AGREEMENT AND PLAN OF MERGER

by and among

TELIC OPTICS, INC.,

THE STOCKHOLDERS OF TELIC OPTICS, INC. NAMED HEREIN,

AXSYS TECHNOLOGIES, INC.

and

BIFOCAL ACQUISITION CORP.

Dated as of April 8, 2004

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AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of April 8, 2004, is by and among Telic Optics, Inc., a Massachusetts corporation (“Target”), the stockholders of Target set forth on the signature pages hereto (collectively, the “Principal Stockholders”), Axsys Technologies, Inc., a Delaware corporation (“Acquirer”), and Bifocal Acquisition Corp., a Massachusetts corporation (“Merger Sub”).

RECITALS

WHEREAS, the parties desire to enter into this Agreement, pursuant to which Merger Sub will be merged with and into Target, with the result that (i) the separate corporate existence of Merger Sub will cease and Target will continue as the surviving corporation and a wholly owned subsidiary of Acquirer and (ii) the Holders will receive the cash consideration specified herein.

STATEMENT OF AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, subject to the terms and conditions on this Agreement, the parties hereto agree as follows:

ARTICLE I

MERGER, STRUCTURE, CERTAIN OTHER MATTERS

Section 1.1                                      The Merger.  At the Effective Time, Merger Sub will be merged with and into Target (the “Merger”), the separate existence of Merger Sub shall cease and Target shall continue as the surviving corporation.  Target as the surviving corporation after the Merger is referred to herein as the “Surviving Corporation.”

Section 1.2                                      Closing: Effective Time.  The closing of the Merger (the “Closing”) shall take place on the date hereof (the “Closing Date”), simultaneously with the execution of this Agreement, or at such other time and place as the parties hereto may agree.  Legal title, equitable title and risk of loss with respect to Target’s assets and properties will pass to the Surviving Corporation, and the Merger will be deemed effective for tax, accounting and other computational purposes, and the parties will treat the Closing as if it had occurred, as of 12:01 a.m. (Eastern Daylight Savings Time) on April 8, 2004 (the “Effective Date”). On or as promptly as practicable after the Closing Date, the parties hereto shall cause the Merger to be consummated by filing Articles of Merger with the Secretary of the Commonwealth of the Commonwealth of Massachusetts, in such form as required by, and executed in accordance with the relevant provisions of, the laws of the Commonwealth of Massachusetts (the time of such filing being the “Effective Time”).

Section 1.3                                      Effect of the Merger.  At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the Business Corporation Law of the Commonwealth of Massachusetts.  Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all of the estate, property, rights, privileges, powers and franchises of Target and Merger Sub and all of their property, real, personal and mixed, and all the debts due on whatever account to either of them, as well as all stock subscriptions and other choses in action belonging to either of them, shall be transferred to and vested in the Surviving Corporation, without further act or deed.

Section 1.4                                      Subsequent Actions.  If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of either of Target or Merger Sub acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger or otherwise to carry out this Agreement, the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of either Target or Merger Sub, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of each of such corporations or otherwise, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Surviving Corporation or otherwise to carry out this Agreement.

Section 1.5                                      Conversion of Merger Sub Common Stock.  At the Effective Time, each share of common stock of Merger Sub (the “Merger Sub Common Stock”) that is issued and outstanding immediately prior to the Effective Time will be converted into one validly issued, fully paid and non-assessable share of common stock, $0.01 par value, of the Surviving Corporation.

Section 1.6                                      Conversion of Target Stock.  At the Effective Time, (a) each share of the common stock of Target (the “Target Common Stock”) that is issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without the need for any further action on the part of the holders of the Target Common Stock (except as expressly provided herein), be converted into and represent the right to receive (i) the Per Share Merger Consideration and (ii) a portion of the Earn-Out Payments determined in accordance with Section 1.9 and (b) each share of Target Common Stock that is held in treasury will automatically be cancelled without consideration being paid therefor.

Section 1.7                                      Stock Plans.

(a)                                  Upon consummation of the Merger, each then outstanding option to purchase Target Common Stock (the “Options”) granted under any of Target’s stock option agreements, each as amended (collectively, the “Option Plans”), whether or not then exercisable or vested, shall be acquired by the Surviving Corporation for cancellation in consideration of payment to the holders of such Options of (i) an amount in respect thereof equal to the product of (A) the excess, if any, of the Per Share Merger Consideration over the per share exercise price thereof and (B) the number of shares of Target Common Stock subject thereto (the “Option

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