Line a 9X13 pan or dish with parchment paper. Use clothes pins to hold it in place.
In a large, heavy bottom pan (not teflon) over medium heat, place all ingredients except for the vanilla.
Stir continually with a wooden spoon, making sure to get the bottom of the pan. When it starts to boil, insert the candy thermometer (it clips to the side of the pan).
When the candy temperature reaches 240 degrees, remove from heat and stir in the vanilla.
Return to medium heat and keep stirring until it reaches 240 again. Test candy by drizzling a bit into a cup of ice water to see if you like the firmness. You will have to find your magic number because every thermometer and environment is a little different. With my old thermometer I used to take it all they way up to 250 degrees. With my new digitial thermometer its is plenty firm between 240-245 degrees.
Dump all the caramel into your parchment lined pan and let cool completely before cutting and wrapping.
Notes
A few times I've let my caramels cool and found them to be too soft. If this happens you can simply put it back in the pan and reheat it again. On the contrary, if you over cooked the caramel and they're too hard, well, consider them hard candies!