SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
            ----------------------------------------------------

                                    FORM 10-K

(mark one)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 for the fiscal year ended October 2, 1999

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

                         Commission file number 1-13572

                            THERMO ECOTEK CORPORATION
             (Exact name of Registrant as specified in its charter)

Delaware                                               04-3072335
(State or other jurisdiction of
incorporation or organization)       (I.R.S. Employer Identification No.)

245 Winter Street
Waltham, Massachusetts                                         02454-9046
(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:

                   Title of each class     Name of exchange 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 29, 1999, was approximately $15,823,000.

As of October 29, 1999, the Registrant had 35,967,902 shares of Common Stock
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended October 2, 1999, are incorporated by reference into Parts I and II.


<PAGE>


                                     PART I
Item 1.  Business

(a)   General Development of Business

      Thermo Ecotek Corporation (the Company or the Registrant) is an
environmental company that operates in two segments: Energy and Biopesticides.
The Energy segment operates independent electric power-generation facilities
through joint ventures, limited partnerships, or wholly owned subsidiaries (the
Operating Companies), as well as a natural gas business (Star Natural Gas).
Until May 1999, the Energy segment also operated a subbituminous
coal-beneficiation facility (the K-Fuel Facility). The Biopesticides segment
manufactures and sells naturally derived pesticides through the Company's
majority-owned subsidiary, Thermo Trilogy Corporation.

      Initially, the Company designed, developed, and acted as general
contractor for the construction of cogeneration plants fueled by natural gas and
diesel. These turnkey facilities were generally sold to third-party operators
upon completion and had a total generating capacity of approximately 60
megawatts. In the mid-1980s, the Company began developing biomass-fueled power
plants to take advantage of a favorable regulatory environment and attractive
power-sales agreements. Biomass plants use environmentally responsible fuels,
including wood and agricultural wastes. The Company currently operates seven
biomass facilities in the U.S. with a total electric generating capacity of 140
megawatts.

      While the Company's U.S. biomass energy business is expected to continue
to generate revenues for the foreseeable future, the Company expects the
aggregate revenues and profitability associated with this business to decline
significantly beginning in fiscal 2000 due to the expiration or termination of
power-sales agreements at the biomass facilities. In anticipation of this
decline, the Company has explored other options for its biomass facilities,
including disposal or repowering. Such efforts will continue in fiscal 2000. In
addition, within the next few years, the Company expects a substantial portion
of its revenues to be derived from other business ventures such as repowering,
natural gas gathering and storage, and/or biopesticides. A major portion of the
Company's efforts will be focused on developing and acquiring new power
projects, including repowering existing power plants and natural gas gathering
and storage projects.

      In May 1999, the Company entered into an agreement to terminate the
power-sales agreement for its Delano I and Delano II facilities in California,
effective December 31, 1999. The Company recorded a charge of $51.0 million as a
result of entering this agreement. In September 1999, the Company entered into
an agreement to terminate the power-sales agreement for its Gorbell facility in
Maine. The Company recorded nonrecurring income of $13.5 million as a result of
entering this agreement.

      In January 1998, the Company, through a wholly owned subsidiary's
participation in a joint venture, indirectly acquired a majority interest in the
assets of a 12-megawatt energy center near Tabor, Czech Republic, along with the
business of five auxiliary boilers in the town of Pribram, Czech Republic.
During fiscal 1999*, the Company completed an expansion of the facility to
50-megawatt capacity.

      In September 1999, the Company, through a wholly owned subsidiary's
participation in a joint venture, acquired a 58-megawatt energy center in
Premnitz, Germany, for $4.5 million, including the assumption of debt. The
Company is exploring the possibility of expanding the capacity of the facility.

      During fiscal 1998, the Company established its Star Natural Gas
subsidiary in Dallas, Texas, to pursue opportunities in the natural gas
gathering, processing, storage, and marketing business. In May 1999, Star
acquired one gas gathering and two gas processing plants (the gas facilities)
for $8.6 million in cash and future contingent payments based on the performance
of the gas facilities.
--------------------
*  References to fiscal 1999, 1998, and 1997 herein are for the years ended
   October 2, 1999, October 3, 1998, and September 27, 1997.


                                       2
<PAGE>

      In August 1995, the Company, through two wholly owned subsidiaries,
entered into a Limited Partnership Agreement with KFx Wyoming, Inc., a
subsidiary of KFx, Inc., (the K-Fuel Partnership) to develop, construct, and
operate a subbituminous coal-beneficiation plant to be constructed near
Gillette, Wyoming. The K-Fuel Partnership was granted, in exchange for certain
future contingent royalty payments, a nonexclusive right and license to use
certain patented clean coal technology to create a low-moisture, high-energy
fuel with reduced sulfur that will help coal-burning utilities meet the SO(2)
emission restrictions contained in the Clean Air Act through fuel switching or
blending. The K-Fuel Partnership procured a 24-acre site for construction of the
plant and began construction in August 1995 under a third-party, turnkey
construction contract. In return for a 95% equity interest in the K-Fuel
Partnership, the Company provided approximately $68 million for the design,
construction, and operation of the plant. In May 1999, following significant
investments of resources in attempts to correct operational problems that arose
during construction, the Company made a decision to cease further efforts and
hold the K-Fuel Facility for sale. As a result, the Company recorded
restructuring charges totaling $68.0 million. See Note 10 to Consolidated
Financial Statements in the Registrant's 1999 Annual Report to Shareholders,
which information is incorporated herein by reference.

      Through its Thermo Trilogy subsidiary, the Company develops, manufactures,
and markets environmentally friendly products used for pest control. Derived
from naturally occurring microorganisms, biopesticides safely and effectively
control insects, diseases, and mites on numerous crops. In fiscal 1998, Thermo
Trilogy issued shares of its common stock in private placements for net proceeds
of $14.9 million.

      The Company operated as a division of Thermo Electron Corporation's Energy
Systems Division from 1979 until its incorporation as Thermo Energy Systems
Corporation in November 1989. At October 2, 1999, Thermo Electron owned
approximately 94% of the Company's outstanding common stock, giving Thermo
Electron the power to elect all Directors of the Company. Thermo Electron is a
leading provider of analytical and monitoring instruments, used in everything
from life sciences research to food and beverage production, and a recognized
leader in heart-assist devices, respiratory-care equipment, neurodiagnostics,
and mammography systems. In addition, Thermo Electron develops and operates
power plants, offers a range of environmental consulting and resource management
services, is a major producer of paper-recycling equipment, provides
water-clarification and fiber-recovery products and services, and conducts a
broad range of advanced technology R&D.

      During fiscal 1999, Thermo Electron expanded its proposed reorganization
plan involving certain of Thermo Electron's subsidiaries, including the Company.
Under this plan, the Company would be merged into Thermo Electron. As a result,
the Company would become a wholly owned subsidiary of Thermo Electron. The
public shareholders of the Company would receive common stock of Thermo Electron
in exchange for their shares. This proposal is subject to numerous conditions,
as outlined in Note 18 to Consolidated Financial Statements in the Registrant's
1999 Annual Report to Shareholders, which information is incorporated herein by
reference.

Forward-looking Statements

      Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Annual Report on Form
10-K. For this purpose, any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, the words "believes," "anticipates," "plans," "expects,"
"seeks," "estimates," and similar expressions are intended to identify
forward-looking statements. There are a number of important factors that could
cause the results of the Company to differ materially from those indicated by
such forward-looking statements, including those detailed under the heading
"Forward-looking Statements" in the Registrant's Fiscal 1999 Annual Report to
Shareholders, which statements are incorporated herein by reference.


                                       3
<PAGE>

(b)   Financial Information About Industry Segments

      Financial Information concerning the Company's industry segments is
summarized in Note 14 to Consolidated Financial Statements in the Registrant's
1999 Annual Report to Shareholders, which information is incorporated herein by
reference.

(c)   Description of Business

      (i)  Principal Products and Services

Energy

   Operating Projects

      The following table summarizes certain information relating to the
Company's projects currently in operation. With the exception of the Mendota
plant, at the end of each leased facility's applicable lease term, the Company
has the option to renew the lease for a specified period or purchase the
facility at fair market value. The Mendota plant may be purchased for a fixed
amount on December 31, 1999, the end of its lease term. The Company has notified
the lessor of its intent to purchase the facility for $4.8 million.
<TABLE>
<CAPTION>

<S>                 <C>                  <C>              <C>             <C>                  <C>
Project             Location             Plant Size        Ownership      Inservice Date       Lease/Own
                                          (net mw)        of Operating
                                                            Company
------------------- ----------------- ----------------- ----------------- -------------------- ------------

Hemphill            New Hampshire           13.6                  67%     December 1987           Lease

Gorbell             Maine                   13.6                 100%     December 1987           Own

Whitefield          New Hampshire           13.6                 100%     July 1988               Own

Mendota             California               25                  100%     May 1990                Lease

Woodland            California               25                  100%     May 1990                Lease

Delano I            California               27                  100%     January 1991            Own

Delano II           California               22                  100%     January 1994            Own

Tabor               Czech Republic           50                   87%     January 1998*           Own

Premnitz            Germany                  58                   65%     September 1999*         Own

*Represents date facility was acquired by the Company.

      Hemphill. The Hemphill facility is a 13.6-megawatt wood waste plant
located on a 50-acre site in Springfield, New Hampshire. The Operating Company
is a joint venture in which the Company has a 67% interest. The generating
equipment at the Hemphill facility is owned by BankBoston Leasing Services Inc.,
which leases the facility to the Operating Company through March 2003, with an
option to renew or purchase the facility at fair market value. Public Service of
New Hampshire (PSNH) purchases power produced by the plant at a fixed rate under
a rate order issued by the New Hampshire Public Utility Commission (NHPUC)
expiring in 2006. The Operating Company purchases wood waste pursuant to two
contracts with affiliates of the Company's joint venture partner, each of which


                                       4
<PAGE>

expires in 2003. The contracts provide for the supply of wood waste to the
Operating Company at market prices. In 1990, a plan of reorganization (the Plan)
for PSNH was approved by the U.S. Bankruptcy Court for the District of New
Hampshire. Pursuant to the Plan, Northeast Utilities (NU) acquired the assets of
PSNH. An agreement between NU and the State of New Hampshire contains language
to the effect that PSNH will seek to renegotiate some of the terms of certain
rate orders with small power producers, including the Whitefield (discussed
below) and Hemphill Operating Companies, and that the state will support PSNH in
such efforts. PSNH reached agreements in principle with these two Operating
Companies to settle the renegotiation of their rate orders. The settlement
agreements were subject to the approval of the NHPUC on terms acceptable to both
PSNH and the Operating Companies. The principal terms of the agreement generally
called for the two Operating Companies to reduce the amount of power sold
annually to PSNH to 70% of the plants' capacities, and to reduce the price per
kilowatt paid by PSNH to $0.06 per kilowatt hour, escalating three percent per
year for the remainder of the term of the original, applicable rate order. In
consideration of these reductions, the Operating Companies would receive certain
cash settlement payments, paid over several years. In May 1998, the NHPUC issued
a written ruling rejecting these settlement agreements. Certain members of the
N.H. Legislature filed a motion requesting that the NHPUC reconsider its ruling
and instead provide that the settlement agreements be left open. The NHPUC
approved this request in July 1998. No further action has occurred on the
settlement agreements. Rejection of the Company's rate orders would result in a
claim for damages by the Company and could be the subject of lengthy litigation.

      In January 1997, NU disclosed in a filing with the Securities and Exchange
Commission that if a proposed deregulation plan for the New Hampshire electric
utility industry were adopted, PSNH could default on certain financial
obligations and seek bankruptcy protection. In February 1997, the NHPUC voted to
adopt a deregulation plan, and in March 1997, PSNH filed suit to block the plan.
In March 1997, the federal district court issued a temporary restraining order
which prohibits the NHPUC from implementing the deregulation plan as it affects
PSNH, pending a determination by the court as to whether PSNH's claim could then
be heard by the court. In April 1997, the court ruled that it could hear the
case and ordered that the restraining order continue indefinitely pending the
outcome of the suit. In addition, in March 1997, the Company, along with a group
of other biomass power producers, filed a motion with the NHPUC seeking
clarification of the NHPUC's proposed deregulation plan regarding several
issues, including purchase requirements and payment of current rate order prices
with respect to the Company's energy output. In March 1998, the NHPUC addressed
the Operating Companies' motion and stated it was not the NHPUC's intent in the
February 1997 order to impair any of the Operating Companies' legal rights in
their rate orders. In August 1999, PSNH and the State reached a comprehensive
settlement agreement which was filed with the NHPUC. The NHPUC has stayed its
dockets concerning the deregulation plan pending review of this settlement
agreement. The federal district court lawsuit has also been stayed pending
settlement agreement review. If the NHPUC approves the settlement agreement as
filed, then the NHPUC deregulation plan docket, other related dockets, and the
federal district court lawsuits will be dismissed. The PSNH/State settlement
agreement purports not to make any changes in the Operating Companies' rate
orders. It does provide for PSNH to resell the power from the Operating
Companies to assist in mitigating the cost of that power. No assurances may be
made as to the outcome of this matter. An unfavorable resolution of this matter,
including the bankruptcy of PSNH, could have a material adverse effect on the
Company's results of operations and financial position.

      Gorbell. The Gorbell facility is a 13.6-megawatt wood waste plant located
on a 56-acre site in Athens, Maine. The design of the facility is substantially
similar to the Hemphill plant. The Operating Company is a joint venture in which
the Company had a 60% interest until September 1999 and 100% thereafter. In
September 1999, the Company entered into an agreement to terminate the
facility's power-sales agreement. Under the terms of the agreement, the Company
received a payment in lieu of operating under the original agreement. The
Company obtained ownership of the Gorbell facility in this transaction and is
currently operating it under a short-term power-sales agreement, expiring
December 31, 1999, although it has not determined if it will be economically
beneficial to operate the plant after that time. See Note 10 to the Registrant's
Annual Report to Shareholders, which information is incorporated herein by
reference.



                                       5
<PAGE>

      Whitefield. The Whitefield facility is a 13.6-megawatt wood waste plant
located on a 46-acre site in Whitefield, New Hampshire. The power produced by
the plant is sold to PSNH at established rates under a power-sales agreement
that expires in 2005. This plant is also subject to a dispute with PSNH (See
"Hemphill" above). Fuel is purchased at a fixed price pursuant to an agreement
expiring in 2001. The Whitefield facility was originally owned by Chrysler
Capital Corp., and leased to the Operating Company. The Company purchased the
Whitefield facility in August 1992.

