Baycorp Holdings Ltd – ‘424B3’ on 6/12/96

As of:  Wednesday, 6/12/96   ·   Accession #:  950135-96-2601   ·   File #:  333-03362

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Prospectus   —   Rule 424(b)(3)
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Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Baycorp Holdings, Ltd.                               114    659K 

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                                                Filed pursuant to Rule 424(b)(3)
                                         Registration No. 333-3362

PROXY STATEMENT/PROSPECTUS
--------------------------- 

PROSPECTUS

FOR SHARES OF COMMON STOCK OF 
BAYCORP HOLDINGS, LTD.
--------------------------- 

PROXY STATEMENT 
FOR SPECIAL MEETING OF SHAREHOLDERS 
GREAT BAY POWER CORPORATION 
TO BE HELD ON JULY 2, 1996

This Proxy Statement/Prospectus relates to the proposed merger (the   
"Merger") of GB Transitory Subsidiary, Inc., a New Hampshire corporation        
("Transitory Subsidiary"), which is a wholly-owned subsidiary of BayCorp        
Holdings, Ltd., a Delaware corporation ("Holding Company"), with and into Great 
Bay Power Corporation, a New Hampshire corporation ("Great Bay"), pursuant to an
Agreement and Plan of Merger dated as of May 28, 1996 (the "Merger Agreement"), 
the form of which is attached as Annex I hereto. As a result of the Merger, (i) 
Transitory Subsidiary will be merged with and into Great Bay, (ii) except for   
shares of Great Bay's common stock, $.01 par value per share ("Great Bay Common 
Stock"), which are held by Great Bay shareholders who properly exercise their   
dissenters' rights under New Hampshire law ("Dissenting Shares"), each          
outstanding share of Great Bay Common Stock will be converted into the right to 
receive one share of common stock, $.01 par value per share, of Holding Company 
("Holding Company Common Stock"), (iii) Great Bay will become a wholly-owned    
subsidiary of Holding Company, and (iv) each holder of options to purchase      
shares of Great Bay Common Stock issued by Great Bay pursuant to its 1995 Stock 
Option Plan (the "Great Bay Stock Option Plan"), whether vested or unvested     
("Great Bay Options"), will be granted substitute options to purchase an equal  
number of shares of Holding Company Common Stock pursuant to Holding Company's  
1996 Stock Option Plan (the "Holding Company Stock Option Plan") on the same    
terms and conditions and at the same exercise price per share as presently      
provided for by the Great Bay Options. The Holding Company Stock Option Plan is 
identical to the Great Bay Stock Option Plan, and the Great Bay Stock Option    
Plan will be terminated if the Merger is consummated.                           

   This Proxy Statement/Prospectus serves as a Prospectus of Holding Company
with respect to up to 8,439,948 shares of Holding Company Common Stock to be    
issued in the proposed Merger. Each person who controls or who is under common  
control with Great Bay at the time the Merger is submitted for a vote of the    
Great Bay shareholders may, in connection with any distribution of the Holding  
Company Common Stock received in the Merger, be deemed to be "affiliates" of    
Great Bay and thus "underwriters" within the meaning of the Securities Act of   
1933, as amended (the "Securities Act"), unless such stock is sold pursuant to  
paragraph (d) of Rule 145 promulgated under the Securities Act, pursuant to an  
effective registration statement filed under the Securities Act with respect to 
such sales or pursuant to another applicable exemption therefrom. This Proxy    
Statement/Prospectus does not cover any resales of the Holding Company Common   
Stock received by such Great Bay shareholders upon consummation of the Merger,  
and no person is authorized to make any use of this Proxy Statement/Prospectus  
in connection with any such resale. See "The Merger -- Restrictions on Resale of
Holding Company Common Stock Received in the Merger; Affiliates."               

This Proxy Statement/Prospectus also serves as the proxy statement in 
connection with the solicitation of proxies by the Board of Directors of Great  
Bay (the "Great Bay Board") for use at the special meeting of Great Bay         
shareholders (the "Special Meeting") to be held for the purpose of approving the
proposed Merger and the Holding Company Stock Option Plan.                      

  All information contained in this Proxy Statement/Prospectus relating to
Great Bay, Holding Company and Transitory Subsidiary has been supplied by Great 
Bay.                                                                            

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  Great Bay Common Stock is quoted on the Nasdaq National Market under the
symbol "GBPW." On May 23, 1996, the last reported sale price for a share of     
Great Bay Common Stock on the Nasdaq National Market was $7.875. Great Bay      
currently is the sole shareholder of Holding Company, and Holding Company Common
Stock is not currently, and has never previously been, traded on any established
public market. Subject to the consummation of the Merger, the Holding Company   
Common Stock has been approved for quotation on the Nasdaq National Market under
the symbol "GBPW."                                                              
--------------------------- 

     ANY INVESTMENT IN THE SHARES OF HOLDING COMPANY COMMON STOCK OFFERED HEREBY
INVOLVES A HIGH DEGREE OF RISK. FOR A DISCUSSION OF CERTAIN RISKS OF AN         
INVESTMENT IN THE SHARES OF HOLDING COMPANY COMMON STOCK OFFERED HEREBY, SEE    
"RISK FACTORS" ON PAGES 9 TO 12.                                                
--------------------------- 

THE SECURITIES TO BE ISSUED IN THE MERGER HAVE NOT BEEN APPROVED OR   
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE  
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION  
OR ANY STATE SECURITIES COMMISSION PASSED UPON  
THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/   
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A   
CRIMINAL OFFENSE.   
--------------------------- 

UNTIL JULY 5, 1996 (25 DAYS AFTER THE DATE OF THIS PROXY              
STATEMENT/PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE HOLDING COMPANY
COMMON STOCK MAY BE REQUIRED TO DELIVER A PROSPECTUS.                           

This Proxy Statement/Prospectus and the accompanying form of proxy are
first being mailed to shareholders of Great Bay on or about June 12, 1996.      

The date of this Proxy Statement/Prospectus is June 10, 1996. 

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TABLE OF CONTENTS 

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                                                                                       ----
                                                                                           
AVAILABLE INFORMATION.................................................................   1 
SUMMARY...............................................................................   2 
  The Companies.......................................................................   2 
  Recommendation of the Great Bay Board...............................................   2 
  The Special Meeting.................................................................   3 
  The Merger..........................................................................   3 
  The Holding Company Stock Option Plan...............................................   6 
SELECTED FINANCIAL DATA OF GREAT BAY..................................................   7 
GREAT BAY COMMON STOCK MARKET PRICE INFORMATION.......................................   8 
RISK FACTORS..........................................................................   9 
THE SPECIAL MEETING...................................................................  13 
  General.............................................................................  13 
  Matters to be Considered at the Special Meeting; Recommendation of the Great Bay         
     Board............................................................................  13 
  Record Date; Shares Entitled to Vote................................................  13 
  Quorum; Required Vote...............................................................  13 
  Voting and Revocation of Proxies....................................................  14 
  Solicitation of Proxies.............................................................  14 
-- PROPOSAL ONE --                                                                         
THE MERGER............................................................................  15 
  Reasons for the Merger; Recommendation of Great Bay Board...........................  15 
  Effective Date of the Merger........................................................  15 
  Structure and Terms of the Merger...................................................  15 
  Employment Agreements to be Assumed by Holding Company..............................  16 
  Substitution of Great Bay Stock Options.............................................  16 
  Assumption of the PECO Warrant......................................................  16 
  Assumption of Facility Lease........................................................  16 
  Procedure for Exchange of Certificates..............................................  16 
  Management and Operation After the Merger...........................................  16 
  Conditions to Consummation of the Merger; Amendment or Termination of the Merger         
     Agreement........................................................................  17 
  Regulatory Approvals................................................................  17 
  Accounting Treatment................................................................  17 
  Certain Federal Income Tax Consequences.............................................  17 
  Restrictions on Resale of Holding Company Common Stock Received in the Merger;           
     Affiliates.......................................................................  18 
RIGHTS OF DISSENTING SHAREHOLDERS.....................................................  19 
INFORMATION CONCERNING GREAT BAY......................................................  21 
  Business............................................................................  21 
  Properties..........................................................................  29 
  Employees...........................................................................  29 
  Legal Proceedings...................................................................  29 
  Certain Transactions................................................................  29 
  Management's Discussion and Analysis of Financial Condition and Results of               
     Operations.......................................................................  30 
  Management..........................................................................  34 
  Security Ownership of Certain Beneficial Owners and Management of Great Bay.........  38 
  Relationship Between Holding Company and Great Bay..................................  40 
DESCRIPTION OF HOLDING COMPANY........................................................  41 
DESCRIPTION OF HOLDING COMPANY CAPITAL STOCK..........................................  41 
  General.............................................................................  41 
  Holding Company Common Stock........................................................  41 
  Transfer Agent and Registrar........................................................  42 
  Holding Company Preferred Stock.....................................................  42 
  Registration Rights.................................................................  42 

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COMPARISON OF STOCKHOLDER RIGHTS......................................................  43 
  Authorized Capital Stock............................................................  43 
  Preemptive Rights...................................................................  44 
  Voting Rights.......................................................................  44 
  Actions by Stockholders Without a Meeting...........................................  44 
  Dividends or Other Distributions....................................................  44 
  Number and Qualification of Directors; Size of Board................................  45 
  Cumulative Voting...................................................................  45 
  Removal of Directors................................................................  45 
  Special Meeting of Stockholders.....................................................  45 
  Amendment of Certificate of Incorporation and By-Laws...............................  46 
  Director's Liability and Indemnification............................................  47 
  Anti-Takeover Statutes..............................................................  47 
  Sale of Assets......................................................................  48 
  Appraisal Rights....................................................................  48 
-- PROPOSAL TWO --                                                                         
THE HOLDING COMPANY STOCK OPTION PLAN.................................................  49 
STOCKHOLDER PROPOSALS.................................................................  54 
LEGAL MATTERS.........................................................................  54 
EXPERTS...............................................................................  54 
GLOSSARY OF CERTAIN DEFINED TERMS.....................................................  55 
INDEX TO GREAT BAY FINANCIAL STATEMENTS............................................... F-1 
ANNEX I    AGREEMENT AND PLAN OF MERGER............................................... A-1 
ANNEX II   SECTIONS 293-A:13.01-13.31 OF THE NEW HAMPSHIRE BUSINESS CORPORATION ACT... B-1 
ANNEX III  HOLDING COMPANY 1996 STOCK OPTION PLAN..................................... C-1 

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AVAILABLE INFORMATION 

  Great Bay is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance        
therewith files reports, proxy statements and other information with the        
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by Great Bay with the Commission may be inspected   
and copied at the public reference facilities maintained by the Commission at   
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and  
at the regional offices of the Commission located at Seven World Trade Center,  
13th Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,   
Chicago, Illinois 60661. Copies of such material also may be obtained from the  
Public Reference Section of the Commission, Washington, D.C. 20549 at prescribed
rates.                                                                          

Holding Company has filed with the Commission a Registration Statement
(which terms will include all amendments, exhibits and schedules thereto) on    
Form S-4 (the "Registration Statement") under the Securities Act with respect to
up to 8,439,948 shares of Holding Company Common Stock to be issued upon the    
consummation of the Merger. This Proxy Statement/Prospectus, which constitutes a
part of the Registration Statement, omits certain information contained in the  
Registration Statement. Such additional information may be obtained from the    
Commission's principal office in Washington, D.C. Statements made in this Proxy 
Statement/Prospectus as to the contents of any contract, agreement or other     
document referred to are not necessarily complete, and in each instance that    
reference is made to the copy of such contract or other document filed as an    
exhibit to the Registration Statement or such other document, and each such     
statement is qualified in its entirety by such reference.                       
--------------------------- 

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY        
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS, 
IN CONNECTION WITH THE SOLICITATION OF PROXIES OR THE OFFERING OF SECURITIES    
MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT 
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY GREAT BAY, HOLDING COMPANY OR ANY   
OTHER PERSON. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO   
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES, OR THE SOLICITATION 
OF A PROXY, IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS NOT LAWFUL  
TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.                    

NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY       
DISTRIBUTION OF SECURITIES MADE HEREUNDER WILL UNDER ANY CIRCUMSTANCES CREATE   
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF GREAT BAY,      
TRANSITORY SUBSIDIARY OR HOLDING COMPANY SINCE THE DATE HEREOF OR THAT THE      
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE   
HEREOF.                                                                         
--------------------------- 

  NOTICE TO NEW HAMPSHIRE RESIDENTS:  Neither the fact that a registration
statement or an application for a license has been filed with the State of New  
Hampshire nor the fact that a security is effectively registered or a person is 
licensed in the State of New Hampshire constitutes a finding by the Secretary of
State that any documents filed under RSA 421-B of the New Hampshire Uniform     
Securities Act is true, complete and not misleading. Neither any such fact nor  
the fact that an exemption or exception is available for a security or a        
transaction means that the Secretary of State has passed in any way upon the    
merits or qualifications of, or recommended or given approval to, any person,   
security or transaction. It is unlawful to make, or cause to be made, to any    
prospective purchaser, customer or client any representation inconsistent with  
the provisions of this paragraph.                                               

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SUMMARY 

  The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus. The information contained in this summary is   
qualified in its entirety by, and should be read in conjunction with, the       
detailed information and financial statements, including the notes thereto,     
appearing elsewhere in this Proxy Statement/Prospectus and the documents        
incorporated herein by reference. A glossary of certain defined terms used in   
this Proxy Statement/Prospectus appears under the heading "Glossary of Certain  
Defined Terms." Shareholders are urged to read this Proxy Statement/Prospectus  
and the Annexes attached hereto in their entirety. See "Risk Factors."          

THE COMPANIES                                                                   

     Great Bay Power Corporation.  Great Bay is a public utility whose principal
asset is a 12.1% joint ownership interest in Seabrook Nuclear Power Project in  
Seabrook, New Hampshire (the "Seabrook Project"). Great Bay was incorporated in 
New Hampshire in 1986 and was formerly known as EUA Power Corporation. Great Bay
sells its share of the electricity output of the Seabrook Project in the        
wholesale electricity market, primarily in the Northeast United States. Great   
Bay does not have operational responsibility for the Seabrook Project. Great    
Bay's share of the Seabrook Project capacity is approximately 140 megawatts     
("MW"). Great Bay currently sells all but 10 MW of its share of the Seabrook    
Project capacity in the Short-Term Market (as defined in the "Glossary of       
Certain Defined Terms," below). See "Information Concerning Great Bay --        
Business -- Power Purchase Agreements."                                         

     Great Bay filed a voluntary petition for reorganization under Chapter 11 of
the United States Bankruptcy Code in the United States Bankruptcy Court for the 
District of New Hampshire on February 28, 1991. It conducted its business as a  
Debtor in Possession until November 23, 1994, at which time it emerged from     
Chapter 11.                                                                     

BayCorp Holdings, Ltd.  Holding Company is a newly formed Delaware    
corporation and currently is a wholly-owned subsidiary of Great Bay and thus is 
controlled by Great Bay. Holding Company currently is engaged in no business    
activities other than in connection with the proposed Merger described herein.  
If the Merger is consummated, Holding Company will be the sole shareholder of   
Great Bay.                                                                      

     GB Transitory Subsidiary, Inc.  Transitory Subsidiary is a newly formed New
Hampshire corporation and a wholly-owned subsidiary of Holding Company.         
Transitory Subsidiary was formed specifically for the purpose of effecting the  
transactions contemplated by the Merger Agreement. Transitory Subsidiary        
currently is engaged in no business activities other than in connection with the
proposed Merger described herein. Subject to the consummation of the Merger,    
Transitory Subsidiary will be merged with and into Great Bay. Upon completion of
the Merger, Transitory Subsidiary will cease to exist and Great Bay will be the 
surviving corporation.                                                          

The principal executive offices of Great Bay, Holding Company and     
Transitory Subsidiary are located at Cocheco Falls Millworks, 100 Main Street,  
Dover, New Hampshire 03820 and the telephone number is (603) 433-8822.          

   The Holding Company Stock Option Plan.  Pursuant to the Merger Agreement,
Holding Company will adopt the Holding Company Stock Option Plan. The Holding   
Company Stock Option Plan is identical to the Great Bay Stock Option Plan, and  
the Great Bay Stock Option Plan will be terminated if the Merger is consummated.

RECOMMENDATIONS OF THE GREAT BAY BOARD                                          

     The Great Bay Board has determined that the Merger is in the best interests
of Great Bay and its shareholders because the Great Bay Board believes that     
attractive opportunities may exist to enter new businesses or acquire existing  
businesses, both in energy related fields and in unrelated fields, certain of   
which Great Bay may be prohibited from entering because of its status as an     
exempt wholesale generator ("EWG"). Accordingly, the Great Bay Board has        
unanimously adopted, subject to shareholder approval, the Merger Agreement and  
recommends that the shareholders vote FOR approval of the Merger Agreement. In  
addition, in connection with the Merger, the Great Bay Board and the Holding    
Company Board of Directors (the "Holding Company Board") unanimously adopted,   
subject to shareholder approval, the Holding Company Stock Option Plan and      
recommends that the shareholders vote FOR approval of the Holding Company Stock 

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Option Plan. For a description of the reasons for the Merger, see "The Merger --
Reasons for the Merger; Recommendation of Great Bay Board."                     

THE SPECIAL MEETING                                                             

Date, Time and Place of the Special Meeting.  The Special Meeting of  
shareholders of Great Bay will be held on Tuesday, July 2, 1996 at the offices  
of Hale and Dorr, 60 State Street, Boston, Massachusetts, beginning at 10:00    
a.m., local time.                                                               

   Matters to be Considered at the Special Meeting.  At the Special Meeting,
the shareholders of Great Bay will be asked to approve the Merger Agreement and 
the Holding Company Stock Option Plan.                                          

    Record Date; Shares Entitled to Vote.  Only holders of record of shares of
Great Bay Common Stock at the close of business on May 3, 1996, the record date 
for the Special Meeting (the "Record Date"), are entitled to notice of, and to  
vote at, the Special Meeting with respect to the approval of the Merger         
Agreement.                                                                      

     Quorum; Required Vote.  The presence, in person or by proxy, of the holders
of a majority of the outstanding shares of Great Bay Common Stock entitled to   
vote at the Special Meeting will be necessary to constitute a quorum for the    
transaction of business. Approval of the Merger Agreement requires the          
affirmative vote of the holders of a majority of the outstanding shares of Great
Bay Common Stock. Approval of the Holding Company Stock Option Plan requires the
affirmative vote of the holders of a majority of the shares of Great Bay Common 
Stock present or represented at the Special Meeting.                            

     Ownership of Securities.  As of the Record Date, there were outstanding and
entitled to vote 7,999,948 shares of Great Bay Common Stock. Accordingly, the   
Merger will be approved if the holders of 3,999,975 shares of Great Bay Common  
Stock approve the Merger Agreement. As of the Record Date, Great Bay's          
directors, executive officers, certain entities affiliated with Great Bay's     
directors and executive officers and the Elliott Group (as defined in "Security 
Ownership of Certain Beneficial Owners and Management of Great Bay" below) in   
the aggregate held, directly or indirectly, 4,453,030 shares of Great Bay Common
Stock, or approximately 55.7% of the shares of Great Bay Common Stock           
outstanding as of such date. Each of the directors and executive officers of    
Great Bay and the members of the Elliott Group have indicated that they and     
their affiliates intend to vote their shares of Great Bay Common Stock for      
approval of the Merger Agreement, ensuring the approval of the Merger Agreement 
by the Great Bay shareholders without regard to the votes of any other Great Bay
shareholders.                                                                   

    In addition, as of the Record Date, (i) options to purchase 375,000 shares
of Great Bay Common Stock and (ii) a warrant to purchase 420,000 shares of Great
Bay Common Stock (the "PECO Warrant") were outstanding. As of the Record Date,  
200,000 of such options were exercisable and the PECO Warrant was exercisable in
full.                                                                           

   Rights of Dissenting Shareholders.  Holders of Great Bay Common Stock are
entitled to assert dissenters' rights under Sections 293-A:13.01-13.31 of the   
New Hampshire Revised Business Corporation Act (the "New Hampshire Law") with   
respect to the proposed Merger and, subject to the consummation of the Merger,  
to receive the "fair value" of their shares in cash by complying with the       
procedures set forth in Sections 293-A:13.20-13.28 of the New Hampshire Law.    
Unless waived by Great Bay, it is a condition to the Merger that the number of  
shares of Great Bay Common Stock held by shareholders of Great Bay who properly 
exercise their dissenters' rights shall not exceed 20,000 shares as of the      
effective date of the Merger. See "Rights of Dissenting Shareholders" and the   
text of Sections 293-A:13.01-13.31 of the New Hampshire Law, a copy of which is 
attached as Annex II hereto.                                                    

THE MERGER                                                                      

   Effective Date.  The Merger will become effective upon the date of filing
(the "Effective Date") of Articles of Merger with respect to the Merger of      
Transitory Subsidiary with and into Great Bay (the "Articles of Merger"), as    
described in the Merger Agreement, with the Secretary of State of the State of  
New Hampshire pursuant to Section 293-A:11.05 of the New Hampshire Law. Subject 
to the satisfaction of other conditions set forth in the Merger Agreement and   
the receipt of all Merger Regulatory Approvals (as defined below), it is        
anticipated that the Articles of Merger will be filed as promptly as practicable
following the                                                                   

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approval of the Merger Agreement by holders of the requisite number of shares of
Great Bay Common Stock. See "The Merger -- Effective Date of the Merger."       

General Terms of the Merger.  Pursuant to the Merger Agreement, at the
Effective Date (i) Transitory Subsidiary will be merged with and into Great Bay,
(ii) except for Dissenting Shares, each share of Great Bay Common Stock         
outstanding immediately prior to the effectiveness of the Merger will be        
converted into the right to receive one share of Holding Company Common Stock,  
(iii) Great Bay will become a wholly-owned subsidiary of Holding Company, and   
(iv) each holder of Great Bay Options will be granted substitute options to     
purchase shares of Holding Company Common Stock pursuant to the Holding Company 
Stock Option Plan on the same terms and conditions and at the same exercise     
price per share as presently provided for by the Great Bay Options. The Holding 
Company Stock Option Plan is identical to the Great Bay Stock Option Plan and   
the Great Bay Stock Option Plan will be terminated if the Merger is consummated.
See "Rights of Dissenting Shareholders," "The Merger -- Structure and Terms of  
the Merger" and "The Holding Company Stock Option Plan."                        

     Conversion of Shares.  If the Merger is consummated, at the Effective Date,
each outstanding share of Great Bay Common Stock, except for Dissenting Shares, 
will be converted into the right to receive one share of Holding Company Common 
Stock. See "Description of Holding Company Capital Stock."                      

  Comparative Rights of Shareholders of Great Bay and Holding Company.  If
the Merger is consummated, at the Effective Date, holders of Great Bay Common   
Stock, except for holders of Dissenting Shares, will become holders of Holding  
Company Common Stock. As a result, the rights of such shareholders, which are   
presently governed by the New Hampshire Law, the Restated Articles of           
Incorporation of Great Bay (the "Great Bay Articles") and the Amended and       
Restated By-Laws of Great Bay (the "Great Bay By-Laws") will be governed by the 
Delaware General Corporation Law (the "Delaware Law"), the Certificate of       
Incorporation of Holding Company (the "Holding Company Certificate") and the    
By-Laws of Holding Company (the "Holding Company By-Laws"). Certain differences 
in the rights of such shareholders will arise as a result of this change in     
governing law as well as from distinctions between the Articles of Incorporation
and By-Laws of Great Bay and the Certificate of Incorporation and By-Laws of    
Holding Company. See "The Merger -- Reasons for the Merger; Recommendation of   
Great Bay Board" and "Comparison of Stockholder Rights."                        

Reasons for the Merger.  The Great Bay Board believes that attractive 
opportunities may exist to enter new businesses or acquire existing businesses, 
both in energy related fields and in unrelated fields. Great Bay currently has  
no understandings, agreements or commitments for any acquisition. The Great Bay 
Board believes that it is advisable to restructure Great Bay as a subsidiary of 
Holding Company because Holding Company would be able to engage in business     
activities, through subsidiaries other than Great Bay, which Great Bay is       
currently prohibited from engaging in because of Great Bay's status as an Exempt
Wholesale Generator ("EWG") under the Public Utility Holding Company Act of     
1935, as amended (the "PUHCA").                                                 

   As an EWG, Great Bay is limited to the generation and sale of electricity
from the Seabrook Project in the wholesale electricity market and activities    
incidental thereto. Holding Company will be able to engage in other business    
activities which may be related or unrelated to those of Great Bay. Great Bay is
also subject to regulation by the New Hampshire Public Utilities Commission (the
"NHPUC") as a New Hampshire public utility. Any financing transaction, except   
the issuance of short term debt for up to 10% of the value of Great Bay's net   
fixed assets, or issuance of securities by Great Bay, among other transactions, 
is subject to approval by the NHPUC. Following the consummation of the Merger,  
New Hampshire public utilities laws would not directly regulate the activities  
of Holding Company.                                                             

  The Great Bay Board also anticipates that the establishment of a holding
company structure may help insulate Holding Company and each of its subsidiaries
from the liabilities of the others. In addition, Holding Company is governed by 
Delaware corporate law, which is better developed (in terms of judicial         
interpretation and precedents) and is more widely known and understood by       
potential investors and other parties likely to have business dealings with     
Holding Company than New Hampshire corporate law which governs Great Bay. See   
"The Merger -- Reasons for the Merger; Recommendation of Great Bay Board."      

  Management and Operation After the Merger.  The persons who are officers
and directors of Great Bay immediately prior to the Effective Date will, after  
the Effective Date, be the officers and directors of Holding                    
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Company and of Great Bay, without change, until their successors have been duly 
elected or appointed and qualified.                                             

     Required Regulatory and Other Approvals.  The consummation of the Merger is
subject to approval by the NHPUC and the Federal Energy Regulatory Commission   
("FERC") and to consent by the Nuclear Regulatory Commission (the "NRC")        
(collectively the "Merger Regulatory Approvals"). Great Bay and Holding Company 
have filed applications with the NHPUC, the FERC and the NRC seeking such       
approval of and consent to the Merger. See "The Merger -- Regulatory Approvals."

   Services Agreement.  On the Effective Date, Holding Company and Great Bay
will enter into a Management and Administrative Services Agreement (the         
"Services Agreement") pursuant to which the Holding Company will provide to     
Great Bay a full range of management services, including general management and 
administration, accounting and bookkeeping, budgeting and regulatory compliance.
Great Bay will pay Holding Company a monthly fee of $120,000 in consideration of
such services. The Services Agreement will have a one-year term and will provide
for automatic one-year renewals. The monthly fee for subsequent renewal terms   
will be determined by agreement of Great Bay and Holding Company. See           
"Information Concerning Great Bay -- Relationship Between Holding Company and   
Great Bay."                                                                     

   Conditions to Consummation of the Merger.  The consummation of the Merger
is conditioned upon, among other things, obtaining requisite shareholder and    
regulatory approvals, approval for quotation on the Nasdaq National Market of   
the Holding Company Common Stock to be issued pursuant to the Merger, the       
absence of any injunction prohibiting consummation of the Merger, the           
effectiveness of the Registration Statement and the receipt of certain legal    
opinions with respect to tax matters. In addition, unless waived by Great Bay,  
the number of Dissenting Shares will not exceed 20,000 shares of Great Bay      
Common Stock as of the Effective Date. See "The Merger -- Certain Federal Income
Tax Consequences" and "The Merger -- Conditions to the Consummation of the      
Merger; Amendment or Termination of the Merger Agreement."                      

Termination of the Merger Agreement.  At any time before the Effective
Date, notwithstanding approval by the shareholders of Great Bay, the Merger     
Agreement may be terminated by action of the Board of Directors of Great Bay.   
See "The Merger -- Conditions to the Consummation of the Merger; Amendment or   
Termination of the Merger Agreement."                                           

Restrictions on Resale of Holding Company Common Stock Received in the
Merger; Affiliates.  The Registration Statement and this Proxy                  
Statement/Prospectus do not relate to or cover the resale after the Effective   
Date of shares of Holding Company Common Stock issued to shareholders of Great  
Bay in the Merger who may be deemed to be "affiliates" of Great Bay and thus    
"underwriters" within the meaning of Rule 145 under the Securities Act, and no  
person is authorized to make any use of this Proxy Statement/Prospectus in      
connection with any such resale. Such securities may not be publicly reoffered  
or resold by such persons except pursuant to an effective registration statement
under the Securities Act or pursuant to an applicable exemption therefrom. See  
"The Merger -- Restrictions on Resale of Holding Company Common Stock Received  
in the Merger; Affiliates."                                                     

  Accounting Treatment.  The Merger will be accounted for as a "pooling of
interests of entities under common control" for accounting and financial        
reporting purposes. See "The Merger -- Accounting Treatment."                   

Certain Federal Income Tax Consequences.  The Merger is intended to   
constitute a tax-free reorganization under the Internal Revenue Code of 1986, as
amended (the "Code") with respect to Great Bay shareholders who receive shares  
of Holding Company Common Stock pursuant to the Merger Agreement. Neither Great 
Bay nor Holding Company intends to request a ruling from the Internal Revenue   
Service with respect to the Merger. Hale and Dorr, counsel to Great Bay, will   
render an opinion to the effect that, under present United States federal income
tax law: (i) no gain or loss will be recognized by shareholders of Great Bay    
upon the conversion of their shares of Great Bay Common Stock solely into shares
of Holding Company Common Stock pursuant to the terms of the Merger; (ii) the   
tax basis of the shares of Holding Company Common Stock into which shares of    
Great Bay Common Stock are converted pursuant to the Merger will be the same as 
the basis of such shares of Great Bay Common Stock; and (iii) the holding period
for shares of Holding Company Common Stock into which shares of Great Bay Common
Stock are converted pursuant to the Merger will include the period that such    
shares of Great Bay Common Stock were held by the holder,                       

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provided that such shares were held as capital assets on the Effective Date of  
the Merger. See "The Merger -- Certain Federal Income Tax Consequences." Holders
of Great Bay Common Stock are urged to consult with their tax advisors to       
determine the particular tax consequences of the Merger to them.                

    Substitution of Great Bay Stock Options.  If the Merger is consummated, at
the Effective Date, each holder of a Great Bay Option under the Great Bay Stock 
Option Plan will be granted substitute options by Holding Company under Holding 
Company's 1996 Stock Option Plan (the "Holding Company Stock Option Plan") to   
purchase an equal number of shares of Holding Company Common Stock on the same  
terms and conditions and at the same exercise price per share. The Holding      
Company Stock Option Plan is identical to the Great Bay Stock Option Plan and   
the Great Bay Stock Option Plan will be terminated if the Merger is consummated.
See "The Holding Company Stock Option Plan" and "The Merger -- Substitution of  
Great Bay Stock Options."                                                       

Assumption of the PECO Warrant.  If the Merger is consummated, at the 
Effective Date, the PECO Warrant will be assumed by Holding Company and will    
automatically become a warrant representing the right to acquire an equal number
of shares of Holding Company Common Stock on the same terms and conditions and  
price per share. See "The Merger -- Assumption of the PECO Warrant."            

     Procedure for Exchange of Certificates.  Subject to the consummation of the
Merger, Holding Company will mail a letter of transmittal with instructions to  
all holders of record of Great Bay Common Stock immediately prior to the Merger,
for use in surrendering their stock certificates in exchange for certificates   
representing shares of Holding Company Common Stock. Certificates should not be 
surrendered until the letter of transmittal is received. See "The Merger --     
Procedure for Exchange of Certificates."                                        

THE HOLDING COMPANY STOCK OPTION PLAN                                           

    Terms of the Holding Company Stock Option Plan.  The Holding Company Board
unanimously adopted, subject to stockholder approval, the Holding Company Stock 
Option Plan at its meeting on April 16, 1996. Under the terms of the Holding    
Company Stock Option Plan, Holding Company is authorized to grant options       
("Holding Company Options") to purchase up to 600,000 shares of Common Stock to 
employees, officers or directors of, and consultants and advisors to, the       
Company and its subsidiaries. Holding Company may grant options that are        
intended to qualify as incentive stock options within the meaning of Section 422
of the Internal Revenue Code of 1986 (the "Code") or nonstatutory options not   
intended to qualify as incentive stock options. The purpose of the Holding      
Company Stock Option Plan is to ensure that Holding Company may continue to     
attract and retain key employees, officers, directors, consultants and advisors 
who are expected to contribute to Holding Company's growth and success. The text
of the Holding Company Stock Option Plan is attached as Annex III to this Proxy 
Statement/Prospectus. The Holding Company Stock Option Plan is identical to the 
Great Bay Stock Option Plan and will replace the Great Bay Stock Option Plan at 
the Effective Date and it is intended that the Great Bay Options will be        
replaced by Holding Company Options.                                            
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SELECTED FINANCIAL DATA OF GREAT BAY

                                                        [Enlarge/Download Table]
     The following table sets forth selected financial data and other operating                                                   
information of Great Bay. The selected financial data presented below for                                                         
periods subsequent to November 23, 1994 give effect to the consummation of Great                                                  
Bay's Fifth Amended Plan of Reorganization dated February 11, 1994, as amended                                                    
by a First Amendment dated September 9, 1994 (the "Amended Bankruptcy Plan") of                                                   
the predecessor of Great Bay and to the adoption of fresh start reporting by                                                      
Great Bay as of that date in accordance with the American Institute of Certified                                                  
Public Accountants' Statement of Position 90-7 Financial Reporting by Entities                                                    
in Reorganization under the Bankruptcy Code." Accordingly, periods prior to                                                       
November 23, 1994 have been designated "Predecessor Company" or the                                                               
"Predecessor" and periods subsequent to November 23, 1994 have been designated                                                    
"Reorganized Company" or the "Company". Selected balance sheet and statement of                                                   
income (loss) data of the Predecessor Company periods are not comparable to                                                       
those of the Reorganized Company periods and a line has been drawn in the tables                                                  
to separate the Predecessor financial data from the Company financial data.                                                       

     The following data presents (i) selected financial data of the Reorganized                                                   
Company as of and for the three month periods ended March 31, 1996 and March 31,                                                  
1995, for the year ended December 31, 1995, as of December 31, 1994 and for the                                                   
period from November 24, 1994 to December 31, 1994 and (ii) selected financial                                                    
data of the Predecessor Company for the period from January 1, 1994 to November                                                   
23, 1994, as of December 31, 1991, December 31, 1992 and December 31, 1993 and                                                    
for each of the three years in the period ended December 31, 1993. Operating                                                      
results for the three months ended March 31, 1996 are not necessarily indicative                                                  
of the results that may be expected for the entire year ended December 31, 1996.                                                  
The information below should be read in conjunction with the "Information                                                         
Concerning Great Bay -- Management's Discussion and Analysis of Financial                                                         
Condition and Results of Operations" and Great Bay financial statements,                                                          
including the notes thereto, contained elsewhere in this Proxy                                                                    
Statement/Prospectus.                                                                                                             

                      SELECTED FINANCIAL DATA OF GREAT BAY                                                                        
                             (DOLLARS IN THOUSANDS)                                                                               



                                           REORGANIZED COMPANY                                 PREDECESSOR COMPANY                
                            --------------------------------------------------   ------------------------------------------------ 
                            FOR THE THREE MONTHS   FOR THE YEAR   NOVEMBER 24     JANUARY 1                                       
                              ENDED MARCH 31,         ENDED            TO             TO        FOR THE YEARS ENDED DECEMBER 31,  
                            --------------------   DECEMBER 31,   DECEMBER 31,   NOVEMBER 23,   --------------------------------- 
                              1996        1995         1995           1994           1994         1993        1992         1991   
                            ---------   --------   ------------   ------------   ------------   ---------   --------     -------- 
                                                                                                                                  
INCOME STATEMENT DATA:                                                                                                            
Operating Revenues........   $ 6,891     $ 7,781     $ 24,524       $   3,129      $  13,989     $ 24,620   $ 23,027     $ 20,919 
Fuel, Operation and                                                                                                               
  Maintenance.............     5,775       6,205       24,899           2,409         21,762       22,991     26,823       27,896 
Net (Loss) Income.........    (1,017 )       560       (6,059)            182        131,385       (9,433)   (47,468)(2)  (19,792)

                                                        [Enlarge/Download Table]

                                                                                  DECEMBER 31,                                  
                                 MARCH 31,        ----------------------------------------------------------------------------- 
                                    1996              1995           1994                        1993        1992        1991   
                             ------------------   ------------   ------------                  ---------   ---------   -------- 
                                                                                                                                
BALANCE SHEET DATA:                                                                                                             
Cash & Cash Equivalents....         16,743            16,469          22,217                         138       4,817        133 
Working Capital(1).........         22,557            20,516          27,169                    (289,585)   (284,819)  (160,756)
Total Assets...............        140,103           138,771         145,666                     324,590     333,758    359,058 
Decommissioning                                                                                                                 
  Liability................         50,789            50,899          48,530                          --          --         -- 
Capitalization:                                                                                                                 
  Long-Term Debt (excluding                                                                                                     
    current                                                                                                                     
    maturities)(1).........             --                 0               0                           0           0    180,000 
  Common Equity............         82,216            82,223          88,292                    (139,783)   (130,350)   (82,882)
  Cumulative Convertible                                                                                                        
    Preferred Stock........             --                                                        63,090      63,090     63,090 
Total Capitalization.......         82,216            82,233          88,292                     (76,693)    (67,260)   160,208 
<FN>                                                                                                                            

---------------                                                                                                                 
(1) As a result of Predecessor's bankruptcy filing, the Predecessor was in                                                      
    default under the indenture pursuant to which the secured notes were issued.                                                
    Long-Term Debt of the Predecessor was thereafter classified as a current                                                    
    liability subject to compromise.                                                                                            

(2) In 1992, the Predecessor Company reversed all accumulated tax benefits                                                      
    related to carryforwards of net operating losses and alternative minimum tax                                                
    credits to reflect the anticipated imposition of certain tax law limitations                                                
    and the impact of certain settlement agreements between the Predecessor                                                     
    Company and Eastern Utilities Associates ("EUA").                                                                           

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GREAT BAY COMMON STOCK
MARKET PRICE INFORMATION

   From January 27, 1995 to April 17, 1995, Great Bay Common Stock traded on
the Nasdaq over-the-counter market and was quoted on the Nasdaq OTC Bulletin    
Board. Transfers occurred infrequently and at a low volume level. During this   
period, the low and high prices at which transactions in Great Bay Common Stock 
occurred on the Nasdaq OTC Bulletin Board were $7.12 and $9.00 per share,       
respectively. These prices may have reflected inter-dealer prices, without      
retail mark-ups, mark-downs or commissions, and may not have necessarily        
represented actual transactions.                                                

                                                        [Enlarge/Download Table]
     Great Bay Common Stock commenced trading on the Nasdaq National Market           
("NNM") on April 18, 1995 under the symbol "GBPW." Following are the reported         
high and low sales prices of Great Bay Common Stock on the NNM as reported daily      
in the Wall Street Journal for each quarter since the Great Bay Common Stock          
commenced trading on the NNM:                                                         


                                                                   HIGH          LOW  
                                                                   ----          ---  
                                                                                      
          1995                                                                        
          ----                                                                        
          Second quarter (beginning April 18, 1995)..............  9 3/4         7    
          Third quarter..........................................  9             7 3/4
          Fourth quarter.........................................  9 1/4         6 3/4

          1996                                                                        
          ----                                                                        
          First quarter..........................................  8 3/4         6 3/4
          Second quarter (through May 23, 1996)..................  8 3/4         7 1/2

   As of May 3, 1996, Great Bay had 24 holders of record of Great Bay Common
Stock.                                                                          

Great Bay has never paid cash dividends on the Great Bay Common Stock.
Holding Company currently expects that it will retain all of its future earnings
and does not anticipate paying a dividend in the foreseeable future.            

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RISK FACTORS

    An investment in the shares of Holding Company Common Stock offered hereby
involves a high degree of risk. The following factors, in addition to the other 
information contained in this Proxy Statement/Prospectus, should be carefully   
considered by shareholders of Great Bay in evaluating whether to approve the    
Merger Agreement and become holders of Holding Company Common Stock. The        
following risk factors apply to Great Bay and its business and operations. If   
the Merger is consummated, these risk factors will apply equally to Holding     
Company in that following the Merger Holding Company's primary asset will be its
ownership of the equity of Great Bay.                                           

RISKS RELATING TO GREAT BAY                                                     

  Ownership of Single Asset.  Great Bay owns a single principal asset, its
12.1% joint interest in the Seabrook Nuclear Power Project in Seabrook, New     
Hampshire. Accordingly, Great Bay's results of operations are completely        
dependent upon the successful and continued operation of the Seabrook Project.  
In particular, if the Seabrook Project experiences unscheduled outages of       
significant duration, Great Bay's results of operations will be materially      
adversely affected.                                                             

History of Losses; Implementation of Business Strategy.  Great Bay has
never reported an operating profit since its incorporation. Great Bay's business
strategy is to seek purchasers for its share of the Seabrook Project electricity
output at prices, either in the short-term market or pursuant to medium or      
long-term contracts, significantly in excess of the prices currently available  
in the short-term wholesale electricity market since sales at current short-term
rates do not result in sufficient revenue to enable Great Bay to meet its cash  
requirements for operations, maintenance and capital related costs. Great Bay's 
ability to obtain such higher prices will depend on regional, national and      
worldwide energy supply and demand factors which are beyond the control of Great
Bay. There can be no assurance that Great Bay ever will be able to sell power at
prices that will enable it to meet its cash requirements.                       

Liquidity Needs.  As of December 31, 1995, Great Bay had approximately
$16.5 million in cash, cash equivalents and short-term investments. Great Bay   
believes that such cash, together with the anticipated proceeds from the sale of
electricity by Great Bay, will be sufficient to enable Great Bay to meet its    
cash requirements until the prices at which Great Bay can sell its electricity  
increase sufficiently to enable Great Bay to cover its annual cash requirements.
However, if the Seabrook Project operates at a capacity factor below historical 
levels, or if expenses associated with the ownership or operation of the        
Seabrook Project, including without limitation decommissioning costs, are       
materially higher than anticipated, or if the prices at which Great Bay is able 
to sell its share of the Seabrook Project electricity do not increase at the    
rates and within the time expected by Great Bay, Great Bay would be required to 
raise additional capital, either through a debt financing or an equity          
financing, to meet its ongoing cash requirements. There is no assurance that    
Great Bay would be able to raise such capital or that the terms on which any    
additional capital is available would be acceptable. If additional funds are    
raised by the issuance of equity securities, dilution to then existing          
shareholders could result.                                                      

Changes in Power Sale Contract Terms Available in Wholesale Power     
Market.  In the past, wholesale sellers of electric power, which typically were 
regulated electric utilities, frequently entered into medium or long-term power 
sale contracts providing for prices in excess of the prices available in the    
short-term market. Recently, increased competition in the wholesale electric    
power market, reduced growth in the demand for electricity and low prices in the
short-term market have reduced the willingness of wholesale power purchasers to 
enter into medium or long-term contracts and have reduced the prices obtainable 
from such contracts.                                                            

     Risks in Connection with Joint Ownership of Seabrook Project.  Great Bay is
required under the Agreement for Joint Ownership, Construction and Operation of 
New Hampshire Nuclear Units dated May 1, 1973, as amended, by and among Great   
Bay and the other 10 utility companies who are owners of the Seabrook Project   
(the "JOA"), to pay its share of Seabrook Unit 1 and Seabrook Unit 2 expenses,  
including without limitation operations and maintenance expenses, construction  
and nuclear fuel expenditures and decommissioning costs, regardless of the level
of Seabrook Unit 1's operations. Under certain circumstances, a failure by Great
Bay to make its monthly payments under the JOA entitles certain other joint     
owners of the Seabrook Project to purchase Great Bay's interest in the Seabrook 
Project for 75% of the then fair market value thereof.                          

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   In addition, the failure to make monthly payments under the JOA by owners
of the Seabrook Project other than Great Bay may have a material adverse effect 
on Great Bay by causing Great Bay to pay a greater proportion of the Seabrook   
Unit 1 and Seabrook Unit 2 expenses in order to preserve the value of its share 
of the Seabrook Project.                                                        

    The Seabrook Project is owned by Great Bay and the other owners thereof as
tenants in common, with the various owners holding varying ownership shares.    
This means that Great Bay, which owns only a 12.1% interest, does not have      
control of the management of the'Seabrook Project. As a result, decisions may be
made affecting the Seabrook Project, notwithstanding Great Bay's opposition.    

   Certain costs and expenses of operating the Seabrook Project or owning an
interest therein, such as certain insurance and decommissioning costs, are      
subject to increase or retroactive adjustment based on factors beyond Great     
Bay's control. The cost of disposing of Unit 2 of the Seabrook Project is not   
known at this time. These various costs and expenses may adversely affect Great 
Bay, possibly materially.                                                       

Extensive Government Regulation.  The Seabrook Project is subject to  
extensive regulation by federal and state agencies. In particular, the Seabrook 
Project and Great Bay, as part owner of a licensed nuclear facility, are subject
to the broad jurisdiction of the NRC, which is empowered to authorize the       
siting, construction and operation of nuclear reactors after consideration of   
public health and safety, environmental and antitrust matters. Great Bay is also
subject to the jurisdiction of the FERC and, as a result, is required to file   
with FERC all contracts for the sale of electricity. FERC has the authority to  
suspend the rates at which Great Bay proposes to sell power, to allow such rates
to go into effect subject to refund and to modify a proposed or existing rate if
FERC determines that such rate is not "just and reasonable." FERC's jurisdiction
also includes, among other things, the sale, lease, merger, consolidation or    
other disposition of facilities, interconnection of certain facilities,         
accounts, service and property records. Compliance with the various requirements
of the NRC and FERC is expensive. Noncompliance with NRC requirements may       
result, among other things, in a shutdown of the Seabrook Project.              

    The NRC has promulgated a broad range of regulations affecting all aspects
of the design, construction and operation of a nuclear facility, such as the    
Seabrook Project, including performance of nuclear safety systems, fire         
protection, emergency response planning and notification systems, insurance and 
quality assurance. The NRC retains authority to modify, suspend or withdraw     
operating licenses, such as that pursuant to which the Seabrook Project         
operates, at any time that conditions warrant. The NRC might order Seabrook Unit
1 to shut down, if, among other reasons, (i) flaws were discovered in the       
construction or design of Seabrook Unit 1, (ii) operations of Seabrook Unit 1   
failed to comply with applicable safety and operating requirements, (iii)       
problems developed with respect to other nuclear generating plants of a design  
and construction similar to Unit 1, or (iv) accidents at other nuclear          
facilities suggested that nuclear generating plants generally were less safe    
than previously believed.                                                       

Great Bay is also subject to the New Hampshire public utility law and 
regulations of the NHPUC which affect, among other things, the issuance of      
securities, transfer of utility property and contracts with affiliates as well  
as the sale, lease, merger, consolidation or other disposition of facilities.   
The NHPUC does not regulate wholesale electricity rates.                        

