
the best terms available; and

      WHEREAS, both parties desire to set forth the terms and conditions
relative to the Employee's continued employment by the Company during the
pendency of marketing activities relative to the SEG business.

      NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

      1. Employment. The Company agrees to employ the Employee on a full-time
basis, subject to the terms and conditions set forth herein, and the Employee
agrees to accept such full-time employment upon said terms and conditions. The
Employee's employment shall be subject to the standard terms and conditions and
policies applicable to all employees of the Company, as such terms and policies
may exist from time to time.

      2. Term. The term of employment under this Agreement (the "Term") shall
commence on the date hereof and shall continue as to Sections 7, 8 and 9 hereof
for a period of one year or such earlier date as is 1 month after consummation
of the sale of the SEG business, and as to the other Sections of this Agreement,
the term shall be indefinite, subject to mutual agreement between the Employee
and the Company. For purposes of this Agreement, the Company's Board of
Directors shall determine when the sale of the SEG business has been
consummated.

      3. Duties. The Employee shall serve the Company in such management or
technical capacity or capacities, and with such duties as shall be designated by
the Company from time to time, subject to and under the supervision of the
Company's Chief Executive Officer.


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      4. Compensation. The Company shall pay the Employee a Base Salary at the
same rate as currently paid such Employee, provided that such rate may be
adjusted from time to time by the Company in its discretion. The Employee shall
be accorded such benefits as are customarily enjoyed by similarly situated
employees of the Company. The Company may, from time to time, in its discretion,
grant stock options or other equity compensation to the Employee.

      5. Non-Competition; Non-Solicitation.

      (a) Non-Compete. The Employee acknowledges that he/she has gained or will
gain extensive and valuable experience and knowledge in the business conducted
by the Company and has had or will have extensive contacts with the customers,
suppliers, investors, and/or consultants of the Company. The Employee recognizes
that it is critical to the ongoing success of the Company that it preserve its
goodwill and protect its proprietary rights and its other important business
interests.

Accordingly, the Employee agrees that he/she will not, while employed by the
Company during the Term hereof and for a period of one year thereafter directly
or indirectly, engage in (whether as an officer, employee, consultant, director,
proprietor, agent, partner or otherwise) or have an ownership interest in, or
participate in the financing, operation, management or control of, any person,
firm, corporation or business engaged in competition with the Company, any of
its affiliates, its parent or subsidiaries in the business of design,
manufacture or sale of machine vision hardware or software (including without
limitation hardware and software used in inspection equipment and specialty
lighting and high-performance optics used in machine vision applications),
automatic identification hardware or software (including without limitation
direct part marking and biometric identification products), or in the
development of technology for such businesses. It is agreed that ownership of no
more than 1.0% of the outstanding voting stock of a publicly traded corporation
shall not constitute a violation of this provision. In recognition of the fact
that the Company's business is global, the territory to which the restrictions
contained in this Section 5(a) apply shall be worldwide.

The Company may waive the foregoing restrictions or their application in any
particular circumstance and may condition any such waiver upon receipt of
assurances satisfactory to the Company, from the Employee and/or others, that
the Employee's proposed activity will not adversely affect the Company's
goodwill, proprietary rights or other important business interests.

      (b) Non-Solicitation. While actively employed by the Company during the
Term hereof and for a period of one year thereafter, the Employee agrees that
he/she shall not solicit any persons or companies who were customers, suppliers
or business patronage of the Company or its affiliates, parent, or subsidiaries
during the Term or prior thereto, if such solicitation is for the purpose of, or
results in, competition with the Company, any of its affiliates, its parent or
subsidiaries; nor will he/she solicit for any purpose the employment of any
employees of the Company, any of its affiliates, its parent or


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subsidiaries while actively employed by the Company during the Term hereof and
for a period of one year thereafter.

