Exhibit 10.35


                              THERMO TERRATECH INC.

                   DEFERRED COMPENSATION PLAN FOR DIRECTORS

                      As amended and restated as of 9/10/99


Section 1. Participation.  Any director of Thermo TerraTech Inc. (the "Company")
may elect to have such percentage as he or she may specify of the fees otherwise
payable to him or her  deferred and paid to him or her as provided in this Plan.
A director who is also an employee of the Company or any subsidiary or parent of
the Company,  shall not be eligible to participate  in this Plan.  Each election
shall be made by notice in writing delivered to the Secretary of the Company, in
such  form  as the  Secretary  shall  designate,  and  each  election  shall  be
applicable  only  with  respect  to fees  earned  subsequent  to the date of the
election for the period  designated in the form. The term  "participant" as used
herein  refers to any director who shall have made an election.  No  participant
may  defer  the  receipt  of any fees to be  earned  after the later to occur of
either (a) the date on which the  participant  shall  retire  from or  otherwise
cease to engage in his or her principal occupation or employment or (b) the date
on which he or she shall cease to be a director of the Company,  or such earlier
date as the Board of Directors of the Company,  with the participant's  consent,
may  designate  (the  "deferral  termination  date").  In  the  event  that  the
participant's deferral termination date is the date on which he or she ceases to
engage in his or her principal  occupation or employment,  the  participant or a
personal  representative shall advise the Company of that date by written notice
delivered to the Secretary of the Company.

Section 2.  Establishment of Deferred  Compensation  Accounts.  There shall be
established  for  each  participant  an  account  to  be  designated  as  that
participant's deferred compensation account.

Section  3.  Allocations  to  Deferred  Compensation  Accounts.  There  shall be
allocated to each participant's  deferred compensation account, as of the end of
each  quarter,  an amount equal to his or her fees for that  quarter  which that
participant shall have elected to have deferred pursuant to Section 1.

Section 4. Stock  Units and Stock Unit  Accounts.  All  amounts  allocated  to a
participant's  deferred compensation account pursuant to Section 3 and Section 5
shall be converted, at the end of each quarter, into stock units by dividing the
accumulated balance in the deferred  compensation  account as of the end of that
quarter by the average last sale price per share of the  Company's  common stock
as reported in The Wall Street  Journal,  for the five  business  days up to and
including the last business day of that quarter.  The number of stock units,  so
determined,  rounded to the nearest  one-hundredth of a share, shall be credited
to a separate stock unit account to be established for the participant,  and the


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aggregate  value  thereof as of the last  business day of that quarter  shall be
charged to the participant's  deferred compensation account. No amounts credited
to the  participant's  deferred  compensation  account  pursuant  to  Section  5
subsequent  to the close of the fiscal  year in which  occurs the  participant's
deferral  termination  date shall be converted into stock units. Any such amount
shall be  distributed  in cash as  provided  in Section  8. A maximum  number of
25,000 shares of the Company's  common stock may be  represented  by stock units
credited under this Plan,  subject to  proportionate  adjustment in the event of
any stock dividend,  stock split or other capital change affecting the Company's
common stock.

Section  5.  Cash  Dividend  Credits.  Additional  credits  shall  be  made to a
participant's  deferred compensation account, until all distributions shall have
been made from the  participant's  stock unit  account,  in amounts equal to the
cash  dividends  (or the fair market value of dividends  paid in property  other
than  dividends  payable in common stock of the Company)  which the  participant
would have received from time to time had he or she been the owner on the record
dates for the payment of such dividends of the number of shares of the Company's
common  stock  equal to the number of units in his or her stock unit  account on
those dates.

Section  6.  Stock  Dividend  Credits.  Additional  credits  shall  be made to a
participant's  stock unit account,  until all distributions shall have been made
from the  participant's  stock unit  account,  of a number of units equal to the
number  of  shares  of the  Company's  common  stock,  rounded  to  the  nearest
one-hundredth share, which the participant would have received from time to time
as stock  dividends  had he or she been the  owner on the  record  dates for the
payments of such stock dividends of the number of units of the Company's  common
stock equal to the number of units  credited to his or her stock unit account on
those dates.