Risk of Nuclear Accident.  Nuclear reactors have been used to generate
electric power for more than 30 years and there are currently more than 100     
nuclear reactors used for electric power generation in the United States.       
Although the safety record of such nuclear reactors in the United States        
generally has been very good, accidents and other unforeseen problems have      
occurred both in the United States and elsewhere, including the well-publicized 
incidents at Three Mile Island in Pennsylvania and Chernobyl in the former      
Soviet Union. The consequences of such an accident can be severe, including loss
of life and property damage, and the available insurance coverage may not be    
sufficient to pay all the damages incurred.                                     

Public Controversy Concerning Nuclear Power Plants.  Substantial      
controversy has existed for some time concerning nuclear generating plants and  
over the years such opposition has led to construction delays, cost overruns,   
licensing delays, demonstrations and other difficulties. The Seabrook Project   
was the subject of significant public controversy during its construction and   
licensing and remains controversial. An increase in public concerns regarding   
the Seabrook Project or nuclear power in general could adversely affect the     

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operating license of Seabrook Unit 1. While Great Bay cannot predict the        
ultimate effect of such controversy, it is possible that it could result in a   
premature shutdown of the unit.                                                 

   Waste Disposal; Decommissioning Cost.  There has been considerable public
concern and regulatory attention focused upon the disposal of low- and          
high-level nuclear wastes produced at nuclear facilities and the ultimate       
decommissioning of such facilities. As to waste disposal concerns, both the     
federal government and the State of New Hampshire are currently delinquent in   
the performance of their statutory obligations. This has necessitated on-site   
storage of low-level wastes at the Seabrook Project. Although low-level wastes  
("LLW") storage facilities in Utah and South Carolina became available in 1995, 
certain LLW continue to be stored on-site at the Seabrook Project. The Seabrook 
Project anticipates increasing its on-site storage capacity for low-level wastes
in 1996. The increased capacity is expected to be sufficient through 2006. In   
addition, the Managing Agent of the Seabrook Project has advised Great Bay that 
the Seabrook Project has adequate on-site storage capacity for high-level wastes
until approximately 2010.                                                       

As to decommissioning, the NRC regulations require that upon permanent
shutdown of a nuclear facility, appropriate arrangements for full               
decontamination and decommissioning of the facility be made. These regulations  
include a requirement to set aside during operation sufficient funds to defray  
decommissioning costs. While the owners of the Seabrook Project are accumulating
a trust fund to defray decommissioning costs, these costs could substantially   
exceed the value of the trust fund, and the owners (including Great Bay) would  
remain liable for the excess. Moreover, the amount that is required to be       
deposited in the trust fund is subject to periodic review and adjustment by an  
independent commission of the State of New Hampshire, which could result in     
material increases in such amounts. Such a review is currently in process.      

Intense Competition.  Great Bay sells its share of Seabrook Project   
electricity primarily into the Northeast United States wholesale electricity    
market. There are a large number of suppliers to this market and competition is 
intense. A primary source of competition comes from traditional utilities, many 
of which presently have excess capacity. In addition, non-utility wholesale     
generators of electricity, such as Independent Power Producers ("IPPs"),        
Qualifying Facilities ("QFs") and EWGs, as well as power marketers and brokers, 
actively sell electricity in this market. Great Bay may face increased          
competition, primarily based on price, from all such sources in the future.     

Volume of Sales of Stock; Possible Volatility of Share Price; Lack of 
Dividends.  Since trading began in Great Bay Common Stock on the NNM in April   
1995, the trading volume has been low, averaging 19,300 shares per week through 
April 30, 1996. Market prices for securities of companies such as Holding       
Company are highly volatile. Factors such as fluctuations in energy prices,     
unscheduled outages at the Seabrook Project, events at the Seabrook Project or  
other nuclear reactors, the terms of power sales contracts entered into by Great
Bay and market conditions for utility stocks in general could have a significant
impact on the future market price of the Holding Company Common Stock. No       
dividends have been paid on the Great Bay Common Stock and, subject to the      
consummation of the Merger, Holding Company does not anticipate paying dividends
on the Holding Company Common Stock in the foreseeable future.                  

    Antitakeover Provisions.  The Holding Company Certificate of Incorporation
requires that any action required or permitted to be taken by the stockholders  
of Holding Company must be effected at a duly called annual or special meeting  
of stockholders and may not be effected by any consent in writing. Special      
meetings of the stockholders of Holding Company may be called only by the       
Chairman of the Board of Directors, the Chief Executive Officer (or if there is 
no Chief Executive Officer, the President) or the Board of Directors. The       
affirmative vote of the holders of 75% of the shares of capital stock of Holding
Company issued and outstanding and entitled to vote is required to amend or     
repeal these provisions. In addition, the Board of Directors of Holding Company 
has the authority, without further action by the stockholders, to fix the rights
and preferences of, and issue shares of, Preferred Stock. These provisions, as  
well as other provisions of the Certificate of Incorporation and the By-Laws of 
Holding Company may have the effect of deterring hostile takeovers or delaying  
or preventing changes in control or management of Holding Company, including    
transactions in which stockholders might otherwise receive a premium for their  
shares over then current market prices. In addition, these provisions may limit 
the ability of stockholders to approve transactions that they may deem to be in 
their best interests. See "Comparison of Stockholder Rights."                   

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RISKS RELATED TO HOLDING COMPANY.                                               

   In contrast with Great Bay, the activities of Holding Company will not be
subject to the extensive government regulation related to public utilities and  
licensed nuclear facilities. Thus, Holding Company will not receive the benefit 
of the scrutiny by federal and state agencies that Great Bay receives. In       
addition, Holding Company may pursue activities with a greater business risk    
that those associated with a regulated entity such as Great Bay. Depending on   
the success of any new activities that Holding Company determines to pursue, it 
is possible that Holding Company's earnings per share and dividends, if any,    
might be lower than if Holding Company did not pursue such activities.          

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THE SPECIAL MEETING 

GENERAL                                                                         

   The Special Meeting of shareholders of Great Bay will be held on Tuesday,
July 2, 1996 at the offices of Hale and Dorr, 60 State Street, Boston,          
Massachusetts, beginning at 10:00 a.m., local time, and at any adjournments or  
postponements thereof.                                                          

   This Proxy Statement/Prospectus serves as a Prospectus of Holding Company
with respect to the shares of Holding Company Common Stock to be issued pursuant
to the proposed Merger, which Prospectus is part of a Registration Statement on 
Form S-4 filed by Holding Company with the Commission under the Securities Act. 

This Proxy Statement/Prospectus also serves as the proxy statement in 
connection with the solicitation of proxies by the Great Bay Board for use at   
the Special Meeting. This Proxy Statement/Prospectus is accompanied by a form of
proxy for use at the Special Meeting.                                           

MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING; RECOMMENDATION OF THE GREAT BAY
BOARD                                                                           

At the Special Meeting, the shareholders of Great Bay will be asked to
approve the Merger Agreement and the Holding Company Stock Option Plan and to   
transact such other business as may properly come before the Special Meeting and
any adjournments or postponements thereof. The Great Bay Board is not presently 
aware of any such other business.                                               

   The Great Bay Board has unanimously approved the Merger Agreement and the
Holding Company Stock Option Plan, subject to shareholder approval, and believes
the Merger contemplated by the Merger Agreement and the adoption of the Holding 
Company Stock Option Plan are in the best interests of Great Bay and its        
shareholders. THE BOARD OF DIRECTORS OF GREAT BAY RECOMMENDS THAT GREAT BAY     
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT AND OF THE HOLDING   
COMPANY STOCK OPTION PLAN.                                                      

RECORD DATE; SHARES ENTITLED TO VOTE                                            

    Only holders of record of shares of Great Bay Common Stock as of the close
of business on May 3, 1996 are entitled to receive notice of, and to vote at,   
the Special Meeting and any adjournments or postponements thereof with respect  
to the approval of the Merger Agreement. At the close of business on the Record 
Date, there were 7,999,948 shares of Great Bay Common Stock outstanding, each of
which will be entitled to one vote on each matter properly submitted at the     
Special Meeting.                                                                

QUORUM; REQUIRED VOTE                                                           

  The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Great Bay Common Stock entitled to vote at the Special    
Meeting will be necessary to constitute a quorum for the transaction of         
business. Under New Hampshire Law and the Great Bay By-Laws, the approval of the
Merger Agreement requires the affirmative vote of the holders of a majority of  
the outstanding shares of Great Bay Common Stock.                               

Abstentions will be counted as present for the purposes of determining
whether a quorum is present but will not be counted as votes cast in favor of or
against the Merger Agreement. Because the vote on the Merger Agreement requires 
the approval of a majority of the votes entitled to be cast by the holders of   
the outstanding shares of Great Bay Common Stock, abstentions will have the same
effect as a negative vote on this proposal.                                     

As of the Record Date, there were outstanding and entitled to vote    
7,999,948 shares of Great Bay Common Stock. Accordingly, the Merger will be     
approved if the holders of 3,999,975 shares of Great Bay Common Stock approve   
the Merger Agreement. As of the Record Date, Great Bay's directors, executive   
officers, certain entities affiliated with Great Bay's directors and executive  
officers and the Elliott Group (as defined in "Security Ownership of Certain    
Beneficial Owners and Management of Great Bay" below) in the aggregate held,    
directly or indirectly, 4,453,030 shares of Great Bay Common Stock, or          
approximately 55.7% of the shares of Great Bay Common Stock outstanding as of   
such date. Each of the directors and executive officers of Great Bay and the    
members of the Elliott Group have indicated that they and their affiliates      
intend to vote their shares of Great Bay Common Stock in favor of the proposals 
to approve the Merger Agreement and the Holding Company Stock Option Plan,      
ensuring the approval of the Merger Agreement and the                           

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Holding Company Stock Option Plan by the Great Bay shareholders without regard  
to the votes of any other Great Bay shareholders.                               

VOTING AND REVOCATION OF PROXIES                                                

Shares of Great Bay Common Stock that are entitled to vote and are    
represented at the Special Meeting by properly executed proxies received prior  
to or at the Special Meeting and not revoked will be voted at the Special       
Meeting in accordance with the instructions indicated on such proxies. If a     
proxy is signed and returned without indicating any voting instructions, shares 
of Great Bay Common Stock represented by such proxy will be voted FOR the       
proposal to approve the Merger Agreement.                                       

    The Board of Directors of Great Bay is not currently aware of any business
to be acted upon at the Special Meeting other than as described herein. If,     
however, other matters are properly brought before the Special Meeting or any   
adjournments or postponements thereof, the persons appointed as proxies will    
have discretion to vote on such matters in accordance with their best judgment. 

    Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before the shares represented by such proxy are voted at  
the Special Meeting by (i) filing with the Secretary of Great Bay a written     
notice of such revocation bearing a later date than the proxy, (ii) duly        
executing a proxy relating to the same shares bearing a later date and          
delivering it to the Secretary of Great Bay before the taking of the vote at the
Special Meeting, or (iii) voting in person at the Special Meeting. Attendance at
the Special Meeting will not in and of itself constitute a revocation of a      
proxy. All written notices of revocation and other communications with respect  
to revocation of proxies should be addressed as follows: Great Bay Holdings     
Corp., Cocheco Falls Millworks, 100 Main Street, Dover, New Hampshire 03820,    
Attention: Frank W. Getman Jr., Secretary, and must be received before the      
taking of the vote at the Special Meeting.                                      

SOLICITATION OF PROXIES                                                         

   Great Bay will bear all expenses of this solicitation, including the cost
of preparing and mailing this Proxy Statement/Prospectus. In addition to        
solicitation by mail, directors, officers and employees of Great Bay, who will  
not be specifically compensated for such services but may be reimbursed for     
reasonable out-of-pocket expenses in connection with such solicitation, may     
solicit proxies from Great Bay shareholders personally or by telephone,         
telecopy, telegram or other means of communication. Great Bay will also arrange 
with custodians, nominees and fiduciaries for the forwarding of solicitation of 
proxy materials to the beneficial owners of shares held of record by such       
persons. Great Bay may reimburse such custodians, nominees and fiduciaries      
reasonable out-of-pocket expenses incurred in connection therewith.             

     SHAREHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH THEIR PROXY CARDS.

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-- PROPOSAL ONE --
------------------

THE MERGER

  The following discussion is not intended to be a complete summary of the
terms and provisions of the Merger Agreement and is qualified in its entirety by
reference to the full text of the Merger Agreement, a form of which is attached 
as Annex I hereto and is incorporated herein by reference.                      

REASONS FOR THE MERGER; RECOMMENDATION OF GREAT BAY BOARD                       

   The Great Bay Board unanimously approved the Merger Agreement, subject to
shareholder approval, at its meeting held on April 16, 1996. The Great Bay Board
believes that the consummation of the Merger is in the best interests of Great  
Bay and its shareholders. The purpose of the Merger is to create a holding      
company structure for the future conduct of business of Holding Company and     
Great Bay. In this structure, Holding Company will be the parent public company 
in which Great Bay shareholders will own equity and Great Bay will be a         
wholly-owned subsidiary.                                                        

 The Great Bay Board believes that attractive opportunities may exist to
enter new businesses or acquire existing businesses, both in energy related     
fields and in unrelated fields. Great Bay currently has no understandings,      
agreements or commitments for any acquisition. The Great Bay Board believes it  
is advisable to restructure Great Bay as a subsidiary of Holding Company because
Holding Company would be able to engage in business activities, through         
subsidiaries other than Great Bay, which Great Bay is currently prohibited from 
engaging in because of Great Bay's status as an EWG under the PUHCA.            

   As an EWG, Great Bay is limited to the generation and sale of electricity
from the Seabrook Project in the wholesale electricity market and activities    
incidental thereto. Holding Company will be able to engage in other business    
activities which may be related or unrelated to those of Great Bay. Great Bay is
also subject to regulation by the NHPUC as a New Hampshire public utility. Any  
financing transaction, except the issuance of short term debt for up to 10% of  
the value of Great Bay's net fixed assets, or issuance of securities by Great   
Bay, among other transactions, is subject to approval by the NHPUC. Following   
the consummation of the Merger, New Hampshire public utilities laws would not   
directly regulate the activities of Holding Company.                            

  The Great Bay Board also anticipates that the establishment of a holding
company structure may help insulate Holding Company and each of its subsidiaries
from the liabilities of the others. In addition, Holding Company is governed by 
Delaware corporate law, which is better developed (in terms of judicial         
interpretation and precedents) and is more widely known and understood by       
potential investors and other parties likely to have business dealings with     
Holding Company than New Hampshire corporate law which governs Great Bay.       

EFFECTIVE DATE OF THE MERGER                                                    

   Pursuant to the Merger Agreement and in accordance with the New Hampshire
Law, Transitory Subsidiary will be merged with and into Great Bay on the        
Effective Date. The Merger will become effective immediately upon the filing, in
accordance with the relevant provisions of the New Hampshire Law, of the        
Articles of Merger with the Secretary of State of New Hampshire.                

  The number of shares of Holding Company Common Stock to be issued on the
Effective Date will equal the number of shares of Great Bay Common Stock        
outstanding immediately prior thereto, less the number of Dissenting Shares.    

   The Articles of Merger will be filed on the date of the closing, which is
expected to occur as soon as practicable following the Special Meeting and the  
satisfaction or waiver of the other conditions in the Merger Agreement.         

STRUCTURE AND TERMS OF THE MERGER                                               

 Pursuant to the Merger Agreement, on the Effective Date, the Transitory
Subsidiary, a wholly-owned subsidiary of Holding Company, will merge with and   
into Great Bay. The separate existence of Transitory Subsidiary will cease on   
the Effective Date. Great Bay will survive the Merger as a wholly-owned         
subsidiary of Holding Company and will continue to be governed by the laws of   
the State of New Hampshire.                                                     

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  Upon the consummation of the Merger, each outstanding share of Great Bay
Common Stock as of the Record Date (other than any shares held in the treasury  
of Great Bay and Dissenting Shares), will cease to exist and will be converted  
into the right to receive one fully-paid and non-assessable share of Holding    
Company Common Stock. Shares of Holding Company Common Stock issued and         
outstanding immediately prior to the Effective Date which are held by Great Bay 
will cease to exist and will be cancelled, with the result being that the       
shareholders of Great Bay immediately prior to the Merger will become the       
stockholders of Holding Company.                                                

EMPLOYMENT AGREEMENTS TO BE ASSUMED BY HOLDING COMPANY                          

Great Bay is party to employment agreements with its two executive    
officers. Upon consummation of the Merger, Great Bay will assign these          
employment agreements to Holding Company and Holding Company will assume these  
employment agreements. See "Information Concerning Great Bay -- Employees."     

SUBSTITUTION OF GREAT BAY STOCK OPTIONS                                         

   If the Merger is consummated, at the Effective Date, each holder of Great
Bay Options under the Great Bay Stock Option Plan will be granted substitute    
options by Holding Company under the Holding Company Stock Option Plan to       
purchase an equal number of shares of Holding Company Common Stock on the same  
terms and conditions and at the same exercise price per share. The Holding      
Company Stock Option Plan is identical to the Great Bay Stock Option Plan. The  
term, exercisability, vesting schedule, status as an "incentive stock option"   
under the Code, if applicable, and all other terms of the substitute option will
be identical to those of the Great Bay Options. The substitution of Great Bay   
Options will not give the Optionholders additional benefits which they did not  
have immediately prior to the Effective Date, result in any acceleration of any 
vesting schedule for any Great Bay Option or relieve the Optionholders of any   
obligations or restrictions applicable to their options or the shares obtainable
upon exercise of the options. As of the Record Date, 375,000 shares of Great Bay
Common Stock were subject to outstanding Great Bay Options. If the Merger is    
consummated, the Great Bay Option Plan will be terminated. See "The Holding     
Company Stock Option Plan" for a summary of the Holding Company Stock Option    
Plan.                                                                           

ASSUMPTION OF THE PECO WARRANT                                                  

     Pursuant to the Merger Agreement and the provisions of the PECO Warrant, at
the Effective Date, the PECO Warrant will be assumed by Holding Company and will
automatically become a warrant representing the right to acquire an equal number
of shares of Holding Company Common Stock on the same terms and conditions and  
at the same exercise price per share.                                           

ASSUMPTION OF FACILITY LEASE                                                    

    Great Bay leases approximately 3,000 square feet of office space in Dover,
New Hampshire under a lease expiring in April 1999. Upon the consummation of the
Merger, Great Bay will assign this lease to Holding Company, and Holding Company
will assume this lease.                                                         

PROCEDURE FOR EXCHANGE OF CERTIFICATES                                          

     Pursuant to the Merger Agreement, promptly after the Effective Date Holding
Company will mail a form of letter of transmittal to holders of Great Bay Common
Stock, except for holders of Dissenting Shares, together with instructions for  
the exchange of such holder's certificates representing Great Bay Common Stock  
for certificates representing shares of Holding Company Common Stock. All       
shareholders of Great Bay are urged to exchange their stock certificates at the 
earliest possible date after receiving the letter of transmittal. Shareholders  
of Great Bay should not submit their stock certificates for exchange until they 
receive such letter of transmittal and instructions.                            

MANAGEMENT AND OPERATION AFTER THE MERGER                                       

  After the Effective Date, Great Bay will be a wholly-owned subsidiary of
Holding Company and will continue its business from its existing office         
location. After the Effective Date, the persons who are officers and directors  
of Great Bay immediately prior to the Effective Date will be the officers and   
directors of Holding Company and of Great Bay, without change, until their      
successors have been duly elected or appointed and qualified.                   

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CONDITIONS TO CONSUMMATION OF THE MERGER; AMENDMENT OR TERMINATION OF THE MERGER
AGREEMENT                                                                       

   The respective obligations of Holding Company and Great Bay to effect the
Merger are subject to the following conditions, among others: (a) the Merger    
Agreement will have been approved by the shareholders of Great Bay; (b) all     
Merger Regulatory Approvals will have been obtained; (c) the Registration       
Statement will have become effective and will not be the subject of a stop order
or proceedings seeking a stop order; (d) no temporary restraining order,        
preliminary or permanent injunction or other order will be in effect nor will   
there be any proceeding seeking any of the foregoing that prevents, or seeks to 
prevent, the consummation of the Merger; (e) no action will be taken, nor any   
statute, rule, regulation, or order enacted, entered, enforced or deemed        
applicable to the Merger which makes the consummation of the Merger illegal; and
(f) the shares of Holding Company Common Stock to be issued in the Merger will  
have been approved for quotation on the Nasdaq National Market. Unless waived by
Great Bay, it is a condition to the Merger that the number of shares of Great   
Bay Common Stock held by shareholders of Great Bay who properly exercise their  
dissenters' rights shall not exceed 20,000 shares as of the Effective Date.     

At any time before the Effective Date, notwithstanding approval of the
Merger Agreement by the shareholders of Great Bay, the Merger Agreement may be  
amended, modified, supplemented or terminated and the Merger may be abandoned by
action of the Great Bay Board; provided, however, that no such amendment,       
modification or supplement will affect the rights of the shareholders of Great  
Bay in a manner which is materially adverse to such shareholders in the judgment
of the Great Bay Board. The Great Bay Board will notify the Great Bay           
shareholders in writing of any amendment, modification or supplement to the     
Merger Agreement prior to the Effective Date which is materially adverse to the 
shareholders of Great Bay and allow such shareholders an opportunity to change  
their vote by providing the shareholders with an appropriate form of proxy to   
use to indicate such a change.                                                  

REGULATORY APPROVALS                                                            

If the Merger is approved by Great Bay's shareholders at the Special  
Meeting, the Merger is expected to become effective as soon thereafter as all   
Merger Regulatory Approvals have been obtained and the required Articles of     
Merger are filed. Great Bay has filed petitions with each of the NHPUC, FERC and
the NRC requesting the Merger Regulatory Approvals. Great Bay's petitions are   
presently pending before these agencies and Great Bay expects that it will      
receive decisions from each of the agencies by July 9, 1996. There is no        
assurance that the Merger Regulatory Approvals will be obtained. All expenses in
connection with the Merger will be paid by Great Bay whether or not the Merger  
is consummated.                                                                 

ACCOUNTING TREATMENT                                                            

 The Merger will be accounted for as a "pooling of interests of entities
under common control" and will result in the combination of the recorded book   
values of the assets, liabilities and shareholders' equity of Great Bay, Holding
Company and the Transitory Subsidiary. The Merger will not result in a material 
change to any of Great Bay's previously reported results.                       

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

   The following summary addresses the material United States federal income
tax consequences of the Merger to Great Bay shareholders. Nevertheless, this    
summary does not address all aspects of United States federal income taxation   
that may be relevant to Great Bay shareholders in light of their particular     
circumstances or to Great Bay shareholders that are subject to special treatment
under the federal income tax laws (such as dealers in securities, tax-exempt    
organizations, life insurance companies, financial institutions, partnerships   
and other pass-through entities, regulated investment companies, and foreign    
taxpayers). Additionally, this summary does not address the United States       
federal income tax considerations that may be relevant to holders of Great Bay  
options or warrants or to Great Bay shareholders that acquired their stock      
pursuant to the exercise of employee stock options or otherwise received their  
stock as compensation. Finally, this summary does not address any state, local, 
or foreign income tax considerations, or any federal, state, local, or foreign  
estate or gift tax considerations that may be relevant to Great Bay             
shareholders.                                                                   

   The following summary is based upon the opinion of Hale and Dorr, counsel
to Great Bay, of the Code, the applicable Treasury Regulations, judicial        
authority, and administrative rulings and practice, as in effect on             

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the date hereof. Nevertheless, the Internal Revenue Service is not precluded    
from adopting a contrary position. Moreover, there can be no assurance that     
future legislative, judicial, or administrative changes or interpretations will 
not adversely affect the accuracy of the statements and conclusions set forth   
herein. Any such changes or interpretations could be applied retroactively and  
could alter or affect the tax consequences of the Merger to Great Bay and the   
Great Bay shareholders.                                                         

  It is intended that the Merger will constitute a tax-free reorganization
with respect to Great Bay shareholders who receive shares of Holding Company    
Common Stock pursuant to the Merger Agreement. Hale and Dorr, counsel to Great  
Bay, has rendered an opinion to the effect that, under present United States    
federal income tax law: (i) the Merger will constitute a reorganization within  
the meaning of Section 368(a) of the Code; (ii) no gain or loss will be         
recognized by Great Bay or Holding Company as a result of the Merger; (iii) no  
gain or loss will be recognized by shareholders of Great Bay upon the conversion
of their shares of Great Bay Common Stock solely into shares of Holding Company 
Common Stock pursuant to the terms of the Merger; (iv) the tax basis of the     
shares of Holding Company Common Stock into which shares of Great Bay Common    
Stock are converted pursuant to the Merger will be the same as the basis of such
shares of Great Bay Common Stock; and (v) the holding period for shares of      
Holding Company Common Stock into which shares of Great Bay Common Stock are    
converted pursuant to the Merger will include the period that such shares of    
Great Bay Common Stock are held by the holder, provided that such shares are    
held as capital assets on the Effective Date of the Merger.                     

THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY.       
ACCORDINGLY, GREAT BAY SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS 
AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE        
APPLICABLE FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES TO THEM OF THE   
PROPOSED MERGER.                                                                

RESTRICTIONS ON RESALE OF HOLDING COMPANY COMMON STOCK RECEIVED IN THE MERGER;  
AFFILIATES                                                                      

  The shares of Holding Company Common Stock to be issued in the Merger to
the holders of Great Bay Common Stock pursuant to the Merger Agreement have been
registered under the Securities Act, thereby allowing such shares to be freely  
traded without restriction by persons who are not deemed to be "affiliates" of  
Holding Company or of Great Bay. For this purpose, the term "affiliate" means   
any person who, directly or indirectly, through one or more intermediaries,     
possesses the power to direct or cause the direction of management and policies 
of Great Bay or Holding Company, whether through the ownership of Great Bay or  
Holding Company Common Stock, by contract, or otherwise. Certain officers,      
directors and principal shareholders of Great Bay may be deemed to be affiliates
of Great Bay and thus "underwriters" within the meaning of Rule 145 under the   
Securities Act. Such persons will not be able to resell the Holding Company     
Common Stock received by them in the Merger except pursuant to an effective     
registration statement under the Securities Act or pursuant to an applicable    
exemption therefrom. All persons who may be deemed to be affiliates should      
carefully consider the limitations imposed by Rules 144 and 145 under the       
Securities Act prior to effecting resales of shares of Holding Company Common   
Stock.                                                                          

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RIGHTS OF DISSENTING SHAREHOLDERS 

   Under Sections 293-A:13.01-293-A:13.31 of the New Hampshire Law ("Chapter
293-A"), holders of Great Bay Common Stock are entitled to dissenters' rights   
with respect to the proposed Merger. Unless waived by Great Bay, it is a        
condition to the Merger that the number of shares of Great Bay Common Stock held
by shareholders of Great Bay who properly exercise their dissenters' rights     
shall not exceed 20,000 shares as of the effective date of the Merger.          

Subject to the consummation of the Merger, holders of Great Bay Common
Stock who hold such shares of record on the date of making a written demand for 
appraisal as described below, continuously hold such shares through the         
Effective Date and otherwise comply fully with the procedures set forth in      
Chapter 293-A will be entitled to receive from Great Bay payment of the "fair   
value" of their shares in cash, in lieu of obtaining shares of Holding Company  
Common Stock.                                                                   

   SHAREHOLDERS ELECTING TO EXERCISE DISSENTERS' RIGHTS MUST COMPLY STRICTLY
WITH THE PROCEDURES SET FORTH IN CHAPTER 293-A. FAILURE TO FOLLOW ANY SUCH      
PROCEDURE MAY RESULT IN A TERMINATION OR WAIVER OF DISSENTERS' RIGHTS UNDER     
CHAPTER 293-A.                                                                  

     The following discussion of the provisions of Chapter 293-A is not intended
to be a complete statement of its provisions and is qualified in its entirety by
reference to the full text of those sections, a copy of which is attached as    
Annex II hereto.                                                                

   Under Chapter 293-A, not less than ten days prior to the Special Meeting,
Great Bay is required to notify shareholders that they are or may be entitled to
assert dissenters' rights. This Proxy Statement/Prospectus constitutes notice to
holders of Great Bay Common Stock that dissenters' rights are available to them.

Under Chapter 293-A, a shareholder electing to exercise his or her    
dissenters' rights must deliver to Great Bay, before the vote on the Merger     
Agreement is taken, written notice of his or her intent to demand payment for   
his or her shares if the Merger is consummated. A WRITTEN NOTICE OF INTENT TO   
DEMAND PAYMENT SHOULD BE DELIVERED EITHER IN PERSON OR BY MAIL (CERTIFIED MAIL, 
RETURN RECEIPT REQUESTED, BEING THE RECOMMENDED FORM OF TRANSMITTAL) ON OR      
BEFORE 9:00 A.M. ON [DATE OF SPECIAL MEETING], 1996 TO GREAT BAY POWER          
CORPORATION, COCHECO FALLS MILLWORKS, 100 MAIN STREET, DOVER, NEW HAMPSHIRE     
03820, ATTENTION: FRANK W. GETMAN JR., SECRETARY.                               

  SHAREHOLDERS WHO WISH TO ASSERT DISSENTERS' RIGHTS AND MAKE A DEMAND FOR
PAYMENT MUST NOT VOTE THEIR SHARES IN FAVOR OF THE MERGER AGREEMENT.            
SHAREHOLDERS WHO VOTE THEIR SHARES IN FAVOR OF THE MERGER AGREEMENT IRREVOCABLY 
WAIVE THEIR DISSENTERS' RIGHTS. SHAREHOLDERS WHO WISH TO ASSERT DISSENTERS'     
RIGHTS ARE NOT REQUIRED TO VOTE AGAINST THE MERGER AGREEMENT TO PRESERVE        
DISSENTERS' RIGHTS.                                                             

If the Merger is consummated, then no later than ten days after the   
consummation of the Merger, Great Bay will send a written dissenters' notice    
(the "Notice") to all shareholders who delivered a written notice of intent to  
demand payment to Great Bay before the vote was taken and did not vote in favor 
of the Merger Agreement. The Notice will: (i) state where the payment demand    
will be sent and where and when certificates for shares will be deposited, (ii) 
supply a form for demanding payment that includes the date of the first         
announcement to the news media or to shareholders of the terms of the proposed  
Merger (the "Announcement Date") and requires that the person asserting         
dissenters' rights certify whether or not he or she acquired beneficial         
ownership of the shares before the Announcement Date, (iii) set a date by which 
Great Bay will receive the payment demand (which date will not be less than 30  
days nor more than 60 days after the date the Notice is delivered), and (iv)    
contain a copy of Chapter 293-A.                                                

Any holder of Great Bay Common Stock electing to exercise dissenters' 
rights must, after receiving the Notice, demand payment, certify whether he or  
she acquired beneficial ownership of the shares before the Announcement Date,   
and deposit his or her certificates in accordance with the terms of the Notice. 
A SHAREHOLDER WHO DOES NOT DEMAND PAYMENT OR DEPOSIT HIS OR HER SHARE           
CERTIFICATES WHERE REQUIRED, EACH BY THE DATE SET FORTH IN THE NOTICE, IS NOT   
ENTITLED TO RECEIVE PAYMENT FOR HIS OR HER SHARES UNDER CHAPTER 293-A.          

   Except as described below, the notice of intent to demand payment and the
written demand for payment must be made by or for the shareholder of record of  
the shares for which dissenters' rights are being asserted. Accordingly, such   
notice and demand should be executed by or for such shareholder of record, fully
and                                                                             

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correctly, as such shareholder's name appears on the certificate(s) formerly    
representing the shares. If shares are owned of record in a fiduciary capacity, 
such as by a trustee, guardian or custodian, execution of the notice of intent  
to demand payment and the demand for payment should be made in such capacity. If
shares are owned of record by more than one person, as in a joint tenancy or    
tenancy in common, the notice of intent to demand payment and the demand for    
payment should be executed by or for all joint owners.                          

     An authorized agent, including one of two or more joint owners, may execute
the notice of intent to demand payment and the demand for payment for a         
shareholder of record. However, the agent must identify the record owner or     
owners and must expressly disclose that, in executing the notice and the demand,
the agent is acting as agent for the record owner(s). A beneficial shareholder  
may assert dissenters' rights as to shares held on his or her behalf only if (i)
he or she submits to Great Bay the record owner's written consent to the dissent
not later than the time the beneficial shareholder asserts dissenters' rights,  
and (ii) he or she does so with respect to all shares of which he or she is the 
beneficial shareholder or over which he or she has power to direct the vote.    

Following the consummation of the Merger, or upon receipt of a payment
demand, Great Bay will pay each dissenter who complied with the provisions of   
Section 293-A:13.23 the amount Great Bay estimates to be the fair value of his  
or her shares, plus accrued interest. The payment will be accompanied by certain
financial information of Great Bay, a statement of Great Bay's estimate of the  
fair value of the shares, an explanation of how interest was calculated, a      
statement of the dissenter's right to demand payment if the shareholder is      
dissatisfied with payment and a copy of Chapter 293-A.                          

   Under Section 293-A:13.28, a dissenter may notify Great Bay in writing of
his or her own estimate of the fair value of his or her shares and amount of    
interest due and demand payment of his or her estimate, less any payment already
made by Great Bay, if: (i) the dissenter believes the amount paid by Great Bay  
was less than the fair value of his or her shares or that the interest due was  
incorrectly calculated, (ii) Great Bay fails to make payment for the shares     
within 60 days after the date set for demanding payment, or (iii) Great Bay,    
having failed to consummate the Merger, does not return the deposited           
certificates within 60 days after the date set for demanding payment. A         
DISSENTER WAIVES HIS OR HER RIGHT TO DEMAND PAYMENT UNDER CHAPTER 293-A:13.28   
UNLESS HE OR SHE NOTIFIES GREAT BAY OF HIS OR HER DEMAND IN WRITING WITHIN 30   
DAYS AFTER GREAT BAY MADE OR OFFERED PAYMENT FOR HIS OR HER SHARES.             

    If a demand for payment under Section 293-A:13.28 remains unsettled, Great
Bay will commence a proceeding within 60 days after receiving the payment demand
and petition the appropriate court to determine fair value of the shares and    
accrued interest. If Great Bay does not commence the proceeding within 60 days, 
it will pay each dissenter whose demand remains unsettled the amount demanded by
him or her, including interest.                                                 

   Great Bay will make all dissenters whose demands remain unsettled parties
to the proceeding and all parties will be served with a copy of the petition.   
Nonresidents may be served by registered or certified mail or by publication as 
provided by law. Each dissenter made a party to the proceeding is entitled to   
judgment for the amount, if any, by which the court finds the fair value of his 
or her shares, plus interest, exceeds the amount previously paid by Great Bay.  

The costs of the proceeding will be determined by the court, including
reasonable compensation and expenses of appraisers appointed by the court. The  
court will assess the costs against Great Bay, except that the court may assess 
costs against all or some dissenters who are parties, in the amounts the court  
finds equitable, to the extent the court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith in demanding payment under Section            
293-A:13.28. The court may also assess the fees and expenses of counsel and     
experts for the respective parties, in amounts the court finds equitable. If the
court finds that the services of counsel for any dissenter were of substantial  
benefit to other dissenters similarly situated, and that the fees for the       
services should not be assessed against Great Bay, the court may award to these 
counsel reasonable fees to be paid out of the amounts awarded to dissenters who 
were benefitted.                                                                

   SHAREHOLDERS OF GREAT BAY WHO EXERCISE DISSENTERS' RIGHTS WILL NOT BECOME
STOCKHOLDERS OF HOLDING COMPANY.                                                

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INFORMATION CONCERNING GREAT BAY

BUSINESS                                                                        

Great Bay is a public utility whose principal asset is a 12.1% joint  
ownership interest in the Seabrook Project in Seabrook, New Hampshire. Great Bay
was incorporated in New Hampshire in 1986 and was formerly known as EUA Power   
Corporation. Great Bay sells its share of the electricity output of the Seabrook
Project in the wholesale electricity market, primarily in the Northeast United  
States. Great Bay does not have operational responsibility for the Seabrook     
Project. Great Bay's share of the Seabrook Project capacity is approximately 140
MW. Great Bay currently sells all but 10 MW of its share of the Seabrook Project
capacity in the Short-Term Market. If the Merger is consummated, Great Bay will 
continue its business and operations as a wholly-owned subsidiary of Holding    
Company. See "The Merger -- Structure and Terms of the Merger."                 

The Seabrook Project                                                  

The Seabrook Project is located on an 896-acre site in Seabrook, New  
Hampshire. It is owned by Great Bay and ten other utility companies, consisting 
of North Atlantic Energy Company, Connecticut Light and Power, the United       
Illuminating Company, Canal Electric Company, Massachusetts Municipal Wholesale 
Electric Company, Montaup Electric Company, New England Power Company, New      
Hampshire Electric Cooperative, Inc., Taunton Municipal Lighting Plant and      
Hudson Light & Power Department (together with Great Bay, the "Participants").  

   Seabrook Unit 1 is a 1,150-MW nuclear-fueled steam electricity generating
station. It employs a four loop, pressurized water reactor and support auxiliary
systems designed by the Westinghouse Electric Company. The reactor is housed in 
a steel-lined reinforced concrete containment structure and a concrete          
containment enclosure structure. Reactor cooling water is obtained from the     
Atlantic Ocean through a 17,000-foot-long intake tunnel and returned through a  
16,500-foot-long discharge tunnel. The station has a remaining expected service 
life of 30 years. Seabrook Unit 1 transmits its generated power to the New      
England 345 kilovolt transmission grid, a major network of interconnecting lines
covering New England, through three separate transmission lines emanating from  
the station. On March 15, 1990, the Participants received from the NRC a full   
power operating license which authorizes operation of Seabrook Unit 1 until     
October 2026. Commercial operation of Seabrook Unit 1 commenced on August 19,   
1990. Management believes that Seabrook Unit 1 is in good condition.            

Since the Seabrook Project was originally designed to consist of two  
generating units, Great Bay also owns a 12.1% joint ownership interest in       
Seabrook Unit 2, to which it has assigned no value. On November 6, 1986, the    
joint owners of the Seabrook Project, recognizing that Seabrook Unit 2 had been 
canceled in 1984, voted to dispose of Unit 2. Certain assets of Seabrook Unit 2 
have been and are being sold from time to time to third parties. The            
Participants are currently considering plans regarding disposition of Seabrook  
Unit 2, but such plans have not yet been finalized and approved. Great Bay is   
unable to estimate the costs for which it will be responsible in connection with
the disposition of Seabrook Unit 2. Because Seabrook Unit 2 was never completed 
or operated, costs associated with its disposition will not include any amounts 
for decommissioning. Great Bay currently pays its share of monthly expenses     
required to preserve and protect the value of the Seabrook Unit 2 components. On
May 23, 1996, Great Bay and the joint owners of the Seabrook Project announced a
proposed transaction for the sale of two steam generators from Seabrook Unit 2. 
If this sale is completed, Great Bay will receive approximately $7,000,000 in   
cash. Great Bay had previously written off its investment in Unit 2 and will    
recognize a gain from this sale.                                                

Joint Ownership of Seabrook                                           

Great Bay and the other Participants are parties to the JOA which     
establishes the respective ownership interests of the Participants in the       
Seabrook Project and defines their responsibilities with respect to the ongoing 
operation, maintenance and decommissioning of the Seabrook Project. In general, 
all ongoing costs of the Seabrook Project other than taxes are divided          
proportionately among the Participants in accordance with their ownership       
interests in the Seabrook Project. Each Participant is only liable for its share
of the Seabrook Project's costs and not liable for any other Participant's      
share. Great Bay's joint ownership interest of 12.1% is the third largest       
interest among the Participants, exceeded only by the approximately 40% interest
held by Northeast Utilities and its affiliates and the 17.5% interest held by   
The United Illuminating Company.                                                

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    A Participant may sell any portion of its ownership interest to any entity
that is engaged in the electric utility business in New England. Before such    
sale, however, such selling Participant must give certain other Participants the
right of first refusal to purchase the interest on the same terms. Any          
Participant may transfer, free from the foregoing right of first refusal, any   
portion of its interest (a) to a wholly-owned subsidiary, (b) to another company
in the same holding company system or a construction trust for the benefit of   
the transferor or another company in the same holding company system, or (c) in 
connection with a merger, consolidation or acquisition of the assets of such    
Participant.                                                                    

  The JOA provides for a Managing Agent to carry out the daily operational
and management responsibilities of the Seabrook Project. The current Managing   
Agent (the "Managing Agent"), appointed by certain of the Participants on June  
29, 1992, is North Atlantic Energy Service Corporation ("NAESCO"), a            
wholly-owned subsidiary of Northeast Utilities. Northeast Utilities, in         
conjunction with certain of its affiliates, holds the largest joint ownership   
interest, as described above. Certain material decisions regarding the Seabrook 
Project are made by an Executive Committee consisting of the chief executive    
officers of certain of the Participants or their designees. There are currently 
five members of the Executive Committee. The Executive Committee acts by        
majority vote of its members, although any action of the Executive Committee may
be modified by vote of 51% of the ownership interests. Great Bay does not have a
representative on the Executive Committee. Under the JOA, the appointment of the
managing agent of the Seabrook Project may only be made by a majority in        
interest of the Participants.                                                   

Recent Developments                                                   

    On June 5, 1996, the Great Bay Board authorized Great Bay to repurchase up
to an aggregate of 140,000 shares of Great Bay Common Stock on the open market  
or in negotiated transactions.                                                  

Bankruptcy Proceeding and Reorganization                              

     Great Bay filed a voluntary petition for reorganization under Chapter 11 of
the United States Bankruptcy Code (the "Bankruptcy Code") in the United States  
Bankruptcy Court for the District of New Hampshire (the "Bankruptcy Court") on  
February 28, 1991. It conducted its business as a Debtor in Possession until    
November 23, 1994, at which time Great Bay's Amended Bankruptcy Plan became     
effective and Great Bay emerged from Chapter 11. Financing for the Amended      
Bankruptcy Plan was provided by affiliates of Omega Advisors, Inc. and by       
Elliott Associates, L.P. (collectively, the "Investors"). At the time Great Bay 
emerged from Chapter 11, the Investors purchased 4,800,000 shares of Great Bay's
Common Stock for $35,000,000.                                                   

Current Business                                                      

     The business of Great Bay consists of the management of its joint ownership
interest in the Seabrook Project and the sale in the wholesale power market of  
its share of electricity produced by the Seabrook Project. Great Bay does not   
have operational responsibility for the Seabrook Project. To date, Great Bay has
entered into one long-term power contract for approximately 10 MW of Great Bay's
share of the Seabrook Project capacity. Great Bay's business strategy is to seek
purchasers, either in the short-term market or pursuant to medium or long-term  
contracts, for its share of the Seabrook Project electricity output at prices in
excess of the prices currently available in the short-term market since sales at
current short-term prices result in revenues which are less than Great Bay's    
cash requirements for operations, maintenance and capital expenditures.         

Marketing                                                             

Great Bay and PECO Energy Company ("PECO") entered into a Services    
Agreement dated as of November 3, 1995 (the "PECO Services Agreement"), pursuant
to which PECO was appointed as Great Bay's exclusive agent to market and sell   
Great Bay's uncommitted portion of electricity generated by the Seabrook        
Project. Proceeds from the sale of Great Bay's electricity together with        
reservation fees payable by PECO to Great Bay will be shared between Great Bay  
and PECO in accordance with formulas set forth in the PECO Services Agreement.  

    The PECO Services Agreement became effective on December 31, 1995, and has
an initial term of two years. The term will be automatically extended for one   
additional year (to December 31, 1998) if PECO exercises the PECO Warrant to    
purchase the shares of Great Bay Common Stock, described below. At any          

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time prior to the Warrant Expiration Date (as defined below), Great Bay is      
entitled to terminate the PECO Services Agreement; however, if the PECO Services
Agreement is so terminated, Great Bay will be required to refund to PECO the    
$1,000,000 purchase price for the Warrant plus interest.                        

    At the time that Great Bay entered into the PECO Services Agreement, Great
Bay and PECO entered into a Warrant Purchase Agreement, dated November 3, 1995  
(the "PECO Warrant Purchase Agreement"), pursuant to which on February 15, 1996,
PECO purchased the PECO Warrant from Great Bay for $1,000,000. The PECO Warrant 
entitles PECO to purchase 420,000 shares of Great Bay's Common Stock at an      
exercise price of the higher of (1) $9.75 per share, or (2) the highest trading 
price per share of Great Bay's Common Stock prior to the Warrant Expiration     
Date. The $1,000,000 purchase price for the PECO Warrant will be credited toward
the aggregate exercise price of the PECO Warrant upon exercise. If PECO does not
exercise the PECO Warrant, the purchase price for the PECO Warrant is wholly or 
partially refundable only if Great Bay terminates the PECO Services Agreement   
for convenience prior to the Warrant Expiration Date or if PECO exercises       
certain of its rights to terminate the PECO Services Agreement. The PECO Warrant
expires on September 30, 1996 (the "Warrant Expiration Date") unless extended   
because the Seabrook Project fails to maintain a 60% capacity factor for the    
first 9 months of 1996, in which case the Warrant Expiration Date will be       
extended until the earlier of such time as the Seabrook Project's rolling       
12-month capacity factor equals or exceeds 60% or December 31, 1997. The        
Seabrook Project's rolling nine-month capacity factor for the period from August
1, 1995 through April 30, 1996 was 79%. The Seabrook Project's capacity factor  
for the four-month period from January 1, 1996 through April 30, 1996 was 89.6%.