      (c) Confidential Information. The Employee acknowledges that he/she may
receive, or contribute to the production of, Confidential Information. For
purposes of this Agreement, the Employee agrees that "Confidential Information"
shall mean information or material proprietary to the Company, its affiliates,
its parent, or any of its direct or indirect subsidiaries, or designated as
Confidential Information by such entities and not generally known by personnel
not employed by or affiliated with one or more of such entities, which the
Employee develops or of or to which the Employee may obtain knowledge or access
through or as a result of his/her relationship with the Company, its affiliates,
its parent or any of its direct or indirect subsidiaries (including information
conceived, originated, discovered or developed in whole or in part by the
Employee). Confidential Information also includes but is not limited to, the
following types of information and other information of a similar nature
(whether or not reduced to writing) related to the Company's business, or that
of its affiliates, its parent or any of its direct or indirect subsidiaries:
discoveries, inventions, ideas, concepts, research, development, processes,
procedures, know-how, formulae, techniques, technical data, strategies, plans,
business methods of operation, financial information, employee compensation, and
computer programs and systems. Confidential Information also includes any
information described above which the Company, its affiliates, its parent, or
any of its direct or indirect subsidiaries treats as proprietary or
confidential, or designates as Confidential Information, whether or not owned by
or developed by the Company, its affiliates, its parent or any of its direct or
indirect subsidiaries. The Employee acknowledges that the Confidential
Information derives independent economic value, actual or potential, from not
being generally known to, and not being readily accessible by proper means by,
other persons who can obtain economic value from its disclosure or use.
Information publicly known without breach of this Agreement that is generally
employed by the trade at or after the time the Employee first learns of such
information, or generic information or knowledge which the Employee would have
learned in the course of similar employment or work elsewhere in the trade,
shall not be deemed part of the Confidential Information. The Employee further
agrees:

      That all notes, memoranda, electronic storage, documentation and records
in any way incorporating or reflecting any Confidential Information shall belong
exclusively to the Company, and the Employee agrees to turn over all copies of
such materials in the Employee's control to the Company upon request and upon
termination of the Employee's employment with the Company.

      That while employed by the Company and indefinitely after termination of
employment for any reason, the Employee will hold in confidence and not directly
or indirectly reveal, report, publish, disclose or transfer any of the
Confidential Information to any person or entity, or utilize any of the
Confidential Information for any purpose, except in the course of Employee's
work for the Company.

      That any idea in whole or in part conceived of or made by the Employee
during the Term of his/her employment with the Company which relates directly or
indirectly to the Company's current or planned line of business and is made
through the use of any of the Confidential Information or any of the Company's
equipment, facilities, trade secrets


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or time, or which results from any work performed by the Employee for the
Company, shall belong exclusively to the Company and shall be deemed a part of
the Confidential Information for purposes of this Agreement. The Employee hereby
assigns and agrees to assign to the Company all rights in and to such
Confidential Information whether for purposes of obtaining patent or copyright
protection or otherwise. The Employee shall acknowledge and deliver to the
Company, without charge to the Company (but at its expense) such written
instruments and shall perform such other acts, including giving testimony in
support of the Employee's authorship or inventorship, as the case may be,
necessary in the opinion of the Company to obtain patents or copyrights or to
otherwise protect or vest in the Company the entire rights and title in and to
the Confidential Information. If disclosure of any Confidential Information is
requested or required by judicial or governmental order, the Employee shall
promptly notify the Company of receipt of the judicial or governmental order and
shall take reasonable steps to assist the Company in contesting such order
and/or in protecting the Company's rights prior to disclosure.

      (e) Injunctions. It is agreed that the restrictions contained in this
Section 5 are reasonable, but it is recognized that damages in the event of the
breach of any of the restrictions will be difficult or impossible to ascertain;
and, therefore, the Employee agrees, that, in addition to, and without limiting
any other right or remedy the Company may have, the Company shall have the right
to an injunction against the Employee issued by a court of competent
jurisdiction enjoining any such breach.

      (f) Part of Consideration. The Employee also agrees, acknowledges,
covenants, represents and warrants that he/she is fully and completely aware
that, and further understands that, the foregoing restrictive covenants are an
essential part of the consideration for the Company entering into this Agreement
and that the Company is entering into this Agreement in full reliance on these
acknowledgements, covenants, representations and warranties.

      (g) Time and Territory Reduction. If the period of time or territory
described above are held to be in any respect an unreasonable restriction, it is
agreed that the court so holding may reduce the territory to which the
restriction pertains or the period to time during which it applies or may reduce
both such territory and such period, to the minimum extent necessary to render
such provision enforceable.

      (h) Survival. The obligations described in this Section 5 shall survive
any termination of this Agreement, or any termination of the employment
relationship created hereunder.

