<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549
              ___________________________________________________

                        AMENDMENT NO. 2 ON FORM 10-K/A
                                 TO FORM 10-K
                                        
(mark one)

 X        Annual Report Pursuant to Section 13 or 15(d) of the Securities
---                                                                   
          Exchange Act of 1934


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

                        Commission file number 1-11827

                           TREX MEDICAL CORPORATION
           (Exact name of Registrant as specified in its character)

Delaware                                                     06-1439626
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

36 Apple Ridge Road
Danbury, Connecticut                                         06810
(Address of principal executive offices)                     (zip code)

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

          Securities registered pursuant to Section 12(b) of the Act:

                                                       Name of each exchange    
Title of each class                                    on which registered      
-------------------                                    -------------------      
Common Stock, $.10 par value                           American Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:
                                     None

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to the filing requirements for
at least the past 90 days.  Yes  X  No  __
                                 -       

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference into Part III of this Form 10-K or any
amendment to this Form 10-K. [_]

The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of October 3, 1998, was approximately $135,027,000.

As of October 3, 1998, the Registrant had 34,134,342 shares of Common Stock
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended October 3, 1998 are incorporated by reference into Parts I and II.

<PAGE>
 
Part III, Item 10.  Directors and Executive Officers of the Registrant.

Part III, Item 11.  Executive Compensation.

Part III, Item 12.  Security Ownership of Certain           
                    Beneficial Owners and Management.

Part III, Item 13.  Certain Relationships and Transactions.


Items 10, 11, 12 & 13 of Part III of the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 3, 1998 are hereby amended and restated in 
their entirety as contained in the following Attachment A, which is included 
herein and made a part of this Annual Report on Form 10-K.


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange 
Act of 1934, the Registrant has duly caused this Amendment No.2 on form 10-K/A 
to be signed by the undersigned, duly authorized.



                                        TREX MEDICAL CORPORATION


                                        By: /s/ Sandra L. Lambert
                                           --------------------------
                                             Sandra L. Lambert
                                             Secretary



<PAGE>

                                 Attachment A

                                  Directors
 
Nominees For Directors
 
  Set forth below are the names of the persons serving as directors, their
ages, their offices in the Corporation, if any, their principal occupation or
employment for the past five years, the length of their tenure as directors
and the names of other public companies in which such persons hold
directorships. Information regarding their beneficial ownership of the
Corporation's Common Stock and of the common stock of its parent company,
ThermoTrex Corporation ("ThermoTrex"), a provider of medical products,
personal-care products and services, and advanced technology research, and
ThermoTrex's parent company, Thermo Electron Corporation ("Thermo Electron"),
a provider of diversified products and services for the biomedical,
instrument, and environmental markets, is reported under the caption "Stock
Ownership." 
 
<TABLE>
<S>                      <C>
Elias P. Gyftopoulos.... Dr. Gyftopoulos, 71, has been a director of the Corporation
                         since November 1995. Dr. Gyftopoulos is Professor Emeritus of
                         the Massachusetts Institute of Technology, where he was the
                         Ford Professor of Mechanical Engineering and of Nuclear
                         Engineering for more than 20 years until his retirement in
                         1996. Dr. Gyftopoulos is also a director of Thermo BioAnalysis
                         Corporation, Thermo Cardiosystems Inc., Thermo Electron,
                         ThermoLase Corporation, ThermoRetec Corporation, ThermoSpectra
                         Corporation, Thermo Vision Corporation and Thermo Voltek Corp.
Hal Kirshner............ Mr. Kirshner, 57, has been a director of the Corporation since
                         its inception in October 1995. He was the chief executive
                         officer and president of the Corporation from October 1995
                         through December 13, 1998. Mr. Kirshner was also president of
                         the LORAD division of the Corporation from 1991 until 1997.
John T. Keiser.......... Mr. Keiser, 63, has been a director of the Corporation since
                         June 1997. He has been the chief operating officer, biomedical
                         and advanced technology, of Thermo Electron since September
                         1998, and a vice president from April 1997 until his
                         promotion. Mr. Keiser has been the president and chief
                         executive officer of Thermedics Inc., a majority-owned
                         subsidiary of Thermo Electron, since March 1998 and December
                         1998, respectively, and was a senior vice president of
                         Thermedics Inc. from 1994 until his promotion to president. He
                         has also been the president of Thermo Electron's wholly owned
                         biomedical group, a manufacturer of medical equipment and
                         instruments, since 1994. Mr. Keiser was president of the
                         Eberline Instrument, division of Thermo Instrument Systems
                         Inc., a majority-owned subsidiary of Thermo Electron, from
                         1985 to July 1994. The Eberline Instrument division
                         manufactures radiation detection and counting instrumentation
                         and radiation monitoring systems. Mr. Keiser is a director of
                         Metrika Systems Corporation, Thermedics Inc., Thermedics
                         Detection Inc., Thermo Cardiosystems Inc., ThermoLase
                         Corporation, Thermo Sentron Inc. and ThermoTrex Corporation.
James W. May, Jr. ...... Dr. May, 55, has been a director of the Corporation since
                         February 1996. He has been Professor of Surgery at Harvard
                         Medical School since 1994 and was Associate Clinical Professor
                         of Surgery for more than five years prior to that time. He has
                         also been Director of Plastic Surgery at Massachusetts General
                         Hospital since 1982.
Hutham S. Olayan........ Ms. Olayan, 44, has been a director of the Corporation since
                         February 1996. She has served since 1995 as president and a
                         director of Olayan America Corporation, a member of the Olayan
                         Group, and as president and a director of Competrol Real
                         Estate Limited, another member of the Olayan Group, until its
                         merger into Olayan America Corporation in 1997. The surviving
                         company is engaged in private investments, including real
                         estate, and advisory services. In addition, from 1985 to 1994,
                         Ms. Olayan served as president and a director of Crescent
                         Diversified Limited, another member of the Olayan Group
                         engaged in private investments. Ms. Olayan is also a director
                         of Thermo Electron.
</TABLE>
 