From November 23, 1994 to December 31, 1995, UNITIL Resources, Inc.   
("URI"), a wholly owned subsidiary of UNITIL Company ("UNITIL") marketed Great  
Bay's energy. Great Bay paid URI commissions for sales of power plus            
reimbursement for URI's time. The amount of the commission varied based on the  
length of the power sale contracts and prices obtained. For the year ended      
December 31, 1995, Great Bay paid $333,138 for services rendered pursuant to    
this marketing agreement with URI. The marketing agreement with URI terminated  
as of December 31, 1995.                                                        

     Great Bay currently sells most of its power to utility companies located in
the Northeast United States in the short-term wholesale power market. Great Bay 
is currently not dependent on any single customer because many utilities and    
marketers are willing to buy Great Bay's share of electricity from the Seabrook 
Project at substantially the same price. Prices in the short-term market are    
typically higher during the summer and winter because the demand for electrical 
power is higher during these periods in the Northeast United States. Sales of   
power to UNITIL Power Corporation ("UNITIL Power"), a wholly owned subsidiary of
UNITIL, accounted for more than 10% of Great Bay's revenues during 1995. See    
"Power Purchase Agreements."                                                    

Power Purchase Agreements                                             

   Great Bay is a party to a power agreement, dated as of April 1, 1993 (the
"UNITIL Power Purchase Agreement"), with UNITIL Power which provides for Great  
Bay to sell to UNITIL Power approximately 10 MW of power. The UNITIL Power      
Purchase Agreement commenced on May 1, 1993 and runs through October 31, 2010.  
During the first year of this term, the price of power under the UNITIL Power   
Purchase Agreement was 5.0 cents per kilowatt-hour ("kWh"). Thereafter, the     
price is subject to increase in accordance with a formula which provides for    
adjustments at less than the actual rate of inflation. UNITIL Power has an      
option to extend the UNITIL Power Purchase Agreement for an additional 12 years 
until 2022.                                                                     

The UNITIL Power Purchase Agreement is front-end loaded whereby UNITIL
Power pays higher prices, on an inflation adjusted basis, in the early years of 
the Agreement and lower prices in later years. The amount of the excess paid by 
UNITIL Power in the early years of the UNITIL Power Purchase Agreement is       
quantified in a "Balance Account" which increases annually to $4.1 million in   
1998, then decreases annually, reaching zero in 2001. If the UNITIL Power       
Purchase Agreement terminates prior to its scheduled termination and if at that 
time there is a positive amount in the Balance Account, Great Bay is obligated  
to refund that amount to UNITIL Power.                                          

To secure the obligations of Great Bay under the UNITIL Power Purchase
Agreement, including the obligation to repay to UNITIL Power the amount of the  
Balance Account, the UNITIL Power Purchase Agreement grants UNITIL Power a      
mortgage on Great Bay's interest in the Seabrook Project. This mortgage may be  
subordinated to first mortgage financing of up to a maximum amount of           
$80,000,000. The UNITIL                                                         

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Power Purchase Agreement further provides that UNITIL Power's mortgage will rank
pari passu with other mortgages that may hereafter be granted by Great Bay to   
other purchasers of power from Great Bay to secure similar obligations, provided
that (i) the maximum amount of indebtedness secured by the first mortgage on the
Seabrook Interest may not exceed $80,000,000 and (ii) the combined total of all 
second mortgages on the Seabrook Interest may not exceed the sum of (a)         
$80,000,000 less the total amount of Great Bay's debt then outstanding which is 
secured by a first mortgage plus (b) $57,000,000.                               

In addition to the UNITIL Power Purchase Agreement, Great Bay also has
entered into an option agreement with UNITIL Power (the "Power Purchase Option  
Agreement") under which Great Bay has granted UNITIL Power the option to        
purchase, during the period from November 1, 1998 through October 31, 2018,     
approximately 15 MW of electricity at a price equal to 6.5 cents per kWh,       
subject to adjustment in accordance with a formula. UNITIL Power is required to 
exercise its option under the Power Purchase Option Agreement on or before the  
earlier of (i) October 31, 1996, or (ii) 30 days after the first date on which  
Great Bay is prepared to commit to sell, for a minimum of 10 years, all or any  
part of the last remaining 15 MW of Great Bay's share of power generated by the 
Seabrook Project. Based on the current market conditions, Great Bay believes    
that it is unlikely that UNITIL Power will exercise this option under the Power 
Purchase Option Agreement.                                                      

  Great Bay has also entered into a Purchased Power Agreement, dated as of
March 2, 1995 (the "Freedom Purchased Power Agreement"), with Freedom Energy    
Company ("Freedom Energy") pursuant to which Great Bay agreed to sell to Freedom
Energy, subject to the satisfaction of certain material conditions precedent, up
to 20 MW of power at an initial price of approximately 4.5 cents per kWh. The   
Freedom Purchased Power Agreement is subject to the receipt by Freedom Energy of
all necessary regulatory approvals, including approval from the NHPUC to operate
as a utility and to sell electricity directly to end-users and approval by the  
FERC of the rates specified in the agreement. In addition, the agreement is     
subject to the entry by Freedom Energy into an agreement with Public Service    
Company of New Hampshire ("PSNH") for transmission services. Great Bay has the  
right, which it has not exercised, to terminate the Freedom Purchased Power     
Agreement since these conditions were not satisfied by February 28, 1996.       
Freedom Energy has petitioned the NHPUC for permission to sell electric power   
directly to end-users located in the franchise service area of PSNH, but it is  
not currently authorized to operate an electric utility. Great Bay is unable to 
predict whether Freedom Energy will obtain the necessary approvals or customers 
to purchase 20 MW of electricity.                                               

     Great Bay is also a party to a Purchased Power Agreement, dated November 9,
1995 (the "Bangor Purchased Power Agreement"), with Bangor Hydro-Electric       
Company ("Bangor Hydro") pursuant to which Bangor Hydro agreed to purchase from 
Great Bay, subject to increase or reduction under certain circumstances, 10 MW  
of electricity during the months of January through March 1996 and for the      
months of November 1996 through March 1997 and November 1997 through March 1998.
Pursuant to the Bangor Purchased Power Agreement, Great Bay also granted to     
Bangor Hydro an option to purchase from Great Bay, subject to increase or       
reduction under certain circumstances, up to 10 MW of electricity for the months
of November 1998 through March 1999 and November 1999 through March 2000.       

    During the year ended December 31, 1995, sales to Northeast Utilities, New
England Power Company, UNITIL and Bangor Hydro accounted for 27%, 21%, 15% and  
12%, respectively, of total operating revenues. See Note J of Notes to the      
Financial Statements.                                                           

Competition                                                           

Great Bay sells its share of Seabrook electricity into the wholesale  
electricity market in the Northeast United States. There are a large number of  
suppliers to this market and a surplus of capacity, resulting in intense        
competition. A primary source of competition comes from traditional utilities,  
many of which presently have excess capacity. In addition, non-utility wholesale
generators of electricity, such as IPPs, QFs and EWGs, as well as power         
marketers and brokers, actively sell electricity in this market.                

  Great Bay may face increased competition, primarily based on price, from
all the foregoing sources in the future. Great Bay believes that it will be able
to compete effectively in the wholesale electricity market because of the       
current low cost of electricity generated by the Seabrook Project in comparison 
with existing alternative sources and the reduction of Great Bay's capital costs
resulting from the implementation of the Chapter 11 reorganization plan. In     
addition, Great Bay believes that the commitment by PECO to provide             

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back-up power under the PECO Services Agreement, as well as PECO's marketing    
capabilities, will favorably affect Great Bay's competitive position.           

NEPOOL                                                                

 Great Bay is a party to the New England Power Pool ("NEPOOL") Agreement
(the "NEPOOL Agreement") and is a member of NEPOOL. NEPOOL is open to all       
investor-owned, municipal and cooperative electric utilities in New England that
are connected to the New England power grid. Effective November 13, 1995, the   
NEPOOL Agreement was amended to permit broader membership and participation in  
NEPOOL by power marketers and other non-utilities that transact business in the 
bulk power market in New England. The NEPOOL Agreement provides for coordinated 
planning of future facilities as well as the operation of nearly 100% of        
existing generating capacity in New England and of related transmission         
facilities as if they were one system. The NEPOOL Agreement imposes on its      
participants obligations concerning generating capacity reserves and the right  
to use major transmission lines. On occasions when one or more transmission     
lines are out of service, the quantity of power being produced by then operating
generation plants may exceed the quantity of power that can be carried safely by
the transmission system. In such instances, one or more generation plants may be
taken off-line by NEPOOL. To date, the Seabrook Project has not been taken      
off-line in these instances. Great Bay believes that it is unlikely that the    
Seabrook Project would be taken off-line in such instances because NEPOOL       
prefers to take off-line non-nuclear plants which are less complex and less     
difficult to schedule than nuclear units.                                       

   The NEPOOL agreement also provides for central dispatch of the generating
capacity of NEPOOL members with the objective of achieving economical use of the
region's facilities. Pursuant to the NEPOOL Agreement, interchange sales        
(purchases from or sales to the pool by a NEPOOL member) are made at prices     
approximately equal to the fuel cost for generation without contribution to the 
support of fixed charges, if NEPOOL has the right to schedule delivery of the   
power. On rare occasions, unscheduled power is delivered, or "dumped," to the   
pool, for which no payment is made by NEPOOL. Great Bay does not expect to      
"dump" power to NEPOOL. NEPOOL members also jointly schedule generation plant   
maintenance to avoid capacity shortages in the NEPOOL area. The number of       
generation plants undergoing maintenance at any time affects the cost of        
replacement power in the market. Thus, Great Bay's operating revenues and costs 
are affected to some extent by the operations of plants of other members.       

Nuclear Power, Energy and Utility Regulation                          

 The Seabrook Project and Great Bay, as part owner of a licensed nuclear
facility, are subject to the broad jurisdiction of the NRC, which is empowered  
to authorize the siting, construction and operation of nuclear reactors after   
consideration of public health and safety, environmental and antitrust matters. 
Great Bay has been, and will be, affected to the extent of its proportionate    
share by the cost of any such requirements made applicable to Seabrook Unit 1.  

  Great Bay is also subject to the jurisdiction of the FERC under Parts II
and III of the Federal Power Act and, as a result, is required to file with FERC
all contracts for the sale of electricity. FERC has the authority to suspend the
rates at which Great Bay proposes to sell power, to allow such rates to go into 
effect subject to refund and to modify a proposed or existing rate if FERC      
determines that such rate is not "just and reasonable." FERC's jurisdiction also
includes, among other things, the sale, lease, merger, consolidation or other   
disposition of facilities, interconnection of certain facilities, accounts,     
service and property records.                                                   

   Because it is an EWG, Great Bay is not subject to the jurisdiction of the
NHPUC under PUHCA. In order to maintain its EWG status, Great Bay must continue 
to engage exclusively in the business of owning and/or operating all or part of 
one or more "eligible facilities" and to sell electricity only at wholesale     
(i.e., not to end users) and activities incidental thereto. An "eligible        
facility" is a facility used for the generation of electric energy exclusively  
at wholesale or used for the generation of electric energy and leased to one or 
more public utility companies. The term "facility" may include a portion of a   
facility. In the case of Great Bay, its 12.1% joint ownership interest in the   
Seabrook Project comprises an "eligible facility."                              

    Great Bay is subject to regulation by the NHPUC in many respects including
the issuance of securities, the issuance of debt, contracts with affiliates,    
forms of accounts, transfers of utility properties, mortgaging of utility       
property and other matters. The NHPUC does not regulate rates charged for sales 
of electricity at wholesale.                                                    

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   The NHPUC and the regulatory authorities with jurisdiction over utilities
in New Hampshire and state legislatures of several other states in which Great  
Bay sells electricity are considering a range of proposals relating to the      
deregulation of the utility industry. It is not possible to predict what steps  
will be taken by these authorities and legislatures or their impact on Great    
Bay.                                                                            

Nuclear Power Issues                                                  

Nuclear units in the United States have been subject to widespread    
criticism and opposition, which has led to construction delays, cost overruns,  
licensing delays and other difficulties. Various groups have sought to prohibit 
the completion and operation of nuclear units and the disposal of nuclear waste 
by litigation, legislation and participation in administrative proceedings. The 
Seabrook Project was the subject of significant public controversy during its   
construction and licensing and remains controversial. An increase in public     
concerns regarding the Seabrook Project or nuclear power in general could       
adversely affect the operating license of Seabrook Unit 1. While Great Bay      
cannot predict the ultimate effect of such controversy, it is possible that it  
could result in a premature shutdown of the unit.                               

   In the event of a permanent shutdown of any unit, NRC regulations require
that it be completely decontaminated of any residual radioactivity. While the   
owners of the Seabrook Project are accumulating a trust fund to pay             
decommissioning costs, if these costs exceed the amount of the trust fund, the  
owners (including Great Bay) will be liable for the excess.                     

Nuclear Related Insurance                                             

 In accordance with the Price Anderson Act, the limit of liability for a
nuclear-related accident is approximately $8.9 billion, effective November 18,  
1994. The primary layer of insurance for this liability is $200 million of      
coverage provided by the commercial insurance market. The secondary coverage is 
approximately $8.7 billion, based on the 110 currently licensed reactors in the 
United States. The secondary layer is based on a retrospective premium          
assessment of $79.3 million per nuclear accident per licensed reactor, payable  
at a rate not exceeding $10 million per year per accident and a maximum of $20  
million per year. In addition, the retrospective premium is subject to inflation
based indexing at five-year intervals and, if the sum of all public liability   
claims and legal costs arising from any nuclear accident exceeds the maximum    
amount of financial protection available, then each licensee can be assessed an 
additional 5% ($3.965 million) of the maximum retrospective assessment. With    
respect to the Seabrook Project, Great Bay would be obligated to pay its        
ownership share of any assessment resulting from a nuclear incident at any      
United States nuclear generating facility. Great Bay estimates its maximum      
liability per incident currently would be an aggregate amount of approximately  
$9.59 million per accident, with a maximum annual assessment of about $1.21     
million per incident, per year.                                                 

  In addition to the insurance required by the Price Anderson Act, the NRC
regulations require licensees, including the Seabrook Project, to carry all risk
nuclear property damage insurance in the amount of at least $1.06 billion, which
amount must be dedicated, in the event of an accident at the reactor, to the    
stabilization and decontamination of the reactor to prevent significant risk to 
the public health and safety.                                                   

During 1995, Great Bay purchased business interruption insurance from 
Nuclear Electric Insurance Limited ("NEIL"). This policy is in effect from      
December 22, 1995 until September 15, 1996 and provides for the payment of a    
fixed weekly loss amount of $520,000 in the event of an outage at the Seabrook  
Project of more than 21 weeks resulting from property damage occurring from a   
"sudden fortuitous event, which happens by chance, is unexpected and            
unforeseeable." The maximum amount payable to Great Bay is $70.3 million. Under 
the terms of the policy, Great Bay is subject to a potential retrospective      
premium adjustment of up to approximately $650,000 should NEIL's board of       
directors deem that additional funds are necessary to preserve the financial    
integrity of NEIL. Since NEIL was founded in 1980, there has been no            
retrospective premium adjustment; however, there can be no assurance that NEIL  
will not make retrospective adjustments in the future. The liability for this   
retrospective premium adjustment ceases six years after the end of the policy   
unless prior demand has been made.                                              

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Nuclear Fuel                                                          

   The Seabrook Project's joint owners have made, or expect to make, various
arrangements for the acquisition of uranium concentrate, the conversion,        
enrichment, fabrication and utilization of nuclear fuel and the disposition of  
that fuel after use. Many of these arrangements are pursuant to multi-year      
contracts with concentrate and services providers. Based on the Seabrook        
Project's existing contractual arrangements, Great Bay believes that the        
Seabrook Project has available or under supply contracts sufficient nuclear fuel
for operations through approximately 2001. The next refueling, based on NAESCO's
expectation for fuel consumption, is currently scheduled for June 1997. Uranium 
concentrate and conversion, enrichment and fabrication services currently are   
available from a variety of sources. The cost of such concentrate and such      
services varies based upon market factors.                                      

Nuclear Waste Disposal                                                

     Costs associated with nuclear plant operations include amounts for disposal
of nuclear wastes, including spent fuel, as well as for the ultimate            
decommissioning of the plants. Under the Nuclear Waste Policy Act of 1982 (the  
"NWPA"), the United States Department of Energy (the "DOE") is required (subject
to various contingencies) to design, license, construct and operate a permanent 
repository for high level radioactive wastes and spent nuclear fuel and         
establish prescribed fees for the disposal of such waste and fuel. The NWPA     
specifies that the DOE provide for the disposal of such waste and spent nuclear 
fuel starting in 1998.                                                          

     The owners of the Seabrook Project have entered into contracts with the DOE
for disposal of spent nuclear fuel in accordance with the NWPA. In return for   
payment of the prescribed fees, the federal government is to take title to and  
dispose of the Seabrook Project's high level wastes and spent nuclear fuel      
beginning no later than 1998. However, the DOE has announced that its first high
level waste repository will not be in operation earlier than 2010,              
notwithstanding the DOE's statutory and contractual responsibility to begin     
disposal of high-level radioactive waste and spent fuel, beginning not later    
than January 31, 1998.                                                          

    Until the federal government begins receiving such materials in accordance
with the NWPA, operating nuclear generating units such as the Seabrook Project  
will need to retain high level wastes and spent fuel on-site or make other      
provisions for their storage. Great Bay has been advised by the Managing Agent  
that on-site storage facilities for the Seabrook Project are expected to be     
adequate until at least 2010.                                                   

Disposal costs for LLWs that result from normal operation of nuclear  
generating units have increased significantly in recent years and are expected  
to continue to rise. The cost increases are functions of increased packaging and
transportation costs and higher fees and surcharges charged by the disposal     
facilities. Pursuant to the Low-Level Radioactive Waste Policy Act of 1980, each
state was responsible for providing disposal facilities for LLW generated within
the state and was authorized to join with other states into regional compacts to
jointly fulfill their responsibilities. However, pursuant to the Low-Level      
Radioactive Waste Policy Amendments Act of 1985, each state in which a currently
operating disposal facility is located (South Carolina, Nevada and Washington)  
is allowed to impose volume limits and a surcharge on shipments of LLW from     
states that are not members of the compact in the region in which the facility  
is located. On June 19, 1992, the United States Supreme Court issued a decision 
upholding certain parts of the Low-Level Radioactive Waste Policy Amendments Act
of 1985, but invalidating a key provision of that law requiring each state to   
take title to LLW generated within that state if the state fails to meet        
federally mandated deadlines for siting LLW disposal facilities. The decision   
has resulted in uncertainty about states' continuing roles in siting LLW        
disposal facilities and may result in increased LLW disposal costs and the need 
for longer interim LLW storage before a permanent solution is developed. Based  
on information provided by NAESCO, management believes that the on-site storage 
capacity for LLW generated by the Seabrook Project is adequate for the          
forseeable future.                                                              

In April 1995, a privately owned facility in Utah was approved as a   
disposal facility for certain types of LLW. Additionally, the Barnwell, South   
Carolina disposal facility was reopened in July 1995 to all states except North 
Carolina as a result of legislation passed by the South Carolina legislature.   
The Seabrook Project began shipping certain LLW to the Utah facility in December
1995. All LLW generated by the Seabrook Project which exceeds the maximum       
radioactivity level of LLW accepted by the Utah facility and LLW resulting from 
the Seabrook Project's operation prior to that date is stored on-site.          

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Decommissioning                                                       

NRC licensing requirements and restrictions are also applicable to the
decommissioning of nuclear generating units at the end of their service lives,  
and the NRC has adopted comprehensive regulations concerning decommissioning    
planning, timing, funding and environmental review. Any changes in NRC          
requirements or technology can increase estimated decommissioning costs.        

 Along with the other Participants, Great Bay is responsible for its pro
rata share of the decommissioning and cancellation costs for Seabrook. The      
decommissioning funding schedule is determined by the New Hampshire Nuclear     
Decommissioning Financing Committee (the "NDFC"). The NDFC reviews the          
decommissioning funding schedule for the Seabrook Project at least annually and,
for good cause, may increase or decrease the amount of the funds or alter the   
funding schedule. Great Bay pays its share of decommissioning costs on a monthly
basis.                                                                          

   The estimated cost to decommission the Seabrook Project, based on a study
performed in 1994 for the lead owner of the Plant, is approximately $414 million
in 1995 dollars and $2.1 billion in 2026 dollars, assuming a 36-year life for   
the facility and a future escalation rate of 4.25%. Based on this estimate, the 
current value of Great Bay's share of this liability in 1995 dollars is         
approximately $50.2 million.                                                    

 The Seabrook Project's decommissioning estimate and funding schedule is
subject to review each year by the NDFC. The review of the 1996 estimate and    
funding schedule by the NDFC is currently scheduled to commence in May 1996.    
Although the owners of the Seabrook Project are accumulating funds in an        
external trust to defray decommissioning costs, these costs could substantially 
exceed the value of the trust fund, and the owners, including Great Bay, would  
remain liable for the excess.                                                   

 On November 15, 1992, Great Bay's former parent, EUA, and certain other
parties entered into a settlement agreement. Under the settlement agreement EUA,
guaranteed an amount not to exceed $10 million of Great Bay's future            
decommissioning costs of Seabrook Unit 1 in the event that Great Bay is unable  
to pay its share of such decommissioning costs.                                 

Environmental Regulation                                              

   The Seabrook Project, like other electric generating stations, is subject
to standards administered by federal, state and local authorities with respect  
to the siting of facilities and associated environmental factors. The United    
States Environmental Protection Agency (the "EPA"), and certain state and local 
authorities, have jurisdiction over releases of pollutants, contaminants and    
hazardous substances into the environment and have broad authority in connection
therewith, including the ability to require installation of pollution control   
devices and remedial actions. The NRC has promulgated a variety of standards to 
protect the public from radiological pollution caused by the normal operation of
nuclear generating facilities.                                                  

  The EPA issued a National Pollutant Discharge Elimination System permit,
valid for a period of five years, to NAESCO on October 30, 1993 authorizing     
discharges from Seabrook Station into the Atlantic Ocean and the Browns River in
accordance with limitations, monitoring requirements and conditions specified in
the permit. On August 31, 1994, the New Hampshire Department of Environmental   
Services issued to NAESCO permits to operate two auxiliary boilers and two      
emergency diesel generators in accordance with New Hampshire Revised Statutes   
Annotated Chapter 125-C. These permits, which are effective until August 31,    
1997, prescribe limits for the emission of air pollutants into the ambient air  
as well as record keeping and other reporting criteria. Because the liabilities 
of the Participants under the JOA are several and not joint, in the event that  
NAESCO violates the emissions limits contained in its permits, if at all, Great 
Bay is liable for its pro rata share of any costs and liabilities assessed for  
the emissions violations.                                                       

In some environmental areas, the NRC and the EPA have overlapping     
jurisdiction. Thus, NRC regulations are subject to all conditions imposed by the
EPA and a variety of federal environmental statutes, including obtaining permits
for the discharge of pollutants (including heat, which is discharged by the     
Seabrook Project) into the nation's navigable waters. In addition, the EPA has  
established standards, and is in the process of reviewing existing standards,   
for certain toxic air pollutants, including radionuclides, under the United     
States Clean Air Act which apply to NRC-licensed facilities. The effective date 
for the new EPA radionuclide standards has been stayed as applied to nuclear    
generating units. Environmental regulation of the Seabrook Project may result in
material increases in capital and operating costs, delays or cancellation of    
construction of planned improvements, or modification or termination of         
operation of existing facilities.                                               

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Management believes that Great Bay is in compliance in all material respects    
with applicable EPA, NRC and other regulations relating to pollution caused by  
nuclear generating facilities.                                                  

Energy Policy Act                                                     

The Energy Act addresses many aspects of national energy policy and   
includes important changes for electric utilities and registered holding        
companies. For example, the Energy Act grants FERC new authority to mandate     
transmission access for QFs, EWGs and traditional utilities. It is not possible 
to predict the impact which the Energy Act and the rules and regulations which  
will be promulgated by various regulatory agencies pursuant to the Energy Act   
will have on Great Bay. It is also not possible to predict the timing or content
of future energy policy legislation and the significance of such legislation to 
Great Bay. Various issues not addressed by the Energy Act, including regional   
planning and transmission arrangements, could be addressed in future            
legislation.                                                                    

PROPERTIES                                                                      

  Great Bay's principal asset is its 12.1% joint ownership interest in the
Seabrook Project. The Seabrook Project is a nuclear-fueled, steam electricity,  
generating plant located in Seabrook, New Hampshire, which was planned to have  
two Westinghouse pressurized water reactors, Seabrook Unit 1 and Seabrook Unit 2
(each with a rated capacity of 1,150 megawatts), utilizing ocean water for      
condenser cooling purposes. Seabrook Unit 1 entered commercial service on August
19, 1990. Seabrook Unit 2 has been canceled.                                    

EMPLOYEES                                                                       

   Great Bay currently has five employees. If the Merger is consummated, all
of these employees will become Holding Company employees. See "Certain          
Transactions" and "Management -- Employment Agreements."                        

LEGAL PROCEEDINGS                                                               

  Great Bay filed applications for abatement of its 1994 and 1995 property
taxes with the Towns of Seabrook, Hampton and Hampton Falls, New Hampshire (the 
"New Hampshire Towns"). Each of the New Hampshire Towns denied Great Bay's      
abatement requests. On December 22, 1994 with respect to Hampton and Hampton    
Falls and February 18, 1995 with respect to Seabrook, Great Bay filed appeals   
with the Board of Land and Tax Appeals (the "1994 Tax Appeals"). Approximately  
$2,200,000 of property taxes is at issue in the 1994 Tax Appeals. The 1994 Tax  
Appeals are based on the valuation of Great Bay's interest in the Seabrook      
Project as of April 1, 1994. On April 7, 1994, a purchase and sale agreement was
entered into providing for a sale of 60% of the equity interest in Great Bay for
$35,000,000. Great Bay believes that the purchase and sale agreement was an     
arm's length transaction and the therefore established, as of the relevant      
valuation date, Great Bay's interest in the Seabrook Project as approximately   
$60,000,000. The 1994 Tax Appeals are presently pending and Great Bay is unable 
to express an opinion as to the likely outcome of this matter. Great Bay        
believes that a decision by the New Hampshire Towns against Great Bay would not 
have material adverse effect on Great Bay's results of operations because Great 
Bay paid its 1994 and 1995 property taxes to the New Hampshire Towns.           

In December 1995, the Town of Seabrook, New Hampshire (the "Town of   
Seabrook") issued a bill for property taxes for the second half of 1995 to North
Atlantic Energy Corp., et al. The Town of Seabrook informed Great Bay that it   
believed Great Bay's share of this bill was equal to $1,293,000. Great Bay      
initially refused to pay the bill because Great Bay believes that the Town of   
Seabrook's assessment of Great Bay's interest in the Seabrook Project           
(approximately $400,000,000) is overvalued and because the bill fails to        
recognize Great Bay as an independent taxpayer with a separately assessed and   
valued parcel of real estate. On April 30, 1996, Great Bay paid the December    
1995 property tax bill to avoid the Town of Seabrook placing a lien on the      
Seabrook Project. Great Bay has filed a petition with the Town of Seabrook      
seeking tax abatement of Great Bay's 1995 property taxes. Great Bay is unable to
express an opinion as to the likely outcome of this matter.                     

CERTAIN TRANSACTIONS                                                            

     Mr. Tillinghast serves as the President and sole stockholder of Tillinghast
Technology Interests, Inc. ("TILTEC"), a private consulting firm that provides  
services to various corporations relative to cogeneration, alternative energy   
projects, third party power generation and general restructuring of the U.S.    
utility industry. From January 1 through April 24, 1995, TILTEC and Great Bay   
were parties to an Agreement, dated as of                                       

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November 23, 1994, under which TILTEC provided Great Bay with approximately     
1,000 square feet of furnished office space located within close proximity to   
the Seabrook Project at 20 Ladd Street in Portsmouth, New Hampshire, and        
administrative support services for a total fee of $3,500 per month.            

     TILTEC and Great Bay entered into a new Expense Sharing Agreement, dated as
of April 24, 1995 (the "New Expense Sharing Agreement"), superseding in its     
entirety the November 23, 1994 expense sharing agreement. Under the New Expense 
Sharing Agreement, TILTEC agreed to continue to provide to Great Bay            
approximately 1,000 square feet of furnished office space in Portsmouth, New    
Hampshire and administrative support services for a total fee of $7,400 per     
month. The New Expense Sharing Agreement terminated effective as of May 1, 1996.
Because of its need for additional space, Great Bay relocated to a new facility 
in Dover, New Hampshire on May 1, 1996.                                         

    Effective August 1, 1995 (the "Getman Commencement Date"), Frank W. Getman
Jr. commenced employment with Great Bay and entered into an Employment Agreement
(the "Getman Employment Agreement") pursuant to which he agreed to serve as Vice
President, General Counsel and Secretary through August 1, 1998. Pursuant to the
Getman Employment, Great Bay loaned Mr. Getman $75,000 at the time he commenced 
employment. The principal amount of the loan will be forgiven in equal          
installments of $25,000 on each of the first, second and third anniversaries of 
the Getman Commencement Date, so long as Mr. Getman remains employed by Great   
Bay on such dates. In the event that Mr. Getman's employment is terminated for  
cause (as defined in the Getman Employment Agreement) or by Mr. Getman, he has  
agreed to repay to Great Bay the outstanding principal amount of such loan at   
such time, less any amounts forgiven by Great Bay, plus interest accrued on such
adjusted principal amount from the Getman Commencement Date at an interest rate 
of 6% per year. See "Management -- Employment Agreements."                      

MANAGEMENT'S DISCUSSION OF ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF       
OPERATIONS OF GREAT BAY                                                         

Emergence from Chapter 11                                             

On February 28, 1991, Great Bay filed a voluntary petition for        
reorganization under Chapter 11 of the Bankruptcy Code. On November 23, 1994    
(the "Confirmation Date"), a formal confirmation order by the Bankruptcy Court  
with respect to Great Bay's Amended Bankruptcy Plan became effective. At that   
time, Great Bay emerged from bankruptcy. As a result of the Chapter 11          
proceeding and in accordance with the provisions of the Amended Bankruptcy Plan,
the capital structure of Great Bay was completely changed. In particular, as    
part of its Chapter 11 proceeding, Great Bay discharged all of its pre-petition 
debt, which consisted primarily of the approximately $280 million principal     
amount of outstanding Notes and unpaid accrued interest on the Notes of         
approximately $14 million, and raised gross proceeds of $35 million in the      
Amended Bankruptcy Plan. See "Business -- Bankruptcy Proceeding and             
Reorganization." Thus, as a result, Great Bay's net worth increased             
significantly and Great Bay was relieved of the obligation to make principal and
interest payments on the Notes.                                                 

     The following discussion focuses solely on operating revenues and operating
expenses which are presented in a substantially consistent manner for all of the
periods presented. As a result of the Chapter 11 proceeding and subsequent      
effectiveness of the Amended Bankruptcy Plan on November 23, 1994, the 1994     
Statement of Income represents separately the results of operations of the      
predecessor company prior to November 23, 1994 from the results of operations of
Great Bay after that date.                                                      

    On the Confirmation Date, Great Bay adopted a "Fresh Start" Balance Sheet.
This Balance Sheet reflects the assets and liabilities of Great Bay at their    
estimated fair values as of the Confirmation Date, including the net proceeds of
the equity financing for the Amended Bankruptcy Plan, and eliminating           
liabilities discharged under the Amended Bankruptcy Plan.                       

Overview                                                              

    Great Bay reported an operating loss in the three-month period ended March
31, 1996 and in each of the year ended December 31, 1995, the combined          
twelve-month period ended December 31, 1994 and the year ended December 31,     
1993. These losses were primarily due to sales of Great Bay's share of          
electricity from the Seabrook Project in the short-term market at prices        
resulting in revenues substantially below actual expenses.                      

The Seabrook Project from time to time experiences both scheduled and 
unscheduled outages. Great Bay incurs losses during outage periods due to the   
loss of all operating revenues and additional costs associated with the outages 
as well as continuing operating and maintenance expenses and depreciation.      
Unscheduled                                                                     

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outages or operation of the unit at reduced capacity can occur due to the       
automatic operation of safety systems following the detection of a malfunction. 
In addition, it is possible for the unit to be shut down or operated at reduced 
capacity based on the results of scheduled and unscheduled inspections and      
routine surveillance by Seabrook Project personnel. It is not possible for Great
Bay to predict the frequency or duration of any future unscheduled outages;     
however, it is likely that such unscheduled outages will occur. The Managing    
Agent of the Seabrook Project has scheduled the next refueling outage for June  
1997. Refueling outages are scheduled generally every 18-24 months depending    
upon the Seabrook Project capacity factor and the rate at which the nuclear fuel
is consumed.                                                                    

  This Proxy Statement/Prospectus contains forward-looking statements. 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," 'excepts,"         
"intends," and similar expressions are intended to identify forward-looking     
statements. There are a number of important factors that could cause Great Bay's
and Holding Company's actual results to differ materially from those indicated  
by such forward-looking statements. These factors include, without limitation,  
those set forth under the caption "Risk Factors" at pages 9 through 12.         

Results of Operations                                                 

OPERATING REVENUES                                                    

Three Month Periods Ended March 31, 1996 and 1995                     

Great Bay's operating revenues decreased by approximately $890,000, or
11.4%, to $6,891,000 in the first quarter of 1996 as compared with $7,781,000 in
the first quarter of 1995. This decrease was primarily due to lower availability
and production at the Seabrook Project resulting from unscheduled outages during
the first quarter of 1996 compared with no scheduled or unscheduled outages     
occurring during the same period in 1995. During the first quarter of 1996, the 
average capacity factor at the Seabrook Project was 86.1% of the rated capacity 
versus an average capacity factor of 100.6% for the same period in 1995. Sales  
of electricity decreased by approximately 12.9% to 264,134,400 kilowatt hours in
1996 as compared with 303,169,000 kilowatt hours in 1995. This decrease in kWh  
sales during the first quarter of 1996 was partially offset by an increase in   
the sales price per kWh received by Great Bay during the first quarter of 1996, 
as compared to the same period in 1995. During the first quarter of 1996 the    
sales price per kWh (determined by dividing total sales revenue by the total    
number of kWh hours sold in the applicable period) increased 2% to $2.61 cents  
per kWh as compared with $2.56 cents per kWh in the 1995 period. Great Bay's    
cost of power (determined by dividing total operating expenses by Great Bay's   
12.1% share of the power produced by the Seabrook Project during the applicable 
period) increased by 15.9% to 2.91 cents per kWh in the first three months of   
1996 as compared to 2.51 cents per kWh in the first three months of 1995. This  
increase is primarily the result of the unscheduled outages during January and  
February of 1996. Scheduled and unscheduled outage time increases Great Bay's   
cost of power because Seabrook Project costs are spread over fewer kWhs.        

Years Ended December 31, 1995, 1994 and 1993                          

 Great Bay's operating revenues for 1995 increased by approximately $7.4
million, or 43%, as compared with the combined twelve months ended 1994. The    
increase was due to reduced scheduled and unscheduled outage time during 1995,  
with an average capacity factor of 83.2% in 1995 as compared with 61.6% in the  
combined twelve months ended 1994. Operating revenues were also favorably       
affected in 1995 by reduced outage time and an increase in the sales price per  
kWh to 2.41 cents per kWh as compared with 2.27 cents per kWh in the combined   
twelve months ended 1994. Great Bay's cost of power decreased by 34.7% to 3.18  
cents per kWh in 1995 as compared with 4.88 cents per kWh in the combined twelve
months ended 1994, primarily as a result of reduced depreciation and            
amortization expenses in 1995 resulting from the write down to fair value of all
of Great Bay's assets following its emergence from bankruptcy in November 1994. 

  Great Bay's operating revenues for the combined twelve months ended 1994
decreased by approximately $7.5 million, or 30.5%, in comparison with 1993. The 
decrease was primarily due to greater scheduled and unscheduled outages at the  
Seabrook Project during 1994 than in 1993, with an average capacity factor of   
61.6% in 1994 in comparison with 89.9% in 1993. The sales price per             
kilowatt-hour power was substantially unchanged, increasing to 2.27 cents in the
combined twelve-month period in 1994 from 2.24 cents in 1993. Great Bay's cost  
of power for the same periods increased by 68.3% to 4.88 cents per kWh in the   
combined                                                                        

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twelve-month period in 1994 as compared with 2.90 cents per kWh in 1993,        
primarily as a result of the outages in the combined twelve months ended 1994.  

EXPENSES                                                              

Three Month Periods Ended March 31, 1996 and 1995                     

    Great Bay's production expenses for the first quarter of 1996 decreased by
$618,000 or 14.7%, compared with the first quarter of 1995. This decrease was   
primarily the result of reduced operating costs at the Seabrook Project         
reflecting lower staffing levels and a reduction in the level of outside        
services, lower nuclear fuel amortization because the Seabrook Project added    
less expensive nuclear fuel at the last refueling outage and lower outage       
accruals as the result of the use of a 20-month assumed scheduled operating     
cycle in the first quarter of 1996 and an 18-month cycle in the first quarter of
1995. The change in the operating cycle reflects a change by the Managing Agent 
of the Seabrook Project as to the assumed burn rate of the nuclear fuel.        

Great Bay's administrative and general expenses increased by $512,000 
during the first quarter of 1996, an increase of 36.5% over the comparable      
period in 1995. This increase was primarily due to the costs associated with the
growth and management of Great Bay, including transition and start-up costs     
associated with Great Bay directly performing its own administrative functions  
following the termination of its Marketing and Management and Administrative    
Services Agreements with UNITIL Resources, Inc., marketing fees paid to PECO and
costs associated with Great Bay's proposed corporate restructuring into a       
holding company structure. The marketing fees paid to PECO are calculated based 
upon a revenue sharing formula. The formula is materially dependent upon the    
capacity factor achieved at the Seabrook Project and is subject to a biannual   
true-up in July and January based on the actual capacity factor for the prior   
six-month period. If the Seabrook Project annual capacity factor exceeds 85%,   
Great Bay is entitled to retain a greater percentage of current year revenues   
and PECO is required to make a true-up payment to Great Bay.                    

Great Bay's depreciation and amortization expenses increased 18.7% to 
$874,000 in the first quarter of 1996 as compared to $736,000 during the first  
quarter of 1995. This increase was primarily attributable to Great Bay's utility
plant being depreciated over a shorter remaining license life and amortization  
of the cost of the materials and supplies inventory that is expected to be on   
hand at the expiration of the Seabrook Project's NRC operating license.         

    Other deductions increased 157%, or $606,000, reflecting $219,000 in other
deductions during the first quarter of 1996 as compared to other income of      
$387,000 recorded during the first quarter of 1995. This increase was primarily 
due to Great Bay's recognition of its share of the Seabrook Project's           
decommissioning liability. During the first quarter of 1996, Great Bay Power    
began to accrete its share of the Seabrook Project's decommissioning liability  
in 1996 dollars rather than 1995 dollars. In 1995 there was no expense for Great
Bay's share of Seabrook Project's decommissioning liability because the entire  
amount of Great Bay's share of Seabrook Project's decommissioning liability was 
reflected as a liability on Great Bay's balance sheet under fresh start         
accounting principles. This accretion is a non-cash charge and recognizes Great 
Bay's liability related to the closure and decommissioning of its nuclear plant 
in current year dollars over the licensing period of the plant.                 

Years Ended December 31, 1995, 1994 and 1993                          

     Great Bay's total operating expenses (excluding depreciation and all taxes)
for 1995 increased $0.7 million, or 3.0%, in comparison with the combined twelve
months ended 1994, primarily as a result of increased administrative and general
expenses. This increase was partially offset by lower maintenance costs during  
the Seabrook Project's 1995 scheduled outage. Depreciation and amortization     
expenses decreased by 59.6% to $3.3 million during 1995 as compared with $8.3   
million in the combined twelve months ended 1994. The decrease was the result of
a reduction in the depreciable value of Great Bay's investment in the Seabrook  
Project due to the write down to fair value of all of Great Bay's assets        
following its emergence from bankruptcy in November 1994. In the combined twelve
months ended 1994, as part of its emergence from bankruptcy, Great Bay wrote off
$137.9 million of assets and liabilities. Interest income increased in 1995 to  
$1.5 million as a result of Great Bay's significantly higher cash and investment
balances in 1995.                                                               

     Great Bay's total operating expenses (excluding depreciation and all taxes)
for the combined twelve-month period in 1994 increased $1.2 million, or 5.1%, in
comparison with 1993, primarily as a result of                                  

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increased maintenance costs during the Seabrook Project's 1994 outages. Taxes   
other than income increased for the combined twelve-month period in 1994 by     
approximately $0.4 million, or 10.4%, over 1993, reflecting changes in the      
manner in which Great Bay accrued for this liability as a result of the         
uncertainty regarding the timing and magnitude of the net operating loss        
carryforwards described below.                                                  

NET OPERATING LOSSES                                                  

     For federal income tax purposes, as of December 31, 1995, Great Bay had net
operating loss carry forwards ("NOLs") of approximately $167 million, which are 
scheduled to expire between 2005 and 2010. Because Great Bay has experienced one
or more ownership changes, within the meaning of Section 382 of the Internal    
Revenue Code of 1986, as amended, an annual limitation is imposed on the ability
of Great Bay to use $136 million of these carryforwards. Great Bay's best       
estimate at this time is that the annual limitation on the use of $136 million  
of Great Bay's NOLs is approximately $5.5 million per year. Great Bay's other   
$31 million of NOLs are not currently subject to such limitations.              

Liquidity and Capital Resources                                       

     Great Bay is required under the JOA to pay its share of Seabrook Unit 1 and
Seabrook Unit 2 expenses, including, without limitation, operation and          
maintenance expenses, construction and nuclear fuel expenditures and            
decommissioning costs, regardless of the level of Seabrook Unit 1's operations. 
Seabrook Project expenses to preserve and protect Unit 2 assets approximate     
$700,000 per year, of which Great Bay's share is approximately $91,000 per year.
Great Bay currently is selling most of its power in the Northeast United States 
short-term wholesale power market. The cash generated from electricity sales by 
Great Bay is and has been less than Great Bay's ongoing cash requirements. Great
Bay expects that it will continue to incur cash deficits until the prices at    
which it is able to sell its share of the Seabrook Project electricity increase,
which may be a number of years, if ever. Great Bay intends to cover such        
deficits with its cash and short-term investments which totaled approximately   
$16.7 million at March 31, 1996. However, if the Seabrook Project operates at a 
capacity factor below historical levels, or if expenses associated with the     
ownership or operation of the Seabrook Project, including without limitation    
decommissioning costs, are materially higher than anticipated, or if the prices 
at which Great Bay is able to sell its share of the Seabrook Project electricity
do not increase at the rates and within the time expected by Great Bay, Great   
Bay would be required to raise additional capital, either through a debt        
financing or an equity financing, to meet its ongoing cash requirements.        

     Great Bay's principal asset available to serve as collateral for borrowings
is its 12.1% joint interest in the Seabrook Project. Pursuant to a power        
purchase agreement, dated as of April 1, 1993, between Great Bay and UNITIL     
Power Corp., Great Bay's interest in the Seabrook Project is encumbered by a    
mortgage. This mortgage may be subordinated to up to $80 million of senior      
secured financing.                                                              

Great Bay's cash and short-term investments increased approximately   
$274,000 during the first quarter of 1996. Principal factors affecting liquidity
during the three months ended March 31, 1996 included the operating loss        
discussed above, decommissioning trust fund payments of $181,000, an increase in
accounts receivable of $1,008,000 due to the resumption of power sales in the   
first quarter of 1996 following reduced sales in December 1995 as a result of   
the scheduled outage during that month and an increase in Prepayments and other 
assets of $1,391,000, primarily related to cash funding of Great Bay's share of 
the Seabrook Project's operating costs. Offsetting these items were non-cash    
charges to income of $1,801,000 for depreciation and amortization,              
decommissioning trust fund accretion of $565,000 and local property and state   
nuclear tax accruals of $917,000. Great Bay also received $1,000,000 as a result
of the PECO warrant purchase.                                                   

In December 1995, the Town of Seabrook, New Hampshire (the "Town of   
Seabrook") issued a bill for property taxes for the second half of 1995 to      
"North Atlantic Energy Corp., et al." The Town of Seabrook informed Great Bay   
that it believed Great Bay's share of this bill was $1,293,000. Great Bay       
initially refused to pay the bill because Great Bay believes that the Town of   
Seabrook's assessment of Great Bay's interest in the Seabrook Project is        
overstated and because the bill fails to recognize Great Bay as an independent  
taxpayer with a separately assessed and valued parcel of real estate. As of     
March 31, 1996, the non-payment of these property taxes was reflected in Great  
Bay's financial statements as taxes accrued. On April 30, 1996, Great Bay paid  
the December 1995 property tax bill to avoid the Town of Seabrook placing a lien
on the Seabrook Project. Great Bay has filed a petition with the Town of        
Seabrook seeking a tax abatement of Great Bay's 1995 property taxes. Management 
of Great Bay is unable to express an opinion as to the likely outcome of this   
matter.                                                                         

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  Great Bay's cash and short-term investments decreased approximately $5.7
million during 1995, primarily as a result of the operating loss discussed above
plus $7.5 million of capital expenditures for plant and nuclear fuel, payments  
of $1.0 million to the decommissioning trust fund and payments of $2.7 million  
for bankruptcy-related reorganization expenses. Partially offsetting the items  
listed above were non-cash charges to income of $7.9 million for depreciation   
and amortization.                                                               

     Great Bay's fiscal 1995 decommissioning expenses totaled approximately $1.0
million. The decommissioning funding schedule is determined by the NDFC, which  
reviews such schedule for the Seabrook Project at least annually. Great Bay's   
decommissioning expenses for fiscal 1996 and fiscal 1997 will depend upon the   
outcome of pending proceedings before the NDFC. Great Bay expects to use        
revenues from the sale of power to pay these decommissioning expenses.          

Great Bay anticipates that its share of the Seabrook Project's capital
expenditures for the 1996 fiscal year will total approximately $2.7 million,    
primarily for nuclear fuel and various capital projects. This estimated amount  
is lower than the amount expended in fiscal 1995 for capital expenditures       
because the cost of nuclear fuel is lower in a non-refueling year.              

 On May 23, 1996, Great Bay and the joint owners of the Seabrook Project
announced a proposed transaction for the sale of two steam generators from      
Seabrook Unit 2 to an unrelated party. These steam generators are compatible    
with the equipment being operated by the unrelated party. If this sale is       
completed, Great Bay will receive approximately $7,000,000 in cash. Great Bay   
had previously written off its investment in Unit 2 and will recognize a gain   
from this sale.                                                                 

MANAGEMENT                                                                      

  After the Effective Date, Great Bay will be a wholly-owned subsidiary of
Holding Company. The persons who are officers and directors of Great Bay        
immediately prior to the Effective Date will be the officers and directors of   
Holding Company and of Great Bay immediately after the Effective Date, without  
change, until their successors have been duly elected or appointed and          
qualified.                                                                      

Executive Officer and Directors                                       

The executive officer and directors of Great Bay are as follows:      

                                                        [Enlarge/Download Table]

                   NAME                     AGE                    POSITION                   
------------------------------------------  ---  ---------------------------------------------
                                                                                              
John A. Tillinghast.......................  69   Chief Executive Officer, President, Treasurer
                                                 and Chairman of the Board of Directors       
Frank W. Getman Jr........................  32   Vice President, Secretary and General Counsel
Kenneth A. Buckfire.......................  37   Director                                     
Andrew J. Kurtz...........................  29   Director                                     
Charles A. Leeds, Jr......................  44   Director                                     

  Great Bay has only two officers, its President, John A. Tillinghast, and
its Vice President and General Counsel, Frank W. Getman Jr. A Management and    
Administrative Services Agreement was in effect during 1995 between Great Bay   
and URI which provided for URI to provide a full range of services to Great Bay 
including management, accounting and bookkeeping, budgeting and regulatory      
compliance. Under the Management and Administrative Services Agreement with URI,
Great Bay paid URI $225,000 per year for senior executive management services   
and reimbursed day-to-day operational services at URI's cost plus 25%. Great Bay
terminated this agreement effective January 2, 1996. As of May 1, 1996, Great   
Bay had five employees and had assumed responsibility for virtually all of its  
administrative functions other than its power marketing functions, which        
continue to be provided by a third party pursuant to a contractual agreement.   

Set forth below is information concerning the executive officers and  
directors of Great Bay:                                                         

    John A. Tillinghast has served as President, Treasurer and the Chairman of
the Board of Directors of Great Bay since November 1994 and Chief Executive     
Officer since April 1995. Since 1987, Mr. Tillinghast has served as President   
and the sole stockholder of Tillinghast Technology Interests, Inc., a private   
consulting firm. From 1986 to 1993, Mr. Tillinghast served as Chairman of the   
Energy Engineering Board of the National Academy of Sciences. He holds an M.S.  
in Mechanical Engineering from Columbia University.                             