      6. Termination. Notwithstanding any other provision of this Agreement, the
Company shall have the right to terminate the Employee's employment, with or
without cause, at any time. For purposes of this Agreement, the Company shall
have "cause" to terminate the Employee in the event of: (a) the willful and
continued failure by the Employee to substantially perform his/her duties; (b)
the permanent physical or mental incapacity of the Employee; (c) the commission
by the Employee of any act of fraud or


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misrepresentation, or embezzlement relating to the property of the Company
and/or the services to be provided by the Employee; or (d) the Employee's
unauthorized disclosure or use of proprietary or confidential information of the
Company or the Employee's engaging in competition with the Company.

      7. Retention Bonus. The Company agrees that, so long as the Employee
remains employed by the Company through the consummation of a sale of the SEG
business, the Company will pay to the Employee, within 30 days after
consummation of the sale of the SEG business, as additional compensation, the
sum of $137,500.00, minus applicable withholdings for federal, state, local,
FICA and Medicare taxes. In addition, within thirty days after consummation of
the sale of the SEG business, the Company will pay the Employee the deferred
amount of his base salary, minus applicable withholdings. The deferred amount to
date consists of $50,000 per annum from June 1, 2000 forward.

      8. Employment with Acquirer. The Company agrees that it will endeavor, as
part of its negotiations with a prospective acquirer, to have the acquirer agree
to employ the Employee for a minimum of twelve months following consummation of
the sale of the SEG business at a rate of compensation and benefits that, in the
aggregate, has an annualized value of at least ninety (90%) percent of the
aggregate annualized value of the compensation and benefits of the Employee
immediately prior to the sale of the SEG business (excluding any retention or
other extraordinary bonus). In the event (a) the acquirer offers to employ the
Employee for a minimum of twelve months after consummation of the sale of the
SEG business at a rate of compensation and benefits that, in the aggregate, has
an annualized value of at least ninety (90%) percent of the aggregate annualized
value of the compensation and benefits of the Employee immediately prior to the
sale of the SEG business (excluding any retention or other extraordinary bonus)
or (b) the Employee accepts employment or a consulting position with the
acquirer to perform work on behalf of the acquirer after the date of
consummation of the sale of the SEG business, the Employee's formal termination
of employment with the Company in connection with the sale of the SEG business
shall not be deemed to be a termination by the Company without cause under this
Agreement.

      9. Assumption of Agreement by Acquirer. The Company agrees that it will
endeavor, as part of its negotiations with a prospective acquirer, to have the
acquirer agree to assume all of the obligations of the Company hereunder. To the
extent that the acquirer does so assume the obligations of the Company under
this Agreement, the Company shall have no further obligation to the Employee
under this Agreement. If the Employee accepts employment with the acquirer and
the acquirer does not agree to a minimum of twelve months of employment for the
Employee after consummation of the sale of the SEG business, the Company agrees
that it will continue its severance commitment to the Employee for a period of
one year after consummation of the sale of the SEG business. Therefore, in the
event that the Employee's employment is terminated by the acquirer within said
year, the Company will pay, on the same schedule described in Section 10 hereof,
the difference between the benefits set forth in Section 10 and the severance
benefits provided by the acquirer, if any. In such event, the Company may


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substitute payment of the costs of the Employee for continuing coverage (through
COBRA, for example) for actually providing the benefits in paragraph (b) of
Section 10.

      10. Employee's Rights upon Termination of Employment. In the event of the
Company's termination of the Employee's employment without cause, and so long as
the Employee has not breached any obligation of the Employee under Section 5
hereof, the Company shall continue to pay to the Employee and provide for the
benefit of the Employee certain items of compensation, as set forth below, for a
maximum period equal to 12 months or until such earlier time as the Employee
commences a new employment position, as described below.

      Items of compensation: (a) Base Salary at the rate in effect as of the
date of termination (minus applicable withholdings); (b) health insurance, life
insurance, and disability insurance as in effect as of the date of termination
(including the Employee contributing the same share of the cost thereof); and
(c) outplacement services.