                                       3

<PAGE>

 
<TABLE>
<S>                      <C>
Firooz Rufeh............ Mr. Rufeh, 61, has been a director of the Corporation since
                         its inception in October 1995. Mr. Rufeh served as the chief
                         executive officer of ThermoTrex from 1988 to February 1996,
                         and as the president of ThermoTrex from 1988 to February 1997.
                         Mr. Rufeh also served as a vice president of Thermo Electron
                         from 1986 until his retirement in February 1997.
Gary S. Weinstein....... Mr. Weinstein, 41, has been a director of the Corporation and
                         its chairman of the board since February 1996. He has also
                         served as chief executive officer of ThermoTrex and as a vice
                         president of Thermo Electron since February 1996. Mr.
                         Weinstein was a managing director of Lehman Brothers Inc. from
                         1992 until February 1996, serving from March 1995 until
                         leaving the firm as managing director and head of global
                         syndicate and equity capital markets. Mr. Weinstein joined
                         Lehman Brothers in 1988 and served in various positions,
                         including head of equities in Europe, head of equity new
                         issues in North and South America and head of global
                         convertible securities. Mr. Weinstein is also a director of
                         ThermoLase Corporation and ThermoTrex.
</TABLE>
 
Committees of the Board of Directors and Meetings
 
  The board of directors has established an audit committee and a human
resources committee, each consisting solely of outside directors. The present
members of the audit committee are Ms. Olayan (Chairman), Dr. May and Dr.
Gyftopoulos. The audit committee reviews the scope of the audit with the
Corporation's independent public accountants and meets with them for the
purpose of reviewing the results of the audit subsequent to its completion.
The present members of the human resources committee are Dr. Gyftopoulos
(Chairman), Dr. May and Ms. Olayan. The human resources committee reviews the
performance of senior members of management, recommends executive compensation
and administers the Corporation's stock option and other stock-based
compensation plans. The Corporation does not have a nominating committee of
the board of directors. The board of directors met six times, the audit
committee met twice and the human resources committee met four times during
fiscal 1998. Each director attended at least 75% of all meetings of the board
of directors and committees on which he or she served held during fiscal 1998.
 
Compensation of Directors
 
 Cash Compensation
 
  Directors who are not employees of the Corporation, of Thermo Electron or of
any other companies affiliated with Thermo Electron (also referred to as
"outside directors") receive an annual retainer of $2,000 and a fee of $1,000
per day for attending regular meetings of the board of directors and $500 per
day for participating in meetings of the board of directors held by means of
conference telephone and for participating in certain meetings of committees
of the board of directors. Payment of outside directors' fees is made
quarterly. Mr. Kirshner, Mr. Keiser and Mr. Weinstein are all employees of
Thermo Electron and do not receive any cash compensation from the Corporation
for their services as directors. Directors are also reimbursed for out-of-
pocket expenses incurred in attending meetings.
 
 Deferred Compensation Plan for Directors
 
  Under the Deferred Compensation Plan for directors (the "Deferred
Compensation Plan"), a director has the right to defer receipt of his cash
fees until he ceases to serve as a director, dies or retires from his
principal occupation. In the event of a change in control or proposed change
in control of the Corporation that is not approved by the board of directors,
deferred amounts become payable immediately. Either of the following is deemed
to be a change of control: (a) the acquisition, without the prior approval of
the board of directors, directly or indirectly, by any person of 50% or more
of the outstanding common stock or the outstanding common stock of ThermoTrex
or 25% or more of the outstanding common stock of Thermo Electron; or (b) the
failure of the persons serving on the board of directors immediately prior to
any contested election of directors or any exchange
 
                                       4
 
<PAGE>

 
offer or tender offer for the Common Stock or the common stock of ThermoTrex
or Thermo Electron to constitute a majority of the board of directors at any
time within two years following any such event. Amounts deferred pursuant to
the Deferred Compensation Plan are valued at the end of each quarter as units
of common stock. When payable, amounts deferred may be disbursed solely in
shares of Common Stock accumulated under the Deferred Compensation Plan. A
total of 25,000 shares of Common Stock have been reserved for issuance under
the Deferred Compensation Plan. As of November 28, 1998, deferred units equal
to 2146.28 shares of Common Stock were accumulated under the Deferred
Compensation Plan.
 
 Directors Stock Option Plan
 
  The Corporation has adopted a directors stock option plan (the "Directors
Plan") providing for the grant of stock options to purchase shares of Common
Stock to outside directors as additional compensation for their service as
directors. The plan provides for the grant of stock options upon a director's
initial appointment and, beginning in 2000, awards options to purchase 1,000
shares annually to directors.
 
  Under the Plan, each eligible director and each new outside director
initially joining the board of directors in 1996 was granted an option to
purchase 40,000 shares of Common Stock upon the later of the adoption of the
plan or the director's appointment or election. The size of the award to new
directors appointed to the board of directors after 1996 is reduced by 10,000
shares in each subsequent year. Directors initially joining the board of
directors after 1999 would not receive an option grant upon their appointment
or election to the board of directors, but would be eligible to participate in
the annual option awards described below. Options evidencing initial grants to
directors are presently exercisable; however, the shares acquired upon
exercise are subject to restrictions on transfer and the right of the
Corporation to repurchase such shares at the exercise price in the event the
director ceases to serve as a director of the Corporation or another Thermo
Electron company. In such event, the restrictions and repurchase rights shall
lapse or be deemed to have lapsed in annual installments of 10,000 shares per
year, starting with the first anniversary of the date of grant, provided the
director has continuously served as a director of the Corporation, Thermo
Electron or any subsidiary of Thermo Electron since the grant date. These
options expire on the fifth anniversary of the grant date, unless the director
dies, ceases to be an eligible director or otherwise ceases to serve as a
director of the Corporation, Thermo Electron or any subsidiary of Thermo
Electron prior to that date.
 
  Commencing in 2000, eligible directors will also receive an annual grant of
options to purchase 1,000 shares of Common Stock, provided the Common Stock is
then publicly traded. The annual grant would be made at the close of business
on the date of each Annual Meeting of the Stockholders of the Corporation to
each outside director then holding office, commencing with the annual meeting
to be held in 2000. Options evidencing annual grants may be exercised at any
time from and after the six-month anniversary of the date of grant and prior
to the expiration of the option on the third anniversary of the date of grant.
Shares acquired upon exercise of the options would be subject to repurchase by
the Corporation at the exercise price if the recipient ceased to serve as a
director of the Corporation or any other Thermo Electron company prior to the
first anniversary of the date of grant for any reason other than death.
 