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 Frank W. Getman Jr. has served as Vice President, Secretary and General
Counsel since August 1. 1995. From September 1991 to August 1995, Mr. Getman was
an attorney with the law firm of Hale and Dorr, Boston, Massachusetts. Mr.      
Getman holds J.D. and M.B.A. degrees from Boston College and a B.A. in Political
Science from Tufts University.                                                  

  Kenneth A. Buckfire has served as a director of Great Bay since November
1994. Mr. Buckfire has been a Director at Wasserstein Perella & Co., Inc. since 
January 1996. Mr. Buckfire served with Lehman Brothers, Inc. from September 1994
to January 1996 as a Senior Vice President of High Yield Banking and from March 
1991 to August 1994 as a Vice President of High Yield Banking. Mr. Buckfire is a
director of Pike Advertising Services, Inc., Caddis International, Inc. and     
Marketarts Webtrack L.L.C. Mr. Buckfire holds a B.A. from the University of     
Michigan and an M.B.A. from Columbia University.                                

   Andrew J. Kurtz has served as a director of Great Bay since May 1995. Mr.
Kurtz has been an analyst and portfolio manager for Elliott Associates, L.P.    
since July 1994. From August 1992 to July 1994, Mr. Kurtz was an attorney at    
Weil, Gotshal and Manges in New York. Mr. Kurtz was employed by Chemical Realty 
Corporation, a division of Chemical Bank, from 1988 to 1989. Mr. Kurtz has a    
B.S. in Economics from the Wharton School of Business at the University of      
Pennsylvania and a J.D. from the University of Pennsylvania.                    

    Charles A. Leeds, Jr. has served as a director of Great Bay since November
1995. Mr. Leeds has served as the Portfolio Manager for Omega Advisors, Inc.    
since 1991. Mr. Leeds holds a B.A. in Economics from the University of          
Pennsylvania and an M.B.A. from Columbia University.                            

Compensation for Directors                                            

     Employee directors of Great Bay do not receive any compensation for serving
on the Board. Non-employee directors receive $2,500 per quarter, plus reasonable
expenses. Non-employee directors are also eligible to receive stock option      
grants in accordance with a formula specified in the Great Bay Stock Option     
Plan. At the Effective Date, each Great Bay director holding outstanding Great  
Bay Options will be granted substitute options to purchase shares of Holding    
Company Common Stock. See "The Merger -- Substitution of Great Bay Stock        
Options." Mr. Leeds, a non-employee director of Great Bay, has waived his rights
to all compensation available to non-employee directors, including his right to 
receive stock options pursuant to the Great Bay Stock Option Plan.              

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Executive Compensation                                                

                                                        [Enlarge/Download Table]
     SUMMARY COMPENSATION TABLE.  The following table sets forth certain                            
information concerning the compensation of (i) Great Bay's Chief Executive                          
Officer (the "CEO") and (ii) the only other officer as of December 31, 1995                         
whose salary and bonuses earned during the fiscal year ended December 31, 1995                      
at the annual rate of $100,000 or more (the CEO and such other executive officer                    
are hereinafter referred to as the "Named Executive Officers"):                                     

                           SUMMARY COMPENSATION TABLE                                               


                                                                                      LONG-TERM     
                                                     ANNUAL COMPENSATION         COMPENSATION AWARDS
                                                  --------------------------     -------------------
                                                           SALARY      BONUS        OPTIONS/SARS    
          NAME AND PRINCIPAL POSITION             YEAR     ($)(1)      ($)(1)          (#)(2)       
          ---------------------------             ----     -------     -----     -------------------
                                                                                                    
John A. Tillinghast(3)..........................  1995     $95,000       0             200,000      
  President and Chief Executive Officer           1994       9,896       0                          
Frank W. Getman Jr.(4)..........................  1995      41,667       0              75,000      
  Vice President, General Counsel and Secretary                                                     

<FN>                                                                                                
---------------                                                                                     
(1) Amounts shown represent cash compensation earned by the Named Executive                         
    Officers for the fiscal years presented.                                                        

(2) The option exercise price is equal to the fair market value of the Great Bay                    
    Common Stock on the date of grant.                                                              

(3) Mr. Tillinghast's employment with Great Bay commenced on November 23, 1994.                     

(4) Mr. Getman's employment with Great Bay commenced on August 1, 1995.                             


                                                        [Enlarge/Download Table]
     OPTION/SAR GRANT TABLE.  The following table sets forth certain information                           
regarding options and SARs granted during the fiscal year ended December 31,                               
1995 by Great Bay to the Named Executive Officers:                                                         

                     OPTION/SAR GRANTS IN LAST FISCAL YEAR                                                 


                                              INDIVIDUAL GRANTS                                            
                          ---------------------------------------------------------                        
                                           PERCENT OF                                                      
                          NUMBER OF          TOTAL                                    POTENTIAL REALIZABLE 
                          SECURITIES        OPTIONS/                                 VALUE AT ASSUMED RATES
                          UNDERLYING          SARS                                       OF STOCK PRICE    
                           OPTIONS/        GRANTED TO                                   APPRECIATION FOR   
                             SARS          EMPLOYEES      EXERCISE OR                    OPTION TERM(2)    
                           GRANTED         IN FISCAL      BASE PRICE     EXPIRATION  ----------------------
          NAME               (#)              YEAR         ($/SH)(1)        DATE      5%($)        10%($)  
------------------------- ----------       ----------     -----------    ----------  --------    ----------
                                                                                                           
John A. Tillinghast......   200,000(3)(4)     72.7%          $8.00        4/24/02    $652,000    $1,518,000
Frank W. Getman Jr.......    75,000(4)(5)     27.3%           8.50        8/01/02     259,500       642,000

<FN>                                                                                                       
---------------                                                                                            
(1) The exercise price is equal to the fair market value of Great Bay Common                               
    Stock on the date of grant (based upon the most recent per share closing                               
    price on the Nasdaq National Market).                                                                  

(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 dates the respective options were granted                            
    to their expiration dates. 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 Great Bay Common Stock, the                                        
    optionholder's continued employment through the option period, and the date                            
    on which the options are exercised.                                                                    

(3) This option vested with respect to 100,000 shares on April 16, 1996 and will                           
    vest with respect to the remaining 100,000 shares on April 24, 1997.                                   

(4) The exercisability of these options is accelerated upon the occurrence of a                            
    change in control (as defined in the Great Bay Stock Option Plan). These                               
    options are intended to qualify as incentive stock options.                                            

(5) This option may be exercised with respect to 35,000 shares on or after                                 
    August 1, 1996 and with respect to an additional 20,000 shares on or after                             
    each of August 1, 1997 and August 1, 1998.                                                             


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                                                        [Enlarge/Download Table]
     OPTION EXERCISES AND YEAR-END VALUES.  The following table sets forth                          
certain information concerning each exercise of stock options during the fiscal                     
year ended December 31, 1995 by each of the Named Executive Officers and the                        
number and value of unexercised options held by each of the Named Executive                         
Officers on December 31, 1995:                                                                      

              AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR                                   
                     AND FISCAL YEAR-END OPTION/SAR VALUES                                          


                                                                 NUMBER OF                          
                                                                 SECURITIES            VALUE OF     
                                                                 UNDERLYING          UNEXERCISED    
                                                                UNEXERCISED          IN-THE-MONEY   
                                                                OPTIONS/SARS         OPTIONS/SARS   
                                                             AT FISCAL YEAR-END   AT FISCAL YEAR-END
                                      SHARES                       (#)(1)               ($)(2)      
                                     ACQUIRED      VALUE     ------------------   ------------------
                                    ON EXERCISE   REALIZED      EXERCISABLE/         EXERCISABLE/   
NAME                                    (#)         ($)        UNEXERCISABLE        UNEXERCISABLE   
----                                -----------   --------   ------------------   ------------------
                                                                                                    
John A. Tillinghast...............       0            0           0/200,000               0/0       
Frank W. Getman Jr................       0            0            0/75,000               0/0       

<FN>                                                                                                
---------------                                                                                     
(1) Options granted under the Great Bay Stock Option Plan.                                          

(2) Based on the fair market value of the Great Bay Common Stock on December 31,                    
     1995 ($8.00) less the option exercise price.                                                   


Employment Agreements                                                       

    Effective April 24, 1995, John A. Tillinghast, the President of Great Bay,
entered into an Employment Agreement with Great Bay (the "Tillinghast Employment
Agreement") pursuant to which Mr. Tillinghast agreed to serve, on a full-time   
basis, as the President and Chief Executive Officer of Great Bay through        
December 31, 1996. The Tillinghast Employment Agreement provides for an annual  
salary of $95,000. In addition, pursuant to the Tillinghast Employment          
Agreement, Mr. Tillinghast was granted an incentive stock option to purchase    
200,000 shares of Great Bay Common Stock, at an exercise price of $8.00 per     
share, under the Great Bay Stock Option Plan. The option vested with respect to 
100,000 shares on April 16, 1996, the date of the Great Bay 1996 Annual Meeting 
of Stockholders, and will vest with respect to the remaining 100,000 shares on  
April 24, 1997. Following consummation of the Merger, Holding Company will      
assume the Tillinghast Employment Agreement and Mr. Tillinghast will be granted 
options to purchase shares of Holding Company Common Stock under the Holding    
Company Stock Option Plan in substitution for the outstanding Great Bay Options 
held by him. See "The Merger -- Employment Agreement to be Assumed by Holding   
Company" and "-- Substitution of Great Bay Stock Options."                      

Effective the Getman Commencement Date, Frank W. Getman Jr. commenced 
employment with Great Bay and entered into the Getman Employment Agreement      
pursuant to which he agreed to serve as Vice President, General Counsel and     
Secretary through August 1, 1998. The Getman Employment Agreement provides for  
an annual salary of $100,000. In addition, Great Bay loaned Mr. Getman $75,000  
at the time he commenced employment. The principal amount of the loan will be   
forgiven in equal installments of $25,000 on each of the first, second and third
anniversaries of the Getman Commencement Date, so long as Mr. Getman remains    
employed by Great Bay on such dates. In the event that Mr. Getman's employment  
is terminated for cause (as defined in the Getman Employment Agreement) or by   
Mr. Getman, he has agreed to repay to Great Bay the outstanding principal amount
of such loan at such time, less any amounts forgiven by Great Bay, plus interest
accrued on such adjusted principal amount from the Getman Commencement Date at  
an interest rate of 6% per year. Following consummation of the Merger, Holding  
Company will assume the Getman Employment Agreement. See "The Merger --         
Employment Agreement to be Assumed by Holding Company."                         

     Pursuant to the Getman Employment Agreement, Mr. Getman was also granted an
incentive stock option to purchase 75,000 shares of Common Stock, at an exercise
price of $8.50 per share, under the Great Bay Stock Option Plan. The option     
vests with respect to 35,000 shares on the first anniversary of the Getman      
Commencement Date and with respect to an additional 20,000 shares on each of the
second and third                                                                

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anniversaries of the Getman Commencement Date. Following consummation of the    
Merger, all outstanding options held by Mr. Getman will be converted into an    
equal number of options under the Holding Company Stock Option Plan. See "The   
Merger -- Substitution of Great Bay Stock Options."                             

  In the event that Mr. Getman's employment with Great Bay terminates in a
"Qualifying Termination" in connection with a "Change in Control" (each as      
defined in the Getman Employment Agreement), (i) Mr. Getman is entitled to      
receive in cash an amount equal to the greater of the sum of his annual salary  
from the date of termination until the date of expiration of the Getman         
Employment Agreement or twice his annual salary (excluding loan forgiveness) at 
the date of such Change in Control; (ii) the outstanding loan amount, to the    
extent not forgiven, will be immediately forgiven; and (iii) all outstanding    
stock options will become immediately exercisable. A Qualifying Termination will
be treated as having occurred prior to the second anniversary of a Change in    
Control upon (i) the termination of Mr. Getman's employment other than for cause
or (ii) the voluntary resignation by Mr. Getman following, generally, any       
material impairment or material adverse change in his working conditions,       
authority, position or compensation as compared with that in effect immediately 
prior to the Change in Control.                                                 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF GREAT BAY     

                                                        [Enlarge/Download Table]
     The following table sets forth information, as of March 31, 1996, regarding               
the ownership of Great Bay Common Stock by (i) the only persons known by Great                 
Bay to own more than five percent of the outstanding shares, (ii) all directors                
and nominees of Great Bay, (iii) each of the Named Executive Officers and (iv)                 
all directors and executive officers of Great Bay as a group.                                  


                                                                SHARES OF         PERCENTAGE   
                                                                GREAT BAY             OF       
                                                               COMMON STOCK       GREAT BAY    
                     NAME AND ADDRESS                          BENEFICIALLY      COMMON STOCK  
                   OF BENEFICIAL OWNER                           OWNED(1)        OUTSTANDING(2)
----------------------------------------------------------  ------------------   ------------  
                                                                                               
5% Shareholders                                                                                
Group consisting of:                                                                           
  Leon G. Cooperman, Omega Capital Partners, L.P., Omega                                       
  Institutional Partners, L.P. and Omega Advisors, Inc.                                        
  (the "Omega Group").....................................       2,710,500(3)           33.9%  
     c/o Omega Advisors, Inc.                                                                  
     Wall Street Plaza                                                                         
     88 Pine Street                                                                            
     New York, NY 10005                                                                        

Group consisting of:                                                                           
  Elliott Associates, L.P., Westgate International, L.P.,                                      
  Martley International, Inc. and Paul E. Singer (the                                          
  "Elliott Group")........................................       1,987,458(4)           24.8%  
     c/o Elliott Associates, L.P.                                                              
     712 Fifth Avenue 36th Floor                                                               
     New York, NY 10019                                                                        

Group consisting of:                                                                           
  SC Fundamental Fund, L.P., SC Fundamental Inc., SC                                           
  Fundamental Value BVI, Inc., Gary N. Siegler and Peter                                       
  M. Collery..............................................         896,000(5)           11.2%  
     c/o Siegler, Collery & Co.                                                                
     712 Fifth Avenue                                                                          
     New York, NY 10019                                                                        

Directors and Executive Officers:                                                              
Kenneth A. Buckfire.......................................          41,000(6)              *   
Andrew J. Kurtz...........................................          40,000(6)              *   
Charles A. Leeds, Jr......................................       2,710,500(7)           33.9%  
John A. Tillinghast.......................................         101,000(8)            1.3%  
Frank W. Getman Jr........................................               0                 0   
All directors and executive officers as a group (5                                             
  individuals)............................................       2,892,500(7)(9)        35.4%  
<FN>                                                                                           
---------------                                                                                

  * Percentage is less than 1% of the total number of outstanding shares of                    
     Great Bay Common Stock.                                                                   


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(1) The number of shares of Great Bay Common Stock beneficially owned by each   
   person or entity is determined under rules promulgated by the Commission.
    Under such rules, beneficial ownership includes any shares as to which the
   person or entity has sole or shared voting power or investment power, and
also includes any shares which the person or entity has the right to  
  acquire within 60 days after March 31, 1996. Unless otherwise indicated,
each person or entity referred to above has sole voting and investment
     power with respect to the shares listed. The inclusion herein of any shares
  deemed beneficially owned does not constitute an admission of beneficial
ownership of such shares.                                             

(2) Number of shares deemed outstanding includes 7,999,948 shares outstanding as
     of March 31, 1996, plus any shares subject to options held by the person or
    entity in question that are currently exercisable or exercisable within 60
days after March 31, 1996.                                            

(3) The information presented herein is as reported in, and based solely upon, a
 Schedule 13D filed by the indicated shareholders with the Commission on
     July 13, 1995. Leon C. Cooperman reported beneficial ownership of 2,710,500
     shares, with sole voting and dispositive power with respect to 2,355,320 of
     such shares and shared voting and dispositive power with respect to 355,180
 of such shares. Omega Capital Partners, L.P. ("Omega Capital") reported
    beneficial ownership of 1,031,760 shares, with sole voting and dispositive
 power as to all such shares. Omega Institutional Partners, L.P. ("Omega
    Institutional") reported beneficial ownership of 883,720 shares, with sole
voting and dispositive power as to such shares. Omega Advisors, Inc.  
 ("Omega Advisors") reported beneficial ownership of 795,020 shares with
  sole voting and dispositive power with respect to 439,840 of such shares
 and shared voting and dispositive power with respect to 355,180 of such
shares. Mr. Cooperman is the managing partner of each of Omega Capital
    Partners, L.P. and Omega Institutional Partners, L.P. and is the President
    of Omega Advisors, Inc. These shareholders may be deemed to be a group for
 purposes of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act").                                

(4) The information presented herein is as reported in, and based solely upon, a
 Schedule 13D filed by the indicated shareholders with the Commission on
    January 16, 1996. Elliott Associates, L.P., a Delaware limited partnership
   ("Elliott"), reported beneficial ownership of 1,267,812 shares, with sole
 voting and dispositive power as to such shares. Westgate International,
L.P., a Cayman Islands limited partnership ("Westgate"), reported     
beneficial ownership of 719,646 shares. Martley International, Inc., a
   Delaware corporation and investment manager for Westgate ("Martley"), and
   Westgate reported shared voting and dispositive power with respect to all
  shares reported as beneficially owned by Westgate. Mr. Paul E. Singer is
the general partner of Elliott and the President of Martley. These    
shareholders may be deemed to be a group for purposes of Rule 13d-3   
promulgated under the Exchange Act.                                   

(5) The information presented herein is as reported in, and based solely upon, a
 Schedule 13D filed by the indicated shareholders with the Commission on
     July 13, 1995. Gary N. Siegler ("Siegler") and Peter M. Collery ("Collery")
    each reported beneficial ownership of all of such shares, with sole voting
  and dispositive power with respect to 896,000 shares. The SC Fundamental
  Fund, L.P. ("Fund") and its general partner, SC Fundamental Inc. ("SC"),
  each reported beneficial ownership of 557,000 shares, with shared voting
     and dispositive power as to all such shares. SC Fundamental Value BVI, Inc.
     ("BVI") reported beneficial ownership of 339,000 shares, with shared voting
   and dispositive power as to all such shares. Mr. Siegler is a controlling
shareholder, president and a director of SC and BVI. Mr. Collery is a 
     controlling shareholder, vice president and a director of SC and BVI. These
shareholders may be deemed to be a group for purposes of Rule 13d-3   
promulgated under the Exchange Act.                                   

(6) Includes 40,000 shares of Great Bay Common Stock issuable upon exercise of  
     outstanding stock options, exercisable within 60 days after March 31, 1996,
granted under the Great Bay Stock Option Plan.                        

(7) Includes the 2,710,500 shares deemed beneficially owned by the Omega Group. 
     See footnote (3) above. Mr. Leeds is a general partner of Omega Capital and
     Omega Institutional. Mr. Leeds disclaims beneficial ownership of all shares
deemed beneficially owned by the Omega Group.                         

(8) Includes 100,000 shares of Great Bay Common Stock issuable upon exercise of 
     outstanding stock options, exercisable within 60 days after March 31, 1996,
granted under the Great Bay Stock Option Plan.                        

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(9) Includes 180,000 shares of Great Bay Common Stock issuable upon exercise of 
     outstanding stock options, exercisable within 60 days after March 31, 1996,
granted under the Great Bay Stock Option Plan.                        

RELATIONSHIP BETWEEN HOLDING COMPANY AND GREAT BAY                              

On the Effective Date, Holding Company and Great Bay will enter into a
Services Agreement pursuant to which Holding Company will provide to Great Bay a
full range of management services, including general management and             
administration, accounting and bookkeeping, budgeting and regulatory compliance.
Great Bay will pay Holding Company a monthly fee of $120,000 in consideration of
such services. The Services Agreement will have a one-year term and will provide
for automatic one-year renewals. The monthly fee for subsequent renewal terms   
will be determined by agreement of Great Bay and Holding Company.               

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DESCRIPTION OF HOLDING COMPANY

   Holding Company is a newly formed Delaware corporation and is currently a
wholly owned subsidiary of Great Bay and thus is controlled by Great Bay.       
Holding Company Common Stock is not currently, and has never previously been,   
traded in any established public market. Holding Company currently is engaged in
no business activities other than in connection with the proposed Merger        
described herein. Upon the consummation of the Merger, Holding Company will be  
the sole stockholder of Great Bay. Holding Company may enter new businesses or  
acquire existing businesses, both in energy related fields and in unrelated     
fields, through other subsidiaries. See "The Merger -- Reasons for the Merger." 

DESCRIPTION OF HOLDING COMPANY CAPITAL STOCK

GENERAL                                                                         

The authorized capital stock of Holding Company presently consists of 
20,000,000 shares of common stock, par value $.01 per share, and 5,000,000      
shares of preferred stock, par value $.01 per share ("Holding Company Preferred 
Stock"). There are currently 1,000 shares of Holding Company Common Stock issued
and outstanding, all of which are held by Great Bay and all of which, pursuant  
to the Merger Agreement, will cease to exist at the Effective Date.             

     In the future, the authorized but unissued and unreserved shares of Holding
Company Common Stock will be available for issuance for general corporate       
purposes including, but not limited to, stock dividends or stock splits, in     
connection with future mergers or acquisitions, or future private placement or  
public offerings. Except as may be required in connection with a merger or other
transaction in which the additional authorized shares of Holding Company Common 
Stock would be issued or as otherwise required by law or by any applicable      
regulatory authority, no stockholder approval will be required for the issuance 
of such shares. Other than the stock options described in "The Merger --        
Substitution of Great Bay Options" and the PECO Warrant described in "The Merger
-- Assumption of the PECO Warrant," there are no commitments or understandings  
at this time for the issuance of such authorized but unissued shares of Holding 
Company Common Stock or Holding Company Preferred Stock.                        

The following are summaries of the terms of the Holding Company Common
Stock and Holding Company Preferred Stock. Such summaries do not purport to be  
complete. For a discussion on the significant differences between the Great Bay 
Articles of Incorporation and Great Bay By-Laws and the Holding Company         
Certificate of Incorporation and Holding Company By-Laws and additional         
information concerning the Holding Company Certificate of Incorporation and     
Holding Company By-Laws, see "Comparison of Stockholder Rights."                

HOLDING COMPANY COMMON STOCK                                                    

  The holders of Holding Company Common Stock are entitled to one vote for
each share held on all matters submitted to a vote of stockholders. The holders 
of Holding Company Common Stock have no preemptive rights or rights to convert  
their Holding Company Common Stock into any other securities. The Holding       
Company Common Stock is not subject to redemption. The holders of Holding       
Company Common Stock are entitled to receive ratably such dividends, if any, as 
may be declared by the Board of Directors out of funds legally available        
therefor, subject to any preferential dividend rights of outstanding Holding    
Company Preferred Stock. Upon the liquidation, distribution or sale of assets,  
dissolution or winding up of Holding Company, the holders of Holding Company    
Common Stock are entitled to receive ratably the net assets of Holding Company  
available for distribution after the payment of all debts and other liabilities 
and subject to the preferential rights of any outstanding Holding Company       
Preferred Stock. The outstanding shares of Holding Company Common Stock are     
fully paid and nonassessable. The rights, preferences and privileges of holders 
of Holding Company Common Stock are subject to, and may be adversely affected   
by, the rights of the holders of shares of any series of Holding Company        
Preferred Stock which Holding Company may designate and issue in the future.    

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TRANSFER AGENT AND REGISTRAR                                                    

 The transfer agent for Holding Company Common Stock is Boston Financial
Data Services, Inc., a wholly-owned subsidiary of State Street Bank and Trust   
Company.                                                                        

HOLDING COMPANY PREFERRED STOCK                                                 

    Under the terms of the Holding Company Certificate, the Board of Directors
of Holding Company is authorized, subject to any limitations prescribed by law, 
without further action of Holding Company's stockholders, to issue up to        
5,000,000 shares of Preferred Stock in one or more series. Each such series of  
Preferred Stock will have such rights, preferences, privileges and restrictions,
including voting rights, dividend rights, conversion rights, redemption         
privileges and liquidation preferences, as will be determined by the Board of   
Directors. Holding Company has no present plans to issue any shares of Preferred
Stock.                                                                          

 The purpose of authorizing the Board of Directors of Holding Company to
issue Preferred Stock and determine its rights and preferences is to eliminate  
delays associated with a stockholder vote on specific issuances. The issuance of
Preferred Stock, while providing desirable flexibility in connection with       
possible acquisitions and other corporate purposes, could have the effect of    
making it more difficult for a third party to acquire, or of discouraging a     
third party from acquiring, a majority of the outstanding voting stock of       
Holding Company.                                                                

REGISTRATION RIGHTS                                                             

  On April 7, 1994, Great Bay entered into a registration rights agreement
(the "Registration Rights Agreement") with certain persons and entities (the    
"Rightsholders"), including Omega Capital and its affiliates and Elliott. If the
Merger is consummated, Great Bay will assign to Holding Company and Holding     
Company will assume the Registration Rights Agreement (which upon such          
assignment and assumption will be applicable to Holding Company Common Stock    
instead of Great Bay Common Stock). Pursuant to the Registration Rights         
Agreement, the Rightsholders are entitled to require Great Bay to register,     
under the Securities Act, up to a total of 5,820,530 shares of outstanding Great
Bay Common Stock (the "Registrable Shares"). The Registration Rights Agreement  
provides that in the event that a single Rightsholder requests the registration 
of a number of shares equal to or greater than 5% of the outstanding Great Bay  
Common Stock at the time of the request, Great Bay is required to effect the    
registration of such shares and the shares of other Rightsholders requesting    
registration. The Registration Rights Agreement also provides that in the event 
Great Bay proposes to register any of its securities under the Securities Act at
any time or times, the Rightsholders, subject to certain exceptions, shall be   
entitled to include Registrable Shares in such registration.                    

     Great Bay is generally required to bear all the expenses of the first three
registrations initiated at the request of the Rightsholders, excluding any      
underwriting discounts, commissions or transfer taxes. Great Bay filed a        
Registration Statement on Form S-1 covering the sale of 5,820,530 shares of     
Great Bay Common Stock (the "S-1 Registration Statement"), at the request of    
certain Rightsholders under the Registration Rights Agreement. The S-1          
Registration Statement became effective on April 17, 1995. If the Merger is     
consummated, Holding Company expects to file a registration statement shortly   
thereafter covering the Holding Company Common Stock held by the Rightsholders. 

  The Registration Rights Agreement provides for liquidated damages in the
event that Great Bay fails to file a registration statement within 60 days of a 
request pursuant to the Registration Rights Agreement or in the event that such 
registration statement has not become effective within 180 days of such request.
Liquidated damages range between 1% and 2% of the value of the number of shares 
requested to be registered.                                                     

    In connection with the PECO Warrant Purchase Agreement (see page 23 of the
Registration Statement), Great Bay granted registration rights to holders of    
shares of Great Bay Common Stock issued pursuant to the PECO Warrant (the "PECO 
Registrable Shares"). If the Merger is consummated, Great Bay will assign to    
Holding Company and Holding Company will assume the PECO Warrant Purchase       
Agreement (which upon such assignment and assumption will be applicable to      
Holding Company Common Stock instead of Great Bay Common Stock). If at any time 
after the earlier of termination in accordance with the terms of the PECO       
Services Agreement or September 30, 1998 the PECO Registrable Shares are not    
eligible and                                                                    

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continue to be ineligible for resale pursuant to Rule 144(k) under the          
Securities Act, Great Bay is required to effect the registration of the PECO    
Registrable Shares having an aggregate offering price of at least $500,000 owned
by a PECO rightsholder(s) (and the shares of other PECO rightsholders)          
requesting registration. Great Bay is not required to effect more than one such 
registration and is not required to effect any registration within six months   
after the effective date of any other registration statement of Great Bay.      

    The Warrant Purchase Agreement also provides that, until November 3, 2005,
if Great Bay proposes to file a registration statement covering the sale of     
Great Bay Common Stock, Great Bay will give written notice to all holders of    
PECO Registrable Shares and Great Bay will use reasonable efforts to cause all  
PECO Registrable Shares which Great Bay has been requested by its holders to    
register to be registered. Great Bay is generally required to bear all the      
expenses of registrations under the Warrant Purchase Agreement, excluding any   
underwriting discounts, commissions or expenses of the PECO Rightholders' own   
counsel.                                                                        

COMPARISON OF STOCKHOLDER RIGHTS

    The rights of the holders of Great Bay Common Stock are currently governed
by the New Hampshire Law, by public utility laws, and by the Great Bay Articles 
and By-Laws. As a result of the Merger, shareholders of Great Bay not exercising
dissenters' rights will become stockholders of Holding Company, a Delaware      
corporation but not a public utility, and as such their rights will be governed 
by the Delaware Law (excluding public utility laws) and by the Holding Company  
Certificate and By-Laws. Certain differences arise from this change in governing
law as well as from distinctions between the Great Bay Articles and By-Laws and 
the Holding Company Certificate and By-Laws.                                    

    The following summary does not purport to be a complete description of the
rights of stockholders of Holding Company or the rights of shareholders of Great
Bay or a comprehensive comparison of such rights, and is qualified in its       
entirety by reference to the New Hampshire Law and the Delaware Law, and the    
Great Bay Articles and By-Laws and the Holding Company Certificate and By-Laws. 

AUTHORIZED CAPITAL STOCK                                                        

Great Bay.  Great Bay has, as of the date of this Proxy               
Statement/Prospectus, 20,000,000 shares of authorized Common Stock, par value   
$.01 per share, of which 7,999,948 shares are issued and outstanding and        
5,000,000 shares of Preferred Stock, par value $.01 per share, of which no      
shares are issued and outstanding.                                              

   Holding Company.  The Holding Company Certificate authorizes the issuance
of 20,000,000 shares of Holding Company Common Stock, par value $.01 per share, 
and 5,000,000 shares of Holding Company Preferred Stock, par value $.01 per     
share. There are currently 1,000 shares of Holding Company Common Stock issued  
and outstanding, all of which are held by Great Bay. Upon the consummation of   
the Merger, Holding Company will have the same number of issued and outstanding 
shares of Holding Company Common Stock (assuming no exercise of dissenters'     
rights) as the number of shares of Great Bay Common Stock issued and outstanding
immediately before the Merger. See "Description of Holding Company Capital      
Stock."                                                                         

Under the Holding Company Certificate, the Board of Directors of the  
Holding Company is authorized to issue preferred stock in series and to fix the 
powers, designations, preferences, or other rights of the shares and the        
qualifications, limitations, and restrictions of such shares. Holding Company   
Preferred Stock issued by Holding Company after the Merger may rank             
preferentially to the Holding Company Common Stock as to dividend rights,       
liquidation preferences, or both, may have full or limited voting rights        
(including multiple voting rights and voting rights as a class), and may be     
convertible into shares of Holding Company Common Stock. Holding Company has no 
present plans or understandings for the issuance of any preferred stock.        
However, any such issuance in the future could adversely affect the rights of   
holders of Holding Company Common Stock, particularly if the preferred stock is 
given preferential dividend, liquidation or voting rights.                      

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PREEMPTIVE RIGHTS                                                               

    Great Bay.  Under the New Hampshire Law, security holders of a corporation
do not have a preemptive right to acquire the corporation's unissued shares,    
except to the extent provided in the corporation's articles of incorporation.   
The Great Bay Articles of Incorporation eliminate preemptive rights to security 
holders.                                                                        

     Holding Company.  Under the Delaware Law, security holders of a corporation
have only such preemptive rights to acquire the corporation's unissued shares as
may be provided in the corporation's certificate of incorporation. The Holding  
Company Certificate of Incorporation does not grant any preemptive rights to    
security holders.                                                               

VOTING RIGHTS                                                                   

Great Bay.  All voting rights in Great Bay are currently vested in the
holders of Great Bay Common Stock. The Great Bay Articles also authorize the    
issuance of preferred stock. Each share of Great Bay Common Stock is entitled to
one vote on all matters, without any right to cumulative voting in the election 
of directors.                                                                   

  Holding Company.  All voting rights in Holding Company will be initially
vested in the holders of Holding Company Common Stock and are subject to the    
authority contained in the Holding Company Certificate for the Holding Company  
Board to issue Holding Company Preferred Stock with voting rights. Each share of
Holding Company Common Stock will be entitled to one vote on all matters        
presented to the stockholders, without any right to cumulative voting in the    
election of directors. See "Comparison of Stockholder Rights -- Holding Company 
Preferred Stock."                                                               

ACTIONS BY STOCKHOLDERS WITHOUT A MEETING                                       

   Great Bay.  The New Hampshire Law allows any action required to be taken,
or which may be taken, at the annual or special meeting of shareholders to be   
taken without a meeting, without prior notice and without a vote if the written 
consent of the holders of all shares entitled to vote thereon were present and  
voted is delivered to the Corporation. The Great Bay Articles provide that      
shareholders may not take any action by written consent in lieu of a meeting.   

Holding Company.  Unless a corporation's certificate of incorporation 
provides otherwise, the Delaware Law allows any action required to be taken, or 
which may be taken, at an annual or special meeting of stockholders to be taken 
without a meeting, without prior notice and without a vote if the written       
consent of not less than the minimum number of votes that would be necessary to 
authorize or take such action at a meeting at which all shares entitled to vote 
thereon were present and voted is delivered to the corporation. The Holding     
Company By-Laws provide that stockholders may not take any action by written    
consent in lieu of a meeting.                                                   

DIVIDENDS AND OTHER DISTRIBUTIONS                                               

     Great Bay.  The New Hampshire Law permits a corporation to pay dividends to
its shareholders unless (i) the corporation would not be able to pay its debts  
as they become due in the usual course of business or (ii) the corporation's    
total assets would be less than the sum of its total liabilities plus the amount
that would be needed, if the corporation were to be dissolved at the time of    
distribution, to satisfy the preferential rights of shareholders whose          
preferential rights upon dissolution are superior to those receiving the        
distribution. In addition, the New Hampshire Law generally provides that a      
corporation may acquire its own shares as authorized but unissued shares.       

     Holding Company.  The Delaware Law permits a corporation to declare and pay
dividends out of surplus (defined as net assets minus capital) or, if there is  
no surplus, out of net profits for the fiscal year in which the dividend is     
declared and/or for the preceding fiscal year as long as the amount of capital  
of the corporation following the declaration and payment of the dividend is not 
less than the aggregate amount of the capital represented by the issued and     
outstanding stock of all classes having a preference upon the distribution of   
assets. In addition, the Delaware Law generally provides that a corporation may 
redeem or repurchase its shares only if such redemption or repurchase would not 
impair the capital of the corporation.                                          

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NUMBER AND QUALIFICATION OF DIRECTORS; SIZE OF BOARD                            

     Great Bay.  Under the New Hampshire Law, the minimum number of directors is
one, with the exact number of directors fixed in accordance with the articles of
incorporation or by-laws. The directors may increase or decrease the number of  
directors by 30 percent or less than the number of directors last approved by   
the shareholders. Only the shareholders may increase or decrease the number of  
directors by more than 30 percent of the number of directors last approved by   
the shareholders.                                                               

     The Great Bay By-Laws provide that the number of directors which constitute
the Great Bay Board will be determined by resolution of shareholders or the     
Great Bay Board, but in no event will be less than three or more than eight. The
size of the Great Bay Board is currently fixed at four. Only the shareholders   
may change the range of the size of the Great Bay Board to be less than three or
more than eight.                                                                

   Holding Company.  Under the Delaware Law, the minimum number of directors
is also one. The number of directors constituting the board of directors of a   
Delaware corporation may be specified in the by-laws or the certificate of      
incorporation. Accordingly, unless the certificate of incorporation provides    
otherwise, the directors may change the number of directors constituting the    
board by amending the by-laws. If the number of directors is specified in the   
certificate of incorporation, then any change in the number of directors must be
made pursuant to a certificate of amendment approved by the shareholders.       

The Holding Company By-Laws provide that the number of directors which
constitute the Holding Company Board will be determined by resolution of the    
directors. The directors will be elected by the vote of the holders of a        
majority of the shares of stock present, in person or by proxy, at the annual   
meeting of stockholders and entitled to vote. The number of directors may be    
increased by the vote of a majority of the directors in office. The number of   
directors may be decreased by the vote of a majority of the directors in office,
but only to eliminate vacancies caused by the death, resignation, removal or    
expiration of the term of one or more of the directors.                         

CUMULATIVE VOTING                                                               

    Under the New Hampshire Law and the Delaware Law, cumulative voting in the
election of directors is permissible, but not mandatory. Neither the Great Bay  
Articles nor the Holding Company Certificate permits cumulative voting in the   
election of directors.                                                          

REMOVAL OF DIRECTORS                                                            

  Great Bay.  The New Hampshire Law permits the shareholders to remove any
director or the entire board of directors with or without cause, by the vote of 
the holders of a majority of the shares entitled to vote unless the             
corporation's articles of incorporation provide that directors may be removed   
only for cause or by a greater voting requirement. The Great Bay Articles       
provide that directors may be removed from office only for cause by the         
affirmative vote of the holders of at least two-thirds of the shares of capital 
stock issued and outstanding and entitled to vote.                              

Holding Company.  Unless a corporation's certificate of incorporation 
provides otherwise, the Delaware Law allows directors of a corporation to be    
removed with or without cause by the vote of the holders of a majority of the   
shares entitled to vote in any election of directors. The Holding Company       
Certificate provides that directors may be removed only for cause by the        
affirmative vote of the holders of at least two-thirds of the shares of capital 
stock issued and outstanding and entitled to vote. The affirmative vote of the  
holders of 75% of the issued and outstanding shares of Holding Company capital  
stock is required to amend or repeal, or adopt any provision inconsistent with, 
this provision of the Holding Company Certificate.                              

SPECIAL MEETING OF STOCKHOLDERS                                                 

Great Bay.  Under the New Hampshire Law, a special meeting of the     
shareholders may be called by the board of directors, by the person or persons  
authorized to do so by the articles of incorporation or by-laws, or by security 
holders of at least ten percent of all the shares entitled to vote on any issue 
to be considered at the special meeting. The Great Bay By-Laws provide that a   
special meeting of shareholders may be called only by the president, the board  
of directors or a holder or holders of at least ten percent of the capital stock
entitled to vote at the meeting.                                                

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     Holding Company.  Under the Delaware Law, a special meeting of stockholders
may be called by the board of directors and by such other person or persons     
authorized by the corporation's certificate of incorporation or by-laws. The    
Holding Company Certificate provides that a special meeting of stockholders may 
be called only by the Chairman of the Board of Directors, the Chief Executive   
Officer (or if there is no Chief Executive Officer, the President) or the Board 
of Directors. The affirmative vote of the holders of 75% of the issued and      
outstanding shares of Holding Company capital stock is required to amend or     
repeal, or adopt any provision inconsistent with, this provision of the Holding 
Company Certificate.                                                            

AMENDMENT OF CERTIFICATE/ARTICLES OF INCORPORATION AND BY-LAWS                  

Great Bay.  Under the New Hampshire Law, unless the articles of       
incorporation provide otherwise, a corporation's board of directors has the     
power to adopt certain amendments to the corporation's articles of incorporation
without shareholder action. Other amendments to the articles of incorporation   
require the approval of the board of directors and the approval of the majority 
of the outstanding stock entitled to vote thereon by every voting group with    
respect to which the amendment would create dissenters' rights, and the approval
of a majority of the votes cast by any other voting group. Under the New        
Hampshire Law, the holders of outstanding shares of a class are entitled to vote
as a separate voting group on certain proposed amendments that would, among     
other things, cause an increase or decrease in the aggregate number of          
authorized shares of such class, an exchange or reclassification of the shares  
of such class into shares of another class or the alteration or change in the   
powers, preferences or special rights of the shares of such class.              

     Under the New Hampshire Law, an amendment to a corporation's by-laws may be
made with the approval of the corporation's board of directors, unless the      
articles of incorporation or the New Hampshire Law reserves this power          
exclusively to the shareholders or the shareholders in amending or repealing a  
particular by-law expressly so provide.                                         

 The Great Bay Articles expressly provide that the board of directors is
authorized to adopt, amend or repeal the by-laws of the corporation. In         
addition, the Great Bay Articles provide that the affirmative vote of the       
holders of at least seventy-five percent of the shares of the capital stock of  
Great Bay issued and outstanding and entitled to vote is required to change any 
provision inconsistent with certain provisions of the Great Bay By-Laws relating
to directors, the nomination of directors, notice of business at the annual     
meeting, organization of the annual meeting or amendments of the Great Bay      
By-Laws.                                                                        

   Holding Company.  Under the Delaware Law, an amendment to a corporation's
certificate of incorporation requires the approval of the board of directors and
the approval of a majority of the outstanding stock entitled to vote thereon and
a majority of the outstanding stock of each class entitled to vote thereon.     
Under the Delaware Law, the holders of the outstanding shares of a class        
generally are entitled to vote as a separate class on a proposed amendment that 
would increase or decrease the aggregate number of authorized shares of such    
class, increase or decrease the par value of the shares of such class or alter  
or change the powers, preferences or special rights of the shares of such class 
so as to affect them adversely. Under the Delaware Law, a provision in a        
corporation's certificate of incorporation requiring a super-majority vote of   
the board of directors or stockholders may be amended only by such              
super-majority vote. The affirmative vote of the holders of 75% of the issued   
and outstanding shares of Holding Company capital stock is required to amend or 
repeal certain provisions, or adopt provisions inconsistent with existing       
provisions. See "Removal of Directors" and "Special Meetings of Stockholders."  

  Under the Delaware Law, an amendment to a corporation's by-laws requires
the approval of the stockholders, unless the certificate of incorporation       
confers the power to amend the by-laws upon the board of directors. The Holding 
Company Certificate expressly provides that the board of directors or the       
stockholders are authorized to adopt, amend or repeal the Holding Company       
By-Laws. The Holding Company By-Laws require the affirmative vote of the holders
of at least seventy-five percent of the capital stock of Holding Company issued 
and outstanding to amend or repeal any provisions inconsistent with certain     
provisions of the Holding Company in the By-Laws relating to directors,         
stockholder special meetings, organization at the annual meeting, or amendments 
of the Holding Company By-Laws.                                                 

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DIRECTOR'S LIABILITY AND INDEMNIFICATION                                        

   Great Bay.  Under the New Hampshire Law, a corporation may include in its
articles of incorporation a provision eliminating or limiting the personal      
liability of a director to the corporation or its stockholders for monetary     
damages for any action, or any failure to take action, as a director, except    
liability for: (i) the amount of a financial benefit received by a director to  
which he or she is not entitled, (ii) an intentional infliction of harm on the  
corporation or the shareholders, (iii) a violation of Section 293-A:8.33        
(liability for unlawful distributions), or (iv) an intentional violation of     
criminal law. The Great Bay Articles include this provision.                    

    Holding Company.  Under the Delaware Law, a corporation may include in its
certificate of incorporation a provision eliminating or limiting the personal   
liability of a director to the corporation or its stockholders for monetary     
damages for breach of fiduciary duty as a director under a broad range of       
circumstances. The Holding Company Certificate includes a provision which       
eliminates a director's liability for monetary damages for a breach of a        
director's duty of care to Holding Company or its stockholders (the "Delaware   
Duty of Care Provision"). Pursuant to the Delaware Duty of Care Provision, no   
director of Holding Company will be liable for monetary damages for negligence  
or gross negligence occurring after the Merger. Each director will remain       
personally liable to Holding Company for failure to act in good faith or to     
comply with his or her duty of loyalty to Holding Company. The directors will   
continue to be subject to equitable remedies, although such remedies in some    
circumstances may not be available as a practical matter. In addition, under the
Delaware Law, each director will remain liable for engaging in a transaction    
from which such director derives an improper personal benefit, for paying       
unlawful dividends or unlawful stock repurchases or redemptions or for engaging 
in intentional misconduct or a knowing violation of law. Moreover, the Delaware 
Duty of Care Provision also will not limit directors' liability for violations  
of the federal securities laws. With regard to directors who are also officers  
of Holding Company, these persons would be insulated from liability only with   
respect to their conduct as directors and would not be insulated from liability 
for acts or omissions in their capacity as officers.                            

    The Delaware Law authorizes a corporation to indemnify any person who is a
party to any threatened, pending or completed action, suit or proceeding, other 
than an action by or in the right of the corporation, by reason of the fact that
he or she is or was a director, officer, employee or agent of the corporation,  
or is or was serving at the request of the corporation at a like position of    
another corporation (the "Indemnitee") against expenses, judgments, fines and   
amounts paid in settlement actually and reasonably incurred by him or her in    
connection with such action if the Indemnitee acted in good faith, and in a     
manner he or she reasonably believed to be in or not opposed to the best        
interests of the corporation (or, with respect to a criminal action, had no     
reasonable cause to believe his or her conduct was unlawful). The Delaware Law  
also authorizes a corporation to indemnify such person in connection with any   
threatened, pending or completed action by or in the right of the corporation to
procure a judgment in its favor against expenses actually and reasonably        
incurred by him or her in connection with the defense or settlement of such     
action if he or she acted with the requisite conduct. The New Hampshire Law     
contains similar provisions.                                                    

   The Holding Company Certificate provides that Holding Company is required
to indemnify its officers and directors to the full extent permitted by law (i) 
against all expenses, judgments, fines and amounts paid or incurred in          
connection with any civil or criminal action, suit or proceeding and (ii)       
against all expenses incurred in connection with the defense or settlement of   
any action or suit, by or in the right of the corporation, or otherwise.        

ANTI-TAKEOVER STATUTES                                                          

  Great Bay.  The New Hampshire Law does not contain a statutory provision
comparable to Section 203 (as defined below) of the Delaware Law.               

