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                                                                   EXHIBIT 10.27


                         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:

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                  (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.

         "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



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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.



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         "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 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



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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



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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.

         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.



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         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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         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



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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 an 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.

         (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.



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         (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.



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         (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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