      Mendota. The Mendota facility is a 25-megawatt agricultural and urban wood
waste plant located on an 80-acre site in Mendota, California. The Operating
Company is a limited partnership, 100% of which is owned by the Company. The
generating equipment is owned by Chrysler Capital Corp., which leases the
equipment to the Operating Company through December 1999, at which point the
Company intends to exercise its option to purchase the equipment for $4.8
million. In June 1995, the Operating Company amended the facility lease which
resulted in the agreement being treated as a capital lease. The power generated
by the plant is sold to Pacific Gas & Electric (PG&E) under a standard offer #4
(SO#4) contract expiring in 2014. Under the contract, PG&E was required to
purchase the plant's electricity at predetermined prices for a fixed period, and
at a price equal to PG&E's avoided cost for the remainder of the contract.
Payments for capacity are fixed throughout the life of the contract. PG&E
stopped paying for power purchased under this contract at fixed cost rates in
July 1999, although the Company believes that this change from fixed cost rates
occurred six months earlier than the power-sales agreement provided. The Company
is considering its alternatives concerning this dispute. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
incorporated by reference into Item 7 herein. Approximately 9% of the fuel for
the plant is purchased pursuant to long-term contracts terminating between
calendar 1999 and 2002, under which prices increase in accordance with
prescribed schedules or market-based indices. The remainder of the plant's fuel
is purchased by the Operating Company on the spot market.

      The power-sales agreements between the Mendota and Woodland (discussed
below) Operating Companies and PG&E allowed PG&E to curtail the quantity of
power purchased under these agreements by up to 2,000 hours of generating
capacity annually. PG&E normally exercised its curtailment rights during periods
when cheaper hydroelectric power was available, which generally occurred
following periods of heavy rain or snow. Curtailment reduces the power payment
received by the Operating Companies and, therefore, has an adverse effect on the
financial results of those Operating Companies. In November 1997, the Company
renegotiated PG&E's curtailment rights limiting PG&E to 1,000 hours per calendar
year effective January 1, 1998. The limitations on PG&E's curtailment rights
ended at the same time as the fixed-price portion of its power-sales agreements
with Mendota and Woodland. The Company experienced approximately 1,030, 1,560,
and 1,720 hours of aggregate utility-imposed curtailments at the two plants
during fiscal 1999, 1998, and 1997, respectively.

      Woodland. The Woodland facility is a 25-megawatt agricultural and urban
wood waste plant located on a 38-acre site in Woodland, California. The design
of the plant is essentially the same as the Mendota plant. The Operating Company
is a limited partnership, 100% of which is owned by the Company. The generating
equipment is owned by BankBoston Leasing Services Inc., which leases the
equipment to the Operating Company through March 2010, with an option to renew
or purchase the equipment for fair value. The electricity generated by the plant
is sold to PG&E under an SO#4 contract expiring in 2014, at predetermined prices
for a fixed period. Payments for capacity are fixed throughout the life of the
contract. PG&E stopped paying for power purchased under this contract at fixed
cost rates in August 1999, although the Company believes that this change from
fixed cost rates occurred six months earlier than the power-sales agreement
provided (See "Mendota" above). Approximately 31% of the fuel for the plant is
purchased pursuant to long-term contracts terminating in 2000, under which
prices increase in accordance with prescribed schedules or market-based indices.
The remaining fuel is purchased by the Operating Company on the spot market.

      The Operating Company has conditions in its nonrecourse lease agreement
that require the funding of a "power reserve" in years prior to 2000, based on
projections of operating cash flow shortfalls in 2000 and thereafter. The power
reserve represents funds available to make lease payments in the event that
revenues are not sufficient after the plant converts to avoided cost rates in
March 2000. This funding requirement will significantly limit future profit
distributions the Operating Company may make to the Company. Accordingly,
beginning in the first quarter of fiscal


                                       6
<PAGE>

1997, the Company has expensed the funding of reserves required under Woodland's
nonrecourse lease agreement to cover projected shortfalls in lease payments
beginning in 2000. Consequently, the results of the Woodland plant were
approximately breakeven in fiscal 1999. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" incorporated by
reference into Item 7 herein.

      Delano I. The Delano I facility is a 27-megawatt agricultural and urban
wood waste plant located on a 124-acre site in Delano, California. Southern
California Edison (SCE) purchases power under an SO#4 contract which was to have
expired in 2020. Under the contract energy prices were predetermined until
September 2000, and then paid at avoided cost for the remainder of the contract.
Approximately 6% of the fuel supply is purchased pursuant to long-term contracts
with terms expiring at various dates through 2004 under which prices increase in
accordance with prescribed schedules or market-based indices. The remaining fuel
is purchased by the Operating Company on the spot market. The Delano I
generating equipment was originally owned by Westinghouse Credit Corporation and
leased to the Company. In December 1993, the Company purchased Delano I for
$21.5 million in cash and the assumption of $66.9 million original principal
amount of nonrecourse, long-term tax-exempt bonds issued by the California
Pollution Control Finance Authority (CPCFA). As of October 2, 1999, $27.2
million principal amount was outstanding on these bonds. These bonds effectively
bear interest at a rate of 8.3%, with principal and interest payable
semi-annually until maturity in 2000. The cash portion of the purchase price was
funded by borrowings from Thermo Electron.

      Delano II. In January 1994, the Delano Operating Company commenced
operation of phase II of the Delano project, a 22-megawatt agricultural and
urban wood waste plant located on the same site as Delano I. The facility is
wholly owned by the Delano Operating Company. Power generated by the Delano II
facility is also purchased by SCE under the Delano I contract described above,
under which prices were to have been fixed until September 2000. Fuel is also
purchased pursuant to the same contracts as Delano I. The Delano II facility is
owned by the Company and is subject to $66 million principal amount of
nonrecourse, long-term tax-exempt bonds issued by CPCFA. As of October 2, 1999,
$6.5 million principal amount was outstanding on these bonds. These bonds
effectively bear interest at a rate of 6%, with principal and interest payable
semi-annually until maturity in 2000.

      In May 1999, the Company entered into an agreement to terminate the Delano
facilities' power-sales agreement effective December 31, 1999. The terms of the
agreement call for the Company to receive payments in lieu of operating under
the current agreement. As a result of entering into the new agreement, the
Company recorded a charge of $51.0 million. See Note 10 to Consolidated
Financial Statements in the Registrant's Fiscal 1999 Annual Report to
Shareholders, which information is incorporated herein by reference. The Company
is considering its options for the Delano facilities, including continuing
operations at the plant or disposal.

      Czech Republic. In January 1996, the Company, through a wholly owned
subsidiary, signed a joint development agreement with a Czech power-development
company, EMD Praha Spol s.r.o. The Company owns a 65% interest in this joint
venture. The initial focus is on expansion and environmental retrofit of
existing Czech energy centers. To support this effort, the Company has opened an
office in Prague. The development of projects through the joint venture will be
subject to a number of conditions including negotiation of definitive agreements
for power sale, fuel supply, construction, and other agreements with third
parties. In January 1998, the Company entered into a new joint venture
arrangement, superseding the original arrangement, and in connection therewith,
indirectly acquired a majority interest in two Czech energy centers near the
towns of Tabor and Pribram. At the time of acquisition, the Tabor facility
provided 12 megawatts of electrical output and 165 tons per hour of thermal
production. In fiscal 1999, the Company completed an expansion and modernization
of the energy center to provide approximately 50 megawatts of electrical output
to be sold to the local power distribution company and an adjacent industrial
customer. At the Pribram facility, the joint venture has purchased five
auxiliary boilers that provide thermal service during peak hours. In addition,
the Company is exploring other projects relating to expanding and retrofitting
existing Czech energy centers through the joint venture.


                                       7
<PAGE>

      Germany. In September 1999, the Company, through a wholly owned
subsidiary's participation in a joint venture, acquired a heating plant and
steam distribution system in Premnitz, Germany. The Company owns a 65% interest
in this joint venture. The Company is researching opportunities to modernize the
facility and expand it from its current 58-megawatt capacity.

   Projects in Development

      The State of California's Public Utility Commission (CPUC) mandated the
restructuring of California's electric utility industry beginning in March 1998.
Following that mandate, the electric power market in California became more
competitive, allowing the Company to acquire two power-generation facilities and
related sites in California for approximately $9.5 million in cash and the
assumption of certain liabilities. These natural gas-fired facilities, built in
the 1950s, had been designated "non must run" by the California Independent
System Operator, meaning they were not essential for assuring the reliable
operation of the California power grid. These acquisitions - the 126-megawatt
San Bernadino (Mountainview) facility and the 154-megawatt Highgrove (Riverside)
facility - pose an opportunity for repowering with new equipment and technology.
The Company operated these facilities from July to September 1999. The Company
has begun development efforts associated with the expansion of operating
capacity at the Mountainview facility. The Company intends to repower and expand
the facility to approximately 1,100-megawatt capacity and expects that this
project will cost approximately $570 million, which the Company expects to
finance principally through nonrecourse debt. Expected completion is in fiscal
2003. No assurance can be given that the Company will successfully complete such
projects on a timely basis or at all. In addition, to sell power from these
facilities, the Company must ensure that it will not be subject to regulation as
a holding company under PUHCA and that all necessary approvals from the Federal
Energy Regulatory Commission (FERC) and/or CPUC are obtained. In fiscal 1998,
the Company obtained Exempt Wholesale Generator status with respect to these
facilities.

      In January 1999, the Company received an exclusive opportunity to develop,
construct, and operate a gas turbine, combined-cycle, 210-megawatt
electricity-generating facility from the city of Lake Worth, Florida. The
estimated cost of this project is expected to be $105 million. The city has also
allowed the Company to provide steam to its existing 26.5-megawatt steam
turbine. The facility will be built on the site of a Florida municipal electric
utility, allowing the Company to connect to the region's natural gas and
electricity networks and use the pre-existing steam turbine infrastructure.

      The Company had been exploring opportunities in Italy but in fiscal 1999
reached an agreement with a joint venture partner to sell the Company's interest
in projects there to the partner.

      During fiscal 1999, the Company, through Star's 90% participation in a
joint venture, began development efforts for a gas storage facility in Adams
County, Colorado. This facility would have an operating capacity of
approximately nine billion cubic feet and is expected to cost approximately $35
million. The Company expects to seek nonrecourse financing to fund this project.

Biopesticides

      The Company's Thermo Trilogy subsidiary produces a broad range of
biopesticide products. Products produced by Thermo Trilogy include botanical
extracts from the seed of tropical neem trees, microbial-based pesticides
(fungal-based insecticides and fungicides, bacculovirus, beneficial nematodes,
and Bts), insect pheromone-based products such as traps and lures, and
disease-free sugarcane planting stock. As compared to conventional chemical
pesticides, most of Thermo Trilogy's products are derived from natural origins
with minimal or no toxicity, and are environmentally friendly as they have
minimal or no residue and do not harm beneficial insects. Thermo Trilogy's
products are used primarily by agricultural farmers, consumers, and pest-control
operators and are sold through various distribution channels worldwide.


                                       8
<PAGE>

      Market acceptance of the Company's biopesticide products depends in part
on educating customers on the benefits of the Company's products compared to
conventional chemical pesticides. Although response from customers to date has
been positive, there is no assurance that the Company will be able to obtain
satisfactory levels of market acceptance. Thermo Trilogy's business was
adversely affected in fiscal 1999 by a downturn in agriculture prices and a
related decrease in industry spending.

Regulatory Matters

      The Company is subject to energy and environmental laws and regulations at
the federal, state, local, and international levels in connection with the
development, ownership, and operation of its plants. Federal laws and
regulations govern power purchase and sale transactions with regulated utility
companies, the types of fuel that may be used by a plant, the ownership of a
plant, the plant's efficiency, and the type and use of combustion and
pollution-control technology at a plant. State utility regulatory commissions
must establish the rates and, in some instances, other terms and conditions
under which public utilities purchase electric power from nonutility generators.
Under certain circumstances where specific exemptions are otherwise unavailable,
state utility regulatory commissions may have broad jurisdiction over nonutility
electric power plants. Energy-producing projects also are subject to federal,
state, local, and international laws, as well as administrative regulations
governing the emissions and other substances produced by a plant, and
geographical location, zoning, and land use. Further, the Company's natural gas
business activities are subject to regulation at the federal and state level. In
addition, the Company is subject to environmental and other laws and regulations
at the federal, state, and international level regarding the manufacture, use,
and sale of its biopesticide products.

      Public Utility Regulatory Policies Act of 1978, as amended (PURPA). The
U.S. market for nonutility generators selling electricity at wholesale rates
developed after the passage of PURPA. Prior to the passage of PURPA, regulated
utilities were the primary producers of electric power. PURPA was passed in the
wake of the energy crises of the 1970s as a means to increase energy efficiency
and foster the development of alternative power-generation technologies. The
1978 enactment of PURPA and the adoption of regulations thereunder by FERC
provided incentives for the development of cogeneration and small
power-production facilities.

      A domestic electricity-generating project must be a Qualifying Facility
(QF), in order to take advantage of certain rate and regulatory incentives
provided by PURPA. To qualify as a QF, a plant must be a cogeneration facility
or small power producer (less than 80 megawatts) that burns waste or alternative
fuels, must satisfy certain engineering standards, and an electric utility, an
electric utility holding company, or its subsidiary must not own more than 50%
of the economic interest in the plant. PURPA exempts QFs from the Public Utility
Holding Company Act of 1935 (PUHCA), most provisions of the Federal Power Act
(the FPA) and, except under certain limited circumstances, state laws concerning
rates or financial regulation of electric utilities. The Company believes that
each of the domestic operating plants that the Company currently owns and/or
operates meets the requirements under PURPA necessary for QF status.

      PURPA provides two primary benefits to QFs. First, most QFs are relieved
of compliance with certain extensive federal, state, and local regulations that
control the development, financial structure, and operation of any
energy-producing plant and the prices and terms on which energy may be sold by
the plant. Second, FERC's regulations promulgated under PURPA require that
electric utilities purchase electricity generated by QFs at a price based on the
purchasing utility's full "avoided cost." This is defined as the incremental
cost to an electric utility of electric energy or capacity that the utility
would have to generate itself or purchase from another source if it did not have
power available from the QF. FERC regulations also permit QFs and utilities to
negotiate agreements for utility purchases of power at rates lower than the
utility's avoided costs. While all of the Company's existing domestic operating
projects initially had long-term power-sales agreements at rates equal to or
greater than the utilities' current avoided costs, the majority of these
contracts have recently either transitioned to avoided cost rates or have been
terminated. Further, the current practice is for most power-sales agreements to
be awarded at a rate below avoided cost, due to increasing



                                       9
<PAGE>

competition for utility contracts. Moreover, whereas in the 1980s power-sales
agreements were often entered into as a result of negotiations between a
nonutility generator and a utility, increasingly, these agreements are the
subject of competitive bidding, which tends to lower the price that a nonutility
generator may receive for power. Currently, the demand for the construction of
cogeneration plants has significantly diminished in the U.S.; therefore, the
Company does not anticipate entering into any new construction projects of this
type in the near future.