Holding Company.  Section 203 of the Delaware Law ("Section 203") is  
applicable to publicly held corporations organized under the laws of Delaware,  
including Holding Company. Subject to certain exceptions set forth therein,     
Section 203 provides that a corporation will not engage in any business         
combination with any "interested stockholder" for a three-year period following 
the time that such stockholder becomes an interested stockholder unless (a)     
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the business combination or the transaction which resulted in the stockholder   
becoming an interested stockholder, (b) upon consummation of the transaction    
which resulted in the stockholder becoming an interested stockholder, the       
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding certain shares) or 
(c) at or subsequent to such time, the business combination is approved by the  
board of directors of the corporation and by the affirmative vote of a least    
66 2/3% of the outstanding voting stock which is not owned by the interested    
stockholder. Except as specified therein, an interested stockholder is defined  
to mean any person (other than the corporation and any direct or indirect       
majority-owned subsidiary of the corporation) that (i) is the owner of 15% or   
more of the outstanding voting stock of the corporation or (ii) is an affiliate 
or associate of the corporation and was the owner of 15% or more of the         
outstanding voting stock of the corporation at any time within the three-year   
period immediately prior to the date on which it is sought to be determined     
whether such person is an interested stockholder and the affiliates and         
associates of such person referred to in (i) or (ii) of this sentence. Under    
certain circumstances, Section 203 of the Delaware Law makes it more difficult  
for an interested stockholder to effect various business combinations with a    
corporation for a three-year period, although the stockholders may, by adopting 
an amendment to the corporation's certificate of incorporation or by-laws, elect
not to be governed by this section, effective twelve months after adoption. It  
is anticipated that the provisions of Section 203 of the Delaware Law may       
encourage companies interested in acquiring Holding Company to negotiate in     
advance with the Board of Directors of Holding Company. Holding Company will be 
subject to Section 203.                                                         

SALE OF ASSETS                                                                  

     Great Bay.  Under the New Hampshire Law, a sale or lease or exchange of all
or substantially all of the assets of a corporation in the regular course of its
business or to a subsidiary of the corporation need only be authorized by the   
board of directors. However, in other circumstances, the approval of a majority 
of the shares of stock entitled to vote on the action is also required. The     
NHPUC also has jurisdiction over the sale of assets of a public utility company,
such as Great Bay. New Hampshire law does not require stockholder consent to a  
mortgage or pledge of the property or assets of the corporation unless the      
articles of incorporation state otherwise; the Great Bay Articles do not require
stockholder consent for these actions.                                          

Holding Company.  The Delaware Law provides that a sale of all or     
substantially all of the assets of the corporation requires action by the board 
of directors and the vote of a majority of the outstanding stock entitled to    
vote thereon. Delaware Law does not require stockholder consent to a mortgage or
pledge of the property or assets of the corporation unless the certificate of   
incorporation state otherwise; the Holding Company Certificate does not require 
stockholder consent for these actions.                                          

APPRAISAL RIGHTS                                                                

   Great Bay.  Shareholders of a New Hampshire corporation are provided with
the right to dissent in the cases of a merger, share exchange or sale or        
exchange of substantially all of the property and assets of a corporation which 
is not in the regular course of business. Shareholders of a New Hampshire       
corporation also have the right to dissent in the event of certain materially   
adverse changes with respect to the dissenting shares. Dissenting shareholders  
have the right to obtain payment of the fair value of their shares if they make 
a proper demand. See "Rights of Dissenting Shareholders."                       

Holding Company.  The Delaware Law provides for appraisal rights for  
dissenting stockholders only in the case of a merger or consolidation. However, 
the Delaware Law denies such rights to holders of shares listed on a national   
securities exchange or on the Nasdaq National Market System or held of record by
more than 2,000 stockholders, unless the plan of merger or consolidation        
converts such shares into anything other than stock of the surviving corporation
or stock of another corporation which is either listed on a national securities 
exchange or designated as a market system security on an interdealer quotation  
system by the National Association of Securities Dealers, Inc. or held of record
by more than 2,000 stockholders. Furthermore, there are no appraisal rights in  
the case of a sale of assets or charter amendment unless the certificate of     
incorporation explicitly states otherwise; the Holding Company Certificate does 
not state otherwise. Shares of Holding Company Common Stock will be listed on   
the Nasdaq National Market System.                                              

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-- PROPOSAL TWO --

THE HOLDING COMPANY STOCK OPTION PLAN 

The Holding Company Board unanimously adopted, subject to stockholder 
approval, the Holding Company Stock Option Plan at its meeting held on April 16,
1996. Under the terms of the Holding Company Stock Option Plan, Holding Company 
is authorized to grant options to purchase up to 600,000 shares of Holding      
Company Common Stock to employees, officers or directors of, and consultants and
advisors to, Holding Company and its subsidiaries. Holding Company may grant    
options that are intended to qualify as incentive stock options within the      
meaning of Section 422 of the Code or nonstatutory options not intended to      
qualify as incentive stock options. The purpose of the Holding Company Stock    
Option Plan is to ensure that Holding Company may continue to attract and retain
key employees, officers, directors, consultants and advisors who are expected to
continue to contribute to Holding Company's growth and success. The text of the 
Holding Company Stock Option Plan is attached as Annex III to this Proxy        
Statement/Prospectus. Set forth below is a summary of the material provisions of
the Holding Company Stock Option Plan.                                          

   If the Merger is consummated, at the Effective Date, each holder of Great
Bay Options under the Great Bay Option Plan will be granted substitute options  
by Holding Company under the Holding Company Stock Option Plan to purchase an   
equal number of shares of Holding Company Common Stock on the same terms and at 
the same exercise price per share as presently provided for by the Great Bay    
Options. The Holding Company Stock Option Plan is identical to the Great Bay    
Stock Option Plan and the Great Bay Stock Option Plan will be terminated if the 
Merger is consummated. If the Merger is not consummated, the Holding Company    
Stock Option Plan will not be implemented.                                      

ADMINISTRATION AND ELIGIBILITY                                                  

The Holding Company Stock Option Plan is administered by the Holding  
Company Board, which may delegate any or all of its power to a committee        
appointed by the Holding Company Board. Subject to the express provisions of the
Holding Company Stock Option Plan, the Holding Company Board shall have the     
authority to construe the respective option agreements, to prescribe, amend and 
rescind rules and regulations relating to the Holding Company Stock Option Plan 
and to make all other determinations in the judgment of the Holding Company     
Board necessary or desirable for the administration of the Holding Company Stock
Option Plan.                                                                    

     Options may be granted to persons who are, at the time of grant, employees,
officers or directors of, or consultants or advisors to, Holding Company,       
provided that incentive stock options may be granted only to persons who are    
eligible to receive such options under Section 422 of the Code. The granting of 
options to directors and officers shall be determined either (a) by the Holding 
Company Board of which all members shall be "disinterested persons" (as defined 
in the Holding Company Stock Option Plan) or (b) by a committee of two or more  
directors having full authority to act on the matter, of which all members shall
be "disinterested persons."                                                     

   The Holding Company Stock Option Plan provides for certain formula grants
to non-employee directors. Every non-employee director who is first elected as a
director after the date that Great Bay becomes a wholly-owned subsidiary of     
Holding Company will receive a grant of an option for 20,000 shares upon his or 
her election. In addition, every non-employee director shall receive a grant of 
an option for 20,000 shares upon such director's first re-election to the       
Holding Company Board and an additional grant of an option for 20,000 shares    
upon such director's second re-election to the Holding Company Board. If a      
Change in Control of Holding Company (as defined below) occurs, there shall be  
granted to each non-employee director then serving an option for a number of    
shares equal to 60,000 reduced by the number of shares for which options were   
previously granted to such director; the exercise price for such option shall be
the exercise price for the last option granted to the director prior to the     
Change in Control of Holding Company. Except as otherwise provided in the event 
of a Change in Control of Holding Company, the exercise price for an option     
granted to a non-employee director shall be 100% of the fair market value of    
such stock, as determined by the Holding Company Board, at the time of grant of 
such option.                                                                    

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NUMBER OF SHARES AND EXERCISE PRICE                                             

     Subject to adjustment as provided in the Holding Company Stock Option Plan,
the maximum number of shares of Common Stock of Holding Company that may be     
issued and sold under the Holding Company Stock Option Plan is 600,000 shares.  
Subject to adjustment as provided in the Holding Company Stock Option Plan, the 
maximum number of shares with respect to which options may be granted to any    
individual other than non-employee directors under the Holding Company Stock    
Option Plan will not exceed 400,000 shares of Common Stock during the ten-year  
term of the Holding Company Stock Option Plan.                                  

  The Holding Company Board selects the exercise price per share of stock,
provided the exercise price cannot be less than (a) 110% of the fair market     
value for incentive stock options granted to a holder of more than 10% of       
Holding Company's capital stock, (b) 100% of fair market value for incentive    
stock options generally and (c) 50% of fair market value for nonstatutory       
options. The option price may be paid in cash or shares of Holding Company      
Common Stock owned by the optionee as provided in the Holding Company Stock     
Option Plan. The Holding Company Board shall also determine the expiration of   
the option period, provided that (i) in the case of incentive stock options, the
date shall not be later than 10 years after the date on which the option is     
granted, (ii) in the case of incentive stock options granted to a holder of more
than 10% of Holding Company's capital stock, such date shall not be later than  
five years after the date on which the option is granted, and (iii) in all      
cases, options shall be subject to earlier termination as provided in the       
Holding Company Stock Option Plan.                                              

TERMS OF OPTIONS                                                                

   All options are nontransferable other than by will or the laws of descent
and distribution; provided, however, that nonstatutory options may be           
transferred by certain persons required to file reports under Section 16(a) of  
the Exchange Act pursuant to a qualified domestic relations order (as defined in
Rule 16b-3 promulgated under the Exchange Act). Holders of incentive stock      
options may generally exercise such options up to three months after termination
of employment; however, individual option agreements may designate a longer     
exercise period. Any exercise of an incentive stock option after such           
three-month period will be treated as the exercise of a non-statutory option    
under the Holding Company Stock Option Plan. If termination of employment       
results from death or disability, such options may be exercised up to one year  
after termination. Holders of nonstatutory options may exercise such options    
after termination of employment with Holding Company during the period specified
in the applicable option agreement.                                             

The Holding Company Board (or its appointed committee) determines when
options granted under the Holding Company Stock Option Plan become exercisable  
(generally in installments at the rate of 33% or 50% per year). The Holding     
Company Board may accelerate the date on which any option granted may be        
exercised or extend the period during which any particular option may be        
exercised, provided that no such extension shall be permitted if it would cause 
the Holding Company Stock Option Plan to fail to comply with Section 422 of the 
Code, or with Rule 16b-3 promulgated under the Exchange Act.                    

    In the event of a Change in Control of Holding Company, the exercise dates
of all options then outstanding shall be accelerated in full and any restriction
on exercising outstanding options issued pursuant to the Holding Company Stock  
Option Plan prior to any given date shall terminate. For purposes of the Holding
Company Stock Option Plan, a "Change in Control of Holding Company" shall have  
occurred if (i) any person becomes the beneficial owner of securities of Holding
Company representing 30% or more of the combined voting power of Holding        
Company's then outstanding securities, (ii) during any period of two consecutive
years ending during the term of the Holding Company Stock Option Plan,          
individuals who at the beginning of such period constitute the Holding Company  
Board, and any new director whose election by the Holding Company Board or      
nomination for election by Holding Company's stockholders was approved by a vote
of at least two-thirds of the Directors then still in office who were either    
Directors at the beginning of the period or whose election or whose nomination  
for election was previously so approved (collectively, the "Disinterested       
Directors") cease for any reason to constitute a majority of the Holding Company
Board, (iii) the stockholders of Holding Company approve a merger or            
consolidation of Holding Company with any other corporation (other than a merger
or consolidation in which the stockholders of Holding Company own more than 50% 
of the combined voting power of the surviving entity, or a merger or            
consolidation effected to                                                       

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implement a recapitalization of Holding Company, or a merger or consolidation   
which has been approved by a majority of the Disinterested Directors), or (iv)  
the stockholders of Holding Company approve a plan of complete liquidation or an
agreement for the sale or disposition by Holding Company of all or substantially
all of Holding Company's assets which, in either case, has not previously been  
approved by a majority of the Disinterested Directors. Notwithstanding the      
foregoing, the Holding Company Board may, by a resolution adopted by two-thirds 
of the Disinterested Directors, declare that any such event will not constitute 
a Change in Control of Holding Company.                                         

     The Holding Company Board shall have the authority, with the consent of the
affected optionee, to cancel or amend any outstanding options under the Holding 
Company Stock Option Plan and to grant in substitution therefor new options     
covering the same or a different number of shares of Common Stock and having an 
exercise price per share which may be lower or higher than the exercise price   
per share of the outstanding options.                                           

     Subject to the prior approval of the Holding Company Board, an optionee may
elect to satisfy any tax withholding obligations with respect to shares issued  
upon exercise of options by causing Holding Company to withhold shares of Common
Stock otherwise issuable upon the exercise of an option or by delivering to     
Holding Company shares of Common Stock then owned by such optionee. The shares  
so delivered or withheld shall have a fair market value equal to such           
withholding obligation.                                                         

AMENDMENT AND TERMINATION                                                       

The Holding Company Board may at any time modify or amend the Holding 
Company Stock Option Plan in any respect, except that if at any time the        
approval of the stockholders of Holding Company is required under Section 422 of
the Code or any successor provision with respect to incentive stock options or  
under Rule 16b-3 promulgated under the Exchange Act with respect to options held
by persons who are required to file reports pursuant to Section 16(a) of the    
Exchange Act, the Holding Company Board may not effect such modification or     
amendment without such approval. The termination or any amendment of the Holding
Company Stock Option Plan shall not, without the consent of an optionee, affect 
his or her rights under an option previously granted.                           

   In the event of a consolidation or merger or sale of all or substantially
all of the assets of Holding Company in which outstanding shares of Holding     
Company Common Stock are exchanged for securities, cash or other property of any
other corporation or business entity or in the event of a liquidation of Holding
Company, the Holding Company Board or the board of directors of any corporation 
assuming the obligations of Holding Company may, in its discretion, take any one
or more of the following actions as to outstanding options: (a) provide that    
such options shall be assumed, or equivalent options shall be substituted, by   
the acquiring or succeeding corporation (or an affiliate thereof), (b) provide  
that all unexercised options will terminate immediately prior to the            
consummation of such transaction unless exercised by the optionee within a      
specified period following the date of such notice, (c) if the event involves a 
cash payment for each share surrendered in the merger, make or provide for a    
cash payment to the optionholders equal to the difference between the merger    
consideration per share and the exercise price per share for all then           
outstanding options and (d) provide that all or any outstanding options shall   
become exercisable in full immediately prior to such event.                     

The Holding Company Stock Option Plan shall terminate with respect to 
incentive stock options upon the earlier of April 15, 2006, or the date on which
all shares available for issuance under the Holding Company Stock Option Plan   
shall have been issued pursuant to the exercise or cancellation of options      
granted thereunder. The Holding Company Stock Option Plan shall terminate with  
respect to nonstatutory options on April 15, 2006.                              

    The Holding Company Stock Option Plan became effective when adopted by the
Holding Company Board, but no incentive stock option granted under the Holding  
Company Stock Option Plan shall become exercisable unless and until the Holding 
Company Stock Option Plan has been approved by Holding Company's stockholders.  

As option grants under the Holding Company Stock Option Plan are      
discretionary, except for options granted to non-employee directors pursuant to 
the formula set forth in the Holding Company Stock Option                       

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                                                        [Enlarge/Download Table]
Plan. Holding Company cannot now determine the number of options to be received             
by any particular current executive officer, by all current executive officers              
as a group or by non-executive officer employees as a group. The number of such             
options will be determined by the Holding Company Board, or a committee thereof,            
pursuant to the terms of the Holding Company Stock Option Plan. However, if the             
Holding Company Stock Option Plan is approved and the Merger is consummated,                
each executive officer and non-executive director of Great Bay will receive                 
Holding Company Options which will be granted in substitution for Great Bay                 
Options that are currently outstanding to purchase up to the number of shares of            
Holding Company's Common Stock set forth opposite his name below:                           

                               NEW PLAN BENEFITS                                            
                 BAYCORP HOLDINGS, LTD. 1996 STOCK OPTION PLAN                              


                                                                         DOLLAR      NUMBER 
NAME AND POSITION                                                      VALUE($)(1)  OF UNITS
-----------------                                                      -----------  --------
                                                                                            
John A. Tillinghast..................................................      0         200,000
  President and Chief                                                                       
  Executive Officer                                                                         
Frank W. Getman Jr...................................................      0          75,000
  Vice President, Secretary                                                                 
  and General Counsel                                                                       
Non-Executive Director Group (3 persons).............................      0         100,000

<FN>                                                                                        
---------------                                                                             
(1) The option exercise price for the options will be equal to the fair market              
    value per share of Great Bay's Common Stock on the date of grant of the                 
    Great Bay Option in replacement of which Holding Company Options will be                
    granted. The Dollar Value presented above (i) is based on the fair market               
    value of the Great Bay Common Stock on May 23, 1996 ($7.875) less the option            
    exercise price multiplied by the number of options granted and (ii) assumes             
    that stockholder approval of the Holding Company Stock Option Plan has been             
    obtained.                                                                               


FEDERAL INCOME TAX CONSEQUENCES                                                 

   Options granted under the Holding Company Stock Option Plan may be either
"Incentive Stock Options," as defined in Section 422 of the Code, or            
nonstatutory options.                                                           

  Incentive Stock Options.  If an option granted under the Holding Company
Stock Option Plan is an Incentive Stock Option, the optionee will recognize no  
income upon grant or exercise of the incentive stock option, although the       
optionee will recognize alternative minimum taxable income upon exercise as     
described below. Holding Company will not be entitled to any expense deduction  
for federal income tax purposes. Generally, if an optionee holds shares acquired
upon the exercise of incentive stock options until the later of (a) two years   
from the grant of the option and (b) one year from the date of transfer of the  
purchased shares to him or her (the "Statutory Holding Period"), any gain       
recognized by the optionee on any subsequent sale of the shares will be treated 
as long-term capital gain. The gain recognized upon the sale of the stock is the
difference between the option price and the sale price of the stock. The net    
federal income tax effect on the holder of Incentive Stock Options is to defer, 
until the stock is sold, taxation of any increase in the stock's value from the 
time of grant to the time of exercise.                                          

  If the optionee sells the stock prior to the expiration of the Statutory
Holding Period (a "disqualifying disposition"), he or she will realize taxable  
income at ordinary income tax rates in an amount equal to the lesser of (a) the 
fair market value of the stock on the date of exercise less the option price, or
(b) the amount realized on sale less the option price, and Holding Company will 
receive a corresponding business expense deduction. However, special rules may  
apply if the optionee is an officer, director or 10% stockholder of Holding     
Company. Any additional gain will be treated as long-term capital gain if the   
shares are held for one year or more prior to the sale and as short-term capital
gain if the shares are held for a shorter period. If the optionee sells the     
stock for less than the option price, he or she will recognize a capital loss   
equal to the difference between the sale price and the option price. The loss   
will be a long-term capital loss if the shares are held for one year or more    
prior to the sale and a short-term capital loss if the shares are held for a    
shorter period.                                                                 

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    For purposes of the "alternative minimum tax" applicable to individuals an
Incentive Stock Option is treated the same as a nonstatutory stock option. Thus,
in the year of option exercise an optionee must generally include in his or her 
alternative minimum taxable income the difference between the exercise price and
the fair market value of the stock on the date of exercise. The alternative     
minimum tax is imposed upon an individual's alternative minimum taxable income  
at a rate of 26% to 28%, but only to the extent that such tax exceeds the       
taxpayer's regular income tax liability for the taxable year.                   

 Non-statutory Stock Options.  All other options which do not qualify as
Incentive Stock Options are referred to as non-statutory options. No taxable    
income is recognized by the optionee upon the grant of a non-statutory option.  
The optionee must recognize as ordinary income in the year in which the option  
is exercised the amount by which the fair market value of the purchased shares  
on the date of exercise exceeds the option price. However, where the optionee is
an officer, director or 10% stockholder of Holding Company, the following       
special rules apply. If such a person exercises the option within six months of 
the date of grant, no income will be recognized by the optionee until six months
have expired from the date the option was granted, and the income then          
recognized will include any appreciation in the value of the shares during the  
period between the date of exercise and the date six months after the date of   
grant, unless the optionee makes an election under Section 83(b) of the Code to 
have the difference between the exercise price and fair market value at the time
of exercise recognized as ordinary income as of the time of exercise. Holding   
Company will be entitled to a business expense deduction equal to the amount of 
ordinary income recognized by the optionee. Any additional gain or any loss     
recognized upon the subsequent disposition of the purchased shares will be a    
capital gain or loss, and will be a long-term gain or loss if the shares are    
held for one year or more.                                                      

  THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAX UPON
THE OPTIONEE AND HOLDING COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF      
OPTIONS UNDER THE HOLDING COMPANY STOCK OPTION PLAN, DOES NOT PURPORT TO BE     
COMPLETE, AND DOES NOT DISCUSS THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR
FOREIGN COUNTRY IN WHICH AN OPTIONEE MAY RESIDE.                                

BOARD RECOMMENDATION                                                            

    The Great Bay Board believes that the Holding Company Stock Option Plan is
in the best interests of Holding Company and its stockholders and recommends a  
vote FOR the adoption of this proposal.                                         

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STOCKHOLDER PROPOSALS 

   If the Merger is not consummated by April 16, 1997, Great Bay will hold a
1997 Annual Meeting of Stockholders. Any proposal that a Great Bay shareholder  
intends to present at the 1997 Annual Meeting of Stockholders of Great Bay must 
be submitted to the Secretary of Great Bay at its offices, Cocheco Falls        
Millworks, 100 Main Street, Dover, New Hampshire 03820, no later than November  
22, 1996 in order to be considered for inclusion in the Proxy Statement relating
to that meeting.                                                                

If the Merger is consummated, Holding Company will hold a 1997 Annual 
Meeting of Stockholders. Any proposal that a Holding Company stockholder intends
to present at the 1997 Annual Meeting of Stockholders of Holding Company must be
submitted to the Secretary of Holding Company at its offices, Cocheco Falls     
Millworks, 100 Main Street, Dover, New Hampshire 03820, no later than November  
22, 1996 in order to be considered for inclusion in the Proxy Statement relating
to that meeting.                                                                

LEGAL MATTERS 

     The validity of the shares of Holding Company Common Stock to be offered in
connection with the Merger will be passed upon for Holding Company by Hale and  
Dorr, Boston, Massachusetts. In addition, as a condition to the Merger, Hale and
Dorr will render the tax opinion described in "The Merger -- Certain Federal    
Income Tax Consequences."                                                       

EXPERTS 

 The financial statements as of December 31, 1995 and as of December 31,
1994 and for the year ended December 31, 1995 and the periods from January 1,   
1994 to November 23, 1994 and November 24, 1994 to December 31, 1994 included in
this Proxy Statement/Prospectus and elsewhere in the registration statement, to 
the extent and for the periods indicated in their reports, have been audited by 
Arthur Andersen LLP, independent public accountants, and are included herein in 
reliance upon the authority of said firms as experts in giving said reports.    

The audited balance sheet of Holding Company included in this Proxy   
Statement/Prospectus, to the extent and for the periods indicated in their      
reports, have been audited by Arthur Andersen LLP, independent public           
accountants, and are included herein in reliance upon the authority of said     
firms as experts in giving said reports.                                        

   The statements of loss, retained deficit and cash flow of Great Bay Power
Corporation (formerly EUA Power Corporation) for the year ended December 31,    
1993, included in this Proxy Statement/Prospectus and the related registration  
statement, have been included herein in reliance on the report of Coopers &     
Lybrand L.L.P., independent accountants, given on the authority of that firm as 
experts in accounting and auditing.                                             

Coopers & Lybrand L.L.P., whose report for the year ended December 31,
1993, appears elsewhere in this Proxy Statement/Prospectus, were Great Bay's    
independent accountants until November 23, 1994. In connection with Great Bay's 
bankruptcy proceeding, the Bondholders' Committee determined to select a new    
accounting firm to be engaged by Great Bay following Great Bay's emergence from 
bankruptcy. Coopers & Lybrand L.L.P. did not resign and did not decline to stand
for reelection. During the period of Coopers & Lybrand L.L.P.'s engagement by   
Great Bay, there were no disagreements between Coopers & Lybrand L.L.P. and     
Great Bay on any matters of accounting principles or practices, financial       
statement disclosure or auditing scope or procedure and no reportable events    
relating to the relationship between Great Bay and Coopers & Lybrand L.L.P.     

     On November 26, 1993 the Bankruptcy Court approved Great Bay's selection of
Arthur Andersen LLP as Great Bay's independent accountant, to be effective only 
upon Great Bay's emergence from bankruptcy. Prior to November 23, 1994 the      
Predecessor Company had not consulted Arthur Andersen LLP regarding the         
application of accounting principles to specified transactions or the type of   
audit opinion that might be rendered on Great Bay's financial statements during 
the periods from January 1, 1991 through December 31, 1993.                     

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GLOSSARY OF CERTAIN DEFINED TERMS 

                                                        [Enlarge/Download Table]
                                                                                            
Amended Bankruptcy Plan....... Great Bay's Fifth Amended Plan of Reorganization dated       
                               February 11, 1994, as amended by a First Amendment dated     
                               September 9, 1994.                                           
Articles of Merger............ The Articles of Merger with respect to the Merger of         
                               Transitory Subsidiary with and into Great Bay.               
Code.......................... Internal Revenue Code of 1986, as amended.                   
Effective Date................ The date of filing of Articles of Merger with the Secretary  
                               of State of the State of New Hampshire relating to the       
                               Merger.                                                      
Elliott Group................. Group consisting of Elliott Associates, L.P., Westgate       
                               International, L.P., Martley International, Inc. and Paul E. 
                               Singer.                                                      
EUA........................... Eastern Utilities Associates.                                
Exchange Act.................. Securities Exchange Act of 1934, as amended.                 
EWG........................... Exempt Energy Regulatory Generator.                          
FERC.......................... Federal Energy Regulatory Commission.                        
Great Bay..................... Great Bay Power Corporation, a New Hampshire corporation.    
Great Bay Board............... The Board of Directors of Great Bay.                         
Great Bay Common Stock........ Common Stock, $.01 par value, of Great Bay.                  
Great Bay Options............. Outstanding options under the Great Bay Stock Option Plan to 
                               purchase a total of 375,000 shares of Great Bay Common Stock,
                               of which 200,000 were exercisable as of the Record Date.     
Great Bay Stock Option Plan... Great Bay's 1995 Stock Option Plan.                          
Holding Company............... BayCorp Holdings, Ltd., a Delaware corporation.              
Holding Company Common                                                                      
  Stock....................... Common Stock, $.01 par value, of Holding Company.            
Holding Company Stock Option                                                                
  Plan........................ Holding Company's 1996 Stock Option Plan.                    
IPPs.......................... Independent Power Producers.                                 
JOA........................... Agreement for Joint Ownership, Construction and Operation of 
                               New Hampshire Nuclear Units dated May 1, 1973, as amended, by
                               and among Great Bay and the ten other utility companies who  
                               are owners of the Seabrook Project.                          
LLW........................... Low-level waste.                                             
Long-Term Market.............. An agreement for sale of power having a term a five years of 
                               longer.                                                      
Merger........................ The merger of Transitory Subsidiary with and Great Bay       
                               pursuant to the Merger Agreement.                            
Merger Agreement.............. The Agreement and Plan of Merger by and among Great Bay,     
                               Holding Company and the Transitory Subsidiary.               
Merger Regulatory Approvals... Approval by the NHPUC and FERC and consent by NRC.           
MW............................ Megawatts.                                                   
NAESCO........................ North Atlantic Energy Service Corporation, the current       
                               managing agent of Seabrook Project.                          
NDFC.......................... New Hampshire Nuclear Financing Committee.                   
NEPOOL........................ New England Power Pool.                                      
NEPOOL Agreement.............. New England Power Pool Agreement.                            
NHPUC......................... New Hampshire Public Utilities Commission.                   
NRC........................... Nuclear Regulatory Commission.                               

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                                                        [Enlarge/Download Table]
                                                                                           
OMEGA GROUP................... Group consisting of Leon G. Cooperman, Omega Capital        
                               Partners, L.P., Omega Institutional Partners, L.P. and Omega
                               Advisors, Inc.                                              
Participants.................. The owners of the Seabrook Project.                         
PECO.......................... PECO Energy Company.                                        
PECO Services Agreement....... The Service Agreement, dated as of November 3, 1995, between
                               Great Bay and PECO.                                         
PECO Warrant.................. A warrant to purchase 420,000 shares of Great Bay Common    
                               Stock held by PECO.                                         
PUHCA......................... Public Utility Holding Company Act of 1935, as amended.     
QFs........................... Qualifying Facilities.                                      
Record Date................... The close of business of May 3, 1996.                       
Registration Statement........ The Registration Statement filed by Holding Company with the
                               Commission on Form S-4 (together with any amendments or     
                               supplements thereto).                                       
Seabrook Project.............. The Seabrook Nuclear Power Project in Seabrook, New         
                               Hampshire.                                                  
Securities Act................ The Securities Act of 1933, as amended.                     
Short-Term Market............. An agreement for sale of power having a term of one to six  
                               months.                                                     
Special Meeting............... The Special Meeting of Great Bay shareholders to be held to 
                               consider and vote upon the Merger Agreement and the Holding 
                               Company Stock Option Plan.                                  
TILTEC........................ Tillinghast Technology Interests, Inc.                      
Town of Seabrook.............. The Town of Seabrook, New Hampshire.                        
Transitory Subsidiary......... GB Transitory Subsidiary, Inc.                              
URI........................... UNITIL Resources, Inc.                                      

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                                                        [Enlarge/Download Table]
                         INDEX TO FINANCIAL STATEMENTS                                      


                                                                                        PAGE
                                                                                        ----
                                                                                            
GREAT BAY POWER CORPORATION                                                                 
     Report of Independent Public Accountants.........................................  F-2 
     Balance Sheets as of March 31, 1996, December 31, 1995 and 1994..................  F-3 
     Statements of Income -- Three Months Ended March 31, 1996 and 1995, Year Ended         
      December 31, 1995 and Period from November 24 to December 31, 1994..............  F-4 
     Statements of Changes in Stockholders' Equity, Three Months Ended March 31, 1996,      
      Year Ended December 31, 1995 and Period from November 24 to December 31, 1994...  F-5 
     Statements of Cash Flow -- Three Months Ended March 31, 1996 and 1995, Year Ended      
      December 31, 1995 and Period from November 24 to December 31, 1994..............  F-6 
     Notes to Financial Statements....................................................  F-7 
GREAT BAY POWER CORPORATION (F.K.A. EUA Power Corporation) ("The Predecessor")              
     Statement of Income -- Period from January 1 to November 23, 1994................  F-4 
     Statement of Changes in Stockholders' Equity -- Period from January 1 to November      
      23, 1994........................................................................  F-5 
     Statement of Cash Flows -- Period from January 1 to November 23, 1994............  F-6 
     Report of Independent Accountants................................................  F-21
     Statement of Loss and Retained (Deficit) Earnings for the year ended December 31,      
      1993............................................................................  F-22
     Statement of Cash Flow for the year ended December 31, 1993......................  F-23
     Notes to Financial Statements....................................................  F-24
BAYCORP HOLDINGS, LTD.                                                                      
     Report of Independent Public Accountants.........................................  F-35
     Balance Sheet as of March 31, 1996...............................................  F-36

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of                                                    
Great Bay Power Corporation and                                                 

To the Director of                                                              
Great Bay Power Corporation (formerly EUA Power Corporation)                    

We have audited the accompanying balance sheets of Great Bay Power    
Corporation (a New Hampshire corporation) as of December 31, 1995 and 1994 and  
the related statements of income, changes in stockholders' equity and cash flows
for the year ended December 31, 1995 and the period from November 24, 1994 to   
December 31, 1994. We have also audited the accompanying statements of income,  
changes in stockholders' equity and cash flows of Great Bay Power Corporation   
(formerly EUA Power Corporation, the "Predecessor") for the period from January 
1, 1994 to November 23, 1994. These financial statements are the responsibility 
of the Company's management. Our responsibility is to express an opinion on     
these financial statements based on our audits.                                 

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

    In our opinion, the financial statements referred to about present fairly,
in all material respects, the financial position of Great Bay Power Corporation 
as of December 31, 1995 and 1994, and the results of the operations and cash    
flows of Great Bay Power Corporation and Great Bay Power Corporation (formerly  
EUA Power Corporation, the "Predecessor") for the year ended December 31, 1995  
and the periods from November 24, 1994 to December 31, 1994 and January 1, 1994 
to November 23, 1994, respectively, in conformity with generally accepted       
accounting principles.                                                          

                           ARTHUR ANDERSEN LLP

Boston, Massachusetts                                                           
January 26, 1996                                                                

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GREAT BAY POWER CORPORATION 
BALANCE SHEET 
(DOLLARS IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                     DECEMBER 31,        
                                                                  MARCH 31,   ---------------------------
                                                                    1996          1995           1994    
                                                                  ---------   ------------   ------------
                                                                                                         
                                                                  (UNAUDITED)                            
ASSETS:                                                                                                  
Current Assets:                                                                                          
  Cash & Cash equivalents........................................ $ 11,984      $  8,874       $ 18,533  
  Short-term Investments, at market..............................    4,759         7,595          3,684  
  Accounts Receivable............................................    2,543         1,535          2,598  
  Materials & Supplies...........................................    4,224         4,230          4,846  
  Prepayments & Other Assets.....................................    2,641         1,249          2,976  
                                                                  --------      --------       --------  
         Total Current Assets....................................   26,151        23,483         32,637  
                                                                  --------      --------       --------  
Property, Plant & Equipment:                                                                             
  Utility Plant..................................................  104,432       104,696        101,308  
  Less: Accumulated Depreciation.................................   (4,613)       (4,165)           (95) 
                                                                  --------      --------       --------  
  Net Utility Plant..............................................   99,819       100,531        101,213  
  Nuclear Fuel...................................................    9,974         9,925         10,556  
  Less: Accumulated Amortization.................................   (1,231)         (304)        (2,118) 
                                                                  --------      --------       --------  
  Net Nuclear Fuel...............................................    8,743         9,621          8,438  
         Net Property, Plant & Equipment.........................  108,562       110,152        109,651  
Other Assets:                                                                                            
  Decommissioning Trust Fund.....................................    5,363         5,108          3,290  
  Deferred Debits & Other........................................       27            28             88  
                                                                  --------      --------       --------  
         Total Other Assets......................................    5,390         5,136          3,378  
                                                                  --------      --------       --------  
         TOTAL ASSETS............................................ $140,103      $138,771       $145,666  
                                                                  ========      ========       ========  
LIABILITIES AND STOCKHOLDERS' EQUITY:                                                                    
Current Liabilities:                                                                                     
  Accounts Payable and Accrued Expenses.......................... $    164      $    237       $    303  
  Taxes Accrued..................................................    2,210         1,293          1,166  
  Reorganization Expenses........................................        0             0          2,653  
  Miscellaneous Current Liabilities..............................    1,220         1,437          1,346  
                                                                  --------      --------       --------  
         Total Current Liabilities...............................    3,594         2,967          5,468  
Operating Reserves:                                                                                      
  Decommissioning Liability......................................   50,789        50,228         48,530  
  Miscellaneous Other............................................      671           671            719  
                                                                  --------      --------       --------  
         Total Operating Reserves................................   51,460        50,899         49,249  
Other Liabilities & Deferred Credits.............................    2,833         2,672          2,563  
Accumulated Deferred Taxes.......................................        0             0             94  
Commitments & Contingencies......................................                                        
Stockholders' Equity:                                                                                    
  Common stock, $.01 par value                                                                           
      Authorized -- 20,000,000 shares; issued and outstanding --                                         
         7,999,948 at March 31, 1996 and 8,000,000 shares at                                             
         December 31, 1995 and 1994..............................       80            80             80  
  Common Stock Warrants..........................................    1,000             0              0  
  Additional paid-in capital.....................................   88,030        88,030         88,030  
  Retained earnings..............................................   (6,894)       (5,877)           182  
                                                                  --------      --------       --------  
         Total Stockholders' Equity..............................   82,216        82,233         88,292  
                                                                  --------      --------       --------  
         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.............. $140,103      $138,771       $145,666  
                                                                  ========      ========       ========  

(The accompanying notes are an integral part of these statements.)

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GREAT BAY POWER CORPORATION 

                                                        [Enlarge/Download Table]
                              STATEMENT OF INCOME                                                       
                             (DOLLARS IN THOUSANDS)                                                     


                                                           SUCCESSOR                        PREDECESSOR 
                                      ---------------------------------------------------  -------------
                                         (UNAUDITED)                                                    
                                     THREE MONTHS ENDED   JANUARY 1 TO    NOVEMBER 24 TO   JANUARY 1 TO 
                                       ENDED MARCH 31,    DECEMBER 31,     DECEMBER 31,    NOVEMBER 23, 
                                       1996       1995        1995             1994            1994     
                                      -------    ------   -------------   ---------------  -------------
                                                                                                        
Operating Revenues..................  $ 6,891    $7,781      $24,524           $3,129        $  13,989  
Operating Expenses:                                                                                     
  Production........................    3,588     4,206       17,433            1,836           16,891  
  Transmission......................      259       241          934               70              834  
  Administrative & General..........    1,914     1,402        6,532              503            4,037  
  Depreciation & Amortization.......      874       736        3,339              240            8,027  
  Taxes other than Income...........    1,054     1,022        4,143              346            3,934  
                                      -------    ------      -------           ------        ---------  
          Total Operating                                                                               
            Expenses................    7,689     7,607       32,381            2,995           33,723  
                                      -------    ------      -------           ------        ---------  
Operating Income (Loss).............     (798)      174       (7,857)             134          (19,734) 
                                      -------    ------      -------           ------        ---------  
Other (Income) Deductions:                                                                              
  Write-down of Assets &                                                                                
     Liabilities....................       --        --           --               --          137,908  
  Reorganization Expenses...........       --        --           --               --            4,038  
  Interest and Dividend (Income)....     (271)     (387)      (1,346)            (143)              --  
  Interest Expense..................       --        --           --               --              760  
  Decommissioning Cost Accretion....      565        --           --               --               --  
  Decommissioning Trust Fund                                                                            
     Income.........................      (79)       --           --               --               --  
  Miscellaneous.....................        4        --         (198)               1             (102) 
                                      -------    ------      -------           ------        ---------  
          Total Other (Income)                                                                          
            Deductions..............      219      (387)      (1,744)            (142)         142,604  
                                      -------    ------      -------           ------        ---------  
Earnings (Loss) Before Income                                                                           
  Taxes.............................   (1,017)      561       (6,113)             276         (162,338) 
                                      -------    ------      -------           ------        ---------  
Income Taxes:                                                                                           
  Current...........................       --        --          (54)              --               --  
  Deferred..........................       --         1           --               94               --  
                                      -------    ------      -------           ------        ---------  
          Total Income Taxes........       --         1          (54)              94               --  
                                      -------    ------      -------           ------        ---------  
Income (Loss) Before Extraordinary                                                                      
  Item..............................   (1,017)      560       (6,059)             182         (162,338) 
Extraordinary Income (Loss)                                                                             
Forgiveness of Long-term Debt and                                                                       
  Accrued Interest..................       --        --           --               --          293,723  
                                      -------    ------      -------           ------        ---------  
Net Income (Loss)...................  $(1,017)   $  560      $(6,059)          $  182        $ 131,385  
                                      =======    ======      =======           ======        =========  

(The accompanying notes are an integral part of these statements.)

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GREAT BAY POWER CORPORATION 

                                                        [Enlarge/Download Table]
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY                                                                 
                             (DOLLARS IN THOUSANDS)                                                                            

                         COMMON STOCK,                                                    COMMON STOCK,                        
                        $.01 PAR VALUE                                                    $.01 PAR VALUE                       
                        ---------------                                                  ----------------                      
                          ISSUED AND          LESS:                                         ISSUED AND      COMMON   ADDITIONAL
                          OUTSTANDING    TREASURY STOCK,  PAID-IN CAPITAL     TOTAL        OUTSTANDING      STOCK     PAID-IN  
                         10,000 SHARES    10,000 SHARES   TREASURY STOCK   COMMON STOCK  8,000,000 SHARES  WARRANTS   CAPITAL  
                        ---------------  ---------------  ---------------  ------------  ----------------  --------  ----------
                                                                                                                               
PREDECESSOR                                                                                                                    
Balance at December                                                                                                            
  31, 1993.............       $ 10             $(10)            $ 10           $ 10             $--             --     $    -- 
  Financial Results,                                                                                                           
    January 1 to                                                                                                               
    November 23, 1994..         --               --               --                             --             --          -- 
Equity Infusion and                                                                                                            
  Fresh-Start Adj's....        (10)              10              (10)           (10)             80             --      88,030 
----------------------------------------------------------------------------------------------------------------------------   
SUCCESSOR                                                                                                                      
Balance at November                                                                                                            
  23, 1994.............         --               --               --                             80             --      88,030 
  Financial Results,                                                                                                           
    November 24 to                                                                                                             
    December 31,                                                                                                               
    1994...............         --               --               --                             --             --          -- 
Balance at December                                                                                                            
  31, 1994.............         --               --               --                             80             --      88,030 
  Financial Results,                                                                                                           
    January 1 to                                                                                                               
    December 31,                                                                                                               
    1995...............         --               --               --                             --             --          -- 
Balance at December                                                                                                            
  31, 1995.............         --               --               --                            $80             --     $88,030 
Common Stock                                                                                                                   
  Warrants.............         --               --               --                             --          1,000          -- 
Financial Results,                                                                                                             
  January 1 to March                                                                                                           
  31, 1996.............         --               --               --                             --             --          -- 
Balance at March 31,                                                                                                           
  1996.................         --               --               --                            $80          1,000      88,030 


                                                                [Download Table]


                         REDEEMABLE                 TOTAL               
                         PREFERRED   RETAINED   STOCKHOLDERS'           
                           STOCK     EARNINGS      EQUITY               
                         ----------  ---------  -------------           
                                                                        
PREDECESSOR                                                             
Balance at December                                                     
  31, 1993.............   $ 63,090   $(139,793)    $(76,693)            
  Financial Results,                                                    
    January 1 to                                                        
    November 23,                                                        
    1994...............         --     127,789      127,789             
Equity Infusion and                                                     
  Fresh-Start                                                           
  Adj's................    (63,090)     12,004       37,014             
------------------------------------------------------------------------
SUCCESSOR                                                               
Balance at November                                                     
  23, 1994.............         --          --       88,110             
  Financial Results,                                                    
    November 24 to                                                      
    December 31,                                                        
    1994...............         --         182          182             
Balance at December                                                     
  31, 1994.............         --         182       88,292             
  Financial Results,                                                    
    January 1 to                                                        
    December 31,                                                        
    1995...............         --      (6,059)      (6,059)            
Balance at December                                                     
  31, 1995.............         --   $  (5,877)    $ 82,233             
Common Stock                                                            
  Warrants.............         --          --        1,000             
Financial Results,                                                      
  January 1 to March                                                    
  31, 1996.............         --      (1,017)      (1,017)            
Balance at March 31,                                                    
  1996.................         --      (6,894)    $ 82,216             

(The accompanying notes are an integral part of these statements.)

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GREAT BAY POWER CORPORATION 

                                                        [Enlarge/Download Table]
                            STATEMENT OF CASH FLOWS                                                     
                             (DOLLARS IN THOUSANDS)                                                     


                                                            SUCCESSOR                                   
                                        --------------------------------------------------              
                                                                                            PREDECESSOR 
                                           (UNAUDITED)                                      ------------
                                        THREE MONTHS ENDED   JANUARY 1 TO   NOVEMBER 24 TO  JANUARY 1 TO
                                            MARCH 31,        DECEMBER 31,    DECEMBER 31,   NOVEMBER 23,
                                         1996       1995         1995            1994           1994    
                                        -------    -------   ------------   --------------  ------------
                                                                                                        
Net cash flow from operating                                                                            
  activities:                                                                                           
     Net Income (Loss)................  $(1,017)   $   560     $ (6,059)       $    182       $131,385  
     Adjustments to reconcile net                                                                       
       earnings to net cash provided                                                                    
       by (used in) operating                                                                           
       activities:                                                                                      
          Depreciation................      874        736        3,339             240          4,456  
          Decommissioning Expense.....       --         --           --              --            636  
          Amortization of nuclear                                                                       
            fuel......................      927      1,266        4,520             533          3,571  
          Decommissioning cost                                                                          
            accretion.................      565         --           --              --                 
          Decommissioning trust                                                                         
            interest..................      (79)        --           --              --             --  
          Deferred income taxes.......       --         --          (94)             94             --  
          Writedown of assets, net....       --         --          758              --        137,908  
          Gain on forgiveness of                                                                        
            debt......................       --         --           --              --       (293,723) 
          Gain on transfer of                                                                           
            assets....................       --         --         (193)             --             --  
          Provision for reorganization                                                                  
            expenses..................       --         --           --              --          4,038  
          Payment of reorganization                                                                     
            expenses..................       --         --       (2,653)         (1,518)            --  
          (Increase) decrease in                                                                        
            accounts receivable.......   (1,008)      (147)       1,021            (635)           507  
          Decrease in materials &                                                                       
            supplies..................      (36)        (5)         113              39            201  
          (Increase) decrease in                                                                        
            prepaids and other                                                                          
            assets....................   (1,392)     1,195        1,718            (520)         1,631  
          Increase (decrease) in                                                                        
            accounts payable..........      (73)      (183)         (66)            293            (81) 
          Increase in taxes accrued...      917       (283)         126             273            312  
          Increase in misc. current                                                                     
            liabilities...............      (59)       273                          400            946  
          Other.......................                              183             261            717  
                                        -------    -------     --------        --------       --------  
Net cash provided by (used in)                                                                          
  operating activities................     (381)     3,412        2,713            (358)        (7,496) 
                                        -------    -------     --------        --------       --------  
Net cash flows (used in) investing                                                                      
  activities:                                                                                           
     Utility plant additions..........     (116)      (213)      (1,770)           (260)        (1,774) 
     Nuclear fuel additions...........      (48)      (610)      (5,703)             --           (361) 
     Payments to decommissioning                                                                        
       fund...........................     (181)      (161)        (988)            (98)          (830) 
     Short term investments, net......    2,836     (3,226)      (3,911)         (3,684)            --  
                                        -------    -------     --------        --------       --------  
Net cash used in investing                                                                              
  activities..........................    2,491     (4,210)     (12,372)         (4,042)        (2,965) 
Net cash provided by financing                                                                          
  activities:                                                                                           
     Sale of common stock.............       --         --           --              --         35,000  
     Common Stock Warrants............    1,000         --           --              --             --  
     Borrowings under DIP financing...       --         --           --              --          8,823  
     Repayment of DIP financing.......       --         --           --              --        (10,567) 
                                        -------    -------     --------        --------       --------  
Net cash provided by financing                                                                          
  activities..........................    1,000         --           --              --         33,256  
                                        -------    -------     --------        --------       --------  
Net (decrease) increase in cash and                                                                     
  cash equivalents....................    3,110       (798)      (9,659)         (4,400)        22,795  
Cash and cash equivalents, beginning                                                                    
  of period...........................    8,874     18,533       18,533          22,933            138  
                                        -------    -------     --------        --------       --------  
Cash and cash equivalents, end of                                                                       
  period..............................  $11,984    $17,735     $  8,874        $ 18,533       $ 22,933  
                                        =======    =======     ========        ========       ========  

(The accompanying notes are an integral part of these statements.)