  The exercise price for options granted under the Plan is the average of the
closing prices of the Common Stock as reported on the American Stock Exchange
(or other principal exchange on which the Common Stock is then traded) for the
five trading days immediately preceding and including the date of grant, or,
if the shares are not then traded, at the last price paid per share by third
parties in an arms-length transaction prior to the option grant. As of
November 28, 1998, options to purchase 120,000 shares of Common Stock had been
granted and were outstanding under the Director's Plan, no options had lapsed,
no options had been exercised, and options to purchase 80,000 shares of Common
Stock were reserved and available for grant.
 
Stock Ownership Policies for Directors
 
  During fiscal 1996, the human resources committee of the board of directors
(the "Committee") established a stock holding policy for directors. The stock
holding policy requires each director to hold a minimum of 1,000
 
                                       5

 
<PAGE>
 
shares of Common Stock. Directors are requested to achieve this ownership
level within three years of their appointment. Directors who are also
executive officers of the Corporation are required to comply with a separate
stock holding policy established by the Committee in fiscal 1996, which is
described in the Committee Report on Executive Compensation--Stock Ownership
Policies.
 
  In addition, the Committee adopted a policy requiring directors to hold a
certain number of shares of the Corporation's Common Stock acquired upon the
exercise of stock options. Under this policy, directors are required to hold
shares of Common Stock equal to one-half of their net option exercises over a
period of five years. The net option exercise is determined by calculating the
number of shares acquired upon exercise of a stock option, after deducting the
number of shares that could have been traded to exercise the option and the
number of shares that could have been surrendered to satisfy tax withholding
obligations attributable to the exercise of the option. This policy is also
applicable to executive officers and is described in the Committee Report on
Executive Compensation--Stock Ownership Policies.
 
                                STOCK OWNERSHIP
 
  The following table sets forth the beneficial ownership of Common Stock, as
well as the common stock of Thermo Electron and ThermoTrex, as of November 28,
1998, with respect to (i) each person who was known by the Corporation to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) each
director and nominee for director, (iii) each executive officer named in the
summary compensation table under the heading "Executive Compensation" and (iv)
all directors and current executive officers as a group.
 
  While certain directors and executive officers of the Corporation are also
directors and executive officers of Thermo Electron or its subsidiaries other
than the Corporation, all such persons disclaim beneficial ownership of the
shares of Common Stock beneficially owned by Thermo Electron.
 
<TABLE>
<CAPTION>
                                 Trex Medical     ThermoTrex    Thermo Electron
Name(1)                         Corporation (2) Corporation (3) Corporation (4)
-------                         --------------- --------------- ---------------
<S>                             <C>             <C>             <C>
Thermo Electron Corporation
 (5)...........................   24,214,930            N/A              N/A
John M. Brenna.................       51,500              0           10,000
Elias P. Gyftopoulos...........       41,000          6,000           71,704
John T. Keiser.................       20,000              0          292,508
Hal Kirshner (6)...............      276,750         83,321           42,048
James W. May, Jr. .............       41,002              0                0
Hutham S. Olayan...............       46,173          6,000           28,262
Firooz Rufeh...................       40,000         52,645           88,185
Gary S. Weinstein..............      315,000        110,000          210,612
All directors and current
 executive officers as a group
 (11 persons) .................    1,244,425        271,882        1,177,444
</TABLE>
--------
(1) Except as reflected in the footnotes to this table, shares of Common Stock
    of the Corporation and of the common stock of Thermo Electron and
    ThermoTrex beneficially owned consist of shares owned by the indicated
    person or by that person for the benefit of minor children, and all share
    ownership includes sole voting and investment power.
(2) Shares of the Common Stock beneficially owned by each director and
    executive officer and by all directors and current executive officers as a
    group exclude 24,214,930 shares beneficially owned by Thermo Electron.
    Shares of the Common Stock beneficially owned by Mr. Brenna, Dr.
    Gyftopoulos, Mr. Keiser, Mr. Kirshner, Dr. May, Ms. Olayan, Mr. Rufeh, Mr.
    Weinstein and all directors and current executive officers as a group
    include 50,000, 40,000, 20,000, 158,250, 40,000, 40,000, 40,000, 300,000
    and 1,098,250 shares, respectively, that such person or group has the
    right to acquire within 60 days of November 28, 1998, through the exercise
    of stock options. Shares beneficially owned by Ms. Olayan and Dr. May
    include 1,173 and 972 full shares, respectively, that had been allocated
    through November 28, 1998, to Ms. Olayan's and Dr. May's accounts
    maintained under the Corporation's Deferred Compensation Plan for
    Directors. Shares beneficially owned by Ms. Olayan do not include 350,000
    shares owned by Crescent International Holdings Ltd. and 15,000 shares
    owned by Crescent Growth Fund Ltd., both members of the Olayan Group.
    Crescent
 