Section 7. Adjustments in the Event of Certain  Transactions.  In the event of a
stock dividend, stock split or combination of shares, or other distribution with
respect to holders of Common Stock other than normal cash dividends,  the number
of  units  then  credited  to  a   partipant's   stock  unit  account  shall  be
appropriately  adjusted on the same basis. In the event of any recapitalization,
merger or  consolidation  involving the Company,  any  transaction  in which the
Company becomes a subsidiary of another entity, any sale or other disposition of
all or a  substantial  portion  of the  assets  of the  Company  or any  similar
transaction,  as  determined  by the  Board,  the  Board in its  discretion  may
terminate the Plan pursuant to Section 11.

Section  8.  Distribution  of  Stock  and  Cash  After  Participant's   Deferral
Termination  Date. When a participant's  deferral  termination date shall occur,
the Company shall become obligated to make the  distributions  prescribed in the
following paragraphs (a) and (b).

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      (a) The Company shall  distribute to the  participant the number of shares
of the common  stock of the Company  which shall equal the total number of units
accumulated  in his or her stock unit account as of the close of the fiscal year
in which the participant's  deferral  termination date occurs. Such distribution
of stock shall be made in ten annual  installments,  unless, at least six months
prior to his or her  deferral  termination  date,  the  participant  shall  have
elected,  by notice in writing filed with the Secretary of the Company,  to have
such  distribution  made in five annual  installments.  In either such case, the
installments  shall be of as nearly  equal  number  of  shares  as  practicable,
adjusted to reflect  any  changes  pursuant to Sections 6 and 7 in the number of
units  remaining  in the  participant's  stock  unit  account.  The  first  such
installment  shall be  distributed  within 60 days after the close of the fiscal
year in which the participant's  deferral termination date occurs. The remaining
installments  shall be  distributed  at annual  intervals  thereafter.  Anything
herein to the contrary  notwithstanding,  the Company shall have the option,  if
its Board of  Directors  shall by  resolution  so  determine,  in lieu of making
distribution  in ten or five annual  installments  as set forth above,  with the
participant's consent, to distribute stock or any remaining installments thereof
in a single  distribution  at any time following the close of the fiscal year in
which the participant's deferral termination date occurs.  Distribution of stock
made  hereunder  may be made from  shares of common  stock held in the  treasury
and/or from shares of authorized but previously unissued shares of common stock.

      (b) The Company shall  distribute to the participant sums in cash equal to
the balance credited to his or her deferred compensation account as of the close
of the fiscal  year in which his or her  deferral  termination  date occurs plus
such  additional  amounts  as  shall  be  credited  thereto  from  time  to time
thereafter  pursuant  to Section 5. The cash  distribution  shall be made on the
same dates as the annual distributions made pursuant to paragraph (a) above, and
each cash  distribution  shall  consist of the entire  balance  credited  to the
participant's   deferred   compensation  account  at  the  time  of  the  annual
distribution.

      If a participant's  deferral termination date shall occur by reason of his
or her death or if he or she shall  die  after his or her  deferral  termination
date but prior to receipt of all distributions of stock and cash provided for in
this Section 8, all stock and cash remaining  distributable  hereunder  shall be
distributed to such  beneficiary  as the  participant  shall have  designated in
writing  and filed  with the  Secretary  of the  Company  or, in the  absence of
designation,  to the participant's personal  representative.  Such distributions
shall be made in the same  manner and at the same  intervals  as they would have
been made to the participant had he or she continued to live.

Section 9.  Participant's  Rights  Unsecured.  The right of any  participant  to
receive  distributions  under Section 8 shall be an unsecured  claim against the
general  assets of the  Company.  The Company may but shall not be  obligated to
acquire shares of its outstanding common stock from time to time in anticipation
of its obligation to make such distributions,  but no participant shall have any
rights in or against any shares of stock so acquired  by the  Company.  All such
stock shall  constitute  general assets of the Company and may be disposed of by
the Company at such time and for such purposes as it may deem appropriate.

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10.   Change in Control

      10.1  Impact of Event

In the event of a "Change in Control" as defined in Section 10.2, the Plan shall
terminate and full distribution  shall be made from all  participants'  deferred
compensation  accounts  and stock  unit  accounts  effective  upon the Change of
Control.