      The Company and its operating plants must continue to comply with certain
regulatory requirements in order to maintain QF status; therefore, the Company
endeavors to design its projects, monitor its compliance with applicable
regulations, and choose its customers in a manner that minimizes the risks of
losing QF status for its projects. If an Operating Company were unable to
qualify as a QF or lost its QF status, the facility could be subject to
regulation as a public utility under the FPA and state laws and the Company
could become a public utility holding company by owning or controlling 10% or
more of a facility that would no longer be exempt from PUHCA, unless the
Operating Company qualified as an EWG under the National Energy Policy Act of
1992 (see "National Energy Policy Act" below). A loss of QF status could result
in defaults under the Operating Company leases, power-sales agreements, and
other contracts, which could have a material adverse effect on the Company.

      PUHCA. Under the PUHCA, any corporation, partnership, or other legal
entity that directly or indirectly owns, or controls the power to vote, 10% or
more of the outstanding voting securities of a "public utility company," or a
company that is a "holding company" of a public utility company, is subject to
registration with the Securities and Exchange Commission and regulation under
PUHCA, unless eligible for an exemption. PURPA provides that companies that only
own QFs are not public utility holding companies under PUHCA. A holding company
of a public utility company that is subject to registration is required by PUHCA
to limit its utility operations to a single integrated utility system and to
such other businesses as are reasonably incidental or economically necessary or
appropriate to the operation of such integrated public utility system. Approval
by the Securities and Exchange Commission is required for nearly all important
financial and business dealings of a registered holding company.

      FPA. The FPA grants FERC exclusive rate-making jurisdiction over wholesale
sales of electricity in interstate commerce. FERC has jurisdiction to establish
rates, to amend, revoke, or modify previously approved rates, and has
jurisdiction over certain corporate-related transactions. These rates may be
based on a cost-of-service approach or may be determined through competitive
bidding or negotiation, or, lastly, may be based on other criteria as long as
FERC finds the rates are "just and reasonable" and in the public interest. While
QFs under PURPA are exempt from the rate-making and certain other provisions of
the FPA, projects not qualifying for QF status would be subject to the FPA and
to FERC rate-making jurisdiction which may limit their flexibility in
negotiations with power purchasers.

      National Energy Policy Act. In 1992, Congress enacted comprehensive new
energy policy legislation in its passage of the National Energy Policy Act. This
law is primarily designed to foster competition in energy production and provide
competitive access to the transmission grid. To achieve these goals, the
National Energy Policy Act amended PUHCA to create EWGs, a new class of
generating facility that is exempt from public utility regulation under PUHCA.
An EWG is an entity determined by FERC to be exclusively engaged, directly or
indirectly, in the business of owning and/or operating certain eligible
facilities and selling energy wholesale. EWGs may own generating facilities of
any size, use any fuel source, and may be owned by utilities or nonutilities.
EWGs generally may not own transmission facilities. Domestic EWGs may not make
retail sales of electric energy. The National Energy Policy Act also provides
new authority to FERC to mandate that owners of electric transmission lines
provide wheeling access to nonutility generators at just and reasonable rates.
Previously limited, wheeling rights enhance the ability of nonutility generators
to negotiate transmission access and encourage development of facilities whose
most feasible siting lies outside the purchasing utility's service area. In
1996, FERC enhanced this transmission access by issuing its Order Nos. 888 and
889. Order No. 888 required utilities to provide third parties wholesale open
access to transmission facilities on terms comparable to those that apply when
utilities use their own systems. Order No. 889 required transmission-owning
utilities to adopt procedures for an open access, same time information system
regarding their services. The Company believes that the National Energy Policy
Act could benefit the Company by expanding its ability to own and operate
facilities that do not qualify for QF status. However, this legislation may also
result in increased competition by allowing utilities and others to develop such
facilities without being subject to the constraints of PUHCA.


                                       10
<PAGE>

      State Regulation. State public utility commissions (PUCs) have broad
authority to regulate the rates, expenses, financings, and power-sale
transactions of regulated electric utilities. Since a power-sales agreement will
become a part of a utility's expenses (and therefore will be reflected in its
rates), sale agreements with nonutility generators typically fall under the
regulatory purview of PUCs. Recognizing the competitive nature of the
acquisition process, most PUCs will permit utilities to "pass through" expenses
associated with an independent power contract to the utility's retail customers.

      Nonutility generators (including EWGs) that are not QFs under PURPA are
considered to be public utilities in many states, and are subject to broad
regulation by PUCs, ranging from the requirement of certificates of public
convenience and necessity to regulation of organizational, accounting,
financial, and other corporate matters. Although FERC generally has exclusive
jurisdiction over the rates charged by such a producer to its wholesale
customers, PUCs have the ability, in practice, to influence the establishment of
such rates by asserting jurisdiction over the purchasing utility's ability to
pass through the resulting cost of the purchased power to its retail customers.
In addition, states may assert jurisdiction over the siting and construction of
facilities, and over the issuance of securities and the sale or other transfer
of assets by these facilities.

      Certain states have adopted or are considering legislation that will
remove many of the restrictions that currently limit the ability of nonutility
generators to sell electrical power directly to industrial and commercial
customers. The Company believes that the removal of these restrictions will
result in greater competition and greater opportunities to negotiate power-sale
agreements with industrial and commercial customers and may result in state PUCs
attempting to reduce, or forcing the renegotiation of, fixed rates or contracts.
Although the Company believes that the trend in the power market is toward
deregulation, to date, only a few states have passed any such legislation, and
there can be no assurance that any further similar legislation will ultimately
be passed.

      Other Regulatory Matters. Different aspects of the Company's natural gas
business activities are subject to regulation at the federal and state level.
FERC has jurisdiction over, among other things, the construction and operation
of pipeline and related facilities used in the transportation and sale of
natural gas in interstate commerce, including the construction, extension,
expansion, or abandonment of such facilities. FERC also has jurisdiction over
the rates and charges for the transportation of natural gas in interstate
commerce and the sale by a natural gas company of natural gas in interstate
commerce for resale. FERC thus would regulate any interstate transportation
business in which the Company engages. The Company does not anticipate engaging
in interstate pipeline transportation subject to FERC jurisdiction. Natural gas
marketers and brokers generally are not subject to federal or state regulation.
Natural gas storage activities that are in interstate commerce also fall within
FERC's transportation jurisdiction. FERC must grant prior approval for the
construction or abandonment of interstate storage facilities, and also regulates
the rates and charges of interstate storage services. If storage facilities are
not engaged in interstate commerce, FERC has no jurisdiction. Various states do,
however, regulate such intrastate storage activities. Furthermore, FERC
generally does not have jurisdiction over gas gathering activities, and the
Company will attempt to obtain, and maintain, FERC nonjurisdiction status for
any gas gathering activities. However, various states regulate the rates and
terms of service of gas gathering companies.

      EPA and Related-state Regulation. No pesticide may be manufactured, used,
or sold without federal and state approvals. Such approvals, called
registrations, must be obtained for each individual product formulation for use
on specific pests for specific crops. Adding new uses, pests, crops, or
formulations requires submission of additional applications or data for
approval.

      The U.S. Environmental Protection Agency (EPA) regulates pesticides under
the Federal Insecticide, Fungicide, and Rodenticide Act and implementing EPA
regulations. To obtain a pesticide registration from the EPA, the applicant must
submit extensive field test data evidencing product effectiveness, nontargeted
organism testing, environmental impact studies, residue chemistry, and toxicity
studies on plants and animals. Initial product registrations can take many years
to obtain, and an applicant may incur considerable additional delay and expense
if the EPA requests further testing and data. To promote the development and use
of biopesticides, the EPA has established special guidelines for their
registration which are set out in subdivision M of the EPA's Pesticide
Assessment Guidelines which generally require less time and expense than that
required for synthetic pesticides.



                                       11
<PAGE>

      As a part of the pesticide registration process, the applicant must submit
labeling data describing the chemical composition of the pesticide,
concentrations, manufacturer directions for application, pest and crop use, and
cautionary and warning statements to be put on all packaging of the pesticides.
All pesticide packages must contain the approved label and no changes can be
made to the label without EPA approval.

      Pesticide registrations must also be obtained from each state where the
pesticide will be sold. Some states, such as California, which represents an
important market for the Company's products, have their own extensive testing
and pesticide registration procedures and may impose additional restrictions on
the use of the pesticide in such state beyond those imposed by the EPA
regulations. Other states simply follow the EPA registration and labeling
guidelines.

      Foreign countries may also require extensive testing and data submission
before pesticides can be manufactured or sold in such foreign country. The
relevant regulations vary from country to country and may be stricter and more
difficult and costly to comply with than EPA's regulations. A number of the
Company's products are registered for sale in foreign countries.

      The Company's activities may also be subject to regulation under other
state, federal, and foreign government laws and regulations governing employee
and public health and safety, environmental pollution, clean water, disposal of
hazardous wastes, manufacture of chemicals, product liability, food and
agriculture applications, and public disclosure of the use of chemicals.

      (ii) New Products

      Not applicable.

      (iii)Raw Materials

Energy

      Fuel and operating supplies purchased by the Company's independent power
projects are either available from a number of different suppliers or from
alternative sources that could be developed without a material adverse effect on
the Company. To date, the Company has experienced no difficulties in obtaining
these materials.

Biopesticides

      Thermo Trilogy relies on overseas producers of the raw materials for its
neem-based products and on third parties to manufacture some of its products. In
particular, Thermo Trilogy's sole supplier of neem products is P.J. Margo Pvt.
Ltd., a joint venture in India in which Thermo Trilogy holds a 50% interest,
pursuant to an exclusive supply contract that expires in 2001. To date, Thermo
Trilogy has experienced no difficulties in obtaining these raw materials;
however, there is no assurance that Thermo Trilogy will have an uninterrupted
supply of raw materials or that third-party manufacturers will produce the
products at competitive prices.

      (iv) Patents, Licenses, and Trademarks

Biopesticides

      The Company has numerous U.S. patents and corresponding foreign patents in
various areas related to process development, fermentation, formulation, or
applications of current commercial products. Additionally, various patent
applications are pending in the U.S. and foreign countries. The Company also
relies on trade secrets and proprietary know-how which it seeks to protect
through confidentiality agreements with employees, collaborators, and
consultants.


                                       12
<PAGE>

      The Company's patent portfolio includes several patents related to Bt
technology. The Company has obtained licenses or sublicenses for a number of
patent families in areas related to Bt strain construction and formulation
development. The Company also relies on trade secret protection for its
extensive know-how in quality control.

      The Company also has additional patents that have been granted for neem
oil and azadirachtin technologies. The Company also has patent positions
covering nematode and fungi technologies.

      The Company has an exclusive license for the fungus PFR-97. Additionally,
the Company has a sublicense agreement for a unique strain of a bacculovirus
from Novartis.

      (v)  Seasonal Influences

Energy

      The Energy segment earns a disproportionately high share of its income in
May through October due to rate structures under the power-sale agreements
relating to its California plants, which provide strong incentives to operate
during this period of high demand. Conversely, the Energy segment historically
has operated at a marginal profit during its second fiscal quarter due to the
rate structure under these agreements.

Biopesticides

      The Biopesticide segment currently markets its products predominantly for
use in the northern hemisphere, where the growing season generally runs from
March to October. Therefore, the seasonal nature of agriculture will cause the
Biopesticide segment's product sales to be concentrated during such period and
will result in substantial variations in quarter-to-quarter results.

      (vi) Working Capital Requirements

      There are no special inventory requirements or credit terms extended to
customers that would have a material adverse effect on the Company's working
capital.

      (vii)Dependency on a Single Customer

Energy

      The Company derived 10% or more of its revenues during the past three
years from its three most significant electric utility customers: PSNH, SCE, and
PG&E. Revenues from these three customers as a percentage of total revenues were
approximately 16%, 30%, and 26%, respectively, in fiscal 1999.

      (viii)Backlog

Biopesticides

      The Company maintains minimal backlog. Most orders for its biopesticide
products are shipped out of inventory within a short period of time.

      (ix) Government Contracts

      Not applicable.



                                       13
<PAGE>

      (x)  Competition

Energy

      The worldwide independent power market now consists of numerous companies,
ranging from small startups to multinational industrial companies. In addition,
a number of regulated utilities have created subsidiaries that compete as
nonutility generators. Nonutility generators often specialize in market
"niches," such as a specific technology or fuel (i.e., gas-fired cogeneration,
refuse-to-energy, hydropower, geothermal, wind, solar, wood, or coal) or a
specific region of the country where they believe they have a market advantage.
However, many nonutility generators seek to develop projects powered by the best
fuel available. Many companies in this market have substantially greater
financial, technical, and operational resources than the Company. The Company
competes primarily on the basis of project experience, technical expertise,
capital resources, and power pricing.

Biopesticides

      The Company currently has virtually no competition in the neem- and
azadirachtin-based product market in the U.S. In the microbial pesticides market
(Bts, viruses, fungi) the Company has a number of competitors, including major
chemical companies. The pheromone market is fragmented and is comprised of
dozens of small operating companies. The Company has a significant share of the
nematode market. The Company's products compete primarily based on performance,
quality, and price.

      (xi) Research and Development

      Research and development expenses for the Company were $2,671,000,
$2,398,000, and $1,638,000 in fiscal 1999, 1998, and 1997, respectively.

      (xii)Environmental Protection Regulation

      The construction and operation of power projects are subject to extensive
federal, state, and local laws and regulations adopted for the protection of
health, safety, and the environment, and to regulate land use. The laws and
regulations applicable to the Company primarily involve discharges and emissions
into the water and air, and the use of water, but can also include wetlands
preservation, endangered species, waste disposal, and noise regulation. These
laws and regulations in many cases require a lengthy and complex process of
obtaining licenses, permits, and approvals from federal, state, and local
agencies. If such laws and regulations are changed and the Company's facilities
are not grandfathered, extensive modifications to project technologies and
facilities could be required.

      The Company does not believe that it will be required to make material
capital expenditures to comply with existing environmental regulations.

      (xiii)Number of Employees

      As of October 2, 1999, the Company employed, directly and through its
Operating Companies and subsidiary, a total of 533 employees. None of the
employees of the Company or the Operating Companies is represented by a labor
union, and the Company considers its relations with its employees to be good.

(d)   Financial Information about Exports by Domestic Operations and about
      Foreign Operations

      Not applicable.