                                       6

<PAGE>
 
   International Holdings Ltd. and Crescent Growth Fund Ltd. are indirectly
   controlled by Suliman S. Olayan, Ms. Olayan's father. Ms. Olayan disclaims
   beneficial ownership of the shares owned by Crescent International Holdings
   Ltd. and Crescent Growth Fund Ltd. As of November 28, 1998, no director or
   current executive officer beneficially owned more than 1% of the Common
   Stock outstanding as of November 28, 1998. All directors and current
   executive officers as a group beneficially owned 3.67% of the Common Stock
   outstanding as of such date.
(3) Shares of the common stock of ThermoTrex beneficially owned by Dr.
    Gyftopoulos, Mr. Kirshner, Ms. Olayan, Mr. Rufeh, Mr. Weinstein and all
    directors and current executive officers as a group include 6,000, 73,000,
    6,000, 30,000, 100,000 and 225,000 shares, respectively, that such person
    or group has the right to acquire within 60 days of November 28, 1998,
    through the exercise of stock options. As of November 28, 1998, no
    director or current executive officer beneficially owned more than 1% of
    the common stock outstanding as of November 28, 1998; all directors and
    current executive officers as a group beneficially owned 1.45% of the
    common stock outstanding as of such date.
(4) Shares of the common stock of Thermo Electron beneficially owned by Mr.
    Brenna, Dr. Gyftopoulos, Mr. Keiser, Mr. Kirshner, Ms. Olayan, Mr. Rufeh,
    Mr. Weinstein and all directors and current executive officers as a group
    include 10,000, 9,125, 251,622, 39,550, 9,125, 73,123, 210,275, and
    975,592 shares, respectively, that such person or group has the right to
    acquire within 60 days of November 28, 1998, through the exercise of stock
    options. Shares beneficially owned by all directors and current executive
    officers as a group include 2,497 full shares allocated to their
    respective accounts maintained pursuant to Thermo Electron's employee
    stock ownership plan, of which the trustees, who have investment power
    over its assets, were, as of November 28, 1998, executive officers of
    Thermo Electron. Shares beneficially owned by Ms. Olayan and all directors
    and current executive officers as a group include 16,887 full shares,
    allocated through November 28, 1998, to Ms. Olayan's account maintained
    pursuant to Thermo Electron's deferred compensation plan for directors.
    Shares beneficially owned by Ms. Olayan do not include 6,050,000 shares
    owned by Crescent Holding GmbH and 20,000 shares owned by Crescent Growth
    Fund Ltd., both members of the Olayan Group. Crescent Holding GmbH and
    Crescent Growth Fund Ltd. are indirectly controlled by Suliman S. Olayan,
    Ms. Olayan's father. Ms. Olayan disclaims beneficial ownership of the
    shares owned by Crescent Holding GmbH and Crescent Growth Fund Ltd. As of
    November 28, 1998, no director or current executive officer beneficially
    owned more than 1% of the outstanding Thermo Electron Common Stock; all
    directors and current executive officers as a group beneficially owned
    less than 1% of the Thermo Electron common stock outstanding as of
    November 28, 1998.
(5) Thermo Electron beneficially owned 72.24% of the Common Stock outstanding
    as of November 28, 1998, 70.28% of which is owned through ThermoTrex,
    which is a majority-owned subsidiary of Thermo Electron. Shares
    beneficially owned by Thermo Electron include 678,541 shares issuable upon
    conversion of a 4.2% convertible debenture due in 2000. Thermo Electron's
    address is 81 Wyman Street, Waltham, Massachusetts 02454-9046. As of
    November 28, 1998, Thermo Electron had the power to elect all of the
    members of the Corporation's board of directors.
(6) Mr. Kirshner resigned as president and chief executive officer of the
    Corporation effective as of December 13, 1998 and his employment with the
    Corporation was terminated effective December 31, 1998. He will continue
    to serve as a director and consultant to the Corporation. See Executive
    Compensation--Severance Agreement.
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
  Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and beneficial owners of more
than 10% of the Common Stock, such as Thermo Electron, to file with the
Securities and Exchange Commission initial reports of ownership and periodic
reports of changes in ownership of the Corporation's securities. Based upon a
review of such filings, all Section 16(a) filing requirements applicable to
such persons were complied with during fiscal 1998, except in the following
instances. Mr. Kirshner filed a Form 4 late, reporting two sales of shares of
Common Stock. Thermo Electron filed seven Forms 4 late, reporting a total of
28 transactions. including three open market purchases of shares of Common
Stock and 25 transactions associated with the grant, exercise and lapse of
options to purchase Common Stock granted to employees under its stock option
program.
 
                                       7

<PAGE>
 
 
                            EXECUTIVE COMPENSATION
 
Summary Compensation Table
 
  The following table summarizes compensation for services to the Corporation
in all capacities awarded to, earned by or paid to the Corporation's chief
executive officer and four other most highly compensated executive officers
(the "named executive officers") for the last three fiscal years. The
Corporation has a fiscal year that is the 52- or 53- week period ending on the
Saturday nearest September 30.
 
  The Corporation is required to appoint certain executive officers and full-
time employees of Thermo Electron as executive officers of the Corporation, in
accordance with the Thermo Electron Corporate Charter. The compensation for
these executive officers is determined and paid entirely by Thermo Electron.
The time and effort devoted by these individuals to the Corporation's affairs
is provided to the Corporation under the Corporate Services Agreement between
the Corporation and Thermo Electron. Accordingly, the compensation for these
individuals is not reported in the following table.
 
                          Summary Compensation Table
 
<TABLE>
<CAPTION>
                                      Annual
                                 Compensation (1)     Long Term Compensation
                                ------------------    -----------------------
                                                      Securities Underlying
Name and Principal       Fiscal            Bonus      Options (No. of Shares     All Other
Position                  Year   Salary     (2)          and Company) (3)    Compensation  (4)
------------------       ------ --------- --------    ----------------------------------------
<S>                      <C>    <C>       <C>         <C>         <C>        <C>
Hal Kirshner (7)........  1998  $ 218,750 $100,000          8,250 (TXM)           $ 5,625
 Former Chief Executive
 Officer                                                    7,600 (TMO)
 and President                                              2,000 (MKA)
                                                            2,000 (ONX)
                                                           20,000 (RGI)
                                                            2,000 (TDX)
                                                            1,000 (TISI)
                                                           30,000 (TLZ)
                                                            2,000 (TRIL)
                                                            1,500 (VIZ)
                                                            2,000 (TRCC)
                          1997  $ 197,500 $200,000            300 (TMO)           $ 5,344
                          1996  $ 192,500 $200,000        150,000 (TXM)           $ 9,958 (5)
                                                              150 (TMO)
                                                            2,000 (TBA)
                                                            2,000 (TFG)
                                                            2,000 (TLT)
                                                            6,000 (TOC)
                                                            6,000 (TMQ)
                                                            2,000 (TSR)
John M. Brenna (6)......  1998  $ 134,875     n/a (2)         --        --        $ 1,654
 Vice President           1997  $ 128,750 $ 63,000         30,000 (TXM)               --
                                                           10,000 (TMO)               --
</TABLE>
--------
(1) Annual compensation for executive officers generally is reviewed and
    determined on a calendar year basis, even though the Corporation's fiscal
    year ends in September. The salary data presented here has been adjusted
    to reflect salary paid during the Corporation's fiscal year.
(2) The bonus amount represents the bonus paid for performance during the
    calendar year in which the Corporation's fiscal year-end occurred. As of
    the date hereof, bonuses have not yet been determined for calendar 1998.
    The Committee expects to determine bonuses in March 1999 when audited
    financial statements of the Corporation's parent company will be
    available.
(3) In addition to receiving options to purchase Common Stock (designated in
    the table as "TXM"), the named executive officers of the Corporation were
    granted options to purchase shares of the common stock of Thermo Electron
    and certain of its other subsidiaries as part of Thermo Electron's stock
    option program. Options have been granted during the period covered by the
    table to the named executive officers in the following Thermo Electron
    companies: Thermo Electron (designated in the table as TMO), Metrika
    Systems Corporation (designated in the table as MKA), ONIX Systems Inc.
    (designated in the table as ONX), The Randers Killam Group Inc.
    (designated in the table as RGI), Thermedics Detection Inc. (designated in
    the
 