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 1995 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

A. THE COMPANY                                                                  

   The Company, Great Bay Power Corporation, is a New Hampshire corporation,
which emerged from bankruptcy on November 23, 1994. The Predecessor Company, EUA
Power Corporation ( "The Predecessor") was incorporated in 1986. The Company is 
authorized by the New Hampshire Public Utilities Commission ("NHPUC") to engage 
in business as a public utility for the purposes of participating as a joint    
owner in the Seabrook Project, acquiring its 12.1% interest in the Seabrook     
Project and selling its share of the output of Seabrook Unit 1 for resale. The  
Seabrook Project is a nuclear-fueled, steam electricity, generating plant       
located in Seabrook, New Hampshire, which was originally planned to have two    
Westinghouse pressurized water reactors, Seabrook Unit 1 and Seabrook Unit 2    
(each with a rated capacity of 1,150 megawatts), utilizing ocean water for      
condenser cooling purposes. Seabrook Unit 1 entered commercial service on August
19, 1990. Seabrook Unit 2 has been canceled. The Company became a wholesale     
generating company when Seabrook Unit 1 commenced commercial operation on August
19, 1990. In 1993, the Company became an Exempt Wholesale Generator ("EWG")     
under the Energy Policy Act of 1992.                                            

    The Company is required to pay its share (i.e., the same percentage as the
percentage of its ownership and its entitlement to the output) of all of the    
costs of the Seabrook Project, including fixed costs (whether or not Seabrook   
Unit 1 is operating), operating costs, costs of additional construction or      
modification, costs associated with condemnation, shutdown, retirement, or      
decommissioning of the Seabrook Project, and certain transmission charges. The  
Predecessor never reported an operating profit from the time of its             
incorporation until it filed for bankruptcy in 1991. See Footnote 1B for further
discussion. The Company's current business strategy is to seek purchasers for   
its share of the Seabrook Project electricity output at prices, either in the   
short term market or pursuant to medium or long term contracts, in excess of the
prices currently available in the short term wholesale electricity market since 
sales at current short term rates do not result in sufficient revenue to enable 
the Company to meet its long term cash requirements for operations, maintenance 
and capital related costs. The Company's ability to obtain such higher prices   
will depend on regional, national and worldwide energy supply and demand        
factors.                                                                        

    As of March 31, 1996, the Company had two employees, and substantially all
of the Company's power marketing and administrative functions for the first     
quarter of 1996 were performed on the Company's behalf by third parties pursuant
to contractual agreements. As of May 1, 1996, the Company had five employees and
the Company has assumed responsibility for virtually all of its administrative  
functions. Its power marketing functions continue to be provided by a third     
party pursuant to a contractual agreement.                                      

The unaudited financial statements included herein for the three month
periods ending March 31, 1996 and 1995 have been prepared on behalf of the      
Company, without audit, pursuant to the rules and regulations of the Securities 
and Exchange Commission and include, in the opinion of management, all          
adjustments, consisting of normal recurring adjustments, necessary for a fair   
presentation of interim period results. Certain information and footnote        
disclosures normally included in financial statements prepared in accordance    
with generally accepted accounting principles have been omitted or condensed    
pursuant to such rules and regulations. The Company believes, however, its      
disclosures herein, when read in conjunction with the Company's audited         
financial statements for the year ended December 31, 1995, are adequate to make 
the information presented not misleading. Operating results for the three months
ended March 31, 1996 are not necessarily indicative of the results that may be  
expected for the entire year ended December 31, 1996. The results for the       
interim periods are not necessarily indicative of the results to be expected for
the full fiscal year.                                                           

B. BANKRUPTCY PROCEEDING AND REORGANIZATION                                     

The Company filed a voluntary petition under Chapter 11 of the United 
States Bankruptcy Code ("the Bankruptcy Code") in the United States Bankruptcy  
Court for the District of New Hampshire ("the                                   

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

Bankruptcy Court") on February 28, 1991. It conducted its business as a Debtor  
in Possession until November 23, 1994, at which time the Company's First        
Amendment to the First Modified Plan dated September 9, 1994 ("the Amended      
Plan") became effective and the Company emerged from Chapter 11.                

   The Bankruptcy Court confirmed the Bondholders' Committee's Fifth Amended
Plan of Reorganization on March 5, 1993. After confirmation, the Predecessor was
unable to obtain the $45 million of debt financing contemplated by the Fifth    
Amended Plan of Reorganization. In February 1994, however, the Bondholders'     
Committee obtained a commitment from Omega Advisers, Inc. ("Omega") or its      
designees to provide $35 million of equity financing for the Company (the       
"Financing").                                                                   

     On April 7, 1994, the Company and the Bondholders' Committee entered into a
definitive Stock and Subscription Agreement (the "Stock and Subscription        
Agreement") with Omega and Elliott Associates, L.P. (Elliott) (collectively, the
Investors) with respect to the Omega Financing.                                 

The Bondholders' Committee prepared a First Modification to the Fifth 
Amended Plan of Reorganization to reflect the change from debt to equity        
financing and submitted a Supplemental Disclosure Statement describing that     
First Modification to the Bankruptcy Court for its approval. The Fifth Amended  
Plan of Reorganization, as modified by the First Modification, is hereinafter   
referred to as the "Plan." The Bankruptcy Court approved the Supplemental       
Disclosure Statement at a hearing on March 11, 1994. The Plan was mailed to the 
Company's creditors for their approval on April 7, 1994, and the creditors      
approved the Plan by a significant margin.                                      

On May 23, 1994, the Bankruptcy Court confirmed the Plan. The only    
condition which remained to be satisfied for the occurrence of the Effective    
Date of the Plan was the closing of the Stock and Subscription Agreement. The   
Committee believed that all of the conditions to closing set forth in the Stock 
and Subscription Agreement had been satisfied and was prepared to close the     
Stock and Subscription Agreement. Before the closing could occur, however, the  
operators of the Seabrook Project determined, during a regularly scheduled      
refueling outage, that certain repairs to the Seabrook Project were required.   
These repairs have been completed and the Seabrook Project is now operating. The
repairs, however, caused the Seabrook Project to be out of service for          
approximately eight weeks longer than anticipated in connection with the        
scheduled refueling outage.                                                     

     Because of the unplanned extension of the outage, the repairs required, and
the related loss of revenue of the Company, Omega and Elliott asserted that a   
material adverse event had occurred with respect to the Company and that,       
therefore, they were not obligated to complete the Omega Financing. The Company 
disagreed with those assertions, and informed Omega and Elliott that they were  
in default under the Stock and Subscription Agreement and informed Omega and    
Elliott that the Company would bring suit to enforce the obligations of Omega   
and Elliott to close the Omega Financing. Notwithstanding its position on this  
matter, the Company engaged in negotiations with Omega and Elliott to settle the
dispute and to complete the Omega Financing. On September 9, 1994, the Company, 
Omega and Elliott resolved their disputes and entered into a Settlement         
Agreement (the "Settlement Agreement").                                         

The terms of the Settlement Agreement changed the terms of the Omega  
Financing. As described above, under the Plan before its amendment, the         
Investors were to receive 4.8 million shares, representing 60% of the common    
stock of the Company, in exchange for their $35 million investment. The         
Settlement Agreement changed the Plan to provide also that, on the Effective    
Date of the Amended Plan, 480,000 shares of new common stock of the Company,    
which would have otherwise been distributed to the creditors of the Company,    
would be issued to the Disbursing Agent under the Plan (the "Escrow Shares").   
The Escrow Shares represent 6% of the common stock of the Company. The Company's
creditors received the remaining 34% on the Effective Date of the amended Plan. 

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

    On the first anniversary of the Effective Date of the Amended Plan, if the
Aggregate Value, as defined in the Settlement Agreement, of the Purchasers' 4.8 
million shares of common stock was less than $38.5 million, the Company would be
obligated to pay to the Investors an amount (the "True-Up Amount") equal to the 
lesser of (a) $38.5 million less the Aggregate Value, or (b) the total value of 
all of the Escrow Shares, based on their per share value. The Settlement        
Agreement permitted the Investors to elect to have their True-Up amounts, if    
any, satisfied by the issuance of Escrow Shares or in cash. If the Aggregate    
Value was equal to or greater than $38.5 million, the Escrow Shares would be    
issued on a pro rata basis to the Company's creditors in accordance with the    
Amended Plan. In no event, however, would the Investors be entitled to more than
the 480,000 Escrow Shares, or the cash proceeds from the sale of those shares.  
On the anniversary date, November 23, 1995, the Aggregate Value of the          
Purchaser's 4.8 million shares of common stock was $38,832,000. As this amount  
was greater than $38.5 million, the escrow shares were issued to the creditors. 

    Pursuant to the Settlement Agreement, the Company amended the Plan and its
related Disclosure Statement, submitted the Amended Plan and the Amended        
Disclosure Statement to the Bankruptcy Court for its approval and obtained that 
approval, circulated the Amended Plan and the Amended Disclosure Statement to   
the Company's creditors in order to give them the opportunity to change their   
previous votes approving the Plan, and then applied to the Bankruptcy Court for 
confirmation of the Amended Plan. The Bankruptcy Court confirmed the Amended    
Plan on November 4, 1994. In addition, the Company obtained extensions of time  
and, in some cases, reapprovals, from certain regulatory agencies which had     
previously approved the Omega Financing. Closing of the Omega Financing occurred
on November 23, 1994, at which time the Company's First Amendment to the First  
Modified Plan dated September 9, 1994 ("the Amended Plan") became effective and 
the Company emerged from Chapter 11.                                            

                                                        [Enlarge/Download Table]
     In accordance with Statement of Position 90-7, "Financial Reporting by                 
Entities in Reorganization Under the Bankruptcy Code", the historical amounts of            
individual assets and liabilities have been adjusted to fair values and                     
Liabilities Subject to Compromise of $293,864,000 have been discharged as a                 
result of the Reorganization Plan. The amount of prior retained deficit                     
eliminated as a result of the reorganization was $159,659,000. The                          
reorganizational value has been determined based on the fair value of the                   
Company (See Note 1D). The adjustments to individual assets and liabilities are             
as follows:                                                                                 


                                                                               ADJUSTMENTS  
                                                                              --------------
                                                                              (IN THOUSANDS)
                                                                                            
    Writedown of Net Utility Plant and Nuclear Fuel........................     $ 193,635   
    Writedown of Deferred Debits...........................................        27,470   
    Recognition of Decommissioning Liability, net..........................        45,193   
    Writedown of Deferred Taxes and ITC....................................       (73,927)  
    Writedown of Deferred Gains and Credits................................       (47,375)  
    Other, net.............................................................        (7,088)  
                                                                                ---------   
              Net Writedown of Assets......................................       137,908   
    Forgiveness of Liabilities Subject to Compromise.......................      (293,864)  
    Recognition of Reorganization Expenses.................................         4,038   
                                                                                ---------   
    Net adjustment to assets and liabilities...............................     $(151,918)  
                                                                                =========   

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

                                                        [Enlarge/Download Table]
     The following unaudited proforma condensed statement of (loss) income is                      
presented to illustrate the estimated effect of the reorganization as if such                      
transaction had occurred as of January 1, 1994.                                                    


                                                                                        PROFORMA   
                                                     YEAR ENDED                        YEAR ENDED  
                                                    DECEMBER 31,       PROFORMA       DECEMBER 31, 
                                                        1994          ADJUSTMENTS         1994     
                                                    -------------     -----------     -------------
                                                                                                   
Operating Revenues................................    $  17,118                          $ 17,118  
Operating Expenses:                                                                                
  Production & Transmission.......................       19,631        $  (2,830)(f)       16,801  
  Administrative & General........................        4,540              700 (e)        5,240  
  Depreciation & Amortization.....................        8,267           (5,461)(d)        2,806  
  Taxes Other than Income.........................        4,280                             4,280  
                                                      ---------                          --------  
          Total Operating Expenses................       36,718                            29,127  
Operating Income..................................      (19,600)                          (12,009) 
  Write down of Assets, net.......................      137,908         (137,908)(a)            0  
  Reorganization Expenses.........................        4,038           (4,038)(b)            0  
  Other Income....................................         (101)                             (101) 
  Interest Charges, net...........................          617             (706)(c)          (89) 
                                                      ---------                          --------  
Net Loss Before Taxes.............................     (162,062)                          (11,819) 
  Income Taxes....................................           94           (4,096)(g)       (4,002) 
Net Loss before Extraordinary Item................     (162,156)                           (7,817) 
  Forgiveness of Debt.............................      293,723         (293,723)(c)            0  
                                                      ---------                          --------  
Net Income (Loss).................................    $ 131,567                          $ (7,817) 
                                                      =========                          ========  

<FN>                                                                                               
---------------                                                                                    
(a)  Elimination of Writedown of Assets, Net                                                       

(b)  Elimination of Reorganization Expenses                                                        

(c)  Elimination of Forgiveness of Debt and related interest                                       

(d)  Depreciation expense adjusted to reflect asset writedown                                      

(e)  Additional expenses associated with UNITIL and Tillinghast agreements                         

(f)  Recognition of new outage accrual policy                                                      

(g)  Tax impact of above entries assuming ability to fully benefit loss                            


C. REGULATION                                                                   

  The Company is subject to the regulatory authority of the Federal Energy
Regulatory Commission ("FERC"), the Nuclear Regulatory Commission ("NRC") and   
the New Hampshire Public Utilities Commission ("NHPUC") and other federal and   
state agencies as to rates, operations and other matters. The Company's cost of 
service is not regulated. As such, the Company's accounting policies are not    
subject to the provisions of Statement of Financial Accounting Standards No. 71,
"Accounting for the Effects of Certain Types of Regulation."                    

D. USE OF MANAGEMENT ESTIMATES                                                  

The preparation of financial statements in conformity with generally  
accepted accounting principles requires management to make estimates and        
assumptions that affect the reported amounts of assets and liabilities and      
disclosure of contingent assets and liabilities at the date of the financial    
statements and the                                                              

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

reported amounts of revenues and expenses during the reporting period. Actual   
results could differ from those estimates.                                      

E. UTILITY PLANT                                                                

     Utility plant at November 23, 1994 was revalued to its estimated fair value
based on the fair value of the Company. The reorganization value of the Company 
at November 23, 1994 was determined based on discounted cash flow valuation. The
cost of additions to utility plant subsequent to November 23, 1994 are recorded 
at original cost. During the period from January 1, 1994 to November 23, 1994,  
the Predecessor capitalized $121,000 of interest related to plant additions.    

F. DEPRECIATION AND MAINTENANCE                                                 

     Electric plant is depreciated on the straight-line method at rates designed
to fully depreciate all depreciable properties over the lesser of estimated     
useful lives or the Plant's remaining NRC license life, which extends to 2026.  

Capital projects constituting retirement units are charged to electric
plant. Minor repairs are charged to maintenance expense. When properties are    
retired, the original cost, plus cost of removal, less salvage, are charged to  
the accumulated provision for depreciation.                                     

G. AMORTIZATION OF NUCLEAR FUEL                                                 

The cost of nuclear fuel is amortized to expense based on the rate of 
burn-up of the assemblies comprising the total core. The Company also provides  
for the cost of disposing of spent nuclear fuel at rates specified by the United
States Department of Energy ("DOE") under a contract for disposal between the   
Company and the DOE.                                                            

 The Company amortizes to expense on a straight-line basis the estimated
cost of the final unspent nuclear fuel core, which is expected to be in place at
the expiration of the Plant's NRC operating license, in conformity with rates   
authorized by the FERC.                                                         

H. AMORTIZATION OF MATERIALS AND SUPPLIES                                       

   The Company amortizes to expense an amount designed to fully amortize the
cost of the material and supplies inventory that is expected to be on hand at   
the expiration of the Plant's NRC operating license.                            

I. DECOMMISSIONING                                                              

Based on the Financial Accounting Standards Board's ("FASB") tentative
conclusions, the Company has recognized as a liability its proportionate share  
of the estimated Seabrook Project decommissioning. The initial recognition of   
this liability was capitalized as part of the Fair Value of the Utility Plant at
November 23, 1994. The estimated cost to decommission the Seabrook Project,     
based on a study performed for the lead owner of the Plant, is approximately    
$414 million in 1995 dollars and $2.1 billion in 2026 dollars and assumes a 36  
year life for the facility and a future escalation rate of 4.25%. Based on this 
estimate, the Company's share in 1995 dollars is approximately $50.2 million,   
which has been recorded as a liability in the December 31, 1995 balance sheet.  

     During the first quarter of 1996, the Company began to accrete its share of
the Seabrook Project's Decommissioning Liability. This accretion is a non-cash  
charge and recognizes the Company's liability related to the closure and        
decommissioning of its nuclear plant in current year dollars over the licensing 
period of the                                                                   

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

plant. As a result of this accretion, the Company's share of the estimated      
decommissioning cost increased from $50.2 million as of December 31, 1995 to    
$50.8 million as of March 31, 1996.                                             

 The Seabrook Project's decommissioning estimate and funding schedule is
subject to review each year by the New Hampshire Nuclear Decommissioning Finance
Committee ("NDFC"). This estimate is based on a number of assumptions. Changes  
in assumptions for such things as labor and material costs, technology,         
inflation and timing of decommissioning could cause these estimates to change in
the near term. The review of the 1996 estimate and funding schedule by the NDFC 
is currently scheduled for May.                                                 

The Staff of the SEC has questioned certain of the current accounting 
practices of the electric utility industry regarding the recognition,           
measurement and classification of decommissioning costs for nuclear generating  
stations and joint owners in the financial statements of these entities. In     
response to these questions, the FASB has agreed to review the accounting for   
nuclear decommissioning costs. Although the Company's accounting for            
decommissioning was based on the FASB's tentative conclusions, if the accounting
practices for nuclear power plant decommissioning are changed, the annual       
provision for decommissioning could change relative to 1995. The Company is     
uncertain as to the impact, if any, changes in the current accounting will have 
on the Company's financial statements.                                          

Funds collected by Seabrook for Decommissioning are deposited in an   
external irrevocable trust pending their ultimate use. The earnings on the      
external trusts also accumulate in the fund balance. The trust funds are        
restricted for use in paying the decommissioning of Unit I. The investments in  
the trust are available for sale. The Company has therefore reported its        
investment in trust fund assets at market value.                                

     Although the owners of Seabrook are accumulating funds in an external trust
to defray decommissioning costs, these costs could substantially exceed the     
value of the trust fund, and the owners, including the Company, would remain    
liable for the excess. The amount that is required to be deposited in the trust 
fund is subject to periodic review and adjustment by the NDFC, which could      
result in material increases in such amounts.                                   

On November 15, 1992, the Company, the Bondholder's Committee and the 
Predecessor's former parent, Eastern Utilities Associates (EUA) entered into a  
settlement agreement which resolved certain proceedings against EUA brought by  
the Bondholder's Committee. Under the settlement agreement EUA reaffirmed its   
guarantee of up to $10 million of the Company's future decommissioning costs of 
Seabrook Unit 1.                                                                

J. OPERATING REVENUES                                                           

   Revenues are recorded on an accrual basis based on billing rates provided
for in contracts and approved by FERC. During the year ended December 31, 1995, 
four customers accounted for 27%, 21%, 15% and 12% of total operating revenues. 
For the period from November 24 to December 31, 1994, four customers accounted  
for 50%, 15%, 12% and 12% of total operating revenues. For the period from      
January 1, 1994 to November 23, 1994 four customers accounted for 28%, 17%, 15% 
and 12% of total operating revenues.                                            

K. TAXES ON INCOME                                                              

The Company accounts for taxes on income under the liability method   
required by Statement of Financial Accounting Standards No. 109.                

L. CASH EQUIVALENTS AND SHORT TERM INVESTMENTS                                  

 For purposes of the Statements of Cash Flows, the Company considers all
highly liquid short-term investments with an original maturity of three months  
or less to be cash equivalents. The carrying amounts approximate fair value     
because of the short-term maturity of the investments.                          

All other short term investments with a maturity of greater than three
months are classified as trading securities and reflected as a current asset at 
market value. Changes in the market value of such securities are included in    
earnings (loss). The change in the net unrealized holding gain (loss) on        
short-term investments was not material in each of the periods presented.       

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

M. SEABROOK UNIT 2                                                              

     The Company also has a 12.1% ownership interest in Seabrook Unit 2 to which
it has assigned no value. On November 6, 1986, the joint owners of the Seabrook 
Project, recognizing that Seabrook Unit 2 had been canceled, voted to dispose of
the Unit. Certain assets of Seabrook Unit 2 have been and are being sold from   
time to time to third parties and or used in Seabrook Unit 1. Plans regarding   
disposition of Seabrook Unit 2 are now under consideration, but have not been   
finalized and approved. The Company is unable, therefore, to estimate the costs 
for which it would be responsible in connection with the disposition of Seabrook
Unit 2. Monthly charges are required to be paid by the Company with respect to  
Seabrook Unit 2 in order to preserve and protect its components and various     
warranties. Any sales of Unit 2 property or inventory are reflected in other    
income as gains on the sale of assets. Transfers of Unit 2 items to Unit 1 were 
done at the historical basis of Unit II property or components.                 

N. SEABROOK OUTAGE COSTS                                                        

   The Company's operating results and the comparability of these results on
an interim and annual basis are directly impacted by the operations of the      
Seabrook Project, including the cyclical refueling outages (generally 18-24     
months apart) as well as unscheduled outages. During outage periods at the      
Seabrook Project, the Company has no electricity for resale and consequently no 
revenues. Therefore the impact of outages on the Company's results of operations
and financial position is materially adverse.                                   

 The Company accrues for the incremental costs of the Seabrook Project's
scheduled outages over the periods between those outages. However, the Company  
continues to expense the normal Seabrook operating and maintenance expenses as  
incurred. Therefore, the Company will incur losses during scheduled outage      
periods as a result of the combination of the lack of revenue and the           
recognition of normal recurring operation and maintenance costs as well as the  
continuing depreciation of the Utility Plant. Based on expected fuel            
consumption, the Seabrook plant management has scheduled the next refueling     
outage for June 1997 at an estimated cost of $20 million. The Company's share is
approximately $2.4 million. The estimate is based on a number of assumptions.   
Changes in assumptions for such things as labor and contractor costs, required  
repairs and days to perform the outage and plant operations in the interim,     
could cause this estimate to change in the near term.                           

O. RECLASSIFICATIONS                                                            

   Certain amounts in prior year financial statements have been reclassified
to conform to the current year presentation.                                    

2. NUCLEAR ISSUES                                                               

   Like other nuclear generating facilities, the Seabrook Project is subject
to extensive regulation by the NRC. The NRC is empowered to authorize the       
siting, construction and operation of nuclear reactors after consideration of   
public health, safety, environmental and anti-trust matters.                    

 The NRC has promulgated numerous requirements affecting safety systems,
fire protection, emergency response planning and notification systems, and other
aspects of nuclear plant construction, equipment and operation. The Company has 
been, and may be, affected to the extent of its proportionate share by the cost 
of any such modifications to Seabrook Unit 1.                                   

Nuclear units in the United States have been subject to widespread    
criticism and opposition. Some nuclear projects have been canceled following    
substantial construction delays and cost overruns as the result of              

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

licensing problems, unanticipated construction defects and other difficulties.  
Various groups have by litigation, legislation and participation in             
administrative proceedings sought to prohibit the completion and operation of   
nuclear units and the disposal of nuclear waste. In the event of a shutdown of  
any unit, NRC regulations require that it be completely decontaminated of any   
residual radioactivity. The cost of such decommissioning, depending on the      
circumstances, could substantially exceed the owners' investment at the time of 
cancellation.                                                                   

Public controversy concerning nuclear power could adversely affect the
operating license of Seabrook Unit 1. While the Company cannot predict the      
ultimate effect of such controversy, it is possible that it could result in a   
premature shutdown of the unit.                                                 

A. NUCLEAR FUEL                                                                 

   The Seabrook Project's joint owners have made, or expect to make, various
arrangements for the acquisition of uranium concentrate, the conversion,        
enrichment, fabrication and utilization of nuclear fuel and the disposition of  
that fuel after use. The owners and lead participants of each United States     
nuclear unit have entered into contracts with the DOE for disposal of spent     
nuclear fuel, in accordance with the NWPA. The NWPA requires (subject to various
contingencies) that the federal government design, license, construct and       
operate a permanent repository for high level radioactive wastes and spent      
nuclear fuel and establish prescribed fees for the disposal of such wastes and  
fuel. The NWPA specifies that the DOE provide for the disposal of such wastes   
and spent nuclear fuel starting in 1998.                                        

  Objections on environmental and other grounds have been asserted against
proposals for storage as well as disposal of spent fuel. The DOE anticipates    
that a permanent disposal site for spent fuel will be ready to accept fuel for  
storage on or before the year 2010. However, the NRC, which must license the    
site, stated only that a permanent repository will become available by the year 
2025. At the Seabrook Project, there is on-site storage capacity which, with    
minimal capital expenditures, should be sufficient for twenty years or until the
year 2010. No near-term capital expenditures are anticipated to deal with any   
increase in storage requirements after 2010.                                    

B. FEDERAL DEPARTMENT OF ENERGY ("DOE") DECONTAMINATION AND DECOMMISSIONING     
ASSESSMENT                                                                      

   Title XI of the Energy Policy Act of 1992 (the "Policy Act") provides for
decontaminating and decommissioning of the DOE's enrichment facilities to be    
partially funded by a special assessment against domestic utilities. Each       
utility's share of the assessment is to be based on its cumulative consumption  
of DOE enrichment services. As of December 31, 1995, the Company had accrued its
pro rata estimated obligation of $738,000 related to the project's prior years' 
usage to be paid over the 15-year period beginning October 1, 1992.             

C. PRICE ANDERSON ACT                                                           

 In accordance with the Price Anderson Act, the limit of liability for a
nuclear-related accident is approximately $8.9 billion, effective November 18,  
1994. The primary layer of insurance for this liability is $200 million of      
coverage provided by the commercial insurance market. The secondary coverage is 
approximately $8.7 billion, based on the 110 currently licensed reactors in the 
United States. The secondary layer is based on a retrospective premium          
assessment of $79.3 million per nuclear accident per licensed reactor, payable  
at a rate not exceeding $10 million per year per accident and a maximum of $20  
million per year. In addition, the retrospective premium is subject to inflation
based indexing at five year intervals and, if the sum of all public liability   
claims and legal costs arising from any nuclear accident exceeds the maximum    
amount of financial protection available, then each licensee can be assessed an 
additional 5% ($3.775 million) of the maximum retrospective assessment. With    
respect to the Seabrook Project, the Company would be obligated to pay its      
ownership share of any assessment resulting from a nuclear incident at any      
United States nuclear generating facility. The Company estimates its maximum    
liability per incident currently would be an aggregate amount of approximately  
$9.59 million per accident, with a maximum annual assessment of about $1.21     
million per incident, per year.                                                 

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

  In addition to the insurance required by the Price Anderson Act, the NRC
regulations require licensees, including the Seabrook Project, to carry all risk
nuclear property damage insurance in the amount of at least $1.06 billion, which
amount must be dedicated, in the event of an accident at the reactor, to the    
stabilization and decontamination of the reactor to prevent significant risk to 
the public health and safety.                                                   

D. NUCLEAR INSURANCE                                                            

    Insurance has been purchased by the Seabrook Project from Nuclear Electric
Insurance Limited ("NEIL") to cover the costs of property damage,               
decontamination or premature decommissioning resulting from a nuclear incident  
and American Nuclear Insurance/Mutual Atomic Energy Liability Underwriters      
("ANI") to cover workers' claims. All companies insured with NEIL and ANI are   
subject to retroactive assessments, if losses exceed the accumulated funds      
available to NEIL and ANI, respectively. The maximum potential assessment       
against the Seabrook Project with respect to losses arising during the current  
policy years are $26.4 million. The Company's liability for the retrospective   
premium adjustment for any policy year ceases six years after the end of that   
policy year unless prior demand has been made.                                  

    The Company purchased additional business interruption insurance from NEIL
with the current policy in effect from December 22, 1995 until September 15,    
1996. NEIL business interruption insurance is designed to pay a weekly indemnity
in the event of a prolonged outage at Seabrook resulting from property damage   
occurring from a "sudden fortuitous event, which happens by chance, is          
unexpected and unforeseeable." The Company is seeking $520,000 of weekly        
indemnity with a limit of liability of $70.3 million. This policy has an annual 
premium of $129,000 and for the three month period ending March 31, 1996 the    
Company expensed $32,124 related to this policy. Under the terms of this policy,
the Company is subject to a potential retrospective premium adjustment of       
$647,000 should NEIL's board of directors deem that additional funds are        
necessary to preserve the financial integrity of NEIL. There has never been a   
retrospective adjustment since NEIL was founded in 1980. The liability for this 
retrospective premium adjustment ceases six years after the end of the policy   
unless prior demand has been made.                                              

3. TAXES ON INCOME                                                              

                                                        [Enlarge/Download Table]
     The following is a summary of the (benefit) provision for income taxes for          
the year ended December 31, 1995, the period from November 24 to December 31,            
1994, and the period from January 1 to November 23, 1994:                                


                                                            SUCCESSOR         PREDECESSOR
                                                        -----------------     -----------
                                                                               JANUARY 1 
                                                         NOVEMBER 24 TO           TO     
                                                          DECEMBER 31,         NOVEMBER  
                                                        -----------------         23,    
                                                         1995       1994         1994    
                                                        -------     -----     -----------
                                                                     (000'S)             
                                                                                         
    Federal                                                                              
      Current.........................................  $(8,065)    $(353)      $(11,253)
      Deferred........................................    8,011       447         11,253 
                                                        -------     -----       -------- 
                                                            (54)       94             -- 
    State                                                                                
      Current.........................................   (1,923)      (84)        (2,684)
      Deferred........................................    1,923        84          2,684 
                                                        -------     -----       -------- 
                                                             --        --             -- 
                                                        -------     -----       -------- 
         Total (benefit) provision....................  $   (54)    $  94       $     -- 
                                                        =======     =====       ======== 

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

                                                        [Enlarge/Download Table]
     Accumulated deferred income taxes consisted of the following at December              
31, 1995 and 1994:                                                                         


                                                                        1995        1994   
                                                                       -------     ------- 
                                                                             (000'S)       
                                                                                           
    Assets                                                                                 
      Net operating loss carryforwards............................... $ 64,957    $ 54,472 
      Decommissioning expense........................................      618         325 
      Utility plant..................................................       --       1,009 
      Unfunded pension expense.......................................      225         102 
      Accrued outage expense.........................................       43          84 
      Inventory......................................................      196          -- 
    Liabilities                                                                            
      Utility plant..................................................   (7,250)         -- 
                                                                      --------    -------- 
    Accumulated deferred income tax asset............................   58,789      55,992 
    Valuation allowance..............................................  (58,789)    (56,086)
                                                                      --------    -------- 
    Accumulated deferred income tax asset (liability) net............ $     --    $    (94)
                                                                      ========    ======== 

                                                        [Enlarge/Download Table]
     The total income tax provision set forth above represents 0% in the year            
ended 1995, 34% in the period from November 24 to December 31, 1994 and 0% in            
the period from January 1, 1994 to November 23, 1994 of income before such               
taxes. The following table reconciles the statutory federal income tax rate to           
those percentages:                                                                       


                                                           SUCCESSOR          PREDECESSOR
                                                       ------------------     -----------
                                                                               JANUARY 1 
                                                         NOVEMBER 24 TO           TO     
                                                          DECEMBER 31,         NOVEMBER  
                                                       ------------------         23,    
                                                        1995         1994        1994    
                                                       -------       ----     -----------
                                                             (DOLLARS IN THOUSANDS)      
                                                                                         
    (Loss) Income before taxes.......................  $(6,113)      $276      $ 131,385 
    Federal statutory rate...........................       34%        34%            34%
    Federal income tax (benefit) expense at statutory                                    
      levels.........................................   (2,078)        94         44,671 
    Increase (Decrease) from statutory levels                                            
      State tax net of federal tax benefit...........   (1,269)       (55)          (913)
      Valuation allowance............................    2,703         49            858 
      Income of decommissioning trust................      305          6             55 
      Benefit from reorganization....................       --         --        (44,671)
      Other..........................................      285         --             -- 
                                                       -------       ----      --------- 
    Effective federal income tax expense.............  $   (54)      $ 94      $      -- 
                                                       =======       ====      ========= 

  Valuation allowances have been provided against any deferred tax assets,
net due to the limitations on the use of carryforwards, discussed below, and the
uncertainty associated with future taxable income. The valuation allowance of   
$56,086,000 as of December 31, 1994, if subsequently recognized will be         
allocated directly to paid in capital.                                          

   As of December 31, 1995, the Company has an estimated $167 million in net
operating loss carryforwards ("NOL's") that expire between the years 2005 to    
2010. However, because the Company has experienced one or more ownership        
changes, within the meaning of Section 382 of the Internal Revenue Code of 1986,
as amended (the "Tax Code"), an annual limitation has been imposed on the       
ability of the Company to use $136 million of these carryforwards. The Company's
best estimate at this time is that the annual limitation is approximately $5.5  
million, and therefore, the ability to use $136 million in NOL's is restricted. 

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

4. COMMON STOCK RESTRICTIONS                                                    

    The Company has never paid cash dividends on the Common Stock. The Company
currently expects that it will retain all of its future earnings and does not   
anticipate paying a dividend in the foreseeable future.                         

5. CAPITAL EXPENDITURES                                                         

   The Company's cash construction expenditures, including nuclear fuel, are
estimated to be approximately $2.7 million in 1996 and to aggregate             
approximately $21.5 million for the years 1997 through 2000.                    

6. UNITIL POWER PURCHASE AGREEMENT AND POWER PURCHASE OPTION                    

     The Company has entered into an agreement (the "Power Purchase Agreement"),
dated as of April 1, 1993 with UNITIL Power Corporation ("UNITIL Power"), a     
wholly owned subsidiary of UNITIL Corporation ("UNITIL"), which provides for the
Company to sell to UNITIL Power approximately 10MW of power. The Power Purchase 
Agreement commenced on May 1, 1993 and runs through October 31, 2010. During the
first year, the price of power under the Power Purchase Agreement was 5.0 cents 
per kilowatt hour (kWh). Thereafter, the price is subject to increase in        
accordance with a formula which provides for adjustments at less than the actual
rate of inflation. UNITIL Power has the option to extend the Power Purchase     
Agreement for an additional twelve years to 2022.                               

    The Power Purchase Agreement is front-end loaded whereby UNITIL Power pays
higher prices, on an inflation adjusted basis, in the early years of the        
Agreement and lower prices in later years. The average price per kWh and the    
contract formula rate in the contract are fixed over the life of the contract,  
so that any excess cash received in the beginning of the contract will be       
returned by the end of the contract, provided the contract does not terminate   
early. The difference between revenue billed under each rate is recorded in a   
"Balance Account" which increases annually to $4.1 million in 1998, then        
decreases annually, reaching zero in 2001. Therefore, contract revenue is       
recorded under Generally Accepted Accounting Principles and Emerging Issues Task
Force Ruling 91-6 based on the contract rates and no liability for the "Balance 
Account" is recognized provided that it is not probable that the contract will  
terminate early. Management believes it is not probable that either party will  
terminate this contract prior to the end of its initial term. The balance in the
balance account as of March 31, 1996 is approximately $2.0 million.             

    To secure the obligation of the Company under the Power Purchase Agreement
and to repay to UNITIL Power the amounts in the balance account, if the contract
terminates early, the Power Purchase Agreement grants UNITIL Power a mortgage on
the Company's Seabrook Interest. This mortgage granted to UNITIL Power is junior
only to the existing mortgage on the Seabrook Interest granted pursuant to the  
Third Stipulation and any successor first mortgage financing up to a maximum    
amount of $80,000,000. The Power Purchase Agreement further provides that UNITIL
Power's second mortgage will rank pari passu with other mortgages that may      
hereafter be granted to other purchasers of power from the Company to secure    
similar obligations, provided that the maximum amount of indebtedness secured by
the first mortgage on the Seabrook Interest does not exceed $60,000,000, and    
provided that the combined total of all second mortgages on the Seabrook        
Interest does not exceed the sum of (a) $80,000,000 less the total amount of the
Company's debt then outstanding which is secured by a first mortgage plus (b)   
$57,000,000.                                                                    

   In addition to the Power Purchase Agreement, the Company also has entered
into an agreement (the "Power Purchase Option Agreement") with UNITIL Power     
under which the Company will grant UNITIL Power the option to purchase during   
the period from November 1, 1998 through October 31, 2018, approximately 15MW of
electricity at 6.5 cents per kWh, subject to adjustment in accordance with a    
formula. UNITIL Power will be required to exercise its option under the Power   
Purchase Option Agreement on or before the earlier of (a) October 31, 1996, and 
(b) 30 days after the first date on which the Company is                        

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

prepared to commit to sell, for a minimum of 10 years, all or any part of the   
last remaining 15 MW of electricity from Seabrook Unit 1 to which the Company is
entitled.                                                                       

7. PECO SERVICES AGREEMENT AND WARRANT AGREEMENT                                

The Company and PECO Energy Company ("PECO") entered into a Services  
Agreement dated as of November 3, 1995 (the "PECO Services Agreement"), pursuant
to which PECO was appointed as the Company's exclusive agent to market and sell 
the Company's uncommitted portion of electricity generated by the Seabrook      
Project. Proceeds from the sale of the Company's electricity together with      
reservation fees payable by PECO to the Company will be shared between the      
Company and PECO in accordance with formulas set forth in the PECO Services     
Agreement.                                                                      

    The PECO Services Agreement became effective on December 31, 1995, and has
an initial term of two years. The term will be automatically extended for one   
additional year (to December 31, 1998) if PECO exercises the PECO Warrant (as   
defined below) to purchase the Warrant Shares (as defined below). At any time   
prior to the Warrant Expiration Date (as defined below), the Company is entitled
to terminate the PECO Services Agreement; however, if the PECO Services         
Agreement is so terminated, the Company will be required to refund to PECO the  
$1,000,000 purchase price for the PECO Warrant plus interest.                   

    At the time that the Company entered into the PECO Services Agreement, the
Company and PECO entered into a Warrant Purchase Agreement, dated November 3,   
1995, pursuant to which on February 15, 1996, PECO purchased a warrant (the     
"PECO Warrant") from the Company for $1,000,000. The PECO Warrant entitles PECO 
to purchase 420,000 shares (the "Warrant Shares") of the Company's Common Stock,
$0.01 par value per share, (the "Common Stock") at an exercise price of the     
higher of (1) $9.75 per share, or (2) the highest trading price per share of the
Company's Common Stock prior to the expiration date of the PECO Warrant. The    
$1,000,000 purchase price for the PECO Warrant will be credited to the aggregate
exercise price of the PECO Warrant upon exercise. If PECO does not exercise the 
PECO Warrant, the purchase price for the PECO Warrant is wholly or partially    
refundable only if the Company terminates the PECO Services Agreement for       
convenience prior to the Warrant Expiration Date or in certain other            
circumstances under the control of the Company. The PECO Warrant expires on     
September 30, 1996 (the "Warrant Expiration Date") unless extended because the  
Seabrook Project fails to maintain a 60% capacity factor for the first nine     
months of 1996, in which case the Warrant Expiration Date will be extended until
the earlier of such time as the Seabrook Project's rolling 12-month capacity    
factor equals or exceeds 60% or December 31, 1997.                              

8. TRANSACTIONS WITH RELATED PARTIES                                            

  The Company entered into two other agreements with affiliates of UNITIL.

 A Management and Administrative Services Agreement was in effect during
1995 between the Company and UNITIL Resources, Inc. ("UNITIL Resources"), a     
wholly owned subsidiary of UNITIL until December 31, 1995. The Management and   
Administrative Services Agreement went into effect on November 23, 1994 and     
provided for UNITIL Resources to provide a full range of services to the        
Company, including management, accounting and bookkeeping, budgeting and        
regulatory compliance. Under the Management and Administrative Services         
Agreement, the Company was paying UNITIL Resources $225,000 per year for senior 
executive management services and was paying for day-to-day operational services
by paying an amount equal to the cost of providing those services plus 25% of   
such cost. For the year ended December 31, 1995 and for the period from November
24, 1994 to December 31, 1994, the Company expensed $591,352 and $52,900,       
respectively, related to this agreement. The Management and Administrative      
Services Agreement had an automatically renewing one year term, except that     
either the Company or                                                           

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

UNITIL Resources may terminate without cause on 60 days prior written notice.   
The Company gave notice and terminated this agreement on December 31, 1995.     

 The Company's marketing efforts were provided by UNITIL Resources until
December 31, 1995. Under the terms of this Marketing Agreement with UNITIL      
Resources, the Company was paying UNITIL Resources all costs incurred by UNITIL 
Resources to obtain new sales contracts plus a commission for sales of power.   
The amount of the commission payable varied based on the length of the power    
sale contracts and prices obtained. For the year ended December 31, 1995 and for
the period from November 24, 1994 to December 31, 1994, the Company expensed    
$333,138 and $11,500, respectively, related to this agreement. This agreement   
was also terminated as of December 31, 1995.                                    

The Company leases its headquarters space under an expense sharing    
agreement with TILTEC, a company owned by the Company's President. Under the    
agreement, TILTEC provides the Company with furnished office space and          
administrative support services for a total fee of $7,400 per month. The expense
sharing agreement has a one year term and provides for automatic one year       
renewals. Either party may terminate the agreement on 60 days prior written     
notice to the other party.                                                      

     Prior to February 5, 1993, the Predecessor was a wholly-owned subsidiary of
EUA. EUA has interests in other retail and wholesale utility companies, a       
service corporation, and other non-utility companies. Transactions between the  
Predecessor and EUA affiliated companies prior to the reorganization include    
accounting, engineering and other services rendered by EUA Service of           
approximately $116,000 for the period from January 1, 1994 to November 23, 1994.

9. STOCK OPTION PLAN                                                            

  On April 24, 1995, the Board of Directors of the Company established the
1995 Stock Option Plan (the "Plan"),which received shareholder approval at the  
Company's annual meeting on April 16, 1996. The purpose of the Plan is to secure
for the Company and its shareholders the benefits arising from capital stock    
ownership by employees, officers and directors of, and consultants or advisors  
to, the Company who are expected to contribute to the Company's future growth   
and success. Options granted pursuant to the Plan may be either incentive stock 
options meeting the requirements of Section 422 of the Internal Revenue Code or 
non-statutory options which are not intended to meet the requirements of Section
422. The maximum number of shares of Common Stock which may be issued and sold  
under the Plan is 600,000 shares. The Plan will be administered by the Board of 
Directors of the Company and may be modified or amended by the Board in any     
respect, subject to shareholder approval in certain instances.                  

                                                        [Enlarge/Download Table]
 To date, the following options have been granted under the Plan:                      


                                                              NUMBER OF  AVERAGE OPTION
                                                               SHARES        PRICE     
                                                              ---------  --------------
                                                                                       
1995 Activity                                                                          
  Granted...................................................   335,000        8.17     
  Exercised.................................................        --          --     
  Canceled..................................................        --          --     
Outstanding at December 31, 1995............................   335,000                 

10. NEW ACCOUNTING PRONOUNCEMENTS                                               

    In March 1995, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for Impairment of Long-Lived Assets and for         
Long-Lived Assets To Be Disposed Of", effective for fiscal years beginning after
December 15, 1995. SFAS No. 121 establishes accounting standards for the        
impairment of long-lived assets and requires that assets which are no longer    
probable of recovery be charged to                                              

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GREAT BAY POWER CORPORATION 

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995 

earnings. The Company adopted SFAS No. 121 on January 1, 1996, and the adoption 
did not have a material impact on the Company's financial position or results of
operations.                                                                     

    In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," effective for fiscal years beginning after December 15, 1995.    
SFAS No. 123 requires that financial statements include certain disclosures     
related to stock-based employee compensation arrangements regardless of the     
method used to account for them. The Company does not plan to adopt the         
accounting under this pronouncement but rather adopt the required audited pro   
forma disclosure. Based on arrangements used by the pronouncement, the pro forma
effects on earnings and earnings per share are not expected to be material.     

11. PROPERTY TAXES                                                              

     In December 1995, the Town of Seabrook, New Hampshire (the "Town") issued a
bill for property taxes for the second half of 1995 to "North Atlantic Energy   
Corp., et al." The Town informed the Company that it believed the Company's     
share of this bill was equal to $1,293,000. The Company initially refused to pay
the bill because the Company believes that the Town's assessment of the         
Company's interest in the Seabrook Project is overstated and because the bill   
fails to recognize the Company as an independent taxpayer with a separately     
assessed and valued parcel of real estate. As of March 31, 1996, the non-payment
of these taxes was reflected in the Company's financial statements as Taxes     
Accrued. On April 30, 1996 the Company paid the December 1995 property tax bill 
to avoid the Town placing a lien on the Seabrook Project. The Company has filed 
a petition with the Town seeking a tax abatement of its 1995 property taxes.    
Management is unable to express an opinion as to the likely outcome of this     
matter.                                                                         

12. SUBSEQUENT EVENTS                                                           

     On January 18, 1996, the Company held a special meeting of stockholders. At
the special meeting, the stockholders approved the following amendments to the  
Company's Restated Articles of Incorporation: (1) the number of authorized      
shares of common stock was increased from 8,000,000 to 20,000,000 shares; (2)   
5,000,000 shares of undesignated Preferred Stock were authorized, the terms and 
rights of which may be designated from time to time by the Board of Directors;  
(3) a provision requiring the affirmative vote of the holders of at least 75% of
the shares of capital stock issued and outstanding to amend, repeal or adopt any
provision inconsistent with the Articles of Incorporation was deleted; and (4) a
provision eliminating any preemptive rights of the Company's stockholders to    
acquire shares issued by the Company was added.                                 

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REPORT OF INDEPENDENT ACCOUNTANTS 

To the Director of Great Bay Power Corporation:                                 

    We have audited the statements of loss and retained (deficit) earnings and
cash flows for the year ended December 31, 1993 of Great Bay Power Corporation  
(formerly EUA Power Corporation; the "Company"). These financial statements are 
the responsibility of the Company's management. Our responsibility is to express
our opinion on these financial statements based on our audit.                   

We conducted our audit in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audit provides a reasonable basis for our opinion.          

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows of the       
Company for the year ended December 31, 1993 in conformity with generally       
accepted accounting principles.                                                 

                            COOPERS & LYBRAND L.L.P.

Boston, Massachusetts                                                           
April 7, 1994, except as to the                                                 
information presented in                                                        
Note H, for which the date is                                                   
November 23, 1994                                                               

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GREAT BAY POWER CORPORATION 
(F.K.A. EUA POWER CORPORATION)

                                                        [Enlarge/Download Table]
                               STATEMENT OF LOSS                                          
                               DECEMBER 31, 1993                                          
                      (DEBTOR-IN-POSSESSION)(IN THOUSANDS)                                

                                                                                          
Operating Revenues............................................................... $24,620 
                                                                                  ------- 
Operating Expenses:                                                                       
     Fuel........................................................................   6,869 
     Other Operation.............................................................  13,052 
     Maintenance.................................................................   3,070 
     Depreciation and Decommissioning............................................   9,020 
     Taxes Other Than Income.....................................................   3,878 
     Income Tax (Credit).........................................................    (630)
     Deferred Taxes (Credit).....................................................  (3,421)
                                                                                  ------- 
          Total Operating Expenses...............................................  31,838 
                                                                                  ------- 
Operating (Loss).................................................................  (7,218)
Deferred Income Taxes............................................................    (459)
Other Income -- Net..............................................................     226 
Reorganization Expenses..........................................................   1,867 
                                                                                  ------- 
          Income Before Interest Charges.........................................  (9,318)
                                                                                  ------- 
Interest Charges:                                                                         
     Interest on Long-Term Debt (Contractual Interest Expense for 1993 was                
      $48,929,510)                                                                        
     Other Interest Expense (Contractual Interest Expense for 1993 was                    
      $144,763)..................................................................     115 
                                                                                  ------- 
          Net Interest Charges (Deductions)......................................     115 
                                                                                  ------- 
Net Loss......................................................................... $(9,433)
                                                                                  ======= 

GREAT BAY POWER CORPORATION 
(F.K.A. EUA POWER CORPORATION)

                                                        [Enlarge/Download Table]
                    STATEMENT OF RETAINED (DEFICIT) EARNINGS                              
                         YEARS ENDED DECEMBER 31, 1993                                    
                      (DEBTOR-IN-POSSESSION)(IN THOUSANDS)                                

                                                                                          
Retained (Deficit) Earnings -- Beginning of Year:.............................. $(130,360)
Net Loss.......................................................................    (9,433)
                                                                                --------- 
Retained (Deficit) Earnings -- End of Year..................................... $(139,793)
                                                                                ========= 
<FN>                                                                                      
Note 1 -- Other than the changes to Retained Earnings resulting from the Net              
          Loss of $9,433,000, there was no change in the Equity of the Company            
          during the year ended December 31, 1993.                                        


(The accompanying notes are an integral part of these statements.)