</TABLE>


                                       14
<PAGE>

(e)   Executive Officers of the Registrant
<TABLE>
<CAPTION>

<S>     <C>                 <C>   <C>
        Name                Age   Present Title (Fiscal Year First Became Executive Officer)
        ------------------ ------ -----------------------------------------------------

        Brian D. Holt       50    Chief Executive Officer and President (1994)
        Theo Melas-Kyriazi  40    Chief Financial Officer (1999)
        Parimal S. Patel    56    Executive Vice President (1989)
        Floyd M. Gent       50    Vice President; President, Clean Fuels Division (1994)
        John T. Miller      53    Vice President; President, Clean Power Division (1998)
        Randall W. Miselis  46    Vice President, Accounting and Administration (1996)
        Paul F. Kelleher    57    Chief Accounting Officer (1989)
</TABLE>

      All of the Company's executive officers are elected annually by the Board
of Directors and serve until their successors are elected and qualified. All
executive officers, except Messrs. Melas-Kyriazi, Miller, and Miselis have held
comparable positions for at least five years either with the Company or Thermo
Electron. Mr. Melas-Kyriazi was appointed Chief Financial Officer of the Company
and Thermo Electron on January 1, 1999. Mr. Melas-Kyriazi joined Thermo Electron
in 1986 as Assistant Treasurer, and became Treasurer in 1988. In 1994, he was
named President and Chief Executive Officer of ThermoSpectra Corporation, a
public subsidiary of Thermo Instrument Systems Inc. In 1998, he became Vice
President of Corporate Strategy for Thermo Electron. Mr. Miller has been a Vice
President of the Company since March 1998. Prior to joining the Company, he
served as President and Chief Executive Officer of Pacific Generation Company
from 1994 to 1998, overseeing its expansion into international generation
projects. From 1990 to 1994, he served as Vice President of Business Development
of Pacific Generation Company, and from 1987 to 1990, he served as its Vice
President of Operations. Mr. Miselis has been Vice President of Accounting and
Administration since January 1996 and has worked for the Company in various
accounting capacities since November 1988. Messrs. Melas-Kyriazi and Kelleher
are full-time employees of Thermo Electron, but devote such time to the affairs
of the Company as the Company's needs reasonably require.

Item 2.  Properties

Energy

      The Company's corporate headquarters are located in Waltham,
Massachusetts, and consist of approximately 15,000 square feet that are occupied
pursuant to a lease expiring in 2003. The Company also leases office space in
Prague, Czech Republic; Roseville, California; Houston, Texas; and Dallas,
Texas. The Company's other properties consist of the power plants described
under "Operating Projects" and "Projects in Development." The Company owns all
of the land on which the plants are built. The K-Fuel Facility is located on
approximately 80 acres of land inside the rail loop in Fort Union Mine, in
Campbell County, Wyoming, approximately five miles northeast of Gillette,
Wyoming. The K-Fuel Facility is comprised of three buildings totaling
approximately 7,100 square feet.

      The Company's California plants are located in areas where there is a risk
of potentially significant earthquake activity. Projects that the Company
develops in the future may also be located in areas where there is earthquake
risk. The Company's earthquake insurance is not sufficient to cover all
potential losses and there can be no assurance that such insurance will continue
to be available on reasonable terms.

Biopesticides

      Thermo Trilogy's corporate headquarters are located in Columbia, Maryland,
where it leases 25,000 square feet of space for office, laboratory, and
warehouse use. Thermo Trilogy also leases a 26,000 square foot building, in
which it has built a fermentation/formulation facility, in Decatur, Illinois.
Thermo Trilogy owns an 80,000 square foot fermentation/formulation facility in
Wasco, California. Thermo Trilogy's wholly owned subsidiary in the U.K. leases a
20,000 square foot pheromone trap and lure manufacturing facility.



                                       15
<PAGE>

Item 3.  Legal Proceedings

      Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

      Not applicable.


                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Shareholder Matters

      Information concerning the market and market price for the Registrant's
Common Stock, $.10 par value, and dividend policy is included under the sections
labeled "Common Stock Market Information" and "Dividend Policy" in the
Registrant's Fiscal 1999 Annual Report to Shareholders and is incorporated
herein by reference.

Item 6.  Selected Financial Data

      The information required under this item is included under the sections
labeled "Selected Financial Information" and "Dividend Policy" in the
Registrant's Fiscal 1999 Annual Report to Shareholders and is incorporated
herein by reference.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

      The information required under this item is included under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Registrant's Fiscal 1999 Annual Report to Shareholders and is
incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

      The information required under this item is included under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Registrant's Fiscal 1999 Annual Report to Shareholders and is
incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data

      The Registrant's Consolidated Financial Statements and Supplementary Data
are included in the Registrant's Fiscal 1999 Annual Report to Shareholders and
are incorporated herein by reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosures

      Not applicable.


                                       16
<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Registrant

Directors

      Set forth below are the names of the directors; their ages; their offices
in the Company, 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 Company's Common Stock; the common stock of
Thermo Electron, a provider of products and services in measurement
instrumentation, biomedical devices, energy, resource recovery, and emerging
technologies; and the common stock of its majority-owned subsidiary, Thermo
Trilogy, is reported in Item 12 - Security Ownership of Certain Beneficial
Owners and Management.
<TABLE>
<CAPTION>
<S>                     <C>

-----------------------------------------------------------------------------------------------------------
Jerry P. Davis          Mr. Davis, 66, has been a director of the Company since its inception in 1989.
                        He also served as the chairman of the board of the Company from February 1994 to
                        January 1997, and as the Company's president and chief executive officer from
                        1989 to February 1994.  Mr. Davis was also a vice president of Thermo Electron
                        from January 1986 to December 1996.
-----------------------------------------------------------------------------------------------------------
George                  N. Hatsopoulos Dr. Hatsopoulos, 72, has been a director
                        of the Company since its inception in 1989. He was the
                        chairman of the board and chief executive officer of
                        Thermo Electron from 1956 to June 1, 1999. He also
                        served as the president of Thermo Electron from 1956 to
                        January 1997. He currently serves as non-executive
                        chairman of the board of Thermo Electron. Dr.
                        Hatsopoulos is also a director of Photoelectron
                        Corporation, Thermedics Inc., Thermo Electron, Thermo
                        Fibertek Inc., Thermo Instrument Systems Inc., and
                        ThermoTrex Corporation.
-----------------------------------------------------------------------------------------------------------
Brian D. Holt           Mr. Holt, 50, has been a director of the Company since January 1995 and president
                        and chief executive officer of the Company since February 1994.  He has been the
                        chief operating officer, energy and environment, of Thermo Electron since
                        September 1998.  From March 1996 to September 1998, he was a vice president of
                        Thermo Electron.  For more than five years prior to his appointment as an officer
                        of the Company, he was president and chief executive officer of Pacific
                        Generation Company, a financier, builder, owner, and operator of independent
                        power facilities.  Mr. Holt is also a director of Thermo TerraTech Inc., The
                        Randers Killam Group Inc., and ThermoRetec Corporation.
-----------------------------------------------------------------------------------------------------------
Frank Jungers           Mr. Jungers, 73, has been a director of the Company since its inception in 1989
                        and its chairman of the board since January 1997.  He has been a self-employed
                        consultant on business and energy matters since 1977.  He was employed by the
                        Arabian American Oil Company from 1974 to 1977 as chairman and chief executive
                        officer.  Mr. Jungers is also a director of The AES Corporation, Donaldson,
                        Lufkin & Jenrette, Thermo Electron, ThermoQuest Corporation, ONIX Systems Inc.,
                        and Statia Terminals Corp.
-----------------------------------------------------------------------------------------------------------
William H. Keough       Mr. Keough, 62, has been a director of the Company since November 1999.  He was
                        the senior vice president, chief financial officer, and treasurer of the Pioneer
                        Group, Inc. from 1986 to November 1998.  The Pioneer Group Inc. operates various
                        financial services businesses, including global asset management, mutual fund
                        distribution and servicing, venture capital investing, and the natural resources
                        industry.
-----------------------------------------------------------------------------------------------------------
William A. Rainville    Mr. Rainville, 57, has been a director of the Company since November 1995.  He
                        has been president and chief executive officer of Thermo Fibertek, a
                        majority-owned subsidiary of Thermo Electron that develops and manufactures
                        equipment and products for the papermaking and paper-recycling industries, since
                        its inception in 1991.  He has been chief operating officer, recycling and
                        resource recovery systems, of Thermo Electron since September 1998.  Prior to
                        that time, Mr. Rainville had been a senior vice president of Thermo Electron from
                        March 1993 to September 1998 and a vice president of Thermo Electron from 1986 to
                        1993.  From 1984 to January 1993,  Mr. Rainville was the president and chief
                        executive officer of Thermo Electron Web Systems Inc., a subsidiary of Thermo
                        Fibertek.  Mr. Rainville is also a director of Thermo Fibergen Inc., Thermo
                        Fibertek, Thermo TerraTech, and ThermoRetec.
-----------------------------------------------------------------------------------------------------------

</TABLE>


                                       17
<PAGE>

Executive Officers

      Reference is made to Item 1(e) of this report for information regarding
the Executive Officers of the Company.

Item 11. Executive Compensation

Compensation of Directors

   Cash Compensation

      Outside directors receive an annual retainer of $4,000 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 directors' fees is made quarterly. Dr.
Hatsopoulos, Mr. Holt, and Mr. Rainville are all employees of Thermo Electron or
its subsidiaries and do not receive any cash compensation from the Company for
their services as directors. Directors are also reimbursed for out-of-pocket
expenses incurred in attending such meetings.

      In November 1999, the board of directors established a special committee
(the Special Committee) for the purpose of evaluating the merits and negotiating
the terms of the proposed transaction with Thermo Electron pursuant to which the
Company would be taken private. Mr. Keough was appointed the sole member of the
Special Committee.

      Mr. Keough, as a member of the Special Committee, receives a one-time
retainer of $20,000, a fee of $1,000 per day for attending regular meetings of
the Special Committee, and $500 per day for participating in meetings of the
Special Committee held by means of conference telephone.

   Deferred Compensation Plan for Directors

      Under the Company's 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 Company that is not approved by the board of directors, deferred amounts
become payable immediately. Any of the following is deemed to be a change of
control: (i) the acquisition by any person of 40% or more of the outstanding
common stock or voting securities of Thermo Electron; (ii) the failure of the
Thermo Electron board of directors to include a majority of directors who are
"continuing directors", which term is defined to include directors who were
members of Thermo Electron's board on July 1, 1999, or who subsequent to that
date were nominated or elected by a majority of directors who were "continuing
directors" at the time of such nomination or election; (iii) the consummation of
a merger, consolidation, reorganization, recapitalization, or statutory share
exchange involving Thermo Electron or the sale or other disposition of all or
substantially all of the assets of Thermo Electron unless immediately after such
transaction all holders of Thermo Electron common stock immediately prior to
such transaction own more than 60% of the outstanding voting securities of the
resulting or acquiring corporation in substantially the same proportions as
their ownership immediately prior to such transaction and no person after the
transaction owns 40% or more of the outstanding voting securities of the
resulting or acquiring corporation; or (iv) approval by stockholders of a
complete liquidation or dissolution of Thermo Electron. Amounts deferred
pursuant to the Deferred Compensation Plan are valued at the end of each quarter
as units of the Company's Common Stock. When payable, amounts deferred may be
disbursed solely in shares of Common Stock accumulated under the Deferred
Compensation Plan. A total of 37,500 shares of Common Stock have been reserved
for issuance under the Deferred Compensation Plan. As of October 2, 1999,
deferred units equal to approximately 5,847 full shares of Common Stock were
accumulated for current directors under the Deferred Compensation Plan.



                                       18
<PAGE>

   Directors Stock Option Plan

      The Company's directors stock option plan (the Directors Plan) provides
for the grant of stock options to purchase shares of Common Stock of the Company
and its majority-owned subsidiaries to outside directors as additional
compensation for their service as directors. Under the Directors Plan, outside
directors are automatically granted options to purchase 1,000 shares of Common
Stock annually. The annual grant is made at the close of business on the date of
each Annual Meeting of the Stockholders of the Company to each outside director
then holding office. Options evidencing annual grants are immediately
exercisable at any time from and after the grant date of the option and prior to
the earliest to occur of (i) the expiration of the option on the third
anniversary of the grant date; (ii) two years after the director ceases to serve
as a director of the Company; or (iii) the date of dissolution or liquidation of
the Company. Shares acquired upon exercise of the options are subject to
repurchase by the Company at the exercise price if the recipient ceases to serve
as a director of the Company or another Thermo Electron company prior to the
first anniversary of the grant date.

      The exercise price for options granted under the Directors Plan is the
average of the closing prices of the Common Stock as reported on the American
Stock Exchange (or other principal market 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 per share
paid by third parties in an arms-length transaction prior to the option grant.
As of October 2, 1999, options to purchase 90,200 shares of Common Stock had
been granted and were outstanding under the Directors Plan, 3,000 options had
lapsed, 73,000 options had been exercised, and options to purchase 137,800
shares of Common Stock were reserved and available for grant.

   Compensation of the Chairman of the Board

      Mr. Jungers was appointed the chairman of the board of the Company in
January 1997. Mr. Jungers is not an employee of the Company or of any other
company affiliated with Thermo Electron. For his service as chairman of the
board, Mr. Jungers receives an additional meeting fee equal to $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. He also receives an additional option to purchase 1,000 shares of the
Common Stock at an exercise price equal to the average closing price for the
five days preceding and including the date of grant, which is awarded at the
first regular meeting of the board of directors following the Annual Meeting of
the Stockholders in conjunction with his reappointment as chairman of the board.

Stock Ownership Policies for Directors

      The human resources committee of the board of directors (the Committee)
has established a stock holding policy for directors. The stock holding policy
requires each director to hold a minimum of 1,000 shares of Common Stock.
Directors are requested to achieve this ownership level within a three-year
period. The chief executive officer of the Company is required to comply with a
separate stock holding policy established by the Committee, which is described
below.

      In addition, the Committee has adopted a policy requiring directors to
hold shares of the Company's 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 below.



                                       19
<PAGE>

Summary Compensation Table

      The following table summarizes compensation during the last three fiscal
years for services to the Company in all capacities, except as otherwise
indicated below, awarded to, earned by, or paid to the Company's chief executive
officer and its four other most highly compensated executive officers who were
employed by the Company as of the end of the fiscal year. These executive
officers are together referred to as the "named executive officers."