                                       8
<PAGE>
 
   table as TDX), Thermo BioAnalysis Corporation (designated in the table as
   TBA), Thermo Fibergen Inc. (designated in the table as TFG), Thermo
   Information Solutions Inc. (designated in the table as TISI), ThermoLase
   Corporation (designated in the table as TLZ), ThermoLyte Corporation
   (designated in the table as TLT), Thermo Optek Corporation (designated in
   the table as TOC), ThermoQuest Corporation (designated in the table as
   TMQ), Thermo Sentron Inc. (designated in the table as TSR), Thermo Trilogy
   Corporation (designated in the table as TRIL), Thermo Vision Corporation
   (designated in the table as VIZ) and Trex Communications Corporation
   (designated in the table as TRCC).
(4) Represents the amount of matching contributions made by the individual's
    employer on behalf of executive officers participating in the Thermo
    Electron 401(k) plan.
(5) In addition to a $5,344 matching contribution referred to in footnote (4),
    this amount includes $4,614, representing the then market value of 115
    shares of Thermo Electron Common Stock received by Mr. Kirshner in May
    1996 at Thermo Electron's Annual Management Conference in recognition of
    his managerial achievements.
(6) Mr. Brenna was appointed a vice president of the Corporation in December
    1996.
(7) Mr. Kirshner resigned as president and chief executive officer of the
    Corporation effective as of December 13, 1998 and his employment with the
    Corporation was terminated effective December 31, 1998. He will continue
    to serve as a director and consultant to the Corporation. See Executive
    Compensation--Severance Agreement.
 
Stock Options Granted During Fiscal 1998
 
  The following table sets forth information concerning individual grants of
stock options by the Corporation and other Thermo Electron companies made
during fiscal 1998 to the Corporation's chief executive officer and the other
named executive officers in their capacities as executive officers of the
Corporation. It has not been the Corporation's policy in the past to grant
stock appreciation rights, and no such rights were granted during fiscal 1998.
 
                         Option Grants in Fiscal 1998
 
<TABLE>
<CAPTION>
                                                                                          Potential Realizable
                                                                                            Value at Assumed
                                                 Percent of                              Annual Rates of Stock
                                                    Total                                Price Appreciation for
                         Number of Securities  Options Granted                              Option Term (2)
                          Underlying Options    to Employees   Exercise Price Expiration ----------------------
Name                          Granted (1)      in Fiscal Year    Per Share       Date        5%         10%
----                     --------------------- --------------- -------------- ---------- ---------- -----------
<S>                      <C>        <C>        <C>             <C>            <C>        <C>        <C>
Hal Kirshner(4).........      8,250 (TXM)           1.93%         $ 14.20      12/12/04  $   47,685 $  111,128
                                400 (TMO)           0.02% (3)     $ 34.50      06/02/03  $    3,812 $     8,424
                              7,200 (TMO)           0.36% (3)     $ 16.20      09/23/03  $   32,256 $    71,208
                              2,000 (MKA)           0.88% (3)     $ 14.23      01/21/05  $   11,580 $    27,000
                              2,000 (ONX)           0.23% (3)     $ 14.25      01/21/05  $   11,600 $    27,040
                             20,000 (RGI)           0.23% (3)     $  0.80      01/21/05  $    6,600 $    15,200
                              2,000 (TDX)           0.21% (3)     $  9.56      01/21/05  $    7,780 $    18,140
                              1,000 (TISI)          1.62% (3)     $ 10.00      01/21/05  $    4,070 $     9,490
                             30,000 (TLZ)           2.87% (3)     $  7.69      03/05/03  $   63,600 $   140,700
                              2,000 (TRIL)          1.43% (3)     $  8.25      01/21/05  $    6,720 $    15,660
                              1,500 (VIZ)           0.35% (3)     $  7.25      01/21/05  $    4,425 $    10,320
                              2,000 (TRCC)          0.16% (3)     $  4.00      01/21/05  $    3,260 $     7,580
John M. Brenna..........        --     --             --              --            --          --          --
</TABLE>
--------
(1) As part of Thermo Electron's stock option program, options have been
    granted during fiscal 1998 to the named executive officers to purchase the
    common stock of the Corporation (TXM), Thermo Electron (TMO), Metrika
    Systems Corporation (MKA), ONIX Systems Inc. (ONX), The Randers Group
    Incorporated (RGI), Thermedics Detection Inc. (TDX), Thermo Information
    Solutions Inc. (TISI), ThermoLase Corporation (TLZ), Thermo Trilogy
    Corporation (TRIL), Thermo Vision Corporation (VIZ) and Trex
    Communications Corporation (TRCC). All of the options granted during the
    fiscal year are immediately exercisable as of the end of the fiscal year
    except for Thermo Information Solutions Inc., Thermo Trilogy Corporation
    and Trex Communications Corporation, which are not exercisable until the
    earlier of (i) 90 days after the effective date of the registration of the
    Company's common stock under
 