In addition, the Employee shall be entitled to receive benefits due him/her
under or contributed by the Company on his/her behalf pursuant to any
retirement, incentive, profit sharing, bonus or other employee benefit plan
maintained by the Company on the Employee's behalf, to the extent such benefits
are due and payable under the applicable plan. The payments to be made by the
Company to the Employee pursuant to the provisions of paragraph (a) of this
Section 10 shall be made on whatever the then customary payment schedule is for
compensation of management employees of the Company (e.g. monthly, bi-weekly, or
the like). In the event the Employee secures a new employment position during
the period of the Company's continuing payment of compensation to him/her, the
Employee shall promptly notify the Company of the commencement of the new
employment position and upon commencement of such new employment position, the
Company's obligations to continue payments hereunder shall cease. A new
employment position shall include, without limitation, enaging in business
activity on a full-time equivalent basis as an employee, consultant, director,
proprietor, agent, partner or otherwise.

      No benefits shall be payable under this Section 10 in the event the
Employee's employment is terminated by the Employee or as a result of the death
of the Employee.

      11. Governing Law and Venue. This Agreement shall be construed and
enforced in accordance with the substantive law of the Commonwealth of
Massachusetts, without giving effect to its conflicts of law principles. The
parties agree that any litigation pertaining to this Agreement shall be
maintained exclusively in the courts of general jurisdiction located in
Massachusetts, and each party agrees to submit to the jurisdiction and venue of
any such court. Notwithstanding the foregoing, the Company shall be entitled to
file litigation against the Employee in any jurisdiction where the Company deems
it necessary or advisable to do so in order to enforce the provisions of Section
5 hereof.


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      12. Construction. The language in all parts of the Agreement shall in all
cases be construed as a whole according to its fair meaning and not strictly for
or against either party. The section headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. All terms used in one number or gender shall
be construed to include any other number or gender as the context may require.
The parties agree that each party has reviewed this Agreement and has had the
opportunity to have counsel review the same and that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not apply to the interpretation of this Agreement or any amendment thereof.

      13. Nondelegability of the Employee's Right and Assignment Rights of the
Company. The obligations, rights and benefits of the Employee hereunder are
personal and may not be delegated, assigned or transferred in any manner
whatsoever, nor are such obligations, rights or benefits subject to involuntary
alienation, assignment or transfer. This Agreement may be assigned by the
Company to any affiliate of the Company and/or to any acquirer of the SEG
business. Any successor to the Company, whether by assignment of this Agreement
or by acquisition of all the outstanding capital stock of the Company, shall be
considered the Company for purposes of this Agreement.

      14. Severability. If any term or provision of this Agreement is declared
by a court of competent jurisdiction to be invalid or unenforceable for any
reason, this Agreement shall remain in full force and effect, and the parties
will request the court to (a) modify the invalid of unenforceable provision to
the minimum extent necessary to make it valid and enforceable, or (b) if the
court determines that such a modification is not possible, interpret this
agreement as if such invalid or unenforceable provisions were not a part hereof.

      15. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed duly given, upon receipt, if either personally
delivered, sent by certified mail, return receipt requested, or sent by a
nationally recognized overnight courier service, addressed to the parties as
follows:

If to the Company:         Robotic Vision Systems, Inc.
                           5 Shawmut Road
                           Canton, MA 02021
                           Attn.: CFO

With a copy to:            Ira I. Roxland, Esquire
                           Sonnenschein Nath  & Rosenthal
                           1221 Avenue of the Americas, 24th Floor
                           New York, NY 10020-1089

If to the Employee:        Earl Rideout
                           5 Christina Dr.
                           Wayland, MA  01778


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or to such other addresses either party may provide to the other in accordance
with this Section.

      16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof (i.e. the
Employee's employment by and rights upon termination of employment from the
Company) and supercedes all prior or contemporaneous employment agreements and
understandings or agreements in regard to the Employee's employment or
termination of employment, except that all stock option agreements and
restricted stock agreements executed separately survive independently and are
not considered for purposes of this Agreement to be an agreement or
understanding in regard to the Employee's employment. No modification or
addition to this Agreement shall be valid unless in writing, specifically
referring to this Agreement and signed by both parties hereto. No waiver of any
rights under this Agreement shall be valid unless in writing and signed by the
party to be charged with such waiver. A waiver of any term or condition
contained in this Agreement shall not be deemed or construed as a further or
continuing waiver of such term or condition, unless the waiver specifically
provides otherwise.

      IN WITNESS WHEREOF, the parties have set their hands as of the day and
year first above written.

                                         Robotic Vision Systems, Inc.



-------------------------------          -------------------------------
Witness                                  Its
                                         Duly Authorized


                                         Employee


                                          /s/ Earl Rideout
-------------------------------          -------------------------------
Witness                                  Earl Rideout



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