      The Company is required to appoint certain executive officers and
full-time employees of Thermo Electron as executive officers of the Company, 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 Company's affairs is
provided to the Company under the Corporate Services Agreement between the
Company and Thermo Electron. See Item 13 Certain Relationships and Related
Transactions. Accordingly, the compensation for these individuals is not
reported in the following table.
<TABLE>
<CAPTION>
<S>                       <C>         <C>    <C>                <C>        <C>               <C>

                           Summary Compensation Table
-----------------------------------------------------------------------------------------------------------
                                      Annual Compensation       Long-term Compensation       All
                          Fiscal                                                             Other
Name and Principal         Year                                 Restricted Securities        Compensation
Position                                                                                     (4)
                                                                Stock
                                      Salary Bonus (1)          Award (2)  Underlying
                                                                           Options (3)
-----------------------------------------------------------------------------------------------------------

Brian D. Holt (5)          1999       $159,115           n/a    $58,800 (TCK)   --           $  7,200
 Chief Executive Officer   1998       $198,000      $108,000                    --           $  6,429
  and President            1997       $182,250      $189,000                  60,000(TCK)    $  6,107
                                                                              40,000(TRIL)
-----------------------------------------------------------------------------------------------------------
Parimal S. Patel           1999       $173,400     $  78,000    $21,470 (TMO) 8,000 (TCK)    $  7,200
  Executive Vice
   President                                                                  2,500 (TMO)
                           1998       $170,000     $  68,400                  2,700 (TCK)    $  6,850
                                                                              5,300 (TMO)
                           1997       $167,000     $  51,500                  15,800(TCK)    $  6,993
                                                                              2,400 (TMO)
                                                                              2,500 (TRIL)
-----------------------------------------------------------------------------------------------------------
John T. Miller (6)         1999       $165,000     $  65,000    $14,313 (TMO) 10,000(TCK)     $34,401 (7)
  Vice President;
   President, Clean Power
   Division                1998      $  76,154     $  65,000                  38,000(TCK)     $19,500 (7)
                                                                              16,300(TMO)
                                                                              5,000 (TRIL)
-----------------------------------------------------------------------------------------------------------
Floyd M. Gent              1999       $150,000     $  56,300    $  8,588 (TMO)2,700 (TCK)    $  7,550
  Vice President;
   President, Clean Fuels
   Division                1998       $138,700     $  55,800                    600 (TCK)    $  5,847
                                                                              3,000 (TMO)
                           1997       $133,000     $  10,500                    100 (TMO)    $  7,359
                                                                              2,500 (TRIL)
-----------------------------------------------------------------------------------------------------------

Randall W. Miselis         1999       $110,700     $  33,200    $  4,294 (TMO)  400 (TCK)    $  6,710
 Vice President,           1998       $100,600     $  38,400                    400 (TCK)    $  7,200
  Accounting &
  Administration           1997      $  93,000     $  29,100                    100 (TCK)    $  5,643
                                                                              2,500 (TRIL)

(1) Beginning with fiscal 1997, the Company changed its compensation practices
    to determine bonuses for the named executive officers, other than the chief
    executive officer, based on fiscal year performance rather than calendar
    year performance. Accordingly, for all named executive officers other than
    Mr. Holt, the bonuses for fiscal 1997 represent the prorated bonus paid for
    performance during the nine-month period from January 1, 1997, through
    September 27, 1997. Due to Mr. Holt's position as chief operating officer,
    environmental and energy, of Thermo Electron, his bonus will continue to be
    determined and paid based on performance for the calendar year. Mr. Holt's
    bonus for 1999 has not been determined as of the date hereof.



                                       20
<PAGE>

(2) In fiscal 1999, Mr. Holt was awarded 5,600 shares of restricted stock of the
    Company with a value of $58,800 on the grant date, and Messrs. Patel,
    Miller, Gent, and Miselis were granted 1,500, 1,000, 600, and 300 shares,
    respectively, of restricted stock of Thermo Electron with a value of
    $21,470, $14,313, $8,588, and $4,294, respectively, on the grant date. Mr.
    Holt's restricted stock awards vest in their entirety on January 27, 2002.
    The restricted stock awarded to Messrs. Patel, Miller, Gent, and Miselis
    vest in their entirety on September 22, 2002. Holders of restricted stock
    are eligible for dividend payments. At the end of fiscal 1999, Mr. Holt held
    5,600 shares of restricted stock with an aggregate value of $51,800 and
    Messrs. Patel, Miller, Gent, and Miselis held 1,500, 1,000, 600, and 300
    shares, respectively, of restricted stock with an aggregate value of
    $20,344, $13,563, $8,138, and $4,069, respectively.
(3) Options granted by the Company are designated in the table as "TCK." In
    addition, the named executive officers have also been granted options to
    purchase common stock of the Thermo Electron and its majority-owned
    subsidiaries from time to time as part of Thermo Electron's stock option
    program. Options have been granted during the last three fiscal years in the
    following Thermo Electron companies: Thermo Electron (designated in the
    table as TMO) and Thermo Trilogy Corporation (designated in the table as
    TRIL). Mr. Holt was appointed an officer of Thermo Electron in March 1996
    and has been granted options to purchase common stock of Thermo Electron
    since that date. These options are not reported in the table as they were
    granted as compensation for service in a capacity other than in his capacity
    as the chief executive officer of the Company.
(4) Except as indicated in footnote (7) below, 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) Mr. Holt was appointed chief executive officer of the Company in February
    1994, vice president of Thermo Electron in March 1996, and chief operating
    officer, energy and environmental, of Thermo Electron in September 1998. Mr.
    Holt has also been responsible for certain operations of Thermo Electron
    since the commencement of his employment in February 1994, and a portion of
    his annual cash compensation (salary and bonus) has been allocated to and
    paid by Thermo Electron in each of the fiscal years reported for the time he
    devoted to these responsibilities. The annual cash compensation (salary and
    bonus) reported in the table for Mr. Holt represents the amount paid by the
    Company for Mr. Holt's services as its chief executive officer. For calendar
    1999, 1998, and 1997, approximately 60%, 90%, and 90%, respectively, of Mr.
    Holt's salary earned in all capacities throughout the Thermo Electron
    organization was paid by the Company for his services as its chief executive
    officer. For calendar 1999, 1998, and 1997, approximately 60%, 90%, and 82%,
    respectively, of Mr. Holt's total bonus earned in all capacities throughout
    the Thermo Electron organization was or will be paid by the Company for his
    performance as the Company's chief executive officer. Mr. Holt's bonus is
    determined and paid based upon performance for the calendar year.
(6) Mr. Miller was appointed vice president; president, clean power division of
    the Company, effective as of March 23, 1998.
(7) In addition to the matching contributions set forth in footnote (4) above,
    this amount includes $4,500 of temporary living expenses and $15,000 of
    travel and relocation expenses for fiscal 1998 and $13,500 of temporary
    living expenses and $20,901 of relocation expenses for fiscal 1999.


                                       21
<PAGE>

Stock Options Granted During Fiscal 1999

      The following table sets forth information concerning individual grants of
stock options made during fiscal 1999 to the Company's named executive officers.
It has not been the Company's policy in the past to grant stock appreciation
rights, and no such rights were granted during fiscal 1999.
</TABLE>
<TABLE>
<CAPTION>
<S>                                 <C>            <C>            <C>        <C>      <C>         <C>

                          Option Grants in Fiscal 1999
----------------------------------------------------------------------------------------------------------
                                                                                      Potential Realizable
                                    Number of      Percent of                         Value at Assumed
                                    Securities                                        Annual Rates of
                                    Underlying     Total Options  Exercise            Stock Price
                                    Options        Granted to     Price per Expiration Price Appreciation
Name                                Granted and    Employees in             Date       for Option Term (2)
                                    Company (1)    Fiscal Year    Share                 5%         10%
----------------------------------------------------------------------------------------------------------

Brian D. Holt                          --                --             --       --        --        --
----------------------------------------------------------------------------------------------------------
Parimal S. Patel                    3,000 (TCK)        3.6%         $10.54  12/03/01  $ 4,980     $10,466
                                    5,000 (TCK)        6.0%         $10.54  12/03/03  $14,560     $32,174
                                    2,500 (TMO)       0.05% (3)     $14.81  09/22/04  $10,230     $22,604
----------------------------------------------------------------------------------------------------------
John T. Miller                     10,000 (TCK)       12.0%         $10.54  12/03/03  $29,120     $64,348
----------------------------------------------------------------------------------------------------------
Floyd M. Gent                         700 (TCK)        0.8%         $10.54  12/03/01  $ 1,160     $ 2,442
                                    2,000 (TCK)        2.4%         $10.54  12/03/03  $ 5,820     $12,870
----------------------------------------------------------------------------------------------------------
Randall W. Miselis                    400 (TCK)        0.5%         $10.54  12/03/01  $   660     $ 1,395
----------------------------------------------------------------------------------------------------------

(1) As part of Thermo Electron's stock option program, options have been granted
    during fiscal 1999 to the named executive officers to purchase the common
    stock of the Company and Thermo Electron. All of the options granted during
    the fiscal year are immediately exercisable at the date of grant. In all
    cases, the shares acquired upon exercise are subject to repurchase by the
    granting company at the exercise price if the optionee ceases to be employed
    by such company or any other Thermo Electron company. The granting company
    may exercise its repurchase rights within six months after the termination
    of the optionee's employment. The repurchase rights generally lapse ratably
    over a three- to seven-year period, depending on the option term, which may
    vary from three to seven years, provided the optionee continues to be
    employed by the granting company or any other Thermo Electron company. The
    granting company may permit the holder of 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. Please see
    footnote (3) under Summary Compensation Table above for the company
    abbreviations used in this table.
(2) The amounts shown on 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 applicable 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 or its subsidiaries other than the Company as part of Thermo
    Electron's compensation program and accordingly are reported as a percentage
    of total options granted to employees of Thermo Electron and its
    subsidiaries.


                                       22
<PAGE>

Stock Options Exercised During Fiscal 1999 and Fiscal Year-End Option Values

      The following table reports certain information regarding stock option
exercises during fiscal 1999 and outstanding stock options held at the end of
fiscal 1999 by the Company's named executive officers. No stock appreciation
rights were exercised or were outstanding during fiscal 1999.

            Aggregated Option Exercises In Fiscal 1999 And Fiscal 1999 Year-End Option Values
----------------------------------------------------------------------------------------------------------
                                                                          Number of          Value of
                                                                         Unexercised       Unexercised
                                             Shares                   Options at Fiscal    In-the-Money
                                           Acquired on                     Year-End         Options at
                                            Exercise        Value       (Exercisable/    Fiscal Year-End
Name                         Company (1)                Realized (2)  Unexercisable) (1)  (Exercisable/
                                                                                          Unexercisable)
----------------------------------------------------------------------------------------------------------

Brian D. Holt (3)                TCK           --            --         210,000  /0       $513,000  /--
                                 TMO           --            --         138,750  /0 (4)  $          /--
                                                                                                 0
                                 TBA           --            --           2,000  /0      $  15,750 /--
                                 TFG           --            --           2,000  /0      $         /--
                                                                                             2,500
                                 TLZ           --            --           5,000  /0      $         /--
                                                                                                 0
                                 TLT           --            --               0  /2,000         -- /$0
                                                                                                   (5)
                                 TOC           --            --           6,000  /0      $         /--
                                                                                                 0
                                 TMQ           --            --           6,000  /0      $         /--
                                                                                                 0
                                 TSR           --            --           2,000  /0      $         /--
                                                                                                 0
                                TRIL           --            --               0  /40,000        -- /$0
                                                                                                   (5)
                                 TXM           --            --           4,000  /0      $         /--
                                                                                                 0
----------------------------------------------------------------------------------------------------------
Parimal S. Patel                 TCK           --            --          49,000  /0      $  84,375 /--
                                 TMO           --            --          29,362  /0 (4)  $   1,248 /--
                                 TFT          2,700        $12,320           --  /--            -- /--
                                TRIL           --            --               0  /2,500         -- /$0
                                                                                                   (5)
----------------------------------------------------------------------------------------------------------
John T. Miller                   TCK           --            --          48,000  /0                /--
                                                                                         $
                                                                                                 0
                                 TMO           --            --          16,300  /0      $         /--
                                                                                                 0
                                TRIL           --            --               0  /5,000         -- /$0
                                                                                                   (5)
----------------------------------------------------------------------------------------------------------
Floyd M. Gent                    TCK           --            --          55,800  /0       $170,625 /--
                                 TMO           --            --          33,100  /0      $       0 /--
                                TRIL           --            --               0  /2,500         -- /$0
                                                                                                   (5)
----------------------------------------------------------------------------------------------------------
Randall W. Miselis               TCK           --            --          45,900  /0      $  52,500 /--
                                 TMO           --            --          15,100  /0      $       0 /--
                                TRIL           --            --               0  /2,500         -- /$0
                                                                                                   (5)
----------------------------------------------------------------------------------------------------------

(1) 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
    the common stock of ThermoLyte Corporation and Thermo Trilogy 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 Exchange Act or (ii) nine years from 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 company at the exercise
    price if the optionee ceases to be employed by such company or any other
    Thermo Electron company. The granting company may exercise its repurchase
    rights within six months after the termination of the optionee's employment.
    For publicly-traded companies, the repurchase rights generally lapse ratably
    over a one- to ten-year period, depending on the option term, which may vary
    from five to twelve years, provided that the optionee continues to be
    employed by the granting company or another Thermo Electron company. For
    companies that are



                                       23
<PAGE>

    not publicly-traded, the repurchase rights lapse in their entirety on the
    ninth anniversary of the grant date. The granting company may permit the
    holder of 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. Please see footnote (3) under
    Summary Compensation Table above for the company abbreviations used in this
    table. In addition, company abbreviations used in this table and not defined
    in footnote (3) are defined as follows: Thermo BioAnalysis Corporation
    (designated in the table as TBA), Thermo Fibertek Inc. (designated in the
    table as TFT), Thermo Fibergen Inc. (designated in the table as TFG),
    ThermoLase Corporation (designated in the table as TLZ), ThermoLyte
    (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), and Trex Medical
    Corporation (designated in the table as TXM).
(2) 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 named 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.
(3) As an officer of Thermo Electron, Mr. Holt also holds unexercised options to
    purchase common stock of Thermo Electron and its subsidiaries other than the
    Company. These options are not reported in the table as they were granted as
    compensation for service to other Thermo Electron companies in capacities
    other than his capacity as the chief executive officer of the Company.
(4) Options to purchase 67,500 and 15,000 shares of the common stock of Thermo
    Electron granted to Mr. Holt and Mr. Patel, respectively, are subject to the
    same terms described in footnote (1), 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
(5) No public market existed for the shares underlying these options as of
    October 2, 1999. Accordingly, no value in excess of exercise price has been
    attributed to these options.