 
                                       9
<PAGE>
 
   Section 12 of the Securities and Exchange Act of 1934 and (ii) nine years
   after the grant date. The shares acquired upon exercise are subject to
   repurchase by the granting corporation at the exercise price if the optionee
   ceases to be employed by the Corporation or another Thermo Electron company.
   For publicly traded companies, the repurchase rights generally lapse ratably
   over a one- to five-year period, depending on the option term, which may
   vary from five to seven years, provided that the optionee continues to be
   employed by the Corporation or another Thermo Electron Company. For
   companies that are not publicly traded, the repurchase rights lapse in their
   entirety on the ninth anniversary of the grant date. The granting
   corporation may exercise its repurchase rights within six months after the
   termination of the optionee's employment. The granting corporation may
   permit the holders of such options to exercise options and to satisfy tax
   withholding obligations by surrendering shares equal in fair market value to
   the exercise price or withholding obligation.
(2) The amounts shown in this table represent hypothetical gains that could be
    achieved for the respective options if exercised at the end of the option
    term. These gains are based on assumed rates of stock appreciation of 5%
    and 10%, compounded annually from the date the respective options were
    granted to their expiration date. The gains shown are net of the option
    exercise price, but do not include deductions for taxes or other expenses
    associated with the exercise. Actual gains, if any, on stock option
    exercises will depend on the future performance of the Common Stock of the
    granting corporation, the optionee's continued employment through the
    option period and the date on which the options are exercised.
(3) These options were granted under stock option plans maintained by Thermo
    Electron and, accordingly, are reported as a percentage of total options
    granted to employees of Thermo Electron and its subsidiaries.
(4) Mr. Kirshner resigned as president and chief executive officer of the
    Corporation effective as of December 13, 1998 and his employment with the
    Corporation was terminated effective December 31, 1998. He will continue to
    serve as a director and consultant to the Corporation. See Executive
    Compensation--Severance Agreement.
 
Stock Options Exercised During Fiscal 1998 and Fiscal Year-End Values
 
  The following table reports certain information regarding stock option
exercises during fiscal 1998 and outstanding stock options to purchase shares
of Thermo Electron companies held at the end of fiscal 1998 by the
Corporation's chief executive officer and the other named executive officers.
No stock appreciation rights were exercised or were outstanding during fiscal
1998.
 
   Aggregated Option Exercises In Fiscal 1998 and Fiscal 1998 Year-End Option
                                     Values
 
<TABLE>
<CAPTION>
                                                                              Number of
                                                                             Unexercised
                                                       Shares             Options at Fiscal     Value of
                                                      Acquired   Value         Year-End       Unexercised
                                                         on    Realiized    (Exercisable/    In- the- Money
Name                               Company            Exercise    (1)     Unexercisable) (2)    Options
----                               -------            -------- ---------- ---------------------------------
<S>                      <C>                          <C>      <C>        <C>       <C>      <C>
Hal Kirshner(5)......... Trex Medical                     --          --   158,250  /0        $       0/--
                         Thermo Electron               84,375  $2,366,550    39,550 /0(3)     $       0/--
                         Metrika Systems                  --          --      2,000 /0        $       0/--
                         ONIX Systems                     --          --      2,000 /0        $       0/--
                         Randers Killam Group             --          --     20,000 /0        $       0/--
                         Thermedics Detection             --          --      2,000 /0        $       0/--
                         Thermo BioAnalysis               --          --      2,000 /0        $   1,250/--
                         Thermo Fibergen                  --          --      2,000 /0        $       0/--
                         Thermo Information Solutions     --          --          0 /1,000            --/0(4)
                         ThermoLase                       --          --     66,400 /0        $ 131,950/--
                         ThermoLyte                       --          --          0 /2,000            --/0(4)
                         Thermo Optek                     --          --      6,000 /0        $       0/--
                         ThermoQuest                      --          --      6,000 /0        $       0/--
                         Thermo Sentron                   --          --      2,000 /0        $       0/--
                         ThermoTrex                       --          --     73,000 /0        $ 114,393/--
                         Thermo Trilogy                   --          --          0 /2,000            --/0(4)
                         Thermo Vision                    --          --      1,500 /0        $       0/--
                         Trex Communications              --          --          0 /2,000            --/0(4)
John Brenna............. Trex Medical                     --          --     50,000 /0        $       0/--
                         Thermo Electron                  --          --     10,000 /0        $       0/--
</TABLE>

 
                                      10
<PAGE>
 
--------
(1) Amounts shown in this column do not necessarily represent actual value
    realized from the sale of the shares acquired upon exercise of the option
    because in many cases the shares are not sold on exercise but continue to
    be held by the executive officer exercising the option. The amounts shown
    represent the difference between the option exercise price and the market
    price on the date of exercise, which is the amount that would have been
    realized if the shares had been sold immediately upon exercise.
(2) All of the options reported outstanding at the end of the fiscal year are
    immediately exercisable as of fiscal year-end, except options to purchase
    shares of ThermoLyte Corporation, Thermo Information Solutions Inc.,
    Thermo Trilogy Corporation and Trex Communications Corporation, which are
    not exercisable until the earlier of (i) 90 days after the effective date
    of the registration of that company's common stock under Section 12 of the
    Securities Exchange Act of 1934 and (ii) nine years after the grant date.
    In all cases, the shares acquired upon exercise of the options reported in
    the table are subject to repurchase by the granting corporation at the
    exercise price if the optionee ceases to be employed by such corporation
    or another Thermo Electron company. The granting corporation may exercise
    its repurchase rights within six months after the termination of the
    optionee's employment. As to options to purchase 150,000 shares of the
    Corporation granted to Mr. Kirshner, the repurchase rights are deemed to
    lapse 10% on each of the first two anniversaries of the grant date and 20%
    per year commencing on the seventh anniversary of the grant date. For
    other publicly traded companies, the repurchase rights generally lapse
    ratably over a five- to ten-year period, depending on the option term,
    which may vary from seven to twelve years, provided that the optionee
    continues to be employed by the Corporation or another Thermo Electron
    company. For companies that are not publicly traded, the repurchase rights
    lapse in their entirety on the ninth anniversary of the grant date.
    Certain options granted as part of Thermo Electron's stock option program
    have three year terms, and the repurchase rights lapse in their entirety
    on the second anniversary of the grant date.
(3) Options to purchase 22,500 shares of the common stock of Thermo Electron
    granted to Mr. Kirshner are subject to the same terms described in
    footnote (2), except that the repurchase rights of the granting
    corporation generally do not lapse until the tenth anniversary of the
    grant date. In the event of the employee's death or involuntary
    termination prior to the tenth anniversary of the grant date, the
    repurchase rights of the granting corporation shall be deemed to have
    lapsed ratably over a five-year period commencing with the fifth
    anniversary of the grant date.
(4) No public market existed for the shares as of October 31, 1998.
    Accordingly, no value in excess of the exercise price has been attributed
    to these options.
(5) Mr. Kirshner resigned as president and chief executive officer of the
    Corporation effective as of December 13, 1998 and his employment with the
    Corporation was terminated effective December 31, 1998. He will continue
    to serve as a director and consultant to the Corporation.
 