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GREAT BAY POWER CORPORATION 
(f.k.a. EUA POWER CORPORATION)

                                                        [Enlarge/Download Table]
                            STATEMENTS OF CASH FLOW                                         
                               DECEMBER 31, 1993                                            
                      (DEBTOR-IN-POSSESSION)(IN THOUSANDS)                                  

                                                                                            
Cash Flow From Operating Activities:                                                        
Net Loss........................................................................... $(9,433)
                                                                                    ------- 
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:             
     Depreciation and Amortization.................................................   8,124 
     Amortization of Nuclear Fuel..................................................   5,818 
     Deferred Taxes................................................................  (2,962)
     Investment Tax Credit, Net....................................................    (630)
     Other -- Net..................................................................   1,026 
Net Changes of Working Capital:                                                             
     Accounts Receivable...........................................................     (97)
     Accounts Payable..............................................................    (122)
     Accrued Taxes.................................................................     139 
     Other -- Net..................................................................  (1,401)
                                                                                    ------- 
Net Cash (Used In) Provided from Operating Activities..............................     462 
                                                                                    ------- 
Cash Flow From Investing Activities:                                                        
     Construction Expenditures.....................................................  (6,885)
                                                                                    ------- 
Net Cash (Used In) Provided From Investing Activities..............................  (6,885)
                                                                                    ------- 
Cash Flow From Financing Activities:                                                        
     Issuances:                                                                             
          Debtor-in-Possession Financing...........................................   1,744 
          Settlement Proceeds                                                               
                                                                                    ------- 
Net Cash Provided from Financing Activities........................................   1,744 
                                                                                    ------- 
Net Increase (Decrease) in Cash....................................................  (4,679)
                                                                                    ------- 
Cash and Temporary Cash Investments at Beginning of Year...........................   4,817 
                                                                                    ------- 
Cash and Temporary Cash Investments at End of Period............................... $   138 
                                                                                    ======= 

(The accompanying notes are an integral part of these statements.)

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 1993 

NOTE A -- BUSINESS:                                                             

  The Registrant, Great Bay Power Corporation (formerly known as EUA Power
Corporation), is a New Hampshire corporation, incorporated in 1986, authorized  
by the NHPUC to engage in business as a public utility for the purposes of      
participating as a joint owner in the Seabrook Project, acquiring its 12.1%     
interest in the Seabrook Project and selling its share of the output of Seabrook
Unit 1 for resale. The Company, organized as a wholly-owned subsidiary of EUA,  
became fully independent of EUA on February 5, 1993 in connection with the      
bankruptcy proceeding described in Note B -- Bankruptcy Proceeding. The Company 
became a wholesale generating company when Seabrook Unit 1 commenced commercial 
operation on August 19, 1990.                                                   

On February 28, 1991, the Company filed a voluntary petition in the   
Bankruptcy Court for the District of New Hampshire for protection under Chapter 
11 of the Bankruptcy Code. The Bankruptcy Court confirmed the Bondholders       
Committees' Fifth Amended Plan of Reorganization on March 5, 1993. After        
confirmation, the Company was unable to obtain the $45 million of debt financing
contemplated by the Fifth Amended Plan of Reorganization. In February 1994,     
however, the Bondholders Committee obtained a commitment from Omega Advisers,   
Inc. ("Omega") or its designees to provide $35 million of equity financing for  
the Company (the "Omega Financing"). The Bondholders Committee prepared a First 
Modification to Fifth Amended Plan of Reorganization to reflect this change in  
financing and submitted a Supplemental Disclosure Statement describing that     
First Modification to the Bankruptcy Court for its approval. The Fifth Amended  
Plan of Reorganization, as modified by the First Modification is hereinafter    
referred to as the "Plan." The Bankruptcy Court approved the Supplemental       
Disclosure Statement at a hearing on March 11, 1994. The Plan is scheduled to be
mailed to the Company's creditors for their approval on or before April 7, 1994.
If the Creditors approve the Plan, the Company expects the Bankruptcy Court to  
confirm the plan in a hearing currently scheduled for May 13, 1994, although    
such confirmation cannot be assured. The Omega Financing and the Plan are       
subject to approval by certain regulatory authorities. On February 15, 1994 the 
Nuclear Regulatory Commission issued an order approving a transfer of control of
the Company as contemplated by the Omega Financing and extending the deadline   
for completion of such transfer to June 30, 1994. There can be no assurance that
other such approvals will be obtained. Moreover, the Omega Financing is not yet 
reduced to a definitive agreement. The Plan will not be circulated to creditors 
unless and until such a definitive agreement has been signed.                   

The Omega Financing provides for the Company to sell its common stock 
representing a 60% ownership interest in the Company to Omega or its designees  
for an aggregate purchase price of $35 million. The 40% balance of the Company's
common stock will be issued 34% to the Company's Bondholders in full payment and
satisfaction of their secured claims and 6% to the Company's unsecured creditors
with claims in excess of $25,000 in full payment and satisfaction of their      
claims. These unsecured claims consist primarily of the unsecured deficiency    
claims of the Bondholders under the Bonds. (See Note B -- Bankruptcy Proceeding 
below for a discussion of the Company's bankruptcy proceeding and the Omega     
Financing.)                                                                     

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

                                                        [Enlarge/Download Table]
     Seabrook Unit 1 is a 1,150 MW nuclear generating plant located in Seabrook,          
New Hampshire. The Company acquired its joint ownership interest in the Seabrook          
Project for approximately $174,000,000 in November 1986 from five New England             
electric utilities in independently negotiated transactions. At that time,                
construction of Seabrook Unit 1 was substantially completed. Because Seabrook             
Unit 2 had been canceled, the Company assigned no value to it. On March 29,               
1991, the Company announced that it had provided an impairment reserve in 1990            
against its investment in Seabrook Unit I, which was recorded effective on                
December 31, 1990. For financial statement reporting purposes, the Company                
valued its investment in Seabrook Unit I, including nuclear fuel but net of the           
related Series B and C Notes which it collateralizes as follows:                          


                                                   DECEMBER 31, 1990     DECEMBER 31, 1993
                                                   -----------------     -----------------
                                                               (IN THOUSANDS)             
                                                                                          
Net Investment...................................     $ 340,640             $ 311,932     
Related Secured Debt.............................      (300,597)             (293,723)(1) 
                                                      ---------             ---------     
Net Carrying Amount..............................     $  40,043             $  18,209     
                                                      =========             =========     

<FN>                                                                                      
(1) includes accrued interest of $14,126                                                  


The ultimate value of the investment and the related debt (which is a 
liability subject to compromise) cannot be determined until the bankruptcy is   
resolved.                                                                       

    The Company has no employees.  John R. Stevens, president of EUA serves as
president and sole director of the Company at the request and subject to the    
direction of the Bondholders Committee. Mr. Stevens expects to resign both      
positions on the Effective Date. Since the Company's organization, EUA Service, 
a wholly owned subsidiary of EUA, has provided, or arranged for, various        
management and professional services. Pursuant to various Bankruptcy Court      
orders, EUA Service continues to provide similar services to the Company. Under 
the terms of the Settlement Agreement (as discussed below), EUA Service will    
continue to provide, at cost, certain services to the Company at the request of 
the Bondholders Committee for a period of not more than two years from the      
effective date of the Settlement Agreement. However, such services specifically 
exclude the marketing of the Company's entitlement in Seabrook Unit 1 on a      
long-term basis. The Company has agreed with UNITIL that an affiliate of UNITIL 
will replace EUA Service in providing various services on the Effective Date. In
addition, the Company has entered into a contract with an affiliate of UNITIL   
pursuant to which that affiliate is marketing the Company's share of electricity
from Seabrook Unit 1.                                                           

NOTE B -- BANKRUPTCY PROCEEDING:                                                

Background:                                                                 

On February 28, 1991, the Company filed a voluntary petition in the   
Bankruptcy Court for the District of New Hampshire for protection under Chapter 
11 of the federal Bankruptcy Code and has been conducting its business as a     
Debtor and Debtor-in-Possession under the provisions of the Bankruptcy Code. The
Company filed such petition because the cash generated by short-term sales of   
electricity from its entitlement in Seabrook Unit 1 would have been insufficient
to pay interest on its outstanding Secured Notes when interest became due on May
15, 1991 and the prospects for signing long-term power sales contracts prior to 
that date were minimal. The Company continues its efforts to market its         
entitlement to Seabrook Unit 1 under the direction of the Bondholders Committee.

Settlement Agreement:                                                       

On November 18, 1992, the Company, the Bondholders Committee and EUA  
entered into a Settlement Agreement which resolved certain adversary proceedings
against EUA, brought, or threatened to be brought,                              

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

by the Bondholders Committee including, (i) a claim for recovery of certain     
alleged preferential transfers in the aggregate amount of $38.5 million, plus   
interest; (ii) a threatened claim for the recovery of $100 million plus treble  
damages arising from, among other things, certain alleged breaches of fiduciary 
duties by EUA, EUA Service and the officers and directors of the Company; and,  
(iii) certain matters arising out of tax sharing agreements between EUA, its    
subsidiaries, and the Company. The Settlement Agreement also provided for the   
payment of $20 million to the Company by EUA. The Settlement Agreement further  
provided for the relinquishment by EUA of its equity interest in the Company and
all claims filed in Bankruptcy Court by EUA and its affiliates against the      
Company. These claims related primarily to obligations of the Company guaranteed
and paid by EUA, including $21 million of Solid Waste Disposal Facility Revenue 
Bonds, issued by the New Hampshire Industrial Development Authority on behalf of
the Company and other notes payable. The settlement of these claims was recorded
as a deferred credit on the Company's 1992 Balance Sheet, pending the ultimate  
outcome of the Bankruptcy Proceeding. The Settlement Agreement became effective 
on December 30, 1992 at which time EUA paid $20 million to the Company. The     
Company used a substantial portion of the proceeds from the Settlement Agreement
to repay amounts outstanding under the First Stipulation (as described below)   
and to pay reorganization expenses and other operating expenses. The Company    
redeemed all of its outstanding equity securities which were held by EUA, at no 
cost, on February 5, 1993. The redeemed shares have been classified as treasury 
stock on the Company's financial statements as of December 31, 1993. As a result
of the redemption, the Company is no longer part of the EUA System.             

   Under the Settlement Agreement, EUA reaffirmed its guarantee of up to $10
million of the Company's share of future decommissioning costs of Seabrook Unit 
1 and any costs of cancellation of Seabrook Unit 1 or Unit 2. EUA had guaranteed
this obligation in 1990 in order to secure the release to the Company of a $10  
million fund established by the Company for the same purpose at the time the    
Company acquired its Seabrook Interest. Further, under the Settlement Agreement,
all of the officers and directors of the Company (except Mr. Stevens) resigned  
and the Company changed its name to Great Bay Power Corporation. EUA now has no 
ownership interest in the Company.                                              

Reorganization Plan:                                                        

 The Bankruptcy Court confirmed the Bondholders Committees Fifth Amended
Plan of Reorganization on March 5, 1993. After confirmation, the Company was    
unable to obtain the $45 million of debt financing contemplated by the Fifth    
Amended Plan of Reorganization. In February 1994, however, the Bondholders      
Committee obtained a commitment from Omega or its designees to provide $35      
million of equity financing for the Company. The Bondholders Committee prepared 
a First Modification to Fifth Amended Plan of Reorganization to reflect this    
change in financing and submitted a Supplemental Disclosure Statement describing
that First Modification to the Bankruptcy Court for its approval. The Bankruptcy
Court approved the Supplemental Disclosure Statement at a hearing on March 11,  
1994. The Plan is scheduled to be mailed to the Company's creditors for their   
approval on or before April 7, 1994. If the Creditors approve the Plan, the     
Company expects the Bankruptcy Court to confirm the Plan in a hearing currently 
scheduled for May 13, 1994, although such confirmation cannot be assured. The   
Omega Financing and the Plan are subject to approval by certain regulatory      
authorities. On February 15, 1994 the Nuclear Regulatory Commission issued an   
order approving a transfer of control of the Company as contemplated by the     
Omega Financing and extending the deadline for completion of such transfer to   
June 30, 1994. There can be no assurance that other such approvals will be      
obtained. Moreover, the Omega Financing is not yet reduced to a definitive      
agreement. The Plan will not be circulated to creditors unless and until such a 
definitive agreement has been signed.                                           

The Omega Financing provides for the Company to sell its common stock 
representing a 60% ownership interest in the Company to Omega or its designees  
for an aggregate purchase price of $35 million. The 40% balance of the Company's
common stock will be issued 34% to the Company's Bondholders in full payment    

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

and satisfaction of their secured claims pursuant to the Bonds and 6% to the    
Company's unsecured creditors with claims in excess of $25,000 in full payment  
and satisfaction of their claims. These unsecured claims consist primarily of   
the unsecured deficiency claims of the Bondholders under the Bonds. The holders 
of unsecured claims of less than $25,000, other than those unsecured claims     
resulting from the ownership of the Secured Notes, will be paid 50% of the      
amounts of their claims allowed by the Bankruptcy Court in cash on the Effective
Date. The Plan requires that prior to the Effective Date the Bondholders        
Committee obtain the Omega Financing.                                           

Although a bar date for all claims has been entered and passed, claims
arising from the rejection of contracts or claims which the Bankruptcy Court    
permits to be filed notwithstanding the bar date may dilute the percentage of   
the unsecured claims held by the Secured Bondholders. All of the previously     
issued and outstanding equity securities of the Company have been redeemed by   
the Company. The CICs issued in connection with the Series B Notes or otherwise 
will be extinguished on the Effective Date. After the Effective Date, the equity
of the Company will be represented by a single class of common stock. The       
Company will use good faith efforts to list its shares of common stock so that  
they will be tradeable on the American Stock Exchange or the NASDAQ National    
Market System.                                                                  

  The Bondholders Committee has appointed or will appoint agents to manage
the Company's business and to market the Company's share of Seabrook            
electricity. During the period between the Confirmation of the Plan and the     
Effective Date, those agents are to report to the Bondholders Committee and, to 
the extent actions are to be taken outside of the ordinary course of business,  
such actions shall be subject to the approval of the Bankruptcy Court and       
regulatory bodies with jurisdiction under applicable law. John R. Stevens,      
president of EUA, expects to resign as president and director of the Company on 
the Effective Date. The Bondholders Committee has disclosed the names of two    
individuals proposed to serve on the Board of Directors (the New Board) of the  
Company after the Effective Date. The proposed two members of the New Board are 
John A. Tillinghast and Walter H. Goodenough. The Bondholders Committee is also 
considering other candidates to serve as members of the New Board. The persons  
who will serve on the New Board will be finally determined before the Effective 
Date. The New Board will take office upon the Effective Date. The New Board will
serve until its members resign or are replaced in accordance with New Hampshire 
corporate law and the requirements of the Company's charter and by-laws.        

The effectiveness of the Plan is conditioned upon obtaining plan of   
reorganization financing and approvals from various regulatory agencies         
including the NRC. The Company has obtained the approval of the NRC, provided   
the Company obtains plan of reorganization financing. The Company cannot predict
whether it will be able to obtain plan of reorganization financing or whether   
the plan, or any other plan if filled, will be approved by the various          
regulatory agencies having jurisdiction.                                        

DIP Financing:                                                              

   The Company is required under the JOA to pay its share of Seabrook Unit 1
and Seabrook Unit 2 expenses including, without limitation, operations and      
maintenance expenses, construction and nuclear fuel expenditures and            
decommissioning costs, regardless of Seabrook Unit 1's operations. Under certain
circumstances, a failure by the Company to make its monthly payments under the  
JOA could adversely affect its entitlement in Unit 1. At current market prices, 
the cash generated by such electricity sales continues to be less than the      
Company's on-going cash requirements.                                           

     On August 29, 1991, the Bankruptcy Court approved a Stipulation and Consent
Order (the First Stipulation) with respect to DIP Financing to be provided by   
certain joint owners of Seabrook for the benefit of the Company. The First      
Stipulation was entered into by the Company and CL&P and UI (the Participating  
Joint Owners), two of the other eleven joint owners of the Seabrook Project, as 
well as the Bondholders Committee. The First Stipulation was also approved by   
the NHPUC and the SEC under the 1935 Act.                                       

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

     On July 21, 1992, the Bankruptcy Court issued a procedural order permitting
an extension of the First Stipulation. For the period after September 30, 1992  
until March 5, 1993, the procedural order permitted continued                   
debtor-in-possession financing on a month-to-month basis at the sole discretion 
of the Participating Joint Owners terminable on 30 days notice. The Bankruptcy  
Court issued a second procedural order on September 8, 1992 increasing to $22   
million from $15 million the amount of advances outstanding at any one time     
permitted under the First Stipulation. The Participating Joint Owners continued 
to advance funds under the First Stipulation, as amended, until the amounts     
advanced thereunder were repaid with the proceeds of the Company's Settlement   
Agreement with EUA. The First Stipulation expired on March 5, 1993.             

    A second stipulation was entered into by the Company and the Participating
Joint Owners and was approved by the Bankruptcy Court and various regulatory    
authorities. However, that stipulation did not become effective, and on March 5,
1993, the Company and the Participating Joint Owners entered into a third       
stipulation (the Third Stipulation) which was approved by the Bankruptcy Court. 

  The Third Stipulation provides that the Participating Joint Owners shall
provide up to a maximum of $20 million in advances to the Company to enable the 
Company to pay its pro rata share of the Seabrook Project's operating expenses, 
expenses of the Company in connection with its Chapter 11 proceedings and       
certain other costs of operation of the Company. Pursuant to the Third          
Stipulation, the advances made by the Participating Joint Owners bear an        
interest rate equal to the prime rate of The First National Bank of Boston plus 
7% per annum. The Third Stipulation provides the Participating Joint Owners with
a priority lien on all the Company's assets, which lien has priority over the   
Bondholders' mortgage. The Third Stipulation further provides that in the event 
of a default thereunder, the Participating Joint Owners are entitled to purchase
the Company's Seabrook Interest for 75% of the lesser of fair market value or   
book value and to apply all or part of the amounts owing under the Third        
Stipulation against the purchase price. The Third Stipulation terminates on the 
earliest to occur of (a) July 1, 1994, (b) the Effective Date or the closing of 
a sale of all or substantially all of the Company's assets or business, and (c) 
an event of default under the terms of the Third Stipulation. The Company is in 
default of the Third Stipulation for, among other reasons, failure to obtain    
financing for the Plan by the date required in the Third Stipulation. Although  
the Company has been in default since November 1, 1993, the Participating Joint 
Owners have continued to provide financing pursuant to the Third Stipulation.   
There is, however, no assurance that they will continue to do so. As of March   
25, 1994, outstanding advances under the Third Stipulation were approximately   
$2.2 million in the aggregate.                                                  

Other Matters:                                                              

The Company's reorganization expenses are subject to approval by the  
Bankruptcy Court. For the period March 1, 1991 through August 31, 1993,         
professionals have submitted fees and expenses in the amount of approximately   
$5.9 million to the Bankruptcy Court for its approval, and the Bankruptcy Court 
has provisionally authorized, subject to its review at the conclusion of the    
Chapter 11 proceeding, payments of approximately $4.5 million. The Company has  
paid amounts provisionally authorized by the Bankruptcy Court, and those are    
reflected on the Company's Statement of Loss during the period in which they    
have been paid. Other submitted, but not provisionally authorized, expenses have
not been recorded.                                                              

   Since August 31, 1993, no hearings on approval of reorganization expenses
have been held and no requests for allowance for such expenses have been made.  
According to the Supplemental Disclosure Statement, the Bondholders Committee   
has budgeted reorganization expenses payable on closing of the Omega Financing  
and subject to Bankruptcy Court approval of $4.5 million.                       

    Under Chapter 11, certain claims against the Company in existence prior to
the filing of the petition for relief under the Bankruptcy Code are stayed while
the Company continues business operations as debtor-in-possession. These claims 
are reflected in the Company's Balance Sheet as of December 31, 1993 and        
December 31, 1992 as "Liabilities Subject to Compromise." Additional claims     
(Liabilities Subject to                                                         

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

Compromise) may arise subsequent to the filing date resulting from rejection of 
executory contracts and from the determination by the Bankruptcy Court (or      
agreed to by parties in interest) of allowed contingent and disputed claims.    
Enforcement of claims secured by certain of the Company's assets (secured       
claims) also are stayed, although the holders of such claims have the right to  
move the court for relief from the stay. Secured claims, principally the Secured
Notes, are secured by an interest in certain Seabrook Project assets of the     
Company, principally realty and personalty.                                     

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:                            

   SYSTEM OF ACCOUNTS:  The accounting policies and practices of the Company
are subject to regulation by FERC with respect to its rates and accounting. The 
accounts of the Company are maintained in accordance with the uniform system of 
accounts prescribed by FERC.                                                    

    UTILITY PLANT AND DEPRECIATION:  Utility plant is stated at original cost.
The cost of additions to utility plant includes contracted work, direct labor   
and material, allocated overhead, allowance for funds used during construction  
and indirect charges for engineering and supervision. For financial statement   
purposes, depreciation is computed on the straight-line method based on the     
estimated useful life of Seabrook Unit 1. Since the commencement of commercial  
operation, the provision for depreciation for the Company has been calculated at
2.5%.                                                                           

     OPERATING REVENUES:  Revenues are based on billing rates authorized by FERC
and are recognized when billed.                                                 

     INCOME TAXES:  The general policy of the Company with respect to accounting
for federal income taxes is to reflect in income the estimated amount of taxes  
currently payable and to provide for deferred taxes on certain items subject to 
temporary differences to the extent permitted by the various regulatory         
commissions. It is the policy of the Company to defer the investment tax credits
and to amortize these credits over the productive lives of the related assets.  

     TRANSACTIONS WITH AFFILIATES:  Prior to February 5, 1993, the Company was a
wholly-owned subsidiary of EUA. EUA has interests in other retail and wholesale 
utility companies, a service corporation, and other non-utility companies.      

   Transactions between the Company and EUA affiliated companies include the
following: accounting, engineering and other services rendered by EUA Service of
approximately $209,000 in 1993. Transactions with other affiliated companies are
subject to review by applicable regulatory commissions (See Note D -- Income    
Taxes).                                                                         

CASH AND TEMPORARY CASH INVESTMENTS:  The Company considers all highly
liquid investments with a maturity of three months or less when acquired to be  
cash equivalents.                                                               

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

NOTE D -- INCOME TAXES:                                                         

                                                                [Download Table]
Components of income tax expense for the year 1993 is as follows:             


                                                                    1993      
                                                               ---------------
                                                               (IN THOUSANDS) 
                                                                              
     Federal:                                                                 
          Current..........................................        $          
          Deferred.........................................         (3,421)   
          Investment Tax Credit, Net.......................           (630)   
                                                                   -------    
     Total Charge to Operations............................         (4,051)   
                                                                   -------    
     Charged to Other Income:                                                 
          Current..........................................                   
          Deferred.........................................            459    
                                                                   -------    
     Total charged to Other Income.........................            459    
                                                                   -------    
     Total.................................................        $(3,592)   
                                                                   =======    

                                                                [Download Table]

     Total income tax expense (credit) was different from the amounts computed     
by applying federal income tax at statutory rates to book income subject to tax    
for the following reasons:                                                         


                                                                         1993      
                                                                    ---------------
                                                                                   
                                                                    (IN THOUSANDS) 
          Federal Income Tax (FIT) Computed at Statutory                           
            Rates...............................................        $(4,559)   
          Increases (Decreases) in Tax from:                                       
               Depreciation of Equity AFUDC.....................            548    
               Amortization of ITC..............................           (630)   
               FIT Net Operating Loss Carryforward..............            926    
               Nuclear Decommissioning Costs....................            313    
               Other............................................           (190)   
                                                                        -------    
          Total Income Tax Expense (Credit).....................        $(3,592)   
                                                                        =======    

                                                                [Download Table]

     The provision for deferred taxes resulting from temporary differences is      
comprised of the following:                                                        


                                                                         1993      
                                                                    ---------------
                                                                    (IN THOUSANDS) 
                                                                                   

          Debt Component of AFUDC...............................        $(1,458)   
          Capitalized Overheads.................................            (59)   
          Excess Tax Depreciation...............................          7,181    
          Net Operating Loss Carryforward.......................         (8,724)   
          Provision for Estimated Loss on Seabrook Investment...            459    
          Other.................................................           (361)   
                                                                        -------    
               Total............................................        $(2,962)   
                                                                        =======    

   The Company adopted FAS96 in 1990 which requires the use of the liability
method to record deferred income taxes for temporary differences that are       
reported in different years for financial reporting and tax purposes. Under the 
liability method adopted by FAS96, deferred tax liabilities or assets are       
computed using the tax rates that will be in effect when the temporary          
differences reverse. Generally, for regulated companies, the changes in tax     
rates applied to accumulated deferred income taxes may not be immediately       
recognized in operating results because of rate making treatment and provisions 
in the Tax Reform Act of 1986.                                                  

     The Company has filed consolidated income tax returns together with EUA and
other EUA affiliates. As a result of such consolidated filings, certain federal 
income tax benefits available to the Company have reduced the federal income tax
obligations of EUA and such other EUA affiliates. Under a tax allocation        

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

agreement between EUA and its subsidiaries, EUA and its subsidiaries compensate 
each other for the use of the tax benefits.                                     

  As a result of the redemption of the Company's outstanding common stock,
the Company was deconsolidated from the EUA tax group effective February 5,     
1993. Under the terms of the Settlement Agreement, EUA is entitled to utilize   
the Company's tax credits to reduce EUA's 1993 consolidated tax liability       
without compensation (see Note B - Bankruptcy Proceeding). The Company will be  
included in EUA's consolidated tax return for the years 1992 and 1993. However, 
the Company's net operating losses of approximately $25 million arising from its
post February 5, 1993 activities will not be included in the EUA consolidated   
tax return for 1993, and have been treated as available to the Company.         

 To the extent that the Company's carryforwards of net operating losses,
investment tax credits, alternative minimum tax credits, and deductions         
attributable to built in losses are available after the Company is no longer    
part of the consolidated return, the Company's ability to utilize these         
carryforwards will be significantly limited due to the impact of provisions of  
the tax law relating to the treatment of debt forgiveness in bankruptcy and the 
effect of changes in the ownership of the Company. The precise impact of these  
limitations cannot be determined until the Bankruptcy proceeding has concluded. 
In 1992, the Company reversed all accumulated tax benefits relating to          
carryforwards of net operating losses and alternative minimum tax credits to    
reflect the anticipated imposition of the limitations and the impact of the     
Settlement Agreement.                                                           

NOTE E -- CAPITAL STOCK:                                                        

COMMON STOCK:  On December 31, 1993, the Company had issued and       
outstanding, no shares of its Common Stock, par value $.01.                     

PREFERRED STOCK:  At December 31, 1993, the Company had outstanding no
shares of preferred stock.                                                      

     Pursuant to the terms of the Settlement Agreements, on February 5, 1993 the
Company redeemed all of its outstanding common and preferred stock, which were  
held by EUA, at no cost to the Company (See Note B -- Bankruptcy Proceeding).   
The redemption has been classified as treasury stock on the Company's financial 
statements as of December 31, 1993.                                             

NOTE F -- LONG-TERM DEBT:                                                       

   As a result of the Bankruptcy filing, the Company is in default under the
indenture pursuant to which the Secured Notes were issued. The current face     
amount of principal, and accrued interest to February 28, 1991, on the Company's
Secured Notes is $279,597,200 and $14,126,174 respectively. The Secured Notes   
are collateralized in part principally with a security interest in the Company's
12.1% ownership interest in the realty and personalty of the Seabrook Project.  
As a result of the bankruptcy filing, the Company is in default under the       
indenture pursuant to which the Secured Notes were issued and ceased accruing   
interest expense as of February 28, 1991.                                       

The contractual interest expense on the Secured Notes in 1993 was     
approximately $49 million. In 1993, no interest was paid. The Company also had  
outstanding 180,000 CICs evidencing the right to receive additional payments    
contingent upon and measured by the Company's income in certain years following 
the commercial operation of Seabrook Unit 1. Under the Plan, the CICs have been 
extinguished. (See Note B -- Bankruptcy Proceeding)                             

     The Secured Notes and CICs are solely the obligation of the Company and are
not guaranteed by EUA or any other person.                                      

  The Series B Secured Notes, which have a stated maturity date of May 15,
1993, are redeemable at 100.125% of principal amount. The Series C Secured Notes
have a stated maturity date of November 15, 1992.                               

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

NOTE G -- COMMITMENTS AND CONTINGENCIES:                                        

Nuclear Power Issues                                                        

   Like other nuclear generating facilities, the Seabrook Project is subject
to extensive regulation by the NRC. The NRC is empowered to authorize the       
siting, construction and operation of nuclear reactors after consideration of   
public health, safety, environmental and anti-trust matters. The NRC has        
promulgated numerous requirements affecting safety systems, fire protection,    
emergency response planning and notification systems, and other aspects of      
nuclear plant construction, equipment and operation. The Company has been, and  
may be, affected to the extent of its proportionate share by the cost of any    
such modifications to Seabrook Unit 1.                                          

Nuclear units in the United States have been subject to widespread    
criticism and opposition. Some nuclear projects have been canceled following    
substantial construction delays and cost overruns as the result of licensing    
problems, unanticipated construction defects and other difficulties. Various    
groups have by litigation, legislation and participation in administrative      
proceedings sought to prohibit the completion and operation of nuclear units and
the disposal of nuclear waste. In the event of shutdown of any unit, NRC        
regulations require that it be completely decontaminated of any residual        
radioactivity. The cost of such decommissioning, depending on the circumstances,
could substantially exceed the owners' investment at the time of cancellation.  

Public controversy concerning nuclear power could adversely affect the
operating license of Seabrook Unit 1. While the Company cannot predict the      
ultimate effect of such controversy, it is possible that it could result in a   
premature shutdown of the unit.                                                 

     The Price-Anderson Act provides, among other things, that the liability for
damages resulting from a nuclear incident would not exceed an amount which at   
present is about $9.2 billion. Under the Price-Anderson Act, prior to operation 
of a nuclear reactor, the licensee is required to insure against this liability 
by purchasing the maximum amount of insurance available from private sources    
(currently $200 million) and to maintain the insurance available under a        
mandatory industry-wide retrospective rating program. Should an individual      
licensee's liability for an incident exceed $200 million, the difference between
such liability and the overall maximum liability, currently about $9.2 billion, 
will be made up by the retrospective rating program. Under such a program, each 
owner of an operating nuclear facility may be assessed a retrospective premium  
of up to a limit of $79.3 million (which shall be adjusted for inflation at     
least every five years) for each reactor owned in the event of any one nuclear  
incident occurring at any reactor in the United States, with provision for      
payment of such assessment to be made over time as necessary to limit the       
payment in any one year to no more than $10 million per reactor owned. The      
Company would be obligated to pay its proportionate share of any such           
assessment.                                                                     

   Joint owners of nuclear projects are also subject to the risk that one of
their number may be unable or unwilling to finance its share of the project's   
costs, thus jeopardizing continuation of the project. On May 6, 1991, New       
Hampshire Electric Cooperative, Inc., a 2.2% owner of the Seabrook Project,     
announced that it had filed for Chapter 11 bankruptcy protection. A             
reorganization plan, filed by the New Hampshire Electric Cooperative with the   
Bankruptcy Court in September, 1991 and revised in January, 1992 was approved by
the Bankruptcy Court in March 1992 and approved by the NHPUC on October 5, 1992.
All appeals of the NHPUC order approving the reorganization have been resolved  
in NHEC's favor and the effective date of the plan occurred on December 1, 1993.

NUCLEAR FUEL AND NUCLEAR PLANT DECOMMISSIONING:                                 

 The Seabrook Project joint owners have made, or expect to make, various
arrangements for the acquisition of uranium concentrate, the conversion,        
enrichment, fabrication and utilization of nuclear fuel and the disposition of  
that fuel after use. The owners and lead participants of United States nuclear  
units have                                                                      

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

entered into contracts with the DOE for disposal of spent nuclear fuel in       
accordance with the NWPA. The NWPA requires (subject to various contingencies)  
that the federal government design, license, construct and operate a permanent  
repository for high level radioactive wastes and spent nuclear fuel and         
establish prescribed fees for the disposal of such wastes and fuel. The NWPA    
specifies that the DOE provide for the disposal of such wastes and spent nuclear
fuel starting in 1998. Objections on environmental and other grounds have been  
asserted against proposals for storage as well as disposal of spent fuel. The   
DOE anticipates that a permanent disposal site for spent fuel will be ready to  
accept fuel for storage on or before 2010. However, the NRC, which must license 
the site, stated only that a permanent repository will become available by the  
year 2025. At the Seabrook Project there is on-site storage capacity which, with
minimal capital expenditures, should be sufficient for twenty years or until the
year 2010. No near-term capital expenditures are anticipated to deal with any   
increase in storage requirements after 2010.                                    

     The estimated cost to decommission Seabrook Unit 1, based on a study by the
New Hampshire Yankee Division of the Public Service Company of New Hampshire, is
approximately $351 million in 1993 dollars: The Company's share of that amount  
is approximately $42.5 million, or 12.1%. In 1993, the Company paid             
approximately $895,000 in decommissioning expenses.                             

   The agreements of purchase and sale under which the Company purchased its
Seabrook interest required the Company to establish a fund of $10 million to    
secure payment of part of its share of decommissioning costs of Seabrook Unit 1 
and any costs of cancellation of Seabrook Unit 1 or Unit 2. In May 1990, EUA    
guaranteed this obligation and the entire fund was released to EUA Power. Under 
the Settlement Agreement, EUA reaffirmed this guaranty.                         

Seabrook Unit 2:                                                            

     The Company also has a 12.1% ownership interest in Seabrook Unit 2 in which
it has assigned no value. On November 6, 1986, the joint owners of the Seabrook 
Project, recognizing that Seabrook Unit 2 had been canceled, voted to dispose of
the Unit. Certain assets of Seabrook Unit 2 have been and are being sold from   
time to time to third parties. Plans regarding disposition of Seabrook Unit 2   
are now under consideration, but have not been finalized and approved. The      
Company is unable, therefore, to estimate the costs for which it would be       
responsible in connection with the disposition of Seabrook Unit 2. Monthly      
charges are required to be paid by the Company with respect to Seabrook Unit 2  
in order to preserve and protect its components and various warranties.         

CONSTRUCTION EXPENDITURES                                                       

   Great Bay Power's cash construction expenditures, including nuclear fuel,
are estimated to be approximately $4.3 million in 1994 and aggregate            
approximately $23.4 million for the years 1995 through 1998.                    

OTHER PROCEEDINGS                                                               

     In June 1991, the State of New Hampshire imposed a Nuclear Station Property
Tax applicable only to the Seabrook Project. The Company paid its share of the  
tax, aggregating $4.2 million through December 31, 1992. In October 1991 the    
Attorneys General of Connecticut, Massachusetts and Rhode Island petitioned the 
United States Supreme Court in an original jurisdiction case for a determination
of the legality of the tax, and in January 1992 the Supreme Court agreed to take
the case. The parties to the litigation and other Joint Owners of Seabrook      
entered into a Settlement Agreement on April 13, 1993. In general, the terms of 
the Settlement Agreement are expected to result in a significant reduction in   
annual state taxes paid by the Company. In addition, under the terms of the     
Settlement Agreement, certain of the prior payments of the tax by the Company   
will be permitted to be credited against future taxes due. The Bankruptcy Court 
has approved the Settlement Agreement with respect to the Company.              

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GREAT BAY POWER CORPORATION 
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993 

NOTE H -- SUBSEQUENT EVENT                                                      

     On November 23, 1994, the Company emerged from Bankruptcy and adopted a new
basis of accounting as required by Statement of Position 90-7 "Financial        
Reporting by Entities in Reorganization Under the Bankruptcy Code" issued by the
American Institute of Certified Public Accountants. Accordingly, the information
contained in these financial statements is not comparable to the financial      
statements for periods beginning on or after November 23, 1994. The accompanying
financial statements are not indicative of the financial position or the        
expected results of operations for periods beginning on or after November 23,   
1994.                                                                           

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of                                                    
BayCorp Holdings, Ltd.:                                                         

     We have audited the accompanying balance sheet of BayCorp Holdings, Ltd. as
of March 31, 1996. This financial statement is the responsibility of BayCorp    
Holdings, Ltd. management. Our responsibility is to express an opinion on this  
financial statement based on our audit.                                         

We conducted our audit in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the balance sheet is free of material        
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the balance sheet. An audit also includes        
assessing the accounting principles used and significant estimates made by      
management as well as evaluating the overall financial statement presentation.  
We believe that our audit provides a reasonable basis for our opinion.          

     In our opinion, the balance sheet referred to above presents fairly, in all
respects, the financial position of BayCorp Holdings, Ltd. as of March 31, 1996,
in conformity with generally accepted accounting principles.                    

                       ARTHUR ANDERSEN LLP

Boston, Massachusetts                                                           
April 8, 1996                                                                   

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BAYCORP HOLDINGS, LTD.

                                                        [Enlarge/Download Table]
                       BALANCE SHEET AS OF MARCH 31, 1996                                  

                                                                                           
                                           ASSETS                                          
Cash................................................................................ $1,000
                                                                                     ------
          Total Assets.............................................................. $1,000
                                                                                     ======
                                    STOCKHOLDERS' EQUITY                                   
Stockholders' Equity:                                                                      
     Common Stock, $.01 par value--                                                        
       Authorized--20,000,000 shares                                                       
       Issued and outstanding--1,000 shares......................................... $   10
                                                                                     ------
     Preferred stock, $.01 par value--                                                     
       Authorized--5,000,000 shares                                                        
       Issued and outstanding--none                                                        
     Additional paid-in capital.....................................................    990
                                                                                     ------
          Total stockholders' equity................................................ $1,000
                                                                                     ======

The accompanying notes are an integral part of this balance sheet.

NOTES TO BALANCE SHEET
MARCH 31, 1996

(1) ORGANIZATION                                                                

BayCorp Holdings, Ltd., formerly Great Bay Holdings Corp. ("Holding   
Company"), is a newly formed Delaware corporation and currently is a wholly     
owned subsidiary of Great Bay Power Corporation ("Great Bay"). Holding Company  
is not engaged in any business activities other than in connection with a       
proposed merger with Great Bay. If the merger is consummated, Holding Company   
will be the sole shareholder of Great Bay.                                      

  The purpose of the merger is to restructure Great Bay as a subsidiary of
Holding Company in order to permit Holding Company to engage in business        
activities, through subsidiaries other than Great Bay, which Great Bay is       
currently prohibited from engaging in became of its status as an Exempt         
Wholesale Generator ("EWG") under the Public Utility Holding Company Act of     
1935, as amended (the "PUHCA"). As an EWG, Great Bay is limited to the          
generation and sale of electricity from the Seabrook Project in the wholesale   
electricity market and activities incidental thereto. Holding Company will be   
able to engage in other business activities which may be related or unrelated to
those of Great Bay.                                                             

   The approval of the Merger Agreement requires the affirmative vote of the
holders of a majority of the outstanding shares of Great Bay common stock.      

(2) ACCOUNTING POLICIES                                                         

   The Holding Company expects to adopt the accounting policies of Great Bay
if and when the merger is approved.                                             

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                                                                         ANNEX I

AGREEMENT AND PLAN OF MERGER

  Agreement and Plan of Merger (the "Merger Agreement") entered into as of
May 28, 1996 by and among Great Bay Power Corporation, a New Hampshire          
corporation ("Great Bay" or the "Surviving Corporation"), BayCorp Holdings,     
Ltd., a Delaware corporation and currently a wholly-owned subsidiary of Great   
Bay ("Holding Company"), and GB Transitory Subsidiary, Inc., a New Hampshire    
corporation and a wholly-owned subsidiary of Holding Company ("Transitory Sub").
Holding Company, Transitory Sub and Great Bay are referred to collectively      
herein as the "Parties."                                                        

  In consideration of the undertakings herein contained and for other good
and valuable consideration, the receipt and sufficiency of which is hereby      
acknowledged, the Parties agree as follows:                                     

ARTICLE I 

1.1  The Merger.  At the Effective Date of the Merger (as hereinafter 
defined), Transitory Sub shall be merged with and into Great Bay (with such     
merger referred to herein as the "Merger") pursuant to Section 293-A:11.01 of   
the New Hampshire Business Corporation Act ("NHBCA"). From and after the        
Effective Date, the separate corporate existence of Transitory Sub shall cease  
and Great Bay shall continue as the surviving corporation in the Merger.        

     1.2  Effective Date.  The "Effective Date" shall be the time at which Great
Bay and Transitory Sub file the articles of merger or other appropriate         
documents prepared and executed in accordance with the relevant provisions of   
the NHBCA (the "Articles of Merger") with the Secretary of State of the State of
New Hampshire. The Merger shall have the effects set forth in Section           
293-A:11.06 of the NHBCA.                                                       

     1.3  Closing.  The closing of the Merger (the "Closing") will take place at
10:00 a.m., Eastern Time, on a date to be specified by Great Bay (the "Closing  
Date"), at the offices of Hale and Dorr, 60 State Street, Boston, Massachusetts,
unless another date or place is agreed upon by the Parties.                     

ARTICLE II

 2.1  Conversion of Securities.  At the Effective Date, by virtue of the
Merger and without any action on the part of any Party or the holder of any of  
the following securities:                                                       

   (a) Each share of Great Bay Common Stock issued and outstanding
  immediately prior to the Effective Date, other than Dissenting Shares as
     hereinafter defined, shall be converted into the right to receive one share
 of common stock, $.01 par value per share, of Holding Company ("Holding
Company Common Stock").                                               

         (b) Each share of Great Bay Common Stock held in Great Bay's treasury
immediately prior to the Effective Date shall be cancelled and retired
without payment of any consideration therefor.                        

(c) Each share of common stock, $.01 par value per share, of
  Transitory Sub issued and outstanding immediately prior to the Effective
Date shall be converted into one share of Great Bay Common Stock.     

        (d) Each share of common stock, $.01 par value per share, of Holding
Company issued and outstanding immediately prior to the Effective Date
     shall cease to exist and all certificates representing such shares shall be
cancelled.                                                            

2.2  Options and Warrants.                                            

        (a) At the Effective Date, each holder of options to purchase shares
of Common Stock of Great Bay issued by Great Bay pursuant to its stock
option plans ("Options"), whether vested or unvested, shall be granted
substitute options to purchase shares of Holding Company Common Stock 
pursuant to Holding Company's 1996 Stock Option Plan ("Substitute     
Options"). Each Substitute Option shall be exercisable                

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     for the purchase of the number of shares of Holding Company Common Stock as
   is equal to the number of shares of Great Bay Common Stock subject to the
  unexercised portion of the Option in respect of which it is substituted.
  The exercise price per share of each Substitute Option shall be equal to
     the exercise price of the Option in respect of which it is substituted. The
term, exercisability, vesting schedule, status as an "incentive stock 
     option" under Section 422 of the Internal Revenue Code of 1986 (as amended,
  the "Code"), if applicable, and all of the other terms of the Substitute
     Option shall be identical to the those of the Option in respect of which it
is substituted.                                                       

        (b) As soon as practicable after the Effective Date, Holding Company
or the Surviving Corporation shall deliver to the holders of Options  
  appropriate agreements evidencing Substitute Options as provided in this
Section 2.2.                                                          

          (c) Great Bay's Common Stock Purchase Warrant dated as of February 14,
  1996 held by PECO Energy Company exercisable for the purchase of 420,000
  shares of Great Bay Common Stock shall be assumed by Holding Company and
shall be converted into a warrant to purchase the number of shares of 
 Holding Company Common Stock determined in accordance with the terms of
such warrant.                                                         

    2.3  No Further Ownership Rights in Great Bay Common Stock.  All shares of
Holding Company Common Stock issued upon the surrender for exchange of shares of
Great Bay Common Stock in accordance with the terms hereof shall be deemed to   
have been issued in full satisfaction of all rights pertaining to such shares of
Great Bay Common Stock, subject, however, to Holding Company's obligation to pay
any dividends or make any other distributions with a record date prior to the   
Effective Date which may have been declared or made by Great Bay on or prior to 
such date hereof and which remain unpaid at the Effective Date, and there shall 
be no further registration of transfers on the stock transfer books of Holding  
Company of the shares of Great Bay Common Stock which were outstanding          
immediately prior to the Effective Date. If, after the Effective Date,          
Certificates (as defined in Section 2.5 below) are presented to Holding Company 
for any reason, they shall be cancelled and exchanged as provided in Section    
2.5.                                                                            

     2.4  Dissenting Shares.  For purposes of this Merger Agreement, "Dissenting
Shares" means shares of Great Bay Common Stock held as of the Effective Date by 
a shareholder of Great Bay who has not voted such shares in favor of the        
approval of this Merger Agreement, has held such shares of record on the record 
date after making a written demand for appraisal, continuously holds such shares
through the Effective Date and otherwise properly exercises his or her          
dissenters' rights pursuant to Sections 293-A:13.01 - 293-A:13.31 of the NHBCA. 
Dissenting Shares shall not be converted into or represent the right to receive 
shares of Holding Company. Holders of Dissenting Shares shall only have such    
rights as provided under Sections 293-A:13.01 - 293-A:13.31 of the NHBCA.       

2.5  Exchange Procedures.  As soon as reasonably practicable after the
Effective Date, Holding Company shall mail to each holder of record of a        
certificate or certificates which immediately prior to the Effective Date       
represented outstanding shares of Great Bay Common Stock (each a "Certificate"  
and collectively, the "Certificates") whose shares were converted pursuant to   
this Merger Agreement into the right to receive shares of Holding Company Common
Stock: (i) a letter of transmittal (which shall specify that delivery shall be  
effected, and risk of loss and title to the Certificates shall pass, only upon  
delivery of the Certificates to Holding Company and shall be in such form and   
have such other provisions as Holding Company may reasonably specify); and (ii) 
instructions for use in effecting the surrender of the Certificates in exchange 
for certificates representing shares of Holding Company Common Stock. Upon      
surrender of a Certificate for cancellation to Holding Company or to such other 
agent or agents as may be appointed by Holding Company, together with such      
letter of transmittal, duly executed, the holder of such Certificate shall be   
entitled to receive in exchange therefor a certificate representing that number 
of shares of Holding Company Common Stock which such holder has the right to    
receive pursuant to the provisions of this Merger Agreement, and the Certificate
so surrendered shall immediately be cancelled.                                  