Executive Retention Agreements

      Thermo Electron has entered into agreements with certain executive
officers and key employees of Thermo Electron and its subsidiaries that provide
severance benefits if there is a change in control of Thermo Electron and their
employment is terminated by Thermo Electron "without cause" or by the individual
for "good reason," as those terms are defined therein, within 18 months
thereafter. For purposes of these agreements, a change in control exists upon
(i) the acquisition by any person of 40% or more of the outstanding common stock
or voting securities of Thermo Electron; (ii) the failure of the Thermo Electron
board of directors to include a majority of directors who are "continuing
directors," which term is defined to include directors who were members of
Thermo Electron's board on the date of the agreement or who subsequent to the
date of the agreement were nominated or elected by a majority of directors who
were "continuing directors" at the time of such nomination or election; (iii)
the consummation of a merger, consolidation, reorganization, recapitalization,
or statutory share exchange involving Thermo Electron or the sale or other
disposition of all or substantially all of the assets of Thermo Electron unless
immediately after such transaction (a) all holders of Thermo Electron common
stock immediately prior to such transaction own more than 60% of the outstanding
voting securities of the resulting or acquiring corporation in substantially the
same proportions as their ownership immediately prior to such transaction and
(b) no person after the transaction owns 40% or more of the outstanding voting
securities of the resulting or acquiring corporation; or (iv) approval by
stockholders of a complete liquidation or dissolution of Thermo Electron.



                                       24
<PAGE>

      In 1998, Thermo Electron authorized an executive retention agreement with
each of Brian D. Holt, Floyd M. Gent, and John T. Miller. This agreement
provides that in the event the individual's employment is terminated under the
circumstances described above, the individual would be entitled to a lump sum
payment equal to the sum of (a) in the case of Mr. Holt, two times, and in the
case of Messrs. Gent and Miller, one times his highest annual base salary in any
12 month period during the prior five-year period, plus (b) in the case of Mr.
Holt, two times and in the case of Messrs. Gent and Miller, one times his
highest annual bonus in any 12-month period during the prior five-year period.
In addition, the individual would be provided benefits for a period of, in the
case of Mr. Holt, two years, and in the case of Messrs. Gent and Miller, one
year after such termination substantially equivalent to the benefits package the
individual would have been otherwise entitled to receive if he was not
terminated. Further, all repurchase rights of Thermo Electron and its
subsidiaries shall lapse in their entirety with respect to all options and
restricted stock that the individual holds in Thermo Electron and its
subsidiaries, including the Company, as of the date of the change in control.
Finally, the individual would be entitled to a cash payment equal to, in the
case of Mr. Holt, $20,000, and in the case of Messrs. Gent and Miller, $15,000,
to be used toward outplacement services.

      Assuming that the severance benefits would have been payable as of October
2, 1999, the lump sum salary and bonus payment under such agreement to Messrs.
Holt, Gent and Miller would have been approximately $1,040,000, $234,500, and
$230,000, respectively. In the event that payments under these agreements are
deemed to be so called "excess parachute payments" under the applicable
provisions of the Internal Revenue Code of 1986, as amended (the Internal
Revenue Code), the individuals would be entitled to receive a gross-up payment
equal to the amount of any excise tax payable by such individual with respect to
such payment, plus the amount of all other additional taxes imposed on such
individual attributable to the receipt of such gross-up payment.

Stock Ownership Policies

      The Committee established a stock holding policy for executive officers of
the Company that required executive officers to own a multiple of their
compensation in shares of Common Stock. For the chief executive officer, the
multiple is one times his base salary and reference incentive compensation for
the fiscal year. For all other officers, the multiple was one times the
officer's base salary. The Committee deemed it appropriate to permit officers to
achieve these ownership levels over a three-year period. The policy has been
amended to apply only to the chief executive officer.

      In order to assist executive officers in complying with the policy, the
Committee also adopted a stock holding assistance plan under which the Company
is authorized to make interest-free loans to executive officers to enable them
to purchase shares of Common Stock in the open market. This plan was also
amended to apply only to the chief executive officer. The loans are required to
be repaid upon the earlier of demand or the tenth anniversary of the date of the
loan, unless otherwise determined by the Committee.

      The Committee also has a policy requiring its executive officers 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.

Item 12.       Security Ownership of Certain Beneficial Owners and Management

      The following table sets forth the beneficial ownership of Common Stock,
as well as the common stock of Thermo Electron and each majority-owned
subsidiary of the Company, as of October 2, 1999, with respect to (i) each
director, (ii) each executive officer named in the summary compensation table
set forth in Item 11 - Executive Compensation (the named executive officers) and
(iii) all directors and current executive officers as a group. In addition, the
following table sets forth the beneficial ownership of Common Stock, as of
October 2, 1999, with respect to each person who was known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock.



                                       25
<PAGE>

      While certain directors or executive officers of the Company are also
directors and executive officers of Thermo Electron or its subsidiaries other
than the Company, all such persons disclaim beneficial ownership of the shares
of Common Stock beneficially owned by Thermo Electron.
</TABLE>
<TABLE>
<CAPTION>
<S>                                                <C>                 <C>                  <C>

Name (1)                                            Thermo Ecotek      Thermo Electron      Thermo Trilogy
                                                   Corporation (2)     Corporation (3)      Corporation (4)
-------------------------------------------------------------------------------------------------------------

Thermo Electron Corporation (5)                     33,865,203                  N/A                N/A
Jerry P. Davis                                         101,426               32,670                  0
Floyd M. Gent                                           60,380               33,100                  0
George N. Hatsopoulos                                   25,579            3,889,697                  0
Brian D. Holt                                          215,600              287,941                  0
Frank Jungers                                           49,706              176,302              3,000
William H. Keough                                            0                    0                  0
John T. Miller                                          48,000               16,500                  0
Randall W. Miselis                                      47,706               15,855                  0
Parimal S. Patel                                        88,868               58,874                  0
William A. Rainville                                     4,467              360,752                  0
All directors and current executive officers           649,232            5,386,885              3,000
 as a group (12 persons)
</TABLE>

(1) Except as reflected in the footnotes to this table, shares of Common Stock
    of the Company and of the common stock of Thermo Electron and Thermo Trilogy
    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 Mr. Davis, Mr. Gent, Dr.
    Hatsopoulos, Mr. Holt, Mr. Jungers, Mr. Miller, Mr. Miselis, Mr. Patel, and
    all directors and executive officers as a group include 10,000, 55,800,
    15,000, 210,000, 6,000, 48,000, 45,900, 49,000, and 447,200 shares,
    respectively, that such person or group has the right to acquire within 60
    days of October 2, 1999, through the exercise of stock options. Shares of
    the Common Stock beneficially owned by Mr. Jungers and all directors and
    executive officers as a group include 3,156 shares allocated through October
    2, 1999, to his account maintained pursuant to the Company's Deferred
    Compensation Plan for Directors. Shares beneficially owned by Mr. Davis
    include 91,426 shares held by Mr. Davis' spouse. Shares beneficially owned
    by Mr. Jungers include 500 shares held by Mr. Jungers' spouse. No director
    or named executive officer beneficially owned more than 1% of the Common
    Stock as of October 2, 1999; all directors and current executive officers as
    a group beneficially owned 1.80% of the Common Stock outstanding as of such
    date.
(3) Shares of the common stock of Thermo Electron beneficially owned by Mr.
    Davis, Mr. Gent, Dr. Hatsopoulos, Mr. Holt, Mr. Jungers, Mr. Miller, Mr.
    Miselis, Mr. Patel, Mr. Rainville, and all directors and executive officers
    as a group include 5,377, 33,100, 2,206,486, 284,948, 9,693, 16,300, 15,100,
    29,362, 294,630, and 3,338,081 shares, respectively, that such person or
    group has the right to acquire within 60 days of October 2, 1999, through
    the exercise of stock options. Shares of the common stock of Thermo Electron
    beneficially owned by Mr. Davis, Dr. Hatsopoulos, and all directors and
    executive officers as a group include 1,716, 2,266 and 6,479 full shares,
    respectively, allocated to 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 October 2, 1999, executive officers of
    Thermo Electron. Shares of the common stock of Thermo Electron beneficially
    owned by Mr. Jungers and all directors and executive officers as a group
    include 80,427 full shares allocated through October 2, 1999, to Mr.
    Junger's account maintained pursuant to Thermo Electron's deferred
    compensation plan for Directors. Shares beneficially owned by Mr. Davis
    include 25,577 shares held by Mr. Davis' spouse. Shares beneficially owned
    by Dr. Hatsopoulos include 144,437 shares held by his spouse, 330,747 shares
    held by a family trust of which his spouse is the trustee and 566,262 shares
    held by a family limited partnership indirectly controlled by Dr.
    Hatsopoulos. Shares beneficially owned by Dr. Hatsopoulos also include
    50,000 shares that a family trust, of



                                       26
<PAGE>

    which Dr. Hatsopoulos' spouse is the trustee, has the right to acquire
    within 60 days of October 2, 1999, and 2,149,500 shares that a family
    limited partnership indirectly controlled by Dr. Hatsopoulos has the right
    to acquire within 60 days of October 2, 1999, through the exercise of stock
    options. Dr. Hatsopoulos disclaims beneficial interest in the shares owned
    by the family limited partnership except to the extent of his pecuniary
    interest therein. Shares beneficially owned by Mr. Jungers include 4,500
    shares held by Mr. Jungers' spouse. No director or named executive officer
    beneficially owned more than 1% of the common stock of Thermo Electron as of
    October 2, 1999, except for Dr. Hatsopoulos, who beneficially owned 2.42% of
    such common stock; all directors and current executive officers as a group
    beneficially owned 3.37% of the common stock of Thermo Electron outstanding
    as of such date.
(4) The beneficial ownership of shares of the common stock of Thermo Trilogy is
    presented as of October 2, 1999. As of October 2, 1999, no director or
    executive officer beneficially owned more than 1% of the outstanding common
    stock of Thermo Trilogy; all directors and current executive officers as a
    group beneficially owned less than 1% of Thermo Trilogy common stock
    outstanding as of such date.
(5) Thermo Electron beneficially owned 93.68% of the Common Stock as of October
    2, 1999. Shares beneficially owned by Thermo Electron include 171,272 shares
    issuable upon conversion of $2,826,000 in principal amount of the Company's
    4 7/8% Subordinated Convertible Debentures due 2004. Thermo Electron's
    address is 81 Wyman Street, Waltham, Massachusetts 02454-9046. As of October
    2, 1999, Thermo Electron had the power to elect all of the members of the
    Company's board of directors.

Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
Exchange Act) requires the Company'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 Company's securities. Based
upon a review of such filings, all Section 16(a) filing requirements applicable
to such persons were complied with during fiscal 1999, except in the following
instances: Mr. Jungers, a director of the Company, filed one transaction late,
reporting the exempt grant of stock options. Thermo Electron filed one Form 4
late, reporting a total of six transactions associated with the cancellation and
grant of options to purchase Common Stock granted to employees under its stock
option program.

Item 13. Certain Relationships and Related Transactions

      Thermo Electron has, from time to time, caused its subsidiaries to sell
minority interests to investors, resulting in several majority-owned, private
and publicly-held subsidiaries. Thermo Electron has created the Company as a
majority-owned, publicly-held subsidiary. The Company and such other
majority-owned Thermo Electron subsidiaries are hereinafter referred to 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 Company, 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 stockholders 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


                                       27
<PAGE>


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 the Thermo Subsidiaries.

      The Charter currently 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 Company, can 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.

      As provided in the Charter, the Company and Thermo Electron 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, employee benefit
administration, tax advice and preparation of tax returns, centralized cash
management, and financial and other services to the Company. The Company was
assessed an annual fee equal to 0.8% of the Company's revenues for these
services in fiscal 1999. The annual fee will remain at 0.8% of the Company's
revenues for fiscal 2000. The fee is reviewed annually and may be changed by
mutual agreement of the Company and Thermo Electron. During fiscal 1999, Thermo
Electron assessed the Company $1.6 million in fees under the Services Agreement.
Management believes that the charges under the Services Agreement are reasonable
and that the terms of the Services Agreement are fair to the Company. In fiscal
1999, the Company was billed an additional $18,100 by Thermo Electron for
certain administrative services required by the Company that were not covered by
the Services Agreement. The Services Agreement automatically renews for
successive one-year terms, unless canceled by the Company upon 30 days' prior
notice. In addition, the Services Agreement terminates automatically in the
event the Company 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 Company will be required to pay a termination fee equal to the
fee that was paid by the Company 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 Company or as required in order to meet the Company's obligations under
Thermo Electron's policies and procedures. Thermo Electron will charge the
Company a fee equal to the market rate for comparable services if such services
are provided to the Company following termination.

      The Company and Thermo Electron have a Tax Allocation Agreement (Tax
Allocation Agreement) under which the Company is included in the consolidated
federal and certain state income tax returns filed by Thermo Electron. The Tax
Allocation Agreement provides that Thermo Electron charges or pays the Company
amounts based on the Company's relative contribution to Thermo Electron's tax
liability. If in any year the Company incurs a loss or generates a tax credit,
Thermo Electron shall pay the Company the amount of such benefit realized by
Thermo Electron attributable to such loss or tax credit on the earlier of (i)
the year in which the Company would have obtained a tax benefit from such loss
or tax credit of the Company had filed separate federal income tax returns or
(ii) the year


                                       28
<PAGE>

in which the applicable carry-forward period with respect to such loss or tax
credit expires. As of October 2, 1999, the aggregate net amount due to the
Company from Thermo Electron pursuant to the Tax Allocation Agreement is
approximately $5.6 million.

      At October 2, 1999, the Company owed Thermo Electron and its other
subsidiaries an aggregate of approximately $0.7 million for amounts due under
the Services Agreement and related administrative charges and for miscellaneous
items, net of amounts owed to the Company for miscellaneous items. The largest
amount of net indebtedness owed by the Company to Thermo Electron and its other
subsidiaries since October 3, 1998, was approximately $2.8 million. These
amounts do not bear interest and are expected to be paid in the normal course of
business.

      As of October 2, 1999, $17.8 million of the Company's cash equivalents
were invested in a cash management arrangement with Thermo Electron, which was
effective June 1999. Under the cash management arrangement, the Company lends
its excess cash to Thermo Electron and has the contractual right to withdraw its
invested funds upon 30 days' prior notice. Thermo Electron is contractually
required to maintain cash, cash equivalents and/or immediately available bank
lines of credit equal to at least 50% of all the funds invested under the
arrangement by all Thermo Electron subsidiaries other than wholly-owned
subsidiaries. The Company's funds invested in the cash management arrangement
earn a rate equal to the 30-day Dealer Commercial Paper Rate as reported in The
Wall Street Journal plus 50 basis points, set at the beginning of each month.