Severance Agreements
 
  Mr. Hal Kirshner resigned as president and chief executive officer of the
Corporation effective as of December 13, 1998 and his employment with the
Corporation was terminated effective December 31, 1998 (the "Employment
Termination Date"). In connection with his resignation, the Corporation
entered into an agreement with Mr. Kirshner providing that in addition to
receiving his regular salary through the Employment Termination Date, Mr.
Kirshner will be paid a bonus for the 1998 calendar year in an amount equal to
$100,000. The agreement also provides for an ongoing consulting relationship
between Mr. Kirshner and the Corporation for the two year period from January
1, 1999 to December 31, 2000. For his consulting services, Mr. Kirshner will
be paid a fee at a rate of $225,000 per year, payable monthly in arrears. Mr.
Kirshner will continue to serve as a director of the Corporation.
 
Executive Employment Agreements
 
  Mr. William J. Webb joined the Corporation as president and chief executive
officer in January 1999. In connection therewith, the Corporation entered into
an agreement with Mr. Webb providing for severance pay equal to one year
salary and bonus (with a minimum payment of $450,000), reimbursement of
relocation expenses (including broker's fee and assistance with down payment
on new residence), an interest free loan to purchase shares of Common Stock of
the Corporation in compliance with the Corporation's stock holding policy and
stock holding assistance plan. See Committee Report on Executive
Compensation--Stock Ownership Policies, and enhanced life insurance coverage.

 
                                      11
<PAGE>
                         RELATIONSHIP WITH AFFILIATES
 
  Thermo Electron has adopted a strategy of selling a minority interest in
subsidiary companies to outside investors as an important tool in its future
development. As part of this strategy, Thermo Electron and certain of its
subsidiaries have created several privately and publicly held majority-owned
subsidiaries, including the Corporation which was created by ThermoTrex. From
time to time, Thermo Electron and its subsidiaries will create other majority-
owned subsidiaries as part of its spinout strategy. (The Corporation and the
other Thermo Electron subsidiaries are referred to hereinafter as the "Thermo
Subsidiaries." )
 
  Thermo Electron and each of the Thermo Subsidiaries recognize that the
benefits and support that derive from their affiliation are essential elements
of their individual performance. Accordingly, Thermo Electron and each of the
Thermo Subsidiaries, including the Corporation, have adopted the Thermo Electron
Corporate Charter (the "Charter") to define the relationships and delineate the
nature of such cooperation among themselves. The purpose of the Charter is to
ensure that (1) all of the companies and their shareholders are treated
consistently and fairly, (2) the scope and nature of the cooperation among the
companies, and each company's responsibilities, are adequately defined, (3) each
company has access to the combined resources and financial, managerial and
technological strengths of the others, and (4) Thermo Electron and the Thermo
Subsidiaries, in the aggregate, are able to obtain the most favorable terms from
outside parties.
 
  To achieve these ends, the Charter identifies the general principles to be
followed by the companies, addresses the role and responsibilities of the
management of each company, provides for the sharing of group resources by the
companies and provides for centralized administrative, banking and credit
services to be performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by members,
coordinating the access of Thermo Electron and the Thermo Subsidiaries (the
"Thermo Group") to external financing sources, ensuring compliance with
external financial covenants and internal financial policies, assisting in the
formulation of long-range planning and providing other banking and credit
services. Pursuant to the Charter, Thermo Electron may also provide guarantees
of debt or other obligations of the Thermo Subsidiaries or may obtain external
financing at the parent level for the benefit of the Thermo Subsidiaries. In
certain instances, the Thermo Subsidiaries may provide credit support to, or
on behalf of, the consolidated entity or may obtain financing directly from
external financing sources. Under the Charter, Thermo Electron is responsible
for determining that the Thermo Group remains in compliance with all covenants
imposed by external financing sources, including covenants related to
borrowings of Thermo Electron or other members of the Thermo Group, and for
apportioning such constraints within the Thermo Group. In addition, Thermo
Electron establishes certain internal policies and procedures applicable to
members of the Thermo Group. The cost of the services provided by Thermo
Electron to the Thermo Subsidiaries is covered under existing corporate
services agreements between Thermo Electron and each of the Thermo
Subsidiaries.
 
  The Charter presently provides that it shall continue in effect so long as
Thermo Electron and at least one Thermo Subsidiary participate. The Charter
may be amended at any time by agreement of the participants. Any Thermo
Subsidiary, including the Corporation, may withdraw from participation in the
Charter upon 30 days' prior notice. In addition, Thermo Electron may terminate
a subsidiary's participation in the Charter in the event the subsidiary ceases
to be controlled by Thermo Electron or ceases to comply with the Charter or
the policies and procedures applicable to the Thermo Group. A withdrawal from
the Charter automatically terminates the corporate services agreement and tax
allocation agreement (if any) in effect between the withdrawing company and
Thermo Electron. The withdrawal from participation does not terminate
outstanding commitments to third parties made by the withdrawing company, or
by Thermo Electron or other members of the Thermo Group, prior to the
withdrawal. In addition, a withdrawing company is required to continue to
comply with all policies and procedures applicable to the Thermo Group and to
provide certain administrative functions mandated by Thermo Electron so long
as the withdrawing company is controlled by or affiliated with Thermo
Electron.
 