 2.6  Succession.  At the Effective Date, Transitory Sub shall be merged
into Great Bay and Great Bay shall succeed to all of the rights, privileges,    
debts, liabilities, powers and property of Great Bay and Transitory Sub in the  
manner of and as more fully set forth in Section 293-A:11.06 of the NHBCA.      
Without limiting the foregoing, at the Effective Date, all property, rights,    
privileges, franchises, patents, trademarks, licenses,                          

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registrations, and other assets of every kind and description of Transitory Sub 
shall be transferred to, vested in and devolved upon Great Bay without further  
act or deed and all property, rights, and every other interest of Great Bay and 
Transitory Sub shall be as effectively the property of Great Bay as they were of
Great Bay and Transitory Sub, respectively. All rights of creditors of          
Transitory Sub and all liens upon any property of Transitory Sub shall be       
preserved unimpaired, and all debts, liabilities and duties of Transitory Sub   
shall attach to Great Bay and may be enforced against it to the same extent as  
if said debts, liabilities and duties had been incurred or contracted by it.    

ARTICLE III 

     3.1  Articles of Incorporation.  The Articles of Incorporation of Great Bay
as the Surviving Corporation shall be the same as the Articles of Incorporation 
of Great Bay immediately prior to the Effective Date.                           

    3.2  By-Laws.  The By-Laws of Great Bay as the Surviving Corporation shall
be the same as the By-Laws of Great Bay immediately prior to the Effective Date.

3.3  Directors and Officers.  The directors of Great Bay shall be the 
directors of the Surviving Corporation as of the Effective Date. The officers of
Great Bay shall be the officers of the Surviving Corporation after the Effective
Date, retaining their respective positions.                                     

ARTICLE IV

     The respective obligations of each Party to this Merger Agreement to effect
the Merger shall be subject to the satisfaction prior to the Closing Date of the
following conditions:                                                           

     4.1  Great Bay Shareholder Approval.  This Merger Agreement shall have been
approved by the vote of the holders of a majority of the outstanding shares of  
Great Bay Common Stock.                                                         

 4.2  Approvals.  Other than the filing provided for by Section 1.2, all
authorizations, consents, orders or approvals of, or declarations or filings    
with, or expirations of waiting periods imposed by, any court, administrative   
agency or commission, regulatory entity or other governmental authority or      
instrumentality ("Governmental Entity") the failure of which to obtain would be 
reasonably likely to have a material adverse effect on the business, assets,    
financial condition or results of operations of Great Bay, Transitory Sub and   
Holding Company taken as a whole shall have been filed, occurred or been        
obtained.                                                                       

4.3  Registration Statement.  The Registration Statement on Form S-4  
pursuant to which shares of Holding Company Common Stock issued in the Merger   
will be registered with the Securities and Exchange Commission shall have become
effective under the Securities Act of 1933, as amended, and shall not be the    
subject of a stop order or proceedings seeking a stop order.                    

  4.4  No Injunctions or Restraints; Illegality.  No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint or prohibition    
preventing the consummation of the Merger or limiting or restricting Holding    
Company's or Great Bay's conduct or operation of the business of Holding Company
or Great Bay after the Merger shall have been issued, nor shall any proceeding  
brought by a domestic administrative agency or commission or other domestic     
Governmental Entity, seeking any of the foregoing be pending; nor shall there be
any action taken, or any statute, rule, regulation or order enacted, entered,   
enforced or deemed applicable to the Merger which makes the consummation of the 
Merger illegal.                                                                 

  4.5  Nasdaq.  The shares of Holding Company Common Stock to be issued in
the Merger shall have been approved for quotation on the Nasdaq National Market.

4.6  Dissenting Shares.  Unless waived by Great Bay, the number of    
Dissenting Shares shall not exceed 20,000 shares of Great Bay Common Stock as of
the Effective Date.                                                             

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ARTICLE V 

  5.1  Amendment and Termination.  This Merger Agreement may be amended by
the Board of Directors of Great Bay at any time prior to the Effective Date,    
provided that an amendment made subsequent to the approval of this Merger       
Agreement by the shareholders of Great Bay shall not (1) alter or change the    
amount or kind of shares, securities, cash, property and/or rights to be        
received in exchange for or on conversion of all or any of the shares of any    
class or series thereof of such corporation, (2) alter or change any term of the
Articles of Incorporation of Great Bay to be affected by the Merger or (3) alter
or change any of the terms and conditions of this Merger Agreement if such      
alteration or change would adversely affect the holders of any class or series  
of the stock of such corporation. This Merger Agreement may be terminated at any
time prior to the Effective Date by the vote of the Board of Directors of Great 
Bay, notwithstanding shareholder approval of this Merger Agreement.             

    5.2  Counterparts.  This Merger Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original.                  

5.3  Governing Law.  This Merger Agreement shall be governed in all   
respects, including, but not limited to, validity, interpretation, effect and   
performance, by the internal laws of the State of New Hampshire without regard  
to the principles of conflicts of law thereof.                                  

IN WITNESS WHEREOF, each of the parties hereto has caused this Merger 
Agreement to be executed and attested on its behalf by its officers thereunto   
duly authorized, as of the date first above written.                            

                              BAYCORP HOLDINGS, LTD.
                              a Delaware corporation

                                            ------------------------------------
                           John A. Tillinghast
                 President

ATTEST:                                                                         

------------------------------------------------------                          
Frank W. Getman Jr.                                                             
Secretary                                                                       

                                    GREAT BAY POWER CORPORATION,
                                   a New Hampshire corporation

                                            ------------------------------------
                           John A. Tillinghast
                 President

ATTEST:                                                                         

------------------------------------------------------                          
Frank W. Getman Jr.                                                             
Secretary                                                                       

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                                       GB TRANSITORY SUBSIDIARY, INC.,
                                   a New Hampshire corporation

           By:
                                            ----------------------------
                               John A. Tillinghast
                     President

ATTEST:                                                                         

------------------------------------------------------                          
Frank W. Getman Jr.                                                             
Secretary                                                                       

    I, Frank W. Getman Jr., Secretary of BayCorp Holdings, Ltd., a corporation
organized and existing under the laws of the State of Delaware, hereby certify  
that the Agreement and Plan of Merger to which this certificate is attached was 
approved by the shareholders representing at least a majority of the outstanding
stock of said corporation entitled to vote thereon.                             

WITNESS my hand on this      day of                , 1996             

                                            ------------------------------------
                           Frank W. Getman Jr.
                 Secretary

I, Frank W. Getman Jr., Secretary of Great Bay Power Corporation, a   
corporation organized and existing under the laws of the State of New Hampshire,
hereby certify that the Agreement and Plan of Merger to which this certificate  
is attached was approved by the stockholders representing at least a majority of
the outstanding stock of said corporation entitled to vote thereon.             

WITNESS my hand on this      day of                , 1996             

                                            ------------------------------------
                           Frank W. Getman Jr.
                 Secretary

I, Frank W. Getman Jr., Secretary of GB Transitory Subsidiary, Inc., a
corporation organized and existing under the laws of the State of New Hampshire,
hereby certify that the Agreement and Plan of Merger to which this certificate  
is attached was approved by the stockholders representing at least a majority of
the outstanding stock of said corporation entitled to vote thereon.             

WITNESS my hand on this      day of                , 1996             

                                            ------------------------------------
                           Frank W. Getman Jr.
                 Secretary

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                                                                        ANNEX II

DISSENTERS' RIGHTS
----------  ------

A. RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES 

293-A:13.01 DEFINITIONS. In this subdivision:                         

     (1) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or    
share exchange of that issuer.                                                  

(2) "Dissenter" means a shareholder who is entitled to dissent from   
corporate action under RSA 293-A:13.02 and who exercises that right when and in 
the manner required by RSA 293-A:13.20 through 293-A:13.28.                     

    (3) "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to which 
the dissenter objects, excluding any appreciation or depreciation in            
anticipation of the corporate action, unless exclusion would be inequitable.    

(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the     
corporate on its principal bank loans or, if none, at a rate that is fair and   
equitable under all the circumstances.                                          

(5) "Record shareholder" means the person in whose name shares are    
registered in the records of a corporation or the beneficial owner of shares to 
the extent of the rights granted by a nominee certificate on file with a        
corporation.                                                                    

    (6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.        

(7) "Shareholder" means the record shareholder or the beneficial      
shareholder.                                                                    

293-A:13.02 RIGHT TO DISSENT.                                         

  (a) A shareholder is entitled to dissent from, and obtain payment of the
fair value of his shares in the event of, any of the following corporate        
actions:                                                                        

   (1) Consummation of a plan of merger to which the corporation is a party:

 (i) If shareholder approval is required for the merger by RSA
293-A:11.03 or the articles of incorporation and the shareholder is   
entitled to vote on the merger; or                                    

          (ii) If the corporation is a subsidiary that is merged with its parent
under RSA 293-A:11.04.                                                

    (2) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is   
entitled to vote on the plan.                                                   

     (3) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of       
business, if the shareholder is entitled to vote on the sale or exchange,       
including a sale in dissolution, but not including a sale pursuant to court     
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one 
year after the date of sale.                                                    

(4) An amendment of the articles of incorporation that materially and 
adversely affects rights in respect of a dissenter's shares because it:         

(i) Alters or abolishes a preferential right of the shares. 

        (ii) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or 
repurchase, of the shares.                                            

     (iii) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other                                     

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securities.                                                           

          (iv) Excludes or limits the right of the shares to vote on any matter,
    or to cumulate votes, other than a limitation by dilution through issuance
of shares or other securities with similar voting rights.             

  (v) Reduces the number of shares owned by the shareholder to a
  fraction of a share if the fractional share so created is to be acquired
for cash under RSA 293-A:6.04.                                        

     (5) Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent and      
obtain payment for their shares.                                                

 (b) A shareholder entitled to dissent and obtain payment for his shares
under this subdivision shall not challenge the corporate action creating his    
entitlement, unless the action is unlawful or fraudulent with respect to the    
shareholder or the corporation.                                                 

293-A:13.03 DISSENT BY NOMINEES AND BENEFICIAL OWNERS.                

     (a) A record shareholder may assert dissenters' rights as to fewer than all
shares registered in his name only if he dissents with respect to all shares    
beneficially owned by any one person and notifies the corporation in writing of 
the name and address of each person on whose behalf he asserts dissenters'      
rights. The rights of a partial dissenter under this subsection are determined  
as if the shares as to which he dissents and his other shares were registered in
the names of different shareholders.                                            

 (b) A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if:                                                     

      (1) He submits to the corporation the record shareholder's written
   consent to the dissent not later than the time the beneficial shareholder
asserts dissenters' rights; and                                       

(2) He does so with respect to all shares of which he is the
beneficial shareholder or over which he has power to direct the vote. 

B. PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS 

293-A:13.20 NOTICE OF DISSENTERS' RIGHTS.                             

(a) If proposed corporate action creating dissenters' rights under RSA
293-A:13.02 is submitted to a vote at a shareholders' meeting, the meeting      
notice shall state that shareholders are or may be entitled to assert           
dissenters' rights under this subdivision and be accompanied by a copy of this  
subdivision.                                                                    

   (b) If corporate action creating dissenters' rights under RSA 293-A:13.02
is taken without a vote of shareholders or by consent pursuant to RSA           
293-A:7.04, the corporation shall notify in writing all shareholders entitled to
assert dissenters' rights that the action was taken and send them the           
dissenters' notice described in RSA 293-A:13.22.                                

293-A:13.21 NOTICE OF INTENT FOR DEMAND PAYMENT.                      

(a) If proposed corporate action creating dissenters' rights under RSA
293-A:13.02 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights:                                            

         (1) Shall deliver to the corporation before the vote is taken written
notice of his intent for demand payment for his shares if the proposed
action is effectuated; and                                            

  (2) Shall not vote his shares in favor of the proposed action.

   (b) A shareholder who does not satisfy the requirements of subsection (a)
is not entitled to payment for his shares under this subdivision.               

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293-A:13.22 DISSENTERS' NOTICE.                                       

     (a) If proposed corporate action creating dissenters' rights under RSA 293-
A:13.02 is authorized at a shareholders' meeting, the corporation shall deliver 
a written dissenters' notice to all shareholders who satisfied the requirements 
of RSA 293-A:13.21.                                                             

(b) The dissenters' notice shall be sent no later than 10 days after  
corporate action was taken, and shall:                                          

       (1) State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited.              

          (2) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received.   

         (3) Supply a form for demanding payment that includes the date of the
 first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting      
    dissenters' rights certify whether or not he acquired beneficial ownership
of the shares before that date.                                       

     (4) Set a date by which the corporation shall receive the payment
   demand, which date shall not be fewer than 30 nor more than 60 days after
the date the notice is delivered.                                     

(5) Be accompanied by a copy of this subdivision.           

293-A:13.23 DUTY TO DEMAND PAYMENT.                                   

  (a) A shareholder sent a dissenters' notice described in RSA 293-A:13.22
shall demand payment, certify whether he acquired beneficial ownership of the   
shares before the date required to be set forth, in the dissenters' notice      
pursuant to RSA 293-A:13.22(b)(3), and deposit his certificates in accordance   
with the terms of the notice.                                                   

     (b) The shareholder who demands payment and deposits his share certificates
under subsection (a) retains all other rights of a shareholder until these      
rights are cancelled or modified by the taking of the proposed corporate action.

(c) A shareholder who does not demand payment or deposit his share    
certificate where required, each by the date set in the dissenters' notice, is  
not entitled to payment for his shares under this subdivision.                  

293-A:13.24 SHARE RESTRICTIONS.                                       

     (a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate  
action is taken or the restrictions released under RSA 293-A: 13.26.            

(b) The person for whom dissenters' rights are asserted as to         
uncertificated shares retains all other rights of a shareholder until these     
rights are cancelled or modified by the taking of the proposed corporate action.

293-A:13.25 PAYMENT.                                                  

(a) Except as provided in RSA 293-A:13.27, as soon as the proposed    
corporate action is taken, or upon receipt of a payment demand, the corporation 
shall pay each dissenter who complied with RSA 293-A:13.23 the amount the       
corporation estimates to be the fair value of his shares, plus accrued interest.

(b) The payment shall be accompanied by:                              

      (1) The corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, an income  
     statement for that year, a statement of changes in shareholders' equity for
   that year, and the latest available interim financial statements, if any;

          (2) A statement of the corporation's estimate of the fair value of the
shares;                                                               

(3) An explanation of how the interest was calculated;      

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        (4) A statement of the dissenter's right to demand payment under RSA
293-A:13.28; and                                                      

(5) A copy of this subdivision.                             

293-A:13.26 FAILURE TO TAKE ACTION.                                   

 (a) If the corporation does not take the proposed action within 60 days
after the date set for demanding payment and depositing shares certificates, the
corporation shall return the deposited certificates and release the transfer    
restrictions imposed on uncertificated shares.                                  

(b) If after returning deposited certificates and releasing transfer  
restrictions, the corporation takes the proposed action, it shall send a new    
dissenters' notice under RSA 293-A:13.22 and repeat the payment demand          
procedure.                                                                      

293-A:13.27 AFTER-ACQUIRED SHARES.                                    

(a) A corporation may elect to withhold payment required by RSA 293-A:
13.25 from a dissenter, unless he was the beneficial owner of the shares before 
the date set forth in the dissenters' notice as the date of the first           
announcement to news media or to shareholders of the terms of the proposed      
corporate action.                                                               

(b) To the extent the corporation elects to withhold payment under    
subsection (a), after taking the proposed corporate action, it shall estimate   
the fair value of the shares, plus accrued interest, and shall pay this amount  
to each dissenter who agrees to accept it in full satisfaction of his demand.   
The corporation shall send with its offer a statement of its estimate of the    
fair value of the shares, an explanation of how the interest was calculated, and
a statement of the dissenter's right to demand payment under RSA 293-A:13.28.   

  293-A:13.28 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.

   (a) A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due, and demand payment  
of his estimate, less any payment under RSA 293-A:13.25, or reject the          
corporation's offer under RSA 293-A:13.27 and demand payment of the fair value  
of his shares and interest due, if:                                             

         (1) The dissenter believes that the amount paid under RSA 293-A:13.25
    or offered under RSA 293-A:13.27 is less than the fair value of his shares
or that the interest due is incorrectly calculated;                   

          (2) The corporation fails to make payment under RSA 293-A:13.25 within
60 days after the date set for demanding payment; or                  

        (3) The corporation, having failed to take the proposed action, does
    not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within 60 days after the date set for
demanding payment.                                                    

(b) A dissenter waives his right to demand payment under this section 
unless he notifies the corporation of his demand in writing under subsection (a)
within 30 days after the corporation made or offered payment for his shares.    

C. JUDICIAL APPRAISAL OF SHARES 

293-A:13.30 COURT ACTION.                                             

  (a) If a demand for payment under RSA 293-A:13.28 remains unsettled, the
corporation shall commence a proceeding within 60 days after receiving the      
payment demand and petition the court to determine the fair value of the shares 
and accrued interest. If the corporation does not commence the proceeding within
the 60-day period, it shall pay each dissenter whose demand remains unsettled   
the amount demanded.                                                            

    (b) The corporation shall commence the proceeding in the superior court of
the county where a corporation's principal office, or, if none in this state,   
its registered office, is located. If the corporation is a foreign corporation  
without a registered office in this state, it shall commence the proceeding in  
the county in                                                                   

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this state where the registered office of the domestic corporation merged with  
or whose shares were acquired by the foreign corporation was located.           

    (c) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding as in an   
action against their shares and all parties shall be served with a copy of the  
petition. Nonresidents may be served by registered or certified mail or by      
publication as provided by law.                                                 

(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend decisions on the        
question of their value. The appraisers have the powers described in the order  
appointing them, or in any amendment to it. The dissenters are entitled to the  
same discovery rights as parties in other civil proceedings.                    

    (e) Each dissenter made a party to the proceeding is entitled to judgment:

          (1) For the amount, if any, by which the court finds the fair value of
    his shares, plus interest, exceeds the amount paid by the corporation; or,

        (2) For the fair value, plus accrued interest, of his after-acquired
shares for which the corporation elected to withhold payment under RSA
293-A:13.27.                                                          

293-A:13.31 COURT COSTS AND COUNSEL FEES.                             

  (a) The court in an appraisal proceeding commenced under RSA 293-A:13.30
shall determine all costs of the proceeding, including the reasonable           
compensation and expenses of appraisers appointed by the court. The court shall 
assess the costs against the corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to 
the extent the court finds the dissenters acted arbitrarily, vexatiously, or not
in good faith in demanding payment under RSA 293-A:13.28.                       

    (b) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:               

        (1) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the 
requirements of RSA 293- A:13.20 through RSA 293-A:13.28.             

      (2) Against either the corporation or a dissenter, in favor of any
  other party, if the court finds that the party against whom the fees and
    expenses are assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this subdivision.              

         (c) If the court finds that the services of counsel for any dissenter
    were of substantial benefit to the other dissenter similarly situated, and
that the fees for those services should not be assessed against the   
 corporation, the court may award to these counsel reasonable fees to be
paid out of the amounts awarded the dissenters who were benefited.    

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                                                                       ANNEX III

BAYCORP HOLDINGS, LTD.

1996 STOCK OPTION PLAN
APRIL 16, 1996

1.  PURPOSE                                                                     

  The purpose of this plan (the "Plan") is to secure for BayCorp Holdings,
Ltd. (the "Company") and its shareholders the benefits arising from capital     
stock ownership by employees, officers and directors of, and consultants or     
advisors to, the Company and its parent and subsidiary corporations who are     
expected to contribute to the Company's future growth and success. Except where 
the context otherwise requires, the term "Company" shall include the parent and 
all present and future subsidiaries of the Company as defined in Sections 424(e)
and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from    
time to time (the "Code"). Those provisions of the Plan which make express      
reference to Section 422 shall apply only to Incentive Stock Options (as that   
term is defined in the Plan).                                                   

2.  TYPE OF OPTIONS AND ADMINISTRATION                                          

   (a) Types of Options.  Options granted pursuant to the Plan may be either
incentive stock options ("Incentive Stock Options") meeting the requirements of 
Section 422 of the Code or Non-Statutory Options which are not intended to meet 
the requirements of Section 422 of the Code ("Non-Statutory Options").          

(b) Administration.                                                   

      (i) The Plan will be administered by the Board of Directors of the
    Company, whose construction and interpretation of the terms and provisions
  of the Plan shall be final and conclusive. The Board of Directors may in
its sole discretion grant options to purchase shares of the Company's 
Common Stock ("Common Stock") and issue shares upon exercise of such  
     options as provided in the Plan. The Board shall have authority, subject to
the express provisions of the Plan, to construe the respective option 
agreements and the Plan, to prescribe, amend and rescind rules and    
    regulations relating to the Plan, to determine the terms and provisions of
    the respective option agreements, which need not be identical, and to make
all other determinations which are, in the judgment of the Board of   
   Directors, necessary or desirable for the administration of the Plan. The
     Board of Directors may correct any defect, supply any omission or reconcile
    any inconsistency in the Plan or in any option agreement in the manner and
    to the extent it shall deem expedient to carry the Plan into effect and it
     shall be the sole and final judge of such expediency. No director or person
   acting pursuant to authority delegated by the Board of Directors shall be
   liable for any action or determination under the Plan made in good faith.

       (ii) The Board of Directors may, to the full extent permitted by or
 consistent with applicable laws or regulations and Section 3(b) of this
   Plan delegate any or all of its powers under the Plan to a committee (the
   "Committee") appointed by the Board of Directors, and if the Committee is
 so appointed all references to the Board of Directors in the Plan shall
mean and relate to such Committee.                                    

   (c) Applicability of Rule 16b-3.  Those provisions of the Plan which make
express reference to Rule 16b-3 promulgated under the Securities Exchange Act of
1934 (the "Exchange Act"), or any successor rule ("Rule 16b-3"), or which are   
required in order for certain option transactions to qualify for exemption under
Rule 16b-3, shall apply only to such persons as are required to file reports    
under Section 16(a) of the Exchange Act (a "Reporting Person").                 

3.  ELIGIBILITY                                                                 

 (a) General.  Options may be granted to persons who are, at the time of
grant, employees, officers or directors of, or consultants or advisors to, the  
Company; provided, that the class of employees to whom Incentive Stock Options  
may be granted shall be limited to all employees of the Company and that options
to directors shall only be granted pursuant to Section 3(c), below. A person who
has been granted an option may, if he or she is otherwise eligible, be granted  
additional options if the Board of Directors shall so determine.                

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Subject to adjustment as provided in Section 15 below, the maximum number of    
shares with respect to which options may be granted to any employee under the   
Plan shall not exceed 400,000 shares of common stock during the ten-year term of
the Plan. For the purpose of calculating such maximum number, (a) an option     
shall continue to be treated as outstanding notwithstanding its repricing,      
cancellation or expiration and (b) the repricing of an outstanding option or the
issuance of a new option in substitution for a cancelled option shall be deemed 
to constitute the grant of a new additional option separate from the original   
grant of the option that is repriced or cancelled.                              

   (b) Grant of Options to Officers.  From and after the registration of the
Common Stock of the Company under the Exchange Act, the selection of an officer 
(as the term "officer" is defined for purposes of Rule 16b-3) as a recipient of 
an option, the timing of the option grant, the exercise price of the option and 
the number of shares subject to the option shall be determined either (i) by the
Board of Directors, of which all members shall be "disinterested persons" (as   
hereinafter defined), or (ii) by two or more directors having full authority to 
act in the matter, each of whom shall be a "disinterested person." For the      
purposes of the Plan, a director shall be deemed to be a "disinterested person" 
only if such person qualifies as a "disinterested person" within the meaning of 
Rule 16b-3, as such term is interpreted from time to time and also qualifies as 
an "outside director" within the meaning of Section 162(m) of the Code, as such 
term is interpreted from time to time.                                          

    (c) Grants of Options to Outside Directors.  Every outside director (i.e.,
a director who is not employed by the Company) who is first elected as a        
director after the date that Great Bay Power Corporation becomes a wholly-owned 
subsidiary of the Company shall receive a grant of an option for 20,000 shares  
upon his election. In addition, every outside director shall receive a grant of 
an option for 20,000 shares upon such outside director's first reelection to the
Board and an additional grant of an option for 20,000 shares upon such outside  
director's second reelection to the Board. If a Change in Control (as defined in
Section 12(d) below) occurs there shall be granted to each outside director then
serving an option for a number of shares equal to 60,000 reduced by the number  
of shares for which options were previously granted to such director; the       
exercise price for such option shall be the exercise price for the last option  
granted to the director prior to the Change in Control. No other awards of any  
kind shall be made to any outside director. Except as otherwise provided in the 
event of a Change in Control, the exercise price for an option granted under    
this Section 3(c) shall be 100% of the fair market value of such stock, as      
determined by the Board of Directors, at the time of grant of such option.      

4.  STOCK SUBJECT TO PLAN                                                       

   Subject to adjustment as provided in Section 15 below, the maximum number
of shares of Common Stock which may be issued and sold under the Plan is 600,000
shares. If an option granted under the Plan shall expire or terminate for any   
reason without having been exercised in full, the unpurchased shares subject to 
such option shall again be available for subsequent option grants under the     
Plan. If shares issued upon exercise of an option under the Plan are tendered to
the Company in payment of the exercise price of an option granted under the     
Plan, such tendered shares shall again be available for subsequent option grants
under the Plan; provided, that in no event shall such shares be made available  
for issuance pursuant to exercise of Incentive Stock Options.                   

5.  FORMS OF OPTION AGREEMENTS                                                  

    As a condition to the grant of an option under the Plan, each recipient of
an option shall execute an option agreement in such form not inconsistent with  
the Plan as may be approved by the Board of Directors. Such option agreements   
may differ among recipients.                                                    

6.  PURCHASE PRICE                                                              

(a) General.  Subject to Section 3(b) and 3(c), the purchase price per
share of stock deliverable upon the exercise of an option shall be determined by
the Board of Directors, provided, however, that in the case of an Incentive     
Stock Option, the exercise price shall not be less than 100% of the fair market 
value of such                                                                   

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stock, as determined by the Board of Directors, at the time of grant of such    
option, or less than 110% of such fair market value in the case of options      
described in Section 11(b).                                                     

    (b) Payment of Purchase Price.  Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the     
order of the Company in an amount equal to the exercise price of such options,  
or, to the extent provided in the applicable option agreement, (i) by delivery  
to the Company of shares of Common Stock of the Company already owned by the    
optionee having a fair market value equal in amount to the exercise price of the
options being exercised or (ii) by any other means (including, without          
limitation, by delivery of a promissory note of the optionee payable on such    
terms as are specified by the Board of Directors) which the Board of Directors  
determines are consistent with the purpose of the Plan and with applicable laws 
and regulations (including, without limitation, the provisions of Regulation T  
promulgated by the Federal Reserve Board). The fair market value of any shares  
of the Company's Common Stock or other non-cash consideration which may be      
delivered upon exercise of an option shall be determined by the Board of        
Directors.                                                                      

7.  OPTION PERIOD                                                               

     Each option and all rights thereunder shall expire on such date as shall be
set forth in the applicable option agreement, except that, in the case of an    
Incentive Stock Option, such date shall not be later than ten years after the   
date on which the option is granted and, in all cases, options shall be subject 
to earlier termination as provided in the Plan.                                 

8.  EXERCISE OF OPTIONS                                                         

   Each option granted under the Plan shall be exercisable either in full or
in installments at such time or times and during such period as shall be set    
forth in the agreement evidencing such option, subject to the provisions of the 
Plan.                                                                           

9.  NONTRANSFERABILITY OF OPTIONS                                               

    Options shall not be assignable or transferable by the person to whom they
are granted, either voluntarily or by operation of law, except by will or the   
laws of descent and distribution, and, during the life of the optionee, shall be
exercisable only by the optionee; provided, however, that Non-Statutory Options 
may be transferred pursuant to a qualified domestic relations order (as defined 
in Rule 16b-3).                                                                 

10.  EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP                  

Except as provided in Section 11(d) with respect to Incentive Stock   
Options, and subject to the provisions of the Plan, the Board of Directors shall
determine the period of time during which an optionee may exercise an option    
following (i) the termination of the optionee's employment or other relationship
with the Company or (ii) the death or disability of the optionee. Such periods  
shall be set forth in the agreement evidencing such option.                     

11.  INCENTIVE STOCK OPTIONS                                                    

 Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:      

       (a) Express Designation.  All Incentive Stock Options granted under
     the Plan shall, at the time of grant, be specifically designated as such in
the option agreement covering such Incentive Stock Options.           

    (b) 10% Shareholder.  If any employee to whom an Incentive Stock
     Option is to be granted under the Plan is, at the time of the grant of such
   option, the owner of stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company (after taking into
account the                                                           

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   attribution of stock ownership rules of Section 424(d) of the Code), then
     the following special provisions shall be applicable to the Incentive Stock
Option granted to such individual:                                    

         (i) The purchase price per share of the Common Stock subject to
   such Incentive Stock Option shall not be less than 110% of the fair
   market value of one share of Common Stock at the time of grant; and

          (ii) the option exercise period shall not exceed five years from
the date of grant.                                              

     (c) Dollar Limitation.  For so long as the Code shall so provide,
 options granted to any employee under the Plan (and any other incentive
stock option plans of the Company) which are intended to constitute   
     Incentive Stock Options shall not constitute Incentive Stock Options to the
extent that such options, in the aggregate, become exercisable for the
first time in any one calendar year for shares of Common Stock with an
    aggregate fair market value (determined as of the respective date or dates
of grant) of more than $100,000.                                      

     (d) Termination of Employment, Death or Disability.  No Incentive
 Stock Option may be exercised unless, at the time of such exercise, the
  optionee is, and has been continuously since the date of grant of his or
her option, employed by the Company, except that:                     

             (i) an Incentive Stock Option may be exercised within the period of
        three months after the date the optionee ceases to be an employee of the
Company (or within such lesser period as may be specified in the
       applicable option agreement), provided, that the agreement with respect
  to such option may designate a longer exercise period and that the
       exercise after such three-month period shall be treated as the exercise
of a non-statutory option under the Plan;                       

          (ii) if the optionee dies while in the employ of the Company, or
     within three months after the optionee ceases to be such an employee,
       the Incentive Stock Option may be exercised by the person to whom it is
      transferred by will or the laws of descent and distribution within the
        period of one year after the date of death (or within such lesser period
as may be specified in the applicable option agreement); and    

       (iii) if the optionee becomes disabled (within the meaning of
      Section 22(e)(3) of the Code or any successor provision thereto) while
in the employ of the Company, the Incentive Stock Option may be 
   exercised within the period of one year after the date the optionee
        ceases to be such an employee because of such disability (or within such
      lesser period as may be specified in the applicable option agreement).

For all purposes of the Plan and any option granted hereunder, "employment"     
shall be defined in accordance with the provisions of Section 1.421-7(h) of the 
Income Tax Regulations (or any successor regulations). Notwithstanding the      
foregoing provisions, no Incentive Stock Option may be exercised after its      
expiration date.                                                                

12.  ADDITIONAL PROVISIONS                                                      

    (a) Additional Option Provisions.  The Board of Directors may, in its sole
discretion, include additional provisions in option agreements covering options 
granted under the Plan, including without limitation restrictions on transfer,  
repurchase rights, commitments to pay cash bonuses, to make, arrange for or     
guaranty loans or to transfer other property to optionees upon exercise of      
options, or such other provisions as shall be determined by the Board of        
Directors; provided that such additional provisions shall not be inconsistent   
with any other term or condition of the Plan and such additional provisions     
shall not cause any Incentive Stock Option granted under the Plan to fail to    
qualify as an Incentive Stock Option within the meaning of Section 422 of the   
Code.                                                                           

    (b) Acceleration, Extension, Etc.  The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular     
option or options granted under the Plan may be exercised or (ii) extend the    
dates during which all, or any particular, option or options granted under the  
Plan may be exercised.                                                          

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     (c) Vesting Upon Disability or Death.  Upon the death or disability (within
the meaning of Section 22(e)(3) of the Code) of an optionee, all unvested       
options shall immediately vest.                                                 

     (d) Change in Control.  Notwithstanding any other provision of the Plan and
except as otherwise provided in the relevant option agreement, in the event of a
"Change in Control of the Company" (as defined below), the exercise dates of all
options then outstanding shall be accelerated in full and any restrictions on   
exercising outstanding options issued pursuant to the Plan prior to any given   
date shall terminate. For purposes of the Plan, a "Change in Control of the     
Company" shall occur or be deemed to have occurred only if (i) any "person", as 
such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than   
the Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned directly or indirectly by 
the stockholders of the Company in substantially the same proportion as their   
ownership of stock of the Company), is or becomes the "beneficial owner" (as    
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of       
securities of the Company representing 30% or more of the combined voting power 
of the Company's then outstanding securities; (ii) during any period of two     
consecutive years ending during the term of the Plan (not including any period  
prior to the adoption of the Plan), individuals who at the beginning of such    
period constitute the Board of Directors of the Company, and any new director   
(other than a director designated by a person who has entered into an agreement 
with the Company to effect any transaction described in clause (i), (iii) or    
(iv) of this Section 12(d) whose election by the Board of Directors or          
nomination for election by the Company's stockholders was approved by a vote of 
at least two-thirds of the directors then still in office who were either       
directors at the beginning of the period or whose election or whose nomination  
for election was previously so approved (collectively, the "Disinterested       
Directors"), cease for any reason to constitute a majority of the Board of      
Directors; (iii) the stockholders of the Company approve a merger or            
consolidation of the Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities of the Company     
outstanding immediately prior thereto continuing to represent (either by        
remaining outstanding or by being converted into voting securities of the       
surviving entity) more than 50% of the combined voting power of the voting      
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation effected to       
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 30% of the combined voting 
power of the Company's then outstanding securities or (C) a merger or           
consolidation which has been approved by a majority of the Disinterested        
Directors; or (iv) the stockholders of the Company approve a plan of complete   
liquidation of the Company or an agreement for the sale or disposition by the   
Company of all or substantially all of the Company's assets which, in either    
case, has not previously been approved by a majority of the Disinterested       
Directors. Notwithstanding the foregoing, the Board of Directors of the Company 
may, in its sole discretion, by a resolution adopted by two-thirds of the       
Disinterested Directors prior to the occurrence of any of the events otherwise  
constituting a Change in Control of the Company, declare that such event will   
not constitute a Change in Control of the Company for the purposes of the Plan. 
If such resolution is adopted, such event shall not constitute a Change in      
Control of the Company for any purpose of the Plan.                             

13.  GENERAL RESTRICTIONS                                                       

     (a) Investment Representations.  The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written 
assurances in substance and form satisfactory to the Company to the effect that 
such person is acquiring the Common Stock subject to the option for his or her  
own account for investment and not with any present intention of selling or     
otherwise distributing the same, and to such other effects as the Company deems 
necessary or appropriate in order to comply with federal and applicable state   
securities laws, or with covenants or representations made by the Company in    
connection with any public offering of its Common Stock.                        

   (b) Compliance With Securities Laws.  Each option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that   
the listing, registration or qualification of the shares subject to such option 
upon any securities exchange or under any state or federal law, or the consent  
or approval of any governmental or regulatory body, or that the disclosure of   
non-public information or the satisfaction of any other condition is necessary  
as a condition of, or in connection with, the issuance or purchase of shares    

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thereunder, such option may not be exercised, in whole or in part, unless such  
listing, registration, qualification, consent or approval, or satisfaction of   
such condition shall have been effected or obtained on conditions acceptable to 
the Board of Directors. Nothing herein shall be deemed to require the Company to
apply for or to obtain such listing, registration or qualification, or to       
satisfy such condition.                                                         

14.  RIGHTS AS A SHAREHOLDER                                                    

    The holder of an option shall have no rights as a shareholder with respect
to any shares covered by the option (including, without limitation, any rights  
to receive dividends or non-cash distributions with respect to such shares)     
until the date of issue of a stock certificate to him or her for such shares. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.                          

15.  ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS AND RELATED TRANSACTIONS       

     (a) General.  If, through or as a result of any merger, consolidation, sale
of all or substantially all of the assets of the Company, reorganization,       
recapitalization, reclassification, stock dividend, stock split, reverse stock  
split or other similar transaction, (i) the outstanding shares of Common Stock  
are increased, decreased or exchanged for a different number or kind of shares  
or other securities of the Company, or (ii) additional shares or new or         
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an 
appropriate and proportionate adjustment may be made in (x) the maximum number  
and kind of shares reserved for issuance under the Plan, (y) the number and kind
of shares or other securities subject to any then outstanding options under the 
Plan, and (z) the price for each share subject to any then outstanding options  
under the Plan, without changing the aggregate purchase price as to which such  
options remain exercisable. Notwithstanding the foregoing, no adjustment shall  
be made pursuant to this Section 15 if such adjustment would cause the Plan to  
fail to comply with Section 422 of the Code.                                    

(b) Board Authority to Make Adjustments.  Any adjustments under this  
Section 15 will be made by the Board of Directors, whose determination as to    
what adjustments, if any, will be made and the extent thereof will be final,    
binding and conclusive. No fractional shares will be issued under the Plan on   
account of any such adjustments.                                                

16.  MERGER, CONSOLIDATION, ASSET SALE, LIQUIDATION, ETC.                       

   (a) General.  In the event of a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares of   
Common Stock are exchanged for securities, cash or other property of any other  
corporation or business entity or in the event of a liquidation of the Company, 
the Board of Directors of the Company, or the board of directors of any         
corporation assuming the obligations of the Company, may, in its discretion,    
take any one or more of the following actions, as to outstanding options: (i)   
provide that such options shall be assumed, or equivalent options shall be      
substituted, by the acquiring or succeeding corporation (or an affiliate        
thereof), provided that any such options substituted for Incentive Stock Options
shall meet the requirements of Section 424(a) of the Code, (ii) upon written    
notice to the optionees, provide that all unexercised options will terminate    
immediately prior to the consummation of such transaction unless exercised by   
the optionee within a specified period following the date of such notice, (iii) 
in the event of a merger under the terms of which holders of the Common Stock of
the Company will receive upon consummation thereof a cash payment for each share
surrendered in the merger (the "Merger Price"), make or provide for a cash      
payment to the optionees equal to the difference between (A) the Merger Price   
times the number of shares of Common Stock subject to such outstanding options  
(to the extent then exercisable at prices not in excess of the Merger Price) and
(B) the aggregate exercise price of all such outstanding options in exchange for
the termination of such options, and (iv) provide that all or any outstanding   
options shall become exercisable in full immediately prior to such event.       

  (b) Substitute Options.  The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become    
employees of the Company, or a subsidiary of the Company, as the result of a    
merger or consolidation of the employing corporation with the Company or a      
subsidiary of                                                                   

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the Company, or as a result of the acquisition by the Company, or one of its    
subsidiaries, of property or stock of the employing corporation. The Company may
direct that substitute options be granted on such terms and conditions as the   
Board of Directors considers appropriate in the circumstances.                  

17.  NO SPECIAL EMPLOYMENT RIGHTS                                               

Nothing contained in the Plan or in any option shall confer upon any  
optionee any right with respect to the continuation of his or her employment by 
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the    
optionee.                                                                       

18.  OTHER EMPLOYEE BENEFITS                                                    

Except as to plans which by their terms include such amounts as       
compensation, the amount of any compensation deemed to be received by an        
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any   
other employee benefits of such employee are determined, including, without     
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the    
Board of Directors.                                                             

19.  AMENDMENT OF THE PLAN                                                      

   (a) The Board of Directors may at any time, and from time to time, modify
or amend the Plan in any respect, except that if at any time the approval of the
shareholders of the Company is required under Section 422 of the Code or any    
successor provision with respect to Incentive Stock Options, or under Rule      
16b-3, the Board of Directors may not effect such modification or amendment     
without such approval.                                                          

     (b) The termination or any modification or amendment of the Plan shall not,
without the consent of an optionee, affect his or her rights under an option    
previously granted to him or her. With the consent of the optionee affected, the
Board of Directors may amend outstanding option agreements in a manner not      
inconsistent with the Plan. The Board of Directors shall have the right to amend
or modify (i) the terms and provisions of the Plan and of any outstanding       
Incentive Stock Options granted under the Plan to the extent necessary to       
qualify any or all such options for such favorable federal income tax treatment 
(including deferral of taxation upon exercise) as may be afforded incentive     
stock options under Section 422 of the Code and (ii) the terms and provisions of
the Plan and of any outstanding option to the extent necessary to ensure the    
qualification of the Plan under Rule 16b-3. The provisions of Section 3(c),     
above, which relate to formula grants to outside directors may not be amended   
more than once every six months, other than to comport with changes in the Code,
the Employee Retirement Income Security Act of 1974, or the rules thereunder.   

20.  WITHHOLDING                                                                

  (a) The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind     
required by law to be withheld with respect to any shares issued upon exercise  
of options under the Plan. Subject to the prior approval of the Company, which  
may be withheld by the Company in its sole discretion, the optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to    
withhold shares of Common Stock otherwise issuable pursuant to the exercise of  
an option or (ii) by delivering to the Company shares of Common Stock already   
owned by the optionee. The shares so delivered or withheld shall have a fair    
market value equal to such withholding obligation. The fair market value of the 
shares used to satisfy such withholding obligation shall be determined by the   
Company as of the date that the amount of tax to be withheld is to be           
determined. An optionee who has made an election pursuant to this Section 20(a) 
may only satisfy his or her withholding obligation with shares of Common Stock  
which are not subject to any repurchase, forfeiture, unfulfilled vesting or     
other similar requirements.                                                     

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  (b) Notwithstanding the foregoing, in the case of a Reporting Person, no
election to use shares for the payment of withholding taxes shall be effective  
unless made in compliance with any applicable requirements of Rule 16b-3 (unless
it is intended that the transaction not qualify for exemption under Rule 16b-3).

21.  CANCELLATION AND NEW GRANT OF OPTIONS, ETC.                                

    The Board of Directors shall have the authority to effect, at any time and
from time to time, with the consent of the affected optionees, (i) the          
cancellation of any or all outstanding options under the Plan and the grant in  
substitution therefor of new options under the Plan covering the same or        
different numbers of shares of Common Stock and having an option exercise price 
per share which may be lower or higher than the exercise price per share of the 
cancelled options or (ii) the amendment of the terms of any and all outstanding 
options under the Plan to provide an option exercise price per share which is   
higher or lower than the then-current exercise price per share of such          
outstanding options.                                                            

22.  EFFECTIVE DATE AND DURATION OF THE PLAN                                    

  (a) Effective Date.  The Plan shall become effective when adopted by the
Board of Directors, but no option granted under the Plan shall become           
exercisable unless and until the Plan shall have been approved by the Company's 
shareholders. If such shareholder approval is not obtained within twelve months 
after the date of the Board's adoption of the Plan, options previously granted  
under the Plan shall not vest and shall terminate and no options shall be       
granted thereafter. Amendments to the Plan not requiring shareholder approval   
shall become effective when adopted by the Board of Directors; amendments       
requiring shareholder approval (as provided in Section 19) shall become         
effective when adopted by the Board of Directors, but no option granted after   
the date of such amendment shall become exercisable (to the extent that such    
amendment to the Plan was required to enable the Company to grant such option to
a particular person) unless and until such amendment shall have been approved by
the Company's shareholders. If such shareholder approval is not obtained within 
twelve months of the Board's adoption of such amendment, any options granted on 
or after the date of such amendment shall terminate to the extent that such     
amendment was required to enable the Company to grant such option to a          
particular optionee. Subject to this limitation, options may be granted under   
the Plan at any time after the effective date and before the date fixed for     
termination of the Plan.                                                        

   (b) Termination.  Unless sooner terminated in accordance with Section 16,
the Plan shall terminate upon the close of business on the day next preceding   
the tenth anniversary of the date of its adoption by the Board of Directors.    
Options outstanding on such date shall continue to have force and effect in     
accordance with the provisions of the instruments evidencing such options.      

23.  PROVISION FOR FOREIGN PARTICIPANTS                                         

 The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside   
the United States to recognize differences in laws, rules, regulations or       
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.                                              

                                        Adopted by the Board of Directors on
                   April 16, 1996.

                                       Approved by the Sole Stockholder on
                   April 16, 1996.

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B3’ Filing		Date		First		Last			Other Filings
		10/31/18		28		77
		10/31/10		27		77
		4/15/06		55
		11/3/05		47
		12/31/98		26		78			10-K,  5
		11/1/98		28		77
		9/30/98		46					10-Q
		8/1/98		34		41
		1/31/98		31
		12/31/97		27		78			10-K,  10-K/A
		8/31/97		32
		8/1/97		40
		4/24/97		40		41
		4/16/97		58
		12/31/96		11		67			10-K
		11/22/96		58
		10/31/96		28		77
		9/30/96		27		78			10-Q
		9/15/96		30		75
		8/1/96		40
		7/9/96		21
		7/5/96		2
		7/2/96		1		17
Filed on:		6/12/96		2
		6/10/96		2					S-4/A
		6/5/96		26
		5/28/96		1		97
		5/23/96		2		56
		5/3/96		7		60
		5/1/96		34		67
		4/30/96		15		80
		4/16/96		10		114
		4/8/96		95
		3/31/96		11		96
		2/28/96		28
		2/15/96		27		78
		2/14/96		98
		1/26/96		62
		1/18/96		80
		1/16/96		43
		1/2/96		38
		1/1/96		27		80
		12/31/95		11		80
		12/22/95		30		75
		12/15/95		79		80
		11/23/95		69
		11/13/95		29
		11/9/95		28
		11/3/95		26		78
		8/1/95		27		40
		7/13/95		43
		4/24/95		33		79
		4/18/95		12
		4/17/95		12		46
		3/31/95		11		67
		3/2/95		28
		2/18/95		33
		1/27/95		12
		12/31/94		11		79
		12/22/94		33
		11/24/94		11		79
		11/23/94		6		94
		11/18/94		30		74
		11/4/94		69
		9/9/94		11		69
		8/31/94		32
		7/1/94		88
		6/30/94		84		86
		5/23/94		68
		5/13/94		84		86
		4/7/94		33		86
		4/1/94		33
		3/25/94		88
		3/11/94		68		86
		2/15/94		84		86
		2/11/94		11		59
		1/1/94		11		79
		12/31/93		11		94
		12/1/93		92
		11/26/93		58
		11/1/93		88
		10/30/93		32
		8/31/93		88
		5/15/93		91
		5/1/93		27		77
		4/13/93		93
		4/1/93		27		77
		3/5/93		68		88
		2/5/93		79		91
		12/31/92		11		93
		12/30/92		86
		11/18/92		85
		11/15/92		32		91
		10/5/92		92
		10/1/92		74
		9/30/92		88
		9/8/92		88
		7/21/92		88
		6/29/92		26
		6/19/92		31
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