      Thermo Electron has announced a proposed reorganization involving certain
of Thermo Electron's subsidiaries, including the Company. Under this plan, the
Company would be merged into Thermo Electron. As a result, the Company would
become a wholly owned subsidiary of Thermo Electron. The public shareholders of
the Company would receive common stock in Thermo Electron in exchange for their
shares. The completion of this transaction is subject to numerous conditions,
including the establishment of a price and exchange ratio; confirmation of
anticipated tax consequences; the negotiation and execution of a definitive
merger agreement; the receipt of a fairness opinion from an investment banking
firm that the transaction is fair to the Company's shareholders (other than
Thermo Electron) from a financial point of view; the approval of the Company's
Board of Directors, including its independent directors; and completion of
review by the Securities and Exchange Commission of any necessary documents
regarding the proposed transactions.

Stock Holding Assistance Plan

      The Committee established a stock holding policy that requires the chief
executive officer to acquire and hold a minimum number of shares of Common
Stock. In order to assist the chief executive officer in complying with the
policy, the Committee also adopted a stock holding assistance plan under which
the Company may make interest-free loans to the chief executive officer, to
enable him to purchase the Common Stock in the open market. No such loans are
currently outstanding under the plan.




                                       29
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a, d)  Financial Statements and Schedule

      (1)The consolidated financial statements set forth in the list below
         are filed as part of this Report.

      (2)The consolidated financial statement schedule set forth in the list
         below is filed as part of this Report.

      (3)Exhibits filed herewith or incorporated herein by reference are set
         forth in Item 14(c) below.

        List of Financial Statements and Schedule Referenced in this Item 14

        Information incorporated by reference from Exhibit 13 filed herewith:

               Consolidated Statement of Operations
               Consolidated Balance Sheet
               Consolidated Statement of Cash Flows
               Consolidated Statement of Comprehensive Income and Shareholders'
                Investment
               Notes to Consolidated Financial Statements
               Report of Independent Public Accountants

        Financial Statement Schedules filed herewith:

               Schedule I:  Condensed Financial Information of the Registrant

               Schedule II: Valuation and Qualifying Accounts

        All other schedules are omitted because they are not applicable or not
        required, or because the required information is shown either in the
        financial statements or in the notes thereto.

(b)     Reports on Form 8-K

        None.

(c)     Exhibits

        See Exhibit Index on the page immediately preceding exhibits.



                                       30
<PAGE>

                                   SIGNATURES
      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed by
the undersigned, thereunto duly authorized.

Date:  December 15, 1999              THERMO ECOTEK CORPORATION

                                      By: /s/ Brian D. Holt
                                      Brian D. Holt
                                      President and Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated, as of December 15, 1999.

Signature                             Title

By:  /s/ Brian D. Holt                President, Chief Executive Officer, and
     Brian D. Holt                    Director


By:  /s/ Theo Melas-Kyriazi           Chief Financial Officer
     Theo Melas-Kyriazi

By:  /s/ Paul F. Kelleher             Chief Accounting Officer
     Paul F. Kelleher

By:  /s/ Frank Jungers                Chairman of the Board and Director
     Frank Jungers

By:  /s/ Jerry P. Davis               Director
     Jerry P. Davis

By:  /s/ Dr. George N. Hatsopoulos    Director
     Dr. George N. Hatsopoulos

By:  /s/ William H. Keough            Director
     William H. Keough

By:  /s/ William A. Rainville         Director
     William A. Rainville


                                       31
<PAGE>

                    Report of Independent Public Accountants

To the Shareholders and Board of Directors of Thermo Ecotek Corporation:

      We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements included in Thermo Ecotek Corporation's
Annual Report to Shareholders incorporated by reference in this Form 10-K, and
have issued our report thereon dated November 8, 1999. Our audits were made for
the purpose of forming an opinion on those statements taken as a whole. The
schedule listed in Item 14 on page 30 is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures applied
in the audits of the basic consolidated financial statements and, in our
opinion, fairly states in all material respects the consolidated financial data
required to be set forth therein in relation to the basic consolidated financial
statements taken as a whole.



                                      Arthur Andersen LLP



Boston, Massachusetts
November 8, 1999


                                       32
<PAGE>

SCHEDULE I

                            THERMO ECOTEK CORPORATION
                  Condensed Financial Information of Registrant
                          Unconsolidated Balance Sheet
<TABLE>
<CAPTION>
<S>                                                                              <C>           <C>

(In thousands)                                                                   October 2,    October 3,
                                                                                       1999          1998
------------------------------------------------------------------------------ ------------- -------------

Assets
Current Assets:
 Cash and cash equivalents                                                         $      -      $  22,732
 Advance to affiliate                                                                17,766              -
 Accounts and notes receivable from subsidiaries                                        613          1,910
 Prepaid income taxes and prepaid expenses                                           41,288         11,548
 Current portion of note receivable and other current assets                          2,732            330
                                                                                   --------      ---------

                                                                                     62,399         36,520
                                                                                   --------      ---------

Investment in Subsidiaries (on the equity method)                                   228,129        319,279
                                                                                   --------      ---------

Office Equipment, at Cost                                                               448            322
Less:  Accumulated Depreciation                                                        (149)           (96)
                                                                                   --------      ---------

                                                                                        299            226
                                                                                   --------      ---------

Long-term Available-for-sale Investment, at Quoted Market Value                       6,111          8,502
 (amortized cost of $6,379 and $8,504)
                                                                                   --------      ---------

Deferred Debt Expense                                                                   891          1,090
                                                                                   --------      ---------

                                                                                   $297,829      $ 365,617
                                                                                   ========      =========


                                       33
<PAGE>
SCHEDULE I

                            THERMO ECOTEK CORPORATION
                  Condensed Financial Information of Registrant

                    Unconsolidated Balance Sheet (continued)

(In thousands)                                                                   October 2,    October 3,
                                                                                       1999          1998
------------------------------------------------------------------------------ ------------- -------------

Liabilities and Shareholders' Investment
Current Liabilities:
 Accounts payable                                                                  $    276      $       -
 Accrued expenses                                                                     3,761          9,366
 Due to parent company                                                                  507          2,251
                                                                                   --------      ---------

                                                                                      4,544         11,617
                                                                                   --------      ---------

Long-term Obligations:
 Noninterest-bearing subordinated convertible debentures                              1,820          2,450
 4.875% Subordinated convertible debentures                                          44,950         44,950
                                                                                   --------      ---------

                                                                                     46,770         47,400
                                                                                   --------      ---------

Deferred Income Taxes                                                                55,951         56,968
                                                                                   --------      ---------


Shareholders' Investment:
 Common stock                                                                         3,787          3,782
 Capital in excess of par value                                                     175,895        175,673
 Retained earnings                                                                   39,382         98,802
 Treasury stock                                                                     (28,084)       (28,735)
 Deferred compensation                                                                  (46)             -
 Accumulated other comprehensive items                                                 (370)           110
                                                                                   --------      ---------

                                                                                    190,564        249,632
                                                                                   --------      ---------

                                                                                   $297,829      $ 365,617
                                                                                   ========      =========


</TABLE>

                                       34
<PAGE>
SCHEDULE I

                            THERMO ECOTEK CORPORATION

                  Condensed Financial Information of Registrant
                     Statement of Unconsolidated Operations
<TABLE>
<CAPTION>
<S>                                                             <C>             <C>         <C>

                                                                                Year Ended
                                                                 -----------------------------------------
(In thousands)                                                  October 2,      October 3,  September 27,
                                                                      1999            1998           1997
----------------------------------------------------------- --------------- --------------- --------------

Revenues                                                          $      -        $  1,962        $  8,200
Equity in Earnings (Loss) of Subsidiaries                          (83,019)         50,401          39,817
                                                                  --------        --------        --------

                                                                   (83,019)         52,363          48,017
                                                                  --------        --------        --------

General and Administrative Expenses                                 10,196          10,379          10,219
                                                                  --------        --------        --------

Operating Income (Loss)                                            (93,215)         41,984          37,798
Interest Expense, Net                                               (1,021)         (1,342)           (838)
Gain on Issuance of Stock by Subsidiary                                  -           6,269               -
                                                                  --------        --------        --------

Income (Loss) Before Income Taxes                                  (94,236)         46,911          36,960
Income Tax (Provision) Benefit                                      34,816         (15,702)        (14,415)
                                                                  --------        --------        --------

Net Income (Loss)                                                 $(59,420)       $ 31,209        $ 22,545
                                                                  ========        ========        ========



                                       35
<PAGE>
SCHEDULE I

                            THERMO ECOTEK CORPORATION

                  Condensed Financial Information of Registrant
                     Statement of Unconsolidated Cash Flows

                                                                                Year Ended
                                                                 -----------------------------------------
(In thousands)                                                  October 2,      October 3,  September 27,
                                                                      1999            1998           1997
----------------------------------------------------------- --------------- --------------- --------------

Operating Activities:
 Net income (loss)                                                $(59,420)       $ 31,209        $ 22,545
 Adjustments to reconcile net income (loss) to
   net cash used in operating activities:
     Depreciation and amortization                                     265             258             513
     Deferred revenue                                                    -               -          (8,200)
     Deferred income tax expense (benefit)                         (30,183)          7,315          10,715
     Equity in (earnings) loss of subsidiaries                      83,019         (50,401)        (39,817)
     Gain on issuance of stock by subsidiary                             -          (6,269)              -
     Changes in current accounts, excluding the
       effect of acquisitions:
        Accounts and notes receivable from                           1,204           2,139            (906)
         subsidiaries
        Other assets                                                  (768)             94              55
        Accounts payable                                               637            (551)             48
        Accrued expenses                                            (5,576)            101              99
        Due (to) from parent company                                (1,744)            (98)          3,471
                                                                  --------        --------        --------

          Net cash used in operating activities                    (12,566)        (16,203)        (11,477)
                                                                  --------        --------        --------

Investing Activities:
 Acquisitions, net of cash acquired                                (12,615)        (19,100)        (10,865)
 Purchase of available-for-sale investments                              -               -          (2,500)
 Advances to affiliate, net                                        (17,766)              -               -
 Purchases of property, plant, and equipment                          (126)           (219)            (15)
 Distribution from (investment in) subsidiaries                     20,115         (16,361)         13,315
                                                                  --------        --------        --------

          Net cash used in investing activities                    (10,392)        (35,680)            (65)
                                                                  --------        --------        --------

Financing Activities:
 Net proceeds from issuance of subordinated                              -               -          48,470
   convertible debentures
 Purchases of Company common stock                                       -         (10,248)        (19,743)
 Net proceeds from issuance of Company and                             189          15,458            (417)
   subsidiary common stock
                                                                  --------        --------        --------

          Net cash provided by financing activities                    189           5,210          28,310
                                                                  --------        --------        --------

Exchange Rate Effect on Cash                                            37             (60)            (31)
                                                                  --------        --------        --------

Increase (Decrease) in Cash and Cash Equivalents                   (22,732)        (46,733)         16,737
Cash and Cash Equivalents at Beginning of Year                      22,732          69,465          52,728
                                                                  --------        --------        --------

Cash and Cash Equivalents at End of Year                          $      -        $ 22,732        $ 69,465
                                                                  ========        ========        ========
</TABLE>


                                       36
<PAGE>

SCHEDULE II

                            THERMO ECOTEK CORPORATION
                        Valuation and Qualifying Accounts
                                 (In thousands)

<TABLE>
<CAPTION>
<S>                                                  <C>           <C>             <C>            <C>

Description                                          Balance at     Provision      Accounts       Balance
                                                      Beginning    Charged to       Written        at End
                                                        of Year       Expense           Off       of Year
----------------------------------- ------------- -------------- ------------- ------------- -------------

Allowance for Doubtful Accounts

Year Ended October 2, 1999                             $     50       $    87       $   (20)      $    117

Year Ended October 3, 1998                             $      -       $    50       $     -       $     50


Description                                          Balance at     Provision       Activity       Balance
                                                      Beginning     Costs           Charged to      at End
                                                        of Year    Charged to       Reserve        of Year
                                                                  Expense (b)
------------------------------------------------- -------------- ------------- ------------- -------------

Accrued Restructuring Costs (a)

Year Ended October 2, 1999                             $      -       $ 7,914       $  (157)      $  7,757

(a) The nature of activity in this account is described in Note 10 to
    Consolidated Financial Statements in the Registrant's Fiscal 1999 Annual
    Report to Shareholders.
(b) Excludes noncash charges of $118.4 million, primarily for the write-off of
    property, plant, and equipment.
                                       37
<PAGE>

                                  EXHIBIT INDEX
Exhibit
Number         Description of Exhibit

 2.1           Asset Purchase Agreement among Thermo Trilogy Corporation, Thermo
               Ecotek International Holdings, Inc., and W.R. Grace & Co. - Conn.
               dated March 5, 1996 (filed as Exhibit 2 to the Registrant's
               Quarterly Report on Form 10-Q for the quarter ended March 30,
               1996 [File No. 1-13572] and incorporated herein by reference).

 2.2           Asset Purchase Agreement among Thermo Trilogy Corporation, biosys,
               inc., Crop Genetics International Corporation, and AgriDyne
               Technologies, Inc. dated December 24, 1996 (filed as Exhibit 2 to
               the Registrant's Current Report on Form 8-K filed January 31,
               1997 [File No.1-3572] and incorporated herein by reference).

 3.1           Certificate of Incorporation, as amended, of the Registrant
               (filed as Exhibit 3.1 to the Registrant's Registration Statement
               on Form S-1 [Reg. No. 33-86682] and incorporated herein by
               reference).

 3.2           By-Laws of the Registrant (filed as Exhibit 3.2 to the
               Registrant's Transition Report on Form 10-K for the nine months
               ended September 30, 1995 [File No. 1-13572] and incorporated
               herein by reference).

 4.1           Fiscal Agency Agreement dated as of March 14, 1996, among the
               Registrant, Thermo Electron Corporation, and Chemical Bank as
               fiscal agent, relating to $37 million principal amount of
               noninterest-bearing subordinated convertible debentures due 2001
               (filed as Exhibit 4 to the Registrant's Quarterly Report on Form
               10-Q for the quarter ended March 30, 1996 [File No. 1-13572] and
               incorporated herein by reference).

 4.2           Fiscal Agency Agreement dated as of April 15, 1997, among the
               Registrant, Thermo Electron Corporation, and Bankers Trust
               Company as fiscal agent, relating to $50 million principal amount
               of 4 7/8% Convertible Subordinated Debentures due 2004 (filed as
               Exhibit 4 to the Registrant's Quarterly Report on Form 10-Q for
               the quarter ended March 29, 1997 [File No. 1-13572] and
               incorporated herein by reference).

10.1           Asset Transfer Agreement between Thermo Electron Corporation and
               the Registrant dated January 2, 1990 (filed as Exhibit 10.1 to
               the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.2           Corporate Services Agreement dated January 3, 1993, between Thermo Electron Corporation
               and the Registrant (filed as Exhibit 10.2 to the Registrant's Registration Statement on
               Form S-1 [Reg. No. 33-86682] and incorporated herein by reference).