Corporate Services Agreement
 
  As provided in the Charter, Thermo Electron and the Corporation have entered
into a Corporate Services Agreement (the "Services Agreement") under which
Thermo Electron's corporate staff provides certain administrative services,
including certain legal advice and services, risk management, certain employee
benefit administration, tax advice and preparation of tax returns, centralized
cash management and certain financial and other services to the Corporation.
The Corporation was assessed an annual fee equal to 1% of the Corporation's
total revenues for these services in calendar 1997 and 0.8% of the
Corporation's total revenues in calendar 1998. The annual fee will be 0.8% of
the Corporation's total revenues in calendar 1999. The fee may be changed by
mutual agreement of the Corporation and Thermo Electron. During fiscal 1998,
Thermo Electron assessed the Corporation $1,112,000 in fees under the Services
Agreement. Management believes that the charges under the Services Agreement
are reasonable and that such fees are representative of the expenses the
Corporation would have incurred on a stand-alone basis. For additional items
such as employee benefit plans, insurance coverage
 
                                      12
<PAGE>
 
 
and other identifiable costs, Thermo Electron charges the Corporation based
upon costs attributable to the Corporation. The Services Agreement
automatically renews for successive one-year terms, unless canceled by the
Corporation upon 30 days' prior notice. In addition, the Services Agreement
terminates automatically in the event the Corporation ceases to be a member of
the Thermo Group or ceases to be a participant in the Charter. In the event of
a termination of the Services Agreement, the Corporation will be required to
pay a termination fee equal to the fee that was paid by the Corporation for
services under the Services Agreement for the nine-month period prior to
termination. Following termination, Thermo Electron may provide certain
administrative services on an as-requested basis by the Corporation or as
required in order to meet the Corporation's obligations under Thermo
Electron's policies and procedures. Thermo Electron will charge the
Corporation a fee equal to the market rate for comparable services if such
services are provided to the Corporation following termination.
 
Miscellaneous
 
  From time to time, the Corporation may transact business with other
companies in the Thermo Group. In fiscal 1998, such transactions included the
following.
 
  In October 1995, the Corporation and ThermoTrex entered into a license
agreement under which the Corporation undertook to fund approximately
$6,000,000 of ThermoTrex's research and development efforts related to direct-
detection digital imaging technology in certain medical imaging fields.
ThermoTrex has granted the Corporation a license to use the developed
technology in the fields of mammography and general radiography. As of October
3, 1998, the Corporation had recorded expenses of approximately $6,000,000 to
ThermoTrex under this agreement. As a result of a reevaluation of limited
resources, the Corporation has elected to discontinue funding these efforts.
 
  The Corporation has an arrangement with the Tecomet division of Thermo
Electron for the manufacture of the Corporation's proprietary HTC grid. Under
this arrangement Tecomet manufactures the grid for the Corporation pursuant to
written purchase orders. The Corporation owns the intellectual property rights
to the grid. During fiscal 1998, the Corporation purchased grids for an
aggregate purchase price of $486,000 under this arrangement. During fiscal
1998, the Corporation purchased additional grids from Tecomet for $311,000,
under other arrangements.
 
  Under an arrangement with ThermoLase Corporation, a majority-owned
subsidiary of ThermoTrex, the Corporation manufactures the lasers used in
ThermoLase Corporation's hair-removal process. The Corporation manufactures
these lasers for ThermoLase pursuant to written purchase orders. During fiscal
1998, the Corporation sold laser systems to ThermoLase for an aggregate
purchase price of $2,902,000 under this arrangement.
 
  Under an arrangement with Thermedics Detection Inc., a majority-owned
subsidiary of Thermedics Inc., a majority-owned subsidiary of Thermo Electron,
the Corporation manufactures an X-ray source that is used as a component in a
fill-measuring device produced by Thermedics Detection. The Corporation
manufactures these X-ray sources for Thermedics Detection pursuant to written
purchase orders. During fiscal 1998, Thermedics Detection purchased X-ray
source units from the Corporation for an aggregate purchase price of $406,000
under this arrangement.
 
  As of October 3, 1998, the Corporation owed ThermoTrex $8,000,000 principal
amount pursuant to a 4.2% subordinated convertible note, due September 2000,
convertible into shares of the Corporation's common stock at $11.79 per share.
 
  As of October 3, 1998, the Corporation owed Thermo Electron and its other
subsidiaries an aggregate of $5,110,000 for amounts due under the Corporate
Services Agreement and related administrative charges, for other products and
services for accrued income taxes and for miscellaneous items, excluding the
debenture described above, net of amounts owed to the Corporation by Thermo
Electron and its other subsidiaries for products and services and
miscellaneous items. The largest amount of such net indebtedness owed by the

 
                                      13
<PAGE>
 
Corporation to Thermo Electron and its other subsidiaries since September 27,
1997 was $2,186,000. These amounts do not bear interest and are expected to be
paid in the normal course of business.
 
  As of October 3, 1998, $34,054,000 of the Corporation's cash equivalents
were invested pursuant to a repurchase agreement with Thermo Electron. Under
this agreement, the Corporation in effect lends excess cash to Thermo
Electron, which Thermo Electron collateralizes with investments principally
consisting of corporate notes, United States government agency securities,
money market funds, commercial paper and other marketable securities, in the
amount of at least 103% of such obligation. The Corporation's funds subject to
the repurchase agreement are readily convertible into cash by the Corporation.
The repurchase agreement earns a rate based on the 90-day Commercial Paper
Composite Rate plus 25 basis points, set at the beginning of each quarter.
 
Stock Holding Assistance Plan
 
  In 1996, the Corporation adopted a stock holding policy which requires its
executive officers to acquire and hold a minimum number of shares of Common
Stock. In order to assist the executive officers in complying with the policy,
the Corporation also adopted a Stock Holding Assistance Plan under which it
may make interest-free loans to certain key employees, including its executive
officers, to enable such employees to purchase the Common Stock in the open
market. No such loans are currently outstanding under the plan.
 
                                      14