      10.2  Definition of "Change in Control"

      "Change in Control"  means an event or occurrence  set forth in any one or
more of subsections (a) through (d) below (including an event or occurrence that
constitutes  a  Change  in  Control  under  one  of  such   subsections  but  is
specifically exempted from another such subsection):

      (a) the acquisition by an individual,  entity or group (within the meaning
of Section  13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial
ownership  of  any  capital  stock  of  Thermo  Electron   Corporation  ("Thermo
Electron") if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3  promulgated under the Exchange Act) 40% or more of either
(i) the  then-outstanding  shares  of  common  stock  of  Thermo  Electron  (the
"Outstanding  TMO  Common  Stock")  or (ii)  the  combined  voting  power of the
then-outstanding securities of Thermo Electron entitled to vote generally in the
election of  directors  (the  "Outstanding  TMO Voting  Securities");  provided,
however,  that for purposes of this subsection  (a), the following  acquisitions
shall  not  constitute  a Change  in  Control:  (i) any  acquisition  by  Thermo
Electron,  (ii) any acquisition by any employee  benefit plan (or related trust)
sponsored or  maintained  by Thermo  Electron or any  corporation  controlled by
Thermo  Electron,  or (iii) any  acquisition  by any  corporation  pursuant to a
transaction  which  complies with clauses (i) and (ii) of subsection (c) of this
definition; or

      (b) such  time as the  Continuing  Directors  (as  defined  below)  do not
constitute a majority of the Board of Directors of Thermo  Electron (the "Thermo
Board") (or, if applicable, the Board of Directors of a successor corporation to
Thermo  Electron),  where  the term  "Continuing  Director"  means at any date a
member of the Thermo  Board (i) who was a member of the Thermo  Board as of July
1, 1999 or (ii) who was nominated or elected subsequent to such date by at least
a majority of the  directors who were  Continuing  Directors at the time of such
nomination or election or whose election to the Thermo Board was  recommended or
endorsed by at least a majority of the directors who were  Continuing  Directors
at the time of such nomination or election;  provided, however, that there shall
be excluded from this clause (ii) any  individual  whose  initial  assumption of
office  occurred as a result of an actual or  threatened  election  contest with
respect to the election or removal of  directors  or other actual or  threatened
solicitation of proxies or consents,  by or on behalf of a person other than the
Thermo Board; or

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      (c)  the   consummation  of  a  merger,   consolidation,   reorganization,
recapitalization or statutory share exchange involving Thermo Electron or a sale
or  other  disposition  of all or  substantially  all of the  assets  of  Thermo
Electron in one or a series of transactions (a "Business Combination"),  unless,
immediately  following  such  Business  Combination,  each of the  following two
conditions is satisfied:  (i) all or  substantially  all of the  individuals and
entities who were the beneficial  owners of the Outstanding TMO Common Stock and
Outstanding TMO Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly,  more than 60% of the then-outstanding
shares of common  stock and the combined  voting  power of the  then-outstanding
securities   entitled  to  vote   generally  in  the   election  of   directors,
respectively,  of the  resulting  or  acquiring  corporation  in  such  Business
Combination (which shall include,  without limitation,  a corporation which as a
result of such transaction  owns Thermo Electron or substantially  all of Thermo
Electron's  assets either  directly or through one or more  subsidiaries)  (such
resulting  or  acquiring  corporation  is referred  to herein as the  "Acquiring
Corporation")  in  substantially   the  same  proportions  as  their  ownership,
immediately  prior to such Business  Combination,  of the Outstanding TMO Common
Stock and Outstanding TMO Voting  Securities,  respectively;  and (ii) no Person
(excluding the Acquiring  Corporation  or any employee  benefit plan (or related
trust)   maintained  or  sponsored  by  Thermo  Electron  or  by  the  Acquiring
Corporation) beneficially owns, directly or indirectly,  40% or more of the then
outstanding  shares  of common  stock of the  Acquiring  Corporation,  or of the
combined  voting power of the  then-outstanding  securities of such  corporation
entitled to vote generally in the election of directors; or

      (d)  approval  by  the  stockholders  of  Thermo  Electron  of a  complete
liquidation or dissolution of Thermo Electron.

Section 11. Amendment and Termination of the Plan. The Board of Directors of the
Company  may  amend or  terminate  the  Plan at any time and from  time to time,
provided, however, that no amendment adversely affecting credits already made to
any  participant's  deferred  compensation  account or stock unit account may be
made without the consent of that  participant or, if that  participant has died,
that participant's beneficiary.  Upon termination of the Plan, the Company shall
be obligated to  distribute  to the  participant  either of the following as the
Board of Directors of the Company,  in its sole discretion,  may determine:  (i)
the number of shares of the common  stock of the  Company  which shall equal the
total number of units accumulated in the participant's  stock unit account as of
the effective date of termination of the Plan or (ii) a sum in cash equal to the
balance credited to the participant's  deferred  compensation  account as of the
effective date of termination of the Plan.


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