10.3           Thermo Electron Corporate Charter as amended and restated effective January 3, 1993
               (filed as Exhibit 10.3 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.4           Amended and Restated Tax Allocation Agreement dated as of December 4, 1996, between
               Thermo Electron and the Registrant (filed as Exhibit 10.4 to the Registrant's Report on
               Form 10-K for the fiscal year ended September 28, 1996 [File No. 1-13572] and
               incorporated herein by reference).

10.5           Purchase and sale of $38,500,000 principal amount 4% subordinated convertible note due
               2001 (filed as Exhibit 10.8 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).


                                       38
<PAGE>

Exhibit
Number         Description of Exhibit

10.6           Purchase and sale of $30,000,000 principal amount 4% subordinated convertible note due
               2001 (filed as Exhibit 10.9 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.7           Power Purchase Agreement between Mendota Biomass Power, Ltd. and
               Pacific Gas and Electric Company dated May 7, 1984 (filed as
               Exhibit 10.10 to the Registrant's Registration Statement on Form
               S-1 [Reg. No. 33-86682] and incorporated herein by reference).

10.8           Project Lease between Chrysler Capital Corporation and Mendota
               Biomass Power, Ltd. dated October 30, 1989 (filed as Exhibit
               10.11 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.9           First Amendment to Project Lease between Chrysler Capital
               Corporation and Mendota Biomass Power, Ltd., dated June 30, 1995
               (filed as Exhibit 1 to the Registrant's Current Report on Form
               8-K dated June 30, 1995 and incorporated herein by reference).

10.10          Mendota Biomass Power, Ltd. Limited Partnership Agreement dated December 10, 1986 (filed
               as Exhibit 10.12 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.11          Rate Order and Interconnection Agreement between Whitefield Power
               and Light Company and Public Service Company of New Hampshire
               dated September 4, 1986 (filed as Exhibit 10.13 to the
               Registrant's Registration Statement on Form S-1 [Reg. No.
               33-86682] and incorporated herein by reference).

10.12          Wood Supply Contract between North County Procurement, Inc. and
               Whitefield Power and Light Company dated June 4, 1993 (filed as
               Exhibit 10.14 to the Registrant's Registration Statement on Form
               S-1 [Reg. No. 33-86682] and incorporated herein by reference).

10.13          Joint Venture Agreement establishing Gorbell Thermo Electron Power Company dated
               September 13, 1985 (filed as Exhibit 10.19 to the Registrant's Registration Statement on
               Form S-1 [Reg. No. 33-86682] and incorporated herein by reference).

10.14          Leasing Agreement between BankBoston Leasing Services, Inc. and
               Hemphill Power and Light Company dated December 23, 1987 (filed
               as Exhibit 10.20 to the Registrant's Registration Statement on
               Form S-1 [Reg. No. 33-86682] and incorporated herein by
               reference).

10.15          Rate Order Support Agreement between Hemphill Power and Light Company and Thermo Electron
               dated December 23, 1987 (filed as Exhibit 10.21 to the Registrant's Registration
               Statement on Form S-1 [Reg. No. 33-86682] and incorporated herein by reference).

10.16          Wood Supply Contract between Durgin & Crowell Lumber Company,
               Inc. and Hemphill Power and Light Company dated June 4, 1985
               (filed as Exhibit 10.22 to the Registrant's Registration
               Statement on Form S-1 [Reg. No. 33-86682] and incorporated herein
               by reference).

10.17          Fuel Supply Contract between Springfield Management Company and Hemphill Power and Light
               Company dated June 4, 1985, as amended (filed as Exhibit 10.23 to the Registrant's
               Registration Statement on Form S-1 [Reg. No. 33-86682] and incorporated herein by
               reference).


                                       39
<PAGE>

Exhibit
Number         Description of Exhibit

10.18          Rate Order and Interconnection Agreement between Hemphill Power
               and Light Company and Public Service Company of New Hampshire
               dated June 26, 1986 (filed as Exhibit 10.24 to the Registrant's
               Registration Statement on Form S-1 [Reg. No. 33-86682] and
               incorporated herein by reference).

10.19          Joint Venture Agreement establishing Hemphill Power and Light Company dated June 4, 1985
               (filed as Exhibit 10.25 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.20          Letter Agreement dated July 15, 1988, among the partners of
               Hemphill Power and Light Company amending various agreements
               (filed as Exhibit 10.26 to the Registrant's Registration
               Statement on Form S-1 [Reg. No. 33-86682] and incorporated herein
               by reference).

10.21          Letter Agreement dated January 1, 1990, between the partners of Hemphill Power and Light
               Company (filed as Exhibit 10.27 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.22          Assignment and Assumption Agreement of Delano II plant by Delano
               Energy Company, Inc. dated December 1, 1993 (filed as Exhibit
               10.28 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.23          Loan Agreement between California Pollution Control Financing
               Authority ("CPCFA") and Delano Energy Company, Inc. dated August
               1, 1989, as supplemented on May 1, 1990 (Delano I; filed as
               Exhibit 10.29 to the Registrant's Registration Statement on Form
               S-1 [Reg. No. 33-86682] and incorporated herein by reference).

10.24          Indenture of Trust between CPCFA and Bankers Trust Company dated August 1, 1990, as
               supplemented on May 1, 1990 (Delano I; filed as Exhibit 10.30 to the Registrant's
               Registration Statement on Form S-1 [Reg. No. 33-86682] and incorporated herein by
               reference).

10.25          Indenture of Trust between CPCFA and Bankers Trust Company dated October, 1991 (Delano
               II; filed as Exhibit 10.31 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.26          Loan Agreement between CPCFA and Delano Energy Company, Inc. dated October 1, 1991 (filed
               as Exhibit 10.32 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.27          Power Purchase Contract between Southern California Edison Co. and Signal Delano Energy
               Company, Inc. dated July 31, 1987 (filed as Exhibit 10.33 to the Registrant's
               Registration Statement on Form S-1 [Reg. No. 33-86682] and incorporated herein by
               reference).

10.28          Amended Restated Reimbursement Agreement among Chemical Trust Company of California
               ("CTCC"), Delano Energy Company, Inc. and ABN AMRO Bank N.V. and other banks dated
               December 31, 1993 (filed as Exhibit 10.34 to the Registrant's Registration Statement on
               Form S-1 [Reg. No. 33-86682] and incorporated herein by reference).


                                       40
<PAGE>

Exhibit
Number         Description of Exhibit

10.29          Amended and Restated Lease Agreement between CTCC and Delano
               Energy Company, Inc. dated December 31, 1993 (filed as Exhibit
               10.35 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.30          Biomass Fuel Supply Contract between the Registrant and Delano
               Energy Company, Inc. dated December 31, 1993 (filed as Exhibit
               10.36 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.31          Power Purchase Agreement between Woodland Biomass Power, Ltd. and
               Pacific Gas & Electric Company dated May 7, 1987 (filed as
               Exhibit 10.38 to the Registrant's Registration Statement on Form
               S-1 [Reg. No. 33-86682] and incorporated herein by reference).

10.32          Stock Purchase Agreement dated as of August 18, 1995, between the
               Registrant and KFx, Inc. (filed as Exhibit 10.40 to the
               Registrant's Transition Report on Form 10-K for the nine months
               ended September 30, 1995 [File No. 1-13572] and incorporated
               herein by reference). Pursuant to Item 601(b)(2) of Regulation
               S-K, schedules to this Agreement have been omitted. The Company
               hereby undertakes to furnish supplementally a copy of such
               schedules to the commission upon request.

10.33          Stock Purchase Warrant issued by KFx, Inc. to the Company dated August 18, 1995 (filed as
               Exhibit 10.41 to the Registrant's Transition Report on Form 10-K for the nine months
               ended September 30, 1995 [File No. 1-13572] and incorporated herein by reference).

10.34          Stock Purchase Warrant issued by KFx, Inc. to the Company dated August 18, 1995 (filed as
               Exhibit 10.42 to the Registrant's Transition Report on Form 10-K for the nine months
               ended September 30, 1995 [File No. 1-13572] and incorporated herein by reference).

10.35          Limited Partnership Agreement of KFx Fuel Partners, L.P. dated as
               of August 18, 1995 (filed as Exhibit 10.43 to the Registrant's
               Transition Report on Form 10-K for the nine months ended
               September 30, 1995 [File No. 1-13572] and incorporated herein by
               reference). (Certain portions of this Exhibit have been omitted
               subject to an application for confidential treatment filed with
               the Commission pursuant to Rule 24b-2 under the Securities
               Exchange Act of 1934.)

10.36          Turnkey Design and Construction Agreement dated as of August 18,
               1995, between KFx Fuel Partners, L.P. and Walsh Construction
               Company, a Division of Guy F. Atkinson Company (filed as Exhibit
               10.44 to the Registrant's Transition Report on Form 10-K for the
               nine months ended September 30, 1995 [File No. 1-13572] and
               incorporated herein by reference). (Certain portions of this
               Exhibit have been omitted subject to an application for
               confidential treatment filed with the Commission pursuant to Rule
               24b-2 under the Securities Exchange Act of 1934.)

10.37          Lease Agreement between Manufacturers Hanover Trust Company of
               California and Woodland Biomass Power, Ltd. dated December 29,
               1989 (filed as Exhibit 10.39 to the Registrant's Registration
               Statement on Form S-1 [Reg. No. 33-86682] and incorporated herein
               by reference).

10.38          First Amendment to Power Purchase Agreement dated November 6,
               1997, between Woodland Biomass Power, Ltd. and Pacific Gas and
               Electric Company (filed as Exhibit 10.3 to the Registrant's
               Quarterly Report on Form 10-Q for the quarter ended January 3,
               1998 [File No. 1-13572] and incorporated herein by reference).
               (Certain portions of this Exhibit have been omitted subject to an
               application for confidential treatment filed with the Commission
               pursuant to Rule 24b-2 under the Securities Exchange Act of
               1934.)


                                       41
<PAGE>

Exhibit
Number         Description of Exhibit

10.39          Second Amendment to Power Purchase Agreement dated November 6,
               1997, between Mendota Biomass Power, Ltd. and Pacific Gas and
               Electric Company (filed as Exhibit 10.4 to the Registrant's
               Quarterly Report on Form 10-Q for the quarter ended January 3,
               1998 [File No. 1-13572] and incorporated herein by reference).
               (Certain portions of this Exhibit have been omitted subject to an
               application for confidential treatment filed with the Commission
               pursuant to Rule 24b-2 under the Securities Exchange Act of
               1934.)

10.40*         Purchase Agreement dated October 25, 1999, between Mountainview
               Power Company and General Electric Company for four PG 7241 FA
               Combustion Turbine Generators for the Mountainview Generation
               Project.

10.41*         Contract Termination Agreement between Southern California Edison
               Company and Delano Energy Co., Inc.

10.42          Incentive Stock Option Plan of the Registrant (filed as Exhibit
               10.44 to the Registrant's Registration Statement on Form S-1
               [Reg. No 33-86682] and incorporated herein by reference).
               (Maximum number of shares issuable in the aggregate under this
               plan and the Registrant's Nonqualified Stock Option Plan is
               1,350,000 shares, after adjustment to reflect share increase
               approved in December 1993 and 3-for-2 stock split effected in
               October 1996.)

10.43          Amended and Restated Directors Stock Option Plan of the Registrant (filed as Exhibit 10.3
               to the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 3, 1999
               [File No. 1-13572] and incorporated herein by reference).

10.44          Amended and Restated Deferred Compensation Plan for Directors of the Registrant (filed as
               Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended July
               3, 1999 [File No. 1-13572] and incorporated herein by reference).

10.45          Amended and Restated Equity Incentive Plan of the Registrant (filed as Exhibit 10.5 to
               the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 3, 1999
               [File No. 1-13572] and incorporated herein by reference).

10.46          Amended and Restated Nonqualified Stock Option Plan of the
               Registrant (filed as Exhibit 10.6 to the Registrant's Quarterly
               Report on Form 10-Q for the quarter ended July 3, 1999 [File No.
               1-13572] and incorporated herein by reference). (Maximum number
               of shares issuable in the aggregate under this plan and the
               Registrant's Incentive Stock Option Plan is 1,350,000 shares,
               after giving effect to share increase approved in December 1993
               and 3-for-2 stock split effected in October 1996.)

10.47          Amended and Restated Thermo Ecotek Corporation - Thermo Trilogy
               Corporation Nonqualified Stock Option Plan (filed as Exhibit 10.7
               to the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended July 3, 1999 [File No. 1-13572] and incorporated herein by
               reference).

10.48          Thermo Trilogy Corporation Equity Incentive Plan (filed as
               Exhibit 10.52 to the Registrant's Report on Form 10-K for the
               fiscal year ended September 28, 1996 [File No.
               1-13572] and incorporated herein by reference).

               In addition to the stock-based compensation plans of the
               Registrant, the executive officers of the Registrant may be
               granted awards under stock-based compensation plans of Thermo
               Electron Corporation, for services rendered to the Registrant.
               The terms of such plans are substantially the same as those of
               the Registrant's Equity Incentive Plan.


                                       42
<PAGE>

Exhibit
Number         Description of Exhibit

10.49          Form of Indemnification Agreement between the Registrant and its officers and directors
               (filed as Exhibit 10.43 to the Registrant's Registration Statement on Form S-1
               [Reg. No. 33-86682] and incorporated herein by reference).

10.50          Restated Stock Holding Assistance Plan and Form of Promissory Note (filed as Exhibit
               10.54 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September
               27, 1997 [File No. 1-13572] and incorporated herein by reference).

10.51          Master Cash Management, Guarantee Reimbursement and Loan
               Agreement dated as of June 1, 1999, between the Registrant and
               Thermo Electron Corporation (filed as Exhibit 10.1 to the
               Registrant's Quarterly Report on Form 10-Q for the quarter ended
               July 3, 1999 [File No. 1-13572] and incorporated herein by
               reference).

10.52          Master Cash Management, Guarantee Reimbursement and Loan
               Agreement dated as of June 1, 1999, between Thermo Trilogy
               Corporation and Thermo Electron Corporation (filed as Exhibit
               10.2 to the Registrant's Quarterly Report on Form 10-Q for the
               quarter ended July 3, 1999 [File No. 1-13572] and incorporated
               herein by reference).

  13           Annual Report to Shareholders for the fiscal year ended October 2, 1999 (only those
               portions incorporated herein by reference).

  21           Subsidiaries of the Registrant.

  23           Consent of Arthur Andersen LLP.

  27           Financial Data Schedule.


*  Confidential treatment requested as to certain portions of the document,
   which portions have been omitted and filed separately with the Securities and
   Exchange Commission.

</TABLE>